Company: ABBV
Filing Date: 2025-02-14
Form Type: 10-K
Source: 0001551152-25-000020
Chunk: 343

Company: AbbVie Inc.
Filing Date: 2025-02-14
Form: 10-K
Item: Item 8
Chunk 343
---
 period. The fair value of the company's contingent consideration liabilities was calculated using the following significant unobservable inputs:20242023years ended December 31 (in millions)RangeWeighted Average(a)RangeWeighted Average(a)Discount rate4.6% - 5.2%4.8%4.3% - 5.9%4.5 %Probability of payment for royalties by indication(b)100%100%89% - 100%99 %Projected year of payments2025 - 203420292024 - 20342027(a)Unobservable inputs were weighted by the relative fair value of the contingent consideration liabilities.(b)Excluding approved indications, the estimated probability of payment was 89% at December 31, 2023.There have been no transfers of assets or liabilities into or out of Level 3 of the fair value hierarchy. The following table presents the changes in fair value of contingent consideration liabilities which are measured using Level 3 inputs:years ended December 31 (in millions)202420232022Beginning balance$19,890 $16,384 $14,887 Additions(a)— — 32 Change in fair value recognized in net earnings3,771 5,128 2,761 Payments(1,995)(1,622)(1,296)Ending balance$21,666 $19,890 $16,384 (a)Additions during the year ended December 31, 2022, represent contingent consideration liabilities assumed in the DJS acquisition.The change in fair value recognized in net earnings is recorded in other expense, net in the consolidated statements of earnings and included charges of $3.8 billion in 2024, $5.1 billion in 2023 and $2.8 billion in 2022. In 2024, the change in fair value reflected higher estimated Skyrizi sales and the passage of time, partially offset by higher discount rates. In 2023, the change in fair value reflected higher estimated Skyrizi sales driven by stronger market share uptake, the passage of time and lower discount rates. In 2022, the change in fair value reflected higher estimated Skyrizi sales driven by stronger market share uptake and the passage of time, partially offset by higher discount rates. Contingent consideration payments of amounts up to the initial acquisition date fair value are classified as cash outflows from financing activities and payments of amounts in excess of the initial acquisition date fair value are classified