Company: ABBV
Filing Date: 2025-02-14
Form Type: 10-K
Source: 0001551152-25-000020
Chunk: 71

Company: AbbVie Inc.
Filing Date: 2025-02-14
Form: 10-K
Item: Item 3
Chunk 71
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 tax.

 In 2022, Puerto Rico enacted Act 52-2002 (the Puerto Rico Act) allowing for a transition from a Puerto Rico excise tax levied on gross inventory purchases to an income-based tax beginning in 2023. The company completed the transition 

2024 Form 10-K   |  42

requirements of the Puerto Rico Act in 2022, resulting in the remeasurement of certain deferred tax assets and liabilities based on income tax rates at which they are expected to reverse in the future. The net tax benefit recognized in 2022 from the remeasurement of deferred taxes related to the Puerto Rico Act was $323 million.

Our net earnings and cash flows could be affected by future tax policy and law changes in the jurisdictions in which we operate, including changes in tax law related to the projects undertaken by the Organization for Economic Cooperation and Development (OECD). These projects include a global minimum tax rate of 15%, referred to as "Pillar Two", and the creation of a new global system to tax income based on the location to which products are sold, referred to as "Pillar One." Numerous countries have agreed to a statement in support of the OECD model rules and European Union member states have agreed to implement Pillar Two. This implementation includes aspects of legislation that were effective starting in 2024. Significant details around the provision are still emerging. These potential changes increase tax uncertainty and may adversely impact income tax expense in future years. We will continue to monitor pending legislation and implementation by individual countries and evaluate the potential impact on our business in future periods.

FINANCIAL POSITION, LIQUIDITY AND CAPITAL RESOURCES years ended December 31 (in millions)202420232022Cash flows provided by (used in)Operating activities$18,806 $22,839 $24,943 Investing activities(20,820)(2,009)(623)Financing activities(5,211)(17,222)(24,803)

Operating cash flows in 2024 decreased compared to the prior year primarily due to the timing of working capital and higher contingent consideration payments classified as operating cash flows, partially offset by increased results from operations driven by higher net revenues. Operating cash flows also reflected AbbVie’s contributions to its defined benefit plans of $326 million in 2024 and $366 million in 2023.

Investing cash flows in 2024 included $18.5 billion cash consideration paid to acquire ImmunoGen and Cerevel Ther