Company: ABBV
Filing Date: 2025-08-04
Form Type: 10-Q
Source: 0001551152-25-000040
Chunk: 49

Company: AbbVie Inc.
Filing Date: 2025-08-04
Form: 10-Q
Item: Part I, Item 1
Chunk 49
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 The increase in the effective tax rate for the three months and six months ended June 30, 2025 over the prior year was primarily due to changes in fair value of contingent consideration offset by changes in jurisdictional mix of earnings and business development activities. 

Subsequent to June 30, 2025, on July 4, 2025, the United States government signed into law the One Big Beautiful Bill Act of 2025 (2025 Act). Included within the 2025 Act are certain new tax provisions, limitations and modifications to existing tax provisions that were previously enacted under the Tax Cuts and Jobs Act of 2017, including rules related to the taxation of income earned outside of the United States and the tax treatment of domestic performed research and development costs. In addition, the legislation contains various effective dates and transition elections. AbbVie is currently evaluating the impact of the 2025 Act on its consolidated financial statements. 

Note 12 Legal Proceedings and Contingencies AbbVie is subject to contingencies, such as various claims, legal proceedings and investigations regarding product liability, intellectual property, commercial, securities and other matters that arise in the normal course of business. Loss contingency provisions are recorded for probable losses at management’s best estimate of a loss, or when a best estimate cannot be made, a minimum loss contingency amount within a probable range is recorded. The recorded accrual balance for litigation was approximately $1.8 billion as of June 30, 2025 and $2.5 billion as of December 31, 2024. For litigation matters discussed below for which a loss is probable or reasonably possible, the company is unable to estimate the possible loss or range of loss, if any, beyond the amounts accrued. Initiation of new legal proceedings or a change in the status of existing proceedings may result in a change in the estimated loss accrued by AbbVie. While it is not feasible to predict the outcome of all proceedings and exposures with certainty, management believes that their ultimate disposition should not have a material adverse effect on AbbVie’s consolidated financial position, results of operations or cash flows.

Subject to certain exceptions specified in the separation agreement by and between Abbott Laboratories (Abbott) and AbbVie, AbbVie assumed the liability for, and control of, all pending and threatened legal matters related to its business, including liabilities for any claims or legal proceedings related to products that had been part of its business, but were discontinued prior to the distribution, as well as assumed or retained liabilities, and