Foreign currency translation adjustments

  
The following table shows the profit and cost sharing relationship between Genentech and AbbVie:

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  |  | Three months endedMarch 31, |
| (in millions) |  |  |  |  |  | 2022 |  | 2021 |
| Genentech's share of profits, including royalties (included in cost of products sold) |  |  |  |  |  | $ | 178  |  |  | $ | 159  |  |
| AbbVie's share of sales and marketing costs from U.S. collaboration (included in SG&A) |  |  |  |  |  | 12  |  |  | 11  |  |
| AbbVie's share of development costs (included in R&D) |  |  |  |  |  | 27  |  |  | 42  |  |

Note 6 Goodwill and Intangible Assets

|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |

GoodwillThe following table summarizes the changes in the carrying amount of goodwill:

|  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |
| (in millions) |  |
| Balance as of December 31, 2021 | $ | 32,379  |  |
| Foreign currency translation adjustments | (81) |  |
| Balance as of March 31, 2022 | $ | 32,298  |  |

The company performs its annual goodwill impairment assessment in the third quarter, or earlier if impairment indicators exist. As of March 31, 2022, there were no accumulated goodwill impairment losses.Intangible Assets, NetThe following table summarizes intangible assets:

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | March 31, 2022 |  | December 31, 2021 |
| (in millions) | Gross carrying amount |  | Accumulated amortization |  | Net carrying amount |  | Gross carrying amount |  | Accumulated amortization |  | Net carrying amount |
| Definite-lived intangible assets |  |  |  |  |  |  |  |  |  |  |  |
| Developed product rights | $ | 88,811  |  |  | $ | (20,095) |  |  | $ | 68,716  |  |  | $ | 88,945  |  |  | $ | (18,463) |  |  | $ | 70,482  |  |
| License agreements | 8,493  |  |  | (3,893) |  |  | 4,600  |  |  | 8,487  |  |  | (3,688) |  |  | 4,799  |  |
| Total definite-lived intangible assets | 97,304  |  |  | (23,988) |  |  | 73,316  |  |  | 97,432  |  |  | (22,151) |  |  | 75,281  |  |
| Indefinite-lived intangible assets | 670  |  |  | —  |  |  | 670  |  |  | 670  |  |  | —  |  |  | 670  |  |
| Total intangible assets, net | $ | 97,974  |  |  | $ | (23,988) |  |  | $ | 73,986  |  |  | $ | 98,102  |  |  | $ | (22,151) |  |  | $ | 75,951  |  |

Definite-Lived Intangible AssetsAmortization expense was $1.9 billion for the three months ended March 31, 2022 and $2.0 billion for the three months ended March 31, 2021. Amortization expense was included in cost of products sold in the condensed consolidated statements of earnings.Indefinite-Lived Intangible AssetsIndefinite-lived intangible assets represent in-process research and development associated with products that have not yet received regulatory approval. The company performs its annual impairment assessment of indefinite-lived intangible assets in the third quarter, or earlier if impairment indicators exist.Note 7 Integration and Restructuring Plans

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| --- | --- | --- |
|  |  |  |
|  |

Allergan Integration Plan Following the closing of the Allergan acquisition, AbbVie implemented an integration plan designed to reduce costs, integrate and optimize the combined organization. To achieve these integration objectives, AbbVie expects to incur total cumulative charges of approximately $2 billion through 2022. These costs consist of severance and employee benefit costs (cash severance, non-cash severance including accelerated equity award compensation expense, retention and other termination benefits) and other integration expenses.

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| --- | --- | --- | --- | --- | --- |
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| 2022 Form 10-Q | abbv-20220331_g2.gif | 9 |


