AbbVie Inc. (ABBV)

Income Tax Accounting Policy
Income Tax Expense (Benefit)
Effective Income Tax Rate (EITR)
Components of Deferred Tax Assets and Liabilities
Analyst Adjustments: Removal of Deferred Taxes
Adjusted Ratios: Removal of Deferred Taxes (Summary)
Adjusted Current Ratio
Adjusted Net Profit Margin
Adjusted Total Asset Turnover
Adjusted Financial Leverage
Adjusted Return on Equity (ROE)
Adjusted Return on Assets (ROA)

Income taxes are accounted for under the asset and liability method. Provisions for federal, state and foreign income taxes are calculated on reported pretax earnings based on current tax laws. Deferred taxes are provided using enacted tax rates on the future tax consequences of temporary differences, which are the differences between the financial statement carrying amounts of assets and liabilities and their respective tax bases and the tax benefits of carryforwards. A valuation allowance is established or maintained when, based on currently available information, it is more likely than not that all or a portion of a deferred tax asset will not be realized.

Source: 10-K (filing date: 2018-02-16).

AbbVie Inc., income tax expense (benefit), continuing operations

USD $ in millions

	12 months ended	Dec 31, 2017		Dec 31, 2016		Dec 31, 2015		Dec 31, 2014		Dec 31, 2013
	Domestic
	Foreign
	Current taxes
	Domestic
	Foreign
	Deferred taxes
	Income tax expense

Based on: 10-K (filing date: 2018-02-16), 10-K (filing date: 2017-02-17), 10-K (filing date: 2016-02-19), 10-K (filing date: 2015-02-20), 10-K (filing date: 2014-02-21).

Item	Description	The company
Current taxes	Amount of current income tax expense (benefit) pertaining to taxable income (loss) from continuing operations.	AbbVie Inc.'s current taxes increased from 2015 to 2016 and from 2016 to 2017.
Deferred taxes	Amount of deferred income tax expense (benefit) pertaining to income (loss) from continuing operations.	AbbVie Inc.'s deferred taxes declined from 2015 to 2016 and from 2016 to 2017.
Income tax expense	Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.	AbbVie Inc.'s income tax expense increased from 2015 to 2016 and from 2016 to 2017.

AbbVie Inc., effective income tax rate (EITR) reconciliation

		Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013
	Statutory tax rate
	Effect of foreign operations
	U.S. tax credits
	Impacts related to U.S. tax reform
	Tax law change related to foreign currency
	All other, net
	Effective tax rate

Based on: 10-K (filing date: 2018-02-16), 10-K (filing date: 2017-02-17), 10-K (filing date: 2016-02-19), 10-K (filing date: 2015-02-20), 10-K (filing date: 2014-02-21).

Item	Description	The company
Effective tax rate	Percentage of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.	AbbVie Inc.'s effective tax rate increased from 2015 to 2016 and from 2016 to 2017.

AbbVie Inc., components of deferred tax assets and liabilities

USD $ in millions

		Dec 31, 2017		Dec 31, 2016		Dec 31, 2015		Dec 31, 2014		Dec 31, 2013
	Compensation and employee benefits
	Accruals and reserves
	Chargebacks and rebates
	Deferred revenue
	Net operating losses and other credit carryforwards
	Other
	Deferred tax assets
	Valuation allowances
	Net deferred tax assets
	Excess of book basis over tax basis of intangible assets
	Excess of book basis over tax basis in investments
	Other
	Deferred tax liabilities
	Net deferred tax assets (liabilities)

Based on: 10-K (filing date: 2018-02-16), 10-K (filing date: 2017-02-17), 10-K (filing date: 2016-02-19), 10-K (filing date: 2015-02-20), 10-K (filing date: 2014-02-21).

Item	Description	The company
Deferred tax assets	Amount before allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards.	AbbVie Inc.'s deferred tax assets declined from 2015 to 2016 and from 2016 to 2017.
Net deferred tax assets	Amount after allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards.	AbbVie Inc.'s net deferred tax assets declined from 2015 to 2016 and from 2016 to 2017.
Net deferred tax assets (liabilities)	Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, without jurisdictional netting.	AbbVie Inc.'s net deferred tax assets (liabilities) declined from 2015 to 2016 but then increased from 2016 to 2017 exceeding 2015 level.

AbbVie Inc., adjustments to financial data

USD $ in millions

		Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013
	Adjustment to Current Assets
	Current assets (as reported)
	Less: Current deferred tax assets, net
	Current assets (adjusted)
	Adjustment to Total Assets
	Total assets (as reported)
	Less: Current deferred tax assets, net
	Total assets (adjusted)
	Adjustment to Total Liabilities
	Total liabilities (as reported)
	Less: Noncurrent deferred tax liabilities, net
	Total liabilities (adjusted)
	Adjustment to Stockholders' Equity
	Stockholders' equity (as reported)
	Less: Net deferred tax assets (liabilities)
	Stockholders' equity (adjusted)
	Adjustment to Net Earnings
	Net earnings (as reported)
	Add: Deferred income tax expense (benefit)
	Net earnings (adjusted)

Based on: 10-K (filing date: 2018-02-16), 10-K (filing date: 2017-02-17), 10-K (filing date: 2016-02-19), 10-K (filing date: 2015-02-20), 10-K (filing date: 2014-02-21).

AbbVie Inc., Financial Data: Reported vs. Adjusted

AbbVie Inc., adjusted ratios

		Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013
	Current Ratio
	Reported current ratio
	Adjusted current ratio
	Net Profit Margin
	Reported net profit margin
	Adjusted net profit margin
	Total Asset Turnover
	Reported total asset turnover
	Adjusted total asset turnover
	Financial Leverage
	Reported financial leverage
	Adjusted financial leverage
	Return on Equity (ROE)
	Reported ROE
	Adjusted ROE
	Return on Assets (ROA)
	Reported ROA
	Adjusted ROA

Based on: 10-K (filing date: 2018-02-16), 10-K (filing date: 2017-02-17), 10-K (filing date: 2016-02-19), 10-K (filing date: 2015-02-20), 10-K (filing date: 2014-02-21).

Ratio	Description	The company
Adjusted current ratio	A liquidity ratio calculated as adjusted current assets divided by adjusted current liabilities.	AbbVie Inc.'s adjusted current ratio improved from 2015 to 2016 but then deteriorated significantly from 2016 to 2017.
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by total revenue.	AbbVie Inc.'s adjusted net profit margin deteriorated from 2015 to 2016 and from 2016 to 2017.
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	AbbVie Inc.'s adjusted total asset turnover deteriorated from 2015 to 2016 but then slightly improved from 2016 to 2017.
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	AbbVie Inc.'s adjusted financial leverage declined from 2015 to 2016 but then increased from 2016 to 2017 exceeding 2015 level.
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by adjusted shareholders' equity.	AbbVie Inc.'s adjusted ROE deteriorated from 2015 to 2016 and from 2016 to 2017.
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by adjusted total assets.	AbbVie Inc.'s adjusted ROA deteriorated from 2015 to 2016 and from 2016 to 2017.

AbbVie Inc., Ratios: Reported vs. Adjusted

		Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013
	As Reported
	Selected Financial Data (USD $ in millions)
	Current assets
	Current liabilities
	Ratio
	Current ratio¹
	Adjusted for Deferred Taxes
	Selected Financial Data (USD $ in millions)
	Adjusted current assets
	Current liabilities
	Ratio
	Adjusted current ratio²

Based on: 10-K (filing date: 2018-02-16), 10-K (filing date: 2017-02-17), 10-K (filing date: 2016-02-19), 10-K (filing date: 2015-02-20), 10-K (filing date: 2014-02-21).

2017 Calculations

¹ Current ratio = Current assets ÷ Current liabilities
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² Adjusted current ratio = Adjusted current assets ÷ Current liabilities
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Ratio	Description	The company
Adjusted current ratio	A liquidity ratio calculated as adjusted current assets divided by adjusted current liabilities.	AbbVie Inc.'s adjusted current ratio improved from 2015 to 2016 but then deteriorated significantly from 2016 to 2017.

		Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013
	As Reported
	Selected Financial Data (USD $ in millions)
	Net earnings
	Net revenues
	Ratio
	Net profit margin¹
	Adjusted for Deferred Taxes
	Selected Financial Data (USD $ in millions)
	Adjusted net earnings
	Net revenues
	Ratio
	Adjusted net profit margin²

Based on: 10-K (filing date: 2018-02-16), 10-K (filing date: 2017-02-17), 10-K (filing date: 2016-02-19), 10-K (filing date: 2015-02-20), 10-K (filing date: 2014-02-21).

2017 Calculations

¹ Net profit margin = 100 × Net earnings ÷ Net revenues
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² Adjusted net profit margin = 100 × Adjusted net earnings ÷ Net revenues
= 100 × hidden ÷ hidden = hidden

Ratio	Description	The company
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by total revenue.	AbbVie Inc.'s adjusted net profit margin deteriorated from 2015 to 2016 and from 2016 to 2017.

		Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013
	As Reported
	Selected Financial Data (USD $ in millions)
	Net revenues
	Total assets
	Ratio
	Total asset turnover¹
	Adjusted for Deferred Taxes
	Selected Financial Data (USD $ in millions)
	Net revenues
	Adjusted total assets
	Ratio
	Adjusted total asset turnover²

Based on: 10-K (filing date: 2018-02-16), 10-K (filing date: 2017-02-17), 10-K (filing date: 2016-02-19), 10-K (filing date: 2015-02-20), 10-K (filing date: 2014-02-21).

2017 Calculations

¹ Total asset turnover = Net revenues ÷ Total assets
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² Adjusted total asset turnover = Net revenues ÷ Adjusted total assets
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Ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	AbbVie Inc.'s adjusted total asset turnover deteriorated from 2015 to 2016 but then slightly improved from 2016 to 2017.

		Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013
	As Reported
	Selected Financial Data (USD $ in millions)
	Total assets
	Stockholders' equity
	Ratio
	Financial leverage¹
	Adjusted for Deferred Taxes
	Selected Financial Data (USD $ in millions)
	Adjusted total assets
	Adjusted stockholders' equity
	Ratio
	Adjusted financial leverage²

Based on: 10-K (filing date: 2018-02-16), 10-K (filing date: 2017-02-17), 10-K (filing date: 2016-02-19), 10-K (filing date: 2015-02-20), 10-K (filing date: 2014-02-21).

2017 Calculations

¹ Financial leverage = Total assets ÷ Stockholders' equity
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² Adjusted financial leverage = Adjusted total assets ÷ Adjusted stockholders' equity
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Ratio	Description	The company
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	AbbVie Inc.'s adjusted financial leverage declined from 2015 to 2016 but then increased from 2016 to 2017 exceeding 2015 level.

		Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013
	As Reported
	Selected Financial Data (USD $ in millions)
	Net earnings
	Stockholders' equity
	Ratio
	ROE¹
	Adjusted for Deferred Taxes
	Selected Financial Data (USD $ in millions)
	Adjusted net earnings
	Adjusted stockholders' equity
	Ratio
	Adjusted ROE²

Based on: 10-K (filing date: 2018-02-16), 10-K (filing date: 2017-02-17), 10-K (filing date: 2016-02-19), 10-K (filing date: 2015-02-20), 10-K (filing date: 2014-02-21).

2017 Calculations

¹ ROE = 100 × Net earnings ÷ Stockholders' equity
= 100 × hidden ÷ hidden = hidden

² Adjusted ROE = 100 × Adjusted net earnings ÷ Adjusted stockholders' equity
= 100 × hidden ÷ hidden = hidden

Ratio	Description	The company
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by adjusted shareholders' equity.	AbbVie Inc.'s adjusted ROE deteriorated from 2015 to 2016 and from 2016 to 2017.

		Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013
	As Reported
	Selected Financial Data (USD $ in millions)
	Net earnings
	Total assets
	Ratio
	ROA¹
	Adjusted for Deferred Taxes
	Selected Financial Data (USD $ in millions)
	Adjusted net earnings
	Adjusted total assets
	Ratio
	Adjusted ROA²

Based on: 10-K (filing date: 2018-02-16), 10-K (filing date: 2017-02-17), 10-K (filing date: 2016-02-19), 10-K (filing date: 2015-02-20), 10-K (filing date: 2014-02-21).

2017 Calculations

¹ ROA = 100 × Net earnings ÷ Total assets
= 100 × hidden ÷ hidden = hidden

² Adjusted ROA = 100 × Adjusted net earnings ÷ Adjusted total assets
= 100 × hidden ÷ hidden = hidden

Ratio	Description	The company
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by adjusted total assets.	AbbVie Inc.'s adjusted ROA deteriorated from 2015 to 2016 and from 2016 to 2017.

	AbbVie Inc.	Other companies (not purchased previously)
Financial Statements
Common-Size Financial Statements
Ratios
Relative Valuation
Discounted Cash Flow (DCF) Valuation
Economic Value Added (EVA)
Long-term Trends
Analysis
Financial Reporting Quality

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Financial Statements
Common-Size Financial Statements
Ratios
Relative Valuation
Discounted Cash Flow (DCF) Valuation
Economic Value Added (EVA)
Long-term Trends
Analysis
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Analysis of Income Taxes

Income Tax Accounting Policy

Income Tax Expense (Benefit)

Effective Income Tax Rate (EITR)

Components of Deferred Tax Assets and Liabilities

Analyst Adjustments: Removal of Deferred Taxes

AbbVie Inc., Financial Data: Reported vs. Adjusted

Adjusted Ratios: Removal of Deferred Taxes (Summary)

AbbVie Inc., Ratios: Reported vs. Adjusted

Adjusted Current Ratio

Adjusted Net Profit Margin

Adjusted Total Asset Turnover

Adjusted Financial Leverage

Adjusted Return on Equity (ROE)

Adjusted Return on Assets (ROA)