AbbVie Inc. (NYSE:ABBV)

Current Taxes

The current tax expense has demonstrated a notable upward trend between 2020 and 2023, increasing from 1,101 million US dollars in 2020 to a peak of 4,266 million US dollars in 2023. However, this figure exhibits a significant drop in 2024, declining sharply to 879 million US dollars, suggesting a substantial reduction in taxable income or changes in tax policies impacting current tax liabilities during the latest period.

Deferred Taxes

The deferred tax figures are consistently negative over the reported years, indicating a deferred tax benefit rather than an expense. From 2020 to 2023, there is considerable fluctuation, with the deferred tax benefit decreasing from -2,325 million US dollars in 2020 to -898 million in 2021, then again becoming more substantial at -1,931 million in 2022 and reaching -2,889 million in 2023. In 2024, the deferred tax benefit lessens substantially to -1,449 million US dollars. These fluctuations suggest changing expectations regarding future taxable income or timing differences in recognizing tax liabilities and assets.

Income Tax Expense (Benefit)

The overall income tax expense shows considerable volatility throughout the five-year period. In 2020, a tax benefit of -1,224 million US dollars was recorded, shifting into tax expense territory from 2021 through 2023 with values of 1,440 million, 1,632 million, and 1,377 million US dollars respectively. The year 2024 again records a tax benefit of -570 million US dollars. The pattern reflects the combined effects of current and deferred tax amounts, where movements between expense and benefit indicate significant changes in tax rates, taxable income, or deferred tax positions impacting the total reported income tax expense.

Statutory tax rate

The statutory tax rate remained stable at 21% throughout the five-year period, showing no variation from 2020 to 2024.

Effect of foreign operations

This component experienced fluctuations across the years. It decreased from a positive 2.4% in 2020 to negative values in 2021 (-5.4%) and 2022 (-4.4%), then reversed to positive contributions in 2023 (8%) and slightly decreased to 7.6% in 2024.

U.S. tax credits

U.S. tax credits consistently provided a negative adjustment to the tax rate, starting at -10.6% in 2020, reducing significantly to -2.8% in both 2021 and 2022, with further decreases to -3.1% in 2023 and -5.4% in 2024.

Stock-based compensation

This impact was not recorded in 2020 and 2021 but emerged from 2022 onwards, gradually increasing in its negative effect from -0.6% in 2022, to -1.0% in 2023, and -1.2% in 2024.

Non-deductible expenses

Non-deductible expenses showed an initial sharp decline from 7.2% in 2020 to a minimal 0.3% in 2021, followed by slight increases in subsequent years: 0.4% in 2022, 0.7% in 2023, and 1.1% in 2024.

Tax law changes and related structuring

This factor had a substantial impact in 2020 at -48.5%, indicating a major tax benefit or adjustment. It then significantly normalized to smaller negative values in subsequent years, ranging between -0.3% and -3.8%, showing relatively minor adjustments after the initial effect.

Tax audits, settlements and reserves

There was a pronounced variability here; starting with a -5.1% impact in 2020, then moving to minimal impacts in 2021 (-0.4%) and 2022 (0.9%), followed by a small negative effect in 2023 (-1.1%), and an exceptionally large -51.4% impact in 2024, suggesting a significant favorable adjustment or resolution.

Acquisition costs

No acquisition costs were reported until 2023, where a small 0.2% impact appeared, followed by a sharp increase to 13.4% in 2024, indicating increased expenses related to acquisitions in the latest period.

All other, net

This factor fluctuated mildly around zero, with minor negative and positive impacts ranging from -1.3% in 2020 to 1.1% in 2023, then slightly negative at -0.1% in 2024, suggesting insignificant net effects from miscellaneous items.

Effective tax rate, before impacts related to U.S. tax reform

This metric showed significant volatility, starting from a large negative rate of -34.9% in 2020, jumping to positive values in 2021 (11.1%) and 2022 (12.1%), rising further to 22% in 2023, and then reversing sharply to a negative -15.3% in 2024.

Impacts related to U.S. tax reform

These impacts were only present in 2020 at -1.1%, with no reported effects in subsequent years.

Effective tax rate

The overall effective tax rate mirrored the pattern before U.S. tax reform impacts, starting at -36% in 2020, increasing to positive rates of 11.1%, 12.1%, and 22% in 2021-2023, respectively, and then declining steeply to -15.3% in 2024.

The financial data exhibits several notable trends and changes over the analyzed periods.

Compensation and employee benefits

This item shows a consistent decline from 1109 million USD in 2020 to 215 million USD in 2024, indicating controlled or reduced expenditures in this area over time.

Accruals and reserves

These values increased steadily from 438 million USD in 2020 to 1253 million USD in 2024, suggesting a growing allocation for future liabilities or contingencies.

Chargebacks and rebates

The chargebacks and rebates increased significantly, nearly tripling from 555 million USD in 2020 to a peak of 1431 million USD in 2023, followed by a slight decrease to 1354 million USD in 2024. This could indicate rising customer incentives or adjustments related to sales.

Advance payments

Advance payments reveal a fluctuating pattern with an initial increase from 324 million USD in 2020 to 809 million USD in 2021, followed by a steady decline to 66 million USD in 2024, implying changes in payment terms or customer prepayments.

Net operating losses and other carryforwards

There is a marked increase in net operating losses and other carryforwards, growing from 2765 million USD in 2020 to 15815 million USD in 2024, indicating significant accumulated losses or tax benefits available for future application.

Other (asset/liability category)

This category shows a rise over time from 1371 million USD in 2020 to 2156 million USD in 2024, which reflects increased miscellaneous deferred or accrued items.

Deferred tax assets

Deferred tax assets rose substantially from 6562 million USD in 2020 to 20859 million USD in 2024, demonstrating an increasing expectation of future tax benefits.

Valuation allowances

Valuation allowances became more negative, expanding from -1203 million USD in 2020 to -14823 million USD in 2024, suggesting increased caution or skepticism about realizing deferred tax assets.

Net deferred tax assets

This measure remained relatively stable, with minor fluctuations from 5359 million USD in 2020 to 6036 million USD in 2024, indicating an overall balanced outlook of deferred tax asset realizability after allowances.

Excess of book basis over tax basis of intangible assets

The negative values decreased in magnitude from -5274 million USD in 2020 to -1969 million USD in 2024, showing a reduction in temporary differences between book and tax accounting for intangible assets.

Excess of book basis over tax basis in investments

This item fluctuated modestly but remained negative, ranging between -335 million USD and -302 million USD, reflecting relatively stable temporary differences related to investments.

Other (deferred tax liabilities category)

Negative values in this category declined slightly from -982 million USD in 2020 to -718 million USD in 2024, indicating a reduction in certain deferred tax liabilities.

Deferred tax liabilities

These liabilities decreased markedly from -6591 million USD in 2020 to -2989 million USD in 2024, showing significant diminishing of deferred tax obligations.

Net deferred tax assets (liabilities)

This figure shows a transition from a negative balance of -1232 million USD in 2020 to a positive 3047 million USD in 2024, with a notable positive peak of 3803 million USD in 2023. This indicates an overall improvement in deferred tax asset positioning relative to liabilities over the period.

The data presents the annual values of deferred tax assets and deferred tax liabilities over five years, from 2020 to 2024, measured in millions of US dollars.

Deferred Tax Assets

The value of deferred tax assets shows an overall upward trend across the period, beginning at 2,414 million USD in 2020 and reaching a peak of 5,755 million USD by the end of 2023. There is a notable increase from 2022 to 2023, where the figure nearly doubles, indicating a significant change in deferred tax benefits. However, this upward momentum slightly reverses in 2024, with a modest decline to 5,626 million USD.

Deferred Tax Liabilities

Deferred tax liabilities display a decreasing trend from 2020 through 2023, falling from 3,646 million USD to 1,952 million USD. This consistent decline may suggest a reduction in the company's future tax obligations or changes in taxable temporary differences. In 2024, there is an upward adjustment, with liabilities increasing to 2,579 million USD, indicating a potential shift in tax positions or accounting estimates.

Overall, the contrasting movements in deferred tax assets and liabilities indicate a potentially improving net deferred tax position up to 2023, as assets grow and liabilities diminish. The year 2024 signals a slight reversal, with a decrease in deferred tax assets and an increase in liabilities, which may warrant further analysis to understand the underlying factors influencing these movements.

The financial data reveals several notable trends across the periods from 2020 to 2024.

Total Assets

Both reported and adjusted total assets show a consistent downward trend over the five-year period. Reported total assets decreased steadily from $150,565 million in 2020 to $135,161 million in 2024, with adjusted total assets following a similar pattern from $148,151 million to $129,535 million. This decline suggests a gradual reduction in the asset base over time, possibly indicating divestitures, asset impairments, or strategic changes affecting asset composition.

Total Liabilities

Total liabilities, both reported and adjusted, generally declined from 2020 to 2022 but then exhibited an upward movement in the subsequent years. Reported liabilities fell from $137,468 million in 2020 to $121,518 million in 2022, before increasing to $131,797 million by 2024. Adjusted liabilities followed a similar path, decreasing from $133,822 million to $119,328 million initially, then climbing to $129,218 million. This trend indicates an initial reduction in obligations followed by a resurgence, which could reflect shifts in financing, increased borrowing, or changes in operational liabilities.

Stockholders’ Equity

Reported stockholders’ equity showed growth from $13,076 million in 2020 to a peak of $17,254 million in 2022, then sharply decreased to $3,325 million by 2024. Adjusted stockholders’ equity followed a comparable trajectory, rising to $16,424 million before declining dramatically to just $278 million. This significant reduction in equity in the later years suggests substantial losses, dividend payments, share buybacks, or other equity-reducing events impacting the company’s net worth.

Net Earnings Attributable to AbbVie Inc.

Reported net earnings demonstrate volatility, with a notable increase from $4,616 million in 2020 to $11,542 million in 2021 and remaining elevated through 2022 at $11,836 million. However, earnings then dropped considerably to $4,863 million in 2023 and further to $4,278 million in 2024. Adjusted net earnings reveal a different pattern, initially rising from $2,291 million to $10,644 million in 2021, then declining to $9,905 million in 2022, followed by a steep fall to $1,974 million in 2023 before partially recovering to $2,829 million in 2024. This pattern suggests earnings faced considerable challenges post-2022, with adjustments amplifying the impact of these challenges.

The financial data exhibits several notable trends and variations across the periods analyzed, specifically from December 31, 2020, through December 31, 2024, considering both reported and adjusted figures.

Net Profit Margin

The reported net profit margin increased significantly from 10.08% in 2020 to approximately 20.5% in 2021 and remained relatively stable around 20.4% in 2022. However, it then dropped sharply to 8.95% in 2023 and further declined to 7.59% in 2024. Similarly, the adjusted net profit margin mirrored this pattern but with generally lower values, showing a rise from 5% in 2020 to 18.94% in 2021, then a decrease to 17.06% in 2022, followed by a steep decline to 3.63% in 2023 before a slight recovery to 5.02% in 2024.

Total Asset Turnover

Both reported and adjusted total asset turnover ratios exhibited a gradual upward trend over the period. Reported values started at 0.30 in 2020 and increased to 0.42 by 2024, with minor fluctuations around 0.40 in 2023. Adjusted asset turnover followed a similar pattern, starting slightly higher at 0.31 in 2020 and reaching 0.43 in 2024, indicating a consistent improvement in asset utilization over time.

Financial Leverage

Reported financial leverage declined from a high of 11.51 in 2020 to 8.04 in 2022, suggesting reduced reliance on debt, but then surged dramatically to 13.00 in 2023 and then to an extreme 40.65 in 2024. The adjusted financial leverage shows a similar but more pronounced pattern: after decreasing from 10.35 in 2020 to 8.27 in 2022, it surged substantially to 19.67 in 2023 and exhibited an extraordinary increase to 465.95 in 2024. This sharp escalation in leverage in the latest period is remarkable and indicates substantially increased financial risk or structural changes in the capital base.

Return on Equity (ROE)

Reported ROE increased dramatically from 35.3% in 2020 to a peak of 74.91% in 2021, then declined to 68.6% in 2022 and further dropped to 46.94% in 2023. In 2024, it surged substantially to 128.66%, indicating a very high return to shareholders, likely driven by changes in leverage and profit margins. Adjusted ROE also follows a similar trajectory but with more variability and lower base levels initially. It rose from 16.01% in 2020 to 65.94% in 2021, then decreased to 60.31% in 2022 and dropped notably to 30.11% in 2023. By 2024, adjusted ROE exhibited an extraordinary jump to 1017.63%, likely reflecting the extreme spike in adjusted financial leverage combined with adjusted profitability measures.

Return on Assets (ROA)

Reported ROA showed an increase from 3.07% in 2020 to 7.88% in 2021, rising further to 8.53% in 2022. The trend reversed thereafter, with ROA declining sharply to 3.61% in 2023 and down to 3.17% in 2024, indicating reduced efficiency in asset-generated earnings in the latter years. Adjusted ROA trends echoed this pattern, increasing from 1.55% in 2020 to a peak of 7.38% in 2021, maintaining a similar level at 7.29% in 2022, then falling sharply to 1.53% in 2023, with a modest increase to 2.18% in 2024.

Overall, the data reveal a period of strong profitability and efficiency improvement in 2021 and 2022, followed by a notable deterioration in net margins and returns in 2023. The sharp increases in financial leverage in 2023 and particularly in 2024, especially in adjusted terms, suggest a significant change in financial structure or accounting adjustments impacting leverage metrics. The resulting effect on ROE is dramatic, particularly in 2024, where the extremely high adjusted ROE is likely influenced heavily by the leverage spike rather than underlying asset performance improvements, which appear to have weakened based on ROA trends. Asset turnover remains steady to slightly improving, indicating operational efficiency has not declined significantly despite the fluctuations in profitability and leverage.

Reported Net Earnings Attributable to AbbVie Inc.

The reported net earnings exhibit a notable increase from 2020 to 2022, rising significantly from 4,616 million US dollars in 2020 to a peak of 11,836 million US dollars in 2022. However, this upward trend reverses sharply in 2023, with earnings dropping to 4,863 million US dollars, and continuing to decrease in 2024 to 4,278 million US dollars. This indicates a period of strong growth followed by a substantial decline in reported net earnings.

Adjusted Net Earnings Attributable to AbbVie Inc.

The adjusted net earnings follow a somewhat similar trajectory but with less volatility. Adjusted earnings increased substantially from 2,291 million US dollars in 2020 to 10,644 million US dollars in 2021 before declining slightly to 9,905 million US dollars in 2022. Unlike the reported earnings, adjusted earnings experience a more pronounced decrease in 2023, falling to 1,974 million US dollars, followed by a modest recovery to 2,829 million US dollars in 2024. This pattern suggests that adjustments have a stabilizing effect but the decline post-2022 remains significant.

Reported Net Profit Margin

The reported net profit margin reflects the trends seen in net earnings. It increases markedly from 10.08% in 2020 to over 20% in both 2021 (20.54%) and 2022 (20.39%), indicating enhanced profitability during these years. Subsequently, the margin contracts sharply to 8.95% in 2023 and further to 7.59% in 2024. This decline signals reduced profitability despite fluctuations in earnings.

Adjusted Net Profit Margin

The adjusted net profit margin similarly shows an upward trend from 5% in 2020 to a high of 18.94% in 2021, though it declines to 17.06% in 2022. The margin then falls more drastically to 3.63% in 2023 but sees an uptick to 5.02% in 2024. This pattern echoes that of adjusted earnings, with a steep drop in profitability in 2023 followed by a slight recovery the following year.

Summary of Trends

Overall, both reported and adjusted metrics reveal a period of growth and strong profitability through 2021 and 2022, followed by a pronounced decline in 2023 and 2024. While the reported figures show higher absolute values and margins, indicating greater volatility, the adjusted figures tend to smooth these fluctuations but confirm the general downward trend post-2022. The decline in net profit margins alongside falling earnings suggests challenges impacting profitability in the most recent periods examined.

The financial data over the five-year period reveals several notable trends regarding the company's asset base and asset efficiency metrics.

Total Assets

There is a consistent decline in reported total assets from 150,565 million US dollars in 2020 to 135,161 million US dollars in 2024. Similarly, adjusted total assets decreased from 148,151 million US dollars in 2020 to 129,535 million US dollars in 2024. This gradual reduction suggests a potential divestment, asset optimization, or depreciation effect impacting the company's asset base over time.

Total Asset Turnover

The reported total asset turnover ratio exhibits an overall upward trend, increasing from 0.30 in 2020 to 0.42 in 2024, with a slight dip observed in 2023. The adjusted total asset turnover follows a similar pattern, rising from 0.31 in 2020 to 0.43 in 2024. This improvement in turnover ratios indicates enhanced efficiency in generating revenue from the asset base despite the shrinking asset size.

Comparison between Reported and Adjusted Figures

The adjusted total assets consistently remain below reported total assets by a relatively small margin throughout the period, reflecting the impact of deferred income tax adjustments. The adjusted total asset turnover ratios are marginally higher than the reported figures, potentially highlighting a slightly stronger turnover performance when deferred tax effects are accounted for.

In summary, the data points to a strategic reduction in assets accompanied by an improving capacity to generate revenue from these assets. This suggests an increasingly efficient utilization of the asset base, notwithstanding the overall contraction in asset size over the examined timeframe.

The analysis of the annual financial data reveals several notable trends and changes over the five-year period.

Total Assets

Both reported and adjusted total assets show a consistent decline from 2020 through 2023, decreasing from approximately $150.6 billion to $134.7 billion reported and from $148.2 billion to $129.0 billion adjusted. However, there is a slight increase in total assets from 2023 to 2024, with reported assets rising marginally to $135.2 billion and adjusted assets to $129.5 billion.

Stockholders’ Equity

Reported stockholders’ equity exhibits growth from 2020 to 2022, rising from $13.1 billion to $17.3 billion. This positive trend reverses dramatically starting in 2023, with equity decreasing sharply to $10.4 billion and further plummeting to $3.3 billion in 2024. Adjusted stockholders’ equity follows a similar pattern but with a less pronounced peak, increasing from $14.3 billion in 2020 to $16.4 billion in 2022 before dropping significantly to $6.6 billion in 2023 and declining further to $0.3 billion in 2024.

Financial Leverage

Reported financial leverage decreases steadily from 11.51 in 2020 to 8.04 in 2022, indicating reduced reliance on debt relative to equity during this time. This trend reverses sharply in 2023, with leverage increasing to 13.00 and surging dramatically to 40.65 in 2024, signaling a substantial increase in debt relative to equity. Similar but more extreme changes are observed in adjusted financial leverage, which declines from 10.35 in 2020 to 8.27 in 2022 but then escalates steeply to 19.67 in 2023 and dramatically spikes to an extremely high 465.95 in 2024, highlighting an extraordinary increase in financial risk as adjusted equity approaches minimal levels.

Overall, the data indicate that after a period of decline in total assets and growth in equity from 2020 to 2022, the company experiences a sharp deterioration in equity and a significant increase in financial leverage starting in 2023. While total assets remain relatively stable in 2024, the steep reduction in equity leads to pronounced increases in leverage ratios, suggesting heightened financial risk and potential concerns regarding solvency and capital structure stability in the most recent years analyzed.

Net Earnings

The reported net earnings attributable to AbbVie Inc. showed a marked increase from 2020 to 2022, rising from $4,616 million to $11,836 million. However, there was a significant decline in 2023, with earnings falling to $4,863 million, followed by a further decrease to $4,278 million in 2024. The adjusted net earnings parallel this trend but exhibit more pronounced fluctuations. Adjusted earnings surged from $2,291 million in 2020 to $10,644 million in 2021, then decreased slightly to $9,905 million in 2022 before plunging to $1,974 million in 2023. In 2024, adjusted earnings experienced a modest recovery, increasing to $2,829 million.

Stockholders’ Equity

Reported stockholders’ equity steadily increased from $13,076 million in 2020 to $17,254 million in 2022 but then abruptly dropped to $10,360 million in 2023 and further declined to $3,325 million in 2024. The adjusted stockholders’ equity values reflect a similar trajectory, starting at $14,308 million in 2020 and increasing to $16,424 million by 2022. Thereafter, adjusted equity sharply decreased to $6,557 million in 2023 and collapsed to $278 million in 2024, indicating a significant erosion in equity on an adjusted basis.

Return on Equity (ROE)

Reported ROE displayed substantial volatility, rising from 35.3% in 2020 to an elevated 74.91% in 2021, then slightly declining to 68.6% in 2022. This was followed by a decrease to 46.94% in 2023, after which there was an exceptional spike to 128.66% in 2024. Adjusted ROE followed a similar pattern, beginning at 16.01% in 2020 and increasing significantly to 65.94% in 2021 and 60.31% in 2022. However, the adjusted ROE dropped to 30.11% in 2023 before skyrocketing to an extraordinary 1017.63% in 2024. This dramatic increase in 2024 adjusted ROE suggests that adjusted net earnings declined proportionally less than the drastically reduced adjusted stockholders’ equity, reflecting leverage or exceptional adjustments impacting equity.

Overall Insights

The data indicates a period of growth in earnings and equity from 2020 through 2022, followed by a sharp contraction in both reported and adjusted metrics starting in 2023. The dramatic decrease in adjusted stockholders’ equity in 2023 and 2024, coupled with a relatively smaller decline in adjusted net earnings, caused a disproportionate increase in adjusted ROE for 2024, which may point to significant nonrecurring adjustments or tax-related effects impacting equity. The volatility in reported and adjusted figures underscores heightened financial fluctuations and potential fiscal restructuring or exceptional items during the latter periods analyzed.

Over the observed five-year period, the reported net earnings attributable to the company exhibit a significant fluctuation. The earnings rose sharply from 4,616 million US dollars in 2020 to a peak of 11,836 million US dollars in 2022, followed by a marked decline in 2023 and 2024 to 4,863 million and 4,278 million US dollars, respectively. The adjusted net earnings follow a somewhat similar pattern but with different magnitudes. The adjusted earnings increased substantially from 2,291 million in 2020 to 10,644 million in 2021, then gradually declined to 9,905 million in 2022, dropping steeply to 1,974 million in 2023 before a slight recovery to 2,829 million in 2024.

Reported total assets show a consistent downward trend across the period, decreasing from 150,565 million US dollars at the end of 2020 to 135,161 million US dollars in 2024. Adjusted total assets mirror this decline, falling from 148,151 million US dollars in 2020 to 129,535 million US dollars in 2024, indicating a general reduction in asset base when adjustments for deferred income taxes are applied.

Regarding profitability ratios, the reported Return on Assets (ROA) increased significantly from 3.07% in 2020 to 8.53% in 2022, indicating improved efficiency in utilizing assets to generate earnings during this interval. This was followed by a sharp decline to 3.17% by the end of 2024. The adjusted ROA shows a similar pattern, rising from 1.55% in 2020 to a peak of 7.38% in 2021 and slightly decreasing to 7.29% in 2022, before experiencing a steep reduction to 1.53% and a modest recovery to 2.18% in the last two years.

Overall, the data reveals considerable volatility in earnings and profitability, with peaks occurring around the 2021-2022 periods and subsequent declines thereafter. The asset base contracted steadily over time, which may have impacted the company's earning capacity. The divergence between reported and adjusted figures suggests that deferred income tax adjustments significantly influence the assessment of financial performance, especially evident in profitability metrics.

Net Earnings Patterns

Sharp rise until 2022, followed by substantial decline through 2024 in both reported and adjusted figures.

Total Assets

Consistent decline over the period, indicating asset reductions or disposals.

Return on Assets

Improved profitability efficiency through 2022, with decreasing returns thereafter, visible in both reported and adjusted ROA.

Impact of Deferred Taxes Adjustments

Adjusted results consistently lower than reported figures, highlighting the significant effect of tax-related adjustments on net earnings and profitability ratios.