AbbVie 2012 Annual Report Download - page 81

Note 5 Goodwill and Intangible Assets
The carrying amount of goodwill at December 31, 2012 and 2011 was $6,130 million and $6,100 million,
respectively. Changes in the goodwill balance were due to foreign currency translation. As of
December 31, 2012, there were no accumulated goodwill impairment losses.
The following table summarizes AbbVie’s intangible assets.
December 31, 2012 December 31, 2011
Gross Net Gross Net
carrying Accumulated carrying carrying Accumulated carrying
(in millions) amount amortization amount amount amortization amount
Definite-lived intangible assets
Developed product rights $4,699 $(3,031) $1,668 $4,675 $(2,492) $2,183
License agreements 969 (734) 235 949 (647) 302
Total definite-lived intangible assets 5,668 (3,765) 1,903 5,624 (3,139) 2,485
Indefinite-lived research and
development 420 — 420 425 — 425
Total intangible assets $6,088 $(3,765) $2,323 $6,049 $(3,139) $2,910
The indefinite-lived intangible assets relate to IPR&D acquired in a business combination.
Amortization expense for 2012, 2011 and 2010 was $625 million, $764 million and $708 million,
respectively. In 2012 and 2011, AbbVie recorded impairment charges of $13 million and $46 million,
respectively, for certain projects under development. These charges are included in R&D expenses. At
December 31, 2012, the anticipated annual amortization expense for intangible assets recorded as of
December 31, 2012 was $511 million in 2013, $348 million in 2014, $267 million in 2015, $140 million
in 2016 and $116 million in 2017. Intangible asset amortization is included in cost of products sold in
the combined statements of earnings. Amortizable intangible assets are amortized over 2 to 16 years
with an average of 11 years for both developed product rights and license agreements.
Note 6 Restructuring Plans
In 2012 and prior years, AbbVie management approved plans to realign its worldwide manufacturing
operations and selected domestic and international commercial and R&D operations in order to reduce
costs. In 2012, AbbVie recorded a charge of approximately $177 million for employee severance and
contractual obligations, primarily related to the exit from an R&D facility with $169 million classified in
R&D and $8 million as SG&A expenses. In 2011, AbbVie recorded a charge of $160 million reflecting
employee severance and other related charges, with $42 million classified as cost of products sold,
$69 million as R&D and $49 million as SG&A expenses. The following summarizes the activity for
these restructurings.
(in millions)
Accrued balance at December 31, 2009 $ 54
Payments and other adjustments (54)
Accrued balance at December 31, 2010 —
2011 restructuring charges 160
Payments and other adjustments (70)
Accrued balance at December 31, 2011 90
2012 restructuring charges 177
Payments and other adjustments (74)
Accrued balance at December 31, 2012 $193
75