AbbVie 2012 Annual Report Download - page 13

sales outside the United States are made through wholesalers or distributors. No wholesaler or
distributor outside the United States accounts for more than 3 percent of AbbVie’s sales. Certain
products are co-marketed or co-promoted with other companies. AbbVie has no single customer that, if
the customer were lost, would have a material adverse effect on the company’s business.
No material portion of AbbVie’s business is subject to renegotiation of profits or termination of
contracts at the election of the government.
Third Party Agreements
AbbVie has agreements with third parties for process development, analytical services, and
manufacturing of certain products. AbbVie procures certain products and services from a limited
number of suppliers and, in some cases, a single supply source. For example, the filling and packaging
of HUMIRA syringes to be sold outside of the United States and Puerto Rico is performed by a single
supplier at its two different facilities. AbbVie does not currently believe that this agreement is material
because AbbVie’s business is not substantially dependent upon it. AbbVie maintains significant
inventory of HUMIRA syringes to reduce the risk of any supply disruption and is awaiting regulatory
approval for its own syringe-filling and packaging facility in the United States to supply syringes outside
of the United States and Puerto Rico. This facility is already approved to provide product to the
United States and Puerto Rico. In addition, AbbVie has agreements with third parties for active
pharmaceutical ingredient and product manufacturing, formulation and development services, fill,
finish, and packaging services, and distribution and logistics services for certain products. AbbVie does
not believe that these manufacturing-related agreements are material because AbbVie’s business is not
substantially dependent on any individual agreement. In most cases, AbbVie maintains alternate supply
relationships that it can utilize without undue disruption of its manufacturing processes if a third party
fails to perform its contractual obligations. AbbVie also maintains sufficient inventory of product to
minimize the impact of any supply disruption.
AbbVie also has collaboration agreements, as discussed in Note 4, ‘‘Acquisitions, Collaborations
and Other Arrangements,’’ of the Notes to Combined Financial Statements, and has certain agreements
with Abbott, as described in Item 13, ‘‘Certain Relationships and Related Transactions, and Director
Independence.’’
Sources and Availability of Raw Materials
AbbVie purchases, in the ordinary course of business, raw materials and supplies essential to its
operations from numerous suppliers around the world, including in the United States. There have been
no recent significant availability problems or supply shortages.
Orders
Orders are generally filled on a current basis, and order backlog is not material to AbbVie’s
business.
Environmental Matters
AbbVie believes that its operations comply in all material respects with applicable laws and
regulations concerning environmental protection. Regulations under federal and state environmental
laws impose stringent limitations on emissions and discharges to the environment from various
manufacturing operations. AbbVie’s capital and operating expenditures for pollution control in 2012
were approximately $1.5 million and $13.2 million, respectively. Capital and operating expenditures for
pollution control in 2013 are estimated to be approximately $2.2 million and $19.0 million, respectively.
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