AbbVie 2012 Annual Report Download - page 57

Outstanding net governmental receivables in these countries at December 31 were as follows.
Net receivables
over one year
Net receivables past due
(in millions) 2012 2011 2012 2011
Greece $ 52 $ 44 $13 $ 2
Portugal 80 121 23 31
Italy 308 372 40 42
Spain 285 589 2 240
Total $725 $1,126 $78 $315
With the exception of Greece, AbbVie historically has collected almost all of the outstanding
receivables in these countries. AbbVie continues to monitor the creditworthiness of customers located
in these and other geographic areas and establishes an allowance against an accounts receivable when it
is probable they will not be collected. In addition to closely monitoring economic conditions and
budgetary and other fiscal developments in these countries, AbbVie regularly communicates with its
customers regarding the status of receivable balances, including their payment plans and obtains
positive confirmation of the validity of the receivables. AbbVie also monitors the potential for and
periodically has utilized factoring arrangements to mitigate credit risk although the receivables included
in such arrangements have historically not been a material amount of total outstanding receivables. If
government funding were to become unavailable in these countries or if significant adverse changes in
their reimbursement practices were to occur, AbbVie may not be able to collect the entire balance.
Credit Facility, Access to Capital and Credit Ratings
Credit Facility
AbbVie currently has a $2.0 billion unsecured five-year revolving credit facility from a syndicate of
lenders, entered into in July 2012, which also supports commercial paper borrowings. As of the date of
separation, January 1, 2013, Abbott’s obligations under this facility were relieved and AbbVie became
the sole obligor. The credit facility enables the company to borrow funds at floating interest rates. At
December 31, 2012, the company was in compliance with all its credit facility covenants. Commitment
fees under the new credit facility are not material. There were no amounts outstanding on the credit
facility on December 31, 2012.
Access to Capital
The company intends to fund short-term and long-term financial obligations as they mature through
cash on hand, future cash flows from operations or by issuing additional debt. The company’s ability to
generate cash flows from operations, issue debt or enter into financing arrangements on acceptable
terms could be adversely affected if there is a material decline in the demand for the company’s
products or in the solvency of its customers or suppliers, deterioration in the company’s key financial
ratios or credit ratings or other material unfavorable changes in business conditions. At the current
time, the company believes it has sufficient financial flexibility to issue debt, enter into other financing
arrangements and attract long-term capital on acceptable terms to support the company’s growth
objectives.
Credit Ratings
In late October 2012, Moody’s Investor Service and Standard & Poor’s Corporate assigned ratings of
Baa1 and A, respectively, to AbbVie. Unfavorable changes to the ratings may have an adverse impact
on future financing arrangements; however, they would not affect the company’s ability to draw on its
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