AbbVie 2013 Annual Report Download - page 51

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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, 2013, 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, 2013.
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
Credit ratings of Baa1 and A assigned to AbbVie in 2012 by Moody’s Investor Service and Standard &
Poor’s Corporate, respectively, have not changed as of December 31, 2013. 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 credit facility and would not result in an acceleration of the
scheduled maturities of any of the company’s outstanding debt.
Contractual Obligations
The following table summarizes AbbVie’s estimated contractual obligations as of December 31, 2013.
Less than One to Three to More than
(in millions) Total one year three years five years five years
Short-term borrowings $ 413 $ 413 $ — $ — $ —
Long-term debt and capital lease obligations,
including current portion 14,798 18 4,023 5,014 5,743
Interest on long-term debt(a) 4,882 281 633 621 3,347
Future minimum non-cancelable operating lease
commitments 875 87 150 108 530
Purchase obligations and other(b) 26 26 — — —
Other long-term liabilities(c) 1,258 390 182 306 380
Total $22,252 $1,215 $4,988 $6,049 $10,000
(a) Includes estimated future interest payments on long-term debt securities and capital lease
obligations. Interest payments on debt are calculated for future periods using interest rates in
effect at the end of 2013. Projected interest payments include the related effects of interest rate
swap agreements. Certain of these projected interest payments may differ in the future based on
changes in floating interest rates or other factors or events. The projected interest payments only
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