SEC Comment Letter for NOVARTIS AG (NVS, NVSEF) (CIK 0001114448) (NVS) — Apr 12, 2012
NOVARTIS AG (NVS, NVSEF) (CIK 0001114448)
Date: April 12, 2012 · CIK: 0001114448 · Accession: 0000000000-12-018568
AI Filing Summary & Sentiment
File numbers found in text: 001-15024
Letter
April 12, 2012 Via E-mail Mr. Jonathan Symonds Chief Financial Officer Novartis AG Lichtstrasse 35 4056 Basel, Switzerland Re: Novartis AG Form 20-F for the Fiscal Year Ended December 31, 2011 Filed January 25, 2012 File No. 001-15024
Dear Mr. Symonds: We have reviewed your filing and have the following comments. In our comments, we ask you to provide us with information so we may better understa nd your disclosures. Please respond to this letter within 10 business days by providing us the requested information or by advising us when you will provide the requested response. If you do not believe a comment applies to your facts and circ umstances, please tell us why in your response. Please furnish us a letter on EDGAR under the fo rm type label CORRESP that keys your responses to our comments.
After reviewing the information provided, we may raise additional comments and/or request that you amend your filing.
Item 5. Operating and Financial Review and Prospects
Item 5.A Operating Results Factors Affecting Results of Operations Patent Expirations, Generic Competit ion Pressure the Industry, page 89
1. Your disclosure states that the loss of excl usivity for one or more important products will have a material negative impact on the Group’s results of operations. Please provide us proposed disclosure to be included in future periodic reports that includes to what degree you expect erosion from generic competition to impact net income in the following year and include the factors that would impact the magnitude of the negative impact.
Jonathan Symonds Novartis AG April 12, 2012 Page 2
Notes to the consolidated financial statements
11. Goodwill and intangible asset movements, page F-42
2. Paragraphs 50 and 55 of IAS 36 require estimat es of future cash flows and the discount rate to be determined on a pre-tax basis. Therefore, please provide us proposed disclosure to be includ ed in future periodic reports that states the company’s impairment policy uses post-tax cash flows a nd a post-tax discount rate to arrive at value in use, if true, as well as: An assertion in your accounting policy not e that the use of post-tax assumptions does not result in a value in use that is materially different had pre-tax assumptions been used; and The pre-tax discount rate.
15. Trade receivables, page F-48
3. Please provide us proposed disclosure to be incl uded in future periodic reports that breaks out the amount of trade receivables from pr oduct sales by country in Greece, Italy, Spain and Portugal and also disclose the amounts that are past due from each of these countries separately. Disclose the portion in each of these countries th at is due directly from the government or funded by the government. Tell us the amount of allowance for doubtful accounts at December 31, 2011 related to receiva bles in each of these countries and why you consider that amount to be adequate. 20. Provisions and other non-current liabilities
Legal matters, page F-65
4. Please provide us proposed disclosure to be incl uded in future periodic reports to include, where practicable, an estimate of the financia l effect for each legal proceeding discussed. If it is not practicable to disclose this information, that fact should be stat ed. Please refer to paragraphs 86 and 91 of IAS 37. We urge all persons who are responsible for th e accuracy and adequacy of the disclosure in the filing to be certain that the filing include s the information the Securities Exchange Act of 1934 and all applicable Exchange Act rules requir e. Since the company and its management are in possession of all facts relating to a company’s disclosure, they are responsible for the accuracy and adequacy of the disclosures they have made.
In responding to our comments, please provi de a written statement from the company acknowledging that: the company is responsible for the adequacy an d accuracy of the disclo sure in the filing; staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and the company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federa l securities laws of the United States.
Jonathan Symonds Novartis AG April 12, 2012 Page 3
You may contact Vanessa Robe rtson, Staff Accountant, at (202) 551-3649 or Lisa Vanjoske, Assistant Chief Accountant, at (202) 551-3614 if you have any questions regarding the comments. In this regard, do not he sitate to contact me at (202) 551-3679.
Sincerely,
/s/ Jim B. Rosenberg
Jim B. Rosenberg
Senior Assistant Chief Accountant
Show Raw Text
April 12, 2012 Via E-mail Mr. Jonathan Symonds Chief Financial Officer Novartis AG Lichtstrasse 35 4056 Basel, Switzerland Re: Novartis AG Form 20-F for the Fiscal Year Ended December 31, 2011 Filed January 25, 2012 File No. 001-15024 Dear Mr. Symonds: We have reviewed your filing and have the following comments. In our comments, we ask you to provide us with information so we may better understa nd your disclosures. Please respond to this letter within 10 business days by providing us the requested information or by advising us when you will provide the requested response. If you do not believe a comment applies to your facts and circ umstances, please tell us why in your response. Please furnish us a letter on EDGAR under the fo rm type label CORRESP that keys your responses to our comments. After reviewing the information provided, we may raise additional comments and/or request that you amend your filing. Item 5. Operating and Financial Review and Prospects Item 5.A Operating Results Factors Affecting Results of Operations Patent Expirations, Generic Competit ion Pressure the Industry, page 89 1. Your disclosure states that the loss of excl usivity for one or more important products will have a material negative impact on the Group’s results of operations. Please provide us proposed disclosure to be included in future periodic reports that includes to what degree you expect erosion from generic competition to impact net income in the following year and include the factors that would impact the magnitude of the negative impact. Jonathan Symonds Novartis AG April 12, 2012 Page 2 Notes to the consolidated financial statements 11. Goodwill and intangible asset movements, page F-42 2. Paragraphs 50 and 55 of IAS 36 require estimat es of future cash flows and the discount rate to be determined on a pre-tax basis. Therefore, please provide us proposed disclosure to be includ ed in future periodic reports that states the company’s impairment policy uses post-tax cash flows a nd a post-tax discount rate to arrive at value in use, if true, as well as: An assertion in your accounting policy not e that the use of post-tax assumptions does not result in a value in use that is materially different had pre-tax assumptions been used; and The pre-tax discount rate. 15. Trade receivables, page F-48 3. Please provide us proposed disclosure to be incl uded in future periodic reports that breaks out the amount of trade receivables from pr oduct sales by country in Greece, Italy, Spain and Portugal and also disclose the amounts that are past due from each of these countries separately. Disclose the portion in each of these countries th at is due directly from the government or funded by the government. Tell us the amount of allowance for doubtful accounts at December 31, 2011 related to receiva bles in each of these countries and why you consider that amount to be adequate. 20. Provisions and other non-current liabilities Legal matters, page F-65 4. Please provide us proposed disclosure to be incl uded in future periodic reports to include, where practicable, an estimate of the financia l effect for each legal proceeding discussed. If it is not practicable to disclose this information, that fact should be stat ed. Please refer to paragraphs 86 and 91 of IAS 37. We urge all persons who are responsible for th e accuracy and adequacy of the disclosure in the filing to be certain that the filing include s the information the Securities Exchange Act of 1934 and all applicable Exchange Act rules requir e. Since the company and its management are in possession of all facts relating to a company’s disclosure, they are responsible for the accuracy and adequacy of the disclosures they have made. In responding to our comments, please provi de a written statement from the company acknowledging that: the company is responsible for the adequacy an d accuracy of the disclo sure in the filing; staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and the company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federa l securities laws of the United States. Jonathan Symonds Novartis AG April 12, 2012 Page 3 You may contact Vanessa Robe rtson, Staff Accountant, at (202) 551-3649 or Lisa Vanjoske, Assistant Chief Accountant, at (202) 551-3614 if you have any questions regarding the comments. In this regard, do not he sitate to contact me at (202) 551-3679. Sincerely, /s/ Jim B. Rosenberg Jim B. Rosenberg Senior Assistant Chief Accountant