Accounts Receivable

Our accounts receivable primarily arise from product sales in the U.S. and Europe and mainly represent amounts due from our wholesale distributors, public hospitals and other government entities. Concentrations of credit risk with respect to our accounts receivable, which are typically unsecured, are limited due to the wide variety of customers and markets using our products, as well as their dispersion across many different geographic areas. The majority of our accounts receivable have standard payment terms which generally require payment within 30 to 90 days. We monitor the financial performance and credit worthiness of our large customers so that we can properly assess and respond to changes in their credit profile. We provide reserves against trade receivables for estimated losses that may result from a customer’s inability to pay. Amounts determined to be uncollectible are charged or written-off against the reserve. To date, our historical reserves and write-offs of accounts receivable have not been significant.

The credit and economic conditions within Italy, Spain and Portugal, among other members of the E.U. continue to remain uncertain. Uncertain credit and economic conditions have generally led to a lengthening of time to collect our accounts receivable in some of these countries. In Portugal and select regions in Spain and Italy, where our collections have slowed and a significant portion of these receivables are routinely being collected beyond our contractual payment terms and over periods in excess of one year, we have discounted our receivables and reduced related revenues based on the period of time that we estimate those amounts will be paid, to the extent such period exceeds one year, using the country’s market-based borrowing rate for such period. The related receivables are classified at the time of sale as non-current assets. We accrete interest income on these receivables, which is recognized as a component of other income (expense), net within our condensed consolidated statements of income.

Our net accounts receivable balances from product sales in selected European countries are summarized as follows:



	As of March 31, 2014
(In millions)	Current Balance Included within Accounts Receivable, net		Non-Current Balance Included within Investments and Other Assets		Total
Spain	$	47.3	$	8.1	$	55.4
Italy	$	82.3	$	0.9	$	83.2
Portugal	$	10.4	$	11.1	$	21.5



	As of December 31, 2013
(In millions)	Current Balance Included within Accounts Receivable, net		Non-Current Balance Included within Investments and Other Assets		Total
Spain	$	113.3	$	6.8	$	120.1
Italy	$	76.1	$	2.4	$	78.5
Portugal	$	10.4	$	8.2	$	18.6

Approximately $15.5 million and $45.9 million of the total net accounts receivable balances for these countries were overdue more than one year as of March 31, 2014 and December 31, 2013, respectively. During the first quarter of 2014, we received approximately $59.6 million in payments from Spain related to receivables aged greater than one year. During the fourth quarter of 2013, Portugal remitted approximately $10.0 million of funds against receivables aged greater than two years.

Pricing of TYSABRI in Italy - AIFA

In the fourth quarter of 2011, Biogen Idec Italia SRL, our Italian subsidiary, received a notice from the Italian National Medicines Agency (Agenzia Italiana del Farmaco or AIFA) stating that sales of TYSABRI for the period from February 2009 through February 2011 exceeded by EUR30.7 million a reimbursement limit established pursuant to a Price Determination Resolution (Price Resolution) granted by AIFA in December 2006. In December 2011, based on our interpretation that the Price Resolution by its terms only applied to the first 24 months of TYSABRI sales (which began in February 2007), we filed an appeal against AIFA in administrative court seeking a ruling that the reimbursement limit does not apply and that the position of AIFA is unenforceable. That appeal is pending.

Since being notified in the fourth quarter of 2011 that AIFA believed a reimbursement limit was in effect, we have deferred revenue on sales of TYSABRI as if the reimbursement limit were in effect for each biannual period. As of March 31, 2014, we have deferred an aggregate amount of $143.2 million, of which $15.2 million was deferred during the three months ended March 31, 2014.

In July 2013, we negotiated an agreement in principle with AIFA's Price and Reimbursement Committee that would have resolved all of AIFA's claims relating to sales of TYSABRI in excess of the reimbursement limit for the periods between February 2009 through February 2013 for an aggregate repayment of EUR33.3 million. The agreement was sent to the Avvocatura Generale dello Stata (Attorney General) for its opinion. As a result of this agreement, we recorded a liability and reduction to revenue of EUR15.4 million at June 30, 2013. That adjustment approximates 50% of the claim related to the period from February 2009 through February 2011 as the likelihood of making a payment to resolve AIFA's claims for this period was then probable and the amount could be estimated.

During the first quarter of 2014, following receipt of a report from the Attorney General, AIFA's Price and Reimbursement Committee chose not to finalize the July 2013 agreement, but to instead enter into a new agreement with Biogen Idec Italia SRL that would eliminate the reimbursement limit beginning in February 2013. The agreement is pending approval by the AIFA Board of Directors and would be effective for a 24-month term following its subsequent publication in the Official Gazette.

With respect to the February 2009 through February 2013 period, AIFA and Biogen Idec Italia SRL remain in discussions about a resolution. We continue to believe that a settlement with AIFA and ratification of all interested parties in Italy is probable and have retained the EUR15.4 million liability recorded as of June 30, 2013.

We will continue to defer revenue until a pricing agreement is approved. Upon approval of a pricing agreement, related to the periods subsequent to February 2013, TYSABRI revenues that were deferred subsequent to February 2013 will be recognized as revenue based on the agreed-upon price. For additional information, please read Note 18, Litigation to these condensed consolidated financial statements.