AbbVie 2012 Annual Report Download - page 30

properties and assets substantially as an entirety. If AbbVie breaches a restrictive covenant under any
of its indebtedness, or an event of default occurs in respect of such indebtedness, AbbVie’s lenders of
such indebtedness may be entitled to declare all amounts owing in respect thereof to be immediately
due and payable.
Challenges in the commercial and credit environment may adversely affect AbbVie’s future access to capital.
AbbVie’s ability to issue debt or enter into other financing arrangements on acceptable terms
could be adversely affected if there is a material decline in the demand for AbbVie’s products or in the
solvency of its customers or suppliers or other significantly unfavorable changes in economic conditions.
Volatility in the world financial markets could increase borrowing costs or affect AbbVie’s ability to
access the capital markets. These conditions may adversely affect AbbVie’s ability to obtain and
maintain investment grade credit ratings.
The investment of AbbVie’s cash balance and investments in marketable securities are subject to risks that
may cause losses and affect the liquidity of these investments.
AbbVie’s cash is currently invested in bank deposits and money market mutual funds, which
typically hold debt securities issued by the U.S. federal government or high-grade corporate issuers.
These investments are, and AbbVie’s future investments may be, subject to credit, liquidity, market, and
interest rate risks. If such investments suffer market price declines, AbbVie may recognize in its
earnings the decline in the fair value of these investments below their cost basis when the decline is
judged to be other than temporary. The risks associated with AbbVie’s expected cash balance and
investment portfolio may have a material adverse effect on AbbVie’s results of operations and financial
condition.
AbbVie may need additional financing in the future to meet its capital needs or to make opportunistic
acquisitions, and such financing may not be available on favorable terms, if at all, and may be dilutive to
existing stockholders.
AbbVie may need to seek additional financing for its general corporate purposes. For example, it
may need to increase its investment in research and development activities or need funds to make
acquisitions. AbbVie may be unable to obtain any desired additional financing on terms favorable to it,
if at all. If AbbVie loses its investment grade credit rating or adequate funds are not available on
acceptable terms, AbbVie may be unable to fund its expansion, successfully develop or enhance
products, or respond to competitive pressures, any of which could negatively affect AbbVie’s business.
If AbbVie raises additional funds through the issuance of equity securities, its stockholders will
experience dilution of their ownership interest. If AbbVie raises additional funds by issuing debt or
entering into credit facilities, it may be subject to limitations on its operations due to restrictive
covenants. Failure to comply with these covenants could adversely affect AbbVie’s business.
AbbVie depends on information technology and a failure of those systems could adversely affect AbbVie’s
business.
AbbVie relies on sophisticated information technology systems to operate its business. These
systems are potentially vulnerable to malicious intrusion, random attack, loss of data privacy, or
breakdown. Although AbbVie has invested in the protection of its data and information technology and
also monitors its systems on an ongoing basis, there can be no assurance that these efforts will prevent
breakdowns or breaches in AbbVie’s information technology systems that could adversely affect
AbbVie’s business.
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