AbbVie 2012 Annual Report Download - page 31

Other factors can have a material adverse effect on AbbVie’s profitability and financial condition.
Many other factors can affect AbbVie’s profitability and financial condition, including:
• changes in or interpretations of laws and regulations, including changes in accounting standards,
taxation requirements, product marketing application standards, and environmental laws;
• differences between the fair value measurement of assets and liabilities and their actual value,
particularly for pensions, retiree health care, stock compensation, intangibles, and goodwill; and
for contingent liabilities such as litigation, the absence of a recorded amount, or an amount
recorded at the minimum, compared to the actual amount;
• changes in the rate of inflation (including the cost of raw materials, commodities, and supplies),
interest rates, market value of AbbVie’s equity investments, and the performance of investments
held by it or its employee benefit trusts;
• changes in the creditworthiness of counterparties that transact business with or provide services
to AbbVie or its employee benefit trusts; and
• changes in business, economic, and political conditions, including: war, political instability,
terrorist attacks, the threat of future terrorist activity and related military action; natural
disasters; the cost and availability of insurance due to any of the foregoing events; labor
disputes, strikes, slow-downs, or other forms of labor or union activity; and pressure from third-
party interest groups.
Risks Related to AbbVie’s Separation from Abbott
AbbVie’s historical financial information is not necessarily representative of the results that it would have
achieved as a separate, publicly traded company and may not be a reliable indicator of its future results.
The historical information about AbbVie in this Annual Report on Form 10-K refers to AbbVie’s
business as operated by and integrated with Abbott. AbbVie’s historical financial information is derived
from the consolidated financial statements and accounting records of Abbott. Accordingly, the financial
information included in this Annual Report on Form 10-K does not necessarily reflect the financial
condition, results of operations or cash flows that AbbVie would have achieved as a separate, publicly
traded company during the periods presented or those that AbbVie will achieve in the future primarily
as a result of the factors described below:
• Prior to the separation, AbbVie’s business was operated by Abbott as part of its broader
corporate organization, rather than as an independent company. Abbott or one of its affiliates
performed various corporate functions for AbbVie, such as accounting, information technology,
and finance. Abbott currently provides some of these functions to AbbVie, as described in
Item 13, ‘‘Certain Relationships and Related Transactions, and Director Independence.’’
AbbVie’s historical financial results reflect allocations of corporate expenses from Abbott for
such functions and are likely to be less than the expenses AbbVie would have incurred had it
operated as a separate publicly traded company. AbbVie will need to make significant
investments to replicate or outsource from other providers certain facilities, systems,
infrastructure, and personnel to which AbbVie no longer has access as a result of its separation
from Abbott. These initiatives to develop AbbVie’s independent ability to operate without access
to Abbott’s existing operational and administrative infrastructure will be costly to implement.
AbbVie may not be able to operate its business efficiently or at comparable costs, and its
profitability may decline;
• Prior to the separation, AbbVie was able to use Abbott’s size and purchasing power in procuring
various goods and services and shared economies of scope and scale in costs, employees, vendor
relationships and customer relationships. Although AbbVie has entered into transition
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