AbbVie 2012 Annual Report Download - page 35

transitional trademark license agreement, were prepared in the context of the separation while AbbVie
was still a wholly-owned subsidiary of Abbott. Accordingly, during the period in which the terms of
those agreements were prepared, AbbVie did not have an independent board of directors or a
management team that was independent of Abbott. As a result, the terms of those agreements may not
reflect terms that would have resulted from arm’s-length negotiations between unaffiliated third parties.
Arm’s-length negotiations between Abbott and an unaffiliated third party in another form of
transaction, such as a buyer in a sale of a business transaction, may have resulted in more favorable
terms to the unaffiliated third party. See Item 13, ‘‘Certain Relationships and Related Transactions, and
Director Independence.’’
Risks Related to AbbVie’s Common Stock
AbbVie’s stock price may fluctuate significantly.
AbbVie cannot predict the prices at which shares of its common stock may trade. The market
price of AbbVie’s common stock may fluctuate significantly due to a number of factors, some of which
may be beyond AbbVie’s control, including:
• actual or anticipated fluctuations in AbbVie’s operating results;
• changes in earnings estimated by securities analysts or AbbVie’s ability to meet those estimates;
• the operating and stock price performance of comparable companies;
• changes to the regulatory and legal environment under which AbbVie operates; and
• domestic and worldwide economic conditions.
In addition, when the market price of a company’s common stock drops significantly, stockholders
often institute securities class action lawsuits against the company. A lawsuit against AbbVie could
cause it to incur substantial costs and could divert the time and attention of its management and other
resources.
AbbVie cannot guarantee the timing, amount, or payment of dividends on its common stock.
Although AbbVie expects to pay regular cash dividends, the timing, declaration, amount and
payment of future dividends to stockholders will fall within the discretion of AbbVie’s board of
directors. The board’s decisions regarding the payment of dividends will depend on many factors, such
as AbbVie’s financial condition, earnings, capital requirements, debt service obligations, industry
practice, legal requirements, regulatory constraints, and other factors that the board deems relevant.
For more information, see Item 5, ‘‘Market for Registrant’s Common Equity, Related Stockholder
Matters and Issuer Purchases of Equity Securities.’’ AbbVie’s ability to pay dividends will depend on its
ongoing ability to generate cash from operations and access capital markets. AbbVie cannot guarantee
that it will pay a dividend in the future or continue to pay any dividend if AbbVie commences paying
dividends.
Your percentage of ownership in AbbVie may be diluted in the future.
In the future, your percentage ownership in AbbVie may be diluted because of equity issuances for
capital market transactions, equity awards that AbbVie will be granting to AbbVie’s directors, officers
and employees, acquisitions, or other purposes. AbbVie’s employees will have options to purchase
shares of its common stock as a result of conversion of their Abbott stock options (in whole or in part)
to AbbVie stock options. AbbVie anticipates its compensation committee will grant additional stock
options or other stock-based awards to its employees. Such awards will have a dilutive effect on
AbbVie’s earnings per share, which could adversely affect the market price of AbbVie’s common stock.
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