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AD Domain has no DNS Suffix

We are in the process of some major upgrades.  One of which is upgrading AD and Exchange.  Our current AD is 2003 native with 2 2012 R2 DCs.  Exchange is 2003 running on a 2000 server.  One of the tasks we need to accomplish is raising the functional level of the domain.  This concerns me because, when you look at the AD domain in DNS, it has no suffix.  For example, instead of it looking like abc.local, it is simply abc with no .local, .com, .net or anything.

How will this impact Exchange 2010 and AD 2012 R2.  Has anyone seen this?  It looks like a previous upgrade went awry.

Thanks in advance for your thoughts.
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Great answer.  I had forgotten about single-label domains.  What about the 2012 DC's.  Will there be any issue with those?  The renaming article provided above only discusses 2003 and 2008.
No, there won't be any issues with them. The domain rename process is the same in later versions.