Eli Lilly 2008 Annual Report Download - page 25

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FINANCIALS
23
Total debt as of December 31, 2008 increased
$5.45 billion, to $10.46 billion, refl ecting the commer-
cial paper we issued in November 2008 primarily to
fi nance our acquisition of ImClone, offset by long-term
debt repayments and paydown of commercial paper
with cash and cash equivalents on hand. Our current
debt ratings from Standard & Poor’s and Moody’s are
at AA and A1, respectively.
Dividends of $1.88 per share were paid in 2008, an
increase of 11 percent from 2007. In the fourth quar-
ter of 2008, effective for the fi rst-quarter dividend in
2009, the quarterly dividend was increased to $.49 per
share (a 4.3 percent increase), resulting in an indicated
annual rate for 2009 of $1.96 per share. The year 2008
was the 124th consecutive year in which we made divi-
dend payments and the 41st consecutive year in which
dividends have been increased.
In recent months, global economic conditions have
deteriorated. Triggered by the liquidity crisis in the
capital markets, the implications have become more
widespread, resulting in higher unemployment and
declines in real consumer spending. In addition, many
fi nancial institutions have tightened lines of credit,
reducing funding available for near-term economic
growth. Pharmaceutical consumption has traditionally
been relatively unaffected by economic downturns; how-
ever, an extended downturn could lead to a decline in
overall prescriptions corresponding with the growth of
the uninsured and underinsured population in the U.S. In
addition, both private and public health care payers are
facing heightened fi scal challenges due to the economic
slowdown and are taking aggressive steps to reduce the
costs of care, including pressures for increased phar-
maceutical discounts and rebates and efforts to drive
greater use of generic drugs. We continue to monitor
the potential near-term impact of prescription trends,
the credit worthiness of our wholesalers and other
customers and suppliers, the decline of health insur-
ance coverage in the overall population, and the federal
government’s involvement in the economic crisis.
We believe that cash generated from operations,
along with available cash and cash equivalents, will be
suffi cient to fund our normal operating needs, including
debt service, capital expenditures, costs associated with
litigation and government investigations, and dividends
in 2009. We believe that amounts accessible through
existing commercial paper markets should be adequate
to fund short-term borrowings. Our access to credit
markets has not been adversely affected by the recent
illiquidity in the market because of the high credit qual-
Consolidated Statements of Comprehensive Income (Loss)
ELI LILLY AND COMPANY AND SUBSIDIARIES
(Dollars in millions) Year Ended December 31 2008 2007 2006
Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(2,071.9) $2,953.0 $2,662.7
Other comprehensive income (loss)
Foreign currency translation gains (losses) . . . . . . . . . . . . . . . . . . (766.1) 756.6 542.4
Net unrealized losses on securities . . . . . . . . . . . . . . . . . . . . . . . . . (190.6) (11.4) (3.2)
Minimum pension liability adjustment (Note 13) . . . . . . . . . . . . . . . — — (18.8)
Defi ned benefi t pension and retiree health benefi t
plans (Note 13) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,941.2) 943.8 —
Effective portion of cash fl ow hedges. . . . . . . . . . . . . . . . . . . . . . . . 23.2 (0.1) 143.3
Other comprehensive income (loss) before income taxes . . . . . . . . . (3,874.7) 1,688.9 663.7
Provision for income taxes related to other comprehensive
income (loss) items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,074.7 (287.0) (43.1)
Other comprehensive income (loss) (Note 15) . . . . . . . . . . . . . . . . . . . (2,800.0) 1,401.9 620.6
Comprehensive income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(4,871.9) $4,354.9 $3,283.3
See notes to consolidated fi nancial statements.
0.0
0.50
1.00
1.50
2.00
Dividends Paid Per Share Continue to Grow
($ dollars)
Dividends paid during 2008 increased to
$1.88 per share. This constitutes the 41st
consecutive increase in annual dividends.
Our strong 2008 cash flow enabled us to
increase the first-quarter 2009 dividend
by 4.3 percent, to $.49 per share.
04 05 06 07 08
$1.88
$1.60
$1.52
$1.42
$1.70