Eli Lilly 2008 Annual Report Download - page 59

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FINANCIALS
57
Note 13: Retirement Benefi ts
We use a measurement date of December 31 to develop the change in benefi t obligation, change in plan assets,
funded status, and amounts recognized in the consolidated balance sheets at December 31 for our defi ned benefi t
pension and retiree health benefi t plans, which were as follows:
Defi ned Benefi t Pension Plans Retiree Health Benefi t Plans
2008 2007 2008 2007
Change in benefi t obligation
Benefi t obligation at beginning of year . . . . . . . . $6,561.0 $6,480.3 $1,622.8 $1,740.7
Service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 260.1 287.1 62.1 70.4
Interest cost. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 409.8 362.4 105.7 101.4
Actuarial (gain) loss . . . . . . . . . . . . . . . . . . . . . . . (257.4) (373.1) 101.6 16.4
Benefi ts paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (338.4) (311.0) (92.2) (81.6)
Plan amendments. . . . . . . . . . . . . . . . . . . . . . . . . (2.4) 32.7 — (227.7)
Foreign currency exchange rate changes
and other adjustments. . . . . . . . . . . . . . . . . . . (279.0) 82.6 (3.7) 3.2
Benefi t obligation at end of year . . . . . . . . . . . . . 6,353.7 6,561.0 1,796.3 1,622.8
Change in plan assets
Fair value of plan assets at beginning of year . . 7,304.2 6,519.0 1,348.5 1,157.3
Actual return on plan assets . . . . . . . . . . . . . . . . (2,187.8) 833.8 (438.6) 147.4
Employer contribution . . . . . . . . . . . . . . . . . . . . . 223.7 202.9 87.9 125.4
Benefi ts paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (326.1) (301.4) (92.2) (81.6)
Foreign currency exchange rate changes
and other adjustments. . . . . . . . . . . . . . . . . . . (217.9) 49.9 — —
Fair value of plan assets at end of year . . . . . . . 4,796.1 7,304.2 905.6 1,348.5
Funded status . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,557.6) 743.2 (890.7) (274.3)
Unrecognized net actuarial loss . . . . . . . . . . . . . 3,474.8 1,143.3 1,409.6 820.3
Unrecognized prior service cost (benefi t) . . . . . 72.7 88.4 (261.6) (297.7)
Net amount recognized . . . . . . . . . . . . . . . . . . . . $1,989.9 $ 1,974.9 $ 257.3 $ 248.3
Amounts recognized in the consolidated
balance sheet consisted of
Prepaid pension. . . . . . . . . . . . . . . . . . . . . . . . . . . $ — $1,670.5 $ — $ –
Other current liabilities . . . . . . . . . . . . . . . . . . . . (52.9) (47.9) (7.8) (8.6)
Accrued retirement benefi t . . . . . . . . . . . . . . . . . (1,504.7) (879.4) (882.9) (265.7)
Accumulated other comprehensive loss
before income taxes. . . . . . . . . . . . . . . . . . . . . 3,547.5 1,231.7 1,148.0 522.6
Net amount recognized . . . . . . . . . . . . . . . . . . . . $ 1,989.9 $ 1,974.9 $ 257.3 $ 248.3
The unrecognized net actuarial loss and unrecognized prior service cost (benefi t) have not yet been recognized
in net periodic pension costs and are included in accumulated other comprehensive loss at December 31, 2008.
In 2009, we expect to recognize from accumulated other comprehensive loss as components of net periodic
benefi t cost, $97.5 million of unrecognized net actuarial loss and $8.7 million of unrecognized prior service cost
related to our defi ned benefi t pension plans, and $69.4 million of unrecognized net actuarial loss and $35.9 million
of unrecognized prior service benefi t related to our retiree health benefi t plans. We do not expect any plan assets
to be returned to us in 2009.