Eli Lilly 2012 Annual Report Download - page 93

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81
Note 16: Other Comprehensive Income (Loss)
The accumulated balances related to each component of other comprehensive income (loss) were as follows:
(Amounts presented net of taxes)
Foreign
Currency
Translation
Gains (Losses)
Unrealized Net
Gains (Losses)
on Securities
Defined Benefit
Pension and
Retiree Health
Benefit Plans
Effective Portion
of Cash Flow
Hedges
Accumulated
Other
Comprehensive
Loss
Beginning balance at January 1, 2010. $ 835.8 $ 75.4 $ (3,264.3) $ (118.8) $ (2,471.9)
Unrealized gain (loss). . . . . . . . . . . . . 81.1 (9.3)
Net amount reclassed to net income (27.6) (5.8)
Other comprehensive income (loss) . (325.1) 53.5 88.5 (15.1) (198.2)
Balance at December 31, 2010. . . . . . . 510.7 128.9 (3,175.8) (133.9) (2,670.1)
Unrealized gain (loss). . . . . . . . . . . . . (59.4) 32.6
Net amount reclassed to net income (54.7) (5.8)
Other comprehensive income (loss) . (244.8) (114.1) (856.4) 26.8 (1,188.5)
Balance at December 31, 2011. . . . . . . 265.9 14.8 (4,032.2) (107.1) (3,858.6)
Unrealized gain (loss). . . . . . . . . . . . . 104.1
Net amount reclassed to net income (46.4) 5.9
Other comprehensive income (loss) . 160.9 57.7 (163.0) 5.9 61.5
Balance at December 31, 2012. . . . . . . $ 426.8 $ 72.5 $ (4,195.2) $ (101.2) $ (3,797.1)
The tax effect on the unrealized net gains (losses) on securities was an expense of $30.8 million in 2012, a
benefit of $64.4 million in 2011, and an expense of $27.3 million in 2010. The tax effect related to our defined
benefit pension and retiree health benefit plans (Note 14) was an expense of $34.4 million in 2012, a benefit of
$383.8 million in 2011, and an expense of $60.4 million in 2010. The tax effect on the effective portion of cash
flow hedges was not significant for the years ended December 31, 2012, 2011, and 2010. Income taxes were
not provided for foreign currency translation.
Generally, the assets and liabilities of foreign operations are translated into U.S. dollars using the current
exchange rate. For those operations, changes in exchange rates generally do not affect cash flows; therefore,
resulting translation adjustments are made in shareholders' equity rather than in income.
Note 17: Other—Net, (Income) Expense:
Other—net, (income) expense consisted of the following:
2012 2011 2010
Income related to prepayment of Amylin's obligation (Note 4) . . . . $ (787.8) $ — $ —
Interest expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 177.8 186.0 185.5
Interest income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (105.0) (79.9) (51.9)
Other (income) expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41.0 72.9 (128.6)
Other—net, (income) expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (674.0) $ 179.0 $ 5.0
The most significant component of other—net, (income) expense for the year ended December 31, 2012 was
the income recognized from the early payment of the exenatide revenue-sharing obligation by Amylin. See
Note 4 for additional information. For the year ended December 31, 2011, other—net, (income) expense
primarily consists of the impairment on acquired IPR&D assets related to liprotamase and Amyvid (Note 7)
partially offset by gains on the disposal of investment securities. For the year ended December 31, 2010, other
—net, (income) expense primarily consists of damages recovered from generic pharmaceutical companies
related to Zyprexa patent litigation in Germany and gains on the disposal of investment securities.