Eli Lilly 2013 Annual Report Download - page 72

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Approximately 2.2 million shares are expected to be issued in 2014. As of December 31, 2013, the total
remaining unrecognized compensation cost related to nonvested SVAs was $51.6 million, which will be
amortized over the weighted-average remaining requisite service period of 20 months.
Restricted Stock Units
RSUs are granted to certain employees and are payable in shares of our common stock. RSU shares are
accounted for at fair value based upon the closing stock price on the date of grant. The corresponding
expense is amortized over the vesting period, typically 3 years. The fair values of RSU awards granted during
the years ended December 31, 2013, 2012, and 2011 were $54.10, $39.65, and $35.80, respectively. The
number of shares ultimately issued for the RSU program remains constant with the exception of forfeitures.
Pursuant to this plan, 1.1 million, 1.4 million, and 1.5 million shares were granted during the years ended
December 31, 2013, 2012, and 2011, respectively, and approximately 0.8 million, 0.3 million, and 0.2 million
shares were issued during the years ended December 31, 2013, 2012, and 2011, respectively. Approximately
0.8 million shares are expected to be issued in 2014. As of December 31, 2013, the total remaining
unrecognized compensation cost related to nonvested RSUs was $58.4 million, which will be amortized over
the weighted-average remaining requisite service period of 21 months.
Stock Option Program
Stock options were granted prior to 2007 to officers, management, and board members at exercise prices
equal to the fair market value of our stock at the date of grant. Options fully vested 3 years from the grant date
and have a term of 10 years.
Stock option activity during the year ended December 31, 2013 is summarized below:
Shares of
Common Stock
Attributable to
Options
(in thousands)
Weighted-
Average
Exercise
Price of Options
Weighted-
Average
Remaining
Contractual Term
(in years)
Aggregate
Intrinsic
Value
Outstanding at January 1, 2013. . . . . . . . 27,232 $ 63.89
Exercised . . . . . . . . . . . . . . . . . . . . . . . . . (208) 54.27
Forfeited or expired . . . . . . . . . . . . . . . . . (10,884) 59.95
Outstanding at December 31, 2013 . . . . . 16,140 66.66 0.7 $ —
Exercisable at December 31, 2013 . . . . . 16,140 66.66 0.7 —
For options exercised during the years ended December 31, 2013, 2012, and 2011, the related intrinsic value,
cash received, and tax benefits were not material.
Note 12: Shareholders' Equity
During 2013, we purchased $500.0 million of shares associated with our $5.00 billion share repurchase
program that was announced in the fourth quarter of 2013. As of December 31, 2013, there were $4.50 billion
of shares remaining in that program. During 2013 and 2012, we repurchased $1.10 billion and $400.0 million,
respectively, of shares, completing our $1.50 billion share repurchase program announced in 2012. During
2012, we also repurchased $419.2 million of shares, completing our $3.00 billion share repurchase program
announced in 2000. No shares were repurchased during the year ended December 31, 2011.
We have 5.0 million authorized shares of preferred stock. As of December 31, 2013 and 2012, no preferred
stock has been issued.
We have an employee benefit trust that held 50.0 million shares of our common stock at both December 31,
2013 and 2012, to provide a source of funds to assist us in meeting our obligations under various employee
benefit plans. The cost basis of the shares held in the trust was $3.01 billion at both December 31, 2013 and
2012, and is shown as a reduction in shareholders’ equity. Any dividend transactions between us and the trust
are eliminated. Stock held by the trust is not considered outstanding in the computation of earnings per share.
The assets of the trust were not used to fund any of our obligations under these employee benefit plans
during the years ended December 31, 2013, 2012, and 2011.