Eli Lilly 2008 Annual Report Download - page 61

Download and view the complete annual report

Please find page 61 of the 2008 Eli Lilly annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 132

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132

FINANCIALS
59
The following represents the amounts recognized in other comprehensive income (loss) in 2008:
Defi ned Benefi t Retiree Health
Pension Plans Benefi t Plans
Actuarial loss arising during period . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,533.4 $658.6
Plan amendments during period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2.4) —
Amortization of prior service cost (benefi t) included in net
income . . (8.2) 36.0
Amortization of net actuarial loss included in net income . . . . . . . . . (76.6) (62.7)
Foreign currency exchange rate changes. . . . . . . . . . . . . . . . . . . . . . . (130.4) (6.5)
Total other comprehensive loss during period. . . . . . . . . . . . . . . . . . . $2,315.8 $625.4
We have defi ned contribution savings plans that cover our eligible employees worldwide. The purpose of
these defi ned contribution plans is generally to provide additional fi nancial security during retirement by provid-
ing employees with an incentive to save. Our contributions to the plan are based on employee contributions and the
level of our match. Expenses under the plans totaled $114.1 million, $112.3 million, and $106.5 million, for the years
2008, 2007, and 2006, respectively.
We provide certain other postemployment benefi ts primarily related to disability benefi ts and accrue for the
related cost over the service lives of employees. Expenses associated with these benefi t plans in 2008, 2007, and
2006 were not signifi cant.
Our U.S. defi ned benefi t pension and retiree health benefi t plan investment allocation strategy currently
comprises approximately 88 percent to 92 percent growth investments and 8 percent to 12 percent fi xed-income
investments. Within the growth investment allocation, the plan asset strategy encompasses equity and equity-like
instruments that are expected to represent approximately 75 percent of our plan asset portfolio of both public and
private market investments. The largest component of these equity and equity-like instruments is public equity
securities that are well diversifi ed and invested in U.S. and international small-to-large companies. The remaining
portion of the growth investment allocation includes alternative investments.
Our defi ned benefi t pension plan and retiree health plan asset allocations as of December 31 are as follows:
Percentage of Percentage of
Pension Plan Assets Retiree Health Plan Assets
(Percents) 2008 2007 2008 2007
Asset Category
Equity securities and equity-like instruments . . . . . . . . . 70 75 74 78
Debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 10 14 11
Real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1 — —
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 14 12 11
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100 100 100 100
In 2009, we expect to contribute approximately $55 million to our defi ned benefi t pension plans to satisfy mini-
mum funding requirements for the year. In addition, we expect to contribute approximately $15 million of additional
discretionary funding in 2009 to our defi ned benefi t plans. We do not expect to make any contributions to our post-
retirement health benefi t plans during 2009.
Note 14: Contingencies
We are a party to various legal actions, government investigations, and environmental proceedings. The most
signifi cant of these are described below. While it is not possible to determine the outcome of these matters, we
believe that, except as specifi cally noted below, the resolution of all such matters will not have a material adverse
effect on our consolidated fi nancial position or liquidity, but could possibly be material to our consolidated results
of operations in any one accounting period.
Patent Litigation
We are engaged in the following patent litigation matters brought pursuant to procedures set out in the Hatch-
Waxman Act (the Drug Price Competition and Patent Term Restoration Act of 1984):
• Cymbalta: Sixteen generic drug manufacturers have submitted Abbreviated New Drug Applications (ANDAs)
seeking permission to market generic versions of Cymbalta prior to the expiration of our relevant U.S. patents (the