Eli Lilly 2010 Annual Report Download - page 72

FORM 10-K
Note 11: Shareholders’ Equity
Changes in certain components of shareholders’ equity were as follows:
Additional
Paid-in
Capital Retained Earnings
Deferred
Costs -
ESOP
Common Stock in
Treasury
Shares
(in thousands) Amount
Balance at January 1, 2008 ............................ $3,805.2 $11,806.7 $(95.2) 899 $100.5
Net loss ............................................ (2,071.9)
Cash dividends declared per share: $1.90 ................ (2,079.9)
Retirement of treasury shares ......................... (10.9) (170) (11.1)
Issuance of stock under employee stock plans-net ........ (84.9) 160 9.8
Stock-based compensation ............................ 255.3
ESOP transactions ................................... 11.9 8.9
Balance at December 31, 2008 ......................... 3,976.6 7,654.9 (86.3) 889 99.2
Net income ......................................... 4,328.8
Cash dividends declared per share: $1.96 ................ (2,153.3)
Retirement of treasury shares ......................... (3.3) (132) (3.3)
Issuance of stock under employee stock plans-net ........ (85.0) 125 2.6
Stock-based compensation ............................ 368.5
ESOP transactions ................................... 6.9 8.9
Employee benefit trust contribution ..................... 371.9
Balance at December 31, 2009 ......................... 4,635.6 9,830.4 (77.4) 882 98.5
Net income ......................................... 5,069.5
Cash dividends declared per share: $1.96 ................ (2,167.3)
Retirement of treasury shares ......................... (1.0) (28) (1.0)
Issuance of stock under employee stock plans-net ........ (87.6) 10 (1.1)
Stock-based compensation ............................ 231.0
ESOP transactions ................................... 20.5 25.0
Balance at December 31, 2010 ......................... $4,798.5 $12,732.6 $(52.4) 864 $ 96.4
As of December 31, 2010, we have purchased $2.58 billion of our announced $3.0 billion share repurchase program.
No shares were repurchased in 2010, 2009, or 2008.
We have 5 million authorized shares of preferred stock. As of December 31, 2010 and 2009, no preferred stock has
been issued.
We have an employee benefit trust which held 50.0 million and 50.0 million shares of our common stock at
December 31, 2010 and 2009, respectively, to provide a source of funds to assist us in meeting our obligations under
various employee benefit plans. In February 2009, we contributed an additional 10 million shares to the employee
benefit trust, which resulted in a reclassification within equity from additional paid-in capital of $371.9 million and
common stock of $6.3 million to the employee benefit trust of $378.2 million. The funding had no net impact on
shareholders’ equity as we consolidate the employee benefit trust. The cost basis of the shares held in the trust was
$3.01 billion and $3.01 billion at December 31, 2010 and 2009, respectively, 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 in 2010, 2009, or 2008.
We have an ESOP as a funding vehicle for the existing employee savings plan. The ESOP used the proceeds of a loan
from us to purchase shares of common stock from the treasury. The ESOP issued third-party debt, repayment of
which was guaranteed by us (see Note 8). The proceeds were used to purchase shares of our common stock on the
open market. Shares of common stock held by the ESOP will be allocated to participating employees annually
through 2017 as part of our savings plan contribution. The fair value of shares allocated each period is recognized as
compensation expense.
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