Eli Lilly 2011 Annual Report Download - page 77

FORM 10-K
The activity in the Level 3 investments during the year ended December 31, 2010 was as follows:
Hedge
Funds Equity-like Funds Inter-national Equity
Fixed
Income-
Developed
Markets Real Estate Total
Defined Benefit Pension Plans
Beginning balance at January 1, 2010 .......... $1,381.5 $658.2 $ 3.9 $ 3.5 $ 85.4 $2,132.5
Actual return on plan assets, including changes
in foreign exchange rates:
Relating to assets still held at the reporting
date .................................. 106.1 66.2 0.1 0.1 4.2 176.7
Relating to assets sold during the period ..... 0.0 11.3 (0.4) (0.1) (5.3) 5.5
Purchases ................................. 215.8 131.4 0.1 0.0 41.4 388.7
Sales ..................................... (21.4) 0.0 (3.1) (3.4) 0.0 (27.9)
Settlements ................................ (18.1) (64.2) 0.0 (0.1) 0.0 (82.4)
Transfers in and/or out of Level 3 .............. (422.0) 0.0 (0.6) 0.0 0.8 (421.8)
Ending balance at December 31, 2010 .......... $1,241.9 $802.9 $ 0.0 $ 0.0 $126.5 $2,171.3
Retiree Health Benefit Plans
Beginning balance at January 1, 2010 .......... $ 140.9 $ 63.6 $ 0.4 $ 0.4 $ 0.0 $ 205.3
Actual return on plan assets, including changes
in foreign exchange rates:
Relating to assets still held at the reporting
date .................................. 5.4 4.6 0.0 0.0 0.0 10.0
Relating to assets sold during the period ..... 0.0 0.6 0.0 0.0 0.0 0.6
Purchases ................................. 5.3 11.9 0.0 0.0 0.0 17.2
Sales ..................................... (0.6) 0.0 (0.4) (0.4) 0.0 (1.4)
Settlements ................................ (1.8) (6.2) 0.0 0.0 0.0 (8.0)
Transfers in and/or out of Level 3 .............. (42.6) 0.0 0.0 0.0 0.0 (42.6)
Ending balance at December 31, 2010 .......... $ 106.6 $ 74.5 $ 0.0 $ 0.0 $ 0.0 $ 181.1
Substantially all of the Level 3 transfers are associated with assets that can be redeemed at their NAV per share
within a reasonable period of time. This reclassification is in accordance with current accounting guidance.
For the year ended December 31, 2012, we expect to contribute approximately $75 million to our defined benefit
pension plans to satisfy minimum funding requirements for the year. In addition, we expect to contribute
approximately $300 million of additional discretionary funding in the aggregate during the year ended December 31,
2012 to several of our global defined benefit pension and post-retirement health benefit plans.
Note 15: Contingencies
We are a party to various legal actions and government investigations. The most significant of these are described
below. It is not possible to determine the outcome of these matters, and we cannot reasonably estimate the
maximum potential exposure or the range of possible loss in excess of amounts accrued for any of these matters;
however, we believe that, except as specifically noted below with respect to the Alimta Hatch-Waxman Act patent
challenges, the resolution of all such matters will not have a material adverse effect on our consolidated financial
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 U.S. 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):
• Alimta: Teva Parenteral Medicines, Inc. (Teva); APP Pharmaceuticals, LLC (APP); and Barr Laboratories, Inc.
(Barr) each submitted ANDAs seeking approval to market generic versions of Alimta prior to the expiration of
the relevant U.S. patents and data-based pediatric exclusivity period (compound patent licensed from the
Trustees of Princeton University and expiring in 2017, concomitant nutritional supplement use patent expiring in
2022) and alleging the patents are invalid. We, along with Princeton, filed lawsuits in the U.S. District Court for
the District of Delaware against Teva, APP, and Barr seeking rulings that the compound patent is valid and
infringed. In July 2011, the district court entered judgment in our favor, upholding that patent’s validity. The
generic manufacturers have appealed this decision. In October 2010, we filed a lawsuit in the U.S. District Court
for the Southern District of Indiana against Teva, APP, Pliva Hrvatska D.O.O., and Barr seeking rulings that our
concomitant nutritional supplement use patent is valid and infringed. No trial date has yet been set. In January
2012, we filed a similar lawsuit against Accord Healthcare Inc.
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