2.2.0.25falsefalse10101 - Disclosure - Summary of Significant Accounting Policiestruefalsefalse1falsefalseUSDfalsefalse1/1/2010 - 12/31/2010
USD ($)
USD ($) / shares
$Duration_1_1_2010_To_12_31_2010http://www.sec.gov/CIK0000059478duration2010-01-01T00:00:002010-12-31T00:00:00Unit12Standardhttp://www.xbrl.org/2003/iso4217USDiso42170Unit15Dividehttp://www.xbrl.org/2003/iso4217USDiso4217http://www.xbrl.org/2003/instancesharesxbrli0Unit1Standardhttp://www.xbrl.org/2003/instancesharesxbrli0Unit14Standardhttp://www.xbrl.org/2003/instancepurexbrli0USDUSD$2true0lly_SignificantAccountingPoliciesAbstractllyfalsenadurationSignificant Accounting Policies [Abstract]falsefalsefalsefalsefalsefalsefalsefalsefalsefalse1falsefalsefalse00falsefalsefalsefalsefalseOtherxbrli:stringItemTypestringSignificant Accounting Policies [Abstract]falsefalse3false0us-gaap_SignificantAccountingPoliciesTextBlockus-gaaptruenadurationNo definition available.falsefalsefalsefalsefalsefalsefalsefalsefalsefalse1falsefalsefalse00<div>
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<p class="MsoNormal" style="font-size: 10pt; margin: 0in 32pt 0pt 0in; font-family: 'Times New Roman','serif'; text-align: justify;">Note 1: Summary of Significant Accounting Policies </p>
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 32pt 0pt 0in; font-family: 'Times New Roman','serif'; text-align: justify;"> </p>
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0.2in 0pt 0in; font-family: 'Times New Roman','serif'; text-align: left;" align="left"><b>Basis of presentation:</b> The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (GAAP). The accounts of all wholly-owned and majority-owned subsidiaries are included in the consolidated financial statements. Where our ownership of consolidated subsidiaries is less than 100 percent, the noncontrolling shareholders' interests are reflected in shareholders' equity. All intercompany balances and transactions have been eliminated.</p>
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0.2in 0pt 0in; font-family: 'Times New Roman','serif'; text-align: left;" align="left"> </p>
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0.2in 0pt 0in; font-family: 'Times New Roman','serif'; text-align: left;" align="left">The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and related disclosures at the date of the financial statements and during the reporting period. Actual results could differ from those estimates. We issued our financial statements by filing with the Securities and Exchange Commission and have evaluated subsequent events up to the time of the filing.</p>
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0.2in 0pt 0in; font-family: 'Times New Roman','serif'; text-align: left;" align="left"> </p>
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0.2in 0pt 0in; font-family: 'Times New Roman','serif'; text-align: left;" align="left">All per-share amounts, unless otherwise noted in the footnotes, are presented on a diluted basis, that is, based on the weighted-average number of outstanding common shares plus the effect of dilutive stock options and other incremental shares.</p>
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0.2in 0pt 0in; font-family: 'Times New Roman','serif'; text-align: left;" align="left"> </p>
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0.2in 0pt 0in; font-family: 'Times New Roman','serif'; text-align: left;" align="left"><b>Cash equivalents:</b> We consider all highly liquid investments with a maturity of three months or less from the date of purchase to be cash equivalents. The cost of these investments approximates fair value.</p>
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0.2in 0pt 0in; font-family: 'Times New Roman','serif'; text-align: left;" align="left"> </p>
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0.2in 0pt 0in; font-family: 'Times New Roman','serif'; text-align: left;" align="left"><b>Inventories:</b> We state all inventories at the lower of cost or market. We use the last-in, first-out (LIFO) method for the majority of our inventories located in the continental United States, or approximately <font class="_mt">45</font> percent of our total inventories. Other inventories are valued by the first-in, first-out (FIFO) method. FIFO cost approximates current replacement cost. Inventories at December 31 consisted of the following:</p>
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0.2in 0pt 0in; font-family: 'Times New Roman','serif'; text-align: justify;"> </p>
<table class="MsoNormalTable" style="font-size: 11pt; font-family: 'Calibri','sans-serif'; border-collapse: collapse;" cellspacing="0" cellpadding="0" border="0">
<tr><td style="padding-right: 4pt; padding-left: 4pt; padding-bottom: 0in; width: 3.25in; padding-top: 0in;" valign="top" width="312">
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; text-align: justify;"> </p></td>
<td style="padding-right: 4pt; padding-left: 4pt; padding-bottom: 0in; width: 1.5in; padding-top: 0in; border-bottom: windowtext 1pt solid;" valign="top" width="144">
<p class="MsoFootnoteText" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; text-align: center;" align="center"><b>2010</b></p></td>
<td style="padding-right: 4pt; padding-left: 4pt; padding-bottom: 0in; width: 1.5in; padding-top: 0in; border-bottom: windowtext 1pt solid;" valign="top" width="144">
<p class="MsoFootnoteText" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; text-align: center;" align="center"><b>2009</b></p></td></tr>
<tr><td style="padding-right: 4pt; padding-left: 4pt; padding-bottom: 0in; width: 3.25in; padding-top: 0in;" valign="top" width="312">
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; text-align: justify;">Finished products </p></td>
<td style="padding-right: 4pt; padding-left: 4pt; padding-bottom: 0in; width: 1.5in; padding-top: 0in;" valign="top" width="144">
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; text-align: justify;"><b>$ 800.8</b></p></td>
<td style="padding-right: 4pt; padding-left: 4pt; padding-bottom: 0in; width: 1.5in; padding-top: 0in;" valign="top" width="144">
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; text-align: justify;">$ 938.3</p></td></tr>
<tr><td style="padding-right: 4pt; padding-left: 4pt; padding-bottom: 0in; width: 3.25in; padding-top: 0in;" valign="top" width="312">
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; text-align: justify;">Work in process </p></td>
<td style="padding-right: 4pt; padding-left: 4pt; padding-bottom: 0in; width: 1.5in; padding-top: 0in;" valign="top" width="144">
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; text-align: justify;"><b> 1,714.2</b></p></td>
<td style="padding-right: 4pt; padding-left: 4pt; padding-bottom: 0in; width: 1.5in; padding-top: 0in;" valign="top" width="144">
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; text-align: justify;"> 1,830.1</p></td></tr>
<tr><td style="padding-right: 4pt; padding-left: 4pt; padding-bottom: 0in; width: 3.25in; padding-top: 0in;" valign="top" width="312">
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; text-align: justify;">Raw materials and supplies </p></td>
<td style="padding-right: 4pt; padding-left: 4pt; padding-bottom: 0in; width: 1.5in; padding-top: 0in; border-bottom: windowtext 1pt solid;" valign="top" width="144">
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; text-align: justify;"><b> 220.8</b></p></td>
<td style="padding-right: 4pt; padding-left: 4pt; padding-bottom: 0in; width: 1.5in; padding-top: 0in; border-bottom: windowtext 1pt solid;" valign="top" width="144">
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; text-align: justify;"> 227.8</p></td></tr>
<tr><td style="padding-right: 4pt; padding-left: 4pt; padding-bottom: 0in; width: 3.25in; padding-top: 0in;" valign="top" width="312">
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; text-align: justify;"> </p></td>
<td style="padding-right: 4pt; padding-left: 4pt; padding-bottom: 0in; width: 1.5in; padding-top: 0in;" valign="top" width="144">
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; text-align: justify;"><b> 2,735.8</b></p></td>
<td style="padding-right: 4pt; padding-left: 4pt; padding-bottom: 0in; width: 1.5in; padding-top: 0in;" valign="top" width="144">
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; text-align: justify;"> 2,996.2</p></td></tr>
<tr><td style="padding-right: 4pt; padding-left: 4pt; padding-bottom: 0in; width: 3.25in; padding-top: 0in;" valign="top" width="312">
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 1pt 0pt 0in; font-family: 'Times New Roman','serif'; text-align: justify;">Reduction to LIFO cost </p></td>
<td style="padding-right: 4pt; padding-left: 4pt; padding-bottom: 0in; width: 1.5in; padding-top: 0in; border-bottom: windowtext 1pt solid;" valign="top" width="144">
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; text-align: justify;"><b> (218.1)</b></p></td>
<td style="padding-right: 4pt; padding-left: 4pt; padding-bottom: 0in; width: 1.5in; padding-top: 0in; border-bottom: windowtext 1pt solid;" valign="top" width="144">
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; text-align: justify;"> (146.3)</p></td></tr>
<tr><td style="padding-right: 4pt; padding-left: 4pt; padding-bottom: 0in; width: 3.25in; padding-top: 0in;" valign="top" width="312">
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; text-align: justify;">Inventories</p></td>
<td style="padding-right: 4pt; padding-left: 4pt; padding-bottom: 0in; width: 1.5in; padding-top: 0in; border-bottom: windowtext 1.5pt solid;" valign="top" width="144">
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; text-align: justify;"><b>$2,517.7</b></p></td>
<td style="padding-right: 4pt; padding-left: 4pt; padding-bottom: 0in; width: 1.5in; padding-top: 0in; border-bottom: windowtext 1.5pt solid;" valign="top" width="144">
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; text-align: justify;">$2,849.9</p></td></tr></table>
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0.2in 0pt 0in; font-family: 'Times New Roman','serif'; text-align: left;" align="left"> </p>
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0.9pt 0pt 0in; font-family: 'Times New Roman','serif'; text-align: left;" align="left"><b>Investments:</b> Substantially all of our investments in debt and marketable equity securities are classified as available-for-sale. Investment securities with maturity dates of less than one year from the date of the balance sheet are classified as short-term. Available-for-sale securities are carried at fair value with the unrealized gains and losses, net of tax, reported in other comprehensive income (loss). The credit portion of unrealized losses on our debt securities considered to be other-than-temporary are recognized in earnings. <font class="_mt" style="color: black;">The remaining portion of the other-than-temporary impairment </font>on our debt securities<font class="_mt" style="color: black;"> is then recorded in other comprehensive income (loss). The entire amount of other-than-temporary impairment on our equity securities is recognized in earnings. </font>We do not evaluate cost-method investments for impairment unless there is an indicator of impairment. We review these investments for indicators of impairment on a regular basis. Realized gains and losses on sales of available-for-sale securities are computed based upon specific identification of the initial cost adjusted for any other-than-temporary declines in fair value that were recorded in earnings. Investments in companies over which we have significant influence but not a controlling interest are accounted for using the equity method with our share of earnings or losses reported in other<i><font class="_mt" style="color: black;">—</font></i>net, expense. We own no investments that are considered to be trading securities.</p>
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0.9pt 0pt 0in; font-family: 'Times New Roman','serif'; text-align: left;" align="left"><b> </b> </p>
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0.9pt 0pt 0in; font-family: 'Times New Roman','serif'; text-align: left;" align="left"><b>Risk-management instruments:</b> Our derivative activities are initiated within the guidelines of documented corporate risk-management policies and do not create additional risk because gains and losses on derivative contracts offset losses and gains on the assets, liabilities, and transactions being hedged. As derivative contracts are initiated, we designate the instruments individually as either a fair value hedge or a cash flow hedge. Management reviews the correlation and effectiveness of our derivatives on a quarterly basis.</p>
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0.2in 0pt 0in; font-family: 'Times New Roman','serif'; text-align: left;" align="left"> </p>
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0.9pt 0pt 0in; font-family: 'Times New Roman','serif'; text-align: left;" align="left">For derivative contracts that are designated and qualify as fair value hedges, the derivative instrument is marked to market with gains and losses recognized currently in income to offset the respective losses and gains recognized on the underlying exposure. For derivative contracts that are designated and qualify as cash flow hedges, the effective portion of gains and losses on these contracts is reported as a component of accumulated other comprehensive income (loss) and reclassified into earnings in the same period the hedged transaction affects earnings. Hedge ineffectiveness is immediately recognized in earnings. Derivative contracts that are not designated as hedging instruments are recorded at fair value with the gain or loss recognized in current earnings during the period of change.</p>
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0.2in 0pt 0in; font-family: 'Times New Roman','serif'; text-align: left;" align="left"> </p>
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0.2in 0pt 0in; font-family: 'Times New Roman','serif'; text-align: left;" align="left">We may enter into foreign currency forward contracts to reduce the effect of fluctuating currency exchange rates (principally the euro, the British pound, and the Japanese yen). Foreign currency derivatives used for hedging are put in place using the same or like currencies and duration as the underlying exposures. Forward contracts are principally used to manage exposures arising from subsidiary trade and loan payables and receivables denominated in foreign currencies. These contracts are recorded at fair value with the gain or loss recognized in other—net, expense. We may enter into foreign currency forward contracts and currency swaps as fair value hedges of firm commitments. Forward contracts generally have maturities not exceeding <font class="_mt">12</font> months.</p>
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0.2in 0pt 0in; font-family: 'Times New Roman','serif'; text-align: left;" align="left"> </p>
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0.2in 0pt 0in; font-family: 'Times New Roman','serif'; text-align: left;" align="left">In the normal course of business, our operations are exposed to fluctuations in interest rates. These fluctuations can vary the costs of financing, investing, and operating. We address a portion of these risks through a controlled program of risk management that includes the use of derivative financial instruments. The objective of controlling these risks is to limit the impact of fluctuations in interest rates on earnings. Our primary interest rate risk exposure results from changes in short-term U.S. dollar interest rates. In an effort to manage interest rate exposures, we strive to achieve an acceptable balance between fixed and floating rate debt and investment positions and may enter into interest rate swaps or collars to help maintain that balance. Interest rate swaps or collars that convert our fixed-rate debt or investments to a floating rate are designated as fair value hedges of the underlying instruments. Interest rate swaps or collars that convert floating rate debt or investments to a fixed rate are designated as cash flow hedges. Interest expense on the debt is adjusted to include the payments made or received under the swap agreements.</p>
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0.2in 0pt 0in; font-family: 'Times New Roman','serif'; text-align: left;" align="left"> </p>
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0.2in 0pt 0in; font-family: 'Times New Roman','serif'; text-align: left;" align="left">We may enter into forward contracts and designate them as cash flow hedges to limit the potential volatility of earnings and cash flow associated with forecasted sales of available-for-sale securities. </p>
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0.2in 0pt 0in; font-family: 'Times New Roman','serif'; text-align: left;" align="left"> </p>
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 32pt 0pt 0in; font-family: 'Times New Roman','serif'; text-align: left;" align="left"><b>Goodwill and other intangibles:</b> Goodwill results from excess consideration in a business combination over the fair value of identifiable net assets acquired. Goodwill is not amortized.</p>
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 32pt 0pt 0in; font-family: 'Times New Roman','serif'; text-align: left;" align="left"> </p>
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 32pt 0pt 0in; font-family: 'Times New Roman','serif'; text-align: left;" align="left">Intangible assets with finite lives are capitalized and are amortized over their estimated useful lives, ranging from <font class="_mt">5</font> to <font class="_mt">20</font> years.</p>
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 32pt 0pt 0in; font-family: 'Times New Roman','serif'; text-align: left;" align="left"> </p>
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 32pt 0pt 0in; font-family: 'Times New Roman','serif'; text-align: left;" align="left">The cost of in-process research and development (IPR&D) projects acquired directly in a transaction other than a business combination are capitalized if they have an alternative future use; otherwise, they are expensed. Beginning in 2009, the fair values of IPR&D projects acquired in business combinations are capitalized as other intangible assets; previously, these fair values were expensed. There are several methods that can be used to determine the estimated fair value of the IPR&D acquired in a business combination. We utilized the "income method," which applies a probability weighting that considers the risk of development and commercialization, to the estimated future net cash flows that are derived from projected sales revenues and estimated costs. These projections are based on factors such as relevant market size, patent protection, historical pricing of similar products, and expected industry trends. The estimated future net cash flows are then discounted to the present value using an appropriate discount rate. This analysis is performed for each project independently. These assets are treated as indefinite-lived intangible assets until completion or abandonment of the projects, at which time the assets will be amortized over the remaining useful life or written off, as appropriate. We also capitalize milestone payments incurred at or after the product has obtained regulatory approval for marketing and amortize those amounts over the remaining estimated useful life of the underlying asset.</p>
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 32pt 0pt 0in; font-family: 'Times New Roman','serif'; text-align: left;" align="left"> </p>
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 32pt 0pt 0in; font-family: 'Times New Roman','serif'; text-align: left;" align="left">Goodwill and indefinite-lived intangible assets are reviewed for impairment at least annually and when certain impairment indicators are present. When required, a comparison of fair value to the carrying amount of assets is performed to determine the amount of any impairment. Finite-lived intangible assets are reviewed for impairment when an indicator of impairment is present. </p>
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 32pt 0pt 0in; font-family: 'Times New Roman','serif'; text-align: left;" align="left"> </p>
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0.2in 0pt 0in; font-family: 'Times New Roman','serif'; text-align: left;" align="left"><b>Property and equipment: </b>Property and equipment is stated on the basis of cost. Provisions for depreciation of buildings and equipment are computed generally by the straight-line method at rates based on their estimated useful lives ( <font class="_mt">12</font> to <font class="_mt">50</font> years for buildings and <font class="_mt">3</font> to <font class="_mt">18</font> years for equipment). We review the carrying value of long-lived assets for potential impairment on a periodic basis and whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable. Impairment is determined by comparing projected undiscounted cash flows to be generated by the asset to its carrying value. If an impairment is identified, a loss is recorded equal to the excess of the asset's net book value over its fair value, and the cost basis is adjusted.</p>
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0.2in 0pt 0in; font-family: 'Times New Roman','serif'; text-align: left;" align="left"> </p>
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0.2in 0pt 0in; font-family: 'Times New Roman','serif'; text-align: justify;">At December 31, property and equipment consisted of the following:</p>
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0.9pt 0pt 0in; font-family: 'Times New Roman','serif'; text-align: justify;"> </p>
<table class="MsoNormalTable" style="font-size: 11pt; font-family: 'Calibri','sans-serif'; border-collapse: collapse;" cellspacing="0" cellpadding="0" border="0">
<tr><td style="padding-right: 4pt; padding-left: 4pt; padding-bottom: 0in; width: 3.5in; padding-top: 0in;" valign="top" width="336">
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 1pt 0pt 0in; font-family: 'Times New Roman','serif'; text-align: justify;"> </p></td>
<td style="padding-right: 4pt; padding-left: 4pt; padding-bottom: 0in; width: 1.4in; padding-top: 0in; border-bottom: windowtext 1pt solid;" valign="top" width="134">
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; text-align: center;" align="center"><b>2010</b></p></td>
<td style="padding-right: 4pt; padding-left: 4pt; padding-bottom: 0in; width: 1.4in; padding-top: 0in; border-bottom: windowtext 1pt solid;" valign="top" width="134">
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; text-align: center;" align="center"><b>2009</b></p></td></tr>
<tr><td style="padding-right: 4pt; padding-left: 4pt; padding-bottom: 0in; width: 3.5in; padding-top: 0in;" valign="top" width="336">
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 1pt 0pt 0in; font-family: 'Times New Roman','serif'; text-align: justify;">Land </p></td>
<td style="padding-right: 4pt; padding-left: 4pt; padding-bottom: 0in; width: 1.4in; padding-top: 0in;" valign="top" width="134">
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; text-align: justify;"><b>$ 207.8</b></p></td>
<td style="padding-right: 4pt; padding-left: 4pt; padding-bottom: 0in; width: 1.4in; padding-top: 0in;" valign="top" width="134">
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; text-align: justify;">$ 216.8</p></td></tr>
<tr><td style="padding-right: 4pt; padding-left: 4pt; padding-bottom: 0in; width: 3.5in; padding-top: 0in;" valign="top" width="336">
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; text-align: justify;">Buildings </p></td>
<td style="padding-right: 4pt; padding-left: 4pt; padding-bottom: 0in; width: 1.4in; padding-top: 0in;" valign="top" width="134">
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; text-align: justify;"><b> 6,029.3</b></p></td>
<td style="padding-right: 4pt; padding-left: 4pt; padding-bottom: 0in; width: 1.4in; padding-top: 0in;" valign="top" width="134">
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; text-align: justify;"> 6,121.9</p></td></tr>
<tr><td style="padding-right: 4pt; padding-left: 4pt; padding-bottom: 0in; width: 3.5in; padding-top: 0in;" valign="top" width="336">
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 1pt 0pt 0in; font-family: 'Times New Roman','serif'; text-align: justify;">Equipment </p></td>
<td style="padding-right: 4pt; padding-left: 4pt; padding-bottom: 0in; width: 1.4in; padding-top: 0in;" valign="top" width="134">
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; text-align: justify;"><b> 7,355.7</b></p></td>
<td style="padding-right: 4pt; padding-left: 4pt; padding-bottom: 0in; width: 1.4in; padding-top: 0in;" valign="top" width="134">
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; text-align: justify;"> 7,813.0</p></td></tr>
<tr><td style="padding-right: 4pt; padding-left: 4pt; padding-bottom: 0in; width: 3.5in; padding-top: 0in;" valign="top" width="336">
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; text-align: justify;">Construction in progress </p></td>
<td style="padding-right: 4pt; padding-left: 4pt; padding-bottom: 0in; width: 1.4in; padding-top: 0in; border-bottom: windowtext 1pt solid;" valign="top" width="134">
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; text-align: justify;"><b> 893.8</b></p></td>
<td style="padding-right: 4pt; padding-left: 4pt; padding-bottom: 0in; width: 1.4in; padding-top: 0in; border-bottom: windowtext 1pt solid;" valign="top" width="134">
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; text-align: justify;"> 948.3</p></td></tr>
<tr><td style="padding-right: 4pt; padding-left: 4pt; padding-bottom: 0in; width: 3.5in; padding-top: 0in;" valign="top" width="336">
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; text-align: justify;"> </p></td>
<td style="padding-right: 4pt; padding-left: 4pt; padding-bottom: 0in; width: 1.4in; padding-top: 0in;" valign="top" width="134">
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; text-align: justify;"><b>14,486.6</b></p></td>
<td style="padding-right: 4pt; padding-left: 4pt; padding-bottom: 0in; width: 1.4in; padding-top: 0in;" valign="top" width="134">
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; text-align: justify;"> 15,100.0</p></td></tr>
<tr><td style="padding-right: 4pt; padding-left: 4pt; padding-bottom: 0in; width: 3.5in; padding-top: 0in;" valign="top" width="336">
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; text-align: justify;">Less accumulated depreciation </p></td>
<td style="padding-right: 4pt; padding-left: 4pt; padding-bottom: 0in; width: 1.4in; padding-top: 0in; border-bottom: windowtext 1pt solid;" valign="top" width="134">
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; text-align: justify;"><b>(6,545.9)</b></p></td>
<td style="padding-right: 4pt; padding-left: 4pt; padding-bottom: 0in; width: 1.4in; padding-top: 0in; border-bottom: windowtext 1pt solid;" valign="top" width="134">
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; text-align: justify;"> (6,902.6)</p></td></tr>
<tr><td style="padding-right: 4pt; padding-left: 4pt; padding-bottom: 0in; width: 3.5in; padding-top: 0in;" valign="top" width="336">
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; text-align: left;" align="left">Property and equipment, net</p></td>
<td style="padding-right: 4pt; padding-left: 4pt; padding-bottom: 0in; width: 1.4in; padding-top: 0in; border-bottom: windowtext 1.5pt solid;" valign="top" width="134">
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; text-align: justify;"><b>$7,940.7</b></p></td>
<td style="padding-right: 4pt; padding-left: 4pt; padding-bottom: 0in; width: 1.4in; padding-top: 0in; border-bottom: windowtext 1.5pt solid;" valign="top" width="134">
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; text-align: justify;">$8,197.4</p></td></tr></table>
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 32pt 0pt 0in; font-family: 'Times New Roman','serif'; text-align: justify;"> </p>
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0.2in 0pt 0in; font-family: 'Times New Roman','serif'; text-align: left;" align="left">Depreciation expense for 2010, 2009, and 2008 was $<font class="_mt">749.1</font> million, $<font class="_mt">813.5</font> million, and $<font class="_mt">731.7</font> million, respectively. Interest costs of $<font class="_mt">26.0</font> million, $<font class="_mt">30.2</font> million, and $<font class="_mt">48.2</font> million were capitalized as part of property and equipment in 2010, 2009, and 2008, respectively. Total rental expense for all leases, including contingent rentals (not material), amounted to $<font class="_mt">339.3</font> million, $<font class="_mt">337.8</font> million, and $<font class="_mt">327.4</font> million for 2010, 2009, and 2008, respectively. Assets under capital leases included in property and equipment in the consolidated balance sheets, capital lease obligations entered into, and future minimum rental commitments are not material.</p>
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0.2in 0pt 0in; font-family: 'Times New Roman','serif'; text-align: left;" align="left"> </p>
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; text-align: left;" align="left"><b>Litigation and environmental liabilities:</b> <font class="_mt" style="color: black;">Litigation accruals and environmental liabilities and the related estimated insurance recoverables are reflected on a gross basis as liabilities and assets, respectively, on our consolidated balance sheets. </font>With respect to the product liability claims currently asserted against us, we have accrued for our estimated exposures to the extent they are both probable and estimable based on the information available to us. We accrue for certain product liability claims incurred but not filed to the extent we can formulate a reasonable estimate of their costs. We estimate these expenses based primarily on historical claims experience and data regarding product usage. Legal defense costs expected to be incurred in connection with significant product liability loss contingencies are accrued when probable and reasonably estimable. A portion of the costs associated with defending and disposing of these suits is covered by insurance. We record receivables for insurance-related recoveries when it is probable they will be realized. These receivables are classified as a reduction of the litigation charges on the statement of operations. We estimate insurance recoverables based on existing deductibles, coverage limits, our assessment of any defenses to coverage that might be raised by the carriers, and the existing and projected future level of insolvencies among the insurance carriers. However, for substantially all of our currently marketed products, we are completely self-insured for future product liability losses. </p>
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; line-height: 12pt; font-family: 'Times New Roman','serif'; text-align: left;" align="left"><font class="_mt" style="color: black;"> </font> </p>
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0.2in 0pt 0in; font-family: 'Times New Roman','serif'; text-align: left;" align="left"><b>Revenue recognition:</b> We recognize revenue from sales of products at the time title of goods passes to the buyer and the buyer assumes the risks and rewards of ownership. For approximately <font class="_mt">85</font> percent of our sales, this is at the time products are shipped to the customer, typically a wholesale distributor or a major retail chain. The remaining sales are recorded at the point of delivery. Provisions for returns, discounts, and rebates are established in the same period the related sales are recorded. </p>
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0.2in 0pt 0in; font-family: 'Times New Roman','serif'; text-align: left;" align="left"> </p>
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0.2in 0pt 0in; font-family: 'Times New Roman','serif'; text-align: left;" align="left">We also generate income as a result of collaboration agreements. Revenue from co-promotion services is based upon net sales reported by our co-promotion partners and, if applicable, the number of sales calls we perform. Initial fees we receive from the partnering of our compounds under development are amortized through the expected product approval date. Initial fees received from out-licensing agreements that include both the sale of marketing rights to our commercialized products and a related commitment to supply the products are generally recognized in net product sales over the term of the supply agreement. We immediately recognize the full amount of developmental milestone payments due to us upon the achievement of the milestone event if the event is substantive, objectively determinable, and represents an important point in the development life cycle of the pharmaceutical product. Milestone payments earned by us are generally recorded in other—net, expense. If the payment to us is a commercialization payment that is part of a multiple-element collaborative commercialization arrangement and is a result of the initiation of the commercialization period (e.g., payments triggered by regulatory approval for marketing or launch of the product), we amortize the payment to income as we perform under the terms of the arrangement.</p>
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0.2in 0pt 0in; font-family: 'Times New Roman','serif'; text-align: left;" align="left"> </p>
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0.2in 0pt 0in; font-family: 'Times New Roman','serif'; text-align: left;" align="left">Royalty revenue from licensees, which are based on third-party sales of licensed products and technology, are recorded as earned in accordance with the contract terms when third-party sales can be reasonably measured and collection of the funds is reasonably assured. This royalty revenue is included in collaboration and other revenue.</p>
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0.2in 0pt 0in; font-family: 'Times New Roman','serif'; text-align: left;" align="left"> </p>
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0.2in 0pt 0in; font-family: 'Times New Roman','serif'; text-align: left;" align="left">Following is the composition of revenue:</p>
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0.2in 0pt 0in; font-family: 'Times New Roman','serif'; text-align: left;" align="left"> </p>
<table class="MsoNormalTable" style="font-size: 11pt; font-family: 'Calibri','sans-serif'; border-collapse: collapse;" cellspacing="0" cellpadding="0" width="675" border="0">
<tr><td style="padding-right: 3.95pt; padding-left: 3.95pt; padding-bottom: 0in; width: 290.4pt; padding-top: 0in;" valign="top" width="387">
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; text-align: justify;"> </p></td>
<td style="padding-right: 3.95pt; padding-left: 3.95pt; padding-bottom: 0in; width: 1in; padding-top: 0in; border-bottom: windowtext 1pt solid;" valign="top" width="96">
<p class="MsoNormal" style="font-size: 10pt; margin: 0in -6.25pt 0pt 0in; font-family: 'Times New Roman','serif'; text-align: center;" align="center"><b>2010</b></p></td>
<td style="padding-right: 3.95pt; padding-left: 3.95pt; padding-bottom: 0in; width: 1in; padding-top: 0in; border-bottom: windowtext 1pt solid;" valign="top" width="96">
<p class="MsoNormal" style="font-size: 10pt; margin: 0in -6.25pt 0pt 0in; font-family: 'Times New Roman','serif'; text-align: center;" align="center"><b>2009</b></p></td>
<td style="padding-right: 3.95pt; padding-left: 3.95pt; padding-bottom: 0in; width: 1in; padding-top: 0in; border-bottom: windowtext 1pt solid;" valign="top" width="96">
<p class="MsoNormal" style="font-size: 10pt; margin: 0in -6.25pt 0pt 0in; font-family: 'Times New Roman','serif'; text-align: center;" align="center"><b>2008</b></p></td></tr>
<tr><td style="padding-right: 3.95pt; padding-left: 3.95pt; padding-bottom: 0in; width: 290.4pt; padding-top: 0in;" valign="top" width="387">
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; text-align: justify;"> </p></td>
<td style="padding-right: 3.95pt; padding-left: 3.95pt; padding-bottom: 0in; width: 1in; padding-top: 0in;" valign="top" width="96">
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; text-align: justify;"> </p></td>
<td style="padding-right: 3.95pt; padding-left: 3.95pt; padding-bottom: 0in; width: 1in; padding-top: 0in;" valign="top" width="96">
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; text-align: justify;"> </p></td>
<td style="padding-right: 3.95pt; padding-left: 3.95pt; padding-bottom: 0in; width: 1in; padding-top: 0in;" valign="top" width="96">
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; text-align: justify;"> </p></td></tr>
<tr><td style="padding-right: 3.95pt; padding-left: 3.95pt; padding-bottom: 0in; width: 290.4pt; padding-top: 0in;" valign="top" width="387">
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; text-align: justify;">Net product sales </p></td>
<td style="padding-right: 3.95pt; padding-left: 3.95pt; padding-bottom: 0in; width: 1in; padding-top: 0in;" valign="top" width="96">
<p class="MsoNormal" style="font-size: 10pt; margin: 0in -6.25pt 0pt 0px; font-family: 'Times New Roman','serif'; text-align: justify;"><b>$22,442.2</b></p></td>
<td style="padding-right: 3.95pt; padding-left: 3.95pt; padding-bottom: 0in; width: 1in; padding-top: 0in;" valign="top" width="96">
<p class="MsoNormal" style="font-size: 10pt; margin: 0in -6.25pt 0pt 0px; font-family: 'Times New Roman','serif'; text-align: justify;">$21,171.5</p></td>
<td style="padding-right: 3.95pt; padding-left: 3.95pt; padding-bottom: 0in; width: 1in; padding-top: 0in;" valign="top" width="96">
<p class="MsoNormal" style="font-size: 10pt; margin: 0in -6.25pt 0pt 0px; font-family: 'Times New Roman','serif'; text-align: justify;">$19,925.8</p></td></tr>
<tr><td style="padding-right: 3.95pt; padding-left: 3.95pt; padding-bottom: 0in; width: 290.4pt; padding-top: 0in;" valign="top" width="387">
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; text-align: justify;">Collaboration and other revenue (Note 4) </p></td>
<td style="padding-right: 3.95pt; padding-left: 3.95pt; padding-bottom: 0in; width: 1in; padding-top: 0in; border-bottom: windowtext 1pt solid;" valign="top" width="96">
<p class="MsoNormal" style="font-size: 10pt; margin: 0in -6.25pt 0pt 0px; font-family: 'Times New Roman','serif'; text-align: justify;"><b>633.8</b></p></td>
<td style="padding-right: 3.95pt; padding-left: 3.95pt; padding-bottom: 0in; width: 1in; padding-top: 0in; border-bottom: windowtext 1pt solid;" valign="top" width="96">
<p class="MsoNormal" style="font-size: 10pt; margin: 0in -6.25pt 0pt 0px; font-family: 'Times New Roman','serif'; text-align: justify;">664.5</p></td>
<td style="padding-right: 3.95pt; padding-left: 3.95pt; padding-bottom: 0in; width: 1in; padding-top: 0in; border-bottom: windowtext 1pt solid;" valign="top" width="96">
<p class="MsoNormal" style="font-size: 10pt; margin: 0in -6.25pt 0pt 0px; font-family: 'Times New Roman','serif'; text-align: justify;">446.1</p></td></tr>
<tr><td style="padding-right: 3.95pt; padding-left: 3.95pt; padding-bottom: 0in; width: 290.4pt; padding-top: 0in;" valign="top" width="387">
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; text-align: justify;">Total revenue </p></td>
<td style="padding-right: 3.95pt; padding-left: 3.95pt; padding-bottom: 0in; width: 1in; padding-top: 0in; border-bottom: windowtext 1.5pt solid;" valign="top" width="96">
<p class="MsoNormal" style="font-size: 10pt; margin: 0in -6.25pt 0pt 0px; font-family: 'Times New Roman','serif'; text-align: justify;"><b>$23,076.0</b></p></td>
<td style="padding-right: 3.95pt; padding-left: 3.95pt; padding-bottom: 0in; width: 1in; padding-top: 0in; border-bottom: windowtext 1.5pt solid;" valign="top" width="96">
<p class="MsoNormal" style="font-size: 10pt; margin: 0in -6.25pt 0pt 0px; font-family: 'Times New Roman','serif'; text-align: justify;">$21,836.0</p></td>
<td style="padding-right: 3.95pt; padding-left: 3.95pt; padding-bottom: 0in; width: 1in; padding-top: 0in; border-bottom: windowtext 1.5pt solid;" valign="top" width="96">
<p class="MsoNormal" style="font-size: 10pt; margin: 0in -6.25pt 0pt 0px; font-family: 'Times New Roman','serif'; text-align: justify;">$20,371.9</p></td></tr></table>
<p class="MsoBodyText3" style="font-size: 10pt; margin: 0in 0in 0pt; text-transform: uppercase; font-family: 'Univers','sans-serif'; letter-spacing: -0.1pt; text-align: left; text-decoration: underline; text-underline: single;" align="left"><font class="_mt" style="text-transform: none; font-family: 'Times New Roman','serif'; letter-spacing: 0pt; text-decoration: none; text-underline: none;"> </font> </p>
<div>
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0.2in 0pt 0in; font-family: 'Times New Roman','serif'; text-align: left;" align="left"><strong>Research and development expenses and acquired research and development: </strong>Research and development expenses include the following:</p>
<p class="MsoListParagraphCxSpFirst" style="font-size: 10pt; margin: 0in 0.2in 0pt 0.5in; text-indent: -0.25in; font-family: 'Times New Roman','serif'; text-align: left;" align="left"><font class="_mt" style="font-family: Symbol;">·</font>Research and development costs, which are expensed as incurred.</p>
<p class="MsoListParagraphCxSpLast" style="font-size: 10pt; margin: 0in 0.2in 0pt 0.5in; text-indent: -0.25in; font-family: 'Times New Roman','serif'; text-align: left;" align="left"><font class="_mt" style="font-family: Symbol;">·</font>Milestone payments incurred prior to regulatory approval of the product, which are accrued when the event requiring payment of the milestone occurs.</p>
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0.2in 0pt 0in; font-family: 'Times New Roman','serif'; text-align: left;" align="left"> </p>
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0.2in 0pt 0in; font-family: 'Times New Roman','serif'; text-align: left;" align="left">Acquired IPR&D expense includes the following:</p>
<p class="MsoListParagraphCxSpFirst" style="font-size: 10pt; margin: 0in 0.2in 0pt 0.5in; text-indent: -0.25in; font-family: 'Times New Roman','serif'; text-align: left;" align="left"><font class="_mt" style="font-family: Symbol;">·</font>The initial costs of IPR&D projects acquired directly in asset acquisitions, unless they have an alternative future use. </p>
<p class="MsoListParagraphCxSpLast" style="font-size: 10pt; margin: 0in 0in 0pt 0.5in; text-indent: -0.25in; font-family: 'Times New Roman','serif'; text-align: left;" align="left"><font class="_mt" style="font-family: Symbol;">·</font>The fair values of IPR&D projects acquired in business combinations that closed prior to 2009. Beginning in 2009, the fair values of IPR&D projects acquired in business combinations are capitalized as other intangible assets.</p>
<p class="MsoListParagraphCxSpLast" style="font-size: 10pt; margin: 0in 0in 0pt 0.5in; text-indent: -0.25in; font-family: 'Times New Roman','serif'; text-align: left;" align="left"> </p></div>
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; text-align: left;" align="left"><b>Other</b><i><font class="_mt" style="color: black;">—</font></i><b>net, expense: </b>Other<i><font class="_mt" style="color: black;">—</font></i>net, expense consisted of the following:</p>
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; text-align: left;" align="left"> </p>
<table class="MsoNormalTable" style="font-size: 11pt; margin-left: 5.4pt; font-family: 'Calibri','sans-serif'; border-collapse: collapse;" cellspacing="0" cellpadding="0" width="570" border="0">
<tr style="height: 13.5pt;"><td style="padding-right: 5.4pt; padding-left: 5.4pt; padding-bottom: 0in; width: 265.5pt; padding-top: 0in; height: 13.5pt;" valign="top" width="354">
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; text-align: left;" align="left"> </p></td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt; padding-bottom: 0in; width: 0.75in; padding-top: 0in; border-bottom: windowtext 1pt solid; height: 13.5pt;" valign="top" width="72">
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; text-indent: 4.5pt; font-family: 'Times New Roman','serif'; text-align: left;" align="left"><b>2010</b></p></td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt; padding-bottom: 0in; width: 0.75in; padding-top: 0in; border-bottom: windowtext 1pt solid; height: 13.5pt;" valign="top" width="72">
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; text-indent: 4.5pt; font-family: 'Times New Roman','serif'; text-align: left;" align="left"><b>2009</b></p></td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt; padding-bottom: 0in; width: 0.75in; padding-top: 0in; border-bottom: windowtext 1pt solid; height: 13.5pt;" valign="top" width="72">
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; text-indent: 4.5pt; font-family: 'Times New Roman','serif'; text-align: left;" align="left"><b>2008</b></p></td></tr>
<tr><td style="padding-right: 5.4pt; padding-left: 5.4pt; padding-bottom: 0in; width: 265.5pt; padding-top: 0in;" valign="top" width="354">
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; text-align: left;" align="left"> </p></td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt; padding-bottom: 0in; width: 2.25in; padding-top: 0in;" valign="top" width="216" colspan="3">
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; text-align: left;" align="left"> </p></td></tr>
<tr><td style="padding-right: 5.4pt; padding-left: 5.4pt; padding-bottom: 0in; width: 265.5pt; padding-top: 0in;" valign="top" width="354">
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; text-align: left;" align="left">Interest expense </p></td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt; padding-bottom: 0in; width: 0.75in; padding-top: 0in;" valign="top" width="72">
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; text-align: left;" align="left"><b>$185.5</b></p></td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt; padding-bottom: 0in; width: 0.75in; padding-top: 0in;" valign="top" width="72">
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; text-align: left;" align="left">$261.3</p></td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt; padding-bottom: 0in; width: 0.75in; padding-top: 0in;" valign="top" width="72">
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; text-align: left;" align="left">$228.3</p></td></tr>
<tr><td style="padding-right: 5.4pt; padding-left: 5.4pt; padding-bottom: 0in; width: 265.5pt; padding-top: 0in;" valign="top" width="354">
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; text-align: left;" align="left">Interest income </p></td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt; padding-bottom: 0in; width: 0.75in; padding-top: 0in;" valign="top" width="72">
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; text-align: left;" align="left"><b>(51.9)</b></p></td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt; padding-bottom: 0in; width: 0.75in; padding-top: 0in;" valign="top" width="72">
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; text-align: left;" align="left">(75.2)</p></td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt; padding-bottom: 0in; width: 0.75in; padding-top: 0in;" valign="top" width="72">
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; text-align: left;" align="left">(210.7)</p></td></tr>
<tr><td style="padding-right: 5.4pt; padding-left: 5.4pt; padding-bottom: 0in; width: 265.5pt; padding-top: 0in;" valign="top" width="354">
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; text-align: left;" align="left">Other (income) expense </p></td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt; padding-bottom: 0in; width: 0.75in; padding-top: 0in;" valign="top" width="72">
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; text-align: left;" align="left"><b>(128.6)</b></p></td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt; padding-bottom: 0in; width: 0.75in; padding-top: 0in;" valign="top" width="72">
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; text-align: left;" align="left">43.4</p></td>
<td style="padding-right: 5.4pt; padding-left: 5.4pt; padding-bottom: 0in; width: 0.75in; padding-top: 0in;" valign="top" width="72">
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; text-align: left;" align="left">8.5</p></td></tr>
<tr><td style="padding-right: 5.4pt; padding-left: 5.4pt; padding-bottom: 0in; width: 265.5pt; padding-top: 0in;" valign="top" width="354">
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; text-align: left;" align="left">Other<i><font class="_mt" style="color: black;">—</font></i>net, expense</p></td>
<td style="padding-right: 5.4pt; border-top: windowtext 1pt solid; padding-left: 5.4pt; padding-bottom: 0in; width: 0.75in; padding-top: 0in; border-bottom: windowtext 1.5pt solid;" valign="top" width="72">
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; text-align: left;" align="left"><b>$ 5.0</b></p></td>
<td style="padding-right: 5.4pt; border-top: windowtext 1pt solid; padding-left: 5.4pt; padding-bottom: 0in; width: 0.75in; padding-top: 0in; border-bottom: windowtext 1.5pt solid;" valign="top" width="72">
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; text-align: left;" align="left">$229.5</p></td>
<td style="padding-right: 5.4pt; border-top: windowtext 1pt solid; padding-left: 5.4pt; padding-bottom: 0in; width: 0.75in; padding-top: 0in; border-bottom: windowtext 1.5pt solid;" valign="top" width="72">
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; text-align: left;" align="left">$ 26.1</p></td></tr></table>
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; text-align: left;" align="left"> </p>
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; text-align: left;" align="left">Other income during 2010 is primarily related to net gains on equity investments, damages recovered from generic pharmaceutical companies following Zyprexa patent litigation in Germany, and an insurance recovery associated with the theft of product at our Enfield, Connecticut distribution center.</p>
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0in 0pt; font-family: 'Times New Roman','serif'; text-align: left;" align="left"> </p>
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0.2in 0pt 0in; font-family: 'Times New Roman','serif'; text-align: left;" align="left"><b>Income taxes:</b> Deferred taxes are recognized for the future tax effects of temporary differences between financial and income tax reporting based on enacted tax laws and rates. Federal income taxes are provided on the portion of the income of foreign subsidiaries that is expected to be remitted to the United States and be taxable. </p>
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0.2in 0pt 0in; font-family: 'Times New Roman','serif'; text-align: left;" align="left"> </p>
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0.2in 0pt 0in; font-family: 'Times New Roman','serif'; text-align: left;" align="left">We recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than <font class="_mt">50</font> percent likelihood of being realized upon ultimate resolution. </p>
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0.2in 0pt 0in; font-family: 'Times New Roman','serif'; text-align: left;" align="left"> </p>
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0.9pt 0pt 0in; font-family: 'Times New Roman','serif'; text-align: left;" align="left"><b>Earnings per share: </b> We calculate basic earnings per share based on the weighted-average number of outstanding common shares and incremental shares. We calculate diluted earnings per share based on the weighted-average number of outstanding common shares plus the effect of dilutive stock options and other incremental shares. See Note 12 for further discussion.</p>
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0.9pt 0pt 0in; font-family: 'Times New Roman','serif'; text-align: left;" align="left"> </p>
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0.9pt 0pt 0in; font-family: 'Times New Roman','serif'; text-align: left;" align="left"><b>Stock-based compensation:</b> <font class="_mt" style="color: black;">We recognize the fair value of stock-based compensation as expense over the requisite service period of the individual grantees, which generally equals the vesting period. Under our policy all stock-based awards are approved prior to the date of grant. The Compensation Committee of the Board of Directors approves the value of the award and date of grant. Stock-based compensation that is awarded as part of our annual equity grant is made on a specific grant date scheduled in advance.</font></p>
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0.9pt 0pt 0in; font-family: 'Times New Roman','serif'; text-align: left;" align="left"><font class="_mt" style="color: black;"> </font> </p>
<p class="MsoNormal" style="font-size: 10pt; margin: 0in 0.9pt 0pt 0in; font-family: 'Times New Roman','serif'; text-align: left;" align="left"><b>Reclassifications: </b> Certain reclassifications have been made to the December 31, 2009 and 2008 consolidated financial statements and accompanying notes to conform with the December 31, 2010 presentation.<font class="_mt" style="color: black;"> </font></p></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div> </div>Note 1: Summary of Significant Accounting Policies
Basis of presentation: The accompanying consolidated financial statements have beenfalsefalsefalsefalsefalseOtherus-types:textBlockItemTypestringThis element may be used to describe all significant accounting policies of the reporting entity.Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Accounting Principles Board Opinion (APB)
-Number 22
-Paragraph 8
falsefalse12Summary of Significant Accounting PoliciesUnKnownUnKnownUnKnownUnKnownfalsetrue
