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Document and Entity Information (USD $)
12 Months Ended
Dec. 31, 2011
Feb. 15, 2012
Jun. 30, 2011
Document & Entity Information [Abstract]
Document Type 10-K
Amendment Flag false
Document Period End Date Dec 31, 2011
Document Fiscal Year Focus 2011
Document Fiscal Period Focus Q4
Entity Registrant Name Lilly Eli & Co
Entity Central Index Key 0000059478
Current Fiscal Year End Date --12-31
Entity Well-known Seasoned Issuer Yes
Entity Voluntary Filers No
Entity Current Reporting Status Yes
Entity Filer Category Large Accelerated Filer
Entity Public Float $ 38,414,000,000
Entity Common Stock, Shares Outstanding 1,160,406,840
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Consolidated Statements of Operations (USD $)
In Millions, except Per Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Consolidated Statements of Operations [Abstract]
Revenue $ 24,286.5 $ 23,076 $ 21,836
Cost of sales 5,067.9 4,366.2 4,247
Research and development 5,020.8 4,884.2 4,326.5
Marketing, selling, and administrative 7,879.9 7,053.4 6,892.5
Acquired in-process research and development 388 50 90
Asset impairments, restructuring, and other special charges 401.4 192 692.7
Other - net, expense (179) (5) (229.5)
Cost of sales, operating expenses, and other-net 18,937 16,550.8 16,478.2
Income before income taxes 5,349.5 6,525.2 5,357.8
Income taxes 1,001.8 1,455.7 1,029
Net income $ 4,347.7 $ 5,069.5 $ 4,328.8
Earnings per share - basic and diluted $ 3.9 $ 4.58 $ 3.94
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Consolidated Balance Sheets (USD $)
In Millions, unless otherwise specified
Dec. 31, 2011
Dec. 31, 2010
Current Assets
Cash and cash equivalents $ 5,922.5 $ 5,993.2
Short-term investments 974.6 733.8
Accounts receivable, net of allowances of $110.1 (2011) and $79.9 (2010) 3,597.7 3,493.8
Other receivables 640.2 664.3
Inventories 2,299.8 2,517.7
Prepaid taxes 158.5 828.3
Prepaid expenses and other 654.9 608.9
Total current assets 14,248.2 14,840
Other Assets
Investments 4,029.8 1,779.5
Goodwill and other intangibles - net 5,128.1 4,818.8
Sundry 2,493.4 1,622.4
Total other assets 11,651.3 8,220.7
Property and equipment, net 7,760.3 7,940.7
Goodwill 1,434.7 1,423.9
Total assets 33,659.8 31,001.4
Current Liabilities
Short-term borrowings 1,522.3 156
Accounts payable 1,125.2 1,072.2
Employee compensation 804.7 851.8
Sales rebates and discounts 1,771.3 1,372.6
Dividends payable 542.3 540
Income taxes payable 261.6 457.5
Other current liabilities 2,903.5 2,476.8
Total current liabilities 8,930.9 6,926.9
Other Liabilities
Long-term debt 5,464.7 6,770.5
Accrued retirement benefit 3,068.5 1,887.4
Long-term income taxes payable 1,086.3 1,234.8
Other noncurrent liabilities 1,573.8 1,769
Total other liabilities 11,193.3 11,661.7
Shareholders' Equity
Common stock 724.1 721.3
Additional paid-in capital 4,886.8 4,798.5
Retained earnings 14,897.8 12,732.6
Employee benefit trust 3,013.1 3,013.2
Deferred costs-ESOP 0 (52.4)
Accumulated other comprehensive loss (3,858.6) (2,670.1)
Noncontrolling interests (6.1) (7.5)
Cost of common stock in treasury, 853 shares (2011) and 864 shares (2010) (95.3) (96.4)
Total shareholders' equity 13,535.6 12,412.8
Total liabilities and shareholders' equity $ 33,659.8 $ 31,001.4
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Consolidated Balance Sheets (Parenthetical) (USD $)
In Millions, except Share data, unless otherwise specified
Dec. 31, 2011
Dec. 31, 2010
Consolidated Balance Sheets (Parenthetical)
Accounts receivable, allowances $ 110.1 $ 79.9
Authorized shares, shares in thousands 3,200,000,000
Issued shares, shares in thousands 1,158,644,000 1,154,018,000
Common stock shares in treasury, shares in thousands 853,000 864,000
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Consolidated Statements of Cash Flows (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Cash Flows from Operating Activities
Net income $ 4,347.7 $ 5,069.5 $ 4,328.8
Adjustments to Reconcile Net Income to Cash Flows from Operating Activities:
Depreciation and amortization 1,373.6 1,328.2 1,297.8
Changes in deferred income taxes (268.5) 559.7 189.9
Stock-based compensation expense 147.4 231 368.5
Impairment charges, indefinite lived intangibles 151.5 0 0
Acquired in-process research and development, net of tax 252.2 32.5 58.5
Net marketing investigation charges accrued paid 0 (112.3) (1,313.6)
Other operating activities, net (17.8) (66.3) 362.5
Changes in operating assets and liabilities, net of acquisitions
Receivables - (increase) decrease (188.8) (319.1) (492.9)
Inventories - (increase) decrease 203.1 157 (179)
Other Assets - (increase) decrease 642.7 340.5 (84.9)
Accounts payable and other liabilities - increase (decrease) 591.4 (363.9) (200.1)
Net Cash Provided by Operating Activities 7,234.5 6,856.8 4,335.5
Cash Flows from Investing Activities
Purchases of property and equipment (672) (694.3) (765)
Disposals of property and equipment 25.3 24.6 17.7
Net change in short-term investments (250.9) (686.5) 399.1
Proceeds from sales and maturities of noncurrent investments 2,138.5 584.7 1,107.8
Purchases of noncurrent investments (4,459.4) (1,067.2) (432.3)
Purchase of product rights (632.9) (442.4) 0
Purchase of in-process research and development (388) (50) (90)
Cash paid for acquisition, net of cash acquired (307.8) (609.4) 0
Loan to collaboration partner (165) 0 0
Other investing activities, net (112.2) (219.3) (94.5)
Net Cash Used for Investing Activities (4,824.4) (3,159.8) 142.8
Cash Flows from Financing Activities
Dividends paid (2,180.1) (2,165.3) (2,152.1)
Net change in short-term borrowings (141.2) 123.9 (5,824.2)
Proceeds from issuance of long-term debt 0 1.2 2,400
Repayment of long-term debt (54.6) (1.1) 0
Other financing activities, net 6 19.4 42.6
Net Cash Used in Financing Activities (2,369.9) (2,021.9) (5,533.7)
Effect of exchange rate on cash and cash equivalents (110.9) (144.8) 21.6
Net Increase in Cash and Cash Equivalents (70.7) 1,530.3 (1,033.8)
Cash and cash equivalents at January 1 5,993.2 4,462.9 5,496.7
Cash and Cash Equivalents at September 30 $ 5,922.5 $ 5,993.2 $ 4,462.9
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Consolidated Statements of Comprehensive Income (Loss) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Consolidated Statements of Comprehensive Income [Abstract]
Net income $ 4,347.7 $ 5,069.5 $ 4,328.8
Other comprehensive income (loss)
Foreign currency translation gains (losses) before tax (244.8) (325.1) 284.9
Net unrealized gains (losses) on securities (178.5) 80.8 289.8
Defined benefit pension and retiree health benefit plans (1,240.2) 148.9 (280.3)
Effective portion of cash flow hedges 44.8 (26.6) 48.2
Other comprehensive income (loss) before income taxes (1,618.7) (122) 342.6
Provision for income taxes related to other comprehensive income (loss) items 430.2 (76.2) (27.7)
Other comprehensive income (loss), net of tax (1,188.5) (198.2) 314.9
Comprehensive income $ 3,159.2 $ 4,871.3 $ 4,643.7
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Summary of Significant Accounting Policies
12 Months Ended
Dec. 31, 2011
Summary of Significant Accounting Policies [Abstract]
Basis of Presentation [Text Block]

Notes to Consolidated Financial Statements

ELI LILLY AND COMPANY AND SUBSIDIARIES

(Dollars in millions, except per-share data)

 

Note 1: Summary of Significant Accounting Policies

Basis of presentation: 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.

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.

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.

 

Inventories at December 31 consisted of the following:

 

 

2011

2010

Finished products

$    786.4

$   800.8

Work in process

   1,518.2

  1,714.2

Raw materials and supplies

      205.8

     220.8

 

   2,510.4

  2,735.8

Reduction to LIFO cost

    (210.6)

    (218.1)

Inventories

$2,299.8

$2,517.7

 

 

 

At December 31, property and equipment consisted of the following:

 

 

2011

2010

Land

$   202.5

$    207.8

Buildings

   6,135.7

6,029.3

Equipment

   7,219.9

7,355.7

Construction in progress

   1,036.0

893.8

 

14,594.1

14,486.6

Less accumulated depreciation

(6,833.8)

(6,545.9)

Property and equipment, net

$7,760.3

$7,940.7

 

Depreciation expense for the years ended December 31, 2011, 2010, and 2009 was $732.4 million, $749.1 million, and $813.5 million, respectively. Interest costs of $25.7 million, $26.0 million, and $30.2 million were capitalized as part of property and equipment for the years ended December 31, 2011, 2010, and 2009, respectively. Total rental expense for all leases, including contingent rentals (not material), amounted to $353.4 million, $339.3 million, and $337.8 million for the years ended December 31, 2011, 2010, and 2009, 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.

 

 

Following is the composition of revenue:

 

2011

2010

2009

 

 

 

 

Net product sales

$23,604.8

$22,442.2

$21,171.5

Collaboration and other revenue (Note 4)

       681.7

       633.8

       664.5

Total revenue

$24,286.5

$23,076.0

$21,836.0

 

 
 

 

 

Reclassifications: Certain reclassifications have been made to the December 31, 2010 and 2009 consolidated financial statements and accompanying notes to conform with the December 31, 2011 presentation.

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Implementation of New Financial Accounting Pronouncements
12 Months Ended
Dec. 31, 2011
Implementation of New Financial Accounting Pronouncements[Abstract]
Accounting Changes and Error Corrections [Text Block]

Note 2: Implementation of New Financial Accounting Pronouncements

 

In 2010, the Financial Accounting Standards Board (FASB) issued an Accounting Standard Update (ASU) that applies to the annual fee imposed on pharmaceutical manufacturers and importers that sell branded prescription drugs to specified government programs as part of U.S. health care reform. This fee is allocated to companies based on their prior-calendar-year market share for branded prescription drug sales into these government programs. This guidance clarifies how pharmaceutical manufacturers should recognize and classify in their income statements fees mandated by U.S. health care reform. This fee is recorded as selling, general, and administrative expense in our consolidated results of operations and is amortized on a straight-line basis for the year. This guidance was effective for us January 1, 2011. In accordance with this guidance, for the year ended December 31, 2011 we recorded $178.0 million related to this fee, which is not deductible for tax purposes.

 

In 2009, the FASB issued an ASU related to Revenue Recognition that amends the previous guidance on arrangements with multiple deliverables. This guidance provides principles and application guidance on whether multiple deliverables exist, how the arrangements should be separated, and how the consideration should be allocated. It also clarifies the method to allocate revenue in an arrangement using the estimated selling price. This guidance was effective for us January 1, 2011, and did not have a material impact on our consolidated financial position or results of operations.

 

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Acquisitions
12 Months Ended
Dec. 31, 2011
Acquisitions [Abstract]
Acquisitions [Text Block]

Note 3: Acquisitions

During 2011 and 2010, we completed the acquisitions of the animal health business of Janssen Pharmaceuticia NV (Janssen), Avid Radiopharmaceuticals, Inc. (Avid), Alnara Pharmaceuticals, Inc. (Alnara), and a group of animal health product lines. These acquisitions were accounted for as business combinations under the acquisition method of accounting. The assets acquired and liabilities assumed were recorded at their respective fair values as of the acquisition date in our consolidated financial statements. The determination of estimated fair value required management to make significant estimates and assumptions. The excess of the purchase price over the fair value of the acquired net assets, where applicable, has been recorded as goodwill. The results of operations of these acquisitions are included in our consolidated financial statements from the date of acquisition. None of these acquisitions were material to our consolidated financial statements.

Most of these acquisitions included IPR&D, which represented compounds, new indications, or line extensions under development that had not yet achieved regulatory approval for marketing. As discussed in Note 1, the fair values of IPR&D assets acquired as part of the acquisition of a business are capitalized as intangible assets. Accordingly, we capitalized IPR&D assets acquired in business combinations totaling $30.9 million and $598.0 million for the years ended December 31, 2011 and 2010, respectively. Once the Avid and Alnara products are launched, the amortization of the respective acquired IPR&D assets will not be deductible for tax purposes. The ongoing expenses with respect to each of these assets in development are not material to our total research and development expense currently and are not expected to be material to our total research and development expense on an annual basis in the future.

Some of these acquisitions included contingent consideration, which is recorded at fair value in other liabilities as of the acquisition date. The fair value of the contingent consideration was determined by utilizing a probability weighted estimated cash flow stream discounted for the expected timing of each payment. Subsequent to the acquisition date, on a quarterly basis we remeasure the contingent consideration at current fair value with changes recorded in other—net, expense in the statement of operations.

In addition to the acquisitions of businesses, we also acquired several assets in development which are discussed below in Product Acquisitions and in Note 4. The acquired IPR&D related to these products of $388.0 million, $50.0 million, and $90.0 million for the years ended December 31, 2011, 2010, and 2009, respectively, was written off by a charge to income immediately upon acquisition because the products had no alternative future use.

 

Acquisition of Businesses

 

Janssen

On July 7, 2011, we acquired the animal health business of Janssen, a Johnson & Johnson company, for total purchase consideration of $307.8 million in cash. We obtained a portfolio of more than 50 marketed animal health products. In connection with this acquisition, we preliminarily recorded $223.5 million of marketed product assets and $30.9 million of acquired IPR&D assets, with $53.4 million of other net assets. Although the final determination may result in asset and liability fair values that are different than the preliminary estimates of these amounts, it is not expected that those differences will be material to our financial results.

Avid

On December 20, 2010, we acquired all of the outstanding stock of Avid, a company focusing on developing molecular radiopharmaceutical tracers in positron emission topography (PET) scan imaging, for total purchase consideration of $346.1 million, which included an upfront payment of $286.3 million and up to $550 million in additional payments contingent upon potential future regulatory and commercial milestones. The fair value of the contingent consideration at the acquisition date was $59.8 million. In connection with this acquisition, we recorded $334.0 million of acquired IPR&D assets, $119.6 million of goodwill, and $116.9 million of deferred tax liability, with $9.4 million of other net assets. Avid's lead product under development, florbetapir, is a PET agent indicated for imaging amyloid plaque pathology in the brain to aid the evaluation of patients with signs or symptoms of cognitive impairment. The New Drug Application (NDA) was submitted to the U.S. Food and Drug Administration (FDA) in the third quarter of 2010. In March 2011, we received a complete response letter that was primarily focused on the need to establish a reader training program for market implementation that helps to ensure reader accuracy and consistency of interpretations of existing Amyvid™ scans. During the year ended December 31, 2011 we recorded impairment charges related to the partial impairment of the IPR&D asset related to Amyvid, as discussed further in Note 7. We submitted our response to the complete response letter in 2011.

 

Alnara

On July 20, 2010, we acquired all of the outstanding stock of Alnara, a privately-held company developing protein therapeutics for the treatment of metabolic diseases, for total purchase consideration of $291.7 million, which included an upfront payment of $188.7 million and up to $200 million in additional payments contingent upon potential future regulatory and commercial milestones. The fair value of the contingent consideration at the acquisition date was $103.0 million. In connection with this acquisition, we recorded $264.0 million of acquired IPR&D assets, $100.5 million of goodwill, and $92.4 million of deferred tax liability, with $19.6 million of other net assets. Alnara's lead product in development is liprotamase, a non-porcine pancreatic enzyme replacement therapy. The NDA was submitted to the FDA in the first quarter of 2010. In April 2011, we received a complete response letter that communicated the need for us to conduct an additional clinical trial prior to a re-submission. During the year ended December 31, 2011 we recorded impairment charges related to the partial impairment of the IPR&D asset related to liprotamase, as discussed further in Note 7. We are currently finalizing the study design and anticipate starting a clinical study in 2012.

 

 

Animal Health Product Lines

On May 28, 2010, we acquired the European marketing rights to several animal health product lines divested by Pfizer Inc. as part of its acquisition of Wyeth, Inc., for total purchase consideration of $148.4 million paid in cash. These products, including vaccines, parasiticides, and feed additives, serve both the production animal and companion animal markets. We also acquired a manufacturing facility in Sligo, Ireland, currently used in the production of animal vaccines. In connection with this acquisition, we recorded $76.2 million of marketed product intangible assets, with $72.2 million of other net assets.

 

Product Acquisitions

In March 2010, we entered into a license agreement with Acrux Limited to acquire the exclusive rights to commercialize its proprietary testosterone solution Axiron. At the time of the licensing, the product had not been approved and had no alternative future use. The charge of $50.0 million for acquired IPR&D related to this arrangement was included as expense in the first quarter of 2010 and is deductible for tax purposes. In the fourth quarter of 2010, Axiron was approved by the FDA for the treatment of testosterone deficiency in men. In the first quarter of 2011, the product was available in pharmacies in the U.S.

In December 2009, we entered into a licensing and collaboration agreement with Incyte Corporation (Incyte) to acquire rights to its compound, and certain follow-on compounds, for the treatment of inflammatory and autoimmune diseases. The lead compound was in the development stage (Phase II clinical trials for rheumatoid arthritis) and had no alternative future use. The charge of $90.0 million for acquired IPR&D related to this arrangement was included in expense in the fourth quarter of 2009 and is deductible for tax purposes. As part of this agreement, Incyte has the option to co-develop these compounds and the option to co-promote in the U.S.

In connection with these arrangements, our partners are generally entitled to future milestones and royalties based on sales should these products be approved for commercialization.

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Collaborations
12 Months Ended
Dec. 31, 2011
Collaborations
Collaborations [Text Block]

Note 4: Collaborations

We often enter into collaborative arrangements to develop and commercialize drug candidates. Collaborative activities may include research and development, marketing and selling (including promotional activities and physician detailing), manufacturing, and distribution. These collaborations often require milestone and royalty or profit share payments, contingent upon the occurrence of certain future events linked to the success of the asset in development, as well as expense reimbursements or payments to the third party. Revenues related to products sold by us pursuant to these arrangements are included in net product sales, while other sources of revenue (e.g., royalties and profit share payments) are included in collaboration and other revenue. Operating expenses for costs incurred pursuant to these arrangements are reported in their respective expense line item, net of any payments made to or reimbursements received from our collaboration partners. Each collaboration is unique in nature, and our more significant arrangements are discussed below. 

 

Erbitux

We have several collaborations with respect to Erbitux. The most significant collaborations are in the U.S., Japan, and Canada (Bristol-Myers Squibb Company); and worldwide except the U.S. and Canada (Merck KGaA). The agreements are expected to expire in 2018, upon which all of the rights with respect to Erbitux in the U.S. and Canada return to us and certain rights with respect to Erbitux outside the U.S. and Canada (excluding Japan) remain with Merck KGaA (Merck). The following table summarizes the revenue recognized with respect to Erbitux:

 

 

 

 

 

 

 

 

 

2011 

2010 

 2009 

 

 

 

Net product sales  

   $ 87.6

$71.9

 $92.5 

 

Collaboration and other revenue  

    321.6

  314.2

  298.3

 

Total revenue  

$409.2 

$386.1

 $390.8

 

  

Bristol-Myers Squibb Company

 Pursuant to a commercial agreement with Bristol-Myers Squibb Company and E.R. Squibb (collectively, BMS), relating to Erbitux, we are co-developing Erbitux in the U.S. and Canada with BMS, exclusively, and in Japan with BMS and Merck. The companies have jointly agreed to expand the investment in the ongoing clinical development plan for Erbitux to further explore its use in additional tumor types. Under this arrangement, Erbitux research and development and other costs are shared by both companies according to a predetermined ratio.

Responsibilities associated with clinical and other ongoing studies are apportioned between the parties under the agreement. Collaborative reimbursements received by us for supply of clinical trial materials; for research and development; and for a portion of marketing, selling, and administrative expenses are recorded as a reduction to the respective expense line items on the consolidated statement of operations. We receive a distribution fee in the form of a royalty from BMS, based on a percentage of net sales in the U.S. and Canada, which is recorded in collaboration and other revenue. Royalty expense paid to third parties, net of any reimbursements received, is recorded as a reduction of collaboration and other revenue.

We are responsible for the manufacture and supply of all requirements of Erbitux in bulk-form active pharmaceutical ingredient (API) for clinical and commercial use in the territory, and BMS will purchase all of its requirements of API for commercial use from us, subject to certain stipulations per the agreement. Sales of Erbitux to BMS for commercial use are reported in net product sales.

 

Merck KGaA

A development and license agreement with Merck with respect to Erbitux granted Merck exclusive rights to market Erbitux outside of the U.S. and Canada, and co-exclusive rights with BMS and us in Japan. Merck also has rights to manufacture Erbitux for supply in its territory. We also receive a royalty on the sales of Erbitux outside of the U.S. and Canada, which is included in collaboration and other revenue as earned. Collaborative reimbursements received for research and for development; and marketing, selling, and administrative expenses are recorded as a reduction to the respective expense line items on the consolidated statement of operations. Royalty expense paid to third parties, net of any royalty reimbursements received, is recorded as a reduction of collaboration and other revenue.

 

Necitumumab

The commercial agreement with BMS described above includes the co-development and co-commercialization of necitumumab, which is currently in Phase III clinical testing for squamous non-small cell lung cancer. We and BMS share the cost of developing and potentially commercializing necitumumab in the U.S., Canada, and Japan. We maintain exclusive rights to necitumumab in all other markets. We will fund 45 percent of the development costs for studies that will be used only in the U.S., and 72.5 percent for global studies. We will be responsible for the manufacturing of API, and BMS will be responsible for manufacturing the finished product. We could receive a payment of $250.0 million upon approval in the U.S. In the U.S. and Canada, BMS will record sales and we will receive 45 percent of the profits for necitumumab, while we will provide 50 percent of the selling effort. In Japan, we and BMS will share costs and profits evenly.

 
Exenatide 

In November 2011, we agreed with Amylin Pharmaceuticals, Inc. (Amylin) to terminate our collaborative arrangement for the joint development, marketing, and selling of Byetta (exenatide injection) and other forms of exenatide such as Bydureon (exenatide extended-release for injectable suspension). Under the terms of the termination agreement, Amylin made a one-time, upfront payment to us of $250.0 million. Amylin also agreed to make future revenue-sharing payments to us in an amount equal to 15 percent of their global net sales of exenatide products until Amylin has made aggregate payments to us of $1.20 billion plus interest, which will accrue at 9.5 percent. Amylin issued a secured note in the amount of $1.20 billion to us under which any revenue-sharing payments made to us will reduce amounts outstanding under the note. In general, Amylin's obligation for the revenue-sharing payments and the secured note will terminate if all exenatide products are withdrawn from the market due to safety or efficacy issues and are not sold for a period of four years. Amylin will also pay a $150.0 million milestone to us contingent upon FDA approval of a once-monthly suspension version of exenatide that is currently in Phase II clinical trials.

 

Commercial operations were transferred to Amylin in the U.S. at the end of November 2011, although we will continue to provide certain transition services. Outside the U.S., we will transfer responsibility for commercialization of exenatide to Amylin on a market-by-market basis over a period beginning no earlier than the second half of 2012 and that will not extend beyond December 31, 2013.

 

Payments received from Amylin are allocated 65 percent to the U.S., which is treated as a contract termination, and 35 percent to the business outside the U.S., which will be treated as the disposition of a business. The allocation is based upon relative fair values. Revenue-sharing payments will be recognized as income as Amylin records sales. The income allocated to the U.S. is recognized as collaboration and other revenue and the income allocated to the business outside the U.S. will be recognized as proceeds from the disposition of a business in other–net, expense in our consolidated income statement beginning at the time control of the business transfers to Amylin. The amounts we may receive pursuant to the revenue-sharing arrangement represent contingent consideration and, therefore, do not qualify for recognition as income until the contingency is resolved and the amount becomes fixed or determinable. As a consequence, the note has not been recognized in our consolidated balance sheet. The income recognized from this transaction was not material for the year ended December 31, 2011, as the income recognized from the upfront payment was substantially offset by the derecognition of amounts previously capitalized related to certain supply arrangements and approval milestones.

 

Prior to termination of the collaboration, we and Amylin were co-promoting Byetta in the U.S. Amylin was responsible for manufacturing and primarily utilized third-party contract manufacturers to supply Byetta. We supplied Byetta pen delivery devices for Amylin and will continue to do so for a period that will not extend beyond December 31, 2013, unless we and Amylin agree otherwise. We are responsible for certain development costs related to certain clinical trials outside the U.S. that we were conducting as of the date of the termination agreement as well as commercialization costs outside the U.S. until the commercial operations are transferred to Amylin.

 

Under the terms of our prior arrangement, we reported as collaboration and other revenue our 50 percent share of gross margin on Amylin's net product sales in the U.S. We reported as net product sales 100 percent of sales outside the U.S. and our sales of Byetta pen delivery devices to Amylin. We paid Amylin a percentage of the gross margin of exenatide sales outside of the U.S., and these costs were recorded in cost of sales. This arrangement for the commercial operations outside the U.S. will continue until those operations transfer to Amylin. Prior to its termination, under the 50/50 profit-sharing arrangement for the U.S., in addition to recording as revenue our 50 percent share of exenatide's gross margin, we also recorded approximately 50 percent of U.S. related research and development costs and marketing and selling costs in the respective line items on the consolidated statements of operations.

 

In June 2011, the European Commission granted marketing authorization to Bydureon for the once-weekly treatment of type 2 diabetes in combination with certain oral therapies. European launches began in the third quarter of 2011, starting with the United Kingdom and Germany. Net product sales of Bydureon were not material for the year ended December 31, 2011. In January 2012, the FDA approved Bydureon for marketing in the U.S.

 

The following table summarizes the revenue recognized with respect to exenatide:

 

 

 

 

 

 

 

 

 

2011 

2010 

 2009 

 

 

 

Net product sales  

$179.6

$168.1

 $147.7

 

Collaboration and other revenue  

  243.1

262.5

   300.8

 

Total revenue  

   $422.7

$430.6

$448.5

 

  

 

In accordance with the prior arrangement and pursuant to Amylin's request, in the second quarter of 2011 we loaned Amylin $165.0 million. Interest on this loan is to be received quarterly and all outstanding principal and interest is due five years from the date of the advance.

 

Cymbalta

We were in a collaborative arrangement with Boehringer Ingelheim (Boehringer) to jointly develop, market, and promote Cymbalta (duloxetine), outside the U.S. and Japan. Pursuant to the terms of the agreement, we generally shared equally in development, marketing, and selling expenses, and paid Boehringer a commission on sales in the co-promotion territories. We manufactured the product for all territories. Reimbursements or payments for the cost sharing of marketing, selling, and administrative expenses were recorded in the respective expense line items in the consolidated statements of operations. The commission paid to Boehringer was recorded in marketing, selling, and administrative expenses. In March 2010, the parties agreed to terminate this agreement, and we reacquired the exclusive rights to develop and market duloxetine for all indications in countries outside the U.S. and Japan. In connection with the termination, we paid Boehringer approximately $400 million and will also pay to Boehringer a percentage of our sales of duloxetine in these countries through 2012 as consideration for the rights acquired. We record these costs as intangible assets, which will be amortized to marketing, selling, and administrative expenses using the straight-line method over the life of the original agreement, which is through 2015.

 

Effient

We are in a collaborative arrangement with Daiichi Sankyo Company, Limited (D-S) to develop, market, and promote Effient. We and D-S have agreed to co-promote in certain territories (including the U.S. and five major European markets), while we have exclusive marketing rights in certain other territories. D-S has exclusive marketing rights in Japan. The parties share approximately 50/50 in the profits, as well as in the costs of development and marketing in the co-promotion territories. A third party manufactures bulk product, and we produce the finished product for our exclusive and co-promotion territories. We record product sales in our exclusive and co-promotion territories. In our exclusive territories, we pay D-S a royalty specific to these territories. Profit share payments made to D-S are recorded as marketing, selling, and administrative expenses. All royalties paid to D-S and the third-party manufacturer are recorded in cost of sales. Worldwide Effient sales were $302.5 million, $115.0 million, and $27.0 million for the years ended December 31, 2011, 2010, and 2009, respectively.

 

Diabetes Collaboration

In January 2011, we and Boehringer entered into a global agreement to jointly develop and commercialize a portfolio of diabetes compounds. Included are Boehringer 's two oral diabetes agents, linagliptin and empagliflozin (BI 10773). Subsequently in 2011, linagliptin was approved and launched in the U.S. (tradename Tradjenta), Japan (tradename Trazenta), Europe (tradename Trajenta), and other countries. Empagliflozin is currently in Phase III clinical testing. Also included in the agreement is our new insulin glargine product and our novel basal insulin analog, both of which began Phase III clinical testing in the second half of 2011; and an option granted to Boehringer to co-develop and co-commercialize our anti-TGF-beta monoclonal antibody, which is currently in Phase II clinical testing. Under the terms of the agreement, we made an initial one-time payment to Boehringer of $388.0 million and recorded an acquired IPR&D charge, which was included as expense in the first quarter of 2011 and is deductible for tax purposes.

 
 

In connection with the approval of linagliptin in the U.S., Japan, and Europe, in 2011 we paid $478.7 million in success-based regulatory milestones, all of which were capitalized as intangible assets and are being amortized to cost of sales. We may pay up to approximately €300 million in additional success-based regulatory milestones for empagliflozin. We will be eligible to receive up to a total of $650.0 million in success-based regulatory milestones on our two insulin products. Should Boehringer elect to opt in to the Phase III development and potential commercialization of the anti-TGF-beta monoclonal antibody, we would be eligible for up to $525.0 million in opt-in and success-based regulatory milestone payments. The companies share ongoing development costs equally. The companies also share in the commercialization costs and gross margin for any product resulting from the collaboration that receives regulatory approval. We record our portion of the gross margin as collaboration and other revenue, and we record our portion of the commercialization costs as marketing, selling, and administrative expense. Each company will also be entitled to potential performance payments on sales of the molecules they contribute to the collaboration. Revenue related to this collaboration has not been significant to date.

  

Solanezumab

We have an agreement with an affiliate of TPG-Axon Capital (TPG) whereby both we and TPG were obligated to fund the Phase III development of solanezumab. Under the agreement, TPG's obligation to fund solanezumab costs are not material and ended in the first half of 2011. In exchange for their funding, TPG may receive success-based sales milestones totaling approximately $70.0 million and mid-single digit royalties that are contingent upon the successful development of solanezumab. The royalties relating to solanezumab would be paid for approximately eight years after launch of a product. Reimbursements received from TPG for its portion of research and development costs incurred were recorded as a reduction to the research and development expense line item on the consolidated statements of operations. The reimbursement from TPG was not material in any period.

 

Summary of Collaboration-Related Commission and Profit Share Payments

The aggregate amounts of commissions and profit share payments included in marketing, selling, and administrative expense pursuant to the collaborations described above were $219.2 million, $174.5 million, and $319.2 million for the years ended December 31, 2011, 2010, and 2009, respectively.

 

  

 

 

 

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Asset Impairments, Restructuring, and Other Special Charges
12 Months Ended
Dec. 31, 2011
Asset Impairments, Restructuring, and Other Special Charges [Abstract]
Asset Impairments, Restructuring, And Other Special Charges [Text Block]

Note 5: Asset Impairments, Restructuring, and Other Special Charges

The components of the charges included in asset impairments, restructuring, and other special charges in our consolidated statements of operations are described below.

 

 

2011

2010

2009

 

 

   Severance

$251.8

$142.0

$   99.0

   Asset impairments and other special charges

149.6

50.0

363.7

   Product liability and other special charges – legal settlement

-

-

230.0

      Asset impairments, restructuring, and other special charges

$401.4

$192.0

$692.7

 

Severance

Severance costs listed above, substantially all of which have been paid, are primarily the result of the 2009 initiative to reorganize global operations, streamline various functions of the business, and reduce total employees, as well as other previously announced strategic actions to reduce our cost structure and global workforce. Included in the 2009 severance charges is $61.1 million related to the sale of our Tippecanoe Laboratories manufacturing site, which is further described below.

 

Asset Impairments and Other Special Charges

For the year ended December 31, 2011, we incurred $149.6 million of asset impairments and other special charges primarily consisting of $85.0 million for returned product and contractual commitments related to the withdrawal of Xigris from the market and $56.1 million related to our decision to vacate certain leased premises, a decision that was as a result of our 2009 initiative to reorganize global operations, streamline various functions of the business, and reduce total employees.

For the year ended December 31, 2010, we incurred $50.0 million of asset impairments and other special charges primarily consisting of lease termination costs and asset impairments outside the United States.

In 2009, we recognized non-cash asset impairments and other special charges of $363.7 million primarily due to the sale of our Tippecanoe Laboratories manufacturing site to an affiliate of Evonik Industries AG (Evonik) in early 2010. In connection with the sale of the site, we entered into a nine-year supply and services agreement, whereby Evonik will manufacture final and intermediate step API for certain of our human and animal health products. The fair value of assets used in determining impairment charges was based on contracted sales prices.

 

Product Liability and Other Special Charges

In 2009, we incurred other special charges of $230.0 million related to advanced discussions with the attorneys general for several states, seeking to resolve their Zyprexa-related claims. The charges represented the then-current probable and estimable exposures in connection with the states' claims. Refer to Note 15 for additional information.

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Financial Instruments
12 Months Ended
Dec. 31, 2011
Financial Instruments [Abstract]
Financial Instruments [Text Block]

Note 6: Financial Instruments

 

 

At December 31, 2011, approximately 90 percent of our total debt is at a fixed rate. We have converted approximately 70 percent of our fixed-rate debt to floating rates through the use of interest rate swaps.
 

The Effect of Risk Management Instruments on the Statement of Operations

 
The following effects of risk-management instruments were recognized in other—net, expense:
 

 

2011

2010

2009

Fair value hedges

 

 

 

  Effect from hedged fixed-rate debt

$259.6

$149.6

$(369.5)

  Effect from interest rate contracts

(259.6)

(149.6)

369.5

 

 

 

 

Cash flow hedges

 

 

 

  Effective portion of losses on interest rate contracts

    reclassified from accumulated other comprehensive loss

 

9.0

 

9.0

 

10.2

 

 

 

 

Net losses on foreign currency exchange contracts not designated as
    hedging instruments

 

97.4

 

12.0

 

82.6

 

 

The effective portion of net gains (losses) on equity contracts in designated cash flow hedging relationships recorded in other comprehensive income (loss) was $35.6 million, $(35.6) million, and $0.0 million for the years ended December 31, 2011, 2010, and 2009, respectively. The effective portion of net gains on interest rate contracts in designated cash flow hedging relationships recorded in other comprehensive income (loss) was $0.0 million, $0.0 million, and $38.0 million for the years ended December 31, 2011, 2010, and 2009 respectively.

 

We expect to reclassify $9.0 million of pretax net losses on cash flow hedges of the variability in expected future interest payments on floating rate debt from accumulated other comprehensive loss to earnings during the next 12 months.

 

 

During the years ended December 31, 2011, 2010, and 2009, net losses related to ineffectiveness, as well as net losses related to the portion of our risk-management hedging instruments, fair value hedges, and cash flow hedges that were excluded from the assessment of effectiveness, were not material.

 

Fair Value of Financial Instruments

 

The following tables summarize certain fair value information at December 31 for assets and liabilities measured at fair value on a recurring basis, as well as the carrying amount and amortized cost of certain other investments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fair Value Measurements Using

 

 

 

 

Description

 

Carrying
Amount

 

 

Amortized
Cost

 

 

Quoted
Prices in

Active
Markets
for

Identical
Assets

(Level 1)

 

 

Significant

Other

Observable Inputs

(Level 2)

 

 

Significant

Unobservable

Inputs

(Level 3)

 

 

Fair

Value

 

 

 

 

 

December 31, 2011

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

   $

5,922.5

 

 

$

5,922.5

 

 

$

5,264.6

 

 

$

657.9

 

 

$

 

 

 

$

5,922.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Short-term investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. government and agencies

 

   $

362.3

 

 

$

362.3

 

 

$

362.3

 

 

$

 

 

 

$

 

 

 

$

362.3

 

Corporate debt securities

 

 

600.7

 

 

 

601.1

 

 

 

 

 

 

 

600.7

 

 

 

 

 

 

 

600.7

 

Other securities

 

 

11.6

 

 

 

11.6

 

 

 

 

 

 

 

11.6

 

 

 

 

 

 

 

11.6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Short-term investments

 

   $

974.6

 

 

$

975.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noncurrent investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. government and agencies

 

   $

908.8

 

 

$

901.3

 

 

$

908.8

 

 

$

 

 

 

$

 

 

 

$

908.8

 

Corporate debt securities

 

 

2,081.3

 

 

 

2,093.3

 

 

 

 

 

 

 

2,081.3

 

 

 

 

 

 

 

2,081.3

 

Mortgage-backed

 

 

443.8

 

 

 

479.1

 

 

 

 

 

 

 

443.8

 

 

 

 

 

 

 

443.8

 

Asset-backed

 

 

245.0

 

 

 

253.2

 

 

 

 

 

 

 

245.0

 

 

 

 

 

 

 

245.0

 

Other securities

 

 

10.0

 

 

 

11.9

 

 

 

 

 

 

 

8.7

 

 

 

1.3

 

 

 

10.0

 

Marketable equity

 

 

180.8

 

 

 

107.5

 

 

 

180.8

 

 

 

 

 

 

 

 

 

 

 

180.8

 

Equity method and other investments (1)

 

 

160.1

 

 

 

160.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments

 

   $

4,029.8

 

 

$

4,006.4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2010

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

   $

5,993.2

 

 

$

5,993.2

 

 

$

2,138.6

 

 

$

3,854.6

 

 

$

 

 

 

$

5,993.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Short-term investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial paper

 

   $

540.8

 

 

$

540.8

 

 

$

 

 

 

$

540.8

 

 

$

 

 

 

$

540.8

 

U.S. government and agencies

 

 

128.9

 

 

 

128.9

 

 

 

128.9

 

 

 

 

 

 

 

 

 

 

 

128.9

 

Corporate debt securities

 

 

63.4

 

 

 

63.9

 

 

 

 

 

 

 

63.4

 

 

 

 

 

 

 

63.4

 

Other securities

 

 

0.7

 

 

 

0.7

 

 

 

 

 

 

 

0.7

 

 

 

 

 

 

 

0.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Short-term investments

 

   $

733.8

 

 

$

734.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noncurrent investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. government and agencies

 

   $

359.2

 

 

$

361.8

 

 

$

359.2

 

 

$

 

 

 

$

 

 

 

$

359.2

 

Corporate debt securities

 

 

367.9

 

 

 

368.9

 

 

 

 

 

 

 

367.9

 

 

 

 

 

 

 

367.9

 

Mortgage-backed

 

 

315.5

 

 

 

350.7

 

 

 

 

 

 

 

315.5

 

 

 

 

 

 

 

315.5

 

Asset-backed

 

 

132.4

 

 

 

140.8

 

 

 

 

 

 

 

132.4

 

 

 

 

 

 

 

132.4

 

Other securities

 

 

6.4

 

 

 

8.3

 

 

 

 

 

 

 

3.3

 

 

 

3.1

 

 

 

6.4

 

Marketable equity

 

 

433.7

 

 

 

182.6

 

 

 

433.7

 

 

 

 

 

 

 

 

 

 

 

433.7

 

Equity method and other investments (1)

 

 

164.4

 

 

 

164.4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments

 

   $

1,779.5

 

 

$

1,577.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)
   - Fair value not applicable
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fair Value Measurements Using

 

 

 

 

Description

 

Carrying
Amount

 

 

Quoted
Prices in

Active
    Markets    
for

Identical
Assets

(Level 1)

 

 

Significant
Other

Observable Inputs

(Level 2)

 

 

Significant

    Unobservable    

Inputs

(Level 3)

 

 

Fair

Value

 

 

 

 

 

Long-term debt, including current portion

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2011

 

$

(6,981.5)

 

 

$

 

 

 

$

(7,451.5)

 

 

$

 

 

 

$

(7,451.5)

 

December 31, 2010

 

 

(6,788.7)

 

 

 

 

 

 

 

(7,030.0)

 

 

 

 

 

 

 

(7,030.0)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fair Value Measurements Using

 

 

 

 

Description

 

Carrying
Amount

 

 

Quoted
Prices in

Active
    Markets    
for

Identical
Assets

(Level 1)

 

 

Significant
Other

Observable Inputs

(Level 2)

 

 

Significant

    Unobservable    

Inputs

(Level 3)

 

 

Fair

Value

 

 

 

 

 

December 31, 2011

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Risk-management instruments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate contracts
designated as hedging instruments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other receivables

 

$

6.1

 

 

$

 

 

 

$

6.1

 

 

$

 

 

 

$

6.1

 

Sundry

 

 

531.7

 

 

 

 

 

 

 

531.7

 

 

 

 

 

 

 

531.7

 

Foreign exchange contracts
not designated as hedging
instruments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other receivables

 

 

16.2

 

 

 

 

 

 

 

16.2

 

 

 

 

 

 

 

16.2

 

Other current liabilities

 

 

(25.9)

 

 

 

 

 

 

 

(25.9)

 

 

 

 

 

 

 

(25.9)

 

                             

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2010

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Risk-management instruments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate contracts designated as hedging instruments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sundry

 

$

278.3

 

 

$

 

 

 

$

278.3

 

 

$

 

 

 

$

278.3

 

Foreign exchange contracts
not designated as hedging instruments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other receivables

 

 

13.7

 

 

 

 

 

 

 

13.7

 

 

 

 

 

 

 

13.7

 

Other current liabilities

 

 

(31.6)

 

 

 

 

 

 

 

(31.6)

 

 

 

 

 

 

 

(31.6)

 

Equity contracts designed as hedging instruments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other current liabilities

 

 

(35.6)

 

 

 

 

 

 

 

(35.6)

 

 

 

 

 

 

 

(35.6)

 

 

The fair value of the contingent consideration liability related to the Avid and Alnara acquisitions (Note 3), a Level 3 measurement in the fair value hierarchy, was $121.6 million and $163.5 million as of December 31, 2011 and 2010, respectively.

 

We determine fair values based on a market approach using quoted market values, significant other observable inputs for identical or comparable assets or liabilities, or discounted cash flow analyses. The fair value of equity method investments and other investments is not readily available.

 

Approximately $4.03 billion of our investments in debt securities, measured at fair value, will mature within five years.

 

A summary of the fair value of available-for-sale securities in an unrealized gain or loss position and the amount of unrealized gains and losses (pretax) in accumulated other comprehensive loss follows:

 

 

 

 

 

 

 

 

 

 

 

2011    

 

 

2010    

 

 

 

 

 

 

 

 

 

 

Unrealized gross gains

 

 

$ 103.0

 

 

 

$  262.6

 

Unrealized gross losses

 

 

     80.0

 

 

 

     61.1

 

Fair value of securities in an unrealized gain position

 

 

2,498.9

 

 

 

1,031.8

 

Fair value of securities in an unrealized loss position

 

 

2,164.4

 

 

 

   758.1

 

 

Other-than-temporary impairment losses on fixed income securities of $26.8 million, $12.0 million, and $22.4 million were recognized in the statement of operations for the years ended December 31, 2011, 2010, and 2009, respectively. These losses primarily relate to credit losses on other securities for the year ended December 31, 2011 and on certain mortgage-backed securities for the years ended December 31, 2010 and 2009. The amount of credit losses represents the difference between the present value of cash flows expected to be collected on these securities and the amortized cost. Factors considered in assessing the credit loss were the position in the capital structure, vintage and amount of collateral, delinquency rates, current credit support, and geographic concentration.

 

The securities in an unrealized loss position include fixed-rate debt securities of varying maturities. The value of fixed income securities is sensitive to changes in the yield curve and other market conditions. Approximately 90 percent of the securities in a loss position are investment-grade debt securities. At this time, there is no indication of default on interest or principal payments for debt securities other than those for which an other-than-temporary impairment charge has been recorded. We do not intend to sell and it is not more likely than not we will be required to sell the securities in a loss position before the market values recover or the underlying cash flows have been received, and we have concluded that no additional other-than-temporary loss is required to be charged to earnings as of December 31, 2011.

The net adjustment to unrealized gains and losses (net of tax) on available-for-sale securities decreased other comprehensive income (loss) by $114.1 million for the year ended December 31, 2011 and increased other comprehensive income (loss) by $53.5 million and $186.6 million for the years ended December 31, 2010 and 2009, respectively.  Activity related to our available-for-sale investment portfolio was as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    2011    

 

 

    2010    

 

 

    2009    

 

 

 

 

 

 

 

 

 

 

 

 

 

Proceeds from sales

 

$

2,268.3

 

 

$

760.3

 

 

$

1,227.4

 

 

 

 

 

Realized gross gains on sales

 

 

  140.0

 

 

 

110.7

 

 

 

    68.9

 

 

 

 

 

Realized gross losses on sales

 

 

     9.9

 

 

 

   4.8

 

 

 

      6.8

 

 

 

 

 

 

 

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Goodwill and Other Intangibles
12 Months Ended
Dec. 31, 2011
Goodwill and Other Intangibles [Abstract]
Goodwill and Intangible Assets Disclosure [Text Block]

Note 7: Goodwill and Other Intangibles

 

Goodwill at December 31 was as follows:

 

2011

2010

Goodwill

$1,434.7

$1,423.9

 

Substantially all of our goodwill balance is attributable to the human pharmaceutical business segment. See Note 3 for a further discussion of goodwill resulting from recent business combinations. No impairments occurred with respect to the carrying value of goodwill for the years ended December 31, 2011, 2010, or 2009.

 

The components of other intangible assets at December 31 were as follows:

 

 

 

 

 

 

 

 

 

 

2011

2010

 

 

 

Description

Carrying Amount – Gross

 

Accumulated Amortization

Carrying Amount – Net

Carrying Amount – Gross

 

Accumulated Amortization

Carrying Amount –Net

 

 

Finite-lived intangible assets

 

 

 

 

 

 

  Marketed products

$4,624.9

$(1,481.2)

$3,143.7

$3,789.1

$(1,023.4)

$2,765.7

  Other

117.3

(42.5)

74.8

62.5

(31.3)

31.2

Total finite-lived intangible assets

4,742.2

(1,523.7)

3,218.5

3,851.6

(1,054.7)

2,796.9

 

 

 

 

 

 

 

Indefinite-lived intangible assets

 

 

 

 

 

 

  In-process research and
    development

 

474.9

 

0.0

 

474.9

 

598.0

 

0.0

 

598.0

 

 

 

 

 

 

 

Total other intangible assets

$5,217.1

$(1,523.7)

$3,693.4

$4,449.6

$(1,054.7)

$3,394.9

 

Marketed products consists of the amortized cost of the rights to assets acquired in business combinations and approved for marketing in a significant global jurisdiction (U.S., Europe, and Japan) and capitalized milestone payments. Other intangibles consist primarily of the amortized cost of licensed platform technologies that have alternative future uses in research and development, manufacturing technologies, and customer relationships from business combinations. IPR&D consists of the acquisition date fair value of intangible assets acquired in business combinations that have not yet achieved regulatory approval for marketing. See Note 3 for a further discussion of indefinite-lived intangible assets acquired in recent business combinations.

 

The remaining weighted-average amortization period for finite-lived intangible assets is approximately 9 years. Amortization expense for 2011, 2010, and 2009 was $469.0 million, $385.7 million, and $277.0 million, respectively. The estimated amortization expense for our current finite-lived intangible assets for each of the five succeeding years approximates $530 million in 2012, $460 million in 2013, $410 million in 2014, $380 million in 2015, and $330 million in 2016. Amortization expense is included in either cost of sales or marketing, selling, and administrative depending on the nature of the intangible asset being amortized.

 

During 2011, we recorded impairment charges of $151.5 million due primarily to the partial impairment of the IPR&D assets related to Amyvid and liprotamase. The impairment of Amyvid was due to a delay in product launch and lower sales projections during the early part of the product's expected life cycle. In April 2011, we received a complete response letter from the FDA for the NDA for liprotamase, which communicated the need for us to conduct an additional clinical trial prior to a re-submission, resulting in an impairment of liprotamase.

 

No impairments occurred with respect to the carrying value of other intangible assets for the years ended December 31, 2010 and 2009.

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Borrowings
12 Months Ended
Dec. 31, 2011
Borrowings [Abstract]
Debt Disclosure [Text Block]

Note 8: Borrowings

 

Long-term debt at December 31 consisted of the following:

 

2011

2010

3.55 to 7.13 percent notes (due 2012-2037)

$6,387.4

$6,387.4

Other, including capitalized leases

37.6

97.2

Fair value adjustment

556.5

304.1

 

6,981.5

6,788.7

Less current portion

(1,516.8)

(18.2)

Long-term debt

$5,464.7

$6,770.5

 

In March 2009, we issued $2.40 billion of fixed-rate notes with interest to be paid semi-annually.

 

The 6.55 percent Employee Stock Ownership Plan (ESOP) debentures were repaid in full during the year ended December 31, 2011. The balance was $63.7 million at December 31, 2010, and is included in Other in the table above.

 

The aggregate amounts of maturities on long-term debt for the next five years are as follows: 2012, $1.51 billion; 2013, $10.2 million; 2014, $1.01 billion; 2015, $5.3 million; and 2016, $201.2 million.

 

At December 31, 2011 and 2010, short-term borrowings included $5.5 million and $137.8 million, respectively, of notes payable to banks. At December 31, 2011, we have $1.24 billion of unused committed bank credit facilities, $1.20 billion of which backs our commercial paper program and matures in April 2015. There were no amounts outstanding under the facility as of or during the year ended December 31, 2011. Compensating balances and commitment fees are not material, and there are no conditions that are probable of occurring under which the lines may be withdrawn.

 

In September 2010, we borrowed $125.0 million of short-term floating-rate debt, which was repaid in full during the year ended December 31, 2011.

 

We have converted approximately 70 percent of all fixed-rate debt to floating rates through the use of interest rate swaps. The weighted-average effective borrowing rates based on debt obligations and interest rates at December 31, 2011 and 2010, including the effects of interest rate swaps for hedged debt obligations, were 3.00 percent and 2.87 percent, respectively.

 

For the years ended December 31, 2011, 2010, and 2009, cash payments of interest on borrowings totaled $167.4 million, $176.3 million, and $205.9 million, respectively, net of capitalized interest.

 

In accordance with the requirements of derivatives and hedging guidance, the portion of our fixed-rate debt obligations that is hedged is reflected in the consolidated balance sheets as an amount equal to the sum of the debt's carrying value plus the fair value adjustment representing changes in fair value of the hedged debt attributable to movements in market interest rates subsequent to the inception of the hedge.

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Stock-Based Compensation
12 Months Ended
Dec. 31, 2011
Stock-Based Compensation [Abstract]
Stock-Based Compensation [Text Block]

Note 9: Stock-Based Compensation

 

Stock-based compensation expense in the amount of $147.4 million, $231.0 million, and $368.5 million was recognized for the years ended December 31, 2011, 2010, and 2009, respectively, as well as related tax benefits of $51.6 million, $80.8 million, and $128.9 million, respectively. Our stock-based compensation expense consists primarily of performance awards (PAs), shareholder value awards (SVAs), and restricted stock units (RSUs). We recognize the stock-based compensation expense over the requisite service period of the individual grantees, which generally equals the vesting period. We provide newly issued shares and treasury stock to satisfy stock option exercises and for the issuance of PA, SVA, and RSU shares. We classify tax benefits resulting from tax deductions in excess of the compensation cost recognized for exercised stock options as a financing cash flow in the consolidated statements of cash flows.

 

At December 31, 2011, additional stock-based compensation awards may be granted under the 2002 Lilly Stock Plan for not more than 93.0 million shares.

 

Performance Award Program

PAs are granted to officers and management and are payable in shares of our common stock. The number of PA shares actually issued, if any, varies depending on the achievement of certain pre-established earnings-per-share targets over a two-year period. In 2009, we granted both a one-year and a two-year award to all global management as a transition to a two-year performance period for all PAs granted beginning in 2010. PA shares are accounted for at fair value based upon the closing stock price on the date of grant and fully vest at the end of the measurement periods. The fair values of PAs granted for the years ended December 31, 2011 and 2010 were $31.90 and $30.88, respectively. The fair values of PAs granted in 2009 were $36.17 for the one-year award and $34.12 for the two-year award. The number of shares ultimately issued for the PA program is dependent upon the earnings achieved during the vesting period. Pursuant to this plan, approximately 3.9 million shares, 3.8 million shares, and 2.8 million shares were issued during the years ended December 31, 2011, 2010, and 2009, respectively. Approximately 1.6 million shares are expected to be issued in 2012. As of December 31, 2011, the total remaining unrecognized compensation cost related to nonvested PAs amounted to $16.7 million, which will be amortized over the weighted-average remaining requisite service period of 12 months.

 

Shareholder Value Award Program

SVAs are granted to officers and management and are payable in shares of common stock at the end of a three-year period.  The number of shares actually issued varies depending on our stock price at the end of the three-year vesting period compared to pre-established target stock prices.  We measure the fair value of the SVA unit on the grant date using a Monte Carlo simulation model.  The Monte Carlo simulation model utilizes multiple input variables that determine the probability of satisfying the market condition stipulated in the award grant and calculates the fair value of the award.  Expected volatilities utilized in the model are based on implied volatilities from traded options on our stock, historical volatility of our stock price, and other factors.  Similarly, the dividend yield is based on historical experience and our estimate of future dividend yields.  The risk-free interest rate is derived from the U.S. Treasury yield curve in effect at the time of grant.  The weighted-average fair values of the SVA units granted during the years ended December 31, 2011, 2010, and 2009 were $28.33, $25.97, and $33.97, respectively, determined using the following assumptions:

(Percents)

2011

2010

2009

Expected dividend yield

4.90

4.50

4.00

Risk-free interest rate

.201.36

.101.36

.441.48

Range of volatilities

27.6129.10

28.0028.69

24.3424.92

 

A summary of the SVA activity is presented below:

 

Units

Attributable to SVAs

(in thousands)

Outstanding at January 1, 2009

1,903

Granted

1,416

Forfeited or expired

(559)

Outstanding at December 31, 2009

2,760

Granted

1,987

Issued

(365)

Forfeited or expired

(745)

Outstanding at December 31, 2010

3,637

Granted

1,830

Issued

(428)

Forfeited or expired

(740)

Outstanding at December 31, 2011

4,299

 

The maximum number of shares that could ultimately be issued upon vesting of the SVA units outstanding at December 31, 2011, is 5.6 million. Approximately 1.0 million shares are expected to be issued in 2012. As of December 31, 2011, the total remaining unrecognized compensation cost related to nonvested SVAs amounted to $45.9 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 three years.  The fair values of RSU awards granted during the years ended December 31, 2011, 2010, and 2009 were $35.80, $34.78, and $38.12, respectively.  The number of shares ultimately issued for the RSU program remains constant with the exception of forfeitures.  Pursuant to this plan, 1.5 million, 1.5 million and 0.5 million shares were granted during the years ended December 31, 2011, 2010, and 2009, respectively, and approximately 0.2 million and 0.2 million shares were issued during the years ended December 31, 2011 and 2010, respectively.  Approximately 0.3 million shares are expected to be issued in 2012.  As of December 31, 2011, the total remaining unrecognized compensation cost related to nonvested RSUs amounted to $52.0 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 price at the date of grant. Options fully vest three years from the grant date and have a term of 10 years.

 

Stock option activity during the year ended December 31, 2011 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, 2011

55,507

$69.04

 

 

Exercised

(18)

24.33

 

 

Forfeited or expired

(18,933)

74.56

 

 

Outstanding at December 31, 2011

36,556

66.22

1.8

$1.2

Exercisable at December 31, 2011

36,556

66.22

1.8

1.2

All options were vested as of December 31, 2011.

 

The intrinsic value of options exercised during the years ended December 31, 2011, 2010, and 2009 amounted to $0.2 million, $0.1 million, and $0.3 million, respectively. The total grant date fair value of options vested during the year ended December 31, 2009 amounted to $68.5 million. We received cash of $0.4 million, $0.1 million, and $0.2 million from exercises of stock options during the years ended December 31, 2011, 2010, and 2009, respectively. The recognized related tax benefits for all three years were not material.

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Other Assets and Other Liabilities
12 Months Ended
Dec. 31, 2011
Other Assets and Other Liabilities [Abstract]
Other Assets and Other Liabilities [Text Block]

Note 10: Other Assets and Other Liabilities

 

Other receivables include receivables from our collaboration partners, tax receivables, interest receivable on the interest rate swaps, and a variety of other items.

 

Prepaid expenses and other includes global prepaid operating expenses and deferred taxes (Note 13).

 

Sundry assets primarily include deferred tax assets (Note 13), capitalized computer software, receivables from our collaboration partners, the fair value of the interest rate swaps, and prepaid retirement plan outside the U.S. The increase in sundry asset is attributable to the increase in deferred tax assets, the increase in the fair value of the interest rate swaps, the increase in the prepayment of a retirement plan outside the U.S. (Note 14), and the increase relating to the loan made to Amylin in the second quarter of 2011 (Note 4).

 

Other current liabilities include product litigation, other taxes payable, deferred tax liabilities (Note 13), deferred income and liabilities from our collaboration arrangements, the current portion of our estimated product return liabilities, and a variety of other items. The increase in other current liabilities is primarily attributable to the increase in deferred income relating to the termination of the collaboration agreement with Amylin (Note 4) and, to a lesser extent, an increase in liabilities from our collaboration arrangements, product liabilities, and deferred taxes.

 

Other noncurrent liabilities include deferred income from our collaboration and out-licensing arrangements, deferred tax liabilities (Note 13), the fair value of contingent consideration from business combinations (Note 3), the long-term portion of our estimated product return liabilities, product litigation, and a variety of other items. The decrease in other noncurrent liabilities was primarily due to the decrease in deferred tax liabilities and, to a lesser extent, the decrease in contingent consideration, and the decrease in deferred income. The decreases were offset by the increase in the long-term portion of the estimated product return liabilities.

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Shareholders' Equity
12 Months Ended
Dec. 31, 2011
Shareholders' Equity [Abstract]
Shareholders' Equity [Text Block]

Note 11: Shareholders' Equity

 

Changes in certain components of shareholders' equity were as follows:
 

 

Additional

 

Deferred

 

Common Stock in Treasury

 

Paid-in

Retained

Costs ‑

 

Shares

 

 

 

Capital

Earnings

ESOP

 

(in thousands)

 

Amount

 

 

 

 

 

 

 

 

Balance at January 1, 2009

$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

Net income

 

4,347.7

 

 

 

 

 

Cash dividends declared per
share: $1.96

 

 

(2,182.5)

 

 

 

 

 

Retirement of treasury shares

(0.1)

 

 

 

(1)

 

(0.1)

Issuance of stock under
employee stock plans-net

 

(108.7)

 

 

 

 

(10)

 

 

(1.0)

Stock-based compensation

147.4

 

 

 

 

 

 

ESOP transactions

49.7

 

52.4

 

 

 

 

 

 

 

 

 

 

 

 

Balance at December 31, 2011

$4,886.8

$14,897.8

$0.0

 

853

 

$ 95.3

 
 

As of December 31, 2011, we have purchased $2.58 billion of our announced $3.00 billion share repurchase program. No shares were repurchased during the years ended December 31, 2011, 2010, or 2009.

 

We have 5 million authorized shares of preferred stock. As of December 31, 2011 and 2010, no preferred stock has been issued.

 

We have an employee benefit trust that held 50.0 million and 50.0 million shares of our common stock at December 31, 2011 and 2010, respectively, 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 and $3.01 billion at December 31, 2011 and 2010, 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 during the years ended December 31, 2011, 2010, or 2009.

 

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 (Note 8). The proceeds were used to purchase shares of our common stock on the open market. As of December 31, 2011, all shares of common stock held by the ESOP were allocated to participating employees as part of our savings plan contribution. The fair value of shares allocated each period was recognized as compensation expense.

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Earnings Per Share
12 Months Ended
Dec. 31, 2011
Earnings Per Share [Abstract]
Earnings Per Share [Text Block]

Note 12: Earnings Per Share

 

Following is a reconciliation of the denominators used in computing earnings per share:

 

 

2011

2010

2009

 

(Shares in thousands)

 

 

 

 

 

 

Income available to common  shareholders

 

$4,347.7

 

$5,069.5

 

$4,328.8

 

 

 

 

 

 

Basic earnings per share

 

 

 

 

   Weighted-average number of common shares

    outstanding, including incremental shares

 

1,113,923

 

1,105,788

 

1,098,338

 

   Basic earnings per share

$3.90

$4.58

$3.94

 

 

 

 

 

 

Diluted earnings per share

 

 

 

 

   Weighted-average number of common

    shares outstanding

 

1,107,112

 

1,099,310

 

1,094,623

 

   Stock options and other incremental shares

6,855

6,503

3,744

 

   Weighted-average number of common

    shares outstanding - diluted

 

1,113,967

 

1,105,813

 

1,098,367

 

   Diluted earnings per share

$3.90

$4.58

$3.94

 

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Income Taxes
12 Months Ended
Dec. 31, 2011
Income Taxes [Abstract]
Income Taxes [Text Block]

Note 13: Income Taxes

 

Following is the composition of income tax expense:

 

2011

2010

2009

Current

 

 

 

   Federal

$   671.4

$   376.2

$   45.7

   Foreign

     759.5

     513.9

   772.2

   State

     (22.9)

       23.3

     49.2

      Total current tax expense

1,408.0

     913.4

   867.1

Deferred

 

 

 

   Federal

    (398.5)

     624.4

       82.5

   Foreign

      (34.7)

      (55.2)

       79.8

   State

        27.0

      (26.9)

       (0.4)

      Total deferred tax expense (benefit)

    (406.2)

     542.3

     161.9

Income taxes

$1,001.8

$1,455.7

$1,029.0

 

Significant components of our deferred tax assets and liabilities as of December 31 are as follows:

 

2011

2010

Deferred tax assets

 

 

   Compensation and benefits

$1,286.5

$   890.4

   Tax credit carryforwards and carrybacks

     695.3

     503.1

   Asset purchases

     428.5

     275.1

   Tax loss carryforwards and carrybacks

     406.1

     414.0

   Intercompany profit in inventories

     277.2

     316.7

   Debt

     214.9

    114.6

   Sale of intangibles

     207.1

    112.8

   Product return reserves

     146.2

      84.0

   Contingencies

       94.5

    106.6

   Other

     301.3

    363.4

      Total gross deferred tax assets

 4,057.6

 3,180.7

   Valuation allowances

  (611.9)

  (473.1)

 

 

 

      Total deferred tax assets

3,445.7

2,707.6

 

 

 

Deferred tax liabilities

 

 

   Unremitted earnings

    (940.2)

   (741.8)

   Intangibles

    (839.9)

   (954.9)

   Inventories

    (489.2)

   (525.6)

   Property and equipment

    (451.0)

   (505.2)

   Financial instruments

    (196.9)

   (160.9)

   Other

        (8.5)

     (19.1)

      Total deferred tax liabilities

(2,925.7)

(2,907.5)

 

 

 

Deferred tax assets (liabilities) - net

$   520.0

$   (199.9)

 

At December 31, 2011 and 2010, no individually significant items were classified as "Other" deferred tax assets or liabilities.

 

The deferred tax asset and related valuation allowance amounts for U.S. and state net operating losses and tax credits shown above have been reduced for differences between financial reporting and tax return filings. At December 31, 2011, based on filed tax returns we had net operating losses and other carryforwards for international and U.S. income tax purposes of $780.8 million: $335.5 million will expire within 5 years; $404.8 million will expire between 5 and 20 years; and $40.5 million of the carryforwards will never expire. The remaining balance of the deferred tax asset for tax loss carryforwards and carrybacks is related to net operating losses for state income tax purposes that are substantially reserved.

 

Based on filed tax returns, we also have tax credit carryforwards and carrybacks of $1.01 billion available to reduce future income taxes; $514.4 million will be carried back; $53.0 million of the tax credit carryforwards will expire between 10 and 20 years; and $1.3 million of the tax credit carryforwards will never expire. The remaining portion of the tax credit carryforwards is related to federal tax credits of $93.8 million and state tax credits of $349.4 million, both of which are fully reserved.

 

Domestic and Puerto Rican companies contributed approximately 24 percent, 45 percent, and 39 percent for the years ended December 31, 2011, 2010, and 2009, respectively, to consolidated income before income taxes. We have a subsidiary operating in Puerto Rico under a tax incentive grant. The current tax incentive grant will not expire prior to 2017.

 

At December 31, 2011, we had an aggregate of $20.60 billion of unremitted earnings of foreign subsidiaries that have been or are intended to be permanently reinvested for continued use in foreign operations and that, if distributed, would result in additional income tax expense at approximately the U.S. statutory rate.

 

Cash payments of income taxes totaled $943.0 million, $861.0 million, and $1.14 billion, for the years ended December 31, 2011, 2010, and 2009, respectively.

 

Following is a reconciliation of the income tax expense applying the U.S. federal statutory rate to income before income taxes to reported income tax expense:
 

 

2011

2010

2009

Income tax at the U.S. federal statutory tax rate

$1,872.3

$2,283.8

$1,875.2

Add (deduct)

 

 

 

   International operations, including Puerto Rico

(796.7)

(823.3)

(741.1)

   U.S. health care reform

62.9

85.1

0.0

   General business credits

(80.8)

(83.2)

(79.4)

   IRS audit conclusion

(85.3)

0.0

(54.4)

   Other

29.4

(6.7)

28.7

Income taxes

$1,001.8

$1,455.7

$1,029.0

 

In October 2010, Puerto Rico enacted excise tax legislation that affected our operations beginning with the year ended December 31, 2011. The excise tax is imposed on the purchase of goods and services from a related manufacturer in Puerto Rico, and is therefore included in costs of sales in our consolidated statement of operations rather than income taxes. The Internal Revenue Service (IRS) has stated it would not challenge a taxpayer's position that this excise tax is creditable for U.S. income tax purposes, pending the resolution of numerous legal and factual issues. As a result, the 2011 benefit on international operations reported in the effective tax rate reconciliation above includes the benefit from the foreign tax credit related to the excise tax.

 

The U.S. health care legislation (both the primary "Patient Protection and Affordable Care Act" and the "Health Care and Education Reconciliation Act") eliminated the tax-free nature of the subsidy we receive for sponsoring retiree drug coverage that is "actuarially equivalent" to Medicare Part D. This provision is effective January 1, 2013. While this change has a future impact on our net tax deductions related to retiree health benefits, we were required to record a one-time charge to adjust our deferred tax asset for this change in the law in the quarter of enactment. Accordingly, we recorded a non-cash charge of $85.1 million in the first quarter of 2010. In addition, U.S. health care reform mandated an annual industry fee effective January 1, 2011, which is not deductible for tax purposes.

 

A reconciliation of the beginning and ending amount of gross unrecognized tax benefits is as follows:

 

2011

2010

2009

Beginning balance at January 1

$1,619.6

$1,351.2

 $1,223.2

Additions based on tax positions related to the current year

        89.4

     186.2

      179.1

Additions for tax positions of prior years

      390.0

     117.0

      170.4

Reductions for tax positions of prior years 

     (492.3)

     (30.2)

    (128.9)

Lapses of statutes of limitation

         (2.6)

       (7.0)

        (3.3)

Settlements

     (326.3)

       (0.1)

      (95.0)

Changes related to the impact of foreign currency translation

         (3.0)

         2.5

         5.7

Balance at  December 31

$1,274.8

$1,619.6

$1,351.2

 

The total amount of unrecognized tax benefits that, if recognized, would affect our effective tax rate was $812.3 million and $1.07 billion at December 31, 2011 and 2010, respectively.

 

We file income tax returns in the U.S. federal jurisdiction and various state, local, and non-U.S. jurisdictions. We are no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations in major taxing jurisdictions for years before 2007.

 

During 2011, we settled the U.S. examinations of tax years 2005-2007, along with certain matters related to tax years 2008-2009. The examination of the remainder of 2008-2009 commenced in the fourth quarter of 2011. Considering this current examination cycle, as well as the settlement of 2005-2007 and certain matters related to 2008-2009, our consolidated results of operations benefited from a reduction in tax expense of $85.3 million in 2011. We made cash payments totaling approximately $300 million for tax years 2005-2007. Because the examination of the remainder of 2008-2009 is still in the early stages, the resolution of all issues in this audit period will likely extend beyond the next 12 months.

 

During 2009, we settled an IRS administrative appeals matter from the 2001-2004 IRS audit. Considering the status of the 2005-2007 IRS examination at that time and the settlement of the IRS administrative appeals matter from the 2001-2004 audit, our income tax expense was reduced by $54.4 million, and a cash payment of approximately $50 million was paid, after utilization of applicable tax credit carryovers.

 

We recognize both accrued interest and penalties related to unrecognized tax benefits in income tax expense. During the years ended December 31, 2011, 2010, and 2009, we recognized income tax expense (benefit) of $(47.3) million, $38.3 million, and $(1.9) million, respectively, related to interest and penalties. At December 31, 2011 and 2010, our accruals for the payment of interest and penalties totaled $145.1 million and $221.0 million, respectively. Substantially all of the expense (benefit) and accruals relate to interest.

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Retirement Benefits
12 Months Ended
Dec. 31, 2011
Retirement Benefits [Abstract]
Retirement Benefits [Text Block]

Note 14: Retirement Benefits

 

We use a measurement date of December 31 to develop the change in benefit obligation, change in plan assets, funded status, and amounts recognized in the consolidated balance sheets at December 31 for our defined benefit pension and retiree health benefit plans, which were as follows:

             

 

Defined Benefit

Pension Plans

Retiree Health

Benefit Plans

 

 

2011

2010

2011

2010

 

 

 

 

 

Change in benefit obligation

 

 

 

 

 Benefit obligation at beginning of year

$8,115.0

$7,553.9

$2,088.5

$2,032.8

 Service cost

      236.3

    219.2

        72.4

       56.5

 Interest cost

      447.9

    431.6

      118.0

     121.4

 Actuarial loss

      794.7

    342.2

      110.2

       10.0

 Benefits paid

    (400.1)

  (387.8)

       (77.9)

      (98.0)

 Plan amendments

        10.0

       0.3

           1.1

      (64.2)

 Foreign currency exchange rate changes
    and other adjustments

 

       (12.6)

 

    (44.4)

 

         (3.7)

 

       30.0

 Benefit obligation at end of year

$9,191.2

$8,115.0

$2,308.6

$2,088.5

 

 

 

 

 

 

             

 

Defined Benefit

Pension Plans

Retiree Health

Benefit Plans

 

 

2011

2010

2011

2010

 

 

 

 

 

Change in plan assets

 

 

 

 

 Fair value of plan assets at

  beginning of year

 

 $6,983.0

 

$6,008.5

 

$1,327.7

 

$1,180.7

 Actual return on plan assets

       209.2

    818.3

       16.6

     152.2

 Employer contribution

       402.4

    563.5

       72.6

       92.8

 Benefits paid

     (400.1)

  (387.8)

      (77.9)

     (98.0)

 Foreign currency exchange rate

  changes and other adjustments

 

         (8.2)

 

    (19.5)

 

          0.0

 

         0.0

 Fair value of plan assets at end of year

$7,186.3

$6,983.0

$1,339.0

$1,327.7

 

 

 

 

 

 

 

             

 

Defined Benefit

Pension Plans

Retiree Health

Benefit Plans

 

 

2011

2010

2011

2010

 

 

 

 

 

 Funded status

$(2,004.9)

$(1,132.0)

$  (969.6)

$  (760.8)

 Unrecognized net actuarial loss

    4,857.5

   3,796.6

  1,367.4

   1,235.3

 Unrecognized prior service cost(benefit)

         57.3

        56.1

    (215.1)

    (261.1)

 Net amount recognized

$ 2,909.9

$ 2,720.7

$   182.7

$    213.4

 

 

 

 

 

 

 

             

 

Defined Benefit

Pension Plans

Retiree Health

Benefit Plans

 

 

2011

2010

2011

2010

 

 

 

 

 

 Amounts recognized in the consolidated
  balance sheet consisted of

 

 

 

 

   Prepaid expenses and other

$    160.8

$     58.5

$       0.0

$       0.0

   Other current liabilities

       (57.5)

     (54.7)

        (9.3)

       (9.2)

   Accrued retirement benefit

 (2,108.2)

(1,135.8)

   (960.3)

   (751.6)

   Accumulated other comprehensive

    loss before income taxes

 

   4,914.8

 

  3,852.7

 

  1,152.3

 

     974.2

   Net amount recognized

$2,909.9

$2,720.7

$   182.7

$   213.4

 

 

 

 

 

 

 

The unrecognized net actuarial loss and unrecognized prior service cost (benefit) have not yet been recognized in net periodic pension costs and are included in accumulated other comprehensive loss at December 31, 2011.

 

For the year ended December 31, 2012, we expect to recognize from accumulated other comprehensive loss as components of net periodic benefit cost, $285.3 million of unrecognized net actuarial loss and $3.3 million of unrecognized prior service loss related to our defined benefit pension plans, and $95.7 million of unrecognized net actuarial loss and $35.1 million of unrecognized prior service benefit related to our retiree health benefit plans. We do not expect any plan assets to be returned to us in 2012.

 

The following represents our weighted-average assumptions as of December 31:

 

             

 

Defined Benefit

Pension Plans

Retiree Health

Benefit Plans

(Percents)

2011

2010

2009

2011

2010

2009

 

 

 

 

 

 

 

 Weighted-average assumptions

  as of December 31

 

 

 

 

 

 

 

 

  Discount rate for benefit obligation

5.0

5.6

5.9

5.1

5.8

6.0

  Discount rate for net benefit costs

5.6

5.9

6.7

5.8

6.0

6.9

  Rate of compensation increase for benefit
    obligation

 

3.7

 

3.7

 

3.7

 

 

 

 

 

 

  Rate of compensation increase for net
    benefit costs

 

3.7

 

3.7

 

4.1

 

 

 

 

 

 

  Expected return on plan assets for net
    benefit costs

 

8.5

 

8.8

 

8.8

 

8.8

 

9.0

 

9.0

 

In evaluating the expected return on plan assets annually we consider numerous factors, including our historical assumptions compared with actual results, an analysis of current and future market conditions, our current and expected asset allocations, historical returns, and the views of leading financial advisers and economists for future asset class returns. As noted, historical returns are just one of several factors considered and are not the starting point for determining the expected return. Health-care-cost trend rates are assumed to increase at an annual rate of 7.4 percent for the year ended December 31, 2012, decreasing by approximately 0.3 percent per year to an ultimate rate of 5.0 percent by 2020.

 

The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid as follows:

 

2012

2013

2014

2015

2016

2017-2021

 

 

 

 

 

 

 

Defined benefit pension plans

$416.1

$424.2

$437.2

$449.9

$464.2

$2,609.2

 

 

 

 

 

 

 

Retiree health benefit plans-gross

$118.7

$119.1

$123.6

$127.3

$135.2

$790.8

Medicare rebates

  (11.7)

    (9.9)

  (11.0)

  (12.4)

  (13.5)

    (91.7)

Retiree health benefit plans-net

$107.0

$109.2

$112.6

$114.9

$121.7

$  699.1

 

The total accumulated benefit obligation for our defined benefit pension plans was $8.20 billion and $7.23 billion at December 31, 2011 and 2010, respectively. The projected benefit obligation and fair value of the plan assets for the defined benefit pension plans with projected benefit obligations in excess of plan assets were $8.12 billion and $5.96 billion, respectively, as of December 31, 2011, and $7.12 billion and $5.93 billion, respectively, as of December 31, 2010. The accumulated benefit obligation and fair value of the plan assets for the defined benefit pension plans with accumulated benefit obligations in excess of plan assets were $7.03 billion and $5.75 billion, respectively, as of December 31, 2011, and $1.10 billion and $136.3 million, respectively, as of December 31, 2010.

 

Net pension and retiree health benefit expense included the following components:

             

 

Defined Benefit

Pension Plans

Retiree Health

Benefit Plans

 

2011

2010

2009

2011

2010

2009

  Components of net periodic

    benefit cost

 

 

 

 

 

 

      Service cost

$236.3

$219.2

$242.1

$  72.4

$   56.5

$  53.7

      Interest cost

447.9

431.6

417.5

118.0

121.4

119.6

      Expected return on plan assets

(685.9)

(638.2)

(584.9)

(129.4)

(122.6)

(117.9)

      Amortization of prior service         cost(benefit)

 

8.6

 

8.8

 

8.0

 

(42.9)

 

(37.2)

 

(36.0)

      Recognized actuarial loss

200.4

163.0

84.5

88.7

85.0

71.8

      Net periodic benefit cost

$207.3

$184.4

$167.2

$106.8

$103.1

$  91.2

 

If the health-care-cost trend rates were to be increased by one percentage point each future year, the December 31, 2011, accumulated postretirement benefit obligation would increase by $209.4 million and the aggregate of the service cost and interest cost components of the 2011 annual expense would increase by $15.1 million. A one percentage point decrease in these rates would decrease the December 31, 2011, accumulated postretirement benefit obligation by $187.1 million and the aggregate of the 2011 service cost and interest cost by $12.3 million.

 

The following represents the amounts recognized in other comprehensive income (loss) for the year ended December 31, 2011:

 

 

Defined Benefit Pension Plans

Retiree Health Benefit Plans

Actuarial loss arising during period

$1,266.0

$221.3

Plan amendments during period

       10.0

      1.1

Amortization of prior service cost (benefit) included in
  net income

 

       (8.6)

 

    42.9

Amortization of net actuarial loss included in net
  income

 

    (200.4)

 

   (88.7)

Foreign currency exchange rate changes

       (4.9)

      1.5

Total other comprehensive loss during period

$1,062.1

$178.1

 

We have defined contribution savings plans that cover our eligible employees worldwide. The purpose of these defined contribution plans is generally to provide additional financial security during retirement by providing 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 $117.6 million, $119.8 million, and $127.6 million for the years ended December 31, 2011, 2010, and 2009, respectively.

 

We provide certain other postemployment benefits primarily related to disability benefits and accrue for the related cost over the service lives of employees. Expenses associated with these benefit plans for the years ended December 31, 2011, 2010, and 2009 were not significant.

 

Benefit Plan Investments

 

Our benefit plan investment policies are set with specific consideration of return and risk requirements in relationship to the respective liabilities. U.S. and Puerto Rico plans represent 81 percent of our global investments. Given the long-term nature of our liabilities, these plans have the flexibility to manage an above average degree of risk in the asset portfolios. At the investment-policy level, there are no specifically prohibited investments. However, within individual investment manager mandates, restrictions and limitations are contractually set to align with our investment objectives, ensure risk control, and limit concentrations.

 

 

We manage our portfolio to minimize any concentration of risk by allocating funds within asset categories. In addition, within a category we use different managers with various management objectives to eliminate any significant concentration of risk.

 

Our global benefit plans may enter into contractual arrangements (derivatives) to implement the local investment policy or manage particular portfolio risks. Derivatives are principally used to increase or decrease exposure to a particular public equity, fixed income, commodity, or currency market more rapidly or less expensively than could be accomplished through the use of the cash markets. The plans utilize both exchange traded and over-the-counter instruments. The maximum exposure to either a market or counterparty credit loss is limited to the carrying value of the receivable, and is managed within contractual limits. We expect all of our counterparties to meet their obligations. The gross values of these derivative receivables and payables are not material to the global asset portfolio, and their values are reflected within the tables below.

 

The defined benefit pension and retiree health benefit plan allocation strategy for the U.S. and Puerto Rico currently comprises approximately 81 percent growth investments and 19 percent fixed income investments. The growth investment allocation encompasses U.S. and international public equity securities, hedge funds, private equity-like investments, and real estate. These portfolio allocations are intended to reduce overall risk by providing diversification, while seeking moderate to high returns over the long term.

 

Public equity securities are well diversified and invested in U.S. and international small-to-large companies across various asset managers and styles. The remaining portion of the growth portfolio is invested in private alternative investments.

 

Fixed income investments primarily consist of fixed income securities in U.S. treasuries and agencies, emerging market debt obligations, corporate bonds, mortgage-backed securities and commercial mortgage-backed obligations.

 

Hedge funds are privately owned institutional investment funds that generally have moderate liquidity.  Hedge funds seek specified levels of absolute return regardless of overall market conditions, and generally have low correlations to public equity and debt markets.  Hedge funds often invest substantially in financial market instruments (stocks, bonds, commodities, currencies, derivatives, etc.) using a very broad range of trading activities to manage portfolio risks.  Hedge fund strategies focus primarily on security selection and seek to be neutral with respect to market moves.  Common groupings of hedge fund strategies include relative value, tactical, and event driven.  Relative value strategies include arbitrage, when the same asset can simultaneously be bought and sold at different prices, achieving an immediate profit.  Tactical strategies often take long and short positions to reduce or eliminate overall market risks while seeking a particular investment opportunity. Event strategy opportunities can evolve from specific company announcements such as mergers and acquisitions, and typically have little correlation to overall market directional movements.  Our hedge fund investments are made through limited partnership interests primarily in fund of funds structures to ensure diversification across many strategies and many individual managers.   Plan holdings in hedge funds are valued based on net asset values (NAVs) calculated by each fund or general partner, as applicable, and we have the ability to redeem these investments at NAV.

 

Private equity-like investment funds typically have low liquidity and are made through long-term partnerships or joint ventures that invest in pools of capital invested in primarily non-publicly traded entities. Underlying investments include venture capital (early stage investing), buyout, and special situation investing. Private equity management firms typically acquire and then reorganize private companies to create increased long term value. Private equity-like funds usually have a limited life of approximately 10-15 years, and require a minimum investment commitment from their limited partners. Our private investments are made both directly into funds and through fund of funds structures to ensure broad diversification of management styles and assets across the portfolio. Plan holdings in private equity-like investments are valued using the value reported by the partnership, adjusted for known cash flows and significant events through our reporting date. Values provided by the partnerships are primarily based on analysis of and judgments about the underlying investments. Inputs to these valuations include underlying NAVs, discounted cash flow valuations, comparable market valuations, and may also include adjustments for currency, credit, liquidity and other risks as applicable. The vast majority of these private partnerships provide us with annual audited financial statements including their compliance with fair valuation procedures consistent with applicable accounting standards.

 

Real estate is composed of both public and private holdings. Real estate investments in registered investment companies that trade on an exchange are classified as Level 1 on the fair value hierarchy. Real estate investments in funds measured at fair value on the basis of NAV provided by the fund manager are classified as Level 3. These NAVs are developed with inputs including discounted cash flow, independent appraisal, and market comparable analyses.

 

Other assets include cash and cash equivalents and mark-to-market value of derivatives.

 

The cash value of the trust-owned insurance contract is invested in investment grade publicly traded equity and fixed income securities.

 

Other than hedge funds, private equity-like investments, and real estate, which are discussed above, we determine fair values based on a market approach using quoted market values, significant other observable inputs for identical or comparable assets or liabilities, or discounted cash flow analyses.

 

The fair values of our defined benefit pension plan and retiree health plan assets as of December 31, 2011 by asset category are as follows:

           

 

 

Fair Value Measurements Using

 

 

 

 

 

Asset Class

 

 

 

 

 

Total

 

Quoted Prices in Active Markets for Identical Assets

(Level 1)

 

 

Significant Observable Inputs

(Level 2)

 

 

Significant Unobservable Inputs

(Level 3)

 

Defined Benefit Pension Plans

 

 

 

 

 

Public equity securities 

       U.S.

 

$    454.5

 

$   317.2

 

$   137.3

 

       $

       International

1,462.4

505.9

956.5

 

Fixed income

      Developed markets

 

929.1

 

100.9

 

828.2

 

      Emerging markets

341.5

0.1

341.4

 

Private alternative investments

      Hedge funds

 

2,312.6

 

 

 

1,064.2

 

1,248.4

      Equity-like funds

870.2

 

 

870.2

Real estate

409.2

271.2

 

138.0

Other

406.8

177.7

229.1

 

 Total

$7,186.3

$1,373.0

$3,556.7

               $2,256.6

 

Retiree Health Benefit Plans

 

 

 

 

 

Public equity securities 

     U.S.

 

$    40.9

 

$28.0

 

$      12.9

 

          $

       International

97.1

27.5

69.6

 

Fixed income

      Developed markets

 

55.3

 

 

55.3

 

      Emerging markets

34.6

 

34.6

 

Private alternative investments

      Hedge funds

 

213.1

 

 

107.8

 

105.3

      Equity-like funds

79.9

 

 

79.9

Cash value of trust owned insurance contract

767.9

 

767.9

 

Real estate

27.5

27.5

 

 

Other

22.7

8.6

14.1

 

 Total

$1,339.0

$91.6

$1,062.2

                  $185.2

 

No material transfers between Level 1, Level 2, or Level 3 occurred during the year ended December 31, 2011.

The activity in the Level 3 investments during the year ended December 31, 2011 was as follows:

                     

 

 

 

 

 

 

 

 

 

 

Hedge Funds 

 

Equity-like 

Funds 

 

Real 

Estate 

 

 

Total 

 

 

Defined Benefit Pension Plans 

 

 

 

 

 

 

Beginning balance at January 1, 2011  

$1,241.9 

$  802.9 

$126.5 

$2,171.3 

 

Actual return on plan assets, including
  changes in foreign exchange rates:  

 

 

 

 

 

 

 

Relating to assets still held at the reporting date  

       (8.1) 

    34.4 

    3.9 

     30.2 

 

    Relating to assets sold during the period

     (18.1) 

      0.0 

    0.0 

    (18.1) 

 

Purchases 

     217.7 

   159.1 

   11.5 

    388.3 

 

Sales 

     (25.2) 

       0.0 

    (3.9) 

     (29.1) 

 

Settlements 

    (159.8) 

  (126.2) 

      0.0 

   (286.0) 

 

Ending balance at December 31, 2011 

$1,248.4 

$  870.2 

$138.0 

$2,256.6 

 

 

 

Retiree Health Benefit Plans 

 

 

 

 

 

 

Beginning balance at January 1, 2011 

$   106.6 

$    74.5 

 

$   181.1 

 

Actual return on plan assets, including
  changes in foreign exchange rates:  

 

 

 

 

 

    Relating to assets still held at the reporting date  

         0.5 

       3.3 

 

       3.8 

 

    Relating to assets sold during the period 

       (1.8) 

       0.0 

 

      (1.8) 

 

Purchases

       18.2 

     14.4 

 

      32.6 

 

Sales 

       (2.0) 

       0.0 

 

       (2.0) 

 

Settlements 

     (16.2) 

    (12.3) 

 

      (28.5) 

 

Ending balance at December 31, 2011

$   105.3 

$    79.9 

 

$   185.2 

 

 

 

 

 

 

The fair values of our defined benefit pension plan and retiree health plan assets as of December 31, 2010 by asset category are as follows:

 

 

 

Fair Value Measurements Using

 

 

 

 

 

Asset Class

 

 

 

 

 

Total

 

Quoted Prices in Active Markets for Identical Assets

(Level 1)

 

 

Significant Observable Inputs

(Level 2)

 

 

Significant Unobservable Inputs

(Level 3)

 

Defined Benefit Pension Plans

 

 

 

 

 

Public equity securities 

       U.S.

 

$   589.4

 

$   421.4

 

$   168.0

 

          $

       International

1,868.3

907.1

961.2

 

Fixed income

      Developed markets

 

791.6

 

77.6

 

714.0

 

 

      Emerging markets

336.2

 

336.2

 

Private alternative investments

      Hedge funds

 

2,020.3

 

 

 

778.4

 

1,241.9

      Equity-like funds

812.9

10.0

 

802.9

Real estate

126.5

 

 

126.5

Other

437.8

195.9

241.9

 

 Total

$6,983.0

$1,612.0

$3,199.7

               $2,171.3

 

Retiree Health Benefit Plans

 

 

 

 

 

Public equity securities 

     U.S.

 

$     56.0

 

$     39.7

 

$     16.3

 

       $

       International

131.6

67.8

63.8

 

Fixed income

      Developed markets

 

50.5

 

 

 

50.5

 

 

      Emerging markets

33.9

 

33.9

 

Private alternative investments

      Hedge funds

 

185.2

 

 

78.6

 

106.6

      Equity-like funds

74.5

 

 

74.5

Cash value of trust owned insurance contract

761.7

 

761.7

 

Other

34.3

12.6

21.7

 

 Total

$1,327.7

$   120.1

$1,026.5

              $   181.1

 

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.

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Contingencies
12 Months Ended
Dec. 31, 2011
Contingencies [Abstract]
Contingencies [Text Block]

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.

 

We believe the Hatch-Waxman challenges to Alimta are without merit and expect to prevail in this litigation. However, it is not possible to determine the outcome of this litigation, and accordingly, we can provide no assurance that we will prevail. An unfavorable outcome could have a material adverse impact on our future consolidated results of operations, liquidity, and financial position. We expect a loss of exclusivity for Alimta would result in a rapid and severe decline in future revenues in the relevant market.

 

 

          Strattera: Actavis Elizabeth LLC (Actavis), Apotex Inc. (Apotex), Aurobindo Pharma Ltd. (Aurobindo), Mylan Pharmaceuticals Inc. (Mylan), Sandoz Inc. (Sandoz), Sun Pharmaceutical Industries Limited (Sun Ltd.), and Teva Pharmaceuticals USA, Inc. (Teva USA) each submitted an ANDA seeking permission to market generic versions of Strattera prior to the expiration of our relevant U.S. patent and data-based pediatric exclusivity period (expiring in 2017), and alleging that this patent is invalid. In 2007, we brought a lawsuit against Actavis, Apotex, Aurobindo, Mylan, Sandoz, Sun Ltd., and Teva USA in the U.S. District Court for the District of New Jersey. In August 2010, the court ruled that our patent was invalid; however, in July 2011, the Court of Appeals for the Federal Circuit overturned that decision, upholding the patent. The Federal Circuit Court of Appeals denied the generic manufacturers' petition for rehearing en banc in October 2011, and the deadline for any further appeal has passed. Zydus Pharmaceuticals (Zydus) filed an action in the New Jersey district court in October 2010 seeking a declaratory judgment that it has the right to launch a generic atomoxetine product, based on the district court ruling. We believe that Zydus is subject to the injunction issued by the court of appeals in the Actavis case.

 

Zyprexa Litigation

We are a defendant in approximately 40 Zyprexa product liability lawsuits in the U.S. covering approximately 120 plaintiffs. The lawsuits allege a variety of injuries from the use of Zyprexa, with the majority alleging that the product caused or contributed to diabetes or high blood-glucose levels. The claims seek substantial compensatory and punitive damages and typically accuse us of inadequately testing for and warning about side effects of Zyprexa. Many of the claims also allege that we improperly promoted the drug. Approximately 25 of the lawsuits, covering about 30 plaintiffs, are part of a Multi-District Litigation (MDL) proceeding before The Honorable Jack Weinstein in the Federal District Court for the Eastern District of New York (EDNY) (MDL No. 1596). In October 2011, a jury trial in a California state court was decided in our favor. We are prepared to continue our vigorous defense of Zyprexa in all these lawsuits and claims.

 

We were served with lawsuits filed by 13 states alleging that Zyprexa caused or contributed to diabetes or high blood-glucose levels, and that we improperly promoted the drug. We settled the Zyprexa-related claims of all of these states, incurring pretax charges of $230.0 million in 2009 and $15.0 million in 2008.

 

In 2005 and 2006, four lawsuits were filed in the EDNY purporting to be nationwide class actions on behalf of all consumers and third-party payors, excluding governmental entities, which made or will make payments for their members or insured patients being prescribed Zyprexa. These actions were consolidated into a single lawsuit, brought under certain state consumer-protection statutes, the federal civil Racketeer Influenced and Corrupt Organizations Act, and common law theories, seeking a refund of the cost of Zyprexa, treble damages, punitive damages, and attorneys' fees. As with the product liability suits, these lawsuits allege that we inadequately tested for and warned about side effects of Zyprexa and improperly promoted the drug. In September 2008, Judge Weinstein certified a class consisting of third-party payors, excluding governmental entities and individual consumers, and denied our motion for summary judgment. In September 2010, both decisions were reversed by the Second Circuit Court of Appeals, which found that the case cannot proceed as a class action and entered a judgment in our favor on plaintiffs' overpricing claim. The U.S. Supreme Court denied plaintiffs' petition for certiorari. All remaining claims at issue in these cases have now been resolved.

 

Byetta Litigation

We have been named as a defendant in approximately 120 lawsuits involving approximately 480 plaintiffs, primarily seeking to recover damages for pancreatitis experienced by patients prescribed Byetta. We are aware of approximately 530 additional claimants who have not yet filed suit. Approximately 100 of these lawsuits are filed in California and coordinated in a Los Angeles Superior Court.

 

Other Product Liability Litigation

We have been named as a defendant in numerous other product liability lawsuits involving primarily diethylstilbestrol. These claims are covered by insurance, subject to deductibles and coverage limits.

 

Product Liability Insurance

Because of the nature of pharmaceutical products, it is possible that we could become subject to large numbers of product liability and related claims for other products in the future. In the past several years, we have been unable to obtain product liability insurance due to a very restrictive insurance market. Therefore, for substantially all of our currently marketed products, we have been and expect that we will continue to be completely self-insured for future product liability losses. In addition, there is no assurance that we will be able to fully collect from our insurance carriers in the future.

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Other Comprehensive Income (Loss)
12 Months Ended
Dec. 31, 2011
Other Comprehensive Income (Loss) [Abstract]
Comprehensive Income (Loss) [Text Block]

Note 16: Other Comprehensive Income (Loss)

 

The accumulated balances related to each component of other comprehensive income (loss) were as follows:

 

 

 

 

Foreign Currency

Translation

Gains (Losses)

 

 

 

Unrealized Net Gains (Losses) on Securities

 

Defined Benefit Pension and Retiree Health Benefit Plans

 

 

 

Effective Portion of Cash Flow Hedges

 

 

 

Accumulated Other Comprehensive Loss

Beginning balance at

  January 1, 2011

 

$510.7

 

$128.9

 

$(3,175.8)

 

$(133.9)

 

$(2,670.1)

Other comprehensive
  income (loss)

 

(244.8)

 

(114.1)

 

     (856.4)

 

     26.8

 

  (1,188.5)

Balance at

  December 31, 2011

 

$265.9

 

$14.8

 

$(4,032.2)

 

$(107.1)

 

$(3,858.6)

 

The amounts above are net of income taxes. The income taxes associated with the unrecognized net actuarial losses and prior service costs on our defined benefit pension and retiree health benefit plans (Note 14) were a benefit of $383.8 million for the year ended December 31, 2011. The income taxes associated with the net unrealized losses on securities were a benefit of $64.4 million for the year ended December 31, 2011. The income taxes related to the other components of comprehensive income (loss) were not significant, as income taxes were not provided for foreign currency translation.

 

The unrealized gains (losses) on securities is net of reclassification adjustments of net gains (losses) of $54.7 million, $27.6 million, and $19.0 million, net of tax, for the years ended December 31, 2011, 2010, and 2009, respectively, for net realized gains (losses) on sales of securities included in net income. The effective portion of cash flow hedges is net of reclassification adjustments of $5.8 million, $5.8 million, and $6.7 million, net of tax, for the years ended December 31, 2011, 2010, and 2009, respectively, for interest expense on interest rate swaps designated as cash flow hedges.

 

Generally, the assets and liabilities of foreign operations are translated into U.S. dollars using the current exchange rate. For those operations, changes in exchange rates generally do not affect cash flows; therefore, resulting translation adjustments are made in shareholders' equity rather than in income.

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Other-Net, Expense (Income)
12 Months Ended
Dec. 31, 2011
Other-Net, Expense [Abstract]
Other - Net, Expense (Income) [Text Block]

Note 17: OtherNet, Expense:

Othernet, expense consisted of the following:

 

 

2011

2010

2009

 

 

Interest expense

$186.0

$185.5

$261.3

Interest income

(79.9)

(51.9)

(75.2)

Other (income) expense

72.9

(128.6)

43.4

Othernet, expense

$179.0

$    5.0

$229.5

 

Other expense for the year ended December 31, 2011 primarily consists of the partial impairment on acquired IPR&D assets related to liprotamase and Amyvid (Note 7) partially offset by gains on the disposal of investment securities. For the year ended December 31, 2010, other (income) expense primarily consists of damages recovered from generic pharmaceutical companies related to Zyprexa patent litigation in Germany and gains on the disposal of investment securities.

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Summary of Significant Accounting Policies (Policies)
12 Months Ended
Dec. 31, 2011
Summary of Significant Accounting Policies [Abstract]
Cash and Cash Equivalents, Policy [Policy Text Block]
Inventory, Policy [Policy Text Block]
Investment, Policy [Policy Text Block]
Derivatives, Policy [Policy Text Block]
Goodwill and Intangible Assets, Policy [Policy Text Block]
Property, Plant and Equipment, Policy [Policy Text Block]
Commitments and Contingencies, Policy [Policy Text Block]
Revenue Recognition, Policy [Policy Text Block]
Research and Development Expense, Policy [Policy Text Block]
Income Tax, Policy [Policy Text Block]
Earnings Per Share, Policy [Policy Text Block]
Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block]
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Financial Instruments (Policies)
12 Months Ended
Dec. 31, 2011
Financial Instruments [Abstract]
Description of Derivative Risk Management Policy
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Summary of Significant Accounting Policies (Tables)
12 Months Ended
Dec. 31, 2011
Summary of Significant Accounting Policies [Abstract]
Inventory Disclosure [Text Block]

 

2011

2010

Finished products

$    786.4

$   800.8

Work in process

   1,518.2

  1,714.2

Raw materials and supplies

      205.8

     220.8

 

   2,510.4

  2,735.8

Reduction to LIFO cost

    (210.6)

    (218.1)

Inventories

$2,299.8

$2,517.7

Property, Plant and Equipment Disclosure [Text Block]

 

2011

2010

Land

$   202.5

$    207.8

Buildings

   6,135.7

6,029.3

Equipment

   7,219.9

7,355.7

Construction in progress

   1,036.0

893.8

 

14,594.1

14,486.6

Less accumulated depreciation

(6,833.8)

(6,545.9)

Property and equipment, net

$7,760.3

$7,940.7

Revenue from External Customers by Products and Services [Table Text Block]

 

2011

2010

2009

 

 

 

 

Net product sales

$23,604.8

$22,442.2

$21,171.5

Collaboration and other revenue (Note 4)

       681.7

       633.8

       664.5

Total revenue

$24,286.5

$23,076.0

$21,836.0

Other - Net, Expense (Income) [Text Block]

Note 17: OtherNet, Expense:

Othernet, expense consisted of the following:

 

 

2011

2010

2009

 

 

Interest expense

$186.0

$185.5

$261.3

Interest income

(79.9)

(51.9)

(75.2)

Other (income) expense

72.9

(128.6)

43.4

Othernet, expense

$179.0

$    5.0

$229.5

 

Other expense for the year ended December 31, 2011 primarily consists of the partial impairment on acquired IPR&D assets related to liprotamase and Amyvid (Note 7) partially offset by gains on the disposal of investment securities. For the year ended December 31, 2010, other (income) expense primarily consists of damages recovered from generic pharmaceutical companies related to Zyprexa patent litigation in Germany and gains on the disposal of investment securities.

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Collaborations (Tables)
12 Months Ended
Dec. 31, 2011
Revenue from External Customers by Products and Services [Table Text Block]

 

2011

2010

2009

 

 

 

 

Net product sales

$23,604.8

$22,442.2

$21,171.5

Collaboration and other revenue (Note 4)

       681.7

       633.8

       664.5

Total revenue

$24,286.5

$23,076.0

$21,836.0

Erbitux [Member]
Revenue from External Customers by Products and Services [Table Text Block]

 

 

 

 

 

 

 

 

 

2011 

2010 

 2009 

 

 

 

Net product sales  

   $ 87.6

$71.9

 $92.5 

 

Collaboration and other revenue  

    321.6

  314.2

  298.3

 

Total revenue  

$409.2 

$386.1

 $390.8

 

Exenatide [Member]
Revenue from External Customers by Products and Services [Table Text Block]

 

 

 

 

 

 

 

 

 

2011 

2010 

 2009 

 

 

 

Net product sales  

$179.6

$168.1

 $147.7

 

Collaboration and other revenue  

  243.1

262.5

   300.8

 

Total revenue  

   $422.7

$430.6

$448.5

 

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Asset Impairments, Restructuring, and Other Special Charges (Tables)
12 Months Ended
Dec. 31, 2011
Asset Impairments, Restructuring, and Other Special Charges [Abstract]
Schedule of Other Operating Cost and Expense, by Component [Table Text Block]

 

2011

2010

2009

 

 

   Severance

$251.8

$142.0

$   99.0

   Asset impairments and other special charges

149.6

50.0

363.7

   Product liability and other special charges – legal settlement

-

-

230.0

      Asset impairments, restructuring, and other special charges

$401.4

$192.0

$692.7

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Financial Instruments (Tables)
12 Months Ended
Dec. 31, 2011
Financial Instruments [Abstract]
Schedule of Derivatives Instruments Statements of Financial Performance and Financial Position, Location [Table Text Block]

 

2011

2010

2009

Fair value hedges

 

 

 

  Effect from hedged fixed-rate debt

$259.6

$149.6

$(369.5)

  Effect from interest rate contracts

(259.6)

(149.6)

369.5

 

 

 

 

Cash flow hedges

 

 

 

  Effective portion of losses on interest rate contracts

    reclassified from accumulated other comprehensive loss

 

9.0

 

9.0

 

10.2

 

 

 

 

Net losses on foreign currency exchange contracts not designated as
    hedging instruments

 

97.4

 

12.0

 

82.6

 

 

Fair Value, Assets Measured on Recurring Basis [Table Text Block]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fair Value Measurements Using

 

 

 

 

Description

 

Carrying
Amount

 

 

Amortized
Cost

 

 

Quoted
Prices in

Active
Markets
for

Identical
Assets

(Level 1)

 

 

Significant

Other

Observable Inputs

(Level 2)

 

 

Significant

Unobservable

Inputs

(Level 3)

 

 

Fair

Value

 

 

 

 

 

December 31, 2011

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

   $

5,922.5

 

 

$

5,922.5

 

 

$

5,264.6

 

 

$

657.9

 

 

$

 

 

 

$

5,922.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Short-term investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. government and agencies

 

   $

362.3

 

 

$

362.3

 

 

$

362.3

 

 

$

 

 

 

$

 

 

 

$

362.3

 

Corporate debt securities

 

 

600.7

 

 

 

601.1

 

 

 

 

 

 

 

600.7

 

 

 

 

 

 

 

600.7

 

Other securities

 

 

11.6

 

 

 

11.6

 

 

 

 

 

 

 

11.6

 

 

 

 

 

 

 

11.6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Short-term investments

 

   $

974.6

 

 

$

975.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noncurrent investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. government and agencies

 

   $

908.8

 

 

$

901.3

 

 

$

908.8

 

 

$

 

 

 

$

 

 

 

$

908.8

 

Corporate debt securities

 

 

2,081.3

 

 

 

2,093.3

 

 

 

 

 

 

 

2,081.3

 

 

 

 

 

 

 

2,081.3

 

Mortgage-backed

 

 

443.8

 

 

 

479.1

 

 

 

 

 

 

 

443.8

 

 

 

 

 

 

 

443.8

 

Asset-backed

 

 

245.0

 

 

 

253.2

 

 

 

 

 

 

 

245.0

 

 

 

 

 

 

 

245.0

 

Other securities

 

 

10.0

 

 

 

11.9

 

 

 

 

 

 

 

8.7

 

 

 

1.3

 

 

 

10.0

 

Marketable equity

 

 

180.8

 

 

 

107.5

 

 

 

180.8

 

 

 

 

 

 

 

 

 

 

 

180.8

 

Equity method and other investments (1)

 

 

160.1

 

 

 

160.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments

 

   $

4,029.8

 

 

$

4,006.4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2010

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

   $

5,993.2

 

 

$

5,993.2

 

 

$

2,138.6

 

 

$

3,854.6

 

 

$

 

 

 

$

5,993.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Short-term investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial paper

 

   $

540.8

 

 

$

540.8

 

 

$

 

 

 

$

540.8

 

 

$

 

 

 

$

540.8

 

U.S. government and agencies

 

 

128.9

 

 

 

128.9

 

 

 

128.9

 

 

 

 

 

 

 

 

 

 

 

128.9

 

Corporate debt securities

 

 

63.4

 

 

 

63.9

 

 

 

 

 

 

 

63.4

 

 

 

 

 

 

 

63.4

 

Other securities

 

 

0.7

 

 

 

0.7

 

 

 

 

 

 

 

0.7

 

 

 

 

 

 

 

0.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Short-term investments

 

   $

733.8

 

 

$

734.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noncurrent investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. government and agencies

 

   $

359.2

 

 

$

361.8

 

 

$

359.2

 

 

$

 

 

 

$

 

 

 

$

359.2

 

Corporate debt securities

 

 

367.9

 

 

 

368.9

 

 

 

 

 

 

 

367.9

 

 

 

 

 

 

 

367.9

 

Mortgage-backed

 

 

315.5

 

 

 

350.7

 

 

 

 

 

 

 

315.5

 

 

 

 

 

 

 

315.5

 

Asset-backed

 

 

132.4

 

 

 

140.8

 

 

 

 

 

 

 

132.4

 

 

 

 

 

 

 

132.4

 

Other securities

 

 

6.4

 

 

 

8.3

 

 

 

 

 

 

 

3.3

 

 

 

3.1

 

 

 

6.4

 

Marketable equity

 

 

433.7

 

 

 

182.6

 

 

 

433.7

 

 

 

 

 

 

 

 

 

 

 

433.7

 

Equity method and other investments (1)

 

 

164.4

 

 

 

164.4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments

 

   $

1,779.5

 

 

$

1,577.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fair Value, Liabilities Measured on Recurring Basis [Table Text Block]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fair Value Measurements Using

 

 

 

 

Description

 

Carrying
Amount

 

 

Quoted
Prices in

Active
    Markets    
for

Identical
Assets

(Level 1)

 

 

Significant
Other

Observable Inputs

(Level 2)

 

 

Significant

    Unobservable    

Inputs

(Level 3)

 

 

Fair

Value

 

 

 

 

 

Long-term debt, including current portion

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2011

 

$

(6,981.5)

 

 

$

 

 

 

$

(7,451.5)

 

 

$

 

 

 

$

(7,451.5)

 

December 31, 2010

 

 

(6,788.7)

 

 

 

 

 

 

 

(7,030.0)

 

 

 

 

 

 

 

(7,030.0)

 

Fair Value, by Balance Sheet Grouping [Table Text Block]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fair Value Measurements Using

 

 

 

 

Description

 

Carrying
Amount

 

 

Quoted
Prices in

Active
    Markets    
for

Identical
Assets

(Level 1)

 

 

Significant
Other

Observable Inputs

(Level 2)

 

 

Significant

    Unobservable    

Inputs

(Level 3)

 

 

Fair

Value

 

 

 

 

 

December 31, 2011

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Risk-management instruments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate contracts
designated as hedging instruments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other receivables

 

$

6.1

 

 

$

 

 

 

$

6.1

 

 

$

 

 

 

$

6.1

 

Sundry

 

 

531.7

 

 

 

 

 

 

 

531.7

 

 

 

 

 

 

 

531.7

 

Foreign exchange contracts
not designated as hedging
instruments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other receivables

 

 

16.2

 

 

 

 

 

 

 

16.2

 

 

 

 

 

 

 

16.2

 

Other current liabilities

 

 

(25.9)

 

 

 

 

 

 

 

(25.9)

 

 

 

 

 

 

 

(25.9)

 

                             

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2010

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Risk-management instruments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate contracts designated as hedging instruments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sundry

 

$

278.3

 

 

$

 

 

 

$

278.3

 

 

$

 

 

 

$

278.3

 

Foreign exchange contracts
not designated as hedging instruments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other receivables

 

 

13.7

 

 

 

 

 

 

 

13.7

 

 

 

 

 

 

 

13.7

 

Other current liabilities

 

 

(31.6)

 

 

 

 

 

 

 

(31.6)

 

 

 

 

 

 

 

(31.6)

 

Equity contracts designed as hedging instruments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other current liabilities

 

 

(35.6)

 

 

 

 

 

 

 

(35.6)

 

 

 

 

 

 

 

(35.6)

 

Available-for-sale Securities [Table Text Block]

 

 

 

 

 

 

 

 

 

 

 

2011    

 

 

2010    

 

 

 

 

 

 

 

 

 

 

Unrealized gross gains

 

 

$ 103.0

 

 

 

$  262.6

 

Unrealized gross losses

 

 

     80.0

 

 

 

     61.1

 

Fair value of securities in an unrealized gain position

 

 

2,498.9

 

 

 

1,031.8

 

Fair value of securities in an unrealized loss position

 

 

2,164.4

 

 

 

   758.1

 

Gain (Loss) on Investments [Table Text Block]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    2011    

 

 

    2010    

 

 

    2009    

 

 

 

 

 

 

 

 

 

 

 

 

 

Proceeds from sales

 

$

2,268.3

 

 

$

760.3

 

 

$

1,227.4

 

 

 

 

 

Realized gross gains on sales

 

 

  140.0

 

 

 

110.7

 

 

 

    68.9

 

 

 

 

 

Realized gross losses on sales

 

 

     9.9

 

 

 

   4.8

 

 

 

      6.8

 

 

 

 

 

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Goodwill and Other Intangibles (Tables)
12 Months Ended
Dec. 31, 2011
Goodwill and Other Intangibles [Abstract]
Schedule of Goodwill [Table Text Block]

 

2011

2010

Goodwill

$1,434.7

$1,423.9

Schedule of Intangible Assets and Goodwill [Table Text Block]

 

 

 

 

 

 

 

 

 

2011

2010

 

 

 

Description

Carrying Amount – Gross

 

Accumulated Amortization

Carrying Amount – Net

Carrying Amount – Gross

 

Accumulated Amortization

Carrying Amount –Net

 

 

Finite-lived intangible assets

 

 

 

 

 

 

  Marketed products

$4,624.9

$(1,481.2)

$3,143.7

$3,789.1

$(1,023.4)

$2,765.7

  Other

117.3

(42.5)

74.8

62.5

(31.3)

31.2

Total finite-lived intangible assets

4,742.2

(1,523.7)

3,218.5

3,851.6

(1,054.7)

2,796.9

 

 

 

 

 

 

 

Indefinite-lived intangible assets

 

 

 

 

 

 

  In-process research and
    development

 

474.9

 

0.0

 

474.9

 

598.0

 

0.0

 

598.0

 

 

 

 

 

 

 

Total other intangible assets

$5,217.1

$(1,523.7)

$3,693.4

$4,449.6

$(1,054.7)

$3,394.9

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Borrowings (Tables)
12 Months Ended
Dec. 31, 2011
Borrowings [Abstract]
Schedule of Debt [Table Text Block]

 

2011

2010

3.55 to 7.13 percent notes (due 2012-2037)

$6,387.4

$6,387.4

Other, including capitalized leases

37.6

97.2

Fair value adjustment

556.5

304.1

 

6,981.5

6,788.7

Less current portion

(1,516.8)

(18.2)

Long-term debt

$5,464.7

$6,770.5

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Stock-Based Compensation (Tables)
12 Months Ended
Dec. 31, 2011
Stock-Based Compensation [Abstract]
Schedule of Nonvested Performance-based Units Activity [Table Text Block]

 

Units

Attributable to SVAs

(in thousands)

Outstanding at January 1, 2009

1,903

Granted

1,416

Forfeited or expired

(559)

Outstanding at December 31, 2009

2,760

Granted

1,987

Issued

(365)

Forfeited or expired

(745)

Outstanding at December 31, 2010

3,637

Granted

1,830

Issued

(428)

Forfeited or expired

(740)

Outstanding at December 31, 2011

4,299

Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block]

 

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, 2011

55,507

$69.04

 

 

Exercised

(18)

24.33

 

 

Forfeited or expired

(18,933)

74.56

 

 

Outstanding at December 31, 2011

36,556

66.22

1.8

$1.2

Exercisable at December 31, 2011

36,556

66.22

1.8

1.2

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Shareholders' Equity (Tables)
12 Months Ended
Dec. 31, 2011
Shareholders' Equity [Abstract]
Schedule of Stockholders Equity [Table Text Block]

 

Additional

 

Deferred

 

Common Stock in Treasury

 

Paid-in

Retained

Costs ‑

 

Shares

 

 

 

Capital

Earnings

ESOP

 

(in thousands)

 

Amount

 

 

 

 

 

 

 

 

Balance at January 1, 2009

$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

Net income

 

4,347.7

 

 

 

 

 

Cash dividends declared per
share: $1.96

 

 

(2,182.5)

 

 

 

 

 

Retirement of treasury shares

(0.1)

 

 

 

(1)

 

(0.1)

Issuance of stock under
employee stock plans-net

 

(108.7)

 

 

 

 

(10)

 

 

(1.0)

Stock-based compensation

147.4

 

 

 

 

 

 

ESOP transactions

49.7

 

52.4

 

 

 

 

 

 

 

 

 

 

 

 

Balance at December 31, 2011

$4,886.8

$14,897.8

$0.0

 

853

 

$ 95.3

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Earnings (Loss) Per Share (Tables)
12 Months Ended
Dec. 31, 2011
Earnings Per Share [Abstract]
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

 

2011

2010

2009

 

(Shares in thousands)

 

 

 

 

 

 

Income available to common  shareholders

 

$4,347.7

 

$5,069.5

 

$4,328.8

 

 

 

 

 

 

Basic earnings per share

 

 

 

 

   Weighted-average number of common shares

    outstanding, including incremental shares

 

1,113,923

 

1,105,788

 

1,098,338

 

   Basic earnings per share

$3.90

$4.58

$3.94

 

 

 

 

 

 

Diluted earnings per share

 

 

 

 

   Weighted-average number of common

    shares outstanding

 

1,107,112

 

1,099,310

 

1,094,623

 

   Stock options and other incremental shares

6,855

6,503

3,744

 

   Weighted-average number of common

    shares outstanding - diluted

 

1,113,967

 

1,105,813

 

1,098,367

 

   Diluted earnings per share

$3.90

$4.58

$3.94

 

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Income Taxes (Tables)
12 Months Ended
Dec. 31, 2011
Income Taxes [Abstract]
Schedule of Components of Income Tax Expense (Benefit) [Table Text Block]

 

2011

2010

2009

Current

 

 

 

   Federal

$   671.4

$   376.2

$   45.7

   Foreign

     759.5

     513.9

   772.2

   State

     (22.9)

       23.3

     49.2

      Total current tax expense

1,408.0

     913.4

   867.1

Deferred

 

 

 

   Federal

    (398.5)

     624.4

       82.5

   Foreign

      (34.7)

      (55.2)

       79.8

   State

        27.0

      (26.9)

       (0.4)

      Total deferred tax expense (benefit)

    (406.2)

     542.3

     161.9

Income taxes

$1,001.8

$1,455.7

$1,029.0

Schedule of Deferred Tax Assets and Liabilities [Table Text Block]

 

2011

2010

Deferred tax assets

 

 

   Compensation and benefits

$1,286.5

$   890.4

   Tax credit carryforwards and carrybacks

     695.3

     503.1

   Asset purchases

     428.5

     275.1

   Tax loss carryforwards and carrybacks

     406.1

     414.0

   Intercompany profit in inventories

     277.2

     316.7

   Debt

     214.9

    114.6

   Sale of intangibles

     207.1

    112.8

   Product return reserves

     146.2

      84.0

   Contingencies

       94.5

    106.6

   Other

     301.3

    363.4

      Total gross deferred tax assets

 4,057.6

 3,180.7

   Valuation allowances

  (611.9)

  (473.1)

 

 

 

      Total deferred tax assets

3,445.7

2,707.6

 

 

 

Deferred tax liabilities

 

 

   Unremitted earnings

    (940.2)

   (741.8)

   Intangibles

    (839.9)

   (954.9)

   Inventories

    (489.2)

   (525.6)

   Property and equipment

    (451.0)

   (505.2)

   Financial instruments

    (196.9)

   (160.9)

   Other

        (8.5)

     (19.1)

      Total deferred tax liabilities

(2,925.7)

(2,907.5)

 

 

 

Deferred tax assets (liabilities) - net

$   520.0

$   (199.9)

Schedule of Effective Income Tax Rate Reconciliation [Table Text Block]

 

2011

2010

2009

Income tax at the U.S. federal statutory tax rate

$1,872.3

$2,283.8

$1,875.2

Add (deduct)

 

 

 

   International operations, including Puerto Rico

(796.7)

(823.3)

(741.1)

   U.S. health care reform

62.9

85.1

0.0

   General business credits

(80.8)

(83.2)

(79.4)

   IRS audit conclusion

(85.3)

0.0

(54.4)

   Other

29.4

(6.7)

28.7

Income taxes

$1,001.8

$1,455.7

$1,029.0

Summary of Income Tax Contingencies [Table Text Block]

 

2011

2010

2009

Beginning balance at January 1

$1,619.6

$1,351.2

 $1,223.2

Additions based on tax positions related to the current year

        89.4

     186.2

      179.1

Additions for tax positions of prior years

      390.0

     117.0

      170.4

Reductions for tax positions of prior years 

     (492.3)

     (30.2)

    (128.9)

Lapses of statutes of limitation

         (2.6)

       (7.0)

        (3.3)

Settlements

     (326.3)

       (0.1)

      (95.0)

Changes related to the impact of foreign currency translation

         (3.0)

         2.5

         5.7

Balance at  December 31

$1,274.8

$1,619.6

$1,351.2

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Retirement Benefits (Tables)
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Schedule of Changes in Accumulated Postemployment Benefit Obligations [Table Text Block]
             

 

Defined Benefit

Pension Plans

Retiree Health

Benefit Plans

 

 

2011

2010

2011

2010

 

 

 

 

 

Change in benefit obligation

 

 

 

 

 Benefit obligation at beginning of year

$8,115.0

$7,553.9

$2,088.5

$2,032.8

 Service cost

      236.3

    219.2

        72.4

       56.5

 Interest cost

      447.9

    431.6

      118.0

     121.4

 Actuarial loss

      794.7

    342.2

      110.2

       10.0

 Benefits paid

    (400.1)

  (387.8)

       (77.9)

      (98.0)

 Plan amendments

        10.0

       0.3

           1.1

      (64.2)

 Foreign currency exchange rate changes
    and other adjustments

 

       (12.6)

 

    (44.4)

 

         (3.7)

 

       30.0

 Benefit obligation at end of year

$9,191.2

$8,115.0

$2,308.6

$2,088.5

 

 

 

 

 

Schedule of Changes in Fair Value of Plan Assets [Table Text Block]
             

 

Defined Benefit

Pension Plans

Retiree Health

Benefit Plans

 

 

2011

2010

2011

2010

 

 

 

 

 

Change in plan assets

 

 

 

 

 Fair value of plan assets at

  beginning of year

 

 $6,983.0

 

$6,008.5

 

$1,327.7

 

$1,180.7

 Actual return on plan assets

       209.2

    818.3

       16.6

     152.2

 Employer contribution

       402.4

    563.5

       72.6

       92.8

 Benefits paid

     (400.1)

  (387.8)

      (77.9)

     (98.0)

 Foreign currency exchange rate

  changes and other adjustments

 

         (8.2)

 

    (19.5)

 

          0.0

 

         0.0

 Fair value of plan assets at end of year

$7,186.3

$6,983.0

$1,339.0

$1,327.7

 

 

 

 

 

Schedule of Net Funded Status [Table Text Block]
             

 

Defined Benefit

Pension Plans

Retiree Health

Benefit Plans

 

 

2011

2010

2011

2010

 

 

 

 

 

 Funded status

$(2,004.9)

$(1,132.0)

$  (969.6)

$  (760.8)

 Unrecognized net actuarial loss

    4,857.5

   3,796.6

  1,367.4

   1,235.3

 Unrecognized prior service cost(benefit)

         57.3

        56.1

    (215.1)

    (261.1)

 Net amount recognized

$ 2,909.9

$ 2,720.7

$   182.7

$    213.4

 

 

 

 

 

Schedule of Amounts Recognized in Balance Sheet [Table Text Block]
             

 

Defined Benefit

Pension Plans

Retiree Health

Benefit Plans

 

 

2011

2010

2011

2010

 

 

 

 

 

 Amounts recognized in the consolidated
  balance sheet consisted of

 

 

 

 

   Prepaid expenses and other

$    160.8

$     58.5

$       0.0

$       0.0

   Other current liabilities

       (57.5)

     (54.7)

        (9.3)

       (9.2)

   Accrued retirement benefit

 (2,108.2)

(1,135.8)

   (960.3)

   (751.6)

   Accumulated other comprehensive

    loss before income taxes

 

   4,914.8

 

  3,852.7

 

  1,152.3

 

     974.2

   Net amount recognized

$2,909.9

$2,720.7

$   182.7

$   213.4

 

 

 

 

 

Schedule of Assumptions Used [Table Text Block]
             

 

Defined Benefit

Pension Plans

Retiree Health

Benefit Plans

(Percents)

2011

2010

2009

2011

2010

2009

 

 

 

 

 

 

 

 Weighted-average assumptions

  as of December 31

 

 

 

 

 

 

 

 

  Discount rate for benefit obligation

5.0

5.6

5.9

5.1

5.8

6.0

  Discount rate for net benefit costs

5.6

5.9

6.7

5.8

6.0

6.9

  Rate of compensation increase for benefit
    obligation

 

3.7

 

3.7

 

3.7

 

 

 

 

 

 

  Rate of compensation increase for net
    benefit costs

 

3.7

 

3.7

 

4.1

 

 

 

 

 

 

  Expected return on plan assets for net
    benefit costs

 

8.5

 

8.8

 

8.8

 

8.8

 

9.0

 

9.0

Schedule of Expected Benefit Payments [Table Text Block]

 

2012

2013

2014

2015

2016

2017-2021

 

 

 

 

 

 

 

Defined benefit pension plans

$416.1

$424.2

$437.2

$449.9

$464.2

$2,609.2

 

 

 

 

 

 

 

Retiree health benefit plans-gross

$118.7

$119.1

$123.6

$127.3

$135.2

$790.8

Medicare rebates

  (11.7)

    (9.9)

  (11.0)

  (12.4)

  (13.5)

    (91.7)

Retiree health benefit plans-net

$107.0

$109.2

$112.6

$114.9

$121.7

$  699.1

Schedule of Amounts Recognized in Other Comprehensive Income (Loss) [Table Text Block]

 

Defined Benefit Pension Plans

Retiree Health Benefit Plans

Actuarial loss arising during period

$1,266.0

$221.3

Plan amendments during period

       10.0

      1.1

Amortization of prior service cost (benefit) included in
  net income

 

       (8.6)

 

    42.9

Amortization of net actuarial loss included in net
  income

 

    (200.4)

 

   (88.7)

Foreign currency exchange rate changes

       (4.9)

      1.5

Total other comprehensive loss during period

$1,062.1

$178.1

Schedule of Allocation of Plan Assets [Table Text Block]
           

 

 

Fair Value Measurements Using

 

 

 

 

 

Asset Class

 

 

 

 

 

Total

 

Quoted Prices in Active Markets for Identical Assets

(Level 1)

 

 

Significant Observable Inputs

(Level 2)

 

 

Significant Unobservable Inputs

(Level 3)

 

Defined Benefit Pension Plans

 

 

 

 

 

Public equity securities 

       U.S.

 

$    454.5

 

$   317.2

 

$   137.3

 

       $

       International

1,462.4

505.9

956.5

 

Fixed income

      Developed markets

 

929.1

 

100.9

 

828.2

 

      Emerging markets

341.5

0.1

341.4

 

Private alternative investments

      Hedge funds

 

2,312.6

 

 

 

1,064.2

 

1,248.4

      Equity-like funds

870.2

 

 

870.2

Real estate

409.2

271.2

 

138.0

Other

406.8

177.7

229.1

 

 Total

$7,186.3

$1,373.0

$3,556.7

               $2,256.6

 

Retiree Health Benefit Plans

 

 

 

 

 

Public equity securities 

     U.S.

 

$    40.9

 

$28.0

 

$      12.9

 

          $

       International

97.1

27.5

69.6

 

Fixed income

      Developed markets

 

55.3

 

 

55.3

 

      Emerging markets

34.6

 

34.6

 

Private alternative investments

      Hedge funds

 

213.1

 

 

107.8

 

105.3

      Equity-like funds

79.9

 

 

79.9

Cash value of trust owned insurance contract

767.9

 

767.9

 

Real estate

27.5

27.5

 

 

Other

22.7

8.6

14.1

 

 Total

$1,339.0

$91.6

$1,062.2

                  $185.2

 

 

Fair Value Measurements Using

 

 

 

 

 

Asset Class

 

 

 

 

 

Total

 

Quoted Prices in Active Markets for Identical Assets

(Level 1)

 

 

Significant Observable Inputs

(Level 2)

 

 

Significant Unobservable Inputs

(Level 3)

 

Defined Benefit Pension Plans

 

 

 

 

 

Public equity securities 

       U.S.

 

$   589.4

 

$   421.4

 

$   168.0

 

          $

       International

1,868.3

907.1

961.2

 

Fixed income

      Developed markets

 

791.6

 

77.6

 

714.0

 

 

      Emerging markets

336.2

 

336.2

 

Private alternative investments

      Hedge funds

 

2,020.3

 

 

 

778.4

 

1,241.9

      Equity-like funds

812.9

10.0

 

802.9

Real estate

126.5

 

 

126.5

Other

437.8

195.9

241.9

 

 Total

$6,983.0

$1,612.0

$3,199.7

               $2,171.3

 

Retiree Health Benefit Plans

 

 

 

 

 

Public equity securities 

     U.S.

 

$     56.0

 

$     39.7

 

$     16.3

 

       $

       International

131.6

67.8

63.8

 

Fixed income

      Developed markets

 

50.5

 

 

 

50.5

 

 

      Emerging markets

33.9

 

33.9

 

Private alternative investments

      Hedge funds

 

185.2

 

 

78.6

 

106.6

      Equity-like funds

74.5

 

 

74.5

Cash value of trust owned insurance contract

761.7

 

761.7

 

Other

34.3

12.6

21.7

 

 Total

$1,327.7

$   120.1

$1,026.5

              $   181.1

Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block]
                     

 

 

 

 

 

 

 

 

 

 

Hedge Funds 

 

Equity-like 

Funds 

 

Real 

Estate 

 

 

Total 

 

 

Defined Benefit Pension Plans 

 

 

 

 

 

 

Beginning balance at January 1, 2011  

$1,241.9 

$  802.9 

$126.5 

$2,171.3 

 

Actual return on plan assets, including
  changes in foreign exchange rates:  

 

 

 

 

 

 

 

Relating to assets still held at the reporting date  

       (8.1) 

    34.4 

    3.9 

     30.2 

 

    Relating to assets sold during the period

     (18.1) 

      0.0 

    0.0 

    (18.1) 

 

Purchases 

     217.7 

   159.1 

   11.5 

    388.3 

 

Sales 

     (25.2) 

       0.0 

    (3.9) 

     (29.1) 

 

Settlements 

    (159.8) 

  (126.2) 

      0.0 

   (286.0) 

 

Ending balance at December 31, 2011 

$1,248.4 

$  870.2 

$138.0 

$2,256.6 

 

 

 

Retiree Health Benefit Plans 

 

 

 

 

 

 

Beginning balance at January 1, 2011 

$   106.6 

$    74.5 

 

$   181.1 

 

Actual return on plan assets, including
  changes in foreign exchange rates:  

 

 

 

 

 

    Relating to assets still held at the reporting date  

         0.5 

       3.3 

 

       3.8 

 

    Relating to assets sold during the period 

       (1.8) 

       0.0 

 

      (1.8) 

 

Purchases

       18.2 

     14.4 

 

      32.6 

 

Sales 

       (2.0) 

       0.0 

 

       (2.0) 

 

Settlements 

     (16.2) 

    (12.3) 

 

      (28.5) 

 

Ending balance at December 31, 2011

$   105.3 

$    79.9 

 

$   185.2 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

Pension Plans, Defined Benefit [Member]
Schedule of Net Benefit Costs [Table Text Block]
             

 

Defined Benefit

Pension Plans

Retiree Health

Benefit Plans

 

2011

2010

2009

2011

2010

2009

  Components of net periodic

    benefit cost

 

 

 

 

 

 

      Service cost

$236.3

$219.2

$242.1

$  72.4

$   56.5

$  53.7

      Interest cost

447.9

431.6

417.5

118.0

121.4

119.6

      Expected return on plan assets

(685.9)

(638.2)

(584.9)

(129.4)

(122.6)

(117.9)

      Amortization of prior service         cost(benefit)

 

8.6

 

8.8

 

8.0

 

(42.9)

 

(37.2)

 

(36.0)

      Recognized actuarial loss

200.4

163.0

84.5

88.7

85.0

71.8

      Net periodic benefit cost

$207.3

$184.4

$167.2

$106.8

$103.1

$  91.2

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Other Comprehensive Income (Loss) (Tables)
12 Months Ended
Dec. 31, 2011
Other Comprehensive Income (Loss) [Abstract]
Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block]

 

 

 

 

Foreign Currency

Translation

Gains (Losses)

 

 

 

Unrealized Net Gains (Losses) on Securities

 

Defined Benefit Pension and Retiree Health Benefit Plans

 

 

 

Effective Portion of Cash Flow Hedges

 

 

 

Accumulated Other Comprehensive Loss

Beginning balance at

  January 1, 2011

 

$510.7

 

$128.9

 

$(3,175.8)

 

$(133.9)

 

$(2,670.1)

Other comprehensive
  income (loss)

 

(244.8)

 

(114.1)

 

     (856.4)

 

     26.8

 

  (1,188.5)

Balance at

  December 31, 2011

 

$265.9

 

$14.8

 

$(4,032.2)

 

$(107.1)

 

$(3,858.6)

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Other - Net, Expense (Income) (Tables)
12 Months Ended
Dec. 31, 2011
Other-Net, Expense [Abstract]
Schedule of Other Nonoperating Income (Expense) [Table Text Block]

 

2011

2010

2009

 

 

Interest expense

$186.0

$185.5

$261.3

Interest income

(79.9)

(51.9)

(75.2)

Other (income) expense

72.9

(128.6)

43.4

Othernet, expense

$179.0

$    5.0

$229.5

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Summary of Significant Accounting Policies (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2011
years
Dec. 31, 2010
Dec. 31, 2009
Percentage of LIFO Inventory 45.00%
Finished products $ 786.4 $ 800.8
Work in process 1,518.2 1,714.2
Raw materials and supplies 205.8 220.8
Inventory, Gross, Total 2,510.4 2,735.8
Reduction to LIFO cost (210.6) (218.1)
Inventories 2,299.8 2,517.7
Maturity of Foreign Currency Derivatives 12
Finite-Lived Intangible Assets, Useful Life, Minimum 3
Finite-Lived Intangible Assets, Useful Life, Maximum 20
Land 202.5 207.8
Buildings 6,135.7 6,029.3
Equipment 7,219.9 7,355.7
Construction in progress 1,036 893.8
Property and equipment, gross 14,594.1 14,486.6
Less accumulated depreciation (6,833.8) (6,545.9)
Property and equipment, net 7,760.3 7,940.7
Depreciation 732.4 749.1 813.5
Interest Costs, Capitalized During Period 25.7 26 30.2
Operating Leases, Rent Expense 353.4 339.3 337.8
Net product sales 23,604.8 22,442.2 21,171.5
Collaboration and other revenue 681.7 633.8 664.5
Revenue $ 24,286.5 $ 23,076 $ 21,836
Building [Member]
Property, Plant and Equipment, Useful Life, Minimum 12
Property, Plant and Equipment, Useful Life, Maximum 50
Equipment [Member]
Property, Plant and Equipment, Useful Life, Minimum 3
Property, Plant and Equipment, Useful Life, Maximum 18
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Implementation of New Financial Accounting Pronouncements (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2011
Implementation of New Financial Accounting Pronouncements[Abstract]
New Accounting Pronouncement or Change in Accounting Principle, Effect of Adoption, Quantification $ 178
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Acquisitions (Details) (USD $)
In Millions, unless otherwise specified
0 Months Ended 1 Months Ended 12 Months Ended 1 Months Ended
Jul. 08, 2011
Mar. 31, 2010
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Dec. 31, 2011
Business Acquisition [Member]
Dec. 31, 2010
Business Acquisition [Member]
Jul. 08, 2011
Janssen Pharmaceutica NV (J&J) [Member]
Dec. 20, 2010
Avid Radiopharmaceuticals [Member]
Jul. 20, 2010
Alnara Pharmaceuticals [Member]
May 28, 2010
Animal Health Sligo [Member]
Dec. 31, 2011
Asset Acquiisition [Member]
Dec. 31, 2010
Asset Acquiisition [Member]
Dec. 31, 2009
Asset Acquiisition [Member]
Dec. 31, 2009
InCyte Corporation [Member]
Business Acquisition, Cost of Acquired Entity, Purchase Price, Total $ 307.8 $ 346.1 $ 291.7 $ 148.4
Cash paid for acquisition 286.3 188.7
Business Acquisition, Contingent Consideration, Potential Cash Payment 550 200
Business Acquisition, Contingent Consideration, at Fair Value 59.8 103
Business Acquisition, Products or Other Assets Acquired 50
Business Acquisition, Purchase Price Allocation, Amortizable Intangible Assets 223.5 76.2
Business Acquisition, Purchase Price Allocation, Intangible Assets Not Amortizable 30.9 334 264
Business Acquisition, Purchase Price Allocation, Goodwill 119.6 100.5
Business Acquisition, Purchase Price Allocation, Other Noncurrent Liabilities 116.9 92.4
Business Acquisition, Purchase Price Allocation, Net Tangible Assets 53.4 9.4 19.6 72.2
Acquired in-process research and development 50 388 50 90 90
Acquired Indefinite-lived Intangible Asset, Amount $ 30.9 $ 598 $ 388 $ 50 $ 90
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Collaborations (Details)
1 Months Ended 12 Months Ended 1 Months Ended 12 Months Ended 1 Months Ended 12 Months Ended 1 Months Ended 12 Months Ended 3 Months Ended 12 Months Ended 1 Months Ended 12 Months Ended 1 Months Ended 3 Months Ended 1 Months Ended 12 Months Ended 1 Months Ended 3 Months Ended 1 Months Ended 12 Months Ended 1 Months Ended 12 Months Ended
Mar. 31, 2010
USD ($)
Dec. 31, 2011
USD ($)
Dec. 31, 2010
USD ($)
Dec. 31, 2009
USD ($)
Dec. 31, 2011
Erbitux [Member]
USD ($)
Dec. 31, 2010
Erbitux [Member]
USD ($)
Dec. 31, 2009
Erbitux [Member]
USD ($)
Dec. 31, 2011
Effient [Member]
USD ($)
Dec. 31, 2010
Effient [Member]
USD ($)
Dec. 31, 2009
Effient [Member]
USD ($)
Nov. 30, 2011
Amylin [Member]
USD ($)
Dec. 31, 2011
Exenatide [Member]
USD ($)
Dec. 31, 2010
Exenatide [Member]
USD ($)
Dec. 31, 2009
Exenatide [Member]
USD ($)
Jan. 31, 2011
Boerhringer Ingelheim (BI) [Member]
USD ($)
Nov. 30, 2011
Sales NEW [Member]
Amylin [Member]
Dec. 31, 2011
Sales NEW [Member]
Exenatide [Member]
Nov. 30, 2011
Revenue Share [Member]
Amylin [Member]
USD ($)
Dec. 31, 2011
Gross Margin Share [Member]
Exenatide [Member]
Sep. 30, 2010
Profit and Development and Marketing Share [Member]
Effient [Member]
Dec. 31, 2011
Selling and Marketing Expense [Member]
Necitumumab [Member]
Mar. 31, 2010
Prepaid Selling and Marketing Expense [Member]
Duloxetine BI [Member]
USD ($)
Dec. 31, 2011
Royalty Payments Received [Member]
Solanezumab [Member]
USD ($)
Dec. 31, 2011
Research and Development Exp [Member]
Necitumumab [Member]
Dec. 31, 2011
Research and Development and Marketing and Selling Expense [Member]
Exenatide [Member]
Dec. 31, 2011
Milestone Payments [Member]
Necitumumab [Member]
USD ($)
Nov. 30, 2011
Milestone Payments [Member]
Amylin [Member]
USD ($)
Sep. 30, 2011
Milestone Payments [Member]
Solanezumab [Member]
USD ($)
Jan. 31, 2011
Milestone Payments [Member]
BI compounds [Member]
EUR (€)
Dec. 31, 2011
Milestone Payments [Member]
BI compounds [Member]
USD ($)
Jan. 31, 2011
Milestone Payments [Member]
LLY compounds [Member]
USD ($)
Jan. 31, 2011
Milestone Payments [Member]
LLY optional compound [Member]
USD ($)
Jun. 30, 2011
Loan Commitment [Member]
Exenatide Once Weekly [Member]
USD ($)
Nov. 30, 2011
United States [Member]
Revenue Share [Member]
Amylin [Member]
Dec. 31, 2011
United States [Member]
Research and Development Exp [Member]
Necitumumab [Member]
Nov. 30, 2011
Outside the United States [Member]
Revenue Share [Member]
Amylin [Member]
Dec. 31, 2011
Outside the United States [Member]
Research and Development Exp [Member]
Necitumumab [Member]
Net product sales $ 23,604,800,000 $ 22,442,200,000 $ 21,171,500,000 $ 87,600,000 $ 71,900,000 $ 92,500,000 $ 302,500,000 $ 115,000,000 $ 27,000,000 $ 179,600,000 $ 168,100,000 $ 147,700,000
Collaboration and other revenue 681,700,000 633,800,000 664,500,000 321,600,000 314,200,000 298,300,000 243,100,000 262,500,000 300,800,000
Revenue 24,286,500,000 23,076,000,000 21,836,000,000 409,200,000 386,100,000 390,800,000 422,700,000 430,600,000 448,500,000
Research and development 5,020,800,000 4,884,200,000 4,326,500,000
Collaborative Arrangement, Income Statement Classification and Amounts 219,200,000 174,500,000 319,200,000
Collaborative Arrangement, Rights and Obligations 250,000,000 1,200,000,000 400,000,000 8 250,000,000 150,000,000 70,000,000 300,000,000 478,700,000 650,000,000 525,000,000 165,000,000
Collaborative Arrangement, Rights and Obligations Percent 15.00% 100.00% 9.50% 50.00% 50.00% 50.00% 45.00% 50.00% 65.00% 45.00% 35.00% 72.50%
Acquired in-process research and development $ 50,000,000 $ 388,000,000 $ 50,000,000 $ 90,000,000 $ 388,000,000
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Asset Impairments, Restructuring, and Other Special Charges (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Severance Costs $ 251.8 $ 142 $ 99
Asset Impairment Charges 149.6 50 363.7
Product Liability Accrual, Period Expense 230
Restructuring, Settlement and Impairment Provisions, Total 401.4 192 692.7
Tippecanoe Lab [Member]
Severance Costs 61.1
Asset Impairment Charges 363.7
Xigris [Member]
Asset Impairment Charges 85
Zyprexa [Member]
Product Liability Accrual, Period Expense 230
Leases [Member]
Asset Impairment Charges $ 56.1 $ 50
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Financial Instruments (Details)
12 Months Ended
Dec. 31, 2011
USD ($)
Dec. 31, 2010
USD ($)
Dec. 31, 2009
USD ($)
Dec. 31, 2011
Hedged Fixed-Rate Debt [Member]
USD ($)
Dec. 31, 2010
Hedged Fixed-Rate Debt [Member]
USD ($)
Dec. 31, 2009
Hedged Fixed-Rate Debt [Member]
USD ($)
Dec. 31, 2011
Equity Contract [Member]
USD ($)
Dec. 31, 2010
Equity Contract [Member]
USD ($)
Dec. 31, 2009
Equity Contract [Member]
USD ($)
Dec. 31, 2011
Interest Rate Contract [Member]
USD ($)
Dec. 31, 2010
Interest Rate Contract [Member]
USD ($)
Dec. 31, 2009
Interest Rate Contract [Member]
USD ($)
Dec. 31, 2011
Carrying (Reported) Amount, Fair Value Disclosure [Member]
USD ($)
Dec. 31, 2010
Carrying (Reported) Amount, Fair Value Disclosure [Member]
USD ($)
Dec. 31, 2010
Carrying (Reported) Amount, Fair Value Disclosure [Member]
Equity Contract [Member]
Other Liabilities [Member]
USD ($)
Dec. 31, 2011
Carrying (Reported) Amount, Fair Value Disclosure [Member]
Interest Rate Contract [Member]
Other Assets [Member]
USD ($)
Dec. 31, 2010
Carrying (Reported) Amount, Fair Value Disclosure [Member]
Interest Rate Contract [Member]
Other Assets [Member]
USD ($)
Dec. 31, 2011
Carrying (Reported) Amount, Fair Value Disclosure [Member]
Foreign Exchange Contract [Member]
Other Assets [Member]
USD ($)
Dec. 31, 2010
Carrying (Reported) Amount, Fair Value Disclosure [Member]
Foreign Exchange Contract [Member]
Other Assets [Member]
USD ($)
Dec. 31, 2011
Carrying (Reported) Amount, Fair Value Disclosure [Member]
Foreign Exchange Contract [Member]
Other Liabilities [Member]
USD ($)
Dec. 31, 2010
Carrying (Reported) Amount, Fair Value Disclosure [Member]
Foreign Exchange Contract [Member]
Other Liabilities [Member]
USD ($)
Dec. 31, 2011
Available-for-Sale Securities, Amortized Cost [Member]
USD ($)
Dec. 31, 2010
Available-for-Sale Securities, Amortized Cost [Member]
USD ($)
Dec. 31, 2011
Fair Value, Inputs, Level 1 [Member]
USD ($)
Dec. 31, 2010
Fair Value, Inputs, Level 1 [Member]
USD ($)
Dec. 31, 2011
Fair Value, Inputs, Level 2 [Member]
USD ($)
Dec. 31, 2010
Fair Value, Inputs, Level 2 [Member]
USD ($)
Dec. 31, 2010
Fair Value, Inputs, Level 2 [Member]
Equity Contract [Member]
Other Liabilities [Member]
USD ($)
Dec. 31, 2011
Fair Value, Inputs, Level 2 [Member]
Interest Rate Contract [Member]
Other Assets [Member]
USD ($)
Dec. 31, 2010
Fair Value, Inputs, Level 2 [Member]
Interest Rate Contract [Member]
Other Assets [Member]
USD ($)
Dec. 31, 2011
Fair Value, Inputs, Level 2 [Member]
Foreign Exchange Contract [Member]
Other Assets [Member]
USD ($)
Dec. 31, 2010
Fair Value, Inputs, Level 2 [Member]
Foreign Exchange Contract [Member]
Other Assets [Member]
USD ($)
Dec. 31, 2011
Fair Value, Inputs, Level 2 [Member]
Foreign Exchange Contract [Member]
Other Liabilities [Member]
USD ($)
Dec. 31, 2010
Fair Value, Inputs, Level 2 [Member]
Foreign Exchange Contract [Member]
Other Liabilities [Member]
USD ($)
Dec. 31, 2011
Estimate of Fair Value, Fair Value Disclosure [Member]
USD ($)
Dec. 31, 2010
Estimate of Fair Value, Fair Value Disclosure [Member]
USD ($)
Dec. 31, 2010
Estimate of Fair Value, Fair Value Disclosure [Member]
Equity Contract [Member]
Other Liabilities [Member]
USD ($)
Dec. 31, 2011
Estimate of Fair Value, Fair Value Disclosure [Member]
Interest Rate Contract [Member]
Other Assets [Member]
USD ($)
Dec. 31, 2010
Estimate of Fair Value, Fair Value Disclosure [Member]
Interest Rate Contract [Member]
Other Assets [Member]
USD ($)
Dec. 31, 2011
Estimate of Fair Value, Fair Value Disclosure [Member]
Foreign Exchange Contract [Member]
Other Assets [Member]
USD ($)
Dec. 31, 2010
Estimate of Fair Value, Fair Value Disclosure [Member]
Foreign Exchange Contract [Member]
Other Assets [Member]
USD ($)
Dec. 31, 2011
Estimate of Fair Value, Fair Value Disclosure [Member]
Foreign Exchange Contract [Member]
Other Liabilities [Member]
USD ($)
Dec. 31, 2010
Estimate of Fair Value, Fair Value Disclosure [Member]
Foreign Exchange Contract [Member]
Other Liabilities [Member]
USD ($)
Dec. 31, 2011
Corporate Debt Securities [Member]
Carrying (Reported) Amount, Fair Value Disclosure [Member]
USD ($)
Dec. 31, 2010
Corporate Debt Securities [Member]
Carrying (Reported) Amount, Fair Value Disclosure [Member]
USD ($)
Dec. 31, 2011
Corporate Debt Securities [Member]
Available-for-Sale Securities, Amortized Cost [Member]
USD ($)
Dec. 31, 2010
Corporate Debt Securities [Member]
Available-for-Sale Securities, Amortized Cost [Member]
USD ($)
Dec. 31, 2011
Corporate Debt Securities [Member]
Fair Value, Inputs, Level 2 [Member]
USD ($)
Dec. 31, 2010
Corporate Debt Securities [Member]
Fair Value, Inputs, Level 2 [Member]
USD ($)
Dec. 31, 2011
Corporate Debt Securities [Member]
Estimate of Fair Value, Fair Value Disclosure [Member]
USD ($)
Dec. 31, 2010
Corporate Debt Securities [Member]
Estimate of Fair Value, Fair Value Disclosure [Member]
USD ($)
Dec. 31, 2011
US Government Agencies Debt Securities [Member]
Carrying (Reported) Amount, Fair Value Disclosure [Member]
USD ($)
Dec. 31, 2010
US Government Agencies Debt Securities [Member]
Carrying (Reported) Amount, Fair Value Disclosure [Member]
USD ($)
Dec. 31, 2011
US Government Agencies Debt Securities [Member]
Available-for-Sale Securities, Amortized Cost [Member]
USD ($)
Dec. 31, 2010
US Government Agencies Debt Securities [Member]
Available-for-Sale Securities, Amortized Cost [Member]
USD ($)
Dec. 31, 2011
US Government Agencies Debt Securities [Member]
Fair Value, Inputs, Level 1 [Member]
USD ($)
Dec. 31, 2010
US Government Agencies Debt Securities [Member]
Fair Value, Inputs, Level 1 [Member]
USD ($)
Dec. 31, 2011
US Government Agencies Debt Securities [Member]
Estimate of Fair Value, Fair Value Disclosure [Member]
USD ($)
Dec. 31, 2010
US Government Agencies Debt Securities [Member]
Estimate of Fair Value, Fair Value Disclosure [Member]
USD ($)
Dec. 31, 2011
Other Debt Obligations [Member]
Carrying (Reported) Amount, Fair Value Disclosure [Member]
USD ($)
Dec. 31, 2010
Other Debt Obligations [Member]
Carrying (Reported) Amount, Fair Value Disclosure [Member]
USD ($)
Dec. 31, 2011
Other Debt Obligations [Member]
Available-for-Sale Securities, Amortized Cost [Member]
USD ($)
Dec. 31, 2010
Other Debt Obligations [Member]
Available-for-Sale Securities, Amortized Cost [Member]
USD ($)
Dec. 31, 2011
Other Debt Obligations [Member]
Fair Value, Inputs, Level 2 [Member]
USD ($)
Dec. 31, 2010
Other Debt Obligations [Member]
Fair Value, Inputs, Level 2 [Member]
USD ($)
Dec. 31, 2011
Other Debt Obligations [Member]
Fair Value, Inputs, Level 3 [Member]
USD ($)
Dec. 31, 2010
Other Debt Obligations [Member]
Fair Value, Inputs, Level 3 [Member]
USD ($)
Dec. 31, 2011
Other Debt Obligations [Member]
Estimate of Fair Value, Fair Value Disclosure [Member]
USD ($)
Dec. 31, 2010
Other Debt Obligations [Member]
Estimate of Fair Value, Fair Value Disclosure [Member]
USD ($)
Dec. 31, 2011
Collateralized Mortgage Backed Securities [Member]
Carrying (Reported) Amount, Fair Value Disclosure [Member]
USD ($)
Dec. 31, 2010
Collateralized Mortgage Backed Securities [Member]
Carrying (Reported) Amount, Fair Value Disclosure [Member]
USD ($)
Dec. 31, 2011
Collateralized Mortgage Backed Securities [Member]
Available-for-Sale Securities, Amortized Cost [Member]
USD ($)
Dec. 31, 2010
Collateralized Mortgage Backed Securities [Member]
Available-for-Sale Securities, Amortized Cost [Member]
USD ($)
Dec. 31, 2011
Collateralized Mortgage Backed Securities [Member]
Fair Value, Inputs, Level 2 [Member]
USD ($)
Dec. 31, 2010
Collateralized Mortgage Backed Securities [Member]
Fair Value, Inputs, Level 2 [Member]
USD ($)
Dec. 31, 2011
Collateralized Mortgage Backed Securities [Member]
Estimate of Fair Value, Fair Value Disclosure [Member]
USD ($)
Dec. 31, 2010
Collateralized Mortgage Backed Securities [Member]
Estimate of Fair Value, Fair Value Disclosure [Member]
USD ($)
Dec. 31, 2011
Asset-backed Securities [Member]
Carrying (Reported) Amount, Fair Value Disclosure [Member]
USD ($)
Dec. 31, 2010
Asset-backed Securities [Member]
Carrying (Reported) Amount, Fair Value Disclosure [Member]
USD ($)
Dec. 31, 2011
Asset-backed Securities [Member]
Available-for-Sale Securities, Amortized Cost [Member]
USD ($)
Dec. 31, 2010
Asset-backed Securities [Member]
Available-for-Sale Securities, Amortized Cost [Member]
USD ($)
Dec. 31, 2011
Asset-backed Securities [Member]
Fair Value, Inputs, Level 2 [Member]
USD ($)
Dec. 31, 2010
Asset-backed Securities [Member]
Fair Value, Inputs, Level 2 [Member]
USD ($)
Dec. 31, 2011
Asset-backed Securities [Member]
Estimate of Fair Value, Fair Value Disclosure [Member]
USD ($)
Dec. 31, 2010
Asset-backed Securities [Member]
Estimate of Fair Value, Fair Value Disclosure [Member]
USD ($)
Dec. 31, 2011
Equity Securities, US [Member]
Carrying (Reported) Amount, Fair Value Disclosure [Member]
USD ($)
Dec. 31, 2010
Equity Securities, US [Member]
Carrying (Reported) Amount, Fair Value Disclosure [Member]
USD ($)
Dec. 31, 2011
Equity Securities, US [Member]
Available-for-Sale Securities, Amortized Cost [Member]
USD ($)
Dec. 31, 2010
Equity Securities, US [Member]
Available-for-Sale Securities, Amortized Cost [Member]
USD ($)
Dec. 31, 2011
Equity Securities, US [Member]
Fair Value, Inputs, Level 1 [Member]
USD ($)
Dec. 31, 2010
Equity Securities, US [Member]
Fair Value, Inputs, Level 1 [Member]
USD ($)
Dec. 31, 2011
Equity Securities, US [Member]
Estimate of Fair Value, Fair Value Disclosure [Member]
USD ($)
Dec. 31, 2010
Equity Securities, US [Member]
Estimate of Fair Value, Fair Value Disclosure [Member]
USD ($)
Dec. 31, 2011
Equity Method and Other Investments [Member]
Carrying (Reported) Amount, Fair Value Disclosure [Member]
USD ($)
Dec. 31, 2010
Equity Method and Other Investments [Member]
Carrying (Reported) Amount, Fair Value Disclosure [Member]
USD ($)
Dec. 31, 2011
Equity Method and Other Investments [Member]
Available-for-Sale Securities, Amortized Cost [Member]
USD ($)
Dec. 31, 2010
Equity Method and Other Investments [Member]
Available-for-Sale Securities, Amortized Cost [Member]
USD ($)
Dec. 31, 2011
Buy British pound Sell euro [Member]
EUR (€)
Dec. 31, 2011
Buy British pound Sell euro [Member]
GBP (£)
Dec. 31, 2011
Buy euro Sell US dollar [Member]
USD ($)
Dec. 31, 2011
Buy euro Sell US dollar [Member]
EUR (€)
Cash and Cash Equivalents, Fair Value Disclosure $ 5,922,500,000 $ 5,993,200,000 $ 5,922,500,000 $ 5,993,200,000 $ 5,264,600,000 $ 2,138,600,000 $ 657,900,000 $ 3,854,600,000 $ 5,922,500,000 $ 5,993,200,000
Commercial Paper, at Carrying Value 540,800,000 540,800,000 540,800,000 540,800,000
Long-term Debt (6,981,500,000) (6,788,700,000) (6,981,500,000) (6,788,700,000) (7,451,500,000) (7,030,000,000) (7,451,500,000) (7,030,000,000)
Derivative Assets, Current 6,100,000 16,200,000 13,700,000 6,100,000 16,200,000 13,700,000 6,100,000 16,200,000 13,700,000
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Other, Percentage of Nonperforming Assets 90.00%
Notional Amount of Foreign Currency Derivative Purchase Contracts 494,300,000 1,610,000,000
Notional Amount of Foreign Currency Derivative Sale Contracts 583,400,000 2,110,000,000
Maximum Remaining Maturity of Foreign Currency Derivatives 30
Long-term Debt, Percentage Bearing Fixed Interest, Percentage Rate 90.00%
Description of Derivative Activity Volume Percent 70.00%
Change in Unrealized Gain (Loss) on Fair Value Hedging Instruments 259,600,000 149,600,000 (369,500,000) (259,600,000) (149,600,000) 369,500,000
Interest Rate Cash Flow Hedge Gain (Loss) to be Reclassified During Next 12 Months, Net 9,000,000
Derivative Instruments, Loss Reclassified from Accumulated OCI into Income, Effective Portion 9,000,000 9,000,000 10,200,000
Derivative Instruments, Gain (Loss) Recognized in Income, Net 97,400,000 12,000,000 82,600,000
Derivative Instruments, Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion, Net 35,600,000 (35,600,000) 0 0 0 38,000,000
Derivative Assets, Noncurrent 531,700,000 278,300,000 531,700,000 278,300,000 531,700,000 278,300,000
Derivative Liabilities, Current 35,600,000 25,900,000 31,600,000 35,600,000 25,900,000 31,600,000 35,600,000 25,900,000 31,600,000
Other Liabilities, Fair Value Disclosure 121,600,000 163,500,000
Available-for-sale Securities, Debt Maturities, after One Through Five Years, Fair Value 4,030,000,000
Available-for-sale Securities, Gross Unrealized Gains 103,000,000 262,600,000
Available-for-sale Securities, Gross Unrealized Losses 80,000,000 61,100,000
Available-for-sale Securities, Continuous Unrealized Gain Position, Fair Value 2,498,900,000 1,031,800,000
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value 2,164,400,000 758,100,000
Other than Temporary Impairment Losses, Investments 26,800,000 12,000,000 22,400,000
Other Comprehensive Income (Loss), Unrealized Holding Gain (Loss) on Securities Arising During Period, Net of Tax 114,100,000 53,500,000 186,600,000
Proceeds from Sale and Maturity of Available-for-sale Securities 2,268,300,000 760,300,000 1,227,400,000
Available-for-sale Securities, Gross Realized Gains 140,000,000 110,700,000 68,900,000
Available-for-sale Securities, Gross Realized Losses 9,900,000 4,800,000 6,800,000
Available-for-sale Securities, Current [Abstract]
Available-for-sale Securities, Debt Securities, Current 600,700,000 63,400,000 601,100,000 63,900,000 600,700,000 63,400,000 600,700,000 63,400,000 362,300,000 128,900,000 362,300,000 128,900,000 362,300,000 128,900,000 362,300,000 128,900,000 11,600,000 700,000 11,600,000 700,000 11,600,000 700,000 11,600,000 700,000
Available-for-sale Securities, Current, Total 974,600,000 733,800,000 975,000,000 734,300,000
Available-for-sale Securities, Noncurrent [Abstract]
Available-for-sale Securities, Debt Securities, Noncurrent 2,081,300,000 367,900,000 2,093,300,000 368,900,000 2,081,300,000 367,900,000 2,081,300,000 367,900,000 908,800,000 359,200,000 901,300,000 361,800,000 908,800,000 359,200,000 908,800,000 359,200,000 10,000,000 6,400,000 11,900,000 8,300,000 8,700,000 3,300,000 1,300,000 3,100,000 10,000,000 6,400,000 443,800,000 315,500,000 479,100,000 350,700,000 443,800,000 315,500,000 443,800,000 315,500,000 245,000,000 132,400,000 253,200,000 140,800,000 245,000,000 132,400,000 245,000,000 132,400,000
Available-for-sale Securities, Equity Securities, Noncurrent 180,800,000 433,700,000 107,500,000 182,600,000 180,800,000 433,700,000 180,800,000 433,700,000
Other Long-term Investments 160,100,000 164,400,000 160,100,000 164,400,000
Available-for-sale Securities, Noncurrent, Total $ 4,029,800,000 $ 1,779,500,000 $ 4,006,400,000 $ 1,577,500,000
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Goodwill and Other Intangibles (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2011
years
Dec. 31, 2010
Dec. 31, 2009
Goodwill $ 1,434.7 $ 1,423.9
Finite-Lived Intangible Assets, Weighted-Average Useful Life 9
Finite-Lived Intangible Assets, Amortization Expense 469 385.7 277
Future Amortization Expense, Year One 530
Future Amortization Expense, Year Two 460
Future Amortization Expense, Year Three 410
Future Amortization Expense, Year Four 380
Future Amortization Expense, Year Five 330
Impairment charges, indefinite lived intangibles 151.5 0 0
In-process Research and Development [Member]
Intangible Assets, Gross 474.9 598
Intangible Assets, Accumulated Amortization and Other 0 0
Intangible Assets, Net 474.9 598
Other Intangible Assets (excluding goodwill), Total [Member]
Intangible Assets, Gross 5,217.1 4,449.6
Intangible Assets, Accumulated Amortization and Other 1,523.7 1,054.7
Intangible Assets, Net 3,693.4 3,394.9
Developed Technology Rights [Member]
Intangible Assets, Gross 4,624.9 3,789.1
Intangible Assets, Accumulated Amortization and Other 1,481.2 1,023.4
Intangible Assets, Net 3,143.7 2,765.7
Other Intangible Assets [Member]
Intangible Assets, Gross 117.3 62.5
Intangible Assets, Accumulated Amortization and Other 42.5 31.3
Intangible Assets, Net 74.8 31.2
Finite-Lived Intangible Assets, Total [Member]
Intangible Assets, Gross 4,742.2 3,851.6
Intangible Assets, Accumulated Amortization and Other 1,523.7 1,054.7
Intangible Assets, Net $ 3,218.5 $ 2,796.9
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Borrowings (Details) (USD $)
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Sep. 30, 2010
Mar. 31, 2009
Fixed-Rate Notes [Member]
Dec. 31, 2010
ESOP debentures, 6.55% [Member]
Notes Payable $ 6,387,400,000 $ 6,387,400,000 $ 2,400,000,000
Other Notes Payable 37,600,000 97,200,000 63,700,000
Long-term Debt, Fair Value Adjustment 556,500,000 304,100,000
Long-term Debt, Total 6,981,500,000 6,788,700,000
Long-term Debt, Current Maturities (1,516,800,000) (18,200,000)
Long-term debt 5,464,700,000 6,770,500,000
Short-term Bank Loans and Notes Payable 5,500,000 137,800,000 125,000,000
Description of Derivative Activity Volume Percent 70.00%
Debt Instrument, Interest Rate, Stated Percentage 6.55%
Long-term Debt, Maturities, Repayments of Principal in Next Twelve Months 1,510,000,000
Long-term Debt, Maturities, Repayments of Principal in Year Two 10,200,000
Long-term Debt, Maturities, Repayments of Principal in Year Three 1,010,000,000
Long-term Debt, Maturities, Repayments of Principal in Year Four 5,300,000
Long-term Debt, Maturities, Repayments of Principal in Year Five 201,200,000
Line of Credit Facility, Remaining Borrowing Capacity 1,240,000,000
Line of Credit Facility, Collateral, Amount 1,200,000,000
Interest Paid, Net $ 167,400,000 $ 176,300,000 $ 205,900,000
Debt Instrument, Interest Rate, Effective Percentage 3.00% 2.87%
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Stock-Based Compensation (Details) (USD $)
In Millions, except Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2012
Dec. 31, 2011
months
Dec. 31, 2010
Dec. 31, 2009
Dec. 31, 2008
Allocated Share-based Compensation Expense $ 147.4 $ 231 $ 368.5
Employee Service Share-based Compensation, Tax Benefit from Compensation Expense 51.6 80.8 128.9
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant 93,000,000
Share-based Compensation Arrangement by Share-based Payment Award, Shares Issued in Period 3,900,000 3,800,000 2,800,000
Share Based Compensation Arrangement by Share-based Payment Award, Expected Shares To Be Issued 1,600,000
Proceeds from Stock Options Exercised 0.4 0.1 0.2
Performance Awards, General [Member]
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized 16.7
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized, Period for Recognition 12
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value $ 31.9 $ 30.88
Performance Awards, One Year [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value $ 36.17
Performance Awards, Two Year [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value $ 34.12
Shareholder Value Awards [Member]
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized 45.9
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized, Period for Recognition 20
Share Based Compensation Arrangement by Share-based Payment Award, Expected Shares To Be Issued 1,000,000
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value $ 28.33 $ 25.97 $ 33.97
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate 4.90% 4.50% 4.00%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate, Maximum 1.36% 1.36% 1.48%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate, Minimum 0.20% 0.10% 0.44%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate, Minimum 27.61% 28.00% 24.34%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate, Maximum 29.10% 28.69% 24.92%
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number 4,299,000 3,637,000 2,760,000 1,903,000
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period 1,830,000 1,987,000 1,416,000
Share-based Compensation Arrangement by Share-based Payment Award, Equity Converted in Period (428,000) (365,000)
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period (740,000) (745,000) (559,000)
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized 5,600,000
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period three
Restricted Stock Unit [Member]
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized 52
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized, Period for Recognition 21
Share-based Compensation Arrangement by Share-based Payment Award, Shares Issued in Period 200,000 200,000
Share Based Compensation Arrangement by Share-based Payment Award, Expected Shares To Be Issued 300,000
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value $ 35.8 $ 34.78 $ 38.12
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period 1,500,000 1,500,000 500,000
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period three
Stock Option Program [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period three
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Date 10
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number 36,556,000 55,507,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price $ 66.22 $ 69.04
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period (18,000)
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Weighted Average Exercise Price $ 24.33
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures and Expirations in Period (18,933,000)
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures and Expirations in Period, Weighted Average Exercise Price $ 74.56
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term 1.8
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Intrinsic Value 1.2
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number 36,556,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price $ 66.22
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Remaining Contractual Term 1.8
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Intrinsic Value 1.2
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Total Intrinsic Value 0.2 0.1 0.3
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Total Fair Value $ 68.5
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Shareholders' Equity (Details) (USD $)
12 Months Ended 12 Months Ended 12 Months Ended 12 Months Ended 12 Months Ended 12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Dec. 31, 2000
Dec. 31, 2006
Dec. 31, 2011
Additional Paid-in Capital [Member]
Dec. 31, 2010
Additional Paid-in Capital [Member]
Dec. 31, 2009
Additional Paid-in Capital [Member]
Dec. 31, 2008
Additional Paid-in Capital [Member]
Dec. 31, 2011
Retained Earnings [Member]
Dec. 31, 2010
Retained Earnings [Member]
Dec. 31, 2009
Retained Earnings [Member]
Dec. 31, 2008
Retained Earnings [Member]
Dec. 31, 2011
Deferred Costs, ESOP [Member]
Dec. 31, 2010
Deferred Costs, ESOP [Member]
Dec. 31, 2009
Deferred Costs, ESOP [Member]
Dec. 31, 2008
Deferred Costs, ESOP [Member]
Dec. 31, 2011
Treasury Stock [Member]
Dec. 31, 2010
Treasury Stock [Member]
Dec. 31, 2009
Treasury Stock [Member]
Dec. 31, 2008
Treasury Stock [Member]
Dec. 31, 2011
Treasury Stock, Value [Member]
Dec. 31, 2010
Treasury Stock, Value [Member]
Dec. 31, 2009
Treasury Stock, Value [Member]
Dec. 31, 2008
Treasury Stock, Value [Member]
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest $ 13,535,600,000 $ 12,412,800,000 $ 4,886,800,000 $ 4,798,500,000 $ 4,635,600,000 $ 3,976,600,000 $ 14,897,800,000 $ 12,732,600,000 $ 9,830,400,000 $ 7,654,900,000 $ 0 $ (52,400,000) $ (77,400,000) $ (86,300,000) $ 95,300,000 $ 96,400,000 $ 98,500,000 $ 99,200,000
Common stock shares in treasury, shares in thousands 853,000 864,000 853,000 864,000 882,000 889,000
Net income 4,347,700,000 5,069,500,000 4,328,800,000 4,347,700,000 5,069,500,000 4,328,800,000
Dividends, Common Stock, Cash (2,182,500,000) (2,167,300,000) (2,153,300,000)
Common Stock, Dividends, Per Share, Declared $ 1.96 $ 1.96 $ 1.96
Treasury Stock, Retired, Cost Method, Amount (100,000) (1,000,000) (3,300,000) (100,000) (1,000,000) (3,300,000)
Treasury Stock, Shares, Retired (1,000) (28,000) (132,000)
Stock Issued During Period, Value, Employee Benefit Plan (108,700,000) (87,600,000) (85,000,000) (1,000,000) (1,100,000) 2,600,000
Stock Issued During Period, Shares, Employee Benefit Plan (10,000) 10,000 125,000
Stock Granted During Period, Value, Share-based Compensation, Net of Forfeitures 147,400,000 231,000,000 368,500,000
Employee Stock Ownership Plan (ESOP), Gain (Loss) on Transactions in Deferred Shares 49,700,000 20,500,000 6,900,000 52,400,000 25,000,000 8,900,000
Common Stock Issued, Employee Stock Trust 371,900,000
Accelerated Share Repurchases, Settlement Payment or Receipt 2,580,000,000
Stock Repurchased During Period, Value 3,000,000,000
Preferred Stock, Shares Authorized 5,000,000
Common Stock, Shares Held in Employee Trust, Shares 50,000,000 50,000,000
Employee benefit trust $ 3,013,100,000 $ 3,013,200,000
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Earnings (Loss) Per Share (Details) (USD $)
In Millions, except Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Earnings Per Share [Abstract]
Net Income (Loss) Available to Common Stockholders, Basic $ 4,347.7 $ 5,069.5 $ 4,328.8
Weighted Average Number of Shares Outstanding, Basic 1,113,923,000 1,105,788,000 1,098,338,000
Earnings Per Share, Basic $ 3.9 $ 4.58 $ 3.94
Weighted Average Number of Shares Outstanding, Diluted 1,113,967,000 1,105,813,000 1,098,367,000
Weighted Average Number of Shares Outstanding, Common Shares 1,107,112,000 1,099,310,000 1,094,623,000
Incremental Common Shares Attributable to Share-based Payment Arrangements 6,855,000 6,503,000 3,744,000
Weighted Average Number of Shares Outstanding, Diluted, Total 1,113,967,000 1,105,813,000 1,098,367,000
Earnings Per Share, Diluted $ 3.9 $ 4.58 $ 3.94
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Income Taxes (Composition and Deferreds) (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Current Federal Tax Expense (Benefit) $ 671.4 $ 376.2 $ 45.7
Current Foreign Tax Expense (Benefit) 759.5 513.9 772.2
Current State and Local Tax Expense (Benefit) (22.9) 23.3 49.2
Current Income Tax Expense (Benefit), Total 1,408 913.4 867.1
Deferred Federal Income Tax Expense (Benefit) (398.5) 624.4 82.5
Deferred Foreign Income Tax Expense (Benefit) (34.7) (55.2) 79.8
Deferred State and Local Income Tax Expense (Benefit) 27 (26.9) (0.4)
Deferred Income Tax Expense (Benefit), Total (406.2) 542.3 161.9
Income taxes 1,001.8 1,455.7 1,029
Deferred Tax Assets, Tax Deferred Expense, Compensation and Benefits 1,286.5 890.4
Tax Credit Carryforward, Deferred Tax Asset 695.3 503.1
Deferred Tax Assets, Asset Purchases 428.5 275.1
Deferred Tax Assets, Operating Loss Carryforwards 406.1 414
Deferred Tax Assets, Inventory 277.2 316.7
Deferred Tax Assets, Debt 214.9 114.6
Deferred Tax Assets, Deferred Income 207.1 112.8
Deferred Tax Assets, Tax Deferred Expense, Reserves and Accruals, Returns and Allowances 146.2 84
Deferred Tax Assets, Tax Deferred Expense, Reserves and Accruals, Contingencies 94.5 106.6
Deferred Tax Assets, Other 301.3 363.4
Deferred Tax Assets, Gross, Total 4,057.6 3,180.7
Deferred Tax Assets, Valuation Allowance (611.9) (473.1)
Deferred Tax Assets, Net, Total 3,445.7 2,707.6
Deferred Tax Liabilities, Undistributed Foreign Earnings 940.2 741.8
Deferred Tax Liabilities, Goodwill and Intangible Assets 839.9 954.9
Deferred Tax Liabilities, Deferred Expense, Capitalized Inventory Costs 489.2 525.6
Deferred Tax Liabilities, Property, Plant and Equipment 451 505.2
Deferred Tax Liabilities, Interests in Financial Assets Continued to be Held 196.9 160.9
Deferred Tax Liabilities, Other 8.5 19.1
Deferred Tax Liabilities, Total (2,925.7) (2,907.5)
Deferred Tax Assets (Liabilities), Net, Total 520 (199.9)
Operating Loss Carryforwards 780.8
Tax Credit Carryforward, Amount 1,010
Carryback [Member]
Tax Credit Carryforward, Amount 514.4
Expiration 5 years [Member]
Operating Loss Carryforwards 335.5
Operating Loss Carryforwards, Expiration Dates 5
Expiration 5-20 years [Member]
Operating Loss Carryforwards 404.8
Expiration 5-20 years, Minimum [Member]
Operating Loss Carryforwards, Expiration Dates 5
Expiration 5-20 years, Maximum [Member]
Operating Loss Carryforwards, Expiration Dates 20
Expiration 10-20 years [Member]
Tax Credit Carryforward, Amount 53
Expiration 10-20 years, Minimum [Member]
Tax Credit Carryforward, Expiration Dates 10
Expiration 10-20 years, Maximum [Member]
Tax Credit Carryforward, Expiration Dates 20
No Expiration [Member]
Operating Loss Carryforwards 40.5
Tax Credit Carryforward, Amount 1.3
Internal Revenue Service (IRS) [Member] | Designated Unusable [Member]
Tax Credit Carryforward, Amount 93.8
State and Local Jurisdiction [Member] | Designated Unusable [Member]
Tax Credit Carryforward, Amount $ 349.4
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Income Taxes (Income Tax Expense and Unrecognized Tax Benefits) (Details) (USD $)
3 Months Ended 12 Months Ended
Mar. 31, 2010
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Income Taxes [Abstract]
Domestic Contribution to Income before Income Taxes 24.00% 45.00% 39.00%
Unremitted Earnings of Foreign Subsidiaries $ 20,600,000,000
Income Taxes Paid 943,000,000 861,000,000 1,140,000,000
Income Tax Reconciliation, Income Tax Expense (Benefit), at Federal Statutory Income Tax Rate 1,872,300,000 2,283,800,000 1,875,200,000
Income Tax Reconciliation, Deductions, Extraterritorial Income Exclusion (796,700,000) (823,300,000) (741,100,000)
Income Tax Reconciliation, Additions, US Health Care Reform Tax Law 62,900,000 85,100,000 0
Income Tax Reconciliation, Tax Credits (80,800,000) (83,200,000) (79,400,000)
Income Tax Reconciliation, Tax Settlements, Domestic (85,300,000) 0 (54,400,000)
Income Tax Reconciliation, Other Adjustments 29,400,000 (6,700,000) 28,700,000
Income taxes 1,001,800,000 1,455,700,000 1,029,000,000
Income Tax Expense, Noncash Item, US Health Care Reform Act 85,100,000
Unrecognized Tax Benefits, Beginning Balance 1,351,200,000 1,619,600,000 1,351,200,000 1,223,200,000
Unrecognized Tax Benefits, Increases Resulting from Current Period Tax Positions 89,400,000 186,200,000 179,100,000
Unrecognized Tax Benefits, Increases Resulting from Prior Period Tax Positions 390,000,000 117,000,000 170,400,000
Unrecognized Tax Benefits, Decreases Resulting from Prior Period Tax Positions (492,300,000) (30,200,000) (128,900,000)
Unrecognized Tax Benefits, Reductions Resulting from Lapse of Applicable Statute of Limitations (2,600,000) (7,000,000) (3,300,000)
Unrecognized Tax Benefits, Decreases Resulting from Settlements with Taxing Authorities (326,300,000) (100,000) (95,000,000)
Unrecognized Tax Benefits, Increases Resulting from the Impact of Foreign Currency Translation (3,000,000) 2,500,000 5,700,000
Unrecognized Tax Benefits, Ending Balance 1,274,800,000 1,619,600,000 1,351,200,000
Unrecognized Tax Benefits that Would Impact Effective Tax Rate 812,300,000 1,070,000,000
Tax Adjustments, Settlements, and Unusual Provisions 85,300,000 54,400,000
Income Tax Examination, Liability (Refund) Adjustment from Settlement with Taxing Authority 300,000,000
Income Taxes Paid, Net 50,000,000
Unrecognized Tax Benefits, Income Tax Penalties and Interest Expense (47,300,000) 38,300,000 (1,900,000)
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued $ 145,100,000 $ 221,000,000
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Retirement Benefits (Schedule of Benefit Obligations and Plan Assets) (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Pension Plans, Defined Benefit [Member]
Defined Benefit Plan, Benefit Obligation, Beginning Balance $ 8,115 $ 7,553.9
Defined Benefit Plan, Service Cost 236.3 219.2 242.1
Defined Benefit Plan, Interest Cost 447.9 431.6 417.5
Defined Benefit Plan, Actuarial Net (Gains) Losses 794.7 342.2
Defined Benefit Plan, Benefits Paid (400.1) (387.8)
Defined Benefit Plan, Plan Amendments 10 0.3
Defined Benefit Plan, Foreign Currency Exchange Rate Changes, Benefit Obligation (12.6) (44.4)
Defined Benefit Plan, Benefit Obligation, Ending Balance 9,191.2 8,115 7,553.9
Defined Benefit Plan, Fair Value of Plan Assets, Beginning Balance 6,983 6,008.5
Defined Benefit Plan, Actual Return on Plan Assets 209.2 818.3
Defined Benefit Plan, Contributions by Employer 402.4 563.5
Defined Benefit Plan, Foreign Currency Exchange Rate Changes, Plan Assets (8.2) (19.5)
Defined Benefit Plan, Fair Value of Plan Assets, Ending Balance 7,186.3 6,983 6,008.5
Defined Benefit Plan, Funded Status of Plan (2,004.9) (1,132)
Pension and Other Postretirement Benefit Plans, Accumulated Other Comprehensive Income (Loss), Net Gains (Losses), before Tax (4,857.5) (3,796.6)
Pension and Other Postretirement Benefit Plans, Accumulated Other Comprehensive Income (Loss), Net Prior Service Cost (Credit), before Tax 57.3 56.1
Defined Benefit Plan, Amounts Recognized in Balance Sheet, Total 2,909.9 2,720.7
Other Postretirement Benefit Plans, Defined Benefit [Member]
Defined Benefit Plan, Benefit Obligation, Beginning Balance 2,088.5 2,032.8
Defined Benefit Plan, Service Cost 72.4 56.5 53.7
Defined Benefit Plan, Interest Cost 118 121.4 119.6
Defined Benefit Plan, Actuarial Net (Gains) Losses 110.2 10
Defined Benefit Plan, Benefits Paid (77.9) (98)
Defined Benefit Plan, Plan Amendments 1.1 (64.2)
Defined Benefit Plan, Foreign Currency Exchange Rate Changes, Benefit Obligation (3.7) 30
Defined Benefit Plan, Benefit Obligation, Ending Balance 2,308.6 2,088.5 2,032.8
Defined Benefit Plan, Fair Value of Plan Assets, Beginning Balance 1,327.7 1,180.7
Defined Benefit Plan, Actual Return on Plan Assets 16.6 152.2
Defined Benefit Plan, Contributions by Employer 72.6 92.8
Defined Benefit Plan, Foreign Currency Exchange Rate Changes, Plan Assets 0 0
Defined Benefit Plan, Fair Value of Plan Assets, Ending Balance 1,339 1,327.7 1,180.7
Defined Benefit Plan, Funded Status of Plan (969.6) (760.8)
Pension and Other Postretirement Benefit Plans, Accumulated Other Comprehensive Income (Loss), Net Gains (Losses), before Tax (1,367.4) (1,235.3)
Pension and Other Postretirement Benefit Plans, Accumulated Other Comprehensive Income (Loss), Net Prior Service Cost (Credit), before Tax (215.1) (261.1)
Defined Benefit Plan, Amounts Recognized in Balance Sheet, Total $ 182.7 $ 213.4
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Retirement Benefits (Schedule of Components in Consolidated Balance Sheets) (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Accrued retirement benefit $ 3,068.5 $ 1,887.4
Pension Plans, Defined Benefit [Member]
Defined Benefit Plan, Current Assets 160.8 58.5
Pension and Other Postretirement Defined Benefit Plans, Current Liabilities (57.5) (54.7)
Accrued retirement benefit 2,108.2 1,135.8
Pension and Other Postretirement Benefit Plans, Accumulated Other Comprehensive Income (Loss), before Tax 4,914.8 3,852.7
Defined Benefit Plan, Amounts Recognized in Balance Sheet, Total 2,909.9 2,720.7
Defined Benefit Plan, Amounts Recognized in Other Comprehensive Income (Loss), Net Gain (Loss), before Tax 285.3 (200.4)
Other Comprehensive Income (Loss), Amortization, Pension and Other Postretirement Benefit Plans, Net Prior Service Cost (Credit) Recognized in Net Periodic Benefit Cost, before Tax 3.3 (8.6)
Other Postretirement Benefit Plans, Defined Benefit [Member]
Defined Benefit Plan, Current Assets 0 0
Pension and Other Postretirement Defined Benefit Plans, Current Liabilities (9.3) (9.2)
Accrued retirement benefit 960.3 751.6
Pension and Other Postretirement Benefit Plans, Accumulated Other Comprehensive Income (Loss), before Tax 1,152.3 974.2
Defined Benefit Plan, Amounts Recognized in Balance Sheet, Total 182.7 213.4
Defined Benefit Plan, Amounts Recognized in Other Comprehensive Income (Loss), Net Gain (Loss), before Tax 95.7 (88.7)
Other Comprehensive Income (Loss), Amortization, Pension and Other Postretirement Benefit Plans, Net Prior Service Cost (Credit) Recognized in Net Periodic Benefit Cost, before Tax $ 35.1 $ 42.9
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Retirement Benefits (Schedule of Weighted Average Assumptions) (Details)
12 Months Ended
Dec. 31, 2020
Dec. 31, 2011
Dec. 31, 2011
Pension Plans, Defined Benefit [Member]
Dec. 31, 2010
Pension Plans, Defined Benefit [Member]
Dec. 31, 2009
Pension Plans, Defined Benefit [Member]
Dec. 31, 2011
Other Postretirement Benefit Plans, Defined Benefit [Member]
Dec. 31, 2010
Other Postretirement Benefit Plans, Defined Benefit [Member]
Dec. 31, 2009
Other Postretirement Benefit Plans, Defined Benefit [Member]
Defined Benefit Plan, Assumptions Used Calculating Benefit Obligation, Discount Rate 5.00% 5.60% 5.90% 5.10% 5.80% 6.00%
Defined Benefit Plan, Assumptions Used Calculating Net Periodic Benefit Cost, Discount Rate 5.60% 5.90% 6.70% 5.80% 6.00% 6.90%
Defined Benefit Plan, Assumptions Used Calculating Benefit Obligation, Rate of Compensation Increase 3.70% 3.70% 3.70%
Defined Benefit Plan, Assumptions Used Calculating Net Periodic Benefit Cost, Rate of Compensation Increase 3.70% 3.70% 4.10%
Defined Benefit Plan, Assumptions Used Calculating Net Periodic Benefit Cost, Expected Long-term Return on Assets 8.50% 8.80% 8.80% 8.80% 9.00% 9.00%
Defined Benefit Plan, Health Care Cost Trend Rate Assumed for Next Fiscal Year 7.40%
Defined Benefit Plan, Direction and Pattern for Assumed Health Care Cost Trend Rate 0.30%
Defined Benefit Plan, Ultimate Health Care Cost Trend Rate 5.00%
Defined Benefit Plan, Year that Rate Reaches Ultimate Trend Rate 2020
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Retirement Benefits (Schedule of Expected Benefit Payments, Contributions and Expense) (Details) (USD $)
12 Months Ended
Dec. 31, 2012
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Defined Benefit Plan, Accumulated Benefit Obligation $ 8,200,000,000 $ 7,230,000,000
Defined Benefit Plan, Pension Plans with Accumulated Benefit Obligations in Excess of Plan Assets, Aggregate Projected Benefit Obligation 8,120,000,000 7,120,000,000
Defined Benefit Plan, Plans with Projected Benefit Obligations in Excess of Plan Assets, Aggregate Fair Value of Plan Assets 5,960,000,000 5,930,000,000
Defined Benefit Plan, Plans with Benefit Obligations in Excess of Plan Assets, Aggregate Benefit Obligation 7,030,000,000 1,100,000,000
Defined Benefit Plan, Plans with Benefit Obligations in Excess of Plan Assets, Aggregate Fair Value of Plan Assets 5,750,000,000 136,300,000
Defined Benefit Plan, Effect of One Percentage Point Increase on Accumulated Postretirement Benefit Obligation 209,400,000
Defined Benefit Plan, Effect of One Percentage Point Increase on Service and Interest Cost Components 15,100,000
Defined Benefit Plan, Effect of One Percentage Point Decrease on Accumulated Postretirement Benefit Obligation 187,100,000
Defined Benefit Plan, Effect of One Percentage Point Decrease on Service and Interest Cost Components 12,300,000
Defined benefit pension and retiree health benefit plans (1,240,200,000) 148,900,000 (280,300,000)
Defined Contribution Plan, Cost Recognized 117,600,000 119,800,000 127,600,000
Pension Plans, Defined Benefit [Member]
Defined Benefit Plan, Expected Future Benefit Payments in Year One 416,100,000
Defined Benefit Plan, Expected Future Benefit Payments in Year Two 424,200,000
Defined Benefit Plan, Expected Future Benefit Payments in Year Three 437,200,000
Defined Benefit Plan, Expected Future Benefit Payments in Year Four 449,900,000
Defined Benefit Plan, Expected Future Benefit Payments in Year Five 464,200,000
Defined Benefit Plan, Expected Future Benefit Payments in Five Fiscal Years Thereafter 2,609,200,000
Defined Benefit Plan, Service Cost 236,300,000 219,200,000 242,100,000
Defined Benefit Plan, Interest Cost 447,900,000 431,600,000 417,500,000
Defined Benefit Plan, Expected Return on Plan Assets (685,900,000) (638,200,000) (584,900,000)
Defined Benefit Plan, Amortization of Prior Service Cost (Credit) 8,600,000 8,800,000 8,000,000
Defined Benefit Plan, Amortization of Net Gains (Losses) 200,400,000 163,000,000 84,500,000
Defined Benefit Plan, Net Periodic Benefit Cost, Total 207,300,000 184,400,000 167,200,000
Other Comprehensive Income, Defined Benefit Plan's Net Unamortized Gain (Loss) Arising During Period, before Tax 1,266,000,000
Other Comprehensive Income (Loss), Pension and Other Postretirement Benefit Plans, Net Prior Service Cost (Credit) Arising During Period, before Tax 10,000,000
Other Comprehensive Income (Loss), Amortization, Pension and Other Postretirement Benefit Plans, Net Prior Service Cost (Credit) Recognized in Net Periodic Benefit Cost, before Tax 3,300,000 (8,600,000)
Defined Benefit Plan, Amounts Recognized in Other Comprehensive Income (Loss), Net Gain (Loss), before Tax 285,300,000 (200,400,000)
Foreign currency translation gains (losses) (4,900,000)
Defined benefit pension and retiree health benefit plans 1,062,100,000
Other Postretirement Benefit Plans, Defined Benefit [Member]
Defined Benefit Plan, Expected Future Benefit Payments in Year One 107,000,000
Defined Benefit Plan, Expected Future Benefit Payments in Year Two 109,200,000
Defined Benefit Plan, Expected Future Benefit Payments in Year Three 112,600,000
Defined Benefit Plan, Expected Future Benefit Payments in Year Four 114,900,000
Defined Benefit Plan, Expected Future Benefit Payments in Year Five 121,700,000
Defined Benefit Plan, Expected Future Benefit Payments in Five Fiscal Years Thereafter 699,100,000
Defined Benefit Plan, Service Cost 72,400,000 56,500,000 53,700,000
Defined Benefit Plan, Interest Cost 118,000,000 121,400,000 119,600,000
Defined Benefit Plan, Expected Return on Plan Assets (129,400,000) (122,600,000) (117,900,000)
Defined Benefit Plan, Amortization of Prior Service Cost (Credit) (42,900,000) (37,200,000) (36,000,000)
Defined Benefit Plan, Amortization of Net Gains (Losses) 88,700,000 85,000,000 71,800,000
Defined Benefit Plan, Net Periodic Benefit Cost, Total 106,800,000 103,100,000 91,200,000
Other Comprehensive Income, Defined Benefit Plan's Net Unamortized Gain (Loss) Arising During Period, before Tax 221,300,000
Other Comprehensive Income (Loss), Pension and Other Postretirement Benefit Plans, Net Prior Service Cost (Credit) Arising During Period, before Tax 1,100,000
Other Comprehensive Income (Loss), Amortization, Pension and Other Postretirement Benefit Plans, Net Prior Service Cost (Credit) Recognized in Net Periodic Benefit Cost, before Tax 35,100,000 42,900,000
Defined Benefit Plan, Amounts Recognized in Other Comprehensive Income (Loss), Net Gain (Loss), before Tax 95,700,000 (88,700,000)
Foreign currency translation gains (losses) 1,500,000
Defined benefit pension and retiree health benefit plans 178,100,000
Other Postretirement Benefit Plans, Defined Benefit, Gross [Member]
Defined Benefit Plan, Expected Future Benefit Payments in Year One 118,700,000
Defined Benefit Plan, Expected Future Benefit Payments in Year Two 119,100,000
Defined Benefit Plan, Expected Future Benefit Payments in Year Three 123,600,000
Defined Benefit Plan, Expected Future Benefit Payments in Year Four 127,300,000
Defined Benefit Plan, Expected Future Benefit Payments in Year Five 135,200,000
Defined Benefit Plan, Expected Future Benefit Payments in Five Fiscal Years Thereafter 790,800,000
Other Postretirement Benefit Plans, Defined Benefit Plans, Medicare Rebates [Member]
Defined Benefit Plan, Expected Future Benefit Payments in Year One (11,700,000)
Defined Benefit Plan, Expected Future Benefit Payments in Year Two (9,900,000)
Defined Benefit Plan, Expected Future Benefit Payments in Year Three (11,000,000)
Defined Benefit Plan, Expected Future Benefit Payments in Year Four (12,400,000)
Defined Benefit Plan, Expected Future Benefit Payments in Year Five (13,500,000)
Defined Benefit Plan, Expected Future Benefit Payments in Five Fiscal Years Thereafter $ (91,700,000)
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Retirement Benefits (Fair Value Disclosures) (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended 12 Months Ended 12 Months Ended
Dec. 31, 2011
Dec. 31, 2011
Pension Plans, Defined Benefit [Member]
Dec. 31, 2010
Pension Plans, Defined Benefit [Member]
Dec. 31, 2009
Pension Plans, Defined Benefit [Member]
Dec. 31, 2012
Other Postretirement Benefit Plans, Defined Benefit [Member]
Dec. 31, 2010
Other Postretirement Benefit Plans, Defined Benefit [Member]
Dec. 31, 2009
Other Postretirement Benefit Plans, Defined Benefit [Member]
Dec. 31, 2011
Hedge Funds [Member]
Pension Plans, Defined Benefit [Member]
Dec. 31, 2010
Hedge Funds [Member]
Pension Plans, Defined Benefit [Member]
Dec. 31, 2011
Hedge Funds [Member]
Other Postretirement Benefit Plans, Defined Benefit [Member]
Dec. 31, 2010
Hedge Funds [Member]
Other Postretirement Benefit Plans, Defined Benefit [Member]
Dec. 31, 2011
Equity Funds [Member]
Pension Plans, Defined Benefit [Member]
Dec. 31, 2010
Equity Funds [Member]
Pension Plans, Defined Benefit [Member]
Dec. 31, 2011
Equity Funds [Member]
Other Postretirement Benefit Plans, Defined Benefit [Member]
Dec. 31, 2010
Equity Funds [Member]
Other Postretirement Benefit Plans, Defined Benefit [Member]
Dec. 31, 2011
Equity Securities, International [Member]
Pension Plans, Defined Benefit [Member]
Dec. 31, 2010
Equity Securities, International [Member]
Pension Plans, Defined Benefit [Member]
Dec. 31, 2011
Equity Securities, International [Member]
Other Postretirement Benefit Plans, Defined Benefit [Member]
Dec. 31, 2010
Equity Securities, International [Member]
Other Postretirement Benefit Plans, Defined Benefit [Member]
Dec. 31, 2011
Fixed Income Funds, Developed Markets [Member]
Pension Plans, Defined Benefit [Member]
Dec. 31, 2010
Fixed Income Funds, Developed Markets [Member]
Pension Plans, Defined Benefit [Member]
Dec. 31, 2011
Fixed Income Funds, Developed Markets [Member]
Other Postretirement Benefit Plans, Defined Benefit [Member]
Dec. 31, 2010
Fixed Income Funds, Developed Markets [Member]
Other Postretirement Benefit Plans, Defined Benefit [Member]
Dec. 31, 2011
Fixed Income Funds, Emerging Markets [Member]
Pension Plans, Defined Benefit [Member]
Dec. 31, 2010
Fixed Income Funds, Emerging Markets [Member]
Pension Plans, Defined Benefit [Member]
Dec. 31, 2011
Fixed Income Funds, Emerging Markets [Member]
Other Postretirement Benefit Plans, Defined Benefit [Member]
Dec. 31, 2010
Fixed Income Funds, Emerging Markets [Member]
Other Postretirement Benefit Plans, Defined Benefit [Member]
Dec. 31, 2011
Equity Securities, US [Member]
Pension Plans, Defined Benefit [Member]
Dec. 31, 2010
Equity Securities, US [Member]
Pension Plans, Defined Benefit [Member]
Dec. 31, 2011
Equity Securities, US [Member]
Other Postretirement Benefit Plans, Defined Benefit [Member]
Dec. 31, 2010
Equity Securities, US [Member]
Other Postretirement Benefit Plans, Defined Benefit [Member]
Dec. 31, 2011
Real Estate [Member]
Pension Plans, Defined Benefit [Member]
Dec. 31, 2010
Real Estate [Member]
Pension Plans, Defined Benefit [Member]
Dec. 31, 2011
Real Estate [Member]
Other Postretirement Benefit Plans, Defined Benefit [Member]
Dec. 31, 2011
Other Contract [Member]
Other Postretirement Benefit Plans, Defined Benefit [Member]
Dec. 31, 2010
Other Contract [Member]
Other Postretirement Benefit Plans, Defined Benefit [Member]
Dec. 31, 2011
Other Plan Assets [Member]
Pension Plans, Defined Benefit [Member]
Dec. 31, 2010
Other Plan Assets [Member]
Pension Plans, Defined Benefit [Member]
Dec. 31, 2011
Other Plan Assets [Member]
Other Postretirement Benefit Plans, Defined Benefit [Member]
Dec. 31, 2010
Other Plan Assets [Member]
Other Postretirement Benefit Plans, Defined Benefit [Member]
Dec. 31, 2011
Fair Value, Inputs, Level 1 [Member]
Pension Plans, Defined Benefit [Member]
Dec. 31, 2010
Fair Value, Inputs, Level 1 [Member]
Pension Plans, Defined Benefit [Member]
Dec. 31, 2011
Fair Value, Inputs, Level 1 [Member]
Other Postretirement Benefit Plans, Defined Benefit [Member]
Dec. 31, 2010
Fair Value, Inputs, Level 1 [Member]
Other Postretirement Benefit Plans, Defined Benefit [Member]
Dec. 31, 2010
Fair Value, Inputs, Level 1 [Member]
Equity Funds [Member]
Pension Plans, Defined Benefit [Member]
Dec. 31, 2011
Fair Value, Inputs, Level 1 [Member]
Equity Securities, International [Member]
Pension Plans, Defined Benefit [Member]
Dec. 31, 2010
Fair Value, Inputs, Level 1 [Member]
Equity Securities, International [Member]
Pension Plans, Defined Benefit [Member]
Dec. 31, 2011
Fair Value, Inputs, Level 1 [Member]
Equity Securities, International [Member]
Other Postretirement Benefit Plans, Defined Benefit [Member]
Dec. 31, 2010
Fair Value, Inputs, Level 1 [Member]
Equity Securities, International [Member]
Other Postretirement Benefit Plans, Defined Benefit [Member]
Dec. 31, 2011
Fair Value, Inputs, Level 1 [Member]
Fixed Income Funds, Developed Markets [Member]
Pension Plans, Defined Benefit [Member]
Dec. 31, 2010
Fair Value, Inputs, Level 1 [Member]
Fixed Income Funds, Developed Markets [Member]
Pension Plans, Defined Benefit [Member]
Dec. 31, 2011
Fair Value, Inputs, Level 1 [Member]
Fixed Income Funds, Emerging Markets [Member]
Pension Plans, Defined Benefit [Member]
Dec. 31, 2011
Fair Value, Inputs, Level 1 [Member]
Equity Securities, US [Member]
Pension Plans, Defined Benefit [Member]
Dec. 31, 2010
Fair Value, Inputs, Level 1 [Member]
Equity Securities, US [Member]
Pension Plans, Defined Benefit [Member]
Dec. 31, 2011
Fair Value, Inputs, Level 1 [Member]
Equity Securities, US [Member]
Other Postretirement Benefit Plans, Defined Benefit [Member]
Dec. 31, 2010
Fair Value, Inputs, Level 1 [Member]
Equity Securities, US [Member]
Other Postretirement Benefit Plans, Defined Benefit [Member]
Dec. 31, 2011
Fair Value, Inputs, Level 1 [Member]
Real Estate [Member]
Pension Plans, Defined Benefit [Member]
Dec. 31, 2011
Fair Value, Inputs, Level 1 [Member]
Real Estate [Member]
Other Postretirement Benefit Plans, Defined Benefit [Member]
Dec. 31, 2011
Fair Value, Inputs, Level 1 [Member]
Other Plan Assets [Member]
Pension Plans, Defined Benefit [Member]
Dec. 31, 2010
Fair Value, Inputs, Level 1 [Member]
Other Plan Assets [Member]
Pension Plans, Defined Benefit [Member]
Dec. 31, 2011
Fair Value, Inputs, Level 1 [Member]
Other Plan Assets [Member]
Other Postretirement Benefit Plans, Defined Benefit [Member]
Dec. 31, 2010
Fair Value, Inputs, Level 1 [Member]
Other Plan Assets [Member]
Other Postretirement Benefit Plans, Defined Benefit [Member]
Dec. 31, 2011
Fair Value, Inputs, Level 2 [Member]
Pension Plans, Defined Benefit [Member]
Dec. 31, 2010
Fair Value, Inputs, Level 2 [Member]
Pension Plans, Defined Benefit [Member]
Dec. 31, 2011
Fair Value, Inputs, Level 2 [Member]
Other Postretirement Benefit Plans, Defined Benefit [Member]
Dec. 31, 2010
Fair Value, Inputs, Level 2 [Member]
Other Postretirement Benefit Plans, Defined Benefit [Member]
Dec. 31, 2011
Fair Value, Inputs, Level 2 [Member]
Hedge Funds [Member]
Pension Plans, Defined Benefit [Member]
Dec. 31, 2010
Fair Value, Inputs, Level 2 [Member]
Hedge Funds [Member]
Pension Plans, Defined Benefit [Member]
Dec. 31, 2011
Fair Value, Inputs, Level 2 [Member]
Hedge Funds [Member]
Other Postretirement Benefit Plans, Defined Benefit [Member]
Dec. 31, 2010
Fair Value, Inputs, Level 2 [Member]
Hedge Funds [Member]
Other Postretirement Benefit Plans, Defined Benefit [Member]
Dec. 31, 2011
Fair Value, Inputs, Level 2 [Member]
Equity Securities, International [Member]
Pension Plans, Defined Benefit [Member]
Dec. 31, 2010
Fair Value, Inputs, Level 2 [Member]
Equity Securities, International [Member]
Pension Plans, Defined Benefit [Member]
Dec. 31, 2011
Fair Value, Inputs, Level 2 [Member]
Equity Securities, International [Member]
Other Postretirement Benefit Plans, Defined Benefit [Member]
Dec. 31, 2010
Fair Value, Inputs, Level 2 [Member]
Equity Securities, International [Member]
Other Postretirement Benefit Plans, Defined Benefit [Member]
Dec. 31, 2011
Fair Value, Inputs, Level 2 [Member]
Fixed Income Funds, Developed Markets [Member]
Pension Plans, Defined Benefit [Member]
Dec. 31, 2010
Fair Value, Inputs, Level 2 [Member]
Fixed Income Funds, Developed Markets [Member]
Pension Plans, Defined Benefit [Member]
Dec. 31, 2011
Fair Value, Inputs, Level 2 [Member]
Fixed Income Funds, Developed Markets [Member]
Other Postretirement Benefit Plans, Defined Benefit [Member]
Dec. 31, 2010
Fair Value, Inputs, Level 2 [Member]
Fixed Income Funds, Developed Markets [Member]
Other Postretirement Benefit Plans, Defined Benefit [Member]
Dec. 31, 2011
Fair Value, Inputs, Level 2 [Member]
Fixed Income Funds, Emerging Markets [Member]
Pension Plans, Defined Benefit [Member]
Dec. 31, 2010
Fair Value, Inputs, Level 2 [Member]
Fixed Income Funds, Emerging Markets [Member]
Pension Plans, Defined Benefit [Member]
Dec. 31, 2011
Fair Value, Inputs, Level 2 [Member]
Fixed Income Funds, Emerging Markets [Member]
Other Postretirement Benefit Plans, Defined Benefit [Member]
Dec. 31, 2010
Fair Value, Inputs, Level 2 [Member]
Fixed Income Funds, Emerging Markets [Member]
Other Postretirement Benefit Plans, Defined Benefit [Member]
Dec. 31, 2011
Fair Value, Inputs, Level 2 [Member]
Equity Securities, US [Member]
Pension Plans, Defined Benefit [Member]
Dec. 31, 2010
Fair Value, Inputs, Level 2 [Member]
Equity Securities, US [Member]
Pension Plans, Defined Benefit [Member]
Dec. 31, 2011
Fair Value, Inputs, Level 2 [Member]
Equity Securities, US [Member]
Other Postretirement Benefit Plans, Defined Benefit [Member]
Dec. 31, 2010
Fair Value, Inputs, Level 2 [Member]
Equity Securities, US [Member]
Other Postretirement Benefit Plans, Defined Benefit [Member]
Dec. 31, 2011
Fair Value, Inputs, Level 2 [Member]
Other Contract [Member]
Other Postretirement Benefit Plans, Defined Benefit [Member]
Dec. 31, 2010
Fair Value, Inputs, Level 2 [Member]
Other Contract [Member]
Other Postretirement Benefit Plans, Defined Benefit [Member]
Dec. 31, 2011
Fair Value, Inputs, Level 2 [Member]
Other Plan Assets [Member]
Pension Plans, Defined Benefit [Member]
Dec. 31, 2010
Fair Value, Inputs, Level 2 [Member]
Other Plan Assets [Member]
Pension Plans, Defined Benefit [Member]
Dec. 31, 2011
Fair Value, Inputs, Level 2 [Member]
Other Plan Assets [Member]
Other Postretirement Benefit Plans, Defined Benefit [Member]
Dec. 31, 2010
Fair Value, Inputs, Level 2 [Member]
Other Plan Assets [Member]
Other Postretirement Benefit Plans, Defined Benefit [Member]
Dec. 31, 2011
Fair Value, Inputs, Level 3 [Member]
Pension Plans, Defined Benefit [Member]
Dec. 31, 2010
Fair Value, Inputs, Level 3 [Member]
Pension Plans, Defined Benefit [Member]
Dec. 31, 2011
Fair Value, Inputs, Level 3 [Member]
Other Postretirement Benefit Plans, Defined Benefit [Member]
Dec. 31, 2010
Fair Value, Inputs, Level 3 [Member]
Other Postretirement Benefit Plans, Defined Benefit [Member]
Dec. 31, 2011
Fair Value, Inputs, Level 3 [Member]
Hedge Funds [Member]
Pension Plans, Defined Benefit [Member]
Dec. 31, 2010
Fair Value, Inputs, Level 3 [Member]
Hedge Funds [Member]
Pension Plans, Defined Benefit [Member]
Dec. 31, 2011
Fair Value, Inputs, Level 3 [Member]
Hedge Funds [Member]
Other Postretirement Benefit Plans, Defined Benefit [Member]
Dec. 31, 2010
Fair Value, Inputs, Level 3 [Member]
Hedge Funds [Member]
Other Postretirement Benefit Plans, Defined Benefit [Member]
Dec. 31, 2011
Fair Value, Inputs, Level 3 [Member]
Equity Funds [Member]
Pension Plans, Defined Benefit [Member]
Dec. 31, 2010
Fair Value, Inputs, Level 3 [Member]
Equity Funds [Member]
Pension Plans, Defined Benefit [Member]
Dec. 31, 2011
Fair Value, Inputs, Level 3 [Member]
Equity Funds [Member]
Other Postretirement Benefit Plans, Defined Benefit [Member]
Dec. 31, 2010
Fair Value, Inputs, Level 3 [Member]
Equity Funds [Member]
Other Postretirement Benefit Plans, Defined Benefit [Member]
Dec. 31, 2010
Fair Value, Inputs, Level 3 [Member]
Equity Securities, International [Member]
Pension Plans, Defined Benefit [Member]
Dec. 31, 2010
Fair Value, Inputs, Level 3 [Member]
Equity Securities, International [Member]
Other Postretirement Benefit Plans, Defined Benefit [Member]
Dec. 31, 2010
Fair Value, Inputs, Level 3 [Member]
Fixed Income Funds, Developed Markets [Member]
Pension Plans, Defined Benefit [Member]
Dec. 31, 2010
Fair Value, Inputs, Level 3 [Member]
Fixed Income Funds, Developed Markets [Member]
Other Postretirement Benefit Plans, Defined Benefit [Member]
Dec. 31, 2011
Fair Value, Inputs, Level 3 [Member]
Real Estate [Member]
Pension Plans, Defined Benefit [Member]
Dec. 31, 2010
Fair Value, Inputs, Level 3 [Member]
Real Estate [Member]
Pension Plans, Defined Benefit [Member]
Dec. 31, 2010
Fair Value, Inputs, Level 3 [Member]
Real Estate [Member]
Other Postretirement Benefit Plans, Defined Benefit [Member]
Defined Benefit Plan, Percentage of Global Investments in Plan Assets 81.00%
Defined Benefit Plan, Target Allocation Percentage of Assets, Equity Securities 81.00%
Defined Benefit Plan, Target Allocation Percentage of Assets, Debt Securities 19.00%
Defined Benefit Plan, Fair Value of Plan Assets, Ending Balance $ 7,186.3 $ 6,983 $ 6,008.5 $ 1,327.7 $ 1,180.7 $ 2,312.6 $ 2,020.3 $ 213.1 $ 185.2 $ 870.2 $ 812.9 $ 79.9 $ 74.5 $ 1,462.4 $ 1,868.3 $ 97.1 $ 131.6 $ 929.1 $ 791.6 $ 55.3 $ 50.5 $ 341.5 $ 336.2 $ 34.6 $ 33.9 $ 454.5 $ 589.4 $ 40.9 $ 56 $ 409.2 $ 126.5 $ 27.5 $ 767.9 $ 761.7 $ 406.8 $ 437.8 $ 22.7 $ 34.3 $ 1,373 $ 1,612 $ 91.6 $ 120.1 $ 10 $ 505.9 $ 907.1 $ 27.5 $ 67.8 $ 100.9 $ 77.6 $ 0.1 $ 317.2 $ 421.4 $ 28 $ 39.7 $ 271.2 $ 27.5 $ 177.7 $ 195.9 $ 8.6 $ 12.6 $ 3,556.7 $ 3,199.7 $ 1,062.2 $ 1,026.5 $ 1,064.2 $ 778.4 $ 107.8 $ 78.6 $ 956.5 $ 961.2 $ 69.6 $ 63.8 $ 828.2 $ 714 $ 55.3 $ 50.5 $ 341.4 $ 336.2 $ 34.6 $ 33.9 $ 137.3 $ 168 $ 12.9 $ 16.3 $ 767.9 $ 761.7 $ 229.1 $ 241.9 $ 14.1 $ 21.7 $ 2,256.6 $ 2,171.3 $ 185.2 $ 181.1 $ 1,248.4 $ 1,241.9 $ 105.3 $ 106.6 $ 870.2 $ 802.9 $ 79.9 $ 74.5 $ 0 $ 0 $ 0 $ 0 $ 138 $ 126.5 $ 0
Defined Benefit Plan, Fair Value of Plan Assets, Beginning Balance 7,186.3 6,983 6,008.5 1,339 1,327.7 1,180.7 2,312.6 2,020.3 213.1 185.2 870.2 812.9 79.9 74.5 1,462.4 1,868.3 97.1 131.6 929.1 791.6 55.3 50.5 341.5 336.2 34.6 33.9 454.5 589.4 40.9 56 409.2 126.5 27.5 767.9 761.7 406.8 437.8 22.7 34.3 1,373 1,612 91.6 120.1 10 505.9 907.1 27.5 67.8 100.9 77.6 0.1 317.2 421.4 28 39.7 271.2 27.5 177.7 195.9 8.6 12.6 3,556.7 3,199.7 1,062.2 1,026.5 1,064.2 778.4 107.8 78.6 956.5 961.2 69.6 63.8 828.2 714 55.3 50.5 341.4 336.2 34.6 33.9 137.3 168 12.9 16.3 767.9 761.7 229.1 241.9 14.1 21.7 2,171.3 2,132.5 181.1 205.3 1,241.9 1,381.5 106.6 140.9 802.9 658.2 74.5 63.6 3.9 0.4 3.5 0.4 126.5 85.4 0
Defined Benefit Plan, Actual Return on Plan Assets Still Held 30.2 176.7 3.8 10 (8.1) 106.1 0.5 5.4 34.4 66.2 3.3 4.6 0.1 0 0.1 0 3.9 4.2 0
Defined Benefit Plan, Actual Return on Plan Assets Sold During Period (18.1) 5.5 (1.8) 0.6 (18.1) 0 (1.8) 0 0 11.3 0 0.6 (0.4) 0 (0.1) 0 0 (5.3) 0
Defined Benefit Plan, Business Combinations and Acquisitions, Plan Assets 388.3 388.7 32.6 17.2 217.7 215.8 18.2 5.3 159.1 131.4 14.4 11.9 0.1 0 0 0 11.5 41.4 0
Defined Benefit Plan, Divestitures, Plan Assets (29.1) (27.9) (2) (1.4) (25.2) (21.4) (2) (0.6) 0 0 0 0 (3.1) (0.4) (3.4) (0.4) (3.9) 0 0
Defined Benefit Plan, Settlements, Plan Assets (286) (82.4) (28.5) (8) (159.8) (18.1) (16.2) (1.8) (126.2) (64.2) (12.3) (6.2) 0 0 (0.1) 0 0 0 0
Defined Benefit Plan, Transfers Between Measurement Levels (421.8) (42.6) (422) (42.6) 0 0 (0.6) 0 0 0 0.8 0
Defined Benefit Plan, Estimated Future Employer Contributions in Next Fiscal Year 75
Pension and Other Postretirement Benefit Contributions, Discretionary $ 300
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Contingencies (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended 24 Months Ended 12 Months Ended
Dec. 31, 2009
Dec. 31, 2009
Zyprexa [Member]
Dec. 31, 2011
Product Liability Litigation [Member]
Zyprexa [Member]
lawsuits
plaintiffs
Dec. 31, 2009
Product Liability Litigation [Member]
Zyprexa [Member]
Dec. 31, 2008
Product Liability Litigation [Member]
Zyprexa [Member]
states
Dec. 31, 2011
Product Liability Litigation [Member]
Byetta [Member]
plaintiffs
lawsuits
Dec. 31, 2011
Multi District Litigation MDL [Member]
Zyprexa [Member]
plaintiffs
lawsuits
Dec. 31, 2006
Marketing and Promotional Practices [Member]
Zyprexa [Member]
lawsuits
Dec. 31, 2011
California [Member]
Product Liability Litigation [Member]
Byetta [Member]
lawsuits
Loss Contingency, Number of Claimants 530
Loss Contingency, Number of Lawsuits 40 120 25 4 100
Loss Contingency, Number of Plaintiffs 120 480 30
Loss Contingency, Number of States 13
Product Liability Accrual, Period Expense $ 230 $ 230 $ 230 $ 15
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Other Comprehensive Income (Loss) (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Accumulated other comprehensive loss $ (3,858.6) $ (2,670.1)
Other Comprehensive Income (Loss), Net of Tax (1,188.5) (198.2) 314.9
Other Comprehensive Income (Loss), Pension and Other Postretirement Benefit Plans, Net Unamortized Gain (Loss) Arising During Period, Tax 383.8
Other Comprehensive Income (Loss), Unrealized Holding Gain (Loss) on Securities Arising During Period, Tax 64.4
Other Comprehensive Income (Loss), Reclassification Adjustment for Sale of Securities Included in Net Income, Net of Tax 54.7 27.6 19
Other Comprehensive Income (Loss), Reclassification Adjustment on Derivatives Included in Net Income, Net of Tax 5.8 5.8 6.7
Accumulated Other Comprehensive Income (Loss) [Member]
Accumulated other comprehensive loss (3,858.6) (2,670.1)
Other Comprehensive Income (Loss), Net of Tax (1,188.5)
Accumulated Translation Adjustment [Member]
Accumulated other comprehensive loss 265.9 510.7
Other Comprehensive Income (Loss), Net of Tax (244.8)
Accumulated Net Unrealized Investment Gain (Loss) [Member]
Accumulated other comprehensive loss 14.8 128.9
Other Comprehensive Income (Loss), Net of Tax (114.1)
Accumulated Defined Benefit Plans Adjustment [Member]
Accumulated other comprehensive loss (4,032.2) (3,175.8)
Other Comprehensive Income (Loss), Net of Tax (856.4)
Accumulated Net Gain (Loss) from Designated or Qualifying Cash Flow Hedges [Member]
Accumulated other comprehensive loss (107.1) (133.9)
Other Comprehensive Income (Loss), Net of Tax $ 26.8
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Other - Net, Expense (Income) (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2011
Dec. 31, 2010
Dec. 31, 2009
Other-Net, Expense [Abstract]
Interest expense $ 186 $ 185.5 $ 261.3
Investment Income, Interest (79.9) (51.9) (75.2)
Other (income)expense 72.9 (128.6) 43.4
Nonoperating Income (Expense), Total $ 179 $ 5 $ 229.5
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