Eli Lilly and (LLY) 10-Q 31 Jul 09 2009 Q2 Quarterly report Financial data

CONSOLIDATED CONDENSED STATEMEN

CONSOLIDATED CONDENSED STATEMENTS OF INCOME (USD $)
In Millions, except Per Share data	3 Months Ended Jun. 30, 2009	3 Months Ended Jun. 30, 2008	6 Months Ended Jun. 30, 2009	6 Months Ended Jun. 30, 2008
Net product sales	5113.3	5033.8	10005.1	9743.2
Collaboration and other revenue (Note 4)	179.5	116.6	334.7	214.8
Total revenue	5292.8	5150.4	10339.8	9,958
Cost of sales	947.4	1200.9	1763.8	2312.2
Research and development	1040.4	951.5	1987.7	1828.6
Marketing, selling, and administrative	1708.2	1700.1	3237.4	3250.6
Acquired in-process research and development (Note 3)	0	35	0	122
Asset impairments, restructuring, and other special charges (Note 5)	105	88.9	105	234.6
Other - net, expense (income) (Note 13)	24.1	-32.3	94.8	-52.6
Cost of sales, operating expenses, and other-net	3825.1	3944.1	7188.7	7695.4
Income before income taxes	1467.7	1206.3	3151.1	2262.6
Income taxes (Note 10)	309.2	247.5	679.5	239.5
Net income	1158.5	958.8	2471.6	2023.1
Earnings per share - basic and diluted	1.06	0.88	2.25	1.85
Dividends paid per share	0.49	0.47	0.98	0.94

CONSOLIDATED CONDENSED BALANCE

CONSOLIDATED CONDENSED BALANCE SHEETS (USD $)
In Millions	Jun. 30, 2009	Dec. 31, 2008
CURRENT ASSETS
Cash and cash equivalents	3322.3	5496.7
Short-term investments (Note 6)	168.1	429.4
Accounts receivable, net of allowances of $99.4 (2009) and $97.4 (2008)	2841.3	2778.8
Other receivables	488.6	498.5
Inventories	2999.7	2493.2
Deferred income taxes	290.6	382.1
Prepaid expenses	824.7	374.6
TOTAL CURRENT ASSETS	10935.3	12453.3
OTHER ASSETS
Investments (Note 6)	1,239	1544.6
Goodwill and other intangibles - net (Note 3)	3790.3	3929.1
Sundry	2372.6	2659.3
Total other assets	7401.9	8,133
PROPERTY AND EQUIPMENT
Land, buildings, equipment, and construction-in-progress	15215.7	15315.9
Less allowances for depreciation	-6621.4	-6689.6
Land, buildings, equipment, and construction-in-progress, net	8594.3	8626.3
Total assets	26931.5	29212.6
CURRENT LIABILITIES
Short-term borrowings	1034.9	5846.3
Accounts payable	918.6	885.8
Employee compensation	569	771
Sales rebates and discounts	951	873.4
Dividends payable	538	536.8
Income taxes payable	342.8	229.2
Other current liabilities	2,635	3967.2
TOTAL CURRENT LIABILITIES	6989.3	13109.7
Long-term debt	6,688	4615.7
Accrued retirement benefit (Note 11)	2314.2	2387.6
Long-term income taxes payable (Note 10)	969.6	906.2
Deferred income taxes	79.4	74.7
Other noncurrent liabilities	1,331	1,381
Total noncurrent liabilities	11382.2	9365.2
SHAREHOLDERS' EQUITY (Notes 7 and 8)
Common stock	718.7	711.1
Additional paid-in capital	4455.4	3976.6
Retained earnings	9049.5	7654.9
Employee benefit trust	-3013.2	(2,635)
Deferred costs-ESOP	(82)	-86.3
Accumulated other comprehensive loss	-2466.8	-2786.8
Noncontrolling interests	-3.1	2.4
Shareholders' equity, including treasury shares	8658.5	6836.9
Less cost of common stock in treasury	98.5	99.2
Total shareholders' equity	8,560	6737.7
Total liabilities and shareholders' equity	26931.5	29212.6

1_CONSOLIDATED CONDENSED BALANC

CONSOLIDATED CONDENSED BALANCE SHEETS (Parenthetical) (USD $)
In Millions	Jun. 30, 2009	Dec. 31, 2008
Consolidated Condensed Balance Sheet (Parenthetical) [Abstract]
Accounts receivable, allowances	99.4	97.4

2_CONSOLIDATED CONDENSED STATEM

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (USD $)
In Millions	6 Months Ended Jun. 30, 2009	6 Months Ended Jun. 30, 2008
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	2471.6	2023.1
Adjustments to reconcile net income to cash flows from operating activities:
Payments related to the Eastern District of Pennsylvania settlement (Note 12)	-1392.8	0
Other changes in operating assets and liabilities, net of acquisitions	-1194.9	-51.3
Depreciation and amortization	612.3	559
Stock-based compensation expense	160.4	114.8
Deferred income taxes	340.1	-41.5
Acquired in-process research and development, net of tax	0	79.3
Other, net	14.5	100.1
NET CASH PROVIDED BY OPERATING ACTIVITIES	1011.2	2783.5
CASH FLOWS FROM INVESTING ACTIVITIES
Net purchases of property and equipment	-333.9	-450.6
Net change in short-term investments	457.8	-730.7
Purchases of noncurrent investments	-122.8	-979.3
Proceeds from sales and maturities of noncurrent investments	367.4	474.8
Purchase of in-process research and development	0	(122)
Other, net	-39.1	-66.3
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES	329.4	-1874.1
CASH FLOWS FROM FINANCING ACTIVITIES
Dividends paid	-1075.8	-1021.2
Net change in short-term borrowings	-4812.8	-349.3
Proceeds from issuance of long-term debt	2,400	0.1
Repayment of long-term debt	0	-7.4
Other, net	-3.4	-7.6
NET CASH USED IN FINANCING ACTIVITIES	(3,492)	-1385.4
Effect of exchange rate changes on cash and cash equivalents	(23)	123.8
NET DECREASE IN CASH AND CASH EQUIVALENTS	-2174.4	-352.2
Cash and cash equivalents at January 1	5496.7	3220.5
CASH AND CASH EQUIVALENTS AT JUNE 30	3322.3	2868.3

3_CONSOLIDATED CONDENSED STATEM

CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (USD $)
In Millions	3 Months Ended Jun. 30, 2009		3 Months Ended Jun. 30, 2008		6 Months Ended Jun. 30, 2009		6 Months Ended Jun. 30, 2008
Net income	1158.5		958.8		2471.6		2023.1
Other comprehensive income, net of tax	663.5	[1]	7.1	[1]	320	[1]	200.9	[1]
Comprehensive income	$1,822		965.9		2791.6		$2,224
[1]The significant components of other comprehensive income were gains from foreign currency translation adjustments of $596.4 million and $192.7 million for the three months and six months ended June 30, 2009, respectively. In addition, net unrealized gains on investment securities of $94.2 million and $97.0 million were included in other comprehensive income for the three months and six months ended June 30, 2009, respectively. The significant components of other comprehensive income for the six months ended June 30, 2008 were gains from foreign currency translation adjustments of $263.7 million, partially offset by net unrealized losses on investment securities of $60.4 million.

Segment Information

Segment Information
	6 Months Ended Jun. 30, 2009 USD / shares
Segment Information [Abstract]
Segment Information [Text Block]	SEGMENT INFORMATION We operate in one significant business segment human pharmaceutical products. Operations of our animal health business segment are not material and share many of the same economic and operating characteristics as human pharmaceutical products. Therefore, they are included with pharmaceutical products for purposes of segment reporting. Our business segments are distinguished by the ultimate end user of the product: humans or animals. Performance is evaluated based on profit or loss from operations before income taxes. Income before income taxes for the animal health business for the second quarters of 2009 and 2008 was $47.6 million and $28.4 million, respectively, and $83.3 million and $55.3 million for the six months ended June 30, 2009 and 2008, respectively. REVENUE BY CATEGORY Worldwide revenue by category was as follows: Three Months Ended June 30, Six Months Ended June 30, 2009 2008 2009 2008 (Dollars in millions) Net sales to unaffiliated customers Neurosciences............................................................ $2,185.7 $2,126.7 $ 4,263.4 $4,098.1 Endocrinology............................................................. 1,389.2 1,401.8 2,715.4 2,714.4 Oncology.................................................................... 762.4 715.1 1,491.6 1,388.5 Cardiovascular........................................................... 454.1 476.6 909.2 938.6 Animal health............................................................. 275.4 254.5 539.5 489.9 Other pharmaceuticals................................................ 46.5 59.1 86.0 113.7 Net product sales.......................................................... 5,113.3 5,033.8 10,005.1 9,743.2 Collaboration and other revenue..................................... 179.5 116.6 334.7 214.8 Total revenue................................................................ $5,292.8 $5,150.4 $10,339.8 $9,958.0

Basis of Presentation

Basis of Presentation
	6 Months Ended Jun. 30, 2009 USD / shares
Basis of Presentation [Abstract]
Basis of Presentation [Text Block]	We have prepared the accompanying unaudited consolidated condensed financial statements in accordance with the requirements of Form 10-Q and, therefore, they do not include all information and footnotes necessary for a fair presentation of financial position, results of operations, and cash flows in conformity with accounting principles generally accepted in the United States (GAAP). In our opinion, the financial statements reflect all adjustments (including those that are normal and recurring) that are necessary for a fair presentation of the results of operations for the periods shown. In preparing financial statements in conformity with GAAP, we must 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. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with our consolidated financial statements and accompanying notes included in our Annual Report on Form 10K for the year ended December 31, 2008. Certain reclassifications have been made to the December 31, 2008 consolidated condensed financial statements to conform with the June 30, 2009 presentation. We issued our financial statements by filing with the Securities and Exchange Commission on July 31, 2009. We have evaluated subsequent events up to the time of the filing.

Implementation of New Financial

Implementation of New Financial Accounting Pronouncements
	6 Months Ended Jun. 30, 2009 USD / shares
New Accounting Pronouncements [Abstract]
Schedule of New Accounting Pronouncements and Changes in Accounting Principles [Text Block]	The Financial Accounting Standards Board (FASB) Statement on Business Combinations was effective for us for business combinations with the acquisition date on or after January 1, 2009. This Statement changes the way in which the acquisition method is to be applied in a business combination. The primary revisions require an acquirer in a business combination to measure assets acquired, liabilities assumed, and any noncontrolling interest in the acquiree at the acquisition date, at their fair values as of that date, with limited exceptions specified in the Statement. This Statement also requires the acquirer in a business combination achieved in stages to recognize the identifiable assets and liabilities, as well as the noncontrolling interest in the acquiree, at the full amounts of their fair values (or other amounts determined in accordance with the Statement). Assets acquired and liabilities assumed arising from contractual contingencies as of the acquisition date are to be measured at their acquisition-date fair values, and assets or liabilities arising from all other contingencies as of the acquisition date are to be measured at their acquisition-date fair value, only if it is more likely than not that they meet the definition of an asset or a liability. This Statement significantly amends other authoritative guidance on Business Combinations as well, and now requires the capitalization of research and development assets acquired in a business combination at their acquisition-date fair values, separately from goodwill. The accounting for income taxes was also amended by this Statement to require the acquirer to recognize changes in the amount of its deferred tax benefits that are recognizable because of a business combination either in income from continuing operations in the period of the combination or directly in contributed capital, depending on the circumstances. We adopted the provisions of the FASB Statement on Consolidations relating to the accounting for noncontrolling interests on January 1, 2009. This Statement amends previous authoritative guidance, by requiring companies to report a noncontrolling interest in a subsidiary as equity in its consolidated financial statements. Disclosure of the amounts of consolidated net income attributable to the parent and the noncontrolling interest will be required. This Statement also clarifies that transactions that result in a change in a parents ownership interest in a subsidiary that do not result in deconsolidation will be treated as equity transactions, while a gain or loss will be recognized by the parent when a subsidiary is deconsolidated. We now classify our noncontrolling interest in a subsidiary as part of shareholders equity in our consolidated condensed statements of financial position at June 30, 2009 and reclassified the December 31, 2008 balances accordingly. The net income attributed to the noncontrolling interest in a subsidiary for the second quarters and first six months of 2009 and 2008 is not material and has not been separately disclosed in the consolidated condensed statements of income. We adopted the provisions of the FASB Statement on disclosures r

Acquisitions

Acquisitions
	6 Months Ended Jun. 30, 2009 USD / shares
Acquisitions [Abstract]
Acquisitions [Text Block]	During 2008 we acquired several businesses. These acquisitions were accounted for as business combinations under the purchase method of accounting. Under the purchase 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. Most of these acquisitions included in-process research and development (IPRD), which represented compounds, new indications, or line extensions under development that had not yet achieved regulatory approval for marketing. There are several methods that can be used to determine the estimated fair value of the IPRD acquired in a business combination. We utilized the income method, which applies a probability weighting to the estimated future net cash flows that are derived from projected sales revenues and estimated costs. These projections are based on factors such as relevant market size, patent protection, historical pricing of similar products, and expected industry trends. The estimated future net cash flows are then discounted to the present value using an appropriate discount rate. This analysis is performed for each project independently. Pursuant to the existing rules, these acquired IPRD intangible assets totaling $4.71 billion in 2008 were expensed immediately subsequent to the acquisition because the products had no alternative future use. None of these charges were incurred during the first or second quarters of 2008. The ongoing activities with respect to each of these products in development are not material to our research and development expenses. In addition to the acquisitions of businesses, we also acquired several products in development. The acquired IPRD related to these products of $122.0 million in 2008 was also written off by a charge to income immediately upon acquisition because the products had no alternative future use. ImClone Acquisition On November 24, 2008, we acquired all of the outstanding shares of ImClone Systems Inc. (ImClone), a biopharmaceutical company focused on advancing oncology care, for a total purchase price of approximately $6.5 billion, which was financed through borrowings. This strategic combination will offer both targeted therapies and oncolytic agents along with a pipeline spanning all phases of clinical development. The combination also expands our biotechnology capabilities. The acquisition has been accounted for as a business combination under the purchase method of accounting, resulting in goodwill of $419.5 million. No portion of this goodwill is expected to be deductible for tax purposes. Allocation of Purchase Price We are currently determining the fair values of a few of these net assets. The purchase price has been preliminarily allocat

Collaborations

Collaborations
	6 Months Ended Jun. 30, 2009 USD / shares
Collaborations [Abstract]
Collaborations [Text Block]	We often enter into collaborative arrangements to develop and commercialize drug candidates. Collaborative activities might 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 Prior to our acquisition, ImClone entered into several collaborations with respect to Erbitux, a product approved to fight cancer, while still in its development phase. The most significant collaborations operate in these geographic territories: 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. The following table summarizes the revenue recognized with respect to Erbitux: Three Months Ended June 30, 2009 Six Months Ended June 30, 2009 (Dollars in millions) Net product sales........................................... $ 23.9 $ 50.0 Collaboration and other revenue...................... 75.8 143.9 Total revenue................................................. $ 99.7 $ 193.9 Bristol-Myers Squibb Company Pursuant to a commercial agreement with Bristol-Myers Squibb Company and E.R. Squibb (collectively, BMS), relating to Erbitux, ImClone is co-developing and co-promoting Erbitux in the U.S. and Canada with BMS, exclusively, and in Japan with BMS and Merck KGaA. 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, up to threshold amounts, are the sole responsibility of BMS, with costs in excess of the thresholds shared by both companies according to a predetermined ratio. Responsibilities associated with clinical and other ongoing studies are apportioned between the parties as determined pursuant to the agreement. Collaborative reimbursements received by ImClone 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 consolida

Asset Impairments, Restructurin

Asset Impairments, Restructuring, and Other Special Charges
	6 Months Ended Jun. 30, 2009 USD / shares
Asset Impairments, Restructuring, and Other Special Charges [Abstract]
Asset Impairments, Restructuring, and Other Special Charges [Text Block]	The components of the charges included in asset impairments, restructuring, and other special charges in our consolidated condensed statements of income are described below. In the second quarter, we incurred other special charges of $105.0 million. We are in advanced discussions with the attorneys general for several states that were not part of the Eastern District of Pennsylvania settlement, seeking to resolve their Zyprexa-related claims, and we have reached settlement with the state of West Virginia. The charge represents the currently probable and estimable exposures in connection with the states claims. Refer to Note 12 for additional information. In the second quarter of 2008, we recognized restructuring and other special charges of $88.9 million. In addition, we recognized non-cash charges of $57.1 million for the write down of impaired manufacturing assets that had no future use, which were included in cost of sales. In April 2008, we announced a voluntary exit program that was offered to employees primarily in manufacturing. Components of the second-quarter restructuring charge include total severance costs of $53.5 million related to these programs and $35.4 million related to exit costs incurred during the second quarter in connection with previously announced strategic decisions made in prior periods. Substantially all of these costs were paid by the end of July 2008. In March 2008, we terminated development of our AIR Insulin program, which was being conducted in collaboration with Alkermes, Inc. The program had been in Phase III clinical development as a potential treatment for type 1 and type 2 diabetes. This decision was not a result of any observations during AIR Insulin trials relating to the safety of the product, but rather was a result of increasing uncertainties in the regulatory environment, and a thorough evaluation of the evolving commercial and clinical potential of the product compared to existing medical therapies. As a result of this decision, we halted our ongoing clinical studies and transitioned the AIR Insulin patients in these studies to other appropriate therapies. We implemented a patient program in the U.S., and other regions of the world where allowed, to provide clinical trial participants with appropriate financial support to fund their medications and diagnostic supplies through the end of 2008. We recognized asset impairment, restructuring, and other special charges of $145.7 million in the first quarter of 2008. These charges were primarily related to the decision to terminate development of AIR Insulin. Components of these charges included non-cash charges of $40.9 million for the write down of impaired manufacturing assets that had no use beyond the AIR Insulin program, as well as charges of $91.7 million for estimated contractual obligations and wind-down costs associated with the termination of clinical trials and certain development activities, and costs associated with the patient program to transition participants from AIR Insulin. This amount includes an estimate of Alkermes wind-down costs for which we were contractually obligated. The wind-down activities and p

Financial Instruments

Financial Instruments
	6 Months Ended Jun. 30, 2009 USD / shares
Financial Instruments [Abstract]
Financial Instruments [Text Block]	Financial instruments that potentially subject us to credit risk consist principally of trade receivables and interest-bearing investments. Wholesale distributors of life-sciences products account for a substantial portion of trade receivables; collateral is generally not required. The risk associated with this concentration is mitigated by our ongoing credit review procedures and insurance. Major financial institutions represent the largest component of our investments in corporate debt securities. In accordance with documented corporate policies, we limit the amount of credit exposure to any one financial institution or corporate issuer. We are exposed to credit-related losses in the event of nonperformance by counterparties to risk-management instruments but do not expect any counterparties to fail to meet their obligations given their high credit ratings. Accounting Policy for Risk-Management Instruments Our derivative activities are initiated within the guidelines of documented corporate risk-management policies and do not create additional risk because gains and losses on derivative contracts offset losses and gains on the assets, liabilities, and transactions being hedged. As derivative contracts are initiated, we designate the instruments individually as either a fair value hedge or a cash flow hedge. Management reviews the correlation and effectiveness of our derivatives on a quarterly basis. For derivative contracts that are designated and qualify as fair value hedges, the derivative instrument is marked to market with gains and losses recognized currently in income to offset the respective losses and gains recognized on the underlying exposure. For derivative contracts that are designated and qualify as cash flow hedges, the effective portion of gains and losses on these contracts is reported as a component of other comprehensive loss and reclassified into earnings in the same period the hedged transaction affects earnings. Hedge ineffectiveness is immediately recognized in earnings. Derivative contracts that are not designated as hedging instruments are recorded at fair value with the gain or loss recognized currently in earnings. We may enter into foreign currency forward and purchase option contracts to reduce the effect of fluctuating currency exchange rates (principally the euro, the British pound, and the Japanese yen). Foreign currency derivatives used for hedging are put in place using the same or like currencies and duration as the underlying exposures. Forward contracts are principally used to manage exposures arising from subsidiary trade and loan payables and receivables denominated in foreign currencies. These contracts are recorded at fair value with the gain or loss recognized in othernet, expense (income). The purchased option contracts are used to hedge anticipated foreign currency transactions, primarily intercompany inventory activities expected to occur within the next year. These contracts are designated as cash flow hedges of those future transactions, and the impact on earnings is included in cost of sales. We may enter into foreign currency forward contracts and currency swaps as fair

Stock-Based Compensation

Stock-Based Compensation
	6 Months Ended Jun. 30, 2009 USD / shares
Stock-Based Compensation [Abstract]
Stock-Based Compensation [Text Block]	Our stock-based compensation expense consists primarily of performance awards (PAs) and shareholder value awards (SVAs). We recognized pretax stock-based compensation expense of $94.3 million and $56.3 million in the second quarter of 2009 and 2008, respectively. In the first six months of 2009 and 2008, we recognized pretax stock-based compensation expense of $160.4 million and $114.8 million, respectively. 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 earnings-per share targets over a one-year and a two-year period. 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. As of June 30, 2009, the total remaining unrecognized compensation cost related to nonvested PAs amounted to $208.1 million, which will be amortized over the weighted-average remaining requisite service period of approximately 13 months. 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 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. As of June 30, 2009, the total remaining unrecognized compensation cost related to nonvested SVAs amounted to $68.6 million, which will be amortized over the weighted-average remaining requisite service period of approximately 25 months.

Shareholders' Equity

Shareholders' Equity
	6 Months Ended Jun. 30, 2009 USD / shares
Shareholders' Equity [Abstract]
Shareholders' Equity [Text Block]	As of June 30, 2009, we have purchased $2.58 billion of our previously announced $3.0 billion share repurchase program. During the first six months of 2009, we did not acquire any shares pursuant to this program, nor do we expect any share repurchases under this program for the remainder of 2009. In the first quarter of 2009, we contributed an additional 10 million shares to the employee benefit trust, which resulted in a reclassification within equity from additional-paid-in capital of $371.9 million and common stock of $6.3 million to the employee benefit trust of $378.2 million.

Earnings Per Share

Earnings Per Share
	6 Months Ended Jun. 30, 2009 USD / shares
Earnings Per Share [Abstract]
Earnings Per Share [Text Block]	Unless otherwise noted in the footnotes, all per-share amounts are presented on a diluted basis, that is, based on the weighted-average number of outstanding common shares plus the effect of all potentially dilutive common shares (primarily contingently issuable shares and unexercised stock options).

Income Taxes

Income Taxes
	6 Months Ended Jun. 30, 2009 USD / shares
Income Taxes [Abstract]
Income Taxes [Text Block]	We file income tax returns in the United States (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 2002. During the first quarter of 2008, we completed and effectively settled our Internal Revenue Service (IRS) audit of tax years 2001-2004 except for one matter for which we are seeking resolution through the IRS administrative appeals process. As a result of the IRS audit conclusion, gross unrecognized tax benefits were reduced by approximately $618 million, and the consolidated results of operations were benefited by $210.3 million through a reduction in income tax expense. The majority of the reduction in gross unrecognized tax benefits related to intercompany pricing positions that were agreed with the IRS in a prior audit cycle for which a prepayment of tax was made in 2005. Application of the prepayment and utilization of tax carryovers resulted in a refund of approximately $50 million. The IRS began its examination of tax years 2005-2007 during the third quarter of 2008. Considering the current status of the 2005-2007 IRS examination and potential for resolution of the IRS administrative appeals matter from the 2001-2004 audit, we believe it is reasonably possible that the gross unrecognized tax benefits may be reduced up to an estimated $210 million within the next 12 months. As a result, our consolidated results of operations could benefit up to $85 million through a reduction in income tax expense. We anticipate that up to $35 million of cash payments will be due upon such resolution after utilization of tax credit carryovers. While the IRS is currently examining tax years 2005-2007, the resolution of all issues in this audit period will likely extend beyond the next 12 months, as the ultimate resolution of all issues in this audit cycle are dependent upon a number of factors, including the potential for formal administrative and legal proceedings.

Retirement Benefits

Retirement Benefits
	6 Months Ended Jun. 30, 2009 USD / shares
Retirement Benefits [Abstract]
Retirement Benefits [Text Block]	Net pension and retiree health benefit expense included the following components: Defined Benefit Pension Plans Three Months Ended June 30, Six Months Ended June 30, 2009 2008 2009 2008 (Dollars in millions) Components of net periodic benefit cost Service cost....................................... $ 59.0 $ 61.0 $119.7 $125.3 Interest cost....................................... 104.1 102.9 207.5 205.8 Expected return on plan assets............ (143.1) (152.2) (285.4) (303.7) Amortization of prior service cost......... 1.8 1.8 3.6 3.6 Recognized actuarial loss.................... 20.1 19.4 41.7 38.6 Net periodic benefit cost...................... $ 41.9 $ 32.9 $ 87.1 $ 69.6 Retiree Health Benefit Plans Three Months Ended June 30, Six Months Ended June 30, 2009 2008 2009 2008 (Dollars in millions) Components of net periodic benefit cost Service cost....................................... $ 10.4 $ 16.6 $ 26.7 $ 31.0 Interest cost....................................... 29.8 26.5 58.5 53.0 Expected return on plan assets............ (29.5) (29.7) (58.9) (59.2) Amortization of prior service cost......... (9.0) (9.0) (18.0) (18.0) Recognized actuarial loss.................... 17.2 14.9 34.3 31.4 Net periodic benefit cost...................... $ 18.9 $ 19.3 $ 42.6 $ 38.2 In 2009, we expect to contribute approximately $65 million to our defined benefit pension plans to satisfy minimum funding requirements for the year. In addition, we expect to contribute approximately $105 million of additional discretionary funding in 2009 to our defined benefit plans. As of June 30, 2009, approximately $55 million of the total $170 million expected 2009 contributions has been contributed.

Contingencies

Contingencies
	6 Months Ended Jun. 30, 2009 USD / shares
Contingencies [Abstract]
Contingencies [Text Block]	We are a party to various legal actions, government investigations, and environmental proceedings. The most significant of these are described below. While it is not possible to determine the outcome of these matters, we believe that, except as specifically noted below, 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 patent litigation matters brought pursuant to procedures set out in the Hatch-Waxman Act (the Drug Price Competition and Patent Term Restoration Act of 1984): Cymbalta: Sixteen generic drug manufacturers have submitted Abbreviated New Drug Applications (ANDAs) seeking permission to market generic versions of Cymbalta prior to the expiration of our relevant U.S. patents (the earliest of which expires in 2013). Of these challengers, all allege non-infringement of the patent claims directed to the commercial formulation, and eight allege invalidity of the patent claims directed to the active ingredient duloxetine. Of the eight challengers to the compound patent claims, one further alleges invalidity of the claims directed to the use of Cymbalta for treating fibromyalgia, and one alleges the patent having claims directed to the active ingredient is unenforceable. Lawsuits have been filed in U.S. District Court for the Southern District of Indiana against Activis Elizabeth LLC; Aurobindo Pharma Ltd.; Cobalt Laboratories, Inc.; Impax Laboratories, Inc.; Lupin Limited; Sandoz Inc.; Sun Pharma Global, Inc.; and Wockhardt Limited, seeking rulings that the patents are valid, infringed, and enforceable. The cases have been consolidated and are proceeding. Gemzar: Sicor Pharmaceuticals, Inc. (Sicor), Mayne Pharma (USA) Inc. (Mayne), and SunPharmaceutical Industries Inc. (Sun) each submitted an ANDA seeking permission to market generic versions of Gemzar prior to the expiration of our relevant U.S.patents (compound patent expiring in 2010 and method-of-use patent expiring in 2013), and alleging that these patents are invalid. We filed lawsuits in the U.S.District Court for the Southern District of Indiana against Sicor (February 2006) and Mayne (October 2006 and January 2008), seeking rulings that these patents are valid and are being infringed. The suit against Sicor has been scheduled for trial in September 2009. Sicors ANDAs have been approved by the FDA; however, Sicor must provide 90 days notice prior to marketing generic Gemzar to allow time for us to seek a preliminary injunction. Both suits against Mayne have been administratively closed, and the parties have agreed to be bound by the results of the Sicor suit. In November 2007, Sun filed a declaratory judgment action in the United States District Court for the Eastern District of Michigan, seeking rulings that our method-of-use and compound patents are invalid or unenforceable, or would not be infringed by the sale of Suns generic product. The court heard arguments in July 2009 on Suns summary judgment motion for invali

Other-Net, Expense

Other-Net, Expense (Income)
	6 Months Ended Jun. 30, 2009 USD / shares
Other-Net, Expense (Income) [Abstract]
Other - Net, Expense (Income) [Text Block]	Other net, expense (income), consisted of the following: Three Months Ended June 30, Six Months Ended June 30, 2009 2008 2009 2008 (Dollars in millions) Interest expense............................................ $ 64.3 $ 42.6 $151.9 $ 102.4 Interest income.............................................. (18.8) (47.3) (46.2) (103.6) Other............................................................. (21.4) (27.6) (10.9) (51.4) $ 24.1 $(32.3) $ 94.8 $ (52.6)

Document Information

Document Information
	6 Months Ended Jun. 30, 2009 USD / shares
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Amendment Description	NA
Document Period End Date	2009-06-30

Entity Information

Entity Information (USD $)
In Millions, except Share data	6 Months Ended Jun. 30, 2009	Jul. 20, 2009	Jun. 30, 2008
Entity Information [Line Items]
Entity Registrant Name	Eli Lilly and Company
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			$46,687
Entity Listings [Line Items]
Entity Common Stock, Shares Outstanding		1,149,021,510