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This excerpt taken from the LLY 10-K filed Feb 22, 2010. Note 6: Financial
Instruments and Investments
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.
At December 31, 2009, we had outstanding foreign currency
forward commitments to purchase 518 million British pounds
and sell 578 million euro, commitments to purchase
194 million U.S. dollars and sell 131 million
euro, and commitments to buy 151 million euro and sell
218 million U.S. dollars, which will settle within
35 days.
At December 31, 2009, approximately 97 percent of our
total debt is at a fixed rate. We have converted approximately
65 percent of our fixed-rate debt to floating rates through
the use of interest rate swaps.
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