Eli Lilly and Company (LLY)

Pension benefit costs include assumptions for the discount rate, retirement age, and expected return on plan assets. Retiree medical plan costs include assumptions for the discount rate, retirement age, expected return on plan assets, and health-care-cost trend rates. These assumptions have a significant effect on the amounts reported. In addition to the analysis below, see Note 13 to the consolidated financial statements for additional information regarding our retirement benefits.

 

Periodically, we evaluate the discount rate and the expected return on plan assets in our defined benefit pension and retiree health benefit plans. In evaluating these assumptions, we consider many factors, including an evaluation of the discount rates, expected return on plan assets, and health-care-cost trend

 

 

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Pension benefit costs include assumptions for the discount rate, retirement age, and expected return on plan assets. Retiree medical plan costs include assumptions for the discount rate, retirement age, expected return on plan assets, and health-care-cost trend rates. These assumptions have a significant effect on the amounts reported. In addition to the analysis below, see Note 13 to the consolidated financial statements for additional information regarding our retirement benefits.

 

Periodically, we evaluate the discount rate and the expected return on plan assets in our defined benefit pension and retiree health benefit plans. In evaluating these assumptions, we consider many factors, including an evaluation of the discount rates, expected return on plan assets, and health-care-cost trend rates of other companies; our historical assumptions compared with actual results; an analysis of current market conditions and asset allocations (approximately 88 percent to 92 percent of which are growth investments); and the views of leading financial advisers and economists. We use an actuarially determined, company-specific yield curve to determine the discount rate. In evaluating our expected retirement age assumption, we consider the retirement ages of our past employees eligible for pension and medical benefits together with our expectations of future retirement ages.

 

We believe our pension and retiree medical plan assumptions are appropriate based upon the above factors. If the health-care-cost trend rates were to be increased by one percentage point each future year, the aggregate of the service cost and interest cost components of the 2008 annual expense would increase by approximately $27 million. A one-percentage-point decrease would lower the aggregate of the 2008 service cost and interest cost by approximately $21 million. If the 2008 discount rate for the U.S. defined benefit pension and retiree health benefit plans (U.S. plans) were to be changed by a quarter percentage point, income before income taxes would change by approximately $26 million. If the 2008 expected return on plan assets for U.S. plans were to be changed by a quarter percentage point, income before income taxes would change by approximately $17 million. If our assumption regarding the 2008 expected age of future retirees for U.S. plans were adjusted by one year, our income before income taxes would be affected by approximately $28 million. The U.S. plans represent approximately 83 percent of the total accumulated postretirement benefit obligation and approximately 84 percent of total plan assets at December 31, 2008.

 

 

Pension benefit costs include assumptions for the discount rate,
retirement age, and expected return on plan assets. Retiree
medical plan costs include assumptions for the discount rate,
retirement age, expected return on plan assets, and
health-care-cost trend rates. These assumptions have a
significant effect on the amounts reported. In addition to the
analysis below, see Note 13 to the consolidated financial
statements for additional information regarding our retirement
benefits.

 

Periodically, we evaluate the discount rate and the expected
return on plan assets in our defined benefit pension and retiree
health benefit plans. In evaluating these assumptions, we
consider many factors, including an evaluation of the discount
rates, expected return on plan assets, and health-care-cost
trend rates of other companies; our historical assumptions
compared with actual results; an analysis of current market
conditions and asset allocations (approximately 88 percent
to 92 percent of which are growth investments); and the
views of leading financial advisers and economists. We use an
actuarially determined, company-specific yield curve to
determine the discount rate. In evaluating our expected
retirement age assumption, we consider the retirement ages of
our past employees eligible for pension and medical benefits
together with our expectations of future retirement ages.

 

We believe our pension and retiree medical plan assumptions are
appropriate based upon the above factors. If the
health-care-cost trend rates were to be increased by one
percentage point each future year, the aggregate of the service
cost and interest cost components of the 2008 annual expense
would increase by approximately $27 million. A
one-percentage-point decrease would lower the aggregate of the
2008 service cost and interest cost by approximately
$21 million. If the 2008 discount rate for the
U.S. defined benefit pension and retiree health benefit
plans (U.S. plans) were to be changed by a quarter
percentage point, income before income taxes would change by
approximately $26 million. If the 2008 expected return on
plan assets for U.S. plans were to be changed by a quarter
percentage point, income before income taxes would change by
approximately $17 million. If our assumption regarding the
2008 expected age of future retirees for U.S. plans were
adjusted by one year, our income before income taxes would be
affected by approximately $28 million. The U.S. plans
represent approximately 83 percent of the total accumulated
postretirement benefit obligation and approximately
84 percent of total plan assets at December 31, 2008.

 

 

Pension benefit costs include assumptions for the discount rate, retirement age, and expected return on plan assets. Retiree medical plan costs include assumptions for the discount rate, retirement age, expected return on plan assets, and health-care-cost trend rates. These assumptions have a significant effect on the amounts reported. In addition to the analysis below, see Note 13 to the consolidated financial statements for additional information regarding our retirement benefits.

 

Periodically, we evaluate the discount rate and the expected return on plan assets in our defined benefit pension and retiree health benefit plans. In evaluating these assumptions, we consider many factors, including an evaluation of the discount rates, expected return on plan assets and the health-care-cost trend rates of other companies; our historical assumptions compared with actual results; an analysis of current market conditions and asset allocations (approximately 85 percent to 95 percent of which are growth investments); and the views of leading financial advisers and economists. We use an actuarially determined, company-specific yield curve to determine the discount rate. In evaluating our expected retirement age assumption, we consider the retirement ages of our past employees eligible for pension and medical benefits together with our expectations of future retirement ages.

 

We believe our pension and retiree medical plan assumptions are appropriate based upon the above factors. If the health-care-cost trend rates were to be increased by one percentage point each future year, the aggregate of the service cost and interest cost components of the 2007 annual expense would increase by approximately $28 million. A one-percentage-point decrease would lower the aggregate of the 2007 service cost and interest cost by approximately $23 million. If the 2007 discount rate for the U.S. defined benefit pension and retiree health benefit plans (U.S. plans) were to be changed by a quarter percentage point, income before income taxes would change by approximately $32 million. If the 2007 expected return on plan assets for U.S. plans were to be changed by a quarter percentage point, income before income taxes would change by approximately $14 million. If our assumption regarding the 2007 expected age of future retirees for U.S. plans were adjusted by one year, our income before income taxes would be affected by approximately $31 million. The U.S. plans represent approximately 80 percent of the total accumulated postretirement benefit obligation and approximately 83 percent of total plan assets at December 31, 2007.

 

 

Pension benefit costs include assumptions for the discount rate,
retirement age, and expected return on plan assets. Retiree
medical plan costs include assumptions for the discount rate,
retirement age, expected return on plan assets, and
health-care-cost trend rates. These assumptions have a
significant effect on the amounts reported. In addition to the
analysis below, see Note 13 to the consolidated financial
statements for additional information regarding our retirement
benefits.

 

Periodically, we evaluate the discount rate and the expected
return on plan assets in our defined benefit pension and retiree
health benefit plans. In evaluating these assumptions, we
consider many factors, including an evaluation of the discount
rates, expected return on plan assets and the health-care-cost
trend rates of other companies; our historical assumptions
compared with actual results; an analysis of current market
conditions and asset allocations (approximately 85 percent
to 95 percent of which are growth investments); and the
views of leading financial advisers and economists. We use an
actuarially determined, company-specific yield curve to
determine the discount rate. In evaluating our expected
retirement age assumption, we consider the retirement ages of
our past employees eligible for pension and medical benefits
together with our expectations of future retirement ages.

 

We believe our pension and retiree medical plan assumptions are
appropriate based upon the above factors. If the
health-care-cost trend rates were to be increased by one
percentage point each future year, the aggregate of the service
cost and interest cost components of the 2007 annual expense
would increase by approximately $28 million. A
one-percentage-point decrease would lower the aggregate of the
2007 service cost and interest cost by approximately
$23 million. If the 2007 discount rate for the
U.S. defined benefit pension and retiree health benefit
plans (U.S. plans) were to be changed by a quarter
percentage point, income before income taxes would change by
approximately $32 million. If the 2007 expected return on
plan assets for U.S. plans were to be changed by a quarter
percentage point, income before income taxes would change by
approximately $14 million. If our assumption regarding the
2007 expected age of future retirees for U.S. plans were
adjusted by one year, our income before income taxes would be
affected by approximately $31 million. The U.S. plans
represent approximately 80 percent of the total accumulated
postretirement benefit obligation and approximately
83 percent of total plan assets at December 31, 2007.

 

 

Pension benefit costs include assumptions for the discount rate, retirement age, and expected return on plan assets. Retiree medical plan costs include assumptions for the discount rate, retirement age, expected return on plan assets, and health-care-cost trend rates. These assumptions have a significant effect on the amounts reported. In addition to the analysis below, see Note 12 to the consolidated financial statements for additional information regarding our retirement benefits.

 

Periodically, we evaluate the discount rate and the expected return on plan assets in our defined benefit pension and retiree health benefit plans. In evaluating these assumptions, we consider many factors, including an evaluation of the discount rates, expected return on plan assets and the health-care-cost trend rates of other companies; our historical assumptions compared with actual results; an analysis of current market conditions and asset allocations (approximately 85 percent to 95 percent of which are growth investments); and the views of leading financial advisers and economists. We use an actuarially determined, company-specific yield curve to determine the discount rate. In evaluating our expected retirement age assumption, we consider the retirement ages of our past employees eligible for pension and medical benefits together with our expectations of future retirement ages.

 

We believe our pension and retiree medical plan assumptions are appropriate based upon the above factors. If the health-care-cost trend rates were to be increased by one percentage point each future year, the aggregate of the service cost and interest cost components of the 2007 annual expense would increase by approximately $28 million. A one-percentage-point decrease would lower the aggregate of the 2007 service cost and interest cost by approximately $23 million. If the 2007 discount rate for the U.S. defined benefit pension and retiree health benefit plans (U.S. plans) were to be changed by a quarter percentage point, income before income taxes would change by approximately $32 million. If the 2007 expected return on plan assets for U.S. plans were to be changed by a quarter percentage point, income before income taxes would change by approximately $14 million. If our assumption regarding the 2007 expected age of future retirees for U.S. plans were adjusted by one year, our income before income taxes would be affected by approximately $31 million. The U.S. plans represent approximately 80 percent of the total accumulated postretirement benefit obligation and approximately 83 percent of total plan assets at December 31, 2007.

 

 

Pension benefit costs include assumptions for the discount rate,
retirement age, and expected return on plan assets. Retiree
medical plan costs include assumptions for the discount rate,
retirement age, expected return on plan assets, and
health-care-cost trend rates. These assumptions have a
significant effect on the amounts reported. In addition to the
analysis below, see Note 12 to the consolidated financial
statements for additional information regarding our retirement
benefits.

 

Periodically, we evaluate the discount rate and the expected
return on plan assets in our defined benefit pension and retiree
health benefit plans. In evaluating these assumptions, we
consider many factors, including an evaluation of the discount
rates, expected return on plan assets and the health-care-cost
trend rates of other companies; our historical assumptions
compared with actual results; an analysis of current market
conditions and asset allocations (approximately 85 percent
to 95 percent of which are growth investments); and the
views of leading financial advisers and economists. We use an
actuarially determined, company-specific yield curve to
determine the discount rate. In evaluating our expected
retirement age assumption, we consider the retirement ages of
our past employees eligible for pension and medical benefits
together with our expectations of future retirement ages.

 

We believe our pension and retiree medical plan assumptions are
appropriate based upon the above factors. If the
health-care-cost trend rates were to be increased by one
percentage point each future year, the aggregate of the service
cost and interest cost components of the 2007 annual expense
would increase by approximately $28 million. A
one-percentage-point decrease would lower the aggregate of the
2007 service cost and interest cost by approximately
$23 million. If the 2007 discount rate for the
U.S. defined benefit pension and retiree health benefit
plans (U.S. plans) were to be changed by a quarter
percentage point, income before income taxes would change by
approximately $32 million. If the 2007 expected return on
plan assets for U.S. plans were to be changed by a quarter
percentage point, income before income taxes would change by
approximately $14 million. If our assumption regarding the
2007 expected age of future retirees for U.S. plans were
adjusted by one year, our income before income taxes would be
affected by approximately $31 million. The U.S. plans
represent approximately 80 percent of the total accumulated
postretirement benefit obligation and approximately
83 percent of total plan assets at December 31, 2007.

 

 

Pension benefit costs include assumptions for the discount rate, retirement age, and expected return on plan assets. Retiree medical plan costs include assumptions for the discount rate, retirement age, expected return on plan assets, and health-care-cost trend rates. These assumptions have a significant effect on the amounts