INDIANAPOLIS, April 24, 2014 /PRNewswire/ -- Eli Lilly and
Company (NYSE: LLY) today announced financial results for the first
quarter of 2014.
$ in millions, except
per share data
|
First
Quarter
|
%
|
|
2014
|
|
2013
|
Change
|
Total Revenue –
Reported
|
$4,683.1
|
|
$5,602.0
|
(16)%
|
Net Income –
Reported
|
727.9
|
|
1,548.0
|
(53)%
|
EPS –
Reported
|
0.68
|
|
1.42
|
(52)%
|
Net Income –
non-GAAP
|
749.9
|
|
1,247.7
|
(40)%
|
EPS –
non-GAAP
|
0.70
|
|
1.14
|
(39)%
|
Certain financial information for 2014 and 2013 are presented on
both a reported and a non-GAAP basis. Some numbers in this press
release may not add due to rounding. Reported results were prepared
in accordance with generally accepted accounting principles (GAAP)
and include all revenue and expenses recognized during the period.
Non-GAAP measures exclude the items described in the reconciliation
tables later in the release. The non-GAAP measures are presented in
order to provide additional insights into the underlying trends in
the company's business. The company's 2014 financial guidance is
also being provided on both a reported and a non-GAAP basis.
"Lilly's first-quarter results reflect the substantial decline
in revenue and earnings that we expected to encounter as a result
of the recent U.S. patent expirations for Cymbalta and Evista,"
said John C. Lechleiter, Ph.D.,
Lilly's chairman, president and chief executive officer. "Beyond
our financial performance, the initial months of 2014 have included
a series of key regulatory actions, pipeline announcements and
business development transactions that solidify the company's
future growth prospects, highlighted by the approval of Cyramza in
the U.S. and the announced acquisition of Novartis Animal
Health."
Key Events Over the Last Three Months
- The U.S. Food and Drug Administration (FDA) approved
Cyramza™ (ramucirumab) as a single-agent treatment for
patients with advanced or metastatic gastric cancer or
gastroesophageal junction (GEJ) adenocarcinoma with disease
progression on or after prior fluoropyrimidine- or
platinum-containing chemotherapy.
- The company announced an agreement to acquire Novartis Animal
Health in an all-cash transaction that will strengthen and
diversify Lilly's own animal health business, Elanco. Under the
terms of the agreement, Lilly will acquire all assets of Novartis
Animal Health for a total purchase price of approximately
$5.4 billion, including anticipated
tax benefits. The transaction is expected to close by the end of
the first quarter of 2015, subject to clearance under the
Hart-Scott-Rodino Antitrust Improvements Act, similar requirements
outside the U.S., and other customary closing conditions.
- The company and its alliance partner, Boehringer Ingelheim,
announced that the FDA accepted the filing of the New Drug
Application (NDA) for the investigational combination tablet of
empagliflozin and linagliptin for the treatment of adults with type
2 diabetes.
- The company announced positive top-line results for the REVEL
trial, a global Phase III study of ramucirumab in combination with
chemotherapy in patients with second-line non-small cell lung
cancer. The trial results showed a statistically significant
improvement in the primary endpoint of overall survival in the
ramucirumab-plus-docetaxel arm compared to the control arm of
placebo plus docetaxel. REVEL also showed a statistically
significant improvement in progression-free survival in the
ramucirumab arm compared to the control arm.
- The company announced positive top-line results of the sixth
AWARD trial for once-weekly dulaglutide, an investigational,
long-acting glucagon-like peptide 1 (GLP-1) receptor agonist being
studied as a treatment for type 2 diabetes. In the AWARD-6 study,
once-weekly dulaglutide 1.5 mg achieved the primary endpoint of
non-inferiority to once-daily liraglutide 1.8 mg, as measured by
the reduction of hemoglobin A1c (HbA1c) from baseline at 26
weeks.
- The Committee for Medicinal Products for Human Use (CHMP) of
the European Medicines Agency issued a positive opinion
recommending approval of empagliflozin, an investigational sodium
glucose co-transporter 2 (SGLT2) inhibitor, as an adjunct to diet
and exercise to improve glycemic control, or blood glucose levels,
in adults with type 2 diabetes.
- The FDA issued a complete response letter for the NDA of
empagliflozin. The company and its partner, Boehringer Ingelheim,
continue to expect FDA action in 2014.
- U.S. patent exclusivity for Evista® ended in March,
2014, resulting in the entry of generic competition. The company
reached a short-term agreement with Prasco Laboratories to supply
an authorized version of raloxifene (Evista).
- The company's animal health division, Elanco, announced an
agreement to acquire Lohmann SE (Lohmann Animal Health) for a
purchase price of approximately 440 million
euros. Lohmann Animal Health, a privately-held company
headquartered in Cuxhaven, Germany, is a global leader in poultry
vaccines and also markets a range of feed additives. The
transaction is expected to close in the second quarter of 2014,
contingent upon clearance from regulatory authorities and other
customary closing conditions.
- The U.S. District Court for the Southern District of
Indiana ruled in the company's
favor on the issues of validity and infringement regarding the
vitamin dosage regimen patent for Alimta®. The patent
provides intellectual property protection for Alimta in the U.S.
until 2022. In addition, the Regional Court of Düsseldorf in
Germany ruled in Lilly's favor on
the issue of infringement of the vitamin dosage regimen patent for
Alimta. The patent provides intellectual property protection for
Alimta in Germany until 2021.
- In the Actos product liability case of Terrence Allen, et al. v. Takeda Pharmaceuticals
North America, Inc. et al., a jury found in favor of the plaintiffs
and awarded $1.475 million in
compensatory damages. The allocation of liability was 75 percent
Takeda and 25 percent Lilly. The jury also awarded $6 billion in punitive damages from Takeda and
$3 billion from Lilly. Lilly
disagrees with the verdict and intends to vigorously challenge this
outcome through all available legal means. The agreement between
Lilly and Takeda calls for Takeda to defend and indemnify Lilly for
losses and expenses with respect to the U.S. litigation in
accordance with the terms of the agreement. After the verdict
was entered in Allen, Takeda
notified Lilly that it was reserving its right to challenge its
obligations to defend and indemnify Lilly with respect to the Allen
case only. Lilly believes it is entitled to full defense and
indemnification of its losses and expenses related to Allen and in
all other U.S. cases.
- A lawsuit was filed against the company by Sanofi-Aventis in
the U.S. District Court for the District of Delaware alleging patent infringement with
respect to LY2963016, a new insulin glargine product for which
Lilly is currently seeking approval from the FDA. Lilly respects
the intellectual property of others and does not believe the
application for approval of its new insulin glargine product
infringes any valid claim of the asserted patents.
First-Quarter Reported Results
In the first quarter of 2014, worldwide total revenue was
$4.683 billion, a decrease of 16
percent compared with the first quarter of 2013. The revenue
decline was comprised of 8 percent due to lower volume, 6 percent
due to lower prices, and 2 percent due to the unfavorable impact of
foreign exchange rates. The 8 percent decrease in worldwide
volume was driven by the loss of U.S. patent exclusivity for
Cymbalta® in December
2013, partially offset by volume gains outside the U.S. for
other products. The 6 percent decrease in worldwide price was
driven by the authorized generic arrangements for duloxetine
(Cymbalta) and raloxifene (Evista). Total revenue in the U.S.
decreased 34 percent to $2.084
billion driven primarily by lower demand for Cymbalta as
well as lower prices, primarily for Cymbalta and Evista. U.S.
revenue in the first quarter of 2014 was also negatively affected
by wholesaler buying patterns on various products. Total revenue
outside the U.S. increased 5 percent to $2.599 billion, driven by higher volume,
partially offset by the unfavorable impact of foreign exchange
rates, primarily the Japanese yen.
Gross margin decreased 22 percent to $3.460 billion in the first quarter of 2014,
driven by lower sales of Cymbalta due to the loss of U.S. patent
exclusivity. Gross margin as a percent of total revenue was 73.9
percent, a decrease of 5.4 percentage points compared with the
first quarter of 2013. The decrease in gross margin percent was
primarily due to lower sales of Cymbalta following its U.S. patent
expiration, and the unfavorable impact of foreign exchange rates on
international inventories sold.
Total operating expenses in the first quarter of 2014, defined
as the sum of research and development, marketing, selling and
administrative expenses, were $2.594
billion, a decrease of 14 percent compared with the first
quarter of 2013. Marketing, selling and administrative
expenses decreased 10 percent to $1.485
billion, due primarily to the reduction in U.S. sales and
marketing activities for Cymbalta and Evista, as well as ongoing
cost containment efforts. Research and development expenses
decreased 18 percent to $1.109
billion, or 23.7 percent of total revenue, driven primarily
by milestone payments and a charge for the discontinuation of the
rheumatoid arthritis program for tabalumab, both taken in the first
quarter of 2013, as well as lower clinical development costs in the
first quarter of 2014.
In the first quarters of 2014 and 2013, the company recognized
asset impairment, restructuring and other special charges of
$31.4 million and $21.7 million, respectively, primarily related to
ongoing actions the company is taking to reduce its cost
structure.
Operating income in the first quarter of 2014 was $834.8 million, a decrease of 41 percent compared
to the first quarter of 2013, driven by lower gross margin,
partially offset by lower operating expenses.
Other income (expense) was income of $56.0 million in the first quarter of 2014,
compared with income of $529.2
million in the first quarter of 2013. The first quarter of
2013 included income of $495.4
million related to the transfer of exenatide commercial
rights outside of the U.S. to Amylin.
The effective tax rate was 18.3 percent in the first quarter of
2014, compared with 20.7 percent in the first quarter of 2013. The
effective tax rate for the first quarter of 2014 includes a
discrete tax benefit of approximately $30
million, partially offset by the negative impact of the
expiration of the R&D tax credit in the U.S. at the end of
2013. The effective tax rate in the first quarter of 2013 reflects
the tax impact of the transfer of exenatide commercial rights
outside of the U.S. to Amylin, which was partially offset by the
one-time impact of the R&D tax credit for the full-year 2012,
which was recorded in the first quarter of 2013.
In the first quarter of 2014, net income decreased 53 percent
and earnings per share decreased 52 percent to $727.9 million and $0.68, respectively, compared with first-quarter
2013 net income of $1.548 billion and
earnings per share of $1.42. The
decreases in net income and earnings per share were driven by lower
operating income and lower other income.
First-Quarter 2014 non-GAAP Measures
On a non-GAAP basis, first-quarter 2014 operating income
decreased $577.4 million, or 40
percent, to $866.2 million, driven by
lower gross margin, partially offset by lower operating expenses.
The effective tax rate increased to 18.7 percent, compared with
15.5 percent in the first quarter of 2013. The effective tax
rate for the first quarter of 2014 includes a discrete tax benefit
of approximately $30 million,
partially offset by the expiration of the R&D tax credit in the
U.S. at the end of 2013, while the effective tax rate in the first
quarter of 2013 includes the one-time impact of the R&D tax
credit for the full year of 2012, which was recorded in the first
quarter of 2013. Net income decreased 40 percent and earnings per
share decreased 39 percent to $749.9
million and $0.70,
respectively, compared with $1.248
billion and $1.14 during the
first quarter of 2013.
Non-GAAP measures exclude items totaling $0.02 per share of expense in the first quarter
of 2014 and $0.28 per share of income
in the first quarter of 2013. For further detail, see the
reconciliation below as well as the Reconciliation of GAAP Reported
to Selected Non-GAAP Adjusted Information table later in this press
release.
|
First
Quarter
|
|
|
2014
|
|
2013
|
% Change
|
Earnings per share
(reported)
|
$0.68
|
|
$1.42
|
(52)%
|
Asset impairment,
restructuring and other special charges
|
.02
|
|
.01
|
|
Income related to
termination of the exenatide collaboration with Amylin
|
-
|
|
(.29)
|
|
Earnings per share
(non-GAAP)
|
$0.70
|
|
$1.14
|
(39)%
|
Revenue
Highlights
(Dollars in
millions)
|
First
Quarter
|
% Change
|
|
2014
|
|
2013
|
Over/(Under)
|
Humalog®
|
$650.0
|
|
$632.7
|
|
3%
|
|
Alimta
|
632.0
|
|
616.8
|
|
2%
|
|
Cialis®
|
532.4
|
|
515.0
|
|
3%
|
|
Cymbalta
|
478.2
|
|
1,328.2
|
|
(64)%
|
|
Humulin®
|
316.2
|
|
311.9
|
|
1%
|
|
Forteo®
|
300.4
|
|
281.5
|
|
7%
|
|
Zyprexa®
|
283.1
|
|
284.8
|
|
(1)%
|
|
Strattera®
|
154.4
|
|
166.7
|
|
(7)%
|
|
Evista
|
150.1
|
|
240.6
|
|
(38)%
|
|
Effient®
|
119.3
|
|
115.9
|
|
3%
|
|
Animal
Health
|
527.4
|
|
499.1
|
|
6%
|
|
Total
Revenue
|
$4,683.1
|
|
$5,602.0
|
|
(16)%
|
|
Humalog
For the first quarter of 2014, worldwide Humalog sales increased
3 percent, to $650.0 million. Sales
in the U.S. decreased 1 percent to $375.4
million, driven by lower net effective selling prices and
wholesaler buying patterns, largely offset by increased
demand. Sales outside the U.S. increased 8 percent to
$274.6 million, driven primarily by
increased volume, partially offset by the unfavorable impact of
foreign exchange rates.
Alimta
For the first quarter of 2014, Alimta generated sales of
$632.0 million, an increase of 2
percent compared with the first quarter of 2013. U.S. sales of
Alimta decreased 6 percent, to $245.8
million, driven by wholesaler buying patterns and, to a
lesser extent, lower net effective selling prices. Sales outside
the U.S. increased 9 percent, to $386.2
million, driven by increased volume, partially offset by the
unfavorable impact of foreign exchange rates.
Cialis
Cialis sales for the first quarter of 2014 increased 3 percent
to $532.4 million. U.S. sales of
Cialis were $205.3 million in the
first quarter, a 4 percent decrease compared with the first quarter
of 2013, driven by wholesaler buying patterns, partially offset by
higher prices. Sales of Cialis outside the U.S. increased 9
percent, to $327.1 million, driven by
increased volume and, to a lesser extent, higher prices, partially
offset by the unfavorable impact of foreign exchange rates.
Cymbalta
For the first quarter of 2014, Cymbalta generated $478.2 million in revenue, a decrease of 64
percent compared with the first quarter of 2013. U.S. sales of
Cymbalta decreased 83 percent, to $176.0
million, due to the loss of U.S. patent exclusivity in
December, 2013. Sales of Cymbalta outside the U.S. were
$302.2 million, an increase of 11
percent, driven primarily by higher volume, partially offset by the
unfavorable impact of foreign exchange rates.
Humulin
Worldwide Humulin sales increased 1 percent in the first quarter
of 2014, to $316.2 million. U.S.
sales decreased 5 percent to $154.8
million, driven by wholesaler buying patterns and lower net
effective selling prices, partially offset by increased demand.
Sales outside the U.S. increased 9 percent, to $161.4 million, driven by increased volume,
partially offset by the unfavorable impact of foreign exchange
rates.
Forteo
First-quarter 2014 sales of Forteo were $300.4 million, a 7 percent increase compared
with the first quarter of 2013. U.S. sales of Forteo decreased 10
percent to $100.9 million, driven by
wholesaler and retailer buying patterns, partially offset by higher
prices. Sales outside the U.S. increased 17 percent, to
$199.5 million, due to increased
volume in Japan, partially offset
by the unfavorable impact of foreign exchange rates.
Zyprexa
In the first quarter of 2014, Zyprexa sales totaled $283.1 million, a decrease of 1 percent compared
with the first quarter of 2013. U.S. sales of Zyprexa decreased 15
percent to $27.2 million. Zyprexa
sales outside the U.S. increased 1 percent, to $255.9 million, due to higher volume, partially
offset by the unfavorable impact of foreign exchange rates and, to
a lesser extent, lower prices.
Strattera
During the first quarter of 2014, Strattera generated
$154.4 million of sales, a decrease
of 7 percent compared with the first quarter of 2013. U.S. sales
decreased 21 percent to $83.1
million, driven primarily by lower demand and wholesaler
buying patterns. Sales outside the U.S. increased 17 percent
to $71.3 million, driven primarily by
increased volume in Japan,
partially offset by the unfavorable impact of foreign exchange
rates and lower prices.
Evista
Evista sales for the first quarter of 2014 decreased 38 percent
to $150.1 million. U.S. sales
of Evista decreased 43 percent to $98.0
million, due to the loss of U.S. patent exclusivity in
March, 2014. Despite a decline in demand for branded Evista,
U.S. volume increased in the first quarter of 2014 as a result of
sales of authorized raloxifene to Prasco. This volume
increase was more than offset by significant price reductions
attributable to authorized raloxifene. Sales outside the U.S.
decreased 25 percent to $52.1
million, driven by lower prices and the unfavorable impact
of foreign exchange rates, partially offset by increased
volume.
Effient
Effient sales were $119.3 million
in the first quarter of 2014, an increase of 3 percent compared
with the first quarter of 2013. U.S. Effient sales increased 5
percent to $87.8 million, driven by
higher prices, partially offset by wholesaler buying patterns.
Sales outside the U.S. decreased 2 percent to $31.5 million, driven by lower volume.
Animal Health
In the first quarter of 2014, worldwide animal health sales
totaled $527.4 million, an increase
of 6 percent compared with the first quarter of 2013, driven by
higher prices and increased volume, partially offset by the
unfavorable impact of foreign exchange rates. U.S. animal health
sales increased 4 percent, to $307.6
million, driven primarily by higher prices of companion
animal products. U.S. volume increases for food animal products
were offset by volume declines for companion animal products.
Animal health sales outside the U.S. were $219.8 million, an 8 percent increase, driven
primarily by higher volume for food animal products and, to a
lesser extent, higher prices, partially offset by the unfavorable
impact of foreign exchange rates.
2014 Financial Guidance
The company has revised certain elements of its 2014 financial
guidance. Full-year 2014 earnings per share are now expected to be
in the range of $2.70 to $2.78 on a
reported basis. On a non-GAAP basis, full-year 2014 earnings per
share are still expected to be in the range of $2.72 to $2.80.
|
2014
Expectations
|
|
2013
Results
|
|
% Change
|
Earnings per share
(reported)
|
$2.70 to
$2.78
|
|
$4.32
|
|
(38)% to
(36)%
|
Asset impairment,
restructuring and other special charges
|
.02
|
|
.08
|
|
|
Income related to
termination of the exenatide collaboration with Amylin
|
-
|
|
(.29)
|
|
|
Acquired in-process
research and development charge associated with CGRP
antibody
|
-
|
|
.03
|
|
|
Earnings per share
(non-GAAP)
|
$2.72 to
$2.80
|
|
$4.15
|
|
(34)% to
(33)%
|
The company has updated specific line-items of its 2014
financial guidance to reflect the impact of the Lohmann
acquisition, as well as movements in foreign exchange rates and the
discrete tax benefit recorded in the first quarter of 2014.
The company now anticipates 2014 revenue of between $19.4 billion and $20.0 billion. As described in
the company's initial guidance, patent expirations are expected to
drive a rapid and severe decline in U.S. Cymbalta and U.S. Evista
sales. These revenue declines are expected to be partially offset
by growth from a portfolio of other products including Humalog,
Trajenta®, Cialis, Forteo and Alimta, as well as the
animal health business. In addition, strong revenue growth is
expected in China, while a weaker
Japanese yen will dampen revenue growth in Japan.
The company now anticipates that gross margin as a percent of
revenue will be approximately 73 percent in 2014.
Total operating expenses in 2014 are expected to decrease
substantially compared to 2013. Marketing, selling and
administrative expenses are now expected in the range of
$6.3 billion to $6.6 billion.
Research and development expenses are still expected to be in the
range of $4.4 billion to $4.7
billion.
Other income (expense) is still expected to be in a range
between $100 million and $200 million
of income in 2014, benefited by gains of $150 million to $200 million on the sale of
equity investments acquired as part of past business development
transactions.
The 2014 tax rate is now expected to be approximately 19
percent, assuming a full-year 2014 benefit of the R&D tax
credit and other tax provisions up for extension. If these items
are not extended, the 2014 tax rate would be approximately 2
percentage points higher.
The company now expects 2014 net income to be at least
$2.9 billion and still expects
operating cash flow to be at least $4.0
billion. Operating cash flows are still expected to be
sufficient to pay the company's dividend of approximately
$2.1 billion, allow for capital
expenditures of approximately $1.3
billion, and fund certain business development activity and
share repurchases.
The company's 2014 financial guidance assumes that the
acquisition of Novartis Animal Health does not close during this
calendar year. Should the acquisition close during 2014, the
company will revise its 2014 financial guidance, if necessary.
Webcast of Conference Call
As previously announced, investors and the general public can
access a live webcast of the first-quarter 2014 financial results
conference call through a link on Lilly's website at www.lilly.com.
The conference call will be held today from 9:00 a.m. to 10:00 a.m. Eastern Daylight Time
(EDT) and will be available for replay via the website.
Lilly is a global healthcare leader that unites caring with
discovery to make life better for people around the world. We were
founded more than a century ago by a man committed to creating
high-quality medicines that meet real needs, and today we remain
true to that mission in all our work. Across the globe, Lilly
employees work to discover and bring life-changing medicines to
those who need them, improve the understanding and management of
disease, and give back to communities through philanthropy and
volunteerism. To learn more about Lilly, please visit us at
www.lilly.com and http://newsroom.lilly.com/social-channels.
F-LLY
This press release contains management's current intentions and
expectations for the future, all of which are forward-looking
statements within the meaning of Section 27A of the Securities Act
of 1933 and Section 21E of the Securities Exchange Act of 1934. The
words "estimate", "project", "intend", "expect", "believe",
"target" and similar expressions are intended to identify
forward-looking statements. Actual results may differ materially
due to various factors. There are significant risks and
uncertainties in pharmaceutical research and development. There can
be no guarantees with respect to pipeline products that the
products will receive the necessary clinical and manufacturing
regulatory approvals or that they will prove to be commercially
successful. Pharmaceutical products can develop unexpected safety
or efficacy concerns. The company's results may also be affected by
such factors as the timing of anticipated regulatory approvals and
launches of new products; market uptake of recently launched
products; competitive developments affecting current products; the
expiration of intellectual property protection for certain of the
company's products; the company's ability to protect and enforce
patents and other intellectual property; the impact of governmental
actions regarding pricing, importation, and reimbursement for
pharmaceuticals, including U.S. health care reform; regulatory
compliance problems or government investigations; regulatory
actions regarding currently marketed products; unexpected safety or
efficacy concerns associated with the company's products; issues
with product supply stemming from manufacturing difficulties or
disruptions; regulatory changes or other developments; changes in
patent law or regulations related to data-package exclusivity;
litigation involving current or future products; the extent to
which third party indemnification obligations relating to product
liability litigation and similar matters will be performed;
unauthorized disclosure of trade secrets or other confidential data
stored in the company's information systems and networks; changes
in tax law; changes in inflation, interest rates, and foreign
currency exchange rates; asset impairments and restructuring
charges; changes in accounting standards promulgated by the
Financial Accounting Standards Board and the SEC; acquisitions and
business development transactions; and the impact of exchange rates
and global macroeconomic conditions. For additional information
about the factors that could cause actual results to differ
materially from forward-looking statements, please see the
company's latest Form 10-Q and Form 10-K filed with the U.S.
Securities and Exchange Commission. You should not place undue
reliance on forward-looking statements, which speak only as of the
date of this release. Except as is required by law, the company
expressly disclaims any obligation to publicly release any
revisions to forward-looking statements to reflect events after the
date of this release.
#
#
#
Actos® (pioglitazone hydrochloride, Takeda)
Alimta® (pemetrexed, Lilly)
Cialis® (tadalafil, Lilly)
Cymbalta® (duloxetine hydrochloride, Lilly)
Cyramza™ (ramucirumab, Lilly)
Effient® (prasugrel, Lilly)
Evista® (raloxifene hydrochloride, Lilly)
Forteo® (teriparatide of recombinant DNA origin
injection, Lilly)
Humalog® (insulin lispro injection of recombinant DNA
origin, Lilly)
Humulin® (human insulin of recombinant DNA origin,
Lilly)
Strattera® (atomoxetine hydrochloride, Lilly)
Trajenta® (linagliptin, Boehringer Ingelheim)
Zyprexa® (olanzapine, Lilly)
Eli Lilly and Company
Employment Information
|
|
March 31,
2014
|
December 31,
2013
|
Worldwide
Employees
|
38,120
|
37,925
|
Eli Lilly and
Company
|
Operating Results
(Unaudited) – REPORTED
|
(Dollars in millions,
except per share data)
|
|
|
Three Months
Ended
|
|
|
|
March 31,
|
|
|
|
2014
|
|
2013
|
% Chg.
|
|
|
|
|
|
|
Total
revenue
|
$
|
4,683.1
|
$
|
5,602.0
|
(16)%
|
|
|
|
|
|
|
Cost of
sales
|
|
1,222.7
|
|
1,158.3
|
6%
|
Research and
development
|
|
1,109.3
|
|
1,348.1
|
(18)%
|
Marketing, selling
and administrative
|
|
1,484.9
|
|
1,652.0
|
(10)%
|
Asset impairment,
restructuring and other special charges
|
|
31.4
|
|
21.7
|
NM
|
|
|
|
|
|
|
Operating
income
|
|
834.8
|
|
1,421.9
|
(41)%
|
|
|
|
|
|
|
Net interest income
(expense)
Other income –
Special
|
|
(3.4)
|
|
(16.7)
|
|
|
|
-
|
|
495.4
|
|
Net other income (expense)
|
|
59.4
|
|
50.5
|
|
Other income
(expense)
|
|
56.0
|
|
529.2
|
NM
|
|
|
|
|
|
|
Income before income
taxes
|
|
890.8
|
|
1,951.1
|
(54)%
|
Income
taxes
|
|
162.9
|
|
403.1
|
(60)%
|
|
|
|
|
|
|
Net income
|
$
|
727.9
|
$
|
1,548.0
|
(53)%
|
|
|
|
|
|
|
Earnings per share –
diluted
|
$
|
0.68
|
$
|
1.42
|
(52)%
|
|
|
|
|
|
|
Dividends paid per
share
|
$
|
0.49
|
$
|
0.49
|
0%
|
Weighted-average
shares outstanding (thousands) – diluted
|
|
1,075,836
|
|
1,091,876
|
|
NM – not meaningful
Eli Lilly and
Company
|
|
Reconciliation of
GAAP Reported to Selected Non-GAAP Adjusted Information
(Unaudited)
|
|
(Dollars in millions,
except per share data)
|
|
|
|
|
Three Months
Ended
March 31,
2014
|
|
Three Months
Ended
March 31,
2013
|
|
|
|
GAAP
Reported
|
Adjustments
|
Non-GAAP
Adjusted(a)
|
|
GAAP
Reported
|
Adjustments
|
Non-GAAP
Adjusted(a)
|
|
|
|
|
|
|
|
|
Total
revenue
|
$
|
4,683.1
|
$
|
-
|
$
|
4,683.1
|
$
|
5,602.0
|
$
|
-
|
$
|
5,602.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
sales
|
|
1,222.7
|
|
-
|
|
1,222.7
|
|
1,158.3
|
|
-
|
|
1,158.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses(b)
|
|
2,594.2
|
|
-
|
|
2,594.2
|
|
3,000.1
|
|
-
|
|
3,000.1
|
Asset impairment,
restructuring and other special charges(c)
|
|
31.4
|
|
(31.4)
|
|
-
|
|
21.7
|
|
(21.7)
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense) (d)
|
|
56.0
|
|
-
|
|
56.0
|
|
529.2
|
|
(495.4)
|
|
33.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
taxes
|
|
162.9
|
|
9.4
|
|
172.3
|
|
403.1
|
|
(173.4)
|
|
229.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
727.9
|
|
22.0
|
|
749.9
|
|
1,548.0
|
|
(300.3)
|
|
1,247.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share –
diluted
|
0.68
|
|
0.02
|
|
0.70
|
|
1.42
|
|
(0.28)
|
|
1.14
|
|
|
|
|
|
|
|
|
|
|
|
|
Numbers do not add due to rounding.
(a) The company uses non-GAAP financial measures that
differ from financial statements reported in conformity with U.S.
generally accepted accounting principles (GAAP). The items that are
excluded when non-GAAP measures or expectations provided are
typically highly variable, difficult to predict, and of a size that
could have a substantial impact on the company's reported
operations for a period. The company believes that these non-GAAP
measures provide useful information to investors. Among other
things, they may help investors evaluate the company's ongoing
operations. They can assist in making meaningful period-over-period
comparisons and in identifying operating trends that would
otherwise be masked or distorted by the items subject to the
adjustments. Management uses these non-GAAP measures internally to
evaluate the performance of the business, including to allocate
resources and to evaluate results relative to incentive
compensation targets. Investors should consider these non-GAAP
measures in addition to, not as a substitute for or superior to,
measures of financial performance prepared in accordance with
GAAP.
(b) Operating expenses include research and
development, marketing, selling and administrative expenses.
(c) Certain GAAP reported measures have been adjusted
to eliminate asset impairment, restructuring and other special
charges. During the three months ended March 31, 2014, amounts
totaling $31.4 million (pretax), or $0.02 per share (after-tax), of
expense were eliminated primarily related to costs associated with
restructuring to reduce the company's cost structure. During the
three months ended March 31, 2013, amounts totaling $21.7 million
(pretax), or $0.01 per share (after-tax), of expense were
eliminated primarily related to severance costs from actions the
company was taking to reduce its cost structure.
(d) Certain GAAP reported measures have been adjusted
to eliminate a portion of other income (expense). During the three
months ended March 31, 2013, amounts
totaling $495.4 million (pretax), or
$0.29 per share (after-tax), of
income were eliminated related to the transfer of exenatide
commercial rights outside the U.S. to Amylin.
Refer to:
(317) 276-5795 – Mark Taylor
(Media)
(317) 655-6874 – Philip Johnson
(Investors)
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SOURCE Eli Lilly and Company