What is the main purpose of this 8-K filing?

The main purpose of this 8-K filing is to announce Eli Lilly & Company's financial results for the quarter ended March 31, 2004, and to provide context on how the company presents its financial performance to investors, particularly through the use of non-GAAP financial measures.

Why does Eli Lilly use non-GAAP financial measures?

Eli Lilly uses non-GAAP measures to provide investors with a clearer view of ongoing operational performance. These measures exclude items that are typically highly variable, difficult to predict, and can significantly impact reported results, thereby allowing for more meaningful period-over-period comparisons and identification of operating trends.

How should investors interpret the use of non-GAAP measures?

Investors should consider these non-GAAP measures in addition to, and not as a substitute for or superior to, financial performance measures prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP). They are intended to supplement, rather than replace, the standard GAAP reporting.

LLY 8-K SEC Disclosure — Apr 19, 2004

Q: What specific items were excluded from the Q1 2004 adjusted earnings?

The adjusted earnings for Q1 2004 exclude a charge for acquired in-process research and development related to the acquisition of Applied Molecular Evolution, Inc.

Summary

Eli Lilly & Company (LLY) filed an 8-K on April 19, 2004, to announce its first-quarter 2004 financial results. The report highlights the company's use of non-GAAP financial measures, such as adjusted net income and diluted earnings per share, to provide a clearer view of ongoing operational performance. These adjusted figures exclude significant, often unpredictable, items that can distort period-over-period comparisons. Specifically, the first quarter of 2004's adjusted results exclude a charge for acquired in-process research and development related to the acquisition of Applied Molecular Evolution, Inc. This contrasts with the first quarter of 2003, where adjusted results excluded asset impairments, restructuring, and special charges. Lilly's management believes these non-GAAP metrics are valuable for investors to assess core business trends and make more meaningful comparisons, as they are also used internally for performance evaluation and resource allocation. Investors are advised to consider these non-GAAP measures in conjunction with, not as a replacement for, GAAP financials.

Key Highlights

1Announcement of Q1 2004 financial results on April 19, 2004.
2Company utilizes non-GAAP financial measures (adjusted net income and EPS) for investor clarity.
3Adjusted Q1 2004 results exclude a charge for acquired in-process R&D from the Applied Molecular Evolution, Inc. acquisition.
4Adjusted Q1 2003 results excluded asset impairments, restructuring, and special charges.
5Management believes non-GAAP measures aid in evaluating ongoing operations and identifying trends.
6Non-GAAP measures are used internally for performance assessment and resource allocation.
7Prospective earnings guidance may be adjusted for items similar to those excluded in non-GAAP calculations.

ELI LILLY & Co 8-K Report (Apr 19, 2004)

Summary

Key Highlights

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