8-KEarnings & ResultsLeadership ChangesExhibits & Filings

ELI LILLY & Co 8-K Report, Financial Results (Oct 23, 2008)

Filed October 23, 2008For Securities:LLY

Summary

Eli Lilly & Company (LLY) filed an 8-K on October 23, 2008, to report its financial results for the quarter ended September 30, 2008, and to announce a new director appointment. The company detailed significant charges impacting its GAAP results for the quarter, primarily related to Zyprexa investigations and settlements, asset impairments from site closures, and acquired in-process research and development from acquisitions. These non-GAAP adjustments, which Lilly believes provide a clearer view of ongoing operations, are substantial and affect year-over-year comparisons. Investors should pay close attention to these adjustments when evaluating the company's underlying performance and future financial expectations. The filing also introduced Douglas R. Oberhelman as a new independent director to the board.

Key Highlights

  • 1Eli Lilly reported Q3 2008 results, with significant non-GAAP adjustments impacting net income.
  • 2A substantial charge of $1.477 billion (or $1.33 per share) was recorded due to pending Zyprexa investigations and multi-state resolutions.
  • 3Asset impairments and restructuring charges of $182.4 million (or $0.11 per share) were incurred, primarily linked to the sale of the Greenfield, Indiana site.
  • 4Acquired in-process research and development costs of $28.0 million (or $0.03 per share) related to the SGX acquisition were also noted.
  • 5The company provided non-GAAP financial information, excluding these items, to offer a clearer view of ongoing operational performance.
  • 6Douglas R. Oberhelman, Group President of Caterpillar, Inc., was elected to the Board of Directors and nominated for shareholder election.
  • 7The filing references prior period adjustments and special charges, emphasizing the company's ongoing use of non-GAAP measures for performance evaluation.

Frequently Asked Questions

The primary factors impacting Eli Lilly's GAAP earnings in Q3 2008 were significant charges related to the Zyprexa investigations and settlements ($1.477 billion), asset impairments and restructuring costs from site closures ($182.4 million), and acquired in-process research and development from acquisitions ($28.0 million).

Eli Lilly provides non-GAAP financial information to offer investors a view of their ongoing operations without the impact of highly variable and unpredictable items, such as litigation charges, restructuring costs, and R&D impairments. They believe this helps in making more meaningful period-over-period comparisons and identifying operating trends.

Douglas R. Oberhelman, Group President of Caterpillar, Inc., was elected to Eli Lilly's Board of Directors. He is nominated to stand for election by shareholders for a three-year term and will serve on the company's Audit and Finance committees.

Yes, the press release attached as Exhibit 99.1, which is part of this filing, provided financial expectations for the full year 2008 on both a GAAP and non-GAAP basis, including earnings per share.