Summary
Eli Lilly & Company (LLY) filed an 8-K on January 27, 2011, to report its fourth quarter and full-year 2010 financial results, along with providing initial financial guidance for 2011. The report highlights the company's use of non-GAAP financial measures to present a clearer view of ongoing operational performance, excluding items like restructuring charges, in-process R&D, asset impairments, and legal settlements. Key investor takeaways from the accompanying press release (Exhibit 99.1) include the company's financial performance for 2010 and the forward-looking outlook for 2011. The non-GAAP presentation aims to provide investors with a better understanding of core business trends and operational efficiency by removing the impact of significant, often one-time, charges and adjustments. Investors should carefully review both the GAAP and non-GAAP figures to gain a comprehensive understanding of Lilly's financial health and future prospects.
Key Highlights
- 1Eli Lilly reported fourth quarter and full fiscal year 2010 results via a press release filed with this 8-K.
- 2The company utilized non-GAAP financial measures (e.g., non-GAAP net income and EPS) to present results and provide 2011 guidance, excluding specific charges.
- 3Adjustments to GAAP results included restructuring charges, in-process R&D, asset impairments, and legal settlements.
- 4Specific adjustments detailed for 2010 and 2009 included severance costs, an Acrux Ltd. in-licensing deal, an Incyte Corporation licensing agreement, and Zyprexa state attorney general settlements.
- 5The company provided financial expectations for 2011, including non-GAAP EPS growth and revenue growth.
- 6Revenue growth guidance for 2011 excluded the anticipated decline in Zyprexa and Gemzar sales outside of Japan and the impact of U.S. healthcare reform.
- 7Lilly stated that non-GAAP measures help investors evaluate ongoing operations and identify trends, as management uses them internally for performance evaluation and resource allocation.