8-KEarnings & ResultsExhibits & Filings

ELI LILLY & Co 8-K Report, Financial Results (Jul 21, 2011)

Filed July 21, 2011For Securities:LLY

Summary

Eli Lilly and Company (LLY) filed an 8-K on July 21, 2011, primarily to report its financial results for the second quarter ended June 30, 2011. The filing includes a press release that details both GAAP and non-GAAP financial performance, along with management's outlook for the remainder of 2011. Investors should pay close attention to the company's use of non-GAAP measures, which management believes offer a clearer view of ongoing operations by excluding items such as restructuring charges and in-process research and development (R&D) expenses. The company also discussed the impact of foreign exchange rates and U.S. healthcare reform on its financial results. The non-GAAP presentation aims to provide more meaningful period-over-period comparisons and help identify operating trends that might otherwise be obscured by these excluded items. The management emphasizes that these non-GAAP measures are supplementary and should be considered alongside GAAP results.

Key Highlights

  • 1Reporting of Q2 2011 financial results and six-month performance.
  • 2Use of non-GAAP financial measures (net income, EPS) to present results, excluding restructuring and in-process R&D charges.
  • 3Explanation of why non-GAAP measures are used: to provide insight into ongoing operations and facilitate meaningful comparisons.
  • 4Discussion of the quantified impact of foreign exchange rate changes on Q2 2011 results compared to Q2 2010.
  • 5Disclosure of the impact of U.S. healthcare reform on Q2 2011 and year-to-date results.
  • 6Provision of financial expectations for the full year 2011, including both GAAP and non-GAAP earnings per share guidance.
  • 7Attachment of the detailed press release (Exhibit 99.1) with financial statements and comprehensive explanations of adjustments.

Frequently Asked Questions

The 8-K filing on July 21, 2011, announced Eli Lilly's financial results for the second quarter ended June 30, 2011. The filing refers to an attached press release (Exhibit 99.1) which contains the detailed income statement and other financial information for the quarter and the first six months of 2011.

Eli Lilly uses non-GAAP financial measures, such as non-GAAP net income and earnings per share, to provide investors with additional insight into the company's ongoing operations. These measures exclude certain items like restructuring charges and in-process R&D costs that can be highly variable, difficult to predict, and significant in size, potentially distorting period-over-period comparisons of underlying business performance.

The non-GAAP reporting by Eli Lilly for Q2 2011 excludes restructuring charges related to severance costs from strategic actions, and in-process R&D charges from collaborations (such as with Boehringer Ingelheim) and in-licensing transactions (like with Acrux). The company also quantifies the impact of foreign exchange rate changes and U.S. healthcare reform.

The filing indicates that Eli Lilly provided financial expectations for the full year 2011 in the accompanying press release. This guidance includes earnings per share expectations on both a GAAP basis and a non-GAAP basis, taking into account factors such as U.S. healthcare reform.