What are non-GAAP financial measures, and why does Lilly use them?

Non-GAAP financial measures are financial metrics that are adjusted to exclude certain items from the GAAP (Generally Accepted Accounting Principles) reported results. Lilly uses measures like non-GAAP net income and EPS to provide investors with what they believe is a clearer view of the company's ongoing operational performance by excluding items such as significant acquisitions, divestitures, and, starting in 2015, amortization of intangibles related to certain acquired/licensed products. They argue this helps in identifying operating trends and making meaningful comparisons.

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

Investors are advised to consider these non-GAAP measures in conjunction with, not as a substitute for, the company's GAAP financial results. Lilly itself states that non-GAAP measures can help evaluate ongoing operations and identify trends, but the official financial performance is prepared in accordance with GAAP. The filing also notes that prospective earnings guidance may be subject to similar adjustments.

Is the information in this filing legally binding in the same way as a standard filing?

No, the information in this Item 2.02 and the attached press release are considered 'furnished' to the SEC, not 'filed.' This means they are not subject to the liabilities under Section 18 of the Securities Exchange Act of 1934, which applies to information that is officially filed.

LLY 8-K: Earnings & Results

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

The primary purpose of this Form 8-K filing is to officially report Eli Lilly's financial results for the fourth quarter and the full year ended December 31, 2014, by attaching the press release and related financial statements that were issued on January 30, 2015.

Summary

Eli Lilly and Company (LLY) filed this Form 8-K on January 30, 2015, to report its financial results for the fourth quarter and the full year ended December 31, 2014. The filing primarily serves to attach the press release and related financial statements detailing these results. A key aspect of the report is Lilly's use of non-GAAP financial measures, such as non-GAAP net income and earnings per share, which exclude items like significant acquisitions, divestitures, and, starting in 2015, amortization of intangibles related to acquired/licensed marketed products. The company asserts that these non-GAAP measures offer investors a clearer view of ongoing operations and aid in trend analysis by excluding highly variable and unpredictable items. Investors are advised to consider these non-GAAP figures alongside the standard GAAP financial statements, as they are presented to provide additional insight into operational performance and comparative analysis. The company also notes that prospective earnings guidance may be subject to adjustments for similar items that are difficult to quantify in advance. This report, along with its exhibits, is furnished and not deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934.

Key Highlights

1Eli Lilly reported its Q4 and full-year 2014 financial results on January 30, 2015.
2The company utilized non-GAAP financial measures, including non-GAAP net income and EPS, in its earnings release.
3Non-GAAP measures exclude impacts from significant acquisitions and divestitures.
4Starting in 2015, non-GAAP reporting will also exclude amortization of intangibles from acquired/licensed marketed products.
5Lilly believes these non-GAAP measures provide investors with a better understanding of ongoing operations and facilitate period-over-period comparisons.
6The press release and related financial statements are attached as Exhibit 99.1.
7Information provided is furnished, not filed, and does not affect Section 18 of the Securities Exchange Act of 1934.

ELI LILLY & Co 8-K Report, Financial Results (Jan 30, 2015)

Summary

Key Highlights

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