Lilly Reports Second-Quarter Results
$ in millions, except per share data |
Second Quarter |
% | ||||||
2017 |
2016 |
Change | ||||||
Revenue |
$ |
5,824.3 |
$ |
5,404.8 |
8% | |||
Net Income - Reported |
1,008.0 |
747.7 |
35% | |||||
EPS - Reported
|
0.95 |
0.71 |
34% | |||||
Net Income - Non-GAAP |
1,177.4 |
908.8 |
30% | |||||
EPS - Non-GAAP |
1.11 |
0.86 |
29% |
Certain financial information for 2017 and 2016 is presented on both a reported and a non-GAAP basis. Some numbers in this press release may not add due to rounding. Reported results were prepared in accordance with generally accepted accounting principles (GAAP) and include all revenue and expenses recognized during the periods. Non-GAAP measures exclude the items described in the reconciliation tables later in the release. The company's 2017 financial guidance is also being provided on both a reported and a non-GAAP basis. The non-GAAP measures are presented to provide additional insights into the underlying trends in the company's business.
"Lilly delivered strong revenue growth in the second quarter, building on the momentum of Trulicity, Taltz and the other new products in our portfolio," said
Today the company is providing an update to its oncology research and development strategy. In addition to building upon new oncology products such as Cyramza® (ramucirumab), Lartruvo™ (olaratumab) and abemaciclib, Lilly will pursue new standard-of-care changing therapies that target tumor dependencies in molecularly enriched populations, build rational combinations that overcome resistance, and develop next-generation immunotherapies. Using this framework, Lilly will now focus on seven pipeline assets for priority internal development and three additional assets which are pending data from ongoing trials. The company has or will seek external partners on the other molecules in clinical development as appropriate.
Additional details will be provided in the company's 2017 second-quarter earnings call.
Key Events Over the Last Three Months
Regulatory
- The
U.S. Food and Drug Administration (FDA) granted Priority Review designation for abemaciclib, a cyclin-dependent kinase (CDK) 4 & 6 inhibitor. The company's submission of abemaciclib includes two indications: abemaciclib monotherapy for patients with hormone-receptor-positive (HR+), human epidermal growth factor receptor 2-negative (HER2-) advanced breast cancer who had prior endocrine therapy and chemotherapy for metastatic disease; and abemaciclib in combination with fulvestrant in women with HR+, HER2- advanced breast cancer who had disease progression following endocrine therapy. - The
FDA granted Fast Track designation for tanezumab for the treatment of chronic pain in patients with osteoarthritis and chronic low back pain. Tanezumab, which is being studied in collaboration with Pfizer, is an investigational humanized monoclonal antibody that selectively targets, binds to and inhibits nerve growth factor. - The company and Incyte announced that a resubmission to the
FDA for the New Drug Application (NDA) for baricitinib, a once-daily oral medication for the treatment of moderate-to-severe rheumatoid arthritis, will be delayed beyond 2017. The companies will be further discussing the path forward with the agency and evaluating options for resubmission, including the potential for an additional clinical study, as requested by theFDA . The length of time to a resubmission for the NDA will depend on which option the companies pursue and furtherFDA discussions, but is anticipated to be a minimum of 18 months. Japan's Ministry of Health, Labor and Welfare granted marketing approval for Olumiant® (baricitinib) 2-mg and 4-mg tablets for the treatment of rheumatoid arthritis (including the prevention of structural injury of joints) in patients with inadequate response to standard-of-care therapies. Olumiant is part of a collaboration with Incyte.
Clinical
- The company announced that galcanezumab, an investigational treatment for the prevention of episodic and chronic migraine, met its primary endpoint in three Phase 3 studies demonstrating statistically significant reductions in the number of monthly migraine headache days compared to placebo at both studied doses.
- The company announced that a Phase 3 study of Cyramza met its primary endpoint of progression-free survival, demonstrating a statistically significant improvement. The Phase 3 global, randomized, double-blinded, placebo-controlled trial is evaluating ramucirumab in combination with docetaxel in patients with locally advanced or unresectable or metastatic urothelial carcinoma whose disease progressed on or after platinum-based chemotherapy.
- The company passed an interim analysis in a Phase 3 study of lanabecestat in patients with early Alzheimer's disease. As a result, Lilly will make a
$50 million milestone payment in the third quarter of 2017 as part of the company's collaboration with AstraZeneca.
Business Development/Other
The UK Supreme Court has decided in the litigation relating to alternative salt forms of Alimta® (pemetrexed disodium) that Actavis's products directly infringe Lilly's vitamin regimen patents in theUK ,France ,Italy andSpain .The UK Supreme Court also affirmed the indirect infringement finding by theUK Court of Appeal .- The company entered into a settlement agreement with generic companies to resolve pending patent litigation in the
U.S. District Court for the Eastern District of Virginia regarding the Cialis® (tadalafil) unit dose patent. This patent was set to expire onApril 26, 2020 . As part of the agreement, Cialis exclusivity is now expected to end at the earliest onSeptember 27, 2018 . - The company and Nektar Therapeutics announced a strategic collaboration to co-develop NKTR-358, a novel immunological therapy discovered by Nektar. NKTR-358, which achieved first human dose in Phase 1 clinical development in March of 2017, has the potential to treat a number of autoimmune and other chronic inflammatory conditions. Subject to clearance under the Hart-Scott-Rodino Antitrust Improvements Act and other customary closing conditions, Lilly expects to provide an initial payment of
$150 million to Nektar in 2017. - The company and KeyBioscience entered into a new collaboration focused on the development of Dual Amylin Calcitonin Receptor Agonists (DACRAs), a potential new class of treatments for metabolic disorders such as type 2 diabetes. Lilly will provide an initial payment of
$55 million to KeyBioscience in the third quarter of 2017. - The company and
Purdue University announced a strategic collaboration to conduct life science research in a five-year agreement, where Lilly will provide up to$52 million . - The company announced completion of a
$90 million expansion of its Biotechnology Center inSan Diego, California . Lilly's new space will help foster and accelerate the discovery of medicines within the company's core therapeutic areas of immunology, diabetes, oncology and neurodegeneration, as well as the emerging area of pain.
Second-Quarter Reported Results
In the second quarter of 2017, worldwide revenue was
Revenue in the
Revenue outside the
Gross margin increased 8 percent, to
Operating expenses in the second quarter of 2017, defined as the sum of research and development, and marketing, selling and administrative expenses, remained flat at
In the second quarter of 2017, the company recognized asset impairment, restructuring and other special charges of
Operating income in the second quarter of 2017 was
Other income (expense) was expense of
The effective tax rate was 20.0 percent in the second quarter of 2017, compared with 20.8 percent in the second quarter of 2016.
In the second quarter of 2017, net income increased 35 percent, to
Second-Quarter Non-GAAP Measures
On a non-GAAP basis, second-quarter 2017 gross margin increased 9 percent, to
Operating expenses were 50.8 percent of revenue in the second quarter of 2017, a reduction of 3.9 percentage points compared with the second quarter of 2016, as a result of higher revenue and flat operating expenses.
Operating income increased
The effective tax rate was 21.7 percent in the second quarter of 2017, compared with 22.4 percent in the second quarter of 2016.
In the second quarter of 2017, net income increased 30 percent, to
For further detail of non-GAAP measures, see the reconciliation below as well as the Reconciliation of GAAP Reported to Selected Non-GAAP Adjusted Information table later in this press release.
Second Quarter | ||||||||
2017 |
2016 |
% Change | ||||||
Earnings per share (reported) |
$ |
0.95 |
$ |
0.71 |
34% | |||
Amortization of intangible assets |
.12 |
.11 |
||||||
Asset impairment, restructuring and other special charges |
.03 |
.04 |
||||||
Inventory step up costs associated with the acquisition of |
.01 |
— |
||||||
Earnings per share (non-GAAP) |
$ |
1.11 |
$ |
0.86 |
29% | |||
Numbers may not add due to rounding. |
Year-to-Date Results
For the first six months of 2017, worldwide revenue increased 8 percent, to
Year-to-Date Non-GAAP Measures
For further detail of non-GAAP measures, see the reconciliation below as well as the Reconciliation of GAAP Reported to Selected Non-GAAP Adjusted Information table later in this press release.
Year-to-Date | ||||||||
2017 |
2016 |
% Change | ||||||
Earnings per share (reported) |
$ |
0.85 |
$ |
1.12 |
(24)% | |||
Acquired in-process research and development |
.81 |
— |
||||||
Amortization of intangible assets |
.23 |
.22 |
||||||
Asset impairment, restructuring and other special charges |
.19 |
.16 |
||||||
Inventory step up costs associated with the acquisition of |
.02 |
— |
||||||
|
— |
.19 |
||||||
Earnings per share (non-GAAP) |
$ |
2.10 |
$ |
1.69 |
24% | |||
Numbers may not add due to rounding.
|
Select Revenue Highlights
|
|||||||||||||||||||||
(Dollars in millions) |
Second Quarter |
Year-to-Date |
|||||||||||||||||||
|
2017 |
2016 |
% Change |
2017 |
2016 |
% Change |
|||||||||||||||
Humalog® |
$ |
678.4 |
$ |
701.9 |
(3)% |
$ |
1,386.8 |
$ |
1,308.2 |
6% |
|||||||||||
Cialis |
627.3 |
630.5 |
(0)% |
1,160.9 |
1,207.2 |
(4)% |
|||||||||||||||
Alimta |
532.9 |
607.1 |
(12)% |
1,022.8 |
1,171.3 |
(13)% |
|||||||||||||||
Forteo |
446.7 |
367.6 |
22% |
794.2 |
686.3 |
16% |
|||||||||||||||
Humulin® |
357.8 |
332.3 |
8% |
672.3 |
688.7 |
(2)% |
|||||||||||||||
Strattera |
186.6 |
224.6 |
(17)% |
382.8 |
412.7 |
(7)% |
|||||||||||||||
Cymbalta |
206.6 |
236.5 |
(13)% |
381.2 |
435.2 |
(12)% |
|||||||||||||||
Erbitux® |
159.1 |
180.6 |
(12)% |
313.5 |
348.6 |
(10)% |
|||||||||||||||
Zyprexa |
140.8 |
210.7 |
(33)% |
288.3 |
423.4 |
(32)% |
|||||||||||||||
Effient® |
142.9 |
135.1 |
6% |
270.7 |
266.6 |
2% |
|||||||||||||||
|
|||||||||||||||||||||
Trulicity |
480.2 |
201.3 |
139% |
853.1 |
344.9 |
147% |
|||||||||||||||
Cyramza |
186.3 |
147.0 |
27% |
357.6 |
278.0 |
29% |
|||||||||||||||
Taltz |
138.7 |
19.3 |
618% |
235.4 |
19.3 |
1,118% |
|||||||||||||||
Jardiance(a) |
103.2 |
40.1 |
157% |
177.1 |
78.3 |
126% |
|||||||||||||||
Basaglar |
86.6 |
16.3 |
432% |
132.6 |
27.2 |
388% |
|||||||||||||||
Lartruvo |
47.4 |
— |
NM |
89.5 |
— |
NM |
|||||||||||||||
Olumiant |
4.8 |
— |
NM |
6.6 |
— |
NM |
|||||||||||||||
Portrazza® |
2.3 |
4.0 |
(43)% |
5.9 |
5.7 |
3% |
|||||||||||||||
Subtotal |
1,049.5 |
428.0 |
145.2% |
1,857.8 |
753.4 |
146.6% |
|||||||||||||||
|
784.8 |
859.8 |
(9)% |
1,554.2 |
1,614.4 |
(4)% |
|||||||||||||||
Total Revenue |
5,824.3 |
5,404.8 |
8% |
11,052.6 |
10,269.9 |
8% |
|||||||||||||||
(a) Jardiance includes Glyxambi® and Synjardy® NM - not meaningful Numbers may not add due to rounding |
|||||||||||||||||||||
Humalog
For the second quarter of 2017, worldwide Humalog revenue decreased 3 percent compared with the second quarter of 2016, to
Cialis
For the second quarter of 2017, worldwide Cialis revenue remained flat at
Alimta
For the second quarter of 2017, Alimta generated worldwide revenue of
Forteo
Second-quarter 2017 worldwide revenue for Forteo was
Humulin
Worldwide Humulin revenue for the second quarter of 2017 increased 8 percent compared with the second quarter of 2016, to
Trulicity
Second-quarter 2017 worldwide Trulicity revenue was
Cyramza
For the second quarter of 2017, worldwide Cyramza revenue was
Taltz
For the second quarter of 2017, Taltz generated worldwide revenue of
Jardiance
The company's worldwide Jardiance revenue during the second quarter of 2017 was
Basaglar
For the second quarter of 2017, Basaglar generated worldwide revenue of
Lartruvo
For the second quarter of 2017, Lartruvo, a treatment in combination with doxorubicin for a subset of adult patients with advanced soft tissue sarcoma, generated worldwide revenue of
Olumiant
For the second quarter of 2017, Olumiant, a treatment for moderate-to-severe rheumatoid arthritis, generated worldwide revenue of
In the second quarter of 2017, worldwide animal health revenue totaled
2017 Financial Guidance
The company has revised certain elements of its 2017 financial guidance on a reported basis and on a non-GAAP basis. Earnings per share for 2017 are being decreased to be in the range of
2017 Expectations |
% Change from 2016 | |
Earnings per share (reported) |
|
(3)% to 1% |
Acquired in-process research and development charges related to the acquisition of |
.94 |
|
Amortization of intangible assets (1) |
.44 |
|
Asset impairment, restructuring and other special charges, including |
.19 |
|
Inventory step-up costs associated with the acquisition of |
.03 |
|
Earnings per share (non-GAAP) |
|
16% to 19% |
(1) Subject to acquisition accounting adjustments |
||
Numbers may not add due to rounding |
The company now anticipates 2017 revenue between
Gross margin percentage is now expected to be approximately 72.5 percent on a reported basis, and approximately 76.0 percent on a non-GAAP basis.
Marketing, selling and administrative expenses are still expected to be in the range of $6.4 billion to
The 2017 tax rate is now expected to be approximately 23.5 percent on a reported basis. The 2017 tax rate is still expected to be approximately 22.0 percent on a non-GAAP basis.
The following table summarizes the company's 2017 financial guidance:
2017 Guidance | |||
Prior |
Revised | ||
Revenue |
|
| |
Gross Margin % of Revenue (reported) |
Approx. 73.5% |
Approx. 72.5% | |
Gross Margin % of Revenue (non-GAAP) |
Approx. 77.0% |
Approx. 76.0% | |
Marketing, Selling & Administrative |
|
Unchanged | |
Research & Development |
|
| |
Other Income/(Expense) |
|
Unchanged | |
Tax Rate (reported) |
Approx. 24.5% |
Approx. 23.5% | |
Tax Rate (non-GAAP) |
Approx. 22.0% |
Unchanged | |
Earnings per Share (reported) |
|
| |
Earnings per Share (non-GAAP) |
|
| |
Capital Expenditures |
Approx. |
Approx. | |
Non-GAAP adjustments are consistent with the earnings per share table above. |
Webcast of Conference Call
As previously announced, investors and the general public can access a live webcast of the second-quarter 2017 financial results conference call through a link on Lilly's website at www.lilly.com. The conference call will be held today from
Lilly is a global healthcare leader that unites caring with discovery to make life better for people around the world. We were founded more than a century ago by a man committed to creating high-quality medicines that meet real needs, and today we remain true to that mission in all our work. Across the globe, Lilly employees work to discover and bring life-changing medicines to those who need them, improve the understanding and management of disease, and give back to communities through philanthropy and voluntarism. To learn more about Lilly, please visit us at www.lilly.com and http://newsroom.lilly.com/social-channels. F-LLY
This press release contains management's current intentions and expectations for the future, all of which are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. The words "estimate", "project", "intend", "expect", "believe", "target", "anticipate" and similar expressions are intended to identify forward-looking statements. Actual results may differ materially due to various factors. There are significant risks and uncertainties in pharmaceutical research and development. There can be no guarantees that pipeline products will receive the necessary clinical and manufacturing regulatory approvals or that they will prove to be commercially successful. The company's results may also be affected by such factors as the timing of anticipated regulatory approvals and launches of new products; market
uptake of recently launched products; competitive developments affecting current products; the expiration of intellectual property protection for certain of the company's products; the company's ability to protect and enforce patents and other intellectual property; the impact of governmental actions regarding pricing, importation, and reimbursement for pharmaceuticals, including
Alimta® (pemetrexed disodium, Lilly)
Basaglar® (insulin glargine injection, Lilly)
Cialis® (tadalafil, Lilly)
Cymbalta® (duloxetine hydrochloride, Lilly)
Cyramza® (ramucirumab, Lilly)
Effient® (prasugrel, Lilly)
Erbitux® (cetuximab, Lilly)
Forteo® (teriparatide of recombinant DNA origin injection, Lilly)
Glyxambi® (empagliflozin/linagliptin, Boehringer Ingelheim)
Humalog® (insulin lispro injection of recombinant DNA origin, Lilly)
Humulin® (human insulin of recombinant DNA origin, Lilly)
Jardiance® (empagliflozin, Boehringer Ingelheim)
LartruvoTM (olaratumab, Lilly)
Olumiant® (baricitinib,
Lilly)
Portrazza® (necitumumab, Lilly)
Strattera® (atomoxetine hydrochloride, Lilly)
Synjardy® (empagliflozin/metformin, Boehringer Ingelheim)
Taltz® (ixekizumab, Lilly)
Trajenta® (linagliptin, Boehringer Ingelheim)
Trulicity® (dulaglutide, Lilly)
Zyprexa® (olanzapine, Lilly)
Eli Lilly and Company Employment Information | ||
|
| |
Worldwide Employees |
41,240 |
41,975 |
|
Operating Results (Unaudited) - REPORTED |
(Dollars in millions, except per share data) |
Three Months Ended |
Six Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||
2017 |
2016 |
% Chg. |
2017 |
2016 |
% Chg. | ||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue |
$ |
5,824.3 |
$ |
5,404.8 |
8% |
$ |
11,052.6 |
$ |
10,269.9 |
8% | |||||||||||||||||||||||||||||||||||||||||||||
Cost of sales |
1,551.6 |
1,465.0 |
6% |
2,879.3 |
2,788.0 |
3% | |||||||||||||||||||||||||||||||||||||||||||||||||
Research and development |
1,250.9 |
1,335.9 |
(6)% |
2,489.2 |
2,556.9 |
(3)% | |||||||||||||||||||||||||||||||||||||||||||||||||
Marketing, selling and administrative |
1,707.4 |
1,622.6 |
5% |
3,252.1 |
3,096.5 |
5% | |||||||||||||||||||||||||||||||||||||||||||||||||
Acquired in-process research |
— |
— |
NM |
857.6 |
— |
NM | |||||||||||||||||||||||||||||||||||||||||||||||||
Asset impairment, restructuring |
50.0 |
58.0 |
(14)% |
263.9 |
189.4 |
39% | |||||||||||||||||||||||||||||||||||||||||||||||||
Operating income |
1,264.4 |
923.3 |
37% |
1,310.5 |
1,639.1 |
(20)% | |||||||||||||||||||||||||||||||||||||||||||||||||
Net interest income (expense) |
(16.7) |
(19.7) |
(30.7) |
(38.9) |
|||||||||||||||||||||||||||||||||||||||||||||||||||
Net other income (expense) |
12.8 |
40.9 |
41.9 |
(88.9) |
|||||||||||||||||||||||||||||||||||||||||||||||||||
Other income (expense) |
(3.9) |
21.2 |
NM |
11.2 |
(127.8) |
NM | |||||||||||||||||||||||||||||||||||||||||||||||||
Income before income taxes |
1,260.5 |
944.5 |
33% |
1,321.7 |
1,511.3 |
(13)% | |||||||||||||||||||||||||||||||||||||||||||||||||
Income taxes |
252.5 |
196.8 |
28% |
424.5 |
323.5 |
31% | |||||||||||||||||||||||||||||||||||||||||||||||||
Net income |
$ |
1,008.0 |
$ |
747.7 |
35% |
$ |
897.2 |
$ |
1,187.8 |
(24)% | |||||||||||||||||||||||||||||||||||||||||||||
Earnings per share - diluted |
$ |
0.95 |
$ |
0.71 |
34% |
$ |
0.85 |
$ |
1.12 |
(24)% | |||||||||||||||||||||||||||||||||||||||||||||
Dividends paid per share |
$ |
0.52 |
$ |
0.51 |
2% |
$ |
1.04 |
$ |
1.02 |
2% | |||||||||||||||||||||||||||||||||||||||||||||
Weighted-average shares |
1,057,110 |
1,060,083 |
1,057,543 |
1,061,023 |
NM - not meaningful
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of GAAP Reported to Selected Non-GAAP Adjusted Information (Unaudited) |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(Dollars in millions, except per share data) |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Three Months Ended |
Three Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GAAP Reported |
Adjustments(c) |
Non-GAAP Adjusted(a) |
GAAP Reported |
Adjustments(d) |
Non-GAAP | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cost of sales |
$ |
1,551.6 |
$ |
(192.4) |
$ |
1,359.2 |
$ |
1,465.0 |
$ |
(166.6) |
$ |
1,298.4 | |||||||||||||||||||||||||||||||||||||||||||||||
Operating expenses(b) |
2,958.3 |
(1.8) |
2,956.6 |
2,958.5 |
(2.0) |
2,956.5 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Asset impairment, restructuring and other special charges |
50.0 |
(50.0) |
— |
58.0 |
(58.0) |
— | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Income taxes |
252.5 |
74.7 |
327.2 |
196.8 |
65.6 |
262.3 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income |
1,008.0 |
169.5 |
1,177.4 |
747.7 |
161.1 |
908.8 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings per share - diluted |
0.95 |
0.16 |
1.11 |
0.71 |
0.15 |
0.86 |
Numbers may not add due to rounding. | |
The table above reflects only line items with non-GAAP adjustments. | |
(a) |
The company uses non-GAAP financial measures that differ from financial statements reported in conformity with |
(b) |
Operating expenses include research and development and marketing, selling and administrative expenses. |
(c) |
Adjustments to certain GAAP reported measures for the three months ended |
(Dollars in millions, except per share data) |
Amortization(i) |
Inventory |
Other specified items(iii) |
Total Adjustments | ||||||||
Cost of sales |
$ |
(176.3) |
$ |
(16.1) |
$ |
— |
$ |
(192.4) |
||||
Operating expenses |
(1.8) |
— |
— |
(1.8) |
||||||||
Asset impairment, restructuring and other special charges |
— |
— |
(50.0) |
(50.0) |
||||||||
Income taxes |
55.4 |
5.6 |
13.7 |
74.7 |
||||||||
Net income |
122.7 |
10.5 |
36.3 |
169.5 |
||||||||
Earnings per share - diluted |
0.12 |
0.01 |
0.03 |
0.16 |
Numbers may not add due to rounding. | |
The table above reflects only line items with non-GAAP adjustments. | |
i. |
Exclude amortization of intangibles primarily associated with costs of marketed products acquired or licensed from third parties. |
ii. |
Exclude inventory step-up costs associated with the acquisition of |
iii. |
Exclude charges primarily associated with integration costs and asset impairments related to the acquisition and integration of |
(d) |
Adjustments to certain GAAP reported measures for the three months ended |
(Dollars in millions, except per share data) |
Amortization(i) |
Other specified items(ii) |
Total Adjustments | ||||||
Cost of sales |
$ |
(166.6) |
$ |
— |
$ |
(166.6) |
|||
Operating expenses |
(2.0) |
— |
(2.0) |
||||||
Asset impairment, restructuring and other special charges |
— |
(58.0) |
(58.0) |
||||||
Income taxes |
52.7 |
12.8 |
65.6 |
||||||
Net income |
115.8 |
45.2 |
161.1 |
||||||
Earnings per share - diluted |
0.11 |
0.04 |
0.15 |
Numbers may not add due to rounding. | |
The table above reflects only line items with non-GAAP adjustments. | |
i. |
Exclude amortization of intangibles primarily associated with costs of marketed products acquired or licensed from third parties. |
ii. |
Exclude charges primarily associated with integration and severance costs for |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of GAAP Reported to Selected Non-GAAP Adjusted Information (Unaudited) |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(Dollars in millions, except per share data) |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended |
Six Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GAAP Reported |
Adjustments(c) |
Non-GAAP Adjusted(a) |
GAAP Reported |
Adjustments(d) |
Non-GAAP Adjusted(a) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cost of sales |
$ |
2,879.3 |
$ |
(377.1) |
$ |
2,502.2 |
$ |
2,788.0 |
$ |
(337.2) |
$ |
2,450.8 | |||||||||||||||||||||||||||||||||||||||||||||||
Operating expenses(b) |
5,741.3 |
(3.6) |
5,737.8 |
5,653.4 |
(3.9) |
5,649.5 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquired in-process research and development |
857.6 |
(857.6) |
— |
— |
— |
— | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Asset impairment, restructuring and other special charges |
263.9 |
(263.9) |
— |
189.4 |
(189.4) |
— | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Other income (expense) |
11.2 |
— |
11.2 |
(127.8) |
203.9 |
76.1 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Income taxes |
424.5 |
182.3 |
606.8 |
323.5 |
131.1 |
454.6 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income |
897.2 |
1,319.9 |
2,217.0 |
1,187.8 |
603.3 |
1,791.1 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings per share - diluted |
0.85 |
1.25 |
2.10 |
1.12 |
0.57 |
1.69 |
Numbers may not add due to rounding. | |
The table above reflects only line items with non-GAAP adjustments. | |
(a) |
The company uses non-GAAP financial measures that differ from financial statements reported in conformity with |
(b) |
Operating expenses include research and development and marketing, selling and administrative expenses. |
(c) |
Adjustments to certain GAAP reported measures for the six months ended |
(Dollars in millions, except per share data) |
Amortization(i) |
IPR&D(ii) |
Inventory |
Other specified items(iv) |
Total Adjustments | ||||||||||
Cost of sales |
$ |
(350.6) |
$ |
— |
$ |
(26.5) |
$ |
— |
$ |
(377.1) |
|||||
Operating expenses |
(3.6) |
— |
— |
— |
(3.6) |
||||||||||
Acquired in-process research and development |
— |
(857.6) |
— |
— |
(857.6) |
||||||||||
Asset impairment, restructuring and other special charges |
— |
— |
— |
(263.9) |
(263.9) |
||||||||||
Income taxes |
110.6 |
— |
9.3 |
62.4 |
182.3 |
||||||||||
Net income |
243.5 |
857.6 |
17.2 |
201.5 |
1,319.9 |
||||||||||
Earnings per share - diluted |
0.23 |
0.81 |
0.02 |
0.19 |
1.25 |
Numbers may not add due to rounding. | |
The table above reflects only line items with non-GAAP adjustments. | |
i. |
Exclude amortization of intangibles primarily associated with costs of marketed products acquired or licensed from third parties. |
ii. |
Exclude costs associated with upfront payments for acquired in-process research and development projects acquired in a transaction other than a business combination. These costs are related to the acquisition of |
iii. |
Exclude inventory step-up costs associated with the acquisition of |
iv. |
Exclude charges related to severance costs incurred as a result of actions taken to reduce the company's cost structure, as well as integration costs and asset impairments related to the acquisition and integration of |
(d) |
Adjustments to certain GAAP reported measures for the six months ended |
(Dollars in millions, except per share data) |
Amortization(i) |
|
Other specified items(iii) |
Total Adjustments | ||||||||
Cost of sales |
$ |
(337.2) |
$ |
— |
$ |
— |
$ |
(337.2) |
||||
Operating expenses |
(3.9) |
— |
— |
(3.9) |
||||||||
Asset impairment, restructuring and other special charges |
— |
— |
(189.4) |
(189.4) |
||||||||
Other income (expense) |
— |
203.9 |
— |
203.9 |
||||||||
Income taxes |
106.8 |
— |
24.3 |
131.1 |
||||||||
Net income |
234.3 |
203.9 |
165.1 |
603.3 |
||||||||
Earnings per share - diluted |
0.22 |
0.19 |
0.16 |
0.57 |
Numbers may not add due to rounding. | |
The table above reflects only line items with non-GAAP adjustments. | |
i. |
Exclude amortization of intangibles primarily associated with costs of marketed products acquired or licensed from third parties. |
ii. |
Exclude charge related to the impact of the Venezuelan financial crisis, including the significant deterioration of the bolivar. |
iii. |
Exclude charges associated with asset impairments related to the closure of an animal health manufacturing facility in |
Refer to: |
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