Eli Lilly 2009 Annual Report Download - page 135

2009 2008 % Growth 2009 vs. 2008 2007 % Growth 2008 vs. 2007
Sales as reported ($ millions) $21,836.0 $20,371.9 7.2% $18,633.5 9.3%
Pro forma ICOS adjustment — — $72.7
Eliminate ImClone sales in 2008 — ($35.6) —
Subtotal—adjusted for ImClone sales only $21,836.0 $20,336.3 $18,706.2 8.7%
Pro forma ImClone adjustment — $324.7 —
Sales—pro forma adjusted (sales and royalties) $21,836.0 $20,732.2 5.3% $18,706.2
EPS as reported $3.94 ($1.89) NM $2.71 NM
Eliminate net impact associated with ImClone acquisition — $4.46 —
Eliminate IPR&D charges for acquisitions and in-licensing
transactions $0.05 $0.10 $0.63
Eliminate asset impairments, restructuring and other special
charges (including charges related to litigation and
government investigations) $0.42 $1.54 $0.21
Eliminate benefit from resolution of IRS audit — ($0.19) —
Proforma ICOS adjustment — — ($0.01)
EPS—pro forma adjusted (ICOS only) $4.42 $4.02 $3.54 13.6%
Pro forma ImClone adjustment — ($0.20)
EPS—pro forma adjusted (ImClone only) $4.42 $3.82 15.7%
NM—Not meaningful
Numbers in the 2009 column do not add due to rounding.
Equity Incentive Grant Mechanics and Timing
The committee approves target grant values for equity incentives prior to the grant date. On the grant date, those
values are converted to shares based on:
• the closing price of company stock on the grant date
• the same valuation methodology the company uses to determine the accounting expense of the grants under
Financial Accounting Standards Board Accounting Standards Codification (FASB ASC) Topic 718.
The committee’s procedure for the timing of equity grants assures that grant timing is not being manipulated
for employee gain. The annual equity grant date for all eligible employees is in mid-February. The committee
establishes this date well in advance—typically in October. The mid-February grant date timing is driven by these
considerations:
• It coincides with the company’s calendar-year-based performance management cycle, allowing supervisors
to deliver the equity awards close in time to performance appraisals, which increases the impact of the
awards by strengthening the link between pay and performance.
• It follows the annual earnings release by approximately two weeks, so that the stock price at that time can
reasonably be expected to fairly represent the market’s collective view of our then-current results and
prospects.
Grants to new hires and other off-cycle grants are effective on the first trading day of the following month.
Employee and Post-Employment Benefits
The company offers core employee benefits coverage to:
• provide our global workforce with a reasonable level of financial support in the event of illness or injury
• enhance productivity and job satisfaction through programs that focus on work/life balance.
The benefits available are the same for all U.S. employees and include medical and dental coverage,
disability insurance, and life insurance.
In addition, the 401(k) plan and The Lilly Retirement Plan (the retirement plan) provide a reasonable level of
retirement income reflecting employees’ careers with the company. U.S. employees are eligible to participate in
these plans. To the extent that any employee’s retirement benefit exceeds IRS limits for amounts that can be
paid through a qualified plan, the company also offers a nonqualified pension plan and a nonqualified savings
plan. These plans provide only the difference between the calculated benefits and the IRS limits, and the formula
is the same for all U.S. employees.
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PROXY STATEMENT