Eli Lilly 2008 Annual Report Download - page 37

FINANCIALS
35
Lilly S&P 500 Peer Group
This graph compares the return on Lilly stock with that of the
Standard & Poor’s 500 Stock Index and our peer group* for the years
2004 through 2008. The graph assumes that, on December 31, 2003,
a person invested $100 each in Lilly stock, the S&P 500 Stock Index,
and the peer group’s common stock. The graph measures total
shareholder return, which takes into account both stock price and
dividends. It assumes that dividends paid by a company are
reinvested in that company’s stock.
*We constructed the peer group as the industry index for this graph.
It comprises the nine companies in the pharmaceutical industry that
we used to benchmark 2008 compensation of executive officers:
Abbott Laboratories; Amgen Inc.; Bristol-Myers Squibb Company;
GlaxoSmithKline Plc; Johnson & Johnson; Merck & Co., Inc.; Pfizer
Inc.; Schering-Plough Corporation; and Wyeth.
Value of $100 Invested on Last Business Day of 2003
Comparison of Five-Year Cumulative Total Return Among Lilly, S&P 500 Stock Index, and Peer Group*
12/03 12/04 12/05 12/06 12/07 12/08
$150
$140
$130
$120
$110
$100
$90
$80
$70
$60
Date Lilly Peer
Group S&P 500
12/03 $100.00 $100.00 $100.00
12/04 $ 82.53 $ 96.91 $110.85
12/05 $ 84.62 $ 96.99 $116.28
12/06 $ 80.20 $109.85 $134.61
12/07 $ 84.76 $111.60 $141.99
12/08 $ 66.63 $ 93.90 $ 89.54
Selected Financial Data (unaudited)
ELI LILLY AND COMPANY AND SUBSIDIARIES
(Dollars in millions, except net sales per employee and per-share data) 2008 20072 2006 2005 2004
Operations
Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $20,378.0 $18,633.5 $15,691.0 $14,645.3 $13,857.9
Cost of sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,382.8 4,248.8 3,546.5 3,474.2 3,223.9
Research and development . . . . . . . . . . . . . . . . . . . . 3,840.9 3,486.7 3,129.3 3,025.5 2,691.1
Marketing, selling, and administrative . . . . . . . . . . . 6,626.4 6,095.1 4,889.8 4,497.0 4,284.2
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,835.54 926.1 707.4 931.1 716.8
Income (loss) before income taxes and cumulative
effect of a change in accounting principle . . . . . . (1,307.6) 3,876.8 3,418.0 2,717.5 2,941.9
Income taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 764.3 923.8 755.3 715.9 1,131.8
Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,071.9) 2,953.0 2,662.7 1,979.61 1,810.1
Net income as a percent of sales . . . . . . . . . . . . . . . . NM 15.8% 17.0% 13.5% 13.1%
Net income (loss) per share—diluted . . . . . . . . . . . . (1.89) 2.71 2.45 1.81 1.66
Dividends declared per share. . . . . . . . . . . . . . . . . . . 1.90 1.75 1.63 1.54 1.45
Weighted-average number of shares
outstanding—diluted (thousands) . . . . . . . . . . . . . 1,094,499 1,090,750 1,087,490 1,092,150 1,088,936
Financial Position
Current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $12,453.3 $12,316.1 $ 9,753.6 $10,855.0 $12,895.0
Current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,109.7 5,436.8 5,254.0 5,884.8 7,762.2
Property and equipment—net . . . . . . . . . . . . . . . . . . 8,626.3 8,575.1 8,152.3 7,912.5 7,550.9
Total assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29,212.6 26,874.8 22,042.4 24,667.8 24,954.0
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,615.7 4,593.5 3,494.4 5,763.5 4,491.9
Shareholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . 6,735.3 13,503.9 10,820.2 10,631.4 10,759.4
Supplementary Data
Return on shareholders’ equity . . . . . . . . . . . . . . . . . (16.3)% 24.3% 24.8% 18.5% 17.8%
Return on assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (7.5)% 12.1% 11.1% 8.2% 7.8%
Capital expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . $ 947.2 $ 1,082.4 $ 1,077.8 $ 1,298.1 $ 1,898.1
Depreciation and amortization. . . . . . . . . . . . . . . . . . 1,122.6 1,047.9 801.8 726.4 597.5
Effective tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . NM3 23.8% 22.1% 26.3% 38.5%
Net sales per employee. . . . . . . . . . . . . . . . . . . . . . . . $ 504,000 $ 459,000 $378,000 $344,000 $311,000
Number of employees . . . . . . . . . . . . . . . . . . . . . . . . . 40,450 40,600 41,500 42,600 44,500
Number of shareholders of record . . . . . . . . . . . . . . 39,800 41,700 44,800 50,800 52,400
NM—Not Meaningful
1Refl ects the impact of a cumulative effect of a change in accounting principle in 2005 of $22.0 million, net of income taxes of $11.8 mil-
lion. The diluted earnings per share impact of this cumulative effect of a change in accounting principle was $.02. The net income per
diluted share before the cumulative effect of a change in accounting principle was $1.83.
2Refl ects the ICOS acquisition, effective January 29, 2007. See Note 3 for additional information.
3We incurred tax expense of $764.3 million in 2008, despite having a loss before income taxes of $1.31 billion. Our net loss was driven by
the $4.69 billion acquired IPR&D charge for ImClone and the $1.48 billion Zyprexa investigation settlements. The IPR&D charge was not
tax deductible, and only a portion of the Zyprexa investigation settlements was deductible. In addition, we recorded tax expense associ-
ated with the ImClone acquisition, as well as a discrete income tax benefi t of $210.3 million for the resolution of the IRS audit.
4The increase refl ects the in-process research and development expense of $4.69 billion associated with the ImClone acquisition and
$1.48 billion associated with the Zyprexa investigation settlements.