Date: July 24, 2013
For Release: Immediately
Refer to: (317) 276-5795 - Mark Taylor (Media)
(317) 655-6874 - Philip Johnson (Investors)
Lilly Reports Second-Quarter 2013 Results
- Worldwide revenue increased 6 percent as growth in key products offset lower
Zyprexa revenue following patent expirations in most major markets.
- Cymbalta sales increased 22 percent while Cialis increased 13 percent.
- Higher revenue and ongoing cost containment drove strong earnings growth.
- Second quarter earnings per share grew to $1.11 (reported), or $1.16
(non-GAAP).
- 2013 earnings per share guidance range raised to $4.28 - $4.38 (reported),
or $4.05 - $4.15 (non-GAAP)
Eli Lilly and Company (NYSE: LLY) today announced financial results for the
second quarter of 2013.
$ in millions, except per Second Quarter %
share data
2013 2012 Growth
Total Revenue - Reported $5,929.7 $5,600.7 6%
Net Income - Reported 1,206.2 923.6 31%
EPS - Reported 1.11 0.83 34%
Net Income - non-GAAP 1,254.9 923.6 36%
EPS - non-GAAP 1.16 0.83 40%
Certain financial information for 2013 and 2012 are 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 period. Non-GAAP measures exclude the items described in
the reconciliation tables later in the release. The non-GAAP measures are
presented in order to provide additional insights into the underlying trends
in the company's business. The company's 2013 financial guidance is also being
provided on both a reported and a non-GAAP basis.
"In the second quarter, Lilly delivered solid financial results, highlighted
by good revenue growth and strict cost containment efforts that led to robust
earnings growth," said John C. Lechleiter, Ph.D., Lilly's chairman, president
and chief executive officer. "Continued operating and financial discipline,
along with a maturing pipeline of potential new medicines, gives me great
confidence in the company's ability to meet the challenges we face from
upcoming patent expirations and to resume growth after 2014."
Key Events Over the Last Three Months
- The marketing authorization application for LY2963016, an
investigational basal (long-acting) insulin for the treatment of type 1
and type 2 diabetes, was accepted for review by the European Medicines
Agency. LY2963016 is a new insulin glargine product being developed in
collaboration with Boehringer Ingelheim.
- The company disclosed positive Phase III clinical trial data for
several late-stage investigational medicines from its diabetes pipeline,
including dulaglutide and, in collaboration with Boehringer Ingelheim,
empagliflozin, as part of the American Diabetes Association Scientific
Sessions.
- The company expressed its disappointment with the Centers for
Medicare & Medicaid Services draft decision proposing Coverage with
Evidence Development for the use of beta-amyloid positron emission
tomography (PET) imaging agents, including Lilly's product, AmyvidTM.
- The company announced plans to stop development of enzastaurin,
which was being studied in a Phase III clinical trial as a monotherapy in
the prevention of relapse in patients with diffuse large B-cell lymphoma.
- The company stopped its Phase II study for LY2886721, a beta
secretase (BACE) inhibitor being investigated as a once-daily treatment
for its potential to slow the progression of Alzheimer's disease.
- The company announced that the PRONOUNCE study of Alimta® did not
achieve its primary endpoint of improved progression-free survival without
grade four adverse events in nonsquamous non-small cell lung cancer.
Second-Quarter Reported Results
In the second quarter of 2013, worldwide total revenue was $5.930 billion, an
increase of 6 percent compared with the second quarter of 2012. Revenue growth
was comprised of 6 percent due to higher prices and 2 percent due to higher
volume, partially offset by a decrease of 2 percent due to the unfavorable
impact of foreign exchange rates. The increase in volume was driven by solid
volume gains for various products, partially offset by continued volume
declines of Zyprexa® due to the loss of patent exclusivity in most major
markets and the transfer of exenatide commercial rights outside of the U.S. to
Amylin Pharmaceuticals. Total revenue in the U.S. increased 13 percent to
$3.397 billion driven by increased prices, primarily for Cymbalta. Total
revenue outside the U.S. decreased by 2 percent to $2.532 billion, driven by
the unfavorable impact of foreign exchange rates, primarily the Japanese yen,
and the loss of market exclusivity for Zyprexa in most markets outside of
Japan and, to a lesser extent, decreased prices, partially offset by increased
volume.
Gross margin increased 7 percent to $4.764 billion in the second quarter of
2013, as growth in other products offset the loss of patent exclusivity for
Zyprexa. Gross margin as a percent of total revenue was 80.3 percent, an
increase of 0.8 percentage points compared with the second quarter of 2012.
The increase in gross margin percent was primarily due to higher prices and
production volumes, partially offset by the impact of foreign exchange rates
on international inventories sold.
Total operating expense in the second quarter of 2013, defined as the sum of
research and development, marketing, selling and administrative expenses,
decreased 2 percent compared with the second quarter of 2012 to $3.198
billion. Marketing, selling and administrative expenses decreased 3 percent to
$1.868 billion, as ongoing cost containment efforts and the favorable impact
of foreign exchange rates were partially offset by higher litigation expenses.
Research and development expenses increased 1 percent to $1.330 billion, or
22.4 percent of total revenue.
In the second quarter of 2013, the company recognized asset impairment,
restructuring and other special charges of $63.5 million, related primarily to
costs associated with the anticipated closure of a packaging and distribution
facility in Germany.
Operating income in the second quarter of 2013 was $1.503 billion, an increase
of 25 percent or $300.8 million, compared to the second quarter of 2012, due
primarily to higher gross margin and lower operating expenses, partially
offset by higher asset impairment, restructuring and other special charges.
Other income (expense) was income of $11.9 million in the second quarter of
2013, compared with expense of $16.5 million in the second quarter of 2012.
This increase was primarily related to a gain on the sale of an investment
during the second quarter of 2013.
The effective tax rate was 20.4 percent in the second quarter of 2013,
compared with an effective tax rate of 22.1 percent in the second quarter of
2012. The decrease in the second quarter 2013 effective tax rate reflects the
reinstatement of the R&D tax credit in the U.S. effective January 1, 2013.
In the second quarter of 2013, net income and earnings per share increased to
$1.206 billion and $1.11, respectively, compared with second-quarter 2012 net
income of $923.6 million and earnings per share of $0.83. The increases in net
income and earnings per share were driven by higher operating income, and to a
lesser extent, higher other income and a lower effective tax rate. Earnings
per share also benefited from a lower number of shares outstanding in the
second quarter of 2013 compared to the second quarter of 2012.
Second-Quarter 2013 non-GAAP Measures
On a non-GAAP basis, second-quarter 2013 operating income increased 30 percent
to $1.566 billion, due primarily to higher gross margin and lower operating
expenses. The effective tax rate decreased to 20.5 percent, compared with 22.1
percent in the second quarter of 2012, primarily driven by the reinstatement
of the R&D tax credit in the U.S. effective January 1, 2013. Net income and
earnings per share were $1.255 billion and $1.16, respectively, compared with
$923.6 million and $0.83 during the second quarter of 2012.
The increases in net income and earnings per share were driven by higher
operating income, and to a lesser extent, higher other income and a lower
effective tax rate. Earnings per share also benefited from a lower number of
shares outstanding in the second quarter of 2013 compared to the second
quarter of 2012.
Non-GAAP measures in the second quarter of 2013 exclude items totaling $0.04
per share of expense. For further detail, 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
2013 2012 % Change
Earnings per share (reported) $1.11 $0.83 34%
Asset impairment, restructuring and
other
special charges .04 -
Earnings per share (non-GAAP) $1.16 $0.83 40%
Numbers do not add due to rounding.
Year-to-Date Results
For the first six months of 2013, worldwide total revenue was $11.532 billion,
an increase of 3 percent compared with the same period in 2012. Reported net
income and earnings per share were $2.754 billion and $2.53, respectively. Net
income and earnings per share, on a non-GAAP basis, were $2.503 billion and
$2.30, respectively.
Non-GAAP measures exclude items totaling $0.23 per share of income for the
first six months of 2013 and $0.01 per share of expense for the first six
months of 2012. For further detail, 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 % Change
2013 2012
Earnings per share (reported) $2.53 $1.73 46%
Asset impairment, restructuring and
other
special charges .06 .01
Income from the transfer of exenatide
commercial rights
(0.29) -
Earnings per share (non-GAAP) $2.30 $1.74 32%
Revenue Highlights
% Change Over/(Under) % Change Over/(Under)
Second Quarter Year-to-Date
(Dollars in
millions)
2013 2012 2012 2013 2012 2012
Cymbalta® $1,497.2 $1,223.1 22% $2,825.4 $2,338.0 21%
Alimta 669.4 659.5 2% 1,286.3 1,266.3 2%
Humalog® 628.6 613.4 2% 1,261.3 1,203.6 5%
Cialis® 529.4 469.5 13% 1,044.4 931.3 12%
Humulin® 327.5 303.0 8% 639.4 610.7 5%
Forteo® 296.9 276.4 7% 578.4 547.7 6%
Zyprexa 283.2 379.5 (25)% 568.0 942.1 (40)%
Evista® 278.7 265.9 5% 519.2 522.1 (1)%
Strattera® 168.3 153.0 10% 335.0 311.9 7%
Effient® 137.4 111.0 24% 253.2 226.9 12%
Animal Health 543.5 512.2 6% 1,042.4 1,003.0 4%
Total Revenue $5,929.7 $5,600.7 6% $11,531.7 $11,202.7 3%
Cymbalta
For the second quarter of 2013, Cymbalta generated $1.497 billion in revenue,
an increase of 22 percent compared with the second quarter of 2012. U.S. sales
of Cymbalta increased 27 percent, to $1.217 billion, driven by higher prices
and, to a lesser extent, increased demand and the favorable impact of
wholesaler buying patterns. Revenue outside the U.S. was $279.8 million, an
increase of 4 percent, driven primarily by increased volume, partially offset
by the unfavorable effect of foreign exchange rates and, to a lesser extent,
lower prices.
Alimta
For the second quarter of 2013, Alimta generated sales of $669.4 million, an
increase of 2 percent compared with the second quarter of 2012. U.S. sales of
Alimta increased 9 percent, to $304.9 million, driven by increased demand and
higher prices. Sales outside the U.S. decreased 4 percent, to $364.5 million,
driven by the unfavorable impact of foreign exchange rates and, to a lesser
extent, lower prices, partially offset by increased volume.
Humalog
For the second quarter of 2013, worldwide Humalog sales increased 2 percent,
to $628.6 million. Sales in the U.S. were relatively flat at $351.9 million,
driven by lower net effective selling prices, offset by increased volume.
Sales outside the U.S. increased 7 percent to $276.7 million, due to increased
volume, partially offset by the unfavorable impact of foreign exchange rates
and lower prices.
Cialis
Cialis sales for the second quarter of 2013 increased 13 percent to $529.4
million. U.S. sales of Cialis were $214.7 million in the second quarter, a 15
percent increase compared with the second quarter of 2012, driven primarily by
higher prices. Sales of Cialis outside the U.S. increased 11 percent, to
$314.7 million, driven by increased volume and higher prices, partially offset
by the unfavorable impact of foreign exchange rates.
Humulin
Worldwide Humulin sales increased 8 percent in the second quarter of 2013, to
$327.5 million. U.S. sales increased 11 percent to $158.1 million, driven by
higher prices, partially offset by lower demand. Sales outside the U.S.
increased 5 percent, to $169.4 million, driven by increased volume, partially
offset by the unfavorable impact of foreign exchange rates.
Forteo
Second-quarter 2013 sales of Forteo were $296.9 million, a 7 percent increase
compared with the second quarter of 2012. U.S. sales of Forteo decreased 2
percent to $115.8 million, driven primarily by lower volume, partially offset
by higher prices. Sales outside the U.S. increased 14 percent, to $181.1
million, due primarily to increased volume in Japan, partially offset by the
unfavorable impact of foreign exchange rates.
Zyprexa
In the second quarter of 2013, Zyprexa sales totaled $283.2 million, a
decrease of 25 percent compared with the second quarter of 2012 due to the
loss of patent exclusivity in 2011 in the U.S. and most major international
markets. U.S. sales of Zyprexa decreased 35 percent to $19.5 million. Zyprexa
sales in international markets decreased 25 percent, to $263.7 million.
Zyprexa sales in Japan were approximately $130 million and were negatively
affected by the continued weakening of the Japanese yen.
Evista
Evista sales for the second quarter of 2013 increased 5 percent to $278.7
million. U.S. sales of Evista increased 9 percent to $199.3 million, driven by
higher prices, partially offset by lower demand. Sales outside the U.S.
decreased 5 percent to $79.4 million, driven by the unfavorable impact of
foreign exchange rates, partially offset by higher volume.
Strattera
During the second quarter of 2013, Strattera generated $168.3 million of
sales, an increase of 10 percent compared with the second quarter of 2012.
U.S. sales increased 10 percent to $102.6 million, due to higher prices,
partially offset by lower demand. Sales outside the U.S. increased 10 percent
to $65.7 million, driven by increased volume in Japan, partially offset by
lower prices and the unfavorable impact of foreign exchange rates.
Effient
Effient sales were $137.4 million in the second quarter of 2013, which
increased 24 percent compared with the second quarter of 2012. U.S. Effient
sales increased 28 percent to $103.8 million, driven primarily by higher
prices. Sales outside the U.S. increased 12 percent to $33.6 million, driven
by higher volume.
Animal Health
Worldwide sales of animal health products in the second quarter of 2013 were
$543.5 million, an increase of 6 percent compared with the second quarter of
2012. U.S. sales grew 5 percent, to $321.3 million, due primarily to increased
demand for Trifexis®. Sales outside the U.S. increased 7 percent, to $222.2
million, driven primarily by increased sales of companion animal products.
2013 Financial Guidance
The company has raised its 2013 earnings per share guidance and now expects
full-year 2013 earnings per share to be in the range of $4.28 to $4.38 on a
reported basis, or $4.05 to $4.15 on a non-GAAP basis. The company has also
revised certain other elements of its 2013 financial guidance, as outlined
below.
2013 2012
Expectations Results % Change
Earnings per share (reported) $4.28 to $3.66 17% to 20%
$4.38
Asset impairment, restructuring and
other
special charges .06 0.16
Income from the transfer of exenatide
commercial rights
(0.29) (0.43)
Earnings per share (non-GAAP) $4.05 to $3.39 19% to 22%
$4.15
The company still anticipates 2013 revenue of between $22.6 billion and $23.4
billion. Despite the initial impact of the U.S. Cymbalta patent expiration in
the fourth quarter of 2013 and the loss of the anticipated 15 percent revenue
sharing obligation on worldwide exenatide sales, the company expects overall
revenue growth, driven by a portfolio of products including Humalog, Humulin,
Cialis, Strattera, Forteo, Alimta, Cymbalta outside the U.S., Effient,
Tradjenta® and Axiron®, as well as animal health products. In addition,
significant revenue growth is expected in the emerging markets, particularly
China, while a weaker Japanese yen will dampen revenue growth in Japan.
The company now anticipates that gross margin as a percent of revenue will be
approximately 79 percent.
Marketing, selling and administrative expenses are now expected in the range
of $7.0 billion to $7.2 billion. Research and development expenses are now
expected to be in the range of $5.3 billion to $5.5 billion.
On a reported basis, other income and deductions is still expected to be in a
range between $440 million and $590 million of income in 2013. On a non-GAAP
basis, other income and deductions is still expected to be in a range between
$50 million of expense to $100 million of income, which excludes $495.4
million of exenatide-related income recognized upon the transfer of exenatide
commercial rights outside the U.S. to Amylin.
On a reported basis, the 2013 tax rate is still expected to be approximately
20.5 percent. On a non-GAAP basis, the 2013 tax rate is still expected to be
approximately 19.0 percent. Both tax rates for 2013 include the one-time
impact associated with the R&D tax credit for 2012 that was recorded in 2013
resulting from the delay in the enactment of the American Taxpayer Relief Act
of 2012.
Operating cash flows are still expected to be more than sufficient to allow
for capital expenditures of approximately $900 million, fund potential
business development activity and pay the company's dividend. In addition, the
company has completed its previously-announced $1.5 billion share repurchase
program.
Webcast of Conference Call
As previously announced, investors and the general public can access a live
webcast of the second-quarter 2013 financial results conference call through a
link on Lilly's website at www.lilly.com. The conference call will be held
today from 9:00 a.m. to 10:00 a.m. Eastern Daylight Time (EDT) and will be
available for replay via the website.
Lilly, a leading innovation-driven corporation, is developing a growing
portfolio of pharmaceutical products by applying the latest research from its
own worldwide laboratories and from collaborations with eminent scientific
organizations. Headquartered in Indianapolis, Ind., Lilly provides answers -
through medicines and information - for some of the world's most urgent
medical needs. Additional information about Lilly is available at
www.lilly.com.
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" 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 with
respect to pipeline products that the products will receive the necessary
clinical and manufacturing regulatory approvals or that they will prove to be
commercially successful. Pharmaceutical products can develop unexpected safety
or efficacy concerns. The company's results may also be affected by such
factors as competitive developments affecting current products; market uptake
of recently launched products; the timing of anticipated regulatory approvals
and launches of new products; regulatory actions regarding currently marketed
products; issues with product supply; regulatory changes or other
developments; regulatory compliance problems or government investigations;
patent disputes; changes in patent law or regulations related to data-package
exclusivity; other litigation involving current or future products; the impact
of governmental actions regarding pricing, importation, and reimbursement for
pharmaceuticals, including U.S. health care reform and deficit-reduction
measures; changes in tax laws, including the American Taxpayer Relief Act of
2012; asset impairments and restructuring charges; acquisitions and business
development transactions; and the impact of exchange rates and global
macroeconomic conditions. For additional information about the factors that
could cause actual results to differ materially from forward-looking
statements, please see the company's latest Form 10-Q and Form 10-K filed with
the U.S. Securities and Exchange Commission. You should not place undue
reliance on forward-looking statements, which speak only as of the date of
this release. Except as is required by law, the company expressly disclaims
any obligation to publicly release any revisions to forward-looking statements
to reflect events after the date of this release.
# # #
Alimta® (pemetrexed, Lilly)
AmyvidTM ((Florbetapir F 18 Injection, Lilly)
Axiron® (testosterone, Acrux Corp.)
Cialis® (tadalafil, Lilly)
Cymbalta® (duloxetine hydrochloride, Lilly)
Effient® (prasugrel, Lilly)
Evista® (raloxifene hydrochloride, Lilly)
Forteo® (teriparatide of recombinant DNA origin injection, Lilly)
Humalog® (insulin lispro injection of recombinant DNA origin, Lilly)
Humulin® (human insulin of recombinant DNA origin, Lilly)
Strattera® (atomoxetine hydrochloride, Lilly)
Tradjenta® (linagliptin, Boehringer Ingelheim)
Trifexis® (spinosad + milbemycin oxime, Lilly)
Zyprexa® (olanzapine, Lilly)
Eli Lilly and Company Employment Information
June 30, 2013 December 31, 2012
Worldwide Employees 38,100 38,350
Eli Lilly and Company
Operating Results (Unaudited) - REPORTED
(Dollars in millions, except per share data)
Three Months Ended Six Months Ended
June 30 June 30
2013 2012 % Chg. 2013 2012 % Chg.
Total Revenue $ 5,929.7 $ 5,600.7 6% $ 11,531.7 $ 11,202.7 3%
Cost of sales 1,165.2 1,146.7 2% 2,323.5 2,344.6 (1)%
Research and development 1,330.4 1,320.7 1% 2,678.5 2,472.2 8%
Marketing, selling and administrative 1,867.6 1,931.1 (3)% 3,519.6 3,778.6 (7)%
Asset impairments, restructuring and 63.5 - 85.2 23.8
other special charges
NM NM
Operating income 1,503.0 1,202.2 25% 2,924.9 2,583.5 13%
Net interest income (expense) (10.6) (15.8) (27.3) (35.0)
Other income (expense) - Special - - 495.4 -
Net other income (expense) 22.5 (0.7) 73.0 (27.5)
Other income (expense) 11.9 (16.5) NM 541.1 (62.5) NM
Income before income taxes 1,514.9 1,185.7 28% 3,466.0 2,521.0 37%
Income taxes 308.7 262.1 18% 711.8 586.3 21%
Net income $ 1,206.2 $ 923.6 31% $ 2,754.2 $ 1,934.7 42%
Earnings per share - diluted $ 1.11 $ 0.83 34% $ 2.53 $ 1.73 46%
Dividends paid per share $ .49 $ .49 0% $ .98 $ .98 0%
1,084,037 1,118,707 1,087,907 1,117,839
Weighted-average shares
outstanding (thousands) - diluted
NM - not meaningful
Eli Lilly and Company
Reconciliation of GAAP Reported to Selected Non-GAAP Adjusted Information (Unaudited)
(Dollars in millions, except per share data)
Three Months Ended Three Months Ended
June 30, 2013 June 30, 2012
GAAP Non-GAAP GAAP Non-GAAP
Reported Adjustments Adjusted(a) Reported Adjustments Adjusted(a)
Total Revenue $ 5,929.7 $ - $ 5,929.7 $ 5,600.7 $ - $ 5.600.7
Cost of sales 1,165.2 - 1,165.2 1,146.7 - 1.146.7
Operating 3,198.0 - 3,198.0 3,251.8 - 3.251.8
Expenses(b)
Asset impairments,
restructuring and
other special
charges(c) 63.5 (63.5) - - - -
Other income 11.9 - 11.9 (16.5) - (16.5)
(expense)
Income taxes 308.7 14.8 323.5 262.1 - 262.1
Net income 1,206.2 48.7 1,254.9 923.6 - 923.6
Earnings per share - 1.11 0.04 1.16 0.83 - 0.83
diluted
Numbers do not add due to rounding.
(a) We use non-GAAP financial measures that differ from financial statements
reported in conformity with U.S. generally accepted accounting principles
("GAAP"). The items that we exclude when we provide non-GAAP measures or
expectations are typically highly variable, difficult to predict, and of a
size that could have a substantial impact on our reported operations for a
period. We believe that these non-GAAP measures provide useful information to
investors. Among other things, they may help investors evaluate our ongoing
operations. They can assist in making meaningful period-over-period
comparisons and in identifying operating trends that would otherwise be masked
or distorted by the items subject to the adjustments. Management uses these
non-GAAP measures internally to evaluate the performance of the business,
including to allocate resources and to evaluate results relative to incentive
compensation targets. Investors should consider these non-GAAP measures in
addition to, not as a substitute for or superior to, measures of financial
performance prepared in accordance with GAAP.
(b) Operating expenses include research and development, marketing, selling
and administrative expenses.
(c) Certain GAAP reported measures have been adjusted to eliminate asset
impairments, restructuring and other special charges. During the three months
ended June 30, 2013, amounts totaling $63.5 million (pretax), or $0.04 per
share (after-tax), of expense were eliminated primarily related to the
anticipated closure of a packaging and distribution facility in Germany.
Eli Lilly and Company
Reconciliation of GAAP Reported to Selected Non-GAAP Adjusted Information
(Unaudited)
(Dollars in millions, except per share data)
Six Months Ended Six Months Ended
June 30, 2013 June 30, 2012
GAAP Non-GAAP GAAP Non-GAAP
Reported Adjustments Adjusted(a) Reported Adjustments Adjusted(a)
Total Revenue $ 11,531.7 $ - $ 11,531.7 $ 11,202.7 $ - $ 11,202.7
Cost of sales 2,323.5 - 2,323.5 2,344.6 - 2,344.6
Operating 6,198.1 - 6,198.1 6,250.8 - 6,250.8
Expenses(b)
Asset impairments,
restructuring and
other
special charges(c) 85.2 (85.2) - 23.8 (23.8) -
Other income 541.1 (495.4) 45.7 (62.5) - (62.5)
(expense)(d)
Income taxes 711.8 (158.6) 553.2 586.3 8.0 594.3
Net income 2,754.2 (251.6) 2,502.6 1,934.7 15.8 1,950.5
Earnings per share - 2.53 (0.23) 2.30 1.73 0.01 1.74
diluted
(a) We use non-GAAP financial measures that differ from financial statements
reported in conformity with U.S. generally accepted accounting principles
("GAAP"). The items that we exclude when we provide non-GAAP measures or
expectations are typically highly variable, difficult to predict, and of a
size that could have a substantial impact on our reported operations for a
period. We believe that these non-GAAP measures provide useful information to
investors. Among other things, they may help investors evaluate our ongoing
operations. They can assist in making meaningful period-over-period
comparisons and in identifying operating trends that would otherwise be masked
or distorted by the items subject to the adjustments. Management uses these
non-GAAP measures internally to evaluate the performance of the business,
including to allocate resources and to evaluate results relative to incentive
compensation targets. Investors should consider these non-GAAP measures in
addition to, not as a substitute for or superior to, measures of financial
performance prepared in accordance with GAAP.
(b) Operating expenses include research and development, marketing, selling
and administrative expenses.
(c) Certain GAAP reported measures have been adjusted to eliminate asset
impairments, restructuring and other special charges. During the six months
ended June 30, 2013, amounts totaling $85.2 million (pretax), or $0.06 per
share (after-tax), of expense were eliminated primarily related to the
anticipated closure of a packaging and distribution facility in Germany as
well as severance costs for actions taken to reduce cost structure and global
workforce. During the six months ended June 30, 2012, amounts totaling $23.8
million (pretax), or $0.01 per share (after-tax), of expense were eliminated
primarily related to the withdrawal of Xigris.
(d) Certain GAAP reported measures have been adjusted to eliminate a portion
of other income (expense). During the six months ended June 30, 2013, amounts
totaling $495.4 million (pretax), or $0.29 per share (after-tax), of income
were eliminated related to the transfer of exenatide commercial rights outside
the U.S. to Amylin.