Eli Lilly and Company

Kaushal Singh, Pooja Shah, Kashif Rashid, Kyle Power, Khalid Alradhi

Introduction

Eli Lilly and company is a global pharmaceutical company founded in 1876 by Eli Lilly● Lilly went public in 1952 ● Fortune 500 Company● 10th largest global pharmaceutical

organization● Traded on NYSE and is a member of S & P 500

A Glance at Lilly

CEO John C. Lechleiter

CFO Derica W Rice

HQ Indianapolis, IN

Stock Symbol LLY

Market Cap 81.36 B

P/E Ratio 32.92

Dividend Yield 2.72%

Who We Are

Our mission

We make medicines that help people live longer, healthier, more

active lives.

Our values

Integrity, excellence, respect for people

Our vision

We will make a significant contribution to humanity by

improving global health in the 21st century.

Product Line/Products

Bone Health● Forteo® (teriparatide)

Cardiovascular● Adrica® (tadalafil) ● Effient® (prasugrel)

Diabetes● Humulin (insulin for human -injection)● Tradjenta® (linagliptin-tablets)Endocrine

● Humatrope® (somatropin for injection)Mens Health

● Axiron® (testosterone) ● Cialis® (tadalafil)

Neuroscience● Amyvid® (Florbetapir injection ● Zyprexa Relprevv® (olanzapine)● Prozac® (fluoxetine)

Oncology● Alimta® ● Cyramza®

PROFITABILITY & LIQUIDITY

Liquidity- how adequately Eli Lilly uses its resources to meet its short term obligations

Profitability- how well Eli Lilly generates sales from its resources

Profitability & Liquidity

Profitability and Liquidity :Return on Assets

Debt Service/Leverage

2012

● $1.5 billion in long term debt paid

● Total Debt decreased from 2011 to $5.53 billion2013

● Total Debt $5.21 billion● Total Debt was decreased from 2012 to 2013 refinanced $1 Billion in debt

2014● In 2014 Total Debt was $8.06 billion● Increased $2.84 billion from 2013

o Acquisition of Novartis AH o Repurchase of $800.0 million shares o Acquisition of privately-held company Lohmann AH

2014 2013 2012

21.16 37.79 31.42

Interest Coverage Ratio

Solvency

Solvency: Ability of a company to meet its long term financial obligations

2014 2013 2012

Total Debt 8,056.4 5,212.9 5,531.3

Stockholders Equity

15,373.2 17,631.4 14,765.2

Debt to Equity Ratio

52% 30% 37%

Debt to Equity Comparison

• On par with Industry• Stable earnings and cash

flow allow Eli Lilly to carry a higher debt to equity ratio

2014 2013 2012

Eli Lilly .52 .30 .37

Merck .44 .50 .39

Pfizer .51 .48 .46

L/T Asset Management

Asset management portrays the balancing of costs, opportunities and risks against the projected performance of assets to achieve the objectives of the organization.

L/T Asset Management

Trends : Profitability

Gross MarginIndustry Average (.74)

2014=0.74 2013=0.78

2012=0.782011=0.79

Operating MarginIndustry Average(0.10)

2014=0.162013=0.242012=0.202011=0.22

Net Margin: Industry average(.07)

2014: 0.122013: 0.202012: 0.182011: 0.17

Return on Assets:Industry Average(4.32%)

2014: 6.622013: 13.252012: 12.252011: 13.36

Trends Profitability:

Eli Lilly & Co.'s gross profit margin deteriorated from 2011 to 2012 and from 2012 to 2013.

Eli Lilly & Co.'s operating profit margin deteriorated from 2011 to 2012 but then improved from 2012 to 2013 exceeding 2011 level.

Eli Lilly & Co.'s net profit margin improved from 2011 to 2012 and from 2012 to 2013.

Eli Lilly & Co.'s ROE deteriorated from 2011 to 2012 and from 2012 to 2013.

Eli Lilly & Co.'s ROA deteriorated from 2011 to 2012 but then improved from 2012 to 2013 exceeding 2011 level.

Trends: Cash Flow

Stocks

Stocks: Trends

(DRIP)Dividend Reinvestment and Stock Purchase Plans (DRIP)Allows registered shareholders to purchase additional shares of Lilly common

stock through the automatic investment of dividends

1. Issue cash dividend per share a. Revenue stream

2. Allow for partial reinvestment or repurchase and partial cash payouta. Allows you to gather more common shares

3. Allow for full reinvestment or repurchase

Payment of Dividends

● For the 129th consecutive year, Eli Lilly & Co. distributed dividend payments to our shareholders.

● Dividends of $1.96 per share were paid in both 2013 and 2012 . In the fourth quarter of 2013, effective for the dividend to be paid in the first quarter of 2014 , the quarterly dividend was maintained at $0.49 per share, resulting in an indicated annual rate for 2014 of $1.96 per share.

● Operating cash flows are expected to be sufficient to pay our dividend of approximately $2.1 billion, allow for capital expenditures of approximately $1.3 billion, and fund potential business development activity and share repurchases.

Major points from 2014 Financial Analysis

● Fourth-quarter 2014 revenue declined 12 percent impacted by U.S.

patent expirations for Cymbalta and Evista and the unfavorable impact

of foreign exchange rates, partially offset by strong volume growth in

several other products.

● Fourth-quarter 2014 earnings per share were $0.40 (reported), or

$0.75 (non-GAAP).

● Full-year 2014 revenue declined 15 percent to $19.6 billion.

● Full-year 2014 earnings per share totaled $2.23 (reported), or $2.78

(non-GAAP).

● Approximately $2.9 billion in cash was returned to shareholders in

2014 through dividends and share repurchases.

Press Releases and Major Announcements

● Clinical pipeline advancements during the fourth quarter included two

FDA approvals, completion of a rolling FDA submission and a positive

Phase III data readout.

● The acquisition of Novartis Animal Health was completed on January 1,

2015 in an all-cash transaction of approximately $5.4 billion. As part of

the approval, certain animal health assets in the U.S. relating to the

Sentinel® canine parasiticide franchise were divested to Virbac for

approximately $410 million.

Press Releases and Major Announcements

● The company announced a worldwide licensing collaboration with Adocia

focused on developing an ultra-rapid insulin, known as BioChaperone

Lispro, for treatment in people with type 1 and type 2 diabetes.

BioChaperone Lispro is currently in Phase Ib studies.

● The company announced a dividend for the first quarter of 2015 of $0.50

per share on outstanding common stock representing a 2 percent

increase. The annual indicated rate is now $2.00 per share.

● As part of its previously-announced share repurchase program, the

company repurchased approximately $300 million in company stock in

the fourth quarter of 2014.

Sources• http://www.lilly.com/about/key-facts/Pages/key-facts.aspx• http://finance.yahoo.com/q?s=LLY • http://www.nasdaq.com/press-release/lilly-reports-fourthquarter-and-fullyear-20

14-results-updates-2015-guidance-20150130-00112• https://www.stock-analysis-on.net/NYSE/Company/Eli-Lilly-Co/Ratios/Profitability