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These excerpts taken from the LLY 10-K filed Feb 22, 2010. Gross
Margin, Costs, and Expenses
The 2009 gross margin increased to 80.6 percent of
total revenue compared with 78.5 percent for 2008. This
increase was due to the impact of changes in foreign currencies
compared to the U.S. dollar on
22
international inventories sold during the year, which decreased
cost of sales as in 2009, but increased cost of sales in 2008.
Marketing, selling, and administrative expenses increased
4 percent in 2009 to $6.89 billion. The increase was
driven by the increased marketing and selling expenses outside
the U.S., higher incentive compensation, and the impact of the
ImClone acquisition, partially offset by the movement of foreign
exchange rates. Investment in research and development increased
13 percent, to $4.33 billion, due primarily to the
ImClone acquisition and increased late-stage clinical trial
costs.
We incurred an IPR&D charge of $90.0 million in 2009,
associated with the in-licensing agreement with Incyte, compared
with $4.84 billion in 2008. The 2008 IPR&D charge
included $4.69 billion resulting from the acquisition of
ImClone. We recognized asset impairments, restructuring, and
other special charges of $692.7 million in 2009, primarily
related to asset impairment charges related to the sale of our
Tippecanoe Laboratories manufacturing site and special charges
related to Zyprexa litigation with multiple state attorneys
general, compared with $1.97 billion in 2008. The 2008
charges were primarily associated with the resolution of Zyprexa
investigations with the U.S. Attorney for the EDPA and
multiple states. See Notes 3, 5 and 14 to the consolidated
financial statements for additional information.
Other—net, expense, (income) was a net expense in both
years, increasing by $203.4 million, to $229.5 million
in 2009, primarily due to lower interest income and higher
interest expense resulting from the ImClone acquisition.
We incurred income tax expense of $1.03 billion in 2009
resulting in an effective tax rate of 19.2 percent. The
effective tax rate for 2009 was reduced due to the tax benefit
of asset impairment and restructuring charges associated with
the sale of the Tippecanoe site. We 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 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 associated with the ImClone
acquisition, as well as a discrete income tax benefit of
$210.3 million for the resolution of a substantial portion
of the
2001-2004
IRS audit. See Note 12 to the consolidated financial
statements for additional information.
Gross
Margin, Costs, and Expenses
The 2008 gross margin increased to 78.5 percent of
total revenue compared with 77.2 percent for 2007. This
increase was primarily due to the favorable impact of foreign
exchange rates.
Marketing, selling, and administrative expenses increased
9 percent in 2008, to $6.63 billion. This increase was
due to increased marketing and selling expenses, including
prelaunch expenses for Effient and marketing costs associated
with Cymbalta and Evista; the impact of foreign exchange rates;
and increased litigation-related expenses. Investment in
research and development increased 10 percent, to
$3.84 billion, due to increased late-stage clinical trial
and discovery research costs.
Acquired IPR&D charges related to the acquisitions of
ImClone and SGX, as well as our in-licensing arrangements with
BioMS and TransPharma, were $4.84 billion in 2008 as
compared to $745.6 million in 2007. We recognized asset
impairments, restructuring, and other special charges of
$1.97 billion in 2008, as compared to $302.5 million
in 2007. The 2008 charges were primarily associated with the
resolution of Zyprexa investigations with the U.S. Attorney
for the EDPA and multiple states. See Notes 3, 5 and 14 to
the consolidated financial statements for additional information.
Other—net, expense (income) changed from net income
of $122.0 million in 2007 to net expense of
$26.1 million in 2008, primarily as a result of lower
outlicensing income and increased net losses on investment
securities in 2008 (the majority of which consisted of
unrealized losses).
We 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
associated with the ImClone acquisition, as well as a discrete
income tax benefit of $210.3 million for the resolution of
a substantial portion of the
2001-2004
IRS audit. The effective tax rate was 23.8 percent in 2007.
See Note 12 to the consolidated financial statements for
additional information.
These excerpts taken from the LLY 10-K filed Feb 27, 2009. Gross
Margin, Costs, and Expenses
The 2008 gross margin increased to 78.5 percent of
sales compared with 77.2 percent for 2007. This increase
was primarily due to the favorable impact of foreign exchange
rates.
Marketing, selling, and administrative expenses increased
9 percent in 2008, to $6.63 billion. This increase was
due to increased marketing and selling expenses, including
prelaunch expenses for prasugrel and marketing costs associated
with Cymbalta and Evista; the impact of foreign exchange rates;
and increased litigation-related expenses. Investment in
research and development increased 10 percent, to
$3.84 billion, due to increased late-stage clinical trial
and discovery research costs.
Acquired IPR&D charges related to the acquisitions of
ImClone and SGX, as well as our in-licensing arrangements with
BioMS and TransPharma, were $4.84 billion in 2008 as
compared to $745.6 million in
2007. We recognized asset impairments, restructuring, and other
special charges of $1.97 billion in 2008, as compared to
$302.5 million in 2007. The 2008 charges were primarily
associated with the resolution of Zyprexa investigations with
the U.S. Attorney for the EDPA and multiple states. See
Notes 3, 5 and 14 to the consolidated financial statements
for additional information.
Other — net decreased $148.1 million, to a net
expense of $26.1 million. This line item consists of
interest expense, interest income, the after-tax operating
results of the Lilly ICOS joint venture, and all other
miscellaneous income and expense items.
We 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
associated with the ImClone acquisition, as well as a discrete
income tax benefit of $210.3 million for the resolution of
the IRS audit. The effective tax rate was 23.8 percent in
2007. See Note 12 to the consolidated financial statements
for additional information.
Gross Margin, Costs, and Expenses The 2008 gross margin increased to 78.5 percent of sales compared with 77.2 percent for 2007. This increase was primarily due to the favorable impact of foreign exchange rates.
Marketing, selling, and administrative expenses increased 9 percent in 2008, to $6.63 billion. This increase was due to increased marketing and selling expenses, including prelaunch expenses for prasugrel and marketing costs associated with Cymbalta and Evista; the impact of foreign exchange rates; and increased litigation-related expenses. Investment in research and development increased 10 percent, to $3.84 billion, due to increased late-stage clinical trial and discovery research costs. Acquired IPR&D charges related to the acquisitions of ImClone and SGX, as well as our in-licensing arrangements with BioMS and TransPharma, were $4.84 billion in 2008 as compared to $745.6 million in
2007. We recognized asset impairments, restructuring, and other special charges of $1.97 billion in 2008, as compared to $302.5 million in 2007. The 2008 charges were primarily associated with the resolution of Zyprexa investigations with the U.S. Attorney for the EDPA and multiple states. See Notes 3, 5 and 14 to the consolidated financial statements for additional information. Other — net decreased $148.1 million, to a net expense of $26.1 million. This line item consists of interest expense, interest income, the after-tax operating results of the Lilly ICOS joint venture, and all other miscellaneous income and expense items.
We 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 associated with the ImClone acquisition, as well as a discrete income tax benefit of $210.3 million for the resolution of the IRS audit. The effective tax rate was 23.8 percent in 2007. See Note 12 to the consolidated financial statements for additional information. Gross
Margin, Costs, and Expenses
The 2007 gross margin decreased to 77.2 percent of
sales compared with 77.4 percent for 2006. This decrease
was primarily due to the expense resulting from the amortization
of the intangible assets acquired in the ICOS acquisition, the
unfavorable impact of foreign exchange rates, and production
volumes growing at a slower rate than sales, offset partially by
manufacturing expenses growing at a slower rate than sales.
Operating expenses (the aggregate of research and development
and marketing, selling, and administrative expenses) increased
19 percent in 2007. Investment in research and development
increased 11 percent, to $3.49 billion. In addition to
the acquisition of ICOS, this increase was due to increases in
discovery research and late-stage clinical trial costs.
Marketing, selling, and administrative expenses increased
25 percent in 2007, to $6.10 billion. This increase
was largely due to the impact of the ICOS acquisition, as well
as increased marketing and selling expenses in support of key
products, primarily Cymbalta and the diabetes care products, and
the unfavorable impact of foreign exchange rates.
Acquired IPR&D charges were $745.6 million in 2007 and
related to the acquisitions of ICOS, Hypnion, and Ivy, as well
as our licensing arrangements with OSI, MacroGenics, and
Glenmark. We incurred asset impairments, restructuring, and
other special charges of $302.5 million in 2007 as compared
to $945.2 million in 2006. See Notes 3, 5 and 14 to
the consolidated financial statements for additional information.
Other — net decreased $115.8 million, to income
of $122.0 million. This line item consists of interest
expense, interest income, the after-tax operating results of the
Lilly ICOS joint venture, and all other miscellaneous income and
expense items.
We incurred tax expense of $923.8 million in 2007,
resulting in an effective tax rate of 23.8 percent,
compared with 22.1 percent for 2006. The effective tax
rates for 2007 and 2006 were affected primarily by the
nondeductible ICOS and Hypnion IPR&D charges of
$594.6 million in 2007, and the product liability charges
of $494.9 million in 2006. The tax effect of the product
liability charge was less than our effective tax rate, as the
tax benefit was calculated based upon existing tax laws in the
countries in which we reasonably expect to deduct the charge.
See Note 12 to the consolidated financial statements for
additional information.
Gross Margin, Costs, and Expenses The 2007 gross margin decreased to 77.2 percent of sales compared with 77.4 percent for 2006. This decrease was primarily due to the expense resulting from the amortization of the intangible assets acquired in the ICOS acquisition, the unfavorable impact of foreign exchange rates, and production volumes growing at a slower rate than sales, offset partially by manufacturing expenses growing at a slower rate than sales. Operating expenses (the aggregate of research and development and marketing, selling, and administrative expenses) increased 19 percent in 2007. Investment in research and development increased 11 percent, to $3.49 billion. In addition to the acquisition of ICOS, this increase was due to increases in discovery research and late-stage clinical trial costs. Marketing, selling, and administrative expenses increased 25 percent in 2007, to $6.10 billion. This increase was largely due to the impact of the ICOS acquisition, as well as increased marketing and selling expenses in support of key products, primarily Cymbalta and the diabetes care products, and the unfavorable impact of foreign exchange rates. Acquired IPR&D charges were $745.6 million in 2007 and related to the acquisitions of ICOS, Hypnion, and Ivy, as well as our licensing arrangements with OSI, MacroGenics, and Glenmark. We incurred asset impairments, restructuring, and other special charges of $302.5 million in 2007 as compared to $945.2 million in 2006. See Notes 3, 5 and 14 to the consolidated financial statements for additional information. Other — net decreased $115.8 million, to income of $122.0 million. This line item consists of interest expense, interest income, the after-tax operating results of the Lilly ICOS joint venture, and all other miscellaneous income and expense items.
We incurred tax expense of $923.8 million in 2007, resulting in an effective tax rate of 23.8 percent, compared with 22.1 percent for 2006. The effective tax rates for 2007 and 2006 were affected primarily by the nondeductible ICOS and Hypnion IPR&D charges of $594.6 million in 2007, and the product liability charges of $494.9 million in 2006. The tax effect of the product liability charge was less than our effective tax rate, as the tax benefit was calculated based upon existing tax laws in the countries in which we reasonably expect to deduct the charge. See Note 12 to the consolidated financial statements for additional information. These excerpts taken from the LLY 10-K filed Oct 21, 2008. Gross
Margin, Costs, and Expenses
The 2006 gross margin increased to 77.4 percent of
sales compared with 76.3 percent for 2005. This increase
was primarily due to increased product prices and increased
production volume, partially offset by higher manufacturing
expenses.
Operating expenses increased 7 percent in 2006. Investment
in research and development increased 3 percent, to
$3.13 billion, primarily due to increases in discovery
research and clinical trial costs. We continued to be a leader
in our industry peer group by investing approximately
20 percent of our sales into research and development
during 2006. Marketing, selling, and administrative expenses
increased 9 percent in 2006, to $4.89 billion. This
increase was largely attributable to increased marketing and
selling expenses in support of key products, primarily Cymbalta
and the diabetes care franchise, and an increase in
litigation-related costs.
Other income — net decreased $76.4 million, to
$237.8 million.
We incurred tax expense of $755.3 million in 2006,
resulting in an effective tax rate of 22.1 percent,
compared with 26.3 percent for 2005. The effective tax
rates for 2006 and 2005 were affected primarily by the product
liability charges of $494.9 million and $1.07 billion,
respectively. The tax benefit associated with these charges was
less than our effective tax rate, as the tax benefit was
calculated based upon existing tax laws in the countries in
which we reasonably expect to deduct the charge. See
Note 12 to the consolidated financial statements for
additional information.
Gross Margin, Costs, and Expenses The 2006 gross margin increased to 77.4 percent of sales compared with 76.3 percent for 2005. This increase was primarily due to increased product prices and increased production volume, partially offset by higher manufacturing expenses. Operating expenses increased 7 percent in 2006. Investment in research and development increased 3 percent, to $3.13 billion, primarily due to increases in discovery research and clinical trial costs. We continued to be a leader in our industry peer group by investing approximately 20 percent of our sales into research and development during 2006. Marketing, selling, and administrative expenses increased 9 percent in 2006, to $4.89 billion. This increase was largely attributable to increased marketing and selling expenses in support of key products, primarily Cymbalta and the diabetes care franchise, and an increase in litigation-related costs. Other income — net decreased $76.4 million, to $237.8 million.
We incurred tax expense of $755.3 million in 2006, resulting in an effective tax rate of 22.1 percent, compared with 26.3 percent for 2005. The effective tax rates for 2006 and 2005 were affected primarily by the product liability charges of $494.9 million and $1.07 billion, respectively. The tax benefit associated with these charges was less than our effective tax rate, as the tax benefit was calculated based upon existing tax laws in the countries in which we reasonably expect to deduct the charge. See Note 12 to the consolidated financial statements for additional information. These excerpts taken from the LLY 10-K filed Feb 29, 2008. Gross
Margin, Costs, and Expenses
The 2006 gross margin increased to 77.4 percent of
sales compared with 76.3 percent for 2005. This increase
was primarily due to increased product prices and increased
production volume, partially offset by higher manufacturing
expenses.
Operating expenses increased 7 percent in 2006. Investment
in research and development increased 3 percent, to
$3.13 billion, primarily due to increases in discovery
research and clinical trial costs. We continued to be a leader
in our industry peer group by investing approximately
20 percent of our sales into research and development
during 2006. Marketing, selling, and administrative expenses
increased 9 percent in 2006, to $4.89 billion. This
increase was largely attributable to increased marketing and
selling expenses in support of key products, primarily Cymbalta
and the diabetes care franchise, and an increase in
litigation-related costs.
Other income — net decreased $76.4 million, to
$237.8 million.
We incurred tax expense of $755.3 million in 2006,
resulting in an effective tax rate of 22.1 percent,
compared with 26.3 percent for 2005. The effective tax
rates for 2006 and 2005 were affected primarily by the product
liability charges of $494.9 million and $1.07 billion,
respectively. The tax benefit associated with these charges was
less than our effective tax rate, as the tax benefit was
calculated based upon existing tax laws in the countries in
which we reasonably expect to deduct the charge. See
Note 11 to the consolidated financial statements for
additional information.
Gross Margin, Costs, and Expenses The 2006 gross margin increased to 77.4 percent of sales compared with 76.3 percent for 2005. This increase was primarily due to increased product prices and increased production volume, partially offset by higher manufacturing expenses. Operating expenses increased 7 percent in 2006. Investment in research and development increased 3 percent, to $3.13 billion, primarily due to increases in discovery research and clinical trial costs. We continued to be a leader in our industry peer group by investing approximately 20 percent of our sales into research and development during 2006. Marketing, selling, and administrative expenses increased 9 percent in 2006, to $4.89 billion. This increase was largely attributable to increased marketing and selling expenses in support of key products, primarily Cymbalta and the diabetes care franchise, and an increase in litigation-related costs. Other income — net decreased $76.4 million, to $237.8 million.
We incurred tax expense of $755.3 million in 2006, resulting in an effective tax rate of 22.1 percent, compared with 26.3 percent for 2005. The effective tax rates for 2006 and 2005 were affected primarily by the product liability charges of $494.9 million and $1.07 billion, respectively. The tax benefit associated with these charges was less than our effective tax rate, as the tax benefit was calculated based upon existing tax laws in the countries in which we reasonably expect to deduct the charge. See Note 11 to the consolidated financial statements for additional information. | EXCERPTS ON THIS PAGE:
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