INDIANAPOLIS, Dec. 22 /PRNewswire-FirstCall/ -- Eli Lilly and Company announced today that, as part of the company’s ongoing efforts to increase productivity and reduce its cost structure, it has finalized decisions that will result in charges in the fourth quarter of 2005, consisting primarily of non-cash charges for the write-down of certain impaired assets. These assets, which have no future use, include manufacturing buildings and equipment no longer needed to supply projected capacity requirements, as well as obsolete research and development equipment. Some of the impaired assets have been replaced by newer, state-of-the-art buildings and equipment that are expected to further increase the company’s productivity in its manufacturing and R&D efforts.
The company anticipates taking a $170 million to $190 million pretax charge in the fourth quarter of 2005, which will reduce fourth quarter and full year 2005 reported earnings per share by approximately $0.13 to $0.15 (after-tax). However, the company excludes these charges from adjusted earnings and therefore reaffirms its adjusted earnings guidance for the fourth quarter and full year 2005 as provided in its press release of December 9, 2005.
Lilly, a leading innovation-driven corporation, is developing a growing portfolio of first-in-class and best-in-class 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 forward-looking statements that are based on management’s current expectations, but actual results may differ materially due to various factors. The amount of the fourth quarter charges is under review and is subject to change. More generally, 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. The company’s results may also be affected by such factors as competitive developments affecting current products; rate of sales growth of recently launched products; the timing of anticipated regulatory approvals and launches of new products; other regulatory developments and government investigations; patent disputes and other litigation involving current and future products; the impact of governmental actions regarding pricing, importation, and reimbursement for pharmaceuticals; changes in tax law; asset impairments and restructuring charges; and the impact of exchange rates. For additional information about the factors that affect the company’s business, please see Exhibit 99 to the company’s latest Form 10-Q filed November 2005. The company undertakes no duty to update forward-looking statements.
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CONTACT: Terra Fox of Eli Lilly and Company, +1-317-276-5795
