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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1993 Commission File Number 1-6351
ELI LILLY AND COMPANY
(Exact name of Registrant as specified in its charter)
LILLY CORPORATE CENTER
INDIANA 35-0470950 INDIANAPOLIS, INDIANA 46285
(State or other (IRS Employer (Address of principal (Zip Code)
jurisdiction of incor- Identification No.) executive offices)
poration or organization)
Registrant's telephone number, including area code: 317-276-2000
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
Common Stock New York Stock Exchange
Pacific Stock Exchange
Contingent Payment Obligation Units American Stock Exchange
Preferred Stock Purchase Rights New York Stock Exchange
Pacific Stock Exchange
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: None
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in the definitive proxy statement incorporated
by reference in Part III of this Form 10-K or any amendment to this Form 10-
K.[]
The aggregate market value of voting stock of the Registrant held by non-
affiliates as of February 21, 1994 (Common Stock): $13,447,757,840.
The number of shares of common stock outstanding as of February 21, 1994:
CLASS NUMBER OF SHARES OUTSTANDING
Common 292,665,649
Portions of the following documents have been incorporated by reference into
this report:
DOCUMENT PARTS INTO WHICH INCORPORATED
Registrant's Annual Report to Shareholders Parts I, II, and IV
for fiscal year ended December 31, 1993
Registrant's Proxy Statement dated March
14, 1994 Part III
PART I
Item 1. BUSINESS
Eli Lilly and Company was incorporated in 1901 under the laws of Indiana
to succeed to the drug manufacturing business founded in Indianapolis,
Indiana, in 1876 by Colonel Eli Lilly. The Company*, including its
subsidiaries, is engaged in the discovery, development, manufacture, and sale
of products in one industry segment - Life Sciences. Products are
manufactured or distributed through owned or leased facilities in the United
States, Puerto Rico, and 27 other countries, in 19 of which the Company owns
or has an interest in manufacturing facilities. Its products are sold in
approximately 120 countries.
Most of the Company's products were discovered or developed through the
Company's research and development activities, and the success of the
Company's business depends to a great extent on the introduction of new
products resulting from these research and development activities. Research
efforts are primarily directed toward the discovery of products to diagnose
and treat diseases in human beings and animals and to increase the efficiency
of animal food production. Research efforts are also directed toward
developing medical devices.
FINANCIAL INFORMATION RELATING TO INDUSTRY
SEGMENTS AND CLASSES OF PRODUCTS
Financial information relating to industry segments and classes of
products, set forth in the Company's 1993 Annual Report at pages 18-19 under
"Review of Operations - Segment Information" (pages 12-13 of Exhibit 13 to
this Form 10-K), is incorporated herein by reference.
Due to several factors, including the introduction of new products by the
Company and other manufacturers, the relative contribution of any particular
Company product to consolidated net sales is not necessarily constant from
year to year, and its contribution to net income is not necessarily the same
as its contribution to consolidated net sales.
PRODUCTS
Pharmaceutical Products
Pharmaceutical products include
Anti-infectives, including the oral cephalosporin antibiotics Ceclor
(Registered), Keflex(Registered), and Keftab(Registered), used in
the treatment of a wide range of bacterial infections; the oral
carbacephem antibiotic Lorabid(Trademark), used to treat a variety of
infections; the injectable cephalosporin antibiotics Mandol(Registered),
Tazidime(Registered), Kefurox(Registered), and Kefzol(Registered), used
to treat a wide range of infections in the hospital setting;
Nebcin(Registered), an injectable aminoglycoside antibiotic used in
hospitals to treat a broad range of infections caused by staphylococci
and Gram-negative bacteria; and Vancocin(Registered) HCl, an antibiotic
used primarily to treat staphylococcal infections;
Central-nervous-system agents, including the antidepressant agent
Prozac(Registered), a highly specific serotonin uptake inhibitor,
indicated for the treatment of depression and, in certain countries, for
bulimia and obsessive-compulsive disorder; and the analgesic Darvocet-
N(Registered) 100, which is indicated for the relief of mild-to-moderate
pain;
* The terms "Company" and "Registrant" are used interchangeably
herein to refer to Eli Lilly and Company or to Eli Lilly and Company
and its consolidated subsidiaries, as the context requires.
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Diabetic care products, including Iletin(Registered) (insulin) in its
various pharmaceutical forms; and Humulin(Registered), human insulin
produced through recombinant DNA technology;
Oncolytic agents, including Oncovin(Registered), indicated for
treatment of acute leukemia and, in combination with other oncolytic
agents, for treatment of several different types of advanced cancers;
Velban(Registered), used in a variety of malignant neoplastic
conditions; and Eldisine(Registered), indicated for treatment of acute
childhood leukemia resistant to other drugs;
An antiulcer agent, Axid(Registered), an H2 antagonist, indicated for
the treatment of active duodenal ulcer, for maintenance therapy for
duodenal ulcer patients after healing of an active duodenal ulcer, and
for reflux esophagitis; and
Additional pharmaceuticals, including cardiovascular therapy
products, principally Dobutrex(Registered); hormones, including
Humatrope(Registered), human growth hormone produced by recombinant DNA
technology; and sedatives.
Medical Devices and Diagnostic Products
Medical devices include patient vital-signs measurement and
electrocardiography systems, intravenous fluid-delivery and control systems,
implantable cardiac pacemakers and implantable cardioverter/defibrillators,
cardiac defibrillators and monitors, coronary angioplasty catheter systems,
peripheral and coronary atherectomy catheter systems, and devices for use
during minimally-invasive surgery procedures.
Diagnostic products include monoclonal-antibody-based diagnostic tests for
colon, prostate, and testicular cancer, as well as for infertility,
pregnancy, heart attack, thyroid deficiencies, allergies, anemia, dwarfism,
and infectious diseases.
Animal Health Products
Animal health products include Tylan(Registered), an antibiotic used to
control certain diseases in cattle, swine, and poultry and to improve feed
efficiency and growth; Rumensin(Registered), a cattle feed additive that
improves feed efficiency and growth; Compudose(Registered), a controlled-
release implant that improves feed efficiency and growth in cattle;
Coban(Registered), Monteban(Registered) and Maxiban(Registered),
anticoccidial agents for use in poultry; Apralan(Registered), an antibiotic
used to control enteric infections in calves and swine; Micotil(Registered),
an antibiotic used to treat bovine respiratory disease; and other products
for livestock and poultry.
MARKETING
Most of the Company's major products are marketed worldwide.
In the United States, the Company's Pharmaceutical Division distributes
pharmaceutical products principally through approximately 225 wholesale
distributing outlets. Marketing policy is designed to assure immediate
availability of these products to physicians, pharmacies, hospitals, and
appropriate health care professionals throughout the country. Four wholesale
distributing companies in the United States accounted for approximately 11%,
9%, 6%, and 5% respectively, of consolidated net sales in 1993. No other
distributor accounted for as much as 5% of consolidated net sales. The
Company also makes direct sales of its pharmaceutical products to the United
States government and to other manufacturers, but those direct sales do not
constitute a material portion of consolidated net sales.
The Company's pharmaceutical products are promoted in the United States
under the Lilly and Dista trade names by one hospital and three retail
sales forces employing salaried sales representatives. These sales
representatives, approximately half of whom are registered pharmacists,
call upon physicians, wholesalers, hospitals, managed-care organizations,
retail pharmacists, and other health care professionals. Their efforts
are supported by the Company through advertising in medical and drug
journals, distribution of literature and samples of certain products
to physicians, and exhibits for use at medical meetings. In the past
few years, large purchasers of pharmaceuticals, such
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as managed-care groups and government and long-term care institutions,
have begun to account for an increasing portion of total pharmaceutical
purchases in the United States. In 1992, reflecting these changes, the
Company created special sales groups to service government and long-term
care institutions, and expanded its managed-care sales organization. In
response to competitive pressures, the Company has entered into arrangements
with a number of these organizations providing for discounts or rebates on
one or more Company products.
Pharmaceutical products are promoted outside the United States by salaried
sales representatives. While the products marketed vary from country to
country, anti-infectives constitute the largest single group in total volume.
Distribution patterns vary from country to country.
IVAC Corporation markets its patient temperature-measuring and vital-signs
products and intravenous fluid-infusion systems principally to hospitals in
the United States. Sales in the United States are conducted by a direct
sales force. Sales outside the United States are conducted by both direct
sales representatives and independent distributors.
Cardiac Pacemakers, Inc. markets pacemaker products and automatic
implantable cardioverter/defibrillators to physicians and hospitals. Sales
are conducted by direct sales representatives and by independent distributors
both inside and outside the United States.
Physio-Control Corporation markets cardiac defibrillators and monitors,
electrocardiography systems, and vital-signs-measurement equipment to
hospitals and emergency care units. In the United States, sales are
conducted by direct sales representatives. Sales outside the United States
are conducted by both direct sales representatives and independent
distributors. Physio-Control suspended production in May 1992 following an
inspection of its operations by the U.S. Food and Drug Administration
("FDA"). During 1993, Physio-Control received FDA authorization to resume
shipments of the majority of its product line. Physio-Control is seeking FDA
authorization to resume shipments of its remaining products.
Advanced Cardiovascular Systems, Inc. primarily markets coronary
dilatation balloon catheter systems to cardiologists to open obstructed
coronary arteries. In the United States, sales are conducted by a direct
sales force. Sales outside the United States are conducted by both direct
sales representatives and independent distributors.
Devices for Vascular Intervention, Inc. markets atherectomy catheter
systems for the treatment of coronary vascular disease by the removal of
atherosclerotic plaque. In the United States, sales are conducted by direct
sales representatives. Sales outside the United States are conducted by
independent distributors.
Origin Medsystems, Inc., acquired by the Company in 1992, markets devices
for use in minimally invasive surgical procedures. Sales in the United
States are conducted by direct sales representatives. Sales outside the
United States are conducted by independent distributors and a direct sales
force.
Heart Rhythm Technologies, Inc. is developing catheter-based ablation
systems to correct faulty signals at the heart, using a less-invasive
approach than current therapy. Heart Rhythm Technologies has no products
currently approved for marketing.
Hybritech Incorporated and Pacific Biotech, Inc. market their
immunodiagnostic products to hospitals, commercial laboratories, clinics, and
physicians. Sales are conducted by direct sales representatives and by
independent distributors both inside and outside the United States.
Elanco Animal Health, a division of the Company, employs field salespeople
throughout the United States to market animal health products. Sales are
made to wholesale distributors, retailers, feed manufacturers, or producers
in conformance with varying distribution patterns applicable to the various
types of products. The Company also has an extensive sales force outside the
United States to market its animal health products.
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RAW MATERIALS
Most of the principal materials used by the Company in manufacturing
operations are chemical, plant, and animal products that are available from
more than one source. Certain raw materials are available or are purchased
principally from only one source. Unavailability of certain materials from
present sources could cause an interruption in production pending
establishment of new sources or, in some cases, implementation of alternative
processes.
Although the major portion of the Company's sales abroad are of products
manufactured wholly or in part abroad, a principal source of active
ingredients for these manufactured products continues to be the Company's
facilities in the United States.
PATENTS AND LICENSES
The Company owns, has applications pending for, or is licensed under, a
substantial number of patents, both in the United States and in other
countries, relating to products, product uses, and manufacturing processes.
There can be no assurance that patents will result from the Company's pending
applications. Moreover, patents relating to particular products, uses, or
processes do not preclude other manufacturers from employing alternative
processes or from successfully marketing substitute products to compete with
the patented products or uses.
Patent protection of certain products, processes, and uses - particularly
that relating to Ceclor, Dobutrex, Humulin, Prozac, Axid, and Lorabid - is
considered to be important to the operations of the Company. The United
States product patent covering Ceclor, the Company's second largest selling
product, expired in December 1992. The Company holds a U.S. patent on a key
intermediate material that remains in force until December 1994. It has been
reported that several abbreviated new drug applications for generic
formulations of cefaclor (the active ingredient in Ceclor) have been filed in
the U.S. and regulatory submissions have been made in other countries. Small
quantities of a generic formulation are currently being marketed in India.
Although the Company cannot predict the ultimate effect on the sales of
Ceclor or the Company's results of operations, the Company believes that the
expiration of the U.S. product and intermediate patents will not have a
material adverse effect on the Company's near-term consolidated financial
position. The United States patent covering Dobutrex expired in October
1993. Prior to the expiration, U.S. sales of Dobutrex accounted for
approximately 2% of the Company's worldwide sales. The patent expiration
has resulted in a significant decline in U.S. Dobutrex sales, and the
Company expects this decline to continue. During the first two months of
1994, U.S. sales of the product declined approximately 75%. The
contribution of Dobutrex to the Company's net income is greater than its
contribution to net sales. The Company is unable to predict the effect
of the expiration on the Company's consolidated results of operations;
however, the Company believes the expiration will not have a material
adverse effect on its consolidated financial position. The United States
patent covering Humulin expires in 2000, the Prozac patent expires in
2001, the Axid patent expires in 2002, and the Lorabid patent expires in 2004.
The Company also grants licenses under patents and know-how developed by
the Company and manufactures and sells products and uses technology and know-
how under licenses from others. Royalties received by the Company in
relation to licensed pharmaceuticals, medical devices, and diagnostic
products amounted to approximately $56.7 million in 1993, and royalties paid
by it in relation to pharmaceuticals, medical devices, and diagnostic
products amounted to approximately $92.5 million in 1993.
COMPETITION
The Company's pharmaceutical products compete with products manufactured
by numerous other companies in highly competitive markets in the United
States and throughout the world. Its medical devices compete with
numerous domestic and foreign manufacturers of conventional mercury-glass
thermometers, implantable cardiac pacemakers, cardiac defibrillators and
monitors, electronic temperature-measuring systems, vital-signs measuring
systems, intravenous systems, angioplasty catheter systems, and minimally-
invasive surgery devices. The Company's diagnostic products
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compete with conventional immunodiagnostic assays as well as with
monoclonal-antibody-based products marketed by numerous foreign and domestic
manufacturers. Its animal health products compete on a worldwide basis
with products of pharmaceutical, chemical, and other companies that operate
animal health divisions or subsidiaries.
Important competitive factors include price and cost-effectiveness,
product characteristics and dependability, service, and research and
development of new products and processes. The introduction of new products
and the development of new processes by domestic and foreign companies can
result in progressive price reductions or decreased volume of sales of
competing products, or both. New products introduced with patent protection
usually must compete with other products already on the market at the time of
introduction or products developed by competitors after introduction. The
Company believes its competitive position in these markets is dependent upon
its research and development endeavors in the discovery and development of
new products, together with increased productivity resulting from improved
manufacturing methods, marketing efforts, and customer service. There can be
no assurance that products manufactured or processes used by the Company will
not become outmoded from time to time as a result of products or processes
developed by its competitors.
GOVERNMENTAL REGULATION
The Company's operations have for many years been subject to extensive
regulation by the federal government, to some extent by state governments,
and in varying degrees by foreign governments. The Federal Food, Drug, and
Cosmetic Act, other federal statutes and regulations, various state statutes
and regulations, and laws and regulations of foreign governments govern
testing, approval, production, labeling, distribution, post-market
surveillance, advertising, promotion, and in some instances, pricing, of most
of the Company's products. In addition, the Company's operations are subject
to complex federal, state, local, and foreign environmental laws and
regulations. It is anticipated that compliance with regulations affecting
the manufacture and sale of current products and the introduction of new
products will continue to require substantial scientific and technical
effort, time, and expense and significant capital investment.
In the United States, the federal administration has identified health
care reform as a priority and introduced legislation that, if enacted, would
make fundamental changes in the health care delivery system. In addition, a
number of reform measures have been proposed by members of Congress. Many
state legislatures are also considering health care reform measures. The
nature of the changes that may ultimately be enacted and their impact on the
Company and the pharmaceutical industry are unknown. However, several of the
measures currently under discussion, if enacted, could affect the industry
and the Company by, among other things, increasing pressures on pricing,
restricting physicians' choice of therapies, raising effective tax rates, and
reducing incentives to invest in research and development. Outside the
United States, governments in several countries, including Germany, Italy,
and the United Kingdom, are implementing health care cost-control measures
that may adversely affect pharmaceutical industry revenues. The Company is
unable to predict the extent to which its business may be affected by these
or other future legislative and regulatory developments.
RESEARCH AND DEVELOPMENT
The Company's research and development activities are responsible for the
discovery or development of most of the products offered by the Company
today. Its commitment to research and development dates back more than 100
years. The growth in research and development expenditures and personnel
over the past several years demonstrates both the continued vitality of the
Company's commitment and the increasing costs and complexity of bringing new
products to the market. At the end of 1993, approximately 5,600 people,
including a substantial number who are physicians or scientists holding
graduate or postgraduate degrees or highly skilled technical personnel, were
engaged in research and development activities. The Company expended $766.9
million on research and development activities in 1991, $924.9 million in
1992, and $954.6 million in 1993.
The Company's research is concerned primarily with the effects of
synthetic chemicals and natural products on biological systems. The
results of that research are applied to the development of
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products for use by or on humans and animals, and for other uses. Major
effort is devoted to pharmaceutical products. In late 1993, the Company
decided to concentrate its pharmaceutical research and development efforts
on the search for compounds that will cure or treat diseases in five
categories: central nervous system and related diseases; endocrine diseases,
including diabetes and osteoporosis; infectious diseases; cancer; and
cardiovascular diseases. The Company is engaged in biotechnology research
programs involving recombinant DNA and monoclonal antibodies. The Company's
biotechnology research is supplemented through its Hybritech and Pacific
Biotech subsidiaries, which conduct research using monoclonal-antibody-based
product technology for diagnosis of certain diseases or medical conditions.
In addition to the research activities carried on in the Company's own
laboratories, the Company sponsors and underwrites the cost of research and
development by independent organizations, including educational institutions
and research-based human health care companies, and contracts with others for
the performance of research in their facilities. It utilizes the services of
physicians, hospitals, medical schools, and other research organizations in
the United States and numerous other countries to establish through clinical
evidence the safety and effectiveness of new products.
IVAC, Cardiac Pacemakers, Advanced Cardiovascular Systems, Physio-Control,
Devices for Vascular Intervention, Origin Medsystems, and Heart Rhythm
Technologies conduct research and development in the area of medical devices.
Extensive work is also conducted in the animal sciences, including animal
nutrition and physiology and veterinary medicine. Certain of the Company's
research and development activities relating to pharmaceutical products may
be applicable to animal health products. An example is the search for agents
that will cure infectious disease.
QUALITY ASSURANCE
The Company's success depends in great measure upon customer confidence in
the quality of the Company's products and in the integrity of the data that
support their safety and effectiveness. The quality of the Company's
products arises from the total commitment to quality in all parts of the
Company, including research and development, purchasing, facilities planning,
manufacturing, and distribution. Quality-assurance procedures have been
developed relating to the quality and integrity of the Company's scientific
information and production processes.
With respect to pharmaceutical, diagnostic, and animal health products,
control of production processes involves rigid specifications for
ingredients, equipment, facilities, manufacturing methods, packaging
materials, and labeling. Control tests are made at various stages of
production processes and on the final product to assure that the product
meets the Company's standards. These tests may involve chemical and physical
chemical analyses, microbiological testing, testing in animals, or a
combination of these tests. Additional assurance of quality is provided by a
corporate quality-assurance group that monitors existing pharmaceutical and
animal health manufacturing procedures and systems in the parent company,
subsidiaries, and affiliates.
The quality of medical devices is assured through specifications of
components and finished products, inspection of certain components,
certification of certain vendors, control of the manufacturing environment,
and use of statistical process controls. Final products are tested to assure
conformance with specifications.
EXECUTIVE OFFICERS OF THE COMPANY
The following table sets forth certain information regarding the executive
officers of the Company. All but three of the executive officers have been
employed by the Company in executive or managerial positions during the last
five years.
Randall L. Tobias became Chairman of the Board and Chief Executive Officer
in June 1993. He had served as Vice Chairman of the Board of American
Telephone and Telegraph Company from 1986 until he assumed his present
position. He has been a member of the Board of Directors of the Company
since 1986. August M. Watanabe joined the Company in 1990 as Vice
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President of Lilly Research Laboratories. Previously he had served as
Chairman of the Department of Medicine at Indiana University School of
Medicine from 1983 through 1990. From 1987 until he joined the Company in
August 1990, Mitchell E. Daniels, Jr., President, North American
Pharmaceutical Operations, Pharmaceutical Division, served as President
and Chief Executive Officer of the Hudson Institute and was of counsel to
Baker & Daniels. From 1985 to 1987 he served on former President Reagan's
staff as Assistant to the President for Political and Intergovernmental
Affairs.
Except as indicated in the table below, the term of office for each
executive officer indicated herein expires on the date of the annual meeting
of the Board of Directors, to be held on April 18, 1994, or on the date his
successor is chosen and qualified. No director or executive officer of the
Company has a "family relationship" with any other director or executive
officer of the Company, as that term is defined for purposes of this
disclosure requirement. There is no understanding between any executive
officer of the Company and any other person pursuant to which the executive
officer was selected.
NAME AGE OFFICES
Randall L. Tobias 52 Chairman of the Board and Chief Executive
Officer (since June 1993) and a Director
Mel Perelman, Ph.D. 63 Executive Vice President (since December
1986) and a Director(1)
Sidney Taurel 45 Executive Vice President (since January
1993) and a Director
Joseph C. Cook, Jr. 52 Group Vice President, Manufacturing,
Engineering, and Corporate Quality
(since June 1992)(2)
James M. Cornelius 50 Vice President, Finance and Chief
Financial Officer (since January 1983)
and a Director
Mitchell E. Daniels, Jr. 44 President, North American Pharmaceutical
Operations, Pharmaceutical Division
(since April 1993)(3)
Ronald W. Dollens 47 President, Medical Devices and
Diagnostics Division (since July 1991)(3)
Michael L. Eagle 46 Vice President, Manufacturing (since
January 1994)(4)
Brendan P. Fox 50 President, Elanco Animal Health Division
(since January 1991)(3)
Pedro P. Granadillo 46 Vice President, Human Resources (since
April 1993)
J. B. King 64 Vice President and General Counsel
(since October 1987)
Stephen A. Stitle 48 Vice President, Corporate Affairs (since
April 1993) and a Director
W. Leigh Thompson, Ph.D., M.D. 55 Chief Scientific Officer (since January
1993)(3)
August M. Watanabe, M.D. 52 Vice President (since January 1994) and
a Director(4)
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1 Retired as an officer and director effective December 31, 1993
2 Retired as an officer effective December 31, 1993
3 Serves in office until his successor is appointed
4 Became executive officer January 1994
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EMPLOYEES
At the end of 1993, the Company had approximately 32,700 employees,
including approximately 11,000 employees outside the United States. A
substantial number of the Company's employees have long records of continuous
service. Approximately 2,600 employees, including 1,900 U.S. employees, are
retiring under voluntary early retirement programs announced in the fourth
quarter of 1993.
FINANCIAL INFORMATION RELATING TO FOREIGN AND DOMESTIC OPERATIONS
Financial information relating to foreign and domestic operations, set
forth in the Company's 1993 Annual Report at pages 18-19 under "Review of
Operations - Segment Information" (pages 12-13 of Exhibit 13), is incorporated
herein by reference.
Eli Lilly International Corporation, a subsidiary, coordinates the
Company's manufacture and sale of products outside the United States.
Local restrictions on the transfer of funds from branches and subsidiaries
located abroad (including the availability of dollar exchange) have not to
date been a significant deterrent in the Company's overall operations abroad.
The Company cannot predict what effect these restrictions or the other risks
inherent in foreign operations, including possible nationalization, might
have on its future operations or what other restrictions may be imposed in
the future.
RECENT DEVELOPMENTS
On January 18, 1994, the Company announced its intent to divest itself of
its medical device and diagnostics ("MDD") businesses. The final form of
the divestiture has not been resolved. It will depend on tax, market, and
other considerations, including the nature of any offers the Company may
receive from prospective purchasers of one or more of the businesses. Current
plans call for the creation of a new holding company comprising six of the
businesses and the divestiture of the new company through a spin-off to
Company shareholders, one or more public offerings of the holding
company's shares, or a combination of these methods. These six
businesses are Advanced Cardiovascular Systems, Cardiac Pacemakers, Devices
for Vascular Intervention, Heart Rhythm Technologies, IVAC, and Origin
Medsystems. The Company currently intends to sell separately the three other
businesses in the MDD division - Hybritech, Pacific Biotech, and Physio-
Control. The agreements under which the Company acquired Hybritech, Pacific
Biotech, and Origin Medsystems include provisions that could affect the
timing of these transactions.
On March 8, 1994, the Company announced that it had signed a letter of
intent with Sphinx Pharmaceuticals Corporation for the acquisition of Sphinx
by the Company. Sphinx is engaged in drug discovery and development by
generating combinatorial chemistry libraries of small organic molecules and
by high-throughput screening of compounds for biological activity. The
transaction is subject to the signing of a definitive agreement, applicable
government approval, and approval by Sphinx shareholders. Three purported
class actions have been filed by shareholders of Sphinx seeking, among other
things, to enjoin the transaction.
Item 2. PROPERTIES
The Company's principal domestic and international executive offices are
located in Indianapolis. At December 31, 1993, the Company owned 14
production plants and facilities in the United States and Puerto Rico.
These plants and facilities contain an aggregate of approximately 12 million
square feet of floor area. Most of the plants and facilities involve
production of both pharmaceutical and animal health products. The Company
owns manufacturing, research, and administrative facilities for medical
devices and diagnostic products, containing an aggregate of approximately
1.9 million square feet, in seven cities in the United States and Puerto
Rico. The Company's Medical Devices and Diagnostics Division leases
manufacturing, research, and administrative facilities in the United
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States containing an aggregate of approximately 800,000 square feet. The
Company also leases sales offices in a number of cities located in the
United States.
The Company has 25 production plants and facilities in 19 countries
outside the United States, containing an aggregate of approximately 3.9
million square feet of floor space. Leased production and warehouse
facilities are utilized in some of these countries as well as in nine other
countries including Puerto Rico.
The Company's main research and development laboratories in Indianapolis
and Greenfield, Indiana, consist of approximately 2.8 million square feet.
Its major research and development facilities abroad are located in
Belgium and the United Kingdom and contain approximately 435,000 square feet.
The Company also owns two tracts of land, containing an aggregate of
approximately 1,700 acres, a portion of which is used for field studies
of products.
The Company believes that none of its properties is subject to any
encumbrance, easement, or other restriction that would detract materially
from its value or impair its use in the operation of the business of the
Company. The buildings owned by the Company are of varying ages and in good
condition.
Item 3. LEGAL PROCEEDINGS
The Company is currently a defendant in a variety of product and patent
litigation matters. In approximately 205 actions, plaintiffs seek to recover
damages on behalf of children or grandchildren of women who ingested
diethylstilbestrol during pregnancy. In another approximately 170 actions,
plaintiffs seek to recover damages as a result of the ingestion of Prozac.
In the patent suits, it is asserted that one or more Company products or
processes infringe issued patents. The holders of those patents seek
monetary damages and injunctions against further infringement. Products
involved include Humulin, Humatrope, bovine somatotropin and certain medical
devices.
A federal grand jury in Baltimore, Maryland is conducting an inquiry into
the Company's compliance with the Food and Drug Administration's regulatory
requirements affecting the Company's pharmaceutical manufacturing operations.
The Company is cooperating fully with the inquiry.
The Company has been named in approximately ten of more than 40 lawsuits
filed in various federal courts against a number of U.S. pharmaceutical
manufacturers and in some cases wholesalers. Most of the suits in which the
Company is a defendant purport to be class actions on behalf of all retail
pharmacies in the United States and allege an industry-wide agreement to deny
favorable pricing on sales to certain retail pharmacies. At least one also
alleges price discrimination. The suits are in an early procedural stage.
The Company is also a defendant in other litigation, including product
liability suits, of a character regarded as normal to its business.
While it is not possible to predict or determine the outcome of the legal
actions pending against the Company, in the opinion of the Company such
actions will not ultimately result in any liability that would have a
material adverse effect on its consolidated financial position.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
During the fourth quarter of 1993, no matters were submitted to a vote of
security holders.
-9-
PART II
Item 5. MARKET FOR THE COMPANY'S COMMON STOCK AND RELATED STOCKHOLDER
MATTERS
Information relating to the principal market for the Company's common
stock and related stockholder matters, set forth in the Company's 1993 Annual
Report under "Review of Operations - Selected Quarterly Data (unaudited)," at
page 20 (page 14 of Exhibit 13), is incorporated herein by reference.
Item 6. SELECTED FINANCIAL DATA
Selected financial data for each of the Company's five most recent fiscal
years, set forth in the Company's 1993 Annual Report under "Review of
Operations - Selected Financial Data (unaudited)," at page 21 (page 15 of
Exhibit 13), are incorporated herein by reference.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION
Management's discussion and analysis of results of operations and
financial condition, set forth in the Company's 1993 Annual Report under
"Review of Operations - Operating Results" (pages 9-13), "Review of
Operations - Financial Condition" (pages 13 and 16), and "Review of
Operations - Environmental and Legal Matters" (page 16) (together, pages
1-7 of Exhibit 13), is incorporated herein by reference.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The consolidated financial statements of the Company and its subsidiaries,
listed in Item 14(a)1 and included in the Company's 1993 Annual Report at
pages 12, 14, 15, and 17 (Consolidated Statements of Income, Consolidated
Balance Sheets, and Consolidated Statements of Cash Flows), pages 18-19
(Segment Information), and pages 22-33 (Notes to Consolidated Financial
Statements) (together, pages 8-13 and 16-30 of Exhibit 13), and the Report of
Independent Auditors set forth in the Company's 1993 Annual Report at page 34
(page 31 of Exhibit 13), are incorporated herein by reference.
Information on quarterly results of operations, set forth in the Company's
1993 Annual Report under "Review of Operations - Selected Quarterly Data
(unaudited)," at page 20 (page 14 of Exhibit 13), is incorporated herein by
reference.
Item 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information relating to the Company's directors, set forth in the
Company's Proxy Statement dated March 14, 1994, under "Election of
Directors - Nominees for Election," at pages 2-5, is incorporated herein by
reference. Information relating to the Company's executive officers is set
forth at pages 6-7 of this Form 10-K under "Executive Officers of the
Company." Additional information with respect to the Company's directors
and certain of its officers, set forth in the Company's Proxy Statement
dated March 14, 1994, under "Other Matters," at page 25, is incorporated
herein by reference.
-10-
Item 11. EXECUTIVE COMPENSATION
Information relating to executive compensation, set forth in the Company's
Proxy Statement dated March 14, 1994, under "Election of Directors -
Executive Compensation," at pages 9-20, is incorporated herein by reference,
except that the Compensation and Management Development Committee Report and
Performance Graph are not so incorporated.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Information relating to ownership of the Company's common stock by persons
known by the Company to be the beneficial owners of more than 5% of the
outstanding shares of common stock and by management, set forth in the
Company's Proxy Statement dated March 14, 1994, under "Election of
Directors - Common Stock Ownership by Directors and Executive Officers,"
at pages 6-7, and "Election of Directors - Principal Holders of Common
Stock," at page 8, is incorporated herein by reference.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None.
PART IV
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a)1. Financial Statements
The following consolidated financial statements of the Company and its
subsidiaries, included in the Company's 1993 Annual Report at the pages
indicated in parentheses, are incorporated by reference in Item 8:
Consolidated Statements of Income - Years Ended December 31, 1993, 1992,
and 1991 (page 12) (page 8 of Exhibit 13)
Consolidated Balance Sheets - December 31, 1993 and 1992 (pages 14-15)
(pages 9-10 of Exhibit 13)
Consolidated Statements of Cash Flows - Years Ended December 31, 1993,
1992, and 1991 (page 17) (page 11 of Exhibit 13)
Segment Information (pages 18-19) (pages 12-13 of Exhibit 13)
Notes to Consolidated Financial Statements (pages 22-33) (pages 16-30 of
Exhibit 13)
(a)2. Financial Statement Schedules
The following consolidated financial statement schedules of the Company
and its subsidiaries are included in this Form 10-K:
Schedule I Marketable Securities - Other Investments (page F-1)
Schedule V Property, Plant, and Equipment (page F-2)
Schedule VI Accumulated Depreciation, Depletion, and Amortization of
Property, Plant, and Equipment (page F-3)
-11-
Schedule VII Guarantees of Securities of Other Issuers (page F-4)
Schedule VIII Valuation and Qualifying Accounts (page F-5)
Schedule IX Short-Term Borrowings (page F-6)
Schedule X Supplementary Income Statement Information (page F-7)
All other schedules (Nos. II, III, IV, XI, XII, XIII, and XIV) for which
provision is made in the applicable accounting regulation of the Securities
and Exchange Commission are not required under the related instructions, are
inapplicable, or are adequately explained in the financial statements and,
therefore, have been omitted.
Financial statements of interests of 50% or less, which are accounted for
by the equity method, have been omitted because they do not, considered in
the aggregate as a single subsidiary, constitute a significant subsidiary.
The report of the Company's independent auditors with respect to the
schedules listed above is contained herein as a part of Exhibit 23, Consent
of Independent Auditors.
(a)3. Exhibits
3.1 Amended Articles of Incorporation
3.2 By-laws
4.1 Form of 7% Bond 1984-1994/96 of Eli Lilly Overseas Finance N.V.
4.2 Form of Guarantee dated as of January 9, 1984, by Eli Lilly and
Company to Holders of 7% Bonds 1984-1994/96 of Eli Lilly
Overseas Finance N.V.
4.3 Form of Letter Agreement dated as of January 9, 1984, between
Eli Lilly and Company, Eli Lilly Overseas Finance N.V., and
Swiss Bank Corporation
4.4 Form of Bond Purchase Agreement dated as of December 3, 1984,
including form of Bond, between City of Clinton, Indiana, Eli
Lilly and Company, and Chemical Bank*
4.5 Form of Loan Agreement dated as of December 3, 1984, between Eli
Lilly and Company and City of Clinton, Indiana*
4.6 Form of Bond Purchase Agreement dated as of December 3, 1984,
including form of Bond, between Tippecanoe County, Indiana, Eli
Lilly and Company, and Chemical Bank*
4.7 Form of Loan Agreement dated as of December 3, 1984, between Eli
Lilly and Company and Tippecanoe County, Indiana*
4.8 Form of Indenture dated as of May 15, 1985, between Eli Lilly
and Company and Merchants National Bank & Trust Company of
Indianapolis, as Trustee
4.9 Form of Eli Lilly and Company Convertible Debenture due 1994
4.10 Form of Indenture with respect to Contingent Payment Obligation
Units dated March 18, 1986, between Eli Lilly and Company and
Harris Trust and Savings Bank, as Trustee
- ---------------------
* Exhibits 4.4-4.7 are not filed with this report. Copies of these
exhibits will be furnished to the Securities and Exchange Commission
upon request.
-12-
4.11 Rights Agreement dated as of July 18, 1988, between Eli Lilly
and Company and Bank One, Indianapolis, NA
4.12 Form of Indenture dated as of February 21, 1989, between Eli
Lilly and Company and Merchants National Bank & Trust Company of
Indianapolis, as Trustee
4.13 Form of Eli Lilly and Company Five Year Convertible Note
4.14 Form of Indenture with respect to Debt Securities dated as of
February 1, 1991, between Eli Lilly and Company and Citibank,
N.A., as Trustee
4.15 Form of Standard Multiple-Series Indenture Provisions dated,
and filed with the Securities and Exchange Commission on,
February 1, 1991
4.16 Form of Indenture dated as of September 5, 1991, among the Lilly
Savings Plan Master Trust Fund C, as Issuer; Eli Lilly and
Company, as Guarantor; and Chemical Bank, as Trustee*
10.1 1984 Lilly Stock Plan, as amended
10.2 1989 Lilly Stock Plan, as amended
10.3 The Lilly Deferred Compensation Plan, as amended
10.4 The Lilly Directors' Deferred Compensation Plan, as amended
10.5 The Lilly Non-Employee Directors' Deferred Stock Plan, as
amended
10.6 Eli Lilly and Company Senior Executive Bonus Plan, as amended
10.7 The Lilly Non-Employee Directors' Retirement Plan
10.8 Letter Agreement dated September 3, 1993, between the Company and
Vaughn D. Bryson
11. Computation of Earnings Per Share on Primary and Fully Diluted
Bases
12. Computation of Ratio of Earnings to Fixed Charges
13. Annual Report to Shareholders for the Year Ended December 31,
1993 (portions incorporated by reference into this Form 10-K)
21. List of Subsidiaries
23. Consent of Independent Auditors
99. Report to Holders of Eli Lilly and Company Contingent Payment
Obligation Units
(b) Reports on Form 8-K
The Company filed no Reports on Form 8-K during the fourth quarter of
1993.
- -----------------
* Exhibit 4.16 is not filed with this report. Copies of this exhibit
will be furnished to the Securities and Exchange Commission upon
request.
-13-
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
ELI LILLY AND COMPANY
By s/Randall L. Tobias
(Randall L. Tobias, Chairman of the
Board and Chief Executive Officer)
March 21, 1994
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
s/Randall L. Tobias Chairman of the Board, March 21, 1994
(RANDALL L. TOBIAS) Chief Executive
Officer, and a Director
(principal executive officer)
s/James M. Cornelius Vice President, Finance, March 21, 1994
(JAMES M. CORNELIUS) Chief Financial Officer,
and a Director (principal
financial officer)
s/Keith E. Brauer Chief Accounting Officer March 21, 1994
(KEITH E. BRAUER) (principal accounting officer)
s/Steven C. Beering, M.D. Director March 21, 1994
(STEVEN C. BEERING, M.D.)
s/James W. Cozad Director March 21, 1994
(JAMES W. COZAD)
Director March 21, 1994
(KAREN N. HORN, Ph.D.)
s/J. Clayburn La Force, Jr., Ph.D. Director March 21, 1994
(J. CLAYBURN LA FORCE, JR., Ph.D.)
s/Kenneth L. Lay, Ph.D. Director March 21, 1994
(KENNETH L. LAY, Ph.D.)
-14-
s/Ben F. Love Director March 21, 1994
(BEN F. LOVE)
s/Stephen A. Stitle Director March 21, 1994
(STEPHEN A. STITLE)
s/Sidney Taurel Director March 21, 1994
(SIDNEY TAUREL)
s/August M. Watanabe, M.D. Director March 21, 1994
(AUGUST M. WATANABE, M.D.)
s/Alva O. Way Director March 21, 1994
(ALVA O. WAY)
s/Richard D. Wood Director March 21, 1994
(RICHARD D. WOOD)
-15-
TRADEMARKS
Apralan(Registered) (apramycin sulfate, Elanco)
Axid(Registered) (nizatidine, Lilly)
Ceclor(Registered) (cefaclor, Lilly)
Coban(Registered) (monensin sodium, Elanco)
Compudose(Registered) (estradiol controlled-release implant,
Elanco)
Darvocet-N(Registered) (propoxyphene napsylate with
acetaminophen, Lilly)
Dobutrex(Registered) (dobutamine hydrochloride, Lilly)
Eldisine(Registered) (vindesine sulfate, Lilly)
Humatrope(Registered) (somatropin of recombinant DNA origin,
Lilly)
Humulin(Registered) (human insulin of recombinant DNA origin,
Lilly)
lletin(Registered) (insulin, Lilly)
Keflex(Registered) (cephalexin, Dista)
Keftab(Registered) (cephalexin hydrochloride, Dista)
Kefurox(Registered) (cefuroxime sodium, Lilly)
Kefzol(Registered) (cefazolin sodium, Lilly)
Lorabid(Trademark) (loracarbef, Lilly)
Mandol(Registered) (cefamandole nafate, Lilly)
Maxiban(Registered) (narasin and nicarbazine, Elanco)
Micotil(Registered) (tilmicosin phosphate, Elanco)
Monteban(Registered) (narasin, Elanco)
Nebcin(Registered) (tobramycin sulfate, Lilly)
Oncovin(Registered) (vincristine sulfate, Lilly)
Prozac(Registered) (fluoxetine hydrochloride, Dista)
Rumensin(Registered) (monensin sodium, Elanco)
Tazidime(Registered) (ceftazidime, Lilly)
Tylan(Registered) (tylosin, Elanco)
Vancocin(Registered) (vancomycin hydrochloride, Lilly)
Velban(Registered) (vinblastine sulfate, Lilly)
ELI LILLY AND COMPANY AND SUBSIDIARIES
SCHEDULE I. MARKETABLE SECURITIES - OTHER INVESTMENTS
DECEMBER 31, 1993
Col. A Col. B Col. C Col. D Col. E
------ ------ ------ ------ ---------
Amount at
Which Each
Number Portfolio of
of Shares Equity
or Units- Market Security Issues
Principal Value of and Each Other
Amount of Cost of Issue at Security Issue
Name of Issuer Bonds Each Balance Carried in the
and Title of Issue and Notes Issue Sheet Date Balance Sheet
- ------------------------------------------------------------------------
(Dollars in millions)
CERTIFICATES OF DEPOSIT, TIME
DEPOSITS, AND
INTEREST-BEARING DEMAND
DEPOSITS $ 491.8 $ 491.8 $ 492.1 $ 491.8
REPURCHASE AGREEMENTS
Collateralized by U.S.
government or U.S.
government agency
securities 28.0 28.0 28.0 28.0
Collateralized by other
investments 42.3 42.3 42.3 42.3
EQUITY INVESTMENTS AND
LIMITED PARTNERSHIPS 216.5 216.5 221.3 204.0
EURO COMMERCIAL PAPER
AND BONDS 390.4 390.4 388.5 386.0
TOTALS $1,169.0 $1,169.0 $1,172.2 $1,152.1
======= ======= ======= =======
Classified as:
Current asset - Cash equivalent $ 482.9
- Short-term investments 447.5
Noncurrent asset 221.7
-----
TOTAL $1,152.1
=======
Securities classified as cash equivalents $ 482.9
Cash 56.7
-----
Cash and cash equivalents $ 539.6
=====
F-1
ELI LILLY AND COMPANY AND SUBSIDIARIES
SCHEDULE V. PROPERTY, PLANT, AND EQUIPMENT
Col. A Col. B Col. C Col. D Col E Col. F
------ ------ ------ ------ ------------------- -------
Other
Balance at Changes
Beginning (A) Add (Deduct) Add Balance
of Additions Translation (Deduct) At End
Classification Period At Cost Retirements Adjustments Describe of Period
(Dollars in millions)
Year Ended
Dec 31, 1991
Land $ 102.1 $ 8.8 $ - $ .6 $ - $ 111.5
Buildings 1,141.3 228.0 9.2 (2.3) - 1,357.8
Equipment 2,376.9 500.2 76.2 (5.6) - 2,795.3
Construction-
in-progress 895.5 405.4 - 3.1 - 1,304.0
------ ----- ----- ----- -------
TOTALS $4,515.8 $1, 142.4 $ 85.4 $ (4.2) $ - $ 5,568.6
======= ======== ==== ==== =======
Year Ended
Dec 31, 1992
Land $ 111.5 $ 3.1 $ 0.3 $ (0.4) $ (1.1)(B) $ 112.8
Buildings 1,357.8 371.6 30.8 (30.4) (12.8)(B) 1,655.4
Equipment 2,795.3 756.5 126.6 (83.6) 2.7 (B) 3,344.3
Construction-
in-progress 1,304.0 (218.3) - (16.9) (33.2)(B) 1,035.6
------- ------ ----- ------- ------ -------
TOTALS $5,568.6 $ 912.9 $157.7 $(131.3) $(44.4)(B) $ 6,148.1
======= ===== ===== ======= ===== =======
Year Ended
Dec 31, 1993
Land $ 112.8 $ 15.4 $ 0.1 $ 0.2 $ 1.9 (B) $ 130.2
Buildings 1,655.4 312.3 10.4 (14.7) 14.7 (B) 1,957.3
Equipment 3,344.3 563.3 60.9 (39.6) (35.4)(B) 3,771.7
Construction-
in-progress 1,035.6 (257.5) - (14.5) (56.3)(B) 707.3
------- ----- ---- ------ ------ -------
TOTALS $6,148.1 $633.5 $ 71.4 $ (68.6) $(75.1)(B) $6,566.5
======= ===== ==== ====== ====== =======
- -----------------
NOTE A Additions represent cash expenditures for projects in numerous
locations both inside and outside the United States. In 1992 and 1993
there were no major projects for which cash expenditures exceeded 2% of
total assets at either the beginning or the end of the year. In 1991
the 2% threshold was exceeded by one major project relating to an anticipated
new product launch. Expenditures for this project were primarily for
additions at Indiana locations.
NOTE B Amounts shown are attributable to corporate restructuring,
acquisitions, divestitures and miscellaneous reclassifications.
The range of annual rates used in computing provisions for depreciation was 2
percent to 10 percent for buildings and generally 4 percent to 25 percent for
equipment.
F-2
ELI LILLY AND COMPANY AND SUBSIDIARIES
SCHEDULE VI. ACCUMULATED DEPRECIATION, DEPLETION, AND AMORTIZATION
OF PROPERTY, PLANT, AND EQUIPMENT
Col. A Col. B Col. C Col. D Col E Col. F
------ ------ ------ ------ -------------------- ------
Other
Balance at Additions Changes
Beginning Charged to Add (Deduct) Add Balance
of Costs and Translation (Deduct) At End
Description Period Expenses Retirements Adjustments Describe of Period
- ----------------------------------------------------------------------------
(Dollars in millions)
Year Ended
Dec 31, 1991
Buildings $ 377.1 $ 48.9 $ 6.3 $. 1 $ - $ 419.8
Equipment 1,202.0 218.5 52.5 (1.7) - 1,366.3
------- ----- ---- ------ ----- -------
TOTALS $1,579.1 $267.4 $58.8 $( 1.6) $ - $1,786.1
======= ====== ==== ===== ===== =======
Year Ended
Dec 31, 1992
Buildings $ 419.8 $ 62.3 $ 21.3 $ (8.4) $ 32.2(A) $ 484.6
Equipment 1,366.3 268.3 97.6 (40.4) 94.8(A) 1,591.4
------- ----- ----- ----- ----- -------
TOTALS $1,786.1 $330.6 $118.9 $(48.8) $127.0(A) $2,076.0
======= ===== ===== ====== ===== =======
Year Ended
Dec 31, 1993
Buildings $ 484.6 $ 74.1 $ 4.9 $ (4.6) $ 9.2(A) $ 558.4
Equipment 1,591.4 294.5 58.9 (20.1) 1.0(A) 1,807.9
------- ----- ----- ------ ---- -------
TOTALS $2,076.0 $368.6 $63.8 $(24.7) $ 10.2(A) $2,366.3
======= ===== ==== ====== ==== =======
NOTE A - Amounts shown are primarily attributable to corporate
restructuring, divestitures and transfers between accounts.
F-3
ELI LILLY AND COMPANY AND SUBSIDIARIES
SCHEDULE VII. GUARANTEES OF SECURITIES OF OTHER ISSUERS
Col. A Col. B Col. C Col. D Col. E Col. F Col. G
------ ------ ------ ------ ------ ------ -----------
Nature of
any default
by issuer of
securities
guaranteed
in principal
Name of interest,
Issuer of sinking fund
securities Title of Amount owned or
guaranteed Issue Total by person Amount in redemption
by person of each amount or persons treasury of provisions,
for which class of guaranteed for which issuer of or
statement securities and statement securities Nature of payments of
is filed guaranteed outstanding is filed guaranteed guarantee dividends
- ----------------------------------------------------------------------------
The Harding St.
Indianapolis Project Debt
Local Public Bonds $35,451,123 -0- Service None
Improvement
Bond Bank
F-4
ELI LILLY AND COMPANY AND SUBSIDIARIES
SCHEDULE VIII. VALUATION AND QUALIFYING ACCOUNTS
Col. A Col. B Col. C Col. D Col.E
------ ------ ------ ------- ------
Additions
(1) (2)
Balance at Charged to Charged to Balance
Beginning Costs and Other Accounts-Deductions- at End
Description of Period Expenses Describe Describe of Period
- ----------------------------------------------------------------------------
(Dollars in millions)
(A) (A) (A)
Year Ended
December 31, 1991
Allowance for
cash discounts
and returns $ 6.2 $ 6.6
Allowance for
doubtful accounts 17.1 21.0
---- ----
TOTALS $23.3 $27.6
==== ====
Year Ended
December 31, 1992
Allowance for
cash discounts
and returns $ 6.6 $ 8.1
Allowance for
doubtful accounts 21.0 26.9
---- ----
TOTALS $27.6 $35.0
==== ====
Year Ended
December 31, 1993
Allowance for
cash discounts
and returns $ 8.1 $ 8.6
Allowance for
doubtful accounts 26.9 23.7
---- ----
TOTALS $35.0 $32.3
==== ====
NOTE A - The information called for under columns C and D is not
given, as the additions, deductions, and balances are not
individually significant.
F-5
ELI LILLY AND COMPANY AND SUBSIDIARIES
SCHEDULE IX. SHORT-TERM BORROWINGS
Col. A Col. B Col. C Col. D Col. E Col.F
------ ------ ------ ------ ------ --------
Weighted
Average Average
Maximum Amount Interest
Balance Weighted Amount Outstanding Rate
at Average Outstanding During During
Category of Aggregate End of Interest During the the the
Short-Term Borrowings Period Rate Period Period(C) Period(D)
- ---------------------------------------------------------------------------
(Dollars in millions)
Year Ended
December 31, 1991
Payable to banks (A) $315.0 6% $ 324.4 $ 188.5 7%
Commercial paper (B) 375.2 5% 1,160.6 482.7 6%
-----
Short-term
borrowings $690.2 6%
Year Ended
December 31, 1992
Payable to banks (A) $174.9 6% $350.4 $ 287.3 7%
Commercial paper (B) 416.3 3% 837.2 541.6 4%
-----
Short-term
borrowings $591.2 4%
Year Ended
December 31, 1993
Payable to banks (A) $178.4 7% $195.2 $114.7 9%
Commercial paper (B) 346.4 3% 877.6 434.7 3%
-----
Short-term
borrowings $524.8 4%
- -----------------------
NOTE A - Amounts payable to banks represent worldwide borrowings
under lines-of-credit and the current portion of long-
term debt.
NOTE B - Commercial paper is issued in the United States for
periods up to 270 days.
NOTE C - Average of daily balances.
NOTE D - Total interest divided by average borrowings
outstanding.
F-6
ELI LILLY AND COMPANY AND SUBSIDIARIES
SCHEDULE X. SUPPLEMENTARY INCOME STATEMENT INFORMATION
- ---------------------------------------------------------------------------
Col. A Col. B
------- --------------------------------
Item Charged to Costs and Expenses
Year Ended December 31
-------------------------------
1993 1992 1991
-------------------------------
(Dollars in millions)
Maintenance and repairs $178.8 $193.4 $178.7
Taxes, other than payroll and income 77.7 77.4 57.3
Advertising costs 29.6 24.3 21.0
Royalty expense 107.2 87.0 79.4
Amounts for depreciation and amortization of intangible assets
are presented in the Statements of Cash Flows.
F-7
INDEX TO EXHIBITS
The following documents are filed as part of this report:
Exhibit Location
- ------- --------
3.1 Amended Articles of Incorporated by reference
Incorporation from Exhibit 3(i) to the
Company's Registration
Statement on Form S-8,
Registration No. 33-50783
3.2 By-laws Filed herewith
4.1 Form of 7% Bond 1984-1994/96 Incorporated by reference
of Eli Lily Overseas Finance from Exhibit 4.1 to the
N.V. Company's Report on Form
10-K for the fiscal year
ended December 31, 1990
4.2 Form of Guarantee dated as Incorporated by reference
of January 9, 1984, by Eli from Exhibit 4.2 to the
Lilly and Company to Holders Company's Report on Form
of 7% Bonds 1984-1994/96 of 10-K for the fiscal year
Eli Lilly Overseas Finance ended December 31, 1990
N.V.
4.3 Form of Letter Agreement Incorporated by reference
dated as of January 9, 1984, from Exhibit 4.3 to the
between Eli Lilly and Company's Report on Form
Company, Eli Lilly Overseas 10-K for the fiscal year
Finance N.V., and Swiss Bank ended December 31, 1990
Corporation
4.4 Form of Bond Purchase *
Agreement dated as of
December 3, 1984, including
form of Bond, between City
of Clinton, Indiana, Eli
Lilly and Company, and
Chemical Bank
4.5 Form of Loan Agreement dated *
as of December 3, 1984,
between Eli Lilly and
Company and City of Clinton,
Indiana
4.6 Form of Bond Purchase *
Agreement dated as of
December 3, 1984, including
form of Bond, between
Tippecanoe County, Indiana,
Eli Lilly and Company, and
Chemical Bank
4.7 Form of Loan Agreement dated *
as of December 3, 1984,
between Eli Lilly and
Company and Tippecanoe
County, Indiana
- ------------------
* Exhibits 4.4-4.7 are not filed with this report. Copies of these exhibits
will be furnished to the Securities and Exchange Commission upon request.
4.8 Form of Indenture dated as Incorporated by reference
of May 15, 1985, between Eli from Exhibit 4(a) to the
Lilly and Company and Company's Registration
Merchants National Bank & Statement on Form S-15,
Trust Company of Registration No. 2-96799
Indianapolis, as Trustee
4.9 Form of Eli Lilly and Incorporated by reference
Company Convertible from Exhibit 4(b) to the
Debenture due 1994 Company's Registration
Statement on Form S-15,
Registration No. 2-96799
4.10 Form of Indenture with Incorporated by reference
respect to Contingent from Exhibit 4.3 to the
Payment Obligation Units Company's Registration
dated March 18, 1986, Statement on Form S-4,
between Eli Lilly and Registration No. 33-3330
Company and Harris Trust and
Savings Bank, as Trustee
4.11 Rights Agreement dated as of Filed herewith
July 18, 1988, between Eli
Lilly and Company and Bank
One, Indianapolis, N.A.
4.12 Form of Indenture dated as Incorporated by reference
of February 21, 1989, from Exhibit 4.16 to the
between Eli Lilly and Company's Report on Form
Company and Merchants 10-K for the fiscal year
National Bank & Trust ended December 31, 1988
Company of Indianapolis, as
Trustee
4.13 Form of Eli Lilly and Incorporated by reference
Company Five Year from Exhibit 4.17 to the
Convertible Note Company's Report on Form
10-K for the fiscal year
ended December 31, 1988
4.14 Form of Indenture with Incorporated by reference
respect to Debt Securities from Exhibit 4.1 to the
dated as of February 1, Company's Registration
1991, between Eli Lilly and Statement on Form S-3,
Company and Citibank, N.A., Registration No. 33-38347
as Trustee
4.15 Form of Standard Multiple- Incorporated by reference
Series Indenture Provisions from Exhibit 4.2 to the
dated, and filed with the Company's Registration
Securities and Exchange Statement on Form S-3,
Commission on, February 1, Registration No. 33-38347
1991
4.16 Form of Indenture dated as *
of September 5, 1991, among
the Lilly Savings Plan
Master Trust Fund C, as
Issuer; Eli Lilly and
Company, as Guarantor; and
Chemical Bank, as Trustee
- ---------------------
* Exhibit 4.16 is not filed with this report. Copies of this exhibit
will be furnished to the Securities and Exchange Commission upon request.
10.1 1984 Lilly Stock Plan, as Incorporated by reference
amended from Exhibit 10.2 to the
Company's Report on Form
10-K for the fiscal year
ended December 31, 1988
10.2 1989 Lilly Stock Plan, as Filed herewith
amended
10.3 The Lilly Deferred Incorporated by reference
Compensation Plan, as from Exhibit 10.4 to the
amended Company's Report on Form
10-K for the fiscal year
ended December 31, 1991
10.4 The Lilly Directors' Incorporated by reference
Deferred Compensation Plan, from Exhibit 10.5 to the
as amended Company's Report on Form
10-K for the fiscal year
ended December 31, 1991
10.5 The Lilly Non-Employee Incorporated by reference
Directors' Deferred Stock from Exhibit 10.6 to the
Plan, as amended Company's Report on Form
10-K for the fiscal year
ended December 31, 1991
10.6 Eli Lilly and Company Senior Filed herewith
Executive Bonus Plan, as
amended
10.7 The Lilly Non-Employee Incorporated by reference
Directors' Retirement Plan from Exhibit 10.7 to the
Company's Report on Form
10-K for the fiscal year
ended December 31, 1988
10.8 Letter Agreement dated Filed herewith
September 3, 1993, between
the Company and Vaughn D.
Bryson
11. Computation of Earnings Per Filed herewith
Share on Primary and Fully
Diluted Bases
12. Computation of Ratio of Filed herewith
Earnings to Fixed Charges
13. Annual Report to Filed herewith
Shareholders for the Year
Ended December 31, 1993
(portions incorporated by
reference in this Form 10-K)
21. List of Subsidiaries Filed herewith
23. Consent of Independent Filed herewith
Auditors
99. Report to Holders of Eli Filed herewith
Lilly and Company Contingent
Payment Obligation Units