Goodwill and Intangible Asset Disclosure
Adjustments to Financial Statements: Removal of Goodwill
Adjusted Financial Ratios: Removal of Goodwill (Summary)
Adjusted Total Asset Turnover
Adjusted Financial Leverage
Adjusted Return on Equity (ROE)
Adjusted Return on Assets (ROA)

Eli Lilly & Co., balance sheet: goodwill and intangible assets

US$ in thousands

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Goodwill	4,939,700)	4,073,000)	3,892,000)	3,766,500)	3,679,400)
Marketed products	8,216,800)	7,957,500)	8,056,600)	8,076,800)	3,244,400)
Finite-lived intangible assets, gross	8,216,800)	7,957,500)	8,056,600)	8,076,800)	3,244,400)
Accumulated amortization	(2,277,000)	(2,622,700)	(2,289,700)	(1,727,800)	(1,296,400)
Finite-lived intangible assets, net	5,939,800)	5,334,800)	5,766,900)	6,349,000)	1,948,000)
Acquired IPR&D	966,800)	1,871,800)	1,925,000)	1,101,000)	4,670,000)
Indefinite-lived intangible assets	966,800)	1,871,800)	1,925,000)	1,101,000)	4,670,000)
Other intangibles	6,906,600)	7,206,600)	7,691,900)	7,450,000)	6,618,000)
Goodwill and other intangibles	11,846,300)	11,279,600)	11,583,900)	11,216,500)	10,297,400)

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

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Item	Description	The company
Goodwill	Amount after accumulated impairment loss of an asset representing future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized.	Eli Lilly & Co. goodwill increased from 2021 to 2022 and from 2022 to 2023.
Other intangibles	Sum of the carrying amounts of all intangible assets, excluding goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges.	Eli Lilly & Co. other intangibles decreased from 2021 to 2022 and from 2022 to 2023.
Goodwill and other intangibles	Sum of the carrying amounts of all intangible assets, including goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges.	Eli Lilly & Co. goodwill and other intangibles decreased from 2021 to 2022 but then increased from 2022 to 2023 exceeding 2021 level.

Eli Lilly & Co., adjustments to financial statements

US$ in thousands

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Adjustment to Total Assets
Total assets (as reported)	64,006,300)	49,489,800)	48,806,000)	46,633,100)	39,286,100)
Less: Goodwill	4,939,700)	4,073,000)	3,892,000)	3,766,500)	3,679,400)
Total assets (adjusted)	59,066,600)	45,416,800)	44,914,000)	42,866,600)	35,606,700)
Adjustment to Total Eli Lilly And Company Shareholders’ Equity
Total Eli Lilly and Company shareholders’ equity (as reported)	10,771,900)	10,649,800)	8,979,200)	5,641,600)	2,606,900)
Less: Goodwill	4,939,700)	4,073,000)	3,892,000)	3,766,500)	3,679,400)
Total Eli Lilly and Company shareholders’ equity (adjusted)	5,832,200)	6,576,800)	5,087,200)	1,875,100)	(1,072,500)

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

Eli Lilly & Co., Financial Data: Reported vs. Adjusted

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Eli Lilly & Co., adjusted financial ratios

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Total Asset Turnover
Reported total asset turnover	0.53	0.58	0.58	0.53	0.57
Adjusted total asset turnover	0.58	0.63	0.63	0.57	0.63
Financial Leverage
Reported financial leverage	5.94	4.65	5.44	8.27	15.07
Adjusted financial leverage	10.13	6.91	8.83	22.86	—
Return on Equity (ROE)
Reported ROE	48.65%	58.64%	62.16%	109.79%	319.09%
Adjusted ROE	89.85%	94.95%	109.72%	330.31%	—
Return on Assets (ROA)
Reported ROA	8.19%	12.62%	11.44%	13.28%	21.17%
Adjusted ROA	8.87%	13.75%	12.43%	14.45%	23.36%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

Financial ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Eli Lilly & Co. adjusted total asset turnover ratio deteriorated from 2021 to 2022 and from 2022 to 2023.
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	Eli Lilly & Co. adjusted financial leverage ratio decreased from 2021 to 2022 but then increased from 2022 to 2023 exceeding 2021 level.
Adjusted ROE	A profitability ratio calculated as net income divided by adjusted shareholders’ equity.	Eli Lilly & Co. adjusted ROE deteriorated from 2021 to 2022 and from 2022 to 2023.
Adjusted ROA	A profitability ratio calculated as net income divided by adjusted total assets.	Eli Lilly & Co. adjusted ROA improved from 2021 to 2022 but then deteriorated significantly from 2022 to 2023.

Eli Lilly & Co., Financial Ratios: Reported vs. Adjusted

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	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
As Reported
Selected Financial Data (US$ in thousands)
Revenue	34,124,100)	28,541,400)	28,318,400)	24,539,800)	22,319,500)
Total assets	64,006,300)	49,489,800)	48,806,000)	46,633,100)	39,286,100)
Activity Ratio
Total asset turnover¹	0.53	0.58	0.58	0.53	0.57
Adjusted for Goodwill
Selected Financial Data (US$ in thousands)
Revenue	34,124,100)	28,541,400)	28,318,400)	24,539,800)	22,319,500)
Adjusted total assets	59,066,600)	45,416,800)	44,914,000)	42,866,600)	35,606,700)
Activity Ratio
Adjusted total asset turnover²	0.58	0.63	0.63	0.57	0.63

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

¹ Total asset turnover = Revenue ÷ Total assets
= 34,124,100 ÷ 64,006,300 = 0.53

² Adjusted total asset turnover = Revenue ÷ Adjusted total assets
= 34,124,100 ÷ 59,066,600 = 0.58

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Activity ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Eli Lilly & Co. adjusted total asset turnover ratio deteriorated from 2021 to 2022 and from 2022 to 2023.

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
As Reported
Selected Financial Data (US$ in thousands)
Total assets	64,006,300)	49,489,800)	48,806,000)	46,633,100)	39,286,100)
Total Eli Lilly and Company shareholders’ equity	10,771,900)	10,649,800)	8,979,200)	5,641,600)	2,606,900)
Solvency Ratio
Financial leverage¹	5.94	4.65	5.44	8.27	15.07
Adjusted for Goodwill
Selected Financial Data (US$ in thousands)
Adjusted total assets	59,066,600)	45,416,800)	44,914,000)	42,866,600)	35,606,700)
Adjusted total Eli Lilly and Company shareholders’ equity	5,832,200)	6,576,800)	5,087,200)	1,875,100)	(1,072,500)
Solvency Ratio
Adjusted financial leverage²	10.13	6.91	8.83	22.86	—

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

¹ Financial leverage = Total assets ÷ Total Eli Lilly and Company shareholders’ equity
= 64,006,300 ÷ 10,771,900 = 5.94

² Adjusted financial leverage = Adjusted total assets ÷ Adjusted total Eli Lilly and Company shareholders’ equity
= 59,066,600 ÷ 5,832,200 = 10.13

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Solvency ratio	Description	The company
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	Eli Lilly & Co. adjusted financial leverage ratio decreased from 2021 to 2022 but then increased from 2022 to 2023 exceeding 2021 level.

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
As Reported
Selected Financial Data (US$ in thousands)
Net income	5,240,400)	6,244,800)	5,581,700)	6,193,700)	8,318,400)
Total Eli Lilly and Company shareholders’ equity	10,771,900)	10,649,800)	8,979,200)	5,641,600)	2,606,900)
Profitability Ratio
ROE¹	48.65%	58.64%	62.16%	109.79%	319.09%
Adjusted for Goodwill
Selected Financial Data (US$ in thousands)
Net income	5,240,400)	6,244,800)	5,581,700)	6,193,700)	8,318,400)
Adjusted total Eli Lilly and Company shareholders’ equity	5,832,200)	6,576,800)	5,087,200)	1,875,100)	(1,072,500)
Profitability Ratio
Adjusted ROE²	89.85%	94.95%	109.72%	330.31%	—

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

¹ ROE = 100 × Net income ÷ Total Eli Lilly and Company shareholders’ equity
= 100 × 5,240,400 ÷ 10,771,900 = 48.65%

² Adjusted ROE = 100 × Net income ÷ Adjusted total Eli Lilly and Company shareholders’ equity
= 100 × 5,240,400 ÷ 5,832,200 = 89.85%

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Profitability ratio	Description	The company
Adjusted ROE	A profitability ratio calculated as net income divided by adjusted shareholders’ equity.	Eli Lilly & Co. adjusted ROE deteriorated from 2021 to 2022 and from 2022 to 2023.

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
As Reported
Selected Financial Data (US$ in thousands)
Net income	5,240,400)	6,244,800)	5,581,700)	6,193,700)	8,318,400)
Total assets	64,006,300)	49,489,800)	48,806,000)	46,633,100)	39,286,100)
Profitability Ratio
ROA¹	8.19%	12.62%	11.44%	13.28%	21.17%
Adjusted for Goodwill
Selected Financial Data (US$ in thousands)
Net income	5,240,400)	6,244,800)	5,581,700)	6,193,700)	8,318,400)
Adjusted total assets	59,066,600)	45,416,800)	44,914,000)	42,866,600)	35,606,700)
Profitability Ratio
Adjusted ROA²	8.87%	13.75%	12.43%	14.45%	23.36%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

¹ ROA = 100 × Net income ÷ Total assets
= 100 × 5,240,400 ÷ 64,006,300 = 8.19%

² Adjusted ROA = 100 × Net income ÷ Adjusted total assets
= 100 × 5,240,400 ÷ 59,066,600 = 8.87%

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Profitability ratio	Description	The company
Adjusted ROA	A profitability ratio calculated as net income divided by adjusted total assets.	Eli Lilly & Co. adjusted ROA improved from 2021 to 2022 but then deteriorated significantly from 2022 to 2023.

Eli Lilly & Co. (NYSE:LLY)

Analysis of Goodwill and Intangible Assets

Goodwill and Intangible Asset Disclosure

Adjustments to Financial Statements: Removal of Goodwill

Eli Lilly & Co., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: Removal of Goodwill (Summary)

Eli Lilly & Co., Financial Ratios: Reported vs. Adjusted

Adjusted Total Asset Turnover

Adjusted Financial Leverage

Adjusted Return on Equity (ROE)

Adjusted Return on Assets (ROA)