Eli Lilly & Co. (LLY)

Income Tax Expense (Benefit)
Effective Income Tax Rate (EITR)
Components of Deferred Tax Assets and Liabilities
Analyst Adjustments: Removal of Deferred Taxes
Adjusted Ratios: Removal of Deferred Taxes (Summary)
Adjusted Current Ratio
Adjusted Net Profit Margin
Adjusted Financial Leverage
Adjusted Return on Equity (ROE)
Adjusted Return on Assets (ROA)

Eli Lilly & Co., income tax expense (benefit), continuing operations

USD $ in thousands

	12 months ended	Dec 31, 2017		Dec 31, 2016		Dec 31, 2015		Dec 31, 2014		Dec 31, 2013
	Federal
	Foreign
	State
	2017 Tax Act, provisional
	Current tax expense
	Federal
	Foreign
	State
	2017 Tax Act, provisional
	Deferred tax expense (benefit)
	Income taxes

Based on: 10-K (filing date: 2018-02-20), 10-K (filing date: 2017-02-21), 10-K (filing date: 2016-02-19), 10-K (filing date: 2015-02-19), 10-K (filing date: 2014-02-19).

Item	Description	The company
Current tax expense	Amount of current income tax expense (benefit) pertaining to taxable income (loss) from continuing operations.	Eli Lilly & Co.'s current tax expense declined from 2015 to 2016 but then increased from 2016 to 2017 exceeding 2015 level.
Deferred tax expense (benefit)	Amount of deferred income tax expense (benefit) pertaining to income (loss) from continuing operations.	Eli Lilly & Co.'s deferred tax expense (benefit) increased from 2015 to 2016 but then declined significantly from 2016 to 2017.
Income taxes	Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.	Eli Lilly & Co.'s income taxes increased from 2015 to 2016 and from 2016 to 2017.

Eli Lilly & Co., effective income tax rate (EITR) reconciliation

		Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013
	U.S. federal statutory tax rate
	Effective income tax rate

Based on: 10-K (filing date: 2018-02-20), 10-K (filing date: 2017-02-21), 10-K (filing date: 2016-02-19), 10-K (filing date: 2015-02-19), 10-K (filing date: 2014-02-19).

Item	Description	The company
Effective income tax rate	Percentage of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.	Eli Lilly & Co.'s effective income tax rate increased from 2015 to 2016 and from 2016 to 2017.

Eli Lilly & Co., components of deferred tax assets and liabilities

USD $ in thousands

		Dec 31, 2017		Dec 31, 2016		Dec 31, 2015		Dec 31, 2014		Dec 31, 2013
	Compensation and benefits
	Tax loss carryforwards and carrybacks
	Tax credit carryforwards and carrybacks
	Purchases of intangible assets
	Product return reserves
	Other comprehensive loss on hedging transactions
	Debt
	Contingent consideration
	Contingencies
	Intercompany profit in inventories
	Other
	Gross deferred tax assets
	Valuation allowances
	Deferred tax assets
	Inventories
	Intangibles
	Property and equipment
	Prepaid employee benefits
	Financial instruments
	Unremitted earnings
	Deferred tax liabilities
	Deferred tax assets (liabilities), net

Based on: 10-K (filing date: 2018-02-20), 10-K (filing date: 2017-02-21), 10-K (filing date: 2016-02-19), 10-K (filing date: 2015-02-19), 10-K (filing date: 2014-02-19).

Item	Description	The company
Gross deferred tax assets	Amount before allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards.	Eli Lilly & Co.'s gross deferred tax assets increased from 2015 to 2016 but then declined significantly from 2016 to 2017.
Deferred tax assets	Amount after allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards.	Eli Lilly & Co.'s deferred tax assets increased from 2015 to 2016 but then declined significantly from 2016 to 2017.
Deferred tax assets (liabilities), net	Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, without jurisdictional netting.	Eli Lilly & Co.'s deferred tax assets (liabilities), net declined from 2015 to 2016 but then increased from 2016 to 2017 exceeding 2015 level.

Eli Lilly & Co., adjustments to financial data

USD $ in thousands

		Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013
	Adjustment to Current Liabilities
	Current liabilities (as reported)
	Less: Current deferred tax liabilities, net
	Current liabilities (adjusted)
	Adjustment to Total Liabilities
	Total liabilities (as reported)
	Less: Current deferred tax liabilities, net
	Total liabilities (adjusted)
	Adjustment to Total Eli Lilly And Company Shareholders' Equity
	Total Eli Lilly and Company shareholders' equity (as reported)
	Less: Net deferred tax assets (liabilities)
	Total Eli Lilly and Company shareholders' equity (adjusted)
	Adjustment to Net Income (loss)
	Net income (loss) (as reported)
	Add: Deferred income tax expense (benefit)
	Net income (loss) (adjusted)

Based on: 10-K (filing date: 2018-02-20), 10-K (filing date: 2017-02-21), 10-K (filing date: 2016-02-19), 10-K (filing date: 2015-02-19), 10-K (filing date: 2014-02-19).

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

Eli Lilly & Co., adjusted ratios

		Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013
	Current Ratio
	Reported current ratio
	Adjusted current ratio
	Net Profit Margin
	Reported net profit margin
	Adjusted net profit margin
	Financial Leverage
	Reported financial leverage
	Adjusted financial leverage
	Return on Equity (ROE)
	Reported ROE
	Adjusted ROE
	Return on Assets (ROA)
	Reported ROA
	Adjusted ROA

Based on: 10-K (filing date: 2018-02-20), 10-K (filing date: 2017-02-21), 10-K (filing date: 2016-02-19), 10-K (filing date: 2015-02-19), 10-K (filing date: 2014-02-19).

Ratio	Description	The company
Adjusted current ratio	A liquidity ratio calculated as adjusted current assets divided by adjusted current liabilities.	Eli Lilly & Co.'s adjusted current ratio deteriorated from 2015 to 2016 and from 2016 to 2017.
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by total revenue.	Eli Lilly & Co.'s adjusted net profit margin improved from 2015 to 2016 but then deteriorated significantly from 2016 to 2017.
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.'s adjusted financial leverage increased from 2015 to 2016 and from 2016 to 2017.
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by adjusted shareholders' equity.	Eli Lilly & Co.'s adjusted ROE improved from 2015 to 2016 but then deteriorated significantly from 2016 to 2017.
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by adjusted total assets.	Eli Lilly & Co.'s adjusted ROA improved from 2015 to 2016 but then deteriorated significantly from 2016 to 2017.

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

		Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013
	As Reported
	Selected Financial Data (USD $ in thousands)
	Current assets
	Current liabilities
	Ratio
	Current ratio¹
	Adjusted for Deferred Taxes
	Selected Financial Data (USD $ in thousands)
	Current assets
	Adjusted current liabilities
	Ratio
	Adjusted current ratio²

Based on: 10-K (filing date: 2018-02-20), 10-K (filing date: 2017-02-21), 10-K (filing date: 2016-02-19), 10-K (filing date: 2015-02-19), 10-K (filing date: 2014-02-19).

2017 Calculations

¹ Current ratio = Current assets ÷ Current liabilities
= hidden ÷ hidden = hidden

² Adjusted current ratio = Current assets ÷ Adjusted current liabilities
= hidden ÷ hidden = hidden

Ratio	Description	The company
Adjusted current ratio	A liquidity ratio calculated as adjusted current assets divided by adjusted current liabilities.	Eli Lilly & Co.'s adjusted current ratio deteriorated from 2015 to 2016 and from 2016 to 2017.

		Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013
	As Reported
	Selected Financial Data (USD $ in thousands)
	Net income (loss)
	Revenue
	Ratio
	Net profit margin¹
	Adjusted for Deferred Taxes
	Selected Financial Data (USD $ in thousands)
	Adjusted net income (loss)
	Revenue
	Ratio
	Adjusted net profit margin²

Based on: 10-K (filing date: 2018-02-20), 10-K (filing date: 2017-02-21), 10-K (filing date: 2016-02-19), 10-K (filing date: 2015-02-19), 10-K (filing date: 2014-02-19).

2017 Calculations

¹ Net profit margin = 100 × Net income (loss) ÷ Revenue
= 100 × hidden ÷ hidden = hidden

² Adjusted net profit margin = 100 × Adjusted net income (loss) ÷ Revenue
= 100 × hidden ÷ hidden = hidden

Ratio	Description	The company
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by total revenue.	Eli Lilly & Co.'s adjusted net profit margin improved from 2015 to 2016 but then deteriorated significantly from 2016 to 2017.

		Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013
	As Reported
	Selected Financial Data (USD $ in thousands)
	Total assets
	Total Eli Lilly and Company shareholders' equity
	Ratio
	Financial leverage¹
	Adjusted for Deferred Taxes
	Selected Financial Data (USD $ in thousands)
	Total assets
	Adjusted total Eli Lilly and Company shareholders' equity
	Ratio
	Adjusted financial leverage²

Based on: 10-K (filing date: 2018-02-20), 10-K (filing date: 2017-02-21), 10-K (filing date: 2016-02-19), 10-K (filing date: 2015-02-19), 10-K (filing date: 2014-02-19).

2017 Calculations

¹ Financial leverage = Total assets ÷ Total Eli Lilly and Company shareholders' equity
= hidden ÷ hidden = hidden

² Adjusted financial leverage = Total assets ÷ Adjusted total Eli Lilly and Company shareholders' equity
= hidden ÷ hidden = hidden

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.'s adjusted financial leverage increased from 2015 to 2016 and from 2016 to 2017.

		Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013
	As Reported
	Selected Financial Data (USD $ in thousands)
	Net income (loss)
	Total Eli Lilly and Company shareholders' equity
	Ratio
	ROE¹
	Adjusted for Deferred Taxes
	Selected Financial Data (USD $ in thousands)
	Adjusted net income (loss)
	Adjusted total Eli Lilly and Company shareholders' equity
	Ratio
	Adjusted ROE²

Based on: 10-K (filing date: 2018-02-20), 10-K (filing date: 2017-02-21), 10-K (filing date: 2016-02-19), 10-K (filing date: 2015-02-19), 10-K (filing date: 2014-02-19).

2017 Calculations

¹ ROE = 100 × Net income (loss) ÷ Total Eli Lilly and Company shareholders' equity
= 100 × hidden ÷ hidden = hidden

² Adjusted ROE = 100 × Adjusted net income (loss) ÷ Adjusted total Eli Lilly and Company shareholders' equity
= 100 × hidden ÷ hidden = hidden

Ratio	Description	The company
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by adjusted shareholders' equity.	Eli Lilly & Co.'s adjusted ROE improved from 2015 to 2016 but then deteriorated significantly from 2016 to 2017.

		Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013
	As Reported
	Selected Financial Data (USD $ in thousands)
	Net income (loss)
	Total assets
	Ratio
	ROA¹
	Adjusted for Deferred Taxes
	Selected Financial Data (USD $ in thousands)
	Adjusted net income (loss)
	Total assets
	Ratio
	Adjusted ROA²

Based on: 10-K (filing date: 2018-02-20), 10-K (filing date: 2017-02-21), 10-K (filing date: 2016-02-19), 10-K (filing date: 2015-02-19), 10-K (filing date: 2014-02-19).

2017 Calculations

¹ ROA = 100 × Net income (loss) ÷ Total assets
= 100 × hidden ÷ hidden = hidden

² Adjusted ROA = 100 × Adjusted net income (loss) ÷ Total assets
= 100 × hidden ÷ hidden = hidden

Ratio	Description	The company
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by adjusted total assets.	Eli Lilly & Co.'s adjusted ROA improved from 2015 to 2016 but then deteriorated significantly from 2016 to 2017.

	Eli Lilly & Co.	Other companies (not purchased previously)
Financial Statements
Common-Size Financial Statements
Ratios
Relative Valuation
Discounted Cash Flow (DCF) Valuation
Economic Value Added (EVA)
Long-term Trends
Analysis
Financial Reporting Quality

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Financial Statements
Common-Size Financial Statements
Ratios
Relative Valuation
Discounted Cash Flow (DCF) Valuation
Economic Value Added (EVA)
Long-term Trends
Analysis
Financial Reporting Quality

Analysis of Income Taxes

Income Tax Expense (Benefit)

Effective Income Tax Rate (EITR)

Components of Deferred Tax Assets and Liabilities

Analyst Adjustments: Removal of Deferred Taxes

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

Adjusted Ratios: Removal of Deferred Taxes (Summary)

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

Adjusted Current Ratio

Adjusted Net Profit Margin

Adjusted Financial Leverage

Adjusted Return on Equity (ROE)

Adjusted Return on Assets (ROA)