Final+Paper

1
Table ofContents
1. Company Background .................................................................................................................3
 Name,Key locations, state of incorporation
 Principal officers and dominant stockholders
 History
 Mission Statement
2. Products and Services .................................................................................................................. 5
 Brand names,copyrights, patents
 Markets served
 Key competitors and market trends
 Important capabilities and competencies
 Recent events/ news releases
3. Financial Analysis (Quantitative) .................................................................................................9
 Stock symbol, exchange,price trend
 Profitability
 Leverage
 Liquidity
 Turnover
 Cash Flow
4. Financial Analysis (Qualitative) .................................................................................................13
 Significant intangible assets
 Business segment data
 GAAP accounting
 Footnotes
 Auditor and auditors opinion
5. Conclusions and Recommendations ........................................................................................... 14
 Stock price stability or fluctuation
 Conservative or risky investment
 Investment recommendation
6. References/Sources..................................................................................................................... 17
7. Appendix A. - Teamwork vs. Individual .....................................................................................19
8. Appendix B. - Ratios…………………………………………………………………………………..20
 Profitability-Return on Owners’ Equity, Return on Sales, and Earnings Per Share
 Leverage- Debt/Equity Ratio
 Liquidity- Current Ratio and Acid Test Ratio

2
 Turnover-A/R Turnover and Inventory Turnover
9. Appendix C. – Interviewwith Senior Director ofStrategy, Emerging Market Business Unit at Eli
Lilly and Company ………………………………………………………………………………………23

3
Company Background
Mission Statement
Eli Lilly and Company is a global research-based pharmaceutical corporationheadquartered in
Indianapolis, Indiana, that is dedicated to creating and delivering innovativepharmaceutical-based
health care solutions whichenable people to live longer, healthier, and more active lives.
Company History
Eli Lilly and Company has facilities and research labs in many nations and their products are
sold in over 159 countries. In 1920 they created the world’s first commercial insulin and put it on
the market. In 2002 they were the leading producer of medications for all people who had
diabetes. Lilly is a major player in the pharmaceutical industry that will last for decades longer.
Eli Lilly and Company was founded on May 10, 1876 on 15 West Pearl Street in Indianapolis,
Indiana. Eli Lilly and Company was founded by Col. Eli Lilly. His signature is the company’s
signature logo. Eli Lilly was a Civil War hero and also a pharmacist. In 1953 Josiah K. Jr.
stepped down and that was the last president who was part of the family. Eli Lilly and Company
has been running ever since by non-family presidents.
Key Locations and State of Incorporation
Eli Lilly was created in Indianapolis, Indiana in 1876. Indianapolis is the main location and also
where the Corporate Office is located. They also have the Clinton Laboratories which are located
in Terra Haute, Indiana. Some of their international locations are Austria, Brazil, France,
Mexico, Italy, Japan, and those are just a few. Indianapolis is where it was founded and the main
officer where the branch heads meet.

4
Principal Officers
John C. Lechleiter is Chairman, President, and CEO of Eli Lilly. He
is also an Independent Director for NIKE, Inc. and a member of the
American Chemical Society. He got his undergraduate degree from Xavier
University and his graduate degree from Harvard University.
Marvin L. White is CFO and Executive Director of Eli Lilly. He
also is Independent Director at Emergent BioSolutions, Inc., Chief
Financial Officer & Vice President at St. Vincent Health, Chief Financial
Officer & Vice President at St. Vincent Hospital & Health Care Center, Inc.
He received his undergraduate degree from Wilberforce University and got
a MBA from Indiana University.
Alfred G. Gilman is an Independent Director at Eli Lilly. He also is
Regental Professor of pharmacological emeritus at The University of Texas
Southwestern Medical Center and Independent Director at Regeneron
Pharmaceuticals, Inc. He received his undergraduate degree from Yale
University and got his doctorate degree from Case Western Reserve
University.
Winfried Franz Wilhelm Bischoff is an Independent Director
for Eli Lilly. He also is Chairman at Lloyds Banking Group Plc. And a
Member-National Advisory Board at UK Career Academy Foundation. He
received his undergraduate degree from University of the Witwatersrand.

5
Dominant Stockholders
1. WELLINGTON MANAGEMENT COMPANY, LLP- 49,275,861 stocks held
2. PRIMECAP MANAGEMENT COMPANY- 49,021,729 stocks held
3. VANGUARD GROUP, INC.- 44,679,579 stocks held
4. JOHN C LECHLEITER- 366,519 stocks held
5. BRYCE D.CARMINE- 102,647 stocks held
6. ROBERT A. ARMITAGE- 97,063 stocks held
7. DERICA W. RICE- 56,196 stocks held
Products and Services
Key Products & Brand Name(s)
Eli Lilly is a leading innovation-driven corporation. Lilly is developing a growing portfolio of
pharmaceutical products meeting some of the world’s utmost urgent medical needs. “Lilly’s
growing portfolio contains pharmaceutical products that help meet medical needs in the fields of
oncology, cardiovascular, diabetes, critical care, neuroscience, men’s health, and
musculoskeletal,” (Lilly.com). “Lilly’s commitment to innovation and care does not stop with
humans. Elanco, a division of Lilly, is committed to quality care and product innovation for
animals through protein production, companion animal health and food safety,” (Lilly.com).
Some of Eli Lilly’s major brand name products include Cialis (tadalafil), Cymbalta (Duloxetine
HCI), and Strattera (Atomoxetine HCI). Lilly is also a high proprietor of Insulin products such as
different types of Humalog and Humulin which are insulin injections for diabetics as well as
making Tradjenta which is a new form of insulin tablets.

6
Copyrights & Patents:
Everything that you read or see on www.lilly.com is copyrighted or otherwise protected and
owned by the Lilly or a third party who licensed or granted to Lilly the right to use such material.
Unless otherwise expressly noted, nothing that you read or see on this sire may be copied or used
except as provided in the Terms of Use or with the prior written approval of the Lilly (Terms of
Use). Eli Lilly is protected by the government and any form of replication of their products will
be taken to a court of law. They currently hold patents on most of their major products that they
sell and are attempting to renew patents on those that have expired.
Markets Served:
Eli Lilly operates on an international level. The Emerging Markets business continues Lilly’s
legacy to deliver innovative medicines that address unmet needs and has a profound impact on
people’s lives around the world. More Than 6,000 employees in 30 Lilly affiliates work across
the 70 countries that make up Lilly’s Emerging Markets business. (Lilly.com)
Eli Lilly operates in the following countries listed below:
 Argentina  Australia  Austria
 Belgium  Brazil  Canada
 Chile  China  Colombia
 Costa Rica  Denmark  Ecuador
 Estonia  Finland  France
 Germany  Greece  Hong Kong
 Hungary  India  Ireland
 Italy  Japan  Korea
 Latin America  Mexico  Netherlands
 Norway  Peru  Philippines
 Russia  Singapore  South Africa
 Spain  Sweden  Switzerland
 Taiwan  Thailand  Turkey
 United Kingdom  Venezuela

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Key Competitors & Market Trends
Eli Lilly’s key competitors are GlaxoSmithKline, Sanofi, Pfizer, and Johnson and Johnson, as
well as many other pharmaceutical companies. At the present date of November 16, 2012 it
seems that Eli Lilly and Company is on a fluctuating upward stock price. Individuals at the
NYSE seem to be purchasing stock at slower rate than normal the past few months with a
volume of only 39.55 million. In the past year it seems that the average volume of stocks for Eli
Lilly is around 40 million. It reached its volume high point this year on October 12, 2012 with
83.22 million. The lower stock volume may be due to the decrease in stock price, lower revenue
for this quarter, poorer economic conditions, or buyer preferences to other companies. It seems
that Eli Lilly should spike up by the end of the quarter based on the current market trend.
Important Capabilities & Competencies
Eli Lilly’s Important Capabilities and Competencies are their Strong Leadership, as well as their
continuing strive to innovate their products to help those who need them. The community looks
up to Eli Lilly and Company as a provider of high quality medications that are affordable by the
average man. The company itself is looked upon as an “Ethical Business”, meaning that they are
not in the game of business only for profit, but also to help serve the community and make the
world a safer and healthier place to live for all economic classes.
Strong Leadership:
The Leadership Development Program (LLDP) is designed to engage, develop, and motivate
highly talented and innovative recent MBA graduates. Its purpose is to recruit and accelerate the
career development of those who possess true leadership qualities. The initiative is supported by
the marketing, finance and human resources components, with opportunities in other business
areas where appropriate. (Lilly.com/Career)

8
Recent Events/News Releases
11-13-12 Lilly and Incyte Announce addiction phase Iib baricitinib data, Including MRI Results,
in Patients with Rheumatoid Arthritis.
11-12-12 Brest Cancer Survivor Awarded Top Prize in 2012 Oncology on Canvas(SM) Art
Competition.
11-9-12 Lilly to present Phase II Rheumatoid Arthritis and Biomarker Data at ACR for Two
investigational Medicines to treat Autoimmune Diseases.
11-8-12 cardiovascular outcome study on Tradjenta (linagliptin) tablets in adult patients with
type 2 diabetes completes enrollment.
11-5-12 Results from the largest known cholesterol survey conducted in the U.S announced at
the American Heart Association’s Annual Scientific Sessions.
11-1-12 Lilly Statement on Hurricane Sandy Relief Efforts.
(Newsroom.lilly.com)

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Financial Analysis (Quantitative)
Eli Lilly and Company is a publicly traded firm in NYSE under the stock symbol LLY. As you
can see on the graph the company has been experiencing a fluctuating upward trend since May
6th, 2009 when it reached its all-time low of $27.98 since December 31, 1995 when it was
$28.15. The graph also shows that Eli Lilly is going down at the moment, but due to recent
trends, will soon be on the rise again. As of November 16, 2012 the current stock price is at
$45.91 which is down from the beginning of the week November 12, 2012 which was $48.34.
The stock tends to be higher at the start of the week and then decrease as the week goes on (Eli
Lilly and Company – Annual Report). The company is currently on a downward trend but is
expected to rise again before the close of the year. The final stock price at December 31, 2012
should be in-between $53 and $43 unless there is a major medical breakthrough or an overall
economic downturn.
Johnson and Johnson is a multinational publically traded firm on the NYSE under the stock
symbol of JNJ. They are currently number one in making revenue in the pharmaceutical industry
and a major competitor of Eli Lilly’s. Their stock trend seems to fluctuate during the years but
seems to stay in the range of $45-$80.Their stock price is currently sitting at $69.19 as of
November 16, 2012. The graph shows that the stock price is currently on the decline after
reaching a record-breaking $72.52 on October 18, 2012 (Johnson & Johnson – Annual Report).
At the end of the year their stock price should be between $67 and $72 if the economy remains
stable.

10
Pfizer Inc. is a publically traded pharmaceutical company in direct competition with Eli Lilly.
Their stock symbol is PFE and is traded under the NYSE. On average they stay within the $12-
$25 range. In 2009 they hit an all-time low of $12.31. As of November 16, 2012 their stock price
was $23.86 and is on a downward trend. In 2012 they had one of their best stock prices at $25.76
(Pfizer, Inc. – Annual Report). In general Pfizer seems to have periods of decrease during the
middle of the year but increases in the later months. Their expected stock price at the end of the
year is within $16-$23 depending on the state of the economy.

11
32%
17%
12%
41%
24%
9%
0%
10%
20%
30%
40%
50%
Eli Lilly Johnson & Johnson Pfizer
Return on Owners Equity
2011
2010
$3.90
$3.54
$1.28
$4.58 $4.85
$1.03
$0.00
$1.00
$2.00
$3.00
$4.00
$5.00
$6.00
Earnings Per Share
2011
2010
18%
15% 15%
22% 22%
12%
0%
5%
10%
15%
20%
25%
Return on Sales
2011
2010
149%
99%
128%
150%
82%
121%
0%
50%
100%
150%
200%
Debt/Equity Ratio
2011
2010

12
1.595
2.38
2.062.14 2.05 2.13
0
0.5
1
1.5
2
2.5
Current Ratio
2011
2010
1.338
2.11
1.8
1.38
1.82 1.84
0
0.5
1
1.5
2
2.5
Acid Test Ratio
2011
2010
54.8 57.1
73
57.8 60.3
73.44
0
20
40
60
80
InDays
A/R Turnover
2011
2010
173.8
104.5
194.2200.5
113.4
185.3
0
50
100
150
200
250
InDays
Inventory Turnover
2011
2010

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Qualitative Analysis
GAAP Accounting
The 2011 annual report shows that the company acts in agreement with the United States
Generally Accepted Accounting Principles when crafting every financial statement. Every
financial statement is carefully reviewed to ensure that they are in agreement with the Generally
Accepted Accounting Principles.
Auditor & Audit Opinion
Eli Lilly’s auditor was Ernst & Young LLP. For the auditing Ernst & Young looked over Eli
Lilly’s statement of cash flows, statement of operations, and the comprehensive income for the
period that ended in December 31, 2011. The financial statements are important to Eli Lilly’s
management and Ernst & Young’s responsibility was to audit and give their opinions on the
financial statements. Ernst & Young followed the standards of the Public Company Accounting
Oversight Board when they conducted their audits. The standards require that they do the audit to
obtain reasonable promise about the financial statements being free of misstatement. The audit
consists of examining evidence supporting the disclosures in the financial statements. The audit
is also used to check the accounting principles.
Intangible Assets
Eli Lilly has $5,128,100,000 of intangible assets. These intangible assets include patents,
charitable work, and donations. The patents, for example, would be on their drugs like Cialis,
Cymbalta, Strattera, Humalog, Humulin, Tradjenta, Zyprexa, Alimta, Forteo, Gemzar, and
Evista. One of their biggest organizations is the Lilly Foundation. The Lilly Foundation is a tax-
exempt private foundation created in 1968. It basically awards cash grants for philanthropic
purposes. They help people who lack the ability to obtain good health care, and to strengthen
public education in the United States with a strong emphasis in science and math. They also
support the United Way and the city of Indianapolis, Indiana. The foundation will also accept
donations from companies across the world. The biggest contributor is the United Way and the
employees giving back donations to the company.

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Business Segment Data
Eli Lilly has a wide variety of pharmaceuticals. According to Eli Lilly’s 10-K, they operate in
only one business segment, which is the human pharmaceutical products. They also do animal
health business segment but those are not materiel and share the same economic and operating
characteristics as the human characteristics. The animal products are included in the human
pharmaceuticals for the purpose of segment reporting (Eli Lilly and Company – Annual Report).
Some of the animal products are Trifexis, Tylan, Coban, Comfortis, Reconcile, and Assurity.
Their major revenue sources are the human pharmaceuticals business area. The human
pharmaceuticals that generate the most revenue in order are Zyprexa, Cymbalta, Alimta,
Humalog, Cialis, Evista, and Strattera. These products make up the bulk of their revenue and are
intermixed with the animal health products.
Footnotes
According to the Footnotes section of Eli Lilly’s 10-K, the inventory, listed in Note #1, is
marked in the Balance Sheet as “below the market price or meeting the market price”. This
means that the total inventory and current assets for the company may be higher than they appear
on the Balance Sheet and could in turn change the ratios for the company substantially. Another
important footnote is the Note #9. This note talks about the stock-based compensation of the
company. It specifically talks about how stock-based compensation awards may be given out
under the 2002 Lilly Stock Plan for no more than 93 million shares. This indicates that more
dividends may be distributed at the end of the year based on the revenues they receive. This
could provide a substantial boost to some stockholders earnings for this year.
Conclusion & Recommendation
Stock Price Stability or Fluctuation
I would declare Eli Lilly’s stock being fluctuant. My reasoning for stating this is because of Eli
Lilly’s history. Since 2007, Eli Lilly’s stock price has made a “U” curve in its trend. Over the
overall stock history, Eli Lilly’s stock use to be around $90 per stock and declined substantially
to the low $30’s. Ever since then the stock has been up and down constantly and cannot manage
to find a stable trend. In fact, that increasing trend that Eli Lilly was experiencing seemed to stop
this year on October 18, 2012. Now it is declining again slowly.

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Conservative or Risky
Eli Lilly stock would be considered to be conservative. Along with Eli Lilly their main
competitors, Johnson & Johnson and Pfizer, are in the same conservative category. One would
not invest in the company’s stock for its rising stock price rather than their high percentage of
dividends distributed. Usually these companies raise their dividend payout as the price of their
stock drops. Even though Johnson & Johnson pays higher dividends, Eli Lilly is not far behind
them. In fact, only a 50-cent differentiates the two companies. On the other hand Eli Lilly pays
substantially higher than Pfizer in their dividend payout. The charts below show the dividend
payout over the past years for Eli Lilly and its competitors.
Eli Lilly
Johnson & Johnson

16
Pfizer
Investment Recommendation
Throughout the past decade, Eli Lilly might have looked like they have been struggling due to
the decline in stock pricing. However, if one would analyze all of the aspects of stock then one
would see that it is a good investment. It is hard deciding to invest in a pharmaceutical company
just because of the nature of the industry just because one drug can drastically change the
company’s performance from all of the costs developing it. After all of our team’s research, I
would recommend a person investing in Eli Lilly for a long-term investment only. There are two
main aspects that make stock good or bad, one being the stock price and the other is if and how
much dividends the company pays out. It is no secret that Eli Lilly’s stock is not the greatest at
this point in time; however, they usually pay out pretty good dividends to their stock holders.
Due to the decline in price over the past few years our team would recommend buying Eli Lilly
stock at the current price, $45.91. Do not buy a lot at one time, but over a period of time. This is
a more secure route to take because if the economy decreases more and the stock decreases, then
your investment will not have such a big loss all at once. As stated earlier, the trend is rising and
we predict that in 5 years or more the price will have increased by a decent amount. This price
recommendation is based off of the closing stock price of $45.91 on November 16, 2012, as
listed on NYSE.
$0.15
$0.17
$0.19
$0.24
$0.29
$0.32
$0.16
$0.18
$0.20
$0.22
$0.00
$0.05
$0.10
$0.15
$0.20
$0.25
$0.30
$0.35
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
DividendsIssued($)
Year Issued

17
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19
Appendix A.
Our team worked together to achieve this goal. We have spent countless hours together worrying
about that does what and how to achieve these jobs. Andrew Majeski as team leader delegated
the work appropriately and managed his team in a professional manner. Every team member
followed the team charter to every detail. The team members respected each other and did their
assigned tasks to the best potential possible. The team leader set up meetings appropriately in
order to keep this assignment on schedule. Each meeting there was a set agenda for the day. The
last meeting was held in order for all the members to bring their individual work together to
make the final paper. Team member Ryan Murra, set up an interview with the Senior Director of
Strategy, Emerging Markets Business Unit at Eli Lilly and Comany. This experience not only
benefited our analysis, but also us as individuals. Over the past month this team has shown
incredible dedication and determination as a group as well as individuals. This team had the
perfect balance of group cohesiveness and individualism that I believe we have created a great
analysis on Eli Lilly.

20
Appendix B.
2011
Profitability
Return on owners’ equity = Net income = 4347.7 = 32%
Owners’ Equity 13535.6
Return on Sales = Net Income = 4347.7 = 18%
Net Revenue 24286.5
Earnings per Share = Net Income = 4,347,700 = $3.90
# of shares 1,113,967
Outstanding
Financial Leverage
Debt/equity Ratio = Total Liabilities = 20124.2 = 149%
Liquidity
Current Ratio = Current Assets = 14248.2 = 1.595
Current Liabilities 8930.9
Acid Test Ratio = Current Assets-Inv = 14248.2-2299.8 = 1.338
Asset Turnover
A/R Turnover = Net Sales = 23604.8 = 365 = 54.8 days
Average accounts 3545.75 6.66
Receivable
Inventory Turnover = Cost of goods sold = 5067.9 = 365 = 173.8 days
Average Inventory 2408.75 2.10
2010
Profitability
Return on owners’ equity = Net income = 5069.5 = 41%
Return on Sales = Net Income = 5069.5 = 22%
Net Revenue 23076
Earnings per Share = Net Income = 5069500 = $4.58
# of shares 1,105,813
Outstanding
Financial Leverage
Debt/equity Ratio = Total Liabilities = 18588.6 = 150%
Liquidity
Current Ratio = Current Assets = 14840 = 2.14
Acid Test Ratio = Current Assets-Inv = 14840-2517.7 = 1.38
Asset Turnover
A/R Turnover = Net Sales = 22442.2 = 365 = 57.8 days
Receivable
Inventory Turnover = Cost of goods sold = 4366.2 = 365 = 200.5 days

21
2011
Profitability
Return on owners’ equity = Net income = 9672 = 17%
Owners’ Equity 57080
Return on Sales = Net Income = 9672 = 15%
Net Revenue 65030
# of shares 2736
Outstanding
Financial Leverage
Debt/equity Ratio = Total Liabilities = 56564 = 99%
Liquidity
Current Liabilities 22811
Acid Test Ratio = Current Assets-Inv = 54316-6285 = 2.11
Asset Turnover
A/R Turnover = Net Sales = 65030 = 365 = 57.1 days
Receivable
Inventory Turnover = Cost of goods sold = 20360 = 365 = 104.5 days
2010
Profitability
Net Revenue 61587
# of shares 2751.4
Outstanding
Financial Leverage
Liquidity
Asset Turnover
Receivable

22
2011
Profitability
Net Revenue 67425
# of shares 7817
Outstanding
Financial Leverage
Liquidity
Asset Turnover
A/R Turnover = Net Sales = 67425 = 365 = 73 days
Average accounts 13494 5.0
Receivable
Average Inventory 8022 1.88
2010
Profitability
Net Revenue 67057
# of shares 8036
Outstanding
Financial Leverage
Liquidity
Asset Turnover
Average accounts 13494 4.97
Receivable
Average Inventory 8022 1.97

23
Appendix C.- A Few Key Questions From Yoosuek Hong Interview
Question: So Mr. Hong, what do you do here at Eli Lilly?
Answer: I am the Senior Director of Strategy in the Emerging Market Business Unit. This means
that I am in charge of multiple other individuals in the Emerging Marketing Business Unit. I
personally oversee many of their research and their documents on foreign affairs in Eli Lilly. I
travel nearly once a month to many other countries and strive to make sure that every foreign
branch of the company is following ideals. I am also striving to create foreign relations with
nations that we are currently not present in. This will allow us to create common ground for
when negotiations begin.
Question: So what countries have you been frequenting most in recent years?
Answer: Well, these past few years have been quite interesting. The most frequent country I’ve
visited is China. In that region we have a high potential for increased sales and the ability to do
more good. As you have probably heard the area is ripe with air pollution and causes individuals
to become ill. Eli Lilly is hoping to improve the quality of life in that region and those
surrounding it. It is currently a fairly small operation, but big things come in small packages as
they say. I have also gone to Europe a few times but mostly to just ensure that everything is
running smoothly in the region and ensure policies are being properly instituted.
Question: So what is the biggest problem in Eli Lilly at the present?
Answer: Well that is certainly a tough question. A lot of things have gone wrong, which is
typical of any company, but I would have to say the worst thing recently has to be all of our
current patents coming off our products. This allows for the generic brands to come in and take
up shares of our market. We are unable to produce at the prices these off-brands can so it really
hits us hard. However, with all these patents coming off, it just means that we need to increase
our development of newer products that will help society even further.
Question: What is Eli Lilly’s biggest strength?
Answer: The best part about Eli Lilly has to be our ethical form of business. The way we
perform business is one of the reasons I have been working here for twenty years now. We are
not focused entirely on the end profits, but more-so on the ability to make an impact in our
communities. We strive to improve the economic and cultural wellbeing of the areas we operate
in. A lot of our revenue goes towards charities and other associations that will benefit the world
as a whole in the future.

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