UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED)
JANUARY 22, 1999
001-06351
(Commission File Number)
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ELI LILLY AND COMPANY
(Exact name of registrant as specified in its charter)
INDIANA 35-0470950
(Jurisdiction of Incorporation) (IRS Employer
Identification Number)
LILLY CORPORATE CENTER, INDIANAPOLIS, INDIANA 46285
(Address of registrant's principal executive office)
317-276-2000
(Registrant's telephone number)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On January 22, 1999, Eli Lilly and Company (the "Company") consummated the sale
(the "Transaction") of all of the outstanding capital stock of its wholly-owned
subsidiary, PCS Holding Corporation, a Delaware corporation ("PCS"), to Rite Aid
Corporation, a Delaware corporation ("Rite Aid"). PCS is a pharmacy benefits
manager for employers, health plans and their members in the United States.
The purchase price was $1.5 billion in cash plus approximately $100 million in
cash to be retained by the Company from PCS. The purchase price was determined
based on arms-length negotiations between the parties. No material relationship
existed between the Company and Rite Aid or any of its affiliates, any director
or officer of the Company or any associate of any such director or officer prior
to the sale.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) Financial Statements of Business Acquired.
Not applicable.
(b) Pro Forma Financial Information.
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
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The following unaudited pro forma consolidated financial information of the
Company has been prepared to reflect the Transaction as if the Transaction had
been consummated at earlier dates as discussed herein.
The unaudited pro forma consolidated statement of income and related earnings
per share data for the year ended December 31, 1998 are based on the Company's
historical results from continuing operations adjusted to reflect the impact of
the Transaction as if it had occurred on January 1, 1998.
The unaudited pro forma consolidated balance sheet at December 31, 1998 reflects
the impact of (i) exclusion of the respective PCS balances; (ii) recognition of
the estimated net gain from the disposition of PCS; and (iii) the receipt of the
cash proceeds from the sale.
The unaudited pro forma consolidated financial information is not necessarily
indicative of the Company's consolidated financial position or consolidated
results of operations had the Transaction reflected therein actually been
consummated on the assumed dates, nor is it necessarily indicative of the
Company's consolidated financial position or consolidated results of operations
for any future period.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME
(In millions, except per-share data)
See notes to unaudited pro forma consolidated financial information.
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
(In millions)
See notes to unaudited pro forma consolidated financial information.
NOTES TO UNAUDITED PROFORMA CONSOLIDATED FINANCIAL INFORMATION
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1. No pro forma adjustments are necessary as the historical income from
continuing operations before extraordinary item excludes the operating
results of PCS. The estimated interest earned during 1998, assuming the
excess cash from the Transaction is invested on January 1, 1998, is $41.7
million. This assumes a 5 percent interest rate and is net of applicable
income taxes. This is not reflected as a pro forma adjustment. The
estimated gain on the Transaction is discussed in (5) below.
2. Reflects adjustments to remove PCS' historical consolidated balance sheet
amounts.
3. Reflects the increase in cash received in the Transaction, less amounts
paid to settle up the intercompany accounts between the Company and PCS,
net of item (2) above.
4. Reflects the reduction in prepaid expenses and the increase in accrued
expenses recorded at the time of the Transaction, net of item (2) above.
5. Retained earnings are adjusted by the anticipated net gain resulting from
the Transaction. The income tax effect is expected to be immaterial.
(c) Exhibits
Exhibit
Number Title
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2.1 Stock Purchase Agreement, dated November 17, 1998, as amended January 22,
1999, between the Company and Rite Aid.
SIGNATURES
Pursuant to the requirements 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/ Charles E. Golden
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Charles E. Golden
Executive Vice President
and Chief Financial Officer
Date: February 8, 1999
EXHIBIT INDEX
Exhibit
Number
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2.1 Stock Purchase Agreement, dated November 17, 1998, as amended January 22,
1999, between the Company and Rite Aid.