Consolidated Statement Of Earni
Consolidated Statement Of Earnings (USD $) | |||
In Millions, except Per Share data | 12 Months Ended
Dec. 31, 2009 | 12 Months Ended
Dec. 31, 2008 | 12 Months Ended
Dec. 31, 2007 |
EARNINGS | |||
Net Sales | $18,808 | $17,715 | $15,617 |
Cost of products sold | 5,140 | 5,316 | 4,919 |
Marketing, selling and administrative | 3,946 | 4,140 | 3,941 |
Advertising and product promotion | 1,136 | 1,181 | 1,097 |
Research and development | 3,647 | 3,512 | 3,160 |
Acquired in-process research and development | 0 | 32 | 230 |
Provision for restructuring | 136 | 215 | 180 |
Litigation expense | 132 | 33 | 14 |
Equity in net income of affiliates | (550) | (617) | (524) |
Gain on sale of ImClone shares | 0 | (895) | 0 |
Other (income)/expense | (381) | 22 | 77 |
Total Expenses | 13,206 | 12,939 | 13,094 |
Earnings from Continuing Operations Before Income Taxes | 5,602 | 4,776 | 2,523 |
Provision for income taxes | 1,182 | 1,090 | 471 |
Net Earnings from Continuing Operations | 4,420 | 3,686 | 2,052 |
Discontinued Operations: | |||
Earnings, net of taxes | 285 | 578 | 876 |
Gain on disposal, net of taxes | 7,157 | 1,979 | 0 |
Net Earnings from Discontinued Operations | 7,442 | 2,557 | 876 |
Net Earnings | 11,862 | 6,243 | 2,928 |
Net Earnings Attributable to Noncontrolling Interest | 1,250 | 996 | 763 |
Net Earnings Attributable to Bristol-Myers Squibb Company | 10,612 | 5,247 | 2,165 |
Amounts Attributable to Bristol-Myers Squibb Company: | |||
Net Earnings from Continuing Operations | 3,239 | 2,697 | 1,296 |
Net Earnings from Discontinued Operations | 7,373 | 2,550 | 869 |
Net Earnings Attributable to Bristol-Myers Squibb Company | $10,612 | $5,247 | $2,165 |
Earnings per Common Share from Continuing Operations Attributable to Bristol-Myers Squibb Company: | |||
Basic | 1.63 | 1.36 | 0.65 |
Diluted | 1.63 | 1.35 | 0.65 |
Earnings per Common Share Attributable to Bristol-Myers Squibb Company: | |||
Basic | 5.35 | 2.64 | 1.09 |
Diluted | 5.34 | 2.62 | 1.09 |
Dividends declared per common share | 1.25 | 1.24 | 1.15 |
Consolidated Statement Of Other
Consolidated Statement Of Other Comprehensive Income (USD $) | |||
In Millions | 12 Months Ended
Dec. 31, 2009 | 12 Months Ended
Dec. 31, 2008 | 12 Months Ended
Dec. 31, 2007 |
COMPREHENSIVE INCOME | |||
Net earnings | $11,862 | $6,243 | $2,928 |
Other Comprehensive Income/(Loss): | |||
Foreign currency translation | 159 | (123) | 240 |
Foreign currency translation reclassified to net earnings due to business divestitures | (40) | (12) | 0 |
Foreign currency translation on hedge of a net investment | (38) | 36 | (141) |
Derivatives qualifying as cash flow hedges, net of taxes of $9 in 2009, $(3) in 2008 and $24 in 2007 | (19) | 9 | (56) |
Derivatives qualifying as cash flow hedges reclassified to net earnings, net of taxes of $5 in 2009, $(23) in 2008 and $(15) in 2007 | (27) | 42 | 42 |
Derivatives reclassified to net earnings due to business divestitures, net of taxes of $(1) in 2009 | 2 | 0 | 0 |
Pension and postretirement benefits, net of taxes of $41 in 2009, $697 in 2008 and $(52) in 2007 | (115) | (1,387) | 130 |
Pension and postretirement benefits reclassified to net earnings, net of taxes of $(49) in 2009, $(50) in 2008 and $50 in 2007 | 109 | 102 | 108 |
Pension and postretirement benefits reclassified to net earnings due to business divestitures, net of taxes of $(62) in 2009 | 106 | 0 | 0 |
Available for sale securities, net of taxes of $(4) in 2009, $0 in 2008 and $19 in 2007 | 35 | (106) | (139) |
Available for sale securities reclassified to net earnings, net of taxes of $(3) in 2009 and $(6) in 2008 | 6 | 181 | 0 |
Total Other Comprehensive Income/(Loss) | 178 | (1,258) | 184 |
Comprehensive Income | 12,040 | 4,985 | 3,112 |
Comprehensive Income Attributable to Noncontrolling Interest | 1,260 | 996 | 763 |
Comprehensive Income Attributable to Bristol-Myers Squibb Company | $10,780 | $3,989 | $2,349 |
1_Consolidated Statement Of Oth
Consolidated Statement Of Other Comprehensive Income (Parenthetical) (USD $) | |||
In Millions | 12 Months Ended
Dec. 31, 2009 | 12 Months Ended
Dec. 31, 2008 | 12 Months Ended
Dec. 31, 2007 |
Derivatives qualifying as cash flow hedges, taxes | $9 | ($3) | $24 |
Derivatives qualifying as cash flow hedges reclassified to net earnings, taxes | 5 | (23) | (15) |
Derivatives reclassified to net earnings due to business divestitures, taxes | (1) | 0 | 0 |
Pension and postretirement benefits, taxes | 41 | 697 | (52) |
Pension and postretirement benefits reclassified to net earnings, taxes | (49) | (50) | 50 |
Pension and postretirement benefits reclassified to net earnings due to business divestitures, taxes | (62) | 0 | 0 |
Available for sale securities, taxes | (4) | 0 | 19 |
Available for sale securities reclassified to net earnings, taxes | ($3) | ($6) | $0 |
Consolidated Statement Of Retai
Consolidated Statement Of Retained Earnings (USD $) | |||
In Millions | 12 Months Ended
Dec. 31, 2009 | 12 Months Ended
Dec. 31, 2008 | 12 Months Ended
Dec. 31, 2007 |
RETAINED EARNINGS | |||
Retained Earnings at January 1 | $22,549 | $19,762 | $19,845 |
Cumulative effect of adopting a new accounting principle (Note 10) | 0 | 0 | 27 |
Net Earnings Attributable to Bristol-Myers Squibb Company | 10,612 | 5,247 | 2,165 |
Cash dividends declared | (2,401) | (2,460) | (2,275) |
Retained Earnings at December 31 | $30,760 | $22,549 | $19,762 |
Consolidated Balance Sheets
Consolidated Balance Sheets (USD $) | ||
In Millions | Dec. 31, 2009
| Dec. 31, 2008
|
Current Assets: | ||
Cash and cash equivalents | $7,683 | $7,976 |
Marketable securities | 831 | 289 |
Receivables | 3,164 | 3,644 |
Inventories | 1,413 | 1,765 |
Deferred income taxes | 611 | 703 |
Prepaid expenses | 256 | 320 |
Total Current Assets | 13,958 | 14,697 |
Property, plant and equipment | 5,055 | 5,405 |
Goodwill | 5,218 | 4,827 |
Other intangible assets | 2,865 | 1,151 |
Deferred income taxes | 1,636 | 2,137 |
Marketable securities | 1,369 | 188 |
Other assets | 907 | 1,081 |
Total Assets | 31,008 | 29,486 |
Current Liabilities: | ||
Short-term borrowings | 231 | 154 |
Accounts payable | 1,711 | 1,535 |
Accrued expenses | 2,785 | 2,974 |
Deferred income | 237 | 277 |
Accrued rebates and returns | 622 | 806 |
U.S. and foreign income taxes payable | 175 | 347 |
Dividends payable | 552 | 617 |
Total Current Liabilities | 6,313 | 6,710 |
Pension, postretirement and postemployment liabilities | 1,658 | 2,285 |
Deferred income | 949 | 791 |
U.S. and foreign income taxes payable | 751 | 466 |
Other liabilities | 422 | 441 |
Long-term debt | 6,130 | 6,585 |
Total Liabilities | 16,223 | 17,278 |
Bristol-Myers Squibb Company Shareholders' Equity: | ||
Preferred stock, $2 convertible series, par value $1 per share: Authorized 10 million shares; issued and outstanding 5,515 in 2009 and 5,668 in 2008, liquidation value of $50 per share | 0 | 0 |
Common stock, par value of $0.10 per share: Authorized 4.5 billion shares; 2.2 billion issued in both 2009 and 2008 | 220 | 220 |
Capital in excess of par value of stock | 3,768 | 2,757 |
Accumulated other comprehensive loss | (2,541) | (2,719) |
Retained earnings | 30,760 | 22,549 |
Less cost of treasury stock - 491 million common shares in 2009 and 226 million in 2008 | (17,364) | (10,566) |
Total Bristol-Myers Squibb Company Shareholders' Equity | 14,843 | 12,241 |
Noncontrolling interest | (58) | (33) |
Total Equity | 14,785 | 12,208 |
Total Liabilities and Equity | $31,008 | $29,486 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | ||
Dec. 31, 2009
| Dec. 31, 2008
| |
Preferred stock, $2 convertible series, par value | $1 | $1 |
Preferred stock, $2 convertible series, Authorized | 10,000,000 | 10,000,000 |
Preferred stock, $2 convertible series, issued | 5,515 | 5,668 |
Preferred stock, $2 convertible series, outstanding | 5,515 | 5,668 |
Preferred stock, $2 convertible series, liquidation value | $50 | $50 |
Common stock, par value | 0.1 | 0.1 |
Common stock, Authorized | 4,500,000,000 | 4,500,000,000 |
Common stock, issued | 2,200,000,000 | 2,200,000,000 |
Treasury stock, shares | 491,000,000 | 226,000,000 |
Consolidated Statement Of Cash
Consolidated Statement Of Cash Flows (USD $) | |||
In Millions | 12 Months Ended
Dec. 31, 2009 | 12 Months Ended
Dec. 31, 2008 | 12 Months Ended
Dec. 31, 2007 |
Cash Flows From Operating Activities: | |||
Net earnings | $11,862 | $6,243 | $2,928 |
Adjustments to reconcile net earnings to net cash provided by operating activities: | |||
Net earnings attributable to noncontrolling interest | (1,250) | (996) | (763) |
Depreciation | 469 | 562 | 542 |
Amortization | 238 | 254 | 350 |
Deferred income tax expense/(benefits) | 163 | 1,430 | (416) |
Stock-based compensation expense | 183 | 181 | 133 |
Acquired in-process research and development | 0 | 32 | 230 |
Impairment charges | 0 | 349 | 379 |
Gain related to divestitures of discontinued operations | (7,275) | (3,412) | 0 |
Gain on sale of ImClone shares | 0 | (895) | 0 |
Other (gains)/losses | (367) | (158) | (223) |
Changes in operating assets and liabilities: | |||
Receivables | 227 | (360) | (458) |
Inventories | 82 | 130 | (54) |
Accounts payable | 472 | 253 | 141 |
Deferred income | 135 | 61 | 454 |
U.S. and foreign income taxes payable | 58 | 371 | (199) |
Changes in other operating assets and liabilities | (932) | (338) | 109 |
Net Cash Provided by Operating Activities | 4,065 | 3,707 | 3,153 |
Cash Flows From Investing Activities: | |||
Proceeds from sale of marketable securities | 2,075 | 560 | 20,634 |
Purchases of marketable securities | (3,489) | (422) | (19,878) |
Additions to property, plant and equipment and capitalized software | (730) | (941) | (843) |
Proceeds from sale of businesses, property, plant and equipment and other investments | 557 | 309 | 317 |
Proceeds from divestitures of discontinued operations | 0 | 4,530 | 0 |
Mead Johnson's cash at split-off | (561) | 0 | 0 |
Purchase of businesses, net of cash acquired | (2,232) | (191) | (432) |
Proceeds from sale of ImClone shares | 0 | 1,007 | 0 |
Proceeds from sale and leaseback of properties | 0 | 227 | 0 |
Net Cash (Used in)/Provided by Investing Activities | (4,380) | 5,079 | (202) |
Cash Flows From Financing Activities: | |||
Short-term debt repayments | (26) | (1,688) | (33) |
Long-term debt borrowings | 1,683 | 1,580 | 0 |
Long-term debt repayments | (212) | (229) | (1,300) |
Interest rate swap terminations | 194 | 211 | 0 |
Issuances of common stock under stock plans and excess tax benefits from share-based payment arrangements | 45 | 5 | 333 |
Dividends paid | (2,483) | (2,461) | (2,213) |
Proceeds from Mead Johnson initial public offering | 782 | 0 | 0 |
Net Cash Used in Financing Activities | (17) | (2,582) | (3,213) |
Effect of Exchange Rates on Cash and Cash Equivalents | 39 | (29) | 45 |
(Decrease)/Increase in Cash and Cash Equivalents | (293) | 6,175 | (217) |
Cash and Cash Equivalents at Beginning of Year | 7,976 | 1,801 | 2,018 |
Cash and Cash Equivalents at End of Year | $7,683 | $7,976 | $1,801 |
ACCOUNTING POLICIES
ACCOUNTING POLICIES | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
ACCOUNTING POLICIES | Note 1. ACCOUNTING POLICIES Basis of Consolidation The consolidated financial statements, prepared in conformity with United States (U.S.) generally accepted accounting principles (GAAP), include the accounts of Bristol-Myers Squibb Company (which may be referred to as Bristol-Myers Squibb, BMS, or the Company) and all of its controlled majority-owned subsidiaries. All intercompany balances and transactions have been eliminated. Material subsequent events are evaluated and disclosed through the report issuance date, February19, 2010. Codevelopment, cocommercialization and license arrangements are entered into with other parties for various therapeutic areas, with terms including upfront licensing and contingent payments. These arrangements are assessed to determine whether the terms give economic or other control over the entity, which may require consolidation of the entity. Entities that are consolidated because they are controlled by means other than a majority voting interest are referred to as variable interest entities. Arrangements with material variable interest entities, including those associated with these codevelopment, cocommercialization and license arrangements, were determined not to exist. Reclassifications Certain prior year amounts have been reclassified to conform to the current year presentation. Mead Johnson Nutrition Company (Mead Johnson) financial results, previously reported in the Mead Johnson segment, have been reported as discontinued operations for all years presented. Use of Estimates The preparation of financial statements requires the use of management estimates and assumptions, based on complex judgments that are considered reasonable, that affect the reported amounts of assets and liabilities and disclosure of contingent assets and contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The most significant assumptions are employed in estimates used in determining the fair value of intangible assets, restructuring charges and accruals, sales rebate and return accruals, legal contingencies, tax assets and tax liabilities, stock-based compensation expense, pension and postretirement benefits (including the actuarial assumptions, see Note 19. Pension, Postretirement and Postemployment Liabilities), fair value of financial instruments with no direct or observable market quotes, inventory obsolescence, potential impairment of long-lived assets, allowances for bad debt, as well as in estimates used in applying the revenue recognition policy. Actual results may differ from estimated results. Revenue Recognition Revenue is recognized when title and substantially all the risks and rewards of ownership have transferred to the customer, generally at time of shipment. However, in the case of certain sales made by certain non-U.S. businesses, revenue is recognized on the date of receipt by the purchaser. See Note 2. Alliances and Collaborations for further discussion of revenue recognition related to alliances. Revenues are reduced at the time of recognition to reflect expected returns that are estimated based |
ALLIANCES AND COLLABORATIONS
ALLIANCES AND COLLABORATIONS | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
ALLIANCES AND COLLABORATIONS | Note 2. ALLIANCES AND COLLABORATIONS sanofi The Company has agreements with sanofi-aventis (sanofi) for the codevelopment and cocommercialization of AVAPRO*/AVALIDE* (irbesartan/irbesartan-hydrochlorothiazide), an angiotensin II receptor antagonist indicated for the treatment of hypertension and diabetic nephropathy, and PLAVIX* (clopidogrel bisulfate), a platelet aggregation inhibitor. The worldwide alliance operates under the framework of two geographic territories; one in the Americas (principally the U.S., Canada, Puerto Rico and Latin American countries) and Australia and the other in Europe and Asia. Accordingly, two territory partnerships were formed to manage central expenses, such as marketing, research and development and royalties, and to supply finished product to the individual countries. In general, at the country level, agreements either to copromote (whereby a partnership was formed between the parties to sell each brand) or to comarket (whereby the parties operate and sell their brands independently of each other) are in place. The agreements expire on the later of (i)with respect to PLAVIX*, 2013 and, with respect to AVAPRO*/AVALIDE*, 2012 in the Americas and Australia and 2013 in Europe and Asia, and (ii)the expiration of all patents and other exclusivity rights in the applicable territory. The Company acts as the operating partner and owns a 50.1% majority controlling interest in the territory covering the Americas and Australia. Sanofis ownership interest in this territory is 49.9%. As such, the Company consolidates all country partnership results for this territory and reflects sanofis share of the results as a noncontrolling interest. The Company recognizes net sales in this territory and in comarketing countries outside this territory (e.g. Germany, Italy for irbesartan only, Spain and Greece). Discovery royalties owed to sanofi are included in cost of products sold. Cash flows from operating activities of the partnerships in the territory covering the Americas and Australia are included as operating activities within the Companys consolidated statements of cash flows. Distributions of partnership profits to sanofi and sanofis funding of ongoing partnership operations occur on a routine basis and are also recognized within operating activities. Sanofi acts as the operating partner and owns a 50.1% majority controlling interest in the territory covering Europe and Asia. The Companys ownership interest in this territory is 49.9%. The Company does not consolidate the partnership entities in this territory but accounts for them under the equity method and reflects its share of the results in equity in net income of affiliates. The Company routinely receives distributions of profits and provides funding for the ongoing operations of the partnerships in the territory covering Europe and Asia, which are reflected as cash provided by operating activities. The Company and sanofi have a separate partnership governing the copromotion of irbesartan in the U.S. Under this alliance, the Company recognizes other income related to the amortization of deferred income associated with sanofis $350 million payment to the |
BUSINESS SEGMENT INFORMATION
BUSINESS SEGMENT INFORMATION | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
BUSINESS SEGMENT INFORMATION | Note 3. BUSINESS SEGMENT INFORMATION The segment information presented below is consistent with the financial information regularly reviewed by the chief operating decision maker for purposes of evaluating performance, allocating resources, setting incentive compensation targets, and planning and forecasting future periods. After the split-off of Mead Johnson, and divestitures of ConvaTec and Medical Imaging businesses during the past two years, a single operating segment remains, BioPharmaceuticals. This segment is engaged in the discovery, development, licensing, manufacturing, marketing, distribution and sale of innovative medicines that help patients prevail over serious diseases. A global research and development organization and a global supply chain organization is utilized and responsible for the development and delivery of products to the market. Products are distributed and sold through four regional organizations that serve the United States; Europe, Middle East and Africa; Other Western Hemisphere countries; Emerging Markets and Pacific. The business is also supported by global corporate staff functions. Products are sold principally to wholesalers, and to a lesser extent, directly to distributors, retailers, hospitals, clinics, government agencies and pharmacies. Gross sales to the three largest pharmaceutical wholesalers in the U.S. as a percentage of total gross sales were as follows: 2009 2008 2007 McKesson Corporation 25 % 24 % 22 % Cardinal Health, Inc. 20 % 19 % 18 % AmerisourceBergen Corporation 15 % 14 % 13 % Selected geographic area information was as follows: Net Sales Year End Assets Dollars in Millions 2009 2008 2007 2009 2008 United States $ 11,909 $ 10,611 $ 8,992 $ 21,243 $ 19,968 Europe, Middle East and Africa 4,206 4,370 3,914 3,750 4,592 Other Western Hemisphere 1,300 1,329 1,390 5,177 3,467 Pacific 1,393 1,405 1,321 838 1,459 Total $ 18,808 $ 17,715 $ 15,617 $ 31,008 $ 29,486 Net sales of key products were as follows: Year Ended December31, Dollars in Millions 2009 2008 2007 PLAVIX* $ 6,146 $ 5,603 $ 4,755 AVAPRO*/AVALIDE* 1,283 1,290 1,204 REYATAZ 1,401 1,292 1,124 SUSTIVA Franchise (total revenue) 1,277 1,149 956 BARACLUDE 734 541 275 ERBITUX* 683 749 692 SPRYCEL 421 310 158 IXEMPRA 109 101 15 ABILIFY* 2,592 2,153 1,660 ORENCIA 602 441 231 ONGLYZA 24 Other 3,536 4,086 4,547 Total $ 18,808 $ 17,715 $ 15,617 Capital expenditures and depreciation within the BioPharmaceuticals segment were as follows: Dollars in Millions 2009 2008 2007 Capital expenditures $ 634 $ 686 $ 723 Depreciation 346 |
RESTRUCTURING
RESTRUCTURING | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
RESTRUCTURING | Note 4. RESTRUCTURING The productivity transformation initiative was designed to fundamentally change the way the business is run to meet the challenges of a changing business environment and to take advantage of the diverse opportunities in the marketplace as the transformation into a next-generation biopharmaceutical company continues. Most initiatives under the PTI have been implemented resulting in the incurrence of approximately $1.3 billion in costs and the recognition of $522 million in gains related to the sale of mature product lines and businesses. The Company is on target to create $2.5 billion in annual productivity cost savings and cost avoidance by 2012 of which approximately 90% is expected to be realized by the end of 2010. Subsequent to the PTI, a strategic process designed to achieve a culture of continuous improvement to enhance efficiency, effectiveness and competitiveness and to continue to improve the cost base has been implemented. The following PTI charges were recognized: YearEndedDecember31, Dollars in Millions 2009 2008 2007 Provision for restructuring $ 136 $ 215 $ 180 Accelerated depreciation, asset impairment and other shutdown costs 109 221 110 Pension settlements/curtailments 36 17 Process standardization implementation costs 110 109 43 Total cost 391 562 333 Gain on sale of product lines, businesses and assets and other (360 ) (162 ) Net charges $ 31 $ 400 $ 333 Most of the accelerated depreciation, asset impairment charges and other shutdown costs were included in cost of products sold and primarily relate to the rationalization of the manufacturing network in the BioPharmaceuticals segment. These assets continue to be depreciated until the facility closures are complete. The remaining costs of PTI were primarily attributed to process standardization activities and are recognized as incurred. Restructuring charges included termination benefits for workforce reductions of manufacturing, selling, administrative, and research and development personnel across all geographic regions of approximately 1,350 in 2009, 2,370 in 2008 and 2,800 in 2007. The following table presents the detail of expenses incurred in connection with restructuring activities: 2009 2008 2007 Dollars in Millions Termination Benefits OtherExit Costs Total Termination Benefits OtherExit Costs Total Termination Benefits OtherExit Costs Total Charges $ 144 $ 14 $ 158 $ 171 $ 43 $ 214 $ 185 $ 1 $ 186 Changes in estimates (16 ) (6 ) (22 ) 1 1 (6 ) (6 ) Provision for restructuring $ 128 $ 8 $ 136 $ 171 $ 44 $ 215 $ 179 $ 1 $ 180 The following table represents the activity of |
MEDAREX, INC. ACQUISITION
MEDAREX, INC. ACQUISITION | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
MEDAREX, INC. ACQUISITION | Note 5. MEDAREX, INC. ACQUISITION On September1, 2009, the Company acquired 100% of the remaining outstanding shares of Medarex not already owned and its outstanding stock options and restricted stock units upon completion of tender offers that expired on August27, 2009 and September1, 2009. The total purchase price of $2.3 billion was allocated to the estimated fair value of the assets acquired and liabilities assumed as presented below. Acquisition costs were $11 million and classified as other (income)/expense. Medarex is a biopharmaceutical company focused on the discovery, development and commercialization of fully human antibody-based therapeutic products to address major unmet healthcare needs in the areas of oncology, inflammation, autoimmune disorders and infectious diseases. As a result of the acquisition, the full rights over ipilimumab, currently in Phase III development, were received that increases the biologics development pipeline creating a more balanced portfolio of both small molecules and biologics. This more balanced portfolio associated with the BioPharma model and potential to optimize the existing ipilimumab programs drives a significant amount of the goodwill arising from this acquisition. Goodwill along with IPRD and other intangible assets valued in this acquisition are non-deductible for tax purposes and are assigned to the BioPharmaceutical segment. The following purchase price allocation was adjusted after the September30, 2009 quarterly report filed on Form 10-Q to reflect the final purchase price valuation. The impact of these adjustments were immaterial to prior quarters earnings. DollarsinMillions Purchase price: Cash $ 2,285 Fair value of the Companys equity in Medarex held prior to acquisition(1) 46 Total 2,331 Identifiable net assets: Cash 53 Marketable securities 269 Other current and long-term assets(2) 127 In-process research and development(3) 1,475 Intangible assets - Technology(4) 120 Intangible assets - Licenses(5) 315 Short-term borrowings (92 ) Other current and long-term liabilities (92 ) Deferred income taxes (352 ) Total identifiable net assets 1,823 Goodwill $ 508 (1) Other income of approximately $21 million was recognized from the remeasurement to fair value of the equity interest in Medarex held at the acquisition date. (2) Includes a 5.1% ownership interest in Genmab ($64 million) and an 18.7% ownership in Celldex Therapeutics, Inc. ($17 million), which have been subsequently sold as of December31, 2009 for a loss of $33 million. (3) Includes approximately $1.0 billion related to ipilimumab. (4) Amortized over 10 years. (5) Amortized over 13 years. The results of Medarex operations were included in the accompanying consolidated financial statements from August27, 2009. Pro forma supplemental financial information is not provided as the impact of the acquisition was not material to operating results. |
MEAD JOHNSON NUTRITION COMPANY
MEAD JOHNSON NUTRITION COMPANY INITIAL PUBLIC OFFERING | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
MEAD JOHNSON NUTRITION COMPANY INITIAL PUBLIC OFFERING | Note 6. MEAD JOHNSON NUTRITION COMPANY INITIAL PUBLIC OFFERING In February 2009, Mead Johnson completed an initial public offering (IPO), in which it sold 34.5million shares of its ClassA common stock at $24 per share. Net proceeds of $782 million, after deducting $46 million of underwriting discounts, commissions and offering expenses, were allocated to noncontrolling interest and capital in excess of par value of stock. Upon completion of the IPO, 42.3million shares of Mead Johnson ClassA common stock and 127.7million shares of Mead Johnson Class B common stock were held by the Company, representing an 83.1% interest in Mead Johnson and 97.5% of the combined voting power of the outstanding common stock. The rights of the holders of the shares of ClassA common stock and Class B common stock were identical, except with regard to voting and conversion. Each share of ClassA common stock was entitled to one vote per share. Each share of Class B common stock was entitled to ten votes per share and was convertible at any time at the election of the holder into one share of ClassA common stock. The Class B common stock automatically converted into shares of ClassA common stock. Various agreements related to the separation of Mead Johnson were entered into, including a separation agreement, a transitional services agreement, a tax matters agreement, a registration rights agreement and an employee matters agreement. |
DISCONTINUED OPERATIONS
DISCONTINUED OPERATIONS | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
DISCONTINUED OPERATIONS | Note 7. DISCONTINUED OPERATIONS Mead Johnson Nutrition Company Split-off The split-off of the remaining interest in Mead Johnson was completed on December23, 2009. The split-off was effected through the exchange offer of previously held 170million shares of Mead Johnson, after converting its Class B common stock to ClassA common stock, for 269million outstanding shares of the Companys stock resulting in a pre-tax gain of approximately $7.3 billion, $7.2 billion net of taxes. The shares received in connection with the exchange were valued using the closing price on December23, 2009 of $25.70 and reflected as treasury stock.The gain on the exchange was determined using the sum of the fair value of the shares received plus the net deficit of Mead Johnson attributable to the Company less taxes and other direct expenses related to the transaction, includinga tax reserve of $244 million which was established. ConvaTec Disposition In August 2008, the divestiture of the ConvaTec business to Cidron Healthcare Limited, an affiliate of Nordic Capital Fund VII and Avista Capital Partners L.P. (Avista), was completed for a gross purchase price of approximately $4.1 billion, resulting in a pre-tax gain of $3.4 billion, $2.0 billion net of taxes. Medical Imaging Disposition In January 2008, the divestiture of Bristol-Myers Squibb Medical Imaging (Medical Imaging) to Avista was completed for a gross purchase price of approximately $525 million, resulting in a pre-tax gain of $25 million and an after-tax loss of $43 million. Transitional Relationships with Discontinued Operations Subsequent to the respective dispositions, cash flows and income associated with the Mead Johnson, ConvaTec and the Medical Imaging businesses continued to be generated relating to activities that are transitional in nature and generally result from agreements that are intended to facilitate the orderly transfer of business operations. The agreements include, among others, services for accounting, customer service, distribution and manufacturing and generally expire no later than 18 months from the date of the divestiture. The income generated from these transitional activities is included in other (income)/expense and are not expected to be material to the future results of operations or cash flows. Such activities related to ConvaTec and Medical Imaging businesses are substantially complete at December31, 2009. The following summarized financial information related to the Mead Johnson, ConvaTec and Medical Imaging businesses are segregated from continuing operations and reported as discontinued operations through the date of disposition. Year Ended December31, Dollars in Millions 2009 2008 2007 Net sales: Mead Johnson $ 2,826 $ 2,882 $ 2,576 ConvaTec 735 1,155 Medical Imaging 34 629 Net sales $ 2,826 $ 3,651 $ 4,360 Earnings before income taxes: Mead Johnson $ 674 $ 696 $ 663 ConvaTec 175 348 Medical Imag |
EARNINGS PER SHARE
EARNINGS PER SHARE | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
EARNINGS PER SHARE | Note 8. EARNINGS PER SHARE The computations for basic and diluted earnings per common share (EPS) were as follows: Year Ended December31, Amounts in Millions, Except Per Share Data 2009 2008 2007 Basic EPS Calculation: Net Earnings from Continuing Operations Attributable to BMS $ 3,239 $ 2,697 $ 1,296 Dividends and undistributed earnings attributable to unvested shares (18 ) (13 ) (5 ) Net Earnings from Continuing Operations Attributable to BMS used for Basic EPS Calculation 3,221 2,684 1,291 Net Earnings from Discontinued Operations Attributable to BMS used for Basic EPS Calculation 7,331 2,537 865 Net Earnings Attributable to BMS used for Basic EPS Calculation $ 10,552 $ 5,221 $ 2,156 Basic EPS Attributable to BMS: Average Common Shares Outstanding Basic 1,974 1,977 1,970 Continuing Operations $ 1.63 $ 1.36 $ 0.65 Discontinued Operations 3.72 1.28 0.44 Net Earnings $ 5.35 $ 2.64 $ 1.09 Diluted EPS Calculation: Net Earnings from Continuing Operations Attributable to BMS $ 3,239 $ 2,697 $ 1,296 Contingently convertible debt interest expense and dividends and undistributed earnings attributable to unvested shares (17 ) 3 (5 ) Net Earnings from Continuing Operations Attributable to BMS used for Diluted EPS Calculation 3,222 2,700 1,291 Net Earnings from Discontinued Operations Attributable to BMS used for Diluted EPS Calculation 7,331 2,537 865 Net Earnings Attributable to BMS used for Diluted EPS Calculation $ 10,553 $ 5,237 $ 2,156 Diluted EPS Attributable to BMS: Average Common Shares Outstanding Basic 1,974 1,977 1,970 Contingently convertible debt common stock equivalents 1 21 Incremental shares outstanding assuming the exercise/vesting of share-based compensation 3 1 7 Average Common Shares Outstanding Diluted 1,978 1,999 1,977 Continuing Operations $ 1.63 $ 1.35 $ 0.65 Discontinued Operations 3.71 1.27 0.44 Net Earnings $ 5.34 $ 2.62 $ 1.09 Net Earnings of Discontinued Operations used for EPS Calculation: Net Earnings from Discontinued Operations Attributable to BMS $ 7,373 $ 2,550 $ 869 Dividends and undistributed earnings attributable to unvested shares (42 ) (13 ) (4 ) Net Earnings from Discontinued Operations Attributable to BMS used for EPS Calculation $ 7,331 $ 2,537 $ 865 |
EXPENSE
EXPENSE | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
OTHER (INCOME)/EXPENSE | Note 9. OTHER (INCOME)/EXPENSE Other (income)/expense include: Year Ended December31, Dollars in Millions 2009 2008 2007 Interest expense $ 184 $ 310 $ 422 Interest income (54 ) (130 ) (241 ) Gain on debt buyback and termination of interest rate swap agreements (7 ) (57 ) Auction Rate Securities (ARS) impairment 305 275 Foreign exchange transaction losses/(gains) 2 (78 ) 11 Gain on sale of product lines, businesses and assets (360 ) (159 ) (282 ) Medarex acquisition (10 ) Net royalty income and amortization of upfront licensing and milestone payments received from alliance partners (148 ) (141 ) (104 ) Pension settlements/curtailments 43 8 6 Other (31 ) (36 ) (10 ) Other (income)/expense $ (381 ) $ 22 $ 77 |
INCOME TAXES
INCOME TAXES | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
INCOME TAXES | Note 10. INCOME TAXES The components of earnings from continuing operations before income taxes categorized based on the location of the taxing authorities were as follows: Year Ended December31, Dollars in Millions 2009 2008 2007 U.S. $ 2,705 $ 2,248 $ 665 Non-U.S. 2,897 2,528 1,858 Total $ 5,602 $ 4,776 $ 2,523 The provision/(benefit) for income taxes attributable to continuing operations consisted of: Year Ended December31, Dollars in Millions 2009 2008 2007 Current: U.S. $ 410 $ 282 $ 210 Non-U.S. 646 649 579 Total Current 1,056 931 789 Deferred: U.S. 222 88 (261 ) Non-U.S. (96 ) 71 (57 ) Total Deferred 126 159 (318 ) Total Provision $ 1,182 $ 1,090 $ 471 Effective Tax Rate The reconciliation of the effective tax rate to the U.S. statutory Federal income tax rate was: % of Earnings Before Income Taxes Dollars in Millions 2009 2008 2007 Earnings from continuing operations before income taxes $ 5,602 $ 4,776 $ 2,523 U.S. statutory rate 1,961 35.0 % 1,671 35.0 % 883 35.0 % Foreign tax effect of certain operations in Ireland, Puerto Rico and Switzerland (598 ) (10.7 )% (586 ) (12.3 )% (492 ) (19.5 )% State and local taxes (net of valuation allowance) 14 0.3 % 1 0.0 % 10 0.4 % U.S. Federal, state and foreign contingent tax matters (64 ) (1.1 )% (40 ) (0.8 )% (60 ) (2.4 )% Acquired in-process research and development expense 11 0.2 % 81 3.2 % U.S. Federal research and development tax credit (81 ) (1.4 )% (84 ) (1.8 )% (98 ) (3.9 )% Impairment of financial instruments 51 1.1 % 96 3.8 % Foreign and other (50 ) (1.0 )% 66 1.4 % 51 2.1 % $ 1,182 21.1 % $ 1,090 22.8 % $ 471 18.7 % The decrease in the 2009 effective tax rate from 2008 was primarily due to the unfavorable 2008 tax impact related to IPRD and ARS impairment charges and to a lesser extent, a higher benefit in 2009 related to certain contingent matters. The increase in the 2008 effective tax rate from 2007 was primarily due to higher pre-tax income in the U.S., including the gain on the sale of ImClone shares, and earnings mix in high tax jurisdictions in 2008. Partially offsetting these factors were lower nondeductible charges in 2008 for IPRD and lower ARS impairment charges with little or no tax benefit. The tax rate in 2008 was favorably impacted by a benefit of $91 million of tax related to the f |
FAIR VALUE MEASUREMENT
FAIR VALUE MEASUREMENT | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
FAIR VALUE MEASUREMENT | Note 11. FAIR VALUE MEASUREMENT The fair value of financial assets and liabilities are classified in one of the following categories: Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for identical assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs. Level 2: Observable prices that are based on inputs not quoted on active markets, but corroborated by market data. Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs. December 31, 2009 December 31, 2008 Dollars in Millions Level1 Level2 Level3 Total Level1 Level2 Level3 Total Available for Sale: U.S. Government Agency Securities $ 225 $ $ $ 225 $ 180 $ $ $ 180 Equity Securities 11 11 21 21 Prime Money Market Funds 5,807 5,807 Corporate Debt Securities 837 837 Commercial Paper 518 518 FDIC Insured Debt Securities 252 252 U.S. Treasury Money Market Funds 218 218 7,049 7,049 U.S. Government Agency Money Market Funds 24 24 Floating Rate Securities (FRS) 91 91 203 203 Auction Rate Securities 88 88 94 94 Total available for sale assets 236 7,656 179 8,071 201 7,049 297 7,547 Derivatives: Interest Rate Swap Derivatives 165 165 647 647 Foreign Currency Forward Derivatives 21 21 90 90 Total derivative assets 186 186 737 737 Total assets at fair value $ 236 $ 7,842 $ 179 $ 8,257 $ 201 $ 7,786 $ 297 $ 8,284 Derivatives: Foreign Currency Forward Derivatives $ $ 31 $ $ 31 $ $ 45 $ $ 45 Interest Rate Swap Derivatives 5 5 Natural Gas Contracts 1 1 7 7 Total derivative liabilities 37 37 52 52 Total liabilities at fair value $ $ 37 $ $ 37 $ $ 52 $ $ 52 A majority of the ARS were rated A by Standard and Poors, and primarily represent interests in insurance securitizations. Valuation models are utilized that rely exclusively on Level 3 inputs due to |
CASH, CASH EQUIVALENTS AND MARK
CASH, CASH EQUIVALENTS AND MARKETABLE SECURITIES | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
CASH, CASH EQUIVALENTS AND MARKETABLE SECURITIES | Note 12. CASH, CASH EQUIVALENTS AND MARKETABLE SECURITIES Cash and cash equivalents were $7,683 million at December31, 2009 and $7,976 million at December31, 2008 and consisted of prime money market funds, government agency securities and treasury securities. Cash equivalents primarily consist of highly liquid investments with original maturities of three months or less at the time of purchase and are recognized at cost, which approximates fair value. The following table summarizes current and non-current marketable securities, accounted for as available for sale debt securities and equity securities: December 31, 2009 December 31, 2008 Dollars in Millions Cost FairValue Carrying Value Unrealized (Loss)/Gain inAccumulated OCI Cost FairValue Carrying Value Unrealized (Loss)/Gain inAccumulated OCI Current marketable securities: Certificates of deposit $ 501 $ 501 $ 501 $ $ $ $ $ Commercial Paper 205 205 205 U.S. government agency securities 125 125 125 U.S. Treasury Bills 179 180 180 1 Floating rate securities 115 109 109 (6 ) Total current $ 831 $ 831 $ 831 $ $ 294 $ 289 $ 289 $ (5 ) Non-current marketable securities: Corporate debt securities $ 836 $ 837 $ 837 $ 3 $ $ $ $ FDIC insured debt securities 252 252 252 U.S. government agency securities 100 100 100 Auction rate securities 114 88 88 8 169 94 94 Floating rate securities(1) 113 91 91 (22 ) 139 94 94 (45 ) Other 1 1 1 Total non-current $ 1,416 $ 1,369 $ 1,369 $ (11 ) $ 308 $ 188 $ 188 $ (45 ) Other assets: Equity securities $ 11 $ 11 $ 11 $ $ 31 $ 21 $ 21 $ (10 ) (1) All FRS have been in an unrealized loss position for 12 months or more at December31, 2009. The following table summarizes the activity for financial assets utilizing Level 3 fair value measurements: 2009 2008 Current FRS Non-current Total Current FRS Non-current Total Dollars in Millions FRS ARS FRS ARS Fair value at January1 $ 109 $ 94 $ 94 $ 297 $ 337 $ $ 419 $ 756 Sales and settlements (115 ) (26 ) (14 ) (155 ) (106 ) (2 ) (118 ) (226 ) Transfers between |
RECEIVABLES
RECEIVABLES | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
RECEIVABLES | Note 13. RECEIVABLES Receivables include: December31, Dollars in Millions 2009 2008 Trade receivables $ 2,000 $ 2,545 Less allowances 103 128 Net trade receivables 1,897 2,417 Alliance partners receivables 870 804 Income tax refund claims 103 64 Miscellaneous receivables 294 359 Receivables $ 3,164 $ 3,644 Receivables are netted with deferred income related to alliance partners until recognition of income. As a result, alliance partner receivables and deferred income were reduced by $730 million and $566 million at December31, 2009 and 2008, respectively. For additional information regarding alliance partners, see Note 2. Alliances and Collaborations. Non-U.S. receivables sold on a nonrecourse basis were $660 million and $350 million in 2009 and 2008, respectively. In the aggregate, receivables due from three pharmaceutical wholesalers in the U.S. represented 47% and 35% of total trade receivables at December31, 2009 and 2008, respectively. |
INVENTORIES
INVENTORIES | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
INVENTORIES | Note 14. INVENTORIES Inventories include: December31, Dollars in Millions 2009 2008 Finished goods $ 580 $ 707 Work in process 630 738 Raw and packaging materials 203 320 Inventories $ 1,413 $ 1,765 Inventories expected to remain on-hand beyond one year were $249 million and $185 million at December31, 2009 and 2008, respectively, and included in non-current other assets. These amounts include capitalized costs related to production of products for programs in Phase III development subject to final U.S. Food and Drug Administration approval of $49 million and $47 million at December31, 2009 and 2008, respectively. The probability of future sales, as well as the status of the regulatory approval process, are considered in assessing the recoverability of these costs. |
PROPERTY, PLANT AND EQUIPMENT
PROPERTY, PLANT AND EQUIPMENT | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
PROPERTY, PLANT AND EQUIPMENT | Note 15. PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment includes: December31, Dollars in Millions 2009 2008 Land $ 142 $ 149 Buildings 4,350 4,506 Machinery, equipment and fixtures 3,563 4,007 Construction in progress 840 787 Gross property, plant and equipment 8,895 9,449 Less accumulated depreciation 3,840 4,044 Property, plant and equipment $ 5,055 $ 5,405 Depreciation expense was $469 million in 2009, $562 million in 2008 and $542 million in 2007, of which $51 million in 2009, $50 million in 2008 and $69 million in 2007 was included in discontinued operations. Capitalized interest was $13 million in 2009, $23 million in 2008 and $27 million in 2007. |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
GOODWILL AND OTHER INTANGIBLE ASSETS | Note 16. GOODWILL AND OTHER INTANGIBLE ASSETS Changes in the carrying amount of goodwill by segment were as follows: Dollars in Millions BioPharmaceuticals Other Total Balance at January1, 2008 $ 4,599 $ 399 $ 4,998 Kosan acquisition 127 127 Adnexus purchase price allocation adjustment (7 ) (7 ) Sale of Medical Imaging (2 ) (2 ) Sale of ConvaTec (280 ) (280 ) Sale of mature brand business in Egypt (9 ) (9 ) Balance at December31, 2008 4,710 117 4,827 Medarex acquisition 508 508 Mead Johnson split-off (117 ) (117 ) Balance at December31, 2009 $ 5,218 $ $ 5,218 Other intangible assets include: Estimated Useful Lives December 31, 2009 December 31, 2008 Dollars in Millions Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Patents/Trademarks 9 13 years $ 137 $ 95 $ 42 $ 156 $ 103 $ 53 Licenses 2 15 years 963 299 664 650 250 400 Technology 9 15 years 1,227 810 417 1,107 704 403 Capitalized software 310years 1,037 770 267 1,040 745 295 3,364 1,974 1,390 2,953 1,802 1,151 In-process research and development (Note5) 1,475 1,475 Total other intangible assets $ 4,839 $ 1,974 $ 2,865 $ 2,953 $ 1,802 $ 1,151 Changes in other intangible assets were as follows: Dollars in Millions 2009 2008 2007 Other intangible assets carrying amount at January1 $ 1,151 $ 1,330 $ 1,852 Capitalized software and other additions 96 138 74 Medarex acquisition 1,910 Adnexus acquisition 27 Mead Johnson split-off (50 ) Sale of ConvaTec (21 ) Medical Imaging assets held for sale (273 ) Amortization (238 ) (254 ) (350 ) Impairment charges (40 ) Other (4 ) (2 ) Other intangible assets carrying amount at December31 $ 2,865 $ 1,151 $ 1,330 Amortization expense included in discontinued operations was $9 million in 2009, $12 million in 2008 and $79 million in 2007. Expected future amortization expense of the December31, 2009 finite-lived other intangible assets is $258 million in 2010, $250 million in 2011, $215 million in 2012, $134 million in 2013, $117 million in 2014 and $416 million thereafter. |
ACCRUED EXPENSES
ACCRUED EXPENSES | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
ACCRUED EXPENSES | Note 17. ACCRUED EXPENSES Accrued expenses include: December31, Dollars in Millions 2009 2008 Employee compensation and benefits $ 659 $ 784 Royalties 570 515 Accrued research and development 473 466 Restructuringcurrent 142 158 Pension and postretirement benefits 43 90 Accrued litigation 39 38 Other 859 923 Total accrued expenses $ 2,785 $ 2,974 |
EQUITY
EQUITY | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
EQUITY | Note 18. EQUITY Changes in common shares, treasury stock and capital in excess of par value of stock were as follows: Dollars and Shares in Millions CommonShares Issued Treasury Stock Cost ofTreasury Stock CapitalinExcess of Par Value of Stock Balance at January1, 2007 2,205 238 $ (10,927 ) $ 2,498 Employee stock compensation plans (12 ) 343 127 Balance at December31, 2007 2,205 226 (10,584 ) 2,625 Employee stock compensation plans 18 132 Balance at December31, 2008 2,205 226 (10,566 ) 2,757 Mead Johnson IPO 942 Adjustments to the Mead Johnson net asset transfer (7 ) Mead Johnson split-off 269 (6,921 ) Employee stock compensation plans (4 ) 123 76 Balance at December31, 2009 2,205 491 $ (17,364 ) $ 3,768 The accumulated balances related to each component of other comprehensive income/(loss) (OCI), net of taxes, were as follows: Dollars in Millions Foreign Currency Translation Derivatives Qualifyingas EffectiveHedges Pension and Other Postretirement Benefits Availablefor SaleSecurities Accumulated Other Comprehensive Income/(Loss) Balance at January1, 2007 $ (424 ) $ (23 ) $ (1,211 ) $ 13 $ (1,645 ) Other comprehensive income/(loss) 99 (14 ) 238 (139 ) 184 Balance at December31, 2007 (325 ) (37 ) (973 ) (126 ) (1,461 ) Other comprehensive income/(loss) (99 ) 51 (1,285 ) 75 (1,258 ) Balance at December31, 2008 (424 ) 14 (2,258 ) (51 ) (2,719 ) Other comprehensive income/(loss) 81 (44 ) 100 41 178 Balance at December31, 2009 $ (343 ) $ (30 ) $ (2,158 ) $ (10 ) $ (2,541 ) The reconciliation of noncontrolling interest was as follows: Dollars in Millions 2009 2008 2007 Balance at January1 $ (33 ) $ (27 ) $ 50 Mead Johnson IPO (160 ) Adjustments to the Mead Johnson net asset transfer 7 Mead Johnson split-off 105 Net earnings attributable to noncontrolling interest 1,808 1,468 1,132 Other comprehensive income attributable to noncontrolling interest 10 Distributions (1,795 ) (1,474 ) (1,209 ) Balance at December31 $ (58 ) $ (33 ) $ (27 ) Noncontrolling interest is primarily related to the partnerships with sanofi for the territory covering the Americas for net sales of PLAVIX*. Net earnings attributable to noncontrolling interest are presented net of taxes of $589 million in 2009, $472 mill |
PENSION, POSTRETIREMENT AND POS
PENSION, POSTRETIREMENT AND POSTEMPLOYMENT LIABILITIES | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
PENSION, POSTRETIREMENT AND POSTEMPLOYMENT LIABILITIES | Note 19. PENSION, POSTRETIREMENT AND POSTEMPLOYMENT LIABILITIES The Company and certain of its subsidiaries have defined benefit pension plans, defined contribution plans and termination indemnity plans for regular full-time employees. The principal pension plan is the Bristol-Myers Squibb Retirement Income Plan in the U.S. which represents approximately 70% of the consolidated pension plan assets and obligations. The funding policy is to contribute amounts to provide for current service and to fund past service liability. Plan benefits are based primarily on the participants years of credited service and compensation. Plan assets consist principally of equity and fixed-income securities. Comprehensive medical and group life benefits are provided for substantially all U.S. retirees who elect to participate in comprehensive medical and group life plans. The medical plan is contributory. Contributions are adjusted periodically and vary by date of retirement. The life insurance plan is noncontributory. Plan assets consist principally of equity and fixed-income securities. Similar plans exist for employees in certain countries outside of the U.S. The net periodic benefit cost of defined benefit pension and postretirement benefit plans includes: Pension Benefits Other Benefits Dollars in Millions 2009 2008 2007 2009 2008 2007 Service cost benefits earned during the year $ 178 $ 227 $ 249 $ 6 $ 7 $ 8 Interest cost on projected benefit obligation 381 389 352 37 38 36 Expected return on plan assets (453 ) (469 ) (442 ) (19 ) (28 ) (25 ) Amortization of prior service cost/(benefit) 4 10 11 (3 ) (3 ) (3 ) Amortization of net actuarial loss 94 98 140 10 5 6 Net periodic benefit cost 204 255 310 31 19 22 Curtailments 24 1 (2 ) Settlements 29 36 Special termination benefits 14 3 2 1 Total net periodic benefit cost $ 257 $ 306 $ 313 $ 31 $ 19 $ 23 Continuing operations $ 242 $ 256 $ 259 $ 28 $ 17 $ 20 Discontinued operations 15 50 54 3 2 3 Total net periodic benefit cost $ 257 $ 306 $ 313 $ 31 $ 19 $ 23 The U.S. Retirement Income Plan and several other plans were amended during June 2009. The amendments eliminate the crediting of future benefits relating to service effective December31, 2009. Salary increases will continue to be considered for an additional five-year period in determining the benefit obligation related to prior service. The plan amendments were accounted for as a curtailment. As a resu |
EMPLOYEE STOCK BENEFIT PLANS
EMPLOYEE STOCK BENEFIT PLANS | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
EMPLOYEE STOCK BENEFIT PLANS | Note 20. EMPLOYEE STOCK BENEFIT PLANS Employee Stock Plans On May1, 2007, the shareholders approved the 2007 Stock Award and Incentive Plan (the 2007 Plan). The 2007 Plan replaced the 2002 Stock Incentive Plan (the 2002 Plan) that expired on May31, 2007. The 2007 Plan provides for 42million new shares of common stock reserved for delivery to participants, plus shares remaining available for new grants under the 2002 Plan and shares recaptured from outstanding awards under the 2002 Plan. Only shares actually delivered to participants in connection with an award after all restrictions have lapsed will reduce the number of shares reserved. Shares tendered in a prior year to pay the purchase price of options and shares previously utilized to satisfy withholding tax obligations upon exercise continue to be available and reserved. Shares of common stock reserved for issuance pursuant to stock plans, options and conversions of preferred stock were 346million and 350million at December31, 2009 and 2008, respectively. Shares available to be granted for the active plans were 92million and 100million at December31, 2009 and 2008, respectively, adjusted for the combination of plans. Under the 2007 Plan and the 2002 Plan, executive officers and key employees may be granted options to purchase common stock at no less than 100% of the market price on the date the option is granted. Options generally become exercisable in installments of 25%per year on each of the first through the fourth anniversaries of the grant date and have a maximum term of 10 years. Generally, shares for the stock option exercise are issued from treasury stock. Additionally, the plan provides for the granting of stock appreciation rights whereby the grantee may surrender exercisable rights and receive common stock and/or cash measured by the excess of the market price of the common stock over the option exercise price. Stock appreciation rights of 139thousand were outstanding and accounted for as liability awards at December31, 2009. The 2007 Plan and the 2002 Plan provide for the granting of common stock to key employees, subject to restrictions as to continuous employment. Restrictions generally expire over a four year period from date of grant. Compensation expense is recognized over the restricted period. Restricted stock units have been granted instead of restricted stock since 2007. A stock unit is a right to receive stock at the end of the specified vesting period but has no voting rights. The 2007 Plan and the 2002 Plan also incorporated long-term performance awards.These awards have a three year cycle and are delivered in the form of a target number of performance share units. The number of shares ultimately issued is calculated based on actual performance compared to earnings targets and other performance criteria established at the beginning of the performance period. The awards have annual goals with a maximum payout of 165% since 2007. If threshold targets are not met for a performance period, no payment is made under the plan for that annual period. Stock-based compensation expense was as follows: YearsEndedDecember31, Dollars |
SHORT-TERM BORROWINGS AND LONG-
SHORT-TERM BORROWINGS AND LONG-TERM DEBT | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
SHORT-TERM BORROWINGS AND LONG-TERM DEBT | Note 21. SHORT-TERM BORROWINGS AND LONG-TERM DEBT Short-term borrowings include: December31, Dollars in Millions 2009 2008 Bank drafts $ 83 $ 127 Principal Value: 1.81% Yen Notes due 2010 38 2.25% Convertible Senior Debentures due 2011 37 Demand Note payable to Mead Johnson (repaid January 2010) 30 Other 43 27 Total $ 231 $ 154 As part of the Medarex acquisition, Medarexs outstanding 2.25% Convertible Senior Notes due May15, 2011 were assumed. These Notes were adjusted into the right to receive $1,167 in cash at any time for each $1,000 principal amount outstanding (the equivalent of $16 per share) at any time prior to maturity. Long-term debt includes: December31, Dollars in Millions 2009 2008 Principal Value: 6.125% Notes due 2038 $ 1,000 $ 1,000 5.875% Notes due 2036 959 1,023 4.375% Euro Notes due 2016 720 698 4.625% Euro Notes due 2021 720 698 5.45% Notes due 2018 600 600 5.25% Notes due 2013 597 597 6.80% Debentures due 2026 332 350 7.15% Debentures due 2023 304 339 6.88% Debentures due 2097 287 287 Floating Rate Convertible Senior Debentures due 2023 50 50 5.75% Industrial Revenue Bonds due 2024 35 35 1.81% Yen Notes due 2010 39 Variable Rate Industrial Revenue Bonds due 2030 15 15 Other 3 6 Subtotal 5,622 5,737 Adjustments to Principal Value: Fair value of interest rate swaps 160 647 Unamortized basis adjustment from swap terminations 377 233 Unamortized bond discounts (29 ) (32 ) Total $ 6,130 $ 6,585 All or a portion of the Floating Rate Convertible Senior Debentures due 2023 can be redeemed by the holders at par on September15, 2013 and 2018, or if a fundamental change in ownership of occurs. The Debentures are callable at par at any time by the Company. The Debentures have a conversion price of $40.83, equal to a conversion rate of 24.4922 shares for each $1,000 principal amount, subject to certain anti-dilutive adjustments. The maximum conversion rate is 38.7597 shares for each $1,000 principal amount. The Debentures pay interest quarterly at an annual rate equal to the three month LIBOR, reset quarterly, minus 0.50% (the yield never to be less than zero). In February 2009, Mead Johnson Company as borrower and Mead Johnson as guarantor, both of which were indirect, majority-owned subsidiaries, entered into a three year syndicated revolving credit facility agreement. In the fourth quarter of 2009, Mead Johnson borrowed $200 million under the revolving credit facility and issued various Notes totaling $1.5 billion, the proceeds of which were used to repay certain intercompany debt prior to the split-off. During 2009, $117 million of notional debt was repurchased and $53 million notional amoun |
FINANCIAL INSTRUMENTS
FINANCIAL INSTRUMENTS | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
FINANCIAL INSTRUMENTS | Note 22. FINANCIAL INSTRUMENTS There is exposure to market risk due to changes in currency exchange rates and interest rates. As a result, certain derivative financial instruments are used when available on a cost-effective basis to hedge the underlying economic exposure. The primary net foreign currency translation exposures are the euro, Japanese yen, Canadian dollar, British pound, Australian dollar, Mexican peso and Chinese renminbi. Foreign currency forward contracts are used to manage these exposures. These instruments generally qualify for cash flow hedge accounting treatment and are managed on a consolidated basis to efficiently net exposures and thus take advantage of any natural offsets. Derivative instruments are also used as part of the interest rate risk management strategy. The derivative instruments used are principally comprised of fixed-to-floating rate interest swaps, which generally qualify for fair-value hedge accounting treatment. In addition, all of the financial instruments, including derivatives, are subject to counterparty credit risk which is considered as part of the overall fair value measurement. Derivative financial instruments are not used for trading purposes. Cash Flow Hedges Foreign Currency Forward Contracts Foreign currency forward contracts are utilized to hedge forecasted intercompany and other transactions for certain foreign currencies. These contracts are designated as foreign currency cash flow hedges when appropriate. The notional and fair value amounts of these contracts were $1,511 million and $10 million net liabilities and $1,151 million and $49 million net assets at December31, 2009 and 2008, respectively. The majority of these contracts qualify as hedges of probable forecasted cash flows and the effective portion of changes in fair value is temporarily reported in accumulated OCI and recognized in earnings when the hedged item affects earnings. The following table summarizes outstanding foreign currency forward contracts at December31, 2009. The fair value of these contracts is based on year-end currency rates and should be viewed in relation to the fair value of the underlying hedged transactions and the overall reduction in exposure to adverse fluctuations in foreign currency exchange rates. Dollars in Millions, except currency rates Weighted-Average Strike Price Notional Amount FairValue Asset/(Liability) Maturity Foreign Currency Forwards: Cash Flow Hedges Australian dollar 0.78 $ 49 $ (6 ) 2010 Australian dollar 0.80 8 (1 ) 2011 Brazilian real 1.92 26 (2 ) 2010 British pound 1.60 74 (1 ) 2010 British pound 1.65 13 2011 Canadian dollar 1.10 89 (4 ) 2010 Canadian dollar 1.09 10 2011 Euro 1.45 809 7 2010 Euro 1.45 74 1 2011 Japanese yen 93.31 211 (1 ) 2010 Japanese yen 91.18 29 2011 Mexican peso 13.58 47 (1 ) 2010 Polish zloty 2.99 29 (1 ) 2010 Swedish krona 7.25 |
LEASES
LEASES | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
LEASES | Note 23. LEASES Minimum rental commitments for non-cancelable operating leases (primarily real estate and motor vehicles) in effect at December31, 2009, were as follows: Years Ending December31, DollarsinMillions 2010 $ 120 2011 100 2012 95 2013 83 2014 71 Later years 145 Total minimum payments 614 Less total minimum sublease rentals 17 Net minimum rental commitments $ 597 Operating lease expense was $149 million in 2009, $179 million in 2008 and $166 million in 2007 (net of sublease income of $17 million in 2009, $16 million in 2008 and $17 million in 2007), of which $17 million in 2009, $12 million in 2008 and $10 million in 2007 was included in discontinued operations. In 2008, a sale and leaseback of an administrative facility in Paris, France was completed for $227 million (155 million), resulting in a pre-tax gain of $111 million. Most of the gain was deferred and will reduce future lease costs over the lease period of 9 years. |
LEGAL PROCEEDINGS AND CONTINGEN
LEGAL PROCEEDINGS AND CONTINGENCIES | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
LEGAL PROCEEDINGS AND CONTINGENCIES | Note 24. LEGAL PROCEEDINGS AND CONTINGENCIES The Company and certain of its subsidiaries are involved in various lawsuits, claims, government investigations and other legal proceedings that arise from time to time in the ordinary course of the business relating to product liability, patent, commercial, consumer, environmental and securities matters. The Company recognizes accruals for such contingencies when it is probable that a liability will be incurred and the amount of loss can be reasonably estimated. Significant litigation charges were $132 million in 2009, $33 million in 2008 and $14 million in 2007, net of revised estimates to previously accrued amounts. Cash payments related to significant litigation were $139 million in 2009, $210 million in 2008 and $318 million in 2007. The most significant of these matters are described below. Although the Company believes it has substantial defenses in these matters, the Company could in the future incur judgments or enter into settlements that could have a material adverse effect on the results of operations for any particular period. INTELLECTUAL PROPERTY PLAVIX* Litigation PLAVIX* is currently the Companys largest product ranked by net sales. The PLAVIX* patents are subject to a number of challenges in the U.S., including the litigation with Apotex Inc. and Apotex Corp. (Apotex) described below, and in other less significant markets for the product. It is not reasonably possible to estimate the impact of these lawsuits on the Company. However, loss of market exclusivity of PLAVIX* and sustained generic competition in the U.S. would be material to the Companys net sales of PLAVIX*, results of operations and cash flows, and could be material to the Companys financial condition and liquidity. The Company and its product partner, sanofi, (the Companies) intend to vigorously pursue enforcement of their patent rights in PLAVIX*. PLAVIX* Litigation U.S. Patent Infringement Litigation against Apotex and Related Matters As previously disclosed, the Companys U.S. territory partnership under its alliance with sanofi is a plaintiff in a pending patent infringement lawsuit instituted in the United States District Court for the Southern District of New York (District Court) entitled Sanofi-Synthelabo, Sanofi-Synthelabo, Inc. and Bristol-Myers Squibb Sanofi Pharmaceuticals Holding Partnership v. Apotex. The suit is based on U.S. Patent No.4,847,265 (the 265 Patent), a composition of matter patent, which discloses and claims, among other things, the hydrogen sulfate salt of clopidogrel, a medicine made available in the U.S. by the Companies as PLAVIX*. Also, as previously reported, the District Court upheld the validity and enforceability of the 265 Patent, maintaining the main patent protection for PLAVIX* in the U.S. until November 2011. The District Court also ruled that Apotexs generic clopidogrel bisulfate product infringed the 265 Patent and permanently enjoined Apotex from engaging in any activity that infringes the 265 Patent, including marketing its generic product in the U.S. until after the patent expires. Apotex appealed the District Courts decision and on December12, |
SELECTED QUARTERLY FINANCIAL DA
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) | Note 25. SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) Dollars in Millions, except per share data FirstQuarter SecondQuarter ThirdQuarter FourthQuarter Year 2009: Net Sales $ 4,322 $ 4,665 $ 4,788 $ 5,033 $ 18,808 Gross Margin 3,157 3,440 3,471 3,600 13,668 Net Earnings from Continuing Operations 920 1,169 1,199 1,132 4,420 Less Net Earnings from Continuing Operations Attributable to Noncontrolling Interest 271 289 307 314 1,181 Net Earnings from Continuing Operations Attributable to BMS 649 880 892 818 3,239 Net Earnings/(Loss) from Discontinued Operations Attributable to BMS (11 ) 103 74 7,207 7,373 Net Earnings Attributable to BMS 638 983 966 8,025 10,612 EPS Attributable to BMS (1): Basic: Net Earnings from Continuing Operations $ 0.33 $ 0.44 $ 0.45 $ 0.42 $ 1.63 Net Earnings/(Loss) from Discontinued Operations (0.01 ) 0.05 0.04 3.66 3.72 Net Earnings per common share $ 0.32 $ 0.49 $ 0.49 $ 4.08 $ 5.35 Diluted: Net Earnings from Continuing Operations $ 0.33 $ 0.44 $ 0.45 $ 0.41 $ 1.63 Net Earnings/(Loss) from Discontinued Operations (0.01 ) 0.05 0.03 3.65 3.71 Net Earnings per common share $ 0.32 $ 0.49 $ 0.48 $ 4.06 $ 5.34 Dividends declared per common share $ 0.31 $ 0.31 $ 0.31 $ 0.32 $ 1.25 Cash and cash equivalents $ 7,832 $ 7,507 $ 6,367 $ 7,683 $ 7,683 Marketable securities(2) 1,272 1,596 1,504 2,200 2,200 Dollars in Millions, except per share data First Quarter Second Quarter Third Quarter Fourth Quarter Year 2008: Net Sales $ 4,188 $ 4,475 $ 4,510 $ 4,542 $ 17,715 Gross Margin 2,870 3,077 3,164 3,288 12,399 Net Earnings from Continuing Operations 737 840 725 1,384 3,686 Less Net Earnings from Continuing Operations Attributable to Noncontrolling Interest 228 239 257 265 989 Net Earnings from Continuing Operations Attributable to BMS 509 601 468 1,119 2,697 Net Earnings from Discontinued Operations Attributable to BMS 152 163 2,110 125 2,550 Net Earnings Attributable to BMS 661 764 2,578 1,244 5,247 EPS Attributable to BMS(1): Basic: Net Earnings from Continuing Operations $ 0.26 $ 0.30 $ 0.24 $ 0.56 $ 1.36 Net Earnings from Discontinued Operations 0.07 0.08 1.06 0.07 1.28 Net Earnings per Common Share |
VALUATION AND QUALIFYING ACCOUN
VALUATION AND QUALIFYING ACCOUNTS | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
VALUATION AND QUALIFYING ACCOUNTS | SCHEDULE II BRISTOL-MYERS SQUIBB COMPANY VALUATION AND QUALIFYING ACCOUNTS Description Balanceat beginning of year Provisionsfor baddebts, charge-backs and discounts Baddebts written-off/ payments for charge- backs and discounts Discontinued operations Balanceat end of year Dollars in Millions Allowances for Charge-Backs, Discounts and Doubtful Accounts:(1) For the year ended December31, 2009 $ 128 $ 776 $ (800 ) $ (1 ) $ 103 For the year ended December31, 2008 180 829 (835 ) (46 ) 128 For the year ended December31, 2007 150 798 (803 ) 35 180 Description Balanceat beginning of year Provisionsfor valuation allowance Releaseof valuation allowance /other Other comprehensive income Goodwill Balanceat end of year Dollars in Millions Valuation Allowance on Deferred Tax Assets:(1) For the year ended December31, 2009 $ 1,795 $ 17 $ (74 ) $ (8 ) $ 61 $ 1,791 For the year ended December31, 2008 1,950 9 (192 ) 14 14 1,795 For the year ended December31, 2007 625 1,325 1,950 (1) Amounts have been reclassified to give effect to discontinued operations. For further information on discontinued operations, see Item 8. Financial StatementsNote 7. Discontinued Operations. |
Document Information
Document Information | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Document Type | 10-K |
Amendment Flag | false |
Document Period End Date | 2009-12-31 |
Entity Information
Entity Information (USD $) | |||
12 Months Ended
Dec. 31, 2009 | Feb. 01, 2010
| Jun. 30, 2009
| |
Trading Symbol | BMY | ||
Entity Registrant Name | BRISTOL MYERS SQUIBB CO | ||
Entity Central Index Key | 0000014272 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 1,714,140,539 | ||
Entity Public Float | $34,786,806,312 |