SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1994
Commission File Number 1-1136
BRISTOL-MYERS SQUIBB COMPANY
(Exact name of registrant as specified in its charter)
Delaware 22-079-0350
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
345 Park Avenue, New York, N.Y. 10154
(Address of principal executive offices)
Telephone: (212) 546-4000
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
Common Stock, $.10 Par Value New York Stock Exchange
Pacific Stock Exchange
$2 Convertible Preferred Stock, New York Stock Exchange
$1 Par Value Pacific Stock Exchange
Preferred Stock Purchase Rights * New York Stock Exchange
Pacific Stock Exchange
* At the time of filing, the Rights were not traded separately from the Common
Stock. For additional information, see "Stockholders' Equity" in the Notes
to Consolidated Financial Statements, included in Part II, Item 8.
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ X ]
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes [ X ] No [ ]
The aggregate market value of voting stock held by non-affiliates of the
registrant as of February 28, 1995 was $31,303,878,966. At February 28, 1995
there were 507,491,100 shares of common stock outstanding.
Documents incorporated by reference
Proxy Statement for Annual Meeting of Stockholders on May 2, 1995. Part III
<PAGE>
PART I
------
Item 1. BUSINESS.
DESCRIPTION OF BRISTOL-MYERS SQUIBB COMPANY
-------------------------------------------
General:
-------
Bristol-Myers Squibb Company ("Bristol-Myers Squibb" or the "Company") was
incorporated under the laws of the State of Delaware in August 1933 under
the name Bristol-Myers Company as successor to a New York business started
in 1887. In 1989, Squibb Corporation merged with a subsidiary of
Bristol-Myers Company, and Bristol-Myers Company changed its name to
Bristol-Myers Squibb Company. Bristol-Myers Squibb, through its divisions
and subsidiaries, is a major producer and distributor of pharmaceutical
products, medical devices, nonprescription health products, toiletries and
beauty aids. In general, the business of the Company's industry segments
is not seasonal.
INDUSTRY SEGMENTS
-----------------
Reference is made to Note 3 Aquisitions and Divestitures and Note 17
Segment Information in the Notes to Consolidated Financial Statements
included in Part II, Item 8 of this Form 10-K Annual Report.
DESCRIPTION OF SEGMENTS
-----------------------
Pharmaceutical Products:
-----------------------
This segment includes sales of prescription medicines, mainly
cardiovascular, anti-infective and anti-cancer drugs, which comprise about
40%, 25% and 20%, respectively, of the segment's sales, central nervous
system drugs and other pharmaceutical products. Cardiovascular drugs
include captopril, an angiotensin converting enzyme (ACE) inhibitor sold
primarily under the trademarks CAPOTEN* and CAPOZIDE*; pravastatin sodium,
an HMG Co-A reductase inhibitor, sold primarily under the trademark
PRAVACHOL*; fosinopril sodium, a second-generation ACE inhibitor with
convenient once-a-day dosage, sold primarily under the trademark MONOPRIL*;
cholestyramine, a cholesterol-reducing agent, sold primarily under the
trademark QUESTRAN*; nadolol, a once-a-day beta blocker used in the
treatment of hypertension and angina pectoris, sold primarily under the
trademarks CORGARD* and CORZIDE*; sotalol, a beta blocker with unique
antiarrhythmic qualities, sold primarily under the trademark SOTACOR*; and
K-LYTE*. Anti-infective drugs include cefadroxil monohydrate, an oral
cephalosporin, sold primarily under the trademark DURICEF*; cefprozil, an
oral cephalosporin used in the treatment of respiratory infections, sold
primarily under the trademark CEFZIL*; amikacin, an aminoglycoside sold
primarily under the trademark AMIKIN*; aztreonam, a monobactam antibiotic
sold primarily under the trademark AZACTAM*; didanosine, an antiretroviral
drug used in the treatment of adult and pediatric patients with advanced
human immunodeficiency virus (HIV) infection, sold under the trademark
VIDEX*; synthetic penicillins, sold under the trademarks POLYCILLIN* and
POLYMOX*; cefatrizine, an oral cephalosporin, sold primarily under the
* Indicates brand names of products which are registered trademarks
owned by the Company.
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trademarks CEFAPEROS* and ZANITRIN*; and stavudine, a new antiretroviral
drug approved in the U.S. in June 1994 for use in the treatment of persons
with advanced HIV disease, sold under the trademark ZERIT*. Anti-cancer
drugs include paclitaxel, which in April 1994 received clearance in the
U.S. for use in treatment of breast cancer after failure of combination
chemotherapy for metastatic disease or relapse within six months of
adjuvant chemotherapy, and continues to be used in the treatment of
refractory ovarian cancer, sold under the trademark TAXOL*; carboplatin, a
chemotherapeutic agent used in the treatment of ovarian cancer, sold
primarily under the trademark PARAPLATIN*; etoposide, used in the treatment
of small cell lung cancer and refractory testicular cancer, sold primarily
under the trademark VEPESID*; PLATINOL*, IFEX*, MEGACE*, BLENOXANE*,
MUTAMYCIN* and CYTOXAN*. Central nervous system drugs include BUSPAR*, an
anxiolytic; DESYREL*, an antidepressant; STADOL*, a potent prescription
analgesic and STADOL NS*, a prescription nasal spray analgesic. In
December 1994, the Company received FDA approval to market SERZONE*, a new
antidepressant. In March 1995, the Company received FDA approval to
market Glucophage, a new oral anti-diabetes agent for Type II non-insulin
dependent diabetes. Dermatological drugs include DOVONEX*, a vitamin D3
analogue for the treatment of moderate psoriasis, and LAC-HYDRIN*, used in
the treatment of moderate to severe dry skin. Other pharmaceutical
products include OVCON*, an oral contraceptive; and ESTRACE*, an estrogen
replacement.
Medical Devices:
---------------
This segment includes sales of orthopaedic implants, which comprise about
40% of the segment's sales, ostomy and wound care products, surgical
instruments and other medical devices. Some of the principal products in
this segment are the ZIMMER* Total System of artificial hips, the
Insall/Burstein II Modular Total Knee System, the MGII* Total Knee System
and the CENTRALIGN* Precoat Hip Prosthesis, orthopaedic implants;
SUR-FIT/COMBIHESIVE*, ACTIVE LIFE/COLODRESS* and ILEODRESS*, ostomy care
products; and DUODERM*, wound care products. In February 1995, the Company
received FDA approval for the NEXGEN* Complete Knee Solution, an advanced
knee replacement system.
Nonprescription Health Products:
-------------------------------
This segment includes sales of infant formulas and other nutritional
products, which comprise about 65% of the segment's sales, analgesics,
cough/cold remedies and skin care products. Some of the principal products
in this segment are ENFAMIL*, PROSOBEE*, NUTRAMIGEN*, Gerber Baby Formula,
and LACTOFREE*, infant formula products; ENFAPRO*, NEXT STEP* and ALACTA*,
follow-on formula products for older babies; SUSTAGEN*, ISOCAL*, SUSTACAL*
and NUTRAMENT*, nutritional supplements and specialties; THERAGRAN*,
VI-FLOR*, VI-SOL* and NATALINS*, vitamins; EXCEDRIN*, BUFFERIN*, TEMPRA*
NUPRIN*, EFFERALGAN*, ASPIRINE UPSA* and DAFALGAN*, analgesics; COMTREX*, a
multi-symptom cold reliever; KERI*, a moisturizing body lotion; PRESUN*, a
sun blocking agent; and ALPHA KERI*, a shower and bath oil.
Toiletries and Beauty Aids:
--------------------------
This segment includes sales of haircoloring and hair care preparations,
which comprise about 75% of the segment's sales in 1994 and 65% in both
1993 and 1992, deodorants, anti-perspirants and other toiletries and beauty
aids. Among the principal products in this segment are NICE 'N EASY*, MISS
CLAIROL*, LOVING CARE*, ULTRESS*, NATURAL INSTINCTS*, haircolorings; the
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CONDITION* line and other shampoos and after-shampoo treatment products;
SYSTEME BIOLAGE*, VAVOOM!* and MATRIX ESSENTIALS*, professional hair care
products sold exclusively in beauty salons; INFUSIUM 23*, professional hair
care products; FINAL NET*, hair fixatives; VITALIS*, hair preparations;
BAN* and MUM*, anti-perspirants/deodorants; and SEA BREEZE*, MATRIX* and
SAUGELLA*, skin care products.
SOURCES AND AVAILABILITY OF RAW MATERIALS
-----------------------------------------
Bristol-Myers Squibb, for the most part, purchases the principal raw
materials and supplies used in each industry segment in the open market.
Substantially all such materials are obtainable from a number of sources so
that the loss of any one source of supply would not have a material adverse
effect on the Company.
PATENTS, TRADEMARKS AND LICENSES
--------------------------------
The Company owns or is licensed under a number of patents in the United
States and foreign countries covering products, principally in the
pharmaceutical products and medical devices segments, and has also
developed many brand names and trademarks for products in each industry
segment. The Company considers the overall protection of its patent,
trademark and license rights to be of material value and acts to protect
these rights from infringement. The Company believes that, except for the
U.S. patent relating to captopril whose expiration date was redefined by
legislation implementing the GATT treaty to February 1996, no single patent
or license is of material importance in relation to the business as a
whole. Due to questions surrounding the implementation of the GATT
legislation, the effect of the new patent expiration date on the Company's
overall performance is currently being evaluated.
COMPETITION, DISTRIBUTION AND CUSTOMERS
---------------------------------------
The markets in which Bristol-Myers Squibb competes are generally broad
based, heavily competitive and include many competitors. The principal
means of competition utilized to market the products of Bristol-Myers
Squibb include quality, service, price and product performance. The
products of the pharmaceutical products segment and the medical devices
segment are promoted on a national and international basis in medical
journals and directly to the medical profession. Most of the other
products of Bristol-Myers Squibb are generally advertised and promoted on a
national and international basis through the use of television, radio,
print media, consumer offers, and window and in-store displays.
Bristol-Myers Squibb's products are principally sold to the wholesale and
retail trade both nationally and internationally. Certain products of the
pharmaceutical products and medical devices segments are also sold to other
drug manufacturers, hospitals and the medical profession. None of the
segments is dependent upon a single customer, or a few customers, such that
the loss of any one or more would have a material adverse effect on the
segment.
RESEARCH AND DEVELOPMENT
------------------------
Research and development is essential to Bristol-Myers Squibb's businesses,
particularly to the pharmaceutical products segment. Management continues
to place great emphasis on these activities. Pharmaceutical research and
development is carried out by the Bristol-Myers Squibb Pharmaceutical
Research Institute which has major facilities in Princeton and New
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Brunswick, New Jersey, Wallingford, Connecticut and Seattle, Washington.
Pharmaceutical research and development is also carried out at various
other facilities in the United States and in Belgium, France, Germany,
Italy, Japan, and the United Kingdom.
Bristol-Myers Squibb spent $1,108 million in 1994, $1,128 million in 1993
and $1,083 million in 1992 on company sponsored research and development
activities. Pharmaceutical research and development spending, as a
percentage of pharmaceutical sales, was 13.6% in 1994 compared to 14.9% in
1993 and 14.8% in 1992.
REGULATION
----------
Most aspects of the Company's business are subject to some degree of
government regulation in the countries in which its operations are
conducted. The Company's policy is to comply fully with all regulatory
requirements applying to its products and operations. For some products,
and in some countries, government regulation is significant and, in
general, there is a trend to more stringent regulation. The Company
devotes significant time, effort and expense addressing the extensive
governmental regulatory requirements applicable to its business.
Governmental regulatory actions can result in the recall or seizure of
products, suspension or revocation of the authority necessary for the
production or sale of a product, and other civil and criminal sanctions.
In the United States, the drug, medical device, diagnostic, food and
cosmetic industries in which the Company operates have long been subject to
regulation by various federal, state and local agencies, primarily as to
product manufacture, safety, efficacy, advertising and labeling. Assuring
compliance with appropriate laws and regulations requires increasing
expenditures of time and resources.
In addition, governmental bodies in the United States as well as other
countries have expressed concern about costs relating to health care and,
in some cases, have focused attention on the pricing of drugs and on
appropriate drug utilization. Government regulation in these areas already
exists in some countries and may be expanded significantly in the United
States and other countries in the future.
While the Company is unable to predict the extent to which its business may
be affected by future regulatory developments, it believes that its
substantial experience dealing with governmental regulatory requirements
and restrictions on its operations throughout the world and its development
of new and improved products should enable it to compete effectively within
this environment.
EMPLOYEES
---------
Bristol-Myers Squibb employed approximately 47,700 people at December 31,
1994.
DOMESTIC AND FOREIGN OPERATIONS
-------------------------------
Reference is made to Note 17 Segment Information in the Notes to
Consolidated Financial Statements included in Part II, Item 8 of this Form
10-K Annual Report.
International operations are subject to certain risks which are inherent in
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conducting business abroad, including possible nationalization or
expropriation, price and exchange controls, limitations on foreign
participation in local enterprises and other restrictive governmental
actions. In addition, changes in the relative value of currencies take
place from time to time and their effects may be favorable or unfavorable
on Bristol-Myers Squibb's operations. There are currency restrictions
relating to repatriation of earnings in certain countries.
Item 2. PROPERTIES.
Bristol-Myers Squibb's world headquarters is located at 345 Park Avenue,
New York, New York, where it leases approximately 841,800 square feet of
floor space, approximately 277,700 square feet of which is sublet to
others. The Company's pharmaceutical world headquarters is located in
Princeton, New Jersey. Other major domestic pharmaceutical facilities are
located in Evansville, Indiana, New Brunswick and Plainsboro, New Jersey
and Buffalo and Syracuse, New York. The Company's major domestic medical
devices facilities are located in Warsaw, Indiana, Skillman, New Jersey and
Greensboro, North Carolina.
Bristol-Myers Squibb manufactures products at forty-six major worldwide
locations with an aggregate floor space of approximately 13,127,600 square
feet. Forty-five are owned by Bristol-Myers Squibb and one facility is
leased. The U.S. manufacturing facilities total seventeen, of which 47%
and 24% are used in the manufacture of pharmaceutical products and medical
devices, respectively. The non-U.S. operations include a total of twenty-
nine major owned manufacturing facilities, of which 76% and 3% are used in
the manufacture of pharmaceutical products and medical devices,
respectively. These facilities are located in Australia, Brazil, Canada,
China, Colombia, France, Germany, Ireland, Italy, Japan, Korea, Mexico, the
Netherlands, the Philippines, South Africa, Taiwan, the United Kingdom and
Venezuela, and aggregate approximately 6,336,400 square feet of space. The
recent increase in the number and square footage of facilities operated is
primarily due to the Company's recent acquisitions.
Portions of these facilities and other facilities owned or leased by
Bristol-Myers Squibb in the United States and elsewhere are used for
research, administration, storage and distribution. Bristol-Myers Squibb's
facilities are well-maintained, adequately insured and in satisfactory
condition.
Capital expenditures for the construction, expansion and modernization of
production, research and administrative facilities aggregrated $577
million, $580 million and $654 million in 1994, 1993 and 1992,
respectively.
Item 3. LEGAL PROCEEDINGS.
Breast Implant Litigation
-------------------------
As of March 1, 1995, approximately 20,000 plaintiffs have filed suit
against the Company, its subsidiary, Medical Engineering Corporation (MEC),
and certain other subsidiaries, in federal and state courts and in certain
Canadian provincial courts, alleging damages for personal injuries of
various types resulting from polyurethane covered breast implants and
smooth walled breast implants formerly manufactured by MEC or its
predecessor. Most of these plaintiffs are participants in the pending
class action settlement referred to below. A number of other manufacturers
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of breast implants, as well as suppliers of component parts and other
parties, are also defendants in many of these cases. The plaintiffs
typically seek damages for alleged medical ailments as well as punitive
damages. Some of these women have sued numerous manufacturers without
specifying the manufacturer of the implants involved.
The Company's insurers have been notified of the breast implant claims and
the settlement and certain insurers have reserved their rights or declined
to confirm coverage. In 1993, the Company commenced litigation in state
court, Jefferson County, Texas, against most of the Company's insurers,
seeking damages and a declaration of coverage. A trial of the insurance
coverage case is expected in 1996.
In June 1992, all federal breast implant cases were consolidated for
pre-trial purposes in the Northern District of Alabama following the
certification of a federal class action of all breast implant recipients
and their spouses. Early in 1994 the Company, MEC and other defendants and
certain plaintiffs negotiated a settlement regarding all pending and future
breast implant product liability claims brought in the United States
against certain defendants. The settlement was subject to court approval
and permitted claimants to elect not to participate (opt out). The
settlement would create a series of claim funds to which settling
defendants would contribute various amounts over approximately 30 years.
Under the settlement, the aggregate contribution to be made by the Company
and MEC is to be no more than $1.154 billion. In the fourth quarter of
1993, in anticipation of the settlement, the Company recorded a charge of
$500 million before taxes ($310 million after taxes). The charge consisted
of $1.5 billion for potential liabilities and expenses, offset by $1
billion of expected insurance proceeds. (Reference is made to Note 2
Special Charge in the Notes to Consolidated Financial Statements included
in Part II, Item 8 of this Form 10-K Annual Report.)
On September 1, 1994, the United States District Court gave its approval to
the settlement. The court excluded claimants from Quebec, Ontario and
Australia from the settlement but allowed voluntary participation by such
women. Appeals of the court's order approving the settlement have been
filed, primarily by health insurers, health care organizations and foreign
claimants.
The court has reported that as of February 28, 1995, 7,270 United States
women and 2,174 foreign women have elected to opt out of the settlement as
to all defendants. With respect to opt outs by women from the United
States, the Company currently estimates that approximately 3,000 women may
assert claims based upon MEC implants, approximately 2,200 of whom reside
in Texas. The Company has, at this time, identified approximately 300 of
the foreign opt outs as having MEC implants. A number of the opt outs
cannot, at this time, be identified as having implants of any particular
manufacturer. The Company does not yet know the number of opt outs who
have received implants from more than one company. With respect to many
women who have opted out little is known about the nature of their claims.
Some women who have opted out and who are said to have MEC implants have
not yet sued the Company. The exact number of lawsuits that will remain
in the event the settlement becomes effective is unknown at this time.
The cost to the Company of resolving the opt out claims is subject to a
number of uncertainties in addition to the unknown quantity and quality of
such claims. The relatively few trials against breast implant
manufacturers have produced mixed results, and additional trials may affect
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the outlook. The Company has maintained throughout this litigation that
breast implants do not cause disease and that reliance by plaintiffs'
experts upon case studies rather than epidemiological data is insufficient.
The results of continuing medical research and a variety of additional
factors, including the success of other legal defenses, may substantially
affect the cost of resolving opt out cases.
The success of the settlement depends, in part, upon the number and total
amount of claims filed and approved. The number of claimants who will seek
to participate in the settlement is unknown. As of January 1995 the court
advised that approximately 350,000 women had registered with the claims
office, and the registration deadline was extended to March 1, 1995.
However, since all women with implants were urged by the court to register,
the number of registrants will not indicate the number of women who have
filed or will file claims against the settlement funds.
The deadline for filing claims against the settlement's current disease
compensation fund passed on September 16, 1994. The court has not advised
the parties of the number of current disease claims but the indication from
the court is that the number is substantial. If the total amount of the
approved current claims exceeds certain levels, the settlement provides for
reduction of scheduled payments to women and the opportunity for claimants
to opt out of the settlement. If that occurs, the settlement also provides
that the parties shall consider changes in the settlement's terms and each
defendant will also have an opportunity to withdraw from the settlement.
While the Company did not expect to receive from the court definitive
information as to the total amount of approved current claims before late 1995,
the court has recently advised that it has commenced a random sampling of
claims with the objective of materially accelerating the availability of
information as to the likelihood and range of any such reduction in scheduled
payments.
In the fourth quarter of 1994, the Company recorded a special charge to
earnings of $750 million before taxes ($488 million after taxes) on account
of developments in this litigation, such as the opt outs by claimants. An
additional charge to earnings may be required as additional information and
contingencies related to the litigation become known or can be reasonably
estimated.
DES Litigation
--------------
The Company is a defendant in a number of actions brought against it and
other pharmaceutical companies in federal and state courts by the children
or grandchildren of women who ingested diethylstilbestrol (DES), a product
which had been, but is no longer, manufactured or sold by an affiliate of
the Company. While it is not possible to determine the outcome of these
actions, the Company believes that the ultimate disposition of these
matters will not have a material adverse effect on the Company's operating
results, liquidity or consolidated financial position.
Infant Formula Matters
----------------------
The Company, one of its subsidiaries and others are defendants in antitrust
actions in 19 states filed on behalf of purported statewide classes of
indirect purchasers of infant formula products and by the Attorneys General
of Mississippi and Texas alleging a conspiracy regarding pricing of infant
formula products and other violations of state antitrust or deceptive trade
practices laws and seeking treble damages, statutory and civil penalties
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and injunctive and other relief. Motions to dismiss the state court
actions in Colorado and Florida have been granted and plaintiffs have
appealed. In one of the Texas actions, the trial court's dismissal of an
amended class action complaint by indirect purchasers has been reversed and
that decision has been appealed to the Texas Supreme Court. In a Louisiana
action, a federal court's decision to remand the case has been appealed.
In addition, the State of Louisiana has filed a federal court action
against the Company and others asserting claims similar to those previously
asserted by the State of Florida and dismissed by the federal court in the
Northern District of Florida. The State of Louisiana's case has been
transferred for pre-trial purposes to the Northern District of Florida
where the original and first amended complaints were dismissed but
plaintiffs' motion to file a second amended complaint is pending.
Plaintiffs' motions for class certification were granted in Wisconsin and
Kansas. The Company and one of its subsidiaries have settled the claims of
the Nestle Food Company alleging that the Company, one of its subsidiaries
and others conspired to restrain competition in and maintain artificial
barriers to entry into the United States infant formula market and engaged
in other violations of federal and state antitrust or other laws. The
Nestle action continues against the remaining defendants. There are
pending investigations of infant formula pricing and marketing by five
state Attorneys General. The Canadian Bureau of Competition Policy has
commenced a civil and criminal inquiry into alleged anticompetitive
practices among the Company and certain other members of the Canadian
infant formula industry. The Company believes that the foregoing matters
are without merit and that their ultimate disposition will not have a
material adverse effect on the Company's operating results, liquidity or
consolidated financial position.
Pharmaceutical Pricing Litigation
---------------------------------
The Company, along with more than 30 other pharmaceutical manufacturers,
drug wholesalers and pharmacy benefit managers, is a defendant in over 63
actions brought by over 2,300 plaintiffs in various federal courts seeking
damages and injunctive relief under the federal antitrust laws for alleged
antitrust violations in the pricing and marketing of brand-name
prescription drugs. The federal court cases have been transferred for
pre-trial purposes to the United States District Court for the Northern
District of Illinois. These lawsuits are of three different varieties:
(1) individual actions by independent retail pharmacies; (2) class actions
by retail pharmacies seeking to represent a class comprised of those
alleged to be similarly situated; and (3) individual actions by large
retail pharmacy chains and supermarkets. The Court has denied motions by
the defendant manufacturers to dismiss and for judgment on the pleadings
and a motion by the defendant wholesalers for summary judgment. The Court
has certified a class consisting of all persons (other than defendants,
non-defendant wholesalers and certain others) who purchased brand-name
prescription drugs directly from any of the defendants during the period
from October 15, 1989, to the present. The defendants have entered into a
judgment sharing arrangement, which plaintiffs are seeking to invalidate.
The Court has set a trial date of February 5, 1996. Discovery is ongoing.
In addition, the Company, along with other pharmaceutical manufacturers,
wholesalers, certain pharmacy benefit managers and others, has been named
as a defendant in state court actions in California, Alabama, Wisconsin,
Washington and Minnesota. These actions seek damages and injunctive relief
under antitrust and other laws of the states in question for alleged
violations in the pricing of prescription drugs, in some cases including
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those not sold under brand names. The actions in Wisconsin and Minnesota
and several of the California actions are brought on behalf of purported
classes of retail pharmacies. The Alabama case is brought on behalf of
individual retail pharmacies. The Washington action and one of the
California actions are brought on behalf of purported classes of consumers.
The California actions have been consolidated in the Superior Court for
San Francisco. Defendants' demurrers in the California actions have been
denied. Discovery has commenced in some of these actions. Others are
still at the pleading stage. The Company believes that these actions are
without merit and that their ultimate disposition will not have a material
adverse effect on the Company's results of operations, liquidity or
consolidated financial position.
Securities Litigation
---------------------
The Company has entered into a settlement of a class action filed in the
United States District Court for the Southern District of New York alleging
violations of federal securities laws and regulations in connection with,
among other things, earnings projections. At a hearing on March 10, 1995,
the court approved the settlement, but has not yet entered the final order
and judgment. The settlement will not have a material adverse effect on the
Company's operating results, liquidity or consolidated financial position.
Environmental Matters
---------------------
The Company, together with others, is a party to, or otherwise involved in,
a number of proceedings brought by the Environmental Protection Agency or
comparable state agencies under the Comprehensive Environmental Response
Compensation and Liability Act (CERCLA or Superfund) or comparable state
laws directed at the cleanup of hazardous waste sites. While it is not
possible to predict with certainty the outcome of these cases, the Company
believes that the ultimate disposition of these matters will not have a
material adverse effect on the Company's operating results, liquidity or
consolidated financial position.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
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PART IA
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EXECUTIVE OFFICERS OF THE REGISTRANT
------------------------------------
The following are the executive corporate officers and the other executive
officers of the Registrant:
Positions and Offices Presently
Name Age Held With The Registrant
------------------------ --- ------------------------------------
Richard L. Gelb 70 Chairman of the Board, Director and
Chairman of the Executive Committee
Charles A. Heimbold, Jr. 61 President and Chief Executive Officer
and Director
Michael E. Autera 56 Executive Vice President and Director
Harrison M. Bains, Jr. 51 Treasurer and Vice President, Corporate
Staff
Samuel L. Barker, Ph.D. 52 President, Bristol-Myers Squibb U.S.
Pharmaceuticals
Stephen E. Bear 43 President, Worldwide Consumer Medicines
Andrew G. Bodnar, M.D. 47 President, Oncology/Immunology and
Worldwide Strategic Business
Development - Bristol-Myers Squibb
Pharmaceutical Group
Alice C. Brennan 42 Corporate Secretary and Vice President,
Corporate Staff
Jack M. Cooper 55 Vice President, Information Management,
Corporate Staff
Peter R. Dolan 39 President, Mead Johnson Nutritional
Group
Richard A. Druckman 55 Vice President, Strategic Planning,
Corporate Staff
Terence N. Furness 47 President, Zimmer, Inc.
John D. Glover 56 Vice President, Corporate Security,
Corporate Staff
Samuel A. Hamad 53 President, Bristol-Myers Squibb
Pharmaceuticals - Intercontinental
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Positions and Offices Presently
Name Age Held With The Registrant
------------------------ --- ------------------------------------
Thomas M. Hellman, Ph.D. 51 Vice President, Environmental Affairs,
Occupational Health and Safety,
Corporate Staff
E. Lynn Johnson 50 Senior Vice President, Corporate Staff
George P. Kooluris 50 Senior Vice President, Corporate
Development, Corporate Staff
Margaret E. Maruschak 48 Vice President, Issues Management,
Corporate Staff
John L. McGoldrick 54 General Counsel and Senior Vice
President, Corporate Staff
Michael F. Mee 52 Chief Financial Officer and Senior Vice
President, Corporate Staff
Leon E. Rosenberg, M.D. 62 President, Bristol-Myers Squibb
Pharmaceutical Research Institute
Stephen I. Sadove 43 President, Worldwide Clairol
Frederick S. Schiff 47 Controller and Vice President, Corporate
Staff
Eileen S. Silvers 46 Vice President, Taxes, Corporate Staff
John L. Skule 51 Vice President, Public Affairs,
Corporate Staff
Joseph G. Solari, Jr. 50 President, ConvaTec and President,
Bristol-Myers Squibb Medical Products
Group
Charles G. Tharp, Ph.D. 43 Senior Vice President, Human Resources,
Corporate Staff
Richard L. Thompson 50 Vice President, Government Affairs,
Corporate Staff
Wesley M. Thompson 53 President, Nutritional - Asia & Pacific
Rim, Mead Johnson Nutritional Group
Joachim H. von Roy 49 President, Bristol-Myers Squibb
Pharmaceuticals - Europe
Kenneth E. Weg 56 President, Bristol-Myers Squibb
Pharmaceutical Group
11
<PAGE>
Persons who hold titles as elected corporate officers of the Registrant
were last elected or reelected to the office held at the general
election of officers by the Registrant's Board of Directors on May 3, 1994.
Officers of the Registrant serve in such capacity at the pleasure of the
Board of Directors of the Registrant.
RICHARD L. GELB - From 1972 to 1993, Chief Executive Officer, the
Registrant. Mr. Gelb has been Chairman of the Board of Directors of the
Registrant since 1976. Mr. Gelb has been a director of the Registrant
since 1960 and Chairman of the Executive Committee of the Board of
Directors of the Registrant since 1976.
CHARLES A. HEIMBOLD, JR. - From 1989 to 1992, Executive Vice President
of the Registrant. Mr. Heimbold has been a director of the Registrant
since 1989, President of the Registrant since 1992 and the Chief Executive
Officer of the Registrant since 1994.
MICHAEL E. AUTERA - From 1977 to 1994, Chief Financial Officer of the
Registrant. Mr. Autera has been a director of the Registrant since 1991
and Executive Vice President of the Registrant since 1989.
HARRISON M. BAINS, JR. - Mr. Bains has been Treasurer and Vice
President, Corporate Staff of the Registrant since 1988.
SAMUEL L. BARKER, Ph.D. - From 1989 to 1990, Vice President, Pacific,
Asia & Middle East Area, Squibb Intercontinental, a division of the
Registrant. From 1990 to 1991, Vice President, Asia/Pacific, from 1991 to
1992, President, Bristol-Myers Squibb Pharmaceuticals - Intercontinental, a
division of the Registrant, and from 1992 to 1994, President, Bristol-Myers
Squibb U.S. Pharmaceutical Division, a division of the Registrant. Dr.
Barker has been President, U.S. Pharmaceuticals of the Bristol-Myers Squibb
Pharmaceutical Group, a division of the Registrant, since 1994.
STEPHEN E. BEAR - From 1988 to 1991, President, Bristol-Myers
Products, a division of the Registrant. From 1988 to 1990, Vice President
of the Registrant. From 1991 to 1993, Senior Vice President, Strategic
Planning, Bristol-Myers Squibb Consumer Products Group, a division of the
Registrant, and from 1993 to 1994, Executive Vice President of the
Bristol-Myers Squibb Consumer Products Group. Mr. Bear has been President,
Worldwide Consumer Medicines, a division of the Registrant, since 1994.
ANDREW G. BODNAR, M.D. - From 1988 to the present, Associate
Physician, Massachusetts General Hospital, a health care facility. From
1989 to 1990, Senior Vice President and Chief Operating Officer, The Squibb
Institute for Medical Research, a division of the Registrant. During 1990,
Senior Vice President, Administration and Planning, Bristol-Myers Squibb
Pharmaceutical Research Institute, a division of the Registrant. From 1990
to 1993, Senior Vice President, Strategic Management, Bristol-Myers Squibb
Pharmaceutical Group, a division of the Registrant, and from 1993 to 1994,
President, Bristol-Myers Squibb Specialty Pharmaceuticals, Bristol-Myers
Squibb Pharmaceutical Group, a division of the Registrant. During 1994,
President, Oncology/Diagnostics and Worldwide Strategic Business
Development, Bristol-Myers Squibb Pharmaceutical Group, a division of the
Registrant. Dr. Bodnar has been President, Oncology/Immunology and
Worldwide Strategic Business Development, Bristol-Myers Squibb
Pharmaceutical Group, a division of the Registrant, since 1994.
12
<PAGE>
ALICE C. BRENNAN - From 1988 to 1992, Manager, Agricultural
Section-Patent Law Department and from 1992 to 1994, Secretary of American
Cyanamid Company, a pharmaceutical and agricultural company. Ms. Brennan
has been Vice President and Corporate Secretary, Corporate Staff of the
Registrant since 1994.
JACK M. COOPER - From 1990 to 1995, Corporate Vice President and Chief
Information Officer, The Seagram Company, Ltd., a premium beverage company.
Mr. Cooper has been Vice President, Information Management, Corporate Staff
of the Registrant since March 1995.
PETER R. DOLAN - From 1990 to 1991, Senior Vice President, Marketing
and Sales, from 1991 to 1992, Senior Vice President, Marketing, Sales and
Operations and from 1992 to 1993, Executive Vice President, Bristol-Myers
Products, a division of the Registrant. From 1993 to January 1995,
President, Bristol-Myers Products, a division of the Registrant. Mr. Dolan
has been President, Mead Johnson Nutritional Group, a division of the
Registrant, since January 1995.
RICHARD A. DRUCKMAN - From 1990 to 1991, Senior Vice President,
Strategic Planning and Quality/Productivity, Bristol-Myers Squibb
Pharmaceutical Group, a division of the Registrant. Mr. Druckman has been
Vice President, Strategic Planning, Corporate Staff of the Registrant since
1991.
TERENCE N. FURNESS - From 1988 to 1991, President, Medical Gloves
Division, Becton Dickinson and Company, a medical technology company, and
from 1991 to 1995, President, Smith & Nephew Medical Products Group. Mr.
Furness has been President of Zimmer, Inc., a subsidiary of the Registrant,
since March 1995.
JOHN D. GLOVER - Mr. Glover has been Vice President, Corporate
Security, Corporate Staff of the Registrant since 1989.
SAMUEL A. HAMAD - From 1989 to 1990, Senior Vice President,
Bristol-Myers Squibb Pharmaceutical Group, a division of the Registrant,
and from 1990 to 1992, President, Bristol-Myers Squibb Pharmaceuticals -
Northern Europe, a division of the Registrant. Mr. Hamad has been
President, Bristol-Myers Squibb Pharmaceuticals - Intercontinental, a
division of the Registrant, since 1992.
THOMAS M. HELLMAN, Ph.D. - From 1989 to 1991, Corporate Manager,
Environmental Health and Safety Operations, General Electric Company, a
diversified technology, manufacturing and services company. Dr. Hellman
has been Vice President, Environmental Affairs, Occupational Health and
Safety, Corporate Staff of the Registrant since 1991.
E. LYNN JOHNSON - From 1989 to 1991, Senior Vice President, Human
Resources and Administration, Bristol-Myers Squibb Pharmaceutical Group, a
division of the Registrant, and from 1991 to 1993, Senior Vice President,
Human Resources, Corporate Staff of the Registrant. From 1993 to January
1995, President, Mead Johnson Nutritional Group, a division of the
Registrant. Mr. Johnson has been a Senior Vice President, Corporate Staff
of the Registrant since January 1995.
13
<PAGE>
GEORGE P. KOOLURIS - From 1980 to 1993, Vice President, Corporate
Development, Corporate Staff of the Registrant. Mr. Kooluris has been
Senior Vice President, Corporate Development, Corporate Staff of the
Registrant since 1994.
MARGARET E. MARUSCHAK - Ms. Maruschak has been Vice President, Issues
Management, Corporate Staff of the Registrant since 1989.
JOHN L. McGOLDRICK - From 1974 to 1994, Partner, McCarter & English,
Attorneys At Law. Mr. McGoldrick has been General Counsel and Senior Vice
President, Corporate Staff of the Registrant since January 1995.
MICHAEL F. MEE - From 1985 to 1990, Vice President of Finance and
Chief Financial Officer and from 1987 to 1990, director of Norton Company,
a manufacturer of abrasives and engineering materials. From 1990 to 1992,
Executive Vice President, Finance and Chief Financial Officer, from 1990 to
1993, director and from 1992 to 1993, Chairman of the Board and Chief
Financial Officer of Wang Laboratories, Inc., a provider of computer-based
information processing products and services. Mr. Mee has been Chief
Financial Officer and Senior Vice President, Corporate Staff of the
Registrant since 1994.
LEON E. ROSENBERG, M.D. - From 1980 to 1991, C.N.H. Long Professor of
Human Genetics and from 1984 to 1991, Dean, Yale University School of
Medicine, an educational institution. Dr. Rosenberg has been President,
Bristol-Myers Squibb Pharmaceutical Research Institute, a division of the
Registrant, since 1991.
STEPHEN I. SADOVE - From 1989 to 1991, Executive Vice President and
General Manager, Desserts Division, General Foods USA, General Foods
Corporation, a diversified consumer products company. From 1991 to 1994,
President of Clairol Incorporated, a subsidiary of the Registrant. Mr.
Sadove has been President, Worldwide Clairol, a division of the Registrant,
since 1994.
FREDERICK S. SCHIFF - From 1987 to 1990, Assistant Controller,
Corporate Staff, the Registrant. Mr. Schiff has been Controller and Vice
President, Corporate Staff of the Registrant since 1990.
EILEEN S. SILVERS - From 1983 to 1994, Partner, Tax Department of
Paul, Weiss, Rifkind, Wharton & Garrison, Attorneys At Law. Ms. Silvers
has been Vice President, Taxes, Corporate Staff of the Registrant since
1994.
JOHN L. SKULE - From 1990 to 1991, Vice President, Industry & Public
Affairs, Bristol-Myers Squibb Pharmaceutical Group, a division of the
Registrant. From 1991 to 1993, Vice President, Corporate Affairs, American
Home Products Corporation, a pharmaceutical and consumer products company.
Mr. Skule has been Vice President, Public Affairs, Corporate Staff of the
Registrant since 1993.
JOSEPH G. SOLARI, JR. - During 1989, President, Squibb Medical
Products, a division of the Registrant. Mr. Solari has been President,
Bristol-Myers Squibb Medical Products Group, a division of the Registrant,
since 1990 and President, ConvaTec, a division of the Registrant, since
1991.
14
<PAGE>
CHARLES G. THARP, Ph.D. - From 1987 to 1990, Director, Compensation
and Benefits, Corporate Staff, the Registrant. From 1990 to 1991, Vice
President, Compensation and Human Resource Development, Corporate Staff of
the Registrant. From 1991 to 1993, Vice President, Compensation, Benefits
and Human Resource Development, Corporate Staff, the Registrant. Dr. Tharp
has been Senior Vice President, Human Resources, Corporate Staff of the
Registrant since 1993.
RICHARD L. THOMPSON - Mr. Thompson has been Vice President, Government
Affairs, Corporate Staff of the Registrant since 1989.
WESLEY M. THOMPSON - From 1990 to 1991, President, Japan,
Bristol-Myers Squibb Consumer Products Group - International, a division of
the Registrant, and from 1992 to 1994, President, Bristol-Myers Squibb
Consumer Products Group - International, a division of the Registrant. Mr.
Thompson has been President, Consumer & Nutritional - Asia & Pacific Rim,
Mead Johnson Nutritional Group, a division of the Registrant, since 1994.
JOACHIM VON ROY - From 1988 to 1990, President, Squibb, Central Europe
Region, a division of the Registrant, and from 1990 to 1993, President,
Bristol-Myers Squibb Pharmaceuticals - Central Europe, a division of the
Registrant. Mr. von Roy has been President, Bristol-Myers Squibb
Pharmaceuticals - Europe, a division of the Registrant, since 1993.
KENNETH E. WEG - From 1989 to 1990, President, Squibb U.S. and
Bristol-Myers Squibb International Pharmaceutical Group, a division of the
Registrant, and from 1990 to 1991, President, Bristol-Myers Squibb
International Pharmaceutical Group, a division of the Registrant. From
1991 to 1993, President, Bristol-Myers Squibb Pharmaceutical Operations, a
division of the Registrant. Mr. Weg has been President, Bristol-Myers
Squibb Pharmaceutical Group, a division of the Registrant, since 1993.
In addition to the positions and offices heretofore listed, all of the
foregoing executive corporate officers and other executive officers of the
Registrant are directors and/or officers of one or more affiliates of the
Registrant, with the exception of Messrs. Autera, Cooper, Druckman, Furness,
Glover, Heimbold, Hellman, Johnson and Skule and Ms. Maruschak.
15
<PAGE>
PART II
-------
Item 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED
STOCKHOLDER MATTERS.
MARKET PRICES
-------------
Bristol-Myers Squibb common and preferred stocks are traded on the New York
Stock Exchange and the Pacific Stock Exchange (symbol: BMY). A quarterly
summary of the high and low market prices is presented below:
1994 1993
------------------ -------------------
High Low High Low
Common: ------- -------- ------- -------
First Quarter $59 7/8 $50 $67 1/4 $52 7/8
Second Quarter 56 1/4 50 1/8 62 3/8 56 1/4
Third Quarter 58 3/4 51 1/8 60 1/8 50 7/8
Fourth Quarter 61 55 3/4 62 1/4 54 3/4
1994 1993
------------------ -------------------
High Low High Low
Preferred: ------- -------- ------- -------
First Quarter $244 $244 $271 $230
Second Quarter 232 214 No Trades
Third Quarter 232 220 236 227 1/2
Fourth Quarter 262 231 No Trades
HOLDERS OF COMMON STOCK
-----------------------
The approximate number of record holders of common stock at December 31,
1994 was 163,372.
The number of record holders is based upon the actual number of holders
registered on the books of Bristol-Myers Squibb at such date and does not
include holders of shares in "street names" or persons, partnerships,
associations, corporations or other entities identified in security
position listings maintained by depository trust companies.
DIVIDENDS
---------
Dividend payments per share in 1994 and 1993 were:
Common Preferred
--------------- -----------------
1994 1993 1994 1993
----- ----- ----- -----
First Quarter $ .73 $ .72 $ .50 $ .50
Second Quarter .73 .72 .50 .50
Third Quarter .73 .72 .50 .50
Fourth Quarter .73 .72 .50 .50
----- ----- ----- -----
Year $2.92 $2.88 $2.00 $2.00
===== ===== ===== =====
16
<PAGE>
Item 6. SELECTED FINANCIAL DATA.
FIVE-YEAR FINANCIAL SUMMARY
---------------------------
OPERATING RESULTS
-----------------
(dollars in millions,
except per share amounts) 1994 1993 1992 1991 1990
------- ------- ------- ------- ------
Net Sales $11,984 $11,413 $11,156 $10,571 $9,741
------- ------- ------- ------- ------
Expenses:
Cost of products sold 3,122 3,029 2,857 2,717 2,665
Marketing, selling and
administrative 3,166 3,098 3,075 2,946 2,717
Advertising and product
promotion 1,367 1,255 1,291 1,263 1,189
Research and development 1,108 1,128 1,083 983 873
Other (*) 666 332 863 (122) (136)
------- ------- ------- ------- ------
9,429 8,842 9,169 7,787 7,308
------- ------- ------- ------- ------
Earnings from Continuing
Operations Before
Income Taxes 2,555 2,571 1,987 2,784 2,433
Provision for income taxes 713 612 449 793 742
------- ------- ------- ------- ------
Earnings from Continuing
Operations $ 1,842 $ 1,959 $ 1,538 $ 1,991 $1,691
======= ======= ======= ======= ======
Dividends paid on common
and preferred stock $ 1,485 $ 1,485 $ 1,428 $ 1,249 $1,116
Earnings from continuing
operations per common
share (*) 3.62 3.80 2.97 3.82 3.22
Dividends per common share 2.92 2.88 2.76 2.40 2.12
(*) Includes a special charge for pending and future product liability
claims of $750 million before taxes, $488 million after taxes, or $.96
per share, in 1994 and $500 million before taxes, $310 million after
taxes, or $.60 per share, in 1993. In 1992, includes a provision for
restructuring of $890 million before taxes, $570 million after taxes,
or $1.10 per share.
17
<PAGE>
Item 6. SELECTED FINANCIAL DATA. (con't.)
FIVE-YEAR FINANCIAL SUMMARY
---------------------------
FINANCIAL POSITION AT DECEMBER 31
---------------------------------
(dollars in millions) 1994 1993 1992 1991 1990
------- ------- ------- ------ ------
Current assets $ 6,710 $ 6,570 $ 6,621 $5,567 $5,670
Property, plant and
equipment 3,666 3,374 3,141 2,936 2,631
Total assets 12,910 12,101 10,804 9,416 9,215
Current liabilities 4,274 3,065 3,300 2,752 2,821
Long-term debt 644 588 176 135 231
Total liabilities 7,206 6,161 4,784 3,621 3,797
Stockholders' equity 5,704 5,940 6,020 5,795 5,418
Average common shares
outstanding (in millions) 509 515 518 521 525
Reference is made to Note 2 Special Charge, Note 3 Acquisitions and
Divestitures, Note 4 Provision for Restructuring, Note 14 Postretirement
Benefit Plans Other Than Pensions and Note 18 Contingencies, appearing in
the Notes to Consolidated Financial Statements included in Part II, Item 8
of this Form 10-K Annual Report.
18
<PAGE>
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
SUMMARY
-------
During 1994, Bristol-Myers Squibb's worldwide sales increased 5% over the
prior year to $12.0 billion. Domestic sales increased 4% to $7.0 billion,
while international sales increased 7% to $5.0 billion.
Excluding the 1994 and 1993 special charges recorded in connection with
pending and future breast implant product liability claims, earnings before
income taxes increased 8% to $3,305 million in 1994, while net earnings
increased 3% to $2,330 million and earnings per share increased 4% to $4.58
from $4.40 in 1993. Including these charges, earnings before income taxes
were $2,555 million in 1994 and $2,571 million in 1993, net earnings were
$1,842 million in 1994 and $1,959 million in 1993 and earnings per share
were $3.62 in 1994 and $3.80 in 1993.
During 1994 and early 1995, the Company made significant external
investments to build sales and earnings. The acquisition of the remaining
ownership interest in the UPSA Group, the leading maker and marketer of
analgesics in France and Belgium and a world leader in effervescent
technology, was completed. The Company also acquired Matrix Essentials,
Inc., the leading manufacturer in North America of professional hair care
and beauty products sold exclusively in beauty salons, and equity stakes in
Azupharma GmbH, one of Germany's major generic pharmaceutical companies,
and Cadus Pharmaceutical, a biotechnology company that develops novel drug
screening techniques. In January 1995, the Company completed the
acquisition of Calgon Vestal Laboratories, a skin care and infection
control products business.
Bristol-Myers Squibb's financial position remains strong. At December 31,
1994, the Company held $2.4 billion in cash, time deposits and marketable
securities. Cash provided by operating activities totaled $2.3 billion and
continued to be the primary source to finance research, new product
development and introductions, capital spending and working capital needs.
It also was used to pay dividends of nearly $1.5 billion in 1994.
Dividends per common share were $2.92 in 1994, increasing from $2.88 per
share paid in 1993. In December 1994, an additional dividend increase was
announced, with a 1995 indicated annual payment of $2.96. With this 1995
annual payment, Bristol-Myers Squibb dividends will have increased at a
compound annual growth rate of 13% over the past 10 years. Bristol-Myers
Squibb's strong financial position is evidenced further by its triple A
credit rating, substantial unused borrowing capacity and high return on
equity.
NET SALES AND EARNINGS
----------------------
Worldwide sales increased 5% in 1994 to $12.0 billion, compared to
increases of 2% and 6% in 1993 and 1992, respectively. Volume growth was
the primary contributor to the increase in sales in 1994, while price
increases contributed 1% to growth in the U.S. and on a worldwide basis.
Exchange rate fluctuations had no effect on total sales growth for the
year. In 1993, the 2% increase in sales reflected a 3% increase due to
volume, a 2% increase due to pricing, offset in part by a 3% decrease due
to the unfavorable effect of foreign currency translation. Domestic sales
increased 4% in 1993 compared to 1% in 1992, while international sales
remained constant in 1993 and increased 12% in 1992.
19
<PAGE>
The Company previously reported its agreement to settle pending and future
breast implant product liability claims (related to a previously
discontinued business of a subsidiary) brought against it, its Medical
Engineering Corporation subsidiary, and certain other subsidiaries. The
Company recorded a charge in 1993 of $500 million before taxes, $310
million after taxes, or $.60 per share. The charge consisted of $1.5
billion in anticipation of its share of the pending settlement and costs of
the litigation, offset by expected insurance proceeds of $1 billion.
Various events occurred in 1994, including a number of claimants opting out
of the settlement (see Notes 2 and 18 to the financial statements). Based
upon preliminary analyses of the number of such opt outs and of other
issues, in the fourth quarter of 1994 the Company recorded a special charge
to earnings of $750 million before taxes, $488 million after taxes, or $.96
per share.
As a result of these charges, net earnings were $1,842 million, or $3.62
per share, in 1994 and $1,959 million, or $3.80 per share, in 1993. In the
fourth quarter of 1992, a charge of $890 million before taxes, $570 million
after taxes, or $1.10 per share, was recorded in connection with various
restructuring actions. Earnings from continuing operations were $1,538
million, or $2.97 per share, in 1992. Excluding the charges, net earnings
were $2,330 million, or $4.58 per share, in 1994 and $2,269 million, or
$4.40 per share, in 1993, and earnings from continuing operations were
$2,108 million, or $4.07 per share, in 1992.
The effective income tax rate on earnings before income taxes was 27.9% in
1994 compared to 23.8% and 22.6% in 1993 and 1992, respectively. Excluding
the charges, the effective income tax rate on earnings before income taxes
was 29.5% in 1994, 26.1% in 1993 and 26.7% in 1992. The higher 1994
effective income tax rate resulted from the curtailment of certain tax
benefits from Puerto Rico operations, enacted in the Omnibus Budget
Reconciliation Act of 1993.
EXPENSES
--------
Total costs and expenses as a percentage of sales, excluding the charges,
were 72.4% in 1994 compared to 73.1% in 1993 and 74.2% in 1992. As a
percentage of sales, cost of products sold decreased to 26.1% in 1994 from
26.5% in 1993 due to favorable product mix and the divestiture of
businesses with higher cost of sales. In 1993, cost of products sold
increased as a percentage of sales from 25.6% in 1992 primarily as a result
of higher manufacturing costs of newer pharmaceutical products.
Marketing, selling and administrative expenses, as a percentage of sales,
decreased to 26.4% in 1994 from 27.1% in 1993 and 27.6% in 1992 primarily
as a result of reductions in selling expenses and the Company's ongoing
commitment to contain administrative costs.
Advertising and promotion expenses in support of new and existing products
increased to $1,367 million in 1994 from $1,255 million in 1993 primarily
as a result of increases in the toiletries and beauty aids segment, due to
the addition of Matrix, and in the pharmaceutical products segment, in
preparation for the launches of certain products. In 1993, advertising and
promotion expenses decreased from 1992 levels due to lower spending in the
nonprescription health and pharmaceutical products segments, offset in part
by increased spending in the toiletries and beauty aids segment.
20
<PAGE>
The Company's investment in research and development in 1994 totaled $1,108
million, which approximated 1993 and 1992 levels. The high level of
spending reflects the Company's continued commitment to research over a
broad range of therapeutic areas and clinical development in support of
newer products. Over the last 10 years, research and development expenses
increased at a compound annual growth rate of 13%. In 1994, research and
development spending dedicated to the discovery and development of
pharmaceutical products was 13.6% of pharmaceutical sales compared to 14.9%
and 14.8% in 1993 and 1992, respectively.
INDUSTRY SEGMENTS
-----------------
By the end of 1994, Bristol-Myers Squibb had 26 products with more than
$100 million in annual sales, including products from all four industry
segments. In general, the business of the Company's industry segments is
not seasonal.
Sales in the Pharmaceutical Products Segment, which represents the largest
segment at 58% of total company sales, increased 7% in 1994 to $6,970
million. Volume growth was the primary contributor to this increase while
price increases had only a 1% effect. Exchange rate fluctuations had no
effect on the segment's sales growth for the year. Domestic and
international sales increased 9% and 4%, respectively, primarily due to
volume growth. Sales of cardiovascular drugs, the largest product group in
the segment at $2.8 billion, increased 8%. Captopril, an angiotensin
converting enzyme (ACE) inhibitor and the Company's largest selling
product, is primarily sold under the trademark CAPOTEN*. In the U.S., the
expiration date of the CAPOTEN* patent was redefined by legislation
implementing the GATT treaty to February 1996. Due to questions
surrounding the implementation of the GATT legislation, the effect of the
new patent expiration date on the Company's overall performance is
currently being evaluated. In Germany, the patent expiration for CAPOTEN*
was February 1995. Sales of captopril increased 4% in 1994 to $1.5 billion
($581 million in the U.S.) benefiting from new indications for the
treatment of diabetic nephropathy and left ventricular dysfunction.
PRAVACHOL*, the Company's largest selling cholesterol-lowering agent with
sales exceeding $640 million, and MONOPRIL*, a second generation ACE
inhibitor with once-a-day dosage, performed well, with good volume growth
in the U.S. and in overseas markets. Sales of the Company's
anti-infectives decreased 2% to $1.5 billion as increases in sales of
CEFZIL*, an oral cephalosporin used in the treatment of respiratory
infections, and introductory sales of ZERIT*, the Company's new
antiretroviral drug approved in the U.S. in June 1994, were more than
offset by declines in sales of AZACTAM*, VIDEX*, AMIKIN*, which is
experiencing generic competition, and in broad spectrum penicillins. In
the Company's line of anti-cancer drugs, sales increased 13% to $1.3
billion, strengthening the Company's leadership position in cancer therapy.
Sales of TAXOL* (paclitaxel), the Company's newest anti-cancer agent, were
strong. In April 1994, TAXOL* received clearance in the U.S. for use in
the treatment of breast cancer after failure of combination chemotherapy
for metastatic disease or relapse within six months of adjuvant
chemotherapy. In late 1992, TAXOL* was initially cleared in the U.S. and
Canada for treatment of patients with ovarian cancer whose first-line or
subsequent chemotherapy has failed, and, during 1993 and 1994, TAXOL*
received clearance for marketing in a number of countries in Europe, Latin
America and the Pacific area. Sales of PLATINOL* and PARAPLATIN* also
increased. These increases were partially offset by decreases in sales of
VEPESID* (the patent for which expired in the U.S. in November 1993).
21
<PAGE>
Sales of central nervous system drugs increased 17% primarily due to growth
of STADOL NS*, a prescription nasal spray analgesic, and BUSPAR*, the
Company's novel anti-anxiety agent. Dermatological drug sales increased
with the introduction of DOVONEX*, a vitamin D3 analogue for the treatment
of moderate psoriasis. In July 1994, the Company sold Squibb Diagnostics,
its contrast media and radiopharmaceuticals businesses, to Bracco S.p.A.
The Company will continue manufacturing certain diagnostic products,
including ProHance and Isovue, and nuclear medicine products. The Company
also will act as Bracco's distributor in Canada.
In December 1994, the Company received FDA approval to market SERZONE*, a
new antidepressant. It is expected that Glucophage, the Company's new oral
anti-diabetes agent for Type II non-insulin dependent diabetes, a product
licensed from the French company Lipha, will be marketed in 1995.
In 1993, pharmaceutical products segment sales increased 3% with a 5%
increase due to volume, a 1% increase due to pricing and a 3% decrease due
to the unfavorable effect of foreign currency translation. Increases in
sales of PRAVACHOL*, MONOPRIL*, CEFZIL*, VEPESID* and BUSPAR* and
introductory sales of TAXOL* were offset in part by decreases in sales of
CAPOTEN*, CORGARD* and AMIKIN*. In 1992, sales in the segment increased 7%
primarily as a result of increased cardiovascular, anti-infective,
anti-cancer and central nervous system drug sales.
Operating profit margin in 1994 of 32.6% remained relatively constant with
the 32.7% reported in the prior year. In 1993, operating profit margin
increased to 32.7% from 31.0% in 1992, excluding the restructuring charge.
The increase in 1993 resulted from reductions in selling and advertising
expenses, offset in part by higher manufacturing costs of newer
pharmaceutical products.
In the Medical Devices Segment, sales of $1,685 million remained relatively
constant with prior year levels. Excluding the sales of Edward Weck
Incorporated, which was divested in December 1993, and Xomed-Treace, Inc.,
which was divested in April 1994, sales increased 6%, reflecting a 4%
increase due to volume, a 1% increase due to pricing and a 1% increase due
to the favorable effect of foreign currency translation. Accordingly,
domestic sales increased 1%, while international sales increased 12%.
Worldwide sales of prosthetic implants, which were adversely affected by
competitive pressures, increased 2% with growth of the Insall/Burstein II
Modular Total Knee System, the MG II* Total Knee System and the CENTRALIGN*
Precoat Hip Prosthesis. Sales of ostomy care products increased 9% over
the prior year, with volume growth of the ACTIVE LIFE/COLODRESS* and the
SUR-FIT/COMBIHESIVE* product lines in the U.S. and in international
markets. As a result of continued product enhancements, the Company is the
worldwide market share leader in sales of ostomy care products. Sales of
wound care products increased 18% due to the ongoing success of the
DUODERM* product line. In January 1995, the Company completed the
acquisition of Calgon Vestal Laboratories, a skin care and infection
control products business.
In 1993, worldwide sales of medical devices increased 2% as a result of a
3% increase due to pricing, a 1% increase due to volume and a 2% decrease
due to the unfavorable effect of foreign currency translation. The sales
growth primarily resulted from increased sales of prosthetic implants,
ostomy and wound care products. In 1992, sales in the segment increased 7%
primarily due to increased sales of prosthetic implants, ostomy, wound care
and arthroscopy products, offset in part by volume declines due to product
22
<PAGE>
lines divested in 1991.
Operating profit margin in the medical devices segment was 29.5% in 1994,
28.1% in 1993 and 27.6% in 1992, excluding the charges. The increase in
1994 resulted from declines in selling expenses as a percentage of sales,
while the increase in 1993 resulted from declines in selling and
administrative expenses. As a result of the special charges recorded in
connection with pending and future breast implant product liability claims
and related expenses, the medical devices segment recorded operating losses
of $253 million in 1994 and $24 million in 1993.
Sales in the Nonprescription Health Products Segment increased 4% to $2,043
million with a 3% increase due to pricing and a 1% increase due to volume.
Exchange rate fluctuations had no effect on the segment's sales growth for
the year. Sales of infant formulas increased 3% over prior year levels due
to ENFAMIL*, the Company's leading routine infant formula, LACTOFREE*, a
milk-based, lactose-free infant formula, and introductory sales of NEXT
STEP* Toddler Formula, a formula intended for toddlers up to 18 months and
beyond. During 1994, several new contracts under the federal government's
Women, Infants and Children (WIC) program became effective. Sales of
analgesics increased 10% on a worldwide basis with the addition of
EFFERALGAN*, ASPIRINE UPSA* and DAFALGAN* from UPSA, enhancing the
Company's participation in Europe's growing self-medication marketplace.
Sales of analgesics also reflected increased sales of EXCEDRIN*, the
Company's largest selling analgesic in the U.S., and increased sales of
BUFFERIN* in Japan.
In 1993, worldwide sales of nonprescription health products remained at
prior year levels as domestic declines, primarily in sales of EXCEDRIN* and
BUFFERIN* analgesics which were adversely affected by increased competition
in the U.S. market, were offset by international increases, primarily in
sales of BUFFERIN* analgesics and ISOCAL* adult nutritional products. In
1992, sales in the segment increased 3% as a result of international sales
growth of ENFAMIL*, ENFAPRO* and PROSOBEE* infant formulas and BUFFERIN*
analgesics.
Operating profit margin was 22.3% in 1994 compared to 23.6% in 1993
partially as a result of higher manufacturing costs. In 1993, operating
profit margin of 23.6% remained relatively unchanged from the 23.7%
reported in 1992, excluding the restructuring charge.
Sales in the Toiletries and Beauty Aids Segment increased 4% in 1994 to
$1,286 million, reflecting a 3% increase due to pricing and a 1% increase
due to volume. Exchange rate fluctuations had no effect on the segment's
sales growth for the year. Domestic sales increased 8%, while
international sales decreased 2%. Sales of the Company's haircoloring
products reflected strong growth, increasing 16% primarily due to NICE 'N
EASY*, LASTING COLOR BY LOVING CARE* and ULTRESS*, as well as introductory
sales of NATURAL INSTINCTS*, launched in the U.S. in the latter part of
1994. Hair care product sales benefited from the SYSTEME BIOLAGE*,
VAVOOM!* and MATRIX ESSENTIALS* lines from Matrix Essentials, Inc.
Increases in sales of the Company's skin care products primarily resulted
from the introduction of several new products in the SEA BREEZE* line in
the U.S., as well as the addition of the MATRIX* skin care line. These
increases were partially offset by decreased sales of BAN* anti-perspirants
and deodorants, due to increased competition in the U.S., and the
divestiture of the Clairol beauty appliance business in December 1993.
23
<PAGE>
In 1993, sales in the toiletries and beauty aids segment increased 1% with
a 2% increase due to pricing, a 1% increase due to volume and a 2% decrease
due to the unfavorable effect of foreign currency translation. The sales
growth was primarily due to introductory sales of GLINTS* Conditioning
Color Enhancer, LASTING COLOR BY LOVING CARE* and BRIGHTS BY NICE 'N EASY*
haircoloring products, as well as sales from Laboratori Guieu, an Italian
over-the-counter skin care company acquired in early 1993. In 1992, sales
in the segment increased 1% as increased sales of anti-perspirants and
haircoloring products were partially offset by declines in beauty
appliances and hair care products.
Operating profit margin in 1994 was 13.1%, relatively unchanged from the
13.2% reported in 1993 and the 13.1% reported in 1992, after adjusting for
the restructuring charge.
GEOGRAPHIC AREAS
----------------
In 1994, sales in the U.S. increased 4% primarily due to strong
pharmaceutical sales and sales from Matrix, offset in part by volume
declines due to the divestiture of certain businesses in 1993 and early
1994. Excluding the special charges, operating profit margin increased to
30.1% in 1994 from 30.0% in 1993 primarily as a result of declines in
selling expenses. In 1993, sales in the U.S. increased 4% primarily as a
result of gains in the pharmaceutical products segment. Operating profit
margin, after adjusting for the charges, increased to 30.0% in 1993 from
28.0% in 1992 due to declines in selling and administrative expenses,
offset in part by increased manufacturing costs of newer pharmaceutical
products.
International sales increased 7% in 1994, while in 1993 international sales
remained at prior year levels. Excluding the effect of foreign currency
translation, international sales increased 6% in 1994 and 5% in 1993.
Sales in Europe, Mid-East and Africa, net of inter-area sales, increased 6%
in 1994 primarily due to sales from UPSA, increased sales of CAPOTEN* and
MONOPRIL* and introductory sales of TAXOL*. Operating profit margin
increased to 21.5% from 19.3% in 1993 primarily due to reduced operating
costs in the pharmaceutical products segment. In 1993, sales in Europe,
Mid-East and Africa decreased 8% as a result of unfavorable foreign
currency translation and lower pharmaceutical sales in certain European
countries due in part to government cost-containment measures. Operating
profit margin was 19.3% compared to 21.1% in 1992, excluding the
restructuring charge.
Sales in Other Western Hemisphere countries increased 6% in 1994 primarily
due to increased sales of anti-infective and cardiovascular drugs, strong
sales of haircoloring products and the successful launch of TAXOL* in a
number of countries, including Brazil and Argentina. Operating profit
margin increased to 20.5% from 20.0% in 1993 primarily due to improvement
in the pharmaceutical products segment. In 1993, sales in Other Western
Hemisphere countries increased 5% reflecting increased sales of
anti-infectives, cardiovasculars, haircoloring products and
anti-perspirants in Latin America. Operating profit margin was 20.0% in
1993, relatively unchanged from 20.1% reported in 1992 after adjusting for
the restructuring charge.
Sales in the Pacific area increased 9% in 1994 with favorable foreign
currency translation, increased sales of BUFFERIN* analgesics and ENFAPRO*
24
<PAGE>
follow-on formulas, as well as the successful launch of SEA BREEZE*
shampoos and conditioners in Japan. Operating profit margin was 13.6%
compared to 15.8% in 1993 partially due to declines in the medical devices
and nonprescription health products segments. In 1993, sales in the
Pacific area increased 15% as a result of favorable foreign currency
translation and increased sales of prosthetic implants, infant formulas and
anti-cancer drugs. Operating profit margin increased to 15.8% in 1993 from
12.6% in 1992, excluding the restructuring charge, primarily as a result of
improvements in the pharmaceutical products and medical devices segments.
FINANCIAL POSITION
------------------
The Company considers cash, time deposits and marketable securities as its
principal measures of liquidity. These items remained at a high level
totaling $2.4 billion at December 31, 1994 compared to $2.7 billion and
$2.4 billion at December 31, 1993 and 1992, respectively. Working capital
also was strong, totaling $2.4 billion at December 31, 1994, although
decreasing from 1993 and 1992 levels. The decrease in working capital
primarily resulted from an increase in short-term borrowings issued in
connection with the UPSA acquisition and an increase in product liability.
Cash, time deposits and marketable securities and the conversion of other
working capital items are expected to be adequate to fund the operations of
the Company.
In order to mitigate the effect of foreign currency risk, the Company
engages in hedging activities. The impact of such hedges on the Company's
results of operations and on its financial position is explained further in
Note 12 to the financial statements.
Internally generated cash provided by operations remained strong and
continued to be the Company's primary source of funds to finance operating
needs, to pay dividends of nearly $4.4 billion over the past three years
and to finance expenditures for new plant and equipment. As part of the
Company's ongoing commitment to improve plant efficiency and maintain
superior research facilities, the Company has invested over $1.8 billion in
capital expansion over the past three years. Cash provided by operations
also was used in large part to fund the $1.3 billion purchase of nearly 23
million shares of common stock during the three year period ended December
31, 1994.
25
<PAGE>
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
BRISTOL-MYERS SQUIBB COMPANY
CONSOLIDATED STATEMENT OF EARNINGS
(dollars in millions, except per share amounts)
Year Ended December 31,
---------------------------
1994 1993 1992
------- ------- -------
Net Sales $11,984 $11,413 $11,156
------- ------- -------
Expenses:
Cost of products sold 3,122 3,029 2,857
Marketing, selling and administrative 3,166 3,098 3,075
Advertising and product promotion 1,367 1,255 1,291
Research and development 1,108 1,128 1,083
Special charge 750 500 -
Provision for restructuring - - 890
Other (84) (168) (27)
------- ------- -------
9,429 8,842 9,169
------- ------- -------
Earnings from Continuing Operations
Before Income Taxes 2,555 2,571 1,987
Provision for income taxes 713 612 449
------- ------- -------
Earnings from Continuing Operations 1,842 1,959 1,538
Discontinued Operations, net - - 670
------- ------- -------
Earnings Before Cumulative Effect of
Accounting Change 1,842 1,959 2,208
Cumulative Effect of Accounting Change
(net of income tax benefit of $144) - - (246)
------- ------- -------
Net Earnings $ 1,842 $ 1,959 $ 1,962
======= ======= =======
Per Common Share:
Earnings from continuing operations $3.62 $3.80 $2.97
Discontinued operations - - 1.29
----- ----- -----
Earnings before cumulative effect of
accounting change 3.62 3.80 4.26
Cumulative effect of accounting change - - (.47)
----- ----- -----
Net earnings $3.62 $3.80 $3.79
===== ===== =====
Average Common Shares Outstanding
(in millions) 509 515 518
=== === ===
The accompanying notes are an integral part of these financial statements.
26
<PAGE>
BRISTOL-MYERS SQUIBB COMPANY
CONSOLIDATED STATEMENT OF RETAINED EARNINGS
(dollars in millions)
Year Ended December 31,
--------------------------
1994 1993 1992
------ ------ ------
Retained Earnings, January 1 $7,243 $6,769 $6,235
Net earnings 1,842 1,959 1,962
------ ------ ------
9,085 8,728 8,197
Less dividends 1,485 1,485 1,428
------ ------ ------
Retained Earnings, December 31 $7,600 $7,243 $6,769
====== ====== ======
The accompanying notes are an integral part of these financial statements.
27
<PAGE>
BRISTOL-MYERS SQUIBB COMPANY
CONSOLIDATED BALANCE SHEET
ASSETS
(dollars in millions)
December 31,
--------------------------
1994 1993 1992
------- ------- -------
ASSETS
------
Current Assets:
Cash and cash equivalents $ 1,642 $ 2,421 $ 2,137
Time deposits and marketable securities 781 308 248
Receivables, net of allowances 2,043 1,859 1,984
Inventories 1,397 1,322 1,490
Prepaid expenses 847 660 762
------- ------- -------
Total Current Assets 6,710 6,570 6,621
Property, Plant and Equipment 3,666 3,374 3,141
Insurance Recoverable 968 1,000 -
Excess of cost over net tangible assets
received in business acquisitions 939 191 153
Other Assets 627 966 889
------- ------- -------
$12,910 $12,101 $10,804
======= ======= =======
The accompanying notes are an integral part of these financial statements.
28
<PAGE>
BRISTOL-MYERS SQUIBB COMPANY
CONSOLIDATED BALANCE SHEET
LIABILITIES AND STOCKHOLDERS' EQUITY
(dollars in millions)
December 31,
---------------------------
1994 1993 1992
------- ------- -------
LIABILITIES
-----------
Current Liabilities:
Short-term borrowings $ 725 $ 177 $ 375
Accounts payable 693 649 562
Accrued expenses 2,116 1,550 1,422
U.S. and foreign income taxes payable 740 689 941
------- ------- -------
Total Current Liabilities 4,274 3,065 3,300
Product Liability 1,201 1,370 63
Other Liabilities 1,087 1,138 1,245
Long-Term Debt 644 588 176
------- ------- -------
Total Liabilities 7,206 6,161 4,784
------- ------- -------
STOCKHOLDERS' EQUITY
--------------------
Preferred stock, $2 convertible series:
Authorized 10 million shares; issued and
outstanding 21,857 in 1994, 25,798 in
1993 and 28,517 in 1992, liquidation
value of $50 per share - - -
Common stock, par value of $.10 per share:
Authorized 1.5 billion shares; issued
540,173,669 in 1994, 532,688,458 in 1993
and 532,673,413 in 1992 54 53 53
Capital in excess of par value of stock 397 353 435
Cumulative translation adjustments (301) (332) (208)
Retained earnings 7,600 7,243 6,769
------- ------- -------
7,750 7,317 7,049
Less cost of treasury stock - 32,887,848
common shares in 1994, 20,782,281 in 1993
and 14,689,052 in 1992 2,046 1,377 1,029
------- ------- -------
Total Stockholders' Equity 5,704 5,940 6,020
------- ------- -------
$12,910 $12,101 $10,804
======= ======= =======
The accompanying notes are an integral part of these financial statements.
29
<PAGE>
BRISTOL-MYERS SQUIBB COMPANY
CONSOLIDATED STATEMENT OF CASH FLOWS
(dollars in millions)
Year Ended December 31,
-------------------------
1994 1993 1992
------ ------ ------
Cash Flows From Operating Activities:
Earnings from continuing operations $1,842 $1,959 $1,538
Depreciation and amortization 328 308 295
Special charge 750 500 -
Provision for restructuring - - 890
Other operating items 18 49 50
Receivables (63) 41 (125)
Inventories (36) 129 (163)
Prepaid expenses 27 63 14
Accounts payable (20) 134 75
Accrued expenses (73) (77) (268)
Income taxes (8) (197) (213)
Product liability (384) (93) (2)
Other liabilities (80) (236) (63)
------ ------ ------
Net Cash Provided by Operating Activities 2,301 2,580 2,028
------ ------ ------
Cash Flows From Investing Activities:
Proceeds from sales of time deposits and
marketable securities 35 993 169
Purchases of time deposits and marketable
securities (482) (1,049) (269)
Additions to fixed assets (573) (570) (647)
Proceeds from sales of businesses 285 98 1,150
Purchases of businesses and other investments (667) (63) (4)
Other, net (22) (6) 31
------ ------ ------
Net Cash (Used in) Provided by
Investing Activities (1,424) (597) 430
------ ------ ------
Cash Flows From Financing Activities:
Short-term borrowings 496 (228) (169)
Long-term debt 27 394 40
Issuances of common stock under stock plans 24 38 37
Purchases of treasury stock (701) (419) (228)
Dividends paid (1,485) (1,485) (1,428)
------ ------ ------
Net Cash Used in Financing Activities (1,639) (1,700) (1,748)
------ ------ ------
Effect of Exchange Rates on Cash (17) 1 (8)
------ ------ ------
(Decrease) Increase in Cash and Cash
Equivalents (779) 284 702
Cash and Cash Equivalents at Beginning of
Year 2,421 2,137 1,435
------ ------ ------
Cash and Cash Equivalents at End of Year $1,642 $2,421 $2,137
====== ====== ======
The accompanying notes are an integral part of these financial statements.
30
<PAGE>
BRISTOL-MYERS SQUIBB COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions)
Note 1 ACCOUNTING POLICIES
---------------------------
Basis of Consolidation - The consolidated financial statements include the
accounts of Bristol-Myers Squibb Company and all of its subsidiaries.
Cash and Cash Equivalents - Cash and cash equivalents primarily include
securities with a maturity of three months or less at the time of purchase,
recorded at cost, which approximates market.
Time Deposits and Marketable Securities - Time deposits and marketable
securities are available for sale and are recorded at fair value, which
approximates cost.
Inventory Valuation - Inventories are generally stated at average cost, not
in excess of market.
Property and Depreciation - Expenditures for additions, renewals and
betterments are capitalized at cost. Depreciation is generally computed by
the straight-line method based on the estimated useful lives of the related
assets. The range of annual rates used in computing provisions for
depreciation is 2% to 20% for buildings and 5% to 33% for equipment.
Excess of Cost over Net Tangible Assets - The excess of cost over net
tangible assets received in business acquisitions subsequent to October 31,
1970 is being amortized on a straight-line basis over periods not exceeding
40 years.
Earnings Per Share - Earnings per common share are computed using the
weighted average number of shares outstanding during the year. The effect
of shares issuable under stock plans is not significant.
Note 2 SPECIAL CHARGE
----------------------
As described in Note 18, the Company is party to a settlement concerning
pending and future breast implant product liability claims (related to a
previously discontinued business of a subsidiary) brought against it, its
Medical Engineering Corporation subsidiary, and certain other subsidiaries.
In the fourth quarter of 1993, the Company recorded a special charge of $500
million before taxes, $310 million after taxes, or $.60 per share. The
charge consisted of $1.5 billion in anticipation of its share of the pending
settlement and costs of the litigation ($1.4 billion recorded as a long-term
liability in Product Liability and $100 million recorded as a current
liability in Accrued Expenses), offset by $1 billion of expected insurance
proceeds (recorded as Insurance Recoverable). Although the Company is
currently engaged in coverage litigation with certain of its insurers,
expected insurance proceeds represent the amount of insurance which the
Company considers appropriate to record as recoverable at this time. The
Company believes that ultimately it will obtain substantial additional
amounts of insurance proceeds.
31
<PAGE>
BRISTOL-MYERS SQUIBB COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions)
Various events occurred in 1994, including a number of claimants opting out
of the settlement. Based upon preliminary analyses of the number of such
opt outs and of other issues, in the fourth quarter of 1994 the Company
recorded a special charge to earnings of $750 million before taxes, $488
million after taxes, or $.96 per share ($320 million of which was recorded
as a current liability in Accrued Expenses).
Note 3 ACQUISITIONS AND DIVESTITURES
-------------------------------------
In August 1994, the Company acquired Matrix Essentials, Inc., the leading
manufacturer in North America of professional hair care and beauty products
sold exclusively in beauty salons. In connection with the acquisition, the
Company issued 7,452,818 shares of common stock.
In September 1994, the Company completed the acquisition of the remaining
ownership interest in the UPSA Group, which develops and markets a wide
range of nonprescription health and pharmaceutical products, including
analgesics and cardiovascular and gastrointestinal specialties. The Company
held a minority stake in UPSA since 1990.
In January 1995, the Company completed the acquisition of Calgon Vestal
Laboratories, a skin care and infection control products business.
In April 1994, the Company completed the sale of Xomed-Treace, Inc., a
manufacturer of specialty surgical products, to Merocel Corporation.
In July 1994, the Company sold Squibb Diagnostics, its diagnostic contrast
media and radiopharmaceuticals businesses, to Bracco S.p.A. The Company
will continue manufacturing certain diagnostic products, including ProHance
and Isovue, and nuclear medicine products. The Company also will act as
Bracco's distributor in Canada.
In 1993, the Company sold certain assets of Edward Weck Incorporated and
completed the sale of the beauty appliance division of Clairol.
In 1992, the Company completed the sale of The Drackett Company, its
household products business, to S.C. Johnson & Son, Inc., for $1.15 billion
in cash. The sale resulted in a gain of $952 million before taxes, or $605
million after taxes. Drackett has been reported as a discontinued operation
in 1992 and prior years.
Note 4 PROVISION FOR RESTRUCTURING
-----------------------------------
In the fourth quarter of 1992, a charge of $890 million before taxes was
recorded in connection with various restructuring actions taken by the
Company to strengthen its four core businesses in recognition of changing
worldwide health care trends. This charge primarily covered the costs of
reducing employment levels, including a voluntary retirement program for the
Company's U.S. employees, and streamlining worldwide production and
distribution operations. The after-tax effect of the charge was $570
million.
32
<PAGE>
BRISTOL-MYERS SQUIBB COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions)
Note 5 FOREIGN CURRENCY TRANSLATION
------------------------------------
Cumulative translation adjustments, which represent the effect of
translating assets and liabilities of the Company's non-U.S. entities,
except those in highly inflationary economies, were:
1994 1993 1992
---- ---- ----
Balance, January 1 $332 $208 $ 90
Effect of balance sheet translations:
Amount (43) 141 151
Tax effect 12 (17) (33)
---- ---- ----
Balance, December 31 $301 $332 $208
==== ==== ====
Included in net earnings were (losses) gains resulting from foreign currency
transactions and translation adjustments related to non-U.S. entities
operating in highly inflationary economies of $(44) million, $21 million and
$(63) million in 1994, 1993 and 1992, respectively.
Note 6 OTHER INCOME AND EXPENSES
---------------------------------
Year Ended December 31,
-----------------------
1994 1993 1992
---- ---- ----
Interest income $124 $ 96 $78
Interest expense (68) (57) (49)
Other - net 28 129 (2)
---- ---- ----
$ 84 $168 $27
==== ==== ====
Interest expense was reduced by $15 million in 1994, $14 million in 1993 and
$13 million in 1992 due to interest capitalized on major property, plant and
equipment projects. Cash payments for interest, net of amounts capitalized,
were $62 million, $51 million and $46 million in 1994, 1993 and 1992,
respectively.
33
<PAGE>
BRISTOL-MYERS SQUIBB COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions)
Note 7 PROVISION FOR INCOME TAXES
----------------------------------
The components of earnings before income taxes were:
Year Ended December 31,
--------------------------
1994 1993 1992
------ ------ ------
U.S. $1,328 $1,561 $1,248
Non-U.S. 1,227 1,010 739
------ ------ ------
$2,555 $2,571 $1,987
====== ====== ======
The provision for income taxes consisted of:
Year Ended December 31,
--------------------------
1994 1993 1992
---- ---- ----
Current:
U.S. Federal $369 $257 $341
Non-U.S. 377 307 310
State and local 54 42 60
---- ---- ----
800 606 711
---- ---- ----
Deferred:
U.S. (92) (35) (178)
Non-U.S. 5 41 (84)
---- ---- ----
(87) 6 (262)(*)
---- ---- ----
$713 $612 $449
==== ==== ====
(*) Primarily resulted from the provision for restructuring.
Income taxes paid during the year were $718 million, $783 million and $606
million in 1994, 1993 and 1992, respectively.
The Company's provision for income taxes in 1994, 1993 and 1992 was
different from the amount computed by applying the statutory United States
Federal income tax rate to earnings before income taxes, as a result of the
following:
34
<PAGE>
BRISTOL-MYERS SQUIBB COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions)
% of Earnings
Before Income Taxes
-------------------------
1994 1993 1992
----- ----- -----
U.S. statutory rate 35.0% 35.0% 34.0%
Tax exemptions of operations in
Puerto Rico (7.3) (10.1) (8.7)
State and local taxes 1.4 1.1 .2
Non-U.S. operations (1.9) (.2) (1.8)
Other .7 (2.0) (1.1)
----- ----- -----
27.9% 23.8% 22.6%
===== ===== =====
Prepaid taxes at December 31, 1994, 1993 and 1992 were $591 million, $377
million and $405 million, respectively. The deferred income tax asset,
included in Other Assets, at December 31, 1994, 1993 and 1992 was $65
million, $230 million and $160 million, respectively.
The components of prepaid and deferred income taxes consisted of:
December 31,
-----------------------
1994 1993 1992
---- ---- ----
Product liability $304 $183 $ 30
Postretirement and pension benefits 247 275 144
Restructuring and integrating businesses 38 149 356
Depreciation (205) (198) (166)
Other 272 198 201
---- ---- ----
$656 $607 $565
==== ==== ====
The Company has settled its United States Federal income tax returns through
1989 with the Internal Revenue Service.
United States Federal income taxes have not been provided on substantially
all of the unremitted earnings of non-U.S. subsidiaries, since it is
management's practice and intent to reinvest such earnings in the operations
of these subsidiaries. The total amount of the net unremitted earnings of
non-U.S. subsidiaries was approximately $2,004 million at December 31, 1994.
Note 8 INVENTORIES December 31,
------------------- --------------------------
1994 1993 1992
------ ------ ------
Finished goods $ 781 $ 741 $ 846
Work in process 233 239 272
Raw and packaging materials 383 342 372
------ ------ ------
$1,397 $1,322 $1,490
====== ====== ======
35
<PAGE>
BRISTOL-MYERS SQUIBB COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions)
Note 9 PROPERTY, PLANT AND EQUIPMENT
-------------------------------------
December 31,
--------------------------
1994 1993 1992
------ ------ ------
Land $ 159 $ 148 $ 145
Buildings 2,103 1,814 1,741
Machinery, equipment and fixtures 3,061 2,779 2,763
Construction in progress 513 495 383
------ ------ ------
5,836 5,236 5,032
Less accumulated depreciation 2,170 1,862 1,891
------ ------ ------
$3,666 $3,374 $3,141
====== ====== ======
Note 10 ACCRUED EXPENSES AND OTHER LIABILITIES
-----------------------------------------------
The components of accrued expenses were:
December 31,
--------------------------
1994 1993 1992
------ ------ ------
Product liability $ 635 $ 100 $ -
Medicaid and other rebates 207 173 98
Restructuring and integrating
businesses 92 288 326
Other 1,182 989 998
------ ------ ------
$2,116 $1,550 $1,422
====== ====== ======
The components of other liabilities were:
December 31,
--------------------------
1994 1993 1992
------ ------ ------
Postretirement benefits $ 465 $ 452 $ 402
Pension benefits 148 305 73
Restructuring and integrating
businesses - 82 460
Other 474 299 310
------ ------ ------
$1,087 $1,138 $1,245
====== ====== ======
36
<PAGE>
BRISTOL-MYERS SQUIBB COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions)
Note 11 SHORT-TERM BORROWINGS AND LONG-TERM DEBT
-------------------------------------------------
At December 31, 1994, short-term borrowings included amounts due to banks of
$438 million, current installments of long-term debt of $21 million and a
deferred payment of $266 million. At December 31, 1993 and 1992, short-term
borrowings included amounts due to banks of $163 million and $314 million,
respectively, and current installments of long-term debt of $14 million and
$61 million, respectively. The increase in amounts due to banks and the
deferred payment of $266 million at December 31, 1994 primarily resulted
from the acquisition of the remaining ownership interest in UPSA. The
weighted average interest rates on the Company's short-term borrowings were
7.0%, 8.0% and 9.0% at December 31, 1994, 1993 and 1992, respectively.
The Company has short-term lines of credit with domestic and foreign banks.
At December 31, 1994, the unused portions of these lines of credit were
approximately $200 million and $686 million, respectively.
The components of long-term debt were:
December 31,
------------------------
1994 1993 1992
---- ---- ----
7.15% Debentures, due in 2023 $343 $343 $ -
5.0% Term Loan, due in 2000 71 64 -
6.18% Term Loan, due in 1997 65 60 53
5.3% Term Loan, due in 1996 60 55 49
5.75% Industrial Revenue Bonds,
due in 2024 34 - -
6 3/8% and 6 1/2% Notes, due
annually from 1995 to 2004 27 30 30
Other, due in varying amounts
through 2008 44 36 44
---- ---- ----
$644 $588 $176
==== ==== ====
Long-term debt at December 31, 1994 was payable:
Years Ending December 31,
-------------------------
1996 $ 75
1997 79
1998 9
1999 7
2000 76
2001 and later 398
----
$644
====
37
<PAGE>
BRISTOL-MYERS SQUIBB COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions)
Note 12 FINANCIAL INSTRUMENTS
------------------------------
The Company enters into foreign exchange option and forward contracts to
manage its exposure to currency fluctuations.
The Company has exposures to net foreign currency denominated assets and
liabilities, which approximated $1,117 million, $1,210 million and $1,081
million at December 31, 1994, 1993 and 1992, respectively, primarily in
Deutsche marks, French francs, Italian lira and Japanese yen. The Company
mitigates the effect of these exposures through third party borrowings and
foreign exchange forward contracts.
Foreign exchange option contracts, which typically expire within one year,
are used to hedge intercompany shipments expected to occur during the next
year. Gains on these contracts are deferred and are recognized in the same
period as the hedged transactions. Certain foreign exchange forward
contracts are used to minimize exposure of foreign currency transactions and
firm commitments to fluctuating exchange rates. Gains or losses on these
contracts are recognized in the basis of the transaction being hedged. The
notional amounts of the Company's foreign exchange option and forward
contracts at December 31, 1994, 1993 and 1992 were $1,200 million, $790
million and $1,454 million, respectively.
The Company does not anticipate any material adverse effect on its financial
position resulting from its involvement in these instruments, nor does it
anticipate non-performance by any of its counterparties.
At December 31, 1994, 1993 and 1992, the carrying value of all financial
instruments, both short and long-term, approximated their fair values.
Note 13 RETIREMENT BENEFIT PLANS
---------------------------------
The Company and certain of its subsidiaries have defined benefit pension
plans for regular full-time employees. The principal pension plan is the
Bristol-Myers Squibb Retirement Income Plan. The Company's funding policy
is to contribute amounts to provide for current service and to fund past
service liability.
Cost for the Company's defined benefit plans included the following
components:
Year Ended December 31,
------------------------
1994 1993 1992
----- ----- -----
Service cost - benefits earned during the year $ 114 $ 104 $ 94
Interest cost on projected benefit obligation 166 152 144
Actual losses (earnings) on plan assets 11 (232) (119)
Net amortization and deferral (158) 54 (73)
----- ----- -----
Net pension expense $ 133 $ 78 $ 46
===== ===== =====
38
<PAGE>
BRISTOL-MYERS SQUIBB COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions)
The weighted average actuarial assumptions for the Company's pension plans
were as follows:
December 31,
------------------------
1994 1993 1992
---- ---- ----
Discount rate 8.8% 7.0% 8.2%
Compensation increase 5.3% 4.5% 5.0%
Long-term rate of return 10.0% 11.0% 12.0%
The funded status of the plans was as follows:
December 31,
---------------------------
1994 1993 1992
------- ------- -------
Actuarial present value of accumulated
benefit obligation:
Vested $(1,624) $(1,758) $(1,354)
Non-vested (178) (201) (155)
------- ------- -------
$(1,802) $(1,959) $(1,509)
======= ======= =======
Total projected benefit obligation $(2,138) $(2,339) $(1,892)
Plan assets at fair value 1,836 1,702 1,681
------- ------- -------
Plan assets less than projected benefit
obligation (302) (637) (211)
Unamortized net assets at adoption (90) (103) (129)
Unrecognized prior service cost 89 96 105
Unrecognized net losses 309 510 313
Adjustment required to recognize minimum
pension liability (23) (171) -
------- ------- -------
(Accrued) Prepaid pension expense $ (17) $ (305) $ 78
======= ======= =======
In 1994, the decrease in plan assets less than projected benefit obligation
and the adjustment required to recognize minimum pension liability was
primarily due to a higher discount rate.
In 1993, the increase in the actuarial present value of accumulated benefit
obligation and in plan assets less than projected benefit obligation was
primarily due to a lower discount rate and the effect of the voluntary
retirement program offered to the Company's U.S. employees.
39
<PAGE>
BRISTOL-MYERS SQUIBB COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions)
In 1994, the adjustment required to recognize minimum pension liability was
recorded in Other Assets. In 1993, $112 million of the adjustment required
to recognize minimum pension liability was recorded in Other Assets and $59
million was recorded as a reduction in Stockholders' Equity.
Plan assets less than projected benefit obligation included $120 million,
$113 million and $73 million in an unfunded benefit equalization plan at
December 31, 1994, 1993 and 1992, respectively.
Plan benefits are primarily based on years of credited service and on
participant's compensation. Plan assets principally consist of equity
securities and fixed income securities.
Note 14 POSTRETIREMENT BENEFIT PLANS OTHER THAN PENSIONS
---------------------------------------------------------
The Company provides comprehensive medical and group life benefits to
substantially all U.S. retirees who elect to participate in the Company's
comprehensive medical and group life plans. The medical plan is
contributory. Contributions are adjusted periodically and vary by date of
retirement and the original retiring company. The life insurance plan is
non-contributory.
Effective January 1, 1992, the Company adopted the provisions of Statement
of Financial Accounting Standards No. 106, Employers' Accounting for
Postretirement Benefits Other Than Pensions. This statement requires that
the costs of postretirement benefits, primarily health care benefits, be
accrued during an employee's active working career. In prior years, these
costs were expensed as paid. The Company recorded the discounted value of
expected future benefits attributed to employees' service rendered prior to
1992 as a cumulative effect of an accounting change. This one-time non-cash
accounting change was $390 million before taxes, $246 million after taxes,
or $.47 per share.
Cost for the Company's postretirement benefit plans included the following
components:
Year Ended
December 31,
--------------------
1994 1993 1992
---- ---- ----
Service cost - benefits earned during the year $ 9 $ 8 $ 8
Interest cost on accumulated postretirement
benefit obligation 37 32 30
Actual earnings on plan assets - (2) -
Net amortization and deferral (2) - -
---- ---- ----
Net postretirement benefit expense $44 $38 $38
==== ==== ====
40
<PAGE>
BRISTOL-MYERS SQUIBB COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions)
The status of the plans was as follows:
December 31,
--------------------
1994 1993 1992
----- ----- -----
Accumulated postretirement benefit obligation:
Retirees $(386) $(380) $(251)
Fully eligible active plan participants (13) (17) (27)
Other active plan participants (118) (124) (131)
----- ----- -----
(517) (521) (409)
Plan assets at fair value 41 28 7
----- ----- -----
Accumulated postretirement benefit obligation
in excess of plan assets (476) (493) (402)
Unrecognized prior service cost 1 (1) -
Unrecognized net losses 10 42 -
----- ----- -----
Accrued postretirement benefit expense $(465) $(452) $(402)
===== ===== =====
In 1993, the increase in the accumulated postretirement benefit obligation
was primarily due to a lower discount rate and the effect of the voluntary
retirement program offered to the Company's U.S. employees.
For measurement purposes, an annual rate of increase in the per capita cost
of covered health care benefits of 9.8% for participants under age 65 and
8.4% for participants age 65 and over was assumed for 1995; the rate was
assumed to decrease gradually to 6.0% in 2007 and to remain at that level
thereafter. Increasing the assumed medical care cost trend rates by 1
percentage point in each year would increase the accumulated postretirement
benefit obligation as of December 31, 1994 by $29 million and the aggregate
of the service and interest cost components of net postretirement benefit
expense for the year then ended by $2 million. The weighted-average
discount rate used in determining the accumulated postretirement benefit
obligation was 8.8% in 1994, 7.0% in 1993 and 8.2% in 1992.
Plan assets principally consist of equity securities and fixed income
securities. The expected long-term rate of return on plan assets was 10.0%
in 1994, 11.0% in 1993 and 12.0% in 1992.
41
<PAGE>
BRISTOL-MYERS SQUIBB COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions)
Note 15 STOCKHOLDERS' EQUITY
-----------------------------
Changes in capital shares and capital in excess of par value of stock were:
Capital In
Shares of Common Stock Excess of
------------------------- Par Value
Issued Treasury of Stock
----------- ---------- -------------
Balance, December 31, 1991 532,659,944 13,142,575 $485
Issued pursuant to stock plans,
options, rights and warrants 3,052 (1,464,223) (50)
Conversions of preferred stock 10,417 - -
Purchases - 3,010,700 -
----------- ---------- ----
Balance, December 31, 1992 532,673,413 14,689,052 435
Issued pursuant to stock plans,
options, rights and warrants 3,530 (1,183,365) (23)
Conversions of preferred stock 11,515 - -
Purchases - 7,276,594 -
Other - - (59)
----------- ---------- ----
Balance, December 31, 1993 532,688,458 20,782,281 353
Issued pursuant to stock plans,
options, rights and warrants 15,747 (518,733) (15)
Conversions of preferred stock 16,646 - -
Purchases - 12,624,300 -
Other 7,452,818 - 59
----------- ---------- ----
Balance, December 31, 1994 540,173,669 32,887,848 $397
=========== ========== ====
Each share of the Company's preferred stock is convertible into 4.24 shares
of common stock and is callable at the Company's option. The reductions in
the number of issued shares of preferred stock in 1994, 1993 and 1992 were
due to conversions into common stock.
Dividends per common share were $2.92 in 1994, $2.88 in 1993 and $2.76 in
1992.
Under the Company's stock option plans, officers, directors and key
employees may be granted options to purchase the Company's common stock at
100% of the market price on the day the option is granted. Additionally,
the plans provide for the granting of stock appreciation rights whereby the
grantee may surrender exercisable options and receive common stock and/or
cash measured by the excess of the market price of the common stock over the
option exercise price.
42
<PAGE>
BRISTOL-MYERS SQUIBB COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions)
On May 4, 1993, the stockholders approved amendments to the 1983 Stock
Option Plan extending its term for 10 years, authorizing additional shares
in the amount of 0.9% of the outstanding shares per year for each of the
additional 10 years, incorporating the Company's existing long-term
performance award plan and providing for the payment of long-term
performance awards in shares of common stock valued at 100% of the market
price on the date of payment.
The Company's restricted stock award plan provides for the granting of up to
3,000,000 shares of common stock to key employees, subject to restrictions
as to continuous employment except in the case of death or normal
retirement. Restrictions generally expire over a five-year period from date
of grant. At December 31, 1994, a total of 565,668 shares were outstanding
under the plan.
Stock option and long-term performance award transactions were:
Shares of Common Stock
------------------------
Available
for Under
Option/Award Plan
------------ -----------
Balance, December 31, 1991 7,385,732 14,102,731
Granted (3,593,775) 3,593,775
Exercised - (2,258,396)
Surrendered - (7,243)
Lapsed 467,773 (475,107)
---------- ----------
Balance, December 31, 1992 4,259,730 14,955,760
Authorized 4,661,859 -
Granted (5,464,022) 5,464,022
Exercised - (1,264,638)
Lapsed 787,946 (790,981)
---------- ----------
Balance, December 31, 1993 4,245,513 18,364,163
Authorized 4,607,156 -
Granted (5,296,982) 5,296,982
Exercised - (686,507)
Lapsed 1,012,237 (1,027,651)
--------- ----------
Balance, December 31, 1994 4,567,924 21,946,987
========= ==========
At December 31, 1994, there were exercisable options outstanding to purchase
12,450,900 shares of common stock at prices ranging from $16.45 to $87.31
per share. Shares of common stock under option were exercised at prices
ranging from $10.94 to $56.56 in 1994, from $9.44 to $56.13 in 1993 and from
$9.34 to $76.38 in 1992.
At December 31, 1994, 33,428,296 shares of common stock were reserved for
issuance pursuant to stock plans, options and conversions of preferred
stock.
43
<PAGE>
BRISTOL-MYERS SQUIBB COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions)
Attached to each outstanding share of the Company's common stock is one
Right. The Rights will be exercisable if a person or group acquires
beneficial interest of 15% or more of the Company's outstanding common
stock, or commences a tender or exchange offer for 15% or more of the
Company's outstanding common stock. Each Right will entitle stockholders to
buy one one-thousandth of a share of a new series of participating preferred
stock of the Company at an exercise price of $200. The Rights will expire
on December 18, 1997. In the event of certain merger, sale of assets or
self-dealing transactions, each Right will then entitle its holder to
acquire shares having a value of twice the Right's exercise price. The
Company may redeem the Rights at $.01 per Right at any time until the 15th
day following public announcement that a 15% position has been acquired.
Note 16 LEASES
---------------
Minimum rental commitments under all noncancelable operating leases,
primarily real estate, in effect at December 31, 1994 were:
Years Ending December 31,
------------------------
1995 $122
1996 98
1997 76
1998 63
1999 50
Later years 299
----
Total minimum payments 708
Less total minimum sublease rentals 198
----
Net minimum rental commitments $510
====
Operating lease rental expense (net of sublease rental income of $23 million
in 1994, $21 million in 1993 and $20 million in 1992) was $136 million in
1994, $142 million in 1993 and $141 million in 1992.
Note 17 SEGMENT INFORMATION
----------------------------
The Company's products are reported in four industry segments as follows:
Pharmaceutical Products:
-----------------------
Includes prescription medicines, mainly cardiovascular, anti-infective and
anti-cancer drugs, which comprise about 40%, 25% and 20%, respectively, of
the segment's sales, central nervous system drugs and other pharmaceutical
products.
Medical Devices:
---------------
Includes orthopaedic implants, which comprise about 40% of the segment's
sales, ostomy and wound care products, surgical instruments and other
medical devices.
44
<PAGE>
BRISTOL-MYERS SQUIBB COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions)
Nonprescription Health Products:
-------------------------------
Includes infant formulas and other nutritional products, which comprise
about 65% of the segment's sales, analgesics, cough/cold remedies and skin
care products.
Toiletries and Beauty Aids:
--------------------------
Includes haircoloring and hair care preparations, which comprise about 75%
of the segment's sales in 1994 and 65% in both 1993 and 1992, and
deodorants, anti-perspirants and other toiletries and beauty aids.
Unallocated expenses principally consist of general administrative expenses
and net interest income, and in 1992 include a portion of the charge for
restructuring. Other assets are principally cash and cash equivalents,
time deposits and marketable securities. Inter-area sales by geographic
area for the years ended December 31, 1994, 1993 and 1992, respectively,
were: United States - $867 million, $859 million and $915 million;
Europe, Mid-East and Africa - $428 million, $504 million and $382 million;
Other Western Hemisphere - $37 million, $41 million and $36 million; and
Pacific - $28 million, $43 million and $26 million. These sales are
usually billed at or above manufacturing costs.
Net assets relating to operations outside the United States amounted to
$2,286 million, $1,511 million and $1,369 million at December 31, 1994,
1993 and 1992, respectively.
INDUSTRY SEGMENTS Net Sales Profit
----------------- ------------------------ -------------------------
1994 1993 1992 1994(a) 1993(a) 1992(b)
------- ------- ------- ------ ------ ------
Pharmaceutical Products $ 6,970 $ 6,524 $ 6,313 $2,270 $2,133 $1,584
Medical Devices 1,685 1,693 1,665 (253) (24) 305
Nonprescription
Health Products 2,043 1,964 1,959 456 463 268
Toiletries & Beauty Aids 1,286 1,232 1,219 168 163 10
------- ------- ------- ------ ------ ------
Net sales and
operating profit $11,984 $11,413 $11,156 $2,641 $2,735 $2,167
======= ======= ======= ====== ====== ======
GEOGRAPHIC AREAS Net Sales Profit
---------------- ----------------------- -------------------------
1994 1993 1992 1994(a) 1993(a) 1992(c)
------- ------- ------- ------ ------ ------
United States $ 7,846 $ 7,586 $ 7,362 $1,610 $1,777 $1,467
Europe, Mid-East & Africa 3,139 3,062 3,163 675 591 534
Other Western Hemisphere 1,039 987 939 213 197 138
Pacific 1,320 1,225 1,051 179 194 86
Inter-area eliminations (1,360) (1,447) (1,359) (36) (24) (58)
------- ------- ------- ------ ------ ------
Net sales and
operating profit $11,984 $11,413 $11,156 2,641 2,735 2,167
======= ======= =======
Unallocated expenses (86) (164) (180)
------ ------ ------
Earnings before income $2,555 $2,571 $1,987
taxes ====== ====== ======
45
<PAGE>
BRISTOL-MYERS SQUIBB COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions)
(a) The operating profit of the Medical Devices segment and of the United
States included a special charge for pending and future product
liability claims of $750 million in 1994 and $500 million in 1993.
(b) The 1992 operating profit of the Company's industry segments included
the charge for restructuring as follows: Pharmaceutical Products -
$371 million; Medical Devices - $155 million; Nonprescription Health
Products - $150 million; and Toiletries and Beauty Aids - $150 million.
(c) The 1992 earnings before income taxes included the charge for
restructuring as follows: United States - $595 million; Europe,
Mid-East and Africa - $134 million; Other Western Hemisphere - $51
million; Pacific - $46 million; and unallocated expenses - $64 million.
INDUSTRY SEGMENTS Year-End Assets
----------------- --------------------------
1994 1993 1992
------ ------ ------
Pharmaceutical Products $5,180 $4,628 $4,622
Medical Devices 2,001 2,030 1,063
Nonprescription Health Products 1,635 872 839
Toiletries and Beauty Aids 663 548 547
------ ------ ------
Identifiable segment assets $9,479 $8,078 $7,071
====== ====== ======
GEOGRAPHIC AREAS Year-End Assets
---------------- ---------------------------
1994 1993 1992
------- ------- -------
United States $ 5,637 $ 5,591 $ 4,587
Europe, Mid-East and Africa 2,894 1,708 1,813
Other Western Hemisphere 416 443 426
Pacific 949 829 717
Inter-area eliminations (417) (493) (472)
------- ------- -------
Identifiable geographic assets 9,479 8,078 7,071
Other assets 3,431 4,023 3,733
------- ------- -------
Total assets $12,910 $12,101 $10,804
======= ======= =======
46
<PAGE>
BRISTOL-MYERS SQUIBB COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions)
Capital
INDUSTRY SEGMENTS Expenditures Depreciation
----------------- ----------------- ----------------
1994 1993 1992 1994 1993 1992
---- ---- ---- ---- ---- ----
Pharmaceutical Products $379 $379 $426 $205 $194 $186
Medical Devices 37 55 84 38 35 34
Nonprescription
Health Products 112 81 70 38 34 28
Toiletries and Beauty Aids 26 23 34 23 24 28
---- ---- ---- ---- ---- ----
Identifiable industry
totals 554 538 614 304 287 276
Other 23 42 40 24 21 19
---- ---- ---- ---- ---- ----
Consolidated totals $577 $580 $654 $328 $308 $295
==== ==== ==== ==== ==== ====
Note 18 CONTINGENCIES
----------------------
Various lawsuits, claims and proceedings of a nature considered normal to
its businesses are pending against the Company and certain of its
subsidiaries. The most significant of these are described below.
Breast Implant Litigation
-------------------------
As of December 31, 1994, approximately 20,000 plaintiffs have filed suit
against the Company, its subsidiary, Medical Engineering Corporation
(MEC), and certain other subsidiaries, in federal and state courts and in
certain Canadian provincial courts, alleging damages for personal
injuries of various types resulting from polyurethane covered breast
implants and smooth walled breast implants. Most of these plaintiffs are
participants in a class action settlement approved by the federal
District Court in Birmingham, Alabama, and that settlement is now subject
to appeals. Of those who have chosen to opt out of the settlement, the
Company estimates that approximately 3,000 United States claimants may
assert claims based upon MEC implants. Under the settlement, the Company
would make payments totaling $1.154 billion over a period of 30 years.
Note 2 sets forth the special charges recorded in connection with this
litigation. If the value of approved current disease claims under the
settlement exceeds certain limits, payments to claimants would be reduced
and claimants would have another opportunity to opt out of the
settlement. If this were to occur, the Company and other defendants
could renegotiate the terms of the settlement or withdraw. The Company
is unable to predict when these events may occur but, based on
information available at this time, it does not seem likely before late
1995. Dependent on these and other future developments, the Company
would record such additional charge as may be required. The amount of
such a charge, if any, cannot be estimated.
Other Actions
-------------
The Company is a defendant in a number of actions brought against it and
other pharmaceutical companies in federal and state courts by the
children or grandchildren of women who ingested diethylstilbestrol (DES),
a product which had been, but is no longer, manufactured or sold by an
affiliate of the Company.
47
<PAGE>
BRISTOL-MYERS SQUIBB COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions)
The Company is a defendant in several state antitrust actions (some of
which have been removed to federal court) filed on behalf of purported
classes of individual purchasers of infant formula products, and by three
state Attorneys General, alleging a conspiracy regarding pricing of
infant formula products and other violations of state antitrust or
deceptive trade practice laws and seeking treble damages, statutory and
civil penalties and injunctive relief. Five other state Attorneys
General have commenced civil investigations of pricing practices and
marketing activities in the infant formula industry. The Canadian Bureau
of Competition Policy has commenced a civil and criminal investigation of
the Canadian infant formula market. The Company is also a defendant in
one federal court action filed by the State of Louisiana on behalf of
indirect purchasers of infant formula alleging a conspiracy regarding
pricing of infant formula products and seeking treble damages, civil
penalties and injunctive relief.
As of December 31, 1994, the Company is a defendant in over 60 separate
actions commenced against the Company and other pharmaceutical
manufacturers, wholesalers and others in various federal district courts
on behalf of certain chain pharmacies, supermarket chains and independent
drug stores. Plaintiffs' actions have been brought by drug retailers
either on an individual basis or as representatives of nationwide classes
of retail pharmacies. These cases all seek treble damages in an as yet
unspecified amount and injunctive relief on account of alleged antitrust
violations in the pricing and marketing of brand-name prescription drugs.
A class of retail pharmacists has been certified in the multi-district
litigation and the individual claims have been coordinated for purposes
of pre-trial proceedings. State court cases brought under state law and
alleging similar grounds are proceeding in California, Alabama and
Wisconsin, but generally these actions are less advanced than the
coordinated federal cases.
The Company has entered into a settlement of a class action filed in the
United States District Court for the Southern District of New York
alleging violations of federal securities laws and regulations in
connection with, among other things, earnings projections. The
settlement is subject to approval by the Court.
The Company, together with others, is a party to, or otherwise involved
in, a number of proceedings brought by the Environmental Protection
Agency or comparable state agencies under the Comprehensive Environmental
Response, Compensation and Liability Act (CERCLA or Superfund) or
comparable state laws directed at the cleanup of hazardous waste sites.
While it is not possible to predict with certainty the outcome of these
cases, it is the opinion of management that these lawsuits, claims and
proceedings which are pending against the Company are without merit or
will not have a material adverse effect on the Company's operating
results, liquidity or consolidated financial position.
48
<PAGE>
BRISTOL-MYERS SQUIBB COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share amounts)
Note 19 SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)
------------------------------------------------------
First Second Third Fourth
Quarter Quarter Quarter Quarter Year
------- ------- ------- ------- -------
1994:
Net Sales $2,834 $2,970 $2,932 $3,248 $11,984
Gross Profit 2,089 2,228 2,172 2,373 8,862
Net Earnings* 581 542 621 98 1,842
Earnings Per Common Share* 1.14 1.07 1.22 .19 3.62
1993:
Net Sales $2,755 $2,802 $2,862 $2,994 $11,413
Gross Profit 2,014 2,085 2,099 2,186 8,384
Net Earnings* 575 521 608 255 1,959
Earnings Per Common Share* 1.11 1.01 1.18 .50 3.80
* The fourth quarter and annual results included a special charge of $750
million ($488 million after taxes, or $.96 per share) in 1994 and $500
million ($310 million after taxes, or $.60 per share) in 1993 for pending
and future product liability claims.
49
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
---------------------------------
To the Board of Directors
and Stockholders of
Bristol-Myers Squibb Company
In our opinion, the consolidated financial statements listed in the index
appearing under Item 14(a)(1) and (2) on page 52 present fairly, in all
material respects, the financial position of Bristol-Myers Squibb Company
and its subsidiaries at December 31, 1994, 1993 and 1992, and the results of
their operations and their cash flows for the years then ended in conformity
with generally accepted accounting principles. These financial statements
are the responsibility of the Company's management; our responsibility is to
express an opinion on these financial statements based on our audits. We
conducted our audits of these statements in accordance with generally
accepted auditing standards which require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant
estimates made by management, and evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for the
opinion expressed above.
As discussed in Note 14 to the financial statements, effective January 1,
1992, the Company adopted Statement of Financial Accounting Standards No.
106, Employers' Accounting for Postretirement Benefits Other Than Pensions.
/s/ Price Waterhouse LLP
------------------------
1177 Avenue of the Americas
New York, New York 10036
January 19, 1995
50
<PAGE>
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
None.
PART III
--------
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
(a) Reference is made to the Proxy Statement for the Annual Meeting of
Stockholders on May 2, 1995 with respect to the Directors of the
Registrant which is incorporated herein by reference and made a part
hereof in response to the information required by Item 10.
(b) The information required by Item 10 with respect to the Executive
Officers of the Registrant has been included in Part IA of this Form
10-K Annual Report in reliance on General Instruction G of Form 10-K
and Instruction 3 to Item 401(b) of Regulation S-K.
Item 11. EXECUTIVE COMPENSATION.
Reference is made to the Proxy Statement for the Annual Meeting of
Stockholders on May 2, 1995 with respect to Executive Compensation which is
incorporated herein by reference and made a part hereof in response to the
information required by Item 11.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.
Reference is made to the Proxy Statement for the Annual Meeting of
Stockholders on May 2, 1995 with respect to the security ownership of certain
beneficial owners and management which is incorporated herein by reference
and made a part hereof in response to information required by Item 12.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Reference is made to the Proxy Statement for the Annual Meeting of
Stockholders on May 2, 1995 with respect to certain relationships and
related transactions which is incorporated herein by reference and made a
part hereof in response to the information required by Item 13.
51
<PAGE>
PART IV
-------
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
Page
Number
------
(a) 1. Financial Statements 26-30
Notes to Consolidated Financial
Statements 31-49
Report of Independent Accountants 50
2. Financial Statement Schedules
Schedule Page
Number Number
-------- ------
Valuation and qualifying accounts II S-1
All other schedules not included with this additional financial data
are omitted because they are not applicable or the required
information is included in the financial statements or notes thereto.
3. Exhibit List
The Exhibits listed below are identified by numbers corresponding to
the Exhibit Table of Item 601 of Regulation S-K. The Exhibits
designated by two asterisks (**) are management contracts or
compensatory plans or arrangements required to be filed pursuant to
this Item 14. Unless otherwise indicated, all Exhibits are part of
Commission File Number 1-1136.
3a. Restated Certificate of Incorporation of Bristol-Myers Squibb
Company (incorporated herein by reference to Exhibit 4a to
Registration Statement No. 33-33682 on Form S-3).
3b. Bylaws of Bristol-Myers Squibb Company, as amended through May 4,
1993 (incorporated herein by reference to Exhibit 3b to the Form
10-K for the fiscal year ended December 31, 1993).
4a. Letter of Agreement dated March 28, 1984 (incorporated herein by
reference to Exhibit 4 to Form 10-K for the fiscal year ended
December 31, 1983).
4b. Rights Agreement, dated as of December 4, 1987, between Bristol-
Myers Squibb Company and Manufacturers Hanover Trust Company, as
amended (incorporated herein by reference to Exhibit 1 to the Form
8-A dated December 10, 1987, and Exhibit 1 to the Form 8 dated July
27, 1989).
4c. Indenture, dated as of June 1, 1993, between Bristol-Myers Squibb
Company and The Chase Manhattan Bank (National Association), as
trustee (incorporated herein by reference to Exhibit 4.1 to the
Form 8-K dated May 27, 1993, and filed on June 3, 1993).
52
<PAGE>
4d. Form of 7.15% Debenture Due 2023 of Bristol-Myers Squibb Company
(incorporated herein by reference to Exhibit 4.2 to the Form 8-K
dated May 27, 1993, and filed on June 3, 1993).
**10a. Bristol-Myers Squibb Company 1983 Stock Option Plan, as Amended and
Restated as of January 1, 1993, as amended (as adopted and
incorporating amendments as of October 1, 1993, and incorporated
herein by reference to Exhibit 10a to the Form 10-K for the fiscal
year ended December 31, 1993).
**10b. Squibb Corporation 1982 Option, Restricted Stock and Performance
Unit Plan, as amended (incorporated herein by reference to Exhibit
10b to the Form 10-K for the fiscal year ended December 31, 1993).
**10c. Squibb Corporation 1986 Option, Restricted Stock and Performance
Unit Plan, as amended (as adopted, incorporated herein by reference
to Exhibit 10k to the Squibb Corporation Form 10-K for the fiscal
year ended December 31, 1988, File No. 1-5514; as amended effective
July 1, 1993, incorporated herein by reference to Exhibit 10c to
the Form 10-K for the fiscal year ended December 31, 1993).
**10d. Bristol-Myers Squibb Company Performance Incentive Plan, as amended
(as adopted, incorporated herein by reference to Exhibit 2 to the
Form 10-K for the fiscal year ended December 31, 1978; as amended
as of January 8, 1990, incorporated herein by reference to Exhibit
19b to the Form 10-K for the fiscal year ended December 31, 1990;
as amended on April 2, 1991, incorporated herein by reference to
Exhibit 19b to the Form 10-K for the fiscal year ended December 31,
1991; as amended effective January 1, 1994, incorporated herein by
reference to Exhibit 10d to the Form 10-K for the fiscal year ended
December 31, 1993; as amended January 1, 1994, and filed herewith).
**10e. Benefit Equalization Plan of Bristol-Myers Squibb Company and its
Subsidiary or Affiliated Corporations Participating in the Bristol-
Myers Squibb Company Retirement Income Plan or the Bristol-Myers
Squibb Puerto Rico, Inc. Retirement Income Plan, as amended (as
amended and restated as of January 1, 1993, as amended effective
October 1, 1993, incorporated herein by reference to Exhibit 10e to
the Form 10-K for the fiscal year ended December 31, 1993).
**10f. Benefit Equalization Plan of Bristol-Myers Squibb Company and its
Subsidiary or Affiliated Corporations Participating in the Bristol-
Myers Squibb Company Savings and Investment Program, as amended (as
amended and restated as of May 1, 1990, incorporated herein by
reference to Exhibit 19d to the Form 10-K for the fiscal year ended
December 31, 1990; as amended as of January 1, 1991, incorporated
herein by reference to Exhibit 19g to the Form 10-K for the fiscal
year ended December 31, 1990; as amended as of January 1, 1991,
incorporated herein by reference to Exhibit 19e to the Form 10-K
for the fiscal year ended December 31, 1991, as amended effective
October 1, 1994, filed herewith).
**10g. Squibb Corporation Supplementary Pension Plan, as amended (as
previously amended and restated, incorporated herein by reference
to Exhibit 19g to the Form 10-K for the fiscal year ended December
31, 1991; as amended as of September 14, 1993, incorporated herein
by reference to Exhibit 10g to the Form 10-K for the fiscal year
ended December 31, 1993).
53
<PAGE>
**10h. Bristol-Myers Squibb Company Restricted Stock Award Plan, as
amended (as adopted on November 7, 1989, incorporated herein by
reference to Exhibit 10t to the Form 10-K for the fiscal year ended
December 31, 1989; as amended on December 4, 1990, incorporated
herein by reference to Exhibit 19a to the Form 10-K for the fiscal
year ended December 31, 1990; as amended as of July 1, 1993,
incorporated herein by reference to Exhibit 10h to the Form 10-K
for the fiscal year ended December 31, 1993; as amended effective
December 6, 1994, filed herewith).
**10i. Bristol-Myers Squibb Company Retirement Income Plan for Non-
Employee Directors, as amended to October 3, 1989 (incorporated
herein by reference to Exhibit 10u to the Form 10-K for the fiscal
year ended December 31, 1989).
**10j. Bristol-Myers Squibb Company 1987 Deferred Compensation Plan for
Non-Employee Directors, as amended (incorporated herein by
reference to Exhibit 19d to the Form 10-K for the fiscal year ended
December 31, 1991).
**10k. Bristol-Myers Squibb Company Non-Employee Directors' Stock Option
Plan, as amended (as approved by the Stockholders on May 1, 1990,
incorporated herein by reference to Exhibit 28 to Registration
Statement No. 33-38587 on Form S-8; as amended May 7, 1991,
incorporated herein by reference to Exhibit 19c to the Form 10-K
for the fiscal year ended December 31, 1991).
**10l. Squibb Corporation Deferral Plan for Fees of Outside Directors, as
amended (as adopted, incorporated herein by reference to Exhibit
10e to the Squibb Corporation Form 10-K for the fiscal year ended
December 31, 1987, File No. 1-5514; as amended as of December 31,
1991, incorporated herein by reference to Exhibit 10m to the Form
10-K for the fiscal year ended December 31, 1992).
**10m. Amendment to all of the Company's plans, agreements, legal
documents and other writings, pursuant to action of the Board of
Directors on October 3, 1989, to reflect the change of the
Company's name to Bristol-Myers Squibb Company (incorporated herein
by reference to Exhibit 10v to the Form 10-K for the fiscal year
ended December 31, 1989).
11. Computation of Per Share Earnings (filed herewith).
21. Subsidiaries of the Registrant (filed herewith).
23. Consent of Price Waterhouse LLP (filed herewith).
27. Bristol-Myers Squibb Company Financial Data Schedule (filed
herewith).
(b) Reports on Form 8-K
The Registrant did not file any reports on Form 8-K during the
quarter ended December 31, 1994.
54
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of Section 13 or 15 (d) 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.
BRISTOL-MYERS SQUIBB COMPANY
(Registrant)
By /s/ Richard L. Gelb
------------------------------
Richard L. Gelb
Chairman of the Board
March 29, 1995
------------------------------
Date
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
Chairman of the
/s/ Richard L. Gelb Board and Director March 29, 1995
------------------------------
(Richard L. Gelb)
President, Chief
Executive Officer
and Director
(Principal Executive
/s/ Charles A. Heimbold, Jr. Officer) March 29, 1995
-----------------------------
(Charles A. Heimbold, Jr.)
Chief Financial Officer
and Senior Vice President
Corporate Staff
(Principal Financial
/s/ Michael F. Mee Officer) March 29, 1995
-----------------------------
(Michael F. Mee)
Controller
and Vice President
Corporate Staff
(Principal Accounting
/s/ Frederick S. Schiff Officer) March 29, 1995
-----------------------------
(Frederick S. Schiff)
55
<PAGE>
Signature Title Date
--------- ----- ----
/s/ Robert E. Allen Director March 29, 1995
-----------------------------
(Robert E. Allen)
Executive Vice
/s/ Michael E. Autera President and March 29, 1995
----------------------------- Director
(Michael E. Autera)
/s/ Ellen V. Futter Director March 29, 1995
-----------------------------
(Ellen V. Futter)
/s/ Louis V. Gerstner, Jr. Director March 29, 1995
-----------------------------
(Louis V. Gerstner, Jr.)
/s/ John D. Macomber Director March 29, 1995
-----------------------------
(John D. Macomber)
/s/ Alexander Rich, M.D. Director March 29, 1995
-----------------------------
(Alexander Rich, M.D.)
/s/ James D. Robinson III Director March 29, 1995
-----------------------------
(James D. Robinson III)
/s/ Andrew C. Sigler Director March 29, 1995
-----------------------------
(Andrew C. Sigler)
/s/ Louis W. Sullivan, M.D. Director March 29, 1995
-----------------------------
(Louis W. Sullivan, M.D.)
56
<PAGE>
EXHIBIT INDEX
-------------
The Exhibits listed below are identified by numbers corresponding to
the Exhibit Table of Item 601 of Regulation S-K. The Exhibits
designated by two asterisks (**) are management contracts or
compensatory plans or arrangements required to be filed pursuant to
this Item 14. An asterisk (*) in the Page column indicates that the
Exhibit has been previously filed with the Commission and is
incorporated herein by reference. Unless otherwise indicated, all
Exhibits are part of Commission File Number 1-1136.
Exhibit Number and Description Page
------------------------------ ----
3a. Restated Certificate of Incorporation of *
Bristol-Myers Squibb Company (incorporated
herein by reference to Exhibit 4a to
Registration Statement No. 33-33682 on
Form S-3).
3b. Bylaws of Bristol-Myers Squibb Company, as *
amended through May 4, 1993 (incorporated
herein by reference to Exhibit 3b to Form
10-K for the fiscal year ended December 31,
1993).
4a. Letter of Agreement dated March 28, 1984 *
(incorporated herein by reference to Exhibit
4 to Form 10-K for the fiscal year ended
December 31, 1983).
4b. Rights Agreement, dated as of December 4, *
1987, between Bristol-Myers Squibb Company
and Manufacturers Hanover Trust Company, as
amended (incorporated herein by reference to
Exhibit 1 to the Form 8-A dated December 10,
1987, and Exhibit 1 to the Form 8 dated July
27, 1989).
4c. Indenture, dated as of June 1, 1993, between *
Bristol-Myers Squibb Company and The Chase
Manhattan Bank (National Association), as trustee
(incorporated herein by reference to Exhibit 4.1
to the Form 8-K dated May 27, 1993, and filed on
June 3, 1993).
4d. Form of 7.15% Debenture Due 2023 of Bristol-Myers *
Squibb Company (incorporated herein by reference
to Exhibit 4.2 to the Form 8-K dated May 27, 1993,
and filed on June 3, 1993).
57
<PAGE>
Exhibit Number and Description Page
------------------------------ ----
** 10a. Bristol-Myers Squibb Company 1983 Stock Option Plan, *
As Amended and Restated as of January 1, 1993, as
amended (as adopted and incorporating amendments as
of October 1, 1993, incorporated herein by
reference to Exhibit 10a to Form 10-K for the fiscal
year ended December 31, 1993).
** 10b. Squibb Corporation 1982 Option, Restricted Stock *
and Performance Unit Plan, as amended (incorporated
by reference to Exhibit 10b to the Form 10-K for
the fiscal year ended December 31, 1993).
** 10c. Squibb Corporation 1986 Option, Restricted Stock *
and Performance Unit Plan, as amended (as adopted,
incorporated herein by reference to Exhibit 10k to
the Squibb Corporation Form 10-K for the fiscal
year ended December 31, 1988, File No. 1-5514, as
amended effective July 1, 1993, incorporated herein
by reference to Exhibit 10c to the Form 10-K for
the fiscal year ended December 31, 1993).
** 10d. Bristol-Myers Squibb Company Performance Incentive *
Plan, as amended (as adopted, incorporated herein
by reference to Exhibit 2 to the Form 10-K for the
fiscal year ended December 31, 1978; as amended as
of January 8, 1990, incorporated herein by reference
to Exhibit 19b to the Form 10-K for the fiscal year
ended December 31, 1990; as amended on April 2, 1991,
incorporated herein by reference to Exhibit 19b to
the Form 10-K for the fiscal year ended December 31,
1991; as amended on January 1, 1994, incorporated
herein by reference to Exhibit 10d to the Form 10-K
for the fiscal year ended December 31, 1993).
Amendment, effective January 1, 1994, to the E-1-1
Bristol-Myers Squibb Company Performance Incentive
Plan.
** 10e. Benefit Equalization Plan of Bristol-Myers Squibb *
Company and its Subsidiary or Affiliated
Corporations Participating in the Bristol-Myers
Squibb Company Retirement Income Plan or the
Bristol-Myers Squibb Puerto Rico, Inc. Retirement
Income Plan, as amended (as amended and restated as
of January 1, 1993, as amended effective October 1,
1993, incorporated herein by reference to Exhibit
10e to the Form 10-K for the fiscal year ended
December 31, 1993).
58
<PAGE>
Exhibit Number and Description Page
------------------------------ ----
** 10f. Benefit Equalization Plan of Bristol-Myers Squibb *
Company and its Subsidiary or Affiliated Corporations
Participating in the Bristol-Myers Squibb Company
Savings and Investment Program, as amended (as
amended and restated as of May 1, 1990, incorporated
herein by reference to Exhibit 19d to the Form 10-K
for the fiscal year ended December 31, 1990; as
amended as of January 1, 1991, incorporated herein
by reference to Exhibit 19g to the Form 10-K for the
fiscal year ended December 31, 1990; as amended as
of January 1, 1991, incorporated herein by reference
to Exhibit 19e to the Form 10-K for the fiscal year
ended December 31, 1991).
Amendment, effective October 1, 1994, to E-2-1
the Benefit Equalization Plan of Bristol-Myers
Squibb Company and its Subsidiary or Affiliated
Corporations Participating in the Bristol-Myers
Squibb Company Savings and Investment Program,
as amended.
** 10g. Squibb Corporation Supplementary Pension Plan, as *
amended (as previously amended and restated,
incorporated herein by reference to Exhibit 19g to
the Form 10-K for the fiscal year ended December 31,
1991; as amended as of September 14, 1993, incorporated
herein by reference to Exhibit 10g to the Form 10-K for
the fiscal year ended December 31, 1993).
** 10h. Bristol-Myers Squibb Company Restricted Stock Award *
Plan, as amended (as adopted on November 7, 1989,
incorporated herein by reference to Exhibit 10t to
the Form 10-K for the fiscal year ended December 31,
1989; as amended on December 4, 1990, incorporated
herein by reference to Exhibit 19a to the Form 10-K
for the fiscal year ended December 31, 1990; as
amended effective July 1, 1993, incorporated herein
by reference to Exhibit 10h to the Form 10-K for the
fiscal year ended December 31, 1993).
Amendment, effective December 6, 1994, to the E-3-1
Bristol-Myers Squibb Company Restricted Stock
Award Plan.
** 10i. Bristol-Myers Squibb Company Retirement Income Plan *
for Non-Employee Directors, as amended to October 3,
1989 (incorporated herein by reference to Exhibit
10u to the Form 10-K for the fiscal year ended
December 31, 1989).
59
<PAGE>
Exhibit Number and Description Page
------------------------------ ----
** 10j. Bristol-Myers Squibb Company 1987 Deferred *
Compensation Plan for Non-Employee Directors,
as amended (incorporated herein by reference to
Exhibit 19d to the Form 10-K for the fiscal year
ended December 31, 1991).
** 10k. Bristol-Myers Squibb Company Non-Employee Directors' *
Stock Option Plan, as amended (as approved by the
Stockholders on May 1, 1990, incorporated herein by
reference to Exhibit 28 to Registration Statement
No. 33-38587 on Form S-8; as amended May 7, 1991,
incorporated herein by reference to Exhibit 19c to
the Form 10-K for the fiscal year ended December 31,
1991).
** 10l. Squibb Corporation Deferral Plan for Fees of Outside *
Directors, as amended (as adopted, incorporated
herein by reference to Exhibit 10e to the Squibb
Corporation Form 10-K for the fiscal year ended
December 31, 1987, File No. 1-5514; as amended
effective December 31, 1991, incorporated herein
by reference to Exhibit 10m to the Form 10-K for
the fiscal year ended December 31, 1992).
** 10m. Amendment to all of the Company's plans, agreements, *
legal documents and other writings, pursuant to
action of the Board of Directors on October 3,
1989, to reflect the change of the Company's name to
Bristol-Myers Squibb Company (incorporated herein by
reference to Exhibit 10v to the Form 10-K for the
fiscal year ended December 31, 1989).
11. Computation of Per Share Earnings. E-4-1
21. Subsidiaries of the Registrant. E-5-1
23. Consent of Price Waterhouse LLP. E-6-1
27. Bristol-Myers Squibb Company Financial Data Schedule E-7-1
60
<PAGE>
SCHEDULE II
BRISTOL-MYERS SQUIBB COMPANY -----------
VALUATION AND QUALIFYING ACCOUNTS
(dollars in millions)
Additions
Balance at charged to Deductions- Balance at
beginning costs and bad debts end
Description of period expenses written off of period
--------------------- ---------- ---------- ------------ ----------
Allowances for
discounts and
doubtful accounts:
For the year ended
December 31, 1994 $80 $31 $34 $77
========== ========== ============ ===========
For the year ended
December 31, 1993 $106 $19 $45 $80
========== ========== ============ ===========
For the year ended
December 31, 1992 $90 $41 $25 $106
========== ========== ============ ===========
S-1
Exhibit 10d
AMENDMENT TO THE
BRISTOL-MYERS SQUIBB COMPANY
PERFORMANCE INCENTIVE PLAN
--------------------------
Effective January 1, 1994, Section 8(a)(i) of the Bristol-Myers Squibb
Company Performance Incentive Plan (the "Plan") is hereby amended in its
entirety to provide as follows:
"While no Participant has an enforceable right to receive a Cash Portion
until the close of the fiscal year for which an Award is made and then only
if he has performed his duties to the satisfaction of the Company and the
performance goals or objectives specified pursuant to Paragraph 7(a)(iii)
have been attained, payments on account of the Cash Portion will be
provisionally made in accordance with the Regulations, based on tentative
estimates of the amount of the Award; provided, however, that an Award may
provide that no payment shall be made to a Participant prior to
certification in writing by the Committee that the performance goals or
objectives have, in fact, been satisfied. A Participant shall be required
to refund any portion or all of such payments in order that the total
payments may not exceed the Cash Portion as finally determined, or if he
shall forfeit his Award for any reason during the fiscal year."
E-1-1
Exhibit 10f
BENEFIT EQUALIZATION PLAN
OF
BRISTOL-MYERS SQUIBB COMPANY AND ITS SUBSIDIARY OR
AFFILIATED CORPORATIONS PARTICIPATING IN THE
BRISTOL-MYERS SQUIBB COMPANY SAVINGS AND INVESTMENT PROGRAM
(as amended and restated effective as of October 1, 1994)
-------------------------------------------------------
I. Purpose of the Plan
-------------------
The purpose of this Plan is to provide benefits for certain employees
participating in the Bristol-Myers Squibb Company Savings and Investment
Program ("Savings and Investment Program" or "Program") whose funded
benefits are or will be limited by application of the Employee Retirement
Income Security Act of 1974, as amended (the "Code"). The Plan is intended
to be an "excess benefit plan" as that term is defined in Section 3(36) of
ERISA with respect to those participants whose benefits under the Program
have been limited by Section 415 of the Code, and a "top hat" plan meeting
the requirements of Sections 201(2), 301(a)(3), 401(a)(1) and 4021(b)(6) of
ERISA with respect to those participants whose benefits under the Program
have been limited by Section 401(a)(17) of the Code. This Plan is a
continuation and successor plan to the Bristol-Myers Company and its
Subsidiary or Affiliated Corporations Participating in the Bristol-Myers
Company Savings and Investment Program, as in effect on January 1, 1991 and
as amended thereafter (the "Prior Plan"). All amounts accrued under the
Prior Plan continue to be accrued under this Plan.
II. Administration of the Plan
--------------------------
The Savings Plan Committee (the "Committee") appointed by the Board of
Directors of Bristol-Myers Squibb Company (the "Company") to administer the
Savings and Investment Program shall also administer this Plan. The
Committee shall have full authority to determine all questions arising in
connection with the Plan, including its interpretation, may adopt
procedural rules, and may employ and rely on such legal counsel, such
actuaries, such accountants and such agents as it may deem advisable to
assist in the administration of the Plan. Decisions of the Committee shall
be conclusive and binding on all persons.
III. Participation in the Plan
-------------------------
Each participant in the Savings and Investment Program who is employed
by a corporation participating in the Program (hereinafter referred to as a
"participating employer" which term also includes the Company) shall be
eligible to participate in this Plan whenever (a) the allocation to his
account under the Savings and Investment Program, as from time to time in
effect, would exceed the limitations on benefits and contributions imposed
by Section 415 of the Code calculated from and after September 2, 1974 or
(b) amounts of his compensation would be excluded from his "Annual Benefit
Salary or Wages" determined under the Program by reason of the application
of Section 401(a)(17) of the Code.
E-2-1
<PAGE>
IV. Equalization Benefits Related to the Savings and
------------------------------------------------
Investment Program
------------------
A. A participant shall be entitled to equalization benefits under this
Plan only for those plan years in which (a) he has elected to have a
percentage of his Annual Benefit Salary or Wages contributed on his behalf
to the Program and (b) he also has in effect an election, made prior to the
year with respect to which such contributions relate, to defer a specified
percentage of his Annual Benefit Salary or Wages and to have such amount
credited to this Plan in the manner described in paragraphs B and C of this
Article IV.
B. The participating employer that employs a participant meeting the
requirements of Paragraph A for a plan year shall credit, or shall cause to
be credited, a book account to record the amount of such participant's
Annual Benefit Salary or Wages that he has elected to have credited to this
Plan, commencing at the time such participant is precluded from having
additional contributions made to his accounts under the Savings and
Investment Program because of the limitations of Section 415 of the Code,
and continuing through the end of the plan year. Such participating
employer shall also credit, or cause to be credited, a book account to
record the amount of "Employing Company contributions", if any, that would
have been contributed on such participant's behalf for such plan year to
the Program pursuant to the terms of the Program had the amount of the
participant's Annual Benefit Salary or Wages credited pursuant to this
paragraph B been instead contributed to the Program.
C. The participating employer that employs a participant meeting the
requirements of paragraph A for a plan year shall also credit, or cause to
be credited, a separate book account to record the amount of such
participant's Annual Benefit Salary or Wages that he has elected to have
credited to this Plan, commencing at the time such participant is precluded
from having additional contributions made to his accounts under the Savings
and Investment Program because of the limitations of Section 401(a)(17) of
the Code, and continuing until the end of the plan year or, if sooner, the
time amounts begin to be credited to the participant's book account under
the Plan pursuant to the first sentence of paragraph B for such plan year.
No participant may earn credits under both this paragraph C and under
paragraph B at the same time; whenever possible, credits shall be made
pursuant to paragraph B prior to this paragraph C. Such participating
employer shall also credit, or cause to be credited, a book account to
record the amount of "Employing Company contributions", if any, that would
have been contributed on such participant's behalf for such plan year to
the Program pursuant to the terms of the Program had the amount of the
participant's Annual Benefit Salary or Wages credited pursuant to this
paragraph C been instead contributed to the Program.
D. The election to have amounts credited to this Plan may be suspended
at the participant's option during any period of time that the participant
establishes to the satisfaction of the Committee that he is undergoing a
financial hardship as defined in Article VI of this Plan.
E-2-2
<PAGE>
E. Prior to October 1, 1994 each participant shall be given the
opportunity to elect to have credits to his account made on or after
October 1, 1994 deemed to be invested in any one or a combination of the
investment funds being offered under the Savings and Investment Program on
or after October 1, 1994 (other than the Company Stock Fund) in 1%
increments. In the event a participant fails to make such an election, all
such credits shall be deemed to be invested in the investment funds as
determined by the Committee to be most closely resembling the investment
funds the participant had elected with respect to the credits to his
Account made prior to October 1, 1994; provided, however, that where a
participant's existing investment directions had allocated one-third (33
1/3%) of his Account to each of the three investment funds in existence on
September 30, 1994 (other than the Company Stock Fund), the equivalent
allocation shall be deemed to be 33%, 33% and 34%, with 34% allocated to
the least volatile investment fund (as determined by the Committee) which
most closely resembles the least volatile investment fund which the
participant had elected prior to October 1, 1994.
Effective as of the close of business on September 30, 1994 (or as soon
as practicable thereafter), each participant's book account shall be
revalued as if the credits to his account representing a type of investment
under the Plan was reduced to cash (other than any credits representing a
deemed investment in the Fixed Income Fund) and reinvested in each
investment fund or funds being offered on or after October 1, 1994 under
the Savings and Investment Program (other than the Company Stock Fund) as
determined by the Committee to most closely resemble the respective
investment fund in which such credits were deemed invested prior to October
1, 1994.
On and after October 1, 1994, on any business day the participant may,
pursuant to telephonic notification with the administrative agent of the
Committee (the "Administrative Agent"), (i) elect to have future credits
deemed to be invested, in 1% increments, among such funds established under
the Savings and Investment Program, other than the Company Stock Fund,
effective as of the first day of the next payroll period (or as soon as
practicable thereafter) and (ii) elect that the credits to his account
under this Article IV representing any type of investment under the Plan be
deemed to be reduced to cash (in 1% increments) and that such deemed cash
be invested in such other funds which the participant shall designate in
such election, effective as of the next business day (or as soon as
practicable thereafter). Notwithstanding the foregoing, no election under
clause (ii) above with respect to credits accrued prior to October 1, 1994
will be accepted during the period beginning on September 27, 1994 and
ending on or about November 30, 1994 (or as soon as practicable
thereafter). Any investment election given by a participant shall continue
in effect until changed by the participant. To the extent a participant
makes no election, all such credits shall be deemed to have been invested
in the same manner and in the same proportion as elected by the participant
with respect to allotments credited to his account under the Savings and
Investment Program (and any changes in such investment elections), except
that any election (or change in election) to invest in the Company Stock
Fund shall not be honored and such credits shall be deemed invested in
equal amounts in such other funds unless the participant has not elected to
have any amounts invested in such other funds, in which case such credits
shall be deemed invested in the Fixed Income Fund established under such
Program. Such book accounts shall be revalued each business day as if they
had been so invested.
E-2-3
<PAGE>
For purposes of this Plan, "telephonic notification" shall include any form
of communication acceptable to the Administrative Agent, including,
telephone, telegraph, satellite or other wireless communication. A
"business day" shall mean any day the New York Stock Exchange is open for
business.
F. Each participating employer shall distribute to each participant in
this Plan employed by it for whom it maintains book accounts or his
beneficiary designated under this Plan or, if no such designation is made,
under the Savings and Investment Program, upon the termination of
employment of such participant an amount in cash equal to (i) the value of
his book accounts attributable to credits to his account respecting
allotments and deemed earnings and appreciation thereon and (ii) the same
percentage of the value of his book accounts attributable to the deemed
contributions of the participating employer as the percentage of his
account balance under the Savings and Investment Program which is vested at
the time of termination of his employment less (iii) the amount of any
distribution for financial hardship made pursuant to Section VI. Such
distribution shall be payable to the participant or his beneficiary in the
same form as the participant's benefit under the Savings and Investment
Program is payable (utilizing, if applicable, the same actuarial
assumptions used to compute the participant's Savings and Investment
Program benefit payments or such other assumptions as may be determined by
the Committee from time to time). Notwithstanding the foregoing, no
distribution or withdrawal will be processed during the period beginning on
September 27, 1994 and ending on or about November 30, 1994 (or as soon as
practicable thereafter) under the Program and such distribution shall be
made as soon as feasible thereafter.
V. Designation of Beneficiaries in the Event of Death
--------------------------------------------------
A participant may designate a beneficiary or beneficiaries to receive
all or part of the amount of his account in case of his death if such
beneficiary or beneficiaries shall be living at the time of his death;
provided, however, that if the participant has elected to have his benefit
under the Savings and Investment Program paid in the form of a "qualified
joint and survivor annuity," then the participant's beneficiary shall be
his spouse. A participant may, subject to the preceding sentence, change
or revoke a designation of beneficiary and such designation, change or
revocation shall be on a form to be provided for the purpose and shall be
signed by the participant and delivered to his employing corporation prior
to his death. In case of the death of the participant, the amount of his
account with respect to which a designation of beneficiary has been made
(to the extent it is valid and enforceable under applicable law) shall be
distributed in accordance with this Plan to the surviving designated
beneficiary or beneficiaries. The amount in the participant's account
distributable upon death and not subject to such designation, or if no
beneficiary shall be living at the time of the participant's death, shall
be distributed following his death to the person or persons in the first of
the following classes of successive preference:
1. The participant's surviving spouse.
2. To such one or more of the participant's surviving children as the
Committee shall determine and in such proportions as the Committee
determines.
3. The participant's surviving parents, equally.
E-2-4
<PAGE>
4. To such one or more of the participant's surviving brothers and sisters
as the Committee shall determine and in such proportions as the
Committee determines.
5. The participant's executors or administrators.
Payment to one or more of such persons shall completely discharge the Plan
with respect to the amount so paid. Notwithstanding the above, if the
participant has designated a beneficiary under the Savings and Investment
Program, such designation shall be deemed a designation for purposes of
this Plan unless a separate beneficiary designation is made under this Plan
in accordance with the foregoing.
VI. Distribution for Financial Hardship
-----------------------------------
If a participant shall establish to the satisfaction of the Committee
in accordance with principles and procedures established by the Committee
which are applicable to all persons similarly situated that a withdrawal to
be made by him pursuant to this Article VI is to be made by reason of an
extreme financial hardship, the participating employer shall distribute to
the participant the amount necessary to meet such financial hardship but
not more than the value credited to his book accounts under Article IV
hereof.
VII. Miscellaneous
-------------
This Plan may be terminated at any time by the Board of Directors of
the Company, in which event the rights of participants to their book
accounts established under this plan shall become non-forfeitable. The
Company or any participating employer may terminate this Plan with respect
to its employees participating in the Savings and Investment Program, in
which event the rights of participants to their book account established
under this Plan and payable to such terminating corporation shall become
non-forfeitable.
If the Plan is terminated, no distribution shall be made to a
participant or beneficiary which is attributable to the termination during
the 90-day period following such termination. Thereafter, providing the
Company is not subject to an insolvency or bankruptcy proceeding, all
amounts then accrued on behalf of a participant shall be distributed to him
(or his beneficiary) within 60 days after the expiration of such 90-day
period. If the Company is subject to an insolvency or bankruptcy
proceeding, distribution of such amounts shall be suspended subject to the
pendency of such proceeding.
No right to payment or any other interest under this Plan may be
alienated, sold, transferred, pledged, assigned, or made subject to
attachment, execution, or levy of any kind.
Nothing in this Plan shall be construed as giving any employee the
right to be retained in the employ of any participating employer. Each
participating employer in the Plan expressly reserves the right to dismiss
any employee at any time without regard to the effect which such dismissal
might have upon him under the Plan.
E-2-5
<PAGE>
This Plan may be amended at any time by the Board of Directors of the
Company, except that no such amendment shall deprive any participant of the
amount then credited to his book account established under this Plan.
Benefits payable under this Plan shall not be funded and shall be made
out of the general funds of the participating employers or any grantor
trust established by the Company for this purpose. The participating
employers shall not be required to segregate any contributions made by
participants under this Plan. They shall become a part of the general
funds of the participating employers. To the extent that a grantor trust
is established by the Company, the Committee may from time to time reserve
unto itself the right to vote any shares of equity securities or mutual
funds held in any investment fund thereunder or may permit such other
committee, or Investment Manager or Managers as it may designate to
exercise such responsibility.
This Plan shall be construed, administered and enforced according to
the substantive internal laws (and not the conflict of laws provisions) of
the State of New York.
VIII. Effective Date
--------------
This amended and restated Plan shall be effective as of October 1, 1994
upon its approval by a proper officer of the Company as authorized by the
Board of Directors at a meeting held on the 18th of July, 1994 at which a
quorum was present and acting throughout.
E-2-6
Exhibit 10h
AMENDMENT TO THE
BRISTOL-MYERS SQUIBB COMPANY
RESTRICTED STOCK AWARD PLAN
---------------------------
Effective December 6, 1994, the Bristol-Myers Squibb Company Restricted
Stock Award Plan (the "Plan") is hereby amended as follows:
1. The second sentence of Section 1 of the Plan shall be, and hereby is,
amended in its entirety to provide as follows:
"Accordingly, the Company may, from time to time, on or before June 30,
1997, grant to selected employees ("Participants") Awards ("Awards") of
shares of common stock of the Company ("Restricted Stock") subject to the
terms and conditions hereinafter provided."
2. The second sentence of Section 11 of the Plan shall be, and hereby is,
amended in its entirety to provide as follows:
"Unless the Plan shall theretofore have been terminated as herein provided,
the Plan shall terminate on, and no Awards shall be made after June 30,
1997, and said Plan termination shall have no effect on Awards made prior
thereto."
E-3-1
EXHIBIT 11
BRISTOL-MYERS SQUIBB COMPANY
Exhibit With Respect to Omission of Dilutive Elements
In Primary and Fully Diluted Earnings Per Share
EFFECT OF EXERCISE OF STOCK OPTIONS AND WARRANTS ON PRIMARY EARNINGS PER SHARE:
-------------------------------------------------------------------------------
1994 1993 1992
------------ ------------ ------------
(1)Average market price of Common
Stock during year $55.89 $58.42 $69.79
(2)Number of shares under option
and warrant at year-end for which
exercise price is below (1) 11,634,891 11,978,432 8,632,047
(3)Aggregate proceeds to be
received upon exercise of shares
in (2) $570,433,755 $600,689,306 $407,281,454
(4)Shares deemed repurchased under
treasury stock method (3) divided
by (1) 10,206,365 10,282,254 5,835,814
(5)Additional shares deemed
outstanding (2) - (4) 1,428,526 1,696,178 2,796,233
(6)(5) as a percentage of number of
shares used in computing earnings
per share .28% .33% .54%
In view of the above percentages, the effect of assumed exercise of stock
options and warrants was considered not dilutive in accordance with Footnote 2
to paragraph 14 of APB Opinion #15.
E-4-1
<PAGE>
BRISTOL-MYERS SQUIBB COMPANY
Exhibit With Respect to Omission of Dilutive Elements
In Primary and Fully Diluted Earnings Per Share
EFFECT OF CONVERSION OF PREFERRED STOCK AND EXERCISE OF STOCK OPTIONS AND
-------------------------------------------------------------------------
WARRANTS ON FULLY DILUTED EARNINGS PER SHARE:
---------------------------------------------
1994 1993 1992
------------ ------------ ------------
Restatement of Shares:
(1) Shares used in computing earnings
per share 508,722,399 515,245,655 517,966,931
(2) Additional shares deemed
outstanding:
(a) Upon issuance pursuant to stock
plans, options, rights and warrants
after assumed repurchase of shares 2,389,203 2,442,546 2,929,858
(b) Upon conversion of preferred
stock outstanding at conversion
rate of 424/100 per common share 92,674 109,384 120,912
------------ ------------ ------------
(3) Shares assumed to be outstanding
for fully diluted computation 511,204,276 517,797,585 521,017,701
============ ============ ============
Restatement of Earnings:
(4) Net earnings applicable to
Common Stock:
Earnings from Continuing
Operations $1,842,446,000 $1,959,128,000 $1,537,853,000
Earnings Before Cumulative
Effect of Accounting Change 1,842,446,000 1,959,128,000 2,207,710,000
Cumulative Effect of Accounting
Change - - (246,012,000)
-------------- -------------- --------------
Net Earnings 1,842,446,000 1,959,128,000 1,961,698,000
(5) Dividends on Preferred Stock 48,000 54,000 60,000
-------------- -------------- --------------
(6) Pro forma earnings applicable
to Common Stock $1,842,494,000 $1,959,182,000 $1,961,758,000
============== ============== ==============
(7) Pro forma fully diluted
earnings per share:
Earnings from Continuing Operations $3.60 $3.78 $2.95
Earnings Before Cumulative Effect
of Accounting Change 3.60 3.78 4.24
Cumulative Effect of Accounting
Change - - (0.47)
-------------- ------------- -------------
Net Earnings $3.60 $3.78 $3.77
============== ============= =============
E-4-2
<PAGE>
BRISTOL-MYERS SQUIBB COMPANY
Exhibit With Respect to Omission of Dilutive Elements
In Primary and Fully Diluted Earnings Per Share
EFFECT OF CONVERSION OF PREFERRED STOCK AND EXERCISE OF STOCK OPTIONS AND
-------------------------------------------------------------------------
WARRANTS ON FULLY DILUTED EARNINGS PER SHARE:
---------------------------------------------
1994 1993 1992
------- ------- -------
(8) Reported per share:
Earnings from Continuing Operations $3.62 $3.80 $2.97
Earnings Before Cumulative Effect of
Accounting Change 3.62 3.80 4.26
Cumulative Effect of Accounting Change - - (0.47)
------- ------- -------
Net Earnings $3.62 $3.80 $3.79
======= ======= =======
(9) Dilution:
Earnings from Continuing Operations .55% .53% .67%
Earnings Before Cumulative Effect of
Accounting Change .55% .53% .47%
Cumulative Effect of Accounting Change - - -
Net Earnings .55% .53% .53%
In view of the above percentages, the effect of assumed issuance pursuant to
stock plans, options, rights and warrants and conversions of Preferred Stock
was considered not dilutive in accordance with Footnote 2 to paragraph 14 of
APB Opinion #15.
E-4-3
Exhibit 21
BRISTOL-MYERS SQUIBB COMPANY
----------------------------
SUBSIDIARY LIST
---------------
Alive & Well, Inc. (Delaware)
A/S Carmen Curlers (Denmark)
Allard Laboratories, Inc. (Delaware)
Bristol-Myers Squibb (Thailand) Ltd. (Delaware)
Apothecon, Inc. (Delaware)
The B-M Group (Proprietary) Limited (Republic of South Africa)
Bristolabs (Proprietary) Ltd. (Republic of South Africa)
Blisa, Inc. (Delaware)
Bristol-Myers Limited (Thailand)
Bristol Laboratories International, S.A. (Delaware)
B.L. Pharmaceuticals (Proprietary) Limited
(Republic of South Africa)
Bristol Laboratories Products, Inc. (Panama)
Bristol-Myers Squibb S.A. (Colombia)
Bristol-Myers Squibb (Taiwan) Limited (Taiwan)
Bristol Pharmaceutical Information Center, S.A. (Panama)
Laboratorios Bristol del Ecuador, C.A. (Ecuador)
Bristol-Myers Ecuatoriana, S.A. (Ecuador)
Laboratorios Industriales Grove S.A. (Ecuador)
G.I.E. Centre de Recherche de Biologie Moleculaire (France)
Grove Limited (Thailand)
Boclaro Inc. (New York)
Bristol Caribbean, Inc. (Delaware)
Bristol Farmaceutica Portuguesa Lda. (Portugal)
Bristol Iran Private Company Limited (Iran)
Bristol (Iran) S.A. (Delaware)
Bristol Laboratories Corporation (Delaware)
Bristol Laboratories Inc. (New York)
Bristol Laboratories Medical Information Systems Inc. (Delaware)
Bristol-Myers Squibb Aktiebolag (Sweden)
Bristol Laboratorier Aktiebolag (Sweden)
Bristol-Myers (Bangladesh) Inc. (Delaware)
Bristol-Myers Barceloneta, Inc. (Delaware)
Bristol-Myers Company (Delaware)
Bristol-Myers de Colombia, S.A. (Delaware)
Bristol-Myers de Mexico, S.A. de C.V. (Mexico)
Bristol-Myers Foreign Sales Corporation (Virgin Islands)
Bristol-Myers Industrial (Dominicana), Inc. (Delaware)
Bristol-Myers International s.r.l. (Italy)
Bristol-Myers (Japan) Limited (Japan)
Bristol-Myers Lion Ltd. (Japan)
Bristol-Myers Middle East S.A.L. (Lebanon)
Bristol-Myers Nederland Inc. (Delaware)
Bristol-Myers Squibb (N.Z.) Limited (New Zealand)
Bristol-Myers Overseas Corporation (Delaware)
Bristol-Myers Pakistan (Pvt.) Limited (Pakistan)
Bristol-Myers (Private) Ltd. (Zimbabwe)
Bristol-Myers (Zaire) Ltd. (Delaware)
E-5-1
<PAGE>
BRISTOL-MYERS SQUIBB COMPANY
----------------------------
SUBSIDIARY LIST
---------------
Bristol-Myers Squibb A.E.B.E. (Greece)
Bristol-Myers Squibb Asia/Pacific, Inc. (Delaware)
Bristol-Myers Squibb Belgium (Belgium)
Bristol-Myers Squibb Brasil, S.A. (Brazil)
Bristol-Myers Squibb de Venezuela, S.A. (Venezuela)
Servicios Administrativos Bristol-Myers, S.A. (Venezuela)
Bristol-Myers Squibb Canada Inc. (Canada)
Bristol-Myers Squibb Dominicana, S.A. (Delaware)
Bristol-Myers Squibb (Philippines) Inc.
Bristol-Myers Squibb Pakistan (Pvt.) Ltd (Pakistan)
Bristol-Myers Squibb Peruana, S.A. (Peru)
Bristol-Myers Squibb Service Ltd. (Bermuda)
Bristol-Myers Squibb Sp. z.o.o. (Poland)
Bristol-Myers Squibb (Scandinavia) Ltd. (Delaware)
Bristol-Myers Squibb Global Properaties Ltd. (Delaware)
Bristol-Myers Squibb Holdings B.V. (Netherlands)
Bristol-Myers Squibb B.V. (Netherlands)
Mead Johnson B.V. (Netherlands)
Zimmer B.V. (Netherlands)
Bristol-Myers Squibb (Hong Kong) Limited (Hong Kong)
Bristol-Myers Squibb International Corporation (New York)
Bristol-Myers Squibb K.K. (Japan)
Bristol-Myers Squibb (Malaysia) Sendirian Berhad (Malaysia)
Bristol-Myers Squibb Products S. A. (Switzerland)
Bristol-Myers Squibb (Proprietary) Limited (South Africa)
Bristol-Myers Squibb Puerto Rico, Inc. (Delaware)
Bristol-Myers Squibb (Singapore) Pte. Ltd. (Singapore)
Bristol-Myers Squibb (West Indies) Ltd. (Delaware)
Bristol-Myers Superannuation Limited (Australia)
Cancer Research, Inc. (Washington)
Oncogen limited Partnership (Washington)
Clairol de Mexico, S.A. de C.V. (Mexico)
Clairol (Japan) Limited (Japan)
Clairol Incorporated (Delaware)
Clairol Appliances, Inc. (Delaware)
Duart Industries, Ltd. (California)
Logics International, Inc. (Delaware)
Compania Bristol-Myers Squibb de Centro America (Delaware)
Bristol-Myers Squibb de Costa Rica, S.A. (Costa Rica)
Compania Clairol de Argentina (Delaware)
Dalton Holdings Ltd. (Cayman Islands, B.W.I)
Grove Insurance Company Ltd. (Bermuda)
Bristol-Myers Squibb (MEA) S.A. (Switzerland)
Lauren Stacy Marketing, Inc. (Ohio)
Linvatec Corporation (Florida)
Listo B.V. (Netherlands)
Listo International B.V. (Netherlands)
Listo Netherlands B.V. (Netherlands)
Orpex (France)
E-5-2
<PAGE>
BRISTOL-MYERS SQUIBB COMPANY
----------------------------
SUBSIDIARY LIST
---------------
Listo Investment B.V. (Netherlands)
Matrix Essentials, Inc. (Ohio)
Matrix Group Limited Partnership (Italy)
Matrix Italia S.r.l. (Italy)
Mon Elle S.r.l. (Italy)
Matrix Essentials Limited (U.K.)
Mead Johnson & Company (doing business as) Bristol-Myers Squibb
U.S.Pharmaceutical and Mead Johnson Nutritional Group
(Delaware)
Mead Johnson de Mexico, S.A. de C.V. (Mexico)
Selecciones Mercantiles, S.A. de C.V. (Mexico)
Mead Johnson Ecuador, S.A. (Ecuador)
Mead Johnson (Guangzhou) Company (China)
Mead Johnson International, Ltd. (Canada)
Bristol-Myers Squibb Argentina S.A. (Argentina)
Mead Johnson Jamaica Ltd. (Delaware)
Mead Johnson Limited (England)
Mead Johnson (Manufacturing) Jamaica Limited (Jamaica)
Mead Johnson (Philippines) Inc. (Philippines)
Mead Johnson Pharmaceutical, Inc. (Philippines)
Mead Johnson Farmaceutica Limitada (Portugal)
Medical Engineering Corporation (Delaware)
MEC Subsidiary Corporation (Wisconsin)
Monarch Crown Corporation (Delaware)
OY Bristol-Myers Squibb (Finland) AB (Finland)
Route 22 Real Estate Holding Corporation (Delaware)
Squibb Industria Farmaceutica, S.A. (Spain)
Bristol-Myers S.A. (Spain)
Convatec, S.A. (Spain)
Apothecon, S.A. (Spain)
Squibb Corporation (Delaware)
Bristol-Myers Squibb Caribbean Corporation (Delaware)
E.R. Squibb & Sons, Inc. (Delaware)
Calgon Vestal Laboratories, Inc. (Delaware)
Bristol-Myers Oncology Therapeutic Network, Inc. (Delaware)
Bristol-Myers Squibb Center for Health Outcomes and Economics, Inc.
(Delaware)
Bristol-Myers Squibb GmbH (Germany)
Convatec Vertriebs G.m.b.H. (Germany)
Zimmer Chirurgie G.m.b.H. (Germany)
S&G Implants G.m.b.H. (Germany)
Agit Ges. Fur Informationssyskme und-Techniken mbH (Germany)
Bristol-Myers G.m.b.H. (Germany)
Bristol-Myers GES. m.b.H. (Austria)
Bristol Arzneimittel G.m.b.H. (Germany)
Carboplant Spezialimplante G.m.b.H. (Germany)
Orthoplant Endoprothetik G.m.b.H. (Germany)
Bristol-Myers Squibb Ges.m.b.H. (Austria)
Bristol Salor Pharma G.m.b.H. (Germany)
E-5-3
<PAGE>
BRISTOL-MYERS SQUIBB COMPANY
----------------------------
SUBSIDIARY LIST
---------------
Bristol-Myers Squibb Zentrum Fur Forschung und
Fortbildung im Gesundheitswesen G.m.b.H. (Germany)
Elektrochemische Gesellschaft Hirschfelde mbH (Germany)
Princeton Pharmaceuticals Limited (New Zealand)
Laboratorio Farmaceutico Squibb, S.A. (Guatemala)
Salorpharma GmbH (Germany)
Squibb Pharma G.m.b.H. (Germany)
Squibb Von Heyden G.m.b.H. (Germany)
Unterstutzungrasse Bristol-Myers Squibb G.m.b.H.(Germany)
Von Heyden Pharma G.m.b.H. (Germany
Bristol-Myers Squibb Holdings Limited (England)
Bristol-Myers Company Limited (England)
Bristol Pharmaceutical and Drug Company Limited (England)
Bristol-Myers Squibb International Limited (England)
Convatec Limited (England)
CV Laboratories Limited (England)
Kingsdown Medical Consultants Ltd. (England)
Clairol Limited (England)
E.R. Squibb & Sons Limited (England)
Bristol-Myers Squibb Pharmaceutical Ltd. (England)
Zimmer Europe Limited (England)
Zimmer Limited (England)
Bristol-Myers Squibb Pharmaceuticals Limited (Ireland)
Bristol-Myers Squibb Pharmaceuticals Pty. Ltd. (Australia)
Bristol-Myers Squibb S.A. (France)
BMS Holdings (France)
UPSA Investissements S.A. (France)
Laboratories UPSA (France)
Bristol-Myers Squibb SpA (Italy)
Bristol-Foundation (Italy)
Clairol International, S.p.A. (Italy)
Laboratori Guieu S.p.A. (Italy)
Laboratories Guieu France S.a.r.l. (France)
MI.BE.MA. S.r.l. (Italy)
Mead Johnson S.p.A. (Italy)
Zimmer S.r.L. (Italy)
Convatec Sp z.o.o. (Poland)
Convatec Spol s.r.o. (Czechoslovokia)
Convatec Trading and Services Limited (Hungary)
EWI Corporation (Delaware)
E.R. Squibb & Sons, Inc. (New Jersey)
E.R. Squibb & Sons Inter-American Corporation (Delaware)
E.R. Squibb & Sons de Venezuela, C.A. (Venezuela)
G.I.E. Institut de Recherche Squibb (France)
Laboratoires Convatec S.A.R.L. (France)
Laboratorios Linson, S.A. Productos Farmaceuticos (Argentina)
Societe Francaise de Complements Alimentaires S.A. (France)
Squibb ApS (Denmark)
Squibb Europe Inc. (Delaware)
Squibb (Far East) Limited (Hong Kong)
Squibb Manufacturing, Inc. (Delaware)
Squibb Pacific Ltd. (Hong Kong)
E-5-4
<PAGE>
BRISTOL-MYERS SQUIBB COMPANY
----------------------------
SUBSIDIARY LIST
---------------
Squibb Surgicare Limited (England)
Swords Laboratories Limited (Ireland)
Bristol-Myers Squibb International Company (Ireland)
Lawrence Laboratories Ltd. (Ireland)
Linson Investments Limited (Cayman Islands)
Bristol-Myers Squibb de Mexico S.A. de C.V. (Mexico)
F.A.I.R. Laboratories Limited (England)
Fray, S.A. (Dominican Republic)
Industrias Linson, S.A. (Ecuador)
P.T. Squibb Indonesia (Indonesia)
Squibb Development Limited (England)
Squibb Middle East S.A. (Panama)
Squibb Farmaceutica Portuguesa Limitada (Portugal)
Heyden Farmaceutica Portuguesa Limitada (Portugal)
Squibb (Thailand) Limited (Thailand)
Squibb Overseas Investments, Inc. (Delaware)
Squibb Properties, Inc. (Delaware)
345 BM Corporation (Delaware)
Bristol-Myers Company Pty. Limited (Australia)
Joy Corporation Limited (Australia)
Crisena Corporation Pty. Limited (Australia)
United Hairdressing Supplies (VIC.) Pty. Limited (Australia)
Joy Cosmetics Engineering Pty. Limited (Australia)
United Hairdressing Supplies (N.S.W.) Pty. Limited (Australia)
Bristol-Myers Squibb A.G. (Switzerland)
Grove Products (Far East) Limited (England)
Wallingford Research, Inc. (Delaware)
Westwood-Intrafin S.A. (Switzerland)
Stamford Holdings, B.V. (Netherlands)
Westwood-Squibb Pharmaceuticals Inc. (Delaware)
Zimmer Europe Co-ordination Centre, N.V. (Belgium)
Zimmer, Inc. (Delaware)
Snyder Laboratories, Inc. (Delaware)
Zimmer of Canada Limited (Canada)
Zimmer Australia Pty. Limited (Australia)
Zimmer Pte. Ltd. (Singapore)
Zimmer New Zealand Limited (New Zealand)
Zimmer Caribe, Inc. (Delaware)
Zimmer S.A. (France)
Astel Laboratories S.A.R.L. (France)
Osmat S.A. (France)
Delmed S.A. (France)
Zimmer S.A. (Spain)
Zimmer Korea Co., Ltd. (Korea)
E-5-5
Exhibit 23
CONSENT OF INDEPENDENT ACCOUNTANTS
-----------------------------------
We hereby consent to the incorporation by reference in the
Prospectuses constituting part of the Registration Statements on
Form S-8 (Nos. 33-30856, 33-31055, 33-35586, 33-38411, 33-38587,
33-44788, 33-52691 and 33-58187), Post-Effective Amendment No. 2
on Form S-8 (No. 33-30756-02) to Form S-4, Form S-3 (No.
33-33682) and Pre-Effective Amendment No. 1 on Form S-3 (No.
33-62496) of Bristol-Myers Squibb Company of our report dated
January 19, 1995 appearing on page 50 of this Form 10-K.
/s/ Price Waterhouse LLP
------------------------
PRICE WATERHOUSE LLP
New York, New York
March 29, 1995
E-6-1
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
Exhibit 27 for Bristol-Myers Squibb
</LEGEND>
<MULTIPLIER> 1000000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> Dec-31-1994
<PERIOD-END> Dec-31-1994<F1>
<CASH> 1,642
<SECURITIES> 781
<RECEIVABLES> 2,120
<ALLOWANCES> 77
<INVENTORY> 1,397
<CURRENT-ASSETS> 6,710
<PP&E> 5,836
<DEPRECIATION> 2,170
<TOTAL-ASSETS> 12,910
<CURRENT-LIABILITIES> 4,274
<BONDS> 644
0
0
<COMMON> 54
<OTHER-SE> 5,650
<TOTAL-LIABILITY-AND-EQUITY> 12,910
<SALES> 11,984
<TOTAL-REVENUES> 11,984
<CGS> 3,122
<TOTAL-COSTS> 3,122
<OTHER-EXPENSES> 2,475
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 68
<INCOME-PRETAX> 2,555
<INCOME-TAX> 713
<INCOME-CONTINUING> 1,842
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,842
<EPS-PRIMARY> 3.62
<EPS-DILUTED> 3.60
<FN>
<F1> Items reported as "zero" are not applicable or are
immaterial to the consolidated financial position of the
Company.
E-7-1
</TABLE>
