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, 1995
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 of 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 29, 1996 was $42,737,239,493. At February 29, 1996,
there were 503,514,330 shares of common stock outstanding.
Documents incorporated by reference
Proxy Statement for Annual Meeting of Stockholders on May 7, 1996. Part III
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PART I
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Item 1. BUSINESS.
DESCRIPTION OF BRISTOL-MYERS SQUIBB COMPANY
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General:
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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, the Bristol-Myers Company changed its name to Bristol-Myers
Squibb Company, as a result of a merger. The Company, 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
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Reference is made to Note 3 Acquisitions and Divestitures and Note 16
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
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Pharmaceutical Products:
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This segment includes sales of prescription medicines, mainly
cardiovascular, anti-infective and anti-cancer drugs, which comprise about
40%, 20% 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*; and sotalol, a beta blocker with unique
antiarrhythmic qualities, sold primarily under the trademark SOTACOR*.
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*; cephradine, an oral cephalosporin
sold primarily under the trademark VELOSEF*; 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
* Indicates brand names of products which are registered trademarks
owned by the Company.
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primarily under the trademarks CEFAPEROS* and ZANITRIN*; stavudine, used in
the treatment of persons with advanced HIV disease, sold under the
trademark ZERIT*, cleared for marketing in the U.S. under the FDA's
accelerated approval program in June 1994, and which received full FDA
approval in January 1996; amphotericin B, an anti-fungal sold primarily
under the trademark FUNGIZONE*; and a fourth generation injectable
cephalosporin introduced in international markets in 1995 and approved for
marketing in the U.S. in early 1996, sold primarily under the trademark,
MAXIPIME*. Anti-cancer drugs include paclitaxel, used in the treatment of
refractory ovarian cancer, and in treatment of breast cancer after failure
of combination chemotherapy for metastatic disease or relapse within six
months of adjuvant chemotherapy 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* and MEGACE*.
Central nervous system drugs include BUSPAR*, an anxiolytic; SERZONE*, a
new antidepressant launched in the U.S. and other markets in 1995; and
STADOL NS*, a prescription nasal spray analgesic. 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 analog 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;
ESTRACE*, a low-dose estrogen replacement therapy; and acetycysteine, a
medicine that destroys or dissolves mucus sold primarily under the
trademark, MUCOMYST*.
In March 1996, the Company acquired Argentia, SA, one of Argentina's
largest manufacturers and marketers of ethical pharmaceutical products.
Medical Devices:
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This segment includes sales of orthopaedic implants, which comprise about
40% of the segment's sales, ostomy and wound care products, surgical
instruments, arthroscopy products 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, the NEXGEN* Complete Knee Solution, and the
CENTRALIGN* Precoat Hip Prosthesis orthopaedic implants; the APEX*
Universal Drive and Irrigation System, arthroscopy products introduced in
1995; ACTIVE LIFE/COLODRESS* and SUR-FIT/COMBIHESIVE/SECURE* ostomy care
products; and DUODERM* wound care products.
Nonprescription Health Products:
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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*, and LACTOFREE* infant
formula products; ENFAPRO*, NEXT STEP* and ALACTA*, follow-on formula
products for older babies; SUSTAGEN*, ISOCAL*, SUSTACAL*, NUTRAMENT* and
BOOST*, nutritional supplements and specialties; THERAGRAN*, VI-FLOR*,
VI-SOL* and NATALINS* vitamins; EXCEDRIN*, BUFFERIN*, EFFERALGAN*,
ASPIRINE UPSA* and DAFALGAN* analgesics; COMTREX*, a multi-symptom cold
reliever; KERI*, a moisturizing body lotion; and ALPHA KERI*, a shower and
bath oil.
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Toiletries and Beauty Aids:
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This segment includes sales of haircoloring and hair care preparations,
which comprise about 75% of the segment's sales in 1995 and 1994 and 65%
in 1993, 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 and
salon haircolorings; the HERBAL ESSENCES* complete line of shampoos and
conditioners and other shampoos and after-shampoo treatment products;
SYSTEME BIOLAGE* and MATRIX ESSENTIALS*, professional hair care products
sold exclusively in beauty salons; INFUSIUM 23* professional hair care
products; VAVOOM!* and FINAL NET* hair fixatives; VITALIS* hair
preparations; BAN* and MUM*, anti-perspirants and deodorants; and SEA
BREEZE* and MATRIX* skin care products.
SOURCES AND AVAILABILITY OF RAW MATERIALS
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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
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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. Reference is made to Industry Segments in the Management's
Discussion and Analysis of Financial Condition and Results of Operations,
Item 7 of this Form 10-K Annual Report. 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.
COMPETITION, DISTRIBUTION AND CUSTOMERS
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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.
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RESEARCH AND DEVELOPMENT
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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 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 $1,199 million in 1995, $1,108 million in
1994 and $1,128 million in 1993 on company sponsored research and
development activities. Pharmaceutical research and development
spending, as a percentage of pharmaceutical sales, was 12.9% in 1995
compared to 13.6% in 1994 and 14.9% in 1993.
REGULATION
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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
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Bristol-Myers Squibb employed approximately 49,140 people at December 31, 1995.
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DOMESTIC AND FOREIGN OPERATIONS
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Reference is made to Note 16 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 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 285,880 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, St. Louis,
Missouri, Skillman, New Jersey and Greensboro, North Carolina.
Bristol-Myers Squibb manufactures products at forty-eight major
worldwide locations with an aggregate floor space of approximately
13,278,000 square feet. Forty-six are owned by Bristol-Myers Squibb and
two facilities are leased. The U.S. manufacturing facilities total
eighteen, of which 44% and 28% are used in the manufacture of
pharmaceutical products and medical devices, respectively. The non-U.S.
operations include a total of thirty major manufacturing facilities, of
which 73% 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,
Indonesia, Italy, Japan, Mexico, the Netherlands, the Philippines, South
Africa, Taiwan, the United Kingdom and Venezuela, and aggregate
approximately 6,539,800 square feet of space.
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 aggregated $517
million, $577 million and $580 million in 1995, 1994 and 1993,
respectively.
Item 3. LEGAL PROCEEDINGS.
Reference is made to Note 17 Contingencies in the Notes to Consolidated
Financial Statements included in Part II, Item 8 of this Form 10-K
Annual Report.
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Breast Implant Litigation
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As of December 31, 1995, approximately 20,000 plaintiffs had filed suit
against the Company, its subsidiary, Medical Engineering Corporation
("MEC"), and certain other companies, 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 predecessors. Most of these plaintiffs are participants in the
1994 class action settlement referred to below. A number of other
manufacturers 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 compensatory damages for alleged medical
conditions and emotional distress as well as punitive damages. Some of
these women have sued numerous manufacturers without specifying the
manufacturer of the implants involved.
In June 1992, all federal breast implant cases were consolidated for
pre-trial purposes in the Northern District of Alabama before the
Honorable Sam C. Pointer, Jr. On September 1, 1994, Judge Pointer
approved a class action settlement, subject to various conditions,
involving payments totaling up to approximately $4.25 billion by the
defendants over 30 years. 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 were filed, primarily by health insurers, health care
organizations and foreign claimants. These appeals are still pending.
The settlement permitted claimants to elect not to participate (opt out)
and, as stated below, over 9,000 foreign and domestic women (as to all
defendants) had elected to opt out of the settlement. The settlement
also provided, among other things, that if the total dollar value of all
approved current disease compensation claims, as defined in the
settlement agreement, exceeded $1.2 billion, scheduled benefits would be
reduced and claimants would have a second opportunity to withdraw or opt
out of the settlement. On October 7, 1995, after reviewing a sample of
about 3,000 claims, Judge Pointer issued an order declaring that class
members in the breast implant class action settlement would be accorded
such a second opt out right because the value of current claims would
likely far exceed the $1.2 billion set aside for such claims.
Under the October 7 order, class members would be permitted to opt out
and pursue litigation beginning on or about December 1, 1995. The Court
stated, however, that class members would not be required to take
immediate action to file suit to preserve their claims, for the class
action would be maintained and statutes of limitations would remain
suspended until a class member opts out (subject to any cut-off dates).
The Court also then indicated that a revised settlement program might be
offered by the Company, Baxter Healthcare and 3M Company.
On November 13, 1995, the Board of Directors of the Company authorized
management to enter into such a revised settlement program. Baxter
Healthcare, 3M Company, McGhan Medical Corporation and Union Carbide
Corporation also agreed to participate. On December 22, 1995, Judge
Pointer approved the revised settlement. New appeals have been filed
from the order approving the revised settlement.
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The fifteen-year revised settlement program generally provides benefits
to those breast implant recipients, other than foreign claimants, who
have had at least one breast implant manufactured by one of the settling
defendants (or their predecessors or subsidiaries). Several kinds of
benefits are available for eligible participants with breast implants
made by companies affiliated with Bristol-Myers Squibb, Baxter and 3M:
(1) for current claimants, compensation ranging from $10,000 to $50,000
based on disease and disability definitions of the original settlement,
plus supplemental benefits of an additional $15,000 to $50,000 for
claimants with ruptured implants; (2) for current claimants seeking
higher benefits and for other registrants, compensation ranging from
$75,000 to $250,000 based on new, more stringent disease and disability
definitions; and (3) although the settling defendants are not
recommending removal of implants absent some specific medical reason, a
$3,000 payment for those class members (other than late registrants) who
seek removal of implants. In addition, current claimants would be
eligible for an advance payment of $5,000, and other existing
registrants would be eligible for an advance payment of $1,000. For
certain current claimants, benefits would be payable regardless of the
number of claimants seeking compensation, regardless of the total dollar
value of approved claims, and, in many cases, regardless of the outcome
of appeals from the order approving the settlement. For other
claimants, benefits would be subject to annual limits aggregating $755
million for all participating companies over the fifteen-year life of
the program. The Company's aggregate limit for such benefits over that
period is $400 million. In the event the dollar value of claims subject
to the limit exceeds the annual amount, affected claimants may be
afforded a new opt out right but without the right to assert punitive or
other statutory multiple damage claims.
In January 1996, the settlement notice was mailed to approximately
450,000 persons. In addition to explaining potential class members'
rights and benefits under the settlement, the notice packet also
provides instructions for class members who may wish to opt out of the
settlement. Although class members are now permitted to opt out of the
settlement, the Court has cautioned class members against doing so and
has "strongly recommend[ed]" that most class members delay any decision
about opting out until they receive a Notification of Status letter from
the claims office. Class members must then decide whether to
participate in the settlement or opt out no later than 45 days after
they receive the Notification of Status letter. Class members who had
not previously registered by certain deadlines will have the opportunity
to opt out provided they register by April 1, 1996. At this time, it is
not possible on any reliable basis to estimate with any precision how
many class members will participate in or opt out of the settlement.
The cost of the settlement is dependent upon complex and varying
factors, including the number of class members that participate in the
settlement, the kinds of claims approved and their dollar value. In
light of the uncertainties attendant to these and other factors, it is
not possible to achieve any precision at this time in estimating the
cost of the settlement to the Company. The Court has advised that
approximately 440,000 women with implants of all manufacturer companies
had registered with the claims office under the original settlement,
including approximately 57,000 foreign class members. However, since
all women with implants were urged by the Court to register, the number
of registrants does not indicate the number of women who have filed or
will file claims against the settlement funds.
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In July of 1995, the Company entered into a $20.5 million (U.S. funds)
class action settlement with plaintiff representatives in the provinces
of Ontario and Quebec. The class includes persons who have or had MEC
breast implants and who reside in Ontario and Quebec or who received
their MEC implants there. The settlement has been approved by the
provincial courts of Ontario and Quebec. The Company has the right to
withdraw from the settlement if the number of persons participating in
the settlement is unacceptably low.
The Company's insurers have been notified of the breast implant claims,
the settlement and revised settlement, and generally 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. The
Company has reached settlements with some of its insurers and trial of
this insurance coverage case currently is expected in late 1996.
As of December 1, 1995, 7,115 United States women and 2,140 foreign
women (excluding those from Australia, Ontario and Quebec) had elected
to opt out of the original settlement as to all defendants. With
respect to such opt outs by women from the United States, and after
accounting for settlements and other case dispositions since that time,
the Company now estimates that approximately 2,600 women, a large number
of whom reside in Texas, may have remaining claims based upon MEC
implants. 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, although it is expected that such manufacturer
identification will ultimately be possible in most cases. In addition,
as indicated above, it is not possible at this time to estimate the
number of women who will opt out of the revised settlement so that the
exact number of lawsuits that will remain outstanding against the
Company with respect to breast implant litigation cannot be determined
at this time.
The cost to the Company of resolving opt out claims is subject to a
number of complex uncertainties in addition to the unknown quantity and
quality of such claims. While there have been some large judgments, the
relatively few trials against breast implant manufacturers have produced
mixed results and additional trials may affect the outlook. The Company
expects to try a number of breast implant cases in various states in
1996. It has maintained throughout this litigation that breast implants
do not cause disease and recent medical and scientific data support the
Company's position. The results of continuing medical research and a
variety of additional factors, including the success of other legal
defenses and the success of the revised settlement program, may
substantially affect the cost of resolving opt out cases.
In 1993, the Company recorded a special charge of $500 million before
taxes ($310 million after taxes) in respect of breast implant product
liability claims. The charge consisted of $1.5 billion for potential
liabilities and expenses, offset by $1 billion of expected insurance
proceeds. In 1994, the Company recorded an additional special charge of
$750 million before taxes ($488 million after taxes) in respect of
breast implant product liability claims. In the fourth quarter of 1995,
the Company recorded an additional special charge in respect of such
claims. The 1995 charge consisted of $950 million before taxes, $590
million after taxes, or $1.17 per share. Since so much information
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about these claims is not yet known, predictions about the existence or
amount of any future charges cannot be definitely made at this time; it
can only be said that an additional charge may be required as additional
information relating to the revised settlement and the litigation
becomes known and that, while any such charge could have a material
adverse effect on the results of operations in the period in which
taken, the Company does not believe that such a charge would have a
material adverse effect on its liquidity or its consolidated financial
position.
Infant Formula Matters
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The Company, one of its subsidiaries, and others are defendants in a
number of antitrust actions in various states filed on behalf of
purported statewide classes of indirect purchasers of infant formula
products and by the Attorneys General of Louisiana, Minnesota and
Mississippi, alleging a price fixing conspiracy and other violations of
state antitrust or deceptive trade practices laws and seeking damages
and/or penalties and other relief. On December 6, 1995, a trial in
state court in Wichita, Kansas in which the Company and Abbott
Laboratories were defendants concluded with a jury verdict in favor of
the defendants. This case in Kansas was the first infant formula
indirect purchaser case to go to trial. The court subsequently denied
the plaintiff's motion for a new trial. Courts in Colorado, Florida,
Kentucky, Nevada, North Carolina and Tennessee have dismissed similar
complaints, and the plaintiffs have appealed or are expected to appeal
those dismissals. On June 29, 1995, the Texas Supreme Court handed down
a decision in the Company's favor, holding that the plaintiffs, as
indirect purchasers, were barred from proceeding under the Texas
Deceptive Trade Practices-Consumer Protection Act. The Company
subsequently settled a separate action brought by the Texas Attorney
General. Motions to certify classes of indirect purchasers of infant
formula have been denied in Minnesota, in Michigan and by two courts in
Alabama, and have been granted in Wisconsin and South Dakota. A trial
date of June 10, 1996 has been set in the Wisconsin case. The Canadian
Bureau of Competition Policy has discontinued its inquiries into alleged
anticompetitive practices by the Company and certain other members of
the Canadian infant formula industry. The Competition Law Enforcement
Authority in France, the Conseil de la Concurrence, has brought a
complaint against seven infant formula companies (including
Bristol-Myers Squibb SA) and five food outlet chains alleging violations
by manufacturers in obtaining infant milk rotations from hospitals and
against both manufacturers and retailers for allegedly engaging in
resale price maintenance of infant formula. The Company is in the
process of responding to these allegations. 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.
Pharmaceutical Pricing Litigation
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As of December 31, 1995, the Company is a defendant in over 100 actions
brought against the Company and more than 30 other pharmaceutical
manufacturers, drug wholesalers and pharmacy benefit managers in various
federal district courts by certain chain drugstores, supermarket chains
and independent drugstores, suing either individually or as a
representative of a nationwide class of retail pharmacies that has been
certified. These cases, which have been coordinated for pretrial
purposes in the United States District Court for the Northern District
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of Illinois, all seek treble damages and injunctive relief on account of
an alleged antitrust conspiracy concerning the pricing and marketing of
brand name prescription drugs; the plaintiffs who are suing individually
are also asserting claims of unlawful price discrimination under the
Robinson-Patman Act. Discovery has been completed with respect to
claims concerning the alleged antitrust conspiracy. Completion of
additional discovery with respect to Robinson-Patman Act claims against
the Company has been stayed. None of the plaintiffs has specified the
amount of damages claimed, but plaintiffs in the class action have
indicated that they intend to claim damages, before trebling, ranging
from 5% to approximately 20% of the value of their purchases of brand
name prescription drugs from defendants since October 15, 1989. It is
estimated that the class members who have not opted out represent
approximately two-thirds of retail pharmacy purchases of brand name
prescription drugs during the alleged damages period. As of January 31,
1996, the Company, without admitting any wrongdoing, reached an
agreement, which is subject to approval by the Court, to settle the
class action for payments by the Company over three years totaling $33.9
million. The settlement involved twelve other defendants as well and
was preliminarily approved by the Court on February 15, 1996. A hearing
concerning final approval is scheduled for March 27, 1996. Federal
cases brought by retail pharmacies that have opted out of the class
remain pending, and the Company has moved for summary judgment with
respect to the conspiracy claims asserted in those actions. Class
action cases brought by retail pharmacies in state courts against a
similar group of defendants and alleging similar grounds under state law
are proceeding in California, Alabama, Wisconsin and Minnesota. The
California court has certified a class of California retail pharmacies.
Class action cases brought by consumers in state courts against a
similar group of defendants and alleging similar grounds under state law
have been brought in California, Washington, Colorado, New York,
Arizona, Maine, Alabama, Michigan, Minnesota, the District of Columbia
and Wisconsin. The California court has certified a class of
California consumers. The Alabama court has purported to certify a
class consisting of consumers in Alabama and other states, including the
District of Columbia, Kansas, Maine, Michigan, Minnesota, Mississippi,
New Mexico and Wisconsin. The consumer actions brought in Washington
and Colorado have been dismissed; an appeal is pending in the Washington
action. 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.
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.
10
<PAGE>
PART IA
-------
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
- ------------------------ --- -------------------------------
Charles A. Heimbold, Jr. 62 Chairman of the Board, Chief Executive
Officer, President and Director
Michael E. Autera 57 Executive Vice President and Director
Harrison M. Bains, Jr. 52 Treasurer and Vice President,
Corporate Staff
Alice C. Brennan 43 Secretary and Vice President,
Corporate Staff
George P. Kooluris 51 Senior Vice President, Corporate
Development, Corporate Staff
John L. McGoldrick 55 General Counsel and Senior Vice
President, Corporate Staff
Michael F. Mee 53 Chief Financial Officer and Senior
Vice President, Corporate Staff
Leon E. Rosenberg, M.D. 63 President, Bristol-Myers Squibb
Pharmaceutical Research Institute
Frederick S. Schiff 48 Controller and Vice President,
Corporate Staff
Charles G. Tharp, Ph.D. 44 Senior Vice President, Human
Resources, Corporate Staff
Kenneth E. Weg 57 Executive Vice President, Director
and President, Bristol-Myers Squibb
Pharmaceutical Group
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 7, 1995. Officers of the Registrant serve in such capacity at the
pleasure of the Board of Directors of the Registrant.
11
<PAGE>
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, the
Chief Executive Officer of the Registrant since 1994 and Chairman of
the Board since May 1995.
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.
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 Secretary and Vice President, Corporate Staff of
the Registrant since 1994.
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.
JOHN L. McGOLDRICK - From 1974 to 1994, Partner, McCarter &
English. Mr. McGoldrick has been General Counsel and Senior Vice
President, Corporate Staff of the Registrant since January 1995.
MICHAEL F. MEE - 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.
FREDERICK S. SCHIFF - Mr. Schiff has been Controller and Vice
President, Corporate Staff of the Registrant since 1990.
CHARLES G. THARP, Ph.D. - 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.
KENNETH E. WEG - From 1990 to 1991, President, Bristol-Myers
Squibb International Pharmaceutical Group, a division of the Registrant
and 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, a director of the Registrant since May 1995 and Executive
Vice President of the Registrant since May 1995.
12
<PAGE>
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 and Tharp.
13
<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:
1995 1994
------------------ -------------------
High Low High Low
Common: ------- -------- ------- -------
First Quarter $65 7/8 $57 3/4 $59 7/8 $50
Second Quarter 69 7/8 61 7/8 56 1/4 50 1/8
Third Quarter 74 7/8 66 1/2 58 3/4 51 1/8
Fourth Quarter 87 1/8 72 61 55 3/4
1995 1994
------------------ ------------------
High Low High Low
Preferred: ------- -------- ------- -------
First Quarter $300 $230 $244 $244
Second Quarter 325 225 232 214
Third Quarter 335 250 232 220
Fourth Quarter 359 1/2 330 262 231
HOLDERS OF COMMON STOCK
- -----------------------
The approximate number of record holders of common stock at December
31, 1995 was 147,254.
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.
In March 1996, the Board of Directors of the Company authorized an
increase in the Company's current share repurchase program from 50
million shares to 75 million shares. Additional shares will be
repurchased from time to time in the open market or through private
transactions, as market conditions permit.
DIVIDENDS
- ---------
Dividend payments per share in 1995 and 1994 were:
Common Preferred
--------------- ----------------
1995 1994 1995 1994
----- ----- ----- -----
First Quarter $ .74 $ .73 $ .50 $ .50
Second Quarter .74 .73 .50 .50
Third Quarter .74 .73 .50 .50
Fourth Quarter .74 .73 .50 .50
----- ----- ----- -----
Year $2.96 $2.92 $2.00 $2.00
===== ===== ===== =====
14
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In December 1995, the Board of Directors of the Company declared a
quarterly dividend of $.75 per share on the common stock of the
Company, payable on February 1, 1996 to shareholders of record as of
January 5, 1996. The 1996 indicated annual payment of $3.00 per share
represents the twenty-fourth consecutive year that the Company has
raised the dividend on its common stock.
15
<PAGE>
Item 6. SELECTED FINANCIAL DATA.
FIVE-YEAR FINANCIAL SUMMARY
- ---------------------------
OPERATING RESULTS
- -----------------
(dollars in millions,
except per share amounts) 1995 1994 1993 1992 1991
------- ------- ------- ------- -------
Net Sales $13,767 $11,984 $11,413 $11,156 $10,571
------- ------- ------- ------- -------
Expenses:
Cost of products sold 3,637 3,122 3,029 2,857 2,717
Marketing, selling and
administrative 3,670 3,166 3,098 3,075 2,946
Advertising and product
promotion 1,646 1,367 1,255 1,291 1,263
Research and development 1,199 1,108 1,128 1,083 983
Other (*) 1,213 666 332 863 (122)
------- ------- ------- ------- -------
11,365 9,429 8,842 9,169 7,787
------- ------- ------- ------- -------
Earnings Before
Income Taxes (*) 2,402 2,555 2,571 1,987 2,784
Provision for income taxes 590 713 612 449 793
------- ------- ------- ------- ------
Net Earnings (*) $ 1,812 $ 1,842 $ 1,959 $ 1,538 $ 1,991
======= ======= ======= ======= ======
Dividends paid on common
and preferred stock $ 1,495 $ 1,485 $ 1,485 $ 1,428 $ 1,249
Earnings per
common share (*) 3.58 3.62 3.80 2.97 3.82
Dividends per common share 2.96 2.92 2.88 2.76 2.40
(*) Includes a special charge for pending and future product liability
claims of $950 million before taxes, $590 million after taxes, or
$1.17 per share, in 1995, $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.
Includes a provision for restructuring of $310 million before
taxes, $198 million after taxes, in 1995 and $890 million before
taxes, $570 million after taxes, in 1992.
16
<PAGE>
Item 6. SELECTED FINANCIAL DATA. (con'd.)
FIVE-YEAR FINANCIAL SUMMARY
- ---------------------------
FINANCIAL POSITION AT DECEMBER 31
- ---------------------------------
(dollars in millions) 1995 1994 1993 1992 1991
------- ------- ------- ------ ------
Current assets $ 7,018 $ 6,710 $ 6,570 $ 6,621 $5,567
Property, plant and
equipment 3,760 3,666 3,374 3,141 2,936
Total assets 13,929 12,910 12,101 10,804 9,416
Current liabilities 4,806 4,274 3,065 3,300 2,752
Long-term debt 635 644 588 176 135
Total liabilities 8,107 7,206 6,161 4,784 3,621
Stockholders' equity 5,822 5,704 5,940 6,020 5,795
Average common shares
outstanding (in millions) 506 509 515 518 521
Reference is made to Note 2 Special Charge, Note 3 Acquisitions and
Divestitures, Note 4 Restructuring and Note 17 Contingencies, appearing
in the Notes to Consolidated Financial Statements included in Part II,
Item 8 of this Form 10-K Annual Report.
17
<PAGE>
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
SUMMARY
- -------
In 1995, Bristol-Myers Squibb achieved record sales, with all four of
the Company's segments reporting sales increases. Sales increased 15%
over the prior year to $13.8 billion. Domestic sales increased 10% to
$7.7 billion, while international sales increased 22% to $6.1 billion.
Exchange rate fluctuations had a favorable effect of 1% on worldwide
sales and 3% on international sales.
Earnings before income taxes, excluding the 1995 and 1994 special
charges and the 1995 provision for restructuring, increased 11% to
$3,662 million in 1995, as net earnings increased 12% to $2,600 million
and earnings per share increased 12% to $5.14 from $4.58 in 1994.
Including these charges, earnings before income taxes were $2,402
million in 1995 and $2,555 million in 1994, net earnings were $1,812
million in 1995 and $1,842 million in 1994, and earnings per share were
$3.58 in 1995 and $3.62 in 1994.
During the past two years, the Company has broadened and enhanced its
product lines with a number of strategic acquisitions and
collaborations. In 1994, the Company acquired the remaining interest in
the UPSA Group, the leading maker and marketer of analgesics in France
and Belgium, acquired Matrix Essentials, Inc., the leading manufacturer
in North America of professional hair care products for beauty salons,
and acquired an equity interest in Azupharma GmbH, one of Germany's
major generic pharmaceutical companies. In 1995, the Company acquired
Calgon Vestal Laboratories, a wound and skin care and infection control
products business, and A/S GEA Farmaceutisk Fabrik, a leading
manufacturer and marketer of branded generic pharmaceuticals for the
Scandinavian market. During 1995, the Company announced research
alliances and biotechnology collaborations, which are described later in
the research and development discussion. In January 1996, the Company
acquired control of Pharmavit Gyogyszer-es Elelmiszeripari Reszvenytarsasag,
one of Hungary's leading manufacturers of over-the-counter medicines,
nutritional products and generic pharmaceuticals.
In addition to its strong product lines, the Company continues to
benefit from its strong financial position. At December 31, 1995, the
Company held $2.2 billion in cash, time deposits and marketable
securities. Cash provided by operating activities, which totaled $2.5
billion in 1995, continued as the primary source of financing Company
growth, 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 1995. Dividends per common share were $2.96
in 1995, increasing from $2.92 per share paid in 1994. An additional
dividend increase was announced in December 1995. The 1996 indicated
annual payment of $3.00 per share represents the twenty-fourth
consecutive year that the Company has raised the dividend on its common
stock. With this 1996 annual payment, Bristol-Myers Squibb dividends
will have increased at a compound annual growth rate of 11% over the
past 10 years. Bristol-Myers Squibb's strong financial position is
evidenced by its triple A credit rating from both Moody's and Standard &
Poor's, making Bristol-Myers Squibb one of only nine U.S. companies with
this distinction. The Company as a result, has substantial unused
borrowing capacity by which it can pursue its objectives.
18
<PAGE>
NET SALES AND EARNINGS
- ----------------------
Worldwide sales increased 15% in 1995 to $13.8 billion, compared to
increases of 5% and 2% in 1994 and 1993, respectively. Volume growth
was the primary contributor to the increase in sales in 1995, with price
increases having minimal impact. Price increases and the favorable
effect of exchange rate fluctuations each contributed 1% to sales growth
on a worldwide basis. Price increases had no impact on domestic sales
growth in 1995. In 1994, the 5% increase in sales reflected a 4%
increase due to volume and a 1% increase due to price increases.
Exchange rate fluctuations had no attributable effect on total Company
sales growth. Domestic sales increased 10% in 1995 and 4% in both 1994
and 1993, while international sales increased 22% in 1995, 7% in 1994
and remained at prior year levels in 1993.
As described in Notes 2 and 17 to the financial statements, 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. In the fourth
quarter of 1995, the Company recorded a special charge to earnings of
$950 million before taxes, $590 million after taxes, or $1.17 per share.
The 1995 special charge is in addition to a charge of $750 million
before taxes, $488 million after taxes, or $.96 per share, recorded in
the fourth quarter of 1994 and a charge of $500 million before taxes
($1.5 billion of liability offset by expected insurance proceeds of $1.0
billion), $310 million after taxes, or $.60 per share, recorded in the
fourth quarter of 1993.
During the fourth quarter of 1995, the Company recorded a provision for
restructuring of $310 million before taxes, $198 million after taxes, or
$.39 per share. The provision primarily relates to the consolidation of
plants and facilities, and related employee termination costs.
As a result of the special charges and the provision for restructuring,
net earnings were $1,812 million, or $3.58 per share, in 1995, $1,842
million, or $3.62 per share, in 1994 and $1,959 million, or $3.80 per
share, in 1993. Excluding the special charges and the 1995 provision
for restructuring, net earnings were $2,600 million, or $5.14 per share,
in 1995, $2,330 million, or $4.58 per share, in 1994 and $2,269 million,
or $4.40 per share, in 1993.
The effective income tax rate on earnings before income taxes was 24.6%
in 1995 compared with 27.9% and 23.8% in 1994 and 1993, respectively.
Excluding the special charges and the provision for restructuring, the
effective income tax rate on earnings before income taxes was 29.0% in
1995, 29.5% in 1994 and 26.1% in 1993. The 1995 effective income tax
rate, a decrease of 0.5% from 1994, resulted from higher levels of
income from lower tax jurisdictions. The increase in the 1994 effective
income tax rate to 29.5% from 26.1% in 1993 resulted from the
curtailment of certain tax benefits from Puerto Rico operations, enacted
in the Omnibus Budget Reconciliation Act of 1993.
19
<PAGE>
EXPENSES
- --------
Total costs and expenses as a percentage of sales, excluding the special
charges and the provision for restructuring, were 73.4% in 1995,
compared with 72.4% in 1994 and 73.1% in 1993. The increase in 1995
primarily resulted from increased advertising and promotion expenditures
in the nonprescription health products and toiletries and beauty aids
segments. In addition, due to the Company's increased participation in
the federal government's Women, Infants, and Children (WIC) program,
gross margins in the nonprescription health products segment were lower
than the prior year. The decrease in 1994 primarily resulted from
reductions in selling expenses, improvements in gross margin and the
divestiture of businesses with higher costs.
Cost of products sold, as a percentage of sales, increased to 26.4% in
1995 from 26.1% in 1994. The increase in 1995 is due to increased
participation in the WIC program and lower gross margins in connection
with recent acquisitions. These increases were partially offset by a
favorable product mix and improved manufacturing efficiencies. In 1994,
cost of products sold decreased as a percentage of sales from 26.5% in
1993 to 26.1% due to a favorable product mix and the divestiture of
businesses with higher cost of sales.
Marketing, selling and administrative expenses, as a percentage of
sales, were 26.7% in 1995 compared to 26.4% in 1994 and 27.1% in 1993.
Advertising and promotion expenses in support of new and existing
products increased to $1,646 million in 1995 from $1,367 million in
1994, primarily due to spending in support of new product launches. In
1994, advertising and promotion expenses increased from 1993 levels
primarily as a result of increases in the toiletries and beauty aids
segment, with the addition of Matrix Essentials, Inc., and in the
pharmaceutical products segment, in preparation for the launches of new
products.
The Company's investment in research and development totaled $1,199
million in 1995, an increase of 8% over 1994. The higher level of
spending reflects the Company's continued commitment to research over a
broad range of therapeutic areas and to clinical development in support
of new products. Over the last 10 years, research and development
expenses increased at a compound annual rate of 11%. In 1995, research
and development spending dedicated to the discovery and development of
pharmaceutical products was 12.9% of pharmaceutical sales compared to
13.6% and 14.9% in 1994 and 1993, respectively. During 1995, the
Company announced research alliances and biotechnology collaborations
with the following companies: SEQ LTD, for ultra-high speed DNA
sequencing; Genzyme Transgenics, for the production of antibodies from
goats' milk; Phyton, Inc., for an option to license plant cell culture
for the production of TAXOL(R)*(paclitaxel); and Spec/Biospecs, for
access to its libraries of novel organic chemicals. The Company entered
into a licensing arrangement with Taiho of Japan to develop and market
UFT (tegafur and uracil), an oral anti-tumor agent which may have fewer
debilitating side effects than current therapy. The Company made equity
investments in the following companies: Somatix Therapy Corporation, a
company specializing in gene therapy; SIBIA, Inc., a company developing
products based on cloned receptor and functional assay technology for
Alzheimer's disease treatment; IXSYS, Inc., a company engaged in the
development of tumor antigens and antibodies; and EntreMed, Inc., a
20
<PAGE>
leader in the field of angiogenesis research. During 1995, an
additional equity investment was made in Cadus Pharmaceutical
Corporation, a company that specializes in developing novel drug
screening techniques. In January 1996, the Company announced a
collaboration with NeuroSearch A/S of Denmark, to develop an oral
compound for the treatment of Parkinson's disease.
INDUSTRY SEGMENTS
- -----------------
At the end of 1995, Bristol-Myers Squibb had 29 product lines each with
more than $100 million in annual sales, representing products from all
four of its 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 57% of total Company sales, increased 12% in 1995 to
$7,810 million. Volume growth was the primary contributor to this
increase, as price increases and the favorable effect of exchange rate
fluctuations each had a 1% effect on the segment's sales growth for the
year. Domestic and international sales increased 7% and 18%,
respectively. The Company has a strong and growing cardiovascular
product franchise. Sales of cardiovascular drugs, the largest product
group in the segment at $2.9 billion, increased 6%. Captopril, an
angiotensin converting enzyme (ACE) inhibitor and the Company's largest
selling product, is primarily sold under the trademark CAPOTEN*.
Captopril sales remained at prior year levels despite increased
competition in the ACE inhibitor market in the U.S. and loss of patent
exclusivity, primarily in Germany. In the U.S., the expiration date of
the CAPOTEN* patent was redefined by legislation implementing the GATT
treaty to February 1996. PRAVACHOL*, the Company's largest selling
cholesterol-lowering agent with sales of $770 million, was the largest
contributor to the increase in cardiovascular sales. In the U.S. and
several other markets, PRAVACHOL* benefited from expanded labeling
describing that it reduces by 67% the risk of recurrent myocardial
infarction in patients with elevated cholesterol. In the fourth quarter
of 1995, the results were released from the West of Scotland Coronary
Prevention Study, which found that PRAVACHOL* is associated with an
early and sustained reduction of heart attack and death in individuals
with high cholesterol who have never had a heart attack. MONOPRIL*, a
second generation ACE inhibitor with once-a-day dosage, performed well,
with strong volume growth in the U.S. and in overseas markets. The
Company also has a strong presence in the anti-infectives market. Sales
of the Company's anti-infective products increased 12% to $1.7 billion
due to increases in sales of ZERIT*, the Company's newest antiretroviral
drug, cleared for marketing in the U.S. under the FDA's accelerated
approval program in June 1994, and which received full FDA approval in
January 1996, CEFZIL*, an oral cephalosporin, used in the treatment of
respiratory infections, DURICEF*, an oral cephalosporin, VIDEX*, an
antiretroviral drug, and broad spectrum penicillins. In addition,
MAXIPIME*, a fourth generation injectable cephalosporin introduced in
international markets in 1995 and approved for marketing in the U.S. in
early 1996, contributed to the growth of anti-infectives. Offsetting
these increases were lower sales of AMIKIN* and AZACTAM* due to
increased generic competition. Bristol-Myers Squibb remains the leader
in the anti-cancer therapeutics category. Sales of its anti-cancer
drugs increased 20% to $1.6 billion. Sales of TAXOL* (the exclusivity
for which expires in the U.S. in December 1997), the Company's leading
anti-cancer agent, were $580 million in 1995, increasing 68% over the
21
<PAGE>
prior year. 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 after 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. Also in 1995, 1994
and 1993, TAXOL* received clearance for marketing in a number of
countries in Europe, Latin America and the Pacific area. Sales of
PARAPLATIN* and PLATINOL* (the patent for which expires in the U.S. in
December 1996), also increased due to their use in combination therapy
with TAXOL*. These increases were partially offset by decreases in
sales of VEPESID* (the exclusivity for which expired in the U.S. in
November 1993). The Company has a growing position in the central
nervous system drug category. Sales of central nervous system drugs
increased 27% primarily due to growth of BUSPAR*, the Company's novel
anti-anxiety agent, STADOL NS*, a prescription nasal spray analgesic,
and sales of SERZONE*, an antidepressant treatment which offers a low
incidence of side effects, launched in the U.S. and other markets in
1995. In addition, PRODAFALGAN*, from the UPSA Group, also contributed
to the growth of central nervous system drugs. Dermatological drug
sales increased 9%, largely due to sales of DOVONEX*, a vitamin D3
analog for the treatment of moderate psoriasis. Increases in sales of
ESTRACE*, a low-dose estrogen replacement therapy, also contributed to
sales growth. Glucophage, the Company's new oral hypoglycemic agent for
type II (non-insulin dependent) diabetes, a product licensed from the
French company Lipha for sale in the U.S., was introduced in 1995 and
performed exceptionally well during its first year on the market.
In 1994, pharmaceutical products segment sales increased 7%, as
increases in sales of PRAVACHOL*, TAXOL*, CAPOTEN*, MONOPRIL*, CEFZIL*
and BUSPAR* were offset in part by decreases in sales of VEPESID*,
CORGARD*, Isovue and AMIKIN*. In 1993, sales in the segment increased
3%, primarily as a result of increases in PRAVACHOL*, MONOPRIL*,
anti-cancer, anti-infective and central nervous system drug sales which
were partially offset by decreases in CAPOTEN* and CORGARD*.
Operating profit margin, excluding the 1995 provision for restructuring,
remained relatively constant at 32.7% in 1995, compared to 32.6% in 1994
and 32.7% in 1993.
In the Medical Devices Segment, the Company continued to maintain its
strong leadership positions in the orthopaedic implants, arthroscopy,
powered instruments, ostomy and wound care products markets. Sales of
$1,906 million reflected a 13% increase over prior year levels.
Excluding Calgon Vestal Laboratories, a wound and skin care and
infection control products business purchased in January 1995, and
Xomed-Treace, Inc., which was divested in April 1994, sales increased
7%, reflecting a 4% increase due to volume and a 3% increase due to the
favorable effect of foreign currency translation. Price increases had
no effect on sales growth for the year. Excluding the acquisition,
divestiture and the effect of exchange rate fluctuations, domestic sales
increased 1% and international sales increased 7%. ConvaTec, a division
of the Company, is the worldwide market share leader in ostomy care
products. Sales of these products increased 14% over the prior year,
primarily due to volume growth of the ACTIVE LIFE/COLODRESS* and
SURFIT/COMBIHESIVE/SECURE* product lines in the U.S. and international
markets. Excluding the acquisition of Calgon Vestal Laboratories, sales
of ConvaTec wound care products increased 17%, due to the ongoing
22
<PAGE>
success of the DUODERM* product line. The Company's Zimmer division is
the world market share leader in knee and hip replacements. Worldwide
sales of its prosthetic implants increased 3%, led by sales of the
NEXGEN* Complete Knee Solution, introduced in 1995, and the continued
success of the CENTRALIGN* Precoat Hip Prosthesis. Sales of the
Company's arthroscopy products experienced strong growth, driven by the
APEX* Universal Drive and Irrigation System, introduced in 1995.
In 1994, worldwide sales of medical devices increased 6% as a result of
increased sales of prosthetic implants, ostomy and wound care products,
offset in part by volume declines of other product lines divested in
1994 and 1993. In 1993, sales in the segment increased 2%, primarily
due to increased sales of prosthetic implants, ostomy and wound care
products.
Operating profit margin in the medical devices segment, excluding the
1995 provision for restructuring, was 27.0% in 1995, 29.5% in 1994 and
28.1% in 1993. The 1995 decline resulted from increased research and
development and sales force expenditures. The increase in 1994 to 29.5%
from 28.1% in 1993 resulted from declines in selling expenses as a
percentage of sales.
Sales in the Nonprescription Health Products Segment, which includes the
Company's worldwide consumer medicines and nutritional products
businesses, increased 22% to $2,495 million. In September 1994, the
Company acquired the remaining ownership interest of the UPSA Group, the
leading maker and marketer of analgesics in France and Belgium and a
world leader in effervescent technology. Excluding the acquisition of
the UPSA Group, sales increased 11%, reflecting volume growth. Price
increases and foreign currency translation had no effect on sales growth
for the year. Excluding the acquisition and the effect of exchange rate
fluctuations, domestic sales increased 10%, while international sales
increased 15%. In 1995, the Company's Mead Johnson Nutritional Group
became the U.S. market leader in infant formula. Volume gains in the
Company's principal infant formulas, the milk-based ENFAMIL* and the
soy-based PROSOBEE*, increased with the addition of new sole-source
contracts, including New York, Florida, Georgia, California and the
Western States Alliance in late 1994 and 1995 under the federal
government's WIC program, as well as strong gains in the non-WIC
segments. Sales of LACTOFREE*, a milk-based, lactose-free infant
formula, and NUTRAMIGEN* infant formula also increased, as did the
Company's line of SUSTAGEN* products. BOOST* and SUSTACAL*, two
nutritional beverages launched to consumers in 1995, performed well.
Sales of analgesics increased primarily due to the strong performance of
EXCEDRIN*, the Company's leading analgesic in the U.S., benefiting from
the introduction of EXCEDRIN* Gel Tabs in 1995, strong growth of
BUFFERIN* in Japan and sales of EFFERALGAN*, DAFALGAN* and ASPIRINE
UPSA* in Europe.
In 1994, worldwide sales of nonprescription health products increased
4%, due to increased sales of ENFAMIL*, the introductory sales of NEXT
STEP* Toddler Formula, as well as increased sales of EXCEDRIN*,
BUFFERIN* and the addition of products from the UPSA Group. In 1993,
sales in the segment remained at prior year levels as domestic declines,
primarily in analgesics sales, were offset by international increases,
primarily in sales of BUFFERIN* and ISOCAL* adult nutritional products.
23
<PAGE>
Operating profit margin, excluding the 1995 provision for restructuring,
decreased to 18.5% in 1995 compared to 22.3% in 1994, primarily due to
lower margins on infant formula products as a result of increased
participation in the WIC program and increased advertising and marketing
expenses in support of the BOOST* and the SUSTACAL* product launches.
In 1994, operating profit margin decreased to 22.3% from 23.6% in 1993,
partially as a result of higher manufacturing costs.
Sales in the Toiletries and Beauty Aids Segment, where Bristol-Myers
Squibb has strong franchises in haircoloring, hair care and skin care
products, increased 21% in 1995 to $1,556 million. 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. Excluding the acquisition of Matrix,
sales increased 10%, reflecting an 8% increase due to volume, a 3%
increase due to pricing and a 1% decrease due to the unfavorable effect
of foreign currency translation. Excluding the acquisition and foreign
currency translation, domestic sales increased 7%, while international
sales increased 18% over 1994. The Company's Clairol division continued
to maintain its market share leadership in the U.S. in the haircolorings
product line. Sales of the Company's haircoloring products were higher,
increasing 10% primarily due to NICE 'N EASY* and the continued success
of NATURAL INSTINCTS*. Hair care product sales benefited from the
SYSTEME BIOLAGE*, VAVOOM!* and MATRIX ESSENTIALS* lines from Matrix
Essentials, Inc., and from the introduction of the HERBAL ESSENCES*
complete line of shampoos and conditioners. The Company's skin care
products, primarily the SEA BREEZE* and MATRIX* skin care lines, and the
MUM* line of anti-perspirants and deodorants, also contributed to the
segment's growth.
In 1994, sales in the toiletries and beauty aids segment increased 4%,
primarily due to increased sales of haircoloring, hair care and skin
care products, partially offset by decreases in anti-perspirants and
deodorants sales and the 1993 divestiture of the Clairol beauty
appliance business. In 1993, sales in the segment increased 1%
primarily due to increases in sales of haircoloring and skin care
products.
Operating profit margin in 1995, excluding the 1995 provision for
restructuring, was 10.2% compared to 13.1% in 1994, due to increased
advertising and promotion expenditures related to new product
introductions and established products. In 1994, the operating profit
margin of 13.1% remained relatively unchanged from the 13.2% reported in
1993.
GEOGRAPHIC AREAS
- ----------------
Bristol-Myers Squibb products are available in virtually every country
in the world; its largest markets are the U.S., France and Japan.
In 1995, sales in the U.S. increased 10%, primarily due to strong growth
from sales of TAXOL*, PRAVACHOL*, PARAPLATIN*, ZERIT*, ENFAMIL*,
PROSOBEE*, LACTOFREE*, EXCEDRIN* and NATURAL INSTINCTS* haircoloring.
Also contributing to sales growth in the U.S., were the successful
product launches of Glucophage, SERZONE*, the NEXGEN* Complete Knee
Solution, BOOST* and the HERBAL ESSENCES* complete line of shampoos and
conditioners, in addition to products from the acquisitions of Matrix
24
<PAGE>
Essentials and Calgon Vestal Laboratories. Sales in the U.S., excluding
acquisitions, increased 7% compared to 1994. Excluding the 1995
provision for restructuring, operating profit margin was 27.3% in 1995
compared to 30.1% in 1994. The decrease in 1995 was the result of lower
gross margins on WIC sales and increased advertising and promotion
expenditures for new product launches. In 1994, sales in the U.S.
increased 4%, primarily due to strong pharmaceutical sales and sales
from Matrix Essentials, offset in part by volume declines due to the
divestiture of certain businesses in 1993 and early 1994. Operating
profit margin remained relatively constant at 30.1% in 1994 from 30.0%
in 1993.
In 1995 and 1994, international sales increased 22% and 7%,
respectively. Excluding the effect of foreign currency translation,
international sales increased 19% in 1995 and 6% in 1994.
Sales in Europe, Mid-East and Africa increased 30% due to strong sales
growth of PRAVACHOL*, TAXOL*, ampicillin, amoxicillin, DURICEF*, ostomy
and wound care products and the introductory sales of MAXIPIME*. Sales
of EFFERALGAN*, DAFALGAN*, and ASPIRINE UPSA*, analgesic products from
the UPSA Group, also contributed to sales growth in the region.
Excluding the 1995 provision for restructuring, operating profit margin
increased 25.6% in 1995 from 21.5% in 1994, primarily as a result of
higher utilization of manufacturing facilities in lower tax
jurisdictions. In 1994, sales in Europe, Mid-East and Africa increased
6%, primarily due to sales from UPSA, increased sales of CAPOTEN* and
MONOPRIL* and introductory sales of TAXOL*. In 1994, operating profit
margin increased to 21.5% from 19.3% in 1993, primarily due to reduced
operating costs in the pharmaceutical products segment.
Sales in Other Western Hemisphere countries, net of inter-area sales,
increased 5% in 1995 due to strong sales of TAXOL*, cardiovascular drugs,
SERZONE* and ostomy care products. These increases were partially offset
by the unfavorable effect of foreign currency translation. Excluding the
1995 provision for restructuring, operating profit margin decreased to
15.2% from 20.5% in 1994 primarily as a result of lower foreign exchange
gains. In 1994, sales in Other Western Hemisphere countries increased 6%
primarily due to increased sales of anti-infective and cardiovascular
drugs, haircoloring products and the successful launch of TAXOL* in a
number of countries, including Brazil and Argentina. The 1994 operating
profit margin increased to 20.5% in 1994 from 20.0% in 1993 primarily due
to improvements in the pharmaceutical products segment.
Sales in the Pacific, net of inter-area sales, increased 16% in 1995 as a
result of increased sales of BUFFERIN*, ENFALAC*, ENFAPRO*, SUSTAGEN
JUNIOR*, ALACTA*, anti-infective and cardiovascular drugs, and the SEA
BREEZE* product line. Excluding the 1995 provision for restructuring,
operating profit margin was 10.8% in 1995 compared to 13.6% in 1994 due
to increased advertising and promotion expenses in support of new product
launches. In 1994, sales in the Pacific area increased 9%, as a result
of favorable foreign currency translation, increased sales of BUFFERIN*
analgesics, ENFAPRO* follow-on formulas and the launch of SEA BREEZE*
hair care products in Japan. In 1994, operating profit margin decreased
to 13.6% from 15.8% in 1993, partially due to declines in the medical
devices and nonprescription health products segments.
25
<PAGE>
FINANCIAL POSITION
- ------------------
The Company considers cash, time deposits and marketable securities as
its principal measures of liquidity. These items totaled $2.2 billion at
December 31, 1995, compared to $2.4 billion and $2.7 billion at December
31, 1994 and 1993, respectively. Working capital was $2.2 billion at
December 31, 1995, compared to $2.4 billion and $3.5 billion at December
31, 1994 and 1993, respectively. Working capital decreased in large
measure as a result of product liability costs, acquisitions, dividends
and the Company's continuing share repurchase program. Cash, time
deposits and marketable securities and the conversion of other working
capital items are expected to be adequate to fund the near-term operating
needs 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 11 to the financial statements.
Internally generated cash provided by operations was $2.5 billion in
1995, $2.3 billion in 1994 and $2.6 billion in 1993. Cash provided by
operations continued to be the Company's primary source of funds used to
finance operating needs, productivity initiatives and 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 $1.7 billion in capital expansion during the
past three years. In 1995, the Company opened powder-processing plants
in Zeeland, Michigan, the largest infant formula powder plant in the
world, and in Guangzhou, China. Cash provided by operations was also
used to pay dividends of nearly $4.5 billion over the past three years
and to fund the $1.4 billion purchase of nearly 24 million shares of the
Company's common stock over the same period.
26
<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,
---------------------------
1995 1994 1993
------- ------- -------
Net Sales $13,767 $11,984 $11,413
------- ------- -------
Expenses:
Cost of products sold 3,637 3,122 3,029
Marketing, selling and administrative 3,670 3,166 3,098
Advertising and product promotion 1,646 1,367 1,255
Research and development 1,199 1,108 1,128
Special charge 950 750 500
Provision for restructuring 310 - -
Other (47) (84) (168)
------- ------- -------
11,365 9,429 8,842
------- ------- -------
Earnings Before Income Taxes 2,402 2,555 2,571
Provision for income taxes 590 713 612
------- ------- -------
Net Earnings $ 1,812 $ 1,842 $ 1,959
======= ======= =======
Earnings Per Common Share $3.58 $3.62 $3.80
===== ===== =====
Average Common Shares Outstanding
(in millions) 506 509 515
=== === ===
Year Ended December 31,
--------------------------
1995 1994 1993
------ ------ ------
Retained Earnings, January 1 $7,600 $7,243 $6,769
Net earnings 1,812 1,842 1,959
------ ------ ------
9,412 9,085 8,728
Less dividends 1,495 1,485 1,485
------ ------ ------
Retained Earnings, December 31 $7,917 $7,600 $7,243
====== ====== ======
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,
---------------------------
1995 1994 1993
------- ------- -------
ASSETS
- ------
Current Assets:
Cash and cash equivalents $ 1,645 $ 1,642 $ 2,421
Time deposits and marketable securities 533 781 308
Receivables, net of allowances 2,356 2,043 1,859
Inventories 1,451 1,397 1,322
Prepaid expenses 1,033 847 660
------- ------- -------
Total Current Assets 7,018 6,710 6,570
Property, Plant and Equipment 3,760 3,666 3,374
Insurance Recoverable 959 968 1,000
Excess of cost over net tangible assets
received in business acquisitions 1,219 939 191
Other Assets 973 627 966
------- ------- -------
$13,929 $12,910 $12,101
======= ======= =======
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,
---------------------------
1995 1994 1993
------- ------- -------
LIABILITIES
- -----------
Current Liabilities:
Short-term borrowings $ 575 $ 725 $ 177
Accounts payable 848 693 649
Accrued expenses 1,939 1,481 1,450
U.S. and foreign income taxes payable 744 740 689
Product liability 700 635 100
------- ------- -------
Total Current Liabilities 4,806 4,274 3,065
Product Liability 1,645 1,201 1,370
Other Liabilities 1,021 1,087 1,138
Long-Term Debt 635 644 588
------- ------- -------
Total Liabilities 8,107 7,206 6,161
------- ------- -------
STOCKHOLDERS' EQUITY
- --------------------
Preferred stock, $2 convertible series:
Authorized 10 million shares; issued and
outstanding 19,023 in 1995, 21,857 in
1994 and 25,798 in 1993, liquidation
value of $50 per share - - -
Common stock, par value of $.10 per share:
Authorized 1.5 billion shares; issued
540,185,639 in 1995, 540,173,669 in 1994
and 532,688,458 in 1993 54 54 53
Capital in excess of par value of stock 375 397 353
Cumulative translation adjustments (327) (301) (332)
Retained earnings 7,917 7,600 7,243
------- ------- -------
8,019 7,750 7,317
Less cost of treasury stock - 34,953,311
common shares in 1995, 32,887,848 in 1994
and 20,782,281 in 1993 2,197 2,046 1,377
------- ------- -------
Total Stockholders' Equity 5,822 5,704 5,940
------- ------- -------
$13,929 $12,910 $12,101
======= ======= =======
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,
-------------------------
1995 1994 1993
------ ------ ------
Cash Flows From Operating Activities:
Net Earnings $1,812 $1,842 $1,959
Depreciation and amortization 448 328 308
Special charge 950 750 500
Provision for restructuring 310 - -
Other operating items (34) 18 49
Receivables (319) (63) 41
Inventories (50) (36) 129
Accounts payable 155 (20) 134
Accrued expenses 166 (73) (77)
Income taxes (252) (8) (197)
Product liability (441) (384) (93)
Other assets and liabilities (246) (53) (173)
----- ------ -----
Net Cash Provided by Operating Activities 2,499 2,301 2,580
------ ------ ------
Cash Flows From Investing Activities:
Proceeds from sales of time deposits and
marketable securities 349 35 993
Purchases of time deposits and marketable
securities (80) (482) (1,049)
Additions to fixed assets (513) (573) (570)
Proceeds from sales of businesses - 285 98
Business acquisitions (350) (667) (63)
Other, net (37) (22) (6)
------ ------ ------
Net Cash Used in Investing Activities (631) (1,424) (597)
------ ------ ------
Cash Flows From Financing Activities:
Short-term borrowings (181) 496 (228)
Long-term debt (10) 27 394
Issuances of common stock under stock plans 71 24 38
Purchases of treasury stock (244) (701) (419)
Dividends paid (1,495) (1,485) (1,485)
------ ------ ------
Net Cash Used in Financing Activities (1,859) (1,639) (1,700)
------ ------ ------
Effect of Exchange Rates on Cash (6) (17) 1
------ ------ ------
Increase (Decrease) in Cash and Cash
Equivalents 3 (779) 284
Cash and Cash Equivalents at Beginning of
Year 1,642 2,421 2,137
------ ------ ------
Cash and Cash Equivalents at End of Year $1,645 $1,642 $2,421
====== ====== ======
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 17, the Company is party to a revised 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 then pending settlement
and cost of the litigation (recorded as Product Liability), offset by
$1.0 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.
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.
In the fourth quarter of 1995, the Company, with certain other
defendants, entered into a revised settlement of the breast implant
product liability litigation. The actual cost to the Company of the
breast implant litigation may be dependant upon a number of factors
which will not become known for some time, including the number of
class members that participate in the revised settlement, the kinds of
claims approved, the dollar value thereof and the disposition of
claims of non-participants. However, based on current estimates, the
Company has recorded a charge to earnings in respect of breast implant
litigation of $950 million before taxes, $590 million after taxes, or
$1.17 per share.
Note 3 ACQUISITIONS AND DIVESTITURES
- -------------------------------------
In January 1996, the Company acquired control of Pharmavit
Gyogyszer-es Elelmiszeripari Reszvenytarsasag, one of Hungary's
leading manufacturers of over-the-counter medicines, nutritional
products and generic pharmaceuticals.
In September 1995, the Company acquired A/S GEA Farmaceutisk Fabrik, a
leading manufacturer and marketer of branded generic pharmaceuticals
for the Scandinavian market.
In January 1995, the Company completed the acquisition of Calgon
Vestal Laboratories, a wound and skin care and infection control
products business.
In 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, and completed the
acquisition of the remaining interest in the UPSA Group which develops
and markets a wide range of nonprescription health and pharmaceutical
products. The Company sold Squibb Diagnostics and completed the sale
of Xomed-Treace, Inc.
Note 4 RESTRUCTURING
- ---------------------
The Company recorded a $310 million restructuring charge, $198 million
after taxes, in the fourth quarter of 1995. The restructuring charge
relates to the consolidation of plants and facilities, and related
employee terminations. The restructuring charge consists of
employee-related costs of $190 million, $100 million of asset write-downs
and $20 million of other related expenses.
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:
1995 1994 1993
---- ---- ----
Balance, January 1 $301 $332 $208
Effect of balance sheet translations:
Amount 21 (43) 141
Tax effect 5 12 (17)
---- ---- ----
Balance, December 31 $327 $301 $332
==== ==== ====
Included in net earnings were losses of $33 million in 1995, $44
million in 1994 and a gain of $21 million in 1993 resulting from
foreign currency transactions and translation adjustments.
Note 6 OTHER INCOME AND EXPENSES
- ---------------------------------
Year Ended December 31,
-----------------------
1995 1994 1993
---- ---- ----
Interest income $139 $124 $ 96
Interest expense (97) (68) (57)
Other - net 5 28 129
---- ---- ----
$ 47 $ 84 $168
==== ==== ====
Interest expense was reduced by $15 million in 1995, $15 million in
1994 and $14 million in 1993 due to interest capitalized on major
property, plant and equipment projects. Cash payments for interest,
net of amounts capitalized, were $78 million, $62 million and $51
million in 1995, 1994 and 1993, 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,
------------------------
1995 1994 1993
------ ------ ------
U.S. $1,195 $1,328 $1,561
Non-U.S. 1,207 1,227 1,010
------ ------ ------
$2,402 $2,555 $2,571
====== ====== ======
The provision for income taxes consisted of:
Year Ended December 31,
------------------------
1995 1994 1993
------ ----- -----
Current:
U.S. $466 $423 $299
Non-U.S. 356 377 307
---- ---- ----
822 800 606
---- ---- ----
Deferred:
U.S. (200) (92) (35)
Non-U.S. (32) 5 41
---- ---- ----
(232) (87) 6
---- ---- ----
$590 $713 $612
==== ==== ====
Income taxes paid during the year were $856 million, $718 million and
$783 million in 1995, 1994 and 1993, respectively.
The Company's provision for income taxes in 1995, 1994 and 1993 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
-------------------------
1995 1994 1993
----- ----- -----
U.S. statutory rate 35.0% 35.0% 35.0%
Effect of operations in
Puerto Rico and Ireland (9.7) (9.4) (11.5)
State and local taxes .8 1.4 1.1
Other (1.5) .9 (.8)
----- ----- -----
24.6% 27.9% 23.8%
===== ===== =====
Prepaid taxes at December 31, 1995, 1994 and 1993 were $786 million, $591
million and $377 million, respectively. The deferred income tax asset,
included in Other Assets, at December 31, 1995, 1994 and 1993 was $130
million, $65 million and $230 million, respectively.
The components of prepaid and deferred income taxes consisted of:
December 31,
------------------------
1995 1994 1993
---- ---- ----
Product liability $527 $304 $183
Postretirement and pension benefits 163 247 275
Restructuring and integrating businesses 130 38 149
Depreciation (210) (205) (198)
Other 306 272 198
---- ---- ----
$916 $656 $607
==== ==== ====
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 $2,254 million at
December 31, 1995.
Note 8 INVENTORIES December 31,
- ------------------- --------------------------
1995 1994 1993
------ ------ ------
Finished goods $ 892 $ 781 $ 741
Work in process 180 233 239
Raw and packaging materials 379 383 342
------ ------ ------
$1,451 $1,397 $1,322
====== ====== ======
35
<PAGE>
BRISTOL-MYERS SQUIBB COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions)
Note 9 PROPERTY, PLANT AND EQUIPMENT
- -------------------------------------
December 31,
--------------------------
1995 1994 1993
------ ------ ------
Land $ 160 $ 159 $ 148
Buildings 2,296 2,103 1,814
Machinery, equipment and fixtures 3,403 3,061 2,779
Construction in progress 405 513 495
------ ------ ------
6,264 5,836 5,236
Less accumulated depreciation 2,504 2,170 1,862
------ ------ ------
$3,760 $3,666 $3,374
====== ====== ======
Note 10 SHORT-TERM BORROWINGS AND LONG-TERM DEBT
- -------------------------------------------------
Short-term borrowings included amounts due to banks of $558 million, $438
million and $163 million at December 31, 1995, 1994 and 1993,
respectively, and current installments of long-term debt of $17 million,
$21 million and $14 million at December 31, 1995, 1994 and 1993,
respectively. At December 31, 1994, short-term borrowings included a
deferred payment of $266 million primarily resulting from the acquisition
of the remaining ownership interest in the UPSA Group.
The Company has short-term lines of credit with domestic and foreign
banks. At December 31, 1995, the unused portions of these lines of credit
were approximately $200 million and $597 million, respectively.
The components of long-term debt were:
December 31,
------------------------
1995 1994 1993
---- ---- ----
7.15% Debentures, due in 2023 $343 $343 $343
5.0% Term Loan, due in 2000 69 71 64
6.18% Term Loan, due in 1997 64 65 60
3.51% Term Loan, due in 2005 59 - -
5.75% Industrial Revenue Bonds,
due in 2024 34 34 -
6 3/8% and 6 1/2% Notes, due
annually from 1995 to 2004 24 27 30
5.3% Term Loan, paid in 1995 - 60 55
Other, due in varying amounts
through 2016 42 44 36
---- ---- ----
$635 $644 $588
==== ==== ====
36
<PAGE>
BRISTOL-MYERS SQUIBB COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions)
Long-term debt at December 31, 1995 was payable:
Years Ending December 31,
- -------------------------
1997 $ 81
1998 11
1999 9
2000 74
2001 5
2002 and later 455
----
$635
====
Note 11 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 $1,385 million, $1,117 million and
$1,210 million at December 31, 1995, 1994 and 1993, 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, 1995, 1994 and
1993 were $1,377 million, $1,200 million and $790 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, 1995, 1994 and 1993, the carrying value of all financial
instruments, both short and long-term, approximated their fair values.
37
<PAGE>
BRISTOL-MYERS SQUIBB COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions)
Note 12 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,
------------------------
1995 1994 1993
----- ----- -----
Service cost - benefits earned during the year $ 101 $ 114 $ 104
Interest cost on projected benefit obligation 183 166 152
Actual (earnings) losses on plan assets (406) 11 (232)
Net amortization and deferral 213 (158) 54
----- ----- -----
Net pension expense $ 91 $ 133 $ 78
===== ===== =====
The weighted average actuarial assumptions for the Company's pension plans
were as follows:
December 31,
-------------------------
1995 1994 1993
----- ----- -----
Discount rate 7.3% 8.8% 7.0%
Compensation increase 4.5% 5.3% 4.5%
Long-term rate of return 10.0% 10.0% 11.0%
38
<PAGE>
BRISTOL-MYERS SQUIBB COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions)
The funded status of the plans was as follows:
December 31,
---------------------------
1995 1994 1993
------- ------- -------
Actuarial present value of accumulated
benefit obligation:
Vested $(2,059) $(1,624) $(1,758)
Non-vested (217) (178) (201)
------- ------- -------
$(2,276) $(1,802) $(1,959)
======= ======= =======
Total projected benefit obligation $(2,689) $(2,138) $(2,339)
Plan assets at fair value 2,307 1,836 1,702
------- ------- -------
Plan assets less than projected benefit
obligation (382) (302) (637)
Unamortized net assets at adoption (76) (90) (103)
Unrecognized prior service cost 78 89 96
Unrecognized net losses 516 309 510
Adjustment required to recognize minimum
pension liability (48) (23) (171)
------- ------- -------
Prepaid (Accrued) pension expense $ 88 $ (17) $ (305)
======= ======= =======
In 1995, the increase in total projected benefit obligation is due to a
lower discount rate and the increase in plan assets is due to
significantly higher earnings and cash contributions.
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 1995 and 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 $150
million, $120 million and $113 million in an unfunded benefit
equalization plan at December 31, 1995, 1994 and 1993, 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.
39
<PAGE>
BRISTOL-MYERS SQUIBB COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions)
Note 13 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, 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
Issued pursuant to stock plans,
options, and rights - (1,602,537) (22)
Conversions of preferred stock 11,970 - -
Purchases - 3,668,000 -
----------- ---------- ----
Balance, December 31, 1995 540,185,639 34,953,311 $375
=========== ========== ====
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 1995,
1994 and 1993 were due to conversions into shares of common stock.
Dividends per common share were $2.96 in 1995, $2.92 in 1994 and $2.88
in 1993.
Stock Compensation Plans
- ------------------------
Under the Company's stock option plans, officers, directors and key
employees may be granted options to purchase the Company's common stock
at no less than 100% of the market price on the date the option is
granted. Options generally become exercisable in installments of 25%
per year on each of the first through the fourth anniversaries of the
grant date and have a maximum term of ten years. 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. The plans also provide for the
granting of performance-based stock options to certain key executives.
40
<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.
Under the TeamShare Stock Option Plan, all full-time employees,
excluding key executives, meeting certain years of service requirements
are granted options to purchase the Company's common stock at the
market price on the date the options are granted. The Company has
authorized 15,000,000 shares for issuance under the plan. A total of
7,673,600 options were granted in 1995 under the plan with 200 options
granted to each eligible employee. Individual grants generally become
exercisable on or after the third anniversary of the grant date.
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. Compensation expense is recognized over the
restricted period. At December 31, 1995, a total of 653,335 shares
were outstanding under the plan.
The Company applies Accounting Principles Board Opinion No. 25,
Accounting for Stock Issued to Employees, and related interpretations
in accounting for its plans. Accordingly, no compensation expense has
been recognized for its stock-based compensation plans other than for
restricted stock and performance-based awards. Had compensation cost
for the Company's other stock option plans been determined based upon
the fair value at the grant date for awards under these plans
consistent with the methodology prescribed under Statement of Financial
Accounting Standards No. 123, Accounting for Stock-Based Compensation,
the Company's net income and earnings per share would have been reduced
by approximately $35 million, or $.07 per share. The fair value of the
options granted during 1995 is estimated as $12.94 on the date of grant
using the Black-Scholes option-pricing model with the following
assumptions: dividend yield 4.2%, volatility of 18.2%, risk-free
interest rate of 6.9%, assumed forfeiture rate of 3%, and an expected
life of 7 years.
41
<PAGE>
BRISTOL-MYERS SQUIBB COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions)
Stock option and long-term performance award transactions were:
Weighted
Average of
Shares of Common Stock Exercise
--------------------------- Price
Available for Under of Shares
Option/Award Plan Under Plan
------------- ----------- ----------
Balance, December 31, 1992 4,259,730 14,955,760 $61.57
Authorized 4,661,859 - -
Granted (5,464,022) 5,464,022 56.58
Exercised - (1,264,638) 32.65
Lapsed 787,946 (790,981) 70.52
---------- ----------
Balance, December 31, 1993 4,245,513 18,364,163 60.80
Authorized 4,607,156 - -
Granted (5,296,982) 5,296,982 51.93
Exercised - (686,507) 32.97
Lapsed 1,012,237 1,027,651) 62.48
---------- ----------
Balance, December 31, 1994 4,567,924 21,946,987 56.99
Authorized 19,565,572 - -
Granted (13,449,952) 13,449,952 61.79
Exercised - (2,012,827) 40.96
Lapsed 1,129,560 (1,129,574) 61.92
---------- ----------
Balance, December 31, 1995 11,813,104 32,254,538 $59.76
========== ==========
The following table summarizes information concerning currently outstanding
and exercisable options:
Options Outstanding Options Exercisable
------------------------------------ -----------------------
Weighted
Average Weighted Weighted
Remaining Average Average
Range of Number Contractual Exercise Number Exercise
Exercise Prices Outstanding Life Price Exercisable Price
- --------------- ----------- ----------- -------- ----------- --------
$20 - $40 782,226 1.93 $28.34 782,226 $28.34
$40 - $50 1,103,858 2.68 43.44 1,103,858 43.44
$50 - $60 11,811,741 6.22 53.64 7,370,348 53.82
$60 - $70 12,928,294 9.15 62.11 80,325 64.37
$70 - $90 5,628,419 5.80 77.23 4,897,199 77.31
---------- ----------
32,254,538 14,233,956
========== ==========
At December 31, 1995, 51,379,361 shares of common stock were reserved for
issuance pursuant to stock plans, options and conversions of preferred
stock.
42
<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 14 LEASES
- ---------------
Minimum rental commitments under all noncancelable operating leases,
primarily real estate, in effect at December 31, 1995 were:
Years Ending December 31,
- -------------------------
1996 $118
1997 99
1998 85
1999 72
2000 66
Later years 282
----
Total minimum payments 722
Less total minimum sublease rentals 169
----
Net minimum rental commitments $553
====
Operating lease rental expense (net of sublease rental income of $25
million in 1995, $23 million in 1994 and $21 million in 1993) was
$135 million in 1995, $136 million in 1994 and $142 million in 1993.
Note 15 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.
43
<PAGE>
BRISTOL-MYERS SQUIBB COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions)
Cost for the Company's postretirement benefit plans included the
following components:
Year Ended
December 31,
-----------------
1995 1994 1993
---- ---- ----
Service cost - benefits earned during the year $ 8 $ 9 $ 8
Interest cost on accumulated postretirement
benefit obligation 41 37 32
Actual earnings on plan assets (11) - (2)
Net amortization and deferral 7 (2) -
---- ---- ----
Net postretirement benefit expense $ 45 $ 44 $ 38
==== ==== ====
The status of the plans was as follows:
December 31,
-------------------
1995 1994 1993
----- ----- -----
Accumulated postretirement benefit obligation:
Retirees $(403) $(386) $(380)
Fully eligible active plan participants (17) (13) (17)
Other active plan participants (159) (118) (124)
----- ----- -----
(579) (517) (521)
Plan assets at fair value 74 41 28
----- ----- -----
Accumulated postretirement benefit obligation
in excess of plan assets (505) (476) (493)
Unrecognized prior service cost 3 1 (1)
Unrecognized net losses 38 10 42
----- ----- -----
Accrued postretirement benefit expense $(464) $(465) $(452)
===== ===== =====
For measurement purposes, an annual rate of increase in the per capita
cost of covered health care benefits of 9.1% for participants under age 65
and 7.9% for participants age 65 and over was assumed for 1996; the rate
was assumed to decrease gradually to 4.8% 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, 1995 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 7.3% in 1995, 8.8% in 1994 and 7.0%
in 1993.
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 1995 and 1994 and 11.0% in 1993.
44
<PAGE>
BRISTOL-MYERS SQUIBB COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions)
Note 16 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%, 20% 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.
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 1995 and 1994 and 65% in 1993, and
deodorants, anti-perspirants and other toiletries and beauty aids.
Unallocated expenses principally consist of general administrative
expenses and net interest income. 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,
1995, 1994 and 1993, respectively, were: United States - $977
million, $867 million and $859 million; Europe, Mid-East and Africa -
$542 million, $428 million and $504 million; Other Western Hemisphere -
$49 million, $37 million and $41 million; and Pacific - $21 million,
$28 million and $43 million. These sales are usually billed at or
above manufacturing costs.
Net assets relating to operations outside the United States amounted
to $2,609 million, $2,286 million and $1,511 million at December 31,
1995, 1994 and 1993, respectively.
45
<PAGE>
BRISTOL-MYERS SQUIBB COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions)
INDUSTRY SEGMENTS Net Sales Profit(a)
- ----------------- ----------------------- -------------------------
1995 1994 1993 1995 1994 1993
------- ------ ------- ------ ------ ------
Pharmaceutical Products $ 7,810 $ 6,970 $ 6,524 $2,300 $2,270 $2,133
Medical Devices 1,906 1,685 1,693 493 497 476
Nonprescription
Health Products 2,495 2,043 1,964 454 456 463
Toiletries & Beauty Aids 1,556 1,286 1,232 128 168 163
------- ------- ------- ------ ------ ------
Net sales and
operating profit $13,767 $11,984 $11,413 $3,375 $3,391 $3,235
======= ======= ======= ====== ====== ======
GEOGRAPHIC AREAS Net Sales Profit(b)
- ---------------- ----------------------- -------------------------
1995 1994 1993 1995 1994 1993
------- ------- ------- ------ ------ ------
United States $ 8,662 $ 7,846 $ 7,586 $2,299 $2,360 $2,277
Europe, Mid-East and
Africa 4,074 3,139 3,062 833 675 591
Other Western Hemisphere 1,097 1,039 987 152 213 197
Pacific 1,523 1,320 1,225 147 179 194
Inter-area eliminations (1,589) (1,360) (1,447) (56) (36) (24)
------- ------ ------- ------ ------ ------
Net sales and
operating profit $13,767 $11,984 $11,413 3,375 3,391 3,235
======= ======= =======
Unallocated expenses(c) (973) (836) (664)
------ ------ ------
Earnings before
income taxes $2,402 $2,555 $2,571
====== ====== ======
(a) The 1995 operating profit of the Company's industry segments
included the provision for restructuring as follows: Pharmaceutical
Products - $252 million; Medical Devices - $22 million;
Nonprescription Health Products - $6 million; and Toiletries
and Beauty Aids - $30 million.
(b) The earnings before income taxes included the 1995 provision for
restructuring as follows: United States - $66 million; Europe,
Mid-East and Africa - $211 million; Other Western Hemisphere - $15
million; Pacific - $18 million.
(c) Unallocated expenses included a special charge for pending and
future product liability claims of $950 million, $750 million and
$500 million in 1995, 1994 and 1993, respectively.
46
<PAGE>
BRISTOL-MYERS SQUIBB COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions)
INDUSTRY SEGMENTS Year-End Assets
- ----------------- --------------------------
1995 1994 1993
------ ------ ------
Pharmaceutical Products $5,497 $5,180 $4,628
Medical Devices 1,414 1,033 1,030
Nonprescription Health Products 1,800 1,635 872
Toiletries and Beauty Aids 669 663 548
------ ------ ------
Identifiable segment assets $9,380 $8,511 $7,078
====== ====== ======
GEOGRAPHIC AREAS Year-End Assets
- ---------------- ---------------------------
1995 1994 1993
------- ------- -------
United States $ 5,254 $ 4,669 $ 4,591
Europe, Mid-East and Africa 3,157 2,894 1,708
Other Western Hemisphere 462 416 443
Pacific 1,032 949 829
Inter-area eliminations (525) (417) (493)
------- ------- -------
Identifiable geographic assets 9,380 8,511 7,078
Other assets(d) 4,549 4,399 5,023
------- ------- -------
Total assets $13,929 $12,910 $12,101
======= ======= =======
Capital
INDUSTRY SEGMENTS Expenditures Depreciation
- ----------------- ------------------ ----------------
1995 1994 1993 1995 1994 1993
---- ---- ---- ---- ---- ----
Pharmaceutical Products $327 $379 $379 $218 $205 $194
Medical Devices 56 37 55 52 38 35
Nonprescription Health
Products 78 112 81 46 38 34
Toiletries and Beauty Aids 33 26 23 26 23 24
---- ---- ---- ---- ---- ----
Identifiable industry
totals 494 554 538 342 304 287
Other 23 23 42 23 24 21
---- ---- ---- ---- ---- ----
Consolidated totals $517 $577 $580 $365 $328 $308
==== ==== ==== ==== ==== ====
(d) Other Assets included Insurance Recoverable related to the 1993
special charge of $959 million, $968 million and $1,000 million in
1995, 1994 and 1993, respectively.
47
<PAGE>
BRISTOL-MYERS SQUIBB COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions)
Note 17 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, 1995, approximately 20,000 plaintiffs had 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 1994 class
action settlement approved by the Federal District Court in
Birmingham, Alabama; that settlement is now subject to appeals. A
revision of that settlement, known as the revised settlement, which
includes the Company, MEC and certain other defendants, was approved
on December 22, 1995. The order approving the settlement has been
appealed. The revised settlement, applicable only to domestic
claimants, currently does not include approximately 2,600 claimants
who may assert claims based upon MEC implants and who opted out of
the original settlement. Separate class action settlements for
eligible claimants have been approved in the provincial courts of
Quebec and Ontario. In January 1996, a notice of the revised
settlement was mailed to approximately 450,000 persons. Class
members who wish to do so may now opt out of the revised settlement
although the Court has cautioned class members against doing so until
they receive additional information as to the status of their claims.
It is not possible on any reliable basis to estimate how many class
members will participate in or opt out of the settlement. The cost
of the settlement is dependent upon complex and varying factors,
including the number of class members that participate in the
settlement, the kinds of claims approved and their dollar value. The
cost to the Company of resolving opt out claims is also subject to a
number of complex uncertainties in addition to the unknown quantity
and quality of such claims. In light of the uncertainties attendant
to these and other factors, it is difficult at this time to estimate
with any precision the cost of the breast implant product liability
claims to the Company. Note 2 sets forth the special charges
recorded in connection with this litigation. An additional charge to
earnings may be required as additional information relating to the
revised settlement and the litigation becomes known.
Other Actions
- -------------
The Company, one of its subsidiaries, and others are defendants in a
number of antitrust actions in various states filed on behalf of
purported statewide classes of indirect purchasers of infant formula
products and by the Attorneys General of Louisiana, Minnesota and
Mississippi, alleging a price fixing conspiracy and other violations
of state antitrust or deceptive trade practice laws and seeking
penalties and other relief. On December 6, 1995, a trial in state
court in Wichita, Kansas, in which the Company and Abbott
Laboratories were defendants, concluded with a jury verdict in favor
48
<PAGE>
BRISTOL-MYERS SQUIBB COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions)
of the defendants. This was the first infant formula indirect
purchaser case to go to trial. The courts in Colorado, Florida,
Kentucky, Nevada, North Carolina and Tennessee have dismissed similar
complaints, and the plaintiffs have or are expected to appeal those
dismissals. On June 29, 1995, the Texas Supreme Court handed down a
decision in the Company's favor, holding that the plaintiffs, as
indirect purchasers, were barred from proceeding under the Texas
Deceptive Trade Practices-Consumer Protection Act. The Company
subsequently settled a separate action brought by the Texas Attorney
General. Motions to certify classes of indirect purchasers of infant
formula have been denied in Minnesota, Michigan and by two courts in
Alabama, but granted by courts in Wisconsin and South Dakota.
As of December 31, 1995, the Company is a defendant in over 100
actions brought against the Company and more than 30 other
pharmaceutical manufacturers, drug wholesalers and pharmacy benefit
managers in various federal district courts by certain chain
drugstores, supermarket chains and independent drugstores, suing
either individually or as representatives of a nationwide class of
retail pharmacies that has been certified. These cases, which have
been coordinated for pretrial purposes, all seek treble damages and
injunctive relief on account of alleged antitrust violations in the
pricing and marketing of brand name prescription drugs. None of the
plaintiffs has specified the amount of damages claimed, but
plaintiffs in the class action have indicated that they intend to
claim damages, before trebling, ranging from 5% to approximately 20%
of the value of their purchases of brand name prescription drugs from
defendants since October 15, 1989. It is estimated that the class
represents approximately two-thirds of retail pharmacy purchases of
brand name prescription drugs during the alleged damages period. The
class action case had been scheduled to go to trial on April 11,
1996. The Company, without admitting any wrongdoing, reached an
agreement as of January 31, 1996, to settle the class action. The
settlement is subject to approval by the court. Federal cases
brought by retail pharmacies that have opted out of the class remain
pending. Cases brought by retail pharmacies in state court under
state law alleging similar grounds are proceeding in California,
Alabama, Wisconsin and Minnesota. Cases brought by consumers in
state court under state law alleging similar grounds have been
brought in California, Washington, Colorado, New York, Arizona,
Maine, Alabama and Michigan.
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.
49
<PAGE>
BRISTOL-MYERS SQUIBB COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in millions, except per share amounts)
Note 18 SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)
- ------------------------------------------------------
First Second Third Fourth
Quarter Quarter Quarter Quarter Year
------- ------- ------- ------- -------
1995:
Net Sales $3,301 $3,445 $3,413 $3,608 $13,767
Gross Profit 2,424 2,536 2,483 2,687 10,130
Net Earnings/(Loss)* 657 608 689 (142) 1,812
Earnings/(Loss) Per
Common Share* 1.29 1.20 1.36 (.28) 3.58
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
* In 1995, the fourth quarter and annual results included a charge of
$950 million ($590 million after taxes, or $1.17 per share) for
pending and future product liability claims, and a provision for
restructuring of $310 million ($198 million after taxes).
** In 1994, the fourth quarter and annual results included a charge of
$750 million ($488 million after taxes, or $.96 per share) for pending
and future product liability claims.
50
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
---------------------------------
To the Board of Directors
and Stockholders of
Bristol-Myers Squibb Company
In our opinion, the accompanying consolidated balance sheet and the
related consolidated statements of earnings and retained earnings
and of cash flows present fairly, in all material respects, the
financial position of Bristol-Myers Squibb Company and its
subsidiaries at December 31, 1995, 1994 and 1993, 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.
/s/ Price Waterhouse LLP
- ------------------------
1177 Avenue of the Americas
New York, New York 10036
January 23, 1996
51
<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 7, 1996 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 7, 1996 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 7, 1996 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 7, 1996 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.
52
<PAGE>
PART IV
-------
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
Page
Number
------
(a) 1. Financial Statements 27-30
Notes to Consolidated Financial Statements 31-50
Report of Independent Accountants 51
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 2,
1995 (incorporated herein by reference to Exhibit 3b to the Form
10-Q for the quarterly period ended March 31, 1995).
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).
53
<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, 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, and 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; and 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, 1994).
**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; as amended effective February 1, 1995,
filed herewith).
**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 as of October 1, 1994,
incorporated herein by reference to Exhibit 10f to the Form
10-K for the fiscal year ended December 31, 1994).
54
<PAGE>
**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,
and 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; as amended effective December 6, 1994, incorporated
herein by reference to Exhibit 10h to the Form 10-K for the
fiscal year ended December 31, 1994).
**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
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 (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).
55
<PAGE>
(b) Reports on Form 8-K
Reports on Form 8-K were filed on May 3, 1995 and June 19, 1995,
covering Item 5 - Other Events, and Item 7 - Financial
Statements and Exhibits, relative to the Breast Implant
Litigation.
56
<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/ Charles A. Heimbold, Jr.
------------------------------
Charles A. Heimbold, Jr.
Chairman of the Board,
President and Chief
Executive Officer
March 28, 1996
------------------------------
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 Board,
President, Chief Executive
Officer and Director
/s/ Charles A. Heimbold, Jr. (Principal Executive Officer) March 28, 1996
- ------------------------------
(Charles A. Heimbold, Jr.)
Chief Financial Officer
and Senior Vice President
Corporate Staff (Principal
/s/ Michael F. Mee Financial Officer) March 28, 1996
- -----------------------------
(Michael F. Mee)
Controller and Vice
President Corporate Staff
(Principal Accounting
/s/ Frederick S. Schiff Officer) March 28, 1996
- -----------------------------
(Frederick S. Schiff)
57
<PAGE>
Signature Title Date
--------- ----- ----
/s/ Robert E. Allen Director March 28, 1996
- -----------------------------
(Robert E. Allen)
Executive Vice
/s/ Michael E. Autera President and March 28, 1996
- ----------------------------- Director
(Michael E. Autera)
/s/ Ellen V. Futter Director March 28, 1996
- -----------------------------
(Ellen V. Futter)
/s/ Louis V. Gerstner, Jr. Director March 28, 1996
- -----------------------------
(Louis V. Gerstner, Jr.)
/s/ John D. Macomber Director March 28, 1996
- -----------------------------
(John D. Macomber)
/s/ James D. Robinson III Director March 28, 1996
- -----------------------------
(James D. Robinson III)
/s/ Andrew C. Sigler Director March 28, 1996
- -----------------------------
(Andrew C. Sigler)
/s/ Louis W. Sullivan, M.D. Director March 28, 1996
- -----------------------------
(Louis W. Sullivan, M.D.)
/s/ Kenneth E. Weg Executive Vice March 28, 1996
- ----------------------------- President, President-
(Kenneth E. Weg) Pharmaceutical Group
and Director
58
<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 designed
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 2, 1995 (incorporated
herein by reference to Exhibit 3b to Form
10-Q for the quarterly period ended
March 31, 1995).
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).
59
<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, and 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 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 on January 1, 1994, and
incorporated herein by reference to Exhibit 10d to the
Form 10-K for the fiscal year ended December 31, 1994).
** 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).
Amendment, effective February 1, 1995, to the E-1-1
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.
60
<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; as amended as of October 1,
1994, incorporated herein by reference to Exhibit
10f of the Form 10-K for the fiscal year ended
December 31, 1994).
** 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 on September 14, 1993, incorporated
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 July 1, 1993, incorporated by reference to
Exhibit 10h to the Form 10-K for the fiscal year
ended December 31, 1993; as amended effective
December 6, 1994, incorporated by reference to
Exhibit 10h to the Form 10-K for the fiscal year
Ended January 31, 1994).
** 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).
61
<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-2-1
21. Subsidiaries of the Registrant. E-3-1
23. Consent of Price Waterhouse LLP. E-4-1
27. Bristol-Myers Squibb Company Financial Data Schedule. E-5-1
62
<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, 1995 $77 $31 $8 $100
========== ========== ============ ===========
For the year ended
December 31, 1994 $80 $31 $34 $77
========== ========== ============ ===========
For the year ended
December 31, 1993 $106 $19 $45 $80
========== ========== ============ ===========
S-1
EXHIBIT 10e
-----------
AMENDMENT TO THE
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
The 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 (the
"Plan"), as amended and restated effective as of January 1, 1993, is
hereby further amended as follows:
1. Effective February 1, 1995, Article IV of the Plan is amended by
redesignating paragraph C as paragraph D and inserting the following
language as new paragraph C:
"C. Effective as of February 1, 1995, each participant in this
Plan in grade levels E07 and above or his beneficiaries shall
be entitled to receive a supplemental pension benefit equal to
the excess of the benefit that would have been payable to such
participant or his beneficiaries under the applicable
Retirement Plan determined without limiting his total years of
service to 40 years."
2. Effective February 1, 1995, new paragraph D of Article IV of the
Plan is amended by deleting the reference to "paragraphs A and B"
and inserting in lieu thereof "paragraphs A, B and C".
E-1-1
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:
- -------------------------------------------------------------------------------
1995 1994 1993
------------ ------------ ------------
(1)Average market price of Common
Stock during year $68.89 $55.89 $58.42
(2)Number of shares under option
and warrant at year-end for which
exercise price is below (1) 26,744,879 11,634,891 11,978,432
(3)Aggregate proceeds to be
received upon exercise of shares
in (2) $1,616,061,831 $570,433,755 $600,689,306
(4)Shares deemed repurchased under
treasury stock method (3) divided
by (1) 23,458,584 10,206,365 10,282,254
(5)Additional shares deemed
outstanding (2) - (4) 3,286,295 1,428,526 1,696,178
(6)(5) as a percentage of number of
shares used in computing earnings
per share .65% .28% .33%
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-2-1
<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:
- ---------------------------------------------
1995 1994 1993
------------ ------------ ------------
Restatement of Shares:
(1) Shares used in computing earnings
per share 506,070,157 508,722,399 515,245,655
(2) Additional shares deemed
outstanding:
(a) Upon issuance pursuant to stock
plans, options, rights and warrants
after assumed repurchase of shares 6,839,276 2,389,203 2,442,546
(b) Upon conversion of preferred
stock outstanding at conversion
rate of 424/100 per common share 80,658 92,674 109,384
------------ ------------ ------------
(3) Shares assumed to be outstanding
for fully diluted computation 512,990,091 511,204,276 517,797,585
============ ============ ============
Restatement of Earnings:
(4) Net earnings applicable to $1,811,562,000 $1,842,446,000 $1,959,128,000
Common Stock:
(5) Dividends on Preferred Stock 41,000 48,000 54,000
-------------- -------------- -------------
(6) Pro forma earnings applicable
to Common Stock $1,811,603,000 $1,842,494,000 $1,959,182,000
============== ============== ==============
(7) Pro forma fully diluted
earnings per share: $3.53 $3.60 $3.78
(8) Reported per share: $3.58 $3.62 $3.80
(9) Dilution: 1.40% .55% .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-2-2
Exhibit 21
----------
BRISTOL-MYERS SQUIBB COMPANY
----------------------------
SUBSIDIARY LIST
--------------
Alive & Well, Inc. (Delaware)
Allard Laboratories, Inc. (Delaware)
Bristol-Myers Squibb (Thailand) Ltd. (Delaware)
Apothecon, Inc. (Delaware)
Linson Pharma Inc. (Canada)
The B-M Group (Proprietary) Limited (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 (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 Overseas Corporation (Delaware)
Bristol-Myers Pakistan (Pvt.) Limited (Pakistan)
Bristol-Myers (Private) Ltd. (Zimbabwe)
Bristol-Myers (Zaire) Ltd. (Delaware)
Bristol-Myers Squibb A.E.B.E. (Greece)
Bristol-Myers Squibb Aktiebolag (Sweden)
Bristol Laboratorier Aktiebolag (Sweden)
Bristol-Myers Squibb Asia/Pacific, Inc. (Delaware)
E-3-1
<PAGE>
BRISTOL-MYERS SQUIBB COMPANY
----------------------------
SUBSIDIARY LIST
--------------
Bristol-Myers Squibb Belgium (Belgium)
Bristol-Myers Squibb Brasil, S.A. (Brazil)
Apothecon Farmaceutica Ltda. (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 Export SA (Switzerland)
Bristol-Myers Squibb Global Properties 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 Ilaclari, Inc. (Delaware)
Bristol-Myers Squibb Ilaclari Limited Sirketi (Turkey)
Bristol-Myers Squibb International Corporation (New York)
Bristol-Myers Squibb K.K. (Japan)
Bristol-Myers Squibb (Malaysia) Sendirian Berhad (Malaysia)
Bristol-Myers Squibb (N.Z.) Limited (New Zealand)
Bristol-Myers Squibb Norway Ltd. (Delaware)
Bristol-Myers Squibb (Philippines) Inc.
Bristol-Myers Squibb Pakistan (Pvt.) Ltd (Pakistan)
Bristol-Myers Squibb Peruana, S.A. (Peru)
Bristol-Myers Squibb Products S. A. (Switzerland)
Bristol-Myers Squibb (Proprietary) Limited (South Africa)
Bristol-Myers Squibb Puerto Rico, Inc. (Delaware)
Bristol-Myers Squibb Service Ltd. (Bermuda)
Bristol-Myers Squibb Sp. z.o.o. (Poland)
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 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)
Grove Insurance Company Ltd. (Bermuda)
Lauren Stacy Marketing, Inc. (Ohio)
Linvatec Corporation (Florida)
Listo B.V. (Netherlands)
Listo International B.V. (Netherlands)
Listo Netherlands B.V. (Netherlands)
Orpex (France)
Listo Investment B.V. (Netherlands)
E-3-2
<PAGE>
BRISTOL-MYERS SQUIBB COMPANY
----------------------------
SUBSIDIARY LIST
--------------
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)
Schuppert Meubelen Holten B.V. (The Netherlands)
A/S GEA Farmaceutisk Fabrik (doing business as) Bristol-Myers
Pharmaceuticals A/S (Denmark)
Squibb Industria Farmaceutica, S.A. (Spain)
Apothecon, S.A. (Spain)
Bristol-Myers S.A. (Spain)
Convatec, 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 GmbH (Germany)
77 Wilson St. Corp. (New Jersey)
Convatec Vertriebs G.m.b.H. (Germany)
Zimmer Chirurgie G.m.b.H. (Germany)
S&G Implants G.m.b.H. (Germany)
Agit Ges. fuer Informationssysteme und-Techniken m.b.H.(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)
E-3-3
<PAGE>
BRISTOL-MYERS SQUIBB COMPANY
----------------------------
SUBSIDIARY LIST
--------------
Bristol-Myers Squibb Holding Germany GmbH (Germany)
Bristol Salor Pharma G.m.b.H. (Germany)
Bristol-Myers Squibb Zentrum fuer Forschung und Fortbildung
im Gesundheitswesen G.m.b.H. (Germany)
Elektrochemische Gesellschaft Hirschfelde GmbH (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)
Unterstuetzungskasse 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)
Squibb Convatec Medical Products Co. Ltd. (China)
CV Laboratories Limited (England)
E.R. Squibb & Sons Limited (England)
Bristol-Myers Squibb Pharmaceutical Ltd. (England)
Kingsdown Medical Consultants Ltd. (England)
Clairol Limited (England)
Pharmavit Gyogyszer-es Elelmiszeripari Reszventarsasag
(Republic of Hungary)
Zimmer Europe Limited (England)
Zimmer Limited (England)
Bristol-Myers Squibb Pharmaceuticals Limited (Ireland)
Bristol-Myers Squibb S.A. (France)
Argentia S.A.C.I.F.I. (Argentina)
BMS Holdings (France)
Laboratoires UPSA S.A.S. (France)
Zimmer S.A. (France)
Astel Laboratories S.A.R.L. (France)
Osmat S.A. (France)
Delmed S.A. (France)
Bristol-Myers Squibb SpA (Italy)
Bristol Foundation (Italy)
Clairol International, S.r.l. (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)
Center for Health Outcomes and Economics, Inc. (Delaware)
Convatec Sp. z.o.o. (Poland)
Convatec Spol. s.r.o. (Czech Republic)
Convatec Trading and Services Limited (Hungary)
E-3-4
<PAGE>
BRISTOL-MYERS SQUIBB COMPANY
----------------------------
SUBSIDIARY LIST
--------------
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)
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)
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 Squibb Australia Pty. Ltd. (Australia)
Bristol-Myers Squibb A.G. (Switzerland)
Grove Products (Far East) Limited (England)
Wallingford Research, Inc. (Delaware)
Westwood-Intrafin S.A. (Switzerland)
Bristol-Myers Squibb (MEA) 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 Caribe, Inc. (Delaware)
Zimmer New Zealand Limited (New Zealand)
Zimmer Pte. Ltd. (Singapore)
Zimmer S.A. (Spain)
Zimmer Korea Co., Ltd. (Korea)
E-3-5
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 (Nos. 33-33682
and 33-61147) and Pre-Effective Amendment No. 1 on Form S-3
(Nos. 33-62496 and 33-61147) of Bristol-Myers Squibb Company
of our report dated January 23, 1996 appearing on page 51 of this
Form 10-K.
/s/ Price Waterhouse LLP
- ------------------------
PRICE WATERHOUSE LLP
New York, New York
March 28, 1996
E-4-1
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
Exhibit 27 for Bristol-Myers Squibb
</LEGEND>
<MULTIPLIER> 1000000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> Dec-31-1995
<PERIOD-END> Dec-31-1995<F1>
<CASH> 1,645
<SECURITIES> 533
<RECEIVABLES> 2,456
<ALLOWANCES> 100
<INVENTORY> 1,451
<CURRENT-ASSETS> 7,018
<PP&E> 6,264
<DEPRECIATION> 2,504
<TOTAL-ASSETS> 13,929
<CURRENT-LIABILITIES> 4,806
<BONDS> 635
0
0
<COMMON> 54
<OTHER-SE> 5,768
<TOTAL-LIABILITY-AND-EQUITY> 13,929
<SALES> 13,767
<TOTAL-REVENUES> 13,767
<CGS> 3,637
<TOTAL-COSTS> 3,637
<OTHER-EXPENSES> 2,845
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 97
<INCOME-PRETAX> 2,402
<INCOME-TAX> 590
<INCOME-CONTINUING> 1,812
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,812
<EPS-PRIMARY> 3.58
<EPS-DILUTED> 3.53
<FN>
<F1> Items reported as "zero" are not applicable or are
immaterial to the consolidated financial position of the
Company.
E-5-1
</TABLE>
