EX-99.1 2 q32014ex991.htm PRESS RELEASE OF BRISTOL-MYERS SQUIBB COMPANY DATED OCTOBER 24, 2014 Q3 2014 Ex. 99.1


Exhibit 99.1

Bristol-Myers Squibb Reports Third Quarter 2014 Financial Results
•
Posts Third Quarter GAAP EPS of $0.43 and Non-GAAP EPS of $0.45
•
Achieves Significant Regulatory Milestones for PD-1 Inhibitor Opdivo
•
Launches Daklinza-Based Regimens for HCV Patients in Japan and Europe
•
Adjusts 2014 GAAP EPS Guidance Range to $1.15 - $1.25 and Confirms Non-GAAP EPS Guidance Range of $1.70 - $1.80

NEW YORK (October 24, 2014) - Bristol-Myers Squibb Company (NYSE:BMY) today reported strong financial results for the third quarter of 2014, adjusted 2014 GAAP guidance and confirmed 2014 non-GAAP guidance. The quarter was highlighted by strong performance by key brands, significant data and regulatory milestones for Opdivo, the launch of the company’s hepatitis C regimens in Japan and Europe and the completion of several business development transactions supporting the company’s oncology portfolio.

“Our financial results in the third quarter reflect our continued focus on balancing long-term growth with short-term performance, as we achieved significant progress in our pipeline and saw strong in-market performance for key products including Eliquis,Yervoy, Sprycel and Orencia,” said Lamberto Andreotti, chief executive officer, Bristol-Myers Squibb. “We continue to build a solid foundation for our future as a Diversified Specialty BioPharma by advancing our own R&D efforts and investing in strategic business development to build a sustainable pipeline.”
 
 
Third Quarter
$ amounts in millions, except per share amounts
 
 
 
 
 
 
2014
 
2013
 
Change
Total Revenues
$
3,921

 
$
4,065

 
(4
)%
GAAP Diluted EPS
0.43

 
0.42

 
2
 %
Non-GAAP Diluted EPS
0.45

 
0.46

 
(2
)%




1



THIRD QUARTER FINANCIAL RESULTS
•
Bristol-Myers Squibb posted third quarter 2014 revenues of $3.9 billion, a decrease of 4% compared to the same period a year ago. Excluding the divested Diabetes Alliance, global revenues increased 7%.

•
U.S. revenues decreased 3% to $2.0 billion in the quarter compared to the same period a year ago. International revenues decreased 4%.

•
Gross margin as a percentage of revenues was 74.3% in the quarter compared to 71.1% in the same period a year ago.

•
Marketing, selling and administrative expenses increased 5% to $1.0 billion in the quarter.

•
Advertising and product promotion spending decreased 12% to $171 million in the quarter.

•
Research and development expenses increased 10% to $983 million in the quarter.

•
The effective tax rate on earnings before income taxes was 27.4% in the quarter, compared to 15.4% in the third quarter last year.

•
The company reported net earnings attributable to Bristol-Myers Squibb of $721 million, or $0.43 per share, in the quarter compared to $692 million, or $0.42 per share, a year ago.

•
The company reported non-GAAP net earnings attributable to Bristol-Myers Squibb of $750 million, or $0.45 per share, in the third quarter, compared to $768 million, or $0.46 per share, for the same period in 2013. Among other specified items, the non-GAAP earnings in the current period exclude a $0.07 per share impact of additional charges related to the Branded Prescription Drug Fee resulting from the issuance of final rules by the IRS. An overview of specified items is discussed under the “Use of Non-GAAP Financial Information” section.

•
Cash, cash equivalents and marketable securities were $11.5 billion, with a net cash position of $3.9 billion, as of September 30, 2014.


2



THIRD QUARTER PRODUCT AND PIPELINE UPDATE

Bristol-Myers Squibb’s global sales in the third quarter included Eliquis, which grew by $175 million, Yervoy, which grew 47%, Sprycel, which grew 22%, Orencia, which grew 18%, and Daklinza and Sunvepra, which had combined sales of $49 million.

Opdivo

•
In September, the company announced multiple regulatory milestones for Opdivo (nivolumab), an investigational PD-1 immune checkpoint inhibitor, in the U.S. and European Union (EU): 

◦
In the U.S., the Food and Drug Administration (FDA) has accepted for priority review the Biologics License Application for previously treated advanced melanoma and set a Prescription Drug User Fee Act decision goal date of March 30, 2015. The FDA granted Opdivo Breakthrough Therapy designation for this indication. Bristol-Myers Squibb has proposed the name Opdivo, which, if approved by health authorities, will serve as the trademark for nivolumab.  

◦
In the EU, the European Medicines Agency (EMA) has validated for review the Marketing Authorization Applications for nivolumab in non-small cell lung cancer - the first completed regulatory submission for a PD-1 immune checkpoint inhibitor in this tumor type - and in advanced melanoma. The application for advanced melanoma was granted accelerated assessment by the EMA’s Committee for Medicinal Products for Human Use.

•
Also in September, at the European Society for Medical Oncology Congress in Madrid, the company announced positive results from CheckMate -037, a Phase III randomized, controlled open-label study of Opdivo versus investigator’s choice chemotherapy (ICC) in patients with advanced melanoma who were previously treated with Yervoy. Based on a planned interim analysis of the co-primary endpoint, the objective response rate was 32% (95% CI = 24, 41) in the Opdivo arm (n=120) and 11% (95% CI = 4, 23) in the ICC reference arm (n=47) in patients with at least six months of follow up. The majority (95%) of responses were ongoing in the Opdivo arm and the median duration of response was not reached.


3



Eliquis

•
In August, the company and its partner, Pfizer, announced that the FDA approved a Supplemental New Drug Application for Eliquis for the treatment of deep vein thrombosis (DVT) and pulmonary embolism (PE), and for the reduction in the risk of recurrent DVT and PE following initial therapy.

•
In July, the company and its partner, Pfizer, announced that the European Commission (EC) approved Eliquis for the treatment of DVT and PE, and the prevention of DVT and PE in adults. The approval applies to all EU member states as well as Iceland and Norway.

•
In August, at the European Society of Cardiology Congress in Barcelona, Spain, the company and its partner, Pfizer, announced results of a pre-specified secondary analysis of the Eliquis Phase III AMPLIFY-EXT trial. The analysis evaluated clinical and demographic predictors of all-cause hospitalization in patients with VTE. Results from this analysis demonstrated that during the 12-month extended treatment of VTE, Eliquis significantly reduced the risk of hospitalization versus placebo. This effect was independent of other variables including renal function, the only other significant predictor of hospitalization in the AMPLIFY-EXT population.

Daklinza

•
In August, the company announced that the EC approved Daklinza (daclatasvir), a potent, pan-genotypic NS5A replication complex inhibitor (in vitro), for use in combination with other medicinal products across genotypes 1, 2, 3 and 4 for the treatment of chronic hepatitis C virus (HCV) infection in adults. The approval allows for the marketing of Daklinza in all 28 EU member states.

Asunaprevir

•
In October, the company announced that it will not pursue FDA approval of the dual regimen of daclatasvir and asunaprevir for the treatment of HCV genotype 1b patients in the U.S. and has withdrawn its New Drug Application for asunaprevir, an NS3/4A protease inhibitor. The company will continue to pursue FDA approval for daclatasvir, which is currently being investigated globally in multiple treatment regimens for HCV patients with high unmet needs.


4



Sustiva
•
In October, the company announced that it has successfully resolved all outstanding U.S. patent litigation relating to efavirenz, an active ingredient contained in our Sustiva (efavirenz) and Atripla (efavirenz/emtricitabine/tenofovir disoproxil fumarate) products, and that loss of patent exclusivity in the U.S. for efavirenz is not expected to occur until December 2017.

THIRD QUARTER FINANCIAL UPDATE

In September, the company announced that it will settle $1.4 billion in pension obligations through the purchase of a group annuity contract from The Prudential Insurance Company of America (Prudential) for approximately 8,000 U.S. retirees and their beneficiaries who started receiving their monthly retirement benefit payments on or before June 1, 2014. The transaction reduces risk in the retirement plan and better manages the ongoing variations in cost associated with its maintenance while entrusting current retirees and their beneficiaries’ pensions to a financial institution with expertise in the long-term management of retirement benefits. The transaction with Prudential is expected to occur in December 2014 and is subject to satisfaction of closing conditions.

THIRD QUARTER BUSINESS DEVELOPMENT UPDATE

•
In October, the company announced a clinical trial collaboration agreement with Janssen and Pharmacyclics to evaluate the safety, tolerability and preliminary efficacy of Opdivo in combination with Janssen and Pharmacyclics’ oral Bruton's tyrosine kinase inhibitor Imbruvica® (ibrutinib) to treat patients with non-Hodgkin lymphoma.

•
In October, the company and The University of Texas MD Anderson Cancer Center announced a clinical research collaboration to evaluate Yervoy, Opdivo and three early-stage clinical immuno-oncology assets as potential treatment options for acute and chronic leukemia as well as other hematologic malignancies.



5



•
In October, the company announced a clinical trial collaboration with Novartis to evaluate the safety, tolerability and preliminary efficacy of combining Opdivo with three molecularly targeted oncology therapies from Novartis - Zykadia™ (ceritinib), INC280 and EGF816 - to treat non-small cell lung cancer.

•
In August, the company and Celgene Corporation announced the establishment of a clinical trial collaboration to evaluate the safety, tolerability and preliminary efficacy of a combination regimen of Opdivo and Celgene’s nab® technology-based chemotherapy Abraxane® (paclitaxel protein-bound particles for injectable suspension) (albumin-bound) in a Phase I study. Multiple tumor types will be explored in the study.

•
In August, the company and Allied Minds announced the formation of Allied-Bristol Life Sciences LLC, a new jointly owned enterprise created to identify and foster research and pre-clinical development of biopharmaceutical innovations from leading university research institutions across the U.S. The new enterprise will focus on converting discoveries from university research institutions into therapeutic candidates for clinical development and, ultimately, approved therapies that address serious diseases.

Abraxane® and nab® are trademarks of Abraxis BioScience LLC, a wholly owned subsidiary of Celgene Corporation.
Imbruvica® is a trademark of Pharmacyclics, Inc.
Zykadia™ is a trademark of Novartis AG.


2014 FINANCIAL GUIDANCE

Bristol-Myers Squibb is adjusting its 2014 GAAP EPS guidance range to $1.15 - $1.25 from $1.50 - $1.60 and confirming its non-GAAP EPS guidance range of $1.70 - $1.80. Both GAAP and non-GAAP guidance assume current exchange rates and that the R&D tax credit will be extended by Congress in 2014. Key 2014 non-GAAP guidance assumptions include:

•Worldwide revenues between $15.2 billion and $15.8 billion.
•Full-year gross margin as a percentage of revenues between 75% and 76%.
•Advertising and promotion expense decreasing in the mid-teen-digit range.
•Marketing, sales and administrative expenses decreasing in the mid-single-digit range.


6



•Research and development expenses growing in the mid-single-digit range.
•An effective tax rate of 19% - 20%.

The financial guidance for 2014 excludes the impact of any potential future strategic acquisitions and divestitures, and any specified items that have not yet been identified and quantified. The non-GAAP 2014 guidance also excludes other specified items as discussed under “Use of Non-GAAP Financial Information.” Details reconciling adjusted non-GAAP amounts with the amounts reflecting specified items are provided in supplemental materials available on the company’s website.


Use of Non-GAAP Financial Information
This press release contains non-GAAP financial measures, including non-GAAP earnings and related earnings per share information. These measures are adjusted to exclude certain costs, expenses, significant gains and losses and other specified items. Among the items in GAAP measures but excluded for purposes of determining adjusted earnings and other adjusted measures are: restructuring and other exit costs; accelerated depreciation charges; IPRD and asset impairments; charges and recoveries relating to significant legal proceedings; upfront, milestone and other payments for in-licensing of products that have not achieved regulatory approval which are immediately expensed; net amortization of acquired intangible assets and deferred income related to Amylin; pension settlement charges; significant tax events and additional charges related to the Branded Prescription Drug Fee. This information is intended to enhance an investor’s overall understanding of the company’s past financial performance and prospects for the future. Non-GAAP financial measures provide the company and its investors with an indication of the company’s baseline performance before items that are considered by the company not to be reflective of the company’s ongoing results. The company uses non-GAAP gross profit, non-GAAP marketing, selling and administrative expense, non-GAAP research and development expense, and non-GAAP other income and expense measures to set internal budgets, manage costs, allocate resources, and plan and forecast future periods. Non-GAAP effective tax rate measures are primarily used to plan and forecast future periods. Non-GAAP earnings and earnings per share measures are primary indicators the company uses as a basis for evaluating company performance, setting incentive compensation targets, and planning and forecasting of future periods. This information is not intended to be considered in isolation or as a substitute for financial measures prepared in accordance with GAAP.

Statement on Cautionary Factors
This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 regarding, among other things, statements relating to goals, plans and projections regarding the company’s financial position, results of operations, market position, product development and business strategy. These statements may be identified by the fact that they use words such as "anticipate", "estimates", "should", "expect", "guidance", "project", "intend", "plan", "believe" and other words and terms of similar meaning in connection with any discussion of future operating or financial performance.

7



Such forward-looking statements are based on current expectations and involve inherent risks and uncertainties, including factors that could delay, divert or change any of them, and could cause actual outcomes and results to differ materially from current expectations. These factors include, among other things, effects of the continuing implementation of governmental laws and regulations related to Medicare, Medicaid, Medicaid managed care organizations and entities under the Public Health Service 340B program, pharmaceutical rebates and reimbursement, market factors, competitive product development and approvals, pricing controls and pressures (including changes in rules and practices of managed care groups and institutional and governmental purchasers), economic conditions such as interest rate and currency exchange rate fluctuations, judicial decisions, claims and concerns that may arise regarding the safety and efficacy of in-line products and product candidates, changes to wholesaler inventory levels, variability in data provided by third parties, changes in, and interpretation of, governmental regulations and legislation affecting domestic or foreign operations, including tax obligations, changes to business or tax planning strategies which take into account assumptions about the continued extension of the R&D tax credit, difficulties and delays in product development, manufacturing or sales including any potential future recalls, patent positions and the ultimate outcome of any litigation matter. These factors also include the company’s ability to execute successfully its strategic plans, including its business strategy, the expiration of patents or data protection on certain products, including assumptions about the company’s ability to retain patent exclusivity of certain products, and the impact and result of governmental investigations. There can be no guarantees with respect to pipeline products that future clinical studies will support the data described in this release, that the compounds will receive necessary regulatory approvals, or that they will prove to be commercially successful; nor are there guarantees that regulatory approvals will be sought, or sought within currently expected timeframes, or that contractual milestones will be achieved. For further details and a discussion of these and other risks and uncertainties, see the company's periodic reports, including the annual report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, filed with or furnished to the Securities and Exchange Commission. The company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise.

Company and Conference Call Information

Bristol-Myers Squibb is a global biopharmaceutical company whose mission is to discover, develop and deliver innovative medicines that help patients prevail over serious diseases. For more information, please visit www.bms.com or follow us on Twitter at http://twitter.com/bmsnews.
There will be a conference call on October 24, 2014, at 10:30 a.m. EDT during which company executives will review financial information and address inquiries from investors and analysts. Investors and the general public are invited to listen to a live webcast of the call at http://investor.bms.com or by dialing 913-312-0964, confirmation code: 1193919. Materials related to the call will be available at the same website prior to the conference call.
For more information, contact: Laura Hortas, 609-252-4587, laura.hortas@bms.com, Communications; John Elicker, 609-252-4611, john.elicker@bms.com, Ranya Dajani, 609-252-5330, ranya.dajani@bms.com, or Ryan Asay, 609-252-5020, ryan.asay@bms.com, Investor Relations.



8



BRISTOL-MYERS SQUIBB COMPANY
SELECTED PRODUCTS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2014 AND 2013
(Unaudited, dollars in millions)
 
 
Worldwide Revenues
 
U.S. Revenues
 
 
2014
 
2013
 
%
Change
 
2014
 
2013
 
%
Change
Three Months Ended September 30,
 
 
 
 
 
 
 
 
 
 
 
 
Key Products
 
 
 
 
 
 
 
 
 
 
 
 
Virology
 
 
 
 
 
 
 
 
 
 
 
 
Baraclude
 
$
325

 
$
378

 
(14
)%
 
$
40

 
$
67

 
(40
)%
Hepatitis C Franchise
 
49

 
—

 
N/A

 
—

 
—

 
N/A

Reyataz
 
338

 
375

 
(10
)%
 
169

 
189

 
(11
)%
Sustiva Franchise
 
357

 
389

 
(8
)%
 
284

 
259

 
10
 %
Oncology
 
 
 
 
 
 
 
 
 
 
 
 
Erbitux(a)
 
187

 
183

 
2
 %
 
175

 
180

 
(3
)%
Opdivo
 
1

 
—

 
N/A

 
—

 
—

 
N/A

Sprycel
 
385

 
316

 
22
 %
 
179

 
134

 
34
 %
Yervoy
 
350

 
238

 
47
 %
 
191

 
130

 
47
 %
Neuroscience
 
 
 
 
 
 
 
 
 
 
 
 
Abilify(b)
 
449

 
569

 
(21
)%
 
407

 
378

 
8
 %
Immunoscience
 
 
 
 
 
 
 
 
 
 
 
 
Orencia
 
444

 
375

 
18
 %
 
292

 
246

 
19
 %
Cardiovascular
 
 
 
 
 
 
 
 
 
 
 
 
Eliquis
 
216

 
41

 
**

 
113

 
27

 
**

 
 
 
 
 
 
 
 
 
 
 
 
 
Diabetes Alliance
 
42

 
432

 
(90
)%
 
—

 
308

 
(100
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
Mature Products and All Other
 
778

 
769

 
1
 %
 
118

 
119

 
(1
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
Total
 
3,921

 
4,065

 
(4
)%
 
1,968

 
2,037

 
(3
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Excluding Diabetes Alliance
 
3,879

 
3,633

 
7
 %
 
1,968

 
1,729

 
14
 %
 
**
In excess of 100%
 
 
(a)
Erbitux is a trademark of ImClone LLC. ImClone LLC is a wholly-owned subsidiary of Eli Lilly and Company.
(b)
Abilify is a trademark of Otsuka Pharmaceutical Co., Ltd.


9



BRISTOL-MYERS SQUIBB COMPANY
SELECTED PRODUCTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2014 AND 2013
(Unaudited, dollars in millions)
 
 
Worldwide Revenues
 
U.S. Revenues
 
 
2014
 
2013
 
%
Change
 
2014
 
2013
 
%
Change
Nine Months Ended September 30,
 
 
 
 
 
 
 
 
 
 
 
 
Key Products
 
 
 
 
 
 
 
 
 
 
 
 
Virology
 
 
 
 
 
 
 
 
 
 
 
 
Baraclude
 
$
1,100

 
$
1,115

 
(1
)%
 
$
194

 
$
208

 
(7
)%
Hepatitis C Franchise
 
49

 
—

 
N/A

 
—

 
—

 
N/A

Reyataz
 
1,044

 
1,167

 
(11
)%
 
513

 
582

 
(12
)%
Sustiva Franchise
 
1,037

 
1,187

 
(13
)%
 
778

 
785

 
(1
)%
Oncology
 
 
 
 
 
 
 
 
 
 
 
 
Erbitux
 
542

 
516

 
5
 %
 
511

 
506

 
1
 %
Opdivo
 
1

 
—

 
N/A

 
—

 
—

 
N/A

Sprycel
 
1,095

 
915

 
20
 %
 
487

 
384

 
27
 %
Yervoy
 
942

 
700

 
35
 %
 
510

 
429

 
19
 %
Neuroscience
 
 
 
 
 
 
 
 
 
 
 
 
Abilify
 
1,544

 
1,654

 
(7
)%
 
1,149

 
1,084

 
6
 %
Immunoscience
 
 
 
 
 
 
 
 
 
 
 
 
Orencia
 
1,209

 
1,047

 
15
 %
 
775

 
698

 
11
 %
Cardiovascular
 
 
 
 
 
 
 
 
 
 
 
 
Eliquis
 
493

 
75

 
**

 
268

 
49

 
**

 
 
 
 
 
 
 
 
 
 
 
 
 
Diabetes Alliance
 
248

 
1,228

 
(80
)%
 
114

 
920

 
(88
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
Mature Products and All Other
 
2,317

 
2,340

 
(1
)%
 
335

 
408

 
(18
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
Total
 
11,621

 
11,944

 
(3
)%
 
5,634

 
6,053

 
(7
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Excluding Diabetes Alliance
 
11,373

 
10,716

 
6
 %
 
5,520

 
5,133

 
8
 %
 
**
In excess of 100%


10



BRISTOL-MYERS SQUIBB COMPANY
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2014 AND 2013
(Unaudited, dollars and shares in millions except per share data)
 
 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
 
2014
 
2013
 
2014
 
2013
Net product sales
 
$
2,843

 
$
3,025

 
$
8,420

 
$
9,006

Alliance and other revenues
 
1,078

 
1,040

 
3,201

 
2,938

Total Revenues
 
3,921

 
4,065

 
11,621

 
11,944

 
 
 
 
 
 
 
 
 
Cost of products sold
 
1,007

 
1,175

 
2,966

 
3,346

Marketing, selling and administrative
 
1,029

 
980

 
2,937

 
3,016

Advertising and product promotion
 
171

 
194

 
521

 
601

Research and development
 
983

 
893

 
3,345

 
2,774

Other (income)/expense
 
(277
)
 
5

 
(589
)
 
185

Total Expenses
 
2,913

 
3,247

 
9,180

 
9,922

 
 
 
 
 
 
 
 
 
Earnings Before Income Taxes
 
1,008

 
818

 
2,441

 
2,022

Provision for Income Taxes
 
276

 
126

 
439

 
177

 
 
 
 
 
 
 
 
 
Net Earnings
 
732

 
692

 
2,002

 
1,845

Net Earnings Attributable to Noncontrolling Interest
 
11

 
—

 
11

 
8

Net Earnings Attributable to BMS
 
$
721

 
$
692

 
$
1,991

 
$
1,837

 
 
 
 
 
 
 
 
 
Earnings per Common Share
 
 
 
 
 
 
 
 
Basic
 
$
0.43

 
$
0.42

 
$
1.20

 
$
1.12

Diluted
 
$
0.43

 
$
0.42

 
$
1.19

 
$
1.11

 
 
 
 
 
 
 
 
 
Average Common Shares Outstanding:
 
 
 
 
 
 
 
 
Basic
 
1,658

 
1,646

 
1,656

 
1,643

Diluted
 
1,670

 
1,662

 
1,668

 
1,659

 
 
 
 
 
 
 
 
 
Other (Income)/Expense
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest expense
 
$
50

 
$
46

 
$
150

 
$
146

Investment income
 
(20
)
 
(23
)
 
(71
)
 
(76
)
Provision for restructuring
 
35

 
6

 
72

 
212

Litigation charges/(recoveries)
 
10

 
17

 
19

 
(5
)
Equity in net income of affiliates
 
(12
)
 
(42
)
 
(81
)
 
(128
)
Out-licensed intangible asset impairment
 
18

 
—

 
18

 
—

Gain on sale of product lines, businesses and assets
 
(315
)
 
—

 
(567
)
 
(1
)
Other alliance and licensing income
 
(102
)
 
(31
)
 
(354
)
 
(120
)
Pension curtailments, settlements and special termination benefits
 
28

 
37

 
137

 
138

Other
 
31

 
(5
)
 
88

 
19

Other (income)/expense
 
$
(277
)
 
$
5

 
$
(589
)
 
$
185



11



BRISTOL-MYERS SQUIBB COMPANY
SPECIFIED ITEMS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2014 AND 2013
(Unaudited, dollars in millions)
 
 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
 
2014
 
2013
 
2014
 
2013
Accelerated depreciation, asset impairment and other shutdown costs
 
$
36

 
$
—

 
$
120

 
$
—

Amortization of acquired Amylin intangible assets
 
—

 
137

 
—

 
412

Amortization of Amylin alliance proceeds
 
—

 
(68
)
 
—

 
(202
)
Amortization of Amylin inventory adjustment
 
—

 
—

 
—

 
14

Cost of products sold
 
36

 
69

 
120

 
224

 
 
 
 
 
 
 
 
 
Additional year of Branded Prescription Drug Fee
 
96

 
—

 
96

 
—

Process standardization implementation costs
 
2

 
4

 
8

 
6

Marketing, selling and administrative
 
98

 
4

 
104

 
6

 
 
 
 
 
 
 
 
 
Upfront, milestone and other payments
 
65

 
—

 
228

 
—

IPRD impairments
 
—

 
—

 
343

 
—

Research and development
 
65

 
—

 
571

 
—

 
 
 
 
 
 
 
 
 
Provision for restructuring
 
35

 
6

 
72

 
212

Gain on sale of product lines, businesses and assets
 
(315
)
 
—

 
(562
)
 
—

Pension curtailments, settlements and special termination benefits
 
28

 
37

 
137

 
136

Acquisition and alliance related items(a)
 
39

 
—

 
72

 
(10
)
Litigation charges/(recoveries)
 
10

 
—

 
12

 
(23
)
Loss on debt redemption
 
—

 
—

 
45

 
—

Upfront, milestone and other licensing receipts
 
—

 
—

 
—

 
(14
)
Other (income)/expense
 
(203
)
 
43

 
(224
)
 
301

 
 
 
 
 
 
 
 
 
Increase/(decrease) to pretax income
 
(4
)
 
116

 
571

 
531

Income tax on items above
 
33

 
(40
)
 
(248
)
 
(191
)
Increase to net earnings
 
$
29

 
$
76

 
$
323

 
$
340


(a) Includes $16 million of additional year of Branded Prescription Drug Fee.


12



BRISTOL-MYERS SQUIBB COMPANY
RECONCILIATION OF CERTAIN NON-GAAP LINE ITEMS TO CERTAIN GAAP LINE ITEMS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2014 AND 2013
(Unaudited, dollars in millions)

Three Months Ended September 30, 2014
 
GAAP
 
Specified
Items*
 
Non
GAAP
Gross Profit
 
$
2,914

 
$
36

 
$
2,950

Marketing, selling and administrative
 
1,029

 
(98
)
 
931

Research and development
 
983

 
(65
)
 
918

Other (income)/expense
 
(277
)
 
203

 
(74
)
Effective Tax Rate
 
27.4
%
 
(3.2
)%
 
24.2
%
 
 
 
 
 
 
 
Three Months Ended September 30, 2013
 
GAAP
 
Specified
Items*
 
Non
GAAP
Gross Profit
 
$
2,890

 
$
69

 
$
2,959

Marketing, selling and administrative
 
980

 
(4
)
 
976

Research and development
 
893

 
—

 
893

Other (income)/expense
 
5

 
(43
)
 
(38
)
Effective Tax Rate
 
15.4
%
 
2.4
 %
 
17.8
%
*
Refer to the Specified Items schedule for further details. Effective tax rate on the Specified Items represents the difference between the GAAP and Non-GAAP effective tax rate.


13



BRISTOL-MYERS SQUIBB COMPANY
RECONCILIATION OF CERTAIN NON-GAAP LINE ITEMS TO CERTAIN GAAP LINE ITEMS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2014 AND 2013
(Unaudited, dollars in millions)

Nine Months Ended September 30, 2014
 
GAAP
 
Specified
Items*
 
Non
GAAP
Gross Profit
 
$
8,655

 
$
120

 
$
8,775

Marketing, selling and administrative
 
2,937

 
(104
)
 
2,833

Research and development
 
3,345

 
(571
)
 
2,774

Other (income)/expense
 
(589
)
 
224

 
(365
)
Effective Tax Rate
 
18.0
%
 
4.8
%
 
22.8
%
 
 
 
 
 
 
 
Nine Months Ended September 30, 2013
 
GAAP
 
Specified
Items*
 
Non
GAAP
Gross Profit
 
$
8,598

 
$
224

 
$
8,822

Marketing, selling and administrative
 
3,016

 
(6
)
 
3,010

Research and development
 
2,774

 
—

 
2,774

Other (income)/expense
 
185

 
(301
)
 
(116
)
Effective Tax Rate
 
8.8
%
 
5.6
%
 
14.4
%
*
Refer to the Specified Items schedule for further details. Effective tax rate on the Specified Items represents the difference between the GAAP and Non-GAAP effective tax rate.


14



BRISTOL-MYERS SQUIBB COMPANY
RECONCILIATION OF NON-GAAP EPS TO GAAP EPS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2014 AND 2013
(Unaudited, dollars and shares in millions except per share data)
 
 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
 
2014
 
2013
 
2014
 
2013
Net Earnings Attributable to BMS used for Diluted EPS Calculation - GAAP
 
$
721

 
$
692

 
$
1,991

 
$
1,837

Less Specified Items*
 
29

 
76

 
323

 
340

Net Earnings used for Diluted EPS Calculation – Non-GAAP
 
$
750

 
$
768

 
$
2,314

 
$
2,177

 
 
 
 
 
 
 
 
 
Average Common Shares Outstanding – Diluted
 
1,670

 
1,662

 
1,668

 
1,659

 
 
 
 
 
 
 
 
 
Diluted Earnings Per Share — GAAP
 
$
0.43

 
$
0.42

 
$
1.19

 
$
1.11

Diluted EPS Attributable to Specified Items
 
0.02

 
0.04

 
0.20

 
0.20

Diluted Earnings Per Share — Non-GAAP
 
$
0.45

 
$
0.46

 
$
1.39

 
$
1.31

*
Refer to the Specified Items schedule for further details.


15



BRISTOL-MYERS SQUIBB COMPANY
NET CASH/(DEBT) CALCULATION
AS OF SEPTEMBER 30, 2014 AND JUNE 30, 2014
(Unaudited, dollars in millions)
 
 
 
September 30, 2014
 
June 30, 2014
Cash and cash equivalents
 
$
4,851

 
$
4,282

Marketable securities - current
 
2,370

 
2,893

Marketable securities - long term
 
4,328

 
3,876

     Cash, cash equivalents and marketable securities
 
11,549

 
11,051

Short-term borrowings and current portion of long-term debt
 
(401
)
 
(365
)
Long-term debt
 
(7,267
)
 
(7,372
)
     Net cash position
 
$
3,881

 
$
3,314



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