Delaware | 22-0790350 | |
(State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) |
Title of each class | Name of each exchange on which registered | |
Common Stock, $0.10 Par Value | New York Stock Exchange | |
1.000% Notes due 2025 | New York Stock Exchange | |
1.750% Notes due 2035 | New York Stock Exchange |
Title of each class |
$2 Convertible Preferred Stock, $1 Par Value |
Large accelerated filer x | Accelerated filer ¨ | Non-accelerated filer ¨ | Smaller reporting company ¨ |
Item 1. | BUSINESS. |
Year Ended December 31, | ||||||||||||
Dollars in Millions | 2015 | 2014 | 2013 | |||||||||
United States | 49 | % | 49 | % | 51 | % | ||||||
Europe | 21 | % | 23 | % | 24 | % | ||||||
Japan | 10 | % | 6 | % | 5 | % | ||||||
China | 4 | % | 4 | % | 4 | % | ||||||
Total Revenues | $ | 16,560 | $ | 15,879 | $ | 16,385 |
Total Revenues by Product | Past or Currently Estimated Year of Basic Exclusivity Loss | ||||||||||||||||||||||
Dollars in Millions | 2015 | 2014 | 2013 | U.S. | EU(a) | Japan | China | ||||||||||||||||
Virology | |||||||||||||||||||||||
Baraclude (entecavir) | $ | 1,312 | $ | 1,441 | $ | 1,527 | 2014 | (b) | 2011-2016 | (c) | 2016 | -- | |||||||||||
Hepatitis C Franchise(d) | 1,603 | 256 | — | 2028 | 2027 | 2028 | (e) | ++ | |||||||||||||||
Reyataz (atazanavir sulfate) Franchise | 1,139 | 1,362 | 1,551 | 2017 | 2017-2019 | (f) | 2019 | 2017 | |||||||||||||||
Sustiva (efavirenz) Franchise | 1,252 | 1,444 | 1,614 | 2017 | (g) | 2013 | (h) | ++ | ++ | ||||||||||||||
Oncology | |||||||||||||||||||||||
Empliciti (elotuzumab)(i) | 3 | — | — | 2026 | ++ | ++ | ++ | ||||||||||||||||
Erbitux* (cetuximab) | 501 | 723 | 696 | 2016 | (j) | ++ | 2016 | (k) | ++ | ||||||||||||||
Opdivo (nivolumab) | 942 | 6 | — | 2027 | (l) | 2026 | (l) | 2031 | (l) | ++ | |||||||||||||
Sprycel (dasatinib) | 1,620 | 1,493 | 1,280 | 2020 | (m) | ^^ | 2021 | 2020 | |||||||||||||||
Yervoy (ipilimumab) | 1,126 | 1,308 | 960 | 2023 | (n) | 2021 | (o) | 2023 | (p) | ++ | |||||||||||||
Neuroscience | |||||||||||||||||||||||
Abilify* (aripiprazole) | 746 | 2,020 | 2,289 | 2015 | (q) | 2014 | (q) | ++ | ++ | ||||||||||||||
Immunoscience | |||||||||||||||||||||||
Orencia (abatacept) | 1,885 | 1,652 | 1,444 | 2019 | (r) | 2017 | (s) | 2018 | (t) | ++ | |||||||||||||
Cardiovascular | |||||||||||||||||||||||
Eliquis (apixaban) | 1,860 | 774 | 146 | 2023 | (u) | 2022 | (v) | 2026 | (v) | ^ |
^^ | In May 2013, Apotex Inc., Actavis Group PTC ehf, Generics [UK] Limited (Mylan) and an unnamed company filed oppositions in the European Patent Office (EPO) seeking revocation of European Patent No. 1169038 (the '038 patent) covering dasatinib, the active ingredient in Sprycel. The ‘038 patent is scheduled to expire in April 2020 (excluding potential term extensions). On January 20, 2016, the Opposition Division of the EPO revoked the ‘038 patent. The Company will appeal the EPO’s decision to the EPO Board of Appeal. The ‘038 patent will remain in force pending the outcome of our appeal of the EPO’s decision, and we intend to pursue legal options to defend our intellectual property rights from any future infringement. Refer to “Note 22. Legal Proceedings and Contingencies” for more information. |
(a) | References to the EU throughout this Form 10-K include all member states of the European Union during the year ended December 31, 2015. Basic patent applications have not been filed in all current member states for all of the listed products. In some instances, the date of basic exclusivity loss will be different in various EU member states. For those EU countries where the basic patent was not obtained, there may be data protection available. |
(b) | Baraclude U.S.: In September 2014, Teva Pharmaceuticals launched a generic version of Baraclude and we have experienced a negative impact on U.S. net product sales of Baraclude beginning in the fourth quarter of 2014. These actions follow a decision in June 2014 by the U.S. Court of Appeals for the Federal Circuit to uphold a lower court decision invalidating Baraclude’s patent in February 2013. In May 2015, the U.S. Supreme Court denied the Company's petition for a writ of certiorari. Accordingly, this case is now concluded. For more information about this patent litigation matter, refer to "Item 8. Financial Statements—Note 22. Legal Proceedings and Contingencies." |
(c) | Baraclude EU: The composition of matter patent expires in the EU between 2011 and 2016. |
(d) | Exclusivity period relates to the Daklinza brand. |
(e) | The composition of matter covering daclatasvir in Japan expires in 2028 including granted patent term extension. |
(f) | Reyataz EU: Data exclusivity in the EU expired in 2014 and projected market exclusivity expires between 2017 and 2019. |
(g) | Sustiva U.S.: Exclusivity period relates to the Sustiva brand and does not include exclusivity related to any combination therapy. The composition of matter patent for efavirenz in the U.S. expired in 2013 and the method of use patent for the treatment of HIV infection expired in September 2014. Pediatric exclusivity has been granted, which provides an additional six month period of exclusivity added to the term of the patents listed in the Orange Book. In October 2014, the Company announced that it has successfully resolved all outstanding U.S. patent litigation relating to efavirenz and that loss of exclusivity in the U.S. for efavirenz is not expected to occur until December 2017. |
(h) | Sustiva EU: Exclusivity period relates to the Sustiva brand and does not include exclusivity related to any combination therapy. Market exclusivity for Sustiva expired in November 2013 in countries in the EU. Data exclusivity for Sustiva expired in the EU in 2009. |
(i) | Empliciti: We have a commercialization agreement with AbbVie Inc. (AbbVie) for Empliciti. For more information about our arrangement with AbbVie, refer to “—Alliances” below and “Item 8. Financial Statements—Note 3. Alliances.” AbbVie owns a patent covering elotuzumab as a composition of matter that expires in 2026 in the U.S. (excluding potential patent term extension) and 2024 in the EU, Japan and China (excluding potential patent term extensions in the EU and Japan). |
(j) | Erbitux* U.S.: Biologic product approved under a Biologics License Application (BLA). Data exclusivity in the U.S. expires in 2016. There is no patent that specifically claims the composition of matter of cetuximab, the active ingredient in Erbitux*. In 2015, the Company transferred its rights, including full commercialization and manufacturing responsibilities of Erbitux* in North America to Lilly in return for sales-based royalties. For more information about our arrangement with Lilly, refer to "—Alliances" below and “Item 8. Financial Statements—Note 3. Alliances.” |
(k) | Erbitux* Japan: Exclusivity period is based on regulatory data protection. BMS transferred its co-commercialization rights in Japan to Merck KgaA in 2015 in exchange for sales-based royalties. |
(l) | Opdivo: We jointly own a patent with Ono Pharmaceutical Co., Ltd. (Ono) covering nivolumab as a composition of matter that expires in 2027 in the U.S. (excluding potential patent term extension) and 2026 in the EU (excluding potential patent term extensions). The composition of matter patent covering nivolumab in Japan expires in 2031 including granted patent term extension. |
(m) | Sprycel: A patent term extension has been granted in the U.S. extending the term on the basic composition of matter patent covering dasatinib until June 2020. In 2013, the Company entered into a settlement agreement with Apotex regarding a patent infringement suit covering the monohydrate form of dasatinib whereby Apotex can launch its generic dasatinib monohydrate abbreviated New Drug Application product in September 2024, or earlier in certain circumstances. In the U.S., orphan drug exclusivity expired in 2013. |
(n) | Yervoy U.S.: Exclusivity period is based on regulatory data protection. Data exclusivity expires in the U.S. in 2023. We own a patent covering ipilimumab as a composition of matter that currently expires in 2022 in the U.S. (excluding potential patent term extension). |
(o) | Yervoy EU: Exclusivity period is based on regulatory data protection. Data exclusivity expires in the EU in 2021. We own a patent covering ipilimumab as a composition of matter that currently expires in 2020 in the EU (excluding potential patent term extensions). |
(p) | Yervoy Japan: Exclusivity period is based on regulatory data protection. We own a patent covering ipilimumab as a composition of matter that currently expires in 2020 in Japan (excluding potential patent term extension). |
(q) | Abilify*: Our commercialization rights of Abilify* terminated in April 2015 in the U.S. and in June 2014 in the EU. |
(r) | Orencia U.S.: We have a series of patents covering abatacept and its method of use. In the U.S., a patent term extension has been granted for one of the composition of matter patents, extending the term of the U.S. patent to 2019. Data exclusivity expires in the U.S. in 2017 and the method of use patent expires in 2021. |
(s) | Orencia EU: In the EU, the composition of matter patent covering abatacept expired in 2012. In the majority of the EU countries, we have applied for supplementary protection certificates and also pediatric extension of the supplementary protection certificates for protection until 2017. Most of these protection certificates have been granted. Data exclusivity expires in the EU in 2017 and the method of use patent expires in 2021. |
(t) | Orencia Japan: Exclusivity period is based on regulatory data protection. |
(u) | Eliquis U.S.: The composition of matter patent covering apixaban in the U.S. expires in February 2023 (excluding potential patent term extension). In August 2015, we received a Petition for Inter Partes Review of the composition of matter patent covering apixaban filed at the United States Patent and Trademark Office by the Coalition for Affordable Drugs. For more information about this patent litigation matter, refer to “Item 8. Financial Statements—Note 22. Legal Proceedings and Contingencies." |
(v) | Eliquis EU and Japan: The composition of matter patent covering apixaban in the EU expires in 2022. We have applied for supplementary protection certificates. Some of these supplementary protection certificates have been granted and expire in 2026. Data exclusivity in the EU expires in 2021. The composition of matter covering apixaban in Japan expires in 2026 including granted patent term extension. |
Baraclude | Baraclude is a potent and selective inhibitor of hepatitis B virus that was approved by the U.S. Food and Drug Administration (FDA) for the treatment of chronic hepatitis B virus infection. Baraclude was discovered and developed internally. |
Hepatitis C Franchise | Daklinza (daclatasvir (DCV)) is an oral small molecule NS5A replication complex inhibitor for the treatment of hepatitis C virus infection (HCV) and was approved by the FDA for use with Gilead Sciences, Inc.'s (Gilead) sofosbuvir for genotype 3. |
Reyataz Franchise | Reyataz is a protease inhibitor for the treatment of HIV. The Reyataz Franchise includes Reyataz and combination therapy Evotaz (atazanavir 300 mg and cobicistat 150 mg), a once-daily single tablet two drug regimen combining Reyataz and Gilead's Tybost* (cobicistat) for the treatment of HIV-1 infection in adults. |
Sustiva Franchise | Sustiva is a non-nucleoside reverse transcriptase inhibitor for the treatment of HIV. The Sustiva Franchise includes Sustiva, an antiretroviral drug used in the treatment of HIV, as well as bulk efavirenz which is included in the combination therapy Atripla* (efavirenz 600 mg/ emtricitabine 200 mg/ tenofovir disoproxil fumarate 300 mg), a once-daily single tablet three-drug regimen combining our Sustiva and Gilead’s Truvada* (emtricitabine and tenofovir disoproxil fumarate). For more information about our arrangement with Gilead, refer to “—Alliances” below and “Item 8. Financial Statements—Note 3. Alliances.” |
Empliciti | Empliciti is a humanized monoclonal antibody which was approved by the FDA as a treatment for multiple myeloma and is part of our alliance with AbbVie. Under the terms of the alliance, we were granted exclusive global rights to co-develop and commercialize Empliciti. In November 2015, the FDA approved Empliciti for the treatment of multiple myeloma as combination therapy with Revlimid* and dexamethasone in patients who have received one to three prior therapies. Revlimid* is a product of Celgene Corporation. In January 2016, the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA) adopted a positive opinion recommending that Empliciti be granted approval for the treatment of multiple myeloma. We manufacture the bulk requirement for elotuzumab and finish the product in our facilities. |
Erbitux* | Erbitux*, a biological product, is an IgG1 monoclonal antibody designed to exclusively target and block the Epidermal Growth Factor Receptor (EGFR), which is expressed on the surface of certain cancer cells in multiple tumor types as well as some normal cells. Erbitux* is approved in combination with irinotecan for the treatment of patients with EGFR-expressing metastatic colorectal cancer (mCRC) who have failed an irinotecan-based regimen and as monotherapy for patients who are intolerant of irinotecan. The FDA approved Erbitux* for use in combination with radiation therapy, for the treatment of locally or regionally advanced squamous cell carcinoma of the head and neck and, as a single agent, for the treatment of patients with recurrent or metastatic squamous cell carcinoma of the head and neck for whom prior platinum-based therapy has failed. The FDA also approved Erbitux* for first-line recurrent locoregional or metastatic head and neck cancer in combination with platinum-based chemotherapy with 5-Fluorouracil. |
Opdivo | Opdivo, a biological product, is a fully human monoclonal antibody that binds to the programmed death receptor-1 (PD-1) on T and natural killer T (NKT) cells. In 2015, the FDA approved Opdivo for previously untreated patients with metastatic melanoma, previously treated patients with advanced renal cell carcinoma, and previously treated non-squamous (NSQ) and squamous (SQ) non-small cell lung cancer (NSCLC). In 2015, Opdivo received approval in the EU for previously treated SQ NSCLC and first-line and previously treated unresectable or metastatic melanoma. The Opdivo+Yervoy (ipilimumab) regimen was also approved by the FDA in 2015 for the treatment of BRAF V600 wild-type unresectable or metastatic melanoma. There are several ongoing potentially registrational trials for Opdivo in head and neck cancer, hodgkin and non-hodgkin lymphoma and bladder cancer, among other tumor types. Refer to "—Alliances" below and “Item 8. Financial Statements—Note 3. Alliances” for further discussion of our arrangement with Ono for Opdivo in Japan, South Korea and Taiwan. |
Sprycel | Sprycel is a multi-targeted tyrosine kinase inhibitor approved for the first-line treatment of adults with Philadelphia chromosome-positive chronic myeloid leukemia in chronic phase and the treatment of adults with chronic, accelerated, or myeloid or lymphoid blast phase chronic myeloid leukemia with resistance or intolerance to prior therapy, including Gleevec* (imatinib mesylate). Gleevec* is a trademark of Novartis. |
Yervoy | Yervoy, a biological product, is a monoclonal antibody for the treatment of patients with unresectable or metastatic melanoma. Yervoy was approved in the U.S. and the EU in 2011 and in Japan in 2015. In 2015, the FDA approved Yervoy for the adjuvant treatment of patients with cutaneous melanoma. For more information, about research and development of Yervoy, refer to “—Research and Development” below. |
Abilify* | Abilify* is an atypical antipsychotic agent for adult patients with schizophrenia, bipolar mania disorder and major depressive disorder. Abilify* also has pediatric uses in schizophrenia and bipolar disorder, among others. |
Orencia | Orencia, a biological product, is a fusion protein with novel immunosuppressive activity targeted initially at adult patients with moderately to severely active rheumatoid arthritis (RA) who have had an inadequate response to certain currently available treatments. Orencia is available in both an intravenous and subcutaneous formulation in the U.S., Europe and Japan. Refer to "—Alliances" below and “Item 8. Financial Statements—Note 3. Alliances” for further discussion of our collaborations with Ono for Orencia in Japan. |
Eliquis | Eliquis is an oral Factor Xa inhibitor targeted at stroke prevention in atrial fibrillation and the prevention and treatment of venous thromboembolic (VTE) disorders. Apixaban was discovered internally and is part of our alliance with Pfizer, Inc. (Pfizer). For more information about our alliance with Pfizer, refer to “Item 8. Financial Statements—Note 3. Alliances.” |
Immuno-Oncology | Oncology | Immunoscience | Cardiovascular | Fibrotic Diseases | Genetically Defined Diseases | Virology | ||||||
Phase I | Phase I | Phase I | Phase I | Phase I | Phase I | |||||||
Anti-CSF 1R(a) | Anti-Fucosyl GM1 | Anti-CD40 | Factor XIa Inhibitors | Galectin-3 Inhibitor(f) | Anti-eTau(j) | |||||||
Anti-GITR | Anti-HER2(d) | Anti-CD40L | PAR4 Antagonist | PEG-FGF21 | Anti-Myostatin | |||||||
Anti-LAG3 | BET Inhibitor | BTK Inhibitor | ||||||||||
Lirilumab (Anti-KIR)(b) | Mesothelin-ADC | TYK2 Inhibitor | ||||||||||
Urelumab (Anti-CD137) | Ulocuplumab (Anti-CXCR4) | Anti-PD-L1 | ||||||||||
Phase II | Phase II | Phase II | Phase II | |||||||||
Lulizumab (Anti-CD28) | IKur Inhibitor | BMS-986020 (LPA1 Antagonist)(g) | BMS-955176 (HIV Maturation Inhibitor)(k) | |||||||||
Nitroxyl Donor(e) | PEG-FGF21(h) | |||||||||||
Pentraxin-2(i) | ||||||||||||
Phase III | Phase III | |||||||||||
Prostvac*(c) | Beclabuvir | |||||||||||
BMS-663068 (HIV Attachment Inhibitor)(k) |
(a) | Exclusively licensed from Five Prime Therapeutics, Inc. |
(b) | Exclusively licensed from Innate Pharma S.A. |
(c) | Obtained through an exclusive option to license from Bavarian Nordic A/S. |
(d) | Obtained through an exclusive license to acquire F-Star Alpha Ltd. |
(e) | Obtained through acquisition of Cardioxyl Pharmaceuticals, Inc. |
(f) | Obtained through an exclusive option to acquire Galecto Biotech AB. |
(g) | Obtained through the acquisition of Amira Pharmaceuticals, Inc. |
(h) | Exclusively licensed from Ambrx, Inc. |
(i) | Obtained through an exclusive warrant to acquire Promedior, Inc. |
(j) | Obtained through acquisition of iPierian, Inc. |
(k) | Pending sale to ViiV Healthcare. |
Beclabuvir | Beclabuvir is an oral small molecule non-nucleoside NS5B inhibitor in regulatory review in Japan for use in combination with DCV and ASV for the treatment of HCV. We own a patent covering Beclabuvir as a composition of matter that expires in 2027 in the U.S. | |
BMS-663068 | BMS-663068 is an investigational compound being studied in HIV-1 which has shown antiviral activity in HIV-1 infected individuals. Attachment inhibitors have a distinct mode of action from other entry inhibitors, which prevent entry of HIV-1 into the host cell following attachment. BMS-663068 is a prodrug which is metabolized to the active basic compound. We hold a patent covering BMS-663068 as a composition of matter that expires in November 2027 in the U.S. BMS-663068 is expected to be sold to ViiV Healthcare in the first half of 2016. | |
Prostvac* | Prostvac* is Bavarian Nordic's investigational Phase III prostate-specific antigen (PSA)-targeting cancer immunotherapy in development for the treatment of asymptomatic or minimally symptomatic metastatic castration-resistant prostate cancer. BMS has an exclusive option to license and commercialize Prostvac*. |
Key marketed product | Potential indication and/or formulation | |
Hepatitis C Franchise | Combination with other antivirals for the treatment of HCV | |
Empliciti | Additional indication in first-line multiple myeloma | |
Opdivo | Additional indications in melanoma, renal cell carcinoma (RCC), lung cancer, hodgkin and non-hodgkin lymphoma, head and neck cancer, bladder cancer, glioblastoma, hepatocellular carcinoma, gastric cancer, esophageal cancer in monotherapy and/or in combination with Yervoy | |
Orencia | Additional indications in lupus nephritis, psoriatic arthritis, early RA and auto-injector device | |
Eliquis | Pediatric VTE treatment |
Hepatitis C Franchise | Data available from clinical trials Potential approvals for additional indications | |
Empliciti | Potential approval in multiple myeloma in the EU and Japan Data available from Phase III study in first-line multiple myeloma | |
Opdivo | Potential approval in the EU for NSQ NSCLC, Opdivo+Yervoy combination in melanoma and RCC Data available from potentially registrational clinical trials in hodgkin and non-hodgkin lymphoma, head and neck cancer, bladder cancer, glioblastoma and lung cancer Potential submissions in various tumors based on registrational trials. |
2015 | 2014 | 2013 | ||||
McKesson Corporation | 21% | 20% | 19% | |||
AmerisourceBergen Corporation | 16% | 17% | 15% | |||
Cardinal Health, Inc. | 12% | 12% | 14% |
Item 1A. | RISK FACTORS. |
Item 1B. | UNRESOLVED STAFF COMMENTS. |
Item 2. | PROPERTIES. |
Number of Locations | Square Feet | |||||
United States | 4 | 2,190,000 | ||||
Europe | 3 | 1,296,000 | ||||
Rest of the World | 3 | 514,000 | ||||
Total | 10 | 4,000,000 |
Item 3. | LEGAL PROCEEDINGS. |
Item 4. | MINE SAFETY DISCLOSURES. |
Name and Current Position | Age | Employment History for the Past 5 Years | |||
Giovanni Caforio, M.D. Chief Executive Officer and Director Member of the Leadership Team | 51 | 2010 to 2011 – Senior Vice President, Oncology and Immunology, Global Commercialization 2011 to 2013 – President, U.S. Pharmaceuticals 2013 to 2014 – Executive Vice President and Chief Commercial Officer 2014 to 2015 – Chief Operating Officer and Director of the Company 2015 to present – Chief Executive Officer and Director of the Company | |||
Charles Bancroft Executive Vice President and Chief Financial Officer Member of the Leadership Team | 56 | 2010 to 2011 – Chief Financial Officer of the Company 2011 to present – Executive Vice President and Chief Financial Officer of the Company | |||
Emmanuel Blin Senior Vice President and Head of Commercialization, Policy and Operations Member of the Leadership Team | 46 | 2010 to 2013 – President & General Manager, Japan 2013 to 2015 – President, Global Commercialization 2015 to present – Senior Vice President, Head of Commercialization, Policy and Operations | |||
Joseph C. Caldarella Senior Vice President and Corporate Controller | 60 | 2010 to present – Senior Vice President and Corporate Controller | |||
Francis Cuss, MB BChir, FRCP Executive Vice President and Chief Scientific Officer Member of the Leadership Team | 61 | 2010 to 2013 – Senior Vice President, Research 2013 to present – Executive Vice President and Chief Scientific Officer | |||
John E. Elicker Senior Vice President, Public Affairs and Investor Relations Member of the Leadership Team | 56 | 2010 to 2012 – Senior Vice President, Investor Relations 2012 to present – Senior Vice President, Public Affairs and Investor Relations | |||
Murdo Gordon Senior Vice President and Head of Worldwide Markets Member of the Leadership Team | 49 | 2010 to 2011 – Senior Vice President, Access 2011 to 2013 – Senior Vice President, Oncology and Immunology 2013 to 2015 – President, U.S. Pharmaceuticals 2015 to present – Senior Vice President, Head of Worldwide Markets | |||
Ann Powell Judge Senior Vice President, Global Human Resources Member of the Leadership Team | 50 | 2009 to 2013 – Chief Human Resources Officer, Shire Pharmaceuticals 2013 to present – Senior Vice President, Global Human Resources | |||
Sandra Leung Executive Vice President and General Counsel Member of the Leadership Team | 55 | 2007 to 2014 – General Counsel and Corporate Secretary 2014 to 2015 – Executive Vice President, General Counsel and Corporate Secretary 2015 to present – Executive Vice President and General Counsel | |||
Anne Nielsen Senior Vice President and Chief Compliance and Ethics Officer Member of the Leadership Team | 55 | 2009 to 2013 – Vice President and Associate General Counsel 2013 to 2013 – Senior Vice President and Deputy General Counsel 2013 to present – Senior Vice President and Chief Compliance and Ethics Officer | |||
Louis S. Schmukler President, Global Manufacturing and Supply Member of the Leadership Team | 60 | 2009 to 2011 – Senior Vice President, Specialty/Biotechnology Operating Unit, Pfizer 2011 to present – President, Global Manufacturing and Supply | |||
Paul von Autenried Senior Vice President, Enterprise Services and Chief Information Officer Member of the Leadership Team | 54 | 2007 to 2011 – Vice President and Chief Information Officer 2011 to 2012 – Senior Vice President and Chief Information Officer 2012 to present – Senior Vice President, Enterprise Services and Chief Information Officer |
Item 5. | MARKET FOR THE REGISTRANT’S COMMON STOCK AND OTHER STOCKHOLDER MATTERS. |
2015 | 2014 | |||||||||||||||
High | Low | High | Low | |||||||||||||
Common: | ||||||||||||||||
First Quarter | $ | 68.47 | $ | 58.48 | $ | 56.61 | $ | 48.54 | ||||||||
Second Quarter | 69.15 | 63.00 | 52.19 | 46.59 | ||||||||||||
Third Quarter | 70.06 | 57.30 | 51.96 | 47.86 | ||||||||||||
Fourth Quarter | 70.71 | 59.88 | 61.30 | 48.92 |
Common | Preferred | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
First Quarter | $ | 0.37 | $ | 0.36 | $ | 0.50 | $ | 0.50 | ||||||||
Second Quarter | 0.37 | 0.36 | 0.50 | 0.50 | ||||||||||||
Third Quarter | 0.37 | 0.36 | 0.50 | 0.50 | ||||||||||||
Fourth Quarter | 0.37 | 0.36 | 0.50 | 0.50 | ||||||||||||
$ | 1.48 | $ | 1.44 | $ | 2.00 | $ | 2.00 |
Period | Total Number of Shares Purchased(a) | Average Price Paid per Share(a) | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(b) | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs(b) | ||||||||||
Dollars in Millions, Except Per Share Data | ||||||||||||||
January 1 to 31, 2015 | 33,737 | $ | 59.51 | — | $ | 1,368 | ||||||||
February 1 to 28, 2015 | 9,178 | $ | 60.50 | — | $ | 1,368 | ||||||||
March 1 to 31, 2015 | 1,825,224 | $ | 63.41 | — | $ | 1,368 | ||||||||
Three months ended March 31, 2015 | 1,868,139 | — | ||||||||||||
April 1 to 30, 2015 | 19,294 | $ | 63.42 | — | $ | 1,368 | ||||||||
May 1 to 31, 2015 | 14,672 | $ | 64.93 | — | $ | 1,368 | ||||||||
June 1 to 30, 2015 | 10,387 | $ | 66.17 | — | $ | 1,368 | ||||||||
Three months ended June 30, 2015 | 44,353 | — | ||||||||||||
July 1 to 31, 2015 | 13,256 | $ | 67.47 | — | $ | 1,368 | ||||||||
August 1 to 31, 2015 | 8,553 | $ | 65.69 | — | $ | 1,368 | ||||||||
September 1 to 30, 2015 | 5,444 | $ | 60.08 | — | $ | 1,368 | ||||||||
Three months ended September 30, 2015 | 27,253 | — | ||||||||||||
October 1 to 31, 2015 | 11,137 | $ | 60.48 | — | $ | 1,368 | ||||||||
November 1 to 30, 2015 | 17,550 | $ | 64.53 | — | $ | 1,368 | ||||||||
December 1 to 31, 2015 | 18,582 | $ | 67.52 | — | $ | 1,368 | ||||||||
Three months ended December 31, 2015 | 47,269 | — | ||||||||||||
Twelve months ended December 31, 2015 | 1,987,014 | — |
(a) | Reflects the shares of common stock surrendered to the Company to satisfy tax withholding obligations in connection with the vesting of awards under our long-term incentive program. |
(b) | In May 2010, the Board of Directors authorized the repurchase of up to $3.0 billion of common stock. In June 2012, the Board of Directors increased its authorization for the repurchase of common stock by an additional $3.0 billion. The repurchase program does not have an expiration date and we may consider future repurchases. |
Item 6. | SELECTED FINANCIAL DATA. |
Amounts in Millions, except per share data | 2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||
Income Statement Data:(a) | ||||||||||||||||||||
Total Revenues | $ | 16,560 | $ | 15,879 | $ | 16,385 | $ | 17,621 | $ | 21,244 | ||||||||||
Continuing Operations: | ||||||||||||||||||||
Net Earnings | 1,631 | 2,029 | 2,580 | 2,501 | 5,260 | |||||||||||||||
Net Earnings Attributable to: | ||||||||||||||||||||
Noncontrolling Interest | 66 | 25 | 17 | 541 | 1,551 | |||||||||||||||
BMS | 1,565 | 2,004 | 2,563 | 1,960 | 3,709 | |||||||||||||||
Net Earnings per Common Share Attributable to BMS: | ||||||||||||||||||||
Basic | $ | 0.94 | $ | 1.21 | $ | 1.56 | $ | 1.17 | $ | 2.18 | ||||||||||
Diluted | $ | 0.93 | $ | 1.20 | $ | 1.54 | $ | 1.16 | $ | 2.16 | ||||||||||
Average common shares outstanding: | ||||||||||||||||||||
Basic | 1,667 | 1,657 | 1,644 | 1,670 | 1,700 | |||||||||||||||
Diluted | 1,679 | 1,670 | 1,662 | 1,688 | 1,717 | |||||||||||||||
Cash dividends paid on BMS common and preferred stock | $ | 2,477 | $ | 2,398 | $ | 2,309 | $ | 2,286 | $ | 2,254 | ||||||||||
Cash dividends declared per common share | $ | 1.49 | $ | 1.45 | $ | 1.41 | $ | 1.37 | $ | 1.33 | ||||||||||
Financial Position Data at December 31: | ||||||||||||||||||||
Cash and cash equivalents | $ | 2,385 | $ | 5,571 | $ | 3,586 | $ | 1,656 | $ | 5,776 | ||||||||||
Marketable securities(b) | 6,545 | 6,272 | 4,686 | 4,696 | 5,866 | |||||||||||||||
Total Assets | 31,748 | 33,749 | 38,592 | 35,897 | 32,970 | |||||||||||||||
Long-term debt(b) | 6,550 | 7,242 | 7,981 | 7,232 | 5,376 | |||||||||||||||
Equity | 14,424 | 14,983 | 15,236 | 13,638 | 15,867 |
(a) | For a discussion of items that affected the comparability of results for the years 2015, 2014 and 2013, refer to “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Financial Measures.” |
(b) | Includes current and non-current portion. |
Year Ended December 31, | ||||||||||||
Dollars in Millions, except per share data | 2015 | 2014 | 2013 | |||||||||
Total Revenues | $ | 16,560 | $ | 15,879 | $ | 16,385 | ||||||
Total Expenses | 14,483 | 13,498 | 13,494 | |||||||||
Earnings before Income Taxes | 2,077 | 2,381 | 2,891 | |||||||||
Provision for Income Taxes | 446 | 352 | 311 | |||||||||
Effective tax rate | 21.5 | % | 14.8 | % | 10.8 | % | ||||||
Net Earnings Attributable to BMS | ||||||||||||
GAAP | 1,565 | 2,004 | 2,563 | |||||||||
Non-GAAP | 3,378 | 3,085 | 3,019 | |||||||||
Diluted Earnings Per Share | ||||||||||||
GAAP | 0.93 | 1.20 | 1.54 | |||||||||
Non-GAAP | 2.01 | 1.85 | 1.82 | |||||||||
Cash, Cash Equivalents and Marketable Securities | 8,930 | 11,843 | 8,272 |
Product | Date | Approvals |
Opdivo | December 2015 | Japanese Ministry of Health, Labour and Welfare manufacturing and marketing approval for patients with unresectable, advanced or recurrent non-small cell lung cancer (NSCLC), received by Ono Pharmaceutical Co., Ltd. (Ono). |
November 2015 | U.S. Food and Drug Administration (FDA) approval as a single agent for the treatment of previously untreated patients with BRAF V600 wild-type unresectable or metastatic melanoma | |
November 2015 | FDA approval for the treatment of previously treated patients with advanced (metastatic) renal cell carcinoma (RCC) | |
October 2015 | FDA approval for the treatment of previously treated patients with non-squamous (NSQ) NSCLC | |
July 2015 | EU approval for the treatment of locally advanced or metastatic squamous (SQ) NSCLC after prior chemotherapy | |
June 2015 | EU approval for the treatment of both first-line and previously treated unresectable or metastatic melanoma patients, regardless of BRAF status | |
March 2015 | FDA approval for the treatment of patients with advanced SQ NSCLC with progression on or after platinum-based chemotherapy | |
Opdivo+ Yervoy (ipilimumab) | September 2015 | FDA approval for the treatment of patients with BRAF V600 wild-type unresectable or metastatic melanoma |
Yervoy | October 2015 | FDA approval for the adjuvant treatment of patients with cutaneous melanoma |
July 2015 | Japanese Ministry of Health, Labour and Welfare approval for first and second line treatment for unresectable malignant melanoma | |
Empliciti (elotuzumab) | November 2015 | FDA approval for the treatment of multiple myeloma as combination therapy with Revlimid* and dexamethasone in patients who have received one to three prior therapies |
Hepatitis C Portfolio - Daklinza (daclatasvir) | July 2015 | FDA approval for use with sofosbuvir for the treatment of patients with chronic hepatitis C virus (HCV) genotype 3 |
Year Ended December 31, | 2015 vs. 2014 | 2014 vs. 2013 | ||||||||||||||||||||||
Total Revenues | Analysis of % Change | Analysis of % Change | ||||||||||||||||||||||
Total | Foreign | Total | Foreign | |||||||||||||||||||||
Dollars in Millions | 2015 | 2014 | 2013 | Change | Exchange(b) | Change | Exchange(b) | |||||||||||||||||
United States | $ | 8,188 | $ | 7,716 | $ | 8,318 | 6 | % | — | (7 | )% | — | ||||||||||||
Europe | 3,491 | 3,592 | 3,930 | (3 | )% | (17 | )% | (9 | )% | — | ||||||||||||||
Rest of the World | 4,142 | 3,459 | 3,295 | 20 | % | (13 | )% | 5 | % | (5 | )% | |||||||||||||
Other(a) | 739 | 1,112 | 842 | (34 | )% | N/A | 32 | % | N/A | |||||||||||||||
Total | $ | 16,560 | $ | 15,879 | $ | 16,385 | 4 | % | (7 | )% | (3 | )% | (1 | )% |
(a) | Other revenues include royalties and alliance-related revenues for products not sold by our regional commercial organizations. |
(b) | Foreign exchange impacts were derived by applying the prior period average currency rates to the current period sales. |
Dollars in Millions | Charge-Backs and Cash Discounts | Medicaid and Medicare Rebates | Sales Returns | Other Rebates, Discounts and Adjustments | Total | |||||||||||||||
Balance at January 1, 2014 | $ | 49 | $ | 286 | $ | 279 | $ | 324 | $ | 938 | ||||||||||
Provision related to sale made in: | ||||||||||||||||||||
Current period | 755 | 574 | 94 | 776 | 2,199 | |||||||||||||||
Prior period | — | (23 | ) | (33 | ) | (10 | ) | (66 | ) | |||||||||||
Returns and payments | (748 | ) | (570 | ) | (105 | ) | (711 | ) | (2,134 | ) | ||||||||||
Foreign currency translation and other | — | — | (3 | ) | (27 | ) | (30 | ) | ||||||||||||
Balance at December 31, 2014 | $ | 56 | $ | 267 | $ | 232 | $ | 352 | $ | 907 | ||||||||||
Provision related to sale made in: | ||||||||||||||||||||
Current period | 1,043 | 878 | 109 | 1,206 | 3,236 | |||||||||||||||
Prior period | — | (19 | ) | (73 | ) | (23 | ) | (115 | ) | |||||||||||
Returns and payments | (1,002 | ) | (688 | ) | (85 | ) | (782 | ) | (2,557 | ) | ||||||||||
Foreign currency translation and other | — | (4 | ) | (2 | ) | (44 | ) | (50 | ) | |||||||||||
Balance at December 31, 2015 | $ | 97 | $ | 434 | $ | 181 | $ | 709 | $ | 1,421 |
Year Ended December 31, | ||||||||||||
Dollars in Millions | 2015 | 2014 | 2013 | |||||||||
Gross product sales | $ | 17,166 | $ | 13,793 | $ | 14,391 | ||||||
Gross-to-Net Adjustments | ||||||||||||
Charge-backs and cash discounts | (1,043 | ) | (755 | ) | (717 | ) | ||||||
Medicaid and Medicare rebates | (859 | ) | (551 | ) | (490 | ) | ||||||
Sales returns | (36 | ) | (61 | ) | (62 | ) | ||||||
Other rebates, discounts and adjustments | (1,183 | ) | (766 | ) | (818 | ) | ||||||
Total Gross-to-Net Adjustments | (3,121 | ) | (2,133 | ) | (2,087 | ) | ||||||
Net product sales | $ | 14,045 | $ | 11,660 | $ | 12,304 |
• | Charge-backs and cash discounts increased in 2015 primarily due to higher product sales in the U.S., particularly regarding Eliquis and Opdivo. |
• | Medicaid and Medicare rebates increased in 2015 primarily due to higher product sales and rebate rates in the U.S., particularly Medicare for Eliquis. Medicaid and Medicare rebates increased in 2014 primarily due to higher Medicare sales and rebate rates for Eliquis, and higher Medicaid rebates on virology products due to price increase limitations, partially offset by the diabetes business divestiture in February 2014. |
• | The U.S. sales return reserve for Plavix* was reduced by $63 million in 2015, $30 million in 2014 and $22 million in 2013 after considering several factors including actual return experience and estimated inventory levels in the distribution channels. In accordance with Company policy, these products are eligible to be returned between six months prior to and twelve months after product expiration. The U.S. sales return reserve for Plavix* was not material at December 31, 2015. |
• | Other rebates, discounts and adjustments increased in 2015 primarily due to additional rebates and discounts for Daklinza (including approximately $180 million upon obtaining final pricing in France for amounts deferred through March 31, 2015) and Eliquis. |
Year Ended December 31, | % Change | % Change Attributable to Foreign Exchange | ||||||||||||||||||||||
Dollars in Millions | 2015 | 2014 | 2013 | 2015 vs. 2014 | 2014 vs. 2013 | 2015 vs. 2014 | 2014 vs. 2013 | |||||||||||||||||
Virology | ||||||||||||||||||||||||
Baraclude (entecavir) | $ | 1,312 | $ | 1,441 | $ | 1,527 | (9 | )% | (6 | )% | (7 | )% | (2 | )% | ||||||||||
U.S. | 135 | 215 | 289 | (37 | )% | (26 | )% | — | — | |||||||||||||||
Non-U.S. | 1,177 | 1,226 | 1,238 | (4 | )% | (1 | )% | (9 | )% | (2 | )% | |||||||||||||
Hepatitis C Franchise (daclatasvir and asunaprevir) | 1,603 | 256 | — | ** | N/A | N/A | N/A | |||||||||||||||||
U.S. | 323 | — | — | N/A | N/A | — | — | |||||||||||||||||
Non-U.S. | 1,280 | 256 | — | ** | N/A | N/A | N/A | |||||||||||||||||
Reyataz (atazanavir sulfate) Franchise | 1,139 | 1,362 | 1,551 | (16 | )% | (12 | )% | (5 | )% | (1 | )% | |||||||||||||
U.S. | 591 | 689 | 769 | (14 | )% | (10 | )% | — | — | |||||||||||||||
Non-U.S. | 548 | 673 | 782 | (19 | )% | (14 | )% | (11 | )% | (3 | )% | |||||||||||||
Sustiva (efavirenz) Franchise | 1,252 | 1,444 | 1,614 | (13 | )% | (11 | )% | — | — | |||||||||||||||
U.S. | 1,041 | 1,118 | 1,092 | (7 | )% | 2 | % | — | — | |||||||||||||||
Non-U.S. | 211 | 326 | 522 | (35 | )% | (38 | )% | (1 | )% | — | ||||||||||||||
Oncology | ||||||||||||||||||||||||
Empliciti (elotuzumab) | 3 | — | — | N/A | N/A | N/A | N/A | |||||||||||||||||
U.S. | 3 | — | — | N/A | N/A | — | — | |||||||||||||||||
Erbitux* (cetuximab) | 501 | 723 | 696 | (31 | )% | 4 | % | — | N/A | |||||||||||||||
U.S. | 487 | 682 | 682 | (29 | )% | — | — | — | ||||||||||||||||
Non-U.S. | 14 | 41 | 14 | (66 | )% | ** | (3 | )% | N/A | |||||||||||||||
Opdivo (nivolumab) | 942 | 6 | — | ** | N/A | N/A | N/A | |||||||||||||||||
U.S. | 823 | 1 | — | ** | N/A | — | — | |||||||||||||||||
Non-U.S. | 119 | 5 | — | ** | N/A | N/A | N/A | |||||||||||||||||
Sprycel (dasatinib) | 1,620 | 1,493 | 1,280 | 9 | % | 17 | % | (8 | )% | (2 | )% | |||||||||||||
U.S. | 829 | 671 | 541 | 24 | % | 24 | % | — | — | |||||||||||||||
Non-U.S. | 791 | 822 | 739 | (4 | )% | 11 | % | (16 | )% | (5 | )% | |||||||||||||
Yervoy (ipilimumab) | 1,126 | 1,308 | 960 | (14 | )% | 36 | % | (7 | )% | (2 | )% | |||||||||||||
U.S. | 602 | 709 | 577 | (15 | )% | 23 | % | — | — | |||||||||||||||
Non-U.S. | 524 | 599 | 383 | (13 | )% | 56 | % | (16 | )% | (4 | )% | |||||||||||||
Neuroscience | ||||||||||||||||||||||||
Abilify* (aripiprazole) | 746 | 2,020 | 2,289 | (63 | )% | (12 | )% | (1 | )% | — | ||||||||||||||
U.S. | 600 | 1,572 | 1,519 | (62 | )% | 3 | % | — | — | |||||||||||||||
Non-U.S. | 146 | 448 | 770 | (67 | )% | (42 | )% | (4 | )% | — | ||||||||||||||
Immunoscience | ||||||||||||||||||||||||
Orencia (abatacept) | 1,885 | 1,652 | 1,444 | 14 | % | 14 | % | (6 | )% | (2 | )% | |||||||||||||
U.S. | 1,271 | 1,064 | 954 | 19 | % | 12 | % | — | — | |||||||||||||||
Non-U.S. | 614 | 588 | 490 | 4 | % | 20 | % | (18 | )% | (6 | )% | |||||||||||||
Cardiovascular | ||||||||||||||||||||||||
Eliquis (apixaban) | 1,860 | 774 | 146 | ** | ** | N/A | N/A | |||||||||||||||||
U.S. | 1,023 | 404 | 97 | ** | ** | — | — | |||||||||||||||||
Non-U.S. | 837 | 370 | 49 | ** | ** | N/A | N/A | |||||||||||||||||
Mature Products and All Other | 2,571 | 3,400 | 4,878 | (24 | )% | (30 | )% | (6 | )% | (1 | )% | |||||||||||||
U.S. | 460 | 591 | 1,798 | (22 | )% | (67 | )% | — | — | |||||||||||||||
Non-U.S. | 2,111 | 2,809 | 3,080 | (25 | )% | (9 | )% | (7 | )% | (2 | )% |
• | U.S. revenues decreased in both periods following the loss of exclusivity in September 2014. |
• | International revenues decreased in 2015 due to unfavorable foreign exchange partially offset by higher demand in certain countries. |
• | Daklinza was launched in the U.S. in July 2015. Additional competition is expected in the U.S. during 2016. |
• | Daklinza was launched in Germany and certain other EU countries in the third quarter of 2014 and subsequently approved in other international markets during 2015. The Daklinza and Sunvepra dual regimen was launched in Japan in the third quarter of 2014. International revenues also include $170 million of previously deferred revenue in France recognized in 2015. International revenues are expected to significantly decline in 2016 due to increased competition primarily in Japan. |
• | U.S. revenues decreased in both periods due to lower demand resulting from increased competition. |
• | International revenues decreased in both periods due to unfavorable foreign exchange and lower demand resulting from increased competition. |
• | U.S. revenues decreased in 2015 due to lower demand resulting from increased competition partially offset by higher average net selling prices. U.S. revenues increased in 2014 due to higher average net selling prices partially offset by lower demand. |
• | International revenues decreased in both periods due to Sustiva's loss of exclusivity in Europe in November 2013, which continues to negatively impact demand, average net selling prices and Atripla* revenue sharing. |
• | Empliciti was launched in the U.S. in December 2015. |
• | U.S. revenues decreased in 2015 due to BMS transferring its rights to Erbitux* in North America to Eli Lilly and Company (Lilly) in October 2015. Refer to "Item 8. Financial Statements—Note 3. Alliances” for further discussion. |
• | U.S. revenues increased in 2015 due to the launch of Opdivo in December 2014 for the treatment of unresectable melanoma and subsequent approvals for additional indications in 2015, including in NSQ and SQ NSCLC and RCC, as well as the rapid commercial acceptance of Opdivo throughout the year. Refer to "—Significant Product and Pipeline Highlights" for further discussion on the additional Opdivo approvals in 2015. |
• | Opdivo was launched in Japan in September 2014 and was subsequently approved in the EU in June 2015 for the treatment of unresectable melanoma and in July 2015 for the treatment of advanced SQ NSCLC. Opdivo also was approved in other international markets in 2015. |
• | U.S. revenues increased in both periods primarily due to higher demand. |
• | International revenues decreased in 2015 due to unfavorable foreign exchange partially offset by higher demand. International revenues increased in 2014 primarily due to higher demand partially offset by unfavorable foreign exchange. |
• | U.S. revenues decreased in 2015 due to lower demand resulting from the introduction of other immuno-oncology products being used to treat patients with melanoma, including Opdivo. U.S. revenues increased in 2014 due to higher demand. |
• | International revenues decreased in 2015 due to unfavorable foreign exchange. International revenues increased in 2014 due to higher demand. |
• | U.S. revenues decreased in 2015 due to the expiration of our commercialization rights in April 2015. U.S. revenues increased in 2014 primarily due to higher average net selling prices partially offset by the reduction in our share of Abilify* revenues. BMS's share of Abilify* revenue was 50% in 2015, 33% in 2014 and 34% in 2013. |
• | International revenues decreased in both periods following the expiration of our EU commercialization rights in June 2014 and Otsuka Pharmaceutical Co., Ltd. becoming the principal for the end customer sales in certain markets. |
• | U.S. revenues increased in both periods due to higher average net selling prices and demand. |
• | International revenues increased in both periods primarily due to higher demand for the subcutaneous formulation partially offset by unfavorable foreign exchange. |
• | U.S. and international revenues increased in both periods due to higher demand following the 2013 launches in most major markets for the reduction of the risk of stroke and systemic embolism for patients with NVAF and the treatment of VTE in 2014 in the U.S. and in 2015 in the EU. International revenues were also impacted by unfavorable foreign exchange. |
• | U.S. revenues decreased in both periods primarily due to the diabetes business divestiture in February 2014. |
• | International revenues decreased in 2015 due to the expiration/transfer of certain licensing and royalty rights, the diabetes business divestiture in February 2014, unfavorable foreign exchange and continued generic erosion. International revenues decreased in 2014 due to the diabetes business divestiture and the continued generic erosion of other products partially offset by higher alliance revenues. |
% Change | ||||||||||||||||||
Dollar in Millions | 2015 | 2014 | 2013 | 2015 vs. 2014 | 2014 vs. 2013 | |||||||||||||
Cost of products sold | $ | 3,909 | $ | 3,932 | $ | 4,619 | (1 | )% | (15 | )% | ||||||||
Marketing, selling and administrative | 4,841 | 4,822 | 4,939 | — | (2 | )% | ||||||||||||
Research and development | 5,920 | 4,534 | 3,731 | 31 | % | 22 | % | |||||||||||
Other (income)/expense | (187 | ) | 210 | 205 | ** | 2 | % | |||||||||||
Total Expenses | $ | 14,483 | $ | 13,498 | $ | 13,494 | 7 | % | — |
• | Cost of products sold remained relatively flat in 2015 as higher profit sharing and royalties for alliances (primarily Eliquis) was offset by favorable foreign exchange. |
• | Cost of products sold decreased in 2014 primarily due to the diabetes business divestiture ($1.1 billion), partially offset by higher Eliquis profit sharing ($290 million) and accelerated depreciation for certain manufacturing facilities. |
• | Marketing, selling and administrative expenses remained relatively flat in 2015 as increased sales-related activities supporting Eliquis, Opdivo and the Hepatitis C Franchise were offset by favorable foreign exchange and $96 million of additional expenses related to the Branded Prescription Drug Fee in 2014 resulting from changes in IRS guidelines. |
• | Marketing, selling and administrative expenses remained relatively flat in 2014 as increased sales-related activities supporting Eliquis, Yervoy, Opdivo and the Hepatitis C Franchise, higher variable employee compensation and an additional Branded Prescription Drug Fee in 2014 were offset by lower expenses following the diabetes business divestiture ($500 million). |
• | On July 28, 2014, the IRS issued final rules and regulations for the Branded Prescription Drug Fee, an annual non-tax-deductible fee payable to the federal government under the Affordable Care Act based on an allocation of a company’s market share for branded prescription drugs sold to certain government programs in the prior year. The final rules accelerated BMS's and other industry participants' expense recognition criteria for the fee obligation from the year in which the fee is paid, to the year in which the market share used to allocate the fee is determined. As a result, an additional year of expense was recognized in the third quarter of 2014, including $96 million in marketing, selling and administrative expenses and $16 million in other expense. The final rules and regulations did not change the amount or timing of annual fees to be paid. |
• | Research and development expenses increased in 2015 due to higher charges resulting from investigational compound acquisitions (including $800 million for Flexus and $167 million for Cardioxyl), upfront payments for new alliance and licensing agreements (including $350 million for Five Prime) and increased investments to accelerate and expand Opdivo development programs partially offset by lower IPRD impairment charges (including $160 million for LPA1 antagonist in 2015) and favorable foreign exchange. |
• | Research and development expenses increased in 2014 due to $343 million IPRD impairment charges (including $310 million for peginterferon lambda), higher variable employee compensation and clinical development costs, a $148 million charge for the acquisition of iPierian, Inc. (iPierian) and upfront and contingent milestone payments for alliance and licensing agreements of $130 million in 2014. |
Year Ended December 31, | ||||||||||||
Dollars in Millions | 2015 | 2014 | 2013 | |||||||||
Interest expense | $ | 184 | $ | 203 | $ | 199 | ||||||
Investment income | (101 | ) | (101 | ) | (104 | ) | ||||||
Provision for restructuring | 118 | 163 | 226 | |||||||||
Litigation and other settlements | 159 | 23 | 20 | |||||||||
Equity in net income of affiliates | (83 | ) | (107 | ) | (166 | ) | ||||||
Out-licensed intangible asset impairment | 13 | 29 | — | |||||||||
Gain on sale of businesses, product lines and assets | (196 | ) | (564 | ) | (2 | ) | ||||||
Other alliance and licensing income | (628 | ) | (404 | ) | (148 | ) | ||||||
Pension charges | 160 | 877 | 165 | |||||||||
Loss on debt redemption | 180 | 45 | — | |||||||||
Other | 7 | 46 | 15 | |||||||||
Other (income)/expense | $ | (187 | ) | $ | 210 | $ | 205 |
• | Litigation and other settlements includes an additional charge of $90 million for a contractual dispute related to a license subsequent to the Company's earnings release for the fourth quarter of 2015. |
• | Gain on sale of businesses, product lines and assets primarily resulted from the sale of the Ixempra* business, Mount Vernon, Indiana manufacturing facility, certain mature and other over-the-counter product businesses and the transfer of Erbitux* in North America in 2015 and the diabetes business divestiture in 2014. Refer to “Item 8. Financial Statements—Note 3. Alliances and Note 4. Acquisitions and Other Divestitures” for further details. |
• | Other alliance and licensing income includes royalties, transitional services and other fees resulting from the diabetes and other business divestitures in 2015 and 2014 and income of $123 million resulting from the change in fair value of the written option liability attributed to the Reckitt Benckiser Group plc (Reckitt) alliance in 2015. Refer to "Item 8. Financial Statements—Note 3. Alliances" for further discussion. |
• | Pension settlement charges were recognized after determining that the annual lump sum payments would exceed the annual interest and service costs for certain pension plans, including the primary U.S. pension plan in 2015, 2014 and 2013. The charges include the acceleration of a portion of unrecognized actuarial losses and will likely occur in the future. An additional pension settlement charge of $713 million was recognized in 2014 following the purchase of a group annuity contract from The Prudential Insurance Company of America in December 2014. Refer to “Item 8. Financial Statements—Note 19. Pension, Postretirement and Postemployment Liabilities” for further details. |
• | The loss on debt redemption in 2015 resulted from the early redemption of euro notes and a tender offer for certain other debt securities. Refer to "Item 8. Financial Statements—Note 10. Financial Instruments and Fair Value Measurements" for further details. |
Dollars in Millions | 2015 | 2014 | 2013 | ||||||||
Earnings Before Income Taxes | $ | 2,077 | $ | 2,381 | $ | 2,891 | |||||
Provision for income taxes | 446 | 352 | 311 | ||||||||
Effective tax rate | 21.5 | % | 14.8 | % | 10.8 | % |
Year Ended December 31, | ||||||||||||
Dollars in Millions | 2015 | 2014 | 2013 | |||||||||
Accelerated depreciation, asset impairment and other shutdown costs | $ | 84 | $ | 151 | $ | 36 | ||||||
Amortization of acquired Amylin intangible assets | — | — | 549 | |||||||||
Amortization of Amylin alliance proceeds | — | — | (273 | ) | ||||||||
Amortization of Amylin inventory adjustment | — | — | 14 | |||||||||
Cost of products sold | 84 | 151 | 326 | |||||||||
Additional year of Branded Prescription Drug Fee | — | 96 | — | |||||||||
Process standardization implementation costs | 10 | 9 | 16 | |||||||||
Marketing, selling and administrative | 10 | 105 | 16 | |||||||||
License and asset acquisition charges | 1,679 | 278 | 16 | |||||||||
IPRD impairments | 160 | 343 | — | |||||||||
Other | 44 | — | — | |||||||||
Research and development | 1,883 | 621 | 16 | |||||||||
Provision for restructuring | 115 | 163 | 226 | |||||||||
Gain on sale of businesses, product lines and assets | (187 | ) | (559 | ) | — | |||||||
Pension charges | 160 | 877 | 161 | |||||||||
Acquisition and alliance related items(a) | (123 | ) | 72 | (10 | ) | |||||||
Litigation and other settlements | 158 | 27 | (23 | ) | ||||||||
Out-licensed intangible asset impairment | 13 | 11 | — | |||||||||
Loss on debt redemption | 180 | 45 | — | |||||||||
Upfront, milestone and other licensing receipts | — | (10 | ) | (14 | ) | |||||||
Other (income)/expense | 316 | 626 | 340 | |||||||||
Increase to pretax income | 2,293 | 1,503 | 698 | |||||||||
Income tax on items above | (480 | ) | (545 | ) | (242 | ) | ||||||
Specified tax charge(b) | — | 123 | — | |||||||||
Income taxes | (480 | ) | (422 | ) | (242 | ) | ||||||
Increase to net earnings | $ | 1,813 | $ | 1,081 | $ | 456 |
Year Ended December 31, | ||||||||||||
Dollars in Millions, except per share data | 2015 | 2014 | 2013 | |||||||||
Net Earnings Attributable to BMS used for Diluted EPS Calculation — GAAP | $ | 1,565 | $ | 2,004 | $ | 2,563 | ||||||
Specified Items | 1,813 | 1,081 | 456 | |||||||||
Net Earnings Attributable to BMS used for Diluted EPS Calculation — Non-GAAP | $ | 3,378 | $ | 3,085 | $ | 3,019 | ||||||
Average Common Shares Outstanding — Diluted | 1,679 | 1,670 | 1,662 | |||||||||
Diluted EPS Attributable to BMS — GAAP | $ | 0.93 | $ | 1.20 | $ | 1.54 | ||||||
Diluted EPS Attributable to Specified Items | 1.08 | 0.65 | 0.28 | |||||||||
Diluted EPS Attributable to BMS — Non-GAAP | $ | 2.01 | $ | 1.85 | $ | 1.82 |
Dollars in Millions | 2015 | 2014 | ||||||
Cash and cash equivalents | $ | 2,385 | $ | 5,571 | ||||
Marketable securities — current | 1,885 | 1,864 | ||||||
Marketable securities — non-current | 4,660 | 4,408 | ||||||
Total cash, cash equivalents and marketable securities | 8,930 | 11,843 | ||||||
Short-term borrowings | (139 | ) | (590 | ) | ||||
Long-term debt | (6,550 | ) | (7,242 | ) | ||||
Net cash position | $ | 2,241 | $ | 4,011 |
Dollars in Millions | 2015 | 2014 | 2013 | |||||||||
Cash flow provided by/(used in): | ||||||||||||
Operating activities | $ | 1,832 | $ | 3,148 | $ | 3,545 | ||||||
Investing activities | (1,572 | ) | 1,216 | (572 | ) | |||||||
Financing activities | (3,351 | ) | (2,437 | ) | (1,068 | ) |
• | Timing of payments with alliance partners (approximately $700 million), particularly active product ingredient supply and Medicaid rebates for Abilify*; |
• | Higher upfront payments for new alliance and licensing agreements (approximately $600 million); and |
• | Timing of customer collections resulting primarily from higher net product sales including those with extended payment terms for certain new products and less factoring (approximately $400 million). |
• | The timing of other cash collections and payments in the ordinary course of business including among other items, changes in inventory levels, particularly those related to Abilify*. |
• | Lower upfront and contingent alliance proceeds of approximately $600 million (Reckitt alliance proceeds of $485 million in 2013); and |
• | Additional net working capital requirements of approximately $400 million. |
• | The timing of other cash collections and payments in the ordinary course of business including among other items, lower pension contributions, restructuring and annual bonus payments. |
• | Lower proceeds resulting from the diabetes and other business divestitures of $2.9 billion ($700 million in 2015 and $3.6 billion in 2014); |
• | Cash used to acquire Flexus ($800 million) and Cardioxyl ($200 million) in 2015; and |
• | Higher capital expenditures (approximately $300 million). |
• | Lower net purchases of marketable securities of $1.3 billion in 2015; and |
• | Cash used to acquire iPierian ($175 million) in 2014. |
• | Proceeds of $3.5 billion allocated to the diabetes business divestiture in 2014. |
• | Higher net purchases of marketable securities (approximately $1.6 billion); and |
• | Cash used to acquire iPierian ($175 million) in 2014. |
• | Lower short-term borrowings of approximately $700 million in 2015, consisting primarily of changes in bank overdrafts. |
• | Lower net borrowings from long-term debt transactions of $1.6 billion ($676 million of repayments in 2014 and $892 million of net borrowings in 2013); and |
• | Lower proceeds from stock option exercises ($288 million in 2014 and $564 million in 2013, including excess tax benefits). |
• | Lower cash used to repurchase common stock (none in 2014 and $433 million in 2013). |
Obligations Expiring by Period | ||||||||||||||||||||||||||||
Dollars in Millions | Total | 2016 | 2017 | 2018 | 2019 | 2020 | Later Years | |||||||||||||||||||||
Short-term borrowings | $ | 139 | $ | 139 | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||
Long-term debt | 6,339 | — | 750 | — | 500 | — | 5,089 | |||||||||||||||||||||
Interest on long-term debt(a) | 4,308 | 187 | 194 | 192 | 186 | 185 | 3,364 | |||||||||||||||||||||
Operating leases | 822 | 134 | 111 | 99 | 78 | 62 | 338 | |||||||||||||||||||||
Purchase obligations | 2,809 | 1,226 | 491 | 381 | 284 | 228 | 199 | |||||||||||||||||||||
Uncertain tax positions(b) | 75 | 75 | — | — | — | — | — | |||||||||||||||||||||
Other long-term liabilities | 480 | — | 101 | 52 | 33 | 31 | 263 | |||||||||||||||||||||
Total | $ | 14,972 | $ | 1,761 | $ | 1,647 | $ | 724 | $ | 1,081 | $ | 506 | $ | 9,253 |
(a) | Includes estimated future interest payments and periodic cash settlements of derivatives. |
(b) | Includes only short-term uncertain tax benefits because of uncertainties regarding the timing of resolution. |
• | In January 2016, the Company announced a randomized Phase III study evaluating Opdivo versus investigator's choice in patients with recurrent or metastatic platinum-refractory squamous cell carcinoma of the head and neck was stopped early because an assessment conducted by the independent Data Monitoring Committee (DMC) concluded that the study met its primary endpoint, demonstrating superior overall survival in patients receiving Opdivo compared to the control arm. |
• | In January 2016, the Company announced the FDA approved Opdivo in combination with Yervoy for the treatment of patients with BRAF V600 wild-type and BRAF V600 mutation positive unresectable or metastatic melanoma. This approval expands the original indication for the Opdivo+Yervoy regimen for the treatment of patients with BRAF V600 wild-type unresectable or metastatic melanoma to include patients, regardless of BRAF mutational status, based on data from the Phase III CheckMate-067 trial which evaluated progression-free survival and overall survival as co-primary endpoints. This indication is approved under accelerated approval based on progression-free survival. |
• | In January 2016, the Company announced the FDA expanded the use of Opdivo as a single agent to include previously untreated BRAF mutation positive advanced melanoma patients. The use of Opdivo as a single agent in patients with BRAF V600 mutation positive unresectable or metastatic melanoma is approved under accelerated approval based on progression-free survival. |
• | In November 2015, the Company announced the FDA approved Opdivo as a single agent for the treatment of previously untreated patients with BRAF V600 wild-type unresectable or metastatic melanoma. |
• | In November 2015, the Company announced results from multiple clinical trials |
◦ | CheckMate-066 - In the study evaluating Opdivo as a single agent versus dacarbazine in patients with previously untreated BRAF wild-type unresectable or metastatic melanoma, Opdivo continued to demonstrate superior overall survival versus dacarbazine with 57.7% of patients alive at two years compared to 26.7% of patients treated with dacarbazine. The safety profile of Opdivo was consistent with prior studies. |
◦ | Study 004 - In the study evaluating Opdivo in combination with Yervoy in patients with unresectable or metastatic melanoma on which the proof of concept for Opdivo+Yervoy regimen approval was based, data from the longest follow- |
• | In September 2015, the FDA approved Opdivo in combination with Yervoy, for the treatment of patients with BRAF V600 wild-type unresectable or metastatic melanoma. The announcement marked the first and only FDA approval of a regimen of two immuno-oncology agents in cancer. This indication is approved under accelerated approval based on tumor response rate and durability of response. |
• | In July 2015, the European Medicines Agency (EMA) validated the Company’s type II variation application that seeks to extend the use of Opdivo in combination with Yervoy for the treatment of advanced (unresectable or metastatic) melanoma in adults. The application is based on data from the Phase III CheckMate-067 study, Phase II CheckMate-069 study and the Phase Ib CA209-004 study. Validation of an application confirms that the submission is complete and starts the EMA's centralized review process. |
• | In June 2015, the Company announced the European Commission (EC) approved Opdivo for the treatment of both first-line and previously treated unresectable or metastatic melanoma patients, regardless of BRAF status. The approval allows for the marketing of Opdivo in all 28 Member States of the EU. Opdivo is the only PD-1 immune checkpoint inhibitor to receive an accelerated assessment in Europe, and is the first approval given by the EC for a PD-1 inhibitor in any cancer. |
• | In May 2015, the Company announced positive results of a Phase III trial (CheckMate-067) evaluating the Opdivo+Yervoy regimen or Opdivo monotherapy vs. Yervoy monotherapy in patients with previously untreated advanced melanoma. Both the Opdivo+Yervoy regimen (n=314) and Opdivo monotherapy (n=316) demonstrated superiority to Yervoy (n=315), the current standard of care, for the co-primary endpoint of progression-free survival (PFS). Median PFS was 11.5 months for the Opdivo+Yervoy regimen and 6.9 months for Opdivo monotherapy, vs. 2.9 months for Yervoy monotherapy. The Opdivo+Yervoy regimen demonstrated a 58% reduction in the risk of disease progression vs. Yervoy (hazard ratio: 0.42; 99.5% CI, 0.31 to 0.57; P<0.0001), while Opdivo monotherapy demonstrated a 43% risk reduction versus Yervoy monotherapy (hazard ratio: 0.57; 99.5% CI, 0.43 to 0.76; P<0.00001). The hazard ratio for the exploratory endpoint comparing Opdivo+Yervoy PFS and Opdivo PFS was 0.74 (95% CI, 0.60 to 0.92). The safety profile was consistent with previously-reported studies evaluating the Opdivo+Yervoy regimen. The treatment-related adverse event rate was 95.5% for the Opdivo+Yervoy regimen compared to 82.1% for Opdivo monotherapy and 86.2% for Yervoy monotherapy. Most select treatment-related adverse events were resolved using established management guidelines. The trial is ongoing and patients continue to be followed for overall survival, a co-primary endpoint. |
• | In April 2015, the Company announced positive results from a Phase II trial (CheckMate-069), evaluating the Opdivo+Yervoy regimen versus Yervoy alone in patients with previously untreated advanced melanoma. Patients with BRAF wild-type mutation status treated with the Opdivo+Yervoy regimen experienced a higher objective response rate (ORR) of 61% (n=44/72) – the primary study endpoint – compared to 11% (n=4/37) for patients administered Yervoy monotherapy (P<0.001). Complete responses were also reported in 22% (n=16) of patients with BRAF wild-type mutation status administered the Opdivo+Yervoy regimen and in no patients who received Yervoy monotherapy. Similar results were also observed in BRAF mutation-positive patients. |
• | In December 2015, the Company and Ono announced that Ono received manufacturing and marketing approval for Opdivo in Japan for the treatment of patients with unresectable, advanced or recurrent NSCLC. |
• | In November 2015, the Company announced the EC approved the reconciliation of indications for nivolumab under the Opdivo European Marketing Authorization Application (MAA). In compliance with EC regulations, BMS previously submitted two separate MAAs to the EMA; one under the name Opdivo for the treatment of unresectable or metastatic melanoma in adults, and one under the name Nivolumab BMS for the treatment of locally advanced or metastatic SQ NSCLC after prior chemotherapy. An application to reconcile these two indications was then submitted under the Opdivo brand name. Following approval for both of these indications by the EC earlier this year, the Company voluntarily withdrew the Marketing Authorization under the Nivolumab BMS brand name. This withdrawal has no impact for SQ NSCLC patients taking nivolumab since Opdivo is now approved for the treatment of SQ NSCLC, as well as for melanoma. |
• | In October 2015, the Company announced the FDA approved Opdivo for the treatment of previously treated patients with NSQ NSCLC regardless of PD-L1 expression, which expands upon the current indication for Opdivo in patients with previously treated SQ NSCLC. |
• | In September 2015, the Company announced longer term (18 month) survival data from CheckMate-057, an open-label, randomized Phase III study evaluating Opdivo (n=292) versus docetaxel (n=290) in previously treated patients with advanced NSQ NSCLC. Opdivo continued to demonstrate superior overall survival – the study’s primary endpoint – with an estimated 39% of patients alive at 18 months (95% CI, 34-45) versus 23% for docetaxel, based on a minimum follow-up of 17.1 months. Opdivo also continued to demonstrate a reduction in the risk of death by 28% (a hazard ratio of 0.72; 95% CI, 0.60 - 0.88). In |
• | In September 2015, the Company announced updated results from the Opdivo+Yervoy arms in CheckMate-012, a multi-arm Phase Ib trial evaluating Opdivo in patients with chemotherapy-naïve advanced NSCLC. In this study, Opdivo was administered as monotherapy or as part of a combination with other agents, including Yervoy, at different doses and schedules. Results from other cohorts in CheckMate-012 have been previously-unreported. These updated results include findings from the administration of four new dosing schedules of Opdivo+Yervoy (n=148), which resulted in confirmed objective response rates ranging from 13% to 39% depending on the administered regimen. Median duration of response was not reached in any of these arms with a median follow-up of 6.2 months to 16.6 months, and median progression-free survival PFS ranged from 4.9 months to 10.6 months. The types of treatment-related serious adverse events reported in these cohorts for CheckMate-012 were consistent with other previously-reported Opdivo+Yervoy cohorts of this trial. The new dosing schedules in this study resulted in less toxicity than previously-reported dosing schedules, and were characterized by low frequency of treatment-related adverse events leading to discontinuation (3% to 10%) and no treatment-related deaths. |
• | In September 2015, the Company announced longer term survival and safety data from CheckMate-017 and -063, two pivotal trials evaluating Opdivo in previously treated SQ NSCLC, showing sustained survival benefit across these studies. In both trials, Opdivo showed an estimated 18 month overall survival rate of 27% (CheckMate-063) to 28% (CheckMate-017); survival benefit was independent of PD-L1 expression. The safety profile of Opdivo is consistent with previously-reported trials, and in CheckMate-017, is also favorable compared to docetaxel. |
• | In July 2015, the EMA validated the Company’s type II variation application that seeks to extend the use of Opdivo monotherapy in NSQ NSCLC and is based on data from the Phase III CheckMate-057 study. |
• | In July 2015, the Company announced the EC approved Nivolumab BMS for the treatment of locally advanced or metastatic SQ NSCLC after prior chemotherapy. This approval marks the first major treatment advance in SQ NSCLC in more than a decade in the EU. Nivolumab is the first and only PD-1 immune checkpoint inhibitor to demonstrate overall survival in previously-treated metastatic SQ NSCLC. |
• | In May 2015, the Company announced results from CheckMate-017, a Phase III, open-label, randomized study evaluating Opdivo (n=135) versus docetaxel (n=137) in previously treated patients with advanced SQ NSCLC. At one year, Opdivo demonstrated an overall survival rate of 42% versus 24% for docetaxel, with a median overall survival of 9.2 months versus 6 months, respectively. Opdivo reduced the risk of death by 41%, based upon a hazard ratio of 0.59 (95% CI, 0.44-0.79; P = 0.00025). The safety profile of Opdivo in CheckMate-017 was consistent with prior studies and favorable versus docetaxel. |
• | In May 2015, the Company announced that Opdivo was the first PD-1 inhibitor to demonstrate superior overall survival versus standard of care (docetaxel) in an open-label, randomized Phase III study (CheckMate-057) evaluating previously-treated patients with advanced, NSQ NSCLC. A 27% reduction in the risk of progression or death – the primary study endpoint – was reported for Opdivo (n=292) versus docetaxel (n=290) based upon a hazard ratio of 0.73 (96% CI, 0.59-0.89; P=0.0015). Opdivo was associated with a doubling of overall median survival across the continuum of PD-L1 expression, starting at 1% level of expression, in the trial. The safety profile of Opdivo in CheckMate-057 was favorable versus docetaxel with grade 3–5 treatment-related adverse events reported in 10% of patients who were treated with Opdivo versus 54% in the docetaxel arm. In April 2015, the Company announced that Checkmate-057 was stopped early because an assessment conducted by the independent DMC concluded that the study met its primary endpoint. |
• | In March 2015, the Company announced the FDA approved Opdivo for the treatment of patients with advanced SQ NSCLC with progression on or after platinum-based chemotherapy. Opdivo is the first and only PD-1 therapy to demonstrate overall survival in previously treated advanced SQ NSCLC. Opdivo demonstrated significantly superior overall survival vs. docetaxel, with a 41% reduction in the risk of death (hazard ratio: 0.59 [95% CI: 0.44, 0.79; p=0.00025]), in a prespecified interim analysis of a Phase III clinical trial. The median overall survival was 9.2 months in the Opdivo arm (95% CI: 7.3, 13.3) and 6 months in the docetaxel arm (95% CI: 5.1, 7.3). |
• | In November 2015, the Company announced the FDA approved Opdivo for the treatment of patients with advanced RCC who have received prior anti-angiogenic therapy. |
• | In November 2015, the Company announced the EMA validated a type II variation application, which seeks to extend the current indication for Opdivo to include the treatment of adult patients with advanced RCC after prior therapy. Validation of the application confirms the submission is complete and begins the EMA’s centralized review process. |
• | In September 2015, the Company announced results from CheckMate-025, a Phase III study comparing Opdivo to everolimus in advanced RCC after prior anti-angiogenic treatment, showing a significant overall survival benefit for Opdivo. In the trial, Opdivo demonstrated a median overall survival benefit of 25 months compared to 19.6 months for everolimus. Clinical benefit for Opdivo was observed regardless of level of PD-L1 expression. The safety profile shown in CheckMate-025 is consistent with |
• | In May 2015, the Company announced results from an interim analysis of CA209-040, a Phase I/II dose-ranging trial evaluating the safety and anti-tumor activity of Opdivo in previously-treated patients with hepatocellular carcinoma (HCC) or advanced liver cancer. Initial findings demonstrated that the estimated survival rate in evaluable patients (n=47) was 62% at 12 months. Results also show the safety profile of Opdivo is generally consistent with that previously reported for Opdivo in other tumor types. |
• | In January 2016, the Company and AbbVie announced the Committee for Medicinal Products for Human Use (CHMP) of the EMA has adopted a positive opinion recommending that Empliciti be granted approval for the treatment of multiple myeloma as combination therapy with Revlimid* and dexamethasone in patients who have received at least one prior therapy. The application now will be reviewed by the EC, which has the authority to approve medicines for the EU. |
• | In December 2015, the Company and AbbVie announced extended follow-up data and a pre-specified interim overall survival analysis of Empliciti in combination with Revlimid* and dexamethasone (ERd) in patients with relapsed or refractory multiple myeloma from ELOQUENT-2. The follow-up data demonstrated that Empliciti in combination with Rd had an improvement in progression-free survival with a hazard ratio (HR) of 0.73 (95% CI: 0.60, 0.89; p="0".0014) versus Rd alone. This result was consistent with the improvement in PFS that was observed at the time of the primary analysis (HR 0.70 [95% CI: 0.57, 0.85; p = 0.0004]). |
• | In November 2015, the Company and AbbVie announced the FDA approved Empliciti for the treatment of multiple myeloma as a combination therapy with Revlimid* and dexamethasone in patients who have received one to three prior therapies. |
• | In June 2015, the Company and AbbVie announced that results from an interim analysis of its Phase III, randomized, open-label ELOQUENT-2 trial. The trial (n=646) evaluated Empliciti in combination with lenalidomide and dexamethasone (ELd) versus lenalidomide and dexamethasone alone (Ld) for the treatment of relapsed or refractory multiple myeloma. The study met its co-primary endpoints demonstrating superior PFS and ORR. The ELd arm demonstrated a 30% reduction in the risk of disease progression or death compared to the Ld arm (HR 0.70, 95% CI, [0.57, 0.85]; p = 0.0004). The PFS rates in the ELd arm versus the Ld arm were 68% versus 57% at 1 year and 41% versus 27% at 2 years, respectively. A significant ORR also was observed with 79% (74% to 83%) in the ELd arm compared to 66% (60% to 71%) in the Ld arm (odds ratio, 1.9; 1.4 to 2.8; p=0.0002). The safety profile was consistent with previously-reported studies and there were minimal incremental adverse events with the addition of Empliciti to lenalidomide and dexamethasone. |
• | In August 2015, the Company and Otsuka announced the FDA approved an update to the Sprycel product labeling. The labeling now includes five-year efficacy and safety data in adult patients with newly diagnosed Philadelphia chromosome-positive (Ph+) CML in CP and seven-year data in CP Ph+ CML patients who are resistant or intolerant to prior therapy, including Gleevec* (imatinib mesylate). |
• | In October 2015, the Company announced the FDA approved Yervoy for the adjuvant treatment of patients with cutaneous melanoma with pathologic involvement of regional lymph nodes of more than 1 mm who have undergone complete resection including total lymphadenectomy. |
• | In October 2015, the Company announced a Yervoy Phase III trial, Study-104 in subjects with stage IV/recurrent NSCLC, which compared the efficacy of Yervoy in combination with paclitaxel and carboplatin versus placebo, and versus paclitaxel and carboplatin alone did not meet the primary endpoint of overall survival for the Yervoy treatment arms and has been discontinued. No new safety concerns with Yervoy were identified in either study. The Company will complete a full evaluation of the data and work with investigators on the future publication of the results. |
• | In July 2015, the Company announced two Yervoy Phase III trials, Study-095 in metastatic castration resistant prostate cancer and Study-156 in newly diagnosed extensive-stage disease small cell lung cancer, did not meet their primary endpoints of overall survival versus standard of care and have been discontinued. No new safety concerns with Yervoy were identified in either study. The Company will complete a full evaluation of the data and work with investigators on the future publication of the results. |
• | In July 2015, the Japanese Ministry of Health, Labour and Welfare approved Yervoy for first and second line treatment for unresectable malignant melanoma. |
• | In January 2016, the Company announced the FDA approved Daklinza in combination with sofosbuvir (with or without ribavirin) in genotypes 1 and 3. The expanded label includes data in three additional challenging-to-treat patient populations: chronic HCV patients with HIV-1 coinfection, advanced cirrhosis, or post-liver transplant recurrence of HCV. The Daklinza plus sofosbuvir regimen is already available for the treatment of chronic HCV genotype 3, and is currently the only 12-week, once-daily all-oral treatment option for these patients. Sustained virologic response (SVR) rates are reduced in genotype 3 patients with cirrhosis receiving Daklinza and sofosbuvir for 12 weeks without ribavirin. Sofosbuvir is a product of Gilead Sciences, Inc. (Gilead). |
• | In January 2016, the Company announced the EC approved Daklinza for the treatment of chronic HCV in three new patient populations. The expanded label allows for the use of Daklinza in combination with sofosbuvir (with or without ribavirin, depending on the indication and HCV genotype) in HCV patients with decompensated cirrhosis, HIV-1 coinfection, and post-liver transplant recurrence of HCV in all 28 Member States of the EU. |
• | In November 2015, the Company announced data from the Phase III ALLY-3+ trial investigating a regimen of Daklinza in combination with sofosbuvir and ribavirin in genotype 3 HCV patients with advanced fibrosis or cirrhosis, for treatment durations of 12 and 16 weeks. This patient population is one of the most difficult to treat, among whom SVR rates, or cure, have proved harder to achieve. The results show that 100% of patients in the advanced fibrosis cohort achieved SVR12 in both the 12- and 16-week arms of the study. SVR12 rates were 83% and 89% in patients with cirrhosis in the 12- and 16-week arms, respectively. |
• | In October 2015, the Company announced the National Institute for Health and Care Excellence (NICE) has recommended Daklinza in England and Wales for the treatment of adult patients with chronic HCV. Specifically, NICE recommended Daklinza to treat certain patients with HCV genotypes 1, 3 and 4. Approximately 214,000 people in the UK are thought to have chronic HCV, and roughly 100,000 of those patients are estimated to have genotype 3, a difficult-to-treat and often aggressive form of chronic HCV. |
• | In September 2015, the Company announced the EC approved an updated label for Daklinza for the treatment of genotype 3 chronic HCV. The update allows the use of Daklinza in combination with sofosbuvir for 12 weeks in patients without cirrhosis in all 28 Member States of the EU, and marks the first time these patients with genotype 3 HCV have a once-daily, all-oral treatment regimen of this shorter duration. |
• | In July 2015, the Company announced the FDA approved Daklinza for use with sofosbuvir for the treatment of patients with chronic HCV genotype 3. This approval marks the first time patients with chronic HCV genotype 3 have a 12-week, once-daily, all-oral treatment option. SVR rates were reduced in HCV genotype 3-infected patients with cirrhosis receiving this regimen. |
• | In July 2015, the Company announced that it does not plan to seek regulatory approval of the new drug application of the HCV triple-regimen, or TRIO, of DCV, ASV and BCV, in the United States or in Europe. |
• | In May 2015, the Company announced the FDA amended a previously granted Breakthrough Therapy Designation for the investigational daclatasvir and sofosbuvir combination for use in HCV patients. The updated Designation reflects recently presented data on HCV genotype 1 patients with advanced cirrhosis (Child-Pugh Class B or C) and those who develop genotype 1 HCV recurrence post-liver transplant. |
• | In April 2015, the Company announced the primary endpoints were successfully met in ALLY-1, a Phase III clinical trial evaluating a 12-week, combination of daclatasvir and sofosbuvir once-daily with ribavirin for the treatment of patients with chronic HCV with either advanced cirrhosis or post-liver transplant recurrence of HCV. |
• | In February 2015, the Company announced results from ALLY-2, a Phase III clinical trial evaluating the investigational once-daily combination of daclatasvir and sofosbuvir for the treatment of patients with chronic HCV coinfected with HIV – a patient population that historically has been challenging to treat in large part due to potential drug-drug interactions between the therapy regimens used to treat each infection. Among ALLY-2 patients treated for 12 weeks (treatment-naïve and -experienced), 97% (n=149/153) achieved cure (SVR12 weeks after treatment). The study met the primary endpoint, with 96% (n=80/83) of treatment-naïve genotype 1 patients achieving SVR12. Treatment with daclatasvir in combination with sofosbuvir in this study showed high SVR rates, with no discontinuations due to adverse events, and no serious adverse events related to study medications throughout the treatment phase. |
• | In February 2015, the FDA notified the Company of its intention to rescind the Breakthrough Therapy Designation for certain genotype 1 HCV regimens related to daclatasvir and other investigational BMS therapies. This will not impact our current submission/resubmission timetable of the NDA for daclatasvir in combination with other antiviral agents for the treatment of HCV. |
• | In July 2015, the Company announced the EC approved Evotaz for the treatment of HIV-1 infected adults without known mutations associated with resistance to atazanavir. Evotaz is a once-daily single tablet two drug regimen combining Reyataz and Tybost*. Tybost* is a product of Gilead. |
• | In June 2015, the FDA granted pediatric exclusivity for Reyataz which provides an additional six month period of exclusivity in the U.S. |
• | In January 2015, the Company announced the FDA approved Evotaz for the treatment of the HIV-1 infection in adults, a once-daily single tablet two drug regimen combining Reyataz and Tybost*. |
• | In June 2015, the Company announced data from the Orencia Phase IIIb AVERT and AMPLE trials. These trials included early moderate to severe RA patients with active disease. AVERT trial data suggests potentially faster onset of clinical response and greater drug-free clinical remission with earlier use in patients taking Orencia plus methotrexate over patients taking methotrexate alone. Exploratory data of patients with high anti-citrullinated protein antibody levels at baseline in the AMPLE trial suggest better response with Orencia than with adalimumab. Adalimumab is a product of AbbVie. |
• | In April 2015, the EMA approved the ClickJect Pre-Filled Pen, a new autoinjector delivery device for Orencia for use in adult patients in the EU who have moderate to severe active RA in combination with methotrexate after inadequate disease-modifying anti-rheumatic drug response. |
• | In December 2015, the Company and Pfizer announced results from a post-hoc early time course subanalysis of the Phase III AMPLIFY trial. The subanalysis demonstrated Eliquis was comparable to conventional therapy (subcutaneous enoxaparin overlapped and followed by oral warfarin dose-adjusted to an international normalized ratio of 2.0 to 3.0) in recurrent VTE and VTE-related death with significantly less major bleeding during the first 7, 21 and 90 days after starting treatment. Results of the subanalyses were consistent with the overall results of the Eliquis Phase III AMPLIFY trial. |
• | In September 2015, the Company and Pfizer announced the first patient has been enrolled into the Phase IV clinical trial, AUGUSTUS which will evaluate the safety of Eliquis versus warfarin or other vitamin K antagonists in patients with NVAF and a recent acute coronary syndrome or undergoing percutaneous coronary intervention, also known as a stent. |
Item 7A. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. |
Item 8. | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. |
Year Ended December 31, | ||||||||||||
EARNINGS | 2015 | 2014 | 2013 | |||||||||
Net product sales | $ | 14,045 | $ | 11,660 | $ | 12,304 | ||||||
Alliance and other revenues | 2,515 | 4,219 | 4,081 | |||||||||
Total Revenues | 16,560 | 15,879 | 16,385 | |||||||||
Cost of products sold | 3,909 | 3,932 | 4,619 | |||||||||
Marketing, selling and administrative | 4,841 | 4,822 | 4,939 | |||||||||
Research and development | 5,920 | 4,534 | 3,731 | |||||||||
Other (income)/expense | (187 | ) | 210 | 205 | ||||||||
Total Expenses | 14,483 | 13,498 | 13,494 | |||||||||
Earnings Before Income Taxes | 2,077 | 2,381 | 2,891 | |||||||||
Provision for Income Taxes | 446 | 352 | 311 | |||||||||
Net Earnings | 1,631 | 2,029 | 2,580 | |||||||||
Net Earnings Attributable to Noncontrolling Interest | 66 | 25 | 17 | |||||||||
Net Earnings Attributable to BMS | $ | 1,565 | $ | 2,004 | $ | 2,563 | ||||||
Earnings per Common Share | ||||||||||||
Basic | $ | 0.94 | $ | 1.21 | $ | 1.56 | ||||||
Diluted | $ | 0.93 | $ | 1.20 | $ | 1.54 | ||||||
Cash dividends declared per common share | $ | 1.49 | $ | 1.45 | $ | 1.41 |
Year Ended December 31, | ||||||||||||
COMPREHENSIVE INCOME | 2015 | 2014 | 2013 | |||||||||
Net Earnings | $ | 1,631 | $ | 2,029 | $ | 2,580 | ||||||
Other Comprehensive Income/(Loss), net of taxes and reclassifications to earnings: | ||||||||||||
Derivatives qualifying as cash flow hedges | (51 | ) | 69 | 7 | ||||||||
Pension and postretirement benefits | 101 | (324 | ) | 1,166 | ||||||||
Available-for-sale securities | (54 | ) | 3 | (37 | ) | |||||||
Foreign currency translation | (39 | ) | (32 | ) | (75 | ) | ||||||
Total Other Comprehensive Income/(Loss) | (43 | ) | (284 | ) | 1,061 | |||||||
Comprehensive Income | 1,588 | 1,745 | 3,641 | |||||||||
Comprehensive Income Attributable to Noncontrolling Interest | 66 | 25 | 17 | |||||||||
Comprehensive Income Attributable to BMS | $ | 1,522 | $ | 1,720 | $ | 3,624 |
December 31, | ||||||||
2015 | 2014 | |||||||
ASSETS | ||||||||
Current Assets: | ||||||||
Cash and cash equivalents | $ | 2,385 | $ | 5,571 | ||||
Marketable securities | 1,885 | 1,864 | ||||||
Receivables | 4,299 | 3,390 | ||||||
Inventories | 1,221 | 1,560 | ||||||
Deferred income taxes | — | 1,644 | ||||||
Prepaid expenses and other | 491 | 470 | ||||||
Assets held-for-sale | 134 | 109 | ||||||
Total Current Assets | 10,415 | 14,608 | ||||||
Property, plant and equipment | 4,412 | 4,417 | ||||||
Goodwill | 6,881 | 7,027 | ||||||
Other intangible assets | 1,419 | 1,753 | ||||||
Deferred income taxes | 2,844 | 915 | ||||||
Marketable securities | 4,660 | 4,408 | ||||||
Other assets | 1,117 | 621 | ||||||
Total Assets | $ | 31,748 | $ | 33,749 | ||||
LIABILITIES | ||||||||
Current Liabilities: | ||||||||
Short-term borrowings | $ | 139 | $ | 590 | ||||
Accounts payable | 1,565 | 2,487 | ||||||
Accrued expenses | 2,759 | 2,459 | ||||||
Deferred income | 1,003 | 1,167 | ||||||
Accrued rebates and returns | 1,324 | 851 | ||||||
Income taxes payable | 572 | 262 | ||||||
Dividends payable | 655 | 645 | ||||||
Total Current Liabilities | 8,017 | 8,461 | ||||||
Pension, postretirement and postemployment liabilities | 949 | 1,115 | ||||||
Deferred income | 586 | 770 | ||||||
Income taxes payable | 742 | 560 | ||||||
Other liabilities | 480 | 618 | ||||||
Long-term debt | 6,550 | 7,242 | ||||||
Total Liabilities | 17,324 | 18,766 | ||||||
Commitments and contingencies (Note 22) | ||||||||
EQUITY | ||||||||
Bristol-Myers Squibb Company Shareholders’ Equity: | ||||||||
Preferred stock, $2 convertible series, par value $1 per share: Authorized 10 million shares; issued and outstanding 4,161 in 2015 and 4,212 in 2014, liquidation value of $50 per share | — | — | ||||||
Common stock, par value of $0.10 per share: Authorized 4.5 billion shares; 2.2 billion issued in both 2015 and 2014 | 221 | 221 | ||||||
Capital in excess of par value of stock | 1,459 | 1,507 | ||||||
Accumulated other comprehensive loss | (2,468 | ) | (2,425 | ) | ||||
Retained earnings | 31,613 | 32,541 | ||||||
Less cost of treasury stock — 539 million common shares in 2015 and 547 million in 2014 | (16,559 | ) | (16,992 | ) | ||||
Total Bristol-Myers Squibb Company Shareholders' Equity | 14,266 | 14,852 | ||||||
Noncontrolling interest | 158 | 131 | ||||||
Total Equity | 14,424 | 14,983 | ||||||
Total Liabilities and Equity | $ | 31,748 | $ | 33,749 |
Year Ended December 31, | ||||||||||||
2015 | 2014 | 2013 | ||||||||||
Cash Flows From Operating Activities: | ||||||||||||
Net earnings | $ | 1,631 | $ | 2,029 | $ | 2,580 | ||||||
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||||||||||||
Net earnings attributable to noncontrolling interest | (66 | ) | (25 | ) | (17 | ) | ||||||
Depreciation and amortization, net | 376 | 467 | 763 | |||||||||
Deferred income taxes | (347 | ) | (542 | ) | (491 | ) | ||||||
Stock-based compensation | 235 | 213 | 191 | |||||||||
Impairment charges | 192 | 401 | 40 | |||||||||
Pension settlements and amortization | 245 | 971 | 294 | |||||||||
Other adjustments | 594 | (567 | ) | (9 | ) | |||||||
Changes in operating assets and liabilities: | ||||||||||||
Receivables | (942 | ) | (252 | ) | (504 | ) | ||||||
Inventories | 97 | (254 | ) | (45 | ) | |||||||
Accounts payable | (919 | ) | (44 | ) | 412 | |||||||
Deferred income | 218 | 613 | 965 | |||||||||
Income taxes payable | 47 | 171 | 126 | |||||||||
Other | 471 | (33 | ) | (760 | ) | |||||||
Net Cash Provided by Operating Activities | 1,832 | 3,148 | 3,545 | |||||||||
Cash Flows From Investing Activities: | ||||||||||||
Sale and maturities of marketable securities | 2,794 | 4,095 | 1,815 | |||||||||
Purchase of marketable securities | (3,143 | ) | (5,719 | ) | (1,859 | ) | ||||||
Capital expenditures | (820 | ) | (526 | ) | (537 | ) | ||||||
Divestiture and other proceeds | 708 | 3,585 | 9 | |||||||||
Acquisition and other payments | (1,111 | ) | (219 | ) | — | |||||||
Net Cash Provided by/(Used in) Investing Activities | (1,572 | ) | 1,216 | (572 | ) | |||||||
Cash Flows From Financing Activities: | ||||||||||||
Short-term borrowings, net | (449 | ) | 244 | 198 | ||||||||
Issuance of long-term debt | 1,268 | — | 1,489 | |||||||||
Repayment of long-term debt | (1,957 | ) | (676 | ) | (597 | ) | ||||||
Interest rate swap contract terminations | (2 | ) | 105 | 20 | ||||||||
Issuance of common stock | 266 | 288 | 564 | |||||||||
Repurchase of common stock | — | — | (433 | ) | ||||||||
Dividends | (2,477 | ) | (2,398 | ) | (2,309 | ) | ||||||
Net Cash Used in Financing Activities | (3,351 | ) | (2,437 | ) | (1,068 | ) | ||||||
Effect of Exchange Rates on Cash and Cash Equivalents | (95 | ) | 58 | 25 | ||||||||
Increase/(Decrease) in Cash and Cash Equivalents | (3,186 | ) | 1,985 | 1,930 | ||||||||
Cash and Cash Equivalents at Beginning of Year | 5,571 | 3,586 | 1,656 | |||||||||
Cash and Cash Equivalents at End of Year | $ | 2,385 | $ | 5,571 | $ | 3,586 |
2015 | 2014 | 2013 | |||||||
McKesson Corporation | 21 | % | 20 | % | 19 | % | |||
AmerisourceBergen Corporation | 16 | % | 17 | % | 15 | % | |||
Cardinal Health, Inc. | 12 | % | 12 | % | 14 | % |
Revenues | Property, Plant and Equipment | |||||||||||||||||||
Dollars in Millions | 2015 | 2014 | 2013 | 2015 | 2014 | |||||||||||||||
United States | $ | 8,188 | $ | 7,716 | $ | 8,318 | $ | 3,681 | $ | 3,686 | ||||||||||
Europe | 3,491 | 3,592 | 3,930 | 616 | 597 | |||||||||||||||
Rest of the World | 4,142 | 3,459 | 3,295 | 115 | 134 | |||||||||||||||
Other(a) | 739 | 1,112 | 842 | — | — | |||||||||||||||
Total | $ | 16,560 | $ | 15,879 | $ | 16,385 | $ | 4,412 | $ | 4,417 |
(a) | Other revenues include royalties and alliance-related revenues for products not sold by our regional commercial organizations. |
Year Ended December 31, | ||||||||||||
Dollars in Millions | 2015 | 2014 | 2013 | |||||||||
Virology | ||||||||||||
Baraclude (entecavir) | $ | 1,312 | $ | 1,441 | $ | 1,527 | ||||||
Hepatitis C Franchise | 1,603 | 256 | — | |||||||||
Reyataz (atazanavir sulfate) Franchise | 1,139 | 1,362 | 1,551 | |||||||||
Sustiva (efavirenz) Franchise | 1,252 | 1,444 | 1,614 | |||||||||
Oncology | ||||||||||||
Empliciti (elotuzumab) | 3 | — | — | |||||||||
Erbitux* (cetuximab) | 501 | 723 | 696 | |||||||||
Opdivo (nivolumab) | 942 | 6 | — | |||||||||
Sprycel (dasatinib) | 1,620 | 1,493 | 1,280 | |||||||||
Yervoy (ipilimumab) | 1,126 | 1,308 | 960 | |||||||||
Neuroscience | ||||||||||||
Abilify* (aripiprazole) | 746 | 2,020 | 2,289 | |||||||||
Immunoscience | ||||||||||||
Orencia (abatacept) | 1,885 | 1,652 | 1,444 | |||||||||
Cardiovascular | ||||||||||||
Eliquis (apixaban) | 1,860 | 774 | 146 | |||||||||
Mature Products and All Other | 2,571 | 3,400 | 4,878 | |||||||||
Total Revenues | $ | 16,560 | $ | 15,879 | $ | 16,385 |
Year Ended December 31, | ||||||||||||
Dollars in Millions | 2015 | 2014 | 2013 | |||||||||
Net product sales | $ | 14,045 | $ | 11,660 | $ | 12,304 | ||||||
Alliance revenues | 2,408 | 3,828 | 3,804 | |||||||||
Other revenues | 107 | 391 | 277 | |||||||||
Total Revenues | $ | 16,560 | $ | 15,879 | $ | 16,385 |
• | When BMS is the principal in the end customer sale, 100% of product sales are included in net product sales. When BMS's alliance partner is the principal in the end customer sale, BMS's contractual share of the third-party sales and/or royalty income are included in alliance and other revenue as the sale of commercial products are considered part of BMS's ongoing major or central operations. Refer to "Revenue Recognition" included in "—Note 1. Accounting Policies" for information regarding recognition criteria. |
• | Amounts payable to BMS by alliance partners (who are the principal in the end customer sale) for supply of commercial products are included in alliance and other revenue as the sale of commercial products are considered part of BMS's ongoing major or central operations. |
• | Profit sharing, royalties and other sales-based fees payable by BMS to alliance partners are included in cost of products sold as incurred. |
• | Cost reimbursements between the parties are recognized as incurred and included in cost of products sold; marketing, selling and administrative expenses; or research and development expenses, based on the underlying nature of the related activities subject to reimbursement. |
• | Upfront and contingent development and approval milestones payable to BMS by alliance partners for investigational compounds and commercial products are deferred and amortized over the shorter of the contractual term or the periods in which the related compounds or products are expected to contribute to future cash flows. The amortization is presented consistent with the nature of the payment under the arrangement. For example, amounts received for investigational compounds are presented in other (income)/expense as the activities being performed at that time are not related to the sale of commercial products that are part of BMS’s ongoing major or central operations; amounts received for commercial products are presented in alliance and other revenue as the sale of commercial products are considered part of BMS’s ongoing major or central operations (except for the AstraZeneca PLC (AstraZeneca) alliance pertaining to the Amylin products - see further discussion under the specific AstraZeneca alliance disclosure herein). |
• | Upfront and contingent approval milestones payable by BMS to alliance partners for commercial products are capitalized and amortized over the shorter of the contractual term or the periods in which the related products are expected to contribute to future cash flows. The amortization is included in cost of products sold. |
• | Upfront and contingent milestones payable by BMS to alliance partners prior to regulatory approval are expensed as incurred and included in research and development expenses. |
• | Royalties and other contingent consideration payable to BMS by alliance partners related to the divestiture of such businesses are included in other income when earned. |
• | Equity in net income of affiliates is included in other (income)/expense. |
• | All payments between BMS and its alliance partners are presented in cash flows from operating activities, except as otherwise described below. |
Year Ended December 31, | |||||||||||
Dollars in Millions | 2015 | 2014 | 2013 | ||||||||
Revenues from alliances: | |||||||||||
Net product sales | $ | 4,308 | $ | 3,531 | $ | 4,417 | |||||
Alliance revenues | 2,408 | 3,828 | 3,804 | ||||||||
Total Revenues | $ | 6,716 | $ | 7,359 | $ | 8,221 | |||||
Payments to/(from) alliance partners: | |||||||||||
Cost of products sold | $ | 1,655 | $ | 1,394 | $ | 1,356 | |||||
Marketing, selling and administrative | 15 | 134 | (183 | ) | |||||||
Research and development | 693 | 8 | (140 | ) | |||||||
Other (income)/expense | (733 | ) | (1,076 | ) | (313 | ) | |||||
Noncontrolling interest, pretax | 51 | 38 | 36 |
Selected Alliance Balance Sheet Information: | December 31, | |||||||
Dollars in Millions | 2015 | 2014 | ||||||
Receivables – from alliance partners | $ | 958 | $ | 888 | ||||
Accounts payable – to alliance partners | 542 | 1,479 | ||||||
Deferred income from alliances | 1,459 | 1,493 |
Year Ended December 31, | ||||||||||||
Dollars in Millions | 2015 | 2014 | 2013 | |||||||||
Revenues from Pfizer alliance: | ||||||||||||
Net product sales | $ | 1,849 | $ | 771 | $ | 144 | ||||||
Alliance revenues | 11 | 3 | 2 | |||||||||
Total Revenues | $ | 1,860 | $ | 774 | $ | 146 | ||||||
Payments to/(from) Pfizer: | ||||||||||||
Cost of products sold – Profit sharing | $ | 895 | $ | 363 | $ | 69 | ||||||
Cost reimbursements to Pfizer | 15 | 26 | 4 | |||||||||
Other (income)/expense – Amortization of deferred income | (55 | ) | (50 | ) | (41 | ) | ||||||
Selected Alliance Cash Flow information: | ||||||||||||
Deferred income | 20 | 100 | 205 | |||||||||
Selected Alliance Balance Sheet information: | December 31, | |||||||||||
Dollars in Millions | 2015 | 2014 | ||||||||||
Deferred income | $ | 576 | $ | 611 |
Year Ended December 31, | ||||||||||||
Dollars in Millions | 2015 | 2014 | 2013 | |||||||||
Revenues from Gilead alliances: | ||||||||||||
Alliance revenues | $ | 1,096 | $ | 1,255 | $ | 1,366 | ||||||
Equity in net loss of affiliates | $ | 17 | $ | 39 | $ | 17 |
Selected Alliance Balance Sheet information: | December 31, | |||||||
Dollars in Millions | 2015 | 2014 | ||||||
Deferred income | $ | 699 | $ | 316 |
Annual U.S. Net Sales | BMS Share as a % of U.S. Net Sales |
$0 to $2.7 billion | 50% |
$2.7 billion to $3.2 billion | 20% |
$3.2 billion to $3.7 billion | 7% |
$3.7 billion to $4.0 billion | 2% |
$4.0 billion to $4.2 billion | 1% |
In excess of $4.2 billion | 20% |
% of Net Sales | |||
2010 - 2012 | 2013 - 2020 | ||
$0 to $400 million | 30% | 65% | |
$400 million to $600 million | 5% | 12% | |
$600 million to $800 million | 3% | 3% | |
$800 million to $1.0 billion | 2% | 2% | |
In excess of $1.0 billion | 1% | 1% |
Year Ended December 31, | ||||||||||||
Dollars in Millions | 2015 | 2014 | 2013 | |||||||||
Revenues from Otsuka alliances: | ||||||||||||
Net product sales | $ | 1,501 | $ | 1,493 | $ | 1,543 | ||||||
Alliance revenues(a) | 604 | 1,778 | 1,840 | |||||||||
Total Revenues | $ | 2,105 | $ | 3,271 | $ | 3,383 | ||||||
Payments to/(from) Otsuka: | ||||||||||||
Cost of products sold: | ||||||||||||
Oncology fee | $ | 299 | $ | 297 | $ | 295 | ||||||
Royalties | 30 | 90 | 86 | |||||||||
Cost of product supply | 35 | 67 | 135 |
(a) | Includes the amortization of the extension payment as a reduction to alliance revenue of $21 million in 2015 and $66 million in 2014 and 2013. |
Year Ended December 31, | ||||||||||||
Dollars in Millions | 2015 | 2014 | 2013 | |||||||||
Revenues from Lilly alliance: | ||||||||||||
Net product sales | $ | 492 | $ | 691 | $ | 696 | ||||||
Alliance revenues | 9 | 32 | — | |||||||||
Total revenues | $ | 501 | $ | 723 | $ | 696 | ||||||
Payments to/(from) Lilly: | ||||||||||||
Cost of products sold: | ||||||||||||
Distribution fees and royalties | $ | 204 | $ | 287 | $ | 289 | ||||||
Amortization of intangible asset | 11 | 37 | 37 | |||||||||
Cost of product supply | 46 | 69 | 65 | |||||||||
Other (income)/expense: | ||||||||||||
Royalties | (70 | ) | — | (30 | ) | |||||||
Loss on sale of business | 171 | — | — |
Selected Alliance Balance Sheet information | December 31, | |||||||
Dollars in Millions | 2015 | 2014 | ||||||
Other intangible assets – Non-refundable upfront, milestone and other licensing payments | $ | — | $ | 137 |
2014 | 2015 | 2016 | 2017 | 2018 | 2019 - 2025 | ||||||
Onglyza* and Farxiga* Worldwide Net Sales up to $500 million | 44 | % | 35 | % | 27 | % | 12 | % | 20 | % | 14-25% |
Onglyza* and Farxiga* Worldwide Net Sales over $500 million | 3 | % | 7 | % | 9 | % | 12 | % | 20 | % | 14-25% |
Amylin products U.S. Net Sales | — | 2 | % | 2 | % | 5 | % | 10 | % | 5-12% |
Year Ended December 31, | ||||||||||||
Dollars in Millions | 2015 | 2014 | 2013 | |||||||||
Revenues from AstraZeneca alliances: | ||||||||||||
Net product sales | $ | 14 | $ | 160 | $ | 1,658 | ||||||
Alliance revenues | 182 | 135 | 16 | |||||||||
Total Revenues | $ | 196 | $ | 295 | $ | 1,674 | ||||||
Payments to/(from) AstraZeneca: | ||||||||||||
Cost of products sold: | ||||||||||||
Profit sharing | $ | 1 | $ | 79 | $ | 673 | ||||||
Amortization of deferred income | — | — | (307 | ) | ||||||||
Cost reimbursements to/(from) AstraZeneca recognized in: | ||||||||||||
Cost of products sold | — | (9 | ) | (25 | ) | |||||||
Marketing, selling and administrative | — | (8 | ) | (172 | ) | |||||||
Research and development | — | (16 | ) | (86 | ) | |||||||
Other (income)/expense: | ||||||||||||
Amortization of deferred income | (105 | ) | (80 | ) | (31 | ) | ||||||
Provision for restructuring | — | (2 | ) | (25 | ) | |||||||
Royalties | (215 | ) | (192 | ) | — | |||||||
Transitional services | (12 | ) | (90 | ) | — | |||||||
Gain on sale of business | (82 | ) | (536 | ) | — | |||||||
Selected Alliance Cash Flow information: | ||||||||||||
Deferred income | 34 | 315 | 215 | |||||||||
Divestiture and other proceeds | 374 | 3,495 | — |
Selected Alliance Balance Sheet information: | December 31, | |||||||
Dollars in Millions | 2015 | 2014 | ||||||
Deferred income attributed to: | ||||||||
Assets not yet transferred to AstraZeneca | $ | — | $ | 176 | ||||
Services not yet performed for AstraZeneca | 144 | 226 |
Year Ended December 31, | ||||||||||||
Dollars in Millions | 2015 | 2014 | 2013 | |||||||||
Revenues from Sanofi alliances: | ||||||||||||
Net product sales | $ | 110 | $ | 102 | $ | 153 | ||||||
Alliance revenues | 296 | 317 | 336 | |||||||||
Total Revenues | $ | 406 | $ | 419 | $ | 489 | ||||||
Payments to/(from) Sanofi: | ||||||||||||
Equity in net income of affiliates | (104 | ) | (146 | ) | (183 | ) | ||||||
Noncontrolling interest – pretax | 51 | 38 | 36 | |||||||||
Selected Alliance Cash Flow information: | ||||||||||||
Distributions (to)/from Sanofi - Noncontrolling interest | (45 | ) | (49 | ) | 43 | |||||||
Distributions from Sanofi – Investment in affiliates | 105 | 153 | 149 | |||||||||
Selected Alliance Balance Sheet information: | December 31, | |||||||||||
Dollars in Millions | 2015 | 2014 | ||||||||||
Investment in affiliates – territory covering Europe and Asia(a) | $ | 25 | $ | 32 | ||||||||
Noncontrolling interest | 44 | 38 |
(a) | Included in alliance receivables. |
Year Ended December 31, | ||||||||||||
Dollars in Millions | 2015 | 2014 | 2013 | |||||||||
Net sales | $ | 257 | $ | 360 | $ | 395 | ||||||
Gross profit | 213 | 297 | 319 | |||||||||
Net income | 209 | 292 | 313 |
Year Ended December 31, | ||||||||||||
Dollars in Millions | 2015 | 2014 | 2013 | |||||||||
Revenues from Ono alliances: | ||||||||||||
Net product sales | $ | 113 | $ | 113 | $ | 41 | ||||||
Alliance revenues | 61 | 28 | 4 | |||||||||
Total Revenues | $ | 174 | $ | 141 | $ | 45 | ||||||
Payments to/(from) Ono: | ||||||||||||
Cost of products sold: | ||||||||||||
Co-Promotion Fee | $ | 20 | $ | 20 | $ | 11 | ||||||
Profit sharing | 2 | — | — | |||||||||
Cost reimbursements from Ono | (9 | ) | (15 | ) | (12 | ) |
Year Ended December 31, | ||||||||||||
Dollars in Millions | 2015 | 2014 | 2013 | |||||||||
Revenues from Reckitt alliance: | ||||||||||||
Alliance revenues | $ | 140 | $ | 170 | $ | 116 | ||||||
Selected Alliance Cash Flow Information: | ||||||||||||
Deferred income | $ | — | $ | — | $ | 376 | ||||||
Other changes in operating assets and liabilities | (129 | ) | 20 | 109 |
Selected Alliance Balance Sheet information: | December 31, | |||||||
Dollars in Millions | 2015 | 2014 | ||||||
Deferred income | $ | 36 | $ | 155 |
Year Ended December 31, | ||||||||||||
Dollars in Millions | 2015 | 2014 | 2013 | |||||||||
Revenues from The Medicines Company alliance: | ||||||||||||
Alliance revenues | $ | 8 | $ | 66 | $ | 74 | ||||||
Other (income)/expense – Gain on sale of business | (59 | ) | — | — | ||||||||
Selected Alliance Cash Flow Information: | ||||||||||||
Deferred income | $ | — | $ | — | $ | 80 | ||||||
Other changes in operating assets and liabilities | — | — | 35 | |||||||||
Divestiture and other proceeds | 132 | — | — |
Selected Alliance Balance Sheet information: | December 31, | |||||||
Dollars in Millions | 2015 | 2014 | ||||||
Deferred income | $ | — | $ | 3 |
Year Ended December 31, | ||||||||||||
Dollars in Millions | 2015 | 2014 | 2013 | |||||||||
Revenues from Valeant alliance: | ||||||||||||
Net product sales | $ | — | $ | — | $ | 4 | ||||||
Alliance revenues | (1 | ) | 44 | 49 | ||||||||
Total Revenues | $ | (1 | ) | $ | 44 | $ | 53 | |||||
Other (income)/expense – Gain on sale of business | (88 | ) | — | — | ||||||||
Selected Alliance Cash Flow Information: | ||||||||||||
Other changes in operating assets and liabilities | $ | — | $ | 16 | $ | — | ||||||
Divestiture and other proceeds | 61 | — | — |
Year Ended December 31, | ||||||||||||
Dollars in Millions | 2015 | 2014 | 2013 | |||||||||
Interest expense | $ | 184 | $ | 203 | $ | 199 | ||||||
Investment income | (101 | ) | (101 | ) | (104 | ) | ||||||
Provision for restructuring | 118 | 163 | 226 | |||||||||
Litigation and other settlements | 159 | 23 | 20 | |||||||||
Equity in net income of affiliates | (83 | ) | (107 | ) | (166 | ) | ||||||
Out-licensed intangible asset impairment | 13 | 29 | — | |||||||||
Gain on sale of businesses, product lines and assets | (196 | ) | (564 | ) | (2 | ) | ||||||
Other alliance and licensing income | (628 | ) | (404 | ) | (148 | ) | ||||||
Pension charges | 160 | 877 | 165 | |||||||||
Loss on debt redemption | 180 | 45 | — | |||||||||
Other | 7 | 46 | 15 | |||||||||
Other (income)/expense | $ | (187 | ) | $ | 210 | $ | 205 |
• | Litigation and other settlements includes $90 million for a contractual dispute related to a license. |
• | Other includes an unrealized foreign exchange loss of $52 million resulting from the remeasurement of the Bolivar-denominated cash and other monetary balances of BMS’s wholly-owned subsidiary in Venezuela as of December 31, 2015. The exchange rate was changed to the SIMADI rate of 200 from the official CENCOEX rate of 6.3 after considering the limited amount of foreign currency exchanged during the second half of 2015, published exchange rates and the continuing deterioration of economic conditions in Venezuela. |
Year Ended December 31, | ||||||||||||
Dollars in Millions | 2015 | 2014 | 2013 | |||||||||
Employee termination benefits | $ | 110 | $ | 157 | $ | 211 | ||||||
Other exit costs | 8 | 6 | 15 | |||||||||
Provision for restructuring | $ | 118 | $ | 163 | $ | 226 |
Year Ended December 31, | ||||||||||||
Dollars in Millions | 2015 | 2014 | 2013 | |||||||||
Liability at January 1 | $ | 156 | $ | 102 | $ | 167 | ||||||
Charges | 133 | 155 | 249 | |||||||||
Change in estimates | (15 | ) | 8 | (23 | ) | |||||||
Provision for restructuring | 118 | 163 | 226 | |||||||||
Foreign currency translation | (15 | ) | (2 | ) | 4 | |||||||
Liabilities related to assets held-for-sale | — | — | (67 | ) | ||||||||
Spending | (134 | ) | (107 | ) | (228 | ) | ||||||
Liability at December 31 | $ | 125 | $ | 156 | $ | 102 |
Year Ended December 31, | ||||||||||||
Dollars in Millions | 2015 | 2014 | 2013 | |||||||||
Current: | ||||||||||||
U.S. | $ | 337 | $ | 334 | $ | 375 | ||||||
Non-U.S. | 456 | 560 | 427 | |||||||||
Total Current | 793 | 894 | 802 | |||||||||
Deferred: | ||||||||||||
U.S. | (394 | ) | (403 | ) | (390 | ) | ||||||
Non-U.S. | 47 | (139 | ) | (101 | ) | |||||||
Total Deferred | (347 | ) | (542 | ) | (491 | ) | ||||||
Total Provision | $ | 446 | $ | 352 | $ | 311 |
% of Earnings Before Income Taxes | ||||||||||||||||||||
Dollars in Millions | 2015 | 2014 | 2013 | |||||||||||||||||
Earnings/(Loss) before income taxes: | ||||||||||||||||||||
U.S. | $ | (1,329 | ) | $ | (349 | ) | $ | (135 | ) | |||||||||||
Non-U.S. | 3,406 | 2,730 | 3,026 | |||||||||||||||||
Total | $ | 2,077 | $ | 2,381 | $ | 2,891 | ||||||||||||||
U.S. statutory rate | 727 | 35.0 | % | 833 | 35.0 | % | 1,012 | 35.0 | % | |||||||||||
Foreign tax effect of certain operations in Ireland, Puerto Rico and Switzerland | (535 | ) | (25.8 | )% | (509 | ) | (21.4 | )% | (620 | ) | (21.4 | )% | ||||||||
U.S. tax effect of capital losses | — | — | (361 | ) | (15.2 | )% | — | — | ||||||||||||
Valuation allowance release | (84 | ) | (4.0 | )% | — | — | (10 | ) | (0.3 | )% | ||||||||||
U.S. Federal, state and foreign contingent tax matters | 56 | 2.7 | % | 228 | 9.6 | % | 134 | 4.6 | % | |||||||||||
U.S. Federal research based credits | (132 | ) | (6.4 | )% | (131 | ) | (5.4 | )% | (220 | ) | (7.6 | )% | ||||||||
Goodwill allocated to divestitures | 25 | 1.2 | % | 210 | 8.8 | % | — | — | ||||||||||||
U.S. Branded Prescription Drug Fee | 44 | 2.1 | % | 84 | 3.5 | % | 63 | 2.2 | % | |||||||||||
R&D charges | 369 | 17.8 | % | 52 | 2.2 | % | — | — | ||||||||||||
State and local taxes (net of valuation allowance) | 16 | 0.8 | % | 20 | 0.8 | % | 25 | 0.9 | % | |||||||||||
Foreign and other | (40 | ) | (1.9 | )% | (74 | ) | (3.1 | )% | (73 | ) | (2.6 | )% | ||||||||
$ | 446 | 21.5 | % | $ | 352 | 14.8 | % | $ | 311 | 10.8 | % |
December 31, | ||||||||
Dollars in Millions | 2015 | 2014 | ||||||
Deferred tax assets | ||||||||
Foreign net operating loss carryforwards | $ | 3,090 | $ | 3,473 | ||||
U.S. capital loss carryforwards | 39 | 562 | ||||||
State net operating loss and credit carryforwards | 324 | 337 | ||||||
U.S. Federal net operating loss and credit carryforwards | 173 | 161 | ||||||
Deferred income | 1,009 | 1,163 | ||||||
Milestone payments and license fees | 560 | 440 | ||||||
Pension and postretirement benefits | 462 | 467 | ||||||
Intercompany profit and other inventory items | 607 | 531 | ||||||
Other foreign deferred tax assets | 172 | 202 | ||||||
Share-based compensation | 122 | 95 | ||||||
Legal and other settlements | 63 | 14 | ||||||
Repatriation of foreign earnings | (1 | ) | 94 | |||||
Internal transfer of intellectual property | 635 | 247 | ||||||
Other | 337 | 311 | ||||||
Total deferred tax assets | 7,592 | 8,097 | ||||||
Valuation allowance | (3,534 | ) | (4,259 | ) | ||||
Deferred tax assets net of valuation allowance | 4,058 | 3,838 | ||||||
Deferred tax liabilities | ||||||||
Depreciation | (105 | ) | (128 | ) | ||||
Acquired intangible assets | (338 | ) | (390 | ) | ||||
Goodwill and other | (802 | ) | (832 | ) | ||||
Total deferred tax liabilities | (1,245 | ) | (1,350 | ) | ||||
Deferred tax assets, net | $ | 2,813 | $ | 2,488 | ||||
Recognized as: | ||||||||
Deferred income taxes – current | $ | — | $ | 1,644 | ||||
Deferred income taxes – non-current | 2,844 | 915 | ||||||
Income taxes payable – current | — | (11 | ) | |||||
Income taxes payable – non-current | (31 | ) | (60 | ) | ||||
Total | $ | 2,813 | $ | 2,488 |
Year Ended December 31, | ||||||||||||
Dollars in Millions | 2015 | 2014 | 2013 | |||||||||
Balance at beginning of year | $ | 4,259 | $ | 4,623 | $ | 4,404 | ||||||
Provision | 71 | 140 | 252 | |||||||||
Utilization | (436 | ) | (109 | ) | (68 | ) | ||||||
Foreign currency translation | (366 | ) | (395 | ) | 40 | |||||||
Acquisitions | 6 | — | (5 | ) | ||||||||
Balance at end of year | $ | 3,534 | $ | 4,259 | $ | 4,623 |
Year Ended December 31, | ||||||||||||
Dollars in Millions | 2015 | 2014 | 2013 | |||||||||
Balance at beginning of year | $ | 934 | $ | 756 | $ | 642 | ||||||
Gross additions to tax positions related to current year | 52 | 106 | 74 | |||||||||
Gross additions to tax positions related to prior years | 56 | 218 | 108 | |||||||||
Gross additions to tax positions assumed in acquisitions | 1 | — | — | |||||||||
Gross reductions to tax positions related to prior years | (34 | ) | (57 | ) | (87 | ) | ||||||
Settlements | (46 | ) | (65 | ) | 26 | |||||||
Reductions to tax positions related to lapse of statute | (9 | ) | (12 | ) | (8 | ) | ||||||
Cumulative translation adjustment | (10 | ) | (12 | ) | 1 | |||||||
Balance at end of year | $ | 944 | $ | 934 | $ | 756 |
Year Ended December 31, | ||||||||||||
Dollars in Millions | 2015 | 2014 | 2013 | |||||||||
Unrecognized tax benefits that if recognized would impact the effective tax rate | $ | 671 | $ | 668 | $ | 508 | ||||||
Accrued interest | 93 | 96 | 83 | |||||||||
Accrued penalties | 16 | 17 | 34 | |||||||||
Interest expense | 2 | 27 | 24 | |||||||||
Penalty expense/(benefit) | 1 | (7 | ) | 3 |
U.S. | 2008 to 2015 | |
Canada | 2006 to 2015 | |
France | 2013 to 2015 | |
Germany | 2007 to 2015 | |
Italy | 2003 to 2015 | |
Mexico | 2010 to 2015 |
Year Ended December 31, | ||||||||||||
Amounts in Millions, Except Per Share Data | 2015 | 2014 | 2013 | |||||||||
Net Earnings Attributable to BMS used for Basic and Diluted EPS Calculation | $ | 1,565 | $ | 2,004 | $ | 2,563 | ||||||
Weighted-average common shares outstanding - basic | 1,667 | 1,657 | 1,644 | |||||||||
Contingently convertible debt common stock equivalents | — | 1 | 1 | |||||||||
Incremental shares attributable to share-based compensation plans | 12 | 12 | 17 | |||||||||
Weighted-average common shares outstanding - diluted | 1,679 | 1,670 | 1,662 | |||||||||
Earnings per share - basic | $ | 0.94 | $ | 1.21 | $ | 1.56 | ||||||
Earnings per share - diluted | $ | 0.93 | $ | 1.20 | $ | 1.54 |
December 31, 2015 | December 31, 2014 | |||||||||||||||||||||||||||||||
Dollars in Millions | Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||
Cash and cash equivalents - Money market and other securities | $ | — | $ | 1,825 | $ | — | $ | 1,825 | $ | — | $ | 5,051 | $ | — | $ | 5,051 | ||||||||||||||||
Marketable securities: | ||||||||||||||||||||||||||||||||
Certificates of deposit | — | 804 | — | 804 | — | 896 | — | 896 | ||||||||||||||||||||||||
Corporate debt securities | — | 5,638 | — | 5,638 | — | 5,259 | — | 5,259 | ||||||||||||||||||||||||
Equity funds | — | 92 | — | 92 | — | 94 | — | 94 | ||||||||||||||||||||||||
Fixed income funds | — | 11 | — | 11 | — | 11 | — | 11 | ||||||||||||||||||||||||
Auction Rate Securities (ARS) | — | — | — | — | — | — | 12 | 12 | ||||||||||||||||||||||||
Derivative assets: | ||||||||||||||||||||||||||||||||
Interest rate swap contracts | — | 31 | — | 31 | — | 46 | — | 46 | ||||||||||||||||||||||||
Forward starting interest rate swap contracts | — | 15 | — | 15 | — | — | — | — | ||||||||||||||||||||||||
Foreign currency forward contracts | — | 50 | — | 50 | — | 118 | — | 118 | ||||||||||||||||||||||||
Equity investments | 60 | — | — | 60 | 36 | — | — | 36 | ||||||||||||||||||||||||
Derivative liabilities: | ||||||||||||||||||||||||||||||||
Interest rate swap contracts | — | (1 | ) | — | (1 | ) | — | (3 | ) | — | (3 | ) | ||||||||||||||||||||
Forward starting interest rate swap contracts | — | (7 | ) | — | (7 | ) | — | — | — | — | ||||||||||||||||||||||
Foreign currency forward contracts | — | (10 | ) | — | (10 | ) | — | — | — | — | ||||||||||||||||||||||
Written option liabilities | — | — | — | — | — | — | (198 | ) | (198 | ) | ||||||||||||||||||||||
Contingent consideration liability | — | — | — | — | — | — | (8 | ) | (8 | ) |
2015 | 2014 | ||||||||||||||||||||||
Dollars in Millions | ARS | Written option liabilities | Contingent consideration liability | ARS | Written option liabilities | Contingent consideration liability | |||||||||||||||||
Fair value at January 1 | $ | 12 | $ | (198 | ) | $ | (8 | ) | $ | 12 | $ | (162 | ) | $ | (8 | ) | |||||||
Realized losses | (2 | ) | — | — | — | — | — | ||||||||||||||||
Sales | (7 | ) | — | — | — | — | — | ||||||||||||||||
Settlements and other | — | 75 | — | — | — | — | |||||||||||||||||
Changes in fair value | (3 | ) | 123 | 8 | — | (36 | ) | — | |||||||||||||||
Fair value at December 31 | $ | — | $ | — | $ | — | $ | 12 | $ | (198 | ) | $ | (8 | ) |
Dollars in Millions | Amortized Cost | Gross Unrealized Gain in Accumulated OCI | Gross Unrealized Loss in Accumulated OCI | Fair Value | |||||||||||||
December 31, 2015 | |||||||||||||||||
Certificates of deposit | $ | 804 | $ | — | $ | — | $ | 804 | |||||||||
Corporate debt securities | 5,646 | 15 | (23 | ) | 5,638 | ||||||||||||
Equity investments | 74 | 10 | (24 | ) | 60 | ||||||||||||
Total | $ | 6,524 | $ | 25 | $ | (47 | ) | $ | 6,502 | ||||||||
December 31, 2014 | |||||||||||||||||
Certificates of deposit | $ | 896 | $ | — | $ | — | $ | 896 | |||||||||
Corporate debt securities | 5,237 | 30 | (8 | ) | 5,259 | ||||||||||||
ARS | 9 | 3 | — | 12 | |||||||||||||
Equity investments | 14 | 22 | — | 36 | |||||||||||||
Total | $ | 6,156 | $ | 55 | $ | (8 | ) | $ | 6,203 |
December 31, 2015 | December 31, 2014 | |||||||||||||||||
Dollars in Millions | Balance Sheet Location | Notional | Fair Value | Notional | Fair Value | |||||||||||||
Derivatives designated as hedging instruments: | ||||||||||||||||||
Interest rate swap contracts | Other assets | $ | 1,100 | $ | 31 | $ | 847 | $ | 46 | |||||||||
Interest rate swap contracts | Other liabilities | 650 | (1 | ) | 1,050 | (3 | ) | |||||||||||
Forward starting interest rate swap contracts | Other assets | 500 | 15 | — | — | |||||||||||||
Forward starting interest rate swap contracts | Other liabilities | 250 | (7 | ) | — | — | ||||||||||||
Foreign currency forward contracts | Prepaid expenses and other | 1,016 | 50 | 1,323 | 106 | |||||||||||||
Foreign currency forward contracts | Other assets | — | — | 100 | 12 | |||||||||||||
Foreign currency forward contracts | Accrued expenses | 787 | (10 | ) | — | — |
December 31, | ||||||||
Dollars in Millions | 2015 | 2014 | ||||||
Principal Value: | ||||||||
4.375% Euro Notes due 2016 | $ | — | $ | 611 | ||||
0.875% Notes due 2017 | 750 | 750 | ||||||
1.750% Notes due 2019 | 500 | 500 | ||||||
4.625% Euro Notes due 2021 | — | 611 | ||||||
2.000% Notes due 2022 | 750 | 750 | ||||||
7.150% Debentures due 2023 | 302 | 304 | ||||||
3.250% Notes due 2023 | 500 | 500 | ||||||
1.000% Euro Notes due 2025 | 630 | — | ||||||
6.800% Debentures due 2026 | 256 | 330 | ||||||
1.750% Euro Notes due 2035 | 630 | — | ||||||
5.875% Notes due 2036 | 404 | 625 | ||||||
6.125% Notes due 2038 | 278 | 480 | ||||||
3.250% Notes due 2042 | 500 | 500 | ||||||
4.500% Notes due 2044 | 500 | 500 | ||||||
6.880% Debentures due 2097 | 260 | 260 | ||||||
0% - 5.75% Other - maturing 2017 - 2030 | 79 | 83 | ||||||
Subtotal | 6,339 | 6,804 | ||||||
Adjustments to Principal Value: | ||||||||
Fair value of interest rate swap contracts | 30 | 43 | ||||||
Unamortized basis adjustment from swap terminations | 272 | 454 | ||||||
Unamortized bond discounts and issuance costs(a) | (91 | ) | (59 | ) | ||||
Total | $ | 6,550 | $ | 7,242 |
(a) | Excludes unamortized bond issuance costs of $34 million that were not reclassified at December 31, 2014. |
2015 | 2013 | ||||||||||
Amounts in Millions | Euro | U.S. dollars | U.S. dollars | ||||||||
Principal Value: | |||||||||||
1.750% Notes due 2019 | € | — | $ | — | $ | 500 | |||||
3.250% Notes due 2023 | — | — | 500 | ||||||||
1.000% Euro Notes due 2025 | 575 | 643 | — | ||||||||
1.750% Euro Notes due 2035 | 575 | 643 | — | ||||||||
4.500% Notes due 2044 | — | — | 500 | ||||||||
Total | € | 1,150 | $ | 1,286 | $ | 1,500 | |||||
Proceeds net of discount and deferred loan issuance costs | € | 1,133 | $ | 1,268 | $ | 1,477 | |||||
Forward starting interest rate swap contracts terminated: | |||||||||||
Notional amount | € | 500 | $ | 559 | $ | 305 | |||||
Unrealized gain/(loss) | (16 | ) | (18 | ) | 20 |
Dollars in Millions | 2015 | 2014 | ||||||
Principal amount | $ | 1,624 | $ | 582 | ||||
Carrying value | 1,795 | 633 | ||||||
Debt redemption price | 1,957 | 676 | ||||||
Notional amount of interest rate swap contracts terminated | 735 | 500 | ||||||
Interest rate swap termination payments | 11 | 4 | ||||||
Loss on debt redemption(a) | 180 | 45 |
(a) | Including acceleration of debt issuance costs, loss on interest rate lock contract and other related fees. |
December 31, | ||||||||
Dollars in Millions | 2015 | 2014 | ||||||
Trade receivables | $ | 3,070 | $ | 2,193 | ||||
Less allowances | (122 | ) | (93 | ) | ||||
Net trade receivables | 2,948 | 2,100 | ||||||
Alliance partners receivables | 958 | 888 | ||||||
Prepaid and refundable income taxes | 182 | 178 | ||||||
Miscellaneous receivables | 211 | 224 | ||||||
Receivables | $ | 4,299 | $ | 3,390 |
Year Ended December 31, | ||||||||||||
Dollars in Millions | 2015 | 2014 | 2013 | |||||||||
Balance at beginning of year | $ | 93 | $ | 89 | $ | 104 | ||||||
Provision | 1,059 | 773 | 720 | |||||||||
Utilization | (1,030 | ) | (769 | ) | (731 | ) | ||||||
Assets held-for-sale | — | — | (4 | ) | ||||||||
Balance at end of year | $ | 122 | $ | 93 | $ | 89 |
December 31, | ||||||||
Dollars in Millions | 2015 | 2014 | ||||||
Finished goods | $ | 381 | $ | 500 | ||||
Work in process | 646 | 856 | ||||||
Raw and packaging materials | 194 | 204 | ||||||
Inventories | $ | 1,221 | $ | 1,560 |
December 31, | ||||||||
Dollars in Millions | 2015 | 2014 | ||||||
Land | $ | 107 | $ | 109 | ||||
Buildings | 4,515 | 4,830 | ||||||
Machinery, equipment and fixtures | 3,347 | 3,774 | ||||||
Construction in progress | 662 | 353 | ||||||
Gross property, plant and equipment | 8,631 | 9,066 | ||||||
Less accumulated depreciation | (4,219 | ) | (4,649 | ) | ||||
Property, plant and equipment | $ | 4,412 | $ | 4,417 |
December 31, | ||||||||||
Dollars in Millions | Estimated Useful Lives | 2015 | 2014 | |||||||
Goodwill | $ | 6,881 | $ | 7,027 | ||||||
Other intangible assets: | ||||||||||
Licenses | 5 – 15 years | $ | 574 | $ | 1,090 | |||||
Developed technology rights | 9 – 15 years | 2,357 | 2,358 | |||||||
Capitalized software | 3 – 10 years | 1,302 | 1,254 | |||||||
In-process research and development (IPRD) | 120 | 280 | ||||||||
Gross other intangible assets | 4,353 | 4,982 | ||||||||
Less accumulated amortization | (2,934 | ) | (3,229 | ) | ||||||
Total other intangible assets | $ | 1,419 | $ | 1,753 |
December 31, | ||||||||
Dollars in Millions | 2015 | 2014 | ||||||
Employee compensation and benefits | $ | 904 | $ | 892 | ||||
Royalties | 161 | 213 | ||||||
Accrued research and development | 553 | 445 | ||||||
Restructuring - current | 89 | 128 | ||||||
Pension and postretirement benefits | 47 | 47 | ||||||
Litigation and other settlements | 189 | 43 | ||||||
Other | 816 | 691 | ||||||
Total accrued expenses | $ | 2,759 | $ | 2,459 |
December 31, | ||||||||
Dollars in Millions | 2015 | 2014 | ||||||
Charge-backs related to government programs | $ | 75 | $ | 41 | ||||
Cash discounts | 22 | 15 | ||||||
Reductions to trade receivables | $ | 97 | $ | 56 | ||||
Medicaid and Medicare rebates | $ | 434 | $ | 267 | ||||
Sales returns | 181 | 232 | ||||||
Other rebates, discounts and adjustments | 709 | 352 | ||||||
Accrued rebates and returns | $ | 1,324 | $ | 851 |
December 31, | ||||||||
Dollars in Millions | 2015 | 2014 | ||||||
Alliances (Note 3) | $ | 1,459 | $ | 1,493 | ||||
Other | 130 | 444 | ||||||
Total deferred income | $ | 1,589 | $ | 1,937 | ||||
Current portion | $ | 1,003 | $ | 1,167 | ||||
Non-current portion | 586 | 770 |
Common Stock | Capital in Excess of Par Value of Stock | Retained Earnings | Treasury Stock | Noncontrolling Interest | ||||||||||||||||||||||
Dollars and Shares in Millions | Shares | Par Value | Shares | Cost | ||||||||||||||||||||||
Balance at January 1, 2013 | 2,208 | $ | 221 | $ | 2,694 | $ | 32,733 | 570 | $ | (18,823 | ) | $ | 15 | |||||||||||||
Net earnings | — | — | — | 2,563 | — | — | 38 | |||||||||||||||||||
Cash dividends declared | — | — | — | (2,344 | ) | — | — | — | ||||||||||||||||||
Stock repurchase program | — | — | — | — | 11 | (413 | ) | — | ||||||||||||||||||
Employee stock compensation plans | — | — | (772 | ) | — | (22 | ) | 1,436 | — | |||||||||||||||||
Distributions | — | — | — | — | — | — | 29 | |||||||||||||||||||
Balance at December 31, 2013 | 2,208 | 221 | 1,922 | 32,952 | 559 | (17,800 | ) | 82 | ||||||||||||||||||
Net earnings | — | — | — | 2,004 | — | — | 39 | |||||||||||||||||||
Cash dividends declared | — | — | — | (2,415 | ) | — | — | — | ||||||||||||||||||
Employee stock compensation plans | — | — | (393 | ) | — | (11 | ) | 755 | — | |||||||||||||||||
Debt conversion | — | — | (22 | ) | — | (1 | ) | 53 | — | |||||||||||||||||
Variable interest entity | — | — | — | — | — | — | 59 | |||||||||||||||||||
Distributions | — | — | — | — | — | — | (49 | ) | ||||||||||||||||||
Balance at December 31, 2014 | 2,208 | 221 | 1,507 | 32,541 | 547 | (16,992 | ) | 131 | ||||||||||||||||||
Net earnings | — | — | — | 1,565 | — | — | 84 | |||||||||||||||||||
Cash dividends declared | — | — | — | (2,493 | ) | — | — | — | ||||||||||||||||||
Employee stock compensation plans | — | — | (48 | ) | — | (8 | ) | 431 | — | |||||||||||||||||
Debt conversion | — | — | — | — | — | 2 | — | |||||||||||||||||||
Distributions | — | — | — | — | — | — | (57 | ) | ||||||||||||||||||
Balance at December 31, 2015 | 2,208 | $ | 221 | $ | 1,459 | $ | 31,613 | 539 | $ | (16,559 | ) | $ | 158 |
Dollars in Millions | Pretax | Tax | After Tax | |||||||||
2013 | ||||||||||||
Derivatives qualifying as cash flow hedges:(a) | ||||||||||||
Unrealized gains | $ | 58 | $ | (17 | ) | $ | 41 | |||||
Reclassified to net earnings | (56 | ) | 22 | (34 | ) | |||||||
Derivatives qualifying as cash flow hedges | 2 | 5 | 7 | |||||||||
Pension and other postretirement benefits: | ||||||||||||
Actuarial gains | 1,475 | (504 | ) | 971 | ||||||||
Amortization(b) | 129 | (43 | ) | 86 | ||||||||
Settlements(c) | 165 | (56 | ) | 109 | ||||||||
Pension and other postretirement benefits | 1,769 | (603 | ) | 1,166 | ||||||||
Available-for-sale securities: | ||||||||||||
Unrealized losses | (35 | ) | 3 | (32 | ) | |||||||
Realized gains(c) | (8 | ) | 3 | (5 | ) | |||||||
Available-for-sale securities | (43 | ) | 6 | (37 | ) | |||||||
Foreign currency translation | (75 | ) | — | (75 | ) | |||||||
$ | 1,653 | $ | (592 | ) | $ | 1,061 | ||||||
2014 | ||||||||||||
Derivatives qualifying as cash flow hedges:(a) | ||||||||||||
Unrealized gains | $ | 139 | $ | (45 | ) | $ | 94 | |||||
Reclassified to net earnings | (41 | ) | 16 | (25 | ) | |||||||
Derivatives qualifying as cash flow hedges | 98 | (29 | ) | 69 | ||||||||
Pension and other postretirement benefits: | ||||||||||||
Actuarial losses | (1,414 | ) | 464 | (950 | ) | |||||||
Amortization(b) | 104 | (37 | ) | 67 | ||||||||
Settlements and curtailments(c) | 867 | (308 | ) | 559 | ||||||||
Pension and other postretirement benefits | (443 | ) | 119 | (324 | ) | |||||||
Available-for-sale securities: | ||||||||||||
Unrealized gains | 10 | (6 | ) | 4 | ||||||||
Realized gains(c) | (1 | ) | — | (1 | ) | |||||||
Available-for-sale securities | 9 | (6 | ) | 3 | ||||||||
Foreign currency translation | (8 | ) | (24 | ) | (32 | ) | ||||||
$ | (344 | ) | $ | 60 | $ | (284 | ) | |||||
2015 | ||||||||||||
Derivatives qualifying as cash flow hedges:(a) | ||||||||||||
Unrealized gains | $ | 59 | $ | (22 | ) | $ | 37 | |||||
Reclassified to net earnings | (130 | ) | 42 | (88 | ) | |||||||
Derivatives qualifying as cash flow hedges | (71 | ) | 20 | (51 | ) | |||||||
Pension and other postretirement benefits: | ||||||||||||
Actuarial losses | (88 | ) | 27 | (61 | ) | |||||||
Amortization(b) | 85 | (28 | ) | 57 | ||||||||
Settlements and curtailments(c) | 160 | (55 | ) | 105 | ||||||||
Pension and other postretirement benefits | 157 | (56 | ) | 101 | ||||||||
Available-for-sale securities: | ||||||||||||
Unrealized losses | (71 | ) | 14 | (57 | ) | |||||||
Realized losses | 3 | — | 3 | |||||||||
Available-for-sale securities | (68 | ) | 14 | (54 | ) | |||||||
Foreign currency translation | (17 | ) | (22 | ) | (39 | ) | ||||||
$ | 1 | $ | (44 | ) | $ | (43 | ) |
(a) | Included in cost of products sold. |
(b) | Included in cost of products sold, research and development, and marketing, selling and administrative expenses. |
(c) | Included in other (income)/expense. |
December 31, | ||||||||
Dollars in Millions | 2015 | 2014 | ||||||
Derivatives qualifying as cash flow hedges | $ | 34 | $ | 85 | ||||
Pension and other postretirement benefits | (2,080 | ) | (2,181 | ) | ||||
Available-for-sale securities | (23 | ) | 31 | |||||
Foreign currency translation | (399 | ) | (360 | ) | ||||
Accumulated other comprehensive loss | $ | (2,468 | ) | $ | (2,425 | ) |
Pension Benefits | Other Benefits | |||||||||||||||||||||||
Dollars in Millions | 2015 | 2014 | 2013 | 2015 | 2014 | 2013 | ||||||||||||||||||
Service cost — benefits earned during the year | $ | 25 | $ | 34 | $ | 38 | $ | 4 | $ | 4 | $ | 8 | ||||||||||||
Interest cost on projected benefit obligation | 242 | 305 | 302 | 13 | 14 | 13 | ||||||||||||||||||
Expected return on plan assets | (405 | ) | (508 | ) | (519 | ) | (27 | ) | (27 | ) | (26 | ) | ||||||||||||
Amortization of prior service credits | (3 | ) | (3 | ) | (4 | ) | (6 | ) | (1 | ) | (2 | ) | ||||||||||||
Amortization of net actuarial (gain)/loss | 91 | 110 | 134 | 3 | (2 | ) | 1 | |||||||||||||||||
Curtailments | (1 | ) | 1 | — | — | (4 | ) | — | ||||||||||||||||
Settlements | 161 | 866 | 165 | — | — | — | ||||||||||||||||||
Special termination benefits | — | 14 | — | — | — | — | ||||||||||||||||||
Net periodic benefit cost/(credit) | $ | 110 | $ | 819 | $ | 116 | $ | (13 | ) | $ | (16 | ) | $ | (6 | ) |
Pension Benefits | Other Benefits | |||||||||||||||
Dollars in Millions | 2015 | 2014 | 2015 | 2014 | ||||||||||||
Benefit obligations at beginning of year | $ | 7,068 | $ | 7,233 | $ | 402 | $ | 404 | ||||||||
Service cost—benefits earned during the year | 25 | 34 | 4 | 4 | ||||||||||||
Interest cost | 242 | 305 | 13 | 14 | ||||||||||||
Plan participants’ contributions | 2 | 2 | 24 | 22 | ||||||||||||
Curtailments | — | (27 | ) | — | (3 | ) | ||||||||||
Settlements | (336 | ) | (1,774 | ) | — | — | ||||||||||
Plan amendments | (3 | ) | (2 | ) | — | (7 | ) | |||||||||
Actuarial (gains)/losses | (321 | ) | 1,673 | (26 | ) | 28 | ||||||||||
Retiree Drug Subsidy | — | — | 5 | 6 | ||||||||||||
Benefits paid | (105 | ) | (216 | ) | (62 | ) | (62 | ) | ||||||||
Exchange rate gains | (154 | ) | (160 | ) | (5 | ) | (4 | ) | ||||||||
Benefit obligations at end of year | $ | 6,418 | $ | 7,068 | $ | 355 | $ | 402 | ||||||||
Fair value of plan assets at beginning of year | $ | 6,148 | $ | 7,406 | $ | 357 | $ | 347 | ||||||||
Actual return on plan assets | (5 | ) | 750 | (4 | ) | 36 | ||||||||||
Employer contributions | 118 | 124 | 8 | 8 | ||||||||||||
Plan participants’ contributions | 2 | 2 | 24 | 22 | ||||||||||||
Settlements | (336 | ) | (1,774 | ) | — | — | ||||||||||
Retiree Drug Subsidy | — | — | 5 | 6 | ||||||||||||
Benefits paid | (105 | ) | (216 | ) | (62 | ) | (62 | ) | ||||||||
Exchange rate losses | (135 | ) | (144 | ) | — | — | ||||||||||
Fair value of plan assets at end of year | $ | 5,687 | $ | 6,148 | $ | 328 | $ | 357 | ||||||||
Funded status | $ | (731 | ) | $ | (920 | ) | $ | (27 | ) | $ | (45 | ) | ||||
Assets/(Liabilities) recognized: | ||||||||||||||||
Other assets | $ | 71 | $ | 40 | $ | 96 | $ | 91 | ||||||||
Accrued expenses | (37 | ) | (36 | ) | (10 | ) | (11 | ) | ||||||||
Pension and other postretirement liabilities | (765 | ) | (924 | ) | (113 | ) | (125 | ) | ||||||||
Funded status | $ | (731 | ) | $ | (920 | ) | $ | (27 | ) | $ | (45 | ) | ||||
Recognized in accumulated other comprehensive loss: | ||||||||||||||||
Net actuarial (gains)/losses | $ | 3,140 | $ | 3,304 | $ | (22 | ) | $ | (24 | ) | ||||||
Prior service credit | (39 | ) | (40 | ) | (4 | ) | (9 | ) | ||||||||
Total | $ | 3,101 | $ | 3,264 | $ | (26 | ) | $ | (33 | ) |
Dollars in Millions | 2015 | 2014 | ||||||
Pension plans with projected benefit obligations in excess of plan assets: | ||||||||
Projected benefit obligation | $ | 5,310 | $ | 5,877 | ||||
Fair value of plan assets | 4,508 | 4,917 | ||||||
Pension plans with accumulated benefit obligations in excess of plan assets: | ||||||||
Accumulated benefit obligation | $ | 5,156 | $ | 5,731 | ||||
Fair value of plan assets | 4,386 | 4,823 |
Pension Benefits | Other Benefits | |||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||
Discount rate | 3.8 | % | 3.6 | % | 3.6 | % | 3.4 | % | ||||
Rate of compensation increase | 0.5 | % | 0.8 | % | 2.0 | % | 2.0 | % |
Pension Benefits | Other Benefits | |||||||||||||||||
2015 | 2014 | 2013 | 2015 | 2014 | 2013 | |||||||||||||
Discount rate | 3.6 | % | 4.2 | % | 4.1 | % | 3.4 | % | 3.7 | % | 3.0 | % | ||||||
Expected long-term return on plan assets | 7.2 | % | 7.6 | % | 8.0 | % | 7.8 | % | 8.3 | % | 8.8 | % | ||||||
Rate of compensation increase | 0.8 | % | 2.3 | % | 2.3 | % | 2.0 | % | 2.1 | % | 2.1 | % |
2015 | 2014 | 2013 | |||||||
10 years | 6.7 | % | 7.9 | % | 8.0 | % | |||
15 years | 6.0 | % | 6.4 | % | 6.8 | % | |||
20 years | 8.1 | % | 9.3 | % | 8.8 | % |
2015 | 2014 | 2013 | |||||||
Healthcare cost trend rate assumed for next year | 5.5 | % | 6.0 | % | 6.4 | % | |||
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate) | 4.5 | % | 4.5 | % | 4.5 | % | |||
Year that the rate reaches the ultimate trend rate | 2018 | 2018 | 2019 |
December 31, 2015 | December 31, 2014 | |||||||||||||||||||||||||||||||
Dollars in Millions | Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||
Equity Securities | $ | 785 | $ | — | $ | — | $ | 785 | $ | 1,115 | $ | — | $ | — | $ | 1,115 | ||||||||||||||||
Equity Funds | 521 | 1,174 | — | 1,695 | 446 | 1,113 | — | 1,559 | ||||||||||||||||||||||||
Fixed Income Funds | 249 | 724 | — | 973 | 340 | 777 | — | 1,117 | ||||||||||||||||||||||||
Corporate Debt Securities | — | 1,382 | — | 1,382 | — | 1,481 | — | 1,481 | ||||||||||||||||||||||||
Venture Capital and Limited Partnerships | — | — | 249 | 249 | — | — | 327 | 327 | ||||||||||||||||||||||||
U.S. Treasury and Agency Securities | — | 517 | — | 517 | — | 557 | — | 557 | ||||||||||||||||||||||||
Short-Term Investment Funds | — | 103 | — | 103 | — | 63 | — | 63 | ||||||||||||||||||||||||
Insurance Contracts | — | — | 115 | 115 | — | — | 119 | 119 | ||||||||||||||||||||||||
Event Driven Hedge Funds | — | 72 | — | 72 | — | 71 | — | 71 | ||||||||||||||||||||||||
Cash and Cash Equivalents | 106 | — | — | 106 | 76 | — | — | 76 | ||||||||||||||||||||||||
Other | 4 | 14 | — | 18 | 4 | 16 | — | 20 | ||||||||||||||||||||||||
Total plan assets at fair value | $ | 1,665 | $ | 3,986 | $ | 364 | $ | 6,015 | $ | 1,981 | $ | 4,078 | $ | 446 | $ | 6,505 |
Dollars in Millions | Venture Capital and Limited Partnerships | Insurance Contracts | Total | |||||||||
Fair value at January 1, 2014 | $ | 369 | $ | 142 | $ | 511 | ||||||
Purchases, sales and settlements, net | (88 | ) | (15 | ) | (103 | ) | ||||||
Realized gains/(losses) | 61 | (15 | ) | 46 | ||||||||
Unrealized gains/(losses) | (15 | ) | 7 | (8 | ) | |||||||
Fair value at December 31, 2014 | 327 | 119 | 446 | |||||||||
Purchases, sales and settlements, net | (92 | ) | 7 | (85 | ) | |||||||
Realized gains/(losses) | 41 | (11 | ) | 30 | ||||||||
Unrealized losses | (27 | ) | — | (27 | ) | |||||||
Fair value at December 31, 2015 | $ | 249 | $ | 115 | $ | 364 |
Years Ended December 31, | ||||||||||||
Dollars in Millions | 2015 | 2014 | 2013 | |||||||||
Stock options | $ | — | $ | — | $ | 2 | ||||||
Restricted stock units | 82 | 75 | 74 | |||||||||
Market share units | 36 | 34 | 29 | |||||||||
Performance share units | 117 | 104 | 86 | |||||||||
Total stock-based compensation expense | $ | 235 | $ | 213 | $ | 191 | ||||||
Income tax benefit | $ | 77 | $ | 71 | $ | 64 |
Stock Options | Restricted Stock Units | Market Share Units | Performance Share Units | |||||||||||||||||||||||||
Number of Options Outstanding | Weighted- Average Exercise Price of Shares | Number of Nonvested Awards | Weighted- Average Grant-Date Fair Value | Number of Nonvested Awards | Weighted- Average Grant-Date Fair Value | Number of Nonvested Awards | Weighted- Average Grant-Date Fair Value | |||||||||||||||||||||
Shares in Thousands | ||||||||||||||||||||||||||||
Balance at January 1, 2015 | 15,577 | $ | 22.29 | 5,247 | $ | 43.61 | 1,961 | $ | 42.47 | 3,419 | $ | 47.12 | ||||||||||||||||
Granted | — | — | 1,770 | 61.18 | 703 | 67.03 | 1,574 | 65.07 | ||||||||||||||||||||
Released/Exercised | (5,084 | ) | 23.56 | (2,132 | ) | 44.06 | (1,323 | ) | 35.32 | (1,771 | ) | 42.15 | ||||||||||||||||
Adjustments for actual payout | — | — | — | — | 614 | 32.69 | 1,307 | 51.29 | ||||||||||||||||||||
Forfeited/Canceled | (166 | ) | 25.16 | (386 | ) | 46.98 | (146 | ) | 52.66 | (451 | ) | 59.51 | ||||||||||||||||
Balance at December 31, 2015 | 10,327 | 21.62 | 4,499 | 50.02 | 1,809 | 53.10 | 4,078 | 56.17 | ||||||||||||||||||||
Vested or expected to vest | 10,327 | 21.62 | 4,061 | 49.52 | 1,674 | 52.58 | 4,627 | 57.49 |
Restricted | Market | Performance | ||||||||||
Dollars in Millions | Stock Units | Share Units | Share Units | |||||||||
Unrecognized compensation cost | $ | 159 | $ | 40 | $ | 106 | ||||||
Expected weighted-average period in years of compensation cost to be recognized | 2.7 | 2.8 | 1.7 |
Amounts in Millions, except per share data | 2015 | 2014 | 2013 | |||||||||
Weighted-average grant date fair value (per share): | ||||||||||||
Restricted stock units | $ | 61.18 | $ | 52.22 | $ | 38.73 | ||||||
Market share units | 67.03 | 55.44 | 37.40 | |||||||||
Performance share units | 65.07 | 55.17 | 37.40 | |||||||||
Fair value of options or awards that vested during the year: | ||||||||||||
Stock options | $ | — | $ | — | $ | 11 | ||||||
Restricted stock units | 77 | 68 | 74 | |||||||||
Market share units | 47 | 49 | 30 | |||||||||
Performance share units | 75 | 90 | 90 | |||||||||
Total intrinsic value of stock options exercised during the year | $ | 206 | $ | 199 | $ | 323 |
Options Outstanding and Exercisable | |||||||||||||
Range of Exercise Prices | Number Outstanding and Exercisable (in thousands) | Weighted-Average Remaining Contractual Life (in years) | Weighted-Average Exercise Price Per Share | Aggregate Intrinsic Value (in millions) | |||||||||
$1 - $20 | 4,096 | 3.14 | $ | 17.53 | $ | 210 | |||||||
$20 - $30 | 6,231 | 1.49 | 24.30 | 277 | |||||||||
10,327 | 2.14 | $ | 21.61 | $ | 487 |
Dollars in Millions, except per share data | First Quarter | Second Quarter | Third Quarter | Fourth Quarter | Year | |||||||||||||||
2015 | ||||||||||||||||||||
Total Revenues | $ | 4,041 | $ | 4,163 | $ | 4,069 | $ | 4,287 | $ | 16,560 | ||||||||||
Gross Margin | 3,194 | 3,150 | 2,972 | 3,335 | 12,651 | |||||||||||||||
Net Earnings/(Loss) | 1,199 | (110 | ) | 730 | (188 | ) | 1,631 | |||||||||||||
Net Earnings/(Loss) Attributable to: | ||||||||||||||||||||
Noncontrolling Interest | 13 | 20 | 24 | 9 | 66 | |||||||||||||||
BMS | 1,186 | (130 | ) | 706 | (197 | ) | 1,565 | |||||||||||||
Earnings/(Loss) per Share - Basic(a) | $ | 0.71 | $ | (0.08 | ) | $ | 0.42 | $ | (0.12 | ) | $ | 0.94 | ||||||||
Earnings/(Loss) per Share - Diluted(a) | 0.71 | (0.08 | ) | 0.42 | (0.12 | ) | 0.93 | |||||||||||||
Cash dividends declared per common share | $ | 0.37 | $ | 0.37 | $ | 0.37 | $ | 0.38 | $ | 1.49 | ||||||||||
Cash and cash equivalents | $ | 6,294 | $ | 4,199 | $ | 3,975 | $ | 2,385 | $ | 2,385 | ||||||||||
Marketable securities(b) | 5,592 | 5,909 | 6,065 | 6,545 | 6,545 | |||||||||||||||
Total Assets | 33,579 | 31,954 | 31,779 | 31,748 | 31,748 | |||||||||||||||
Long-term debt | 7,127 | 6,615 | 6,632 | 6,550 | 6,550 | |||||||||||||||
Equity | 15,689 | 15,291 | 15,273 | 14,424 | 14,424 | |||||||||||||||
Dollars in Millions, except per share data | First Quarter | Second Quarter | Third Quarter | Fourth Quarter | Year | |||||||||||||||
2014 | ||||||||||||||||||||
Total Revenues | $ | 3,811 | $ | 3,889 | $ | 3,921 | $ | 4,258 | $ | 15,879 | ||||||||||
Gross Margin | 2,843 | 2,898 | 2,914 | 3,292 | 11,947 | |||||||||||||||
Net Earnings | 936 | 334 | 732 | 27 | 2,029 | |||||||||||||||
Net Earnings/(Loss) Attributable to: | ||||||||||||||||||||
Noncontrolling Interest | (1 | ) | 1 | 11 | 14 | 25 | ||||||||||||||
BMS | 937 | 333 | 721 | 13 | 2,004 | |||||||||||||||
Earnings per Share - Basic(a) | $ | 0.57 | $ | 0.20 | $ | 0.43 | $ | 0.01 | $ | 1.21 | ||||||||||
Earnings per Share - Diluted(a) | 0.56 | 0.20 | 0.43 | 0.01 | 1.20 | |||||||||||||||
Cash dividends declared per common share | $ | 0.36 | $ | 0.36 | $ | 0.36 | $ | 0.37 | $ | 1.45 | ||||||||||
Cash and cash equivalents | $ | 5,225 | $ | 4,282 | $ | 4,851 | $ | 5,571 | $ | 5,571 | ||||||||||
Marketable securities(b) | 5,392 | 6,769 | 6,698 | 6,272 | 6,272 | |||||||||||||||
Total Assets | 33,424 | 33,503 | 33,450 | 33,749 | 33,749 | |||||||||||||||
Long-term debt | 7,367 | 7,372 | 7,267 | 7,242 | 7,242 | |||||||||||||||
Equity | 15,531 | 15,379 | 15,201 | 14,983 | 14,983 |
(a) | Earnings per share for the quarters may not add to the amounts for the year, as each period is computed on a discrete basis. |
(b) | Marketable securities includes current and non-current assets. |
Dollars in Millions | First Quarter | Second Quarter | Third Quarter | Fourth Quarter | Year | |||||||||||||||
Cost of products sold(a) | $ | 34 | $ | 25 | $ | 15 | $ | 10 | $ | 84 | ||||||||||
Marketing, selling and administrative(b) | 1 | 3 | 2 | 4 | 10 | |||||||||||||||
License and asset acquisition charges | 162 | 869 | 94 | 554 | 1,679 | |||||||||||||||
IPRD impairments | — | — | — | 160 | 160 | |||||||||||||||
Other | — | 2 | 15 | 27 | 44 | |||||||||||||||
Research and development | 162 | 871 | 109 | 741 | 1,883 | |||||||||||||||
Provision for restructuring | 12 | 28 | 10 | 65 | 115 | |||||||||||||||
(Gain)/Loss on sale of businesses, product lines and assets | (152 | ) | (8 | ) | (198 | ) | 171 | (187 | ) | |||||||||||
Pension charges | 27 | 36 | 48 | 49 | 160 | |||||||||||||||
Acquisition and alliance related items | (36 | ) | — | (87 | ) | — | (123 | ) | ||||||||||||
Litigation and other settlements | 14 | 1 | — | 143 | 158 | |||||||||||||||
Out-licensed intangible asset impairment | 13 | — | — | — | 13 | |||||||||||||||
Loss on debt redemption | — | 180 | — | — | 180 | |||||||||||||||
Other (income)/expense | (122 | ) | 237 | (227 | ) | 428 | 316 | |||||||||||||
Increase/(decrease) to pretax income | 75 | 1,136 | (101 | ) | 1,183 | 2,293 | ||||||||||||||
Income tax on items above | (68 | ) | (116 | ) | 43 | (339 | ) | (480 | ) | |||||||||||
Increase/(decrease) to net earnings | $ | 7 | $ | 1,020 | $ | (58 | ) | $ | 844 | $ | 1,813 |
(a) | Specified items in cost of products sold are accelerated depreciation, asset impairment and other shutdown costs. |
(b) | Specified items in marketing, selling and administrative are process standardization implementation costs. |
Dollars in Millions | First Quarter | Second Quarter | Third Quarter | Fourth Quarter | Year | |||||||||||||||
Cost of products sold(a) | $ | 45 | $ | 39 | $ | 36 | $ | 31 | $ | 151 | ||||||||||
Additional year of Branded Prescription Drug Fee | — | — | 96 | — | 96 | |||||||||||||||
Process standardization implementation costs | 3 | 3 | 2 | 1 | 9 | |||||||||||||||
Marketing, selling and administrative | 3 | 3 | 98 | 1 | 105 | |||||||||||||||
License and asset acquisition charges | 15 | 148 | 65 | 50 | 278 | |||||||||||||||
IPRD impairments | 33 | 310 | — | — | 343 | |||||||||||||||
Research and development | 48 | 458 | 65 | 50 | 621 | |||||||||||||||
Provision for restructuring | 21 | 16 | 35 | 91 | 163 | |||||||||||||||
(Gain)/Loss on sale of businesses, product lines and assets | (259 | ) | 12 | (315 | ) | 3 | (559 | ) | ||||||||||||
Pension charges | 64 | 45 | 28 | 740 | 877 | |||||||||||||||
Acquisition and alliance related items(b) | 16 | 17 | 39 | — | 72 | |||||||||||||||
Litigation and other settlements | 25 | (23 | ) | 10 | 15 | 27 | ||||||||||||||
Out-licensed intangible asset impairment | — | — | — | 11 | 11 | |||||||||||||||
Loss on debt redemption | 45 | — | — | — | 45 | |||||||||||||||
Upfront, milestone and other licensing receipts | — | — | — | (10 | ) | (10 | ) | |||||||||||||
Other (income)/expense | (88 | ) | 67 | (203 | ) | 850 | 626 | |||||||||||||
Increase/(decrease) to pretax income | 8 | 567 | (4 | ) | 932 | 1,503 | ||||||||||||||
Income tax on items above | (179 | ) | (102 | ) | 33 | (297 | ) | (545 | ) | |||||||||||
Specified tax charge(c) | — | — | — | 123 | 123 | |||||||||||||||
Income taxes | (179 | ) | (102 | ) | 33 | (174 | ) | (422 | ) | |||||||||||
Increase/(decrease) to net earnings | $ | (171 | ) | $ | 465 | $ | 29 | $ | 758 | $ | 1,081 |
(a) | Specified items in cost of products sold are accelerated depreciation, asset impairment and other shutdown costs. |
(b) | Includes $16 million of additional year of Branded Prescription Drug Fee in the third quarter. |
(c) | Specified tax charge relates to transfer pricing matters. |
Item 9. | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. |
Item 9A. | CONTROLS AND PROCEDURES |
Item 9B. | OTHER INFORMATION |
Item 10. | DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT. |
(a) | Reference is made to the 2016 Proxy Statement to be filed on or about March 21, 2016 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 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. |
Item 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS. |
Item 13. | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. |
Item 14. | AUDITOR FEES. |
Item 15. | EXHIBITS and FINANCIAL STATEMENT SCHEDULE. |
(a) |
Page Number | ||
1. | Consolidated Financial Statements | |
Consolidated Statements of Earnings and Comprehensive Income | ||
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. | ||
2. |
BRISTOL-MYERS SQUIBB COMPANY (Registrant) | ||
By | /s/ GIOVANNI CAFORIO | |
Giovanni Caforio | ||
Chief Executive Officer | ||
Date: February 12, 2016 |
Signature | Title | Date | ||
/s/ GIOVANNI CAFORIO, M.D. | Chief Executive Officer and Director | February 12, 2016 | ||
(Giovanni Caforio, M.D.) | (Principal Executive Officer) | |||
/s/ CHARLES BANCROFT | Chief Financial Officer | February 12, 2016 | ||
(Charles Bancroft) | (Principal Financial Officer) | |||
/s/ JOSEPH C. CALDARELLA | Senior Vice President and Corporate Controller | February 12, 2016 | ||
(Joseph C. Caldarella) | (Principal Accounting Officer) | |||
/s/ LAMBERTO ANDREOTTI | Chairman of the Board of Directors | February 12, 2016 | ||
(Lamberto Andreotti) | ||||
/s/ LEWIS B. CAMPBELL | Director | February 12, 2016 | ||
(Lewis B. Campbell) | ||||
/s/ LAURIE H. GLIMCHER, M.D. | Director | February 12, 2016 | ||
(Laurie H. Glimcher, M.D.) | ||||
/s/ MICHAEL GROBSTEIN | Director | February 12, 2016 | ||
(Michael Grobstein) | ||||
/s/ ALAN J. LACY | Director | February 12, 2016 | ||
(Alan J. Lacy) | ||||
/s/ THOMAS J. LYNCH, JR., M.D. | Director | February 12, 2016 | ||
(Thomas J. Lynch, Jr., M.D.) | ||||
/s/ DINESH C. PALIWAL | Director | February 12, 2016 | ||
(Dinesh C. Paliwal) | ||||
/s/ VICKI L. SATO, PH.D. | Director | February 12, 2016 | ||
(Vicki L. Sato, Ph.D.) | ||||
/s/ GERALD L. STORCH | Director | February 12, 2016 | ||
(Gerald L. Storch) | ||||
/s/ TOGO D. WEST, JR. | Director | February 12, 2016 | ||
(Togo D. West, Jr.) |
Exhibit No. | Description | Page No | ||
3a. | Amended and Restated Certificate of Incorporation of Bristol-Myers Squibb Company (incorporated herein by reference to Exhibit 3a to the Form 10-Q for the quarterly period ended June 30, 2005). | ‡ | ||
3b. | Certificate of Correction to the Amended and Restated Certificate of Incorporation, effective as of December 24, 2009 (incorporated herein by reference to Exhibit 3b to the Form 10-K for the fiscal year ended December 31, 2010). | ‡ | ||
3c. | Certificate of Amendment to the Amended and Restated Certificate of Incorporation, effective as of May 7, 2010 (incorporated herein by reference to Exhibit 3a to the Form 8-K dated May 4, 2010 and filed on May 10, 2010). | ‡ | ||
3d. | Certificate of Amendment to the Amended and Restated Certificate of Incorporation, effective as of May 7, 2010 (incorporated herein by reference to Exhibit 3b to the Form 8-K dated May 4, 2010 and filed on May 10, 2010). | ‡ | ||
3e. | Bylaws of Bristol-Myers Squibb Company, as amended as of December 10, 2013 (incorporated herein by reference to Exhibit 3.1 to the Form 8-K dated September 16, 2014 and filed on September 19, 2014). | ‡ | ||
4a. | Letter of Agreement dated March 28, 1984 (incorporated herein by reference to Exhibit 4 to the Form 10-K for the fiscal year ended December 31, 1983). | ‡ | ||
4b. | Indenture, dated as of June 1, 1993, between Bristol-Myers Squibb Company and JPMorgan Chase Bank (as successor trustee to The Chase Manhattan Bank (National Association)) (incorporated herein by reference to Exhibit 4.1 to the Form 8-K dated May 27, 1993 and filed on June 3, 1993). | ‡ | ||
4c. | 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). | ‡ | ||
4d. | Form of 6.80% Debenture due 2026 of Bristol-Myers Squibb Company (incorporated herein by reference to Exhibit 4e to the Form 10-K for the fiscal year ended December 31, 1996). | ‡ | ||
4e. | Form of 6.875% Debenture due 2097 of Bristol-Myers Squibb Company (incorporated herein by reference to Exhibit 4f to the Form 10-Q for the quarterly period ended September 30, 1997). | ‡ | ||
4f. | Indenture, dated October 1, 2003, between Bristol-Myers Squibb Company, as Issuer, and JPMorgan Chase Bank, as Trustee (incorporated herein by reference to Exhibit 4q to the Form 10-Q for the quarterly period ended September 30, 2003). | ‡ | ||
4g. | Form of Floating Rate Convertible Senior Debenture due 2023 (incorporated herein by reference to Exhibit 4s to the Form 10-Q for the quarterly period ended September 30, 2003). | ‡ | ||
4h. | Specimen Certificate of Common Stock (incorporated herein by reference to Exhibit 4s to the Form 10-K for the fiscal year ended December 31, 2003). | ‡ | ||
4i. | Form of Fourth Supplemental Indenture between Bristol-Myers Squibb Company and The Bank of New York, as Trustee, to the indenture dated June 1, 1993 (incorporated herein by reference to Exhibit 4r to the Form 8-K dated November 20, 2006 and filed on November 27, 2006). | ‡ | ||
4j. | Form of 5.875% Notes due 2036 (incorporated herein by reference to Exhibit 4s to the Form 8-K dated November 20, 2006 and filed November 27, 2006). | ‡ | ||
4k. | Form of 4.375% Notes due 2016 (incorporated herein by reference to Exhibit 4t to the Form 8-K dated November 20, 2006 and filed November 27, 2006). | ‡ | ||
4l. | Form of 4.625% Notes due 2021 (incorporated herein by reference to Exhibit 4u to the Form 8-K dated November 20, 2006 and filed November 27, 2006). | ‡ | ||
4m. | Form of Fifth Supplemental Indenture between Bristol-Myers Squibb Company and The Bank of New York, as Trustee, to the indenture dated June 1, 1993 (incorporated herein by reference to Exhibit 4.1 to the Form 8-K dated May 1, 2008 and filed on May 7, 2008). | ‡ | ||
4n. | Form of 6.125% Notes due 2038 (incorporated herein by reference to Exhibit 4.3 to the Form 8-K dated May 1, 2008 and filed on May 7, 2008). | ‡ |
4o. | Form of Sixth Supplemental Indenture between Bristol-Myers Squibb Company and The Bank of New York, as Trustee, to the indenture dated June 1, 1993 (incorporated herein by reference to Exhibit 4.1 to the Form 8-K dated July 26, 2012 and filed on July 31, 2012). | ‡ | ||
4p. | Form of 0.875% Notes Due 2017 (incorporated herein by reference to Exhibit 4.1 to the Form 8-K dated July 26, 2012 and filed on July 31, 2012). | ‡ | ||
4q. | Form of 2.000% Notes Due 2022 (incorporated herein by reference to Exhibit 4.1 to the Form 8-K dated July 26, 2012 and filed on July 31, 2012). | ‡ | ||
4r. | Form of 3.250% Notes Due 2042 (incorporated herein by reference to Exhibit 4.1 to the Form 8-K dated July 26, 2012 and filed on July 31, 2012). | ‡ | ||
4s. | Seventh Supplemental Indenture, dated as of October 31, 2013, between Bristol-Myers Squibb Company and The Bank of New York Mellon, as Trustee to the Indenture dated as of June 1, 1993 (incorporated herein by reference to Exhibit 4.1 to the Form 8-K dated and filed on October 31, 2013). | ‡ | ||
4t. | Form of 1.750% Notes Due 2019 (incorporated herein by reference to Exhibit 4.2 to the Form 8-K dated and filed on October 31, 2013). | ‡ | ||
4u. | Form of 3.250% Notes Due 2023 (incorporated herein by reference to Exhibit 4.3 to the Form 8-K dated and filed on October 31, 2013). | ‡ | ||
4v. | Form of 4.500% Notes Due 2044 (incorporated herein by reference to Exhibit 4.4 to the Form 8-K dated and filed on October 31, 2013). | ‡ | ||
4w. | Eighth Supplemental Indenture, dated as of May 5, 2015, between Bristol-Myers Squibb Company and The Bank of New York Mellon, as Trustee, to the Indenture dated as of June 1, 1993 (incorporated herein by reference to Exhibit 4.1 to the Form 8-K dated and filed on May 5, 2015). | ‡ | ||
4x. | Form of €575,000,000 1.000% Notes Due 2025 (incorporated herein by reference to Exhibit 4.2 to the Form 8-K dated and filed on May 5, 2015). | ‡ | ||
4y. | Form of €575,000,000 1.750% Notes Due 2035 (incorporated herein by reference to Exhibit 4.3 to the Form 8-K dated and filed on May 5, 2015). | ‡ | ||
10a. | $1,500,000,000 Five Year Competitive Advance and Revolving Credit Facility Agreement dated as of September 29, 2011 among Bristol-Myers Squibb Company, the borrowing subsidiaries, the lenders named in the agreement, BNP Paribas and The Royal Bank of Scotland plc, as documentation agents, Bank of America N.A., as syndication agent, and JPMorgan Chase Bank, N.A. and Citibank, N.A., as administrative agents (incorporated herein by reference to Exhibit 10.1 to the Form 8-K dated September 29, 2011 and filed on October 4, 2011). | ‡ | ||
10b. | First Amendment dated June 21, 2013 to the Five Year Competitive Advance and Revolving Credit Facility Agreement dated as of September 29, 2011 among Bristol-Myers Squibb Company, the several financial institutions from time to time party to the agreement, and JPMorgan Chase Bank, N.A. and Citibank N.A. as administrative agents (incorporated herein by reference to Exhibit 10a to the Form 10-Q for the quarterly period ended June 30, 2013). | ‡ | ||
10c. | Extension notice dated June 3, 2013 for the Five Year Competitive Advance and Revolving Credit Facility Agreement dated as of September 29, 2011 among Bristol-Myers Squibb Company, the several financial institutions from time to time party to the agreement, and JPMorgan Chase Bank, N.A. and Citibank N.A. as administrative agents (incorporated herein by reference to Exhibit 10b to the Form 10-Q for the quarterly period ended June 30, 2013). | ‡ | ||
10d. | $1,500,000,000 Five Year Competitive Advance and Revolving Credit Facility Agreement dated as of July 31, 2012 among Bristol-Myers Squibb Company, the borrowing subsidiaries, the lenders named in the agreement, Bank of America N.A., Barclays Bank plc, Deutsche Bank Securities Inc., and Wells Fargo Bank, National Association as documentation agents, Citibank, N.A. and JPMorgan Chase Bank, N.A., as administrative agents (incorporated herein by reference to Exhibit 10.1 to the Form 8-K dated July 26, 2012 and filed on July 31, 2012). | ‡ | ||
10e. | Extension notice dated May 31, 2013 for the Five Year Competitive Advance and Revolving Credit Facility Agreement dated as of July 30, 2012 among Bristol-Myers Squibb Company, the several financial institutions from time to time party to the agreement, and JPMorgan Chase Bank, N.A. and Citibank N.A. as administrative agents (incorporated herein by reference to Exhibit 10c to the Form 10-Q for the quarterly period ended June 30, 2013). | ‡ | ||
10f. | Extension notice dated June 2, 2014 for the Five Year Competitive Advance and Revolving Credit Facility Agreement dated as of September 29, 2011 among Bristol-Myers Squibb Company, the several financial institutions from time to time party to the agreement, and JPMorgan Chase Bank, N.A. and Citibank N.A. as administrative agents (incorporated herein by reference to Exhibit 10a to the Form 10-Q for the quarterly period ended June 30, 2014). | ‡ | ||
10g. | Extension notice dated June 2, 2014 for the Five Year Competitive Advance and Revolving Credit Facility Agreement dated as of July 30, 2012 among Bristol-Myers Squibb Company, the several financial institutions from time to time party to the agreement, and JPMorgan Chase Bank, N.A. and Citibank N.A. as administrative agents (incorporated herein by reference to Exhibit 10b to the Form 10-Q for the quarterly period ended June 30, 2014). | ‡ | ||
10h. | Extension notice dated June 1, 2015, for the Five Year Competitive Advance and Revolving Credit Facility Agreement dated as of September 29, 2011 among Bristol-Myers Squibb Company, and the several financial institutions from time to time party to the agreement, and JPMorgan Chase Bank, N.A. and Citibank N.A. as administrative agents (incorporated herein by reference to Exhibit 10a to the Form 10-Q for the quarterly period ended June 30, 2015). | ‡ | ||
10i. | Extension notice dated June 1, 2015, for the Five Year Competitive Advance and Revolving Credit Facility Agreement dated as of July 30, 2012 among Bristol-Myers Squibb Company, the several financial institutions from time to time party to the agreement, and JPMorgan Chase Bank, N.A. and Citibank N.A. as administrative agents (incorporated herein by reference to Exhibit 10b to the Form 10-Q for the quarterly period ended June 30, 2015). | ‡ | ||
10j. | SEC Consent Order (incorporated herein by reference to Exhibit 10s to the Form 10-Q for the quarterly period ended September 30, 2004). | ‡ | ||
10k. | Master Restructuring Agreement between Bristol-Myers Squibb Company and Sanofi dated as of September 27, 2012 (incorporated by reference herein to Exhibit 10a to the Form 10-Q for the quarterly period ended September 30, 2012). † | ‡ | ||
10l. | Side Letter to Master Restructuring Agreement between Bristol-Myers Squibb Company and Sanofi dated as of January 1, 2013 (incorporated herein by reference to Exhibit 10p to the Form 10-K for the fiscal year ended December 31, 2012). † | ‡ | ||
10m. | Restated Development and Commercialization Collaboration Agreement between Otsuka Pharmaceutical Co., Ltd. and Bristol-Myers Squibb Company dated as of October 23, 2001 (incorporated by reference herein to Exhibit 10.12 to the Form 8-K filed on August 17, 2009).† | ‡ | ||
10n. | Amendment No. 3 to the Restated Development and Commercialization Collaboration Agreement between Otsuka Pharmaceutical Co., Ltd. and Bristol-Myers Squibb Company dated as of September 25, 2006 (incorporated by reference herein to Exhibit 10.13 to the Form 8-K filed on August 17, 2009).† | ‡ | ||
10o. | Amendment No. 5 to the Restated Development and Commercialization Collaboration Agreement between Otsuka Pharmaceutical Co., Ltd. and Bristol-Myers Squibb Company effective as of April 4, 2009 (incorporated by reference herein to Exhibit 10.14 to the Form 8-K filed on August 17, 2009).† | ‡ | ||
10p. | Amendment No. 9 to the Restated Development and Commercialization Collaboration Agreement between Otsuka Pharmaceutical Co., Ltd. and Bristol-Myers Squibb Company effective as of October 29, 2012 (incorporated herein by reference to Exhibit 1ee to the Form 10-K for the fiscal year ended December 31, 2012). † | ‡ | ||
‡‡10q. | Bristol-Myers Squibb Company 2002 Stock Incentive Plan, effective as of May 7, 2002 and as amended effective June 10, 2008 (incorporated herein by reference to Exhibit 10.1 to the Form 10-Q for the quarterly period ended September 30, 2008). | ‡ | ||
‡‡10r. | Bristol-Myers Squibb Company 2012 Stock Award and Incentive Plan, effective as of May 1, 2012 (incorporated herein by reference to Exhibit B to the 2012 Proxy Statement dated March 20, 2012). | ‡ | ||
‡‡10s. | Bristol-Myers Squibb Company 2007 Stock Award and Incentive Plan, effective as of May 1, 2007 and as amended effective June 10, 2008 (incorporated herein by reference to Exhibit 10.2 to the Form 10-Q for the quarterly period ended September 30, 2008). | ‡ | ||
‡‡10t. | Bristol-Myers Squibb Company TeamShare Stock Option Plan, as amended and restated effective September 10, 2002 (incorporated herein by reference to Exhibit 10c to the Form 10-K for the fiscal year ended December 31, 2002). | ‡ | ||
‡‡10u. | Form of Non-Qualified Stock Option Agreement under the 2002 Stock Award and Incentive Plan (incorporated herein by reference to Exhibit 10s to the Form 10-K for the fiscal year ended December 31, 2005). | ‡ | ||
‡‡10v. | Form of Performance Share Units Agreement for the 2013-2015 Performance Cycle under the 2012 Stock Award and Incentive Plan (incorporated by reference to Exhibit 10oo to the Form 10-K for the fiscal year ended December 31, 2012). | ‡ | ||
‡‡10w. | Form of 2014-2016 Performance Share Units Agreement under the 2012 Stock Award and Incentive Plan (incorporated by reference to Exhibit 10hh to the Form 10-K for the fiscal year ended December 31, 2013). | ‡ | ||
‡‡10x. | Form of 2015-2017 Performance Share Units Agreement under the 2012 Stock Award and Incentive Plan (incorporated by reference to Exhibit 10x to the Form 10-K for the fiscal year ended December 31, 2014). | ‡ | ||
‡‡10y. | Form of 2016-2018 Performance Share Units Agreement under the 2012 Stock Award and Incentive Plan (filed herewith). | E-10-1 | ||
‡‡10z. | Form of Restricted Stock Units Agreement with five year vesting under the 2012 Stock Award and Incentive Plan (filed herewith). | E-10-2 | ||
‡‡10aa. | Form of Restricted Stock Units Agreement with four year vesting under the 2012 Stock Award and Incentive Plan (filed herewith). | E-10-3 | ||
‡‡10bb. | Form of Market Share Units Agreement under the 2012 Stock Award and Incentive Plan (filed herewith). | E-10-4 | ||
‡‡10cc. | 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). | ‡ | ||
‡‡10dd. | Bristol-Myers Squibb Company Executive Performance Incentive Plan effective January 1, 1997 (incorporated herein by reference to Exhibit 10b to the Form 10-K for the fiscal year ended December 31, 1996). | ‡ | ||
‡‡10ee. | Bristol-Myers Squibb Company Executive Performance Incentive Plan effective January 1, 2003 and as amended effective June 10, 2008 (incorporated herein by reference to Exhibit 10.3 to the Form 10-Q for the quarterly period ended September 30, 2008). | ‡ | ||
‡‡10ff. | Bristol-Myers Squibb Company 2007 Senior Executive Performance Incentive Plan (as amended and restated effective June 8, 2010 and incorporated herein by reference to Exhibit 10a. to the Form 10-Q for the quarterly period ended June 30, 2010). | ‡ | ||
‡‡10gg. | Bristol-Myers Squibb Company Benefit Equalization Plan – Retirement Income Plan, as amended and restated effective as of January 1, 2012, (incorporated herein by reference to Exhibit 10ww to the Form 10-K for the fiscal year ended December 31, 2012). | ‡ | ||
‡‡10hh. | Bristol-Myers Squibb Company Benefit Equalization Plan – Savings and Investment Program, as amended and restated effective as of January 1, 2012 (incorporated herein by reference to Exhibit 10xx to the Form 10-K for the fiscal year ended December 31, 2012). | ‡ | ||
‡‡10ii. | 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). | ‡ | ||
‡‡10jj. | Senior Executive Severance Plan, effective as of April 26, 2007 and as amended effective February 16, 2012 (incorporated by reference to Exhibit 10ll to the Form 10-K for the fiscal year ended December 31, 2011). | ‡ | ||
‡‡10kk. | Form of Agreement entered into between the Registrant and each of the named executive officers and certain other executives effective January 1, 2016 (filed herewith). | E-10-5 | ||
‡‡10ll. | Bristol-Myers Squibb Company Retirement Income Plan for Non-Employee Directors, as amended March 5, 1996 (incorporated herein by reference to Exhibit 10k to the Form 10-K for the fiscal year ended December 31, 1996). | ‡ | ||
‡‡10mm. | Bristol-Myers Squibb Company 1987 Deferred Compensation Plan for Non-Employee Directors, as amended and restated January 20, 2015 (incorporated herein by reference to Exhibit 10mm to the Form 10-K for the fiscal year ended December 31, 2014). | ‡ | ||
‡‡10nn. | 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), as amended January 12, 1999 (incorporated herein by reference to Exhibit 10m to the Form 10-K for the fiscal year ended December 31, 1998). | ‡ |
‡‡10oo. | Bristol-Myers Squibb Company Non-Employee Directors’ Stock Option Plan, as amended (as approved by the Stockholders on May 2, 2000, incorporated herein by reference to Exhibit A to the 2000 Proxy Statement dated March 20, 2000). | ‡ | ||
‡‡10pp. | Squibb Corporation Deferral Plan for Fees of Outside Directors, as amended (as adopted, incorporated herein by reference to Exhibit 10e Squibb Corporation 1991 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). | ‡ | ||
12 | Statement re computation of ratios (filed herewith). | E-12-1 | ||
21 | Subsidiaries of the Registrant (filed herewith). | E-21-1 | ||
23 | Consent of Deloitte & Touche LLP (filed herewith). | E-23-1 | ||
31a. | Section 302 Certification Letter (filed herewith). | E-31-1 | ||
31b. | Section 302 Certification Letter (filed herewith). | E-31-1 | ||
32a. | Section 906 Certification Letter (filed herewith). | E-32-1 | ||
32b. | Section 906 Certification Letter (filed herewith). | E-32-2 | ||
101. | The following financial statements from the Bristol-Myers Squibb Company Annual Report on Form 10-K for the years ended December 31, 2015, 2014 and 2013, formatted in Extensible Business Reporting Language (XBRL): (i) consolidated statements of earnings, (ii) consolidated statements of comprehensive income, (iii) consolidated balance sheets, (iv) consolidated statements of cash flows, and (v) the notes to the consolidated financial statements. |
† | Confidential treatment has been granted for certain portions which are omitted in the copy of the exhibit electronically filed with the Commission. |
* | Indicates, in this Form 10-K, brand names of products, which are registered trademarks not solely owned by the Company or its subsidiaries. Byetta, Bydureon, and Symlin are trademarks of Amylin Pharmaceuticals, LLC; Farxiga, Onglyza and Kombiglyze are trademarks of AstraZeneca AB; Erbitux is a trademark of ImClone LLC; Avapro/Avalide (known in the EU as Aprovel/Karvea) and Plavix are trademarks of Sanofi; Abilify is a trademark of Otsuka Pharmaceutical Co., Ltd.; Truvada and Tybost are trademarks of Gilead Sciences, Inc. and/or one of its affiliates; Gleevec is a trademark of Novartis AG; Atripla is a trademark of Bristol-Myers Squibb and Gilead Sciences, LLC; Norvir is a trademark of AbbVie Inc.; Myalept is a trademark of Aegerion Pharmaceuticals, Inc.; Reglan is a trademark of ANIP Acquisition Company; Revlimid is a trademark of Celgene Corporation; Prostvac is a trademark of BN ImmunoTherapeutics Inc.; Keytruda is a trademark of Merck Sharp & Dohme Corp.; Recothrom is a trademark of The Medicines Company and Ixempra is a trademark of R-Pharm US Operating, LLC. Brand names of products that are in all italicized letters, without an asterisk, are registered trademarks of BMS and/or one of its subsidiaries. |
Award Date: March 10, 2016 Service Period: March 10, 2016 to March 10, 2019 Performance Period: January 1, 2016 to December 31, 2018 Total Shareholder Return (“TSR”) Measurement Period: March 10, 2016 to February 28, 2019 Performance Goals: The Performance Goals are included in Exhibit A attached hereto. Minimum Performance Condition: If you have been designated a Covered Employee for 2016, then a required condition in order for you to vest in Performance Share Units will be that the Minimum Performance Condition has been achieved (in addition to achievement of the Performance Goals). The Minimum Performance Condition is included in Exhibit A attached hereto. Vesting: The Performance Share Units will vest on March 10, 2019, subject to the performance conditions described in Section 4 and Exhibit A hereto, and subject to earlier vesting at the times indicated in Sections 6 (including in connection with certain terminations following a Change in Control) and 8. Settlement: Vested Performance Share Units will be settled by delivery of one share of the Company’s Common Stock, $0.10 par value per share (“Shares”), for each Performance Share Unit being settled. Settlement shall occur at the time specified in Sections 4 and 6 hereof, as applicable. |
1. | PERFORMANCE SHARE UNITS AWARD |
2. | CONSIDERATION |
3. | MINIMUM PERFORMANCE CONDITION AND PERFORMANCE GOALS |
4. | DETERMINATION OF PERFORMANCE SHARE UNITS VESTED; FORFEITURES; SETTLEMENT |
5. | NONTRANSFERABILITY OF PERFORMANCE SHARE UNITS |
6. | RETIREMENT AND OTHER TERMINATIONS (EXCLUDING DEATH) |
7. | DISABILITY OF PARTICIPANT |
8. | DEATH OF PARTICIPANT |
9. | RESPONSIBILITY FOR TAXES |
10. | NON-COMPETITION AND NON-SOLICITATION AGREEMENT AND COMPANY RIGHT TO INJUNCTIVE RELIEF, DAMAGES, RECISSION, FORFEITURE AND OTHER REMEDIES |
(A) | provided, however, that if a court of competent jurisdiction or other authority determines the foregoing geographic scope is unenforceable, the “Restricted Area” shall be defined as the continent, country and the geographic regions where you worked and were responsible for while employed by the Company or a subsidiary of the Company; |
(B) | provided, however, that if a court of competent jurisdiction or other authority determines that the foregoing geographic scope is unenforceable, the “Restricted Area” shall be defined as the country in which you worked; |
(C) | provided, however, that if a court of competent jurisdiction or other authority determines that the foregoing geographic scope is unenforceable, the “Restricted Area” shall be defined as the geographic regions that you serviced and were responsible for while employed by the Company or a subsidiary of the Company. |
(A) | provided, however, that if a court of competent jurisdiction or other authority determines that such period is unenforceable, the “Non-Competition and Non-Solicitation Period” shall be the period of your employment and an additional eleven (11) months after your employment Termination Date with the Company or a subsidiary of the Company for any reason; |
(B) | provided, however, that if a court of competent jurisdiction or other authority determines that such period is unenforceable, the “Non-Competition and Non-Solicitation Period” shall be the period of your employment and an additional ten (10) months after your employment Termination Date with the Company or a subsidiary of the Company for any reason; |
(C) | provided further, in the event that the Company or a subsidiary of the Company files an action to enforce rights arising out of this Agreement, the Non-Competition and Non-Solicitation Period shall be extended for all periods of time in which you are determined by the Court or other authority to have been in violation of the provisions of Section 10(c). |
11. | DIVIDENDS AND OTHER ADJUSTMENTS |
12. | EFFECT ON OTHER BENEFITS |
13. | ACKNOWLEDGMENT OF NATURE OF PLAN AND PERFORMANCE SHARE UNITS |
14. | NO ADVICE REGARDING GRANT |
15. | RIGHT TO CONTINUED EMPLOYMENT |
16. | ADMINISTRATION; UNFUNDED OBLIGATIONS |
17. | DEEMED ACCEPTANCE |
18. | AMENDMENT TO PLAN |
19. | SEVERABILITY AND VALIDITY |
20. | GOVERNING LAW, JURISDICTION AND VENUE |
21. | SUCCESSORS |
22. | DATA PRIVACY |
23. | ELECTRONIC DELIVERY AND ACCEPTANCE |
24. | INSIDER TRADING/MARKET ABUSE LAWS |
25. | LANGUAGE |
26. | COMPLIANCE WITH LAWS AND REGULATIONS |
27. | ENTIRE AGREEMENT AND NO ORAL MODIFICATION OR WAIVER |
28. | ADDENDUM |
29. | FOREIGN ASSET/ACCOUNT REPORTING REQUIREMENTS AND EXCHANGE CONTROLS |
30. | IMPOSITION OF OTHER REQUIREMENTS |
For the Company | ||
Bristol-Myers Squibb Company | ||
By |
Performance Measure | Threshold | Target | Maximum |
January 1, 2016 - December 31, 2018 Total revenues, net of foreign exchange ($=MM) | |||
January 1, 2016 - December 31, 2018 Non-GAAP operating margin | |||
March 10, 2016 - February 28, 2019 Relative TSR |
AbbVie | GlaxoSmithKline |
Amgen | Johnson & Johnson |
AstraZeneca | Merck |
Biogen Idec | Novartis |
Celgene | Pfizer |
Eli Lilly | Roche |
Gilead Sciences | Sanofi |
(a) | Nontransferability. During the Restricted Period and any further period prior to settlement of your RSUs, you may not sell, transfer, pledge or assign any of the RSUs or your rights relating thereto. If you attempt to assign your rights under this Agreement in violation of the provisions herein, the Company’s obligation to settle RSUs or otherwise make payments shall terminate. |
(b) | Time of Settlement. RSUs shall be settled promptly upon expiration of the Restricted Period without forfeiture of the RSUs (i.e., upon vesting), but in any event within 60 days after expiration of the Restricted Period, by delivery of one share of Common Stock for each RSU being settled, or, at the discretion of the Company, the cash equivalent thereof; provided, however, that settlement of an RSU shall be subject to Plan Section 11(k), including if applicable the six-month delay rule in Plan Sections 11(k)(i)(C)(2) and 11(k)(i)(G); provided further, that no dividend or dividend equivalents will be paid, accrued or accumulated in respect of the period during which settlement was delayed. (Note: This rule may apply to any portion of the RSUs that vest after the time you become Retirement eligible under the Plan, and could apply in other cases as well). Settlement of RSUs which directly or indirectly result from adjustments to RSUs shall occur at the time of settlement of, and subject to the restrictions and conditions that apply to, the granted RSUs. Settlement of cash amounts which directly or indirectly result from adjustments to RSUs shall be included as part of your regular payroll payment as soon as administratively practicable after the settlement date for the underlying RSUs, and subject to the restrictions and conditions that apply to, the granted RSUs. Until shares are delivered to you in settlement of RSUs, you shall have none of the rights of a stockholder of the Company with respect to the shares issuable in settlement of the RSUs, including the right to vote the shares and receive actual dividends and other distributions on the underlying shares of Common Stock. Shares of stock issuable in settlement of RSUs shall be delivered to you upon settlement in certificated form or in such other manner as the Company may reasonably determine. At that time, you will have all of the rights of a stockholder of the Company. |
(c) | Retirement and Death. In the event of your Retirement (as that term is defined in the Plan; however, if you attain age 65 before Retirement, 100% of your RSUs held for at least one year will have vested prior to Retirement) or your death while employed by the Company prior to the end of the Restricted Period, you, or your estate, shall be deemed vested and entitled to settlement of (i.e., the Restricted Period shall expire with respect to) a proportionate number of the total number of RSUs granted (taking into account RSUs previously vested), provided that you have been continuously employed by the Company or a subsidiary of the Company for at least one year following the Award Date and your employment has not been terminated by the Company or a subsidiary of the Company for misconduct or other conduct deemed detrimental to the interests of the Company or a subsidiary of the Company. If you are only eligible for Retirement pursuant to Plan Section 2(x)(iii), and you are employed in the United States or Puerto Rico at the time of your Retirement, you shall be entitled to the pro rata vesting described in this Section 2(c) only if you execute and do not revoke a release in favor of the Company and its predecessors, successors, affiliates, subsidiaries, directors and employees in a form satisfactory to the Company; if you fail to execute or revoke the release, or your release fails to become effective and irrevocable within 60 days of the date your employment terminates, you shall forfeit any RSUs that are unvested as of the date your employment terminates. The formula for determining the proportionate number of your RSUs to become vested and non-forfeitable upon your Retirement or death is available by request from the Office of the Corporate Secretary at 345 Park Avenue, New York, New York 10154. RSUs that become vested and nonforfeitable under this Section 2(c) shall be distributed in accordance with Section 2(b) (i.e., within 60 days of the date of your death or Retirement). In the event of your becoming vested hereunder on account of death, or in the event of your death subsequent to your Retirement hereunder and prior to the delivery of shares in settlement of RSUs (not previously forfeited), shares in settlement of your RSUs shall be delivered to your estate, upon presentation to the Committee of letters testamentary or other documentation satisfactory to the Committee, and your estate shall succeed to any other rights provided hereunder in the event of your death. |
(d) | Termination not for Misconduct/Detrimental Conduct. In the event your employment is terminated by the Company or a subsidiary of the Company for reasons other than misconduct or other conduct deemed detrimental to the interests of the Company or a subsidiary of the Company, and you are not eligible for Retirement, you shall be entitled to settlement of (i.e., the Restricted Period shall expire with respect to) a proportionate number of the total number of RSUs granted (taking into account RSUs previously vested), provided that you have been continuously employed by the Company or a subsidiary of the Company for at least one year following the Award Date. If you are not eligible for Retirement, and you are employed in the United States or Puerto Rico at the time of your termination, you shall be entitled to the pro rata vesting described in this Section 2(d) only if you execute and do not revoke a release in favor of the Company and its predecessors, successors, affiliates, subsidiaries, directors and employees in a form satisfactory to the Company; if you fail to execute or revoke the release, or your release fails to become effective and irrevocable within 60 days of the date your employment terminates, you shall forfeit any RSUs that are unvested as of the date your employment terminates. The formula for determining the proportionate number of RSUs you are entitled to under this Section 2(d) is available by request from the Office of the Corporate Secretary at 345 Park Avenue, New York, New York 10154. |
(e) | Disability. In the event you become Disabled (as that term is defined below), for the period during which you continue to be deemed to be employed by the Company or a subsidiary (i.e., the period during which you receive Disability benefits), you will not be deemed to have terminated employment for purposes of the RSUs. However, no period of continued Disability shall continue beyond 29 months for purposes of the RSUs, at which time you will have considered to have separated from service in accordance with applicable laws as more fully provided for herein. Upon the termination of your receipt of Disability benefits, (i) you will not be deemed to have terminated employment if you return to employment status, and (ii) if you do not return to employment status or are considered to have separated from service as noted above, you will be deemed to have terminated employment at the date of cessation of payments to you under all disability pay plans of the Company and its subsidiaries (unless you are on an approved leave of absence per Section (i) herein), with such termination treated for purposes of the RSUs as a Retirement or death (as detailed in Section 2(c) herein), or voluntary termination (as detailed in Section 2(g) herein) based on your circumstances at the time of such termination. For purposes of this Agreement, “Disability” or “Disabled” shall mean qualifying for and receiving payments under a disability plan of the Company or any subsidiary or affiliate either in the United States or in a jurisdiction outside of the United States, and in jurisdictions outside of the United States shall also include qualifying for and receiving payments under a mandatory or universal disability plan or program managed or maintained by the government. |
(f) | Qualifying Termination Following Change in Control. In the event your employment is terminated by reason of a Qualifying Termination during the Protected Period following a Change in Control, the Restricted Period and all remaining restrictions shall expire and the RSUs shall be deemed fully vested. |
(g) | Other Termination of Employment. In the event of your voluntary termination (subject to Section 2(c)), or termination by the Company or a subsidiary for misconduct or other conduct deemed by the Company to be detrimental to the interests of the Company or a subsidiary of the Company, you shall forfeit all unvested RSUs on the date of termination. |
(h) | Other Terms. |
(i) | In the event that you fail promptly to pay or make satisfactory arrangements as to the Tax-Related Items as provided in Section 4, all RSUs subject to restriction shall be forfeited by you and shall be deemed to be reacquired by the Company. |
(ii) | You may, at any time prior to the expiration of the Restricted Period, waive all rights with respect to all or some of the RSUs by delivering to the Company a written notice of such waiver. |
(iii) | Termination of employment includes any event if immediately thereafter you are no longer an employee of the Company or any subsidiary of the Company, subject to Section 2(i) hereof. References in this Section 2 to employment by the Company include employment by a subsidiary of the Company. Termination of employment means an event after which you are no longer employed by the Company or any subsidiary of the Company. Such an event could include the disposition of a subsidiary or business unit by the Company or a subsidiary. |
(iv) | Upon any termination of your employment, any RSUs as to which the Restricted Period has not expired at or before such termination shall be forfeited, subject to Sections 2(c)-(f) hereof. Other provisions of this Agreement notwithstanding, in no event will an RSU that has been forfeited thereafter vest or be settled. |
(v) | In the event of termination of your employment or other service relationship (for any reason whatsoever, whether or not later found to be invalid or in breach of employment laws in the jurisdiction where you are employed or the terms of your employment agreement, if any), unless otherwise provided in this Agreement or determined by the Company, your right to vest in the RSUs under the Plan, if any, will terminate effective as of the date that you are no longer actively providing services and will not be extended by any notice period (e.g., active services would not include any contractual notice period or any period of "garden leave" or similar period mandated under employment laws in the jurisdiction where you are employed or the terms of your employment agreement, if any); the Company shall have the exclusive discretion to determine when you are no longer actively providing services for purposes of your RSUs (including whether you may still be considered to be providing services while on a leave of absence). |
(vi) | You agree that the Company may recover any incentive-based compensation received by you under this Agreement if such recovery is pursuant to a clawback or recoupment policy approved by the Committee, even if approved subsequent to the date of this Agreement. |
(i) | The following events shall not be deemed a termination of employment: |
(i) | A transfer of you from the Company to a subsidiary, or vice versa, or from one subsidiary to another; and |
(ii) | A leave of absence from which you return to active service for any purpose approved by the Company or a subsidiary in writing. |
(j) | As more fully provided for in the Plan, notwithstanding any provision herein, in any Award or in the Plan to the contrary, the terms of any Award shall be limited to those terms permitted under Code Section 409A including all applicable regulations and administrative guidance thereunder (“Section 409A”), and any terms not permitted under Section 409A shall be automatically modified and limited to the extent necessary to conform with Section 409A, but only to the extent such modification or limitation is permitted under Section 409A. |
3. | NON-COMPETITION AND NON-SOLICITATION AGREEMENT AND COMPANY RIGHT TO INJUNCTIVE RELIEF, DAMAGES, RECISSION, FORFEITURE AND OTHER REMEDIES |
(a) | Confidentiality Obligations and Agreement. By accepting this Award Agreement, you agree and/or reaffirm the terms of all agreements related to treatment of Confidential Information that you signed at the inception of or during your employment, the terms of which are incorporated herein by reference. This includes, but is not limited to, use or disclosure of any BMS Confidential Information, Proprietary Information, or Trade Secrets to third parties. Confidential Information, Proprietary Information, and Trade secrets include, but are not limited to, any information gained in the course of your employment with the Company that is marked as confidential or could reasonably be expected to harm the Company if disclosed to third parties, including without limitation, any information that could reasonably be expected to aid a competitor or potential competitor in making inferences regarding the nature of the Company’s business activities, where such inferences could reasonably be expected to allow such competitor to compete more effectively with the Company. You agree that you will not remove or disclose Company Confidential Information, Proprietary Information or Trade Secrets. Unauthorized removal includes forwarding or downloading confidential information to personal email or other electronic media and/or copying the information to personal unencrypted thumb drives, cloud storage or drop box. Immediately upon termination of your employment for any reason, you will return to the Company all of the Company’s confidential and other business materials that you have or that are in your possession or control and all copies thereof, including all tangible embodiments thereof, whether in hard copy or electronic format and you shall not retain any versions thereof on any personal computer or any other media (e.g., flash drives, thumb drives, external hard drives and the like). Nothing in this paragraph or Agreement limits or prohibits your right to report potential violations of law , rules, or regulations to, or communicate with, cooperate with, testify before, or otherwise assist in an investigation or proceeding by, any government agency or entity, or engage in any other conduct that is required or protected by law or regulation, and you are not required to obtain the prior authorization of the Company to do so and are not required to notify the Company that you have done so. |
(b) | Inventions. To the extent permitted by local law, you agree and/or reaffirm the terms of all agreements related to inventions that you signed at the inception of or during your employment, and agree to promptly disclose and assign to the Company all of your interest in any and all inventions, discoveries, improvements and business or marketing concepts related to the current or contemplated business or activities of the Company, and which are conceived or made by you, either alone or in conjunction with others, at any time or place during the period you are employed by the Company. Upon request of the Company, including after your termination, you agree to execute, at the Company’s expense, any and all applications, assignments, or other documents which the Company shall determine necessary to apply for and obtain letters patent to protect the Company’s interest in such inventions, discoveries, and improvements and to cooperate in good faith in any legal proceedings to protect the Company’s intellectual property. |
(c) | Non-Competition, Non-Solicitation and Related Covenants. By accepting this Agreement, you agree to the restrictive covenants outlined in this section unless expressly prohibited by local law or as follows: The post-termination non-compete restrictions outlined in subparagraphs (i), (ii) and (v) of this Section 3(c) do not apply to employees who are, at the time of termination from employment by BMS, assigned to work for BMS resident full-time in the States of California or North Dakota, except that should said employee accept employment outside of California or North Dakota, all restrictions in Section 3(c), including, but not limited to, those pertaining to post-termination activities, shall be fully enforceable. There are no exemptions for any Award recipients (including employee residents of the States of California and North Dakota) regarding non-compete provisions while employed at the Company or from subparagraphs (iii), (iv) and (vi) of this Section 3(c) during the entire Non-Competition and Non-Solicitation Period. |
(i) | during the Non-Competition and Non-Solicitation Period (as defined below), own or have any financial interest in a Competitive Business (as defined below), except that nothing in this clause shall prevent you from owning one per cent or less of the outstanding securities of any entity whose securities are traded on a U.S. national securities exchange (including NASDAQ) or an equivalent foreign exchange; |
(ii) | during the Non-Competition and Non-Solicitation Period, whether or not for compensation, either on your own behalf or as an employee, officer, agent, consultant, director, owner, partner, joint venturer, shareholder, investor, or in any other capacity, be actively connected with a Competitive Business or otherwise advise or assist a Competitive Business with regard to any product, investigational compound, technology, service, line of business, department or business unit that competes with any product, technology, service, line of business, department or business unit with which you worked or about which you became familiar as a result of your employment with the Company or a subsidiary of the Company. Notwithstanding the foregoing, after your employment with the Company or a subsidiary of the Company terminates for any reason, you may be affiliated with a Competitive Business provided that your affiliation does not involve any product, investigational compound, technology or service, that competes with any product, investigational compound, technology or service with which you were involved within the last twelve months of your employment with the Company or a subsidiary of the Company, including any product, investigational compound, technology or service which the Company is developing and of which you had knowledge, and you and the Competing Business provide the Company written assurances of this fact prior to your commencing such affiliation; |
(iii) | during the Non-Competition and Non-Solicitation Period, employ, solicit for employment, solicit, induce, encourage, or participate in soliciting, inducing or encouraging any Company employee who is employed by the Company or who was employed by the Company within the twelve months preceding the termination of your employment with the Company for any reason, to terminate or reduce his or her or its relationship with the Company or any of its affiliates, successors or assigns (the “Related Parties”); |
(iv) | during the Non-Competition and Non-Solicitation Period, solicit, induce, encourage, or appropriate or attempt to solicit, divert or appropriate, by use of Confidential Information or otherwise, any existing or prospective customer, vendor or supplier of the Company or any Related Parties to terminate, cancel or otherwise reduce its relationship with the Company or any Related Parties; |
(v) | during the Non-Competition and Non-Solicitation Period, contact, call upon or solicit any existing customer of the Company or its Related Parties, or prospective customer of the Company or its Related Parties, that you became aware of or was introduced to in the course of your duties for the Company or its Related Parties, or otherwise divert or take away from the Company or its Related Parties the business of any current or prospective customer of the Company or its Related Parties; or |
(vi) | during the Non-Competition and Non-Solicitation Period, engage in any activity that is harmful to the interests of the Company or its Related Parties, including, without limitation, any conduct during the term of your employment that violates the Company’s Standards of Business Conduct and Ethics, securities trading policy and other policies. |
(d) | Rescission, Forfeiture and Other Remedies. If the Company determines that you have violated any applicable provisions of Section 3(c) above during the Non-Competition and Non-Solicitation Period, in addition to injunctive relief and damages, you agree and covenant that: |
(i) | any unvested portion of the RSUs shall be immediately rescinded; |
(ii) | you shall automatically forfeit any rights you may have with respect to the RSUs as of the date of such determination; |
(iii) | if any part of the RSUs vests within the twelve-month period immediately preceding a violation of Section 3(c) above (or following the date of any such violation), upon the Company’s demand, you shall immediately deliver to it a certificate or certificates for shares of the Company’s Common Stock that you acquired upon settlement of such RSUs (or an equivalent number of other shares); and |
(iv) | the foregoing remedies set forth in this Section 3(d) shall not be the Company’s exclusive remedies. The Company reserves all other rights and remedies available to it at law or in equity. |
(e) | Definitions. For purposes of this Agreement, the following definitions shall apply: |
(i) | “Competitive Business” means any business that is engaged in or is about to become engaged in the development, production or sale of any product, process or service concerning the treatment of any disease, which product, process or service resembles or competes with any product, process or service that was sold by, or in development at, the Company or a subsidiary of the Company during your employment with the Company or a subsidiary of the Company. |
(ii) | Because of the global nature of the Company’s business, it is agreed that the restrictions set forth above shall apply in the “Restricted Area,” defined as including without limitation the continent, country and the geographic regions where you worked in and were responsible for while employed by the Company or a subsidiary of the Company, and any other geographic area (country, province, state, city or other political subdivision) in which the Company or a subsidiary of the Company is engaged in business and/or is otherwise selling products or services at the time you ceased working for the Company or a subsidiary of the Company; |
(A) | provided, however, that if a court of competent jurisdiction or other authority determines the foregoing geographic scope is unenforceable, the “Restricted Area” shall be defined as the continent, country and the geographic regions where you worked and were responsible for while employed by the Company or a subsidiary of the Company; |
(B) | provided, however, that if a court of competent jurisdiction or other authority determines that the foregoing geographic scope is unenforceable, the “Restricted Area” shall be defined as the country in which you worked; |
(C) | provided, however, that if a court of competent jurisdiction or other authority determines that the foregoing geographic scope is unenforceable, the “Restricted Area” shall be defined as the geographic regions that you serviced and were responsible for while employed by the Company or a subsidiary of the Company. |
(iii) | The “Non-Competition and Non-Solicitation Period” shall be the period during which Employee is employed by the Company or a subsidiary of the Company and twelve (12) months after the end of Employee’s term of employment with and/or work for the Company or a subsidiary of the Company for any reason, (e.g., restriction applies regardless of the reason for termination and includes voluntary and involuntary termination) (hereinafter “Termination Date”); |
(A) | provided, however, that if a court of competent jurisdiction or other authority determines that such period is unenforceable, the “Non-Competition and Non-Solicitation Period” shall be the period of your employment and an additional eleven (11) months after your employment Termination Date with the Company or a subsidiary of the Company for any reason; |
(B) | provided, however, that if a court of competent jurisdiction or other authority determines that such period is unenforceable, the “Non-Competition and Non-Solicitation Period” shall be the period of your employment and an additional ten (10) months after your employment Termination Date with the Company or a subsidiary of the Company for any reason; |
(C) | provided further, in the event that the Company or a subsidiary of the Company files an action to enforce rights arising out of this Agreement, the Non-Competition and Non-Solicitation Period shall be extended for all periods of time in which you are determined by the Court or other authority to have been in violation of the provisions of Section 3(c). |
(f) | Severability. You acknowledge and agree that the period, scope and geographic areas of restriction imposed upon you by this Section 3 are fair and reasonable and are reasonably required for the protection of the Company. In case any one or more of the provisions contained in this Agreement should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions will not in any way be affected or impaired and this Agreement shall nevertheless continue to be valid and enforceable as though the invalid provisions were not part of this Agreement. If the final judgment of a court of competent jurisdiction or other authority declares that any term or provision hereof is invalid, illegal or unenforceable, the parties agree that the court making such determination shall have the power to reduce the scope, duration, area or applicability of the term or provision, to delete specific words or phrases, or to replace any invalid, illegal or unenforceable term or provision with a term or provision that is valid, legal and enforceable to the maximum extent permissible under law and that comes closest to expressing the intention of the invalid, illegal or unenforceable term or provision. You acknowledge and agree that your covenants under this Agreement are ancillary to your employment relationship with the Company or a subsidiary of the Company, but shall be independent of any other contractual relationship between you and the Company or a subsidiary of the Company. Consequently, the existence of any claim or cause of action that you may have against the Company or a subsidiary of the Company shall not constitute a defense to the enforcement of this Agreement by the Company or a subsidiary of the Company, nor an excuse for noncompliance with this Agreement. |
(g) | Additional Remedies. You acknowledge and agree that any violation by you of this paragraph will cause irreparable harm to the Company and its Related Parties and the Company cannot be adequately compensated for such violation by damages. Accordingly, if you violate or threaten to violate this Agreement, then, in addition to any other rights or remedies that the Company may have in law or in equity, the Company shall be entitled, without the posting of a bond or other security, to obtain an injunction to stop or prevent such violation, including but not limited to obtaining a temporary or preliminary injunction from a Delaware court pursuant to Section 1(a) of the Mutual Arbitration Agreement and Section 14 of this |
(h) | Binding Obligations. These obligations shall be binding both upon you, your assigns, executors, administrators and legal representatives. At the inception of or during the course of your employment, you may have executed agreements that contain similar terms. Those agreements remain in full force and effect. In the event that there is a conflict between the terms of those agreements and this Agreement, this Agreement will control. |
(i) | Enforcement. The Company retains discretion regarding whether or not to enforce the terms of the covenants contained in this Section 3 and its decision not to do so in your instance or anyone’s case shall not be considered a waiver of the Company’s right to do so. |
(j) | Duty to Notify. During your employment with the Company and for a period of 12 months after your termination of employment from the Company, you shall communicate your obligations under this Agreement to each subsequent employer. In addition, you shall advise the Company of the name and address of your intended future employer, including the title of the position accepted with the subsequent employer. While employed at the Company, you are required to provide this information immediately upon acceptance of a position with a new employer. Once terminated from the Company, upon resignation from any subsequent employer. The Company shall have the right to advise any subsequent employer of your obligations hereunder. |
(a) | withholding from your wages or other cash compensation paid to you by the Company and/or the Employer; or |
(b) | withholding from proceeds of the sale of shares of Common Stock acquired upon settlement of the RSUs either through a voluntary sale or through a mandatory sale arranged by the Company (on your behalf pursuant to this authorization without further consent); or |
(c) | withholding in shares of Common Stock to be issued upon settlement of the RSUs; |
(a) | Dividends or dividend equivalents are not paid, accrued or accumulated on RSUs during the Restricted Period, except as provided in Section 5(b). |
(b) | The number of your RSUs and/or other related terms shall be appropriately adjusted, in order to prevent dilution or enlargement of your rights with respect to RSUs, to reflect any changes in the outstanding shares of Common Stock resulting from any event referred to in Plan Section 11(c) or any other “equity restructuring” as defined in FASB ASC Topic 718. |
(a) | The Plan is established voluntarily by the Company, it is discretionary in nature and may be modified, amended, suspended or terminated by the Company at any time, to the extent permitted by the Plan; |
(b) | The Award of RSUs is voluntary and occasional and does not create any contractual or other right to receive future awards of RSUs, or benefits in lieu of RSUs even if RSUs have been awarded in the past; |
(c) | All decisions with respect to future awards of RSUs or other awards, if any, will be at the sole discretion of the Company; |
(d) | Your participation in the Plan is voluntary; |
(e) | The RSUs and the Common Stock subject to the RSUs are not intended to replace any pension rights or compensation; |
(f) | Unless otherwise agreed with the Company, the RSUs and the shares of Common Stock subject to the RSUs, and the income and value of the same, are not granted as consideration for, or in connection with, the service you may provide as a director of a subsidiary or an affiliate of the Company; |
(g) | The future value of the underlying shares of Common Stock is unknown, indeterminable and cannot be predicted with certainty; |
(h) | No claim or entitlement to compensation or damages arises from the forfeiture of RSUs, resulting from termination of your employment or other service relationship with the Company, or any of its subsidiaries or affiliates or the Employer (for any reason whatsoever and whether or not later found to be invalid or in breach of employment laws in the jurisdiction where you are employed or the terms of your employment agreement, if any), and in consideration of the grant of the RSUs to which you are otherwise not entitled, you irrevocably agree never to institute any claim against the Company, any of its subsidiaries or affiliates or the Employer, waive your ability, if any, to bring such claim, and release the Company, |
(i) | Unless otherwise provided in the Plan or by the Company in its discretion, the RSUs and the benefits evidenced by this Agreement do not create any entitlement to have the RSUs or any such benefits transferred to, or assumed by, another company nor to be exchanged, cashed out or substituted for, in connection with any corporate transaction affecting the shares of the Company; and |
(j) | The following provisions apply only if you are providing services outside the United States: (i) the Award and the shares of Common Stock subject to the RSUs are not part of normal or expected compensation or salary for any purpose; and (ii) neither the Company, the Employer nor any subsidiary or affiliate of the Company shall be liable for any foreign exchange rate fluctuation between your local currency and the United States Dollar that may affect the value of the RSUs or of any amounts due to you pursuant to the settlement of the RSUs or the subsequent sale of any shares of Common Stock acquired upon settlement. |
For the Company | ||
Bristol-Myers Squibb Company | ||
By |
(a) | Nontransferability. During the Restricted Period and any further period prior to settlement of your RSUs, you may not sell, transfer, pledge or assign any of the RSUs or your rights relating thereto. If you attempt to assign your rights under this Agreement in violation of the provisions herein, the Company’s obligation to settle RSUs or otherwise make payments shall terminate. |
(b) | Time of Settlement. RSUs shall be settled promptly upon expiration of the Restricted Period without forfeiture of the RSUs (i.e., upon vesting), but in any event within 60 days after expiration of the Restricted Period, by delivery of one share of Common Stock for each RSU being settled, or, at the discretion of the Company, the cash equivalent thereof; provided, however, that settlement of an RSU shall be subject to Plan Section 11(k), including if applicable the six-month delay rule in Plan Sections 11(k)(i)(C)(2) and 11(k)(i)(G); provided further, that no dividend or dividend equivalents will be paid, accrued or accumulated in respect of the period during which settlement was delayed. (Note: This rule may apply to any portion of the RSUs that vest after the time you become Retirement eligible under the Plan, and could apply in other cases as well). Settlement of RSUs which directly or indirectly result from adjustments to RSUs shall occur at the time of settlement of, and subject to the restrictions and conditions that apply to, the granted RSUs. Settlement of cash amounts which directly or indirectly result from adjustments to RSUs shall be included as part of your regular payroll payment as soon as administratively practicable after the settlement date for the underlying RSUs, and subject to the restrictions and conditions that apply to, the granted RSUs. Until shares are delivered to you in settlement of RSUs, you shall have none of the rights of a stockholder of the Company with respect to the shares issuable in settlement of the RSUs, including the right to vote the shares and receive actual dividends and other distributions on the underlying shares of Common Stock. Shares of stock issuable in settlement of RSUs shall be delivered to you upon settlement in certificated form or in such other manner as the Company may reasonably determine. At that time, you will have all of the rights of a stockholder of the Company. |
(c) | Retirement and Death. In the event of your Retirement (as that term is defined in the Plan; however, if you attain age 65 before Retirement, 100% of your RSUs held for at least one year will have vested prior to Retirement) or your death while employed by the Company prior to the end of the Restricted Period, you, or your estate, shall be deemed vested and entitled to settlement of (i.e., the Restricted Period shall expire with respect to) a proportionate number of the total number of RSUs granted (taking into account RSUs previously vested), provided that you have been continuously employed by the Company or a subsidiary of the Company for at least one year following the Award Date and your employment has not been terminated by the Company or a subsidiary of the Company for misconduct or other conduct deemed detrimental to the interests of the Company or a subsidiary of the Company. If you are only eligible for Retirement pursuant to Plan Section 2(x)(iii), and you are employed in the United States or Puerto Rico at the time of your Retirement, you shall be entitled to the pro rata vesting described in this Section 2(c) only if you execute and do not revoke a release in favor of the Company and its predecessors, successors, affiliates, subsidiaries, directors and employees in a form satisfactory to the Company; if you fail to execute or revoke the release, or your release fails to become effective and irrevocable within 60 days of the date your employment terminates, you shall forfeit any RSUs that are unvested as of the date your employment terminates. The formula for determining the proportionate number of your RSUs to become vested and non-forfeitable upon your Retirement or death is available by request from the Office of the Corporate Secretary at 345 Park Avenue, New York, New York 10154. RSUs that become vested and nonforfeitable under this Section 2(c) shall be distributed in accordance with Section 2(b) (i.e., within 60 days of the date of your death or Retirement). In the event of your becoming vested hereunder on account of death, or in the event of your death subsequent to your Retirement hereunder and prior to the delivery of shares in settlement of RSUs (not previously forfeited), shares in settlement of your RSUs shall be delivered to your estate, upon presentation to the Committee of letters testamentary or other documentation satisfactory to the Committee, and your estate shall succeed to any other rights provided hereunder in the event of your death. |
(d) | Termination not for Misconduct/Detrimental Conduct. In the event your employment is terminated by the Company or a subsidiary of the Company for reasons other than misconduct or other conduct deemed detrimental to the interests of the Company or a subsidiary of the Company, and you are not eligible for Retirement, you shall be entitled to settlement of (i.e., the Restricted Period shall expire with respect to) a proportionate number of the total number of RSUs granted (taking into account RSUs previously vested), provided that you have been continuously employed by the Company or a subsidiary of the Company for at least one year following the Award Date. If you are not eligible for Retirement, and you are employed in the United States or Puerto Rico at the time of your termination, you shall be entitled to the pro rata vesting described in this Section 2(d) only if you execute and do not revoke a release in favor of the Company and its predecessors, successors, affiliates, subsidiaries, directors and employees in a form satisfactory to the Company; if you fail to execute or revoke the release, or your release fails to become effective and irrevocable within 60 days of the date your employment terminates, you shall forfeit any RSUs that are unvested as of the date your employment terminates. The formula for determining the proportionate number of RSUs you are entitled to under this Section 2(d) is available by request from the Office of the Corporate Secretary at 345 Park Avenue, New York, New York 10154. |
(e) | Disability. In the event you become Disabled (as that term is defined below), for the period during which you continue to be deemed to be employed by the Company or a subsidiary (i.e., the period during which you receive Disability benefits), you will not be deemed to have terminated employment for purposes of the RSUs. However, no period of continued Disability shall continue beyond 29 months for purposes of the RSUs, at which time you will have considered to have separated from service in accordance with applicable laws as more fully provided for herein. Upon the termination of your receipt of Disability benefits, (i) you will not be deemed to have terminated employment if you return to employment status, and (ii) if you do not return to employment status or are considered to have separated from service as noted above, you will be deemed to have terminated employment at the date of cessation of payments to you under all disability pay plans of the Company and its subsidiaries (unless you are on an approved leave of absence per Section (i) herein), with such termination treated for purposes of the RSUs as a Retirement or death (as detailed in Section 2(c) herein), or voluntary termination (as detailed in Section 2(g) herein) based on your circumstances at the time of such termination. For purposes of this Agreement, “Disability” or “Disabled” shall mean qualifying for and receiving payments under a disability plan of the Company or any subsidiary or affiliate either in the United States or in a jurisdiction outside of the United States, and in jurisdictions outside of the United States shall also include qualifying for and receiving payments under a mandatory or universal disability plan or program managed or maintained by the government. |
(f) | Qualifying Termination Following Change in Control. In the event your employment is terminated by reason of a Qualifying Termination during the Protected Period following a Change in Control, the Restricted Period and all remaining restrictions shall expire and the RSUs shall be deemed fully vested. |
(g) | Other Termination of Employment. In the event of your voluntary termination (subject to Section 2(c)), or termination by the Company or a subsidiary for misconduct or other conduct deemed by the Company to be detrimental to the interests of the Company or a subsidiary of the Company, you shall forfeit all unvested RSUs on the date of termination. |
(h) | Other Terms. |
(i) | In the event that you fail promptly to pay or make satisfactory arrangements as to the Tax-Related Items as provided in Section 4, all RSUs subject to restriction shall be forfeited by you and shall be deemed to be reacquired by the Company. |
(ii) | You may, at any time prior to the expiration of the Restricted Period, waive all rights with respect to all or some of the RSUs by delivering to the Company a written notice of such waiver. |
(iii) | Termination of employment includes any event if immediately thereafter you are no longer an employee of the Company or any subsidiary of the Company, subject to Section 2(i) hereof. References in this Section 2 to employment by the Company include employment by a subsidiary of the Company. Termination of employment means an event after which you are no longer employed by the Company or any subsidiary of the Company. Such an event could include the disposition of a subsidiary or business unit by the Company or a subsidiary. |
(iv) | Upon any termination of your employment, any RSUs as to which the Restricted Period has not expired at or before such termination shall be forfeited, subject to Sections 2(c)-(f) hereof. Other provisions of this Agreement notwithstanding, in no event will an RSU that has been forfeited thereafter vest or be settled. |
(v) | In the event of termination of your employment or other service relationship (for any reason whatsoever, whether or not later found to be invalid or in breach of employment laws in the jurisdiction where you are employed or the terms of your employment agreement, if any), unless otherwise provided in this Agreement or determined by the Company, your right to vest in the RSUs under the Plan, if any, will terminate effective as of the date that you are no longer actively providing services and will not be extended by any notice period (e.g., active services would not include any contractual notice period or any period of "garden leave" or similar period mandated under employment laws in the jurisdiction where you are employed or the terms of your employment agreement, if any); the Company shall have the exclusive discretion to determine when you are no longer actively providing services for purposes of your RSUs (including whether you may still be considered to be providing services while on a leave of absence). |
(vi) | You agree that the Company may recover any incentive-based compensation received by you under this Agreement if such recovery is pursuant to a clawback or recoupment policy approved by the Committee, even if approved subsequent to the date of this Agreement. |
(i) | The following events shall not be deemed a termination of employment: |
(i) | A transfer of you from the Company to a subsidiary, or vice versa, or from one subsidiary to another; and |
(ii) | A leave of absence from which you return to active service for any purpose approved by the Company or a subsidiary in writing. |
(j) | As more fully provided for in the Plan, notwithstanding any provision herein, in any Award or in the Plan to the contrary, the terms of any Award shall be limited to those terms permitted under Code Section 409A including all applicable regulations and administrative guidance thereunder (“Section 409A”), and any terms not permitted under Section 409A shall be automatically modified and limited to the extent necessary to conform with Section 409A, but only to the extent such modification or limitation is permitted under Section 409A. |
3. | NON-COMPETITION AND NON-SOLICITATION AGREEMENT AND COMPANY RIGHT TO INJUNCTIVE RELIEF, DAMAGES, RECISSION, FORFEITURE AND OTHER REMEDIES |
(a) | Confidentiality Obligations and Agreement. By accepting this Award Agreement, you agree and/or reaffirm the terms of all agreements related to treatment of Confidential Information that you signed at the inception of or during your employment, the terms of which are incorporated herein by reference. This includes, but is not limited to, use or disclosure of any BMS Confidential Information, Proprietary Information, or Trade Secrets to third parties. Confidential Information, Proprietary Information, and Trade secrets include, but are not limited to, any information gained in the course of your employment with the Company that is marked as confidential or could reasonably be expected to harm the Company if disclosed to third parties, including without limitation, any information that could reasonably be expected to aid a competitor or potential competitor in making inferences regarding the nature of the Company’s business activities, where such inferences could reasonably be expected to allow such competitor to compete more effectively with the Company. You agree that you will not remove or disclose Company Confidential Information, Proprietary Information or Trade Secrets. Unauthorized removal includes forwarding or downloading confidential information to personal email or other electronic media and/or copying the information to personal unencrypted thumb drives, cloud storage or drop box. Immediately upon termination of your employment for any reason, you will return to the Company all of the Company’s confidential and other business materials that you have or that are in your possession or control and all copies thereof, including all tangible embodiments thereof, whether in hard copy or electronic format and you shall not retain any versions thereof on any personal computer or any other media (e.g., flash drives, thumb drives, external hard drives and the like). Nothing in this paragraph or Agreement limits or prohibits your right to report potential violations of law , rules, or regulations to, or communicate with, cooperate with, testify before, or otherwise assist in an investigation or proceeding by, any government agency or entity, or engage in any other conduct that is required or protected by law or regulation, and you are not required to obtain the prior authorization of the Company to do so and are not required to notify the Company that you have done so. |
(b) | Inventions. To the extent permitted by local law, you agree and/or reaffirm the terms of all agreements related to inventions that you signed at the inception of or during your employment, and agree to promptly disclose and assign to the Company all of your interest in any and all inventions, discoveries, improvements and business or marketing concepts related to the current or contemplated business or activities of the Company, and which are conceived or made by you, either alone or in conjunction with others, at any time or place during the period you are employed by the Company. Upon request of the Company, including after your termination, you agree to execute, at the Company’s expense, any and all applications, assignments, or other documents which the Company shall determine necessary to apply for and obtain letters patent to protect the Company’s interest in such inventions, discoveries, and improvements and to cooperate in good faith in any legal proceedings to protect the Company’s intellectual property. |
(c) | Non-Competition, Non-Solicitation and Related Covenants. By accepting this Agreement, you agree to the restrictive covenants outlined in this section unless expressly prohibited by local law or as follows: The post-termination non-compete restrictions outlined in subparagraphs (i), (ii) and (v) of this Section 3(c) do not apply to employees who are, at the time of termination from employment by BMS, assigned to work for BMS resident full-time in the States of California or North Dakota, except that, should said employee accept employment outside California or North Dakota, all restrictions in Section 3(c), including, but not limited to, those pertaining to post-termination activities, shall be fully enforceable. There are no exemptions for any Award recipients (including employee residents of the States of California and North Dakota) regarding non-compete provisions while employed at the Company or from subparagraphs (iii), (iv) and (vi) of this Section 3(c) during the entire Non-Competition and Non-Solicitation Period. |
(i) | during the Non-Competition and Non-Solicitation Period (as defined below), own or have any financial interest in a Competitive Business (as defined below), except that nothing in this clause shall prevent you from owning one per cent or less of the outstanding securities of any entity whose securities are traded on a U.S. national securities exchange (including NASDAQ) or an equivalent foreign exchange; |
(ii) | during the Non-Competition and Non-Solicitation Period, whether or not for compensation, either on your own behalf or as an employee, officer, agent, consultant, director, owner, partner, joint venturer, shareholder, investor, or in any other capacity, be actively connected with a Competitive Business or otherwise advise or assist a Competitive Business with regard to any product, investigational compound, technology, service, line of business, department or business unit that competes with any product, technology, service, line of business, department or business unit with which you worked or about which you became familiar as a result of your employment with the Company or a subsidiary of the Company. Notwithstanding the foregoing, after your employment with the Company or a subsidiary of the Company terminates for any reason, you may be affiliated with a Competitive Business provided that your affiliation does not involve any product, investigational compound, technology or service, that competes with any product, investigational compound, technology or service with which you were involved within the last twelve months of your employment with the Company or a subsidiary of the Company, including any product, investigational compound, technology or service which the Company is developing and of which you had knowledge, and you and the Competing Business provide the Company written assurances of this fact prior to your commencing such affiliation; |
(iii) | during the Non-Competition and Non-Solicitation Period, employ, solicit for employment, solicit, induce, encourage, or participate in soliciting, inducing or encouraging any Company employee who is employed by the Company or who was employed by the Company within the twelve months preceding the termination of your employment with the Company for any reason, to terminate or reduce his or her or its relationship with the Company or any of its affiliates, successors or assigns (the “Related Parties”); |
(iv) | during the Non-Competition and Non-Solicitation Period, solicit, induce, encourage, or appropriate or attempt to solicit, divert or appropriate, by use of Confidential Information or otherwise, any existing or prospective customer, vendor or supplier of the Company or any Related Parties to terminate, cancel or otherwise reduce its relationship with the Company or any Related Parties; |
(v) | during the Non-Competition and Non-Solicitation Period, contact, call upon or solicit any existing customer of the Company or its Related Parties, or prospective customer of the Company or its Related Parties, that you became aware of or was introduced to in the course of your duties for the Company or its Related Parties, or otherwise divert or take away from the Company or its Related Parties the business of any current or prospective customer of the Company or its Related Parties; or |
(vi) | during the Non-Competition and Non-Solicitation Period, engage in any activity that is harmful to the interests of the Company or its Related Parties, including, without limitation, any conduct during the term of your employment that violates the Company’s Standards of Business Conduct and Ethics, securities trading policy and other policies. |
(d) | Rescission, Forfeiture and Other Remedies. If the Company determines that you have violated any applicable provisions of Section 3(c) above during the Non-Competition and Non-Solicitation Period, in addition to injunctive relief and damages, you agree and covenant that: |
(i) | any unvested portion of the RSUs shall be immediately rescinded; |
(ii) | you shall automatically forfeit any rights you may have with respect to the RSUs as of the date of such determination; |
(iii) | if any part of the RSUs vests within the twelve-month period immediately preceding a violation of Section 3(c) above (or following the date of any such violation), upon the Company’s demand, you shall immediately deliver to it a certificate or certificates for shares of the Company’s Common Stock that you acquired upon settlement of such RSUs (or an equivalent number of other shares); and |
(iv) | the foregoing remedies set forth in this Section 3(d) shall not be the Company’s exclusive remedies. The Company reserves all other rights and remedies available to it at law or in equity. |
(e) | Definitions. For purposes of this Agreement, the following definitions shall apply: |
(i) | “Competitive Business” means any business that is engaged in or is about to become engaged in the development, production or sale of any product, process or service concerning the treatment of any disease, which product, process or service resembles or competes with any product, process or service that was sold by, or in development at, the Company or a subsidiary of the Company during your employment with the Company or a subsidiary of the Company. |
(ii) | Because of the global nature of the Company’s business, it is agreed that the restrictions set forth above shall apply in the “Restricted Area,” defined as including without limitation the continent, country and the geographic regions where you worked in and were responsible for while employed by the Company or a subsidiary of the Company, and any other geographic area (country, province, state, city or other political subdivision) in which the Company or a subsidiary of the Company is engaged in business and/or is otherwise selling products or services at the time you ceased working for the Company or a subsidiary of the Company; |
(A) | provided, however, that if a court of competent jurisdiction or other authority determines the foregoing geographic scope is unenforceable, the “Restricted Area” shall be defined as the continent, country and the geographic regions where you worked and were responsible for while employed by the Company or a subsidiary of the Company; |
(B) | provided, however, that if a court of competent jurisdiction or other authority determines that the foregoing geographic scope is unenforceable, the “Restricted Area” shall be defined as the country in which you worked; |
(C) | provided, however, that if a court of competent jurisdiction or other authority determines that the foregoing geographic scope is unenforceable, the “Restricted Area” shall be defined as the geographic regions that you serviced and were responsible for while employed by the Company or a subsidiary of the Company. |
(iii) | The “Non-Competition and Non-Solicitation Period” shall be the period during which Employee is employed by the Company or a subsidiary of the Company and twelve (12) months after the end of Employee’s term of employment with and/or work for the Company or a subsidiary of the Company for any reason, (e.g., restriction applies regardless of the reason for termination and includes voluntary and involuntary termination) (hereinafter “Termination Date”); |
(A) | provided, however, that if a court of competent jurisdiction or other authority determines that such period is unenforceable, the “Non-Competition and Non-Solicitation Period” shall be the period of your employment and an additional eleven (11) months after your employment Termination Date with the Company or a subsidiary of the Company for any reason; |
(B) | provided, however, that if a court of competent jurisdiction or other authority determines that such period is unenforceable, the “Non-Competition and Non-Solicitation Period” shall be the period of your employment and an additional ten (10) months after your employment Termination Date with the Company or a subsidiary of the Company for any reason; |
(C) | provided further, in the event that the Company or a subsidiary of the Company files an action to enforce rights arising out of this Agreement, the Non-Competition and Non-Solicitation Period shall be extended for all periods of time in which you are determined by the Court or other authority to have been in violation of the provisions of Section 3(c). |
(f) | Severability. You acknowledge and agree that the period, scope and geographic areas of restriction imposed upon you by this Section 3 are fair and reasonable and are reasonably required for the protection of the Company. In case any one or more of the provisions contained in this Agreement should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions will not in any way be affected or impaired and this Agreement shall nevertheless continue to be valid and enforceable as though the invalid provisions were not part of this Agreement. If the final judgment of a court of competent jurisdiction or other authority declares that any term or provision hereof is invalid, illegal or unenforceable, the parties agree that the court making such determination shall have the power to reduce the scope, duration, area or applicability of the term or provision, to delete specific words or phrases, or to replace any invalid, illegal or unenforceable term or provision with a term or provision that is valid, legal and enforceable to the maximum extent permissible under law and that comes closest to expressing the intention of the invalid, illegal or unenforceable term or provision. You acknowledge and agree that your covenants under this Agreement are ancillary to your employment relationship with the Company or a subsidiary of the Company, but shall be independent of any other contractual relationship between you and the Company or a subsidiary of the Company. Consequently, the existence of any claim or cause of action that you may have against the Company or a subsidiary of the Company shall not constitute a defense to the enforcement of this Agreement by the Company or a subsidiary of the Company, nor an excuse for noncompliance with this Agreement. |
(g) | Additional Remedies. You acknowledge and agree that any violation by you of this paragraph will cause irreparable harm to the Company and its Related Parties and the Company cannot be adequately compensated for such violation by damages. Accordingly, if you violate or threaten to violate this Agreement, then, in addition to any other rights or remedies that the Company may have in law or in equity, the Company shall be entitled, without the posting of a bond or other security, to obtain an injunction to stop or prevent such violation, including but not limited to obtaining a temporary or preliminary injunction from a Delaware court pursuant Section 1(a) of the Mutual Arbitration Agreement and Section 14 of this Agreement. You further agree that if the Company incurs legal fees or costs in enforcing this Agreement, you will reimburse the Company for such fees and costs. |
(h) | Binding Obligations. These obligations shall be binding both upon you, your assigns, executors, administrators and legal representatives. At the inception of or during the course of your employment, you may have executed agreements that contain similar terms. Those agreements remain in full force and effect. In the event that there is a conflict between the terms of those agreements and this Agreement, this Agreement will control. |
(i) | Enforcement. The Company retains discretion regarding whether or not to enforce the terms of the covenants contained in this Section 3 and its decision not to do so in your instance or anyone’s case shall not be considered a waiver of the Company’s right to do so. |
(j) | Duty to Notify. During your employment with the Company and for a period of 12 months after your termination of employment from the Company, you shall communicate your obligations under this Agreement to each subsequent employer. In addition, you shall advise the Company of the name and address of your intended future employer, including the title of the position accepted with the subsequent employer. While employed at the Company, you are required to provide this information immediately upon acceptance of a position with a new employer. Once terminated from the Company, upon resignation from any subsequent employer. The Company shall have the right to advise any subsequent employer of your obligations hereunder. |
(a) | withholding from your wages or other cash compensation paid to you by the Company and/or the Employer; or |
(b) | withholding from proceeds of the sale of shares of Common Stock acquired upon settlement of the RSUs either through a voluntary sale or through a mandatory sale arranged by the Company (on your behalf pursuant to this authorization without further consent); or |
(c) | withholding in shares of Common Stock to be issued upon settlement of the RSUs; |
(a) | Dividends or dividend equivalents are not paid, accrued or accumulated on RSUs during the Restricted Period, except as provided in Section 5(b). |
(b) | The number of your RSUs and/or other related terms shall be appropriately adjusted, in order to prevent dilution or enlargement of your rights with respect to RSUs, to reflect any changes in the outstanding shares of Common Stock resulting from any event referred to in Plan Section 11(c) or any other “equity restructuring” as defined in FASB ASC Topic 718. |
(a) | The Plan is established voluntarily by the Company, it is discretionary in nature and may be modified, amended, suspended or terminated by the Company at any time, to the extent permitted by the Plan; |
(b) | The Award of RSUs is voluntary and occasional and does not create any contractual or other right to receive future awards of RSUs, or benefits in lieu of RSUs even if RSUs have been awarded in the past; |
(c) | All decisions with respect to future awards of RSUs or other awards, if any, will be at the sole discretion of the Company; |
(d) | Your participation in the Plan is voluntary; |
(e) | The RSUs and the Common Stock subject to the RSUs are not intended to replace any pension rights or compensation; |
(f) | Unless otherwise agreed with the Company, the RSUs and the shares of Common Stock subject to the RSUs, and the income and value of the same, are not granted as consideration for, or in connection with, the service you may provide as a director of a subsidiary or an affiliate of the Company; |
(g) | The future value of the underlying shares of Common Stock is unknown, indeterminable and cannot be predicted with certainty; |
(h) | No claim or entitlement to compensation or damages arises from the forfeiture of RSUs, resulting from termination of your employment or other service relationship with the Company, or any of its subsidiaries or affiliates or the Employer (for any reason whatsoever and whether or not later found to be invalid or in breach of employment laws in the jurisdiction where you are employed or the terms of your employment agreement, if any), and in consideration of the grant of the RSUs to which you are otherwise not entitled, you irrevocably agree never to institute any claim against the Company, any of its subsidiaries or affiliates or the Employer, waive your ability, if any, to bring such claim, and release the Company, any subsidiary or affiliate and/or the Employer from any such claim; if, notwithstanding the foregoing, any such claim is allowed by a court of competent jurisdiction, then, by participating in the Plan, you shall be deemed irrevocably to have agreed not to pursue such claim and agree to execute any and all documents necessary to request dismissal or withdrawal of such claim; |
(i) | Unless otherwise provided in the Plan or by the Company in its discretion, the RSUs and the benefits evidenced by this Agreement do not create any entitlement to have the RSUs or any such benefits transferred to, or assumed by, another company nor to be exchanged, cashed out or substituted for, in connection with any corporate transaction affecting the shares of the Company; and |
(j) | The following provisions apply only if you are providing services outside the United States: (i) the Award and the shares of Common Stock subject to the RSUs are not part of normal or expected compensation or salary for any purpose; and (ii) neither the Company, the Employer nor any subsidiary or affiliate of the Company shall be liable for any foreign exchange rate fluctuation between your local currency and the United States Dollar that may affect the value of the RSUs or of any amounts due to you pursuant to the settlement of the RSUs or the subsequent sale of any shares of Common Stock acquired upon settlement. |
(a) | If you are subject to the Mutual Arbitration Agreement, any dispute that arises under this RSU grant or Agreement shall be governed by the Mutual Arbitration Agreement. Any application to a court under Section 1(a) of the Mutual Arbitration Agreement for temporary or preliminary injunctive relief in aid of arbitration or for the maintenance of the status quo pending arbitration shall exclusively be brought and conducted in the courts of Wilmington, Delaware, or the federal courts for the United States District Court for the District of Delaware, and no other courts where this RSU grant is made and/or performed. The parties hereby submit to and consent to the jurisdiction of the State of Delaware for purposes of any such application for injunctive relief. |
(b) | If you are not subject to the Mutual Arbitration Agreement, this Agreement and Award grant shall be governed by the substantive laws (but not the choice of law rules) of the State of Delaware. For purposes of litigating any dispute that arises under this RSU grant or Agreement, the parties hereby submit to and consent to the jurisdiction of the State of Delaware, agree that such litigation shall exclusively be conducted in the courts of Wilmington, Delaware, or the federal courts for the United States District Court for the District of Delaware, and no other courts where this RSU grant is made and/or performed. |
For the Company | ||
Bristol-Myers Squibb Company | ||
By |
1. | MARKET SHARE UNITS AWARD |
2. | RESTRICTIONS, FORFEITURES, AND SETTLEMENT |
(A) Tranche | (B) MSUs in Tranche | (C) Vesting Date | (D) Payout Factor | (E) Number of MSUs Vested |
1 | 25% of Total | 1st Anniversary of Award Date | Share Price on Measurement Date divided by Share Price on Award Date | MSUs in Tranche (Column B) times Payout Factor (Column D) |
2 | 25% of Total | 2nd Anniversary of Award Date | Share Price on Measurement Date divided by Share Price on Award Date | MSUs in Tranche (Column B) times Payout Factor (Column D) |
3 | 25% of Total | 3rd Anniversary of Award Date | Share Price on Measurement Date divided by Share Price on Award Date | MSUs in Tranche (Column B) times Payout Factor (Column D) |
4 | 25% of Total | 4th Anniversary of Award Date | Share Price on Measurement Date divided by Share Price on Award Date | MSUs in Tranche (Column B) times Payout Factor (Column D) |
(A) | “Share Price” shall equal the average of the closing share price of the Company’s Common Stock on the Measurement Date or Award Date, as applicable, and the nine trading days immediately preceding the Measurement Date or Award Date. If there were no trades on the Measurement Date or Award Date, the closing price on the most recent date preceding the Measurement Date or Award Date, as applicable, on which there were trades and the nine trading days immediately preceding that date shall be used. |
(B) | “Payout Factor” shall be rounded to the nearest hundredth (two places after the decimal), except that if the “Payout Factor” equals more than 2.00, the Payout Factor used in Column E shall be 2.00. Notwithstanding the formula in the table, the Payout Factor for any vesting date that occurs on or after a Change in Control shall equal the Share Price on the date of the Change in Control divided by the Share Price on the Award Date. |
(C) | “Measurement Date” shall mean the February 28 immediately preceding the vesting date for each tranche. |
(a) | Nontransferability. During the Restricted Period and any further period prior to settlement of your MSUs, you may not sell, transfer, pledge or assign any of the MSUs or your rights relating thereto. If you attempt to assign your rights under this Agreement in violation of the provisions herein, the Company’s obligation to settle MSUs or otherwise make payments shall terminate. |
(b) | Time of Settlement. MSUs shall be settled promptly upon expiration of the Restricted Period without forfeiture of the MSUs (i.e., upon vesting), but in any event within 60 days of expiration of the Restricted Period, by delivery of one share of Common Stock for each MSU being settled, or, at the discretion of the Company, the cash equivalent thereof; provided, however, that settlement of an MSU shall be subject to Plan Section 11(k), including, if applicable, the six-month delay rule in Plan Section 11(k)(i)(C) to the extent the MSUs are subject to Section 409A, payment is on account of your “separation from service” and you are a “key employee,” both within the meaning of Section 409A; provided further, that no dividend or dividend equivalents will be paid, accrued or accumulated in respect of the period during which settlement was delayed. (Note: This rule may apply to any portion of the MSUs that vest after the time you become Retirement eligible under the Plan, and could apply in other cases as well). Settlement of MSUs which directly or indirectly result from adjustments to MSUs shall occur at the time of settlement of the granted MSUs. Until shares are delivered to you in settlement of MSUs, you shall have none of the rights of a stockholder of the Company with respect to the shares issuable in settlement of the MSUs, including the right to vote the shares and receive actual dividends and other distributions on the underlying shares of Common Stock. Shares of stock |
(c) | Retirement. In the event of your Retirement (as that term is defined in Plan Section 2(x)(i)) at or after your 65th birthday and prior to the end of the Restricted Period, the continuous employment requirement shall be eliminated and you shall vest in and be entitled to settlement of (i.e., the Restricted Period shall expire with respect to) any MSUs that have not previously been vested or forfeited, provided that you have been continuously employed by the Company or a subsidiary of the Company for at least one year following the Award Date and your employment has not been terminated by the Company or a subsidiary of the Company for misconduct or other conduct deemed detrimental to the interests of the Company. Any MSU that vests upon your Retirement shall vest based on the Payout Factor determined by substituting for the Measurement Date either (i) the first trading day of the first month following your last day of work; (ii) your last day of work if such date occurs on the first trading day of a month; or (iii) the date of a Change in Control, if a Change in Control has occurred before your Retirement. |
(d) | Early Retirement; Termination not for Misconduct/Detrimental Conduct. This Section 2(d) shall apply in the event of (1) your Retirement (as that term is defined in Plan Sections 2(x)(ii) or 2(x)(iii)) (A) at or after age 55 with at least 10 years of service or (B) after attaining eligibility for the “Rule of 70” or (2) the termination of your employment by the Company or a subsidiary of the Company for reasons other than misconduct or other conduct deemed detrimental to the interests of the Company or a subsidiary of the Company (and you are not eligible for Retirement). If one of the events described in the preceding sentence occurs before the end of the Restricted Period, the continuous employment requirement shall be eliminated and you shall vest in and be entitled to settlement of (i.e., the Restricted Period shall expire with respect to) a proportionate number of the MSUs that would otherwise have vested on the vesting date that next follows the date on which the event occurs, provided that you have been continuously employed by the Company or a subsidiary of the Company for at least one year following the Award Date and your employment has not been terminated by the Company or a subsidiary of the Company for misconduct or other conduct deemed detrimental to the interests of the Company. Any MSU that vests upon your early Retirement or termination shall vest based on the Payout Factor determined by substituting for the Measurement Date either (i) the first trading day of the first month following your last day of work; (ii) your last day of work if such date occurs on the first trading day of a month; or (iii) the date of a Change in Control, if a Change in Control has occurred before your early Retirement or termination. If you are not eligible for Retirement (as that term is defined in Plan Sections 2(x)(i) or 2(x)(ii)), and you are employed in the United States or Puerto Rico at the time of your Retirement, you shall be entitled to the pro rata vesting described in this Section 2(d) only if you execute and do not revoke a release in favor of the Company and its predecessors, successors, affiliates, subsidiaries, directors and employees in a form satisfactory to the Company; if you fail to execute or revoke the release, or your release fails to become effective and irrevocable within 60 days of the date your employment terminates, you shall forfeit any MSUs that are unvested as of the date your employment terminates. The formula for determining the proportionate number of your MSUs to become vested and non-forfeitable upon your early Retirement or involuntary termination not for misconduct or other detrimental conduct is available by request from the Office of the Corporate Secretary at 345 Park Avenue, New York, New York 10154. |
(e) | Death. In the event of your death during the Restricted Period, the continuous employment requirement shall be eliminated and your estate shall vest in and be entitled to settlement of (i.e., the Restricted Period shall expire with respect to) a proportionate number of the MSUs that would otherwise have vested on the vesting date that next follows the date on which your death occurs, provided that you have been continuously employed by the Company for at least one year following the Award Date. Any MSU that vests upon your death shall vest based on the Payout Factor determined by substituting for the Measurement Date either (i) the first trading day of the first month following your last day of work; (ii) your last day of work if such date occurs on the first trading day of a month; or (iii) the date of a Change in Control, if a Change in Control has occurred before your death. The formula for determining the proportionate number of your MSUs to become vested and non-forfeitable upon your death is available by request from the Office of the Corporate Secretary at 345 Park Avenue, New York, New York 10154. In the event of your death prior to the delivery |
(f) | Disability. In the event you become Disabled (as that term is defined below), for the period during which you continue to be deemed to be employed by the Company or a subsidiary (i.e., the period during which you receive Disability benefits), you will not be deemed to have terminated employment for purposes of the MSUs. However, no period of continued disability shall continue beyond 29 months for purposes of the MSUs, at which time you will have considered to have separated from service in accordance with applicable laws as more fully provided for herein. Upon the termination of your receipt of Disability benefits, (i) you will not be deemed to have terminated employment if you return to employment status, and (ii) if you do not return to employment status or are considered to have separated from service as noted above, you will be deemed to have terminated employment at the date of cessation of payments to you under all disability pay plans of the Company and its subsidiaries, with such termination treated for purposes of the MSUs as a Retirement, death, or voluntary termination based on your circumstances at the time of such termination. For purposes of this Agreement, “Disability” or “Disabled” shall mean qualifying for and receiving payments under a disability plan of the Company or any subsidiary or affiliate either in the United States or in a jurisdiction outside of the United States, and in jurisdictions outside of the United States shall also include qualifying for and receiving payments under a mandatory or universal disability plan or program managed or maintained by the government. |
(g) | Qualifying Termination Following Change in Control. In the event your employment is terminated by reason of a Qualifying Termination during the Protected Period following a Change in Control, the continuous employment requirement shall be eliminated and you shall vest in and be entitled to settlement of (i.e., the Restricted Period shall expire with respect to) any MSUs that have not previously been forfeited. Any MSU that vests following a Qualifying Termination during the applicable Protected Period following a Change in Control shall vest based on the Payout Factor determined by substituting for the Measurement Date the date of the Change in Control. |
(h) | Other Termination of Employment. In the event of your voluntary termination, or termination by the Company or a subsidiary for misconduct or other conduct deemed by the Company to be detrimental to the interests of the Company or a subsidiary of the Company, you shall forfeit all unvested MSUs on the date of termination. |
(i) | Other Terms. |
(i) | In the event that you fail promptly to pay or make satisfactory arrangements as to the Tax Related Items as provided in Section 4, all MSUs subject to restriction shall be forfeited by you and shall be deemed to be reacquired by the Company. |
(ii) | You may, at any time prior to the expiration of the Restricted Period, waive all rights with respect to all or some of the MSUs by delivering to the Company a written notice of such waiver. |
(iii) | Termination of employment includes any event if immediately thereafter you are no longer an employee of the Company or any subsidiary of the Company, subject to Section 2(j) hereof. References in this Section 2 to employment by the Company include employment by a subsidiary of the Company. Termination of employment means an event after which you are no longer employed by the Company or any subsidiary of the Company. Such an event could include the disposition of a subsidiary or business unit by the Company or a subsidiary. |
(iv) | Upon any termination of your employment, any MSUs as to which the Restricted Period has not expired at or before such termination shall be forfeited, subject to Sections 2(c)-(g) hereof. Other provisions of this Agreement notwithstanding, in no event will an MSU that has been forfeited thereafter vest or be settled. |
(v) | In the event of termination of your employment or other service relationship (for any reason whatsoever, whether or not later found to be invalid or in breach of employment laws in the jurisdiction where you are employed or the terms of your employment agreement, if any), unless otherwise provided in this Agreement or determined by the Company, your right to vest in the MSUs under the Plan, if any, will terminate effective as of the date that you are no longer actively providing services and will not be extended by any notice period (e.g., active services would not include any contractual notice period or any period of “garden leave” or similar period mandated under employment laws in the jurisdiction where you are employed or the terms of your employment agreement, if any); the Company shall have the exclusive discretion to determine when you are no longer actively providing services for purposes of your MSUs (including whether you may still be considered to be providing services while on a leave of absence). |
(vi) | In any case in which you are required to execute a release as a condition to vesting and settlement of the MSUs, the applicable procedure shall be as specified under Plan Section 11(k)(v), except that the deadline for complying with such condition shall be the period provided in this Agreement. |
(vii) | You agree that the Company may recover any incentive-based compensation received by you under this Agreement if such recovery is pursuant to a clawback or recoupment policy approved by the Committee. |
(j) | The following events shall not be deemed a termination of employment: |
(i) | A transfer of you from the Company to a subsidiary, or vice versa, or from one subsidiary to another; and |
(ii) | A leave of absence from which you return to active service for any purpose approved by the Company or a subsidiary in writing. |
(k) | As more fully provided for in the Plan, notwithstanding any provision herein, in any Award or in the Plan to the contrary, the terms of any Award shall be limited to those terms permitted under Code Section 409A including all applicable regulations and administrative guidance thereunder (“Section 409A”), and any terms not permitted under Section 409A shall be automatically modified and limited to the extent necessary to conform with Section 409A, but only to the extent such modification or limitation is permitted under Section 409A. |
3. | NON-COMPETITION AND NON-SOLICITATION AGREEMENT AND COMPANY RIGHT TO INJUNCTIVE RELIEF, DAMAGES, RECISSION, FORFEITURE AND OTHER REMEDIES |
(a) | Confidentiality Obligations and Agreement. By accepting this Award Agreement, you agree and/or reaffirm the terms of all agreements related to treatment of Confidential Information that you signed at the inception of or during your employment, the terms of which are incorporated herein by reference. This includes, but is not limited to, use or disclosure of any BMS Confidential Information, Proprietary Information, or Trade Secrets to third parties. Confidential Information, Proprietary Information, and Trade secrets include, but are not limited to, any information gained in the course of your employment with the Company that is marked as confidential or could reasonably be expected to harm the Company if disclosed to third parties, including without limitation, any information that could reasonably be expected to aid a competitor or potential competitor in making inferences regarding the nature of the Company’s business activities, where such inferences could reasonably be expected to allow such competitor to compete more effectively with the Company. You agree that you will not remove or disclose Company Confidential Information, Proprietary Information or Trade Secrets. Unauthorized removal includes forwarding or downloading confidential information to personal email or other electronic media and/or copying the information to personal unencrypted thumb drives, cloud storage or drop box. Immediately upon termination of your employment for any reason, you will return to the Company all of the Company’s confidential and other business materials that you have or that are in your possession or control and all copies thereof, including all tangible embodiments thereof, whether in hard copy or electronic format and you shall not retain any versions thereof on any personal computer or any other media (e.g., flash drives, thumb drives, external hard drives and the like). Nothing in this paragraph or Agreement limits or prohibits your right to report potential violations of law, rules, or regulations to, or communicate with, cooperate with, testify before, or otherwise assist in an investigation or proceeding by, any government agency or entity, or engage in any other conduct that is required or protected by law or regulation, and you are not required to obtain the prior authorization of the Company to do so and are not required to notify the Company that you have done so. |
(b) | Inventions. To the extent permitted by local law, you agree and/or reaffirm the terms of all agreements related to inventions that you signed at the inception of or during your employment, and agree to promptly disclose and assign to the Company all of your interest in any and all inventions, discoveries, improvements and business or marketing concepts related to the current or contemplated business or activities of the Company, and which are conceived or made by you, either alone or in conjunction with others, at any time or place during the period you are employed by the Company. Upon request of the Company, including after your termination, you agree to execute, at the Company’s expense, any and all applications, assignments, or other documents which the Company shall determine necessary to apply for and obtain letters patent to protect the Company’s interest in such inventions, discoveries, and improvements and to cooperate in good faith in any legal proceedings to protect the Company’s intellectual property. |
(c) | Non-Competition, Non-Solicitation and Related Covenants. By accepting this Agreement, you agree to the restrictive covenants outlined in this section unless expressly prohibited by local law or as follows: The post-termination non-compete restrictions outlined in subparagraphs (i), (ii) and (v) of this Section 3(c) do not apply to employees who are, at the time of termination from employment by BMS, assigned to work for BMS resident full-time in the States of California or North Dakota, except that should said employee accept employment outside of California or North Dakota, all restrictions in Section 3(c), including, but not limited to, those pertaining to post-termination activities, shall be fully enforceable. There are no exemptions for any Award recipients (including employee residents of the States of California and North Dakota) regarding non-compete provisions while employed at the Company or from subparagraphs (iii), (iv) and (vi) of this Section 3(c) during the entire Non-Competition and Non-Solicitation Period. |
(i) | during the Non-Competition and Non-Solicitation Period (as defined below), own or have any financial interest in a Competitive Business (as defined below), except that nothing in this clause shall prevent you from owning one per cent or less of the outstanding securities of any entity whose securities are traded on a U.S. national securities exchange (including NASDAQ) or an equivalent foreign exchange; |
(ii) | during the Non-Competition and Non-Solicitation Period, whether or not for compensation, either on your own behalf or as an employee, officer, agent, consultant, director, owner, partner, joint venturer, shareholder, investor, or in any other capacity, be actively connected with a Competitive Business or otherwise advise or assist a Competitive Business with regard to any product, investigational compound, technology, service, line of business, department or business unit that competes with any product, technology, service, line of business, department or business unit with which you worked or about which you became familiar as a result of your employment with the Company or a subsidiary of the Company. Notwithstanding the foregoing, after your employment with the Company or a subsidiary of the Company terminates for any reason, you may be affiliated with a Competitive Business provided that your affiliation does not involve any product, investigational compound, technology or service, that competes with any product, investigational compound, technology or service with which you were involved within the last twelve months of your employment with the Company or a subsidiary of the Company, including any product, investigational compound, technology or service which the Company is developing and of which you had knowledge, and you and the Competing Business provide the Company written assurances of this fact prior to your commencing such affiliation; |
(iii) | during the Non-Competition and Non-Solicitation Period, employ, solicit for employment, solicit, induce, encourage, or participate in soliciting, inducing or encouraging any Company employee who is employed by the Company or who was employed by the Company within the twelve months preceding the termination of your employment with the Company for any reason, to terminate or reduce his or her or its relationship with the Company or any of its affiliates, successors or assigns (the “Related Parties”); |
(iv) | during the Non-Competition and Non-Solicitation Period, solicit, induce, encourage, or appropriate or attempt to solicit, divert or appropriate, by use of Confidential Information or otherwise, any existing or prospective customer, vendor or supplier of the Company or any Related Parties to terminate, cancel or otherwise reduce its relationship with the Company or any Related Parties; |
(v) | during the Non-Competition and Non-Solicitation Period, contact, call upon or solicit any existing customer of the Company or its Related Parties, or prospective customer of the Company or its Related Parties, that you became aware of or was introduced to in the course of your duties for the Company or its Related Parties, or otherwise divert or take away from the Company or its Related Parties the business of any current or prospective customer of the Company or its Related Parties; or |
(vi) | during the Non-Competition and Non-Solicitation Period, engage in any activity that is harmful to the interests of the Company or its Related Parties, including, without limitation, any conduct during the term of your employment that violates the Company’s Standards of Business Conduct and Ethics, securities trading policy and other policies. |
(d) | Rescission, Forfeiture and Other Remedies. If the Company determines that you have violated any applicable provisions of Section 3(c) above during the Non-Competition and Non-Solicitation Period, in addition to injunctive relief and damages, you agree and covenant that: |
(i) | any unvested portion of the MSUs shall be immediately rescinded; |
(ii) | you shall automatically forfeit any rights you may have with respect to the MSUs as of the date of such determination; |
(iii) | if any part of the MSUs vests within the twelve-month period immediately preceding a violation of Section 3(c) above (or following the date of any such violation), upon the Company’s demand, you shall immediately deliver to it a certificate or certificates for shares of the Company’s Common Stock that you acquired upon settlement of such MSUs (or an equivalent number of other shares); and |
(iv) | the foregoing remedies set forth in this Section 3(d) shall not be the Company’s exclusive remedies. The Company reserves all other rights and remedies available to it at law or in equity. |
(e) | Definitions. For purposes of this Agreement, the following definitions shall apply: |
(i) | “Competitive Business” means any business that is engaged in or is about to become engaged in the development, production or sale of any product, process or service concerning the treatment of any disease, which product, process or service resembles or competes with any product, process or service that was sold by, or in development at, the Company or a subsidiary of the Company during your employment with the Company or a subsidiary of the Company. |
(ii) | Because of the global nature of the Company’s business, it is agreed that the restrictions set forth above shall apply in the “Restricted Area,” defined as including without limitation the continent, country and the geographic regions where you worked in and were responsible for while employed by the Company or a subsidiary of the Company, and any other geographic area (country, province, state, city or other political subdivision) in which the Company or a subsidiary of the Company is engaged in business and/or is otherwise selling products or services at the time you ceased working for the Company or a subsidiary of the Company; |
(A) | provided, however, that if a court of competent jurisdiction or other authority determines the foregoing geographic scope is unenforceable, the “Restricted Area” shall be defined as the continent, country and the geographic regions where you worked and were responsible for while employed by the Company or a subsidiary of the Company; |
(B) | provided, however, that if a court of competent jurisdiction or other authority determines that the foregoing geographic scope is unenforceable, the “Restricted Area” shall be defined as the country in which you worked; |
(C) | provided, however, that if a court of competent jurisdiction or other authority determines that the foregoing geographic scope is unenforceable, the “Restricted Area” shall be defined as the geographic regions that you serviced and were responsible for while employed by the Company or a subsidiary of the Company. |
(iii) | The “Non-Competition and Non-Solicitation Period” shall be the period during which Employee is employed by the Company or a subsidiary of the Company and twelve (12) months after the end of Employee’s term of employment with and/or work for the Company or a subsidiary of the Company for any reason, (e.g., restriction applies regardless of the reason for termination and includes voluntary and involuntary termination) (hereinafter “Termination Date”); |
(A) | provided, however, that if a court of competent jurisdiction or other authority determines that such period is unenforceable, the “Non-Competition and Non-Solicitation Period” shall be the period of your employment and an additional eleven (11) months after your employment Termination Date with the Company or a subsidiary of the Company for any reason; |
(B) | provided, however, that if a court of competent jurisdiction or other authority determines that such period is unenforceable, the “Non-Competition and Non-Solicitation Period” shall be the period of your employment and an additional ten (10) months after your employment Termination Date with the Company or a subsidiary of the Company for any reason; |
(C) | provided further, in the event that the Company or a subsidiary of the Company files an action to enforce rights arising out of this Agreement, the Non-Competition and Non-Solicitation Period shall be extended for all periods of time in which you are determined by the Court or other authority to have been in violation of the provisions of Section 3(c). |
(f) | Severability. You acknowledge and agree that the period, scope and geographic areas of restriction imposed upon you by this Section 3 are fair and reasonable and are reasonably required for the protection of the Company. In case any one or more of the provisions contained in this Agreement should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions will not in any way be affected or impaired and this Agreement shall nevertheless continue to be valid and enforceable as though the invalid provisions were not part of this Agreement. If the final judgment of a court of competent jurisdiction or other authority declares that any term or provision hereof is invalid, illegal or unenforceable, the parties agree that the court making such determination shall have the power to reduce the scope, duration, area or applicability of the term or provision, to delete specific words or phrases, or to replace any invalid, illegal or unenforceable term or provision with a term or provision that is valid, legal and enforceable to the maximum extent permissible under law and that comes closest to expressing the intention of the invalid, illegal or unenforceable term or provision. You acknowledge and agree that your covenants under this Agreement are ancillary to your employment relationship with the Company or a subsidiary of the Company, but shall be independent of any other contractual relationship between you and the Company or a subsidiary of the Company. Consequently, the existence of any claim or cause of action that you may have against the Company or a subsidiary of the Company shall not constitute a defense to the enforcement of this Agreement by the Company or a subsidiary of the Company, nor an excuse for noncompliance with this Agreement. |
(g) | Additional Remedies. You acknowledge and agree that any violation by you of this paragraph will cause irreparable harm to the Company and its Related Parties and the Company cannot be adequately compensated for such violation by damages. Accordingly, if you violate or threaten to violate this Agreement, then, in addition to any other rights or remedies that the Company may have in law or in equity, the Company shall be entitled, without the posting of a bond or other security, to obtain an injunction to stop or prevent such violation, including but not limited to obtaining a temporary or preliminary injunction from a Delaware court pursuant to Section 1(a) of the Mutual Arbitration Agreement and Section 14 of this Agreement. You further agree that if the Company incurs legal fees or costs in enforcing this Agreement, you will reimburse the Company for such fees and costs. |
(h) | Binding Obligations. These obligations shall be binding both upon you, your assigns, executors, administrators and legal representatives. At the inception of or during the course of your employment, you may have executed agreements that contain similar terms. Those agreements remain in full force and effect. In the event that there is a conflict between the terms of those agreements and this Agreement, this Agreement will control. |
(i) | Enforcement. The Company retains discretion regarding whether or not to enforce the terms of the covenants contained in this Section 3 and its decision not to do so in your instance or anyone’s case shall not be considered a waiver of the Company’s right to do so. |
(j) | Duty to Notify. During your employment with the Company and for a period of 12 months after your termination of employment from the Company, you shall communicate your obligations under this Agreement to each subsequent employer. In addition, you shall advise the Company of the name and address of your intended future employer, including the title of the position accepted with the subsequent employer. While employed at the Company, you are required to provide this information immediately upon acceptance of a position with a new employer. Once terminated from the Company, upon resignation from any subsequent employer. The Company shall have the right to advise any subsequent employer of your obligations hereunder. |
4. | RESPONSIBILITY FOR TAXES |
(a) | withholding from your wages or other cash compensation paid to you by the Company and/or the Employer; or |
(b) | withholding from proceeds of the sale of shares of Common Stock acquired upon settlement of the MSUs either through a voluntary sale or through a mandatory sale arranged by the Company (on your behalf pursuant to this authorization without further consent); or |
(c) | withholding in shares of Common Stock to be issued upon settlement of the MSUs; |
5. | DIVIDENDS AND ADJUSTMENTS |
(a) | Dividends or dividend equivalents are not paid, accrued or accumulated on MSUs during the Restricted Period, except as provided in Section 5(b). |
(b) | The number of your MSUs and/or other related terms shall be appropriately adjusted, in order to prevent dilution or enlargement of your rights with respect to MSUs, to reflect any changes in the outstanding shares of Common Stock resulting from any event referred to in Plan Section 11(c) or any other “equity restructuring” as defined in FASB ASC Topic 718. |
6. | EFFECT ON OTHER BENEFITS |
7. | ACKNOWLEDGMENT OF NATURE OF PLAN AND MSUs |
(a) | The Plan is established voluntarily by the Company, it is discretionary in nature and may be modified, amended, suspended or terminated by the Company at any time, to the extent permitted by the Plan; |
(b) | The Award of MSUs is voluntary and occasional and does not create any contractual or other right to receive future awards of MSUs, or benefits in lieu of MSUs even if MSUs have been awarded in the past; |
(c) | All decisions with respect to future awards of MSUs or other awards, if any, will be at the sole discretion of the Company; |
(d) | Your participation in the Plan is voluntary; |
(e) | The MSUs and the Common Stock subject to the MSUs are not intended to replace any pension rights or compensation; |
(f) | Unless otherwise agreed by the Company, the MSUs and the Common Stock subject to the MSUs, and the income and value of the same, are not granted as consideration for, or in connection with, the service you may provide as a director of a subsidiary or an affiliate of the Company; |
(g) | The future value of the underlying shares of Common Stock is unknown, indeterminable and cannot be predicted with certainty; |
(h) | No claim or entitlement to compensation or damages arises from the forfeiture of MSUs, resulting from termination of your employment or other service relationship with the Company, or any of its subsidiaries or affiliates or the Employer (for any reason whatsoever and whether or not later found to be invalid or in breach of employment laws in the jurisdiction where you are employed or the terms of your employment agreement, if any), and in consideration of the grant of the MSUs to which you are otherwise not entitled, you irrevocably agree never to institute any claim against the Company, any of its subsidiaries or affiliates or the Employer, waive your ability, if any, to bring such claim, and release the Company, any subsidiary or affiliate and/or the Employer from any such claim; if, notwithstanding the foregoing, any such claim is allowed by a court of competent jurisdiction, then, by participating in the Plan, you shall be deemed irrevocably to have agreed not to pursue such claim and agree to execute any and all documents necessary to request dismissal or withdrawal of such claim. |
(i) | Unless otherwise provided in the Plan or by the Company in its discretion, the MSUs and the benefits evidenced by this Agreement do not create any entitlement to have the MSUs or any such benefits transferred to, or assumed by, another company nor to be exchanged, cashed out or substituted for, in connection with any corporate transaction affecting the shares of the Company; and |
(j) | The following provisions apply only if you are providing services outside the United States: (i) the Award and the shares of Common Stock subject to the MSUs are not part of normal or expected compensation or salary for any purpose; and (ii) neither the Company, the Employer nor any subsidiary or affiliate of the Company shall be liable for any foreign exchange rate fluctuation between your local currency and the United States Dollar that may affect the value of the MSUs or of any amounts due to you pursuant to the settlement of the MSUs or the subsequent sale of any shares of Common Stock acquired upon settlement. |
8. | NO ADVICE REGARDING GRANT |
9. | RIGHT TO CONTINUED EMPLOYMENT |
10. | ADMINISTRATION; UNFUNDED OBLIGATIONS |
11. | DEEMED ACCEPTANCE |
12. | AMENDMENT TO PLAN |
13. | SEVERABILITY AND VALIDITY |
14. | GOVERNING LAW, JURISDICTION AND VENUE |
(a) | If you are subject to the Mutual Arbitration Agreement, any dispute that arises under this Market Share Unit grant or Agreement shall be governed by the Mutual Arbitration Agreement. Any application to a court under Section 1(a) of the Mutual Arbitration Agreement for temporary or preliminary injunctive relief in aid of arbitration or for the maintenance of the status quo pending arbitration shall exclusively be brought and conducted in the courts of Wilmington, Delaware, or the federal courts for the United States District Court for the District of Delaware, and no other courts where this Market Share Unit grant is made and/or performed. The parties hereby submit to and consent to the jurisdiction of the State of Delaware for purposes of any such application for injunctive relief. |
(b) | If you are not subject to the Mutual Arbitration Agreement, this Agreement and Award grant shall be governed by the substantive laws (but not the choice of law rules) of the State of Delaware. For purposes of litigating any dispute that arises under this Market Share Unit grant or Agreement, the parties hereby submit to and consent to the jurisdiction of the State of Delaware, agree that such litigation shall exclusively be conducted in the courts of Wilmington, Delaware, or the federal courts for the United States District Court for the District of Delaware, and no other courts where this Market Share Unit grant is made and/or performed. |
15. | SUCCESSORS |
16. | DATA PRIVACY |
17. | ELECTRONIC DELIVERY AND ACCEPTANCE |
18. | INSIDER TRADING/MARKET ABUSE LAWS |
19. | LANGUAGE |
20. | COMPLIANCE WITH LAWS AND REGULATIONS |
21. | ENTIRE AGREEMENT AND NO ORAL MODIFICATION OR WAIVER |
22. | ADDENDUM |
23. | FOREIGN ASSET/ACCOUNT REPORTING REQUIREMENTS AND EXCHANGE CONTROLS |
24. | IMPOSITION OF OTHER REQUIREMENTS |
For the Company | ||
Bristol-Myers Squibb Company | ||
By |
1. | Term of Agreement and Protected Period. |
(a) | Term of Agreement. This Amended and Restated Agreement (“Agreement”), which shall replace entirely any prior Change in Control Agreements between you and the Company, shall be effective as of January 1, 2016, and shall continue in effect through December 31, 2016, and commencing on January 1, 2017, and each January 1 thereafter, this Agreement shall be automatically extended for one additional year unless, not later than December 1 of the year preceding the renewal date, either party to this Agreement has given notice to the other that the Agreement shall not be extended under this Section l(a); provided, however, that if a Change in Control or Potential Change in Control (as defined below) have occurred during the term of this Agreement, this Agreement shall continue in effect until the later of 36 months beyond the month in which the latest Change in Control occurred or the next December 31 that is at least 18 months after the latest occurrence of a Potential Change in Control. |
(b) | Protected Period. The "Protected Period" is the period from the time of occurrence of a Change in Control until the end of the 36th month after the Change in Control, except that the introductory text to Section 4 provides that certain events occurring before a Change in Control shall be deemed to have occurred during the Protected Period. |
2. | Change in Control and Potential Change in Control. |
(a) | A "Change in Control" shall be deemed to have occurred if, during the term of this Agreement, on the earliest to occur of the following dates: |
(i) | The date any Person (as defined in Section 13(d)(3) of the Securities and Exchange Act) shall have become the direct or indirect beneficial owner of thirty percent (30%) or more of the then outstanding common shares of the Company; |
(ii) | The date of consummation of a merger or consolidation of the Company with any other corporation other than (i) a merger or consolidation which would result in the voting securities of the company outstanding immediately prior thereto continuing to represent at least fifty one percent (51%) of the combined voting power of the voting securities of the Company or the surviving entity outstanding immediately after such merger or consolidation, or (ii) a merger or consolidation effected to implement a recapitalization of the Company in which no Person acquires more than fifty percent (50%) of the combined voting power of the Company's then outstanding securities; |
(iii) | The date the stockholders of the Company approve a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company of all or substantially all the Company's assets; |
(iv) | The date there shall have been a change in the composition of the Board of Directors of the Company within a two (2) year period such that a majority of the Board does not consist of directors who were serving at the beginning of such period together with directors whose initial nomination for election by the Company's stockholders or, if earlier, initial appointment to the Board was approved by the vote of two-thirds of the directors then still in office who were in office at the beginning of the two (2) year period together with the directors who were previously so approved. |
(b) | A "Potential Change in Control" shall be deemed to have occurred if, during the term of this Agreement: |
(i) | The Company enters into a written agreement, the consummation of which would result in a Change in Control; or |
(ii) | The Company or any Person publicly announces an intention to take or to consider taking actions which, if consummated, would constitute a Change in Control; or |
(iii) | Any Person who is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company representing I 0% or more of the combined voting power of the Company's then outstanding securities (except, if the Beneficial Owner is an institutional investor eligible to file a Schedule 13G in respect of the Company under Rule 13d-1(b), this threshold shall be 15%), thereafter increases such Person's beneficial ownership of such securities by 5% or more; or |
(iv) | The Board adopts a resolution to the effect that, for purposes of this Agreement, a Potential Change in Control has occurred. |
3. | Employee Covenants. |
4. | Termination and Resulting Compensation and Benefits. |
(a) | In General. This Agreement provides no compensation or benefits in connection with Terminations which occur at times other than during the Protected Period, except that, if you are Terminated prior to a Change in Control by the Company without Cause at the direction of a Person who has entered into an agreement with the Company the consummation of which will constitute a Change in Control, or if you Terminate with Good Reason prior to a Change in Control (determined by treating a Potential Change in Control as a Change in Control in applying the definition of Good Reason) if the circumstance or event which constitutes Good Reason occurs at the direction of such Person, and if in each case the Change in Control occurs within one year after your Termination, then your Termination shall be deemed to have been during the Protected Period and following a Change in Control and shall qualify for the compensation and benefits specified in Section 4(c). |
(b) | Termination by the Company for Cause, by You Without Good Reason. or by Reason of Death. and Failure to Perform Duties Due to Disability. If during the Protected Period you are Terminated by the Company for Cause, you voluntarily Terminate without Good Reason, Termination occurs due to your death, or you fail to perform your duties with the Company as a result of Disability, the Company will have no obligation to pay any compensation or benefits to you under this Agreement, but the following obligations will apply: |
(i) | In the case of failure to perform your duties due to Disability, you will be compensated on terms at least as favorable as those of the Company's short-term and long-term disability plans as in effect immediately prior to the Change in Control. |
(ii) | For any such Termination, you will be paid your salary through the Date of Termination plus all other compensation and benefits payable through the Date of Termination under the terms of any compensation or benefit plan, program or arrangement maintained by the Company during such period, subject to Section 5. If any annual incentive compensation was potentially earnable by you by performance in a year that has been completed, and such year was completed at the date of the Termination but the annual incentive compensation was not yet determined or not yet paid, the Company will determine the amount payable in good faith and with no exercise of negative discretion except as is consistent with the exercise of such negative discretion for other executives of the Company who have not Terminated (taking into account practice in prior years in determining such annual incentive awards); provided, however, that this sentence will not apply in the case of a Termination by the Company for Cause. |
(iii) | You will receive other compensation and benefits accrued and owing but not yet paid at the Date of Termination and any compensation and benefits as may be provided under the Company's retirement, insurance and other compensation or benefit plans, programs and arrangements on terms at least as favorable as those in effect immediately prior to the Change in Control. |
(c) | Terminations Triggering Severance Compensation and Benefits. In lieu of any other severance compensation or benefits to which you may otherwise be entitled under any plan, program, policy or arrangement of the Company or any subsidiary, entitlement to which you hereby expressly waive, the Company will pay you the payments described in this Section 4(c) (the "Severance Payments") upon Termination during the Protected Period and during the term of this Agreement, unless such termination is (i) by the Company for Cause, (ii) by reason of death, (iii) due to your failure to perform your duties with the Company as a result of Disability, or (iv) by you without Good Reason. The compensation and benefits provided under this Section 4(c) are as follows: |
(i) | The Company will pay you the amounts specified in Section 4(b)(ii). |
(ii) | In lieu of any further salary payments to you and in lieu of any severance benefit otherwise payable to you, the Company will pay you, in the form specified in Section 5 (a lump sum to the extent permissible), a severance payment, in cash, equal to 2.99 times the sum of (A) the higher of your annual base salary in effect immediately prior to the occurrence of the event or circumstance upon which the Notice of Termination is based or your annual base salary in effect immediately prior to the Change in Control, and (B) the aggregate amount of your target annual bonus opportunity for the year in which the Notice of Termination was given under the annual incentive plan applicable to you as in effect immediately prior to the occurrence of the |
(iii) | The Company will pay to you, in the form specified in Section 5 (a lump sum to the extent permissible), an amount, in cash, equal to the sum of (A) any incentive compensation which has been earned, allocated or awarded by you or to you for a completed calendar year or other measuring period preceding the Date of Termination but has not yet been paid (this shall not result, however, in duplication of payments under Section 4(c)(i) and 4(b)(ii)), with any further service requirement for the vesting of such compensation deemed met as of the Date of Termination, and (B), in the case of any annual incentive award contingent upon performance (i.e., a contingency other than continued service), equal to the pro rata portion of each authorized award or award opportunity for any performance measurement period that was in effect at the Date of Termination, calculated as to each such award assuming that any performance goal or measurement will have been achieved (for the entire performance period) at the level of the actual results achieved, if available, or if not at the target level; provided, however, any additional forfeiture conditions in the nature of a “clawback" contained in any plan or award agreement shall continue to apply to any payment under clause (A) or (B), and shall be deemed your covenants to be performed following termination. For purposes of clause (B), the pro rata portion shall be determined based on the proportion of the performance period elapsed from the beginning of such period until the Date of Termination, and any service, vesting or other non-performance requirement relating to such an award, including a service period that would have extended after the performance period, will be deemed met; provided, however, that the payment authorized by Section 4(c)(iii)(B) will be limited if the terms of any award or other agreement specifically limit the payment under this Agreement (referring clearly to this Agreement or a predecessor change in control agreement). |
(iv) | In the case of restricted stock, restricted stock units, options, stock appreciation rights ("SARs") and other equity awards, other than performance-based awards governed by Section 4(c)(iii) above, such awards shall be deemed fully vested and non-forfeitable (to the extent not previously vested and non-forfeitable) and restrictions on such awards shall automatically lapse as of the Date of Termination (subject to Section 5), and options and SARs and other exercisable awards will be immediately exercisable in full at that date; provided, however, that (A) the enhanced rights and benefits specified in this Section 4(c)(iv) will be limited if and to the extent that the terms of any award or other agreement specifically limit such enhanced rights and benefits under this Agreement (referring clearly to this Agreement or a predecessor change in control agreement); (B) if minimum vesting requirements applicable to any award under the 2007 or 2002 Stock Incentive Plan or other Company plan do not permit such accelerated vesting, the Company will make a cash payment to you equal to the fair market value (net of any exercise price) of such award at the Date of Termination, whereupon such award will be canceled; (C) any additional forfeiture conditions in the nature of a "clawback" contained in any plan or award agreement shall continue to apply, and shall apply to any payment under clause (B), and shall be deemed your covenants to be performed following termination; and (D) the acceleration of options and SARs and other awards provided for hereunder is subject to the limitations specified in Section 4(d). |
(v) | In addition to the retirement benefits to which you are entitled under the Bristol Myers Squibb Company Retirement Income Plan (the "Retirement Plan") and the Bristol Myers Squibb Company Benefit Equalization Plan relating to the Retirement Plan (the "BEP"), or any successor plans thereto, the Company will pay you an additional amount (the "Additional Amount") equal to the excess of: |
x. | the actuarial equivalent present value of the retirement pension (determined as a straight life annuity commencing as of the 1st day of the month coinciding with or next following either (1) your 65th birthday if your Date of Termination is on or before such birthday, or (2) your Date of Termination if such date occurs after your 65th birthday (the “Determination Date”)) which you would have accrued under the terms of the Retirement Plan and BEP (without regard to any amendment to the Retirement Plan or BEP made subsequent to a Change in Control which is adverse to you), determined as if you (A) were fully vested thereunder, and (B) had accumulated (as of the Date of Termination) 36 additional months of age and service credit thereunder at your highest annual rate of compensation (as such term is defined under the BEP) during the 12 months immediately preceding the Date of Termination (but in no event will you be deemed to have accumulated additional service credit in excess of the maximums taken into account under the Retirement Plan and BEP) (the "Additional Age/Service Credit") |
y. | the actuarial equivalent present value of the vested retirement pension (determined as a straight life annuity commencing at the Determination Date) which you had then accrued pursuant to the respective provisions of the Retirement Plan and BEP (the BEP portion of such retirement pension being the "Base BEP Benefit"). |
(vi) | For a 36-month period after the Date of Termination (subject to Section 5), the Company will arrange to provide you with life and health (including medical and dental) insurance benefits substantially similar to those which you are receiving immediately prior to the Notice of Termination (without giving effect to any reduction in such benefits subsequent to a Change in Control). Benefits otherwise receivable by you pursuant to this Section 4(c)(vi) will be reduced to the extent comparable benefits are actually received by or made available to you without greater cost to you than as provided by the Company during the 36-month period following your termination of employment (and any such benefits actually received by you will be reported to the Company by you). |
(vii) | Following the 36-month period described in Section 4(c)(vi), you will be immediately eligible to participate (although you may elect to defer commencement of such participation to such later date as you will determine) in the Company's retiree medical plans, whether or not you have satisfied any age and service requirements then applicable. For purposes of determining the level of your participation thereunder, you will be deemed to have accumulated 36 months of additional age and service credit; it being understood that if your age and service credit (as augmented hereunder) do not satisfy the minimum requirements for eligibility, you will be eligible to participate at the level requiring the maximum contribution requirement by an eligible retiree. Notwithstanding the foregoing, in the event that the foregoing retiree benefits fail to comply with the requirements of Section 409A of the Internal Revenue Code (“Code”), then in lieu of receiving such benefits, you will be entitled to receive cash payments from the Company that will equal the Company's cost of providing those benefits to you. Your first payment in lieu of those retiree benefits will be made in the first month following cessation of the coverage or payments in lieu of coverage as provided under Section 4(c)(vi) hereof. |
(viii) | In addition to the vested amounts, if any, to which you are entitled under the Company's Savings and Investment Program, including the Company's Benefit Equalization Plan for the Savings and Investment Program, as of the Date of Termination, the Company will pay you a lump sum amount (subject to Section 5) equal to the value of the unvested portion, if any, of the employer matching contributions credited to you under the Company's Savings and Investment Program, including the Company's Benefit Equalization Plan for the Savings and Investment Program (to the extent such unvested portion is forfeited as a result of your Termination). |
(ix) | The Company will provide you with (including reimbursements to you for) reasonable outplacement services consistent with past practices of the Company prior to the Change in Control. |
(d) | Excise Tax and Reduction in Payments in Certain Cases. |
(i) | If you become entitled to any amounts payable as a result of a Change in Control (whether or not such amounts are payable pursuant to this Agreement or otherwise) (the “Parachute Payments”) and any Parachute Payments are subject to the tax (the “Excise Tax”) imposed by Section 4999 of the Code (or any similar federal, state or local tax that may hereafter be imposed), then, upon reasonable notification to you and, if you so request, discussions with you and your advisors, the Parachute Payments shall be reduced (but not below zero) to the Reduced Amount (as defined below) if and only if reducing the Parachute Payments under this Agreement will provide you with a greater net amount after payment of all applicable federal, state, and local taxes, including the Excise Tax, than you would receive, after payment of all applicable federal, state, and local taxes, including the Excise Tax, if no such reduction were made. For the purposes of this Agreement, the “Reduced Amount” shall be an amount, expressed in present value, which maximizes the aggregate present value of the Parachute Payments without causing any Parachute Payment to be subject to the Excise Tax, determined in accordance with Section 280G(d)(4) of the Code. Only Parachute Payments payable under this Agreement shall be reduced pursuant to this Section 4(d), but this shall be deemed to include acceleration of vesting of equity awards covered by this Agreement even if such awards separately provide for acceleration of vesting. No reduction shall be applied to an amount that constitutes a deferral of compensation under Code Section 409A except for amounts that have become payable at the time of the reduction. |
(ii) | Determinations under this Section 4(d) shall be made by a nationally-recognized tax counsel or advisors selected by the Company’s independent auditors (serving immediately prior to the Change in Control) (the “Tax Advisor”). No payment or benefit shall be treated as potentially subject to the Excise Tax or as a parachute payment if you have effectively waived in writing, prior to the Date of Termination (or, if earlier, the date of your actual or constructive receipt of the payment or benefit), your right to receive such payment or benefit. |
(iii) | For purposes of determinations under this Section 4(d), you shall be deemed to pay federal income taxes at the applicable marginal rate(s) of federal income taxation (taking into account the loss of itemized deductions) in the calendar year in which the Excise Tax would apply and state and local income taxes at the applicable marginal rate(s) of taxation in the state and locality of your residence on the Date of Termination, net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes (but only to the extent it is practicable for you to itemize deductions). |
(e) | Time of Payment. The payments provided for in Sections 4(c)(ii), (iii), (iv), and (viii) shall be made not later than the fifth day following the Date of Termination, subject to any requirement for delay of payments and subject to all other rules under Section 5. If the amount of such payments due on a given payment date cannot be finally determined on or before that payment date, the Company shall pay to you on such day an estimate, as determined in good faith by the Company, of the minimum amount of such payments and shall pay the remainder of such payments (together with interest at the rate provided in Section 5(e)(i)) as soon as the amount thereof can be determined but in no event later than the thirtieth day after the due date for such payment. In the event that the amount of the estimated payments exceeds the amount subsequently determined to have been due, you shall be obligated to repay such excess amount on the fifth business day after demand by the Company, together with interest at the rate provided in Section 5(e)(i). At the time that payments are made under this Section and Section 5, the Company will provide you with a written statement setting forth the manner in which such payments were calculated and the basis for such calculations including a summary of any opinions or other advice the Company received from the Tax Advisor, outside counsel, auditors or consultants. |
(f) | Notice. During the Protected Period, any purported termination of your employment by the Company or by you shall be communicated by written Notice of Termination to the other party hereto. |
(g) | Certain Definitions. Except as otherwise indicated in this Agreement, all definitions in this Section 4(g) shall be applicable during the Protected Period only. |
(i) | Cause. "Cause" for termination by the Company of your employment, during the Protected Period, shall mean (A) the willful and continued failure by you to substantially perform your duties with the Company (other than any such failure resulting from your incapacity due to physical or mental illness or any such actual or anticipated failure after the issuance of a Notice of Termination for Good Reason by you) for a period of at least 30 consecutive days after a written demand for substantial performance is delivered to you by the Board, which demand specifically identifies the manner in which the Board believes that you have not substantially performed your duties, (B) the willful engaging by you in conduct which is demonstrably and materially injurious to the Company or its subsidiaries, monetarily or otherwise, or (C) you are convicted of, or have entered a plea of nolo contendere to, a felony. For purposes of clauses (A) and (B) of this definition, no act, or failure to act, on your part shall be deemed "willful" unless done, or omitted to be done, by you not in good faith and without reasonable belief that your act, or failure to act, was in the best interest of the Company. The foregoing notwithstanding, you will not be deemed to have been terminated for Cause unless and until there shall have been delivered to you a copy of the resolution duly adopted by the affirmative vote of not less than three-quarters (3/4) of the entire membership of the Board at a meeting of the Board (after reasonable notice to you and an opportunity for you, together with your counsel, to be heard before the Board) finding that, in the good faith opinion of the Board, you were guilty of conduct set forth above in this Section 4(g)(i) and specifying the particulars thereof in detail. |
(ii) | Date of Termination. "Date of Termination" shall mean the date specified in the Notice of Termination which, in the case of a Termination by the Company (other than a Termination for Cause), shall not be less than 30 days from the date such Notice of Termination is given and, in the case of a Termination by you, shall not be less than 15 nor more than 60 days from the date such Notice of Termination is given. |
(iii) | Disability. "Disability" shall have the meaning stated in the Company's short- and long-term disability plans as in effect immediately prior to a Change in Control. |
(iv) | Good Reason. "Good Reason" for Termination of your employment will mean the occurrence, without your express written consent, of any one of the following unless such circumstances are fully corrected prior to the Date of Termination: |
(A) | the assignment to you of any duties inconsistent with your status as an officer of the Company or a substantial adverse alteration in the nature or status of your responsibilities from those in effect immediately prior to the Change in Control; |
(B) | a material reduction by the Company in your annual base salary or target annual incentive bonus from the levels in effect immediately prior to the Change in Control or as the same may be increased from time to time; |
(C) | the relocation of the principal place of your employment to a location more than 50 miles from the location of such place of employment on the date of this Agreement; except for required travel on the Company's business to an extent substantially consistent with your business travel obligations prior to the Change in Control or, if you have consented to such a relocation, the failure by the Company to provide you with all of the benefits of the Company's relocation policy as in operation immediately prior to a Change in Control; |
(D) | the failure by the Company to pay to you any material amount or portion of your compensation or to pay to you any portion of an installment of deferred compensation under any deferred compensation program of the Company within seven days of the date such compensation is due; |
(E) | the failure by the Company to continue in effect any compensation or benefit plan which is material to your compensation and in which you participated immediately prior to the Change in Control, unless an equitable arrangement (embodied in an ongoing substitute or alternative plan) has been made with respect to such plan, or the failure by the Company to continue your participation therein (or in such substitute or alternative plan) on a basis not materially less favorable, both in terms of the amounts of benefits provided and the level of your participation relative to other participants, as existed at the time of the Change in Control; |
(F) | the failure by the Company to continue to provide you with benefits substantially similar to those enjoyed by you under any of the Company's pension (including, without limitation, the Company's Retirement Plan, BEP and the Company's Savings and Investment Program, including the Company's Benefit Equalization Plan for the Savings and Investment Program), life insurance, medical, health and accident, or disability plans in which you were participating at the time of the Change in Control, the taking of any action by the Company which would directly or indirectly materially reduce any of such benefits or deprive you of any material fringe benefit enjoyed by you at the time of the Change in Control, or the failure by the Company to provide you with the number of paid vacation days to which you are entitled on the basis of years of service with the Company in accordance with the Company's normal vacation policy in effect at the time of the Change in Control; |
(G) | the failure of the Company to obtain a satisfactory agreement from any successor to assume and agree to perform this Agreement, as contemplated in Section 9 hereof; or |
(H) | any purported termination of your employment that is not effected pursuant to a Notice of Termination satisfying the requirements of Section 4(g)(iv) hereof (and, if applicable, the requirements of Section 4(g)(ii) hereof), which purported termination shall not be effective for purposes of this Agreement. |
(v) | Notice of Termination. "Notice of Termination" shall mean notice indicating the specific termination provision in this Agreement relied upon and setting forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of your employment under the provision so indicated. |
(h) | Dispute Concerning Termination. If within 15 days after any Notice of Termination is given, or, if later, prior to the Date of Termination stated in such Notice, the party receiving such Notice notifies the other party that a dispute exists concerning the Termination, the Date of Termination shall be the date on which the dispute is finally resolved, either by mutual written agreement of the parties or by a final judgment, order or decree of a court of competent jurisdiction (which is no longer appealable); provided, however, that the Date of Termination shall be extended by a notice of dispute only if such notice is given in good faith and the party giving such notice pursues the resolution of such dispute with reasonable diligence. In case of such a dispute, the Company shall continue to pay you the full compensation in effect when the Notice giving rise to the dispute was given (including salary) or, if greater, the full compensation in effect immediately prior to the Change in Control, and continue you as a participant, on a basis at least as favorable to you as in effect immediately prior to the Change in Control, in all compensation, benefit and insurance plans in which you were participating when such Notice was given, until the dispute is finally resolved. Amounts paid under this Section 4(h) are in addition to all other amounts due under this Agreement but without duplication under Section 4(b) or 4(c)(i) hereof, and shall not be offset against or reduce any other amounts due under this Agreement. |
5. | Special Rules for Compliance with Code Section 409A. This Section 5 serves to ensure compliance with applicable requirements of Section 409A of the Code. Certain provisions of this Section 5 modify other provisions of this Agreement. If the terms of this Section 5 conflict with other terms of the Agreement, the terms of this Section 5 control. |
(a) | Timing of Certain Payments. Payments and benefits specified under this Agreement shall be paid at the times specified as follows: |
(i) | Accrued Payments at Termination. Sections 4(b)(ii) and 4(c)(i) of this Agreement require payment of amounts accrued at the date of your Termination. Unless the amount is payable under an applicable plan, program or arrangement on explicit terms providing for a delay in payment after Termination, compliant with Code Section 409A, these amounts shall be payable at the date the amounts otherwise would have been payable under the applicable plans, programs and arrangements but in no event more than 60 days after your Termination of employment. |
(ii) | Performance-Based Payments. In the case of payments under Sections 4(b)(ii), 4(c)(i) and 4(c)(iii)(A) as incentive compensation for performance in a year completed before the year of your Termination, the payment shall be made at the earliest of the date specified under the applicable Plan or five days after your Date of Termination, subject to any applicable requirement under Section 5(d) or 5(e)(vi); provided that the rule under Section 5(c)(iii) shall apply. |
(iii) | Certain Benefits. With respect to benefits provided under Section 4(c)(vi) (life and health insurance benefits and perquisites), Section 4(c)(vii) (retiree medical benefits), and Section 4(c)(ix) (outplacement services), the provision of each such benefit (whether provided in kind by the Company, provided by third parties but to be paid for by the Company, or reimbursed to you by the Company) in each calendar year shall be deemed a separate payment by the Company, and each component separately covered by clauses (A)-(E) below shall be deemed a separate payment. The following payment rules apply to ensure, to the greatest extent possible, that provision of these benefits does not result in Section 409A penalties to you: |
(A) | Payments that are non-taxable to you are intended to be not subject to Section 409A. |
(B) | Certain payments, including but not limited to business expense reimbursements and outplacement services, are excluded from being deemed deferrals of compensation under Treasury Regulation § l.409A-l(b)(9)(v)(A), (B) and (C); such payments may be incurred or provided during the period from Termination until the last day of your second taxable year following the taxable year of your Termination, provided that reimbursements must be paid no later than the end of the year following the year the reimbursable expense arose (or any greater or lesser period applicable to medical expenses under Treasury Regulation § l.409A-l(b)(9)(v)(B)). |
(C) | Certain payments shall be excluded under other applicable provisions of Treasury Regulation § l .409A-l - A-6 (including Treasury Regulation § l .409A-l (b)(4) and (10)-(12)). |
(D) | Any such payments not covered under the foregoing rules shall be payable as a reimbursement to you or as an in-kind benefit to you meeting the requirements of Treasury Regulation § l .409A-3(i)(1)(iv). For this purpose, the amount of any such payment in any one of your taxable years shall not affect the eligible amount of a related payment in any other of your taxable years (excluding medical expenses to the extent provided in Treasury Regulation § l.409A-3(i)(l)((iv)(B)), and any payment in reimbursement of an eligible expense shall be made no later than the last day of your taxable year following the taxable year in which the expense was incurred. Other provisions of this Agreement and any other company policy notwithstanding, a payment subject to this clause (D) may not be subject to liquidation or exchange for another benefit. |
(E) | Any payment not excluded from being a deferral of compensation and not otherwise covered by clauses (A)-(D) above shall nevertheless be payable as a separate payment under this Agreement. |
(iv) | Legal Fees and Related Costs and Expenses. Any legal fees and other costs and expenses payable by the Company under Section 8 shall be paid within 30 days of the date the Company receives the bill therefore, and in any event the fees and other costs and expenses must be paid or reimbursed no later than the end of your taxable year next following the taxable year in which you incurred the legal fees or other costs and expenses. |
(v) | Other Payments. Any payment or benefit required under this Agreement to be paid in a lump sum or otherwise to be paid promptly at or following a date or event shall be paid within five days after the due date, subject to Section 5(b), (c) and (d) below. |
(vi) | No Influence on Year of Payment. In the case of any payment under the Agreement payable during a specified period of time following a Termination or other event, if such permitted payment period begins in one calendar year and ends in a subsequent calendar year, you shall have no right to elect in which year the payment will be made, and the Company's determination of when to make the payment shall not be influenced in any way by you. |
(b) | Special Rules for Severance Payments. In the case of Severance Payments payable under Section 4(c)(ii), the following rules will apply: |
(i) | Severance Under Other Plans: Separate Payments. If you would be entitled to participate in the Company's Senior Executive Severance Plan or any other plan providing for severance payments upon a Termination not for cause and not during the Protected Period (the "Pre-CiC Plan"), the amount of such severance that would have been payable if your Termination were not otherwise subject to this Agreement shall be calculated at the time of your Termination (the " Pre-CiC Plan Severance"). Each installment payment that would have comprised the Pre-CiC Plan Severance shall be deemed a separate payment for all purposes, including for purposes of Section 409A. The portions of the Severance Payment payable under Section 4(c)(ii) that exceeds the Pre-CiC Plan Severance amount (or the present value thereof, if such present valuing is required to comply with Section 409A), including the part attributable to the higher multiple applicable under Section 4(c)(ii) to base salary as compared to the Pre CiC Plan and the part attributable to including annual bonus in the formula as compared to the Pre-CiC Plan, will each be deemed to be a separate payment for all purposes, including for purposes of Section 409A (the "Separate Lump Sums"). |
(ii) | Severance Payment Timing Rules. The portion of the Severance Payment that shall be payable as a lump-sum payment within five days after Termination shall equal (A) the amount of those installments of the Pre-CiC Plan Severance that constituted short-term deferrals under Treasury Regulation § l.409A-l(b)(4), plus (B) the maximum amount of the Pre-CiC Plan Severance payable under the "two-year/two-times" exclusion from being a deferral of compensation under Treasury Regulation § 1.409A-l(b)(9)(iii), plus (C) the Separate Lump Sums identified in Section 5(b)(i) above (if and to the extent that each amount qualifies as a short-term deferral under Code Section 409A), plus (D), if the six-month delay rule in Section 5(d) does not apply, all remaining amounts of the Severance Payment (except as otherwise provided in Section 5(b)(iii)). Any other amounts of such Severance Payment (i.e., amounts subject to the six-month delay rule) shall be paid at the date six months after the date of your Termination, together with applicable interest, except as otherwise provided in Section 5(b)(iii). |
(iii) | Payments of 409A Deferrals For a Termination Not Within Two Years After a 409A Change in Control. If either (A) the Change in Control does not involve a transaction that constitutes a change in the ownership of the Company, a change in effective control of the Company, or a change in the ownership of a substantial portion of the assets of the Company as defined in Treasury Regulation § l.409A-3(i)(5) (a "409A Change in Control"), or (B) your Termination triggering payments hereunder did not occur within the two-year period following a 409A Change in Control (including a termination governed by the general provision in Section 4(a)), payments under Section 5(b)(ii) other than those specified in Section 5(b)(ii)(A), (B) and (C) (i.e., payments that constitute deferrals under Section 409A) must be paid at the times and in the form applicable to the corresponding Pre-CiC Plan Severance. This provision does not apply if you would not have been entitled to Pre-CiC Plan Severance under any circumstances. |
(c) | Special Rules for Other Payments. With respect to amounts payable under Sections 4(c)(iii) (incentive and performance awards), 4(c)(iv) (particularly restricted stock units), 4(c)(v) (Additional Amounts under the Retirement Plan and the BEP), and 4(c)(viii) (replacement of forfeited matching contributions under the Savings Plan), the following rules will apply: |
(i) | Separate Payments. The amounts payable under each such separate provision of Sections 4(c)(iii)-(v) and 4(c)(viii) and replacing each amount or installment under a separately identifiable plan or arrangement shall each be deemed to be a separate payment for all purposes, including for purposes of Section 409A (subject to any further designation of separate payments explicitly made in such separately identifiable plan or arrangement for purposes of Section 409A). |
(ii) | Payment Timing Rules. A payment referenced in Section 5(c)(i) shall be payable as a lump sum payment within five days after Termination (subject to Section 5(e)(vi)) if and to the extent that (A) the separate payment constitutes short-term deferral under Treasury Regulation § l.409A-l (b)(4), (B) the amount of the separate payment can be paid under the "two-year/two times” exclusion from being a deferral of compensation under Treasury Regulation § l.409A-l(b)(9)(iii), after first applying such exclusion under Section 5(b)(ii), (C) the separate payment is covered by any other applicable exclusion or exemption under Treasury Regulation § l.409A-l(b)(9) (provided that the exclusion under subsection (b)(9)(v)(D) shall be used only to the extent not relied upon for other payments or benefits) and (D), the six month delay rule in Section 5(d) does not apply to the separate payment (except as otherwise provided in Section 5(c)(iii)). Any other such separate payment (i.e., amounts subject to the six-month delay rule) shall be paid at the date six months after the date of your Termination, together with applicable interest, except as otherwise provided in Section 5(c)(iii). Any delay in payment under the six-month delay rule shall not limit your rights under this Agreement to not forfeit a specified item of compensation as a result of your Termination. |
(iii) | Payments of 409A Deferrals For a Termination Not Within Two Years After a 409A Change in Control. If a payment referenced in Section 5(a)(ii) or 5(c)(ii) is a direct payment or a substitute or replacement for a right to payment (the "Original Payment Right") that constitutes a deferral of compensation under Section 409A, and if either (A) the Change in Control does not involve a 409A Change in Control, or (B) your Termination triggering payments hereunder did not occur within the two-year period following a 409A Change in Control (including a termination governed by the general provision of Section 4(a)), then such payments (including the payments under Section 5(c)(ii) other than those specified in Section 5(c)(ii)(A), (B) and (C)) (i.e., payments that constitute deferrals under Section 409A) must be paid at the times and in the form applicable to a separation from service under the terms of the Original Payment Right, subject to Section 5(d) and Section 5(e)(vi). If in no circumstances was such payment payable upon a separation from service under the Original Payment Right, then this Section 5(c)(iii) shall not apply. |
(d) | Six-Month Delay Rule. |
(i) | General Rule. The six-month delay rule will apply to certain payments and benefits under this Agreement if all of the following conditions are met: |
(A) | You are a "key employee" (as defined in Code Section 416(i) without regard to paragraph (5) thereof) for the year in which the Termination occurs. The Company will determine status of "key employees" annually, under administrative procedures applicable to all Section 409A plans and arrangements and applied in accordance with Treasury Regulation §1.409A-l(i). |
(B) | The Company's stock is publicly traded on an established securities market or otherwise. |
(C) | The payment or benefit in question is a deferral of compensation and not excepted, exempted or excluded from being such by the short-term deferral rule, or the "two years/two-times" rule in Treasury Regulation § 1.409A-l(b)(9)(iii), or any other exception, exemption or exclusion; provided, however, that the exclusion under Treasury Regulation §l.409A-l(b)(9)(v)(D) shall apply only if and to the extent that it is not necessary to apply to any other payment or benefit payable within six months after your Termination. |
(ii) | Effect of Rule. If it applies, the six-month delay rule will delay a payment or benefit which otherwise would be payable under this Agreement within six months after your separation from service. |
(A) | Any delayed payment or benefit shall be paid on the date six months after your separation from service. |
(B) | During the six-month delay period, accelerated payment will occur in the event of your death but not for any other reason (including no acceleration upon a Change in Control), except for accelerations expressly permitted under Treasury Regulation § l.409A-1-A-6. |
(C) | Any payment that is not triggered by a Termination, or is triggered by a Termination but would be made more than six months after the Termination (without applying this six month delay rule), shall be unaffected by the six-month delay rule. |
(iii) | Limit to Application of Six-Month Delay Rule. If the terms of this Agreement or other plan or arrangement or document relating to this Agreement or payments hereunder impose this six-month delay rule in circumstances in which it is not required for compliance with Section 409A, those terms shall not be given effect. |
(e) | Other Provisions. |
(i) | Interest on Delayed Payments. If any payment is delayed by application of the six-month delay rule under Section 5(d) or a delay resulting from the application of Section 5(b)(iii) or 5(c)(iii), interest will accrue on such unpaid amount at a rate equal to the short-term applicable federal rate (with semiannual compounding) established by the Internal Revenue Service under Section 1274(b)(2)(B) of the Code and in effect at the date the amount would have been paid but for the six-month delay rule hereunder. |
(ii) | Good Reason. The definition of "Good Reason" in Section 4(g)(iv) of the Agreement has been modified to qualify as an “involuntary separation" within the meaning of Treasury Regulation § l.409A-l (n)(2)(i), and shall be so construed and interpreted. |
(iii) | Non-transferability. No right to any payment or benefit under this Agreement shall be subject to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or garnishment by your creditors or of any of your beneficiaries. |
(iv) | No Acceleration. The timing of payments and benefits under the Agreement may not be accelerated to occur before the time specified for payment hereunder, except to the extent permitted under Treasury Regulation § l.409A-3(j)(4) or as otherwise permitted under Code Section 409A without you incurring a tax penalty. |
(v) | The timing of any payment under Section 4(b)(i) (relating to Disability) will be the same as would have been the case under the relevant short-term or long-term disability plan. |
(vi) | If you are obligated hereunder to execute a release, non-competition, or other agreement as a condition to receipt of a payment hereunder, the Company will supply to you a form of such release or other document not later than the date of your Termination, which must be returned within the time period required by law and must not be revoked by you within the applicable time period in order for you to satisfy any such condition. If any amount payable during a fixed period following your Termination is subject to such a requirement and the fixed period would begin in one year and end in the next, the Company, in determining the time of payment of any such amount, will not be influenced by the timing of any action by you including execution of such a release or other document and expiration of any revocation period. In particular, the Company will be entitled in its discretion to deposit any payment hereunder in escrow during either year comprising such fixed period, so that such deposited amount is constructively received and taxable income to you upon deposit but with distribution from such escrow remaining subject to your execution and non-revocation of such release or other document. |
6. | Mitigation. Except as provided in Section 4(c)(vi) hereof, you shall not be required to mitigate the amount of payments or benefits provided for under this Agreement by seeking other employment or otherwise, nor shall the amount of payment or benefit provided for under this Agreement be reduced by any compensation earned by you as the result of employment by another employer, by retirement benefits, by offset against any amount claimed to be owed by you to the Company, or otherwise. |
7. | Noncompetition and Related Covenants. In consideration for the payments and benefits provided by the Company under this Agreement, you shall execute, concurrent with the execution of this Agreement, a noncompetition agreement with the Company in the form attached to this Agreement as Exhibit A, which agreement provides that, for a one-year period following your termination of employment with the Company or any of its subsidiaries or affiliates, you will not engage in any competitive activity with the Company or any of its subsidiaries or affiliates. In addition, if you receive any payment or benefit pursuant to Section 4(c)(iv), the forfeiture conditions in the nature of a "clawback" applicable to the award or the related payment or benefit shall become covenants to be performed following termination. A portion of the payments and benefits under Section 4(c) shall be deemed compensation for your performance of the covenants referred to in this Section 7. |
8. | Costs of Proceedings. The Company shall pay all costs and expenses, including all reasonable attorneys' fees and disbursements, of the Company and, at least monthly, you in connection with any legal proceedings, whether or not instituted by the Company or you, relating to the interpretation or enforcement of any provision of this Agreement; provided that if you instituted the proceeding and a finding (no longer subject to appeal) is entered that you instituted the proceeding in bad faith, you shall pay all of your costs and expenses, including attorneys' fees and disbursements and reimburse the Company for any and all attorneys' fees and disbursements the Company had paid on your behalf. The Company shall pay prejudgment interest on any money judgment obtained by you as a result of such proceeding, calculated at the prime rate of The Chase Manhattan Bank as in effect from time to time from the date that payment should have been made to you under this Agreement. |
9. | Miscellaneous. |
(a) | Successors. The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. As used in this Agreement, "Company" shall mean the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid which assumes and agrees to perform this Agreement by operation of law, or otherwise. |
(b) | Binding Agreement. This Agreement shall inure to the benefit of and be enforceable by you and your personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. In the event of your death, all amounts otherwise payable to you hereunder shall, unless otherwise provided herein, be paid in accordance with the terms of this Agreement to your devisee, legatee or other designee or, if there is no such designee, to your estate. |
(c) | Notice. Notices and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given when (i) personally delivered or (ii) mailed by United States certified or registered mail, return receipt requested, postage prepaid, addressed to the respective addresses set forth on the first page of this Agreement; provided that all notice to the Company shall be directed to the attention of the Board with a copy to the General Counsel of the Company, or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notice of change of address shall be effective only upon receipt. |
(d) | Modifications. Except as otherwise set forth in this Agreement, no provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing and signed by you and such officer as may be designated by the Board. The Company may amend this Agreement without your written consent if such amendment would not materially and adversely affect your rights under this Agreement. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the time or at any prior or subsequent time. |
(e) | Governing Law. THE VALIDITY, INTERPRETATION, CONSTRUCTION AND PERFORMANCE OF THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO ITS CONFLICTS OF LAW PRINCIPLES. |
(f) | Tax Withholding. Any payments provided for hereunder shall be paid net of any applicable withholding required under federal, state or local law. |
(g) | Surviving Obligations. The obligations of the Company and your obligations under this Agreement shall survive the expiration of this Agreement to the extent necessary to give effect to this Agreement. |
(h) | Validity. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect. |
(i) | Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument. |
(j) | Entire Agreement. This Agreement sets forth the entire agreement of the parties hereto in respect of the subject matter contained herein and during the term of this Agreement supersedes the provisions of all prior agreements (including any prior Change in Control Agreement between the parties), promises, covenants, arrangements, communications, representations or warranties, whether oral or written, by any officer, employee or representative of any party hereof with respect to the subject matter contained herein. No agreements or representations, oral or otherwise, expressed or implied, with respect to the subject matter hereof have been made by either party which are not expressly set forth in this Agreement (together with other written plans and agreements to which you and the Company are parties and remain bound). |
BRISTOL-MYERS SQUIBB COMPANY | ||
By | ||
[Name] | ||
[Title] |
Ratio of Earnings to Fixed Charges: | Year Ended December 31, | ||||||||||||||||||
2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||
Dollars in Millions | |||||||||||||||||||
Earnings | |||||||||||||||||||
Earnings from continuing operations before income taxes | $ | 2,077 | $ | 2,381 | $ | 2,891 | $ | 2,340 | $ | 6,981 | |||||||||
Less: | |||||||||||||||||||
Noncontrolling interest in pre-tax income of subsidiaries | |||||||||||||||||||
that have not incurred fixed charges | 51 | 38 | 36 | 844 | 2,323 | ||||||||||||||
Equity in net income of affiliates | 83 | 107 | 166 | 183 | 281 | ||||||||||||||
Capitalized interest | 2 | 3 | — | — | — | ||||||||||||||
Adjusted Income | 1,941 | 2,233 | 2,689 | 1,313 | 4,377 | ||||||||||||||
Add: | |||||||||||||||||||
Fixed charges | 231 | 254 | 255 | 227 | 190 | ||||||||||||||
Distributed income of equity investments | 105 | 153 | 149 | 229 | 283 | ||||||||||||||
Total Earnings | $ | 2,277 | $ | 2,640 | $ | 3,093 | $ | 1,769 | $ | 4,850 | |||||||||
Fixed Charges | |||||||||||||||||||
Interest expense | $ | 184 | $ | 203 | $ | 199 | $ | 182 | $ | 145 | |||||||||
Capitalized interest | 2 | 3 | — | — | — | ||||||||||||||
One-third of rental expense(1) | 45 | 48 | 56 | 45 | 45 | ||||||||||||||
Total Fixed Charges | $ | 231 | $ | 254 | $ | 255 | $ | 227 | $ | 190 | |||||||||
Ratio of Earnings to Fixed Charges | 9.86 | 10.39 | 12.13 | 7.79 | 25.53 |
(1) | Rents included in the computation consist of one-third of rental expense which the Company believes to be a reasonable estimate of an interest factor in its leases. |
345 Park LLC |
A.G. Medical Services, P.A. |
Adnexus, a Bristol-Myers Squibb R&D Company |
Allard Labs Acquisition G.P. |
Amira Pharmaceuticals, Inc. |
Apothecon LLC |
Blisa Acquisition G.P. |
BMS Benelux Holdings B.V. |
BMS Bermuda Nominees L.L.C. |
BMS Data Acquisition Company LLC |
BMS Forex Company |
B-MS GeneRx |
BMS Holdings |
BMS Holdings Spain, S.L. |
BMS International Insurance Company Limited |
BMS Investco SAS |
BMS Korea Holdings L.L.C. |
BMS Latin American Nominees L.L.C. |
BMS Luxembourg Partners L.L.C. |
BMS Omega Bermuda Holdings Finance Ltd. |
BMS Pharmaceutical Korea Limited |
BMS Pharmaceuticals Germany Holdings B.V. |
BMS Pharmaceuticals International Holdings Netherlands B.V. |
BMS Pharmaceuticals Korea Holdings B.V. |
BMS Pharmaceuticals Mexico Holdings B.V. |
BMS Pharmaceuticals Netherlands Holdings B.V. |
BMS Real Estate LLC |
BMS Spain Investments LLC |
Bristol (Iran) S.A. |
Bristol Iran Private Company Limited |
Bristol Laboratories Inc. |
Bristol Laboratories International, S.A. |
Bristol Laboratories Medical Information Systems Inc. |
Bristol-Myers (Andes) L.L.C. |
Bristol-Myers (Private) Limited |
Bristol-Myers de Venezuela S.C.A. |
Bristol-Myers K.K. |
Bristol-Myers Middle East S.A.L. |
Bristol-Myers Overseas Corporation |
Bristol-Myers Squibb (China) Investment Co., Ltd. |
Bristol-Myers Squibb (China) Pharmaceuticals Co., Ltd. |
Bristol-Myers Squibb (Israel) Ltd. |
Bristol-Myers Squibb (NZ) Limited |
Bristol-Myers Squibb (Proprietary) Limited |
Bristol-Myers Squibb (Shanghai) Trading Co. Ltd. |
Bristol-Myers Squibb (Singapore) Pte. Limited |
Bristol-Myers Squibb (Taiwan) Ltd. |
Bristol-Myers Squibb (West Indies) Ltd. |
Bristol-Myers Squibb A.E. |
Bristol-Myers Squibb Aktiebolag |
Bristol-Myers Squibb Argentina S. R. L. |
Bristol-Myers Squibb Australia Pty. Ltd. |
Bristol-Myers Squibb Axia Limited |
Bristol-Myers Squibb B.V. |
Bristol-Myers Squibb Belgium S.A. |
Bristol-Myers Squibb Business Services Limited |
Bristol-Myers Squibb Canada Co. |
Bristol-Myers Squibb Canada International Limited |
Bristol-Myers Squibb de Colombia S.A. |
Bristol-Myers Squibb de Costa Rica Sociedad Anonima |
Bristol-Myers Squibb de Guatemala, S.A. |
Bristol-Myers Squibb de Mexico, S. de R.L. de C.V. |
Bristol-Myers Squibb Delta Company Limited |
Bristol-Myers Squibb Denmark Filial of Bristol-Myers Squibb AB |
Bristol-Myers Squibb Egypt, LLC |
Bristol-Myers Squibb EMEA Sarl |
Bristol-Myers Squibb Epsilon Holdings |
Bristol-Myers Squibb Farmaceutica Ltda |
Bristol-Myers Squibb Farmaceutica Portuguesa S.A. |
Bristol-Myers Squibb GesmbH |
Bristol-Myers Squibb GmbH & Co. KGaA |
Bristol-Myers Squibb Holding Germany GmbH & Co. KG |
Bristol-Myers Squibb Holdings 2002 Limited |
Bristol-Myers Squibb Holdings Germany Verwaltungs Gmbh |
Bristol-Myers Squibb Holdings Ireland |
Bristol-Myers Squibb Holdings Limited |
Bristol-Myers Squibb Holdings Pharma Ltd. Liability Company |
Bristol-Myers Squibb Ilaclari, Inc. |
Bristol-Myers Squibb India Pvt. Limited |
Bristol-Myers Squibb International Company |
Bristol-Myers Squibb International Corporation |
Bristol-Myers Squibb Investco, L.L.C. |
Bristol-Myers Squibb Luxembourg International S.C.A. |
Bristol-Myers Squibb Luxembourg S.a.r.l. |
Bristol-Myers Squibb Manufacturing Company |
Bristol-Myers Squibb Marketing Services S.R.L. |
Bristol-Myers Squibb MEA GmbH |
Bristol-Myers Squibb Middle East & Africa FZ-LLC |
Bristol-Myers Squibb Norway Ltd. |
Bristol-Myers Squibb Nutricionales de Mexico, S. de R.L. de C.V. |
Bristol-Myers Squibb Peru S.A. |
Bristol-Myers Squibb Pharma (HK) Ltd |
Bristol-Myers Squibb Pharma (Thailand) Limited |
Bristol-Myers Squibb Pharma Company |
Bristol-Myers Squibb Pharma EEIG |
Bristol-Myers Squibb Pharma Holding Company, LLC |
Bristol-Myers Squibb Pharma Ventures Corporation |
Bristol-Myers Squibb Pharmaceutical Trading Ltd. |
Bristol-Myers Squibb Pharmaceuticals |
Bristol-Myers Squibb Pharmaceuticals Limited |
Bristol-Myers Squibb Polska Sp. z o.o. |
Bristol-Myers Squibb Products S.A. |
Bristol-Myers Squibb Puerto Rico, Inc. |
Bristol-Myers Squibb Puerto Rico/Sanofi Pharmaceutical Partnership Puerto Rico |
Bristol-Myers Squibb S.r.l. |
Bristol-Myers Squibb SA |
Bristol-Myers Squibb Sanofi Pharmaceuticals Holding Partnership |
Bristol-Myers Squibb Sarl |
Bristol-Myers Squibb Service Ltd. |
Bristol-Myers Squibb Services Sp. z o.o. |
Bristol-Myers Squibb spol. s r.o. |
Bristol-Myers Squibb Trustees Limited |
Bristol-Myers Squibb Verwaltungs GmbH |
Bristol-Myers Squibb, S.A.U. |
Bristol-Myers Squibb/Astrazeneca EEIG |
Bristol-Myers Squibb/Pfizer EEIG |
Bristol-Myers Squibb/Sanofi Pharmaceuticals Partnership |
Cardioxyl Pharmaceuticals, Inc. |
Compania Bristol-Myers Squibb de Centro America |
E. R. Squibb & Sons Inter-American Corporation |
E. R. Squibb & Sons Limited |
EWI Corporation |
FermaVir Pharmaceuticals, L.L.C. |
FermaVir Research, L.L.C. |
Flexus Biosciences, Inc. |
GenPharm International, L.L.C. |
Grove Insurance Company Ltd. |
Heyden Farmaceutica Portugesa Limitada |
Inhibitex, L.L.C. |
iPierian, Inc. |
Kosan Biosciences Incorporated |
Linson Investments Limited |
Mead Johnson (Manufacturing) Jamaica Limited |
Mead Johnson Jamaica Ltd. |
O.o.o. Bristol-Myers Squibb |
O.o.o. Bristol-Myers Squibb Manufacturing |
Oy Bristol-Myers Squibb (Finland) AB |
Princeton Pharmaceutical Products, Inc. |
Route 22 Real Estate Holding Corporation |
Sino-American Shanghai Squibb Pharmaceuticals Limited |
Societe Francaise de Complements Alimentaires(S.O.F.C.A.) |
Squibb Middle East S.A. |
Swords Laboratories |
Unterstutzungskasse Bristol-Myers Squibb GmbH |
UPSA SAS |
Westwood-Intrafin SA |
Westwood-Squibb Pharmaceuticals, Inc. |
ZymoGenetics Paymaster, LLC |
ZymoGenetics, Inc. |
ZymoGenetics, LLC |
a. | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared; |
b. | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; |
a. | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting that are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ GIOVANNI CAFORIO |
Giovanni Caforio |
Chief Executive Officer |
a. | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared; |
b. | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; |
a. | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting that are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ CHARLES BANCROFT |
Charles Bancroft |
Chief Financial Officer |
/s/ GIOVANNI CAFORIO |
Giovanni Caforio |
Chief Executive Officer |
February 12, 2016 |
/s/ CHARLES BANCROFT |
Charles Bancroft |
Chief Financial Officer |
February 12, 2016 |
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Document and Entity Information - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Feb. 01, 2016 |
Jun. 30, 2015 |
|
Entity Information [Line Items] | |||
Entity Registrant Name | BRISTOL MYERS SQUIBB CO | ||
Entity Central Index Key | 0000014272 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 1,669,459,090 | ||
Entity Public Float | $ 110,846,810,075 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2015 | ||
Document Fiscal Year Focus | 2015 | ||
Document Fiscal Period Focus | FY | ||
Current Fiscal Year End Date | --12-31 | ||
Amendment Flag | false |
CONSOLIDATED STATEMENTS OF EARNINGS - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Income Statement [Abstract] | |||
Net product sales | $ 14,045 | $ 11,660 | $ 12,304 |
Alliance and other revenues | 2,515 | 4,219 | 4,081 |
Total Revenues | 16,560 | 15,879 | 16,385 |
Cost of products sold | 3,909 | 3,932 | 4,619 |
Marketing, selling and administrative | 4,841 | 4,822 | 4,939 |
Research and development | 5,920 | 4,534 | 3,731 |
Other (income)/expense | (187) | 210 | 205 |
Total Expenses | 14,483 | 13,498 | 13,494 |
Earnings Before Income Taxes | 2,077 | 2,381 | 2,891 |
Provision for Income Taxes | 446 | 352 | 311 |
Net Earnings | 1,631 | 2,029 | 2,580 |
Net Earnings Attributable to Noncontrolling Interest | 66 | 25 | 17 |
Net Earnings Attributable to BMS | $ 1,565 | $ 2,004 | $ 2,563 |
Earnings per Common Share | |||
Basic Earnings Per Common Share Attributable to BMS | $ 0.94 | $ 1.21 | $ 1.56 |
Diluted Earnings per Common Share Attributable to BMS | 0.93 | 1.20 | 1.54 |
Cash dividends declared per common share | $ 1.49 | $ 1.45 | $ 1.41 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Comprehensive Income (Loss), Net of Tax, Including Portion Attributable to Noncontrolling Interest [Abstract] | |||
Net Earnings | $ 1,631 | $ 2,029 | $ 2,580 |
Other Comprehensive Income (Loss), net of taxes and reclassifications to earnings [Abstract] | |||
Derivatives qualifying as cash flow hedges | (51) | 69 | 7 |
Pension and postretirement benefits | 101 | (324) | 1,166 |
Available-for-sale securities | (54) | 3 | (37) |
Foreign currency translation | (39) | (32) | (75) |
Total Other Comprehensive Income/(Loss) | (43) | (284) | 1,061 |
Comprehensive Income | 1,588 | 1,745 | 3,641 |
Comprehensive Income Attributable to Noncontrolling Interest | 66 | 25 | 17 |
Comprehensive Income Attributable to BMS | $ 1,522 | $ 1,720 | $ 3,624 |
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Preferred Stock, Par or Stated Value Per Share | $ 1 | |
Preferred Stock, Shares Authorized | 10,000,000 | |
Preferred Stock, Shares Issued | 4,161 | 4,212 |
Preferred Stock, Shares Outstanding | 4,161 | 4,212 |
Preferred Stock, Liquidation Preference Per Share | $ 50 | |
Common Stock, Par or Stated Value Per Share | $ 0.1 | |
Common Stock, Shares Authorized | 4,500,000,000 | |
Common Stock, Shares Issued | 2,200,000,000 | 2,200,000,000 |
Treasury Stock, Shares | 539,000,000 | 547,000,000 |
ACCOUNTING POLICIES |
12 Months Ended |
---|---|
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies [Text Block] | ACCOUNTING POLICIES AND RECENTLY ISSUED ACCOUNTING STANDARDS Basis of Consolidation The consolidated financial statements are prepared in conformity with United States (U.S.) generally accepted accounting principles (GAAP), including the accounts of Bristol-Myers Squibb Company and all of its controlled majority-owned subsidiaries and certain variable interest entities (which may be referred to as Bristol-Myers Squibb, BMS, or the Company). All intercompany balances and transactions are eliminated. Material subsequent events are evaluated and disclosed through the report issuance date. Alliance and license arrangements are assessed to determine whether the terms provide economic or other control over the entity requiring consolidation of an entity. Entities controlled by means other than a majority voting interest are referred to as variable interest entities and are consolidated when BMS has both the power to direct the activities of the variable interest entity that most significantly impacts its economic performance and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the entity. Use of Estimates The preparation of financial statements requires the use of management estimates and assumptions. The most significant assumptions are estimates in determining the fair value and potential impairment of intangible assets; sales rebate and return accruals; legal contingencies; income taxes; estimated selling prices used in multiple element arrangements; and pension and postretirement benefits. Actual results may differ from estimated results. Reclassifications Certain prior period amounts were reclassified to conform to the current period presentation. Advertising and product promotion costs previously presented separately in the consolidated statements of earnings are now included in marketing, selling and administrative expenses. Revenue Recognition Revenue is recognized when persuasive evidence of an arrangement exists, the sales price is fixed or determinable, collectability is reasonably assured and title and substantially all risks and rewards of ownership is transferred, generally at time of shipment (including the supply of commercial products to alliance partners when they are the principal in the end customer sale). However, certain revenue of non-U.S. businesses is recognized on the date of receipt by the customer. Alliance and other revenue related to Abilify* and Atripla* is not recognized until the products are sold to the end customer by the alliance partner. Royalties are recognized when the third-party sales are reliably measurable and collectability is reasonably assured. Refer to “—Note 3. Alliances” for further detail regarding alliances. Revenue is reduced at the time of recognition for expected sales returns, discounts, rebates and sales allowances based on historical experience updated for changes in facts and circumstances including the impact of applicable healthcare legislation. Revenue is deferred when there is no historical experience with products in a similar therapeutic category, or until the right of return no longer exists or sufficient historical experience to estimate sales returns is developed. Income Taxes The provision for income taxes includes income taxes paid or payable for the current year plus the change in deferred taxes during the year. Deferred taxes result from differences between the financial and tax basis of assets and liabilities and are adjusted for changes in tax rates and tax laws when changes are enacted. Valuation allowances are recognized to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized. The assessment of whether or not a valuation allowance is required often requires significant judgment including the long-range forecast of future taxable income and the evaluation of tax planning initiatives. Adjustments to the deferred tax valuation allowances are made to earnings in the period when such assessments are made. Tax benefits are recognized from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. The tax benefit recognized in the financial statements for a particular tax position is based on the largest benefit that is more likely than not to be realized upon settlement. Cash and Cash Equivalents Cash and cash equivalents include bank deposits, time deposits, commercial paper and money market funds. Cash equivalents consist of highly liquid investments with original maturities of three months or less at the time of purchase and are recognized at cost, which approximates fair value. Marketable Securities and Investments in Other Companies Marketable securities are classified as “available-for-sale” on the date of purchase and reported at fair value. Fair value is determined based on observable market quotes or valuation models using assessments of counterparty credit worthiness, credit default risk or underlying security and overall capital market liquidity. Investments in 50% or less owned companies are accounted for using the equity method of accounting when the ability to exercise significant influence is maintained. The share of net income or losses of equity investments is included in other (income)/expense. Equity investments are reviewed for impairment by assessing if the decline in market value of the investment below the carrying value is other than temporary, which considers the intent and ability to retain the investment, the duration and extent that the market value has been less than cost and the investee's financial condition. Inventory Valuation Inventories are stated at the lower of average cost or market. Property, Plant and Equipment and Depreciation Expenditures for additions, renewals and improvements are capitalized at cost. Depreciation is computed on a straight-line method based on the estimated useful lives of the related assets ranging from 20 to 50 years for buildings and 3 to 20 years for machinery, equipment and fixtures. Impairment of Long-Lived Assets Current facts or circumstances are periodically evaluated to determine if the carrying value of depreciable assets to be held and used may not be recoverable. If such circumstances exist, an estimate of undiscounted future cash flows generated by the long-lived asset, or appropriate grouping of assets, is compared to the carrying value to determine whether an impairment exists at its lowest level of identifiable cash flows. If an asset is determined to be impaired, the loss is measured based on the difference between the asset’s fair value and its carrying value. An estimate of the asset’s fair value is based on quoted market prices in active markets, if available. If quoted market prices are not available, the estimate of fair value is based on various valuation techniques using Level 3 fair value inputs, including a discounted value of estimated future cash flows. Capitalized Software Eligible costs to obtain internal use software are capitalized and amortized over the estimated useful life of the software. Business Combinations Businesses acquired are consolidated upon obtaining control. The fair value of assets acquired and liabilities assumed are recognized at the date of acquisition. Any excess of the purchase price over the estimated fair values of the net assets acquired is recognized as goodwill. Business acquisition costs are expensed when incurred. Goodwill, Acquired In-Process Research and Development and Other Intangible Assets The fair value of intangible assets is typically determined using the “income method” utilizing Level 3 fair value inputs. The market participant valuations assume a global view considering all potential jurisdictions and indications based on discounted after-tax cash flow projections, risk adjusted for estimated probability of technical and regulatory success (for IPRD). Finite-lived intangible assets, including licenses, developed technology rights and IPRD projects that reach commercialization are amortized on a straight-line basis over their estimated useful life. Estimated useful lives are determined considering the period the assets are expected to contribute to future cash flows. Goodwill is tested at least annually for impairment by assessing qualitative factors or performing a quantitative analysis in determining whether it is more likely than not that the fair value of net assets are below their carrying amounts. Examples of qualitative factors assessed in 2015 include our share price, financial performance compared to budgets, long-term financial plans, macroeconomic, industry and market conditions as well as the substantial excess of fair value over the carrying value of net assets from the annual impairment test performed in a prior year. Each relevant factor is assessed both individually and in the aggregate. IPRD is tested for impairment on an annual basis and more frequently if events occur or circumstances change that would indicate a potential reduction in the fair values of the assets below their carrying value. If the carrying value of IPRD is determined to exceed the fair value, an impairment loss is recognized for the difference. Finite-lived intangible assets are tested for impairment when facts or circumstances suggest that the carrying value of the asset may not be recoverable. If the carrying value exceeds the projected undiscounted pretax cash flows of the intangible asset, an impairment loss equal to the excess of the carrying value over the estimated fair value (discounted after-tax cash flows) is recognized. Restructuring Restructuring charges are recognized as a result of actions to streamline operations and rationalize manufacturing facilities. Estimating the impact of restructuring plans, including future termination benefits and other exit costs requires judgment. Actual results could vary from these estimates. Contingencies Loss contingencies from legal proceedings and claims may occur from a wide range of matters, including government investigations, shareholder lawsuits, product and environmental liability, contractual claims and tax matters. Accruals are recognized when it is probable that a liability will be incurred and the amount of loss can be reasonably estimated. Gain contingencies (including contingent proceeds related to the divestitures) are not recognized until realized. Legal fees are expensed as incurred. Shipping and Handling Costs Shipping and handling costs are included in marketing, selling and administrative expenses and were $85 million in 2015, $115 million in 2014 and $119 million in 2013. Advertising and Product Promotion Costs Advertising and product promotion costs are included in marketing, selling and administrative expenses and were $825 million in 2015, $734 million in 2014 and $855 million in 2013. Advertising and product promotion costs are expensed as incurred. Foreign Currency Translation Foreign subsidiary earnings are translated into U.S. dollars using average exchange rates. The net assets of foreign subsidiaries are translated into U.S. dollars using current exchange rates. The U.S. dollar effects that arise from translating the net assets of these subsidiaries at changing rates are recognized in OCI. Research and Development Research and development costs are expensed as incurred. Clinical study costs are accrued over the service periods specified in the contracts and adjusted as necessary based upon an ongoing review of the level of effort and costs actually incurred. Strategic alliances with third parties provide licensing rights to develop, manufacture, market and/or sell pharmaceutical products, the rights to which are owned by the other party. Research and development is recognized net of reimbursements in connection with alliance agreements. Upfront and contingent milestone payments for asset acquisitions of investigational compounds are also included in research and development expenses. Cash Flow Upfront and contingent milestone payments for licensing of investigational compounds are included in operating activities and asset or business acquisitions are included in investing activities. Divestiture proceeds are included in investing activities as well as royalties and other consideration received subsequent to the related sale of the asset or business. Other adjustments reflected in operating activities include divestiture gains and losses and related royalties, research and development asset acquisition charges, gains and losses on debt redemption and changes in the fair value of written option liabilities. Recently Issued Accounting Standards In January 2016, the Financial Accounting Standards Board (FASB) issued amended guidance to the recognition, measurement, presentation and disclosures of financial instruments effective January 1, 2018 with early adoption not permitted. The new guidance requires that fair value adjustments for equity securities with readily determinable fair values currently classified as available-for-sale be reported through earnings. The new guidance also requires a qualitative impairment assessment for equity investments without a readily determinable fair value and would require an impairment charge through earnings if the assessment indicates an impairment exists. The Company is assessing the potential impact of the new standard on our consolidated financial statements. In November 2015, the FASB issued amended guidance on the presentation of deferred tax assets and liabilities. The new guidance requires all deferred tax assets and liabilities to be classified as non-current. BMS elected to early adopt this standard as of December 31, 2015 prospectively. Refer to "—Note 8. Income taxes" for further information. In April 2015, the FASB issued amended guidance on the presentation of debt issuance costs. The new guidance requires debt issuance costs to be presented as a reduction to the carrying value of debt in the balance sheet, consistent with debt discounts. BMS elected to early adopt this standard as of December 31, 2015. The adoption of this standard did not have a material impact on our consolidated financial statements. Refer to "—Note 10. Financial Instruments and Fair Value Measurements" for further information. In May 2014, the FASB issued a new standard related to revenue recognition, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The new standard will replace most of the existing revenue recognition standards in U.S. GAAP when it becomes effective. In July 2015, the FASB decided to delay the effective date by one year to January 1, 2018. Early adoption is permitted no earlier than 2017. The new standard can be applied retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of the change recognized at the date of the initial application in retained earnings. The Company is assessing the potential impact of the new standard on financial reporting and has not yet selected a transition method. In April 2014, the FASB issued amended guidance on the use and presentation of discontinued operations in an entity's consolidated financial statements. The new guidance restricts the presentation of discontinued operations to business circumstances when the disposal of business operations represents a strategic shift that has or will have a major effect on an entity's operations and financial results. The guidance became effective on January 1, 2015. |
BUSINESS SEGMENT INFORMATION |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting Disclosure [Text Block] | BUSINESS SEGMENT INFORMATION BMS operates in a single segment engaged in the discovery, development, licensing, manufacturing, marketing, distribution and sale of innovative medicines that help patients prevail over serious diseases. A global research and development organization and supply chain organization are responsible for the discovery, development, manufacturing and supply of products. Regional commercial organizations market, distribute and sell the products. The business is also supported by global corporate staff functions. Segment information is consistent with the financial information regularly reviewed by the chief executive officer for purposes of evaluating performance, allocating resources, setting incentive compensation targets, and planning and forecasting future periods. Products are sold principally to wholesalers, and to a lesser extent, directly to distributors, retailers, hospitals, clinics, government agencies and pharmacies. Gross revenues to the three largest pharmaceutical wholesalers in the U.S. as a percentage of global gross revenues were as follows:
Selected geographic area information was as follows:
Product revenues were as follows:
The composition of total revenues was as follows:
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ALLIANCES |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Alliances[Text Block] | ALLIANCES BMS enters into collaboration arrangements with third parties for the development and commercialization of certain products. Although each of these arrangements is unique in nature, both parties are active participants in the operating activities of the collaboration and exposed to significant risks and rewards depending on the commercial success of the activities. BMS may either in-license intellectual property owned by the other party or out-license its intellectual property to the other party. These arrangements also typically include research, development, manufacturing, and/or commercial activities and can cover a single investigational compound or commercial product or multiple compounds and/or products in various life cycle stages. The rights and obligations of the parties can be global or limited to geographic regions. We refer to these collaborations as alliances and our partners as alliance partners. Several key products such as Sustiva (Atripla*), Empliciti, Erbitux*, Opdivo, Sprycel, Yervoy, Abilify*, Orencia and Eliquis, as well as products comprising the diabetes alliance discussed below and certain mature and other brands were included in alliance arrangements. Payments between alliance partners are accounted for and presented in the results of operations after considering the specific nature of the payment and the underlying activities to which the payments relate. Multiple alliance activities, including the transfer of rights, are only separated into individual units of accounting if they have standalone value from other activities that occur over the life of the arrangements. In these situations, the arrangement consideration is allocated to the activities or rights on a relative selling price basis. If multiple alliance activities or rights do not have standalone value, they are combined into a single unit of accounting. The most common activities between BMS and its alliance partners are presented in results of operations as follows:
Selected financial information pertaining to our alliances was as follows, including net product sales when BMS is the principal in the third-party customer sale for products subject to the alliance. Expenses summarized below do not include all amounts attributed to the activities for the products in the alliance, but only the payments between the alliance partners or the related amortization if the payments were deferred or capitalized.
BMS entered into certain licensing and alliance agreements in 2015 (including options to license or acquire the related assets). Upfront payments for these new agreements charged to research and development expenses were $619 million in 2015. The prior period amounts disclosed in research and development expenses for upfront payments to alliance partners were revised to include similar type of payments. Specific information pertaining to each of our significant alliances is discussed below, including their nature and purpose; the significant rights and obligations of the parties; specific accounting policy elections; and the income statement classification of and amounts attributable to payments between the parties. Pfizer BMS and Pfizer, Inc. (Pfizer) are parties to a worldwide co-development and co-commercialization agreement for Eliquis, an anticoagulant discovered by BMS. Pfizer funds between 50% and 60% of all development costs depending on the study. Profits and losses are shared equally on a global basis except for in certain countries where Pfizer commercializes Eliquis and pays BMS compensation based on a percentage of net sales. Upon entering into the agreement, co-exclusive license rights for the product were granted to Pfizer in exchange for an upfront payment and potential milestone payments. Both parties assumed certain obligations to actively participate in the alliance and actively participate in a joint executive committee and various other operating committees and have joint responsibilities for the research, development, distribution, sales and marketing activities of the alliance using resources in their own infrastructures. BMS manufactures the product in the alliance and is the principal in the end customer product sales in the U.S., significant countries in Europe, as well as Canada, Australia, China, Japan and South Korea. In 2015, BMS transferred full commercialization rights to Pfizer in certain smaller countries in order to simplify operations. In the transferred countries, BMS supplies the product to Pfizer at cost plus a percentage of the net sales to end-customers. The Company determined the rights transferred to Pfizer did not have standalone value as such rights were not sold separately by BMS or any other party, nor could Pfizer receive any benefit for the delivered rights without the fulfillment of other ongoing obligations by BMS under the alliance agreement, including the exclusive supply arrangement. As such, the global alliance was treated as a single unit of accounting and upfront proceeds and any subsequent contingent milestone proceeds are amortized over the life of the related product. BMS received $884 million in non-refundable upfront, milestone and other licensing payments related to Eliquis through December 31, 2015. Amortization of the Eliquis deferred income is included in other income as Eliquis was not a commercial product at the commencement of the alliance. Summarized financial information related to this alliance was as follows:
Gilead BMS and Gilead Sciences, Inc. (Gilead) have joint ventures in the U.S. (for the U.S. and Canada) and in Europe to develop and commercialize Atripla* (efavirenz 600 mg/ emtricitabine 200 mg/ tenofovir disoproxil fumarate 300 mg), combining Sustiva, a product of BMS, and Truvada* (emtricitabine and tenofovir disoproxil fumarate), a product of Gilead. The joint ventures are consolidated by Gilead. Both parties actively participate in a joint executive committee and various other operating committees with direct oversight over the activities of the joint ventures. The joint ventures purchase Sustiva and Truvada* active pharmaceutical ingredient (API) in bulk form from the parties and complete the finishing of Atripla*. The joint ventures or Gilead sell and distribute Atripla* and are the principal in the end customer product sales. The parties no longer coordinate joint promotional activities. Alliance and other revenue recognized for Atripla* include only the bulk efavirenz component of Atripla* which is based on the relative ratio of the average respective net selling prices of Truvada* and Sustiva. Alliance and other revenue is deferred and the related alliance receivable is not recognized until the combined product is sold to third-party customers. In Europe, following the 2013 loss of exclusivity of Sustiva and effective January 1, 2014, the percentage of Atripla* net sales in Europe recognized by BMS is equal to the difference between the average net selling prices of Atripla* and Truvada*. This alliance will continue in Europe until either party terminates the arrangement or the last patent expiration occurs for Atripla*, Truvada*, or Sustiva. In the U.S., the agreement may be terminated by Gilead upon the launch of a generic version of Sustiva or by BMS upon the launch of a generic version of Truvada*. In the event Gilead terminates the agreement upon the loss of exclusivity for Sustiva, BMS will receive a quarterly royalty payment for 36 months following termination. Such payment in the first 12 months following termination is equal to 55% of Atripla* net sales multiplied by the ratio of the difference in the average net selling prices of Atripla* and Truvada* to the Atripla* average net selling price. In the second and third years following termination, the payment to BMS is reduced to 35% and 15%, respectively, of Atripla* net sales multiplied by the price ratio described above. BMS will continue to supply Sustiva at cost plus a markup to the joint ventures during this three-year period, unless either party elects to terminate the supply arrangement. In 2011, we entered into a licensing agreement with Gilead to develop and commercialize a fixed-dose combination containing Reyataz and Gilead’s cobicistat, a pharmacoenhancing or “boosting” agent that increases blood levels of certain human immunodeficiency virus (HIV) medicines to potentially allow for one pill once daily dosing. Evotaz (atazanavir 300 mg and cobicistat 150 mg) was approved by the U.S. Food and Drug Administration (FDA) in January 2015 and the European Commission (EC) in July 2015. Summarized financial information related to this alliance was as follows:
Otsuka BMS has a worldwide commercialization agreement with Otsuka Pharmaceutical Co., Ltd. (Otsuka), to co-develop and co-promote Abilify*, excluding certain Asian countries. The U.S. portion of the agreement expired in April 2015. The agreement expired in all European Union (EU) countries in June 2014 and in each other non-U.S. country where we have the exclusive right to sell Abilify*, the agreement expires on the later of April 20, 2015 or loss of exclusivity in any such country. Both parties actively participated in joint executive governance and operating committees. Otsuka was responsible for providing all sales force efforts in the U.S. effective January 2013, however, BMS was responsible for certain operating expenses up to various annual limits. BMS purchased the API from Otsuka and completed the manufacturing of the product for subsequent sale to third-party customers in the U.S. and certain other countries. Otsuka assumed responsibility for providing and funding sales force efforts in the EU effective April 2013. BMS also provided certain other services including distribution, customer management and pharmacovigilence. BMS is the principal for the end customer product sales where it is the exclusive distributor for or has an exclusive right to sell Abilify*. Otsuka was the principal for the end customer product sales in the U.S. and in the EU. Alliance and other revenue only includes BMS’s share of total net sales to third-party customers in these territories. BMS’s contractual share for U.S. net sales is set forth in the table below. An assessment of BMS's expected annual contractual share was completed each quarterly reporting period and adjusted based upon reported U.S. Abilify* net sales at year end. BMS's annual contractual share was 50% in 2015, 33% in 2014 and 34% in 2013. The alliance and other revenue recognized in any interim period or quarter did not exceed the amounts that were due under the contract.
BMS’s contractual share of third-party net sales was 65% in the EU. In these countries and the U.S., alliance and other revenue was recognized when Abilify* was shipped and all risks and rewards of ownership had been transferred to third-party customers. BMS and Otsuka also have an alliance for Sprycel in the U.S., Japan and the EU (the Oncology Territory). Both parties co-promote the product in the U.S. and EU. In February 2015, the co-promotion agreement with Otsuka was terminated in Japan. Both parties actively participate in various governance committees, however, BMS has control over the decision making. BMS is responsible for the development and manufacture of the product and is also the principal in the end customer product sales. Ixempra* (ixabepilone) was included in the above alliance prior to BMS's divestiture of that business in 2015. A fee is paid to Otsuka based on the following percentages of combined annual net sales of Sprycel and Ixempra* in the Oncology Territory (including post divestiture Ixempra* sales):
During these annual periods, Otsuka contributes 20% of the first $175 million of certain commercial operational expenses relating to the Oncology Products in the Oncology Territory and 1% of such costs in excess of $175 million. Summarized financial information related to this alliance was as follows:
Lilly BMS had a commercialization agreement with Eli Lilly and Company (Lilly) through Lilly’s subsidiary ImClone for the co-development and promotion of Erbitux* in the U.S., Canada and Japan. Both parties actively participated in a joint executive committee and various other operating committees and shared responsibilities for research and development using resources in their own infrastructures. Lilly manufactured bulk requirements for Erbitux* in its own facilities and filling and finishing was performed by a third party for which BMS had oversight responsibility. BMS had exclusive distribution rights in North America and was responsible for promotional efforts in North America although Lilly had the right to co-promote in the U.S. at their own expense. BMS was the principal in the end customer product sales in North America and paid Lilly a distribution fee for 39% of Erbitux* net sales in North America plus a share of certain royalties paid by Lilly. BMS’s rights and obligations with respect to the commercialization of Erbitux* in North America would have expired in September 2018. In October 2015, BMS transferred its rights to Erbitux* in North America to Lilly in exchange for sales-based royalties as described below. The transferred rights include, but are not limited to, full commercialization and manufacturing responsibilities. The transaction was accounted for as a business divestiture and resulted in a non-cash charge of $171 million for intangible assets directly related to the business and an allocation of goodwill. BMS will receive royalties through September 2018, which is included in other income when earned. The royalty rates applicable to North America are 38% on Erbitux* net sales up to $165 million in 2015, $650 million in 2016, $650 million in 2017 and $480 million in 2018, plus 20% on net sales in excess of those amounts in each of the respective years. BMS shared rights to Erbitux* in Japan under an agreement with Lilly and Merck KGaA and received 50% of the pretax profit from Merck KGaA’s net sales of Erbitux* in Japan which was further shared equally with Lilly. BMS transferred its co-commercialization rights in Japan to Merck KGaA in 2015 in exchange for sales-based royalties through 2032 which is included in other income when earned. In March 2013, BMS and Lilly terminated its arrangement for necitumumab (IMC-11F8), with all rights returning to Lilly. Discovered by ImClone, necitumumab is a fully human monoclonal antibody that was part of the alliance between BMS and Lilly. Summarized financial information related to this alliance was as follows:
AstraZeneca Prior to the diabetes business divestiture discussed below, BMS had an alliance with AstraZeneca consisting of three worldwide co-development and commercialization agreements covering (1) Onglyza* and related combination products sold under various names, (2) Farxiga* and related combination products and, (3) beginning in August 2012 after BMS's acquisition of Amylin Pharmaceuticals, Inc. (Amylin), Amylin's portfolio of products including Bydureon*, Byetta*, Symlin* and Myalept*, as well as certain assets owned by Amylin, including a manufacturing facility located in West Chester, Ohio. Co-exclusive license rights for the product or products underlying each agreement were granted to AstraZeneca in exchange for an upfront payment and potential milestone payments, and both parties assumed certain obligations to actively participate in the alliance. Both parties actively participated in a joint executive committee and various other operating committees and had joint responsibilities for the research, development, distribution, sales and marketing activities of the alliance using resources in their own infrastructures. BMS manufactured the products in all three alliances and was the principal in the end customer product sales in substantially all countries. For each alliance agreement, the rights transferred to AstraZeneca did not have standalone value as such rights were not sold separately by BMS or any other party, nor could AstraZeneca have received any benefit for the delivered rights without the fulfillment of other ongoing obligations by BMS under the alliance agreements, including the exclusive supply arrangement. As such, each global alliance was treated as a single unit of accounting. As a result, upfront proceeds and any subsequent contingent milestone proceeds were amortized over the life of the related products. In 2012, BMS received a $3.6 billion non-refundable, upfront payment from AstraZeneca in consideration for entering into the Amylin alliance. In 2013, AstraZeneca exercised its option for equal governance rights over certain key strategic and financial decisions regarding the Amylin alliance and paid BMS $135 million as consideration. These payments were accounted for as deferred income and amortized based on the relative fair value of the predominant elements included in the alliance over their estimated useful lives (intangible assets related to Bydureon* with an estimated useful life of 13 years, Byetta* with an estimated useful life of 7 years, Symlin* with an estimated life of 9 years, Myalept* with an estimated useful life of 12 years, and the Amylin manufacturing plant with an estimated useful life of 15 years). The amortization was presented as a reduction to cost of products sold because the alliance assets were acquired shortly before the commencement of the alliance and AstraZeneca was entitled to share in the proceeds from the sale of any of the assets. The amortization of the acquired Amylin intangible assets and manufacturing plant was also presented in cost of products sold. BMS was entitled to reimbursements for 50% of capital expenditures related to the acquired Amylin manufacturing facility. BMS and AstraZeneca also shared in certain tax attributes related to the Amylin alliance. Prior to the termination of the alliance, BMS received non-refundable upfront, milestone and other licensing payments of $300 million related to Onglyza* and $250 million related to Farxiga*. Amortization of the Onglyza* and Farxiga* deferred income was included in other income as Onglyza* and Farxiga* were not commercial products at the commencement of the alliance. Both parties also shared most commercialization and development expenses equally, as well as profits and losses. In February 2014, BMS and AstraZeneca terminated their alliance agreements and BMS sold to AstraZeneca substantially all of the diabetes business comprising the alliance. The divestiture included the shares of Amylin and the resulting transfer of its Ohio manufacturing facility; the intellectual property related to Onglyza* and Farxiga* (including BMS's interest in the out-licensing agreement for Onglyza* in Japan); and the purchase of BMS’s manufacturing facility located in Mount Vernon, Indiana in 2015. Substantially all employees dedicated to the diabetes business were transferred to AstraZeneca. BMS and AstraZeneca entered into several agreements in connection with the sale, including a supply agreement, a development agreement and a transitional services agreement. Under those agreements, BMS is obligated to supply certain products, including the active product ingredients for Onglyza* and Farxiga* through 2020; to perform ongoing development activities for certain clinical trial programs through 2016; and to provide transitional services such as accounting, financial services, customer service, distribution, regulatory, development, information technology and certain other administrative services for various periods in order to facilitate the orderly transfer of the business operations. Annual costs attributed to the development agreement are not expected to exceed approximately $115 million for 2016. Consideration for the transaction includes a $2.7 billion payment at closing; contingent regulatory and sales-based milestone payments of up to $1.4 billion (including $800 million related to approval milestones and $600 million related to sales-based milestones, payable in 2020); royalty payments based on net sales through 2025 and payments up to $225 million if and when certain assets are transferred to AstraZeneca. AstraZeneca will also pay BMS for any required product supply at a price approximating the product cost as well as negotiated transitional service fees. Royalty rates on net sales are as follows:
The stock and asset purchase agreement contains multiple elements to be delivered subsequent to the closing of the transaction, including the China diabetes business (transferred in 2014), the Mount Vernon, Indiana manufacturing facility (transferred in 2015), and the activities under the development and supply agreements. Each of these elements was determined to have a standalone value. As a result, a portion of the consideration received at closing was allocated to the undelivered elements using the relative selling price method after determining the best estimated selling price for each element. The remaining amount of consideration was included in the calculation for the gain on sale of the diabetes business. Contingent milestone and royalty payments are similarly allocated among the underlying elements if and when the amounts are determined to be payable to BMS. Amounts allocated to the sale of the business are immediately recognized in the results of operations. Amounts allocated to the other elements are recognized in the results of operations only to the extent each element has been delivered. Consideration of $3.8 billion was accounted for in 2014 (including royalties and $700 million of contingent regulatory milestone payments related to the approval of Farxiga* in both the U.S. and Japan). Approximately $3.3 billion of the consideration was allocated to the sale of the business and the remaining $492 million was allocated to the undelivered elements described above. The consideration includes $235 million of earned royalties, including $192 million allocated to elements that were delivered. The gain on sale of the diabetes business was $536 million, including $292 million during the third quarter of 2014 resulting primarily from the transfer of the China diabetes business to AstraZeneca. The gain was based on the difference between the consideration allocated to the sale of the business excluding royalties (net of transaction fees) and the carrying value of the diabetes business net assets (including a $600 million allocation of goodwill and the reversal of $821 million of net deferred tax liabilities attributed to Amylin). Consideration of $179 million was received in 2015 for the transfer of the Mount Vernon, Indiana manufacturing facility and related inventories resulting in a gain of $79 million for the amounts allocated to the delivered elements. Consideration allocated to the development and supply agreements will continue to be amortized over the applicable service periods. Amortization of deferred income attributed to the development agreement was included in other income as the sale of these services are not considered part of BMS’s ongoing major or central operations. Revenues attributed to the supply agreement were included in alliance and other revenues. Consideration for the transaction is presented for cash flow purposes based on the allocation process described above, either as an investing activity if attributed to the sale of the business or related assets or as an operating activity if attributed to the transitional services, supply arrangement or development agreement. In September 2015, BMS transferred a percentage of its future royalty rights on Amylin net product sales in the U.S. to CPPIB Credit Europe S.A.R.L., a Luxembourg private limited liability company (CPPIB). The transferred rights represent approximately 70% of potential future royalties BMS is entitled to in 2019 to 2025. In exchange for the transfer, BMS will receive an additional tiered-based royalty on Amylin net product sales in the U.S. from CPPIB in 2016 through 2018, which will be included in other income when earned. Summarized financial information related to the AstraZeneca alliances was as follows:
Sanofi BMS and Sanofi have co-development and co-commercialization agreements for Plavix* and Avapro*/Avalide*. Effective January 1, 2013, Sanofi assumed essentially all of the worldwide operations of the alliance with the exception of Plavix* in the U.S. and Puerto Rico where BMS is the operating partner with a 50.1% controlling interest. In exchange for the rights transferred to Sanofi, BMS receives quarterly royalties from January 1, 2013 until December 31, 2018 and a terminal payment from Sanofi of $200 million at the end of 2018. Royalties received from Sanofi in the territory covering the Americas and Australia, opt-out markets, and former development royalties are presented in alliance and other revenues and were $211 million in 2015, $223 million in 2014 and $220 million in 2013. Royalties attributed to the territory covering Europe and Asia continue to be earned by the territory partnership and are included in equity in net income of affiliates. Alliance and other revenues attributed to the supply of irbesartan API to Sanofi were $80 million in 2015, $90 million in 2014 and $116 million in 2013. The supply arrangement for irbesartan expired in 2015. Summarized financial information related to this alliance was as follows:
The following is summarized financial information for interests in the partnerships with Sanofi for the territory covering Europe and Asia, which are not consolidated but are accounted for using the equity method:
Cost of products sold for the territory covering Europe and Asia includes discovery royalties of $22 million in 2015, $32 million in 2014 and $38 million in 2013, which are paid directly to Sanofi. All other expenses are shared based on the applicable ownership percentages. Current assets and current liabilities include approximately $76 million in 2015, $94 million in 2014 and $108 million in 2013 related to receivables/payables attributed to cash distributions to BMS and Sanofi as well as intercompany balances between partnerships within the territory. Ono BMS is the principal in the end customer product sales and has the exclusive right to develop, manufacture and commercialize Opdivo, an anti-PD-1 human monoclonal antibody being investigated as an anti-cancer treatment, in all territories worldwide except Japan, South Korea and Taiwan (where Ono Pharmaceutical Co., Ltd (Ono) was responsible for all development and commercialization prior to the arrangement described below). Ono is entitled to receive royalties following regulatory approvals in all territories excluding the three countries listed above. Royalty rates on net sales are 4% in North America and 15% in all other applicable territories, subject to customary adjustments. The alliance arrangement was expanded in July 2014 to establish collaboration activities in Japan, South Korea and Taiwan pertaining to Opdivo and several BMS compounds including Yervoy, lirilumab, urelumab and BMS-986016 (anti-LAG3). Both parties have the right and obligation to jointly develop and commercialize the compounds. BMS is responsible for supply of the products. Profits, losses and development costs are shared equally for all combination therapies involving compounds of both parties. Otherwise, sharing is 80% and 20% for activities involving only one of the party’s compounds. BMS and Ono also have an alliance to co-develop and co-commercialize Orencia in Japan. BMS is responsible for the order fulfillment and distribution of the intravenous formulation and Ono is responsible for the subcutaneous formulation. Both formulations are jointly promoted by both parties with assigned customer accounts and BMS is responsible for the product supply. A co-promotion fee of 60% is paid to the other party when a sale is made to that party’s assigned customer. Summarized financial information related to this alliance was as follows:
AbbVie BMS and AbbVie Inc. (AbbVie) have an alliance for Empliciti, a humanized monoclonal antibody for the treatment of multiple myeloma. Under the terms of the alliance, BMS was granted exclusive global rights to co-develop and commercialize Empliciti from PDL BioPharma, Inc. (now part of AbbVie). AbbVie currently participates in joint development and U.S. commercialization committees which BMS has final decision making authority. Both parties are co-developing the product and AbbVie funds 20% of global development costs. BMS is solely responsible for supply, distribution and sales and marketing activities within the alliance and is the principal in the end customer product sales. AbbVie shares 30% of all profits and losses in the U.S. and will be paid tiered royalties on net sales of Empliciti outside of the U.S. In addition, AbbVie is also entitled to receive milestone payments from BMS if certain regulatory events and sales thresholds are achieved. The agreement may be terminated at will by BMS (subsequent to a notice period) or by either party for material breach by the other party. The financial information related to this alliance was not material for the years ended December 31, 2015, 2014 and 2013. F-Star In October 2014, BMS entered into an agreement with F-Star Alpha Ltd. (F-Star). The agreement provides BMS with an exclusive option to purchase F-Star and its Phase I ready lead asset FS102, a targeted therapy in development for the treatment of breast and gastric cancer among a well-defined population of HER2-positive patients. BMS paid $50 million to F-Star and its shareholders in 2014 in consideration for the option grant and certain licensing rights (included in research and development expenses) and is responsible for conducting and funding the development of FS102. The option is exercisable at BMS's discretion and expires upon the earlier of 60 days following obtaining proof of concept or June 2018. An additional $100 million will be payable upon the exercise of the option plus an additional aggregate consideration of up to $325 million for contingent development and regulatory approval milestone payments in the U.S. and Europe. BMS is not obligated to provide any additional financial support to F-Star. F-Star was determined not to be a business as defined in ASC 805 - Business Combinations. As a result, contingent consideration was not included in the purchase price and no goodwill was recognized. However, F-Star is a variable interest entity as its equity holders lack the characteristics of a controlling financial interest. BMS was determined to be the primary beneficiary because of both its power to direct the activities most significantly and directly impacting the economic performance of the entity and its option rights described above. Upon consolidation in 2014, noncontrolling interest was credited by $59 million to reflect the fair value of the FS102 IPRD asset ($75 million) and deferred tax liabilities. Promedior In September 2015, BMS purchased a warrant that gives BMS the exclusive right to acquire Promedior, Inc. (Promedior), a biotechnology company whose lead asset, PRM-151, is being developed for the treatment of idiopathic pulmonary fibrosis (IPF) and myelofibrosis (MF). The warrant is exercisable upon completion of either of the IPF or MF Phase II clinical studies being conducted by Promedior, which is expected to occur no earlier than 2017. The upfront payment allocated to the warrant was $84 million and included in research and development expenses in the third quarter of 2015. The remaining $66 million of the $150 million upfront payment was allocated to Promedior’s obligation to complete the Phase II studies which will be amortized over the expected period of the Phase II studies. The allocation was determined using level 3 inputs. Following BMS's review of the Phase II clinical study results, if BMS elects to exercise the warrant it will be obligated to pay an additional $300 million (if based on the IPF study results) or $250 million (if based on the MF study results), plus additional aggregate consideration of up to $800 million for contingent development and regulatory approval milestone payments in the U.S. and Europe. Five Prime In November 2015, BMS and Five Prime Therapeutics, Inc. (Five Prime) entered into an exclusive worldwide licensing and collaboration agreement for the development and commercialization of Five Prime’s colony stimulating factor 1 receptor (CSF1R) antibody program, including FPA008 currently in Phase I development for immunology and oncology indications. BMS will be responsible for the development, manufacturing and commercialization of FPA008, subject to Five Prime’s option to conduct certain studies at its cost to develop FPA008 in pigmented vilonodular synovitis (PVNS) and in combination with its own internal oncology pipeline assets. Five Prime also retained an option to co-promote in the U.S. The agreement replaces a previous clinical collaboration agreement between the two parties. In consideration for licensing rights, BMS made an upfront payment of $350 million in the fourth quarter of 2015 which was included in research and development expense. BMS will also be committed to pay up to $1.4 billion upon the achievement of contingent development and regulatory milestones as well as future royalties if the product is approved and commercialized. Reckitt Benckiser Group In May 2013, BMS and Reckitt Benckiser Group plc (Reckitt) started a three-year alliance for several over-the-counter-products sold primarily in Mexico and Brazil. Reckitt received the right to sell, distribute and market the products through May 2016. BMS receives royalties on net sales of the products and exclusively supplies certain of the products to Reckitt pursuant to a supply agreement at cost plus a markup. Certain limited assets, including the market authorizations and certain employees directly attributed to the business, were transferred to Reckitt at the start of the alliance period. BMS retained ownership of all other assets related to the business including the trademarks covering the products. In the framework of the alliance, BMS also granted Reckitt an option to acquire the trademarks, inventory and certain other assets exclusively related to the products at the end of the alliance period at a price determined primarily based upon a multiple of sales from May 2014 through May 2016. In April 2014, the alliance was modified to provide an option to Reckitt to purchase a BMS manufacturing facility located in Mexico primarily dedicated to the products included in the alliance. In July 2015, Reckitt notified BMS that it was exercising its option. Substantially all employees at the facility are expected to be transferred to Reckitt. The closing is expected to occur in May 2016. Refer to "—Note 5. Assets Held-For-Sale” for further information. Non-refundable upfront proceeds of $485 million received by BMS in 2013 were allocated to two units of accounting, including the rights transferred to Reckitt and the fair value of the option to purchase the remaining assets using the best estimate of the selling price for these elements after considering various market factors. These market factors included an analysis of any estimated excess of the fair value of the business over the potential purchase price if the option is exercised. The fair value of the option was determined using Level 3 inputs and included in other liabilities. During 2015, BMS recognized other income of $123 million to decrease the fair value of the option to zero due to the strengthening of the U.S. dollar against local currencies. The anticipated proceeds are expected to approximate the fair value of the assets to be transferred. The amount allocated to the rights transferred to Reckitt is amortized as alliance and other revenue over the contractual term. Summarized financial information related to this alliance was as follows:
The Medicines Company In February 2013, BMS and The Medicines Company entered into a two-year alliance for Recothrom*, a recombinant thrombin for use as a topical hemostat to control non-arterial bleeding during surgical procedures (previously acquired by BMS in connection with its acquisition of ZymoGenetics, Inc. in 2010). The Medicines Company received the right to sell, distribute and market Recothrom* on a global basis for two years. BMS exclusively supplied Recothrom* to The Medicines Company at cost plus a markup and received royalties on net sales of Recothrom*. Certain employees directly attributed to the business and certain assets were transferred to The Medicines Company at the start of the alliance period, including the Biologics License Application and related regulatory assets. BMS retained all other assets related to Recothrom* including the patents, trademarks and inventory. BMS also granted The Medicines Company an option to acquire the patents, trademarks, inventory and certain other assets exclusively related to Recothrom* at a price determined based on a multiple of sales (plus the cost of any remaining inventory held by BMS at that time). The Medicines Company exercised the option and acquired the business for $132 million in February 2015. Refer to "—Note 5. Assets Held-For-Sale” for further information. Non-refundable upfront proceeds of $115 million received by BMS in 2013 were allocated to two units of accounting, including the rights transferred to The Medicines Company and the fair value of the option to purchase the remaining assets using the best estimate of the selling price for these elements after considering various market factors. These market factors included an analysis of any estimated excess of the fair value of the business over the potential purchase price if the option is exercised. The fair value of the option was $35 million at December 31, 2014 and was determined using Level 3 inputs and included in accrued expenses. The amount allocated to the rights transferred to The Medicines Company was amortized as alliance and other revenue over the contractual term. Summarized financial information related to this alliance was as follows:
Valeant In October 2012, BMS and PharmaSwiss SA, a wholly-owned subsidiary of Valeant Pharmaceuticals International, Inc. (Valeant) entered into an alliance for certain mature brand products in Europe. Valeant received the right to sell, distribute, and market the products in Europe through December 31, 2014. BMS exclusively supplied the products to Valeant at cost plus a markup. BMS also granted Valeant an option to acquire the trademarks and intellectual property exclusively related to the products at a price determined based on a multiple of sales. Valeant exercised the option and acquired the business for $61 million in January 2015. Refer to "—Note 5. Assets Held-For-Sale” for further information. Non-refundable upfront proceeds of $79 million received by BMS in 2012 were allocated to two units of accounting, including the rights transferred to Valeant and the fair value of the option to purchase the remaining assets using the best estimate of the selling price for these elements after considering various market factors. These market factors included an analysis of any estimated excess of the fair value of the business over the potential purchase price if the option is exercised. The fair value of the option was determined using Level 3 inputs and included in accrued expenses. A $16 million charge was included in other expenses to increase the fair value of the option to $34 million in 2014. The amount allocated to the rights transferred to Valeant was amortized as alliance and other revenue over the contractual term. Summarized financial information related to this alliance was as follows:
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ACQUISITIONS AND OTHER DIVESTITURES |
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Business Combinations [Abstract] | |
Acquisitions and other divestitures [Text Block] | ACQUISITIONS AND OTHER DIVESTITURES Cardioxyl Acquisition In December 2015, BMS acquired all of the outstanding shares of Cardioxyl Pharmaceuticals, Inc. (Cardioxyl), a privately held biotechnology company focused on the discovery and development of novel therapeutic agents for cardiovascular disease. The acquisition provided BMS with full rights to CXL-1427, a nitroxyl prodrug in Phase II development for acute decompensated heart failure. The consideration includes an upfront payment of $200 million and contingent development, regulatory and sales-based milestone payments of up to $1.9 billion. No significant Cardioxyl processes were acquired, therefore the transaction was accounted for as an asset acquisition because Cardioxyl was determined not to be a business as that term is defined in ASC 805 - Business Combinations. The consideration was allocated to CXL-1427 resulting in $167 million of research and development expenses and to net operating losses and tax credit carryforwards resulting in $33 million of deferred tax assets. Flexus Acquisition In April 2015, BMS acquired all of the outstanding shares of Flexus Biosciences, Inc. (Flexus), a privately held biotechnology company focused on the discovery and development of novel anti-cancer therapeutics. The acquisition provided BMS with full rights to F001287, a preclinical small molecule IDO1-inhibitor targeted immunotherapy. In addition, BMS acquired Flexus's IDO/TDO discovery program which includes its IDO-selective, IDO/TDO dual and TDO-selective compounds. The consideration includes an upfront payment of $800 million (plus acquisition costs) and contingent development and regulatory milestone payments of up to $450 million. No significant Flexus processes were acquired, therefore the transaction was accounted for as an asset acquisition because Flexus was determined not to be a business. The consideration was allocated to F001287 and the IDO/TDO discovery program resulting in $800 million of research and development expenses and to net operating losses and tax credit carryforwards resulting in $14 million of deferred tax assets. iPierian Acquisition In April 2014, BMS acquired all of the outstanding shares of iPierian, Inc. (iPierian), a biotechnology company focused on new treatments for tauopathies, a class of neurodegenerative diseases. The acquisition provided BMS with full rights to IPN007, a preclinical monoclonal antibody to treat progressive supranuclear palsy and other tauopathies. The consideration includes an upfront payment of $175 million, contingent development and regulatory milestone payments of up to $550 million and future royalties on net sales if any of the acquired preclinical assets are approved and commercialized. No significant iPierian processes were acquired, therefore the transaction was accounted for as an asset acquisition because iPierian was determined not to be a business. The consideration was allocated to IPN007 resulting in $148 million of research and development expenses and to net operating losses and tax credit carryforwards resulting in $27 million of deferred tax assets. Other Divestitures In addition to the divestiture transactions with AstraZeneca, Lilly, The Medicines Company and Valeant discussed in "—Note 3. Alliances", BMS divested its Ixempra* business and several other businesses or product lines in 2015. These other transactions generated net proceeds of $121 million resulting in pretax gains of $136 million (including a $40 million deferred gain from 2014). Additional contingent proceeds will be recognized in earnings when received. Revenues and pretax earnings related to these businesses were not material. |
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ASSETS HELD-FOR-SALE [Abstract] | |
Disposal Groups, Including Discontinued Operations, Disclosure [Text Block] | ASSETS HELD-FOR-SALE In December 2015, BMS agreed to sell its pipeline of investigational HIV medicines to ViiV Healthcare which includes a number of programs at different stages of discovery, preclinical and clinical development. The transaction excludes BMS’s HIV marketed medicines. Certain BMS employees will be offered the opportunity to transfer to ViiV Healthcare and BMS will provide certain R&D and other services over a transitional period. The transaction is expected to close in the first half of 2016 upon obtaining customary regulatory approvals and will be accounted for as a sale of a business. Consideration includes an upfront payment of $350 million, contingent development and regulatory milestone payments of up to $1.1 billion, sales-based milestone payments of up to $4.3 billion and future royalties if the products are approved and commercialized. BMS will also be reimbursed for the R&D and other services. Assets held-for-sale were $134 million at December 31, 2015, comprising primarily of goodwill related to the investigational HIV business and the business comprising an alliance with Reckitt. Assets held-for-sale were $109 million at December 31, 2014, comprising of inventory, goodwill and other intangible assets related to the businesses comprising the alliances with The Medicines Company and Valeant. The allocation of goodwill was based on the relative fair value of the businesses divested to the Company's reporting unit. |
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Other Income and Other Expense Disclosure [Text Block] | OTHER (INCOME)/EXPENSE Other (income)/expense includes:
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Restructuring and Related Activities Disclosure [Text Block] | RESTRUCTURING The following is the provision for restructuring:
Restructuring charges included employee termination benefits for manufacturing, selling, administrative, and research and development workforce reductions across all geographic regions of approximately 1,169 in 2015, 1,387 in 2014 and 1,450 in 2013. The restructuring actions were primarily related to specialty care transformation initiatives in 2015 and 2014 designed to create a more simplified organization across all functions and geographic markets, and sales force reductions in several European countries in 2013 following the restructuring of the Sanofi and Otsuka alliance agreements. Subject to local regulations, costs are not recognized until completion of discussions with works councils. The following table represents the activity of employee termination and other exit cost liabilities:
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INCOME TAXES |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Text Block] | INCOME TAXES The provision/(benefit) for income taxes consisted of:
Effective Tax Rate The reconciliation of the effective tax/(benefit) rate to the U.S. statutory Federal income tax rate was:
The effective tax rate is lower than the U.S. statutory rate of 35% primarily attributable to undistributed earnings of certain foreign subsidiaries that have been considered or are expected to be indefinitely reinvested offshore. U.S. taxes have not been provided on approximately $25 billion of undistributed earnings of foreign subsidiaries as of December 31, 2015. These undistributed earnings primarily relate to operations in Switzerland, Ireland and Puerto Rico. If these undistributed earnings are repatriated to the U.S. in the future, or if it were determined that such earnings are to be remitted in the foreseeable future, additional tax provisions would be required. Due to complexities in the tax laws and assumptions that would have to be made, it is not practicable to estimate the amounts of income taxes that will have to be provided. Reforms to U.S. tax laws related to foreign earnings have been proposed and if adopted, may increase taxes, which could reduce the results of operations and cash flows. BMS operates under a favorable tax grant in Puerto Rico not scheduled to expire prior to 2023. The divestiture of certain businesses resulted in capital loss tax benefits including $361 million from the sale of Amylin shares in 2014. Valuation allowances attributed to capital loss carryforwards were released in 2015 following the divestiture of Recothrom*, Ixempra* and other mature brands. Additional reserves of $123 million were established in 2014 for certain transfer pricing matters related to tax periods from 2008 through 2014. The retroactive reinstatement of the 2012 U.S. Federal research and development credit in 2013 resulted in additional tax credits of $82 million in 2013. Orphan drug credits are included in the U.S. Federal research based credits for all periods presented. Goodwill allocated to business divestitures (including the diabetes business in 2014) was not deductible for tax purposes as well as the U.S. Branded Prescription Drug Fee in all periods. Research and development charges resulting primarily from the acquisition of Flexus and Cardioxyl in 2015 and iPierian in 2014 were also not deductible for tax purposes. Deferred Taxes and Valuation Allowance The components of current and non-current deferred income tax assets/(liabilities) were as follows:
The Company has elected to early adopt Accounting Standard Update 2015-17 as of December 31, 2015 on a prospective basis, which results in all deferred taxes being reported as non-current on the balance sheet. Internal transfers of intellectual property resulted in deferred tax assets of $635 million and prepaid taxes of $484 million (included in other assets) at December 31, 2015. These assets are amortized over their expected lives. The U.S. Federal net operating loss carryforwards were $419 million at December 31, 2015. These carryforwards were acquired as a result of certain acquisitions and are subject to limitations under Section 382 of the Internal Revenue Code. The net operating loss carryforwards expire in varying amounts beginning in 2022. The U.S. Federal tax credit carryforwards expire in varying amounts beginning in 2017. The realization of the U.S. Federal tax credit carryforwards is dependent on generating sufficient domestic-sourced taxable income prior to their expiration. The capital loss carryforward available of $102 million is dependent on generating sufficient domestic-sourced capital gain income and is scheduled to expire in 2019. The foreign and state net operating loss carryforwards expire in varying amounts beginning in 2016 (certain amounts have unlimited lives). At December 31, 2015, a valuation allowance of $3,534 million was established for the following items: $3,090 million primarily for foreign net operating loss and tax credit carryforwards, $340 million for state deferred tax assets including net operating loss and tax credit carryforwards, $11 million for U.S. Federal net operating loss carryforwards and $29 million for U.S. Federal capital losses and $64 million for other U.S. Federal deferred tax assets. Changes in the valuation allowance were as follows:
Income tax payments were $577 million in 2015, $544 million in 2014 and $478 million in 2013. The current tax benefit realized as a result of stock related compensation credited to capital in excess of par value of stock was $147 million in 2015, $131 million in 2014 and $129 million in 2013. Business is conducted in various countries throughout the world and is subject to tax in numerous jurisdictions. A significant number of tax returns that are filed are subject to examination by various Federal, state and local tax authorities. Tax examinations are often complex, as tax authorities may disagree with the treatment of items reported requiring several years to resolve. Liabilities are established for possible assessments by tax authorities resulting from known tax exposures including, but not limited to, transfer pricing matters, tax credits and deductibility of certain expenses. Such liabilities represent a reasonable provision for taxes ultimately expected to be paid and may need to be adjusted over time as more information becomes known. The effect of changes in estimates related to contingent tax liabilities is included in the effective tax rate reconciliation above. A reconciliation of the beginning and ending amount of gross unrecognized tax benefits is as follows:
Additional information regarding unrecognized tax benefits is as follows:
Accrued interest and penalties payable for unrecognized tax benefits are included in either current or non-current income taxes payable. Interest and penalties related to unrecognized tax benefits are included in income tax expense. BMS is currently under examination by a number of tax authorities, including but not limited to the major tax jurisdictions listed in the table below, which have proposed or are considering proposing material adjustments to tax for issues such as transfer pricing, certain tax credits and the deductibility of certain expenses. BMS estimates that it is reasonably possible that the total amount of unrecognized tax benefits at December 31, 2015 will decrease in the range of approximately $270 million to $330 million in the next twelve months as a result of the settlement of certain tax audits and other events. The expected change in unrecognized tax benefits, primarily settlement related, will involve the payment of additional taxes, the adjustment of certain deferred taxes and/or the recognition of tax benefits. It is reasonably possible that new issues will be raised by tax authorities that may increase unrecognized tax benefits; however, an estimate of such increases cannot reasonably be made at this time. BMS believes that it has adequately provided for all open tax years by tax jurisdiction. The following is a summary of major tax jurisdictions for which tax authorities may assert additional taxes based upon tax years currently under audit and subsequent years that will likely be audited:
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EARNINGS PER SHARE |
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Earnings Per Share [Text Block] | EARNINGS PER SHARE
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FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS |
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Financial Instruments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Instruments [Text Block] | FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS Financial instruments include cash and cash equivalents, marketable securities, accounts receivable and payable, debt instruments and derivatives. Changes in exchange rates and interest rates create exposure to market risk. Certain derivative financial instruments are used when available on a cost-effective basis to hedge the underlying economic exposure. These instruments qualify as cash flow, net investment and fair value hedges upon meeting certain criteria, including effectiveness of offsetting hedged exposures. Changes in fair value of derivatives that do not qualify for hedge accounting are recognized in earnings as they occur. Derivative financial instruments are not used for trading purposes. Financial instruments are subject to counterparty credit risk which is considered as part of the overall fair value measurement. Counterparty credit risk is monitored on an ongoing basis and mitigated by limiting amounts outstanding with any individual counterparty, utilizing conventional derivative financial instruments and only entering into agreements with counterparties that meet high credit quality standards. The consolidated financial statements would not be materially impacted if any counterparty failed to perform according to the terms of its agreement. Collateral is not required by any party whether derivatives are in an asset or liability position under the terms of the agreements. Fair Value Measurements – The fair value of financial instruments are classified into one of the following categories: Level 1 inputs utilize unadjusted quoted prices in active markets accessible at the measurement date for identical assets or liabilities. The fair value hierarchy provides the highest priority to Level 1 inputs. Level 2 inputs utilize observable prices for similar instruments and quoted prices for identical or similar instruments in non-active markets. Additionally, certain corporate debt securities utilize a third-party matrix pricing model using significant inputs corroborated by market data for substantially the full term of the assets. Equity and fixed income funds are primarily invested in publicly traded securities valued at the respective net asset value of the underlying investments. There were no significant unfunded commitments or restrictions on redemptions related to equity and fixed income funds as of December 31, 2015. Level 2 derivative instruments are valued using London Interbank Offered Rate (LIBOR) yield curves, less credit valuation adjustments, and observable forward foreign exchange rates at the reporting date. Valuations of derivative contracts may fluctuate considerably from volatility in underlying foreign currencies and underlying interest rates driven by market conditions and the duration of the contract. Level 3 unobservable inputs are used when little or no market data is available. The fair value of written options to acquire outstanding shares or sell the assets of certain businesses (refer to “—Note 3. Alliances” for further discussion) is based on an option pricing methodology that considers revenue and profitability projections, volatility, discount rates, and potential exercise price assumptions. Financial assets and liabilities measured at fair value on a recurring basis are summarized below:
The following table summarizes the activity of the financial assets utilizing Level 3 fair value measurements:
Available-for-sale Securities The following table summarizes available-for-sale securities:
Available-for-sale securities included in current marketable securities were $1,782 million at December 31, 2015 and $1,759 million at December 31, 2014. All non-current available-for-sale corporate debt securities mature within five years at December 31, 2015. Equity investments of $60 million and $36 million were included in other assets at December 31, 2015 and 2014, respectively. Fair Value Option for Financial Assets Investments in equity and fixed income funds offsetting changes in fair value of certain employee retirement benefits were included in current marketable securities. Changes in fair value were not significant. Qualifying Hedges The following summarizes the fair value of outstanding derivatives:
Cash Flow Hedges — Foreign currency forward contracts are used to hedge certain forecasted intercompany inventory purchase transactions and certain other foreign currency transactions. The effective portion of changes in fair value for contracts designated as cash flow hedges are temporarily reported in accumulated other comprehensive loss and included in earnings when the hedged item affects earnings. The net gains on foreign currency forward contracts are expected to be reclassified to net earnings (primarily included in cost of products sold) within the next two years. The notional amount of outstanding foreign currency forward contracts was primarily attributed to the euro ($576 million) and Japanese yen ($746 million) at December 31, 2015. The fair value of a foreign currency forward contract attributed to the Japanese yen (notional amount of $445 million) not designated as a cash flow hedge was $5 million and was included in accrued expenses and other at December 31, 2015. In 2015, BMS entered into $750 million of forward starting interest rate swap contracts maturing in March 2017 to hedge the variability of probable forecasted interest expense associated with potential future issuances of debt. The contracts are designated as cash flow hedges with the effective portion of fair value changes included in other comprehensive income. The earnings impact related to discontinued cash flow hedges and hedge ineffectiveness was not significant during all periods presented. Cash flow hedge accounting is discontinued when the forecasted transaction is no longer probable of occurring within 60 days after the originally forecasted date or when the hedge is no longer effective. Assessments to determine whether derivatives designated as qualifying hedges are highly effective in offsetting changes in the cash flows of hedged items are performed at inception and on a quarterly basis. Net Investment Hedges — Non-U.S. dollar borrowings of €950 million ($1,041 million) are designated to hedge the foreign currency exposures of the net investment in certain foreign affiliates. These borrowings are designated as net investment hedges and recognized in long term debt. The effective portion of foreign exchange gains or losses on the remeasurement of the debt is recognized in the foreign currency translation component of accumulated other comprehensive loss with the related offset in long-term debt. Fair Value Hedges — Fixed-to-floating interest rate swap contracts are designated as fair value hedges used as an interest rate risk management strategy to create an appropriate balance of fixed and floating rate debt. The contracts and underlying debt for the hedged benchmark risk are recorded at fair value. The effective interest rate for the contracts is one-month LIBOR (0.43% as of December 31, 2015) plus an interest rate spread ranging from (0.8)% to 0.7%. When the underlying swap is terminated prior to maturity, the fair value basis adjustment to the underlying debt instrument is amortized as a reduction to interest expense over the remaining life of the debt. The notional amount of fixed-to-floating interest rate swap contracts executed was $200 million in 2014 and $2.1 billion in 2013. The notional amount of fixed-to-floating interest rate swap contracts terminated was $147 million in 2015 and $426 million in 2014 generating proceeds of $28 million in 2015 and $119 million in 2014 (including accrued interest of $1 million in 2015 and $10 million in 2014). Additional contracts were terminated in connection with debt redemptions in 2015 and 2014. Debt Obligations Short-term borrowings were $139 million and $590 million at December 31, 2015 and 2014, respectively, consisting primarily of bank overdrafts. The average amount of commercial paper outstanding was $254 million at a weighted-average interest rate of 0.16% during 2015. The maximum month end amount of commercial paper outstanding was $755 million with no outstanding borrowings at December 31, 2015. There were no borrowings in 2014. Long-term debt includes:
The fair value of long-term debt was $6,909 million and $8,045 million at December 31, 2015 and 2014, respectively, and was estimated based upon the quoted market prices for the same or similar debt instruments. The fair value of short-term borrowings approximates the carrying value due to the short maturities of the debt instruments. Senior unsecured notes were issued in a registered public offerings in 2015 and 2013. The notes rank equally in right of payment with all of BMS's existing and future senior unsecured indebtedness and are redeemable in whole or in part, at any time at a predetermined redemption price. BMS also terminated forward starting interest rate swap contracts entered into during 2015, resulting in an unrealized loss in other comprehensive income. The following table summarizes the note issuances:
The Company repurchased $500 million of long-term debt through a cash tender offer and redeemed €1.0 billion ($1.1 billion) of long-term debt following the issuance of new senior unsecured notes in 2015. In connection with the debt redemption activities, certain interest rate swap contracts were entered into and terminated during the second quarter of 2015. There were no debt redemptions in 2013. Debt redemption activity for 2015 and 2014 was as follows:
Notes with a principal amount of $597 million matured and were repaid in 2013. Interest payments were $205 million in 2015, $238 million in 2014 and $268 million in 2013 net of amounts received from interest rate swap contracts. Two separate $1.5 billion five-year revolving credit facilities are maintained from a syndicate of lenders. The facilities provide for customary terms and conditions with no financial covenants and are extendable on any anniversary date with the consent of the lenders. No borrowings were outstanding under either revolving credit facility at December 31, 2015 or 2014. Financial guarantees provided in the form of stand-by letters of credit and performance bonds were $726 million at December 31, 2015. Stand-by letters of credit are issued through financial institutions in support of guarantees for various obligations. Performance bonds are issued to support a range of ongoing operating activities, including sale of products to hospitals and foreign ministries of health, bonds for customs, duties and value added tax and guarantees related to miscellaneous legal actions. A significant majority of the outstanding financial guarantees will expire within the year and are not expected to be funded. |
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Receivables [Text Block] | RECEIVABLES
Non-U.S. receivables sold on a nonrecourse basis were $476 million in 2015, $812 million in 2014, and $1,031 million in 2013. In the aggregate, receivables from three pharmaceutical wholesalers in the U.S. represented 53% and 36% of total trade receivables at December 31, 2015 and 2014, respectively. Changes to the allowances for bad debt, charge-backs and cash discounts were as follows:
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INVENTORIES |
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Inventories [Text Block] | INVENTORIES
Inventories expected to remain on-hand beyond one year (including $85 million for inventory pending regulatory approval) are included in other assets and were $227 million at December 31, 2015 and $232 million at December 31, 2014. |
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Property, Plant and Equipment [Text Block] | PROPERTY, PLANT AND EQUIPMENT
The Mount Vernon, Indiana manufacturing facility was transferred to AstraZeneca in the third quarter of 2015 in connection with the sale of the diabetes business. The facility's gross property, plant and equipment was $415 million on the date of transfer ($182 million net of accumulated depreciation). Refer to "—Note 3. Alliances” for further discussion on the sale of the diabetes business. A fully depreciated bulk manufacturing facility ceased use in 2015 resulting in a $439 million reduction to gross property, plant and equipment and accumulated depreciation. Depreciation expense was $500 million in 2015, $543 million in 2014 and $453 million in 2013. |
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Goodwill and Intangible Assets Disclosure [Text Block] | GOODWILL AND OTHER INTANGIBLE ASSETS
The reduction of goodwill in 2015 resulted from the allocation of amounts for business divestitures. Refer to "—Note 3. Alliances", "—Note 4. Acquisitions and Other Divestitures" and "—Note 5. Assets Held-For-Sale" for further discussion on the divestitures. Amortization expense was $183 million in 2015, $286 million in 2014 and $858 million in 2013. Future annual amortization expense of other intangible assets is expected to be approximately $200 million in 2016, $170 million in 2017, $150 million in 2018, $130 million in 2019, and $100 million in 2020. Other intangible asset impairment charges were $181 million in 2015, $380 million in 2014 and none in 2013. Licenses of $500 million ($126 million net of accumulated amortization) were derecognized in 2015 as a result of the transfer of the Erbitux* North American business to Lilly in October 2015. Refer to "—Note 3. Alliances" for further discussion. A $160 million IPRD impairment charge was recognized in 2015 for BMS-986020 (lysophosphatidic acid 1 receptor antagonist) which was in Phase II development for treatment of IPF. The full write-off was required after considering the occurrence of certain adverse events, voluntary suspension of the study and an internal assessment indicating a significantly lower likelihood of regulatory and commercial success. BMS acquired BMS-986020 with its acquisition of Amira Pharmaceuticals, Inc. in 2011. In addition, a contingent consideration liability of $8 million related to the acquisition was also reversed because of the lower likelihood of success. A $310 million IPRD impairment charge was recognized in 2014 for peginterferon lambda which was in Phase III development for treatment of hepatitis C virus (HCV). The full write-off was required after assessing the potential commercial viability of the asset and estimating its fair value. The assessment considered the lower likelihood of filing for registration in certain markets after completing revised projections of revenues and expenses. A significant decline from prior projected revenues resulted from the global introduction of oral non-interferon products being used to treat patients with HCV and no other alternative uses for the product. |
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Accrued Expenses [Text Block] | ACCRUED EXPENSES
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SALES REBATES AND RETURN ACCRUALS |
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Sales Rebates And Return Accruals [Text Block] | SALES REBATES AND RETURN ACCRUALS Reductions to trade receivables and accrued rebates and returns liabilities are as follows:
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Deferred Income [Text Block] | DEFERRED INCOME
Alliances include unamortized amounts for upfront, milestone and other licensing receipts, revenue deferrals attributed to the Gilead alliance and deferred income for the undelivered elements of the diabetes business divestiture. Upfront, milestone and other licensing receipts are amortized over the shorter of the contractual rights period or the expected life of the product. Other deferrals included approximately $300 million invoiced for Daklinza under an early access program in France as of December 31, 2014, that was deferred until final pricing was obtained from the French government in 2015. Amortization of deferred income was $307 million in 2015, $362 million in 2014 and $548 million in 2013. |
EQUITY |
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Stockholders' Equity Note Disclosure [Text Block] | EQUITY
Treasury stock is recognized at the cost to reacquire the shares. Shares issued from treasury are recognized utilizing the first-in first-out method. The components of other comprehensive income/(loss) were as follows:
The accumulated balances related to each component of other comprehensive loss, net of taxes, were as follows:
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PENSION AND POSTRETIREMENT BENEFIT PLANS |
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Compensation and Retirement Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pension and Other Postretirement Benefits Disclosure [Text Block] | PENSION, POSTRETIREMENT AND POSTEMPLOYMENT LIABILITIES BMS sponsors defined benefit pension plans, defined contribution plans and termination indemnity plans for regular full-time employees. The principal defined benefit pension plan is the Bristol-Myers Squibb Retirement Income Plan, covering most U.S. employees and representing approximately 65% of the consolidated pension plan assets and 61% of the obligations. Future benefits related to service for this plan were eliminated in 2009. BMS contributes at least the minimum amount required by the Employee Retirement Income Security Act of 1974 (ERISA). Plan benefits are based primarily on the participant’s years of credited service and final average compensation. Plan assets consist principally of equity and fixed-income securities. Comprehensive medical and group life benefits are provided for substantially all U.S. retirees electing to participate in comprehensive medical and group life plans. The medical plan is contributory. Contributions are adjusted periodically and vary by date of retirement. The life insurance plan is noncontributory. Plan assets consist principally of equity and fixed-income securities. The net periodic benefit cost/(credit) of defined benefit pension and postretirement benefit plans includes:
In September 2014, BMS and Fiduciary Counselors Inc., as an independent fiduciary of the Bristol-Myers Squibb Company Retirement Income Plan, entered into a definitive agreement to transfer certain U.S. pension assets to The Prudential Insurance Company of America (Prudential) to settle approximately $1.5 billion of pension obligations. BMS purchased a group annuity contract from Prudential in December 2014, who irrevocably assumed the obligation to make future annuity payments to certain BMS retirees. The transaction does not change the amount of the monthly pension benefit received by affected retirees and surviving beneficiaries and resulted in a pretax settlement charge of $713 million. Pension settlement charges were also recognized after determining the annual lump sum payments will exceed the annual interest and service costs for certain pension plans, including the primary U.S. pension plan in 2015, 2014 and 2013. Changes in defined benefit and postretirement benefit plan obligations, assets, funded status and amounts recognized in the consolidated balance sheets were as follows:
The accumulated benefit obligation for all defined benefit pension plans was $6,363 million and $7,001 million at December 31, 2015 and 2014, respectively. Additional information related to pension plans was as follows:
Actuarial Assumptions Weighted-average assumptions used to determine benefit obligations at December 31 were as follows:
Weighted-average actuarial assumptions used to determine net periodic benefit (credit)/cost for the years ended December 31 were as follows:
The yield on high quality corporate bonds matching the duration of the benefit obligations is used in determining the discount rate. The Citigroup Pension Discount curve is used in developing the discount rate for the U.S. plans. The expected return on plan assets was determined using the expected rate of return and a calculated value of assets, referred to as the “market-related value”. The market-related value of plan assets exceeded the fair value by approximately $225 million at December 31, 2015. Differences between assumed and actual returns are amortized to the market-related value on a straight-line basis over a three-year period. Several factors are considered in developing the expected return on plan assets, including long-term historical returns and input from external advisors. Individual asset class return forecasts were developed based upon market conditions, for example, price-earnings levels and yields and long-term growth expectations. The expected long-term rate of return is the weighted-average of the target asset allocation of each individual asset class. Historical long-term actual annualized returns for U.S. pension plans were as follows:
Actuarial gains and losses resulted from changes in actuarial assumptions (such as changes in the discount rate and revised mortality rates) and from differences between assumed and actual experience (such as differences between actual and expected return on plan assets). Gains and losses are amortized over the life expectancy of the plan participants for U.S. plans (35 years in 2016) and expected remaining service periods for most other plans to the extent they exceed 10% of the higher of the market-related value or the projected benefit obligation for each respective plan. The amortization of net actuarial loss and prior service credit is expected to be approximately $70 million in 2016. The periodic benefit cost or credit is included in cost of products sold, research and development, and marketing, selling and administrative expenses, except for curtailments, settlements and other special termination benefits which are included other expenses. Assumed healthcare cost trend rates at December 31 were as follows:
A one-percentage-point change in assumed healthcare cost trend rates would not have a material impact on the cost or benefit obligation. Plan Assets The fair value of pension and postretirement plan assets by asset category at December 31, 2015 and 2014 was as follows:
The investment valuation policies per investment class are as follows: Level 1 inputs utilize unadjusted quoted prices in active markets accessible at the measurement date for identical assets or liabilities. The fair value hierarchy provides the highest priority to Level 1 inputs. These instruments include equity securities, equity funds and fixed income funds publicly traded on a national securities exchange, and cash and cash equivalents. Cash and cash equivalents are highly liquid investments with original maturities of three months or less at the time of purchase and are recognized at cost, which approximates fair value. Pending trade sales and purchases are included in cash and cash equivalents until final settlement. Level 2 inputs utilize observable prices for similar instruments, quoted prices for identical or similar instruments in non-active markets, and other observable inputs that can be corroborated by market data for substantially the full term of the assets or liabilities. Equity funds, fixed income funds, event driven hedge funds and short-term investment funds classified as Level 2 within the fair value hierarchy are valued at the net asset value of their shares held at year end. There were no significant unfunded commitments or restrictions on redemptions related to investments valued at NAV as of December 31, 2015. Corporate debt securities and U.S. treasury and agency securities classified as Level 2 within the fair value hierarchy are valued utilizing observable prices for similar instruments and quoted prices for identical or similar instruments in markets that are not active. Level 3 unobservable inputs are used when little or no market data is available. Venture capital and limited partnerships classified as Level 3 within the fair value hierarchy invest in underlying securities whose market values are determined using pricing models, discounted cash flow methodologies, or similar techniques. Some of the most significant unobservable inputs used in the valuation methodologies include discount rates, Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) multiples, and revenue multiples. Significant changes in any of these inputs could result in significantly lower or higher fair value measurements. Insurance contracts are held by certain foreign pension plans and are carried at contract value, which approximates the estimated fair value and is based on the fair value of the underlying investment of the insurance company. The following summarizes the activity for financial assets utilizing Level 3 fair value measurements:
The investment strategy emphasizes equities in order to achieve higher expected returns and lower expenses and required cash contributions over the long-term. A target asset allocation of 43% public equity (16% international, 14% global and 13% U.S.), 7% private equity and 50% long-duration fixed income is maintained for the U.S. pension plans. Investments are diversified within each of the three major asset categories. Approximately 88% of the U.S. pension plans equity investments are actively managed. Venture capital and limited partnerships are typically valued on a three month lag using latest available information. BMS common stock represents less than 1% of the plan assets at December 31, 2015 and 2014. Contributions and Estimated Future Benefit Payments Contributions to pension plans were $118 million in 2015, $124 million in 2014 and $251 million in 2013 and are expected to be approximately $100 million in 2016. Estimated annual future benefit payments (including lump sum payments) range from $300 million to $400 million in each of the next five years, and aggregate $1.7 billion in the subsequent five year period. Savings Plans The principal defined contribution plan is the Bristol-Myers Squibb Savings and Investment Program. The contribution is based on employee contributions and the level of Company match. The expense attributed to defined contribution plans in the U.S. was approximately $190 million in 2015, 2014 and 2013. |
EMPLOYEE STOCK BENEFIT PLANS |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Text Block] | EMPLOYEE STOCK BENEFIT PLANS On May 1, 2012, the shareholders approved the 2012 Stock Award and Incentive Plan (the 2012 Plan), which replaced the 2007 Stock Incentive Plan. The 2012 Plan provides for 109 million shares to be authorized for grants, plus any shares from outstanding awards under the 2007 Plan as of February 29, 2012 that expire, are forfeited, canceled, or withheld to satisfy tax withholding obligations. As of December 31, 2015, 108 million shares were available for award. Shares are issued from treasury stock to satisfy our obligations under this Plan. Executive officers and key employees may be granted options to purchase common stock at no less than the market price on the date the option is granted. Options generally become exercisable ratably over four years and have a maximum term of ten years. The plan provides for the granting of stock appreciation rights whereby the grantee may surrender exercisable rights and receive common stock and/or cash measured by the excess of the market price of the common stock over the option exercise price. The Company has not granted any stock options or stock appreciation rights since 2009. Restricted stock units may be granted to key employees, subject to restrictions as to continuous employment. Generally, vesting occurs ratably over a four year period from grant date. Compensation expense is recognized over the vesting period. A stock unit is a right to receive stock at the end of the specified vesting period but has no voting rights. Market share units are granted to executives. Vesting is conditioned upon continuous employment until the vesting date and payout factor is at least 60% of the share price on the award date. The payout factor is the share price on vesting date divided by share price on award date, with a maximum of 200%. The share price used in the payout factor is calculated using an average of the closing prices on the grant or vest date, and the nine trading days immediately preceding the grant or vest date. Vesting occurs ratably over four years. Performance share units are granted to executives and have a three year cycle and are granted as a target number of units subject to adjustment based on company performance. The number of shares issued when performance share units vest is determined based on the achievement of annual performance goals. The number of shares issued for 2014-2016 and 2015-2017 performance share unit awards are also adjusted based on the Company's three-year total shareholder return relative to a peer group of companies. Vesting occurs on the third anniversary of the grant date. Stock-based compensation expense for awards ultimately expected to vest is recognized over the vesting period. Forfeitures are estimated based on historical experience at the time of grant and revised in subsequent periods if actual forfeitures differ from those estimates. Other information related to stock-based compensation benefits are as follows:
The fair value of awards approximates the closing trading price of BMS's common stock on the grant date. The fair value of market share units also considers the payout formula and probability of satisfying market conditions. The following table summarizes significant ranges of outstanding and exercisable options at December 31, 2015:
The aggregate intrinsic value in the preceding table represents the total pretax intrinsic value, based on the closing stock price of $68.79 on December 31, 2015. |
LEASES |
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Leases, Operating [Abstract] | |
Leases of Lessee Disclosure [Text Block] | LEASES Annual minimum rental commitments for non-cancelable operating leases (primarily real estate and motor vehicles) are approximately $100 million in each of the next five years and an aggregate $300 million thereafter. Operating lease expenses were approximately $140 million in 2015, 2014 and 2013. Sublease income was not material for all periods presented. |
LEGAL PROCEEDINGS AND CONTINGENCIES |
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Commitments and Contingencies Disclosure [Abstract] | |
Legal Matters and Contingencies [Text Block] | LEGAL PROCEEDINGS AND CONTINGENCIES The Company and certain of its subsidiaries are involved in various lawsuits, claims, government investigations and other legal proceedings that arise in the ordinary course of business. These claims or proceedings can involve various types of parties, including governments, competitors, customers, suppliers, service providers, licensees, employees, or shareholders, among others. The resolution of these matters often develop over a long period of time and expectations can change as a result of new findings, rulings, appeals or settlement arrangements. The Company recognizes accruals for such contingencies when it is probable that a liability will be incurred and the amount of loss can be reasonably estimated. These matters involve patent infringement, antitrust, securities, pricing, sales and marketing practices, environmental, commercial, contractual rights, licensing obligations, health and safety matters, consumer fraud, employment matters, product liability and insurance coverage. Legal proceedings that are material or that the Company believes could become material are described below. Although the Company believes it has substantial defenses in these matters, there can be no assurance that there will not be an increase in the scope of pending matters or that any future lawsuits, claims, government investigations or other legal proceedings will not be material. Unless otherwise noted, the Company is unable to assess the outcome of the respective litigation nor is it able to provide an estimated range of potential loss. Furthermore, failure to enforce our patent rights would likely result in substantial decreases in the respective product revenues from generic competition. INTELLECTUAL PROPERTY Baraclude — South Korea In 2013, DaeWoong Pharmaceutical Co. Ltd., Hanmi Pharmaceuticals Co., Ltd. Dong-A Pharmaceutical Co. Ltd. and other generic companies initiated separate invalidity actions in the Korean Intellectual Property Office against Korean Patent No. 160,523 (the ‘523 patent) covering the entecavir molecule. In January 2015, the Korean Intellectual Property Tribunal ruled that the '523 patent is valid and the decision was affirmed on appeal in September 2015 by the Patent Court. The ‘523 patent expired on October 9, 2015. Following the expiration of the ‘523 patent, generic companies have entered the South Korean market and we expect continuing declines in net product sales of Baraclude in 2016. Plavix* — Australia As previously disclosed, Sanofi was notified that, in August 2007, GenRx Proprietary Limited (GenRx) obtained regulatory approval of an application for clopidogrel bisulfate 75mg tablets in Australia. GenRx, formerly a subsidiary of Apotex Inc. (Apotex), has since changed its name to Apotex. In August 2007, Apotex filed an application in the Federal Court of Australia (the Federal Court) seeking revocation of Sanofi’s Australian Patent No. 597784 (Case No. NSD 1639 of 2007). Sanofi filed counterclaims of infringement and sought an injunction. On September 21, 2007, the Federal Court granted Sanofi’s injunction. A subsidiary of the Company was subsequently added as a party to the proceedings. In February 2008, a second company, Spirit Pharmaceuticals Pty. Ltd., also filed a revocation suit against the same patent. This case was consolidated with the Apotex case and a trial occurred in April 2008. On August 12, 2008, the Federal Court of Australia held that claims of Patent No. 597784 covering clopidogrel bisulfate, hydrochloride, hydrobromide, and taurocholate salts were valid. The Federal Court also held that the process claims, pharmaceutical composition claims, and claim directed to clopidogrel and its pharmaceutically acceptable salts were invalid. The Company and Sanofi filed notices of appeal in the Full Court of the Federal Court of Australia (Full Court) appealing the holding of invalidity of the claim covering clopidogrel and its pharmaceutically acceptable salts, process claims, and pharmaceutical composition claims which have stayed the Federal Court’s ruling. Apotex filed a notice of appeal appealing the holding of validity of the clopidogrel bisulfate, hydrochloride, hydrobromide, and taurocholate claims. A hearing on the appeals occurred in February 2009. On September 29, 2009, the Full Court held all of the claims of Patent No. 597784 invalid. In November 2009, the Company and Sanofi applied to the High Court of Australia (High Court) for special leave to appeal the judgment of the Full Court. In March 2010, the High Court denied the Company and Sanofi’s request to hear the appeal of the Full Court decision. The case has been remanded to the Federal Court for further proceedings related to damages sought by Apotex. The Australian government has intervened in this matter and is also seeking damages for alleged losses experienced during the period when the injunction was in place. The Company and Apotex have settled the Apotex case and the case has been dismissed. The Australian government's claim is still pending. It is not possible at this time to predict the outcome of the Australian government’s claim or its impact on the Company. Eliquis - Inter-Partes Review (IPR) In August 2015, Bristol-Myers Squibb received a Petition for Inter Partes Review of U.S. Patent No. 6,967,208 (“the ‘208 patent”) that was filed at the United States Patent & Trademark Office by the Coalition for Affordable Drugs, which is affiliated with entities and individuals associated with a hedge fund. The ‘208 patent is a composition of matter patent that contains claims directed to apixaban, the active ingredient in Eliquis. The petition requests that the Patent Trial and Appeal Board (PTAB) initiate a proceeding to review the validity of the ‘208 patent, including claims that cover apixaban. The Company responded to and opposed this petition in November 2015. The PTAB is expected to render a decision as to whether it will initiate this proceeding in mid-February 2016. If the PTAB decides to initiate the proceeding, a decision on the merits would be expected by the first half of 2017. The Company intends to vigorously defend the ‘208 patent against this challenge. The ‘208 patent expires in February 2023; the Company has filed a request for patent term restoration with the U.S. Patent & Trademark Office requesting that the patent expiration date be restored to December 2026. Sprycel - European Union In May 2013, Apotex, Actavis Group PTC ehf, Generics [UK] Limited (Mylan) and an unnamed company filed oppositions in the European Patent Office (EPO) seeking revocation of European Patent No. 1169038 (the ‘038 patent) covering dasatinib, the active ingredient in Sprycel. The ‘038 patent is scheduled to expire in April 2020 (excluding potential term extensions). On January 20, 2016, the Opposition Division of the EPO revoked the ‘038 patent. The Company will appeal the EPO’s decision to the EPO Board of Appeal. The ‘038 patent will remain in force pending the outcome of our appeal of the EPO’s decision, and we intend to pursue legal options to defend our intellectual property rights from any future infringement. Orphan drug exclusivity and data exclusivity for Sprycel in the EU expire in November 2016. The decision does not affect the validity of our other Sprycel patents within and outside Europe, including a different patent that covers the monohydrate form of dasatinib. In the U.S., the Company entered into a settlement agreement with Apotex in 2013 regarding a patent infringement suit whereby Apotex can launch its generic dasatinib monohydrate abbreviated New Drug Application product in September 2024, or earlier in certain circumstances. Anti-PD-1 Antibody Patent Oppositions and Litigation We have brought claims of infringement in a number of ongoing patent litigations against Merck & Co., Inc. (Merck) around the world with respect to patents directed to methods of treating cancer using a PD-1 antibody. Under our alliance with Ono, BMS has exclusive rights to these patents, including a European patent (EP 1 537 878) (the ’878 patent). In 2011, Merck filed an opposition in the European Patent Office (EPO) seeking revocation of the ‘878 patent. In June 2014, the Opposition Division of the EPO maintained the validity of the claims in the ’878 patent. Merck has appealed this decision. In May 2014, Merck filed a lawsuit in the United Kingdom (UK) seeking revocation of the UK national version of the ’878 patent. In July 2014, BMS and Ono sued Merck for patent infringement. A trial was held in the UK in July 2015. In October 2015, the court issued its judgment, finding the ’878 patent valid and infringed. Merck has appealed this judgment. In February 2015, Merck filed a lawsuit in the Netherlands seeking revocation of the Dutch national version of the ’878 patent and BMS and Ono subsequently sued Merck for patent infringement. A trial regarding the validity and infringement of the ’878 patent was held on January 29, 2016; the decision by the Dutch court is pending. In December 2015, BMS and Ono filed lawsuits with respect to national versions of the ‘878 patent in several other European countries, including France, Germany, Ireland, Spain and Switzerland. BMS and Ono can file patent infringement actions against Merck in other national courts in Europe at or around the time Merck launches Keytruda*. If any of the above-mentioned national courts determine Merck infringes a valid claim in the ’878 patent, BMS and Ono may be entitled to monetary damages, including royalties on future sales of Keytruda*. BMS and Ono are not seeking an injunction to prevent Merck from marketing Keytruda* in these litigations unless an appropriate financial remedy cannot be agreed upon or awarded by the court. In September 2014, BMS and Ono filed a lawsuit in the United States alleging that Merck’s marketing of Keytruda* infringes U.S. Patent No. 8,728,474 (the ’474 patent). The trial in this matter is currently scheduled to begin in April 2017. In June and July 2015, BMS and Ono filed lawsuits in the United States alleging that Merck’s marketing of Keytruda* infringes U.S. Patent Nos. 9,067,999 (the ‘999 patent) and 9,073,994 (the ‘994 patent), respectively, which are patents related to the ‘474 patent. In these lawsuits, BMS and Ono are not seeking to prevent or stop the marketing of Keytruda* in the United States unless an appropriate financial remedy cannot be agreed upon or awarded by the court. In April 2014, Merck, and three other companies, opposed a European patent (EP 2 161 336) (the ’336 patent) which is directed to a class of anti-PD-1 antibodies. In February 2015, BMS and Ono submitted a request to amend the claims of the ’336 patent. Oral proceedings before the Opposition Division of the EPO are scheduled for July 2016. In September 2014, Merck filed a lawsuit in Australia seeking the revocation of Australian Patent No. 2011203119, which is directed to a class of anti-PD-1 antibodies and is based on the same application as the ‘336 patent. In March 2015, BMS and Ono countersued Merck for patent infringement. Ono and BMS have similar and other patents and applications pending in the United States and other countries. In September 2015, Dana-Farber Cancer Institute (Dana-Farber) filed a complaint in Massachusetts federal court seeking to correct the inventorship of five related U.S. patents. Specifically, Dana-Farber is seeking to add two scientists as inventors to these patents. Three of these patents (the ‘474, ‘999, and ‘994 patents) are currently subject to patent infringement proceedings filed by BMS and Ono against Merck in Delaware federal court, as specified above. PRICING, SALES AND PROMOTIONAL PRACTICES LITIGATION AWP Litigation As previously disclosed, the Company, together with a number of other pharmaceutical manufacturers, has been a defendant in a number of private class actions as well as suits brought by the attorneys general of various states. In these actions, plaintiffs allege that defendants caused the Average Wholesale Prices (AWPs) of their products to be inflated, thereby injuring government programs, entities and persons who reimbursed prescription drugs based on AWPs. The Company remains a defendant in two state attorneys general suits pending in state courts in Pennsylvania and Wisconsin. The Company has been designated as one of four defendants for separate trials in Wisconsin in 2016. A settlement has been reached between the Company and the other defendants on one hand, and the State of Wisconsin on the other. Beginning in August 2010, the Company was the defendant in a trial in the Commonwealth Court of Pennsylvania (Commonwealth Court), brought by the Commonwealth of Pennsylvania. In September 2010, the jury issued a verdict for the Company, finding that the Company was not liable for fraudulent or negligent misrepresentation; however, the Commonwealth Court judge issued a decision on a Pennsylvania consumer protection claim that did not go to the jury, finding the Company liable for $28 million and enjoining the Company from contributing to the provision of inflated AWPs. The Company appealed the decision to the Pennsylvania Supreme Court and in June 2014, the Pennsylvania Supreme Court vacated the Commonwealth judge's decision and remanded the matter back to the Commonwealth Court. In January 2015, the Commonwealth Court entered judgment in favor of the Company. The Commonwealth of Pennsylvania appealed this decision to the Pennsylvania Supreme Court, which affirmed the lower court's decision in favor of the Company in December 2015. Qui Tam Litigation In March 2011, the Company was served with an unsealed qui tam complaint filed by three former sales representatives in California Superior Court, County of Los Angeles. The California Department of Insurance has elected to intervene in the lawsuit. The complaint alleges the Company paid kickbacks to California providers and pharmacies in violation of California Insurance Frauds Prevention Act, Cal. Ins. Code § 1871.7. In December 2015, the Company and the California Department of Insurance reached an agreement on the financial terms of a settlement in principle. The parties are continuing negotiations of the terms of a final settlement. Plavix* State Attorneys General Lawsuits The Company and certain affiliates of Sanofi are defendants in consumer protection and/or false advertising actions brought by several states relating to the sales and promotion of Plavix*. It is not possible at this time to reasonably assess the outcome of these lawsuits or their potential impact on the Company. PRODUCT LIABILITY LITIGATION The Company is a party to various product liability lawsuits. Plaintiffs in these cases seek damages and other relief on various grounds for alleged personal injury and economic loss. As previously disclosed, in addition to lawsuits, the Company also faces unfiled claims involving its products. Plavix* As previously disclosed, the Company and certain affiliates of Sanofi are defendants in a number of individual lawsuits in various state and federal courts claiming personal injury damage allegedly sustained after using Plavix*. Currently, over 5,200 claims involving injury plaintiffs as well as claims by spouses and/or other beneficiaries, are filed in state and federal courts in various states including California, New Jersey, Delaware and New York. In February 2013, the Judicial Panel on Multidistrict Litigation granted the Company and Sanofi’s motion to establish a multidistrict litigation to coordinate Federal pretrial proceedings in Plavix* product liability and related cases in New Jersey Federal Court. It is not possible at this time to reasonably assess the outcome of these lawsuits or the potential impact on the Company. Reglan* The Company is one of a number of defendants in numerous lawsuits, on behalf of approximately 3,000 plaintiffs, including injury plaintiffs claiming personal injury allegedly sustained after using Reglan* or another brand of the generic drug metoclopramide, a product indicated for gastroesophageal reflux and certain other gastrointestinal disorders, as well as claims by spouses and/or other beneficiaries. The Company, through its generic subsidiary, Apothecon, Inc., distributed metoclopramide tablets manufactured by another party between 1996 and 2000. It is not possible at this time to reasonably assess the outcome of these lawsuits. The resolution of these pending lawsuits, however, is not expected to have a material impact on the Company. Byetta* Amylin, a former subsidiary of the Company, and Lilly are co-defendants in product liability litigation related to Byetta*. To date, there are over 500 separate lawsuits pending on behalf of over 2,400 active plaintiffs (including pending settlements), which include injury plaintiffs as well as claims by spouses and/or other beneficiaries, in various courts in the U.S. The Company has agreed in principle to resolve over 510 of these claims. The majority of these cases have been brought by individuals who allege personal injury sustained after using Byetta*, primarily pancreatic cancer and pancreatitis, and, in some cases, claiming alleged wrongful death. The majority of cases were pending in Federal Court in San Diego in a multi-district litigation (MDL) or in a coordinated proceeding in California Superior Court in Los Angeles (JCCP) and in November 2015, the defendants' motion for summary judgment based on federal preemption was granted in both the MDL and the JCCP. Plaintiffs have appealed to the U.S. Court of Appeals for the Ninth Circuit. The cases in the JCCP have not yet been formally dismissed. Amylin has product liability insurance covering a substantial number of claims involving Byetta* and any additional liability to Amylin with respect to Byetta* is expected to be shared between the Company and AstraZeneca. It is not possible to reasonably predict the outcome of any lawsuit, claim or proceeding or the potential impact on the Company. SHAREHOLDER DERIVATIVE LITIGATION In December 2015, two shareholder derivative lawsuits were filed in New York state court against certain officers and directors of the Company. The plaintiffs allege, among other things, breaches of fiduciary duty surrounding the Company’s previously disclosed October 2015 civil settlement with the Securities and Exchange Commission of alleged Foreign Corrupt Practices Act violations in which the Company agreed to a payment of approximately $14.7 million in disgorgement, penalties and interest. GOVERNMENT INVESTIGATIONS Like other pharmaceutical companies, the Company and certain of its subsidiaries are subject to extensive regulation by national, state and local government agencies in the U.S. and other countries in which BMS operates. As a result, the Company, from time to time is subject to various governmental inquiries and investigations. It is possible that criminal charges, substantial fines and/or civil penalties, could result from government investigations. The most significant investigations conducted by government agencies are listed below. Abilify* State Attorneys General Investigation In March 2009, the Company received a letter from the Delaware Attorney General’s Office advising of a multi-state coalition investigating whether certain Abilify* marketing practices violated those respective states’ consumer protection statutes. It is not possible at this time to reasonably assess the outcome of this investigation. ENVIRONMENTAL PROCEEDINGS As previously reported, the Company is a party to several environmental proceedings and other matters, and is responsible under various state, federal and foreign laws, including the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), for certain costs of investigating and/or remediating contamination resulting from past industrial activity at the Company’s current or former sites or at waste disposal or reprocessing facilities operated by third parties. CERCLA Matters With respect to CERCLA matters for which the Company is responsible under various state, federal and foreign laws, the Company typically estimates potential costs based on information obtained from the U.S. Environmental Protection Agency, or counterpart state or foreign agency and/or studies prepared by independent consultants, including the total estimated costs for the site and the expected cost-sharing, if any, with other “potentially responsible parties,” and the Company accrues liabilities when they are probable and reasonably estimable. The Company estimated its share of future costs for these sites to be $60 million at December 31, 2015, which represents the sum of best estimates or, where no best estimate can reasonably be made, estimates of the minimal probable amount among a range of such costs (without taking into account any potential recoveries from other parties). North Brunswick Township Board of Education As previously disclosed, in October 2003, the Company was contacted by counsel representing the North Brunswick, NJ Board of Education (BOE) regarding a site where waste materials from E.R. Squibb and Sons may have been disposed from the 1940’s through the 1960’s. Fill material containing industrial waste and heavy metals in excess of residential standards was discovered during an expansion project at the North Brunswick Township High School, as well as at a number of neighboring residential properties and adjacent public park areas. In January 2004, the New Jersey Department of Environmental Protection (NJDEP) sent the Company and others an information request letter about possible waste disposal at the site, to which the Company responded in March 2004. The BOE and the Township, as the current owners of the school property and the park, are conducting and jointly financing soil remediation work and ground water investigation work under a work plan approved by the NJDEP, and have asked the Company to contribute to the cost. The Company is actively monitoring the clean-up project, including its costs. To date, neither the school board nor the Township has asserted any claim against the Company. Instead, the Company and the local entities have negotiated an agreement to attempt to resolve the matter by informal means, and avoid litigation. A central component of the agreement is the provision by the Company of interim funding to help defray cleanup costs and assure the work is not interrupted. The Company transmitted interim funding payments in December 2007 and November 2009. The parties commenced mediation in late 2008; however, those efforts were not successful and the parties moved to a binding allocation process. The parties are expected to conduct fact and expert discovery, followed by formal evidentiary hearings and written argument. In addition, in September 2009, the Township and BOE filed suits against several other parties alleged to have contributed waste materials to the site; that litigation has now been settled by the parties. The Company does not currently believe that it is responsible for any additional amounts beyond the two interim payments totaling $4 million already transmitted. Any additional possible loss is not expected to be material. |
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Quarterly Financial Information [Text Block] | SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)
The following specified items affected the comparability of results in 2015 and 2014: 2015
2014
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ACCOUNTING POLICIES (Policies) |
12 Months Ended |
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Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Consolidation, Policy [Policy Text Block] | Basis of Consolidation The consolidated financial statements are prepared in conformity with United States (U.S.) generally accepted accounting principles (GAAP), including the accounts of Bristol-Myers Squibb Company and all of its controlled majority-owned subsidiaries and certain variable interest entities (which may be referred to as Bristol-Myers Squibb, BMS, or the Company). All intercompany balances and transactions are eliminated. Material subsequent events are evaluated and disclosed through the report issuance date. Alliance and license arrangements are assessed to determine whether the terms provide economic or other control over the entity requiring consolidation of an entity. Entities controlled by means other than a majority voting interest are referred to as variable interest entities and are consolidated when BMS has both the power to direct the activities of the variable interest entity that most significantly impacts its economic performance and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the entity. |
Use of Estimates, Policy [Policy Text Block] | Use of Estimates The preparation of financial statements requires the use of management estimates and assumptions. The most significant assumptions are estimates in determining the fair value and potential impairment of intangible assets; sales rebate and return accruals; legal contingencies; income taxes; estimated selling prices used in multiple element arrangements; and pension and postretirement benefits. Actual results may differ from estimated results. |
Reclassifications [Text Block] | Reclassifications Certain prior period amounts were reclassified to conform to the current period presentation. Advertising and product promotion costs previously presented separately in the consolidated statements of earnings are now included in marketing, selling and administrative expenses. |
Revenue Recognition, Policy [Policy Text Block] | Revenue Recognition Revenue is recognized when persuasive evidence of an arrangement exists, the sales price is fixed or determinable, collectability is reasonably assured and title and substantially all risks and rewards of ownership is transferred, generally at time of shipment (including the supply of commercial products to alliance partners when they are the principal in the end customer sale). However, certain revenue of non-U.S. businesses is recognized on the date of receipt by the customer. Alliance and other revenue related to Abilify* and Atripla* is not recognized until the products are sold to the end customer by the alliance partner. Royalties are recognized when the third-party sales are reliably measurable and collectability is reasonably assured. Refer to “—Note 3. Alliances” for further detail regarding alliances. Revenue is reduced at the time of recognition for expected sales returns, discounts, rebates and sales allowances based on historical experience updated for changes in facts and circumstances including the impact of applicable healthcare legislation. Revenue is deferred when there is no historical experience with products in a similar therapeutic category, or until the right of return no longer exists or sufficient historical experience to estimate sales returns is developed. |
Income Tax, Policy [Policy Text Block] | Income Taxes The provision for income taxes includes income taxes paid or payable for the current year plus the change in deferred taxes during the year. Deferred taxes result from differences between the financial and tax basis of assets and liabilities and are adjusted for changes in tax rates and tax laws when changes are enacted. Valuation allowances are recognized to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized. The assessment of whether or not a valuation allowance is required often requires significant judgment including the long-range forecast of future taxable income and the evaluation of tax planning initiatives. Adjustments to the deferred tax valuation allowances are made to earnings in the period when such assessments are made. Tax benefits are recognized from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. The tax benefit recognized in the financial statements for a particular tax position is based on the largest benefit that is more likely than not to be realized upon settlement. |
Cash and Cash Equivalents, Policy [Policy Text Block] | Cash and Cash Equivalents Cash and cash equivalents include bank deposits, time deposits, commercial paper and money market funds. Cash equivalents consist of highly liquid investments with original maturities of three months or less at the time of purchase and are recognized at cost, which approximates fair value. |
Investment, Policy [Policy Text Block] | Marketable Securities and Investments in Other Companies Marketable securities are classified as “available-for-sale” on the date of purchase and reported at fair value. Fair value is determined based on observable market quotes or valuation models using assessments of counterparty credit worthiness, credit default risk or underlying security and overall capital market liquidity. Investments in 50% or less owned companies are accounted for using the equity method of accounting when the ability to exercise significant influence is maintained. The share of net income or losses of equity investments is included in other (income)/expense. Equity investments are reviewed for impairment by assessing if the decline in market value of the investment below the carrying value is other than temporary, which considers the intent and ability to retain the investment, the duration and extent that the market value has been less than cost and the investee's financial condition. |
Inventory, Policy [Policy Text Block] | Inventory Valuation Inventories are stated at the lower of average cost or market. |
Property, Plant and Equipment, Policy [Policy Text Block] | Property, Plant and Equipment and Depreciation Expenditures for additions, renewals and improvements are capitalized at cost. Depreciation is computed on a straight-line method based on the estimated useful lives of the related assets ranging from 20 to 50 years for buildings and 3 to 20 years for machinery, equipment and fixtures. |
Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block] | Impairment of Long-Lived Assets Current facts or circumstances are periodically evaluated to determine if the carrying value of depreciable assets to be held and used may not be recoverable. If such circumstances exist, an estimate of undiscounted future cash flows generated by the long-lived asset, or appropriate grouping of assets, is compared to the carrying value to determine whether an impairment exists at its lowest level of identifiable cash flows. If an asset is determined to be impaired, the loss is measured based on the difference between the asset’s fair value and its carrying value. An estimate of the asset’s fair value is based on quoted market prices in active markets, if available. If quoted market prices are not available, the estimate of fair value is based on various valuation techniques using Level 3 fair value inputs, including a discounted value of estimated future cash flows. |
Internal Use Software, Policy [Policy Text Block] | Capitalized Software Eligible costs to obtain internal use software are capitalized and amortized over the estimated useful life of the software. |
Business Combinations Policy [Policy Text Block] | Business Combinations Businesses acquired are consolidated upon obtaining control. The fair value of assets acquired and liabilities assumed are recognized at the date of acquisition. Any excess of the purchase price over the estimated fair values of the net assets acquired is recognized as goodwill. Business acquisition costs are expensed when incurred. |
Goodwill and Intangible Assets, Policy [Policy Text Block] | Goodwill, Acquired In-Process Research and Development and Other Intangible Assets The fair value of intangible assets is typically determined using the “income method” utilizing Level 3 fair value inputs. The market participant valuations assume a global view considering all potential jurisdictions and indications based on discounted after-tax cash flow projections, risk adjusted for estimated probability of technical and regulatory success (for IPRD). Finite-lived intangible assets, including licenses, developed technology rights and IPRD projects that reach commercialization are amortized on a straight-line basis over their estimated useful life. Estimated useful lives are determined considering the period the assets are expected to contribute to future cash flows. Goodwill is tested at least annually for impairment by assessing qualitative factors or performing a quantitative analysis in determining whether it is more likely than not that the fair value of net assets are below their carrying amounts. Examples of qualitative factors assessed in 2015 include our share price, financial performance compared to budgets, long-term financial plans, macroeconomic, industry and market conditions as well as the substantial excess of fair value over the carrying value of net assets from the annual impairment test performed in a prior year. Each relevant factor is assessed both individually and in the aggregate. IPRD is tested for impairment on an annual basis and more frequently if events occur or circumstances change that would indicate a potential reduction in the fair values of the assets below their carrying value. If the carrying value of IPRD is determined to exceed the fair value, an impairment loss is recognized for the difference. Finite-lived intangible assets are tested for impairment when facts or circumstances suggest that the carrying value of the asset may not be recoverable. If the carrying value exceeds the projected undiscounted pretax cash flows of the intangible asset, an impairment loss equal to the excess of the carrying value over the estimated fair value (discounted after-tax cash flows) is recognized. |
Costs Associated with Exit or Disposal Activities or Restructurings, Policy [Policy Text Block] | Restructuring Restructuring charges are recognized as a result of actions to streamline operations and rationalize manufacturing facilities. Estimating the impact of restructuring plans, including future termination benefits and other exit costs requires judgment. Actual results could vary from these estimates. |
Commitments and Contingencies, Policy [Policy Text Block] | Contingencies Loss contingencies from legal proceedings and claims may occur from a wide range of matters, including government investigations, shareholder lawsuits, product and environmental liability, contractual claims and tax matters. Accruals are recognized when it is probable that a liability will be incurred and the amount of loss can be reasonably estimated. Gain contingencies (including contingent proceeds related to the divestitures) are not recognized until realized. Legal fees are expensed as incurred. |
Shipping and Handling Cost, Policy [Policy Text Block] | Shipping and Handling Costs Shipping and handling costs are included in marketing, selling and administrative expenses and were $85 million in 2015, $115 million in 2014 and $119 million in 2013. |
Advertising Costs, Policy [Policy Text Block] | Advertising and Product Promotion Costs Advertising and product promotion costs are included in marketing, selling and administrative expenses and were $825 million in 2015, $734 million in 2014 and $855 million in 2013. Advertising and product promotion costs are expensed as incurred. |
Foreign Currency Transactions and Translations Policy [Policy Text Block] | Foreign Currency Translation Foreign subsidiary earnings are translated into U.S. dollars using average exchange rates. The net assets of foreign subsidiaries are translated into U.S. dollars using current exchange rates. The U.S. dollar effects that arise from translating the net assets of these subsidiaries at changing rates are recognized in OCI. |
Research and Development Expense, Policy [Policy Text Block] | Research and Development Research and development costs are expensed as incurred. Clinical study costs are accrued over the service periods specified in the contracts and adjusted as necessary based upon an ongoing review of the level of effort and costs actually incurred. Strategic alliances with third parties provide licensing rights to develop, manufacture, market and/or sell pharmaceutical products, the rights to which are owned by the other party. Research and development is recognized net of reimbursements in connection with alliance agreements. Upfront and contingent milestone payments for asset acquisitions of investigational compounds are also included in research and development expenses. |
Cash Flow, Policy [Policy Text Block] | Cash Flow Upfront and contingent milestone payments for licensing of investigational compounds are included in operating activities and asset or business acquisitions are included in investing activities. Divestiture proceeds are included in investing activities as well as royalties and other consideration received subsequent to the related sale of the asset or business. Other adjustments reflected in operating activities include divestiture gains and losses and related royalties, research and development asset acquisition charges, gains and losses on debt redemption and changes in the fair value of written option liabilities. |
New Accounting Pronouncements, Policy [Policy Text Block] | Recently Issued Accounting Standards In January 2016, the Financial Accounting Standards Board (FASB) issued amended guidance to the recognition, measurement, presentation and disclosures of financial instruments effective January 1, 2018 with early adoption not permitted. The new guidance requires that fair value adjustments for equity securities with readily determinable fair values currently classified as available-for-sale be reported through earnings. The new guidance also requires a qualitative impairment assessment for equity investments without a readily determinable fair value and would require an impairment charge through earnings if the assessment indicates an impairment exists. The Company is assessing the potential impact of the new standard on our consolidated financial statements. In November 2015, the FASB issued amended guidance on the presentation of deferred tax assets and liabilities. The new guidance requires all deferred tax assets and liabilities to be classified as non-current. BMS elected to early adopt this standard as of December 31, 2015 prospectively. Refer to "—Note 8. Income taxes" for further information. In April 2015, the FASB issued amended guidance on the presentation of debt issuance costs. The new guidance requires debt issuance costs to be presented as a reduction to the carrying value of debt in the balance sheet, consistent with debt discounts. BMS elected to early adopt this standard as of December 31, 2015. The adoption of this standard did not have a material impact on our consolidated financial statements. Refer to "—Note 10. Financial Instruments and Fair Value Measurements" for further information. In May 2014, the FASB issued a new standard related to revenue recognition, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The new standard will replace most of the existing revenue recognition standards in U.S. GAAP when it becomes effective. In July 2015, the FASB decided to delay the effective date by one year to January 1, 2018. Early adoption is permitted no earlier than 2017. The new standard can be applied retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of the change recognized at the date of the initial application in retained earnings. The Company is assessing the potential impact of the new standard on financial reporting and has not yet selected a transition method. In April 2014, the FASB issued amended guidance on the use and presentation of discontinued operations in an entity's consolidated financial statements. The new guidance restricts the presentation of discontinued operations to business circumstances when the disposal of business operations represents a strategic shift that has or will have a major effect on an entity's operations and financial results. The guidance became effective on January 1, 2015. |
BUSINESS SEGMENT INFORMATION (Tables) |
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Schedules of Concentration of Risk, by Risk Factor [Table Text Block] | Products are sold principally to wholesalers, and to a lesser extent, directly to distributors, retailers, hospitals, clinics, government agencies and pharmacies. Gross revenues to the three largest pharmaceutical wholesalers in the U.S. as a percentage of global gross revenues were as follows:
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Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas [Table Text Block] | Selected geographic area information was as follows:
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Schedule of Revenue from External Customers by Products and Services [Table Text Block] | The composition of total revenues was as follows:
Product revenues were as follows:
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ALLIANCES(Tables) |
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Alliances Statement [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summarized Financial Information Reflected In Consolidated Financial Statements [Table Text Block] | Selected financial information pertaining to our alliances was as follows, including net product sales when BMS is the principal in the third-party customer sale for products subject to the alliance. Expenses summarized below do not include all amounts attributed to the activities for the products in the alliance, but only the payments between the alliance partners or the related amortization if the payments were deferred or capitalized.
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Pfizer [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Alliances Statement [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summarized Financial Information Reflected In Consolidated Financial Statements [Table Text Block] | Summarized financial information related to this alliance was as follows:
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Gilead [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Alliances Statement [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summarized Financial Information Reflected In Consolidated Financial Statements [Table Text Block] | Summarized financial information related to this alliance was as follows:
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Otsuka [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Alliances Statement [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Percentage Of Net Sales Recognized From Collaboration [Table Text Block] | An assessment of BMS's expected annual contractual share was completed each quarterly reporting period and adjusted based upon reported U.S. Abilify* net sales at year end. BMS's annual contractual share was 50% in 2015, 33% in 2014 and 34% in 2013. The alliance and other revenue recognized in any interim period or quarter did not exceed the amounts that were due under the contract.
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Schedule Of Percentage Of Net Sales Payable As Collaboration Fee [Table Text Block] | A fee is paid to Otsuka based on the following percentages of combined annual net sales of Sprycel and Ixempra* in the Oncology Territory (including post divestiture Ixempra* sales):
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Summarized Financial Information Reflected In Consolidated Financial Statements [Table Text Block] | Summarized financial information related to this alliance was as follows:
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Lilly [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Alliances Statement [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summarized Financial Information Reflected In Consolidated Financial Statements [Table Text Block] | Summarized financial information related to this alliance was as follows:
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AstraZeneca [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Alliances Statement [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summarized Financial Information Reflected In Consolidated Financial Statements [Table Text Block] | Summarized financial information related to the AstraZeneca alliances was as follows:
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Schedule Of Royalty Rates Based On Net Sales [Table Text Block] | Royalty rates on net sales are as follows:
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Sanofi [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Alliances Statement [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summarized Financial Information Reflected In Consolidated Financial Statements [Table Text Block] | Summarized financial information related to this alliance was as follows:
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Sanofi [Member] | Territory Covering Europe and Asia [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Alliances Statement [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity Method Investments Disclosure [Table Text Block] | The following is summarized financial information for interests in the partnerships with Sanofi for the territory covering Europe and Asia, which are not consolidated but are accounted for using the equity method:
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Ono [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Alliances Statement [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summarized Financial Information Reflected In Consolidated Financial Statements [Table Text Block] | Summarized financial information related to this alliance was as follows:
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Reckitt Benckiser Group [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Alliances Statement [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summarized Financial Information Reflected In Consolidated Financial Statements [Table Text Block] | Summarized financial information related to this alliance was as follows:
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The Medicines Company [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Alliances Statement [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summarized Financial Information Reflected In Consolidated Financial Statements [Table Text Block] | Summarized financial information related to this alliance was as follows:
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Valeant [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Alliances Statement [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summarized Financial Information Reflected In Consolidated Financial Statements [Table Text Block] | Summarized financial information related to this alliance was as follows:
|
OTHER (INCOME)/EXPENSE (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Nonoperating Income (Expense) [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Other Income Expense [Table Text Block] | Other (income)/expense includes:
|
RESTRUCTURING (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring Charges [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Restructuring and Related Costs [Table Text Block] | The following is the provision for restructuring:
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Schedule of Restructuring Reserve by Type of Cost [Table Text Block] | The following table represents the activity of employee termination and other exit cost liabilities:
|
INCOME TAXES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Provision for Income Taxes [Table Text Block] | The provision/(benefit) for income taxes consisted of:
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Schedule of Effective Income Tax Rate Reconciliation [Table Text Block] | The reconciliation of the effective tax/(benefit) rate to the U.S. statutory Federal income tax rate was:
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Schedule of Deferred Tax Assets and Liabilities [Table Text Block] | The components of current and non-current deferred income tax assets/(liabilities) were as follows:
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Summary of Valuation Allowance [Table Text Block] | Changes in the valuation allowance were as follows:
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Summary of Income Tax Contingencies [Table Text Block] | A reconciliation of the beginning and ending amount of gross unrecognized tax benefits is as follows:
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Summary of Income Tax Examinations [Table Text Block] | Additional information regarding unrecognized tax benefits is as follows:
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EARNINGS PER SHARE (Tables) |
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Dec. 31, 2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] |
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FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Tables) |
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Financial Instruments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block] | Financial assets and liabilities measured at fair value on a recurring basis are summarized below:
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Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block] | The following table summarizes the activity of the financial assets utilizing Level 3 fair value measurements:
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Available-for-sale Securities [Table Text Block] | The following table summarizes available-for-sale securities:
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Schedule of Derivatives and Fair Value [Table Text Block] | The following summarizes the fair value of outstanding derivatives:
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Schedule of Long-term Debt Instruments [Table Text Block] | Long-term debt includes:
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Schedule of Note Issuances [Table Text Block] | The following table summarizes the note issuances:
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Schedule of Debt Repurchases [Table Text Block] | There were no debt redemptions in 2013. Debt redemption activity for 2015 and 2014 was as follows:
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RECEIVABLES (Tables) |
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Dec. 31, 2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts Receivable, Net [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block] |
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Receivables Allowance [Table Text Block] | Changes to the allowances for bad debt, charge-backs and cash discounts were as follows:
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INVENTORIES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory, Net [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Inventories [Table Text Block] |
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PROPERTY, PLANT AND EQUIPMENT (Tables) |
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Dec. 31, 2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Table Text Block] |
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GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) |
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Intangible Assets By Major Class [Table Text Block] |
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ACCRUED EXPENSES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued Liabilities, Current [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accrued Liabilities [Table Text Block] |
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SALES REBATES AND RETURN ACCRUALS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sales Rebates And Return Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Sales Rebates And Return Accruals [Table Text Block] | Reductions to trade receivables and accrued rebates and returns liabilities are as follows:
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DEFERRED INCOME (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred Income [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Deferred Income [Table Text Block] |
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EQUITY (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Stockholders Equity [Table Text Block] |
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Schedule of Comprehensive Income (Loss) [Table Text Block] | The components of other comprehensive income/(loss) were as follows:
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Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block] | The accumulated balances related to each component of other comprehensive loss, net of taxes, were as follows:
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PENSION AND POSTRETIREMENT BENEFIT PLANS (Tables) |
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Dec. 31, 2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Compensation and Retirement Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Net Benefit Costs [Table Text Block] | The net periodic benefit cost/(credit) of defined benefit pension and postretirement benefit plans includes:
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Schedule Of Defined Benefit Obligations And Assets [Table Text Block] | Changes in defined benefit and postretirement benefit plan obligations, assets, funded status and amounts recognized in the consolidated balance sheets were as follows:
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Schedule Of Accumulated And Projected Benefit Obligation In Excess Of Fair Value Of Plan Assets [Table Text Block] | Additional information related to pension plans was as follows:
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Schedule Of Defined Benefit Actuarial Assumptions Benefit Obligations [Table Text Block] | Weighted-average assumptions used to determine benefit obligations at December 31 were as follows:
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Schedule Of Defined Benefit Actuarial Assumptions Net Periodic Benefit Cost [Table Text Block] | Weighted-average actuarial assumptions used to determine net periodic benefit (credit)/cost for the years ended December 31 were as follows:
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Schedule Of Defined Benefit Historical Long Term Actual Returns [Table Text Block] | Historical long-term actual annualized returns for U.S. pension plans were as follows:
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Schedule Of Health Care Cost Trend Rates [Table Text Block] | Assumed healthcare cost trend rates at December 31 were as follows:
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Schedule Of Effect Of One Percentage Point Change In Assumed Health Care Cost Trend Rates [Table Text Block] | A one-percentage-point change in assumed healthcare cost trend rates would not have a material impact on the cost or benefit obligation. |
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Schedule Of Allocation Of Plan Assets [Table Text Block] | The fair value of pension and postretirement plan assets by asset category at December 31, 2015 and 2014 was as follows:
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Schedule of Level Three Defined Benefit Plan Assets Roll Forward [Table Text Block] | The following summarizes the activity for financial assets utilizing Level 3 fair value measurements:
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EMPLOYEE STOCK BENEFIT PLANS (Tables) |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Compensation Cost for Share-based Payment Arrangements, Allocation of Share-based Compensation Costs by Plan [Table Text Block] | Other information related to stock-based compensation benefits are as follows:
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Schedule of Share-based Compensation, Activity [Table Text Block] |
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Schedule of Unrecognized Compensation Cost, Nonvested Awards [Table Text Block] |
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Schedule Of Share Based Compensation Additional Information [Table Text Block] |
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Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding and Exercisable [Table Text Block] | The following table summarizes significant ranges of outstanding and exercisable options at December 31, 2015:
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SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) (Tables) |
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Selected Quarterly Financial Information [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Quarterly Financial Information [Table Text Block] |
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Selected Quarterly Data Specified Items [Table Text Block] | The following specified items affected the comparability of results in 2015 and 2014: 2015
2014
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ACCOUNTING POLICIES (Details) - USD ($) $ in Millions |
12 Months Ended | ||
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Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
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Direct Operating Costs [Abstract] | |||
Shipping and handling costs | $ 85 | $ 115 | $ 119 |
Advertising and product promotion costs | $ 825 | $ 734 | $ 855 |
Buildings [Member] | Minimum [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Useful life of property, plant and equipment | 20 years | ||
Buildings [Member] | Maximum [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Useful life of property, plant and equipment | 50 years | ||
Machinery equipment and fixtures [Member] | Minimum [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Useful life of property, plant and equipment | 3 years | ||
Machinery equipment and fixtures [Member] | Maximum [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Useful life of property, plant and equipment | 20 years |
BUSINESS SEGMENT INFORMATION (Major Customers) (Details) |
12 Months Ended | ||
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Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
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Concentration Risk [Line Items] | |||
The number of the largest pharmaceutical wholesalers in the U.S. | 3 | ||
Customer Concentration Risk [Member] | McKesson Corporation [Member] | |||
Concentration Risk [Line Items] | |||
Gross sales to three largest pharmaceutical wholesalers in the U.S., percentage of total gross sales | 21.00% | 20.00% | 19.00% |
Customer Concentration Risk [Member] | Amerisourcebergen Corporation [Member] | |||
Concentration Risk [Line Items] | |||
Gross sales to three largest pharmaceutical wholesalers in the U.S., percentage of total gross sales | 16.00% | 17.00% | 15.00% |
Customer Concentration Risk [Member] | Cardinal Health, Inc. [Member] | |||
Concentration Risk [Line Items] | |||
Gross sales to three largest pharmaceutical wholesalers in the U.S., percentage of total gross sales | 12.00% | 12.00% | 14.00% |
ALLIANCES (Gilead) (Details) - USD ($) $ in Millions |
12 Months Ended | ||
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Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
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Alliances Statement [Line Items] | |||
Alliance revenues | $ 2,515 | $ 4,219 | $ 4,081 |
Equity in net loss of affiliates | (83) | (107) | (166) |
Deferred income | 1,589 | 1,937 | |
Gilead [Member] | |||
Alliances Statement [Line Items] | |||
Alliance revenues | 1,096 | 1,255 | 1,366 |
Equity in net loss of affiliates | 17 | 39 | $ 17 |
Deferred income | $ 699 | $ 316 | |
Gilead [Member] | Bulk efavirenz component of Atripla [Member] | |||
Alliances Statement [Line Items] | |||
Total numbers of months to receive royalty payment from alliance partner | 36 months | ||
Percentage of net sales recognized first year following the termination | 55.00% | ||
Percentage of net sales recognized second year following the termination | 35.00% | ||
Percentage of net sales recognized third year following the termination of the agreement | 15.00% |
ALLIANCES (AbbVie) (Details) - AbbVie [Member] |
12 Months Ended |
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Dec. 31, 2015 | |
Alliances Statement [Line Items] | |
Maximum percentage of reimbursement for development costs from alliance partner | 20.00% |
United States [Member] | |
Alliances Statement [Line Items] | |
Profit sharing involving only one compound - maximum | 30.00% |
ALLIANCES (F-Star) (Details) - F-Star [Member] - USD ($) $ in Millions |
12 Months Ended | |
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Dec. 31, 2015 |
Dec. 31, 2014 |
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Alliances Statement [Line Items] | ||
Option and licensing rights payment | $ 50 | |
Days following obtaining proof of concept | 60 days | |
Option exercise payment | $ 100 | |
Consideration for contingent development and regulatory approval | $ 325 | |
Change In Noncontrolling Interest Related to Variable Interest Entities | 59 | |
Fair value of FS102 IPRD asset | $ 75 |
ALLIANCES (Promedior) (Details) $ in Millions |
12 Months Ended |
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Dec. 31, 2015
USD ($)
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Alliances Statement [Line Items] | |
Upfront payments for licensing and alliance arrangements | $ 619 |
Promedior [Member] | |
Alliances Statement [Line Items] | |
Warrant upfront payment | 84 |
Upfront payment capitalized | 66 |
Upfront payments for licensing and alliance arrangements | 150 |
Warrant maximum exercise payment | 300 |
Warrant exercise minimum payment | 250 |
Contingent and regulatory milestone payments | $ 800 |
ALLIANCES (Five Prime) (Details) $ in Millions |
12 Months Ended |
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Dec. 31, 2015
USD ($)
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Alliances Statement [Line Items] | |
Upfront payments for licensing and alliance arrangements | $ 619 |
Five Prime [Member] | |
Alliances Statement [Line Items] | |
Upfront payments for licensing and alliance arrangements | 350 |
Contingent and regulatory milestone payments | $ 1,400 |
OTHER (INCOME)/EXPENSE (Details) - USD ($) $ in Millions |
12 Months Ended | ||
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Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
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Other Nonoperating Income (Expense) [Abstract] | |||
Interest expense | $ 184 | $ 203 | $ 199 |
Investment income | (101) | (101) | (104) |
Provision for restructuring | 118 | 163 | 226 |
Litigation and other settlements | 159 | 23 | 20 |
Equity in net income of affiliates | (83) | (107) | (166) |
Out-licensed intangible asset impairment | 13 | 29 | |
Gain on sale of product lines, businesses and assets | (196) | (564) | (2) |
Other alliance and licensing income | (628) | (404) | (148) |
Pension charges | 160 | 877 | 165 |
Loss on debt redemption | 180 | 45 | |
Other | 7 | 46 | 15 |
Other (income)/expense | (187) | $ 210 | $ 205 |
Litigation charge for a contractual dispute | 90 | ||
Foreign exchange loss related to Venezuela | $ 52 |
RESTRUCTURING (Details) $ in Millions |
12 Months Ended | ||
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Dec. 31, 2015
USD ($)
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Dec. 31, 2014
USD ($)
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Dec. 31, 2013
USD ($)
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Restructuring Cost and Reserve [Line Items] | |||
Employee termination benefits | $ 110 | $ 157 | $ 211 |
Other exit costs | 8 | 6 | 15 |
Provision for restructuring | $ 118 | $ 163 | $ 226 |
Workforce reduction of manufacturing, selling, administrative, and research and development personnel | 1,169 | 1,387 | 1,450 |
Restructuring Reserve [Roll Forward] | |||
Liability at January 1 | $ 156 | $ 102 | $ 167 |
Charges | 133 | 155 | 249 |
Change in estimates | (15) | 8 | (23) |
Foreign currency translation | (15) | (2) | 4 |
Liabilities related to assets held-for-sale | (67) | ||
Spending | (134) | (107) | (228) |
Liability at December 31 | $ 125 | $ 156 | $ 102 |
INCOME TAXES (Provision for Income Taxes) (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Current Income Tax Expense (Benefit), Continuing Operations [Abstract] | |||
U.S. Current Income Tax Expense | $ 337 | $ 334 | $ 375 |
Non-U.S. Current Income Tax Expense | 456 | 560 | 427 |
Total Current Income Tax Expense | 793 | 894 | 802 |
Deferred Income Tax Expense (Benefit), Continuing Operations [Abstract] | |||
U.S. Deferred Income Tax Expense/(Benefit) | (394) | (403) | (390) |
Non-U.S. Deferred Income Tax Expense/(Benefit) | 47 | (139) | (101) |
Total Deferred Income Tax Expense/(Benefit) | (347) | (542) | (491) |
Provision for Income Taxes | $ 446 | $ 352 | $ 311 |
INCOME TAXES INCOME TAXES (Narrative) (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Income Tax Disclosure [Abstract] | |||
Income tax payments | $ 577 | $ 544 | $ 478 |
Current tax benefit realized as a result of stock related compensation credited to capital in excess of par value of stock | $ 147 | $ 131 | $ 129 |
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 |
Sep. 30, 2015 |
Jun. 30, 2015 |
Mar. 31, 2015 |
Dec. 31, 2014 |
Sep. 30, 2014 |
Jun. 30, 2014 |
Mar. 31, 2014 |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Earnings Per Share [Abstract] | |||||||||||
Net Earnings Attributable to BMS | $ (197) | $ 706 | $ (130) | $ 1,186 | $ 13 | $ 721 | $ 333 | $ 937 | $ 1,565 | $ 2,004 | $ 2,563 |
Earnings per Share - Basic | $ (0.12) | $ 0.42 | $ (0.08) | $ 0.71 | $ 0.01 | $ 0.43 | $ 0.20 | $ 0.57 | $ 0.94 | $ 1.21 | $ 1.56 |
Weighted-average common shares outstanding - basic | 1,667 | 1,657 | 1,644 | ||||||||
Contingently convertible debt common stock equivalents | 1 | 1 | |||||||||
Incremental shares attributable to share-based compensation plans | 12 | 12 | 17 | ||||||||
Weighted-average common shares outstanding - diluted | 1,679 | 1,670 | 1,662 | ||||||||
Earnings per Share - Diluted | $ (0.12) | $ 0.42 | $ (0.08) | $ 0.71 | $ 0.01 | $ 0.43 | $ 0.20 | $ 0.56 | $ 0.93 | $ 1.20 | $ 1.54 |
RECEIVABLES (Details) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015
USD ($)
|
Dec. 31, 2014
USD ($)
|
Dec. 31, 2013
USD ($)
|
|
Accounts Receivable, Net [Abstract] | |||
Trade receivables | $ 3,070 | $ 2,193 | |
Less allowances | (122) | (93) | |
Net trade receivables | 2,948 | 2,100 | |
Alliance partner receivables | 958 | 888 | |
Prepaid and refundable income taxes | 182 | 178 | |
Miscellaneous receivables | 211 | 224 | |
Receivables | 4,299 | 3,390 | |
Receivables sold on a nonrecourse basis | $ 476 | $ 812 | $ 1,031 |
The number of the largest pharmaceutical wholesalers in the U.S. | 3 | ||
Percentage of aggregate total trade receivables due from three pharmaceutical wholesalers | 53.00% | 36.00% | |
Allowance for Trade Receivables [Member] | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at beginning of year | $ 93 | $ 89 | 104 |
Provision | 1,059 | 773 | 720 |
Utilization | (1,030) | (769) | (731) |
Assets held-for-sale | (4) | ||
Balance at end of year | $ 122 | $ 93 | $ 89 |
INVENTORIES (Details) - USD ($) $ in Millions |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Inventory, Net [Abstract] | ||
Finished goods | $ 381 | $ 500 |
Work in process | 646 | 856 |
Raw and packaging materials | 194 | 204 |
Inventories | 1,221 | 1,560 |
Inventory pending regulatory approval | 85 | |
Inventories expected to remain on-hand beyond one year | $ 227 | $ 232 |
ACCRUED EXPENSES (Details) - USD ($) $ in Millions |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Accrued Liabilities, Current [Abstract] | ||
Employee compensation and benefits | $ 904 | $ 892 |
Royalties | 161 | 213 |
Accrued research and development | 553 | 445 |
Restructuring - current | 89 | 128 |
Pension and postretirement benefits | 47 | 47 |
Litigation and other settlements | 189 | 43 |
Other | 816 | 691 |
Total accrued expenses | $ 2,759 | $ 2,459 |
SALES REBATES AND RETURN ACCRUALS (Details) - USD ($) $ in Millions |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Sales Rebates And Return Accruals [Abstract] | ||
Charge-backs related to government programs | $ 75 | $ 41 |
Cash discounts | 22 | 15 |
Reductions to trade receivables | 97 | 56 |
Medicaid and Medicare rebates | 434 | 267 |
Sales returns | 181 | 232 |
Other rebates, discounts and adjustments | 709 | 352 |
Accrued rebates and returns | $ 1,324 | $ 851 |
DEFERRED INCOME (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Deferred Income [Abstract] | |||
Alliances | $ 1,459 | $ 1,493 | |
Other | 130 | 444 | |
Total deferred income | 1,589 | 1,937 | |
Current portion | 1,003 | 1,167 | |
Non-current portion | 586 | 770 | |
Deferred early access program | 300 | ||
Amortization of deferred income | $ 307 | $ 362 | $ 548 |
PENSION AND POSTRETIREMENT BENEFIT PLANS (Estimated Future Benefit Payments) (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Pension, Postretirement And Postemployment Liabilities Statement [Line Items] | |||
Pension contributions | $ 118 | $ 124 | $ 251 |
Expected future benefit payments, Years 2021-2025 | 1,700 | ||
Defined contribution plan expense | 190 | $ 190 | $ 190 |
Minimum [Member] | |||
Pension, Postretirement And Postemployment Liabilities Statement [Line Items] | |||
Expected future benefit payments range | 300 | ||
Maximum [Member] | |||
Pension, Postretirement And Postemployment Liabilities Statement [Line Items] | |||
Expected future benefit payments range | 400 | ||
Pension Plans, Defined Benefit [Member] | |||
Pension, Postretirement And Postemployment Liabilities Statement [Line Items] | |||
Expected contributions to pension plans | $ 100 |
LEASES (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Operating Leases, Rent Expense, Net [Abstract] | |||
Operating lease expense | $ 140 | $ 140 | $ 140 |
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | |||
Annual minimum rental commitments for non-cancelable operating leases for next five years | 100 | ||
Minimum rental commitments for non-cancelable operating leases, Later years | $ 300 |
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