10-K405

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2001

Commission File Number 1-1136

BRISTOL-MYERS SQUIBB COMPANY
(Exact name of registrant as specified in its charter)

Delaware	22-079-0350
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

345 Park Avenue, New York, N.Y. 10154
(Address of principal executive offices)
Telephone: (212) 546-4000

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Name of each exchange on which registered
Common Stock, $.10 Par Value	New York Stock Exchange Pacific Exchange, Inc.
$2 Convertible Preferred Stock, $1 Par Value	New York Stock Exchange Pacific Exchange, Inc.

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.    [X]

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes [X]        No        [  ]

The aggregate market value of voting stock held by non-affiliates of the registrant as of February 28, 2002 was $91,009,872,502. At February 28, 2002, there were 1,936,675,006 shares of common stock outstanding.

Documents incorporated by reference

Portions of the 2002 Proxy Statement to be filed on or before April 5, 2002. Part III        

PART I

Item 1. BUSINESS.

DESCRIPTION OF BRISTOL-MYERS SQUIBB COMPANY

General:

Bristol-Myers Squibb Company ("Bristol-Myers Squibb" or the "Company") was incorporated under the laws of the State of Delaware in August 1933 under the name Bristol-Myers Company as successor to a New York business started in 1887. In 1989, the Bristol-Myers Company changed its name to Bristol-Myers Squibb Company, as a result of a merger. The Company, through its divisions and subsidiaries, is a major producer and distributor in one significant business segment—medicines. Operations of the Nutritional and ConvaTec businesses are not material to the financial statements. In general, the business of the Company is not seasonal.

In 2000, the Company announced the planned divestiture of its Clairol and Zimmer businesses. Accordingly, the operations of these businesses have been reflected as discontinued operations in the accompanying financial statements. On November 15, 2001, the Company completed the sale of Clairol for $4.95 billion and on August 6, 2001, the Company spun off Zimmer Holdings, Inc., in a tax-free distribution.

In October 2001, the Company acquired the DuPont Pharmaceuticals business for cash of $7.8 billion. DuPont Pharmaceuticals is primarily a domestic pharmaceutical and imagery product business focused on research and development. In addition, in November 2001, the Company purchased 14.4 million shares of ImClone Systems, Inc. ("ImClone") for $70 per share, which represented 19.9% of the shares outstanding just prior to the commencement of the public tender offer. The completion of the public tender offer is part of a strategic agreement between the Company and ImClone that also includes an arrangement to codevelop and copromote an investigational cancer drug, Erbitux. These transactions were financed with proceeds from the issuance of $1.5 billion of commercial paper, issuance of $5.0 billion of medium-term notes and internal cash flows.

Sales of selected products and product categories from continuing operations are as follows:

	2001		2000		1999
PRAVACHOL*	$	2,173	$	1,817	$	1,704
GLUCOPHAGE		2,049		1,732		1,317
Oncology Therapeutics Network		1,433		1,080		894
PLAVIX		1,350		903		547
Infant formulas		1,255		1,212		1,233
TAXOL*		1,197		1,592		1,481
PARAPLATIN*		702		690		600
ZERIT*		546		618		605
AVAPRO		510		381		255
MONOPRIL*		458		442		424
Ostomy		450		428		449
SERZONE*		409		360		332
CEFZIL*		363		391		402
BUSPAR*		338		709		605
GLUCOVANCE		330		110		—
TEQUIN*		320		131		30
GLUCOPHAGE XR		303		50		—
CAPOTEN/CAPOZIDE		285		356		484
VIDEX*		259		202		205
Wound Care		252		232		238

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PRAVACHOL*	pravastatin sodium, an HMG Co-A reductase inhibitor indicated for primary hypercholestermia. Patents expire in the U.S. in October 2005 and in international markets from 2000 through 2010.
GLUCOPHAGE/ GLUCOPHAGE XR/ GLUCOVANCE	metformin, an oral anti-diabetes agent for type 2 non-insulin-dependent diabetes. Hatch-Waxman exclusivity expired for GLUCOPHAGE in September 2000, however generic metformin did not become available in the U.S. until January 2002. Hatch-Waxman data protection will expire for GLUCOPHAGE XR in October 2003 and GLUCOVANCE in July 2003.
Oncology Therapeutics Network	A specialty distributor of anti-cancer medicines and related products.
PLAVIX	clopidogrel, a platelet inhibitor, codeveloped and jointly marketed with Sanofi-Synthelabo.
TAXOL*	paclitaxel, used in the treatment of refractory ovarian cancer, first-line treatment of ovarian cancer in combination with cisplatin, second-line treatment of AIDS- related Kaposi's Sarcoma, treatment of metastatic breast cancer after failure of combination chemotherapy, adjuvant treatment of node positive breast cancer and in the treatment of non-small cell lung carcinoma with cisplatin. Reference is made to Item 3 Legal Proceedings in Part I of this Form 10-K Annual Report and to Note 18 Litigation in Part II, Item 8, of this Form 10-K Annual Report.
PARAPLATIN*	carboplatin, a chemotherapeutic agent used in the treatment of ovarian cancer. Patent expired in France in June 2000 and expires in the U.S. in April 2004.
ZERIT*	stavudine, used in the treatment of persons with advanced HIV disease. Patent expires in the U.S. in June 2008 and internationally from 2007 through 2011.
AVAPRO	irbesartan, an angiotensin II receptor antagonist indicated for the treatment of hypertension, codeveloped and jointly marketed with Sanofi-Synthelabo.
MONOPRIL*	fosinopril sodium, a second-generation ACE inhibitor with once-a-day dosing indicated for the treatment of hypertension. Composition of matter U.S. patent expires in December 2002 and in international markets from 2001 through 2008.
SERZONE*	nefazodone, an antidepressant treatment. Patent expires in the U.S. in March 2003 and internationally from 2002 through 2010.
CEFZIL*	cefprozil, an oral cephalosporin used in the treatment of respiratory infections and sinusitis. U.S. patent expires in December 2005 and in international markets from 2003 through 2008.
BUSPAR*	buspirone, a novel anti-anxiety agent for persistent anxiety with or without accompanying depressive symptoms. The U.S. anxiolytic use patent expired on May 22, 2000. The Food and Drug Administration granted the Company an additional six months exclusivity based on its performance of pediatric studies. Patents outside of the U.S. expired in 1999. Reference is made to Item 3 Legal Proceedings in Part I of this Form 10-K Annual Report and to Note 18 Litigation in Part II, Item 8, of this Form 10-K Annual Report.

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TEQUIN*	gatifloxacin, an advanced quinolone anti-infective. Patents expire in the U.S. in December 2007, with an expected patent term extension to 2009, and internationally from January 2003 through June 2017.
CAPOTEN/CAPOZIDE	captopril, an angiotensin converting enzyme (ACE) inhibitor. Patents have expired in the U.S. and in all significant international markets.
VIDEX*	didanosine, an antiretroviral drug used in the treatment of adult and pediatric patients with advanced human immunodeficiency virus (HIV) infection. Patent expires in the U.S. in August 2006 and internationally from 2006 through 2009. The patent is held by the National Institutes of Health. The Company's license under the patent became non-exclusive in October 2001.

*

Indicates brand names of products which are registered trademarks owned by the Company.

SOURCES AND AVAILABILITY OF RAW MATERIALS

In general, Bristol-Myers Squibb purchases its principal raw materials and supplies in the open market. Substantially all such materials are obtainable from a number of sources so that the loss of any one source of supply would not have a material adverse effect on the Company.

PATENTS, TRADEMARKS AND LICENSES

The Company owns or is licensed under a number of patents in the United States and foreign countries covering products, and has also developed many brand names and trademarks for products. The Company considers the overall protection of its patent, trademark and license rights to be of material value and acts to protect these rights from infringement. U.S. patents that are expected to expire in the next three years include the composition of matter patents for MONOPRIL* (December 2002) and SERZONE* (March 2003). In addition, a use patent for PARAPLATIN* will expire in April 2004. Hatch-Waxman data protection will expire for GLUCOPHAGE XR in October 2003 and GLUCOVANCE in July 2003. All of these expiry dates could be extended by an additional six months under the pediatric extension, upon the completion and acceptance of pediatric studies by the U.S Food and Drug Administration (FDA) in advance of the expiration. The Company believes that no single patent or license is of material importance in relation to the business as a whole.

COMPETITION, DISTRIBUTION AND CUSTOMERS

The markets in which Bristol-Myers Squibb competes are generally broad-based and highly competitive. The principal means of competition utilized to market the products of Bristol-Myers Squibb include quality, service, price and product performance. Pharmaceutical products and the products of ConvaTec are promoted on a national and international basis in medical journals and directly to the medical profession. The Company is also utilizing direct-to-consumer advertising for a number of its pharmaceutical products. Most of the other products of Bristol-Myers Squibb are generally advertised and promoted on a national and international basis through the use of television, radio, print media, consumer offers, and window and in-store displays. Bristol-Myers Squibb's products are principally sold to the wholesale and retail trade both nationally and internationally. Certain products are also sold to other drug manufacturers, hospitals and the medical profession. Three wholesalers accounted for approximately 45% of net sales from continuing operations in 2001.

RESEARCH AND DEVELOPMENT

Research and development is essential to Bristol-Myers Squibb's business. Pharmaceutical research and development is carried out by the Bristol-Myers Squibb Pharmaceutical Research Institute, which has major facilities in Princeton, Hopewell and New Brunswick, New Jersey; Wilmington, Delaware and Wallingford, Connecticut. Pharmaceutical research and development is also carried out at various other facilities in the United States and in Belgium, Canada, France, Italy and the United Kingdom.

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Management continues to emphasize leadership, innovation and productivity as strategies for success in the Research Institute.

Bristol-Myers Squibb, excluding DuPont and ImClone, spent $2,124 million in 2001, $1,939 million in 2000 and $1,759 million in 1999 on Company sponsored research and development activities. On this basis, pharmaceutical research and development spending, as a percentage of pharmaceutical sales, was 13.5% in 2001 compared with 13.0% in 2000 and 12.6% in 1999.

REGULATION

Most aspects of the Company's business are subject to some degree of government regulation in the countries in which its operations are conducted. The Company's policy is to comply fully with all regulatory requirements applying to its products and operations. For some products, and in some countries, government regulation is significant and, in general, there is a trend to more stringent regulation. The Company devotes significant time, effort and expense addressing the extensive governmental regulatory requirements applicable to its business. Governmental regulatory actions can result in the recall or seizure of products, suspension or revocation of the authority necessary for the production or sale of a product, and other civil and criminal sanctions.

In the United States, the drug, medical device, diagnostic and food industries in which the Company operates have long been subject to regulation by various federal, state and local agencies, primarily as to product manufacture, safety, efficacy, advertising and labeling.

In addition, governmental bodies in the United States as well as other countries have expressed concern about costs relating to health care and, in some cases, have focused attention on the pricing of drugs and on appropriate drug utilization. Government regulation in these areas already exists in some countries and may be expanded significantly in the United States and other countries in the future.

While the Company is unable to predict the extent to which its business may be affected by future regulatory developments, it believes that its substantial experience dealing with governmental regulatory requirements and restrictions on its operations throughout the world and its development of new and improved products should enable it to compete effectively within this environment.

EMPLOYEES

Bristol-Myers Squibb employees from continuing operations were approximately 46,000 people at December 31, 2001.

DOMESTIC AND FOREIGN OPERATIONS

Reference is made to Note 13 Financial Instruments, and Note 14 Segment Information in the Notes to Consolidated Financial Statements included in Part II, Item 8 of this Form 10-K Annual Report.

International operations are subject to certain risks which are inherent in conducting business abroad, including possible nationalization or expropriation, price and exchange controls, limitations on foreign participation in local enterprises and other restrictive governmental actions. In addition, changes in the relative value of currencies take place from time to time and their effects may be favorable or unfavorable on Bristol-Myers Squibb's operations. There are currency restrictions relating to repatriation of earnings in certain countries.

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Item 2. PROPERTIES.

Bristol-Myers Squibb's world headquarters is located at 345 Park Avenue, New York, New York, where it leases approximately 460,000 square feet of floor space, approximately 215,000 square feet of which is sublet to others.

Bristol-Myers Squibb manufactures products at thirty-seven major worldwide locations with an aggregate floor space of approximately 13,300,000 square feet. All facilities are owned by Bristol-Myers Squibb. The following table illustrates the geographic location of the Company's significant manufacturing facilities.

United States	14
Europe, Mid East and Africa	10
Other Western Hemisphere	6
Pacific	7
Total	37

Portions of these facilities and other facilities owned or leased by Bristol-Myers Squibb in the United States and elsewhere are used for research, administration, storage and distribution. Bristol-Myers Squibb's facilities are well maintained, adequately insured and in satisfactory condition.

Item 3. LEGAL PROCEEDINGS.

Various lawsuits, claims and proceedings of a nature considered normal to its businesses are pending against the Company and certain of its subsidiaries. The most significant of these are described below.

Reference is made to Note 18 Litigation in the Notes to the Consolidated Financial Statements included in Part II, Item 8 of this Form 10-K Annual Report.

BREAST IMPLANT LITIGATION

The Company, together with its subsidiary Medical Engineering Corporation (MEC) and certain other companies, remains a defendant in a number of claims and lawsuits alleging damages for personal injuries of various types resulting from polyurethane-covered breast implants and smooth-walled breast implants formerly manufactured by MEC or a related company. The vast majority of claims against the Company in direct lawsuits have been resolved through settlements or trial. Likewise, claims or potential claims against the Company registered in the nationwide class action settlement approved by the Federal District Court in Birmingham, Alabama (Revised Settlement), have been or will be resolved through the Revised Settlement. The Company expects it will be able to address all remaining claims or potential claims through its product liability reserves.

TAXOL* LITIGATION

In 1997 and 1998, the Company filed several lawsuits alleging that a number of generic drug companies infringed its patents covering methods of administering paclitaxel when they filed Abbreviated New Drug Applications seeking regulatory approval to sell paclitaxel. These actions were consolidated for discovery in the U.S. District Court for the District of New Jersey (District Court). The Company did not assert a monetary claim against any of the defendants, but sought to prevent the defendants from marketing paclitaxel in a manner that violates the Company's patents. The defendants asserted that they did not infringe the Company's patents and that these patents are invalid and unenforceable.

In early 2000, the District Court invalidated most claims of the Company's patents. On April 20, 2001, the U.S. Court of Appeals for the Federal Circuit affirmed the District Court's summary judgment of the invalidity of all but two claims of the patents at issue. Those two claims relate to the low-dose, three-hour

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administration of paclitaxel in which the patient is given a specified regimen of premedicants before the administration of paclitaxel. The appellate court remanded those two claims to the District Court for further proceedings. In 2001 the Company filed an additional patent infringement suit against another company seeking to market generic paclitaxel.

In September 2000, one of the defendants received final approval from the U.S. Food and Drug Administration (FDA) for its Abbreviated New Drug Application for paclitaxel and is marketing the product. Additional final approvals have since been announced by the FDA and sales of additional generic products have begun.

Some of the defendants asserted counterclaims seeking damages for alleged antitrust and unfair competition violations. The Company believed its patents were valid when it filed the suits, and the counterclaims asserted are believed to be without merit. Since the filing of the suits, six private actions have been filed by parties alleging antitrust, consumer protection and similar claims relating to the Company's actions to obtain and enforce patent rights. The plaintiffs seek declaratory judgment, damages (treble and/or punitive where allowed), disgorgement and injunctive relief. In September 2000, the Federal Trade Commission initiated an investigation relating to paclitaxel. Various state attorneys general have also initiated investigations regarding paclitaxel. At this time, none of these federal and state agencies has brought any claims against the Company relating to paclitaxel, nor have they indicated whether any such claims will be brought. The Company is cooperating in these investigations.

The lawsuits with four of the defendants have been settled with defendants agreeing to drop all claims against the Company relating to paclitaxel and the Company granting licenses to the four defendants under certain paclitaxel patent rights. The Company is considering its options with respect to the two remaining patent infringement defendants. It is not possible at this time to make a reasonable assessment as to the final outcome of these lawsuits and investigations. Nor is it possible to reasonably estimate the impact those litigations and investigations might have if the Company were not to prevail.

BUSPAR* LITIGATION

On November 21, 2000, the Company obtained a patent, U.S. Patent No. 6,150,365 ("365 patent"), relating to a method of using BUSPAR* or buspirone. The Company submitted timely information relating to the "365 patent" to the FDA for listing in an FDA publication commonly known as the "Orange Book," and the FDA thereafter listed the patent in the Orange Book.

Delisting Suits. Generic-drug manufacturers sued the FDA and the Company to compel the delisting of the "365 patent" from the Orange Book. Although one district court declined to order the delisting of the "365 patent", another ordered the Company to cause the delisting of the patent from the Orange Book. The Company complied with the court's order but appealed the decision to the United States Court of Appeals for the Federal Circuit. The Federal Circuit reversed the district court that ordered the delisting.

Patent Suits. The Company is seeking to enforce the "365 patent" in actions against two generic drug manufacturers.

Antitrust Suits. Following the delisting of the "365 patent" from the Orange Book, a number of purchasers of buspirone and several generic drug makers filed lawsuits against the Company alleging that it improperly triggered statutory marketing exclusivity. The attorneys general of 29 states and Puerto Rico have also filed suit against the Company with parallel allegations. Some of the private plaintiffs have amended their allegations to include charges that a 1994 agreement between the Company and a generic company improperly blocked the entry of generic buspirone to the market. The central issues raised by these cases are whether the Company improperly caused the listing of the "365 patent" in the Orange Book and whether the 1994 agreement was improper. Plaintiffs seek declaratory judgment, damages (treble and/or punitive where allowed), disgorgement and injunctive relief.

7

Multidistrict Litigation (MDL) proceedings. The Judicial Panel on MDL granted the Company's motions to have all of the patent and antitrust cases consolidated in a single forum. The court before which the buspirone litigations are now pending issued two opinions dated February 14, 2002. In the first opinion, the court found that the "365 patent" does not cover uses of buspirone and therefore is not infringed. In the second opinion, the court denied the Company's motion to dismiss the federal antitrust and state law claims against the Company. The second opinion allows the claims against the Company to proceed, except as to federal antitrust claims for damages accrued more than four years before the filing of the complaints.

Government Investigations. The Federal Trade Commission and a number of state attorneys general have initiated investigations concerning the listing of the "365 patent" in the Orange Book. The Company is cooperating in these investigations. A number of attorneys general, but not all of them, filed an action against the Company, as noted earlier.

It is not possible at this time to make a reasonable assessment as to the final outcome of these lawsuits and investigations. If the Company were not to prevail in final, non-appealable determinations of these litigations and investigations, the impact on the Company could be material.

VANLEV* LITIGATIONS

In April, May and June 2000, the Company, its former chairman of the board and chief executive officer, Charles A. Heimbold, Jr., and its chief scientific officer, Peter S. Ringrose, Ph.D., were named as defendants in a number of class action lawsuits alleging violations of federal securities laws and regulations. These actions have been consolidated into one action for pretrial proceedings in the U.S. District Court for the District of New Jersey. The plaintiff claims that the defendants disseminated materially false and misleading statements and failed to disclose information concerning the safety and expected availability of its product VANLEV during the period November 8, 1999, through April 19, 2000. The plaintiff seeks compensatory damages, costs and expenses.

In March 2002, the Company and its Chairman and Chief Executive Officer, Peter R. Dolan, were named as defendants in a purported securities class action lawsuit alleging violations of federal securities laws and regulations. The action is pending in the U.S. District Court for the Southern District of New York. The plaintiffs allege that the defendants disseminated materially false and misleading statements and failed to disclose safety data of its product VANLEV during the period September 25, 2001, through March 19, 2002. The plaintiffs seek compensatory damages, costs and expenses.

It is not possible at this time to make a reasonable assessment of the final outcome of these matters or the amount of damages if the Company were not to prevail.

Environmental Matters

The Company, together with others, is a party to, or otherwise involved in, a number of proceedings brought by the Environmental Protection Agency or comparable state agencies under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA or Superfund) or comparable state laws directed at the cleanup of hazardous waste sites.

While it is not possible to predict with certainty the outcome of these cases, it is the opinion of management that they will not have a material adverse effect on the Company's operating results, liquidity or consolidated financial position.

Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

No matters were submitted to security holders during this period.

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PART IA

EXECUTIVE OFFICERS OF THE REGISTRANT

Listed below is information on executive officers of the Company as of March 22, 2002. Executive officers are elected by the Board of Directors for an initial term which continues until the first Board meeting following the next annual meeting of stockholders and thereafter are elected for a one-year term or until their successors have been elected. All executive officers serve at the pleasure of the Board of Directors.

Name and Current Position	Age	Employment History for the Past 5 Years
Peter R. Dolan Chairman of the Board and Chief Executive Officer	46	1997 to 1998—President, Pharmaceutical Group, a division of the Company. 1998 to 2000—Senior Vice President, Strategy and Organizational Effectiveness, Corporate Staff of the Company. 2000—President and Director of the Company. 2001 to present—Chairman of the Board and Chief Executive Officer of the Company.
Harrison M. Bains Vice President, Tax & Treasury, Corporate Staff	58	1988 to 2002—Vice President and Treasurer, Corporate Staff of the Company. 2002 to present—Vice President, Tax & Treasury, Corporate Staff of the Company.
Stephen E. Bear Senior Vice President, Human Resources, Corporate Staff	50	1997 to 1998—President, Worldwide Consumer Medicines, a division of the Company. 1998 to 1999—Vice President, Strategic Business Development, Worldwide Beauty Care/Nutritional & Medical Devices, Corporate Staff of the Company. 1999 to 2001—Vice President, Marketing and Business Development of the New York Botanical Gardens, a non-profit organization. 2001 to present—Senior Vice President, Human Resources, Corporate Staff. Mr. Bear is a member of the Executive Committee.
Andrew G. Bodnar, M.D. Senior Vice President, Medical and External Affairs, Corporate Staff	54	1995 to 1998—Vice President, Medical & Legal Affairs, Corporate Staff of the Company. 1998 to 1999—Vice President, Strategic Business Development, Worldwide Medicines Group, a division of the Company. 2000 to 2001—Vice President, Medical and External Affairs, Corporate Staff of the Company. 2001 to present—Senior Vice President, Medical and External Affairs, Corporate Staff of the Company. Dr. Bodnar is a member of the Executive Committee.
Wendy L. Dixon Chief Marketing Officer and President, Global Marketing	46	1996 to 2001—Vice President, Pfizer Inc. 2001—Senior Vice President, Pfizer Inc. 2001 to present—Chief Marketing Officer and President, Global Marketing, Worldwide Medicines Group, a division of the Company.
Donald J. Hayden Executive Vice President, Health Care Group	46	1997 to 1998—President, Intercontinental, Worldwide Medicines Group, a division of the Company. 1998 to 2000—Senior Vice President, Corporate Staff of the Company and President, Worldwide Medicines Group, a division of the Company. 2000 to 2001—Executive Vice President, e-Business & Strategy, Corporate Staff of the Company. 2001 to present—Executive Vice President, Health Care Group. Mr. Hayden is a member of the Executive Committee.

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Tamar D. Howson Senior Vice President, Corporate Development, Corporate Staff	53	1996 to 1998—Senior Vice President and Director, Worldwide Business Operations of SmithKline Beecham Corporation, a health care company. 1998 to 2000—Senior Vice President and Director, Business Development of SmithKline Beecham Corporation. 2000 to 2001—biotechnology consultant to chief executive officers and other business executives. 2001 to present—Senior Vice President, Corporate Development, Corporate Staff of the Company. Ms. Howson is a member of the Executive Committee.
George P. Kooluris Senior Vice President, Corporate Development, Corporate Staff	57	1994 to present—Senior Vice President, Corporate Development, Corporate Staff of the Company.
Richard J. Lane Executive Vice President, Corporate Staff and President, Worldwide Medicine Group	51	1997 to 1998—President, U.S. Pharmaceuticals, a division of the Company. 1998 to 2000—President, U.S. Medicines and Global Pharmaceutical Group, a division of the Company. 2000 to present—Executive Vice President, Corporate Staff of the Company and President, Worldwide Medicines Group, a division of the Company. Mr. Lane is a member of the Executive Committee.
Sandra Leung Corporate Secretary and Head of the Office of Corporate Conduct, Corporate Staff	41	1997 to 1999—Associate Counsel, Corporate Staff of the Company. 1999 to present—Secretary, Corporate Staff, and Head of the Office of Corporate Conduct since 1999.
John L. McGoldrick Executive Vice President and General Counsel, Corporate Staff	61	1997 to 1998—General Counsel and Senior Vice President, Law and Strategic Planning, Corporate Staff of the Company. 1998 to 2000—General Counsel and Senior Vice President, Corporate Staff of the Company and President, Medical Devices Group, a division of the Company. 2000 to 2001—Executive Vice President and General Counsel of the Company, President, Medical Devices Group, a division of the Company. 2001 to present—Executive Vice President and General Counsel, Corporate Staff of the Company. Mr. McGoldrick is a member of the Executive Committee.
Peter S. Ringrose, Ph.D Chief Scientific Officer, Corporate Staff and President, Bristol-Myers Squibb Company Pharmaceutical Research Institute	55	1997 to 2000—President, Bristol-Myers Squibb Pharmaceutical Research Institute, a division of the Company. 2000 to present—Chief Scientific Officer, Corporate Staff of the Company and President, Bristol-Myers Squibb Pharmaceutical Research Institute, a division of the Company. Dr. Ringrose is a member of the Executive Committee.
Frederick S. Schiff Senior Vice President and Chief Financial Officer, Corporate Staff	54	1997 to 2000—Vice President, Financial Operations and Controller, Corporate Staff of the Company. 2000 to 2001—Senior Vice President, Financial Operations & Controller. 2001 to present—Senior Vice President and Chief Financial Officer. Mr. Schiff is a member of the Executive Committee.

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Elliott Sigal, M.D., Ph.D Senior Vice President, Drug Discovery & Exploratory Development, Bristol-Myers Squibb Company Pharmaceutical Research Institute	50	1997 to 1999—Vice President, Applied Genomics, Pharmaceutical Research Institute, a division of the Company. 1999 to 2001—Senior Vice President, Early Discovery and Applied Technology, Pharmaceutical Research Institute, a division of the Company. 2001 to present—Senior Vice President, Drug Discovery & Exploratory Development, Pharmaceutical Research Institute, a division of the Company. Dr. Sigal is a member of the Executive Committee.
John L. Skule Senior Vice President, Corporate and Environmental Affairs, Corporate Staff	58	1993 to 1997—Vice President, Public Affairs, Corporate Staff of the Company. 1998 to present—Senior Vice President, Corporate and Environmental Affairs, Corporate Staff of the Company. Mr. Skule is a member of the Executive Committee.
Curtis L. Tomlin Vice President and Controller, Corporate Staff	49	1996 to 1999—Vice President, Finance, Hercules Inc. 1999 to 2000—Vice President, Auditing Services, Pharmacia & Upjohn. 2000 to 2001—Vice President and Controller, Pharmacia Corporation, Monsanto Division. 2001 to present—Vice President and Controller, Corporate Staff of the Company.

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PART II

Item 5.    MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS.

MARKET PRICES

Bristol-Myers Squibb common and preferred stocks are traded on the New York Stock Exchange and the Pacific Exchange, Inc. (symbol: BMY). A quarterly summary of the high and low market prices is presented below:

Common:

	2001				2000
	High		Low		High		Low
First Quarter	$	71.50	$	54.75	$	68.50	$	43.50
Second Quarter		59.85		52.10		66.50		49.50
Third Quarter		59.73		50.50		58.94		47.75
Fourth Quarter		59.70		49.00		73.94		55.50

Preferred:

The Company's preferred stock traded at a high of $962 and a low of $857 during the second quarter of 2000. During all four quarters of 2001, and the first, third and fourth quarters of 2000, there were no trades of the Company's preferred stock.

HOLDERS OF COMMON STOCK

The approximate number of record holders of common stock at December 31, 2001 was 107,626.

The number of record holders is based upon the actual number of holders registered on the books of Bristol-Myers Squibb at such date and does not include holders of shares in "street names" or persons, partnerships, associations, corporations or other entities identified in security position listings maintained by depository trust companies.

VOTING SECURITIES AND PRINCIPAL HOLDERS

Reference is made to the 2002 Proxy Statement to be filed on or before April 5, 2002 with respect to voting securities and principal holders which is incorporated herein by reference and made a part hereof in response to the information required by Item 5.

DIVIDENDS

Dividend payments per share in 2001 and 2000 were:

	Common				Preferred
	2001		2000		2001		2000
First Quarter	$	.275	$	.245	$	.50	$	.50
Second Quarter		.275		.245		.50		.50
Third Quarter		.275		.245		.50		.50
Fourth Quarter		.275		.245		.50		.50
	$	1.10	$	.98	$	2.00	$	2.00

In December 2001, the Board of Directors of the Company declared a quarterly dividend of $.28 per share on the common stock of the Company, payable on February 1, 2002 to shareholders of record as of January 4, 2002. The 2002 indicated annual payment of $1.12 per share represents the thirtieth consecutive year that the Company has raised the dividend on its common stock.

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Item 6.    SELECTED FINANCIAL DATA.

Five-Year Financial Summary

		Operating Results
		2001		2000		1999		1998		1997
		(in millions, except per share amounts)
Net Sales		$	19,423	$	18,216	$	16,878	$	15,061	$	13,698
Expenses:
	Cost of products sold		5,575		4,759		4,542		3,896		3,548
	Marketing, selling and administrative		3,903		3,860		3,789		3,685		3,425
	Advertising and product promotion		1,433		1,672		1,549		1,518		1,582
	Research and development		2,259		1,939		1,759		1,506		1,322
	Acquired in-process research and development(*)		2,744		—		—		—		—
	Other(*)		523		508		81		818		83
			16,437		12,738		11,720		11,423		9,960
Earnings from Continuing Operations Before Income Taxes(*)			2,986		5,478		5,158		3,638		3,738
Provision for income taxes			459		1,382		1,369		888		994
Earnings from Continuing Operations(*)		$	2,527	$	4,096	$	3,789	$	2,750	$	2,744
Earnings per common share
Basic(*)		$	1.30	$	2.08	$	1.91	$	1.38	$	1.38
Diluted(*)		$	1.29	$	2.05	$	1.87	$	1.36	$	1.34
Dividends per common share			1.10		.98		.86		.78		.76

(*)

Includes gain on sales of businesses before taxes of $315 million in 2001; $160 million in 2000; and $201 million in 1998. Includes special charges for acquired in-process research and development of $2,744 million and for expenses related to the DuPont and ImClone transactions, including loss from operations, amortization and interest expenses and other onetime costs of $246 million before taxes in 2001. Includes a provision for restructuring and other charges before taxes of $781 million in 2001; $508 million in 2000; $157 million in 1998; and $120 million in 1997. Includes special charges for prescription drug pricing litigation of $100 million and for pending and future product liability claims of $700 million before taxes in 1998.

Five-Year Financial Summary

		Financial Position at December 31**
		2001		2000		1999		1998		1997
		(in millions, except per share amounts)
Total assets		$	27,057	$	17,578	$	17,114	$	16,272	$	14,977
Long-term debt			6,237		1,336		1,342		1,364		1,279
Average common shares outstanding —
	Basic		1,940		1,965		1,984		1,987		1,992
Average common shares outstanding —
	Diluted		1,965		1,997		2,027		2,031		2,042

Reference is made to Note 2 Discontinued Operations, Note 3 Acquisitions and Divestitures, Note 4 Restructuring, Note 7 Alliances and Investments and Note 18 Litigation, appearing in the Notes to Consolidated Financial Statements included in Part II, Item 8 of this Form 10-K Annual Report.

**

Financial position data relates to the Company's assets and liabilities, including discontinued operations for the years 1997 through 2000.

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Item 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Summary

The year 2001 was one of change for Bristol-Myers Squibb. Consistent with the strategy to become a more focused pharmaceutical Company, a number of transactions were completed during the year, including the divestiture of two nonpharmaceutical businesses: Clairol (beauty care) and Zimmer (orthopaedics). The results for these businesses have been reported as discontinued operations and excluded from consolidated sales and expenses for all years. In addition, in the fourth quarter 2001, the Company acquired the DuPont Pharmaceuticals business (DuPont) and made a 19.9% equity investment in a biotechnology company—ImClone Systems, Inc. (ImClone).

Including sales by DuPont, Bristol-Myers Squibb reported $19.4 billion in annual global sales for 2001, an increase of 7% (9% excluding foreign exchange) over 2000. Domestic sales, representing 68% of worldwide sales, increased 9% to $13.1 billion, while international sales increased 3% (8% excluding foreign exchange) to $6.3 billion. Sales for the Company, excluding sales by DuPont, were $19.1 billion, an increase of 5% (7% excluding foreign exchange) over 2000.

The Company's most important product lines made a significant contribution to the Company's sales growth. Many of these experienced double digit growth on a worldwide basis. During the year, the Company had four blockbuster products, each with annual sales in excess of $1 billion—PRAVACHOL*, GLUCOPHAGE, PLAVIX and TAXOL* (paclitaxel). In fact, PRAVACHOL* and GLUCOPHAGE each had annual sales in excess of $2 billion. The Company had 50 product lines with more than $50 million in annual sales, including 28 with more than $100 million in annual sales and four with more than $500 million in annual sales.

Earnings from continuing operations before income taxes increased 11% to $6.4 billion from $5.8 billion in 2000 on a stand-alone basis, which excludes the effects of the DuPont and ImClone transactions and nonrecurring items. On this basis, net earnings increased 10% to $4.7 billion; basic and diluted earnings per share increased 11% to $2.44 and 12% to $2.41, respectively. Net earnings for the total Company (continuing and discontinued operations) increased 11% to $5.2 billion in 2001. On this same basis, basic and diluted earnings per share increased 13% to $2.70 and $2.67, respectively.

Bristol-Myers Squibb's financial position remains strong. At December 31, 2001, the Company held almost $5.7 billion in cash, time deposits and marketable securities. Cash provided from operating activities reached $5.4 billion in 2001. In connection with the DuPont and ImClone transactions, the Company issued $5.0 billion of notes of which $2.5 billion matures in 2006 and $2.5 billion matures in 2011 with coupon interest rates of 4.75% and 5.75%, respectively. Returns to shareholders included dividend distributions of $2.1 billion and stock repurchases of $1.6 billion. Dividends per common share were $1.10 in 2001, increasing from $0.98 per share paid in 2000. In December 2001, the Company announced a dividend increase, the 30th consecutive year that dividends have increased. The 2002 indicated annual payment is $1.12 per common share, a 2% increase over 2001. As further evidence of its strong financial position, Bristol-Myers Squibb is one of only seven U.S. industrial companies to receive a AAA credit rating from both Moody's and Standard & Poor's investment rating agencies.

In 2001, consistent with our mission to extend and enhance human life, by developing the highest-quality products, the Company on a stand-alone basis invested $2.1 billion in research and development, a 10% growth over 2000. Research and development dedicated to pharmaceutical products increased 11% over 2000, with a compound annualized growth in spending of 14% over the past five years. That continuing investment led to the discovery of innovative new products and the development of new indications for existing products in 2001 that led to twelve regulatory filings, including VANLEV* for hypertension, ARIPIPRAZOLE for schizophrenia and PLAVIX for acute coronary syndrome. In addition, the Company

14

received seven regulatory approvals for supplemental submissions, including TEQUIN* for short-course (five-day) regimen.

U.S. patents that are expected to expire in the next three years include the composition of matter patents for MONOPRIL* (December 2002) and SERZONE* (March 2003). In addition, a use patent for PARAPLATIN* will expire in April 2004. Hatch-Waxman data protection will expire for GLUCOPHAGE XR in October 2003 and GLUCOVANCE in July 2003. All of these expiry dates could be extended by an additional six months under the pediatric extension, upon the completion and acceptance of pediatric studies by the U.S Food and Drug Administration (FDA) in advance of the expiration.

In October 2001, the Company acquired the DuPont Pharmaceuticals business from E. I. duPont de Nemours and Company for $7.8 billion. In 2001, the Company also announced a collaboration agreement with Exelixis, Inc., to create a new generation of cancer drugs that selectively destroy cancers that harbor defects in tumor-suppressed gene pathways.

In September 2001, the Company entered into a commercial agreement with ImClone to codevelop and copromote an investigational cancer drug, Erbitux. Under the commercial agreement, the Company was required to pay ImClone an aggregate of $1 billion upon the achievement of three milestones, of which $200 million was paid in 2001. In November 2001, the Company also purchased 14.4 million shares of ImClone for $70 per share, which represented approximately 19.9% of the ImClone shares outstanding just prior to the commencement of the public tender offer.

On December 28, 2001, ImClone announced that the FDA refused to accept for filing the Biologics License Application (BLA) that had been submitted by ImClone for Erbitux. The BLA had been submitted to gain marketing approval to treat irinotecan-refractory colorectal carcinoma.

On January 18, 2002, the Subcommittee on Oversight and Investigations of the House Energy and Commerce Committee announced it is investigating questions about the conduct of ImClone in the development of Erbitux. On January 25, 2002, ImClone announced it had received an informal inquiry from the Securities and Exchange Commission as well as inquiries from the Justice Department and the aforementioned subcommittee. The Company will cooperate with these investigations.

The Company and ImClone met with the FDA in February 2002 and are currently evaluating next steps.

On March 5, 2002, the agreement with ImClone was revised to reduce the total payments to $900 million from $1 billion. Under the new agreement the Company paid ImClone $140 million in the first quarter of 2002 and will pay ImClone $60 million in March 2003 and an aggregate of $500 million upon the achievement of two milestones. Also under the agreement, the Company will pay ImClone a distribution fee based on a flat rate of 39% of product revenues in North America.

The carrying value of the Company's approximately 19.9% equity investment in ImClone was $481 million as of December 31, 2001. On a per-share basis, the carrying value of the Company's ImClone investment and the closing market value of ImClone shares as of December 31, 2001, were $33.40 and $46.46, respectively. Given the FDA's December 28, 2001, action and the market value of ImClone shares since December 31, 2001 ($19.58 per share as of January 24, 2002), it is possible that the Company could recognize a charge for impairment of the investment in ImClone in future periods based upon further developments of the status of Erbitux and the market value of ImClone.

Net Sales

Sales increased 7% in 2001 to $19.4 billion, including the sales from the DuPont acquisition. Domestic sales increased 9% in 2001 and 14% in 2000, while international sales increased 3% in 2001 (8% excluding foreign exchange) and decreased 2% in 2000 (a 5% increase excluding foreign exchange). On a stand-alone basis, excluding sales from the DuPont acquisition, sales increased 5% in 2001 to $19.1 billion compared with increases of 8% and 12% in 2000 and 1999, respectively. The consolidated sales growth in

15

2001, on a stand-alone basis, resulted from a 5% increase due to volume, a 2% increase due to changes in selling prices and a 2% decrease due to foreign exchange rate fluctuations. In 2000, the 8% increase in sales reflected an 8% increase due to volume, a 3% increase due to changes in selling prices and a 3% decrease due to foreign exchange rate fluctuations. In 1999, the 12% increase in sales reflected an 11% increase due to volume, a 2% increase due to changes in selling prices and a 1% decrease due to foreign exchange rate fluctuations. In general, the business of the Company is not seasonal.

A significant portion of the Company's domestic pharmaceutical sales is made to wholesalers. As a result, the financial results and quarterly comparisons are affected by fluctuations in the buying patterns of these major wholesalers and the corresponding changes in inventory levels maintained by these wholesalers. These changes may not reflect underlying prescriber demand. While the Company cannot verify wholesaler inventory levels, the Company believes average wholesaler inventories of products in the U.S. increased during 2001 by approximately four weeks of its average sales to these wholesalers primarily due to sales incentives offered by the Company to them. As a result, the Company estimates the Company's 2001 domestic pharmaceutical sales included approximately four weeks of additional sales. The Company believes current inventories of its products held by wholesalers in the U.S. significantly exceed levels the Company considers desirable on a going-forward basis. The Company is in the process of developing a plan to reduce these wholesaler inventory levels. The Company expects this reduction in wholesaler inventories to lower levels will negatively impact its financial results in future periods. The Company will make further disclosure later in April 2002 about the plans it is developing to reduce wholesaler inventory levels and the Company's expectations with respect to the likely impact on its financial results.

In 2001, worldwide pharmaceutical sales, on a stand-alone basis, increased 6% (8% excluding foreign exchange), with U.S. pharmaceutical sales up 8% over the prior year. Key pharmaceutical products and their sales include the following:

Sales of PRAVACHOL*, a cholesterol-lowering agent and the Company's largest-selling product, increased 20% to $2,173 million. Domestic sales increased 21% to $1,366 million, while international sales increased 17% (22% excluding foreign exchange) to $807 million. In December 2001, the FDA approved an 80-milligram version of PRAVACHOL*.

GLUCOPHAGE franchise sales increased 42% to $2,682 million. GLUCOPHAGE IR, the leading branded oral medication for treatment of non-insulin-dependent (type 2) diabetes, saw sales increase 18% to $2,049 million. The Company expects sales of GLUCOPHAGE IR will decline significantly because generic metformin became available in the U.S. in January 2002. GLUCOVANCE, a new oral combination drug, and GLUCOPHAGE XR Extended Release tablets had sales of $330 million and $303 million, respectively, compared with introductory sales in 2000 of $110 million and $50 million, respectively.

Sales of PLAVIX, a platelet aggregation inhibitor, increased 50% to $1,350 million, driven in part by the positive results of the CURE study (Clopidogrel in Unstable angina to prevent Recurrent ischemic Events), which were published in the New England Journal of Medicine in August 2001. Sales of AVAPRO, an angiotensin II receptor blocker for the treatment of hypertension, increased 34% to $510 million. AVAPRO and PLAVIX are cardiovascular products that were launched from the alliance between Bristol-Myers Squibb and Sanofi-Synthelabo.

Sales of TAXOL*, the Company's leading anticancer agent, decreased 25% to $1,197 million. International sales increased 8% (15% excluding foreign exchange) to $652 million, led by strong sales in Japan and France. Domestic sales decreased 45% to $545 million due to generic competition.

Sales of PARAPLATIN*, which is used in combination therapy for the treatment of ovarian cancer, increased 2% to $702 million.

MONOPRIL*, a second-generation angiotensin converting enzyme (ACE) inhibitor, had increased sales of 4% reaching $458 million.

16

Sales of SERZONE*, a novel treatment for depression, increased 14% to $409 million.

Sales of BUSPAR*, an antianxiety agent, decreased 52% to $338 million due to generic competition.

Sales of TEQUIN*, a quinolone antibiotic, increased to $320 million from $131 million in 2000. In November 2001, the FDA approved TEQUIN* for short-course (five-day) regimen in treatment of acute bacterial exacerbation of chronic bronchitis.

Sales of VIDEX*, an antiretroviral agent, increased 28% to $259 million due to increased sales of VIDEX* EC enteric-coated beadlets, launched in 2000.

Sales from the Oncology Therapeutics Network, a specialty distributor of anticancer medicines and related products, increased 33% to $1,433 million.

Total infant formula sales increased 4% to $1,255 million. Worldwide sales of ENFAMIL*, the Company's largest-selling infant formula, increased 6% to $773 million.

Sales of ostomy products increased 5% (9% excluding foreign exchange) to $450 million, while sales of wound care products increased 9% (13% excluding foreign exchange) to $252 million.

Earnings

In 2001, earnings from continuing operations before income taxes increased 11% to $6,442 million from $5,826 million in 2000 on a stand-alone basis, which excludes the impact of the DuPont, ImClone and nonrecurring items described below. Net earnings, on this basis, increased 10% to $4,736 million compared with $4,309 million in 2000. Basic earnings per share increased 11% to $2.44 from $2.19 in the prior year, and diluted earnings per share increased 12% to $2.41 from $2.16. Net earnings margins increased to 24.8% in 2001 from 23.7% in 2000. In 2000, net earnings excluding the nonrecurring items described below were $4,309 million, a 14% increase over 1999. On this basis, basic earnings per share and diluted earnings per share increased 15% and 16%, respectively, over 1999, and net earnings margins increased to 23.7% in 2000 from 22.4% in 1999.

The Company recorded certain nonrecurring items (nonrecurring items) in 2001 and 2000 to earnings from continuing operations. The nonrecurring items included in 2001 were acquired in-process research and development charges of $2,744 million before taxes related to the DuPont and ImClone transactions, pretax expenses on the DuPont and ImClone transactions of $246 million (which includes the loss from operations, amortization and interest expenses and other onetime costs), a gain on sales of businesses (three branded pharmaceutical products—CORZIDE*, DELESTROGEN* and FLORINEF*; the licensing rights to CORGARD* in the U.S.; and its SOLAGE product line) of $315 million before taxes and restructuring and other charges of $781 million before taxes, related primarily to workforce reductions, contract sales force termination, exiting product lines and the downsizing and streamlining of business operations. In 2000, nonrecurring items include the gain on sales of businesses (three pharmaceutical products—ESTRACE CREAM*, OVCON 35* and OVCON 50*—and its SEA BREEZE* brand in Japan) of $160 million pretax, as well as restructuring charges of $508 million before taxes in connection with workforce reductions and asset write-downs related to the consolidation and closure of plants and facilities.

The effective income tax rate on earnings from continuing operations before income taxes was 15.4% in 2001 compared with 25.2% in 2000 and 26.5% in 1999. The decline in the effective income tax rate to 15.4% in 2001 is due to lower pretax income in the U.S. as a result of the write-off of acquired in-process research and development and other nonrecurring items. The effective income tax rate on earnings from continuing operations before income taxes, on a stand-alone basis, was 26.5% in 2001 compared with 26.0% in 2000, excluding nonrecurring items, and 26.5% in 1999. The effective income tax rate for 2001, on a stand-alone basis, increased as a result of lower production of TAXOL* and BUSPAR* in lower tax jurisdictions.

17

Expenses

Total costs and expenses, on a stand-alone basis excluding the impact of the DuPont and ImClone transactions and nonrecurring items, as a percentage of sales, improved over the last three years to 66.2% in 2001 compared with 68.0% in 2000 and 69.4% in 1999. Including DuPont, ImClone and nonrecurring items, continuing operations total cost and expenses, as a percentage of sales, were 84.6%.

Cost of products sold, as a percentage of sales, increased to 28.4% in 2001 from 26.1% in 2000 principally due to increased sales of lower-margin products from the Oncology Therapeutics Network and from a decline in higher-margin TAXOL* and BUSPAR* sales. Including DuPont, cost of products sold for continuing operations, as a percentage of sales, increased to 28.7%. In 2000, cost of products sold, as a percentage of sales, declined to 26.1% compared with 26.9% in 1999 principally due to manufacturing variances.

Advertising and promotion expenses decreased 14% from the prior year to $1,433 million in 2001 primarily due to lower spending on TAXOL* and BUSPAR*. In 2000, advertising and promotion expenses increased 8% from 1999 to $1,672 million. As a percentage of sales, 2001 advertising and promotion expenses decreased to 7.4%, while 2000 expenses remained at the 1999 level of 9.2%.

Marketing, selling and administrative expenses, as a percentage of sales, decreased to 20.1% in 2001 from 21.2% in 2000 and 22.4% in 1999. This decreasing trend is a result of continued improvement in cost-efficiencies. In 2001, the decline is also partially due to a reduction in sales force expenses.

The Company's investment in research and development, on a stand-alone basis, totaled $2,124 million in 2001, an increase of 10% over 2000, and as a percentage of sales, increased to 11.1% in 2001, compared with 10.6% in 2000 and 10.4% in 1999. This spending level reflects the Company's commitment to research over a broad range of therapeutic areas and to the clinical development of new products. In 2001, research and development spending dedicated to pharmaceutical products increased 11%, and was 13.5% of pharmaceutical sales compared with 13.0% and 12.6% in 2000 and 1999, respectively. Including DuPont and ImClone, research and development expenses increased 17% to $2,259 million, or 11.6% of sales.

As described in the notes to the financial statements, in 2001 the Company divested three pharmaceutical products—CORZIDE*, DELESTROGEN*, and FLORINEF*; the licensing rights to CORGARD* in the U.S.; ESTRACE* tablets; the Apothecon commodity business; and its SOLAGE product line. In 2000, the Company completed the sale of three pharmaceutical products—ESTRACE CREAM*, OVCON 35* AND OVCON 50*—as well as its SEA BREEZE* brand in Japan. In 1999, the Company completed the sale of Laboratori Guieu, SpA, an Italian-based gynecologic, pediatric and dermatologic products business. Also in 1999, the Company acquired CAL-C-TOSE*, a nutritional milk modifier product in Mexico.

Discontinued Operations

As described in Note 2 to the financial statements, in the fourth quarter 2001, the Company completed the sale of Clairol, which resulted in a pretax gain of $4.2 billion ($2.5 billion after taxes). The gain is included in the net gain on disposal of discontinued operations. Also in 2001, the Company spun off Zimmer Holdings, Inc., in a tax-free transaction, resulting in a common stock dividend of $203 million.

In 2000, the Company completed the sale of Matrix Essentials, Inc. (an affiliate of Clairol), resulting in a pretax gain of $402 million ($240 million after tax). The gain is included in the net gain on disposal of discontinued operations. Also in 2000, the Company recorded restructuring charges to discontinued operations of $34 million before taxes in connection with workforce reductions.

Net earnings from discontinued operations, which includes earnings only through the date of divestiture, decreased to $226 million in 2001 from $375 million in 2000 and $378 million in 1999.

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Geographic Areas

Bristol-Myers Squibb products are available in virtually every country in the world. The Company's largest markets are the U.S., France, Japan, Germany, Italy and Canada.

Sales in the U.S. increased 9% in 2001. Products with strong growth included GLUCOPHAGE, PLAVIX, PRAVACHOL*, TEQUIN* and AVAPRO. TAXOL* and BUSPAR* sales declined due to generic competition. In 2000, sales in the U.S. increased 14% primarily due to the growth of GLUCOPHAGE, PLAVIX, BUSPAR*, PARAPLATIN* and AVAPRO.

Sales in Europe, Mid-East and Africa increased 6% in 2001. Excluding foreign exchange, sales increased 10% as a result of the strong growth of PRAVACHOL* and TAXOL* in France and Italy. In 2000, sales in Europe, Mid-East and Africa decreased 9%. Sales increased 3% excluding foreign exchange as a result of the growth of PRAVACHOL*, TAXOL*, AVAPRO and PLAVIX in France, Italy and Spain. These increases were partially offset by a decrease in CAPOTEN sales due to generic competition.

Sales in Other Western Hemisphere countries decreased 2% in 2001. Excluding foreign exchange, sales in the region increased 3%. The unfavorable impact of foreign exchange was felt primarily in Brazil. Growth was driven primarily by increased sales in Mexico. In 2000, sales in Other Western Hemisphere countries increased 3% (6% excluding foreign exchange) primarily as a result of growth in Canada due to increased sales of AVAPRO and ENFAMIL* and in Mexico, due to the growth of ENFAMIL* and CAL-C-TOSE*.

Sales in the Pacific region decreased 1% in 2001 (an 11% increase excluding foreign exchange). The unfavorable impact of foreign exchange was felt primarily in Japan. Products with strong growth included TAXOL* and PARAPLATIN* in Japan and nutritional products in the Philippines, Thailand and China. In 2000, Pacific region sales increased 12% (11% excluding foreign exchange) as a result of increases in BUFFERIN*, TAXOL* and PARAPLATIN*.

Financial Instruments

The Company is exposed to market risk due to changes in currency exchange rates and interest rates. To reduce that risk, the Company enters into certain derivative financial instruments, when available on a cost-effective basis, to hedge its underlying economic exposure. These instruments also are managed on a consolidated basis to efficiently net exposures and thus take advantage of any natural offsets. Derivative financial instruments are not used for trading purposes. Gains and losses on hedging transactions are offset by gains and losses on the underlying exposures being hedged.

Foreign exchange option contracts and forward contracts are used to hedge anticipated transactions. The Company's primary foreign currency exposures in relation to the U.S. dollar are the Japanese yen, euro, Mexican peso and Canadian dollar.

The table below summarizes the Company's outstanding foreign exchange contracts as of December 31, 2001. The fair value of foreign exchange option contracts is estimated by using the Black-Scholes model and is based on year-end currency rates. The fair value of foreign exchange forward contracts is based on year-end forward currency rates. The fair value of option contracts and forward contracts should be viewed

19

in relation to the fair value of the underlying hedged transactions and the overall reduction in exposure to adverse fluctuations in foreign currency exchange rates.

Dollars in Millions, Except Per Share Amounts			Weighted Average Strike Price	Notional Amount		Fair Value			Maturity
Foreign Exchange Forwards:
	Euro		0.90	$	348	$	3		2002/2003
	Mexican Peso		9.92		219		(8	)	2002
	Japanese Yen		119.32		125		(3	)	2002
	British Pound		1.52		58		—		2002/2003
	Taiwan Dollar		33.55		58		2		2002
	Thai Baht		45.91		32		—		2002
	Brazilian Real		2.59		29		3		2002
	Hong Kong Dollar		7.81		23		—		2002
	Argentine Peso		1.29		10		2		2002
		Total Forwards		$	902	$	(1	)
Foreign Exchange Options:
	Japanese Yen		125.98	$	318	$	18		2002/2003
	Canadian Dollar		1.54		117		4		2002
	Australian Dollar		0.52		50		2		2002
		Total Options		$	485	$	24
		Total Contracts		$	1,387	$	23

At December 31, 2000, the Company held right-to-sell option contracts with an aggregate notional amount and fair value of $1,319 million and $73 million, respectively. These contracts primarily related to option contracts with the right to sell euros, Mexican pesos and Brazilian reals. Other contracts at December 31, 2000, primarily included option contracts with the right to buy Japanese yen for U.S. dollars, which had an aggregate notional amount and fair value of $76 million and $1 million.

The Company maintains cash and cash equivalents, time deposits and marketable securities with various financial institutions. These financial institutions are located primarily in the U.S. and Europe. Company policy is designed to limit exposure to any one financial institution.

Recently Issued Accounting Standards

In August 2001, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, effective for fiscal years beginning after December 15, 2001. SFAS No. 144 addresses accounting models for use in determining the impairment of long-lived assets and the appropriate methodology for recording an impairment loss. The initial adoption of this accounting requirement will not have a material effect on the Company's consolidated financial statements.

In June 2001, the FASB issued SFAS No. 142, Goodwill and Other Intangible Assets, effective for fiscal years beginning after December 15, 2001. SFAS No. 142 addresses the initial recognition and measurement of intangible assets acquired outside a business combination and the recognition and measurement of goodwill and other intangible assets subsequent to their acquisition. Under the new rules, goodwill and indefinite-lived intangible assets will no longer be amortized but will be subject to annual impairment tests. Other intangible assets will continue to be amortized over their useful lives. Application of the nonamortization provisions will not have a material effect on the Company's financial statements.

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Goodwill associated with the DuPont and ImClone transactions and all future business combinations will not be amortized, but will instead be reviewed for impairment at least annually. The Company will adopt the new rules on accounting for goodwill and other intangible assets as of January 1, 2002.

Critical Accounting Policies

The critical accounting policies of the Company are described in Note 1 to the financial statements. The policies on investments, goodwill, and acquired in-process research and development are considered noteworthy because they involve estimates, judgments or significant transactions.

Financial Position

Cash and cash equivalents, time deposits and marketable securities totaled $5.7 billion at December 31, 2001, compared with $3.4 billion at December 31, 2000. Working capital was $3.5 billion at December 31, 2001, compared with $4.2 billion at December 31, 2000, resulting from higher accrued liabilities due to the restructuring reserves established in the current year. Cash and cash equivalents, time deposits, marketable securities and the conversion of other working-capital items are expected to fund the near-term operations of the Company.

Cash and cash equivalents, time deposits and marketable securities at December 31, 2001, were denominated primarily in U.S. dollar instruments with near-term maturities. The average interest yield on cash and cash equivalents was 2.0% at December 31, 2001, while interest yields on time deposits and marketable securities averaged 1.7%.

Short-term borrowings and long-term debt at December 31, 2001, are denominated primarily in U.S. dollars but also include Japanese yen long-term debt of $217 million.

Internally generated cash provided from operations was $5.4 billion in 2001, $4.7 billion in 2000 and $4.2 billion in 1999. Cash provided from operations continued to be the Company's primary source of funds to finance operating needs and expenditures for new plants and equipment. As part of the Company's ongoing commitment to improve plant efficiency and maintain superior research facilities, the Company has invested $2.3 billion in capital expansion over the past three years. Cash flow from operations also included product liability payments and pension contributions.

Cash provided from operations also was used over the past three years to pay dividends of $5.8 billion, to finance $5.3 billion of the Company's share repurchase program and to fund business acquisitions, including the purchase of patents and trademarks at a cost of $595 million. The Company's share repurchase program authorizes the Company to purchase common stock from time to time in the open market or through private transactions as market conditions permit.

During 2001, the Company purchased 27 million shares of common stock at a cost of $1.6 billion, bringing the total shares acquired since the program's inception to 367 million shares. During the past three years, the Company has repurchased 89 million shares at a cost of $5.3 billion.

Employment levels of 46,000 at December 2001 increased from prior-year levels of 44,000 as a result of the DuPont acquisition.

Forward Looking Information

This annual report on Form 10K (including documents incorporated by reference) and other written and oral statements the Company makes from time to time contain certain "forward-looking" statements within the meaning of the Section 27A of the Securities Act of 1933 and Section 21E of the Securities and Exchange Act of 1934. You can identify these forward-looking statements by the fact they use words such as "should", "anticipate", "estimate", "may", "will", "project", "intend", "plan", "believe" and other words of similar meaning and expression in connection with any discussion of future operating or financial

21

performance. One can also identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements are likely to relate to, among other things, our goals, plans and projections regarding our financial position, results of operations, market position and product development, which are based on current expectations that involve inherent risks and uncertainties, including factors that could delay, divert or change any of them in the next several years.

Although it is not possible to predict or identify all factors, they may including the following:

•

New government laws and regulations, such as (i) health care reform initiatives in the United States at the state and federal level and in other countries; (ii) changes in the FDA and foreign regulatory approval processes that may cause delays in approving, or preventing the approval of, new products; (iii) tax changes such as the phasing out of tax benefits heretofore available in the United States and certain foreign countries; and (iv) new laws, regulations and judicial decisions affecting pricing or marketing.



•

Competitive factors, such as (i) new products developed by competitors that have lower prices or superior performance features or that are otherwise competitive with Bristol-Myers Squibb's current products; (ii) generic competition as Bristol-Myers Squibb products mature and patents expire on products; (iii) technological advances and patents attained by competitors; and (iv) problems with licensors, suppliers and distributors; and business combinations among the Company's competitors or major customers.



•

Difficulties and delays inherent in product development, manufacturing and sale, such as (i) products that may appear promising in development may fail to reach market for numerous reasons, including efficacy or safety concerns, the inability to obtain necessary regulatory approvals and the difficulty or excessive cost to manufacture; (ii) seizure or recall of products; (iii) the failure to obtain, the imposition of limitations on the use of, or loss of patent and other intellectual property rights; (iv) failure to comply with Current Good Manufacturing Practices and other application regulations and quality assurance guidelines that could lead to temporary manufacturing shutdowns, product shortages and delays in product manufacturing; and (v) other manufacturing or distribution problems.



•

Legal difficulties, any of which can preclude or delay commercialization of products or adversely affect profitability, including (i) intellectual property disputes; (ii) adverse decisions in litigation, including product liability and commercial cases; (iii) the inability to obtain adequate insurance with respect to this type of liability; (iv) recalls of pharmaceutical products or forced closings of manufacturing plants; (v) government investigations; (vi) claims asserting violations of securities, antitrust and other laws; and (vii) environmental matters.



•

Increasing pricing pressures worldwide, including rules and practices of managed care groups and institutional and governmental purchasers, judicial decisions and governmental laws and regulations related to Medicare, Medicaid and healthcare reform, pharmaceutical reimbursement and pricing in general.



•

Fluctuations in buying patterns of major distributors, retail chains and other trade buyers which may result from seasonality, pricing, wholesaler buying decisions or other factors.



•

Greater than expected costs and other difficulties related to the integration of DuPont Pharmaceuticals and unanticipated effects and difficulties of other acquisitions, dispositions and other events, including obtaining regulatory approvals occurring in connection with evolving business strategies.



•

Changes to advertising and promotional spending and other categories of spending that may affect sales.

22

•

Changes in the Company's structure resulting from acquisitions, divestitures, mergers, restructurings or other strategic initiatives.



•

Economic factors over which Bristol-Myers Squibb has no control such as changes of business and economic conditions including, but not limited to, changes in interest rates and fluctuation of foreign currency exchange rates.



•

Changes in business, political and economic conditions due to the recent terrorist attacks in the U.S., the threat of future terrorist activity in the U.S. and other parts of the world and related U.S. military action overseas.



•

Changes in accounting standards promulgated by the Financial Accounting Standards Board, the Securities and Exchange Commission or the American Institute of Certified Public Accountants, which may require adjustments to financial statements.

No assurance can be given that any goal or plan set forth in forward-looking statements can be achieved and readers are cautioned not to place undue reliance on such statements, which speak only as of the date made. Bristol-Myers Squibb undertakes no obligation to release publicly any revisions to forward-looking statement as a result of future events or developments.

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Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

BRISTOL-MYERS SQUIBB COMPANY

CONSOLIDATED STATEMENT OF EARNINGS

(in millions, except per share amounts)

	Year Ended December 31,
EARNINGS
	2001			2000			1999
Net Sales	$	19,423		$	18,216		$	16,878
Expenses:
Cost of products sold		5,575			4,759			4,542
Marketing, selling and administrative		3,903			3,860			3,789
Advertising and product promotion		1,433			1,672			1,549
Research and development		2,259			1,939			1,759
Acquired in-process research and development		2,744			—			—
Provision for restructuring and nonrecurring items		781			508			—
Gain on sales of businesses		(392	)		(160	)		—
Other		134			160			81
		16,437			12,738			11,720
Earnings from Continuing Operations Before Income Taxes		2,986			5,478			5,158
Provision for income taxes		459			1,382			1,369
Earnings from Continuing Operations		2,527			4,096			3,789
Discontinued Operations
Net earnings		226			375			378
Net gain on disposal		2,492			240			—
		2,718			615			378
Net Earnings	$	5,245		$	4,711		$	4,167
Earnings Per Common Share
Basic
Earnings from Continuing Operations	$	1.30		$	2.08		$	1.91
Discontinued Operations
Net earnings		.12			.19			.19
Net gain on disposal		1.28			.13			—
		1.40			.32			.19
Net Earnings	$	2.70		$	2.40		$	2.10
Diluted
Earnings from Continuing Operations	$	1.29		$	2.05		$	1.87
Discontinued Operations
Net earnings		.11			.19			.19
Net gain on disposal		1.27			.12			—
		1.38			.31			.19
Net Earnings	$	2.67		$	2.36		$	2.06
Average Common Shares Outstanding
Basic		1,940			1,965			1,984
Diluted		1,965			1,997			2,027
Dividends Per Common Share	$	1.10		$	.98		$	.86

The accompanying notes are an integral part of these financial statements.

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BRISTOL-MYERS SQUIBB COMPANY

CONSOLIDATED STATEMENT OF

COMPREHENSIVE INCOME AND RETAINED EARNINGS

(in millions, except per share amounts)

	Year Ended December 31,
	2001			2000			1999
COMPREHENSIVE INCOME (LOSS)
Net Earnings	$	5,245		$	4,711		$	4,167
Other Comprehensive Income:
Foreign currency translation, net of taxes of $(25) in 2001, $(5) in 2000, and $18 in 1999		48			(287	)		(194	)
Deferred losses on derivatives qualifying as hedges, net of taxes of $(37) in 2001		(62	)		—			—
Total Other Comprehensive Income		(14	)		(287	)		(194	)
Comprehensive Income	$	5,231		$	4,424		$	3,973
RETAINED EARNINGS
Retained Earnings, January 1	$	17,781		$	15,000		$	12,540
Net earnings		5,245			4,711			4,167
		23,026			19,711			16,707
Cash dividends		(2,137	)		(1,930	)		(1,707	)
Zimmer Common Stock dividend		(203	)		—			—
Retained Earnings, December 31	$	20,686		$	17,781		$	15,000

The accompanying notes are an integral part of these financial statements.

25

BRISTOL-MYERS SQUIBB COMPANY

CONSOLIDATED BALANCE SHEET

ASSETS

(dollars in millions)

	December 31,
ASSETS	2001		2000
Current Assets:
Cash and cash equivalents	$	5,500	$	3,182
Time deposits and marketable securities		154		203
Receivables, net of allowances		3,949		3,662
Inventories		1,487		1,831
Prepaid expenses		1,259		946
Total Current Assets		12,349		9,824
Property, Plant and Equipment, net		4,879		4,548
Goodwill		5,200		1,436
Intangible Assets, net		2,247		384
Other Assets		2,382		1,386
Total Assets	$	27,057	$	17,578

The accompanying notes are an integral part of these financial statements.

26

BRISTOL-MYERS SQUIBB COMPANY

CONSOLIDATED BALANCE SHEET

LIABILITIES AND STOCKHOLDERS' EQUITY

(dollars in millions)

			December 31,
			2001			2000
LIABILITIES
Current Liabilities:
	Short-term borrowings		$	174		$	162
	Accounts payable			1,587			1,702
	Accrued expenses			4,207			3,067
	U.S. and foreign income taxes payable			2,858			701
		Total Current Liabilities		8,826			5,632
Other Liabilities				1,258			1,430
Long-Term Debt				6,237			1,336
		Total Liabilities		16,321			8,398
STOCKHOLDERS' EQUITY
	Preferred stock, $2 convertible series: Authorized 10 million shares; issued and outstanding 8,914 in 2001 and 9,864 in 2000, liquidation value of $50 per share			—			—
	Common stock, par value of $.10 per share: Authorized 4.5 billion shares; issued 2,200,010,476 issued in 2001 and 2,197,900,835 in 2000			220			220
	Capital in excess of par value of stock			2,336			2,002
	Other accumulated comprehensive income (loss)			(1,117	)		(1,103	)
	Retained earnings			20,686			17,781
				22,125			18,900
Less cost of treasury stock—264,389,570 common shares in 2001 and 244,365,726 in 2000				11,389			9,720
		Total Stockholders' Equity		10,736			9,180
	Total Liabilities and Stockholders' Equity		$	27,057		$	17,578

The accompanying notes are an integral part of these financial statements.

27

BRISTOL-MYERS SQUIBB COMPANY

CONSOLIDATED STATEMENT OF CASH FLOWS

(dollars in millions)

	Year Ended December 31,
	2001			2000			1999
Cash Flows From Operating Activities:
Net earnings	$	5,245		$	4,711		$	4,167
Depreciation		481			461			438
Amortization		300			285			240
Acquired in-process research and development		2,744			—			—
Provision for restructuring and nonrecurring items		781			542			—
Gain on sales of businesses		(4,544	)		(562	)		—
Other operating items		20			10			(79	)
Receivables		(359	)		(494	)		(176	)
Inventories		(10	)		75			(317	)
Accounts payable and accrued expenses		(170	)		256			258
Income taxes		1,015			(54	)		477
Product liability		(176	)		(173	)		(726	)
Insurance recoverable		174			100			59
Pension contribution		(215	)		(230	)		—
Other assets and liabilities		116			(275	)		(117	)
Net Cash Provided by Operating Activities		5,402			4,652			4,224
Cash Flows From Investing Activities:
Proceeds from sales of time deposits and marketable securities		1,412			45			51
Purchases of time deposits and marketable securities		(1,375	)		(10	)		(4	)
Additions to fixed assets		(1,023	)		(589	)		(709	)
Proceeds from sales of businesses		537			848			134
Proceeds from sale of Clairol		4,965			—			—
Acquisition of DuPont		(7,774	)		—			—
Investment in ImClone		(1,207	)		—			—
Businesses acquisitions (including purchase of trademarks/patents)		(133	)		(196	)		(266	)
Other, net		(266	)		(82	)		35
Net Cash (Used in) Provided by Investing Activities		(4,864	)		16			(759	)
Cash Flows From Financing Activities:
Short-term borrowings		392			(247	)		(26	)
Long-term debt borrowings		4,854			17			2
Long-term debt repayments		(3	)		(11	)		(56	)
Issuances of common stock under stock plans		251			352			254
Purchases of treasury stock		(1,589	)		(2,338	)		(1,419	)
Dividends paid		(2,137	)		(1,930	)		(1,707	)
Net Cash Provided by (Used in) Financing Activities		1,768			(4,157	)		(2,952	)
Effect of Exchange Rates on Cash		12			(49	)		(37	)
Increase in Cash and Cash Equivalents		2,318			462			476
Cash and Cash Equivalents at Beginning of Year		3,182			2,720			2,244
Cash and Cash Equivalents at End of Year	$	5,500		$	3,182		$	2,720

The accompanying notes are an integral part of these financial statements.

28

BRISTOL-MYERS SQUIBB COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in millions)

Note 1    ACCOUNTING POLICIES

Basis of Consolidation—The consolidated financial statements include the accounts of Bristol-Myers Squibb Company and all of its subsidiaries.

Cash and Cash Equivalents—Cash and cash equivalents primarily include securities with maturities of three months or less at the time of purchase, recorded at cost, which approximates market value.

Time Deposits and Marketable Securities—Time deposits and marketable securities are available for sale and are recorded at fair value, which approximates cost.

Inventory Valuation—Inventories are generally stated at average cost, not in excess of market.

Capital Assets and Depreciation—Expenditures for additions, renewals and betterments are capitalized at cost. Depreciation is generally computed by the straight-line method based on the estimated useful lives of the related assets. The estimated useful lives of the major classes of depreciable assets are 50 years for buildings and 3 to 40 years for machinery, equipment and fixtures. The Company periodically evaluates whether current events or circumstances indicate that the carrying value of its depreciable assets may not be recoverable. An estimate of undiscounted future cash flows produced by the asset, or the appropriate group of assets, is compared with the carrying value to determine whether impairment exists.

Investments—The Company consolidates all majority (more than 50 percent) owned subsidiaries. The Company accounts for 50 percent or less owned companies over which it has the ability to exercise significant influence using the equity method of accounting. The Company's share of net income or losses of investments is included in the consolidated statement of earnings. The Company periodically reviews these investments for impairment and adjusts these investments to their fair value when a decline in market value is deemed to be other than temporary.

Acquisitions—The Company adopted Statement of Financial Accounting Standards (SFAS) No. 141, Business Combinations. This statement requires that companies use the purchase method of accounting for all business combinations initiated and/or consummated after June 30, 2001.

Goodwill—In June 2001, the Financial Accounting Standards Board (FASB) issued SFAS No. 142, Goodwill and Other Intangible Assets, effective for fiscal years beginning after December 15, 2001. SFAS No. 142 addresses the initial recognition and measurement of intangible assets acquired outside a business combination and the recognition and measurement of goodwill and other intangible assets subsequent to their acquisition. Under the new rules, goodwill will no longer be amortized but will be subject to annual impairment tests. In connection with this accounting change, the goodwill resulting from the Company's DuPont Pharmaceuticals acquisition and ImClone investment will not be amortized.

The goodwill arising from business acquisitions, prior to June 30, 2001, is amortized on a straight-line basis over periods ranging from 15 to 40 years. This goodwill will not be amortized after December 31, 2001. Application of the nonamortization provisions will not have a material effect on the Company's financial statements.

Intangible Assets—Intangible assets consist of patents, technology and licenses and are amortized on a straight-line basis over periods ranging from 3 to 17 years. Accumulated amortization on intangible assets was $631 million in 2001 and $495 million in 2000.

Intangible assets are periodically reviewed for impairment based on an assessment of future operations (including cash flows).

29

Acquired In-Process Research and Development—The fair value of acquired in-process research and development is determined by independent appraisal and based on the present value of each research project's projected cash flows, utilizing an income approach. Future cash flows are predominately based on the net income forecast of each project consistent with historical pricing, margins and expense levels of similar products. Revenues are estimated based on relevant market size and growth factors, expected industry trends, individual project life cycles and the life of each research project's underlying patent. In determining the fair value of each research project, expected revenues are first adjusted for technical risk of completion. The resulting cash flows are then discounted at a rate approximating the Company's weighted average cost of capital, 13% in 2001.

Product Liability—Accruals for product liability are recorded, on an undiscounted basis, when it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated, based on existing information. These accruals are adjusted periodically as assessment efforts progress or as additional information becomes available.

Receivables for related insurance or other third-party recoveries for product liabilities are recorded, on an undiscounted basis, when it is probable that a recovery will be realized. Insurance recoverable recorded on the balance sheet has, in general, payment terms of two years or less.

Derivative Financial Instruments—Derivative financial instruments are used by the Company principally in the management of its interest rate and foreign currency exposures. The Company does not hold or issue derivative financial instruments for trading purposes.

The Company records all derivative instruments on the balance sheet at fair value. Changes in a derivative's fair value are recognized in earnings unless specific hedge criteria are met. If the derivative is designated as a fair value hedge, the changes in the fair value of the derivative and of the hedged item attributable to the hedged risk are recognized as a charge or credit to earnings. If the derivative is designated as a cash flow hedge, the effective portions of changes in the fair value of the derivative are recorded in other comprehensive income (loss) and are recognized in the consolidated statement of earnings when the hedged item affects earnings. Ineffective portions of changes in the fair value of cash flow hedges are recognized as a charge or credit to earnings.

The Company designates and assigns derivatives as hedges of forecasted transactions, specific assets or specific liabilities. When hedged assets or liabilities are sold or extinguished or the forecasted transactions being hedged are no longer expected to occur, the Company recognizes the gain or loss on the designated hedging financial instruments.

Revenue Recognition—Revenue from product sales is recognized upon shipment to customers.

Earnings Per Share—Basic earnings per common share are computed using the weighted average number of shares outstanding during the year. Diluted earnings per common share are computed using the weighted average number of shares outstanding during the year plus the incremental shares outstanding assuming the exercise of dilutive stock options.

Note 2    DISCONTINUED OPERATIONS

In 2000, the Company announced the planned divestitures of its Clairol and Zimmer businesses. Accordingly, the operations of Clairol (which includes its Matrix Essentials, Inc. [Matrix] affiliate) and

30

Zimmer have been reflected as discontinued operations in the accompanying consolidated statement of earnings.

On November 15, 2001, the Company completed the sale of Clairol to Procter & Gamble for cash proceeds of approximately $5.0 billion. The sale resulted in a pretax gain of $4.2 billion ($2.5 billion after taxes), which is included in the gain on disposal of discontinued operations.

On August 6, 2001, the Company spun off Zimmer Holdings, Inc., in a tax-free distribution, resulting in a common stock dividend of $203 million.

In 2000, the Company completed the sale of Matrix to Cosmair, Inc., a wholly owned U.S. subsidiary of L'Oreal S.A., resulting in a pretax gain of $402 million ($240 million after taxes). The gain is included in the gain on disposal of discontinued operations.

The net sales and earnings of discontinued operations are as follows:

	Year Ended December 31,
	2001		2000		1999
Net sales	$	2,294	$	3,115	$	3,344
Earnings before income taxes (1)		451		606		609
Income taxes		225		231		231
Net earnings from discontinued operations	$	226	$	375	$	378

(1)

Earnings before income taxes for the year ended December 31, 2000, include restructuring charges of $34 million.

The consolidated balance sheet and consolidated statement of cash flows include the Clairol and Zimmer businesses through date of disposition. The net assets of discontinued operations at December 31, 2000, were $924 million, consisting of current assets of $866 million and long-term assets of $616 million less liabilities (principally current) of $558 million.

The Company uses a centralized approach to the cash management and financing of its operations and accordingly, the Company did not allocate debt to these businesses.

Cash flows from operating and investing activities of discontinued operations for the years ended December 31, 2001, 2000 and 1999 were $5.3 billion (including approximately $5.0 billion of proceeds from the sale of Clairol), $998 million (including $438 million of proceeds from the sale of Matrix) and $261 million, respectively.

31

Note 3    ACQUISITIONS AND DIVESTITURES

DuPont Pharmaceuticals Acquisition

On October 1, 2001, the Company acquired the DuPont Pharmaceuticals business (DuPont) from E. I. duPont de Nemours and Company for cash of $7.8 billion. The results of DuPont have been included in the consolidated financial statements from the date of acquisition. DuPont is primarily a domestic pharmaceutical and imagery product business focused on research and development. This acquisition was financed with proceeds from the issuance of $1.5 billion of commercial paper, issuance of $5.0 billion of medium-term notes and internal cash flows.

The purchase price allocation has been prepared on a preliminary basis, and reasonable changes are expected as additional information becomes available. Following is a summary of the estimated fair values of the assets acquired and liabilities assumed as of the date of the acquisition:

Current assets	$	520
Property, plant and equipment		321
Intangible assets		1,976
Acquired in-process research and development		2,009
Goodwill		3,884
Other assets		280
Total assets acquired		8,990
Current liabilities		353
Restructuring costs		640
Acquisition costs		100
Long term liabilities		123
Total liabilities assumed		1,216
Purchase Price	$	7,774

The total intangible assets of $1,976 million will be amortized over their weighted-average useful lives and include core and developed technology of $1,783 million (15 and 11 years weighted-average useful life, respectively) and patents of $193 million (11 year weighted-average useful life).

The goodwill of $3,884 million was assigned to the pharmaceuticals reporting unit. Of that total amount, $2,418 million is expected to be deductible for tax purposes over a 15 year period.

The preliminary value of $2,009 million assigned to acquired in-process research and development was charged to earnings in the fourth quarter of 2001. The charge was associated with five research projects in the Cardiovascular, Central Nervous System, Oncology, and Anti-Infective therapeutic areas ranging from the preclinical to the phase II development stage. The amount was determined by identifying research projects for which technological feasibility has not been established and for which there is no alternative future use. The projected FDA approval dates are years 2005 through 2008, at which time the Company expects these projects to begin to generate cash flows. The cost to complete these research projects is estimated at $1.2 billion. All of the research and development projects considered in the valuation are subject to the normal risks and uncertainties associated with demonstrating the safety and efficacy required to obtain FDA approval.

32

In connection with the acquisition, the Company incurred $640 million of restructuring costs as a result of severance and relocation of workforce, the elimination of duplicate facilities and contract terminations. Such costs have been recognized by the Company as a liability assumed as of the acquisition date, resulting in additional goodwill.

These restructuring costs consisted of $350 million of employee termination benefits for approximately 1,800 employees, $110 million related to the closure of facilities and $180 million for contract terminations. The $640 million originally recorded in accrued expenses was reduced to $523 million at December 31, 2001.

The Company also incurred $61 million for purchase accounting adjustments and other costs in connection with the acquisition, which were expensed in the fourth quarter 2001.

The following unaudited pro forma financial information presents results as if the acquisition had occurred at the beginning of the respective periods:

	Year Ended December 31,
	2001		2000
Net Sales	$	20,348	$	19,675
Net Income		4,262		3,688
Earnings Per Share—Basic		2.20		1.88
Earnings Per Share—Diluted	$	2.17	$	1.85

These pro forma results have been prepared for comparative purposes only and include certain adjustments such as additional amortization expense as a result of identifiable intangible assets arising from the acquisition and from increased interest expense on acquisition debt. The pro forma results are not necessarily indicative either of the results of operations that actually would have resulted had the acquisition been in effect at the beginning of the respective periods or of future results.

Other

In 2001, the Company completed the sale of three pharmaceutical products—CORZIDE*, DELESTROGEN* and FLORINEF*; the licensing rights to CORGARD* in the U.S.; ESTRACE* tablets; the Apothecon commodity business; and its SOLAGE product line, all of which resulted in a pretax gain of $392 million.

In 2000, the Company completed the sale of three pharmaceutical products—ESTRACE CREAM*, OVCON 35* and OVCON 50*—as well as its SEA BREEZE* brand in Japan resulting in a pretax gain of $160 million, recorded in continuing operations.

In June 1999, the Company acquired CAL-C-TOSE*, a nutritional milk modifier. In September 1999, the Company entered into a development and commercialization agreement for ARIPIPRAZOLE, a novel drug under study in phase III trials as a treatment for schizophrenia, with Otsuka Pharmaceutical Co., Ltd. In December 1999, the Company completed the sale of Laboratori Guieu, a gynecologic, pediatric and dermatologic products business headquartered in Milan, Italy. The gain on the sale was not material.

33

Note 4    RESTRUCTURING

During 2001, the Company recorded pretax charges of $739 million for continuing operations. These charges were primarily for restructuring activities related to workforce reductions, contract sales force termination, exiting product lines and the downsizing and streamlining of business operations and consisted of $272 million of employee termination benefits for approximately 3,900 employees, $128 million of asset write-downs related to the closure of manufacturing and research facilities, $95 million of contract sales force termination, $150 million of costs to exit certain product lines and $94 million of other expenses. The $739 million of charges were reported on the balance sheet as a reduction of current assets ($150 million) and property, plant and equipment ($128 million) and an increase in accrued expenses ($461 million). The $461 million liability originally recorded in accrued expenses was reduced to $308 million at December 31, 2001. The Company expects to substantially complete these restructuring activities by the end of 2002. Also during 2001, the Company recorded a pretax charge of $42 million for settlement of litigation over promotional claims brought by a distributor of store-brand infant formula against Mead Johnson.

In 2000, the Company recorded pretax charges of $508 million for continuing operations. These restructuring charges consisted primarily of workforce reductions and the downsizing and streamlining of operations in certain international markets and the ConvaTec business, as well as reorganization of the Company's Global Business Services. At December 31, 2001, these actions were substantially complete and the remaining liability was $40 million.

34

Note 5    EARNINGS PER SHARE

The computations for basic earnings per common share and diluted earnings per common share are as follows:

		Year Ended December 31,
		2001		2000		1999
Net Earnings from Continuing Operations		$	2,527	$	4,096	$	3,789
Discontinued Operations
	Net Earnings		226		375		378
	Net Gain on Disposal		2,492		240		—
			2,718		615		378
	Net Earnings	$	5,245	$	4,711	$	4,167
Basic:
Average Common Shares Outstanding			1,940		1,965		1,984
Earnings from Continuing Operations		$	1.30	$	2.08	$	1.91
Discontinued Operations
	Net Earnings		.12		.19		.19
	Net Gain on Disposal		1.28		.13		—
			1.40		.32		.19
	Net Earnings	$	2.70	$	2.40	$	2.10
Diluted:
Average Common Shares Outstanding			1,940		1,965		1,984
Incremental Shares Outstanding Assuming the Exercise of Dilutive Stock Options			25		32		43
			1,965		1,997		2,027
Earnings from Continuing Operations		$	1.29	$	2.05	$	1.87
Discontinued Operations
	Net Earnings		.11		.19		.19
	Net Gain on Disposal		1.27		.12		—
			1.38		.31		.19
Net Earnings		$	2.67	$	2.36	$	2.06

Weighted-average shares issuable upon the exercise of stock options, which were not included in the diluted earnings per share calculation because they were antidilutive, were 43 million in 2001, 3 million in 2000 and 1 million in 1999.

35

Note 6    OTHER INCOME AND EXPENSES

	Year Ended December 31,
	2001			2000			1999
Interest income	$	133		$	157		$	107
Interest expense		(182	)		(108	)		(130	)
Other—net		(85	)		(209	)		(58	)
	$	(134	)	$	(160	)	$	(81	)

Cash payments for interest were $100 million, $112 million and $119 million in 2001, 2000 and 1999, respectively.

Note 7    ALLIANCES AND INVESTMENTS

In November 2001, the Company purchased 14.4 million shares of ImClone Systems, Inc. (ImClone), for $70 per share, or $1,007 million, which represented approximately 19.9% of the ImClone shares outstanding just prior to the commencement of the public tender offer. This transaction is being accounted for using the equity method of accounting. The completion of the public tender offer is part of a strategic agreement between the Company and ImClone that also includes an arrangement to codevelop and copromote an investigational cancer drug, Erbitux, for a series of payments totaling $1 billion of which $200 million was paid in 2001.

On March 5, 2002, the agreement with ImClone was revised to reduce the total payments to $900 million from $1 billion. Under the new agreement the Company paid ImClone $140 million in the first quarter of 2002 and will pay ImClone $60 million in March 2003 and an aggregate of $500 million upon the achievement of two milestones. Also under the agreement, the Company will pay ImClone a distribution fee based on a flat rate of 39% of product revenues in North America.

In the fourth quarter of 2001, these transactions resulted in a pretax charge of approximately $735 million, comprised of $575 million for the write-off of acquired in-process research and development related to the equity investment and $160 million for the write-off of milestone payments. The $140 million paid upon signing the revised agreement will be expensed to in-process research and development in the first quarter of 2002. The acquired in-process research and development charge related to three oncology research projects in the Phase I or later stage of development with one research project, Erbitux, in late Phase III development. The amount was determined by identifying research projects in areas for which technological feasibility has not been established and for which there is no alternative future use. The projected U.S. Food and Drug Administration (FDA) approval dates used were years 2002 through 2008, at which time the Company expects these projects to begin to generate cash flows. The cost to complete these projects is estimated at $323 million. All of the research and development projects considered in the valuation are subject to the normal risks and uncertainties associated with demonstrating the safety and efficacy required to obtain FDA approval. The purchase price allocation resulted in $66 million of patent and technology intangible assets that will be amortized over their weighted-average useful lives of 17 years and approximately $375 million of goodwill, which is not amortized.

On December 28, 2001, ImClone announced that the FDA refused to accept for filing the Biologics License Application (BLA) that had been submitted by ImClone for Erbitux. The BLA had been

36

submitted to gain marketing approval to treat irinotecan-refractory colorectal carcinoma. The Company and ImClone met with the FDA in February 2002 and are currently evaluating next steps.

On January 18, 2002, the Subcommittee on Oversight and Investigations of the House Energy and Commerce Committee announced it is investigating questions about the conduct of ImClone in the development of Erbitux. On January 25, 2002, ImClone announced it had received an informal inquiry from the Securities and Exchange Commission as well as inquiries from the Justice Department and the aforementioned subcommittee. The Company will cooperate with these investigations.

Of the $1,207 million paid for the equity investment ($1,007 million) and the milestone payment ($200 million), $735 million was expensed as acquired in-process research and development and the remaining $472 million was recorded as an equity investment. An additional $9 million was recorded to the investment primarily for acquisition costs, resulting in a carrying value of $481 million at December 31, 2001. On a per-share basis, the carrying value of the Company's ImClone investment and the closing market value of ImClone shares as of December 31, 2001, were $33.40 and $46.46, respectively. Given the FDA's December 28, 2001, action and the market value of ImClone shares since December 31, 2001 ($19.58 per share as of January 24, 2002), it is possible that the Company could recognize a charge for impairment of the investment in ImClone in future periods based upon further evaluation of the status of Erbitux and the market value of ImClone.

In 1997, the Company and Sanofi-Synthelabo (Sanofi) entered into a codevelopment, comarketing agreement for two products: AVAPRO (irbesartan), an angiotensin II receptor antagonist indicated for the treatment of hypertension, and PLAVIX (clopidogrel), a platelet inhibitor. The worldwide alliance operates under the framework of two geographic territories: one in the Americas and Australia and the other in Europe and Asia. Two territory partnerships were formed to manage central expenses, such as marketing, research and development, royalties, and to supply finished product to the individual countries. At the country level, agreements to either copromote (whereby a partnership is formed between the parties to sell each brand) or to comarket (whereby the parties operate and sell their brands independently of each other) are in place.

The Company acts as the operating partner for the territories covering the Americas principally the U.S., Canada, Puerto Rico, and Latin America countries, and Australia and owns the majority controlling interest in the territory. As such, the Company consolidates all country partnership results and records Sanofi's share of the results as a minority interest expense, included in other income/expense. The Company recorded sales in this territory and in comarketing countries of $1,859 million, $1,284 million and $802 million for 2001, 2000 and 1999, respectively.

Sanofi acts as the operating partner of the territories covering Europe and Asia. The Company accounts for the investment in partnership entities in these territories as an equity investment and records its share of results in other income/expense. Income before taxes from these partnership entities for the years ended December 31, 2001, 2000 and 1999 was $82 million, $57 million and $14 million, respectively.

37

Note 8    PROVISION FOR INCOME TAXES

The components of earnings from continuing operations before income taxes were:

	December 31,
	2001			2000		1999
U.S.	$	(31	)	$	2,705	$	3,339
Non-U.S.		3,017			2,773		1,819
	$	2,986		$	5,478	$	5,158

The above amounts are categorized based on the location of the taxing authorities.

The provision for income taxes attributable to continuing operations consisted of:

		Year Ended December 31,
		2001			2000			1999
Current:
	U.S.	$	1,104		$	900		$	602
	Non-U.S.		522			447			346
			1,626			1,347			948
Deferred:
	U.S.		(1,123	)		67			397
	Non-U.S.		(44	)		(32	)		24
			(1,167	)		35			421
		$	459		$	1,382		$	1,369

The Company's provision for income taxes in 2001, 2000 and 1999 was different from the amount computed by applying the statutory U.S. federal income tax rate to earnings from continuing operations before income taxes, as a result of the following:

	% of Earnings Before Income Taxes
	2001					2000					1999
Earnings from Continuing Operations Before Income Taxes	$	2,986		100	%	$	5,478		100	%	$	5,158		100	%
U.S. statutory rate	$	1,045		35.0	%	$	1,918		35.0	%	$	1,805		35.0	%
Effect of operations in Ireland and Puerto Rico		(696	)	(23.3	)		(642	)	(11.7	)		(397	)	(7.7	)
State and local taxes		81		2.7			63		1.2			26		0.5
Foreign/Other		29		1.0			43		0.7			(65	)	(1.3	)
	$	459		15.4	%	$	1,382		25.2	%	$	1,369		26.5	%

38

The effective tax rate on continuing operations declined to 15.4% in 2001 from 25.2% in 2000 due primarily to lower pretax income in the U.S. resulting from the write-off of acquired in-process research and development and other nonrecurring items in 2001.

Prepaid taxes at December 31, 2001 and 2000, were $890 million and $537 million, respectively. The deferred income taxes, included in Other Assets/(Liabilities), at December 31, 2001 and 2000, were $630 million and $(425) million, respectively.

The components of prepaid and deferred income taxes consisted of:

	December 31,
	2001			2000
Depreciation	$	(289	)	$	(285	)
Postretirement and pension benefits		39			49
Restructuring		368			142
Acquired in-process research and development		952			—
Deferred income		61			—
Other		389			206
	$	1,520		$	112

The increase in the net prepaid and deferred tax assets to $1,520 million at December 31, 2001 from $112 million at December 31, 2000 relates primarily to acquired in-process research and development and restructuring charges in 2001 that will give rise to tax deductions in future years.

Income taxes paid during the year were $1,021 million, $1,620 million and $805 million in 2001, 2000 and 1999, respectively.

The Company has settled its U.S. federal income tax returns with the Internal Revenue Service through 1994.

U.S. federal income taxes have not been provided on substantially all of the unremitted earnings of non-U.S. subsidiaries, since it is management's practice and intent to reinvest such earnings in the operations of these subsidiaries. The total amount of the net unremitted earnings of non-U.S. subsidiaries was approximately $8.8 billion at December 31, 2001.

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Note 9    PROPERTY, PLANT AND EQUIPMENT

	December 31,
	2001		2000
Land	$	216	$	167
Buildings		3,154		3,142
Machinery, equipment and fixtures		3,787		4,059
Construction in progress		854		558
		8,011		7,926
Less accumulated depreciation		3,132		3,378
	$	4,879	$	4,548

Property, plant and equipment of discontinued operations constituted approximately 8% of total Company property, plant and equipment for the year ended December 31, 2000.

Note 10    INVENTORIES

	December 31,
	2001		2000
Finished goods	$	829	$	890
Work in process		411		473
Raw and packaging materials		247		468
	$	1,487	$	1,831

Inventories of discontinued operations constituted approximately 18% of total Company inventory for the year ended December 31, 2000.

Note 11    SHORT-TERM BORROWINGS AND LONG-TERM DEBT

Included in short-term borrowings were amounts due to banks, primarily foreign, of $140 million and $152 million at December 31, 2001 and 2000, respectively, and current installments of long-term debt of $34 million at December 31, 2001, and $10 million at December 31, 2000. The average interest rate on short-term borrowings was 7.41% and on current installments of long-term debt was 4.03% at December 31, 2001.

During 2001, the Company consolidated its two credit facilities, aggregating $500 million with a syndicate of lenders as support for its commercial paper program. The new credit facility consists of a $500 million, five-year revolving credit facility, extendable at each anniversary date with the consent of the lenders. There were no borrowings outstanding under the credit facility at December 31, 2001. In addition, the Company has unused short-term lines of credit with foreign banks of $290 million.

40

The components of long-term debt were:

	December 31,
	2001		2000
4.75% Notes, due in 2006	$	2,484	$	—
5.75% Notes, due in 2011		2,478		—
6.80% Debentures, due in 2026		345		345
7.15% Debentures, due in 2023		344		344
6.875% Debentures, due in 2097		296		296
Various Rate Yen Term Loans, due in 2003		62		69
2.14% Yen Notes, due in 2005		53		60
1.73% Yen Notes, due in 2003		53		60
3.51% Deutsche Mark Interest on Yen Principal Term Loan, due in 2005		49		55
5.75% Industrial Revenue Bonds, due in 2024		34		34
2.83% Yen Term Loan, due in 2002		—		28
Variable Rate Industrial Revenue Bonds, due in 2030		15		15
Capitalized Leases		17		19
Other, 6.375% to 6.50%,due in Varying amounts through 2004		7		11
	$	6,237	$	1,336

Long-term debt at December 31, 2001, increased to $6,237 million from $1,336 million at December 31, 2000, largely as a result of the financing for the DuPont and ImClone transactions. During 2001, the Company issued $5.0 billion of debt notes, of which $2.5 billion matures in 2006, and of which the remaining $2.5 billion matures in 2011.

41

Note 12    STOCKHOLDERS' EQUITY

Changes in capital shares and capital in excess of par value of stock were:

	Shares of Common Stock
				Capital in Excess of Par Value of Stock
	Issued	Treasury
Balance, December 31, 1998	2,188,316,808	199,550,532		$	1,075
Issued pursuant to stock plans and options	4,641,700	(9,694,871	)		458
Conversions of preferred stock	11,996	—			—
Purchases	—	22,309,190			—
Balance, December 31, 1999	2,192,970,504	212,164,851			1,533
Issued pursuant to stock plans and options	4,911,457	(8,197,329	)		469
Conversions of preferred stock	18,874	—			—
Purchases	—	40,398,204			—
Balance, December 31, 2000	2,197,900,835	244,365,726			2,002
Issued pursuant to stock plans and options	2,093,530	(7,175,057	)		334
Conversions of preferred stock	16,111	—			—
Purchases	—	27,198,901			—
Balance, December 31, 2001	2,200,010,476	264,389,570		$	2,336

Each share of the Company's preferred stock is convertible into 16.96 shares of common stock and is callable at the Company's option. The reductions in the number of issued shares of preferred stock in 2001, 2000 and 1999 were due to conversions into shares of common stock.

Dividends per common share were $1.10 in 2001, $0.98 in 2000 and $0.86 in 1999.

Stock Compensation Plans

Under the Company's 1997 Stock Incentive Plan, officers, directors and key employees may be granted options to purchase the Company's common stock at no less than 100% of the market price on the date the option is granted. Options generally become exercisable in installments of 25% per year on each of the first through the fourth anniversaries of the grant date and have a maximum term of 10 years. Additionally, the plan provides for the granting of stock appreciation rights whereby the grantee may surrender exercisable options and receive common stock and/or cash measured by the excess of the market price of the common stock over the option exercise price. The plan also provides for the granting of performance-based stock options to certain key executives.

Under the terms of the 1997 Stock Incentive Plan, as amended, additional shares are authorized in the amount of 0.9% of the outstanding shares per year through 2002. The plan incorporates the Company's long-term performance awards.

In addition, the 1997 Stock Incentive Plan provides for the granting of up to 20,000,000 shares of common stock to key employees, subject to restrictions as to continuous employment except in the case of death or normal retirement. Restrictions generally expire over a five-year period from date of grant. Compensation expense is recognized over the restricted period. At December 31, 2001, a total of 1,286,771 restricted shares were outstanding under the plan.

42

Under the TeamShare Stock Option Plan, all full-time employees, excluding key executives, meeting certain years of service requirements, are granted options to purchase the Company's common stock at the market price on the date the options are granted. The Company has authorized 62,000,000 shares for issuance under the plan. Individual grants generally became exercisable on or after the third anniversary of the grant date. As of December 31, 2001, 30,430,045 shares have been exercised under the plan.

The Company applies Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees, and related interpretations in accounting for its plans. Accordingly, no compensation expense has been recognized for its stock-based compensation plans other than for restricted stock and performance-based awards. Had compensation cost for the Company's other stock option plans been determined based upon the fair value at the grant date for awards under these plans consistent with the methodology prescribed under SFAS No. 123, Accounting for Stock-Based Compensation, the Company's net income and earnings per share would have been reduced by approximately $246 million, or $.13 per common share, basic and diluted, in 2001, $218 million, or $.11 per common share, basic and diluted, in 2000 and $198 million, or $.10 per common share, basic and diluted, in 1999. The fair value of the options granted during 2001, 2000 and 1999 was estimated as $22.59 per common share, $17.17 per common share and $17.37 per common share, respectively, on the date of grant using the Black-Scholes option-pricing model with the following assumptions:

	2001		2000		1999
Dividend yield	1.5	%	1.5	%	2.4	%
Volatility	28.6	%	24.5	%	21.8	%
Risk-free interest rate	5.75	%	6.3	%	5.5	%
Assumed forfeiture rate	3.0	%	3.0	%	3.0	%
Expected life (years)	7		7		7

43

Stock option transactions were:

	Shares of Common Stock
	Available for Option Plan		Under Shares		Weighted Average of Exercise Price of Under Plan
Balance, December 31, 1998	21,306,814		129,019,466		$	29.47
Authorized	19,898,896		—			—
Granted	(24,221,950	)	24,221,950			65.39
Exercised	—		(20,425,070	)		20.41
Lapsed	3,552,037		(3,552,037	)		42.51
Balance, December 31, 1999	20,535,797		129,264,309			37.27
Authorized	17,827,251		—			—
Granted	(20,851,475	)	20,851,475			49.72
Exercised	—		(17,605,519	)		25.26
Lapsed	3,665,969		(3,665,969	)		58.12
Balance, December 31, 2000	21,177,542		128,844,296			40.32
Authorized	17,581,816		—			—
Granted	(21,200,624	)	21,200,624			62.45
Granted as a result of the Zimmer spin-off(1)	—		6,764,516			41.87
Exercised	—		(13,916,580	)		25.17
Lapsed	13,578,556		(13,578,556	)		52.92
Balance, December 31, 2001	31,137,290		129,314,300		$	42.19

(1)

Effective with the spin-off of Zimmer on August 6, 2001, unexercised Bristol-Myers Squibb stock options held by Zimmer employees were converted into Zimmer stock options. For remaining unexercised Bristol-Myers Squibb stock options, the number of stock options and the exercise price were adjusted to preserve the intrinsic value of the stock options that existed prior to the spin-off.

The following table summarizes information concerning currently outstanding and exercisable options:

		Options Outstanding				Options Exercisable
Range of Exercise Prices		Number Outstanding	Weighted Average Remaining Contractual Life	Weighted Average Exercise Price		Number Exercisable	Weighted Average Exercise Price
$	10 — $20	21,242,049	2.44	$	14.41	21,242,049	$	14.41
$	20 — $30	15,369,461	4.42		22.70	15,369,461		22.70
$	30 — $40	10,375,757	5.20		32.50	10,375,757		32.50
$	40 — $50	38,807,555	6.90		46.44	21,296,617		47.00
$	50 — $60	19,468,789	8.93		58.38	945,548		55.97
$	60 and up	24,050,689	7.49		63.39	10,895,175		62.82
		129,314,300				80,124,607

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BRISTOL-MYERS SQUIBB COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in millions)

At December 31, 2001, 217,702,408 shares of common stock were reserved for issuance pursuant to stock plans, options and conversions of preferred stock. Options related to discontinued operations and included in the above amounts are not material.

Note 13    FINANCIAL INSTRUMENTS

The Company is exposed to market risk due to changes in currency exchange rates and interest rates. As a result, the Company utilizes foreign exchange option and forward contracts to offset the effect of exchange rate fluctuations on anticipated foreign currency transactions, primarily intercompany inventory purchases expected to occur within the next year.

The Company has exposures to net foreign currency denominated assets and liabilities, which approximated $2,079 million and $1,781 million at December 31, 2001 and 2000, respectively, primarily in Europe, Japan, Mexico and Canada. The Company mitigates the effect of these exposures through third-party borrowings. The exposures to net foreign currency denominated assets and liabilities related to discontinued operations and included in the above amounts are not material.

Foreign exchange option contracts and forward contracts are used to hedge anticipated transactions. The Company's primary foreign currency exposures in relation to the U.S. dollar are the Japanese yen, euro, Mexican peso and Canadian dollar. The notional amounts of the Company's foreign exchange derivative contracts at December 31, 2001 and 2000, were $1,387 million and $1,395 million, respectively. For these derivatives, which qualify as hedges of future cash flows, the effective portion of changes in fair value is temporarily recorded in comprehensive income and then recognized in earnings when the hedged item affects earnings. Any ineffective portion of hedges is reported in earnings as it occurs. The notional amounts of foreign exchange derivative contracts related to discontinued operations and included in the above amounts are not material.

To manage interest rate risk, the Company utilizes interest rate swap contracts. The Company enters into interest rate swaps to hedge against the effects of adverse changes in interest rates on future cash outflows for interest. Gains and losses from changes in fair value on interest rate swap contracts designated as cash flow hedges are initially deferred and recorded in other comprehensive income. Amounts are transferred from other comprehensive income and recognized in earnings as interest expense in the same period as the hedged item is recognized in earnings.

In 2001, the Company entered into interest rate hedge contracts, with a notional amount of $2 billion, to manage its exposure to changes in interest rates for long-term fixed-rate debt issues in connection with the DuPont and ImClone transactions (see Notes 3 and 7). The contracts were designated as hedges of the variability of the cash flows due to changes in the long-term benchmark interest rates. In the third quarter of 2001, the Company settled all existing interest rate hedge contracts, which coincided with the issuance of the long-term fixed-rate debt. The Company recorded the contract settlements at fair value, resulting in a $69 million deferred loss, net of taxes, in accumulated other comprehensive income/(loss), which will be recognized as a yield adjustment over the terms of the related borrowings.

The fair value of derivative instruments, which is recorded in prepaid expenses at December 31, 2001, was $27 million. The fair values of the Company's derivative instruments are based on relevant market information including current forward currency exchange rates and current interest rates. The fair value of option contracts is estimated by using the Black-Scholes model and is based on year-end currency rates. The fair value of foreign exchange forward contracts is based on year-end forward currency rates. The carrying amount of the Company's other financial instruments, which include cash equivalents, marketable

45

securities, accounts receivable, long-term debt and accounts payable, approximates the fair value at December 31, 2001 and 2000.

In accordance with SFAS No. 133, the Company recorded a transition adjustment as of January 1, 2001, of $26 million, net of taxes, in other comprehensive income/(loss) to record derivative instruments at their fair value.

A reconciliation of current period changes, net of taxes, included in other comprehensive income/(loss) follows:

Transition adjustment as of January 1, 2001, net	$	26
Current period decreases in fair value, net		(37	)
Recognized in earnings, net		(51	)
Balance at December 31, 2001	$	(62	)

Note 14    SEGMENT INFORMATION

The Company operates in one significant business segment: Medicines. Operations of the Nutritional and ConvaTec businesses are not material and share the same economic and operating characteristics as the Medicines business.

The Company's products are sold principally to the wholesale and retail trade both nationally and internationally. Certain products are also sold to other drug manufacturers, hospitals and the medical profession. Three wholesalers accounted for approximately 45% of net sales from continuing operations in 2001 while two wholesalers accounted for 24% in 2000.

Sales of selected products and product categories are as follows:

	Year Ended December 31,
	2001		2000		1999
PRAVACHOL*	$	2,173	$	1,817	$	1,704
GLUCOPHAGE		2,049		1,732		1,317
Oncology Therapeutics Network		1,433		1,080		894
PLAVIX		1,350		903		547
Infant formulas		1,255		1,212		1,233
TAXOL*		1,197		1,592		1,481
PARAPLATIN*		702		690		600
ZERIT*		546		618		605
AVAPRO		510		381		255
MONOPRIL*		458		442		424
Ostomy		450		428		449
SERZONE*		409		360		332
BUSPAR*		338		709		605

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GEOGRAPHIC AREAS

	Net Sales
	2001		2000		1999
United States	$	13,154	$	12,114	$	10,631
Europe, Mid-East and Africa		3,613		3,414		3,738
Other Western Hemisphere		1,290		1,314		1,279
Pacific		1,366		1,374		1,230
Net sales	$	19,423	$	18,216	$	16,878

	Year-End Assets
	2001		2000
United States	$	20,843	$	10,640
Europe, Mid-East and Africa		4,280		4,453
Other Western Hemisphere		1,135		1,376
Pacific		799		1,109
Total Assets	$	27,057	$	17,578

Note 15    LEASES

Minimum rental commitments under all noncancelable operating leases, primarily real estate, in effect at December 31, 2001, were:

Years Ending December 31,
2002	$	113
2003		88
2004		63
2005		37
2006		34
Later years		99
Total minimum payments		434
Less total minimum sublease rentals		85
Net minimum rental commitments	$	349

Operating lease rental expense (net of sublease rental income of $25 million in 2001, $21 million in 2000 and $24 million in 1999) was $80 million in 2001, $85 million in 2000 and $87 million in 1999.

Note 16    RETIREMENT PLANS

The Company and certain of its subsidiaries have defined benefit pension plans and defined contribution plans for regular full-time employees. The principal pension plan is the Bristol-Myers Squibb Retirement Income Plan. The Company's funding policy is to contribute amounts to provide for current service and to

47

fund past service liability. Plan benefits are based primarily on years of credited service and on the participant's compensation. Plan assets consist principally of equity and fixed-income securities.

During 2001, the Company had a domestic curtailment/settlement loss of approximately $25 million resulting from reductions in employment levels primarily in connection with restructuring activities and the Clairol divestiture.

Cost of the Company's defined benefit plans included the following components:

	Year Ended December 31,
	2001			2000			1999
Service cost — benefits earned during the year	$	152		$	159		$	161
Interest cost on projected benefit obligation		246			235			217
Expected earnings on plan assets		(361	)		(332	)		(285	)
Net amortization and deferral		15			3			4
Net pension expense	$	52		$	65		$	97
Curtailments and settlements		25			—			—
Total pension expense	$	77		$	65		$	97

The weighted-average actuarial assumptions for the Company's pension plans were as follows:

	December 31,
	2001		2000		1999
Discount rate	7.3	%	7.8	%	7.8	%
Compensation increase	4.3	%	4.8	%	4.8	%
Long-term rate of return	10.0	%	10.0	%	10.0	%

48

Changes in benefit obligation and plan assets were:

		December 31,
		2001			2000			1999
Benefit obligation at beginning of year		$	3,294		$	3,137		$	3,216
Service cost — benefits earned during the year			152			159			161
Interest cost on projected benefit obligation			246			235			217
Curtailments and settlements			(171	)		—			—
Transfer from DuPont			313			—			—
Actuarial (gains) and losses			360			22			(203	)
Benefits paid			(280	)		(259	)		(254	)
Benefit obligation at end of year		$	3,914		$	3,294		$	3,137
Fair value of plan assets at beginning of year		$	3,523		$	3,490		$	3,137
Actual earnings on plan assets			(188	)		25			561
Employer contribution			300			267			46
Settlements			(65	)		—			—
Transfer from DuPont			218			—			—
Benefits paid			(280	)		(259	)		(254	)
Fair value of plan assets at end of year		$	3,508		$	3,523		$	3,490
Plan assets in excess of (less than) projected benefit obligation		$	(406	)	$	229		$	353
Unamortized net obligation (assets) at adoption			6			7			(2	)
Unrecognized prior service cost			107			55			37
Unrecognized net (gains) and losses			645			(83	)		(385	)
Net amount recognized		$	352		$	208		$	3
Amounts recognized in the consolidated balance sheet consist of:
	Prepaid benefit cost	$	629		$	405		$	181
	Accrued benefit liability		(314	)		(214	)		(190	)
	Other asset		37			17			12
Net amount recognized		$	352		$	208		$	3

The projected benefit obligation, accumulated benefit obligation, and fair value of plan assets for the pension plans with accumulated benefit obligations in excess of plan assets were $665 million, $562 million and $306 million, respectively, as of December 31, 2001, $332 million, $254 million and $47 million, respectively, as of December 31, 2000 and $319 million, $245 million and $56 million, respectively, as of December 31, 1999. This is attributable primarily to an unfunded benefit equalization plan and, at December 31, 2001, a DuPont Pharmaceuticals Company U.S. pension plan.

49

Note 16    RETIREMENT PLANS (Continued)

The principal defined contribution plan is the Bristol-Myers Squibb Savings and Investment Program. The Company's contribution is based on employee contributions and the level of Company match. Company contributions to the plan were $54 million in 2001, $53 million in 2000 and $49 million in 1999.

Note 17    POSTRETIREMENT BENEFIT PLANS OTHER THAN PENSIONS

The Company provides comprehensive medical and group life benefits for substantially all U.S. retirees who elect to participate in the Company's comprehensive medical and group life plans. The medical plan is contributory. Contributions are adjusted periodically and vary by date of retirement and the original retiring Company. The life insurance plan is noncontributory. Plan assets consist principally of equity securities and fixed-income securities.

Cost of the Company's postretirement benefit plans included the following components:

	Year Ended December 31,
	2001			2000			1999
Service cost—benefits earned during the year	$	10		$	9		$	10
Interest cost on accumulated postretirement benefit obligation		45			39			36
Expected earnings on plan assets		(17	)		(17	)		(13	)
Net amortization and deferral		1			(2	)		1
Curtailments		3			—			—
Net postretirement benefit expense	$	42		$	29		$	34

The weighted-average actuarial assumptions for the Company's postretirement benefit plans were as follows:

	December 31,
	2001		2000		1999
Discount rate	7.3	%	7.8	%	7.8	%
Long-term rate of return	10.0	%	10.0	%	10.0	%

Changes in benefit obligation and plan assets were:

	Year Ended December 31,
	2001			2000			1999
Benefit obligation at beginning of year	$	548		$	521		$	507
Service cost—benefits earned during the year		10			9			10
Interest cost on accumulated postretirement benefit obligation		45			39			36
Plan participants' contributions		3			2			2
Plan amendments		—			—			(9	)
Actuarial (gains) and losses		77			21			16
Curtailments		5			—			—
Benefits paid		(49	)		(44	)		(41	)
Benefit obligation at end of year	$	639		$	548		$	521

50

	December 31,
	2001			2000			1999
Fair value of plan assets at beginning of year	$	179		$	152		$	128
Actual earnings on plan assets		(11	)		6			24
Employer contribution		46			63			39
Plan participants' contributions		3			2			2
Benefits paid		(49	)		(44	)		(41	)
Fair value of plan assets at end of year	$	168		$	179		$	152
Accumulated postretirement benefit obligation in excess of plan assets	$	(471	)	$	(369	)	$	(369	)
Unrecognized prior service cost		(5	)		(5	)		(6	)
Unrecognized net (gains) and losses		70			(22	)		(55	)
Accrued postretirement benefit expense	$	(406	)	$	(396	)	$	(430	)

The reported curtailments relate to the Company's restructuring and divestiture activities.

For measurement purposes, an annual rate of increase in the per capita cost of covered health care benefits of 8% for participants was assumed for 2002; the rate was assumed to decrease gradually to 4.8% in 2007 and to remain at that level thereafter.

A one-percentage-point change in assumed health care cost trend rates would have the following effects:

	1-Percentage- Point Increase		1-Percentage- Point Decrease
Effect on the aggregate of the service and interest cost components of net postretirement benefit expense	$	2	$	(2	)
Effect on the accumulated postretirement benefit obligation	$	26	$	(24	)

Note 18    LITIGATION

Various lawsuits, claims and proceedings of a nature considered normal to its businesses are pending against the Company and certain of its subsidiaries. The most significant of these are described below.

BREAST IMPLANT LITIGATION

The Company, together with its subsidiary Medical Engineering Corporation (MEC) and certain other companies, remains a defendant in a number of claims and lawsuits alleging damages for personal injuries of various types resulting from polyurethane-covered breast implants and smooth-walled breast implants formerly manufactured by MEC or a related company. The vast majority of claims against the Company in direct lawsuits have been resolved through settlements or trial. Likewise, claims or potential claims against the Company registered in the nationwide class action settlement approved by the Federal District Court in Birmingham, Alabama (Revised Settlement), have been or will be resolved through the Revised Settlement. The Company expects it will be able to address all remaining claims or potential claims through its product liability reserves.

51

TAXOL* LITIGATION

In 1997 and 1998, the Company filed several lawsuits alleging that a number of generic drug companies infringed its patents covering methods of administering paclitaxel when they filed Abbreviated New Drug Applications seeking regulatory approval to sell paclitaxel. These actions were consolidated for discovery in the U.S. District Court for the District of New Jersey (District Court). The Company did not assert a monetary claim against any of the defendants, but sought to prevent the defendants from marketing paclitaxel in a manner that violates the Company's patents. The defendants asserted that they did not infringe the Company's patents and that these patents are invalid and unenforceable.

In early 2000, the District Court invalidated most claims of the Company's patents. On April 20, 2001, the U.S. Court of Appeals for the Federal Circuit affirmed the District Court's summary judgment of the invalidity of all but two claims of the patents at issue. Those two claims relate to the low-dose, three-hour administration of paclitaxel in which the patient is given a specified regimen of premedicants before the administration of paclitaxel. The appellate court remanded those two claims to the District Court for further proceedings. In 2001 the Company filed an additional patent infringement suit against another company seeking to market generic paclitaxel.

In September 2000, one of the defendants received final approval from the U.S. Food and Drug Administration (FDA) for its Abbreviated New Drug Application for paclitaxel and is marketing the product. Additional final approvals have since been announced by the FDA and sales of additional generic products have begun.

Some of the defendants asserted counterclaims seeking damages for alleged antitrust and unfair competition violations. The Company believed its patents were valid when it filed the suits, and the counterclaims asserted are believed to be without merit. Since the filing of the suits, six private actions have been filed by parties alleging antitrust, consumer protection and similar claims relating to the Company's actions to obtain and enforce patent rights. The plaintiffs seek declaratory judgment, damages (treble and/or punitive where allowed), disgorgement and injunctive relief. In September 2000, the Federal Trade Commission initiated an investigation relating to paclitaxel. Various state attorneys general have also initiated investigations regarding paclitaxel. At this time, none of these federal and state agencies has brought any claims against the Company relating to paclitaxel, nor have they indicated whether any such claims will be brought. The Company is cooperating in these investigations.

The lawsuits with four of the defendants have been settled with defendants agreeing to drop all claims against the Company relating to paclitaxel and the Company granting licenses to the four defendants under certain paclitaxel patent rights. The Company is considering its options with respect to the two remaining patent infringement defendants. It is not possible at this time to make a reasonable assessment as to the final outcome of these lawsuits and investigations. Nor is it possible to reasonably estimate the impact those litigations and investigations might have if the Company were not to prevail.

BUSPAR* LITIGATION

On November 21, 2000, the Company obtained a patent, U.S. Patent No. 6,150,365 ('365 patent), relating to a method of using BUSPAR* or buspirone. The Company submitted timely information relating to the '365 patent to the FDA for listing in an FDA publication commonly known as the "Orange Book," and the FDA thereafter listed the patent in the Orange Book.

52

Delisting Suits. Generic-drug manufacturers sued the FDA and the Company to compel the delisting of the '365 patent from the Orange Book. Although one district court declined to order the delisting of the '365 patent, another ordered the Company to cause the delisting of the patent from the Orange Book. The Company complied with the court's order but appealed the decision to the United States Court of Appeals for the Federal Circuit. The Federal Circuit reversed the district court that ordered the delisting.

Patent Suits. The Company is seeking to enforce the '365 patent in actions against two generic drug manufacturers.

Antitrust Suits. Following the delisting of the '365 patent from the Orange Book, a number of purchasers of buspirone and several generic drug makers filed lawsuits against the Company alleging that it improperly triggered statutory marketing exclusivity. The attorneys general of 29 states and Puerto Rico have also filed suit against the Company with parallel allegations. Some of the private plaintiffs have amended their allegations to include charges that a 1994 agreement between the Company and a generic company improperly blocked the entry of generic buspirone to the market. The central issues raised by these cases are whether the Company improperly caused the listing of the '365 patent in the Orange Book and whether the 1994 agreement was improper. Plaintiffs seek declaratory judgment, damages (treble and/or punitive where allowed), disgorgement and injunctive relief.

Multidistrict Litigation (MDL) proceedings. The Judicial Panel on MDL granted the Company's motions to have all of the patent and antitrust cases consolidated in a single forum. The court before which the buspirone litigations are now pending issued two opinions dated February 14, 2002. In the first opinion, the court found that the '365 patent does not cover uses of buspirone and therefore is not infringed. In the second opinion, the court denied the Company's motion to dismiss the federal antitrust and state law claims against the Company. The second opinion allows the claims against the Company to proceed, except as to federal antitrust claims for damages accrued more than four years before the filing of the complaints.

Government Investigations. The Federal Trade Commission and a number of state attorneys general have initiated investigations concerning the listing of the '365 patent in the Orange Book. The Company is cooperating in these investigations. A number of attorneys general, but not all of them, filed an action against the Company, as noted earlier.

It is not possible at this time to make a reasonable assessment as to the final outcome of these lawsuits and investigations. If the Company were not to prevail in final, non-appealable determinations of these litigations and investigations, the impact on the Company could be material.

VANLEV* LITIGATIONS

In April, May and June 2000, the Company, its former chairman of the board and chief executive officer, Charles A. Heimbold, Jr., and its chief scientific officer, Peter S. Ringrose, Ph.D., were named as defendants in a number of class action lawsuits alleging violations of federal securities laws and regulations. These actions have been consolidated into one action for pretrial proceedings in the U.S. District Court for the District of New Jersey. The plaintiff claims that the defendants disseminated materially false and misleading statements and failed to disclose information concerning the safety and expected availability of its product VANLEV during the period November 8, 1999, through April 19, 2000. The plaintiff seeks compensatory damages, costs and expenses.

53

In March 2002, the Company and its Chairman and Chief Executive Officer, Peter R. Dolan, were named as defendants in a purported securities class action lawsuit alleging violations of federal securities laws and regulations. The action is pending in the U.S. District Court for the Southern District of New York. The plaintiffs allege that the defendants disseminated materially false and misleading statements and failed to disclose safety data of its product VANLEV during the period September 25, 2001, through March 19, 2002. The plaintiffs seek compensatory damages, costs and expenses.

It is not possible at this time to make a reasonable assessment of the final outcome of these matters or the amount of damages if the Company were not to prevail.

While it is not possible to predict with certainty the outcome of these cases, it is the opinion of management that they will not have a material adverse effect on the Company's operating results or consolidated financial position.

Note 19    SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

		First Quarter		Second Quarter		Third Quarter		Fourth Quarter			Year
2001:
Net Sales(1)		$	4,689	$	4,709	$	4,743	$	5,282		$	19,423
Gross Margin			3,406		3,362		3,412		3,668			13,848
Net Earnings from Continuing Operations(2)			1,243		1,102		1,231		(1,049	)		2,527
Discontinued Operations, net(3)			93		99		14		2,512			2,718
Net Earnings			1,336		1,201		1,245		1,463			5,245
Earnings per Common Share
	Basic
	Earnings from Continuing Operations(2)		.64		.57		.64		(.54	)		1.30
	Discontinued Operations, net(3)		.05		.05		—		1.29			1.40
	Net Earnings		.69		.62		.64		.75			2.70
	Diluted(4)
	Earnings from Continuing Operations(2)		.63		.56		.63		(.54	)		1.29
	Discontinued Operations, net(3)		.05		.05		—		1.29			1.38
	Net Earnings		.68		.61		.63		.75			2.67

54

2000:
Net Sales(1)		$	4,451	$	4,418	$	4,563	$	4,784	$	18,216
Gross Margin			3,310		3,288		3,363		3,496		13,457
Net Earnings from Continuing Operations(2)			1,129		1,005		893		1,069		4,096
Discontinued Operations, net(3)			92		86		343		94		615
Net Earnings			1,221		1,091		1,236		1,163		4,711
Earnings per Common Share
	Basic
	Earnings from Continuing Operations(2)		.57		.51		.45		.55		2.08
	Discontinued Operations, net(3)		.05		.04		.18		.05		.32
	Net Earnings		.62		.55		.63		.60		2.40
Diluted (4)
Earnings from Continuing Operations (2)			.56		.50		.45		.54		2.05
Discontinued Operations, net (3)			.05		.04		.17		.05		.31
Net Earnings			.61		.54		.62		.59		2.36

(1)

In 2001, the fourth quarter includes sales by DuPont of $336 million.

(2)

In 2001, the third quarter results included a gain on the sale of three pharmaceutical products and licensing rights of $240 million as well as a provision for restructuring/other of $240 million. The fourth quarter results included a gain on the sale of a dermatologic product of $75 million, a provision for restructuring/other of $541 million, acquired in-process research and development write-offs of $2,744 million, and expenses related to the DuPont and ImClone transactions, including loss from operations, amortization and interest expenses and other onetime costs of $246 million. In 2000, the first quarter results included a gain on the sale of a business of $120 million and a provision for restructuring of $102 million. The second quarter results included a gain on the sale of a business of $40 million and a provision for restructuring of $20 million. The third quarter results included a provision for restructuring of $386 million.

(3)

In 2001, the fourth quarter results included a gain on the sale of a business of $4,152 million. In 2000, the first quarter results included a provision for restructuring of $18 million. The third quarter results included a gain on the sale of a business of $402 million and a provision for restructuring of $16 million.

(4)

Common equivalent shares have been excluded from the computation of diluted loss per share in the fourth quarter 2001 because the effect would be antidilutive.

55

REPORT OF MANAGEMENT

Management is responsible for the accompanying consolidated financial statements, which are prepared in accordance with generally accepted accounting principles. In management's opinion, the consolidated financial statements present fairly the Company's financial position, results of operations and cash flows. In addition, information and representations included in the Company's Annual Report are consistent with the financial statements.

The Company maintains a system of internal accounting policies, procedures and controls intended to provide reasonable assurance, given the inherent limitations of all internal control systems, at appropriate costs, that transactions are executed in accordance with Company authorization, that they are properly recorded and reported in the financial statements and that assets are adequately safeguarded. The Company's internal auditors continually evaluate the adequacy and effectiveness of this system of internal accounting policies, procedures and controls, and actions are taken to correct deficiencies as they are identified.

The Audit Committee of the Board of Directors is composed solely of nonemployee directors and is responsible for overseeing and monitoring the quality of the Company's accounting and auditing practices. The Audit Committee meets several times during the year with management, the internal auditors and the independent accountants to discuss audit activities, internal controls and financial reporting matters. The internal auditors and the independent accountants have full and free access to the Audit Committee.

The appointment of PricewaterhouseCoopers LLP as the Company's independent accountants by the Board of Directors was ratified by the stockholders. PricewaterhouseCoopers LLP's Report to the Board of Directors and Stockholders of Bristol-Myers Squibb Company appears in this Form 10-K Annual Report.

Peter R. Dolan
Chairman of the Board and
Chief Executive Officer Frederick S. Schiff
Senior Vice President and
Chief Financial Officer

56

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors
and Stockholders of
Bristol-Myers Squibb Company

In our opinion, the consolidated financial statements listed in the index appearing under Item 14(a)(1) on page 58 present fairly, in all material respects, the financial position of Bristol-Myers Squibb Company and its subsidiaries at December 31, 2001 and 2000, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2001, in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statement schedule listed in the index appearing under Item 14(a)(2) on page 58 presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. These financial statements and the financial statement schedule are the responsibility of the Company's management; our responsibility is to express an opinion on these financial statements and financial statement schedule based on our audits. We conducted our audits of these statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

As described in Note 1, the Company changed its method of accounting for business combinations and goodwill for transactions consummated subsequent to June 30, 2001, pursuant to new standards issued by the Financial Accounting Standards Board.

/s/ PricewaterhouseCoopers LLP
PRICEWATERHOUSECOOPERS LLP
New York, New York
January 24, 2002, except as to the fifth paragraph under the BUSPAR* Litigation discussion in Note 18 which is as of February 14, 2002 and as to the second paragraph in Note 7 which is as of March 5, 2002 and as to the second paragraph under the VANLEV* Litigation discussion in Note 18 which is as of March 25, 2002.

57

Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

None.

PART III

Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

(a)

Reference is made to the 2002 Proxy Statement to be filed on or before April 5, 2002 with respect to the Directors of the Registrant which is incorporated herein by reference and made a part hereof in response to the information required by Item 10.



(b)

The information required by Item 10 with respect to the Executive Officers of the Registrant has been included in Part IA of this Form 10-K Annual Report in reliance on General Instruction G of Form 10-K and Instruction 3 to Item 401(b) of Regulation S-K.

Item 11. EXECUTIVE COMPENSATION.

Reference is made to the 2002 Proxy Statement to be filed on or before April 5, 2002 with respect to Executive Compensation which is incorporated herein by reference and made a part hereof in response to the information required by Item 11.

Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

Reference is made to the 2002 Proxy Statement to be filed on or before April 5, 2002 with respect to the security ownership of certain beneficial owners and management which is incorporated herein by reference and made a part hereof in response to information required by Item 12.

Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

Reference is made to the 2002 Proxy Statement to be filed on or before April 5, 2002 with respect to certain relationships and related transactions which is incorporated herein by reference and made a part hereof in response to the information required by Item 13.

PART IV

Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.

(a)

		Page Number
1.	Financial Statements	24-28
	Notes to Consolidated Financial Statements	29-55
	Report of Management	56
	Report of Independent Accountants	57
2.	Financial Statement Schedule

	Schedule Number	Page Number
Valuation and Qualifying Accounts	II	S-1

All other schedules not included with this additional financial data are omitted because they are not applicable or the required information is included in the financial statements or notes thereto.

58

3.

Exhibit List

The Exhibits listed below are identified by numbers corresponding to the Exhibit Table of Item 601 of Regulation S-K. The Exhibits designated by two asterisks (**) are management contracts or compensatory plans or arrangements required to be filed pursuant to this Item 14. Unless otherwise indicated, all Exhibits are part of Commission File Number 1-1136.

3a.	Restated Certificate of Incorporation of Bristol-Myers Squibb Company (incorporated herein by reference to Exhibit 4a to Registrant's Registration Statement on Form S-3, Registration Statement No. 33-33682, dated March 7, 1990, as amended as of May 5, 1999 by Certificate of Amendment incorporated herein by reference to Exhibit 3a to Form 10-K for the fiscal year ended December 31,1999).
3b.	Bylaws of Bristol-Myers Squibb Company, as amended as of November 6, 2001, filed herewith.
4a.	Letter of Agreement dated March 28, 1984 (incorporated herein by reference to Exhibit 4 to Form 10-K for the fiscal year ended December 31, 1983).
4b.	Indenture, dated as of June 1, 1993, between Bristol-Myers Squibb Company and The Chase Manhattan Bank (National Association), as trustee (incorporated herein by reference to Exhibit 4.1 to the Form 8-K dated May 27, 1993, and filed on June 3, 1993).
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.	Five Year Competitive Advance and Revolving Credit Facility Agreement dated as of March 17, 1998 among Bristol-Myers Squibb Company, the Borrowing Subsidiaries (as defined in the Agreement), the Lenders listed in Schedule 2.1 to the Agreement, The Chase Manhattan Bank as Administrative Agent and Citibank, N.A., as Administrative Agent (incorporated herein by reference to Exhibit 4f to the Form 10-K for the fiscal year ended December 31, 1997).
4g.	364-Day Competitive Advance and Revolving Credit Facility agreement dated as of March 17, 1998 among Bristol-Myers Squibb Company, the Borrowing Subsidiaries (as defined in the Agreement), the Lenders listed in Schedule 2.1 to the Agreement, The Chase Manhattan Bank as Administrative Agent and Citibank, N.A., as Administrative Agent (incorporated herein by reference to Exhibit 4g to the Form 10-K for the fiscal year ended December 31, 1997).
4h.	Form of 4.75% Note Due 2006 and Form of 5.75% Note Due 2011 of Bristol-Myers Squibb Company (incorporated herein by reference to the Form 424(b)(5) filed on September 26, 2001).
**10a.	Bristol-Myers Squibb Company 1997 Stock Incentive Plan, effective as of May 6, 1997 and as amended effective November 3, 1998 (incorporated herein by reference to Exhibit 10a to the Form 10-K for the fiscal year ended December 31, 1998).
**10b.	Bristol-Myers Squibb Company Executive Performance Incentive Plan (incorporated herein by reference to Exhibit 10b to the Form 10-K for the fiscal year ended December 31, 1996).
**10c.	Bristol-Myers Squibb Company 1983 Stock Option Plan, as amended and restated as of January 1, 1997, as amended November 3, 1998 (incorporated herein by reference to Exhibit 10c to the Form 10-K for the fiscal year ended December 31, 1998).
**10d.	Squibb Corporation 1982 Option, Restricted Stock and Performance Unit Plan, as amended (incorporated herein by reference to Exhibit 10b to the Form 10-K for the fiscal year ended December 31, 1993).
**10e.	Squibb Corporation 1986 Option, Restricted Stock and Performance Unit Plan, as amended (as adopted, incorporated herein by reference to Exhibit 10k to the Squibb Corporation Form 10-K for the fiscal year ended December 31, 1988, File No. 1-5514; as amended effective July 1, 1993, and incorporated herein by reference to Exhibit 10c to the Form 10-K for the fiscal year ended December 31, 1993).

59

**10f.	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).
**10g.	Benefit Equalization Plan of Bristol-Myers Squibb Company and its Subsidiary or Affiliated Corporations Participating in the Bristol- Myers Squibb Company Retirement Income Plan or the Bristol-Myers Squibb Puerto Rico, Inc. Retirement Income Plan, as amended (as amended and restated as of January 1, 1993, as amended effective October 1, 1993, incorporated herein by reference to Exhibit 10e to the Form 10-K for the fiscal year ended December 31, 1993; and as amended effective February 1, 1995, incorporated herein by reference to Exhibit 10e to the Form 10-K for the fiscal year ended December 31, 1996).
**10h.	Benefit Equalization Plan of Bristol-Myers Squibb Company and its Subsidiary or Affiliated Corporations Participating in the Bristol- Myers Squibb Company Savings and Investment Program, as amended (as amended and restated effective as of January 1, 1996) filed herewith.
**10i.	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).
**10j.	Bristol-Myers Squibb Company Restricted Stock Award Plan, as amended (as adopted on November 7, 1989, incorporated herein by reference to Exhibit 10t to the Form 10-K for the fiscal year ended December 31, 1989; as amended on December 4, 1990, incorporated herein by reference to Exhibit 19a to the Form 10-K for the fiscal year ended December 31, 1990; as amended effective July 1, 1993, incorporated herein by reference to Exhibit 10h to the Form 10-K for the fiscal year ended December 31, 1993; as amended effective December 6, 1994, incorporated herein by reference to Exhibit 10h to the Form 10-K for the fiscal year ended December 31, 1994).
**10k.	Bristol-Myers Squibb Company Retirement Income Plan for Non-Employee Directors, as amended to March 5, 1996 (incorporated herein by reference to Exhibit 10k to the Form 10-K for the fiscal year ended December 31, 1996).
**101.	Bristol-Myers Squibb Company 1987 Deferred Compensation Plan for Non-Employee Directors, as amended to January 13, 1998 (incorporated herein by reference to Exhibit 101 to the Form 10-K for the fiscal year ended December 31, 1997).
**10m.	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).
**10n.	Squibb Corporation Deferral Plan for Fees of Outside Directors, as amended (as adopted, incorporated herein by reference to Exhibit 10e to the Squibb Corporation Form 10-K for the fiscal year ended December 31, 1987, File No. 1-5514; as amended effective December 31, 1991, incorporated herein by reference to Exhibit 10m to the Form 10-K for the fiscal year ended December 31, 1992).
**10o.	Amendment to all of the Company's plans, agreements, legal documents and other writings, pursuant to action of the Board of Directors on October 3, 1989, to reflect the change of the Company's name to Bristol-Myers Squibb Company (incorporated herein by reference to Exhibit 10v to the Form 10-K for the fiscal year ended December 31, 1989).
**10p.	Employment agreement of March 12, 1999 for Charles A. Heimbold, Jr. (incorporated herein by reference to Exhibit 10p to the Form 10-K for the fiscal year ended December 31, 1998).

60

**10q.	Form of Agreement entered into between the Registrant and each of the following officers on the following dates: Stephen E. Bear, December 4, 2001; Peter R. Dolan, July 29, 1999; Donald J. Hayden, Jr., July 30, 1999; Tamar D. Howson, October 11, 2001; Richard J. Lane, August 6, 1999; John L. McGoldrick, August 10, 1999; Peter S. Ringrose, Ph.D., August 5, 1999; Frederick S. Schiff, July 29, 1999; and John L. Skule, August 5, 1999. (incorporated herein by reference to Exhibit 10q to the Form 10-Q for the quarterly period ended September 30, 1999).
21.	Subsidiaries of the Registrant (filed herewith).
23.	Consent of PricewaterhouseCoopers LLP (filed herewith).

(b)

Reports on Form 8-K

On October 12, 2001, the Company filed a Form 8-K announcing the completion of the purchase of the DuPont Pharmaceuticals business on October 1, 2001.

On November 15, 2001, the Company filed a Form 8-K announcing the completion of the sale of its Clairol beauty care business ("Clairol") to Procter & Gamble.

61

SIGNATURES

Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

BRISTOL-MYERS SQUIBB COMPANY
    (Registrant)
By /s/  Peter R. Dolan
Peter R. Dolan
Chairman of the Board of Directors and
Chief Executive Officer

Date: April 1, 2002

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

Signature	Title	Date
/s/  PETER R. DOLAN (Peter R. Dolan)	Chairman of the Board of Directors and Chief Executive Officer (Principal Executive Officer)	April 1, 2002
/s/  FREDERICK S. SCHIFF (Frederick S. Schiff)	Senior Vice President and Chief Financial Officer, Corporate Staff (Principal Financial Officer)	April 1, 2002
/s/  CURTIS L. TOMLIN (Curtis L. Tomlin)	Vice President and Controller, Corporate Staff (Principal Accounting Officer)	April 1, 2002
/s/  ROBERT E. ALLEN (Robert E. Allen)	Director	April 1, 2002
/s/  LEWIS B. CAMPBELL (Lewis B. Campbell)	Director	April 1, 2002
/s/  VANCE D. COFFMAN (Vance D. Coffman)	Director	April 1, 2002
/s/  ELLEN V. FUTTER (Ellen V. Futter)	Director	April 1, 2002
/s/  LOUIS V. GERSTNER, JR. (Louis V. Gerstner, Jr.)	Director	April 1, 2002

62

/s/  LAURIE H. GLIMCHER, M.D. (Laurie H. Glimcher, M.D.)	Director	April 1, 2002
/s/  LEIF JOHANSSON (Leif Johansson)	Director	April 1, 2002
/s/  JAMES D. ROBINSON III (James D. Robinson III)	Director	April 1, 2002
/s/  LOUIS W. SULLIVAN, M.D. (Louis W. Sullivan, M.D.)	Director	April 1, 2002

63

EXHIBIT INDEX

The Exhibits listed below are identified by numbers corresponding to the Exhibit Table of Item 601 of Regulation S-K. The Exhibits designed by two asterisks (**) are management contracts or compensatory plans or arrangements required to be filed pursuant to this Item 14. An asterisk (*) in the Page column indicates that the Exhibit has been previously filed with the Commission and is incorporated herein by reference. Unless otherwise indicated, all Exhibits are part of Commission File Number 1-1136.

Exhibit No.	Description	Page No.
3a.	Restated Certificate of Incorporation of Bristol-Myers Squibb Company (incorporated herein by reference to Exhibit 4a to Registration Statement No. 33--33682 on Form S-3, dated March 7, 1990, as amended as of May 5, 1999 by Certificate of Amendment incorporated herein by reference to Exhibit 3a to Form 10-K for the fiscal year ended December 31, 1999).	*
3b.	Bylaws of Bristol-Myers Squibb Company, as amended as of November 6, 2001, filed herewith.	E-1-1
4a.	Letter of Agreement dated March 28, 1984 (incorporated herein by reference to Exhibit 4 to Form 10-K for the fiscal year ended December 31, 1983).	*
4b.	Indenture, dated as of June 1, 1993, between Bristol-Myers Squibb Company and The Chase Manhattan Bank (National Association), as trustee (incorporated herein by reference to Exhibit 4.1 to the Form 8-K dated May 27, 1993, and filed on June 3, 1993).	*
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.	Five Year Competitive Advance and Revolving Credit Facility Agreement dated as of March 17, 1998 among Bristol-Myers Squibb Company, the Borrowing Subsidiaries (as defined in the Agreement), the Lenders listed in Schedule 2.1 to the Agreement, The Chase Manhattan Bank as Administrative Agent and Citibank, N.A., as Administrative Agent.	*
4g.	364-Day Competitive Advance and Revolving Credit Facility Agreement dated as of March 17, 1998 among Bristol-Myers Squibb Company, the Borrowing Subsidiaries (as defined in the Agreement), the Lenders listed in Schedule 2.1 to the Agreement, The Chase Manhattan Bank as Administrative Agent and Citibank, N.A., as Administrative Agent.	*
4h.	Form of 4.75% Note Due 2006 and Form of 5.75% Note Due 2011 of Bristol-Myers Squibb Company (incorporated herein by reference to the Form 424(b)(5) filed on September 26, 2001).	*
**10a.	Bristol-Myers Squibb Company 1997 Stock Incentive Plan, effective as of May 6, 1997 and as amended effective November 3, 1998 (incorporated herein by reference to Exhibit 10a to the Form 10-K for the fiscal year ended December 31, 1998).	*
**10b	Bristol-Myers Squibb Company Executive Performance Incentive Plan (incorporated herein by reference to Exhibit 10b to the Form 10-K for the fiscal year ended December 31, 1996).	*

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**10c.	Bristol-Myers Squibb Company 1983 Stock Option Plan, as amended and restated as of January 1, 1997, as amended November 3, 1998 (incorporated herein by reference to Exhibit 10c to the Form 10-K for the fiscal year ended December 31, 1998).	*
**10d.	Squibb Corporation 1982 Option, Restricted Stock and Performance Unit Plan, as amended (incorporated by reference to Exhibit 10b to the Form 10-K for the fiscal year ended December 31, 1993).	*
**10e.	Squibb Corporation 1986 Option, Restricted Stock and Performance Unit Plan, as amended (as adopted, incorporated herein by reference to Exhibit 10k to the Squibb Corporation Form 10-K for the fiscal year ended December 31, 1988, File No. 1-5514, as amended July 1, 1993, incorporated herein by reference to Exhibit 10c to the Form 10-K for the fiscal year ended December 31, 1993).	*
**10f.	Bristol-Myers Squibb Company Performance Incentive Plan, as amended (as adopted, incorporated herein by reference to Exhibit 2 to the Form 10-K for the fiscal year ended December 31, 1978; as amended as of January 8, 1990, incorporated herein by reference to Exhibit 19b to the Form 10-K for the fiscal year ended December 31, 1990; as amended on April 2, 1991, incorporated herein by reference to Exhibit 19b to the Form 10-K for the fiscal year ended December 31, 1991; as amended effective on January 1, 1994, and incorporated herein by reference to Exhibit 10d to the Form 10-K for the fiscal year ended December 31, 1994).	*
**10g.	Benefit Equalization Plan of Bristol-Myers Squibb Company and its Subsidiary or Affiliated corporations Participating in the Bristol-Myers Squibb Company Retirement Income Plan or the Bristol-Myers Squibb Puerto Rico, Inc. Retirement Income Plan, as amended (as amended and restated as of January 1, 1993, as amended effective October 1, 1993, incorporated herein by reference to Exhibit 10e to the Form 10-K for the fiscal year ended December 31, 1993 and amended effective February 1, 1995, incorporated by reference to Exhibit 10e to the Form 10-K for the fiscal year ended December 31, 1995).	*
**10h	Benefit Equalization Plan of Bristol-Myers Squibb Company and its Subsidiary or Affiliated Corporations Participating in the Bristol-Myers Squibb Company Savings and Investment Program, as amended (as amended and restated effective as of January 1, 1996) filed herewith.	E-2-1
**10i	Squibb Corporation Supplementary Pension Plan, as amended (as previously amended and restated, incorporated herein by reference to Exhibit 19g to the Form 10-K for the fiscal year ended December 31, 1991; as amended on September 14, 1993, incorporated by reference to Exhibit 10g to the Form 10-K for the fiscal year ended December 31, 1993).	*
**10j.	Bristol-Myers Squibb Company Restricted Stock Award Plan, as amended (as adopted on November 7, 1989, incorporated herein by reference to Exhibit 10t to the Form 10-K for the fiscal year ended December 31, 1989; as amended on December 4, 1990, incorporated herein by reference to Exhibit 19a to the Form 10-K for the fiscal year ended December 31, 1990; as amended July 1, 1993, incorporated by reference to Exhibit 10h to the Form 10-K for the fiscal year ended December 31, 1993; as amended effective December 6, 1994, incorporated by reference to Exhibit 10h to the Form 10-K for the fiscal year ended January 31, 1994).	*
**10k.	Bristol-Myers Squibb Company Retirement Income Plan for Non-Employee Directors, as amended to March 5, 1996 (incorporated herein by reference to Exhibit 10k to the Form 10-K for the fiscal year ended December 31, 1996).	*
**10l.	Bristol-Myers Squibb Company 1987 Deferred Compensation Plan for Non-Employee Directors, as amended to January 13, 1998 (incorporated herein by reference to Exhibit 101 to the Form 10-K for the fiscal year ended December 31, 1997).	*

65

**10m.	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; as amended May 2, 2000, incorporated herein by reference to Exhibit 10m to the Form 10-Q for the quarterly period ended March 31, 2000).	*
**10n.	Squibb Corporation Deferral Plan for Fees of Outside Directors, as amended (as adopted, incorporated herein by reference to Exhibit 10e to the Squibb Corporation Form 10-K for the fiscal year ended December 31, 1987, File No. 1-5514; as amended effective December 31, 1991, incorporated herein by reference to Exhibit 10m to the Form 10-K for the fiscal year ended December 31, 1992).	*
**10o.	Amendment to all of the Company's plans, agreements, legal documents and other writings, pursuant to action of the Board of Directors on October 3, 1989, to reflect the change of the Company's name to Bristol-Myers Squibb Company (incorporated herein by reference to Exhibit 10v to the Form 10-K for the fiscal year ended December 31, 1989).	*
**10p.	Employment agreement of March 12, 1999 for Charles A. Heimbold, Jr. (incorporated herein by reference to Exhibit 10p to the Form 10-K for the fiscal year ended December 31, 1998).	*
**10q.	Form of Agreement entered into between the Registrant and each of the following officers on the following dates: Stephen E. Bear, December 4, 2001; Peter R. Dolan, July 29, 1999; Donald J. Hayden, Jr., July 30, 1999; Tamar D. Howson, October 11, 2001; Richard J. Lane, August 6, 1999; John L. McGoldrick, August 10, 1999; Peter S. Ringrose, Ph.D., August 5, 1999; Frederick S. Schiff, July 29, 1999; and John L. Skule, August 5, 1999. (incorporated herein by reference to Exhibit 10q to the Form 10-Q for the quarterly period ended September 30, 1999).	*
21.	Subsidiaries of the Registrant	E-3-1
23.	Consent of PricewaterhouseCoopers LLP	E-4-1

66

SCHEDULE II

BRISTOL-MYERS SQUIBB COMPANY

VALUATION AND QUALIFYING ACCOUNTS

(dollars in millions)

Description		Balance at beginning of period		Additions charged to costs and expenses		Deductions- bad debts written off		Balance at End of period
Allowances for Discounts and Doubtful accounts:
	For the year ended December 31, 2001	$	171	$	49	$	58	$	162
	For the year ended December 31, 2000	$	168	$	37	$	34	$	171
	For the year ended December 31, 1999	$	147	$	65	$	44	$	168

S-1

QuickLinks

PART I
PART IA
PART II
Five-Year Financial Summary
Five-Year Financial Summary
BRISTOL-MYERS SQUIBB COMPANY CONSOLIDATED STATEMENT OF EARNINGS (in millions, except per share amounts)
BRISTOL-MYERS SQUIBB COMPANY CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME AND RETAINED EARNINGS (in millions, except per share amounts)
BRISTOL-MYERS SQUIBB COMPANY CONSOLIDATED BALANCE SHEET ASSETS (dollars in millions)
BRISTOL-MYERS SQUIBB COMPANY CONSOLIDATED BALANCE SHEET LIABILITIES AND STOCKHOLDERS' EQUITY (dollars in millions)
BRISTOL-MYERS SQUIBB COMPANY CONSOLIDATED STATEMENT OF CASH FLOWS (dollars in millions)
BRISTOL-MYERS SQUIBB COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (dollars in millions)
BRISTOL-MYERS SQUIBB COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (dollars in millions)
REPORT OF MANAGEMENT
REPORT OF INDEPENDENT ACCOUNTANTS
PART III
PART IV
SIGNATURES
EXHIBIT INDEX
BRISTOL-MYERS SQUIBB COMPANY VALUATION AND QUALIFYING ACCOUNTS (dollars in millions)

EX-3.B

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BRISTOL-MYERS SQUIBB COMPANY

BYLAWS

As Adopted on November 1, 1965

And as Amended to November 6, 2001

E-1-1

I N D E X

No.	Subject	Page
1.	Principal Office	E-1-5
2.	Other Offices	E-1-5
3.	Seal	E-1-5
4.	Meetings of Shareholders—Date and Time	E-1-5-E-1-6
5.	Meetings of Shareholders—Place	E-1-7
6.	Meetings of Shareholders—No Action By Written Consent, Call	E-1-7
7.	Meetings of Shareholders—Notice	E-1-7
8.	Meetings of Shareholders—Quorum	E-1-7
9.	Meetings of Shareholders—Presiding Officer and Secretary	E-1-7-E-1-8
10.	Meetings of Shareholders—Voting	E-1-8
11.	Meetings of Shareholders—Voting List	E-1-8-E-1-9
12.	Annual Meeting of Shareholders—Statement of Business and Condition of Company	E-1-9
13.	Meetings of Shareholders—Inspectors of Election	E-1-9
14.	Board of Directors—Powers	E-1-9
15.	Board of Directors—Number, Election, Term, Resignation or Retirement, Removal and Filling Vacancies	E-1-9-E-1-11
16.	Board of Directors—Location of Meetings and Books	E-1-11
17.	Board of Directors—Scheduling of Regular Meetings	E-1-11
18.	Board of Directors—Scheduling of Special Meetings	E-1-11

E-1-2

No.	Subject	Page
19.	Board of Directors—Waiver of Meeting Notice and Action by Consent	E-1-11
20.	Board of Directors—Quorum for Meeting	E-1-11-E-1-12
21.	Board of Directors—Meeting Procedure	E-1-12
22.	Board of Directors—Fees	E-1-12
23.	Board of Directors—Indemnification	E-1-12-E-1-13
24.	Committees of the Board—Executive, Audit, Others	E-1-13-E-1-15
25.	Committees of the Board—Minutes and Reports	E-1-15
26.	Officers	E-1-15
27.	Officers—Election and Term	E-1-15
28.	Appointment of Other Officers, Committees or Agents	E-1-16
29.	Officers—Removal	E-1-16
30.	Officers—Resignation	E-1-16
31.	Officers—Unable to Perform Duties	E-1-16
32.	Officers—Vacancy	E-1-16
33.	The Chairman of the Board and Chief Executive Officer—Powers and Duties	E-1-17
34.	The Vice Chairman of the Board—Powers and Duties	E-1-17
35.	Duties of President	E-1-17
36.	Vice Presidents—Powers and Duties	E-1-17
37.	The Treasurer—Powers and Duties	E-1-17
38.	The Secretary—Powers and Duties	E-1-18

E-1-3

No.	Subject	Page
39.	The Controller—Powers and Duties	E-1-18
40.	Assistant Treasurers and Assistant Secretaries—Powers and Duties	E-1-18
41.	Officers—Compensation	E-1-18
42.	Contracts, Other Instruments, Authority to Enter Into or Execute	E-1-19
43.	Loans and Negotiable Paper	E-1-19
44.	Checks, Drafts, etc.	E-1-19
45.	Banks—Deposit of Funds	E-1-19
46.	Stock Certificates—Form, Issuance	E-1-20
47.	Stock—Transfer	E-1-20
48.	Stock Certificates—Loss, Replacement	E-1-20
49.	Record Dates	E-1-21
50.	Registered Shareholders	E-1-21
51.	Fiscal Year	E-1-21
52.	Notices	E-1-22
53.	Notices—Waiver	E-1-22
54.	Amendments of Bylaws	E-1-22

E-1-4

BYLAWS

of

BRISTOL-MYERS SQUIBB COMPANY

OFFICES

1.	The registered office of the Company shall be in the City of Wilmington, County of New Castle, State of Delaware, and the name of the resident agent in charge thereof is The Corporation Trust Company.
2.	The Company may also have offices at such place or places as the Board of Directors may from time to time appoint or the business of the Company may require.

SEAL

3.
The corporate seal shall have inscribed thereon the name of the Company, the year of its organization and the words "Corporate Seal, Delaware." Said seal may be used in causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise.

MEETINGS OF SHAREHOLDERS

4.
The annual meeting of the shareholders for the election of directors and for the transaction of any other proper business shall be held at such time as the Board of Directors may determine. For nominations or other business to be properly brought before any annual meeting by a shareholder, a shareholder must give timely notice in writing thereof to the Secretary of the Company and, in the case of business other than nominations, such other business must be a proper matter for shareholder action. To be considered timely, a shareholder's notice must be received

E-1-5

by the Secretary at the principal executive offices of the Company not less than 120 calendar days before the date of the Company's proxy statement released to shareholders in connection with the prior year's annual meeting. If the annual meeting for the election of directors is not held on the date designated therefor, the directors shall cause the meeting to be held as soon thereafter as convenient. A shareholder's notice shall set forth: (a) as to each person whom the shareholder proposes to nominate for election or re-election as a director, all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors pursuant to Regulation 14A under the Securities Exchange Act of 1934, including such person's written consent to being named in the proxy statement as a nominee and to serving as a director if elected; (b) as to any other business that the shareholder proposes to bring before the meeting, a brief description of the business desired to be brought before the meeting, the reasons for conducting such business at the meeting and any material interest in such business of such shareholder and the beneficial owner, if any, on whose behalf the proposal is made and (c) as to the shareholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made (i) the name and address of such shareholder, as they appear on the Company's books, and of such beneficial owner, (ii) the number of shares of stock held of record and beneficially by such shareholder and such beneficial owner, (iii) the name in which all such shares of stock are registered on the stock transfer books of the Company, (iv) a representation that the shareholder intends to appear at the meeting in person or by proxy to submit the business specified in such notice, (v) a brief description of the business desired to be submitted to the annual meeting, including the complete text of any resolutions intended to be presented at the annual meeting, and the reasons for conducting such business at the annual meeting, (vi) any personal or other material interest of the shareholder in the business to be submitted, and (vii) all other information relating to the proposed business which may be required to be disclosed under applicable law. In addition, a shareholder seeking to submit such business at the meeting shall promptly provide any other information reasonably requested by the Company. The chairman of the meeting shall determine all matters relating to the efficient conduct of the meeting, including, but not limited to, the items of business, as well as the maintenance of order and decorum. The chairman shall, if the facts warrant, determine and declare that any putative business was not properly brought before the meeting in accordance with the procedures prescribed by this bylaw, in which case such business shall not be transacted. Notwithstanding the foregoing provisions of this bylaw, a shareholder who seeks to have any proposal included in the Company's proxy materials shall comply with the requirements of Rule 14a-8 under Regulation 14A of the Securities Exchange Act of 1934.

E-1-6

5.	Meetings of the shareholders may be held at such places either within or without the State of Delaware as the Board of Directors may determine.
6.	Any action required or permitted to be taken by the stockholders of the Company must be effected at a duly called annual or special meeting of such stockholders and may not be effected by any consent in writing by such stockholders. Except as otherwise required by law and subject to the rights under Article FOURTH of the Certificate of Incorporation of the Company of the holders of any class or series of stock having a preference over the Common Stock as to dividends or upon liquidation, special meetings of stockholders of the Company may be called only by the Chairman of the Board or by the Board of Directors pursuant to a resolution approved by a majority of the entire Board of Directors.
7.	Except as hereinafter provided or as may be otherwise required by law, notice of the place, date and hour of holding each annual and special meeting of the shareholders shall be in writing and shall be delivered personally or mailed in a postage prepaid envelope, not less than ten days before such meeting, to each person who appears on the books of the Company as a shareholder entitled to vote at such meeting, and to any shareholders who, by reason of any action proposed at such meeting, would be entitled to have their shares appraised if such action were taken. The notice of every special meeting, besides stating the time and place of such meeting, shall state briefly the purpose or purposes thereof; and no business other than that specified in such notice or germane thereto shall be transacted at the meeting, except with the unanimous consent in writing of the holders of record of all of the shares of the Company entitled to vote at such meeting. Notice of any meeting of shareholders shall not be required to be given to any shareholder entitled to participate in any action proposed to be taken at such meeting who shall attend such meeting in person or by proxy or who before or after any such meeting shall waive notice thereof in writing or by telegram, cable or wireless. Notice of any adjourned meeting need not be given.
8.	At all meetings of shareholders of the Company, except as otherwise provided by law, the holders of a majority in number of the outstanding shares of the Company, present in person or by proxy and entitled to vote thereat, shall constitute a quorum for the transaction of business. In the absence of a quorum the holders of a majority in number of the shares of stock so present or represented and entitled to vote may adjourn the meeting from time to time until a quorum is present. At any such adjourned meeting at which a quorum is present any business may be transacted which might have been transacted at the meeting as originally called.
9.	The Chairman of the Board shall preside as chairman at every meeting of shareholders. The Chairman of the Board may designate another officer

E-1-7

	of the Company or any shareholder to preside as chairman of a meeting of shareholders in place of the Chairman of the Board and in the absence of the Chairman of the Board and an officer or shareholder designated by the Chairman of the Board to preside as chairman of the meeting, the Board of Directors may designate an officer or shareholder to preside as chairman of the meeting. In the event the Chairman of the Board and the Board of Directors fail to so designate a chairman of the meeting the shareholders may designate an officer or shareholder as chairman. The Secretary shall act as secretary of the meeting, or, in the absence of the Secretary, the presiding officer shall appoint a secretary of the meeting.
10.	At each meeting of the shareholders every shareholder of record entitled to vote thereat shall be entitled to one vote for each share of the Company standing in that shareholder's name on the books of the Company provided that no share of stock shall be voted at any election of directors which shall have been transferred on the books of the Company later than the record date announced by the Board of Directors or fixed by operation of these bylaws The vote on shares may be given by the shareholder entitled thereto in person or by proxy duly appointed by an instrument in writing subscribed by such shareholder or that shareholder's duly authorized attorney (or in any other manner prescribed by the General Corporation Law of the State of Delaware), and delivered to the secretary of the meeting; provided, however, that no proxy shall be valid after the expiration of three years from the date of its execution unless the shareholder executing it shall have specified therein the length of time it is to continue in force, which shall be for some limited period. At all meetings of shareholders, a quorum being present, all matters, except as otherwise provided by law or by the Certificate of Incorporation of the Company or these bylaws, shall be decided by the holders of a majority in number of the shares of stock of the Company present in person or by proxy and entitled to vote. A share vote may be by ballot and each ballot shall state the name of the shareholder voting and the number of shares owned by that shareholder and shall be signed by such shareholder or by that shareholder's proxy. Except as otherwise required by law or by these bylaws all voting may be viva voce.
11.	The Secretary or other officer in charge of the stock ledger of the Company shall prepare and make at least ten days before every meeting of shareholders a complete list of the shareholders entitled to vote at the meeting arranged in alphabetical order and showing the address of each shareholder and the number of shares registered in the name of each shareholder. Such list shall be open to the examination of any shareholder for any purpose germane to the meeting during ordinary business hours for a period of at least ten days prior to the meeting either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or if not so specified at the place where the meeting is to be held. The list shall also be produced and kept

E-1-8

	at the time and place of the meeting during the whole time thereof and may be inspected by any shareholder who is present. The stock ledger shall be the only evidence as to who are the shareholders entitled to examine the stock ledger, the list required by this bylaw, or the books of the Company or to vote in person or by proxy at any meeting of shareholders.
12.	The Board of Directors shall present at each annual meeting, and when called for by vote of the shareholders at any special meeting of the shareholders, a full and clear statement of the business and condition of the Company.
13.	At all elections of directors and when otherwise required by law, the chairman of the meeting shall appoint two inspectors of election. The inspectors shall be responsible for receiving, tabulating and reporting the result of the votes taken. No director or candidate for the office of director shall be appointed such inspector. The chairman of the meeting shall open and close the polls.

DIRECTORS

14.		The property, business and affairs of the Company shall be managed by or under the direction of the Board of Directors, which may exercise all such powers of the Company and do all such lawful acts and things as are not by statute or by the Certificate of Incorporation or by these bylaws directed or required to be exercised or done by the shareholders.
15.	(a)	The Board of Directors shall consist of no more than twelve directors. Directors need not be shareholders. The number of directors may be determined by a majority vote of the entire Board of Directors.
	(b)	Except as otherwise provided by the Certificate of Incorporation, by these bylaws or by law, at each meeting of the shareholders for the election of directors at which a quorum shall be present, the persons receiving a plurality of the votes cast shall be directors. Such election shall be by ballot.
	(c)	The directors, other than those who may be elected by the holders of any class or series of stock having a preference over the Common Stock as to dividends or upon liquidation, shall be classified, with respect to the time for which they severally hold office, into three classes, as nearly equal in number as possible, as determined by the Board of Directors, one class to be originally elected for a term expiring at the annual

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	meeting of stockholders to be held in 1985, another class to be originally elected for a term expiring at the annual meeting of stockholders to be held in 1986, and another class to be originally elected for a term expiring at the annual meeting of stockholders to be held in 1987, with the directors of each class to hold office until their successors are elected and qualified. At each annual meeting of the stockholders, the successors of the class of directors whose term expires at that meeting shall be elected to hold office for a term expiring at the annual meeting of stockholders held in the third year following the year of their election. No decrease in the number of directors constituting the Board of Directors or change in the restrictions and qualifications for directors shall shorten the term of any incumbent director.
(d)	Except as otherwise provided in the Certificate of Incorporation or in these bylaws, each director shall continue in office until the expiration of his term of office and until a successor shall have been elected and shall have qualified, or until the director shall have resigned, or, in the case of a director who is an employee of the Company, until the director shall have resigned from employment with the Company or the director's employment shall have been terminated by the Company. In addition, a director who is not an employee of the Company or who is the Chief Executive Officer of the Company or a retired Chief Executive Officer of the Company shall retire from the position of director at the Annual Meeting following attainment of age 70; an employee who is a director of the Company (other than the Chief Executive Officer or a retired Chief Executive Officer) shall retire from the position of director on the effective date of the director's retirement as an employee of the Company. Any director of the Company may resign at any time by giving written notice to the Chairman of the Board or to the Secretary of the Company. Such resignation shall take effect at the time specified therein; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. Exceptions to the requirements for the retirement of a director may be made by the Board of Directors.
(e)	Subject to the rights under Article FOURTH of the Certificate of Incorporation of any class or series of stock having a preference over the Common Stock as to dividends or upon liquidation to elect directors under specified circumstances, any director or entire class of directors or the entire Board of Directors may be removed from office, with or without cause, only by the affirmative vote of the holders of at least 75% of the outstanding shares of stock of the Company entitled to vote generally in the election of directors, voting together as a single class.
(f)	Subject to the rights under Article FOURTH of the Certificate of Incorporation of the Company of the holders of any class or series of stock having a preference over the Common Stock as to dividends or upon liquidation to elect directors under specified circumstances, newly created directorships resulting from any increase in the number of directors and any vacancies on the Board of Directors resulting from death, resignation, retirement, disqualification, removal or other cause shall be filled only by

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	the affirmative vote of a majority of the remaining directors then in office, even though less than a quorum of the Board of Directors. Any director elected in accordance with the preceding sentence shall hold office for the remainder of the full term of the class of directors in which the new directorship was created or the vacancy occurred and until such director's successor shall have been elected and qualified.
16.	The directors may hold their meetings and keep the books of the Company at such place or places as they may from time to time determine.
17.	Regular meetings of the Board of Directors may be held at such time as may be fixed from time to time by resolution of the Board of Directors. Unless required by said resolution, notice of any such meeting need not be given.
18.	Special meetings of the Board of Directors shall be held whenever called by direction of the Chairman of the Board or any of three of the directors for the time being in office. Notice of each such special meeting shall be mailed, postage prepaid, to each director, addressed to the director at the director's residence or usual place of business, at least two days before the day on which the meeting is to be held, or shall be sent to the director at such place by telegraph, cable, or wireless, or be delivered personally or by telephone, not later than the day before the day on which the meeting is to be held. Every such notice shall state the time and place but, except as provided by these bylaws or by resolution of the Board of Directors, need not state the purposes of the meetings.
19.	Anything in these bylaws or in any resolution adopted by the Board of Directors to the contrary notwithstanding, notice of any meeting of the Board of Directors need not be given to any director, if, before or after any such meeting, notice thereof shall be waived by such director in writing or by telegraph, cable or wireless. Any meeting of the Board of Directors shall be a legal meeting without any notice having been given or regardless of the giving of any notice or the adoption of any resolution in reference thereto, if all the directors shall be present thereat or shall have so waived notice thereof. Any action required or permitted to be taken at any meeting of the Board of Directors may be taken without a meeting, if prior to such action a written consent thereto is signed by all members of the Board and such written consent is filed with the minutes of proceedings of the Board of Directors.
20.	Five of the directors in office at the time of any regular or special meeting of the Board of Directors shall constitute a quorum for the transaction of business at such meeting and except as may be otherwise specifically provided by statute or by the Certificate of Incorporation or by these bylaws, the act of a majority of the directors present at any such meeting

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at which a quorum is present shall be the act of the Board of Directors. In the absence of a quorum a majority of the directors present may adjourn any meeting from time to time until a quorum is present. Notice of any adjourned meeting need not be given. The directors shall act only as a board and the individual directors shall have no power as such.

21.		At each meeting of the Board of Directors the Chairman of the Board shall preside. The Chairman of the Board may designate another member of the Board of Directors to preside as chairman of a meeting in place of the Chairman of the Board, and in the absence of the Chairman of the Board and any member of the Board of Directors designated by the Chairman of the Board to preside as chairman of the meeting, a majority of the directors present may designate a member of the Board of Directors as chairman to preside at the meeting. The Secretary of the Company or, in the absence of the Secretary, a person appointed by the chairman of the meeting, shall act as secretary of the Board of Directors. The Board of Directors may adopt such rules and regulations for the conduct of their meetings and the management of the affairs of the Company as they shall deem proper and not inconsistent with the law or with these bylaws. At all meetings of the Board of Directors business shall be transacted in such order as the Board of Directors may determine.
22.		Each director shall be paid such fee, if any, for each meeting of the Board attended and/or such annual fee as shall be determined from time to time by resolution of the Board of Directors, provided that nothing herein contained shall be construed to prevent any director from serving the Company in any other capacity and receiving compensation therefor.
23.	(a)	Definitions. As used herein, the term "director" shall include each present and former director of the Company and the term "officer" shall include each present and former officer of the Company as such, and the terms "director" and "officer" shall also include each employee of the Company, who, at the Company's request, is serving or may have served as a director or officer of another corporation in which the Company owns directly or indirectly, shares of capital stock or of which it is a creditor. The term "officer" also includes each assistant or divisional officer. The term "expenses" shall include, but not be limited to, reasonable amounts for attorney's fees, costs, disbursements and other expenses and the amount or amounts of judgments, fines, penalties and other liabilities.
	(b)	Indemnification Granted. Each director and officer shall be and hereby is indemnified by the Company, to the full extent permitted by law, against:
		(i)	expenses incurred or paid by the director or officer in connection with any claim made against such director or officer, or any actual or threatened action, suit or proceeding (civil, criminal, administrative, investigative or other, including appeals and whether or not relating

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		to a date prior to the adoption of this bylaw) in which such director or officer may be involved as a party or otherwise, by reason of being or having been a director or officer of the Company, or of serving or having served at the request of the Company as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust or other enterprise, or by reason of any action taken or not taken by such director or officer in such capacity, and
	(ii)	the amount or amounts paid by the director or officer in settlement of any such claim, action, suit or proceeding or any judgment or order entered therein, however, notwithstanding anything to the contrary herein where a director or officer seeks indemnification in connection with a proceeding voluntarily initiated by such director or officer the right to indemnification granted hereunder shall be limited to proceedings where such director or officer has been wholly successful on the merits.
(c)	Miscellaneous.
	(i)	Expenses incurred and amounts paid in settlement with respect to any claim, action, suit or proceeding of the character described in paragraph (b)(i) above may be advanced by the Company prior to the final disposition thereof upon receipt of an undertaking by or on behalf of the recipient to repay such amounts as shall not ultimately be determined to be payable to such recipient under this bylaw.
	(ii)	The rights of indemnification herein provided for shall be severable, shall not be exclusive of other rights to which any director or officer now or hereafter may be entitled, shall continue as to a person who has ceased to be an indemnified person and shall inure to the benefit of the heirs, executors, administrators and other legal representatives of such a person.
	(iii)	The provisions of this bylaw shall be deemed to be a contract between the Company and each director or officer who serves in such capacity at any time while such bylaw is in effect.
	(iv)	The Board of Directors shall have power on behalf of the Company to grant indemnification to any person other than a director or officer to such extent as the Board in its discretion may from time to time determine.

COMMITTEES OF THE BOARD

24.
(a)
The Board of Directors may, by resolution or resolutions, passed by a majority of the whole Board of Directors, designate an Executive

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Committee (and may discontinue the same at any time) to consist of three or more of the Directors of the Company. The members shall be appointed by the Board of Directors and shall hold office during the pleasure of the Board of Directors; provided, however, that in the absence or disqualification of any member of the Executive Committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not the member or members constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member. The Executive Committee shall have and may exercise, during the intervals between the meetings of the Board of Directors, all of the powers of the Board of Directors in the management of the business and affairs of the Company (and shall have power to authorize the seal of the Company to be affixed to all papers which may require it), except that the Executive Committee shall have no power to (i) elect Directors to fill any vacancies or appoint any officers; (ii) fix the compensation of any officer or the compensation of any Director for serving on the Board of Directors or on any committee; (iii) declare any dividend or make any other distribution to the shareholders of the Company; (iv) submit to shareholders any action that needs shareholder authorization; (v) amend or repeal the bylaws or adopt any new bylaw; (vi) amend or repeal any resolution of the Board of Directors which by its terms shall not be so amendable or repealable; (vii) take any final action with respect to the acquisition or disposition of any business at a price in excess of $25,000,000.

(b)

The Board of Directors shall, by resolution or resolutions, passed by a majority of the whole Board of Directors designate an Audit Committee to consist of three or more non-employee directors of the Company free from any relationship that, in the opinion of the Board of Directors, would interfere with the exercise of independent judgment as a Committee member. Any director who is a former employee of the Company may not serve on the Audit Committee. The members of the Audit Committee shall be appointed by and hold office during the pleasure of the Board of Directors. A majority of the members of the Audit Committee will constitute a quorum for the transaction of business. It shall be the duty of the Audit Committee (i) to recommend to the Board of Directors a firm of independent accountants to perform the examination of the annual financial statements of the Company; (ii) to review with the independent accountants and with the Controller the proposed scope of the annual audit, past audit experience, the Company's internal audit program, recently completed internal audits and other matters bearing upon the scope of the audit; (iii) to review with the independent accountants and with the Controller significant matters revealed in the course of the audit of the annual financial statements of the Company; (iv) to review on a biennial basis that the Company's Standards of Business Conduct have been communicated by the Company to all key employees of the Company and its subsidiaries throughout the world with a direction that all

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		such key employees certify that they have read, understand and are not aware of any violation of the Standards of Business Conduct; (v) to review with the Controller any suggestions and recommendations of the independent accountants concerning the internal control standards and the accounting procedures of the Company; (vi) to meet on a regular basis with a representative or representatives of the Internal Audit Department of the Company and to review the Internal Audit Department's Reports of Operations; (vii) to report its activities and actions to the Board of Directors at least once each fiscal year.
	(c)	The Board of Directors may, by resolution or resolutions passed by a majority of the whole Board of Directors, designate such other committees as may be deemed advisable (and may discontinue the same at any time), to consist of two or more of the directors of the Company. The members shall be appointed by and shall hold office during the pleasure of the Board of Directors, and the Board of Directors shall prescribe the name or names of such committees, the number of their members and their duties and powers.
	(d)	Any action required or permitted to be taken at any meeting of any committee may be taken without a meeting, if prior to such action a written consent thereto is signed by all members of the committee and such written consent is filed with the minutes of proceedings of the committee.
25.		All committees shall keep written minutes of their proceedings and report the same to the Board of Directors when required.

OFFICERS

26.

The officers of the Company shall be a Chairman of the Board, a Vice Chairman of the Board, a President, two or more Vice Presidents (which shall include Senior Vice President, Executive Vice President and other Vice President titles), a Treasurer, a Secretary, a Controller, and such other officers as may be appointed in accordance with these bylaws. The Secretary and Treasurer may be the same person, or a Vice President may hold at the same time the office of Secretary, Treasurer, or Controller.

27.

The officers of the Company shall be chosen by the Board of Directors. Each officer shall hold office until a successor shall have been duly chosen and shall have qualified or until the death or retirement of the officer or until the officer shall resign or shall have been removed in the manner hereinafter provided. The Chairman of the Board and the Vice Chairman of the Board shall be chosen from among the directors.

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28.	The Board of Directors may appoint such other officers, committees or agents, as the business of the Company may require, including one or more Assistant Treasurers and one or more Assistant Secretaries, each of whom shall hold office for such period, and have such authority and perform such duties as are provided in these bylaws or as the Board of Directors may from time to time determine. The Board of Directors may delegate to any officer or committee the power to appoint and to remove any such subordinate officer or agent.
29.	Subject to the provisions of any written agreement, any officer may be removed, either with or without cause, by a vote of the majority of the whole Board of Directors at a regular meeting or a special meeting called for the purpose. Any officer, except an officer elected by the Board of Directors, may also be removed, with or without cause, by any committee or superior officer upon whom such power of removal may be conferred by the Board of Directors.
30.	Subject to the provisions of any written agreement, any officer may resign at any time by giving written notice to the Board of Directors, the Chairman of the Board or the Secretary of the Company. Any such resignation shall take effect at the time specified therein; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.
31.	Except as otherwise provided in these bylaws, in the event any officer shall be unable to perform the duties of the office held, whether by reason of absence, disability or otherwise, the Chairman of the Board may designate another officer of the Company to assume the duties of the officer who is unable to carry out the duties of the office; in the event the Chairman of the Board shall be absent and unable to perform the duties of the office of Chairman of the Board, the Chairman of the Board shall designate another officer to assume the duties of the Chairman of the Board; if another officer has not been designated by the Chairman of the Board to assume the duties of the Chairman of the Board, then the Board of Directors shall designate another officer to assume the duties of the Chairman of the Board; in the event the Chairman of the Board shall be disabled and unable to perform the duties of the office of Chairman of the Board, then the Board of Directors shall designate another officer to assume the duties of the Chairman of the Board. Any officer designated to assume the duties of another officer shall have all the powers of and be subject to all the restrictions imposed upon the officer whose duties have been assumed.
32.	A vacancy in any office because of death, resignation, removal, disqualification or any other cause shall be filled for the unexpired portion of the term in the manner prescribed by these bylaws for the regular appointment or election to such office.

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33.	The Chairman of the Board shall be the Chief Executive Officer of the Company and shall have general supervision of the business and operations of the Company, subject, however, to the control of the Board of Directors. The Chairman of the Board shall preside at all meetings of the shareholders and of the Board of Directors. The Chairman of the Board shall perform all of the duties usually incumbent upon a Chief Executive Officer of a corporation and incident to the office of the Chairman of the Board. The Chairman of the Board shall also have such powers and perform such duties as are assigned by these bylaws and shall have such other powers and perform such other duties, not inconsistent with these bylaws, as may from time to time be assigned by the Board of Directors.
34.	The Vice Chairman shall have such powers and perform such duties as are assigned by these bylaws and shall have such other powers and perform such other duties, not inconsistent with these bylaws, as from time to time may be assigned by the Board of Directors or the Chairman of the Board.
35.	The President shall have such powers and perform such duties as are assigned by these bylaws and shall have such other powers and perform such other duties, not inconsistent with these bylaws, as from time to time may be assigned by the Board of Directors or the Chairman of the Board.
36.	Each Vice President shall have such powers and perform such duties as are assigned by these bylaws and shall have such other powers and perform such other duties, not inconsistent with these bylaws, as from time to time may be assigned by the Board of Directors or the Chairman of the Board.
37.	The Treasurer shall have charge and custody of, and be responsible for, all funds of the Company. The Treasurer shall regularly enter or cause to be entered in books to be kept by the Treasurer or under the Treasurer's direction for this purpose full and adequate account of all moneys received or paid by the Treasurer for the account of the Company; the Treasurer shall exhibit such books of account and records to any of the directors of the Company at any time upon request at the office of the Company where such books and records shall be kept and shall render a detailed statement of these accounts and records to the Board of Directors as often as it shall require the same. The Treasurer shall also have such powers and perform such duties as are assigned the Treasurer by these bylaws and shall have such other powers and perform such other duties, not inconsistent with these bylaws, as from time to time may be assigned by the Board of Directors.

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38.	It shall be the duty of the Secretary to act as Secretary of all meetings of the Board of Directors and of the shareholders of the Company, and to keep the minutes of all such meetings in the proper book or books to be provided for that purpose; the Secretary shall see that all notices required to be given by or for the Company or the Board of Directors or any committee are duly given and served; the Secretary shall be custodian of the seal of the Company and shall affix the seal, or cause it to be affixed, to all documents, the execution of which on behalf of the Company, under its seal shall have been duly authorized in accordance with the provisions of these bylaws. The Secretary shall have charge of the share records and also of the other books, records, and papers of the Company relating to its organization and management as a corporation and shall see that the reports, statements and other documents required by law are properly kept and filed; and shall in general perform all the duties usually incident to the office of Secretary. The Secretary shall also have such powers and perform such duties as are assigned by these bylaws, and shall have such other powers and perform such other duties, not inconsistent with these bylaws, as from time to time may be assigned by the Board of Directors.
39.	The Controller shall perform the usual duties pertaining to the office of the Controller. The Controller shall have charge of the supervision of the accounting system of the Company, including the preparation and filing of all reports required by law to be made to any public authorities and officials, and shall also have such powers and perform such duties, not inconsistent with these bylaws, as from time to time may be assigned by the Board of Directors.
40.	The Assistant Treasurers and the Assistant Secretaries shall have such powers and perform such duties as are assigned to them by these bylaws and shall have such other powers and perform such other duties, not inconsistent with these bylaws, as from time to time may be assigned to them by the Treasurer or the Secretary, respectively, or by the Board of Directors.
41.	The compensation of the Chairman of the Board, Vice Chairman of the Board, President, Vice President, Treasurer, Secretary and Controller shall be fixed by the Board of Directors. The compensation of such other officers as may be appointed in accordance with the provisions of these bylaws may be fixed by the Chairman of the Board. No officer shall be prevented from receiving such compensation by reason of also being a director of the Company.

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CONTRACTS, CHECKS, DRAFTS, BANK ACCOUNTS, ETC.

42.	The Board of Directors except as in these bylaws otherwise provided, may authorize any officer or officers, agent or agents, in the name of and on behalf of the Company, to enter into any contract or execute and deliver any instrument, and such authority may be general or confined to specific instances; and, unless so authorized by the Board of Directors or expressly authorized by these bylaws, no officer or agent or employee shall have any power or authority to bind the Company by any contract or engagement or to pledge its credit or to render it pecuniarily liable for any purpose or to any amount.
43.	No loans shall be contracted on behalf of the Company and no negotiable paper shall be issued in its name unless authorized by resolution of the Board of Directors. When authorized by the Board of Directors, any officer or agent of the Company thereunto authorized may effect loans and advances at any time for the Company from any bank, trust company, or other institution, or from any firm, corporation or individual, and for such loans and advances may make, execute and deliver promissory notes, bonds, or other certificates or evidences of indebtedness of the Company and, when authorized so to do, may pledge, hypothecate or transfer any securities or other property of the Company as security for any such loans or advances. Such authority may be general or confined to specified instances.
44.	All checks, drafts and other orders for the payment of moneys out of the funds of the Company and all notes or other evidences of indebtedness of the Company shall be signed on behalf of the Company in such manner as shall from time to time be determined by resolution of the Board of Directors.
45.	All funds of the Company not otherwise employed shall be deposited from time to time to the credit of the Company in such banks, trust companies or other depositories as the Board of Directors may select or as may be selected by any officer or officers, agent or agents of the Company to whom such power may from time to time be delegated by the Board of Directors; and for the purpose of such deposit, the Chairman of the Board, the Vice Chairman of the Board, the President, a Vice President, the Treasurer, the Controller, the Secretary or any other officer or agent or employee of the Company to whom such power may be delegated by the Board of Directors, may endorse, assign and deliver checks, drafts and other orders for the payment of moneys which are payable to the order of the Company.

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CERTIFICATES AND TRANSFERS OF SHARES

46.	The shares of the Company shall be represented by certificates or shall be uncertificated. Each registered holder of shares, upon request to the Company, shall be provided with a certificate of stock, representing the number of shares owned by such holder. Certificates for shares of the Company shall be in such form as shall be approved by the Board of Directors. Such certificates shall be numbered and registered in the order in which they are issued and shall be signed by the Chairman of the Board, the Vice Chairman of the Board, the President or a Vice President and the Secretary or an Assistant Secretary or the Treasurer or an Assistant Treasurer. Where any such certificate is countersigned by a transfer agent, other than the Company or its employee, or by a registrar, other than the Company or its employee, any other signature on such certificate may be a facsimile, engraved, stamped or printed. In the event that an officer whose facsimile signature appears on such certificate ceases for any reason to hold the office indicated and the Company or its transfer agent has on hand a supply of share certificates bearing such officer's facsimile signature, such certificates may continue to be issued and registered until such supply is exhausted.
47.	Transfers of shares of the Company shall be made only on the books of the Company by the holder thereof, or by the holder's attorney thereunto duly authorized and on either the surrender of the certificate or certificates for such shares properly endorsed or upon receipt of proper transfer instructions from the registered owner of uncertificated shares. Every certificate surrendered to the Company shall be marked "Cancelled," with the date of cancellation, and no new certificate shall be issued in exchange therefor until the old certificate has been surrendered and cancelled, except as hereinafter provided. Uncertificated shares shall be cancelled and issuance of new equivalent uncertificated shares shall be made to the person entitled thereto and the transaction shall be recorded upon the books of the Company.
48.	The holder of any shares of the Company shall immediately notify the Company of any loss, destruction or mutilation of the certificate therefor and the Company may issue a new certificate in the place of any certificate theretofore issued by it alleged to have been lost, destroyed or mutilated. The Board of Directors may, in its discretion, as conditions to the issue of any such new certificate, require the owner of the lost or destroyed certificate or the owner's legal representatives to make proof satisfactory to the Board of Directors of the loss or destruction thereof and to give the Company a bond in such form, in such sum and with such surety or sureties as the Board of Directors may direct, to indemnify the Company against any claim that may be made against it on account of any such certificate so alleged to have been lost or destroyed.

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DETERMINATION OF RECORD DATE

49.	In order that the Company may determine the shareholders entitled to notice of or to vote at any meeting of shareholders or any adjournment thereof or entitled to receive payment of any dividend or other distribution or allotment of any rights or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix in advance a record date which shall not be more than 60 nor less than 10 days before the date of such meeting nor more than 60 days prior to any other action.
	If no record date is fixed:
	(i) The record date for determining shareholders entitled to notice of or to vote at a meeting of shareholders shall be at the close of business on the day next preceding the day on which notice is given, or if notice is waived, at the close of business on the day next preceding the day on which the meeting is held.
	(ii) The record date for determining shareholders for any other purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto.
	A determination of shareholders of record entitled to notice of or to vote at a meeting of shareholders shall apply to any adjournment of the meeting provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.

REGISTERED SHAREHOLDERS

50.
The Company shall be entitled to treat the holder of record of any share or shares of stock as the holder in fact thereof and, accordingly, shall not be bound to recognize any equitable or other claim to or interest in such share on the part of any other person, whether or not it shall have express or other notice thereof, save as expressly provided by the laws of Delaware.

FISCAL YEAR

51.
The fiscal year shall begin on the first day of January and end on the thirty-first day of December in each year.

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NOTICES

52.

Whenever under the provision of these bylaws notice is required to be given to any director or shareholder, it shall be construed to mean personal notice, but such notice may be given in writing, by mail, by depositing the same in a post office or letter box, in a postpaid sealed wrapper, addressed to such director or shareholder at such address as appears on the books of the Company, or, in default of other address, to such director or shareholder, at the General Post Office in the City of Wilmington, Delaware, and such notice shall be deemed to be given at the time when the same shall be thus mailed.

53.

Any notice required to be given under these bylaws may be waived in writing, signed by the person or persons entitled to said notice, whether before or after the time stated therein.

AMENDMENTS

54.
Except as otherwise provided in the Certificate of Incorporation of the Company and consistent therewith, these bylaws may be altered, amended or repealed or new bylaws may be made by the affirmative vote of the holders of record of a majority of the shares of the Company entitled to vote, at any annual or special meeting, provided that such proposed action shall be stated in the notice of such meeting, or, by a vote of the majority of the whole Board of Directors, at any regular meeting without notice, or at any special meeting provided that notice of such proposed action shall be stated in the notice of such special meeting.

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I N D E X
BYLAWS of BRISTOL-MYERS SQUIBB COMPANY OFFICES
SEAL
MEETINGS OF SHAREHOLDERS
DIRECTORS
COMMITTEES OF THE BOARD
OFFICERS
CONTRACTS, CHECKS, DRAFTS, BANK ACCOUNTS, ETC.
CERTIFICATES AND TRANSFERS OF SHARES
DETERMINATION OF RECORD DATE
REGISTERED SHAREHOLDERS
FISCAL YEAR
NOTICES
AMENDMENTS

EX-10.(H)

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Exhibit 10h

BENEFIT EQUALIZATION PLAN

OF

BRISTOL-MYERS SQUIBB COMPANY AND ITS SUBSIDIARY OR
AFFILIATED CORPORATIONS PARTICIPATING IN THE
BRISTOL-MYERS SQUIBB COMPANY SAVINGS AND INVESTMENT PROGRAM

(as amended and restated effective as of January 1, 1996)

I.

The purpose of this plan is to provide benefits for certain employees participating in the Bristol-Myers Squibb Company Savings and Investment Program ("Savings and Investment Program" or "Program") whose funded benefits are or will be limited by application of the Employee Retirement Income Security Act of 1974, as amended ("ERISA") and the Internal Revenue Code of 1986, as amended (The "Code"). The Plan is intended to be an "excess benefit plan" as that term is defined in Section 3 (36) of ERISA with respect to those participants whose benefits under the Program have been limited by Section 415 of the Code, and a "top hat" plan meeting the requirements of Sections 201 (2), 301 (a) (3), 401 (a) (1) and 4021 (b) (6) of ERISA with respect to those participants whose benefits under the Program have been limited by Section 401 (a) (17) of the Code. This plan is a continuation and successor plan to the Bristol-Myers Company and Its Subsidiary of Affiliated Corporations Participating in the Bristol-Myers Company Savings and Investment Program, as in effect on January 1, 1991 and as amended thereafter (the "Prior Plan"). All amounts accrued under the Prior Plan continue to be accrued under this plan.

II.

Administration of the Plan

The Savings Plan Committee (the "Committee") appointed by the Board of Directors of Bristol-Myers Squibb Company (the "Company") to administer the Savings and Investment Program shall also administer this Plan. The Committee shall have full authority to determine all questions arising in connection with the Plan, including its interpretation, may adopt procedural rules, and may employ and rely on such legal counsel, such actuaries, such accountants and such agents as it may deem advisable to assist in the administration of the Plan. Decisions of the Committee shall be conclusive and binding on all persons.

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III.

Participation in the Plan

Each participant in the Savings and Investment Program who is employed by a corporation participating in the Program (hereinafter referred to as a "participating employer" which term also includes the Company) shall be eligible to participate in this Plan whenever (a) the allocation to his account under the Savings and Investment Program, as from time to time in effect, would exceed the limitations on benefits and contributions imposed by Section 415 of the Code calculated from and after September 2, 1974 or (b) amounts of his compensation would be excluded from his "Annual Benefit Salary or Wages" determined under the Program by reason of the application of Section 401 (a) (17) of the Code.

IV.

Equalization Benefits Related to the Savings and Investment Program

A.

A participant shall be entitled to equalization benefits under this Plan only for those plan years in which (a) he had elected to have a percentage of his Annual Benefit Salary or Wages contributed on his behalf to the Program and (b) he also has in effect an election, made prior to the year with respect to which such contributions relate, to defer a like percentage of his Annual Benefit Salary or Wages and to have such amount credited to this Plan in the manner described in paragraphs B and C of this Article IV.

B.

The participating employer that employs a participant meeting the requirements of paragraph A for a plan year shall credit, or shall cause to be credited, a book account to record the amount of such participant's Annual Benefit Salary or Wages that he had elected to have credited to this Plan, commencing at the time such participant is precluded from having additional contributions made to his accounts under the Savings and Investment Program because of this limitations of Section 415 of the Code, and continuing through the end of the plan year. Such participating employer shall also credit, or cause to be credited, a book account to record the amount of "Employing Company contributions", if any, that would have been contributed on such participant's behalf for such plan year to the Program pursuant to the terms of the Program had the amount of the participant's Annual Benefit Salary or Wages credited pursuant to this paragraph B been instead contributed to the Program.

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C.

The participating employer that employs a participant meeting the requirements of paragraph A for a plan year shall also credit, or cause to be credited, a separate book account to record the amount of such participant's Annual Benefit Salary or Wages that he has elected to have credited to this Plan, commencing at the time such participant is precluded from having additional contributions made to his accounts under the Savings and Investment Program because of the limitations of Section 401 (a) (17) of the Code, and continuing until the end of the plan year or, if sooner, the time amounts begin to be credited to the participant's book account under the Plan year. No participant may earn credits under both this paragraph C and under paragraph B at the same time; whenever possible, credits shall be made pursuant to paragraph B prior to this paragraph C. Such participating employer shall also credit, or cause to be credited, a book account to record the amount of "Employing Company contributions", if any, that would have been contributed on such participant's behalf for such plan year to the Program pursuant to the terms of the Program had the amount of the participant's Annual Benefit Salary or Wages credited pursuant to this paragraph C been instead contributed to the Program.



D.

The election to have amounts credited to the Plan may be suspended at the participant's option during any period of time that the participant establishes to the satisfaction of the Committee that he is undergoing a financial hardship as defined in Article VI of this Plan.



E.

Prior to October 1, 1994, each participant shall be given the opportunity to elect to have credits to his account made on or after October 1, 1994 deemed to be invested in any one or a combination of the investment funds being offered under the Savings and Investment Program on and after October 1, 1994, (other than the Company Stock Fund) in 1% increments. In the event a participant fails to make such an election, all such credits shall be deemed to be invested in the investment funds as determined by the Committee to be most closely resembling the investments funds the participant had elected with respect to the credits to Account made prior to October 1, 1994; provided, however, that where a participant's existing investment directions had allocated one-third (33¹/3%) of his Account to each of the three investment funds in existence on September 30, 1994 (other than the Company Stock Fund), the equivalent allocation shall be deemed to be 33%, 33% and 34%, with 34% allocated to the least volatile investment fund (as determined by the Committee) which most closely resembles the least volatile investment fund which the participant had elected prior to October 1, 1994.

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Effective as of the close of business on September 30, 1994 (or as soon as practicable thereafter), each participant's book account shall be revalued as if the credits to his account representing a type of investment under the Plan was reduced to cash (other than any credits representing a deemed investment in the Fixed Income Fund) and reinvested in such investment fund or funds being offered on and after October 1, 1994 under the Savings and Investment Program (other than the Company Stock Fund) as determined by the Committee to most closely resemble the respective investment fund in which such credits were deemed invested prior to October 1, 1994.

On and after October 1, 1994, on any business day the participant may, pursuant to telephonic notification with the administrative agent of the Committee (the "Administrative Agent"), (i) elect to have future credits deemed to be invested, in 1% increments, among such funds established under the Savings and Investment Program, other then the Company Stock Fund, effective as of the first day of the next payroll period (or as soon as practicable thereafter) and (ii) elect that the credits to his account under this Article IV representing any type of investment under this Article IV representing any type of investment under the Plan be deemed to be reduced to cash (in 1% increments) and that such deemed cash be invested in such other funds which the participant shall designate in such election, effective as of the next business day (or as soon as practicable thereafter). Notwithstanding the foregoing, no election under clause (ii) above with respect to credits accrued prior to October 1, 1994 will be accepted during the period beginning on September 27, 1994 and ending on or about November 30, 1994 (or as soon as practicable thereafter). Any investment election given by a participant shall continue in effect until changed by the participant. To the extent a participant makes no election, all such credits shall be deemed to have been invested in the same manner and in the same proportion as elected by the participant with respect to allotments credited to his account under the Savings and Investment Program (and any changes in such investment elections), except that any election (or change in election) to invest in the Company Stock Fund shall not be honored and such credits shall be deemed invested in equal amounts in such other funds unless the participant has not elected to have any amounts invested in such other funds, in which case such credits shall be deemed invested in the Fixed Income Fund established under such Program. Such book accounts shall be revalued each business day as if they had been so invested.

For purposes of this Plan, "telephonic notification" shall include any form of communication acceptable to the Administrative Agent, including, telephone, telegraph, satellite or other wireless communication. A "business day" shall mean any day the New York Stock Exchange is open for business.

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F.

Each participating employer shall distribute to each participant in this Plan employed by it for whom it maintains book accounts or his beneficiary designated under this Plan or, if no such designation is made, under the Savings and Investment Program, upon the termination of employment of such participant an amount in cash equal to (i) the value of his book accounts attributable to credits to his account respecting allotments and deemed earnings and appreciation thereon and (ii) the same percentage of the value of his book accounts attributable to the deemed contributions of the participating employer as the percentage of his account balance under the Savings and Investment Program which is vested at the time of termination of his employment less (iii) the amount of any distribution for financial hardship made pursuant to Section VI (the participant's "Account Balance").

Distribution to participants terminating employment on or after April 1, 1995, who, as of the date of termination, have not attained age 55 with 10 or more years of service, shall be paid in the form of a single lump sum payment.

Distribution to participants terminating employment on or after April 1, 1995, who as of the date of termination, have attained age 55 with 10 or more years of service, shall be paid in the form of a single lump sum payment unless, in any calendar year prior to the participant's termination of employment, but not less than 90 days prior to such termination, such participant irrevocably elects, in writing, to receive such distribution at a later date or in annual installments over a period of 2 to 15 years consisting of an amount approximately equal to his Account balance divided by the number of installments then remaining (including the installment in question) each year payable commencing as of the end of the month designated for commencement of such payment and as of the month designated for commencement of such payment and as of the end of the same month in each year thereafter until payment of all such installments is made (the "Installment Method").

Distribution to participants whose employment terminated prior to April, 1995, shall be paid in the same form and at the same time as the participant's benefit under the Savings and Investment Program is payable (utilizing, if applicable, the same actuarial assumptions used to compute the participant's Savings and Investment Program benefit payments or such other assumptions as may be determined by the Committee from time to time); provided, however, that such form of distribution is either a lump sum payment or the Installment Method, which election must be made in the calendar year prior to, but not less than 90 days prior to, the date such lump sum is to be paid or such installments shall commence.

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Notwithstanding the foregoing, where the participant's Account Balance on the date of his termination of employment (if termination occurs on or after April 1, 1995), or on the date of distribution as elected by the participant (if termination occurs prior to April 1, 1995) does not exceed $15,000, the participant or his beneficiary shall receive payment of such Account Balance in the form of a single lump sum payment.¹

V.

Designation of Beneficiaries in the Event of Death

A participant may designate a beneficiary or beneficiaries to receive all or part of the amount in his account in case of his death if such beneficiary or beneficiaries shall be living at the time of his death; provided, however, that if the participant has elected to have his benefit under the Savings and Investment Program paid in the form of a "qualified joint and survivor annuity", then the participant's beneficiary shall be his spouse. A participant may, subject to the preceding sentence, change or revoke a designation of beneficiary and such designation, change or revocation shall be on a form to be provided for the purpose and shall be signed by the participant and delivered to his employing corporation prior to his death. In case of the death of the participant, the amount in his account with respect to which a designation of beneficiary has been made (to the extent it is valid and enforceable under applicable law) shall be distributed in accordance with this Plan to the surviving designated beneficiary or beneficiaries. The amount in the participant's account distributable upon death and not subject to such a designation, or if no beneficiary shall be living at the time of the participant's death, shall be distributed following his death to the person or persons in the first of the following classes of successive preference:

1.

The participant's surviving spouse.



2.

To such one or more of the participant's surviving children as the Committee shall determine and in such proportions as the Committee determines.



3.

The participant's surviving parents, equally.



4.

To such one or more of the participant's surviving brothers and in such proportions as the Committee determines.



5.

The participant's executors or administrators.

Payment to one or more of such persons shall completely discharge the Plan with respect to the amount so paid. Notwithstanding the above, if the participant has designated a beneficiary under the Savings and Investment Program shall be

¹

Subsection F is effective 4/1/94.

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deemed a designation for purposes of this Plan unless a separate beneficiary designation is made under this Plan in accordance with the foregoing.

VI.

Distribution for Financial Hardship

If a participant shall establish to the satisfaction of the Committee in accordance with principles and procedures established by the Committee which are applicable to all persons similarly situated that a withdrawal to be made by him pursuant to this Article VI is to be made by reason of an extreme financial hardship, the participating employer shall distribute to the participant the amount necessary to meet such financial hardship but not more than the value credited to his book accounts under Article IV hereof.

VII.

Miscellaneous

This Plan may be terminated at any time by the Board of Directors of the Company, in which event the rights of participants to their book accounts established under this plan shall become non-forfeitable. The Company or any participating employer may terminate this Plan with respect to its employees participating in the Saving and Investment Program, in which event the rights of participants to their book account established under this Plan and payable by such terminating corporation shall become non-forfeitable.

If the Plan is terminated, no distribution shall be made to a participant or beneficiary, which is attributable to the termination during the 90-day period following such termination. Thereafter, providing the Company is not subject to an insolvency or bankruptcy proceeding, all amounts then accrued on behalf of a participant shall be distributed to him (or his beneficiary), within 60 days after the expiration of such 90-day period. If the Company is subject to an insolvency or bankruptcy proceeding, distribution of such amounts shall be suspended to the pendency of such proceeding.

No right to payment or any other interest under this Plan may be alienated, sold, transferred, pledged, assigned, or made subject to attachment, execution, or levy of any kind.

Nothing in this Plan shall be construed as giving any employee the right to be retained in the employ of any participating employer. Each participating employer in the Plan expressly reserves the right to dismiss any employee at any time without regard to the effect, which such dismissal might have upon him under the Plan.

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This Plan may be amended at any time by the Board of Directors of the Company, except that no such amendment shall deprive any participant of the amount then credited to his book account established under this Plan.

Benefits payable under this Plan shall not be funded and shall be made out of the general funds of the participating employers or any grantor trust established by the Company for this purpose. The participating employers shall not be required to segregate any contributions made by participants under this Plan. They shall become a part of the general funds of the participating employers. To the extent that a grantor trust if established by the Company, the Committee may from time to time reserve unto itself the right to vote any shares of equity securities or mutual funds held in any investment fund thereunder or may permit such other Committee, or Investment Manager or Managers as it may designate to exercise such responsibility.

This Plan shall be construed, administered and enforced according to the substantive internal laws (and not the conflict of laws provisions) of the State of New York.

VIII. Effective Date

This amended and restated Plan shall be effective as of January 1, 1996 upon its approval by a proper officer of the Company as authorized by the Bristol-Myers Squibb Company Savings Plan Committee at a meeting held on the 29^th of November, 1994.

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BENEFIT EQUALIZATION PLAN OF BRISTOL-MYERS SQUIBB COMPANY AND ITS SUBSIDIARY OR AFFILIATED CORPORATIONS PARTICIPATING IN THE BRISTOL-MYERS SQUIBB COMPANY SAVINGS AND INVESTMENT PROGRAM (as amended and restated effective as of January 1, 1996)

EX-21

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Exhibit 21

BRISTOL-MYERS SQUIBB COMPANY

SUBSIDIARY LIST

2309 Realty Corporation

3130827 CANADA INC.

345 Park Corporation

77 Wilson St., Corp.

A.G. Medical Services, P.A.

Alive & Well, Inc.

Allard Laboratories, Inc.

Allard Labs Acquisition LLC

AMCARE Limited

Apothecon BV

Apothecon Farmaceutica Ltda.

Apothecon, Inc.

Apothecon, S.A.

Astel Laboratoires S.A.R.L..

B-MS GeneRx

B. L. Pharmaceuticals (Proprietary) Limited

Blisa Acquisition LLC

Blisa, Inc.

BMS Antilles

BMS Holdings

BMS Investco SAS

BMS Music Company

BMS Pharmaceutical Korea Limited

BMS-Generiques SAS

BMSF SAS

BMSIC Pharma Handels GmbH & Co. KG

BMSIC Pharma-Handels Verwaltungs GmbH

Boclaro Inc.

Bristol (Iran) S.A.

Bristol Arzneimittel G.m.b.H.

Bristol Caribbean, Inc.

Bristol Foundation

Bristol Iran Private Company Limited

Bristol Laboratories Corporation

Bristol Laboratories Inc.

Bristol Laboratories International, S.A.

Bristol Laboratories Medical Information Systems Inc.

Bristol Pharmaceutical Information Center, S.A.

Bristol Pharmaceuticals K.K.

Bristol-Myers (Bangladesh) Inc.

Bristol-Myers (Japan) Limited

Bristol-Myers (Private) Limited

Bristol-Myers (Zaire) Ltd.

Bristol-Myers Award Superannuation Pty. Ltd.

Bristol-Myers Company (2001) Limited

Bristol-Myers Lion Ltd.

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Bristol-Myers Middle East S.A.L.

Bristol-Myers Nederland Inc.

Bristol-Myers Oncology Therapeutic Network, Inc.

Bristol-Myers Overseas Corporation

Bristol-Myers Overseas Corporation (Guam Branch)

Bristol-Myers Pakistan (Pvt.) Limited

Bristol-Myers S.A.

Bristol-Myers Squibb (China) Investment Co., Ltd.

Bristol-Myers Squibb (Hong Kong) Limited

Bristol-Myers Squibb (Israel) Ltd.

Bristol-Myers Squibb (Malaysia) Sendirian Berhad

Bristol-Myers Squibb (N.Z.) Limited

Bristol-Myers Squibb (Phil.) Inc.

Bristol-Myers Squibb (Proprietary) Limited

Bristol-Myers Squibb (Russia)

Bristol-Myers Squibb (Shanghai) Trading Co. Ltd.

Bristol-Myers Squibb (Singapore) Pte. Limited

Bristol-Myers Squibb (Taiwan) Ltd.

Bristol-Myers Squibb (Thailand) Ltd.

Bristol-Myers Squibb (West Indies) Ltd.

Bristol-Myers Squibb A.E.B.E.

Bristol-Myers Squibb A.G.

Bristol-Myers Squibb Aktiebolag

Bristol-Myers Squibb Argentina, S.A.*

Bristol-Myers Squibb Asia/Pacific, Inc. (Singapore—Branch)

Bristol-Myers Squibb Auslandsbeteiligungs Holding, GmbH

Bristol-Myers Squibb Australia Pty. Ltd.

Bristol-Myers Squibb B.V.

Bristol-Myers Squibb Barceloneta Holdings, L.L.C.

Bristol-Myers Squibb Belgium, S.A.

Bristol-Myers Squibb Biologics Company

Bristol-Myers Squibb Brasil, S.A.

Bristol-Myers Squibb Bulgaria EOOD

Bristol-Myers Squibb Business Services Limited

Bristol-Myers Squibb Canada Inc.

Bristol-Myers Squibb Caribbean Company

Bristol-Myers Squibb Caribbean Holdings, L.L.C.

Bristol-Myers Squibb Company

Bristol-Myers Squibb de Colombia S.A.

Bristol-Myers Squibb de Costa Rica, S.A.

Bristol-Myers Squibb de Guatemala, S. A.

Bristol-Myers Squibb de Mexico, S de R.L. de C.V.

Bristol-Myers Squibb de Venezuela, S.A.

Bristol-Myers Squibb Delta Holdings, L.L.C.

Bristol-Myers Squibb Dominicana, S.A.

Bristol-Myers Squibb Ecuador C.A.

Bristol-Myers Squibb Eesti Aktsiaselts

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Bristol-Myers Squibb EOOD

Bristol-Myers Squibb Europa PLC

Bristol-Myers Squibb Europe GIE

Bristol-Myers Squibb Europe Headquarters SARL

Bristol-Myers Squibb Export S.A. (Slovak Republic)

Bristol-Myers Squibb Export SA

Bristol-Myers Squibb Farmaceutica Portuguesa Limitada

Bristol-Myers Squibb Finance Company

Bristol-Myers Squibb Finance Ltd.

Bristol-Myers Squibb Foreign Sales Corporation

Bristol-Myers Squibb G.m.b.H.

Bristol-Myers Squibb Ges. m.b.H.

Bristol-Myers Squibb Global Properties Ltd.

Bristol-Myers Squibb Holding Germany GmbH

Bristol-Myers Squibb Holdings B.V.

Bristol-Myers Squibb Holdings Limited

Bristol-Myers Squibb Holdings Limited (Ireland—Branch)

Bristol-Myers Squibb Holdings Limited (Kenya—Branch)

Bristol-Myers Squibb Holdings Pharma, Ltd.

Bristol-Myers Squibb Hungary Kft.

Bristol-Myers Squibb Ilaclari Limited Sirketi

Bristol-Myers Squibb Ilaclari, Inc.

Bristol-Myers Squibb Ilaclari, Inc. (Turkey—Branch)

Bristol-Myers Squibb International Company

Bristol-Myers Squibb International Corporation

Bristol-Myers Squibb International Corporation (Belgium—Branch)

Bristol-Myers Squibb International Corporation (Egypt—Branch)

Bristol-Myers Squibb International Corporation (Spain—Branch)

Bristol-Myers Squibb International Corporation(BMSICII)

Bristol-Myers Squibb International Insurance Company

Bristol-Myers Squibb International Limited

Bristol-Myers Squibb International S.r.L.

Bristol-Myers Squibb Investco, Inc.

Bristol-Myers Squibb Italia Finance SRL

Bristol-Myers Squibb K.K.

Bristol-Myers Squibb Korea Ltd.

Bristol-Myers Squibb Laboratories Company

Bristol-Myers Squibb Manufacturing

Bristol-Myers Squibb Manufacturing Company

Bristol-Myers Squibb Manufacturing Holdings, L.L.C.

Bristol-Myers Squibb MEA GmbH

Bristol-Myers Squibb MEA GmbH (Saudia Arabia-Branch)

Bristol-Myers Squibb MEA GmbH S.A.(Egypt—Branch)

Bristol-Myers Squibb Medical Imaging, Inc.

Bristol-Myers Squibb Norway Ltd.

Bristol-Myers Squibb Pakistan (Pvt.) Ltd.

Bristol-Myers Squibb Peru S.A.

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Bristol-Myers Squibb Pharma (UK) Limited

Bristol-Myers Squibb Pharma Company

Bristol-Myers Squibb Pharma France SAS

Bristol-Myers Squibb Pharma GmbH

Bristol-Myers Squibb Pharma Holding Company, LLC

Bristol-Myers Squibb Pharma Italia Srl

Bristol-Myers Squibb Pharma Ventures Corporation

Bristol-Myers Squibb Pharmaceuticals Limited (England)

Bristol-Myers Squibb Pharmaceuticals Limited (Ireland)

Bristol-Myers Squibb Products S.A.

Bristol-Myers Squibb Puerto Rico, Inc.

Bristol-Myers Squibb Radiopharmaceuticals, Inc.

Bristol-Myers Squibb Research Foundation Africa

Bristol-Myers Squibb S.p.A.

Bristol-Myers Squibb Sankyo Pharmaceuticals Co., Ltd.

Bristol-Myers Squibb Sanofi-Synthelabo Partnership

Bristol-Myers Squibb Securitization L.P.

Bristol-Myers Squibb Service Ltd.

Bristol-Myers Squibb Slovakia s.r.o.

Bristol-Myers Squibb Sp. z o.o.

Bristol-Myers Squibb Spol. s r.o.

Bristol-Myers Squibb Superannuation Plan Pty. Ltd.

Bristol-Myers Squibb UPSA

Bristol-Myers Squibb UPSA Tunisie

Bristol-Myers Squibb Zentrum uer Forschung und Fortbildung Im Gesundheitswesen G.m.b.H.

Bristol-Myers Squibb, S.A.

Cancer Research, Inc.

Centre de Recherche en Biologie Moleculaire GIE

CJG Partners, L.P.

Clairol (China) Ltd.

Comercializadora RPM, S. De R.L. De C.V.

Compania Bristol-Myers Squibb de Centro America (El Salvador Branch)

Compania Bristol-Myers Squibb de Centro America (Honduras Branch)

Compania Bristol-Myers Squibb de Centro America (Nicaragua Branch)

Compania Bristol-Myers Squibb de Centro America (Panama Branch)

Convatec Limited

ConvaTec Praha spol. s r.o.

CONVATEC SAS

Convatec Spot s r.o.

Convatec Vertriebs G.m.b.H.

Convatec, S.A.

CRBM GIE

E. R. Squibb & Sons de Venezuela, C.A.

E. R. Squibb & Sons Inter-American (Chile—Branch)

E. R. Squibb & Sons Inter-American Corporation

E. R. Squibb & Sons Inter-American Corporation (Colombia—Branch)

E. R. Squibb & Sons Inter-American Corporation (PRico—Branch)

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E. R. Squibb & Sons Limited

E. R. Squibb & Sons, L.L.C.

Elektrochemische Ges.Hirschfelde m.b.H.

ESS Partners, L.P.

EWI Corporation

G.I.E. Centre de Recherche de Biologie Moleculaire

G.I.E. Institut de Recherche Squibb

Grove Insurance Company Ltd.

Grove Limited

Grove Products (Far East) Limited

Grove Products (Far East) Limited (India—Branch)

Heyden Farmaceutica Portugesa Limitada

Iris Acquisition Corp.

JG Partners, L.P.

Kingsdown Medical Consultants Limited

Laboratoire Oberlin

Laboratoires Convatec S.A.

Laboratoires Guieu France S.a.r.l.

Laboratoires UPSA, SAS

Lawrence Laboratories

Linson Investments Limited

Linson Pharma Inc.

Listo B.V.

Little Sycamore Limited

Mead Johnson & Company

Mead Johnson (Guangzhou) Ltd.

Mead Johnson (Manufacturing) Jamaica Limited

Mead Johnson A.E.B.E.

Mead Johnson B.V.

Mead Johnson de Mexico, S. de R.L. de C.V.

Mead Johnson Farmaceutica Limitada

Mead Johnson International Limited (Argentine—Branch)

Mead Johnson International Limited (Canada)

Mead Johnson International Limited (Colombia—Branch)

Mead Johnson Jamaica Ltd.

Mead Johnson Limited

Mead Johnson Nutritional GmbH

Mead Johnson Properties, Inc.

MEC Subsidiary Corporation

Medical Engineering Corporation

Monarch Crown Corporation

NOVACARE Limited

O.o.o. Bristol-Myers Squibb

O.o.o. Bristol-Myers Squibb Manufacturing

Oncogen Limited Partnership

Oncology Therapeutics Network Automated Technologies, Inc.

Oncology Therapeutics Network Corporation

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Oncology Therapeutics Network Joint Venture, L.P.

OTN Funding Corp.

OTN Online, Inc.

OTN Parent Corp.

Oy Bristol-Myers Squibb (Finland) AB

P. T. Squibb Indonesia Tbk

Pharmagen

Pharmavit Praha spol. s r.o.

Pharmavit Rt.

PRB Partners, L.P.

Princeton Pharmaceuticals, S.A.

PT Mead Johnson Indonesia

Recherche et Propriete Industrielle

Route 22 Real Estate Holding Corporation

Salorpharma G.m.b.H.

Sanofi Pharma Bristol-Myers Squibb SNC

Schuppert Meubelen Holten B.V.

Sino-American Shanghai Squibb Pharmaceuticals Limited

Societe Francaise de Complements Alimentaires(S.O.F.C.A.)

SOLER SCI

Sphinx Holdings Company, Inc.

Squibb (Far East) Limited

Squibb (Far East) Limited (Taiwan—Branch)

Squibb (Nigeria) Limited

Squibb (Thailand) Limited

Squibb ApS

Squibb Convatec Medical Products Co. Ltd.

Squibb Development Limited

Squibb Farmaceutica Portuguesa, Limitada

Squibb Industria Farmaceutica, S.A.

Squibb Manufacturing, Inc.

Squibb Middle East S.A. (Egypt—Branch)

Squibb Middle East S.A. (Jordan—Branch)

Squibb Middle East S.A. (Panama)

Squibb Overseas Investments, Inc.

Squibb Pacific Limited

Squibb Pharma G.m.b.H.

Squibb Properties, Inc.

Squibb Surgicare Limited

Squibb-von Heyden G.m.b.H.

Stamford Holdings B.V.

Swords Holdings I, L.L.C.

Swords Holdings II, L.L.C.

Swords Laboratories

T S V Corporation

Tallosa, S.A.

The B-M Group (Proprietary) Limited

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Unterstuetzungskasse Bristol-Myers Squibb G.m.b.H.

UPSA CONSEIL

UPSA S.p.A.

Upsamedica LDA

Von Heyden Pharma G.m.b.H.

Wallingford Research, Inc.

Westwood-Intrafin, S.A.

Westwood-Squibb Holdings, Inc.

Westwood-Squibb Pharmaceuticals, Inc.

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BRISTOL-MYERS SQUIBB COMPANY SUBSIDIARY LIST

EX-23

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Exhibit 23

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (Nos. 33-30856, 33-38411, 33-38587, 33-44788, 333-47403, 33-52691, 33-30756-02, 33-58187, 333-02873 and 333-65424), Form S-4 (No. 333-09519) and Form S-3 (Nos. 33-33682, 33-62496, 333-49227 and 333-65444) of Bristol-Myers Squibb Company of our report dated January 24, 2002, except as to the fifth paragraph under the BUSPAR* Litigation discussion in Note 18 which is as of February 14, 2002 and as to the second paragraph in Note 7 which is as of March 5, 2002 and as to the second paragraph under the VANLEV* Litigation discussion in Note 18 which is as of March 25, 2002, relating to the financial statements and financial statement schedule, which appears in this Form 10-K.

/s/ PricewaterhouseCoopers LLP

PRICEWATERHOUSECOOPERS LLP
New York, New York
April 1, 2002

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CONSENT OF INDEPENDENT ACCOUNTANTS