EX-99.3 4 dex993.htm THE COMPANY'S UNAUDITED PRO FORMA FINANCIAL INFORMATION The Company's Unaudited Pro Forma Financial Information

Exhibit 99.3

BRISTOL-MYERS SQUIBB COMPANY

UNAUDITED PRO FORMA

CONSOLIDATED FINANCIAL STATEMENTS

The following unaudited pro forma consolidated financial statements of Bristol-Myers Squibb Company (the “Company”) as of and for the nine months ended September 30, 2009 and for the years ended December 31, 2008, 2007 and 2006 give effect to the Company’s disposition of the 170,000,000 shares of Mead Johnson Nutrition Company (“Mead Johnson”) common stock the Company owned upon consummation of the split-off the Company commenced on November 16, 2009 and completed on December 23, 2009. Under the terms of the split-off, the Company exchanged all of its shares of Mead Johnson common stock for 269,285,601 shares of Company common stock. For purposes of the unaudited pro forma condensed consolidated balance sheet we assume that the split-off occurred as of September 30, 2009, and for the unaudited pro forma consolidated statements of operations for the years ended December 31, 2008, 2007 and 2006 and the nine months ended September 30, 2009, we assume that the exchange offer occurred at the beginning of each respective period.

The Company’s unaudited pro forma balance sheet as of September 30, 2009 also includes the impact of $1.683 billion received from Mead Johnson in November 2009 for the repayment of notes owed to the Company and has been accounted for on the pro forma balance sheet as if it had occurred on September 30, 2009. Interest income attributed to the cash received from this repayment has not been reflected in the pro forma consolidated statements of operations.

We derived the unaudited pro forma consolidated financial statements from the historical consolidated financial statements of the Company and Mead Johnson. These adjustments are based on currently available information and certain preliminary estimates and assumptions and, therefore, the actual effects of the split-off may differ from the effects reflected in the unaudited pro forma consolidated financial statements. However, despite the fact that data is not available to make precise estimates, the Company believes that the assumptions provide a reasonable basis for presenting the effects of the split-off as contemplated and that the pro forma adjustments give appropriate effect to those assumptions and are properly applied in the unaudited pro forma consolidated financial statements.

You should read the following information in conjunction with the Company’s consolidated financial statements and the accompanying notes and the related “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section included in the Company’s Current Report on Form 8-K filed on April 28, 2009 and Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2009.

 

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BRISTOL-MYERS SQUIBB COMPANY

CONSOLIDATED STATEMENTS OF EARNINGS

Dollars and Shares in Millions, Except Per Share Data

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009

(UNAUDITED)

 

EARNINGS    The Company
As Reported		     Pro Forma
Adjustments		     The Company
Pro Forma		  

Net Sales

    $ 15,886      $ (2,112 )(a)    $ 13,774   
                        

Cost of products sold

      4,436        (728 )(a)      3,708   

Marketing, selling and administrative

      3,258        (482 )(a)      2,776   

Advertising and product promotion

      1,085        (283 )(a)      802   

Research and development

      2,590        (51 )(a)      2,539   

Acquired in-process research and development

      —          —          —     

Provision for restructuring, net

      101        (12 )(a)      89   

Litigation expense, net

      132        —          132   

Equity in net income of affiliates

      (435 )      —          (435 ) 

Other (income)/expense, net

      (130 )      13 (a)      (117 ) 
                        

Total Expenses, net

      11,037        (1,543 )      9,494   
                        

Earnings from Continuing Operations Before Income Taxes

      4,849        (569 )(a)      4,280   

Provision for income taxes

      1,340        (346 )(a)(b)      994   
                        

Net Earnings from Continuing Operations

      3,509        (223 )      3,286   
                        

Net Earnings from Continuing Operations Attributed to Noncontrolling Interest

      922        (55 )(a)      867   
                        

Net Earnings Attributed to Bristol-Myers Squibb Company

    $ 2,587      $ (168 )    $ 2,419   
                        

Earnings per Common Share from Continuing Operations Attributable to Bristol-Myers Squibb Company:

       

Basic

    $ 1.30        $ 1.41   

Diluted

    $ 1.30        $ 1.40   

Average Common Shares Outstanding

       

Basic

      1,979        (269 )(c)      1,710   

Diluted

      1,982        (269 )(c)      1,713   

 

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BRISTOL-MYERS SQUIBB COMPANY

CONSOLIDATED STATEMENTS OF EARNINGS

Dollars and Shares in Millions, Except Per Share Data

FOR THE YEAR ENDED DECEMBER 31, 2008

(UNAUDITED)

 

EARNINGS    The Company
As Reported		     Pro Forma
Adjustments		     The Company
Pro Forma		  

Net Sales

    $ 20,597      $ (2,882 )(a)    $ 17,715   
                        

Cost of products sold

      6,396        (1,080 )(a)      5,316   

Marketing, selling and administrative

      4,792        (652 )(a)      4,140   

Advertising and product promotion

      1,550        (369 )(a)      1,181   

Research and development

      3,585        (73 )(a)      3,512   

Acquired in-process research and development

      32        —          32   

Provision for restructuring, net

      218        (3 )(a)      215   

Litigation expense, net

      33        —          33   

Gain on sale of product lines and businesses

      (159 )      —          (159 ) 

Equity in net income of affiliates

      (617 )      —          (617 ) 

Gain on sale of Imclone shares

      (895 )      —          (895 ) 

Other (income)/expense, net

      191        (10 )(a)      181   
                        

Total Expenses, net

      15,126        (2,187 )      12,939   
                        

Earnings from Continuing Operations Before Income Taxes

      5,471        (695 )(a)      4,776   

Provision for income taxes

      1,320        (230 )(a)      1,090   
                        

Net Earnings from Continuing Operations

      4,151        (465 )      3,686   
                        

Net Earnings from Continuing Operations Attributed to Noncontrolling Interest

      996        (7 )(a)      989   
                        

Net Earnings Attributed to Bristol-Myers Squibb Company

    $ 3,155      $ (458 )    $ 2,697   
                        

Earnings per Common Share from Continuing Operations Attributable to Bristol-Myers Squibb Company:

       

Basic

    $ 1.60        $ 1.57   

Diluted

    $ 1.59        $ 1.56   

Average Common Shares Outstanding

       

Basic

      1,977        (269 )(c)      1,708   

Diluted

      2,001        (269 )(c)      1,732   

 

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BRISTOL-MYERS SQUIBB COMPANY

CONSOLIDATED STATEMENTS OF EARNINGS

Dollars and Shares in Millions, Except Per Share Data

FOR THE YEAR ENDED DECEMBER 31, 2007

(UNAUDITED)

 

EARNINGS    The Company
As Reported		     Pro Forma
Adjustments		     The Company
Pro Forma		  

Net Sales

    $ 18,193      $ (2,576 )(a)    $ 15,617   
                        

Cost of products sold

      5,868        (949 )(a)      4,919   

Marketing, selling and administrative

      4,516        (575 )(a)      3,941   

Advertising and product promotion

      1,415        (318 )(a)      1,097   

Research and development

      3,227        (67 )(a)      3,160   

Acquired in-process research and development

      230        —          230   

Provision for restructuring, net

      183        (3 )(a)      180   

Litigation expense, net

      14        —          14   

Gain on sale of product lines and businesses

      (273 )      —          (273 ) 

Equity in net income of affiliates

      (524 )      —          (524 ) 

Other (income)/expense, net

      351        (1 )(a)      350   
                        

Total Expenses, net

      15,007        (1,913 )      13,094   
                        

Earnings from Continuing Operations Before Income Taxes

      3,186        (663 )(a)      2,523   

Provision for income taxes

      682        (211 )(a)      471   
                        

Net Earnings from Continuing Operations

      2,504        (452 )      2,052   
                        

Net Earnings from Continuing Operations Attributed to Noncontrolling Interest

      763        (7 )(a)      756   
                        

Net Earnings Attributed to Bristol-Myers Squibb Company

    $ 1,741      $ (445 )    $ 1,296   
                        

Earnings per Common Share from Continuing Operations Attributable to Bristol-Myers Squibb Company:

       

Basic

    $ 0.88        $ 0.76   

Diluted

    $ 0.88        $ 0.75   

Average Common Shares Outstanding

       

Basic

      1,970        (269 )(c)      1,701   

Diluted

      1,980        (269 )(c)      1,711   

 

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BRISTOL-MYERS SQUIBB COMPANY

CONSOLIDATED STATEMENTS OF EARNINGS

Dollars and Shares in Millions, Except Per Share Data

FOR THE YEAR ENDED DECEMBER 31, 2006

(UNAUDITED)

 

EARNINGS    The Company
As Reported		     Pro Forma
Adjustments		     The Company
Pro Forma		  

Net Sales

    $ 16,208      $ (2,345 )(a)    $ 13,863   
                        

Cost of products sold

      5,420        (850 )(a)      4,570   

Marketing, selling and administrative

      4,469        (504 )(a)      3,965   

Advertising and product promotion

      1,304        (291 )(a)      1,013   

Research and development

      2,951        (62 )(a)      2,889   

Acquired in-process research and development

      —          —          —     

Provision for restructuring, net

      59        (4 )(a)      55   

Litigation expense, net

      302        —          302   

Gain on sale of product lines and businesses

      (200 )      —          (200 ) 

Equity in net income of affiliates

      (474 )      —          (474 ) 

Other (income)/expense, net

      292        1 (a)      293   
                        

Total Expenses, net

      14,123        (1,710 )      12,413   
                        

Earnings from Continuing Operations Before Income Taxes

      2,085        (635 )(a)      1,450   

Provision for income taxes

      431        (201 )(a)      230   
                        

Net Earnings from Continuing Operations

      1,654        (434 )      1,220   
                        

Net Earnings from Continuing Operations Attributed to Noncontrolling Interest

      440        (7 )(a)      433   
                        

Net Earnings Attributed to Bristol-Myers Squibb Company

    $ 1,214      $ (427 )    $ 787   
                        

Earnings per Common Share from Continuing Operations Attributable to Bristol-Myers Squibb Company:

       

Basic

    $ 0.62        $ 0.46   

Diluted

    $ 0.62        $ 0.46   

Average Common Shares Outstanding

       

Basic

      1,960        (269 )(c)      1,691   

Diluted

      1,963        (269 )(c)      1,694   

 

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CONSOLIDATED BALANCE SHEET

Dollars and Shares in Millions, Except Per Share Data

FOR THE PERIOD ENDED SEPTEMBER 30, 2009

(UNAUDITED)

 

     The Company
As Reported		     MJN
Refinancing(d)		    Pro Forma
Adjustments		     The Company
Pro Forma		  

ASSETS

          

Current Assets:

          

Cash and cash equivalents

    $ 6,367      $ 1,683    $ (617 )(e)(f)    $ 7,433   

Marketable securities

      302        —        —          302   

Receivables, net

      3,699        —        (233 )(e) (g)      3,466   

Inventories, net

      1,824        —        (318 )(e)      1,506   

Deferred income taxes, net of valuation allowances

      702        —        (80 )(e)      622   

Prepaid expenses

      493        —        (30 )(e)      463   
                               

Total Current Assets

      13,387        1,683      (1,278 )      13,792   
                               

Property, plant and equipment, net

      5,561        —        (465 )(e)      5,096   

Goodwill

      5,475        —        (118 )(e)      5,357   

Other intangible assets, net

      2,726        —        (41 )(e)      2,685   

Deferred income taxes, net of valuation allowances

      1,437        —        (13 )(e)      1,424   

Marketable securities

      1,202        —        —          1,202   

Other assets

      1,163        —        (26 )(e)      1,137   
                               

Total Assets

    $ 30,951      $ 1,683    $ (1,941 )    $ 30,693   
                               
                         

LIABILITIES

          

Current Liabilities:

          

Short-term borrowings

    $ 286        —      $ —        $ 286   

Accounts payable

      1,796        —        (231 )(e)      1,565   

Accrued expenses

      2,988        —        (157 )(e)      2,831   

Deferred income

      276        —        (11 )(e)      265   

Accrued rebates and returns

      813        —        (271 )(e)      542   

U.S. and foreign income taxes payable

      433        —        (49 )(e)      384   

Dividends payable

      626        —        (7 )(e)      619   

Accrued litigation liabilities

      174        —        —          174   
                               

Total Current Liabilities

      7,392        —        (726 )      6,666   
                               

Pension, postretirement and postemployment liabilities

      1,018           (95 )(e)      923   

Deferred income

      934        —        (2 )(e)      932   

U.S. and foreign income taxes payable

      521        —        300 (h)      821   

Other liabilities

      408        —        (19 )(e)      389   

Long-term debt

      6,307        1,683      (1,683 )(e)(g)      6,307   
                               

Total Liabilities

      16,580        1,683      (2,225 )      16,038   
                               

Commitments and contingencies (Note 23)

          
                         

EQUITY

          

Bristol-Myers Squibb Company Shareholders’ Equity:

          

Preferred stock

      —          —        —          —     

Common stock

      220        —        —          220   

Capital in excess of par value of stock

      3,808        —        —          3,808   

Restricted stock

      (75 )      —        —          (75 ) 

Accumulated other comprehensive loss

      (2,218 )      —        78 (e)      (2,140 ) 

Retained earnings

      23,287        —        7,020 (i)      30,307   

Less cost of treasury stock

      (10,504 )      —        (6,921 )(j)      (17,425 ) 
                               

Total Bristol-Myers Squibb Company Shareholders’ Equity

      14,518        —        177        14,695   
             

Noncontrolling interest

      (147 )      —        107 (e)      (40 ) 
                               

Total Equity

      14,371        —        284        14,655   
                               

Total Liabilities and Equity

    $ 30,951      $ 1,683    $ (1,941 )    $ 30,693   
                               

 

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BRISTOL-MYERS SQUIBB COMPANY

NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Pro Forma Adjustments and Related Assumptions

The split-off’s exchange ratio was calculated as follows (in millions):

 

Mead Johnson’s common stock issued in exchange offer

    170.0

Exchange ratio

    0.6313
    

Company’s common stock tendered

    269.3
    

The gain on the split-off was calculated as follows (in millions):

 

Company common stock tendered at $25.70 per share, which represents fair value of the Company’s stock at December 23, 2009 per last reported trade

    $ 6,921   

Mead Johnson’s net deficit

      664   

Accumulated other comprehensive income attributed to Mead Johnson

      (78 ) 

Estimated fees attributed to the transaction

      (80 ) 

Estimated taxes attributed to the transaction

      (300 ) 

Company’s non-controlling interest in MJN

      (107 ) 
        

Net gain on split off of Mead Johnson

    $ 7,020   
        

Pro Forma Consolidated Statements of Earnings

(a)

Adjustments to eliminate Mead Johnson’s revenues and expenses from the Company’s Consolidated Statements of Operations

(b)

Adjustment to record $170 million of taxes incurred by the Company due to the transfer of various international business units to Mead Johnson prior to its initial public offering.

(c)

Adjustment to record the Company’s acquisition of treasury shares.

Pro Forma Balance Sheet

(d)

Adjustment to record the $1,683 million net proceeds from the MJN refinancing.

(e)

Adjustment to eliminate Mead Johnson balances from the Company’s consolidated balance sheet.

(f)

Adjustment to record estimated split-off transaction fees of $80 million.

(g)

Adjustment to reclass intercompany lease of $42 million to other receivables.

(h)

Adjustment to record estimated taxes payable attributed to the split-off transaction of $300 million.

(i)

Adjustment to record the estimated gain to be recognized by the Company as a result of the exchange offer.

(j)

Adjustment to record the Company’s acquisition of treasury shares.

 

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