PENSION AND POSTRETIREMENT BENEFIT PLANS

12 Months Ended

Dec. 31, 2011

Pension and Postretirement Benefit Plans [Abstract]

Pension and Other Postretirement Benefits [Text Block]

Note 19. PENSION, POSTRETIREMENT AND POSTEMPLOYMENT LIABILITIES

The Company and certain of its subsidiaries sponsor defined benefit pension plans, defined contribution plans and termination indemnity plans for regular full-time employees. The principal defined benefit pension plan is the Bristol-Myers Squibb Retirement Income Plan, which covers most U.S. employees and represents approximately 70% of the consolidated pension plan assets and obligations. The funding policy is to contribute at least the minimum amount required by the Employee Retirement Income Security Act of 1974 (ERISA). Plan benefits are based primarily on the participant's years of credited service and final average compensation. Plan assets consist principally of equity and fixed-income securities.

Comprehensive medical and group life benefits are provided for substantially all U.S. retirees who elect to participate in comprehensive medical and group life plans. The medical plan is contributory. Contributions are adjusted periodically and vary by date of retirement. The life insurance plan is noncontributory. Plan assets consist principally of equity and fixed-income securities. Similar plans exist for employees in certain countries outside of the U.S.

The net periodic benefit cost of defined benefit pension and postretirement benefit plans includes:

	Pension Benefits						Other Benefits
Dollars in Millions	2011		2010		2009		2011		2010		2009
Service cost — benefits earned during the year	$	43	$	44	$	178	$	8	$	6	$	6
Interest cost on projected benefit obligation		337		347		381		26		30		37
Expected return on plan assets		(464)		(453)		(453)		(26)		(24)		(19)
Amortization of prior service cost/(benefit)		(1)		-		4		(3)		(3)		(3)
Amortization of net actuarial loss		112		95		94		7		10		10
Curtailments		(3)		5		24		(1)		-		-
Settlements		15		22		29		-		-		-
Special termination benefits		-		1		-		-		-		-
Total net periodic benefit cost	$	39	$	61	$	257	$	11	$	19	$	31
Continuing operations	$	39	$	61	$	242	$	11	$	19	$	28
Discontinued operations		-		-		15		-		-		3
Total net periodic benefit cost	$	39	$	61	$	257	$	11	$	19	$	31

Net actuarial loss and prior service cost of $140 million is expected to be amortized from accumulated OCI into net periodic benefit cost for pension and postretirement benefit plans in 2012.

The U.S. Retirement Income Plan and several other plans were amended during June 2009. The amendments eliminate the crediting of future benefits relating to service effective December 31, 2009. Salary increases will continue to be considered for an additional five-year period in determining the benefit obligation related to prior service. The plan amendments were accounted for as a curtailment. As a result, the applicable plan assets and obligations were remeasured. The remeasurement resulted in a $455 million reduction to accumulated OCI ($295 million net of taxes) and a corresponding decrease to the funded status of the plan due to the curtailment, updated plan asset valuations and a change in the discount rate from 7.0% to 7.5%. A curtailment charge of $25 million was also recognized in other expense during the second quarter of 2009 for the remaining amount of unrecognized prior service cost. In addition, all participants were reclassified as inactive for benefit plan purposes and actuarial gains and losses will be amortized over the expected weighted-average remaining lives of plan participants (32 years).

In connection with the plan amendment, contributions to principal defined contribution plans in the U.S. and Puerto Rico increased effective January 1, 2010. The net impact of the above actions is expected to reduce the future retiree benefit costs, although future costs will continue to be subject to market conditions and other factors including actual and expected plan asset performance, interest rate fluctuations and lump-sum benefit payments.

In 2009, certain plan assets and related obligations were transferred from the U.S. Retirement Income Plan and several other plans to new plans sponsored by Mead Johnson for active Mead Johnson participants resulting in a $170 million reduction to accumulated OCI ($110 million net of taxes) in the first quarter of 2009 and a corresponding decrease to the fundedstatus of the plan due to updated plan asset valuations and a change in the discount rate from 6.5% to 7.0%.

Changes in defined benefit and postretirement benefit plan obligations, assets, funded status and amounts recognized in the consolidated balance sheets were as follows:

	Pension Benefits				Other Benefits
Dollars in Millions	2011		2010		2011		2010
Benefit obligations at beginning of year	$	6,704	$	6,386	$	589	$	579
Service cost—benefits earned during the year		43		44		8		6
Interest cost		337		347		26		30
Plan participants’ contributions		3		3		25		25
Curtailments		(3)		2		(1)		-
Settlements		(41)		(50)		(2)		-
Plan amendments		(40)		-		(1)		-
Actuarial losses		876		397		6		16
Retiree Drug Subsidy		-		-		12		10
Benefits paid		(386)		(377)		(79)		(78)
Special termination benefits		-		1		-		-
Exchange rate losses/(gains)		6		(49)		(1)		1
Benefit obligations at end of year	$	7,499	$	6,704	$	582	$	589
Fair value of plan assets at beginning of year	$	5,766	$	5,103	$	315	$	278
Actual return on plan assets		66		697		10		37
Employer contributions		432		431		24		43
Plan participants’ contributions		3		3		25		25
Settlements		(41)		(50)		(2)		-
Retiree Drug Subsidy		-		-		12		10
Benefits paid		(386)		(377)		(79)		(78)
Exchange rate gains/(losses)		2		(41)		-		-
Fair value of plan assets at end of year	$	5,842	$	5,766	$	305	$	315
Funded status	$	(1,657)	$	(938)	$	(277)	$	(274)
Assets/Liabilities recognized:
Other assets	$	39	$	37	$	-	$	-
Accrued expenses		(33)		(33)		(12)		(13)
Pension and other postretirement liabilities		(1,663)		(942)		(265)		(261)
Funded status	$	(1,657)	$	(938)	$	(277)	$	(274)
Recognized in accumulated other comprehensive loss:
Net actuarial loss	$	4,297	$	3,150	$	166	$	151
Net obligation at adoption		1		1		-		-
Prior service cost/(benefit)		(39)		-		(8)		(10)
Total	$	4,259	$	3,151	$	158	$	141

The accumulated benefit obligation for all defined benefit pension plans was $7,322 million and $6,407 million at December 31, 2011 and 2010, respectively.

Additional information related to pension plans was as follows:

Dollars in Millions		2011		2010
Pension plans with projected benefit obligations in excess of plan assets:
	Projected benefit obligation	$	7,236	$	6,436
	Fair value of plan assets		5,540		5,461
Pension plans with accumulated benefit obligations in excess of plan assets:
	Accumulated benefit obligation	$	6,867	$	6,112
	Fair value of plan assets		5,327		5,415

Actuarial Assumptions

Weighted-average assumptions used to determine benefit obligations at December 31 were as follows:

	Pension Benefits		Other Benefits
	2011	2010	2011	2010
Discount rate	4.4%	5.2%	4.1%	4.8%
Rate of compensation increase	2.3%	2.4%	2.0%	2.0%

Weighted-average actuarial assumptions used to determine net periodic benefit cost for the years ended December 31 were as follows:

	Pension Benefits			Other Benefits
	2011	2010	2009	2011	2010	2009
Discount rate	5.2%	5.6%	6.9%	4.8%	5.5%	7.0%
Expected long-term return on plan assets	8.3%	8.3%	8.2%	8.8%	8.8%	8.8%
Rate of compensation increase	2.4%	3.7%	3.6%	2.0%	3.5%	3.5%

The yield on high quality corporate bonds that matches the duration of the benefit obligations is used in determining the discount rate. The Citigroup Pension Discount curve is used in developing the discount rate for the U.S. plans.

Several factors are considered in developing the expected return on plan assets, including long-term historical returns and input from external advisors. Individual asset class return forecasts were developed based upon market conditions, for example, price-earnings levels and yields and long-term growth expectations. The expected long-term rate of return is the weighted-average of the target asset allocation of each individual asset class. Historical long-term actual annualized returns for U.S. pension plans were as follows:

	2011	2010	2009
10 years	5.6%	4.7%	3.6%
15 years	7.0%	7.9%	8.4%
20 years	8.1%	9.3%	8.4%

Pension and postretirement liabilities were increased by $1.3 billion at December 31, 2011 with a corresponding charge to other comprehensive income as a result of lower than expected return on plan assets ($414 million) and actuarial losses attributed to the benefit obligation ($882 million). These actuarial losses resulted from prevailing equity and fixed income market conditions and a reduction in interest rates in 2011.

The expected return on plan assets was determined using the expected rate of return and a calculated value of assets, referred to as the “market-related value.” The market-related value exceeded the fair value of plan assets by $151 million at December 31, 2011. The fair value of plan assets exceeded the market-related value by $313million at December 31,2010.Differences between the assumed and actual returns are amortized to the market-related value on a straight-line basis over a three-year period.

Gains and losses have resulted from changes in actuarial assumptions (such as changes in the discount rate) and from differences between assumed and actual experience (such as differences between actual and expected return on plan assets). These gains and losses (except those differences being amortized to the market-related value) are only amortized to the extent they exceed 10% of the higher of the market-related value or the projected benefit obligation for each respective plan. As a result, approximately $900 million related to pension benefits is not expected to be amortized during 2012. The majority of the remaining actuarial losses are amortized over the life expectancy of the plans' participants for U.S. plans and expected remaining service periods for most other plans.

Assumed healthcare cost trend rates at December 31 were as follows:

	2011	2010	2009
Healthcare cost trend rate assumed for next year	7.4%	7.9%	8.4%
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)	4.5%	4.5%	4.5%
Year that the rate reaches the ultimate trend rate	2018	2018	2018

Assumed healthcare cost trend rates have an effect on the amounts reported for the healthcare plans. A one-percentage-point change in assumed healthcare cost trend rates would have the following effects:

	1-Percentage-		1-Percentage-
Dollars in Millions	Point Increase		Point Decrease
Effect on total of service and interest cost	$	1	$	(1)
Effect on postretirement benefit obligation		15		(11)

Plan Assets

The fair value of pension and postretirement plan assets by asset category at December 31, 2011 and 2010 was as follows:

	December 31, 2011								December 31, 2010
Dollars in Millions	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Equity Funds	$	236	$	1,559	$	4	$	1,799	$	237	$	1,665	$	7	$	1,909
Equity Securities		1,679		-		-		1,679		1,752		-		-		1,752
Fixed Income Funds		203		419		-		622		181		367		-		548
Venture Capital and Limited Partnerships		-		-		408		408		-		-		415		415
Government Mortgage Backed Securities		-		372		8		380		-		391		-		391
Corporate Debt Securities		-		315		10		325		-		309		14		323
Short-Term Investment Funds		-		306		-		306		-		244		-		244
U.S. Treasury and Agency Securities		-		304		-		304		26		112		-		138
Insurance Contracts		-		-		125		125		-		-		144		144
Event Driven Hedge Funds		-		86		-		86		-		86		-		86
Collateralized Mortgage Obligation Bonds		-		63		7		70		-		87		10		97
State and Municipal Bonds		-		34		-		34		-		24		-		24
Asset Backed Securities		-		17		4		21		-		24		7		31
Real Estate		-		12		-		12		-		11		-		11
Cash and Cash Equivalents		(24)		-		-		(24)		(32)		-		-		(32)
Total plan assets at fair value	$	2,094	$	3,487	$	566	$	6,147	$	2,164	$	3,320	$	597	$	6,081

The investment valuation policies per investment class are as follows:

Level 1 inputs utilize quoted prices (unadjusted) in active markets that are accessible at the measurement date for identical assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs. These instruments include equity securities, equity funds, and fixed income funds publicly traded on a national securities exchange, U.S. treasury and agency securities, and cash and cash equivalents. Cash and cash equivalents are highly liquid investments with original maturities of three months or less at the time of purchase and are recognized at cost, which approximates fair value. Pending trade sales and purchases are included in cash and cash equivalents until final settlement.

Level 2 inputs include observable prices for similar instruments, quoted prices for identical or similar instruments in markets that are not active, and other observable inputs that can be corroborated by market data for substantially the full term of the assets or liabilities. Equity funds, fixed income funds, event driven hedge funds and short-term investment funds classified as Level 2 within the fair value hierarchy are valued at the net asset value of their shares held at year end. Corporate debt securities, government mortgage backed securities, collateralized mortgage obligation bonds, asset backed securities, U.S. treasury and agency securities, state and municipal bonds, and real estate interests classified as Level 2 within the fair value hierarchy are valued utilizing observable prices for similar instruments and quoted prices for identical or similar instruments in markets that are not active.

Level 3 unobservable inputs are used when little or no market data is available. Equity funds, venture capital and limited partnership investments classified as Level 3 within the fair value hierarchy are valued at estimated fair value. The estimated fair value is based on the fair value of the underlying investment values or cost plus or minus accumulated earnings or losses which approximates fair value. Insurance contract interests are carried at contract value, which approximates the estimated fair value and is based on the fair value of the underlying investment of the insurance company. Insurance contracts are held by certain foreign pension plans. Valuation models for corporate debt securities, collateralized mortgage obligation bonds and asset backed securities classified as Level 3 within the fair value hierarchy are based on estimated bids from brokers or other third-party vendor sources that utilize expected cash flow streams and collateral values including assessments of counterparty credit quality, default risk, discount rates and overall capital market liquidity.

The following summarizes the activity for financial assets utilizing Level 3 fair value measurements:

	Venture
	Capital
	and Limited		Insurance
Dollars in Millions	Partnerships		Contracts		Other		Total
Fair value at January 1, 2010	$	391	$	141	$	53	$	585
Purchases		43		6		3		52
Sales		(2)		(17)		(19)		(38)
Settlements		(66)		-		(3)		(69)
Realized (losses)/gains		34		-		(2)		32
Unrealized gains/(losses)		15		14		7		36
Fair value at December 31, 2010		415		144		39		598
Purchases		53		8		5		66
Sales		(5)		(31)		(3)		(39)
Settlements		(48)		-		(4)		(52)
Realized (losses)/gains		56		-		3		59
Unrealized gains/(losses)		(63)		4		(7)		(66)
Fair value at December 31, 2011	$	408	$	125	$	33	$	566

The investment strategy emphasizes equities in order to achieve higher expected returns and lower expenses and required cash contributions over the long-term. A target asset allocation of 70% public equity (58% U.S. and 12% international), 8% private equity and 22% fixed income is maintained for the U.S. pension plans. Investments are well diversified within each of the three major asset categories. Approximately 82% of the U.S. pension plans equity investments are actively managed. Venture capital and limited partnerships are typically valued on a three month lag. Bristol-Myers Squibb Company common stock represents less than 1% of the plan assets at December 31, 2011 and 2010.

Contributions

Contributions to the U.S. pension plans were $343 million in 2011, $341 million in 2010 and $656 million in 2009(including $27 million by Mead Johnson). Contributions to the U.S. pension plans are expected to approximate $340 million during 2012, of which $300 million was contributed in January 2012.

Contributions to the international pension plans were $88 million in 2011, $90 million in 2010 and $133 million in 2009. Contributions to the international plans are expected to range from $75 million to $90 million in 2012.

Estimated Future Benefit Payments

	Pension		Other
Dollars in Millions	Benefits		Benefits
2012	$	384	$	50
2013		395		51
2014		406		47
2015		407		45
2016		415		44
Years 2017 – 2021		2,083		202

Savings Plan

The principal defined contribution plan is the Bristol-Myers Squibb Savings and Investment Program. The contribution is based on employee contributions and the level of Company match. The qualified defined contribution plans were amended to allow for increased matching and additional Company contributions effective in 2010. The expense related to the plan was $181 million in 2011, $188 million in 2010 and $50 million in 2009.

Post Employment Benefit Plan

Post-employment liabilities for long-term disability benefits were $92 million at both December 31, 2011 and 2010. The expense related to these benefits was $18 million in 2011and2010 and $21 million in 2009.

Termination Indemnity Plans

Statutory termination obligations in Europe are recognized on an undiscounted basis assuming employee termination at each measurement date. The liability recognized for these obligations was $25 million at both December 31, 2011and2010.