PENSION AND POSTRETIREMENT BENEFIT PLANS

12 Months Ended

Dec. 31, 2012

Pension and Postretirement Benefit Plans [Abstract]

Pension and Other Postretirement Benefits [Text Block]

Note 18. 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	2012		2011		2010		2012		2011		2010
Service cost — benefits earned during the year	$	32	$	43	$	44	$	8	$	8	$	6
Interest cost on projected benefit obligation		319		337		347		22		26		30
Expected return on plan assets		(508)		(464)		(453)		(25)		(26)		(24)
Amortization of prior service cost/(benefit)		(3)		(1)		-		(2)		(3)		(3)
Amortization of net actuarial loss		129		112		95		10		7		10
Curtailments		(1)		(3)		5		-		(1)		-
Settlements		160		15		22		-		-		-
Special termination benefits		-		-		1		-		-		-
Total net periodic benefit cost	$	128	$	39	$	61	$	13	$	11	$	19

A $151 million pension settlement charge was recognized in 2012 for the primary U.S. pension plan as a result of annual lump sum payments exceeding interest and service costs during the fourth quarter. The charge included the acceleration of a portion of unrecognized actuarial losses.

Net actuarial loss and prior service cost of $147 million is expected to be amortized from accumulated OCI into net periodic benefit cost for pension and postretirement benefit plans in 2013.

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

	Pension Benefits				Other Benefits
Dollars in Millions	2012		2011		2012		2011
Benefit obligations at beginning of year	$	7,499	$	6,704	$	582	$	589
Service cost—benefits earned during the year		32		43		8		8
Interest cost		319		337		22		26
Plan participants’ contributions		2		3		24		25
Curtailments		(19)		(3)		-		(1)
Settlements		(260)		(41)		-		(2)
Plan amendments		(8)		(40)		-		(1)
Actuarial losses/(gains)		838		876		(107)		6
Retiree Drug Subsidy		-		-		6		12
Benefits paid		(227)		(386)		(76)		(79)
Exchange rate losses/(gains)		24		6		1		(1)
Benefit obligations at end of year	$	8,200	$	7,499	$	460	$	582
Fair value of plan assets at beginning of year	$	5,842	$	5,766	$	305	$	315
Actual return on plan assets		761		66		41		10
Employer contributions		396		432		11		24
Plan participants’ contributions		2		3		24		25
Settlements		(260)		(41)		-		(2)
Retiree Drug Subsidy		-		-		6		12
Benefits paid		(227)		(386)		(76)		(79)
Exchange rate gains/(losses)		28		2		-		-
Fair value of plan assets at end of year	$	6,542	$	5,842	$	311	$	305
Funded status	$	(1,658)	$	(1,657)	$	(149)	$	(277)
Assets/Liabilities recognized:
Other assets	$	22	$	39	$	12	$	-
Accrued expenses		(37)		(33)		(12)		(12)
Pension and other postretirement liabilities		(1,643)		(1,663)		(149)		(265)
Funded status	$	(1,658)	$	(1,657)	$	(149)	$	(277)
Recognized in accumulated other comprehensive loss:
Net actuarial loss	$	4,572	$	4,297	$	34	$	166
Net obligation at adoption		1		1		-		-
Prior service cost/(benefit)		(44)		(39)		(6)		(8)
Total	$	4,529	$	4,259	$	28	$	158

The accumulated benefit obligation for all defined benefit pension plans was $8,068 million and $7,322 million at December 31, 2012 and 2011, respectively.

Additional information related to pension plans was as follows:

Dollars in Millions		2012		2011
Pension plans with projected benefit obligations in excess of plan assets:
	Projected benefit obligation	$	8,112	$	7,236
	Fair value of plan assets		6,432		5,540
Pension plans with accumulated benefit obligations in excess of plan assets:
	Accumulated benefit obligation	$	7,987	$	6,867
	Fair value of plan assets		6,432		5,327

Actuarial Assumptions

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

	Pension Benefits		Other Benefits
	2012	2011	2012	2011
Discount rate	3.7%	4.4%	3.0%	4.1%
Rate of compensation increase	2.3%	2.3%	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
	2012	2011	2010	2012	2011	2010
Discount rate	4.4%	5.2%	5.6%	4.1%	4.8%	5.5%
Expected long-term return on plan assets	8.2%	8.3%	8.3%	8.8%	8.8%	8.8%
Rate of compensation increase	2.3%	2.4%	3.7%	2.0%	2.0%	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:

	2012	2011	2010
10 years	8.5%	5.6%	4.7%
15 years	6.5%	7.0%	7.9%
20 years	8.5%	8.1%	9.3%

Pension and postretirement liabilities were increased by $459 million at December 31, 2012 with a corresponding charge to other comprehensive income as a result of actuarial losses attributed to the benefit obligation ($731 million) partially offset by higher than expected return on plan assets ($272 million). These actuarial losses resulted from prevailing equity and fixed income market conditions and a reduction in interest rates in 2012.

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” which approximates the fair value of plan assets at December 31, 2012. 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 $840 million related to pension benefits is not expected to be amortized during 2013. The majority of the remaining actuarial losses are amortized over the life expectancy of the plans' participants for U.S. plans (30 years) and expected remaining service periods for most other plans into cost of products sold, research and development, and marketing, selling and administrative expenses as appropriate.

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

	2012	2011	2010
Healthcare cost trend rate assumed for next year	6.8%	7.4%	7.9%
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		25		(25)

Plan Assets

The fair value of pension and postretirement plan assets by asset category at December 31, 2012 and 2011 was as follows:

	December 31, 2012								December 31, 2011
Dollars in Millions	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Equity Securities	$	2,196	$	-	$	-	$	2,196	$	1,679	$	-	$	-	$	1,679
Equity Funds		410		1,555		-		1,965		236		1,559		4		1,799
Fixed Income Funds		234		401		-		635		203		419		-		622
Corporate Debt Securities		-		453		3		456		-		315		10		325
Venture Capital and Limited Partnerships		-		-		381		381		-		-		408		408
Government Mortgage Backed Securities		-		350		8		358		-		372		8		380
U.S. Treasury and Agency Securities		-		259		-		259		-		304		-		304
Short-Term Investment Funds		-		189		-		189		-		306		-		306
Insurance Contracts		-		-		132		132		-		-		125		125
Event Driven Hedge Funds		-		92		-		92		-		86		-		86
Collateralized Mortgage Obligation Bonds		-		50		6		56		-		63		7		70
State and Municipal Bonds		-		44		3		47		-		34		-		34
Asset Backed Securities		-		23		3		26		-		17		4		21
Real Estate		3		-		-		3		-		12		-		12
Cash and Cash Equivalents		58		-		-		58		(24)		-		-		(24)
Total plan assets at fair value	$	2,901	$	3,416	$	536	$	6,853	$	2,094	$	3,487	$	566	$	6,147

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. There were no significant unfunded commitments or restrictions on redemptions related to investments valued at NAV as of December 31, 2012. 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 and 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, 2011	$	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
Purchases		43		5		-		48
Sales		(8)		(7)		(10)		(25)
Settlements		(51)		-		(2)		(53)
Realized (losses)/gains		53		-		(4)		49
Unrealized gains/(losses)		(64)		9		6		(49)
Fair value at December 31, 2012	$	381	$	132	$	23	$	536

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 81% of the U.S. pension plans equity investments are actively managed. Venture capital and limited partnerships are typically valued on a three month lag. BMS Company common stock represents less than 1% of the plan assets at December 31, 2012 and 2011.

Contributions

Contributions to the U.S. pension plans were $335 million in 2012, $343 million in 2011 and $341 million in 2010.

Contributions to the international pension plans were $61million in 2012, $88 million in 2011 and $90 million in 2010. Aggregate contributions to the U.S. and international plans are expected to be $100 million in 2013.

Estimated Future Benefit Payments

	Pension		Other
Dollars in Millions	Benefits		Benefits
2013	$	385	$	47
2014		398		44
2015		401		42
2016		415		40
2017		422		37
Years 2018 – 2022		2,109		151

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 expense related to the plan was $190 million in 2012, $181 million in 2011 and $188 million in 2010.

Post Employment Benefit Plan

Post-employment liabilities for long-term disability benefits were $90 million and $92 million at December 31, 2012 and 2011, respectively. The expense related to these benefits was $17 million in 2012and $18 million in both 2011 and 2010.

Termination Indemnity Plans

Statutory termination obligations are recognized on an undiscounted basis assuming employee termination at each measurement date. The liability recognized for these obligations was $29 millionand $25 million atDecember 31, 2012and2011, respectively.