-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, IgPb154XqF/OxP/sb3Z5uIjUbxfVX/l/y+i50nCU02Vet/0bXx6Vvi1fA/jqrqrp 2Ezy68cG4HIZn5CoOczTgw== 0000014272-00-000006.txt : 20000516 0000014272-00-000006.hdr.sgml : 20000516 ACCESSION NUMBER: 0000014272-00-000006 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20000331 FILED AS OF DATE: 20000515 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BRISTOL MYERS SQUIBB CO CENTRAL INDEX KEY: 0000014272 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 220790350 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-01136 FILM NUMBER: 634013 BUSINESS ADDRESS: STREET 1: 345 PARK AVE CITY: NEW YORK STATE: NY ZIP: 10154 BUSINESS PHONE: 2125464000 MAIL ADDRESS: STREET 1: 345 PARK AVE CITY: NEW YORK STATE: NY ZIP: 10154 FORMER COMPANY: FORMER CONFORMED NAME: BRISTOL MYERS CO DATE OF NAME CHANGE: 19891012 10-Q 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2000 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 (IRS Employer Identification No.) incorporation or organization) 345 Park Avenue, New York, N.Y. 10154 (Address of principal executive offices) Telephone: (212) 546-4000 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 [ ] At April 30, 2000, there were 1,972,590,510 shares outstanding of the Registrant's $.10 par value Common Stock. BRISTOL-MYERS SQUIBB COMPANY INDEX TO FORM 10-Q March 31, 2000 Part I - Financial Information: Page Item 1. Financial Statements (Unaudited): Consolidated Balance Sheet - March 31, 2000 and December 31, 2 - 3 1999 Consolidated Statement of Earnings and Comprehensive Income for the three months ended March 31, 2000 and 1999 4 Consolidated Statement of Cash Flows for the three months ended March 31, 2000 and 1999 5 Notes to Condensed Consolidated Financial Statements 6 - 7 Report of Independent Accountants 8 Item 2. Management's Discussion and Analysis of Financial 9 - 12 Condition and Results of Operations Part II - Other Information Item 1. Legal Proceedings 13 - 15 Item 4. Submission of Matters to a Vote of Security Holders 16 Item 6. Exhibits and Reports on Form 8-K 17 Signatures 18 PART I FINANCIAL INFORMATION - ----------------------------- Item 1. Financial Statements - ----------------------------- BRISTOL-MYERS SQUIBB COMPANY CONSOLIDATED BALANCE SHEET - ASSETS (Unaudited, dollars in millions) March 31, December 2000 31, 1999 -------- ---------- Current Assets: Cash and cash equivalents $2,468 $2,720 Time deposits and marketable securities 212 237 Receivables, net of allowances 3,349 3,272 Finished goods 1,340 1,472 Work in process 439 302 Raw and packaging materials 267 352 ------ ------ Inventories 2,046 2,126 Prepaid expenses 971 912 ------ ------ Total Current Assets 9,046 9,267 ------ ------ Property, Plant and Equipment 7,833 7,841 Less: Accumulated depreciation 3,283 3,220 ------ ------ 4,550 4,621 ------ ------ Insurance Recoverable 450 468 Excess of cost over net tangible assets received in business acquisitions 1,483 1,502 Other Assets 1,507 1,256 ------ ------ Total Assets $17,036 $17,114 ====== ====== The accompanying notes are an integral part of these financial statements. 2 BRISTOL-MYERS SQUIBB COMPANY CONSOLIDATED BALANCE SHEET - LIABILITIES AND STOCKHOLDERS' EQUITY (Unaudited, dollars in millions) March 31, December 2000 31, 1999 --------- --------- Current Liabilities: Short-term borrowings $365 $432 Accounts payable 1,514 1,657 Accrued expenses 2,321 2,367 Product liability 235 287 U.S. and foreign income taxes payable 882 794 ------ ------ Total Current Liabilities 5,317 5,537 Other Liabilities 1,577 1,590 Long-Term Debt 1,333 1,342 ------ ------ Total Liabilities 8,227 8,469 ------ ------ Stockholders' Equity: Preferred stock, $2 convertible series: Authorized 10 million shares; issued and outstanding 10,782 in 2000 and 10,977 in - - 1999, liquidation value of $50 per share Common stock, par value of $.10 per share: Authorized 4.5 billion shares; issued 2,193,990,890 in 2000 and 2,192,970,504 in 219 219 1999 Capital in excess of par value of stock 1,612 1,533 Other comprehensive income (870) (816) Retained earnings 15,736 15,000 ------ ------ 16,697 15,936 Less cost of treasury stock - 220,713,423 common shares in 2000 and 212,164,851 in 1999 7,888 7,291 ------ ------ Total Stockholders' Equity 8,809 8,645 ------ ------ Total Liabilities and Stockholders' Equity $17,036 $17,114 ====== ====== The accompanying notes are an integral part of these financial statements. 3 BRISTOL-MYERS SQUIBB COMPANY CONSOLIDATED STATEMENT OF EARNINGS AND COMPREHENSIVE INCOME (Unaudited, dollars in millions except per share amounts) Three Months Ended March 31, ------------- EARNINGS 2000 1999 - -------- ------ ------ Net Sales $5,260 $4,854 ------ ------ Expenses: Cost of products sold 1,379 1,305 Marketing,selling, administrative and other 1,165 1,121 Advertising and product promotion 570 529 Research and development 468 423 ------ ------ 3,582 3,378 ------ ------- Earnings Before Income Taxes 1,678 1,476 Provision for income taxes 457 410 ------ ------ Net Earnings $1,221 $1,066 ====== ====== Earnings Per Common Share Basic $.62 $.54 Diluted $.61 $.53 Average Common Shares Outstanding Basic 1,976 1,985 Diluted 2,009 2,029 Dividends Per Common Share $.245 $.215 COMPREHENSIVE INCOME - -------------------- Net Earnings $1,221 $1,066 Other Comprehensive Income: Foreign currency translation (51) (104) Tax effect (3) 5 ------ ------ (54) (99) ------ ------ Comprehensive Income $1,167 $967 ====== ====== The accompanying notes are an integral part of these financial statements. 4 BRISTOL-MYERS SQUIBB COMPANY CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited, dollars in millions) Three Months Ended March 31, -------------- 2000 1999 ------ ------ Cash Flows From Operating Activities: Net earnings $1,221 $1,066 Depreciation and amortization 187 167 Provision for restructuring (See Note 3) 120 - Gain from product divestitures (See Note 4) (120) - Other operating items (3) (34) Receivables (114) (14) Inventories 47 (113) Accounts payable and accrued expenses (302) (237) Income taxes 96 258 Product liability (56) (318) Insurance recoverable 18 14 Pension contribution (See Note 5) (230) - Other assets and liabilities (126) (68) ------- ------ Net Cash Provided by Operating Activities 738 721 ------- ------ Cash Flows From Investing Activities: Proceeds from sales of time deposits and marketable securities 39 13 Purchases of time deposits and marketable securities (13) (9) Additions to fixed assets (91) (122) Proceeds from product divestitures 180 - Other, net (10) (28) ------- ------ Net Cash Provided by (Used in) Investing 105 (146) Activities ------- ------ Cash Flows From Financing Activities: Short-term borrowings (58) 59 Long-term debt (1) (4) Issuances of common stock under stock plans 26 (24) Purchases of treasury stock (563) (410) Dividends paid (485) (427) ------- ------ Net Cash Used in Financing Activities (1,081) (806) ------- ------ Effect of Exchange Rates on Cash (14) (10) ------ ------ Decrease in Cash and Cash Equivalents (252) (241) Cash and Cash Equivalents at Beginning of Period 2,720 2,244 ------- ------ Cash and Cash Equivalents at End of Period $2,468 $2,003 ====== ====== The accompanying notes are an integral part of these financial statements. 5 BRISTOL-MYERS SQUIBB COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited, dollars in millions except per share amounts) Note 1: Basis of Presentation - ------------------------------- In the opinion of management, the accompanying unaudited consolidated financial statements include all adjustments (consisting only of normal adjustments) necessary for a fair presentation of the financial position of Bristol-Myers Squibb Company (the "Company") at March 31, 2000 and December 31, 1999, the results of operations for the three months ended March 31, 2000 and 1999, and cash flows for the three months ended March 31, 2000 and 1999. These consolidated financial statements should be read in conjunction with the consolidated financial statements and the related notes included in the Company's 1999 Annual Report on Form 10-K. PricewaterhouseCoopers LLP, the Company's independent accountants, have performed a review of the unaudited consolidated financial statements included herein, and their review report thereon accompanies this filing. Note 2: 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. The computations for basic earnings per common share and diluted earnings per common share are as follows: Three Months Ended March 31, 2000 1999 ----- ----- Earnings per Common Share - Basic: Net Earnings $1,221 $1,066 Average Common Shares Outstanding 1,976 1,985 Earnings Per Common Share - Basic $.62 $.54 6 Three Months Ended March 31, 2000 1999 ----- ----- Earnings per Common Share - Diluted: Net Earnings $1,221 $1,066 Average Common Shares Outstanding 1,976 1,985 Incremental Shares Outstanding Assuming the Exercise of Dilutive Stock Options 33 44 Average Common Shares Outstanding 2,009 2,029 Earnings Per Common Share - $.61 $.53 Diluted Note 3: Restructuring - --------------------- During the first quarter of 2000, the Company recorded a pretax charge of $120 million in marketing, selling, administrative and other expenses for restructuring activities. The charge related to work-force reductions, downsizing and streamlining of operations in certain international markets and the ConvaTec business, and the reorganization of the Company's Global Business Services. Of the total restructuring charge, $77 million relates to employee termination benefits for approximately 1,400 employees. The remaining $43 million represents the closure of facilities, primarily in the ConvaTec business and certain international markets. At March 31, 2000, $77 million was included in accrued expenses related to these activities. The Company expects to substantially complete these restructuring activities by the end of 2000. Note 4: Divestitures - -------------------- In February 2000, the Company completed the sale of three pharmaceutical products - Estrace Cream, Ovcon 35 and Ovcon 50, resulting in a pre-tax gain of $120 million. Note 5: Pension Contribution - ---------------------------- In January 2000, the Company made a contribution of $230 million to fund its U.S. Retirement Income Plan. 7 Report of Independent Accountants To the Board of Directors and Stockholders of Bristol-Myers Squibb Company We have reviewed the accompanying consolidated balance sheet of Bristol-Myers Squibb Company and its subsidiaries as of March 31, 2000, and the related consolidated statement of earnings and comprehensive income and of cash flows for the three-month periods ended March 31, 2000 and 1999. These financial statements are the responsibility of the Company's management. We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the accompanying consolidated interim financial statements for them to be in conformity with accounting principles generally accepted in the United States. We previously audited in accordance with auditing standards generally accepted in the United States, the consolidated balance sheet as of December 31, 1999, and the related consolidated statements of earnings, comprehensive income and retained earnings and of cash flows for the year then ended (not presented herein), and in our report dated January 24, 2000 we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet as of December 31, 1999, is fairly stated in all material respects in relation to the consolidated balance sheet from which it has been derived. PricewaterhouseCoopers LLP New York, New York April 20, 2000 8 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations First Quarter Results of Operations - ----------------------------------- Worldwide sales for the first quarter of 2000 increased 8% over the prior year to $5,260 million. The consolidated sales growth resulted from a 8% increase due to volume, a 3% increase due to changes in selling prices and a 3% decrease due to foreign exchange rate fluctuations. U.S. sales increased 14% and international sales decreased 2% (a 4% increase excluding the effect of foreign exchange). Sales in the medicines products segment (pharmaceuticals and consumer medicines), which is the largest segment at 72% of total Company sales, increased 10% over the first quarter of 1999 to $3,783 million. Sales growth resulted from a 10% increase in volume, a 3% increase in selling prices and a 3% decrease due to foreign exchange rate fluctuations. Worldwide pharmaceutical sales increased 12% with U.S. pharmaceutical sales up 20% over the prior year. Consumer medicines sales increased 2% (9% excluding foreign exchange). GLUCOPHAGE (metformin), the leading branded oral medication for treatment of non-insulin dependent (type 2) diabetes, continued its strong growth rate with sales increasing 51% to $426 million. In March 2000, the U.S. marketing exclusivity of GLUCOPHAGE was extended through September 3, 2000 based on the Company's completion of pediatric studies which qualify for benefits under U.S. research incentive legislation. Sales of TAXOL* (paclitaxel), the Company's leading anti-cancer agent, increased 17% to $385 million. PLAVIX, a platelet aggregation inhibitor for the reduction of stroke, heart attack and vascular death in atherosclerotic patients with recent stroke, recent heart attack or peripheral arterial disease, increased 128% to $201 million for the quarter. AVAPRO, an angiotensin II receptor blocker for the treatment of hypertension, increased 74% to $87 million. AVAPRO and PLAVIX are cardiovascular products that were launched from the Bristol-Myers Squibb and Sanofi S.A. joint venture. Sales of BUSPAR*, an anti-anxiety agent, increased 24% to $163 million following a direct-to-consumer campaign launched in December 1999. The exclusivity period for BUSPAR expires in May 2000. Sales of SERZONE*, a novel anti-depressant, increased 38% to $87 million. Sales of the anti-cancer agent PARAPLATIN* increased 7% to $160 million as the product continues to benefit from its use in combination with other chemotherapy agents. Sales of ZERIT* and VIDEX*, the Company's two antiretroviral agents, remained at prior year levels of $151 million and $45 million, respectively. * Indicates brand names of products which are registered trademarks owned by the Company. 9 Sales of TEQUIN*, a broad-spectrum fluoroquinolone antibiotic, launched in December 1999, were $15 million. In just three months on the market, TEQUIN has been prescribed to more than 200,000 people. In March 2000, the Company entered into an agreement to have Schering-Plough co-promote TEQUIN in the United States. Sales of Oncology Therapeutics Network, a specialty distributor of anti-cancer medicines and related products, reached $244 million, an increase of 21% over the prior year. Worldwide sales of PRAVACHOL*, the Company's largest selling product, decreased 5% to $461 million for the quarter. Sales of EXCEDRIN* increased 5% to $62 million and sales of BUFFERIN* increased 14% (7% excluding foreign exchange) to $33 million. Earnings before taxes for the medicines products segment increased 17% to $1,169 million in 2000. As a percentage of sales, earnings before taxes for this segment improved to 30.9% in 2000 from 29.2% in 1999 primarily due to improvements, as a percentage of sales, in cost of products sold. Sales in the beauty care products segment decreased 4% to $549 million. The decline in sales resulted from a 5% decrease in volume, a 1% increase in selling prices and no effect due to foreign exchange. Haircolor sales increased 3% with increases in NICE 'N EASY* of 4% to $48 million and HYDRIENCE* of 9% to $24 million. AUSSIE* products added $32 million to Beauty Care sales, an increase of 10% over the prior year. HERBAL ESSENCES*, a complete line of shampoos, conditioners, styling aids, body wash and facial care, decreased 5% to $151 million. Clairol continues to be the number one hair products company in the U.S. Earnings before taxes for the beauty care segment increased 17% to $76 million in 2000 from $65 million in 1999 primarily due to a decrease, as a percentage of sales, in advertising expenses. In April, the Company reached an agreement to sell Matrix Essentials to Cosmair, Inc., a wholly-owned U.S. subsidiary of L'Oreal S.A. The transaction is expected to close sometime during the second quarter. Sales in the nutritional products segment increased 13% to $506 million. Sales growth resulted from a 12% increase in volume, a 1% increase in selling prices and no effect due to foreign exchange rate fluctuations. The Company's Mead Johnson subsidiary continues to build on its U.S. and worldwide leadership position in the infant formula market. ENFAMIL*, the Company's largest-selling infant formula, recorded sales of $204 million, an increase of 9% from the prior year. Adult consumer nutritional sales increased 41% as a result of a 39% increase in sales of BOOST* to $32 million and $15 million in sales of VIACTIV* Soft Calcium Chews. Earnings before taxes for the nutritional segment increased to $120 million in 2000 from $101 million in 1999, and as a percentage of sales, increased to 23.7% from 22.5% in 1999 primarily due to a decrease, as a percentage of sales, in cost of products sold and sales force expenses. Medical device segment sales increased 5% to $422 million, due to volume increases of 7% and a 2% decrease due to foreign exchange. Zimmer sales increased 9% to $260 million (8% excluding foreign exchange). Knee joint replacement sales increased 9% to $102 million, hip replacement sales increased 13% to $80 million and fracture management sales increased 23% to $37 million. ConvaTec sales decreased 1% to $162 million (a 4% increase excluding foreign exchange). Sales of modern wound care products increased 2% to $57 million (7% excluding foreign 10 exchange) while sales of ostomy products decreased 4% to $98 million. Earnings before taxes for the medical device segment increased 11% to $80 million in 2000 from $72 million in 1999 and, as a percentage of sales, increased to 19.0% in 2000 from 17.9% in 1999, resulting from decreases, as a percentage of sales, in research and development expenses. Operating Expenses - ------------------ Total expenses, as a percentage of sales, decreased to 68.1% from 69.6% in 1999. Cost of products sold, as a percentage of sales, decreased to 26.2% from 26.9% in 1999 primarily due to product mix. Marketing, selling, administrative and other expenses, as a percentage of sales, decreased to 22.1% in the first quarter of 2000 from 23.1% in 1999. Also included in marketing, selling, administrative and other expenses were a pre-tax gain of $120 million from the divestiture of three pharmaceutical products - Estrace Cream, Ovcon 35 and Ovcon 50, and a $120 million provision for restructuring. The restructuring charge related to work-force reductions in certain of the international medicines markets, ConvaTec and the reorganization of the Company's Global Business Services. (See also Note 3 to the financial statements) Expenditures for advertising and promotion in support of new and existing products increased 8% to $570 million from $529 million in 1999. Research and development expenditures increased 11% to $468 million from $423 million in 1999. Pharmaceutical research and development spending increased 13% over the prior year, and as a percentage of pharmaceutical sales, was 12.3% in the first quarter of 2000 and 12.2% in the first quarter of 1999. In April, the Company voluntarily withdrew its current New Drug Application (NDA) for VANLEV* (omapatrilat) from the U.S. Food and Drug Administration (FDA). The Company now expects to resubmit its application early next year. Also, in April 2000, the Company resubmitted its NDA to the FDA for UFT(R) capsules for use with leucovorin calcium tablets in the first-line treatment of advanced colorectal cancer. Earnings - -------- Earnings before income taxes increased 14% to $1,678 million from $1,476 million in 1999. The effective tax rate on earnings before income taxes decreased to 27.2% in 2000 from 27.8% in 1999. The decrease in the effective tax rate is attributable to higher operating earnings from lower tax jurisdictions. Net earnings increased 15% to $1,221 million from $1,066 million in 1999. Basic earnings per share increased 15% to $.62 from $.54 in 1999 and diluted earnings per share increased 15% to $.61 from $.53 in 1999. Financial Position - ------------------ The balance sheet at March 31, 2000 and the statement of cash flows for the three months then ended reflect the Company's strong financial position. The Company continues to maintain a high level of working capital, $3.7 billion at March 31, 2000, at approximately the same level as December 31, 1999. 11 Long-Term Debt decreased slightly to $1,333 million from $1,342 million at December 1999. Internally generated funds continue to be the Company's primary source for financing expenditures for new plant and equipment. Net Cash Provided by Operating Activities increased to $738 million in 2000. Additions to fixed assets for the three months ended March 31, 2000 were $91 million compared to $122 million during the same period of 1999. In January 2000, the Company made a contribution of $230 million to fund its U.S. Retirement Income Plan. During the three months ended March 31, 2000, the Company purchased 9.9 million shares of its common stock at a cost of $563 million. Business Segments - ----------------- Three Months Ended March 31, ---------------------------- Net Earnings Sales Before Taxes --------------- ------------------ 2000 1999 2000 1999 ------ ------ ------ ------ (in millions) Medicines Products $3,783 $3,431 $1,169 $1,001 Beauty Care Products 549 572 76 65 Nutritional Products 506 449 120 101 Medical Devices 422 402 80 72 Other - - 233 237 ------ ------ ------ ------ Total Company $5,260 $4,854 $1,678 $1,476 ===== ===== ===== ===== Included in earnings before taxes of each segment is a cost of capital charge. The offset to the cost of capital charge is included in Other. In addition, Other principally consists of interest income, interest expense, certain administrative expenses and allocations to the industry segments for certain corporate programs. For the first three months of 2000, Other also includes a provision for restructuring of $120 million and the gain on product divestitures of $120 million. (See also Note 3 and Note 4 to the financial statements) Reference is made to Part II, Item 1 - Legal Proceedings in which developments are described for various lawsuits, claims and proceedings in which the Company is involved. Forward Looking Information - --------------------------- Certain statements in this Form 10-Q may constitute forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from expected and historical results. Certain factors that may affect the Company's operations and prospects are discussed in Exhibit 99 to the Company's Annual Report on Form 10-K for the year ended December 31, 1999. 12 PART II - OTHER INFORMATION - --------------------------- Item 1. Legal Proceedings - -------------------------- Various lawsuits, claims and proceedings of a nature considered normal to its business are pending against the Company and certain of its subsidiaries. The most significant of these are reported in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1999 and any subsequent material developments in such matters are described below. Breast Implant Litigation - ------------------------- As previously reported in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1999, the Company, together with its subsidiary, Medical Engineering Corporation (MEC), and certain other companies, has been named as a defendant in a number of claims and lawsuits alleging damages for personal injuries of various types resulting from breast implants formerly manufactured by MEC or a related company. Of the more than 90,000 claims or potential claims against the Company in direct lawsuits or through registration in the national class action Revised Settlement Program, most have been dealt with through the Revised Settlement, other settlements, or trial. As of May 1, 2000, the Company's contingent liability in respect of breast implant claims was limited to residual unpaid Revised Settlement Program obligations and to roughly 1,550 remaining opt- outs who have pursued or may pursue their claims in court. As of May 1, 2000, approximately 5,800 United States and 200 foreign breast implant recipients were plaintiffs in lawsuits pending in federal and state courts in the United States and in certain courts in Canada and Australia. These figures include the claims of plaintiffs that are in the process of being settled and/or dismissed. In these lawsuits, about 3,000 U.S. plaintiffs and 46 foreign plaintiffs opted out of the Revised Settlement. The lawsuits of approximately 2,800 U.S. plaintiffs who did not opt out are expected to be dismissed as these plaintiffs are among the estimated 74,000 women with MEC implants who chose to participate in the nationwide settlement. Of the 3,000 opt-out plaintiffs, an estimated 1,450 plaintiffs have claims based upon products that were not manufactured and sold by MEC or that have been or are in the process of being settled and/or dismissed. Accordingly, the number of remaining plaintiffs who have pursued or may pursue their claims in court against the Company is roughly 1,550 as stated in the preceding paragraph. Under the terms of the Revised Settlement Program, additional opt- outs are expected to be minimal since the deadline for U.S. claim members to opt out has passed. In addition, the Company's remaining obligations under the Revised Settlement Program are limited because most payments to "Current Claimants" have already been made, no additional "Current Claims" may be filed without court approval, and because payments of claims to so-called "Other Registrants" and "Late Registrants" are limited by the terms of the Revised Settlement Program. The Company believes it will be able to address remaining opt-out claims as well as remaining obligations under the Revised Settlement Program within its reserves as described in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1999. 13 On March 31, 2000, the federal government filed a civil suit in federal district court in Birmingham, Alabama, against several parties in the breast implant litigation, including the Company. The government claims it is entitled to reimbursement for certain costs incurred in connection with medical treatment provided to women with breast implants. The Company believes it will be able to address the government lawsuit within its reserves as described in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1999. Prescription Drug Litigation - ---------------------------- The Company remains a defendant in several actions challenging pricing on brand name prescription drugs. These actions include: several currently consolidated antitrust actions brought against the Company and more than thirty other pharmaceutical manufacturers, drug wholesalers and pharmacy benefit managers by certain chain drugstores, supermarket chains and independent drugstores; state pharmaceutical actions; and purported class actions on behalf of consumers. The Company will continue to defend vigorously its position in this ongoing litigation and believes it will be able to address all remaining claims within its reserves as described in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1999. Infant Formula Matters - ---------------------- As previously reported in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1999, the Company, one of its subsidiaries, and others have been defendants in a number of antitrust actions in various states filed on behalf of purported statewide classes of indirect purchasers of infant formula products and by the Attorneys General of Louisiana, Minnesota and Mississippi, alleging a price fixing conspiracy and other violations of state antitrust or deceptive trade practice laws and seeking penalties and other relief. The Company has resolved all of these actions. On April 3, 2000, the U.S. Supreme Court decided to let stand the lower court's decision dismissing a case pending in Louisiana, which had been the only open case remaining. TAXOL* Litigation - ----------------- As previously reported in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1999, in 1997 and 1998, the Company filed several lawsuits alleging that a number of generic drug companies infringed its patents covering certain methods of administering paclitaxel when they filed abbreviated new drug applications seeking regulatory approval to sell paclitaxel. The generic drug company defendants are Boehringer Ingelheim Corp.; Ben Venue Laboratories, Inc.; Bedford Laboratories; Immunex Corporation; Zenith Goldline Pharmaceuticals, Inc.; Ivax Corporation; Mylan Pharmaceuticals, Inc.; Marsam Pharmaceuticals, Inc.; and Schein Pharmaceuticals, Inc. These actions were consolidated for discovery in the United States District Court for the District of New Jersey. The Company does not assert a monetary claim against any of the defendants, but seeks to prevent the defendants from marketing paclitaxel in a manner that violates the Company's patents. The defendants have asserted that they do not infringe the Company's patents and that these patents are invalid and unenforceable. Some defendants also asserted counterclaims seeking damages for alleged antitrust and unfair competition violations. On January 4, 2000, the District Court granted the Company's motion to dismiss certain of the antitrust and unfair competition counterclaims. The Company's motion for summary judgment on the 14 remaining antitrust and unfair competition counterclaims was denied on March 17, 2000. On February 29, 2000, the District Court granted in part the generic companies' summary judgment motions for invalidity by finding all claims of the Company's patents invalid, except for claims limited to the treatment of ovarian cancer. As a result of this ruling, the generic companies may obtain U.S. Food and Drug Administration approval to market paclitaxel for treatment of metastatic breast cancer after failure of combination chemotherapy. The District Court's opinion left for determination at trial the validity of the claims of the Company's patents directed to the low dose, three-hour administration of paclitaxel for ovarian cancer and denied the generic companies' summary judgment motion arguing non-infringement of the Company's patents. In order to pursue an immediate appellate review of the District Court's invalidity findings, the Company voluntarily relinquished all rights in the remaining ovarian tumor specific claims of its patents. On April 7, 2000, the District Court granted the Company's request for an entry of judgment. The Company subsequently filed a notice of appeal with the Federal Circuit Court of Appeals. If the Company is successful on appeal and the trial that would follow a successful appeal, the Company believes its remaining patent rights would apply to all tumor types. It is not possible at this time to make a reasonable assessment of the outcome of the appeal and the remaining claims in these actions nor to reasonably estimate the impact on TAXOL* sales or the amount of damages were the Company not to prevail. VANLEV* Litigation - ------------------ The Company, its Chairman of the Board and Chief Executive Officer, Charles A. Heimbold, Jr. and its Chief Scientific Officer and President - Pharmaceutical Research Institute, Peter S. Ringrose, Ph.D., are defendants in a number of purported class actions filed in April and May in the U.S. District Court for the District of New Jersey alleging violations of federal securities laws and regulations. Plaintiffs claim 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. Plaintiffs seek compensatory damages and costs and expenses. 15 PART II - OTHER INFORMATION - --------------------------- Item 4. Submission of Matters to a Vote of Security Holders - ------------------------------------------------------------ The following matters were voted upon at the Annual Meeting of Stockholders held on May 2, 2000, and received the votes set forth below: All of the following persons nominated were elected to serve as directors and received the number of votes set opposite their respective names: For Withheld Robert E. Allen 1,385,704,476 250,629,475 Lewis B. Campbell 1,389,533,562 246,800,389 Laurie H. Glimcher, M.D. 1,388,315,582 248,018,369 James D. Robinson 1,384,091,216 252,242,735 The appointment of PricewaterhouseCoopers LLP was ratified by a vote of 1,622,096,652 shares in favor of the appointment, with 7,535,257 shares voting against, 6,702,042 shares abstaining and there were no broker non-votes. The proposal to approve the Company's 2000 Non-Employee Directors' Stock Option Plan was approved by a vote of 1,463,265,181 shares in favor, with 156,828,923 shares voting against, 16,239,847 shares abstaining and there were no broker non-votes. The stockholder-proposed resolution to recommend that the Board of Directors take the necessary steps to reinstate the annual election of directors received a vote of 754,765,598 shares in favor, with 581,773,904 shares voting against, 22,762,538 shares abstaining and 277,031,911 broker non-votes. The stockholder-proposed resolution requesting the Board of Directors adopt a policy of pharmaceutical price restraint received a vote of 66,100,719 shares in favor, with 1,255,878,413 shares voting against, 37,412,433 shares abstaining and 276,942,386 broker non-votes. 16 Item 6. Exhibits and Reports on Form 8-K - ----------------------------------------- a) Exhibits (listed by number corresponding to the Exhibit Table of Item 601 in Regulation S-K). Exhibit Number and Description Page - ------------------------------ 10m. Bristol-Myers Squibb Company 2000 Non-Employee Directors' Stock E-10-1 Option Plan. 15. Independent Accountants' Awareness Letter. E-15-1 27. Bristol-Myers Squibb Company Financial Data Schedule. E-27-1 b) Reports on Form 8-K. On April 19, 2000, the Company filed a current report on Form 8-K under Item 5 concerning the withdrawal of its New Drug Application (NDA) for VANLEV*. 17 SIGNATURES ---------- Pursuant to the requirements 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) Date: May 15, 2000 By: /s/ Harrison M. Bains, Jr. ------------------------ Harrison M. Bains, Jr. Vice President and Treasurer Date: May 15, 2000 By: /s/ Frederick S. Schiff --------------------- Frederick S. Schiff Senior Vice President - Financial Operations and Controller EX-10 2 BRISTOL-MYERS SQUIBB COMPANY 2000 NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN 1.Purpose: The purpose of the Bristol-Myers Squibb Company 2000 Non-Employee Directors' Stock Option Plan ("the Plan") is to secure for Bristol-Myers Squibb Company ("the Company") and its stockholders the benefits of the incentive inherent in increased common stock ownership by the members of the Board of Directors ("the Board") of the Company who are Eligible Directors as defined in the Plan. 2.Administration: The Plan shall be administered by the Board. The Board shall have all the powers vested in it by the terms of the Plan, such powers to include authority (within the limitations described herein) to prescribe the form of the agreement embodying awards of stock options made under the Plan ("Options"). The Board shall, subject to the provisions of the Plan, grant Options under the Plan and shall have the power to construe the Plan, to determine all questions arising thereunder and to adopt and amend such rules and regulations for the administration of the Plan as it may deem desirable. Any decision of the Board in the administration of the Plan, as described herein, shall be final and conclusive. The Board may act only by a majority of its members in office, except that the members thereof may authorize any one or more of their number or the Secretary or any other officer of the Company to execute and deliver documents on behalf of the Board. No member of the Board shall be liable for anything done or omitted to be done by such member or by any other member of the Board in connection with the Plan, except for such member's own willful misconduct or as expressly provided by statute. 3.Amount of Stock: The stock which may be issued and sold under the Plan will be the Common Stock (par value $.10 per share) of the Company, of a total number not exceeding 750,000 shares, subject to adjustment as provided in Paragraph 6 below. The stock to be issued may be either authorized and unissued shares or issued shares acquired by the Company or its subsidiaries. In the event that Options granted under the Plan shall terminate or expire without being exercised in whole or in part, new Options may be granted covering the shares not purchased under such lapsed Options. 4.Eligible Directors: The members of the Board who are eligible to participate in the Plan are persons who serve as directors of the Company after the effective date of the Plan and: (a) who are not current or former employees of the Company and (b) who are not and, in the past, have not been eligible to receive Options on Company stock by participation as an employee in another plan sponsored by the Company or under a contractual arrangement with the Company. 5. Terms and Conditions of Options: Each Option granted under the Plan shall be evidenced by an agreement in such form as the Board shall prescribe from time to time in accordance with the Plan and shall comply with the following terms and conditions: (a) The Option exercise price shall be the fair market value of the Common Stock shares subject to such Option on the date the Option is granted, which shall be the average of the high and the low sales prices of a Common Stock share on the date of grant as reported on the New York Stock Exchange Composite Transactions Tape or, if the New York Stock Exchange is closed on that date, on the last preceding date on which the New York Stock Exchange was open for trading. E-10-1 (b) Each year, as of the date of the Annual Meeting of Stockholders of the Company, each Eligible Director who has been elected or reelected or who is continuing as a member of the Board as of the adjournment of the Annual Meeting shall automatically receive an Option Award. The number of shares to be covered by an individual award may not exceed 5,000 shares, with such limit subject to the provisions of Section 6. (c) No Option granted under the Plan shall be transferable by the optionee other than by will or by the laws of descent and distribution, and such Option shall be exercisable, during the optionee's lifetime, only by the optionee. Notwithstanding the foregoing, the Board may set forth in a Stock Option Agreement, at the time of grant or thereafter, that the Options may be transferred to members of the optionee's immediate family, to trusts solely for the benefit of such immediate family members and to partnerships in which such family members and/or trusts are the only partners. For this purpose, immediate family means the optionee's spouse, parents, children, stepchildren, grandchildren and legal dependants. Any transfer of Options made under this provision will not be effective until notice of such transfer is delivered to the Company. (d) No Option or any part of an Option shall be exercisable: (i) before the Eligible Director has served one term-year as a member of the Board since the date the Option was granted (as used herein, the term "term-year" means that period from one Annual Meeting to the subsequent Annual Meeting), (ii) after the expiration of ten years from the date the Option was granted, (iii)unless, written notice of the exercise is delivered to the Company specifying the number of shares to be purchased and payment in full is made for the shares of Common Stock being acquired thereunder at the time of exercise; such payment shall be made (A) in United States dollars by certified check, or bank draft, or (B) by tendering to the Company Common Stock shares owned by the person exercising the Option and having a fair market value equal to the cash exercise price applicable to such Option, such fair market value to be the average of the high and low sales prices of a Common Stock share on the date of exercise as reported on the New York Stock Exchange Composite Transactions Tape or, if the New York Stock Exchange is closed on that date, on the last preceding date on which the New York Stock Exchange was open for trading, or (C)by a combination of United States dollars and Common Stock shares as aforesaid; and (iv) unless the person exercising the Option has been, at all times during the period beginning with the date of grant of the Option and ending on the date of such exercise, an Eligible Director of the Company, except that (A)if such a person shall cease to be such an Eligible Director for reasons other than retirement or death, while holding an Option that has not expired and has not been fully exercised, such person, at any time within one year after the date he ceases to be such an Eligible Director (but in no event after the Option has expired under the provisions of subparagraph 5(d) (ii) above), may exercise the Option with respect to any Common Stock shares as to which such person has not exercised the Option on the date the person ceased to be such an Eligible Director; or (B)if such person shall cease to be such an Eligible Director by reason of retirement or death while holding an Option that has not expired and has not been fully exercised, such person, or in the case of death, the executors, administrators or distributees, as the case may be, may at any time following the date of retirement or death but in no event after the expiration of the Option period set for in the Stock Option Agreement, exercise the Option with respect to any shares of Common Stock as to which such person has not exercised the Option on the date the person ceased to be such an Eligible Director, notwithstanding the provisions of subparagraph 5(e) below. E-10-2 (C) if any person who has ceased to be such an Eligible Director for reasons other than death, shall die holding an Option that has not been fully exercised, such person's executors, administrators, heirs or distributees, as the case may be, may, at any time within the greater of (1) one year after the date of death or (2) the remainder for the period in which such person could have exercised the Option had the person not died, (but in no event under either (1) or (2) after the Option has expired under the provisions of subparagraph 5(d) (ii) above), exercise the Option with respect to any shares as to which the decedent could have exercised the Option at the time of death. In the event any Option is exercised by the executors, administrators, legatees or distributees of the estate of a deceased optionee, the Company shall be under no obligation to issue stock thereunder unless and until the Company is satisfied that the person or persons exercising the Option are the duly appointed legal representatives of the deceased optionee's estate or the proper legatees or distributees thereof. (e) Subject to subparagraph 5(d) (i) above, one-quarter (25%) of the total number of shares of Common Stock covered by the Option shall become exercisable beginning on the earlier of (a) the first anniversary date of the grant of the Option or (b) the completion of one term-year following the grant of the Option; thereafter an additional one-quarter (25%) of the shares shall become exercisable annually on the earlier of (a) the anniversary date of the grant of the Option or (b) the completion of an additional term-year of service as a member of the Board. (f) Notwithstanding anything to the contrary herein,if an Option has been transferred in accordance with Section 5(c), the Option shall be exercisable solely by the transferee. The Option shall remain subject to the provisions of the Plan, including that it will be exercisable only to the extent that the optionee or optionee's estate would have been entitled to exercise it if the optionee had not transferred the Option. In the event of the death of the transferee prior to the expiration of the right to exercise the Option, the Option shall be exercisable by the executors,administrators, legatees and distributees of the transferee's estate, as the case may be for a period of one year following the date of the transferee's death but in no event be exercisable after the expiration of the Option period set forth in the Stock Option Agreement. The Option shall be subject to such other rules as the Board shall determine. 6.Adjustment in the Event of Change in Stock: In the event of changes in the outstanding Common Stock of the Company by reason of stock dividends, recapitalizations, mergers, consolidations, split-ups, combinations or exchanges of shares and the like, the aggregate number and kind of shares available under the Plan, and the number, kind and price of shares subject to outstanding Options shall be appropriately adjusted by the Board, whose determination shall be conclusive. 7.Miscellaneous Provisions: (a) Except as expressly provided for in the Plan, no Eligible Director or other person shall have any claim or right to be granted an Option under the Plan. Neither the Plan nor any action taken hereunder shall be construed as giving any Eligible Director any right to be retained in the service of the Company. (b) Except as provided for under Section 5(c), an optionee's rights and interest under the Plan may not be assigned or transferred in whole or in part either directly or by operation of law or otherwise (except in the event of an optionee's death, by will or the laws of descent and distribution), including, but not by way of limitations, execution, levy, garnishment, attachment, pledge, bankruptcy or in any other manner, and no such right or interest of any participant in the Plan shall be subject to any obligation or liability of such participant. (c) No Common Stock shares shall be issued hereunder unless counsel for the Company shall be satisfied that such issuance will be in compliance with applicable federal, state and other securities laws and regulations. E-10-3 (d) It shall be a condition to the obligation of the Company to issue Common Stock shares upon exercise of an Option, that the optionee (or any beneficiary or person entitled to act under subparagraph 5(d) (iv) above) pay to the Company, upon its demand, such amount as may be requested by the Company for the purpose of satisfying any liability to withhold federal,state, local or foreign income or other taxes. If the amount requested is not paid, the Company may refuse to issue Common Stock shares. (e) The expenses of the Plan shall be borne by the Company. (f) The Plan shall be unfunded. The Company shall not be required to establish any special or separate fund or to make any other segregation of assets to assure the issuance of shares upon exercise of any Option under the Plan and issuance of shares upon exercise of Options shall be subordinate to the claims of the Company's general creditors. (g) By accepting any Option or other benefit under the Plan, each optionee and each person claiming under or through such person shall be conclusively deemed to have indicated his acceptance and ratification of, and consent to, any action taken under the Plan by the Company or the Board. 8.Amendment or Discontinuance: The Plan may be amended at any time and from time to time by the Board as the Board shall deem advisable, including, but not limited to amendments necessary to qualify for any exemption or to comply with applicable law or regulations provided, however, that except as provided in Paragraph 6 above, the Board may not, without further approval by the shareholders of the Company in accordance with Paragraph 10 below, increase the maximum number of shares of Common Stock as to which Options may be granted under the Plan, increase the number of shares subject to an Option, reduce the minimum Option exercise price described in subparagraph 5(a) above, extend the period during which Options may be granted or exercised under the Plan or change the class of persons eligible to receive Options under the Plan. No amendment of the Plan shall materially and adversely affect any right of any optionee with respect to any Option theretofore granted without such optionee's written consent. 9. Termination: This Plan shall terminate upon the earlier of the following dates or events to occur: (a) upon the adoption of a resolution of the Board terminating the Plan; or (b)ten years from the date the Plan is initially approved and adopted by the shareholders of the Company in accordance with Paragraph 10 below. 10.Effective Date of Plan: The Plan shall become effective as of May 2, 2000 or such later date as the Board may determine, provided that the Company's stockholders shall have adopted the Plan at the Company's 2000 Annual Meeting of Stockholders. E-10-4 EX-15 3 Exhibit No. 15 May 15, 2000 Securities and Exchange Commission 450 Fifth Street, N.W. Washington, D.C. 20549 Commissioners: We are aware that our report dated April 20, 2000 on our review of interim financial information of Bristol-Myers Squibb Company (the "Company") as of and for the period ended March 31, 2000 and included in the Company's quarterly report on Form 10-Q for the quarter then ended is incorporated by reference in its Registration Statements on Form S-8 (Nos. 33-30856, 33-38411, 33-38587, 33-44788, 333-47403, 33-52691, 33-58187 and 333-02873), Post-Effective Amendment No. 2 on Form S-8 (No. 33-30756-02) to Form S-4 (No. 333-09519), Form S-3 (Nos. 33-33682 and 333-49227) and Pre-Effective Amendment No. 1 on Form S-3 (No. 33-62496). Such report is not a "report" or "part" of a registration statement prepared or certified by PricewaterhouseCoopers LLP within the meaning of Sections 7 and 11 of the Securities Act of 1933 and the independent accountants' liability under Section 11 does not extend to such report. Yours very truly, PricewaterhouseCoopers LLP New York, New York E-15-1 EX-27 4
5 Exhibit 27 for Bristol-Myers Squibb 1000000 3-MOS DEC-31-2000 MAR-31-2000 2468 212 3349 0 2046 9046 7833 3283 17036 5317 1333 0 0 219 8590 17036 5260 5260 1379 1379 1038 0 27 1678 457 1221 0 0 0 1221 .62 .61 Receivables are reported net of allowances for doubtful accounts Items reported as "zero" are not applicable or are immaterial to the consolidated financial position of the company
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