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10-Q
false
N.A.
2009-06-30
BRISTOL MYERS SQUIBB CO
0000014272
BMY
--12-31
Yes
No
Yes
Large Accelerated Filer
<div>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font size="2" face=
"Times New Roman"><b>Note 11. Cash, Cash Equivalents and Marketable
Securities</b></font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">Cash and cash equivalents at June 30,
2009 and December 31, 2008 of $7,507 million and $7,976
million, respectively, primarily consisted of U.S. government
agency securities. Cash equivalents primarily consist of highly
liquid investments with original maturities of three months or less
at the time of purchase and are recorded at cost, which
approximates fair value. The Company maintains cash and cash
equivalent balances in U.S. dollars and foreign currencies, which
are subject to currency rate risk.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">The following tables summarize the
Company’s current and non-current marketable securities,
which include U.S. dollar-denominated FRS and ARS, and are
accounted for as “available for sale” debt
securities:</font></p>
<table border="0" cellspacing="0" cellpadding="0" width="100%"
align="center"><!-- 5 First_Row * DO NOT REMOVE OR EDIT -->
<tbody>
<tr>
<td width="37%"></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="13" align="middle"><font size="1" face=
"Times New Roman"><b>June 30, 2009</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="14" align="middle"><font size="1" face=
"Times New Roman"><b>December 31, 2008</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr>
<td valign="bottom" nowrap="nowrap"><font size="1" face=
"Times New Roman">Dollars in Millions</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>Cost</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>Fair Value</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>Carrying<br />
Value</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>Unrealized<br />
(Loss)/Gain in<br />
Accumulated<br />
OCI</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>Cost</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>Fair Value</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>Carrying<br />
Value</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>Unrealized<br />
(Loss)/Gain in<br />
Accumulated<br />
OCI</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Current:</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 3em"><font size="2" face=
"Times New Roman">U.S. government agency securities</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">350</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">350</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">350</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 3em"><font size="2" face=
"Times New Roman">U.S. Treasury Bills</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">160</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">160</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">160</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">179</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">180</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">180</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">1</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 3em"><font size="2" face=
"Times New Roman">FDIC insured debt securities</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">100</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">100</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">100</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 3em"><font size="2" face=
"Times New Roman">Floating rate securities</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">3</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">3</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">3</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">115</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">109</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">109</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">(6</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 5em"><font size="2" face=
"Times New Roman">Total current</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">613</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">613</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">613</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">294</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">289</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">289</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">(5</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Non-current:</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 3em"><font size="2" face=
"Times New Roman">Corporate debt securities</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">394</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">393</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">393</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">(1</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 3em"><font size="2" face=
"Times New Roman">FDIC insured debt securities</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">200</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">201</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">201</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">1</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 3em"><font size="2" face=
"Times New Roman">U.S. government agency securities</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">200</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">200</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">200</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 3em"><font size="2" face=
"Times New Roman">Auction rate securities</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">169</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">94</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">94</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">169</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">94</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">94</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 3em"><font size="2" face=
"Times New Roman">Floating rate securities</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">131</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">93</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">93</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">(38</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">139</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">94</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">94</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">(45</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 3em"><font size="2" face=
"Times New Roman">Other</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">2</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">2</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">2</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
</tr>
<tr>
<td valign="top" nowrap="nowrap">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 5em"><font size="2" face=
"Times New Roman">Total non-current</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">    1,096</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">983</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">983</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">(38</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">308</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">188</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">188</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">(45</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
</tr>
<tr>
<td height="16" colspan="32"></td>
</tr>
<tr>
<td valign="top" colspan="31"><font size="2" face=
"Times New Roman">The following table summarizes the activity for
those financial assets where fair value measurements are estimated
utilizing Level 3 inputs (ARS and FRS):</font></td>
<td valign="top"><font size="2" face=
"Times New Roman">   </font></td>
</tr>
<tr>
<td height="16"></td>
<td height="16" colspan="15"></td>
<td height="16" colspan="16"></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="13" align="middle"><font size="1" face=
"Times New Roman"><b>2009</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="14" align="middle"><font size="1" face=
"Times New Roman"><b>2008</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>Current</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="6" align="middle"><font size="1" face=
"Times New Roman"><b>Non-current</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" colspan="2"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>Current</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="6" align="middle"><font size="1" face=
"Times New Roman"><b>Non-current</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" colspan="2"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr>
<td valign="bottom" nowrap="nowrap"><font size="1" face=
"Times New Roman">Dollars in Millions</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>FRS</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>FRS</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>ARS</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>Total</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>FRS</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>FRS</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>ARS</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>Total</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Carrying value at January 1</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">109</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">94</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">94</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">297</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">337</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">419</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">756</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Settlements</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">(112</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">(8</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">—</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">(120</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">(103</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">(49</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">(152</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Transfers between current and
non-current</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">—</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">(104</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">104</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Losses included in earnings</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">—</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">(23</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">(23</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Gains/(losses) included in OCI</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">6</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">7</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">—</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">13</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">(35</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">(12</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">(53</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">(100</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Carrying value at June 30</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">3</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">93</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">94</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">190</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">95</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">92</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">294</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" nowrap="nowrap" align="right"><font size="2"
face="Times New Roman">481</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
</tr>
</tbody>
</table>
</div>
-469000000
<div>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman"><b>Note 6. Discontinued
Operations</b></font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">As discussed in our 2008 Annual Report on
Form 10-K, the Company completed the divestiture of ConvaTec and
Medical Imaging. The results of the ConvaTec and Medical Imaging
businesses are included in net earnings from discontinued
operations for the three months and six months ended June 30,
2008. The Medical Imaging business divestiture was completed in the
first quarter of 2008, resulting in a pre-tax gain of $25 million
(after-tax loss of $43 million).</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">The following summarized financial
information related to the ConvaTec and Medical Imaging businesses
has been segregated from continuing operations in 2008 and reported
as discontinued operations through the date of disposition and does
not reflect the costs of certain services provided to ConvaTec and
Medical Imaging by the Company. These costs were not allocated by
the Company to ConvaTec and Medical Imaging and were for services
that included legal counsel, insurance, external audit fees,
payroll processing, certain human resource services and information
technology systems support.</font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px; FONT-SIZE: 12px">
 </p>
<table border="0" cellspacing="0" cellpadding="0" width="100%"
align="center"><!-- 5 First_Row * DO NOT REMOVE OR EDIT -->
<tbody>
<tr>
<td width="60%"></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="8" align="middle"><font size="1" face=
"Times New Roman"><b>Three Months Ended June 30, 2008</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="8" align="middle"><font size="1" face=
"Times New Roman"><b>Six Months Ended June 30, 2008</b></font></td>
</tr>
<tr>
<td valign="bottom" nowrap="nowrap"><font size="1" face=
"Times New Roman">Dollars in Millions</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>ConvaTec</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>Medical<br />
Imaging</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>Total</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>ConvaTec</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>Medical<br />
Imaging</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>Total</b></font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Net sales</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">322</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">8</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">330</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">612</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">26</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">638</font></td>
</tr>
<tr>
<td height="16"></td>
<td height="16" colspan="3"></td>
<td height="16" colspan="3"></td>
<td height="16" colspan="3"></td>
<td height="16" colspan="3"></td>
<td height="16" colspan="3"></td>
<td height="16" colspan="3"></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Earnings before income taxes</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">83</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">1</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">84</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">166</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">5</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">171</font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Curtailment losses and special termination
benefits</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">16</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">16</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">16</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">16</font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Provision for income taxes</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">26</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">26</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">55</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">1</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">56</font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Earnings, net of taxes</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">41</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">1</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">42</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">95</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">4</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">99</font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
</tr>
<!-- 6 Last_Row * DO NOT REMOVE OR EDIT --></tbody>
</table>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">The consolidated statements of cash flows
include the ConvaTec and Medical Imaging businesses through the
date of disposition. The Company uses a centralized approach for
cash management and financing of its operations; as such, debt was
not allocated to these businesses.</font></p>
</div>
0.81
0.81
<div>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font size="2" face=
"Times New Roman"><b>Note 2. Alliances and
Collaborations</b></font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman"><b><u>sanofi</u></b></font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">The Company has agreements with
sanofi-aventis (sanofi) for the codevelopment and
cocommercialization of AVAPRO*/AVALIDE*
(irbesartan/irbesartan-hydrochlorothiazide), an angiotensin II
receptor antagonist indicated for the treatment of hypertension and
diabetic nephropathy, and PLAVIX* (clopidogrel bisulfate), a
platelet aggregation inhibitor. The worldwide alliance operates
under the framework of two geographic territories; one in the
Americas (principally the U.S., Canada, Puerto Rico and Latin
American countries) and Australia and the other in Europe and Asia.
Accordingly, two territory partnerships were formed to manage
central expenses, such as marketing, research and development and
royalties, and to supply finished product to the individual
countries. In general, at the country level, agreements either to
copromote (whereby a partnership was formed between the parties to
sell each brand) or to comarket (whereby the parties operate and
sell their brands independently of each other) are in place. The
agreements expire on the later of (i) with respect to PLAVIX*,
2013 and, with respect to AVAPRO*/AVALIDE*, 2012 in the Americas
and Australia and 2013 in Europe and Asia and (ii) the
expiration of all patents and other exclusivity rights in the
applicable territory. The Company acts as the operating partner for
the territory covering the Americas and Australia and owns a 50.1%
majority controlling interest in this territory. Sanofi’s
ownership interest in this territory is 49.9%. As such, the Company
consolidates all country partnership results for this territory and
records sanofi’s share of the results as a noncontrolling
interest which was $424 million ($283 million after-tax) and $354
million ($238 million after-tax) for the three months ended
June 30, 2009 and 2008, respectively, and $815 million ($549
million after-tax) and $688 million ($464 million after-tax) for
the six months ended June 30, 2009 and 2008, respectively. The
Company recorded net sales in this territory and in comarketing
countries outside this territory (Germany, Italy, Spain and Greece)
of $1,851 million and $1,722 million for the three months ended
June 30, 2009 and 2008, respectively, and $3,588 million and
$3,335 million for the six months ended June 30, 2009 and
2008, respectively.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">Cash flows from operating activities of the
partnerships in the territory covering the Americas and Australia
are recorded as operating activities within the Company’s
consolidated statements of cash flows. Distributions of partnership
profits to sanofi and sanofi’s funding of ongoing partnership
operations occur on a routine basis and are also recorded within
operating activities on the Company’s consolidated statements
of cash flows.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">Sanofi acts as the operating partner for the
territory covering Europe and Asia and owns a 50.1% majority
financial controlling interest within this territory. The
Company’s ownership interest in the partnership within this
territory is 49.9%. The Company accounts for the investment in
partnership entities in this territory under the equity method and
records its share of the results in equity in net income of
affiliates in the consolidated statements of earnings. The
Company’s share of income from these partnership entities
before taxes was $154 million and $162 million for the three months
ended June 30, 2009 and 2008, respectively, and $301 million
and $324 million for the six months ended June 30, 2009 and
2008, respectively.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">The Company routinely receives distributions
of profits and provides funding for the ongoing operations of the
partnerships in the territory covering Europe and Asia. These
transactions are recorded as operating activities within the
Company’s consolidated statements of cash flows.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">The Company and sanofi have a separate
partnership governing the copromotion of irbesartan in the U.S.
Under this alliance, the Company recognized other income of $8
million in each of the three month periods ended June 30, 2009
and 2008, and $16 million in each of the six month periods ended
June 30, 2009 and 2008, related to the amortization of
deferred income associated with sanofi’s $350 million payment
to the Company for their acquisition of an interest in the
irbesartan license for the U.S. upon formation of the alliance. The
unrecognized portion of the deferred income amounted to $107
million and $123 million at June 30, 2009 and
December 31, 2008, respectively, and will continue to amortize
through 2012, the expected expiration of the license.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">The following is the summarized financial
information for the Company’s equity interests in the
partnerships with sanofi for the territory covering Europe and
Asia:</font></p>
<table border="0" cellspacing="0" cellpadding="0" width="100%"
align="center"><!-- 5 First_Row * DO NOT REMOVE OR EDIT -->
<tbody>
<tr>
<td width="72%"></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="5" align="middle"><font size="1" face=
"Times New Roman"><b>Three Months Ended June 30,</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="5" align="middle"><font size="1" face=
"Times New Roman"><b>Six Months Ended June 30,</b></font></td>
</tr>
<tr>
<td valign="bottom"><font size="1" face="Times New Roman">Dollars
in Millions</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>2009</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>2008</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>2009</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>2008</b></font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Net sales</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">772</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">926</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">1,527</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">1,823</font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Gross profit</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">577</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">708</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">1,144</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">1,391</font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Net income</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">295</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">328</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">584</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">660</font></td>
</tr>
<!-- 6 Last_Row * DO NOT REMOVE OR EDIT --></tbody>
</table>
<p style="MARGIN-TOP: 18px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman"><b><u>Otsuka</u></b></font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">The Company has a worldwide
commercialization agreement with Otsuka Pharmaceutical Co., Ltd.
(Otsuka), to codevelop and copromote with Otsuka, ABILIFY*
(aripiprazole), for the treatment of schizophrenia, bipolar mania
disorder and major depressive disorder, except in Japan, China,
Taiwan, North Korea, South Korea, the Philippines, Thailand,
Indonesia, Pakistan and Egypt. Under the terms of the agreement,
the Company purchases the product from Otsuka and performs finish
manufacturing for sale by the</font> <font size="2" face=
"Times New Roman">Company or Otsuka to third-party customers. The
product is currently copromoted with Otsuka in the U.S., United
Kingdom (UK), Germany, France and Spain. Currently in the U.S.,
Germany, France and Spain, where the product is invoiced to
third-party customers by the Company on behalf of Otsuka, the
Company records alliance revenue for its 65% contractual share of
third-party net sales and records all expenses related to the
product. The Company recognizes this alliance revenue when ABILIFY*
is shipped and all risks and rewards of ownership have transferred
to third-party customers. In the UK and Italy, where the Company is
presently the exclusive distributor for the product, the Company
records 100% of the net sales and related cost of products sold and
expenses. The Company also has an exclusive right to sell ABILIFY*
in other countries in Europe, the Americas and a number of
countries in Asia. In these countries, the Company records 100% of
the net sales and related cost of products sold.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">In April 2009, the Company and Otsuka
announced an agreement to extend the U.S. portion of the
commercialization and manufacturing agreement until the expected
loss of product exclusivity in April 2015. Under the terms of the
agreement, the Company paid Otsuka $400 million, which will be
amortized as a reduction of net sales through the extension period.
Beginning on January 1, 2010, the share of ABILIFY* U.S. net
sales that the Company records will change from 65% to the
following:</font></p>
<table border="0" cellspacing="0" cellpadding="0" width="100%"
align="center"><!-- 5 First_Row * DO NOT REMOVE OR EDIT -->
<tbody>
<tr>
<td width="83%"></td>
<td valign="bottom" width="15%"></td>
<td></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle"><font size="1" face=
"Times New Roman"><b>Share as a % of U.S. Net<br />
Sales</b></font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">2010</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="middle"><font size="2" face=
"Times New Roman">58.0%</font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">2011</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="middle"><font size="2" face=
"Times New Roman">53.5%</font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">2012</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="middle"><font size="2" face=
"Times New Roman">51.5%</font></td>
</tr>
<!-- 6 Last_Row * DO NOT REMOVE OR EDIT --></tbody>
</table>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">During this period, Otsuka will be
responsible for 30% of the expenses related to the
commercialization of ABILIFY*.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">Beginning January 1, 2013, and through
the expected loss of U.S. exclusivity in 2015, the Company will
receive the following percentages of U.S. annual net
sales:</font></p>
<table border="0" cellspacing="0" cellpadding="0" width="100%"
align="center"><!-- 5 First_Row * DO NOT REMOVE OR EDIT -->
<tbody>
<tr>
<td width="83%"></td>
<td valign="bottom" width="16%"></td>
<td></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle"><font size="1" face=
"Times New Roman"><b>Share as a % of U.S. Net<br />
Sales</b></font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">$0 to $2.7 billion</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="middle"><font size="2" face=
"Times New Roman">50%</font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">$2.7 billion to $3.2 billion</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="middle"><font size="2" face=
"Times New Roman">20%</font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">$3.2 billion to $3.7 billion</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="middle"><font size="2" face=
"Times New Roman">7%</font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">$3.7 billion to $4.0 billion</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="middle"><font size="2" face=
"Times New Roman">2%</font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">$4.0 billion to $4.2 billion</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="middle"><font size="2" face=
"Times New Roman">1%</font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">In excess of $4.2 billion</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="middle"><font size="2" face=
"Times New Roman">20%</font></td>
</tr>
<!-- 6 Last_Row * DO NOT REMOVE OR EDIT --></tbody>
</table>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">During this period, Otsuka will be
responsible for 50% of all expenses related to the
commercialization of ABILIFY*.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">In addition, the Company and Otsuka
announced that they have entered into an oncology collaboration for
SPRYCEL and IXEMPRA, which includes the U.S., Japan and European
Union (EU) markets (the Oncology Territory). Beginning in 2010
through 2020, the collaboration fees the Company will pay to Otsuka
annually are the following percentages of net sales of SPRYCEL and
IXEMPRA in the Oncology Territory:</font></p>
<table border="0" cellspacing="0" cellpadding="0" width="100%"
align="center"><!-- 5 First_Row * DO NOT REMOVE OR EDIT -->
<tbody>
<tr>
<td width="84%"></td>
<td valign="bottom" width="7%"></td>
<td></td>
<td valign="bottom" width="7%"></td>
<td></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="3" align="middle"><font size="1" face=
"Times New Roman"><b>% of Net Sales</b></font></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
nowrap="nowrap" align="middle"><font size="1" face=
"Times New Roman"><b>2010 - 2012</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
nowrap="nowrap" align="middle"><font size="1" face=
"Times New Roman"><b>2013 - 2020</b></font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">$0 to $400 million</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="middle"><font size="2" face=
"Times New Roman">30%</font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" align="middle"><font size="2" face=
"Times New Roman">65%</font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">$400 million to $600 million</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="middle"><font size="2" face=
"Times New Roman">5%</font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" align="middle"><font size="2" face=
"Times New Roman">12%</font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">$600 billion to $800 billion</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="middle"><font size="2" face=
"Times New Roman">3%</font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" align="middle"><font size="2" face=
"Times New Roman">3%</font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">$800 million to $1.0 billion</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="middle"><font size="2" face=
"Times New Roman">2%</font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" align="middle"><font size="2" face=
"Times New Roman">2%</font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">In excess of $1.0 billion</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="middle"><font size="2" face=
"Times New Roman">1%</font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" align="middle"><font size="2" face=
"Times New Roman">1%</font></td>
</tr>
<!-- 6 Last_Row * DO NOT REMOVE OR EDIT --></tbody>
</table>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">During these periods, Otsuka will contribute
(i) 20% of the first $175 million of certain commercial
operational expenses relating to the oncology products, and
(ii) 1% of such commercial operational expenses relating to
the products in the territory in excess of $175 million. Starting
in 2011, Otsuka will have the right to co-promote SPRYCEL with the
Company in the U.S. and Japan and in 2012, in the top five EU
markets.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">The U.S. extension and the oncology
collaboration include a change-of-control provision in the case of
an acquisition of the Company. If the acquiring company does not
have a competing product to ABILIFY*, then the new company will
assume the ABILIFY* agreement (as amended) and the oncology
collaboration as it exists today. If the acquiring company has a
product that competes with ABILIFY*, Otsuka can elect to request
the acquiring company to choose whether to divest ABILIFY* or the
competing product. In the scenario where ABILIFY* is divested,
Otsuka would be obligated to acquire the Company’s rights
under the ABILIFY* agreement (as amended). The agreements also
provide that in the event of a generic competitor to ABILIFY* after
January 1, 2010, the Company has the option of terminating the
ABILIFY* April 2009 amendment (with the agreement as
previously</font> <font size="2" face=
"Times New Roman">amended remaining in force). If the Company were
to exercise such option then either (i) the Company would
receive a payment from Otsuka according to a pre-determined
schedule and the oncology collaboration would terminate at the same
time or (ii) the oncology collaboration would continue for a
truncated period according to a pre-determined schedule.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">For the entire EU, the agreement remained
unchanged and will expire in June 2014. In other countries where
the Company has the exclusive right to sell ABILIFY*, the agreement
expires on the later of the 10th anniversary of the first
commercial sale in such country or expiration of the applicable
patent in such country.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">The Company recorded total revenue for
ABILIFY* of $643 million and $529 million for the three months
ended June 30, 2009 and 2008, respectively, and $1,232 million
and $983 million for the six months ended June 30, 2009 and
2008, respectively. The Company amortized into cost of products
sold $2 million in each of the three month periods ended
June 30, 2009 and 2008, and $4 million in each of the six
month periods ended June 30, 2009 and 2008, for previously
capitalized milestone payments. The unamortized capitalized payment
balance is recorded in other intangible assets, net and was $19
million at June 30, 2009 and $23 million at December 31,
2008, and will continue to amortize through 2012. The Company
amortized as a reduction of net sales $16 million for both the
three and six month periods ended June 30, 2009, related to
the $400 million extension payment. The unamortized portion of this
payment amounted to $384 million at June 30, 2009, and is
included in other assets, net.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman"><b><u>Lilly</u></b></font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">The Company has a commercialization
agreement with Eli Lilly and Company (Lilly) through Lilly’s
November 2008 acquisition of ImClone Systems Incorporated (ImClone)
for the codevelopment and copromotion of ERBITUX* (cetuximab) in
the U.S., which expires as to ERBITUX* in September of 2018. The
Company also has codevelopment and copromotion rights in Canada and
Japan. ERBITUX* is indicated for use in the treatment of patients
with metastatic colorectal cancer and for use in the treatment of
squamous cell carcinoma of the head and neck. Under the agreement
covering North America, Lilly receives a distribution fee based on
a flat rate of 39% of net sales in North America.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">In October 2007, the Company and ImClone
amended their codevelopment agreement with Merck KGaA to provide
for cocommercialization of ERBITUX* in Japan, which expires in
2032. Lilly has the ability to terminate the agreement after 2018
if it determines that it is commercially unreasonable for Lilly to
continue. ERBITUX* received marketing approval in Japan in July
2008 for the use of ERBITUX* in treating patients with advanced or
recurrent colorectal cancer.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">The Company recorded net sales for ERBITUX*
of $173 million and $196 million for the three months ended
June 30, 2009 and 2008, respectively, and $337 million and
$383 million for the six months ended June 30, 2009 and 2008,
respectively. The Company amortized into cost of products sold $10
million and $9 million for the three months ended June 30,
2009 and 2008, respectively, and $19 million in each of the six
month periods ended June 30, 2009 and 2008, for previously
capitalized milestone payments, which were accounted for as a
license acquisition. The unamortized portion of the approval
payments is recorded in other intangible assets, net and was $341
million at June 30, 2009 and $360 million at December 31,
2008, and will continue to amortize through 2018, the remaining
term of the agreement.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">Upon initial execution of the
commercialization agreement, the Company acquired an ownership
interest in ImClone which approximated 17% at the time of the
transaction noted below, and had been accounting for its investment
under the equity method. The Company recorded an equity loss in net
income of affiliates, which was adjusted for revenue recognized by
ImClone for pre-approved milestone payments made by the Company
prior to 2004, of $9 million and $5 million for the three and six
months ended June 30, 2008, respectively. The Company sold its
shares of ImClone for $1.0 billion and recognized a pre-tax gain of
$895 million in November 2008.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman"><b><u>Gilead</u></b></font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">The Company and Gilead Sciences, Inc.
(Gilead) have a joint venture to develop and commercialize ATRIPLA*
(efavirenz 600 mg/ emtricitabine 200 mg/ tenofovir disoproxil
fumarate 300 mg), a once-daily single tablet three-drug regimen
combining the Company’s SUSTIVA (efavirenz) and
Gilead’s TRUVADA* (emtricitabine and tenofovir disoproxil
fumarate), in the U.S., Canada and Europe.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">Gilead records all ATRIPLA* revenues in the
U.S., Canada and most countries in Europe and consolidates the
results of the joint venture in its operating results. The Company
records revenue for the bulk efavirenz component of ATRIPLA* upon
sales of that product to third-party customers. In a limited number
of EU countries, the Company records revenue for ATRIPLA* where the
Company agreed to purchase the product from Gilead and distribute
it to third-party customers. The Company recorded revenues of $206
million and $131 million for the three months ended June 30,
2009 and 2008, respectively, and $388 million and $250
million</font> <font size="2" face="Times New Roman">for the
six months ended June 30, 2009 and 2008, respectively, related
to ATRIPLA* sales. The Company accounts for its participation in
the U.S. joint venture under the equity method of accounting and
records its share of the joint venture results in equity in net
income of affiliates in the consolidated statements of earnings.
The Company recorded an equity loss on the U.S. joint venture with
Gilead of $3 million and $2 million for the three months ended
June 30, 2009 and 2008, respectively, and $5 million and $4
million for the six months ended June 30, 2009 and 2008,
respectively.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman"><b><u>AstraZeneca</u></b></font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">The Company maintains two worldwide
codevelopment and cocommercialization agreements with AstraZeneca
PLC (AstraZeneca), one for the worldwide (except for Japan)
codevelopment and cocommercialization of saxagliptin, a DPP-IV
inhibitor (Saxagliptin Agreement), and one for the worldwide
(including Japan) codevelopment and cocommercialization of
dapagliflozin, a sodium-glucose cotransporter-2 (SGLT2) inhibitor
(SGLT2 Agreement). Both compounds are being studied for the
treatment of diabetes and were discovered by the
Company.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">The $150 million in upfront and milestone
payments received by the Company in the two year period ended
December 31, 2008 were deferred and are being recognized over
the useful life of the products into other income. The Company
amortized into other income $3 million and $2 million of these
payments in the three months ended June 30, 2009 and 2008,
respectively, and $6 million and $4 million in the six months ended
June 30, 2009 and 2008, respectively. The unamortized portion
of the upfront and milestone payments was $128 million at
June 30, 2009 and $134 million at December 31, 2008.
Additional milestone payments are expected to be received by the
Company upon the successful achievement of various development and
regulatory events as well as sales-related milestones. Under the
Saxagliptin Agreement, the Company could receive up to an
additional $250 million if all development and regulatory
milestones for saxagliptin are met and up to an additional $300
million if all sales-based milestones for saxagliptin are met.
Under the SGLT2 Agreement, the Company could receive up to an
additional $350 million if all development and regulatory
milestones for dapagliflozin are met and up to an additional $390
million if all sales-based milestones for dapagliflozin are met.
Under each agreement, the Company and AstraZeneca also share in
development and commercialization costs. The majority of
development costs under the initial development plans through 2009
will be paid by AstraZeneca (with AstraZeneca bearing all the costs
of the initial agreed upon development plan for dapagliflozin in
Japan) and any additional development costs will generally be
shared equally. The Company records development costs related to
saxagliptin and dapagliflozin net of AstraZeneca’s share in
research and development expenses. The Company incurred
reimbursable research and development expenses of $5 million
and $43 million for the three months ended June 30, 2009 and
2008, respectively, and $29 million and $81 million for the six
months ended June 30, 2009 and 2008, respectively. Under each
agreement, the two companies will jointly develop the clinical and
marketing strategy and share commercialization expenses and
profits/losses equally on a global basis (excluding, in the case of
saxagliptin, Japan), and the Company will manufacture both
products. The companies will cocommercialize dapagliflozin in Japan
and share profits/losses equally. Under each agreement, the Company
has the option to decline involvement in cocommercialization in a
given country and instead receive a royalty.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman"><b><u>Pfizer</u></b></font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">The Company and Pfizer Inc. (Pfizer)
maintain a worldwide codevelopment and cocommercialization
agreement for apixaban, an anticoagulant discovered by the Company
being studied for the prevention and treatment of a broad range of
venous and arterial thrombotic conditions.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">The Company received $290 million in upfront
payments in the two year period ended December 31, 2008. In
addition, the Company received a $150 million milestone payment in
April 2009 for the commencement of Phase III clinical trials for
prevention of major adverse cardiovascular events in acute coronary
syndrome. The Company amortized into other income $7 million
and $4 million of the upfront and milestone payments in the three
months ended June 30, 2009 and 2008, respectively, and $12
million and $9 million for the six months ended June 30, 2009
and 2008, respectively. The unamortized portion of the upfront and
milestone payments was $399 million at June 30, 2009 and $261
million at December 31, 2008. Pfizer will fund 60% of all
development costs effective January 1, 2007 going forward, and
the Company will fund 40%. The Company records apixaban development
costs net of Pfizer’s share in research and development
expenses. The Company incurred reimbursable research and
development expenses of $45 million and $40 million for the
three months ended June 30, 2009 and 2008, respectively, and
$87 million and $83 million for the six months ended June 30,
2009 and 2008, respectively. The Company may also receive
additional payments from Pfizer of up to an additional $630 million
based on development and regulatory milestones. The companies will
jointly develop the clinical and marketing strategy, will share
commercialization expenses and profits/losses equally on a global
basis, and will manufacture product under this
arrangement.</font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font size=
"1"> </font></p>
<!--##PBStart##-->
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"> </p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font size="2" face=
"Times New Roman"><b><u>Medarex</u></b></font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">The Company maintains a worldwide
collaboration with Medarex, Inc. (Medarex) to codevelop and
copromote ipilimumab, a fully human antibody currently in Phase III
development for the treatment of metastatic melanoma.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">Future milestone payments would be required
to be made by the Company to Medarex based upon the successful
achievement of various regulatory and sales-related stages. The
Company and Medarex will also share in future development costs.
Medarex could receive up to $220 million if all regulatory
milestones for ipilimumab are met and up to $275 million if
sales-related milestones for ipilimumab are met. In the U.S.,
Medarex will receive royalties unless it exercises an option to
copromote in the U.S., in which event it will share in
commercialization costs and receive/bear up to 45% of the
profits/losses with the Company in the U.S. The Company has an
exclusive license outside of the U.S. and will pay royalties to
Medarex.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">The Company previously invested $25 million
in Medarex which represents 2.4% of their outstanding shares. See
“—Note 22. Subsequent Event.”</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman"><b><u>Exelixis</u></b></font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">In December 2008, the Company and Exelixis,
Inc. (Exelixis) entered into a global codevelopment and
cocommercialization arrangement for XL184 (a MET/VEG/RET
inhibitor), an oral anti-cancer compound, and a license for XL281
with utility in RAS and RAF mutant tumors under development by
Exelixis. Under the terms of the arrangement, the Company paid
Exelixis $195 million in 2008 upon execution of the agreement, and
paid an additional $20 million in the first six months of 2009 and
$25 million in July 2009, all of which was expensed as research and
development in 2008. Exelixis will fund the first $100 million of
development for XL184. If Exelixis elects to continue sharing
development, Exelixis will fund 35% of future global development
costs (excluding Japan) and share U.S. profits/losses equally and
has an option to copromote in the U.S.; failing such elections,
Exelixis receives milestones and royalties on U.S. sales. The
Company will fund 100% of development costs in Japan. In addition
to royalties on non-U.S. sales, the Company could pay up to $610
million if all development and regulatory milestones are met on
both compounds and up to an additional $300 million if all
sales-based milestones are met on both compounds.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">In addition, the Company and Exelixis have a
history of collaborations to identify, develop and promote oncology
targets. During December 2006, the Company and Exelixis entered
into an oncology collaboration and license agreement under which
Exelixis will pursue the development of three small molecule INDs
for codevelopment and copromotion. Under the terms of this
agreement, the Company paid Exelixis $60 million of upfront fees in
2007. During 2008, the Company paid Exelixis $40 million in IND
acceptance milestones. If Exelixis elects to fund development costs
and copromote in the U.S., both parties will equally share
development costs and profits. If Exelixis opts out of the
codevelopment and copromotion agreement, the Company will take over
full development and U.S. commercial rights, and, if successful,
will pay Exelixis development and regulatory milestones up to $190
million and up to an additional $90 million of sales-based
milestones, as well as royalties.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">Since July 2001, the Company has held an
equity investment in Exelixis, which at June 30, 2009
represented less than 1% of their outstanding shares.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman"><b><u>ZymoGenetics</u></b></font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">In January 2009, the Company and
ZymoGenetics, Inc. (ZymoGenetics) entered into a global
codevelopment arrangement in the U.S. for PEG-Interferon lambda, a
novel type 3 interferon for the treatment of hepatitis C. Under the
terms of the arrangement, the Company paid ZymoGenetics $105
million in the first six months of 2009 and an additional $25
million in July 2009, all of which was expensed as research and
development. ZymoGenetics will fund the first $100 million of
global development for PEG-Interferon lambda after which,
ZymoGenetics will fund 20% of development costs in the U.S. and
Europe and the Company will fund 100% of the development costs in
the rest of the world. If ZymoGenetics elects to continue sharing
development and commercialization costs in the U.S., ZymoGenetics
will share 40% of U.S. profits/losses and has an option to
copromote in the U.S. Failing such election to fund development
costs in the U.S., ZymoGenetics will receive royalties on U.S.
sales. The Company will pay ZymoGenetics royalties on all non-U.S.
sales. In addition, the Company could pay up to $405 million if all
hepatitis C development and regulatory milestones are met; up to
$287 million if development and regulatory milestones for other
potential indications are met; and up to an additional $285 million
if all sales-based milestones are met.</font></p>
</div>
0.62
2080000000
<div>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman"><b>Note 19. Short-Term Borrowings and
Long-Term Debt</b></font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">Short-term borrowings were $124 million and
$154 million at June 30, 2009 and December 31, 2008,
respectively.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">The components of long-term debt were as
follows:</font></p>
<table border="0" cellspacing="0" cellpadding="0" width="100%"
align="center"><!-- 5 First_Row * DO NOT REMOVE OR EDIT -->
<tbody>
<tr>
<td width="82%"></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td valign="bottom" nowrap="nowrap"><font size="1" face=
"Times New Roman">Dollars in Millions</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>June 30,<br />
2009</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>December 31,<br />
2008</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Principal Value</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 3em"><font size="2" face=
"Times New Roman">6.125% Notes due 2038</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">1,000</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">1,000</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 3em"><font size="2" face=
"Times New Roman">5.875% Notes due 2036</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">960</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">1,023</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 3em"><font size="2" face=
"Times New Roman">4.375% Euro Notes due 2016</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">699</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">698</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 3em"><font size="2" face=
"Times New Roman">4.625% Euro Notes due 2021</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">699</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">698</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 3em"><font size="2" face=
"Times New Roman">5.45% Notes due 2018</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">600</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">600</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 3em"><font size="2" face=
"Times New Roman">5.25% Notes due 2013</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">597</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">597</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 3em"><font size="2" face=
"Times New Roman">6.80% Debentures due 2026</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">350</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">350</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 3em"><font size="2" face=
"Times New Roman">7.15% Debentures due 2023</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">339</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">339</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 3em"><font size="2" face=
"Times New Roman">6.88% Debentures due 2097</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">287</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">287</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 3em"><font size="2" face=
"Times New Roman">Floating Rate Convertible Senior Debentures due
2023</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">50</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">50</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 3em"><font size="2" face=
"Times New Roman">5.75% Industrial Revenue Bonds due
2024</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">35</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">35</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 3em"><font size="2" face=
"Times New Roman">1.81% Yen Notes due 2010</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">37</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">39</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 3em"><font size="2" face=
"Times New Roman">Variable Rate Industrial Revenue Bonds due
2030</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">15</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">15</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 3em"><font size="2" face=
"Times New Roman">Other</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">3</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">6</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Subtotal</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">5,671</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">5,737</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Adjustments to Principal Value</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 3em"><font size="2" face=
"Times New Roman">Fair value of interest rate swaps</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">197</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">647</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 3em"><font size="2" face=
"Times New Roman">Unamortized basis adjustment from swap
terminations</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">397</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">233</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 3em"><font size="2" face=
"Times New Roman">Unamortized bond discounts</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(30</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(32</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Total</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">    6,235</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">    6,585</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
</tr>
<!-- 6 Last_Row * DO NOT REMOVE OR EDIT --></tbody>
</table>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font size=
"1"> </font><font size="1"> </font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font size="2" face=
"Times New Roman">In June 2009, the Company repurchased
approximately $63 million principal amount of its 5.875% Notes due
2036 for a premium of $4 million. The total gain attributed to this
transaction amounted to $11 million, which also included the
termination of approximately $35 million notional amount of
fixed-to-floating interest rate swaps for proceeds of $5
million.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">In June 2009, the Company executed several
fixed-to-floating interest rate swaps to convert $200 million of
its 5.45% Notes due 2018 from fixed rate debt to variable rate
debt. In April 2009, the Company executed several fixed-to-floating
interest rate swaps to convert $597 million of its 5.25% Notes due
2013 from fixed rate debt to variable rate debt. In January 2009,
the Company terminated $1,061 million notional amount of
fixed-to-floating interest rate swap agreements for proceeds of
$187 million. The basis adjustment on the debt, which was equal to
the proceeds from this swap termination, is being recognized as a
reduction to interest expense over the remaining life of the
underlying debt. For further discussion of the Company’s
interest rate swaps, refer to “—Note 20. Financial
Instruments.”</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">In February 2009, Mead Johnson &
Company as borrower and Mead Johnson as guarantor, both of which
are indirect, majority-owned subsidiaries of the Company, entered
into a three year syndicated revolving credit facility agreement.
The facility is unsecured and repayable on maturity in February
2012, subject to annual extensions if sufficient lenders agree. The
maximum amount of outstanding borrowings and letters of credit
permitted at any one time is $410 million, which may be increased
up to $500 million, at the option of Mead Johnson and with the
consent of the lenders, subject to customary conditions contained
in the facility. There were no borrowings outstanding under this
revolving credit facility at June 30, 2009.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">The Company obtained a $2.0 billion,
revolving credit facility from a syndicate of lenders maturing in
December 2011, which is extendable with the consent of the lenders.
This facility contains customary terms and conditions, including a
financial covenant whereby the ratio of consolidated debt to
consolidated capital cannot exceed 50% at the end of each quarter.
The Company has been in compliance with this covenant since the
inception of this new facility. There were no borrowings
outstanding under this revolving credit facility at June 30,
2009.</font></p>
</div>
101000000
0
2874000000
7274000000
112000000
231000000
<div>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman"><b>Note 20. Financial
Instruments</b></font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">The Company is exposed to market risk due to
changes in currency exchange rates, interest rates and to a lesser
extent natural gas pricing. To reduce that risk, the Company enters
into certain derivative financial instruments, when available on a
cost-effective basis, to hedge its underlying economic exposure.
Derivative financial instruments are not used for speculative
purposes.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman"><b><i>Cash Flow Hedges</i></b></font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman"><i>Foreign Exchange contracts —</i>
The Company utilizes foreign currency contracts to hedge forecasted
transactions, primarily intercompany transactions, on certain
foreign currencies and designates these derivative instruments as
foreign currency cash flow hedges when appropriate. The notional
and fair value amounts of the Company’s foreign exchange
derivative contracts at June 30, 2009 and December 31,
2008 were $1,194 million and $10 million net liabilities and $1,151
million and $49 million net assets, respectively. For these
derivatives, the majority of which qualify as hedges of probable
forecasted cash flows, the effective portion of changes in fair
value is temporarily reported in accumulated OCI and recognized in
earnings when the hedged item affects earnings.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">At June 30, 2009, the balance of
deferred losses on foreign exchange forward contracts that
qualified for cash flow hedge accounting included in accumulated
OCI on a pre-tax basis was $7 million ($4 million net of taxes),
all of which is expected to be reclassified into earnings within
the next 17 months.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">The Company assesses effectiveness at the
inception of the hedge and on a quarterly basis. These assessments
determine whether derivatives designated as qualifying hedges
continue to be highly effective in offsetting changes in the cash
flows of hedged items. Any ineffective portion of change in fair
value is not deferred in accumulated OCI and is included in current
period earnings. For the three and six months ended June 30,
2009, the impact of hedge ineffectiveness on earnings was not
significant. The Company will discontinue cash flow hedge
accounting when the forecasted transaction is no longer probable of
occurring on the originally forecasted date, or 60 days thereafter,
or when the hedge is no longer effective. For the three and six
months ended June 30, 2009, the impact of discontinued foreign
exchange hedges was a pre-tax loss of $4 million and $1 million,
respectively, and was reported in other (income)/expense,
net.</font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font size=
"1"> </font></p>
<!--##PBStart##-->
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font size=
"1"> </font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font size="2" face=
"Times New Roman"><i>Natural Gas contracts —</i> The Company
utilizes forward contracts to hedge forecasted purchases of natural
gas and designates these derivative instruments as cash flow hedges
when appropriate. For these derivatives the effective portion of
changes in fair value is temporarily reported in accumulated OCI
and recognized in earnings when the hedged item affects earnings.
The notional and fair value amounts of the Company’s natural
gas derivative contracts at June 30, 2009 and
December 31, 2008 were 1 million decatherms and $5
million liability and 3 million decatherms and $7 million
liability, respectively.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">At June 30, 2009, the balance of
deferred losses on natural gas forward contracts that qualified for
cash flow hedge accounting included in accumulated OCI on a pre-tax
basis was $2 million ($1 million net of taxes), all of which is
expected to be reclassified into earnings within the next six
months.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman"><b><i>Non-Qualifying Foreign Exchange
Contracts</i></b></font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">In addition to the foreign exchange
contracts noted above, the Company utilizes forward contracts to
hedge foreign currency-denominated monetary assets and liabilities.
The primary objective of these forward contracts is to protect the
U.S. dollar value of foreign currency-denominated monetary assets
and liabilities from the effects of volatility in foreign exchange
rates that might occur prior to their receipt or settlement in U.S.
dollars. These forward contracts are not designated as hedges and
are marked to fair value through other (income)/expense, net, as
they occur, and substantially offset the change in spot value of
the underlying foreign currency denominated monetary asset or
liability. The notional and fair value amounts of purchased and
sold foreign exchange forward contracts at June 30, 2009 were
not material.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">Furthermore, the Company uses foreign
exchange forward contracts to offset its exposure to certain assets
and liabilities and earnings denominated in certain foreign
currencies. These foreign exchange forward contracts are not
designated as hedges; therefore, changes in the fair value of these
derivatives are recognized in earnings in other (income)/expense,
net, as they occur. The notional and fair value amounts of
purchased and sold foreign exchange forward contracts at
June 30, 2009 were a $15 million and a $2 million net
liability, respectively.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman"><b><i>Hedge of Net
Investment</i></b></font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">The Company uses non-U.S. dollar borrowings,
primarily the €500 Million Notes due 2016 and the €500
Million Notes due 2021, to hedge the foreign currency exposures of
the Company’s net investment in certain foreign affiliates.
These non-U.S. dollar borrowings are designated as a hedge of net
investment. The effective portion of foreign exchange gains or
losses on these hedges is recorded as part of the foreign currency
translation (CTA) component of accumulated OCI. At June 30,
2009, $133 million was recorded in the CTA component of accumulated
OCI.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman"><b><i>Fair Value Hedges</i></b></font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman"><i>Interest Rate contracts —</i> The
Company uses derivative instruments as part of its interest rate
risk management strategy. The derivative instruments used are
comprised principally of fixed-to-floating interest rate swaps,
which are designated in fair-value hedge relationships. The total
notional amounts of outstanding interest rate swaps were $2.3
billion and €1 billion ($1.4 billion) at June 30, 2009.
For the three and six months ended June 30, 2009, the effect
of the interest rate swaps was to decrease interest expense by $29
million and $53 million, respectively.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">The swaps, as well as the underlying debt
for the benchmark risk being hedged, are recorded at fair value.
Swaps are generally held to maturity and are intended to create an
appropriate balance of fixed and floating rate debt for the
Company. The basis adjustment to the debt hedged in qualifying fair
value hedging relationships where the underlying swap is terminated
prior to maturity is amortized to earnings as an adjustment to
interest expense over the remaining life of the debt.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">In June 2009, the Company executed several
fixed-to-floating interest rate swaps to convert $200 million of
its 5.45% Notes due 2018 from fixed rate debt to variable rate
debt.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">In April 2009, the Company executed several
fixed-to-floating interest rate swaps to convert $597 million of
its 5.25% Notes due 2013 from fixed rate debt to variable rate
debt.</font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font size=
"1"> </font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font size="2" face=
"Times New Roman">In January 2009, the Company terminated $1,061
million notional amount of fixed-to-floating interest rate swap
agreements for proceeds of $187 million.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">The effective portion of the fair value of
swaps that qualify as cash flow hedges that are terminated, but for
which the hedged debt remains outstanding, are reported in
accumulated OCI and amortized to earnings as an adjustment to
interest expense over the remaining life of the debt. At
June 30, 2009, the balance of deferred losses on forward
starting swaps included in accumulated OCI was $19 million, which
will be reclassified into earnings over the remaining life of the
debt.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">For further discussion on the
Company’s debt refer to “—Note 19. Short-Term
Borrowings and Long-Term Debt.”</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">The following table summarizes the interest
rate swaps outstanding at June 30, 2009:</font></p>
<table border="0" cellspacing="0" cellpadding="0" width="100%"
align="center"><!-- 5 First_Row * DO NOT REMOVE OR EDIT -->
<tbody>
<tr>
<td width="39%"></td>
<td valign="bottom" width="9%"></td>
<td></td>
<td></td>
<td valign="bottom" width="9%"></td>
<td></td>
<td valign="bottom" width="9%"></td>
<td></td>
<td valign="bottom" width="9%"></td>
<td></td>
<td valign="bottom" width="9%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td valign="bottom" nowrap="nowrap"><font size="1" face=
"Times New Roman">Dollars in Millions</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>Notional Amount of<br />
Underlying Debt</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle"><font size="1" face="Times New Roman"><b>Variable
Rate<br />
Received</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle"><font size="1" face="Times New Roman"><b>Year of<br />
Transaction</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle"><font size="1" face=
"Times New Roman"><b>Maturity</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>Fair<br />
Value</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Swaps associated with:</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 3em"><font size="2" face=
"Times New Roman">5.25% Note due 2013</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">597</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face="Times New Roman">1 month
U.S. $ LIBOR +3.084%</font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">2009</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">2013</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(13</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 3em"><font size="2" face=
"Times New Roman">5.45% Notes due 2018</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">400</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face="Times New Roman">1 month
U.S. $ LIBOR +1.065%</font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">2008</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">2018</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">22</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 3em"><font size="2" face=
"Times New Roman">5.45% Notes due 2018</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">200</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face="Times New Roman">1 month
U.S. $ LIBOR +1.541%</font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">2009</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">2018</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">3</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 3em"><font size="2" face=
"Times New Roman">4.375 €500 Million Notes due
2016</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">699</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face="Times New Roman">3 month
EUR € EURIBOR +0.40%</font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">2006</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">2016</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">26</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr>
<td valign="top" nowrap="nowrap">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 3em"><font size="2" face=
"Times New Roman">4.625% €500 Million Notes due
2021</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">699</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">3 month EUR € EURIBOR +0.56%</font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">2006</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">2021</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">13</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 3em"><font size="2" face=
"Times New Roman">7.15% Notes due 2023</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">175</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face="Times New Roman">1 month
U.S. $ LIBOR +1.66%</font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">2004</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">2023</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">26</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 3em"><font size="2" face=
"Times New Roman">5.875% Notes due 2036</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">537</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face="Times New Roman">1 month
U.S. $ LIBOR +0.62%</font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">2006</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">2036</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">83</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 3em"><font size="2" face=
"Times New Roman">6.125% Notes due 2038</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">200</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face="Times New Roman">1 month
U.S. $ LIBOR +1.3255%</font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">2008</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">2038</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">18</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 3em"><font size="2" face=
"Times New Roman">6.125% Notes due 2038</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">200</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face="Times New Roman">1 month
U.S. $ LIBOR +1.292%</font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">2008</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">2038</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">19</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Total interest rate swaps</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">3,707</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">    197</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom"> </td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
</tr>
<!-- 6 Last_Row * DO NOT REMOVE OR EDIT --></tbody>
</table>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">The following table summarizes the
Company’s fair value of outstanding derivatives at
June 30, 2009 and December 31, 2008 on the consolidated
balance sheets:</font></p>
<table border="0" cellspacing="0" cellpadding="0" width="100%"
align="center"><!-- 5 First_Row * DO NOT REMOVE OR EDIT -->
<tbody>
<tr>
<td width="40%"></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td valign="bottom" nowrap="nowrap"><font size="1" face=
"Times New Roman">Dollars in Millions</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle"><font size="1" face=
"Times New Roman"><b>Balance Sheet Location</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>2009</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>2008</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle"><font size="1" face=
"Times New Roman"><b>Balance Sheet Location</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>2009</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>2008</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr>
<td valign="top" colspan="9">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman"><i>Derivatives designated as hedging
instruments:</i></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 2em"><font size="2" face=
"Times New Roman">Interest rate contracts</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="middle"><font size="2" face=
"Times New Roman">Other assets</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">    210</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">647</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face="Times New Roman">Accrued
expenses</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(13</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 2em"><font size="2" face=
"Times New Roman">Foreign exchange contracts</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="middle"><font size="2" face=
"Times New Roman">Other assets</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">27</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">89</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face="Times New Roman">Accrued
expenses</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(37</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(40</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 2em"><font size="2" face=
"Times New Roman">Hedge of net investments</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face="Times New Roman">Long-term
debt</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(1,220</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(1,319</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 2em"><font size="2" face=
"Times New Roman">Natural gas contracts</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face="Times New Roman">Accrued
expenses</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(5</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(7</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Subtotal</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">237</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">736</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(1,275</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(1,366</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
</tr>
<tr>
<td height="16"></td>
<td height="16" colspan="2"></td>
<td height="16" colspan="3"></td>
<td height="16" colspan="3"></td>
<td height="16" colspan="2"></td>
<td height="16" colspan="4"></td>
<td height="16" colspan="4"></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman"><i>Derivatives not designated as hedging
instruments:</i></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 2em"><font size="2" face=
"Times New Roman">Foreign exchange contracts</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="middle"><font size="2" face=
"Times New Roman">Other assets</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">1</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">Accrued expenses</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(2</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(5</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Total Derivatives</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">237</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">    737</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">    (1,277</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">    (1,371</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
</tr>
<!-- 6 Last_Row * DO NOT REMOVE OR EDIT --></tbody>
</table>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">The impact on earnings from interest rate
swaps that qualified as fair value hedges for the three and six
months ended June 30, 2009 and 2008 was as follows:</font></p>
<table border="0" cellspacing="0" cellpadding="0" width="100%"
align="center"><!-- 5 First_Row * DO NOT REMOVE OR EDIT -->
<tbody>
<tr>
<td width="64%"></td>
<td valign="bottom" width="8%"></td>
<td></td>
<td></td>
<td valign="bottom" width="8%"></td>
<td></td>
<td></td>
<td valign="bottom" width="8%"></td>
<td></td>
<td></td>
<td valign="bottom" width="8%"></td>
<td></td>
<td></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="5" align="middle"><font size="1" face=
"Times New Roman"><b>Three Months Ended June 30,</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="5" align="middle"><font size="1" face=
"Times New Roman"><b>Six Months Ended June 30,</b></font></td>
</tr>
<tr>
<td valign="bottom" nowrap="nowrap"><font size="1" face=
"Times New Roman">Dollars in Millions</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>2009</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>2008</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>2009</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>2008</b></font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Interest expense</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">29</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">15</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">53</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">22</font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Amortized basis adjustment from swap terminations
recognized in interest expense</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">7</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">12</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Total</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">36</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">15</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">65</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">22</font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
</tr>
<!-- 6 Last_Row * DO NOT REMOVE OR EDIT --></tbody>
</table>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font size=
"1"> </font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font size="2" face=
"Times New Roman">The impact on OCI and earnings from foreign
exchange contracts, natural gas contracts, and forward starting
swaps that qualified as cash flow hedges for the six months ended
June 30, 2009 and 2008 was as follows:</font></p>
<table border="0" cellspacing="0" cellpadding="0" width="100%"
align="center"><!-- 5 First_Row * DO NOT REMOVE OR EDIT -->
<tbody>
<tr>
<td width="58%"></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="6" align="middle"><font size="1" face=
"Times New Roman"><b>Foreign Exchange<br />
Contracts</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="6" align="middle"><font size="1" face=
"Times New Roman"><b>Natural Gas<br />
Contracts</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="6" align="middle"><font size="1" face=
"Times New Roman"><b>Forward Starting<br />
Swaps</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="6" align="middle"><font size="1" face=
"Times New Roman"><b>Total Impact</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr>
<td valign="bottom" nowrap="nowrap"><font size="1" face=
"Times New Roman">Dollars in Millions</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>2009</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>2008</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>2009</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>2008</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>2009</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>2008</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>2009</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>2008</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Net carrying amount at January 1</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">35</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(38</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(2</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(19</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">14</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(38</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Cash flow hedges deferred in OCI</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">3</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(66</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">2</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(19</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">5</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(85</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Cash flow hedges reclassified to cost of products
sold (effective portion)</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(55</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">51</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(55</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">51</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Change in deferred taxes</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">13</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">3</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(1</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">12</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">3</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Net carrying amount at June 30</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(4</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(50</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">    (1</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">    —</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">    (19</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">    (19</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">    (24</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">    (69</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
</tr>
<!-- 6 Last_Row * DO NOT REMOVE OR EDIT --></tbody>
</table>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">The impact on OCI and earnings from
non-derivative debt designated as a hedge of net investment for the
six months ended June 30, 2009 and 2008 was as
follows:</font></p>
<table border="0" cellspacing="0" cellpadding="0" width="100%"
align="center"><!-- 5 First_Row * DO NOT REMOVE OR EDIT -->
<tbody>
<tr>
<td width="88%"></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="6" align="middle"><font size="1" face=
"Times New Roman"><b>Net Investment Hedges</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr>
<td valign="bottom" nowrap="nowrap"><font size="1" face=
"Times New Roman">Dollars in Millions</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>2009</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>2008</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Net carrying amount at January 1</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(131</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(168</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Change in spot value of non-derivative debt
designated as a hedge deferred in CTA/OCI</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(2</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(115</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Net carrying amount at June 30</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(133</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(283</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
</tr>
<!-- 6 Last_Row * DO NOT REMOVE OR EDIT --></tbody>
</table>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">The impact on earnings from non-qualifying
derivatives recorded in other (income)/expense, net for the three
and six months ended June 30, 2009 and 2008 was as
follows:</font></p>
<table border="0" cellspacing="0" cellpadding="0" width="100%"
align="center"><!-- 5 First_Row * DO NOT REMOVE OR EDIT -->
<tbody>
<tr>
<td width="64%"></td>
<td valign="bottom" width="8%"></td>
<td></td>
<td></td>
<td valign="bottom" width="8%"></td>
<td></td>
<td></td>
<td valign="bottom" width="8%"></td>
<td></td>
<td></td>
<td valign="bottom" width="8%"></td>
<td></td>
<td></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="5" align="middle"><font size="1" face=
"Times New Roman"><b>Three Months Ended June 30,</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="5" align="middle"><font size="1" face=
"Times New Roman"><b>Six Months Ended June 30,</b></font></td>
</tr>
<tr>
<td valign="bottom" nowrap="nowrap"><font size="1" face=
"Times New Roman">Dollars in Millions</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>2009</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>2008</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>2009</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>2008</b></font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Loss recognized in other (income)/expense,
net</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">2</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">6</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">14</font></td>
</tr>
<!-- 6 Last_Row * DO NOT REMOVE OR EDIT --></tbody>
</table>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">For a discussion on the fair value of
financial instruments, see “—Note 10. Fair Value
Measurement.” For a discussion on cash, cash equivalents and
marketable securities, see “—Note 11. Cash, Cash
Equivalents and Marketable Securities.”</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">The Company’s derivative financial
instruments present certain market and counterparty risks; however,
concentration of counterparty risk is mitigated as the Company
deals with a variety of major banks worldwide with
Standard & Poor’s and Moody’s long-term debt
ratings of A or higher. In addition, only conventional derivative
financial instruments are utilized. The Company would not be
materially impacted if any of the counterparties to the derivative
financial instruments outstanding at June 30, 2009 failed to
perform according to the terms of its agreement. At this time, the
Company does not require collateral or any other form of
securitization to be furnished by the counterparties to its
derivative financial instruments.</font></p>
</div>
<div>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font size="2" face=
"Times New Roman"><b>Note 18. Employee Stock Benefit
Plans</b></font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font size=
"1"> </font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font size="2" face=
"Times New Roman">The following table summarizes stock-based
compensation expense, net of taxes:</font></p>
<table border="0" cellspacing="0" cellpadding="0" width="100%"
align="center"><!-- 5 First_Row * DO NOT REMOVE OR EDIT -->
<tbody>
<tr>
<td width="68%"></td>
<td valign="bottom" width="6%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="6%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="6%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="6%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="6" align="middle"><font size="1" face=
"Times New Roman"><b>Three Months Ended June 30,</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="6" align="middle"><font size="1" face=
"Times New Roman"><b>Six Months Ended June 30,</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr>
<td valign="bottom" nowrap="nowrap"><font size="1" face=
"Times New Roman">Dollars in Millions</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>2009</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>2008</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>2009</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>2008</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Stock options</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">18</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">18</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">36</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">39</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Restricted stock</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">19</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">17</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">35</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">40</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Long-term performance awards</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">8</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">5</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">17</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">9</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Total stock-based compensation expense</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">45</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">40</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">88</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">88</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Less tax benefit</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(15</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(13</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(29</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(29</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Stock-based compensation expense, net of
taxes</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">30</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">27</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">59</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">59</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
</tr>
<!-- 6 Last_Row * DO NOT REMOVE OR EDIT --></tbody>
</table>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">In the six months ended June 30, 2009,
the Company granted 23.8 million stock options,
6.2 million restricted stock units and 1.6 million
long-term performance awards. The weighted-average grant date fair
value of stock options granted was $3.70 per share. The
weighted-average stock price for restricted stock and long-term
performance awards granted during the six months ended
June 30, 2009 was $17.94 and $18.28, respectively.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">Total compensation costs, related to
nonvested awards not yet recognized and the weighted-average period
over which such awards are expected to be recognized at
June 30, 2009 were as follows:</font></p>
<table border="0" cellspacing="0" cellpadding="0" width="100%"
align="center"><!-- 5 First_Row * DO NOT REMOVE OR EDIT -->
<tbody>
<tr>
<td width="71%"></td>
<td valign="bottom" width="8%"></td>
<td></td>
<td></td>
<td valign="bottom" width="8%"></td>
<td></td>
<td></td>
<td valign="bottom" width="8%"></td>
<td></td>
<td></td>
</tr>
<tr>
<td valign="bottom" nowrap="nowrap"><font size="1" face=
"Times New Roman">Dollars in Millions</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>Stock Options</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>Restricted Stock</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>Long-Term<br />
Performance<br />
Awards</b></font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Unrecognized compensation cost</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">141</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">212</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">40</font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Expected weighted-average period of compensation
cost to be recognized</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">2.5 years</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">2.9 years</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">1.6 years</font></td>
</tr>
<!-- 6 Last_Row * DO NOT REMOVE OR EDIT --></tbody>
</table>
</div>
0
0
59000000
2000000
<div>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font size="2" face=
"Times New Roman"><b>Note 10. Fair Value Measurement</b></font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px"><font size="2" face=
"Times New Roman">Financial assets and liabilities carried at fair
value at June 30, 2009 are classified in one of the three
categories, which are described below:</font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px; MARGIN-LEFT: 4%">
<font size="2" face="Times New Roman">Level 1: 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.</font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px; MARGIN-LEFT: 4%">
<font size="2" face="Times New Roman">Level 2: Observable prices
that are based on inputs not quoted on active markets, but
corroborated by market data.</font></p>
<p style="MARGIN-TOP: 6px; MARGIN-BOTTOM: 0px; MARGIN-LEFT: 4%">
<font size="2" face="Times New Roman">Level 3: Unobservable inputs
are used when little or no market data is available. The fair value
hierarchy gives the lowest priority to Level 3 inputs.</font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px; FONT-SIZE: 12px">
<font size="+0"> </font></p>
<table border="0" cellspacing="0" cellpadding="0" width="100%"
align="center"><!-- 5 First_Row * DO NOT REMOVE OR EDIT -->
<tbody>
<tr>
<td width="72%"></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
</tr>
<tr>
<td valign="bottom" nowrap="nowrap"><font size="1" face=
"Times New Roman">Dollars in Millions</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>Level 1</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>Level 2</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>Level 3</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>Total</b></font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Available for Sale:</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 2em"><font size="2" face=
"Times New Roman">U.S. Government Agency Securities</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">550</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">550</font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 2em"><font size="2" face=
"Times New Roman">U.S. Treasury Bills</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">160</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">160</font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 2em"><font size="2" face=
"Times New Roman">Equity Securities</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">28</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">28</font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 2em"><font size="2" face=
"Times New Roman">Prime Money Market Funds</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">3,275</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">3,275</font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 2em"><font size="2" face=
"Times New Roman">U.S. Treasury Money Market Funds</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">1,454</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">1,454</font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 2em"><font size="2" face=
"Times New Roman">U.S. Government Agency Money Market
Funds</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">918</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">918</font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 2em"><font size="2" face=
"Times New Roman">Corporate Debt Securities</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">393</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">393</font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 2em"><font size="2" face=
"Times New Roman">FDIC Insured Debt Securities</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">301</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">301</font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 2em"><font size="2" face=
"Times New Roman">Floating Rate Securities</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">96</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">96</font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 2em"><font size="2" face=
"Times New Roman">Auction Rate Securities</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">94</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">94</font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom"><font size="+0">  </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td valign="bottom"><font size="+0">  </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td valign="bottom"><font size="+0">  </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td valign="bottom"><font size="+0">  </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Total available for sale assets</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">738</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">6,341</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">190</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">7,269</font></td>
</tr>
<tr>
<td height="16"></td>
<td height="16" colspan="3"></td>
<td height="16" colspan="3"></td>
<td height="16" colspan="3"></td>
<td height="16" colspan="3"></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Derivatives:</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 2em"><font size="2" face=
"Times New Roman">Interest Rate Swap Derivatives</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">210</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">210</font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 2em"><font size="2" face=
"Times New Roman">Foreign Exchange Derivatives</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">27</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">27</font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom"><font size="+0">  </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td valign="bottom"><font size="+0">  </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td valign="bottom"><font size="+0">  </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td valign="bottom"><font size="+0">  </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Total derivative assets</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">237</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">237</font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom"><font size="+0">  </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td valign="bottom"><font size="+0">  </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td valign="bottom"><font size="+0">  </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td valign="bottom"><font size="+0">  </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
</tr>
<tr>
<td height="8"></td>
<td height="8" colspan="3"></td>
<td height="8" colspan="3"></td>
<td height="8" colspan="3"></td>
<td height="8" colspan="3"></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Total assets at fair value</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">    738</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">    6,578</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">    190</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">    7,506</font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom"><font size="+0">  </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td valign="bottom"><font size="+0">  </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td valign="bottom"><font size="+0">  </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td valign="bottom"><font size="+0">  </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
</tr>
<tr>
<td height="16"></td>
<td height="16" colspan="3"></td>
<td height="16" colspan="3"></td>
<td height="16" colspan="3"></td>
<td height="16" colspan="3"></td>
</tr>
<tr>
<td valign="bottom" nowrap="nowrap"><font size="1" face=
"Times New Roman">Dollars in Millions</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>Level 1</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>Level 2</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>Level 3</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>Total</b></font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Derivatives:</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 2em"><font size="2" face=
"Times New Roman">Foreign Exchange Derivatives</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">39</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">39</font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 2em"><font size="2" face=
"Times New Roman">Interest Rate Swap Derivatives</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">13</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">13</font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 2em"><font size="2" face=
"Times New Roman">Natural Gas Contracts</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">5</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">5</font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom"><font size="+0">  </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td valign="bottom"><font size="+0">  </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td valign="bottom"><font size="+0">  </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td valign="bottom"><font size="+0">  </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Total derivative liabilities</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">57</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">57</font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom"><font size="+0">  </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td valign="bottom"><font size="+0">  </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td valign="bottom"><font size="+0">  </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td valign="bottom"><font size="+0">  </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
<font size="+0"> </font></td>
</tr>
<tr>
<td height="16"></td>
<td height="16" colspan="3"></td>
<td height="16" colspan="3"></td>
<td height="16" colspan="3"></td>
<td height="16" colspan="3"></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Total liabilities at fair value</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">57</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">57</font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom"><font size="+0">  </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td valign="bottom"><font size="+0">  </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td valign="bottom"><font size="+0">  </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td valign="bottom"><font size="+0">  </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
<font size="+0"> </font></td>
</tr>
<!-- 6 Last_Row * DO NOT REMOVE OR EDIT --></tbody>
</table>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">At June 30, 2009, the majority of the
Company’s ARS are primarily rated ‘BBB/Baa1’ or
better; however, several of the ARS are rated below investment
grade at ‘BBB/Caa2’. ARS primarily represent interests
in insurance securitizations and, to a lesser extent, structured
credits. Due to the lack of observable market quotes on the
Company’s ARS portfolio, the Company utilizes valuation
models that rely exclusively on Level 3 inputs, including those
that are based on expected cash flow streams and collateral values
including assessments of counterparty credit quality, default risk
underlying the security, discount rates and overall capital market
liquidity. The valuation of the Company’s ARS investment
portfolio is subject to uncertainties that are difficult to
predict. Factors that may impact the Company’s valuation
include changes to credit ratings of the securities as well as to
the underlying assets supporting those securities, rates of default
of the underlying assets, underlying collateral value, discount
rates, counterparty risk and ongoing strength and quality of market
credit and liquidity. The Company’s determination of fair
value on its ARS investment portfolio at June 30, 2009
included internally developed valuations that were based in part on
indicative bids received on the underlying assets of the securities
and other non-observable evidence of fair value. Because the
Company intends to sell these investments before recovery of their
amortized cost basis, the Company will consider any further decline
in fair value to be an other-than-temporary impairment.</font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font size=
"1"> </font></p>
<!--##PBStart##-->
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"> </p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font size="2" face=
"Times New Roman">The Company’s floating rate securities
(FRS) are primarily rated ‘BBB/B3’ or better at
June 30, 2009. FRS are long-term debt securities with coupons
that are reset periodically against a benchmark interest rate. The
underlying assets of the FRS primarily consist of consumer loans,
auto loans, collateralized loan obligations, monoline securities,
asset-backed securities and corporate bonds and loans. Since the
latter part of 2007, the general FRS market became less liquid or
active due to continuing credit and liquidity concerns; as a
result, there is no availability of observable market quotes in the
active market (Level 1 inputs) or market quotes on similar or
identical assets or liabilities, or inputs that are derived
principally from or corroborated by observable market data by
correlation or other means (Level 2 inputs). Due to the current
lack of an active market for the Company’s FRS and the
general lack of transparency into their underlying assets, the
Company relies on other qualitative analysis including discussion
with brokers and fund managers, default risk underlying the
security and overall capital market liquidity (Level 3 inputs) to
value its FRS portfolio. Because the Company does not intend to
sell these investments and it is not more likely than not that the
Company will be required to sell these investments before recovery
of their amortized cost basis, the Company does not consider any
decline in fair value to be an other-than-temporary impairment.
Therefore, any declines in fair value are reported as a temporary
loss in other comprehensive income. During the six months ended
June 30, 2009 the Company received $120 million of principal
at par for FRS.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">In the second quarter of 2009, the Company
invested $394 million in corporate debt securities. Corporate debt
securities are rated ‘A/A2’ or better.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">For financial assets and liabilities that
utilize Level 1 and Level 2 inputs, the Company utilizes both
direct and indirect observable price quotes, including LIBOR and
EURIBOR yield curves, foreign exchange forward prices, NYMEX
futures pricing and common stock price quotes. Below is a summary
of valuation techniques for Level 1 and Level 2 financial assets
and liabilities:</font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px; FONT-SIZE: 6px">
 </p>
<table style="BORDER-COLLAPSE: collapse" border="0" cellspacing="0"
cellpadding="0" width="100%">
<tbody>
<tr>
<td width="4%"><font size="1"> </font></td>
<td valign="top" width="3%" align="left"><font size="2" face=
"Times New Roman">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font size="2" face="Times New Roman"><b>U.S.
Government Agency Securities and U.S. Government Agency Money
Market Funds</b> – valued at the quoted market price from
observable pricing sources at the reporting date.</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px; FONT-SIZE: 6px">
 </p>
<table style="BORDER-COLLAPSE: collapse" border="0" cellspacing="0"
cellpadding="0" width="100%">
<tbody>
<tr>
<td width="4%"><font size="1"> </font></td>
<td valign="top" width="3%" align="left"><font size="2" face=
"Times New Roman">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font size="2" face="Times New Roman"><b>U.S.
Treasury Bills and U.S. Treasury Money Market Funds</b> –
valued at the quoted market price from observable pricing sources
at the reporting date.</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px; FONT-SIZE: 6px">
 </p>
<table style="BORDER-COLLAPSE: collapse" border="0" cellspacing="0"
cellpadding="0" width="100%">
<tbody>
<tr>
<td width="4%"><font size="1"> </font></td>
<td valign="top" width="3%" align="left"><font size="2" face=
"Times New Roman">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font size="2" face="Times New Roman"><b>Equity
Securities</b> – valued using quoted stock prices from New
York Stock Exchange or National Association of Securities Dealers
Automated Quotation System at the reporting date.</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px; FONT-SIZE: 6px">
 </p>
<table style="BORDER-COLLAPSE: collapse" border="0" cellspacing="0"
cellpadding="0" width="100%">
<tbody>
<tr>
<td width="4%"><font size="1"> </font></td>
<td valign="top" width="3%" align="left"><font size="2" face=
"Times New Roman">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font size="2" face="Times New Roman"><b>Prime
Money Market Funds</b> – net asset value of $1 per
share.</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px; FONT-SIZE: 6px">
 </p>
<table style="BORDER-COLLAPSE: collapse" border="0" cellspacing="0"
cellpadding="0" width="100%">
<tbody>
<tr>
<td width="4%"><font size="1"> </font></td>
<td valign="top" width="3%" align="left"><font size="2" face=
"Times New Roman">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font size="2" face="Times New Roman"><b>Corporate
Debt Securities</b> – valued at the quoted market price from
observable pricing sources at the reporting date.</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px; FONT-SIZE: 6px">
 </p>
<table style="BORDER-COLLAPSE: collapse" border="0" cellspacing="0"
cellpadding="0" width="100%">
<tbody>
<tr>
<td width="4%"><font size="1"> </font></td>
<td valign="top" width="3%" align="left"><font size="2" face=
"Times New Roman">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font size="2" face="Times New Roman"><b>FDIC
Insured Debt Securities</b> – valued at the quoted market
price from observable pricing sources at the reporting
date.</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px; FONT-SIZE: 6px">
 </p>
<table style="BORDER-COLLAPSE: collapse" border="0" cellspacing="0"
cellpadding="0" width="100%">
<tbody>
<tr>
<td width="4%"><font size="1"> </font></td>
<td valign="top" width="3%" align="left"><font size="2" face=
"Times New Roman">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font size="2" face="Times New Roman"><b>Foreign
exchange derivative assets and liabilities</b> – valued using
quoted forward foreign exchange prices at the reporting date.
Counterparties to these contracts are highly-rated financial
institutions, none of which experienced any significant downgrades
during the six months ended June 30, 2009. Valuations may
fluctuate considerably from period-to-period due to volatility in
the underlying foreign currencies. Due to the short-term maturities
of the Company’s foreign exchange derivatives, which are 17
months or less, counterparty credit risk is not
significant.</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px; FONT-SIZE: 6px">
 </p>
<table style="BORDER-COLLAPSE: collapse" border="0" cellspacing="0"
cellpadding="0" width="100%">
<tbody>
<tr>
<td width="4%"><font size="1"> </font></td>
<td valign="top" width="3%" align="left"><font size="2" face=
"Times New Roman">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font size="2" face="Times New Roman"><b>Interest
rate swap derivative assets and liabilities</b> – valued
using LIBOR and EURIBOR yield curves, less credit valuation
adjustments, at the reporting date. Counterparties to these
contracts are highly-rated financial institutions, none of which
experienced any significant downgrades during the six months ended
June 30, 2009. Valuations may fluctuate considerably from
period-to-period due to volatility in underlying interest rates,
which is driven by market conditions and the duration of the swap.
In addition, credit valuation adjustment volatility may have a
significant impact on the valuation of the Company’s interest
rate swaps due to changes in counterparty credit ratings and credit
default swap spreads.</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px; FONT-SIZE: 6px">
 </p>
<table style="BORDER-COLLAPSE: collapse" border="0" cellspacing="0"
cellpadding="0" width="100%">
<tbody>
<tr>
<td width="4%"><font size="1"> </font></td>
<td valign="top" width="3%" align="left"><font size="2" face=
"Times New Roman">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font size="2" face="Times New Roman"><b>Natural
gas forward contracts</b> – valued using NYMEX futures prices
for natural gas at the reporting date. Counterparties to these
contracts are highly-rated financial institutions, none of which
experienced any significant downgrades during the six months ended
June 30, 2009. Valuations may fluctuate considerably from
period-to-period due to volatility in the underlying natural gas
prices. Due to the short-term maturities of the Company’s
natural gas derivatives, which are six months or less, counterparty
credit risk is not significant.</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">For further discussion on the
Company’s June 30, 2009 fair value, carrying value and
rollforward of activity that occurred during 2009, see
“—Note 11. Cash, Cash Equivalents and Marketable
Securities.”</font></p>
</div>
3125000000
0.81
0.81
0
296000000
<div>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font size="2" face=
"Times New Roman"><b>Note 9. Income Taxes</b></font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">The effective income tax rate on earnings
from continuing operations before income taxes was 25.4% and 29.0%
for the three and six months ended June 30, 2009,
respectively, compared to 21.1% and 24.2% for the three and six
months ended June 30, 2008, respectively. The higher tax rate
in the three months ended June 30, 2009 compared to the same
period in 2008 was due primarily to a tax benefit of $91 million
recorded in the three months ended June 30, 2008 related to
the effective settlement of the 2002—2003 audit with the
Internal Revenue Service. In addition, the three months ended
June 30, 2009 included offsetting effects related to the Mead
Johnson separation activities discussed below and a $40 million tax
benefit related to the final settlement of certain state audits.
The higher tax rate in the six months ended June 30, 2009
compared to the same period in 2008 was primarily related to the
transfer of various international units of the Company to Mead
Johnson prior to its initial public offering in addition to the
items discussed above.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">U.S. income taxes have not been provided on
the earnings of certain low tax non-U.S. subsidiaries that are not
projected to be distributed this year since the Company has
invested or expects to invest such earnings permanently offshore.
If, in the future, these earnings are repatriated to the U.S., or
if the Company determines such earnings will be remitted in the
foreseeable future, additional tax provisions would be
required.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">President Obama’s Administration has
proposed reforms to the international tax laws that if adopted may
increase taxes and reduce the Company’s results of operations
and cash flows.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">The Company has recorded significant
deferred tax assets related to U.S. foreign tax credit and research
and development tax credit carryforwards. The foreign tax credit
and research and development tax credit carryforwards expire in
varying amounts beginning in 2014. Realization of foreign tax
credit and research tax credit carryforwards is dependent on
generating sufficient domestic-sourced taxable income prior to
their expiration. Although realization is not assured,
management believes it is more likely than not that these deferred
tax assets will be realized.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">The Company will continue to file a U.S.
federal consolidated federal tax return and various state combined
tax returns with Mead Johnson. As part of the initial public
offering of Mead Johnson, a tax sharing agreement was put in place
between the Company and Mead Johnson. Mead Johnson will make
payments to the Company on a quarterly basis for its tax liability
for U.S. federal purposes and various state purposes computed as a
stand alone entity. These payments represent either Mead
Johnson’s share of the tax liability or reimbursement to the
Company for utilization of certain tax attributes. The Company has
agreed to indemnify Mead Johnson for any outstanding tax
liabilities or audit exposures (such as, income, sales and
use, or property taxes) that existed for periods prior to the
initial public offering.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">The Company classifies interest expense and
penalties related to unrecognized tax benefits as income tax
expense. The Company is currently under examination by a number of
tax authorities, which have potential adjustments to tax for issues
such as transfer pricing, certain tax credits and the deductibility
of certain expenses. The Company anticipates that it is reasonably
possible that the total amount of unrecognized tax benefits at
June 30, 2009 will decrease in the range of approximately $55
million to $85 million in the next 12 months as a result of the
settlement of certain tax audits and other events. The expected
change in unrecognized tax benefits, primarily settlement related,
will involve the payment of additional taxes, the adjustment of
certain deferred taxes, and/or the recognition of tax benefits. The
Company also anticipates that it is reasonably possible that new
issues will be raised by tax authorities, which may require
increases to the balance of unrecognized tax benefits. However, an
estimate of such increases cannot reasonably be made at this
time.</font></p>
</div>
906000000
266000000
75000000
10000000
1283000000
-64000000
<div>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman"><b>Note 13. Inventories, Net</b></font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">The major categories of inventories were as
follows:</font></p>
<table border="0" cellspacing="0" cellpadding="0" width="100%"
align="center"><!-- 5 First_Row * DO NOT REMOVE OR EDIT -->
<tbody>
<tr>
<td width="82%"></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
</tr>
<tr>
<td valign="bottom" nowrap="nowrap"><font size="1" face=
"Times New Roman">Dollars in Millions</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>June 30,<br />
2009</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>December 31,<br />
2008</b></font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Finished goods</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">721</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">707</font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Work in process</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">669</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">738</font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Raw and packaging materials</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">390</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">320</font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Inventories, net</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">    1,780</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">    1,765</font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
</tr>
<!-- 6 Last_Row * DO NOT REMOVE OR EDIT --></tbody>
</table>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">Inventories expected to remain on-hand
beyond one year were $288 million at June 30, 2009 and $185
million at December 31, 2008 and were included in non-current
other assets.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">Inventories include capitalized costs
related to production of products for programs in Phase III
development subject to final U.S. Food and Drug Administration
approval. The probability of future sales, as well as the status of
the regulatory approval process were considered in assessing the
recoverability of these costs. These capitalized costs were $52
million and $47 million at June 30, 2009 and December 31,
2008, respectively.</font></p>
</div>
724000000
-355000000
-1364000000
1248000000
1621000000
464000000
14000000
5000000
405000000
220000000
3000000
2000000
20000000
14000000
-2000000
41000000
65000000
37000000
<div>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font size="2" face=
"Times New Roman"><b>Note 8. Other (Income)/Expense,
Net</b></font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">The components of other (income)/expense,
net were as follows:</font></p>
<table border="0" cellspacing="0" cellpadding="0" width="100%"
align="center"><!-- 5 First_Row * DO NOT REMOVE OR EDIT -->
<tbody>
<tr>
<td width="67%"></td>
<td valign="bottom" width="6%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="6%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="6%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="6%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="6" align="middle"><font size="1" face=
"Times New Roman"><b>Three Months Ended June 30,</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="6" align="middle"><font size="1" face=
"Times New Roman"><b>Six Months Ended June 30,</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr>
<td valign="bottom" nowrap="nowrap"><font size="1" face=
"Times New Roman">Dollars in Millions</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>2009</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>2008</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>2009</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>2008</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Interest expense</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">42</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">80</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">94</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">153</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Interest income</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(14</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(31</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(27</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(74</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Gain on debt buyback and termination of interest
rate swap agreements</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(11</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(11</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">ARS impairment charge</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">25</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Foreign exchange transaction
losses/(gains)</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">17</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(2</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">4</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">17</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Gain on sale of product lines, businesses and
assets</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(23</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(67</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(9</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Net royalty income and amortization of upfront
and milestone payments received from alliance partners (Note
2)</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(34</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(41</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(69</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(82</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Pension curtailment charge (Note 17)</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">25</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">25</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Other, net</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(24</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(19</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(49</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(11</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Other (income)/expense, net</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(22</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(13</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(100</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">19</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
</tr>
<!-- 6 Last_Row * DO NOT REMOVE OR EDIT --></tbody>
</table>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">Interest expense was reduced by $29 million
and $15 million for the three months ended June 30, 2009 and
2008, respectively, and $53 million and $22 million for the six
months ended June 30, 2009 and 2008, respectively, from the
effects of interest rate swaps. In addition, interest expense was
further reduced by $7 million and less than $1 million for the
three months ended June 30, 2009 and 2008, respectively, and
$12 million and less than $1 million for the six months ended
June 30, 2009 and 2008, respectively, from the termination of
interest rate swaps during 2009 and 2008. See “—Note
20. Financial Instruments” for additional discussion on
terminated swap contracts.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">Interest income relates primarily to
interest earned on cash, cash equivalents and investments in
marketable securities. For further detail on ARS impairment charge,
see “—Note 11. Cash, Cash Equivalents and Marketable
Securities.”</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">Foreign exchange transaction losses were
primarily due to a weakening U.S. dollar impact on non-qualifying
foreign exchange hedges and the re-measurement of non-functional
currency denominated transactions.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">Gain on sale of product lines, businesses
and assets were primarily related to the sale of mature brands,
including the Pakistan business in 2009.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">Other, net includes income from third-party
contract manufacturing, gains and losses on the sale of property,
plant and equipment, deferred income recognized, certain litigation
charges/recoveries, and ConvaTec and Medical Imaging net
transitional service fees.</font></p>
</div>
100000000
1231000000
0
1913000000
365000000
<div>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font size="2" face=
"Times New Roman"><b>Note 17. Pension, Postretirement and
Postemployment Liabilities</b></font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font size=
"1"> </font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font size="2" face=
"Times New Roman">The net periodic benefit cost of the
Company’s defined benefit pension and postretirement benefit
plans included the following components:</font></p>
<table border="0" cellspacing="0" cellpadding="0" width="100%"
align="center"><!-- 5 First_Row * DO NOT REMOVE OR EDIT -->
<tbody>
<tr>
<td width="66%"></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="14" align="middle"><font size="1" face=
"Times New Roman"><b>Three Months Ended
June 30,</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="14" align="middle"><font size="1" face=
"Times New Roman"><b>Six Months Ended June 30,</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="6" align="middle"><font size="1" face=
"Times New Roman"><b>Pension Benefits</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="6" align="middle"><font size="1" face=
"Times New Roman"><b>Other Benefits</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="6" align="middle"><font size="1" face=
"Times New Roman"><b>Pension Benefits</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="6" align="middle"><font size="1" face=
"Times New Roman"><b>Other Benefits</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr>
<td valign="bottom" nowrap="nowrap"><font size="1" face=
"Times New Roman">Dollars in Millions</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>2009</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>2008</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>2009</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>2008</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>2009</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>2008</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>2009</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>2008</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr>
<td height="8"></td>
<td height="8" colspan="4"></td>
<td height="8" colspan="4"></td>
<td height="8" colspan="4"></td>
<td height="8" colspan="4"></td>
<td height="8" colspan="4"></td>
<td height="8" colspan="4"></td>
<td height="8" colspan="4"></td>
<td height="8" colspan="4"></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Service cost — benefits earned during the
period</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">48</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">54</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">2</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">2</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">107</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">119</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">3</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">4</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Interest cost on projected benefit
obligation</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">89</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">99</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">10</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">10</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">193</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">196</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">19</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">20</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Expected return on plan assets</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(107</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(117</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(5</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(7</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(233</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(236</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(10</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(14</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Amortization of prior service
cost/(credit)</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">1</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">2</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(1</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(1</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">4</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">5</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(2</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(2</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Amortization of net actuarial loss</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">28</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">24</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">2</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">1</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">70</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">49</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">5</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">3</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Net periodic benefit cost</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">59</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">62</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">8</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">5</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">141</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">133</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">15</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">11</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Curtailments and special termination
benefits</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">25</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">16</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">25</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">16</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Total net periodic benefit cost</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">  84</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">  78</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">  8</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">  5</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">  166</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">  149</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">  15</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">  11</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
</tr>
<!-- 6 Last_Row * DO NOT REMOVE OR EDIT --></tbody>
</table>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">During June 2009, the Company amended its
U.S. Retirement Income Plan (and several other plans) whereby,
effective December 31, 2009, the Company will eliminate
crediting future benefits relating to service. The Company will
continue to consider salary increases for an additional five-year
period in determining the benefit obligation related to prior
service. The Company has accounted for the amendment as a
curtailment.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">As a result, the Company re-measured the
applicable plan assets and obligations. The re-measurement resulted
in a $455 million reduction to accumulated OCI ($295 million net of
taxes) and a corresponding decrease to the unfunded 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 (income)/expense, net
during the second quarter of 2009 for the remaining amount of
unrecognized prior service cost. In addition, the Company has
reclassified all participants as inactive for benefit plan purposes
and will amortize actuarial gains and losses over the expected
weighted-average remaining lives of plan participants (31
years).</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">In connection with the plan amendment, the
Company will also increase its expected contributions to its
principal defined contribution plans in the U.S. and Puerto Rico
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
and interest rates.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">In February 2009, the Company re-measured
the U.S. Retirement Income Plan and several other retirement and
benefit plans upon the transfer of certain plan assets and related
obligations to new Mead Johnson plans for active Mead Johnson
participants. The re-measurement resulted 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 unfunded
status of the plan due to updated plan asset valuations and a
change in the discount rate from 6.5% to 7.0%.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">Contributions to the U.S. pension plans are
expected to be approximately $650 million during 2009, of which
$615 million was contributed in the six months ended June 30,
2009. Contributions to the international plans are expected to be
in the range of $120 million to $140 million in 2009, of which $55
million was contributed in the six months ended June 30,
2009.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">In 2008, concurrent with the agreement to
sell ConvaTec, a revaluation of various pension plans’ assets
and obligations was performed. The revaluation resulted in a
curtailment charge of $3 million and special termination benefit
charge of $13 million, which are included in discontinued
operations.</font></p>
</div>
-30000000
68000000
0
0
782000000
36000000
<div>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman"><b>Note 14. Property, Plant and Equipment,
Net</b></font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">The major categories of property, plant and
equipment were as follows:</font></p>
<table border="0" cellspacing="0" cellpadding="0" width="100%"
align="center"><!-- 5 First_Row * DO NOT REMOVE OR EDIT -->
<tbody>
<tr>
<td width="82%"></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
</tr>
<tr>
<td valign="bottom" nowrap="nowrap"><font size="1" face=
"Times New Roman">Dollars in Millions</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>June 30,<br />
2009</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>December 31,<br />
2008</b></font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Land</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">150</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">149</font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Buildings</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">4,619</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">4,506</font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Machinery, equipment and fixtures</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">4,077</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">4,007</font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Construction in progress</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">828</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">787</font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Total property, plant and equipment</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">9,674</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">9,449</font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Less accumulated depreciation</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">4,206</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">4,044</font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Property, plant and equipment, net</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">    5,468</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">    5,405</font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
</tr>
<!-- 6 Last_Row * DO NOT REMOVE OR EDIT --></tbody>
</table>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">Capitalized interest was $8 million and $12
million for the six months ended June 30, 2009 and 2008,
respectively.</font></p>
</div>
67000000
1752000000
0
47000000
<div>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font size="2" face=
"Times New Roman"><b>Note 4. Restructuring</b></font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">The Company’s productivity
transformation initiative is designed to fundamentally change the
way it runs its business to meet the challenges of a changing
business environment, to take advantage of the diverse
opportunities in the marketplace as the Company is transforming
into a next-generation biopharmaceutical company, and to create a
total of $2.5 billion in annual productivity cost savings and cost
avoidance by 2012. In connection with the PTI, the Company aims to
achieve a culture of continuous improvement to enhance its
efficiency, effectiveness and competitiveness and to substantially
improve its cost base.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">The charges associated with the PTI are
estimated to be in the range of $1.3 billion to $1.6 billion, which
includes $806 million of costs already incurred. The incurred costs
are net of $214 million of gains related to the sale of mature
product lines and businesses. The exact timing of the recognition
of PTI charges cannot be predicted with certainty and will be
affected by the existence of triggering events for expense
recognition, among other factors.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">The Company recorded the following PTI
charges:</font></p>
<table border="0" cellspacing="0" cellpadding="0" width="100%"
align="center"><!-- 5 First_Row * DO NOT REMOVE OR EDIT -->
<tbody>
<tr>
<td width="68%"></td>
<td valign="bottom" width="6%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="6%"></td>
<td></td>
<td></td>
<td valign="bottom" width="6%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="6%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="6" align="middle"><font size="1" face=
"Times New Roman"><b>Three Months Ended June 30,</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="6" align="middle"><font size="1" face=
"Times New Roman"><b>Six Months Ended June 30,</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr>
<td valign="bottom" nowrap="nowrap"><font size="1" face=
"Times New Roman">Dollars in Millions</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>2009</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>2008</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>2009</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>2008</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Provision for restructuring, net</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">20</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">30</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">47</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">41</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Accelerated depreciation, asset impairment and
other shutdown costs</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">24</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">58</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">50</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">154</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Retirement plan curtailment charge (Note
17)</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">25</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">25</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Process standardization implementation
costs</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">24</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">21</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">44</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">36</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Gain on sale of product lines, businesses and
assets</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(11</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(55</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(9</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Total</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">82</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">109</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">111</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">222</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
</tr>
<!-- 6 Last_Row * DO NOT REMOVE OR EDIT --></tbody>
</table>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">Most of the accelerated depreciation, asset
impairment charges and other shutdown costs were included in cost
of products sold and primarily relate to the rationalization of the
Company’s manufacturing network in the BioPharmaceuticals
segment. These assets continue to be depreciated until the facility
closures are complete. The remaining costs of PTI were primarily
attributed to process standardization activities across the Company
and are recognized as incurred.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">Restructuring charges included termination
benefits for workforce reductions of manufacturing, selling,
administrative, and research and development personnel across all
geographic regions of approximately 140 and 170 for the three
months ended June 30, 2009 and 2008, respectively, and 355 and
370 for the six months ended June 30, 2009 and 2008,
respectively. The following tables present the detail of expenses
incurred in connection with the restructuring
activities:</font></p>
<table border="0" cellspacing="0" cellpadding="0" width="100%"
align="center"><!-- 5 First_Row * DO NOT REMOVE OR EDIT -->
<tbody>
<tr>
<td width="62%"></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
<td valign="bottom" width="4%"></td>
<td></td>
<td></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="8" align="middle"><font size="1" face=
"Times New Roman"><b>Three Months Ended June 30, 2009</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="9" align="middle"><font size="1" face=
"Times New Roman"><b>Three Months Ended June 30, 2008</b></font></td>
</tr>
<tr>
<td valign="bottom" nowrap="nowrap"><font size="1" face=
"Times New Roman">Dollars in Millions</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>Termination<br />
Benefits</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>Other Exit<br />
Costs</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>Total</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>Termination<br />
Benefits</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>Other Exit<br />
Costs</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>Total</b></font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Charges</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">18</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">18</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">27</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman"> —</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">27</font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Changes in estimates</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">2</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">2</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">3</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">3</font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Provision for restructuring, net</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">20</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">20</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">30</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">30</font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
</tr>
<tr>
<td height="16"></td>
<td height="16" colspan="9"></td>
<td height="16" colspan="10"></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="8" align="middle"><font size="1" face=
"Times New Roman"><b>Six Months Ended June
30, 2009</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="9" align="middle"><font size="1" face=
"Times New Roman"><b>Six Months Ended June
30, 2008</b></font></td>
</tr>
<tr>
<td valign="bottom" nowrap="nowrap"><font size="1" face=
"Times New Roman">Dollars in Millions</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>Termination<br />
Benefits</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>Other Exit<br />
Costs</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>Total</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>Termination<br />
Benefits</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>Other Exit<br />
Costs</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>Total</b></font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Charges</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">41</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">6</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">47</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">40</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">1</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">41</font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Changes in estimates</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(1</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">1</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Provision for restructuring, net</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">41</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">6</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">47</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">39</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">2</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">41</font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
</tr>
<!-- 6 Last_Row * DO NOT REMOVE OR EDIT --></tbody>
</table>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">The Company excludes the impact of
restructuring charges and other related PTI costs from segment
income. See “—Note 3. Business Segments” for a
reconciliation of segment results to earnings from continuing
operations before income taxes. Restructuring charges originating
from the BioPharmaceuticals segment were $19 million and $29
million for the three months ended June 30, 2009 and 2008,
respectively, and $38 million and $39 million for the six months
ended June 30, 2009 and 2008, respectively, with the remaining
charges relating to the Mead Johnson segment.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">The following table represents the
reconciliation of restructuring liabilities and spending against
those liabilities:</font></p>
<table border="0" cellspacing="0" cellpadding="0" width="100%"
align="center"><!-- 5 First_Row * DO NOT REMOVE OR EDIT -->
<tbody>
<tr>
<td width="74%"></td>
<td valign="bottom" width="6%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="6%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="6%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td valign="bottom" nowrap="nowrap"><font size="1" face=
"Times New Roman">Dollars in Millions</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>Termination<br />
Liability</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>Other Exit Costs<br />
Liability</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>Total</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Liability at January 1, 2009</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">188</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">21</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">209</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Charges</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">41</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">6</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">47</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Spending</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(75</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(4</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(79</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Liability at June 30, 2009</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">154</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">23</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">    177</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
</tr>
</tbody>
</table>
</div>
10399000000
<div>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font size="2" face=
"Times New Roman"><b>Note 12. Receivables, Net</b></font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font size=
"1"> </font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font size="2" face=
"Times New Roman">The major categories of receivables were as
follows:</font></p>
<table border="0" cellspacing="0" cellpadding="0" width="100%"
align="center"><!-- 5 First_Row * DO NOT REMOVE OR EDIT -->
<tbody>
<tr>
<td width="82%"></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
</tr>
<tr>
<td valign="bottom" nowrap="nowrap"><font size="1" face=
"Times New Roman">Dollars in Millions</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>June 30,<br />
2009</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>December 31,<br />
2008</b></font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Trade receivables</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">2,487</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">2,545</font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Alliance partners receivables</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">857</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">804</font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Income tax refund claims</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">102</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">64</font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Miscellaneous receivables</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">303</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">359</font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">3,749</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">3,772</font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Less allowances</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">130</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">128</font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Receivables, net</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">    3,619</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">    3,644</font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
</tr>
<!-- 6 Last_Row * DO NOT REMOVE OR EDIT --></tbody>
</table>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">Receivables are netted with deferred income
related to alliance partners until recognition of income. As a
result, a corresponding reclassification was made which reduced
alliance partner receivables and deferred income by $499 million
and $566 million at June 30, 2009 and December 31, 2008,
respectively. For additional information on the Company’s
alliance partners, see “—Note 2. Alliances and
Collaborations.”</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">In the aggregate, receivables due from three
pharmaceutical wholesalers in the U.S. represented 38% and 35% of
total trade receivables at June 30, 2009 and December 31,
2008, respectively.</font></p>
</div>
<div>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman"><b>Note 22. Subsequent Event</b></font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">On July 22, 2009, Bristol-Myers Squibb and
Medarex announced that the companies signed a definitive merger
agreement that provides for the acquisition of Medarex by
Bristol-Myers Squibb for an aggregate purchase price of
approximately $2.4 billion. Under the terms of the definitive
merger agreement, Bristol-Myers Squibb will commence a cash tender
offer on or about July 27, 2009 to purchase all of the outstanding
shares of Medarex common stock for $16.00 per share in
cash.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">The closing of the transaction is expected
to occur during the third quarter of 2009 subject to, among other
items, at least a majority of the outstanding shares of Medarex
being tendered (including the shares already owned by Bristol-Myers
Squibb) and customary regulatory approvals.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">The companies have collaborated on the
development of ipilimumab, a novel immunotherapy currently in Phase
III development for the treatment of metastatic
melanoma.</font></p>
</div>
<div>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font size="2" face=
"Times New Roman"><b>Note 3. Business Segments</b></font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">Segment information is consistent with how
management reviews the businesses, makes investing and resource
allocation decisions and assesses operating performance. The
Company reports financial and operating information in two segments
—BioPharmaceuticals and Mead Johnson. The BioPharmaceuticals
segment is comprised of the global biopharmaceutical and
international consumer medicines businesses. The Mead Johnson
segment consists of the Company’s 83.1% interest in Mead
Johnson Nutrition Company, which is primarily an infant formula and
children’s nutrition business.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">Effective January 1, 2009, the Company
changed its measurement of segment income for all the periods
presented. The following summarizes the most significant changes
from the previously reported amounts:</font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px; FONT-SIZE: 12px">
 </p>
<table style="BORDER-COLLAPSE: collapse" border="0" cellspacing="0"
cellpadding="0" width="100%">
<tbody>
<tr>
<td width="4%"><font size="1"> </font></td>
<td valign="top" width="3%" align="left"><font size="2" face=
"Times New Roman">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font size="2" face="Times New Roman">Certain items
that were previously excluded from segment results are now
included, including, but not limited to, costs attributed to
certain corporate administrative functions and programs,
stock-based compensation expense and net interest
expense;</font></p>
</td>
</tr>
</tbody>
</table>
<table style="BORDER-COLLAPSE: collapse" border="0" cellspacing="0"
cellpadding="0" width="100%">
<tbody>
<tr>
<td width="4%"><font size="1"> </font></td>
<td valign="top" width="3%" align="left"><font size="2" face=
"Times New Roman">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font size="2" face="Times New Roman">Certain items
that were previously included in segment results are now excluded,
including but not limited to, costs attributed to productivity
transformation initiative (PTI), upfront milestone payments and
acquired in-process research and development; and</font></p>
</td>
</tr>
</tbody>
</table>
<table style="BORDER-COLLAPSE: collapse" border="0" cellspacing="0"
cellpadding="0" width="100%">
<tbody>
<tr>
<td width="4%"><font size="1"> </font></td>
<td valign="top" width="3%" align="left"><font size="2" face=
"Times New Roman">•</font></td>
<td valign="top" width="1%"><font size="1"> </font></td>
<td valign="top" align="left">
<p align="left"><font size="2" face="Times New Roman">The pre-tax
income attributable to noncontrolling interest is excluded from the
segment results.</font></p>
</td>
</tr>
</tbody>
</table>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">The following table reconciles the
Company’s segment results to earnings from continuing
operations before income taxes:</font></p>
<table border="0" cellspacing="0" cellpadding="0" width="100%"
align="center"><!-- 5 First_Row * DO NOT REMOVE OR EDIT -->
<tbody>
<tr>
<td width="72%"></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="6" align="middle"><font size="1" face=
"Times New Roman"><b>Three Months Ended June 30,</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="6" align="middle"><font size="1" face=
"Times New Roman"><b>Six Months Ended June 30,</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr>
<td valign="bottom" nowrap="nowrap"><font size="1" face=
"Times New Roman">Dollars in Millions</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>2009</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>2008</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>2009</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>2008</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Segment results:</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">BioPharmaceuticals</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">1,242</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">848</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">2,340</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">1,680</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Mead Johnson</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">151</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">188</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">310</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">396</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Total segment results</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">1,393</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">1,036</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">2,650</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">2,076</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr>
<td height="16"></td>
<td height="16" colspan="4"></td>
<td height="16" colspan="4"></td>
<td height="16" colspan="4"></td>
<td height="16" colspan="4"></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Reconciliation of segment results to earnings
from continuing operations before income taxes:</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Productivity transformation initiative</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(82</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(109</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(111</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(222</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Auction rate securities (ARS) impairment charge
and gain on sale</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">2</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(23</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Upfront and milestone payments and acquired
in-process research and development</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(29</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(63</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(174</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(83</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Litigation and product liability
charges</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(28</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(2</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(125</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(18</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Mead Johnson separation costs</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(8</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(1</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(25</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(1</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Mead Johnson gain on sale of trademark</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">12</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">12</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Debt buyback and swap terminations</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">11</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">11</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Noncontrolling interest</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">472</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">358</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">887</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">699</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Earnings from continuing operations before income
taxes</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">1,741</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">1,221</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">3,125</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">2,428</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
</tr>
<!-- 6 Last_Row * DO NOT REMOVE OR EDIT --></tbody>
</table>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">Net sales of the Company’s key
products and product categories within business segments were as
follows:</font> </p>
<table border="0" cellspacing="0" cellpadding="0" width="100%"
align="center"><!-- 5 First_Row * DO NOT REMOVE OR EDIT -->
<tbody>
<tr>
<td width="74%"></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
<td valign="bottom" width="2%"></td>
<td></td>
<td></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="5" align="middle"><font size="1" face=
"Times New Roman"><b>Three Months Ended June 30,</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="5" align="middle"><font size="1" face=
"Times New Roman"><b>Six Months Ended June 30,</b></font></td>
</tr>
<tr>
<td valign="bottom" nowrap="nowrap"><font size="1" face=
"Times New Roman">Dollars in Millions</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>2009</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>2008</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>2009</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>2008</b></font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">BioPharmaceuticals</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 5em"><font size="2" face=
"Times New Roman">PLAVIX*</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">1,539</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">1,387</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">2,974</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">2,695</font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 5em"><font size="2" face=
"Times New Roman">AVAPRO*/AVALIDE*</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">313</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">335</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">615</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">640</font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 5em"><font size="2" face=
"Times New Roman">REYATAZ</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">331</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">324</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">653</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">621</font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 5em"><font size="2" face=
"Times New Roman">SUSTIVA Franchise (total revenue)</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">312</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">282</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">604</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">555</font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 5em"><font size="2" face=
"Times New Roman">BARACLUDE</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">179</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">136</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">331</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">244</font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 5em"><font size="2" face=
"Times New Roman">ERBITUX*</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">173</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">196</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">337</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">383</font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 5em"><font size="2" face=
"Times New Roman">SPRYCEL</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">107</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">76</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">195</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">142</font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 5em"><font size="2" face=
"Times New Roman">IXEMPRA</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">29</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">26</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">53</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">51</font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 5em"><font size="2" face=
"Times New Roman">ABILIFY*</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">643</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">529</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">1,232</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">983</font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 5em"><font size="2" face=
"Times New Roman">ORENCIA</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">148</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">106</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">272</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">193</font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 5em"><font size="2" face=
"Times New Roman">Other</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">891</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">1,078</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">1,721</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">2,156</font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 3em"><font size="2" face=
"Times New Roman">Total BioPharmaceuticals</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">4,665</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">4,475</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">8,987</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">8,663</font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Mead Johnson Nutrition Company
products</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">719</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">728</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">1,412</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">1,431</font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
</tr>
<tr>
<td height="8"></td>
<td height="8" colspan="3"></td>
<td height="8" colspan="3"></td>
<td height="8" colspan="3"></td>
<td height="8" colspan="3"></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Total</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">5,384</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">5,203</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">10,399</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">10,094</font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
</tr>
<!-- 6 Last_Row * DO NOT REMOVE OR EDIT --></tbody>
</table>
</div>
2141000000
88000000
<div>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font size="2" face=
"Times New Roman"><b>Note 21. Legal Proceedings and
Contingencies</b></font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font size=
"1"> </font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font size="2" face=
"Times New Roman">Various lawsuits, claims, proceedings and
investigations are pending involving the Company and certain of its
subsidiaries. In accordance with SFAS No. 5, <i>Accounting for
Contingencies</i>, the Company records accruals for such
contingencies when it is probable that a liability will be incurred
and the amount of loss can be reasonably estimated. These matters
involve antitrust, securities, patent infringement, pricing, sales
and marketing practices, environmental, health and safety matters,
consumer fraud, employment matters, product liability and insurance
coverage.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">The most significant of these matters are
described in “Item 8. Financial Statements—Note 25.
Legal Proceedings and Contingencies” in the Company’s
2008 Annual Report on Form 10-K. The following discussion is
limited to certain recent developments related to these previously
described matters, and certain new matters that have not previously
been described in a prior report. Accordingly, the disclosure below
should be read in conjunction with the Company’s 2008 Annual
Report on Form 10-K and Quarterly Report on Form 10-Q for the
quarter ended March 31, 2009. Unless noted to the contrary,
all matters described in those earlier reports remain outstanding
and the status is consistent with what has previously been
reported.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">There can be no assurance that there will
not be an increase in the scope of pending matters or that any
future lawsuits, claims, proceedings or investigations will not be
material.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman"><b>INTELLECTUAL PROPERTY</b></font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman"><b>PLAVIX* Litigation</b></font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">PLAVIX* is currently the Company’s
largest product ranked by net sales. The PLAVIX* patents are
subject to a number of challenges in the U.S., including the
litigation with Apotex Inc. and Apotex Corp. (Apotex) described
below, and in other less significant markets for the product. It is
not possible reasonably to estimate the impact of these lawsuits on
the Company. However, loss of market exclusivity of PLAVIX* and
sustained generic competition in the U.S. would be material to the
Company’s sales of PLAVIX*, results of operations and cash
flows, and could be material to the Company’s financial
condition and liquidity. The Company and its product partner,
sanofi, (the Companies) intend to vigorously pursue enforcement of
their patent rights in PLAVIX*.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman"><b>PLAVIX* Litigation –
U.S.</b></font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman"><u>Patent Infringement Litigation against
Apotex and Related Matters</u></font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">As previously disclosed, the Company’s
U.S. territory partnership under its alliance with sanofi is a
plaintiff in a pending patent infringement lawsuit instituted in
the United States District Court for the Southern District of New
York (District Court) entitled Sanofi-Synthelabo,
Sanofi-Synthelabo, Inc. and Bristol-Myers Squibb Sanofi
Pharmaceuticals Holding Partnership v. Apotex. The suit is based on
U.S. Patent No. 4,847,265 (the ‘265 Patent), a
composition of matter patent, which discloses and claims, among
other things, the hydrogen sulfate salt of clopidogrel, a medicine
made available in the U.S. by the Companies as PLAVIX*. Also, as
previously reported, the District Court upheld the validity and
enforceability of the ‘265 Patent, maintaining the main
patent protection for PLAVIX* in the U.S. until November 2011. The
District Court also ruled that Apotex’s generic clopidogrel
bisulfate product infringed the ‘265 Patent and permanently
enjoined Apotex from engaging in any activity that infringes the
‘265 Patent, including marketing its generic product in the
U.S. until after the patent expires.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">Apotex appealed the District Court’s
decision and on December 12, 2008, the United States Court of
Appeals for the Federal Circuit (Circuit Court) affirmed the
District Court’s ruling sustaining the validity of the
‘265 Patent. Apotex filed a petition with the Circuit Court
for a rehearing <i>en banc</i>, and in March 2009, the Circuit
Court denied Apotex’s petition. The case has been remanded to
the District Court for further proceedings. Apotex could file a
petition for writ of certiorari with the U.S. Supreme Court
requesting the Supreme Court to review the Circuit Court’s
decision.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">As previously disclosed, the Company’s
U.S. territory partnership under its alliance with sanofi is also a
plaintiff in five additional pending patent infringement lawsuits
against Dr. Reddy’s Laboratories, Inc. and
Dr. Reddy’s Laboratories, LTD (Dr. Reddy’s), Teva
Pharmaceuticals USA, Inc. (Teva), Cobalt Pharmaceuticals Inc.
(Cobalt), Watson Pharmaceuticals, Inc. and Watson Laboratories,
Inc. (Watson) and Sun Pharmaceuticals (Sun). The lawsuits against
Dr. Reddy’s, Teva and Cobalt relate to the ‘265
Patent. In May 2009, Dr Reddy’s signed a consent judgment in
favor of sanofi and BMS conceding the validity and infringement of
the ‘265 Patent. As previously reported, the patent
infringement actions against Teva and Cobalt were stayed pending
resolution of the Apotex litigation, and the parties to those
actions agreed to be bound by the outcome of the litigation against
Apotex, although Teva and Cobalt can appeal the outcome of the
litigation. Consequently, on July 12, 2007, the District Court
entered judgments against Cobalt and Teva and permanently enjoined
Cobalt and Teva from engaging in any activity that infringes the
‘265 Patent until after the Patent expires. Cobalt and Teva
have each filed an appeal and these appeals are still pending. The
lawsuit against Watson, filed in October</font> <font size="2"
face="Times New Roman">2004, is based on U.S. Patent
No. 6,429,210 (the ‘210 Patent), which discloses and
claims a particular crystalline or polymorph form of the hydrogen
sulfate salt of clopidogrel, which is marketed as PLAVIX*. In
December 2005, the court permitted Watson to pursue its declaratory
judgment counterclaim with respect to U.S. Patent
No. 6,504,030. In January 2006, the Court approved the
parties’ stipulation to stay this case pending the outcome of
the trial in the Apotex matter. On May 1, 2009, BMS and Watson
entered into a stipulation to dismiss the case. In April 2007,
Pharmastar filed a request for <i>inter partes</i> reexamination of
the ‘210 Patent. The U.S. Patent and Trademark Office granted
this request in July of 2007. Thus, the ‘210 Patent is
currently under reexamination. The lawsuit against Sun, filed on
July 11, 2008, is based on infringement of the ‘265
Patent and the ‘210 Patent. With respect to the ‘265
Patent, Sun has agreed to be bound by the outcome of the Apotex
litigation. Each of Dr. Reddy’s, Teva, Cobalt, Watson
and Sun have filed an aNDA with the FDA, and, with respect to
Dr. Reddy’s, Teva, Cobalt and Watson all exclusivity
periods and statutory stay periods under the Hatch-Waxman Act have
expired. Accordingly, final approval by the FDA would provide each
company authorization to distribute a generic clopidogrel bisulfate
product in the U.S., subject to various legal remedies for which
the Companies may apply including injunctive relief and
damages.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">It is not possible at this time reasonably
to assess the outcome of any petition for writ of certiorari by
Apotex requesting an appeal of the Circuit Court’s decision,
or the other PLAVIX* patent litigations or the timing of any
renewed generic competition for PLAVIX* from Apotex or additional
generic competition for PLAVIX* from other third-party generic
pharmaceutical companies. However, if Apotex were to prevail in an
appeal of the patent litigation, the Company would expect to face
renewed generic competition for PLAVIX* promptly thereafter. Loss
of market exclusivity for PLAVIX* and/or sustained generic
competition would be material to the Company’s sales of
PLAVIX*, results of operations and cash flows, and could be
material to the Company’s financial condition and liquidity.
Additionally, it is not possible at this time reasonably to assess
the amount of damages that could be recovered by the Company and
Apotex’s ability to pay such damages in the event the Company
prevails in the patent litigation.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">Additionally, on November 13, 2008,
Apotex filed the lawsuit in New Jersey Superior Court entitled,
<i>Apotex Inc., et al. v. sanofi-aventis, et al</i>., seeking
payment of $60 million, plus interest, related to the break-up of
the proposed settlement agreement. On December 31, 2008, the
defendants removed the case to the Federal District Court for New
Jersey. Apotex moved to remand the case back to state court and, in
June 2009, the Federal District Court of New Jersey remanded the
case back to the New Jersey Superior Court.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman"><b>PLAVIX* Litigation –
International</b></font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman"><u>PLAVIX* – Canada (Apotex,
Inc.)</u></font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">On April 22, 2009, Apotex filed an
impeachment action against sanofi in the Federal Court of Canada
alleging that sanofi’s Canadian Patent No. 1,336,777
(the ‘777 Patent) is invalid. The ‘777 Patent covers
clopidogrel bisulfate and was the patent at issue in the
prohibition action in Canada previously disclosed in which the
Canadian Federal Court of Ottawa rejected Apotex’s challenge
to the ‘777 Patent, held that the asserted claims are novel,
not obvious and infringed, and granted sanofi’s application
for an order of prohibition against the Minster of Health and
Apotex, precluding approval of Apotex’s Abbreviated New Drug
Submission until the patent expires in 2012, which decision was
affirmed on appeal by both the Federal Court of Appeal and the
Supreme Court of Canada. On June 8, 2009, sanofi filed its
defense to the impeachment action and filed a suit against Apotex
for infringement of the ‘777 Patent.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman"><b>OTHER INTELLECTUAL PROPERTY
LITIGATION</b></font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman"><u>ATRIPLA*</u></font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">In April 2009, Teva filed an aNDA to
manufacture and market a generic version of ATRIPLA*. Teva sent
Gilead Sciences Inc. (Gilead) a Paragraph IV certification letter
challenging two of the fifteen Orange-Book listed patents for
ATRIPLA*. ATRIPLA* is the product of a joint venture between the
Company and Gilead. In May 2009, Gilead filed a patent infringement
action against Teva in the United States District Court for the
Southern District of New York.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman"><b>SHAREHOLDER DERIVATIVE
ACTIONS</b></font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">As previously disclosed, on July 31,
2007, certain members of the Board of Directors, current and former
officers and the Company were named in two derivative actions filed
in the New York State Supreme Court, <i>John Frank v. Peter Dolan,
et al. (07-602580)</i> and <i>Donald Beebout v. Peter Dolan, et al.
(07-602579)</i>, and one derivative action filed in the federal
district court, <i>Steven W. Sampson v. James D. Robinson, III, et
al. (07-CV-6890)</i>. The complaints allege breaches of fiduciary
duties for allegedly failing to disclose material information
relating to efforts to settle the PLAVIX* patent infringement
litigation with Apotex. Plaintiffs seek monetary damages on behalf
of the Company, contribution and indemnification. By decision filed
on December 13, 2007, the state court granted motions to
dismiss the complaints, <i>Frank</i> and <i>Beebout</i>, relating
to certain members of the Board of Directors, but did
not</font> <font size="2" face="Times New Roman">dismiss the
complaints as to the former officers. By decision dated
August 20, 2008, the federal district court granted the
Company’s motion to dismiss the <i>Sampson</i> action.
Plaintiffs appealed the district court’s decision to the U.S.
Circuit Court of Appeals for the Second Circuit. In June 2009, the
parties reached a settlement in principle to resolve this matter,
for an amount that is not material to the Company, pending final
approval by the court.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman"><b>SECURITIES LITIGATION</b></font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman"><u>In Re Bristol-Myers Squibb Co. Securities
Litigation</u></font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">As previously disclosed, in June and July
2007, two putative class action complaints, <i>Minneapolis
Firefighters’ Relief Assoc. v. Bristol-Myers Squibb Co., et
al. (07 CV 5867)</i> and <i>Jean Lai v. Bristol-Myers Squibb
Company, et al.,</i> were filed in the U.S. District for the
Southern District of New York against the Company, the
Company’s former Chief Executive Officer, Peter Dolan and
former Chief Financial Officer, Andrew Bonfield. The complaints
allege violations of securities laws for allegedly failing to
disclose material information relating to efforts to settle the
PLAVIX* patent infringement litigation with Apotex. On
September 20, 2007, the Court dismissed the <i>Lai</i> case
without prejudice, changed the caption of the case to <i>In re
Bristol-Myers Squibb, Co. Securities Litigation</i>, and appointed
Ontario Teachers’ Pension Plan Board as lead plaintiff. On
October 15, 2007, Ontario Teachers’ Pension Plan Board
filed an amended complaint making similar allegations as the
earlier filed complaints, naming an additional former officer but
no longer naming Andrew Bonfield as a defendant. By decision dated
August 20, 2008, the federal district court denied
defendants’ motions to dismiss. In May 2009, the parties
reached a settlement in principle to resolve this litigation for
payment of $125 million, pending final approval by the
court.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman"><b>PRICING, SALES AND PROMOTIONAL PRACTICES
LITIGATION AND INVESTIGATIONS</b></font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman"><u>AWP Litigation</u></font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">As previously disclosed, the Company,
together with a number of other pharmaceutical manufacturers, is a
defendant in a number of private class actions as well as suits
brought by the attorneys general of various states. In these
actions, plaintiffs allege that defendants caused the Average
Wholesale Prices (AWPs) of their products to be inflated, thereby
injuring government programs, entities and persons who reimbursed
prescription drugs based on AWPs. The Company remains a defendant
in four state attorneys’ general suits pending in federal and
state courts around the country.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">As previously reported, one set of class
actions, together with a suit by the Arizona attorney general, have
been consolidated in the U.S. District Court for the District of
Massachusetts (AWP MDL). The Court in the AWP MDL has certified
three classes of persons and entities who paid for or reimbursed
for seven of the Company’s physician-administered drugs. In
June 2007, the Company settled in principle the claims of Class 1
(Medicare Part B beneficiaries nationwide) for $13 million, plus
half the costs of class notice up to a maximum payment of $1
million and the parties are finalizing the terms of the settlement.
A hearing is scheduled for preliminary approval of the Class 1
settlement. In June 2007, in a non-jury trial in the AWP MDL, the
Court found the Company liable for violations of
Massachusetts’ consumer protection laws with respect to
certain oncology drugs for certain years and awarded damages in the
amount of $183 thousand plus interest for Class 3 (private
third-party payors) and instructed the parties to apply the
Court’s opinion to determine damages for Class 2 (Medigap
insurers). In August, 2007, the Court found damages of $187
thousand plus interest for Class 2. The Company appealed the June
2007 decision to the U.S. Court of Appeals for the First Circuit
and oral arguments were heard on November 4, 2008. In
September 2008, the Court in the AWP MDL issued an order certifying
multi-state classes for Class 2 and Class 3.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">In May 2009, the Company reached an
agreement in principle to settle the claims of Classes 2 and 3 for
$6 million. A preliminary approval hearing is scheduled. The
Company’s appeal to the First Circuit has been stayed.
Additionally, in May 2009, the Company reached an agreement in
principle to settle the AWP lawsuit filed by the state of Arizona,
for an amount that is not material to the Company.</font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font size=
"1"> </font></p>
<!--##PBStart##-->
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font size="2" face=
"Times New Roman"><b>ENVIRONMENTAL PROCEEDINGS</b></font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">As previously reported, the Company is a
party to several environmental proceedings and other matters, and
is responsible under various state, Federal and foreign laws,
including the Comprehensive Environmental Response, Compensation
and Liability Act (CERCLA), for certain costs of investigating
and/or remediating contamination resulting from past industrial
activity at the Company’s current or former sites or at waste
disposal or reprocessing facilities operated by
third-parties.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman"><u>CERCLA Matters</u></font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">With respect to CERCLA matters for which the
Company is responsible under various state, Federal and foreign
laws, the Company typically estimates potential costs based on
information obtained from the U.S. Environmental Protection Agency
(EPA), or counterpart state agency and/or studies prepared by
independent consultants, including the total estimated costs for
the site and the expected cost-sharing, if any, with other
“potentially responsible parties”, and the Company
accrues liabilities when they are probable and reasonably
estimable. As of June 30, 2009, the Company estimated its
share of the total future costs for these sites to be approximately
$60 million, recorded as other liabilities, which represents the
sum of best estimates or, where no simple estimate can reasonably
be made, estimates of the minimal probable amount among a range of
such costs (without taking into account any potential recoveries
from other parties, which are not currently expected). These
estimated future costs include a site in Brazil where the Company
is working with the Brazilian environmental authorities to
determine what remediation steps must be undertaken.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman"><u>North Brunswick Township Board of
Education</u></font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">As previously disclosed, in October 2003,
the Company was contacted by counsel representing the North
Brunswick, NJ Board of Education (BOE) regarding a site where waste
materials from E.R. Squibb and Sons may have been disposed from the
1940’s through the 1960’s. Fill material containing
industrial waste and heavy metals in excess of residential
standards was discovered during an expansion project at the North
Brunswick Township High School, as well as at a number of
neighboring residential properties and adjacent public park areas.
In January 2004, the NJDEP sent the Company and others an
information request letter about possible waste disposal at the
site, to which the Company responded in March 2004. The BOE and the
Township, as the current owners of the school property and the
park, are conducting and jointly financing soil remediation work
and ground water investigation work under a work plan approved by
NJDEP, and has asked the Company to contribute to the cost. The
Company is actively monitoring the clean-up project, including its
costs. To date, neither the school board nor the Township has
asserted any claim against the Company. Instead, the Company and
the local entities have negotiated an agreement to attempt to
resolve the matter by informal means, including mediation and
binding allocation as necessary. A central component of the
agreement is provision by the Company of interim funding to help
defray cleanup costs and assure the work is not interrupted; the
Company transmitted an initial interim funding payment in December
2007. The parties commenced mediation in late 2008, and it is
uncertain whether further sessions will be productive. If not, the
parties will move to a binding allocation process.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman"><u>ODS Regulatory Compliance</u></font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">As previously disclosed, the U.S. EPA was
investigating industrial and commercial facilities throughout the
U.S. that use refrigeration equipment containing ozone-depleting
substances (ODS) and enforcing compliance with regulations
governing the prevention, service and repair of leaks (ODS
requirements). In 2004, the Company performed a voluntary
corporate-wide audit at its facilities in the U.S. and Puerto Rico
that use ODS-containing refrigeration equipment. The Company
submitted an audit report to the EPA in November 2004, identifying
potential violations of the ODS requirements at several of its
facilities. In addition to the matters covered in the
Company’s audit report letter to the EPA, the EPA previously
sent Mead Johnson a request for information regarding compliance
with ODS requirements at its facility in Evansville, Indiana. The
Company responded to the request in June 2004, and, as a result,
identified potential violations at the Evansville facility. The
Company signed a Consent Decree with the EPA to resolve both the
potential violations discovered during the audit and those
identified as a result of the EPA request for information to the
Evansville facility, which was filed in the Evansville Division of
the U.S. District Court for the Southern District of Indiana on
July 8, 2008. The Consent Decree required the Company to pay a
civil penalty of $127 thousand and to retire, retrofit or replace
17 ODS-containing refrigeration units by June 2009 located at
facilities in New Jersey, Indiana, and Puerto Rico. The Consent
Decree also required the Company to spend at least $2,225 thousand
on a Supplemental Environmental Project, which consists of the
removal of two ODS-containing comfort cooling devices at the New
Brunswick, NJ facility and the tie in of their functions to a new
centralized</font> <font size="2" face=
"Times New Roman">chiller system that does not use ODS as a
refrigerant. The Court entered the Consent Decree on May 6,
2009, the $127 thousand civil penalty was paid on June 4,
2009, and the Company will complete all of its obligations under
the Consent Decree by July 31, 2009, as required.</font></p>
</div>
<div>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font size="2" face=
"Times New Roman"><b>Note 15. Accrued Expenses</b></font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font size=
"1"> </font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font size="2" face=
"Times New Roman">The major categories of accrued expenses were as
follows:</font></p>
<table border="0" cellspacing="0" cellpadding="0" width="100%"
align="center"><!-- 5 First_Row * DO NOT REMOVE OR EDIT -->
<tbody>
<tr>
<td width="82%"></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
</tr>
<tr>
<td valign="bottom" nowrap="nowrap"><font size="1" face=
"Times New Roman">Dollars in Millions</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>June 30,<br />
2009</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>December 31,<br />
2008</b></font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Employee compensation and benefits</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">467</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">784</font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Royalties</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">563</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">515</font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Accrued research and development</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">451</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">466</font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Restructuring—current</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">129</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">158</font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Pension and postretirement benefits</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">84</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">90</font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Other</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">854</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">923</font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Total accrued expenses</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">    2,548</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">    2,936</font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
</tr>
<!-- 6 Last_Row * DO NOT REMOVE OR EDIT --></tbody>
</table>
</div>
191000000
61000000
0
810000000
2219000000
598000000
2219000000
2683000000
603000000
<div>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font size="2" face=
"Times New Roman"><b>Note 7. Earnings Per Share</b></font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">The numerator for basic earnings per share
is net earnings attributable to shareholders reduced by dividends
and undistributed earnings attributable to unvested shares. The
numerator for diluted earnings per share is net earnings
attributable to shareholders with interest expense added back for
the assumed conversion of the convertible debt into common stock
and reduced by dividends and undistributed earnings attributable to
unvested shares. The denominator for basic earnings per share is
the weighted-average number of common stock outstanding during the
period. The denominator for diluted earnings per share is the
weighted-average shares outstanding adjusted for the effect of
dilutive stock options, restricted shares and contingently
convertible debt into common stock. The computations for basic and
diluted earnings per common share were as follows:</font></p>
<table border="0" cellspacing="0" cellpadding="0" width="100%"
align="center"><!-- 5 First_Row * DO NOT REMOVE OR EDIT -->
<tbody>
<tr>
<td width="73%"></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="3%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="6" align="middle"><font size="1" face=
"Times New Roman"><b>Three Months Ended June 30,</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="6" align="middle"><font size="1" face=
"Times New Roman"><b>Six Months Ended June 30,</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr>
<td valign="bottom" nowrap="nowrap"><font size="1" face=
"Times New Roman">Amounts in Millions, Except Per Share
Data</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>2009</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>2008</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>2009</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>2008</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman"><u>Basic:</u></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Net Earnings from Continuing
Operations</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">1,298</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">963</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">2,219</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">1,840</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Less Net Earnings Attributable to Noncontrolling
Interest</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(315</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(241</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(598</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(471</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Net Earnings from Continuing Operations
Attributable to Bristol-Myers Squibb Company</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">983</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">722</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">1,621</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">1,369</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Dividends and undistributed earnings attributable
to unvested shares</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(6</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(4</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(9</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(7</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Net Earnings from Continuing Operations
Attributable to Bristol-Myers Squibb Company used for Basic
Earnings per Common Share Calculation</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">977</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">718</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">1,612</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">1,362</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Discontinued Operations:</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 3em"><font size="2" face=
"Times New Roman">Earnings, net of taxes</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">42</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">99</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 3em"><font size="2" face=
"Times New Roman">Loss on Disposal, net of taxes</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(43</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Net Earnings Attributable to Bristol-Myers Squibb
Company</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">977</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">760</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">1,612</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">1,418</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
</tr>
<tr>
<td height="16"></td>
<td height="16" colspan="4"></td>
<td height="16" colspan="4"></td>
<td height="16" colspan="4"></td>
<td height="16" colspan="4"></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman"><u>Basic Earnings Per Share:</u></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Average Common Shares Outstanding –
Basic</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">1,980</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">1,977</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">1,979</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">1,976</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
</tr>
<tr>
<td height="8"></td>
<td height="8" colspan="4"></td>
<td height="8" colspan="4"></td>
<td height="8" colspan="4"></td>
<td height="8" colspan="4"></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Net Earnings from Continuing Operations
Attributable to Bristol-Myers Squibb Company per Common
Share</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">0.49</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">0.36</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">0.81</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">0.69</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Discontinued Operations:</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 3em"><font size="2" face=
"Times New Roman">Earnings, net of taxes</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">0.02</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">0.05</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 3em"><font size="2" face=
"Times New Roman">Loss on Disposal, net of taxes</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(0.02</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Net Earnings Attributable to Bristol-Myers Squibb
Company per Common Share</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">0.49</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">0.38</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">0.81</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">0.72</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
</tr>
<tr>
<td height="16"></td>
<td height="16" colspan="4"></td>
<td height="16" colspan="4"></td>
<td height="16" colspan="4"></td>
<td height="16" colspan="4"></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman"><u>Diluted:</u></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Net Earnings from Continuing
Operations</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">1,298</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">963</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">2,219</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">1,840</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Less Net Earnings Attributable to Noncontrolling
Interest</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(315</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(241</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(598</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(471</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Net Earnings from Continuing Operations
Attributable to Bristol-Myers Squibb Company</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">983</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">722</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">1,621</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">1,369</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Contingently convertible debt interest expense
and dividends and undistributed earnings attributable to unvested
shares</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(6</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(9</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">5</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Net Earnings from Continuing Operations
Attributable to Bristol-Myers Squibb Company used for Diluted
Earnings per Common Share Calculation</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">977</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">722</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">1,612</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">1,374</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Discontinued Operations:</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 3em"><font size="2" face=
"Times New Roman">Earnings, net of taxes</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">42</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">99</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 3em"><font size="2" face=
"Times New Roman">Loss on Disposal, net of taxes</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(43</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Net Earnings Attributable to Bristol-Myers Squibb
Company</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">977</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">764</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">1,612</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">1,430</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
</tr>
<tr>
<td height="16"></td>
<td height="16" colspan="4"></td>
<td height="16" colspan="4"></td>
<td height="16" colspan="4"></td>
<td height="16" colspan="4"></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman"><u>Diluted Earnings Per Share:</u></font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Average Common Shares Outstanding –
Basic</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">1,980</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">1,977</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">1,979</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">1,976</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Contingently convertible debt common stock
equivalents</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">1</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">29</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">1</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">29</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Incremental shares outstanding assuming the
exercise/vesting of share-based compensation awards</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">2</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">2</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Average Common Shares Outstanding –
Diluted</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">1,983</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">2,006</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">1,982</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">2,005</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
</tr>
<tr>
<td height="16"></td>
<td height="16" colspan="4"></td>
<td height="16" colspan="4"></td>
<td height="16" colspan="4"></td>
<td height="16" colspan="4"></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Net Earnings from Continuing Operations
Attributable to Bristol-Myers Squibb Company per Common
Share</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">0.49</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">0.36</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">0.81</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">0.68</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Discontinued Operations:</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
<td valign="bottom"></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 3em"><font size="2" face=
"Times New Roman">Earnings, net of taxes</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">0.02</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">0.05</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 3em"><font size="2" face=
"Times New Roman">Loss on Disposal, net of taxes</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(0.02</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Net Earnings Attributable to Bristol-Myers Squibb
Company per Common Share</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">0.49</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">0.38</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">0.81</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">0.71</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
</tr>
<!-- 6 Last_Row * DO NOT REMOVE OR EDIT --></tbody>
</table>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">Weighted-average shares issuable upon the
exercise of stock options, which were not included in the diluted
earnings per share calculation because they were anti-dilutive,
were 138 million and 143 million for the three months
ended June 30, 2009 and 2008, respectively, and
132 million and 142 million for the six months ended
June 30, 2009 and 2008, respectively.</font></p>
</div>
132000000
<div>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font size="2" face=
"Times New Roman"><b>Note 1. Basis of Presentation and New
Accounting Standards</b></font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">Bristol-Myers Squibb Company (which may be
referred to as Bristol-Myers Squibb, BMS or the Company) prepared
these unaudited consolidated financial statements following the
requirements of the Securities and Exchange Commission and United
States (U.S.) generally accepted accounting principles (GAAP) for
interim reporting. Under those rules, certain footnotes and other
financial information that are normally required by GAAP for annual
financial statements can be condensed or omitted. The Company is
responsible for the consolidated financial statements included in
this Form 10-Q. These consolidated financial statements include all
normal and recurring adjustments necessary for a fair presentation
of the Company’s financial position at June 30, 2009 and
December 31, 2008, the results of its operations for the three
and six months ended June 30, 2009 and 2008 and its cash flows
for the six months ended June 30, 2009. All material
intercompany balances and transactions have been eliminated.
Material subsequent events are evaluated and disclosed through the
report issuance date, July 23, 2009. These unaudited
consolidated financial statements and the related notes should be
read in conjunction with the audited consolidated financial
statements for the year ended December 31, 2008 included in
our Current Report on Form 8-K filed on April 28, 2009. See
“—Note 3. Business Segments” for discussion of
the change in business segments, due to the Mead Johnson Nutrition
Company (Mead Johnson) initial public offering. Certain
reclassifications were made to conform to the current period
presentation.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">Revenues, expenses, assets and liabilities
can vary during each quarter of the year. Accordingly, the results
and trends in these unaudited consolidated financial statements may
not be indicative of full year operating results.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">The Company recognizes revenue when title
and substantially all the risks and rewards of ownership have
transferred to the customer. Generally, revenue is recognized at
the time of shipment; however, for certain sales made by Mead
Johnson and certain non-U.S. businesses within the
BioPharmaceuticals segment, revenue is recognized on the date of
receipt by the purchaser. Revenues are reduced at the time of
recognition to reflect expected returns that are estimated based on
historical experience and business trends. Additionally, provisions
are made at the time of revenue recognition for all discounts,
rebates and estimated sales allowances based on historical
experience updated for changes in facts and circumstances, as
appropriate. Such provisions are recorded as a reduction of
revenue.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">In addition, the Company includes alliance
revenue in net sales. The Company has agreements to promote
pharmaceuticals discovered by other companies. Alliance revenue is
based upon a percentage of the Company’s copromotion
partners’ net sales and is earned when the related product is
shipped by the copromotion partners and title passes to the
customer.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">The preparation of financial statements in
conformity with GAAP requires the use of estimates and assumptions
that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and contingent liabilities at the
date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. The most
significant assumptions are employed in estimates used in
determining values of intangible assets; restructuring charges and
accruals; sales rebate and return accruals; inventory obsolescence;
legal contingencies; tax assets and tax liabilities; stock-based
compensation; retirement and postretirement benefits (including the
actuarial assumptions); financial instruments, including marketable
securities with no observable market quotes; as well as in
estimates used in applying the revenue recognition policy. Actual
results may differ from the estimated results.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">Effective July 1, 2009, the Financial
Accounting Standards Board (FASB) issued Statement of Financial
Standards (SFAS) No. 168, <i>The Hierarchy of Generally
Accepted Accounting Principles.</i> SFAS No. 168 reduces the
U.S. GAAP hierarchy to two levels, one that is authoritative and
one that is not. The adoption of this pronouncement is not expected
to have a material effect on the consolidated financial
statements.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">The Company adopted the provisions of SFAS
No. 157, <i>Fair Value Measurements,</i> with respect to
non-financial assets and liabilities effective January 1,
2009. This pronouncement defines fair value, establishes a
framework for measuring fair value and expands disclosures about
fair value measurements. The adoption of SFAS No. 157 did not
have an impact on the Company’s consolidated financial
statements.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">In June 2009, the FASB issued SFAS
No. 166, <i>Accounting for Transfers of Financial Assets, an
amendment of FASB Statement No. 140.</i> Among other items,
SFAS No. 166 removes the concept of a qualifying
special-purpose entity and clarifies that the objective of
paragraph 9 of SFAS No. 140 is to determine whether a
transferor and all of the entities included in the
transferor’s financial statements being presented have
surrendered control over transferred financial assets. SFAS
No. 166 is effective January 1, 2010. The
Company does not expect the adoption of this pronouncement to have
a material effect on the consolidated financial
statements.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">In June 2009, the FASB issued SFAS
No. 167, <i>Amending FASB Interpretation No. 46(R).</i>
SFAS No. 167 amends FIN 46(R) in determining whether an
enterprise has a controlling financial interest in a variable
interest entity. This determination identifies the primary
beneficiary of a variable interest entity as the enterprise that
has both the power to direct the activities of a variable
interest</font> <font size="2" face="Times New Roman">entity
that most significantly impacts the entity’s economic
performance, and the obligation to absorb losses or the right to
receive benefits of the entity that could potentially be
significant to the variable interest entity. SFAS No. 167 also
requires ongoing reassessments of whether an enterprise is the
primary beneficiary and eliminates the quantitative approach
previously required for determining the primary beneficiary. SFAS
No. 167 is effective January 1, 2010. The Company is
currently evaluating the impact of adopting this
pronouncement.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">The Company adopted SFAS No.160,
<i>Noncontrolling Interests in Consolidated Financial
Statements—an amendment of ARB No. 51,</i> on
January 1, 2009. As a result of adoption the following
retroactive adjustment was made: the December 31, 2008
noncontrolling interest balance of $33 million, previously
presented as $66 million of receivables and $33 million of
non-current other liabilities, has been presented as part of
equity. Also, noncontrolling interest has been presented as a
reconciling item in the consolidated statements of earnings, the
consolidated statements of comprehensive income and retained
earnings and the consolidated statements of cash flows.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">The Company adopted SFAS No. 141(R),
<i>Business Combinations,</i> for business combinations on or after
January 1, 2009. This pronouncement replaced SFAS
No. 141, <i>Business</i> Co<i>mbinations</i>, and requires
recognition of assets acquired, liabilities assumed, and any
noncontrolling interest in the acquiree at the acquisition date,
measured at their fair values as of that date. In a business
combination achieved in stages, this pronouncement requires
recognition of identifiable assets and liabilities, as well as
the non-controlling interest in the acquiree, at the full amounts
of their fair values. This pronouncement also requires the fair
value of acquired in-process research and development to be
recorded as indefinite lived intangibles, contingent consideration
to be recorded on the acquisition date, and restructuring and
acquisition-related deal costs to be expensed as incurred. In
addition, any excess of the fair value of net assets acquired over
purchase price and any subsequent changes in estimated
contingencies are to be recorded in earnings. The adoption of SFAS
No. 141(R) did not have an impact on the Company’s
consolidated financial statements as there were no business
combinations.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">The Company adopted the provisions of
Emerging Issues Task Force (EITF) Issue No. 07-1,
<i>Accounting for Collaborative Arrangements Related to the
Development and Commercialization of Intellectual Property,</i>
effective January 1, 2009 and the provisions have been applied
retroactively. According to this pronouncement a collaborative
arrangement is one in which the participants are actively involved
and are exposed to significant risks and rewards that depend on the
ultimate commercial success of the endeavor. Revenues and costs
incurred with third-parties in connection with collaborative
arrangements are presented gross or net based on the criteria in
EITF Issue No. 99-19, <i>Reporting Revenue Gross as a
Principal versus Net as an Agent</i>, and other accounting
literature. Payments to or from collaborators are evaluated and
presented based on the nature of the arrangement and its terms, the
nature of the entity’s business, and whether those payments
are within the scope of other accounting literature. The nature and
purpose of collaborative arrangements are disclosed along with the
accounting policies and the classification and amounts of
significant financial statement amounts related to the
arrangements. Activities in the arrangement conducted in a separate
legal entity are accounted for under other accounting literature;
however, required disclosure under EITF Issue No. 07-1 applies
to the entire collaborative agreement. This pronouncement did not
have a material impact on the Company’s consolidated
financial statements.</font></p>
</div>
1234000000
<div>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman"><b>Note 16. Equity</b></font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">Changes in common shares, treasury stock,
capital in excess of par value of stock and restricted stock were
as follows:</font></p>
<table border="0" cellspacing="0" cellpadding="0" width="100%"
align="center"><!-- 5 First_Row * DO NOT REMOVE OR EDIT -->
<tbody>
<tr>
<td width="53%"></td>
<td valign="bottom" width="6%"></td>
<td></td>
<td valign="bottom" width="6%"></td>
<td></td>
<td></td>
<td valign="bottom" width="6%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="6%"></td>
<td></td>
<td></td>
<td valign="bottom" width="6%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td valign="bottom" nowrap="nowrap"><font size="1" face=
"Times New Roman">Dollars and Shares in Millions</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle"><font size="1" face=
"Times New Roman"><b>Common Shares<br />
Issued</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align=
"middle"><font size="1" face="Times New Roman"><b>Treasury<br />
Stock</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>Cost<br />
    of Treasury    <br />
Stock</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>Capital in Excess<br />
of Par Value</b></font><br />
<font size="1" face="Times New Roman"><b>of Stock</b></font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>Restricted<br />
Stock</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Balance at January 1, 2008</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">2,205</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">226</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(10,584</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">2,722</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(97</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Employee stock compensation plans</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">14</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">53</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">5</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Balance at June 30, 2008</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">2,205</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">226</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(10,570</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">2,775</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(92</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
</tr>
<tr>
<td height="8"></td>
<td height="8" colspan="2"></td>
<td height="8" colspan="3"></td>
<td height="8" colspan="4"></td>
<td height="8" colspan="3"></td>
<td height="8" colspan="4"></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Balance at January 1, 2009</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">2,205</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">226</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(10,566</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">2,828</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(71</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Mead Johnson initial public offering</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">942</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Employee stock compensation plans</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(2</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">58</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">20</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(16</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Balance at June 30, 2009</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">2,205</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">224</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(10,508</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">3,790</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(87</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
</tr>
<!-- 6 Last_Row * DO NOT REMOVE OR EDIT --></tbody>
</table>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">The accumulated balances related to each
component of other comprehensive income/(loss) (OCI), net of taxes,
were as follows:</font></p>
<table border="0" cellspacing="0" cellpadding="0" width="100%"
align="center"><!-- 5 First_Row * DO NOT REMOVE OR EDIT -->
<tbody>
<tr>
<td width="44%"></td>
<td valign="bottom" width="8%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="8%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="8%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="8%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="8%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td valign="bottom" nowrap="nowrap"><font size="1" face=
"Times New Roman">Dollars in Millions</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>Foreign<br />
Currency<br />
Translation</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>Derivatives<br />
Qualifying as<br />
Effective Hedges</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>Pension and Other<br />
Postretirement<br />
Benefits</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>Available</b></font><br />
<font size="1" face="Times New Roman"><b>for<br />
Sale Securities</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>Accumulated Other<br />
Comprehensive<br />
Income/(Loss)</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Balance at January 1, 2008</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(325</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(37</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(973</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(126</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(1,461</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Other comprehensive income/(loss)</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">26</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(31</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">63</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(109</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(51</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Balance at June 30, 2008</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(299</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(68</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(910</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(235</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(1,512</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
</tr>
<tr>
<td height="8"></td>
<td height="8" colspan="4"></td>
<td height="8" colspan="4"></td>
<td height="8" colspan="4"></td>
<td height="8" colspan="4"></td>
<td height="8" colspan="4"></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Balance at January 1, 2009</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(424</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">14</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(2,258</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(51</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(2,719</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Other comprehensive income/(loss)</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">18</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(38</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">470</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">14</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">464</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Balance at June 30, 2009</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(406</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(24</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(1,788</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(37</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(2,255</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
</tr>
<!-- 6 Last_Row * DO NOT REMOVE OR EDIT --></tbody>
</table>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">The reconciliation of noncontrolling
interest was as follows:</font></p>
<table border="0" cellspacing="0" cellpadding="0" width="100%"
align="center"><!-- 5 First_Row * DO NOT REMOVE OR EDIT -->
<tbody>
<tr>
<td width="70%"></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="6" align="middle"><font size="1" face=
"Times New Roman"><b>Three Months Ended June 30,</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="6" align="middle"><font size="1" face=
"Times New Roman"><b>Six Months Ended June 30,</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr>
<td valign="bottom" nowrap="nowrap"><font size="1" face=
"Times New Roman">Dollars in Millions</font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>2009</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>2008</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>2009</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom"
colspan="2" align="middle"><font size="1" face=
"Times New Roman"><b>2008</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Balance at beginning of period</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(208</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">6</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(33</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(27</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Mead Johnson initial public offering</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(160</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Net earnings attributable to noncontrolling
interest</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">456</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">358</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">864</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">699</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Other comprehensive income attributable to
noncontrolling interest</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">2</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">5</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">—</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">  </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Distributions</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(410</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(376</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(836</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman"> </font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(684</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font size="2" face=
"Times New Roman">Balance at June 30</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(160</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(12</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(160</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="2" face=
"Times New Roman">$</font></td>
<td valign="bottom" align="right"><font size="2" face=
"Times New Roman">(12</font></td>
<td valign="bottom" nowrap="nowrap"><font size="2" face=
"Times New Roman">) </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom"> </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
</tr>
<!-- 6 Last_Row * DO NOT REMOVE OR EDIT --></tbody>
</table>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">Noncontrolling interest is primarily related
to the Company’s partnerships with sanofi for the territory
covering the Americas for sales of PLAVIX* and the 16.9% of Mead
Johnson owned by the public. Net earnings attributable to
noncontrolling interest is presented net of taxes of $157 million
and $117 million for the three months ended June 30, 2009 and
2008, respectively, and $289 million and $228 million for the six
months ended June 30, 2009 and 2008, respectively, in the
consolidated statements of earnings with a corresponding increase
to the provision for income taxes. Distribution of the partnership
profits to sanofi and sanofi’s funding of ongoing partnership
operations occur on a routine basis and are included within
operating activities in the consolidated statements of cash flows.
The above activity includes the pre-tax income and distributions
related to these partnerships.</font></p>
</div>
-11000000
8000000
<div>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px"><font size="2" face=
"Times New Roman"><b>Note 5. Mead Johnson Nutrition Company Initial
Public Offering</b></font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">In February 2009, Mead Johnson Nutrition
Company completed an initial public offering (IPO), in which it
sold 34.5 million shares of its Class A common stock at
$24 per share. The net proceeds, after deducting $46 million of
underwriting discounts, commissions and offering expenses, were
$782 million, which were allocated to noncontrolling interest and
capital in excess of par value of stock within the Company’s
equity.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">Upon completion of the IPO, the Company held
42.3 million shares of Mead Johnson Class A common stock
and 127.7 million shares of Mead Johnson Class B common stock,
representing an 83.1% interest in Mead Johnson and 97.5% of the
combined voting power of the outstanding common stock. The rights
of the holders of the shares of Class A common stock and Class
B common stock are identical, except with regard to voting and
conversion. Each share of Class A common stock is entitled to
one vote per share. Each share of Class B common stock is entitled
to ten votes per share and is convertible at any time at the
election of the holder into one share of Class A common stock.
The Class B common stock will automatically convert into shares of
Class A common stock in certain circumstances.</font></p>
<p style="MARGIN-TOP: 12px; MARGIN-BOTTOM: 0px"><font size="2"
face="Times New Roman">Mead Johnson continues to be consolidated
for financial reporting purposes. The Company has entered into
various agreements related to the separation of Mead Johnson,
including a separation agreement, a transitional services
agreement, a tax matters agreement, a registration rights agreement
and an employee matters agreement.</font></p>
</div>
0000014272
2009-01-01
2009-06-30
0000014272
2008-01-01
2008-06-30
0000014272
2009-04-01
2009-06-30
0000014272
2008-04-01
2008-06-30
0000014272
2008-12-31
0000014272
2007-12-31
0000014272
2009-06-30
0000014272
2008-06-30
iso4217:USD
shares
iso4217:USD
shares