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x
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QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2018
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO
|
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|
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Delaware
|
|
22-0790350
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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PART I—FINANCIAL INFORMATION
|
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|
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Item 1.
|
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Item 2.
|
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Item 3.
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Item 4.
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PART II—OTHER INFORMATION
|
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Item 1.
|
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Item 1A.
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Item 2.
|
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Item 6.
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Three Months Ended March 31,
|
||||||
EARNINGS
|
2018
|
|
2017
|
||||
Net product sales
|
$
|
4,972
|
|
|
$
|
4,580
|
|
Alliance and other revenues
|
221
|
|
|
349
|
|
||
Total Revenues
|
5,193
|
|
|
4,929
|
|
||
|
|
|
|
||||
Cost of products sold
|
1,584
|
|
|
1,265
|
|
||
Marketing, selling and administrative
|
980
|
|
|
1,085
|
|
||
Research and development
|
1,250
|
|
|
1,303
|
|
||
Other income (net)
|
(400
|
)
|
|
(679
|
)
|
||
Total Expenses
|
3,414
|
|
|
2,974
|
|
||
|
|
|
|
||||
Earnings Before Income Taxes
|
1,779
|
|
|
1,955
|
|
||
Provision for Income Taxes
|
284
|
|
|
429
|
|
||
Net Earnings
|
1,495
|
|
|
1,526
|
|
||
Noncontrolling Interest
|
9
|
|
|
(48
|
)
|
||
Net Earnings Attributable to BMS
|
$
|
1,486
|
|
|
$
|
1,574
|
|
|
|
|
|
||||
Earnings per Common Share
|
|
|
|
||||
Basic
|
$
|
0.91
|
|
|
$
|
0.95
|
|
Diluted
|
0.91
|
|
|
0.94
|
|
||
|
|
|
|
||||
Cash dividends declared per common share
|
$
|
0.40
|
|
|
$
|
0.39
|
|
|
Three Months Ended March 31,
|
||||||
COMPREHENSIVE INCOME
|
2018
|
|
2017
|
||||
Net Earnings
|
$
|
1,495
|
|
|
$
|
1,526
|
|
Other Comprehensive Income/(Loss), net of taxes and reclassifications to earnings:
|
|
|
|
||||
Derivatives qualifying as cash flow hedges
|
(19
|
)
|
|
(29
|
)
|
||
Pension and postretirement benefits
|
129
|
|
|
83
|
|
||
Available-for-sale securities
|
(26
|
)
|
|
6
|
|
||
Foreign currency translation
|
5
|
|
|
29
|
|
||
Other Comprehensive Income
|
89
|
|
|
89
|
|
||
|
|
|
|
||||
Comprehensive Income
|
1,584
|
|
|
1,615
|
|
||
Noncontrolling Interest
|
9
|
|
|
(48
|
)
|
||
Comprehensive Income Attributable to BMS
|
$
|
1,575
|
|
|
$
|
1,663
|
|
ASSETS
|
March 31,
2018 |
|
December 31,
2017 |
||||
Current Assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
5,342
|
|
|
$
|
5,421
|
|
Marketable securities
|
1,428
|
|
|
1,391
|
|
||
Receivables
|
5,683
|
|
|
6,300
|
|
||
Inventories
|
1,231
|
|
|
1,166
|
|
||
Prepaid expenses and other
|
965
|
|
|
576
|
|
||
Total Current Assets
|
14,649
|
|
|
14,854
|
|
||
Property, plant and equipment
|
5,060
|
|
|
5,001
|
|
||
Goodwill
|
6,863
|
|
|
6,863
|
|
||
Other intangible assets
|
1,116
|
|
|
1,210
|
|
||
Deferred income taxes
|
1,367
|
|
|
1,610
|
|
||
Marketable securities
|
2,252
|
|
|
2,480
|
|
||
Other assets
|
1,776
|
|
|
1,533
|
|
||
Total Assets
|
$
|
33,083
|
|
|
$
|
33,551
|
|
|
|
|
|
||||
LIABILITIES
|
|
|
|
||||
Current Liabilities:
|
|
|
|
||||
Short-term debt obligations
|
$
|
1,925
|
|
|
$
|
987
|
|
Accounts payable
|
1,725
|
|
|
2,248
|
|
||
Accrued liabilities
|
5,561
|
|
|
6,014
|
|
||
Deferred income
|
117
|
|
|
83
|
|
||
Income taxes payable
|
296
|
|
|
231
|
|
||
Total Current Liabilities
|
9,624
|
|
|
9,563
|
|
||
Deferred income
|
447
|
|
|
454
|
|
||
Income taxes payable
|
3,233
|
|
|
3,548
|
|
||
Pension and other liabilities
|
1,098
|
|
|
1,164
|
|
||
Long-term debt
|
5,775
|
|
|
6,975
|
|
||
Total Liabilities
|
20,177
|
|
|
21,704
|
|
||
|
|
|
|
||||
Commitments and contingencies
|
|
|
|
||||
|
|
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|
||||
EQUITY
|
|
|
|
||||
Bristol-Myers Squibb Company Shareholders’ Equity:
|
|
|
|
||||
Preferred stock
|
—
|
|
|
—
|
|
||
Common stock
|
221
|
|
|
221
|
|
||
Capital in excess of par value of stock
|
1,916
|
|
|
1,898
|
|
||
Accumulated other comprehensive loss
|
(2,234
|
)
|
|
(2,289
|
)
|
||
Retained earnings
|
32,323
|
|
|
31,160
|
|
||
Less cost of treasury stock
|
(19,433
|
)
|
|
(19,249
|
)
|
||
Total Bristol-Myers Squibb Company Shareholders’ Equity
|
12,793
|
|
|
11,741
|
|
||
Noncontrolling interest
|
113
|
|
|
106
|
|
||
Total Equity
|
12,906
|
|
|
11,847
|
|
||
Total Liabilities and Equity
|
$
|
33,083
|
|
|
$
|
33,551
|
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Cash Flows From Operating Activities:
|
|
|
|
||||
Net earnings
|
$
|
1,495
|
|
|
$
|
1,526
|
|
Adjustments to reconcile net earnings to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization, net
|
143
|
|
|
193
|
|
||
Deferred income taxes
|
160
|
|
|
(70
|
)
|
||
Stock-based compensation
|
55
|
|
|
45
|
|
||
Impairment charges
|
80
|
|
|
78
|
|
||
Pension settlements and amortization
|
50
|
|
|
52
|
|
||
Divestiture gains and royalties
|
(255
|
)
|
|
(276
|
)
|
||
Asset acquisition charges
|
60
|
|
|
—
|
|
||
Other adjustments
|
(29
|
)
|
|
33
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Receivables
|
219
|
|
|
(246
|
)
|
||
Inventories
|
(4
|
)
|
|
(71
|
)
|
||
Accounts payable
|
(241
|
)
|
|
(114
|
)
|
||
Deferred income
|
23
|
|
|
74
|
|
||
Income taxes payable
|
114
|
|
|
414
|
|
||
Other
|
(695
|
)
|
|
(777
|
)
|
||
Net Cash Provided by Operating Activities
|
1,175
|
|
|
861
|
|
||
Cash Flows From Investing Activities:
|
|
|
|
||||
Sale and maturities of marketable securities
|
442
|
|
|
1,163
|
|
||
Purchase of marketable securities
|
(285
|
)
|
|
(1,204
|
)
|
||
Capital expenditures
|
(239
|
)
|
|
(291
|
)
|
||
Divestiture and other proceeds
|
375
|
|
|
241
|
|
||
Acquisition and other payments
|
(336
|
)
|
|
(112
|
)
|
||
Net Cash Used in Investing Activities
|
(43
|
)
|
|
(203
|
)
|
||
Cash Flows From Financing Activities:
|
|
|
|
||||
Short-term debt obligations, net
|
(344
|
)
|
|
192
|
|
||
Issuance of long-term debt
|
—
|
|
|
1,488
|
|
||
Repurchase of common stock
|
(167
|
)
|
|
(2,000
|
)
|
||
Dividends
|
(653
|
)
|
|
(655
|
)
|
||
Other
|
(58
|
)
|
|
(38
|
)
|
||
Net Cash Used in Financing Activities
|
(1,222
|
)
|
|
(1,013
|
)
|
||
Effect of Exchange Rates on Cash and Cash Equivalents
|
11
|
|
|
28
|
|
||
Decrease in Cash and Cash Equivalents
|
(79
|
)
|
|
(327
|
)
|
||
Cash and Cash Equivalents at Beginning of Period
|
5,421
|
|
|
4,237
|
|
||
Cash and Cash Equivalents at End of Period
|
$
|
5,342
|
|
|
$
|
3,910
|
|
|
Three Months Ended March 31, 2017
|
||||||
Dollars in Millions
|
As Previously Reported
|
|
As Adjusted
|
||||
Cost of products sold
|
$
|
1,259
|
|
|
$
|
1,265
|
|
Marketing, selling and administrative
|
1,074
|
|
|
1,085
|
|
||
Research and development
|
1,288
|
|
|
1,303
|
|
||
Other income (net)
|
(647
|
)
|
|
(679
|
)
|
Accounting Standard Update
|
Effective Date
|
Leases
|
January 1, 2019
|
Financial Instruments - Measurement of Credit Losses
|
January 1, 2020
|
Goodwill Impairment Testing
|
January 1, 2020
|
|
Three Months Ended March 31,
|
||||||
Dollars in Millions
|
2018
|
|
2017
|
||||
Net product sales
|
$
|
4,972
|
|
|
$
|
4,580
|
|
Alliance revenues
|
152
|
|
|
225
|
|
||
Other revenues
|
69
|
|
|
124
|
|
||
Total Revenues
|
$
|
5,193
|
|
|
$
|
4,929
|
|
|
Three Months Ended March 31,
|
||||||
Dollars in Millions
|
2018
|
|
2017
|
||||
Gross product sales
|
$
|
6,701
|
|
|
$
|
5,862
|
|
GTN adjustments
(a)
|
|
|
|
||||
Charge-backs and cash discounts
|
(583
|
)
|
|
(438
|
)
|
||
Medicaid and Medicare rebates
|
(557
|
)
|
|
(384
|
)
|
||
Other rebates, returns, discounts and adjustments
|
(589
|
)
|
|
(460
|
)
|
||
Total GTN adjustments
|
(1,729
|
)
|
|
(1,282
|
)
|
||
Net product sales
|
$
|
4,972
|
|
|
$
|
4,580
|
|
(a)
|
Includes reductions to provisions for product sales made in prior periods resulting from changes in estimates of
$50 million
and
$49 million
during the three months ended
March 31, 2018
and
2017
, respectively.
|
|
Three Months Ended March 31,
|
||||||
Dollars in Millions
|
2018
|
|
2017
|
||||
Prioritized Brands
|
|
|
|
||||
Opdivo
|
$
|
1,511
|
|
|
$
|
1,127
|
|
Eliquis
|
1,506
|
|
|
1,101
|
|
||
Orencia
|
593
|
|
|
535
|
|
||
Sprycel
|
438
|
|
|
463
|
|
||
Yervoy
|
249
|
|
|
330
|
|
||
Empliciti
|
55
|
|
|
53
|
|
||
Established Brands
|
|
|
|
||||
Baraclude
|
225
|
|
|
282
|
|
||
Sustiva Franchise
|
84
|
|
|
184
|
|
||
Reyataz Franchise
|
124
|
|
|
193
|
|
||
Hepatitis C Franchise
|
3
|
|
|
162
|
|
||
Other Brands
|
405
|
|
|
499
|
|
||
Total Revenues
|
$
|
5,193
|
|
|
$
|
4,929
|
|
|
|
|
|
||||
United States
|
$
|
2,778
|
|
|
$
|
2,738
|
|
Europe
|
1,406
|
|
|
1,146
|
|
||
Rest of World
|
873
|
|
|
925
|
|
||
Other
|
136
|
|
|
120
|
|
||
Total Revenues
|
$
|
5,193
|
|
|
$
|
4,929
|
|
Dollars in Millions
|
March 31, 2018
|
|
January 1, 2018
|
||||
Prepaid expenses and other
|
$
|
289
|
|
|
$
|
349
|
|
Other assets
|
32
|
|
|
32
|
|
||
Total Contract Assets
|
$
|
321
|
|
|
$
|
381
|
|
|
Three Months Ended March 31,
|
||||||
Dollars in Millions
|
2018
|
|
2017
|
||||
Revenues from alliances:
|
|
|
|
||||
Net product sales
|
$
|
1,920
|
|
|
$
|
1,564
|
|
Alliance revenues
|
152
|
|
|
225
|
|
||
Total Revenues
|
$
|
2,072
|
|
|
$
|
1,789
|
|
|
|
|
|
||||
Payments to/(from) alliance partners:
|
|
|
|
||||
Cost of products sold
|
$
|
799
|
|
|
$
|
621
|
|
Marketing, selling and administrative
|
(22
|
)
|
|
(10
|
)
|
||
Research and development
|
5
|
|
|
—
|
|
||
Other income (net)
|
(14
|
)
|
|
(11
|
)
|
(a)
|
Includes unamortized upfront, milestone and other licensing proceeds. Amortization of deferred income (primarily related to alliances) was
$16 million
and
$20 million
for the
three months ended March 31, 2018
and
2017
, respectively.
|
|
Three Months Ended March 31,
|
||||||||||||||||||||||
|
Proceeds
(a)
|
|
Divestiture Gains
|
|
Royalty Income
|
||||||||||||||||||
Dollars in Millions
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||||||
Manufacturing Operations
|
$
|
158
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Diabetes Business
|
88
|
|
|
156
|
|
|
—
|
|
|
(100
|
)
|
|
(162
|
)
|
|
(94
|
)
|
||||||
Erbitux*
Business
|
59
|
|
|
55
|
|
|
—
|
|
|
—
|
|
|
(47
|
)
|
|
(54
|
)
|
||||||
Other
|
70
|
|
|
30
|
|
|
(45
|
)
|
|
(27
|
)
|
|
(1
|
)
|
|
(1
|
)
|
||||||
|
$
|
375
|
|
|
$
|
241
|
|
|
$
|
(45
|
)
|
|
$
|
(127
|
)
|
|
$
|
(210
|
)
|
|
$
|
(149
|
)
|
(a)
|
Includes royalties received subsequent to the related sale of the asset or business.
|
|
Three Months Ended March 31,
|
||||||
Dollars in Millions
|
2018
|
|
2017
|
||||
Interest expense
|
$
|
46
|
|
|
$
|
45
|
|
Investment income
|
(36
|
)
|
|
(26
|
)
|
||
Equity investment gains
|
(15
|
)
|
|
(7
|
)
|
||
Provision for restructuring
|
20
|
|
|
164
|
|
||
Litigation and other settlements
|
—
|
|
|
(484
|
)
|
||
Equity in net income of affiliates
|
(24
|
)
|
|
(18
|
)
|
||
Divestiture gains
|
(45
|
)
|
|
(127
|
)
|
||
Royalties and licensing income
|
(367
|
)
|
|
(199
|
)
|
||
Transition and other service fees
|
(4
|
)
|
|
(7
|
)
|
||
Pension and postretirement
|
(11
|
)
|
|
1
|
|
||
Intangible asset impairment
|
64
|
|
|
—
|
|
||
Other
|
(28
|
)
|
|
(21
|
)
|
||
Other income (net)
|
$
|
(400
|
)
|
|
$
|
(679
|
)
|
|
Three Months Ended March 31,
|
||||||
Dollars in Millions
|
2018
|
|
2017
|
||||
Employee termination costs
|
$
|
9
|
|
|
$
|
161
|
|
Other termination costs
|
11
|
|
|
3
|
|
||
Provision for restructuring
|
20
|
|
|
164
|
|
||
Accelerated depreciation
|
21
|
|
|
70
|
|
||
Asset impairments
|
10
|
|
|
2
|
|
||
Other shutdown costs
|
3
|
|
|
—
|
|
||
Total charges
|
$
|
54
|
|
|
$
|
236
|
|
|
Three Months Ended March 31,
|
||||||
Dollars in Millions
|
2018
|
|
2017
|
||||
Cost of products sold
|
$
|
13
|
|
|
$
|
—
|
|
Marketing, selling and administrative
|
1
|
|
|
—
|
|
||
Research and development
|
20
|
|
|
72
|
|
||
Other income (net)
|
20
|
|
|
164
|
|
||
Total charges
|
$
|
54
|
|
|
$
|
236
|
|
|
Three Months Ended March 31,
|
||||||
Dollars in Millions
|
2018
|
|
2017
|
||||
Liability at January 1
|
$
|
186
|
|
|
$
|
114
|
|
|
|
|
|
||||
Charges
|
20
|
|
|
170
|
|
||
Change in estimates
|
—
|
|
|
(6
|
)
|
||
Provision for restructuring
|
20
|
|
|
164
|
|
||
Foreign currency translation
|
5
|
|
|
1
|
|
||
Spending
|
(75
|
)
|
|
(44
|
)
|
||
Liability at March 31
|
$
|
136
|
|
|
$
|
235
|
|
|
Three Months Ended March 31,
|
||||||
Dollars in Millions
|
2018
|
|
2017
|
||||
Earnings Before Income Taxes
|
$
|
1,779
|
|
|
$
|
1,955
|
|
Provision for Income Taxes
|
284
|
|
|
429
|
|
||
Effective Tax Rate
|
16.0
|
%
|
|
21.9
|
%
|
|
Three Months Ended March 31,
|
||||||
Amounts in Millions, Except Per Share Data
|
2018
|
|
2017
|
||||
Net Earnings Attributable to BMS used for Basic and Diluted EPS Calculation
|
$
|
1,486
|
|
|
$
|
1,574
|
|
|
|
|
|
||||
Weighted-average common shares outstanding - basic
|
1,633
|
|
|
1,662
|
|
||
Incremental shares attributable to share-based compensation plans
|
7
|
|
|
9
|
|
||
Weighted-average common shares outstanding - diluted
|
1,640
|
|
|
1,671
|
|
||
|
|
|
|
||||
Earnings per share - basic
|
$
|
0.91
|
|
|
$
|
0.95
|
|
Earnings per share - diluted
|
0.91
|
|
|
0.94
|
|
|
March 31, 2018
|
|
December 31, 2017
|
||||||||||||
Dollars in Millions
|
Level 1
|
|
Level 2
|
|
Level 1
|
|
Level 2
|
||||||||
Cash and cash equivalents - money market and other securities
|
$
|
—
|
|
|
$
|
4,674
|
|
|
$
|
—
|
|
|
$
|
4,728
|
|
Marketable securities
|
|
|
|
|
|
|
|
||||||||
Certificates of deposit
|
—
|
|
|
161
|
|
|
—
|
|
|
141
|
|
||||
Commercial paper
|
—
|
|
|
125
|
|
|
—
|
|
|
50
|
|
||||
Corporate debt securities
|
—
|
|
|
3,262
|
|
|
—
|
|
|
3,548
|
|
||||
Equity investments
|
—
|
|
|
132
|
|
|
—
|
|
|
132
|
|
||||
Derivative assets
|
—
|
|
|
10
|
|
|
—
|
|
|
13
|
|
||||
Equity investments
|
82
|
|
|
—
|
|
|
67
|
|
|
—
|
|
||||
Derivative liabilities
|
—
|
|
|
(77
|
)
|
|
—
|
|
|
(52
|
)
|
|
March 31, 2018
|
|
December 31, 2017
|
||||||||||||||||||||||||||||
Dollars in Millions
|
Amortized Cost
|
|
Gross Unrealized
|
|
|
|
Amortized Cost
|
|
Gross Unrealized
|
|
|
||||||||||||||||||||
|
Gains
|
|
Losses
|
|
Fair Value
|
|
|
Gains
|
|
Losses
|
|
Fair Value
|
|||||||||||||||||||
Certificates of deposit
|
$
|
161
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
161
|
|
|
$
|
141
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
141
|
|
Commercial paper
|
125
|
|
|
—
|
|
|
—
|
|
|
125
|
|
|
50
|
|
|
—
|
|
|
—
|
|
|
50
|
|
||||||||
Corporate debt securities
|
3,303
|
|
|
—
|
|
|
(41
|
)
|
|
3,262
|
|
|
3,555
|
|
|
3
|
|
|
(10
|
)
|
|
3,548
|
|
||||||||
Equity investments
(a)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
31
|
|
|
37
|
|
|
(1
|
)
|
|
67
|
|
||||||||
|
$
|
3,589
|
|
|
$
|
—
|
|
|
$
|
(41
|
)
|
|
$
|
3,548
|
|
|
$
|
3,777
|
|
|
$
|
40
|
|
|
$
|
(11
|
)
|
|
$
|
3,806
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Equity investments
(b)
|
|
|
|
|
|
|
214
|
|
|
|
|
|
|
|
|
132
|
|
||||||||||||||
Total
|
|
|
|
|
|
|
$
|
3,762
|
|
|
|
|
|
|
|
|
$
|
3,938
|
|
Dollars in Millions
|
March 31,
2018 |
|
December 31,
2017 |
||||
Current marketable securities
|
$
|
1,428
|
|
|
$
|
1,391
|
|
Non-current marketable securities
(c)
|
2,252
|
|
|
2,480
|
|
||
Other assets
(a)
|
82
|
|
|
67
|
|
||
Total
|
$
|
3,762
|
|
|
$
|
3,938
|
|
(a)
|
Includes equity investments with readily determinable fair values not measured using the fair value option as of
December 31, 2017
.
|
(b)
|
Includes equity and fixed income funds measured using the fair value option at
December 31, 2017
. Refer to "
—
Note.
1
Basis of Presentation and Recently Issued Accounting Standards
" for more information.
|
(c)
|
All non-current marketable securities mature within five years as of
March 31, 2018
and
December 31, 2017
.
|
Dollars in Millions
|
Three Months Ended March 31, 2018
|
||
Net gain recognized
|
$
|
15
|
|
Less: Net gain recognized for equity securities sold
|
—
|
|
|
Net unrealized gain on securities held
|
$
|
15
|
|
|
March 31, 2018
|
|
December 31, 2017
|
||||||||||||||||||||||||||||
|
Asset
(a)
|
|
Liability
(b)
|
|
Asset
(a)
|
|
Liability
(b)
|
||||||||||||||||||||||||
Dollars in Millions
|
Notional
|
|
Fair Value
|
|
Notional
|
|
Fair Value
|
|
Notional
|
|
Fair Value
|
|
Notional
|
|
Fair Value
|
||||||||||||||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Interest rate swap contracts
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
755
|
|
|
$
|
(15
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
755
|
|
|
$
|
(6
|
)
|
Cross-currency interest rate swap contracts
|
—
|
|
|
—
|
|
|
300
|
|
|
(16
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Foreign currency forward contracts
|
317
|
|
|
4
|
|
|
1,158
|
|
|
(26
|
)
|
|
944
|
|
|
12
|
|
|
489
|
|
|
(9
|
)
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Foreign currency forward contracts
|
365
|
|
|
6
|
|
|
674
|
|
|
(20
|
)
|
|
206
|
|
|
1
|
|
|
1,369
|
|
|
(37
|
)
|
(a)
|
Included in prepaid expenses and other and other assets.
|
(b)
|
Included in accrued liabilities and pension and other liabilities.
|
|
Three Months Ended March 31, 2018
|
||||||
Dollars in Millions
|
Cost of products sold
|
|
Other income (net)
|
||||
Interest rate swap contracts
|
$
|
—
|
|
|
$
|
7
|
|
Cross-currency interest rate swap contracts
|
—
|
|
|
2
|
|
||
Foreign currency forward contracts
|
(20
|
)
|
|
(9
|
)
|
Dollars in Millions
|
Three Months Ended March 31, 2018
|
||
Derivatives qualifying as cash flow hedges
|
|
||
Foreign currency forward contracts gain/(loss):
|
|
||
Recognized in other comprehensive loss
(a)
|
$
|
(38
|
)
|
Reclassified to cost of products sold
|
20
|
|
|
|
|
||
Derivatives qualifying as net investment hedges
|
|
||
Cross-currency interest rate swap contracts gain/(loss):
|
|
||
Recognized in other comprehensive loss
|
(16
|
)
|
|
|
|
||
Non-derivatives qualifying as net investment hedges
|
|
||
Non U.S. dollar borrowings gain/(loss):
|
|
||
Recognized in other comprehensive loss
|
(46
|
)
|
(a)
|
The amount is expected to be reclassified into earnings in the next 12 months.
|
Dollars in Millions
|
March 31,
2018 |
|
December 31,
2017 |
||||
Commercial paper
|
$
|
—
|
|
|
$
|
299
|
|
Non-U.S. short-term borrowings
|
458
|
|
|
512
|
|
||
Current portion of long-term debt
|
1,245
|
|
|
—
|
|
||
Other
|
222
|
|
|
176
|
|
||
Total
|
$
|
1,925
|
|
|
$
|
987
|
|
Dollars in Millions
|
March 31,
2018 |
|
December 31,
2017 |
||||
Principal Value
|
$
|
6,892
|
|
|
$
|
6,835
|
|
Adjustments to Principal Value
|
|
|
|
||||
Fair value of interest rate swap contracts
|
(15
|
)
|
|
(6
|
)
|
||
Unamortized basis adjustment from swap terminations
|
221
|
|
|
227
|
|
||
Unamortized bond discounts and issuance costs
|
(78
|
)
|
|
(81
|
)
|
||
Total
|
$
|
7,020
|
|
|
$
|
6,975
|
|
|
|
|
|
||||
Current portion of long-term debt
|
$
|
1,245
|
|
|
$
|
—
|
|
Long-term debt
|
5,775
|
|
|
6,975
|
|
Dollars in Millions
|
March 31,
2018 |
|
December 31,
2017 |
||||
Trade receivables
|
$
|
4,617
|
|
|
$
|
4,599
|
|
Less charge-backs and cash discounts
|
(208
|
)
|
|
(209
|
)
|
||
Less bad debt allowances
|
(35
|
)
|
|
(43
|
)
|
||
Net trade receivables
|
4,374
|
|
|
4,347
|
|
||
Prepaid and refundable income taxes
|
325
|
|
|
691
|
|
||
Alliance, royalties, VAT and other
|
984
|
|
|
1,262
|
|
||
Receivables
|
$
|
5,683
|
|
|
$
|
6,300
|
|
Dollars in Millions
|
March 31,
2018 |
|
December 31,
2017 |
||||
Finished goods
|
$
|
417
|
|
|
$
|
384
|
|
Work in process
|
932
|
|
|
931
|
|
||
Raw and packaging materials
|
306
|
|
|
273
|
|
||
Total inventories
|
$
|
1,655
|
|
|
$
|
1,588
|
|
|
|
|
|
||||
Inventories
|
$
|
1,231
|
|
|
$
|
1,166
|
|
Other assets
|
424
|
|
|
422
|
|
Dollars in Millions
|
March 31,
2018 |
|
December 31,
2017 |
||||
Land
|
$
|
100
|
|
|
$
|
100
|
|
Buildings
|
4,955
|
|
|
4,848
|
|
||
Machinery, equipment and fixtures
|
3,099
|
|
|
3,059
|
|
||
Construction in progress
|
1,005
|
|
|
980
|
|
||
Gross property, plant and equipment
|
9,159
|
|
|
8,987
|
|
||
Less accumulated depreciation
|
(4,099
|
)
|
|
(3,986
|
)
|
||
Property, plant and equipment
|
$
|
5,060
|
|
|
$
|
5,001
|
|
Dollars in Millions
|
March 31,
2018 |
|
December 31,
2017 |
||||
Licenses
|
$
|
519
|
|
|
$
|
567
|
|
Developed technology rights
|
2,357
|
|
|
2,357
|
|
||
Capitalized software
|
1,383
|
|
|
1,381
|
|
||
IPRD
|
32
|
|
|
32
|
|
||
Gross other intangible assets
|
4,291
|
|
|
4,337
|
|
||
Less accumulated amortization
|
(3,175
|
)
|
|
(3,127
|
)
|
||
Other intangible assets
|
$
|
1,116
|
|
|
$
|
1,210
|
|
Dollars in Millions
|
|
March 31,
2018 |
|
December 31,
2017 |
||||
Rebates and returns
|
|
$
|
2,210
|
|
|
$
|
2,024
|
|
Employee compensation and benefits
|
|
397
|
|
|
869
|
|
||
Research and development
|
|
728
|
|
|
783
|
|
||
Dividends
|
|
654
|
|
|
654
|
|
||
Royalties
|
|
252
|
|
|
285
|
|
||
Branded Prescription Drug Fee
|
|
319
|
|
|
303
|
|
||
Restructuring
|
|
113
|
|
|
155
|
|
||
Pension and postretirement benefits
|
|
40
|
|
|
40
|
|
||
Litigation and other settlements
|
|
35
|
|
|
38
|
|
||
Other
|
|
813
|
|
|
863
|
|
||
Accrued liabilities
|
|
$
|
5,561
|
|
|
$
|
6,014
|
|
|
Common Stock
|
|
Capital in Excess
of Par Value
of Stock
|
|
Accumulated Other Comprehensive Loss
|
|
Retained
Earnings
|
|
Treasury Stock
|
|
Noncontrolling
Interest
|
||||||||||||||||||
Dollars and Shares in Millions
|
Shares
|
|
Par Value
|
|
Shares
|
|
Cost
|
|
|||||||||||||||||||||
Balance at December 31, 2016
|
2,208
|
|
|
$
|
221
|
|
|
$
|
1,725
|
|
|
$
|
(2,503
|
)
|
|
$
|
33,513
|
|
|
536
|
|
|
$
|
(16,779
|
)
|
|
$
|
170
|
|
Accounting change - cumulative effect
|
|
|
|
|
|
|
|
|
(787
|
)
|
|
|
|
|
|
|
|||||||||||||
Adjusted balance at January 1, 2017
|
2,208
|
|
|
$
|
221
|
|
|
$
|
1,725
|
|
|
$
|
(2,503
|
)
|
|
$
|
32,726
|
|
|
536
|
|
|
$
|
(16,779
|
)
|
|
$
|
170
|
|
Net earnings
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,574
|
|
|
—
|
|
|
—
|
|
|
11
|
|
||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
89
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Cash dividends declared
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(642
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Stock repurchase program
|
—
|
|
|
—
|
|
|
(400
|
)
|
|
—
|
|
|
—
|
|
|
29
|
|
|
(1,600
|
)
|
|
—
|
|
||||||
Stock compensation
|
—
|
|
|
—
|
|
|
12
|
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
(7
|
)
|
|
—
|
|
||||||
Variable interest entity
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(59
|
)
|
||||||
Distributions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
||||||
Balance at March 31, 2017
|
2,208
|
|
|
$
|
221
|
|
|
$
|
1,337
|
|
|
$
|
(2,414
|
)
|
|
$
|
33,658
|
|
|
561
|
|
|
$
|
(18,386
|
)
|
|
$
|
119
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Balance at December 31, 2017
|
2,208
|
|
|
$
|
221
|
|
|
$
|
1,898
|
|
|
$
|
(2,289
|
)
|
|
$
|
31,160
|
|
|
575
|
|
|
$
|
(19,249
|
)
|
|
$
|
106
|
|
Accounting change - cumulative effect
(a)
|
—
|
|
|
—
|
|
|
—
|
|
|
(34
|
)
|
|
332
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Adjusted balance at January 1, 2018
|
2,208
|
|
|
$
|
221
|
|
|
$
|
1,898
|
|
|
$
|
(2,323
|
)
|
|
$
|
31,492
|
|
|
575
|
|
|
$
|
(19,249
|
)
|
|
$
|
106
|
|
Net earnings
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,486
|
|
|
—
|
|
|
—
|
|
|
9
|
|
||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
89
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Cash dividends declared
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(655
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Stock repurchase program
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
(166
|
)
|
|
—
|
|
||||||
Stock compensation
|
—
|
|
|
—
|
|
|
18
|
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
(18
|
)
|
|
—
|
|
||||||
Distributions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
||||||
Balance at March 31, 2018
|
2,208
|
|
|
$
|
221
|
|
|
$
|
1,916
|
|
|
$
|
(2,234
|
)
|
|
$
|
32,323
|
|
|
574
|
|
|
$
|
(19,433
|
)
|
|
$
|
113
|
|
(a)
|
Refer to "—Note
1
. Basis of Presentation and Recently Issued Accounting Standards" for additional information.
|
|
2018
|
|
2017
|
||||||||||||||||||||
|
Pretax
|
|
Tax
|
|
After tax
|
|
Pretax
|
|
Tax
|
|
After tax
|
||||||||||||
Three Months Ended March 31,
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivatives qualifying as cash flow hedges:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Unrealized gains/(losses)
|
$
|
(38
|
)
|
|
$
|
6
|
|
|
$
|
(32
|
)
|
|
$
|
(18
|
)
|
|
$
|
7
|
|
|
$
|
(11
|
)
|
Reclassified to net earnings
(a)
|
20
|
|
|
(7
|
)
|
|
13
|
|
|
(22
|
)
|
|
4
|
|
|
(18
|
)
|
||||||
Derivatives qualifying as cash flow hedges
|
(18
|
)
|
|
(1
|
)
|
|
(19
|
)
|
|
(40
|
)
|
|
11
|
|
|
(29
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Pension and postretirement benefits:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Actuarial gains/(losses)
|
112
|
|
|
(24
|
)
|
|
88
|
|
|
58
|
|
|
(18
|
)
|
|
40
|
|
||||||
Amortization
(b)
|
20
|
|
|
(3
|
)
|
|
17
|
|
|
19
|
|
|
3
|
|
|
22
|
|
||||||
Settlements
(b)
|
31
|
|
|
(7
|
)
|
|
24
|
|
|
33
|
|
|
(12
|
)
|
|
21
|
|
||||||
Pension and postretirement benefits
|
163
|
|
|
(34
|
)
|
|
129
|
|
|
110
|
|
|
(27
|
)
|
|
83
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Available-for-sale securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Unrealized gains/(losses)
|
(32
|
)
|
|
6
|
|
|
(26
|
)
|
|
9
|
|
|
(3
|
)
|
|
6
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign currency translation
|
(7
|
)
|
|
12
|
|
|
5
|
|
|
21
|
|
|
8
|
|
|
29
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total Other Comprehensive Income/(Loss)
|
$
|
106
|
|
|
$
|
(17
|
)
|
|
$
|
89
|
|
|
$
|
100
|
|
|
$
|
(11
|
)
|
|
$
|
89
|
|
(a)
|
Included in cost of products sold
|
(b)
|
Included in other income (net)
|
Dollars in Millions
|
March 31,
2018 |
|
December 31, 2017
|
||||
Derivatives qualifying as cash flow hedges
|
$
|
(38
|
)
|
|
$
|
(19
|
)
|
Pension and other postretirement benefits
|
(1,754
|
)
|
|
(1,883
|
)
|
||
Available-for-sale securities
|
(28
|
)
|
|
32
|
|
||
Foreign currency translation
|
(414
|
)
|
|
(419
|
)
|
||
Accumulated other comprehensive loss
|
$
|
(2,234
|
)
|
|
$
|
(2,289
|
)
|
|
Three Months Ended March 31,
|
||||||
Dollars in Millions
|
2018
|
|
2017
|
||||
Service cost – benefits earned during the year
|
$
|
7
|
|
|
$
|
6
|
|
Interest cost on projected benefit obligation
|
46
|
|
|
48
|
|
||
Expected return on plan assets
|
(109
|
)
|
|
(103
|
)
|
||
Amortization of prior service credits
|
(1
|
)
|
|
(1
|
)
|
||
Amortization of net actuarial loss
|
21
|
|
|
21
|
|
||
Curtailments and settlements
|
31
|
|
|
33
|
|
||
Net periodic pension benefit cost/(credit)
|
$
|
(5
|
)
|
|
$
|
4
|
|
|
Three Months Ended March 31,
|
||||||
Dollars in Millions, except per share data
|
2018
|
|
2017
|
||||
Total Revenues
|
$
|
5,193
|
|
|
$
|
4,929
|
|
|
|
|
|
||||
Diluted Earnings Per Share
|
|
|
|
||||
GAAP
|
$
|
0.91
|
|
|
$
|
0.94
|
|
Non-GAAP
|
0.94
|
|
|
0.84
|
|
Product
|
Date
|
Approval
|
|
|
|
Opdivo+Yervoy
|
April 2018
|
FDA approval of
Opdivo
+
Yervoy
combination for previously untreated patients with intermediate and poor-risk advanced RCC.
|
|
|
|
Orencia
|
February 2018
|
Approval in Japan for an intravenously administered treatment of moderate to severe polyarticular JIA in patients two years of age and older.
|
|
|
|
Yervoy
|
January 2018
|
EC approval of advanced (unresectable or metastatic) melanoma in pediatric patients 12 years of age and older.
|
|
Three Months Ended March 31,
|
||||||||||||
|
Total Revenues
|
|
2018 vs. 2017
|
||||||||||
Dollars in Millions
|
2018
|
|
2017
|
|
Total Change
|
|
Foreign Exchange
(b)
|
||||||
United States
|
$
|
2,778
|
|
|
$
|
2,738
|
|
|
1
|
%
|
|
—
|
|
Europe
|
1,406
|
|
|
1,146
|
|
|
23
|
%
|
|
15
|
%
|
||
Rest of the World
|
873
|
|
|
925
|
|
|
(6
|
)%
|
|
3
|
%
|
||
Other
(a)
|
136
|
|
|
120
|
|
|
13
|
%
|
|
N/A
|
|
||
Total
|
$
|
5,193
|
|
|
$
|
4,929
|
|
|
5
|
%
|
|
4
|
%
|
(a)
|
Other revenues include royalties and alliance-related revenues for products not sold by our regional commercial organizations.
|
(b)
|
Foreign exchange impacts were derived by applying the prior period average currency rates to the current period sales.
|
|
Three Months Ended March 31,
|
|||||||||
Dollars in Millions
|
2018
|
|
2017
|
|
% Change
|
|||||
Gross product sales
|
$
|
6,701
|
|
|
$
|
5,862
|
|
|
14
|
%
|
GTN adjustments
|
|
|
|
|
|
|||||
Charge-backs and cash discounts
|
(583
|
)
|
|
(438
|
)
|
|
33
|
%
|
||
Medicaid and Medicare rebates
|
(557
|
)
|
|
(384
|
)
|
|
45
|
%
|
||
Other rebates, returns, discounts and adjustments
|
(589
|
)
|
|
(460
|
)
|
|
28
|
%
|
||
Total GTN adjustments
|
(1,729
|
)
|
|
(1,282
|
)
|
|
35
|
%
|
||
Net product sales
|
$
|
4,972
|
|
|
$
|
4,580
|
|
|
9
|
%
|
|
|
|
|
|
|
|||||
GTN adjustments percentage
|
26
|
%
|
|
22
|
%
|
|
4
|
%
|
||
U.S.
|
34
|
%
|
|
28
|
%
|
|
6
|
%
|
||
Non-U.S.
|
13
|
%
|
|
12
|
%
|
|
1
|
%
|
|
Three Months Ended March 31,
|
|||||||||
Dollars in Millions
|
2018
|
|
2017
|
|
% Change
|
|||||
Prioritized Brands
|
|
|
|
|
|
|||||
Opdivo
|
$
|
1,511
|
|
|
$
|
1,127
|
|
|
34
|
%
|
U.S.
|
938
|
|
|
761
|
|
|
23
|
%
|
||
Non-U.S.
|
573
|
|
|
366
|
|
|
57
|
%
|
||
|
|
|
|
|
|
|||||
Eliquis
|
1,506
|
|
|
1,101
|
|
|
37
|
%
|
||
U.S.
|
885
|
|
|
699
|
|
|
27
|
%
|
||
Non-U.S.
|
621
|
|
|
402
|
|
|
54
|
%
|
||
|
|
|
|
|
|
|||||
Orencia
|
593
|
|
|
535
|
|
|
11
|
%
|
||
U.S.
|
385
|
|
|
362
|
|
|
6
|
%
|
||
Non-U.S.
|
208
|
|
|
173
|
|
|
20
|
%
|
||
|
|
|
|
|
|
|||||
Sprycel
|
438
|
|
|
463
|
|
|
(5
|
)%
|
||
U.S.
|
214
|
|
|
247
|
|
|
(13
|
)%
|
||
Non-U.S.
|
224
|
|
|
216
|
|
|
4
|
%
|
||
|
|
|
|
|
|
|||||
Yervoy
|
249
|
|
|
330
|
|
|
(25
|
)%
|
||
U.S.
|
162
|
|
|
243
|
|
|
(33
|
)%
|
||
Non-U.S.
|
87
|
|
|
87
|
|
|
—
|
|
||
|
|
|
|
|
|
|||||
Empliciti
|
55
|
|
|
53
|
|
|
4
|
%
|
||
U.S.
|
37
|
|
|
36
|
|
|
3
|
%
|
||
Non-U.S.
|
18
|
|
|
17
|
|
|
6
|
%
|
||
|
|
|
|
|
|
|||||
Established Brands
|
|
|
|
|
|
|||||
Baraclude
|
225
|
|
|
282
|
|
|
(20
|
)%
|
||
U.S.
|
10
|
|
|
14
|
|
|
(29
|
)%
|
||
Non-U.S.
|
215
|
|
|
268
|
|
|
(20
|
)%
|
||
|
|
|
|
|
|
|||||
Sustiva Franchise
|
84
|
|
|
184
|
|
|
(54
|
)%
|
||
U.S.
|
10
|
|
|
153
|
|
|
(93
|
)%
|
||
Non-U.S.
|
74
|
|
|
31
|
|
|
**
|
|
||
|
|
|
|
|
|
|||||
Reyataz Franchise
|
124
|
|
|
193
|
|
|
(36
|
)%
|
||
U.S.
|
51
|
|
|
88
|
|
|
(42
|
)%
|
||
Non-U.S.
|
73
|
|
|
105
|
|
|
(30
|
)%
|
||
|
|
|
|
|
|
|||||
Hepatitis C Franchise
|
3
|
|
|
162
|
|
|
(98
|
)%
|
||
U.S.
|
5
|
|
|
42
|
|
|
(88
|
)%
|
||
Non-U.S.
|
(2
|
)
|
|
120
|
|
|
**
|
|
||
|
|
|
|
|
|
|||||
Other Brands
|
405
|
|
|
499
|
|
|
(19
|
)%
|
||
U.S.
|
81
|
|
|
93
|
|
|
(13
|
)%
|
||
Non-U.S.
|
324
|
|
|
406
|
|
|
(20
|
)%
|
||
|
|
|
|
|
|
|||||
Total Revenues
|
5,193
|
|
|
4,929
|
|
|
5
|
%
|
||
U.S.
|
2,778
|
|
|
2,738
|
|
|
1
|
%
|
||
Non-U.S.
|
2,415
|
|
|
2,191
|
|
|
10
|
%
|
•
|
U.S. revenues increased due to higher demand, primarily due to approvals for additional indications. In the future, we expect competition to continue for the lung indication.
|
•
|
International revenues increased due to higher demand as a result of approvals for additional indications, launches in new countries and favorable foreign exchange.
|
•
|
U.S. and international revenues increased due to higher demand resulting from increased commercial acceptance of novel oral anticoagulants and market share gains.
|
•
|
The increase in U.S. revenues was partially offset by lower average net selling prices.
|
•
|
International revenues also increased due to favorable foreign exchange.
|
•
|
U.S. revenues increased due to higher average net selling prices and demand.
|
•
|
International revenues increased due to higher demand and favorable foreign exchange.
|
•
|
U.S. revenues decreased due to retail inventory workdown and lower average net selling prices.
|
•
|
International revenues increased due to foreign exchange.
|
•
|
U.S. revenues decreased due to lower demand primarily due to the introduction of
Opdivo
for the treatment of adjuvant melanoma.
|
•
|
International revenues continued to decrease due to lower demand resulting from increased competition.
|
•
|
The LOE for
Sustiva
in the U.S. occurred in December 2017. Gilead terminated BMS's participation in the U.S. and Canada joint venture following the launch of a generic version of
Sustiva
in the U.S. As a result, BMS's share of
Atripla
* revenues will further decline during the next three years.
|
•
|
International revenues include $52 million of U.S.
Atripla
* royalty revenue.
|
•
|
The LOE for
Reyataz
in the U.S. occurred in December 2017.
|
•
|
International revenues continued to decrease due to lower demand.
|
•
|
U.S. and international revenues decreased due to lower demand resulting from increased competition.
|
•
|
International revenues decreased primarily due to lower
Plavix*
royalties as a result of the adoption of amended revenue guidance in 2018, the December 2017 expiration of rights to
Abilify*
in Canada and continued generic erosion for other brands.
|
|
Three Months Ended March 31,
|
|||||||||
Dollars in Millions
|
2018
|
|
2017
|
|
% Change
|
|||||
Cost of products sold
|
$
|
1,584
|
|
|
$
|
1,265
|
|
|
25
|
%
|
Marketing, selling and administrative
|
980
|
|
|
1,085
|
|
|
(10
|
)%
|
||
Research and development
|
1,250
|
|
|
1,303
|
|
|
(4
|
)%
|
||
Other income (net)
|
(400
|
)
|
|
(679
|
)
|
|
(41
|
)%
|
||
Total Expenses
|
$
|
3,414
|
|
|
$
|
2,974
|
|
|
15
|
%
|
|
Three Months Ended March 31,
|
||||||||
Dollars in Millions
|
2018
|
|
|
2017
|
|
||||
Cormorant
|
$
|
60
|
|
(b)
|
|
$
|
—
|
|
|
PsiOxus
|
—
|
|
|
|
50
|
|
(a)
|
||
License and asset acquisition charges
|
60
|
|
|
|
50
|
|
|
||
|
|
|
|
|
|
||||
IPRD impairments
|
—
|
|
|
|
75
|
|
|
||
|
|
|
|
|
|
||||
Site exit costs and other
|
20
|
|
|
|
72
|
|
|
•
|
License and asset acquisition charges resulted from strategic transactions to acquire or license certain investigational oncology compounds.
|
•
|
IPRD impairment charges were related to the discontinued development of an investigational compound, which was part of our alliance with F-Star Alpha in 2017.
|
•
|
Site exit costs and other charges resulted from the expected exit of R&D sites in the U.S. through 2020 primarily due to the reduction in the estimated useful lives of the related assets for each site.
|
|
Three Months Ended March 31,
|
||||||
Dollars in Millions
|
2018
|
|
2017
|
||||
Interest expense
|
$
|
46
|
|
|
$
|
45
|
|
Investment income
|
(36
|
)
|
|
(26
|
)
|
||
Equity investment gains
|
(15
|
)
|
|
(7
|
)
|
||
Provision for restructuring
|
20
|
|
|
164
|
|
||
Litigation and other settlements
|
—
|
|
|
(484
|
)
|
||
Equity in net income of affiliates
|
(24
|
)
|
|
(18
|
)
|
||
Divestiture gains
|
(45
|
)
|
|
(127
|
)
|
||
Royalties and licensing income
|
(367
|
)
|
|
(199
|
)
|
||
Transition and other service fees
|
(4
|
)
|
|
(7
|
)
|
||
Pension and postretirement
|
(11
|
)
|
|
1
|
|
||
Intangible asset impairment
|
64
|
|
|
—
|
|
||
Other
|
(28
|
)
|
|
(21
|
)
|
||
Other income (net)
|
$
|
(400
|
)
|
|
$
|
(679
|
)
|
•
|
Equity investment gains include all fair value adjustments due to the adoption of amended guidance for the recognition and measurement of financial assets and liabilities in 2018.
|
•
|
Restructuring charges relate to changes to the Company's operating model to drive continued success in the near- and long-term through a more focused investment in commercial opportunities for key brands and markets, a competitive and more agile R&D organization that can accelerate the pipeline, streamline operations and realign manufacturing capabilities that broaden biologics capabilities to reflect the current and future portfolio as well as streamline and simplify our small-molecule supply network. The new operating model is expected to enable the Company to deliver the strategic, financial and operational flexibility necessary to invest in the highest priorities across the Company. Aggregate restructuring charges of approximately
$150 million
are expected to be incurred in 2018 for all actions in addition to accelerated depreciation impacts resulting from early site exits.
|
•
|
Litigation and other settlements include
$481 million
for BMS's share of a patent-infringement settlement related to Merck's PD-1 antibody
Keytruda*
in 2017.
|
•
|
Divestiture gains includes contingent consideration of
$100 million
received for the diabetes business divestiture in 2017.
|
•
|
Royalties and licensing income includes additional consideration of
$50 million
to amend the royalty terms for an out-licensing arrangement and higher Diabetes business divestiture and
Keytruda*
royalties in 2018.
|
•
|
Pension and postretirement includes the net periodic cost (credit) for pension and post-retirement benefit plans including settlement and curtailment charges.
|
•
|
Intangible asset impairments include
$64 million
in 2018 for an out-licensed asset obtained in the 2010 acquisition of ZymoGenetics, Inc., which did not meet its primary endpoint in a phase II clinical study.
|
|
Three Months Ended March 31,
|
||||||
Dollars in Millions
|
2018
|
|
2017
|
||||
Earnings Before Income Taxes
|
$
|
1,779
|
|
|
$
|
1,955
|
|
Provision for Income Taxes
|
284
|
|
|
429
|
|
||
Effective Tax Rate
|
16.0
|
%
|
|
21.9
|
%
|
|
Three Months Ended March 31,
|
||||||
Dollars in Millions
|
2018
|
|
2017
|
||||
Impairment charges
|
$
|
10
|
|
|
$
|
—
|
|
Accelerated depreciation and other shutdown costs
|
3
|
|
|
—
|
|
||
Cost of products sold
|
13
|
|
|
—
|
|
||
|
|
|
|
||||
Marketing, selling and administrative
|
1
|
|
|
—
|
|
||
|
|
|
|
||||
License and asset acquisition charges
|
60
|
|
|
50
|
|
||
IPRD impairments
|
—
|
|
|
75
|
|
||
Site exit costs and other
|
20
|
|
|
72
|
|
||
Research and development
|
80
|
|
|
197
|
|
||
|
|
|
|
||||
Equity investment gains
|
(15
|
)
|
|
—
|
|
||
Provision for restructuring
|
20
|
|
|
164
|
|
||
Litigation and other settlements
|
—
|
|
|
(481
|
)
|
||
Divestiture gains
|
(43
|
)
|
|
(100
|
)
|
||
Royalties and licensing income
|
(50
|
)
|
|
—
|
|
||
Pension charges
|
31
|
|
|
33
|
|
||
Intangible asset impairment
|
64
|
|
|
—
|
|
||
Other income (net)
|
7
|
|
|
(384
|
)
|
||
|
|
|
|
||||
Increase/(decrease) to pretax income
|
101
|
|
|
(187
|
)
|
||
|
|
|
|
||||
Income taxes on items above
|
(8
|
)
|
|
72
|
|
||
U.S. tax reform provisional amount adjustment
|
(32
|
)
|
|
—
|
|
||
Income taxes
|
(40
|
)
|
|
72
|
|
||
|
|
|
|
||||
Increase/(decrease) to net earnings
|
61
|
|
|
(115
|
)
|
||
Noncontrolling interest
|
—
|
|
|
(59
|
)
|
||
Increase/(decrease) to net earnings used for Diluted Non-GAAP EPS calculation
|
$
|
61
|
|
|
$
|
(174
|
)
|
|
Three Months Ended March 31,
|
||||||
Dollars in Millions, except per share data
|
2018
|
|
2017
|
||||
Net Earnings Attributable to BMS used for Diluted EPS Calculation – GAAP
|
$
|
1,486
|
|
|
$
|
1,574
|
|
Specified Items
|
61
|
|
|
(174
|
)
|
||
Net Earnings Attributable to BMS used for Diluted EPS Calculation – Non-GAAP
|
$
|
1,547
|
|
|
$
|
1,400
|
|
|
|
|
|
||||
Average Common Shares Outstanding – Diluted
|
1,640
|
|
|
1,671
|
|
||
|
|
|
|
||||
Diluted EPS Attributable to BMS – GAAP
|
$
|
0.91
|
|
|
$
|
0.94
|
|
Diluted EPS Attributable to Specified Items
|
0.03
|
|
|
(0.10
|
)
|
||
Diluted EPS Attributable to BMS – Non-GAAP
|
$
|
0.94
|
|
|
$
|
0.84
|
|
Dollars in Millions
|
March 31,
2018 |
|
December 31,
2017 |
||||
Cash and cash equivalents
|
$
|
5,342
|
|
|
$
|
5,421
|
|
Marketable securities
–
current
|
1,428
|
|
|
1,391
|
|
||
Marketable securities
–
non-current
|
2,252
|
|
|
2,480
|
|
||
Total cash, cash equivalents and marketable securities
|
9,022
|
|
|
9,292
|
|
||
Short-term debt obligations
|
(1,925
|
)
|
|
(987
|
)
|
||
Long-term debt
|
(5,775
|
)
|
|
(6,975
|
)
|
||
Net cash position
|
$
|
1,322
|
|
|
$
|
1,330
|
|
|
Three Months Ended March 31,
|
||||||
Dollars in Millions
|
2018
|
|
2017
|
||||
Cash flow provided by/(used in):
|
|
|
|
||||
Operating activities
|
$
|
1,175
|
|
|
$
|
861
|
|
Investing activities
|
(43
|
)
|
|
(203
|
)
|
||
Financing activities
|
(1,222
|
)
|
|
(1,013
|
)
|
•
|
Timing of cash collections and payments in the ordinary course of business of approximately
$800 million
;
|
•
|
Lower litigation settlement proceeds of approximately
$500 million
related to Merck's PD-1 antibody
Keytruda*
in 2017
.
|
•
|
Higher net sales of marketable securities with maturities greater than 90 days of approximately
$200 million
; and
|
•
|
Higher business divestiture proceeds of approximately
$100 million
primarily due to the sale of the small molecule active pharmaceutical ingredient manufacturing operations in Swords, Ireland to SK Biotek in 2018.
|
•
|
Higher net acquisition and other payments of approximately
$200 million
primarily due to a Flexus contingent consideration payment.
|
•
|
Lower net borrowings of
$2.0 billion
primarily to fund the repurchase of common stock in 2017.
|
•
|
Lower repurchases of common stock of
$1.8 billion
primarily due to the accelerated share repurchase agreements in 2017.
|
Product
|
Indication
|
Date
|
Developments
|
Opdivo
|
NSCLC
|
April 2018
|
Announced that the pivotal, randomized Phase III CheckMate-078 trial evaluating
Opdivo
versus docetaxel in a predominantly Chinese population with previously treated advanced NSCLC demonstrated superior overall survival benefit in the primary endpoint regardless of PD-L1 expression or tumor histology.
|
SCCHN
|
April 2018
|
Announced two-year OS data from CheckMate-141, a Phase III study, evaluating
Opdivo
compared with investigator’s choice chemotherapy (cetuximab, docetaxel or methotrexate) in patients with recurrent or metastatic SCCHN after failure on platinum-based therapy.
|
|
SCLC
|
April 2018
|
Announced FDA accepted the Company's sBLA for priority review to treat patients with SCLC whose disease has progressed after two or more prior lines of therapy. The FDA action date is August 16, 2018.
|
|
Various
|
April 2018
|
EC approval of an every four-week (Q4W)
Opdivo
dosing schedule of 480 mg infused over 60 minutes as an option for patients with advanced melanoma and previously treated RCC as well as the approval of a two-week
Opdivo
dosing option of 240 mg infused over 30 minutes to replace weight-based dosing for all six approved monotherapy indications in the EU.
|
|
March 2018
|
FDA approval the Company's sBLA to update
Opdivo
dosing to include 480 mg infused every four weeks for a majority of approved indications as well as a shorter 30 minute infusion across all approved indications.
|
||
|
|
|
|
Opdivo+Yervoy
|
CRC
|
March 2018
|
Announced FDA accepted the Company's sBLA for priority review for the treatment of adults with MSI-H or dMMR mCRC that has progressed following treatment with a fluoropyrimidine, oxaliplatin, and irinotecan. The FDA action date is July 10, 2018.
|
NSCLC
|
April 2018
|
Announced initial results from the pivotal Phase III CheckMate-227 study in which the
Opdivo+
low-dose
Yervoy
combination reduced the risk of progression or death by 42% versus chemotherapy in previously untreated NSCLC patients with high TMB.
|
|
RCC
|
April 2018
|
FDA approval of
Opdivo
+
Yervoy
combination for previously untreated patients with intermediate and poor-risk advanced RCC.
|
|
|
|
|
|
Eliquis
|
NVAF
|
March 2018
|
Announced findings from the largest real-world data analysis of NVAF patients receiving direct oral anticoagulants showing that
Eliquis
is associated with lower rates of stroke or systemic embolism and major bleeding than rivaroxaban or dabigatran.
|
|
|
|
|
Orencia
|
JIA
|
February 2018
|
Approval in Japan for an intravenously administered treatment of moderate to severe polyarticular JIA in patients two years of age and older.
|
|
|
|
|
Yervoy
|
Melanoma
|
January 2018
|
EC approval of advanced (unresectable or metastatic) melanoma in pediatric patients 12 years of age and older.
|
Period
|
Total Number of
Shares Purchased
(a)
|
|
Average
Price Paid
per Share
(a)
|
|
Total Number of
Shares Purchased as
Part of Publicly
Announced
Programs
(b)
|
|
Approximate Dollar
Value of Shares that
May Yet Be
Purchased Under the
Programs
(b)
|
||||||
Dollars in Millions, Except Per Share Data
|
|
|
|
|
|
|
|
||||||
January 1 to 31, 2018
|
1,115,487
|
|
|
$
|
62.30
|
|
|
1,093,965
|
|
|
$
|
1,593
|
|
February 1 to 28, 2018
|
550,193
|
|
|
64.74
|
|
|
521,341
|
|
|
1,559
|
|
||
March 1 to 31, 2018
|
2,259,175
|
|
|
66.89
|
|
|
972,505
|
|
|
1,495
|
|
||
Three months ended March 31, 2018
|
3,924,855
|
|
|
|
|
2,587,811
|
|
|
|
(a)
|
Includes shares repurchased as part of publicly announced programs and shares of common stock surrendered to the Company to satisfy tax-withholding obligations in connection with the vesting of awards under our long-term incentive program.
|
(b)
|
In May 2010, the Board of Directors authorized the repurchase of up to $3.0 billion of common stock and in June 2012 increased its authorization for the repurchase of common stock by an additional $3.0 billion. In October 2016, the Board of Directors approved a new share repurchase program authorizing the repurchase of an additional $3.0 billion of common stock. The stock repurchase program does not have an expiration date. Refer to “Item 1. Financial Statements—Note
16
. Equity" for information on the accelerated share repurchase agreements.
|
Exhibit No.
|
|
Description
|
|
||
|
||
|
||
|
||
|
||
101.
|
|
The following financial statements from the Bristol-Myers Squibb Company Quarterly Report on Form 10-Q for the quarter ended March 31, 2018, formatted in Extensible Business Reporting Language (XBRL):
(i) consolidated statements of earnings, (ii) consolidated statements of comprehensive income, (iii) consolidated balance sheets, (iv) consolidated statements of cash flows, and (v) the notes to the consolidated financial statements.
|
|
|
2017 Form 10-K
|
Annual Report on Form 10-K for the fiscal year ended December 31, 2017
|
AstraZeneca
|
AstraZeneca PLC
|
CML
|
chronic myeloid leukemia
|
CRC
|
colorectal cancer
|
dMMR
|
DNA mismatch repair deficient
|
EC
|
European Commission
|
EMA
|
European Medicines Agency
|
EPO
|
European Patent Office
|
EPS
|
earnings per share
|
EU
|
European Union
|
FASB
|
Financial Accounting Standards Board
|
FDA
|
U.S. Food and Drug Administration
|
Flexus
|
Flexus Biosciences, Inc.
|
F-Star Alpha
|
F-Star Alpha Ltd.
|
GAAP
|
U.S. generally accepted accounting principles
|
Gilead
|
Gilead Sciences, Inc.
|
GTN
|
gross-to-net
|
HIV
|
human immunodeficiency virus
|
HNC
|
head and neck cancer
|
IO
|
immuno-oncology
|
IPRD
|
in-process research and development
|
JIA
|
juvenile idiopathic arthritis
|
LOE
|
loss of exclusivity
|
mCRC
|
metastatic colorectal cancer
|
Merck
|
Merck & Co., Inc.
|
MSI-H
|
microsatellite instability-high
|
Nektar
|
Netkar Therapeutics
|
NKT
|
natural killer T cells
|
NSCLC
|
non-small cell lung cancer
|
NVAF
|
non-valvular atrial fibrillation
|
OTC
|
over-the-counter
|
PD-1
|
programmed cell death protein 1
|
PD-L1
|
programmed death-ligand 1
|
PsA
|
psoriatic arthritis
|
Quarterly Report on Form 10-Q
|
Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2018
|
R&D
|
research and development
|
RA
|
rheumatoid arthritis
|
RCC
|
renal cell carcinoma
|
sBLA
|
supplemental Biologics License Application
|
SCCHN
|
squamous cell carcinoma of the head and neck
|
SCLC
|
small cell lung cancer
|
SEC
|
Securities and Exchange Commission
|
SK Biotek
|
SK Biotek Co., Ltd.
|
TMB
|
tumor mutational burden
|
U.S.
|
United States
|
UK
|
United Kingdom
|
|
|
|
BRISTOL-MYERS SQUIBB COMPANY
(REGISTRANT)
|
|
|
|
|
|
|
Date:
|
April 26, 2018
|
|
By:
|
/s/ Giovanni Caforio
|
|
|
|
|
Giovanni Caforio
Chairman of the Board and Chief Executive Officer
|
|
|
|
|
|
Date:
|
April 26, 2018
|
|
By:
|
/s/ Charles Bancroft
|
|
|
|
|
Charles Bancroft
Chief Financial Officer
|
Ratio of Earnings to Fixed Charges:
|
Three Months Ended
March 31, 2018 |
|
Year Ended December 31,
|
||||||||||||||||
Dollars in Millions
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|||||||||||
Earnings
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings from continuing operations before income taxes
|
$
|
1,779
|
|
|
$
|
5,131
|
|
|
$
|
5,915
|
|
|
$
|
2,077
|
|
|
$
|
2,381
|
|
Less:
|
|
|
|
|
|
|
|
|
|
||||||||||
Noncontrolling interest in pretax income/(loss) of
|
|
|
|
|
|
|
|
|
|
||||||||||
subsidiaries that have not incurred fixed charges
|
2
|
|
|
(63
|
)
|
|
16
|
|
|
51
|
|
|
38
|
|
|||||
Equity in net income of affiliates
|
24
|
|
|
75
|
|
|
77
|
|
|
83
|
|
|
107
|
|
|||||
Capitalized interest
|
5
|
|
|
15
|
|
|
10
|
|
|
2
|
|
|
3
|
|
|||||
Adjusted Income
|
1,748
|
|
|
5,104
|
|
|
5,812
|
|
|
1,941
|
|
|
2,233
|
|
|||||
Add:
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed charges
|
63
|
|
|
252
|
|
|
226
|
|
|
231
|
|
|
254
|
|
|||||
Distributed income of equity investments
|
25
|
|
|
98
|
|
|
99
|
|
|
105
|
|
|
153
|
|
|||||
Total Earnings
|
$
|
1,836
|
|
|
$
|
5,454
|
|
|
$
|
6,137
|
|
|
$
|
2,277
|
|
|
$
|
2,640
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed Charges
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
|
$
|
46
|
|
|
$
|
196
|
|
|
$
|
167
|
|
|
$
|
184
|
|
|
$
|
203
|
|
Capitalized interest
|
5
|
|
|
15
|
|
|
10
|
|
|
2
|
|
|
3
|
|
|||||
One-third of rental expense
(1)
|
12
|
|
|
41
|
|
|
49
|
|
|
45
|
|
|
48
|
|
|||||
Total Fixed Charges
|
$
|
63
|
|
|
$
|
252
|
|
|
$
|
226
|
|
|
$
|
231
|
|
|
$
|
254
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Ratio of Earnings to Fixed Charges
|
29.14
|
|
|
21.64
|
|
|
27.15
|
|
|
9.86
|
|
|
10.39
|
|
1.
|
I have reviewed Bristol-Myers Squibb Company’s Quarterly Report on Form 10-Q for the quarter ended
March 31, 2018
;
|
2.
|
Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined by Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
|
b.
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):
|
a.
|
all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting, which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.
|
/s/ Giovanni Caforio
|
Giovanni Caforio
Chief Executive Officer
|
1.
|
I have reviewed Bristol-Myers Squibb Company’s Quarterly Report on Form 10-Q for the quarter ended
March 31, 2018
;
|
2.
|
Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined by Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
|
b.
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):
|
a.
|
all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting, which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.
|
/s/ Charles Bancroft
|
Charles Bancroft
Chief Financial Officer
|
/s/ Giovanni Caforio
|
Giovanni Caforio
Chief Executive Officer
|
/s/ Charles Bancroft
|
Charles Bancroft
Chief Financial Officer
|