Exhibit 99.1
BRISTOL-MYERS SQUIBB COMPANY
EARNINGS FROM OPERATIONS
(Unaudited, dollars and shares in millions except per share data)
2020 | 2021 | |||||||||||||||||||||||
Year | 1st Qtr | 2nd Qtr | 3rd Qtr | 4th Qtr | Year | |||||||||||||||||||
Net product sales | $ | 41,321 | $ | 10,798 | $ | 11,405 | $ | 11,243 | $ | 11,609 | $ | 45,055 | ||||||||||||
Alliance and other revenues | 1,197 | 275 | 298 | 381 | 376 | 1,330 | ||||||||||||||||||
Total Revenues | 42,518 | 11,073 | 11,703 | 11,624 | 11,985 | 46,385 | ||||||||||||||||||
Cost of products sold(a) | 11,773 | 2,841 | 2,452 | 2,291 | 2,356 | 9,940 | ||||||||||||||||||
Marketing, selling and administrative | 7,661 | 1,666 | 1,882 | 1,788 | 2,354 | 7,690 | ||||||||||||||||||
Research and development(b) | 10,048 | 2,219 | 2,478 | 2,980 | 2,518 | 10,195 | ||||||||||||||||||
Acquired IPRD(b) | 12,533 | 6 | 793 | 271 | 89 | 1,159 | ||||||||||||||||||
Amortization of acquired intangible assets | 9,688 | 2,513 | 2,547 | 2,546 | 2,417 | 10,023 | ||||||||||||||||||
Other (income)/expense, net | (2,314 | ) | (702 | ) | (2 | ) | (409 | ) | 393 | (720 | ) | |||||||||||||
Total Expenses | 49,389 | 8,543 | 10,150 | 9,467 | 10,127 | 38,287 | ||||||||||||||||||
Earnings Before Income Taxes | (6,871 | ) | 2,530 | 1,553 | 2,157 | 1,858 | 8,098 | |||||||||||||||||
Provision for Income Taxes | 2,124 | 501 | 492 | 605 | (514 | ) | 1,084 | |||||||||||||||||
Net Earnings | (8,995 | ) | 2,029 | 1,061 | 1,552 | 2,372 | 7,014 | |||||||||||||||||
Noncontrolling Interest | 20 | 8 | 6 | 6 | — | 20 | ||||||||||||||||||
Net Earnings Attributable to BMS | $ | (9,015 | ) | $ | 2,021 | $ | 1,055 | $ | 1,546 | $ | 2,372 | $ | 6,994 | |||||||||||
Diluted Earnings/(Loss) per Common Share* | $ | (3.99 | ) | $ | 0.89 | $ | 0.47 | $ | 0.69 | $ | 1.07 | $ | 3.12 | |||||||||||
Weighted-Average Common Shares Outstanding - Diluted | 2,258 | 2,265 | 2,252 | 2,243 | 2,219 | 2,245 |
* Quarterly amounts may not add to the year-to-date amounts, as each period is computed on a discrete basis.
(a) Excludes amortization of acquired intangible assets.
(b) Research and development charges resulting from upfront or contingent milestone payments in connection with asset acquisitions or licensing of third-party intellectual property rights have been reclassified to the Acquired IPRD line item beginning with the first quarter of 2022. Prior period results have been revised for comparability.
BRISTOL-MYERS SQUIBB COMPANY
RECONCILIATION TO PREVIOUSLY REPORTED DILUTED EPS - NON-GAAP
(Unaudited, dollars and shares in millions except per share data)
2020 | 2021 | |||||||||||||||||||||||
Year | 1st Qtr | 2nd Qtr | 3rd Qtr | 4th Qtr | Year | |||||||||||||||||||
Up-front and milestone charges previously specified | $ | 12,441 | $ | — | $ | 780 | $ | 200 | $ | — | $ | 980 | ||||||||||||
Licensing income previously specified | (168 | ) | (14 | ) | (15 | ) | — | (43 | ) | (72 | ) | |||||||||||||
Decrease/(Increase) in Earnings before income taxes - Non-GAAP | 12,273 | (14 | ) | 765 | 200 | (43 | ) | 908 | ||||||||||||||||
Income tax impact | (90 | ) | 3 | (96 | ) | (46 | ) | 10 | (129 | ) | ||||||||||||||
Decrease/(Increase) in Net earnings attributable to BMS - Non-GAAP | 12,183 | (11 | ) | 669 | 154 | (33 | ) | 779 | ||||||||||||||||
Decrease/(Increase) in Diluted Earnings Per Share - Non-GAAP | 5.31 | — | 0.30 | 0.07 | (0.01 | ) | 0.35 | |||||||||||||||||
Diluted Earnings Per Share - Non-GAAP previously reported | 6.44 | 1.74 | 1.93 | 2.00 | 1.83 | 7.51 | ||||||||||||||||||
Revised Diluted Earnings Per Share - Non-GAAP | 1.13 | 1.74 | 1.63 | 1.93 | 1.84 | 7.16 |
BRISTOL-MYERS SQUIBB COMPANY
SPECIFIED ITEMS
(Unaudited, dollars in millions)
2020(a) | 2021(a) | |||||||||||||||||||||||
Year | 1st Qtr | 2nd Qtr | 3rd Qtr | 4th Qtr | Year | |||||||||||||||||||
Inventory purchase price accounting adjustments | $ | 2,688 | $ | 79 | $ | 88 | $ | 97 | $ | — | $ | 264 | ||||||||||||
Intangible asset impairment | 575 | 315 | — | — | — | 315 | ||||||||||||||||||
Employee compensation charges | 4 | — | — | — | — | — | ||||||||||||||||||
Site exit and other costs | 33 | 23 | 1 | — | — | 24 | ||||||||||||||||||
Cost of products sold | 3,300 | 417 | 89 | 97 | — | 603 | ||||||||||||||||||
Employee compensation charges | 275 | — | 1 | — | — | 1 | ||||||||||||||||||
Site exit and other costs | 4 | (1 | ) | — | 1 | 2 | 2 | |||||||||||||||||
Marketing, selling and administrative | 279 | (1 | ) | 1 | 1 | 2 | 3 | |||||||||||||||||
IPRD impairments | 470 | — | 230 | 610 | — | 840 | ||||||||||||||||||
Inventory purchase price accounting adjustments | 36 | — | — | 1 | — | 1 | ||||||||||||||||||
Employee compensation charges | 282 | 1 | — | — | — | 1 | ||||||||||||||||||
Site exit and other costs | 115 | — | — | 1 | — | 1 | ||||||||||||||||||
Research and development | 903 | 1 | 230 | 612 | — | 843 | ||||||||||||||||||
Amortization of acquired intangible assets | 9,688 | 2,513 | 2,547 | 2,546 | 2,417 | 10,023 | ||||||||||||||||||
Interest expense(b) | (159 | ) | (34 | ) | (28 | ) | (29 | ) | (29 | ) | (120 | ) | ||||||||||||
Contingent consideration | (1,757 | ) | (510 | ) | — | — | (32 | ) | (542 | ) | ||||||||||||||
Equity investment (gains)/losses | (1,156 | ) | (608 | ) | (154 | ) | (465 | ) | 469 | (758 | ) | |||||||||||||
Integration expenses | 717 | 141 | 152 | 141 | 130 | 564 | ||||||||||||||||||
Provision for restructuring | 530 | 45 | 78 | 27 | 19 | 169 | ||||||||||||||||||
Litigation and other settlements | (239 | ) | — | — | — | — | — | |||||||||||||||||
Reversion excise tax | 76 | — | — | — | — | — | ||||||||||||||||||
Divestiture (gains)/losses | (55 | ) | — | (11 | ) | 2 | — | (9 | ) | |||||||||||||||
Loss on debt redemption | — | 281 | — | — | — | 281 | ||||||||||||||||||
Other (income)/expense, net | (2,043 | ) | (685 | ) | 37 | (324 | ) | 557 | (415 | ) | ||||||||||||||
Increase to pretax income | 12,127 | 2,245 | 2,904 | 2,932 | 2,976 | 11,057 | ||||||||||||||||||
Income taxes on items above | (1,643 | ) | (303 | ) | (292 | ) | (137 | ) | (261 | ) | (993 | ) | ||||||||||||
Income taxes attributed to Otezla divestiture | 266 | — | — | — | — | — | ||||||||||||||||||
Income taxes attributed to internal transfer of intangible assets | 853 | — | — | — | (983 | ) | (983 | ) | ||||||||||||||||
Income taxes | (524 | ) | (303 | ) | (292 | ) | (137 | ) | (1,244 | ) | (1,976 | ) | ||||||||||||
Increase to net earnings | $ | 11,603 | $ | 1,942 | $ | 2,612 | $ | 2,795 | $ | 1,732 | $ | 9,081 |
(a) | Revised to exclude significant R&D charges or other income resulting from up-front and contingent milestone payments in connection with asset acquisitions or licensing of third-party intellectual property rights (including related income tax impacts). |
(b) | Includes amortization of purchase price adjustments to Celgene debt. |
RECONCILIATION OF CERTAIN GAAP LINE ITEMS TO CERTAIN NON-GAAP LINE ITEMS
(Unaudited, dollars in millions)
2020 | 2021 | |||||||||||||||||||||||
Year | 1st Qtr | 2nd Qtr | 3rd Qtr | 4th Qtr | Year | |||||||||||||||||||
Gross profit | $ | 30,745 | $ | 8,232 | $ | 9,251 | $ | 9,333 | $ | 9,629 | $ | 36,445 | ||||||||||||
Specified items (a) | 3,300 | 417 | 89 | 97 | — | 603 | ||||||||||||||||||
Gross profit excluding specified items | 34,045 | 8,649 | 9,340 | 9,430 | 9,629 | 37,048 | ||||||||||||||||||
Marketing, selling and administrative | 7,661 | 1,666 | 1,882 | 1,788 | 2,354 | 7,690 | ||||||||||||||||||
Specified items (a) | (279 | ) | 1 | (1 | ) | (1 | ) | (2 | ) | (3 | ) | |||||||||||||
Marketing, selling and administrative excluding specified items | 7,382 | 1,667 | 1,881 | 1,787 | 2,352 | 7,687 | ||||||||||||||||||
Research and development | 10,048 | 2,219 | 2,478 | 2,980 | 2,518 | 10,195 | ||||||||||||||||||
Specified items (a) | (903 | ) | (1 | ) | (230 | ) | (612 | ) | — | (843 | ) | |||||||||||||
Research and development excluding specified items | 9,145 | 2,218 | 2,248 | 2,368 | 2,518 | 9,352 | ||||||||||||||||||
Amortization of acquired intangible assets | 9,688 | 2,513 | 2,547 | 2,546 | 2,417 | 10,023 | ||||||||||||||||||
Specified items (a) | (9,688 | ) | (2,513 | ) | (2,547 | ) | (2,546 | ) | (2,417 | ) | (10,023 | ) | ||||||||||||
Amortization of acquired intangible assets excluding specified items | — | — | — | — | — | — | ||||||||||||||||||
Other (income)/expense, net | (2,314 | ) | (702 | ) | (2 | ) | (409 | ) | 393 | (720 | ) | |||||||||||||
Specified items (a) | 2,043 | 685 | (37 | ) | 324 | (557 | ) | 415 | ||||||||||||||||
Other (income)/expense, net excluding specified items | (271 | ) | (17 | ) | (39 | ) | (85 | ) | (164 | ) | (305 | ) | ||||||||||||
Earnings/(Loss) before income taxes | (6,871 | ) | 2,530 | 1,553 | 2,157 | 1,858 | 8,098 | |||||||||||||||||
Specified items(a) | 12,127 | 2,245 | 2,904 | 2,932 | 2,976 | 11,057 | ||||||||||||||||||
Earnings before income taxes excluding specified items | 5,256 | 4,775 | 4,457 | 5,089 | 4,834 | 19,155 | ||||||||||||||||||
Provision/(benefit) for income taxes | 2,124 | 501 | 492 | 605 | (514 | ) | 1,084 | |||||||||||||||||
Income taxes on specified items(a) | 1,643 | 303 | 292 | 137 | 261 | 993 | ||||||||||||||||||
Income taxes attributed to Otezla® divestiture(a) | (266 | ) | — | — | — | — | — | |||||||||||||||||
Income taxes attributed to internal transfer of intangible assets(a) | (853 | ) | — | — | — | 983 | 983 | |||||||||||||||||
Provision for income taxes excluding tax on specified items and income taxes attributed to Otezla® divestiture and internal transfer of intangible assets | 2,648 | 804 | 784 | 742 | 730 | 3,060 | ||||||||||||||||||
Noncontrolling Interest | 20 | 8 | 6 | 6 | — | 20 | ||||||||||||||||||
Specified items(a) | — | — | — | — | — | — | ||||||||||||||||||
Noncontrolling Interest excluding specified items | 20 | 8 | 6 | 6 | — | 20 | ||||||||||||||||||
Net Earnings/(Loss) attributable to BMS used for Diluted EPS Calculation - GAAP | (9,015 | ) | 2,021 | 1,055 | 1,546 | 2,372 | 6,994 | |||||||||||||||||
Specified items(a) | 11,603 | 1,942 | 2,612 | 2,795 | 1,732 | 9,081 | ||||||||||||||||||
Net earnings attributable to BMS used for Diluted EPS Calculation excluding specified items - Non-GAAP | 2,588 | 3,963 | 3,667 | 4,341 | 4,104 | 16,075 | ||||||||||||||||||
Weighted-average Common Shares Outstanding - Diluted - GAAP | 2,258 | 2,265 | 2,252 | 2,243 | 2,219 | 2,245 | ||||||||||||||||||
Weighted-average Common Shares Outstanding - Diluted - Non-GAAP | 2,293 | 2,265 | 2,252 | 2,243 | 2,219 | 2,245 | ||||||||||||||||||
Diluted Earnings/(Loss) Per Share - GAAP* | $ | (3.99 | ) | $ | 0.89 | $ | 0.47 | $ | 0.69 | $ | 1.07 | $ | 3.12 | |||||||||||
Diluted Earnings Per Share attributable to specified items(a) | 5.12 | 0.85 | 1.16 | 1.24 | 0.77 | 4.04 | ||||||||||||||||||
Diluted Earnings Per Share - Non-GAAP* | $ | 1.13 | $ | 1.74 | $ | 1.63 | $ | 1.93 | $ | 1.84 | $ | 7.16 | ||||||||||||
Effective Tax Rate | (30.9 | )% | 19.8 | % | 31.7 | % | 28.0 | % | (27.7 | )% | 13.4 | % | ||||||||||||
Specified items(a) | 81.3 | % | (3.0 | )% | (14.1 | )% | (13.5 | )% | 42.8 | % | 2.6 | % | ||||||||||||
Effective Tax Rate excluding specified items | 50.4 | % | 16.8 | % | 17.6 | % | 14.6 | % | 15.1 | % | 16.0 | % |
* | Quarterly amounts may not add to the year-to-date amounts, as each period is computed on a discrete basis. |
(a) | Refer to the Specified Items schedule for further details. Effective tax rate on the Specified Items represents the difference between the GAAP and Non-GAAP effective tax rate. |
BRISTOL-MYERS SQUIBB COMPANY
USE OF NON-GAAP FINANCIAL INFORMATION
In discussing financial results, the Company refers to financial measures that are not in accordance with U.S. Generally Accepted Accounting Principles (GAAP). These non-GAAP financial measures, provided as supplemental information to the financial measures presented in this exhibit that are calculated and presented in accordance with GAAP, are presented because management has evaluated the Company’s financial results both including and excluding the adjusted items or the effects of foreign currency translation, as applicable, and believes that the non-GAAP financial measures presented supplement or enhance management, analysts and investors overall understanding of the Company’s underlying financial performance and trends and facilitate comparisons among current, past and future periods.
Non-GAAP financial measures such as non-GAAP earnings and related EPS information are adjusted to exclude certain costs, expenses, gains and losses and other specified items that are evaluated on an individual basis after considering their quantitative and qualitative aspects and typically have one or more of the following characteristics, such as being highly variable, difficult to project, unusual in nature, significant to the results of a particular period or not indicative of past or future operating results. These items are excluded from non-GAAP earnings and related EPS information because the Company believes they neither relate to the ordinary course of the Company’s business nor reflect the Company’s underlying business performance. Similar charges or gains were recognized in prior periods and will likely reoccur in future periods, including amortization of acquired intangible assets, including product rights that generate a significant portion of our ongoing revenue and will recur until the intangible assets are fully amortized, unwind of inventory purchase price adjustments, acquisition and integration expenses, restructuring costs, accelerated depreciation and impairment of property, plant and equipment and intangible assets, divestiture gains or losses, stock compensation resulting from accelerated vesting of Celgene awards, certain retention-related employee compensation charges related to the Celgene transaction, pension, legal and other contractual settlement charges, equity investment and contingent value rights fair value adjustments (including fair value adjustments attributed to limited partnership equity method investments beginning in 2021) and amortization of fair value adjustments of debt acquired from Celgene in our 2019 exchange offer, among other items. Certain other significant tax items are also excluded such as the impact resulting from internal transfers due to streamlining our legal entity structure subsequent to the Celgene acquisition and the global intangible low taxed income tax change upon finalization of the Otezla* divestiture in 2020. Deferred and current income taxes attributed to these items are also adjusted for considering their individual impact to the overall tax expense, deductibility and jurisdictional tax rates. The Company will modify its presentation of non-GAAP results and no longer exclude from non-GAAP results significant R&D charges or other income resulting from upfront or contingent milestone payments in connection with asset acquisitions or licensing of third-party intellectual property rights beginning in the first quarter of 2022. For the purposes of comparability with future periods, the non-GAAP financial measures for the year ended December 31, 2020, each of the four quarters of 2021 and the year ended December 31, 2021, presented in this exhibit have been updated to reflect this change; however, the Company has reconciled non-GAAP diluted earnings per share as calculated using the new methodology to the previously reported non-GAAP diluted earnings per share to allow investors and readers to evaluate this non-GAAP measure using the historic methodologies in place as of the applicable dates.
Because the non-GAAP financial measures are not calculated in accordance with GAAP, they should not be considered superior to and are not intended to be considered in isolation or as a substitute for the related financial measures presented in this exhibit that are prepared in accordance with GAAP and may not be the same as or comparable to similarly titled measures presented by other companies due to possible differences in method and in the items being adjusted. We encourage investors to review our financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure.
Reconciliations of the non-GAAP financial measures to the most comparable GAAP measures are provided in the accompanying financial tables. Within the accompanying financial tables presented, certain columns and rows may not add due to the use of rounded numbers. Percentages and earnings per share amounts presented are calculated from the underlying amounts.
Non-GAAP financial measures such as non-GAAP earnings and related EPS information are adjusted to exclude certain costs, expenses, gains and losses and other specified items that are evaluated on an individual basis after considering their quantitative and qualitative aspects and typically have one or more of the following characteristics, such as being highly variable, difficult to project, unusual in nature, significant to the results of a particular period or not indicative of past or future operating results. These items are excluded from non-GAAP earnings and related EPS information because the Company believes they neither relate to the ordinary course of the Company’s business nor reflect the Company’s underlying business performance. Similar charges or gains were recognized in prior periods and will likely reoccur in future periods, including amortization of acquired intangible assets, including product rights that generate a significant portion of our ongoing revenue and will recur until the intangible assets are fully amortized, unwind of inventory purchase price adjustments, acquisition and integration expenses, restructuring costs, accelerated depreciation and impairment of property, plant and equipment and intangible assets, divestiture gains or losses, stock compensation resulting from accelerated vesting of Celgene awards, certain retention-related employee compensation charges related to the Celgene transaction, pension, legal and other contractual settlement charges, equity investment and contingent value rights fair value adjustments (including fair value adjustments attributed to limited partnership equity method investments beginning in 2021) and amortization of fair value adjustments of debt acquired from Celgene in our 2019 exchange offer, among other items. Certain other significant tax items are also excluded such as the impact resulting from internal transfers due to streamlining our legal entity structure subsequent to the Celgene acquisition and the global intangible low taxed income tax change upon finalization of the Otezla* divestiture in 2020. Deferred and current income taxes attributed to these items are also adjusted for considering their individual impact to the overall tax expense, deductibility and jurisdictional tax rates. The Company will modify its presentation of non-GAAP results and no longer exclude from non-GAAP results significant R&D charges or other income resulting from upfront or contingent milestone payments in connection with asset acquisitions or licensing of third-party intellectual property rights beginning in the first quarter of 2022. For the purposes of comparability with future periods, the non-GAAP financial measures for the year ended December 31, 2020, each of the four quarters of 2021 and the year ended December 31, 2021, presented in this exhibit have been updated to reflect this change; however, the Company has reconciled non-GAAP diluted earnings per share as calculated using the new methodology to the previously reported non-GAAP diluted earnings per share to allow investors and readers to evaluate this non-GAAP measure using the historic methodologies in place as of the applicable dates.
Because the non-GAAP financial measures are not calculated in accordance with GAAP, they should not be considered superior to and are not intended to be considered in isolation or as a substitute for the related financial measures presented in this exhibit that are prepared in accordance with GAAP and may not be the same as or comparable to similarly titled measures presented by other companies due to possible differences in method and in the items being adjusted. We encourage investors to review our financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure.
Reconciliations of the non-GAAP financial measures to the most comparable GAAP measures are provided in the accompanying financial tables. Within the accompanying financial tables presented, certain columns and rows may not add due to the use of rounded numbers. Percentages and earnings per share amounts presented are calculated from the underlying amounts.