8-KOther Events

BRISTOL MYERS SQUIBB CO 8-K Report (Nov 15, 2002)

Filed November 15, 2002For Securities:BMYCELG-RIBMYMP

Summary

Bristol-Myers Squibb Company (BMY) has filed an 8-K report on November 15, 2002, announcing a delay in the filing of its third quarter 2002 10-Q. This delay is directly linked to the ongoing restatement of the company's sales and earnings, which is a consequence of a previously disclosed U.S. wholesaler inventory buildup situation. The company is working with its independent auditors, PricewaterhouseCoopers LLP, to complete this complex restatement process. The report also addresses the potential impact of this delay on BMY's debt obligations. While the company believes it will not result in a default on its commercial paper or its long-term debt issued under the 1993 Indenture, there is a risk that debt holders could declare the principal due and payable if the filing is not cured within a specified timeframe. BMY has secured a waiver for breaches related to its revolving credit facility and is seeking similar waivers for other credit agreements, though success is not assured.

Key Highlights

  • 1BMY announced a delay in filing its Q3 2002 10-Q due to a restatement of sales and earnings related to wholesaler inventory issues.
  • 2The company is actively working with PricewaterhouseCoopers LLP to finalize the restatement.
  • 3The delay does not currently constitute a default on the company's commercial paper, and BMY expects to continue this program.
  • 4Long-term debt issued under the 1993 Indenture is not in automatic default due to the delay, but a 15-day grace period exists for acceleration if not cured within 90 days.
  • 5A waiver has been obtained for breaches under the $500 million revolving credit facility, which currently has no outstanding borrowings.
  • 6BMY is seeking waivers for other credit agreements, but the outcome is uncertain.
  • 7If debt acceleration were to occur, the company might seek alternative financing.

Frequently Asked Questions

The primary reason for the 8-K filing is to announce the delay in filing the company's third quarter 2002 10-Q report and to provide updates regarding the restatement of its sales and earnings due to a previously disclosed U.S. wholesaler inventory buildup situation.

The company believes the delay will not result in an automatic default on its commercial paper or long-term debt issued under the 1993 Indenture. However, there's a risk that debt holders could trigger acceleration of payments if the filing is not cured within a specified period. BMY has received a waiver for its revolving credit facility and is pursuing waivers for other credit agreements.

Bristol-Myers Squibb believes it will be able to continue its commercial paper program and that the delay in filing the 10-Q will not adversely impact its ability to issue commercial paper in the future, although no assurances can be made. As of October 31, 2002, the company had approximately $727 million outstanding under this program.

BMY is working closely with its independent auditors, PricewaterhouseCoopers LLP, to complete the restatement of its financial results. The company is also actively seeking waivers from lenders under its credit agreements to mitigate the risk of default due to the delayed filing.