8-KOther Events

BRISTOL MYERS SQUIBB CO 8-K Report, Corporate Update (Jan 5, 2018)

Filed January 5, 2018For Securities:BMYCELG-RIBMYMP

Summary

Bristol-Myers Squibb (BMY) has filed an 8-K to provide an update on the estimated financial impact of the Tax Cuts and Jobs Act of 2017. The company anticipates an additional net tax expense of approximately $3 billion in the fourth quarter of 2017, primarily due to taxes on unremitted offshore earnings. This charge is expected to affect the company's previously issued 2017 GAAP tax rate and earnings per share (EPS) guidance. While this charge will impact reported GAAP figures, BMY currently estimates that the net impact on its non-GAAP tax rate will be roughly neutral in 2018. Investors should note that the company is still evaluating all provisions of the tax reform legislation, and more detailed guidance for 2018 will be provided during the fourth quarter/full-year 2017 earnings call scheduled for February 5, 2018. The $3 billion charge is a significant one-time event, but the company's outlook for its operational non-GAAP performance in 2018 remains neutral regarding this tax reform.

Key Highlights

  • 1BMY estimates a one-time, additional net tax expense of approximately $3 billion for Q4 2017, driven by the Tax Cuts and Jobs Act of 2017.
  • 2This expense is primarily related to taxes on unremitted offshore earnings.
  • 3The $3 billion charge will impact the company's 2017 GAAP tax rate and EPS guidance.
  • 4The tax reform is not expected to impact BMY's non-GAAP guidance for 2017.
  • 5BMY currently estimates a roughly neutral net impact on its non-GAAP tax rate for 2018.
  • 6A comprehensive update on 2018 guidance, including the full impact of tax reform, will be provided on the Q4 2017 earnings call on February 5, 2018.
  • 7The company continues to evaluate all provisions of the new tax legislation.

Frequently Asked Questions

BMY estimates an additional net tax expense of approximately $3 billion in the fourth quarter of 2017, primarily due to taxes on unremitted offshore earnings. This will negatively affect reported GAAP figures for 2017.

Yes, the $3 billion charge will impact BMY's previously provided 2017 GAAP tax rate and earnings per share (EPS) guidance. However, it is not expected to affect the company's non-GAAP guidance for 2017.

BMY currently estimates that the net impact of the tax reform on its non-GAAP tax rate will be roughly neutral in 2018. The company will provide a more detailed update on its 2018 guidance during its fourth quarter/full-year 2017 earnings call on February 5, 2018.

No, the $3 billion charge is primarily related to the repatriation of unremitted offshore earnings under the new tax law and is largely a one-time event associated with the transition to the new tax regime. The company expects a neutral impact on its non-GAAP tax rate in 2018.