Item 1. FINANCIAL STATEMENTS

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Item 1. FINANCIAL STATEMENTS

BRISTOL-MYERS SQUIBB COMPANY

CONSOLIDATED STATEMENTS OF EARNINGS

Dollars in millions, except per share data

(UNAUDITED)


	Three Months Ended September 30,				Nine Months Ended September 30,
EARNINGS	2024		2023		2024		2023
Net product sales	$	11,483	$	10,645	$	34,967	$	32,610
Alliance and other revenues	409		321		991		919
Total Revenues	11,892		10,966		35,958		33,529

Cost of products sold(a)	2,957		2,506		9,156		7,948
Marketing, selling and administrative	1,983		2,003		6,278		5,699
Research and development	2,374		2,242		7,968		6,821
Acquired IPRD	262		80		13,343		313
Amortization of acquired intangible assets	2,406		2,256		7,179		6,769
Other (income)/expense, net	234		(258)		588		(787)
Total Expenses	10,216		8,829		44,512		26,763

Earnings/(loss) before income taxes	1,676		2,137		(8,554)		6,766
Income tax provision	461		203		455		488
Net earnings/(loss)	1,215		1,934		(9,009)		6,278
Noncontrolling interest	4		6		11		15
Net earnings/(loss) attributable to BMS	$	1,211	$	1,928	$	(9,020)	$	6,263

Earnings/(Loss) per common share:
Basic	$	0.60	$	0.94	$	(4.45)	$	3.01
Diluted	0.60		0.93		(4.45)		2.99

(a) Excludes amortization of acquired intangible assets.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS)

Dollars in millions

(UNAUDITED)


	Three Months Ended September 30,				Nine Months Ended September 30,
COMPREHENSIVE INCOME/(LOSS)	2024		2023		2024		2023
Net earnings/(loss)	$	1,215	$	1,934	$	(9,009)	$	6,278
Other comprehensive income/(loss), net of taxes and reclassifications to earnings:
Derivatives qualifying as cash flow hedges	(178)		114		67		(7)
Pension and postretirement benefits	100		2		49		(9)
Marketable debt securities	5		(2)		3		(2)
Foreign currency translation	61		(13)		(41)		13
Total Other Comprehensive Income/(Loss)	(12)		101		78		(5)

Comprehensive income/(loss)	1,203		2,035		(8,931)		6,273
Comprehensive income attributable to noncontrolling interest	4		6		11		15
Comprehensive income/(loss) attributable to BMS	$	1,199	$	2,029	$	(8,942)	$	6,258

The accompanying notes are an integral part of these consolidated financial statements.

BRISTOL-MYERS SQUIBB COMPANY

CONSOLIDATED BALANCE SHEETS

Dollars in millions

(UNAUDITED)


ASSETS	September 30, 2024		December 31, 2023
Current assets:
Cash and cash equivalents	$	7,890	$	11,464
Marketable debt securities	204		816
Receivables	11,026		10,921
Inventories	3,332		2,662
Other current assets	5,623		5,907
Total Current assets	28,075		31,770
Property, plant and equipment	6,903		6,646
Goodwill	21,751		21,169
Other intangible assets	26,964		27,072
Deferred income taxes	3,609		2,768
Marketable debt securities	324		364
Other non-current assets	6,044		5,370
Total Assets	$	93,670	$	95,159

LIABILITIES
Current liabilities:
Short-term debt obligations	$	1,078	$	3,119
Accounts payable	3,469		3,259
Other current liabilities	18,091		15,884
Total Current liabilities	22,638		22,262
Deferred income taxes	430		338
Long-term debt	48,674		36,653
Other non-current liabilities	4,728		6,421
Total Liabilities	76,470		65,674

Commitments and Contingencies

EQUITY
BMS Shareholders’ equity:
Preferred stock	—		—
Common stock	292		292
Capital in excess of par value of stock	45,896		45,684
Accumulated other comprehensive loss	(1,468)		(1,546)
Retained earnings	16,097		28,766
Less cost of treasury stock	(43,675)		(43,766)
Total BMS Shareholders’ Equity	17,142		29,430
Noncontrolling interest	58		55
Total Equity	17,200		29,485
Total Liabilities and Equity	$	93,670	$	95,159

The accompanying notes are an integral part of these consolidated financial statements.

BRISTOL-MYERS SQUIBB COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS

Dollars in millions

(UNAUDITED)


	Nine Months Ended September 30,
	2024		2023
Cash Flows From Operating Activities:
Net (loss)/earnings	$	(9,009)	$	6,278
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization, net	7,720		7,296
Deferred income taxes	(1,298)		(1,961)
Stock-based compensation	387		391
Impairment charges	1,010		226
Divestiture gains and royalties	(838)		(639)
Acquired IPRD	13,343		313
Equity investment (gains)/losses	(221)		213
Other adjustments	123		260
Changes in operating assets and liabilities:
Receivables	121		(487)
Inventories	(661)		(554)
Accounts payable	(333)		(246)
Rebates and discounts	1,889		1,115
Income taxes payable	(1,381)		(1,647)
Other	(101)		(950)
Net cash provided by operating activities	10,751		9,608
Cash Flows From Investing Activities:
Sale and maturities of marketable debt securities	1,060		692
Purchase of marketable debt securities	(398)		(1,057)
Proceeds from sales of equity investments	60		215
Capital expenditures	(870)		(879)
Divestiture and other proceeds	766		668
Acquisition and other payments, net of cash acquired	(21,774)		(588)
Net cash used in investing activities	(21,156)		(949)
Cash Flows From Financing Activities:
Proceeds from issuance of short-term debt obligations	2,987		—
Repayments of short-term debt obligations	(3,000)		—
Other short-term financing obligations, net	504		233
Proceeds from issuance of long-term debt	12,883		—
Repayments of long-term debt	(2,873)		(1,879)
Repurchase of common stock	—		(5,155)
Dividends	(3,645)		(3,584)
Stock option proceeds and other, net	(87)		2
Net cash provided by/(used in) financing activities	6,769		(10,383)
Effect of exchange rates on cash, cash equivalents and restricted cash	10		(33)
Decrease in cash, cash equivalents and restricted cash	(3,626)		(1,757)
Cash, cash equivalents and restricted cash at beginning of period	11,519		9,325
Cash, cash equivalents and restricted cash at end of period	$	7,893	$	7,568

The accompanying notes are an integral part of these consolidated financial statements.

Note 1. BASIS OF PRESENTATION AND RECENTLY ISSUED ACCOUNTING STANDARDS

Basis of Consolidation

Bristol-Myers Squibb Company ("BMS", "we", "our", "us" or "the Company") prepared these unaudited consolidated financial statements following the requirements of the SEC and U.S. GAAP for interim reporting. Under those rules, certain footnotes and other financial information that are normally required for annual financial statements can be condensed or omitted. The Company is responsible for the consolidated financial statements included in this Quarterly Report on Form 10-Q, which include all adjustments necessary for a fair presentation of the financial position of the Company as of September 30, 2024 and December 31, 2023 and the results of operations for the three and nine months ended September 30, 2024 and 2023, and cash flows for the nine months ended September 30, 2024 and 2023. All intercompany balances and transactions have been eliminated. These consolidated financial statements and the related footnotes should be read in conjunction with the audited consolidated financial statements of the Company for the year ended December 31, 2023 included in the 2023 Form 10-K. Refer to the Summary of Abbreviated Terms at the end of this Quarterly Report on Form 10-Q for terms used throughout the document.

Business Segment Information

BMS operates in a single segment engaged in the discovery, development, licensing, manufacturing, marketing, distribution and sale of innovative medicines that help patients prevail over serious diseases. A global research and development organization and supply chain organization are responsible for the discovery, development, manufacturing and supply of products. Regional commercial organizations market, distribute and sell the products. The business is also supported by global corporate staff functions. Consistent with BMS's operational structure, the Chief Executive Officer ("CEO"), as the chief operating decision maker, manages and allocates resources at the global corporate level. Managing and allocating resources at the global corporate level enables the CEO to assess both the overall level of resources available and how to best deploy these resources across functions, therapeutic areas, regional commercial organizations and research and development projects in line with our overarching long-term corporate-wide strategic goals, rather than on a product or franchise basis. The determination of a single segment is consistent with the financial information regularly reviewed by the CEO for purposes of evaluating performance, allocating resources, setting incentive compensation targets, and planning and forecasting future periods. For further information on product and regional revenue, see "—Note 2. Revenue".

Use of Estimates and Judgments

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. The preparation of financial statements requires the use of management estimates, judgments and assumptions. The most significant assumptions are estimates used in determining accounting for acquisitions; impairments of intangible assets; charge-backs, cash discounts, sales rebates, returns and other adjustments; legal contingencies; and income taxes. Actual results may differ from estimates.

Recently Issued Accounting Standards Not Yet Adopted

Income Taxes

In December 2023, the FASB issued amended guidance on income tax disclosures. The guidance is intended to provide additional disaggregation to the effective income tax rate reconciliation and income tax payment disclosures. The amended guidance is effective for annual periods beginning January 1, 2025 and should be applied on a prospective basis. Early adoption is permitted.

Segment Reporting

In November 2023, the FASB issued amended guidance for improvements to reportable segment disclosures. The revised guidance requires that a public entity disclose significant segment expenses regularly reviewed by the chief operating decision maker (CODM), including public entities with a single reportable segment. The amended guidance is effective for fiscal years beginning January 1, 2024 and interim periods beginning January 1, 2025 and should be applied on a retrospective basis. Early adoption is permitted.

Note 2. REVENUE

The following table summarizes the disaggregation of revenue by nature:


	Three Months Ended September 30,				Nine Months Ended September 30,
Dollars in millions	2024		2023		2024		2023
Net product sales	$	11,483	$	10,645	$	34,967	$	32,610
Alliance revenues	105		138		355		461
Other revenues	304		183		636		458
Total Revenues	$	11,892	$	10,966	$	35,958	$	33,529

The following table summarizes GTN adjustments:


	Three Months Ended September 30,				Nine Months Ended September 30,
Dollars in millions	2024		2023		2024		2023
Gross product sales	$	21,223	$	18,648	$	61,298	$	54,047
GTN adjustments(a)
Charge-backs and cash discounts	(2,967)		(2,373)		(8,366)		(6,743)
Medicaid and Medicare rebates	(4,577)		(3,730)		(11,525)		(9,355)
Other rebates, returns, discounts and adjustments	(2,196)		(1,900)		(6,440)		(5,339)
Total GTN adjustments(b)	(9,740)		(8,003)		(26,331)		(21,437)
Net product sales	$	11,483	$	10,645	$	34,967	$	32,610

(a) Includes reductions to GTN adjustments for product sales made in prior periods resulting from changes in estimates of $42 million and $103 million for the three and nine months ended September 30, 2024 and $18 million and $116 million for the three and nine months ended September 30, 2023, respectively.

(b) Includes U.S. GTN adjustments of $8.9 billion and $23.9 billion for the three and nine months ended September 30, 2024 and $7.3 billion and $19.2 billion for the three and nine months ended September 30, 2023, respectively.

The following table summarizes the disaggregation of revenue by product and region:


	Three Months Ended September 30,				Nine Months Ended September 30,
Dollars in millions	2024		2023		2024		2023
Growth Portfolio
Opdivo	$	2,360	$	2,275	$	6,825	$	6,622
Orencia	936		925		2,682		2,616
Yervoy	642		579		1,855		1,672
Reblozyl	447		248		1,226		688
Opdualag	233		166		674		437
Abecma	124		93		301		372
Zeposia	147		123		408		301
Breyanzi	224		92		484		263
Camzyos	156		68		379		143
Sotyktu	66		66		163		107
Augtyro	10		—		23		—
Krazati	34		—		87		—
Other Growth products(a)	433		311		1,093		886
Total Growth Portfolio	5,812		4,946		16,200		14,107
Legacy Portfolio
Eliquis	3,002		2,705		10,138		9,332
Revlimid	1,412		1,429		4,434		4,647
Pomalyst/Imnovid	898		872		2,722		2,551
Sprycel	290		517		1,088		1,404
Abraxane	253		260		701		757
Other Legacy products(b)	225		237		675		731
Total Legacy Portfolio	6,080		6,020		19,758		19,422
Total Revenues	$	11,892	$	10,966	$	35,958	$	33,529

United States	$	8,232	$	7,542	$	25,509	$	23,298
International	3,389		3,239		9,803		9,716
Other(c)	271		185		646		515
Total Revenues	$	11,892	$	10,966	$	35,958	$	33,529

(a) Includes Onureg, Inrebic, Nulojix, Empliciti and royalty revenues.

(b) Includes other mature brands.

Beginning in 2024, Puerto Rico revenues are included in International revenues. Prior period amounts have been reclassified to conform to the current presentation.

Revenue recognized from performance obligations satisfied in prior periods was $238 million and $496 million for the three and nine months ended September 30, 2024 and $114 million and $355 million for the three and nine months ended September 30, 2023, respectively, consisting primarily of royalties for out-licensing arrangements and revised estimates for GTN adjustments related to prior period sales.

Note 3. ALLIANCES

BMS enters into collaboration arrangements with third parties for the development and commercialization of certain products. Although each of these arrangements is unique in nature, both parties are active participants in the operating activities of the collaboration and exposed to significant risks and rewards depending on the commercial success of the activities. BMS refers to these collaborations as alliances, and its partners as alliance partners.

Selected financial information pertaining to alliances was as follows, including net product sales when BMS is the principal in the third-party customer sale for products subject to the alliance. Expenses summarized below do not include all amounts attributed to the activities for the products in the alliance, but only the payments between the alliance partners or the related amortization if the payments were deferred or capitalized.


	Three Months Ended September 30,				Nine Months Ended September 30,
Dollars in millions	2024		2023		2024		2023
Revenues from alliances
Net product sales	$	3,091	$	2,762	$	10,323	$	9,614
Alliance revenues	105		138		355		461
Total alliance revenues	$	3,196	$	2,900	$	10,678	$	10,075

To/(from) alliance partners
Cost of products sold	$	1,496	$	1,330	$	5,013	$	4,650
Marketing, selling and administrative	(76)		(52)		(220)		(190)
Research and development	50		1		150		81
Acquired IPRD	—		—		880		55
Other (income)/expense, net	(12)		(10)		(126)		(37)


Dollars in millions	September 30, 2024		December 31, 2023
Selected alliance balance sheet information
Receivables – from alliance partners	$	190	$	233
Accounts payable – to alliance partners	1,455		1,394
Deferred income – from alliances(a)	236		274

(a) Includes unamortized upfront and milestone payments.

The nature, purpose, significant rights and obligations of the parties and specific accounting policy elections for each of the Company's significant alliances are discussed in the 2023 Form 10-K. Significant developments and updates related to alliances during the nine months ended September 30, 2024 and 2023 are set forth below.

SystImmune

BMS and SystImmune, Inc. ("SystImmune") are parties to a global strategic collaboration for the co-development and co-commercialization of BL-B01D1, a bispecific topoisomerase inhibitor-based anti-body drug conjugate, which is currently being evaluated in a Phase I clinical trial for metastatic or unresectable NSCLC and is also in development for breast cancer and other tumor types. BMS paid an upfront fee of $800 million, which was included in Acquired IPRD during the nine months ended September 30, 2024. BMS is also obligated to pay up to $7.6 billion upon the achievement of contingent development, regulatory and sales-based milestones.

The parties will jointly develop and commercialize BL-B01D1 in the U.S. and share in the profits and losses. SystImmune will be responsible for the development, commercialization, and manufacturing in Mainland China and will be responsible for manufacturing certain drug supplies for outside of Mainland China, where BMS will receive a royalty on net sales. BMS will be responsible for the development and commercialization in the rest of the world, where SystImmune will receive a royalty on net sales.

Eisai

In June 2024, BMS and Eisai agreed to end the global strategic collaboration for the co-development and co-commercialization of MORAb-202 due to the ongoing portfolio prioritization efforts within BMS. All rights and obligations for MORAb-202 were transferred to Eisai and BMS will receive $90 million as part of the termination, which was included in Other (income)/expense, net during the nine months ended September 30, 2024, of which $85 million was received during the third quarter of 2024.

Note 4. ACQUISITIONS, DIVESTITURES, LICENSING AND OTHER ARRANGEMENTS

Asset Acquisition

Karuna

On March 18, 2024, BMS acquired Karuna, a clinical-stage biopharmaceutical company driven to discover, develop, and deliver transformative medicines for people living with psychiatric and neurological conditions. The acquisition provided BMS with rights to Cobenfy (xanomeline and trospium chloride), formerly KarXT. Cobenfy is an antipsychotic with a novel mechanism of action and differentiated efficacy and safety, which was approved by the FDA on September 26, 2024 for the treatment of schizophrenia in adults. Cobenfy is also in registrational trials for both adjunctive therapy to existing standard of care agents in schizophrenia and the treatment of psychosis in patients with Alzheimer’s disease.

BMS acquired all of the issued and outstanding shares of Karuna's common stock for $330.00 per share in an all-cash transaction for total consideration of $14.0 billion, or $12.9 billion net of cash acquired. The acquisition was funded primarily with debt proceeds (see "—Note 10. Financing Arrangements" for further detail). The transaction was accounted for as an asset acquisition since Cobenfy represented substantially all of the fair value of the gross assets acquired. As a result, $12.1 billion was expensed to Acquired IPRD during the nine months ended September 30, 2024.

The following summarizes the total consideration transferred and allocation of consideration transferred to the assets acquired, liabilities assumed and Acquired IPRD expense:


Dollars in millions
Cash consideration for outstanding shares	$	12,606
Cash consideration for equity awards	1,421
Consideration to be paid	14,027
Less: Charge for unvested stock awards(a)	(289)
Transaction costs	55
Total consideration allocated	$	13,793

Cash and cash equivalents	$	1,167
Other assets	67
Intangible assets	100
Deferred income tax asset	542
Deferred income tax liability	(25)
Other liabilities	(180)
Total identifiable assets acquired, net	1,671
Acquired IPRD expense	12,122
Total consideration allocated	$	13,793

(a) Includes cash-settled unvested equity awards of $130 million expensed in Marketing, selling and administrative and $159 million expensed in Research and development during the nine months ended September 30, 2024.

Business Combinations

RayzeBio

On February 26, 2024, BMS acquired RayzeBio, a clinical-stage radiopharmaceutical therapeutics ("RPT") company with actinium-based RPTs for solid tumors. The acquisition provided BMS with rights to RayzeBio’s actinium-based radiopharmaceutical platform and lead asset, RYZ101, which is in Phase III development for treatment of gastroenteropancreatic neuroendocrine tumors.

BMS acquired all of the issued and outstanding shares of RayzeBio's common stock for $62.50 per share in an all-cash transaction for total consideration of $4.1 billion, or $3.6 billion net of cash acquired. The acquisition was funded through a combination of cash on hand and debt proceeds (see "—Note 10. Financing Arrangements" for further detail).

The transaction was accounted for as a business combination requiring all assets acquired and liabilities assumed to be recognized at fair value as of the acquisition date.

Total consideration for the acquisition consisted of the following:


Dollars in millions
Cash consideration for outstanding shares	$	3,851
Cash consideration for equity awards	296
Consideration paid	4,147
Less: Unvested stock awards(a)	(274)
Total consideration allocated	$	3,873

(a) Includes cash settlement for unvested equity awards of $159 million expensed in Marketing, selling and administrative and $115 million expensed in Research and development during the nine months ended September 30, 2024.

The purchase price allocation resulted in the following amounts being allocated to the assets acquired and liabilities assumed as of the acquisition date based upon their respective fair values summarized below:


Dollars in millions	Purchase Price Allocation
Cash and cash equivalents	$	501
Other assets	70
Intangible assets	3,700
Deferred income tax asset	81
Deferred income tax liability	(798)
Other liabilities	(109)
Identifiable net assets acquired	$	3,445
Goodwill	428
Total consideration allocated	$	3,873

Intangible assets included $1.7 billion of indefinite-lived IPRD and $2.0 billion of R&D technology. The estimated fair values for the indefinite-lived IPRD asset and the R&D technology were determined using an income approach valuation method. Goodwill resulted primarily from the recognition of deferred tax liabilities and is not deductible for tax purposes.

Mirati

On January 23, 2024, BMS acquired Mirati, a commercial stage targeted oncology company, obtaining the rights to commercialize lung cancer medicine Krazati, and several clinical assets, including PRMT5 Inhibitor (formerly MRTX1719). Krazati is an inhibitor of the KRASG12C mutation approved by the FDA as a second-line treatment for patients with NSCLC and is in clinical development in combination with a PD-1 inhibitor as a first-line therapy for patients with NSCLC. Krazati also is in clinical development both as a single agent, and in combinations, for additional indications. PRMT5 Inhibitor is a potential first-in-class MTA-cooperative PRMT5 inhibitor in Phase I development. BMS obtained access to several other clinical and pre-clinical stage assets, including additional KRAS inhibitors and enabling programs.

BMS acquired all of the issued and outstanding shares of Mirati's common stock for $58.00 per share in an all-cash transaction for total consideration of $4.8 billion, or $4.1 billion net of cash acquired. Mirati stockholders also received one non-tradeable contingent value right (CVR) for each share of Mirati common stock held, potentially worth $12.00 per share in cash for a total value of approximately $1.0 billion. The payout of the contingent value right is subject to the FDA acceptance of an NDA for PRMT5 Inhibitor for the treatment of specific indications within seven years of the closing of the transaction. The acquisition was funded through a combination of cash on hand and debt proceeds (see "—Note 10. Financing Arrangements" for further detail).

The transaction was accounted for as a business combination requiring all assets acquired and liabilities assumed to be recognized at fair value as of the acquisition date.

Total consideration for the acquisition consisted of the following:


Dollars in millions
Cash consideration for outstanding shares	$	4,596
Cash consideration for equity awards	205
Consideration paid	4,801
Plus: Fair value of CVRs	248
Less: unvested stock awards(a)	(114)
Total consideration allocated	$	4,935

(a) Includes cash settlement of unvested equity awards of $60 million expensed in Marketing, selling and administrative and $54 million expensed in Research and development during nine months ended September 30, 2024.


Dollars in millions	Purchase price allocation
Cash and cash equivalents	$	748
Inventories	215
Other assets	159
Intangible assets	4,225
Deferred income tax assets	734
Deferred income tax liabilities	(1,094)
Other liabilities	(204)
Identifiable net assets acquired	$	4,783
Goodwill	152
Total consideration allocated	$	4,935

Inventories includes a fair value adjustment of $148 million. Intangible assets included $640 million of definite-lived Acquired marketed product rights (Krazati) and $3.5 billion of indefinite-lived IPRD assets. The estimated fair value of both definite-lived Acquired marketed product rights and indefinite-lived IPRD assets was determined using an income approach valuation method. Goodwill resulted primarily from the recognition of deferred tax liabilities and is not deductible for tax purposes.

The results of operations and cash flows for Karuna, RayzeBio and Mirati were included in the consolidated financial statements commencing on their respective acquisition dates and were not material. Historical financial results of the acquired entities were not significant.

Divestitures

The following table summarizes the financial impact of divestitures including royalties, which are included in Other (income)/expense, net. Revenue and pretax earnings related to all divestitures were not material in all periods presented (excluding divestiture gains or losses).


	Three Months Ended September 30,
	Net Proceeds				Divestiture (Gains)/Losses				Royalty Income
Dollars in millions	2024		2023		2024		2023		2024		2023
Diabetes business - royalties	$	278	$	220	$	—	$	—	$	(284)	$	(217)
Mature products and other	3		3		5		—		—		—
Total	$	281	$	223	$	5	$	—	$	(284)	$	(217)


	Nine Months Ended September 30,
	Net Proceeds				Divestiture (Gains)/Losses				Royalty Income
Dollars in millions	2024		2023		2024		2023		2024		2023
Diabetes business - royalties	$	774	$	621	$	—	$	—	$	(820)	$	(623)
Mature products and other	3		10		5		—		—		—
Total	$	777	$	631	$	5	$	—	$	(820)	$	(623)

Licensing and Other Arrangements

The following table summarizes the financial impact of Keytruda* royalties, Tecentriq* royalties, upfront licensing fees and milestones for products that have not obtained commercial approval, which are included in Other (income)/expense, net.


	Three Months Ended September 30,				Nine Months Ended September 30,
Dollars in millions	2024		2023		2024		2023
Keytruda* royalties	$	(137)	$	(315)	$	(407)	$	(878)
Tecentriq* royalties	(12)		(24)		(35)		(78)

Contingent milestone income	(13)		—		(38)		(36)
Amortization of deferred income	(12)		(12)		(36)		(39)
Other royalties and licensing income	(6)		(14)		(16)		(37)
Royalty and licensing income	$	(180)	$	(365)	$	(532)	$	(1,068)

Keytruda Patent License Agreement*

BMS and Ono are parties to a global patent license agreement with Merck related to Merck's PD-1 antibody Keytruda*. Under the agreement, Merck paid ongoing royalties on global sales of Keytruda* of 6.5% through December 31, 2023 and is obligated to pay 2.5% from January 1, 2024 through December 31, 2026. The companies also granted certain rights to each other under their respective patent portfolios pertaining to PD-1. Payments and royalties are shared between BMS and Ono on a 75/25 percent allocation, respectively, after adjusting for each party's legal fees.

Note 5. OTHER (INCOME)/EXPENSE, NET


	Three Months Ended September 30,				Nine Months Ended September 30,
Dollars in millions	2024		2023		2024		2023
Interest expense (Note 10)	$	505	$	280	$	1,451	$	850
Royalty and licensing income (Note 4)	(180)		(365)		(532)		(1,068)
Royalty income - divestiture (Note 4)	(284)		(217)		(820)		(623)
Investment income	(94)		(107)		(364)		(304)
Litigation and other settlements (a)	—		(61)		71		(393)
Provision for restructuring (Note 6)	78		141		558		321
Integration expenses (Note 6)	69		54		214		180
Equity investment (gains)/losses (Note 9)	(12)		—		(221)		213
Acquisition expense (Note 4)	—		—		50		—


Intangible asset impairment	47		29		47		29
Other(b)	105		(12)		134		8
Other (income)/expense, net	$	234	$	(258)	$	588	$	(787)

(a) Includes $90 million of income related to the Eisai collaboration termination incurred during the nine months ended September 30, 2024 and $400 million of income related to Nimbus' TYK2 program change of control provision incurred during the nine months ended September 30, 2023.

(b) Includes pension settlement charges of $100 million during the three months ended September 30, 2024 and $119 million during the nine months ended September 30, 2024 incurred in connection with the termination of the Bristol-Myers Squibb Puerto Rico, Inc. Retirement Income pension plan.

Litigation and Other Settlements

BeiGene Settlement

In August 2023, BMS and BeiGene, Ltd. ("BeiGene") entered into an agreement that terminated all contractual relationships and settled all on-going disputes and claims between the parties, including those related to the Abraxane license and supply agreements and related arbitration proceedings that were previously disclosed. As part of this agreement, BMS agreed to transfer 23.3 million of BeiGene ordinary shares of common stock held under a share subscription agreement back to BeiGene resulting in $322 million of expense that was included in Other (income)/expense, net during the three and nine months ended September 30, 2023. The expense was determined based on the closing price of the shares on the date of the transfer.

AstraZeneca Settlement

In July 2023, BMS entered into an agreement with AstraZeneca to settle all outstanding claims between the parties in the CTLA-4 litigation and the two PD-L1 antibody litigations. AstraZeneca is to pay an aggregate of $560 million to BMS in four payments through September 2026, which would be subject to sharing arrangements with Ono and Dana-Farber. BMS's share is approximately $418 million, of which the net present value of $384 million was reflected in Other (income)/expense during the three and nine months ended September 30, 2023.

Note 6. RESTRUCTURING

2023 Restructuring Plan

In 2023, BMS commenced a restructuring plan to accelerate the delivery of medicines to patients by evolving and streamlining its enterprise operating model in key areas, such as R&D, manufacturing, commercial and other functions, to ensure its operating model supports and is appropriately aligned with the Company’s strategy to invest in key priorities. These changes primarily include (i) transforming R&D operations to accelerate pipeline delivery, (ii) enhancing our commercial operating model, and (iii) establishing a more responsive manufacturing network and expanding our cell therapy manufacturing capabilities. Consistent with our prioritization and efficiency goals communicated earlier this year, BMS continues to execute on strategic productivity initiatives through portfolio prioritization and management of our operating costs. Total expected restructuring costs under the 2023 Restructuring Plan to be incurred through 2026 are approximately $1.5 billion. These costs consist primarily of employee termination costs, and to a lesser extent, site exit costs, including impairment and accelerated depreciation of property, plant and equipment.

Celgene and Other Acquisition Plans

Restructuring and integration plans were initiated to realize expected cost synergies resulting from cost savings and avoidance from the acquisitions of Celgene (2019), Turning Point (2022), Mirati (2024), RayzeBio (2024) and Karuna (2024). For these plans, the remaining charges of approximately $350 million consist primarily of employee termination costs, IT system integration costs, and to a lesser extent, site exit costs, including impairment and accelerated depreciation of property, plant and equipment.

The following provides the charges related to restructuring initiatives by type of cost:


	Three Months Ended September 30,				Nine Months Ended September 30,
Dollars in millions	2024		2023		2024		2023
2023 Restructuring Plan	$	180	$	149	$	512	$	380
Celgene and Other Acquisition Plans	83		131		420		269
Total charges	$	263	$	280	$	932	$	649

Employee termination costs	$	77	$	135	$	554	$	309
Other termination costs	1		6		4		12
Provision for restructuring	78		141		558		321
Integration expenses	69		54		214		180
Accelerated depreciation	22		15		56		28
Asset impairments (a)	93		70		95		120
Other shutdown costs	1		—		9		—
Total charges	$	263	$	280	$	932	$	649

Cost of products sold	$	88	$	16	$	105	$	53
Marketing, selling and administrative	7		65		19		85
Research and development	21		4		36		10
Other (income)/expense, net	147		195		772		501
Total charges	$	263	$	280	$	932	$	649

(a) Includes $87 million for a site impairment incurred during the three months ended September 30, 2024 and a $65 million impairment charge for a facility lease during the three months ended September 30, 2023.

The following summarizes the charges and spending related to restructuring plan activities:


	Nine Months Ended September 30,
Dollars in millions	2024		2023
Beginning balance	$	188	$	47
Provision for restructuring	558		321
Foreign currency translation and other	—		(3)
Payments	(432)		(142)
Ending balance	$	314	$	223

Note 7. INCOME TAXES


	Three Months Ended September 30,						Nine Months Ended September 30,
Dollars in millions	2024			2023			2024			2023
Earnings/(Loss) before income taxes	$	1,676		$	2,137		$	(8,554)		$	6,766
Income tax provision	461			203			455			488
Effective tax rate	27.5		%	9.5		%	(5.3)		%	7.2		%

Provision for income taxes in interim periods is determined based on the estimated annual effective tax rates and the tax impact of discrete items that are reflected immediately. The effective tax rate for the three months ended September 30, 2024 was primarily impacted by changes in previously estimated annual effective tax rates resulting from jurisdictional earnings mix.

The effective tax rate for the nine months ended September 30, 2024 was impacted by a $12.1 billion one-time, non-tax deductible charge for the acquisition of Karuna, as well as the release of income tax reserves of $644 million related to the resolution of Celgene's 2017-2019 IRS audit and jurisdictional earnings mix resulting from amortization of acquired intangible assets.

The effective tax rate during the three months ended September 30, 2023 was primarily impacted by the Section 174 guidance regarding deductibility of certain non-U.S. research and development expenses. The revised guidance resulted in a reduction of previously estimated income taxes for 2022, which was reflected in the third quarter of 2023, as well as a reduction in the estimated annual effective rates for 2023. Previously estimated income taxes for 2022 were reduced by approximately $240 million upon finalization of the U.S. Federal tax return primarily due to the aforementioned revised Section 174 guidance that was issued in the third quarter of 2023.

In addition to the above mentioned impact of the Section 174 guidance, the effective tax rate during the nine months ended September 30, 2023 was impacted by a $656 million deferred income tax benefit following the receipt of a non-U.S. tax ruling regarding the deductibility of a statutory impairment of subsidiary investment, jurisdictional earnings mix resulting from amortization of acquired intangible assets, equity investment losses, litigation and other settlements, as well as releases of income tax reserves of $89 million related to the resolution of Celgene's 2009-2011 IRS audit.

Additional changes to the effective tax rate may occur in future periods due to various reasons, including changes to the estimated pretax earnings mix and tax reserves and revised interpretations or changes to the tax legislation code.

During the nine months ended September 30, 2024 and 2023, income tax payments were $3.1 billion and $4.1 billion, including $799 million and $567 million, respectively, for the transition tax following the TCJA enactment.

BMS is currently under examination by a number of tax authorities that proposed or are considering proposing material adjustments to tax positions for issues such as transfer pricing, certain tax credits and the deductibility of certain expenses. As previously disclosed, BMS received several notices of proposed adjustments from the IRS related to transfer pricing and other tax issues for the 2008 to 2012 tax years. BMS disagrees with the IRS's positions and continues to work cooperatively with the IRS to resolve these issues. In the fourth quarter of 2022, BMS entered the IRS administrative appeals process to resolve these matters. Timing of the final resolution of these complex matters is uncertain and could have a material impact on BMS's consolidated financial statements.

It is reasonably possible that the amount of unrecognized tax benefits as of September 30, 2024 could decrease in the range of approximately $90 million to $130 million in the next twelve months as a result of the settlement of certain tax audits and other events. The expected change in unrecognized tax benefits may result in the payment of additional taxes, adjustment of certain deferred taxes and/or recognition of tax benefits.

It is reasonably possible that new issues will be raised by tax authorities that may increase unrecognized tax benefits, however, an estimate of such increases cannot reasonably be made at this time. BMS believes that it has adequately provided for all open tax years by jurisdiction.

Note 8. EARNINGS/(LOSS) PER SHARE


	Three Months Ended September 30,				Nine Months Ended September 30,
Dollars in millions, except per share data	2024		2023		2024		2023
Net earnings/(loss) attributable to BMS	$	1,211	$	1,928	$	(9,020)	$	6,263

Weighted-average common shares outstanding – basic	2,028		2,057		2,026		2,083
Incremental shares attributable to share-based compensation plans	3		7		—		10
Weighted-average common shares outstanding – diluted	2,031		2,064		2,026		2,093

Earnings/(loss) per common share
Basic	$	0.60	$	0.94	$	(4.45)	$	3.01
Diluted	0.60		0.93		(4.45)		2.99

The total number of potential shares of common stock excluded from the diluted (loss)/earnings per common share computation because of the antidilutive impact was 25 million and 41 million for the three and nine months ended September 30, 2024, respectively, and not material for the three and nine months ended September 30, 2023.

Note 9. FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS

Financial assets and liabilities measured at fair value on a recurring basis are summarized below:


	September 30, 2024						December 31, 2023
Dollars in millions	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Cash and cash equivalents
Money market and other securities	$	—	$	5,589	$	—	$	—	$	8,489	$	—
Marketable debt securities
Certificates of deposit	—		18		—		—		609		—
Commercial paper	—		—		—		—		92		—
Corporate debt securities	—		483		—		—		460		—
U.S. Treasury securities	—		27		—		—		19		—
Derivative assets	—		271		—		—		219		—
Equity investments	600		88		—		318		141		—
Derivative liabilities	—		173		—		—		160		—
Contingent consideration liability
Contingent value rights(a)	2		—		248		4		—		—
Other acquisition related contingent consideration	—		—		—		—		—		8

(a) Includes the fair value of contingent value rights associated with the Mirati acquisition as further described in "—Note 4. Acquisitions, Divestitures, Licensing and Other Arrangements." The fair value of the contingent value rights was estimated using a probability-weighted expected return method.

As further described in "Item 8. Financial Statements and Supplementary Data—Note 9. Financial Instruments and Fair Value Measurements" in the Company's 2023 Form 10-K, the Company's fair value estimates use inputs that are either (1) quoted prices for identical assets or liabilities in active markets (Level 1 inputs); (2) observable prices for similar assets or liabilities in active markets or for identical or similar assets or liabilities in markets that are not active (Level 2 inputs); or (3) unobservable inputs (Level 3 inputs). The fair value of Level 2 equity investments is adjusted for characteristics specific to the security and is not adjusted for contractual sale restrictions. Equity investments subject to contractual sale restrictions were not material as of September 30, 2024 and December 31, 2023.

Marketable Debt Securities

The amortized cost for marketable debt securities approximates its fair value and these securities mature within five years as of September 30, 2024, and four years as of December 31, 2023.

Equity Investments

The following summarizes the carrying amount of equity investments:


Dollars in millions	September 30, 2024		December 31, 2023
Equity investments with RDFV	$	688	$	459
Equity investments without RDFV	841		698
Limited partnerships and other equity method investments	578		542
Total equity investments	$	2,107	$	1,699

The following summarizes the activity related to equity investments. Changes in fair value of equity investments are included in Other (income)/expense, net.


	Three Months Ended September 30,				Nine Months Ended September 30,
Dollars in millions	2024		2023		2024		2023
Equity investments with RDFV
Net (gain)/loss recognized	$	(33)	$	15	$	(155)	$	203
Less: net (gain)/loss recognized on investments sold	(3)		(86)		(2)		2
Net unrealized (gain)/loss recognized on investments still held	(30)		101		(153)		201

Equity investments without RDFV
Upward adjustments	(15)		(3)		(36)		(9)
Net realized (gain)/loss recognized on investments sold	—		—		(36)		—
Impairments and downward adjustments	13		6		42		6

Limited partnerships and other equity method investments
Equity in net loss/(income) of affiliates	23		(18)		(36)		13

Total equity investment (gains)/losses	$	(12)	$	—	$	(221)	$	213

Cumulative upwards adjustments and cumulative impairments and downward adjustments based on observable price changes in equity investments without RDFV still held as of September 30, 2024 were $220 million and $98 million, respectively.

Qualifying Hedges and Non-Qualifying Derivatives

Cash Flow Hedges

BMS enters into foreign currency forward and purchased local currency put option contracts (foreign exchange contracts) to hedge certain forecasted intercompany inventory sales, third party sales and certain other foreign currency transactions. The objective of these foreign exchange contracts is to reduce variability caused by changes in foreign exchange rates that would affect the U.S. dollar value of future cash flows derived from foreign currency denominated sales, primarily the euro and Japanese yen. The fair values of these derivative contracts are recorded as either assets (gain positions) or liabilities (loss positions) in the consolidated balance sheets. Changes in fair value for these foreign exchange contracts, which are designated as cash flow hedges, are temporarily recorded in Accumulated other comprehensive loss ("AOCL") and reclassified to net earnings when the hedged item affects earnings (typically within the next 24 months). As of September 30, 2024, assuming market rates remain constant through contract maturities, BMS expects to reclassify pretax losses of $23 million into Cost of products sold for our foreign exchange contracts out of AOCL during the next 12 months. The notional amount of outstanding foreign currency exchange contracts was primarily $4.1 billion for the euro contracts and $1.2 billion for Japanese yen contracts as of September 30, 2024.

BMS also enters into cross-currency swap contracts to hedge exposure to foreign currency exchange rate risk associated with its long-term debt denominated in euros. These contracts convert interest payments and principal repayment of the long-term debt to U.S. dollars from euros and are designated as cash flow hedges. The unrealized gains and losses on these contracts are reported in AOCL and reclassified to Other (income)/expense, net, in the same periods during which the hedged debt affects earnings. The notional amount of cross-currency swap contracts associated with long-term debt denominated in euros was $1.2 billion as of September 30, 2024.

In January 2024, BMS entered into forward interest rate contracts of a total notional value of $5.0 billion to hedge future interest rate risk associated with the unsecured senior notes issued in February 2024. The forward interest rate contracts were designated as cash flow hedges and terminated upon the issuance of the unsecured senior notes. The $131 million gain on the transaction was included in Other Comprehensive (Loss)/Income and is amortized as a reduction to interest expense over the term of the related debt. Amounts expected to be recognized during the subsequent 12 months on forward interest rate contracts are not material.

Cash flow hedge accounting is discontinued when the forecasted transaction is no longer probable of occurring within 60 days after the originally forecasted date or when the hedge is no longer effective. Assessments to determine whether derivatives designated as qualifying hedges are highly effective in offsetting changes in the cash flows of hedged items are performed at inception and on a quarterly basis. The earnings impact related to discontinued cash flow hedges and hedge ineffectiveness was not material during all periods presented. Foreign currency exchange contracts not designated as a cash flow hedge offset exposures in certain foreign currency denominated assets, liabilities and earnings. Changes in the fair value of these derivatives are recognized in earnings as they occur.

Net Investment Hedges

Cross-currency swap contracts and foreign currency forward contracts of $1.5 billion as of September 30, 2024 are designated to hedge currency exposure of BMS's net investment in its foreign subsidiaries. Contract fair value changes are recorded in the foreign currency translation component of AOCL with a related offset in derivative asset or liability in the consolidated balance sheets. The notional amount of outstanding cross-currency swap and foreign currency forward contracts was primarily attributed to the Japanese yen of $713 million and euro of $721 million as of September 30, 2024.

In 2023, the Company de-designated its remaining net investment hedge in debt denominated in euros of €375 million. The related net investment hedge was entered into to hedge euro currency exposures of the net investment in certain foreign affiliates and was recognized in Long-term debt. The effective portion of foreign exchange gain or loss on the remeasurement of debt denominated in euros was included in the foreign currency translation component of AOCL with the related offset in Long-term debt.

During the three and nine months ended September 30, 2024, the amortization of gains related to the portion of our net investment hedges that was excluded from the assessment of effectiveness was not material.

Fair Value Hedges

Fixed to floating interest rate swap contracts are designated as fair value hedges and used as an interest rate risk management strategy to create an appropriate balance of fixed and floating rate debt. The contracts and underlying debt for the hedged benchmark risk are recorded at fair value. Gains or losses resulting from changes in fair value of the underlying debt attributable to the hedged benchmark interest rate risk are recorded in interest expense with an associated offset to the carrying value of debt. Since the specific terms and notional amount of the swap are intended to align with the debt being hedged, all changes in fair value of the swap are recorded in interest expense with an associated offset to the derivative asset or liability in the consolidated balance sheets. As a result, there was no net impact in earnings. If the underlying swap is terminated prior to maturity, then the fair value adjustment to the underlying debt is amortized as a reduction to interest expense over the remaining term of the debt.

Derivative cash flows, with the exception of net investment hedges, are principally classified in the operating section of the consolidated statements of cash flows, consistent with the underlying hedged item. Cash flows related to net investment hedges are classified in investing activities.

The following table summarizes the fair value and the notional values of outstanding derivatives:


	September 30, 2024								December 31, 2023
	Asset(a)				Liability(b)				Asset(a)				Liability(b)
Dollars in millions	Notional		Fair Value		Notional		Fair Value		Notional		Fair Value		Notional		Fair Value
Designated as cash flow hedges
Foreign currency exchange contracts	$	5,246	$	110	$	1,193	$	(41)	$	4,772	$	130	$	1,971	$	(66)
Cross-currency swap contracts	1,210		53		—		—		1,210		50		—		—
Designated as net investment hedges
Foreign currency exchange contracts	378		5		448		(7)		—		—		215		(8)
Cross-currency swap contracts	308		3		400		(29)		—		—		747		(43)
Designated as fair value hedges
Interest rate swap contracts	3,500		19		255		(8)		2,500		3		1,755		(14)
Not designated as hedges
Foreign currency exchange contracts	4,468		76		5,180		(88)		906		20		1,250		(29)
Total return swap contracts (c)	$	455	$	5	$	—	$	—	$	401	$	16	$	—	$	—

(a) Included in Other current assets and Other non-current assets.

(b) Included in Other current liabilities and Other non-current liabilities.

The following table summarizes the financial statement classification and amount of (gain)/loss recognized on hedges:


	Three Months Ended September 30, 2024				Nine Months Ended September 30, 2024
Dollars in millions	Cost of products sold		Other (income)/expense, net		Cost of products sold		Other (income)/expense, net
Foreign currency exchange contracts	$	(3)	$	7	$	(77)	$	(46)
Cross-currency swap contracts	—		(55)		—		(19)
Interest rate swap contracts	—		4		—		11
Forward interest rate contracts	—		(1)		—		(3)


	Three Months Ended September 30, 2023				Nine Months Ended September 30, 2023
Dollars in millions	Cost of products sold		Other (income)/expense, net		Cost of products sold		Other (income)/expense, net
Foreign currency exchange contracts	$	(51)	$	(40)	$	(261)	$	(100)
Cross-currency swap contracts	—		26		—		(2)
Interest rate swap contracts	—		—		—		(7)

The following table summarizes the effect of derivative and non-derivative instruments designated as hedges in Other comprehensive income:


	Three Months Ended September 30,				Nine Months Ended September 30,
Dollars in millions	2024		2023		2024		2023
Derivatives designated as cash flow hedges
Foreign exchange contracts gain/(loss):
Recognized in Other comprehensive (loss)/income	$	(195)	$	173	$	46	$	226
Reclassified to Cost of products sold	(3)		(51)		(77)		(261)
Cross-currency swap contracts gain/(loss):
Recognized in Other comprehensive (loss)/income	36		(23)		2		5
Reclassified to Other (income)/expense, net	(53)		35		(12)		26
Forward interest rate contract gain/(loss):
Recognized in Other comprehensive (loss)/income	—		—		131		—
Reclassified to Other (income)/expense, net	(1)		—		(3)		—
Derivatives designated as net investment hedges
Cross-currency swap contracts gain/(loss):
Recognized in Other comprehensive (loss)/income	(41)		59		9		94
Foreign exchange contracts gain/(loss):
Recognized in Other comprehensive (loss)/income	(75)		18		(34)		18
Non-derivatives designated as net investment hedges
Non-U.S. dollar borrowings gain/(loss):
Recognized in Other comprehensive (loss)/income	—		—		—		(10)

Note 10. FINANCING ARRANGEMENTS

Short-term debt obligations include:


Dollars in millions	September 30, 2024		December 31, 2023

Non-U.S. short-term financing obligations	$	205	$	170
Current portion of Long-term debt	873		2,873
Other	—		76
Short-term debt obligations	$	1,078	$	3,119

BMS may issue a maximum of $7.0 billion of unsecured notes with maturities of not more than 365 days from the date of issuance under its commercial paper program. BMS issued $3.0 billion of commercial paper during the first quarter of 2024, and such amount was fully repaid by the end of the third quarter of 2024.

Long-term debt and the current portion of Long-term debt include:


Dollars in millions	September 30, 2024		December 31, 2023
Principal value	$	49,025	$	38,886
Adjustments to principal value:
Fair value of interest rate swap contracts	11		(11)
Unamortized basis adjustment from swap terminations	74		82
Unamortized bond discounts and issuance costs	(398)		(303)
Unamortized purchase price adjustments of Celgene debt	835		872
Total	$	49,547	$	39,526

Current portion of Long-term debt	$	873	$	2,873
Long-term debt	48,674		36,653
Total	$	49,547	$	39,526

The fair value of Long-term debt was $47.9 billion as of September 30, 2024 and $36.7 billion as of December 31, 2023 valued using Level 2 inputs, which are based upon the quoted market prices for the same or similar debt instruments. The fair value of Short-term debt obligations approximates the carrying value due to the short maturities of the debt instruments.

During the first quarter of 2024, BMS issued an aggregate principal amount of $13.0 billion of unsecured senior notes ("2024 Senior Unsecured Notes"), with proceeds, net of discount and loan issuance costs, of $12.9 billion, consisting of:


	Principal Amount (in millions)
Floating rate notes due 2026(a)	$	500
4.950% Notes due 2026	1,000
4.900% Notes due 2027	1,000
4.900% Notes due 2029	1,750
5.100% Notes due 2031	1,250
5.200% Notes due 2034	2,500
5.500% Notes due 2044	500
5.550% Notes due 2054	2,750
5.650% Notes due 2064	1,750
Total	$	13,000

(a) As of September 30, 2024, floating rate equals SOFR+0.49%.

The Company used the net proceeds from this offering to partially fund the acquisitions of RayzeBio and Karuna (see "—Note 4. Acquisitions, Divestitures, Licensing and Other Arrangements" for further information) and used the remaining net proceeds for general corporate purposes. In connection with the issuance of the 2024 Senior Unsecured Notes, the Company terminated the $10.0 billion 364-day senior unsecured delayed draw term loan facility, which was entered into in February 2024 to provide bridge financing for the RayzeBio and Karuna acquisitions.

During the nine months ended September 30, 2024, $2.5 billion 2.900% Notes and $395 million 3.625% Notes matured and were repaid.

During the nine months ended September 30, 2023, $1.9 billion of debt matured and was repaid, including $750 million 2.750% Notes, $890 million 3.250% Notes and $239 million 7.150% Notes.

Interest payments were $1.4 billion and $932 million for the nine months ended September 30, 2024 and 2023, respectively, net of amounts related to interest rate swap contracts.

Credit Facilities

As of September 30, 2024, BMS had a five-year $5.0 billion revolving credit facility expiring in January 2029, extendable annually by one year with the consent of the lenders and a $2.0 billion 364-day revolving credit facility expiring in January 2025. The facilities provide for customary terms and conditions with no financial covenants and are used to provide backup liquidity for our commercial paper borrowings. No borrowings were outstanding under the revolving credit facilities as of September 30, 2024 and December 31, 2023.

Note 11. RECEIVABLES


Dollars in millions	September 30, 2024		December 31, 2023
Trade receivables	$	10,092	$	9,551
Less: charge-backs and cash discounts	(730)		(646)
Less: allowance for expected credit loss	(45)		(23)
Net trade receivables	9,317		8,882
Alliance, royalties, VAT and other	1,709		2,039
Receivables	$	11,026	$	10,921

Non-U.S. receivables sold on a nonrecourse basis were $387 million and $769 million for the nine months ended September 30, 2024 and 2023, respectively. Receivables from the three largest customers in the U.S. represented 72% of total trade receivables as of September 30, 2024 and December 31, 2023.

Note 12. INVENTORIES


Dollars in millions	September 30, 2024		December 31, 2023
Finished goods	$	1,080	$	663
Work in process	3,008		2,430
Raw and packaging materials	343		475
Total inventories	$	4,431	$	3,568

Inventories	$	3,332	$	2,662
Other non-current assets	1,099		906

Note 13. PROPERTY, PLANT AND EQUIPMENT


Dollars in millions	September 30, 2024		December 31, 2023
Land	$	161	$	162
Buildings	6,470		6,495
Machinery, equipment and fixtures	3,741		3,717
Construction in progress	1,367		1,075
Gross property, plant and equipment	11,739		11,449
Less accumulated depreciation	(4,836)		(4,803)
Property, plant and equipment	$	6,903	$	6,646

Depreciation expense was $166 million and $482 million for the three and nine months ended September 30, 2024 and $151 million and $448 million for the three and nine months ended September 30, 2023, respectively.

Note 14. GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill

The changes in the carrying amounts in Goodwill were as follows:


Dollars in millions
Balance at December 31, 2023	$	21,169
Acquisitions (Note 4)	580
Currency translation and other adjustments	2
Balance at September 30, 2024	$	21,751

Other Intangible Assets

Other intangible assets consisted of the following:


	Estimated Useful Lives		September 30, 2024									December 31, 2023
Dollars in millions		Gross carrying amounts			Accumulated amortization			Other intangible assets, net			Gross carrying amounts			Accumulated amortization			Other intangible assets, net
R&D technology(a)	6 years		$	1,980		$	(193)		$	1,787		$	—		$	—		$	—
Acquired marketed product rights(a)	3 – 15 years		63,435			(47,048)			16,387			63,076			(40,184)			22,892
Capitalized software	3 – 10 years		1,529			(1,114)			415			1,497			(1,027)			470
IPRD(a)			8,375			—			8,375			3,710			—			3,710
Total			$	75,319		$	(48,355)		$	26,964		$	68,283		$	(41,211)		$	27,072

(a) Includes assets acquired in connection with Mirati and RayzeBio acquisitions, as further described in "—Note 4. Acquisitions, Divestitures, Licensing and Other Arrangements."

Amortization expense of Other intangible assets was $2.4 billion and $7.3 billion during the three and nine months ended September 30, 2024 and $2.3 billion and $6.9 billion during the three and nine months ended September 30, 2023, respectively.

The other intangible assets impairments were as follows (dollars in millions):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024			2023
Cost of goods sold	$	—	$	60	$	280	(a)	$	80
Research and development	—		—		590		(b)	—
Other income/(expense)	47		29		47			29
Total	$	47	$	89	$	917		$	109

(a) Impairment relates to Inrebic, which resulted from lower revised cash flow projections. The charge represented a partial impairment based on the asset's carrying value over its estimated fair value using discounted cash flow projections.

(b) Impairment relates to alnuctamab, which resulted from portfolio prioritization. The charge represented a full write-down of the asset.

Note 15. SUPPLEMENTAL FINANCIAL INFORMATION


Dollars in millions	September 30, 2024		December 31, 2023
Income taxes	$	3,476	$	3,927
Research and development	793		723
Contract assets	393		416

Restricted cash(a)	2		55
Other	959		786
Other current assets	$	5,623	$	5,907


Dollars in millions	September 30, 2024		December 31, 2023
Equity investments (Note 9)	$	2,107	$	1,699
Operating leases	1,348		1,390
Inventories (Note 12)	1,099		906
Pension and postretirement	225		284
Research and development	363		413
Restricted cash(a)	1		—
Receivables and convertible notes	422		436
Other	479		242
Other non-current assets	$	6,044	$	5,370

(a) Cash is restricted when withdrawal or general use is contractually or legally restricted. As of September 30, 2023, restricted cash of $54 million was included in Cash, cash equivalents and restricted cash in the consolidated statement of cash flows.


Dollars in millions	September 30, 2024		December 31, 2023
Rebates and discounts	$	9,608	$	7,680
Income taxes	1,489		1,371

Employee compensation and benefits	1,277		1,291
Research and development	1,300		1,257
Dividends	1,217		1,213
Interest	512		349
Royalties	451		465
Operating leases	165		162

Other	2,072		2,096
Other current liabilities	$	18,091	$	15,884


Dollars in millions	September 30, 2024		December 31, 2023
Income taxes	$	1,543	$	3,288
Pension and postretirement	447		480
Operating leases	1,483		1,530
Deferred income	247		300
Deferred compensation	477		427
Contingent value rights (Note 9)	248		—
Other	283		396
Other non-current liabilities	$	4,728	$	6,421

Note 16. EQUITY

The following table summarizes changes in equity during the nine months ended September 30, 2024:


	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, 2023	2,923	$	292	$	45,684	$	(1,546)	$	28,766	902	$	(43,766)	$	55
Net (loss)/earnings	—	—		—		—		(11,911)		—	—		3
Other comprehensive income/(loss)	—	—		—		146		—		—	—		—
Cash dividends declared $0.60 per share	—	—		—		—		(1,215)		—	—		—

Stock compensation	—	—		(29)		—		—		(6)	69		—
Balance at March 31, 2024	2,923	$	292	$	45,655	$	(1,400)	$	15,640	896	$	(43,697)	$	58
Net earnings	—	—		—		—		1,680		—	—		4
Other comprehensive income/(loss)	—	—		—		(56)		—		—	—		—
Cash dividends declared $0.60 per share	—	—		—		—		(1,217)		—	—		—

Stock compensation	—	—		111		—		—		—	7		—
Distributions	—	—		—		—		—		—	—		(8)
Balance at June 30, 2024	2,923	$	292	$	45,766	$	(1,456)	$	16,103	896	$	(43,690)	$	54
Net earnings	—	—		—		—		1,211		—	—		4
Other comprehensive income/(loss)	—	—		—		(12)		—		—	—		—
Cash dividends declared $0.60 per share	—	—		—		—		(1,217)		—	—		—
Stock repurchase program	—	—		—		—		—		—	—		—
Stock compensation	—	—		130		—		—		(1)	15		—


Balance at September 30, 2024	2,923	$	292	$	45,896	$	(1,468)	$	16,097	895	$	(43,675)	$	58

The following table summarizes changes in equity during the nine months ended September 30, 2023:


	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, 2022	2,923	$	292	$	45,165	$	(1,281)	$	25,503	825	$	(38,618)	$	57
Net earnings	—	—		—		—		2,262		—	—		5
Other comprehensive income/(loss)	—	—		—		(87)		—		—	—		—
Cash dividends declared $0.57 per share	—	—		—		—		(1,197)		—	—		—
Share repurchase program	—	—		—		—		—		4	(250)		—
Stock compensation	—	—		(25)		—		—		(6)	60		—

Balance at March 31, 2023	2,923	$	292	$	45,140	$	(1,368)	$	26,568	823	$	(38,808)	$	62
Net earnings	—	—		—		—		2,073		—	—		4
Other comprehensive income/(loss)	—	—		—		(19)		—		—	—		—
Cash dividends declared $0.57 per share	—	—		—		—		(1,192)		—	—		—
Share repurchase program	—	—		—		—		—		13	(911)		—
Stock compensation	—	—		159		—		—		(2)	39		—
Distributions	—	—		—		—		—		—	—		(9)
Balance at June 30, 2023	2,923	$	292	$	45,299	$	(1,387)	$	27,449	834	$	(39,680)	$	57
Net earnings	—	—		—		—		1,928		—	—		7
Other comprehensive income/(loss)	—	—		—		101		—		—	—		—
Cash dividends declared $0.57 per share	—	—		—		—		(1,159)		—	—		—
Share repurchase program	—	—		(600)		—		—		56	(3,433)		—
Stock compensation	—	—		146		—		—		(1)	27		—
Convertible debt	—	—		4		—		—		—	11		—
Balance at September 30, 2023	2,923	$	292	$	44,849	$	(1,286)	$	28,218	889	$	(43,075)	$	64

During the third quarter of 2023, BMS entered into accelerated share repurchase ("ASR") agreements to repurchase an aggregate amount of $4.0 billion of the Company's common stock. Approximately 56 million shares of common stock (85% of the 4.0 billion aggregate repurchase price) were received by BMS and included in treasury stock as of September 30, 2023. In addition, as part of its share repurchase program, BMS repurchased 17 million shares of its common stock for $1.2 billion during the nine months ended September 30, 2023.

The following table summarizes the changes in Other comprehensive income by component:


	Three Months Ended September 30, 2024						Nine Months Ended September 30, 2024
Dollars in millions	Pretax		Tax		After Tax		Pretax		Tax		After Tax
Derivatives qualifying as cash flow hedges
Recognized in other comprehensive income/(loss)	$	(159)	$	26	$	(133)	$	179	$	(33)	$	146
Reclassified to net earnings(a)	(58)		13		(45)		(93)		14		(79)
Derivatives qualifying as cash flow hedges	(217)		39		(178)		86		(19)		67

Pension and postretirement benefits
Actuarial gains/(losses)	4		—		4		(89)		22		(67)
Amortization(b)	4		(1)		3		7		(1)		6
Settlements(b)	100		(7)		93		119		(9)		110
Pension and postretirement benefits	108		(8)		100		37		12		49

Marketable debt securities
Unrealized gains/(losses)	7		(2)		5		4		(1)		3

Foreign currency translation	34		27		61		(47)		6		(41)

Other comprehensive income/(loss)	$	(68)	$	56	$	(12)	$	80	$	(2)	$	78


	Three Months Ended September 30, 2023						Nine Months Ended September 30, 2023
Dollars in millions	Pretax		Tax		After Tax		Pretax		Tax		After Tax
Derivatives qualifying as cash flow hedges
Recognized in other comprehensive income/(loss)	$	150	$	(18)	$	132	$	231	$	(31)	$	200
Reclassified to net earnings(a)	(16)		(2)		(18)		(235)		28		(207)
Derivatives qualifying as cash flow hedges	134		(20)		114		(4)		(3)		(7)

Pension and postretirement benefits
Actuarial gains/(losses)	3		(1)		2		(10)		1		(9)




Marketable debt securities
Unrealized gains/(losses)	(3)		1		(2)		(3)		1		(2)

Foreign currency translation	4		(17)		(13)		35		(22)		13

Other comprehensive income/(loss)	$	138	$	(37)	$	101	$	18	$	(23)	$	(5)

(a)Included in Cost of products sold and Other (income)/expense, net. Refer to "—Note 9. Financial Instruments and Fair Value Measurements" for further information.

(b)Included in Other (income)/expense, net.

The accumulated balances related to each component of Other comprehensive (loss)/income, net of taxes, were as follows:


Dollars in millions	September 30, 2024		December 31, 2023
Derivatives qualifying as cash flow hedges	$	69	$	2
Pension and postretirement benefits	(689)		(738)
Marketable debt securities	5		2
Foreign currency translation(a)	(853)		(812)
Accumulated other comprehensive loss	$	(1,468)	$	(1,546)

(a)Includes net investment hedge gains of $126 million and $144 million as of September 30, 2024 and December 31, 2023, respectively.

Note 17. EMPLOYEE STOCK BENEFIT PLANS

Stock-based compensation expense was as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
Dollars in millions	2024		2023		2024		2023
Cost of products sold	$	14	$	14	$	42	$	38
Marketing, selling and administrative	53		55		154		162
Research and development	62		63		191		191

Total stock-based compensation expense	$	129	$	132	$	387	$	391

Income tax benefit(a)	$	27	$	28	$	82	$	80

(a) Income tax benefit excludes excess tax (deficiencies)/benefits from share-based compensation awards that were vested or exercised of $(4) million and $(24) million for the three and nine months ended September 30, 2024, and $1 million and $21 million for the three and nine months ended September 30, 2023, respectively.

The number of units granted and the weighted-average fair value on the grant date for the nine months ended September 30, 2024 were as follows:


Units in millions	Units	Weighted-Average Fair Value

Restricted stock units	13.3	$	47.42
Market share units	1.3	$	58.63
Performance share units	1.9	$	53.08


Dollars in millions	Restricted Stock Units		Market Share Units		Performance Share Units
Unrecognized compensation cost	$	908	$	76	$	101
Expected weighted-average period in years of compensation cost to be recognized	2.7		2.3		1.9

Note 18. LEGAL PROCEEDINGS AND CONTINGENCIES

BMS and certain of its subsidiaries are involved in various lawsuits, claims, government investigations and other legal proceedings that arise in the ordinary course of business. These claims or proceedings can involve various types of parties, including governments, competitors, customers, partners, suppliers, service providers, licensees, licensors, employees, or shareholders, among others. These matters may involve patent infringement, antitrust, securities, pricing, sales and marketing practices, environmental, commercial, contractual rights, licensing obligations, health and safety matters, consumer fraud, employment matters, product liability and insurance coverage, among others. The resolution of these matters often develops over a long period of time and expectations can change as a result of new findings, rulings, appeals or settlement arrangements. Legal proceedings that are significant or that BMS believes could become significant or material are described below.

While BMS does not believe that any of these matters, except as otherwise specifically noted below, will have a material adverse effect on its financial position or liquidity as BMS believes it has substantial claims and/or defenses in the matters, the outcomes of BMS's legal proceedings and other contingencies are inherently unpredictable and subject to significant uncertainties. There can be no assurance that there will not be an increase in the scope of one or more of these pending matters or any other or future lawsuits, claims, government investigations or other legal proceedings will not be material to BMS's financial position, results of operations or cash flows for a particular period. Furthermore, failure to successfully enforce BMS's patent rights would likely result in substantial decreases in the respective product revenues from generic competition.

Unless otherwise noted, BMS is unable to assess the outcome of the respective matters nor is it able to estimate the possible loss or range of losses that could potentially result for such matters. Contingency accruals are recognized when it is probable that a liability will be incurred and the amount of the related loss can be reasonably estimated. Developments in legal proceedings and other matters that could cause changes in the amounts previously accrued are evaluated each reporting period. For a discussion of BMS’s tax contingencies, see " —Note 7. Income Taxes."

INTELLECTUAL PROPERTY

Eliquis - Europe

Lawsuits have been filed by generic companies in various countries in Europe seeking revocation of our composition-of-matter patents and SPCs relating to Eliquis, and trials or preliminary proceedings have been held in certain of those cases.

In Belgium, BMS filed infringement proceedings against Sandoz in February 2024. A hearing date in these proceedings has been scheduled for November 2024.

In Croatia, in February 2024, the court granted BMS's request for a preliminary injunction to prohibit Teva from offering, storing or selling generic Eliquis products in Croatia. Teva appealed this decision. On July 24, 2024, Teva's appeal was rejected by the Croatian Court of Appeal.

In Finland, the court granted our request for a preliminary injunction prohibiting Teva from offering, storing or selling generic Eliquis products in Finland that have obtained price and reimbursement. A trial regarding Teva's challenge to the validity of the Finnish composition-of-matter patent and related SPC concluded on July 5, 2023. On May 22, 2024, the Finnish court held the patent to be invalid and lifted the preliminary injunction. BMS has sought permission to appeal this decision. Teva and Sandoz have both launched generic apixaban products on the Finnish market.

In France, a trial was held regarding Teva's challenge to the validity of the French composition-of-matter patent and related SPC, and a decision was issued on June 8, 2023, confirming their validity and rejecting Teva's claims. Teva has appealed the decision and a hearing of the appeal has been scheduled for November 2025.

In Ireland, the court granted our request for a preliminary injunction prohibiting Teva from making, offering, putting on the market and/or using and/or importing or stocking for the aforesaid purposes, generic Eliquis products. The trial court's preliminary injunction decision was subsequently affirmed on appeal by the Irish Court of Appeal. In a decision delivered on December 8, 2023, the Irish trial court found the Irish composition-of-matter patent and related SPC to be invalid. BMS appealed the Irish trial court's decision. On June 13, 2024, the Irish Court of Appeal entered an injunction restraining Teva from launching its generic product pending the determination of BMS's appeal of the trial court's invalidity decision.

In the Netherlands, our requests for preliminary injunctions to prevent at-risk generic launches by Sandoz, Stada and Teva prior to full trials on the validity of the Dutch composition-of-matter patent and SPC were initially denied by the lower courts. However, in a judgment issued on August 15, 2023, the Dutch Court of Appeal overturned the decisions of the lower court, issued preliminary injunctions against Sandoz, Stada and Teva and ordered those companies to recall any generic Eliquis product from the Dutch market. Trials regarding challenges brought by Sandoz and Teva, respectively, to the validity of the Dutch composition-of-matter patent and related SPC took place on October 13, 2023 and January 12, 2024. On October 30, 2024, the district court issued decisions confirming the validity of the Dutch composition-of-matter patent and SPC.

In Norway, a trial was held regarding Teva's challenge to the validity of the Norwegian composition-of-matter patent and related SPC, and a decision was issued on May 23, 2023, confirming their validity and rejecting Teva's claims. Teva appealed the decision, and on June 3, 2024, the Court of Appeal issued a decision confirming the validity of the patent and related SPC. Teva is seeking permission to appeal the decision from the Supreme Court of Norway.

In Portugal, there are patent validity and infringement proceedings pending with multiple companies seeking to market generic versions of Eliquis. A trial regarding Mylan's challenge to the validity of the Portuguese composition-of-matter patent concluded in the second quarter of 2024 and a decision is pending. In early September 2023, Teva launched a generic Eliquis product on the Portuguese market. On September 15, 2023, the Company filed a request for a preliminary injunction against Teva at the Portuguese Intellectual Property Court. The hearing of the preliminary injunction against Teva concluded in the second quarter of 2024 and a decision is pending.

In Romania, our request for a preliminary injunction against Teva was initially denied by the lower court. However, in January 2024, the Romania Court of Appeal overturned the decision of the lower court, and issued a preliminary injunction against Teva prohibiting Teva from offering, storing or selling generic Eliquis products in Romania.

In Spain, a trial regarding Teva's challenge to the validity of the Spanish composition-of-matter patent and related SPC was held on October 18-19, 2023, and in a decision delivered in January 2024, the Barcelona Commercial Court found the Spanish composition-of-matter patent and related SPC to be invalid. BMS appealed the decision of the Barcelona Commercial Court to the Barcelona Court of Appeal. In February 2024, the Madrid Commercial Court granted BMS’s preliminary injunctions against Teva, Sandoz and Normon pending determination of the appeal of the decision of the Barcelona Commercial Court. Teva sought an order from the Barcelona Commercial Court to effectively overturn the preliminary injunction. BMS then sought and was granted an order from the Madrid Commercial Court requiring Teva to comply with the preliminary injunction. The issue was referred to the Spanish Supreme Court, which on April 26, 2024 issued a judgment requiring the Madrid Commercial Court to lift the injunction in place against Teva. On July 16, 2024, the Madrid Commercial Court issued a decision maintaining the preliminary injunctions against Sandoz and Normon. In a decision dated July 18, 2024, the Barcelona Court of Appeal overturned the decision of the Barcelona Commercial Court and upheld the validity of the Spanish composition-of-matter patent and related SPC.

In Sweden, a trial was held regarding Teva's challenge to the validity of the Swedish composition-of-matter patent and related SPC, and a decision was issued on November 2, 2022, confirming their validity and rejecting Teva's claims. Teva appealed the decision, and the appeal was heard in May 2024. On June 20, 2024, the Court of Appeal issued a decision upholding the validity of the patent and related SPC.

In Switzerland, a trial was held regarding Teva's challenge to the validity of the Swiss composition-of-matter patent and related SPC, and a decision was issued on March 8, 2024, confirming their validity and rejecting Teva's claims. Teva appealed the decision, but on October 4, 2024, the Federal Supreme Court issued a decision upholding the validity of the patent and related SPC.

In the UK, Sandoz and Teva filed lawsuits seeking revocation of the UK composition-of-matter patent and related SPC. BMS subsequently filed counterclaims for infringement in both actions. A combined trial took place in February 2022, and in a judgment issued on April 7, 2022, the judge found the UK apixaban composition-of-matter patent and related SPC invalid. BMS appealed the judgment and on May 4, 2023, the Court of Appeal upheld the lower court's decision. On October 31, 2023, the UK Supreme Court rejected BMS's application to appeal. Following the first instance decision in the UK, generic manufacturers have begun marketing generic versions of Eliquis in the UK.

In Czechia, Teva filed an action seeking revocation of the Czech composition of matter patent and related SPC. On July 25, 2024, the Czech Intellectual Property Office issued a decision holding the patent and SPC to be valid. Teva has appealed this decision.

In Slovakia, Teva filed an action seeking revocation of the Slovak composition of matter patent and related SPC. On August 22, 2024, the Slovak Intellectual Property Office issued a decision holding the patent and SPC to be invalid. BMS intends to appeal the decision.

In addition to the above, challenges to the validity of the composition-of-matter patent and related SPC are pending in Denmark, Italy, Poland, Hungary, Bulgaria, Greece and Lithuania.

Generic manufacturers may seek to market generic versions of Eliquis in additional countries in Europe prior to the expiration of our patents, which may lead to additional infringement and invalidity actions involving Eliquis patents being filed in various countries in Europe.

Plavix* - Australia

Sanofi was notified that, in August 2007, GenRx Proprietary Limited ("GenRx") obtained regulatory approval of an application for clopidogrel bisulfate 75mg tablets in Australia. GenRx, formerly a subsidiary of Apotex Inc., subsequently changed its name to Apotex ("GenRx-Apotex"). In August 2007, GenRx-Apotex filed an application in the Federal Court of Australia seeking revocation of Sanofi's Australian Patent No. 597784 (Case No. NSD 1639 of 2007). Sanofi filed counterclaims of infringement and sought an injunction. On September 21, 2007, the Federal Court of Australia granted Sanofi's injunction. A subsidiary of BMS was subsequently added as a party to the proceedings. In February 2008, a second company, Spirit Pharmaceuticals Pty. Ltd., also filed a revocation suit against the same patent. This case was consolidated with the GenRx-Apotex case. On August 12, 2008, the Federal Court of Australia held that claims of Patent No. 597784 covering clopidogrel bisulfate, hydrochloride, hydrobromide, and taurocholate salts were valid. The Federal Court also held that the process claims, pharmaceutical composition claims, and claim directed to clopidogrel and its pharmaceutically acceptable salts were invalid. BMS and Sanofi filed notices of appeal in the Full Court of the Federal Court of Australia ("Full Court") appealing the holding of invalidity of the claim covering clopidogrel and its pharmaceutically acceptable salts, process claims, and pharmaceutical composition claims. GenRx-Apotex appealed. On September 29, 2009, the Full Court held all of the claims of Patent No. 597784 invalid. In March 2010, the High Court of Australia denied a request by BMS and Sanofi to hear an appeal of the Full Court decision. The case was remanded to the Federal Court for further proceedings related to damages sought by GenRx-Apotex. BMS and GenRx-Apotex settled, and the GenRx-Apotex case was dismissed. The Australian government intervened in this matter seeking maximum damages up to 449 million AUD ($310 million), plus interest, which would be split between BMS and Sanofi, for alleged losses experienced for paying a higher price for branded Plavix* during the period when the injunction was in place. BMS and Sanofi dispute that the Australian government is entitled to any damages. A trial was concluded in September 2017. In April 2020, the Federal Court issued a decision dismissing the Australian government's claim for damages. In May 2020, the Australian government appealed the Federal Court's decision and an appeal hearing concluded in February 2021. On June 26, 2023, the appeal court issued a ruling in BMS and Sanofi's favor, upholding the lower court's decision. In December 2023, the Australian government was granted leave to appeal the decision to the High Court of Australia, and the High Court held an appeal hearing on September 4-5, 2024, and a decision is pending.

Zeposia - U.S.

On October 15, 2021, Actelion Pharmaceuticals LTD and Actelion Pharmaceuticals US, INC ("Actelion") filed a complaint for patent infringement in the United States District Court for the District of New Jersey against BMS and Celgene for alleged infringement of U.S. Patent No. 10,251,867 (the "'867 Patent"). The Complaint alleges that the sale of Zeposia infringes certain claims of the '867 Patent and Actelion is seeking damages. No trial date has been scheduled.

In May and June 2024, BMS received Notice Letters from Synthon BV ("Synthon") and Apotex Inc. ("Apotex"), respectively, each notifying BMS that it has filed an ANDA containing a paragraph IV certification seeking approval of a generic version of Zeposia in the U.S. and challenging a U.S. patent listed in the Orange Book for Zeposia. In response, BMS filed patent infringement actions against Synthon and Apotex in the U.S. District Court for the District of Delaware. On August 14, 2024 and September 16, 2024, Synthon and Apotex answered their respective complaints. On September 23, 2024, the district court consolidated the Synthon and Apotex actions. No trial date has been scheduled.

PRICING, SALES AND PROMOTIONAL PRACTICES LITIGATION

Plavix* State Attorneys General Lawsuits

BMS and certain Sanofi entities are defendants in a consumer protection action brought by the attorney general of Hawaii relating to the labeling, sales and/or promotion of Plavix*. In February 2021, a Hawaii state court judge issued a decision against Sanofi and BMS, imposing penalties in the total amount of $834 million, with $417 million attributed to BMS. Sanofi and BMS appealed the decision. On March 15, 2023, the Hawaii Supreme Court issued its decision, reversing in part and affirming in part the trial court decision, vacating the penalty award and remanding the case for a new trial and penalty determination. A new bench trial concluded on October 16, 2023. On May 21, 2024, the trial court issued a new decision against Sanofi and BMS, imposing penalties in the total amount of $916 million, with $458 million attributed to BMS. Sanofi and BMS have appealed the decision.

PRODUCT LIABILITY LITIGATION

BMS is a party to various product liability lawsuits. Plaintiffs in these cases seek damages and other relief on various grounds for alleged personal injury and economic loss. As previously disclosed, in addition to lawsuits, BMS also faces unfiled claims involving its products.

Abilify*

BMS and Otsuka are co-defendants in product liability litigation related to Abilify*. Plaintiffs allege Abilify* caused them to engage in compulsive gambling and other impulse control disorders. Cases were filed in state and federal courts in the United States. Pursuant to a previously disclosed master settlement agreement and settlement related court orders, the vast majority of the cases in the United States were resolved or dismissed. Eleven inactive cases remain pending in state courts in New Jersey. There are also eleven cases pending in Canada (four class actions and seven individual injury claims), two of which are active (the certified class actions in Quebec and Ontario). A settlement in principle has recently been reached in the class actions, subject to Court approval.

SECURITIES LITIGATION

Celgene Securities Litigations

Beginning in March 2018, two putative class actions were filed against Celgene and certain of its officers in the U.S. District Court for the District of New Jersey (the "Celgene Securities Class Action"). The complaints allege that the defendants violated federal securities laws by making misstatements and/or omissions concerning (1) trials of GED-0301, (2) Celgene's 2020 outlook and projected sales of Otezla*, and (3) the NDA for Zeposia. The Court consolidated the two actions and appointed a lead plaintiff, lead counsel, and co-liaison counsel for the putative class. In February 2019, the defendants filed a motion to dismiss plaintiffs' amended complaint in full. In December 2019, the Court denied the motion to dismiss in part and granted the motion to dismiss in part (including all claims arising from alleged misstatements regarding GED-0301). Although the Court gave the plaintiff leave to re-plead the dismissed claims, it elected not to do so, and the dismissed claims are now dismissed with prejudice. In November 2020, the Court granted class certification with respect to the remaining claims. In March 2023, the Court granted the defendants leave to file a motion for summary judgment, the briefing for which was completed in June 2023. On September 8, 2023, the Court granted in part and denied in part defendants' motion for summary judgment as to the claims regarding statements made by the remaining officer defendants. As to the claims regarding Celgene’s corporate statements, the Court denied the defendants’ motion without prejudice and granted the defendants leave to re-raise the issue. On October 27, 2023, the defendants filed a motion for partial summary judgment as to Celgene’s corporate statements. On July 23, 2024, the Court granted the defendants’ motion as to individual liability for those corporate statements but reserved decision as to the company's liability, noting that another opinion would be forthcoming. On September 4, 2024, the Court granted in part, denied in part, and held in abeyance in part the defendants’ motion for summary judgment as to the Company’s liability for Celgene’s corporate statements and requested supplemental briefing as to the statements the Court did not rule on. Following supplemental briefing, the Court held a hearing on October 10, 2024, where it denied defendants' summary judgment motion as to the remaining statements at issue.

In April 2020, certain Schwab management investment companies on behalf of certain Schwab funds filed an individual action in the U.S. District Court for the District of New Jersey asserting largely the same allegations as the Celgene Securities Class Action against the same remaining defendants in that action (the "Schwab Action"). In July 2020, the defendants filed a motion to dismiss the plaintiffs' complaint in full. In March 2021, the Court granted in part and denied in part defendants' motion to dismiss consistent with its decision in the Celgene Securities Class Action.

The California Public Employees' Retirement System in April 2021 (the "CalPERS Action"); DFA Investment Dimensions Group Inc., on behalf of certain of its funds; and American Century Mutual Funds, Inc., on behalf of certain of its funds, in July 2021 (respectively, the "DFA Action" and the "American Century Action"), and GIC Private Limited in September 2021 (the "GIC Action"), filed separate individual actions in the U.S. District Court for the District of New Jersey asserting largely the same allegations as the Celgene Securities Class Action and the Schwab individual action against the same remaining defendants in those actions. In October 2021, these actions were consolidated for pre-trial proceedings with the Schwab Action. The Court also consolidated any future direct actions raising common questions of law and fact with the Schwab Action (the "Consolidated Schwab Action"). On October 2, 2023, defendants filed a motion for partial summary judgment in the Consolidated Schwab Action. The motion is fully briefed and currently pending before the Court.

No trial dates have been scheduled in any of the above Celgene Securities Litigations.

Contingent Value Rights Litigations

In June 2021, an action was filed against BMS in the U.S. District Court for the Southern District of New York asserting claims of alleged breaches of a Contingent Value Rights Agreement ("CVR Agreement") entered into in connection with the closing of BMS's acquisition of Celgene in November 2019. An entity claiming to be the successor trustee under the CVR Agreement alleged that BMS breached the CVR Agreement by allegedly failing to use "diligent efforts" to obtain FDA approval of liso-cel (Breyanzi) before a contractual milestone date, thereby allegedly avoiding a $6.4 billion potential obligation to holders of the contingent value rights governed by the CVR Agreement and by allegedly failing to permit inspection of records in response to a request by the alleged successor trustee. The plaintiff sought damages in an amount to be determined at trial and other relief, including interest and attorneys' fees. BMS disputes the allegations. BMS filed a motion to dismiss the alleged successor trustee's complaint for failure to state a claim upon which relief can be granted, which was denied on June 24, 2022. On February 2, 2024, BMS filed a motion to dismiss the complaint for lack of subject matter jurisdiction. In an opinion and order entered on September 30, 2024, the court granted BMS’s motion and dismissed the lawsuit for lack of subject matter jurisdiction without prejudice to the refiling of a new lawsuit by a properly appointed trustee. The plaintiff has appealed this order.

In October 2021, alleged former Celgene stockholders filed a complaint in the U.S. District Court for the Southern District of New York asserting claims on behalf of a putative class of Celgene stockholders who received CVRs in the BMS merger with Celgene for violations of sections 14(a) and 20(a) of the Securities Exchange Act of 1934 (the "Exchange Act") relating to the joint proxy statement. That action later was consolidated with another action filed in the same court, and a consolidated complaint thereafter was filed asserting claims on behalf of a class of CVR acquirers, whether in the BMS merger with Celgene or otherwise, for violations of sections 11, 12(a)(2), and 15 of the Securities Act of 1933 (the "Securities Act") and sections 10(b), 14(a) and 20(a) of the Exchange Act. The complaint alleged that the February 22, 2019 joint proxy statement was materially false or misleading because it failed to disclose that BMS allegedly had no intention to obtain FDA approval for liso-cel (Breyanzi) by the applicable milestone date in the CVR Agreement and that certain statements made by BMS or certain BMS officers in periodic SEC filings, earnings calls, press releases, and investor presentations between December 2019 and November 2020 were materially false or misleading for the same reason. Defendants moved to dismiss the complaint. On March 1, 2023, the Court entered an opinion and order granting defendants' motion and dismissed the complaint in its entirety. The claims under Sections 11, 12(a)(2), and 15 of the Securities Act and Section 14(a) of the Exchange Act were dismissed with prejudice. The claims under Sections 10(a) and 20(a) of the Exchange Act were dismissed with leave to file a further amended complaint, which plaintiffs filed on April 14, 2023. Defendants moved to dismiss the amended complaint and briefing on the motion was completed on June 23, 2023. In an opinion and order entered on February 29, 2024, the Court granted that motion in its entirety and dismissed the remaining claims with prejudice. On March 28, 2024, plaintiffs filed a notice of appeal. Briefing has been completed in the appeal, which is pending in the United States Court of Appeals for the Second Circuit. Oral argument took place on October 25, 2024.

In November 2021, an alleged purchaser of CVRs filed a complaint in the Supreme Court of the State of New York for New York County asserting claims on behalf of a putative class of CVR acquirers for violations of sections 11(a) and 12(a)(2) of the Securities Act of 1933. The complaint alleged that the registration statement filed in connection with the proposed merger transaction between Celgene and BMS was materially false or misleading because it failed to disclose that allegedly BMS had no intention at the time to obtain FDA approval for liso-cel (Breyanzi) by the contractual milestone date. The complaint asserted claims against BMS, the members of its board of directors at the time of the joint proxy statement, and certain BMS officers who signed the registration statement. Defendants moved to stay the action pending resolution of the federal action or, in the alternative, to dismiss the complaint and later filed a similar motion in response to an amended complaint. On February 2, 2024, the Court granted defendants’ motion and dismissed the case in its entirety. On February 29, 2024, the plaintiff filed a notice of appeal. The plaintiff’s appeal was not perfected before the deadline for doing so under applicable court rules, and therefore, the appeal is deemed to be dismissed under those rules.

In November 2021, an alleged Celgene stockholder filed a complaint in the Superior Court of New Jersey, Union County asserting claims on behalf of two separate putative classes, one of acquirers of CVRs and one of acquirers of BMS common stock, for violations of sections 11(a), 12(a)(2), and 15 of the Securities Act. The complaint alleges that the registration statement filed in connection with the proposed merger transaction between Celgene and BMS was materially false or misleading because it failed to disclose that allegedly BMS had no intention at the time to obtain FDA approval for liso-cel (Breyanzi) by the contractual milestone date. The complaint asserts claims against BMS, the members of its board of directors at the time of the joint proxy statement, certain BMS officers who signed the registration statement and Celgene's former chairman and chief executive officer. The Court had temporarily stayed the action pending resolution of the federal action, but lifted the stay on March 21, 2024, following the dismissal of the federal action. On April 4, 2024, defendants moved to dismiss the New Jersey complaint. On June 25, 2024, the Court granted defendants' motion and dismissed the complaint in its entirety without prejudice. The plaintiff filed an amended complaint on August 15, 2024. On September 30, 2024, the defendants filed a motion to dismiss the amended complaint.

No trial dates have been scheduled in any of the above CVR Litigations.

OTHER LITIGATION

IRA Litigation

On June 16, 2023, BMS filed a lawsuit against the U.S. Department of Health & Human Services and the Centers for Medicare & Medicaid Services, et al., challenging the constitutionality of the drug-pricing program in the IRA. That program requires pharmaceutical companies, like BMS, under the threat of significant penalties, to sell certain of their medicines at government-dictated prices. On August 29, 2023, the government selected Eliquis for this program. In its lawsuit, BMS argues that this program violates the Fifth Amendment, which requires the government to pay just compensation if it takes property for public use, by requiring pharmaceutical manufacturers to provide medicines to third parties at prices set by the government that necessarily fall below fair market value. BMS also argues that this program violates the First Amendment right to free speech by requiring manufacturers to state that they agree that the price set by the government is the medicine's "maximum fair price" as determined by negotiation, even though there is no true negotiation. On August 16, 2023, BMS filed a motion for summary judgment. On October 16, 2023, the government filed an opposition to BMS’s motion for summary judgment and a cross-motion for summary judgment. The court heard oral argument on the parties' summary judgment motions on March 7, 2024. On April 29, 2024, the court issued an opinion and order that denied BMS's motion for summary judgment and granted the government's cross-motion for summary judgment. BMS appealed to the United States Court of Appeals for the Third Circuit. Oral argument in the Third Circuit took place on October 30, 2024.

Thalomid and Revlimid Litigations

Beginning in November 2014, certain putative class action lawsuits were filed against Celgene in the U.S. District Court for the District of New Jersey alleging that Celgene violated various antitrust, consumer protection, and unfair competition laws by (a) allegedly securing an exclusive supply contract for the alleged purpose of preventing a generic manufacturer from securing its own supply of thalidomide active pharmaceutical ingredient, (b) allegedly refusing to sell samples of Thalomid and Revlimid brand drugs to various generic manufacturers for the alleged purpose of bioequivalence testing necessary for ANDAs to be submitted to the FDA for approval to market generic versions of these products, (c) allegedly bringing unjustified patent infringement lawsuits in order to allegedly delay approval for proposed generic versions of Thalomid and Revlimid, and/or (d) allegedly entering into settlements of patent infringement lawsuits with certain generic manufacturers that allegedly have had anticompetitive effects. The plaintiffs, on behalf of themselves and putative classes of third-party payers, sought injunctive relief and damages. The various lawsuits were consolidated into a master action for all purposes. In March 2020, Celgene reached a settlement with the class plaintiffs. In October 2020, the Court entered a final order approving the settlement and dismissed the matter. That settlement did not resolve certain claims of certain entities that opted out of the settlement, and who have since filed new suits advancing related theories. As described below, certain other consolidated or coordinated suits are pending.

In March 2019, Humana Inc. ("Humana"), which opted out of the above settlement, filed a lawsuit against Celgene in the U.S. District Court for the District of New Jersey. Humana's complaint makes largely the same claims and allegations as were made in the now settled Thalomid and Revlimid antitrust class action litigation. The complaint purports to assert claims on behalf of Humana and its subsidiaries in several capacities, including as a direct purchaser and as an indirect purchaser, and seeks, among other things, treble and punitive damages, injunctive relief and attorneys' fees and costs. In May 2019, Celgene filed a motion to dismiss Humana's complaint. In April 2022, the Court issued an order denying Celgene's motion to dismiss. That order addressed only Celgene's argument that certain of Humana's claims were barred by the statute of limitations. The Court's order did not address Celgene's other grounds for dismissal and instead directed Celgene to present those arguments in a renewed motion to dismiss following the filing of amended complaints. In May 2022, Humana filed an amended complaint against Celgene and BMS asserting the same claims based on additional factual allegations. Celgene and BMS subsequently filed a motion to dismiss Humana's amended complaint. On August 18, and September 8, 2023, the Court held argument on Celgene and BMS' motion. On June 6, 2024, the Court granted Celgene and BMS's motion to dismiss in its entirety. The Court granted Humana and the other plaintiffs referenced immediately below (other than United HealthCare Services Inc. ("UHS"), which had previously amended) leave to amend their complaints. These plaintiffs filed amended complaints on August 5, 2024.

UHS, Blue Cross Blue Shield Association ("BCBSM"), BCBSM Inc., Health Care Service Corporation ("HCSC"), Blue Cross and Blue Shield of Florida Inc., Cigna Corporation ("Cigna"), Molina Healthcare, Inc. ("Molina") and several MSP related entities (MSP Recovery Claims, Series LLC; MSPA Claims 1, LLC; MAO-MSO Recovery II, LLC, Series PMPI, a segregated series of MAO-MSO Recovery II, LLC; MSP Recovery Claims Series 44, LLC; MSP Recovery Claims PROV, Series LLC; and MSP Recovery Claims CAID, Series LLC (together, "MSP")) filed lawsuits between 2020 and 2022 making largely the same claims and allegations as were made in the now-settled class action litigation and in the Humana opt-out action. The UHS and MSP matters include additional claims related to copay assistance for Thalomid and Revlimid. These cases are now pending in the U.S. District Court for the District of New Jersey. BCBSM has voluntarily dismissed its claims. The Court's order granting Celgene and BMS's motion to dismiss in the Humana action dismissed the complaints filed by these plaintiffs as well (except as to UHS, which has already been amended). The Court granted these plaintiffs leave to amend all dismissed claims, with the exception of MSP's claims under RICO, which were dismissed with prejudice. These plaintiffs filed amended complaints on August 5, 2024.

In May 2021, Molina sued Celgene and BMS in San Francisco Superior Court. Molina's complaint makes largely the same claims and allegations as were made in the now settled class action litigation. In June 2022, the San Francisco Superior Court dismissed 63 of Molina’s claims, which Molina later reasserted in the District of New Jersey as described above, and stayed the remaining 4 claims. No activity is expected in this case until disposition of the New Jersey actions.

Certain other entities that opted out of the now‑settled class action have also filed summonses related to two actions in the Philadelphia County Court of Common Pleas in connection with the allegations made by Humana and other opt‑out entities. Those actions have been placed in deferred status pending further developments in the above opt‑out cases.

In November 2022, certain specialty pharmacies filed an action as direct purchasers against Celgene, BMS, and certain generic manufacturers in the U.S. District Court for the District of New Jersey. The action makes largely the same claims and allegations against Celgene and BMS as were made with respect to Revlimid in the now settled class action litigation, and seeks injunctive relief and damages under the Sherman Antitrust Act. Also in November 2022, a putative class of end-payor plaintiffs filed an action against Celgene, BMS, and certain generic manufacturers in the U.S. District Court for the District of New Jersey. The class complaint brings claims based on Celgene's allegedly anticompetitive settlements of Revlimid patent litigation, seeking damages under state antitrust and consumer protection laws and injunctive relief under federal antitrust law. Celgene, BMS and the generic defendants have filed consolidated motions to dismiss these two actions. The motions were fully briefed in May 2023 and administratively terminated in November 2023 pending a ruling on Celgene and BMS's motion to dismiss the Humana amended complaint. In view of the Court's dismissal decision in the Humana action described above, these plaintiffs filed amended complaints on August 5, 2024.

In October and November 2023, three healthcare systems—the Mayo Clinic, LifePoint Corporate Services, G.P. and Intermountain Health, Inc.—filed two new lawsuits against Celgene, BMS and certain generic manufacturers making largely the same claims and allegations against Celgene and BMS as were made with respect to Revlimid in the now-settled class action litigation, and seeking injunctive relief and damages under the Sherman Antitrust Act and parallel state laws. In view of the Court's dismissal decision in the Humana action described above, these plaintiffs filed amended complaints on August 5, 2024. Those actions are pending in the U.S. District Court for the District of New Jersey.

No trial dates have been scheduled in any of the above Thalomid and Revlimid Litigations.

Pomalyst Antitrust Class Action

In September 2023, certain health plan entities filed an action on behalf of a putative class of end-payor plaintiffs against Celgene, BMS, and certain generic pharmaceutical manufacturers in the U.S. District Court for the Southern District of New York. The class complaint asserts claims under federal antitrust law and state antitrust, consumer protection, and unjust enrichment laws based on allegations that Celgene and BMS engaged in anticompetitive conduct related to pomalidomide in the U.S., including by allegedly engaging in fraud before the USPTO in the acquisition of patents related to the use of pomalidomide, by filing alleged sham patent litigations against generic pharmaceutical companies seeking to market generic pomalidomide, and by entering into allegedly unlawful patent litigation settlements with certain generic pharmaceutical companies seeking to market generic pomalidomide. In December 2023, the plaintiffs filed an amended complaint that added one individual Pomalyst patient as a plaintiff, removed the generic manufacturer defendants, and added two individuals as defendants. In March 2024, one new plaintiff filed a substantially similar complaint, on behalf of the same putative class and in the same court, which was subsequently consolidated with the first action. In March 2024, BMS and its co-defendants filed motions to dismiss these actions. In September 2024, an additional plaintiff (seeking to proceed solely as a direct purchaser under the federal antitrust laws) filed a separate, substantially similar complaint. No trial dates have been scheduled.

GOVERNMENT INVESTIGATIONS

Like other pharmaceutical companies, BMS and certain of its subsidiaries are subject to extensive regulation by national, state and local authorities in the U.S. and other countries in which BMS operates. As a result, BMS, from time to time, is subject to various governmental and regulatory inquiries and investigations as well as threatened legal actions and proceedings. It is possible that criminal charges, substantial fines and/or civil penalties, could result from government or regulatory investigations.

ENVIRONMENTAL PROCEEDINGS

As previously reported, BMS is a party to several environmental proceedings and other matters, and is responsible under various state, federal and foreign laws, including CERCLA, for certain costs of investigating and/or remediating contamination resulting from past industrial activity at BMS's current or former sites or at waste disposal or reprocessing facilities operated by third parties.

CERCLA and Other Remediation Matters

With respect to CERCLA and other remediation matters for which BMS is responsible under various state, federal and international laws, BMS typically estimates potential costs based on information obtained from the U.S. Environmental Protection Agency, or counterpart state or foreign 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 BMS accrues liabilities when they are probable and reasonably estimable. BMS estimated its share of future costs for these sites to be $78 million as of September 30, 2024, which represents the sum of best estimates or, where no best 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). The amount includes the estimated costs for any additional probable loss associated with the previously disclosed North Brunswick Township High School Remediation Site.

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