UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

~~WASHINGTON,~~Washington, D.C. 20549

___________________________

FORM 10-Q

~~(Mark One)~~___________________________

☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934



	xFor the quarterly period ended September 30, 2021 OR ☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______ to _______ Commission File Number 001-01136 ___________________________	~~QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2017~~



	¨	~~TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO~~

~~Commission file number:~~ ~~1-1136~~

BRISTOL-MYERS SQUIBB COMPANY

(Exact name of registrant as specified in its charter)

___________________________



Delaware		22-0790350
~~Delaware~~	~~22-0790350~~
(State or other jurisdiction of incorporation or organization)	(~~I.R.S.~~I.R.S Employer Identification No.)

~~345 Park Avenue,~~430 E. 29th Street, 14FL, New York, ~~N.Y. 10154~~NY 10016

(Address of principal executive offices) (Zip Code)

(212) 546-4200

~~(212) 546-4000~~

(Registrant’s telephone number, including area ~~code)~~code)

___________________________

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.10 Par Value	BMY	New York Stock Exchange
1.000% Notes due 2025	BMY25	New York Stock Exchange
1.750% Notes due 2035	BMY35	New York Stock Exchange
Celgene Contingent Value Rights	CELG RT	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to the filing requirements for the past 90 days. Yes x☒ No ¨☐

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). Yes x☒ No ¨☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definition of ~~“accelerated filer”,~~ “large accelerated ~~filer”~~filer,” “accelerated filer,” “smaller reporting company,” and ~~“smaller reporting~~��emerging growth company” in Rule 12b-2 of the Exchange Act. ~~(Check one):~~

~~Large accelerated filer~~ x ~~Accelerated filer~~ ¨ ~~Non-accelerated filer~~ ¨ ~~Smaller reporting company~~ ¨ ~~Emerging growth company~~ ¨

Large accelerated filer ☒

Accelerated filer ☐

Non-accelerated filer ☐

Smaller reporting company ☐

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨☐ No x☒

APPLICABLE ONLY TO CORPORATE ISSUERS:

At September 30, ~~2017,~~2021, there were ~~1,636,699,696~~2,219,644,935 shares outstanding of the Registrant’s $0.10 par value common stock.

BRISTOL-MYERS SQUIBB COMPANY

INDEX TO FORM 10-Q

~~SEPTEMBER~~September 30, ~~2017~~

2021




PART I—FINANCIAL INFORMATION

Item 1.
Financial Statements:
Consolidated Statements of Earnings and Comprehensive ~~Income~~Income/(Loss)			3
Consolidated Balance Sheets			4
Consolidated Statements of Cash Flows			5
Notes to Consolidated Financial Statements			6

Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations			2132

Item 3.
Quantitative and Qualitative Disclosure About Market Risk			3453

Item 4.
Controls and Procedures			3454

PART II—OTHER INFORMATION

Item 1.
Legal Proceedings			3454

Item 1A.
Risk Factors			3454

Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds			3454

Item 6.
Exhibits			3555

Summary of Abbreviated Terms			3656
Signatures			3757

* Indicates brand names of products which are trademarks not owned by BMS. Specific trademark ownership information is included in the Exhibit ~~Index.~~Index at the end of this Quarterly Report on Form 10-Q.

PART I—FINANCIAL INFORMATION

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	2021		2020		2021		2020
Net product sales	$	11,243	$	10,197	$	33,446	$	30,555
Alliance and other revenues	381		343		954		895
Total Revenues	11,624		10,540		34,400		31,450

Cost of products sold(a)	2,291		2,502		7,584		8,863
Marketing, selling and administrative	1,788		1,706		5,336		4,940
Research and development	3,251		2,499		8,747		7,393
Amortization of acquired intangible assets	2,546		2,491		7,606		7,162
Other (income)/expense, net	(409)		(915)		(1,113)		(488)
Total Expenses	9,467		8,283		28,160		27,870

Earnings Before Income Taxes	2,157		2,257		6,240		3,580
Provision for Income Taxes	605		379		1,598		2,548
Net Earnings	1,552		1,878		4,642		1,032
Noncontrolling Interest	6		6		20		20
Net Earnings Attributable to BMS	$	1,546	$	1,872	$	4,622	$	1,012

Earnings per Common Share
Basic	$	0.70	$	0.83	$	2.08	$	0.45
Diluted	0.69		0.82		2.05		0.44

(a) Excludes amortization of acquired intangible assets.

Three Months Ended September 30, Nine Months Ended September 30,
EARNINGS 2017 2016 2017 2016
Net product sales $ 4,862
$ 4,492
$ 14,212
$ 12,888
Alliance and other revenues 392
430
1,115
1,296
Total Revenues 5,254
4,922
15,327
14,184

Cost of products sold 1,572
1,305
4,393
3,563
Marketing, selling and administrative 1,147
1,144
3,388
3,450
Research and development 1,543
1,138
4,490
3,540
Other (income)/expense (191 ) (224 ) (1,377 ) (1,198 )
Total Expenses 4,071
3,363
10,894
9,355

Earnings Before Income Taxes 1,183
1,559
4,433
4,829
Provision for Income Taxes 327
344
1,129
1,220
Net Earnings 856
1,215
3,304
3,609
Net Earnings/(Loss) Attributable to Noncontrolling Interest 11
13
(31 ) 46
Net Earnings Attributable to BMS $ 845
$ 1,202
$ 3,335
$ 3,563

Earnings per Common Share
Basic $ 0.52
$ 0.72
$ 2.02
$ 2.13
Diluted $ 0.51
$ 0.72
$ 2.02
$ 2.12

Cash dividends declared per common share $ 0.39
$ 0.38
$ 1.17
$ 1.14

CONSOLIDATED STATEMENTS OF COMPREHENSIVE ~~INCOME~~INCOME/(LOSS)

Dollars in Millions

(UNAUDITED)


														Three Months Ended September 30,				Nine Months Ended September 30,
	Three Months Ended September 30,						Nine Months Ended September 30,
COMPREHENSIVE INCOME	2017			2016			2017			2016
COMPREHENSIVE INCOME/(LOSS)													COMPREHENSIVE INCOME/(LOSS)	2021		2020		2021		2020
Net Earnings	$	856		$	1,215		$	3,304		$	3,609		Net Earnings	$	1,552	$	1,878	$	4,642	$	1,032
Other Comprehensive Income/(Loss), net of taxes and reclassifications to earnings:													Other Comprehensive Income/(Loss), net of taxes and reclassifications to earnings:
Derivatives qualifying as cash flow hedges	(1		)	4			(61		)	(126		)	Derivatives qualifying as cash flow hedges	113		(132)		399		(121)
Pension and postretirement benefits	18			72			74			(213		)	Pension and postretirement benefits	7		(4)		45		5
Available-for-sale securities	22			(8		)	41			46
Available-for-sale debt securities													Available-for-sale debt securities	(3)		(2)		(7)		7
Foreign currency translation	7			1			28			26			Foreign currency translation	(23)		(5)		(22)		(70)
Other Comprehensive Income/(Loss)	46			69			82			(267		)
Total Other Comprehensive Income/(Loss)													Total Other Comprehensive Income/(Loss)	94		(143)		415		(179)

Comprehensive Income	902			1,284			3,386			3,342			Comprehensive Income	1,646		1,735		5,057		853
Comprehensive Income/(Loss) Attributable to Noncontrolling Interest	11			13			(31		)	46
Comprehensive Income Attributable to Noncontrolling Interest													Comprehensive Income Attributable to Noncontrolling Interest	6		6		20		20
Comprehensive Income Attributable to BMS	$	891		$	1,271		$	3,417		$	3,296		Comprehensive Income Attributable to BMS	$	1,640	$	1,729	$	5,037	$	833

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

BRISTOL-MYERS SQUIBB COMPANY

CONSOLIDATED BALANCE SHEETS

Dollars in Millions ~~Except Share and Per Share Data~~

(UNAUDITED)


ASSETS	September 30, 2017			December 31, 2016			ASSETS	September 30, 2021		December 31, 2020
Current Assets:							Current Assets:
Cash and cash equivalents	$	4,644		$	4,237		Cash and cash equivalents	$	13,540	$	14,546
Marketable securities	2,478			2,113
Marketable debt securities							Marketable debt securities	2,123		1,285
Receivables	5,922			5,543			Receivables	9,245		8,501
Inventories	1,250			1,241			Inventories	2,163		2,074
Prepaid expenses and other	754			570
Other current assets							Other current assets	4,372		3,786
Total Current Assets	15,048			13,704			Total Current Assets	31,443		30,192
Property, plant and equipment	5,014			4,980			Property, plant and equipment	5,868		5,886
Goodwill	6,865			6,875			Goodwill	20,519		20,547
Other intangible assets	1,213			1,385			Other intangible assets	44,930		53,243
Deferred income taxes	2,346			2,996			Deferred income taxes	684		1,161
Marketable securities	2,526			2,719
Other assets	965			1,048
Marketable debt securities							Marketable debt securities	46		433
Other non-current assets							Other non-current assets	7,403		7,019
Total Assets	$	33,977		$	33,707		Total Assets	$	110,893	$	118,481

LIABILITIES							LIABILITIES
Current Liabilities:							Current Liabilities:
Short-term debt obligations	$	1,461		$	992		Short-term debt obligations	$	5,065	$	2,340
Accounts payable	1,699			1,664			Accounts payable	2,695		2,713
Accrued liabilities	5,418			5,271
Deferred income	647			762
Income taxes payable	213			152
Other current liabilities							Other current liabilities	13,700		14,027
Total Current Liabilities	9,438			8,841			Total Current Liabilities	21,460		19,080
Deferred income	492			547
Income taxes payable	996			973
Pension and other liabilities	1,155			1,283
Deferred income taxes							Deferred income taxes	4,956		5,407
Long-term debt	6,982			5,716			Long-term debt	39,677		48,336
Other non-current liabilities							Other non-current liabilities	7,516		7,776
Total Liabilities	19,063			17,360			Total Liabilities	73,609		80,599

Commitments and contingencies (Note 17)
Commitments and contingencies							Commitments and contingencies

EQUITY							EQUITY
Bristol-Myers Squibb Company Shareholders’ Equity:							Bristol-Myers Squibb Company Shareholders’ Equity:
Preferred stock	—			—			Preferred stock	—		—
Common stock	221			221			Common stock	292		292
Capital in excess of par value of stock	1,845			1,725			Capital in excess of par value of stock	44,292		44,325
Accumulated other comprehensive loss	(2,421		)	(2,503		)	Accumulated other comprehensive loss	(1,424)		(1,839)
Retained earnings	34,141			33,513			Retained earnings	22,625		21,281
Less cost of treasury stock	(19,003		)	(16,779		)	Less cost of treasury stock	(28,572)		(26,237)
Total Bristol-Myers Squibb Company Shareholders’ Equity	14,783			16,177			Total Bristol-Myers Squibb Company Shareholders’ Equity	37,213		37,822
Noncontrolling interest	131			170			Noncontrolling interest	71		60
Total Equity	14,914			16,347			Total Equity	37,284		37,882
Total Liabilities and Equity	$	33,977		$	33,707		Total Liabilities and Equity	$	110,893	$	118,481

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,							Nine Months Ended September 30,
	2017			2016				2021		2020
Cash Flows From Operating Activities:							Cash Flows From Operating Activities:
Net earnings	$	3,304		$	3,609		Net earnings	$	4,642	$	1,032
Adjustments to reconcile net earnings to net cash provided by operating activities:							Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization, net	592			260			Depreciation and amortization, net	8,107		7,690
Deferred income taxes	283			(500		)	Deferred income taxes	(127)		1,419
Stock-based compensation	149			149			Stock-based compensation	450		608
Impairment charges	223			75			Impairment charges	1,192		131
Pension settlements and amortization	148			122			Pension settlements and amortization	30		34
Divestiture gains and royalties	(546		)	(1,082		)	Divestiture gains and royalties	(462)		(486)
Asset acquisition charges	510			274			Asset acquisition charges	1,071		603
Equity investment gains							Equity investment gains	(1,214)		(724)
Contingent consideration fair value adjustments							Contingent consideration fair value adjustments	(510)		(597)
Other adjustments	108			(56		)	Other adjustments	168		(140)
Changes in operating assets and liabilities:							Changes in operating assets and liabilities:
Receivables	(539		)	(896		)	Receivables	(886)		(356)
Inventories	7			(107		)	Inventories	141		2,571
Accounts payable	63			(142		)	Accounts payable	19		56
Deferred income	(91		)	445
Income taxes payable	400			(183		)	Income taxes payable	(841)		(2,104)
Other	(453		)	(353		)	Other	370		960
Net Cash Provided by Operating Activities	4,158			1,615			Net Cash Provided by Operating Activities	12,150		10,697
Cash Flows From Investing Activities:							Cash Flows From Investing Activities:
Sale and maturities of marketable securities	4,296			3,674
Purchase of marketable securities	(4,434		)	(2,248		)
Sale and maturities of marketable debt securities							Sale and maturities of marketable debt securities	2,952		4,757
Purchase of marketable debt securities							Purchase of marketable debt securities	(3,408)		(3,148)
Proceeds from sales of equity investment securities							Proceeds from sales of equity investment securities	1,058		14
Capital expenditures	(801		)	(844		)	Capital expenditures	(653)		(470)
Divestiture and other proceeds	526			1,193			Divestiture and other proceeds	570		536
Acquisition and other payments	(672		)	(311		)
Net Cash Provided by/(Used in) Investing Activities	(1,085		)	1,464
Acquisition and other payments, net of cash acquired							Acquisition and other payments, net of cash acquired	(1,458)		(736)
Net Cash (Used in)/Provided by Investing Activities							Net Cash (Used in)/Provided by Investing Activities	(939)		953
Cash Flows From Financing Activities:							Cash Flows From Financing Activities:
Short-term debt obligations, net	1,198			102			Short-term debt obligations, net	(46)		(264)
Issuance of long-term debt	1,488			—

Repayment of long-term debt	(1,224		)	—			Repayment of long-term debt	(6,022)		(1,500)
Repurchase of common stock	(2,220		)	(231		)	Repurchase of common stock	(3,536)		(81)
Dividends	(1,938		)	(1,912		)	Dividends	(3,297)		(3,054)
Other	(29		)	(7		)	Other	644		265
Net Cash Used in Financing Activities	(2,725		)	(2,048		)	Net Cash Used in Financing Activities	(12,257)		(4,634)
Effect of Exchange Rates on Cash and Cash Equivalents	59			16
Increase in Cash and Cash Equivalents	407			1,047
Cash and Cash Equivalents at Beginning of Period	4,237			2,385
Cash and Cash Equivalents at End of Period	$	4,644		$	3,432
Effect of Exchange Rates on Cash, Cash Equivalents and Restricted Cash							Effect of Exchange Rates on Cash, Cash Equivalents and Restricted Cash	(48)		24
(Decrease)/Increase in Cash, Cash Equivalents and Restricted Cash							(Decrease)/Increase in Cash, Cash Equivalents and Restricted Cash	(1,094)		7,040
Cash, Cash Equivalents and Restricted Cash at Beginning of Period							Cash, Cash Equivalents and Restricted Cash at Beginning of Period	14,973		12,820
Cash, Cash Equivalents and Restricted Cash at End of Period							Cash, Cash Equivalents and Restricted Cash at End of Period	$	13,879	$	19,860

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” 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 at September 30, ~~2017~~2021 and December 31, ~~2016,~~2020, the results of operations for the three and nine months ended September 30, ~~2017~~2021 and ~~2016,~~2020, and cash flows for the nine months ended September 30, ~~2017~~2021 and ~~2016.~~2020. All intercompany balances and transactions have been eliminated. These financial statements and the related notes should be read in conjunction with the audited consolidated financial statements for the year ended December 31, ~~2016~~2020 included in the ~~2016~~2020 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.

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 sales rebate and return accruals; legal contingencies; income taxes; determining if an acquisition or divestiture is a business or an asset; and pension and postretirement benefits. Actual results may differ from estimates.Business Segment Information

Certain prior period amounts were reclassified to conform to the current period presentation. The consolidated statements of cash flows previously presented interest rate swap contract terminations and issuance of common stock as separate line items within cash flows from financing activities which are now presented as components of other financing activities. The reclassifications provide a more concise financial statement presentation and additional information is disclosed in the notes if material.

~~Recently Adopted Accounting Standards~~

~~Share-based Payment Transactions~~

Amended guidance for share-based payment transactions was adopted in the first quarter of 2017. Net excess tax benefits of $30 million for the nine months ended September 30, 2017 were recognized prospectively as a reduction of tax expense rather than capital in excess of par value of stock. Net excess tax benefits are also presented as an operating cash flow rather than a financing cash flow, and cash payments to tax authorities in connection with shares withheld for statutory tax withholding requirements are presented as a financing cash flow rather than an operating cash flow. The changes in cash flow presentation were applied retrospectively and increased operating cash flows and decreased financing cash flows by $113 million for the nine months ended September 30, 2017 and $193 million for the nine months ended September 30, 2016.

~~Income Tax Accounting for Intra-entity Transfers of Assets Other Than Inventory~~

Amended guidance on income tax accounting for intra-entity transfers of assets other than inventory was early adopted in the first quarter of 2017 on a modified retrospective approach. The amended guidance requires tax consequences of these transfers be recognized in the period the transfer takes place. Net reductions to prepaid and deferred tax assets pertaining to pre-2017 internal transfers of intellectual property of $787 million were adjusted through retained earnings as a cumulative effect of an accounting change which will reduce the annual tax expense by $86 million beginning in 2017. In addition, the tax consequences of additional internal transfers of intellectual property that may occur in the future will be included in income tax expense upon transfer and not amortized in subsequent periods.

~~Recently Issued Accounting Standards~~

~~Accounting for Hedging Activities~~

In August 2017, the FASB issued amended guidance on derivatives and hedging. The amended guidance revises and expands items eligible for hedge accounting, simplifies hedge effectiveness testing and changes the timing of recognition and presentation for certain hedged items. Certain disclosure requirements are also modified for hedging activities on a prospective basis. The guidance is effective in 2019 with early adoption permitted on a modified retrospective approach. The Company is assessing the potential impact of the new standard.

~~Presentation of Net Periodic Pension and Postretirement Benefits~~

In March 2017, the FASB issued amended guidance requiring all net periodic benefit components for defined benefit pension and other postretirement plans other than service costs to be recorded outside of income from operations (other income). The guidance is effective in 2018 on a retrospective basis. The Company expects that annual cost of products sold; marketing, selling and administrative; and research and development expenses will increase by approximately $130 million in the aggregate with a corresponding offset in other income.

~~Revenue from Contracts with Customers~~

Amended guidance for revenue recognition will be adopted in the first quarter of 2018 using the modified retrospective method with the cumulative effect of the change recognized in retained earnings. The new guidance referred to as ASC 606 requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers and replaces most of the existing revenue recognition standards in U.S. GAAP. A five step model will be utilized to achieve the core principle; (1) identify the customer contract, (2) identify the contract’s performance obligations, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations and (5) recognize revenue when or as a performance obligation is satisfied.

The Company’s assessment of the new standard’s impact is substantially complete. The timing of recognizing revenue is not expected to change for typical net product sales to customers, most existing alliance arrangements as well as royalties and sale-based milestones from out-licensing arrangements. In addition, the timing of recognizing royalties, sales-based milestones and other forms of contingent consideration resulting from the divestiture of businesses is not expected to change.

However, transaction prices are no longer required to be fixed or determinable and certain variable consideration might be recognized prior to the occurrence or resolution of the contingent event to the extent it is probable that a significant reversal in the amount of estimated cumulative revenue will not occur. Certain estimated future royalties and termination fees for licensing rights previously reacquired by alliance partners are expected to be recognized as contract assets upon adoption of the new standard. Refer to the Sanofi and Erbitux* Japan arrangements in "Note 3. Alliances" of the 2016 Form 10-K. As a result of the new guidance and cumulative effect adjustment, revenue and other income is expected to be lower in 2018 by approximately $225 million and $125 million, respectively, compared to what would have been reported under the previous standard.

~~In addition to the items discussed above, the following recently issued accounting standards have not been adopted. Refer to the 2016 Form 10-K for additional information and their potential impacts.~~



~~Accounting Standard Update~~	~~Effective Date~~
~~Recognition and Measurement of Financial Assets and Liabilities~~	~~January 1, 2018~~
~~Definition of a Business~~	~~January 1, 2018~~
~~Leases~~	~~January 1, 2019~~
~~Financial Instruments - Measurement of Credit Losses~~	~~January 1, 2020~~
~~Goodwill Impairment Testing~~	~~January 1, 2020~~

~~Note~~ 2~~. 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 ~~chief executive officer~~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.”

~~Product revenues~~

Use of Estimates and Judgments

Revenues, expenses, assets and liabilities can vary during each quarter of the ~~composition~~year. Accordingly, the results and trends in these unaudited consolidated financial statements may not be indicative of ~~total revenues~~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; sales rebate and return accruals; legal contingencies; and income taxes. Actual results may differ from estimates.

Reclassifications

Certain reclassifications were ~~as follows:~~made to conform the prior period consolidated financial statements to the current period presentation. Cash payments resulting from licensing arrangements, including up-front and contingent milestones previously included in operating activities in the consolidated statements of cash flows are now presented in investing activities. The adjustment resulted in an increase to net cash provided by operating activities and net cash used in investing activities of $315 million in the nine months ended September 30, 2020. Proceeds received from the sale of equity investment securities previously presented in Divestiture and other proceeds in the consolidated statements of cash flows is now presented separately in Proceeds from sales of equity investment securities. These reclassifications did not have an impact on net assets or net earnings.

Recently Adopted Accounting Standards

In December 2019, the FASB issued amended guidance on the accounting and reporting of income taxes. The guidance is intended to simplify the accounting for income taxes by removing exceptions related to certain intraperiod tax allocations and deferred tax liabilities; clarifying guidance primarily related to evaluating the step-up tax basis for goodwill in a business combination; and reflecting enacted changes in tax laws or rates in the annual effective tax rate. BMS adopted the new guidance effective January 1, 2021. The amended guidance did not have a material impact on BMS’s results of operations.

Three Months Ended September 30, Nine Months Ended September 30,
Dollars in Millions 2017 2016 2017 2016
Prioritized Brands
Opdivo $ 1,265
$ 920
$ 3,587
$ 2,464
Eliquis 1,232
884
3,509
2,395
Orencia 632
572
1,817
1,640
Sprycel 509
472
1,478
1,330
Yervoy 323
285
975
789
Empliciti 60
41
168
103
Established Brands
Hepatitis C Franchise 73
379
347
1,352
Baraclude 264
306
819
896
Sustiva Franchise 183
275
555
819
Reyataz Franchise 174
238
555
706
Other Brands 539
550
1,517
1,690
Total Revenues $ 5,254
$ 4,922
$ 15,327
$ 14,184

Net product sales $ 4,862
$ 4,492
$ 14,212
$ 12,888
Alliance revenues 334
402
957
1,229
Other revenues 58
28
158
67
Total Revenues $ 5,254
$ 4,922
$ 15,327
$ 14,184

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	2021		2020		2021		2020
Net product sales	$	11,243	$	10,197	$	33,446	$	30,555
Alliance revenues	194		184		495		452
Other revenues	187		159		459		443
Total Revenues	$	11,624	$	10,540	$	34,400	$	31,450

Products are sold principally to wholesalers, distributors, specialty pharmacies, and to a lesser extent, directly to retailers, hospitals, clinics and government agencies. Customer orders are generally fulfilled within a few days of receipt resulting in minimal order backlog. Contractual performance obligations are usually limited to transfer of control of the product to the customer. The transfer occurs either upon shipment, upon receipt of the product after considering when the customer obtains legal title to the product, or upon infusion for cell therapies and when BMS obtains a right of payment. At these points, customers are able to direct the use of and obtain substantially all of the remaining benefits of the product.

The following table summarizes GTN adjustments:


	Three Months Ended September 30,				Nine Months Ended September 30,
Dollars in Millions	2021		2020		2021		2020
Gross product sales	$	17,335	$	15,211	$	49,676	$	43,685
GTN adjustments(a)
Charge-backs and cash discounts	(1,908)		(1,440)		(5,214)		(4,072)
Medicaid and Medicare rebates	(2,625)		(2,146)		(6,482)		(5,126)
Other rebates, returns, discounts and adjustments	(1,559)		(1,428)		(4,534)		(3,932)
Total GTN adjustments	(6,092)		(5,014)		(16,230)		(13,130)
Net product sales	$	11,243	$	10,197	$	33,446	$	30,555

(a) Includes adjustments for provisions for product sales made in prior periods resulting from changes in estimates of $10 million and $282 million for the three and nine months ended September 30, 2021, and $(25) million and $91 million for the three and nine months ended September 30, 2020, 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	2021		2020		2021		2020
Prioritized Brands
Revlimid	$	3,347	$	3,027	$	9,493	$	8,826
Eliquis	2,413		2,095		8,091		6,899
Opdivo	1,905		1,780		5,535		5,199
Orencia	870		826		2,442		2,290
Pomalyst/Imnovid	851		777		2,478		2,235
Sprycel	551		544		1,562		1,576
Yervoy	515		446		1,481		1,211
Abraxane	266		342		876		950
Empliciti	82		96		253		290
Reblozyl	160		96		400		159
Inrebic	22		13		54		40
Onureg	21		3		48		3
Zeposia	40		2		86		3
Breyanzi	30		—		47		—
Abecma	71		—		95		—

Established Brands
Vidaza	36		106		135		390
Baraclude	105		100		327		343
Other Brands	339		287		997		1,036
Total Revenues	$	11,624	$	10,540	$	34,400	$	31,450

United States	$	7,296	$	6,542	$	21,694	$	19,795
Europe	2,661		2,453		7,903		7,156
Rest of the World	1,391		1,361		4,172		4,030
Other(a)	276		184		631		469
Total Revenues	$	11,624	$	10,540	$	34,400	$	31,450

(a) Other revenues include royalties and alliance-related revenues for products not sold by BMS’s regional commercial organizations.

Revenue recognized from performance obligations satisfied in prior periods was $73 million and $463 million for the three and nine months ended September 30, 2021 and $32 million and $260 million for the three and nine months ended September 30, 2020, respectively, consisting primarily of revised estimates for GTN adjustments related to prior period sales and royalties for out-licensing arrangements. Contract assets were not material at September 30, 2021 and December 31, 2020.

Note 3.3. 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 ~~are~~ exposed to significant risks and rewards depending on the commercial success of the activities. BMS may either in-license intellectual property owned by the other party or out-license its intellectual property to the other party. These arrangements also typically include research, development, manufacturing, and/or commercial activities and can cover a single investigational compound or commercial product or multiple compounds and/or products in various life cycle stages. The rights and obligations of the parties can be global or limited to geographic regions. ~~We refer~~BMS refers to these collaborations as alliances and ~~our~~its partners as alliance partners. ~~Products sold through alliance arrangements in certain markets include~~ ~~Opdivo~~, ~~Eliquis~~, ~~Orencia~~, ~~Sprycel~~, ~~Yervoy~~, ~~Empliciti~~, ~~Sustiva~~ (Atripla*~~) and certain other brands.~~

Selected financial information pertaining to ~~our~~ 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	2021		2020		2021		2020
Revenues from alliances:
Net product sales	$	2,452	$	2,116	$	8,139	$	7,040
Alliance revenues	194		184		495		452
Total Revenues	$	2,646	$	2,300	$	8,634	$	7,492

Payments to/(from) alliance partners:
Cost of products sold	$	1,181	$	1,007	$	3,924	$	3,363
Marketing, selling and administrative	(43)		(25)		(140)		(103)
Research and development	10		48		753		327
Other (income)/expense, net	1		(28)		(18)		(59)

Three Months Ended September 30, Nine Months Ended September 30,
Dollars in Millions 2017 2016 2017 2016
Revenues from alliances:
Net product sales $ 1,764
$ 1,465
$ 5,045
$ 4,031
Alliance revenues 334
402
957
1,229
Total Revenues $ 2,098
$ 1,867
$ 6,002
$ 5,260

Payments to/(from) alliance partners:
Cost of products sold $ 678
$ 572
$ 1,969
$ 1,543
Marketing, selling and administrative (16 ) (3 ) (39 ) (10 )
Research and development (12 ) (7 ) (6 ) 23
Other (income)/expense (151 ) (160 ) (545 ) (864 )

Noncontrolling interest, pretax 4
3
9
13


Dollars in Millions	September 30, 2021		December 31, 2020
Selected Alliance Balance Sheet information:
Receivables – from alliance partners	$	314	$	343
Accounts payable – to alliance partners	1,101		1,093
Deferred income from alliances(a)	344		366

(a) Includes unamortized upfront and milestone payments.

Selected Alliance Balance Sheet information:
Dollars in Millions September 30,
2017 December 31,
2016
Receivables - from alliance partners $ 878
$ 903
Accounts payable - to alliance partners 634
555
Deferred income from alliances^(a)
1,060
1,194


~~(a)~~	~~Includes unamortized upfront, milestone and other licensing proceeds, revenue deferrals attributed to~~ Atripla* ~~and undelivered elements of diabetes business divestiture proceeds. Amortization of deferred income (primarily related to alliances) was $59 million and~~ ~~$193 million~~ ~~for the nine months ended September 30, 2017 and 2016, respectively.~~

Specific information pertaining to ~~each of our~~ significant alliances ~~is discussed in our 2016 Form 10-K,~~ including their nature and ~~purpose,~~purpose; the significant rights and obligations of the ~~parties~~parties; and specific accounting policy ~~elections. Significant developments and updates related to alliances during the nine months ended September 30, 2017~~elections are ~~set forth below.~~

~~AstraZeneca~~

~~BMS received $100 million from AstraZeneca as additional contingent consideration for the diabetes business divestiture upon achievement of a regulatory approval milestone~~discussed in the ~~first quarter of 2017 (included in other income).~~2020 Form 10-K.

~~F-Star Alpha~~Eisai

In the first quarter of 2017, BMS discontinued development of FS102 (an anti-HER2 antibody fragment) which was in Phase I development for the treatment of breast and gastric cancer. BMS will not exercise its option to purchase F-Star Alpha which was previously consolidated by BMS as a variable interest entity. As a result, an IPRD charge of $75 million was included in R&D expense and attributed to noncontrolling interest in the first quarter of 2017.

~~Note 4. ACQUISITIONS, DIVESTITURES AND LICENSING ARRANGEMENTS~~

~~Acquisitions~~

~~IFM~~

In the third quarter of 2017, BMS acquired all of the outstanding shares of IFM, a private biotechnology company focused on developing therapies that modulate novel targets in the innate immune system to treat cancer, autoimmunity and inflammatory diseases. The acquisition provides BMS with full rights to IFM's preclinical STING and NLRP3 agonist programs focused on enhancing the innate immune response for treating cancer. The consideration includes an upfront payment of $300 million and contingent development, regulatory and sales-based milestone payments of up to $1.0 billion for the first product from each of the two programs and additional contingent milestone payments of up to $555 million for any subsequent products from these programs. No significant IFM processes were acquired, therefore the transaction was accounted for as an asset acquisition because IFM was determined not to be a business as that term is defined in ASC 805 - Business Combinations. BMS also paid $25 million for certain negotiation rights to collaborate, license or acquire an NLRP3 antagonist program from a newly formed entity established by the former shareholders of IFM. The transactions resulted in $310 million of R&D expense and $15 million of deferred tax assets for net operating losses and tax credit carryforwards.

~~Flexus~~

In the second quarter of ~~2017,~~2021, BMS and Eisai commenced an exclusive global strategic collaboration for the co-development and co-commercialization of MORAb-202, a ~~$100 million milestone was achieved~~selective folate receptor alpha antibody-drug conjugate being investigated in endometrial, ovarian, lung and ~~paid to former stockholders of Flexus as additional contingent consideration following the commencement of a~~breast cancers. MORAb-202 is currently in Phase I/II clinical ~~study~~trials for solid tumors.

BMS and Eisai will jointly develop and commercialize MORAb-202 in the U.S., Canada, Europe, Russia, Japan, China and certain other countries in the Asia-Pacific region (the “collaboration territory”). Eisai will be responsible for the global manufacturing and supply. Profits, research and development and commercialization costs are shared in the collaboration territories. BMS will be responsible for development and commercialization outside of ~~an anti-cancer IDO inhibitor. The additional consideration~~the collaboration territory and will pay a royalty on those sales.

A $650 million up-front collaboration fee was included in ~~R&D~~Research and development expense ~~as the Flexus acquisition~~ in ~~2015 was accounted for as an asset acquisition.~~

~~Cardioxyl~~

In the second quarter of ~~2017, a $100 million milestone was achieved and paid~~2021. BMS is also obligated to former stockholders of Cardioxyl as additional contingent consideration following the commencement of a Phase II clinical study of a cardiovascular Nitroxyl Donor. The additional consideration was included in R&D expense as the Cardioxyl acquisition in 2015 was accounted for as an asset acquisition.

~~Divestitures~~

~~SK Biotek~~

In the second quarter of 2017, BMS agreed to sell its small molecule active pharmaceutical ingredient manufacturing operations in Swords, Ireland to SK Biotek. The divestiture includes the transfer of the facility, the majority of employees at the site, inventories and certain third-party contract manufacturing obligations. The purchase price is expected to be approximately $140 million subject to inventory levels on the date of closing. The transaction is expected to close in the fourth quarter of 2017 subject to SK Biotek's receipt of certain environmental permits and other customary closing conditions and will be accounted for as a sale of a business. Net assets of approximately $140 million were accounted for as held-for-sale as of September 30, 2017, consisting primarily of inventories and property, plant and equipment, and were included in prepaid expenses and other. The assets were reduced to their estimated relative fair value after considering the purchase price resulting in an impairment charge of $128 million that was included in cost of products sold in the nine months ended September 30, 2017. SK Biotek will provide certain manufacturing services for BMS through 2022. Revenues and pretax earnings related to this operation were not material in 2017 and 2016 (excluding the impairment charge).

~~Licensing Arrangements~~

~~Halozyme~~

In the third quarter of 2017, BMS and Halozyme announced a global collaboration and license agreement to develop subcutaneously administered BMS IO medicines using Halozyme's ENHANZE* drug-delivery technology. This technology may allow for more rapid delivery of large volume injectable medications, such as medications that are currently delivered intravenously, through subcutaneous delivery. BMS agreed to pay $105 million to Halozyme for access to the technology which will be included in R&D expense in the fourth quarter of 2017. BMS has designated multiple IO targets, including PD-1, to develop using the ENHANZE* technology and has an option to select additional targets within five years from the effective date up to a maximum of 11 targets. BMS may pay up to ~~$160 million~~$2.5 billion upon the achievement of contingent development, regulatory and sales-based ~~milestone events for each~~milestones.

Note 4. DIVESTITURES, LICENSING AND OTHER ARRANGEMENTS

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(a)				Divestiture (Gains)/Losses				Royalty Income
Dollars in Millions	2021		2020		2021		2020		2021		2020
Diabetes Business	$	153	$	129	$	—	$	—	$	(159)	$	(148)
Erbitux* Business	4		3		—		—		—		—
Manufacturing Operations	27		—		—		—		—		—

Mature Brands and Other	4		41		2		1		(1)		(44)
Total	$	188	$	173	$	2	$	1	$	(160)	$	(192)


	Nine Months Ended September 30,
	Net Proceeds(a)				Divestiture (Gains)/Losses				Royalty Income
Dollars in Millions	2021		2020		2021		2020		2021		2020
Diabetes Business	$	449	$	409	$	—	$	—	$	(445)	$	(404)
Erbitux* Business	10		10		—		—		—		—
Manufacturing Operations	50		10		—		(1)		—		—
Plavix* and Avapro/Avalide	5		7		—		(12)		—		—
Mature Brands and Other	56		73		(9)		7		(2)		(76)
Total	$	570	$	509	$	(9)	$	(6)	$	(447)	$	(480)

(a) Includes royalties received subsequent to the related sale of the ~~nominated collaboration targets, additional milestone payments~~asset or business.

Licensing and Other Arrangements

The following table summarizes the financial impact of Keytruda* royalties, Tecentriq* royalties, up-front licensing fees and milestones for ~~combination~~ products ~~and future royalties on sales of products using the ENHANZE* technology. The agreement is subject to obtaining customary regulatory and antitrust approvals.~~that have not obtained commercial approval, which are included in Other (income)/expense, net.

~~CytomX~~


	Three Months Ended September 30,				Nine Months Ended September 30,
Dollars in Millions	2021		2020		2021		2020
Keytruda* royalties	$	(215)	$	(176)	$	(611)	$	(492)
Tecentriq* royalties	(22)		—		(67)		—
Up-front licensing fees	—		—		—		(30)
Contingent milestone income	(10)		(16)		(12)		(62)
Amortization of deferred income	3		(14)		(27)		(44)
Other royalties	(21)		(5)		(33)		(16)
Total	$	(265)	$	(211)	$	(750)	$	(644)

Agenus

In the ~~second~~third quarter of ~~2017,~~2021, BMS ~~expanded its strategic collaboration with CytomX~~obtained a global exclusive license to ~~discover novel therapies using CytomX’s~~Agenus’ proprietary ~~Probody platform. As part of the original May 2014 collaboration to discover, develop~~AGEN1777 bispecific antibody program that blocks TIGIT and ~~commercialize Probody therapeutics,~~an additional target. AGEN1777 is being studied in oncology and a Phase I clinical trial was initiated in October 2021. BMS ~~selected four oncology targets, including CTLA-4. Pursuant to the expanded agreement, CytomX~~ will ~~grant BMS exclusive worldwide rights to develop and commercialize Probody therapeutics for up to eight additional targets. BMS paid CytomX $75 million~~be responsible for the ~~rights to the initial four targets which was expensed as R&D prior to 2017. BMS paid~~development and any subsequent commercialization of AGEN1777 and its related products worldwide, including strategic decisions, regulatory responsibilities, funding and manufacturing. The transaction included an up-front payment of $200 million ~~to CytomX for access to the additional targets~~ which was included in ~~R&D~~Research and development expense ~~in the second quarter of 2017. BMS will also reimburse CytomX for certain research costs over the collaboration period, pay up~~and Agenus is eligible to ~~$448 million upon achievement of~~receive contingent development, regulatory and ~~sales milestone events for each collaboration target and future royalties if a product is approved and commercialized.~~

~~Biogen~~

In the second quarter of 2017, BMS out-licensed to Biogen exclusive rights to develop and commercialize BMS-986168, an anti-eTau compound in development for Progressive Supranuclear Palsy. Biogen paid $300 million to BMS which was included in other income in the second quarter of 2017 as BMS has no further performance obligations as part of the agreement. BMS is also entitled to contingent development, regulatory and sales based milestone payments ofsales-based milestones up to ~~$410 million if achieved~~$1.4 billion as well as ~~future~~ royalties if the product is ultimately approved and commercialized. BMS originally acquired the rights to this compound in 2014 through its acquisition of iPierian. Biogen assumed all of BMS’s remaining obligations to the former stockholders of iPierian.on global net sales.

~~Roche~~

In the second quarter of 2017, BMS out-licensed to Roche exclusive rights to develop and commercialize BMS-986089, an anti-myostatin adnectin in development for Duchenne Muscular Dystrophy. Roche paid $170 million to BMS which was included in other income in the second quarter of 2017 as BMS has no further performance obligations as part of the agreement. BMS will also be entitled to contingent development and regulatory milestone payments of up to $205 million if achieved and future royalties if the product is ultimately approved and commercialized.

Note 5.5. OTHER (INCOME)/EXPENSE, NET


	Three Months Ended September 30,				Nine Months Ended September 30,
Dollars in Millions	2021		2020		2021		2020
Interest expense	$	328	$	346	$	1,011	$	1,065
Contingent consideration	—		(988)		(510)		(597)
Royalties and licensing income	(425)		(403)		(1,197)		(1,124)
Equity investment gains	(465)		(244)		(1,214)		(724)
Integration expenses	141		195		434		535
Provision for restructuring	27		176		150		451
Litigation and other settlements	13		10		49		41
Transition and other service fees	(6)		(18)		(43)		(129)
Investment income	(12)		(13)		(33)		(99)
Reversion excise tax	—		—		—		76
Divestiture losses/(gains)	2		1		(9)		(6)
Intangible asset impairment	—		—		—		21

Loss on debt redemption	—		—		281		—


Other	(12)		23		(32)		2
Other (income)/expense, net	$	(409)	$	(915)	$	(1,113)	$	(488)

Three Months Ended September 30, Nine Months Ended September 30,
Dollars in Millions 2017 2016 2017 2016
Interest expense $ 48
$ 42
$ 145
$ 127
Investment income (37 ) (32 ) (104 ) (81 )
Provision for restructuring 28
19
207
41
Litigation and other settlements^(a)
—
(1 ) (489 ) 48
Equity in net income of affiliates (21 ) (19 ) (59 ) (65 )
Divestiture (gains)/losses 1
(21 ) (126 ) (574 )
Royalties and licensing income^(b)
(209 ) (158 ) (1,093 ) (579 )
Transition and other service fees (12 ) (57 ) (32 ) (184 )
Pension charges 22
19
91
66
Intangible asset impairments —
—
—
15
Equity investment impairment —
—
—
45
Loss on debt redemption —
—
109
—
Other (11 ) (16 ) (26 ) (57 )
Other (income)/expense $ (191 ) $ (224 ) $ (1,377 ) $ (1,198 )


~~(a)~~	~~Includes BMS's share of a patent-infringement litigation settlement of $481 million related to Merck's PD-1 antibody~~ Keytruda* ~~in the nine months ended September 30, 2017.~~


~~(b)~~	~~Includes upfront licensing fees of $470 million from Biogen and Roche in the nine months ended September 30, 2017.~~

Note 6. RESTRUCTURING

Celgene Acquisition Plan

In ~~October 2016, the Company announced~~2019, a restructuring and integration plan was implemented as an initiative to ~~evolve~~realize sustainable run rate synergies resulting from cost savings and ~~streamline its operating model~~avoidance from the Celgene acquisition that are currently expected to be approximately $3.0 billion. The synergies are expected to be realized in Cost of products sold (10%), Marketing, selling and ~~expects to incur charges in connection with employee workforce reductions~~administrative expenses (55%) and ~~early site exits. The majority~~Research and development expenses (35%). Charges of ~~the charges~~approximately $3.0 billion are expected to be incurred through ~~2020, range between $1.5~~2022. Cumulative charges of approximately $2.4 billion have been recognized to ~~$2.0 billion~~date including integration planning and ~~consist of~~execution expenses, employee termination benefit costs and accelerated stock-based compensation, contract termination costs ~~plant and equipment accelerated depreciation and impairment charges~~ and other shutdown costs associated with site ~~shutdown costs.~~exits. Cash outlays in connection with these actions are expected to be approximately ~~40%~~$2.5 billion. Employee workforce reductions were approximately 320 and 1,400 for the nine months ended September 30, 2021 and 2020, respectively.

MyoKardia Acquisition Plan

In 2020, a restructuring and integration plan was initiated to ~~50% of~~realize expected cost synergies resulting from cost savings and avoidance from the ~~total charges.~~MyoKardia acquisition. Charges of ~~$631~~approximately $150 million are expected to be incurred through 2022, and consist of integration planning and execution expenses, employee termination benefit costs and other costs. Cumulative charges of approximately $113 million have been recognized for these actions to date.

Company Transformation

In 2016, a restructuring plan was announced to evolve and streamline BMS’s operating model. Cumulative charges of approximately $1.5 billion were recognized for these actions since the ~~announcement ($82~~announcement. Actions under the plan were completed as of December 31, 2020.

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	2021		2020		2021		2020
Celgene Acquisition Plan	$	153	$	373	$	526	$	1,014
MyoKardia Acquisition Plan	18		—		74		—
Company Transformation	—		10		—		115
Total charges	$	171	$	383	$	600	$	1,129

Employee termination costs	$	24	$	133	$	143	$	389
Other termination costs	3		43		7		62
Provision for restructuring	27		176		150		451
Integration expenses	141		195		434		535
Accelerated depreciation	—		7		—		48
Asset impairments	—		5		24		86
Other shutdown costs, net	3		—		(8)		9
Total charges	$	171	$	383	$	600	$	1,129

Cost of products sold	$	—	$	3	$	24	$	30
Marketing, selling and administrative	1		6		1		7
Research and development	—		3		—		98
Other (income)/expense, net	170		371		575		994
Total charges	$	171	$	383	$	600	$	1,129

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


	Nine Months Ended September 30,
Dollars in Millions	2021		2020
Liability at December 31	$	148	$	100
Provision for restructuring(a)	138		387
Foreign currency translation and other	(4)		2
Payments	(170)		(295)
Liability at September 30	$	112	$	194

(a) Includes a reduction of the liability resulting from changes in estimates of $17 million and ~~$534~~$7 million for the three and nine months ended September 30, 2017, respectively). These charges include an impairment charge for the manufacturing operations in Swords, Ireland discussed in "—Note 4. Acquisitions, Divestitures and Licensing Arrangements." Restructuring charges are recognized upon meeting certain criteria, including finalization of committed plans, reliable estimates and discussions with local works councils in certain markets.

Other restructuring charges recognized prior to the above actions were primarily related to specialty care transformation initiatives designed to create a more simplified organization across all functions and geographic markets. In addition, accelerated depreciation and other charges were incurred in connection with the expected early exits of a manufacturing site in Ireland and R&D site in the U.S.

~~Employee workforce reductions were approximately 1,200 and 500~~ for the nine months ended September 30, ~~2017~~2021 and ~~2016, respectively, across all geographic regions~~2020, respectively. Excludes $12 million and $64 million for ~~manufacturing, marketing, selling, administrative and R&D personnel.~~

~~The following tables summarize the charges and activity related to the restructuring actions:~~

Three Months Ended September 30, Nine Months Ended September 30,
Dollars in Millions 2017 2016 2017 2016
Employee termination costs $ 18
$ 17
$ 190
$ 32
Other termination costs 10
2
17
9
Provision for restructuring 28
19
207
41
Accelerated depreciation 64
15
216
42
Asset impairments 1
—
144
—
Other shutdown costs —
6
3
13
Total charges $ 93
$ 40
$ 570
$ 96

Three Months Ended September 30, Nine Months Ended September 30,
Dollars in Millions 2017 2016 2017 2016
Cost of products sold $ 1
$ 7
$ 131
$ 15
Research and development 64
14
232
40
Other (income)/expense 28
19
207
41
Total charges $ 93
$ 40
$ 570
$ 96

Nine Months Ended September 30,
Dollars in Millions 2017 2016
Liability at January 1 $ 114
$ 125
Charges 233
48
Change in estimates (26 ) (7 )
Provision for restructuring 207
41
Foreign currency translation 17
2
Spending (179 ) (88 )
Liability at September 30 $ 159
$ 80

~~Note 7. INCOME TAXES~~

Three Months Ended September 30, Nine Months Ended September 30,
Dollars in Millions 2017 2016 2017 2016
Earnings Before Income Taxes $ 1,183
$ 1,559
$ 4,433
$ 4,829
Provision for Income Taxes 327
344
1,129
1,220
Effective Tax Rate 27.6 % 22.1 % 25.5 % 25.3 %

The effective tax rate is lower than the U.S. statutory rate of 35% which is primarily attributable to undistributed earnings of certain foreign subsidiaries in low tax jurisdictions that have been considered or are expected to be indefinitely reinvested offshore. These undistributed earnings primarily relate to operations in Switzerland, Ireland and Puerto Rico. If these undistributed earnings are repatriated to the U.S. in the future, or if it were determined that such earnings are to be remitted in the foreseeable future, additional tax provisions would be required. Due to complexities in the tax laws and assumptions that would have to be made, it is not practicable to estimate the amounts of income taxes that would have to be provided. Reforms to U.S. tax laws related to foreign earnings have been proposed and if adopted, may increase taxes, which could reduce the results of operations and cash flows. BMS operates under a favorable tax grant in Puerto Rico not scheduled to expire prior to 2023.

~~Jurisdictional tax rates and other tax impacts attributed to R&D charges, divestiture transactions and other discrete pretax items increased the effective tax rate by 3.7% and 3.1% in~~ the nine months ended September 30, ~~2017~~2021 and ~~2016,~~2020, respectively, ~~including non-deductible R&D asset acquisition charges and goodwill allocated~~of accelerated stock-based compensation relating to ~~business divestitures. The tax impact for discrete items~~the Celgene Acquisition Plan.

Note 7. INCOME TAXES


	Three Months Ended September 30,						Nine Months Ended September 30,
Dollars in Millions	2021			2020			2021			2020
Earnings Before Income Taxes	$	2,157		$	2,257		$	6,240		$	3,580
Provision for Income Taxes	605			379			1,598			2,548
Effective Tax Rate	28.0		%	16.8		%	25.6		%	71.2		%

Income taxes in interim periods are ~~reflected immediately and are not considered in estimating~~determined based on the estimated annual effective tax ~~rate.~~

~~The adoption~~rates and the tax impact of ~~the amended guidance for intra-entity transfers of assets other than inventory and share-based payment transactions reduced the~~discrete items that are reflected immediately. The effective tax ~~rate~~rates in 2021 and 2020 were impacted by ~~2.1% in~~low jurisdictional tax rates attributed to the unwinding of inventory fair value adjustments and intangible asset amortization, an IPRD impairment charge and contingent value rights fair value adjustments that are not taxable or deductible. The nine months ended September 30, ~~2017. Refer to "—Note 1. Basis of Presentation and Recently Issued Accounting Standards" for additional information.~~

~~BMS is currently under examination by a number of~~2020 includes an $853 million deferred tax ~~authorities which have proposed or are considering proposing material adjustments to tax positions for issues such as~~charge resulting from an internal transfer ~~pricing, certain tax credits and the deductibility~~ of certain ~~expenses.~~ intangible assets to the U.S. and an additional $266 million GILTI tax charge upon finalization of the Otezla* divestiture tax consequences with tax authorities. 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 relevant tax code.

It is reasonably possible that ~~new issues will be raised by tax authorities which may require adjustments to~~ the ~~amount of unrecognized tax benefits; however, an estimate of such adjustments cannot reasonably be made at this time.~~

~~It is also reasonably possible that the total~~ amount of unrecognized tax benefits at September 30, ~~2017~~2021 could decrease in the range of approximately ~~$255~~$430 million to ~~$315~~$480 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.

BMS is currently under examination by a number of tax authorities, which have 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 positions 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 open tax audits. 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 tax jurisdiction.

Note 8. EARNINGS PER SHARE


	Three Months Ended September 30,				Nine Months Ended September 30,
Amounts in Millions, Except Per Share Data	2021		2020		2021		2020
Net Earnings Attributable to BMS Used for Basic and Diluted EPS Calculation	$	1,546	$	1,872	$	4,622	$	1,012

Weighted-Average Common Shares Outstanding – Basic	2,219		2,257		2,227		2,260
Incremental Shares Attributable to Share-Based Compensation Plans	24		33		26		35
Weighted-Average Common Shares Outstanding – Diluted	2,243		2,290		2,253		2,295

Earnings per Common Share
Basic	$	0.70	$	0.83	$	2.08	$	0.45
Diluted	0.69		0.82		2.05		0.44

The total number of potential shares of common stock excluded from the diluted earnings per common share computation because of the antidilutive impact was 8 million and 9 million for the three and nine months ended September 30, 2021, respectively and 27 million and 29 million for the three and nine months ended September 30, 2020, respectively.

Note 8~~. EARNINGS PER SHARE~~

Three Months Ended September 30, Nine Months Ended September 30,
Amounts in Millions, Except Per Share Data 2017 2016 2017 2016
Net Earnings Attributable to BMS used for Basic and Diluted EPS Calculation $ 845
$ 1,202
$ 3,335
$ 3,563

Weighted-average common shares outstanding – basic 1,639
1,671
1,648
1,670
Incremental shares attributable to share-based compensation plans 6
8
7
9
Weighted-average common shares outstanding – diluted 1,645
1,679
1,655
1,679

Earnings per Common Share:
Basic $ 0.52
$ 0.72
$ 2.02
$ 2.13
Diluted $ 0.51
$ 0.72
$ 2.02
$ 2.12

~~Note~~ 9.9. FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS

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


	September 30, 2021						December 31, 2020
Dollars in Millions	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Cash and cash equivalents - money market and other securities	$	—	$	11,660	$	—	$	—	$	12,361	$	—
Marketable debt securities:
Certificates of deposit	—		1,688		—		—		1,020		—
Commercial paper	—		10		—		—		—		—
Corporate debt securities	—		471		—		—		698		—
Derivative assets	—		193		19		—		42		27
Equity investments	3,733		145		—		3,314		138		—
Derivative liabilities	—		12		—		—		270		—
Contingent consideration liability:
Contingent value rights	9		—		—		530		—		—
Other acquisition related contingent consideration	—		—		67		—		—		78

September 30, 2017 December 31, 2016
Dollars in Millions Level 1 Level 2 Level 1 Level 2
Cash and cash equivalents - Money market and other securities $ —
$ 3,915
$ —
$ 3,532
Marketable securities:
Certificates of deposit —
176
—
27
Commercial paper —
977
—
750
Corporate debt securities —
3,725
—
3,947
Equity funds —
119
—
101
Fixed income funds —
7
—
7
Derivative assets —
31
—
75
Equity investments 90
—
24
—
Derivative liabilities —
(63 ) —
(30 )

As further described in ~~"Note~~“Item 8. Financial Statements and Supplementary Data—Note 9. Financial Instruments and Fair Value ~~Measurements"~~Measurements” in ~~our 2016~~the Company’s 2020 Form 10-K, ~~our~~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). ~~There were no Level 3 financial assets~~

Contingent consideration obligations are recorded at their estimated fair values and these obligations are revalued each reporting period until the related contingencies are resolved. The contingent value rights are adjusted to fair value using the traded price of the securities at the end of each reporting period. The fair value measurements for other contingent consideration liabilities are estimated using probability-weighted discounted cash flow approaches that are based on significant unobservable inputs related to product candidates acquired in business combinations and are reviewed quarterly. These inputs include, as applicable, estimated probabilities and timing of achieving specified development and regulatory milestones and the discount rate used to calculate the present value of estimated future payments. Significant changes which increase or ~~liabilities~~decrease the probabilities of achieving the related development and regulatory events or shorten or lengthen the time required to achieve such events would result in corresponding increases or decreases in the fair values of these obligations. The fair value of other acquisition related contingent consideration as of September 30, ~~2017~~2021 was calculated using the following significant unobservable inputs:


			Ranges (weighted average) utilized as of:
Inputs			September 30, 2021
Discount rate			0.3% to 1.3% (0.6%)
Probability of payment			0% to 80% (2.4%)
Projected year of payment for development and regulatory milestones			2022 to 2028

There were no transfers between levels 1, 2 and ~~December 31, 2016.~~3 during the nine months ended September 30, 2021. The following table represents a roll-forward of the fair value of level 3 instruments:


	Nine Months Ended September 30, 2021				Nine Months Ended September 30, 2020
Dollars in Millions	Asset		Liability		Asset		Liability
Fair value as of January 1	$	27	$	78	$	—	$	106

Changes in estimated fair value	(8)		3		—		(35)
Payments	—		(12)		—		—
Foreign exchange	—		(2)		—		2
Fair value as of September 30	$	19	$	67	$	—	$	73

Available-for-sale Debt Securities and Equity Investments

The following table summarizes available-for-sale debt securities:


	September 30, 2021								December 31, 2020
Dollars in Millions	Amortized Cost		Gross Unrealized						Amortized Cost		Gross Unrealized
			Gains		Losses		Fair Value				Gains		Losses		Fair Value
Certificates of deposit	$	1,688	$	—	$	—	$	1,688	$	1,020	$	—	$	—	$	1,020
Commercial paper	10		—		—		10		—		—		—		—
Corporate debt securities	466		5		—		471		684		14		—		698
Total available-for-sale debt securities(a)	$	2,164	$	5	$	—	$	2,169	$	1,704	$	14	$	—	$	1,718

September 30, 2017 December 31, 2016
Dollars in Millions Amortized Cost Gross Unrealized Amortized Cost Gross Unrealized
Gains Losses Fair Value Gains Losses Fair Value
Certificates of deposit $ 176
$ —
$ —
$ 176
$ 27
$ —
$ —
$ 27
Commercial paper 977
—
—
977
750
—
—
750
Corporate debt securities 3,713
15
(3 ) 3,725
3,945
10
(8 ) 3,947
Equity investments 57
34
(1 ) 90
31
—
(7 ) 24
$ 4,923
$ 49
$ (4 ) $ 4,968
$ 4,753
$ 10
$ (15 ) $ 4,748

Financial assets measured using the fair value option
Equity and fixed income funds^(a)
126
108
Total $ 5,094
$ 4,856
(a) All marketable debt securities mature within two years as of September 30, 2021 and December 31, 2020.

12The following summarizes the carrying amount of equity investments:


Dollars in Millions	September 30, 2021		December 31, 2020
Equity investments with readily determinable fair values	$	3,878	$	3,452
Equity investments without readily determinable fair values	399		694
Equity method investments	621		549
Total equity investments	$	4,898	$	4,695

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

Dollars in Millions September 30,
2017 December 31,
2016
Current marketable securities $ 2,478
$ 2,113
Non-current marketable securities^(b)
2,526
2,719
Other assets^(c)
90
24
Total $ 5,094
$ 4,856


	Three Months Ended September 30,				Nine Months Ended September 30,
Dollars in Millions	2021		2020		2021		2020
Net loss/(gain) recognized on equity investments with readily determinable fair values	$	22	$	(170)	$	(93)	$	(577)
Net loss/(gain) recognized on equity investments with readily determinable fair value sold	3		—		(91)		—
Net unrealized loss/(gain) recognized on equity investments with readily determinable fair value still held	19		(170)		(2)		(577)

Upward adjustments on equity investments without readily determinable fair value	(447)		(46)		(908)		(319)
Impairments and downward adjustments on equity investments without readily determinable fair value	—		2		1		204

Cumulative upward adjustments on equity investments without readily determinable fair value					(207)
Cumulative impairments and downward adjustments on equity investments without readily determinable fair value					80

Equity in net (income)/loss of affiliates	(40)		(30)		(214)		(30)


~~(a)~~	~~The fair value option for financial assets was elected for investments in equity and fixed income funds and are included in current marketable securities.~~


~~(b)~~	~~All non-current marketable securities mature within five years as of September 30, 2017 and December 31, 2016.~~


~~(c)~~	~~Includes equity investments.~~

Qualifying Hedges and Non-Qualifying Derivatives

~~The following table summarizes the fair value of outstanding derivatives:~~

September 30, 2017 December 31, 2016

Asset^(a)

Liability^(b)

Asset^(a)

Liability^(b)
Dollars in Millions Notional Fair Value Notional Fair Value Notional Fair Value Notional Fair Value
Derivatives designated as hedging instruments:
Interest rate swap contracts $ —
$ —
$ 755
$ (3 ) $ 750
$ 1
$ 755
$ (3 )
Forward starting interest rate swap contracts —
—
—
—
500
8
250
(11 )
Foreign currency forward contracts 1,351
25
548
(28 ) 967
66
198
(9 )

Derivatives not designated as hedging instruments:
Foreign currency forward contracts 322
6
1,183
(32 ) 106
—
360
(7 )


~~(a)~~	~~Included in prepaid expenses and other and other assets.~~


~~(b)~~	~~Included in accrued liabilities and pension and other liabilities.~~

Cash Flow Hedges — Foreign currency forward contracts are used to hedge certain forecasted intercompany inventory purchases and sales transactions and certain foreign currency transactions. The fair value for contracts designated as cash flow hedges is temporarily reported in Accumulated other comprehensive loss and included in earnings when the hedged item affects earnings. The net gain or loss on foreign currency forward contracts is expected to be reclassified to net earnings (primarily included in Cost of products sold and Other (income)/expense, net) within the next 12 months. The notional amount of outstanding foreign currency forward contracts was primarily attributed to the euro ~~($2.2 billion)~~of $3.0 billion and Japanese yen ~~($586 million)~~of $1.0 billion at September 30, ~~2017. BMS terminated forward starting interest rate swap contracts~~2021.

The earnings impact related to discontinued cash flow hedges and hedge ineffectiveness was not material during all periods presented. 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 ~~first quarter~~cash flows of ~~2017 with an aggregate notional~~hedged items are performed at inception and on a quarterly basis. Foreign currency forward contracts not designated as hedging instruments are used to offset exposures in certain foreign currency denominated assets, liabilities and earnings. Changes in the fair value of ~~$750 million.~~these derivatives are recognized in earnings as they occur.

BMS may hedge a portion of its future foreign currency exposure by utilizing a strategy that involves both a purchased local currency put option and a written local currency call option that are accounted for as hedges of future sales denominated in that local currency. Specifically, BMS sells (or writes) a local currency call option and purchases a local currency put option with the same expiration dates and local currency notional amounts but with different strike prices. The ~~proceeds~~premium collected from the sale of the call option is equal to the premium paid for the purchased put option, resulting in no net premium being paid. This combination of transactions is generally referred to as a “zero-cost collar.” The expiration dates and ~~related gain were not material.~~notional amounts correspond to the amount and timing of forecasted foreign currency sales. If the U.S. dollar weakens relative to the currency of the hedged anticipated sales, the purchased put option value reduces to zero and BMS benefits from the increase in the U.S. dollar equivalent value of our anticipated foreign currency cash flows; however, this benefit would be capped at the strike level of the written call, which forms the upper end of the collar.

Net Investment Hedges — Non-U.S. dollar borrowings of €950 million ($1.1 billion) at September 30, 2021 are designated as net investment hedges to hedge euro currency exposures of the net investment in certain foreign ~~affiliates.~~affiliates and are recognized in long-term debt. The effective portion of foreign exchange gain on the remeasurement of euro debt was included in the foreign currency translation component of Accumulated other comprehensive loss with the related offset in long-term debt.

~~Fair Value Hedges —~~ ~~The notional amount of fixed-to-floating~~Cross-currency interest rate swap contracts of $600 million at September 30, 2021 are designated to hedge Japanese yen currency exposure of BMS’s net investment in its Japan subsidiaries. Contract fair value changes are recorded in the foreign currency translation component of Accumulated other comprehensive loss with a related offset in Other non-current assets or Other non-current liabilities.

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. The effective interest rate for the contracts is one-month LIBOR (0.08% as of September 30, 2021) plus an interest rate spread of 4.6%. 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 on the consolidated balance sheet. As a result, there was no net impact in earnings. If the underlying swap is terminated ~~was $500 million~~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.

The following table summarizes the fair value of outstanding derivatives:


	September 30, 2021								December 31, 2020
	Asset(a)				Liability(b)				Asset(a)				Liability(b)
Dollars in Millions	Notional		Fair Value		Notional		Fair Value		Notional		Fair Value		Notional		Fair Value
Derivatives designated as hedging instruments:
Interest rate swap contracts	$	255	$	14	$	—	$	—	$	255	$	24	$	—	$	—
Cross-currency interest rate swap contracts	600		16		—		—		—		—		400		(10)
Foreign currency forward contracts	4,643		149		229		(6)		231		1		5,813		(259)

Derivatives not designated as hedging instruments:
Foreign currency forward contracts	704		14		526		(6)		1,104		17		336		(1)

Other	—		19		—		—		—		27		—		—

(a) Included in ~~2016 generating proceeds~~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 ~~$43 million (including accrued interest).~~(gain)/loss recognized on hedging instruments:


	Three Months Ended September 30, 2021				Nine Months Ended September 30, 2021
Dollars in Millions	Cost of products sold		Other (income)/expense, net		Cost of products sold		Other (income)/expense, net
Interest rate swap contracts	$	—	$	(7)	$	—	$	(22)
Cross-currency interest rate swap contracts	—		(2)		—		(8)
Foreign currency forward contracts	19		2		145		(14)


	Three Months Ended September 30, 2020				Nine Months Ended September 30, 2020
Dollars in Millions	Cost of products sold		Other (income)/expense, net		Cost of products sold		Other (income)/expense, net
Interest rate swap contracts	$	—	$	(7)	$	—	$	(21)
Cross-currency interest rate swap contracts	—		(3)		—		(8)
Foreign currency forward contracts	(5)		14		(63)		(41)
Foreign currency zero-cost collar contracts	—		—		—		1

The following table summarizes the effect of derivative and non-derivative instruments designated as hedging instruments in Other Comprehensive Income/(Loss):


	Three Months Ended September 30,				Nine Months Ended September 30,
Dollars in Millions	2021		2020		2021		2020
Derivatives qualifying as cash flow hedges
Foreign currency forward contracts gain/(loss):
Recognized in Other Comprehensive Income/(Loss)(a)	$	93	$	(128)	$	314	$	(65)
Reclassified to Cost of products sold	37		(17)		126		(69)




Derivatives qualifying as net investment hedges
Cross-currency interest rate swap contracts gain:
Recognized in Other Comprehensive Income/(Loss)	—		(11)		26		(1)

Non-derivatives qualifying as net investment hedges
Non-U.S. dollar borrowings gain:
Recognized in Other Comprehensive Income/(Loss)	20		(39)		45		(51)

(a) The majority is expected to be reclassified into earnings in the next 12 months.

Debt Obligations

Short-term debt obligations include:


Dollars in Millions	September 30, 2021		December 31, 2020
Non-U.S. short-term borrowings	$	81	$	176
Current portion of long-term debt	4,769		2,000
Other	215		164
Total	$	5,065	$	2,340

Dollars in Millions September 30,
2017 December 31,
2016
Commercial paper $ 799
$ —
Bank drafts and short-term borrowings 662
243
Current portion of long-term debt —
749
Total $ 1,461
$ 992

The average amount of commercial paper outstanding was $211 million at a weighted-average rate of 1.12% during 2017. The maximum amount of commercial paper outstanding was $1.0 billion with $799 million outstanding at September 30, 2017.

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


Dollars in Millions	September 30, 2021		December 31, 2020
Principal Value	$	43,141	$	48,711

Adjustments to Principal Value:
Fair value of interest rate swap contracts	14		24
Unamortized basis adjustment from swap terminations	124		149
Unamortized bond discounts and issuance costs	(270)		(303)
Unamortized purchase price adjustments of Celgene debt	1,437		1,755
Total	$	44,446	$	50,336

Current portion of long-term debt	$	4,769	$	2,000
Long-term debt	39,677		48,336
Total	$	44,446	$	50,336

Dollars in Millions September 30,
2017 December 31,
2016
Principal Value $ 6,834
$ 6,261
Adjustments to Principal Value:
Fair value of interest rate swap contracts (3 ) (2 )
Unamortized basis adjustment from swap terminations 234
287
Unamortized bond discounts and issuance costs (83 ) (81 )
Total $ 6,982
$ 6,465

Current portion of long-term debt $ —
$ 749
Long-term debt 6,982
5,716

The fair value of long-term debt was ~~$7.4~~$49.8 billion at September 30, ~~2017~~2021 and ~~$6.9~~$58.5 billion at December 31, ~~2016~~2020 valued using Level 2 ~~inputs.~~ inputs, which are based upon the quoted market prices for the same or similar debt instruments. The fair value of short-term borrowings approximates the carrying value due to the short maturities of the debt instruments.

In the first quarter of 2021, BMS purchased aggregate principal amount of $3.5 billion of certain of its debt securities for approximately $4.0 billion of cash in a series of tender offers and “make whole” redemptions. In connection with these transactions, a $281 million loss on debt redemption was recognized based on the carrying value of the debt and included in Other (income)/expense, net.

During the nine months ended September 30, 2021, the $500 million 2.875% Notes, $1.0 billion 2.550% Notes and $500 million 2.250% Notes matured and were repaid.

Interest payments were ~~$172 million~~$1.2 billion and ~~$140 million~~$1.3 billion for the nine months ended September 30, ~~2017~~2021 and ~~2016,~~2020, respectively, net of amounts related to interest rate swap contracts.

~~On February 27, 2017,~~As of September 30, 2021, BMS ~~issued senior unsecured notes~~had 4 separate revolving credit facilities totaling $6.0 billion, which consisted of a 364-day $2.0 billion facility expiring in January 2022, a ~~registered public offering.~~three-year $1.0 billion facility expiring in January 2022 and two five-year $1.5 billion facilities that were extended to September 2025 and July 2026, respectively. The ~~notes rank equally in right~~facilities provide for customary terms and conditions with no financial covenants and may be used to provide backup liquidity for BMS’s commercial paper borrowings and are extendable annually by one year on the anniversary date with the consent of ~~payment with all of BMS's existing and future senior unsecured indebtedness. BMS may redeem~~ the ~~notes, in whole~~lenders. No borrowings were outstanding under any revolving credit facility at September 30, 2021 or ~~in part, at any time prior to maturity at a predetermined redemption price. The following table summarizes the note issuances:~~December 31, 2020.

Note 10. RECEIVABLES

Dollars in Millions 2017
Principal Value:
1.600% Notes due 2019 $ 750
3.250% Notes due 2027 750
Total $ 1,500

Proceeds net of discount and deferred loan issuance costs $ 1,488


Dollars in Millions	September 30, 2021		December 31, 2020
Trade receivables	$	8,519	$	7,882
Less charge-backs and cash discounts	(616)		(645)
Less allowance for expected credit loss	(25)		(18)
Net trade receivables	7,878		7,219
Alliance, royalties, VAT and other	1,367		1,282
Receivables	$	9,245	$	8,501

~~During the third quarter of 2017, $750 million of 0.875% Notes matured and were repaid.~~

~~During the second quarter of 2017, the Company repurchased certain long-term debt obligations with interest rates ranging from 5.875% to 6.875%. The following summarizes the debt repurchase activity:~~

Dollars in Millions 2017
Principal amount $ 337
Carrying value 366
Debt redemption price 474
Loss on debt redemption^(a)
109


~~(a)~~	~~Including acceleration of debt issuance costs, gain on previously terminated interest rate swap contracts and other related fees.~~

~~Note~~ 10~~. RECEIVABLES~~

Dollars in Millions September 30,
2017 December 31,
2016
Trade receivables $ 4,564
$ 3,948
Less charge-backs and cash discounts (184 ) (126 )
Less bad debt allowances (48 ) (48 )
Net trade receivables 4,332
3,774
Alliance receivables 878
903
Prepaid and refundable income taxes 334
627
Other 378
239
Receivables $ 5,922
$ 5,543

Non-U.S. receivables sold on a nonrecourse basis were ~~$460~~$1.1 billion and $788 million ~~and~~ ~~$470 million~~ for the nine months ended September 30, ~~2017~~2021 and ~~2016~~,2020, respectively. Receivables from ~~our three~~the 3 largest ~~pharmaceutical wholesalers~~customers in the U.S. represented ~~64% and 66%~~approximately 56% of total trade receivables at both September 30, ~~2017~~2021 and December 31, ~~2016, respectively.~~2020.

Note 11. INVENTORIES

~~Note~~ 11~~. INVENTORIES~~


Dollars in Millions	September 30, 2021		December 31, 2020
Finished goods	$	849	$	932
Work in process	1,782		2,015
Raw and packaging materials	306		207
Total inventories	$	2,937	$	3,154

Inventories	$	2,163	$	2,074
Other non-current assets	774		1,080

Dollars in Millions September 30,
2017 December 31,
2016
Finished goods $ 380
$ 310
Work in process 956
988
Raw and packaging materials 224
264
Total inventories $ 1,560
$ 1,562

Inventories $ 1,250
$ 1,241
Other assets 310
321

~~Inventories~~Total inventories include fair value adjustments resulting from the Celgene acquisition of ~~$120~~$508 million ~~are included in assets held-for-sale as of~~at September 30, ~~2017 due to the expected transfer of manufacturing operations in Swords, Ireland to SK Biotek. Refer to "—Note 4. Acquisitions, Divestitures~~2021 and ~~Licensing Arrangements" for additional information.~~$774 million at December 31, 2020. Other non-current assets include inventory expected to remain on hand beyond ~~one year~~12 months in both ~~periods and inventory pending regulatory approval of $54 million at December 31, 2016.~~periods.

Note 12.12. PROPERTY, PLANT AND EQUIPMENT


Dollars in Millions	September 30, 2021		December 31, 2020
Land	$	169	$	189
Buildings	5,744		5,732
Machinery, equipment and fixtures	3,230		3,063
Construction in progress	695		487
Gross property, plant and equipment	9,838		9,471
Less accumulated depreciation	(3,970)		(3,585)
Property, plant and equipment	$	5,868	$	5,886

Dollars in Millions September 30,
2017 December 31,
2016
Land $ 105
$ 107
Buildings 5,188
4,930
Machinery, equipment and fixtures 3,034
3,287
Construction in progress 938
849
Gross property, plant and equipment 9,265
9,173
Less accumulated depreciation (4,251 ) (4,193 )
Property, plant and equipment $ 5,014
$ 4,980

Depreciation expense was ~~$509~~$144 million and ~~$319~~$422 million for the three and nine months ended September 30, 2021 and $136 million and $451 million for the three and nine months ended September 30, 2020, respectively.

Note 13. GOODWILL AND OTHER INTANGIBLE ASSETS


Dollars in Millions	Estimated Useful Lives	September 30, 2021		December 31, 2020
Goodwill		$	20,519	$	20,547

Other intangible assets:
Licenses	5 – 15 years	327		328
Acquired marketed product rights	3 – 15 years	60,720		59,076
Capitalized software	3 – 10 years	1,452		1,325
IPRD		3,750		6,130
Gross other intangible assets		66,249		66,859
Less accumulated amortization		(21,319)		(13,616)
Other intangible assets		$	44,930	$	53,243

In the nine months ended September 30, 2021, $1.5 billion of IPRD was reclassified to acquired marketed product rights upon approval of Breyanzi and Abecma in the U.S. Amortization expense of other intangible assets was $2.6 billion and $7.7 billion for the three and nine months ended September 30, 2021 and $2.5 billion and $7.3 billion for the three and nine months ended September 30, 2020, respectively.

In the third quarter of 2021, a $610 million IPRD impairment charge for an investigational compound was recorded in Research and development expense primarily resulting from changes in clinical timelines, expected launch dates and competitive landscape. The compound is being studied as a potential treatment for hematologic diseases and was acquired in the acquisition of Celgene. The charge represented a partial write-down of its carrying value based on the estimated fair value determined using discounted cash flow projections.

In the second quarter of 2021, a $230 million IPRD impairment charge was recorded in Research and development expense following a decision to discontinue development of an investigational compound in connection with the prioritization of current pipeline opportunities. The compound was being studied as a potential treatment for fibrotic diseases and was acquired in the acquisition of Celgene. The charge represented a full write-down based on the estimated fair value determined using discounted cash flow projections.

In the first quarter of 2021, Inrebic EU regulatory approval milestones of $300 million were achieved resulting in a $385 million increase to the acquired marketed product rights intangible asset, after establishing the applicable deferred tax liability. An impairment charge of $315 million was recognized in Cost of products sold as the carrying value of this asset exceeded the projected undiscounted cash flows of the asset. The charge was equal to the excess of the asset's carrying value over its estimated fair value using discounted cash flow projections.

Note 14. SUPPLEMENTAL FINANCIAL INFORMATION


Dollars in Millions	September 30, 2021		December 31, 2020
Income taxes	$	2,493	$	1,799
Research and development	510		492
Equity investments	160		619
Restricted cash	140		89
Other	1,069		787
Other current assets	$	4,372	$	3,786


Dollars in Millions	September 30, 2021		December 31, 2020
Equity investments	$	4,738	$	4,076
Inventories	774		1,080
Operating leases	967		859
Pension and postretirement	258		208
Restricted cash(a)	199		338
Other	467		458
Other non-current assets	$	7,403	$	7,019

(a) Restricted cash consists of funds restricted for annual Company contributions to the defined contribution plan in the U.S. and escrow for litigation settlements. Restricted cash of $339 million at September 30, 2021 and $425 million at September 30, 2020 was included in cash, cash equivalents and restricted cash in the consolidated statements of cash flows.


Dollars in Millions	September 30, 2021		December 31, 2020
Rebates and returns	$	6,523	$	5,688
Income taxes	751		647
Employee compensation and benefits	1,138		1,412
Research and development	1,370		1,423
Dividends	1,109		1,129
Interest	365		434
Royalties	402		461
Operating leases	173		164
Contingent value rights	—		515
Other	1,869		2,154
Other current liabilities	$	13,700	$	14,027


Dollars in Millions	September 30, 2021		December 31, 2020
Income taxes payable	$	4,768	$	5,017
Pension and postretirement	821		899
Operating leases	929		833
Deferred income	340		357
Deferred compensation	409		344
Other	249		326
Other non-current liabilities	$	7,516	$	7,776

Note 15. EQUITY

The following table summarizes changes in equity for the nine months ended September 30, ~~2017~~2021:


	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, 2020	2,923	$	292	$	44,325	$	(1,839)	$	21,281	679	$	(26,237)	$	60
Net Earnings	—	—		—		—		2,021		—	—		8
Other Comprehensive Income	—	—		—		295		—		—	—		—
Cash dividends declared(a)	—	—		—		—		(1,098)		—	—		—
Share repurchase program	—	—		—		—		—		28	(1,768)		—
Stock compensation	—	—		(473)		—		—		(15)	806		—

Balance at March 31, 2021	2,923	$	292	$	43,852	$	(1,544)	$	22,204	692	$	(27,199)	$	68
Net Earnings	—	—		—		—		1,055		—	—		6
Other Comprehensive Income	—	—		—		26		—		—	—		—
Cash dividends declared(a)	—	—		—		—		(1,091)		—	—		—
Stock repurchase program	—	—		—		—		—		19	(1,235)		—
Stock compensation	—	—		212		—		—		(10)	236		—
Distributions	—	—		—		—		—		—	—		(8)
Balance at June 30, 2021	2,923	292		44,064		(1,518)		22,168		701	(28,198)		66
Net Earnings	—	—		—		—		1,546		—	—		5
Other Comprehensive Income	—	—		—		94		—		—	—		—
Cash dividends declared(a)	—	—		—		—		(1,089)		—	—		—
Stock repurchase program	—	—		—		—		—		7	(487)		—
Stock compensation	—	—		228		—		—		(5)	113		—
Distributions	—	—		—		—		—		—	—		—
Balance at September 30, 2021	2,923	$	292	$	44,292	$	(1,424)	$	22,625	703	$	(28,572)	$	71

(a) Cash dividends declared per common share were $0.49 for the three months ended March 31, 2021, June 30, 2021 and ~~2016, respectively. Refer to "—Note 4. Acquisitions, Divestitures and Licensing Arrangements" for additional information relating to the expected transfer of manufacturing operations~~September 30, 2021.

The following table summarizes changes in ~~Swords, Ireland to SK Biotek.~~

~~Note 13. OTHER INTANGIBLE ASSETS~~

Dollars in Millions September 30,
2017 December 31,
2016
Licenses $ 564
$ 564
Developed technology rights 2,357
2,357
Capitalized software 1,339
1,441
IPRD 32
107
Gross other intangible assets 4,292
4,469
Less accumulated amortization (3,079 ) (3,084 )
Other intangible assets $ 1,213
$ 1,385

~~Amortization expense was $142 million and $134 million~~equity for the nine months ended September 30, ~~2017~~2020:


	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, 2019	2,923	$	292	$	43,709	$	(1,520)	$	34,474	672	$	(25,357)	$	100
Net Loss	—	—		—		—		(775)		—	—		9
Other Comprehensive Loss	—	—		—		(29)		—		—	—		—
Cash dividends declared(a)	—	—		—		—		(1,028)		—	—		—
Share repurchase program	—	—		—		—		—		1	(81)		—
Stock compensation	—	—		(455)		—		—		(13)	681		—
Distributions	—	—		—		—		—		—	—		(43)
Balance at March 31, 2020	2,923	$	292	$	43,254	$	(1,549)	$	32,671	660	$	(24,757)	$	66
Net Loss	—	—		—		—		(85)		—	—		5
Other Comprehensive Loss	—	—		—		(7)		—		—	—		—
Cash dividends declared(b)	—	—		—		—		(1,021)		—	—		—
Stock repurchase program	—	—		1,400		—		—		16	(1,400)		—
Stock compensation	—	—		(210)		—		—		(7)	506		—
Distributions	—	—		—		—		—		—	—		(5)
Balance at June 30, 2020	2,923	292		44,444		(1,556)		31,565		669	(25,651)		66
Net Earnings	—	—		—		—		1,872		—	—		6
Other Comprehensive Loss	—	—		—		(143)		—		—	—		—
Cash dividends declared(b)	—	—		—		—		(1,023)		—	—		—

Stock compensation	—	—		(9)		—		—		(6)	367		—

Balance at September 30, 2020	2,923	$	292	$	44,435	$	(1,699)	$	32,414	663	$	(25,284)	$	72

(a) Cash dividends declared per common share were $0.45 for the three months ended March 31, 2020, June 30, 2021 and ~~2016, respectively.~~September 30, 2020.

~~Note 14. ACCRUED LIABILITIES~~

Dollars in Millions September 30,
2017 December 31,
2016
Rebates and returns $ 1,901
$ 1,680
Employee compensation and benefits 702
818
Research and development 689
718
Dividends 639
660
Branded Prescription Drug Fee 251
234
Royalties 249
246
Restructuring 121
90
Pension and postretirement benefits 41
44
Litigation and other settlements 35
43
Other 790
738
Accrued liabilities $ 5,418
$ 5,271

~~Note~~ 15~~. EQUITY~~

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 January 1, 2016 2,208
$ 221
$ 1,459
$ (2,468 ) $ 31,613
539
$ (16,559 ) $ 158
Net earnings —
—
—
—
3,563
—
—
46
Other comprehensive loss —
—
—
(267 ) —
—
—
—
Cash dividends declared —
—
—
—
(1,904 ) —
—
—
Stock repurchase program —
—
—
—
—
4
(231 ) —
Stock compensation —
—
191
—
—
(6 ) (5 ) —
Distributions —
—
—
—
—
—
—
(36 )
Balance at September 30, 2016 2,208
$ 221
$ 1,650
$ (2,735 ) $ 33,272
537
$ (16,795 ) $ 168

Balance at December 31, 2016 2,208
$ 221
$ 1,725
$ (2,503 ) $ 33,513
536
$ (16,779 ) $ 170
Accounting change - cumulative effect^(a)
—
—
—
—
(787 ) —
—
—
Adjusted balance at January 1, 2017 2,208
$ 221
$ 1,725
$ (2,503 ) $ 32,726
536
$ (16,779 ) $ 170
Net earnings —
—
—
—
3,335
—
—
28
Other comprehensive income —
—
—
82
—
—
—
—
Cash dividends declared —
—
—
—
(1,920 ) —
—
—
Stock repurchase program —
—
—
—
—
40
(2,226 ) —
Stock compensation —
—
120
—
—
(5 ) 2
—
Variable interest entity —
—
—
—
—
—
—
(59 )
Distributions —
—
—
—
—
—
—
(8 )
Balance at September 30, 2017 2,208
$ 221
$ 1,845
$ (2,421 ) $ 34,141
571
$ (19,003 ) $ 131


~~(a)~~	~~Refer to "—Note 1. Basis of Presentation and Recently Issued Accounting Standards" for additional information.~~

BMS has a ~~stock~~share repurchase program, authorized by its Board of Directors, allowing for repurchases ~~in the open market or through private transactions, including plans established in accordance with Rule 10b5-1 under the Securities Exchange Act~~ of ~~1934.~~its shares. The ~~stock~~share repurchase program does not obligate us to repurchase any specific number of shares, does not have ana specific expiration date and may be suspended or discontinued at any time. Treasury stock is recognized at the cost to reacquire the shares. Shares issued from treasury are recognized utilizing the first-in first-out method.

The outstanding share repurchase authority authorization under the program was $4.4 billion as of December 31, 2020. In January 2021, the Board of Directors approved an increase of $2.0 billion to the share repurchase authorization for BMS’s common stock. BMS repurchased approximately ~~3.8~~54 million shares of its common stock for ~~$226 million~~$3.5 billion during the ~~three~~nine months ended September 30, ~~2017.~~2021. The remaining share repurchase capacity under the share repurchase program was approximately $2.9 billion as of September 30, 2021.

BMS repurchased 1.4 million shares of its common stock for $81 million in the nine months ended September 30, 2020.

In ~~February 2017,~~the fourth quarter of 2019, BMS executed accelerated share repurchase (“ASR”) agreements to repurchase an aggregate $2$7 billion of common stock. The ~~agreements were~~ASR was funded ~~through a combination~~with cash on-hand. In the fourth quarter of ~~debt and cash. In February 2017, an initial delivery of~~2019, approximately ~~28.7~~99 million shares of ~~BMS~~ common stock ~~representing approximately 80%~~(80% of the ~~notional amount of the agreements, was~~$7 billion aggregate repurchase price) were received by BMS and included in treasury stock. ~~Upon settlement~~In the second quarter of 2020, the ~~accelerated share repurchase agreements in May 2017, BMS received an additional 7.8~~agreement was settled and approximately 16 million shares ~~determined using the volume-weighted average price~~ of ~~BMS~~ common stock ~~during the term of the transaction.~~were received by BMS and transferred to treasury stock.

The components of ~~other comprehensive income/(loss)~~Other Comprehensive Income/(Loss) were as follows:


	2021						2020
Dollars in Millions	Pretax		Tax		After Tax		Pretax		Tax		After Tax
Three Months Ended September 30,
Derivatives qualifying as cash flow hedges:
Unrealized gains/(losses)	$	93	$	(13)	$	80	$	(128)	$	10	$	(118)
Reclassified to net earnings(a)	37		(4)		33		(17)		3		(14)
Derivatives qualifying as cash flow hedges	130		(17)		113		(145)		13		(132)

Pension and postretirement benefits:
Actuarial losses	(4)		1		(3)		(16)		3		(13)
Amortization(b)	10		(2)		8		9		(2)		7
Settlements(b)	2		—		2		3		(1)		2
Pension and postretirement benefits	8		(1)		7		(4)		—		(4)

Available-for-sale debt securities:
Unrealized (losses)/gains	(3)		—		(3)		(4)		2		(2)

Foreign currency translation	(18)		(5)		(23)		(16)		11		(5)

Other Comprehensive Income/(Loss)	$	117	$	(23)	$	94	$	(169)	$	26	$	(143)


																				2021						2020
Dollars in Millions																			Dollars in Millions	Pretax		Tax		After Tax		Pretax		Tax		After Tax
Nine Months Ended September 30,																			Nine Months Ended September 30,
Derivatives qualifying as cash flow hedges:																			Derivatives qualifying as cash flow hedges:
Unrealized gains/(losses)																			Unrealized gains/(losses)	$	314	$	(27)	$	287	$	(65)	$	4	$	(61)
Reclassified to net earnings(a)																			Reclassified to net earnings(a)	126		(14)		112		(69)		9		(60)
Derivatives qualifying as cash flow hedges																			Derivatives qualifying as cash flow hedges	440		(41)		399		(134)		13		(121)

Pension and postretirement benefits:																			Pension and postretirement benefits:
Actuarial losses																			Actuarial losses	18		(2)		16		(28)		6		(22)
Amortization(b)																			Amortization(b)	29		(7)		22		27		(5)		22
Settlements(b)																			Settlements(b)	8		(1)		7		7		(2)		5
Pension and postretirement benefits																			Pension and postretirement benefits	55		(10)		45		6		(1)		5

Available-for-sale debt securities:																			Available-for-sale debt securities:
Unrealized (losses)/gains																			Unrealized (losses)/gains	(9)		2		(7)		10		(2)		8
Realized losses																			Realized losses	—		—		—		(1)		—		(1)
Available-for-sale debt securities:																			Available-for-sale debt securities:	(9)		2		(7)		9		(2)		7

Foreign currency translation																			Foreign currency translation	(6)		(16)		(22)		(81)		11		(70)

Other Comprehensive Income/(Loss)																			Other Comprehensive Income/(Loss)	$	480	$	(65)	$	415	$	(200)	$	21	$	(179)

	2017									2016
	Pretax			Tax			After tax			Pretax			Tax			After tax
Three Months Ended September 30,
Derivatives qualifying as cash flow hedges:
Unrealized losses	$	(28	)	$	12		$	(16	)	$	(14	)	$	4		$	(10	)
Reclassified to net earnings^(a)	21			(6		)	15			21			(7		)	14
Derivatives qualifying as cash flow hedges	(7		)	6			(1		)	7			(3		)	4
Pension and postretirement benefits:
Actuarial gains/(losses)	(5		)	2			(3		)	72			(26		)	46
Amortization^(b)	19			(11		)	8			20			(7		)	13
Curtailments and settlements^(c)	21			(8		)	13			19			(6		)	13
Pension and postretirement benefits	35			(17		)	18			111			(39		)	72
Available-for-sale securities:
Unrealized gains/(losses)	28			(5		)	23			(8		)	4			(4		)
Realized gains^(c)	(1		)	—			(1		)	(4		)	—			(4		)
Available-for-sale securities	27			(5		)	22			(12		)	4			(8		)
Foreign currency translation	(10		)	17			7			(2		)	3			1
	$	45		$	1		$	46		$	104		$	(35	)	$	69

Nine Months Ended September 30,
Derivatives qualifying as cash flow hedges:
Unrealized losses	$	(81	)	$	31		$	(50	)	$	(199	)	$	66		$	(133	)
Reclassified to net earnings^(a)	(11		)	—			(11		)	12			(5		)	7
Derivatives qualifying as cash flow hedges	(92		)	31			(61		)	(187		)	61			(126		)
Pension and postretirement benefits:
Actuarial losses	(40		)	17			(23		)	(453		)	160			(293		)
Amortization^(b)	57			(22		)	35			56			(19		)	37
Curtailments and settlements^(c)	96			(34		)	62			66			(23		)	43
Pension and postretirement benefits	113			(39		)	74			(331		)	118			(213		)
Available-for-sale securities:
Unrealized gains	49			(7		)	42			29			(13		)	16
Realized (gains)/losses^(c)	(1		)	—			(1		)	30			—			30
Available-for-sale securities	48			(7		)	41			59			(13		)	46
Foreign currency translation	(8		)	36			28			20			6			26
	$	61		$	21		$	82		$	(439	)	$	172		$	(267	)

(a)Included in Cost of products sold.


~~(a)~~	~~Included in cost of products sold~~


~~(b)~~	~~Included in cost of products sold, research and development and marketing, selling and administrative expenses~~


~~(c)~~	~~Included in other (income)/expense~~

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

The accumulated balances related to each component of ~~other comprehensive loss,~~Other Comprehensive Income/(Loss), net of taxes, were as follows:


Dollars in Millions	September 30, 2021		December 31, 2020
Derivatives qualifying as cash flow hedges	$	162	$	(237)
Pension and postretirement benefits	(929)		(974)
Available-for-sale debt securities	4		11
Foreign currency translation	(661)		(639)
Accumulated other comprehensive loss	$	(1,424)	$	(1,839)

Dollars in Millions September 30,
2017 December 31, 2016
Derivatives qualifying as cash flow hedges $ (23 ) $ 38
Pension and other postretirement benefits (2,023 ) (2,097 )
Available-for-sale securities 34
(7 )
Foreign currency translation (409 ) (437 )
Accumulated other comprehensive loss $ (2,421 ) $ (2,503 )

Note 16~~. PENSION AND POSTRETIREMENT~~16. EMPLOYEE STOCK BENEFIT PLANS

~~The net periodic~~Stock-based compensation expense was as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
Dollars in Millions	2021		2020		2021		2020
Cost of products sold	$	14	$	9	$	44	$	28
Marketing, selling and administrative	59		81		184		255
Research and development	66		78		210		261
Other (income)/expense, net	3		17		12		64
Total stock-based compensation expense	$	142	$	185	$	450	$	608

Income tax benefit(a)	$	29	$	38	$	93	$	124

(a) Income tax benefit ~~cost/(credit)~~excludes excess tax benefits from share-based compensation awards that were vested or exercised of ~~defined benefit pension plans includes:~~

Three Months Ended September 30, Nine Months Ended September 30,
Dollars in Millions 2017 2016 2017 2016
Service cost – benefits earned during the year $ 7
$ 6
$ 19
$ 19
Interest cost on projected benefit obligation 48
45
142
145
Expected return on plan assets (104 ) (104 ) (308 ) (314 )
Amortization of prior service credits (1 ) (1 ) (3 ) (3 )
Amortization of net actuarial loss 20
22
61
62
Curtailments and settlements 22
19
91
66
Special termination benefits —
—
—
1
Net periodic benefit cost/(credit) $ (8 ) $ (13 ) $ 2
$ (24 )

Pension settlement charges were recognized after determining that the annual lump sum payments will likely exceed the annual interest and service costs for the primary and certain other U.S. pension plans. The charges included the acceleration of a portion of unrecognized actuarial losses. Non-current pension liabilities were $477 million at September 30, 2017 and $600 million at December 31, 2016. Defined contribution plan expense in the U.S. was $46$7 million and ~~$49~~$36 million for the three and nine months ended September 30, ~~2017~~2021 and ~~2016, respectively, and $142~~$1 million and ~~$141~~$29 million for the three and nine months ended September 30, 2020, respectively.

The number of units granted and the weighted-average fair value on the grant date for the nine months ended September 30, ~~2017 and 2016, respectively.~~2021 were as follows:


Units in Millions	Units	Weighted-Average Fair Value

Restricted stock units	8.4	$	56.72
Market share units	1.0	58.04
Performance share units	1.5	59.04


Dollars in Millions	Stock Options		Restricted Stock Units		Market Share Units		Performance Share Units
Unrecognized compensation cost	$	13	$	793	$	60	$	103
Expected weighted-average period in years of compensation cost to be recognized	0.8		2.7		3.0		1.8

Note 17. LEGAL PROCEEDINGS AND CONTINGENCIES

~~The Company~~

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, suppliers, service providers, licensees, 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. The Company recognizes accruals for such contingencies when it is probable that a liability will be incurred and the amount of loss can be reasonably estimated. These matters 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. Legal proceedings that are ~~material~~significant or that ~~the Company~~BMS believes could become significant or material are described below.

~~Although the Company~~

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 defenses in ~~these~~the matters, ~~there~~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 ~~that~~ any other or future lawsuits, claims, government investigations or other legal proceedings will not be ~~material. Unless otherwise noted, the Company is unable~~material to ~~assess the outcome~~BMS’s financial position, results of ~~the respective litigation nor is it able to provide an estimated range of potential loss.~~operations or cash flows for a particular period. Furthermore, failure to enforce ~~our~~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

Plavix* ~~— Australia~~

Anti-PD-1 Antibody Litigation

In September 2015, Dana-Farber Cancer Institute (“Dana-Farber”) filed a complaint in the U.S. District Court for the District of Massachusetts seeking to correct the inventorship on up to 6 related U.S. patents directed to methods of treating cancer using PD-1 and PD-L1 antibodies. Specifically, Dana-Farber is seeking to add two scientists as inventors to these patents. In October 2017, Pfizer was allowed to intervene in this case alleging that one of the scientists identified by Dana-Farber was employed by a company eventually acquired by Pfizer during the relevant period. In February 2019, BMS settled the lawsuit with Pfizer. A bench trial in the lawsuit with Dana-Farber took place in February 2019. In May 2019, the District Court issued an opinion ruling that the two scientists should be added as inventors to the patents, which was affirmed on appeal. In May 2021, the U.S. Supreme Court declined to consider the case. In June 2019, Dana-Farber filed a new lawsuit in the District of Massachusetts against BMS seeking damages as a result of the District Court’s decision adding the scientists as inventors. In February 2021, BMS filed a motion to dismiss the complaint. In August 2021, the Court denied the motion to dismiss, but ruled that Dana-Farber’s claims for damages before May 17, 2019—the date of the District Court’s ruling that Dana-Farber was a co-inventor of the patents—are preempted by federal patent law. Discovery is proceeding.

CAR T

In October 2017, Juno and Sloan Kettering Institute for Cancer Research (“SKI”) filed a complaint for patent infringement against Kite Pharma, Inc. (“Kite”) in the U.S. District Court for the Central District of California. The complaint alleged that Kite’s Yescarta* product infringes certain claims of U.S. Patent No. 7,446,190 (the “’190 Patent”) concerning CAR T cell technologies. Kite filed an answer and counterclaims asserting non-infringement and invalidity of the ’190 Patent. In December 2019, following an eight-day trial, the jury rejected Kite’s defenses, finding that Kite willfully infringed the ’190 Patent and awarding to Juno and SKI a reasonable royalty consisting of a $585 million upfront payment and a 27.6% running royalty on Kite’s sales of Yescarta* through the expiration of the ’190 Patent in August 2024. In January 2020, Kite renewed its previous motion for judgment as a matter of law and also moved for a new trial, and Juno filed a motion seeking enhanced damages, supplemental damages, ongoing royalties, and prejudgment interest. In March 2020, the Court denied both of Kite’s motions in their entirety. In April 2020, the Court granted in part Juno’s motion and entered a final judgment awarding to Juno and SKI approximately $1.2 billion in royalties, interest and enhanced damages and a 27.6% running royalty on Kite’s sales of Yescarta* from December 13, 2019 through the expiration of the ’190 Patent in August 2024. In April 2020, Kite appealed the final judgment to the U.S. Court of Appeals for the Federal Circuit and the Court held an oral hearing on July 6, 2021. In August 2021, a Federal Circuit panel reversed the jury verdict and district court decision and found the ’190 Patent to be invalid. Juno and SKI plan to appeal the Federal Circuit panel’s decision.

Eliquis - Europe

In November 2020 and January 2021, Sandoz Limited (“Sandoz”) and Teva Pharmaceutical Industries Ltd. (“Teva Limited”), respectively, filed lawsuits in the United Kingdom seeking revocation of the UK apixaban composition of matter patent and related Supplementary Protection Certificate. BMS subsequently filed counterclaims for infringement in both actions. A trial is scheduled to begin in early 2022.

There are similar lawsuits filed in France, Italy, the Netherlands, the Republic of Ireland, and Sweden seeking revocation of a composition of matter patent relating to Eliquis.

Additional infringement and invalidity actions involving Eliquis patents may be filed in various countries in Europe in the coming months.

Eliquis - U.S.

In 2017, BMS received Notice Letters from NaN generic companies notifying BMS that they had filed aNDAs containing paragraph IV certifications seeking approval of generic versions of Eliquis. As ~~previously disclosed,~~ a result, 2 Eliquis patents listed in the FDA Orange Book are being challenged: the composition of matter patent claiming apixaban specifically and a formulation patent. In response, BMS, along with its partner Pfizer, initiated patent infringement actions under the Hatch-Waxman Act against all generic filers in the U.S. District Court for the District of Delaware in April 2017. In August 2017, the U.S. Patent and Trademark Office granted patent term restoration to the composition of matter patent to November 2026, thereby restoring the term of the Eliquis composition of matter patent, which is BMS’s basis for projected LOE. BMS settled with a number of aNDA filers. These settlements do not affect BMS’s projected LOE for Eliquis. A trial with the remaining aNDA filers took place in late 2019. In August 2020, the U.S. District Court issued a decision finding that the remaining aNDA filers’ products infringed the Eliquis composition of matter and formulation patents and that both Eliquis patents are not invalid. In September 2021, the Federal Circuit affirmed the lower court decision.

Plavix* - Australia

Sanofi was notified that, in August 2007, GenRx Proprietary Limited ~~(GenRx)~~(“GenRx”) obtained regulatory approval of an application for clopidogrel bisulfate 75mg tablets in Australia. GenRx, formerly a subsidiary of Apotex Inc. ~~(Apotex)~~, ~~has since~~subsequently changed its name to ~~Apotex.~~Apotex (“GenRx-Apotex”). In August 2007, ~~Apotex~~GenRx-Apotex filed an application in the Federal Court of Australia ~~(the Federal Court)~~ 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 ~~the Company~~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 ~~Apotex case, and a trial occurred in April 2008.~~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. ~~The Company~~BMS and Sanofi filed notices of appeal in the Full Court of the Federal Court of Australia ~~(Full Court)~~(“Full Court”) appealing the holding of invalidity of the claim covering clopidogrel and its pharmaceutically acceptable salts, process claims, and pharmaceutical composition ~~claims which have stayed the Federal Court’s ruling. Apotex filed a notice of appeal appealing~~claims. GenRx-Apotex appealed the holding of validity of the clopidogrel bisulfate, hydrochloride, hydrobromide, and taurocholate claims. ~~A hearing on the appeals occurred in February 2009.~~ On September 29, 2009, the Full Court held all of the claims of Patent No. 597784 invalid. In ~~November 2009, the Company and Sanofi applied to~~March 2010, the High Court of Australia ~~(High Court) for special leave to appeal the judgment of the Full Court. In March 2010, the High Court~~ denied ~~the Company~~a request by BMS and ~~Sanofi’s request~~Sanofi to hear ~~the~~an appeal of the Full Court decision. The case ~~has been~~was remanded to the Federal Court for further proceedings related to damages sought by ~~Apotex.~~GenRx-Apotex. BMS and GenRx-Apotex settled, and the GenRx-Apotex case was dismissed. The Australian government ~~has~~ intervened in this matter seeking maximum damages up to 449 million AUD ($326 million), plus interest, which would be split between BMS and ~~is also seeking damages~~Sanofi, for alleged losses experienced for paying a higher price for branded Plavix* during the period when the injunction was in place. ~~The Company~~BMS and ~~Apotex have settled~~Sanofi dispute that the ~~Apotex case, and the case has been dismissed. The~~ Australian ~~government's claim~~government is

~~still pending and a~~ entitled to any damages. A trial was concluded in September 2017. ~~The Company is expecting~~In April 2020, the Federal Court issued a decision ~~in 2018. It is not possible at this time to predict the outcome of~~dismissing the Australian government’s claim ~~or its impact on the Company.~~

~~Sprycel~~ ~~- European Union~~

for damages. In May ~~2013, Apotex, Actavis Group PTC ehf, Generics [UK] Limited (Mylan)~~2020, the Australian government appealed the Federal Court’s decision and an ~~unnamed company filed oppositions in the EPO seeking revocation of European Patent No. 1169038 (the ‘038 patent) covering dasatinib, the active ingredient in~~ ~~Sprycel~~. The ‘038 patent is scheduled to expire in April 2020 (excluding potential term extensions). On January 20, 2016, the Opposition Division of the EPO revoked the ‘038 patent. In May 2016, the Company appealed the EPO’s decision to the EPO Board of Appeal. In February 2017, the EPO Board of Appeal upheld the Opposition Division's decision, and revoked the ‘038 patent. Orphan drug exclusivity and data exclusivity for ~~Sprycel~~ in the EU expired in November 2016. The EPO Board of Appeal's decision does not affect the validity of our other Sprycel patents within and outside Europe, including different patents that cover the monohydrate form of dasatinib and the use of dasatinib to treat CML. Additionally,appeal hearing concluded in February ~~2017, the EPO Board~~2021.

Pomalyst - Canada

Celgene received a Notice of ~~Appeal reversed and remanded~~Allegation in January 2020 from Natco Pharma (Canada) Inc. (“Natco Canada”) notifying Celgene that it had filed an ~~invalidity decision on European Patent No. 1610780 and its claim~~Abbreviated New Drug Submission (“aNDS”) with Canada’s Minister of Health with respect to ~~the use~~certain of ~~dasatinib to treat CML, which the EPO's Opposition Division had revoked in October 2012. The Company intends to take appropriate legal actions to protect~~ ~~Sprycel. We may experience a decline in European revenues in the event that generic dasatinib product enters the market.~~

~~Anti-PD-1 Antibody Patent Oppositions and Litigation~~

In September 2015, Dana-Farber Cancer Institute (Dana-Farber) filed a complaint in Massachusetts federal court seeking to correct the inventorship of five related U.S. patents directed to methods of treating cancer using PD-1 and PD-L1 antibodies. Specifically, Dana-FarberCelgene’s Canadian patents. Natco Canada is seeking to ~~add two scientists as inventors~~market a generic version of Pomalyst in Canada. In response, Celgene initiated a patent infringement action in the Federal Court of Canada. Natco Canada alleges that the asserted patents are invalid and/or not infringed. In September 2021, Celgene and Natco Canada entered into a confidential settlement agreement and the case was discontinued.

Celgene received a second Notice of Allegation in November 2020 from Natco Canada notifying Celgene that it had filed a second aNDS with Canada’s Minister of Health with respect to ~~these~~certain of Celgene’s Canadian patents. In response, Celgene initiated a patent infringement action in the Federal Court of Canada. Natco Canada alleges that the asserted patents are invalid and/or not infringed. In September 2021, Celgene and Natco Canada entered into a confidential settlement agreement and the case was discontinued.

Pomalyst - U.S.

Beginning in 2017, ~~Pfizer filed a motion seeking to intervene~~Celgene received Notice letters on behalf of, among others that settled in ~~this case alleging that one of the scientists identified by Dana-Farber was employed by a company eventually acquired by Pfizer. This motion has not been acted upon by the court.~~

~~Eliquis~~ ~~Patent Litigation~~

~~In February, March~~previous reporting periods, Hetero Labs Limited, Hetero Labs Limited Unit-V, Hetero Drugs Limited, Hetero USA, Inc. (collectively, “Hetero”) and ~~April 2017, twenty-five generic companies sent the Company Paragraph-IV certification letters informing the Company~~Mylan Pharmaceuticals Inc. notifying Celgene that they had filed ~~abbreviated new drug applications (ANDAs)~~aNDAs containing paragraph IV certifications seeking approval ofto market generic versions of ~~Eliquis. As a result, two~~ ~~Eliquis~~Pomalyst in the U.S. In response, Celgene filed patent infringement actions against the companies in the U.S. District Court for the District of New Jersey asserting certain FDA Orange Book-listed patents and the companies filed answers, counterclaims and declaratory judgment actions alleging that the asserted patents are invalid, unenforceable, and not infringed. These litigations were subsequently consolidated.

In February and March 2019, Celgene filed additional patent infringement actions in the U.S. District Court for the District of New Jersey against the companies asserting certain patents that are not listed in the FDA Orange Book ~~have now~~and that cover polymorphic forms of pomalidomide, and the companies filed answers and/or counterclaims alleging that each of these patents is invalid and/or not infringed. These actions were consolidated with the earlier-filed actions against the companies. In March 2020, Celgene subsequently filed additional patent infringement actions in the U.S. District Court for the District of New Jersey against each of the companies asserting a newly-issued patent that is listed in the FDA Orange Book and that covers formulations comprising pomalidomide. The companies each filed responsive pleadings alleging that the patent is invalid and not infringed. The Court consolidated these additional litigations with the previously-consolidated litigations.

In September 2020, the Court granted Mylan Pharmaceuticals Inc.’s motion to dismiss, and Celgene appealed that decision. The Federal Circuit held an oral hearing on Celgene’s appeal on September 2, 2021.

In August 2021, Celgene entered into a confidential settlement agreement with Hetero, settling all outstanding claims in the litigation with Hetero.

In June 2019, Celgene received a Notice Letter from Dr. Reddy’s Laboratories, Ltd. and Dr. Reddy’s Laboratories, Inc. (together, “DRL”) notifying Celgene that they had filed an aNDA containing paragraph IV certifications seeking approval to market a generic version of Pomalyst in the U.S. In response, Celgene initiated a patent infringement action against DRL in the U.S. District Court for the District of New Jersey asserting certain FDA Orange Book-listed patents, and DRL filed an answer and counterclaims alleging that each of the patents is invalid and/or not infringed. In March 2020, Celgene filed an additional patent infringement action in the U.S. District Court for the District of New Jersey against DRL asserting a newly-issued patent that is listed in the FDA Orange Book and that covers formulations comprising pomalidomide, which has been ~~challenged:~~consolidated with the ~~composition of matter patent claiming apixaban specifically and a formulation patent.~~above DRL case. In April ~~2017,~~2021, DRL received tentative approval from the ~~Company, along with~~FDA of its ~~partner Pfizer, initiated~~aNDA. The Court has not set a trial date in this consolidated action.

In February 2021, Celgene filed an additional patent ~~lawsuits under~~infringement action in the ~~Hatch-Waxman Act~~U.S. District Court for the District of New Jersey against ~~all~~DRL asserting certain patents that are not listed in the FDA Orange Book and that cover polymorphic forms of pomalidomide. No trial date has been set for this matter.

Revlimid - U.S.

Celgene has received Notice Letters on behalf of, among others that settled in previous reporting periods, Hetero; Lupin Limited (“Lupin”); Hikma Pharmaceuticals USA, Inc. (“Hikma”); Biocon Pharma Limited, Biocon Limited, and Biocon Pharma, Inc. (“Biocon”); and Torrent Pharmaceuticals Limited and Torrent Pharma Inc. (“Torrent”) notifying Celgene that they had filed aNDAs containing paragraph IV certifications seeking approval to market generic ~~filers~~versions of Revlimid in ~~federal district courts~~the U.S. In response, Celgene filed patent infringement actions against the companies in ~~Delaware and West Virginia.~~the U.S. District Court for the District of New Jersey asserting certain FDA Orange Book-listed patents as well as other litigations asserting other non-FDA Orange Book-listed patents against certain defendants, who have filed answers and/or counterclaims alleging that the asserted patents are invalid and/or not infringed. No trial date has been scheduled in any of these actions. In August ~~2017,~~and September 2021, Celgene entered into confidential settlement agreements with Torrent, Biocon and Hetero, settling all outstanding claims in the litigations with Torrent, Biocon and Hetero.

Sprycel - U.S.

In August 2021, BMS received a Notice Letter from Alembic Pharmaceuticals, Ltd notifying BMS that it had filed an aNDA containing paragraph IV certifications seeking approval of a generic version of Sprycel in the U.S. and challenging two FDA Orange Book-listed monohydrate form patents expiring in 2025 and 2026. In response, BMS filed a patent infringement action in the U.S. District Court for the District of New Jersey.

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 the Company 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 ~~Trademark Office granted patent term restoration to the composition of matter patent, thereby restoring the term of the~~ ~~Eliquis~~ ~~composition of matter patent, which~~Actelion is ~~the Company’s basis for projected loss of exclusivity, from February 2023 to November 2026. In September 2017, the Company settled its lawsuit with Teva Pharmaceuticals USA, Inc.~~seeking damages and ~~the parties agreed to dismiss the case. The settlement does not impact the Company’s projected loss of exclusivity for~~ ~~Eliquis~~.injunctive relief.

PRICING, SALES AND PROMOTIONAL PRACTICES LITIGATION

Plavix* State Attorneys General Lawsuits

~~The Company~~BMS and certain ~~affiliates of~~ Sanofi entities are defendants in consumer protection ~~and/or false advertising~~ actions brought by ~~several states~~the attorneys general of Hawaii and New Mexico relating to the labeling, sales ~~and~~and/or promotion of Plavix*Plavix*. ItA trial in the Hawaii matter occurred in 2020. In February 2021, the Court 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 disagree with the decision and are appealing it. BMS remains confident in the merits of its case and its likelihood of success on appeal and BMS does not believe establishing a reserve is ~~not possible at~~warranted for this ~~time to reasonably assess~~matter. A trial in the ~~outcome of these lawsuits or their potential impact on~~New Mexico matter has been set for the ~~Company.~~court’s April 2022 trial docket.

PRODUCT LIABILITY LITIGATION

~~The Company~~

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, ~~the Company~~BMS also faces unfiled claims involving its products.

Plavix*

~~As previously disclosed, the Company~~

Abilify*

BMS and ~~certain affiliates of Sanofi~~Otsuka are ~~defendants~~co-defendants in ~~a number of individual lawsuits~~product liability litigation related to Abilify*. Plaintiffs allege Abilify* caused them to engage in ~~various state~~compulsive gambling and ~~federal courts claiming personal injury damage allegedly sustained after using~~ Plavix*~~. Over 5,000 claims involving injury plaintiffs as well as claims by spouses and/or~~ other ~~beneficiaries,~~impulse control disorders. There have been over 2,500 cases filed in state and federal courts and additional cases are pending in ~~various states including California, New Jersey, Delaware and New York. In February 2013, the~~Canada. The Judicial Panel on Multidistrict Litigation ~~granted~~consolidated the ~~Company~~federal court cases for pretrial purposes in the U.S. District Court for the Northern District of Florida. In February 2019, BMS and ~~Sanofi’s motion~~Otsuka entered into a master settlement agreement establishing a proposed settlement program to ~~establish a multi-district litigation (MDL) to coordinate Federal pretrial proceedings~~resolve all Abilify* compulsivity claims filed as of January 28, 2019 in Plavix* ~~product liability and related cases in New Jersey Federal Court. Following~~ the ~~United States Supreme Court’s June 2017 reversal of a California Supreme Court decision that had held that the California~~MDL as well as various state courts, ~~can exercise personal jurisdiction over~~including California and New Jersey. To date, approximately 2,700 cases, comprising approximately 3,900 plaintiffs, have been dismissed based on participation in the settlement program or failure to comply with settlement related court orders. In the U.S., less than 10 cases remain pending on behalf of plaintiffs, who either chose not to participate in the settlement program or filed their claims ~~of non-California residents, over 2,000 out-of-state resident plaintiffs' claims (including spouses and beneficiaries) previously~~after the settlement cut-off date. There are eleven cases pending in Canada (four class actions, seven individual injury claims). Out of the ~~California state court~~eleven cases, only two are active (the class actions in Quebec and Ontario). Both class actions have now been ~~or are in~~certified and will proceed separately, subject to a potential further appeal of the process of being dismissed. Some number of these California non-resident plaintiffs’ claims may be re-filed in federal court. It is not possible at this time to reasonably assess the outcome of these lawsuits or the potential impact on the Company.Ontario class certification decision.

Byetta*

Amylin, a former subsidiary of ~~the Company,~~BMS, and Lilly are co-defendants in product liability litigation related to Byetta*. ~~To date, there are over 500~~ This litigation involved approximately 590 separate lawsuits pending on behalf of approximately ~~2,000~~2,250 active plaintiffs (including pending settlements), which include injury plaintiffs as well as claims by spouses and/or other beneficiaries, in various courts in the U.S. The ~~Company has agreed in principle to resolve over 15 of these claims. The~~ majority of these cases have been brought by individuals who allege personal injury sustained after using Byetta*Byetta*, primarily pancreatic cancer, ~~and pancreatitis,~~ and, in some cases, claiming alleged wrongful death. The majority of cases ~~were~~are pending in Federal Court in San Diego in an MDL or in a coordinated proceeding in California Superior Court in Los Angeles ~~(JCCP)~~(“JCCP”). In ~~November 2015,~~April 2020 the ~~defendants'~~defendants filed a motion for summary judgment based on federal preemption ~~was granted~~and a motion for summary judgment based on the absence of general causation evidence in ~~both~~ the MDL and JCCP. Both motions were granted in March 2021 and April 2021, respectively. The orders will result in the ~~JCCP. The plaintiffs~~dismissal of all claims alleging an injury of pancreatic cancer in the MDL and JCCP. Plaintiffs initially appealed the MDL order, but subsequently filed a motion to dismiss their appeal as to Amylin and Lilly. That motion to dismiss was granted on October 5, 2021 making the MDL decision final as to Amylin and Lilly. Plaintiffs may seek appeals in the JCCP. As of September 30, 2021, Plaintiffs’ counsel have ~~appealed~~submitted dismissals with prejudice in exchange for a waiver of costs on behalf of approximately 1,086 plaintiffs (which includes injury plaintiffs and spouse/ beneficiary plaintiffs) in the MDL and JCCP alleging claims against Amylin and Lilly. Additional dismissals are anticipated. BMS sold Byetta* to ~~the U.S. Court~~AstraZeneca in February 2014 as part of ~~Appeals for the Ninth Circuit and the JCCP plaintiffs have appealed to the California Court of Appeal. Amylin has product liability insurance covering a substantial number of claims involving~~ Byetta*BMS’s global diabetes business divestiture and any additional liability to Amylin with respect to Byetta*Byetta* is expected to be shared ~~between the Company~~with AstraZeneca.

Onglyza*

BMS and ~~AstraZeneca. It is not possible to reasonably predict the outcome of any lawsuit, claim or proceeding or the potential impact on the Company.~~

Abilify*

~~The Company and Otsuka~~AstraZeneca 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. There have been over 400 cases filed in state and federal courts and several additional cases are pending in Canada. The Judicial Panel on Multidistrict Litigation has consolidated the federal court cases for pretrial purposes in the United States District Court for the Northern District of Florida.

~~Eliquis~~

~~The Company and Pfizer are co-defendants in product liability litigation related to~~ ~~Eliquis~~Onglyza*. Plaintiffs assert claims, including claims for wrongful death, as a result of ~~bleeding~~heart failure or other cardiovascular injuries they allege ~~was~~were caused by their use of ~~Eliquis~~Onglyza*. ~~The majority~~As of ~~these~~June 2021, claims are pending in state and federal court on behalf of approximately 270 individuals who allege they ingested the product and suffered an injury. In February 2018, the Judicial Panel on Multidistrict Litigation ordered all federal cases to be transferred to an MDL in the ~~United States~~U.S. District Court for the Eastern District of Kentucky. A significant majority of the claims are pending in the MDL, with others pending in a coordinated proceeding in California Superior Court in San Francisco (“JCCP”). In August 2021, the MDL and JCCP courts jointly heard evidence regarding the parties’ motions to exclude general causation experts, and on September 24, 2021, the JCCP court granted defendants’ motion to exclude plaintiffs’ only general causation expert and largely denied plaintiffs’ motions to exclude defendants’ general causation experts. The parties await a ruling on the motions from the MDL court. As part of BMS’s global diabetes business divestiture, BMS sold Onglyza* to AstraZeneca in February 2014 and any potential liability with respect to Onglyza* is expected to be shared with AstraZeneca.

SECURITIES LITIGATION

BMS Securities Class Action

Since February 2018, 2 separate putative class action complaints were filed in the U.S. District for the Northern District of California and in the U.S. District Court for the Southern District of New York against BMS, BMS’s Chief Executive Officer, Giovanni Caforio, BMS’s Chief Financial Officer at the time, Charles A. Bancroft and certain former and current executives of BMS. The case in California has been voluntarily dismissed. The remaining complaint alleges violations of securities laws for BMS’s disclosures related to the CheckMate-026 clinical trial in lung cancer. In September 2019, the Court granted BMS’s motion to dismiss, but allowed the plaintiffs leave to file an amended complaint. In October 2019, the plaintiffs filed an amended complaint. In September 2020, the Court granted BMS’s motion to dismiss the amended complaint with prejudice. The plaintiffs appealed the Court’s decision in October 2020. In October 2021, oral argument on the appeal was held in the U.S. Court of Appeals for the Second Circuit.

Celgene Securities Class Action

Beginning in March 2018, 2 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 new drug application 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 plaintiff’s 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 December 2020, the defendants sought leave to appeal the Court’s class certification decision, which was denied without prejudice in March 2021. No trial date has been scheduled.

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. 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, 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, and GIC Private Limited in September 2021, 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.

Contingent Value Rights Litigation

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 Corporation in November 2019. The successor trustee under the CVR Agreement alleges 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 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 successor trustee. The successor trustee seeks damages in an amount to be determined at trial and other relief, including interest and attorneys’ fees. BMS disputes the successor trustee’s allegations and filed a Motion to Dismiss on July 23, 2021. All discovery is stayed until there is a decision on the Motion to Dismiss.

On October 6, 2021, alleged 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 for violations of sections 14(a) and 20(a) of the Securities Exchange Act of 1934. The complaint alleges that the joint proxy statement dated February 22, 2019, seeking stockholder approval for 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 by a contractual milestone date, which was one of the conditions for payment to holders of Contingent Value Rights that would be issued by BMS in connection with the Celgene transaction. The complaint asserts claims against BMS and the members of its board of directors at the time of the joint proxy statement.

Nimbus

In August 2021, a complaint was filed by Nimbus Therapeutics, LLC and Nimbus Lakshmi, Inc. (collectively, “Nimbus”) in the U.S. District Court for the Southern District of New York against Celgene and BMS. The complaint relates to a warrant agreement for a tyrosine kinase 2 (“Tyk2”) product between Celgene and Nimbus Lakshmi, Inc. Nimbus’s complaint alleges breach of contract and violations of federal antitrust laws stemming from BMS’s acquisition of Celgene in 2019 as well as actions taken by Celgene to exercise or assign its rights under the agreement. In addition to damages, Nimbus seeks a declaratory judgment. On the same day it filed this complaint, Nimbus also sent Celgene and BMS a letter purporting to terminate the relevant warrant agreement under the same theories set forth in its complaint. BMS disputes Nimbus’s allegations and the validity of its attempts to terminate the warrant agreement. In September 2021, Celgene and BMS filed counterclaims against Nimbus, alleging breach of contract and tortious interference claims based on Nimbus’s efforts to prevent Celgene from acting on its rights under the warrant agreement and similarly seeking damages and a declaratory judgment. On October 14, 2021, the Court granted Celgene and BMS’s motion to preliminarily enjoin Nimbus from selling, transferring, encumbering, or otherwise disposing of, in part or in whole, the Tyk2 product until there is a final judgment on the merits. This case is scheduled to be ready for trial on February 17, 2022.

OTHER LITIGATION

Average Manufacturer Price Litigation

BMS is a defendant in a qui tam (whistleblower) lawsuit in the U.S. District Court for the Eastern District of Pennsylvania, in which the U.S. Government declined to intervene. The complaint alleges that BMS inaccurately reported its average manufacturer prices to the Centers for Medicare and Medicaid Services to lower what it owed. Similar claims have been filed against other companies. In January 2020, BMS reached an agreement in principle to resolve this matter subject to the negotiation of a definitive settlement agreement and other contingencies. In March 2021, BMS finalized an agreement with the U.S. government and qui tam relator to resolve the claims asserted in the lawsuit. BMS has paid $75 million plus interest to the federal and state ~~court~~governments. On July 30, 2021, the Company finalized individual settlement agreements with all 50 states and the District of Columbia, resolving related state law claims. On September 27, 2021 and consistent with the terms of the settlement agreements, the case against the Company was dismissed.

HIV Medication Antitrust Lawsuits

BMS and two other manufacturers of HIV medications are defendants in ~~Delaware. As of October 2017, there are over 150 cases~~related lawsuits pending in the ~~MDL~~Northern District of California. The lawsuits allege that the defendants’ agreements to develop and ~~state courts~~sell fixed-dose combination products for the treatment of HIV, including Atripla* and Evotaz, violate antitrust laws. The currently pending actions, asserted on behalf of indirect purchasers, were initiated in 2019 in the ~~United States~~Northern District of California and in 2020 in the Southern District of Florida. The Florida matter was transferred to the Northern District of California. In July 2020, the Court granted in part defendants’ motion to dismiss, including dismissing with prejudice plaintiffs’ claims as to an overarching conspiracy and plaintiffs’ theories based on the alleged payment of royalties after patent expiration. Other claims, however, remain. In September and October 2020, two purported class actions have also been filed asserting similar claims on behalf of direct purchasers. In March 2021, the Court dismissed one of the direct purchaser cases and limited the claims of the remaining direct purchaser case to those arising in 2016 or later. However, the Court gave plaintiffs leave to amend their complaints, and one ~~pending~~plaintiff filed an amended complaint on March 16, 2021. On September 22, 2021, two additional non-class action direct purchaser complaints were filed by a number of retail pharmacy and grocery store chains against BMS and two other manufacturers of HIV medications. These complaints make allegations similar to those raised in ~~Canada. Over 80~~the other federal court cases ~~have~~and the New Mexico state court case described below. No trial date has been ~~dismissed with prejudice~~scheduled for the case filed by the ~~MDL. Plaintiffs have appealed some~~retail pharmacies and grocery store chains. On October 13, 2021, BMS entered into a settlement agreement with the putative class of indirect purchasers. And on October 20, 2021, BMS reached an agreement in principle to settle claims filed by the putative class of direct purchasers. Both settlements are subject to court approval.

In February 2021, BMS and two other manufacturers of HIV medications were sued in State Court in New Mexico by the Attorney General of the ~~dismissed cases~~State of New Mexico in a case alleging that the defendants’ agreements to develop and sell various fixed-dose combination products for the treatment of HIV, including Atripla*, and agreements to settle certain patent litigation violate the antitrust laws of the State of New Mexico. No schedule has been set for the case.

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 ~~Second~~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 the claims of certain entities that opted out of the settlement.

In May 2018, Humana, Inc. (“Humana”) filed a lawsuit against Celgene in the Pike County Circuit Court of ~~Appeals.~~

~~SHAREHOLDER DERIVATIVE LITIGATION~~

~~Since December 2015, three shareholder derivative lawsuits were filed~~the Commonwealth of Kentucky. Humana’s complaint alleges Celgene engaged in unlawful off-label marketing in connection with sales of Thalomid and Revlimid and asserts claims against Celgene for fraud, breach of contract, negligent misrepresentation, unjust enrichment and violations of New ~~York state court against certain officers~~Jersey’s Racketeer Influenced and ~~directors of the Company.~~Corrupt Organizations Act. The ~~plaintiffs allege,~~complaint seeks, among other things, ~~breaches of fiduciary duty surrounding the Company’s previously disclosed October 2015 civil settlement with the Securities~~treble and ~~Exchange Commission of alleged Foreign Corrupt Practices Act violations in China in~~punitive damages, injunctive relief and attorneys’ fees and costs. In April 2019, Celgene filed a motion to dismiss Humana’s complaint, which the ~~Company agreed~~Court denied in January 2020. No trial date has been scheduled.

In March 2019, Humana 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 class action litigation. The complaint purports to assert claims on behalf of Humana and its subsidiaries in several capacities, including as a ~~payment~~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, and the Court has stayed discovery pending adjudication of ~~approximately $14.7 million in disgorgement, penalties and interest. As~~that motion. No trial date has been scheduled.

In March 2020, United HealthCare Services, Inc. (“UHS”), affiliates of ~~October 2017, all three~~which opted out of the ~~lawsuits have~~first settlement in the Thalomid and Revlimid Antitrust Class Action Litigation, filed a lawsuit against Celgene in the U.S. District Court for the District of Minnesota. UHS’s complaint makes largely the same claims and allegations as were made in the class action litigation in addition to certain claims regarding donations directed to copay assistance. The complaint purports to assert claims on behalf of UHS 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 December 2020, Celgene’s motion to transfer the action to the District of New Jersey was granted and the case is now pending in that Court. In January 2021, Celgene filed a motion to dismiss UHS’s complaint, which the Court administratively terminated in June 2021 pending its decision on Celgene’s pending motion to dismiss Humana’s complaint. No trial date has been ~~dismissed.~~scheduled.

In May 2020, Celgene filed suit against Humana Pharmacy, Inc. (“HPI”), a Humana subsidiary, in Delaware Superior Court. Celgene’s complaint alleges that HPI breached its contractual obligations to Celgene by assigning claims to Humana that Humana is now asserting. The ~~Company received~~complaint seeks damages for HPI’s breach as well as a ~~notice of appeal~~declaratory judgment. In September 2020, HPI filed a motion to dismiss Celgene’s complaint, which was denied in February 2021. A trial has been scheduled for ~~one~~March 2023.

In July 2020, Blue Cross Blue Shield Association (“BCBSA”) sued Celgene and BMS on behalf of the ~~lawsuits~~Federal Employee Program in the U.S. District Court for the District of Columbia. BCBSA’s complaint makes largely the same claims and allegations as were made in the class action litigation. In April 2021, the parties’ joint motion to transfer the action to the District of New Jersey was granted and the case is now pending in that Court. No trial date has been scheduled.

In August 2020, BCBSM Inc., Health Care Service Corporation (“HCSC”), Blue Cross and Blue Shield of Florida Inc., and Molina Healthcare, Inc. (“Molina”) sued Celgene and BMS in a Minnesota state court. The complaint makes largely the same claims and allegations as were made in the class action litigation but adds allegations on behalf of HCSC only as to alleged off-label marketing of Thalomid and Revlimid. In September ~~2017.~~2020, Celgene and BMS removed the action to the U.S. District Court for the District of Minnesota. In March 2021, that Court denied plaintiffs’ motion to remand the action to state court, dismissed Molina for lack of personal jurisdiction and granted defendants’ motion to transfer the action to the District of New Jersey. The case is now pending in the District of New Jersey. No trial date has been scheduled.

In January 2021, Cigna Corporation (“Cigna”) sued Celgene and BMS in the U.S. District Court for the Eastern District of Pennsylvania. Cigna’s complaint makes largely the same claims and allegations as were made in the class action litigation. Cigna’s complaint purports to assert claims on behalf of Cigna and its subsidiaries in several capacities, including as a direct purchaser and as an indirect purchaser. In May 2021, the parties’ joint motion to transfer the action to the District of New Jersey was granted and the case is now pending in that Court. No trial date has been scheduled.

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 class action litigation. In July 2021, Celgene and BMS removed the action to the U.S. District Court for the Northern District of California; motions to transfer to the District of New Jersey, to dismiss for lack of personal jurisdiction and to remand to the state court are currently pending. No trial date has been scheduled.

GOVERNMENT INVESTIGATIONS

Like other pharmaceutical companies, ~~the Company~~BMS and certain of its subsidiaries are subject to extensive regulation by national, state and local ~~government agencies~~authorities in the U.S. and other countries in which BMS operates. As a result, ~~the Company,~~BMS, from time to time, is subject to various governmental and regulatory inquiries and ~~investigations.~~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, ~~the Company~~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 ~~the Company’s~~BMS’s current or former sites or at waste disposal or reprocessing facilities operated by third parties.

CERCLA Matters

With respect to CERCLA matters for which ~~the Company~~BMS is responsible under various state, federal and foreign laws, ~~the Company~~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 ~~the Company~~BMS accrues liabilities when they are probable and reasonably estimable. ~~The Company~~BMS estimated its share of future costs for these sites to be ~~$63~~$79 million at September 30, ~~2017,~~2021, 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.

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Management’s discussion and analysis of results of operations and financial condition is provided as a supplement to and should be read in conjunction with the consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q to enhance the understanding of our results of operations, financial condition and cash flows.

EXECUTIVE SUMMARY

Bristol-Myers Squibb Company is a global ~~specialty~~ biopharmaceutical company whose mission is to discover, develop and deliver innovative medicines that help patients prevail over serious diseases. Our principal strategy is to combine the resources, scale and capability of a pharmaceutical company with the speed and focus on innovation of the biotech industry. Our focus as a biopharmaceutical company is on discovering, developing and delivering transformational medicines for patients facing serious diseases in areas where we believe that we have an opportunity to make a meaningful difference: oncology (both solid tumors and hematology), immunology, cardiovascular and fibrosis. Our four strategic priorities are to drive ~~business~~enterprise performance, ~~continue to build a strong franchise~~maximize the value of our commercial portfolio, ensure the long-term sustainability of our pipeline through combined internal and external innovation and establish our new culture and embed our people strategy. For further information on our strategy, see “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations-Executive Summary-Strategy” in ~~IO, maintain a diversified portfolio both within and outside of IO, and continue~~ our ~~disciplined approach to capital allocation, including establishing partnerships and collaborations as an essential component of successfully delivering transformational medicines to patients.~~2020 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.

In 2021, we received 19 approvals for new medicines and additional indications and formulations of currently marketed medicines in major markets (the U.S., EU and Japan), including advancement in hematology malignancies through regulatory approvals of Breyanzi and Abecma, the first approvals of our cell therapy portfolio. In support of our continued investment in our cell therapy portfolio, we are expanding our manufacturing capabilities through the construction of new state-of-the-art cell therapy manufacturing facilities in Devens, Massachusetts and Leiden, Netherlands. We continue to see momentum in our oncology portfolio with the approvals for both Opdivo and Opdivo+Yervoy in various indications. We continue to expand our portfolio in immunology with the FDA approval of Zeposia for the treatment of adults with moderately to severely active UC and have an important opportunity for deucravacitinib, our TYK2 inhibitor, for the treatment of psoriasis and other diseases. We bolstered our leading cardiovascular franchise by adding mavacamten with the acquisition of MyoKardia in 2020. In March 2021, the FDA accepted the NDA for mavacamten for patients with symptomatic obstructive HCM with an assigned PDUFA goal date of January 28, 2022.

Our revenues increased by 8%9% for the nine months ended September 30, ~~2017~~2021 due to Eliquis, Revlimid, our IO and new product portfolios(1)and foreign exchange, partially offset by lower demand for Established Brands. The $1.61 change in GAAP EPS primarily resulted from specified items including, lower unwinding of inventory fair value adjustments and tax charges and higher equity investment fair value adjustments, partially offset by higher licensing, acquisition and impairment charges. After adjusting for specified items, non-GAAP EPS increased $0.69 as a result of higher ~~demand for our prioritized brands including~~ ~~Opdivo~~ ~~and~~ ~~Eliquis~~ ~~partially offset by increased competition for established brands, primarily~~ ~~Daklinza. The $0.10 decrease in GAAP EPS was due to higher license, asset acquisition and restructuring related charges and lower divestiture related income. These items were~~revenues, partially offset by higher ~~revenues, royalties~~costs and ~~licensing income~~expenses to support product launches and the ~~patent-infringement litigation settlement related to Merck's PD-1 antibody~~ Keytruda* ~~(pembrolizumab). After adjusting for licensing income, litigation settlements, license and asset acquisition charges and other specified items, non-GAAP EPS increased $0.12.~~broader portfolio.


	Three Months Ended September 30,				Nine Months Ended September 30,
Dollars in Millions, except per share data	2021		2020		2021		2020
Total Revenues	$	11,624	$	10,540	$	34,400	$	31,450

Diluted Earnings Per Share
GAAP	$	0.69	$	0.82	$	2.05	$	0.44
Non-GAAP	2.00		1.63		5.67		4.98

Three Months Ended September 30, Nine Months Ended September 30,
Dollars in Millions, except per share data 2017 2016 2017 2016
Total Revenues $ 5,254
$ 4,922
$ 15,327
$ 14,184

Diluted Earnings Per Share
GAAP 0.51
0.72
2.02
2.12
Non-GAAP 0.75
0.77
2.32
2.20

Our non-GAAP financial measures, including non-GAAP earnings and related EPS information, are adjusted to exclude specified items ~~which~~that represent certain costs, expenses, gains and losses and other items impacting the comparability of financial results. For a detailed listing of all specified items and further information and reconciliations of non-GAAP financial measures refer to “—Non-GAAP Financial Measures.”

~~Puerto Rico Update~~


(1)			New product portfolio includes Reblozyl, Inrebic, Onureg, Zeposia, Breyanzi and Abecma.

~~Like many others~~

Economic and Market Factors

COVID-19

In December 2019, COVID-19 emerged and subsequently expanded to a pandemic, resulting in international, federal, state and local public health and governmental authorities taking a number of actions to limit the spread of COVID-19 and address material disruptions in the ~~pharmaceutical industry,~~U.S. and global economy. We have and continue to experience impacts on revenues from COVID-19 primarily due to lower new patient starts and patient visits, however, the pandemic has not significantly impacted our results of operations. It remains difficult to reasonably assess or predict the full extent of the negative impact that the COVID-19 pandemic may have on our business, financial condition, results of operations and cash flows. The future financial and operational impact of the COVID-19 pandemic on BMS will depend on developments such as the ultimate duration and recovery from the pandemic, government actions, impact on the U.S. and global economies, customer behavior changes and timing for resumption to our normal operations, among others. See the Company’s risk factor relating to the COVID-19 pandemic included under “Part I—Item 1A. Risk Factors—COVID-19 Pandemic Risks—The COVID-19 pandemic is affecting our business and could have a material adverse effect on us” in our 2020 Form 10-K.

As the COVID-19 pandemic affected global healthcare systems as well as major economic and financial markets, we adopted several procedures focused on ensuring the continued supply of our medicines to our patients and protecting the health, wellbeing and safety of our workforce:

Workplace and Community

•We are maintaining our steadfast commitment to protecting our workforce, communities and patients, and ensuring the continued supply of life-saving medicines.

•As a science-based company, we have ~~manufacturing and commercial operations in Puerto Rico which were impacted by~~a social responsibility to help reduce the ~~recent hurricanes. Our two manufacturing sites sustained some damage but~~spread of the virus. We are ~~currently operating at limited capacity. We continue to work to restore to normal operations. Our first priority was to ensure the safety and well-being of our employees. We have accounted for 100%~~encouraged that approximately 94% of our employees in the U.S. and ~~continue to provide humanitarian aid~~Puerto Rico are vaccinated against COVID-19, and as needed. Our business continuity plans have been successful to date despite very challenging conditions with no supply disruption to date. In addition, we do not foresee any product supply issues. Although our financial resultsof November 1, 2021, vaccinations will be required for the ~~quarter were not significantly impacted,~~majority of our colleagues in these regions. Although local regulations and conditions in other ex-U.S. jurisdictions may limit or restrict vaccine mandates, we are committed to implementing similar requirements in other markets wherever possible. Medical or religious accommodations are being considered on an individual basis.

•As we return workers to the office, we will continue to ~~monitor and~~ assess the ~~ongoing effects.~~need to require weekly asymptomatic testing, mask wearing, and physical distancing of all colleagues onsite at our facilities in the U.S. and Puerto Rico. We also keep our workforce safe by conducting regular deep cleaning of our sites.

•Our manufacturing sites have remained open throughout the pandemic supported by on site personnel. We have taken a thoughtful and phased approach to bringing the rest of our workforce back to our 250 plus sites around the world, guided by the following principles:

◦Serving the needs of our patients and customers

◦Prioritizing health and safety

◦Following medical advice and government direction

◦Leading with compassion and flexibility

◦Modeling key learnings

•No single approach fits for every site or market – our timelines and circumstances have varied across the globe. We are monitoring local conditions and government direction closely and adjusting our plans as appropriate.

Supply of Our Medicines and Support to Patients, Physicians and Advocacy Groups

•An important element of keeping our promise to patients, their families and our healthcare providers is to ensure that our supply chain is robust and carefully managed. Our clinical and commercial supply chain teams have proactively used mitigation plans to ensure our products reach our markets, clinical sites and patients over the past months. Thanks to these efforts, we have not seen any disruption in our clinical or commercial supply chain due to the pandemic.

•We recognize this remains a challenging time for everyone, and we know patients may be facing additional hardships. We expanded our existing patient support programs to help eligible unemployed patients in the U.S. who have lost their health insurance due to the COVID-19 pandemic. The expanded program offers access to Bristol Myers Squibb medicines for free, including some of the company’s most widely prescribed products, as well as those prescribed via telehealth services.

•All of our U.S. and Puerto Rico personnel are required to be vaccinated to interact with customers, vendors and people at our clinical trial sites. We are also continuing to employ remote interactions as appropriate to ensure continued support for healthcare professionals, patient care, and access to our medicines across our global markets.

Our Clinical Trials and Research

•We are working with health authorities and investigators to protect our trial participants and personnel at BMS and our clinical trial sites, while ensuring regulatory compliance and the integrity of our science.

•We have provided clinical trial investigators with overarching principles and guidance regarding the conduct of BMS clinical trials worldwide in light of COVID-19, and are taking into account guidance from health authorities, where applicable.

Governmental Actions

Additional regulations in the U.S. and internationally may occur in the future, including healthcare reform initiatives, further changes to tax laws and pricing laws and potential importation restrictions, that may reduce our results of operations (including intangible asset impairment charges), operating cash flow, liquidity and financial flexibility. For example, Congress is currently considering a number of different proposals that would potentially: (i) allow the government to set prices for prescription drugs, including benchmarking those prices to prices paid in other countries, (ii) penalize manufacturers for price increases beyond inflationary measures, (iii) redesign the Part D benefit with new out of pocket limits for patients and new mandated discounts for manufacturers, (iv) increase the U.S. corporate tax rate, and (v) increase the U.S. taxation of our international business operations. The outcome of these Congressional actions remains highly uncertain. In addition, the Organization for Economic Co-operation and Development recently reached agreement on a global minimum tax pursuant to which countries are expected to implement changes to their tax laws and updates to international tax treaties. See risk factor on the Company’s risk factors on these items included under “Part I—Item 1A. Risk Factors—Product, Industry and Operational Risks—Increased pricing pressure and other restrictions in the U.S. and abroad continue to negatively affect our revenues and profit margins” and “—Changes to tax regulations could negatively impact our earnings” in our 2020 Form 10-K.

Significant Product and Pipeline Approvals

The following is a summary of the significant approvals received in ~~2017:~~

2021:



Product	Date	Approval


Opdivo			October 2021			EC approval of Opdivo in combination with fluoropyrimidine- and platinum-based combination chemotherapy for the first-line treatment of adult patients with HER2-negative advanced or metastatic gastric, gastroesophageal junction, or esophageal adenocarcinoma whose tumors express PD-L1 with a combined positive score ≥ 5.


Opdivo		September ~~2017~~2021	~~FDA~~ Japan’s Ministry of Health, Labour and Welfare approval of Opdivo for the treatment of ~~patients with HCC, a type of liver cancer, who have been previously treated with sorafenib.~~
~~September 2017~~	~~Approval in Japan for the treatment of unresectable advanced or recurrent gastric cancer which has progressed after chemotherapy, received by our alliance partner, Ono.~~
~~August 2017~~	~~FDA approval for the treatment of adult and~~ pediatric patients with ~~MSI-H~~recurrent or ~~dMMR mCRC that has progressed following treatment with a fluoropyrimidine, oxaliplatin and irinotecan.~~refractory classical Hodgkin lymphoma.


~~June 2017~~Opdivo			~~EC approval for the treatment~~August 2021	Japan’s Ministry of ~~patients with previously treated locally advanced unresectable or metastatic urothelial carcinoma, a type of bladder cancer, in adults after failure of platinum-containing therapy.~~
~~April 2017~~	~~EC approval for the treatment of SCCHN in adults progressing on or after platinum-based therapy.~~
~~March 2017~~	~~Approval in Japan for the treatment of recurrent or metastatic HNC, received by our alliance partner, Ono.~~
~~February 2017~~	~~FDA approval for the treatment of patients with previously treated locally advanced or metastatic urothelial carcinoma, a type of bladder cancer.~~
~~Orencia~~	~~July 2017~~	~~EC approval for the treatment of active PsA in adults for whom the response to previous disease-modifying antirheumatic drug therapy, including methotrexate, has been inadequate,~~Health, Labour and ~~additional systemic therapy for psoriatic skin lesions is not required.~~
	~~July 2017~~	~~FDA approval for the treatment of active PsA in adults.~~
	~~March 2017~~	~~FDA~~Welfare approval of ~~a new subcutaneous administration option for use in patients two years of age~~the combination therapy Opdivo and ~~older with moderately to severely active polyarticular JIA.~~
~~Yervoy~~	~~July 2017~~	~~FDA approval of an expanded indication~~Cabometyx* for the treatment of unresectable or metastatic ~~melanoma in pediatric patients.~~RCC.


~~Hepatitis C Franchise~~Opdivo			~~April 2017~~August 2021			~~China~~ FDA approval of Opdivo for the ~~Daklinza~~ ~~and~~ ~~Sunvepra~~ ~~regimen~~adjuvant treatment of patients with urothelial carcinoma who are at high risk of recurrence after undergoing radical resection, regardless of prior neoadjuvant chemotherapy, nodal involvement or PD-L1 status.


Abecma			August 2021			EC approval for ~~treatment-naive or experienced patients infected with genotype 1b chronic HCV. In addition,~~ ~~Daklinza~~ ~~was approved in China~~Abecma for ~~combination use with other agents, including sofosbuvir, for~~the treatment of adult patients with ~~HCV genotypes 1-6 infection.~~relapsed and refractory multiple myeloma, who have received at least three prior therapies, including an immunomodulatory agent, a proteasome inhibitor and an anti-CD38 antibody and have demonstrated disease progression on the last therapy.


Opdivo			July 2021			EC approval of Opdivo for the adjuvant treatment of adult patients with esophageal or gastroesophageal junction cancer who have residual pathologic disease following prior neoadjuvant chemoradiotherapy.


Opdivo+Yervoy			June 2021			EC approval of Opdivo plus Yervoy for the treatment of adult patients with mismatch repair deficient or microsatellite instability-high metastatic CRC after prior fluoropyrimidine-based combination chemotherapy.


Onureg			June 2021			EC approval of Onureg as a maintenance therapy in adult patients with AML who achieved complete remission or complete remission with incomplete blood count recovery following induction therapy with or without consolidation treatment and who are not candidates for, including those who choose not to proceed to, hematopoietic stem cell transplantation.


Opdivo+Yervoy			June 2021			EC approval of Opdivo plus Yervoy for the first-line treatment of adults with unresectable malignant pleural mesothelioma.


Zeposia			May 2021			FDA approval of Zeposia for the treatment of adults with moderately to severely active UC.


Opdivo			May 2021			Japan’s Ministry of Health, Labour and Welfare approval of Opdivo and Yervoy in combination therapy for the first-line treatment of unresectable advanced or recurrent malignant pleural mesothelioma.


Opdivo			May 2021			FDA approval of Opdivo for the adjuvant treatment of patients with completely resected esophageal or gastroesophageal junction cancer with residual pathologic disease after neoadjuvant chemoradiotherapy.


Opdivo			April 2021			FDA approval of Opdivo in combination with chemotherapy for patients with advanced or metastatic gastric cancer, gastroesophageal junction cancer, and esophageal adenocarcinoma, regardless of PD-L1 expression status.


Opdivo			April 2021			EC approval of Opdivo in combination with Cabometyx* for the first-line treatment of patients with advanced RCC.


Abecma			March 2021			FDA approval of Abecma for the treatment of adult patients with relapsed or refractory multiple myeloma after four or more prior lines of therapy, including an immunomodulatory agent, a proteasome inhibitor, and an anti-CD38 monoclonal antibody.


Breyanzi			March 2021			Japan’s Ministry of Health, Labour and Welfare approval of Breyanzi for the treatment of patients with relapsed or refractory large B-cell lymphoma and relapsed or refractory follicular lymphoma.


Inrebic			February 2021			EC approval of Inrebic for the treatment of disease-related splenomegaly or symptoms in adult patients with primary myelofibrosis, post-polycythaemia vera myelofibrosis or post-essential thrombocythaemia myelofibrosis, who are Janus Associated Kinase inhibitor naïve or have been treated with ruxolitinib.


Breyanzi			February 2021			FDA approval of Breyanzi for the treatment of adult patients with relapsed or refractory large B-cell lymphoma after two or more lines of systemic therapy.


Opdivo			January 2021			FDA approval of Opdivo in combination with Cabometyx* for the first-line treatment of patients with advanced RCC.

The FDA has indicated it is undertaking an industry-wide review of indications that received accelerated approval and for which the confirmatory studies did not meet their primary endpoints. This is not specific to BMS, but we have two Opdivo indications that are subject to this review by the FDA in the third-line treatment of SCLC and second-line treatment of HCC. In consultation with the FDA, we have withdrawn the Opdivo indication in the third-line treatment of SCLC. Additionally, we decided to withdraw the Opdivo indication in the second-line treatment of HCC.

Refer to "—“—Product and Pipeline ~~Developments"~~Developments” for all of the developments in our marketed products and late-stage pipeline in ~~2017.~~2021.

~~Acquisitions~~Divestitures, Licensing and ~~Licensing~~Other Arrangements

~~Acquisition~~

Divestitures, licensing and ~~licensing transactions~~other arrangements allow us to focus our resources behind our growth opportunities that drive the greatest long-term value. ~~We are focused on the following core therapeutic areas: oncology, including IO, immunoscience, cardiovascular and fibrosis.~~ Significant transactions entered into in ~~2017~~2021 are summarized below. Refer to ~~"Item~~“Item 1. Financial Statements—Note 3. Alliances” and “—Note 4. ~~Acquisitions,~~ Divestitures, Licensing and ~~Licensing Arrangements"~~Other Arrangements” for further information.

~~Halozyme~~

~~In the third quarter of 2017, BMS and Halozyme announced~~Agenus - We obtained a global exclusive license to Agenus’ proprietary bispecific antibody program, AGEN1777, that blocks TIGIT and an additional target. AGEN1777 is being studied in oncology and a Phase I clinical trial was initiated in October 2021.

Eisai - We commenced an exclusive global strategic collaboration with Eisai for the co-development and co-commercialization of MORAb-202, a selective folate receptor alpha antibody-drug conjugate being investigated in endometrial, ovarian, lung and breast cancers. MORAb-202 is currently in Phase I/II clinical trials for solid tumors.

Prothena - We exercised our option under the global neuroscience research and development collaboration to enter into an exclusive U.S. license ~~agreement~~for PRX005, an anti-tau antibody that specifically targets an area within the microtubule binding region for the potential treatment of Alzheimer’s disease. A Phase I clinical trial with PRX005 has been initiated.

Rockefeller University - We obtained a global exclusive license to develop, ~~subcutaneously administered BMS IO medicines using Halozyme's ENHANZE* drug-delivery technology. This transaction~~manufacture and commercialize Rockefeller’s novel monoclonal antibody duo treatment that neutralizes the SARS-CoV-2 virus for treatment and potentially for prevention of COVID-19. Phase I clinical trials to assess dosing for IV and subcutaneous formulations and to assess safety have been completed by Rockefeller. In May 2021, enrollment initiated in the Phase II study within the NIH ACTIV-2 protocol at a network of sites within the U.S. Phase II enrollment was completed in August 2021 and topline data is expected ~~to close~~ in the fourth quarter ~~of 2017 subject to obtaining customary regulatory and antitrust approvals.~~

~~IFM~~

~~Biogen~~

~~In the second quarter of 2017, BMS out-licensed to Biogen exclusive rights to develop and commercialize BMS-986168, an anti-eTau compound in development for Progressive Supranuclear Palsy.~~

~~Roche~~

~~In the second quarter of 2017, BMS out-licensed to Roche exclusive rights to develop and commercialize BMS-986089, an anti-myostatin adnectin in development for Duchenne Muscular Dystrophy.~~

2021.

~~CytomX~~

In the second quarter of 2017, BMS and CytomX, a biopharmaceutical company developing investigational Probody therapeutics for the treatment of cancer, expanded their strategic collaboration to discover novel therapies that will include up to eight additional targets using CytomX’s proprietary Probody platform.

RESULTS OF OPERATIONS

Regional Revenues

Three Months Ended September 30, Nine Months Ended September 30,
Total Revenues 2017 vs. 2016 Total Revenues 2017 vs. 2016
Dollars in Millions 2017 2016 Total Change
Foreign Exchange^(b)
2017 2016 Total Change
Foreign Exchange^(b)
United States $ 2,864
$ 2,790
3 % —
$ 8,467
$ 8,015
6 % —
Europe 1,262
946
33 % 5 % 3,596
2,855
26 % (1 )%
Rest of the World 970
1,069
(9 )% (2 )% 2,858
2,922
(2 )% (1 )%
Other^(a)
158
117
35 % N/A
406
392
4 % N/A
Total $ 5,254
$ 4,922
7 % 1 % $ 15,327
$ 14,184
8 % (1 )%
The composition of the changes in revenues was as follows:


	Three Months Ended September 30,								Nine Months Ended September 30,
Dollars in Millions	2021		2020		% Change		Foreign Exchange(b)		2021		2020		% Change		Foreign Exchange(b)
United States	$	7,296	$	6,542	12	%	—		$	21,694	$	19,795	10	%	—
Europe	2,661		2,453		8	%	2	%	7,903		7,156		10	%	6	%
Rest of the World	1,391		1,361		2	%	1	%	4,172		4,030		4	%	2	%
Other(a)	276		184		50	%	N/A		631		469		35	%	N/A
Total	$	11,624	$	10,540	10	%	—		$	34,400	$	31,450	9	%	1	%


~~(a)~~	~~Other revenues include royalties and alliance-related revenues for products not sold by our regional commercial organizations.~~


~~(b)~~	~~Foreign exchange impacts were derived by applying the prior period average currency rates to the current period sales.~~

(a) Other revenues include royalties and alliance-related revenues for products not sold by our regional commercial organizations.

(b) Foreign exchange impacts were derived by applying the prior period average currency rates to the current period sales.

United States

•U.S. revenues for the third quarter 2021 and year-to-date increased ~~in both periods~~ due to ~~higher demand~~ Revlimid, our new product portfolio, Eliquis and our IO portfolio. Average U.S. net selling prices increased 1% year-to-date compared to the same period a year ago.

Europe

•Europe revenues for ~~Eliquis~~the third quarter 2021 and ~~Opdivo~~ year-to-date increased due to Eliquis, our IO product portfolio and Revlimid and foreign exchange, partially offset by lower demand for ~~established brands due to increased competition, primarily~~ ~~Daklinza~~.Established Brands. Average ~~U.S.~~ net selling prices ~~were approximately 2% higher after charge-backs, rebates and discounts in the nine months ended September 30, 2017~~decreased year-to-date compared to the ~~prior~~same period a year ~~period. Refer to “—Product Revenues” below for additional information.~~ago.

~~Europe revenues increased in both periods due to higher demand for~~ ~~Opdivo~~ ~~and~~ ~~Eliquis~~ ~~partially offset by lower demand for~~ ~~Daklinza~~ ~~due to increased competition~~.

Rest of the World

•Rest of the World revenues ~~decreased in both periods~~for the third quarter 2021 and year-to-date increased due to ~~lower demand for established brands, including~~ ~~Daklinza,~~ ~~due to increased competition~~our IO portfolio, Pomalyst/Imnovid and ~~the divestiture of certain other brands~~foreign exchange, partially offset by ~~higher demand~~lower revenues for ~~Opdivo~~Abraxane, due to manufacturing delays, and ~~Eliquis~~.Established Brands. Average net selling prices decreased year-to-date compared to the same period a year ago.

No single country outside the U.S. contributed more than 10% of total revenues during the nine months ended September 30, ~~2017~~2021 or ~~2016.~~2020. Our business is typically not seasonal.

GTN Adjustments

The reconciliation of gross product sales to net product sales by each significant category of GTN adjustments was as ~~follows (excluding alliance and other revenues such as~~ Atripla*):follows:


	Three Months Ended September 30,								Nine Months Ended September 30,
Dollars in Millions	2021			2020			% Change		2021			2020			% Change
Gross product sales	$	17,335		$	15,211		14	%	$	49,676		$	43,685		14	%
GTN adjustments
Charge-backs and cash discounts	(1,908)			(1,440)			33	%	(5,214)			(4,072)			28	%
Medicaid and Medicare rebates	(2,625)			(2,146)			22	%	(6,482)			(5,126)			26	%
Other rebates, returns, discounts and adjustments	(1,559)			(1,428)			9	%	(4,534)			(3,932)			15	%
Total GTN adjustments	(6,092)			(5,014)			21	%	(16,230)			(13,130)			24	%
Net product sales	$	11,243		$	10,197		10	%	$	33,446		$	30,555		9	%

GTN adjustments percentage	35		%	33		%	2	%	32		%	30		%	2	%
U.S.	42		%	39		%	3	%	39		%	36		%	3	%
Non-U.S.	17		%	18		%	(1)	%	17		%	16		%	1	%

Three Months Ended September 30, Nine Months Ended September 30,
Dollars in Millions 2017 2016 % Change 2017 2016 % Change
Gross product sales $ 6,555
$ 5,698
15 % $ 18,723
$ 16,252
15 %
GTN adjustments:
Charge-backs and cash discounts (583 ) (427 ) 37 % (1,521 ) (1,174 ) 30 %
Medicaid and Medicare rebates (573 ) (397 ) 44 % (1,474 ) (1,018 ) 45 %
Other rebates, returns, discounts and adjustments (537 ) (382 ) 41 % (1,516 ) (1,172 ) 29 %
Total GTN adjustments (1,693 ) (1,206 ) 40 % (4,511 ) (3,364 ) 34 %
Net product sales $ 4,862
$ 4,492
8 % $ 14,212
$ 12,888
10 %

GTN adjustments percentage 26 % 21 % 5 % 24 % 21 % 3 %
U.S. 32 % 26 % 6 % 30 % 26 % 4 %
Non-U.S. 15 % 14 % 1 % 14 % 12 % 2 %

Reductions to provisions for product sales made in prior periods resulting from changes in estimates were ~~$65~~$282 million and ~~$143~~$91 million infor the nine months ended September 30, ~~2017~~2021 and ~~2016,~~2020, respectively. The reductions to provisions in 2021 was primarily related to Eliquis coverage gap discounts. GTN adjustments are primarily a function of product sales volume, regional and payer channel mix, contractual ~~and~~or legislative discounts and rebates. U.S. GTN adjustments ~~are increasing at a higher rate than gross product sales~~percentage increased primarily due to higher ~~U.S.~~ ~~Eliquis~~ ~~gross product sales,~~government channel mix, which has ~~a relatively high~~higher GTN adjustment ~~percentage.~~percentages.

Product Revenues


	Three Months Ended September 30,						Nine Months Ended September 30,
Dollars in Millions	2021		2020		% Change		2021		2020		% Change
Prioritized Brands
Revlimid	$	3,347	$	3,027	11	%	$	9,493	$	8,826	8	%
U.S.	2,303		2,080		11	%	6,425		6,094		5	%
Non-U.S.	1,044		947		10	%	3,068		2,732		12	%

Eliquis	2,413		2,095		15	%	8,091		6,899		17	%
U.S.	1,315		1,118		18	%	4,960		4,258		16	%
Non-U.S.	1,098		977		12	%	3,131		2,641		19	%

Opdivo	1,905		1,780		7	%	5,535		5,199		6	%
U.S.	1,062		1,018		4	%	3,082		2,982		3	%
Non-U.S.	843		762		11	%	2,453		2,217		11	%

Orencia	870		826		5	%	2,442		2,290		7	%
U.S.	644		588		10	%	1,773		1,642		8	%
Non-U.S.	226		238		(5)	%	669		648		3	%

Pomalyst/Imnovid	851		777		10	%	2,478		2,235		11	%
U.S.	586		548		7	%	1,665		1,559		7	%
Non-U.S.	265		229		16	%	813		676		20	%

Sprycel	551		544		1	%	1,562		1,576		(1)	%
U.S.	346		336		3	%	946		944		—
Non-U.S.	205		208		(1)	%	616		632		(3)	%

Yervoy	515		446		15	%	1,481		1,211		22	%
U.S.	313		309		1	%	935		820		14	%
Non-U.S.	202		137		47	%	546		391		40	%

Abraxane	266		342		(22)	%	876		950		(8)	%
U.S.	211		236		(11)	%	670		659		2	%
Non-U.S.	55		106		(48)	%	206		291		(29)	%

Empliciti	82		96		(15)	%	253		290		(13)	%
U.S.	48		59		(19)	%	150		177		(15)	%
Non-U.S.	34		37		(8)	%	103		113		(9)	%

Reblozyl	160		96		67	%	400		159		**
U.S.	147		92		60	%	355		155		**
Non-U.S.	13		4		**		45		4		**

Inrebic	22		13		69	%	54		40		35	%
U.S.	20		13		54	%	50		40		25	%
Non-U.S.	2		—		N/A		4		—		N/A

Onureg	21		3		**		48		3		**
U.S.	21		3		**		47		3		**
Non-U.S.	—		—		N/A		1		—		N/A

Zeposia	40		2		**		86		3		**
U.S.	32		2		**		65		3		**
Non-U.S.	8		—		N/A		21		—		N/A


	Three Months Ended September 30,						Nine Months Ended September 30,							Three Months Ended September 30,				Nine Months Ended September 30,
Dollars in Millions	2017		2016		% Change		2017		2016		% Change		Dollars in Millions	2021	2020	% Change		2021	2020	% Change
Prioritized Brands													Prioritized Brands
Opdivo	$	1,265	$	920	38	%	$	3,587	$	2,464	46	%

Breyanzi													Breyanzi	30	—	N/A		47	—	N/A
U.S.	778		712		9	%	2,307		1,949		18	%	U.S.	29	—	N/A		46	—	N/A
Non-U.S.	487		208		**		1,280		515		**		Non-U.S.	1	—	N/A		1	—	N/A

Eliquis	1,232		884		39	%	3,509		2,395		47	%
U.S.	717		512		40	%	2,119		1,424		49	%
Non-U.S.	515		372		38	%	1,390		971		43	%

Orencia	632		572		10	%	1,817		1,640		11	%
U.S.	432		387		12	%	1,243		1,109		12	%
Non-U.S.	200		185		8	%	574		531		8	%

Sprycel	509		472		8	%	1,478		1,330		11	%
U.S.	278		259		7	%	806		702		15	%
Non-U.S.	231		213		8	%	672		628		7	%

Yervoy	323		285		13	%	975		789		24	%
U.S.	239		222		8	%	727		600		21	%
Non-U.S.	84		63		33	%	248		189		31	%

Empliciti	60		41		46	%	168		103		63	%
Abecma													Abecma	71	—	N/A		95	—	N/A
U.S.	39		36		8	%	112		97		15	%	U.S.	67	—	N/A		91	—	N/A
Non-U.S.	21		5		**		56		6		**		Non-U.S.	4	—	N/A		4	—	N/A

Established Brands													Established Brands
Hepatitis C Franchise	73		379		(81	)%	347		1,352		(74	)%
Vidaza													Vidaza	36	106	(66)	%	135	390	(65)	%
U.S.	24		192		(88	)%	96		745		(87	)%	U.S.	1	—	N/A		8	2	**
Non-U.S.	49		187		(74	)%	251		607		(59	)%	Non-U.S.	35	106	(67)	%	127	388	(67)	%

Baraclude	264		306		(14	)%	819		896		(9	)%	Baraclude	105	100	5	%	327	343	(5)	%
U.S.	14		17		(18	)%	40		49		(18	)%	U.S.	2	3	(33)	%	8	9	(11)	%
Non-U.S.	250		289		(13	)%	779		847		(8	)%	Non-U.S.	103	97	6	%	319	334	(4)	%

Sustiva Franchise	183		275		(33	)%	555		819		(32	)%
Other Brands													Other Brands	339	287	18	%	997	1,036	(4)	%
U.S.	157		234		(33	)%	471		689		(32	)%	U.S.	149	137	9	%	418	448	(7)	%
Non-U.S.	26		41		(37	)%	84		130		(35	)%	Non-U.S.	190	150	27	%	579	588	(2)	%

Reyataz Franchise	174		238		(27	)%	555		706		(21	)%
Total Revenues													Total Revenues	11,624	10,540	10	%	34,400	31,450	9	%
U.S.	85		125		(32	)%	260		367		(29	)%	U.S.	7,296	6,542	12	%	21,694	19,795	10	%
Non-U.S.	89		113		(21	)%	295		339		(13	)%	Non-U.S.	4,328	3,998	8	%	12,706	11,655	9	%

Other Brands	539		550		(2	)%	1,517		1,690		(10	)%
U.S.	101		94		7	%	286		284		1	%
Non-U.S.	438		456		(4	)%	1,231		1,406		(12	)%

** Change in excess of 100%.

Revlimid (lenalidomide)—an oral immunomodulatory drug that in combination with dexamethasone is indicated for the treatment of patients with multiple myeloma. Revlimid as a single agent is also indicated as a maintenance therapy in patients with multiple myeloma following autologous hematopoietic stem cell transplant.

•U.S. revenues increased 11% in the third quarter 2021 and 5% year-to-date due to higher average net selling prices and higher demand.

•International revenues increased 10% in the third quarter 2021 due to higher demand and foreign exchange of 2%. Excluding foreign exchange impacts, revenues increased by 8%.

International revenues increased 12% year-to-date due to foreign exchange of 5% and higher demand. Excluding foreign exchange impacts, revenues increased 7%.

•In the U.S., certain third parties have been granted volume-limited licenses to sell generic lenalidomide beginning in 2022. In the EU, licenses have been granted to third parties to market generic lenalidomide products prior to expiry of our patent and supplementary protection certificate rights beginning in 2022. Revenues for Revlimid are expected to decline in the U.S. and International starting in 2022. Refer to “Item 1. Financial Statements—Note 17. Legal Proceedings and Contingencies—Intellectual Property” for further information.

Eliquis (apixaban)— an oral Factor Xa inhibitor targeted at stroke prevention in adult patients with NVAF and the prevention and treatment of VTE disorders.

•U.S. revenues increased 18% in the third quarter 2021 and 16% year-to-date due to higher demand. A majority of Eliquis patients enter the coverage gap during the third and fourth quarters which result in lower revenues during the second half of the year.

•International revenues increased 12% in the third quarter 2021 and 19% year-to-date due to higher demand and foreign exchange of 2% and 6%, respectively. Excluding foreign exchange impacts, revenues increased by 10% and 13%, respectively.

•In September 2021, the Bristol Myers Squibb-Pfizer Alliance announced that the Court of Appeals for the Federal Circuit affirmed the U.S. District Court’s August 2020 decision finding the composition of matter patent and formulation patent covering Eliquis valid and infringed. Given the decision, the earliest that generic manufacturers are permitted to launch their apixaban products is April 1, 2028, subject to additional appeals and challenges.

Following the May 2021 expiration of regulatory exclusivity for Eliquis in Europe, generic manufacturers may seek to market generic versions of Eliquis in Europe prior to the expiration of our patents, which may lead to additional, infringement and invalidity actions involving our Eliquis patents being filed in various countries in Europe. We believe in the innovative science behind Eliquis and the strength of our intellectual property, which we will defend against infringement. Refer to “Item 1. Financial Statements—Note 17. Legal Proceedings and Contingencies—Intellectual Property” for further information.

Opdivo (nivolumab) — a fully human monoclonal antibody that binds to the PD-1 on T and NKT cells that has been approved for several anti-cancer indications including bladder, blood, colon, head and neck, kidney, liver, lung, melanoma, MPM and ~~stomach~~stomach. The Opdivo+Yervoy regimen also is approved in multiple markets for the treatment of NSCLC, melanoma, MPM, RCC, CRC and ~~continues to be investigated~~various gastric and esophageal cancers. There are several ongoing potentially registrational studies for Opdivo across other tumor types and disease ~~areas.~~areas, in monotherapy and in combination with Yervoy and various anti-cancer agents.

•U.S. revenues increased ~~in both periods due to higher demand. We expect increased competition for~~ ~~Opdivo~~ ~~to continue~~4% in the ~~future.~~

~~International revenues increased in both periods~~third quarter 2021 and 3% year-to-date due to higher demand ~~as a result of launches of additional~~across multiple therapies including the Opdivo+Yervoy combinations in NSCLC, Opdivo+Cabometyx* combination in kidney cancer and Opdivo in various gastric and esophageal cancers and higher average net selling prices, partially offset by declining second-line eligibility across tumor indications and ~~approvals in new countries.~~increased competition.

~~Eliquis(apixaban)~~ ~~— an oral Factor Xa inhibitor, targeted at stroke prevention in adult patients with non-valvular atrial fibrillation and the prevention and treatment of venous thromboembolic disorders.~~

~~U.S. and international~~•International revenues increased 11% in both ~~periods~~the third quarter 2021 and year-to-date due to higher demand ~~resulting from~~and foreign exchange of 1% and 4%, respectively. Excluding foreign exchange impacts, revenues increased ~~commercial acceptance of novel oral anticoagulants~~by 10% and ~~market share gains.~~7%, respectively.

Orencia (abatacept) — a fusion protein indicated for adult patients with moderate to severe active RA and PsA and is also indicated for reducing signs and symptoms in certain pediatric patients with moderately to severely active polyarticular ~~juvenile idiopathic arthritis.~~JIA.

•U.S. revenues increased 10% in the third quarter 2021 and 8% year-to-date due to higher demand.

•International revenues decreased 5% in the third quarter 2021 due to the timing of product distribution to our alliance partner.

International revenues increased 3% year-to-date due to foreign exchange of 3%. Excluding foreign exchange impacts, revenues remained consistent.

•In the U.S. and EU, estimated LOE dates are based on method of use patents that expire in 2021. Formulation and additional patents expire in 2026 and beyond. There are no Orencia biosimilars on the market in the U.S., EU or Japan.

Pomalyst/Imnovid (pomalidomide) — a proprietary, distinct, small molecule that is administered orally and modulates the immune system and other biologically important targets. Pomalyst/Imnovid is indicated for patients with multiple myeloma who have received at least two prior therapies including lenalidomide and a proteasome inhibitor and have demonstrated disease progression on or within 60 days of completion of the last therapy.

•U.S. revenues increased 7% in both ~~periods~~the third quarter 2021 and year-to-date due to higher average net selling prices and higher demand.

•International revenues increased 16% in ~~both periods~~the third quarter 2021 and 20% year-to-date, due to higher ~~demand.~~demand and foreign exchange of 1% and 4%, respectfully, partially offset by lower average net selling prices. Excluding foreign exchange impacts, revenues increased by 15% and 16%, respectfully.

Sprycel (dasatinib) — an oral inhibitor of multiple tyrosine kinase indicated for the first-line treatment of ~~adults~~patients with Philadelphia chromosome-positive ~~chronic myeloid leukemia~~CML in chronic phase and the treatment of adults with chronic, accelerated, or myeloid or lymphoid blast phase CML with resistance or intolerance to prior therapy, including Gleevec* ~~(imatinib meslylate).~~Gleevec* (imatinib mesylate) and the treatment of children and adolescents aged 1 year to 18 years with chronic phase Philadelphia chromosome-positive CML.

•U.S. revenues increased 3% in the third quarter 2021 due to higher demand, partially offset by lower average net selling prices.

U.S. revenues ~~increased in both periods primarily~~remained consistent year-to-date due to higher ~~demand.~~demand, offset by lower average net selling prices.

•International revenues remained consistent in the third quarter 2021

International revenues ~~increased in both periods~~decreased 3% year-to-date due to ~~higher demand.~~lower demand as a result of increased generic competition in certain indications and lower average net selling prices, partially offset by foreign exchange of 3%. Excluding foreign exchange impacts, revenues decreased by 6%.

Yervoy (ipilimumab) — a monoclonal antibody for the treatment of patients with unresectable or metastatic melanoma. The Opdivo+Yervoy regimen also is approved in multiple markets for the treatment of NSCLC, melanoma, MPM, RCC, and CRC.

•U.S. revenues remained consistent in the third quarter 2021.

U.S. revenues increased 14% year-to-date due to higher demand primarily from the Opdivo+Yervoy combination for NSCLC.

•International revenues increased 47% in the third quarter 2021 and 40% year-to-date due to higher demand and foreign exchange of 2% and 6%, respectively, partially offset by lower average net selling prices. Excluding foreign exchange impacts, revenues increased by 45% and 34%, respectively.

Abraxane (paclitaxel albumin-bound particles for injectable suspension)—a solvent-free protein-bound chemotherapy product that combines paclitaxel with albumin using our proprietary Nab® technology platform, and is used to treat breast cancer, NSCLC and pancreatic cancer, among others.

•U.S. revenues decreased 11% in the third quarter 2021 due to manufacturing delays and lower average net selling prices.

U.S. revenues increased ~~in both periods primarily~~2% year-to-date due to higher ~~demand.~~demand, partially offset by lower average net selling prices.

•International revenues ~~increased~~decreased 48% in ~~both periods~~the third quarter 2021 and 29% year-to-date due to ~~higher demand.~~manufacturing delays and lower average net selling prices, partially offset by foreign exchange of 1% and 3%, respectively. Excluding foreign exchange impacts, revenues decreased by 49% and 32%, respectively.

•We expect that the manufacturing delays in the U.S. and International will continue into the fourth quarter 2021.

•In the U.S., as part of the settlement with Actavis LLC, Actavis was granted a license to certain patents required to sell a generic paclitaxel protein-bound particles for injectable suspension product beginning in 2022. In the EU, the patent expired in 2019 and generics have entered the market. In Japan, the estimated LOE is based on a method of use patent expiring in 2023. Revenues for Abraxane are expected to decline in the U.S. starting in 2022 and continue to decline in the EU.

Empliciti (elotuzumab) — a humanized monoclonal antibody for the treatment of multiple myeloma.

~~Empliciti~~Reblozyl (luspatercept-aamt) — an erythroid maturation agent indicated for the treatment of anemia in adult patients with beta thalassemia who require regular red blood cell transfusions and for the treatment of anemia failing an erythropoiesis stimulating agent (“ESA”) in adult patients with very low- to intermediate-risk MDS who have ring sideroblasts and require RBC transfusions. Reblozyl was launched for adult patients with beta thalassemia who require regular red blood cell transfusions in November 2019 and for adult patients with MDS previously treated with ESA in April 2020.

Inrebic (fedratinib) — an oral kinase inhibitor indicated for the treatment of adult patients with intermediate-2 or high-risk primary or secondary (post-polycythemia vera or post-essential thrombocythemia) myelofibrosis. Inrebic was launched in August 2019.

Onureg (azacitidine) — an oral hypomethylating agent that incorporates into DNA and RNA, indicated for continued treatment of adult patients with AML who achieved first complete remission or complete remission with incomplete blood count recovery following intensive induction chemotherapy and are not able to complete intensive curative therapy. Onureg was launched in September 2020.

Zeposia (ozanimod) — an oral immunomodulatory drug used to treat relapsing forms of multiple sclerosis, to include clinically isolated syndrome, relapsing-remitting disease, and active secondary progressive disease, in adults and to treat moderately to severely active UC in adults. Zeposia was launched in June 2020.

Breyanzi (lisocabtagene maraleucel) — a CD19-directed genetically modified autologous T cell immunotherapy indicated for the ~~U.S.~~treatment of adult patients with certain types of relapsed or refractory large B-cell lymphoma after two or more lines of systemic therapy. Breyanzi was launched in ~~December 2015, in~~April 2021.

Abecma (idecabtagene vicleucel) — a B-cell maturation antigen-directed genetically modified autologous T cell immunotherapy indicated for the EUtreatment of adult patients with relapsed or refractory multiple myeloma after four or more prior lines of therapy, including an immunomodulatory agent, a proteasome inhibitor, and an anti-CD38 monoclonal antibody. Abecma was launched in May ~~2016~~2021.

Vidaza (azacitidine for injection)—a hypomethylating agent with several approved indications worldwide for frontline treatment of patients with myelodysplastic syndromes, chronic myelomonocytic leukemia (CMMoL), and ~~in Japan in September 2016.~~

acute myeloid leukemia.

~~Hepatitis C Franchise —~~ ~~Daklinza~~ ~~(daclatasvir) - an NS5A replication complex inhibitor;~~ ~~Sunvepra~~ ~~(asunaprevir) - an NS3 protease inhibitor; and beclabuvir - an NS5B inhibitor. Includes~~ ~~Ximency, a single pill combination of daclatasvir, asunaprevir and beclabuvir in Japan.~~

~~U.S. and international~~•International revenues decreased ~~in both periods~~ due to lower demand and lower average net selling prices resulting from ~~increased~~generic competition.

Baraclude (entecavir) — an oral antiviral agent for the treatment of chronic hepatitis B.

•International revenues ~~continued to decrease in both periods~~decreased due to lower demand resulting from ~~increased competition.~~

~~Sustiva (efavirenz)Franchise~~ ~~— a non-nucleoside reverse transcriptase inhibitor for the treatment of HIV, which includes~~ ~~Sustiva, an antiretroviral drug, and bulk efavirenz, which is also included in the combination therapy,~~ ~~Atripla*.~~

~~U.S. revenues continued to decrease in both periods due to lower demand resulting from increased competition. The loss of exclusivity for~~ ~~Sustiva~~ ~~is expected in December 2017 which may result in the termination of the joint venture agreement with Gilead and further reduce revenues beyond 2017.~~

~~Reyataz (atazanavir sulfate) Franchise~~ ~~— Includes~~ ~~Reyataz~~ ~~- a protease inhibitor for the treatment of HIV and~~ ~~Evotaz~~ ~~(atazanavir 300 mg and cobicistat 150 mg) - a combination therapy containing~~ ~~Reyataz~~ ~~and~~ Tybost* ~~(cobicistat).~~

U.S. revenues continued to decrease due to lower demand resulting from increased competition. The loss of exclusivity is expected in December 2017 and will result in a higher decline in revenues in future periods due to generic competition.

~~International revenues continued to decrease in both periods due to lower demand.~~

Other Brands — includes all other ~~products,~~brands, including those which have lost exclusivity in major markets, OTC brands and royalty revenue.

•International revenues decreased ~~in both periods~~primarily due to ~~out-licensing and divestiture of certain other brands and~~ continued generic erosion.

Estimated End-User Demand

Pursuant to the SEC Consent Order described in our ~~2016 Annual Report on~~2020 Form 10-K, we monitor inventory levels on hand in the U.S. wholesaler distribution channel and outside of the U.S. in the direct customer distribution channel. We are obligated to disclose products with levels of inventory in excess of one month on hand or expected demand, subject to a de minimis exception. Estimated levels of inventory in the distribution channel in excess of one month on hand for the following products were not material to our results of operations as of the dates ~~indicated. No U.S. products~~indicated:

Abraxane had estimated levels of inventory in the distribution channel in excess of one month on hand at September 30, 2017. Below are international products that had estimated levels of inventory in the distribution channel in excess of one month at June 30, 2017.

~~Dafalgan, an analgesic product sold principally in Europe, had 1.2~~1.9 months of inventory on hand internationally in the distribution channel at ~~direct customers~~June 30, 2021 compared to ~~1.3~~0.5 months of inventory on hand at March 31, ~~2017. The level of inventory on hand was primarily~~2021 due to ~~the ordering patterns of pharmacists~~on-going business transition from a distributor and to avert a forecasted back order in ~~France.~~Latin America.

~~Fervex~~, a cold and flu product, had 4.0 months of inventory on hand at direct customers compared to 2.7 months of inventory on hand at March 31, 2017. The level of inventory on hand was attributable to France to support product seasonality.

~~Perfalgan~~, an analgesic product, had 1.5 months of inventory on hand internationally at direct customers compared to 1.6 months of inventory on hand at March 31, 2017. The level of inventory on hand was due to extended delivery lead time primarily in the Gulf Countries.

~~Sunvepra~~, a Hepatitis C product, had 1.1 months of inventory on hand at direct customers compared to 1.1 months of inventory on hand at March 31, 2017. The level of inventory on hand was attributable to decreasing in-market sales primarily in Japan.

~~Ximency, a Hepatitis C product, had 1.1 months of inventory on hand at direct customers compared to 2.4 months of inventory on hand at March 31, 2017. The product was launched in February 2017 in Japan.~~

In the U.S., we generally determine our months on hand estimates using inventory levels of product on hand and the amount of out-movement provided by our three largest wholesalers, ~~and our distributors. Our three largest wholesalers~~which account for approximately ~~95%~~87% of total gross sales of U.S. ~~products.~~products for the nine months ended September 30, 2021. Factors that may influence our estimates include generic competition, seasonality of products, wholesaler purchases in light of increases in wholesaler list prices, new product launches, new warehouse openings by wholesalers and new customer stockings by wholesalers. In addition, these estimates are calculated using third-party data, which may be impacted by their recordkeeping processes.

Revlimidand Pomalyst are distributed in the U.S. primarily through contracted pharmacies under the Revlimid REMS and Pomalyst REMS programs, respectively. These are proprietary risk-management distribution programs tailored specifically to provide for the safe and appropriate distribution and use of Revlimidand Pomalyst.Internationally, Revlimidand Imnovid are distributed under mandatory risk-management distribution programs tailored to meet local authorities’ specifications to provide for the products’ safe and appropriate distribution and use. These programs may vary by country and, depending upon the country and the design of the risk-management program, the product may be sold through hospitals or retail pharmacies.

Our non-U.S. businesses have significantly more direct customers. Information on available direct customer product level inventory and corresponding out-movement information and the reliability of third-party demand information varies widely. We limit our direct customer sales channel inventory reporting to where we can influence demand. When this information does not exist or is otherwise not available, we have developed a variety of methodologies to estimate such data, including using historical sales made to direct customers and third-party market research data related to prescription trends and end-user demand. Given the difficulties inherent in estimating third-party demand information, we evaluate our methodologies to estimate direct customer product level inventory and to calculate months on hand on an ongoing basis and make changes as necessary. Factors that may affect our estimates include generic competition, seasonality of products, price increases, new product launches, new warehouse openings by direct customers, new customer stockings by direct customers and expected direct customer purchases for governmental bidding situations. As ~~a result,~~such, all of the information required to estimate months on hand in the direct customer distribution channel for non-U.S. ~~businesses~~business for the quarter ended September 30, ~~2017~~2021 is not available prior to the filing of this ~~quarterly report~~Quarterly Report on Form 10-Q. We will disclose any product with levels of inventory ~~levels~~ in excess of one month on hand or expected demand for the current quarter, subject to a de minimis exception, in ~~the~~our next ~~annual report~~Annual Report on Form 10-K.

Expenses


	Three Months Ended September 30,						Nine Months Ended September 30,
Dollars in Millions	2021		2020		% Change		2021		2020		% Change
Cost of products sold(a)	$	2,291	$	2,502	(8)	%	$	7,584	$	8,863	(14)	%
Marketing, selling and administrative	1,788		1,706		5	%	5,336		4,940		8	%
Research and development	3,251		2,499		30	%	8,747		7,393		18	%
Amortization of acquired intangible assets	2,546		2,491		2	%	7,606		7,162		6	%
Other (income)/expense, net	(409)		(915)		(55)	%	(1,113)		(488)		**
Total Expenses	$	9,467	$	8,283	14	%	$	28,160	$	27,870	1	%

Three Months Ended September 30, Nine Months Ended September 30,
Dollars in Millions 2017 2016 % Change 2017 2016 % Change
Cost of products sold $ 1,572
$ 1,305
20 % $ 4,393
$ 3,563
23 %
Marketing, selling and administrative 1,147
1,144
—
3,388
3,450
(2 )%
Research and development 1,543
1,138
36 % 4,490
3,540
27 %
Other (income)/expense (191 ) (224 ) (15 )% (1,377 ) (1,198 ) 15 %
Total Expenses $ 4,071
$ 3,363
21 % $ 10,894
$ 9,355
16 %
** In excess of +/- 100%.

(a) Excludes amortization of acquired intangible assets.

Cost of Products Sold

•Cost of products sold decreased by $211 million in the third quarter 2021 and $1.3 billion year-to-date, primarily due to lower unwinding of inventory fair value adjustments ($359 million in the third quarter 2021 and $2.3 billion year-to-date), partially offset by higher Eliquis profit sharing ($165 million in the third quarter 2021 and $560 million year-to-date). Year-to-date 2021 was impacted by impairment charges related to Inrebic regulatory approval milestones in the EU ($315 million) and foreign exchange.

Marketing, Selling and Administrative

•Marketing, selling and administrative expenses increased by $82 million in ~~both periods~~the third quarter 2021 and $396 million year-to-date, primarily due to higher ~~Eliquis~~ ~~profit sharing (approximately $150 million~~advertising and ~~$520 million for the three and nine months ended September 30, 2017, respectively)~~promotion expenses and higher ~~inventory charges, including a $70 million charge resulting from lower expected HCV demand requirements. The nine months ended September 30, 2017 also included a $128 million impairment charge~~costs to ~~reduce the carrying value of assets held-for-sale to their estimated fair value. Refer to "Item 1. Financial Statements—Note 4. Acquisitions, Divestitures~~support new product launches.

Research and ~~Licensing Arrangements" for further information.~~Development

•Research and development expense increased $752 million in ~~both periods~~the third quarter 2021 and $1.4 billion year-to-date, primarily due to IPRD impairment charges, higher license and asset acquisition charges ~~accelerated depreciation~~ and higher costs associated with the ~~expansion of~~ ~~Opdivo~~ ~~development programs.~~broader portfolio. The ~~nine months ended September 30, 2017~~third quarter 2021 included a $610 million IPRD impairment charge relating to an investigational compound being studied as a potential treatment for hematologic diseases. Year-to-date 2021 also included ~~higher~~a $230 million IPRD impairment ~~charges.~~

~~The significant~~charge relating to an investigational compound being studied as a potential treatment for fibrotic diseases. Significant license and asset acquisition ~~transactions and other~~ charges included in ~~R&D~~Research and development expense were as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
Dollars in Millions	2021		2020		2021		2020
Eisai up-front collaboration fee	$	—	$	—	$	650	$	—
Agenus up-front license fee	200		—		200		—
Prothena opt-in license fee	—		—		80		—


bluebird collaboration fee	—		—		—		200
Forbius asset acquisition	—		178		—		178
Cormorant milestone	—		—		—		100
Other milestones	—		25		50		50
License and asset acquisition charges	$	200	$	203	$	980	$	528

Three Months Ended September 30, Nine Months Ended September 30,
Dollars in Millions 2017 2016 2017 2016
IFM $ 310
$ —
$ 310
$ —
CytomX —
—
200
10
Flexus —
—
93
100
Cardioxyl —
—
100
—
Padlock —
—
—
139
Cormorant —
35
—
35
Other —
10
50
25
License and asset acquisition charges 310
45
753
309
IPRD impairments —
—
75
—
Accelerated depreciation and other 64
14
232
40
Amortization of Acquired Intangible Assets

License and asset acquisition charges include upfront payments for the IFM, CytomX, Padlock and Cormorant arrangements and milestone payments for the CytomX, Flexus and Cardioxyl arrangements. These arrangements were related to certain investigational oncology, cardiovascular and immunoscience compounds.

~~IPRD impairment charges~~•Amortization of acquired intangible assets increased by $55 million in the ~~nine months ended September 30, 2017 related~~third quarter 2021 and $444 million year-to-date, due to the ~~discontinued development~~timing of ~~an investigational compound which was part of our alliance with F-Star Alpha.~~additional product approvals.

~~Accelerated depreciation and other charges resulted from the expected exit of R&D sites~~

Other (Income)/Expense, Net

•Other (income)/expense, net changed by $506 million in the ~~U.S. through 2020~~third quarter 2021 and $625 million year-to-date, primarily due to fair value adjustments to contingent value rights and equity investments and other items discussed below.


	Three Months Ended September 30,				Nine Months Ended September 30,
Dollars in Millions	2021		2020		2021		2020
Interest expense	$	328	$	346	$	1,011	$	1,065
Contingent consideration	—		(988)		(510)		(597)
Royalties and licensing income	(425)		(403)		(1,197)		(1,124)
Equity investment gains	(465)		(244)		(1,214)		(724)
Integration expenses	141		195		434		535
Provision for restructuring	27		176		150		451
Litigation and other settlements	13		10		49		41
Transition and other service fees	(6)		(18)		(43)		(129)
Investment income	(12)		(13)		(33)		(99)
Reversion excise tax	—		—		—		76
Divestiture losses/(gains)	2		1		(9)		(6)
Intangible asset impairment	—		—		—		21


Loss on debt redemption	—		—		281		—
Other	(12)		23		(32)		2
Other (income)/expense, net	$	(409)	$	(915)	$	(1,113)	$	(488)

•Contingent consideration primarily includes fair value adjustments resulting from the ~~reduction~~change in the ~~estimated useful lives~~traded price of contingent value rights issued with the ~~related assets for each site.~~

~~Refer to "Item 1. Financial Statements—Note 3. Alliances, Note 4. Acquisitions, Divestitures and Licensing Arrangements and Note 6. Restructuring" for further information.~~

Other income increased in the nine months ended September 30, 2017 due to higher royalties and licensing income and litigation and other settlement income partially offset by lower divestiture gains and transition and other service fees and higher restructuring charges.Celgene acquisition. The ~~significant changes included in other income were as follows:~~

Three Months Ended September 30, Nine Months Ended September 30,
Dollars in Millions 2017 2016 2017 2016
Provision for restructuring $ 28
$ 19
$ 207
$ 41
Litigation and other settlements —
(1 ) (489 ) 48
Divestiture (gains)/losses 1
(21 ) (126 ) (574 )
Royalties and licensing income (209 ) (158 ) (1,093 ) (579 )
Transition and other service fees (12 ) (57 ) (32 ) (184 )

Restructuring charges relate to changes to the Company's operating model to drive continued success in the near- and long-term through a more focused investment in commercial opportunities for key brands and markets, a competitive and more agile R&D organization that can accelerate the pipeline, streamline operations and realign manufacturing capabilities that broaden biologics capabilities to reflect the current and future portfolio as well as streamline and simplify our small-molecule supply network. The new operating model is expected to enable the Company to deliver the strategic, financial and operational flexibility necessary to invest in the highest priorities across the Company. Aggregate restructuring charges of approximately $250 million are expected to be incurred in 2017 for all actions in addition to accelerated depreciation impacts resulting from early site exits.

~~Litigation and other settlements include BMS's share of a patent-infringement litigation settlement related to Merck's PD-1 antibody~~ Keytruda* in the first quarter of 2017 as BMS and Ono signed a global patent license agreement with Merck. Merck made an initial payment of $625 million to BMS and Ono, of which BMS received $481 million. Merck is also obligatedcontractual obligation to pay ~~ongoing royalties on global sales of~~ Keytruda* ~~of 6.5% from~~the contingent value rights terminated in January ~~1, 2017 through~~2021 because the FDA did not approve liso-cel (JCAR017) by December 31, ~~2023, and 2.5% from January 1, 2024 through December 31, 2026. The companies also granted certain rights to each other under their respective~~

2020.

~~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 parties' legal fees.~~

Divestiture gains include additional contingent consideration for the diabetes business ($100 million) in the first quarter of 2017, an OTC product business in the second quarter of 2016 ($277 million) and the investigational HIV medicines business in the first quarter of 2016 ($272 million).

•Royalties and licensing income ~~include upfront~~includes diabetes business royalties, Keytruda* royalties, Tecentriq* royalties, up-front licensing fees ~~from Biogen ($300 million)~~ and ~~Roche ($170 million) in the second quarter of 2017 in connection with the out-licensing of certain investigational genetically defined disease compounds.~~

~~Transition and other service fees in 2016 included fees resulting from the divestiture of the diabetes business in 2014 and the investigational HIV medicines business in 2016.~~

milestones for products that have not obtained commercial approval. Refer to ~~"Item~~“Item 1. Financial Statements—Note 4. ~~Acquisitions,~~ Divestitures, Licensing and ~~Licensing Arrangements, Note 5.~~ Other ~~(Income)/Expense, Note 6. Restructuring~~Arrangements” for further information.

•Equity investment gains includes fair value adjustments for investments that have readily determinable fair value and observable price changes for investments without readily determinable fair values resulting primarily from initial public offerings or third-party acquisitions of entities which we held an ownership interest. Our share of income from equity method investments are primarily due to fair value adjustments attributed to limited partnerships. Refer to “Item 1. Financial Statements—Note 9. Financial Instruments and Fair Value ~~Measurements"~~Measurements” for more information.

•Integration expenses primarily includes consulting fees to implement Celgene integration initiatives related to processes and systems.

•Provision for restructuring includes exit and other costs primarily related to the Celgene acquisition plan. We are on track to achieve the annualized pre-tax cost savings of approximately $3.0 billion through 2022 as detailed in the restructuring activities. Refer to “Item 1. Financial Statements—Note 6. Restructuring” for further information.

•Investment income decreased year-to-date 2021 primarily due to lower interest rates.

•Reversion excise tax resulted from the transfer of the retiree medical plan assets back to the Company in the first quarter 2020.

•A loss on debt redemption resulted from the early redemption of $3.5 billion long-term debt obligations in the first quarter 2021.

Income Taxes


	Three Months Ended September 30,						Nine Months Ended September 30,							Three Months Ended September 30,						Nine Months Ended September 30,
Dollars in Millions	2017			2016			2017			2016			Dollars in Millions	2021			2020			2021			2020
Earnings Before Income Taxes	$	1,183		$	1,559		$	4,433		$	4,829		Earnings Before Income Taxes	$	2,157		$	2,257		$	6,240		$	3,580
Provision for Income Taxes	327			344			1,129			1,220			Provision for Income Taxes	605			379			1,598			2,548
Effective Tax Rate	27.6		%	22.1		%	25.5		%	25.3		%	Effective Tax Rate	28.0		%	16.8		%	25.6		%	71.2		%

Impact of Specified Items													Impact of Specified Items	13.1		%	(0.3)		%	9.4		%	55.5		%
Effective Tax Rate Excluding Specified Items													Effective Tax Rate Excluding Specified Items	14.9		%	17.1		%	16.2		%	15.7		%

The tax impact attributed to specified items was primarily due to low jurisdictional tax rates ~~and other tax impacts~~ attributed to ~~R&D charges, divestiture transactions~~the unwinding of inventory fair value adjustments and ~~other specified items increased the effective tax rate by 3.7%~~intangible asset amortization, an IPRD impairment charge and ~~3.1% in the~~contingent value rights fair value adjustments that are not taxable or deductible. The nine months ended September 30, ~~2017~~2020 includes an $853 million deferred tax charge resulting from an internal transfer of certain intangible assets to the U.S. and ~~2016, respectively. In addition,~~an additional $266 million GILTI tax charge upon finalization of the ~~adoption of amended income~~Otezla* divestiture tax ~~accounting guidance reduced~~consequences with tax authorities. The 2.2% reduction in the effective tax rate ~~by 2.1%~~excluding specified items during the third quarter 2021 resulted primarily from changes in ~~the nine months ended September 30, 2017 which was offset by~~previously estimated annual effective tax rates in 2020 due to jurisdictional earnings ~~mix between high and low tax jurisdictions.~~mix. Refer to ~~"Item~~“Item 1. Financial Statements—Note ~~1. Basis of Presentation and Recently Issued Accounting Standards and Note~~ 7. Income ~~Taxes"~~Taxes” for ~~further~~additional information.

Comprehensive U.S. tax reform continues to be discussed and proposed, including among other items, changes to the corporate tax rate, a border adjustment tax and changes to how the U.S. taxes foreign earnings. It is currently uncertain whether any of these changes will be enacted, and if so, the effective dates. If comprehensive tax reform occurs, our financial condition, results of operations and cash flows could be significantly impacted, however, we are unable to determine the potential impact at this time.

Non-GAAP Financial Measures

Our non-GAAP financial measures, ~~including~~such as non-GAAP earnings and related EPS information, are adjusted to exclude certain costs, expenses, gains and losses and other specified items that are evaluated on an individual basis. These items are adjusted after considering their quantitative and qualitative aspects and typically have one or more of the following characteristics, such as being highly variable, difficult to project, unusual in nature, significant to the results of a particular period or not indicative of future operating results. Similar charges or gains were recognized in prior periods and will likely reoccur in future periods including (i) amortization of acquired intangible assets, including product rights that generate a significant portion of our ongoing revenue and will recur until the intangible assets are fully amortized, (ii) unwind of inventory fair value adjustments, (iii) acquisition and integration expenses, (iv) restructuring costs, (v) accelerated depreciation and impairment of property, plant and equipment and intangible assets, (vi) R&D charges or other income resulting from up-front or contingent milestone payments in connection with the acquisition or licensing of third-party intellectual property rights, (vii) divestiture ~~and debt redemption~~ gains or losses, ~~pension~~(viii) stock compensation resulting from accelerated vesting of Celgene awards and certain retention-related employee compensation charges ~~and~~related to the Celgene transaction, (ix) pension, legal and other contractual ~~settlements,~~settlement charges, (x) equity investment and contingent value rights fair value adjustments, including fair value adjustments attributed to limited partnership equity method investments and (xi) amortization of fair value adjustments of debt acquired from Celgene in our 2019 exchange offer, among other items. Deferred and current income taxes attributed to these items are also adjusted for considering their individual impact to the overall tax expense, deductibility and jurisdictional tax rates. Certain other significant tax items are also excluded such as the impact resulting from internal transfer of intangible assets and the Otezla* divestiture in the second quarter 2020. We also provide international revenues for our priority products excluding the impact of foreign exchange. We calculate foreign exchange impacts by converting our current-period local currency financial results using the prior period average currency rates and comparing these adjusted amounts to our current-period results. Reconciliations of these non-GAAP measures to the most comparable GAAP measures are included in Exhibit 99.2 to our Form 8-K filed on October 27, 2021 and are incorporated herein by reference.

Non-GAAP information is intended to portray the results of our baseline performance, supplement or enhance management, analysts and ~~investors~~investors’ overall understanding of our underlying financial performance and facilitate comparisons among current, past and future periods. For example, non-GAAP earnings and EPS information is an indication of our baseline performance before items that are considered by us to not be reflective of our ongoing results. In addition, this information is among the primary indicators that we use as a basis for evaluating performance, allocating resources, setting incentive compensation targets and planning and forecasting for future periods. This information is not intended to be considered in isolation or as a substitute for net earnings or diluted EPS prepared in accordance with ~~GAAP.~~GAAP and may not be the same as or comparable to similarly titled measures presented by other companies due to possible differences in method and in the items being adjusted. We encourage investors to review our financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure.

Specified items were as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
Dollars in Millions	2021		2020		2021		2020
Inventory purchase price accounting adjustments	$	97	$	456	$	264	$	2,590
Intangible asset impairment	—		—		315		—
Employee compensation charges	—		—		—		3
Site exit and other costs	—		3		24		32
Cost of products sold	97		459		603		2,625

Employee compensation charges	—		7		1		34
Site exit and other costs	1		(1)		—		4
Marketing, selling and administrative	1		6		1		38

License and asset acquisition charges	200		203		980		528
IPRD impairments	610		—		840		—
Inventory purchase price accounting adjustments	1		8		1		25
Employee compensation charges	—		8		1		41
Site exit and other costs	1		4		1		99
Research and development	812		223		1,823		693

Amortization of acquired intangible assets	2,546		2,491		7,606		7,162

Interest expense(a)	(29)		(40)		(91)		(122)
Contingent consideration	—		(988)		(510)		(597)
Royalties and licensing income	—		(53)		(29)		(154)
Equity investment gains	(465)		(214)		(1,227)		(693)
Integration expenses	141		195		434		535
Provision for restructuring	27		176		150		451


Reversion excise tax	—		—		—		76
Divestiture losses/(gains)	2		1		(9)		(6)



Loss on debt redemption	—		—		281		—

Other (income)/expense, net	(324)		(923)		(1,001)		(510)

Increase to pretax income	3,132		2,256		9,032		10,008

Income taxes on items above	(183)		(405)		(871)		(699)
Income taxes attributed to Otezla* divestiture	—		11		—		266
Income taxes attributed to internal transfer of intangible assets	—		—		—		853
Income taxes	(183)		(394)		(871)		420

Increase to net earnings	$	2,949	$	1,862	$	8,161	$	10,428

(a) Includes amortization of purchase price adjustments to Celgene debt.

Three Months Ended September 30, Nine Months Ended September 30,
Dollars in Millions 2017 2016 2017 2016
Impairment charges $ 1
$ —
$ 128
$ —
Accelerated depreciation and other shutdown costs —
7
3
15
Cost of products sold 1
7
131
15

License and asset acquisition charges 310
45
753
309
IPRD impairments —
—
75
—
Accelerated depreciation and other 64
14
232
40
Research and development 374
59
1,060
349

Provision for restructuring 28
19
207
41
Litigation and other settlements —
(3 ) (481 ) 40
Divestiture gains —
(13 ) (100 ) (559 )
Royalties and licensing income —
—
(497 ) —
Pension charges 22
19
91
66
Intangible asset impairments —
—
—
15
Loss on debt redemption —
—
109
—
Other (income)/expense 50
22
(671 ) (397 )

Increase/(decrease) to pretax income 425
88
520
(33 )
Income taxes on specified items (41 ) (3 ) 51
156
Increase to net earnings 384
85
571
123
Noncontrolling interest —
—
(59 ) —
Increase to net earnings used for Diluted Non-GAAP EPS calculation $ 384
$ 85
$ 512
$ 123

The reconciliations from GAAP to Non-GAAP were as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
Dollars in Millions, except per share data	2021		2020		2021		2020
Net Earnings Attributable to BMS Used for Diluted EPS Calculation – GAAP	$	1,546	$	1,872	$	4,622	$	1,012
Specified Items	2,949		1,862		8,161		10,428
Net Earnings Attributable to BMS Used for Diluted EPS Calculation – Non-GAAP	$	4,495	$	3,734	$	12,783	$	11,440

Weighted-Average Common Shares Outstanding – Diluted	2,243		2,290		2,253		2,295



Diluted Earnings Per Share Attributable to BMS – GAAP	$	0.69	$	0.82	$	2.05	$	0.44
Diluted EPS Attributable to Specified Items	1.31		0.81		3.62		4.54
Diluted EPS Attributable to BMS – Non-GAAP	$	2.00	$	1.63	$	5.67	$	4.98

Three Months Ended September 30, Nine Months Ended September 30,
Dollars in Millions, except per share data 2017 2016 2017 2016
Net Earnings Attributable to BMS used for Diluted EPS Calculation – GAAP $ 845
$ 1,202
$ 3,335
$ 3,563
Specified Items 384
85
512
123
Net Earnings used for Diluted EPS Calculation – Non-GAAP $ 1,229
$ 1,287
$ 3,847
$ 3,686

Average Common Shares Outstanding – Diluted 1,645
1,679
1,655
1,679

Diluted Earnings Per Share – GAAP $ 0.51
$ 0.72
$ 2.02
$ 2.12
Diluted EPS Attributable to Specified Items 0.24
0.05
0.30
0.08
Diluted Earnings Per Share – Non-GAAP $ 0.75
$ 0.77
$ 2.32
$ 2.20

FINANCIAL POSITION, LIQUIDITY AND CAPITAL RESOURCES

Our net ~~cash~~debt position was as follows:


Dollars in Millions	September 30, 2021		December 31, 2020
Cash and cash equivalents	$	13,540	$	14,546
Marketable debt securities – current	2,123		1,285
Marketable debt securities – non-current	46		433
Total cash, cash equivalents and marketable debt securities	15,709		16,264
Short-term debt obligations	(5,065)		(2,340)
Long-term debt	(39,677)		(48,336)
Net debt position	$	(29,033)	$	(34,412)

Dollars in Millions September 30,
2017 December 31,
2016
Cash and cash equivalents $ 4,644
$ 4,237
Marketable securities – current 2,478
2,113
Marketable securities – non-current 2,526
2,719
Cash, cash equivalents and marketable securities 9,648
9,069
Short-term debt obligations (1,461 ) (992 )
Long-term debt (6,982 ) (5,716 )
Net cash position $ 1,205
$ 2,361

~~Cash, cash equivalents~~We regularly assess our anticipated working capital needs, debt and ~~marketable~~leverage levels, debt maturities, capital expenditure requirements, dividend payouts, potential share repurchases and future investments or acquisitions in order to maximize shareholder return, efficiently finance our ongoing operations and maintain flexibility for future strategic transactions. We also regularly evaluate our capital structure to ensure financial risks, adequate liquidity access and lower cost of capital are efficiently managed, which may lead to the issuance of additional debt securities, ~~held in~~ the ~~U.S. were approximately $200 million at September 30, 2017. Most~~repurchase of debt securities prior to maturity or the remaining $9.4 billion is held primarily in low-tax jurisdictions attributable to earnings expected to be indefinitely reinvested offshore. Cash repatriations are subject to restrictions in certain jurisdictions and may be subject to withholding and additional U.S. income taxes.issuance or repurchase of common stock. We believe that our existing cash, cash equivalents and marketable debt securities together with cash generated from operations and, if required, from the issuance of commercial paper ~~in the U.S.~~ will be sufficient to satisfy our ~~normal~~anticipated cash ~~requirements~~needs for at least the next few years, including dividends, capital expenditures, milestone payments, working capital, ~~and maturities of long-term debt.~~

~~Management continuously evaluates the Company’s capital structure to ensure the Company is financed efficiently, which may result in the~~restructuring initiatives, business development, repurchase of common stock, debt maturities of approximately $11.5 billion through 2024 as well as any debt repurchases through redemptions or tender offers.

We have a share repurchase program authorized by our Board of Directors allowing for repurchases of our shares. The specific timing and ~~debt~~number of shares repurchased will be determined by our management at its discretion and will vary based on market conditions, securities ~~termination~~law limitations and other factors. The share repurchase program does not obligate us to repurchase any specific number of ~~interest rate swap contracts prior~~shares, does not have a specific expiration date and may be suspended or discontinued at any time. The repurchases may be effected through a combination of one or more open market repurchases, privately negotiated transactions, transactions structured through investment banking institutions and other derivative transactions, relying on Rule 10b-18 and Rule 10b5-1 under the Exchange Act. The outstanding share repurchase authority authorization under the program was $4.4 billion as of December 31, 2020. In January 2021, our Board of Directors approved an increase of $2.0 billion to ~~maturity and issuance of debt securities.~~

~~The Company repurchased $2.2 billion of~~the share repurchase authorization for our common stock, ~~in 2017 through accelerated~~increasing the total outstanding share repurchase ~~agreements, Rule 10b5-1 plans and open market purchases. The~~authorization to approximately $6.4 billion. We repurchased approximately 54 million shares of our common stock ~~repurchases were funded by $1.5~~for $3.5 billion during the nine months ended September 30, 2021 reducing the remaining share repurchase capacity under the share repurchase program to approximately $2.9 billion as of ~~new long-term debt and cash. The Company repaid $750 million of long-term debt at maturity in the third quarter of 2017 and repurchased $337 million of long-term debt in the second quarter of 2017.~~September 30, 2021. Refer to “Item 1. Financial Statements—Note ~~9. Financial Instruments and Fair Value Measurements and Note~~ 15. ~~Equity"~~Equity” for ~~further~~additional information.

We issued commercial paper to fund near-term domestic liquidity requirements during 2017. The average amount of commercial paper outstanding was $211 million at a weighted-average rate of 1.12% during 2017. The maximum amount of commercial paper outstanding was $1.0 billion with $799 million outstanding at September 30, 2017.

Dividend payments were ~~$1.9~~$3.3 billion ~~in each of the nine months ended September 30, 2017 and 2016. Dividends declared per common share were $1.17 and $1.14~~ in the nine months ended September 30, ~~2017 and 2016, respectively.~~2021. Dividends declared per common share were $1.47 in the nine months ended September 30, 2021. Dividend decisions are made on a quarterly basis by our Board of Directors.

Annual capital expenditures were ~~$1.2 billion~~approximately $750 million in ~~2016~~2020 and are expected to be approximately $1.0 billion in ~~2017~~2021 and ~~$900 million~~$1.2 billion in ~~2018.~~2022. We continue to ~~expand~~make capital expenditures in connection with the expansion of our ~~biologics~~ manufacturing capabilities, research and development and other facility-related activities. ~~For example,~~

Under our commercial paper program, we ~~are constructing~~may issue a ~~new large-scale biologics manufacturing~~maximum of $5.0 billion unsecured notes that have maturities of not more than 366 days from the date of issuance. There were no commercial paper borrowings outstanding as of September 30, 2021.

In 2021, we purchased aggregate principal amount of $3.5 billion of certain of our debt securities for approximately $4.0 billion of cash in a series of tender offers and “make whole” redemptions and $2.0 billion of notes matured and were repaid.

As of September 30, 2021, we had four separate revolving credit facilities totaling $6.0 billion, which consisted of a 364-day $2.0 billion facility expiring in ~~Ireland~~January 2022, a three-year $1.0 billion facility expiring in January 2022 and two five-year $1.5 billion facilities that ~~will produce multiple therapies~~were extended to September 2025 and July 2026, respectively. The revolving facilities provide for customary terms and conditions with no financial covenants, may be used to provide backup liquidity for our ~~growing biologics portfolio when completed in 2019.~~commercial paper borrowings and are extendable annually by one year on the anniversary date with the consent of the lenders. No borrowings were outstanding under revolving credit facilities at September 30, 2021 or December 31, 2020.

Our investment portfolio includes non-current marketable debt securities, which are subject to changes in fair value as a result of interest rate fluctuations and other market factors. Our investment policy establishes limits on the amount and ~~duration~~time to maturity of investments with any institution. The policy also requires that investments are only entered into with corporate and financial institutions that meet high credit quality standards. Refer to “Item 1. Financial Statements—Note 9. Financial Instruments and Fair Value Measurements” for further information.

We currently have three separate revolving credit facilities totaling $5 billion from a syndicate of lenders. The facilities provide for customary terms and conditions with no financial covenants. Our 364 day $2.0 billion facility expires in March 2018 and our two $1.5 billion facilities were extended to October 2021 and July 2022. Our two $1.5 billion, five-year facilities are extendable annually by one year on the anniversary date with the consent of the lenders. No borrowings were outstanding under any revolving credit facility at September 30, 2017 or December 31, 2016.

Additional regulations in the U.S. could be passed in the future including additional healthcare reform initiatives, comprehensive tax reform, additional pricing laws and potential importation restrictions which may reduce our results of operations, operating cash flow, liquidity and financial flexibility. We continue to monitor the potential impact of the economic conditions in certain European and other countries and the related impact on prescription trends, pricing discounts and creditworthiness of our customers. We believe these economic conditions will not have a material impact on our liquidity, cash flow or financial flexibility.

Credit Ratings

~~BMS's~~Our current long-term and short-term credit ratings assigned by ~~Moody's~~Moody’s Investors Service are A2 and Prime-1, respectively, with a ~~negative~~stable long-term credit ~~outlook. BMS's~~outlook, and our current long-term and short-term credit ratings assigned by Standard & ~~Poor's~~Poor’s are A+ and ~~A-1+,~~A-1, respectively with a ~~stable~~negative long-term credit outlook. ~~BMS's long-term and short-term credit ratings assigned by Fitch are A- and F2, respectively, with a stable long-term credit outlook. Our~~The long-term ratings reflect the ~~agencies'~~agencies’ opinion that we have a low default risk but are somewhat susceptible to adverse effects of changes in circumstances and economic conditions. ~~Our~~The short-term ratings reflect the ~~agencies'~~agencies’ opinion that we have good to extremely strong capacity for timely repayment. Any credit rating downgrade may affect the interest rate of any debt we may incur, the fair market value of existing debt and our ability to access the capital markets generally.

Cash Flows

The following is a discussion of cash flow activities:


	Nine Months Ended September 30,
Dollars in Millions	2021		2020
Cash flow provided by/(used in):
Operating activities	$	12,150	$	10,697
Investing activities	(939)		953
Financing activities	(12,257)		(4,634)

Nine Months Ended September 30,
Dollars in Millions 2017 2016
Cash flow provided by/(used in):
Operating activities $ 4,158
$ 1,615
Investing activities (1,085 ) 1,464
Financing activities (2,725 ) (2,048 )

Operating Activities

Cash flow from operating activities represents the cash receipts and disbursements from all of our activities other than investing and financing activities. Operating cash flow is derived by adjusting net earnings for noncontrolling interest, non-cash operating items, gains and losses attributed to investing and financing activities and changes in operating assets and liabilities resulting from timing differences between the receipts and payments of cash and when the transactions are recognized in our results of operations. As a result, changes in cash from operating activities reflect the timing of cash collections from customers and alliance partners; payments to suppliers, alliance partners and employees; customer discounts and rebates; and tax payments in the ordinary course of business. For example, annual employee bonuses are typically paid in the first quarter of the subsequent year. ~~In addition, cash collections continue to be impacted by longer payment terms for certain biologic products in the U.S., primarily our newer oncology products including~~ ~~Opdivo~~, ~~Yervoy~~ ~~and~~ ~~Empliciti~~ ~~(120 days to 150 days). The longer payment terms are used to more closely align with the insurance reimbursement timing for physicians and cancer centers following administration to the patients.~~

The ~~$2.5~~$1.5 billion change in cash flow from operating activities compared to ~~2016~~2020 was primarily ~~attributable~~due to ~~the following items in addition to increased sales~~lower tax payments of approximately $700 million and ~~the timing of~~higher cash collections and timing of payments in the ordinary course of ~~business:~~business.

~~Lower income tax payments of approximately $1.4 billion;~~

~~Higher out-license proceeds of approximately $500 million primarily related to the Biogen and Roche transactions; and~~

~~BMS's share of litigation settlement proceeds of $481 million related to Merck's PD-1 antibody~~ ~~Keytruda*.~~

~~Partially offset by:~~

~~Higher R&D licensing payments of approximately $300 million primarily due to the CytomX transaction.~~

Investing Activities

Cash requirements from investing activities include cash used for acquisitions, manufacturing and facility-related capital expenditures and purchases of marketable securities with original maturities greater than 90 days ~~reduced by~~at the time of purchase, proceeds from business divestitures (including royalties) ~~and~~, the sale and maturity of marketable ~~securities.~~securities, sale of equity investments and upfront and contingent milestones from licensing arrangements.

The ~~$2.5~~$1.9 billion change in cash flow from investing activities compared to ~~2016~~2020 was primarily attributable ~~to:~~

~~Lower net sales~~to changes in the amount of marketable debt securities ~~with maturities greater than 90 days~~held of ~~$1.6~~$2.1 billion, ~~due to~~ higher ~~available cash balances;~~

~~Lower business divestiture proceeds of approximately $700 million primarily due to certain OTC products~~licensing and ~~investigational HIV business divestitures in 2016; and~~

~~Higher~~ asset acquisition payments of approximately ~~$400~~$700 million ~~primarily due to the acquisition~~in 2021, partially offset by higher proceeds from sales of ~~IFM in 2017.~~equity investments of approximately $1.0 billion.

Financing Activities

Cash requirements from financing activities include cash used to pay dividends, repurchase common stock and repay long-term debt and other borrowings reduced by proceeds from the exercise of stock options and issuance of long-term debt and other borrowings.

The ~~$677 million~~$7.6 billion change in cash flow from financing activities compared to ~~2016~~2020 was ~~primarily attributable to:~~

~~Higher repurchase of common stock of $2.0 billion~~ primarily due to ~~the accelerated~~higher debt repayments of $4.5 billion, including a series of tender offer and “make whole” redemptions, and higher share ~~repurchase agreements.~~

~~Partially offset by:~~

~~Higher net borrowings~~repurchases of ~~$1.4~~$3.5 billion ~~primarily to fund the repurchase of common stock.~~

in 2021.

Product and Pipeline Developments

~~We manage our~~

Our R&D programs are managed on a portfolio basis ~~investing resources in each stage~~ from early discovery through late-stage ~~development. We continually evaluate our portfolio of R&D assets to ensure that there is an appropriate~~development and include a balance of ~~early-~~early-stage and late-stage programs to support future growth. ~~We consider our~~Our late stage R&D programs ~~that have entered into~~in Phase III development ~~to be significant, as these programs constitute our late-stage development pipeline. These programs~~ include both investigational compounds ~~in Phase III development~~ for initial indications and ~~marketed products in Phase III development for~~ additional indications or ~~formulations.~~formulations for marketed products. The following are the ~~recent~~ developments in our marketed products and our late-stage ~~pipeline:~~

pipeline since the start of the third quarter:



Product	Indication	Date	Developments


Opdivo	~~Gastric~~Bladder	August 2021	Announced FDA approval for Opdivo for the adjuvant treatment of patients with urothelial carcinoma who are at high risk of recurrence after undergoing radical resection, regardless of prior neoadjuvant chemotherapy, nodal involvement or PD-L1 status. The approval is based on the Phase III CheckMate-274 trial.
	Gastric and Esophageal Cancers	October 2021	Announced EC approval of Opdivo in combination with fluoropyrimidine- and platinum-based combination chemotherapy for the first-line treatment of adult patients with HER2-negative advanced or metastatic gastric, gastroesophageal junction, or esophageal adenocarcinoma whose tumors express PD-L1 with a combined positive score ≥ 5. The approval is based on results from the Phase III Checkmate-649 trial.
		July 2021	Announced EC approval of Opdivo for the adjuvant treatment of adult patients with esophageal or gastroesophageal junction cancer who have residual pathologic disease following prior neoadjuvant chemoradiotherapy. The approval is based on results from the Phase 3 CheckMate-577 trial.
	HCC	July 2021	Announced that in consultation with the FDA, we withdrew the U.S. indication for Opdivo in HCC following treatment with sorafenib. Opdivo was granted accelerated approval for this indication in 2017 based on tumor responses from the Phase I/II CheckMate-040 trial. CheckMate-459, the confirmatory randomized study of Opdivo versus sorafenib in the first-line setting, did not achieve statistical significance for its primary endpoint of overall survival per the pre-specified analysis.
	Hodgkin Lymphoma	September ~~2017~~2021	~~Approval~~ Ono, our alliance partner for Opdivo in Japan, announced that Japan's Ministry of Health, Labour and Welfare approved Opdivo for the treatment of pediatric patients with recurrent or refractory classical Hodgkin lymphoma, for a partial change in approved items of the manufacturing and marketing approval. The approval is based on results from the Phase I PENGUIN trial.
	RCC	August 2021	Ono, our alliance partner for Opdivo in Japan, announced that Japan’s Ministry of Health, Labour and Welfare approved the combination therapy of Opdivo and Cabometyx* for the treatment of unresectable or metastatic RCC, for a partial change in approved items of the manufacturing and marketing approval. The approval is based on results from the Phase III Checkmate-9ER trial.


Opdivo + Yervoy	Esophageal	September 2021	Announced that the FDA has accepted the sBLA for Opdivo in combination with Yervoy and Opdivo in combination with fluoropyrimidine- and platinum-containing chemotherapy as first-line treatments for adult patients with unresectable advanced, recurrent or metastatic esophageal squamous cell carcinoma. The FDA assigned a PDUFA goal date of May 28, 2022. The sBLA submissions were based on the Phase III Checkmate-648 trial.
		September 2021	Ono, our alliance partner for Opdivo in Japan, announced that the companies have submitted supplemental applications in Japan for Opdivo in combination with Yervoy and Opdivo in combination with chemotherapy for the first-line treatment of unresectable, advanced or recurrent ~~gastric~~esophageal cancer, ~~which has progressed after chemotherapy, received by our alliance partner, Ono.~~for a partial change in approved items of the manufacturing and marketing approvals in Japan. The applications are based on results from the Phase III CheckMate-648 trial.
		~~HCC~~August 2021	Announced that the EMA validated its MAA for both Opdivo in combination with Yervoy and Opdivo in combination with fluoropyrimidine- and platinum-containing chemotherapy as first-line treatments for adult patients with unresectable advanced, recurrent or metastatic esophageal squamous cell carcinoma. Validation of these applications confirm that the submissions are complete and begins the EMA’s centralized review process. The applications are based on results from the pivotal Phase III CheckMate-648 trial.
	Malignant Pleural Mesothelioma	September ~~2017~~2021	Announced three-year data from the CheckMate-743 trial that demonstrated a durable survival benefit with first-line treatment with Opdivo plus Yervoy compared to platinum-based standard-of-care chemotherapy in patients with unresectable malignant pleural mesothelioma, regardless of histology.
	RCC	September 2021	Announced that Opdivo plus Yervoy continued to demonstrate durable, long-term survival in the Phase III CheckMate-214 trial, with a five-year survival rate of 48% in patients with previously untreated advanced or metastatic RCC. After a median follow-up of 67.7 months, Opdivo plus Yervoy maintained superior overall survival and response benefits versus sunitinib in both patients with intermediate- and poor-risk prognostic factors, the primary endpoint population, and across all randomized patients.
	SCCHN	July 2021	Announced an update on the Phase III CheckMate-651 trial comparing Opdivo plus Yervoy to the EXTREME regimen (cetuximab, cisplatin/carboplatin and fluorouracil) as a first-line treatment in platinum-eligible patients with recurrent or metastatic SCCHN. Although Opdivo plus Yervoy showed a clear, positive trend towards overall survival in patients whose tumors express PD-L1 with a combined positive score ≥ 20, the study did not meet its primary endpoints.


Orencia			aGvHD			August 2021			Announced that the FDA has accepted the sBLA for Orencia for the prevention of moderate to severe aGvHD in patients 6 years of age and older receiving unrelated donor hematopoietic stem cell transplantation. The FDA granted the application Priority Review and assigned a PDUFA goal date of December 23, 2021. The sBLA is based on results from the Phase II ABA2 trial and a registry trial based on real world evidence.


Zeposia	UC	October 2021	Received a positive CHMP opinion of Zeposia for the treatment of adults with moderately to severely active UC who have had an inadequate response, lost response, or were intolerant to either conventional therapy or a biologic agent. The opinion is based on data from the Phase III True North trial.
	MS	October 2021	Announced interim results from the Phase III open-label extension trial DAYBREAK, demonstrating the long-term efficacy and safety profile of Zeposia in patients with relapsing forms of MS. In the DAYBREAK extension study, safety was consistent with prior findings and no new safety signals emerged during the reporting period with long-term use of Zeposia. Treatment with Zeposia demonstrated a low annualized relapse rate of 0.103. At months 36 and 48, 75% and 71% of participants were relapse-free and 3- and 6-month confirmed disability progression was observed in 13.9% and 11.4% of participants in the trial, respectively.


Abecma			Multiple Myeloma			August 2021			Announced EC approval for Abecma for the treatment of adult patients with relapsed and refractory multiple myeloma, who have received at least three prior therapies, including an immunomodulatory agent, a proteasome inhibitor and an anti-CD38 antibody and have demonstrated disease progression on the last therapy. The approval is based on results from the pivotal KarMMa study.


deucravacitinib			UC			October 2021			Announced the Phase II LATTICE-UC study evaluating deucravacitinib compared to placebo in moderate to severe UC did not meet the primary efficacy endpoint of clinical remission at Week 12, nor secondary efficacy endpoints. The safety profile of deucravacitinib was consistent with previously reported studies in psoriasis and psoriatic arthritis, and no new safety signals were observed. The potential of deucravacitinib in UC continues to be evaluated in IM011-127, a second Phase II trial that also includes a higher dose.


mavacamten			Obstructive HCM			October 2021			Announced that the EMA validated its MAA for mavacamten for the treatment of patients with ~~HCC, a type~~obstructive HCM. Validation of ~~liver cancer, who have been previously treated with sorafenib.~~the application confirm that the submission is complete and begins the EMA’s centralized review process. The application is based on results from the pivotal Phase III EXPLORER-HCM trial.


~~mCRC~~relatlimab			~~August 2017~~Melanoma	October 2021	Announced that the EMA validated its MAA for relatlimab and nivolumab fixed-dose combination for first-line treatment of adult and pediatric patients with advanced (unresectable or metastatic) melanoma. Validation of the application confirm that the submission is complete and begins the EMA’s centralized review process. The application is based on results from the pivotal Phase II/III RELATIVITY-047 trial.
~~mCRC~~relatlimab			~~August 2017~~Melanoma	September 2021	Announced that the FDA ~~approval~~has accepted for priority review the BLA for the fixed dose combination of relatlimab and nivolumab for the treatment of adult and pediatric patients with ~~MSI-H or dMMR mCRC that has progressed following treatment with a fluoropyrimidine, oxaliplatin and irinotecan.~~
~~Melanoma~~	~~October 2017~~	~~Announced FDA accepted for priority review the Company's sBLA for~~ ~~Opdivo~~ ~~to treat patients with melanoma who are at high risk of disease recurrence following complete surgical resection. The FDA action date is February 14, 2018.~~
	~~September 2017~~	~~Announced treatment with~~ ~~Opdivo~~ ~~resulted in significant improvement in recurrence-free survival compared to~~ ~~Yervoy~~ ~~in patients with stage IIIb/c or stage IV melanoma following complete surgical resection.~~
	~~July 2017~~	~~Announced a Phase III trial evaluating~~ ~~Opdivo~~ ~~versus~~ ~~Yervoy~~ in patients with stage IIIb/c or stage IV melanoma who are at high risk of recurrence following complete surgical resection met its primary endpoint of recurrence-free survival at a planned interim analysis.
~~Multiple Myeloma~~	~~September 2017~~	~~Announced the FDA placed a partial clinical hold on CheckMate-602, CheckMate-039 and CA204142, three clinical trials investigating~~ ~~Opdivo~~ based combinations in patients with relapsed or refractory multiple myeloma. This partial clinical hold is related to risks identified in trials studying another anti-PD-1 agent, pembrolizumab, in patients with multiple myeloma.
~~NSCLC~~	~~September 2017~~	~~Announced three-year overall survival data from CheckMate-017 and CheckMate-057, two pivotal Phase III randomized studies evaluating~~ ~~Opdivo~~ ~~vs. docetaxel in patients with previously treated metastatic NSCLC.~~
~~Various~~	~~July 2017~~	~~BMS and Clovis Oncology, Inc. announced a clinical collaboration to evaluate the combination of~~ ~~Opdivo~~ ~~and~~ Rubraca* ~~(rucaparib) in pivotal Phase III trials in advanced ovarian cancer and triple-negative breast cancer as well as a Phase II trial in metastatic castration-resistant prostate cancer.~~
~~Various~~	~~July 2017~~	~~Announced FDA accepted the Company's sBLAs to update~~ ~~Opdivo~~ ~~dosing to include 480 mg infused over 30 minutes every four weeks for all currently approved monotherapy indications. The FDA action date is March 5, 2018.~~

~~Opdivo+Yervoy~~	~~RCC~~	~~September 2017~~	~~Announced CheckMate-214, a Phase III study evaluating~~ ~~Opdivo+Yervoy~~ versus sunitinib in patients with previously untreated advanced or metastatic RCC, met its co-primary endpoint, demonstrating superior overall survival in intermediate- and poor-risk patients. The combination also met a secondary endpoint of improved OS in all randomized patients. Based on a planned interim analysis, an independent Data Monitoring Committee has recommended that the trial be stopped early.
		~~August 2017~~	~~Announced topline results from CheckMate-214. The combination of~~ ~~Opdivo~~+~~Yervoy~~ ~~met the co-primary endpoint of objective response rate and was favored in the co-primary endpoint of progression-free survival, however, it did not reach statistical significance.~~
		~~July 2017~~	~~BMS and Exelixis, Inc. announced the initiation of the Phase III CheckMate 9ER trial to evaluate~~ ~~Opdivo~~ ~~in combination with~~ Cabometyx* ~~(cabozantinib) or~~ ~~Opdivo~~ ~~and~~ ~~Yervoy~~ ~~in combination with~~ Cabometyx* ~~versus sunitinib in patients with previously untreated, advanced or metastatic RCC.~~
	~~SCLC~~	~~October 2017~~	~~Announced data evaluating~~ ~~Opdivo~~ ~~and~~ ~~Opdivo+Yervoy~~ ~~in previously treated SCLC patients whose tumors were evaluable for tumor mutation burden from the Phase I/II CheckMate-032 trial.~~



~~Product~~	~~Indication~~	~~Date~~	~~Developments~~
~~Eliquis~~	~~NVAF~~	~~August 2017~~	~~Announced results from a real-world data analysis of the U.S. Humana database, in which treatment with~~ ~~Eliquis~~ ~~was associated with a significantly lower risk of stroke/systemic embolism and lower rates of major bleeding compared to warfarin in patients aged 65 years and older with NVAF.~~
			~~Announced data from EMANATE, a Phase IV trial, exploring the safety and efficacy of~~ ~~Eliquis~~ ~~in patients with NVAF undergoing cardioversion.~~
			~~Announced results from a real-world data analysis pooled from four large U.S. insurance claims databases, in which treatment with~~ ~~Eliquis~~ was associated with a lower risk of stroke/systemic embolism and lower rates of major bleeding compared to warfarin for the overall population and for each of the selected high-risk patient sub-populations.

~~Orencia~~	~~PsA~~	~~July 2017~~	EC approval for the treatment of active PsA in adults for whom the response to previous disease-modifying antirheumatic drug therapy, including methotrexate, has been inadequate, and additional systemic therapy for psoriatic skin lesions is not required.
~~Orencia~~	~~PsA~~	~~July 2017~~	~~FDA approval for active PsA in adults, a chronic, inflammatory disease that can affect both the skin and musculoskeletal system.~~

~~Sprycel~~	~~CML~~	~~July 2017~~	~~Announced the FDA accepted for priority review a supplemental NDA to treat children with Philadelphia chromosome-positive chronic phase CML, as well as a powder for oral suspension formulation of~~ ~~Sprycel. The FDA action date is November 9, 2017.~~

~~Yervoy~~	~~Melanoma~~	~~October 2017~~	~~Announced the FDA added five-year overall survival data from the Phase III CA184-029 trial to the prescribing information for~~ ~~Yervoy~~ ~~for the adjuvant treatment of fully resected cutaneous melanoma with pathologic involvement of regional lymph nodes of more than 1 mm.~~
~~Yervoy~~	~~Melanoma~~	~~July 2017~~	~~FDA approval of an expanded indication for the treatment of~~ unresectable or metastatic ~~melanoma in pediatric patients.~~

Prostvac*	~~Prostate Cancer~~	~~September 2017~~	~~Bavarian Nordic A/S announced an independent Data Monitoring Committee determined that the continuation~~melanoma. The FDA assigned a PDUFA goal date of March 19, 2022. The BLA submission was based on the Phase II/III ~~PROSPECT study of~~ Prostvac* ~~in patients with metastatic castration-resistant prostate cancer is futile.~~ RELATIVITY-047 trial.

~~CRITICAL ACCOUNTING POLICIES~~Critical Accounting Policies

The preparation of financial statements requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities and the reported amounts of revenue and expenses. Our critical accounting policies are those that significantly impact our financial condition and results of operations and require the most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. Because of this uncertainty, actual results may vary from these estimates. For a discussion of our critical accounting policies, refer to “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our ~~2016~~ ~~Annual Report on~~2020 Form 10-K. There have been no material changes to our critical accounting policies during the nine months ended September 30, ~~2017~~.2021. For information regarding the impact of recently adopted accounting standards, refer to “Item 1. Financial Statements—Note.1 Basis of Presentation and Recently Issued Accounting Standards.”

~~SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS~~Special Note Regarding Forward-Looking Statements

This ~~quarterly report~~Quarterly Report on Form 10-Q (including documents incorporated by reference) and other written and oral statements we make from time to time contain certain “forward-looking” statements within the meaning of Section 27A of the Securities Act, ~~of 1933~~ and Section 21E of the ~~Securities~~ Exchange ~~Act of 1934.~~Act. You can identify these forward-looking statements by the fact they use words such as ~~“should”, “expect”, “anticipate”, “estimate”, “target”, “may”, “project”, “guidance”, “intend”, “plan”, “believe”~~“should,” “could,” “expect,” “anticipate,” “estimate,” “target,” “may,” “project,” “guidance,” “intend,” “plan,” “believe,” “will” and other words and terms of similar meaning and expression in connection with any discussion of future operating or financial performance. One can also identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. Such forward-looking statements are based on historical performance and current expectations and projections about our future financial results, goals, plans and objectives and involve inherent risks, assumptions and uncertainties, including internal or external factors that could delay, divert or change any of them in the next several years, and could cause ~~actual outcomes~~our future financial results, goals, plans and objectives to differ materially from ~~current expectations.~~those expressed in, or implied by, the statements. These statements are likely to relate to, among other things, our goals, plans and ~~projections~~objectives regarding our financial position, results of operations, cash flows, market position, product development, product approvals, sales efforts, expenses, performance or results of current and anticipated products, our business development strategy generally and in relation to our ability to realize the projected benefits of our acquisitions of Celgene and MyoKardia, the full extent of the impact of the COVID-19 pandemic on our operations and the development and commercialization of our products, potential laws and regulations to lower drug costs, market actions taken by private and government payers to manage drug utilization and contain costs, the expiration of patents or data protection on certain products, including assumptions about our ability to retain patent exclusivity of certain products, and the outcome of contingencies such as legal proceedings and financial ~~results, which are based~~results. No forward-looking statement can be guaranteed. This Quarterly Report on current expectations that involve inherent risks and uncertainties, including internal or external factors that could delay, divert or change any of them in the next several years. We have included important factors in the cautionary statements included in this report and in the ~~2016~~ ~~Annual Report on~~Form 10-Q, our 2020 Form 10-K, particularly under the section “Item 1A. Risk Factors,” and our other filings with the SEC, include additional information on the factors that we believe could cause actual results to differ materially from any forward-looking statement.

Although we believe that we have been prudent in our plans and assumptions, no assurance can be given that any goal or plan set forth in forward-looking statements can be achieved and readers are cautioned not to place undue reliance on such statements, which speak only as of the date made. WeAdditional risks that we may currently deem immaterial or that are not presently known to us could also cause the forward-looking events discussed in this Quarterly Report on Form 10-Q not to occur. Except as otherwise required by applicable law, we undertake no obligation to ~~release~~ publicly update or revise any ~~revisions to~~ forward-looking ~~statements~~statement, whether as a result of new information, future events, changed circumstances or ~~otherwise.~~otherwise after the date of this Quarterly Report on Form 10-Q.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

For a discussion of our market risk, refer to “Item 7A. Quantitative and Qualitative Disclosures ~~About~~about Market Risk” in our ~~2016~~ ~~Annual Report on~~2020 Form 10-K.

Item 4. CONTROLS AND PROCEDURES

Management carried out an evaluation, under the supervision and with the participation of ~~the Chief Executive Officer~~its chief executive officer and ~~Chief Financial Officer, evaluated~~chief financial officer, of the effectiveness of ~~our~~the design and operation of its disclosure controls and ~~procedures. Based on their evaluation,~~procedures, as defined in Exchange Act Rules 13a-15(e) and 15d-15(e), as of the end of the period covered by this Quarterly Report on Form ~~10-Q, the Chief Executive Officer~~10-Q. Based on this evaluation, our principal executive officer and ~~Chief Financial Officer have~~principal financial officer concluded that as of September 30, 2021, such disclosure controls and procedures ~~(as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934)~~ are effective.

There were no changes in the Company’s internal control over financial reporting during the quarter ended September 30, ~~2017~~2021 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II—OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS

Information pertaining to legal proceedings can be found in “Item 1. Financial Statements—Note 17.17. Legal Proceedings and Contingencies,” to the interim consolidated financial statements, and is incorporated by reference herein.

Item 1A. RISK FACTORS

There have been no material changes from the risk factors disclosed in the Company’s ~~2016~~ ~~Annual Report on~~2020 Form 10-K.

Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following table summarizes the surrenders of our equity securities during the three months ended September 30, ~~2017:~~2021:


Period	Total Number of Shares Purchased(a)	Average Price Paid per Share(a)		Total Number of Shares Purchased as Part of Publicly Announced Programs(b)	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Programs(b)
Dollars in Millions, Except Per Share Data








July 1 to 31, 2021	6,187,408	$	67.32	6,047,717	$	2,999
August 1 to 31, 2021	1,188,560	68.53		1,158,062	2,919
September 1 to 30, 2021	53,090	65.67		—	2,919
Three months ended September 30, 2021	7,429,058			7,205,779

(a)Includes shares repurchased as part of publicly announced programs and shares of common stock surrendered to the Company to satisfy tax-withholding obligations in connection with the vesting of awards under our long-term incentive program.

(b)In May 2010, the Board of Directors authorized the repurchase of up to $3.0 billion of our common stock and in June 2012 increased its authorization for the repurchase of our common stock by an additional $3.0 billion. The Board of Directors approved a new share repurchase program authorizing the repurchase of an additional $3.0 billion of our common stock in October 2016 and further increased its authorization for the repurchase of our common stock by approximately $7.0 billion in November 2019 and $5.0 billion in February 2020. In January 2021, the Board of Directors approved an increase of $2.0 billion to the share repurchase authorization for our common stock. The remaining share repurchase capacity under the program was approximately $2.9 billion as of September 30, 2021. Refer to “Item 1. Financial Statements-Note 15. Equity” for information on the share repurchase program.

Period
Total Number of
Shares Purchased^(a)

Average
Price Paid
per Share^(a)

Total Number of
Shares Purchased as
Part of Publicly
Announced
Programs^(b)

Approximate Dollar
Value of Shares that
May Yet Be
Purchased Under the
Programs^(b)
Dollars in Millions, Except Per Share Data
July 1 to 31, 2017 63,794
$ 56.63
52,851
$ 2,134
August 1 to 31, 2017 2,994,306
$ 57.68
2,985,959
$ 1,962
September 1 to 30, 2017 812,937
$ 62.53
803,249
$ 1,912
Three months ended September 30, 2017 3,871,037
3,842,059


~~(a)~~	Includes shares repurchased as part of publicly announced programs and shares of common stock surrendered to the Company to satisfy tax withholding obligations in connection with the vesting of awards under our long-term incentive program.

~~(b)~~

In May 2010, the Board of Directors authorized the repurchase of up to $3.0 billion of common stock and in June 2012 increased its authorization for the repurchase of common stock by an additional $3.0 billion. In October 2016, the Board of Directors approved a new share repurchase program authorizing the repurchase of an additional $3.0 billion of common stock. The stock repurchase program does not have an expiration date. Refer to “Item 1. Financial Statements—Note 15. Equity" for information on the accelerated share repurchase agreements.

Item 6. EXHIBITS

Exhibits (listed by number corresponding to the Exhibit Table of Item 601 in Regulation S-K).



Exhibit No.		Description
~~12.~~ 31a.		~~Computation of Earnings to Fixed Charges.~~
~~31a.~~	Section 302 Certification Letter.
31b.		Section 302 Certification Letter.
32a.		Section 906 Certification Letter.
32b.		Section 906 Certification Letter.
~~101.~~101.INS		~~The following financial statements from~~XBRL Instance Document - the ~~Bristol-Myers Squibb Company Quarterly Report on Form 10-Q for~~instance document does not appear in the ~~quarter ended September 30, 2017, formatted~~Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH		XBRL Taxonomy Extension Schema Document.
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB		XBRL Taxonomy Extension Label Linkbase Document.
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document.
104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in ~~Extensible Business Reporting Language (XBRL):~~ (i) consolidated statements of earnings, (ii) consolidated statements of comprehensive income, (iii) consolidated balance sheets, (iv) consolidated statements of cash flows, and (v) the notes to the consolidated financial statements. Exhibit 101).

* Indicates, in this Quarterly Report on Form 10-Q, brand names of products, which are registered trademarks not solely owned by the Company or its subsidiaries. Abilify is a trademark of Otsuka Pharmaceutical Co., Ltd.; Atripla is a trademark of ~~Bristol-Myers Squibb and~~ Gilead Sciences, ~~LLC;~~ LLC.; Avapro/Avalide (known in the EU as Aprovel/Karvea) and Plavix are trademarks of Sanofi; Byettais a trademark of Amylin Pharmaceuticals, LLC; Cabometyx is a trademark of Exelixis, Inc.; ~~ENHANZE is a trademark of Halozyme, Inc.;~~ Erbitux is a trademark of ImClone LLC; Onglyza is a trademark of AstraZeneca AB; Gleevec is a trademark of Novartis AG; Keytruda is a trademark of Merck Sharp & Dohme ~~Corp.;~~ ~~Plavix~~Corp; Otezla is a trademark of ~~Sanofi;~~ ~~Prostvac~~ Amgen Inc.; Tecentriqis a trademark of ~~BN ImmunoTherapeutics~~Genentech, Inc.; ~~Rubraca~~ and Yescartais a trademark of ~~Clovis Oncology,~~Kite Pharma, Inc. ~~and~~ ~~Tybost~~ ~~is a trademark of Gilead Sciences Ireland UC.~~ Brand names of products that are in all italicized letters, without an asterisk, are registered trademarks of BMS and/or one of its subsidiaries.

SUMMARY OF ABBREVIATED TERMS

Bristol-Myers Squibb Company and its consolidated subsidiaries may be referred to as ~~Bristol-Myers~~Bristol Myers Squibb, BMS, the Company, we, our or us in this Quarterly Report on Form ~~10-Q.~~10-Q, unless the context otherwise indicates. Throughout this Quarterly Report on Form 10-Q we have used terms which are defined below:



~~2016~~2020 Form 10-K		Annual Report on Form 10-K for the fiscal year ended December 31, ~~2016~~2020		LIBOR	London Interbank Offered Rate
~~AstraZeneca~~Agenus		~~AstraZeneca PLC~~Agenus Inc.		Lilly	Eli Lilly and Company
~~Biogen~~aGvHD		~~Biogen Inc.~~acute graft versus host disease		LOE	loss of exclusivity
~~Cardioxyl~~Amgen		~~Cardioxyl~~Amgen Inc.		MAA	marketing authorization application
AML		acute myeloid leukemia		MDL	multi-district litigation
Amylin		Amylin Pharmaceuticals, Inc.		MDS	myelodysplastic syndromes
~~CML~~aNDA		~~chronic myeloid leukemia~~abbreviated new drug applications		MPM	malignant pleural mesothelioma
~~CytomX~~AstraZeneca		~~CytomX Therapeutics,~~AstraZeneca PLC		MyoKardia	MyoKardia, Inc.
~~dMMR~~BCMA		~~DNA mismatch repair deficient~~B-cell maturation antigen		NDA	new drug application
~~EPO~~BLA		~~European Patent Office~~
~~EPS~~biologics license application	~~earnings per share~~
EUNKT	~~European Union~~
~~FASB~~	~~Financial Accounting Standards Board~~
~~FDA~~	~~U.S. Food and Drug Administration~~
~~Flexus~~	~~Flexus Biosciences, Inc.~~
~~F-Star Alpha~~	~~F-Star Alpha Ltd.~~
~~GAAP~~	~~U.S. generally accepted accounting principles~~
~~Gilead~~	~~Gilead Sciences, Inc.~~
~~GTN~~	~~Gross-to-Net~~
~~Halozyme~~	~~Halozyme Therapeutics, Inc.~~
~~HCC~~	~~Hepatocellular carcinoma~~
~~HIV~~	~~human immunodeficiency virus~~
~~HNC~~	~~head and neck cancer~~
~~IFM~~	~~IFM Therapeutics, Inc.~~
~~iPierian~~	~~iPierian, Inc.~~
IO	~~immuno-oncology~~
~~IPRD~~	~~In-process research and development~~
~~JIA~~	~~Juvenile Idiopathic Arthritis~~
~~mCRC~~	~~metastatic colorectal cancer~~
~~Merck~~	~~Merck & Co., Inc.~~
~~MSI-H~~	~~microsatellite instability-high~~
~~NDA~~	~~New Drug Application~~
~~NKT~~	natural killer T cells
~~NSCLC~~bluebird		bluebird bio, Inc.		NSCLC	non-small cell lung cancer
~~NVAF~~CAR T		chimeric antigen receptor T-cell		NVAF	non-valvular atrial fibrillation
~~Ono~~Celgene		Celgene Corporation		Ono	Ono Pharmaceutical Co., Ltd.
~~OTC~~CERCLA		~~Over-the-counter~~U.S. Comprehensive Environmental Response, Compensation and Liability Act		OTC	over-the-counter
~~Padlock~~CHMP		~~Padlock Therapeutics, Inc.~~Committee for Medicinal Products for Human Use		Otsuka	Otsuka Pharmaceutical Co., Ltd.
~~PD-1~~CML		chronic myeloid leukemia		PD-1	programmed cell death ~~receptor-1~~protein 1
~~PsA~~Cormorant		~~active psoriatic arthritis~~Cormorant Pharmaceuticals		PD-L1	programmed death-ligand 1
CRC		Colorectal carcinoma		PDUFA	The Prescription Drug User Fee Act
CVR		contingent value rights		Pfizer	Pfizer, Inc.
EC		European Commission		Prothena	Prothena Corporation plc
Eisai		Eisai Co., Ltd.		PsA	psoriatic arthritis
EMA		European Medicines Agency		Quarterly Report on Form 10-Q	Quarterly Report on Form 10-Q for the quarterly period ended ~~June~~September 30, ~~2017~~2021
RAEPS		~~rheumatoid arthritis~~earnings per share		R&D	research and development
~~RCC~~ESCC		esophageal squamous cell carcinoma		RA	rheumatoid arthritis
EU		European Union		RBC	red blood cell
FASB		Financial Accounting Standards Board		RCC	renal cell carcinoma
~~R&D~~FDA		~~Research~~U.S. Food and ~~Development~~Drug Administration		REMS	risk evaluation and mitigation strategy
~~sBLA~~GAAP		U.S. generally accepted accounting principles		RRMM	relapsed and refractory multiple myeloma
GILTI		Global intangible low-taxed income		Sanofi	Sanofi S.A.
GTN		gross-to-net		sBLA	supplemental Biologics License Application
~~SCCHN~~HCC		~~squamous cell~~hepatocellular carcinoma ~~of the head and neck~~
~~SCLC~~	SCLC		small cell lung cancer
~~SEC~~HCM		hypertrophic cardiomyopathy		SEC	Securities and Exchange Commission
~~SK Biotek~~HIV		~~SK Biotek Co., Ltd.~~human immunodeficiency viruses		TNBC	triple-negative breast cancer
UKIO		~~United Kingdom~~immuno-oncology		UC	ulcerative colitis
~~U.S.~~IPRD		in-process research and development		U.S.	United States
IRS		Internal Revenue Service		UK	United Kingdom
JIA		juvenile idiopathic arthritis		VAT	value added tax
Juno		Juno Therapeutics, Inc.		VTE	venous thromboembolic

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

BRISTOL-MYERS SQUIBB COMPANY

(REGISTRANT)

Date:

October ~~26, 2017~~27, 2021

By:

~~By:~~

/s/ Giovanni Caforio, M.D.

Giovanni Caforio, M.D.

Chairman of the Board and Chief Executive Officer

Date:

October ~~26, 2017~~27, 2021

By:

~~By:~~

/s/ ~~Charles Bancroft~~David V. Elkins

~~Charles Bancroft~~David V. Elkins

Chief Financial Officer



	September 30, 2017					December 31, 2016
Dollars in Millions	Level 1		Level 2			Level 1		Level 2
Cash and cash equivalents - Money market and other securities	$	—	$	3,915		$	—	$	3,532
Marketable securities:
Certificates of deposit	—		176			—		27
Commercial paper	—		977			—		750
Corporate debt securities	—		3,725			—		3,947
Equity funds	—		119			—		101
Fixed income funds	—		7			—		7
Derivative assets	—		31			—		75
Equity investments	90		—			24		—
Derivative liabilities	—		(63		)	—		(30		)



	September 30, 2017									December 31, 2016
	Asset^(a)				Liability^(b)					Asset^(a)				Liability^(b)
Dollars in Millions	Notional		Fair Value		Notional		Fair Value			Notional		Fair Value		Notional		Fair Value
Derivatives designated as hedging instruments:
Interest rate swap contracts	$	—	$	—	$	755	$	(3	)	$	750	$	1	$	755	$	(3	)
Forward starting interest rate swap contracts	—		—		—		—			500		8		250		(11		)
Foreign currency forward contracts	1,351		25		548		(28		)	967		66		198		(9		)

Derivatives not designated as hedging instruments:
Foreign currency forward contracts	322		6		1,183		(32		)	106		—		360		(7		)



Dollars in Millions	2017
Principal Value:
1.600% Notes due 2019	$	750
3.250% Notes due 2027	750
Total	$	1,500

Proceeds net of discount and deferred loan issuance costs	$	1,488



Dollars in Millions	2017
Principal amount	$	337
Carrying value	366
Debt redemption price	474
Loss on debt redemption^(a)	109



	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		Capital in Excess of Par Value of Stock		Accumulated Other Comprehensive Loss			Retained Earnings			Shares		Cost			Noncontrolling Interest
Balance at January 1, 2016	2,208	$	221	$	1,459	$	(2,468	)	$	31,613		539		$	(16,559	)	$	158
Net earnings	—	—		—		—			3,563			—		—			46
Other comprehensive loss	—	—		—		(267		)	—			—		—			—
Cash dividends declared	—	—		—		—			(1,904		)	—		—			—
Stock repurchase program	—	—		—		—			—			4		(231		)	—
Stock compensation	—	—		191		—			—			(6	)	(5		)	—
Distributions	—	—		—		—			—			—		—			(36		)
Balance at September 30, 2016	2,208	$	221	$	1,650	$	(2,735	)	$	33,272		537		$	(16,795	)	$	168

Balance at December 31, 2016	2,208	$	221	$	1,725	$	(2,503	)	$	33,513		536		$	(16,779	)	$	170
Accounting change - cumulative effect^(a)	—	—		—		—			(787		)	—		—			—
Adjusted balance at January 1, 2017	2,208	$	221	$	1,725	$	(2,503	)	$	32,726		536		$	(16,779	)	$	170
Net earnings	—	—		—		—			3,335			—		—			28
Other comprehensive income	—	—		—		82			—			—		—			—
Cash dividends declared	—	—		—		—			(1,920		)	—		—			—
Stock repurchase program	—	—		—		—			—			40		(2,226		)	—
Stock compensation	—	—		120		—			—			(5	)	2			—
Variable interest entity	—	—		—		—			—			—		—			(59		)
Distributions	—	—		—		—			—			—		—			(8		)
Balance at September 30, 2017	2,208	$	221	$	1,845	$	(2,421	)	$	34,141		571		$	(19,003	)	$	131



Period	Total Number of Shares Purchased^(a)	Average Price Paid per Share^(a)		Total Number of Shares Purchased as Part of Publicly Announced Programs^(b)	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Programs^(b)
Dollars in Millions, Except Per Share Data
July 1 to 31, 2017	63,794	$	56.63	52,851	$	2,134
August 1 to 31, 2017	2,994,306	$	57.68	2,985,959	$	1,962
September 1 to 30, 2017	812,937	$	62.53	803,249	$	1,912
Three months ended September 30, 2017	3,871,037			3,842,059