UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

___________________________

FORM 10-Q

___________________________

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

SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September 30, 2020~~March 31, 2021

☐ 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

___________________________

BRISTOL-MYERS SQUIBB COMPANY

(Exact name of registrant as specified in its charter)

___________________________


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

430 E. 29th Street, 14FL, New York, NY 10016

(Address of principal executive offices) ~~(zip code)~~(Zip Code)

(212) 546-4000

(Registrant’s telephone number, including area 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~~
~~Bristol-Myers Squibb Contingent Value Rights~~	~~BMY RT~~	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 ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes ☒ 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 “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

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 ☒

APPLICABLE ONLY TO CORPORATE ISSUERS:

At ~~September 30, 2020,~~March 31, 2021, there were ~~2,259,751,518~~2,232,843,755 shares outstanding of the Registrant’s $0.10 par value common stock.

BRISTOL-MYERS SQUIBB COMPANY

INDEX TO FORM 10-Q

~~September 30, 2020~~March 31, 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			3328

Item 3.
Quantitative and Qualitative Disclosure About Market Risk			5447

Item 4.
Controls and Procedures			5447

PART II—OTHER INFORMATION

Item 1.
Legal Proceedings			5548

Item 1A.
Risk Factors			5548

Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds			5748

Item 6.
Exhibits			5849

Summary of Abbreviated Terms			5950
Signatures			6051

* Indicates brand names of products which are trademarks not owned by BMS. Specific trademark ownership information is included in the Exhibit 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,					Three Months Ended March 31,
EARNINGS	EARNINGS	2020		2019		2020		2019		EARNINGS	2021		2020
Net product sales	Net product sales	$	10,197	$	5,768	$	30,555	$	17,512	Net product sales	$	10,798	$	10,541
Alliance and other revenues	Alliance and other revenues	343		239		895		688		Alliance and other revenues	275		240
Total Revenues	Total Revenues	10,540		6,007		31,450		18,200		Total Revenues	11,073		10,781

Cost of products sold(a)	Cost of products sold(a)	2,502		1,790		8,863		5,586		Cost of products sold(a)	2,841		3,662
Marketing, selling and administrative	Marketing, selling and administrative	1,706		1,055		4,940		3,137		Marketing, selling and administrative	1,666		1,606
Research and development	Research and development	2,499		1,378		7,393		4,051		Research and development	2,225		2,372
Amortization of acquired intangible assets	Amortization of acquired intangible assets	2,491		25		7,162		73		Amortization of acquired intangible assets	2,513		2,282
Other (income)/expense, net	Other (income)/expense, net	(915)		410		(488)		249		Other (income)/expense, net	(702)		1,163
Total Expenses	Total Expenses	8,283		4,658		27,870		13,096		Total Expenses	8,543		11,085

Earnings Before Income Taxes		2,257		1,349		3,580		5,104
Provision/(Benefit) for Income Taxes		379		(17)		2,548		584
Net Earnings		1,878		1,366		1,032		4,520
Earnings/(Loss) Before Income Taxes										Earnings/(Loss) Before Income Taxes	2,530		(304)
Provision for Income Taxes										Provision for Income Taxes	501		462
Net Earnings/(Loss)										Net Earnings/(Loss)	2,029		(766)
Noncontrolling Interest	Noncontrolling Interest	6		13		20		25		Noncontrolling Interest	8		9
Net Earnings Attributable to BMS		$	1,872	$	1,353	$	1,012	$	4,495
Net Earnings/(Loss) Attributable to BMS										Net Earnings/(Loss) Attributable to BMS	$	2,021	$	(775)

Earnings per Common Share
Earnings/(Loss) per Common Share										Earnings/(Loss) per Common Share
Basic	Basic	$	0.83	$	0.83	$	0.45	$	2.75	Basic	$	0.90	$	(0.34)
Diluted	Diluted	0.82		0.83		0.44		2.75		Diluted	0.89		(0.34)

(a) Excludes amortization of acquired intangible assets.

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

Dollars in Millions

(UNAUDITED)

Three Months Ended September 30, Nine Months Ended September 30,
COMPREHENSIVE INCOME 2020 2019 2020 2019
Net Earnings $ 1,878 $ 1,366 $ 1,032 $ 4,520
Other Comprehensive (Loss)/Income, net of taxes and reclassifications to earnings:
Derivatives qualifying as cash flow hedges (132) 38 (121) 24
Pension and postretirement benefits (4) 1,116 5 1,204
Available-for-sale debt securities (2) 4 7 43
Foreign currency translation (5) 0 (70) 28
Other Comprehensive (Loss)/Income (143) 1,158 (179) 1,299
Comprehensive Income 1,735 2,524 853 5,819
Comprehensive Income Attributable to Noncontrolling Interest 6 13 20 25
Comprehensive Income Attributable to BMS $ 1,729 $ 2,511 $ 833 $ 5,794


	Three Months Ended March 31,
COMPREHENSIVE INCOME/(LOSS)	2021		2020
Net Earnings/(Loss)	$	2,029	$	(766)
Other Comprehensive Income/(Loss), net of taxes and reclassifications to earnings:
Derivatives qualifying as cash flow hedges	280		70
Pension and postretirement benefits	23		16
Available-for-sale debt securities	(2)		1
Foreign currency translation	(6)		(116)
Total Other Comprehensive Income/(Loss)	295		(29)

Comprehensive Income/(Loss)	2,324		(795)
Comprehensive Income Attributable to Noncontrolling Interest	8		9
Comprehensive Income/(Loss) Attributable to BMS	$	2,316	$	(804)

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

BRISTOL-MYERS SQUIBB COMPANY

CONSOLIDATED BALANCE SHEETS

Dollars in Millions

(UNAUDITED)


ASSETS	ASSETS	September 30, 2020		December 31, 2019		ASSETS	March 31, 2021		December 31, 2020
Current Assets:	Current Assets:					Current Assets:
Cash and cash equivalents	Cash and cash equivalents	$	19,435	$	12,346	Cash and cash equivalents	$	10,982	$	14,546
Marketable debt securities	Marketable debt securities	1,720		3,047		Marketable debt securities	1,948		1,285
Receivables	Receivables	8,062		7,685		Receivables	8,660		8,501
Inventories	Inventories	1,949		4,293		Inventories	1,953		2,074
Other current assets	Other current assets	3,111		1,983		Other current assets	3,568		3,786
Total Current Assets	Total Current Assets	34,277		29,354		Total Current Assets	27,111		30,192
Property, plant and equipment	Property, plant and equipment	5,740		6,252		Property, plant and equipment	5,763		5,886
Goodwill	Goodwill	20,517		22,488		Goodwill	20,524		20,547
Other intangible assets	Other intangible assets	56,698		63,969		Other intangible assets	50,819		53,243
Deferred income taxes	Deferred income taxes	913		510		Deferred income taxes	793		1,161
Marketable debt securities	Marketable debt securities	495		767		Marketable debt securities	288		433
Other non-current assets	Other non-current assets	6,896		6,604		Other non-current assets	7,137		7,019
Total Assets	Total Assets	$	125,536	$	129,944	Total Assets	$	112,435	$	118,481

LIABILITIES	LIABILITIES					LIABILITIES
Current Liabilities:	Current Liabilities:					Current Liabilities:
Short-term debt obligations	Short-term debt obligations	$	3,585	$	3,346	Short-term debt obligations	$	1,777	$	2,340
Accounts payable	Accounts payable	2,441		2,445		Accounts payable	2,972		2,713
Other current liabilities	Other current liabilities	14,438		12,513		Other current liabilities	12,581		14,027
Total Current Liabilities	Total Current Liabilities	20,464		18,304		Total Current Liabilities	17,330		19,080
Deferred income taxes	Deferred income taxes	5,913		6,454		Deferred income taxes	5,235		5,407
Long-term debt	Long-term debt	41,364		43,387		Long-term debt	44,505		48,336
Other non-current liabilities	Other non-current liabilities	7,565		10,101		Other non-current liabilities	7,692		7,776
Total Liabilities	Total Liabilities	75,306		78,246		Total Liabilities	74,762		80,599

Commitments and contingencies	Commitments and contingencies					Commitments and contingencies

EQUITY	EQUITY					EQUITY
Bristol-Myers Squibb Company Shareholders’ Equity:	Bristol-Myers Squibb Company Shareholders’ Equity:					Bristol-Myers Squibb Company Shareholders’ Equity:
Preferred stock	Preferred stock	0		0		Preferred stock	0		0
Common stock	Common stock	292		292		Common stock	292		292
Capital in excess of par value of stock	Capital in excess of par value of stock	44,435		43,709		Capital in excess of par value of stock	43,852		44,325
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(1,699)		(1,520)		Accumulated other comprehensive loss	(1,544)		(1,839)
Retained earnings	Retained earnings	32,414		34,474		Retained earnings	22,204		21,281
Less cost of treasury stock	Less cost of treasury stock	(25,284)		(25,357)		Less cost of treasury stock	(27,199)		(26,237)
Total Bristol-Myers Squibb Company Shareholders’ Equity	Total Bristol-Myers Squibb Company Shareholders’ Equity	50,158		51,598		Total Bristol-Myers Squibb Company Shareholders’ Equity	37,605		37,822
Noncontrolling interest	Noncontrolling interest	72		100		Noncontrolling interest	68		60
Total Equity	Total Equity	50,230		51,698		Total Equity	37,673		37,882
Total Liabilities and Equity	Total Liabilities and Equity	$	125,536	$	129,944	Total Liabilities and Equity	$	112,435	$	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,					Three Months Ended March 31,
		2020		2019			2021		2020
Cash Flows From Operating Activities:	Cash Flows From Operating Activities:					Cash Flows From Operating Activities:
Net earnings		$	1,032	$	4,520
Adjustments to reconcile net earnings to net cash provided by operating activities:
Net earnings/(loss)						Net earnings/(loss)	$	2,029	$	(766)
Adjustments to reconcile net earnings/(loss) to net cash provided by operating activities:						Adjustments to reconcile net earnings/(loss) to net cash provided by operating activities:
Depreciation and amortization, net	Depreciation and amortization, net	7,690		510		Depreciation and amortization, net	2,668		2,477
Deferred income taxes	Deferred income taxes	1,419		(536)		Deferred income taxes	68		(53)
Stock-based compensation	Stock-based compensation	608		157		Stock-based compensation	151		210
Impairment charges	Impairment charges	131		183		Impairment charges	339		53
Pension settlements and amortization	Pension settlements and amortization	34		1,683		Pension settlements and amortization	11		11
Divestiture gains and royalties	Divestiture gains and royalties	(486)		(1,676)		Divestiture gains and royalties	(135)		(173)
Asset acquisition charges	Asset acquisition charges	278		25		Asset acquisition charges	5		46
Equity investment (gains)/losses	Equity investment (gains)/losses	(724)		15		Equity investment (gains)/losses	(601)		338
Contingent consideration fair value adjustments	Contingent consideration fair value adjustments	(597)		0		Contingent consideration fair value adjustments	(510)		556
Other adjustments	Other adjustments	(140)		(21)		Other adjustments	233		(41)
Changes in operating assets and liabilities:	Changes in operating assets and liabilities:					Changes in operating assets and liabilities:
Receivables	Receivables	(356)		434		Receivables	67		(743)
Inventories	Inventories	2,571		(7)		Inventories	106		1,448
Accounts payable	Accounts payable	56		48		Accounts payable	303		703
Income taxes payable	Income taxes payable	(2,104)		(4)		Income taxes payable	227		229
Other	Other	970		698		Other	(1,137)		(358)
Net Cash Provided by Operating Activities	Net Cash Provided by Operating Activities	10,382		6,029		Net Cash Provided by Operating Activities	3,824		3,937
Cash Flows From Investing Activities:	Cash Flows From Investing Activities:					Cash Flows From Investing Activities:
Sale and maturities of marketable debt securities	Sale and maturities of marketable debt securities	4,757		2,325		Sale and maturities of marketable debt securities	782		1,394
Purchase of marketable debt securities	Purchase of marketable debt securities	(3,148)		(1,642)		Purchase of marketable debt securities	(1,302)		(735)
Capital expenditures	Capital expenditures	(470)		(585)		Capital expenditures	(173)		(186)
Divestiture and other proceeds	Divestiture and other proceeds	550		2,226		Divestiture and other proceeds	585		205
Acquisition and other payments, net of cash acquired	Acquisition and other payments, net of cash acquired	(421)		(58)		Acquisition and other payments, net of cash acquired	(35)		(68)
Net Cash Provided by Investing Activities		1,268		2,266
Net Cash (Used in)/Provided by Investing Activities						Net Cash (Used in)/Provided by Investing Activities	(143)		610
Cash Flows From Financing Activities:	Cash Flows From Financing Activities:					Cash Flows From Financing Activities:
Short-term debt obligations, net	Short-term debt obligations, net	(264)		115		Short-term debt obligations, net	(62)		26
Issuance of long-term debt		0		18,790

Repayment of long-term debt	Repayment of long-term debt	(1,500)		(1,256)		Repayment of long-term debt	(4,522)		0
Repurchase of common stock	Repurchase of common stock	(81)		(300)		Repurchase of common stock	(1,775)		(81)
Dividends	Dividends	(3,054)		(2,011)		Dividends	(1,108)		(1,017)
Other	Other	265		(40)		Other	172		18
Net Cash (Used in)/Provided by Financing Activities		(4,634)		15,298
Net Cash Used in Financing Activities						Net Cash Used in Financing Activities	(7,295)		(1,054)
Effect of Exchange Rates on Cash, Cash Equivalents and Restricted Cash	Effect of Exchange Rates on Cash, Cash Equivalents and Restricted Cash	24		(15)		Effect of Exchange Rates on Cash, Cash Equivalents and Restricted Cash	(38)		(67)
Increase in Cash, Cash Equivalents and Restricted Cash		7,040		23,578
(Decrease)/Increase in Cash, Cash Equivalents and Restricted Cash						(Decrease)/Increase in Cash, Cash Equivalents and Restricted Cash	(3,652)		3,426
Cash, Cash Equivalents and Restricted Cash at Beginning of Period	Cash, Cash Equivalents and Restricted Cash at Beginning of Period	12,820		6,911		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	$	19,860	$	30,489	Cash, Cash Equivalents and Restricted Cash at End of Period	$	11,321	$	16,246

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 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, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, the results of operations ~~for the three and nine months ended September 30, 2020 and 2019,~~ and cash flows for the ~~nine~~three months ended ~~September 30, 2020~~March 31, 2021 and ~~2019.~~2020. All intercompany balances and transactions have been eliminated. ~~BMS’s consolidated financial statements include the assets, liabilities, operating results and cash flows of Celgene from the date of acquisition on November 20, 2019.~~ These financial statements and the related notes should be read in conjunction with the audited consolidated financial statements for the year ended December 31, ~~2019~~2020 included in the ~~2019~~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.

Business Segment Information

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

Use of Estimates and Judgments

Revenues, expenses, assets and liabilities can vary during each quarter of the year. Accordingly, the results and trends in these unaudited consolidated financial statements may not be indicative of full year operating results. The preparation of financial statements requires the use of management estimates, judgments and assumptions. The most significant assumptions are estimates used in determining accounting for business combinations; impairments of intangible assets; sales rebate and return accruals; legal contingencies; and income taxes. Actual results may differ from estimates.

Reclassifications

Certain reclassifications were made to conform the prior period ~~interim~~ consolidated financial statements to the current period presentation. Cash payments resulting for licensing arrangements, including upfront 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 $43 million in the three months ended March 31, 2020. These reclassifications did not have an impact on net assets or net earnings.

Recently Adopted Accounting Standards

~~Financial Instruments - Measurement of Credit Losses~~

In ~~June 2016,~~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 ~~measurement of credit losses on financial instruments. Entities are required to use~~step-up tax basis for goodwill in a ~~forward-looking estimated loss model. Available-for-sale debt security credit losses will be recognized as allowances rather than a reduction~~business combination; and reflecting enacted changes in ~~amortized cost.~~tax laws or rates in the annual effective tax rate. BMS adopted the ~~amended~~new guidance ~~on a modified retrospective approach on~~effective January 1, ~~2020.~~2021. The amended guidance did not have a material impact on BMS’s results of operations.

Note 2. REVENUE

The following table summarizes the disaggregation of revenue by nature:


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
Dollars in Millions	Dollars in Millions	2020		2019		2020		2019		Dollars in Millions	2021		2020
Net product sales	Net product sales	$	10,197	$	5,768	$	30,555	$	17,512	Net product sales	$	10,798	$	10,541
Alliance revenues	Alliance revenues	184		143		452		418		Alliance revenues	142		105
Other revenues	Other revenues	159		96		443		270		Other revenues	133		135
Total Revenues	Total Revenues	$	10,540	$	6,007	$	31,450	$	18,200	Total Revenues	$	11,073	$	10,781

The following table summarizes GTN adjustments:


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
Dollars in Millions	Dollars in Millions	2020		2019		2020		2019		Dollars in Millions	2021		2020
Gross product sales	Gross product sales	$	15,211	$	8,884	$	43,685	$	25,697	Gross product sales	$	15,559	$	14,686
GTN adjustments(a)	GTN adjustments(a)									GTN adjustments(a)
Charge-backs and cash discounts	Charge-backs and cash discounts	(1,440)		(927)		(4,072)		(2,591)		Charge-backs and cash discounts	(1,586)		(1,340)
Medicaid and Medicare rebates	Medicaid and Medicare rebates	(2,146)		(1,362)		(5,126)		(3,252)		Medicaid and Medicare rebates	(1,718)		(1,498)
Other rebates, returns, discounts and adjustments	Other rebates, returns, discounts and adjustments	(1,428)		(827)		(3,932)		(2,342)		Other rebates, returns, discounts and adjustments	(1,457)		(1,307)
Total GTN adjustments	Total GTN adjustments	(5,014)		(3,116)		(13,130)		(8,185)		Total GTN adjustments	(4,761)		(4,145)
Net product sales	Net product sales	$	10,197	$	5,768	$	30,555	$	17,512	Net product sales	$	10,798	$	10,541

(a) Includes adjustments for provisions for product sales made in prior periods resulting from changes in estimates of ~~$(25)~~$217 million and ~~$91~~$72 million for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and 2020, ~~and $12 million and $139 million for the three and nine months ended September 30, 2019,~~ respectively.

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


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
Dollars in Millions	Dollars in Millions	2020		2019		2020		2019		Dollars in Millions	2021		2020
Prioritized Brands	Prioritized Brands									Prioritized Brands
Revlimid	Revlimid	$	3,027	$	0	$	8,826	$	0	Revlimid	$	2,944	$	2,915
Eliquis	Eliquis	2,095		1,928		6,899		5,895		Eliquis	2,886		2,641
Opdivo	Opdivo	1,780		1,817		5,199		5,441		Opdivo	1,720		1,766
Orencia	Orencia	826		767		2,290		2,185		Orencia	758		714
Pomalyst/Imnovid	Pomalyst/Imnovid	777		0		2,235		0		Pomalyst/Imnovid	773		713
Sprycel	Sprycel	544		558		1,576		1,561		Sprycel	470		521
Yervoy	Yervoy	446		353		1,211		1,104		Yervoy	456		396
Abraxane	Abraxane	342		0		950		0		Abraxane	314		300
Empliciti	Empliciti	96		89		290		263		Empliciti	85		97
Reblozyl	Reblozyl	96		0		159		0		Reblozyl	112		8
Inrebic	Inrebic	13		0		40		0		Inrebic	16		12
Onureg										Onureg	15		0
Zeposia	Zeposia	2		0		3		0		Zeposia	18		0
Onureg		3		0		3		0

Established Brands	Established Brands									Established Brands
Vidaza										Vidaza	54		158
Baraclude	Baraclude	100		145		343		433		Baraclude	113		122
Vidaza		106		0		390		0
Other Brands(a)		287		350		1,036		1,318
Other Brands										Other Brands	339		418
Total Revenues	Total Revenues	$	10,540	$	6,007	$	31,450	$	18,200	Total Revenues	$	11,073	$	10,781

United States	United States	$	6,542	$	3,472	$	19,795	$	10,588	United States	$	7,010	$	6,766
Europe	Europe	2,453		1,445		7,156		4,416		Europe	2,553		2,567
Rest of the World	Rest of the World	1,361		976		4,030		2,838		Rest of the World	1,346		1,335
Other(b)		184		114		469		358
Other(a)										Other(a)	164		113
Total Revenues	Total Revenues	$	10,540	$	6,007	$	31,450	$	18,200	Total Revenues	$	11,073	$	10,781

(a) ~~Includes BMS and Celgene products in 2020.~~

~~(b)~~ 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 ~~$32~~$284 million and ~~$260~~$130 million for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and 2020, ~~and $78 million and $341 million for the three and nine months ended September 30, 2019,~~ respectively, consisting primarily of ~~royalties for out-licensing arrangements and~~ revised estimates for GTN adjustments related to prior period ~~sales.~~sales and royalties for out-licensing arrangements. Contract assets were not material at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019.~~2020.

Note 3. ALLIANCES

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

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


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
Dollars in Millions	Dollars in Millions	2020		2019		2020		2019		Dollars in Millions	2021		2020
Revenues from alliances:	Revenues from alliances:									Revenues from alliances:
Net product sales	Net product sales	$	2,116	$	2,464	$	7,040	$	7,412	Net product sales	$	2,882	$	2,723
Alliance revenues	Alliance revenues	184		143		452		418		Alliance revenues	142		105
Total Revenues	Total Revenues	$	2,300	$	2,607	$	7,492	$	7,830	Total Revenues	$	3,024	$	2,828

Payments to/(from) alliance partners:	Payments to/(from) alliance partners:									Payments to/(from) alliance partners:
Cost of products sold	Cost of products sold	$	1,007	$	1,017	$	3,363	$	3,116	Cost of products sold	$	1,397	$	1,306
Marketing, selling and administrative	Marketing, selling and administrative	(25)		(33)		(103)		(93)		Marketing, selling and administrative	(49)		(40)
Research and development	Research and development	48		11		327		32		Research and development	7		46
Other (income)/expense, net	Other (income)/expense, net	(28)		(15)		(59)		(45)		Other (income)/expense, net	(5)		(15)


Dollars in Millions	Dollars in Millions	September 30, 2020		December 31, 2019		Dollars in Millions	March 31, 2021		December 31, 2020
Selected Alliance Balance Sheet information:	Selected Alliance Balance Sheet information:					Selected Alliance Balance Sheet information:
Receivables – from alliance partners	Receivables – from alliance partners	$	336	$	347	Receivables – from alliance partners	$	315	$	343
Accounts payable – to alliance partners	Accounts payable – to alliance partners	971		1,026		Accounts payable – to alliance partners	1,356		1,093
Deferred income from alliances(a)	Deferred income from alliances(a)	392		431		Deferred income from alliances(a)	367		366

(a) Includes unamortized upfront and milestone payments.

~~The~~Specific information pertaining to significant alliances including their nature ~~purpose,~~and purpose; the significant rights and obligations of the ~~parties and~~parties; specific accounting policy elections ~~for each of the Company’s significant alliances~~ are discussed in the ~~2019~~2020 Form 10-K. ~~Significant developments and updates related to alliances during the nine months ended September 30, 2020 are set forth below.~~

~~Otsuka~~

~~Effective January 1, 2020, Otsuka is no longer co-promoting~~ ~~Sprycel~~ in the U.S. and as a result, this arrangement is no longer considered a collaboration under ASC 808. Revenues earned and fees paid to Otsuka in the Oncology Territory in 2020 are not included in the table above.

~~bluebird~~

BMS and bluebird jointly develop and commercialize novel disease-altering gene therapy product candidates targeting BCMA. The collaboration arrangement began in 2013 and included (i) a right for BMS to license any anti-BCMA products resulting from the collaboration, (ii) a right for bluebird to participate in the development and commercialization of any licensed products resulting from the collaboration through a 50/50 co-development and profit share in the U.S. in exchange for a reduction of milestone payments, and (iii) sales-based milestones and royalties payable to bluebird upon the commercialization of any licensed products resulting from the collaboration if bluebird declined to exercise their co-development and profit sharing rights. The options to license idecabtagene vicleucel (ide-cel, bb2121) and bb21217 were exercised in 2016 and 2017, respectively.

BMS and bluebird share equally in all profits and losses relating to developing, commercializing and manufacturing ide-cel within the U.S. BMS is exclusively responsible for the development and commercialization of ide-cel outside the U.S.

BMS is responsible for the worldwide development, including related funding after the substantial completion by bluebird of the ongoing Phase I clinical trial, and commercialization of bb21217. bluebird has an option to co-develop, co-promote and share equally in all profits and losses in the U.S.

In the second quarter of 2020, BMS and bluebird amended their collaboration arrangement where, among other items, BMS is assuming the contract manufacturing agreements relating to ide-cel adherent lentiviral vector. Over time, BMS is assuming responsibility for manufacturing ide-cel suspension lentiviral vector outside of the U.S., with bluebird responsible for manufacturing ide-cel suspension lentiviral vector in the U.S. The parties were also released from future exclusivity related to BCMA-directed T cell therapies. In addition, BMS agreed to buy out its obligation to pay bluebird future ex-U.S. milestones and royalties on ide-cel and bb21217 for a payment of $200 million, which was included in Research and development expense in the second quarter of 2020.

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

~~Acquisitions~~

~~Business Combination~~

~~Celgene~~

On November 20, 2019, BMS completed the Celgene acquisition. The acquisition is expected to further position BMS as a leading biopharmaceutical company for sustained innovation and long-term growth and to address the needs of patients with cancer, inflammatory, immunologic or cardiovascular diseases through high-value innovative medicines and leading scientific capabilities. The transaction was accounted for as a business combination, which requires that assets acquired and liabilities assumed be recognized at their fair value as of the acquisition date. The purchase price allocation is preliminary and subject to change for income tax matters. The amounts recognized will be finalized as the information necessary to complete the analysis is obtained, but no later than one year after the acquisition date.

The following table summarizes the provisional amounts recognized for assets acquired and liabilities assumed as of the acquisition date, as well as measurement period adjustments made year-to-date to the amounts initially recorded in 2019. The measurement period adjustments reflected in 2020 primarily resulted from completing valuations of real estate and personal property, revised future cash flow estimates for certain intangible assets, changes in the estimated tax basis of certain intangible assets based upon a tax ruling which reduced deferred income tax liabilities and other changes to certain equity investments, legal contingency and income tax liabilities. The related impact to net earnings that would have been recognized in previous periods if the adjustments were recognized as of the acquisition date is immaterial to the consolidated financial statements.

Dollars in Millions Amounts Recognized as of Acquisition Date
(as previously reported) Measurement Period Adjustments Amounts Recognized as of Acquisition Date
(as adjusted)
Cash and cash equivalents $ 11,179 $ — $ 11,179
Receivables 2,652 — 2,652
Inventories 4,511 — 4,511
Property, plant and equipment 1,342 (277) 1,065
Intangible assets 64,027 (100) 63,927
Otezla* assets held-for-sale
13,400 — 13,400
Other assets 3,408 45 3,453
Accounts payable (363) — (363)
Income taxes payable (2,718) (47) (2,765)
Deferred income tax liabilities (7,339) 2,350 (4,989)
Debt (21,782) — (21,782)
Other liabilities (4,017) 15 (4,002)
Identifiable net assets acquired 64,300 1,986 66,286
Goodwill 15,969 (1,986) 13,983
Total consideration transferred $ 80,269 $ — $ 80,269

~~Asset Acquisitions~~

~~MyoKardia~~

In the fourth quarter of 2020, BMS entered into a definitive merger agreement under which BMS will acquire MyoKardia, a clinical-stage biopharmaceutical company pioneering a precision medicine approach to discover, develop and commercialize targeted therapies for the treatment of serious cardiovascular diseases. The acquisition will provide BMS with rights to MyoKardia’s lead asset, mavacamten, a potential first-in-class cardiovascular medicine for the treatment of obstructive hypertrophic cardiomyopathy that has completed Phase III development with an anticipated NDA submission in the first quarter of 2021.

BMS, through a subsidiary, commenced a tender offer to acquire all of the issued and outstanding shares of MyoKardia’s common stock for $225.00 per share, or $13.1 billion. In November 2020, the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (“HSR Act”), as amended, expired. Expiration of the waiting period under the HSR Act satisfies one of the conditions necessary for the consummation of the transaction, which remains subject to the satisfaction of the tender of a majority of the outstanding shares of MyoKardia’s common stock, a well as other customary closing conditions and regulatory approvals. BMS intends to close the acquisition of MyoKardia at the earliest possible date after the closing of the tender offer, which it currently expects to be in the fourth quarter of 2020.

BMS anticipates funding the transaction through a combination of cash on hand from its operations and subject to market conditions, net proceeds received in connection with a future debt issuance. BMS expects to account for the transaction as an asset acquisition since mavacamten will represent substantially all of the fair value of the gross assets acquired.

~~Forbius~~

In the third quarter of 2020, BMS acquired all of the outstanding shares of Forbius, a privately held, clinical-stage protein engineering company that designs and develops biotherapeutics for the treatment of cancer and fibrotic diseases. The acquisition provides BMS with full rights to Forbius’s TGF-beta program, including the program’s lead investigational asset, AVID200, which is in Phase I development. BMS accounted for the transaction as an asset acquisition since AVID200 represented substantially all of the fair value of the gross assets acquired. The transaction price included an upfront payment of $185 million and contingent development, regulatory and sales-based milestone payments up to $815 million. The up-front payment was included in Research and development expense except for $7 million that was allocated to deferred tax assets.

~~Other~~

~~Research and development expense also includes $100 million in 2020 resulting from the occurrence of a development event attributed to the Cormorant asset acquisition completed in 2016.~~

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 ~~and assets held-for-sale~~ were not material in all periods presented (excluding divestiture gains or losses).

Three Months Ended September 30,
Net Proceeds(a)
Divestiture (Gains)/Losses Royalty and Milestone Income
Dollars in Millions 2020 2019 2020 2019 2020 2019
UPSA Business $ 0 $ 1,510 $ 0 $ (1,176) $ 0 $ 0
Diabetes Business 129 163 0 0 (148) (171)
Erbitux* 3 3 0 0 0 0
Manufacturing Operations 0 0 0 1 0 0
Mature Brands and Other 41 7 1 (4) (44) (6)
Total $ 173 $ 1,683 $ 1 $ (1,179) $ (192) $ (177)


		Nine Months Ended September 30,													Three Months Ended March 31,
		Net Proceeds(a)				Divestiture (Gains)/Losses				Royalty and Milestone Income					Net Proceeds(a)				Divestiture Gains				Royalty Income
Dollars in Millions	Dollars in Millions	2020		2019		2020		2019		2020		2019		Dollars in Millions	2021		2020		2021		2020		2021		2020
UPSA Business		$	0	$	1,510	$	0	$	(1,160)	$	0	$	0
Diabetes Business	Diabetes Business	409		491		0		0		(404)		(497)		Diabetes Business	$	164	$	153	$	0	$	0	$	(134)	$	(127)
Erbitux*		10		11		0		0		0		0
Erbitux* Business														Erbitux* Business	0		4		0		0		0		0
Manufacturing Operations	Manufacturing Operations	10		3		(1)		1		0		0		Manufacturing Operations	0		0		0		(1)		0		0
Plavix* and Avapro/Avalide		7		0		(12)		0		0		0
Plavix* and Avapro/Avalide														Plavix* and Avapro/Avalide	5		7		0		(12)		0		0
Mature Brands and Other	Mature Brands and Other	73		9		7		(12)		(76)		(8)		Mature Brands and Other	11		31		0		(3)		(1)		(31)
Total	Total	$	509	$	2,024	$	(6)	$	(1,171)	$	(480)	$	(505)	Total	$	180	$	195	$	0	$	(16)	$	(135)	$	(158)

(a) Includes royalties received subsequent to the related sale of the asset or business.

~~UPSA Business~~

In the third quarter of 2019, the Company sold its UPSA consumer health business, including the shares of UPSA SAS and BMS’s assets and liabilities relating to the UPSA product portfolio. The transaction was accounted for as the sale of a business.

~~Manufacturing Operations~~

In the second quarter of 2019, BMS agreed to sell its manufacturing and packaging facility in Anagni, Italy to Catalent. The transaction was accounted for as the sale of a business and the sale was completed in the fourth quarter of 2019. The assets were reduced to their relative fair value after considering the purchase price resulting in an impairment charge of $113 million for the nine months ended September 30, 2019 that was included in Cost of products sold.

Licensing and Other Arrangements

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

Three Months Ended September 30, Nine Months Ended September 30,
Dollars in Millions 2020 2019 2020 2019
Keytruda* royalties
$ (176) $ (132) $ (492) $ (373)
Up-front licensing fees 0 (24) (30) (24)
Contingent milestone income (16) (6) (62) (15)
Amortization of deferred income (14) (14) (44) (44)
Other royalties (5) (3) (16) (6)
Total $ (211) $ (179) $ (644) $ (462)

~~Dragonfly~~

In the fourth quarter of 2020, BMS obtained a global exclusive license to Dragonfly’s interleukin-12 (IL-12) investigational immunotherapy program, including its extended half-life cytokine DF6002. BMS will be responsible for the development and any subsequent commercialization of DF6002 and its related products worldwide, including strategic decisions, regulatory responsibilities, funding, and manufacturing. Dragonfly will continue to be involved in the development of DF6002 in current and certain future Phase I/II clinical trials. The transaction included an upfront payment of $400 million and Dragonfly is eligible to receive contingent consideration comprised of development, regulatory and sales-based milestone payments up to $2.8 billion. Dragonfly will also receive royalties on global net sales.


	Three Months Ended March 31,
Dollars in Millions	2021		2020
Keytruda* royalties	$	(192)	$	(161)
Tecentriq* royalties	(22)		0
Up-front licensing fees	0		(30)
Contingent milestone income	0		(41)
Amortization of deferred income	(15)		(15)
Other royalties	(3)		(5)
Total	$	(232)	$	(252)

Note 5. OTHER (INCOME)/EXPENSE, NET


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
Dollars in Millions	Dollars in Millions	2020		2019		2020		2019		Dollars in Millions	2021		2020
Interest expense	Interest expense	$	346	$	209	$	1,065	$	377	Interest expense	$	353	$	362
Pension and postretirement		0		1,537		(6)		1,607
Contingent consideration										Contingent consideration	(510)		556
Royalties and licensing income	Royalties and licensing income	(403)		(356)		(1,124)		(967)		Royalties and licensing income	(367)		(410)
Divestiture losses/(gains)		1		(1,179)		(6)		(1,171)
Acquisition expenses		0		7		0		475
Contingent consideration		(988)		0		(597)		0
Investment income		(13)		(173)		(99)		(348)
Equity investment (gains)/losses										Equity investment (gains)/losses	(601)		338
Integration expenses	Integration expenses	195		96		535		224		Integration expenses	141		174
Provision for restructuring	Provision for restructuring	176		10		451		32		Provision for restructuring	45		160
Equity investment (gains)/losses		(244)		261		(724)		15
Litigation and other settlements	Litigation and other settlements	10		(1)		41		0		Litigation and other settlements	(8)		32
Transition and other service fees	Transition and other service fees	(18)		(7)		(129)		(11)		Transition and other service fees	(15)		(61)
Intangible asset impairment		0		0		21		15
Investment income										Investment income	(9)		(61)
Reversion excise tax	Reversion excise tax	0		0		76		0		Reversion excise tax	0		76
Divestiture gains										Divestiture gains	0		(16)

Loss on debt redemption										Loss on debt redemption	281		0

Other	Other	23		6		8		1		Other	(12)		13
Other (income)/expense, net	Other (income)/expense, net	$	(915)	$	410	$	(488)	$	249	Other (income)/expense, net	$	(702)	$	1,163

Note 6. RESTRUCTURING

ACelgene Acquisition Plan

In 2019, a restructuring and integration plan ~~is being~~was implemented as an initiative to realize ~~$2.5 billion of~~ sustainable ~~run-rate~~run rate synergies resulting from cost savings and avoidance from the Celgene ~~acquisition.~~acquisition which is currently expected to be approximately $3.0 billion. The synergies are expected to be realized in Cost of products sold (10%), Marketing, selling and administrative expenses (55%) and Research and development expenses (35%). ~~The majority~~Charges of ~~charges~~approximately $3.0 billion are expected to be incurred through ~~2022, and range between $2.5 billion to $3.0 billion.~~2022. Cumulative charges of approximately ~~$1.7~~$2.1 billion have been recognized including integration planning and execution expenses, employee termination benefit costs and accelerated stock-based compensation, contract termination costs and other shutdown costs associated with site exits. Cash outlays in connection with these actions are expected to be approximately $2.5 billion. Employee workforce reductions were approximately ~~1,400~~65 and 600 for the ~~nine~~three months ended ~~September 30, 2020.~~March 31, 2021 and 2020, respectively.

~~The following tables summarize the charges and activity related to the Celgene acquisition:~~

Dollars in Millions Three Months Ended
September 30, 2020 Nine Months Ended
September 30, 2020
Employee termination costs $ 133 $ 386
Other termination costs 36 42
Provision for restructuring 169 428
Integration expenses 195 535
Accelerated depreciation 6 6
Asset impairments 3 42
Other 0 3
Total charges $ 373 $ 1,014

Dollars in Millions Three Months Ended
September 30, 2020 Nine Months Ended
September 30, 2020
Marketing, selling and administrative $ 6 $ 7
Research and development 3 42
Other (income)/expense, net 364 965
Total charges $ 373 $ 1,014


~~Dollars in Millions~~	Nine Months Ended September 30, 2020
~~Liability at January 1~~	$	77
~~Charges~~	~~372~~
~~Change in estimates~~	~~(8)~~
~~Provision for restructuring(a)~~	~~364~~
~~Foreign currency translation and other~~	2
~~Payments~~	~~(255)~~
~~Liability at September 30~~	$	~~188~~

~~(a) Excludes $64 million of accelerated stock-based compensation.~~MyoKardia Acquisition Plan

In ~~October~~2020, a restructuring and integration plan was initiated to realize expected cost synergies resulting from cost savings and avoidance from the MyoKardia acquisition. Charges of 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 $76 million have been recognized for these actions.

Company Transformation

In 2016, a restructuring plan was announced to evolve and streamline BMS’s operating model. ~~The majority of charges are expected to be incurred through 2020, range between $1.5 billion to $2.0 billion.~~ Cumulative charges of approximately $1.5 billion ~~have been~~were recognized including employee termination benefit costs, contract termination costs, accelerated depreciation and impairment charges and other costs associated with manufacturing and R&D site exits. The remaining charges are expected to result from additional site exit costs. Cash outlays in connection withfor these actions ~~are expected to be approximately 40% to 50%~~since the announcement. Actions under the plan were completed as of ~~the total charges.~~December 31, 2020.

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


	Three Months Ended March 31,
Dollars in Millions	2021		2020
Celgene Acquisition Plan	$	173	$	324
MyoKardia Acquisition Plan	37		0
Company Transformation	0		82
Total charges	$	210	$	406

Employee termination costs	$	44	$	149
Other termination costs	1		11
Provision for restructuring	45		160
Integration expenses	141		174
Accelerated depreciation	0		30
Asset impairments	24		42

Total charges	$	210	$	406

Cost of products sold	$	24	$	16

Research and development	0		56
Other (income)/expense, net	186		334
Total charges	$	210	$	406

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


	Three Months Ended March 31,
Dollars in Millions	2021		2020
Liability at December 31	$	148	$	100
Provision for restructuring(a)	39		142
Foreign currency translation and other	(2)		6
Payments	(59)		(107)
Liability at March 31	$	126	$	141

(a) Includes the ~~Company transformation:~~

Three Months Ended September 30, Nine Months Ended September 30,
Dollars in Millions 2020 2019 2020 2019
Employee termination costs $ 0 $ 4 $ 3 $ 11
Other termination costs 7 6 20 21
Provision for restructuring 7 10 23 32
Accelerated depreciation 1 33 42 96
Asset impairments 2 9 44 119
Other shutdown costs 0 0 6 0
Total charges $ 10 $ 52 $ 115 $ 247

Three Months Ended September 30, Nine Months Ended September 30,
Dollars in Millions 2020 2019 2020 2019
Cost of products sold $ 3 $ 22 $ 30 $ 156
Marketing, selling and administrative 0 0 0 1
Research and development 0 20 56 58
Other (income)/expense, net 7 10 29 32
Total charges $ 10 $ 52 $ 115 $ 247
liability resulting from changes in estimates of $1 million and $4 million for the three months ended March 31, 2021 and 2020, respectively. Excludes $6 million and $18 million for the three months ended March 31, 2021 and 2020, respectively, of accelerated stock-based compensation relating to the Celgene Acquisition Plan.

1310

Nine Months Ended September 30,
Dollars in Millions 2020 2019
Liability at December 31 $ 23 $ 99
Cease-use liability reclassification 0 (3)
Liability at January 1 23 96
Charges 22 36
Change in estimates 1 (4)
Provision for restructuring 23 32
Foreign currency translation and other 0 (1)
Payments (40) (98)
Liability at September 30 $ 6 $ 29

Note 7. INCOME TAXES


		Three Months Ended September 30,						Nine Months Ended September 30,							Three Months Ended March 31,
Dollars in Millions	Dollars in Millions	2020			2019			2020			2019			Dollars in Millions	2021			2020
Earnings Before Income Taxes		$	2,257		$	1,349		$	3,580		$	5,104
Provision/(Benefit) for Income Taxes		379			(17)			2,548			584
Earnings/(Loss) Before Income Taxes														Earnings/(Loss) Before Income Taxes	$	2,530		$	(304)
Provision for Income Taxes														Provision for Income Taxes	501			462
Effective Tax Rate	Effective Tax Rate	16.8		%	(1.3)		%	71.2		%	11.4		%	Effective Tax Rate	19.8		%	(152.0)		%

~~An $853 million deferred tax charge resulting from an internal transfer of certain intangible assets to~~Income taxes in interim periods are determined based on the ~~U.S. and an additional $266 million GILTI tax charge upon finalization of the~~ ~~Otezla~~* divestiture tax consequences with tax authorities increased theestimated annual effective tax ~~rate by 31.3% for~~rates and the ~~nine months ended September 30, 2020. The~~ tax impact of discrete items that are reflected immediately. The effective tax rates in the first quarter of 2021 and 2020 were impacted by low jurisdictional tax rates attributed to the unwinding or amortization of inventory and intangible asset purchase price adjustments, ~~increased the effective tax rate and non-taxable~~contingent value rights fair value adjustments ~~to contingent~~that are not taxable or deductible and valuation allowances on equity investment fair value rights decreased the effective tax rate for the nine months ended September 30, 2020. The tax impact of high jurisdictional tax rates attributed to pension settlement charges and gain on sale of the UPSA business divestiture decreased the effective tax rate in the prior periods. The tax impact of discrete items are reflected immediately and not considered in estimating the annual effective tax rate.adjustments. 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, cash repatriations and revised interpretations of the relevant tax code.

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. BMS received several notices of proposed adjustments from the IRS related to transfer pricing and other tax positions for the 2008-2012 tax years. 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. Tax reserve releases due to lapse of statutes was $81 million in the three months ended September 30, 2019.

It is ~~also~~ reasonably possible that the ~~total~~ amount of unrecognized tax benefits at ~~September 30, 2020~~March 31, 2021 could decrease in the range of approximately ~~$350~~$460 million to ~~$390~~$510 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~~EARNINGS/(LOSS) PER SHARE


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
Amounts in Millions, Except Per Share Data	Amounts in Millions, Except Per Share Data	2020		2019		2020		2019		Amounts in Millions, Except Per Share Data	2021		2020
Net Earnings Attributable to BMS Used for Basic and Diluted EPS Calculation		$	1,872	$	1,353	$	1,012	$	4,495
Net Earnings/(Loss) Attributable to BMS Used for Basic and Diluted EPS Calculation										Net Earnings/(Loss) Attributable to BMS Used for Basic and Diluted EPS Calculation	$	2,021	$	(775)

Weighted-Average Common Shares Outstanding – Basic	Weighted-Average Common Shares Outstanding – Basic	2,257		1,632		2,260		1,634		Weighted-Average Common Shares Outstanding – Basic	2,236		2,258
Incremental Shares Attributable to Share-Based Compensation Plans	Incremental Shares Attributable to Share-Based Compensation Plans	33		2		35		2		Incremental Shares Attributable to Share-Based Compensation Plans	29		0
Weighted-Average Common Shares Outstanding – Diluted	Weighted-Average Common Shares Outstanding – Diluted	2,290		1,634		2,295		1,636		Weighted-Average Common Shares Outstanding – Diluted	2,265		2,258

Earnings per Common Share
Earnings/(Loss) per Common Share										Earnings/(Loss) per Common Share
Basic	Basic	$	0.83	$	0.83	$	0.45	$	2.75	Basic	$	0.90	$	(0.34)
Diluted	Diluted	0.82		0.83		0.44		2.75		Diluted	0.89		(0.34)

The total number of potential shares of common stock excluded from the diluted ~~EPS~~earnings/(loss) per common share computation because of the antidilutive impact was 2714 million and 29138 million for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and 2020, ~~respectively, and was not material for the three and nine months ended September 30, 2019.~~respectively.

Note 9. FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS

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


		September 30, 2020						December 31, 2019							March 31, 2021						December 31, 2020
Dollars in Millions	Dollars in Millions	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3		Dollars in Millions	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Cash and cash equivalents - money market and other securities	Cash and cash equivalents - money market and other securities	$	0	$	17,075	$	0	$	0	$	10,448	$	0	Cash and cash equivalents - money market and other securities	$	0	$	8,381	$	0	$	0	$	12,361	$	0
Marketable debt securities:	Marketable debt securities:													Marketable debt securities:
Certificates of deposit	Certificates of deposit	0		1,391		0		0		1,227		0		Certificates of deposit	0		1,633		0		0		1,020		0
Commercial paper		0		0		0		0		1,093		0

Corporate debt securities	Corporate debt securities	0		824		0		0		1,494		0		Corporate debt securities	0		603		0		0		698		0
Derivative assets	Derivative assets	0		74		0		0		140		0		Derivative assets	0		165		27		0		42		27
Equity investments	Equity investments	2,927		134		0		2,020		175		0		Equity investments	3,094		162		0		3,314		138		0
Derivative liabilities	Derivative liabilities	0		(120)		0		0		(40)		0		Derivative liabilities	0		(72)		0		0		(270)		0
Contingent consideration liability:	Contingent consideration liability:													Contingent consideration liability:
Contingent value rights	Contingent value rights	1,697		0		0		2,275		0		0		Contingent value rights	9		0		0		530		0		0
Other acquisition related contingent consideration	Other acquisition related contingent consideration	0		0		73		0		0		106		Other acquisition related contingent consideration	0		0		79		0		0		78

As further described in “Item 8. Financial Statements and Supplementary Data—Note 9. Financial Instruments and Fair Value Measurements” in the Company’s ~~2019~~2020 Form 10-K, the Company’s fair value estimates use inputs that are either (1) quoted prices for identical assets or liabilities in active markets (Level 1 inputs); (2) observable prices for similar assets or liabilities in active markets or for identical or similar assets or liabilities in markets that are not active (Level 2 inputs); or (3) unobservable inputs (Level 3 inputs).

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 ~~estimated annual sales~~ and the discount rate used to calculate the present value of estimated future payments. Significant changes which increase or decrease the probabilities of achieving the related development and regulatory events or shorten or lengthen the time required to achieve such events ~~or increase or decrease estimated annual sales~~ would result in corresponding increases or decreases in the fair values of these obligations. The fair value of ~~our~~other acquisition related contingent consideration as of ~~September 30, 2020~~March 31, 2021 was calculated using the following significant unobservable inputs:


			Ranges (weighted average) utilized as of:
Inputs			~~September 30, 2020~~March 31, 2021
Discount rate			~~2.2%~~0.2% to ~~2.7% (2.4%~~0.8% (0.4%)
Probability of payment			0% to ~~80% (2.7%~~100% (2.8%)
Projected year of payment for development and regulatory milestones			2021 to 2025

There were no transfers between levels 1, 2 and 3 during the ~~nine~~three months ended ~~September 30, 2020.~~March 31, 2021. The following table represents a roll-forward of the fair value of level 3 instruments:


~~Dollars in Millions~~	~~Nine Months Ended September 30, 2020~~
~~Fair value as of January 1~~	$	~~106~~
~~Changes in estimated fair value~~	~~(35)~~
~~Foreign exchange~~	2

~~Fair value as of September 30~~	$	73


	Three Months Ended March 31, 2021				Three Months Ended March 31, 2020
Dollars in Millions	Asset		Liability		Asset		Liability
Fair value as of January 1	$	27	$	78	$	—	$	106

Changes in estimated fair value	—		3		—		(36)

Foreign exchange	—		(2)		—		(1)
Fair value as of March 31	$	27	$	79	$	—	$	69

Available-for-sale Debt Securities and Equity Investments

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


	March 31, 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	$	1,633	$	0	$	0	$	1,633	$	1,020	$	0	$	0	$	1,020

Corporate debt securities	592		11		0		603		684		14		0		698
Total available-for-sale debt securities(a)	$	2,225	$	11	$	0	$	2,236	$	1,704	$	14	$	0	$	1,718

(a) All marketable debt securities mature within two years as of March 31, 2021 and December 31, 2020.

The following summarizes the carrying amount of equity investments:


Dollars in Millions	March 31, 2021		December 31, 2020
Equity investments with readily determinable fair values	$	3,256	$	3,452
Equity investments without readily determinable fair values	616		694
Equity method investments	683		549
Total equity investments	$	4,555	$	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. ~~The following table summarizes available-for-sale debt securities and equity investments:~~

September 30, 2020 December 31, 2019
Dollars in Millions Amortized Cost Gross Unrealized Amortized Cost Gross Unrealized
Gains Losses Fair Value Gains Losses Fair Value
Certificates of deposit $ 1,391 $ 0 $ 0 $ 1,391 $ 1,227 $ 0 $ 0 $ 1,227
Commercial paper 0 0 0 0 1,093 0 0 1,093
Corporate debt securities 807 17 0 824 1,487 8 (1) 1,494
Total available-for-sale debt securities(a)
$ 2,198 $ 17 $ 0 $ 2,215 $ 3,807 $ 8 $ (1) $ 3,814
Equity investments 3,061 2,195
Total $ 5,276 $ 6,009


	Three Months Ended March 31,
Dollars in Millions	2021		2020
Net gain/(loss) recognized on equity investments with readily determinable fair values(a)	$	437	$	(228)
Realized loss recognized on equity investments with readily determinable fair value sold	(3)		0

Upward adjustments on equity investments without readily determinable fair value	31		75
Impairments and downward adjustments on equity investments without readily determinable fair value	(1)		(188)

Cumulative upward adjustments on equity investments without readily determinable fair value	218
Cumulative impairments and downward adjustments on equity investments without readily determinable fair value	(167)

(a) ~~All marketable debt securities mature within five years as of September 30, 2020 and December 31, 2019.~~

Equity investments not measured at fair value and excluded from the above fair value table were limited partnerships and other equity method investments of $496 million at September 30, 2020 and $429 million at December 31, 2019 and otherNet unrealized net gains/(losses) on equity investments ~~without readily determinable fair values of $735~~still held were $381 million ~~at September 30, 2020~~ and ~~$781~~$(228) million ~~at December 31, 2019. These amounts are included in Other non-current assets. Upward adjustments to equity investments without readily determinable fair values~~ for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and 2020, were $46 million and $318 million, respectively, resulting from observable price changes for similar securities for the same issuer and were recorded in Other (income)/expense, net. Downward adjustments to equity investments without readily determinable fair values for the three and nine months ended September 30, 2020 were $2 million and $203 million, respectively.

~~The following table summarizes the net gain/(loss) recorded for equity investments with readily determinable fair values held as of September 30, 2020 and 2019:~~

Three Months Ended September 30, Nine Months Ended September 30,
Dollars in Millions 2020 2019 2020 2019
Net gain/(loss) recognized $ 170 $ (235) $ 577 $ (81)
Less: Net gain recognized for equity investments sold 0 0 0 14
Net unrealized gain/(loss) on equity investments held $ 170 $ (235) $ 577 $ (95)

Qualifying Hedges and Non-Qualifying Derivatives

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 are temporarily reported in Accumulated other comprehensive loss and included in earnings when the hedged item affects earnings. The ~~majority of 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 of ~~$3.0~~$3.3 billion and Japanese yen of ~~$1.4~~$1.1 billion at ~~September 30, 2020.~~March 31, 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 cash flows of 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 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 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 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, 2020~~March 31, 2021 are designated as net investment hedges to hedge euro currency exposures of the net investment in certain foreign 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. Contract fair value changes are recorded in the foreign currency translation component of Other Comprehensive (Loss)/Income with a related offset in Other non-current assets or Other non-current liabilities.

Cross-currency interest rate swap contracts of $400 million at ~~September 30, 2020~~March 31, 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 Other Comprehensive Income/(Loss)~~/Income~~ 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 ~~(0.15%~~(0.11% as of ~~September 30, 2020)~~March 31, 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. When the underlying swap is terminated prior to maturity, the fair value adjustment to the underlying debt is amortized as a reduction to interest expense over the remaining term of the debt.

In the second quarter of 2019, deal contingent forward starting interest rate swap contracts were entered into, with an aggregate notional principal amount of $10.4 billion to hedge interest rate risk associated with the anticipated issuance of long-term debt to fund the Celgene acquisition and the forward starting interest rate swap option contracts were terminated. The deal contingent forward starting interest rate swap contracts were terminated upon the completion of the Celgene acquisition.

The following table summarizes the fair value of outstanding derivatives:


		September 30, 2020								December 31, 2019									March 31, 2021								December 31, 2020
		Asset(a)				Liability(b)				Asset(a)				Liability(b)					Asset(a)				Liability(b)				Asset(a)				Liability(b)
Dollars in Millions	Dollars in Millions	Notional		Fair Value		Notional		Fair Value		Notional		Fair Value		Notional		Fair Value		Dollars in Millions	Notional		Fair Value		Notional		Fair Value		Notional		Fair Value		Notional		Fair Value
Derivatives designated as hedging instruments:	Derivatives designated as hedging instruments:																	Derivatives designated as hedging instruments:
Interest rate swap contracts	Interest rate swap contracts	$	255	$	27	$	0	$	0	$	255	$	6	$	0	$	0	Interest rate swap contracts	$	255	$	14	$	0	$	0	$	255	$	24	$	0	$	0
Cross-currency interest rate swap contracts	Cross-currency interest rate swap contracts	225		2		175		(1)		175		2		125		(1)		Cross-currency interest rate swap contracts	400		16		0		0		0		0		400		(10)
Foreign currency forward contracts	Foreign currency forward contracts	1,904		18		3,422		(116)		766		27		980		(20)		Foreign currency forward contracts	3,873		118		1,688		(64)		231		1		5,813		(259)

Derivatives not designated as hedging instruments:	Derivatives not designated as hedging instruments:																	Derivatives not designated as hedging instruments:
Foreign currency forward contracts	Foreign currency forward contracts	1,108		27		478		(3)		2,342		91		1,173		(10)		Foreign currency forward contracts	809		17		539		(8)		1,104		17		336		(1)
Foreign currency zero-cost collar contracts		123		0		65		0		2,482		14		2,235		(9)

Other																		Other	0		27		0		0		0		27		0		0

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

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

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

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 $ 0 $ (7) $ 0 $ (21)
Cross-currency interest rate swap contracts 0 (3) 0 (8)
Foreign currency forward contracts (5) 14 (63) (41)
Foreign currency zero-cost collar contracts 0 0 0 1


		Three Months Ended September 30, 2019				Nine Months Ended September 30, 2019					Three Months Ended March 31, 2021				Three Months Ended March 31, 2020
Dollars in Millions	Dollars in Millions	Cost of products sold		Other (income)/expense, net		Cost of products sold		Other (income)/expense, net		Dollars in Millions	Cost of products sold		Other (income)/expense, net		Cost of products sold		Other (income)/expense, net
Interest rate swap contracts	Interest rate swap contracts	$	0	$	(6)	$	0	$	(18)	Interest rate swap contracts	$	0	$	(8)	$	0	$	(7)
Cross-currency interest rate swap contracts	Cross-currency interest rate swap contracts	0		(2)		0		(6)		Cross-currency interest rate swap contracts	0		(3)		0		(2)
Foreign currency forward contracts	Foreign currency forward contracts	(20)		(9)		(76)		(11)		Foreign currency forward contracts	67		(32)		(23)		(76)
Forward starting interest rate swap options		0		0		0		35
Deal contingent forward starting interest rate swap		0		0		0		240
Foreign currency zero-cost collar contracts										Foreign currency zero-cost collar contracts	0		0		0		(9)

1814

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


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
Dollars in Millions	Dollars in Millions	2020		2019		2020		2019		Dollars in Millions	2021		2020
Derivatives qualifying as cash flow hedges	Derivatives qualifying as cash flow hedges									Derivatives qualifying as cash flow hedges
Foreign currency forward contracts gain/(loss):	Foreign currency forward contracts gain/(loss):									Foreign currency forward contracts gain/(loss):
Recognized in Other Comprehensive (Loss)/Income(a)		$	(128)	$	63	$	(65)	$	102
Recognized in Other Comprehensive Income/(Loss)(a)										Recognized in Other Comprehensive Income/(Loss)(a)	$	259	$	97
Reclassified to Cost of products sold	Reclassified to Cost of products sold	(17)		(20)		(69)		(76)		Reclassified to Cost of products sold	36		(20)

Derivatives qualifying as net investment hedges	Derivatives qualifying as net investment hedges									Derivatives qualifying as net investment hedges
Cross-currency interest rate swap contracts gain/(loss):
Recognized in Other Comprehensive (Loss)/Income		(11)		2		(1)		4
Cross-currency interest rate swap contracts gain:										Cross-currency interest rate swap contracts gain:
Recognized in Other Comprehensive Income/(Loss)										Recognized in Other Comprehensive Income/(Loss)	26		6

Non-derivatives qualifying as net investment hedges	Non-derivatives qualifying as net investment hedges									Non-derivatives qualifying as net investment hedges
Non-U.S. dollar borrowings gain/(loss):
Recognized in Other Comprehensive (Loss)/Income		(39)		41		(51)		43

Non-U.S. dollar borrowings gain:										Non-U.S. dollar borrowings gain:
Recognized in Other Comprehensive Income/(Loss)										Recognized in Other Comprehensive Income/(Loss)	41		20

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

Debt Obligations

Short-term debt obligations include:


Dollars in Millions	Dollars in Millions	September 30, 2020		December 31, 2019		Dollars in Millions	March 31, 2021		December 31, 2020

Non-U.S. short-term borrowings	Non-U.S. short-term borrowings	$	183	$	351	Non-U.S. short-term borrowings	$	167	$	176
Current portion of long-term debt	Current portion of long-term debt	3,250		2,763		Current portion of long-term debt	1,500		2,000
Other	Other	152		232		Other	110		164
Total	Total	$	3,585	$	3,346	Total	$	1,777	$	2,340

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


Dollars in Millions	Dollars in Millions	September 30, 2020		December 31, 2019		Dollars in Millions	March 31, 2021		December 31, 2020
Principal Value	Principal Value	$	42,896	$	44,335	Principal Value	$	44,646	$	48,711

Adjustments to Principal Value:	Adjustments to Principal Value:					Adjustments to Principal Value:
Fair value of interest rate swap contracts	Fair value of interest rate swap contracts	27		6		Fair value of interest rate swap contracts	14		24
Unamortized basis adjustment from swap terminations	Unamortized basis adjustment from swap terminations	155		175		Unamortized basis adjustment from swap terminations	137		149
Unamortized bond discounts and issuance costs	Unamortized bond discounts and issuance costs	(256)		(280)		Unamortized bond discounts and issuance costs	(287)		(303)
Unamortized purchase price adjustments of Celgene debt	Unamortized purchase price adjustments of Celgene debt	1,792		1,914		Unamortized purchase price adjustments of Celgene debt	1,495		1,755
Total	Total	$	44,614	$	46,150	Total	$	46,005	$	50,336

Current portion of long-term debt	Current portion of long-term debt	$	3,250	$	2,763	Current portion of long-term debt	$	1,500	$	2,000
Long-term debt	Long-term debt	41,364		43,387		Long-term debt	44,505		48,336
Total	Total	$	44,614	$	46,150	Total	$	46,005	$	50,336

The fair value of long-term debt was ~~$52.7~~$50.3 billion at ~~September 30, 2020~~March 31, 2021 and ~~$50.7~~$58.5 billion at December 31, ~~2019~~2020 valued using Level 2 inputs, which are based upon the quoted market prices for the same or similar debt instruments. The fair value of short-term borrowings approximates the carrying value due to the short maturities of the debt instruments.

In the three months ended March 31, 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. In addition, the $500 million 2.875% Notes matured and were repaid.

Interest payments were ~~$1.3 billion~~$435 million and ~~$166~~$491 million for the ~~nine~~three months ended ~~September 30,~~March 31, 2021 and 2020, ~~and 2019,~~ respectively, net of amounts related to interest rate swap contracts.

In the second quarter of 2019, BMS issued an aggregate principal amount of $19.0 billion of floating rate and fixed rate unsecured senior notes. The notes rank equally in right of payment with all of the Company’s existing and future senior unsecured indebtedness and the fixed rate notes are redeemable at any time, in whole, or in part, at varying specified redemption prices plus accrued and unpaid interest.

1915

During the third quarter of 2020, the $1.5 billion 2.875% Notes matured and were repaid. During the first quarter of 2019, the $750 million 1.600% Notes and the $500 million 1.750% Notes matured and were repaid.

As of ~~September 30, 2020,~~March 31, 2021, BMS had ~~four~~4 separate revolving credit facilities totaling $6.0 billion, which consisted of a 364-day $2.0 billion facility expiring in January ~~2021,~~2022, a three-year $1.0 billion facility expiring in January 2022 and two five-year $1.5 billion facilities that were extended to September ~~2023~~2024 and July ~~2024,~~2025, respectively. The 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. BMS’s $1.0 billion facility~~borrowings and ~~its two $1.5 billion revolving 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 ~~facilities~~facility at ~~September 30, 2020~~March 31, 2021 or December 31, ~~2019.~~2020.

Note 10. RECEIVABLES


Dollars in Millions	Dollars in Millions	September 30, 2020		December 31, 2019		Dollars in Millions	March 31, 2021		December 31, 2020
Trade receivables	Trade receivables	$	7,168	$	6,888	Trade receivables	$	7,767	$	7,882
Less charge-backs and cash discounts	Less charge-backs and cash discounts	(371)		(391)		Less charge-backs and cash discounts	(564)		(645)
Less allowance for expected credit loss	Less allowance for expected credit loss	(20)		(21)		Less allowance for expected credit loss	(16)		(18)
Net trade receivables	Net trade receivables	6,777		6,476		Net trade receivables	7,187		7,219
Alliance, royalties, VAT and other	Alliance, royalties, VAT and other	1,285		1,209		Alliance, royalties, VAT and other	1,473		1,282
Receivables	Receivables	$	8,062	$	7,685	Receivables	$	8,660	$	8,501

Non-U.S. receivables sold on a nonrecourse basis were ~~$788~~$318 million and ~~$580~~$180 million for the ~~nine~~three months ended ~~September 30,~~March 31, 2021 and 2020, ~~and 2019,~~ respectively. Receivables from the 3 largest customers in the U.S. represented approximately ~~56%~~57% and ~~50%~~55% of total trade receivables at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, respectively.

Note 11. INVENTORIES


Dollars in Millions	Dollars in Millions	September 30, 2020		December 31, 2019		Dollars in Millions	March 31, 2021		December 31, 2020
Finished goods	Finished goods	$	822	$	2,227	Finished goods	$	806	$	932
Work in process	Work in process	2,069		3,267		Work in process	1,943		2,015
Raw and packaging materials	Raw and packaging materials	221		172		Raw and packaging materials	219		207
Total inventories	Total inventories	$	3,112	$	5,666	Total inventories	$	2,968	$	3,154

Inventories	Inventories	$	1,949	$	4,293	Inventories	$	1,953	$	2,074
Other non-current assets	Other non-current assets	1,163		1,373		Other non-current assets	1,015		1,080

Total inventories include fair value adjustments resulting from the Celgene acquisition of ~~$883~~$695 million at ~~September 30, 2020~~March 31, 2021 and ~~$3.5 billion~~$774 million at December 31, ~~2019.~~2020. Other non-current assets include inventory expected to remain on hand beyond one year in both periods.

Note 12. PROPERTY, PLANT AND EQUIPMENT

Dollars in Millions September 30,
2020 December 31,
2019
Land $ 188 $ 187
Buildings 5,708 6,336
Machinery, equipment and fixtures 3,101 3,157
Construction in progress 409 527
Gross property, plant and equipment 9,406 10,207
Less accumulated depreciation (3,666) (3,955)
Property, plant and equipment(a)
$ 5,740 $ 6,252

~~(a) Includes measurement period adjustments. Refer to “—Note 4. Acquisitions, Divestitures, Licensing and Other Arrangements” for more information.~~


Dollars in Millions	March 31, 2021		December 31, 2020
Land	$	169	$	189
Buildings	5,612		5,732
Machinery, equipment and fixtures	3,093		3,063
Construction in progress	519		487
Gross property, plant and equipment	9,393		9,471
Less accumulated depreciation	(3,630)		(3,585)
Property, plant and equipment	$	5,763	$	5,886

Depreciation expense was ~~$136~~$135 million and ~~$451~~$170 million for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and 2020, ~~and $135 million and $401 million for the three and nine months ended September 30, 2019,~~ respectively.

2016

Note 13. GOODWILL AND OTHER INTANGIBLE ASSETS

Dollars in Millions Estimated Useful Lives September 30,
2020 December 31,
2019
Goodwill(a)
$ 20,517 $ 22,488
Other intangible assets:
Licenses 5 – 15 years 461 482
Acquired developed product rights(a)
3 – 15 years 59,651 46,827
Capitalized software 3 – 10 years 1,357 1,297
IPRD 6,600 19,500
Gross other intangible assets 68,069 68,106
Less accumulated amortization (11,371) (4,137)
Other intangible assets $ 56,698 $ 63,969

~~(a) Includes measurement period adjustments. Refer to “—Note 4. Acquisitions, Divestitures, Licensing and Other Arrangements” for more information.~~


Dollars in Millions	Estimated Useful Lives	March 31, 2021		December 31, 2020
Goodwill		$	20,524	$	20,547

Other intangible assets:
Licenses	5 – 15 years	328		328
Acquired marketed product rights	3 – 15 years	60,710		59,076
Capitalized software	3 – 10 years	1,358		1,325
IPRD		4,590		6,130
Gross other intangible assets		66,986		66,859
Less accumulated amortization		(16,167)		(13,616)
Other intangible assets		$	50,819	$	53,243

In the ~~nine months ended September 30, 2020, $12.9~~first quarter of 2021, $1.5 billion of IPRD was reclassified to acquired ~~developed~~marketed product rights upon approval ~~in the U.S. for~~of ~~Reblozyl~~ ~~for the treatment of anemia in adults with lower-risk MDS,~~ ~~Zeposia~~Breyanzi and ~~Onureg~~Abecma. in the U.S. Amortization expense of other intangible assets was ~~$2.5~~$2.6 billion and ~~$7.3~~$2.3 billion for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and 2020, ~~and $52 million and $156 million for the three and nine months ended September 30, 2019,~~ respectively.

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	Dollars in Millions	September 30, 2020		December 31, 2019		Dollars in Millions	March 31, 2021		December 31, 2020
Prepaid and refundable income taxes	Prepaid and refundable income taxes	$	1,633	$	754	Prepaid and refundable income taxes	$	1,637	$	1,799
Research and development	Research and development	462		410		Research and development	555		492
Equity investments	Equity investments	126		0		Equity investments	207		619
Other(a)		890		819
Restricted cash						Restricted cash	140		89
Other						Other	1,029		787
Other current assets	Other current assets	$	3,111	$	1,983	Other current assets	$	3,568	$	3,786

~~(a) Includes restricted cash of $84 million at September 30, 2020.~~


Dollars in Millions	Dollars in Millions	September 30, 2020		December 31, 2019		Dollars in Millions	March 31, 2021		December 31, 2020
Equity investments	Equity investments	$	4,166	$	3,405	Equity investments	$	4,348	$	4,076
Inventories	Inventories	1,163		1,373		Inventories	1,015		1,080
Operating leases	Operating leases	718		704		Operating leases	850		859
Pension and postretirement	Pension and postretirement	222		456		Pension and postretirement	216		208
Restricted cash(a)	Restricted cash(a)	341		390		Restricted cash(a)	199		338
Other	Other	286		276		Other	509		458
Other non-current assets	Other non-current assets	$	6,896	$	6,604	Other non-current assets	$	7,137	$	7,019

(a) Restricted cash consists of ~~escrow for litigation settlements and~~ funds restricted for annual Company contributions to the defined contribution plan in the U.S. and escrow for litigation settlements. Restricted cash of ~~$425~~$339 million at March 31, 2021 and $429 million at March 31, 2020 was included in cash, cash equivalents and restricted cash ~~at September 30, 2020~~ in the consolidated statements of cash flows.

Dollars in Millions September 30,
2020 December 31, 2019
Rebates and returns $ 5,747 $ 4,275
Income taxes payable 686 1,517
Employee compensation and benefits 1,069 1,457
Research and development 1,315 1,324
Dividends 1,043 1,025
Interest 380 493
Royalties 398 418
Operating leases 136 133
Contingent value rights 1,680 0
Other 1,984 1,871
Other current liabilities $ 14,438 $ 12,513

2117


Dollars in Millions	Dollars in Millions	September 30, 2020		December 31, 2019		Dollars in Millions	March 31, 2021		December 31, 2020
Rebates and returns						Rebates and returns	$	5,410	$	5,688
Income taxes payable	Income taxes payable	$	5,025	$	5,368	Income taxes payable	716		647
Employee compensation and benefits						Employee compensation and benefits	793		1,412
Research and development						Research and development	1,407		1,423
Dividends						Dividends	1,118		1,129
Interest						Interest	387		434
Royalties						Royalties	334		461
Operating leases						Operating leases	160		164
Contingent value rights	Contingent value rights	17		2,275		Contingent value rights	0		515
Pension and postretirement		871		725
Operating leases		722		672
Deferred income		361		424
Deferred compensation		301		287
Other	Other	268		350		Other	2,256		2,154
Other non-current liabilities		$	7,565	$	10,101
Other current liabilities						Other current liabilities	$	12,581	$	14,027


Dollars in Millions	March 31, 2021		December 31, 2020
Income taxes payable	$	5,015	$	5,017
Pension and postretirement	838		899
Operating leases	827		833
Deferred income	340		357
Deferred compensation	396		344
Other	276		326
Other non-current liabilities	$	7,692	$	7,776

Note 15. EQUITY

The following table summarizes changes in equity for the ~~nine~~three months ended ~~September 30,~~March 31, 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

(a) Cash dividends declared per common share were $0.49 for the three months ended March 31, 2021.

The following table summarizes changes in equity for the three months ended March 31, 2020:


		Common Stock			Capital in Excess of Par Value of Stock		Accumulated Other Comprehensive Loss		Retained Earnings		Treasury Stock			Noncontrolling Interest			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	Dollars and Shares in Millions	Shares	Par Value								Shares	Cost				Dollars and Shares in Millions	Shares	Par Value								Shares	Cost
Balance at December 31, 2019	Balance at December 31, 2019	2,923	$	292	$	43,709	$	(1,520)	$	34,474	672	$	(25,357)	$	100	Balance at December 31, 2019	2,923	$	292	$	43,709	$	(1,520)	$	34,474	672	$	(25,357)	$	100
Net loss	Net loss	—	—		—		—		(775)		—	—		9		Net loss	—	—		—		—		(775)		—	—		9
Other Comprehensive Loss	Other Comprehensive Loss	—	—		—		(29)		—		—	—		—		Other Comprehensive Loss	—	—		—		(29)		—		—	—		—
Cash dividends declared(a)	Cash dividends declared(a)	—	—		—		—		(1,028)		—	—		—		Cash dividends declared(a)	—	—		—		—		(1,028)		—	—		—
Share repurchase program	Share repurchase program	—	—		—		—		—		1	(81)		—		Share repurchase program	—	—		—		—		—		1	(81)		—
Stock compensation	Stock compensation	—	—		(455)		—		—		(13)	681		—		Stock compensation	—	—		(455)		—		—		(13)	681		—
Distributions	Distributions	—	—		—		—		—		—	—		(43)		Distributions	—	—		—		—		—		—	—		(43)
Balance at March 31, 2020	Balance at March 31, 2020	2,923	292		43,254		(1,549)		32,671		660	(24,757)		66		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(a)		—	—		—		—		(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(a)		—	—		—		—		(1,023)		—	—		—
Stock repurchase program		—	—		0		—		—		0	0		—
Stock compensation		—	—		(9)		—		—		(6)	367		—
Distributions		—	—		—		—		—		—	—		0
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, 2020 and September 30,~~ 2020.

2218

~~The following table summarizes changes in equity for the nine months ended September 30, 2019:~~

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, 2018 2,208 $ 221 $ 2,081 $ (2,762) $ 34,065 576 $ (19,574) $ 96
Accounting change - cumulative effect(a)
— — — — 5 — — —
Adjusted balance at January 1, 2019 2,208 221 2,081 (2,762) 34,070 576 (19,574) 96
Net earnings — — — — 1,710 — — 5
Other Comprehensive Income — — — 118 — — — —
Cash dividends declared(b)
— — — — (671) — — —
Stock compensation — — 22 — — (4) 3 —
Distributions — — — — — — — (2)
Balance at March 31, 2019 2,208 221 2,103 (2,644) 35,109 572 (19,571) 99
Net earnings — — — — 1,432 — — 7
Other Comprehensive Income — — — 23 — — — —
Cash dividends declared(b)
— — — — (671) — — —
Stock compensation — — 47 — — 0 0 —
Distributions — — — — — — — (4)
Balance at June 30, 2019 2,208 221 2,150 (2,621) 35,870 572 (19,571) 102
Net earnings — — — — 1,353 — — 13
Other Comprehensive Income — — — 1,158 — — — —
Cash dividends declared(b)
— — — — (668) — — —
Stock repurchase program — — — — — 7 (300) —
Stock compensation — — 56 — — — — —
Distributions — — — — — — — (9)
Balance at September 30, 2019 2,208 $ 221 $ 2,206 $ (1,463) $ 36,555 579 $ (19,871) $ 106

~~(a) Refer to “—Note 1. Accounting Policies and Recently Issued Accounting Standards” in the Company’s 2019 Form 10-K for additional information.~~

~~(b) Cash dividends declared per common share were $0.41 for the three months ended March 31, 2019, June 30, 2019 and September 30, 2019.~~

BMS has a share repurchase program, authorized by its Board of Directors, allowing for repurchases of its shares. The share repurchase program does not obligate us to repurchase any specific number of shares, does not have a 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 ~~$1.0~~$4.4 billion as of December 31, ~~2019.~~2020. In ~~February 2020,~~January 2021, the Board of Directors approved an increase of ~~$5.0~~$2.0 billion to the share repurchase authorization for ~~BMS~~BMS’s common stock. BMS repurchased approximately 28 million shares of its common stock for $1.8 billion during the three months ended March 31, 2021. The remaining share repurchase capacity under the share repurchase program was approximately $4.6 billion as of March 31, 2021.

BMS repurchased 1.4 million shares of its common stock for $81 million ~~during~~in the ~~nine~~three months ended ~~September 30, 2020. The remaining share repurchase capacity under the share repurchase program was approximately $5.9 billion as of September 30,~~March 31, 2020.

In the fourth quarter of 2019, BMS executed accelerated share repurchase (“ASR”) agreements to repurchase an aggregate $7 billion of common stock. The ASR was funded with cash on-hand. In the fourth quarter of 2019, approximately 99 million shares of common stock (80% of the $7 billion aggregate repurchase price) were received by BMS and included in treasury stock. In the second quarter of 2020, the agreement was settled and approximately 16 million shares of common stock were received by BMS and transferred to treasury stock.

~~The Company repurchased 6.5 million shares of its common stock for $300 million in the third quarter of 2019.~~

The components of Other Comprehensive Income/(Loss)~~/Income~~ were as follows:


		2020						2019							2021						2020
Dollars in Millions	Dollars in Millions	Pretax		Tax		After Tax		Pretax		Tax		After Tax		Dollars in Millions	Pretax		Tax		After Tax		Pretax		Tax		After Tax
Three Months Ended September 30,
Three Months Ended March 31,														Three Months Ended March 31,
Derivatives qualifying as cash flow hedges:	Derivatives qualifying as cash flow hedges:													Derivatives qualifying as cash flow hedges:
Unrealized gain/(losses)	Unrealized gain/(losses)	$	(128)	$	10	$	(118)	$	63	$	(8)	$	55	Unrealized gain/(losses)	$	259	$	(11)	$	248	$	97	$	(10)	$	87
Reclassified to net earnings(a)	Reclassified to net earnings(a)	(17)		3		(14)		(20)		3		(17)		Reclassified to net earnings(a)	36		(4)		32		(20)		3		(17)
Derivatives qualifying as cash flow hedges	Derivatives qualifying as cash flow hedges	(145)		13		(132)		43		(5)		38		Derivatives qualifying as cash flow hedges	295		(15)		280		77		(7)		70

Pension and postretirement benefits:	Pension and postretirement benefits:													Pension and postretirement benefits:
Actuarial losses	Actuarial losses	(16)		3		(13)		(126)		27		(99)		Actuarial losses	21		(5)		16		8		(2)		6
Amortization(b)	Amortization(b)	9		(2)		7		12		(2)		10		Amortization(b)	9		(3)		6		9		(1)		8
Settlements(b)	Settlements(b)	3		(1)		2		1,550		(345)		1,205		Settlements(b)	1		0		1		2		0		2
Pension and postretirement benefits	Pension and postretirement benefits	(4)		0		(4)		1,436		(320)		1,116		Pension and postretirement benefits	31		(8)		23		19		(3)		16

Available-for-sale debt securities:	Available-for-sale debt securities:													Available-for-sale debt securities:

Unrealized gains/(losses)	Unrealized gains/(losses)	(4)		2		(2)		6		(2)		4		Unrealized gains/(losses)	(3)		1		(2)		2		(1)		1

Foreign currency translation	Foreign currency translation	(16)		11		(5)		10		(10)		0		Foreign currency translation	9		(15)		(6)		(110)		(6)		(116)

Other Comprehensive (Loss)/Income		$	(169)	$	26	$	(143)	$	1,495	$	(337)	$	1,158
Other Comprehensive Income/(Loss)														Other Comprehensive Income/(Loss)	$	332	$	(37)	$	295	$	(12)	$	(17)	$	(29)

Nine Months Ended September 30,
Derivatives qualifying as cash flow hedges:
Unrealized gains/(losses)		$	(65)	$	4	$	(61)	$	102	$	(12)	$	90
Reclassified to net earnings(a)		(69)		9		(60)		(76)		10		(66)
Derivatives qualifying as cash flow hedges		(134)		13		(121)		26		(2)		24

Pension and postretirement benefits:
Actuarial losses		(28)		6		(22)		(140)		30		(110)
Amortization(b)		27		(5)		22		45		(8)		37
Settlements(b)		7		(2)		5		1,643		(366)		1,277
Pension and postretirement benefits		6		(1)		5		1,548		(344)		1,204

Available-for-sale securities:
Unrealized gains		10		(2)		8		42		(2)		40
Realized gains/(losses)		(1)		0		(1)		3		0		3
Available-for-sale securities		9		(2)		7		45		(2)		43

Foreign currency translation		(81)		11		(70)		39		(11)		28

Total Other Comprehensive (Loss)/Income		$	(200)	$	21	$	(179)	$	1,658	$	(359)	$	1,299

(a)Included in Cost of products sold.

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

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


Dollars in Millions	Dollars in Millions	September 30, 2020		December 31, 2019		Dollars in Millions	March 31, 2021		December 31, 2020
Derivatives qualifying as cash flow hedges	Derivatives qualifying as cash flow hedges	$	(102)	$	19	Derivatives qualifying as cash flow hedges	$	43	$	(237)
Pension and postretirement benefits	Pension and postretirement benefits	(894)		(899)		Pension and postretirement benefits	(951)		(974)
Available-for-sale debt securities	Available-for-sale debt securities	13		6		Available-for-sale debt securities	9		11
Foreign currency translation	Foreign currency translation	(716)		(646)		Foreign currency translation	(645)		(639)
Accumulated other comprehensive loss	Accumulated other comprehensive loss	$	(1,699)	$	(1,520)	Accumulated other comprehensive loss	$	(1,544)	$	(1,839)

2419

~~Note 16. RETIREMENT BENEFITS~~

~~The net periodic benefit cost of defined benefit pension plans includes:~~

Three Months Ended September 30, Nine Months Ended September 30,
Dollars in Millions 2020 2019 2020 2019
Service cost – benefits earned during the year $ 12 $ 6 $ 36 $ 18
Interest cost on projected benefit obligation 11 20 30 101
Expected return on plan assets (26) (39) (73) (173)
Amortization of prior service credits (1) (1) (3) (3)
Amortization of net actuarial loss 12 14 33 49
Curtailments and settlements 3 1,550 7 1,643
Net periodic pension benefit cost $ 11 $ 1,550 $ 30 $ 1,635

Pension settlement charges were recognized after determining the annual lump sum payments will exceed the annual interest and service costs for certain pension plans. The charges included the acceleration of a portion of unrecognized actuarial losses. Non-current pension liabilities were $588 million at September 30, 2020 and $569 million at December 31, 2019. Defined contribution plan expense in the U.S. was approximately $70 million and $220 million for the three and nine months ended September 30, 2020 and approximately $50 million and $140 million for the three and nine months ended September 30, 2019, respectively. Comprehensive medical and group life benefits are provided for substantially all U.S. retirees electing to participate in comprehensive medical and group life plans and to a lesser extent certain benefits for non-U.S. employees. The net periodic benefit credits were not material in both periods.

As a result of the Bristol-Myers Squibb Retirement Income Plan termination in 2019, $381 million of assets held in a separate account within the Pension Trust used to fund retiree medical plan payments was reverted back to the Company, resulting in an excise tax of $76 million in the first quarter of 2020.

In December 2018, BMS announced plans to fully terminate the Plan. Pension obligations related to the Plan were to be distributed through a combination of lump sum payments to eligible Plan participants who elected such payments and through the purchase of group annuity contracts from wholly owned insurance subsidiaries of Athene Holding Ltd. (“Athene”). In the third quarter of 2019, $1.3 billion was distributed to participants who elected lump sum payments during the election window and a group annuity contract was purchased from Athene, which irrevocably assumed the obligation, for $2.4 billion for most of the remaining plan participants. These transactions resulted in a $1.5 billion non-cash pre-tax pension settlement charge in the third quarter of 2019. The remaining plan obligation of approximately $200 million was settled through the purchase of an additional group annuity contract from Athene in the fourth quarter of 2019.

Note ~~17.~~16. EMPLOYEE STOCK BENEFIT PLANS

Stock-based compensation expense was as follows:


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
Dollars in Millions	Dollars in Millions	2020		2019		2020		2019		Dollars in Millions	2021		2020
Cost of products sold	Cost of products sold	$	9	$	4	$	28	$	11	Cost of products sold	$	15	$	10
Marketing, selling and administrative	Marketing, selling and administrative	81		32		255		90		Marketing, selling and administrative	60		88
Research and development	Research and development	78		20		261		56		Research and development	70		94
Other (income)/expense, net	Other (income)/expense, net	17		0		64		0		Other (income)/expense, net	6		18
Total stock-based compensation expense	Total stock-based compensation expense	$	185	$	56	$	608	$	157	Total stock-based compensation expense	$	151	$	210

Income tax benefit(a)	Income tax benefit(a)	$	38	$	10	$	124	$	29	Income tax benefit(a)	$	31	$	46

(a) Income tax benefit excludes excess tax benefits from share-based compensation awards that were vested or exercised of $1$17 million and ~~$29~~$23 million for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and 2020, ~~and was not material for the three and nine months ended September 30, 2019.~~respectively.

The total stock-based compensation expense for the three and nine months ended September 30, 2020 includes $85 million and $306 million, respectively, related to the Celgene post-combination service period for the replacement awards and $17 million and $64 million, respectively, of accelerated vesting of the replacement awards related to the Celgene acquisition. It also includes $5 million related to CVR obligation on unvested stock awards for the nine months ended September 30, 2020.

The number of units granted and the weighted-average fair value on the grant date for the ~~nine~~three months ended ~~September 30, 2020~~March 31, 2021 were as follows:


Units in Millions	Units in Millions	Units	Weighted-Average Fair Value		Units in Millions	Units	Weighted-Average Fair Value

Restricted stock units	Restricted stock units	13.0	$	53.62	Restricted stock units	7.4	$	56.21
Market share units	Market share units	0.9	53.92		Market share units	1.0	58.04
Performance share units	Performance share units	1.4	55.61		Performance share units	1.5	59.04


Dollars in Millions	Dollars in Millions	Stock Options		Restricted Stock Units		Market Share Units		Performance Share Units		Dollars in Millions	Stock Options		Restricted Stock Units		Market Share Units		Performance Share Units
Unrecognized compensation cost	Unrecognized compensation cost	$	54	$	991	$	53	$	93	Unrecognized compensation cost	$	29	$	1,079	$	87	$	144
Expected weighted-average period in years of compensation cost to be recognized	Expected weighted-average period in years of compensation cost to be recognized	1.5		2.6		3.0		1.8		Expected weighted-average period in years of compensation cost to be recognized	1.1		2.9		3.4		2.2

Note ~~18.~~17. LEGAL PROCEEDINGS AND CONTINGENCIES

BMS and certain of its subsidiaries are involved in various lawsuits, claims, government investigations and other legal proceedings that arise in the ordinary course of business. These claims or proceedings can involve various types of parties, including governments, competitors, customers, 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. Legal proceedings that are significant or that BMS believes could become significant or material are described below.

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

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

INTELLECTUAL PROPERTY

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 Court issued an opinion ruling that the two scientists should be added as inventors to the patents. The decision was appealed to the U.S. Court of Appeals for the Federal Circuit and the Federal Circuit affirmed the District Court opinion. BMS filed a petition to reconsider the decision with the Federal Circuit en banc, which was denied in October 2020. In March 2021, BMS filed a writ of certiorari to the U.S. Supreme Court. In June 2019, Dana-Farber filed a new lawsuit in the District of Massachusetts against BMS seeking damages as a result of the Court’s decision adding the scientists as inventors. In February 2021, BMS filed a motion to dismiss the complaint.

CAR T

On October 18, 2017, the day on which the FDA approved Kite Pharma, Inc.’s (“Kite”) Yescarta* product, Juno, along with Sloan Kettering Institute for Cancer Research (“SKI”), filed a complaint against Kite in the U.S. District Court for the Central District of California. The complaint alleged that Yescarta* infringes certain claims of U.S. Patent No. 7,446,190 ~~(“the ’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. ~~No date has been scheduled~~

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 ~~an oral hearing on~~infringement in both actions.

In March 2021, Teva Limited filed a lawsuit in the ~~appeal.~~Republic of Ireland seeking revocation of the Irish apixaban composition of matter patent and related Supplementary Protection Certificate.

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 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. OnIn August 5, 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. The remaining aNDA filers have appealed to the U.S. Court of Appeals for the Federal Circuit.

Plavix* - Australia

Sanofi was notified that, in August 2007, GenRx Proprietary Limited (“GenRx”) obtained regulatory approval of an application for clopidogrel bisulfate 75mg tablets in Australia. GenRx, formerly a subsidiary of Apotex Inc., subsequently changed its name to Apotex (“GenRx-Apotex”). In August 2007, GenRx-Apotex filed an application in the Federal Court of Australia seeking revocation of Sanofi’s Australian Patent No. 597784 (Case No. NSD 1639 of 2007). Sanofi filed counterclaims of infringement and sought an injunction. On September 21, 2007, the Federal Court of Australia granted Sanofi’s injunction. A subsidiary of BMS was subsequently added as a party to the proceedings. In February 2008, a second company, Spirit Pharmaceuticals Pty. Ltd., also filed a revocation suit against the same patent. This case was consolidated with the GenRx-Apotex case. On August 12, 2008, the Federal Court of Australia held that claims of Patent No. 597784 covering clopidogrel bisulfate, hydrochloride, hydrobromide, and taurocholate salts were valid. The Federal Court also held that the process claims, pharmaceutical composition claims, and claim directed to clopidogrel and its pharmaceutically acceptable salts were invalid. BMS and Sanofi filed notices of appeal in the Full Court of the Federal Court of Australia (“Full Court”) appealing the holding of invalidity of the claim covering clopidogrel and its pharmaceutically acceptable salts, process claims, and pharmaceutical composition claims. GenRx-Apotex appealed the holding of validity of the clopidogrel bisulfate, hydrochloride, hydrobromide, and taurocholate claims. On September 29, 2009, the Full Court held all of the claims of Patent No. 597784 invalid. In March 2010, the High Court of Australia denied a request by BMS and Sanofi to hear an appeal of the Full Court decision. The case was remanded to the Federal Court for further proceedings related to damages sought by GenRx-Apotex. BMS and GenRx-Apotex settled, and the GenRx-Apotex case was dismissed. The Australian government intervened in this matter seeking maximum damages up to 449 million AUD ($~~316~~340 million), plus interest, which would be split between BMS and Sanofi, for alleged losses experienced for paying a higher price for branded Plavix* during the period when the injunction was in place. BMS and Sanofi dispute that the Australian government is entitled to any damages. A trial was concluded in September 2017. In April 2020, the Federal Court issued a decision dismissing the Australian ~~government's~~government’s claim for damages. In May 2020, the Australian government appealed the Federal Court’s ~~decision.~~decision and an appeal hearing concluded in February 2021.

Pomalyst - Canada

Celgene received a Notice of Allegation in January 2020 from Natco Pharma (Canada) Inc. (“Natco Canada”) notifying Celgene that it had filed an Abbreviated New Drug Submission (“aNDS”) with Canada’s Minister of Health with respect to certain of Celgene’s Canadian patents. Natco Canada is seeking to 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. A trial is scheduled to begin on November 15, 2021.

27Celgene 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 certain of Celgene’s Canadian patents. Natco Canada is seeking to 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. A trial is scheduled to begin in May 2022.

Celgene received two Notices of Allegation in March 2020 from Dr. Reddy’s Laboratories Ltd. (“DRL Canada”) notifying Celgene that it had filed an aNDS with Canada’s Minister of Health with respect to certain of Celgene’s Canadian patents. DRL Canada is seeking to market a generic version of Pomalyst in Canada. In response, Celgene initiated two patent infringement actions in the Federal Court of Canada. In February 2021, Celgene and DRL Canada ~~alleges that~~entered into a confidential settlement agreement and the ~~asserted patents are invalid and/or not infringed. A trial is scheduled to begin on January 17, 2022.~~cases were discontinued.

Celgene received four Notices of Allegation in February 2021 from Apotex Inc. (“Apotex”) notifying Celgene that it had filed two aNDSs with Canada’s Minister of Health with respect to certain of Celgene’s Canadian patents. Apotex is seeking to market a generic version of Pomalyst in Canada. In response, in April 2021, Celgene initiated patent infringement actions against Apotex in the Federal Court of Canada.

Pomalyst - U.S.

Beginning in 2017, Celgene received Notice letters on behalf of Teva Pharmaceuticals USA, Inc. (“Teva”); Apotex ~~Inc. (“Apotex”)~~ and Apotex Corp.; Hetero Labs Limited, Hetero Labs Limited Unit-V, Hetero Drugs Limited, Hetero USA, Inc. (collectively, “Hetero”); Eugia Pharma Specialities Limited ~~(“Eugia Pharma”)~~ and Aurobindo Pharma Ltd. (collectively, “Aurobindo”); Mylan Pharmaceuticals Inc.; and Breckenridge Pharmaceutical, Inc. (“Breckenridge”) notifying Celgene that they had filed aNDAs containing paragraph IV certifications seeking approval to market generic versions of 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 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 between April and June 2020, alleging that the patent is invalid and not infringed. The Court has consolidated these additional litigations with the previously-consolidated litigations. In September 2020, the Court granted Mylan Pharmaceuticals Inc.’s motion to ~~dismiss.~~dismiss, which decision Celgene has appealed. In ~~November~~October 2020, Breckenridge and ~~Eugia Pharma~~Aurobindo received final approval from the FDA of their respective aNDAs. ~~A trial concerning~~In November 2020, Celgene and Breckenridge entered into a confidential settlement agreement. In March 2021, Celgene and Teva entered into a confidential settlement agreement. Pursuant to terms of the ~~consolidated litigations~~confidential settlement agreements, the Court enjoined Breckenridge and Teva from infringing the asserted patents, unless and to the extent otherwise specifically authorized by Celgene and dismissed Breckenridge and Teva from the proceedings. Trial against the remaining defendants is ~~scheduled to begin on January 11, 2021, but is expected to be delayed.~~set for late 2021.

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 and that cover polymorphic forms of pomalidomide, and the companies filed ~~answer~~answers and/or counterclaims alleging that each of these patents is invalid and/or not infringed. These actions have been consolidated with the earlier-filed actions against the companies. In ~~these actions,~~April 2021, Celgene entered into a confidential settlement agreement with Apotex settling all outstanding claims in the ~~Court has ordered that the parties be ready for trial by April 15, 2021.~~litigation with Apotex.

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 consolidated with the above DRL case. The Court has not set a trial date in this consolidated action.

In February 2021, Celgene filed an additional patent infringement action in the U.S. District Court for the District of New Jersey against 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 ~~DRL;~~ Zydus Pharmaceuticals (USA) Inc. (“Zydus”); Cipla Ltd. (“Cipla”); Apotex; Sun Pharma Global FZE, Sun Pharma Global Inc., Sun Pharmaceutical Industries, Inc., and Sun Pharmaceutical Industries Limited; Hetero; Mylan Pharmaceuticals Inc., Mylan Inc., and Mylan N.V. (collectively, “Mylan”); and Aurobindo Pharma Limited, Eugia Pharma Specialities Limited, Aurobindo Pharma USA, Inc., ~~and~~ Aurolife Pharma ~~LLC;~~LLC, and Lupin Limited (“Lupin”) notifying Celgene that they had filed aNDAs containing paragraph IV certifications seeking approval to market generic versions of Revlimid 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 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. ~~Mylan has filed a motion to dismiss the District of New Jersey action, and the Court stayed the action pending resolution of a pending Federal Circuit appeal in another case.~~ No trial date has been scheduled in any of these New Jersey actions.

Celgene also filed a patent infringement action against Mylan in the U.S. District Court for the Northern District of West Virginia (the “West Virginia action”) asserting certain FDA Orange Book-listed patents. Mylan filed its answer and counterclaims alleging that the patents are invalid and/or not infringed. ~~A trial is scheduled to begin in the West Virginia action on October 4, 2021.~~

~~On September 16,~~In December 2020, Celgene ~~settled~~entered into a confidential settlement agreement with Cipla, settling all outstanding claims in the litigation with ~~DRL. Pursuant to the~~Cipla. In March 2021, Celgene entered into confidential settlement ~~Celgene has agreed to provide DRL~~agreements with ~~a license to Celgene’s patents required to manufacture~~Apotex and ~~sell certain volume-limited amounts of generic lenalidomide~~Zydus, respectively, settling all outstanding claims in the ~~United States beginning on a certain date after the March 2022 volume-limited license date previously provided to Natco. In addition, Celgene has agreed to provide DRL~~litigation with ~~a license to Celgene’s patents required to manufacture and sell an unlimited quantity of generic lenalidomide in the United States beginning no earlier than January 31, 2026.~~those parties.

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Sprycel - U.S.

In August 2019, BMS received a Notice Letter from Dr. Reddy’s Laboratories, Inc. 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. No trial date has been scheduled.

In ~~March 2020, BMS received a Notice Letter from Teva 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 an FDA Orange Book-listed monohydrate form patent expiring in 2026. In response, BMS filed a patent infringement lawsuit in the U.S. District Court for the District of New Jersey. BMS and Teva settled and the case was dismissed.

~~In May~~ 2020, BMS received a Notice Letter from Lupin 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 patent infringement actions in the U.S. District Courts for the District of New Jersey and Delaware. No trial date has been scheduled.

PRICING, SALES AND PROMOTIONAL PRACTICES LITIGATION

Plavix* State Attorneys General Lawsuits

BMS and certain Sanofi entities are defendants in consumer protection ~~and/or false advertising~~ actions brought by the attorneys general of Hawaii and New Mexico relating to the labeling, sales ~~and~~and/or promotion of Plavix*. InA 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 warranted for this matter. A trial ~~began on October 26, 2020 and~~in the New Mexico matter is ~~expected~~scheduled to ~~last until mid-November.~~begin in April 2022.

PRODUCT LIABILITY LITIGATION

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

Abilify*

BMS and Otsuka are co-defendants in product liability litigation related to Abilify*. Plaintiffs allege Abilify* caused them to engage in compulsive gambling and other impulse control disorders. There have been over 2,500 cases filed in state and federal courts and additional cases are pending in Canada. The Judicial Panel on Multidistrict Litigation consolidated the federal court cases for pretrial purposes in the U.S. District Court for the Northern District of Florida. In February 2019, BMS and Otsuka entered into a master settlement agreement establishing a proposed settlement program to resolve all Abilify* compulsivity claims filed as of January 28, 2019 in the MDL as well as various state courts, 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., ~~approximately 30~~less than 20 cases remain pending on behalf of plaintiffs, who either chose not to participate in the settlement program or filed their claims after the settlement cut-off date. There are ten cases pending in Canada (four class actions, six individual injury claims). Out of the ten cases, only ~~three~~two are active (the class actions in Quebec and Ontario and one individual injury claim). Both class actions have now been certified and will proceed ~~separately.~~separately, subject to a pending appeal of the Ontario class certification decision.

Byetta*

Amylin, a former subsidiary of BMS, and Lilly are co-defendants in product liability litigation related to Byetta*. As of ~~September 2020,~~March 2021, there are approximately 590 separate lawsuits pending on behalf of approximately 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 majority of these cases have been brought by individuals who allege personal injury sustained after using ~~Byetta~~*Byetta*, primarily pancreatic cancer, and, in some cases, claiming alleged wrongful death. The majority of cases are pending in federal court in San Diego in an MDL or in a coordinated proceeding in California Superior Court in Los Angeles (“JCCP”). In ~~November 2015,~~April 2020 the defendants’ motion for summary judgment based on federal preemption was granted in both the MDL and the JCCP. In November 2017, the Ninth Circuit reversed the MDL summary judgment order and remanded the case to the MDL. In November 2018, the California Court of Appeal reversed the state court summary judgment order and remanded those cases to the JCCP for further proceedings. Amylin hasdefendants filed a motion for summary judgment based on federal preemption and a motion for summary judgment based on the absence of general causation evidence ~~both~~in the MDL and JCCP. Both motions were ~~heard~~granted in ~~October 2020.~~March 2021 and April 2021, respectively. The orders will result in the dismissal of all claims alleging an injury of pancreatic cancer in the MDL and JCCP. Plaintiffs have appealed the MDL order and may seek appeals in the JCCP. Amylin had product liability insurance covering a substantial number of claims involving Byetta* ~~(which~~(which has been exhausted). AsBMS sold Byetta* to AstraZeneca in February 2014 as part of BMS’s global diabetes business divestiture ~~BMS sold~~ Byetta* ~~to AstraZeneca in February 2014~~ and any additional liability to Amylin with respect to Byetta* is expected to be shared with AstraZeneca.

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Onglyza*

BMS and AstraZeneca are co-defendants in product liability litigation related to Onglyza*. Plaintiffs assert claims, including claims for wrongful death, as a result of heart failure or other cardiovascular injuries they allege were caused by their use of Onglyza*. As of ~~September 2020,~~March 2021, claims are pending in state and federal court on behalf of approximately 280 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 U.S. District Court for the Eastern District of Kentucky. A significant majority of the claims are pending in the MDL. 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. BMS moved to dismiss the amended complaint. In September 2020, the Court granted BMS’s motion to dismiss with prejudice. The plaintiffs appealed the Court’s decision in October 2020.

Celgene Securities Class Action

Beginning in March 2018, ~~two~~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~~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 for the claims that survived the Court’s order. In May 2020, the plaintiff filed a motion for class certification. In June 2020, the defendants filed an opposition to the plaintiff’s motion for class certification.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.

In April 2021, the California Public Employees’ Retirement System 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 and the Schwab individual action against the same remaining defendants in those actions.

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. ~~BMS cannot provide assurances~~In March 2021, the Company finalized an agreement with the U.S. government and qui tam relator to resolve the claims asserted in the lawsuit. The Company has paid $75 million plus interest to the federal and state governments. Individual agreements will be negotiated with participating states based on the federal agreement. To the extent the Company does not finalize a settlement agreement with any state, that ~~its efforts to reach a final~~state’s share of the settlement will ~~be successful.~~revert to the Company.

HIV Medication Antitrust Lawsuits

BMS and ~~several~~two other manufacturers of HIV medications are defendants in related lawsuits pending in the Northern District of California. The lawsuits allege that the defendants’ agreements to develop and sell fixed-dose combination products for the treatment of HIV, including Atripla* and Evotaz, violate antitrust laws. The currently pending actions, ~~which are~~ asserted on behalf of indirect purchasers, were initiated in 2019 in the 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'~~plaintiffs’ theories based on the alleged payment of royalties after patent expiration. Other claims, however, remain. A trial on the indirect purchasers’ claims is scheduled for ~~February~~August 2022. In ~~addition,~~September and October 2020, two purported class actions have also been filed asserting similar claims on behalf of direct ~~purchasers were filed in September and October 2020 in~~purchasers. In March 2021, the ~~Northern District of California asserting similar claims.~~

~~Humana Litigations~~

~~On May 16, 2018, Humana, Inc. (“Humana”) filed a lawsuit against Celgene in the Pike County Circuit~~ Court dismissed one of the ~~Commonwealth~~direct purchaser cases and limited the claims of ~~Kentucky. Humana’s~~the remaining direct purchaser case to those arising in 2016 or later. However, the court gave plaintiffs leave to amend their complaints, and one plaintiff filed an amended complaint ~~alleges Celgene engaged in unlawful off-label marketing in connection with sales of~~ ~~Thalomid~~ ~~and~~ ~~Revlimid~~ ~~and asserts~~on March 16, 2021. A trial on the direct purchasers’ claims against Celgene for fraud, breach of contract, negligent misrepresentation, unjust enrichment and violations of New Jersey’s Racketeer Influenced and Corrupt Organizations Act. The complaint seeks, among other things, treble and punitive damages, injunctive relief and attorneys’ fees and costs. In April 2019, Celgene filed a motion to dismiss Humana’s complaint, which the Court denied in January 2020. No trial date has not been 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 complaint seeks damages for HPI’s breach as well as a declaratory judgment. In September 2020, HPI filed a motion to dismiss Celgene’s complaint.

~~On March 1, 2019, Humana filed~~In February 2021, BMS and two other manufacturers of HIV medications were sued by the Attorney General of the State of New Mexico in a ~~separate lawsuit against Celgene~~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. The case is currently pending in the ~~U.S.~~United States District Court for the District of New ~~Jersey. Humana’s complaint alleges that Celgene violated various antitrust, consumer protection, and unfair competition laws to delay or prevent generic competition~~Mexico. No schedule has been set for the case.

Thalomid and Revlimid brand drugs, including (a) allegedly refusing to sell samples of products to generic manufacturers for purposes of bioequivalence testing intended to be included in aNDAs for approval to market generic versions of these products; (b) allegedly bringing unjustified patent infringement lawsuits, procuring invalid patents, and/or entering into anticompetitive patent settlements; (c) allegedly securing an exclusive supply contract for supply of thalidomide active pharmaceutical ingredient. The complaint purports to assert claims on behalf of Humana and its subsidiaries in several capacities, including as a direct purchaser and as an indirect purchaser, and seeks, among other things, treble and punitive damages, injunctive relief and attorneys’ fees and costs. Celgene filed a motion to dismiss Humana’s complaint, and the Court has stayed discovery pending adjudication of that motion. No trial date has been scheduled.

~~Thalomid~~ ~~and~~ ~~Revlimid~~ ~~Antitrust Class Action Litigation and Related Proceedings~~Litigations

Beginning in November 2014, certain putative class action lawsuits were filed against Celgene in the U.S. District Court for the District of New Jersey alleging that Celgene violated various antitrust, consumer protection, and unfair competition laws by (a) allegedly securing an exclusive supply contract for the alleged purpose of preventing a generic manufacturer from securing its own supply of thalidomide active pharmaceutical ingredient, (b) allegedly refusing to sell samples of Thalomid and Revlimid brand drugs to various generic manufacturers for the alleged purpose of bioequivalence testing necessary for aNDAs to be submitted to the FDA for approval to market generic versions of these products, (c) allegedly bringing unjustified patent infringement lawsuits in order to allegedly delay approval for proposed generic versions of Thalomid and Revlimid, and/or (d) allegedly entering into settlements of patent infringement lawsuits with certain generic manufacturers that allegedly have had anticompetitive effects. The plaintiffs, on behalf of themselves and putative classes of third-party payers, ~~are seeking~~sought injunctive relief and damages. The various lawsuits were consolidated into a master action for all purposes. In October 2017, the plaintiffs filed a motion for certification of two damages classes under the laws of thirteen states and the District of Columbia and a nationwide injunction class. Celgene filed an opposition to the plaintiffs’ motion and a motion for judgment on the pleadings dismissing all state law claims where the plaintiffs no longer seek to represent a class. In October 2018, the Court denied the plaintiffs’ motion for class certification and Celgene’s motion for judgment on the pleadings. In December 2018, the plaintiffs filed a new motion for class certification, which Celgene opposed. In July 2019, the parties reached a settlement under which all the putative class plaintiff claims would be dismissed with prejudice. In December 2019, after certain third-party payors who were members of the settlement class refused to release their potential claims and participate in the settlement, Celgene exercised its right to terminate the settlement agreement. In March 2020, Celgene reached a ~~revised~~ settlement with the class plaintiffs. ~~In May 2020, the Court preliminarily approved the settlement.~~ In October 2020, the Court entered a final order approving the settlement and dismissed the matter. That settlement does not resolve the claims of certain entities that opted out of the ~~first~~ settlement.

In May 2018, Humana, Inc. (“Humana”) filed a lawsuit against Celgene in the Pike County Circuit Court of 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 Jersey’s Racketeer Influenced and Corrupt Organizations Act. The complaint seeks, among other things, treble and punitive damages, injunctive relief and attorneys’ fees and costs. In April 2019, Celgene filed a motion to dismiss Humana’s complaint, which the 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 direct purchaser and as an indirect purchaser, and seeks, among other things, treble and punitive damages, injunctive relief and attorneys’ fees and costs. Celgene filed a motion to dismiss Humana’s complaint, and the Court has stayed discovery pending adjudication of that motion. No trial date has been scheduled.

In March 2020, United HealthCare Services, Inc. (“UHS”), affiliates of which opted out of the 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.~~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. ~~Motions~~In December 2020, Celgene’s motion to transfer the action to the District of New Jersey was granted and ~~dismiss this matter are pending.~~the case is now pending in that Court.

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 complaint seeks damages for HPI’s breach as well as a declaratory judgment. In September 2020, HPI filed a motion to dismiss Celgene’s complaint, which was denied in February 2021. No trial date has been scheduled.

In July 2020, Blue Cross Blue Shield Association (“BCBSA”) sued Celgene and BMS on behalf of the 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. A motion to transfer this matter to the District of New Jersey is pending.

In August 2020, Health Care Service Corporation (“HCSC”), BCBSM Inc., d/b/a Blue Cross and Blue Shield of Minnesota, and Blue Cross and Blue Shield of Florida Inc., d/b/a Florida Blue, sued Celgene and BMS in the state courts of Minnesota. 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. OnIn September ~~29,~~ 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 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.

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. Celgene’s and BMS’s response to the complaint is due in July 2021.

GOVERNMENT INVESTIGATIONS

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

ENVIRONMENTAL PROCEEDINGS

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

CERCLA Matters

With respect to CERCLA matters for which BMS is responsible under various state, federal and foreign laws, BMS typically estimates potential costs based on information obtained from the U.S. Environmental Protection Agency, or counterpart state or foreign agency and/or studies prepared by independent consultants, including the total estimated costs for the site and the expected cost-sharing, if any, with other “potentially responsible parties,” and BMS accrues liabilities when they are probable and reasonably estimable. BMS estimated its share of future costs for these sites to be ~~$76.6~~$77 million at ~~September 30, 2020,~~March 31, 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.

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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 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 ~~vision is to be the world’s leading~~focus as a biopharmaceutical company ~~that transforms patients’ lives through science~~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. ~~We continue~~Our four strategic priorities are to ~~advance~~drive enterprise performance, maximize the ~~next wave~~value of ~~innovative medicines by investing significantly in~~our commercial portfolio, ensure the long-term sustainability of our pipeline ~~both internally~~through combined internal and ~~through business development activities.~~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 our ~~2019~~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.

Our pipeline advanced 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 by beginning construction on a new state-of-the-art cell therapy manufacturing facility in Devens, Massachusetts. We ~~completed~~continue to expand our portfolio in immunology with an important opportunity for deucravacitinib, our TYK2 inhibitor, including positive results from our POETYK PSO-2 trial. In the ~~Celgene transaction on November 20, 2019. Commencing from~~cardiovascular space, with the acquisition of MyoKardia in 2020, we bolstered our leading cardiovascular franchise in adding mavacamten, which is a potentially transformative new medicine with significant commercial potential and a promising pipeline of candidates. In March 2021, the FDA accepted the NDA for mavacamten for patients with symptomatic oHCM with an assigned PDUFA goal date ~~our consolidated financial statements include the assets, liabilities, operating results and cash flows~~ of ~~Celgene. On October 3, 2020,~~January 28, 2022.

In February 2021, we entered into ~~a definitive~~an agreement ~~to acquire MyoKardia for approximately $13.1 billion in cash. We expect that our acquisition of Celgene and the planned MyoKardia acquisition will further position~~with Rockefeller University, granting us as a leading biopharmaceutical company, expanding our oncology, hematology, immunology and cardiovascular portfolios with several near-term assets and additional external partnerships. Refer to “—Acquisitions, Divestitures, Licensing and Collaboration Arrangements” for further information.

~~The COVID-19 pandemic is resulting in significant risks and disruptions to the health and welfare of~~ the global ~~population~~exclusive license to develop, manufacture and ~~economy. Although~~commercialize Rockefeller’s novel monoclonal antibody duo treatment that neutralizes the ~~pandemic has not had a significant impact on our results~~SARS-CoV-2 virus for therapy, or in certain patients prevention, of ~~operations, it remains difficult~~COVID-19. Phase I clinical trials 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~~dosing for IV and ~~cash flows. The impact will depend on future developments such as the ultimate duration~~subcutaneous formulations 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. Refer to “—COVID-19 and Market Factors” for further information.~~assess safety were initiated by Rockefeller in mid-January.

Our revenues increased by ~~73%~~3% for the ~~nine months ended September 30, 2020 as a result of~~first quarter 2021 due to Eliquis, new product launchesand foreign exchange, partially offset by lower demand for established brands. The impact in the ~~Celgene acquisition, which~~change in buying patterns resulting from the COVID-19 pandemic contributed ~~$12.9 billion~~approximately $500 million of revenues ~~or 71% of~~in the ~~growth, and higher demand for~~ ~~Eliquis~~.first quarter 2020. The ~~$2.31 decrease~~$1.23 change in GAAP EPS primarily resulted from the ~~Celgene acquisition including (i) amortization of acquired intangible assets, (ii) the~~ unwinding of inventory fair value adjustments, contingent value rights and ~~(iii) tax charges resulting from an internal transfer of certain intangible assets and the~~ ~~Otezla~~* divestiture, partially offset by higher revenues.equity investment fair value adjustments. After adjusting for specified items, non-GAAP EPS increased ~~$1.52 as a result of the Celgene acquisition.~~$0.02.


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
Dollars in Millions, except per share data	Dollars in Millions, except per share data	2020		2019		2020		2019		Dollars in Millions, except per share data	2021		2020
Total Revenues	Total Revenues	$	10,540	$	6,007	$	31,450	$	18,200	Total Revenues	$	11,073	$	10,781

Diluted Earnings Per Share
Diluted Earnings/(Loss) Per Share										Diluted Earnings/(Loss) Per Share
GAAP	GAAP	$	0.82	$	0.83	$	0.44	$	2.75	GAAP	$	0.89	$	(0.34)
Non-GAAP	Non-GAAP	1.63		1.17		4.98		3.46		Non-GAAP	1.74		1.72

Our non-GAAP financial measures, including non-GAAP earnings and related EPS information, are adjusted to exclude specified items 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.”

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Economic and Market Factors

COVID-19

~~The~~In December 2019, COVID-19 emerged and subsequently expanded to a pandemic, ~~continues to affect global healthcare systems as well as major economic~~resulting in international, federal, state and financial markets. Virtually all industries are facing challenges associated with the economic conditions resulting from efforts to address this pandemic. For example, many entities in certain industries have seen sharp declines in revenues due to regulatorylocal public health and organizational mandates (e.g., “shelter in place” mandates, non-essential business and school closures) and voluntary changes in consumer behavior (e.g., “physical distancing”). Many entities continue to experience conditions often associated with a sudden and severe economic downturn. Such conditions may include financial market volatility and erosion of market value, deteriorating credit, liquidity concerns, further increases in government intervention, increasing unemployment, broad declines in consumer discretionary spending, increasing inventory levels, reductions in production because of decreased demand and supply constraints, layoffs and furloughs and other restructuring activities.

We continue to monitor the impact on our business resulting from wider restrictions in select states and non-U.S. countries. This is a dynamically changing environment and we continue to react to outbreaks throughout the world by re-enforcing our directives to keep our workforce safe. If infection rates continue to increase, these events could negatively affect our planned recovery, pressuring demand from less patient visits and channel mix if unemployment data trends unfavorably.

We have not incurred and do not anticipate disruptions to the supply of our medicines for patients due to the COVID-19 pandemic. All of our internal manufacturing facilities and key contract manufacturers are operating with proper measures taken to help ensure employee safety. We have increased the number of our lab workers where it is safe to do so. We have implementedgovernmental authorities taking a number of ~~measures~~actions to ~~protect~~limit the ~~health~~spread of COVID-19 and safety of our workforce including, where needed, a mandatory work-from-home policy for our global workforce who can perform their jobs from home as well as restrictions on business travel, and workplace and in-person meetings. Field-based personneladdress material disruptions in the U.S. and ~~certain other markets have begun in-person customer interactions in healthcare settings where it is safe to do so and approved by~~global economy. Against this background, we benefited from the government. The remote engagement model has continued to support healthcare professionals, patient care and access to our medicines. Although certain field-based sales teams have begun in person engagement in selected states and non-U.S. regions, the majority of interactions remain remote.

The situation remains dynamic and challenging to assess the potential impact on our operations such as the ability and willingness of patients to access treatment centers or obtain a prescription and changes in prescribing patterns that may potentially affect our operations in the long-term. Certain changes in buying patterns have occurred including payers implementing policies to encourage larger prescription sizes and earlier refills to help patients avoid trips to the pharmacy. However, fewer patient office visits are resulting in lower than previously expected new patient starts. We estimate these factors have resulted in a negative impact of ~~approximately 1% on year-to-date revenues.~~

~~The timing of specific product launches depends on the relevant facts and circumstances for each situation. For example, we delayed the commercialization of~~ ~~Zeposia~~ ~~to June based on the best health interest of our patients, customers and workforce. In contrast,~~ ~~Reblozyl~~ ~~wasavailable for MDS patients following its approval for this additional indication in April 2020 and~~ ~~Onureg~~ was available for patients with AML in September 2020. Our expanded U.S. patient assistance programs provided certain covered BMS medicines free to eligible patients that lost employment and health insurance due to COVID-19. It is uncertain what the aggregate impact of the above factors and potential changes in channel mix will have on our revenues and expenses during 2020.

~~Global clinical studies continued to recover through September driven in large part by decreased~~ COVID-19 incidence, clinical trial sites beginning to permit on-site visits, as well as greater remote access to electronic medical records at sites in the U.S. However, certain delays have occurred due to slower enrollment. Patient enrollment for certain new clinical studies and ongoing studies at new sites are carefully being started when the safety of study participants, our employees and staff at clinical trial sites, regulatory compliance and scientific integrity of trial data can be assured. We expect many new studies to start through the first quarter of 2021 following the completion of feasibility assessments, rigorous planning and selected protocol simplifications. Previously suspended research and early development activities performed in laboratories recommenced in all major sites in the U.S. although close monitoring of the situation continues.

The COVID-19 pandemic has increased the volatility of the financial markets, foreign currency exchanges and interest rates. Although we incurred downward adjustments to our equity investment fair valuesdemand in the first quarter of 2020 but experienced sales channel inventory workdowns for our products during second quarter of 2020. We began to note improvement in the ~~fair values have subsequently recovered. Lower interest rates~~demand for certain products during the third and fourth quarters in 2020, but continue to experience impacts on revenues from COVID-19 primarily due to lower new patient starts and patient visits. Although the ~~strengthening~~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. We expect that the pandemic will continue to create supply chain challenges. In particular, we expect that the availability of certain raw materials and components will continue to be constrained and affected by government orders that require prioritization for COVID-19 vaccines and therapeutics. 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. ~~Dollar with certain currencies have not had a material impact~~and global economies, customer behavior changes and timing for resumption to our operations. We also assigned a value of approximately $64 billion to intangible assets obtained in the Celgene acquisition that closed in November 2019. Significant charges might occur in future periods due to a decline in previously expected cash flows as a direct or indirect result of the pandemic. This may occur due to delays in the enrollment or timely completion of clinical programs, FDA site inspections and other interactions with regulatory bodies in general, regulatory approvals, launches of newly approved products or lower demand in general.normal operations, among others. See risk factor on the Company’s risk factors resulting from the COVID-19 pandemic included under “Part ~~II—~~I—Item 1A. Risk Factors—The COVID-19 pandemic is affecting our business and could have a material adverse effect on ~~us.”~~us” in our 2020 Form 10-K.

~~Contingent Value Right Update~~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 the health and safety of our workforce and our communities while ensuring uninterrupted supply of medicines to patients and building on our competitive advantage.

•Our manufacturing sites have remained open throughout the pandemic supported by on site personnel. We have ~~filed BLAs for liso-cel~~taken a thoughtful and ~~ide-cel,~~phased approach to bringing the ~~two remaining assets underlying~~rest of our workforce back to our 250 plus sites around the ~~CVRs that we issued in connection with~~world and into the ~~Celgene transaction that have not been approved~~field, guided by the ~~FDA. The applications~~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

•Our timelines and circumstances have varied across the globe. We are ~~under review by~~monitoring local conditions and government direction closely and adjusting our plans as appropriate acting in a nimble and flexible manner.

•We continue to take significant measures to protect the ~~FDA. The third CVR asset,~~ ~~Zeposia, was approved earlier this year. Liso-cel has~~safety of our colleagues on site, including providing protective equipment, ensuring physical distancing, enhanced cleaning and creating a PDUFA date of November 16, 2020 and ide-cel has a PDUFA date of March 27, 2021. Unless the FDA approves liso-cel for the treatment of relapsed-refractory diffuse large B cell lymphoma in humans by December 31, 2020 and ide-cel for the treatment of relapsed/refractory multiple myeloma in human by March 31, 2021, no payment will be made under the CVRs and the CVRs will expire valueless. The FDA has informed us that inspections of two manufacturing facilities are required before they can issue a decision on the liso-cel application. One of those inspections has occurred; the other has not yet been scheduled. We do not believe that the scheduling of the second site inspection is dependent on the outcome of the first site’s inspection, as they are independent facilities. See risk factor on the Company’s risk factors resulting from the COVID-19 pandemic included under “Part II—Item 1A. Risk Factors— It is possible that the COVID-19 pandemic could delay the timing of the FDA’s approval decisions for liso-cel and ide-cel, which could have a material adverse effect on the CVRs that we issued in connection with the Celgene transaction.”robust COVID website to assist our workforce.

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 booked alternative means for moving our raw materials and products to our markets and clinical sites over the past months. As a result of these efforts, we have not seen any disruption in our clinical or commercial supply chain due to the pandemic.

•Our customer-facing personnel are employing a combination of in-person and remote interactions to ensure continued support for healthcare professionals, patient care, and access to our medicines across our global markets. The balance between in-person and remote engagement is varying market to market based on local conditions and government direction.

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 our 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. 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, operating cash flow, liquidity and financial flexibility. For example, in ~~July and September~~November 2020 the U.S. federal government issued ~~executive orders~~regulations regarding U.S. drug prices and payment for pharmaceutical products, including ~~orders~~regulations that: (1) ~~direct the U.S. Secretary of Health and Human Services to establish demonstration projects to test whether a payment model that~~ would ~~link payments~~reduce physician reimbursement for certain Medicare Part B drugs administered in doctors’ offices or hospitals ~~and certain Medicare Part D drugs sold at pharmacies~~ to a “most favored nation price” drawn from the lowest price paid by ~~“economically comparable”~~certain countries in the Organisation for Economic Co-operation and Development, ~~would reduce costs and improve outcomes,~~ which would apply to many cancer medications; (2) would authorize states ~~drug wholesalers~~ and ~~pharmacies~~private parties to develop and implement programs to import certain ~~FDA-approved~~prescription drugs from Canada ~~and other unspecified foreign countries~~ and sell them in the U.S.; and (3) would reform the use of rebates in Medicare ~~rebate system;~~Part D. The outcome of these regulations remains uncertain as a result of ongoing litigation and (4) would mandate discounts provided to certain hospitals for insulin and EpiPens to be passed on to patients. Each of the executive orders will require additional rulemaking or implementation processes.other factors. See risk factor on the Company’s risk factors on the executive orders included under “Part ~~II—~~I—Item 1A. Risk Factors—~~U.S. executive orders on biopharmaceutical~~Increased pricing pressure and other ~~potential initiatives by~~restrictions in the U.S. ~~federal government~~and abroad continue to ~~implement measures to regulate drug pricing in the future could adversely~~negatively affect our ~~business.”~~revenues and profit margins” in our 2020 Form 10-K.

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.

The UK departed from the EU on January 31, 2020. The departure began a transition period that is set to end on December 31, 2020, during which the UK and the EU will negotiate their future relationship. Similar to other companies in our industry, certain regulatory, trade, labor and other aspects of our business will likely be affected during the transition period and over time. However, we currently do not believe that these matters and other related financial effects will have a material impact on our consolidated results of operations, financial position or liquidity. Our sales in the UK represent less than 3% of our total revenues. See “Item 1A. Risk Factors—Adverse changes in U.S. and global economic and political conditions could adversely affect our profitability” in our 2019 Form 10-K for more information on the impact on the Company of the exit of the UK from the EU.

Significant Product and Pipeline Approvals

The following is a summary of the significant approvals received in ~~2020:~~2021:


Product			Date			Approval


~~Opdivo+Yervoy~~Opdivo			~~October 2020~~April 2021			FDA approval of Opdivo+~~Yervoy~~ in combination with chemotherapy for ~~the first-line treatment of adult~~ patients with ~~unresectable MPM.~~


~~Onureg~~			~~September 2020~~			~~FDA approval~~advanced or metastatic gastric cancer, gastroesophageal junction cancer, and esophageal adenocarcinoma, regardless of ~~Onureg~~ (azacitidine) for the 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 who are not able to complete intensive curative therapy.


~~Reblozyl~~			~~June 2020~~			~~EC approval of~~ ~~Reblozyl~~ for the treatment of adult patients with transfusion-dependent anemia due to very low-, low- and intermediate-risk MDS with ring sideroblasts, who had an unsatisfactory response or are ineligible for erythropoietin-based therapy, or beta thalassemia.PD-L1 expression status.


Opdivo			~~June 2020~~April 2021			~~FDA~~EC approval of Opdivo in combination with Cabometyx* for the first-line treatment of patients with ~~unresectable~~ advanced ~~recurrent or metastic ESCC after prior fluoropyrimidine- and platinum-based chemotherapy.~~RCC.


~~Zeposia~~Abecma			~~May 2020~~March 2021			ECFDA approval of ~~Zeposia~~Abecma (idecabtagene vicleucel; ide-cel) for the treatment of adult patients with ~~RRMS with active disease as defined by clinical~~relapsed or ~~imaging features.~~refractory multiple myeloma after four or more prior lines of therapy, including an immunomodulatory agent, a proteasome inhibitor, and an anti-CD38 monoclonal antibody.


~~Opdivo+Yervoy~~Breyanzi			~~May 2020~~March 2021			~~FDA~~Announced Japan’s Ministry of Health, Labour and Welfare approval of ~~Opdivo~~+~~Yervoy~~Breyanzi ~~given with two cycles of platinum-doublet chemotherapy~~(lisocabtagene maraleucel: liso-cel) for the ~~first-line~~ treatment of ~~adult~~ patients with ~~metastatic~~relapsed or ~~recurrent NSCLC with no EGFR~~refractory large B-cell lymphoma1 and relapsed or ~~ALK genomic tumor aberrations. The therapy is approved for patients with squamous or non-squamous disease and regardless of PD-L1 expression.~~refractory follicular lymphoma.


~~Opdivo+Yervoy~~Inrebic			~~May 2020~~February 2021			~~FDA~~EC approval of ~~Opdivo~~+~~Yervoy~~Inrebic for the ~~first-line~~ treatment of disease-related splenomegaly or symptoms in adult patients with ~~metastatic NSCLC whose tumors express PD-L1 (≥1%)~~primary myelofibrosis, post-polycythaemia vera myelofibrosis or post-essential thrombocythaemia myelofibrosis, who are Janus Associated Kinase inhibitor naïve or have been treated with ~~no EGFR or ALK genomic tumor aberrations.~~ruxolitinib.


~~Pomalyst~~Breyanzi			~~May 2020~~February 2021			FDA approval of ~~Pomalyst~~Breyanzi (lisocabtagene maraleucel; liso-cel) for the treatment of adult patients with ~~AIDS-related Kaposi sarcoma whose disease has become resistant to highly active antiretroviral therapy,~~relapsed or ~~in patients with Kaposi sarcoma who are HIV-negative.~~refractory large B-cell lymphoma after two or more lines of systemic therapy.


~~Reblozyl~~Opdivo			~~April 2020~~			~~FDA approval of~~ ~~Reblozyl~~ ~~for the treatment of anemia failing an erythropoiesis stimulating agent in adult patients with very low- to intermediate-risk MDS who have ring sideroblasts and require RBC transfusions.~~


~~Zeposia~~			~~March 2020~~			~~FDA approval of~~ ~~Zeposia~~ ~~(ozanimod) for the treatment of adults with RMS, including clinically isolated syndrome, relapsing-remitting disease, and active secondary progressive disease.~~


~~Opdivo+Yervoy~~			~~March 2020~~January 2021			FDA approval of Opdivo+ in combination with ~~Yervoy~~Cabometyx ~~combination~~* for the first-line treatment of ~~HCC in~~ patients ~~who have been previously treated~~ with ~~sorafenib.~~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. ~~It is possible one or both indications could be withdrawn~~On December 29, 2020, in consultation with the FDA, we made the decision to withdraw the Opdivo indication in the third-line treatment of SCLC from the ~~label.~~U.S. market. The second-line treatment of HCC is being reviewed by the FDA and will be discussed at an FDA Oncology Drug Advisory Committee meeting on April 29, 2021.

Refer to “—Product and Pipeline Developments” for all of the developments in our marketed products and late-stage pipeline in ~~2020.~~2021.

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

~~Acquisitions, divestitures,~~Divestitures, licensing and ~~collaboration~~other arrangements allow us to focus our resources behind our growth opportunities that drive the greatest long-term value. ~~Significant~~There were no significant transactions entered into in ~~2020 are summarized below.~~2021. Refer to “Item 1. Financial Statements—Note ~~3. Alliances” and “—Note~~ 4. ~~Acquisitions,~~ Divestitures, Licensing and Other Arrangements” for further information. ~~Refer to “—Financial Position, Liquidity and Capital Resources” for a discussion of our financing arrangements in connection with the planned MyoKardia acquisition.~~

~~MyoKardia~~ - In the fourth quarter of 2020, we entered into a definitive merger agreement under which we will acquire MyoKardia, a clinical-stage biopharmaceutical company pioneering a precision medicine approach to discover, develop and commercialize targeted therapies for the treatment of serious cardiovascular diseases. The acquisition will provide us with rights to MyoKardia’s lead asset, mavacamten, a potential first-in-class cardiovascular medicine for the treatment of obstructive hypertrophic cardiomyopathy that has completed Phase III development with an anticipated NDA submission in the first quarter of 2021.

~~Dragonfly~~ ~~- In the fourth quarter of 2020, we obtained a global exclusive license to Dragonfly’s interleukin-12 (IL-12) investigational immunotherapy program, including its extended half-life cytokine DF6002.~~

In the third quarter of 2020, we entered into a research collaboration and license agreement with Dragonfly. We will leverage Dragonfly’s proprietary technology to develop therapeutics in multiple sclerosis and neuroinflammation. Dragonfly will lead research and discovery activities on three targets. We will have the right to opt-in at the drug candidate stage and obtain an exclusive, global license to develop and commercialize therapeutics discovered or invented by Dragonfly against the targets.

~~Forbius~~ - In the third quarter of 2020, we acquired all of the outstanding shares of Forbius, a privately held, clinical-stage protein engineering company that designs and develops biotherapeutics for the treatment of cancer and fibrotic diseases. The acquisition provides us with full rights to Forbius’s TGF-beta program, including the program’s lead investigational asset, AVID200, which is in Phase I development.

~~Repare~~ - In the second quarter of 2020, we entered into a global collaboration and license agreement with Repare Therapeutics Inc., a precision oncology company pioneering synthetic lethality to develop novel therapeutics that target specific vulnerabilities of tumors in genetically defined patient populations. We will leverage Repare’s proprietary, CRISPR-enabled genome-wide synthetic lethal target discovery platform to jointly identify multiple synthetic lethal precision oncology targets for drug candidates. Repare will lead all target identification and validation activities. We will have the right to opt-in at the drug candidate stage and obtain an exclusive, global license to develop and commercialize therapeutics discovered by Repare against the targets.

3730

RESULTS OF OPERATIONS

Regional Revenues

The composition of the changes in revenues was as follows:


		Three Months Ended September 30,								Nine Months Ended September 30,									Three Months Ended March 31,
Dollars in Millions	Dollars in Millions	2020		2019		% Change		Foreign Exchange(b)		2020		2019		% Change		Foreign Exchange(b)		Dollars in Millions	2021		2020		% Change		Foreign Exchange(b)
United States	United States	$	6,542	$	3,472	88	%	—		$	19,795	$	10,588	87	%	—		United States	$	7,010	$	6,766	4	%	—
Europe	Europe	2,453		1,445		70	%	4	%	7,156		4,416		62	%	(1)	%	Europe	2,553		2,567		(1)	%	8	%
Rest of the World	Rest of the World	1,361		976		39	%	(3)	%	4,030		2,838		42	%	(4)	%	Rest of the World	1,346		1,335		1	%	2	%
Other(a)	Other(a)	184		114		61	%	N/A		469		358		31	%	N/A		Other(a)	164		113		45	%	N/A
Total	Total	$	10,540	$	6,007	75	%	—		$	31,450	$	18,200	73	%	(1)	%	Total	$	11,073	$	10,781	3	%	2	%

(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~~first quarter ~~2020 and year-to-date were impacted by~~ 2021 increased due to~~Revlimid~~ Eliquis and ~~other Celgene products ($3.0 billion and $8.8 billion, respectively), which contributed 88% and 83%, respectively,~~new product launches, partially offset by lower demand for Opdivo. The positive impact from change in buying patterns resulting from the COVID-19 pandemic was approximately $300 million of revenues in the ~~growth.~~first quarter 2020. Average net selling prices ~~decreased 1%~~increased 2% in the ~~third~~first quarter ~~2020 and increased 2% year-to-date.~~2021.

Europe

•Europe revenues for the ~~third~~first quarter 2020 and year-to-date were impacted by Celgene products ($908 million and $2.7 billion, respectively), which contributed 63% and 61%, respectively, of the growth. Excluding the impact of Celgene and foreign exchange, Europe revenues increased by 3% in the third quarter 2020 and 2% year-to-date primarily2021 decreased due to ~~higher demand for~~ ~~Eliquis, partially offset by~~ lower demand for established brands, the positive impact from the change in buying patterns resulting from the COVID-19 pandemic in the first quarter 2020 and lower average net selling prices, ~~for both periods.~~partially offset by foreign exchange.

Rest of the World

•Rest of the World revenues for the ~~third~~first quarter 2020 and year-to-date were impacted by Celgene products ($474 million and $1.4 billion, respectively), which contributed approximately 48% and 50%, respectively, of the growth. Excluding the impact of Celgene and2021 increased due to foreign exchange ~~Rest of World revenues decreased 6%~~and higher demand for ~~the third quarter 2020 and 4% year-to-date primarily due to~~Pomalyst/Imnovid, partially offset by lower demand for established brands and ~~lower average net selling prices for both periods.~~the positive impact from the change in buying patterns resulting from the COVID-19 pandemic in the first quarter 2020.

No single country outside the U.S. contributed more than 10% of total revenues during the ~~nine~~three months ended ~~September 30, 2020~~March 31, 2021 or ~~2019.~~2020. Our business is typically not seasonal.

3831

GTN Adjustments

The reconciliation of gross product sales to net product sales by each significant category of GTN adjustments was as follows:


		Three Months Ended September 30,								Nine Months Ended September 30,									Three Months Ended March 31,
Dollars in Millions	Dollars in Millions	2020			2019			% Change		2020			2019			% Change		Dollars in Millions	2021			2020			% Change
Gross product sales	Gross product sales	$	15,211		$	8,884		71	%	$	43,685		$	25,697		70	%	Gross product sales	$	15,559		$	14,686		6	%
GTN adjustments	GTN adjustments																	GTN adjustments
Charge-backs and cash discounts	Charge-backs and cash discounts	(1,440)			(927)			55	%	(4,072)			(2,591)			57	%	Charge-backs and cash discounts	(1,586)			(1,340)			18	%
Medicaid and Medicare rebates	Medicaid and Medicare rebates	(2,146)			(1,362)			58	%	(5,126)			(3,252)			58	%	Medicaid and Medicare rebates	(1,718)			(1,498)			15	%
Other rebates, returns, discounts and adjustments	Other rebates, returns, discounts and adjustments	(1,428)			(827)			73	%	(3,932)			(2,342)			68	%	Other rebates, returns, discounts and adjustments	(1,457)			(1,307)			11	%
Total GTN adjustments	Total GTN adjustments	(5,014)			(3,116)			61	%	(13,130)			(8,185)			60	%	Total GTN adjustments	(4,761)			(4,145)			15	%
Net product sales	Net product sales	$	10,197		$	5,768		77	%	$	30,555		$	17,512		74	%	Net product sales	$	10,798		$	10,541		2	%

GTN adjustments percentage	GTN adjustments percentage	33		%	35		%	(2)	%	30		%	32		%	(2)	%	GTN adjustments percentage	30		%	28		%	2	%
U.S.	U.S.	39		%	44		%	(5)	%	36		%	40		%	(4)	%	U.S.	36		%	34		%	2	%
Non-U.S.	Non-U.S.	18		%	16		%	2	%	16		%	15		%	1	%	Non-U.S.	17		%	14		%	3	%

Reductions to provisions for product sales made in prior periods resulting from changes in estimates were ~~$91~~$217 million and ~~$139~~$72 million for the ~~nine~~three months ended ~~September 30,~~March 31, 2021 and 2020, ~~and 2019,~~ 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 or legislative discounts and rebates. U.S. GTN adjustments percentage ~~decreased~~increased primarily due to ~~the addition of Celgene hematology brands,~~higher government channel mix, which ~~have lower GTN adjustment percentages, partially offset by~~has higher ~~U.S.~~ ~~Eliquis~~ ~~gross product sales, which have higher U.S.~~ GTN adjustment percentages.

3932

Product Revenues


		Three Months Ended September 30,						Nine Months Ended September 30,							Three Months Ended March 31,
Dollars in Millions	Dollars in Millions	2020		2019		% Change		2020		2019		% Change		Dollars in Millions	2021		2020		% Change
Prioritized Brands	Prioritized Brands													Prioritized Brands
Revlimid	Revlimid	$	3,027	$	—	N/A		$	8,826	$	—	N/A		Revlimid	$	2,944	$	2,915	1	%
U.S.	U.S.	2,080		—		N/A		6,094		—		N/A		U.S.	1,958		1,966		—
Non-U.S.	Non-U.S.	947		—		N/A		2,732		—		N/A		Non-U.S.	986		949		4	%

Eliquis	Eliquis	2,095		1,928		9	%	6,899		5,895		17	%	Eliquis	2,886		2,641		9	%
U.S.	U.S.	1,118		1,124		(1)	%	4,258		3,599		18	%	U.S.	1,923		1,777		8	%
Non-U.S.	Non-U.S.	977		804		22	%	2,641		2,296		15	%	Non-U.S.	963		864		11	%

Opdivo	Opdivo	1,780		1,817		(2)	%	5,199		5,441		(4)	%	Opdivo	1,720		1,766		(3)	%
U.S.	U.S.	1,018		1,088		(6)	%	2,982		3,324		(10)	%	U.S.	944		1,008		(6)	%
Non-U.S.	Non-U.S.	762		729		5	%	2,217		2,117		5	%	Non-U.S.	776		758		2	%

Orencia	Orencia	826		767		8	%	2,290		2,185		5	%	Orencia	758		714		6	%
U.S.	U.S.	588		554		6	%	1,642		1,569		5	%	U.S.	536		500		7	%
Non-U.S.	Non-U.S.	238		213		12	%	648		616		5	%	Non-U.S.	222		214		4	%

Pomalyst/Imnovid	Pomalyst/Imnovid	777		—		N/A		2,235		—		N/A		Pomalyst/Imnovid	773		713		8	%
U.S.	U.S.	548		—		N/A		1,559		—		N/A		U.S.	512		489		5	%
Non-U.S.	Non-U.S.	229		—		N/A		676		—		N/A		Non-U.S.	261		224		17	%

Sprycel	Sprycel	544		558		(3)	%	1,576		1,561		1	%	Sprycel	470		521		(10)	%
U.S.	U.S.	336		325		3	%	944		872		8	%	U.S.	275		300		(8)	%
Non-U.S.	Non-U.S.	208		233		(11)	%	632		689		(8)	%	Non-U.S.	195		221		(12)	%

Yervoy	Yervoy	446		353		26	%	1,211		1,104		10	%	Yervoy	456		396		15	%
U.S.	U.S.	309		222		39	%	820		750		9	%	U.S.	294		257		14	%
Non-U.S.	Non-U.S.	137		131		5	%	391		354		10	%	Non-U.S.	162		139		17	%

Abraxane	Abraxane	342		—		N/A		950		—		N/A		Abraxane	314		300		5	%
U.S.	U.S.	236		—		N/A		659		—		N/A		U.S.	225		205		10	%
Non-U.S.	Non-U.S.	106		—		N/A		291		—		N/A		Non-U.S.	89		95		(6)	%

Empliciti	Empliciti	96		89		8	%	290		263		10	%	Empliciti	85		97		(12)	%
U.S.	U.S.	59		62		(5)	%	177		183		(3)	%	U.S.	51		59		(14)	%
Non-U.S.	Non-U.S.	37		27		37	%	113		80		41	%	Non-U.S.	34		38		(11)	%

Reblozyl	Reblozyl	96		—		N/A		159		—		N/A		Reblozyl	112		8		**
U.S.	U.S.	92		—		N/A		155		—		N/A		U.S.	98		8		**
Non-U.S.	Non-U.S.	4		—		N/A		4		—		N/A		Non-U.S.	14		—		N/A

Inrebic	Inrebic	13		—		N/A		40		—		N/A		Inrebic	16		12		33	%
U.S.	U.S.	13		—		N/A		40		—		N/A		U.S.	15		12		25	%
Non-U.S.	Non-U.S.	—		—		N/A		—		—		N/A		Non-U.S.	1		—		N/A

Onureg														Onureg	15		—		N/A
U.S.														U.S.	14		—		N/A
Non-U.S.														Non-U.S.	1		—		N/A

Zeposia	Zeposia	2		—		N/A		3		—		N/A		Zeposia	18		—		N/A
U.S.	U.S.	2		—		N/A		3		—		N/A		U.S.	13		—		N/A
Non-U.S.	Non-U.S.	—		—		N/A		—		—		N/A		Non-U.S.	5		—		N/A

Onureg		3		—		N/A		3		—		N/A
U.S.		3		—		N/A		3		—		N/A
Non-U.S.		—		—		N/A		—		—		N/A

4033

Three Months Ended September 30, Nine Months Ended September 30,
Dollars in Millions 2020 2019 % Change 2020 2019 % Change
Established Brands
Baraclude 100 145 (31) % 343 433 (21) %
U.S. 3 2 50 % 9 16 (44) %
Non-U.S. 97 143 (32) % 334 417 (20) %
Vidaza 106 — N/A 390 — N/A
U.S. — — N/A 2 — N/A
Non-U.S. 106 — N/A 388 — N/A
Other Brands(a)
287 350 (18) % 1,036 1,318 (21) %
U.S. 137 95 44 % 448 275 63 %
Non-U.S. 150 255 (41) % 588 1,043 (44) %
Total Revenues 10,540 6,007 75 % 31,450 18,200 73 %
U.S. 6,542 3,472 88 % 19,795 10,588 87 %
Non-U.S. 3,998 2,535 58 % 11,655 7,612 53 %

~~(a) Includes BMS and Celgene products in 2020.~~


	Three Months Ended March 31,
Dollars in Millions	2021	2020	% Change









Established Brands
Vidaza	54	158	(66)	%
U.S.	5	2	**
Non-U.S.	49	156	(69)	%

Baraclude	113	122	(7)	%
U.S.	4	3	33	%
Non-U.S.	109	119	(8)	%

Other Brands	339	418	(19)	%
U.S.	143	180	(21)	%
Non-U.S.	196	238	(18)	%

Total Revenues	11,073	10,781	3	%
U.S.	7,010	6,766	4	%
Non-U.S.	4,063	4,015	1	%

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 remained consistent due to sales channel inventory work down in the first quarter 2021 and higher average net selling prices.

•International revenues increased 4% due to foreign exchange of 6%, partially offset by lower demand and lower average net selling prices. Excluding foreign exchange impacts, revenues decreased by 2%.

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 ~~decreased 1% in the third quarter 2020 with the comparable prior year period~~increased 8% due to higher demand ~~offset by lower~~and higher average net selling prices, ~~of approximately 22%.~~partially offset by the positive impact in the first quarter 2020 from the change in buying patterns resulting from the COVID-19 pandemic. The ~~lower~~higher average net selling price in the first quarter 2021 is primarily due to ~~the increase in the~~a $160 million favorable adjustment to our Medicare Part D coverage gap ~~per patient~~provision for sales made in 2020 ~~and, to a lesser extent, unfavorable channel mix and higher contractual rebates. A majority of~~ ~~Eliquis~~ ~~patients enter the coverage gap during the third and fourth quarters each year. As a result, the expansion of the coverage gap had a significant negative impact in the third quarter and is~~resulting from lower than previously expected ~~to continue in the fourth quarter.~~discounts.

~~U.S. revenues increased 18% year-to-date due to higher demand, partially offset by lower average net selling prices of approximately 8%.~~

•International revenues increased ~~by 22% in the third quarter 2020 and 15% year-to-date~~11% due to foreign exchange of 8% and higher demand, partially offset by lower average net selling prices. Excluding foreign exchange impacts, revenues increased by ~~18% in the third quarter 2020 and 15% year-to-date.~~3%.

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 and ~~stomach~~stomach. The Opdivo+Yervoy regimen also is approved in multiple markets for the treatment of NSCLC, melanoma, RCC, and ~~continues to be investigated~~CRC. 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 decreased 6% ~~in the third quarter 2020 and 10% year-to-date~~ due to ~~the smaller previously-treated advanced lung cancer market,~~ lower demand resulting from COVID-19 (primarily lower new patient starts and patient visits), declining second-line eligibility across tumor indications and increased competition, ~~in the adjuvant melanoma indication,~~ partially offset by higher demand due to the launch of the Opdivo+Yervoy combinations in ~~NSCLC.~~NSCLC in the second quarter 2020.

•International revenues increased ~~5% in the third quarter 2020 and year-to-date~~2% due to ~~higher demand as a result~~foreign exchange of ~~additional indication launches in new countries,~~4%, partially offset by ~~foreign exchange.~~lower demand. Excluding foreign exchange impacts, revenues ~~increased~~decreased by ~~6% in the third quarter 2020 and 9% year-to-date.~~2%.

4134

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 JIA.

•U.S. revenues increased ~~6% and 5% in the third quarter 2020 and year-to-date, respectively,~~7% due to higher ~~demand.~~demand and higher average net selling prices.

•International revenues increased ~~12% and 5% in the third quarter 2020 and year-to-date, respectively,~~4% due to ~~higher~~foreign exchange of 5%, partially offset by lower demand. Excluding foreign exchange impacts, ~~international revenue increased~~revenues decreased by ~~13% in the third quarter 2020 and 7% year-to-date.~~1%.

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 5% due to higher average net selling prices and higher demand.

•International revenues increased 17% due to higher demand and foreign exchange of 6%, partially offset by lower average net selling prices. Excluding foreign exchange impacts, revenues increased by 11%.

Sprycel (dasatinib) — an oral inhibitor of multiple tyrosine kinase indicated for the first-line treatment of patients with Philadelphia chromosome-positive 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* Gleevec~~(imatinib~~* (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%~~decreased 8% due to the positive impact from the change in buying patterns resulting from the COVID-19 pandemic in the ~~third~~first quarter ~~2020 and 8% year-to-date due to higher average net selling prices and higher demand.~~2020.

•International revenues decreased ~~11% in the third quarter 2020 and 8% year-to-date~~12% due lower demand as a result of increased generic competition, ~~and~~the positive impact from the change in buying patterns resulting from the COVID-19 pandemic in the first quarter 2020, partially offset by foreign ~~exchange.~~exchange of 4%. Excluding foreign exchange ~~impact,~~impacts, revenues decreased ~~11% in the third quarter 2020 and decreased~~ by ~~6% year-to-date.~~16%.

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, RCC, and CRC.

•U.S. revenues increased ~~39% in the third quarter 2020 and 9% year-to-date primarily~~14% due to the launch of the Opdivo+Yervoy combination for NSCLC in the second quarter 2020, partially offset by increased competition for the Opdivo+Yervoy combination for kidney cancer.

•International revenues increased ~~5% in the third quarter 2020 and 10% year-to-date~~17% due to higher demand ~~as a result~~and foreign exchange of ~~additional indication launches primarily in Europe,~~5%, partially offset by lower average net selling prices. Excluding foreign exchange impacts, revenues increased by ~~4% in the third quarter 2020 and 13% year-to-date.~~12%.

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

~~Empliciti~~ •U.S. revenues increased 10% due to higher demand and higher average net selling prices.

•International revenues decreased 6% due to lower demand resulting from generic erosion primarily in Europe, partially offset by foreign exchange of 4%. Excluding foreign exchange impacts, revenues decreased by 10%.

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

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 in adult patients with very low- to intermediate-risk MDS who have ring sideroblasts and require RBC transfusions. Reblozyl ~~MDS indication~~ was launched in April 2020.

Inrebic (fedratinib) — an oral kinase inhibitor ~~with activity against wild type and mutationally activated JAK2 and FLT3 and is~~ 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.

~~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. ~~Zeposia~~ ~~was launched in June 2020.~~

Onureg (azacitidine) — is 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. Zeposia was launched in June 2020.

Vidaza (azacitidine for injection)—is a hypomethylating agent with several approved indications worldwide for frontline treatment of patients with myelodysplastic syndromes, chronic myelomonocytic leukemia (CMMoL), and acute myeloid leukemia.

•International revenues decreased due to lower demand and lower average net selling prices resulting from generic competition.

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

•International revenues decreased due to lower ~~average net selling prices~~demand resulting from generic competition.

~~Vidaza~~ ~~(azacitidine for injection)~~—is a pyrimidine nucleoside analog that has been shown to reverse the effects of deoxyribonucleic acid hypermethylation and promote subsequent gene re-expression and is indicated for treatment of patients with the following myelodysplastic syndrome subtypes: refractory anemia or refractory anemia with ringed sideroblasts (if accompanied by neutropenia or thrombocytopenia or requiring transfusions), refractory anemia with excess blasts, refractory anemia with excess blasts in transformation, and CML.

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

•~~U.S. revenues include $68 million and $237 million from Celgene products in the third quarter 2020 and year-to-date, respectively.~~

•International revenues decreased primarily due to ~~divestiture of the UPSA business and certain other brands and~~ continued generic erosion.

Estimated End-User Demand

Pursuant to the SEC Consent Order described in our ~~2019~~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.

Onureg had ~~2.5~~1.1 months of inventory on hand at ~~September 30, 2020~~March 31, 2021 in the U.S. to support the product launch. The inventory is expected to be worked down as demand increases post launch.

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, which account for approximately ~~75%~~77% of total gross sales of U.S. ~~products.~~products for the three months ended March 31, 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.

Revlimid and 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 Revlimid and Pomalyst. Internationally, Revlimid and 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.

4336

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 such, all of the information required to estimate months on hand in the direct customer distribution channel for non-U.S. business for the quarter ended ~~September 30, 2020~~March 31, 2021 is not available prior to the filing of this Quarterly Report on Form 10-Q. We will disclose any product with levels of inventory in excess of one month on hand or expected demand for the current quarter, subject to a de minimis exception, in our next ~~Annual Report~~quarterly report on Form ~~10-K.~~10-Q.

4437

Expenses


		Three Months Ended September 30,						Nine Months Ended September 30,							Three Months Ended March 31,
Dollars in Millions	Dollars in Millions	2020		2019		% Change		2020		2019		% Change		Dollars in Millions	2021		2020		% Change
Cost of products sold(a)	Cost of products sold(a)	$	2,502	$	1,790	40	%	$	8,863	$	5,586	59	%	Cost of products sold(a)	$	2,841	$	3,662	(22)	%
Marketing, selling and administrative	Marketing, selling and administrative	1,706		1,055		62	%	4,940		3,137		57	%	Marketing, selling and administrative	1,666		1,606		4	%
Research and development	Research and development	2,499		1,378		81	%	7,393		4,051		82	%	Research and development	2,225		2,372		(6)	%
Amortization of acquired intangible assets	Amortization of acquired intangible assets	2,491		25		**		7,162		73		**		Amortization of acquired intangible assets	2,513		2,282		10	%
Other (income)/expense, net	Other (income)/expense, net	(915)		410		**		(488)		249		**		Other (income)/expense, net	(702)		1,163		**
Total Expenses	Total Expenses	$	8,283	$	4,658	78	%	$	27,870	$	13,096	**		Total Expenses	$	8,543	$	11,085	(23)	%

** In excess of +/- 100%.

(a) Excludes amortization of acquired intangible assets.

Cost of Products Sold

•Cost of products sold ~~increased~~decreased by ~~$712~~$821 million, ~~in the third quarter 2020 and $3.3 billion year-to-date,~~ primarily due to lower unwinding of inventory fair value adjustments ~~($456 million~~of $1.3 billion, partially offset by charges related to Inrebic regulatory approval milestones in the ~~third quarter 2020~~EU ($315 million) and ~~$2.6 billion year-to-date), higher royalties and~~ ~~Eliquis~~ profit sharing ($79 million in the third quarter 2020 and $496 million year-to-date) and Celgene product costs (approximately $100 million in the third quarter 2020 and $300 million year-to-date). Year-to-date 2019 was impacted by an impairment charge of $113 million for a manufacturing and packaging facility.foreign exchange.

Marketing, Selling and Administrative

•Marketing, selling and administrative expenses increased by ~~$651~~$60 million ~~in the third quarter 2020 and $1.8 billion year-to-date,~~ primarily due to ~~costs associated with the broader portfolio resulting from the Celgene acquisition (approximately $500 million in the third quarter 2020~~higher advertising and ~~$1.7 billion year-to-date).~~promotion expenses.

Research and Development

•Research and development expense ~~increased~~decreased by ~~$1.1 billion in the third quarter 2020 and $3.3 billion year-to-date,~~$147 million primarily due to lower site exit costs, associated with the broader portfolio resulting from the Celgene acquisition (approximately $900 million in the third quarter 2020 and $2.8 billion year-to-date, excluding the bluebird collaboration charge) license and asset acquisition charges ~~of $203 million in~~and other specified items related to the ~~third quarter 2020 and $528 million year-to-date relating to Nektar, Cormorant, Forbius and bluebird.~~Celgene acquisition.

Amortization of Acquired Intangible Assets

•Amortization of acquired intangible assets increased by ~~$2.5 billion in the third quarter 2020 and $7.1 billion year-to-date,~~$231 million due to ~~Revlimid~~, ~~Pomalyst/Imnovid~~ ~~and other marketed~~additional product ~~rights obtained~~approvals in ~~the Celgene acquisition.~~2020.

Other (Income)/Expense, Net

•Other (income)/expense, net changed by ~~$1.3~~$1.9 billion, ~~in the third quarter 2020 and $737 million year-to-date,~~ primarily due to fair value adjustments to ~~equity investments and~~ contingent value rights ~~in 2020~~ and ~~pension settlement charges in 2019, partially offset by divestiture gains in 2019~~equity investments and other items discussed below.

4538


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
Dollars in Millions	Dollars in Millions	2020		2019		2020		2019		Dollars in Millions	2021		2020
Interest expense	Interest expense	$	346	$	209	$	1,065	$	377	Interest expense	$	353	$	362
Pension and postretirement		—		1,537		(6)		1,607
Contingent consideration										Contingent consideration	(510)		556
Royalties and licensing income	Royalties and licensing income	(403)		(356)		(1,124)		(967)		Royalties and licensing income	(367)		(410)
Divestiture losses/(gains)		1		(1,179)		(6)		(1,171)
Acquisition expenses		—		7		—		475
Contingent consideration		(988)		—		(597)		—
Investment income		(13)		(173)		(99)		(348)
Equity investment (gains)/losses										Equity investment (gains)/losses	(601)		338
Integration expenses	Integration expenses	195		96		535		224		Integration expenses	141		174
Provision for restructuring	Provision for restructuring	176		10		451		32		Provision for restructuring	45		160
Equity investment (gains)/losses		(244)		261		(724)		15
Litigation and other settlements	Litigation and other settlements	10		(1)		41		—		Litigation and other settlements	(8)		32
Transition and other service fees	Transition and other service fees	(18)		(7)		(129)		(11)		Transition and other service fees	(15)		(61)
Intangible asset impairment		—		—		21		15
Investment income										Investment income	(9)		(61)
Reversion excise tax	Reversion excise tax	—		—		76		—		Reversion excise tax	—		76
Divestiture gains										Divestiture gains	—		(16)

Loss on debt redemption										Loss on debt redemption	281		—
Other	Other	23		6		8		1		Other	(12)		13
Other (income)/expense, net	Other (income)/expense, net	$	(915)	$	410	$	(488)	$	249	Other (income)/expense, net	$	(702)	$	1,163

•~~Interest expense increased due to $19.0 billion of notes issued in May 2019 and $19.9 billion of Celgene debt assumed~~Contingent consideration primarily includes fair value adjustments resulting from the change in the ~~acquisition.~~

•~~Pension and postretirement includes a special termination benefits charge~~traded price of ~~$1.5 billion~~contingent value rights issued with the Celgene acquisition. The contractual obligation to pay the contingent value rights terminated in January 2021 because the ~~third quarter 2019 relating to the termination of the Bristol-Myers Squibb Retirement Income Plan.~~FDA did not approve liso-cel (JCAR017) by December 31, 2020.

•Royalties and licensing income includes diabetes business royalties, Keytruda* royalties, Tecentriq* royalties, up-front and milestone licensing fees for products that have not obtained commercial approval. Refer to “Item 1. Financial Statements—Note 4. ~~Acquisitions,~~ Divestitures, Licensing and Other Arrangements” for further information.

•~~Divestiture losses/(gains) includes a $1.2 billion gain on sale of the UPSA business in the third quarter 2019.~~

•Acquisition expenses include the following items related to the Celgene transaction in 2019: (1) upfront bridge facility commitment fee, (2) acquisition financing hedge losses and (3) financial advisory, legal, proxy filing and other regulatory fees.

•~~Contingent consideration primarily includes fair value adjustments resulting from the reduction in the traded price of contingent value rights issued with the Celgene acquisition.~~

•~~Integration expenses include consulting fees incurred in connection with Celgene integration activities.~~

•~~Provision for restructuring includes exit and other costs related to the Celgene transaction. Refer to “Item 1. Financial Statements—Note 6. Restructuring” for further information.~~

•Equity investment ~~(gains)/losses~~gains includes fair value adjustments on equity investments that have readily determinable fair value and other observable price changes on equity investments without readily determinable fair values. The fair value of equity investments with or without readily determinable fair values in 2020 were significantly negatively impacted by changes in market conditions primarily caused by the COVID-19 pandemic. Refer to “Item 1. Financial Statements—Note 9. Financial Instruments and Fair Value Measurements” for more information. Our share of income from equity method investments was ~~$30~~$137 million ~~in the third quarter 2020. A termination fee related to our Europe and Asia partnership with Sanofi of $80 million was~~ in the first quarter ~~2019.~~2021 primarily due to fair value adjustments attributed to limited partnerships.

•~~Transition~~Integration expenses include consulting fees incurred primarily in connection with Celgene integration activities.

•Provision for restructuring includes exit and other ~~service fees~~costs primarily ~~includes~~ related to the Celgene acquisition plans. 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.

•Otezla* ~~divestiture related fees~~Investment income decreased primarily due to lower interest rates in ~~2020.~~the first quarter 2021.

•Reversion excise tax resulted from the transfer of the retiree medical plan assets back to the ~~Company. Refer to “Item 1. Financial Statements—Note 16. Retirement Benefits” for further information.~~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 March 31,
Dollars in Millions	Dollars in Millions	2020			2019			2020			2019			Dollars in Millions	2021			2020
Earnings Before Income Taxes		$	2,257		$	1,349		$	3,580		$	5,104
Provision/(Benefit) for Income Taxes		379			(17)			2,548			584
Earnings/(Loss) Before Income Taxes														Earnings/(Loss) Before Income Taxes	$	2,530		$	(304)
Provision for Income Taxes														Provision for Income Taxes	501			462
Effective Tax Rate	Effective Tax Rate	16.8		%	(1.3)		%	71.2		%	11.4		%	Effective Tax Rate	19.8		%	(152.0)		%

Impact of Specified Items	Impact of Specified Items	(0.3)		%	(13.1)		%	55.5		%	(3.6)		%	Impact of Specified Items	3.0		%	(168.0)		%
Effective Tax Rate Excluding Specified Items	Effective Tax Rate Excluding Specified Items	17.1		%	11.8		%	15.7		%	15.0		%	Effective Tax Rate Excluding Specified Items	16.8		%	16.0		%

The tax impact attributed to specified items was primarily due to low jurisdictional tax rates attributed to inventory and intangible asset purchase price adjustments, ~~and~~ non-taxable or non-deductible contingent value right fair value adjustments ~~to contingent~~and valuation allowance on equity investment fair value rights in the current periods. The nine months ended September 30, 2020 also includes an $853 million deferred tax charge resulting from an internal transfer of certain 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. Jurisdictional tax rates and other tax impacts attributed to pension settlement charges, gain on sale of the UPSA business divestiture and other specified items decreased the effective tax rate in the prior periods. The effective tax rate excluding specified items increased by 5.3% in the third quarter 2020 and 0.7% year-to-date due to tax reserve releases of $81 million in the third quarter 2019 and changes in the estimated annual effective tax rates resulting primarily from jurisdictional earnings mix. The third quarters 2020 and 2019 each included other favorable discrete tax adjustments of approximately $70 million upon finalization of prior year tax returns and the impact of the Swiss tax reform (2019 only).adjustments. Refer to “Item 1. Financial Statements—Note 7. Income Taxes” for additional information.

Non-GAAP Financial Measures

Our non-GAAP financial measures, such as non-GAAP earnings and related EPS information, are adjusted to exclude certain costs, expenses, gains and losses and other specified items that are evaluated on an individual basis. 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 ~~(1)~~(i) amortization of acquired intangible assets, ~~beginning in the fourth quarter of 2019,~~ including product rights that generate a significant portion of our ongoing revenue and will recur until the intangible assets are fully amortized, ~~(2)~~(ii) unwind of inventory fair value adjustments, ~~(3)~~(iii) acquisition and integration expenses, ~~(4)~~(iv) restructuring costs, ~~(5)~~(v) accelerated depreciation and impairment of property, plant and equipment and intangible assets, ~~(6)~~(vi) R&D charges or other income resulting from upfront or contingent milestone payments in connection with the acquisition or licensing of third-party intellectual property rights, ~~(7) costs of acquiring a priority review voucher, (8)~~(vii) divestiture gains or losses, ~~(9)~~(viii) stock compensation resulting from accelerated vesting of Celgene awards and certain retention-related employee compensation charges related to the Celgene transaction, ~~(10)~~(ix) pension, legal and other contractual settlement charges, ~~(11) interest expense on the notes issued in May 2019 incurred prior to our Celgene transaction and interest income earned on the net proceeds of those notes, (12)~~(x) equity investment and contingent value rights fair value adjustments (including fair value adjustments attributed to limited partnership equity method investments beginning in 2021) and ~~(13)~~(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. We also provide international revenues for our priority products excluding the impact of foreign exchange. Foreign exchange impacts were derived by applying the prior period average currency rates to the current period revenues and expenses. 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 ~~November 5, 2020~~April 29, 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’ 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 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.

Amortization of acquired intangible assets were previously included in non-GAAP earnings and EPS information. These amounts have become significant to the financial results subsequent to the Celgene acquisition and as a result, have been excluded in the non-GAAP results to better reflect our core operating performance. Comparable prior period non-GAAP results have not been revised to include this adjustment as the related amounts were insignificant ($25 million and $73 million for the three and nine months ended September 30, 2019, respectively).

4740

Specified items were as follows:

Three Months Ended September 30, Nine Months Ended September 30,
Dollars in Millions 2020 2019 2020 2019
Inventory purchase price accounting adjustments $ 456 $ — $ 2,590 $ —
Employee compensation charges — — 3 —
Site exit and other costs 3 22 32 173
Cost of products sold 459 22 2,625 173
Employee compensation charges 7 — 34 —
Site exit and other costs (1) — 4 1
Marketing, selling and administrative 6 — 38 1
License and asset acquisition charges 203 — 528 25
IPRD impairments — — — 32
Inventory purchase price accounting adjustments 8 — 25 —
Employee compensation charges 8 — 41 —
Site exit and other costs 4 20 99 58
Research and development 223 20 693 115
Amortization of acquired intangible assets 2,491 — 7,162 —
Interest expense(a)
(40) 166 (122) 249
Pension and postretirement — 1,545 — 1,638
Royalties and licensing income (53) (9) (154) (9)
Divestiture losses/(gains) 1 (1,179) (6) (1,171)
Acquisition expenses — 7 — 475
Contingent consideration (988) — (597) —
Investment income — (99) — (153)
Integration expenses 195 96 535 224
Provision for restructuring 176 10 451 32
Equity investment (gains)/losses (214) 261 (693) 15
Reversion excise tax — — 76 —
Other (income)/expense, net (923) 798 (510) 1,300
Increase to pretax income 2,256 840 10,008 1,589
Income taxes on items above (405) (275) (699) (423)
Income taxes attributed to Otezla* divestiture
11 — 266 —
Income taxes attributed to internal transfer of intangible assets — — 853 —
Income taxes (394) (275) 420 (423)
Increase to net earnings $ 1,862 $ 565 $ 10,428 $ 1,166

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


	Three Months Ended March 31,
Dollars in Millions	2021		2020
Inventory purchase price accounting adjustments	$	79	$	1,420
Intangible asset impairment	315		—
Employee compensation charges	—		2
Site exit and other costs	23		16
Cost of products sold	417		1,438

Employee compensation charges	—		15
Site exit and other costs	(1)		6
Marketing, selling and administrative	(1)		21

License and asset acquisition charges	—		25

Inventory purchase price accounting adjustments	—		17
Employee compensation charges	1		18
Site exit and other costs	—		56
Research and development	1		116

Amortization of acquired intangible assets	2,513		2,282

Interest expense	(34)		(41)
Contingent consideration	(510)		556
Royalties and licensing income	(14)		(83)
Equity investment (gains)/losses	(608)		339
Integration expenses	141		174
Provision for restructuring	45		160


Reversion excise tax	—		76
Divestiture gains	—		(16)



Loss on debt redemption	281		—

Other (income)/expense, net	(699)		1,165

Increase to pretax income	2,231		5,022

Income taxes on items above	(300)		(291)




Increase to net earnings	$	1,931	$	4,731

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


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
Dollars in Millions, except per share data	Dollars in Millions, except per share data	2020		2019		2020		2019		Dollars in Millions, except per share data	2021		2020
Net Earnings Attributable to BMS Used for Diluted EPS Calculation – GAAP		$	1,872	$	1,353	$	1,012	$	4,495
Net Earnings/(Loss) Attributable to BMS Used for Diluted EPS Calculation – GAAP										Net Earnings/(Loss) Attributable to BMS Used for Diluted EPS Calculation – GAAP	$	2,021	$	(775)
Specified Items	Specified Items	1,862		565		10,428		1,166		Specified Items	1,931		4,731
Net Earnings Attributable to BMS Used for Diluted EPS Calculation – Non-GAAP	Net Earnings Attributable to BMS Used for Diluted EPS Calculation – Non-GAAP	$	3,734	$	1,918	$	11,440	$	5,661	Net Earnings Attributable to BMS Used for Diluted EPS Calculation – Non-GAAP	$	3,952	$	3,956

Weighted-Average Common Shares Outstanding – Diluted – GAAP										Weighted-Average Common Shares Outstanding – Diluted – GAAP	2,265		2,258
Incremental Shares Attributable to Share-Based Compensation Plans										Incremental Shares Attributable to Share-Based Compensation Plans	—		40
Weighted-Average Common Shares Outstanding – Diluted – Non-GAAP										Weighted-Average Common Shares Outstanding – Diluted – Non-GAAP	2,265		2,298

Weighted-Average Common Shares Outstanding – Diluted		2,290		1,634		2,295		1,636

Diluted Earnings Per Share Attributable to BMS – GAAP		$	0.82	$	0.83	$	0.44	$	2.75
Diluted Earnings/(Loss) Per Share Attributable to BMS – GAAP										Diluted Earnings/(Loss) Per Share Attributable to BMS – GAAP	$	0.89	$	(0.34)
Diluted EPS Attributable to Specified Items	Diluted EPS Attributable to Specified Items	0.81		0.34		4.54		0.71		Diluted EPS Attributable to Specified Items	0.85		2.06
Diluted EPS Attributable to BMS – Non-GAAP	Diluted EPS Attributable to BMS – Non-GAAP	$	1.63	$	1.17	$	4.98	$	3.46	Diluted EPS Attributable to BMS – Non-GAAP	$	1.74	$	1.72

4941

FINANCIAL POSITION, LIQUIDITY AND CAPITAL RESOURCES

Our net debt position was as follows:


Dollars in Millions	Dollars in Millions	September 30, 2020		December 31, 2019		Dollars in Millions	March 31, 2021		December 31, 2020
Cash and cash equivalents	Cash and cash equivalents	$	19,435	$	12,346	Cash and cash equivalents	$	10,982	$	14,546
Marketable debt securities – current	Marketable debt securities – current	1,720		3,047		Marketable debt securities – current	1,948		1,285
Marketable debt securities – non-current	Marketable debt securities – non-current	495		767		Marketable debt securities – non-current	288		433
Total cash, cash equivalents and marketable debt securities	Total cash, cash equivalents and marketable debt securities	21,650		16,160		Total cash, cash equivalents and marketable debt securities	13,218		16,264
Short-term debt obligations	Short-term debt obligations	(3,585)		(3,346)		Short-term debt obligations	(1,777)		(2,340)
Long-term debt	Long-term debt	(41,364)		(43,387)		Long-term debt	(44,505)		(48,336)
Net debt position	Net debt position	$	(23,299)	$	(30,573)	Net debt position	$	(33,064)	$	(34,412)

~~Our net debt position was reduced by $7.3 billion primarily due to operating cash flow of $10.4 billion, partially offset by dividend payments of $3.1 billion.~~

We regularly assess our anticipated working capital needs, debt and 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, ~~are efficiently managed,~~ adequate liquidity access and lower cost of capital are efficiently managed, which may lead to the issuance of additional debt securities, the repurchase of ~~common stock,~~ debt securities ~~and CVRs issued in connection with the Celgene transaction~~ prior to maturity or the issuance or repurchase of ~~additional debt securities.~~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 will be sufficient to satisfy our anticipated cash needs for at least the next few years, including dividends, capital expenditures, milestone payments, working capital, restructuring initiatives, business development, ~~deemed repatriation transition tax, approximately $8.0 billion of~~ debt ~~maturing through 2022 and CVRs issued in connection with the Celgene transaction~~maturities of approximately ~~$6.8~~$13.0 billion ~~in 2021. We expect to fund the planned MyoKardia transaction~~ through ~~a combination of cash on hand from our operations and, subject to market conditions, net proceeds received in connection with a future~~2024 as well as any debt ~~issuance.~~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 number of shares repurchased will be determined by our management at its discretion and will vary based on market conditions, securities law limitations and other factors. The share repurchase program does not obligate us to repurchase any specific number of 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 ~~remaining~~outstanding share repurchase authority authorization under the program was ~~$1.0~~$4.4 billion as of December 31, ~~2019. Our~~2020. In January 2021, our Board of Directors approved an increase of ~~$5.0~~$2.0 billion to the share repurchase authorization for our common stock, ~~in February 2020,~~ increasing the total outstanding share repurchase authorization to approximately ~~$6.0~~$6.4 billion. We repurchased ~~1.4~~approximately 28 million shares of our common stock for ~~$81 million~~$1.8 billion during the ~~nine~~three months ended ~~September 30, 2020,~~March 31, 2021 reducing the remaining share repurchase capacity under the share repurchase program to approximately ~~$5.9~~$4.6 billion as of ~~September 30, 2020. In the second quarter of 2020, the ASR agreements that we executed in the fourth quarter of 2019 to repurchase an aggregate $7 billion of common stock were settled.~~March 31, 2021. Refer to “Item 1. Financial Statements—Note 15. Equity” for additional information.

Dividend payments were ~~$3.1~~$1.1 billion in the ~~nine~~three months ended ~~September 30, 2020.~~March 31, 2021. Dividends declared per common share were ~~$1.35~~$0.49 in the ~~nine~~three months ended ~~September 30, 2020.~~March 31, 2021. Dividend decisions are made on a quarterly basis by our Board of Directors.

Annual capital expenditures were approximately ~~$800~~$750 million in ~~2019~~2020 and are expected to be approximately ~~$800 million in 2020 and~~ $1.3 billion in ~~2021.~~2021 and $1.2 billion in 2022. We continue to make capital expenditures in connection with the expansion of our manufacturing capabilities, research and development and other facility-related activities.

Under our commercial paper program, we may issue a 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, 2020.~~March 31, 2021.

In March 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. In addition, our $500 million 2.875% Notes matured and were repaid.

As of ~~September 30, 2020,~~March 31, 2021, we had four separate revolving credit facilities totaling $6.0 billion, which consisted of a 364-day $2.0 billion facility expiring in January ~~2021,~~2022, a three-year $1.0 billion facility expiring in January 2022 and two five-year $1.5 billion facilities that were extended to September ~~2023~~2024 and July ~~2024,~~2025, respectively. The revolving facilities provide for customary terms and conditions with no financial covenants, ~~and~~ may be used to provide backup liquidity for our commercial paper ~~borrowings. Our $1.0 billion facility~~borrowings and ~~our two $1.5 billion revolving facilities~~ 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, 2020 and~~March 31, 2021 or December 31, ~~2019.~~2020.

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In November 2020, we entered into a $4.0 billion delayed draw term loan credit agreement consisting of a $2.0 billion 364-day tranche and a $2.0 billion two-year tranche. The term facility provides for customary terms and conditions with no financial covenants and may be used for general corporate purposes. Any unused credit expires on April 9,which was terminated in February 2021. ~~No borrowings were outstanding under the term loan as of November 4, 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 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.

Credit Ratings

Our current long-term and short-term credit ratings assigned by Moody’s Investors Service are A2 and Prime-1, respectively, with a ~~negative~~stable long-term credit outlook, and our current long-term and short-term credit ratings assigned by Standard & Poor’s are A+ and ~~A-1+,~~A-1, respectively with a negative long-term credit outlook. The long-term ratings reflect the agencies’ opinion that we have a low default risk but are somewhat susceptible to adverse effects of changes in circumstances and economic conditions. The short-term ratings reflect the agencies’ opinion that we have good to extremely strong capacity for timely repayment. We do not expect that the additional debt that we may incur in connection with the pending MyoKardia acquisition or the potential payment of cash to holders of the CVRs issued in connection with the Celgene transaction will result in a downgrade to our credit ratings below an investment grade level and we do not expect that any potential change of our credit rating as result of such actions to impact our ability to access short-term or long-term financing. However, we cannot guarantee the future actions of Moody’s and/or Standard & Poor’s. 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,					Three Months Ended March 31,
Dollars in Millions	Dollars in Millions	2020		2019		Dollars in Millions	2021		2020
Cash flow provided by/(used in):	Cash flow provided by/(used in):					Cash flow provided by/(used in):
Operating activities	Operating activities	$	10,382	$	6,029	Operating activities	$	3,824	$	3,937
Investing activities	Investing activities	1,268		2,266		Investing activities	(143)		610
Financing activities	Financing activities	(4,634)		15,298		Financing activities	(7,295)		(1,054)

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 (75 ~~days in 2020 and 90 days in 2019)~~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 ~~$4.4 billion~~$100 million change in cash flow from operating activities compared to ~~2019~~2020 was primarily attributable to ~~higher cash collections and timing of payments in~~ the ~~ordinary course of business of approximately $7.1 billion (primarily relating to Celgene) and~~ reversion of retirement medical plan assets of approximately $300 million (net of excise taxes), in the first quarter 2020, partially offset by ~~higher income tax~~collections and payments in the ordinary course of ~~$2.1 billion and restructuring, integration and collaboration payments of approximately $900 million in 2020.~~business.

Investing Activities

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

The ~~$1.0 billion~~$750 million change in cash flow from investing activities compared to ~~2019~~2020 was primarily attributable to ~~lower business divestiture proceeds of approximately $1.7 billion primarily due to the sale of the UPSA business in 2019, partially offset by~~ changes in the amount of marketable debt securities held of ~~$900~~$1.2 billion, partially offset by higher proceeds from sales of equity investments of approximately $400 million.

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 ~~$19.9~~$6.2 billion change in cash flow from financing activities compared to ~~2019~~2020 was primarily due to ~~lower net borrowing activity~~higher debt repayments of ~~$18.8~~$4.5 billion ~~primarily resulting from the issuance of notes in 2019 to fund the acquisition of Celgene~~ and higher ~~dividend payments~~share repurchases of ~~approximately $1.0~~$1.7 billion in ~~2020.~~2021.

Product and Pipeline Developments

Our R&D programs are managed on a portfolio basis from early discovery through late-stage development and include a balance of early-stage and late-stage programs to support future growth. Our late stage R&D programs in Phase III development include both investigational compounds for initial indications and additional indications or formulations for marketed products. The following are the developments in our marketed products and our late-stage pipeline since the start of the ~~third~~first quarter:


Product			Indication			Date			Developments

Opdivo

Bladder

~~September 2020~~

~~Announced that CheckMate-274, a pivotal Phase III trial evaluating~~ ~~Opdivo~~ after surgery in patients with high-risk, muscle-invasive urothelial carcinoma, met its primary endpoints of improving disease-free survival versus placebo in both all randomized patients and in patients whose tumor cells express PD-L1 ≥1%.

~~Gastric and Esophageal Cancers~~

~~October 2020~~

~~Announced that the CHMP of the EMA has recommended approval of~~ ~~Opdivo~~ ~~for the treatment of adults with unresectable advanced, recurrent or metastatic ESCC after prior fluoropyrimidine- and platinum-based combination chemotherapy.~~

~~September 2020~~March 2021

Ono, our alliance partner for Opdivo in Japan, announced the submission of a supplemental application for Opdivo to expand its use as adjuvant therapy of resected urothelial cancer, for a partial change in approved items of the manufacturing and marketing approval. The application is based on results from the global Phase III CheckMate-274 (ONO-4538-33) trial.

March 2021

Announced that the EMA validated the type II variation application for Opdivo for the adjuvant treatment of patients with surgically resected, high-risk muscle-invasive urothelial carcinoma. The application is based on results from the Phase ~~II/~~III ~~clinical study evaluating~~CheckMate-274 trial.

Gastric and Esophageal Cancers

April 2021

Announced FDA approval of Opdivo in combination with ~~chemotherapy versus placebo in~~ combination with fluoropyrimidine- and platinum-containing chemotherapy for the treatment of patients with advanced or metastatic gastric cancer, gastroesophageal junction cancer, and esophageal adenocarcinoma, regardless of PD-L1 expression status. The approval is based on the Phase III CheckMate-649 trial.

April 2021

Announced positive topline results from the Phase III CheckMate-648 trial evaluating treatment with Opdivo plus chemotherapy or Opdivo plus Yervoy in patients with unresectable advanced or ~~recurrent gastric cancer who are negative for human epidermal growth factor receptor 2, and previously untreated with the first-line therapy in Japan, South Korea and Taiwan that the~~ metastatic ESCC.

Opdivo ~~combination group~~plus chemotherapy demonstrated a statistically significant ~~improvement in one of~~and clinically meaningful benefit for the ~~two~~ primary ~~endpoints of progression-free survival, but did not show a statistically significant improvement in overall survival, the other primary endpoint versus control combination group.~~

~~August 2020~~

~~Announced that CheckMate-649, a pivotal Phase III trial evaluating~~ ~~Opdivo~~ ~~plus chemotherapy compared to chemotherapy alone as a first-line treatment for metastatic gastric cancer, gastroesophageal junction cancer or esophageal adenocarcinoma, met both primary~~and secondary endpoints of overall survival ~~at a pre-specified interim analysis and progression-free survival at final analysis~~ in patients whose tumors express PD-L1 ~~with a combined positive score ≥ 5. The overall survival benefit was also observed~~and in the all-randomized patient population at the pre-specified interim analysis, and also the primary endpoint of progression-free survival (PFS) by blinded independent central review (BICR) in patients whose tumors express PD-L1.

Opdivo plus Yervoy also met its primary and secondary endpoints of overall survival in patients whose tumors express PD-L1 and in the all-randomized population.Opdivo plus Yervoy did not meet the other primary endpoint of PFS by BICR in patients whose tumors express PD-L1.

~~August 2020~~

~~Announced that the Phase III CheckMate-577 trial evaluating~~ ~~Opdivo~~ ~~as an adjuvant therapy for patients with resected esophageal or gastroesophageal junction cancer met its primary endpoint of disease-free survival at a pre-specified interim analysis.~~

~~NSCLC~~

~~October 2020~~

~~Announced that the Phase III CheckMate-816 trial met a primary endpoint of pathologic complete response in resectable NSCLC.~~

~~August 2020~~February 2021

Ono, our alliance partner for Opdivo in Japan, announced ~~top-line~~the submission of a supplemental application for Opdivo to expand the use for the adjuvant therapy of resected esophageal cancer, for a partial change in approved items of the manufacturing and marketing approval. The application is based on results from the global Phase III CheckMate-577 (ONO-4538-43) trial.

January 2021

Announced that the FDA accepted the sBLA for Opdivo for the treatment of patients with resected esophageal or gastroesophageal junction cancer in the adjuvant setting, after neoadjuvant chemoradiation therapy. The FDA granted the application Priority Review and assigned a PDUFA goal date of May 20, 2021. The application is based on results from the Phase III ~~clinical study TASUKI-52 evaluating~~CheckMate-577 trial.

January 2021

Announced that the EMA validated the MAA for Opdivo as an adjuvant treatment for esophageal or gastroesophageal junction cancer in ~~combination with bevacizumab and chemotherapy versus placebo in combination with bevacizumab and chemotherapy in chemotherapy-naive~~adult patients with ~~stage IIIB/IV or recurrent non-squamous NSCLC.~~residual pathologic disease after neoadjuvant chemoradiotherapy and resection. The ~~Opdivo~~ ~~combination group demonstrated a statistically significant improvement in~~application is based on results from the ~~primary endpoint of progression-free survival in a pre-specified interim analysis.~~Phase III CheckMate-577 trial.

~~RCC~~

~~October 2020~~January 2021

Announced ~~with Exelixis,~~ that the ~~FDA has accepted~~EMA validated the ~~sBLA and sNDA~~Type II Variation MAA for Opdivo in combination with fluoropyrimidine- and platinum-based combination chemotherapy for the first-line treatment of adult patients with advanced or metastatic gastric cancer, gastroesophageal junction cancer or esophageal adenocarcinoma. The application is based on results from the pivotal Phase III Checkmate-649 trial.

Lymphoma

January 2021

Ono, our alliance partner for Cabometyx*Opdivo in Japan, announced the submission of a supplemental application forOpdivo to expand the use 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 application is based on the result of the investigator-initiated clinical trial (NCCH1606, Study abbreviation: PENGUIN).

RCC

April 2021

Announced EC approval of Opdivo in combination with Cabometyx* for the first-line treatment of adults with advanced RCC. The approval is based on results from the Phase III CheckMate-9ER trial.

January 2021

Announced FDA approval of Opdivo in combination with Cabometyx* for the first-line treatment of patients with advanced RCC. The ~~FDA granted Priority Review to both applications and assigned a PDUFA goal date of February 20, 2021.~~approval is based on the Phase III CheckMate-9ER trial.

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Product			Indication			Date			Developments


~~Opdivo+~~Opdivo + Yervoy	~~CRC~~MPM	~~September 2020~~April 2021	~~Ono, our alliance partner for~~ ~~Opdivo~~ ~~in Japan announced that the companies received approval for combination therapy of~~ ~~Opdivo~~ ~~and~~ ~~Yervoy~~ ~~in Japan to expand the combination use for the treatment of microsatellite instability high unresectable advanced or recurrent CRC that has progressed following chemotherapy, for~~Received a ~~partial change in approved items of the manufacturing and marketing approval.~~
~~RCC~~	~~September 2020~~	~~Announced that more than half of advanced RCC patients treated with the~~ ~~Opdivo~~ ~~plus~~ ~~Yervoy~~ combination were alive after four years across the entire study population of the Phase III CheckMate-214 clinical trial, with the combination continuing to show superior, long-term overall survival and durable responses compared to sunitinib.
~~NSCLC~~	~~September 2020~~	~~Announced that the~~positive CHMP ~~of the EMA recommending approval~~opinion of Opdivo plus Yervoy ~~combined with two cycles of chemotherapy as first-line treatment of metastatic NSCLC in adults whose tumors have no sensitizing EGFR mutation or ALK translocation.~~
~~MPM~~	~~October 2020~~	~~FDA approval of~~ ~~Opdivo~~+~~Yervoy~~for the first-line treatment of ~~adult patients~~adults with unresectable MPM. ~~This approval is based on a pre-specified interim analysis from the Phase III CheckMate-743 trial in which~~ ~~Opdivo~~+~~Yervoy~~ ~~demonstrated superior overall survival versus the platinum-based standard of care chemotherapy.~~
	~~October 2020~~	~~Ono, our alliance partner for~~ ~~Opdivo~~ ~~in Japan announced that the companies have submitted supplemental applications in Japan for~~ ~~Opdivo~~ ~~and~~ ~~Yervoy~~ ~~in combination treatment to expand the use for first-line treatment of unresectable advanced or recurrent MPM, for a partial change in aprpoved items of the manufacturing and marketing approval.~~
	~~September 2020~~	~~Announced that the EMA validated the type II variation application for~~ ~~Opdivo~~ ~~plus~~ ~~Yervoy~~ ~~for treatment of patients with previously untreated, unresectable MPM.~~
~~Melanoma~~	~~October 2020~~	~~Announced results for the co-primary endpoint for CheckMate-915, a randomized Phase III study evaluating~~ ~~Opdivo~~ ~~plus~~ ~~Yervoy~~ ~~versus~~ ~~Opdivo~~ ~~for patients who have had a complete surgical removal of stage IIIb/c/d or stage IV melanoma. The addition of~~ ~~Yervoy~~ to ~~Opdivo~~ ~~in this trial did not result in a statistically significant improvement in recurrence-free survival in the all-comer (intent-to-treat) population.~~


Zeposia			~~RMS~~UC			~~September 2020~~February 2021			Announced ~~interim results from~~that the ~~Phase III open-label extension trial DAYBREAK, demonstrating~~FDA accepted the ~~long-term efficacy and safety profile of~~sNDA for Zeposia for the treatment of adults with moderately to severely active UC. The FDA granted the application Priority Review and assigned a PDUFA goal date of May 30, 2021.


Inrebic			Myelofibrosis			February 2021			Announced EC approval of Inrebic for the treatment of disease-related splenomegaly (enlarged spleen) or symptoms in adult patients with ~~RMS. The trial included 2,494 patients~~primary myelofibrosis, post-polycythaemia vera myelofibrosis or post-essential thrombocythaemia myelofibrosis, who ~~had previously completed a Phase I, II~~are JAK inhibitor naïve or ~~III~~ ~~Zeposia~~ ~~clinical trial and who had an average treatment time of 35.4 months while in DAYBREAK and no new safety concerns emerged~~have been treated with ~~long-term use of~~ ~~Zeposia~~.ruxolitinib.


Onureg			AML			~~September 2020~~April 2021			~~Announced FDA approval~~Received a positive CHMP opinion of Onureg ~~(azacitidine) for the continued treatment of~~as a maintenance therapy in adult patients with AML who achieved ~~first~~ complete remission or complete remission with incomplete blood count recovery following ~~intensive~~ induction ~~chemotherapy~~therapy with or without consolidation treatment and who are not ~~able~~candidates for, including those who choose not to ~~complete intensive curative therapy.~~proceed to, hematopoietic stem cell transplantation.


~~liso-cel~~ Breyanzi (liso-cel)			Lymphoma			~~July 2020~~March 2021			Announced ~~that the EMA validated the MAA for liso-cel, an investigational CD19-directed CAR T cell therapy,~~Japan’s Ministry of Health, Labour and Welfare approval of Breyanzi (lisocabtagene maraleucel: liso-cel) for the treatment of ~~adults~~patients with relapsed or refractory ~~diffuse~~ large B-cell ~~lymphoma, primary mediastinal B-cell lymphoma~~lymphoma1 and relapsed or refractory follicular ~~lymphoma grade 3B after at least two prior therapies.~~lymphoma.


~~ide-cel; bb2121~~February 2021			~~Multiple Myeloma~~			~~September 2020~~			Announced ~~with bluebird bio that the~~ FDA ~~has accepted for Priority Review the BLA for ide-cel~~approval of Breyanzi (lisocabtagene maraleucel; liso-cel), for the treatment of adult patients with ~~multiple myeloma who have received at least three prior therapies,~~relapsed or refractory large B-cell lymphoma after two or more lines of systemic therapy, including ~~an immunomodulatory agent, a proteasome inhibitor~~diffuse large B-cell lymphoma not otherwise specified (including DLBCL arising from indolent lymphoma), high-grade B-cell lymphoma, primary mediastinal large B-cell lymphoma, and ~~an anti-CD38 antibody. The FDA has set a PDUFA goal date of March 27, 2021.~~


~~Deucravacitinib~~ ~~(BMS-986165)~~			~~Plaque Psoriasis~~			~~November 2020~~			Announced results from Phase III POETYK PSO-1 trial evaluating deucravacitinib (BMS-986165), a novel, oral, selective tyrosine kinase 2 inhibitor, for the treatment of patients with moderate to severe plaque psoriasis. POETYK PSO-1 evaluated 6 mg of deucravacitinib once daily and met both co-primary endpoints versus placebo, with more patients achieving Psoriasis Area and Severity Index (PASI) 75, defined as at least a 75 percent improvement in PASI, and a static Physician’s Global Assessment (sPGA) score of clear or almost clear (sPGA 0/1) after 16 weeks of treatment with deucravacitinib. The trial also met multiple key secondary endpoints, including showing deucravacitinib was superior to ~~Otezla~~* in the proportion of patients reaching a PASI 75 response and sPGA 0/1 at Week 16. The overall safety profile of deucravacitinib in the POETYK PSO-1 trial was consistent with previously reported Phase II results.follicular lymphoma grade 3B.

Abecma

(ide-cel)

~~Idhifa~~Multiple Myeloma

~~AML~~

~~August 2020~~March 2021

Announced ~~that~~with bluebird FDA approval of Abecma (idecabtagene vicleucel; ide-cel) for the ~~Phase III IDHENTIFY study evaluating~~ ~~Idhifa~~ plus best supportive care (BSC) versus conventional care regimens, which include BSC only, azacitidine plus BSC, low-dose cytarabine plus BSC or intermediate-dose cytarabine plus BSC, did not meet the primary endpointtreatment of ~~overall survival in~~adult patients with relapsed or refractory ~~AML with~~multiple myeloma after four or more prior lines of therapy, including an ~~isocitrate dehydrogenase-2 mutation.~~immunomodulatory agent, a proteasome inhibitor, and an anti-CD38 monoclonal antibody.


deucravacitinib			Plaque Psoriasis			February 2021			Announced positive results from POETYK PSO-2, the second pivotal Phase III trial evaluating deucravacitinib (tyrosine kinase 2 inhibitor) for the treatment of patients with moderate to severe plaque psoriasis. POETYK PSO-2 met both co-primary endpoints versus placebo, with significantly more patients achieving Psoriasis Area and Severity Index (PASI 75), defined as at least a 75 percent improvement of baseline PASI, and a static Physician's Global Assessment (sPGA) score of clear or almost clear (sPGA 0/1) after 16 weeks of treatment.


mavacamten			oHCM			March 2021			Announced that the FDA accepted the NDA for mavacamten, an investigational, novel, oral, allosteric modulator of cardiac myosin, for patients with symptomatic obstructive hypertrophic cardiomyopathy. The FDA has assigned a PDUFA goal date of January 28, 2022.


relatlimab			Melanoma			March 2021			Announced primary results from the Phase II/III RELATIVITY-047 (CA224-047) trial evaluating the fixed-dose combination of relatlimab, an anti-LAG-3 antibody, and Opdivo versus Opdivo alone in patients with previously untreated metastatic or unresectable melanoma. The trial met its primary endpoint of progression-free survival. Follow up for overall survival, a secondary endpoint, is ongoing. The fixed-dose combination was well-tolerated and there were no new safety signals reported in either the relatlimab and Opdivo combination arm or the Opdivo arm.

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 ~~2019~~2020 Form 10-K. There have been no material changes to our critical accounting policies during the ~~nine~~three months ended ~~September 30, 2020.~~March 31, 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

This 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, as amended,~~ and Section 21E of the Exchange Act. You can identify these forward-looking statements by the fact they use words such as “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 our future financial results, goals, plans and objectives to differ materially from those expressed in, or implied by, the statements. These statements are likely to relate to, among other things, our goals, plans and 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 ~~acquisition~~acquisitions of Celgene and ~~to successfully integrate ours and Celgene’s businesses and operations and to complete and realize the anticipated benefits of our proposed acquisition of~~ MyoKardia, the full extent of the ~~negative~~ impact of the COVID-19 pandemic on our operations and the development and commercialization of our products, ~~including the increased possibility that the COVID-19 pandemic could delay the timing of the FDA’s approval decisions for liso-cel~~potential laws and ~~ide-cel,~~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. No forward-looking statement can be guaranteed. We included in this Quarterly Report on Form 10-Q, in the ~~2019~~2020 Form 10-K, particularly under the caption “Item 1A. Risk Factors,” and in our other filings with the SEC 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. Additional 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 publicly update or revise any forward-looking statement, whether as a result of new information, future events, changed circumstances or 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 Market Risk” in our ~~2019~~2020 Form 10-K.

Item 4. CONTROLS AND PROCEDURES

Management carried out an evaluation, under the supervision and with the participation of its chief executive officer and chief financial officer, of the effectiveness of the design and operation of its disclosure controls and 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. Based on this evaluation, our principal executive officer and principal financial officer concluded that as of ~~September 30, 2020,~~March 31, 2021, such disclosure controls and procedures are effective.

There were no changes in the Company’s internal control over financial reporting during the quarter ended ~~September 30, 2020~~March 31, 2021 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II—OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS

Information pertaining to legal proceedings can be found in “Item 1. Financial Statements—Note ~~18.~~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 ~~2019~~2020 Form ~~10-K and the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2020, except as described below.~~10-K.

~~The COVID-19 pandemic is affecting our business and could have a material adverse effect on us.~~

The COVID-19 pandemic is affecting how we operate our business. We currently assume that the peak impact of the COVID-19 crisis on our business occurred in the second quarter of 2020, with recovery beginning in the third quarter of 2020 and minimal impact in the fourth quarter of 2020 and beyond. If the negative impact from the COVID-19 pandemic extends beyond our assumed timelines, our results may be worse than expected. The full extent of the impact will depend on future developments, such as the ultimate duration and the severity of the spread of COVID-19 in the U.S. and globally, the effectiveness of federal, state, local and foreign governments’ mitigation actions, the pandemic’s impact on the U.S. and global economies, as well as factors affecting healthcare and the delivery of medicines to patients, including but not limited to those discussed above under "Part I—Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations—COVID-19 and Market Factors", and how quickly we can return to more normal operations, among other things.

Although we currently do not anticipate any disruption to the supply of our medicines to patients, it is possible that we could experience manufacturing or supply issues due to COVID-19 in the future, which would increase the negative impact on our business and results of operations. In addition, if a natural disaster or other potentially disruptive event occurs on top of the current pandemic, it could deplete our safety stock levels and we could experience a manufacturing, supply or distribution issue.

We have started to re-engage in-person interactions by our customer-facing (field) personnel in health care settings in the U.S. and a number of other markets. If we determine that it is no longer safe to engage in these in-person interactions, we will likely return to a remote model of engagement. This transition could have a negative impact on our business. It is also possible that there could be a longer-lasting shift in interactions between field personnel and health care professionals that we have not anticipated, which could have a negative impact on our business and results of operations.

Although we have restarted clinical development activities, we continue to experience delays in the initiation and enrollment of patients in our clinical trials. We may not be able to fully mitigate these delays, which could negatively impact the timing of our pipeline development programs and expected future revenues and/or cash flows. In addition, we could experience additional delays or difficulties enrolling patients in clinical trials and/or delays or difficulties with our ongoing, fully enrolled clinical trials, which could further negatively impact the timing of our pipeline development programs and expected future revenues and/or cash flows. A prolonged clinical trial delay could potentially have a significant negative effect on our business, particularly if new competitive products enter the market or clinical trial results for our competitors’ products affect the value proposition for our product. Any such delays or difficulties in clinical development could also potentially lead to a material impairment of our intangible assets, including the approximately $64 billion of intangible assets we obtained through the Celgene transaction. In addition, although research and early development activities performed in laboratories have resumed, they were suspended for a period of time, which negatively impacted the advancement of early pipeline assets. We have plans to mitigate this impact, but if we are not be able to fully mitigate it, the breadth of our future pipeline opportunities could be adversely affected.

We cannot predict or reasonably estimate the impact of any potential long-term changes to the healthcare industry from COVID-19. For example, there is potential for a shift in the U.S. payer channel mix due to changes in patient coverage from the current economic crisis, but we are not able to reliably estimate what the impact would be on our results of operations given the highly variable and uncertain situation. It is also possible that changes in the healthcare system could impose additional burdens on clinical trials, which could increase the costs of sponsoring clinical trials or lead to additional delays or difficulties with completing clinical trials. We may also experience additional pricing pressures and/or increased governmental regulation.

We could face additional risk from the impact of COVID-19 on our suppliers, vendors, outsourcing partners, alliance partners and other third parties that we rely on to research, develop, manufacture, commercialize, co-promote and sell our products, manage certain marketing, selling, human resource, finance, IT and other business unit and functional services. For example, if any of our third-party providers suffer from limited solvency because of the pandemic, it could negatively impact our operating model and our business. It is not possible to estimate the potential impact at this time.

The COVID-19 pandemic has increased the volatility of the financial markets, foreign currency exchanges and interest rates. Although we incurred downward adjustments to our equity investment fair values in the first quarter of 2020, the fair values have subsequently recovered. If the U.S. dollar continues to strengthen, interest rates continue to decline, and/or stock markets continue to decline, we could see a further reduction in revenues or other income or additional charges to our equity investments, which could have a negative impact on our earnings and cash flows.

We are facing and could continue to face potential other negative consequences stemming from the COVID-19 pandemic, including but not limited to increased cyber threats to us and our third-party vendors such as phishing, social engineering and malware attacks, delays in planned integration milestones and ability to collect our receivables. It is possible that COVID-19 could exacerbate any of the other risks described in our 2019 Form 10-K as well.

~~At this time, we cannot predict the full extent of the negative impact that the COVID-19 pandemic will have on our business, financial condition, results of operations and/or cash flows.~~

It is possible that the COVID-19 pandemic could delay the timing of the FDA’s approval decisions for liso-cel and ide-cel, which could have a material adverse effect on the CVRs that we issued in connection with the Celgene transaction.

We have submitted BLAs for liso-cel and ide-cel, the two remaining assets underlying the CVRs that we issued in connection with the Celgene transaction (the third CVR asset, Zeposia (ozanimod), was approved earlier this year). These applications are under review by the FDA. Liso-cel has a PDUFA date of November 16, 2020 and ide-cel has a PDUFA date of March 27, 2021. It is possible that COVID-19 could impact FDA operations, including the ability for the FDA to conduct on-site inspections, such that the review of either or both of these CVR assets could be delayed. Any delay in the timing of approval could reduce the resale price of the CVRs. If there is a significant delay that extends the FDA’s review period beyond December 31, 2020 for liso-cel or March 31, 2021 for ide-cel, then no payment will be made under the CVRs and the CVRs will expire without value.

U.S. executive orders on biopharmaceutical pricing and other potential initiatives by the U.S. federal government to implement measures to regulate drug pricing in the future could adversely affect our business.

In July and September, the U.S. federal government issued several executive orders regarding U.S. drug prices and payment for pharmaceutical products, described in greater detail in “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Economic and Market Factors,” which have the potential to significantly impact our ability to discover, develop and deliver medicines for patients across the globe.

While we are unable to predict how or when the executive orders might ultimately be enacted and implemented, the orders, if implemented, would adversely affect our business and results of operations. Even if the executive orders are not finalized in their current form, the U.S. federal government could introduce initiatives similar to the executive orders as well as other initiatives to manage drug utilization and contain costs. Such initiatives could have a material adverse effect on our business and results of operations, particularly to extent the initiatives are not offset by greater demand, increased patient access to health care or other items. See “Item 1A. Risk Factors—Increased pricing pressure and other restrictions in the U.S. and abroad from MCOs, institutional purchasers and government agencies and programs, among others, continue to negatively affect our revenues and profit margins” in our 2019 Form 10-K for more information on the impact on the Company of increasing pricing pressures from market access, pharmaceutical pricing controls and discounting and other restrictions in the U.S., the EU and other regions around the world.

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, 2020:~~March 31, 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, 2020 263,458 $ 59.03 — $ 5,919
August 1 to 31, 2020 98,881 60.18 — 5,919
September 1 to 30, 2020 76,308 61.05 — 5,919
Three months ended September 30, 2020 438,647 —


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
January 1 to 31, 2021	12,543,528	$	64.11	11,467,054	$	5,675
February 1 to 28, 2021	12,475,605	61.11		12,365,100	4,919
March 1 to 31, 2021	6,316,114	62.05		4,453,652	4,641
Three months ended March 31, 2021	31,335,247			28,285,806

(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. ~~In October 2016, the~~The Board of Directors approved a new share repurchase program authorizing the repurchase of an additional $3.0 billion of our common stock ~~and~~ in ~~November 2019~~October 2016 and further increased its authorization for the repurchase of our common stock by approximately $7.0 ~~billion.~~billion in November 2019 and $5.0 billion in February 2020. In ~~February 2020,~~January 2021, the Board of Directors approved an increase of ~~$5.0~~$2.0 billion to the ~~total outstanding~~ share repurchase ~~authorization.~~authorization for our common stock. The remaining share repurchase capacity under the program was approximately ~~$5.9~~$4.6 billion as of ~~September 30, 2020. The share repurchase program does not have an expiration date.~~March 31, 2021. Refer to “Item 1. Financial ~~Statements—Note~~Statements-Note 15. Equity” for information on the share repurchase program.

Item 6. EXHIBITS

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


Exhibit No.						Description
31a.						Section 302 Certification Letter.
31b.						Section 302 Certification Letter.
32a.						Section 906 Certification Letter.
32b.						Section 906 Certification Letter.
101.INS						XBRL Instance Document - the instance document does not appear in the 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 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 Gilead Sciences, Inc.; Avapro/Avalide (known in the EU as Aprovel/Karvea) and Plavix are trademarks of Sanofi; Byetta is a trademark of Amylin Pharmaceuticals, LLC; Cabometyx is a trademark of Exelixis, Inc.; Erbitux is a trademark of ImClone LLC; Onglyza is a trademark of AstraZeneca AB; Gleevec is a trademark of Novartis ~~International~~ AG; Keytruda is a trademark of Merck Sharp & Dohme Corp; Otezla is a trademark of Amgen Inc.; Tecentriq is a trademark of Genentech, Inc.; and Yescarta is a trademark of Kite Pharma, Inc. Brand names of products that are in all italicized letters, without an asterisk, are registered trademarks of BMS and/or one of its subsidiaries.

5849

SUMMARY OF ABBREVIATED TERMS

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


~~2019~~2020 Form 10-K	Annual Report on Form 10-K for the fiscal year ended December 31, ~~2019~~	~~Lilly~~	~~Eli Lilly and Company~~
~~ALK~~	~~anaplastic lymphoma kinase~~2020	LOE	loss of exclusivity
Amgen	Amgen Inc.	MAA	market authorization application
AML	acute myeloid leukemia	MDL	multi-district litigation
Amylin	Amylin Pharmaceuticals, Inc.	MDS	myelodysplastic syndromes
aNDA	abbreviated new drug applications	MPM	malignant pleural mesothelioma
AstraZeneca	AstraZeneca PLC	MyoKardia	MyoKardia, Inc.
BCMA	B-cell maturation antigen	NDA	New drug application
~~Biohaven~~BLA	~~Biohaven Pharmaceutical Holding Company Ltd.~~biologics license application	NKT	natural killer T cells
~~BLA~~bluebird	~~biologics license application~~bluebird bio, Inc.	NSCLC	non-small cell lung cancer
~~bluebird~~	~~bluebird bio, Inc.~~	~~NVAF~~	~~non-valvular atrial fibrillation~~
CAR T	chimeric antigen receptor T-cell	~~Ono~~NVAF	~~Ono Pharmaceutical Co., Ltd.~~
~~Catalent~~	~~Catalent, Inc.~~	~~ORR~~	~~overall response rate~~non-valvular atrial fibrillation
Celgene	Celgene Corporation	~~OTC~~oHCM	~~over-the-counter~~obstructive hypertrophic cardiomyopathy
CERCLA	U.S. Comprehensive Environmental Response, Compensation and Liability Act	~~Otsuka~~Ono	~~Otsuka~~Ono Pharmaceutical Co., Ltd.
CML	chronic myeloid leukemia	OTC	over-the-counter
CVR	contingent value rights	Otsuka	Otsuka Pharmaceutical Co., Ltd.
EC	European Commission	PD-1	programmed cell death protein 1
~~CVR~~EMA	~~contingent value rights~~European Medicines Agency	PD-L1	programmed death-ligand 1
~~Dragonfly~~EPS	~~Dragonfly Therapeutics, Inc.~~earnings per share	PDUFA	The Prescription Drug User Fee Act
ECESCC	~~European Commission~~esophageal squamous cell carcinoma	Pfizer	Pfizer, Inc.
~~EGFR~~EU	~~estimated glomerular filtration rate~~European Union	PsA	psoriatic arthritis
~~EMA~~FASB	~~European Medicines Agency~~Financial Accounting Standards Board	Quarterly Report on Form 10-Q	Quarterly Report on Form 10-Q for the quarterly period ended ~~September 30, 2020~~
~~EPS~~	~~earnings per share~~	~~R&D~~	~~research and development~~
~~ESCC~~	~~esophageal squamous cell carcinoma~~	RA	~~rheumatoid arthritis~~
EU	~~European Union~~	~~RCC~~	~~renal cell carcinoma~~
~~FASB~~	~~Financial Accounting Standards Board~~	~~Repare~~	~~Repare Therapeutics Inc.~~March 31, 2021
FDA	U.S. Food and Drug Administration	R&D	research and development
GAAP	U.S. generally accepted accounting principles	RA	rheumatoid arthritis
GTN	gross-to-net	RCC	renal cell carcinoma
HCC	hepatocellular carcinoma	RMS	relapsing forms of multiple sclerosis
~~Forbius~~HIV	~~Forbius Biologics, Inc.~~human immunodeficiency viruses	RRMM	relapsed and refractory multiple myeloma
~~GAAP~~IO	~~U.S. generally accepted accounting principles~~	~~RRMS~~	~~relapsing remitting multiple sclerosis~~
~~GTN~~	~~gross-to-net~~immuno-oncology	Sanofi	Sanofi S.A.
~~HCC~~IPRD	~~hepatocellular carcinoma~~in-process research and development	SEC	Securities and Exchange Commission
~~HIV~~	~~human immunodeficiency viruses~~	UC	~~ulcerative colitis~~
IO	~~immuno-oncology~~	~~U.S.~~	~~United States~~
~~IPRD~~	~~in-process research and development~~	UK	~~United Kingdom~~
IRS	Internal Revenue Service	~~VAT~~UC	~~value added tax~~ulcerative colitis
JIA	juvenile idiopathic arthritis	~~ViiV~~U.S.	~~ViiV Healthcare Limited~~United States
Juno	Juno Therapeutics, Inc.	UK	United Kingdom
LIBOR	London Interbank Offered Rate	VAT	value added tax
Lilly	Eli Lilly and Company	VTE	venous thromboembolic

5950

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:	~~November 5, 2020~~April 29, 2021	By:	/s/ Giovanni Caforio, M.D.
			Giovanni Caforio, M.D. Chairman of the Board and Chief Executive Officer

Date:	~~November 5, 2020~~April 29, 2021	By:	/s/ David V. Elkins
			David V. Elkins Chief Financial Officer

6051


	Three Months Ended September 30,				Nine Months Ended September 30,
COMPREHENSIVE INCOME	2020		2019		2020		2019
Net Earnings	$	1,878	$	1,366	$	1,032	$	4,520
Other Comprehensive (Loss)/Income, net of taxes and reclassifications to earnings:
Derivatives qualifying as cash flow hedges	(132)		38		(121)		24
Pension and postretirement benefits	(4)		1,116		5		1,204
Available-for-sale debt securities	(2)		4		7		43
Foreign currency translation	(5)		0		(70)		28
Other Comprehensive (Loss)/Income	(143)		1,158		(179)		1,299

Comprehensive Income	1,735		2,524		853		5,819
Comprehensive Income Attributable to Noncontrolling Interest	6		13		20		25
Comprehensive Income Attributable to BMS	$	1,729	$	2,511	$	833	$	5,794


Dollars in Millions	Amounts Recognized as of Acquisition Date (as previously reported)		Measurement Period Adjustments		Amounts Recognized as of Acquisition Date (as adjusted)
Cash and cash equivalents	$	11,179	$	—	$	11,179
Receivables	2,652		—		2,652
Inventories	4,511		—		4,511


Property, plant and equipment	1,342		(277)		1,065
Intangible assets	64,027		(100)		63,927

Otezla* assets held-for-sale	13,400		—		13,400
Other assets	3,408		45		3,453

Accounts payable	(363)		—		(363)

Income taxes payable	(2,718)		(47)		(2,765)
Deferred income tax liabilities	(7,339)		2,350		(4,989)

Debt	(21,782)		—		(21,782)
Other liabilities	(4,017)		15		(4,002)
Identifiable net assets acquired	64,300		1,986		66,286
Goodwill	15,969		(1,986)		13,983
Total consideration transferred	$	80,269	$	—	$	80,269


Dollars in Millions	Three Months Ended September 30, 2020		Nine Months Ended September 30, 2020
Employee termination costs	$	133	$	386
Other termination costs	36		42
Provision for restructuring	169		428
Integration expenses	195		535
Accelerated depreciation	6		6
Asset impairments	3		42
Other	0		3
Total charges	$	373	$	1,014


	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	$	0	$	(7)	$	0	$	(21)
Cross-currency interest rate swap contracts	0		(3)		0		(8)
Foreign currency forward contracts	(5)		14		(63)		(41)
Foreign currency zero-cost collar contracts	0		0		0		1