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 June 30, 2024

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______ to _______

Commission File Number 001-01136

___________________________

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.)

Route 206 & Province Line Road, Princeton, New Jersey 08543

(Address of principal executive offices) (Zip Code)

(609) 252-4621

(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
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, a smaller reporting company, or an emerging growth company. See the definitions 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 July 19, 2024, there were 2,027,395,178 shares outstanding of the Registrant’s $0.10 par value common stock.

BRISTOL-MYERS SQUIBB COMPANY

INDEX TO FORM 10-Q

June 30, 2024

PART I—FINANCIAL INFORMATION
Item 1.
Financial Statements:
Consolidated Statements of Earnings and Comprehensive 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	34
Item 3.
Quantitative and Qualitative Disclosure About Market Risk	54
Item 4.
Controls and Procedures	54
PART II—OTHER INFORMATION
Item 1.
Legal Proceedings	54
Item 1A.
Risk Factors	54
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds	55
Item 5.
Other Information	55
Item 6.
Exhibits	56
Summary of Abbreviated Terms	57
Signatures	58

*    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 June 30,				Six Months Ended June 30,
EARNINGS	2024		2023		2024		2023
Net product sales	$	11,925	$	10,917	$	23,484	$	21,965
Alliance and other revenues	276		309		582		598
Total Revenues	12,201		11,226		24,066		22,563
Cost of products sold(a)	3,267		2,876		6,199		5,442
Marketing, selling and administrative	1,928		1,934		4,295		3,696
Research and development	2,899		2,258		5,594		4,579
Acquired IPRD	132		158		13,081		233
Amortization of acquired intangible assets	2,416		2,257		4,773		4,513
Other (income)/expense, net	273		(116)		354		(529)
Total Expenses	10,915		9,367		34,296		17,934
Earnings/(loss) before income taxes	1,286		1,859		(10,230)		4,629
Income tax (benefit)/provision	(398)		(218)		(6)		285
Net earnings/(loss)	1,684		2,077		(10,224)		4,344
Noncontrolling interest	4		4		7		9
Net earnings/(loss) attributable to BMS	$	1,680	$	2,073	$	(10,231)	$	4,335
Earnings/(Loss) per common share:
Basic	$	0.83	$	0.99	$	(5.05)	$	2.07
Diluted	0.83		0.99		(5.05)		2.06

(a)    Excludes amortization of acquired intangible assets.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS)

Dollars in millions

(UNAUDITED)

	Three Months Ended June 30,				Six Months Ended June 30,
COMPREHENSIVE INCOME/(LOSS)	2024		2023		2024		2023
Net earnings/(loss)	$	1,684	$	2,077	$	(10,224)	$	4,344
Other comprehensive income/(loss), net of taxes and reclassifications to earnings:
Derivatives qualifying as cash flow hedges	54		3		245		(121)
Pension and postretirement benefits	(64)		(11)		(51)		(11)
Marketable debt securities	—		—		(2)		—
Foreign currency translation	(46)		(11)		(102)		26
Total Other Comprehensive Income/(Loss)	(56)		(19)		90		(106)
Comprehensive income/(loss)	1,628		2,058		(10,134)		4,238
Comprehensive income attributable to noncontrolling interest	4		4		7		9
Comprehensive income/(loss) attributable to BMS	$	1,624	$	2,054	(10,141)		4,229

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

3

BRISTOL-MYERS SQUIBB COMPANY

CONSOLIDATED BALANCE SHEETS

Dollars in millions

(UNAUDITED)

ASSETS	June 30, 2024		December 31, 2023
Current assets:
Cash and cash equivalents	$	6,293	$	11,464
Marketable debt securities	360		816
Receivables	11,423		10,921
Inventories	3,077		2,662
Other current assets	5,737		5,907
Total Current assets	26,890		31,770
Property, plant and equipment	6,845		6,646
Goodwill	21,732		21,169
Other intangible assets	29,428		27,072
Deferred income taxes	3,323		2,768
Marketable debt securities	357		364
Other non-current assets	6,071		5,370
Total Assets	$	94,646	$	95,159
LIABILITIES
Current liabilities:
Short-term debt obligations	$	3,531	$	3,119
Accounts payable	3,751		3,259
Other current liabilities	15,983		15,884
Total Current liabilities	23,265		22,262
Deferred income taxes	461		338
Long-term debt	48,858		36,653
Other non-current liabilities	4,993		6,421
Total Liabilities	77,577		65,674
Commitments and Contingencies
EQUITY
BMS Shareholders’ equity:
Preferred stock	—		—
Common stock	292		292
Capital in excess of par value of stock	45,766		45,684
Accumulated other comprehensive loss	(1,456)		(1,546)
Retained earnings	16,103		28,766
Less cost of treasury stock	(43,690)		(43,766)
Total BMS Shareholders’ Equity	17,015		29,430
Noncontrolling interest	54		55
Total Equity	17,069		29,485
Total Liabilities and Equity	$	94,646	$	95,159

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

4

BRISTOL-MYERS SQUIBB COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS

Dollars in millions

(UNAUDITED)

	Six Months Ended June 30,
	2024		2023
Cash Flows From Operating Activities:
Net (loss)/earnings	$	(10,224)	$	4,344
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization, net	5,128		4,861
Deferred income taxes	(1,042)		(1,634)
Stock-based compensation	258		259
Impairment charges	871		67
Divestiture gains and royalties	(550)		(417)
Acquired IPRD	13,081		233
Equity investment (gains)/losses	(209)		213
Other adjustments	20		(9)
Changes in operating assets and liabilities:
Receivables	(540)		(240)
Inventories	(443)		(298)
Accounts payable	41		22
Rebates and discounts	70		(418)
Income taxes payable	(1,033)		(1,235)
Other	(268)		(891)
Net cash provided by operating activities	5,160		4,857
Cash Flows From Investing Activities:
Sale and maturities of marketable debt securities	822		327
Purchase of marketable debt securities	(358)		(555)
Proceeds from sales of equity investments	60		67
Capital expenditures	(546)		(537)
Divestiture and other proceeds	511		421
Acquisition and other payments, net of cash acquired	(21,426)		(262)
Net cash used in investing activities	(20,937)		(539)
Cash Flows From Financing Activities:
Proceeds from issuance of short-term debt obligations	2,987		—
Repayments of short-term debt obligations	(2,731)		—
Other short-term financing obligations, net	409		243
Proceeds from issuance of long-term debt	12,883		—
Repayments of long-term debt	(395)		(1,879)
Repurchase of common stock	—		(1,155)
Dividends	(2,429)		(2,393)
Stock option proceeds and other, net	(103)		(39)
Net cash provided by/(used in) financing activities	10,621		(5,223)
Effect of exchange rates on cash, cash equivalents and restricted cash	(67)		5
Decrease in cash, cash equivalents and restricted cash	(5,223)		(900)
Cash, cash equivalents and restricted cash at beginning of period	11,519		9,325
Cash, cash equivalents and restricted cash at end of period	$	6,296	$	8,425

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

5

Note 1. BASIS OF PRESENTATION AND RECENTLY ISSUED ACCOUNTING STANDARDS

Basis of Consolidation

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

Business Segment Information

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

Use of Estimates and Judgments

Revenues, expenses, assets and liabilities can vary during each quarter of the year. Accordingly, the results and trends in these unaudited consolidated financial statements may not be indicative of full year operating results. The preparation of financial statements requires the use of management estimates, judgments and assumptions. The most significant assumptions are estimates used in determining accounting for acquisitions; impairments of intangible assets; charge-backs, cash discounts, sales rebates, returns and other adjustments; legal contingencies; and income taxes. Actual results may differ from estimates.

Recently Issued Accounting Standards Not Yet Adopted

Income Taxes

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

Segment Reporting

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

6

Note 2. REVENUE

The following table summarizes the disaggregation of revenue by nature:

	Three Months Ended June 30,				Six Months Ended June 30,
Dollars in millions	2024		2023		2024		2023
Net product sales	$	11,925	$	10,917	$	23,484	$	21,965
Alliance revenues	116		179		250		323
Other revenues	160		130		332		275
Total Revenues	$	12,201	$	11,226	$	24,066	$	22,563

The following table summarizes GTN adjustments:

	Three Months Ended June 30,				Six Months Ended June 30,
Dollars in millions	2024		2023		2024		2023
Gross product sales	$	20,780	$	18,111	$	40,075	$	35,399
GTN adjustments(a)
Charge-backs and cash discounts	(2,843)		(2,279)		(5,399)		(4,370)
Medicaid and Medicare rebates	(3,864)		(3,143)		(6,948)		(5,625)
Other rebates, returns, discounts and adjustments	(2,148)		(1,772)		(4,244)		(3,439)
Total GTN adjustments(b)	(8,855)		(7,194)		(16,591)		(13,434)
Net product sales	$	11,925	$	10,917	$	23,484	$	21,965

(a)    Includes reductions/(increases) to GTN adjustments for product sales made in prior periods resulting from changes in estimates of ($19 million) and $61 million for the three and six months ended June 30, 2024 and $11 million and $98 million for the three and six months ended June 30, 2023, respectively.

(b)    Includes U.S. GTN adjustments of $8.0 billion and $14.9 billion for the three and six months ended June 30, 2024 and $6.4 billion and $11.9 billion for the three and six months ended June 30, 2023, respectively.

7

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

	Three Months Ended June 30,				Six Months Ended June 30,
Dollars in millions	2024		2023		2024		2023
Growth Portfolio
Opdivo	$	2,387	$	2,145	4,465		$	4,347
Orencia	948		927		1,746		1,691
Yervoy	630		585		1,213		1,093
Reblozyl	425		234		779		440
Opdualag	235		154		441		271
Abecma	95		132		177		279
Zeposia	151		100		261		178
Breyanzi	153		100		260		171
Camzyos	139		46		223		75
Sotyktu	53		25		97		41
Augtyro	7		—		13		—
Krazati	32		—		53		—
Other Growth products(a)	341		295		660		575
Total Growth Portfolio	5,596		4,743		10,388		9,161
Legacy Portfolio
Eliquis	3,416		3,204		7,136		6,627
Revlimid	1,353		1,468		3,022		3,218
Pomalyst/Imnovid	959		847		1,824		1,679
Sprycel	424		458		798		887
Abraxane	231		258		448		497
Other Legacy products(b)	222		248		450		494
Total Legacy Portfolio	6,605		6,483		13,678		13,402
Total Revenues	$	12,201	$	11,226	$	24,066	$	22,563
United States	$	8,801	$	7,804	$	17,277	$	15,756
International	3,224		3,247		6,414		6,477
Other(c)	176		175		375		330
Total Revenues	$	12,201	$	11,226	$	24,066	$	22,563

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

(b)    Includes other mature brands.

(c)    Other revenues include alliance-related revenues for products not sold by BMS's regional commercial organizations.

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

Revenue recognized from performance obligations satisfied in prior periods was $76 million and $258 million for the three and six months ended June 30, 2024 and $75 million and $241 million for the three and six months ended June 30, 2023, respectively, consisting primarily of royalties for out-licensing arrangements and revised estimates for GTN adjustments related to prior period sales.

Note 3. ALLIANCES

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

8

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 June 30,				Six Months Ended June 30,
Dollars in millions	2024		2023		2024		2023
Revenues from alliances
Net product sales	$	3,470	$	3,320	$	7,232	$	6,852
Alliance revenues	116		179		250		323
Total alliance revenues	$	3,586	$	3,499	$	7,482	$	7,175
To/(from) alliance partners
Cost of products sold	$	1,692	$	1,614	$	3,517	$	3,320
Marketing, selling and administrative	(65)		(64)		(144)		(138)
Research and development	46		36		100		80
Acquired IPRD	80		55		880		55
Other (income)/expense, net	(102)		(15)		(114)		(27)

Dollars in millions	June 30, 2024		December 31, 2023
Selected alliance balance sheet information
Receivables – from alliance partners	$	290	$	233
Accounts payable – to alliance partners	1,627		1,394
Deferred income – from alliances(a)	248		274

(a) Includes unamortized upfront and milestone payments.

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

SystImmune

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

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

Eisai

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

9

Note 4. ACQUISITIONS, DIVESTITURES, LICENSING AND OTHER ARRANGEMENTS

Asset Acquisition

Karuna

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

BMS acquired all of the issued and outstanding shares of Karuna's common stock for $330.00 per share in an all-cash transaction for total consideration of $14.0 billion, or $12.9 billion net of cash acquired. The acquisition was funded primarily with debt proceeds (see "—Note 10. Financing Arrangements" for further detail). The transaction was accounted for as an asset acquisition since KarXT represented substantially all of the fair value of the gross assets acquired. As a result, $12.1 billion was expensed to Acquired IPRD during the six months ended June 30, 2024. Total consideration also included $1.1 billion of vested equity awards and $289 million of unvested equity awards that were paid during the second quarter of 2024.

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

Dollars in millions
Cash consideration for outstanding shares	$	12,606
Cash consideration for equity awards	1,421
Consideration to be paid	14,027
Less: Charge for unvested stock awards(a)	(289)
Transaction costs	55
Total consideration allocated	$	13,793
Cash and cash equivalents	$	1,167
Other assets	67
Intangible assets	100
Deferred income tax asset	542
Deferred income tax liability	(25)
Other liabilities	(180)
Total identifiable assets acquired, net	1,671
Acquired IPRD expense	12,122
Total consideration allocated	$	13,793

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

Business Combinations

RayzeBio

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

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

10

The transaction was accounted for as a business combination requiring all assets acquired and liabilities assumed to be recognized at fair value as of the acquisition date. The purchase price allocation is preliminary as it relates to the valuation of income taxes. 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.

Total consideration for the acquisition consisted of the following:

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

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

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

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

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

Mirati

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

BMS acquired all of the issued and outstanding shares of Mirati's common stock for $58.00 per share in an all-cash transaction for total consideration of $4.8 billion, or $4.1 billion net of cash acquired. Mirati stockholders also received one non-tradeable contingent value right (CVR) for each share of Mirati common stock held, potentially worth $12.00 per share in cash for a total value of approximately $1.0 billion. The payout of the contingent value right is subject to the FDA acceptance of an NDA for MRTX1719 for the treatment of specific indications within seven years of the closing of the transaction. The acquisition was funded through a combination of cash on hand and debt proceeds (see "—Note 10. Financing Arrangements" for further detail).

The transaction was accounted for as a business combination requiring all assets acquired and liabilities assumed to be recognized at fair value as of the acquisition date. The purchase price allocation is preliminary as it relates to the valuation of income taxes. 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.

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Total consideration for the acquisition consisted of the following:

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

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

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

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

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

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

Divestitures

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

	Three Months Ended June 30,
	Net Proceeds				Divestiture (Gains)/Losses				Royalty Income
Dollars in millions	2024		2023		2024		2023		2024		2023
Diabetes business - royalties	$	265	$	185	$	—	$	—	$	(265)	$	(218)
Mature products and other	—		3		—		—		—		—
Total	$	265	$	188	—		$	—	$	(265)	(218)

	Six Months Ended June 30,
	Net Proceeds				Divestiture (Gains)/Losses				Royalty Income
Dollars in millions	2024		2023		2024		2023		2024		2023
Diabetes business - royalties	$	496	$	401	$	—	$	—	$	(536)	$	(406)
Mature products and other	—		7		—		—		—		—
Total	$	496	$	408	—		$	—	$	(536)	(406)

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Licensing and Other Arrangements

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

	Three Months Ended June 30,				Six Months Ended June 30,
Dollars in millions	2024		2023		2024		2023
Keytruda* royalties	$	(137)	$	(284)	$	(270)	$	(563)
Tecentriq* royalties	(11)		(24)		(23)		(54)
Contingent milestone income	(25)		(5)		(25)		(36)
Amortization of deferred income	(12)		(15)		(24)		(27)
Other royalties and licensing income	(6)		(12)		(10)		(23)
Royalty and licensing income	$	(191)	$	(340)	$	(352)	$	(703)

Keytruda* Patent License Agreement

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

Note 5. OTHER (INCOME)/EXPENSE, NET

	Three Months Ended June 30,				Six Months Ended June 30,
Dollars in millions	2024		2023		2024		2023
Interest expense (Note 10)	$	521	$	282	$	946	$	570
Royalty and licensing income (Note 4)	(191)		(340)		(352)		(703)
Royalty income - divestiture (Note 4)	(265)		(218)		(536)		(406)
Investment income	(87)		(95)		(270)		(197)
Litigation and other settlements (a)	69		(7)		71		(332)
Provision for restructuring (Note 6)	260		113		480		180
Integration expenses (Note 6)	74		59		145		126
Equity investment (gain)/losses (Note 9)	(107)		58		(209)		213
Acquisition expense (Note 4)	1		—		50		—
Other	(2)		32		29		20
Other (income)/expense, net	$	273	$	(116)	$	354	$	(529)

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

Note 6. RESTRUCTURING

2023 Restructuring Plan

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

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Celgene and Other Acquisition Plans

Restructuring and integration plans were initiated to realize expected cost synergies resulting from cost savings and avoidance from the acquisitions of Celgene (2019), Turning Point (2022), Mirati (2024), RayzeBio (2024) and Karuna (2024). The remaining charges of approximately $400 million consist primarily of employee termination costs, IT system integration costs, and to a lesser extent, site exit costs, including impairment and accelerated depreciation of property, plant and equipment.

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

	Three Months Ended June 30,				Six Months Ended June 30,
Dollars in millions	2024		2023		2024		2023
2023 Restructuring Plan	$	264	$	170	$	332	$	231
Celgene and Other Acquisition Plans	93		64		337		138
Total charges	$	357	$	234	$	669	$	369
Employee termination costs	$	260	$	109	$	477	$	174
Other termination costs	—		4		3		6
Provision for restructuring	260		113		480		180
Integration expenses	74		59		145		126
Accelerated depreciation	20		12		34		13
Asset impairments	—		50		2		50
Other shutdown costs	3		—		8		—
Total charges	$	357	$	234	$	669	$	369
Cost of products sold	$	3	$	36	$	17	$	37
Marketing, selling and administrative	6		20		12		20
Research and development	14		6		15		6
Other (income)/expense, net	334		172		625		306
Total charges	$	357	$	234	$	669	$	369

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

	Six Months Ended June 30,
Dollars in millions	2024		2023
Beginning balance	$	188	$	47
Provision for restructuring	480		180
Foreign currency translation and other	(3)		1
Payments	(234)		(48)
Ending balance	$	431	$	180

Note 7. INCOME TAXES

	Three Months Ended June 30,						Six Months Ended June 30,
Dollars in millions	2024			2023			2024			2023
Earnings/(Loss) before income taxes	$	1,286		$	1,859		$	(10,230)		$	4,629
Income tax (benefit)/provision	(398)			(218)			(6)			285
Effective tax rate	(30.9)		%	(11.7)		%	0.1		%	6.2		%

Provision for income taxes in interim periods is determined based on the estimated annual effective tax rates and the tax impact of discrete items that are reflected immediately. The effective tax rate for the three months ended June 30, 2024 was primarily impacted by the release of income tax reserves of $644 million related to the resolution of Celgene's 2017-2019 IRS audit and jurisdictional earnings mix resulting from amortization of acquired intangible assets.

The effective tax rate for the six months ended June 30, 2024 was impacted by a $12.1 billion one-time, non-tax deductible charge for the acquisition of Karuna, as well as the aforementioned income tax reserve releases and jurisdictional earnings mix resulting from amortization of acquired intangible assets.

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

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

During the six months ended June 30, 2024 and 2023, income tax payments were $2.1 billion and $3.1 billion, including $799 million and $567 million, respectively, for the transition tax following the TCJA enactment.

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

It is reasonably possible that the amount of unrecognized tax benefits as of June 30, 2024 could decrease in the range of approximately $110 million to $150 million in the next twelve months as a result of the settlement of certain tax audits and other events. The expected change in unrecognized tax benefits may result in the payment of additional taxes, adjustment of certain deferred taxes and/or recognition of tax benefits.

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

Note 8. EARNINGS/(LOSS) PER SHARE

	Three Months Ended June 30,				Six Months Ended June 30,
Dollars in millions, except per share data	2024		2023		2024		2023
Net earnings/(loss) attributable to BMS	$	1,680	$	2,073	$	(10,231)	$	4,335
Weighted-average common shares outstanding – basic	2,027		2,093		2,025		2,096
Incremental shares attributable to share-based compensation plans	2		9		—		11
Weighted-average common shares outstanding – diluted	2,029		2,102		2,025		2,107
Earnings/(Loss) per common share
Basic	$	0.83	$	0.99	$	(5.05)	$	2.07
Diluted	0.83		0.99		(5.05)		2.06

The total number of potential shares of common stock excluded from the diluted (loss)/earnings per common share computation because of the antidilutive impact was 39 million and 44 million for the three and six months ended June 30, 2024, respectively, and not material for the three and six months ended June 30, 2023.

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Note 9. FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS

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

	June 30, 2024						December 31, 2023
Dollars in millions	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Cash and cash equivalents
Money market and other securities	$	—	$	4,004	$	—	$	—	$	8,489	$	—
Marketable debt securities
Certificates of deposit	—		201		—		—		609		—
Commercial paper	—		—		—		—		92		—
Corporate debt securities	—		475		—		—		460		—
U.S. Treasury securities	—		41		—		—		19		—
Derivative assets	—		456		—		—		219		—
Equity investments	494		99		—		318		141		—
Derivative liabilities	—		114		—		—		160		—
Contingent consideration liability
Contingent value rights(a)	2		—		248		4		—		—
Other acquisition related contingent consideration	—		—		—		—		—		8

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

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

Marketable Debt Securities

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

Equity Investments

The following summarizes the carrying amount of equity investments:

Dollars in millions	June 30, 2024		December 31, 2023
Equity investments with readily determinable fair values	$	593	$	459
Equity investments without readily determinable fair values	785		698
Limited partnerships and other equity method investments	622		542
Total equity investments	$	2,000	$	1,699

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

	Three Months Ended June 30,				Six Months Ended June 30,
Dollars in millions	2024		2023		2024	2023
Equity investments with RDFV
Net (gain)/loss recognized	$	(36)	$	47	(122)	188
Less: net (gain)/loss recognized on investments sold	—		(11)		1	(12)
Net unrealized (gain)/loss recognized on investments still held	(36)		58		(123)	200
Equity investments without RDFV
Upward adjustments	(11)		—		(21)	(6)
Net realized (gain)/loss recognized on investments sold	(36)		—		(36)	—
Impairments and downward adjustments	4		—		29	—
Equity in net (income)/loss of affiliates	(28)		11		(59)	31
Total equity investment (gains)/losses	$	(107)	$	58	(209)	213

Cumulative upwards adjustments and cumulative impairments and downward adjustments based on observable price changes in equity investments without readily determinable fair values still held as of June 30, 2024 were $207 million and $85 million, respectively.

Qualifying Hedges and Non-Qualifying Derivatives

Cash Flow Hedges

BMS enters into foreign currency forward and purchased local currency put option contracts (foreign exchange contracts) to hedge certain forecasted intercompany inventory sales, third party sales and certain other foreign currency transactions. The objective of these foreign exchange contracts is to reduce variability caused by changes in foreign exchange rates that would affect the U.S. dollar value of future cash flows derived from foreign currency denominated sales, primarily the euro and Japanese yen. The fair values of these derivative contracts are recorded as either assets (gain positions) or liabilities (loss positions) in the consolidated balance sheets. Changes in fair value for these foreign exchange contracts, which are designated as cash flow hedges, are temporarily recorded in Accumulated other comprehensive loss ("AOCL") and reclassified to net earnings when the hedged item affects earnings (typically within the next 24 months). As of June 30, 2024, assuming market rates remain constant through contract maturities, we expect to reclassify pre-tax gains of $80 million into Cost of products sold for our foreign exchange contracts out of AOCL during the next 12 months. The notional amount of outstanding foreign currency exchange contracts was primarily $4.2 billion for the euro contracts and $1.2 billion for Japanese yen contracts as of June 30, 2024.

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

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

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

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Net Investment Hedges

Cross-currency swap contracts and foreign currency forward contracts of $1.6 billion as of June 30, 2024 are designated to hedge currency exposure of BMS's net investment in its foreign subsidiaries. Contract fair value changes are recorded in the foreign currency translation component of AOCL with a related offset in derivative asset or liability in the consolidated balance sheets. The notional amount of outstanding cross-currency swap and foreign currency forward contracts was primarily attributed to the Japanese yen of $660 million and euro of $593 million as of June 30, 2024.

During the three months ended March 31, 2023, the Company de-designated its remaining net investment hedge in debt denominated in euros of €375 million. The related net investment hedge was entered into to hedge euro currency exposures of the net investment in certain foreign affiliates and was recognized in Long-term debt. The effective portion of foreign exchange gain or loss on the remeasurement of debt denominated in euros was included in the foreign currency translation component of AOCL with the related offset in Long-term debt.

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

Fair Value Hedges

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

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

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

	June 30, 2024								December 31, 2023
	Asset(a)				Liability(b)				Asset(a)				Liability(b)
Dollars in millions	Notional		Fair Value		Notional		Fair Value		Notional		Fair Value		Notional		Fair Value
Designated as cash flow hedges
Foreign currency exchange contracts	$	6,115	$	256	$	403	$	(8)	$	4,772	$	130	$	1,971	$	(66)
Cross-currency swap contracts	583		24		627		(8)		1,210		50		—		—
Designated as net investment hedges
Foreign currency exchange contracts	505		36		377		(2)		—		—		215		(8)
Cross-currency swap contracts	396		29		292		(13)		—		—