INCOME TAXES

9 Months Ended

Sep. 30, 2025

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

	Three Months Ended September 30,						Nine Months Ended September 30,
Dollars in millions	2025			2024			2025			2024
Earnings/(Loss) before income taxes	$	3,114		$	1,676		$	7,858		$	(8,554)
Income tax provision	919			461			1,888			455
Effective tax rate	29.5		%	27.5		%	24.0		%	(5.3)		%

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.

In July 2025, the U.S. enacted into law new tax legislation, the OBBBA, which among other measures, makes permanent many provisions of the TCJA and modifies certain rules, including within the international tax framework. The OBBBA permits businesses to immediately deduct up to 100% of their qualifying domestic R&D expenses in the year they are incurred for tax years beginning after December 31, 2024, and allows businesses to accelerate deductions (over a one- or two-year period) of domestic R&D expenses that were deferred from 2022 to 2024. The estimated tax impacts from the OBBBA are reflected in the Company's income tax provision for the three and nine months ended September 30, 2025 and in the tax asset and liability balances recorded as of September 30, 2025.

The change in the effective tax rate for the three and nine months ended September 30, 2025 was primarily driven by changes in jurisdictional earnings mix and income tax reserves. During the three months ended September 30, 2025, additional reserves of $160 million were recorded for certain transfer pricing matters. Further, the effective tax rate for the nine months ended September 30, 2024 reflects a $12.1 billion one-time, non-tax deductible charge for the acquisition of Karuna as well as the release of income tax reserves related to the resolution of the Celgene 2017-2019 IRS audit.

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

During the nine months ended September 30, 2025 and 2024, income tax payments were $2.2 billion and $3.1 billion, including $991 million and $799 million, respectively, for the transition tax following the TCJA enactment.

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

It is reasonably possible that the amount of unrecognized tax benefits as of September 30, 2025 could decrease in the range of approximately $260 million to $300 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.