BRISTOL MYERS SQUIBB CO, 10-Q filed on 7/28/2021
Quarterly Report
v3.21.2
Document and Entity Information
6 Months Ended
Jun. 30, 2021
shares
Entity Incorporation, State or Country Code DE
Document Type 10-Q
Document Quarterly Report true
Entity File Number 001-01136
Entity Registrant Name BRISTOL MYERS SQUIBB CO
Entity Address, Address Line One 430 E. 29th Street, 14FL
Entity Address, City or Town New York
Entity Address, State or Province NY
Entity Address, Postal Zip Code 10016
City Area Code 212
Local Phone Number 546-4000
Entity Central Index Key 0000014272
Entity Tax Identification Number 22-0790350
Entity Current Reporting Status Yes
Entity Interactive Data Current Yes
Entity Filer Category Large Accelerated Filer
Entity Common Stock, Shares Outstanding 2,222,113,553
Document Period End Date Jun. 30, 2021
Document Transition Report false
Document Fiscal Year Focus 2021
Document Fiscal Period Focus Q2
Current Fiscal Year End Date --12-31
Amendment Flag false
Entity Small Business false
Entity Shell Company false
Entity Emerging Growth Company false
Common Stock $0.10 Par Value [Member]  
Title of 12(b) Security Common Stock, $0.10 Par Value
Trading Symbol BMY
Security Exchange Name NYSE
1.000% Notes due 2025 [Member]  
Title of 12(b) Security 1.000% Notes due 2025
Trading Symbol BMY25
Security Exchange Name NYSE
1.750% Notes due 2035 [Member]  
Title of 12(b) Security 1.750% Notes due 2035
Trading Symbol BMY35
Security Exchange Name NYSE
Celgene Contingent Value Rights [Member]  
Title of 12(b) Security Celgene Contingent Value Rights
Trading Symbol CELG RT
Security Exchange Name NYSE
v3.21.2
CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED) - USD ($)
$ in Millions
3 Months Ended 6 Months Ended
Jun. 30, 2021
Jun. 30, 2020
Jun. 30, 2021
Jun. 30, 2020
Total Revenues $ 11,703 $ 10,129 $ 22,776 $ 20,910
Cost of products sold 2,452 [1] 2,699 [1] 5,293 6,361
Marketing, selling and administrative 1,882 1,628 3,548 3,234
Research and development 3,271 2,522 5,496 4,894
Amortization of acquired intangible assets 2,547 2,389 5,060 4,671
Other (income)/expense, net (2) (736) (704) 427
Total Expenses 10,150 8,502 18,693 19,587
Earnings Before Income Taxes 1,553 1,627 4,083 1,323
Provision for Income Taxes 492 1,707 993 2,169
Net Earnings/(Loss) 1,061 (80) 3,090 (846)
Noncontrolling Interest 6 5 14 14
Net Earnings/(Loss) Attributable to BMS $ 1,055 $ (85) $ 3,076 $ (860)
Earnings/(Loss) Per Share, Basic $ 0.47 $ (0.04) $ 1.38 $ (0.38)
Earnings/(Loss) Per Share, Diluted $ 0.47 $ (0.04) $ 1.36 $ (0.38)
Net product sales [Member]        
Total Revenues $ 11,405 $ 9,817 $ 22,203 $ 20,358
Alliance and other revenues [Member]        
Total Revenues $ 298 $ 312 $ 573 $ 552
[1] Excludes amortization of acquired intangible assets
v3.21.2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) - USD ($)
$ in Millions
3 Months Ended 6 Months Ended
Jun. 30, 2021
Jun. 30, 2020
Jun. 30, 2021
Jun. 30, 2020
Statement of Comprehensive Income [Abstract]        
Net Earnings/(Loss) $ 1,061 $ (80) $ 3,090 $ (846)
Derivatives qualifying as cash flow hedges 6 (59) 286 11
Pension and postretirement benefits 15 (7) 38 9
Available-for-sale debt securities (2) 8 (4) 9
Foreign currency translation 7 51 1 (65)
Other Comprehensive Income/(Loss) 26 (7) 321 (36)
Comprehensive Income/(Loss) 1,087 (87) 3,411 (882)
Comprehensive Income Attributable to Noncontrolling Interest 6 5 14 14
Comprehensive Income/(Loss) Attributable to BMS $ 1,081 $ (92) $ 3,397 $ (896)
v3.21.2
CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($)
$ in Millions
Jun. 30, 2021
Dec. 31, 2020
Current Assets:    
Cash and cash equivalents $ 11,024 $ 14,546
Marketable debt securities 1,946 1,285
Receivables 9,017 8,501
Inventories 2,137 2,074
Other current assets 5,037 3,786
Total current assets 29,161 30,192
Property, plant and equipment 5,795 5,886
Goodwill 20,529 20,547
Other intangible assets 48,065 53,243
Deferred income taxes 650 1,161
Marketable debt securities 143 433
Other non-current assets 6,454 7,019
Total Assets 110,797 118,481
Current Liabilities:    
Short-term debt obligations 2,655 2,340
Accounts payable 3,609 2,713
Other current liabilities 12,727 14,027
Total Current Liabilities 18,991 19,080
Deferred income taxes 4,931 5,407
Long-term debt 42,503 48,336
Other non-current liabilities 7,498 7,776
Total Liabilities 73,923 80,599
Bristol-Myers Squibb Company Shareholders' Equity:    
Preferred stock 0 0
Common stock 292 292
Capital in excess of par value of stock 44,064 44,325
Accumulated other comprehensive loss (1,518) (1,839)
Retained earnings 22,168 21,281
Less cost of treasury stock (28,198) (26,237)
Total Bristol-Myers Squibb Company Shareholders' Equity 36,808 37,822
Noncontrolling Interest 66 60
Total Equity 36,874 37,882
Total Liabilities and Equity $ 110,797 $ 118,481
v3.21.2
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($)
$ in Millions
6 Months Ended
Jun. 30, 2021
Jun. 30, 2020
Cash Flows From Operating Activities:    
Net Earnings/(Loss) $ 3,090 $ (846)
Adjustments to Reconcile Net Income (Loss) to Cash Provided by (Used in) Operating Activities [Abstract]    
Depreciation and amortization, net 5,380 5,035
Deferred income taxes (95) 1,365
Share-based compensation 308 423
Impairment charges 579 116
Pension settlements and amortization 25 22
Divestiture gains and royalties (302) (295)
Asset acquisition charges 801 361
Equity investment (gains)/losses (749) (480)
Contingent consideration fair value adjustments (510) 391
Other adjustments 204 (91)
Increase (Decrease) in Other Operating Assets and Liabilities, Net [Abstract]    
Receivables (626) (197)
Inventories 111 2,090
Accounts payable 158 480
Income taxes payable (795) 185
Other (695) (129)
Net Cash Provided by Operating Activities 6,884 8,430
Cash Flows From Investing Activities:    
Sale and maturities of marketable debt securities 1,968 3,537
Purchase of marketable debt securities (2,343) (1,957)
Proceeds from sales of equity investment securities 814 12
Capital expenditures (383) (317)
Divestiture and other proceeds 382 336
Acquisition and other payments, net of cash acquired (401) (445)
Net Cash Provided by Investing Activities 37 1,166
Cash Flows From Financing Activities:    
Short-term debt obligations, net (185) (22)
Repayments of Long-term Debt (5,522) 0
Repurchase of common stock (3,011) (81)
Dividends (2,207) (2,038)
Other 448 94
Net Cash (Used in)/Provided by Financing Activities (10,477) (2,047)
Effect of Exchange Rate on Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents (20) (7)
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Period Increase (Decrease), Including Exchange Rate Effect (3,576) 7,542
Cash, Cash Equivalents and Restricted Cash at Beginning of Period 14,973 12,820
Cash, Cash Equivalents and Restricted Cash at End of Period $ 11,397 $ 20,362
v3.21.2
BASIS OF PRESENTATION AND RECENTLY ISSUED ACCOUNTING STANDARDS (Notes)
6 Months Ended
Jun. 30, 2021
BASIS OF PRESENTATION AND RECENTLY ISSUED ACCOUNTING STANDARDS [Abstract]  
Basis of Presentation and Recently Issued Accounting Standards [Text Block]
Basis of Consolidation

Bristol-Myers Squibb Company (“BMS”) 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 June 30, 2021 and December 31, 2020, the results of operations for the three and six months ended June 30, 2021 and 2020, and cash flows for the six months ended June 30, 2021 and 2020. All intercompany balances and transactions have been eliminated. These financial statements and the related notes should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2020 included in the 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 consolidated financial statements to the current period presentation. Cash payments resulting from 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 $267 million in the six months ended June 30, 2020. Proceeds received from the sale of equity investment securities previously presented in Divestiture and other proceeds in the consolidated statements of cash flows is now presented separately in Proceeds from sales of equity investment securities. These reclassifications did not have an impact on net assets or net earnings.

Recently Adopted Accounting Standards

In December 2019, the FASB issued amended guidance on the accounting and reporting of income taxes. The guidance is intended to simplify the accounting for income taxes by removing exceptions related to certain intraperiod tax allocations and deferred tax liabilities; clarifying guidance primarily related to evaluating the step-up tax basis for goodwill in a business combination; and reflecting enacted changes in tax laws or rates in the annual effective tax rate. BMS adopted the new guidance effective January 1, 2021. The amended guidance did not have a material impact on BMS’s results of operations.
v3.21.2
REVENUE RECOGNITION Revenue Recognition (Notes)
6 Months Ended
Jun. 30, 2021
Revenue Recognition [Abstract]  
Revenue from Contract with Customer [Text Block] REVENUE
The following table summarizes the disaggregation of revenue by nature:
Three Months Ended June 30,Six Months Ended June 30,
Dollars in Millions2021202020212020
Net product sales$11,405 $9,817 $22,203 $20,358 
Alliance revenues159 163 301 268 
Other revenues139 149 272 284 
Total Revenues$11,703 $10,129 $22,776 $20,910 

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

The following table summarizes GTN adjustments:
Three Months Ended June 30,Six Months Ended June 30,
Dollars in Millions2021202020212020
Gross product sales$16,782 $13,788 $32,341 $28,474 
GTN adjustments(a)
Charge-backs and cash discounts(1,720)(1,292)(3,306)(2,632)
Medicaid and Medicare rebates(2,139)(1,482)(3,857)(2,980)
Other rebates, returns, discounts and adjustments(1,518)(1,197)(2,975)(2,504)
Total GTN adjustments(5,377)(3,971)(10,138)(8,116)
Net product sales$11,405 $9,817 $22,203 $20,358 
(a)    Includes adjustments for provisions for product sales made in prior periods resulting from changes in estimates of $85 million and $302 million for the three and six months ended June 30, 2021, and $44 million and $116 million for the three and six months ended June 30, 2020, respectively.
The following table summarizes the disaggregation of revenue by product and region:
Three Months Ended June 30,Six Months Ended June 30,
Dollars in Millions2021202020212020
Prioritized Brands
Revlimid$3,202 $2,884 $6,146 $5,799 
Eliquis2,792 2,163 5,678 4,804 
Opdivo1,910 1,653 3,630 3,419 
Orencia814 750 1,572 1,464 
Pomalyst/Imnovid854 745 1,627 1,458 
Sprycel541 511 1,011 1,032 
Yervoy510 369 966 765 
Abraxane296 308 610 608 
Empliciti86 97 171 194 
Reblozyl128 55 240 63 
Inrebic16 15 32 27 
Onureg12 — 27 — 
Zeposia28 46 
Breyanzi17 — 17 — 
Abecma24 — 24 — 
Established Brands
Vidaza45 126 99 284 
Baraclude109 121 222 243 
Other Brands319 331 658 749 
Total Revenues$11,703 $10,129 $22,776 $20,910 
United States$7,388 $6,487 $14,398 $13,253 
Europe2,689 2,136 5,242 4,703 
Rest of the World1,435 1,334 2,781 2,669 
Other(a)
191 172 355 285 
Total Revenues$11,703 $10,129 $22,776 $20,910 
(a)    Other revenues include royalties and alliance-related revenues for products not sold by BMS’s regional commercial organizations.

Revenue recognized from performance obligations satisfied in prior periods was $146 million and $430 million for the three and six months ended June 30, 2021 and $98 million and $228 million for the three and six months ended June 30, 2020, respectively, consisting primarily of revised estimates for GTN adjustments related to prior period sales and royalties for out-licensing arrangements. Contract assets were not material at June 30, 2021 and December 31, 2020.
v3.21.2
ALLIANCES
6 Months Ended
Jun. 30, 2021
ALLIANCES [Abstract]  
Collaborative Arrangement Disclosure [Text Block] ALLIANCESBMS 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 June 30,Six Months Ended June 30,
Dollars in Millions2021202020212020
Revenues from alliances:
Net product sales$2,805 $2,201 $5,687 $4,924 
Alliance revenues159 163 301 268 
Total Revenues$2,964 $2,364 $5,988 $5,192 
Payments to/(from) alliance partners:
Cost of products sold$1,346 $1,050 $2,743 $2,356 
Marketing, selling and administrative(48)(38)(97)(78)
Research and development736 233 743 279 
Other (income)/expense, net(14)(16)(19)(31)
Dollars in MillionsJune 30,
2021
December 31,
2020
Selected Alliance Balance Sheet information:
Receivables – from alliance partners$349 $343 
Accounts payable – to alliance partners2,032 1,093 
Deferred income from alliances(a)
349 366 
(a)    Includes unamortized upfront and milestone payments.

Specific information pertaining to significant alliances including their nature and purpose; the significant rights and obligations of the parties; and specific accounting policy elections are discussed in the 2020 Form 10-K.

Eisai

In the second quarter of 2021, BMS and Eisai commenced an exclusive global strategic collaboration for the co-development and co-commercialization of MORAb-202, a selective folate receptor alpha antibody-drug conjugate being investigated in endometrial, ovarian, lung and breast cancers. MORAb-202 is currently in Phase I/II clinical trials for solid tumors.

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

A $650 million upfront collaboration fee was included in Research and development expense in the second quarter of 2021 and paid in the third quarter of 2021. BMS is also obligated to pay up to $2.5 billion upon the achievement of contingent development, regulatory and sales-based milestones.
v3.21.2
DIVESTITURES, LICENSING AND OTHER ARRANGEMENTS (Notes)
6 Months Ended
Jun. 30, 2021
Acquisitions, Divestitures and Other Arrangements [Abstract]  
Divestitures, Licensing and Other Arrangements [Text Block] DIVESTITURES, LICENSING AND OTHER ARRANGEMENTS
Divestitures

The following table summarizes the financial impact of divestitures including royalties, which are included in Other (income)/expense, net. Revenue and pretax earnings related to all divestitures were not material in all periods presented (excluding divestiture gains or losses).
Three Months Ended June 30,
Net Proceeds(a)
Divestiture (Gains)/LossesRoyalty Income
Dollars in Millions202120202021202020212020
Diabetes Business$132 $127 $— $— $(152)$(129)
Erbitux* Business
— — — — 
Manufacturing Operations23 10 — — — — 
Mature Brands and Other41 (11)— (1)
Total$202 $141 $(11)$$(152)$(130)
Six Months Ended June 30,
Net Proceeds(a)
Divestiture (Gains)/LossesRoyalty Income
Dollars in Millions202120202021202020212020
Diabetes Business$296 $280 $— $— $(286)$(256)
Erbitux* Business
— — — — 
Manufacturing Operations23 10 — (1)— — 
Plavix* and Avapro*/Avalide*
— (12)— — 
Mature Brands and Other52 32 (11)(1)(32)
Total$382 $336 $(11)$(7)$(287)$(288)
(a)    Includes royalties received subsequent to the related sale of the asset or business.

Licensing and Other Arrangements

The following table summarizes the financial impact of Keytruda* royalties, Tecentriq* royalties, up-front licensing fees and milestones for 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 Millions2021202020212020
Keytruda* royalties
$(204)$(155)$(396)$(316)
Tecentriq* royalties
(23)— (45)— 
Up-front licensing fees— — — (30)
Contingent milestone income(2)(5)(2)(46)
Amortization of deferred income(15)(15)(30)(30)
Other royalties(9)(6)(12)(11)
Total$(253)$(181)$(485)$(433)

Agenus

In July 2021, BMS obtained a global exclusive license to Agenus’ proprietary AGEN1777 bispecific antibody program that blocks TIGIT and an additional target. AGEN1777 is being studied in oncology and is in preclinical development. BMS will be responsible for the development and any subsequent commercialization of AGEN1777 and its related products worldwide, including strategic decisions, regulatory responsibilities, funding and manufacturing. BMS paid a $200 million upfront licensing fee to Agenus and is obligated to pay up to $1.4 billion upon achievement of contingent development, regulatory and sales-based milestones as well as royalties on global net sales.
v3.21.2
OTHER EXPENSE (INCOME), NET
6 Months Ended
Jun. 30, 2021
Other Nonoperating Income (Expense) [Abstract]  
Other (Income)/Expense [Text Block] OTHER (INCOME)/EXPENSE, NET
Three Months Ended June 30,Six Months Ended June 30,
Dollars in Millions2021202020212020
Interest expense$330 $357 $683 $719 
Contingent consideration— (165)(510)391 
Royalties and licensing income(405)(311)(772)(721)
Equity investment gains(148)(818)(749)(480)
Integration expenses152 166 293 340 
Provision for restructuring78 115 123 275 
Litigation and other settlements44 (1)36 31 
Transition and other service fees(22)(50)(37)(111)
Investment income(12)(25)(21)(86)
Reversion excise tax— — — 76 
Divestiture (gains)/losses(11)(11)(7)
Intangible asset impairment— 21 — 21 
Loss on debt redemption— — 281 — 
Other(8)(34)(20)(21)
Other (income)/expense, net$(2)$(736)$(704)$427 
v3.21.2
RESTRUCTURING
6 Months Ended
Jun. 30, 2021
Restructuring Charges [Abstract]  
Restructuring and Related Activities Disclosure [Text Block] RESTRUCTURING
Celgene Acquisition Plan

In 2019, a restructuring and integration plan was implemented as an initiative to realize sustainable run rate synergies resulting from cost savings and avoidance from the Celgene 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%). Charges of approximately $3.0 billion are expected to be incurred through 2022. Cumulative charges of approximately $2.3 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 240 and 900 for the six months ended June 30, 2021 and 2020, respectively.

MyoKardia Acquisition Plan

In 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 $95 million have been recognized for these actions.

Company Transformation

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

The following provides the charges related to restructuring initiatives by type of cost:
Three Months Ended June 30,Six Months Ended June 30,
Dollars in Millions2021202020212020
Celgene Acquisition Plan$200 $317 $373 $641 
MyoKardia Acquisition Plan19 — 56 — 
Company Transformation— 23 — 105 
Total charges$219 $340 $429 $746 
Employee termination costs$75 $107 $119 $256 
Other termination costs19 
Provision for restructuring78 115 123 275 
Integration expenses152 166 293 340 
Accelerated depreciation— 11 — 41 
Asset impairments— 39 24 81 
Other shutdown costs, net(11)(11)
Total charges$219 $340 $429 $746 
Cost of products sold$— $11 $24 $27 
Marketing, selling and administrative— — 
Research and development— 39 — 95 
Other (income)/expense, net219 289 405 623 
Total charges$219 $340 $429 $746 
The following summarizes the charges and spending related to restructuring plan activities:
Six Months Ended June 30,
Dollars in Millions20212020
Liability at December 31$148 $100 
Provision for restructuring(a)
114 228 
Foreign currency translation and other(2)
Payments(134)(188)
Liability at June 30
$126 $141 
(a)    Includes a reduction of the liability resulting from changes in estimates of $8 million and $6 million for the six months ended June 30, 2021 and 2020, respectively. Excludes $9 million and $47 million for the six months ended June 30, 2021 and 2020, respectively, of accelerated stock-based compensation relating to the Celgene Acquisition Plan.
v3.21.2
INCOME TAXES
6 Months Ended
Jun. 30, 2021
Income Tax Disclosure [Abstract]  
Income Tax Disclosure [Text Block] INCOME TAXES
Three Months Ended June 30,Six Months Ended June 30,
Dollars in Millions2021202020212020
Earnings Before Income Taxes$1,553 $1,627 $4,083 $1,323 
Provision for Income Taxes492 1,707 993 2,169 
Effective Tax Rate31.7 %104.9 %24.3 %163.9 %

Income taxes in interim periods are determined based on the estimated annual effective tax rates and the tax impact of discrete items that are reflected immediately. The effective tax rates in 2021 and 2020 were impacted by low jurisdictional tax rates attributed to the unwinding of inventory fair value adjustments and intangible asset amortization and contingent value rights fair value adjustments that are not taxable or deductible. The three and six months ended June 30, 2020 includes an $853 million deferred tax charge resulting from an internal transfer of certain intangible assets to the U.S. and an additional $255 million GILTI tax charge upon finalization of the Otezla* divestiture tax consequences with tax authorities. Additional changes to the effective tax rate may occur in future periods due to various reasons, including changes to the estimated pretax earnings mix and tax reserves and revised interpretations or changes to the relevant tax code.

It is reasonably possible that the amount of unrecognized tax benefits at June 30, 2021 could decrease in the range of approximately $430 million to $480 million in the next twelve months as a result of the settlement of certain tax audits and other events. The expected change in unrecognized tax benefits may result in the payment of additional taxes, adjustment of certain deferred taxes and/or recognition of tax benefits.

BMS is currently under examination by a number of tax authorities, which have proposed or are considering proposing material adjustments to tax positions for issues such as transfer pricing, certain tax credits and the deductibility of certain expenses. As previously disclosed, BMS received several notices of proposed adjustments from the IRS related to transfer pricing and other tax positions for the 2008 to 2012 tax years. BMS disagrees with the IRS’s positions and continues to work cooperatively with the IRS to resolve these open tax audits. It is reasonably possible that new issues will be raised by tax authorities that may increase unrecognized tax benefits; however, an estimate of such increases cannot reasonably be made at this time. BMS believes that it has adequately provided for all open tax years by tax jurisdiction.
v3.21.2
EARNINGS/(LOSS) PER SHARE
6 Months Ended
Jun. 30, 2021
Earnings Per Share [Abstract]  
Earnings/(Loss) Per Share [Text Block] EARNINGS/(LOSS) PER SHARE
Three Months Ended June 30,Six Months Ended June 30,
Amounts in Millions, Except Per Share Data2021202020212020
Net Earnings/(Loss) Attributable to BMS Used for Basic and Diluted EPS Calculation$1,055 $(85)$3,076 $(860)
Weighted-Average Common Shares Outstanding – Basic2,227 2,263 2,232 2,261 
Incremental Shares Attributable to Share-Based Compensation Plans25 — 26 — 
Weighted-Average Common Shares Outstanding – Diluted2,252 2,263 2,258 2,261 
Earnings/(Loss) per Common Share
Basic$0.47 $(0.04)$1.38 $(0.38)
Diluted0.47 (0.04)1.36 (0.38)
The total number of potential shares of common stock excluded from the diluted earnings/(loss) per common share computation because of the antidilutive impact was 9 million for both the three and six months ended June 30, 2021 and 127 million for both the three and six months ended June 30, 2020.
v3.21.2
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS
6 Months Ended
Jun. 30, 2021
Fair Value Disclosures [Abstract]  
Fair Value Measurement and Measurement Inputs, Recurring and Nonrecurring [Text Block] FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS
Financial assets and liabilities measured at fair value on a recurring basis are summarized below:
June 30, 2021December 31, 2020
Dollars in MillionsLevel 1Level 2Level 3Level 1Level 2Level 3
Cash and cash equivalents - money market and other securities$— $9,246 $— $— $12,361 $— 
Marketable debt securities:
Certificates of deposit— 1,591 — — 1,020 — 
Corporate debt securities— 498 — — 698 — 
Derivative assets— 131 19 — 42 27 
Equity investments3,275 139 — 3,314 138 — 
Derivative liabilities— 42 — — 270 — 
Contingent consideration liability:
Contingent value rights10 — — 530 — — 
Other acquisition related contingent consideration— — 67 — — 78 

As further described in “Item 8. Financial Statements and Supplementary Data—Note 9. Financial Instruments and Fair Value Measurements” in the Company’s 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 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 would result in corresponding increases or decreases in the fair values of these obligations. The fair value of other acquisition related contingent consideration as of June 30, 2021 was calculated using the following significant unobservable inputs:
Ranges (weighted average) utilized as of:
InputsJune 30, 2021
Discount rate
0.3% to 1.3% (0.6%)
Probability of payment
0% to 80% (2.4%)
Projected year of payment for development and regulatory milestones
2022 to 2028

There were no transfers between levels 1, 2 and 3 during the six months ended June 30, 2021. The following table represents a roll-forward of the fair value of level 3 instruments:
Six Months Ended June 30, 2021Six Months Ended June 30, 2020
Dollars in MillionsAssetLiabilityAssetLiability
Fair value as of January 1$27 $78 $— $106 
Changes in estimated fair value(8)— (36)
Payments— (12)— — 
Foreign exchange— (1)— 
Fair value as of June 30$19 $67 $— $71 
Available-for-sale Debt Securities and Equity Investments

The following table summarizes available-for-sale debt securities:
June 30, 2021December 31, 2020
Dollars in MillionsAmortized CostGross UnrealizedAmortized CostGross Unrealized
GainsLossesFair ValueGainsLossesFair Value
Certificates of deposit$1,591 $— $— $1,591 $1,020 $— $— $1,020 
Corporate debt securities490 — 498 684 14 — 698 
Total available-for-sale debt securities(a)
$2,081 $$— $2,089 $1,704 $14 $— $1,718 
(a)    All marketable debt securities mature within two years as of June 30, 2021 and December 31, 2020.

The following summarizes the carrying amount of equity investments:
Dollars in MillionsJune 30,
2021
December 31,
2020
Equity investments with readily determinable fair values$3,414 $3,452 
Equity investments without readily determinable fair values616 694 
Equity method investments638 549 
Total equity investments$4,668 $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.
Three Months Ended June 30,Six Months Ended June 30,
Dollars in Millions2021202020212020
Net gain/(loss) recognized on equity investments with readily determinable fair values(a)
$11 $778 $448 $550 
Realized gain/(loss) recognized on equity investments with readily determinable fair value sold— (2)— 
Upward adjustments on equity investments without readily determinable fair value99 55 130 130 
Impairments and downward adjustments on equity investments without readily determinable fair value— (14)(1)(202)
Cumulative upward adjustments on equity investments without readily determinable fair value243 
Cumulative impairments and downward adjustments on equity investments without readily determinable fair value(142)
(a)    Net unrealized net gains on equity investments still held were $11 million and $353 million for the three and six months ended June 30, 2021 and $778 million and $550 million for the three and six months ended June 30, 2020, respectively.

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 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 $3.1 billion and Japanese yen of $1.1 billion at June 30, 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 June 30, 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.

Cross-currency interest rate swap contracts of $400 million at June 30, 2021 are designated to hedge Japanese yen currency exposure of BMS’s net investment in its Japan subsidiaries. Contract fair value changes are recorded in the foreign currency translation component of Other Comprehensive Income/(Loss) with a related offset in Other non-current assets or Other non-current liabilities.

Fair Value Hedges — Fixed to floating interest rate swap contracts are designated as fair value hedges and used as an interest rate risk management strategy to create an appropriate balance of fixed and floating rate debt. The contracts and underlying debt for the hedged benchmark risk are recorded at fair value. The effective interest rate for the contracts is one-month LIBOR (0.10% as of June 30, 2021) plus an interest rate spread of 4.6%. Gains or losses resulting from changes in fair value of the underlying debt attributable to the hedged benchmark interest rate risk are recorded in interest expense with an associated offset to the carrying value of debt. Since the specific terms and notional amount of the swap are intended to align with the debt being hedged, all changes in fair value of the swap are recorded in interest expense with an associated offset to the derivative asset or liability on the consolidated balance sheet. As a result, there was no net impact in earnings. If the underlying swap is terminated prior to maturity, then the fair value adjustment to the underlying debt is amortized as a reduction to interest expense over the remaining term of the debt.

The following table summarizes the fair value of outstanding derivatives:
 June 30, 2021December 31, 2020
Asset(a)
Liability(b)
Asset(a)
Liability(b)
Dollars in MillionsNotionalFair ValueNotionalFair ValueNotionalFair ValueNotionalFair Value
Derivatives designated as hedging instruments:
Interest rate swap contracts$255 $16 $— $— $255 $24 $— $— 
Cross-currency interest rate swap contracts400 16 — — — — 400 (10)
Foreign currency forward contracts3,776 90 1,445 (36)231 5,813 (259)
Derivatives not designated as hedging instruments:
Foreign currency forward contracts932 531 (6)1,104 17 336 (1)
Other— 19 — — — 27 — — 
(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 June 30, 2021Six Months Ended June 30, 2021
Dollars in MillionsCost of products soldOther (income)/expense, netCost of products soldOther (income)/expense, net
Interest rate swap contracts$— $(7)$— $(15)
Cross-currency interest rate swap contracts— (3)— (6)
Foreign currency forward contracts59 16 126 (16)
Three Months Ended June 30, 2020Six Months Ended June 30, 2020
Dollars in MillionsCost of products soldOther (income)/expense, netCost of products soldOther (income)/expense, net
Interest rate swap contracts$— $(7)$— $(14)
Cross-currency interest rate swap contracts— (3)— (5)
Foreign currency forward contracts(35)21 (58)(55)
Foreign currency zero-cost collar contracts— 10 — 

The following table summarizes the effect of derivative and non-derivative instruments designated as hedging instruments in Other Comprehensive Income/(Loss):
Three Months Ended June 30,Six Months Ended June 30,
Dollars in Millions2021202020212020
Derivatives qualifying as cash flow hedges
Foreign currency forward contracts gain/(loss):
Recognized in Other Comprehensive Income/(Loss)(a)
$(38)$(34)$221 $63 
Reclassified to Cost of products sold53 (32)89 (52)
Derivatives qualifying as net investment hedges
Cross-currency interest rate swap contracts gain:
Recognized in Other Comprehensive Income/(Loss)— 26 10 
Non-derivatives qualifying as net investment hedges
Non-U.S. dollar borrowings gain:
Recognized in Other Comprehensive Income/(Loss)(16)(32)25 (12)
(a)    The majority is expected to be reclassified into earnings in the next 12 months.

Debt Obligations

Short-term debt obligations include:
Dollars in MillionsJune 30,
2021
December 31,
2020
Non-U.S. short-term borrowings$63 $176 
Current portion of long-term debt2,497 2,000 
Other95 164 
Total$2,655 $2,340 

Long-term debt and the current portion of long-term debt include:
Dollars in MillionsJune 30,
2021
December 31,
2020
Principal Value$43,666 $48,711 
Adjustments to Principal Value:
Fair value of interest rate swap contracts16 24 
Unamortized basis adjustment from swap terminations131 149 
Unamortized bond discounts and issuance costs(279)(303)
Unamortized purchase price adjustments of Celgene debt1,466 1,755 
Total$45,000 $50,336 
Current portion of long-term debt$2,497 $2,000 
Long-term debt42,503 48,336 
Total$45,000 $50,336 

The fair value of long-term debt was $50.6 billion at June 30, 2021 and $58.5 billion at December 31, 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 first quarter of 2021, BMS purchased aggregate principal amount of $3.5 billion of certain of its debt securities for approximately $4.0 billion of cash in a series of tender offers and “make whole” redemptions. In connection with these transactions, a $281 million loss on debt redemption was recognized based on the carrying value of the debt and included in Other (income)/expense, net. In addition, the $500 million 2.875% Notes matured and were repaid.

In the second quarter of 2021, the $1.0 billion 2.550% Notes matured and were repaid.

Interest payments were $807 million and $845 million for the six months ended June 30, 2021 and 2020, respectively, net of amounts related to interest rate swap contracts.

As of June 30, 2021, BMS had four separate revolving credit facilities totaling $6.0 billion, which consisted of a 364-day $2.0 billion facility expiring in January 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 2025 and July 2026, 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 and are extendable annually by one year on the anniversary date with the consent of the lenders. No borrowings were outstanding under any revolving credit facility at June 30, 2021 or December 31, 2020.
v3.21.2
RECEIVABLES
6 Months Ended
Jun. 30, 2021
Accounts Receivable, after Allowance for Credit Loss [Abstract]  
Receivables [Text Block] RECEIVABLES
Dollars in MillionsJune 30,
2021
December 31,
2020
Trade receivables$8,309 $7,882 
Less charge-backs and cash discounts(569)(645)
Less allowance for expected credit loss(27)(18)
Net trade receivables7,713 7,219 
Alliance, royalties, VAT and other1,304 1,282 
Receivables$9,017 $8,501 

Non-U.S. receivables sold on a nonrecourse basis were $638 million and $464 million for the six months ended June 30, 2021 and 2020, respectively. Receivables from the three largest customers in the U.S. represented approximately 58% and 56% of total trade receivables at June 30, 2021 and December 31, 2020, respectively.
v3.21.2
INVENTORIES
6 Months Ended
Jun. 30, 2021
Inventory, Net [Abstract]  
Inventories [Text Block] INVENTORIES
Dollars in MillionsJune 30,
2021
December 31,
2020
Finished goods$891 $932 
Work in process1,852 2,015 
Raw and packaging materials270 207 
Total inventories$3,013 $3,154 
Inventories$2,137 $2,074 
Other non-current assets876 1,080 

Total inventories include fair value adjustments resulting from the Celgene acquisition of $606 million at June 30, 2021 and $774 million at December 31, 2020. Other non-current assets include inventory expected to remain on hand beyond one year in both periods.
v3.21.2
PROPERTY, PLANT AND EQUIPMENT
6 Months Ended
Jun. 30, 2021
Property, Plant and Equipment [Abstract]  
Property, Plant and Equipment [Text Block] PROPERTY, PLANT AND EQUIPMENT
Dollars in MillionsJune 30,
2021
December 31,
2020
Land$169 $189 
Buildings5,705 5,732 
Machinery, equipment and fixtures3,194 3,063 
Construction in progress565 487 
Gross property, plant and equipment9,633 9,471 
Less accumulated depreciation(3,838)(3,585)
Property, plant and equipment$5,795 $5,886 

Depreciation expense was $143 million and $278 million for the three and six months ended June 30, 2021 and $145 million and $315 million for the three and six months ended June 30, 2020, respectively.
v3.21.2
GOODWILL AND OTHER INTANGIBLE ASSETS
6 Months Ended
Jun. 30, 2021
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Intangible Assets Disclosure [Text Block] GOODWILL AND OTHER INTANGIBLE ASSETS
Dollars in MillionsEstimated Useful LivesJune 30,
2021
December 31,
2020
Goodwill$20,529 $20,547 
Other intangible assets:
Licenses
5 – 15 years
327 328 
Acquired marketed product rights
3 – 15 years
60,712 59,076 
Capitalized software
3 – 10 years
1,405 1,325 
IPRD4,360 6,130 
Gross other intangible assets66,804 66,859 
Less accumulated amortization(18,739)(13,616)
Other intangible assets$48,065 $53,243 

In the six months ended June 30, 2021, $1.5 billion of IPRD was reclassified to acquired marketed product rights upon approval of Breyanzi and Abecma in the U.S. Amortization expense of other intangible assets was $2.5 billion and $5.1 billion for the three and six months ended June 30, 2021 and $2.5 billion and $4.8 billion for the three and six months ended June 30, 2020, respectively.

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

In the first quarter of 2021, Inrebic EU regulatory approval milestones of $300 million were achieved resulting in a $385 million increase to the acquired marketed product rights intangible asset, after establishing the applicable deferred tax liability. An impairment charge of $315 million was recognized in Cost of products sold as the carrying value of this asset exceeded the projected undiscounted cash flows of the asset. The charge was equal to the excess of the asset's carrying value over its estimated fair value using discounted cash flow projections.
v3.21.2
SUPPLEMENTAL FINANCIAL INFORMATION
6 Months Ended
Jun. 30, 2021
Supplemental Financial Information [Abstract]  
Additional Financial Information Disclosure [Text Block] SUPPLEMENTAL FINANCIAL INFORMATION
Dollars in MillionsJune 30,
2021
December 31, 2020
Income taxes$2,258 $1,799 
Research and development576 492 
Equity investments1,046 619 
Restricted cash174 89 
Other983 787 
Other current assets$5,037 $3,786 
Dollars in MillionsJune 30,
2021
December 31, 2020
Equity investments$3,622 $4,076 
Inventories876 1,080 
Operating leases1,006 859 
Pension and postretirement234 208 
Restricted cash(a)
199 338 
Other517 458 
Other non-current assets