# EDGAR Filing Document

**Accession Number:** 0000014272
**File Stem:** 0001140361-23-013447
**Filing Date:** 2023-3
**Character Count:** 184598
**Document Hash:** 85b470554180961304673cd15c615885
**Contains OCR:** False
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## Filing Content

## Filing Summary
**0001140361-23-013447.hdr.sgml**: 20230323

**ACCESSION NUMBER**: 0001140361-23-013447

**CONFORMED SUBMISSION TYPE**: ARS

**PUBLIC DOCUMENT COUNT**: 1

**CONFORMED PERIOD OF REPORT**: 20221231

**FILED AS OF DATE**: 20230323

**DATE AS OF CHANGE**: 20230323

**EFFECTIVENESS DATE**: 20230323

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** BRISTOL MYERS SQUIBB CO
- **CENTRAL INDEX KEY:** 0000014272
- **STANDARD INDUSTRIAL CLASSIFICATION:** PHARMACEUTICAL PREPARATIONS [2834]
- **IRS NUMBER:** 220790350
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** ARS
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-01136
- **FILM NUMBER:** 23756795

**BUSINESS ADDRESS:**
- **STREET 1:** 430 E. 29TH STREET
- **STREET 2:** 14 FLOOR
- **CITY:** NEW YORK
- **STATE:** NY
- **ZIP:** 10016
- **BUSINESS PHONE:** 2125464000

**MAIL ADDRESS:**
- **STREET 1:** 430 E. 29TH STREET
- **STREET 2:** 14 FLOOR
- **CITY:** NEW YORK
- **STATE:** NY
- **ZIP:** 10016

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** BRISTOL MYERS CO
- **DATE OF NAME CHANGE:** 19891012

### Attached PDF Documents

**Attachment 1:** `ny20006581x3_ars.pdf`

![img-0.jpeg](img-0.jpeg)

Bristol Myers SquibbTM

2022 Annual Report

![img-1.jpeg](img-1.jpeg)

# Transforming patients’ lives through scienceTM

## Our Mission

To discover, develop and deliver innovative medicines that help patients prevail over serious diseases

## Our Vision

To be the world’s leading biopharma company that transforms patients’ lives through science

## Our Values

Integrity | Innovation | Urgency | Passion | Accountability | Inclusion

© 2023 Bristol-Myers Squibb Company. All rights reserved.

Transforming patients' lives through science®

# A LETTER FROM
Giovanni
Caforio

“Our employees’ passion and commitment to our mission will help us execute against our long-term strategy, deliver value to our shareholders and bring new scientific breakthroughs to patients around the world.”

![img-2.jpeg](img-2.jpeg)

2022 was an important year for our company, one with significant clinical and regulatory achievements that broadened our portfolio, advanced our pipeline and, importantly, delivered innovative new medicines to our patients.

Despite navigating a persistent global pandemic and ongoing macro and geopolitical challenges, our employees’ dedication to our vision of transforming patients’ lives through science never wavered. Our commitment to executing against our business strategy resulted in strong operational and financial performance in 2022. Total revenues were $46.2 billion, which is consistent with the prior year, or an increase of three percent1 when adjusted for foreign exchange, generating GAAP EPS of $2.95 and non-GAAP EPS2 of $7.70. Our in-line brands and new product portfolio performed well growing nine percent for the full year, or 13 percent when adjusting for foreign exchange, with new products delivering $2.0 billion in revenues.

# Bringing Transformational Medicines to Patients

In 2022, we launched three, new first-in-class medicines: Opdualag® for metastatic melanoma, Camzyos® for obstructive hypertrophic cardiomyopathy and SotyktuTM

for moderate to severe plaque psoriasis. All three of these medicines have the opportunity to change the standard of care for their respective diseases. We also expanded the potential of our new product portfolio through significant clinical milestones throughout the course of the year. We achieved positive top-line results for Reblozyf® in first-line myelodysplastic syndromes and Abecma® in the KarMMa-3 trial, which demonstrated superiority to standard regimens in relapsed and refractory multiple myeloma. Registrational trials were also initiated for Sotyktu in systemic lupus erythematosus, a disease with very high unmet medical need. We also made meaningful investments in our cell therapy franchise to expand manufacturing capacity and supply more product to patients.

We continued to enhance our strong internal research and development capabilities with an extensive network of external collaborations. These include new strategic partnerships with Century and Immatics as well as the acquisition of Turning Point Therapeutics, which expanded our precision oncology portfolio. We augmented our existing artificial intelligence capabilities through a partnership with Owkin to further aid in the acceleration of drug design and development.

Bristol Myers Squibb 2022 Annual Report | 1

Transforming patients' lives through science

## Advancing Multiple Paths for Sustained Growth

As a company, we must constantly evolve our business, so we deliver sustained value to our patients, employees, business partners and shareholders.

Bristol Myers Squibb is well positioned for the future, with multiple paths to growth through the second half of the decade. Ahead of the losses of exclusivity that are scheduled to take place this decade, we have made significant progress toward renewing and transforming our product portfolio. This includes successfully building critical mass across our four core therapeutic areas and diversifying and broadening our pipeline.

Central to our strategy is the potential of our new product portfolio. Over the past three years, we have launched nine new medicines, many of which are either best-in-class or first-in-class medicines that have meaningful potential to expand into additional indications. Our pipeline execution and strong commercial momentum position us well to achieve $10 billion to $13 billion of risk-adjusted revenue in 2025 from this portfolio. As a result of our pipeline advancement, we have significantly de-risked the more than $25 billion of long-term, non-risk-adjusted revenue potential in 2030 from our new products.1

Our second wave of innovation will be bolstered by our exciting mid- and late-stage pipeline. We have six assets in or moving into Phase 3 clinical development across our core therapeutic areas, with expected non-risk-adjusted peak sales potential of greater than $10 billion.2 The assets include milvexian, a next generation anti-thrombotic, our CELMoD agents for multiple myeloma and LPA-1 in lung fibrosis.

Our research teams have built a robust early-stage pipeline, consisting of 50+ assets, with more than 15-20 of these assets expected to progress to proof of concept within the next 18 months. We continue to leverage our financial flexibility to enhance our internal innovation through our disciplined business development strategy. Together, this has resulted in a much younger, more diversified and resilient product portfolio, which will be instrumental in helping navigate an increasingly complex environment in the United States and abroad.

## Living Our Values in the Communities We Serve

As a purpose-driven company and a leader in our industry, Bristol Myers Squibb recognizes our responsibility to benefit the communities we serve. During 2022, we further deepened our commitment to our environmental, social and governance (ESG) principles.

We are collectively working to accelerate innovation, enhance patient access to innovative medicines, build an inclusive, diverse and equitable work environment, and to strengthen our environmental sustainability-all while operating with the highest levels of quality, integrity and ethics.

Bristol Myers Squibb continued to make progress in 2022 across our commitments to health equity and inclusion and diversity (I&D). We exceeded the target set to locate more than 25 percent of our clinical trials in highly diverse regions in the U.S., with more than 58 percent of our clinical trial sites now located in highly diverse U.S. communities. Our efforts were recognized with a Gold Badge rating on the Bioethics International Scorecard on clinical trial diversity. We believe that increasing diversity during discovery and development is a scientific imperative that will help lead to better science and better patient outcomes.

The foundation of our success centers around an inclusive culture that is rooted in diversity of thought, experience and background. In 2022, we increased the number of global executives who are women to 48.7% and in the U.S., our Black/African American and Latino/Hispanic executives increased to 6.1% and 6.1%, respectively. Since announcing our $1 billion Supplier Diversity commitment in 2020, I am pleased to say that we achieved our goal well ahead of the 2025 target date.

As a science-driven company, we understand that human health is inextricably linked to the health of the planet. We consider environmental responsibility as an imperative for doing business and expanding health equity around the world.

## Strongly Positioned to Deliver Long-Term Value

Our accomplishments in 2022 reflect our ongoing progress towards transforming our business. We are very well positioned to advance the commercialization of our new product portfolio, progress our pipeline and invest in future sources of growth due to our strong financial foundation.

Looking ahead, I am very optimistic about the future of our business. This is due to our talented workforce, with their dedication and proven ability to discover, develop and deliver transformational medicines. Our employees' passion and commitment to our mission will help us execute against our long-term strategy, deliver value to our shareholders and bring new scientific breakthroughs to patients around the world.

Giovanni Caforio, M.D.

Board Chair and Chief Executive Officer

March 9, 2023

1 Full year includes unfavorable foreign exchange impact of 3%.

2 This non-GAAP amount excludes certain costs, expenses, gains and losses and other specified items. A reconciliation of GAAP to non-GAAP measures can be found on our website at bms.com. See, "Quarterly package of financial information" available on bms.com/investors for information on the list of specified items excluded from non-GAAP EPS.

3 Non-risk adjusted sales are subject to positive registrational trials and health authority approval. Financial projections may contain non-promoted sales. BMS promotes only according to label.

Bristol Myers Squibb 2022 Annual Report

Bristol Myers Squibb

## Delivered Strong Financial and Operational Performance

### TOTAL NET SALES

$46.2B

Consistent with prior year or, an increase of 3% when excluding foreign exchange

7% In-Line Brand
YoY% growth

87% New Product Portfolio*
YoY% growth

Potential for risk-adjusted sales of $10-$13B revenues in 2025

Potential for $25B+ of non-risk-adjusted revenues in 2030

GAAP EPS1

$2.95

Non-GAAP EPS1,2

$7.70

* New Product Portfolio excludes Reblocy® (laspatercept-aamt), Inrebic® (fedratinib), Onureg® (azacitidine tablets), Zeposia® (azamod), Bireyarsi® (lisocabtagene maraleucel), Abecma® (idecabtagene vicleucel), Opdualag® (relatlimab plus nivolumab), Camzyos® (mavacamten) and SotjktyuTM (deucravacitinib).

1 GAAP and non-GAAP EPS include the net impact of Acquired IPRD charges and licensing income of ($0.24) per share for the full year 2022. Acquired IPRD refers to certain in-process research and development ("Acquired IPRD") charges resulting from upfront or contingent milestone payments in connection with asset acquisitions or licensing of third-party intellectual property rights.

2 This Non-GAAP amount excludes certain costs, expenses, gains and losses and other specified items. A reconciliation of GAAP to non-GAAP measures can be found on our website at bms.com. See, "Quarterly package of financial information" available on bms.com/investors for information on the list of specified items excluded from Non-GAAP EPS.

3 Portfolio achievements from 2H 2019-2022

4 Includes $4.6 billion for dividends paid and $8.0 billion for common stock repurchases.

Transforming patients' lives through science

### Significant Pipeline Advancement in 2022

18 approvals in the US, EU and Japan

9 approvals for Opdivo; Opdivo plus Yervoy

5 positive registrational topline readouts

$9.5B invested in research and development

### Launched 3 First-In-Class Medicines

For metastatic melanoma

For obstructive hypertrophic cardiomyopathy

For moderate to severe plaque psoriasis

### Strategically Positioned for Multiple Waves of Innovation

9 new products launched over ~3 years3

15+ additional indications over ~3 years3

6 high potential mid-late stage registrational assets across therapeutic areas

50+ early-stage assets in development

### Balanced Approach to Capital Allocation

$13.1B in cash flow from operating activities

Reduced debt by

~$5B

Returned cash to shareholders

$12.6B4

Bristol Myers Squibb 2022 Annual Report | 11

Transforming patients' lives through science

# Development Portfolio by Therapeutic Area

Listed below are our clinical studies and approved indications for our marketed products in the related therapeutic area as of February 2, 2023. Whether any of the listed compounds ultimately becomes a marketed product depends on the results of clinical studies, the competitive landscape of the potential product's market, reimbursement decisions by payers and the manufacturing processes necessary to produce the potential product on a commercial scale, among other factors. There can be no assurance that we will seek regulatory approval of any of these compounds or that, if such approval is sought, it will be obtained. There is also no assurance that a compound which gets approved will be commercially successful. At this stage of development, we cannot determine all intellectual property issues or all the patent protection that may, or may not, be available for these investigational compounds.

## Hematology

### Phase I

#### Additional Indications
**OPDIVO**

- Hematologic Malignancies

#### Investigational Compounds
**alnutamab BCMA TCE**

- Relapsed/Refractory Multiple Myeloma

#### Anti-SIRPa

- Hematologic Malignancies

#### BCMA ADC^

- Relapsed/Refractory Multiple Myeloma

#### BCMA NKE

- Relapsed/Refractory Multiple Myeloma

#### BET Inhibitor (CC-90010)^

- Hematologic Malignancies

#### CD33 NKE

- Relapsed/Refractory Multiple Myeloma

#### CD47xCD20

- Non-Hodgkin's Lymphoma

#### CK1a Degrader

- Hematologic Malignancies

#### GPRC5D CAR-T

- Relapsed/Refractory Multiple Myeloma

#### GSPT1 CELMoD (CC-90009)^

- Relapsed/Refractory Acute Myeloid Leukemia

#### iberdomide^

- 1L Diffuse Large B-cell Lymphoma

- 3L+ Follicular Lymphoma

- Relapsed/Refractory Non-Hodgkin Lymphoma

- Large B-cell Lymphoma

### Phase II

#### Additional Indications
**ABECMA**

- 1-4L+ Multiple Myeloma

#### BREYANZI

- 3L+ Chronic Lymphocytic Leukemia

- 3L+ Follicular Lymphoma

- 3L+ Marginal Zone Lymphoma

- 3L+ Mantle Cell Lymphoma

#### ONUREG

- Low-to-Intermediate risk MDS

#### OPDIVO + EMPLICITI

- Relapsed/Refractory Multiple Myeloma

#### REBLOZYL

- A-Thalassemia SubQ

#### IDHIFA

- 1L Acute Myeloid Leukemia

#### Investigational Compounds
**A/I CELMoD (CC-99282)^**

- Relapsed/Refractory Non-Hodgkin Lymphoma

#### BET Inhibitor (BMS-986158)

- Hematologic Malignancies

#### iberdomide

- Newly-Diagnosed Multiple Myeloma

### Phase III

#### Additional Indications
**ABECMA**

- 3-5L Multiple Myeloma

#### INREBIC

- MF Previously treated with Ruxolitinib

#### REBLOZYL

- 1L TD MDS Associated Anemia

- 1L TD MF Associated Anemia

#### Investigational Compounds
**iberdomide**

- 2L+ Multiple Myeloma

#### mezigdomide (CC-92480)

- 2L+ Multiple Myeloma

### Approved Indications

#### ABECMA

- 5L+ Relapsed/Refractory Multiple Myeloma

- 4L+ Relapsed/Refractory Multiple Myeloma

#### BREYANZI

- 2L Large B-cell Lymphoma

- 3L+ Large B-cell Lymphoma

#### EMPLICITI + POMALYST/IMNOVID

- Relapsed/Refractory Multiple Myeloma

#### EMPLICITI + REVLIMID

- Relapsed/Refractory Multiple Myeloma

#### IDHIFA

- Relapsed/Refractory Acute Myeloid Leukemia

#### INREBIC

- Myelofibrosis

#### ONUREG

- Post-Induction Acute Myeloid Leukemia Maintenance

#### OPDIVO

- Advanced Hodgkin Lymphoma

#### POMALYST/IMNOVID

- Multiple Myeloma

- Relapsed/Refractory Multiple Myeloma

- AIDS related Kaposi Sarcoma

- HIV-negative Kaposi Sarcoma

#### REBLOZYL

- Transfusion-Dependent Beta-Thalassemia

- MDS Previously treated with ESA

#### REVLIMID

- 1L Multiple Myeloma

- Mantle Cell Lymphoma

- MDS

- Multiple Myeloma

- Previously treated Follicular Lymphoma

- Relapsed/Refractory Adult T-cell Leukemia/Lymphoma

#### SPRYCEL

- 1L CML

- Pediatric ALL

- Refractory CML

24 | Bristol Myers Squibb 2022 Annual Report

Transforming patients' lives through science*

## Development Portfolio by Therapeutic Area

### Oncology

#### Phase I

##### Additional Indications

OPDIVO*

- Solid Tumors

OPDIVO* + YERVOY*

- Solid Tumors

##### Investigational Compounds

AHR Antagonist^

- Solid Tumors

Anti-CCR8^

- Solid Tumors

Anti-ILT4^

- Solid Tumors

AR-LDD^

- Solid Tumors

Anti-NKG2A^

- Solid Tumors

Claudin 18.2 ADC*

- Advance Solid Tumors

CD3xPSCA Bispecific

- Solid Tumors

DGK Inhibitor

- Solid Tumors

JNK Inhibitor

- Solid Tumors

LSD1 Inhibitor^

- Solid Tumors

MAGE A4/8 TCER*

- Solid Tumors

SHP2 Inhibitor^

- Solid Tumors

TGFβ Inhibitor^

- Solid Tumors

TIGIT Bispecific*

- Solid Tumors

#### Phase II

##### Additional Indications

OPDIVO*

- Solid Tumors

- 2L CRC

- Pan Tumor TMB High

OPDIVO* + YERVOY*

- Solid Tumors

- 2L Metastatic Castration-

Resistant Prostate Cancer

OPDIVO* + CDK4/6 Inhibitor

- Neoadjuvant ER+/HER2-Breast

nivolumab + relatlimab

- 1L Stage IV NSCLC

- 1L/2L Hepatocellular carcinoma

##### Investigational Compounds

Anti-CTLA-4 NF Probody

Therapeutic

- Solid Tumors

Anti-Fucosyl GM1^

- Solid Tumors

Anti-IL8^

- Solid Tumors

Anti-TIGIT^

- Solid Tumors

BET Inhibitor (CC-90010)^

- Solid Tumors

farletuzumab-ecteribulin*

- Solid Tumors

repotrectinib

- ROS1 NSCLC

- NTRK Pan Tumor

#### Phase III

##### Additional Indications

OPDIVO*

- Peri-adjuvant Muscle

Invasive Urothelial

Carcinoma

- Adjuvant Gastric Cancer

- Adjuvant HCC

- Adjuvant Melanoma

- 1L Metastatic Castration-

Resistant Prostate Cancer

- Peri-adjuvant NSCLC Stage

IB-IIIA Adjuvant NSCLC*

OPDIVO* + YERVOY*

- 1L Bladder Cancer

- 1L HCC

- 1L+ MSI-High CRC h

- Adjuvant RCC

- Stage III Unresectable

NSCLC

OPDUALAG (fixed dose

nivolumab + relatlimab)*

- Adjuvant Melanoma

- 2L+ Microsatellite Stable

Metastatic CRC

- 1L Melanoma SubQ

##### Investigational Compounds

subcutaneous nivolumab +

rHuPH20*

- 2L RCC

- Adjuvant Melanoma

#### Approved Indications

##### ABRAXANE

- Breast

- Gastric

- Locally Advanced or Metastatic

NSCLC

- Metastatic Breast Cancer

- NSCLC

- Pancreatic

- Unresectable Pancreatic

##### OPDIVO*

- 1L Metastatic Melanoma

- 1L Gastric

- Esophageal Squamous Cell

Carcinoma

- 1L Esophageal

- Adjuvant Melanoma

- Adjuvant Bladder

- Adjuvant Esophageal/

Gastroesophageal

- Mesothelioma

- Previously treated advanced

RCC

- Previously treated Gastric

cancer (Japan, China)

- Previously treated Metastatic

Head & Neck

- Previously treated Metastatic

Melanoma

- Previously treated Metastatic

MSI-High CRC

- Previously treated Metastatic

Non-squamous NSCLC

- Previously treated Metastatic

Squamous NSCLC

- Previously treated Metastatic

Urothelial Cancer

- Previously treated Esophageal

Cancer

- Neoadjuvant NSCLC

OPDIVO* + cabozantinib*

- Metastatic RCC

OPDIVO* + YERVOY*

- 1L Metastatic Melanoma

- 1L Mesothelioma

- 1L NSCLC

- 1L RCC

- Previously treated Metastatic

MSI-High CRC

- Previously treated HCC

- 1L Esophageal

- 1L Gastric

OPDUALAG (fixed dose

nivolumab + relatlimab)

- 1L Melanoma

##### YERVOY

- Adjuvant Melanoma

- Metastatic Melanoma

Bristol Myers Squibb 2022 Annual Report | >

Transforming patients' lives through science*

## Development Portfolio by Therapeutic Area

### Immunology

#### Phase I

Investigational Compounds
afimetoran (TLR7/8
Inhibitor)

- Cutaneous Lupus Erythematosus

Anti-CD40

- Autoimmune Disease

RIPK1 Inhibitor

- Autoimmune Disease

IL2-CD25

- Autoimmune Disease

PKCθ Inhibitor

- Autoimmune Disease

TYK2 Inhibitor

- Autoimmune Disease

#### Phase II

Additional Indications

SOTYKTU (deucravacitinib)

- Crohn's Disease

- Alopecia Areata

- Ulcerative Colitis

- Discoid Lupus Erythematosus

Investigational Compounds

Afimetoran

- Systemic Lupus

Erythematosus

#### Phase III

Additional Indications

SOTYKTU (deucravacitinib)

- Psoriatic Arthritis

- Systemic Lupus

Erythematosus

ZEPOSIA

- Crohn's Disease

Investigational Compounds
cendakimab

- Eosinophilic Esophagitis

#### Approved Indications

ORENCIA

- Active Polyarticular JIA

- Early Rheumatoid Arthritis

- JIA Intravenous

- JIA Subcutaneous

- Psoriatic Arthritis

- RA Auto injector

- RA Intravenous

- RA Subcutaneous

- Acute Graft versus Host

Disease

SOTYKTU (deucravacitinib)

- Moderate-to-Severe Psoriasis

ZEPOSIA

- Relapsing Multiple Sclerosis

- Moderate-to-Severe

Ulcerative Colitis

### Cardiovascular

#### Phase I

Investigational Compounds

Factor XIa Inhibitor

- Thrombotic Disorders

#### Phase II

Additional Indications

CAMZYOS (mavacamten)

- Heart Failure with Preserved

Ejection Fraction (HFpEF)

Investigational Compounds

Cardiac Myosin Inhibitor

(MYK-224)

- Obstructive Hypertrophic

Cardiomyopathy

danicamtiv

- Genetic Dilated

Cardiomyopathy

#### Phase III

Additional Indications

CAMZYOS (mavacamten)

- Non-obstructive

Hypertrophic

Cardiomyopathy

Investigational Compounds

milvexian*

- Secondary Stroke

Prevention (SSP) \( ^{4} \)

#### Approved Indications

CAMZYOS (mavacamten)

- Symptomatic

Obstructive Hypertrophic

Cardiomyopathy

ELIQUIS

- Stroke Prevention in Atrial

Fibrillation

- Venous Thromboembolism

Prevention

- Orthopedic Surgery

- Venous Thromboembolism

Treatment

### Fibrotic Diseases

#### Phase II

Investigational Compounds

HSP47

- Non-Alcoholic

Steatohepatitis

LPA, Antagonist

- Pulmonary Fibrosis

### Neuroscience

#### Phase I

Investigational Compounds

Anti-Tau

- Neuroscience

BTK Inhibitor

- Neuroscience

eIF2b Activator*

- Neuroscience

FAAH/MGLL Dual Inhibitor

- Neuroscience

Note: Above pipeline excludes clinical collaborations

Development Partnerships: ABECMA (ide-cel): 2seventy bio; AHR: Ikena Oncology; Anti-Tau: Prothena; CAMZYOS in China, Singapore, Thailand, Macau, HK, Taiwan: LianBio; Claudin 18.2 ADC: LaNova Medicines; CD3xPSCA: Avencell; eIF2b Activator: Evotec; ELIQUIS: Pfizer; EMPLICITI: AbbVie; farletuzumab ecteribulin: Eisa; HSP47: Nitto Denko Corporation; rHuPH20: Halozyme; IDHIFA: Servier; MAGEA4/8 TCER: Immattics; milvexian: Janssen Pharmaceuticals, Inc.; OPDIVO, YERVOY, OPDUALAG: Ono; REBLOZYL: Merck; SHP2 Inhibitor: BridgeBio Pharma; TIGIT Bispecific: Agenus; PKCθ Inhibitor: Exscientia

^ Trial(s) exploring various combinations

# Partner-run study

S. | Bristol Myers Squibb 2022 Annual Report

2022 Annual Report

# Bristol Myers Squibb
2022 Financial Report

# Table of Contents

| Management's Discussion and Analysis of Financial Condition and Results of Operations | 2 |
| --- | --- |
| Quantitative and Qualitative Disclosures About Market Risk | 30 |
| Consolidated Financial Statements | 32 |
| Notes to the Consolidated Financial Statements | 35 |
| Reports of Management | 80 |
| Controls and Procedures | 81 |
| Reports of Independent Registered Public Accounting Firm | 82 |
| Performance Graph | 86 |
| Summary of Abbreviated Terms | 87 |

1

Bristol Myers Squibb

## MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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

The comparison of 2021 to 2020 results has been omitted from this Annual Report on Form 10-K and is incorporated by reference in our Form 10-K for the year ended December 31, 2021 'Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations' filed on February 10, 2021.

### EXECUTIVE SUMMARY

Bristol-Myers Squibb Company is a global biopharmaceutical company whose mission is to discover, develop and deliver innovative medicines that help patients prevail over serious diseases. Refer to the Summary of Abbreviated Terms at the end of this 2022 Annual Report on Form 10-K for definitions of capitalized terms used throughout the document.

In 2022, we obtained 18 approvals for new medicines and additional indications and formulations of currently marketed medicines in major markets (the U.S., EU and Japan), including advancement in oncology through FDA and EC approval of *Opdualag*, the first PD-1 inhibitor and LAG-3 blocking antibody combination. Additionally, in the U.S., EU and Japan, two *Opdivo* based regimens as first-line treatments for unresectable advanced or metastatic ESCC were approved. We continue to advance and invest in our cell therapy portfolio through the approval of *Abecma* in Japan for the treatment of multiple myeloma for patients with at least three prior therapies, and approvals of *Breyanzi* for the relapsed or refractory diffuse large B-cell lymphoma, with second-line treatments in the U.S. and Japan, and third-line treatments in the EU. We continue the expansion of our cell therapy manufacturing capabilities at our existing facilities in Washington and New Jersey, as well as through the construction of new state-of-the-art manufacturing facilities in Massachusetts and in Leiden, Netherlands. The approvals for *Sotyktu* (deucravacitinib) in the U.S. and Japan for the treatment of moderate to severe plaque psoriasis expanded our portfolio in immunology. Within cardiovascular, we broadened our New Product Portfolio with the FDA approval of *Camzyos* (mavacamten) for patients with symptomatic obstructive HCM. In addition, in August 2022, we acquired Turning Point, a precision oncology company, with the goal of expanding our solid tumor portfolio with the addition of repotrectinib.

In 2022, our revenues remained consistent with the prior year due to growth in our In-Line Products (primarily *Eliquis* and *Opdivo*) and New Product Portfolio (primarily *Opdualag*, *Abecma* and *Reblozyl*), offset by Recent LOE Products (primarily *Revlimid*) and the impact of foreign exchange. The $0.17 decrease in GAAP EPS in 2022 was primarily due to changes to equity investment and contingent consideration fair value adjustments, partially offset by lower impairment charges and weighted-average common shares outstanding. After adjusting for specified items, non-GAAP EPS increased $0.54 as a result of lower weighted-average common shares outstanding and Acquired IPRD charges and higher royalties and licensing income.

### Highlights

The following table summarizes our financial information:

| Dollars in Millions, except per share data | Year Ended December 31, |  |
| --- | --- | --- |
|  | 2022 | 2021 |
| Total Revenues | $46,159 | $46,385 |
| Diluted Earnings Per Share |  |  |
| GAAP | $2.95 | $3.12 |
| Non-GAAP | 7.70 | 7.16 |

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

2

2022 Annual Report

## Economic and Market Factors

### Governmental Actions

Our products continue to be subject to increasing pressures across the portfolio from pharmaceutical market access and pricing controls and discounting, changes to tax and importation laws and other restrictions in the U.S., the EU and other regions around the world that result in lower prices, lower reimbursement rates and smaller populations for whom payers will reimburse, which can negatively impact our results of operations (including intangible asset impairment charges), operating cash flow, liquidity and financial flexibility. For example, on August 16, 2022, President Biden signed the IRA which provides for (i) the government to negotiate prices for select high-cost Medicare Part D (beginning in 2026) and Part B drugs (beginning in 2028) that are more than nine years (for small-molecule drugs) or 13 years (for biological products) from their FDA approval, (ii) manufacturers to pay a rebate for Medicare Part B and Part D drugs when prices increase faster than inflation beginning in 2022 for Part D and 2023 for Part B, and (iii) Medicare Part D redesign which replaces the current coverage gap provisions and establishes a $2,000 cap for out-of-pocket limits costs for Medicare beneficiaries beginning in 2025, with manufacturers being responsible for 10% of costs up to the $2,000 cap and 20% after that cap is reached. Implementation of this legislation is expected to be carried out through upcoming actions by regulatory authorities, the outcome of which is uncertain. Additionally, in connection with the IRA the following changes have been made to U.S. tax laws, including (i) a 15% minimum tax that generally applies to U.S. corporations on adjusted financial statement income beginning in 2023 and (ii) a non-deductible 1% excise tax provision on net stock repurchases, to be applied to repurchases beginning in 2023. We continue to evaluate the impact of the IRA legislation on our results of operations and it is possible that these changes may result in a material impact on our business and results of operations. Furthermore, countries are expected to make changes to their tax laws and updates to international tax treaties to implement the agreement by the Organization for Economic Co-operation and Development to establish a global minimum tax. See risk factors on these items included in our most recently filed 2022 Form 10-K under “Part I-Item 1A. Risk Factors-Product, Industry and Operational Risks-Increased pricing pressure and other restrictions in the U.S. and abroad continue to negatively affect our revenues and profit margins” and “-Changes to tax regulations could negatively impact our earnings.”

### COVID-19

In response to the COVID-19 pandemic, international, federal, state and local public health and governmental authorities took a number of actions to limit the spread of COVID-19 and address related disruptions in the U.S. and global economy. As the COVID-19 pandemic affected global healthcare systems as well as major economic and financial markets, we adopted several procedures focused on ensuring the continued supply of our medicines to our patients and protecting the health, wellbeing and safety of our workforce. While the pandemic has not significantly impacted our results of operations, the situation remains dynamic and it is difficult to reasonably assess or predict the full extent of the negative impact that the COVID-19 pandemic may have on our business, financial condition, results of operations and cash flows.

### Significant Product Approvals

The following is a summary of the significant approvals received in 2022:

| Product | Date | Approval |
| --- | --- | --- |
| Breyanzi | December 2022 | Japan’s Ministry of Health, Labour and Welfare approval of Breyanzi allowing its use in the second-line treatment of relapsed or refractory large B-cell lymphoma, regardless of whether autologous hematopoietic stem-cell transplantation is intended. |
| Sotyktu | September 2022 | Japan’s Ministry of Health, Labour and Welfare approval of Sotyktu for treatment of plaque psoriasis, generalized pustular psoriasis, or erythrodermic psoriasis, for patients who have had an inadequate response to conventional therapies. |
| Sotyktu | September 2022 | FDA approval of Sotyktu for the treatment of adults with moderate-to-severe plaque psoriasis who are candidates for systemic therapy or phototherapy. |
| Opdualag | September 2022 | EC approval of Opdualag for the first-line treatment of advanced (unresectable or metastatic) melanoma in adults and adolescents 12 years of age and older with tumor cell PD-L1 expression < 1%. |
| Breyanzi | June 2022 | FDA approval of Breyanzi for the treatment of adult patients with relapsed or refractory large B-cell lymphoma after one line of therapy who are not eligible for transplant or who relapsed within 12 months of first-line chemoimmunotherapy. |

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Bristol Myers Squibb

| Product | Date | Approval |
| --- | --- | --- |
| Opdivo+Yervoy | May 2022 | Japan's Ministry of Health, Labour and Welfare approval of Opdivo plus Yervoy as a first-line treatment for adult patients with unresectable advanced or metastatic ESCC regardless of PD-L1 status. |
| Opdivo | May 2022 | Japan's Ministry of Health, Labour and Welfare approval of Opdivo in combination with fluoropyrimidine- and platinum-containing chemotherapy as a first-line treatment for adult patients with unresectable advanced or metastatic ESCC regardless of PD-L1 status. |
| Opdivo+Yervoy | May 2022 | FDA approval of Opdivo plus Yervoy as a first-line treatment for adult patients with unresectable advanced or metastatic ESCC regardless of PD-L1 status. |
| Opdivo | May 2022 | FDA approval of Opdivo in combination with fluoropyrimidine- and platinum-containing chemotherapy as a first-line treatment for adult patients with unresectable advanced or metastatic ESCC regardless of PD-L1 status. |
| Camzyos | April 2022 | FDA approval of Camzyos for the treatment of adults with symptomatic obstructive HCM. |
| Breyanzi | April 2022 | EC approval of Breyanzi for the treatment of adult patients with relapsed or refractory diffuse large B-cell lymphoma, primary mediastinal large B-cell lymphoma and follicular lymphoma grade 3B after two or more lines of systemic therapy. |
| Opdivo+Yervoy | April 2022 | EC approval of Opdivo plus Yervoy for the first-line treatment of adult patients with unresectable advanced, recurrent or metastatic ESCC with tumor cell PD-L1 expression ≥ 1%. |
| Opdivo | April 2022 | EC approval of Opdivo for the adjuvant treatment of adults with muscle-invasive urothelial carcinoma with tumor cell PD-L1 expression ≥ 1% who are at risk of recurrence after undergoing radical resection. |
| Opdivo | April 2022 | EC approval of Opdivo in combination with fluoropyrimidine- and platinum-based chemotherapy for the first-line treatment of adult patients with unresectable advanced, recurrent, or metastatic ESCC with PD-L1 expression ≥ 1%. |
| Opdualag | March 2022 | FDA approval of Opdualag , a fixed-dose combination of nivolumab and relatlimab, for the treatment of adult and pediatric patients 12 years of age and older with unresectable or metastatic melanoma. |
| Opdivo | March 2022 | FDA approval of Opdivo in combination with platinum-doublet chemotherapy for adult patients with resectable NSCLC in the neoadjuvant setting. |
| Opdivo | March 2022 | Japan's Ministry of Health, Labour and Welfare approval of Opdivo for the adjuvant treatment of urothelial carcinoma. |
| Abecma | January 2022 | Japan's Ministry of Health, Labour and Welfare approval of Abecma for the treatment of adult patients with relapsed or refractory multiple myeloma who have received at least three prior therapies. |

Refer to '-Product and Pipeline Developments' for all of the developments in our marketed products and late-stage pipeline in 2022 and in early 2023.

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2022 Annual Report

## Strategy

Our principal strategy is to combine the resources, scale and capability of a large pharmaceutical company with the speed, agility and focus on innovation typically found in the biotech industry. Our priorities are to continue to renew and diversify our portfolio through launching new medicines, advancing our early, mid and late-stage pipeline, and executing disciplined business development. We remain committed to maintaining a strong investment grade credit rating and returning capital to shareholders.

Our focus is on discovering, developing and delivering transformational medicines for patients facing serious diseases in the following core therapeutic areas: (i) oncology with a priority in certain tumor types; (ii) hematology with opportunities to broaden our franchise and sustain a leadership position in multiple myeloma; (iii) immunology with priorities in relapsing multiple sclerosis, psoriasis, psoriatic arthritis, lupus, RA and inflammatory bowel disease; (iv) cardiovascular disease (v) fibrotic disease with priorities in lung and liver, and (vi) neuroscience with a focus on neurodegenerative disease.

We continue to advance the next wave of innovative medicines by investing significantly in our oncology, hematology (with almutamab in multiple myeloma), immunology (with LPA1 antagonist in pulmonary fibrosis) and cardiovascular portfolios with our alliance partnership with Janssen where we are advancing a next-generation antithrombotic medicine milvexian. We have expanded our oncology portfolio, including a precision oncology asset repotrectinib in ROS-1 mutated NSCLC. For hematology, there is a broad effort to continue addressing the unmet medical needs in multiple myeloma, lymphoma, and anemia (e.g., MDS and MF associated anemia) and we are working across multiple modalities and mechanisms of action such as cereblon modulators (“CELMoDs”), ADCs, T-cell Engagers and CAR-T therapies. For immunology, the Phase III clinical trials are underway for cendakimab in eosinophilic esophagitis.

Our commercial model has been successful with revenues from our in-line brands and new product portfolio continuing to grow, which demonstrates strong execution of our strategy. In 2022, we have launched three first-in-class medicines with blockbuster potential across three therapeutic areas: *Opdualag* in first line melanoma, *Camzyos* in oHCM, *Sotyktu* in moderate to severe psoriasis. We remain focused and well-resourced in our cancer development programs and seek to broaden the use of *Opdivo* in earlier lines of therapy, expand into new tumors, accelerate next wave oncology mechanisms and develop treatment options for refractory oncology patients. We are further strengthening our IO portfolio with *Opdualag* for the treatment of melanoma and potential expanded opportunities in lung, liver, CRC and adjuvant melanoma. We continue to drive adoption of *Opdivo* by expanding into additional indications and tumor types both as a monotherapy and in combination with *Yervoy* and other anti-cancer agents. *Eliquis* continues to grow, leveraging its best in class clinical profile and extensive real world data and is now the number one novel oral anticoagulant in total prescriptions globally. In immunology, the Phase III registrational clinical trials are underway for *Sotyktu* in systemic lupus erythematosus (SLE) and psoriatic arthritis. We are able to leverage our leading capabilities in hematological malignancies and our robust pipeline to provide opportunities for long-term growth to offset the impact of current and future patent expires for *Revlimid* and *Pomalyst*.

We expect the growth of our in-line and new product portfolio will enable us to more than offset the expected decline in *Revlimid*, *Abraxane* and other products revenues due to their loss of market exclusivity through 2025.

The evolution in our operating model, which focuses on maintaining a disciplined approach in marketing, selling and administrative expenses, will enable us to deliver the necessary strategic, financial and operational flexibility to invest in the highest priority opportunities within our portfolio. Through our Celgene acquisition restructuring activities, we realized at least $3.0 billion of synergies annually resulting from cost savings and avoidance. The achieved synergies were across general and administrative, manufacturing, R&D, and procurement, and also resulted in streamlining the Company’s pricing and information technology infrastructure.

Our strategy extends well beyond the discovery, development and delivery of transformative medicines that help patients prevail over serious diseases. We believe that driving long-term business value is at the heart of living our purpose, from improving access and affordability to advancing inclusion and diversity and health equity in all areas of medicine to supporting a healthy planet in order to sustain lives and communities everywhere. Our Environmental, Social and Governance (ESG) strategy is integrated into our company’s core strategy, as the opportunities and potential impacts of ESG issues are directly connected to our business. Our ESG strategy focuses on (i) operating with effective governance and the highest ethical standards, and seeking transparency and dialogue with our stakeholders to improve our understanding of their needs, (ii) fostering an environment of inclusion and belonging and build a globally diverse workforce to drive equitable advancement and outcomes for all, (iii) around the globe, improve access to our innovative therapies and promote health equity to improve health outcomes for populations disproportionately affected by serious diseases and (iv) understand our responsibility to create a maximum positive impact while minimizing our environmental footprint while leveraging sustainability to drive innovation, build resiliency and manage nonfinancial risks.

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Bristol Myers Squibb

## Acquisitions, Divestitures, Licensing and Other Arrangements

For detailed information on significant acquisitions, divestitures, collaborations, licensing and other arrangements during 2022 refer to “Consolidated Financial Statements -Note 3. Alliances” and “-Note 4. Acquisitions, Divestitures, Licensing and Other Arrangements.”

## RESULTS OF OPERATIONS

### Regional Revenues

The composition of the changes in revenues was as follows:

| Dollars in Millions | Year Ended December 31, |  | 2022 vs. 2021 |  |
| --- | --- | --- | --- | --- |
|  | 2022 | 2021 | % Change | Foreign Exchange (b) |
| United States | $31,828 | $29,214 | 9% | - |
| International | 13,497 | 16,319 | (17)% | (9)% |
| Other (a) | 834 | 852 | (2)% | - |
| Total | $46,159 | $46,385 | - | (3)% |

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

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

### United States

- U.S. revenues in 2022 increased primarily due to *Eliquis*, New Product Portfolio, and *Opdivo*, partially offset by our Recent LOE Products. Average net selling prices increased by 4% in 2022 compared to the same period a year ago.

### International

- International revenues in 2022 decreased primarily due to lower demand for *Revlimid* as a result of generic erosion, foreign exchange and lower average net selling prices, partially offset by In-Line Products and New Product Portfolio.

No single country outside the U.S. contributed more than 10% of total revenues in 2022 and 2021. Our business is typically not seasonal.

### GTN Adjustments

We recognize revenue net of GTN adjustments that are further described in “-Critical Accounting Policies.”

The activities and ending reserve balances for each significant category of GTN adjustments were as follows:

| Dollars in Millions | Year Ended December 31, 2022 |  |  |  |
| --- | --- | --- | --- | --- |
|  | Charge-Backs and Cash Discounts | Medicaid and Medicare Rebates | Other Rebates, Returns, Discounts and Adjustments | Total |
| Balance at January 1, 2022 | $723 | $3,206 | $3,193 | $7,122 |
| Provision related to sales made in: |  |  |  |  |
| Current period | 7,483 | 11,364 | 6,344 | 25,191 |
| Prior period | (14) | (2) | (213) | (229) |
| Payments and returns | (7,511) | (10,746) | (6,319) | (24,576) |
| Foreign currency translation and other | (6) | - | (125) | (131) |
| Balance at December 31, 2022 | $675 | $3,822 | $2,880 | $7,377 |

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2022 Annual Report

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

| Dollars in Millions | Year Ended December 31, |  | % Change |
| --- | --- | --- | --- |
|  | 2022 | 2021 | 2022 vs. 2021 |
| Gross product sales | $69,633 | $67,897 | 3% |
| GTN Adjustments |  |  |  |
| Charge-backs and cash discounts | (7,469) | (7,253) | 3% |
| Medicaid and Medicare rebates | (11,362) | (9,374) | 21% |
| Other rebates, returns, discounts and adjustments | (6,131) | (6,215) | (1)% |
| Total GTN Adjustments | (24,962) | (22,842) | 9% |
| Net product sales | $44,671 | $45,055 | (1)% |
| GTN adjustments percentage | 36% | 33% | 3% |
| U.S. | 41% | 40% | 1% |
| Non-U.S. | 17% | 17% | - |

Reductions to provisions for product sales made in prior periods resulting from changes in estimates were $229 million and $319 million for 2022 and 2021, respectively. The reductions to provisions in 2022 primarily related to Non-U.S. revisions in clawback amounts primarily driven by the VAT recoverable estimates in 2022 and *Eliquis* coverage gap discounts in 2021. GTN adjustments are primarily a function of product sales volume, regional and payer channel mix, contractual or legislative discounts and rebates. U.S. GTN adjustments percentage increased primarily due to higher government channel mix, which has higher GTN adjustment percentages.

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Bristol Myers Squibb

# **Product Revenues**

| Dollars in Millions | Year Ended December 31, |  |  |
| --- | --- | --- | --- |
|  | 2022 | 2021 | % Change |
| In-Line Products |  |  |  |
| Eliquis | $11,789 | $10,762 | 10% |
| U.S. | 7,786 | 6,456 | 21% |
| Non-U.S. | 4,003 | 4,306 | (7)% |
| Opdivo | 8,249 | 7,523 | 10% |
| U.S. | 4,812 | 4,202 | 15% |
| Non-U.S. | 3,437 | 3,321 | 3% |
| Pomalyst/Imnovid | 3,497 | 3,332 | 5% |
| U.S. | 2,438 | 2,249 | 8% |
| Non-U.S. | 1,059 | 1,083 | (2)% |
| Orencia | 3,464 | 3,306 | 5% |
| U.S. | 2,638 | 2,410 | 9% |
| Non-U.S. | 826 | 896 | (8)% |
| Sprycel | 2,165 | 2,117 | 2% |
| U.S. | 1,497 | 1,297 | 15% |
| Non-U.S. | 668 | 820 | (19)% |
| Yervoy | 2,131 | 2,026 | 5% |
| U.S. | 1,304 | 1,265 | 3% |
| Non-U.S. | 827 | 761 | 9% |
| Empliciti | 296 | 334 | (11)% |
| U.S. | 185 | 200 | (8)% |
| Non-U.S. | 111 | 134 | (17)% |
| Mature and other products | 1,749 | 1,900 | (8)% |
| U.S. | 565 | 580 | (3)% |
| Non-U.S. | 1,184 | 1,320 | (10)% |
| New Product Portfolio |  |  |  |
| Reblozyl | 717 | 551 | 30% |
| U.S. | 591 | 485 | 22% |
| Non-U.S. | 126 | 66 | 91% |
| Abecma | 388 | 164 | ** |
| U.S. | 297 | 158 | 88% |
| Non-U.S. | 91 | 6 | ** |
| Opdualag | 252 | - | N/A |
| U.S. | 252 | - | N/A |
| Non-U.S. | - | - | N/A |
| Zeposia | 250 | 134 | 87% |
| U.S. | 177 | 99 | 79% |
| Non-U.S. | 73 | 35 | ** |

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2022 Annual Report

| Dollars in Millions | Year Ended December 31, |  | % Change |
| --- | --- | --- | --- |
|  | 2022 | 2021 | 2022 vs. 2021 |
| Breyanzi | 182 | 87 | ** |
| U.S. | 151 | 84 | 80% |
| Non-U.S. | 31 | 3 | ** |
| Onureg | 124 | 73 | 70% |
| U.S. | 95 | 69 | 38% |
| Non-U.S. | 29 | 4 | ** |
| Inrebic | 85 | 74 | 15% |
| U.S. | 69 | 67 | 3% |
| Non-U.S. | 16 | 7 | ** |
| Camzyos | 24 | - | N/A |
| U.S. | 24 | - | N/A |
| Non-U.S. | - | - | N/A |
| Sotyktu | 8 | - | N/A |
| U.S. | 8 | - | N/A |
| Non-U.S. | - | - | N/A |
| Recent LOE Products (a) |  |  |  |
| Revlimid | 9,978 | 12,821 | (22)% |
| U.S. | 8,359 | 8,695 | (4)% |
| Non-U.S. | 1,619 | 4,126 | (61)% |
| Abraxane | 811 | 1,181 | (31)% |
| U.S. | 580 | 898 | (35)% |
| Non-U.S. | 231 | 283 | (18)% |
| Total Revenues | 46,159 | 46,385 | - |
| U.S. | 31,828 | 29,214 | 9% |
| Non-U.S. | 14,331 | 17,171 | (17)% |

** Change in excess of 100%.

(a) Recent LOE Products include products with significant decline in revenue from a prior reporting period as a result of a loss of exclusivity.

*Eliquis* (apixaban) - an oral Factor Xa inhibitor, indicated for the reduction in risk of stroke/systemic embolism in NVAF and for the treatment of DVT/PE and reduction in risk of recurrence following initial therapy.

- U.S. revenues increased 21% in 2022 due to higher demand and higher average net selling prices, including favorable GTN adjustments.
- International revenues decreased 7% in 2022 primarily due to foreign exchange impacts of 11% and lower average net selling prices, partially offset by higher demand. Excluding foreign exchange impacts, revenues increased by 4%.
- Following the May 2021 expiration of regulatory exclusivity for *Eliquis* in Europe, and court decisions in (i) the United Kingdom finding the UK apixaban composition of matter patent and related SPC invalid and (ii) the Netherlands denying a BMS request for a preliminary injunction that would have prevented an at-risk generic launch, generic manufacturers have begun marketing generic versions of *Eliquis* in the UK and the Netherlands, and may seek to market generic versions of *Eliquis* in additional countries in Europe, prior to the expiration of our patents, which may lead to additional infringement and invalidity actions involving our *Eliquis* patents being filed in various countries in Europe. We believe in the innovative science behind *Eliquis* and the strength of our intellectual property, which we will defend against infringement. Refer to “Consolidated Financial Statements-Note 20. Legal Proceedings and Contingencies-Intellectual Property” for further information.

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Bristol Myers Squibb

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

- U.S. revenues increased 15% in 2022 due to higher demand across multiple indications including the *Opdivo+Yervoy* combinations for NSCLC, *Opdivo+Cabometyx*\* combination for kidney cancer, bladder and various gastric and esophageal cancers, partially offset by declining second-line eligibility across tumor indications and increased competition.
- International revenues increased 3% in 2022 due to higher demand partially offset by foreign exchange impacts of 11% and lower average net selling prices. Excluding foreign exchange impacts, revenues increased by 14%.

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

- U.S. revenues increased 8% in 2022 due to higher average net selling prices and higher demand.
- International revenues decreased 2% in 2022 due to foreign exchange impacts of 10% and lower average net selling prices, partially offset by higher demand. Excluding foreign exchange impacts, revenues increased by 8%.

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

- U.S. revenues increased 9% in 2022 due to higher demand.
- International revenues decreased 8% in 2022 due to foreign exchange impacts of 11%, partially offset by higher demand. Excluding foreign exchange impacts, revenues increased by 3%.
- In the U.S. and EU, estimated minimum market exclusivity dates were previously based on method of use patents that expired in 2021. Formulation and additional patents expire in 2026 and beyond. There are no *Orencia* biosimilars on the market in the U.S., EU or Japan.

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

- U.S. revenues increased 15% in 2022 due to higher average net selling prices and higher demand.
- International revenues decreased 19% in 2022 due to foreign exchange impacts of 11% and lower demand as a result of generic erosion. Excluding foreign exchange impacts, revenues decreased by 8%.

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

- U.S. revenues increased 3% in 2022 due to higher average net selling prices.
- International revenues increased 9% in 2022 due to higher demand as a result of additional indication launches and core indications, partially offset by foreign exchange impacts of 12% and lower average net selling prices. Excluding foreign exchange impacts, revenues increased by 21%.

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

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2022 Annual Report

Mature and other products - includes all other products, including those which have lost exclusivity in major markets, OTC products and royalty revenue and mature products.

- International revenues for mature and other products decreased 10% due to lower demand as a result of a continued generic erosion and foreign exchange impacts of 5%. Excluding foreign exchange impacts, revenues decreased by 5%.

Reblozyl (luspatercept-aamt) - an erythroid maturation agent indicated for the treatment of anemia in adult patients with beta thalassemia who require regular red blood cell transfusions and for the treatment of anemia failing an ESA in adult patients with very low- to intermediate-risk MDS who have ring sideroblasts and require RBC transfusions.

- U.S. revenues increased 22% in 2022 primarily due to higher demand.

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

Opdualag (nivolumab and relatlimab-rmbw) - a combination of nivolumab, a PD-1 blocking antibody, and relatlimab, a LAG-3 blocking antibody, indicated for the treatment of adult and pediatric patients 12 years of age or older with unresectable or metastatic melanoma. Opdualag was launched in March 2022.

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

Breyanzi (lisocabtagene maraleucel) - is a CD19-directed genetically modified autologous CAR-T cell therapy indicated for the treatment of adult patients with certain types of relapsed or refractory large B-cell lymphoma after one or more lines of systemic therapy. Breyanzi was launched in April 2021.

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

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

Camzyos (mavacamten) - a cardiac myosin inhibitor indicated for the treatment of adults with symptomatic obstructive HCM to improve functional capacity and symptoms. Camzyos was launched in April 2022.

Sotyktu (deucravacitinib) - an oral, selective, allosteric tyrosine kinase 2 inhibitor indicated for the treatment of adults with moderate-to-severe plaque psoriasis who are candidates for systemic therapy or phototherapy. Sotyktu was launched in September 2022.

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

- U.S. revenues decreased 4% in 2022 due to lower demand driven by generic erosion, partially offset by higher average net selling prices.
- International revenues decreased 61% in 2022 due to lower demand as a result of generic erosion across several European countries and Canada, lower average net selling prices and foreign exchange impacts of 4%. Excluding foreign exchange impacts, revenues decreased by 57%.
- In the U.S., certain third parties have been granted volume-limited licenses to sell generic lenalidomide beginning in March 2022 or thereafter. Pursuant to these licenses, several generics have entered or are expected to enter the U.S. market with volume-limited quantities of generic lenalidomide. In the EU, generic lenalidomide products have entered the market. In Japan, the composition of matter patent expired in July 2022, however BMS is not aware of any generic approvals. Global revenues for Revlimid are expected to decline to approximately $6.5 billion in 2023.

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Bristol Myers Squibb

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

- U.S. revenues decreased 35% in 2022 primarily due to entry of authorized generics and lower demand. Authorized generic arrangements include product supply sales and profit sharing fees.
- International revenues decreased 18% in 2022 due to lower demand resulting from generic erosion and foreign exchange impacts of 5%. Excluding foreign exchange impacts, revenues decreased by 13%.
- In the U.S. and EU, generics have entered the market. In Japan, the estimated minimum market exclusivity date is 2023 based on a method of use patent.

### Estimated End-User Demand

Pursuant to the SEC Consent Order described under “-SEC Consent Order”, we monitor the level of inventory on hand in the U.S. wholesaler distribution channel and outside of the U.S. in the direct customer distribution channel. We are obligated to disclose products with levels of inventory in excess of one month on hand or expected demand, subject to a *de minimis* exception. There were no products in the U.S. wholesaler distribution channel and outside of the U.S. in the direct customer distribution channel with estimated levels of inventory in excess of one month as of December 31, 2022 (U.S.) and September 30, 2022 (outside of the U.S.).

In the U.S., we generally determine our months on hand estimates using inventory levels of product on hand and the amount of out-movement provided by our three largest wholesalers, which account for approximately 78% of total gross sales of U.S. products for the year ended December 31, 2022. Factors that may influence our estimates include generic erosion, seasonality of products, wholesaler purchases in light of increases in wholesaler list prices, new product launches, new warehouse openings by wholesalers and new customer stockings by wholesalers. In addition, these estimates are calculated using third-party data, which may be impacted by their recordkeeping processes.

*Camzyos* is only available through a restricted program called the *Camzyos* REMS Program. Product distribution is limited to REMS certified pharmacies, and enrolled pharmacies must only dispense to patients who are authorized to receive *Camzyos*. *Revlimid* and *Pomalyst* are distributed in the U.S. primarily through contracted pharmacies under the Lenalidomide REMS and *Pomalyst* REMS programs, respectively. These are proprietary risk-management distribution programs tailored specifically to provide for the safe and appropriate distribution and use of *Revlimid* and *Pomalyst*. Internationally, *Revlimid* and *Imnovid* are distributed under mandatory risk-management distribution programs tailored to meet local authorities’ specifications to provide for the products’ safe and appropriate distribution and use. These programs may vary by country and, depending upon the country and the design of the risk-management program, the product may be sold through hospitals or retail pharmacies.

Our non-U.S. businesses have significantly more direct customers. Information on available direct customer product level inventory and corresponding out-movement information and the reliability of third-party demand information varies widely. We limit our direct customer sales channel inventory reporting to where we can influence demand. When this information does not exist or is otherwise not available, we have developed a variety of methodologies to estimate such data, including using historical sales made to direct customers and third-party market research data related to prescription trends and end-user demand. Given the difficulties inherent in estimating third-party demand information, we evaluate our methodologies to estimate direct customer product level inventory and to calculate months on hand on an ongoing basis and make changes as necessary. Factors that may affect our estimates include generic competition, seasonality of products, price increases, new product launches, new warehouse openings by direct customers, new customer stockings by direct customers and expected direct customer purchases for governmental bidding situations. As such, all of the information required to estimate months on hand in the direct customer distribution channel for non-U.S. business for the year ended December 31, 2022 is not available prior to the filing of this Annual Report on Form 10-K. We will disclose any product with levels of inventory in excess of one month on hand or expected demand, subject to a *de minimis* exception, in the next quarterly report on Form 10-Q.

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2022 Annual Report

## Expenses

| Dollar in Millions | Year Ended December 31, |  | % Change |
| --- | --- | --- | --- |
|  | 2022 | 2021 | 2022 vs 2021 |
| Cost of products sold (a) | $10,137 | $9,940 | 2% |
| Marketing, selling and administrative | 7,814 | 7,690 | 2% |
| Research and development | 9,509 | 10,195 | (7)% |
| Acquired IPRD | 815 | 1,159 | (30)% |
| Amortization of acquired intangible assets | 9,595 | 10,023 | (4)% |
| Other (income)/expense, net | 576 | (720) | ** |
| Total Expenses | $38,446 | $38,287 | - |

** Change in excess of 100%.

(a) Excludes amortization of acquired intangible assets.

### Cost of products sold

Cost of products sold include material, internal labor and overhead costs from our owned manufacturing sites, third-party product supply costs and other supply chain costs managed by our global manufacturing and supply organization. Cost of products sold also includes royalties and profit sharing, certain excise taxes, foreign currency hedge settlement gains and losses and impairment charges. Cost of products sold typically varies between periods as a result of volume, product mix (particularly royalties and profit sharing), foreign exchange, as well as changes in price, inflation, costs attributed to manufacturing site exits and impairment charges. Cost of products sold excludes amortization from acquired intangible assets.

Cost of products sold increased by $197 million primarily driven by product mix including higher profit sharing due to *Eliquis* revenue growth ($541 million), higher manufacturing startup costs and inventory related charges primarily from expanding our CAR-T cell therapy capabilities, partially offset by foreign exchange and related hedging settlements ($588 million) and impairment charges related to *Inrebic* EU regulatory approval milestones in 2021 ($315 million).

### Marketing, selling and administrative

Marketing, selling and administrative expenses primarily include salary and benefit costs, third-party professional and marketing fees, outsourcing fees, shipping and handling costs, advertising and product promotion costs. Expenses are managed through regional commercialization organizations or global enabling functions such as finance, legal, information technology and human resources. Certain expenses are shared with alliance partners based upon contractual agreements.

Marketing, selling and administrative expenses increased by $124 million primarily due to higher charitable giving ($235 million) and the cash settlement of Turning Point unvested stock awards ($73 million), partially offset by foreign exchange.

### Research and development

Research and development activities include research and early discovery, preclinical and clinical development, drug formulation and medical support of marketed products. Expenses include salary and benefit costs, third-party grants and fees paid to clinical research organizations, supplies, IPRD impairment charges and proportionate allocations of enterprise-wide costs. The allocations include facilities, information technology, employee stock compensation costs and other appropriate costs. Certain expenses are shared with alliance partners based upon contractual agreements. Expenses typically vary between periods for a number of reasons, including the timing of IPRD impairment charges.

Research and development expense decreased by $686 million primarily due to lower IPRD impairment charges ($742 million), partially offset by the cash settlement of Turning Point unvested stock awards in 2022 ($80 million). Refer to 'Consolidated Financial Statements-Note 15. Goodwill and Other Intangible Assets' for further information on impairment charges.

### Acquired IPRD

Acquired IPRD expenses are comprised of upfront payments, contingent milestone payments in connection with asset acquisitions or in-license arrangements of third-party intellectual property rights, as well as any upfront and contingent milestones payable by BMS to alliance partners prior to regulatory approval. Acquired IPRD charges are detailed in the table below.

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Bristol Myers Squibb

| Dollars in Millions | Year Ended December 31, |  |
| --- | --- | --- |
|  | 2022 | 2021 |
| Mavacamten royalty extinguishment | $295 | $ - |
| Dragonfly milestone and opt-in license fee | 200 | - |
| Immatics upfront license fee | 150 | - |
| BridgeBio upfront collaboration fee | 90 | - |
| Eisai upfront collaboration fee | - | 650 |
| Agenus upfront license fee and milestone | - | 220 |
| Prothena opt-in license fee | - | 80 |
| Evotec opt-in license fee | - | 58 |
| Other | 80 | 151 |
| Acquired IPRD | $815 | $1,159 |

Refer to “Consolidated Financial Statements-Note 3. Alliances” and “-Note 4. Acquisitions, Divestitures, Licensing and Other Arrangements” for additional information.

#### *Amortization of Acquired Intangible Assets*

Amortization of acquired intangible assets decreased by $428 million in 2022 compared to 2021, primarily due to a change in the expected expiration of the market exclusivity period for *Pomalyst* to the first quarter of 2026 and the expiration of *Abraxane* market exclusivity in the fourth quarter of 2022.

#### *Other (income)/expense, net*

Other (income)/expense, net changed by $1.3 billion in 2022, primarily due to equity investments, contingent value rights and other items discussed below.

Components of Other (income)/expense, net were as follows:

| Dollars in Millions | Year Ended December 31, |  |
| --- | --- | --- |
|  | 2022 | 2021 |
| Interest expense | $1,232 | $1,334 |
| Royalty and licensing income | (1,283) | (1,067) |
| Royalty income - divestitures | (832) | (666) |
| Equity investment losses/(income), net | 801 | (745) |
| Integration expenses | 440 | 564 |
| Loss on debt redemption | 266 | 281 |
| Divestiture gains | (211) | (9) |
| Litigation and other settlements | 178 | 82 |
| Investment income | (171) | (39) |
| Provision for restructuring | 75 | 169 |
| Contingent consideration | (9) | (542) |
| Other | 90 | (82) |
| Other (income)/expense, net | $576 | $(720) |

14

2022 Annual Report

- • Interest expense decreased in 2022 due to additional debt maturities. Refer to “Consolidated Financial Statements-Note 10. Financing Arrangements” for further information.
- • Royalties increased in 2022 primarily due to higher *Keytruda*\* and diabetes business divestiture royalties. Refer to “Consolidated Financial Statements-Note 4. Acquisitions, Divestitures, Licensing and Other Arrangements” for further information.
- • Equity investments generated losses in 2022 compared to income in 2021 due to fair value adjustments for investments that have readily determinable fair value, observable price changes for investments without readily determinable fair values resulting primarily from initial public offerings or third-party acquisitions of entities which we held an ownership interest, and changes in limited partnership net asset values. Refer to “Consolidated Financial Statements-Note 9. Financial Instruments and Fair Value Measurements” for more information.
- • Integration expenses decreased in 2022 due to lower consulting fees to implement Celgene integration initiatives related to processes and systems.
- • Loss on debt redemption resulted from the early redemption of long-term debt of \$6.0 billion in 2022 and \$3.5 billion in 2021.
- • Divestiture gains resulted from certain mature product rights divested in 2022.
- • Investment income increased in 2022 primarily due to higher interest rates.
- • Litigation and other settlements includes amounts related to commercial disputes regarding licensing and supply obligation matters, intellectual property and promotional practice matters. In addition, 2022 includes income of \$40 million resulting from a settlement resolving all legal claims and business interests pertaining to Nimbus’ TYK2 inhibitor. The settlement also provides for contingent development, regulatory and sales-based milestones payable to BMS upon the occurrence of certain events. Refer to “Consolidated Financial Statements-Note 20. Legal Proceedings and Contingencies.”
- • Provision for restructuring includes exit and other costs primarily related to the Celgene Acquisition Plan. We have achieved at least \$3.0 billion in annual synergies related to the Celgene Acquisition Plan. Refer to “Consolidated Financial Statements-Note 6. Restructuring” for further information.
- • Contingent consideration primarily includes fair value adjustments resulting from the change in the traded price of contingent value rights issued with the Celgene acquisition. The contractual obligation to pay the contingent value rights terminated in January 2021 because the FDA did not approve liso-cel (JCAR017) by December 31, 2020.
- • Other includes foreign exchange losses of \$83 million in 2022 and \$15 million in 2021 (net of hedging), exit costs of \$39 million resulting from the transition of our commercial operations in the Russian Federation to a third-party distributor and Turning Point acquisition costs of \$32 million in 2022.

## Income Taxes

| Dollars in Millions | Year Ended December 31, |  |
| --- | --- | --- |
|  | 2022 | 2021 |
| Earnings Before Income Taxes | $7,713 | $8,098 |
| Provision for Income Taxes | 1,368 | 1,084 |
| Effective Tax Rate | 17.7% | 13.4% |
| Impact of Specified Items | (2.4)% | 2.6% |
| Effective Tax Rate Excluding Specified Items | 15.3% | 16.0% |

The income tax impact attributed to the GAAP effective tax rate includes the impact from specified items summarized in the following “-Non-GAAP Financial Measures” section. Income tax impact of specified items was primarily due to low jurisdictional tax rates attributed to intangible asset amortization in both periods, IPRD impairment charges and non-taxable contingent value rights fair value adjustments in 2021, a revaluation in 2021 (and to a lesser extent 2022) of the basis of intangible and other assets internally transferred to streamline our legal entity structure after the Celgene acquisition, and tax reserve releases related to the 2009 Mead Johnson split-off transaction in 2022.

The 0.7% decrease in the effective tax rate excluding specified items during 2022 primarily resulted from releases of income tax reserves of $297 million for tax positions that were effectively settled for the BMS 2008 to 2012 tax years (excluding Mead Johnson related amounts that were specified) and the lapse of statute of limitations for the Celgene 2012 to 2016 tax years, partially offset by jurisdictional earnings mix. Refer to “Consolidated Financial Statements-Note 7. Income Taxes” for additional information.

15

Bristol Myers Squibb

## Non-GAAP Financial Measures

Our non-GAAP financial measures, such as non-GAAP earnings and related EPS information, are adjusted to exclude certain costs, expenses, gains and losses and other specified items that are evaluated on an individual basis. These items are adjusted after considering their quantitative and qualitative aspects and typically have one or more of the following characteristics, such as being highly variable, difficult to project, unusual in nature, significant to the results of a particular period or not indicative of past or future operating results. These items are excluded from non-GAAP earnings and related EPS information because the Company believes they neither relate to the ordinary course of the Company's business nor reflect the Company's underlying business performance. Similar charges or gains were recognized in prior periods and will likely reoccur in future periods, including (i) amortization of acquired intangible assets, including product rights that generate a significant portion of our ongoing revenue and will recur until the intangible assets are fully amortized, (ii) unwind of inventory purchase price adjustments, (iii) acquisition and integration expenses, (iv) restructuring costs, (v) accelerated depreciation and impairment of property, plant and equipment and intangible assets, (vi) divestiture gains or losses, (vii) stock compensation resulting from acquisition-related equity awards, (viii) pension, legal and other contractual settlement charges, (ix) equity investment and contingent value rights fair value adjustments (including fair value adjustments attributed to limited partnership equity method investments) and (x) amortization of fair value adjustments of debt acquired from Celgene in our 2019 exchange offer, among other items. Deferred and current income taxes attributed to these items are also adjusted for considering their individual impact to the overall tax expense, deductibility and jurisdictional tax rates. Certain other significant tax items are also excluded such as the impact resulting from release of income tax reserves related to the Mead Johnson split-off transaction and internal transfers of intangible and other assets to streamline our legal entity structure subsequent to the Celgene acquisition. We also provide international revenues for our priority products excluding the impact of foreign exchange. We calculate foreign exchange impacts by converting our current-period local currency financial results using the prior period average currency rates and comparing these adjusted amounts to our current-period results. Reconciliations of these non-GAAP measures to the most comparable GAAP measures are included in Exhibit 99.2 to our Form 8-K filed on February 2, 2023 and are incorporated herein by reference.

Beginning with the first quarter of 2022, significant R&D charges or other income resulting from upfront or contingent milestone payments in connection with asset acquisitions or licensing of third-party intellectual property rights are no longer excluded from our non-GAAP financial measures. We made these changes to our presentation of non-GAAP financial measures following comments from and discussions with the SEC. For purposes of comparability, the non-GAAP financial measures for the year ended December 31, 2021, have been updated to reflect this change.

Non-GAAP information is intended to portray the results of our baseline performance, supplement or enhance management, analysts and investors' overall understanding of our underlying financial performance and facilitate comparisons among current, past and future periods. This information is not intended to be considered in isolation or as a substitute for the related financial measures prepared in accordance with GAAP and may not be the same as or comparable to similarly titled measures presented by other companies due to possible differences in method and in the items being adjusted. We encourage investors to review our financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure.

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2022 Annual Report

Specified items were as follows:

| Dollars in Millions | Year Ended December 31, |  |
| --- | --- | --- |
|  | 2022 | 2021 |
| Inventory purchase price accounting adjustments | $293 | $264 |
| Intangible asset impairment | - | 315 |
| Site exit and other costs | 63 | 24 |
| Cost of products sold | 356 | 603 |
| Employee compensation charges | 73 | 1 |
| Site exit and other costs | 6 | 2 |
| Marketing, selling and administrative | 79 | 3 |
| IPRD impairments | 98 | 840 |
| Inventory purchase price accounting adjustments | 130 | 1 |
| Employee compensation charges | 80 | 1 |
| Site exit and other costs | - | 1 |
| Research and development | 308 | 843 |
| Amortization of acquired intangible assets | 9,595 | 10,023 |
| Interest expense (a) | (83) | (120) |
| Equity investment losses/(gains), net | 799 | (758) |
| Integration expenses | 440 | 564 |
| Loss on debt redemption | 266 | 281 |
| Divestiture gains | (211) | (9) |
| Litigation and other settlements | 140 | - |
| Provision for restructuring | 75 | 169 |
| Contingent consideration | - | (542) |
| Other | 71 | - |
| Other (income)/expense, net | 1,497 | (415) |
| Increase to pretax income | 11,835 | 11,057 |
| Income taxes on items above | (1,332) | (993) |
| Income tax reserve release attributed to Mead Johnson | (225) | - |
| Income taxes attributed to internal transfer of intangible and other assets | (72) | (983) |
| Income taxes | (1,629) | (1,976) |
| Increase to net earnings | $10,206 | $9,081 |

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

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

| Dollars in Millions, except per share data | Year Ended December 31, |  |
| --- | --- | --- |
|  | 2022 | 2021 |
| Net Earnings Attributable to BMS used for Diluted EPS Calculation - GAAP | $6,327 | $6,994 |
| Specified Items | 10,206 | 9,081 |
| Net Earnings Attributable to BMS used for Diluted EPS Calculation - Non-GAAP | $16,533 | $16,075 |
| Weighted Average Common Shares Outstanding - Diluted | 2,146 | 2,245 |
| Diluted Earnings Per Share Attributable to BMS - GAAP | $2.95 | $3.12 |
| Diluted EPS Attributable to Specified Items | 4.75 | 4.04 |
| Diluted EPS Attributable to BMS - Non-GAAP | $7.70 | $7.16 |

17

Bristol Myers Squibb

## Financial Position, Liquidity and Capital Resources

Our net debt position was as follows:

| Dollars in Millions | December 31, |  |
| --- | --- | --- |
|  | 2022 | 2021 |
| Cash and cash equivalents | $9,123 | $13,979 |
| Marketable debt securities | 130 | 2,987 |
| Total cash, cash equivalents and marketable debt securities | 9,253 | 16,966 |
| Short-term debt obligations | (4,264) | (4,948) |
| Long-term debt | (35,056) | (39,605) |
| Net debt position | $(30,067) | $(27,587) |

### *Liquidity and Capital Resources*

We regularly assess our anticipated working capital needs, debt and leverage ratio levels, debt maturities, capital expenditure requirements, dividend payouts, potential share repurchases and future investments or acquisitions in order to maximize shareholder return, efficiently finance our ongoing operations and maintain flexibility for future strategic transactions. We also regularly evaluate our capital structure to ensure financial risks, adequate liquidity access and lower cost of capital are efficiently managed, which may lead to the issuance of additional debt securities, the repurchase of debt securities prior to maturity or the issuance or repurchase of common stock. Under the Tax Cuts and Jobs Act of 2017, research and development costs are required to be capitalized and amortized effective January 1, 2022, which resulted in an increase of approximately $1.9 billion in U.S. tax payments in 2022 as compared to 2021.

We believe that our existing cash, cash equivalents and marketable debt securities together with cash generated from operations in the next few years, and, if required, from the issuance of commercial paper, will be sufficient to satisfy our anticipated cash needs for at least the next few years, including dividends, capital expenditures, milestone payments, working capital, income taxes, restructuring initiatives, business development and acquisitions, repurchase of common stock, debt maturities of approximately $10.6 billion through 2026, as well as any debt repurchases through redemptions or tender offers. As of December 31, 2022, our net debt position increased by $2.5 billion primarily due to common stock repurchases and dividends ($12.6 billion) and the Turning Point acquisition ($3.3 billion), partially offset by cash from operating activities ($13.1 billion).

We have a share repurchase program, authorized by our Board of Directors, allowing for repurchases of BMS common stock shares, effected in the open market or through privately negotiated transactions in compliance with Rule 10b-18 under the Exchange Act, including through Rule 10b5-1 trading plans. The share repurchase program does not obligate us to repurchase any specific number of shares nor does it have a specific expiration date and may be suspended or discontinued at any time. In 2022, we repurchased approximately 109 million shares of our common stock for $8.0 billion, including approximately 69 million shares for $5.0 billion through our ASR program. The remaining share repurchase capacity under the share repurchase program was $7.2 billion as of December 31, 2022. Refer to “Consolidated Financial Statements-Note 17. Equity” for additional information.

Dividend payments were $4.6 billion in 2022 and $4.4 billion in 2021. Dividend paid per common share was $0.54 during each quarter of 2022. Dividends are authorized on a quarterly basis by our Board of Directors.

Under our commercial paper program, we may issue a maximum of $5.0 billion unsecured notes that have maturities of not more than 366 days from the date of issuance. There were no commercial paper borrowings outstanding as of December 31, 2022.

In 2022, we issued an aggregate principal amount of $6.0 billion and repurchased an aggregate principal amount of $6.0 billion primarily to modify our future debt maturities. In addition, $4.8 billion of debt matured and was repaid. Refer to “Consolidated Financial Statements-Note 10. Financing Arrangements” for further information.

As of December 31, 2022, we had a five-year $5.0 billion revolving credit facility expiring in January 2027, which is extendable annually by one year with the consent of the lenders. This facility provides for customary terms and conditions with no financial covenants and may be used to provide backup liquidity for our commercial paper borrowings. No borrowings were outstanding under any revolving credit facility at December 31, 2022 or 2021.

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2022 Annual Report

Our investment portfolio includes marketable debt securities, which are subject to changes in fair value as a result of interest rate fluctuations and other market factors. Our investment policy establishes limits on the amount and time to maturity of investments with any institution. The policy also requires that investments are only entered into with corporate and financial institutions that meet high credit quality standards. Refer to 'Consolidated Financial Statements-Note 10. Financing Arrangements' for further information.

### *Capital Expenditures*

Annual capital expenditures were approximately $1.1 billion in 2022, $970 million in 2021 and $750 million in 2020 and are expected to be approximately $1.2 billion in 2023 and 2024. We continue to make capital expenditures in connection with the expansion of our cell therapy and other manufacturing capabilities, research and development and other facility-related activities.

### *Contractual Obligations and Off-Balance Sheet Arrangements*

In the normal course of business, we enter into contracts and commitments that obligate us to make payments in the future. Information regarding our obligations relating to debt, income taxes and lease arrangements are provided in 'Consolidated Financial Statements-Note 1. Accounting Policies and Recently Issued Accounting Standards', '-Note 10. Financing Arrangements', '-Note 7. Income Taxes' and '-Note 14. Leases', respectively.

We are committed to an aggregate $22.0 billion of potential contingent future research and development milestone payments to third parties for in-licensing, asset acquisitions and development programs including early-stage milestones of $7.5 billion (milestones achieved through Phase III clinical studies) and late-stage milestones of $14.5 billion (milestones achieved post Phase III clinical studies). Payments generally are due and payable only upon achievement of certain developmental and regulatory milestones for which the specific timing cannot be predicted. Certain agreements also provide for sales-based milestones aggregating to $17.5 billion that we would be obligated to pay upon achievement of certain sales levels in addition to royalties. We also have certain manufacturing, development and commercialization obligations in connection with alliance arrangements. It is not practicable to estimate the amount of these obligations. Refer to 'Consolidated Financial Statements-Note 3. Alliances' and '-Note 4. Acquisitions, Divestitures, Licensing and Other Arrangements' for further information.

We do not have any off-balance sheet arrangements that are material or reasonably likely to become material to our financial condition or results of operations.

### **Credit Ratings**

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

### **Cash Flows**

The following is a discussion of cash flow activities:

| Dollars in Millions | Year Ended December 31, |  |
| --- | --- | --- |
|  | 2022 | 2021 |
| Cash flow provided by/(used in): |  |  |
| Operating activities | $13,066 | $16,207 |
| Investing activities | (1,062) | (538) |
| Financing activities | (16,962) | (16,224) |

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Bristol Myers Squibb

### *Operating Activities*

Cash flow from operating activities represents the cash receipts and disbursements from all of our activities other than investing and financing activities. Operating cash flow is derived by adjusting net earnings for noncontrolling interest, non-cash operating items, gains and losses attributed to investing and financing activities and changes in operating assets and liabilities resulting from timing differences between the receipts and payments of cash and when the transactions are recognized in our results of operations. As a result, changes in cash from operating activities reflect the timing of cash collections from customers and alliance partners; payments to suppliers, alliance partners and employees; customer discounts and rebates; and tax payments in the ordinary course of business.

The $3.1 billion change in cash flow from operating activities compared to 2021 was driven by higher tax payments ($1.9 billion) primarily resulting from research and development expenses that are capitalized and amortized for tax purposes, Turning Point acquisition-related payments ($300 million), higher upfront research and early discovery payments ($250 million), as well as timing of cash collections and timing of vendor payments in the ordinary course of business.

### *Investing Activities*

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

The $524 million change in cash flow from investing activities compared to 2021 was primarily due to the acquisition of Turning Point ($3.2 billion, net of cash acquired), lower proceeds from the sale of equity investments ($2.4 billion), partially offset by the changes in the amount of marketable debt securities held ($4.1 billion), lower Acquired IPRD payments ($646 million) and higher proceeds from divestitures ($557 million).

### *Financing Activities*

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

The $738 million change in cash flow from financing activities compared to 2021 was primarily due to higher repurchases of common stock ($1.7 billion), partially offset by changes in the amount of net debt borrowings ($871 million).

### **SEC Consent Order**

As previously disclosed, on August 4, 2004, we entered into a final settlement with the SEC, concluding an investigation concerning certain wholesaler inventory and accounting matters. The settlement was reached through a Consent, a copy of which was attached as Exhibit 10 to our quarterly report on Form 10-Q for the period ended September 30, 2004.

Under the terms of the Consent, we agreed, subject to certain defined exceptions, to limit sales of all products sold to our direct customers (including wholesalers, distributors, hospitals, retail outlets, pharmacies and government purchasers) based on expected demand or on amounts that do not exceed approximately one month of inventory on hand, without making a timely public disclosure of any change in practice. We also agreed in the Consent to certain measures that we have implemented including: (a) establishing a formal review and certification process of our annual and quarterly reports filed with the SEC; (b) establishing a business risk and disclosure group; (c) retaining an outside consultant to comprehensively study and help re-engineer our accounting and financial reporting processes; (d) publicly disclosing any sales incentives offered to direct customers for the purpose of inducing them to purchase products in excess of expected demand; and (e) ensuring that our budget process gives appropriate weight to inputs that come from the bottom to the top, and not just from the top to the bottom, and adequately documenting that process.

We have established a company-wide policy concerning our sales to direct customers for the purpose of complying with the Consent, which includes the adoption of various procedures to monitor and limit sales to direct customers in accordance with the terms of the Consent. These procedures include a governance process to escalate to appropriate management levels potential questions or concerns regarding compliance with the policy and timely resolution of such questions or concerns. In addition, compliance with the policy is monitored on a regular basis.

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2022 Annual Report

We maintain DSAs with our U.S. pharmaceutical wholesalers, which account for nearly 100% of our gross U.S. revenues. Under the current terms of the DSAs, our wholesaler customers provide us with weekly information with respect to months on hand product-level inventories and the amount of out-movement of products. The three largest wholesalers currently account for approximately 78% of our gross U.S. revenues. The inventory information received from our wholesalers, together with our internal information, is used to estimate months on hand product level inventories at these wholesalers. We estimate months on hand product inventory levels for our U.S. business’s wholesaler customers other than the three largest wholesalers by extrapolating from the months on hand calculated for the three largest wholesalers. In contrast, our non-U.S. business has significantly more direct customers, limited information on direct customer product level inventory and corresponding out-movement information and the reliability of third-party demand information, where available, varies widely. Accordingly, we rely on a variety of methods to estimate months on hand product level inventories for these business units.

We believe the above-described procedures provide a reasonable basis to ensure compliance with the Consent.

### Recently Issued Accounting Standards

For recently issued accounting standards, refer to “Consolidated Financial Statements-Note 1. Accounting Policies and Recently Issued Accounting Standards.”

### Critical Accounting Policies

The preparation of financial statements requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities and the reported amounts of revenue and expenses. Our critical accounting policies are those that significantly affect our financial condition and results of operations and require the most difficult, subjective or complex judgments, often because of the need to make estimates about the effect of matters that are inherently uncertain. Because of this uncertainty, actual results may vary from these estimates.

### Revenue Recognition

Our accounting policy for revenue recognition has a substantial impact on reported results and relies on certain estimates. Revenue is recognized following a five-step model: (i) identify the customer contract; (ii) identify the contract’s performance obligation; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligation; and (v) recognize revenue when or as a performance obligation is satisfied. Revenue is also reduced for GTN sales adjustments discussed below, all of which involve significant estimates and judgment after considering legal interpretations of applicable laws and regulations, historical experience, payer channel mix (e.g. Medicare or Medicaid), current contract prices under applicable programs, unbilled claims and processing time lags and inventory levels in the distribution channel. Estimates are assessed each period and adjusted as required to revise information or actual experience.

The following categories of GTN adjustments involve significant estimates, judgments and information obtained from external sources. Refer to “Consolidated Financial Statements-Note 2. Revenue” for further discussion and analysis of each significant category of GTN sales adjustments.

#### Charge-backs and cash discounts

Our U.S. business participates in programs with government entities, the most significant of which are the U.S. Department of Defense and the U.S. Department of Veterans Affairs, and other parties, including covered entities under the 340B program, whereby pricing on products is extended below wholesaler list price to participating entities. These entities purchase products through wholesalers at the lower program price and the wholesalers then charge us the difference between their acquisition cost and the lower program price. Accounts receivable is reduced for the estimated amount of unprocessed charge-back claims attributable to a sale (typically within a two to four week time lag).

In the U.S. and certain other countries, customers are offered cash discounts as an incentive for prompt payment, generally approximating 2% of the invoiced sales price. Accounts receivable is reduced for the estimated amount of cash discount at the time of sale and the discount is typically taken by the customer within one month.

#### Medicaid and Medicare rebates

Our U.S. business participates in state government Medicaid programs and other qualifying Federal and state government programs requiring discounts and rebates to participating state and local government entities. All discounts and rebates provided through these programs are included in our Medicaid rebate accrual. Medicaid rebates have also been extended to drugs used in managed Medicaid plans. The estimated amount of unpaid or unbilled rebates is presented as a liability.

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Rebates and discounts are offered to managed healthcare organizations in the U.S. managing prescription drug programs and Medicare Advantage prescription drug plans covering the Medicare Part D drug benefit. We also pay a 70% point of service discount to the CMS when the Medicare Part D beneficiaries are in the coverage gap. The estimated amount of unpaid or unbilled rebates and discounts is presented as a liability.

#### *Other rebates, returns, discounts and adjustments*

Other GTN sales adjustments include sales returns and all other programs based on applicable laws and regulations for individual non-U.S. countries as well as rebates offered to managed healthcare organizations in the U.S. to a lesser extent. The non-U.S. programs include several different pricing schemes such as cost caps, volume discounts, outcome-based pricing schemes and pricing claw-backs that are based on sales of individual companies or an aggregation of all companies participating in a specific market. The estimated amount of unpaid or unbilled rebates and discounts is presented as a liability.

Estimated returns for established products are determined after considering historical experience and other factors including levels of inventory in the distribution channel, estimated shelf life, product recalls, product discontinuances, price changes of competitive products, introductions of generic products, introductions of competitive new products and lower demand following the loss of market exclusivity. Estimated returns for new products are determined after considering historical sales return experience of similar products, such as those within the same product line, similar therapeutic area and/or similar distribution model and estimated levels of inventory in the distribution channel and projected demand. The estimated amount for product returns is presented as a liability.

#### *Use of information from external sources*

Information from external sources is used to estimate GTN adjustments. Our estimate of inventory at the wholesalers is based on the projected prescription demand-based sales for our products and historical inventory experience, as well as our analysis of third-party information, including written and oral information obtained from certain wholesalers with respect to their inventory levels and sell-through to customers and third-party market research data, and our internal information. The inventory information received from wholesalers is a product of their recordkeeping process and excludes inventory held by intermediaries to whom they sell, such as retailers and hospitals.

We have also continued the practice of combining retail and mail prescription volume on a retail-equivalent basis. We use this methodology for internal demand forecasts. We also use information from external sources to identify prescription trends, patient demand and average selling prices. Our estimates are subject to inherent limitations of estimates that rely on third-party information, as certain third-party information was itself in the form of estimates, and reflect other limitations including lags between the date as of which third-party information is generated and the date on which we receive third-party information.

#### *Acquisition and Intangible Assets Valuations*

We make certain judgments to determine whether transactions should be accounted for as acquisitions of assets or as business combinations. If it is determined that substantially all of the fair value of gross assets acquired in a transaction is concentrated in a single asset (or a group of similar assets), the transaction is treated as an acquisition of assets. We evaluate the inputs, processes, and outputs associated with the acquired set of activities and assets. If the assets in a transaction include an input and a substantive process that together significantly contribute to the ability to create outputs, the transaction is treated as an acquisition of a business. Our assessments concluded that the Turning Point transaction was a business combination in 2022 and the MyoKardia transaction in 2020 was an asset acquisition.

We account for business combinations using the acquisition method of accounting, which requires that assets acquired and liabilities assumed generally be recorded at their fair values as of the acquisition date. Excess of consideration over the fair value of net assets acquired is recorded as goodwill. Estimating fair value requires us to make significant judgments and assumptions.

In transactions accounted for as acquisitions of assets, no goodwill is recorded and contingent consideration, such as payments upon achievement of various developmental, regulatory and commercial milestones, generally is not recognized at the acquisition date. In an asset acquisition, upfront payments allocated to IPRD projects at the acquisition date are expensed unless there is an alternative future use. In addition, product development milestones are expensed upon achievement.

We have identifiable intangible assets that are measured at their respective fair values as of the acquisition date. Generally, we engage an independent third-party valuation firm to assist in determining the fair values of these assets as of the acquisition date. The fair value of these assets is estimated using discounted cash flow models. These models required the use of the following significant estimates and assumptions among others:

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2022 Annual Report

- • Identification of product candidates with sufficient substance requiring separate recognition;
- • Estimates of revenues and operating profits related to commercial products or product candidates;
- • Eligible patients, pricing and market share used in estimating future revenues;
- • Probability of success for unapproved product candidates and additional indications for commercial products;
- • Resources required to complete the development and approval of product candidates;
- • Timing of regulatory approvals and exclusivity;
- • Appropriate discount rate by products;
- • Market participant income tax rates; and
- • Allocation of expected synergies to products.

We believe the fair value used to record intangible assets acquired are based upon reasonable estimates and assumptions considering the facts and circumstances as of the acquisition date.

### *Impairment and Amortization of Long-lived Assets, including Intangible Assets*

Long-lived assets include intangible assets and property, plant and equipment and are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable or at least annually for IPRD. Intangible assets are highly vulnerable to impairment charges, particularly newly acquired assets for recently launched products or IPRD. These assets are initially measured at fair value and therefore any reduction in expectations used in the valuations could potentially lead to impairment. Some of the more common potential risks leading to impairment include changes in competitive landscape, earlier than expected loss of market exclusivity, pricing reductions, adverse regulatory changes or clinical study results, delay or failure to obtain regulatory approval for initial or follow on indications and unanticipated development costs, inability to achieve expected synergies resulting from cost savings and avoidance, higher operating costs, changes in tax laws and other macroeconomic changes. The complexity in estimating the fair value of intangible assets in connection with an impairment test is similar to the initial valuation. If the carrying value of long-lived assets exceeds its fair value, then the asset is written-down to its fair value. Expectations of future cash flows are subject to change based upon the near and long-term production volumes and margins generated by the asset as well as any potential alternative future use. The estimated useful lives of long-lived assets is subjective and requires significant judgment regarding patent lives, future plans and external market factors. Long-lived assets are also periodically reviewed for changes in facts or circumstances resulting in a reduction to the estimated useful life of the asset, requiring the acceleration of depreciation or amortization. Impairment charges included in Cost of products sold and Research and development expense were $101 million in 2022, $1.2 billion in 2021 and $1.1 billion in 2020. Refer to “Consolidated Financial Statements-Note 15. Goodwill and Other Intangible Assets” for further discussion and analysis of these impairment charges.

### *Income Taxes*

Valuation allowances are recognized to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized. The assessment of whether or not a valuation allowance is required often requires significant judgment including long-range forecasts of future taxable income and evaluation of tax planning initiatives. Adjustments to the deferred tax valuation allowances are made to earnings in the period when such assessments are made. Our deferred tax assets were $4.1 billion at December 31, 2022 (net of valuation allowance of $873 million) and $2.7 billion at December 31, 2021 (net of valuation allowance of $1.1 billion).

The U.S. federal net operating loss carryforwards were $709 million at December 31, 2022. These carryforwards were acquired as a result of certain acquisitions and are subject to limitations under Section 382 of the Internal Revenue Code. The net operating loss carryforwards expire in varying amounts beginning in 2023. The foreign and state net operating loss carryforwards expire in varying amounts beginning in 2023 (certain amounts have unlimited lives).

Prior to the Mead Johnson split-off in 2009, the following transactions occurred: (i) an internal spin-off of Mead Johnson shares while still owned by us; (ii) conversion of Mead Johnson Class B shares to Class A shares; and (iii) conversion of Mead Johnson & Company to a limited liability company. These transactions as well as the split-off of Mead Johnson through the exchange offer should qualify as tax-exempt transactions under the Internal Revenue Code based upon a private letter ruling received from the Internal Revenue Service related to the conversion of Mead Johnson Class B shares to Class A shares, and outside legal opinions.

Certain assumptions, representations and covenants by Mead Johnson were relied upon regarding the future conduct of its business and other matters which could affect the tax treatment of the exchange. For example, the current tax law generally creates a presumption that the exchange would be taxable to us, if Mead Johnson or its shareholders were to engage in transactions that result in a 50% or greater change in its stock ownership during a four year period beginning two years before the exchange offer, unless it is established that the exchange offer were not part of a plan or series of related transactions to effect such a change in ownership. If the internal spin-off or exchange offer were determined not to qualify as a tax exempt transaction, the transaction could be subject to tax as if the exchange was a taxable sale by us at market value.

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In addition, a negative basis or excess loss account (“ELA”) existed in our investment in stock of Mead Johnson prior to these transactions. We received an opinion from outside legal counsel to the effect that it is more likely than not that we eliminated the ELA as part of these transactions and do not have taxable income with respect to the ELA. The tax law in this area is complex and it is possible that even if the internal spin-off and the exchange offer is tax exempt under the Internal Revenue Code, the Internal Revenue Service could assert that we have additional taxable income for the period with respect to the ELA. We could be exposed to additional taxes if this were to occur. Based upon our understanding of the Internal Revenue Code and opinion from outside legal counsel, a tax reserve of $244 million was established reducing the gain on disposal of Mead Johnson included in discontinued operations in 2009. In December 2022, we have determined this position to be effectively settled and have released the related reserves.

We agreed to certain tax related indemnities with Mead Johnson as set forth in the tax sharing agreement, including certain taxes related to its business prior to the completion of the initial public offering and created as part of the restructuring to facilitate the IPO. Mead Johnson has also agreed to indemnify us for potential tax effects resulting from the breach of certain representations discussed above as well as certain transactions related to the acquisition of Mead Johnson’s stock or assets.

Liabilities are established for possible assessments by tax authorities resulting from known tax exposures including, but not limited to, transfer pricing matters, tax credits and deductibility of certain expenses. Such liabilities represent a reasonable provision for taxes ultimately expected to be paid and may need to be adjusted over time as more information becomes known.

For discussions on income taxes, refer to “Consolidated Financial Statements-Note 1. Accounting Policies and Recently Issued Accounting Standards-Income Taxes” and “-Note 7. Income Taxes.”

### *Contingencies*

In the normal course of business, we are subject to contingencies, such as legal proceedings and claims arising out of our business, that cover a wide range of matters, including, among others, government investigations, shareholder lawsuits, product and environmental liability, contractual claims and tax matters. We recognize accruals for such contingencies when it is probable that a liability will be incurred and the amount of the loss can be reasonably estimated. These estimates are subject to uncertainties that are difficult to predict and, as such, actual results could vary from these estimates.

For discussions on contingencies, refer to “Consolidated Financial Statements-Note 1. Accounting Policies and Recently Issued Accounting Standards-Contingencies,” “-Note 7. Income Taxes” and “-Note 20. Legal Proceedings and Contingencies.”

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2022 Annual Report

## Product and Pipeline Developments

Our R&D programs are managed on a portfolio basis from early discovery through late-stage development and include a balance of early-stage and late-stage programs to support future growth. Our late stage R&D programs in Phase III development include both investigational compounds for initial indications and additional indications or formulations for marketed products. Spending on these programs represents approximately 40% of our annual R&D expenses in the last three years. *Opdivo* was the only investigational compound or marketed product that represented greater than 10% of our R&D expenses in the last three years. Our late-stage development programs could potentially have an impact on our revenue and earnings within the next few years if regulatory approvals are obtained and products are successfully commercialized. The following are the late-stage new indication developments in our marketed products, as well as developments in our late-stage pipeline through February 2, 2023:

| Product | Indication | Date | Developments |
| --- | --- | --- | --- |
| Opdivo | Bladder | April 2022 | Announced EC approval of Opdivo for the adjuvant treatment of adults with muscle-invasive urothelial carcinoma with tumor cell PD-L1 expression ≥ 1% who are at risk of recurrence after undergoing radical resection. The approval is based on results from the Phase III CheckMate -274 trial. |
|  |  | March 2022 | Ono, our alliance partner for Opdivo in Japan, announced that the Japan's Ministry of Health, Labour and Welfare approved Opdivo for the adjuvant treatment of urothelial carcinoma, for partial change in approved items of the manufacturing and marketing approval. The approval is based on results from the Phase III CheckMate-274 (ONO-4538-33) trial. |
|  | ESCC | May 2022 | Ono, our alliance partner for Opdivo in Japan, announced that Japan's Ministry of Health, Labour and Welfare approved Opdivo in combination with fluoropyrimidine- and platinum-containing chemotherapy for the first-line treatment for adult patients with previously untreated unresectable advanced or metastatic ESCC with PD-L1 expression > 1%, as well as in the all-randomized population. The approval is based on the Phase III CheckMate -648 trial (ONO-4538-50/CA209648). |
|  |  | May 2022 | Announced FDA approval of Opdivo in combination with fluoropyrimidine- and platinum-containing chemotherapy as a first-line treatment for adult patients with unresectable advanced or metastatic ESCC regardless of PD-L1 status. The approval is based on the Phase III CheckMate -648 trial. |
|  |  | April 2022 | Announced EC approval of Opdivo in combination with fluoropyrimidine- and platinum-based chemotherapy for the first-line treatment of adult patients with unresectable advanced, recurrent, or metastatic ESCC with PD-L1 expression ≥ 1%. The approval is based on results from the Phase III CheckMate -648 trial. |
|  | Melanoma | October 2022 | Announced that results from the Phase III CheckMate -76K trial evaluating Opdivo in the adjuvant setting in patients with completely resected stage IIB or IIC melanoma demonstrated a statistically significant and clinically meaningful benefit in recurrence-free survival and the risk of recurrence or death was reduced by 58% versus placebo. No new safety signals were observed. |
|  |  | March 2022 | Announced that the Phase III PIVOT IO-001 trial did not meet the primary endpoints of progression-free survival (PFS) and objective response rate (ORR) in patients with previously untreated unresectable or metastatic melanoma who were treated with bempegaldesleukin in combination with Opdivo compared to Opdivo monotherapy. The DMC notified the companies that the third primary endpoint of overall survival (OS) did not meet statistical significance at the first interim analysis. The trial was conducted in collaboration with Nektar. The trial will be unblinded and no additional analyses for the OS endpoint will be performed. |
|  |  |  | Based on subsequent results from pre-planned analyses of two late-stage clinical studies in RCC and bladder cancer, coupled with the results of PIVOT IO-001 noted above, BMS and Nektar have jointly decided to end the global clinical development program for bempegaldesleukin in combination with Opdivo . |

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Bristol Myers Squibb

| Product | Indication | Date | Developments |
| --- | --- | --- | --- |
| Opdivo | NSCLC | April 2022 | Ono, our alliance partner for Opdivo in Japan, announced that the companies have submitted the supplemental Japanese NDA to Pharmaceuticals and Medical Devices Agency for Opdivo to expand its use as a neoadjuvant treatment of resectable NSCLC in combination with chemotherapy for a partial change in approved items of the manufacturing and marketing approval in Japan. The application is based on the Phase III CheckMate -816 study. |
|  |  | April 2022 | Announced results from the Phase III CheckMate-816 trial which showed that neoadjuvant treatment with Opdivo in combination with chemotherapy significantly improved event-free survival, a primary endpoint, compared to chemotherapy alone in patients with resectable NSCLC. Opdivo in combination with chemotherapy reduced the risk of disease recurrence, progression or death by 37%, and demonstrated favorable early overall survival trend. |
|  |  | March 2022 | Announced that the EMA validated the Type II Variation application for Opdivo in combination with chemotherapy for the neoadjuvant treatment of patients with resectable stage IB to IIIA NSCLC. The application is based on results from the Phase III CheckMate-816 trial. |
|  |  | March 2022 | Announced FDA approval of Opdivo in combination with platinum-doublet chemotherapy for the treatment of adult patients with resectable NSCLC in the neoadjuvant setting. The approval is based on the Phase III CheckMate-816 trial. |
|  | RCC | April 2022 | Announced, with our alliance partner Nektar, that based on results from pre-planned analysis of two late-stage clinical studies of bempegaldesleukin in combination with Opdivo in RCC and bladder cancer, to jointly end the global clinical development program for bempegaldesleukin in combination with Opdivo . These studies and all other ongoing studies in the program will be discontinued. |
|  |  | February 2022 | Announced two-year follow-up results from analysis of the Phase III CheckMate-9ER trial, demonstrating sustained survival, response rate benefits, and health-related quality of life improvements, with the combination of Opdivo and Cabometyx * versus sunitinib in the first-line treatment of advanced RCC. |
| Opdivo + Yervoy | RCC | July 2022 | Announced that Part A of the Phase III CheckMate -914 trial, evaluating Opdivo plus Yervoy as an adjuvant treatment for patients with localized RCC who have undergone full or partial removal of the kidney and who are at moderate or high risk of relapse, did not meet the primary endpoint of disease-free survival. The safety profile was consistent with previously reported studies of the Opdivo plus Yervoy combination in solid tumors. |
|  | NSCLC | June 2022 | Announced five-year follow up results from Part I of the Phase III CheckMate -227 trial demonstrating long-term, durable survival outcomes with Opdivo plus Yervoy in first-line treatment of patients with metastatic NSCLC regardless of PD-L1 expression levels. In the primary endpoint population, the combination nearly doubled overall survival rate compared to chemotherapy. |
|  |  | June 2022 | Announced three-year follow up results from the Phase III CheckMate -9LA trial demonstrating long-term, durable survival benefits with Opdivo plus Yervoy with two cycles of chemotherapy compared to four cycles of chemotherapy in patients with previously untreated metastatic NSCLC regardless of PD-L1 expression and histology. |
|  | Bladder | May 2022 | Announced that results from Phase III CheckMate -901 trial, comparing Opdivo plus Yervoy to standard-of-care chemotherapy as a first-line treatment for patients with untreated unresectable or metastatic urothelial carcinoma, who are ineligible for cisplatin based chemotherapy, did not meet the primary endpoint of overall survival in patients whose tumor cells express PD-L1 > 1% at final analysis. The trial is continuing to assess other primary and secondary endpoints, no new safety signals were observed at the time of analysis. |
|  | ESCC | May 2022 | Ono, our alliance partner for Opdivo plus Yervoy in Japan, announced that Japan's Ministry of Health, Labour and Welfare approved Opdivo in combination with fluoropyrimidine- and platinum- containing chemotherapy for the first-line treatment for adult patients with previously untreated unresectable advanced or metastatic ESCC with PD-L1 expression ≥1%, as well as in the all-randomized population. The approval is based on the Phase III CheckMate -648 trial. |
|  |  | May 2022 | Announced FDA approval of Opdivo plus Yervoy as a first-line treatment for adult patients with unresectable advanced or metastatic ESCC regardless of PD-L1 status. The approval is based on the Phase III CheckMate -648 trial. |
|  |  | April 2022 | Announced EC approval of Opdivo plus Yervoy for the first-line treatment of adult patients with unresectable advanced, recurrent or metastatic ESCC with tumor cell PD-L1 expression > 1%. The approval is based on results from the Phase III CheckMate -648 trial. |

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2022 Annual Report

| Product | Indication | Date | Developments |
| --- | --- | --- | --- |
| Orencia | COVID-19 | June 2022 | Announced that initial results from the Phase III Accelerating COVID-19 Therapeutic Interventions and Vaccines (ACTIV-1) immune modulators clinical trial sponsored by the National Institutes of Health showed a strong, but not statistically significant improvement in the primary endpoint of time to recovery as measured by day of hospital discharge. Analyses of the secondary endpoints, including mortality and clinical status, demonstrated Orencia reduced participants' risk of death and improved their clinical status at 28 days after entering the study when compared with placebo. |
| Reblozyl | Beta Thalassemia | January 2023 | Announced that the Committee for Medicinal Product for Human Use (CHMP) of the European Medicines Agency (EMA) has recommended approval of Reblozyl as a treatment for adult patients with anemia associated with non-transfusion-dependent (NTD) beta thalassemia. |
|  |  | June 2022 | Announced the withdrawal of the sBLA for Reblozyl for the treatment of anemia in adults with non-transfusion dependent beta thalassemia. We could not appropriately address the FDA's questions about the benefit-risk profile of Reblozyl in this patient population based on the current dataset from the Phase II BEYOND trial. |
|  | MDS | October 2022 | Announced that results from the Phase III COMMANDS trial evaluating Reblozyl met its primary endpoint, demonstrating a highly statistically significant and clinical meaningful improvement in red blood cell transfusion independence with concurrent hemoglobin increase in the first-line treatment of adult patients with very low-, low- or intermediate-risk MDS who require red blood cell transfusions. |
| Abecma | Multiple Myeloma | August 2022 | Announced with our alliance partner, 2seventy bio, Inc., positive topline results from the Phase III KarMMA-3 trial evaluating Abecma compared to standard combination regimens in adults with multiple myeloma that is relapsed and refractory after two to four prior lines of therapy and refractory to the last regimen showing Abecma significantly improves progression-free survival. Treatment with Abecma also showed an improvement in the key secondary endpoint of overall response rate compared to standard regimens. |
|  |  | January 2022 | Announced Japan's Ministry of Health, Labour and Welfare approval of Abecma for the treatment of adult patients with relapsed or refractory multiple myeloma, who have received at least three prior therapies, including an immunomodulatory agent, a proteasome inhibitor and an anti-CD38 antibody, and have either experienced disease progression on the last therapy or relapse after the last therapy. The approval is based on results from the Phase II BB2121-MM-001 and Phase I CRB-401 trials. |
| Zeposia | MS | October 2022 | Announced retrospective analysis from the ongoing Phase III DAYBREAK open-label extension trial of Zeposia in relapsing MS showed that more than 92% of participants mounted a serologic response to COVID-19 following vaccination, with 10% COVID-19-related adverse events in vaccinated participants, all non-serious. Post hoc analyses from the Phase III DAYBREAK and RADIANCE trials demonstrated a greater proportion of patients treated with Zeposia versus interferon beta-1a had a lower annualized rate of brain volume loss. |
|  | UC | October 2022 | Announced post hoc analyses from the Phase III True North study evaluating the duration of response following continuous Zeposia treatment for up to one year and following treatment interruption in patients with moderately to severely active UC. After achieving a clinical response at the end of the induction period, 86.1% of patients who remained on Zeposia showed no disease relapse at week 52. Disease control was maintained for up to eight weeks in patients who switched to placebo after initial response. |

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Bristol Myers Squibb

| Product | Indication | Date | Developments |
| --- | --- | --- | --- |
| Breyanzi | Lymphoma | January 2023 | Announced positive topline results from the Phase II portion of the TRANSCEND CLL 004, a Phase I/II, open-label, single-arm, multicenter study evaluating Breyanzi in adults with relapsed or refractory chronic lymphocytic leukemia or small lymphocytic lymphoma. The study met the primary endpoint of complete response rate compared to historical control. |
|  |  | December 2022 | Announced Japan's Ministry of Health, Labour and Welfare approval of Breyanzi for use in the second-line treatment of relapsed or refractory large B-cell lymphoma, regardless of whether autologous hematopoietic stem-cell transplantation is intended. The approval is based on the results of clinical trials in patients with relapsed or refractory aggressive B-cell non-Hodgkin lymphoma after first-line therapy, including global Phase III clinical trials (JCAR017-BCM-003) in patients intended for autologous hematopoietic stem-cell transplantation, Phase II clinical trials (017006) in the United States (U.S.) in patients not intended for autologous hematopoietic stem-cell transplantation, and cohort 2 of Phase II clinical trials (JCAR017-BCM-001) in Europe and Japan. |
|  |  | June 2022 | Announced FDA approval of Breyanzi for the second-line treatment of adult patients with large B-cell lymphoma, including diffuse large B-cell lymphoma not otherwise specified high-grade B-cell lymphoma, primary mediastinal large B-cell lymphoma and follicular lymphoma grade 3B who have: refractory disease to first line chemoimmunotherapy or relapsed within 12 months of first-line chemoimmunotherapy; or refractory disease to first-line chemoimmunotherapy or relapse after first-line chemoimmunotherapy and are not eligible for hematopoietic stem cell transplant due to comorbidities or age. The approval is based on results from the Phase II PILOT and Phase III TRANSFORM trials. |
|  |  | June 2022 | Announced that the EMA validated its Type II Variation application for extension of the indication for Breyanzi in second-line treatment of adult patients with diffuse large B-cell lymphoma, high grade B-cell lymphoma, primary mediastinal large B-cell lymphoma and follicular lymphoma grade 3B, who are refractory or have relapsed within 12 months of initial therapy and are candidates for hematopoietic stem cell transplant. The application is based on the Phase III TRANSFORM study. |
|  |  | April 2022 | Announced EC approval of Breyanzi for the treatment of adult patients with relapsed or refractory diffuse large B-cell lymphoma, primary mediastinal large B-cell lymphoma, and follicular lymphoma grade 3B after two or more lines of systemic therapy. The approval is based on results from the TRANSCEND WORLD and TRANSCEND NHL 001 trials. |
| Opdualag | Melanoma | September 2022 | Announced EC approval of the fixed-dose combination of Opdualag for the first-line treatment of advanced unresectable or metastatic melanoma in adults and adolescents 12 years of age and older with tumor cell PD-L1 expression < 1%. The approval is based on results from the Phase II/III RELATIVITY -047 trial. |
|  |  | March 2022 | Announced FDA approval of Opdualag (nivolumab and relatlimab-rmbw), a fixed-dose combination of nivolumab and relatlimab, a novel LAG-3 inhibitor, for the treatment of adult and pediatric patients 12 years of age or older with unresectable or metastatic melanoma. The approval is based on results from the Phase II/III RELATIVITY-047 trial. |
| Camzyos (mavacamten) | Obstructive HCM | October 2022 | Announced that the FDA accepted the supplemental NDA for Camzyos for an expanded indication to reduce the need for septal reduction therapy. The FDA has set a target action date of June 16, 2023. The supplemental NDA is based on results from the Phase III VALOR-HCM trial. |
|  |  | April 2022 | Announced FDA approval of Camzyos for the treatment of adults with symptomatic New York Heart Association class II-III obstructive HCM to improve functional capacity and symptoms. The approval is based on results from the Phase III EXPLORER-HCM trial. |
|  |  | April 2022 | Announced that interim results from the EXPLORER-LTE cohort of the MAVA-LTE trial in patients with symptomatic obstructive HCM showed sustained improvements in cardiovascular function and patient symptoms at 48 and 84 weeks, no new safety signals were observed. |

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2022 Annual Report

| Product | Indication | Date | Developments |
| --- | --- | --- | --- |
| Sotyktu | Plaque Psoriasis | January 2023 | The CHMP of the EMA has recommended the approval of Sotyktu for the treatment of adults with moderate-to-severe plaque psoriasis. The CHMP recommendation will now be reviewed by the EC which has the authority to approve medicines of the EC. |
|  |  | September 2022 | Announced Japan’s Ministry of Health, Labour and Welfare approval of Sotyktu for treatment of plaque psoriasis, generalized pustular psoriasis, or erythrodermic psoriasis, for patients who have had an inadequate response to conventional therapies. The approval is based on the results from the Phase III POETYK PSO-1 trial. |
|  |  | September 2022 | Announced FDA approval of Sotyktu for the treatment of adults with moderate-to-severe plaque psoriasis who are candidates for systemic therapy or phototherapy. The approval is based on results from the Phase III POETYK PSO-1 and POETYK PSO-2 clinical trials. |
|  |  | September 2022 | Announced two-year results from the POETYK PSO long-term extension trial demonstrating that clinical efficacy was maintained with continuous Sotyktu treatment in adult patients with moderate-to-severe plaque psoriasis. |
|  | SLE | June 2022 | Announced results from the Phase II PAISLEY trial that showed statistically significant efficacy at the primary endpoint of SLE Responder Index-4 responses at week 32 among patients with moderate-to-severe SLE who were treated with Sotyktu versus placebo. Secondary endpoints demonstrated clinically meaningful improvements at week 48. The safety profile of Sotyktu was consistent with previously reported studies in patients with psoriasis and psoriatic arthritis with no new safety signals observed. Data demonstrated favorable risk-benefit profile supportive of progressing into Phase III. |

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Bristol Myers Squibb

## Special Note Regarding Forward-Looking Statements

This 2022 Annual Report on Form 10-K (including documents incorporated by reference) and other written and oral statements we make from time to time contain certain “forward-looking” statements within the meaning of Section 27A of the Securities Act, and Section 21E of the Exchange Act. You can identify these forward-looking statements by the fact they use words such as “should,” “could,” “expect,” “anticipate,” “estimate,” “target,” “may,” “project,” “guidance,” “intend,” “plan,” “believe,” “will” and other words and terms of similar meaning and expression in connection with any discussion of future operating or financial performance. One can also identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. Such forward-looking statements are based on our current expectations and projections about our future financial results, goals, plans and objectives and involve inherent risks, assumptions and uncertainties, including internal or external factors that could delay, divert or change any of them in the next several years, and could cause our future financial results, goals, plans and objectives to differ materially from those expressed in, or implied by, the statements. These statements are likely to relate to, among other things, our goals, plans and objectives regarding our financial position, results of operations, cash flows, market position, product development, product approvals, sales efforts, expenses, performance or results of current and anticipated products, our business development strategy and in relation to our ability to realize the projected benefits of our acquisitions of Celgene, MyoKardia, and Turning Point, the impact of the COVID-19 pandemic on our operations and the development and commercialization of our products, potential laws and regulations to lower drug prices, market actions taken by private and government payers to manage drug utilization and contain costs, the expiration of patents or data protection on certain products, including assumptions about our ability to retain marketing exclusivity of certain products, and the outcome of contingencies such as legal proceedings and financial results. No forward-looking statement can be guaranteed. We have included important factors in the cautionary statements included in our most recently filed 2022 Form 10-K, particularly under “Item 1A. Risk Factors,” that we believe could cause actual results to differ materially from any forward-looking statement.

Although we believe that we have been prudent in our plans and assumptions, no assurance can be given that any goal or plan set forth in forward-looking statements can be achieved and readers are cautioned not to place undue reliance on such statements, which speak only as of the date made. Additional risks that we may currently deem immaterial or that are not presently known to us could also cause the forward-looking events discussed in this 2022 Annual Report on Form 10-K not to occur. Except as otherwise required by applicable law, we undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, changed circumstances or otherwise after the date of this 2022 Annual Report on Form 10-K.

## QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to market risk resulting from changes in currency exchange rates and interest rates. Certain derivative financial instruments are used when available on a cost-effective basis to hedge our underlying economic exposure. All of our financial instruments, including derivatives, are subject to counterparty credit risk considered as part of the overall fair value measurement. Derivative financial instruments are not used for trading purposes.

### Foreign Exchange Risk

Significant amounts of our revenues, earnings and cash flow are exposed to changes in foreign currency rates. Our primary net foreign currency translation exposures are the euro and Japanese yen. Foreign currency forward and purchased local currency put option contracts are used to manage risk primarily arising from certain intercompany sales and purchases transactions.

We are also exposed to foreign exchange transaction risk arising from non-functional currency denominated assets and liabilities and earnings denominated in non-U.S. dollar currencies. Foreign currency forward contracts are used to offset these exposures but are not designated as hedges.

We estimate that a 10% appreciation in the underlying currencies being hedged from their levels against the U.S. dollar (with all other variables held constant) would decrease the fair value of foreign exchange contracts by $782 million and $678 million as of December 31, 2022 and December 31, 2021, respectively, reducing earnings over the remaining life of the contracts.

Cross-currency interest rate swap contracts are used to manage risk arising from long-term debt denominated in euros and to hedge the Company’s net investment in its foreign subsidiaries. We estimate that a 10% appreciation in the underlying currencies being hedged from their levels against the U.S. dollar (with all other variables held constant) would decrease the fair value of cross-currency interest swap contracts by $73 million and $58 million as of December 31, 2022 and December 31, 2021.

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We are also exposed to translation risk on non-U.S. dollar-denominated net assets. Non-U.S. dollar borrowings are used to hedge the foreign currency exposures of our net investment in certain international affiliates and are designated as hedges of net investments. The effective portion of foreign exchange gains or losses on these hedges is included in the foreign currency translation component of Accumulated other comprehensive loss. If our net investment decreases below the equivalent value of the non-U.S. debt borrowings, the change in the remeasurement basis of the debt would be subject to recognition in income as changes occur. For additional information, refer to “Consolidated Financial Statements-Note 9. Financial Instruments and Fair Value Measurements.”

### **Interest Rate Risk**

We use fixed-to-floating interest rate swap contracts designated as fair value hedges to provide an appropriate balance of fixed and floating rate debt. We use cross-currency interest rate swap contracts designated to manage risk arising from long-term debt denominated in euros and to hedge the Company’s net investment in its foreign subsidiaries. The fair values of these contracts as well as our marketable debt securities are analyzed at year-end to determine their sensitivity to interest rate changes. In this sensitivity analysis, if there was a 1% increase in short-term or long-term interest rates as of December 31, 2022 and December 31, 2021, the expected adverse impact on our earnings would not be material.

We estimate that an increase of 1% in long-term interest rates as of December 31, 2022 and December 31, 2021 would decrease the fair value of long-term debt by $2.6 billion and $3.8 billion, respectively.

### **Credit Risk**

We monitor our investments with counterparties with the objective of minimizing concentrations of credit risk. Our investment policy is to invest only in institutions that meet high credit quality standards and establishes limits on the amount and time to maturity of investments with any individual counterparty. The policy also requires that investments are only entered into with corporate and financial institutions that meet high credit quality standards.

The use of derivative instruments exposes us to credit risk if the counterparty fails to perform when the fair value of a derivative instrument contract is positive. If the counterparty fails to perform, collateral is not required by any party whether derivatives are in an asset or liability position. We have a policy of diversifying derivatives with counterparties to mitigate the overall risk of counterparty defaults. For additional information, refer to “Consolidated Financial Statements-Note 9. Financial Instruments and Fair Value Measurements.”

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Bristol Myers Squibb

# **CONSOLIDATED STATEMENTS OF EARNINGS**

Dollars in Millions, Except Per Share Data

| EARNINGS | Year Ended December 31, |  |  |
| --- | --- | --- | --- |
|  | 2022 | 2021 | 2020 |
| Net product sales | $44,671 | $45,055 | $41,321 |
| Alliance and other revenues | 1,488 | 1,330 | 1,197 |
| Total Revenues | 46,159 | 46,385 | 42,518 |
| Cost of products sold (a) | 10,137 | 9,940 | 11,773 |
| Marketing, selling and administrative | 7,814 | 7,690 | 7,661 |
| Research and development | 9,509 | 10,195 | 10,048 |
| Acquired IPRD | 815 | 1,159 | 12,533 |
| Amortization of acquired intangible assets | 9,595 | 10,023 | 9,688 |
| Other (income)/expense, net | 576 | (720) | (2,314) |
| Total Expenses | 38,446 | 38,287 | 49,389 |
| Earnings/(Loss) Before Income Taxes | 7,713 | 8,098 | (6,871) |
| Provision for Income Taxes | 1,368 | 1,084 | 2,124 |
| Net Earnings/(Loss) | 6,345 | 7,014 | (8,995) |
| Noncontrolling Interest | 18 | 20 | 20 |
| Net Earnings/(Loss) Attributable to BMS | $6,327 | $6,994 | $(9,015) |
| Earnings/(Loss) per Common Share |  |  |  |
| Basic | $2.97 | $3.15 | $(3.99) |
| Diluted | 2.95 | 3.12 | (3.99) |

(a) Excludes amortization of acquired intangible assets.

# **CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS)**

Dollars in Millions

| COMPREHENSIVE INCOME/(LOSS) | Year Ended December 31, |  |  |
| --- | --- | --- | --- |
|  | 2022 | 2021 | 2020 |
| Net Earnings/(Loss) | $6,345 | $7,014 | $(8,995) |
| Other Comprehensive Income/(Loss), net of taxes and reclassifications to earnings: |  |  |  |
| Derivatives qualifying as cash flow hedges | 54 | 415 | (256) |
| Pension and postretirement benefits | 145 | 206 | (75) |
| Marketable debt securities | (2) | (9) | 5 |
| Foreign currency translation | (210) | (41) | 7 |
| Total Other Comprehensive Income/(Loss) | (13) | 571 | (319) |
| Comprehensive Income/(Loss) | 6,332 | 7,585 | (9,314) |
| Comprehensive Income Attributable to Noncontrolling Interest | 18 | 20 | 20 |
| Comprehensive Income/(Loss) Attributable to BMS | $6,314 | $7,565 | $(9,334) |

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

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# **CONSOLIDATED BALANCE SHEETS**

Dollars in Millions, Except Share and Per Share Data

|  | December 31, |  |
| --- | --- | --- |
|  | 2022 | 2021 |
| ASSETS |  |  |
| Current Assets: |  |  |
| Cash and cash equivalents | $9,123 | $13,979 |
| Marketable debt securities | 130 | 2,987 |
| Receivables | 9,886 | 9,369 |
| Inventories | 2,339 | 2,095 |
| Other current assets | 5,795 | 4,832 |
| Total Current Assets | 27,273 | 33,262 |
| Property, plant and equipment | 6,255 | 6,049 |
| Goodwill | 21,149 | 20,502 |
| Other intangible assets | 35,859 | 42,527 |
| Deferred income taxes | 1,344 | 1,439 |
| Other non-current assets | 4,940 | 5,535 |
| Total Assets | $96,820 | $109,314 |
| LIABILITIES |  |  |
| Current Liabilities: |  |  |
| Short-term debt obligations | $4,264 | $4,948 |
| Accounts payable | 3,040 | 2,949 |
| Other current liabilities | 14,586 | 13,971 |
| Total Current Liabilities | 21,890 | 21,868 |
| Deferred income taxes | 2,166 | 4,501 |
| Long-term debt | 35,056 | 39,605 |
| Other non-current liabilities | 6,590 | 7,334 |
| Total Liabilities | 65,702 | 73,308 |
| Commitments and contingencies |  |  |
| EQUITY |  |  |
| Bristol-Myers Squibb Company Shareholders' Equity: |  |  |
| Preferred stock, $2 convertible series, par value $1 per share: Authorized 10 million shares; issued and outstanding 2,991 in 2022 and 3,484 in 2021, liquidation value of $50 per share | - | - |
| Common stock, par value of $0.10 per share: Authorized 4.5 billion shares; 2.9 billion issued in 2022 and 2021 | 292 | 292 |
| Capital in excess of par value of stock | 45,165 | 44,361 |
| Accumulated other comprehensive loss | (1,281) | (1,268) |
| Retained earnings | 25,503 | 23,820 |
| Less cost of treasury stock - 825 million common shares in 2022 and 747 million common shares in 2021 | (38,618) | (31,259) |
| Total Bristol-Myers Squibb Company Shareholders' Equity | 31,061 | 35,946 |
| Noncontrolling interest | 57 | 60 |
| Total Equity | 31,118 | 36,006 |
| Total Liabilities and Equity | $96,820 | $109,314 |

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

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Bristol Myers Squibb

# CONSOLIDATED STATEMENTS OF CASH FLOWS

Dollars in Millions

|  | Year Ended December 31, |  |  |
| --- | --- | --- | --- |
|  | 2022 | 2021 | 2020 |
| Cash Flows From Operating Activities: |  |  |  |
| Net earnings/(loss) | $6,345 | $7,014 | $(8,995) |
| Adjustments to reconcile net earnings/(loss) to net cash provided by operating activities: |  |  |  |
| Depreciation and amortization, net | 10,276 | 10,686 | 10,380 |
| Deferred income taxes | (2,738) | (1,393) | 983 |
| Stock-based compensation | 457 | 583 | 779 |
| Impairment charges | 179 | 1,207 | 1,203 |
| Divestiture gains and royalties | (1,063) | (684) | (699) |
| Acquired IPRD | 815 | 1,159 | 12,533 |
| Equity investment losses/(gains), net | 801 | (745) | (1,228) |
| Contingent consideration fair value adjustments | (9) | (542) | (1,757) |
| Other adjustments | 232 | 183 | (134) |
| Changes in operating assets and liabilities: |  |  |  |
| Receivables | (663) | (1,054) | (646) |
| Inventories | (69) | 13 | 2,672 |
| Accounts payable | 109 | 245 | 188 |
| Rebates and discounts | 427 | 863 | 1,189 |
| Income taxes payable | (1,423) | (1,063) | (2,305) |
| Other | (610) | (265) | (111) |
| Net Cash Provided by Operating Activities | 13,066 | 16,207 | 14,052 |
| Cash Flows From Investing Activities: |  |  |  |
| Sale and maturities of marketable debt securities | 6,411 | 4,196 | 6,280 |
| Purchase of marketable debt securities | (3,592) | (5,478) | (4,172) |
| Proceeds from sales of equity investment securities | 218 | 2,579 | 129 |
| Capital expenditures | (1,118) | (973) | (753) |
| Divestiture and other proceeds | 1,305 | 748 | 741 |
| Acquisition and other payments, net of cash acquired | (4,286) | (1,610) | (13,084) |
| Net Cash Used in Investing Activities | (1,062) | (538) | (10,859) |
| Cash Flows From Financing Activities: |  |  |  |
| Short-term debt obligations, net | 194 | (160) | (267) |
| Issuance of long-term debt | 5,926 | - | 6,945 |
| Repayment of long-term debt | (11,431) | (6,022) | (2,750) |
| Repurchase of common stock | (8,001) | (6,287) | (1,546) |
| Dividends | (4,634) | (4,396) | (4,075) |
| Stock option proceeds and other, net | 984 | 641 | 542 |
| Net Cash Used in Financing Activities | (16,962) | (16,224) | (1,151) |
| Effect of Exchange Rates on Cash, Cash Equivalents and Restricted Cash | (33) | (102) | 111 |
| (Decrease)/Increase in Cash, Cash Equivalents and Restricted Cash | (4,991) | (657) | 2,153 |
| Cash, Cash Equivalents and Restricted Cash at Beginning of Year | 14,316 | 14,973 | 12,820 |
| Cash, Cash Equivalents and Restricted Cash at End of Year | $9,325 | $14,316 | $14,973 |

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

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## Note 1. ACCOUNTING POLICIES AND RECENTLY ISSUED ACCOUNTING STANDARDS

### Nature of Operations and Basis of Consolidation

Bristol-Myers Squibb Company (“BMS”, or “the Company”) is a global biopharmaceutical company whose mission is to discover, develop and deliver innovative medicines that help patients prevail over serious diseases.

The consolidated financial statements are prepared in conformity with U.S. GAAP, including the accounts of Bristol-Myers Squibb Company and all of its controlled majority-owned subsidiaries and certain variable interest entities. All intercompany balances and transactions are eliminated. Material subsequent events are evaluated and disclosed through the report issuance date. Refer to the Summary of Abbreviated Terms at the end of this 2022 Annual Report on Form 10-K for definitions of capitalized terms used throughout the document.

Alliance and license arrangements are assessed to determine whether the terms provide economic or other control over the entity requiring consolidation of an entity. Entities controlled by means other than a majority voting interest are referred to as variable interest entities and are consolidated when BMS has both the power to direct the activities of the variable interest entity that most significantly impacts its economic performance and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the entity.

### 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

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.

### Reclassifications

Certain reclassifications were made to conform the prior period consolidated financial statements to the current period presentation. Upfront and contingent milestone charges in connection with asset acquisitions or licensing of third-party intellectual property rights previously presented in Research and development are now presented in Acquired IPRD in the consolidated statements of earnings.

### Cash and Cash Equivalents

Cash and cash equivalents include bank deposits, time deposits, commercial paper and money market funds. Cash equivalents consist of highly liquid investments with original maturities of three months or less at the time of purchase and are recognized at cost, which approximates fair value.

### Marketable Debt Securities

Marketable debt securities are classified as “available-for-sale” on the date of purchase and reported at fair value. Fair value is determined based on observable market quotes or valuation models using assessments of counterparty credit worthiness, credit default risk or underlying security and overall capital market liquidity. Marketable debt securities are reviewed for impairment by assessing if the decline in market value of the investment below the carrying value is other than temporary, which considers the intent and ability to retain the investment for a period of time sufficient to allow for any anticipated recovery in market value, the duration and extent that the market value has been less than cost and the investee’s financial condition.

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Bristol Myers Squibb

## Equity Investments

Equity investments with readily determinable fair values are recorded at fair value with changes in fair value recorded in Other (income)/expense, net. Equity investments without readily determinable fair values are recorded at cost minus any impairment, plus or minus changes in their estimated fair value resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. Changes in the estimated fair value of equity investments without readily determinable fair values are recorded in Other (income)/expense, net.

BMS holds investments in limited partnerships, which primarily invest in early-stage life sciences companies. Such limited partnership investments are measured by using our proportionate share of the net asset values of the underlying investments held by the limited partnerships as a practical expedient. These investments are typically redeemable only through distributions upon liquidation of the underlying assets. Investments in 50% or less owned companies, as well as limited partnerships, are accounted for using the equity method of accounting when the ability to exercise significant influence over the operating and financial decisions of the investee is maintained. The proportional share of the investee's net income or losses of equity investments accounted for using the equity method are included in Other (income)/expense, net.

Equity investments without readily determinable fair values and equity investments accounted for using the equity method are assessed for potential impairment on a quarterly basis based on qualitative factors.

## Inventory Valuation

Inventories are stated at the lower of average cost or net realizable value.

## Property, Plant and Equipment and Depreciation

Expenditures for additions, renewals and improvements are capitalized at cost. Depreciation is computed on a straight-line method based on the estimated useful lives of the related assets ranging from 20 to 50 years for buildings and 3 to 20 years for machinery, equipment and fixtures.

Current facts or circumstances are periodically evaluated to determine if the carrying value of depreciable assets to be held and used may not be recoverable. If such circumstances exist, an estimate of undiscounted future cash flows generated by the long-lived asset, or appropriate grouping of assets, is compared to the carrying value to determine whether an impairment exists at its lowest level of identifiable cash flows. If an asset is determined to be impaired, the loss is measured based on the difference between the asset's fair value and its carrying value. An estimate of the asset's fair value is based on quoted market prices in active markets, if available. If quoted market prices are not available, the estimate of fair value is based on various valuation techniques using unobservable fair value inputs, such as a discounted value of estimated future cash flows.

## Capitalized Software

Eligible costs to obtain internal use software are capitalized and amortized over the estimated useful life of the software ranging from three to ten years.

## Acquisitions

Businesses acquired are consolidated upon obtaining control. The fair value of assets acquired and liabilities assumed are recognized at the date of acquisition. Any excess of the purchase price over the estimated fair values of the net assets acquired is recognized as goodwill. Business acquisition costs are expensed when incurred. Contingent consideration from potential development, regulatory, approval and sales-based milestones and sales-based royalties are included in the purchase price for business combinations and excluded for asset acquisitions.

If the assets acquired do not meet the definition of a business, primarily because no significant processes were acquired or substantially all of the relative fair value was allocated to a single asset, the transaction is accounted for as an asset acquisition rather than a business combination and no goodwill is recorded. In addition, in an asset acquisition, acquired in-process research and development ('IPRD') assets with no alternative future use are charged to Acquired IPRD.

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## Goodwill, IPRD and Other Intangible Assets

The fair value of acquired intangible assets is determined using an income-based approach referred to as the excess earnings method utilizing Level 3 fair value inputs. Market participant valuations assume a global view considering all potential jurisdictions and indications based on discounted after-tax cash flow projections, risk adjusted for estimated probability of technical and regulatory success.

Finite-lived intangible assets, including licenses, marketed product rights and IPRD projects that reach commercialization are amortized on a straight-line basis over their estimated useful life. Estimated useful lives are determined considering the period assets are expected to contribute to future cash flows. Finite-lived intangible assets are tested for impairment when facts or circumstances suggest that the carrying value of the asset may not be recoverable. If the carrying value exceeds the projected undiscounted pretax cash flows of the intangible asset, an impairment loss equal to the excess of the carrying value over the estimated fair value (discounted after-tax cash flows) is recognized.

Goodwill is tested at least annually for impairment by assessing qualitative factors in determining whether it is more likely than not that the fair value of net assets is below their carrying amounts. Examples of qualitative factors assessed include BMS’s share price, financial performance compared to budgets, long-term financial plans, macroeconomic, industry and market conditions as well as the substantial excess of fair value over the carrying value of net assets from the annual impairment test performed in a prior year. Each relevant factor is assessed both individually and in the aggregate.

IPRD is tested for impairment at least annually or more frequently if events occur or circumstances change that would indicate a potential reduction in the fair values of the assets below their carrying value. Impairment charges are recognized to the extent the carrying value of IPRD is determined to exceed its fair value.

## Derivatives

All derivative instruments are recognized as either assets or liabilities at fair value on the consolidated balance sheets and are classified as current or long-term based on the scheduled maturity of the instrument. Derivatives designated as hedges, are assessed at inception and quarterly thereafter, to determine whether they are highly effective in offsetting changes or cash flows of the hedged item. The changes in fair value of a derivative designated as a fair value hedge and of the hedged item attributable to the hedged risk are recognized in earnings immediately. The effective portions of changes in the fair value of a derivative designated as a cash flow hedge are reported in Accumulated other comprehensive loss and are subsequently recognized in earnings consistent with the underlying hedged item. If a derivative is no longer highly effective as a hedge, the Company discontinues hedge accounting prospectively. The earnings impact related to discontinued cash flow hedges and hedge ineffectiveness was not material during all periods presented. If a hedged forecasted transaction becomes probable of not occurring, any gains or losses are reclassified from Accumulated other comprehensive loss to earnings. Derivatives that are not designated as hedges are adjusted to fair value through current earnings. The Company also uses derivative instruments or foreign currency denominated debt to hedge its net investments in certain foreign subsidiaries and affiliates. Realized and unrealized gains and losses from these hedges are included in foreign currency translation in Accumulated other comprehensive loss. 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.

## Restructuring

Restructuring charges are recognized as a result of actions to streamline operations, realize synergies from acquisitions and reduce the number of facilities. Estimating the impact of restructuring plans, including future termination benefits, integration expenses and other exit costs, requires judgment. Actual results could vary from these estimates. Restructuring charges are recognized upon meeting certain criteria, including finalization of committed plans, reliable estimates and discussions with local works councils in certain markets.

## Contingencies

Loss contingencies from legal proceedings and claims may occur from government investigations, shareholder lawsuits, product and environmental liability, contractual claims, tax and other matters. Accruals are recognized when it is probable that a liability will be incurred and the amount of loss can be reasonably estimated. Gain contingencies (including contingent proceeds related to the divestitures) are not recognized until realized. Legal fees are expensed as incurred.

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## Revenue Recognition

Refer to “-Note 2. Revenue” for a detailed discussion of accounting policies related to revenue recognition, including deferred revenue and royalties. Refer to “-Note 3. Alliances” for further details regarding alliances.

## Research and Development and Acquired IPRD

Research and development costs are expensed as incurred. Clinical study and certain research costs are recognized over the service periods specified in the contracts and adjusted as necessary based upon an ongoing review of the level of effort and costs actually incurred. Research and development costs are presented net of reimbursements from alliance partners.

Nonrefundable advance payments for services to be received in the future for use in research and development activities are recorded as prepaid assets and expensed in the period when the services are performed.

Acquired IPRD expenses include upfront payments, contingent milestone payments in connection with asset acquisitions or in-license arrangements of third-party intellectual property rights, as well as any upfront and contingent milestones payable by BMS to alliance partners prior to regulatory approval.

The Company's Acquired IPRD by type of transaction was as follows:

| Type of transaction Dollars in Millions | Year ended December 31, |  |  |
| --- | --- | --- | --- |
|  | 2022 | 2021 | 2020 |
| Alliance (Note 3) | $100 | $730 | $258 |
| In-license arrangements and other (Note 4) | 715 | 429 | 659 |
| Asset acquisitions (Note 4) | - | - | 11,616 |
| Acquired IPRD | $815 | $1,159 | $12,533 |

## Advertising and Product Promotion Costs

Advertising and product promotion costs are expensed as incurred. Advertising and product promotion costs are included in Marketing, selling and administrative expenses and were $1.3 billion in 2022 and 2021 and $990 million in 2020.

## Foreign Currency Translation

Foreign subsidiary earnings are translated into U.S. dollars using average exchange rates. The net assets of foreign subsidiaries are translated into U.S. dollars using current exchange rates. The U.S. dollar effects that arise from translating the net assets of these subsidiaries at changing rates are recognized in Other Comprehensive Income/(Loss).

## Income Taxes

The provision for income taxes includes income taxes paid or payable for the current year plus the change in deferred taxes during the year. Deferred taxes result from differences between the financial and tax basis of assets and liabilities and are adjusted for changes in tax rates and tax laws when changes are enacted. Valuation allowances are recognized to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized. The assessment of whether or not a valuation allowance is required often requires significant judgment including the long-range forecast of future taxable income and the evaluation of tax planning initiatives. Adjustments to the deferred tax valuation allowances are made to earnings in the period when such assessments are made. The tax effects of global intangible low-taxed income from certain foreign subsidiaries is recognized in the income tax provision in the period the tax arises.

Tax benefits are recognized from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. The tax benefit recognized in the financial statements for a particular tax position is based on the largest benefit that is more likely than not to be realized upon settlement.

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2022 Annual Report

## Recently Issued Accounting Standards Not Yet Adopted

### Business Combinations

In October 2021, the FASB issued amended guidance on accounting for contract assets and contract liabilities from contracts with customers in a business combination. The guidance is intended to address inconsistency related to recognition of an acquired contract liability and payment terms and their effect on subsequent revenue recognized. At the acquisition date, an entity should account for the related revenue contracts in accordance with existing revenue recognition guidance generally by assessing how the acquiree applied recognition and measurement in their financial statements. The amended guidance is effective January 1, 2023 on a prospective approach.

### Fair Value Measurements

In June 2022, the FASB issued amended guidance on measuring the fair value of an equity security subject to contractual restrictions that prohibit the sale of an equity security. The guidance clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. The guidance also clarifies that an entity cannot, as a separate unit of account, recognize and measure a contractual sale restriction. The amendment requires the following disclosures for equity securities subject to contractual sale restrictions: the fair value of equity securities subject to contractual sale restrictions reflected in the balance sheet; the nature and remaining duration of the restriction(s); and the circumstances that could cause a lapse in the restriction(s). The amended guidance is effective January 1, 2024 on a prospective basis. Early adoption is permitted.

## Note 2. REVENUE

The following table summarizes the disaggregation of revenue by nature:

| Dollars in Millions | Year Ended December 31, |  |  |
| --- | --- | --- | --- |
|  | 2022 | 2021 | 2020 |
| Net product sales | $44,671 | $45,055 | $41,321 |
| Alliance revenues | 742 | 716 | 615 |
| Other revenues | 746 | 614 | 582 |
| Total Revenues | $46,159 | $46,385 | $42,518 |

Net product sales represent more than 95% of total revenues for all periods presented. 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.

Gross revenue to the three largest pharmaceutical wholesalers in the U.S. as a percentage of U.S. gross revenues was as follows:

|  | Year Ended December 31, |  |  |
| --- | --- | --- | --- |
|  | 2022 | 2021 | 2020 |
| McKesson Corporation | 32% | 32% | 31% |
| AmerisourceBergen Corporation | 25% | 25% | 25% |
| Cardinal Health, Inc. | 21% | 20% | 19% |

Wholesalers are initially invoiced at contractual list prices. Payment terms are typically 30 to 90 days based on customary practices in each country. Revenue is reduced from wholesaler list price at the time of recognition for expected charge-backs, discounts, rebates, sales allowances and product returns ('GTN adjustments'). These GTN adjustments are attributed to various commercial arrangements, managed healthcare organizations and government programs such as Medicare, Medicaid and the 340B program containing various pricing implications, such as mandatory discounts, pricing protection below wholesaler list price or other discounts when Medicare Part D beneficiaries are in the coverage gap. In addition, non-U.S. government programs include different pricing schemes such as cost caps, volume discounts, outcome-based pricing and pricing claw-backs determined on sales of individual companies or an aggregation of companies participating in a specific market. Charge-backs and cash discounts are reflected as a reduction to receivables and settled through the issuance of credits to the customer, typically within one month. All other rebates, discounts and adjustments, including Medicaid and Medicare, are reflected as a liability and settled through cash payments to the customer, typically within various time periods ranging from a few months to one year.

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Significant judgment is required in estimating GTN adjustments considering legal interpretations of applicable laws and regulations, historical experience, payer channel mix, current contract prices under applicable programs, unbilled claims, processing time lags and inventory levels in the distribution channel.

The following table summarizes GTN adjustments:

| Dollars in Millions | Year Ended December 31, |  |  |
| --- | --- | --- | --- |
|  | 2022 | 2021 | 2020 |
| Gross product sales | $69,633 | $67,897 | $60,016 |
| GTN adjustments (a) |  |  |  |
| Charge-backs and cash discounts | (7,469) | (7,253) | (5,827) |
| Medicaid and Medicare rebates | (11,362) | (9,374) | (7,595) |
| Other rebates, returns, discounts and adjustments | (6,131) | (6,215) | (5,273) |
| Total GTN adjustments | (24,962) | (22,842) | (18,695) |
| Net product sales | $44,671 | $45,055 | $41,321 |

(a) Includes adjustments for provisions for product sales made in prior periods resulting from changes in estimates of $229 million in 2022, $319 million in 2021 and $106 million in 2020.

Alliance and other revenues consist primarily of amounts related to collaborations and out-licensing arrangements. Each of these arrangements are evaluated for whether they represent contracts that are within the scope of the revenue recognition guidance in their entirety or contain aspects that are within the scope of the guidance, either directly or by reference based upon the application of the guidance related to the derecognition of nonfinancial assets (ASC 610).

Performance obligations are identified and separated when the other party can benefit directly from the rights, goods or services either on their own or together with other readily available resources and when the rights, goods or services are not highly interdependent or interrelated.

Transaction prices for these arrangements may include fixed upfront amounts as well as variable consideration such as contingent development and regulatory milestones, sales-based milestones and royalties. The most likely amount method is used to estimate contingent development, regulatory and sales-based milestones because the ultimate outcomes are binary in nature. The expected value method is used to estimate royalties because a broad range of potential outcomes exist, except for instances in which such royalties relate to a license. Variable consideration is included in the transaction price only to the extent a significant reversal in the amount of cumulative revenue recognized is not probable of occurring when the uncertainty associated with the variable consideration is subsequently resolved. Significant judgment is required in estimating the amount of variable consideration to recognize when assessing factors outside of BMS’s influence such as likelihood of regulatory success, limited availability of third party information, expected duration of time until resolution, lack of relevant past experience, historical practice of offering fee concessions and a large number and broad range of possible amounts. To the extent arrangements include multiple performance obligations that are separable, the transaction price assigned to each distinct performance obligation is reflective of the relative stand-alone selling price and recognized at a point in time upon the transfer of control.

Three types of out-licensing arrangements are typically utilized: (i) arrangements when BMS out-licenses intellectual property to another party and has no further performance obligations; (ii) arrangements that include a license and an additional performance obligation to supply product upon the request of the third party; and (iii) collaboration arrangements, which include transferring a license to a third party to jointly develop and commercialize a product.

Most out-licensing arrangements consist of a single performance obligation that is satisfied upon execution of the agreement when the development and commercialization rights are transferred to a third party. Upfront fees are recognized immediately and included in Other (income)/expense, net. Although contingent development and regulatory milestone amounts are assessed each period for the likelihood of achievement, they are typically constrained and recognized when the uncertainty is subsequently resolved for the full amount of the milestone and included in Other (income)/expense, net. Sales-based milestones and royalties are recognized when the milestone is achieved or the subsequent sales occur. Sales-based milestones and royalties are included in Alliance and other revenues.

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2022 Annual Report

Certain out-licensing arrangements may also include contingent performance obligations to supply commercial product to the third party upon its request. The license and supply obligations are accounted for as separate performance obligations as they are considered distinct because the third party can benefit from the license either on its own or together with other supply resources readily available to it and the obligations are separately identifiable from other obligations in the contract in accordance with the revenue recognition guidance. After considering the standalone selling prices in these situations, upfront fees, contingent development and regulatory milestone amounts and sales-based milestone and royalties are allocated to the license and recognized in the manner described above. Consideration for the supply obligation is usually based upon stipulated cost-plus margin contractual terms which represent a standalone selling price. The supply consideration is recognized at a point in time upon transfer of control of the product to the third party and included in Alliance and other revenues. The above fee allocation between the license and the supply represents the amount of consideration expected to be entitled to for the satisfaction of the separate performance obligations.

Although collaboration arrangements are unique in nature, both parties are active participants in the operating activities and are exposed to significant risks and rewards depending on the commercial success of the activities. Performance obligations inherent in these arrangements may include the transfer of certain development or commercialization rights, ongoing development and commercialization services and product supply obligations. Except for certain product supply obligations which are considered distinct and accounted for as separate performance obligations similar to the manner discussed above, all other performance obligations are not considered distinct and are combined into a single performance obligation since the transferred rights are highly integrated and interrelated to the obligation to jointly develop and commercialize the product with the third party. As a result, upfront fees are recognized ratably over time throughout the expected period of the collaboration activities and included in Other (income)/expense, net as the license is combined with other development and commercialization obligations. Contingent development and regulatory milestones that are no longer constrained are recognized in a similar manner on a prospective basis. Royalties and profit sharing are recognized when the underlying sales and profits occur and are included in Alliance and other revenues. Refer to “-Note 3. Alliances” for further information.

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

| Dollars in Millions | Year Ended December 31, |  |  |
| --- | --- | --- | --- |
|  | 2022 | 2021 | 2020 |
| In-Line Products |  |  |  |
| Eliquis | $11,789 | $10,762 | $9,168 |
| Opdivo | 8,249 | 7,523 | 6,992 |
| Pomalyst/Imnovid | 3,497 | 3,332 | 3,070 |
| Orencia | 3,464 | 3,306 | 3,157 |
| Sprycel | 2,165 | 2,117 | 2,140 |
| Yervoy | 2,131 | 2,026 | 1,682 |
| Empliciti | 296 | 334 | 381 |
| Mature and other brands | 1,749 | 1,900 | 2,217 |
| New Product Portfolio |  |  |  |
| Reblozyl | 717 | 551 | 274 |
| Abecma | 388 | 164 | - |
| Opdualag | 252 | - | - |
| Zeposia | 250 | 134 | 12 |
| Breyanzi | 182 | 87 | - |
| Onureg | 124 | 73 | 17 |
| Inrebic | 85 | 74 | 55 |
| Camzyos | 24 | - | - |
| Sotyktu | 8 | - | - |
| Recent LOE Products (a) |  |  |  |
| Revlimid | 9,978 | 12,821 | 12,106 |
| Abraxane | 811 | 1,181 | 1,247 |
| Total Revenues | $46,159 | $46,385 | $42,518 |
| United States | $31,828 | $29,214 | $26,577 |
| International | 13,497 | 16,319 | 15,310 |
| Other (b) | 834 | 852 | 631 |
| Total Revenues | $46,159 | $46,385 | $42,518 |

(a) Recent LOE Products include products with significant decline in revenue from the prior reporting period as a result of a loss of exclusivity.

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

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Bristol Myers Squibb

Contract assets are primarily estimated future royalties and termination fees not eligible for the licensing exclusion and therefore recognized under ASC 606 and ASC 610. Contract assets are reduced and receivables are increased in the period the underlying sales occur. Cumulative catch-up adjustments to revenue affecting contract assets or contract liabilities were not material during the years ended December 31, 2022, 2021 and 2020. Revenue recognized from performance obligations satisfied in prior periods was $556 million in 2022, $561 million in 2021 and $338 million in 2020 consisting primarily of revised estimates for GTN adjustments related to prior period sales and royalties from out-licensing arrangements.

Sales commissions and other incremental costs of obtaining customer contracts are expensed as incurred as the amortization periods would be less than one year.

### Note 3. ALLIANCES

BMS enters into collaboration arrangements with third parties for the development and commercialization of certain products. Although each of these arrangements is unique in nature, both parties are active participants in the operating activities of the collaboration and exposed to significant risks and rewards depending on the commercial success of the activities. BMS may either in-license intellectual property owned by the other party or out-license its intellectual property to the other party. These arrangements also typically include research, development, manufacturing, and/or commercial activities and can cover a single investigational compound or commercial product or multiple compounds and/or products in various life cycle stages. The rights and obligations of the parties can be global or limited to geographic regions. BMS refers to these collaborations as alliances and its partners as alliance partners.

The most common activities between BMS and its alliance partners are presented in results of operations as follows:

- • When BMS is the principal in the end customer sale, 100% of product sales are included in Net product sales. When BMS's alliance partner is the principal in the end customer sale, BMS's contractual share of the third-party sales and/or royalty income are included in Alliance revenues as the sale of commercial products are considered part of BMS's ongoing major or central operations. Refer to '-Note 2. Revenue' for information regarding recognition criteria.
- • Amounts payable to BMS by alliance partners (who are the principal in the end customer sale) for supply of commercial products are included in Alliance revenues as the sale of commercial products are considered part of BMS's ongoing major or central operations.
- • Profit sharing, royalties and other sales-based fees payable by BMS to alliance partners are included in Cost of products sold as incurred.
- • Cost reimbursements between the parties are recognized as incurred and included in Cost of products sold; Marketing, selling and administrative expenses; or Research and development expenses, based on the underlying nature of the related activities subject to reimbursement.
- • Upfront and contingent development and regulatory approval milestones payable to BMS by alliance partners for investigational compounds and commercial products are deferred and amortized over the expected period of BMS's development and co-promotion obligation through the market exclusivity period or the periods in which the related compounds or products are expected to contribute to future cash flows. The amortization is presented consistent with the nature of the payment under the arrangement. For example, amounts received for investigational compounds are presented in Other (income)/expense, net as the activities being performed at that time are not related to the sale of commercial products included in BMS's ongoing major or central operations; amounts received for commercial products are presented in alliance revenue as the sale of commercial products are considered part of BMS's ongoing major or central operations.
- • Upfront and contingent regulatory approval milestones payable by BMS to alliance partners for commercial products are capitalized and amortized over the shorter of the contractual term or the periods in which the related products are expected to contribute to future cash flows.
- • Upfront and contingent milestones payable by BMS to alliance partners prior to regulatory approval are expensed as incurred and included in Acquired IPRD expense.
- • Royalties and other contingent consideration payable to BMS by alliance partners related to the divestiture of such businesses are included in Other (income)/expense, net when earned.
- • All payments between BMS and its alliance partners are presented in Cash Flows From Operating Activities except for upfront and milestone payments which are presented in Cash Flows From Investing Activities.

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