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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________
FORM 10-Q
___________________________
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2024
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______ to _______
Commission File Number 001-01136
___________________________
BRISTOL-MYERS SQUIBB COMPANY
(Exact name of registrant as specified in its charter)
___________________________
| | | | | | | | |
Delaware | | 22-0790350 |
(State or other jurisdiction of incorporation or organization) | | (I.R.S Employer Identification No.) |
Route 206 & Province Line Road, Princeton, New Jersey 08543
(Address of principal executive offices) (Zip Code)
(609) 252-4621
(Registrant’s telephone number, including area code)
___________________________
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
| | | | | | | | |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Common Stock, $0.10 Par Value | BMY | New York Stock Exchange |
1.000% Notes due 2025 | BMY25 | New York Stock Exchange |
1.750% Notes due 2035 | BMY35 | New York Stock Exchange |
Celgene Contingent Value Rights | CELG RT | New York Stock Exchange |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to the filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Large accelerated filer ☒ | | Accelerated filer ☐ | | Non-accelerated filer ☐ | | Smaller reporting company ☐ | | Emerging growth company ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
APPLICABLE ONLY TO CORPORATE ISSUERS:
At October 24, 2024, there were 2,028,176,674 shares outstanding of the Registrant’s $0.10 par value common stock.
BRISTOL-MYERS SQUIBB COMPANY
INDEX TO FORM 10-Q
September 30, 2024
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PART I—FINANCIAL INFORMATION | |
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Item 1. | |
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Item 2. | |
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Item 3. | |
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Item 4. | |
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PART II—OTHER INFORMATION | |
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Item 1. | |
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Item 1A. | |
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Item 2. | |
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Item 5. | |
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Item 6. | |
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* Indicates brand names of products which are trademarks not owned by BMS. Specific trademark ownership information is included in the Exhibit Index at the end of this Quarterly Report on Form 10-Q.
PART I—FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
BRISTOL-MYERS SQUIBB COMPANY
CONSOLIDATED STATEMENTS OF EARNINGS
Dollars in millions, except per share data
(UNAUDITED)
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended September 30, | | Nine Months Ended September 30, |
EARNINGS | 2024 | | 2023 | | 2024 | | 2023 |
Net product sales | $ | 11,483 | | | $ | 10,645 | | | $ | 34,967 | | | $ | 32,610 | |
Alliance and other revenues | 409 | | | 321 | | | 991 | | | 919 | |
Total Revenues | 11,892 | | | 10,966 | | | 35,958 | | | 33,529 | |
| | | | | | | |
Cost of products sold(a) | 2,957 | | | 2,506 | | | 9,156 | | | 7,948 | |
Marketing, selling and administrative | 1,983 | | | 2,003 | | | 6,278 | | | 5,699 | |
Research and development | 2,374 | | | 2,242 | | | 7,968 | | | 6,821 | |
Acquired IPRD | 262 | | | 80 | | | 13,343 | | | 313 | |
Amortization of acquired intangible assets | 2,406 | | | 2,256 | | | 7,179 | | | 6,769 | |
Other (income)/expense, net | 234 | | | (258) | | | 588 | | | (787) | |
Total Expenses | 10,216 | | | 8,829 | | | 44,512 | | | 26,763 | |
| | | | | | | |
Earnings/(loss) before income taxes | 1,676 | | | 2,137 | | | (8,554) | | | 6,766 | |
Income tax provision | 461 | | | 203 | | | 455 | | | 488 | |
Net earnings/(loss) | 1,215 | | | 1,934 | | | (9,009) | | | 6,278 | |
Noncontrolling interest | 4 | | | 6 | | | 11 | | | 15 | |
Net earnings/(loss) attributable to BMS | $ | 1,211 | | | $ | 1,928 | | | $ | (9,020) | | | $ | 6,263 | |
| | | | | | | |
Earnings/(Loss) per common share: | | | | | | | |
Basic | $ | 0.60 | | | $ | 0.94 | | | $ | (4.45) | | | $ | 3.01 | |
Diluted | 0.60 | | | 0.93 | | | (4.45) | | | 2.99 | |
(a) Excludes amortization of acquired intangible assets.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS)
Dollars in millions
(UNAUDITED)
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended September 30, | | Nine Months Ended September 30, |
COMPREHENSIVE INCOME/(LOSS) | 2024 | | 2023 | | 2024 | | 2023 |
Net earnings/(loss) | $ | 1,215 | | | $ | 1,934 | | | $ | (9,009) | | | $ | 6,278 | |
Other comprehensive income/(loss), net of taxes and reclassifications to earnings: |
Derivatives qualifying as cash flow hedges | (178) | | | 114 | | | 67 | | | (7) | |
Pension and postretirement benefits | 100 | | | 2 | | | 49 | | | (9) | |
Marketable debt securities | 5 | | | (2) | | | 3 | | | (2) | |
Foreign currency translation | 61 | | | (13) | | | (41) | | | 13 | |
Total Other Comprehensive Income/(Loss) | (12) | | | 101 | | | 78 | | | (5) | |
| | | | | | | |
Comprehensive income/(loss) | 1,203 | | | 2,035 | | | (8,931) | | | 6,273 | |
Comprehensive income attributable to noncontrolling interest | 4 | | | 6 | | | 11 | | | 15 | |
Comprehensive income/(loss) attributable to BMS | $ | 1,199 | | | $ | 2,029 | | | $ | (8,942) | | | $ | 6,258 | |
The accompanying notes are an integral part of these consolidated financial statements.
BRISTOL-MYERS SQUIBB COMPANY
CONSOLIDATED BALANCE SHEETS
Dollars in millions
(UNAUDITED)
| | | | | | | | | | | |
ASSETS | September 30, 2024 | | December 31, 2023 |
Current assets: | | | |
Cash and cash equivalents | $ | 7,890 | | | $ | 11,464 | |
Marketable debt securities | 204 | | | 816 | |
Receivables | 11,026 | | | 10,921 | |
Inventories | 3,332 | | | 2,662 | |
Other current assets | 5,623 | | | 5,907 | |
Total Current assets | 28,075 | | | 31,770 | |
Property, plant and equipment | 6,903 | | | 6,646 | |
Goodwill | 21,751 | | | 21,169 | |
Other intangible assets | 26,964 | | | 27,072 | |
Deferred income taxes | 3,609 | | | 2,768 | |
Marketable debt securities | 324 | | | 364 | |
Other non-current assets | 6,044 | | | 5,370 | |
Total Assets | $ | 93,670 | | | $ | 95,159 | |
| | | |
LIABILITIES | | | |
Current liabilities: | | | |
Short-term debt obligations | $ | 1,078 | | | $ | 3,119 | |
Accounts payable | 3,469 | | | 3,259 | |
Other current liabilities | 18,091 | | | 15,884 | |
Total Current liabilities | 22,638 | | | 22,262 | |
Deferred income taxes | 430 | | | 338 | |
Long-term debt | 48,674 | | | 36,653 | |
Other non-current liabilities | 4,728 | | | 6,421 | |
Total Liabilities | 76,470 | | | 65,674 | |
| | | |
Commitments and Contingencies | | | |
| | | |
EQUITY | | | |
BMS Shareholders’ equity: | | | |
Preferred stock | — | | | — | |
Common stock | 292 | | | 292 | |
Capital in excess of par value of stock | 45,896 | | | 45,684 | |
Accumulated other comprehensive loss | (1,468) | | | (1,546) | |
Retained earnings | 16,097 | | | 28,766 | |
Less cost of treasury stock | (43,675) | | | (43,766) | |
Total BMS Shareholders’ Equity | 17,142 | | | 29,430 | |
Noncontrolling interest | 58 | | | 55 | |
Total Equity | 17,200 | | | 29,485 | |
Total Liabilities and Equity | $ | 93,670 | | | $ | 95,159 | |
The accompanying notes are an integral part of these consolidated financial statements.
BRISTOL-MYERS SQUIBB COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
Dollars in millions
(UNAUDITED)
| | | | | | | | | | | |
| Nine Months Ended September 30, |
| 2024 | | 2023 |
Cash Flows From Operating Activities: | | | |
Net (loss)/earnings | $ | (9,009) | | | $ | 6,278 | |
Adjustments to reconcile net earnings to net cash provided by operating activities: | | | |
Depreciation and amortization, net | 7,720 | | | 7,296 | |
Deferred income taxes | (1,298) | | | (1,961) | |
Stock-based compensation | 387 | | | 391 | |
Impairment charges | 1,010 | | | 226 | |
Divestiture gains and royalties | (838) | | | (639) | |
Acquired IPRD | 13,343 | | | 313 | |
Equity investment (gains)/losses | (221) | | | 213 | |
Other adjustments | 123 | | | 260 | |
Changes in operating assets and liabilities: | | | |
Receivables | 121 | | | (487) | |
Inventories | (661) | | | (554) | |
Accounts payable | (333) | | | (246) | |
Rebates and discounts | 1,889 | | | 1,115 | |
Income taxes payable | (1,381) | | | (1,647) | |
Other | (101) | | | (950) | |
Net cash provided by operating activities | 10,751 | | | 9,608 | |
Cash Flows From Investing Activities: | | | |
Sale and maturities of marketable debt securities | 1,060 | | | 692 | |
Purchase of marketable debt securities | (398) | | | (1,057) | |
Proceeds from sales of equity investments | 60 | | | 215 | |
Capital expenditures | (870) | | | (879) | |
Divestiture and other proceeds | 766 | | | 668 | |
Acquisition and other payments, net of cash acquired | (21,774) | | | (588) | |
Net cash used in investing activities | (21,156) | | | (949) | |
Cash Flows From Financing Activities: | | | |
Proceeds from issuance of short-term debt obligations | 2,987 | | | — | |
Repayments of short-term debt obligations | (3,000) | | | — | |
Other short-term financing obligations, net | 504 | | | 233 | |
Proceeds from issuance of long-term debt | 12,883 | | | — | |
Repayments of long-term debt | (2,873) | | | (1,879) | |
Repurchase of common stock | — | | | (5,155) | |
Dividends | (3,645) | | | (3,584) | |
Stock option proceeds and other, net | (87) | | | 2 | |
Net cash provided by/(used in) financing activities | 6,769 | | | (10,383) | |
Effect of exchange rates on cash, cash equivalents and restricted cash | 10 | | | (33) | |
Decrease in cash, cash equivalents and restricted cash | (3,626) | | | (1,757) | |
Cash, cash equivalents and restricted cash at beginning of period | 11,519 | | | 9,325 | |
Cash, cash equivalents and restricted cash at end of period | $ | 7,893 | | | $ | 7,568 | |
The accompanying notes are an integral part of these consolidated financial statements.
Note 1. BASIS OF PRESENTATION AND RECENTLY ISSUED ACCOUNTING STANDARDS
Basis of Consolidation
Bristol-Myers Squibb Company ("BMS", "we", "our", "us" or "the Company") prepared these unaudited consolidated financial statements following the requirements of the SEC and U.S. GAAP for interim reporting. Under those rules, certain footnotes and other financial information that are normally required for annual financial statements can be condensed or omitted. The Company is responsible for the consolidated financial statements included in this Quarterly Report on Form 10-Q, which include all adjustments necessary for a fair presentation of the financial position of the Company as of September 30, 2024 and December 31, 2023 and the results of operations for the three and nine months ended September 30, 2024 and 2023, and cash flows for the nine months ended September 30, 2024 and 2023. All intercompany balances and transactions have been eliminated. These consolidated financial statements and the related footnotes should be read in conjunction with the audited consolidated financial statements of the Company for the year ended December 31, 2023 included in the 2023 Form 10-K. Refer to the Summary of Abbreviated Terms at the end of this Quarterly Report on Form 10-Q for terms used throughout the document.
Business Segment Information
BMS operates in a single segment engaged in the discovery, development, licensing, manufacturing, marketing, distribution and sale of innovative medicines that help patients prevail over serious diseases. A global research and development organization and supply chain organization are responsible for the discovery, development, manufacturing and supply of products. Regional commercial organizations market, distribute and sell the products. The business is also supported by global corporate staff functions. Consistent with BMS's operational structure, the Chief Executive Officer ("CEO"), as the chief operating decision maker, manages and allocates resources at the global corporate level. Managing and allocating resources at the global corporate level enables the CEO to assess both the overall level of resources available and how to best deploy these resources across functions, therapeutic areas, regional commercial organizations and research and development projects in line with our overarching long-term corporate-wide strategic goals, rather than on a product or franchise basis. The determination of a single segment is consistent with the financial information regularly reviewed by the CEO for purposes of evaluating performance, allocating resources, setting incentive compensation targets, and planning and forecasting future periods. For further information on product and regional revenue, see "—Note 2. Revenue".
Use of Estimates and Judgments
Revenues, expenses, assets and liabilities can vary during each quarter of the year. Accordingly, the results and trends in these unaudited consolidated financial statements may not be indicative of full year operating results. The preparation of financial statements requires the use of management estimates, judgments and assumptions. The most significant assumptions are estimates used in determining accounting for acquisitions; impairments of intangible assets; charge-backs, cash discounts, sales rebates, returns and other adjustments; legal contingencies; and income taxes. Actual results may differ from estimates.
Recently Issued Accounting Standards Not Yet Adopted
Income Taxes
In December 2023, the FASB issued amended guidance on income tax disclosures. The guidance is intended to provide additional disaggregation to the effective income tax rate reconciliation and income tax payment disclosures. The amended guidance is effective for annual periods beginning January 1, 2025 and should be applied on a prospective basis. Early adoption is permitted.
Segment Reporting
In November 2023, the FASB issued amended guidance for improvements to reportable segment disclosures. The revised guidance requires that a public entity disclose significant segment expenses regularly reviewed by the chief operating decision maker (CODM), including public entities with a single reportable segment. The amended guidance is effective for fiscal years beginning January 1, 2024 and interim periods beginning January 1, 2025 and should be applied on a retrospective basis. Early adoption is permitted.
Note 2. REVENUE
The following table summarizes the disaggregation of revenue by nature:
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended September 30, | | Nine Months Ended September 30, |
Dollars in millions | 2024 | | 2023 | | 2024 | | 2023 |
Net product sales | $ | 11,483 | | | $ | 10,645 | | | $ | 34,967 | | | $ | 32,610 | |
Alliance revenues | 105 | | | 138 | | | 355 | | | 461 | |
Other revenues | 304 | | | 183 | | | 636 | | | 458 | |
Total Revenues | $ | 11,892 | | | $ | 10,966 | | | $ | 35,958 | | | $ | 33,529 | |
The following table summarizes GTN adjustments:
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended September 30, | | Nine Months Ended September 30, |
Dollars in millions | 2024 | | 2023 | | 2024 | | 2023 |
Gross product sales | $ | 21,223 | | | $ | 18,648 | | | $ | 61,298 | | | $ | 54,047 | |
GTN adjustments(a) | | | | | | | |
Charge-backs and cash discounts | (2,967) | | | (2,373) | | | (8,366) | | | (6,743) | |
Medicaid and Medicare rebates | (4,577) | | | (3,730) | | | (11,525) | | | (9,355) | |
Other rebates, returns, discounts and adjustments | (2,196) | | | (1,900) | | | (6,440) | | | (5,339) | |
Total GTN adjustments(b) | (9,740) | | | (8,003) | | | (26,331) | | | (21,437) | |
Net product sales | $ | 11,483 | | | $ | 10,645 | | | $ | 34,967 | | | $ | 32,610 | |
(a) Includes reductions to GTN adjustments for product sales made in prior periods resulting from changes in estimates of $42 million and $103 million for the three and nine months ended September 30, 2024 and $18 million and $116 million for the three and nine months ended September 30, 2023, respectively.
(b) Includes U.S. GTN adjustments of $8.9 billion and $23.9 billion for the three and nine months ended September 30, 2024 and $7.3 billion and $19.2 billion for the three and nine months ended September 30, 2023, respectively.
The following table summarizes the disaggregation of revenue by product and region:
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended September 30, | | Nine Months Ended September 30, |
Dollars in millions | 2024 | | 2023 | | 2024 | | 2023 |
Growth Portfolio | | | | | | | |
Opdivo | $ | 2,360 | | | $ | 2,275 | | | $ | 6,825 | | | $ | 6,622 | |
Orencia | 936 | | | 925 | | | 2,682 | | | 2,616 | |
Yervoy | 642 | | | 579 | | | 1,855 | | | 1,672 | |
Reblozyl | 447 | | | 248 | | | 1,226 | | | 688 | |
Opdualag | 233 | | | 166 | | | 674 | | | 437 | |
Abecma | 124 | | | 93 | | | 301 | | | 372 | |
Zeposia | 147 | | | 123 | | | 408 | | | 301 | |
Breyanzi | 224 | | | 92 | | | 484 | | | 263 | |
Camzyos | 156 | | | 68 | | | 379 | | | 143 | |
Sotyktu | 66 | | | 66 | | | 163 | | | 107 | |
Augtyro | 10 | | | — | | | 23 | | | — | |
Krazati | 34 | | | — | | | 87 | | | — | |
Other Growth products(a) | 433 | | | 311 | | | 1,093 | | | 886 | |
Total Growth Portfolio | 5,812 | | | 4,946 | | | 16,200 | | | 14,107 | |
Legacy Portfolio | | | | | | | |
Eliquis | 3,002 | | | 2,705 | | | 10,138 | | | 9,332 | |
Revlimid | 1,412 | | | 1,429 | | | 4,434 | | | 4,647 | |
Pomalyst/Imnovid | 898 | | | 872 | | | 2,722 | | | 2,551 | |
Sprycel | 290 | | | 517 | | | 1,088 | | | 1,404 | |
Abraxane | 253 | | | 260 | | | 701 | | | 757 | |
Other Legacy products(b) | 225 | | | 237 | | | 675 | | | 731 | |
Total Legacy Portfolio | 6,080 | | | 6,020 | | | 19,758 | | | 19,422 | |
Total Revenues | $ | 11,892 | | | $ | 10,966 | | | $ | 35,958 | | | $ | 33,529 | |
| | | | | | | |
United States | $ | 8,232 | | | $ | 7,542 | | | $ | 25,509 | | | $ | 23,298 | |
International | 3,389 | | | 3,239 | | | 9,803 | | | 9,716 | |
Other(c) | 271 | | | 185 | | | 646 | | | 515 | |
Total Revenues | $ | 11,892 | | | $ | 10,966 | | | $ | 35,958 | | | $ | 33,529 | |
(a) Includes Onureg, Inrebic, Nulojix, Empliciti and royalty revenues.
(b) Includes other mature brands.
(c) Other revenues include alliance-related revenues for products not sold by BMS's regional commercial organizations.
Beginning in 2024, Puerto Rico revenues are included in International revenues. Prior period amounts have been reclassified to conform to the current presentation.
Revenue recognized from performance obligations satisfied in prior periods was $238 million and $496 million for the three and nine months ended September 30, 2024 and $114 million and $355 million for the three and nine months ended September 30, 2023, respectively, consisting primarily of royalties for out-licensing arrangements and revised estimates for GTN adjustments related to prior period sales.
Note 3. ALLIANCES
BMS enters into collaboration arrangements with third parties for the development and commercialization of certain products. Although each of these arrangements is unique in nature, both parties are active participants in the operating activities of the collaboration and exposed to significant risks and rewards depending on the commercial success of the activities. BMS refers to these collaborations as alliances, and its partners as alliance partners.
Selected financial information pertaining to alliances was as follows, including net product sales when BMS is the principal in the third-party customer sale for products subject to the alliance. Expenses summarized below do not include all amounts attributed to the activities for the products in the alliance, but only the payments between the alliance partners or the related amortization if the payments were deferred or capitalized.
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended September 30, | | Nine Months Ended September 30, |
Dollars in millions | 2024 | | 2023 | | 2024 | | 2023 |
Revenues from alliances | | | | | | | |
Net product sales | $ | 3,091 | | | $ | 2,762 | | | $ | 10,323 | | | $ | 9,614 | |
Alliance revenues | 105 | | | 138 | | | 355 | | | 461 | |
Total alliance revenues | $ | 3,196 | | | $ | 2,900 | | | $ | 10,678 | | | $ | 10,075 | |
| | | | | | | |
To/(from) alliance partners | | | | | | | |
Cost of products sold | $ | 1,496 | | | $ | 1,330 | | | $ | 5,013 | | | $ | 4,650 | |
Marketing, selling and administrative | (76) | | | (52) | | | (220) | | | (190) | |
Research and development | 50 | | | 1 | | | 150 | | | 81 | |
Acquired IPRD | — | | | — | | | 880 | | | 55 | |
Other (income)/expense, net | (12) | | | (10) | | | (126) | | | (37) | |
| | | | | | | | | | | |
Dollars in millions | September 30, 2024 | | December 31, 2023 |
Selected alliance balance sheet information | | | |
Receivables – from alliance partners | $ | 190 | | | $ | 233 | |
Accounts payable – to alliance partners | 1,455 | | | 1,394 | |
Deferred income – from alliances(a) | 236 | | | 274 | |
(a) Includes unamortized upfront and milestone payments.
The nature, purpose, significant rights and obligations of the parties and specific accounting policy elections for each of the Company's significant alliances are discussed in the 2023 Form 10-K. Significant developments and updates related to alliances during the nine months ended September 30, 2024 and 2023 are set forth below.
SystImmune
BMS and SystImmune, Inc. ("SystImmune") are parties to a global strategic collaboration for the co-development and co-commercialization of BL-B01D1, a bispecific topoisomerase inhibitor-based anti-body drug conjugate, which is currently being evaluated in a Phase I clinical trial for metastatic or unresectable NSCLC and is also in development for breast cancer and other tumor types. BMS paid an upfront fee of $800 million, which was included in Acquired IPRD during the nine months ended September 30, 2024. BMS is also obligated to pay up to $7.6 billion upon the achievement of contingent development, regulatory and sales-based milestones.
The parties will jointly develop and commercialize BL-B01D1 in the U.S. and share in the profits and losses. SystImmune will be responsible for the development, commercialization, and manufacturing in Mainland China and will be responsible for manufacturing certain drug supplies for outside of Mainland China, where BMS will receive a royalty on net sales. BMS will be responsible for the development and commercialization in the rest of the world, where SystImmune will receive a royalty on net sales.
Eisai
In June 2024, BMS and Eisai agreed to end the global strategic collaboration for the co-development and co-commercialization of MORAb-202 due to the ongoing portfolio prioritization efforts within BMS. All rights and obligations for MORAb-202 were transferred to Eisai and BMS will receive $90 million as part of the termination, which was included in Other (income)/expense, net during the nine months ended September 30, 2024, of which $85 million was received during the third quarter of 2024.
Note 4. ACQUISITIONS, DIVESTITURES, LICENSING AND OTHER ARRANGEMENTS
Asset Acquisition
Karuna
On March 18, 2024, BMS acquired Karuna, a clinical-stage biopharmaceutical company driven to discover, develop, and deliver transformative medicines for people living with psychiatric and neurological conditions. The acquisition provided BMS with rights to Cobenfy (xanomeline and trospium chloride), formerly KarXT. Cobenfy is an antipsychotic with a novel mechanism of action and differentiated efficacy and safety, which was approved by the FDA on September 26, 2024 for the treatment of schizophrenia in adults. Cobenfy is also in registrational trials for both adjunctive therapy to existing standard of care agents in schizophrenia and the treatment of psychosis in patients with Alzheimer’s disease.
BMS acquired all of the issued and outstanding shares of Karuna's common stock for $330.00 per share in an all-cash transaction for total consideration of $14.0 billion, or $12.9 billion net of cash acquired. The acquisition was funded primarily with debt proceeds (see "—Note 10. Financing Arrangements" for further detail). The transaction was accounted for as an asset acquisition since Cobenfy represented substantially all of the fair value of the gross assets acquired. As a result, $12.1 billion was expensed to Acquired IPRD during the nine months ended September 30, 2024.
The following summarizes the total consideration transferred and allocation of consideration transferred to the assets acquired, liabilities assumed and Acquired IPRD expense:
| | | | | |
Dollars in millions | |
Cash consideration for outstanding shares | $ | 12,606 | |
Cash consideration for equity awards | 1,421 | |
Consideration to be paid | 14,027 | |
Less: Charge for unvested stock awards(a) | (289) | |
Transaction costs | 55 | |
Total consideration allocated | $ | 13,793 | |
| |
Cash and cash equivalents | $ | 1,167 | |
Other assets | 67 | |
Intangible assets | 100 | |
Deferred income tax asset | 542 | |
Deferred income tax liability | (25) | |
Other liabilities | (180) | |
Total identifiable assets acquired, net | 1,671 | |
Acquired IPRD expense | 12,122 | |
Total consideration allocated | $ | 13,793 | |
(a) Includes cash-settled unvested equity awards of $130 million expensed in Marketing, selling and administrative and $159 million expensed in Research and development during the nine months ended September 30, 2024.
Business Combinations
RayzeBio
On February 26, 2024, BMS acquired RayzeBio, a clinical-stage radiopharmaceutical therapeutics ("RPT") company with actinium-based RPTs for solid tumors. The acquisition provided BMS with rights to RayzeBio’s actinium-based radiopharmaceutical platform and lead asset, RYZ101, which is in Phase III development for treatment of gastroenteropancreatic neuroendocrine tumors.
BMS acquired all of the issued and outstanding shares of RayzeBio's common stock for $62.50 per share in an all-cash transaction for total consideration of $4.1 billion, or $3.6 billion net of cash acquired. The acquisition was funded through a combination of cash on hand and debt proceeds (see "—Note 10. Financing Arrangements" for further detail).
The transaction was accounted for as a business combination requiring all assets acquired and liabilities assumed to be recognized at fair value as of the acquisition date.
Total consideration for the acquisition consisted of the following:
| | | | | |
Dollars in millions | |
Cash consideration for outstanding shares | $ | 3,851 | |
Cash consideration for equity awards | 296 | |
Consideration paid | 4,147 | |
Less: Unvested stock awards(a) | (274) | |
Total consideration allocated | $ | 3,873 | |
(a) Includes cash settlement for unvested equity awards of $159 million expensed in Marketing, selling and administrative and $115 million expensed in Research and development during the nine months ended September 30, 2024.
The purchase price allocation resulted in the following amounts being allocated to the assets acquired and liabilities assumed as of the acquisition date based upon their respective fair values summarized below:
| | | | | |
Dollars in millions | Purchase Price Allocation |
Cash and cash equivalents | $ | 501 | |
Other assets | 70 | |
Intangible assets | 3,700 | |
Deferred income tax asset | 81 | |
Deferred income tax liability | (798) | |
Other liabilities | (109) | |
Identifiable net assets acquired | $ | 3,445 | |
Goodwill | 428 | |
Total consideration allocated | $ | 3,873 | |
Intangible assets included $1.7 billion of indefinite-lived IPRD and $2.0 billion of R&D technology. The estimated fair values for the indefinite-lived IPRD asset and the R&D technology were determined using an income approach valuation method. Goodwill resulted primarily from the recognition of deferred tax liabilities and is not deductible for tax purposes.
Mirati
On January 23, 2024, BMS acquired Mirati, a commercial stage targeted oncology company, obtaining the rights to commercialize lung cancer medicine Krazati, and several clinical assets, including PRMT5 Inhibitor (formerly MRTX1719). Krazati is an inhibitor of the KRASG12C mutation approved by the FDA as a second-line treatment for patients with NSCLC and is in clinical development in combination with a PD-1 inhibitor as a first-line therapy for patients with NSCLC. Krazati also is in clinical development both as a single agent, and in combinations, for additional indications. PRMT5 Inhibitor is a potential first-in-class MTA-cooperative PRMT5 inhibitor in Phase I development. BMS obtained access to several other clinical and pre-clinical stage assets, including additional KRAS inhibitors and enabling programs.
BMS acquired all of the issued and outstanding shares of Mirati's common stock for $58.00 per share in an all-cash transaction for total consideration of $4.8 billion, or $4.1 billion net of cash acquired. Mirati stockholders also received one non-tradeable contingent value right (CVR) for each share of Mirati common stock held, potentially worth $12.00 per share in cash for a total value of approximately $1.0 billion. The payout of the contingent value right is subject to the FDA acceptance of an NDA for PRMT5 Inhibitor for the treatment of specific indications within seven years of the closing of the transaction. The acquisition was funded through a combination of cash on hand and debt proceeds (see "—Note 10. Financing Arrangements" for further detail).
The transaction was accounted for as a business combination requiring all assets acquired and liabilities assumed to be recognized at fair value as of the acquisition date.
Total consideration for the acquisition consisted of the following:
| | | | | |
Dollars in millions | |
Cash consideration for outstanding shares | $ | 4,596 | |
Cash consideration for equity awards | 205 | |
Consideration paid | 4,801 | |
Plus: Fair value of CVRs | 248 | |
Less: unvested stock awards(a) | (114) | |
Total consideration allocated | $ | 4,935 | |
(a) Includes cash settlement of unvested equity awards of $60 million expensed in Marketing, selling and administrative and $54 million expensed in Research and development during nine months ended September 30, 2024.
The purchase price allocation resulted in the following amounts being allocated to the assets acquired and liabilities assumed as of the acquisition date based upon their respective fair values summarized below:
| | | | | |
Dollars in millions | Purchase price allocation |
Cash and cash equivalents | $ | 748 | |
Inventories | 215 | |
Other assets | 159 | |
Intangible assets | 4,225 | |
Deferred income tax assets | 734 | |
Deferred income tax liabilities | (1,094) | |
Other liabilities | (204) | |
Identifiable net assets acquired | $ | 4,783 | |
Goodwill | 152 | |
Total consideration allocated | $ | 4,935 | |
Inventories includes a fair value adjustment of $148 million. Intangible assets included $640 million of definite-lived Acquired marketed product rights (Krazati) and $3.5 billion of indefinite-lived IPRD assets. The estimated fair value of both definite-lived Acquired marketed product rights and indefinite-lived IPRD assets was determined using an income approach valuation method. Goodwill resulted primarily from the recognition of deferred tax liabilities and is not deductible for tax purposes.
The results of operations and cash flows for Karuna, RayzeBio and Mirati were included in the consolidated financial statements commencing on their respective acquisition dates and were not material. Historical financial results of the acquired entities were not significant.
Divestitures
The following table summarizes the financial impact of divestitures including royalties, which are included in Other (income)/expense, net. Revenue and pretax earnings related to all divestitures were not material in all periods presented (excluding divestiture gains or losses).
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| Three Months Ended September 30, |
| Net Proceeds | | Divestiture (Gains)/Losses | | Royalty Income |
Dollars in millions | 2024 | | 2023 | | 2024 | | 2023 | | 2024 | | 2023 |
Diabetes business - royalties | $ | 278 | | | $ | 220 | | | $ | — | | | $ | — | | | $ | (284) | | | $ | (217) | |
Mature products and other | 3 | | | 3 | | | 5 | | | — | | | — | | | — | |
Total | $ | 281 | | | $ | 223 | | | $ | 5 | | | $ | — | | | $ | (284) | | | $ | (217) | |
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| Nine Months Ended September 30, |
| Net Proceeds | | Divestiture (Gains)/Losses | | Royalty Income |
Dollars in millions | 2024 | | 2023 | | 2024 | | 2023 | | 2024 | | 2023 |
Diabetes business - royalties | $ | 774 | | | $ | 621 | | | $ | — | | | $ | — | | | $ | (820) | | | $ | (623) | |
Mature products and other | 3 | | | 10 | | | 5 | | | — | | | — | | | — | |
Total | $ | 777 | | | $ | 631 | | | $ | 5 | | | $ | — | | | $ | (820) | | | $ | (623) | |
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Licensing and Other Arrangements
The following table summarizes the financial impact of Keytruda* royalties, Tecentriq* royalties, upfront licensing fees and milestones for products that have not obtained commercial approval, which are included in Other (income)/expense, net.
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| Three Months Ended September 30, | | Nine Months Ended September 30, |
Dollars in millions | 2024 | | 2023 | | 2024 | | 2023 |
Keytruda* royalties | $ | (137) | | | $ | (315) | | | $ | (407) | | | $ | (878) | |
Tecentriq* royalties | (12) | | | (24) | | | (35) | | | (78) | |
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Contingent milestone income | (13) | | | — | | | (38) | | | (36) | |
Amortization of deferred income | (12) | | | (12) | | | (36) | | | (39) | |
Other royalties and licensing income | (6) | | | (14) | | | (16) | | | (37) | |
Royalty and licensing income | $ | (180) | | | $ | (365) | | | $ | (532) | | | $ | (1,068) | |
Keytruda* Patent License Agreement
BMS and Ono are parties to a global patent license agreement with Merck related to Merck's PD-1 antibody Keytruda*. Under the agreement, Merck paid ongoing royalties on global sales of Keytruda* of 6.5% through December 31, 2023 and is obligated to pay 2.5% from January 1, 2024 through December 31, 2026. The companies also granted certain rights to each other under their respective patent portfolios pertaining to PD-1. Payments and royalties are shared between BMS and Ono on a 75/25 percent allocation, respectively, after adjusting for each party's legal fees.
Note 5. OTHER (INCOME)/EXPENSE, NET
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| Three Months Ended September 30, | | Nine Months Ended September 30, |
Dollars in millions | 2024 | | 2023 | | 2024 | | 2023 |
Interest expense (Note 10) | $ | 505 | | | $ | 280 | | | $ | 1,451 | | | $ | 850 | |
Royalty and licensing income (Note 4) | (180) | | | (365) | | | (532) | | | (1,068) | |
Royalty income - divestiture (Note 4) | (284) | | | (217) | | | (820) | | | (623) | |
Investment income | (94) | | | (107) | | | (364) | | | (304) | |
Litigation and other settlements (a) | — | | | (61) | | | 71 | | | (393) | |
Provision for restructuring (Note 6) | 78 | | | 141 | | | 558 | | | 321 | |
Integration expenses (Note 6) | 69 | | | 54 | | | 214 | | | 180 | |
Equity investment (gains)/losses (Note 9) | (12) | | | — | | | (221) | | | 213 | |
Acquisition expense (Note 4) | — | | | — | | | 50 | | | — | |
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Intangible asset impairment | 47 | | | 29 | | | 47 | | | 29 | |
Other(b) | 105 | | | (12) | | | 134 | | | 8 | |
Other (income)/expense, net | $ | 234 | | | $ | (258) | | | $ | 588 | | | $ | (787) | |
(a) Includes $90 million of income related to the Eisai collaboration termination incurred during the nine months ended September 30, 2024 and $400 million of income related to Nimbus' TYK2 program change of control provision incurred during the nine months ended September 30, 2023.
(b) Includes pension settlement charges of $100 million during the three months ended September 30, 2024 and $119 million during the nine months ended September 30, 2024 incurred in connection with the termination of the Bristol-Myers Squibb Puerto Rico, Inc. Retirement Income pension plan.
Litigation and Other Settlements
BeiGene Settlement
In August 2023, BMS and BeiGene, Ltd. ("BeiGene") entered into an agreement that terminated all contractual relationships and settled all on-going disputes and claims between the parties, including those related to the Abraxane license and supply agreements and related arbitration proceedings that were previously disclosed. As part of this agreement, BMS agreed to transfer 23.3 million of BeiGene ordinary shares of common stock held under a share subscription agreement back to BeiGene resulting in $322 million of expense that was included in Other (income)/expense, net during the three and nine months ended September 30, 2023. The expense was determined based on the closing price of the shares on the date of the transfer.
AstraZeneca Settlement
In July 2023, BMS entered into an agreement with AstraZeneca to settle all outstanding claims between the parties in the CTLA-4 litigation and the two PD-L1 antibody litigations. AstraZeneca is to pay an aggregate of $560 million to BMS in four payments through September 2026, which would be subject to sharing arrangements with Ono and Dana-Farber. BMS's share is approximately $418 million, of which the net present value of $384 million was reflected in Other (income)/expense during the three and nine months ended September 30, 2023.
Note 6. RESTRUCTURING
2023 Restructuring Plan
In 2023, BMS commenced a restructuring plan to accelerate the delivery of medicines to patients by evolving and streamlining its enterprise operating model in key areas, such as R&D, manufacturing, commercial and other functions, to ensure its operating model supports and is appropriately aligned with the Company’s strategy to invest in key priorities. These changes primarily include (i) transforming R&D operations to accelerate pipeline delivery, (ii) enhancing our commercial operating model, and (iii) establishing a more responsive manufacturing network and expanding our cell therapy manufacturing capabilities. Consistent with our prioritization and efficiency goals communicated earlier this year, BMS continues to execute on strategic productivity initiatives through portfolio prioritization and management of our operating costs. Total expected restructuring costs under the 2023 Restructuring Plan to be incurred through 2026 are approximately $1.5 billion. These costs consist primarily of employee termination costs, and to a lesser extent, site exit costs, including impairment and accelerated depreciation of property, plant and equipment.
Celgene and Other Acquisition Plans
Restructuring and integration plans were initiated to realize expected cost synergies resulting from cost savings and avoidance from the acquisitions of Celgene (2019), Turning Point (2022), Mirati (2024), RayzeBio (2024) and Karuna (2024). For these plans, the remaining charges of approximately $350 million consist primarily of employee termination costs, IT system integration costs, and to a lesser extent, site exit costs, including impairment and accelerated depreciation of property, plant and equipment.
The following provides the charges related to restructuring initiatives by type of cost:
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| Three Months Ended September 30, | | Nine Months Ended September 30, |
Dollars in millions | 2024 | | 2023 | | 2024 | | 2023 |
2023 Restructuring Plan | $ | 180 | | | $ | 149 | | | $ | 512 | | | $ | 380 | |
Celgene and Other Acquisition Plans | 83 | | | 131 | | | 420 | | | 269 | |
Total charges | $ | 263 | | | $ | 280 | | | $ | 932 | | | $ | 649 | |
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Employee termination costs | $ | 77 | | | $ | 135 | | | $ | 554 | | | $ | 309 | |
Other termination costs | 1 | | | 6 | | | 4 | | | 12 | |
Provision for restructuring | 78 | | | 141 | | | 558 | | | 321 | |
Integration expenses | 69 | | | 54 | | | 214 | | | 180 | |
Accelerated depreciation | 22 | | | 15 | | | 56 | | | 28 | |
Asset impairments (a) | 93 | | | 70 | | | 95 | | | 120 | |
Other shutdown costs | 1 | | | — | | | 9 | | | — | |
Total charges | $ | 263 | | | $ | 280 | | | $ | 932 | | | $ | 649 | |
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Cost of products sold | $ | 88 | | | $ | 16 | | | $ | 105 | | | $ | 53 | |
Marketing, selling and administrative | 7 | | | 65 | | | 19 | | | 85 | |
Research and development | 21 | | | 4 | | | 36 | | | 10 | |
Other (income)/expense, net | 147 | | | 195 | | | 772 | | | 501 | |
Total charges | $ | 263 | | | $ | 280 | | | $ | 932 | | | $ | 649 | |
(a) Includes $87 million for a site impairment incurred during the three months ended September 30, 2024 and a $65 million impairment charge for a facility lease during the three months ended September 30, 2023.
The following summarizes the charges and spending related to restructuring plan activities:
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| Nine Months Ended September 30, |
Dollars in millions | 2024 | | 2023 |
Beginning balance | $ | 188 | | | $ | 47 | |
Provision for restructuring | 558 | | | 321 | |
Foreign currency translation and other | — | | | (3) | |
Payments | (432) | | | (142) | |
Ending balance | $ | 314 | | | $ | 223 | |
Note 7. INCOME TAXES
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| Three Months Ended September 30, | | Nine Months Ended September 30, |
Dollars in millions | 2024 | | 2023 | | 2024 | | 2023 |
Earnings/(Loss) before income taxes | $ | 1,676 | | | $ | 2,137 | | | $ | (8,554) | | | $ | 6,766 | |
Income tax provision | 461 | | | 203 | | | 455 | | | 488 | |
Effective tax rate | 27.5 | % | | 9.5 | % | | (5.3) | % | | 7.2 | % |
Provision for income taxes in interim periods is determined based on the estimated annual effective tax rates and the tax impact of discrete items that are reflected immediately. The effective tax rate for the three months ended September 30, 2024 was primarily impacted by changes in previously estimated annual effective tax rates resulting from jurisdictional earnings mix.
The effective tax rate for the nine months ended September 30, 2024 was impacted by a $12.1 billion one-time, non-tax deductible charge for the acquisition of Karuna, as well as the release of income tax reserves of $644 million related to the resolution of Celgene's 2017-2019 IRS audit and jurisdictional earnings mix resulting from amortization of acquired intangible assets.
The effective tax rate during the three months ended September 30, 2023 was primarily impacted by the Section 174 guidance regarding deductibility of certain non-U.S. research and development expenses. The revised guidance resulted in a reduction of previously estimated income taxes for 2022, which was reflected in the third quarter of 2023, as well as a reduction in the estimated annual effective rates for 2023. Previously estimated income taxes for 2022 were reduced by approximately $240 million upon finalization of the U.S. Federal tax return primarily due to the aforementioned revised Section 174 guidance that was issued in the third quarter of 2023.
In addition to the above mentioned impact of the Section 174 guidance, the effective tax rate during the nine months ended September 30, 2023 was impacted by a $656 million deferred income tax benefit following the receipt of a non-U.S. tax ruling regarding the deductibility of a statutory impairment of subsidiary investment, jurisdictional earnings mix resulting from amortization of acquired intangible assets, equity investment losses, litigation and other settlements, as well as releases of income tax reserves of $89 million related to the resolution of Celgene's 2009-2011 IRS audit.
Additional changes to the effective tax rate may occur in future periods due to various reasons, including changes to the estimated pretax earnings mix and tax reserves and revised interpretations or changes to the tax legislation code.
During the nine months ended September 30, 2024 and 2023, income tax payments were $3.1 billion and $4.1 billion, including $799 million and $567 million, respectively, for the transition tax following the TCJA enactment.
BMS is currently under examination by a number of tax authorities that proposed or are considering proposing material adjustments to tax positions for issues such as transfer pricing, certain tax credits and the deductibility of certain expenses. As previously disclosed, BMS received several notices of proposed adjustments from the IRS related to transfer pricing and other tax issues for the 2008 to 2012 tax years. BMS disagrees with the IRS's positions and continues to work cooperatively with the IRS to resolve these issues. In the fourth quarter of 2022, BMS entered the IRS administrative appeals process to resolve these matters. Timing of the final resolution of these complex matters is uncertain and could have a material impact on BMS's consolidated financial statements.
It is reasonably possible that the amount of unrecognized tax benefits as of September 30, 2024 could decrease in the range of approximately $90 million to $130 million in the next twelve months as a result of the settlement of certain tax audits and other events. The expected change in unrecognized tax benefits may result in the payment of additional taxes, adjustment of certain deferred taxes and/or recognition of tax benefits.
It is reasonably possible that new issues will be raised by tax authorities that may increase unrecognized tax benefits, however, an estimate of such increases cannot reasonably be made at this time. BMS believes that it has adequately provided for all open tax years by jurisdiction.
Note 8. EARNINGS/(LOSS) PER SHARE
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| Three Months Ended September 30, | | Nine Months Ended September 30, |
Dollars in millions, except per share data | 2024 | | 2023 | | 2024 | | 2023 |
Net earnings/(loss) attributable to BMS | $ | 1,211 | | | $ | 1,928 | | | $ | (9,020) | | | $ | 6,263 | |
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Weighted-average common shares outstanding – basic | 2,028 | | | 2,057 | | | 2,026 | | | 2,083 | |
Incremental shares attributable to share-based compensation plans | 3 | | | 7 | | | — | | | 10 | |
Weighted-average common shares outstanding – diluted | 2,031 | | | 2,064 | | | 2,026 | | | 2,093 | |
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Earnings/(loss) per common share | | | | | | | |
Basic | $ | 0.60 | | | $ | 0.94 | | | $ | (4.45) | | | $ | 3.01 | |
Diluted | 0.60 | | | 0.93 | | | (4.45) | | | 2.99 | |
The total number of potential shares of common stock excluded from the diluted (loss)/earnings per common share computation because of the antidilutive impact was 25 million and 41 million for the three and nine months ended September 30, 2024, respectively, and not material for the three and nine months ended September 30, 2023.
Note 9. FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS
Financial assets and liabilities measured at fair value on a recurring basis are summarized below:
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| September 30, 2024 | | December 31, 2023 |
Dollars in millions | Level 1 | | Level 2 | | Level 3 | | Level 1 | | Level 2 | | Level 3 |
Cash and cash equivalents | | | | | | | | | | | |
Money market and other securities | $ | — | | | $ | 5,589 | | | $ | — | | | $ | — | | | $ | 8,489 | | | $ | — | |
Marketable debt securities | | | | | | | | | | | |
Certificates of deposit | — | | | 18 | | | — | | | — | | | 609 | | | — | |
Commercial paper | — | | | — | | | — | | | — | | | 92 | | | — | |
Corporate debt securities | — | | | 483 | | | — | | | — | | | 460 | | | — | |
U.S. Treasury securities | — | | | 27 | | | — | | | — | | | 19 | | | — | |
Derivative assets | — | | | 271 | | | — | | | — | | | 219 | | | — | |
Equity investments | 600 | | | 88 | | | — | | | 318 | | | 141 | | | — | |
Derivative liabilities | — | | | 173 | | | — | | | — | | | 160 | | | — | |
Contingent consideration liability | | | | | | | | | | | |
Contingent value rights(a) | 2 | | | — | | | 248 | | | 4 | | | — | | | — | |
Other acquisition related contingent consideration | — | | | — | | | — | | | — | | | — | | | 8 | |
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(a) Includes the fair value of contingent value rights associated with the Mirati acquisition as further described in "—Note 4. Acquisitions, Divestitures, Licensing and Other Arrangements." The fair value of the contingent value rights was estimated using a probability-weighted expected return method.
As further described in "Item 8. Financial Statements and Supplementary Data—Note 9. Financial Instruments and Fair Value Measurements" in the Company's 2023 Form 10-K, the Company's fair value estimates use inputs that are either (1) quoted prices for identical assets or liabilities in active markets (Level 1 inputs); (2) observable prices for similar assets or liabilities in active markets or for identical or similar assets or liabilities in markets that are not active (Level 2 inputs); or (3) unobservable inputs (Level 3 inputs). The fair value of Level 2 equity investments is adjusted for characteristics specific to the security and is not adjusted for contractual sale restrictions. Equity investments subject to contractual sale restrictions were not material as of September 30, 2024 and December 31, 2023.
Marketable Debt Securities
The amortized cost for marketable debt securities approximates its fair value and these securities mature within five years as of September 30, 2024, and four years as of December 31, 2023.
Equity Investments
The following summarizes the carrying amount of equity investments:
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Dollars in millions | September 30, 2024 | | December 31, 2023 |
Equity investments with RDFV | $ | 688 | | | $ | 459 | |
Equity investments without RDFV | 841 | | | 698 | |
Limited partnerships and other equity method investments | 578 | | | 542 | |
Total equity investments | $ | 2,107 | | | $ | 1,699 | |
The following summarizes the activity related to equity investments. Changes in fair value of equity investments are included in Other (income)/expense, net.
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| Three Months Ended September 30, | | Nine Months Ended September 30, |
Dollars in millions | 2024 | | 2023 | | 2024 | | 2023 |
Equity investments with RDFV | | | | | | | |
Net (gain)/loss recognized | $ | (33) | | | $ | 15 | | | $ | (155) | | | $ | 203 | |
Less: net (gain)/loss recognized on investments sold | (3) | | | (86) | | | (2) | | | 2 | |
Net unrealized (gain)/loss recognized on investments still held | (30) | | | |