
	June 30, 2020										December 31, 2019
Dollars in Millions	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Cash and cash equivalents - money market and other securities	$	—	$	17,680	$	—	$	—	$	10,448	$	—
Marketable debt securities:
Certificates of deposit	—		1,222		—		—		1,227		—
Commercial paper	—		100		—		—		1,093		—
Corporate debt securities	—		925		—		—		1,494		—
Derivative assets	—		121		—		—		140		—
Equity investments	2,665		187		—		2,020		175		—
Derivative liabilities	—		(25)		—		—		(40)		—
Contingent consideration liability:
Contingent value rights	2,692		—		—		2,275		—		—
Other acquisition related contingent consideration	—		—		71		—		—		106

As further described in “Item 8. Financial Statements and Supplementary Data—Note 9. Financial Instruments and Fair Value Measurements” in the Company's 2019 Form 10-K, the Company's fair value estimates use inputs that are either (1) quoted prices for identical assets or liabilities in active markets (Level 1 inputs); (2) observable prices for similar assets or liabilities in active markets or for identical or similar assets or liabilities in markets that are not active (Level 2 inputs); or (3) unobservable inputs (Level 3 inputs).

Contingent consideration obligations are recorded at their estimated fair values and these obligations are revalued each reporting period until the related contingencies are resolved. The contingent value rights are adjusted to fair value using the traded price of the securities at the end of each reporting period. The fair value measurements for other contingent consideration liabilities are estimated using probability-weighted discounted cash flow approaches that are based on significant unobservable inputs related to product candidates acquired in business combinations and are reviewed quarterly. These inputs include, as applicable, estimated probabilities and timing of achieving specified development and regulatory milestones, estimated annual sales and the discount rate used to calculate the present value of estimated future payments. Significant changes which increase or decrease the probabilities of achieving the related development and regulatory events, shorten or lengthen the time required to achieve such events, or increase or decrease estimated annual sales would result in corresponding increases or decreases in the fair values of these obligations. The fair value of our contingent consideration as of June 30, 2020 was calculated using the following significant unobservable inputs:


			Ranges (weighted average) utilized as of:
Inputs			June 30, 2020
Discount rate			2.2% to 2.7% (2.4%)
Probability of payment			0% to 80% (2.6%)
Projected year of payment for development and regulatory milestones			2020 to 2025 (2022)
Projected year of payment for sales-based milestones and other amounts calculated as a percentage of annual sales			N/A


	June 30, 2020															December 31, 2019
Dollars in Millions	Amortized Cost		Gross Unrealized								Amortized Cost		Gross Unrealized
					Gains		Losses		Fair Value						Gains			Losses	Fair Value
Certificates of deposit	$	1,222	$	—	$	—	$	1,222	$	1,227	$	—	$	—		$	1,227
Commercial paper	100		—		—		100		1,093		—		—			1,093
Corporate debt securities	905		20		—		925		1,487		8		(1)			1,494
Total available-for-sale debt securities^(a)	$	2,227	$	20	$	—	2,247		$	3,807	$	8	$	(1)		3,814

Equity investments							2,852									2,195
Total							$	5,099								$	6,009

Equity investments not measured at fair value and excluded from the above fair value table were limited partnerships and other equity method investments of $449 million at June 30, 2020 and $429 million at December 31, 2019 and other equity investments without readily determinable fair values of $718 million at June 30, 2020 and $781 million at December 31, 2019. These amounts are included in Other non-current assets. Upward adjustments to equity investments without readily determinable fair values for the three and six months ended June 30, 2020 were $197 million and $272 million, respectively, resulting from observable price changes for similar securities for the same issuer and were recorded in Other (income)/expense, net. Downward adjustments to equity investments without readily determinable fair values for the three and six months ended June 30, 2020 were $13 million and $201 million, respectively.


	Three Months Ended June 30,						Six Months Ended June 30,
Dollars in Millions	2020		2019		2020		2019
Net gain recognized	$	635	$	59	$	407	$	154
Less: Net gain recognized for equity investments sold	—		—		—		14
Net unrealized gain on equity investments held	$	635	$	59	$	407	$	140

Cash Flow Hedges — Foreign currency forward contracts are used to hedge certain forecasted intercompany inventory purchases and sales transactions and certain foreign currency transactions. The fair value for contracts designated as cash flow hedges are temporarily reported in Accumulated other comprehensive loss and included in earnings when the hedged item affects earnings. The net gain or loss on foreign currency forward contracts is expected to be reclassified to net earnings (primarily included in Cost of products sold and Other (income)/expense, net) within the next 12 months. The notional amount of outstanding foreign currency forward contracts was primarily attributed to the euro of $2.2 billion and Japanese yen of $916 million at June 30, 2020.

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

BMS may hedge a portion of its future foreign currency exposure by utilizing a strategy that involves both a purchased local currency put option and a written local currency call option that are accounted for as hedges of future sales denominated in that local currency. Specifically, BMS sells (or writes) a local currency call option and purchases a local currency put option with the same expiration dates and local currency notional amounts but with different strike prices. The premium collected from the sale of the call option is equal to the premium paid for the purchased put option, resulting in no net premium being paid. This combination of transactions is generally referred to as a “zero-cost collar.” The expiration dates and notional amounts correspond to the amount and timing of forecasted foreign currency sales. The foreign currency zero-cost collar contracts outstanding as of June 30, 2020 had settlement dates within 12 months. If the U.S. Dollar weakens relative to the currency of the hedged anticipated sales, the purchased put option value reduces to zero and we benefit from the increase in the U.S. Dollar equivalent value of our anticipated foreign currency cash flows; however, this benefit would be capped at the strike level of the written call, which forms the upper end of the collar.

Net Investment Hedges — Non-U.S. dollar borrowings of €950 million ($1.1 billion) at June 30, 2020 are designated as net investment hedges to hedge euro currency exposures of the net investment in certain foreign affiliates and are recognized in long-term debt. The effective portion of foreign exchange gain on the remeasurement of euro debt was included in the foreign currency translation component of Accumulated other comprehensive loss with the related offset in long-term debt. Contract fair value changes are recorded in the foreign currency translation component of Other Comprehensive (Loss)/Income with a related offset in Other non-current assets or Other non-current liabilities.

Cross-currency interest rate swap contracts of $400 million at June 30, 2020 are designated to hedge Japanese yen currency exposure of BMS's net investment in its Japan subsidiaries. Contract fair value changes are recorded in the foreign currency translation component of Other Comprehensive (Loss)/Income with a related offset in Other non-current assets or Other non-current liabilities.

Fair Value Hedges — Fixed to floating interest rate swap contracts are designated as fair value hedges and used as an interest rate risk management strategy to create an appropriate balance of fixed and floating rate debt. The contracts and underlying debt for the hedged benchmark risk are recorded at fair value. The effective interest rate for the contracts is one-month LIBOR (0.2% as of June 30, 2020) plus an interest rate spread of 4.6%. Gains or losses resulting from changes in fair value of the underlying debt attributable to the hedged benchmark interest rate risk are recorded in interest expense with an associated offset to the carrying value of debt. Since the specific terms and notional amount of the swap are intended to align with the debt being hedged, all changes in fair value of the swap are recorded in interest expense with an associated offset to the derivative asset or liability on the consolidated balance sheet. As a result, there was no net impact in earnings. When the underlying swap is terminated prior to maturity, the fair value adjustment to the underlying debt is amortized as a reduction to interest expense over the remaining term of the debt.

In the second quarter of 2019, deal contingent forward starting interest rate swap contracts were entered into, with an aggregate notional principal amount of $10.4 billion to hedge interest rate risk associated with the anticipated issuance of long-term debt to fund the Celgene acquisition and the forward starting interest rate swap option contracts were terminated. The deal contingent forward starting interest rate swap contracts were terminated upon the completion of the Celgene acquisition.


	June 30, 2020														December 31, 2019
	Asset^(a)						Liability^(b)						Asset^(a)				Liability^(b)
Dollars in Millions	Notional		Fair Value		Notional		Fair Value		Notional		Fair Value		Notional		Fair Value
Derivatives designated as hedging instruments:
Interest rate swap contracts	$	255	$	28	$	—	$	—	$	255	$	6	$	—	$	—
Cross-currency interest rate swap contracts	400		11		—		—		175		2		125		(1)
Foreign currency forward contracts	2,038		44		1,652		(22)		766		27		980		(20)

Derivatives not designated as hedging instruments:
Foreign currency forward contracts	1,170		37		284		(2)		2,342		91		1,173		(10)
Foreign currency zero-cost collar contracts	228		1		147		(1)		2,482		14		2,235		(9)


	Three Months Ended June 30, 2020						Six Months Ended June 30, 2020
Dollars in Millions	Cost of products sold		Other (income)/expense, net		Cost of products sold		Other (income)/expense, net
Interest rate swap contracts	$	—	$	(7)	$	—	$	(14)
Cross-currency interest rate swap contracts	—		(3)		—		(5)
Foreign currency forward contracts	(35)		21		(58)		(55)
Foreign currency zero-cost collar contracts	—		10		—		1


	Three Months Ended June 30, 2019						Six Months Ended June 30, 2019
Dollars in Millions	Cost of products sold		Other (income)/expense, net		Cost of products sold		Other (income)/expense, net
Interest rate swap contracts	$	—	$	(7)	$	—	$	(12)
Cross-currency interest rate swap contracts	—		(2)		—		(4)
Foreign currency forward contracts	(26)		(11)		(56)		(2)
Forward starting interest rate swap options	—		—		—		35
Deal contingent forward starting interest rate swap	—		240		—		240


	Three Months Ended June 30,						Six Months Ended June 30,
Dollars in Millions	2020		2019		2020		2019
Derivatives qualifying as cash flow hedges
Foreign currency forward contracts gain/(loss):
Recognized in Other Comprehensive (Loss)/Income^(a)	$	(34)	$	(6)	$	63	$	39
Reclassified to Cost of products sold	(32)		(26)		(52)		(56)


Derivatives qualifying as net investment hedges
Cross-currency interest rate swap contracts gain:
Recognized in Other Comprehensive (Loss)/Income	4		(4)		10		2

Non-derivatives qualifying as net investment hedges
Non-U.S. dollar borrowings gain:
Recognized in Other Comprehensive (Loss)/Income	(32)		(6)		(12)		2


Dollars in Millions	June 30, 2020		December 31, 2019
Principal Value	$	44,348	$	44,335

Adjustments to Principal Value:
Fair value of interest rate swap contracts	28		6
Unamortized basis adjustment from swap terminations	162		175
Unamortized bond discounts and issuance costs	(264)		(280)
Unamortized purchase price adjustments of Celgene debt	1,832		1,914
Total	$	46,106	$	46,150

Current portion of long-term debt	$	4,253	$	2,763
Long-term debt	41,853		43,387
Total	$	46,106	$	46,150

The fair value of long-term debt was $53.8 billion at June 30, 2020 and $50.7 billion at December 31, 2019 valued using Level 2 inputs, which are based upon the quoted market prices for the same or similar debt instruments. The fair value of short-term borrowings approximates the carrying value due to the short maturities of the debt instruments. Interest payments were $845 million and $110 million for the six months ended June 30, 2020 and 2019, respectively, net of amounts related to interest rate swap contracts.

In the second quarter of 2019, BMS issued an aggregate principal amount of $19.0 billion of floating rate and fixed rate unsecured senior notes. The notes rank equally in right of payment with all of the Company's existing and future senior unsecured indebtedness and the fixed rate notes are redeemable at any time, in whole, or in part, at varying specified redemption prices plus accrued and unpaid interest.