Changes in exchange rates and interest rates create exposure to market risk. Certain derivative financial instruments are used when available on a cost-effective basis to hedge the underlying economic exposure. These instruments qualify as cash flow, net investment and fair value hedges upon meeting certain criteria, including effectiveness of offsetting hedged exposures. Changes in fair value of derivatives that do not qualify for hedge accounting are recognized in earnings as they occur. Derivative financial instruments are not used for trading purposes.

Financial instruments are subject to counterparty credit risk which is considered as part of the overall fair value measurement. Counterparty credit risk is monitored on an ongoing basis and mitigated by limiting amounts outstanding with any individual counterparty, utilizing conventional derivative financial instruments and only entering into agreements with counterparties that meet high credit quality standards. The consolidated financial statements would not be materially impacted if any counterparty failed to perform according to the terms of its agreement. Collateral is not required by any party whether derivatives are in an asset or liability position under the terms of the agreements.

Level 2 inputs utilize observable prices for similar instruments and quoted prices for identical or similar instruments in non-active markets. Additionally, certain corporate debt securities utilize a third-party matrix pricing model using significant inputs corroborated by market data for substantially the full term of the assets. Equity and fixed income funds are primarily invested in publicly traded securities valued at the respective NAV of the underlying investments. Level 2 derivative instruments are valued using SOFR yield curves, less credit valuation adjustments, and observable forward foreign exchange rates at the reporting date. Valuations of derivative contracts may fluctuate considerably from volatility in underlying foreign currencies and underlying interest rates driven by market conditions and the duration of the contract. 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 December 31, 2025 and 2024.

Level 3 unobservable inputs are used when little or no market data is available. Level 3 financial liabilities consist of other acquisition related contingent consideration and success payments related to undeveloped product rights as well as valuations of equity investments where the Company has elected the fair value option.


	December 31, 2025						December 31, 2024
Dollars in millions	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Cash and cash equivalents
Money market and other securities	$	—	$	6,891	$	—	$	—	$	6,559	$	—
Marketable debt securities
Certificates of deposit	—		350		—		—		308		—

Corporate debt securities	—		439		—		—		486		—
U.S. Treasury securities	—		71		—		—		39		—
Derivative assets	—		303		—		—		750		—
Equity investments	552		—		85		247		42		—
Derivative liabilities	—		123		—		—		247		—
Contingent consideration liability
Contingent value rights(a)	3		—		607		2		—		256

(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 and was based on significant unobservable inputs, including the discount rate and estimated probability and timing of achieving the specified regulation milestone. During 2025, the change in fair value of $351 million reflected revised assumptions primarily related to the probability of achieving the specified regulatory milestone and was recorded within Other (income)/expense, net.


	Year ended December 31,
Dollars in millions	2025		2024		2023
Equity investments with RDFV
Net (gains)/losses recognized	$	(291)	$	41	$	117
Less: net (gains)/losses recognized on investments sold	(4)		32		(3)
Net unrealized (gains)/losses recognized on investments still held	(287)		9		120

Equity investments without RDFV
Upward adjustments	(15)		(36)		(9)
Net realized (gains)/losses recognized on investments sold	(17)		(39)		—
Impairments and downward adjustments	89		62		14

Limited partnerships and other investments
Equity in net (income)/loss of affiliates	(47)		(44)		38

Total equity investment (gains)/losses	(280)		(16)		160

BMS enters into foreign currency forward and purchased local currency put option contracts (foreign exchange contracts) to hedge certain forecasted intercompany inventory sales, third party sales and certain other foreign currency transactions. The objective of these foreign exchange contracts is to reduce variability caused by changes in foreign exchange rates that would affect the U.S. dollar value of future cash flows derived from foreign currency denominated sales, primarily the euro and Japanese yen. The fair values of these derivative contracts are recorded as either assets (gain positions) or liabilities (loss positions) in the consolidated balance sheets. Changes in fair value for these foreign exchange contracts, which are designated as cash flow hedges, are temporarily recorded in Accumulated other comprehensive loss ("AOCL") and reclassified to net earnings when the hedged item affects earnings (typically within the next 24 months). As of December 31, 2025, assuming market rates remain constant through contract maturities, BMS expects to reclassify pre-tax losses of $72 million into earnings for our foreign exchange contracts out of AOCL during the next 12 months. The notional amount of outstanding foreign currency exchange contracts was primarily $4.3 billion for the euro contracts and $1.1 billion for Japanese yen contracts as of December 31, 2025.

BMS also enters into cross-currency swap contracts to hedge exposure to foreign currency exchange rate risk associated with its long-term debt denominated in euros. These contracts convert interest payments and principal repayment of the long-term debt to U.S. dollars from euros and are designated as cash flow hedges. The unrealized gains and losses on these contracts are reported in AOCL and reclassified to Other (income)/expense, net, in the same periods during which the hedged debt affects earnings. The notional amount of cross-currency swap contracts associated with long-term debt denominated in euros was $584 million as of December 31, 2025.

In October 2025, BMS entered into forward interest rate contracts of a total notional value of €1.8 billion to hedge future interest rate risk associated with the 2025 Senior Unsecured Notes. The forward interest rate contracts were designated as cash flow hedges and terminated upon the issuance of the 2025 Senior Unsecured Notes. The gain on the transaction was not material.

Additionally in October and November 2025, BMS entered into forward interest rate contracts with a total notional value of $3.8 billion to hedge cash payments for the anticipated repurchases of long-term debt. The forward interest rate contracts were terminated upon pricing the debt redemptions in November 2025. These contracts were not designated for hedge accounting. The loss on the transaction was not material.

In January 2024, BMS entered into forward interest rate contracts of a total notional value of $5.0 billion to hedge future interest rate risk associated with the 2024 Senior Unsecured Notes. The forward interest rate contracts were designated as cash flow hedges and terminated upon the issuance of the 2024 Senior Unsecured Notes. The $131 million gain on the transaction was included in Other Comprehensive Income/(Loss) and is amortized as a reduction to interest expense over the term of the related debt. Amounts expected to be recognized during the subsequent 12 months on forward interest rate contracts are not material.

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. The earnings impact related to discontinued cash flow hedges and hedge ineffectiveness was not material during all periods presented. Foreign currency exchange contracts not designated as a cash flow hedge 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.

Cross-currency swap contracts of $707 million as of December 31, 2025 are designated to hedge currency exposure of BMS's net investment in its foreign subsidiaries. Contract fair value changes are recorded in the foreign currency translation component of AOCL with a related offset in derivative asset or liability in the consolidated balance sheets. The notional amount of outstanding cross-currency swap contracts was primarily attributed to the Japanese yen of $362 million and euro of $345 million as of December 31, 2025. Foreign currency forward contracts and zero-cost collar contracts are also designated to hedge currency exposure of BMS's net investment in its foreign subsidiaries. As of December 31, 2025, the notional amounts for both of these contracts were zero.

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. 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 in the consolidated balance sheets. As a result, there was no net impact in earnings. If the underlying swap is terminated prior to maturity, then the fair value adjustment to the underlying debt is amortized as a reduction to interest expense over the remaining term of the debt.

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.


	December 31, 2025								December 31, 2024
	Asset(a)				Liability(b)				Asset(a)				Liability(b)
Dollars in millions	Notional		Fair Value		Notional		Fair Value		Notional		Fair Value		Notional		Fair Value
Designated as cash flow hedges
Foreign currency exchange contracts	$	5,074	$	145	$	1,542	$	(64)	$	6,428	$	424	$	43	$	—
Cross-currency swap contracts	584		65		—		—		584		26		626		(30)
Designated as net investment hedges
Foreign currency exchange contracts	—		—		—		—		185		17		—		—
Cross-currency swap contracts	362		39		345		(48)		361		23		346		(7)
Designated as fair value hedges
Interest rate swap contracts	4,000		46		555		(5)		1,500		10		1,955		(20)
Not designated as hedges
Foreign currency exchange contracts	1,887		8		667		(5)		5,749		250		5,243		(173)
Total return swap contracts(c)	—		—		447		(1)		—		—		443		(17)


	Year Ended December 31,
	2025				2024				2023
Dollars in millions	Cost of products sold		Other (income)/expense, net		Cost of products sold		Other (income)/expense, net		Cost of products sold		Other (income)/expense, net
Interest rate swap contracts	$	—	$	(1)	$	—	$	11	$	—	$	(5)
Cross-currency swap contracts	—		(135)		—		67		—		(65)
Foreign exchange contracts	63		43		(100)		(98)		(303)		(95)
Forward interest rate contracts	—		(35)		—		(5)		—		—


	Year Ended December 31,
Dollars in millions	2025		2024		2023
Derivatives designated as cash flow hedges
Foreign exchange contracts gains/(losses):
Recognized in Other comprehensive income/(loss)	$	(426)	$	418	$	13
Reclassified to Cost of products sold	63		(100)		(303)
Cross-currency swap contracts gains/(losses):
Recognized in Other comprehensive income/(loss)	85		(54)		57
Reclassified to Other (income)/expense, net	(123)		75		(31)
Forward interest rate contract gains/(losses):
Recognized in Other comprehensive income/(loss)	—		131		—
Reclassified to Other (income)/expense, net	(28)		(5)		—



Derivatives designated as net investment hedges
Cross-currency swap contracts gains/(losses):
Recognized in Other comprehensive income/(loss)	(24)		51		52
Foreign exchange contracts gains/(losses):
Recognized in Other comprehensive income/(loss)	(113)		35		(15)
Non-derivatives designated as net investment hedges
Non-U.S. dollar borrowings gains/(losses):
Recognized in Other comprehensive income/(loss)(a)	—		—		(10)