☒
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
New Jersey
|
|
22-0760120
|
||||
(State or other jurisdiction of
incorporation or organization) |
|
(I.R.S. Employer
Identification No.)
|
||||
|
|
|
|
|
|
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1 Becton Drive,
|
Franklin Lakes,
|
New Jersey
|
07417-1880
|
|
(201)
|
847-6800
|
(Address of principal executive offices) (Zip Code)
|
|
(Registrant’s telephone number, including area code)
|
Title of Each Class
|
|
Trading Symbol
|
|
Name of Each Exchange on Which Registered
|
Common stock, par value $1.00
|
|
BDX
|
|
New York Stock Exchange
|
Depositary Shares, each representing 1/20th of a share of 6.125% Cumulative Preferred Stock Series A
|
|
BDXA
|
|
New York Stock Exchange
|
1.000% Notes due December 15, 2022
|
|
BDX22A
|
|
New York Stock Exchange
|
1.900% Notes due December 15, 2026
|
|
BDX26
|
|
New York Stock Exchange
|
1.401% Notes due May 24, 2023
|
|
BDX23A
|
|
New York Stock Exchange
|
3.020% Notes due May 24, 2025
|
|
BDX25
|
|
New York Stock Exchange
|
0.174% Notes due June 4, 2021
|
|
BDX/21
|
|
New York Stock Exchange
|
0.632% Notes due June 4, 2023
|
|
BDX/23A
|
|
New York Stock Exchange
|
1.208% Notes due June 4, 2026
|
|
BDX/26A
|
|
New York Stock Exchange
|
|
|
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Page
Number
|
Part I.
|
FINANCIAL INFORMATION
|
|
|
|
|
Item 1.
|
|
|
|
||
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|
||
|
||
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
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Part II.
|
|
|
|
|
|
Item 1.
|
||
Item 1A.
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
Item 5.
|
||
Item 6.
|
||
|
|
|
|
|
December 31,
2019 |
|
September 30,
2019 |
||||
Assets
|
(Unaudited)
|
|
|
||||
Current Assets:
|
|
|
|
||||
Cash and equivalents
|
$
|
560
|
|
|
$
|
536
|
|
Restricted cash
|
49
|
|
|
54
|
|
||
Short-term investments
|
8
|
|
|
30
|
|
||
Trade receivables, net
|
2,074
|
|
|
2,345
|
|
||
Inventories:
|
|
|
|
||||
Materials
|
599
|
|
|
544
|
|
||
Work in process
|
350
|
|
|
318
|
|
||
Finished products
|
1,811
|
|
|
1,717
|
|
||
|
2,760
|
|
|
2,579
|
|
||
Prepaid expenses and other
|
987
|
|
|
1,119
|
|
||
Total Current Assets
|
6,438
|
|
|
6,664
|
|
||
Property, Plant and Equipment
|
11,425
|
|
|
11,128
|
|
||
Less allowances for depreciation and amortization
|
5,643
|
|
|
5,469
|
|
||
Property, Plant and Equipment, Net
|
5,782
|
|
|
5,659
|
|
||
Goodwill
|
23,435
|
|
|
23,376
|
|
||
Developed Technology, Net
|
10,848
|
|
|
11,054
|
|
||
Customer Relationships, Net
|
3,345
|
|
|
3,424
|
|
||
Other Intangibles, Net
|
532
|
|
|
500
|
|
||
Other Assets
|
1,573
|
|
|
1,088
|
|
||
Total Assets
|
$
|
51,952
|
|
|
$
|
51,765
|
|
Liabilities and Shareholders’ Equity
|
|
|
|
||||
Current Liabilities:
|
|
|
|
||||
Short-term debt
|
$
|
2,456
|
|
|
$
|
1,309
|
|
Payables, accrued expenses and other current liabilities
|
4,269
|
|
|
4,345
|
|
||
Total Current Liabilities
|
6,726
|
|
|
5,655
|
|
||
Long-Term Debt
|
16,949
|
|
|
18,081
|
|
||
Long-Term Employee Benefit Obligations
|
1,290
|
|
|
1,272
|
|
||
Deferred Income Taxes and Other Liabilities
|
5,785
|
|
|
5,676
|
|
||
Commitments and Contingencies (See Note 5)
|
|
|
|
|
|
||
Shareholders’ Equity
|
|
|
|
||||
Preferred stock
|
2
|
|
|
2
|
|
||
Common stock
|
347
|
|
|
347
|
|
||
Capital in excess of par value
|
16,320
|
|
|
16,270
|
|
||
Retained earnings
|
12,938
|
|
|
12,913
|
|
||
Deferred compensation
|
24
|
|
|
23
|
|
||
Common stock in treasury - at cost
|
(6,228
|
)
|
|
(6,190
|
)
|
||
Accumulated other comprehensive loss
|
(2,202
|
)
|
|
(2,283
|
)
|
||
Total Shareholders’ Equity
|
21,202
|
|
|
21,081
|
|
||
Total Liabilities and Shareholders’ Equity
|
$
|
51,952
|
|
|
$
|
51,765
|
|
|
Three Months Ended
December 31, |
||||||
|
2019
|
|
2018
|
||||
Revenues
|
$
|
4,225
|
|
|
$
|
4,160
|
|
Cost of products sold
|
2,247
|
|
|
2,187
|
|
||
Selling and administrative expense
|
1,121
|
|
|
1,073
|
|
||
Research and development expense
|
270
|
|
|
258
|
|
||
Acquisitions and other restructurings
|
86
|
|
|
91
|
|
||
Other operating income, net
|
—
|
|
|
(335
|
)
|
||
Total Operating Costs and Expenses
|
3,724
|
|
|
3,273
|
|
||
Operating Income
|
501
|
|
|
888
|
|
||
Interest expense
|
(136
|
)
|
|
(171
|
)
|
||
Interest income, net
|
1
|
|
|
(12
|
)
|
||
Other income, net
|
27
|
|
|
10
|
|
||
Income Before Income Taxes
|
394
|
|
|
714
|
|
||
Income tax provision
|
117
|
|
|
115
|
|
||
Net Income
|
278
|
|
|
599
|
|
||
Preferred stock dividends
|
(38
|
)
|
|
(38
|
)
|
||
Net income applicable to common shareholders
|
$
|
240
|
|
|
$
|
562
|
|
|
|
|
|
||||
|
|
|
|
||||
Basic Earnings per Share
|
$
|
0.88
|
|
|
$
|
2.09
|
|
Diluted Earnings per Share
|
$
|
0.87
|
|
|
$
|
2.05
|
|
Dividends per Common Share
|
$
|
0.79
|
|
|
$
|
0.77
|
|
|
Three Months Ended
December 31, |
||||||
|
2019
|
|
2018
|
||||
Net Income
|
$
|
278
|
|
|
$
|
599
|
|
Other Comprehensive Income (Loss), Net of Tax
|
|
|
|
||||
Foreign currency translation adjustments
|
26
|
|
|
(35
|
)
|
||
Defined benefit pension and postretirement plans
|
17
|
|
|
15
|
|
||
Cash flow hedges
|
39
|
|
|
1
|
|
||
Other Comprehensive Income (Loss), Net of Tax
|
82
|
|
|
(18
|
)
|
||
Comprehensive Income
|
$
|
359
|
|
|
$
|
581
|
|
|
Three Months Ended
December 31, |
||||||
|
2019
|
|
2018
|
||||
Operating Activities
|
|
|
|
||||
Net income
|
$
|
278
|
|
|
$
|
599
|
|
Adjustments to net income to derive net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
530
|
|
|
563
|
|
||
Share-based compensation
|
82
|
|
|
93
|
|
||
Deferred income taxes
|
(71
|
)
|
|
(28
|
)
|
||
Change in operating assets and liabilities
|
102
|
|
|
(473
|
)
|
||
Pension obligation
|
24
|
|
|
(225
|
)
|
||
Gain on sale of business
|
—
|
|
|
(335
|
)
|
||
Other, net
|
(231
|
)
|
|
52
|
|
||
Net Cash Provided by Operating Activities
|
713
|
|
|
245
|
|
||
Investing Activities
|
|
|
|
||||
Capital expenditures
|
(173
|
)
|
|
(167
|
)
|
||
Proceeds from divestitures, net
|
—
|
|
|
476
|
|
||
Other, net
|
(114
|
)
|
|
(9
|
)
|
||
Net Cash (Used for) Provided by Investing Activities
|
(287
|
)
|
|
299
|
|
||
Financing Activities
|
|
|
|
||||
Change in credit facility borrowings
|
210
|
|
|
50
|
|
||
Payments of debt and term loans
|
(303
|
)
|
|
(453
|
)
|
||
Dividends paid
|
(252
|
)
|
|
(245
|
)
|
||
Other, net
|
(68
|
)
|
|
(86
|
)
|
||
Net Cash Used for Financing Activities
|
(413
|
)
|
|
(734
|
)
|
||
Effect of exchange rate changes on cash and equivalents and restricted cash
|
6
|
|
|
(5
|
)
|
||
Net increase (decrease) in cash and equivalents and restricted cash
|
18
|
|
|
(195
|
)
|
||
Opening Cash and Equivalents and Restricted Cash
|
590
|
|
|
1,236
|
|
||
Closing Cash and Equivalents and Restricted Cash
|
$
|
609
|
|
|
$
|
1,042
|
|
|
Common
Stock Issued
at Par Value
|
|
Capital in
Excess of
Par Value
|
|
Retained
Earnings
|
|
Deferred
Compensation
|
|
Treasury Stock
|
|||||||||||||
(Millions of dollars)
|
Shares (in
thousands)
|
|
Amount
|
|||||||||||||||||||
Balance at September 30, 2019
|
$
|
347
|
|
|
$
|
16,270
|
|
|
$
|
12,913
|
|
|
$
|
23
|
|
|
(76,260
|
)
|
|
$
|
(6,190
|
)
|
Net income
|
—
|
|
|
—
|
|
|
278
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Common dividends ($0.79 per share)
|
—
|
|
|
—
|
|
|
(215
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Preferred dividends
|
—
|
|
|
—
|
|
|
(38
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Common stock issued for share-based compensation and other plans, net
|
—
|
|
|
(32
|
)
|
|
—
|
|
|
1
|
|
|
758
|
|
|
(38
|
)
|
|||||
Share-based compensation
|
—
|
|
|
82
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Common stock held in trusts, net (a)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12
|
)
|
|
—
|
|
|||||
Balance at December 31, 2019
|
$
|
347
|
|
|
$
|
16,320
|
|
|
$
|
12,938
|
|
|
$
|
24
|
|
|
(75,514
|
)
|
|
$
|
(6,228
|
)
|
|
Common
Stock Issued
at Par Value
|
|
Capital in
Excess of
Par Value
|
|
Retained
Earnings
|
|
Deferred
Compensation
|
|
Treasury Stock
|
|||||||||||||
(Millions of dollars)
|
Shares (in
thousands)
|
|
Amount
|
|||||||||||||||||||
Balance at September 30, 2018
|
$
|
347
|
|
|
$
|
16,179
|
|
|
$
|
12,596
|
|
|
$
|
22
|
|
|
(78,463
|
)
|
|
$
|
(6,243
|
)
|
Net income
|
—
|
|
|
—
|
|
|
599
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Common dividends ($0.77 per share)
|
—
|
|
|
—
|
|
|
(207
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Preferred dividends
|
—
|
|
|
—
|
|
|
(38
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Common stock issued for share-based compensation and other plans, net
|
—
|
|
|
(97
|
)
|
|
—
|
|
|
2
|
|
|
851
|
|
|
9
|
|
|||||
Share-based compensation
|
—
|
|
|
92
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Common stock held in trusts, net (a)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12
|
)
|
|
—
|
|
|||||
Effect of change in accounting principles
|
—
|
|
|
—
|
|
|
68
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Balance at December 31, 2018
|
$
|
347
|
|
|
$
|
16,174
|
|
|
$
|
13,018
|
|
|
$
|
24
|
|
|
(77,624
|
)
|
|
$
|
(6,235
|
)
|
(a)
|
Common stock held in trusts represents rabbi trusts in connection with deferred compensation under the Company’s employee salary and bonus deferral plan and directors’ deferral plan.
|
(Millions of dollars)
|
Total
|
|
Foreign Currency
Translation
|
|
Benefit Plans
|
|
Cash Flow Hedges
|
||||||||
Balance at September 30, 2019
|
$
|
(2,283
|
)
|
|
$
|
(1,256
|
)
|
|
$
|
(1,005
|
)
|
|
$
|
(23
|
)
|
Other comprehensive income before reclassifications, net of taxes
|
63
|
|
|
26
|
|
|
—
|
|
|
37
|
|
||||
Amounts reclassified into income, net of taxes
|
19
|
|
|
—
|
|
|
17
|
|
|
2
|
|
||||
Balance at December 31, 2019
|
$
|
(2,202
|
)
|
|
$
|
(1,230
|
)
|
|
$
|
(988
|
)
|
|
$
|
16
|
|
(Millions of dollars)
|
Total
|
|
Foreign Currency
Translation
|
|
Benefit Plans
|
|
Cash Flow Hedges
|
||||||||
Balance at September 30, 2018
|
$
|
(1,909
|
)
|
|
$
|
(1,162
|
)
|
|
$
|
(729
|
)
|
|
$
|
(17
|
)
|
Other comprehensive (loss) income before reclassifications, net of taxes
|
(32
|
)
|
|
(35
|
)
|
|
3
|
|
|
(1
|
)
|
||||
Amounts reclassified into income, net of taxes
|
14
|
|
|
—
|
|
|
13
|
|
|
1
|
|
||||
Balance at December 31, 2018
|
$
|
(1,927
|
)
|
|
$
|
(1,197
|
)
|
|
$
|
(714
|
)
|
|
$
|
(16
|
)
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31, |
||||
|
2019
|
|
2018
|
||
Average common shares outstanding
|
271,102
|
|
|
269,035
|
|
Dilutive share equivalents from share-based plans
|
3,850
|
|
|
5,221
|
|
Average common and common equivalent shares outstanding – assuming dilution
|
274,952
|
|
|
274,256
|
|
|
|
|
|
||
Share equivalents excluded from the diluted shares outstanding calculation because the result would have been antidilutive:
|
|
|
|
||
Mandatory convertible preferred stock
|
11,685
|
|
|
11,685
|
|
Organizational Unit
|
|
Principal Product Lines
|
Integrated Diagnostic Solutions
|
|
Integrated systems for specimen collection; safety-engineered blood collection products and systems; automated blood culturing and tuberculosis culturing systems; molecular testing systems for infectious diseases and women’s health; microorganism identification and drug susceptibility systems; liquid-based cytology systems for cervical cancer screening; rapid diagnostic assays for testing of respiratory infections; microbiology laboratory automation and plated media for clinical and industrial applications.
|
|
Three Months Ended December 31,
|
||||||||||||||||||||||
(Millions of dollars)
|
2019
|
|
2018
|
||||||||||||||||||||
|
United States
|
|
International
|
|
Total
|
|
United States
|
|
International
|
|
Total
|
||||||||||||
Medical
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Medication Delivery Solutions (a)
|
$
|
520
|
|
|
$
|
428
|
|
|
$
|
948
|
|
|
$
|
519
|
|
|
$
|
438
|
|
|
$
|
956
|
|
Medication Management Solutions (a)
|
462
|
|
|
113
|
|
|
575
|
|
|
508
|
|
|
118
|
|
|
625
|
|
||||||
Diabetes Care
|
139
|
|
|
129
|
|
|
268
|
|
|
145
|
|
|
129
|
|
|
274
|
|
||||||
Pharmaceutical Systems
|
84
|
|
|
215
|
|
|
299
|
|
|
68
|
|
|
212
|
|
|
280
|
|
||||||
Total segment revenues
|
$
|
1,204
|
|
|
$
|
886
|
|
|
$
|
2,090
|
|
|
$
|
1,239
|
|
|
$
|
896
|
|
|
$
|
2,135
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Life Sciences
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Integrated Diagnostic Solutions
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Preanalytical Systems
|
$
|
202
|
|
|
$
|
196
|
|
|
$
|
398
|
|
|
$
|
201
|
|
|
$
|
192
|
|
|
$
|
393
|
|
Diagnostic Systems
|
184
|
|
|
218
|
|
|
402
|
|
|
175
|
|
|
207
|
|
|
382
|
|
||||||
Total Integrated Diagnostic Solutions
|
386
|
|
|
414
|
|
|
800
|
|
|
376
|
|
|
399
|
|
|
774
|
|
||||||
Biosciences
|
152
|
|
|
171
|
|
|
323
|
|
|
108
|
|
|
173
|
|
|
281
|
|
||||||
Total segment revenues
|
$
|
538
|
|
|
$
|
585
|
|
|
$
|
1,123
|
|
|
$
|
484
|
|
|
$
|
572
|
|
|
$
|
1,056
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interventional
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Surgery (b)
|
$
|
256
|
|
|
$
|
70
|
|
|
$
|
326
|
|
|
$
|
246
|
|
|
$
|
64
|
|
|
$
|
310
|
|
Peripheral Intervention (b)
|
225
|
|
|
170
|
|
|
395
|
|
|
223
|
|
|
160
|
|
|
382
|
|
||||||
Urology and Critical Care (b)
|
206
|
|
|
85
|
|
|
291
|
|
|
195
|
|
|
83
|
|
|
277
|
|
||||||
Total segment revenues
|
$
|
688
|
|
|
$
|
325
|
|
|
$
|
1,012
|
|
|
$
|
664
|
|
|
$
|
306
|
|
|
$
|
970
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total Company revenues
|
$
|
2,430
|
|
|
$
|
1,795
|
|
|
$
|
4,225
|
|
|
$
|
2,387
|
|
|
$
|
1,773
|
|
|
$
|
4,160
|
|
(a)
|
Prior-period amounts reflect the reclassification of U.S. revenues of $2 million associated with the movement, effective on October 1, 2019, of certain products from the Medication Delivery Solutions unit to the Medication Management Solutions unit.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31, |
||||||
(Millions of dollars)
|
2019
|
|
2018
|
||||
Income Before Income Taxes
|
|
|
|
||||
Medical (a)
|
$
|
564
|
|
|
$
|
665
|
|
Life Sciences
|
361
|
|
|
305
|
|
||
Interventional
|
243
|
|
|
209
|
|
||
Total Segment Operating Income
|
1,167
|
|
|
1,180
|
|
||
Acquisitions and other restructurings
|
(86
|
)
|
|
(91
|
)
|
||
Net interest expense
|
(134
|
)
|
|
(183
|
)
|
||
Other unallocated items (b)
|
(553
|
)
|
|
(192
|
)
|
||
Total Income Before Income Taxes
|
$
|
394
|
|
|
$
|
714
|
|
(a)
|
The amount for the three months ended December 31, 2019 included the estimated cost of a product recall of $59 million which was recorded to Cost of products sold and is further discussed in Note 15.
|
(b)
|
Primarily comprised of foreign exchange, certain general and administrative expenses and share-based compensation expense. The amount for the three months ended December 31, 2018 included the pre-tax gain recognized on the Company's sale of its Advanced Bioprocessing business of approximately $335 million, which is further discussed in Note 9.
|
|
Three Months Ended
December 31, |
||||||
(Millions of dollars)
|
2019
|
|
2018
|
||||
Service cost
|
$
|
40
|
|
|
$
|
35
|
|
Interest cost
|
22
|
|
|
28
|
|
||
Expected return on plan assets
|
(49
|
)
|
|
(47
|
)
|
||
Amortization of prior service credit
|
(3
|
)
|
|
(3
|
)
|
||
Amortization of loss
|
25
|
|
|
20
|
|
||
Net pension cost
|
$
|
35
|
|
|
$
|
32
|
|
(Millions of dollars)
|
Employee
Termination
|
|
Other
|
|
Total
|
||||||||||||||||||
|
Bard
|
|
Other Initiatives
|
|
Bard (a)
|
|
Other Initiatives
|
|
Bard
|
|
Other Initiatives
|
||||||||||||
Balance at September 30, 2019
|
$
|
22
|
|
|
$
|
31
|
|
|
$
|
1
|
|
|
$
|
3
|
|
|
$
|
23
|
|
|
$
|
34
|
|
Charged to expense
|
4
|
|
|
2
|
|
|
13
|
|
|
4
|
|
|
17
|
|
|
6
|
|
||||||
Cash payments
|
(7
|
)
|
|
(12
|
)
|
|
(6
|
)
|
|
(4
|
)
|
|
(13
|
)
|
|
(16
|
)
|
||||||
Non-cash settlements
|
—
|
|
|
—
|
|
|
(7
|
)
|
|
—
|
|
|
(7
|
)
|
|
—
|
|
||||||
Balance at December 31, 2019
|
$
|
19
|
|
|
$
|
21
|
|
|
1
|
|
|
$
|
3
|
|
|
$
|
20
|
|
|
$
|
24
|
|
(a)
|
Largely represents the cost associated with certain pre-acquisition equity awards of Bard which, to encourage post-acquisition employee retention, were converted to BD equity awards with substantially the same terms and conditions as were applicable under such Bard awards immediately prior to the acquisition date.
|
|
December 31, 2019
|
|
September 30, 2019
|
||||||||||||
(Millions of dollars)
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
||||||||
Amortized intangible assets
|
|
|
|
|
|
|
|
||||||||
Developed technology
|
$
|
14,010
|
|
|
$
|
3,161
|
|
|
$
|
13,960
|
|
|
$
|
2,906
|
|
Customer relationships
|
4,610
|
|
|
1,265
|
|
|
4,608
|
|
|
1,183
|
|
||||
Product rights
|
115
|
|
|
65
|
|
|
110
|
|
|
60
|
|
||||
Trademarks
|
407
|
|
|
106
|
|
|
407
|
|
|
102
|
|
||||
Patents and other
|
488
|
|
|
311
|
|
|
445
|
|
|
305
|
|
||||
Amortized intangible assets
|
$
|
19,630
|
|
|
$
|
4,908
|
|
|
$
|
19,530
|
|
|
$
|
4,555
|
|
Unamortized intangible assets
|
|
|
|
|
|
|
|
||||||||
Acquired in-process research and development
|
$
|
1
|
|
|
|
|
$
|
1
|
|
|
|
||||
Trademarks
|
2
|
|
|
|
|
2
|
|
|
|
||||||
Unamortized intangible assets
|
$
|
3
|
|
|
|
|
$
|
3
|
|
|
|
(Millions of dollars)
|
Medical
|
|
Life Sciences
|
|
Interventional
|
|
Total
|
||||||||
Goodwill as of September 30, 2019
|
$
|
9,989
|
|
|
$
|
772
|
|
|
$
|
12,615
|
|
|
$
|
23,376
|
|
Acquisitions (a)
|
10
|
|
|
—
|
|
|
—
|
|
|
10
|
|
||||
Currency translation
|
17
|
|
|
2
|
|
|
30
|
|
|
49
|
|
||||
Goodwill as of December 31, 2019
|
$
|
10,016
|
|
|
$
|
774
|
|
|
$
|
12,645
|
|
|
$
|
23,435
|
|
(a)
|
Represents goodwill recognized relative to certain acquisitions which were not material individually or in the aggregate.
|
|
Three Months Ended
December 31, |
||||||
(Millions of dollars)
|
2019
|
|
2018
|
||||
Foreign currency-denominated debt
|
$
|
(34
|
)
|
|
$
|
59
|
|
Cross-currency swaps
|
$
|
(52
|
)
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Millions of dollars)
|
December 31, 2019
|
|
September 30, 2019
|
||||
Cash and equivalents
|
$
|
560
|
|
|
$
|
536
|
|
Restricted cash
|
49
|
|
|
54
|
|
||
Cash and equivalents and restricted cash
|
$
|
609
|
|
|
$
|
590
|
|
(Millions of dollars)
|
December 31, 2019
|
||
Right-use-assets recorded in Other Assets
|
$
|
426
|
|
Current lease liabilities recorded in Payables, accrued expenses and other current liabilities
|
$
|
105
|
|
Non-current lease liabilities recorded in Deferred Income Taxes and Other Liabilities
|
$
|
340
|
|
(Millions of dollars)
|
|
||
Remaining for 2020
|
$
|
86
|
|
2021
|
95
|
|
|
2022
|
74
|
|
|
2023
|
49
|
|
|
2024
|
33
|
|
|
Thereafter
|
158
|
|
|
Total payments due
|
494
|
|
|
Less: imputed interest
|
49
|
|
|
Total
|
$
|
445
|
|
•
|
Medical segment revenues in the first quarter reflected strong growth in the Pharmaceutical Systems unit.
|
•
|
Life Sciences segment revenues in the first quarter reflected growth in both of the segment's units, particularly in the Biosciences unit.
|
•
|
Interventional segment revenues in the first quarter reflected sales growth in all units.
|
|
Three months ended December 31,
|
|||||||||||||||
(Millions of dollars)
|
2019
|
|
2018
|
|
Total
Change
|
|
Estimated
FX
Impact
|
|
FXN Change
|
|||||||
Medication Delivery Solutions (a)
|
$
|
948
|
|
|
$
|
956
|
|
|
(0.9
|
)%
|
|
(1.1
|
)%
|
|
0.2
|
%
|
Medication Management Solutions (a)
|
575
|
|
|
625
|
|
|
(8.0
|
)%
|
|
(0.5
|
)%
|
|
(7.5
|
)%
|
||
Diabetes Care
|
268
|
|
|
274
|
|
|
(1.9
|
)%
|
|
(0.9
|
)%
|
|
(1.0
|
)%
|
||
Pharmaceutical Systems
|
299
|
|
|
280
|
|
|
6.8
|
%
|
|
(2.4
|
)%
|
|
9.2
|
%
|
||
Total Medical Revenues
|
$
|
2,090
|
|
|
$
|
2,135
|
|
|
(2.1
|
)%
|
|
(1.0
|
)%
|
|
(1.1
|
)%
|
(a)
|
The presentation of prior-period amounts reflects the reclassification of $2 million associated with the movement, effective on October 1, 2019, of certain products from the Medication Delivery Solutions unit to the Medication Management Solutions unit.
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended December 31,
|
||||||
(Millions of dollars)
|
2019
|
|
2018
|
||||
Medical segment operating income
|
$
|
564
|
|
|
$
|
665
|
|
|
|
|
|
||||
Segment operating income as % of Medical revenues
|
27.0
|
%
|
|
31.2
|
%
|
•
|
Gross profit margin was lower in the first quarter of 2020 as compared with the first quarter of 2019 primarily due to the recognition of the estimated cost of a product recall, as noted below, and pricing pressures. These unfavorable impacts were partially offset by lower manufacturing costs resulting from continuous improvement projects which enhanced the efficiency of our operations.
|
•
|
Selling and administrative expense as a percentage of revenues was relatively flat in the first quarter of 2020 compared with the first quarter of 2019.
|
•
|
Research and development expense as a percentage of revenues was relatively flat in the first quarter of 2020 compared with the first quarter of 2019.
|
|
Three months ended December 31,
|
|||||||||||||||
(Millions of dollars)
|
2019
|
|
2018
|
|
Total
Change
|
|
Estimated
FX
Impact
|
|
FXN Change
|
|||||||
Integrated Diagnostic Solutions (a)
|
|
|
|
|
|
|
|
|
|
|||||||
Preanalytical Systems
|
$
|
398
|
|
|
$
|
393
|
|
|
1.4
|
%
|
|
(1.1
|
)%
|
|
2.5
|
%
|
Diagnostic Systems
|
402
|
|
|
382
|
|
|
5.3
|
%
|
|
(0.9
|
)%
|
|
6.2
|
%
|
||
Total Integrated Diagnostic Solutions
|
800
|
|
|
774
|
|
|
3.3
|
%
|
|
(1.0
|
)%
|
|
4.3
|
%
|
||
Biosciences
|
323
|
|
|
281
|
|
|
14.8
|
%
|
|
(1.2
|
)%
|
|
16.0
|
%
|
||
Total Life Sciences Revenues
|
$
|
1,123
|
|
|
$
|
1,056
|
|
|
6.4
|
%
|
|
(1.0
|
)%
|
|
7.4
|
%
|
(a)
|
Effective October 1, 2019, the Preanalytical Systems and Diagnostic Systems units were joined to create the new Integrated Diagnostic Solutions unit. Additional disclosures regarding this change are provided in Note 7 in the Notes to Condensed Consolidated Financial Statements.
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended December 31,
|
||||||
(Millions of dollars)
|
2019
|
|
2018
|
||||
Life Sciences segment operating income
|
$
|
361
|
|
|
$
|
305
|
|
|
|
|
|
||||
Segment operating income as % of Life Sciences revenues
|
32.1
|
%
|
|
28.9
|
%
|
•
|
Gross margin in the first quarter of 2020 was higher as compared with the first quarter of 2019 which primarily reflected the impact of licensing revenues recognized by the Biosciences unit in the quarter, as noted above.
|
•
|
Selling and administrative expense as a percentage of revenues in the first quarter of 2020 was lower compared with the prior-year period primarily due to expense synergies realized from the combination of the Preanalytical Systems and Diagnostic Systems units, as noted above.
|
•
|
Research and development expense as a percentage of revenues was lower in the first quarter of 2020 compared with the first quarter of 2019 primarily due to the timing of project spending.
|
|
Three months ended December 31,
|
|||||||||||||||
(Millions of dollars)
|
2019
|
|
2018
|
|
Total
Change
|
|
Estimated
FX
Impact
|
|
FXN Change
|
|||||||
Surgery (a)
|
$
|
326
|
|
|
$
|
310
|
|
|
5.2
|
%
|
|
(0.4
|
)%
|
|
5.6
|
%
|
Peripheral Intervention (a)
|
395
|
|
|
382
|
|
|
3.4
|
%
|
|
(1.0
|
)%
|
|
4.4
|
%
|
||
Urology and Critical Care (a)
|
291
|
|
|
277
|
|
|
4.9
|
%
|
|
(0.1
|
)%
|
|
5.0
|
%
|
||
Total Interventional Revenues
|
$
|
1,012
|
|
|
$
|
970
|
|
|
4.4
|
%
|
|
(0.6
|
)%
|
|
5.0
|
%
|
(a)
|
The presentation of prior-period amounts reflects the total reclassifications of $45 million associated with the movement, effective on October 1, 2019, of certain products from the Surgery unit and the Urology and Critical Care unit to the Peripheral Intervention unit.
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended December 31,
|
||||||
(Millions of dollars)
|
2019
|
|
2018
|
||||
Interventional segment operating income
|
$
|
243
|
|
|
$
|
209
|
|
|
|
|
|
||||
Segment operating income as % of Interventional revenues
|
24.0
|
%
|
|
21.6
|
%
|
•
|
Gross profit margin was higher in the first quarter of 2020 as compared with the first quarter of 2019 primarily due to favorable product mix, which was partially offset by pricing pressures.
|
•
|
Selling and administrative expense as a percentage of revenues in the first quarter of 2020 was lower compared with the prior-year period.
|
•
|
Research and development expense as a percentage of revenues was lower in the first quarter of 2020 compared with the first quarter of 2019 primarily due to the timing of project spending.
|
|
Three months ended December 31,
|
|||||||||||||||
(Millions of dollars)
|
2019
|
|
2018
|
|
Total
Change |
|
Estimated
FX Impact |
|
FXN Change
|
|||||||
United States
|
$
|
2,430
|
|
|
$
|
2,387
|
|
|
1.8
|
%
|
|
—
|
%
|
|
1.8
|
%
|
International
|
1,795
|
|
|
1,773
|
|
|
1.2
|
%
|
|
(2.2
|
)%
|
|
3.4
|
%
|
||
Total Revenues
|
$
|
4,225
|
|
|
$
|
4,160
|
|
|
1.6
|
%
|
|
(0.9
|
)%
|
|
2.5
|
%
|
|
Three months ended December 31,
|
||||||
(Millions of dollars)
|
2019
|
|
2018
|
||||
Integration costs (a)
|
$
|
62
|
|
|
$
|
73
|
|
Restructuring costs (a)
|
23
|
|
|
41
|
|
||
Transaction costs
|
—
|
|
|
1
|
|
||
Purchase accounting adjustments (b)
|
348
|
|
|
379
|
|
||
Transaction gain/loss and product-related matters (c)
|
59
|
|
|
(335
|
)
|
||
European regulatory initiative-related costs (d)
|
17
|
|
|
5
|
|
||
Total specified items
|
511
|
|
|
163
|
|
||
Less: tax impact of specified items and tax reform (e)
|
22
|
|
|
(17
|
)
|
||
After-tax impact of specified items
|
$
|
489
|
|
|
$
|
180
|
|
(a)
|
Represents integration and restructuring costs which are primarily recorded in Acquisitions and other restructurings and are further discussed below.
|
(b)
|
Includes amortization and other adjustments related to the purchase accounting for acquisitions impacting identified intangible assets and valuation of fixed assets and debt. BD’s amortization expense is primarily recorded in Cost of products sold.
|
(c)
|
The current-year period amount represents the estimated cost of a product recall which was recorded by the Medical segment in Cost of products sold. The amount in the prior-year period represents the pre-tax gain recognized in Other operating income, net on BD's sale of its Advanced Bioprocessing business.
|
(d)
|
Represents initial costs required to develop processes and systems to comply with emerging regulations such as the European Union Medical Device Regulation ("EUMDR") and General Data Protection Regulation ("GDPR"). These costs were recorded in Cost of products sold and Research and development expense.
|
(e)
|
The amount in the three-month period of fiscal year 2019 included additional tax expense, net, of $51 million relating to new U.S. tax legislation, as further discussed below.
|
|
Three-month period
|
|
December 31, 2018 gross profit margin %
|
47.4
|
%
|
Impact of purchase accounting adjustments and other specified items
|
(0.8
|
)%
|
Operating performance
|
0.3
|
%
|
Foreign currency translation
|
(0.1
|
)%
|
December 31, 2019 gross profit margin %
|
46.8
|
%
|
|
Three months ended December 31,
|
|
Increase (decrease) in basis points
|
|||||||
|
2019
|
|
2018
|
|
||||||
(Millions of dollars)
|
|
|
|
|
|
|||||
Selling and administrative expense
|
$
|
1,121
|
|
|
$
|
1,073
|
|
|
|
|
% of revenues
|
26.5
|
%
|
|
25.8
|
%
|
|
70
|
|
||
|
|
|
|
|
|
|||||
Research and development expense
|
$
|
270
|
|
|
$
|
258
|
|
|
|
|
% of revenues
|
6.4
|
%
|
|
6.2
|
%
|
|
20
|
|
||
|
|
|
|
|
|
|||||
Acquisitions and other restructurings
|
$
|
86
|
|
|
$
|
91
|
|
|
|
|
|
|
|
|
|
|
|||||
Other operating income, net
|
$
|
—
|
|
|
$
|
(335
|
)
|
|
|
|
Three months ended December 31,
|
||||||
(Millions of dollars)
|
2019
|
|
2018
|
||||
Interest expense
|
$
|
(136
|
)
|
|
$
|
(171
|
)
|
Interest income, net
|
1
|
|
|
(12
|
)
|
||
Net interest expense
|
$
|
(134
|
)
|
|
$
|
(183
|
)
|
|
Three months ended December 31,
|
||||
|
2019
|
|
2018
|
||
Effective income tax rate
|
29.6
|
%
|
|
16.1
|
%
|
|
|
|
|
||
Impact, in basis points, from specified items and tax reform
|
1,430
|
|
|
490
|
|
|
Three months ended December 31,
|
||||||
|
2019
|
|
2018
|
||||
Net Income (Millions of dollars)
|
$
|
278
|
|
|
$
|
599
|
|
Diluted Earnings per Share
|
$
|
0.87
|
|
|
$
|
2.05
|
|
|
|
|
|
||||
Unfavorable impact-specified items
|
$
|
(1.78
|
)
|
|
$
|
(0.66
|
)
|
Unfavorable impact-foreign currency translation
|
$
|
(0.03
|
)
|
|
|
|
Three months ended December 31,
|
||||||
(Millions of dollars)
|
2019
|
|
2018
|
||||
Net cash provided by (used for)
|
|
|
|
||||
Operating activities
|
$
|
713
|
|
|
$
|
245
|
|
Investing activities
|
$
|
(287
|
)
|
|
$
|
299
|
|
Financing activities
|
$
|
(413
|
)
|
|
$
|
(734
|
)
|
|
Three months ended December 31,
|
||||||
(Millions of dollars)
|
2019
|
|
2018
|
||||
Cash inflow (outflow)
|
|
|
|
||||
Change in credit facility borrowings
|
$
|
210
|
|
|
$
|
50
|
|
Payments of debt and term loans
|
$
|
(303
|
)
|
|
$
|
(453
|
)
|
Dividends paid
|
$
|
(252
|
)
|
|
$
|
(245
|
)
|
(Millions of dollars)
|
December 31, 2019
|
|
September 30, 2019
|
||||
Total debt
|
$
|
19,405
|
|
|
$
|
19,390
|
|
|
|
|
|
||||
Short-term debt as a percentage of total debt
|
12.7
|
%
|
|
6.8
|
%
|
||
Weighted average cost of total debt
|
2.8
|
%
|
|
2.9
|
%
|
||
Total debt as a percentage of total capital*
|
45.5
|
%
|
|
45.6
|
%
|
•
|
We are required to maintain an interest expense coverage ratio of not less than 4-to-1 as of the last day of each fiscal quarter.
|
•
|
We are required to have a leverage coverage ratio of no more than:
|
◦
|
6-to-1 from the closing date of the Bard acquisition until and including the first fiscal quarter-end thereafter;
|
◦
|
5.75-to-1 for the subsequent four fiscal quarters thereafter;
|
◦
|
5.25-to-1 for the subsequent four fiscal quarters thereafter;
|
◦
|
4.5-to-1 for the subsequent four fiscal quarters thereafter;
|
◦
|
4-to-1 for the subsequent four fiscal quarters thereafter;
|
◦
|
3.75-to-1 thereafter.
|
•
|
Weakness in the global economy and financial markets, which could increase the cost of operating our business, weaken demand for our products and services, negatively impact the prices we can charge for our products and services, or impair our ability to produce our products.
|
•
|
Competitive factors that could adversely affect our operations, including new product introductions and technologies (for example, new forms of drug delivery) by our current or future competitors, consolidation or strategic alliances among healthcare companies, distributors and/or payers of healthcare to improve their competitive position or develop new models for the delivery of healthcare, increased pricing pressure due to the impact of low-cost manufacturers, patents attained by competitors (particularly as patents on our products expire), new entrants into our markets and changes in the practice of medicine.
|
•
|
Risks relating to our acquisition of Bard, including our ability to successfully combine and integrate the Bard operations in order to obtain the anticipated benefits and costs savings from the transaction, and the significant additional indebtedness we incurred in connection with the financing of the acquisition and the impact it may have on our ability to operate the combined company.
|
•
|
The adverse financial impact resulting from unfavorable changes in foreign currency exchange rates.
|
•
|
Regional, national and foreign economic factors, including inflation, deflation, and fluctuations in interest rates, and their potential effect on our operating performance.
|
•
|
Our ability to achieve our projected level or mix of product sales, as our earnings forecasts are based on projected sales volumes and pricing of many product types, some of which are more profitable than others.
|
•
|
Changes in reimbursement practices of governments or third-party payers, or adverse decisions relating to our products by such payers, which could reduce demand for our products or the price we can charge for such products.
|
•
|
Cost containment efforts in the U.S. or in other countries in which we do business, including alternative payment reform and increased use of competitive bidding and tenders.
|
•
|
Changes in the domestic and foreign healthcare industry or in medical practices that result in a reduction in procedures using our products or increased pricing pressures, including the continued consolidation among healthcare providers.
|
•
|
The impact of changes in U.S. federal laws and policy that could affect fiscal and tax policies, healthcare, and international trade, including import and export regulation and international trade agreements. In particular, tariffs or other trade barriers imposed by the U.S. could adversely impact our supply chain costs or otherwise adversely impact our results of operations.
|
•
|
Increases in operating costs, including fluctuations in the cost and availability of oil-based resins and other raw materials, as well as certain components, used in our products, the ability to maintain favorable supplier arrangements and relationships (particularly with respect to sole-source suppliers), and the potential adverse effects of any disruption in the availability of such items.
|
•
|
Security breaches of our information technology systems or our products, which could impair our ability to conduct business, result in the loss of BD trade secrets or otherwise compromise sensitive information of BD or its customers, suppliers and other business partners, or of customers' patients, or result in product efficacy or safety concerns for certain of our products, and result in actions by regulatory bodies or civil litigation.
|
•
|
Difficulties inherent in product development, including the potential inability to successfully continue technological innovation, successfully complete clinical trials, obtain regulatory approvals in the United States and abroad, obtain intellectual property protection for our products, obtain coverage and adequate reimbursement for new products, or gain and maintain market approval of products, as well as the possibility of infringement claims by competitors with respect to patents or other intellectual property rights, all of which can preclude or delay commercialization of a product. Delays in obtaining necessary approvals or clearances from United States Food and Drug Administration (“FDA”) or other regulatory agencies or changes in the regulatory process may also delay product launches and increase development costs.
|
•
|
The impact of business combinations or divestitures, including any volatility in earnings relating to acquisition-related costs, and our ability to successfully integrate any business we may acquire.
|
•
|
Our ability to penetrate or expand our operations in emerging markets, which depends on local economic and political conditions, and how well we are able to make necessary infrastructure enhancements to production facilities and distribution networks.
|
•
|
Conditions in international markets, including social and political conditions, civil unrest, terrorist activity, governmental changes, restrictions on the ability to transfer capital across borders, tariffs and other protectionist measures, difficulties in protecting and enforcing our intellectual property rights and governmental expropriation of assets. This includes the possible impact of the United Kingdom's exit from the European Union ("EU"), which has created uncertainties affecting our business operations in the United Kingdom and the EU, and possibly other countries. Our international operations also increase our compliance risks, including risks under the Foreign Corrupt Practices Act and other anti-corruption laws, as well as regulatory and privacy laws.
|
•
|
Deficit reduction efforts or other actions that reduce the availability of government funding for healthcare and research, which could weaken demand for our products and result in additional pricing pressures, as well as create potential collection risks associated with such sales.
|
•
|
Fluctuations in university or U.S. and international governmental funding and policies for life sciences research.
|
•
|
Fluctuations in the demand for products we sell to pharmaceutical companies that are used to manufacture, or are sold with, the products of such companies, as a result of funding constraints, consolidation or otherwise.
|
•
|
The effects of weather, regulatory or other events that adversely impact our supply chain, including our ability to manufacture our products (particularly where production of a product line or sterilization operations are concentrated in one or more plants), source materials or components or services from suppliers (including sole-source suppliers) that are needed for such manufacturing (including sterilization), or provide products to our customers, including events that impact key distributors.
|
•
|
Natural disasters (including pandemics), war, terrorism, labor disruptions and international conflicts that could cause significant economic disruption and political and social instability, resulting in decreased demand for our products, adversely affect our manufacturing and distribution capabilities, or cause interruptions in our supply chain. Recently, a strain of coronavirus was reported in China and the virus has begun to spread to other countries. While we believe this situation will have some negative impact on our near-term financial results as a result of deferred medical procedures, the longer-term impact is difficult to assess or predict at this time.
|
•
|
Pending and potential future litigation or other proceedings asserting, and/or subpoenas seeking information with respect to, alleged violations of law (including in connection with federal and/or state healthcare programs (such as Medicare or Medicaid) and/or sales and marketing practices (such as investigative subpoenas and the civil investigative demands received by BD and Bard)), antitrust claims, product liability (which may involve lawsuits seeking class action status or seeking to establish multi-district litigation proceedings, including claims relating to our hernia repair implant products, surgical continence products for women and vena cava filter products), claims with respect to environmental matters, and patent infringement, and the availability or collectability of insurance relating to any such claims.
|
•
|
New or changing laws and regulations affecting our domestic and foreign operations, or changes in enforcement practices, including laws relating to trade, monetary and fiscal policies, taxation (including tax reforms that could adversely impact multinational corporations), sales practices, environmental protection, price controls, and licensing and regulatory requirements for new products and products in the postmarketing phase. In particular, the U.S. and other countries may impose new requirements regarding registration, labeling or prohibited materials that may require us to
|
•
|
Product efficacy or safety concerns regarding our products resulting in product holds or recalls, regulatory action on the part of the FDA or foreign counterparts (including restrictions on future product clearances and civil penalties), declining sales and product liability claims, and damage to our reputation. As a result of the CareFusion acquisition, we are operating under a consent decree with the FDA relating to our U.S. infusion pump business. The consent decree authorizes the FDA, in the event of any violations in the future, to order us to cease manufacturing and distributing products, recall products or take other actions, and we may be required to pay significant monetary damages if we fail to comply with any provision of the consent decree. Also, in 2019, the FDA letter to healthcare professionals regarding the use of paclitaxel-coated devices in the treatment of peripheral artery disease resulted in decreased sales of BD’s drug-coated balloons. While we have changed the labeling on our products as required by the FDA and continue to work with the FDA on patient data, the extent and duration of the impact from the FDA letter, and the likelihood of FDA approval of new drug-coated devices, is difficult to predict.
|
•
|
The effect of adverse media exposure or other publicity regarding BD’s business or operations, including the effect on BD’s reputation or demand for its products.
|
•
|
The effect of market fluctuations on the value of assets in BD’s pension plans and on actuarial interest rate and asset return assumptions, which could require BD to make additional contributions to the plans or increase our pension plan expense.
|
•
|
Our ability to obtain the anticipated benefits of restructuring programs, if any, that we may undertake.
|
•
|
Issuance of new or revised accounting standards by the Financial Accounting Standards Board or the Securities and Exchange Commission.
|
For the three months ended December 31, 2019
|
|
Total Number of
Shares Purchased (1)
|
|
Average Price
Paid per
Share
|
|
Total Number of
Shares Purchased
as Part of
Publicly
Announced Plans
or Programs
|
|
Maximum Number
of Shares that May
Yet Be Purchased
Under the Plans or
Programs (2)
|
|||||
October 1 – 31, 2019
|
|
1,299
|
|
|
$
|
247.52
|
|
|
—
|
|
|
7,857,742
|
|
November 1 – 30, 2019
|
|
208
|
|
|
244.02
|
|
|
—
|
|
|
7,857,742
|
|
|
December 1 – 31, 2019
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,857,742
|
|
|
Total
|
|
1,507
|
|
|
$
|
247.04
|
|
|
—
|
|
|
7,857,742
|
|
(1)
|
Consists of 1,507 shares purchased during the quarter in open market transactions by the trust relating to BD’s Deferred Compensation and Retirement Benefit Restoration Plan and 1996 Directors’ Deferral Plan.
|
(2)
|
Represents shares available under a repurchase program authorized by the Board of Directors on September 24, 2013 for 10 million shares, for which there is no expiration date.
|
10(a)
|
|
2004 Employee and Director Equity-Based Compensation Plan, as amended and restated as of January 28, 2020 (incorporated by reference to Exhibit 10.1 of the registrant's Current Report on Form 8-K filed on January 31, 2020).
|
|
|
|
10(b)
|
|
French Addendum to the 2004 Employee and Director Equity-Based Compensation Plan dated January 21, 2019 (incorporated by reference to Exhibit 10.2 of the registrant's Current Report on Form 8-K filed on January 31, 2020).
|
|
|
|
|
Terms of Awards under 2004 Employee and Director Equity-Based Compensation Plan.
|
|
|
|
|
|
Certifications of Chief Executive Officer and Chief Financial Officer, pursuant to SEC Rule 13a - 14(a).
|
|
|
|
|
|
Certifications of Chief Executive Officer and Chief Financial Officer, pursuant to Rule 13a - 14(b) and Section 1350 of Chapter 63 of Title 18 of the U.S. Code.
|
|
|
|
|
101
|
|
The following materials from this report, formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Income, (iii) the Condensed Consolidated Statements of Comprehensive Income, (iv) the Condensed Consolidated Statements of Cash Flows, and (v) Notes to Condensed Consolidated Financial Statements.
|
|
|
|
104
|
|
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
|
|
Becton, Dickinson and Company
|
|
(Registrant)
|
|
/s/ Christopher Reidy
|
|
Christopher Reidy
|
|
Executive Vice President, Chief Financial Officer and Chief Administrative Officer
|
|
(Principal Financial Officer)
|
|
|
|
/s/ Thomas J. Spoerel
|
|
Thomas J. Spoerel
|
|
Vice President, Controller and Chief Accounting Officer
|
|
(Principal Accounting Officer)
|
(a)
|
Vesting Period: Ratably over four (4) years, with twenty-five percent (25%) becoming exercisable on each of the first, second, third and fourth anniversary of the grant date, except as provided in the Plan.
|
(b)
|
Term: Ten (10) years from grant date.
|
(c)
|
Exercise Price: Fair market value of BD common stock on grant date.
|
(d)
|
Settlement: Upon exercise, the holder receives shares of BD common stock equal in value to the difference between the BD common stock price at the time of exercise and the exercise price.
|
(e)
|
Termination of Employment. Upon death, Disability or Retirement, all unvested SARs become fully exercisable for their remaining term. Upon termination due to involuntary termination without Cause, SARs may be exercised for three months following termination, but only to the extent vested at the time of termination. Upon voluntary termination or termination with Cause, unexercised SARs are forfeited.
|
(a)
|
Vesting Period: Third anniversary of grant date.
|
(b)
|
Settlement: Performance Units are settled in shares of BD common stock. Performance Unit awards are given a share target. A formula determines the actual number of shares that will be issued upon vesting, based on BD’s performance against pre-established performance targets over the performance period.
|
(c)
|
Performance Period: Three consecutive fiscal years, beginning with the fiscal year in which the award is granted.
|
(d)
|
Performance Measures: Consist of BD’s (1) average annual return on invested capital and (2) average annual revenue growth, each weighted 50%. Payouts are adjusted, subject to certain limits, based on BD’s relative total shareholder return compared to select peer companies during the performance period. Payouts may range from zero to 200% of award target.
|
(e)
|
Dividend Equivalent Rights: Dividends do not accrue on Performance Units.
|
(f)
|
Termination of Employment: Upon death or 409A Disability, grantee vests in a pro rata amount of the award’s share target. Upon Disability (other than a 409A Disability), Retirement or involuntary termination without Cause, grantee vests in a pro rata amount of the shares that would have been distributable under the award based on the payout formula had the grantee remained employed with BD through the vesting period, with shares being distributed after the end of the applicable vesting period. Upon voluntary termination or termination with Cause, unvested awards are forfeited.
|
(a)
|
Vesting Period: Awards vest ratably over three (3) years, with one-third becoming vested on each of the first, second, and third anniversary of the grant date.
|
(b)
|
Settlement: Each TVU entitles the grantee to one share of BD common stock upon vesting.
|
(c)
|
Dividend Equivalent Rights: Dividends do not accrue on TVUs.
|
(d)
|
Termination of Employment: Upon Retirement, death or Disability, TVUs vest in full. Upon voluntary or involuntary termination, unvested TVUs are forfeited.
|
(a)
|
Vesting Period: Third anniversary of grant date.
|
(b)
|
Settlement: Each P-TVU entitles the grantee to one share of BD common stock upon vesting, subject to satisfaction of performance target over the performance period.
|
(c)
|
Performance Period: Three consecutive fiscal years, beginning with the fiscal year in which the award is granted.
|
(d)
|
Performance Measure: Average annual growth in adjusted earnings per share (diluted earnings per share less acquisition-related purchase accounting adjustments and finance, integration, restructuring and transaction costs).
|
(e)
|
Dividend Equivalent Rights: Dividends do not accrue on P-TVUs.
|
(d)
|
Termination of Employment: Upon Retirement, death or Disability, P-TVUs vest in full. Upon voluntary or involuntary termination, unvested P-TVUs are forfeited.
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Becton, Dickinson and Company;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
|
|
/s/ Thomas E. Polen
|
|
Thomas E. Polen
|
|
Chief Executive Officer and President
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Becton, Dickinson and Company;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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/s/ Christopher Reidy
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Christopher Reidy
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Executive Vice President, Chief Financial Officer and Chief Administrative Officer
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1.
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such Report fully complies with the requirements of Section 13(a) of the Exchange Act; and
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2.
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the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Becton, Dickinson and Company.
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/s/ Thomas E. Polen
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Name: Thomas E. Polen
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Chief Executive Officer
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1.
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such Report fully complies with the requirements of Section 13(a) of the Exchange Act; and
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2.
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the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Becton, Dickinson and Company.
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/s/ Christopher Reidy
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Name: Christopher Reidy
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Chief Financial Officer
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