BECTON DICKINSON & CO

Previous wording

Our BD 2025 strategy for growth is anchored in three pillars: grow, simplify and empower. As we execute this strategy, we continue to invest in research and development, strategic tuck-in acquisitions, geographic expansion, and new product programs to drive further revenue and profit growth. Our ability to sustain our long-term growth will depend on a number of factors, including our ability to expand our core business (including strategic geographical expansion), and develop innovative new products, as well as continue to improve operating efficiency and organizational effectiveness.

Current wording

Our BD 2025 strategy for growth is anchored in three pillars: grow, simplify and empower. As we continue to execute this strategy, we have invested in research and development, strategic tuck-in acquisitions, geographic expansion, and new product programs to drive further revenue and profit growth. Our ability to sustain our long-term growth will depend on a number of factors, including our ability to expand our core business, and develop innovative new products, as well as continue to improve operating efficiency and organizational effectiveness. Our operations, supply chain, suppliers and customers are exposed to various global macroeconomic factors and other risks which we continually evaluate to assess their potential impact to our operations and financial results.

Previous wording

•As anticipated, market dynamics in China, such as volume-based procurement programs (“VoBP”) and the government’s focus to improve compliance of healthcare practitioners, had an adverse impact on our results of operations and these dynamics could continue to unfavorably impact our results of operations.

Current wording

We have been experiencing, and may continue to experience, some adverse impact to our results of operations due to market dynamics in China, such as volume-based procurement programs (“VoBP”) and the government’s focus to improve compliance of healthcare practitioners. Also, reductions or delays in governmental research funding and/or higher interest rates could cause customers for our instruments and reagents to delay or forgo purchases of these products. The future demand for our products and services could also be impacted by deterioration in healthcare systems’ budgets and/or staffing levels.

Previous wording

We have experienced, and may continue to experience, temporary shortages in supply of certain materials or components that are used in our products. The stable flow of global transport is critical to our operations and as such, events affecting the flow of logistics around the globe may adversely impact our supply chain and distribution channels. In general, major disruptions in the sourcing, manufacturing and distribution of our products could adversely impact our results of operations.

Current wording

Additionally, we have experienced, and may continue to experience, temporary shortages in supply of certain materials or components that are used in our products. The stable flow of global transport is critical to our operations and as such, events affecting the flow of logistics around the globe may adversely impact our supply chain and distribution channels. In general, major disruptions in the sourcing, manufacturing and distribution of our products could adversely impact our results of operations. Also, tariffs, sanctions or other trade barriers imposed by the United States, including those relating to China, Mexico or other countries and regions in which we do business, could adversely impact our supply chain costs and our results of operations. The ultimate impact of any new tariffs is subject to a number of factors including the effective date and duration of such tariffs, changes in the amount, scope and nature of the tariffs in the future, any countermeasures that the target countries may take and any mitigating actions that may become available.

Previous wording

We have been mitigating the impacts of the macroeconomic and other factors discussed above through various strategies which leverage our procurement, logistics and manufacturing capabilities. However, there can be no assurance that we will be able to effectively mitigate these pressures in future periods and an inability to offset these pressures through our strategies, at least in part, could adversely impact our results of operations. Due to the significant uncertainty that exists relative to the duration and overall impact of the macroeconomic and other factors discussed above, our future operating performance, particularly in the short-term, may be subject to volatility. The impacts of macroeconomic and other conditions on our business, results of operations, financial condition and cash flows are dependent on certain factors, including those discussed in Part I, Item 1A. Risk Factors of our 2023 Annual Report on Form 10-K (the “2023 Annual Report”).

Current wording

For additional information on risk factors that may impact our business, results of operations, financial condition and cash flows, see Part II, Item 1A. Risk Factors of this Quarterly Report on Form 10-Q and Part I, Item 1A. Risk Factors of our 2024 Annual Report on Form 10-K (the “2024 Annual Report”).

Previous wording

For the three months ended June 30, 2024, worldwide revenues of $4.990 billion increased 2.3% from the prior-year period. This increase reflected the following impacts:

Current wording

For the three months ended December 31, 2024, worldwide revenues of $5.168 billion increased 9.8% from the prior-year period. This increase reflected the following impacts:

Previous wording

Cash flows from continuing operating activities were $2.666 billion in the first nine months of fiscal year 2024. At June 30, 2024, we had $5.338 billion in cash and equivalents and short-term investments, including restricted cash. This balance included net proceeds from debt issued in our third quarter of fiscal year 2024 to fund the cash consideration payable upon our acquisition of Critical Care, as further discussed above and in Note 9 in the Notes to Condensed Consolidated Financial Statements. We continued to return value to our shareholders in the form of dividends. During the first nine months of fiscal year 2024, we paid cash dividends to common shareholders of $825 million.

Current wording

Cash flows from continuing operating activities were $693 million in the first three months of fiscal year 2025. At December 31, 2024, we had $830 million in cash and equivalents and short-term investments, including restricted cash. We continued to return value to our shareholders in the form of dividends. During the first three months of fiscal year 2025, we paid cash dividends to common shareholders of $302 million.

Previous wording

Each reporting period, we face currency exposure that arises from translating the results of our worldwide operations to the U.S. dollar at exchange rates that fluctuate from the beginning of such period. The third quarter fiscal year 2024 impact of foreign currency translation on our revenues is provided above and the impact on our earnings is provided further below. We evaluate our results of operations on both a reported and a foreign currency-neutral basis, which excludes the impact of fluctuations in foreign currency exchange rates. As exchange rates are an important factor in understanding period-to-period comparisons, we believe the presentation of results on a foreign currency-neutral basis in addition to reported results helps improve investors’ ability to understand our operating results and evaluate our performance in comparison to prior periods. Foreign currency-neutral ("FXN") information compares results between periods as if exchange rates had remained constant period-over-period. We use results on a foreign currency-neutral basis as one measure to evaluate our performance. We calculate foreign currency-neutral percentages by converting our current-period local currency financial results using the prior-period foreign currency exchange rates and comparing these adjusted amounts to our current-period results. These results should be considered in addition to, not as a substitute for, results reported in accordance with U.S. generally accepted accounting principles ("GAAP"). Results on a foreign currency-neutral basis, as we present them, may not be comparable to similarly titled measures used by other companies and are not measures of performance presented in accordance with U.S. GAAP.

Current wording

Each reporting period and given our worldwide operations, we face exposure to our results of operations from changes in foreign currencies. We calculate translational foreign currency impacts by converting our current-period local currency financial results using the prior-period foreign currency exchange rates and comparing these adjusted amounts to our current-period results, which allows us to compare results between periods as if exchange rates had remained constant period-over-period. The first quarter fiscal year 2025 impact of foreign currency on our revenues, which is primarily translational, is provided above. The translational impact on our earnings is provided further below. We evaluate our results of operations on both a reported and a foreign currency-neutral basis. As exchange rates are an important factor in understanding period-to-period comparisons, we believe the presentation of results on a foreign currency-neutral basis, excluding translational foreign currency impacts, in addition to reported results helps improve investors’ ability to understand our operating results and evaluate our performance in comparison to prior periods. We use results on a foreign currency-neutral basis as one measure to evaluate our performance. These results should be considered in addition to, not as a substitute for, results reported in accordance with U.S. generally accepted accounting principles ("GAAP"). Results on a foreign currency-neutral basis, as we present them, may not be comparable to similarly titled measures used by other companies and are not measures of performance presented in accordance with U.S. GAAP.

Previous wording

The following summarizes third quarter Medical revenues by organizational unit:

Current wording

The following summarizes first quarter Medical revenues by organizational unit:

Previous wording

•Strong global demand for the Medication Delivery Solutions unit’s Vascular Access Management portfolio, as well as strong U.S. demand for hypodermic products, partially offset by the impact of unfavorable market dynamics in China.

Current wording

•Volume growth and share gains attributable to the Medication Delivery Solutions unit’s Vascular Access Management portfolio, as well as strong sales of the unit’s hypodermic products.

Previous wording

•Double-digit growth in sales of infusion systems, as well as higher utilization of infusion sets within the Medication Management Solutions unit, partially offset by an unfavorable comparison to placements of dispensing solutions in the prior-year period.

Current wording

•Growth in the Medication Management Solutions unit driven by double-digit growth in sales of infusion systems, partially offset by an unfavorable comparison to dispensing and pharmacy automation installations in the prior-year period.

Previous wording

The following summarizes third quarter Life Sciences revenues by organizational unit:

Current wording

The following summarizes first quarter Life Sciences revenues by organizational unit:

Previous wording

•Higher gross profit margin in the third quarter of 2024 compared with the third quarter of 2023 primarily reflected lower manufacturing costs resulting from continuous improvement projects and other productivity initiatives, as well as favorable product mix, partially offset by unfavorable foreign currency translation.

Current wording

•Higher gross profit margin in the first quarter of 2025 compared with the first quarter of 2024 primarily reflected lower manufacturing costs resulting from continuous improvement projects and other productivity initiatives.

Previous wording

The following summarizes third quarter Interventional revenues by organizational unit:

Current wording

The following summarizes first quarter Interventional revenues by organizational unit:

Previous wording

•Double-digit growth attributable to the Peripheral Intervention unit’s peripheral vascular disease platform, partially offset by a decline in sales of our oncology products in China.

Current wording

•Strong growth in sales of the Peripheral Intervention unit’s peripheral vascular disease and end-stage kidney disease platforms, partially offset by a decline in sales of our oncology products due to an expected VoBP impact in China.

Previous wording

•Double-digit growth in sales of the Urology and Critical Care unit’s PureWick TMofferings.

Current wording

•Continued double-digit growth in sales of the Urology and Critical Care unit’s PureWick TMofferings.

Previous wording

•Lower research and development expense as a percentage of revenues in the third quarter of 2024 compared with the third quarter of 2023, which primarily reflected the timing of project spending.

Current wording

•Research and development expense as a percentage of revenues in the first quarter of 2025 was flat compared with the first quarter of 2024 which primarily reflected the timing of project spending.

Previous wording

BD’s worldwide third quarter revenues by geography were as follows:

Current wording

BD’s worldwide first quarter revenues by geography were as follows:

Previous wording

U.S. revenue growth in the third quarter of 2024 reflected strong sales in the Medical segment’s Medication Delivery Solutions and Medication Management Solutions units, as well as in the Interventional segment’s Urology and Critical Care unit. This growth was partially offset by a decline in the Medical segment’s Pharmaceutical Systems unit, as further discussed above.

Current wording

U.S. revenue growth in the first quarter of 2025 reflected strong sales in the Medical segment’s Medication Delivery Solutions and Medication Management Solutions units, as well as solid growth across all of the Interventional segment’s units. Overall U.S. revenue growth also reflected the acquired Advanced Patient Monitoring unit’s sales. U.S. revenue growth in the first quarter of 2025 was partially offset by a decline in the Medical segment’s Pharmaceutical Systems unit, as further discussed above.

Previous wording

International revenue growth in the third quarter of 2024 was driven by the Medical segment’s Pharmaceutical Systems unit, as well as by strong sales in the Life Sciences segment’s Integrated Diagnostic Solutions unit. International revenue growth in the third quarter of 2024 also reflected the recognition of a $62 million accrual which resulted from recent developments relating to the Italian government medical device pay back legislation and substantially relates to years prior to the current fiscal year. Current-period revenues in emerging markets primarily reflected a decline in China driven by unfavorable market dynamics, as further discussed above, partially offset by strong sales in other countries within Greater Asia:

Current wording

International revenue growth in the first quarter of 2025 was primarily driven by the Medical segment’s Medication Delivery Solutions unit. Overall international revenue growth in the first quarter of 2025 also reflected the acquired Advanced Patient Monitoring unit’s sales. International revenue growth in the first quarter of 2025 was partially offset by a decline in the Life Sciences segment’s Biosciences unit, as further discussed above. Current-period revenues in emerging markets primarily reflected strong sales in certain countries within Greater Asia, as well as in EMA, partially offset by a decline in China driven by unfavorable market dynamics, as further discussed above:

Previous wording

Reflected in the financial results for the three and nine-month periods of fiscal years 2024 and 2023 were the following specified items:

Current wording

Reflected in the financial results for the three-month periods of fiscal years 2025 and 2024 were the following specified items:

Previous wording

(b)Represents transaction costs, which are recorded in Integration, restructuring and transaction expense, and financing impacts, which are recorded in Interest income and Interest expense, associated with the agreement to acquire Critical Care.

Current wording

(b)Represents transaction costs, which are recorded in Integration, restructuring and transaction expense associated with the Advanced Patient Monitoring acquisition.

Previous wording

(c)Represents costs recorded to Other operating expense (income), net and incurred in connection with the separation of BD's former Diabetes Care business.

Current wording

(c)Represents costs recorded to Other operating expense, net and incurred in connection with the separation of BD's former Diabetes Care business.

Previous wording

(d)Includes amortization and other adjustments related to the purchase accounting for acquisitions. BD’s amortization expense is recorded in Cost of products sold.

Current wording

(d)Includes amortization and other adjustments related to the purchase accounting for acquisitions. BD’s amortization expense is recorded in Cost of products sold. The amount in the three-month period of 2025 includes $180 million due to a fair value step-up adjustment relating to Advanced Patient Monitoring's inventory on the acquisition date.

Previous wording

(f)Includes certain (income) expense items which are not part of ordinary operations and affect the comparability of the periods presented. Such items may include certain product remediation costs, certain legal matters, certain investment gains and losses, certain asset impairment charges, and certain pension settlement costs. The amounts in the three and nine-month periods of 2024 were primarily recorded to Revenues and Other operating expense (income), net, and largely related to legislative and legal matters, as further discussed above in our geographic revenue discussion, as well as in Notes 5 and 7 in the Notes to Condensed Consolidated Financial Statements. The amounts in the three and nine-month periods of 2023 included a charge to Cost of products sold of $90 million to adjust the estimate of future product remediation costs.

Current wording

(f)Includes certain (income) expense items which are not part of ordinary operations and affect the comparability of the periods presented. Such items may include certain product remediation costs, certain legal matters, certain investment gains and losses, certain asset impairment charges, and certain pension settlement costs. The amount in the three-month period of 2025 included a charge within Cost of products sold of $22 million to adjust future costs estimated for product remediation efforts, as well as a non-cash $30 million charge recorded within Research and development expense to write down certain assets in the Life Sciences segment. The amount additionally included charges of approximately $29 million which were recorded to Other operating expense, net, and related to various legal matters. Additional disclosures regarding legislative and legal matters are provided in Note 5 in the Notes to Condensed Consolidated Financial Statements.

Previous wording

The comparison of gross profit margin for the three and nine-month periods of fiscal years 2024 and 2023 reflected the following impacts:

Current wording

The comparison of gross profit margin for the three-month periods of fiscal years 2025 and 2024 reflected the following impacts:

Previous wording

The favorable impact on gross margin for the three and nine-month periods of 2024 from specified items reflected a favorable comparison to specified items recorded in the prior-year period, which included a $90 million charge recorded in the Medical segment to adjust the estimate of future product remediation costs.

Current wording

The unfavorable impact on gross margin for the three-month period of 2025 from specified items reflects amortization of intangibles attributable to the Advanced Patient Monitoring acquisition and an impact of $180 million resulting from a fair value step-up adjustment relating to Advanced Patient Monitoring's inventory on the acquisition date. The impact from specified items in the current-year period also included a $22 million charge recorded in the Medical segment to adjust the estimate of future product remediation costs, as further discussed in Note 5 in the Notes to Condensed Consolidated Financial Statements.

Previous wording

Operating performance in the three-month period of 2024 compared with the prior-year period primarily reflected lower manufacturing costs resulting from our ongoing continuous improvement projects and other productivity initiatives, partially offset by higher raw material and labor costs.

Current wording

Operating performance in the three-month period of 2025 compared with the prior-year period primarily reflected lower manufacturing costs resulting from our ongoing continuous improvement projects and other productivity initiatives, partially offset by higher labor costs.

Previous wording

A summary of operating expenses for the three and nine-month periods of fiscal years 2024 and 2023 is as follows:

Current wording

A summary of operating expenses for the three-month period of fiscal years 2025 and 2024 is as follows:

Previous wording

Selling and administrative expense as a percentage of revenues in the three and nine-month periods of 2024 was lower compared with the prior-year periods, which primarily reflected higher revenues and lower shipping costs in the current-year period, partially offset by higher administrative costs.

Current wording

Selling and administrative expense as a percentage of revenues in the three-month period of 2025 was lower compared with the prior-year periods, which primarily reflected higher revenues, partially offset by higher selling costs in the current-year period.

Previous wording

Lower research and development expense as a percentage of revenues in the three and nine-month periods of 2024 primarily reflected the timing of project spending.

Current wording

Higher research and development expense as a percentage of revenues in the three-month period of 2025 primarily reflected a $30 million write-down of certain assets in the Life Sciences segment and the timing of project spending.

Previous wording

Integration, restructuring and transaction expense in the three and nine-month periods of 2024 primarily included restructuring costs related to simplification and other cost-saving initiatives, as well as transaction costs, such as legal, advisory and other costs, relating to our agreement to acquire Critical Care. Expenses in the three and nine-month periods of 2023 also included system integration costs. For further disclosures regarding restructuring costs, refer to Note 10 in the Notes to Condensed Consolidated Financial Statements.

Current wording

The amount in the three-month period of 2025 primarily included restructuring costs related to simplification and other cost-saving initiatives, as well as restructuring, integration and transaction costs relating to our acquisition of the Advanced Patient Monitoring unit. For further disclosures regarding restructuring costs, refer to Note 10 in the Notes to Condensed Consolidated Financial Statements.

Previous wording

The amounts in the three and nine-month periods of 2024 largely represented charges relating to legal matters, including a $50 million charge to accrue an estimated liability for the SEC investigation relating to, among other things, certain reporting issues involving BD Alaris TM infusion pumps included in SEC disclosures prior to 2021, as further discussed in Note 5 in the Notes to Condensed Consolidated Financial Statements.

Current wording

The amount in the three-month period of 2025 largely represented charges relating to legal matters. Additional disclosures regarding legislative and legal matters are provided in Note 5 in the Notes to Condensed Consolidated Financial Statements.

Previous wording

The components for the three and nine-month periods of fiscal years 2024 and 2023 were as follows:

Current wording

The components for the three-month periods of fiscal years 2025 and 2024 were as follows:

Previous wording

The income tax rates for the three and nine-month periods of fiscal years 2024 and 2023 are provided below.

Current wording

The income tax rates for the three-month periods of fiscal years 2025 and 2024 are provided below.

Previous wording

Net income and diluted earnings per share for the three and nine-month periods of fiscal years 2024 and 2023 were as follows:

Current wording

Net income and diluted earnings per share for the three-month periods of fiscal years 2025 and 2024 were as follows:

Previous wording

Cash flows from operating activities in the first nine months of fiscal year 2023 reflected net income, adjusted by a change in operating assets and liabilities that was a net use of cash. This net use of cash primarily reflected lower levels of accounts payable and accrued expenses, as well as higher levels of inventory and trade receivables, partially offset by lower levels of prepaid expenses.

Current wording

Cash flows from operating activities in the first three months of fiscal year 2025 was largely driven by our net income, adjusted by a change in operating assets and liabilities that was a net use of cash. This net use of cash primarily reflected higher levels of inventory and prepaid expenses, as well as lower levels of accounts payable and accrued expenses, partially offset by lower levels of trade receivables. The decrease in accounts payable and accrued expenses reflected our payment of $175 million relating to the SEC investigation as further discussed in Note 5 in the Notes to Condensed Consolidated Financial Statements.

Previous wording

Cash flows from operating activities in the first nine months of fiscal year 2024 was largely driven by our net income, adjusted by a change in operating assets and liabilities that was a net use of cash. This net use of cash primarily reflected lower levels of accounts payable and accrued expenses, partially offset by lower levels of prepaid expenses. Cash flows from operating activities in 2024 additionally reflected a discretionary cash contribution of $150 million to fund our pension obligation.

Current wording

Cash flows from operating activities in the first three months of fiscal year 2024 was largely driven by our net income, adjusted by a change in operating assets and liabilities that was a net source of cash. This net source of cash primarily reflected lower levels of trade receivables, partially offset by lower levels of accounts payable and accrued expenses. Cash flows from operating activities in 2024 additionally reflected a discretionary cash contribution of $150 million to fund our pension obligation.

Previous wording

Our investments in capital expenditures are focused on projects that enhance our cost structure and manufacturing capabilities, as well as support our BD 2025 strategy for growth and simplification. Net outflows from investing activities in the first nine months of fiscal year 2024 included capital expenditure-related outflows of $429 million, compared with $580 million in the prior-year period. Current-period outflows from investing activities also included net purchases of investments, primarily in time deposits, of $830 million.

Current wording

Our investments in capital expenditures are focused on projects that enhance our cost structure and manufacturing capabilities, as well as support our BD 2025 strategy for growth and simplification. Net outflows from investing activities in the first three months of fiscal year 2025 included capital expenditure-related outflows of $105 million, compared with $116 million in the prior-year period. Current-period cash flows from investing activities also included a $411 million inflow attributable to the maturity of time deposits.

Previous wording

Net cash flows from financing activities in the first nine months of fiscal years 2024 and 2023 included the following significant cash flows:

Current wording

Net cash flows from financing activities in the first three months of fiscal years 2025 and 2024 included the following significant cash flows:

Previous wording

At June 30, 2024, total worldwide cash and equivalents and short-term investments, including restricted cash, were approximately $5.338 billion and more than half of these assets were held in the United States. We regularly review the amount of cash and short-term investments held outside of the United States and our historical foreign earnings are used to fund foreign investments or meet foreign working capital and property, plant and equipment expenditure needs. To fund cash needs in the United States, we rely on ongoing cash flow from U.S. operations, access to capital markets and remittances from foreign subsidiaries of earnings that are not considered to be permanently reinvested.

Current wording

At December 31, 2024, total worldwide cash and equivalents and short-term investments, including restricted cash, were approximately $830 million and were primarily held outside of the United States. We regularly review the amount of cash and short-term investments held outside of the United States and our historical foreign earnings are used to fund foreign investments or meet foreign working capital and property, plant and equipment expenditure needs. To fund cash needs in the United States, we rely on ongoing cash flow from U.S. operations, access to capital markets and remittances from foreign subsidiaries of earnings that are not considered to be permanently reinvested.