Becton Dickinson and Co BDX · USD

Segment DataThe Company's organizational structure is based upon three worldwide business segments: BD Medical (“Medical”), BD Life Sciences (“Life Sciences”) and BD Interventional (“Interventional”). The Company’s segments are strategic businesses that are managed separately because each one develops, manufactures and markets distinct products and services. The Company’s Chairman, Chief Executive Officer and President is its chief operating decision maker (“CODM”).MedicalMedical produces a broad array of medical technologies and devices that are used to help improve healthcare delivery in a wide range of settings. The primary customers served by Medical are hospitals and clinics, physicians’ office practices, consumers and retail pharmacies, governmental and nonprofit public health agencies, pharmaceutical companies, and healthcare workers. Medical consists of the following organizational units: Medication Delivery Solutions, Medication Management Solutions, Pharmaceutical Systems, and Advanced Patient Monitoring.Life SciencesLife Sciences provides products for the safe collection and transport of diagnostics specimens, and instruments and reagent systems to detect a broad range of infectious diseases, healthcare-associated infections and cancers. In addition, Life Sciences produces research and clinical tools that facilitate the study of cells, and the components of cells, to gain a better understanding of normal and disease processes. That information is used to aid the discovery and development of new drugs and vaccines, and to improve the diagnosis and management of diseases. The primary customers served by Life Sciences are hospitals, laboratories and clinics; blood banks; healthcare workers; physicians’ office practices; academic and government institutions; and pharmaceutical and biotechnology companies. Life Sciences consists of the following organizational units: Specimen Management, Diagnostic Solutions, and Biosciences.InterventionalInterventional provides vascular, urology, oncology and surgical specialty products that are intended to be used once and then discarded or are either temporarily or permanently implanted. The primary customers served by Interventional are hospitals, ambulatory surgery centers, individual healthcare professionals, extended care facilities, alternate site facilities, and patients via the segment's Homecare business.

RevenuesThe Company sells a broad range of medical supplies, devices, laboratory equipment and diagnostic products which are distributed through independent distribution channels and directly by BD through sales representatives. End-users of the Company's products include healthcare institutions, physicians, life science researchers, clinical laboratories, the pharmaceutical industry, and the general public. In the current and prior-year periods, the Company generated revenues attributable to licensing, which includes consideration received in exchange for the use of BD intellectual property by third parties.Timing of Revenue RecognitionThe Company’s revenues are primarily recognized when the customer obtains control of the product sold, which is generally upon shipment or delivery, depending on the delivery terms specified in the sales agreement. Revenues associated with certain instruments and equipment for which installation is complex, and therefore significantly affects the customer’s ability to use and benefit from the product, are recognized when customer acceptance of these installed products has been confirmed. For certain service arrangements, including extended warranty and software maintenance contracts, revenue is recognized ratably over the contract term. The majority of revenues relating to extended warranty contracts associated with certain instruments and equipment is generally recognized within a few years whereas deferred revenue relating to software maintenance contracts is generally recognized over a longer period.Measurement of RevenuesThe Company acts as the principal in substantially all of its customer arrangements and as such, generally records revenues on a gross basis. Revenues exclude any taxes that the Company collects from customers and remits to tax authorities. The Company considers its shipping and handling costs to be costs of contract fulfillment and has made the accounting policy election to record these costs within Selling and administrative expense.Payment terms extended to the Company’s customers are based upon commercially reasonable terms for the markets in which the Company's products are sold. Because the Company generally expects to receive payment within one year or less from when control of a product is transferred to the customer, the Company does not generally adjust its revenues for the effects of a financing component.

Commitments and ContingenciesCommitmentsThe Company has certain future purchase commitments entered in the normal course of business to meet operational and capital requirements. As of September 30, 2025, these commitments aggregated to approximately $1.751 billion and will largely be expended within the next year.ContingenciesThe Company is involved, both as a plaintiff and a defendant, in various legal proceedings that arise in the ordinary course of business, including, without limitation, product liability and environmental matters in certain U.S. and international locations. Given the uncertain nature of litigation generally, the Company is not able, in all cases, to reasonably estimate the amount or range of loss that could result from an unfavorable outcome of litigation in which the Company is a party. Even if the Company believes it has meritorious defenses, from time to time the Company engages in settlement discussions and mediation and considers settlements, taking into account various factors including, among other things, developments in such legal proceedings and the resulting risks and uncertainties. These activities have resulted in settlements for certain matters and going forward could result in further settlements, which may be confidential and could be significant and result in charges in excess of accruals. In accordance with U.S. GAAP, the Company establishes accruals to the extent losses are probable and reasonably estimable. With respect to putative class action lawsuits and certain tort actions in the United States and certain of the Canadian lawsuits described below or in its other SEC filings, the Company may not be able to determine if a probable loss exists or estimate a range of reasonably possible losses for the following reasons: (i) all or certain of the proceedings are in early stages; (ii) the Company has not received and reviewed complete information regarding all or certain of the plaintiffs and their medical conditions; and/or (iii) there are significant factual issues to be resolved. In addition, there is uncertainty as to the likelihood of a class being certified or the ultimate size of any class.

DebtCurrent debt obligations The carrying value of Current debt obligations, net of unamortized debt issuance costs, at September 30 consisted of:(Millions of dollars)20252024Commercial paper borrowings$855 $400 Current portion of long-term debt3.734% Notes due December 15, 2024(a)— 875 3.020% Notes due May 24, 2025(a)— 335 0.034% Notes due August 13, 2025(a)— 559 1.208% Notes due June 4, 2026704 — Other1 1 Total current debt obligations$1,560 $2,170 (a)All of the aggregate principal amount outstanding was retired upon maturity during fiscal 2025, as further discussed below.The weighted average interest rates for current debt obligations were 2.89% and 2.91% at September 30, 2025 and 2024, respectively.From time to time, the Company may access the commercial paper market as it manages working capital over the normal course of its business activities. The Company’s U.S. and multicurrency euro commercial paper programs provide for a maximum amount of unsecured borrowings under the two programs, in aggregate, of $2.750 billion. Proceeds from these programs may be used for working capital purposes and general corporate purposes, which may include acquisitions, share repurchases, and repayments of debt. The Company utilized commercial paper borrowings in the fourth quarter of fiscal year 2024 to partially fund the Advanced Patient Monitoring acquisition, as further discussed in Note 11.Long-term debt The carrying value of Long-Term Debt, net of unamortized debt issuance costs, at September 30 consisted of:(Millions of dollars)202520241.208% Notes due June 4, 2026— 671 6.700% Notes due December 1, 2026154 158 1.900% Notes due December 15, 2026586 559 3.700% Notes due June 6, 20271,722 1,721 7.000% Debentures due August 1, 2027117 118 4.693% Notes due February 13, 2028798 797 6.700% Debentures due August 1, 2028114 115 0.334% Notes due August 13, 20281,054 1,004 4.874% Notes due February 8, 2029622 622 5.081% Notes due June 7, 2029597 596 3.553% Notes due September 13, 2029936 891 2.823% Notes due May 20, 2030747 746 3.519% Notes due February 8, 2031876 835 1.957% Notes due February 11, 2031995 994 3.828% Notes due June 7, 20321,168 1,113 4.298% Notes due August 22, 2032496 496 5.110% Notes due February 8, 2034546 545 1.213% Notes due February 12, 2036701 668 4.029% Notes due June 7, 2036933 889 6.000% Notes due May 15, 2039121 121 5.000% Notes due November 12, 204090 90 1.336% Notes due August 13, 20411,049 999 4.875% Notes due May 15, 2044244 244 4.

Income TaxesProvision for Income TaxesThe provision (benefit) for income taxes for the years ended September 30 consisted of:(Millions of dollars)202520242023Current:Federal$152 $132 $364 State and local, including Puerto Rico55 17 87 Foreign471 362 303 $677 $511 $754 Deferred:Domestic$(343)$(169)$(644)Foreign(131)(42)22 (474)(211)(622)Income tax provision$203 $300 $132 The components of Income from Continuing Operations Before Income Taxes for the years ended September 30 consisted of:(Millions of dollars)202520242023Domestic, including Puerto Rico$(11)$336 $358 Foreign1,892 1,669 1,304 Income from Continuing Operations Before Income Taxes$1,881 $2,005 $1,662 Unrecognized Tax BenefitsThe table below summarizes the gross amounts of unrecognized tax benefits without regard to reduction in tax liabilities or additions to deferred tax assets and liabilities if such unrecognized tax benefits were settled. The Company believes it is reasonably possible that the amount of unrecognized benefits will change during the next twelve months due to one or more of the following events: expiring statutes, audit activity, tax payments, other activity, or final decisions in matters that are the subject of controversy in various taxing jurisdictions in which we operate. However, the Company does not expect changes to have a significant effect on its results of operations, financial condition, or cash flows.(Millions of dollars)202520242023Balance at October 1$221 $269 $267 Increase due to current year tax positions40 22 22 Increase due to prior year tax positions5 — 33 Decreases due to prior year tax positions— — (29)Decrease due to settlements with tax authorities (16)(64)(6)Decrease due to lapse of statute of limitations(10)(6)(18)Balance at September 30$240 $221 $269 Unrecognized tax benefits that would affect the effective tax rate if recognized$285 $257 $366 The following were included for the years ended September 30 as a component of Income tax provision on the consolidated statements of income.(Millions of dollars)202520242023Interest and penalties associated with unrecognized tax benefits$15 $42 $20 The Company conducts business and files tax returns in numerous countries and currently has tax audits in progress in a number of tax jurisdictions. The IRS has completed its audit of the BD combined company through fiscal year 2017. The IRS is reviewing BD’s fiscal years 2018 through 2023.

Share-Based CompensationThe Company grants share-based awards under the 2004 Employee and Director Equity-Based Compensation Plan (“2004 Plan”), which provides long-term incentive compensation to employees and directors consisting of: stock appreciation rights (“SARs”), performance-based restricted stock units, time-vested restricted stock units and other stock awards.The fair value of share-based payments is recognized as compensation expense in net income. BD estimates forfeitures based on experience at the time of grant and adjusts expense to reflect actual forfeitures. The amounts and location of compensation cost relating to share-based payments included in the consolidated statements of income is as follows:(Millions of dollars)202520242023Cost of products sold$53 $51 $50 Selling and administrative expense160 156 170 Research and development expense44 42 41 Integration, restructuring and transaction expense5 — — Total share-based compensation cost$262 $249 $261 Tax benefit associated with share-based compensation costs recognized$60 $58 $58 Stock Appreciation RightsSARs represent the right to receive, upon exercise, shares of common stock having a value equal to the difference between the market price of common stock on the date of exercise and the exercise price on the date of grant. SARs generally vest over a period of four years and have a term of ten years. The fair value of awards was estimated on the date of grant using a lattice-based binomial option valuation model and these valuations were largely based upon the following weighted-average assumptions:202520242023Risk-free interest rate4.24%4.51%3.78%Expected volatility21.0%22.0%21.0%Expected dividend yield1.86%1.59%1.53%Expected life7.0 years7.0 years7.0 yearsFair value derived$54.39$63.05$57.80 Expected volatility is based upon historical volatility for the Company’s common stock and other factors. The expected life of SARs granted is derived from the output of the lattice-based model, using assumed exercise rates based on historical exercise and termination patterns, and represents the period of time that SARs granted are expected to be outstanding. The risk-free interest rate used is based upon the published U.S. Treasury yield curve in effect at the time of grant for instruments with a similar life. The dividend yield is based upon the most recently declared quarterly dividend as of the grant date. The Company issued 0.1 million shares during 2025 to satisfy the SARs exercised.

LeasesThe Company leases real estate, vehicles, and other equipment which are used in the Company’s manufacturing, administrative and research and development activities. The Company identifies a contract that contains a lease as one which conveys a right, either explicitly or implicitly, to control the use of an identified asset in exchange for consideration. The Company’s lease arrangements are generally classified as operating leases. These arrangements have remaining terms ranging from less than one year to approximately 25 years and the weighted-average remaining lease term of the Company’s leases is approximately 8.3 years. An option to renew or terminate the current term of a lease arrangement is included in the lease term if the Company is reasonably certain to exercise that option.The Company does not recognize a right-of-use asset and lease liability for short-term leases, which have terms of 12 months or less, on its consolidated balance sheet. For the longer-term lease arrangements that are recognized on the Company’s consolidated balance sheet, the right-of-use asset and lease liability is initially measured at the commencement date based upon the present value of the lease payments due under the lease. These payments represent the combination of the fixed lease and fixed non-lease components that are due under the arrangement. The costs associated with the Company’s short-term leases, as well as variable costs relating to the Company’s lease arrangements, are not material to its consolidated financial results.The implicit interest rates of the Company’s lease arrangements are generally not readily determinable and as such, the Company applies an incremental borrowing rate, which is established based upon the information available at the lease commencement date, to determine the present value of lease payments due under an arrangement. The weighted-average incremental borrowing rate that has been applied to measure the Company’s lease liabilities is 4.6%.The Company’s lease costs recorded in its consolidated statements of income for the years ended September 30, 2025, 2024 and 2023 were $196 million, $190 million, and $145 million, respectively. Cash payments arising from the Company’s lease arrangements are reflected on its consolidated statement of cash flows as outflows used for operating activities.

AcquisitionsAdvanced Patient MonitoringOn September 3, 2024, the Company completed its acquisition of Edwards Lifesciences’ Critical Care product group, which was renamed as BD Advanced Patient Monitoring (“Advanced Patient Monitoring”). Since the acquisition date, financial results for Advanced Patient Monitoring’s product offerings are reported as a separate organizational unit within the Medical segment. Advanced Patient Monitoring is a global leader in advanced monitoring solutions that expands the Company’s portfolio of smart connected care solutions with its growing set of leading monitoring technologies, advanced AI-enabled clinical decision tools and robust innovation pipeline that complement the Company's existing technologies serving operating rooms and intensive care units. The Company funded the transaction with cash on hand, using net proceeds raised through debt issuances in the third quarter of fiscal year 2024, as further discussed in Note 16, and borrowings under its commercial paper program. The acquisition was accounted for under the acquisition method of accounting for business combinations.The fair value of consideration transferred in connection with the acquisition was $3.914 billion. The assets acquired and the liabilities assumed in this acquisition included developed technology intangible assets of $722 million, customer relationships intangible assets of $657 million and $635 million of other net assets, which are primarily inventory. The goodwill recorded from the excess of the purchase price over the fair value of the acquired net assets was $1.900 billion, which related to synergies expected to be gained from combining operations of the acquiree and acquirer, as well as revenue and cash flow projections associated with future innovative technologies expected to occur. The goodwill to be deductible for tax purposes is approximately $1.1 billion.The Company included Advanced Patient Monitoring in its consolidated results of operations beginning on September 3, 2024. The Company’s unaudited pro forma Revenues for fiscal years 2024 and 2023, giving effect as if Advanced Patient Monitoring had been acquired as of October 1, 2022, were $21.1 billion and $20.3 billion, respectively. The calculation of pro forma Net Income for fiscal years 2024 and 2023 is not practicable because of complexities associated with its hypothetical calculation.