New Jersey | 22-0760120 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
1 Becton Drive Franklin Lakes, New Jersey (Address of principal executive offices) | 07417-1880 (Zip code) |
Title of Each Class | Name of Each Exchange on Which Registered | |
Common Stock, par value $1.00 | New York Stock Exchange | |
Depositary Shares, each representing a 1/20th interest in a share of 6.125% Cumulative Preferred Stock Series A | New York Stock Exchange | |
0.368% Notes due June 6, 2019 | New York Stock Exchange | |
1.000% Notes due December 15, 2022 | New York Stock Exchange | |
1.900% Notes due December 15, 2026 | New York Stock Exchange | |
1.401% Notes due May 24, 2023 | New York Stock Exchange | |
3.020% Notes due May 24, 2025 | New York Stock Exchange |
Large accelerated filer | þ | Accelerated filer | ¨ | Non-accelerated filer | ¨ | |||||
Smaller reporting company | ¨ | Emerging growth company | ¨ | |||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | ¨ |
Organizational Unit | Principal Product Lines |
Medication Delivery Solutions | Peripheral IV catheters (conventional, safety); advanced peripheral catheters (guidewire assisted peripherally inserted venous catheters, midline catheters, port access); central lines (peripherally inserted central catheters); acute dialysis catheters; vascular access technology (ultrasonic imaging); vascular care (lock solutions, prefilled flush syringes, disinfecting caps); vascular preparation (skin antiseptics, dressings, securement); needle-free IV connectors and extensions sets; IV fluids; closed-system drug transfer devices; hazardous drug detection; conventional and safety hypodermic syringes and needles, anesthesia needles (spinal, epidural) and trays; enteral syringes, sharps disposal systems. |
Medication Management Solutions | Intravenous medication safety and infusion therapy delivery systems, including infusion pumps and dedicated disposables; medication compounding workflow systems; automated medication dispensing; automated supply management systems; medication inventory optimization and tracking systems; and analytics related to all the above products. |
Diabetes Care | Syringes, pen needles and other products related to the injection or infusion of insulin and other drugs used in the treatment of diabetes. |
Pharmaceutical Systems | Prefillable drug delivery systems - prefillable syringes, safety, shielding and self-injection systems - provided to pharmaceutical companies for use as containers for injectable pharmaceutical products, which are then placed on the market as drug/device combinations. |
Organizational Unit | Principal Product Lines |
Preanalytical Systems | Integrated systems for specimen collection; and safety-engineered blood collection products and systems. |
Diagnostic 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; microbiology laboratory automation; and plated media. |
Biosciences | Fluorescence-activated cell sorters and analyzers; monoclonal antibodies and kits for performing cell analysis; reagent systems for life science research; bench-side solutions for high-throughput targeted single-cell gene expression and RNA-Seq analysis; molecular indexing and next-generation sequencing sample preparation for genomics research; and clinical oncology, immunological (HIV) and transplantation diagnostic/monitoring reagents and analyzers. |
Organizational Unit | Principal Product Lines |
Surgery | Hernia and soft tissue repair, biological grafts, bioresorbable grafts, biosurgery, and other surgical products; BD ChloraPrep™ surgical infection prevention products, thoracic and abdominal drainage products and V. Mueller™ surgical and laparoscopic instrumentation products, which are products previously included within the former Medication and Procedural Solutions unit of BD Medical. |
Peripheral Intervention | Percutaneous transluminal angioplasty (“PTA”) balloon catheters, peripheral vascular stents, self-expanding and balloon-expandable stent grafts, vascular grafts, drug coated balloons, ports, biopsy, chronic dialysis, feeding, IVC filters, endovascular fistula creation devices and drainage products. |
Urology and Critical Care | Urological drainage products, intermittent catheters, urinary and fecal management devices, kidney stone management devices, and Targeted Temperature Management. |
• | investors’ anticipation of the potential resale in the market of a substantial number of additional shares of BD common stock received upon conversion of the mandatory convertible preferred stock; |
• | possible sales of BD common stock by investors who view the mandatory convertible preferred stock as a more attractive means of equity participation in BD than owning shares of BD common stock; and |
• | hedging or arbitrage trading activity that may develop involving the mandatory convertible preferred stock and BD common stock. |
Sites | Corporate | BD Life Sciences | BD Medical | BD Interventional | Mixed(a) | Total | |
Leased | 20 | 21 | 81 | 86 | 83 | 291 | |
Owned | 6 | 23 | 31 | 23 | 6 | 89 | |
Total | 26 | 44 | 112 | 109 | 89 | 380 | |
Square feet | 2,281,986 | 3,958,668 | 10,946,766 | 4,651,903 | 2,819,040 | 24,658,363 |
(a) | Facilities used by more than one business segment. |
Name | Age | Position |
Vincent A. Forlenza | 65 | Chairman since July 2012; Chief Executive Officer since October 2011; and President from January 2009 to April 2017. |
Thomas E. Polen | 45 | Chief Operating Officer since October 2018; President since April 2017; Executive Vice President and President - Medical Segment from October 2014 to April 2017; and Group President from October 2013 to October 2014. |
James W. Borzi | 56 | Executive Vice President, Global Operations and Chief Supply Chain Office since October 2017; Senior Vice President, Global Operations from 2015 to October 2017; and Vice President, Global Manufacturing from 2013 to 2015. |
Simon D. Campion | 47 | Executive Vice President and President, Interventional Segment since September 2018; Worldwide President, BD Interventional - Surgery from December 2017 to September 2018; President, Davol (now part of our Surgery business), C.R. Bard, Inc. from July 2015 to December 2017; and prior thereto, Vice President and General Manager, Davol. |
Roland Goette | 56 | Executive Vice President and President, EMEA since May 2017; President, Europe from October 2014 to May 2017; and prior thereto, Vice President and General Manager - Medical Surgical Systems, Western Europe. |
Patrick K. Kaltenbach | 55 | Executive Vice President and President, Life Sciences Segment since May 2018; Senior Vice President and President, Life Sciences and Applied Markets Group, Agilent Technologies, Inc. from November 2014 to April 2018; Vice President and General Manager of Agilent’s Life Sciences Products and Solutions organization from January 2014 to November 2014; and prior thereto, Vice President and General Manager of the Life Sciences Products and Solutions organization. |
Samrat S. Khichi | 51 | Executive Vice President and General Counsel since December 2017; Senior Vice President, General Counsel and Corporate Secretary, C.R. Bard, Inc. from July 2014 to December 2017; and prior thereto, Chief Administrative Officer, Senior Vice President, General Counsel and Secretary, Catalent Pharma Solutions, a portfolio company of The Blackstone Group. |
Betty D. Larson | 42 | Executive Vice President, Human Resources, and Chief Human Resources Officer since July 2018; Senior Vice President of Human Resources, Interventional Segment from December 2017 to July 2018; Vice President, Human Resources, C.R. Bard, Inc. from September 2014 to December 2017; and prior thereto, Vice President, Human Resources - Global Medical Products Business, Baxter International. |
James Lim | 54 | Executive Vice President and President, Greater Asia since June 2012. |
Alberto Mas | 57 | Executive Vice President and President - Medical Segment since June 2018; Executive Vice President and President - Life Sciences Segment from October 2016 to June 2018; and Worldwide President - Diagnostic Systems from October 2013 to October 2016. |
Christopher R. Reidy | 61 | Executive Vice President, Chief Financial Officer and Chief Administrative Officer since July 2013. |
Period | 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) | |||||||
July 1-31, 2018 | 1,499 | $244.50 | — | 7,857,742 | |||||||
August 1-31, 2018 | 535 | $247.67 | — | 7,857,742 | |||||||
September 1-30, 2018 | — | — | — | 7,857,742 | |||||||
Total | 2,034 | $245.33 | — | 7,857,742 |
(1) | Includes 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 the repurchase program authorized by the Board of Directors on September 24, 2013 for 10 million shares, for which there is no expiration date. |
Years Ended September 30 | |||||||||||||||||||
2018 | 2017 | 2016 | 2015 | 2014 | |||||||||||||||
Dollars in millions, except share and per share amounts | |||||||||||||||||||
Operations | |||||||||||||||||||
Revenues | $ | 15,983 | $ | 12,093 | $ | 12,483 | $ | 10,282 | $ | 8,446 | |||||||||
Gross Profit | 7,262 | 5,942 | 5,991 | 4,695 | 4,301 | ||||||||||||||
Operating Income | 1,497 | 1,478 | 1,430 | 1,074 | 1,606 | ||||||||||||||
Income Before Income Taxes | 1,173 | 976 | 1,074 | 739 | 1,522 | ||||||||||||||
Income Tax Provision (Benefit) | 862 | (124 | ) | 97 | 44 | 337 | |||||||||||||
Net Income | 311 | 1,100 | 976 | 695 | 1,185 | ||||||||||||||
Basic Earnings Per Share | 0.62 | 4.70 | 4.59 | 3.43 | 6.13 | ||||||||||||||
Diluted Earnings Per Share | 0.60 | 4.60 | 4.49 | 3.35 | 5.99 | ||||||||||||||
Dividends Per Common Share | 3.00 | 2.92 | 2.64 | 2.40 | 2.18 | ||||||||||||||
Financial Position | |||||||||||||||||||
Total Assets | 53,904 | 37,734 | 25,586 | 26,478 | 12,384 | ||||||||||||||
Total Long-Term Debt | 18,894 | 18,667 | 10,550 | 11,370 | 3,768 | ||||||||||||||
Total Shareholders’ Equity | 20,994 | 12,948 | 7,633 | 7,164 | 5,053 | ||||||||||||||
Additional Data | |||||||||||||||||||
Average Common and Common Equivalent Shares Outstanding — Assuming Dilution (millions) | 264.6 | 223.6 | 217.5 | 207.5 | 197.7 |
Years Ended September 30 | |||||||||||||||||||
Millions of dollars, except per share amounts | 2018 | 2017 | 2016 | 2015 | 2014 | ||||||||||||||
Total specified items | $ | 2,409 | $ | 1,466 | $ | 1,261 | $ | 1,186 | $ | 153 | |||||||||
After-tax impact of specified items | $ | 2,674 | $ | 971 | $ | 892 | $ | 786 | $ | 101 | |||||||||
Impact of specified items on diluted earnings per share | $ | (10.11 | ) | $ | (4.34 | ) | $ | (4.10 | ) | $ | (3.79 | ) | $ | (0.51 | ) | ||||
Impact of dilution from share issuances | $ | (0.30 | ) | $ | (0.54 | ) | $ | — | $ | (0.02 | ) | $ | — |
• | To increase revenue growth by focusing on our core products, services and solutions that deliver greater benefits to patients, healthcare workers and researchers; |
• | To supplement our internal growth through strategic acquisitions; |
• | To continue investment in research and development for platform extensions and innovative new products; |
• | To make investments in growing our operations in emerging markets; |
• | To improve operating effectiveness and balance sheet productivity; |
• | To drive an efficient capital structure and strong shareholder returns. |
• | Enabling safer, simpler and more effective parenteral drug delivery; |
• | Improving clinical outcomes through new, more accurate and faster diagnostics; |
• | Providing tools and technologies to the research community that facilitate the understanding of the cell, cellular diagnostics, cell therapy and immunology; |
• | Enhancing disease management in diabetes, women’s health and cancer, infectious disease and other targeted conditions. |
• | To operate the Company consistent with an investment grade credit profile; |
• | To ensure access to the debt market for strategic opportunities; |
• | To optimize the cost of capital based on market conditions. |
• | Medical segment volume growth in 2018 was driven by sales growth in all of the segment's units, particularly by growth in the Medication Delivery Solutions and Medication Management Solutions units. |
• | Life Sciences segment volume growth in 2018 was driven by sales growth in all three of its organizational units, particularly in its Diagnostic Systems unit. |
2018 vs. 2017 | 2017 vs. 2016 | ||||||||||||||||||||||||||||
(Millions of dollars) | 2018 | 2017 | 2016 | Total Change | Estimated FX Impact | FXN Change | Total Change | Estimated FX Impact | FXN Change | ||||||||||||||||||||
Medication Delivery Solutions (a) | $ | 3,644 | $ | 2,812 | $ | 2,724 | 29.6 | % | 1.9 | % | 27.7 | % | 3.2 | % | (0.8 | )% | 4.0 | % | |||||||||||
Medication Management Solutions | 2,470 | 2,295 | 2,197 | 7.7 | % | 1.1 | % | 6.6 | % | 4.4 | % | (0.5 | )% | 4.9 | % | ||||||||||||||
Diabetes Care | 1,105 | 1,056 | 1,023 | 4.6 | % | 1.7 | % | 2.9 | % | 3.3 | % | (0.3 | )% | 3.6 | % | ||||||||||||||
Pharmaceutical Systems | 1,397 | 1,256 | 1,199 | 11.2 | % | 4.8 | % | 6.4 | % | 4.8 | % | (0.5 | )% | 5.3 | % | ||||||||||||||
Respiratory Solutions | — | — | 822 | NM | NM | NM | NM | NM | NM | ||||||||||||||||||||
Total Medical revenues | $ | 8,616 | $ | 7,419 | $ | 7,965 | 16.1 | % | 2.1 | % | 14.0 | % | (6.8 | )% | (0.5 | )% | (6.3 | )% |
(a) | The presentation of prior-period amounts reflects a reclassification of $685 million and $689 million in 2017 and 2016, respectively, of certain product revenues from the Medical segment to the Interventional segment as further discussed in discussed in Note 6 to the consolidated financial statements contained in Item 8. Financial Statements and Supplementary Data. |
(Millions of dollars) | 2018 | 2017 | 2016 | ||||||||
Medical segment operating income (a) (b) | $ | 2,624 | $ | 1,907 | $ | 1,807 | |||||
Segment operating income as % of Medical revenues | 30.5 | % | 25.7 | % | 22.7 | % |
(a) | Operating income in 2018 excluded certain general and administrative costs, which were allocated to the segment in 2017 and 2016, due to a change in our management reporting approach, as is further discussed in Note 6 to the consolidated financial statements contained in Item 8. Financial Statements and Supplementary Data. |
(b) | The presentation of prior-period amounts reflects reclassifications of $248 million and $245 million in 2017 and 2016, respectively, relating to the movement of certain product offerings from the Medical segment to the Interventional segment as noted above. |
2018 vs. 2017 | 2017 vs. 2016 | ||||||||||||||||||||||||||||
(Millions of dollars) | 2018 | 2017 | 2016 | Total Change | Estimated FX Impact | FXN Change | Total Change | Estimated FX Impact | FXN Change | ||||||||||||||||||||
Preanalytical Systems | $ | 1,553 | $ | 1,471 | $ | 1,409 | 5.5 | % | 1.4 | % | 4.1 | % | 4.4 | % | (0.8 | )% | 5.2 | % | |||||||||||
Diagnostic Systems | 1,536 | 1,378 | 1,301 | 11.5 | % | 1.9 | % | 9.6 | % | 5.9 | % | (0.5 | )% | 6.4 | % | ||||||||||||||
Biosciences | 1,241 | 1,139 | 1,119 | 9.0 | % | 2.2 | % | 6.8 | % | 1.8 | % | (0.6 | )% | 2.4 | % | ||||||||||||||
Total Life Sciences revenues | $ | 4,330 | $ | 3,988 | $ | 3,829 | 8.6 | % | 1.8 | % | 6.8 | % | 4.2 | % | (0.6 | )% | 4.8 | % |
(Millions of dollars) | 2018 | 2017 | 2016 | ||||||||
Life Sciences segment operating income (a) | $ | 1,207 | $ | 772 | $ | 793 | |||||
Segment operating income as % of Life Sciences revenues | 27.9 | % | 19.4 | % | 20.7 | % |
(a) | Operating income in 2018 excluded certain general and administrative costs, which were allocated to the segment in 2017 and 2016, due to a change in our management reporting approach, as noted above. |
• | The Life Sciences segment's gross profit margin as a percentage of revenues was higher in fiscal year 2018 primarily due to lower manufacturing costs resulting from continuous improvement projects, which enhanced the efficiency of our operations, and favorable foreign currency translation. These favorable impacts to the Life Sciences segment's gross margin were partially offset by expense related to the Biosciences unit's write-down of certain intangible and other assets, as well as higher raw material costs. The Life Sciences segment's gross profit margin as a percentage of revenues was lower in fiscal year 2017 primarily due to unfavorable foreign currency translation, higher raw material costs and unfavorable product mix, partially offset by lower manufacturing costs resulting from operations improvement projects. |
• | Selling and administrative expense as a percentage of Life Sciences revenues in 2018 was lower compared to 2017 primarily due to a reduction in the general and administrative costs allocated to the segment, as noted above. Selling and administrative expense as a percentage of Life Sciences revenues in 2017 was higher compared to 2016 primarily due to slightly higher administrative costs. |
• | Research and development expense as a percentage of revenues in 2018 was higher compared with 2017 primarily due to write-downs in the Biosciences unit, as noted above. Research and development expense as a percentage of revenues in 2017 was relatively flat compared with 2016. |
2018 vs. 2017 | 2017 vs. 2016 | ||||||||||||||
(Millions of dollars) | 2018 | 2017 | 2016 | Total Change | Total Change | ||||||||||
Surgery (a) | $ | 1,192 | $ | 666 | $ | 670 | NM | NM | |||||||
Peripheral Intervention (a) | 1,045 | 19 | 20 | NM | NM | ||||||||||
Urology and Critical Care | 800 | — | — | NM | NM | ||||||||||
Total Interventional revenues | $ | 3,037 | $ | 685 | $ | 689 | NM | NM |
(a) | The presentation of prior-period amounts reflects reclassifications of $685 million and $689 million in 2017 and 2016, respectively, of certain product revenues from the Medical segment to the Interventional segment as noted above. |
(Millions of dollars) | 2018 | 2017 | 2016 | ||||||||
Interventional segment operating income (a) | $ | 306 | $ | 248 | $ | 245 | |||||
Segment operating income as % of Interventional revenues | 10.1 | % | NM | NM |
(a) | The presentation of prior-period amounts reflects reclassifications of $248 million and $245 million in 2017 and 2016, respectively, relating to the movement of certain product offerings from the Medical segment to the Interventional segment as noted above. |
2018 vs. 2017 | 2017 vs. 2016 | ||||||||||||||||||||||||||||
(Millions of dollars) | 2018 | 2017 | 2016 | Total Change | Estimated FX Impact | FXN Change | Total Change | Estimated FX Impact | FXN Change | ||||||||||||||||||||
United States | $ | 8,768 | $ | 6,504 | $ | 6,893 | 34.8 | % | — | 34.8 | % | (5.6 | )% | — | (5.6 | )% | |||||||||||||
International | 7,215 | 5,589 | 5,590 | 29.1 | % | 4.8 | % | 24.3 | % | — | % | (1.2 | )% | 1.2 | % | ||||||||||||||
Total revenues | $ | 15,983 | $ | 12,093 | $ | 12,483 | 32.2 | % | 2.3 | % | 29.9 | % | (3.1 | )% | (0.5 | )% | (2.6 | )% |
(Millions of dollars) | 2018 | 2017 | 2016 | ||||||||
Integration costs (a) | $ | 344 | $ | 237 | $ | 192 | |||||
Restructuring costs (a) | 344 | 85 | 526 | ||||||||
Transaction costs (a) | 56 | 39 | 10 | ||||||||
Financing costs (b) | 49 | 131 | — | ||||||||
Purchase accounting adjustments (c) | 1,733 | 491 | 527 | ||||||||
Losses on debt extinguishment (d) | 16 | 73 | — | ||||||||
Net impact of gain on sale of investment and asset impairments (e) | (151 | ) | — | — | |||||||
Hurricane recovery costs | 17 | — | — | ||||||||
Lease contract modification-related charge (f) | — | 748 | — | ||||||||
Litigation-related items (g) | — | (337 | ) | — | |||||||
Pension settlement charges | — | — | 6 | ||||||||
Total specified items | 2,409 | 1,466 | 1,261 | ||||||||
Less: Impact of tax reform and tax impact of specified items (h) | (265 | ) | 495 | 369 | |||||||
After-tax impact of specified items | $ | 2,674 | $ | 971 | $ | 892 |
(a) | Represents integration, restructuring and transaction costs, recorded in Acquisitions and other restructurings, which are further discussed below. |
(b) | Represents financing impacts associated with the Bard acquisition, which were recorded in Interest income and Interest expense. |
(c) | Primarily represents non-cash amortization expense associated with acquisition-related identifiable intangible assets. BD’s amortization expense is primarily recorded in Cost of products sold. The amount 2018 also included a fair value step-up adjustments of $478 million relating to Bard's inventory on the acquisition date. |
(d) | Represents losses recognized in Other income (expense), net upon our extinguishment of certain long-term senior notes. |
(e) | Represents the net amount recognized in Other income (expense), net related to BD's sale of its non-controlling interest in Vyaire Medical, including a gain of $303 million recognized on the sale as further discussed below, partially offset by $81 million of charges recorded to write down the carrying value of certain intangible and other assets in the Biosciences unit as well as $58 million of charges to write down the value of fixed assets primarily in the Diabetes Care unit. |
(f) | Represents a non-cash charge in 2017, which was recorded in Other operating expense, net resulting from a modification to our dispensing equipment lease contracts with customers, as previously discussed. |
(g) | The amount in 2017 largely represents the reversal of certain reserves related to an appellate court decision recorded related to RTI in Other operating expense, net. |
(h) | The amount in 2018 includes additional tax expense, net, of $640 million relating to new U.S. tax legislation, as discussed above. |
2018 | 2017 | ||||
Gross profit margin % prior-year period | 49.1 | % | 48.0 | % | |
Impact of purchase accounting adjustments, asset write-downs and other specified items | (6.9 | )% | — | % | |
Impact of divestitures | — | % | 0.8 | % | |
Operating performance | 2.8 | % | 0.7 | % | |
Foreign currency translation | 0.4 | % | (0.4 | )% | |
Gross profit margin % current-year period | 45.4 | % | 49.1 | % |
Increase (decrease) in basis points | ||||||||||||||||||
(Millions of dollars) | 2018 | 2017 | 2016 | 2018 vs. 2017 | 2017 vs. 2016 | |||||||||||||
Selling and administrative expense | $ | 4,015 | $ | 2,925 | $ | 3,005 | ||||||||||||
% of revenues | 25.1 | % | 24.2 | % | 24.1 | % | 90 | 10 | ||||||||||
Research and development expense | $ | 1,006 | $ | 774 | $ | 828 | ||||||||||||
% of revenues | 6.3 | % | 6.4 | % | 6.6 | % | (10 | ) | (20 | ) | ||||||||
Acquisitions and other restructurings | $ | 744 | $ | 354 | $ | 728 | ||||||||||||
Other operating expense, net | $ | — | $ | 410 | $ | — |
(Millions of dollars) | 2018 | 2017 | 2016 | ||||||||
Interest expense | $ | (706 | ) | $ | (521 | ) | $ | (388 | ) | ||
Interest income | 65 | 76 | 21 | ||||||||
Net interest expense | $ | (641 | ) | $ | (445 | ) | $ | (367 | ) |
2018 | 2017 | 2016 | ||||||
Effective income tax rate | 73.5 | % | (12.7 | )% | 9.1 | % | ||
Impact, in basis points, from specified items | 5,680 | (2,790 | ) | (1,090 | ) |
2018 | 2017 | 2016 | |||||||||
Net income (Millions of dollars) | $ | 311 | $ | 1,100 | $ | 976 | |||||
Diluted Earnings per Share | $ | 0.60 | $ | 4.60 | $ | 4.49 | |||||
Unfavorable impact-specified items | $ | (10.11 | ) | $ | (4.34 | ) | $ | (4.10 | ) | ||
Favorable (unfavorable) impact-foreign currency translation | $ | 0.32 | $ | (0.23 | ) | $ | (0.64 | ) | |||
Dilutive impact from share issuances | $ | (0.30 | ) | $ | (0.54 | ) | $ | — |
Increase (decrease) | |||||||
(Millions of dollars) | 2018 | 2017 | |||||
10% appreciation in U.S. dollar | $ | (59 | ) | $ | (38 | ) | |
10% depreciation in U.S. dollar | $ | 59 | $ | 38 |
Increase (decrease) to fair value of interest rate derivatives outstanding | Increase (decrease) to earnings or cash flows | ||||||||||
(Millions of dollars) | 2018 | 2017 | 2018 | 2017 | |||||||
10% increase in interest rates | $ | (22 | ) | NM | $ | (7 | ) | NM | |||
10% decrease in interest rates | $ | 23 | NM | $ | 7 | NM |
(Millions of dollars) | 2018 | 2017 | 2016 | ||||||||
Net cash provided by (used for) | |||||||||||
Operating activities | $ | 2,865 | $ | 2,550 | $ | 2,559 | |||||
Investing activities | $ | (15,829 | ) | $ | (883 | ) | $ | (669 | ) | ||
Financing activities | $ | (58 | ) | $ | 10,977 | $ | (1,761 | ) |
(Millions of dollars) | 2018 | 2017 | 2016 | ||||||||
Cash inflow (outflow) | |||||||||||
Change in credit facility borrowings | $ | — | $ | (200 | ) | $ | (500 | ) | |||
Proceeds from debt and term loans | $ | 5,086 | $ | 11,462 | $ | — | |||||
Payments of debt and term loans | $ | (3,996 | ) | $ | (3,980 | ) | $ | (752 | ) | ||
Proceeds from issuances of equity securities | $ | — | $ | 4,827 | $ | — | |||||
Share repurchases under accelerated share repurchase agreement | $ | — | $ | (220 | ) | $ | — | ||||
Dividends paid | $ | (927 | ) | $ | (677 | ) | $ | (562 | ) |
2018 | 2017 | 2016 | |||||||||
Total debt (Millions of dollars) | $ | 21,496 | $ | 18,870 | $ | 11,551 | |||||
Short-term debt as a percentage of total debt | 12.1 | % | 1.1 | % | 8.7 | % | |||||
Weighted average cost of total debt | 3.2 | % | 3.3 | % | 3.6 | % | |||||
Total debt as a percentage of total capital (a) | 47.8 | % | 57.5 | % | 57.2 | % |
(a) | Represents shareholders’ equity, net non-current deferred income tax liabilities, and debt. |
• | 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, as applicable depending upon commencement and maturity of the facility, 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. |
S&P | Moody’s | Fitch | ||||
Ratings: | ||||||
Senior Unsecured Debt | BBB | Ba1 | BBB- | |||
Commercial Paper | A-2 | NP | ||||
Outlook | Stable | Stable | Stable |
Total | 2019 | 2020 to 2021 | 2022 to 2023 | 2024 and Thereafter | |||||||||||||||
(Millions of dollars) | |||||||||||||||||||
Short-term debt | $ | 2,644 | $ | 2,644 | $ | — | $ | — | $ | — | |||||||||
Long-term debt (a) | 26,163 | 677 | 5,075 | 5,478 | 14,933 | ||||||||||||||
Operating leases | 511 | 107 | 171 | 110 | 124 | ||||||||||||||
Purchase obligations (b) | 1,046 | 863 | 155 | 28 | — | ||||||||||||||
Unrecognized tax benefits (c) | — | — | — | — | — | ||||||||||||||
Total (d) | $ | 30,365 | $ | 4,291 | $ | 5,401 | $ | 5,617 | $ | 15,057 |
(a) | Long-term debt obligations include expected principal and interest obligations. |
(b) | Purchase obligations are for purchases made in the normal course of business to meet operational and capital requirements. |
(c) | Unrecognized tax benefits at September 30, 2018 of $543 million were all long-term in nature. Due to the uncertainty related to the timing of the reversal of these tax positions, the related liability has been excluded from the table. |
(d) | Required funding obligations for 2019 relating to pension and other postretirement benefit plans are not expected to be material. |
• | Infusion products (when sold with safety software, patient identification products and certain diagnostic equipment) within our Medication Management Solutions unit; |
• | Dispensing products within our Medication Management Solutions unit; |
• | Research and clinical instruments within our Biosciences unit. |
• | Discount rate — A change of plus (minus) 25 basis points, with other assumptions held constant, would have an estimated $6 million favorable (unfavorable) impact on the total U.S. net pension and other postretirement and postemployment benefit plan costs. This estimate assumes no change in the shape or steepness of the company-specific yield curve used to plot the individual spot rates that will be applied to the future cash outflows for future benefit payments in order to calculate interest and service cost. |
• | Expected return on plan assets — A change of plus (minus) 25 basis points, with other assumptions held constant, would have an estimated $5 million favorable (unfavorable) impact on U.S. pension plan costs. |
• | 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), and new entrants into our markets. |
• | 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 this increased indebtedness may have on our ability to operate the combined company. |
• | The impact resulting from the recent U.S. tax reform, commonly referred to as the Tax Cuts and Job Act (the “Act”), which, among other things, reduces the U.S. federal corporate tax rate, imposes a one-time tax on earnings of certain foreign subsidiaries that were previously tax deferred, and imposes a new minimum tax on foreign earnings. While BD has previously recognized a provisional expense based on what it believes is a reasonable estimate of the income tax effects of the Act, this expense could change as BD refines its analysis. |
• | 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 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. |
• | The impact of the medical device excise tax under the Patient Protection and Affordable Care Act in the United States. While this tax has been suspended through December 31, 2019, it is uncertain whether the suspension will be extended beyond that date. |
• | Healthcare reform in the U.S. or in other countries in which we do business that may involve changes in government pricing and reimbursement policies or other cost containment reforms. |
• | 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 and trends toward managed care and healthcare cost containment. |
• | 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. Recently, the U.S., China and other countries have imposed tariffs on certain products imported into their respective countries. Additional tariffs or other trade barriers imposed by the U.S., China or other countries could adversely impact our supply chain costs or otherwise adversely impact our results of operations. |
• | 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. 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. |
• | Conditions in international markets, including social and political conditions, civil unrest, terrorist activity, governmental changes, trade barriers, restrictions on the ability to transfer capital across borders, 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, which has created uncertainties affecting our business operations in the United Kingdom and the EU. |
• | 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 events that adversely impact our ability to manufacture our products (particularly where production of a product line is concentrated in one or more plants) or our ability to source materials or components from suppliers (including sole-source suppliers) that are needed for such manufacturing. |
• | 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 re-register products already on the market or otherwise impact our ability to market our products. Environmental laws, particularly with respect to the emission of greenhouse gases, are also becoming more stringent throughout the world, which may increase our costs of operations or necessitate changes in our manufacturing plants or processes or those of our suppliers, or result in liability to BD. |
• | 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. |
• | 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. |
/s/ Vincent A. Forlenza | /s/ Christopher Reidy | /s/ Charles Bodner | ||
Vincent A. Forlenza | Christopher Reidy | Charles Bodner | ||
Chairman and Chief Executive Officer | Executive Vice President, Chief Financial Officer and Chief Administrative Officer | Senior Vice President, Corporate Finance and Chief Accounting Officer |
/s/ ERNST & YOUNG LLP | |
We have served as the Company's auditor since 1959. | |
New York, New York | |
November 21, 2018 |
/s/ ERNST & YOUNG LLP | |
New York, New York | |
November 21, 2018 |
Millions of dollars, except per share amounts | 2018 | 2017 | 2016 | ||||||||
Revenues | $ | 15,983 | $ | 12,093 | $ | 12,483 | |||||
Cost of products sold | 8,721 | 6,151 | 6,492 | ||||||||
Selling and administrative expense | 4,015 | 2,925 | 3,005 | ||||||||
Research and development expense | 1,006 | 774 | 828 | ||||||||
Acquisitions and other restructurings | 744 | 354 | 728 | ||||||||
Other operating expense, net | — | 410 | — | ||||||||
Total Operating Costs and Expenses | 14,487 | 10,615 | 11,053 | ||||||||
Operating Income | 1,497 | 1,478 | 1,430 | ||||||||
Interest expense | (706 | ) | (521 | ) | (388 | ) | |||||
Interest income | 65 | 76 | 21 | ||||||||
Other income (expense), net | 318 | (57 | ) | 11 | |||||||
Income Before Income Taxes | 1,173 | 976 | 1,074 | ||||||||
Income tax provision (benefit) | 862 | (124 | ) | 97 | |||||||
Net Income | 311 | 1,100 | 976 | ||||||||
Preferred stock dividends | (152 | ) | (70 | ) | — | ||||||
Net income applicable to common shareholders | $ | 159 | $ | 1,030 | $ | 976 | |||||
Basic Earnings per Share | $ | 0.62 | $ | 4.70 | $ | 4.59 | |||||
Diluted Earnings per Share | $ | 0.60 | $ | 4.60 | $ | 4.49 |
Millions of dollars | 2018 | 2017 | 2016 | ||||||||
Net Income | $ | 311 | $ | 1,100 | $ | 976 | |||||
Other Comprehensive (Loss) Income, Net of Tax | |||||||||||
Foreign currency translation adjustments | (161 | ) | 11 | (50 | ) | ||||||
Defined benefit pension and postretirement plans | (26 | ) | 179 | (141 | ) | ||||||
Cash flow hedges | 1 | 17 | 1 | ||||||||
Other Comprehensive (Loss) Income, Net of Tax | (186 | ) | 206 | (191 | ) | ||||||
Comprehensive Income | $ | 125 | $ | 1,306 | $ | 786 |
Millions of dollars, except per share amounts and numbers of shares | 2018 | 2017 | |||||
Assets | |||||||
Current Assets | |||||||
Cash and equivalents | $ | 1,140 | $ | 14,179 | |||
Restricted cash | 96 | — | |||||
Short-term investments | 17 | 21 | |||||
Trade receivables, net | 2,319 | 1,744 | |||||
Inventories | 2,451 | 1,818 | |||||
Assets held for sale | 137 | — | |||||
Prepaid expenses and other | 1,251 | 871 | |||||
Total Current Assets | 7,411 | 18,633 | |||||
Property, Plant and Equipment, Net | 5,375 | 4,638 | |||||
Goodwill | 23,600 | 7,563 | |||||
Developed Technology, Net | 12,184 | 2,478 | |||||
Customer Relationships, Net | 3,723 | 2,830 | |||||
Other Intangibles, Net | 534 | 585 | |||||
Other Assets | 1,078 | 1,007 | |||||
Total Assets | $ | 53,904 | $ | 37,734 | |||
Liabilities and Shareholders’ Equity | |||||||
Current Liabilities | |||||||
Short-term debt | $ | 2,601 | $ | 203 | |||
Accounts payable | 1,106 | 797 | |||||
Accrued expenses | 2,255 | 1,393 | |||||
Salaries, wages and related items | 910 | 773 | |||||
Income taxes | 343 | 176 | |||||
Total Current Liabilities | 7,216 | 3,342 | |||||
Long-Term Debt | 18,894 | 18,667 | |||||
Long-Term Employee Benefit Obligations | 1,056 | 1,168 | |||||
Deferred Income Taxes and Other | 5,743 | 1,609 | |||||
Commitments and Contingencies (See Note 5) | |||||||
Shareholders’ Equity | |||||||
Preferred stock | 2 | 2 | |||||
Common stock — $1 par value: authorized — 640,000,000 shares; issued — 346,687,160 shares in 2018 and 2017. | 347 | 347 | |||||
Capital in excess of par value | 16,179 | 9,619 | |||||
Retained earnings | 12,596 | 13,111 | |||||
Deferred compensation | 22 | 19 | |||||
Common stock in treasury — at cost — 78,462,971 shares in 2018 and 118,744,758 shares in 2017. | (6,243 | ) | (8,427 | ) | |||
Accumulated other comprehensive loss | (1,909 | ) | (1,723 | ) | |||
Total Shareholders’ Equity | 20,994 | 12,948 | |||||
Total Liabilities and Shareholders’ Equity | $ | 53,904 | $ | 37,734 |
Millions of dollars | 2018 | 2017 | 2016 | ||||||||
Operating Activities | |||||||||||
Net income | $ | 311 | $ | 1,100 | $ | 976 | |||||
Adjustments to net income to derive net cash provided by operating activities: | |||||||||||
Depreciation and amortization | 1,978 | 1,088 | 1,114 | ||||||||
Share-based compensation | 322 | 174 | 196 | ||||||||
Deferred income taxes | (240 | ) | (236 | ) | (426 | ) | |||||
Change in operating assets and liabilities: | |||||||||||
Trade receivables, net | (170 | ) | (93 | ) | (128 | ) | |||||
Inventories | 246 | (46 | ) | 69 | |||||||
Prepaid expenses and other | (46 | ) | (366 | ) | 90 | ||||||
Accounts payable, income taxes and other liabilities | 867 | 134 | 368 | ||||||||
Pension obligation | (263 | ) | 84 | (32 | ) | ||||||
Excess tax benefits from payments under share-based compensation plans | 78 | 77 | — | ||||||||
Lease contract modification-related charge | — | 748 | — | ||||||||
Gain on sale of Vyaire interest | (303 | ) | — | — | |||||||
Other, net | 85 | (114 | ) | 332 | |||||||
Net Cash Provided by Operating Activities | 2,865 | 2,550 | 2,559 | ||||||||
Investing Activities | |||||||||||
Capital expenditures | (895 | ) | (727 | ) | (693 | ) | |||||
Proceeds from (purchases of) investments, net | 11 | 13 | (1 | ) | |||||||
Acquisitions of businesses, net of cash acquired | (15,281 | ) | (174 | ) | — | ||||||
Proceeds from divestitures, net | 534 | 165 | 158 | ||||||||
Other, net | (198 | ) | (161 | ) | (133 | ) | |||||
Net Cash Used for Investing Activities | (15,829 | ) | (883 | ) | (669 | ) | |||||
Financing Activities | |||||||||||
Change in credit facility borrowings | — | (200 | ) | (500 | ) | ||||||
Proceeds from long-term debt and term loans | 5,086 | 11,462 | — | ||||||||
Payments of debt and term loans | (3,996 | ) | (3,980 | ) | (752 | ) | |||||
Proceeds from issuance of equity securities | — | 4,827 | — | ||||||||
Repurchase of common stock | — | (220 | ) | — | |||||||
Excess tax benefit from payments under share-based compensation plans | — | — | 86 | ||||||||
Dividends paid | (927 | ) | (677 | ) | (562 | ) | |||||
Other, net | (220 | ) | (234 | ) | (32 | ) | |||||
Net Cash (Used for) Provided by Financing Activities | (58 | ) | 10,977 | (1,761 | ) | ||||||
Effect of exchange rate changes on cash and equivalents | (17 | ) | (6 | ) | (12 | ) | |||||
Net (Decrease) Increase in Cash and Equivalents | (13,039 | ) | 12,638 | 117 | |||||||
Opening Cash and Equivalents | 14,179 | 1,541 | 1,424 | ||||||||
Closing Cash and Equivalents | $ | 1,140 | $ | 14,179 | $ | 1,541 | |||||
Non-Cash Investing Activities | |||||||||||
Fair value of shares issued as acquisition consideration (See Note 9) | $ | 8,004 | $ | — | $ | — | |||||
Fair value of equity awards issued as acquisition consideration (See Note 9) | $ | 613 | $ | — | $ | — |
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, 2015 | $ | 333 | $ | 4,475 | $ | 12,314 | $ | 20 | (121,967 | ) | $ | (8,239 | ) | |||||||||
Net income | — | — | 976 | — | — | — | ||||||||||||||||
Cash dividends: | ||||||||||||||||||||||
Common ($2.64 per share) | — | — | (562 | ) | — | — | — | |||||||||||||||
Common stock issued for: | ||||||||||||||||||||||
Share-based compensation and other plans, net | — | 27 | (1 | ) | 2 | 2,607 | 26 | |||||||||||||||
Share-based compensation | — | 191 | — | — | — | — | ||||||||||||||||
Common stock held in trusts, net (a) | — | — | — | — | (11 | ) | — | |||||||||||||||
Balance at September 30, 2016 | $ | 333 | $ | 4,693 | $ | 12,727 | $ | 22 | (119,371 | ) | $ | (8,212 | ) | |||||||||
Net income | — | — | 1,100 | — | — | — | ||||||||||||||||
Cash dividends: | ||||||||||||||||||||||
Common ($2.92 per share) | — | — | (645 | ) | — | — | — | |||||||||||||||
Preferred | — | — | (70 | ) | — | — | — | |||||||||||||||
Common stock issued for: | ||||||||||||||||||||||
Public equity offerings (b) | 14 | 4,810 | — | — | — | — | ||||||||||||||||
Share-based compensation and other plans, net | — | (65 | ) | (1 | ) | (3 | ) | 1,908 | 6 | |||||||||||||
Share-based compensation | — | 180 | — | — | — | — | ||||||||||||||||
Common stock held in trusts, net (a) | — | — | — | — | 7 | — | ||||||||||||||||
Repurchase of common stock (c) | — | — | — | — | (1,289 | ) | (220 | ) | ||||||||||||||
Balance at September 30, 2017 | $ | 347 | $ | 9,619 | $ | 13,111 | $ | 19 | (118,745 | ) | $ | (8,427 | ) | |||||||||
Net income | — | — | 311 | — | — | — | ||||||||||||||||
Cash dividends: | ||||||||||||||||||||||
Common ($3.00 per share) | — | — | (775 | ) | — | — | — | |||||||||||||||
Preferred | — | — | (152 | ) | — | — | — | |||||||||||||||
Common stock issued for: | ||||||||||||||||||||||
Acquisition (see Note 9) | — | 6,478 | — | — | 37,306 | 2,121 | ||||||||||||||||
Share-based compensation and other plans, net | — | (246 | ) | (2 | ) | 3 | 2,982 | 62 | ||||||||||||||
Share-based compensation | — | 328 | — | — | — | — | ||||||||||||||||
Common stock held in trusts, net (a) | — | — | — | — | (6 | ) | — | |||||||||||||||
Effect of change in accounting principle (see Note 2 and further discussion below) | — | — | 103 | — | — | — | ||||||||||||||||
Balance at September 30, 2018 | $ | 347 | $ | 16,179 | $ | 12,596 | $ | 22 | (78,463 | ) | $ | (6,243 | ) |
(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. |
(b) | In May 2017 and in connection with the Company's acquisition of Bard, which is further discussed in Note 9, the Company completed registered public offerings of equity securities including 14.025 million shares of the Company's common stock and 2.475 million shares of the Company's mandatory convertible preferred stock (ownership is held in the form of depositary shares, each representing a 1/20th interest in a share of preferred stock) for total net proceeds of $4.8 billion. If and when declared, dividends on the mandatory convertible preferred stock are payable on a cumulative basis at an annual rate of 6.125% on the liquidation preference of $1,000 per preferred share ($50 per depositary share). The shares of preferred stock are convertible to a minimum of 11.7 million and up to a maximum of 14.0 million shares of Company common stock at an exchange ratio that is based on the market price of the Company’s common stock at the date of conversion, and no later than the mandatory conversion date of May 1, 2020. |
(c) | Using proceeds received from the divestiture of the Respiratory Solutions business in the first quarter of fiscal year 2017, the Company repurchased shares of its common stock under an accelerated share repurchase agreement. |
(Millions of dollars) | Total | Foreign Currency Translation | Benefit Plans | Cash Flow Hedges | |||||||||||
Balance at September 30, 2015 | $ | (1,738 | ) | $ | (961 | ) | $ | (741 | ) | $ | (36 | ) | |||
Other comprehensive loss before reclassifications, net of taxes | (251 | ) | (50 | ) | (190 | ) | (11 | ) | |||||||
Amounts reclassified into income, net of taxes | 60 | — | 48 | 12 | |||||||||||
Balance at September 30, 2016 | $ | (1,929 | ) | $ | (1,011 | ) | $ | (883 | ) | $ | (35 | ) | |||
Other comprehensive income before reclassifications, net of taxes | 140 | 11 | 121 | 8 | |||||||||||
Amounts reclassified into income, net of taxes | 66 | — | 58 | 8 | |||||||||||
Balance at September 30, 2017 | $ | (1,723 | ) | $ | (1,001 | ) | $ | (703 | ) | $ | (18 | ) | |||
Other comprehensive (loss) income before reclassifications, net of taxes | (142 | ) | (161 | ) | 19 | — | |||||||||
Amounts reclassified into income, net of taxes | 57 | — | 52 | 5 | |||||||||||
Tax effects reclassified to retained earnings | (103 | ) | — | (99 | ) | (4 | ) | ||||||||
Balance at September 30, 2018 | $ | (1,909 | ) | $ | (1,162 | ) | $ | (729 | ) | $ | (17 | ) |
(Millions of dollars) | 2018 | 2017 | 2016 | ||||||||
Benefit Plans | |||||||||||
Income tax (provision) benefit for net gains (losses) recorded in other comprehensive income | $ | (19 | ) | $ | (60 | ) | $ | 79 |
2018 | 2017 | 2016 | ||||||
Average common shares outstanding | 258,354 | 218,943 | 212,702 | |||||
Dilutive share equivalents from share-based plans (a) (b) | 6,267 | 4,645 | 4,834 | |||||
Average common and common equivalent shares outstanding — assuming dilution | 264,621 | 223,588 | 217,536 |
(a) | For the years ended September 30, 2018 and 2017, dilutive share equivalents associated with mandatory convertible preferred stock of 12 million and 5 million, respectively, were excluded from the diluted shares outstanding calculation because the result would have been antidilutive. The issuance of the convertible preferred stock is further discussed in Note 3. For the years ended September 30, 2018, 2017 and 2016, there were no options to purchase shares of common stock which were excluded from the diluted earnings per share calculation. |
(b) | The adjustment to calculate diluted share equivalents from share-based plans in 2016 included excess tax benefits relating to share-based compensation awards. Upon the Company's adoption, as discussed in Note 2, of new accounting requirements relating to share-based compensation award-related income tax effects, the adjustments in 2018 and 2017 excluded these excess tax benefits. |
Organizational Unit | Principal Product Lines | |
Medication Delivery Solutions | Peripheral IV catheters (conventional, safety), advanced peripheral catheters (guidewire assisted peripherally inserted venous catheters, midline catheters, port access), centeral lines (peripherally inserted centeral catheters), acute dialysis catheters; vascular access technology (ultrasonic imaging); vascular care (lock solutions, prefilled flush syringes, disinfecting caps); vascular preparation (skin antiseptics, dressings, securement); needle-free IV connectors and extensions sets, IV fluids; closed-system drug transfer devices, hazardous drug detection; conventional and safety hypodermic syringes and needles, anesthesia needles (spinal, epidural) and trays; enteral syringes, sharps disposal systems. | |
Medication Management Solutions | Intravenous medication safety and infusion therapy delivery systems, including infusion pumps and dedicated disposables; medication compounding workflow systems; automated medication dispensing; automated supply management systems; medication inventory optimization and tracking systems; and analytics related to all the above products. | |
Diabetes Care | Syringes, pen needles and other products related to the injection or infusion of insulin and other drugs used in the treatment of diabetes. | |
Pharmaceutical Systems | Prefillable drug delivery systems - prefillable syringes, safety, shielding and self-injection systems - provided to pharmaceutical companies for use as containers for injectable pharmaceutical products, which are then placed on the market as drug/device combinations. |
Organizational Unit | Principal Product Lines | |
Preanalytical Systems | Integrated systems for specimen collection; safety-engineered blood collection products and systems. | |
Diagnostic 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; microbiology laboratory automation; and plated media. | |
Biosciences | Fluorescence-activated cell sorters and analyzers; monoclonal antibodies and kits for performing cell analysis; reagent systems for life science research; bench-side solutions for high-throughput targeted single-cell gene expression and RNA-Seq analysis; molecular indexing and next-generation sequencing sample preparation for genomics research; and clinical oncology, immunological (HIV) and transplantation diagnostic/monitoring reagents and analyzers. |
Organizational Unit | Principal Product Lines | |
Surgery | Hernia and soft tissue repair, biological grafts, bioresorbable grafts, biosurgery, and other surgical products; BD ChloraPrep™ surgical infection prevention products, thoracic and abdominal drainage products and V. Mueller™ surgical & laparoscopic instrumentation products, which are products previously included within the former Medication and Procedural Solutions unit of BD Medical. | |
Peripheral Intervention | Percutaneous transluminal angioplasty (“PTA”) balloon catheters, peripheral vascular stents, self-expanding and balloon-expandable stent grafts, vascular grafts, drug coated balloons, ports, biopsy, chronic dialysis, feeding, IVC filters, endovascular fistula creation devices and drainage products. | |
Urology and Critical Care | Urological drainage products, intermittent catheters, urinary and fecal management devices, kidney stone management devices, and Targeted Temperature Management. |
(Millions of dollars) | 2018 | 2017 | 2016 | ||||||||
Revenues (a) | |||||||||||
Medical (b) | $ | 8,616 | $ | 7,419 | $ | 7,965 | |||||
Life Sciences | 4,330 | 3,988 | 3,829 | ||||||||
Interventional (b) | 3,037 | 685 | 689 | ||||||||
Total Revenues | $ | 15,983 | $ | 12,093 | $ | 12,483 | |||||
Income Before Income Taxes | |||||||||||
Medical (b) (c) (d) | $ | 2,624 | $ | 1,907 | $ | 1,807 | |||||
Life Sciences (e) | 1,207 | 772 | 793 | ||||||||
Interventional (b) (c) | 306 | 248 | 245 | ||||||||
Total Segment Operating Income | 4,137 | 2,927 | 2,845 | ||||||||
Acquisitions and other restructurings | (744 | ) | (354 | ) | (728 | ) | |||||
Net interest expense | (641 | ) | (445 | ) | (367 | ) | |||||
Other unallocated items (f) | (1,578 | ) | (1,152 | ) | (676 | ) | |||||
Total Income Before Income Taxes | $ | 1,173 | $ | 976 | $ | 1,074 | |||||
Assets | |||||||||||
Medical (b) | $ | 23,493 | $ | 15,552 | $ | 16,370 | |||||
Life Sciences | 4,225 | 4,056 | 3,848 | ||||||||
Interventional (b) | 23,219 | 2,780 | 2,784 | ||||||||
Total Segment Assets | 50,938 | 22,388 | 23,002 | ||||||||
Corporate and All Other (g) | 2,966 | 15,347 | 2,584 | ||||||||
Total Assets | $ | 53,904 | $ | 37,734 | $ | 25,586 | |||||
Capital Expenditures | |||||||||||
Medical (b) | $ | 560 | $ | 486 | $ | 464 | |||||
Life Sciences | 255 | 212 | 200 | ||||||||
Interventional (b) | 65 | 16 | 18 | ||||||||
Corporate and All Other | 14 | 13 | 12 | ||||||||
Total Capital Expenditures | $ | 895 | $ | 727 | $ | 693 | |||||
Depreciation and Amortization | |||||||||||
Medical (b) | $ | 1,028 | $ | 773 | $ | 801 | |||||
Life Sciences | 275 | 254 | 254 | ||||||||
Interventional (b) | 658 | 52 | 56 | ||||||||
Corporate and All Other | 17 | 10 | 3 | ||||||||
Total Depreciation and Amortization | $ | 1,978 | $ | 1,088 | $ | 1,114 |
(Millions of dollars) | 2018 | 2017 | 2016 | ||||||||
Revenues | |||||||||||
United States | $ | 8,768 | $ | 6,504 | $ | 6,893 | |||||
Europe | 3,298 | 2,588 | 2,674 | ||||||||
Greater Asia | 2,460 | 1,744 | 1,692 | ||||||||
Other | 1,457 | 1,257 | 1,225 | ||||||||
$ | 15,983 | $ | 12,093 | $ | 12,483 | ||||||
Long-Lived Assets | |||||||||||
United States | $ | 38,982 | $ | 13,151 | $ | 14,075 | |||||
Europe | 5,640 | 4,421 | 3,747 | ||||||||
Greater Asia | 851 | 578 | 586 | ||||||||
Other | 645 | 584 | 483 | ||||||||
Corporate | 375 | 366 | 329 | ||||||||
$ | 46,494 | $ | 19,101 | $ | 19,220 |
(Millions of dollars) | 2018 | 2017 | 2016 | ||||||||
Cost of products sold | $ | 36 | $ | 30 | $ | 29 | |||||
Selling and administrative expense | 136 | 113 | 106 | ||||||||
Research and development expense | 29 | 24 | 22 | ||||||||
Acquisitions and other restructurings | 130 | 10 | 39 | ||||||||
$ | 332 | $ | 177 | $ | 196 | ||||||
Tax benefit associated with share-based compensation costs recognized | $ | 79 | $ | 61 | $ | 69 |
2018 | 2017 | 2016 | |||
Risk-free interest rate | 2.32% | 2.33% | 2.17% | ||
Expected volatility | 19.0% | 20.0% | 19.0% | ||
Expected dividend yield | 1.33% | 1.71% | 1.76% | ||
Expected life | 7.4 years | 7.5 years | 7.6 years | ||
Fair value derived | $46.10 | $33.81 | $27.69 |
SARs (in thousands) | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term (Years) | Aggregate Intrinsic Value (Millions of dollars) | |||||||||
Balance at October 1 | 6,466 | $ | 117.94 | |||||||||
Granted | 4,295 | 123.97 | ||||||||||
Exercised | (2,511 | ) | 98.67 | |||||||||
Forfeited, canceled or expired | (264 | ) | 163.69 | |||||||||
Balance at September 30 | 7,986 | $ | 125.73 | 5.88 | $ | 1,080 | ||||||
Vested and expected to vest at September 30 | 7,732 | $ | 124.10 | 5.81 | $ | 1,059 | ||||||
Exercisable at September 30 | 5,450 | $ | 102.66 | 4.90 | $ | 863 |
(Millions of dollars) | 2018 | 2017 | 2016 | ||||||||
Total intrinsic value of SARs exercised | $ | 333 | $ | 148 | $ | 148 | |||||
Tax benefit realized from SAR exercises | $ | 90 | $ | 53 | $ | 52 | |||||
Total fair value of SARs vested | $ | 107 | $ | 30 | $ | 24 |
Performance-Based | Time-Vested | |||||||||||||
Stock Units (in thousands) | Weighted Average Grant Date Fair Value | Stock Units (in thousands) | Weighted Average Grant Date Fair Value | |||||||||||
Balance at October 1 | 1,080 | $ | 161.64 | 2,136 | $ | 142.06 | ||||||||
Granted | 338 | 251.75 | 2,903 | 216.06 | ||||||||||
Distributed | (119 | ) | 156.65 | (1,368 | ) | 167.86 | ||||||||
Forfeited or canceled | (267 | ) | 173.67 | (906 | ) | 178.87 | ||||||||
Balance at September 30 | 1,032 | (a) | $ | 190.57 | 2,765 | $ | 194.92 | |||||||
Expected to vest at September 30 | 548 | (b) | $ | 192.35 | 2,585 | $ | 193.90 |
(a) | Based on 200% of target payout. |
(b) | Net of expected forfeited units and units in excess of the expected performance payout of 64 thousand and 420 thousand shares, respectively. |
Performance-Based | Time-Vested | ||||||||||||||||||||||
2018 | 2017 | 2016 | 2018 | 2017 | 2016 | ||||||||||||||||||
Weighted average grant date fair value of units granted | $ | 251.75 | $ | 174.92 | $ | 153.73 | $ | 216.06 | $ | 165.96 | $ | 145.57 |
Performance-Based | Time-Vested | ||||||||||||||||||||||
(Millions of dollars) | 2018 | 2017 | 2016 | 2018 | 2017 | 2016 | |||||||||||||||||
Total fair value of units vested | $ | 31 | $ | 32 | $ | 22 | $ | 362 | $ | 139 | $ | 114 |
Pension Plans | |||||||||||
(Millions of dollars) | 2018 | 2017 | 2016 | ||||||||
Service cost | $ | 136 | $ | 110 | $ | 81 | |||||
Interest cost | 90 | 61 | 72 | ||||||||
Expected return on plan assets | (154 | ) | (112 | ) | (109 | ) | |||||
Amortization of prior service credit | (13 | ) | (14 | ) | (15 | ) | |||||
Amortization of loss | 78 | 92 | 77 | ||||||||
Settlements | 2 | — | 7 | ||||||||
Net pension cost | $ | 137 | $ | 138 | $ | 113 | |||||
Net pension cost included in the preceding table that is attributable to international plans | $ | 34 | $ | 43 | $ | 35 |
Pension Plans | |||||||
(Millions of dollars) | 2018 | 2017 | |||||
Change in benefit obligation: | |||||||
Beginning obligation | $ | 2,647 | $ | 2,719 | |||
Service cost | 136 | 110 | |||||
Interest cost | 90 | 61 | |||||
Plan amendments | — | (1 | ) | ||||
Benefits paid | (162 | ) | (123 | ) | |||
Impact of acquisitions (divestitures) | 758 | (19 | ) | ||||
Actuarial gain | (82 | ) | (134 | ) | |||
Settlements | (122 | ) | (1 | ) | |||
Other, includes translation | (19 | ) | 36 | ||||
Benefit obligation at September 30 | $ | 3,246 | $ | 2,647 | |||
Change in fair value of plan assets: | |||||||
Beginning fair value | $ | 1,932 | $ | 1,855 | |||
Actual return on plan assets | 70 | 134 | |||||
Employer contribution | 400 | 54 | |||||
Benefits paid | (162 | ) | (123 | ) | |||
Impact of acquisitions (divestitures) | 539 | (13 | ) | ||||
Settlements | (122 | ) | (1 | ) | |||
Other, includes translation | (15 | ) | 26 | ||||
Plan assets at September 30 | $ | 2,642 | $ | 1,932 | |||
Funded Status at September 30: | |||||||
Unfunded benefit obligation | $ | (604 | ) | $ | (715 | ) | |
Amounts recognized in the Consolidated Balance Sheets at September 30: | |||||||
Other | $ | 15 | $ | 9 | |||
Salaries, wages and related items | (15 | ) | (17 | ) | |||
Long-term Employee Benefit Obligations | (604 | ) | (707 | ) | |||
Net amount recognized | $ | (604 | ) | $ | (715 | ) | |
Amounts recognized in Accumulated other comprehensive income (loss) before income taxes at September 30: | |||||||
Prior service credit | $ | 60 | $ | 74 | |||
Net actuarial loss | (982 | ) | (1,065 | ) | |||
Net amount recognized | $ | (921 | ) | $ | (991 | ) |
Accumulated Benefit Obligation Exceeds the Fair Value of Plan Assets | Projected Benefit Obligation Exceeds the Fair Value of Plan Assets | ||||||||||||||
(Millions of dollars) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Projected benefit obligation | $ | 2,618 | $ | 2,551 | $ | 3,121 | $ | 2,613 | |||||||
Accumulated benefit obligation | $ | 2,533 | $ | 2,470 | |||||||||||
Fair value of plan assets | $ | 2,012 | $ | 1,833 | $ | 2,502 | $ | 1,889 |
2018 | 2017 | 2016 | ||||||
Net Cost | ||||||||
Discount rate: | ||||||||
U.S. plans (a) | 3.71 | % | 3.42 | % | 4.15 | % | ||
International plans | 2.30 | 1.70 | 2.84 | |||||
Expected return on plan assets: | ||||||||
U.S. plans | 7.20 | 7.25 | 7.50 | |||||
International plans | 4.95 | 4.65 | 5.02 | |||||
Rate of compensation increase: | ||||||||
U.S. plans | 4.51 | 4.25 | 4.25 | |||||
International plans | 2.31 | 2.33 | 2.33 | |||||
Benefit Obligation | ||||||||
Discount rate: | ||||||||
U.S. plans | 4.26 | 3.72 | 3.42 | |||||
International plans | 2.30 | 2.25 | 1.70 | |||||
Rate of compensation increase: | ||||||||
U.S. plans | 4.29 | 4.51 | 4.25 | |||||
International plans | 2.36 | 2.30 | 2.33 |
(a) | The Company calculated the service and interest components utilizing an approach that discounts the individual expected cash flows using the applicable spot rates derived from the yield curve over the projected cash flow period. |
(Millions of dollars) | Pension Plans | Other Postretirement Benefits | |||||
2019 | $ | 213 | $ | 14 | |||
2020 | 202 | 14 | |||||
2021 | 208 | 13 | |||||
2022 | 209 | 13 | |||||
2023 | 214 | 12 | |||||
2024-2028 | 1,096 | 54 |
(Millions of dollars) | Total U.S. Plan Asset Balances | Investments Measured at Net Asset Value (a) | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | 2018 | 2017 | 2018 | 2017 | 2018 | 2017 | ||||||||||||||||||||||||||||||
Fixed Income: | |||||||||||||||||||||||||||||||||||||||
Mortgage and asset-backed securities | $ | 28 | $ | 155 | $ | — | $ | — | $ | — | $ | — | $ | 28 | $ | 155 | $ | — | $ | — | |||||||||||||||||||
Corporate bonds | 484 | 232 | — | — | 101 | 89 | 383 | 144 | — | — | |||||||||||||||||||||||||||||
Government and agency-U.S. | 257 | 107 | — | — | 199 | 83 | 57 | 25 | — | — | |||||||||||||||||||||||||||||
Government and agency-Foreign | 122 | 98 | 8 | 12 | 85 | 63 | 28 | 22 | — | — | |||||||||||||||||||||||||||||
Equity securities | 536 | 369 | 360 | 307 | 176 | 62 | — | — | — | — | |||||||||||||||||||||||||||||
Cash and cash equivalents | 39 | 40 | — | — | 39 | 40 | — | — | — | — | |||||||||||||||||||||||||||||
Other | 356 | 252 | 356 | 217 | — | 34 | — | — | — | — | |||||||||||||||||||||||||||||
Fair value of plan assets | $ | 1,821 | $ | 1,254 | $ | 724 | $ | 537 | $ | 600 | $ | 371 | $ | 497 | $ | 346 | $ | — | $ | — |
(a) | As per applicable disclosure requirements, certain investments that were measured at net asset value per share or its equivalent have not been categorized within the fair value hierarchy. Values of such assets are based on the corroborated net asset value provided by the fund administrator. |
(Millions of dollars) | Total International Plan Asset Balances | Investments Measured at Net Asset Value (a) | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | 2018 | 2017 | 2018 | 2017 | 2018 | 2017 | ||||||||||||||||||||||||||||||
Fixed Income: | |||||||||||||||||||||||||||||||||||||||
Corporate bonds | $ | 28 | $ | 14 | $ | — | $ | — | $ | 14 | $ | — | $ | 14 | $ | 13 | $ | — | $ | — | |||||||||||||||||||
Government and agency-U.S. | 6 | 5 | — | — | 3 | 1 | 3 | 3 | — | — | |||||||||||||||||||||||||||||
Government and agency-Foreign | 150 | 127 | — | — | 104 | 83 | 46 | 45 | — | — | |||||||||||||||||||||||||||||
Other fixed income | 96 | 64 | — | — | 63 | 57 | 33 | 7 | — | — | |||||||||||||||||||||||||||||
Equity securities | 314 | 256 | 15 | 13 | 299 | 242 | — | — | — | — | |||||||||||||||||||||||||||||
Cash and cash equivalents | 9 | 28 | — | — | 9 | 28 | — | — | — | — | |||||||||||||||||||||||||||||
Real estate | 30 | 26 | — | — | — | — | 30 | 26 | — | — | |||||||||||||||||||||||||||||
Insurance contracts | 114 | 98 | — | — | — | — | — | — | 114 | 98 | |||||||||||||||||||||||||||||
Other | 74 | 62 | — | — | 55 | 47 | 20 | 15 | — | — | |||||||||||||||||||||||||||||
Fair value of plan assets | $ | 821 | $ | 678 | $ | 15 | $ | 13 | $ | 546 | $ | 459 | $ | 146 | $ | 108 | $ | 114 | $ | 98 |
(a) | As per applicable disclosure requirements, certain investments that were measured at net asset value per share or its equivalent have not been categorized within the fair value hierarchy. Values of such assets are based on the corroborated net asset value provided by the fund administrator. |
(Millions of dollars) | Insurance Contracts | ||
Balance at September 30, 2016 | $ | 102 | |
Actual return on plan assets: | |||
Relating to assets held at September 30, 2016 | 1 | ||
Purchases, sales and settlements, net | (11 | ) | |
Transfers in from other categories | 1 | ||
Exchange rate changes | 4 | ||
Balance at September 30, 2017 | $ | 98 | |
Actual return on plan assets: | |||
Relating to assets held at September 30, 2017 | 2 | ||
Purchases, sales and settlements, net | 15 | ||
Transfers in from other categories | 1 | ||
Exchange rate changes | (2 | ) | |
Balance at September 30, 2018 | $ | 114 |
(Millions of dollars) | |||
Cash consideration | $ | 16,400 | |
Non-cash consideration-fair value of shares issued | 8,004 | ||
Non-cash consideration-fair value of equity awards issued | 613 | ||
Total consideration transferred | $ | 25,017 |
(Millions of dollars, except per share data) | |||
Total Bard shares outstanding | 73.359 | ||
Conversion factor | 0.5077 | ||
Conversion of Bard shares outstanding | 37.243 | ||
Conversion of pre-acquisition equity awards | 0.104 | ||
Total number of the Company's share issued | 37.347 | ||
Closing price of the Company’s stock | $ | 214.32 | |
Fair value of the Company’s issued shares | $ | 8,004 |
(Millions of dollars) | |||
Cash and equivalents | $ | 1,480 | |
Trade receivables | 472 | ||
Inventories | 974 | ||
Property, plant and equipment | 553 | ||
Developed technology | 10,469 | ||
Customer relationships | 1,146 | ||
Other assets | 624 | ||
Total identifiable assets acquired | 15,718 | ||
Payables, accrued expenses and other liabilities | 1,276 | ||
Short term and long-term debt | 1,692 | ||
Product liability and other legal reserves | 2,029 | ||
Deferred tax liabilities | 1,713 | ||
Total liabilities assumed | 6,711 | ||
Net identifiable assets acquired | 9,007 | ||
Goodwill | 16,009 | ||
Net assets acquired | $ | 25,017 |
(Millions of dollars, except per share data) | |||||||
2018 | 2017 | ||||||
Revenues | $ | 16,947 | $ | 15,781 | |||
Net Income | $ | 390 | $ | 1,145 | |||
Diluted Earnings per Share | $ | 0.90 | $ | 3.60 |
Employee Termination | Other | Total | |||||||||||||||||||||
(Millions of dollars) | Bard | CareFusion/Other Initiatives (a) | Bard (b) | CareFusion/Other Initiatives (c) | Bard | CareFusion/Other Initiatives | |||||||||||||||||
Balance at September 30, 2015 | $ | — | $ | 62 | $ | — | $ | — | $ | — | $ | 62 | |||||||||||
Charged to expense | — | 81 | — | 445 | — | 526 | |||||||||||||||||
Cash payments | — | (76 | ) | — | (72 | ) | — | (148 | ) | ||||||||||||||
Non-cash settlements | — | — | — | (39 | ) | — | (39 | ) | |||||||||||||||
Other adjustments | — | — | — | (332 | ) | — | (332 | ) | |||||||||||||||
Balance at September 30, 2016 | $ | — | $ | 67 | $ | — | $ | 2 | $ | — | $ | 69 | |||||||||||
Charged to expense | — | 27 | — | 58 | — | 85 | |||||||||||||||||
Cash payments | — | (45 | ) | — | (12 | ) | — | (57 | ) | ||||||||||||||
Non-cash settlements | — | — | — | (9 | ) | — | (9 | ) | |||||||||||||||
Other adjustments | — | — | — | (33 | ) | — | (33 | ) | |||||||||||||||
Balance at September 30, 2017 | $ | — | $ | 49 | $ | — | $ | 6 | $ | — | $ | 55 | |||||||||||
Charged to expense | 136 | 30 | 156 | 22 | 292 | 52 | |||||||||||||||||
Cash payments | (103 | ) | (56 | ) | (3 | ) | (23 | ) | (106 | ) | (79 | ) | |||||||||||
Non-cash settlements | — | — | (153 | ) | (1 | ) | (153 | ) | (1 | ) | |||||||||||||
Other adjustments | — | — | — | — | — | — | |||||||||||||||||
Balance at September 30, 2018 | $ | 33 | $ | 23 | $ | — | $ | 4 | $ | 33 | $ | 27 |
(a) | Expenses in fiscal year 2016 included $40 million relating to the CareFusion acquisition as well as $13 million for employee termination costs resulting from the Company's transition of certain elements of its information technology function to an outsourced model as further disclosed below. |
(b) | Expenses in 2018 represented the cost associated with the conversion of certain pre-acquisition equity awards of Bard to BD equity awards as well as costs relating to Bard’s pension plan, partially offset by a gain on the sale of the Company's soft tissue core needle biopsy product line which was recorded in the second quarter of fiscal year 2018. |
(c) | Expenses in 2016 included $214 million non-cash charge to recognize the impairment of capitalized internal-use software assets held for sale upon the Company’s decision to transition certain business information systems assets to a third party. Expenses in 2016 also included non-cash impairment charges of $81 million, after-tax, relating to the Company's disposition of certain non-core businesses, including the Company's sale of a majority interest in its Respiratory Solutions business during the first quarter of fiscal year 2017, which is further discussed in Note 10. |
2018 | 2017 | ||||||||||||||
(Millions of dollars) | Gross Carrying Amount | Accumulated Amortization | Gross Carrying Amount | Accumulated Amortization | |||||||||||
Amortized intangible assets | |||||||||||||||
Developed technology | $ | 13,966 | $ | 1,782 | $ | 3,508 | $ | 1,029 | |||||||
Customer relationships | 4,584 | 861 | 3,393 | 564 | |||||||||||
Product rights | 121 | 58 | 131 | 54 | |||||||||||
Trademarks | 407 | 84 | 408 | 65 | |||||||||||
Patents and other | 397 | 288 | 370 | 274 | |||||||||||
Amortized intangible assets | $ | 19,475 | $ | 3,073 | $ | 7,811 | $ | 1,986 | |||||||
Unamortized intangible assets | |||||||||||||||
Acquired in-process research and development | $ | 37 | $ | 67 | |||||||||||
Trademarks | 2 | 2 | |||||||||||||
Unamortized intangible assets | $ | 39 | $ | 69 |
(Millions of dollars) | Medical | Life Sciences | Interventional | Total | |||||||||||
Goodwill as of September 30, 2016 | $ | 6,688 | $ | 731 | $ | — | $ | 7,419 | |||||||
Acquisitions (a) | 119 | 24 | — | 143 | |||||||||||
Divestiture (b) | (25 | ) | — | — | (25 | ) | |||||||||
Purchase accounting adjustments | 4 | — | — | 4 | |||||||||||
Currency translation | 16 | 6 | — | 22 | |||||||||||
Goodwill as of September 30, 2017 | $ | 6,802 | $ | 761 | $ | — | $ | 7,563 | |||||||
Acquisitions (c) | 3,923 | 76 | 11,218 | 15,217 | |||||||||||
Divestiture (b) | — | (59 | ) | (57 | ) | (116 | ) | ||||||||
Reallocation of goodwill for change in segment and reporting unit composition (d) | (877 | ) | — | 877 | — | ||||||||||
Purchase accounting adjustments (e) | 228 | (2 | ) | 732 | 959 | ||||||||||
Currency translation | (22 | ) | (2 | ) | — | (24 | ) | ||||||||
Goodwill as of September 30, 2018 | $ | 10,054 | $ | 775 | $ | 12,771 | $ | 23,600 |
(a) | Represents goodwill recognized relative to certain acquisitions which were not material individually or in the aggregate. |
(b) | Represents goodwill derecognized upon the Company's sale of certain businesses, as further discussed in Note 10. |
(c) | Represents goodwill primarily recognized upon the Company's acquisition of Bard in fiscal year 2018, which is further discussed in Note 9. Also includes goodwill recognized relative to certain acquisitions which were not material individually or in the aggregate. |
(d) | Represents the reassignment of goodwill, determined based upon a relative fair value allocation approach, associated with the movement of certain product offerings which were previously reported in the Medical segment and which are now reported in the Interventional segment as further discussed in Note 6. |
(e) | The purchase accounting adjustments increasing goodwill were primarily driven by the valuation of Bard developed technology assets, the associated deferred tax liability changes, increases to legal reserves and the alignment of the combined organization's accounting policies with respect to accrued liabilities and other accounts. |
(Millions of dollars) | 2018 | 2017 | |||||||
Current portion of long-term debt | |||||||||
2.133% Notes due June 6, 2019 | 724 | — | |||||||
0.368% Notes due June 6, 2019 | (a) | 1,157 | — | ||||||
4.900% Notes due April 15, 2018 | — | 200 | |||||||
Term Loan Facility due September 5, 2019 | (b) | 710 | — | ||||||
Other | 10 | 3 | |||||||
Total short-term debt | $ | 2,601 | $ | 203 |
(a) | Includes notes issued during fiscal year 2018, as further discussed below. |
(b) | Term loan facility entered into during the fourth quarter of fiscal year 2018, as further discussed below. |
(Millions of dollars) | 2018 | 2017 | |||||||
2.133% Notes due June 6, 2019 | $ | — | $ | 723 | |||||
0.368% Notes due June 6, 2019 | — | 823 | |||||||
2.675% Notes due December 15, 2019 | 1,123 | 1,121 | |||||||
2.404% Notes due June 5, 2020 | 998 | 996 | |||||||
3.250% Notes due November 12, 2020 | 699 | 698 | |||||||
Floating Rate Notes due December 29, 2020 | (a) | 996 | — | ||||||
3.125% Notes due November 8, 2021 | 990 | 1,003 | |||||||
2.894% Notes due June 6, 2022 | 1,793 | 1,791 | |||||||
Floating Rate Notes due June 6, 2022 | 498 | 497 | |||||||
1.000% Notes due December 15, 2022 | 576 | 586 | |||||||
3.300% Notes due March 1, 2023 | 296 | 296 | |||||||
1.401% Notes due May 24, 2023 | (a) | 346 | — | ||||||
3.875% Notes due May 15, 2024 | 182 | 182 | |||||||
3.363% Notes due June 6, 2024 | 1,738 | 1,736 | |||||||
3.734% Notes due December 15, 2024 | 1,368 | 1,367 | |||||||
3.020% Notes due May 24, 2025 | (a) | 324 | — | ||||||
6.700% Notes due December 1, 2026 | (b) | 177 | — | ||||||
1.900% Notes due December 15, 2026 | 575 | 585 | |||||||
3.700% Notes due June 6, 2027 | 2,383 | 2,381 | |||||||
7.000% Debentures due August 1, 2027 | 156 | 166 | |||||||
6.700% Debentures due August 1, 2028 | 154 | 164 | |||||||
6.000% Notes due May 15, 2039 | 246 | 246 | |||||||
5.000% Notes due November 12, 2040 | 296 | 296 | |||||||
4.875% Notes due May 15, 2044 | 331 | 331 | |||||||
4.685% Notes due December 15, 2044 | 1,159 | 1,189 | |||||||
4.669% Notes due June 6, 2047 | 1,484 | 1,484 | |||||||
Other long-term debt | 8 | 3 | |||||||
Total Long-Term Debt | $ | 18,894 | $ | 18,667 |
(a) | Includes notes issued during fiscal year 2018, as further discussed below. |
(b) | Includes notes assumed in connection with the Company's acquisition of Bard, as further discussed below. |
(Millions of dollars) | ||||||||
Interest Rate and Maturity | Aggregate Principal Amount | Principal Amount Accepted for Exchange | ||||||
4.400% Notes due January 15, 2021 | $ | 500 | $ | 432 | ||||
3.000% Notes due May 15, 2026 | 500 | 470 | ||||||
6.700% Notes due December 1, 2026 | 150 | 137 | ||||||
Total | $ | 1,150 | $ | 1,039 |
(Millions of dollars) | 2018 | 2017 | 2016 | ||||||||
Charged to operations | $ | 706 | $ | 521 | $ | 388 | |||||
Capitalized | 42 | 32 | 30 | ||||||||
Total interest costs | $ | 748 | $ | 553 | $ | 418 | |||||
Interest paid, net of amounts capitalized | $ | 674 | $ | 435 | $ | 392 |
(Millions of dollars) | 2018 | 2017 | 2016 | ||||||||
Current: | |||||||||||
Federal | $ | 665 | $ | (230 | ) | $ | 312 | ||||
State and local, including Puerto Rico | 73 | (20 | ) | 17 | |||||||
Foreign | 387 | 200 | 286 | ||||||||
$ | 1,124 | $ | (50 | ) | $ | 616 | |||||
Deferred: | |||||||||||
Domestic | $ | (201 | ) | $ | (64 | ) | $ | (441 | ) | ||
Foreign | (61 | ) | (10 | ) | (78 | ) | |||||
(262 | ) | (74 | ) | (519 | ) | ||||||
Income tax provision (benefit) | $ | 862 | $ | (124 | ) | $ | 97 |
(Millions of dollars) | 2018 | 2017 | 2016 | ||||||||
Domestic, including Puerto Rico | $ | (135 | ) | $ | (386 | ) | $ | (232 | ) | ||
Foreign | 1,308 | 1,362 | 1,306 | ||||||||
Income Before Income Taxes | $ | 1,173 | $ | 976 | $ | 1,074 |
(Millions of dollars) | 2018 | 2017 | 2016 | ||||||||
Balance at October 1 | $ | 349 | $ | 469 | $ | 593 | |||||
Increase due to acquisitions | 140 | — | — | ||||||||
Increase due to current year tax positions | 43 | 41 | 81 | ||||||||
Increase due to prior year tax positions | 43 | 19 | 10 | ||||||||
Decreases due to prior year tax positions | — | (30 | ) | (3 | ) | ||||||
Decrease due to settlements with tax authorities | (29 | ) | (145 | ) | (147 | ) | |||||
Decrease due to lapse of statute of limitations | (3 | ) | (5 | ) | (65 | ) | |||||
Balance at September 30 | $ | 543 | $ | 349 | $ | 469 |
2018 | 2017 | ||||||||||||||
(Millions of dollars) | Assets | Liabilities | Assets | Liabilities | |||||||||||
Compensation and benefits | $ | 458 | $ | — | $ | 618 | $ | — | |||||||
Property and equipment | — | 253 | — | 244 | |||||||||||
Intangibles | — | 2,948 | — | 1,584 | |||||||||||
Loss and credit carryforwards | 1,290 | — | 1,098 | — | |||||||||||
Other | 707 | 384 | 531 | 164 | |||||||||||
2,455 | 3,585 | 2,247 | 1,992 | ||||||||||||
Valuation allowance | (1,181 | ) | — | (1,032 | ) | — | |||||||||
Net (a) | $ | 1,275 | $ | 3,585 | $ | 1,216 | $ | 1,992 |
(a) | Net deferred tax assets are included in Other Assets and net deferred tax liabilities are included in Deferred Income Taxes and Other on the consolidated balance sheets. |
2018 | 2017 | 2016 | ||||||
Federal statutory tax rate | 24.5 | % | 35.0 | % | 35.0 | % | ||
New U.S. tax legislation (see discussion above) | 54.6 | — | — | |||||
State and local income taxes, net of federal tax benefit | 0.8 | (2.6 | ) | 1.5 | ||||
Effect of foreign and Puerto Rico earnings and foreign tax credits | 7.3 | (40.8 | ) | (23.7 | ) | |||
Effect of Research Credits and Domestic Production Activities | (2.8 | ) | (2.7 | ) | (4.4 | ) | ||
Effect of change in accounting for excess tax benefit relating to share-based compensation (see Note 2) | (6.7 | ) | (7.9 | ) | — | |||
Effect of gain on divestitures | 1.3 | — | — | |||||
Effect of uncertain tax position | 3.3 | — | — | |||||
Effect of valuation allowance release | (4.8 | ) | — | — | ||||
Effect of application for change in accounting method | (4.5 | ) | — | — | ||||
Effect of nondeductible compensation | 1.6 | — | — | |||||
Other, net | (1.1 | ) | 6.3 | 0.7 | ||||
Effective income tax rate | 73.5 | % | (12.7 | )% | 9.1 | % |
(Millions of dollars) | 2018 | 2017 | 2016 | ||||||||
Losses on debt extinguishment (a) | $ | (16 | ) | $ | (73 | ) | $ | — | |||
Vyaire Medical-related amounts (b) | 288 | (3 | ) | — | |||||||
Other equity investment income | 8 | 3 | 8 | ||||||||
Losses on undesignated foreign exchange derivatives, net | (14 | ) | (11 | ) | (3 | ) | |||||
Royalty income (c) | 51 | — | — | ||||||||
Gains on previously held investments (d) | — | 24 | — | ||||||||
Other | — | 3 | 7 | ||||||||
Other income (expense), net | $ | 318 | $ | (57 | ) | $ | 11 |
(a) | Represents losses recognized upon our repurchase and extinguishment of certain senior notes, as further discussed in Note 15. |
(b) | Represents amounts related to the Company’s 2017 divestiture of a controlling interest in its former Respiratory Solutions business and the subsequent sale in 2018 of the remaining ownership interest. The amount in 2018 includes the gain on the sale of the remaining non-controlling interest and transition services agreement income, net of the Company's share of equity investee results. The amount in 2017 represents the Company’s share of equity investee results, net of transition services agreement income. Additional disclosures regarding these divestiture transactions are provided in Note 10 in the Notes to Consolidated Financial Statements. |
(c) | Represents the royalty income stream acquired in the Bard transaction, net of non-cash purchase accounting amortization. The royalty income stream was previously reported by Bard as revenues. |
(d) | Represents an acquisition-date accounting gain related to a previously-held equity method investment in an entity the Company acquired. |
(Millions of dollars) | Allowance for Doubtful Accounts | Allowance for Cash Discounts | Total | ||||||||
Balance at September 30, 2015 | $ | 53 | $ | 9 | $ | 62 | |||||
Additions charged to costs and expenses | 23 | 37 | 60 | ||||||||
Deductions and other | (14 | ) | (a) | (40 | ) | (55 | ) | ||||
Balance at September 30, 2016 | $ | 61 | $ | 6 | $ | 67 | |||||
Additions charged to costs and expenses | 25 | 43 | 68 | ||||||||
Deductions and other | (32 | ) | (a) | (45 | ) | (76 | ) | ||||
Balance at September 30, 2017 | $ | 54 | $ | 4 | $ | 58 | |||||
Additions charged to costs and expenses | 31 | 58 | 89 | ||||||||
Deductions and other | (11 | ) | (a) | (50 | ) | (61 | ) | ||||
Balance at September 30, 2018 | $ | 75 | $ | 12 | $ | 86 |
(a) | Accounts written off. |
(Millions of dollars) | 2018 | 2017 | |||||
Materials | $ | 510 | $ | 313 | |||
Work in process | 297 | 271 | |||||
Finished products | 1,644 | 1,234 | |||||
$ | 2,451 | $ | 1,818 |
(Millions of dollars) | 2018 | 2017 | |||||
Land | $ | 173 | $ | 146 | |||
Buildings | 2,724 | 2,496 | |||||
Machinery, equipment and fixtures | 7,405 | 6,584 | |||||
Leasehold improvements | 182 | 163 | |||||
10,485 | 9,389 | ||||||
Less accumulated depreciation and amortization | 5,111 | 4,752 | |||||
$ | 5,375 | $ | 4,638 |
Millions of dollars, except per share amounts | 2018 | |||||||||||||||||||
1st | 2nd | 3rd | 4th | Year | ||||||||||||||||
Revenues | $ | 3,080 | $ | 4,222 | $ | 4,278 | $ | 4,402 | $ | 15,983 | ||||||||||
Gross Profit | 1,550 | 1,604 | 2,017 | 2,091 | 7,262 | |||||||||||||||
Net (Loss) Income | (136 | ) | (12 | ) | 594 | (135 | ) | 311 | ||||||||||||
(Loss) earnings per Share: (a) | ||||||||||||||||||||
Basic | (0.76 | ) | (0.19 | ) | 2.08 | (0.64 | ) | 0.62 | ||||||||||||
Diluted | (0.76 | ) | (0.19 | ) | 2.03 | (0.64 | ) | 0.60 |
2017 | ||||||||||||||||||||
1st | 2nd | 3rd | 4th | Year | ||||||||||||||||
Revenues | $ | 2,922 | $ | 2,969 | $ | 3,035 | $ | 3,166 | $ | 12,093 | ||||||||||
Gross Profit | 1,452 | 1,432 | 1,504 | 1,554 | 5,942 | |||||||||||||||
Net Income (Loss) | 562 | 344 | (132 | ) | 327 | 1,100 | ||||||||||||||
Earnings (loss) per Share: (a) | ||||||||||||||||||||
Basic | 2.64 | 1.61 | (0.75 | ) | 1.27 | 4.70 | ||||||||||||||
Diluted | 2.58 | 1.58 | (0.75 | ) | 1.24 | 4.60 |
(a) | Earnings per share amounts are calculated from the underlying whole-dollar amounts. The sums of basic and diluted earnings per share for the quarters of 2018 and 2017 do not equal year-to-date amounts due to the impacts of shares issued during these fiscal years, in connection with the Bard acquisition, on the weighted average common shares included in the calculations of basic and diluted earnings per share. Additional disclosures regarding shares issued related to the Bard acquisition are provided in Notes 3 and 9. |
(a)(1) | Financial Statements |
• | Reports of Independent Registered Public Accounting Firm |
• | Consolidated Statements of Income — Years ended September 30, 2018, 2017 and 2016 |
• | Consolidated Statements of Comprehensive Income — Years ended September 30, 2018, 2017 and 2016 |
• | Consolidated Balance Sheets — September 30, 2018 and 2017 |
• | Consolidated Statements of Cash Flows — Years ended September 30, 2018, 2017 and 2016 |
• | Notes to Consolidated Financial Statements |
(2) | Financial Statement Schedules |
(3) | Exhibits |
By: | /s/ GARY DEFAZIO | ||
Gary DeFazio | |||
Senior Vice President and Corporate Secretary |
Name | Capacity | |
/S/ VINCENT A. FORLENZA | Chairman and Chief Executive Officer | |
Vincent A. Forlenza | (Principal Executive Officer) | |
/S/ CHRISTOPHER R. REIDY | Executive Vice President, Chief Financial Officer | |
Christopher R. Reidy | and Chief Administrative Officer | |
(Principal Financial Officer) | ||
/S/ CHARLES R. BODNER | Senior Vice President, Corporate Finance, | |
Charles R. Bodner | and Chief Accounting Officer | |
(Principal Accounting Officer) | ||
Catherine M. Burzik* | Director | |
R. Andrew Eckert* | Director | |
Claire M. Fraser* | Director | |
Jeffrey W. Henderson* | Director | |
Christopher Jones* | Director | |
Marshall O. Larsen* | Director | |
Gary A. Mecklenburg* | Director |
Name | Capacity | |
David F. Melcher* | Director | |
Willard J. Overlock, Jr.* | Director | |
Claire Pomeroy* | Director | |
Rebecca W. Rimel* | Director | |
Timothy M. Ring* | Director | |
Bertram L. Scott* | Director | |
*By: | /s/ GARY DEFAZIO | |
Gary DeFazio | ||
Attorney-in-fact |
Exhibit Number | Description | Method of Filing | ||
Agreement and Plan of Merger, dated as of April 23, 2017, among C.R. Bard, Inc., Becton, Dickinson and Company and Lambda Corp. + | Incorporated by reference to Exhibit 2.1 to the registrant’s Current Report on Form 8-K filed on April 24, 2017. | |||
Amendment No. 1, dated July 28, 2017, to the Agreement and Plan of Merger, dated as of April 23, 2017, among C.R. Bard, Inc., Becton, Dickinson and Company and Lambda Corp. | Incorporated by reference to Exhibit 2.1 to the registrant’s Current Report on Form 8-K filed on July 28, 2017. | |||
Restated Certificate of Incorporation, dated as of January 29, 2013. | Incorporated by reference to Exhibit 3(a) to the registrant’s Quarterly Report on Form 10-Q for the period ended March 31, 2013. | |||
Certificate of Amendment of the Restated Certificate of Incorporation, filed with the State of New Jersey Department of Treasury and effective May 15, 2017. | Incorporated by reference to Exhibit 4.1 to the registrant’s registration statement on Form 8-A filed on May 16, 2017. | |||
By-Laws, as amended and restated as of April 24, 2018. | Incorporated by reference to Exhibit 3.1 to the registrant’s Current Report on Form 8-K filed on April 25, 2018. | |||
Indenture, dated as of March 1, 1997, between the registrant and The Bank of New York Mellon Trust Company, N.A. (as successor to JPMorgan Chase Bank) | Incorporated by reference to Exhibit 4(a) to Form 8-K filed by the registrant on July 31, 1997 | |||
Form of 7% Debentures due August 1, 2027. | Incorporated by reference to Exhibit 4(d) of the registrant’s Current Report on Form 8-K filed on July 31, 1997. | |||
Form of 6.70% Debentures due August 1, 2028. | Incorporated by reference to Exhibit 4(d) of the registrant’s Current Report on Form 8-K filed on July 29, 1999. | |||
Form of 6.00% Notes due May 15, 2039. | Incorporated by reference to Exhibit 4.2 of the registrant's Current Report on Form 8-K filed on May 13, 2009. | |||
Form of 3.25% Notes due November 12, 2020. | Incorporated by reference to Exhibit 4.1 of the registrant’s Current Report on Form 8-K filed on November 12, 2010. | |||
Form of 5.00% Notes due November 12, 2040. | Incorporated by reference to Exhibit 4.2 of the registrant’s Current Report on Form 8-K filed on November 12, 2010. | |||
Form of 3.125% Notes due November 8, 2021. | Incorporated by reference to Exhibit 4.2 of the registrant’s Current Report on Form 8-K filed on November 8, 2011. | |||
Form of 2.675% Notes due December 15, 2019. | Incorporated by reference to Exhibit 4.3 of the registrant’s Current Report on Form 8-K filed on December 15, 2014. | |||
Form of 3.734% Notes due December 15, 2024. | Incorporated by reference to Exhibit 4.4 of the registrant’s Current Report on Form 8-K filed on December 15, 2014. |
Exhibit Number | Description | Method of Filing | ||
Form of 4.685% Notes due December 15, 2044. | Incorporated by reference to Exhibit 4.5 of the registrant’s Current Report on Form 8-K filed on December 15, 2014. | |||
Form of 3.300% Senior Notes due March 1, 2023. | Incorporated by reference to Exhibit 4.4 of the registrant’s Current Report on Form 8-K filed on April 29, 2015. | |||
Form of 3.875% Senior Notes due May 15, 2024. | Incorporated by reference to Exhibit 4.5 of the registrant’s Current Report on Form 8-K filed on April 29, 2015. | |||
Form of 4.875% Senior Notes due May 15, 2044. | Incorporated by reference to Exhibit 4.6 of the registrant’s Current Report on Form 8-K filed on April 29, 2015. | |||
Form of 4.90% Notes due April 15, 2018. | Incorporated by reference to Exhibit 4(i) of the registrant's Annual Report on form 10-K for the fiscal year ended September 30, 2016. | |||
Form of 1.000% Notes due December 15, 2022. | Incorporated by reference to Exhibit 4.1 of the registrant's Current Report on Form 8-K filed on December 9, 2016. | |||
Form of 1.900% Notes due December 15, 2026. | Incorporated by reference to Exhibit 4.2 of the registrant's Current Report on Form 8-K filed on December 9, 2016. | |||
Form of 2.133% Notes due June 6, 2019. | Incorporated by reference to Exhibit 4.1 of the registrant’s Current Report on Form 8-K filed on June 6, 2017. | |||
Form of 2.404% Notes due June 5, 2020. | Incorporated by reference to Exhibit 4.2 of the registrant’s Current Report on Form 8-K filed on June 6, 2017. | |||
Form of 2.894% Notes due June 6, 2022. | Incorporated by reference to Exhibit 4.3 of the registrant’s Current Report on Form 8-K filed on June 6, 2017. | |||
Form of Floating Rate Notes due June 6, 2022. | Incorporated by reference to Exhibit 4.4 of the registrant’s Current Report on Form 8-K filed on June 6, 2017. | |||
Form of 3.363% Notes due June 6, 2024. | Incorporated by reference to Exhibit 4.5 of the registrant’s Current Report on Form 8-K filed on June 6, 2017. | |||
Form of 3.700% Notes due June 6, 2027. | Incorporated by reference to Exhibit 4.6 of the registrant’s Current Report on Form 8-K filed on June 6, 2017. | |||
Form of 4.669% Notes due June 6, 2047. | Incorporated by reference to Exhibit 4.7 of the registrant’s Current Report on Form 8-K filed on June 6, 2017. | |||
Form of Certificate for the 6.125% Mandatory Convertible Preferred Stock, Series A. | Incorporated by reference to Exhibit 4.2 to the registrant’s registration statement on Form 8-A filed on May 16, 2017. |
Exhibit Number | Description | Method of Filing | ||
Deposit Agreement, dated as of May 16, 2017, among Becton, Dickinson and Company and Computershare Inc. and Computershare Trust Company, N.A., acting jointly as depositary and Computershare Trust company, N.A., acting as Registrar and Transfer Agent, on behalf of the holders from time to time of the depositary receipts described therein. | Incorporated by reference to Exhibit 4.3 to the registrant’s registration statement on Form 8-A filed on May 16, 2017. | |||
Form of Depositary Receipt for the Depositary Shares. | Incorporated by reference to Exhibit 4.4 to the registrant’s registration statement on Form 8-A filed on May 16, 2017. | |||
Registration Rights Agreement, dated as of December 29, 2017, between Becton, Dickinson and Company and Citigroup Global Markets Inc. | Incorporated by reference to Exhibit 4.1 of the registrant's Current Report on Form 8-K filed on December 29, 2017. | |||
Form of 6.700% Notes due December 1, 2026. | Incorporated by reference to Exhibit 4.4 of the registrant's Current Report on Form 8-K filed on December 29, 2017. | |||
Indenture, dated as of December 1, 1996 between C.R. Bard, Inc. and The Bank of New York Mellon Trust Company, N.A., a national banking association, as trustee. | Incorporated by reference to Exhibit 4.1 to C.R. Bard, Inc.'s Registration Statement on Form S-3 (File No. 333-05997). | |||
First Supplemental Indenture, dated May 18, 2017, between C. R. Bard, Inc. and The Bank of New York Mellon Trust Company, N.A., as trustee. | Incorporated by reference to Exhibit 4.2 of the Current Report on Form 8-K of C.R. Bard, Inc. filed on May 23, 2017. | |||
Form of 0.368% Notes due June 6, 2019. | Incorporated by reference to Exhibit 4.1 of the registrant's Current Report on Form 8-K filed on February 22, 2018. | |||
Form of Floating Rate Notes due December 29, 2020. | Incorporated by reference to Exhibit 4.1 of the registrant's Current Report on Form 8-K filed on March 1, 2018. | |||
Form of 1.401% Notes due May 24, 2023. | Incorporated by reference to Exhibit 4.1 of the registrant's Current Report on Form 8-K filed on May 24, 2018. | |||
Form of 3.02% Notes due May 24, 2025. | Incorporated by reference to Exhibit 4.2 of the registrant's Current Report on Form 8-K filed on May 24, 2018. | |||
Form of Employment Agreement with executive officers relating to employment following a change of control of the registrant (with tax reimbursement provisions).* | Incorporated by reference to Exhibit 10(a) to the registrant’s Quarterly Report on Form 10-Q for the period ended December 31, 2008. | |||
Form of Employment Agreement with executive officers relating to employment following a change of control of the registrant (without tax reimbursement provisions).* | Incorporated by reference to Exhibit 10(a)(ii) to the registrant’s Annual Report on Form 10-K for the fiscal year ended September 30, 2013. | |||
Stock Award Plan, as amended and restated as of January 31, 2006.* | Incorporated by reference to Exhibit 10(a) to the registrant’s Quarterly Report on Form 10-Q for the period ended December 31, 2005. |
Exhibit Number | Description | Method of Filing | ||
Performance Incentive Plan, as amended and restated January 24, 2017.* | Incorporated by reference to Exhibit 10.1 to the registrant’s Quarterly Report on Form 10-Q for the period ended March 31, 2017. | |||
Deferred Compensation and Retirement Benefit Restoration Plan, as amended and restated as of January 1, 2018.* | Filed with this report. | |||
1996 Directors’ Deferral Plan, as amended and restated as of November 25, 2014.* | Incorporated by reference to Exhibit 10.2 to the registrant’s Current Report on Form 8-K filed on December 2, 2014. | |||
Amended and Restated Aircraft Time Sharing Agreement between Becton, Dickinson and Company and Vincent A. Forlenza dated as of March 21, 2012.* | Incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed on March 27, 2012. | |||
2004 Employee and Director Equity-Based Compensation Plan, as amended and restated as of January 26, 2016.* | Incorporated by reference to Exhibit 10 to the registrant’s Current Report on Form 8-K filed on January 29, 2016. | |||
Terms of Awards under 2004 Employee and Director Equity-Based Compensation Plan and Stock Award Plan.* | Incorporated by reference to Exhibit 10(g)(ii) to the registrant’s Annual Report on Form 10-K for the fiscal year ended September 30, 2016. | |||
Five-Year Credit Agreement, dated January 29, 2016 among the registrant and the banks named therein (term has been extended to January 24, 2022). | Incorporated by reference to Exhibit 10 to the registrant’s Current Report on Form 8-K filed on February 4, 2016. | |||
Form of Commercial Paper Dealer Agreement. | Incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed on January 6, 2015. | |||
Tax Matters Agreement, dated August 31, 2009, by and between Cardinal Health, Inc. and CareFusion Corporation. | Incorporated by reference to Exhibit 10.3 to Cardinal Health, Inc.’s Current Report on Form 8-K filed on September 4, 2009. | |||
Letter of Understanding dated March 28, 2016 between Becton, Dickinson and Company and Alexandre Conroy.* | Incorporated by reference to Exhibit 10 to the registrant’s Quarterly Report on Form 10-Q for the period ended December 31, 2016. | |||
Three-Year Term Loan Agreement, dated as of May 12, 2017, by and among Becton, Dickinson and Company, the lenders party thereto, and Citibank, N.A., as administrative agent. | Incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed May 16, 2017. | |||
Credit Agreement, dated as of May 12, 2017, by and among Becton, Dickinson and Company, the banks and issuers of letters of credit party thereto and Citibank, N.A., as administrative agent. | Incorporated by reference to Exhibit 10.2 to the registrant’s Current Report on Form 8-K filed May 16, 2017. | |||
364-Day Term Loan Agreement, dated as of September 6, 2018, among Becton, Dickinson and Company, the banks named therein and Wells Fargo Bank, National Association, as administrative agent. | Incorporated by reference to Exhibit 10 to the registrant’s Current Report on Form 8-K filed September 13, 2018. | |||
Term sheet, dated August 25, 2017, between the registrant and Samrat Khichi.* | Filed with this report. |
Exhibit Number | Description | Method of Filing | ||
C. R. Bard, Inc. Supplemental Executive Retirement Plan, dated as of July 13, 1988.* | Incorporated by reference to Exhibit 10p of the C.R. Bard, Inc. Annual Report on Form 10-K for the fiscal year ending December 31, 1993. | |||
Supplemental Insurance/Retirement Plan Agreement (as Amended and Restated) between C.R. Bard, Inc. and its executive officers.* | Incorporated by reference to Exhibit 10be of the C.R. Bard, Inc. Quarterly Report on Form 10-Q for the period ending September 30, 2005. | |||
2005 Directors’ Stock Award Plan of C. R. Bard, Inc. (as Amended and Restated).* | Incorporated by reference to Exhibit 10bw of the C.R. Bard, Inc. Annual Report on Form 10-K for the fiscal year ending December 31, 2010. | |||
Subsidiaries of the registrant. | Filed with this report. | |||
Consent of independent registered public accounting firm. | Filed with this report. | |||
Power of Attorney. | Filed with this report. | |||
Certifications of Chief Executive Officer and Chief Financial Officer, pursuant to SEC Rule 13(a)-14(a). | Filed with this report. | |||
Certifications of Chief Executive Officer and Chief Financial Officer, pursuant to Section 1350 of Chapter 63 of Title 18 of the U.S. Code. | Filed with this report. | |||
101 | The following materials from this report, formatted in XBRL (Extensible Business Reporting Language): (i) the Consolidated Statements of Income, (ii) the Consolidated Statements of Comprehensive Income, (iii) the Consolidated Balance Sheets, (iv) the Consolidated Statements of Cash Flows, and (v) Notes to Consolidated Financial Statements. | Filed with this report. |
+ | Pursuant to Item 601(b)(2) of Regulation S-K, the schedules to the Agreement and Plan of Merger have been omitted from this Report and will be furnished supplementally to the SEC upon request. |
* | Denotes a management contract or compensatory plan or arrangement. |
Section 1.7 | “Beneficiary” or “Beneficiaries” means the beneficiary or beneficiaries who, pursuant to the provisions of this Plan, is or are to receive the amount, if any, payable under this Plan upon the death of a Participant. |
Section 1.13 | “Common Stock” means the common stock ($1.00 par value) of the Company, including any shares into which it may be split, subdivided or combined. |
Section 1.14 | “Company” means Becton, Dickinson and Company and any successor to such corporation by merger, purchase or otherwise. |
Section 1.16 | “Company Discretionary Credit Account” means the bookkeeping account established under Section 3.5, if any, on behalf of a Participant and includes any earnings credited thereon or losses charged thereto pursuant to Article V. |
Section 1.20 | “Company Non-Elective Credit Account” means the bookkeeping account established under Section 3.6, if any, on behalf of a Participant and includes any earnings credited thereon or losses charged thereto pursuant to Article V. |
Section 1.21 | “Deferral Election” means the Participant’s election to participate in this Plan and defer amounts eligible for deferral in accordance with the Plan terms. Except as the context otherwise requires, references herein to Deferral Elections include any subsequent modifications of a prior Deferral Election. |
Section 1.22 | “Deferred Bonus” means the amount of a Participant’s Bonus that such Participant has elected to defer until a later year pursuant to an election under Section 3.2. |
Section 1.23 | “Deferred Bonus Account” means the bookkeeping account established under Section 3.2 on behalf of a Participant, and includes any earnings credited thereon or losses charged thereto pursuant to Article V. |
Section 1.25 | “Deferred Equity-Based Compensation” means the amount of a Participant’s Equity-Based Compensation that such Participant has elected to defer until a later year pursuant to an election under Section 3.3. |
Section 1.26 | “Deferred Equity-Based Compensation Account” means the bookkeeping account established under Section 3.3 on behalf of a Participant, and includes any earnings credited thereon or losses charged thereto pursuant to Section 5.3(b). |
Section 1.27 | “Deferred Equity-Based Compensation Election” means the election by a Participant under Section 3.3 to defer a portion of the Participant’s Equity-Based Compensation. |
Section 1.28 | “Deferred Restoration Distribution” means the amount of a Participant’s distributable Restoration Plan Benefit that such Participant has elected to defer under this Plan pursuant to an election under Section 3.7. |
Section 1.29 | “Deferred Restoration Distribution Account” means the bookkeeping account established under Section 3.7 on behalf of a Participant, and includes any earnings credited thereon or losses charged thereto pursuant to Article V. |
Section 1.30 | “Deferred Restoration Distribution Election” means the election by a Participant under Section 3.7 to defer all or a portion of the Participant’s distributable Restoration Plan Benefit. |
Section 1.31 | “Deferred Salary” means the amount of a Participant’s Base Salary that such Participant has elected to defer until a later year pursuant to an election under Section 3.1. |
Section 1.32 | “Deferred Salary Account” means the bookkeeping account established under Section 3.1 on behalf of a Participant, and includes any earnings credited thereon or losses charged thereto pursuant to Article V. |
Section 1.33 | “Deferred Salary Election” means the election by a Participant under Section 3.1 to defer until a later year a portion of his or her Base Salary. |
Section 1.34 | “Deferred Stock Account” means the bookkeeping account established under Section 5.3(b) on behalf of a Participant and includes, in addition to amounts stated in that Section, any Dividend Reinvestment Return credited thereon. |
Section 1.36 | “Disability” means a Participant’s total disability as defined below and determined in a manner consistent with Code Section 409A and the regulations thereunder: |
Section 1.37 | “Disabled” means that a Participant is totally and permanently disabled as defined in the Company’s Long-Term Disability Plan. With respect to payments of amounts in excess of a Participant’s Grandfathered Deferred Compensation Plan Deferrals or Grandfathered Restoration Plan Benefit on account of disability, the term “Disabled” means a disability that meets the standard for disability under Code Section 409A and the guidance issued thereunder. |
Section 1.38 | “Dividend Reinvestment Return” means the amounts which are credited to each Participant’s Deferred Stock Account pursuant to Section 5.3(b) to reflect dividends declared by the Company on its Common Stock. |
Section 1.46 | “Investment Election” means the Participant’s election to have deferred amounts credited with hypothetical earnings credits (or losses) that track the investment performance of the Investment Options and/or Common Stock in accordance with Article V. |
Section 1.47 | “Investment Options” means those hypothetical targeted investment options designated by the Committee as measurements of the rate of return to be credited to (or charged against) amounts deferred to Participants’ Accounts. |
Section 1.49 | “Participant” means a common law employee of the Company who meets the eligibility and participation requirements set forth in Article II. |
Section 1.51 | “Plan” means the BD Deferred Compensation and Retirement Benefit Restoration Plan as from time to time in effect. Previously, the terms of this Plan were determined under the terms of the Restoration Plan and the Becton, Dickinson and Company Deferred Compensation Plan (previously the Becton, Dickinson and Company Salary and Bonus Deferral Plan), which are hereby consolidated into a single document. |
Section 1.53 | “Restricted Stock Units” means Restricted Stock Units granted under Section 7 of the Equity-Based Compensation Plan. |
Section 1.59 | “Specified Employee” means a person identified in accordance with procedures adopted by the Committee that reflect the requirements of Code Section |
Section 1.60 | “Spouse” means the individual to whom the Participant is legally married on the date of death or other benefit commencement. |
Section 1.62 | “Stock Trust” means the Becton, Dickinson and Company Deferred Salary and Bonus Trust established as of August 15, 1996 between the Company and Wachovia Bank of North Carolina, N.A., as amended from time to time thereafter. |
(a) | Only “Eligible Employees” and “Eligible Non-Pension Employees” who meet the conditions of this Article II shall be eligible to become a Participant in this Plan. |
(b) | Unless the Committee determines otherwise, any employee of the Company (or any subsidiary or affiliate of the Company) who participates in the Retirement Plan and whose benefits under the Retirement Plan are limited pursuant to the provisions included in the Retirement Plan in order to comply with Code Sections 401(a)(17) or 415, shall be an Eligible Employee with respect to benefits payable under Article IV and Section 3.7 (i.e., eligibility for the restoration portion of the Plan). Notwithstanding the foregoing, effective January 1, 2018, Eligible Non- Pension Employees will not be eligible to accrue Restoration Plan Benefits with respect to periods of employment during which the Eligible Non- Pension Employees are eligible to receive 401(k) Plan Non-Elective Contributions (including any waiting periods to receive 401(k) Plan Non- Elective Contributions). |
(i) | the individual is a common law employee of a unit of the Company (or of one of its subsidiaries) to which the Plan has been adopted pursuant to a decision by, or with the approval of, the Board of Directors; |
(ii) | the individual is not a nonresident alien of the United States receiving no United States source income within the meaning of Sections 861(a)(3) or 911(d)(2) of the Code; and |
(iii) | the employee has annualized Base Salary of $210,000 or more (indexed annually by the same amount as the compensation limit under Code Section 401(a)(17)) for the calendar year in which the Deferral Election is required to be made. |
(d) | An “Eligible Non-Pension Employee” for purposes of Section 3.6 (i.e., eligibility for the Company Non-Elective Credits under the Plan) is an individual who meets the requirements set forth in Section 2.1(c) and who is eligible to receive 401(k) Plan Non-Elective Contributions. |
(f) | An employee who, at any time, ceases to meet the foregoing eligibility requirements, as determined in the sole discretion of the Committee, shall thereafter cease to be a Participant eligible to continue making deferrals under the Plan, effective as of the first day of the Plan Year coincident with or next following the date of such cessation of eligibility in a manner consistent with the requirements of Code Section 409A and the regulations and other guidance issued thereunder to avoid adverse tax consequences to affected Participants, and any deferral elections then in effect shall cease to be effective as of the first day of such Plan Year. In such case, the individual may remain a Participant in the Plan with respect to amounts already deferred prior to the date such individual ceased to be an active Participant. |
(a) | General Rule. An Eligible Employee or Eligible Non-Pension Employee shall become an active Participant in the Plan at the earliest time that the Eligible Employee or Eligible Non-Pension Employee: (i) makes a timely Deferral Election pursuant to Subsections (b) and (c) herein; (ii) meets the requirements under Subsection (d) with respect to eligibility for a Restoration Plan Benefit; or (iii) meets the requirements under Subsection (e) with respect to eligibility for a Company Non-Elective Credit. |
(b) | Deferral Election. As soon as practicable after the Committee determines that an individual is an Eligible Employee, the Committee shall provide the Eligible Employee with the appropriate election forms with which to make a Deferral Election. The Eligible Employee shall make the Deferral Election in the manner set forth in Subsection (c) herein and within the time periods set forth in Article III. In the case of an employee who first becomes an Eligible Employee under this Plan (and is not eligible for any other plan with which this Plan is aggregated for purposes of Code Section |
(ii) | any election to defer Equity-Based Compensation and a deferral period election with respect to Equity-Based Compensation, as determined by the Committee; |
(iii) | any election to defer payment of Restoration Plan Benefits (if applicable) and any Company Discretionary Credits and a separate deferral period election with respect to each such separate category of deferral; |
(iv) | an Investment Election (except with respect to an Equity-Based Compensation Election, which shall automatically be credited to a Deferred Stock Account for investment return purposes), in accordance with the provisions of Article V; |
(v) | a designation of a Beneficiary or Beneficiaries to receive any deferred amounts owed upon the Participant’s death; |
(vi) | subject to Section 2.2(c)(i), a designation as to the form of distribution for each separate year’s deferral and each separate category of deferral (Company Matching Credit deferrals will be subject to the Participant’s distribution option elections with respect to Base Salary provided, however, that if the Participant does not make a Base Salary election but does make a Bonus deferral election, then the Participant’s Company Matching Credit deferrals will be subject to the Participant’s distribution option elections with respect to Bonus); provided, however, that if no specific election is made with respect to any deferred amount, the |
(vii) | an application for a policy of life insurance under which the Participant is the insured and the Company is the sole owner of and beneficiary under such policy; and |
(viii) | such additional information as the Committee deems necessary or appropriate. |
(d) | Unless the Committee determines otherwise or unless otherwise provided in an Agreement, if any, an Eligible Employee who participates in the Retirement Plan and whose benefits under the Retirement Plan are limited pursuant to the provisions included in the Retirement Plan in order to comply with Code Sections 401(a)(17) or 415, shall automatically become a Participant in this Plan with respect to benefits payable under Article IV. Notwithstanding the foregoing, Eligible Non-Pension Employees will not be eligible to accrue Restoration Plan Benefits with respect to periods of employment during which the Eligible Non-Pension Employees are eligible to receive 401(k) Plan Non-Elective Contributions (including any waiting periods to receive 401(k) Plan Non-Elective Contributions). |
(e) | Unless the Committee determines otherwise or unless otherwise provided in an Agreement, if any, an Eligible Non-Pension Employee shall automatically become a Participant in this Plan upon an allocation of Company Non-Elective Credits under Section 3.6 to his or her Company Non-Elective Credit Account. |
(f) | The participation of any Participant may be suspended or terminated by the Committee at any time, but no such suspension or termination shall operate to reduce any benefits accrued by the Participant under the Plan prior to the date of suspension or termination and, further, any such suspension or termination may only be done in a manner consistent with the requirements of Code Section 409A and the regulations and other guidance issued thereunder to avoid adverse tax consequences to affected Participants. |
(a) | Each Participant who has elected to defer the maximum pre-tax elective deferral that is permitted for a calendar year under the 401(k) Plan and under Code Section 402(g) may make a Deferred Salary Election with respect to Base Salary otherwise to be paid in such calendar year. A Participant may elect to defer from 1% to 75% of the Participant’s Base Salary (in increments of 1%). Notwithstanding the foregoing, any Deferred Salary Election must be made in a manner that will ensure that the Participant is paid a sufficient amount of Base Salary that will allow adequate amounts available for (i) any pre-tax elective deferrals under the 401(k) Plan, and (ii) any amounts to be deferred by the Participant in order to participate in any other benefit programs maintained by the Company. |
(b) | Except with respect to Deferred Salary Elections made by Participants who first become eligible to participate during a Plan Year (which elections must be made as specified in Section 2.2(b)), a Deferred Salary Election with respect to Base Salary for a particular calendar year must be made during the time period specified by the Committee, but in no event later than the December 31 preceding the commencement of that calendar year or at such earlier time as determined by the Committee. Once a Deferred Salary Election is made, it shall be irrevocable after the final deadline established by the Committee for making the election. Such Deferred Salary shall be credited to the Participant’s Deferred Salary Account as of the first business day after the last day of each payroll period. |
(a) | Each Participant who agrees to defer the maximum pre-tax elective deferral that is permitted for a calendar year under the 401(k) Plan and under Code Section 402(g) may elect to make a Deferred Bonus Election with respect to a Bonus otherwise to be paid in the calendar year immediately following (or, in the discretion of the Committee, in a later year following) the year of the Participant’s Deferred Bonus Election. A Participant may elect to defer from 1% to 100% of the Participant’s Bonus (in increments of 1%); provided, however, that the Participant’s Deferred Bonus Election must result in a deferral of at least $5,000. In the event that Participant’s Deferred Bonus Election does not result in a deferral of at least $5,000 but the Participant’s Bonus is at least $5,000, such Participant’s Deferred Bonus Election shall be automatically increased to the percentage that results in a deferral of $5,000. In the event that the Participant’s Bonus is less than $5,000, such Participant’s Deferred Bonus Election shall be void. |
(b) | A Deferred Bonus Election with respect to any Bonus to be earned during a Fiscal Year must be made no later than the date that is six months before the end of the performance period (which performance period shall not be less than twelve months) or such other earlier date designated by the Committee. Once made, a Deferred Bonus Election cannot be changed or revoked after the final deadline established by the Committee for making the election, except as provided herein. Such Deferred Bonus shall be credited to the Participant’s Deferred Bonus Account as of the first business day in January of the year that the Bonus otherwise would have been paid to the Participant in the absence of any deferral hereunder. |
(a) | To the extent permitted by law on a tax deferred basis, each Participant may elect to make a Deferred Equity-Based Compensation Election with respect to Equity-Based Compensation otherwise to be granted in the calendar year immediately following (or, in the discretion of the Committee, in a later year following) the year of the Participant’s Deferred Equity-Based Compensation Election. A Participant may elect to defer his or her Equity-Based Compensation, and may make separate elections with respect to each of the Participant’s Restricted Stock Units, Performance Units, Other Stock-Based Awards, and awards under the Stock Award Plan, provided, however, that, the Participant’s Equity-Based Compensation for each type of Equity-Based Compensation must result in a deferral of at least 25% of such type of Equity-Based Compensation. |
(b) | Except with respect to Deferred Equity-Based Compensation Elections made by Participants who first become eligible to participate during a Plan Year (which elections must be made as specified in Section 2.2(b)), a Deferred Equity-Based Compensation Election with respect to any Equity- Based Compensation to be granted in a particular calendar year must be made during the time period specified by the Committee, but in no event later than the December 31 preceding the commencement of that calendar year or at such earlier time as determined by the Committee. Notwithstanding the foregoing, with respect to a Deferred Equity-Based Compensation Election governing Restricted Stock Units that are designated as performance-based compensation by the Company and that qualify as performance-based compensation under Code Section 409A and any guidance thereunder, such Deferred Equity-Based Compensation Election must be made no later than the date that is six months before the end of the performance period (which performance period shall not be less than twelve months) or such other earlier date designated by the Company, provided, however, that to be eligible to make any such Deferred Equity- Based Compensation Election the Participant must have provided services to the Company (or one of its subsidiaries) from the later of the date the performance period starts or the date the performance criteria are established through the date the Deferred Equity-Based |
(a) | General Rule. Each Participant who is eligible to receive a Restoration Plan Benefit under the Plan may elect, in accordance with this Section 3.7, to make a Deferred Restoration Distribution Election with respect to a Restoration Plan Benefit that is otherwise to be paid to the Participant. If a Participant makes such an election, the Participant must elect to defer 100% of the value of the Participant’s applicable Restoration Plan Benefit. To the extent a Participant’s Restoration Plan Benefit is attributable to the final average pay benefit formula under the Retirement Plan and not described in Section 4.4(b)(i)(D), the value of such Restoration Plan Benefit shall equal the actuarial present value (at the time payment becomes due) of the portion of the Participant’s (or Beneficiary’s) Restoration Plan Benefit based on the final average pay formula, determined as of normal retirement age under the Retirement Plan, based on the Applicable Interest Rate and the Applicable Mortality Table (as |
(b) | Grandfathered Restoration Plan Benefit. With respect to amounts equal to a Participant’s Grandfathered Restoration Plan Benefit, a Deferred Restoration Distribution Election with respect to any amounts payable during a particular calendar year must be made at least one year before the date that the Grandfathered Restoration Plan Benefit is otherwise payable to the Participant pursuant to Section 4.4. Once made, such a Deferred Restoration Distribution Election cannot be changed or revoked except as provided herein. If the Participant otherwise becomes entitled to a distribution of a Restoration Plan Benefit after having made such an election and before the end of such one-year period, such election shall be ineffective and the applicable Restoration Plan Benefit payment shall not be deferred hereunder. Any such Deferred Restoration Distribution shall be credited to the Participant’s Deferred Restoration Distribution Account as soon as practicable after such amount would otherwise have been payable to the Participant. The amount in the Participant’s Deferred Restoration Distribution Account attributable to the Participant’s Grandfathered Restoration Plan Benefit shall be payable under this Plan as follows: |
(i) | If the Participant has otherwise made a Deferred Salary Election under Section 3.1 for the year that the Participant made a Deferred Restoration Distribution Election, the amount credited to the Participant’s Deferred Restoration Distribution Account shall be payable at the same time and in the same form of distribution as any such Deferred Salary. |
(ii) | If the Participant has not made a Deferred Salary Election but has otherwise made a Deferred Bonus Election under Section 3.2 for the year that the Participant made a Deferred Restoration Distribution Election, the amount credited to the Participant’s Deferred Restoration Distribution Account shall be payable at the same time and in the same form of distribution as any such Deferred Bonus. |
(iii) | If the Participant has not made a Deferred Salary Election under Section 3.1 nor a Deferred Bonus Election under Section 3.2 for the year that the Participant made a Deferred Restoration Distribution Election, the amount credited to the Participant’s Deferred Restoration Distribution Account equal to a Participant’s Grandfathered Restoration Plan Benefit shall be payable in the form of a single lump sum payment at the Participant’s termination of employment unless the Participant makes an election to change the time and form of payment of such amount in accordance with the terms of this Plan. |
(c) | Non-Grandfathered Restoration Plan Benefit. A Participant’s Deferred Restoration Distribution Election with respect to amounts in excess of a Participant’s Grandfathered Restoration Plan Benefit payable during a particular calendar year must specify the time and form of payment otherwise the Participant’s Deferred Restoration Plan Benefit shall be payable in the form of a single lump sum payment at the Participant’s termination of employment. In addition, such Deferred Restoration Distribution Election shall not be effective unless the following requirements are met: |
(i) | the election will not take effect until at least twelve months after the date on which the election is made and will not be recognized with respect to payments that would otherwise have commenced during such twelve-month period; |
(ii) | except for payments made on account of a Participant’s death, the first payment with respect to which such election is made shall be deferred for a period of not less than five years from the date such payment would otherwise have been made; |
(iii) | any election related to payments that would otherwise have commenced as of a specified time, as opposed to the Participant’s Separation from Service, may not be made less than twelve months prior to the date on which such payments would otherwise have commenced; and |
(iv) | any such additional deferral election shall not be effective if it would otherwise result in deferring amounts later than the mandatory distribution provisions of Article VI. |
(b) | Notwithstanding the provisions of Section 3.8(a) and Section 2.2(b), and subject to Section 6.1(f), all Company Matching Credits credited to a Participant’s Company Matching Credit Account pursuant to Section 3.4 shall be deferred until the Participant’s Separation from Service and may not be deferred to a specified date prior to such Participant’s Separation from Service. The foregoing notwithstanding, in any case where the Participant is a Specified Employee, payment of the amounts under this Section 3.8(b) on account of the Participant’s Separation from Service shall be deferred until as soon as practicable after the earlier of (i) the first day of the seventh month following the Participant’s Separation from Service (without regard to whether the Participant is reemployed on that date), or (ii) the date of the Participant’s death, subject to any permitted further deferral election on account of a change in form of payment. |
(a) | Additional Deferral – Grandfathered Deferrals. With respect to any previously deferred Grandfathered Deferred Compensation Plan Deferrals or Grandfathered Restoration Plan Benefit credited to a Participant’s Accounts, a Participant may request that the Committee approve an additional deferral period of at least two (2) years from the date the previously deferred amounts were otherwise payable. Any such request must be made by written notice to the Committee at least twelve (12) months before the expiration of the deferral period for any previously deferred amount with respect to which an additional deferral election is requested. A separate additional deferral election is required to be made for each separate category of previously deferred amounts that is treated as subject to a single deferral period election under Section 2.2(b) above. Each such additional deferral election request shall include a newly designated manner of payment election in accordance with the provisions |
(b) | Additional Deferral – Non-Grandfathered Deferrals. With respect to any deferred amounts credited to a Participant’s Accounts in excess of a Participant’s Grandfathered Deferred Compensation Plan Deferrals or Grandfathered Restoration Plan Benefit an additional deferral election otherwise described in Section 3.9(a) may be made, provided that such election shall not be effective unless the following requirements are met: |
(i) | the election will not take effect until at least twelve months after the date on which the election is made and will not be recognized with respect to payments that would otherwise have commenced during such twelve-month period; |
(ii) | except for payments made on account of a Participant's death or financial hardship under Section 6.1(f), the first payment with respect to which such election is made shall be deferred for a period of not less than five years from the date such payment would otherwise have been made; |
(iii) | any election related to payments that would otherwise have commenced as of a specified time, as opposed to the Participant's Separation from Service, may not be made less than twelve months prior to the date on which such payments would otherwise have commenced; and |
(iv) | any such additional deferral election shall not be effective if it would otherwise result in deferring amounts later than the mandatory distribution age provisions of Article VI. |
(c) | Accelerated Distribution For Grandfathered Deferrals. With respect to any Grandfathered Deferred Compensation Plan Deferrals or Grandfathered Restoration Plan Benefit credited to a Participant’s Accounts, a Participant may request that the Committee approve an accelerated deferral date with respect to amounts that are not otherwise payable for at least three (3) years from the date of such request, provided that the resulting accelerated deferral date may not be any earlier than two (2) years from the date of such Participant election. A separate deferral modification election is required to be made for each separate category of previously deferred amount that is treated as subject to a single deferral period election under Section 2.2(b) above. Each such modified deferral period request shall include a newly |
(a) | A Participant’s Restoration Plan Benefit hereunder shall equal the excess (if any) of (i) the benefit that would have been payable under the Retirement Plan in respect of the Participant in the absence of the provisions included in the Retirement Plan in order to comply with Sections 401(a)(17) and 415 of the Code, over (ii) the benefit actually payable in respect of the Participant under the Retirement Plan. Notwithstanding the foregoing, effective January 1, 2018, no Participants will be eligible to accrue Restoration Plan Benefits with respect to periods of employment during which the Participants are eligible to receive 401(k) Plan Non-Elective Contributions (including any waiting periods to receive 401(k) Plan Non-Elective Contributions). |
(b) | Effective as of January 1, 2005, for purposes of calculating a Participant’s Restoration Plan Benefit under Section 4.1(a), if, as determined by the Committee in its sole discretion, a Participant (i) permanently directly transferred employment from a foreign affiliate of the Company that has not adopted the Retirement Plan and this Plan to a member of the Group (as defined in the Retirement Plan) that has adopted the Retirement Plan and this Plan or to a Unit (as defined in the Retirement Plan) to which participation in the Retirement Plan and this Plan has been extended, and (ii) while employed by the foreign affiliate, had what the Committee determines (in its sole discretion) to be an agreement with such foreign affiliate to provide for deferred compensation that recognized the Participant’s period of employment by the foreign affiliate and compensation paid to the Participant by the foreign affiliate, then the Participant’s period of employment by the foreign affiliate and compensation paid to the Participant by the foreign affiliate during the Participant’s period of employment with the foreign affiliate shall be taken into account solely under this Plan to the same extent that such period of employment and compensation would have otherwise been taken into account had it been employment with and compensation paid by the Company, a member of the Group that has adopted the Retirement Plan and this Plan, or a Unit to which participation in the Retirement Plan and this Plan has been extended. In addition, any such Participant’s Restoration Plan Benefit shall be offset, solely to the extent permitted under Code Section 409A, for (i) any Social Security or other governmental pension or retirement benefit earned during the Participant’s period of employment with the foreign affiliate; and (ii) any retirement benefit the Participant is entitled to under a foreign based retirement plan sponsored by the Company or member of the Group. |
(a) | Grandfathered Restoration Plan Benefit. Subject to Section 4.5, the further provisions of this Article IV, and a Participant’s Agreement, if any, and unless deferred under Section 3.7, a Participant’s Grandfathered Restoration Plan Benefit shall be paid to a Participant at such time and in such form as determined in accordance with procedures adopted and approved by the Compensation and Benefits Committee of the Board of Directors of the Company (or any committee successor thereto), which procedures were in effect as of October 3, 2004. A copy of such procedures is attached hereto as Attachment A. |
(b) | Non-Grandfathered Restoration Plan Benefit.2 Except as otherwise provided herein, or otherwise provided in a Participant’s Agreement, if |
(A) | FAP Participant. With respect to a Participant whose Restoration Plan Benefit is determined using the final average pay formula under the Retirement Plan, the Normal Form of Payment shall be a single lump sum payment that shall equal the actuarial present value (at the time payment becomes due) of the Participant’s Restoration Plan Benefit based on the final average pay formula, determined as of normal retirement age under the Retirement Plan, based on the Applicable Interest Rate and the Applicable Mortality Table (as such terms are defined in the Retirement Plan) used under the Retirement Plan for calculating present values. |
(B) | Cash Balance Participant. With respect to a Participant whose Restoration Plan Benefit is determined using the cash balance formula under the Retirement Plan, the Normal Form of Payment shall be a single lump sum payment equal to the Participant’s Restoration Plan Benefit (at the time payment becomes due) determined in accordance with Section 4.1, expressed as an account balance benefit. |
(C) | FAP and Cash Balance Participant. For a Participant whose Restoration Plan Benefit is determined using both the final average pay formula and the cash balance formula under the Retirement Plan, the Normal Form of Payment with respect to the portion of the Participant’s Restoration Plan Benefit calculated using the final average pay formula under the Retirement Plan shall be as described in |
(D) | Cash Balance Conversion Participant. For a Participant whose benefit under the Retirement Plan is converted on or after January 1, 2013 from being calculated using the final average pay formula under the Retirement Plan to being calculated using the cash balance formula under the Retirement Plan, the Normal Form of Payment for the Participant’s entire Restoration Plan Benefit shall be as described in subparagraph (B) above. |
(ii) | Timing of Payment. A Participant’s vested Restoration Plan Benefit shall be paid or commence to be paid in the Normal Form of Payment as follows: |
(A) | FAP Participant. Subject to subparagraph (E) below, to the extent that a Participant’s Restoration Plan Benefit is determined using the final average pay formula under the Retirement Plan, amounts shall commence to be paid as soon as practicable after the later of (I) the Participant’s Separation from Service or (II) the earliest date on which the Participant first becomes eligible to receive or commence receiving benefits under the Retirement Plan after Separation from Service (i.e., the earlier of attainment of age 55 with 10 years of service as determined under the Retirement Plan or age 65) regardless of the time benefits are actually paid or commence to be paid under the Retirement Plan. |
(B) | Cash Balance Participant. Subject to subparagraph (E) below, if a Participant’s Restoration Plan Benefit is determined using the cash balance formula under the Retirement Plan, amounts shall be paid as soon as practicable after the Participant’s Separation from Service. |
(C) | FAP and Cash Balance Participant. Subject to subparagraph (E) below, to the extent that a Participant’s Restoration Plan Benefit is determined using both the final average pay formula and the cash balance formula under the Retirement Plan, payment shall commence with respect to the portion of the Participant’s Restoration Plan Benefit calculated using the final average pay formula under the Retirement Plan on the date described in subparagraph (A) |
(D) | Cash Balance Conversion Participant. Subject to subparagraph (E) below, in the case of a Participant whose benefit under the Retirement Plan is converted on or after January 1, 2013 from being calculated using the final average pay formula under the Retirement Plan to being calculated using the cash balance formula under the Retirement Plan, payment of such Participant’s entire Restoration Plan Benefit shall commence on the date described in subparagraph (A) above. |
(E) | Specified Employee. In any case where the Participant is a Specified Employee and the Participant’s Restoration Plan Benefit in excess of the Participant’s Grandfathered Restoration Plan Benefit is payable on account of the Specified Employee’s Separation from Service, the Participant’s Restoration Plan Benefit under this Section shall be paid or commence to be paid as soon as practicable following the earlier of (I) or (II) where: (I) is the later of (A) the date otherwise provided under the Plan or (B) the first day of the seventh month following the Participant’s Separation from Service (without regard to whether the Participant is reemployed on that date); and (II) is the date of the Participant’s death. |
(iii) | The Participant’s ability to elect an alternate form of distribution other than the Normal Form of Payment is described in Section 6.2. The death benefits attributable to a Participant’s Restoration Plan Benefit under the Plan in the event of the Participant’s death after Restoration Plan Benefit payments have commenced, if any, will be determined pursuant to the terms of the form of payment elected by the Participant. |
(a) | Grandfathered Restoration Plan Benefit. Notwithstanding the provisions of Section 4.4 (and any procedures adopted thereunder), and unless provided otherwise in a Participant’s Agreement, if any, each Participant’s Grandfathered Restoration Plan Benefit shall (to the extent not previously paid or commenced to be paid) be paid to the Participant in a cash lump sum as soon as practicable, but not later than 45 business days, after a Participant’s termination of employment following a Change in Control. |
(b) | Non-Grandfathered Restoration Plan Benefit – FAP Participant and Cash Balance Conversion Participant. Notwithstanding the provisions of Sections 4.4(b)(ii)(A), 4.4(b)(ii)(C) and 4.4(b)(ii)(D) (and any procedures adopted thereunder), and unless provided otherwise in a Participant’s Agreement, if any, to the extent that a Participant’s Restoration Plan Benefit that is determined using the final average pay formula under the Retirement Plan or is otherwise described in Section 4.4(b)(i)(D) and that is in excess of his Grandfathered Restoration Plan Benefit, if any, shall (to the extent not previously paid or commenced to be paid) be paid to the Participant in a cash lump sum as soon as practicable, but not later than 45 business days, after the Participant’s Separation from Service following a Change in Control; provided, however, that such a distribution shall only be made if: (i) the Change in Control satisfies the requirements of Code Section 409A(a)(2)(A)(v) (and the guidance issued thereunder) and such Separation from Service occurs within 2 years of the Change in Control; or (ii) distribution may otherwise be made under this Plan on account of Separation from Service. |
(c) | Specified Employee. In any case where the Participant is a Specified Employee and the Participant’s Restoration Plan Benefit in excess of the Participant’s Grandfathered Restoration Plan Benefit is payable pursuant to Section 4.5(b) on account of the Specified Employee’s Separation from Service within 2 years of a qualified Change in Control, payment of the Participant’s Restoration Plan Benefit under this Section shall be deferred until the earlier of (i) first day of the seventh month following the Participant’s Separation from Service (without regard to whether the Participant is reemployed on that date), or (ii) the date of the Participant’s death. |
(a) | Grandfathered Restoration Plan Benefit. Notwithstanding the provisions of Section 4.4 (and in accordance with any procedures adopted thereunder), and unless provided otherwise in a Participant’s Agreement, if any, a Participant who terminates employment on account of a Disability Retirement (as determined under the Retirement Plan) may make a written request to the Committee to receive payment of his Grandfathered Restoration Plan Benefit in a single lump sum as soon as practicable thereafter; provided however, that payment to a Participant under this Section 4.6 shall only be made if the Committee, in its sole and absolute discretion, determines to make such payment. Any decision by the Committee hereunder shall be final and binding. If a Participant’s request is denied, payment of the Participant’s Plan benefits shall be made in accordance with the otherwise applicable provisions of the Plan (and any procedures then in effect). |
(b) | Non-Grandfathered Restoration Plan Benefit. Notwithstanding anything in the Plan to the contrary, if a Participant suffers a Disability and becomes Disabled, that portion of the Participant’s Restoration Plan Benefit in excess of the Grandfathered Restoration Plan Benefit shall be paid on account of Disability in the form of a single lump sum cash payment as soon as practicable following the later of (i) the date the Participant attains age 65; or (ii) the date of the Participant’s Disability. The amount of any such lump sum payment in respect of a Disabled Participant hereunder whose Restoration Plan Benefit is determined using the final average pay formula under the Retirement Plan shall equal the actuarial present value of the Participant’s vested Restoration Plan Benefit determined as of the date such benefit payment becomes due hereunder, based on the Applicable Interest Rate and the Applicable Mortality Table (as such terms are defined in the Retirement Plan) used under the Retirement Plan for calculating the present value of optional forms of payment at the time payment is due under the Plan. The amount of any such lump sum payment in respect of a Disabled Participant hereunder whose Restoration Plan Benefit is determined using the cash balance formula under the Retirement Plan or that is otherwise described in Section 4.4(b)(i)(D) shall be the Participant’s Restoration Plan Benefit as of the date such benefit payment becomes due hereunder, determined in accordance with Section 4.1. If such a Participant dies or incurs a Separation from Service prior to the date of payment under this Section 4.6(b), payment shall be made in accordance with the otherwise applicable provisions of this Plan. |
Section 5.1 | Crediting of Employee Deferrals and Company Matching, Discretionary and Non- Elective Credits. |
(a) | Participants’ Investment Elections with respect to deferred amounts hereunder shall be made pursuant to the written, telephonic or electronic methods prescribed by the Committee and subject to such rules on Investment Elections and Investment Options as established by the Committee from time to time. Upon receipt by the Committee, and in accordance with rules established by the Committee, an Investment Election shall be effective as soon as practicable after receipt and processing of the election by the Committee. Investment Elections will continue in effect until changed by the Participant. Subject to Section 5.3(b), an eligible Participant may change a prior Investment Election (or default Investment Election) with respect to deferred amounts on a daily basis, by notifying the Committee, at such time and in such manner as approved by the Committee. Any such changed Investment Election may result in amending Investment Elections for prior deferrals or for future deferrals or both. |
(b) | For purposes of Company Non-Elective Credits, the most recent Investment Elections in effect for a Participant’s Company Matching Credits (if any) that relate to the same Plan Year as the Company Non- Elective Credits as of the date the Company Non-Elective Credits are made will be used for such Company Non-Elective Credits and, in the absence of any Investment Elections, the Plan’s default Investment Elections will be used for the Company Non-Elective Credits. |
(a) | General. Subject to Section 5.2, except as otherwise provided herein, additional hypothetical bookkeeping amounts shall be credited to (or deducted from) a Participant’s Accounts to reflect the earnings (or losses) that would have been experienced had the deferred amounts been invested in the Investment Options selected by the Participant as targeted rates of return, net of all fees and expenses otherwise associated with the |
(i) | A Participant’s Deferred Equity Compensation is automatically credited in the form of Common Stock to the Participant’s Deferred Stock Account. With respect to other deferred amounts hereunder, instead of having deferred amounts credited with hypothetical earnings (or losses) in accordance with Section 5.3(a), and subject to Section 5.2, a Participant may elect to have part of the Participant’s deferred amounts (in whole percentage increments) credited in the form of Common Stock to a Deferred Stock Account; provided, however, that a Participant may not make an election to have any future deferred amounts credited to a Deferred Stock Account if, at the time of the election, more than 10% of the balance of the Participant’s deferred amounts are credited to a Deferred Stock Account (disregarding amounts in the Participant’s Deferred Equity Compensation Account, if any). For purposes of administering this rule and subject to the Committee’s right to adopt administrative procedures pursuant to Section5.3(b)(viii) below, the following additional rules apply: |
(ii) | If the restrictions of Section 5.3(b)(i) do not apply (such that the Participant may otherwise elect to have deferred amounts credited to the Deferred Stock Account), in no event may a Participant make an Investment Election to have more than 10% of any future deferred amounts (disregarding Deferred Equity Compensation) credited to the Deferred Stock Account. Any Investment Election that would otherwise violate the provisions of this Section 5.3(b)(ii) shall be void and of no effect. In the absence of a Participant amending such Investment Election or otherwise making a new Investment Election that complies with this Section 5.3(b)(ii), the Participant’s future deferred amounts that would otherwise have been credited to the Deferred Stock Account will be hypothetically invested in another Investment Option selected by the Committee for this purpose. Notwithstanding the foregoing, if any Investment Election otherwise in effect on January 1, 2010 would violate the limitations of this Section 5.3(b)(ii), then, in the absence of a Participant’s amending that Investment Election on or before January 1, 2010, pursuant to procedures implemented by the Committee, the Participant’s Investment Election will be modified so that the Investment Election is reduced so that 10% of future deferred amounts are credited to the Deferred Stock Account with the remaining deferred amounts hypothetically invested in another Investment Option selected by the Committee for this purpose. |
(iii) | Elections under this Section 5.3(b) may be made as a part of the Participant’s Deferral Election and thereafter on the same basis as Participants are permitted to make other Investment Elections and using the same or similar procedures as Participants use to make other Investment Elections under Section 5.2. In addition, any amounts credited to a Participant’s Accounts other than the Participant’s Deferred Stock Account may be transferred for hypothetical investment tracking purposes to the Participant’s Deferred Stock Account; provided, however, that a Participant may not elect any such transfer that would increase the Participant’s hypothetical investment in Common Stock credited to the Deferred Stock Account if, at the time of the election or as a result thereof, more than 10% of the Participant’s Deferred Stock Account (excluding any Deferred Equity-Based Compensation) is or would be credited to the Participant’s Deferred Stock Account. Any transfer election that violates the provisions of this Section 5.3(b)(iii) shall be void and of no effect. In all events, once amounts are credited to a Participant’s Deferred Stock Account, no Investment Election may cause amounts credited to a Participant’s Deferred Stock Account to be transferred for hypothetical |
(A) | as of the first business day after the last day of each bi- weekly payroll period, with the number of shares of Common Stock (in whole shares and fractional shares, as determined by the Committee) determined by dividing the Participant’s deferred amounts attributable to Deferred Salary for such bi-weekly payroll period subject to the Deferred Stock Election by the price for shares of Common Stock, determined by the Committee, as of the day such deferred amounts are credited to the Participant’s Account; and |
(B) | annually, as of the first business day in January of each calendar year, with the number of shares of Common Stock (in whole shares and fractional shares, as determined by the Committee) determined by dividing the portion of the Participant’s Deferred Bonus and Company Matching Credits subject to the Deferred Stock Election by the price for shares of Common Stock, determined by the Committee, as of the day such deferred amounts are credited to the Participant’s Accounts; and |
(C) | at such other times as the Committee determines with respect to all other deferred amounts under the Plan, with the number of shares of Common Stock (in whole shares and fractional shares, as determined by the Committee) determined by dividing the portion of the Participant’s deferred amounts to be credited in the Deferred Stock Account by the price for shares of Common Stock, determined by the Committee, as of the day such deferred amounts are credited to the Participant’s Account, or, in the case of deferred amounts measured in stock units, by crediting the account with the same number of shares of Common Stock. |
(v) | If the Company enters into transactions involving stock splits, stock dividends, reverse splits or any other recapitalization transactions, the number of shares of Common Stock credited to a Participant’s Deferred Stock Account will be adjusted (in whole shares and fractional shares, as determined by the Committee) so |
(vi) | If at least a majority of the Company’s stock is sold or exchanged by its shareholders pursuant to an integrated plan for cash or property (including stock of another corporation) or if substantially all of the assets of the Company are disposed of and, as a consequence thereof, cash or property is distributed to the Company’s shareholders, each Participant’s Deferred Stock Account will, to the extent not already so credited under this Section 5.3(b), be (i) credited with the amount of cash or property receivable by a Company shareholder directly holding the same number of shares of Common Stock as is credited to such Participant’s Deferred Stock Account and (ii) debited by that number of shares of Common Stock surrendered by such equivalent Company shareholder. |
(vii) | Each time the Company declares a dividend on its Common Stock, each Participant’s Deferred Stock Account will be credited with a Dividend Reinvestment Return equal to that number of shares of Common Stock (in whole shares and fractional shares, as determined by the Committee) determined by dividing (i) the amount that would have been paid (or the fair market value thereof, if the dividend is not paid in cash) to the Participant on the total number of shares of Common Stock credited to the Participant’s Deferred Stock Account had that number of shares of Common Stock been held by such Participant by (ii) the price for shares of Common Stock, determined by the Committee, as of the dividend payment date. |
(a) | Deferred Amounts. At all times a Participant shall be fully vested in his Deferred Salary, Deferred Bonus, Deferred Equity-Based Compensation, and Deferred Restoration Distribution Accounts hereunder (including any earnings or losses and Dividend Reinvestment Return thereon). A Participant shall become vested in any Company Matching Credits and Company Non-Elective Credits in the same manner and to the same extent as the Participant is vested in matching contributions otherwise credited to the Participant under the BD 401(k) Plan. A Participant shall become vested in any Company Discretionary Credits pursuant to the vesting schedule established by the Company at the time such Credits, if any, are made. Except as otherwise provided in Section 6.1(b) (death) or Section 6.1(c) (disability), if a Participant incurs a Separation from Service at any time prior to becoming fully vested in amounts credited to the Participant’s Accounts hereunder, the nonvested amounts credited to the Participant’s Accounts shall be immediately forfeited and the Participant shall have no right or interest in such nonvested deferred amounts. |
(a) | Timing of Distribution – Distributions of Vested Accounts Other than Death, Disability, or Scheduled Distributions. The time and form of payment of Restoration Plan Benefits that are not otherwise deferred under Section 3.7 of the Plan are governed by the provisions of Article IV and those provisions of this Article VI specifically referring to Restoration Plan Benefit payment options. Except as otherwise provided herein, in the case of a Participant who incurs a Separation from Service before retirement from active employment (as defined below), a Participant’s vested Accounts shall be paid or commence to be paid, in the form of distribution elected in a particular Deferral Election (subject to Section 6.2), as soon as practicable (as determined by the Committee) after the Participant’s Separation from Service. Notwithstanding the foregoing, in the case of a Participant who incurs a Separation from Service with vested Company Non-Elective Credits, such vested Company Non-Elective Credits shall be paid in the form of a single lump sum distribution as soon as practicable after such Separation from Service for any reason (subject to the delay requirements described below that are applicable to Specified Employees). In the case of a Participant who retires from active employment hereunder (as defined below), and subject to Section 6.1(e) and Section 6.1(f), a Participant’s vested Accounts shall be paid or commence to be paid, in the form of distribution elected in a particular Deferral Election (subject to Section 6.2), as soon as practicable (as determined by the Committee) following the later of: (I) the date the Participant retires from active employment (or, in the case of certain Equity-Based Compensation that vests one year after retirement, one year after retirement), or (II) the date otherwise specified in the Participant’s Deferral Election; provided however that, in all events distributions under this subparagraph (II) of deferred amounts in excess of the Participant’s Grandfathered Restoration Plan Benefits must be made (or commence to be paid) as of the earlier of the Participant’s attainment of age 70 or death. For purposes of this Section 6.1(a), a Participant “retires from active employment” if: |
(i) | the Participant Separates from Service with the Company or an affiliate after having attained age 65; |
(ii) | the Participant Separates from Service after having attained age 55 with ten years of service (as determined under the Retirement Plan) or an affiliate; or |
(i) | The Beneficiary may request (within a reasonable time after the Participant’s death, as specified by the Committee) that all remaining installment payments that are otherwise to be paid to the Beneficiary at least twelve (12) months after the date of the request be accelerated and paid in a single lump sum payment as of a date specified by the Committee that is at least twelve (12) months after the date of the request; or |
(ii) | The Beneficiary may request (within a reasonable time after the Participant’s death, as specified by the Committee) that all remaining installment payments that are otherwise to be paid to the Beneficiary be accelerated and paid in the form of an immediate lump sum payment, subject to the requirement that ten percent (10%) of the remaining amounts be permanently forfeited. |
(d) | Scheduled Distribution. |
(e) | Early Distribution – Grandfathered Deferrals. Notwithstanding any other provision of the Plan, a Participant or Beneficiary may, at any time prior to or subsequent to commencement of payments, request in writing to the Committee to have any or all vested amounts in his or her Accounts that constitute Grandfathered Deferred Compensation Plan Deferrals or deferred Grandfathered Restoration Plan Benefits paid in an immediate lump sum distribution, provided that an amount equal to ten percent (10%) of the requested distribution shall be permanently forfeited from the Participant’s Accounts prior to such distribution. Any such lump sum distribution shall be paid as soon as practicable after the Committee’s receipt of the Participant’s (or Beneficiary’s) request. The minimum permitted early distribution under this Section 6.1(e) shall be $3,000. |
(f) | Hardship Distribution. At any time prior to the time an amount is otherwise payable hereunder, an active Participant may request a distribution of all or a portion of any vested amounts credited to the Participant’s Accounts on account of the Participant’s financial hardship, subject to the following requirements: |
(i) | Such distribution shall be made, in the sole discretion of the Committee, if the Participant has incurred an unforeseeable emergency. The Committee shall consider any requests for payment under this Section 6.1(f) in accordance with the standards of interpretation described in Code Section 409A and the regulations and other guidance thereunder. |
(ii) | For purposes of this Plan, an “unforeseeable emergency” shall be limited to a severe financial hardship to the Participant resulting from an illness or accident of the Participant, the Participant’s Spouse, the Participant’s Beneficiary, or of a Participant’s dependent (as defined in Code Section 152, without regard to Code Sections 152(b)(1), (b)(2), and (d)(1)(B)); loss of the Participant’s property due to casualty (including the need to rebuild a home following damage to a home not otherwise covered by insurance, for example, not as a result of a natural disaster); the need to pay for the funeral expenses of the Participant’s Spouse, the Participant’s Beneficiary, or the Participant’s dependent (as defined in Code Section 152, without regard to Code Sections |
(iii) | Notwithstanding the foregoing, distribution on account of an unforeseeable emergency under this subsection may not be made to the extent that such emergency is or may be relieved: |
(A) | through reimbursement or compensation by insurance or otherwise, |
(B) | by liquidation of the Participant’s assets, to the extent the liquidation of such assets would not itself cause severe financial hardship, or |
(b) | Distribution Alternatives for Restoration Plan Benefits. A Participant who is eligible to receive a Restoration Plan Benefit hereunder shall receive payment of such benefit in the Normal Form of Payment unless the Participant, subject to Section 6.2(e) below, elects an optional form of distribution as described in Section 6.2(d) below or an annuity form of benefit otherwise available under the Retirement Plan. |
(c) | Lump Sum Distribution. A Participant may elect, in accordance with such procedures established by the Committee, to have any vested deferral amounts credited to his Accounts paid in the form of a single lump sum distribution at the time otherwise required or permitted under the Plan. |
(d) | Annual Installment Distributions. A Participant may elect, in accordance with such procedures established by the Committee, to have any vested deferral amounts credited to his Accounts paid at the time otherwise required or permitted in the form of annual installments over a 5 or 10- year period commencing at the time otherwise required or permitted under the Plan and paid annually thereafter for the remainder of the installment period (subject to Section 6.1(b)). Notwithstanding the foregoing, in the case of any deferral amounts that were credited to a Participant’s Accounts prior to January 1, 2017 and that are vested, the Participant may elect, in accordance with such procedures established by the Committee, to have such amounts paid at the time otherwise required or permitted in the form of annual installments over a 15-year period commencing at the time otherwise required or permitted under the Plan and paid annually thereafter for the remainder of the installment period (subject to Section 6.1(b)). For these purposes, the amount of each installment payment shall be determined by multiplying the value of the Participant’s remaining vested Accounts by a fraction, the numerator of which is one (1) and the denominator of which is the number of calendar years remaining in the installment period. Notwithstanding the foregoing, if a Participant’s employment is terminated for cause, as determined by the Company, full payment of all remaining amounts attributable to Grandfathered Deferred Compensation Plan Deferrals and deferred Grandfathered Restoration Plan Benefits in such Participant’s Account shall be paid in the form of a single lump sum payment as soon as practicable after such termination. |
(A) | Notwithstanding the foregoing, in accordance with the written, telephonic or electronic procedures prescribed by the Committee, a Participant may elect to change the form applicable to a particular category of deferral attributable to Grandfathered Deferred Compensation Plan Deferrals or deferred Grandfathered Restoration Plan Benefits at any time, provided that such election must be made at least twelve (12) consecutive months before the date on which such distribution otherwise would have been made or commenced. Any such change that is not in effect for at least the applicable twelve-month period shall be disregarded and the last valid election shall be substituted in its place. In the absence of such a valid election, distribution shall be made in the form of a single lump sum distribution in cash and, to the extent distributable amounts are credited to the Participant’s Deferred Stock Account, in shares of Common Stock (with any fractional share interest therein paid in cash to the extent of the then fair market value thereof). |
(B) | In addition, with respect to a Participant who has commenced receiving his Grandfathered Deferred Compensation Plan Deferrals or deferred Grandfathered Restoration Plan Benefit paid in installment payments, such Participant may elect, pursuant to the written, telephonic or electronic method prescribed by the Committee (or its delegate), to have all remaining installment payments attributable to such grandfathered amounts that are otherwise to be paid to the Participant at least twelve (12) months after the date of the election be accelerated and paid in a single lump sum payment as of a date specified by the Committee that is at least twelve (12) months after the date of the election. |
(A) | The election will not take effect until at least twelve months after the date on which the election is made and will not be recognized with respect to payments that would otherwise have commenced during such twelve-month period; |
(B) | Except for payments made on account of a Participant’s death or financial hardship under Section 6.1(f), the payment with respect to which such election is made (or the first payment, in the case of installment payments) shall be deferred for a period of not less than five years from the date such payment would otherwise have been made; |
(C) | Any election related to payments that would otherwise have commenced as of a specified time, as opposed to the Participant’s Separation from Service, may not be made less than twelve months prior to the date on which such payments would otherwise have commenced; and |
(D) | The election will not take effect if the payment (or the first payment, in the case of installment payments) would be scheduled to commence after the later of the date the Participant reaches age 70 or the date the Participant retires from active employment under the minimum deferral period required pursuant to (B) above. |
(A) | General Rule. Where, pursuant to Section 4.4(b)(iii) and this Section 6.2, a Participant wishes to waive the Normal Form of Payment with respect his Restoration Plan Benefit and elect an optional form of payment, the following requirements must be met: |
(1) | The election will not take effect until at least twelve months after the date on which the election is made and will not be recognized with respect to payments that would otherwise have commenced during such twelve-month period; |
(2) | Except for payments made on account of a Participant’s death, the first payment with respect to which such election is made shall be delayed for a period |
(B) | Annuity Election. If a Participant elects to change the form of distribution with respect to a Restoration Plan Benefit to an annuity form of payment in accordance with subparagraph (A), the Participant may select the specific annuity form of payment at any time prior to commencement of annuity payments from among the following actuarially equivalent annuity options: |
(1) | With respect to the portion of the Participant’s Restoration Plan Benefit that is determined using the final average pay formula under the Retirement Plan or that is otherwise described in Section 4.4(b)(i)(D): (i) a single life annuity payable for the Participant’s lifetime; (ii) a joint and survivor annuity payable for the lives of the Participant and the Participant’s Spouse under which if the Spouse shall survive the Participant, benefit payments shall continue after the Participant’s death for the remaining lifetime of the Spouse in an amount equal to 50%, 75% or 100% (as elected by the Participant prior to benefit commencement) of the benefits payable during the Participant’s life; or (iii) a guaranteed payments annuity option payable in |
(2) | With respect to the portion of the Participant’s Restoration Plan Benefit that is determined using the cash balance formula under the Retirement Plan: (i) a single life annuity payable for the Participant’s lifetime; (ii) a joint and survivor annuity payable for the lives of the Participant and the Participant’s Spouse under which if the Spouse shall survive the Participant, benefit payments shall continue after the Participant’s death for the remaining lifetime of the Spouse in an amount equal to 50% or 75% or, if the Participant is age 55 or older on the date of benefit commencement, 100% (as elected by the Participant prior to benefit commencement) of the benefits payable during the Participant’s life; or (iii) if the Participant is age 55 or older on the date of benefit commencement, a guaranteed payments annuity option payable in either 60 or 120 monthly installments for the life of the Participant under which if the Participant dies before receiving the designated number of payments, the remaining benefit payments shall continue to the Participant’s Beneficiary after the Participant’s death. |
(C) | Actuarial Factors for Determining Optional Annuity Payments. Unless provided otherwise in a Participant’s Agreement, if any, if an annuity form of payment of a Restoration Plan Benefit is to be made to a Participant (or Beneficiary) whose Restoration Plan Benefit is determined in whole or in part using the cash balance formula under the Retirement Plan or that is otherwise described in Section 4.4(b)(i)(D), the annuity attributable to such portion of the Restoration Plan Benefit shall be calculated by first converting the Participant’s Restoration Plan Benefit expressed as an account balance benefit into a single life annuity at benefit commencement determined using the Applicable Interest Rate and the Applicable Mortality Table (as such terms are defined in the Retirement Plan) used under the Retirement Plan for converting a cash balance account to a single life annuity. If the Participant elects an optional form of annuity other |
(a) | Nothing in the Plan shall interfere with or limit in any way the right of the Company to terminate any Participant’s employment at any time, nor confer upon any Participant any right to continue in the employ of the Company. |
(b) | Nothing in the Plan shall be construed to be evidence of any agreement or understanding, express or implied, that the Company will continue to |
(c) | No employee shall have a right to be selected as a Participant, or, having been so selected, to be continued as a Participant. |
(d) | Nothing in this Plan shall affect the right of a recipient to participate in and receive benefits under and in accordance with any pension, profit- sharing, deferred compensation or other benefit plan or program of the Company. |
Title | Executive Vice President and General Counsel |
Duties; Responsibilities | Reports to the Chairman and Chief Executive Officer of BD. Subject to approval of the Board, Executive shall be a corporate officer of BD. Executive shall serve as BD’s chief legal adviser and shall: (i) counsel management on the legal implications of all organization activities and problems; (ii) provide legal services as required in legal proceedings; (iii) keep abreast of legislative and administrative regulatory developments; and (iv) obtain the services of outside counsel as required to complement available internal legal resources. |
Base Salary | Through September 2018, a base salary of $600,000 (“Base Salary”). Following September 2018, Base Salary shall be commensurate with Executive’s position as an executive officer of BD. |
STI/LTI | • Through September 2018, an annual short-term incentive target opportunity (“STI”) equal to 75% of Base Salary and an annual long-term incentive target opportunity equal to $1,250,000. Following September, 2018, STI shall be commensurate with Executive’s position as an executive officer of BD. The form of, amount and vesting conditions related to, annual long-term incentive awards (“Annual LTI”) granted to Executive shall be substantially similar to those granted to similarly situated executives of BD. Executive shall be entitled to receive his 2017 annual bonus pursuant to the terms of Section 7.06(d) of the Merger Agreement. If BD terminates the employment of Executive without Cause or Executive resigns for Good Reason (each as defined below) following the Closing but prior to December 31, 2017, Executive shall receive a prorated annual bonus in accordance with Section 7.06(d) of the Merger Agreement. • If the Closing occurs before the date Bard grants long-term incentive awards for 2018, BD shall grant Executive Annual LTI equal to $1,250,000 at the same time as it grants Annual LTI in the ordinary course of business to those Bard employees that are employed by BD following the Transaction. • If the Closing occurs following the date Bard grants long-term incentive awards for 2018 and the grant date value of the awards granted to Executive is less than $1,250,000, BD shall grant Executive Annual LTI with a target opportunity equal to the grant date value of the difference between the value of the award granted by Bard and $1,250,000, with such Annual LTI granted at the same time as BD grants Annual LTI in the ordinary course of business to those Bard employees that are employed by BD following the Transaction. |
Employee Benefits | Through December 2018, BD shall provide Executive with (i) health and welfare benefits that are substantially comparable in the aggregate and (ii) retirement benefits that are no less favorable, in each case, to those provided to Executive by Bard immediately prior to Closing. Commencing January 1, 2019, Executive shall be eligible to participate in employee benefit plans sponsored by BD in accordance with the terms of such plans. |
Treatment of Bard COC Agreement Cash Severance | • The total cash severance payment provided under the Bard COC Agreement is equal to $3,154,029 (the “Total Cash Severance”). Executive hereby agrees to the conversion of the Total Cash Severance into a retention award (the “Retention Award”), which shall vest and become payable in cash as follows: o At Closing, BD shall pay Executive one-third of the Retention Award. o The remaining two-thirds of the Retention Award shall vest and become payable in equal installments on continued employment through each of the first two anniversaries of the Closing or, if earlier, on a termination of employment by BD without Cause (as defined below) or by Executive with Good Reason (as defined below) or as a result of Executive’s death or disability (as defined in the BD long-term disability plan). • Executive agrees to waive (i) good reason under the Bard COC Agreement and (ii) deposit of amounts in respect of cash severance entitlements into the rabbi trust. |
SIRP Treatment | • Plan Freeze. Executive shall agree to enter into an amendment (the “Amendment”) to the Supplemental Insurance Retirement Plan Agreement by and between Executive and Bard, dated July 16, 2014 (the “SIRP Agreement”). The Amendment shall provide that the values of the lump sum change of control enhanced benefit and the normal form retirement benefit shall be fixed as of Closing: o (i) as of Closing, the total SIRP benefit taking into account the change of control enhancement under Article VI shall be determined and vest without regard to whether termination of employment occurs during the three year period following Closing; o (ii) as of Closing, all future SIRP benefit accruals shall be frozen since the change of control enhancement takes into account future service, compensation increases and earnings through age 65; and o (iii) as of termination of Executive’s employment at any time following Closing, the total enhanced SIRP benefit determined pursuant to clause (i) shall be paid as follows: the amount equal to the accrued SIRP benefit (whether or not vested) determined as of Closing based on actual service and compensation through the date of Closing shall be paid in monthly installments over 15 years commencing on the later to occur of Executive’s termination of employment or age 55, and the benefit attributable to the change of control enhancement (equal the total SIRP benefit determined under clause (i) above, less the accrued SIRP benefit determined as of Closing) shall be paid in a lump sum upon termination of employment, subject to a six month delay as applicable. • SIRP Benefit. As of April 1, 2017, Executive’s total SIRP benefit under sub-bullet (i) was $3,826,038 (assuming for the purposes of this Term Sheet that the Transaction closed on such date), and the portion of this amount attributable to the change of control enhancement was $3,622,854, and the portion of this amount attributable to the normal form retirement benefit was $203,184. As of Closing, and in connection with the Amendment, Executive’s total SIRP benefit shall be recalculated under the existing terms (including, for the avoidance of doubt, a discount rate of 4.29%) of the SIRP Agreement. As of the date Executive terminates employment with BD, BD shall provide Executive with a statement showing value of the total SIRP benefit adjusted to reflect the time value of the benefit based on the discount rate. • One-Time Election. Executive shall be provided an election to change the payment of the normal retirement benefit from monthly installments over 15 years commencing on the later to occur of Executive’s termination of employment or age 55, to a lump sum amount payable 5 years following such event. • Rabbi Trust. Executive agrees to waive deposit of amounts payable under the SIRP Agreement into the rabbi trust. |
Unvested Equity Awards | • At Closing, BD shall vest Executive’s unvested converted Bard equity awards (including for the avoidance of doubt any converted Bard “premium” MSPP Units): o BD SARs (converted Bard options) shall remain exercisable for the term of the awards o BD RSUs (converted Bard RSUs and PLTIPs) shall be settled in BD shares as soon as administratively practicable following Closing • BD Units (converted Bard MSPP Units) shall be settled in BD shares on the date Executive elected to receive payment and, if no election was made, the earlier to occur of the fourth anniversary of the date of grant or the date that is six months following termination of employment. |
Vested Equity Awards | • For the avoidance of doubt, under the terms of the Transaction Agreement, Executive’s (i) vested Bard Options shall be converted to vested BD SARs and shall remain exercisable for the term of the awards and (ii) Bard “elective” MSPP Units granted in 2015 or later shall be converted into BD Units. |
Restrictive Covenants | The Agreement Relating to Inventions, Trade Secrets and Confidential Information with Covenant Not to Compete by and between Bard and Executive, dated May 2, 2014 (the “Restrictive Covenant Agreement”), shall continue in effect following Closing. Notwithstanding anything set forth in this Agreement or the Restrictive Covenant Agreement to the contrary, (i) Executive shall not be prohibited from reporting possible violations of federal or state law or regulation to any governmental agency or entity or making other disclosures that are protected under the whistleblower provisions of federal or state law or regulation, nor is Executive required to notify BD regarding any such reporting, disclosure or cooperation with the government, and (ii) no provision contained in this Agreement or the Restrictive Covenant Agreement is intended to conflict with Section 1833(b) of the Defend Trade Secrets Act of 2016 or create liability for disclosures of trade secrets that are expressly allowed by such Section. |
BD COC Arrangement | At Closing, Executive shall become party to a change of control agreement substantially in the form provided to similarly situated executives of BD. |
Relinquishment of Bard COC Agreement; Survival of Certain Provisions | Executive agrees to relinquish the Bard COC Agreement and waive all rights thereunder; except that Sections 6(f) (Key Employees), 8 (Full Settlement), 9 (Gross Up), 10 (Confidential Information), 11 (Successors) and 12 (Miscellaneous) of the Bard COC Agreement shall continue to apply following the Closing, it being understood and agreed that Section 9 shall apply only to payments that could be subject to the excise tax imposed by Section 4999 of the Code in connection with the Transaction. |
Definitions | Cause shall have the meaning set forth in the Bard COC Agreement Good Reason shall mean, in each case without the prior written consent of Executive, a (i) material reduction in base salary or target bonus, provided that any such reduction occurring from or after September 2018 shall not constitute Good Reason where such reduction similarly affects similarly situated executives, (ii) relocation of principal place of employment by more than fifty (50) miles, (iii) material breach by BD of this Term Sheet or the Offer Letter, or (iv) a material diminution in Executive's authority, duties, responsibilities, title, position or reporting. Executive shall provide notice to the Executive Vice President and Chief Human Resources Officer of BD of the existence of Good Reason condition within ninety (90) days of the date Executive learns of the condition, and BD shall have a period of thirty (30) days during which it may remedy the condition, and in case of full remedy such condition shall not be deemed to constitute Good Reason. |
Name of Subsidiary | Where Incorporated | |
Accuri Cytometers, Inc. | Delaware | |
Alverix, Inc. | Delaware | |
Bard Access Systems, Inc. | Utah | |
Bard Acquisition Sub, Inc. | Delaware | |
Bard ASDI, Inc. | New Jersey | |
Bard Brachytherapy, Inc. | Delaware | |
Bard Devices, Inc. | Delaware | |
Bard Healthcare, Inc. | Texas | |
Bard International, Inc. | Delaware | |
Bard MRL Acquisition Corp. | Delaware | |
Bard Peripheral Vascular, Inc. | Arizona | |
BD Ventures LLC | New Jersey | |
BDX INO LLC | Delaware | |
Becton Dickinson Biosciences, Systems and Reagents Inc. | California | |
Becton Dickinson Global Holdings I LLC | Delaware | |
Becton Dickinson Global Holdings II LLC | Delaware | |
Becton Dickinson Global Holdings III LLC | Delaware | |
Becton Dickinson Global Holdings IV LLC | Delaware | |
Becton Dickinson Global Holdings V LLC | Delaware | |
Becton Dickinson Infusion Therapy Systems Inc. | Delaware | |
Becton Dickinson Korea Holding, Inc. | Delaware | |
Becton Dickinson Luxembourg III LLC | Delaware | |
Becton Dickinson Luxembourg LLC | Delaware | |
Becton Dickinson Malaysia, Inc. | Oregon | |
Becton Dickinson Matrex Holdings, Inc. | Delaware | |
Becton Dickinson Overseas Services Ltd. | Nevada | |
Becton Dickinson Venture LLC | Delaware | |
Bridger Biomed, Inc. | Montana | |
C. R. Bard, Inc. | New Jersey | |
Cardal II, LLC | Delaware | |
CareFusion 213, LLC | Delaware | |
CareFusion 2200, Inc. | Delaware | |
CareFusion 2201, Inc. | Delaware | |
CareFusion 302, LLC | Delaware | |
CareFusion 303, Inc. | Delaware | |
CareFusion Corporation | Delaware | |
CareFusion Manufacturing, LLC | Delaware | |
CareFusion Resources, LLC | Delaware | |
CareFusion Solutions, LLC | Delaware | |
Cell Analysis Systems, Inc | Illinois | |
Cellular Research, Inc. | Delaware | |
CME America LLC | Delware |
Name of Subsidiary | Where Incorporated | |
CRISI Medical Systems, Inc. | Delaware | |
Davol Inc. | Delaware | |
Difco Laboratories Incorporated | Michigan | |
DVL Acquisition Sub, Inc. | Delaware | |
Dymax Corporation | Pennsylvania | |
Enturican, Inc. | Kansas | |
FJ International, Inc. | Oregon | |
FlowCardia, Inc. | Delaware | |
FlowCardia, LLC | Delaware | |
FlowJo LLC | Oregon | |
Franklin Lakes Enterprises, L.L.C. | New Jersey | |
Gesco International, Inc. | Massachusetts | |
Gesco International, LLC | Massachusetts | |
HandyLab, Inc. | Delaware | |
IBD Holdings LLC | Delaware | |
JoHome LLC | Oregon | |
Liberator Health and Education Services, Inc. | Florida | |
Liberator Health and Wellness, Inc. | Florida | |
Liberator Medical Holdings, Inc. | Nevada | |
Liberator Medical Supply, Inc. | Florida | |
Loma Vista Medical, Inc. | Delaware | |
Loma Vista Medical, LLC | Delaware | |
Lutonix, Inc. | Delaware | |
Medafor, Inc. | Minnesota | |
MedChem Products, Inc. | Massachusetts | |
Medegen, LLC | California | |
Medivance, Inc. | Delaware | |
Med-Safe Systems, Inc. | California | |
Navarre Biomedical, LLC | Minnesota | |
Navarre Biomedical, Ltd. | Minnesota | |
Neomend, Inc. | Delaware | |
NOW Medical Distribution, Inc. | Delaware | |
NOW Medical Distribution, LLC | Delaware | |
Omega Biosystems Incorporated | Delaware | |
PharMingen | California | |
ProSeed, Inc. | New Jersey | |
PureWick Corporation | California | |
Roberts Laboratories, Inc. | Arizona | |
Rochester Medical Corporation | Minnesota | |
Safety Syringes, Inc. | California | |
SenoRx, Inc. | Delaware | |
SenoRx, LLC | Delaware | |
Shield Healthcare Centers, Inc. | Delaware | |
Sirigen, Inc. | California |
Name of Subsidiary | Where Incorporated | |
Specialized Health Products International, Inc. | Delaware | |
Specialized Health Products International, LLC | Delaware | |
Specialized Health Products, Inc. | Utah | |
Staged Diabetes Management LLC | New Jersey | |
Surgical Site Solutions, Inc. | Wisconsin | |
Tri-County Medical & Ostomy Supplies, Inc. | Tennessee | |
TriPath Imaging, Inc. | Delaware | |
TVA Medical, Inc. | Delaware | |
Vascular Pathways, Inc. | Delaware | |
Venetec International, Inc. | Delaware | |
Venetec International, LLC | Delaware | |
Y-Med, Inc. | Delaware | |
Y-Med, LLC | Delaware |
Name of Subsidiary | Where Incorporated | |
Abastecedora de Dispositivos Medicos JL S.A. de C.V. | Mexico | |
Alpha Altitude Sdn Bhd | Malaysia | |
Alverix (M) Sdn. Bhd. | Malaysia | |
ARX SA | Switzerland | |
Bard (Thailand) Limited | Thailand | |
Bard Australia Pty. Limited | Australia, New South Wales | |
Bard Benelux N.V. | Belgium | |
Bard Brasil Indústria e Comércio de Produtos Para a Saúde Ltda. | Brazil, Sao Paulo | |
Bard Canada Inc. | Canada, Ontario | |
Bard Chile S.p.A. | Chile | |
Bard Colombia S.A.S. | Columbia | |
Bard Czech Republic s.r.o. | Czech Republic, Prague | |
Bard de Espana, S.A. | Spain | |
Bard Dublin ITC Limited | Ireland | |
Bard EMEA Finance Center Sp.z o.o. | Poland | |
Bard European Distribution Center N.V. | Belgium | |
Bard Finance B.V. & Co. KG. | Netherlands | |
Bard Financial Services Ltd. | England | |
Bard Finland OY | Finland | |
Bard France S.A.S. | France | |
Bard Healthcare Science (Shanghai) Limited | China, Shanghai | |
Bard Hellas S.A. | Greece | |
Bard Holding GmbH & Co. KG | Germany | |
Bard Holding SAS | France | |
Bard Holdings Limited | England | |
Bard Holdings Netherlands B.V. | Netherlands | |
Bard Hong Kong Limited | China, Shanghai | |
Bard India Healthcare Pvt. Ltd. | India, Maharashtra | |
Bard International Holdings, B.V. | Netherlands | |
(Bard Istanbul Healthcare Limited Company) | Turkey, Istanbul | |
Bard Korea Ltd. | Korea, Republic | |
Bard Limited | England | |
Bard Malaysia Healthcare Sdn. Bhd. | Malaysia | |
Bard Medica SA | Switzerland, Geneva | |
Bard Medical Devices (Beijing) Co., Ltd. | China | |
Bard Medical R&D (Shanghai) Co., Ltd. | China, Shanghai | |
Bard Medical SA (Proprietary) Limited | South Africa, Johannesburg, Gauteng | |
Bard Mexico Realty, S. de R.L. de C.V. | Mexico, Chihuahua | |
Bard Netherlands C. V. | Netherlands | |
Bard Norden AB | Sweden | |
Bard Norway AS | Norway | |
Bard Pacific Health Care Company Ltd. | Taiwan | |
Bard Poland Sp. z.o.o. | Poland | |
Bard Reynosa, S.A. de C.V. | Mexico, Tamaulipas | |
Bard S.r.l. | Italy | |
Bard Sdn. Bhd. | Mayalsia | |
Bard Shannon Limited | Ireland |
Bard Singapore Private Limited | Singapore | |
Bard Sourcing Office Singapore Pte. Ltd. | Singapore | |
Bard Sweden AB | Sweden | |
Bard UK Newco Limited | England | |
Bard Verwaltung GmbH | Germany | |
BD Holding S. de R.L. de C.V. | Mexico | |
BD Kiestra BV | Netherlands | |
BD Rapid Diagnostic (Suzhou) Co., Ltd. | China | |
BD Switzerland Sarl | Switzerland | |
BD West Africa Limited | Ghana | |
BDIT Singapore Pte. Ltd. | Singapore | |
Becton Dickinson A.G. | Switzerland | |
Becton Dickinson A/S | Denmark | |
Becton, Dickinson and Company, Ltd. | Ireland | |
Becton Dickinson Argentina S.R.L. | Argentina | |
Becton Dickinson Asia Holdings Ltd. | Gibraltar | |
Becton Dickinson Asia Limited | Hong Kong | |
Becton Dickinson Asia Pacific Limited | British Virgin Islands | |
Becton Dickinson Austria GmbH | Austria | |
Becton Dickinson Austria Holdings GmbH | Austria | |
Becton Dickinson Benelux N.V. | Belgium | |
Becton Dickinson Bermuda L.P. | Bermuda | |
Becton, Dickinson B.V. | Netherlands | |
Becton Dickinson Canada Inc. | Canada | |
Becton Dickinson Caribe Ltd. | Cayman Islands | |
Becton Dickinson Croatia d.o.o. | Croatia | |
Becton Dickinson Czechia s.r.o. | Czech Republic | |
Becton Dickinson de Colombia Ltda. | Colombia | |
Becton Dickinson de Mexico, S.A. de C.V. | Mexico | |
Becton Dickinson del Uruguay S.A. | Uruguay | |
Becton Dickinson Dispensing Belgium BVBA | Belgium | |
Becton Dickinson Dispensing Denmark A/S | Denmark | |
Becton Dickinson Dispensing France SAS | France | |
Becton Dickinson Dispensing Ireland Limited | Ireland | |
Becton Dickinson Dispensing Norway | Norway | |
Becton Dickinson Dispensing Spain S.L.U. | Spain | |
Becton Dickinson Dispensing UK Ltd. | United Kingdom | |
Becton Dickinson Distribution Center N.V. | Belgium | |
Becton Dickinson Dublin Designated Activity Company | Ireland | |
Becton Dickinson East Africa Ltd. | Kenya | |
Becton Dickinson Europe Holdings S.A.S. | France | |
Becton Dickinson France S.A.S. | France | |
Becton Dickinson (Gibraltar) Holdings Ltd. | Gibraltar | |
Becton Dickinson (Gibraltar) Limited | Gibraltar | |
Becton Dickinson (Gibraltar) Management Limited | Gibraltar | |
Becton Dickinson GmbH | Germany | |
Becton Dickinson GSA Beteilgungs GmbH | Germany | |
Becton Dickinson Guatemala S.A. | Guatemala | |
Becton Dickinson Hellas S.A. | Greece | |
Becton Dickinson Holdings Pte Ltd. | Singapore |
Becton Dickinson Hungary Kft. | Hungary | |
Becton Dickinson India Private Limited | India, Maharashtra | |
Becton, Dickinson Industrias Cirurgicas, Ltda. | Brazil | |
Becton Dickinson Infusion Therapy AB | Sweden | |
Becton Dickinson Infusion Therapy B.V. | Netherlands | |
Becton Dickinson Infusion Therapy Holdings UK Limited | United Kingdom | |
Becton Dickinson Infusion Therapy Systems Inc., S.A. de C.V. | Mexico | |
Becton Dickinson Infusion Therapy UK | United Kingdom | |
Becton Dickinson Insulin Syringe, Ltd. | Cayman Islands | |
Becton Dickinson International Holdings Pte Ltd. | Singapore | |
Becton Dickinson International Holdings II Pte Ltd. | Singapore | |
Becton Dickinson Ireland Holding Limited | Ireland | |
Becton Dickinson Israel Ltd. | Israel | |
Becton Dickinson Italia S.p.A. | Italy | |
Becton Dickinson Ithalat Ihracat Limited Sirketi | Turkey | |
Becton Dickinson Korea Ltd. | Korea | |
Becton Dickinson Ltd. | New Zealand | |
Becton Dickinson Luxembourg Finance S.a.r.L. | Luxembourg | |
Becton Dickinson Luxembourg Finco S.a.r.L. | Luxembourg | |
Becton Dickinson Luxembourg Global Holdings Sarl | Luxembourg | |
Becton Dickinson Luxembourg Holdings II S.a.r.L | Luxembourg | |
Becton Dickinson Luxembourg Holdings III S.a.r.L | Luxembourg | |
Becton Dickinson Luxembourg Holdings IV S.a.r.L | Luxembourg | |
Becton Dickinson Luxembourg Holdings S.a.r.L | Luxembourg | |
Becton Dickinson Luxembourg III LLC S.C.S. | Luxembourg | |
Becton Dickinson Luxembourg LLC S.C.S. | Luxembourg | |
Becton Dickinson Luxembourg S.a.r.L. | Luxembourg | |
Becton Dickinson Management GmbH & Co. KG | Germany | |
Becton Dickinson Management S.a.r.L | Luxembourg | |
Becton Dickinson (Mauritius) Limited | Mauritius | |
Becton Dickinson Medical (S) Pte Ltd. | Singapore | |
Becton Dickinson Medical Devices (Shanghai) Co., Ltd. | China | |
Becton Dickinson Medical Devices (Suzhou) Co., Ltd. | China | |
Becton Dickinson Medical Products Pte. Ltd. | Singapore | |
Becton Dickinson Netherlands Global Holdings I C.V. | Netherlands | |
Becton Dickinson Netherlands Global Holdings II C.V. | Netherlands | |
Becton Dickinson Netherlands Global Holdings III C.V. | Netherlands | |
Becton Dickinson Netherlands Holdings B.V. | Netherlands | |
Becton Dickinson Netherlands Holdings II B.V. | Netherlands | |
Becton Dickinson Norway AS | Norway | |
Becton Dickinson O.Y. | Finland | |
Becton Dickinson Pakistan (Pvt) Ltd. | Pakistan | |
Becton Dickinson Penel Limited | Cayman Islands | |
Becton Dickinson Philippines, Inc. | Philippines | |
Becton Dickinson Polska Sp.z.o.o. | Poland | |
Becton Dickinson Portugal, Unipessoal, Lda. | Portugal | |
Becton Dickinson Pty. Ltd. | Australia | |
Becton Dickinson (Pty) Ltd. | South Africa | |
Becton Dickinson Research Centre Ireland Limited | Ireland | |
Becton Dickinson Rowa Germany GmbH | Germany |
Becton Dickinson Rowa Italy Srl | Italy | |
Becton Dickinson S.A. | Spain | |
Becton Dickinson Sample Collection GmbH | Switzerland | |
Becton Dickinson Sdn. Bhd. | Malaysia | |
Becton Dickinson Slovakia s.r.o. | Slovakia | |
Becton Dickinson Sweden AB | Switzerland | |
Becton Dickinson Sweden Holdings AB | Sweden | |
Becton Dickinson Switzerland Global Holdings SarL | Switzerland | |
Becton Dickinson (Thailand) Limited | Thailand | |
Becton Dickinson U.K. Limited | United Kingdom | |
Becton Dickinson Venezuela, C.A. | Venezuela | |
Becton Dickinson Verwaltungs GmbH | Germany | |
Becton Dickinson Vostok LLC | Russia | |
Becton Dickinson Worldwide Investments Sa.r.L. | Luxembourg | |
Becton Dickinson Zambia Limited | Zambia | |
Benex Ltd. | Ireland | |
C. R. Bard (Portugal) - Produtos e Artigos Medicos e Farmaceuticos | Portugal, Lisbon | |
C. R. Bard GmbH | Germany | |
C. R. Bard Netherlands Sales B.V. | Netherlands | |
Cardial S.A.S. | France | |
CareFusion Asia (HK) Limited | Hong Kong | |
CareFusion Australia 316 Pty Limited | Australia | |
CareFusion (Barbados) SrL | Barbados | |
CareFusion BH 335 d.o.o. Cazin | Bosnia | |
Care Fusion Development Private Limited | India | |
CareFusion D.R. 203 Ltd. | Bermuda | |
CareFusion (Shanghai) Commercial and Trading Co. Limited | Portugal | |
CareFusion Finland 320 Oy | Finland | |
CareFusion France 309 S.A.S. | France | |
CareFusion Germany 318 GmbH | Germany | |
CareFusion Iberia 308 S.L. | Spain | |
CareFusion Israel 330 Ltd. | Israel | |
CareFusion Italy 311 S.r.l. | Italy | |
CareFusion Italy 312 S.p.A. | Italy | |
CareFusion Japan 324 GK | Japan | |
CareFusion Malaysia 325 Sdn Bhd | Malaysia | |
CareFusion Mexico 215 SA de CV | Mexico | |
CareFusion Netherlands 310 B.V. | Netherlands | |
CareFusion Netherlands 328 B.V. | Netherlands | |
CareFusion Netherlands 503 B.V. | Netherlands | |
CareFusion Netherlands 504 B.V. | Netherlands | |
CareFusion Netherlands Financing 283 C.V. | Netherlands | |
CareFusion New Zealand 313 Limited | New Zealand | |
CareFusion Norway 315 A/S | Norway | |
CareFusion S.A. 319 (Proprietary) Limited | South Africa | |
CareFusion Singapore 243 Pte. Ltd. | Singapore | |
CareFusion Sweden 314 AB | Sweden | |
CareFusion U.K. 244 Limited | United Kingdom | |
CareFusion U.K. 305 Limited | United Kingdom | |
CareFusion U.K. 306 Limited | United Kingdom |
Carmel Pharma AB | Sweden | |
Clearstream Technologies Group Limited | Ireland | |
Clearstream Technologies Limited | Ireland | |
CME Ltd. | Israel | |
CME Medical (UK) Limited | United Kingdom | |
CME UK (Holdings) Limited | United Kingdom | |
Corporativo BD de Mexico, S. de R.L. de C.V. | Mexico | |
DLD (Bermuda) Ltd. | Bermuda | |
Davol International Limited | England | |
Davol Surgical Innovations, S.A. de C.V. | Mexico, Chihuahua | |
Distribuidora BD Mexico, S.A. de C.V. | Mexico | |
Dutch American Manufacturers (D.A.M.) B.V. | Netherlands | |
Embo Medical Limited | Ireland | |
Enturia de México S. de R.L. de C.V. | Mexico | |
Gamer Lasertechnik GmbH | Germany | |
GenCell Biosystems Ltd. | Ireland | |
GeneOhm Sciences Canada Inc. | Canada | |
Kabushiki Kaisha Medicon (Medicon, Inc.) | Japan | |
Limited Liability Company Bard Rus | Russian Federation | |
Nippon Becton Dickinson Company, Ltd. | Japan | |
PreAnalytiX GmbH | Switzerland | |
Procesos para Esterilizacion, S.A. de C.V. | Mexico | |
Productos Bard de Mexico, S.A. de C.V. | Mexico, Mexico City | |
Productos Para el Cuidado de la Salud, S.A. de C.V. | Mexico, Nogales | |
PT Becton Dickinson Indonesia | Indonesia | |
Puls Medical Devices AS LC | Norway | |
Rochester Medical Ltd. | United Kingdom | |
RPM Home Health Care Limited | United Kingdom | |
Sendal, S.L.U. | Spain | |
Sirigen II Limited | United Kingdom | |
Sistemas Médicos ALARIS, S.A. de C.V. | Mexico | |
Touchstone Medical Limited | United Kingdom | |
Vas-Cath Incorporated | Canada, Ontario |
/s/ Catherine M. Burzik | /s/ Gary A. Mecklenburg | |
Catherine M. Burzik | Gary A. Mecklenburg | |
/s/ R. Andrew Eckert | /s/ David F. Melcher | |
R. Andrew Eckert | David F. Melcher | |
/s/ Vincent A. Forlenza | /s/ Willard J. Overlock, Jr. | |
Vincent A. Forlenza | Willard J. Overlock, Jr. | |
/s/ Claire M. Fraser | /s/ Claire Pomeroy | |
Claire M. Fraser | Claire Pomeroy | |
/s/ Jeffrey W. Henderson | /s/ Rebecca W. Rimel | |
Jeffrey W. Henderson | Rebecca W. Rimel | |
/s/ Christopher Jones | /s/ Timothy M. Ring | |
Christopher Jones | Timothy M. Ring | |
/s/ Marshall O. Larsen | /s/ Bertram L. Scott | |
Marshall O. Larsen | Bertram L. Scott |
Date: November 21, 2018 |
/s/ Vincent A. Forlenza |
Vincent A. Forlenza |
Chairman and Chief Executive Officer |
Date: November 21, 2018 |
/s/ Christopher R. Reidy |
Christopher R. Reidy |
Executive Vice President, Chief Financial Officer and Chief Administrative Officer |
Date: November 21, 2018 |
/s/ Vincent A. Forlenza |
Vincent A. Forlenza |
Chief Executive Officer |
Date: November 21, 2018 |
/s/ Christopher R. Reidy |
Christopher R. Reidy |
Chief Financial Officer |
Document and Entity Information - USD ($) |
12 Months Ended | ||
---|---|---|---|
Sep. 30, 2018 |
Oct. 31, 2018 |
Mar. 31, 2018 |
|
Document And Entity Information [Abstract] | |||
Entity registrant name | BECTON DICKINSON & CO | ||
Entity central index key | 0000010795 | ||
Current fiscal year end date | --09-30 | ||
Entity filer category | Large Accelerated Filer | ||
Document type | 10-K | ||
Document period end date | Sep. 30, 2018 | ||
Document fiscal year focus | 2018 | ||
Document fiscal period focus | FY | ||
Amendment flag | false | ||
Entity small business | false | ||
Entity emerging growth company | false | ||
Entity common stock, shares outstanding (shares) | 268,257,940 | ||
Entity well-known seasoned issuer | Yes | ||
Entity voluntary filers | No | ||
Entity current reporting status | Yes | ||
Entity shell company | false | ||
Entity public float | $ 56,903,426,170 |
Consolidated Statements of Income - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Income Statement [Abstract] | |||
Revenues | $ 15,983 | $ 12,093 | $ 12,483 |
Cost of products sold | 8,721 | 6,151 | 6,492 |
Selling and administrative expense | 4,015 | 2,925 | 3,005 |
Research and development expense | 1,006 | 774 | 828 |
Acquisitions and other restructurings | 744 | 354 | 728 |
Other operating expense, net | 0 | 410 | 0 |
Total Operating Costs and Expenses | 14,487 | 10,615 | 11,053 |
Operating Income | 1,497 | 1,478 | 1,430 |
Interest expense | (706) | (521) | (388) |
Interest income | 65 | 76 | 21 |
Other income (expense), net | 318 | (57) | 11 |
Income Before Income Taxes | 1,173 | 976 | 1,074 |
Income tax provision (benefit) | 862 | (124) | 97 |
Net Income | 311 | 1,100 | 976 |
Preferred stock dividends | (152) | (70) | 0 |
Net income applicable to common shareholders | $ 159 | $ 1,030 | $ 976 |
Basic Earnings per Share | |||
Basic Earnings per Share (USD per share) | $ 0.62 | $ 4.70 | $ 4.59 |
Diluted Earnings per Share | |||
Diluted Earnings per Share (USD per share) | $ 0.60 | $ 4.60 | $ 4.49 |
Consolidated Statements of Comprehensive Income - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Statement of Comprehensive Income [Abstract] | |||
Net Income | $ 311 | $ 1,100 | $ 976 |
Other Comprehensive (Loss) Income, Net of Tax | |||
Foreign currency translation adjustments | (161) | 11 | (50) |
Defined benefit pension and postretirement plans | (26) | 179 | (141) |
Cash flow hedges | 1 | 17 | 1 |
Other Comprehensive (Loss) Income, Net of Tax | (186) | 206 | (191) |
Comprehensive Income | $ 125 | $ 1,306 | $ 786 |
Consolidated Balance Sheets (Parenthetical) - $ / shares |
Sep. 30, 2018 |
Sep. 30, 2017 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Common stock, par value (USD per share) | $ 1 | $ 1 |
Common stock, shares authorized (shares) | 640,000,000 | 640,000,000 |
Common stock, shares issued (shares) | 346,687,160 | 346,687,160 |
Common stock in treasury, shares (shares) | 78,462,971 | 118,744,758 |
Summary of Significant Accounting Policies |
12 Months Ended |
---|---|
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation The accompanying Consolidated Financial Statements and Notes to Consolidated Financial Statements of Becton, Dickinson and Company (the “Company”) have been prepared in accordance with U.S. generally accepted accounting principles. Within the financial statements and tables presented, certain columns and rows may not add due to the use of rounded numbers for disclosure purposes. Percentages and earnings per share amounts presented are calculated from the underlying amounts. Our fiscal year ends on September 30. Principles of Consolidation The consolidated financial statements include the Company’s accounts and those of its majority-owned subsidiaries after the elimination of intercompany transactions. The Company has no material interests in variable interest entities. Cash Equivalents Cash equivalents consist of all highly liquid investments with a maturity of three months or less at time of purchase. Restricted Cash Restricted cash consists of cash restricted from withdrawal and usage and largely represents funds that are restricted for certain product liability matters assumed in the acquisition of C.R. Bard, Inc. ("Bard") which is further discussed in Note 9. Short-Term Investments Short-term investments consist of time deposits with maturities greater than three months and less than one year when purchased. Trade Receivables The Company grants credit to customers in the normal course of business and the resulting trade receivables are stated at their net realizable value. The allowance for doubtful accounts represents the Company’s estimate of probable credit losses relating to trade receivables and is determined based on historical experience and other specific account data. Amounts are written off against the allowances for doubtful accounts when the Company determines that a customer account is uncollectible. Inventories Inventories are stated at the lower of first-in, first-out cost or market. Property, Plant and Equipment Property, plant and equipment are stated at cost, less accumulated depreciation and amortization. Depreciation and amortization are principally provided on the straight-line basis over estimated useful lives, which range from 20 to 45 years for buildings, four to 13 years for machinery and equipment and one to 20 years for leasehold improvements. Depreciation and amortization expense was $600 million, $406 million and $452 million in fiscal years 2018, 2017 and 2016, respectively. Goodwill and Other Intangible Assets The Company’s unamortized intangible assets include goodwill and in-process research and development assets which arise from acquisitions. The Company currently reviews all indefinite-lived assets, including goodwill, for impairment generally using quantitative models. Goodwill is reviewed at least annually for impairment at the reporting unit level, which is defined as an operating segment or one level below an operating segment, referred to as a component. The Company’s reporting units generally represent one level below reporting segments. Potential impairment of goodwill is generally identified by comparing the fair value of a reporting unit, estimated using an income approach, with its carrying value. The annual impairment review performed on July 1, 2018 indicated that all identified reporting units’ fair values exceeded their respective carrying values. The review for impairment of in-process research and development assets is performed by comparing the fair value of the technology or project assets, estimated using an income approach, with their carrying value. In-process research and development assets are considered indefinite-lived assets and are reviewed at least annually for impairment until projects are completed or abandoned. Amortized intangible assets include developed technology assets which arise from acquisitions. These assets represent acquired intellectual property that is already technologically feasible upon the acquisition date or acquired in-process research and development assets that are completed subsequent to acquisition. Developed technology assets are generally amortized over periods ranging from 15 to 20 years, using the straight-line method. Customer relationship assets are generally amortized over periods ranging from 10 to 15 years, using the straight-line method. Other intangibles with finite useful lives, which include patents, are amortized over periods principally ranging from one to 40 years, using the straight-line method. Finite-lived intangible assets, including developed technology assets, are periodically reviewed when impairment indicators are present to assess recoverability from future operations using undiscounted cash flows. The carrying values of these finite-lived assets are compared to the undiscounted cash flows they are expected to generate and an impairment loss is recognized in operating results to the extent any finite-lived intangible asset’s carrying value exceeds its calculated fair value. Foreign Currency Translation Generally, foreign subsidiaries’ functional currency is the local currency of operations and the net assets of foreign operations are translated into U.S. dollars using current exchange rates. The U.S. dollar results that arise from such translation, as well as exchange gains and losses on intercompany balances of a long-term investment nature, are included in the foreign currency translation adjustments in Accumulated other comprehensive income (loss). Revenue Recognition Revenue from product sales is typically recognized when all of the following criteria have been met: persuasive evidence of an arrangement exists; delivery has occurred or services have been rendered; product price is fixed or determinable; collection of the resulting receivable is reasonably assured. Certain sales arrangements contain multiple deliverables, including equipment and service deliverables, which requires the Company to determine the separate units of account. If the deliverable meets the criteria of a separate unit of accounting, the arrangement consideration is allocated to each element based upon its relative selling price. In determining the best evidence of selling price of a unit of account the Company utilizes vendor-specific objective evidence (“VSOE”), which is the price the Company charges when the deliverable is sold separately. When VSOE is not available, management uses relevant third-party evidence (“TPE”) of selling price, if available. When neither VSOE nor TPE of selling price exists, management uses its best estimate of selling price. Revenue allocated to certain equipment deliverables is recognized upon customer acceptance, which occurs after the transfer of title and risk of loss to the customer and the completion of installation or training services. When related services are considered inconsequential, delivery is deemed to occur upon the transfer of title and risk of loss, at which time revenue and the costs associated with services are recognized. For equipment lease revenue, transactions are evaluated and classified as either operating leases or sales-type leases. Generally, the Company's lease arrangements with customers are accounted for as operating leases and therefore, revenue is recognized at the contracted rate over the rental period, as defined within the customer agreement. For products sold and leased with embedded software, if software is considered not essential to the non-software elements of a product but is considered more than incidental to a product as a whole, the product’s software elements must be separated from its non-software elements under the requirements relating to multiple-element arrangements and accounted for under software industry-specific revenue recognition requirements. However, if it is determined that the embedded software is more than incidental to the product as a whole but the non-software elements and software elements work together to deliver the essential functionality of the products as a whole, then the accounting for such product does not fall within the scope of software industry-specific accounting requirements. The Company’s domestic businesses sell products primarily to distributors that resell the products to end-user customers. Rebates are provided to distributors that sell to end-user customers at prices determined under a contract between the Company and the end-user customer. Provisions for rebates, as well as sales discounts and returns, are based upon estimates and are accounted for as a reduction of revenues when revenue is recognized. Shipping and Handling Costs Shipping and handling costs are included in Selling and administrative expense. Shipping expense was $479 million, $365 million and $401 million in 2018, 2017 and 2016, respectively. Derivative Financial Instruments All derivatives are recorded in the balance sheet at fair value and changes in fair value are recognized currently in earnings unless specific hedge accounting criteria are met. Any deferred gains or losses associated with derivative instruments are recognized in income in the period in which the underlying hedged transaction is recognized. Additional disclosures regarding the Company's accounting for derivative instruments are provided in Note 13. Income Taxes The Company has historically asserted indefinite reinvestment of the earnings of certain non-U.S. subsidiaries outside the United States. New U.S. tax legislation, which is further discussed in Note 16, eliminated certain material tax effects on the repatriation of cash to the United States. Future repatriation of cash and other property held by the Company's foreign subsidiaries will generally not be subject to U.S. federal income tax. As a result, after reevaluation of the permanent reinvestment assertion, the Company is no longer permanently reinvested with respect to its historic unremitted foreign earnings as of September 30, 2018. The Company conducts business and files tax returns in numerous countries and currently has tax audits in progress in a number of tax jurisdictions. In evaluating the exposure associated with various tax filing positions, the Company records accruals for uncertain tax positions, based on the technical support for the positions, past audit experience with similar situations, and the potential interest and penalties related to the matters. The Company maintains valuation allowances where it is more likely than not that all or a portion of a deferred tax asset will not be realized. Changes in valuation allowances are included in the tax provision in the period of change. In determining whether a valuation allowance is warranted, management evaluates factors such as prior earnings history, expected future earnings, carryback and carryforward periods and tax strategies that could potentially enhance the likelihood of the realization of a deferred tax asset. Additional disclosures regarding the Company's accounting for income taxes are provided in Note 16. Earnings per Share Basic earnings per share are computed by dividing income available to common stockholders by the weighted average number of common shares outstanding. Diluted earnings per share reflect the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. In computing diluted earnings per share, only potential common shares that are dilutive (i.e., those that reduce earnings per share or increase loss per share) are included in the calculation. Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions. These estimates or assumptions affect reported assets, liabilities, revenues and expenses as reflected in the consolidated financial statements. Actual results could differ from these estimates. |
Accounting Changes |
12 Months Ended |
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Sep. 30, 2018 | |
Accounting Changes and Error Corrections [Abstract] | |
Accounting Changes | Accounting Changes New Accounting Principle Adopted In the second quarter of its fiscal year 2018, the Company prospectively adopted an accounting standard update issued by the Financial Accounting Standards Board ("FASB") relating to the stranded income tax effects on items within Accumulated other comprehensive income (loss) resulting from the enactment of new U.S. tax legislation, which legislation is further discussed in Note 16. Additional disclosures regarding this accounting standard adoption are provided in Note 3. On October 1, 2016, the Company prospectively adopted amended requirements issued by the FASB relating to the timing of recognition and classification of share-based compensation award-related income tax effects. Upon adoption of the requirements in 2017, the Company has recorded tax benefits relating to share-based compensation awards within Income tax (benefit) provision on its consolidated statement of income. These tax benefits had been previously recorded within Capital in excess of par value on the Company's consolidated balance sheet. Also upon adoption of the amended guidance in 2017, the Company has classified excess tax benefits on its consolidated statement of cash flows within Net Cash Provided by Operating Activities, rather than Net Cash Provided by (Used for) Financing Activities. New Accounting Principles Not Yet Adopted In March 2017, the FASB issued an accounting standard update which requires all components of net periodic pension and postretirement benefit costs to be disaggregated from the service cost component and to be presented on the income statement outside a subtotal of income from operations, if one is presented. The Company's adoption of the new requirements on October 1, 2018 is not expected to have a material impact on its consolidated financial statements. In February 2016, the FASB issued a new lease accounting standard which requires lessees to recognize lease assets and lease liabilities on the balance sheet. The new standard also requires expanded disclosures regarding leasing arrangements. The Company will adopt the standard on October 1, 2019 and has commenced its initial assessment of the impact on its consolidated financial statements. In May 2014, the FASB issued a new revenue recognition standard. Under this standard, revenue is recognized upon the transfer of goods or services to customers and the amount of revenue recognized reflects the consideration to which a reporting entity expects to be entitled in exchange for those goods or services. The Company adopted the standard on October 1, 2018 using the modified retrospective method. The Company assessed the impact that this new revenue recognition standard will have on its consolidated financial statements based upon a review of contracts that were not completed as of October 1, 2018. The Company is currently finalizing the changes to its processes, systems and controls which are necessary to support recognition and disclosure under the new revenue recognition standard. The Company does not expect its adoption of the new standard to have a material impact on its consolidated financial statements. |
Shareholders' Equity |
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Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shareholders' Equity | Shareholders’ Equity Changes in certain components of shareholders’ equity were as follows:
The components and changes of Accumulated other comprehensive income (loss) were as follows:
The amount of foreign currency translation recognized in other comprehensive income during the years ended September 30, 2018 and 2017 included net gains (losses) relating to net investment hedges, as further discussed in Note 13. The amount recognized in other comprehensive income during the year ended September 30, 2017 relating to cash flow hedges represented a net gain on forward starting interest rate swaps, which is further discussed in Note 13. During the second quarter of 2018, as permitted under U.S. GAAP guidance, the Company reclassified stranded income tax effects on items within Accumulated other comprehensive income (loss) resulting from the enactment of new U.S. tax legislation, which legislation is further discussed in Note 16, to Retained earnings. The reclassified tax effects related to prior service credits and net actuarial losses relating to benefit plans, as well as to terminated cash flow hedges. The tax effects relating to these items are generally recognized as such amounts are amortized into earnings. The tax impacts for amounts recognized in other comprehensive income before reclassifications were as follows:
The tax impacts for cash flow hedges recognized in other comprehensive income before reclassifications in 2017 and 2016 were immaterial to the Company's consolidated financial results. Reclassifications out of Accumulated other comprehensive income (loss) and the related tax impacts relating to benefit plans and cash flow hedges in 2018, 2017 and 2016 were also immaterial to the Company's consolidated financial results |
Earnings per Share |
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Earnings per Share | Earnings per Share The weighted average common shares used in the computations of basic and diluted earnings per share (shares in thousands) for the years ended September 30 were as follows:
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Commitments and Contingencies |
12 Months Ended |
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Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Commitments Rental expense for all operating leases amounted to $149 million in 2018, $110 million in 2017 and $112 million in 2016. Future minimum rental commitments on non-cancelable leases are as follows: 2019 — $107 million; 2020 — $94 million; 2021 — $76 million; 2022 — $62 million; 2023 — $48 million and an aggregate of $124 million thereafter. As of September 30, 2018, the Company has certain future purchase commitments aggregating to approximately $1.046 billion, which will be expended over the next several years. Contingencies Given the uncertain nature of litigation generally, the Company is not able, in all cases, to estimate the amount or range of loss that could result from an unfavorable outcome of the litigation to which the Company is a party. In accordance with U.S. generally accepted accounting principles, the Company establishes accruals to the extent probable future losses are estimable (in the case of environmental matters, without considering possible third-party recoveries). With respect to putative class action lawsuits in the United States and certain of the Canadian lawsuits described below relating to product liability matters, the Company is unable to 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 the class. With respect to the investigative subpoena issued by the Department of Defense Inspector General and the Department of Health and Human Services and the civil investigative demand served by the Department of Justice, as discussed below, the Company is unable to estimate a range of reasonably possible losses for the following reasons: (i) all or certain of the proceedings are in early stages; and/or (ii) there are significant factual and legal issues to be resolved. In view of the uncertainties discussed below, the Company could incur charges in excess of any currently established accruals and, to the extent available, liability insurance. In the opinion of management, any such future charges, individually or in the aggregate, could have a material adverse effect on the Company’s consolidated results of operations and consolidated cash flows. Product Liability Matters As is further discussed in Note 9, the Company completed its acquisition of Bard on December 29, 2017 and the following matters include Bard-related legal proceedings and claims that the Company assumed on the acquisition date (“Bard-related Product Liability Matters”). The Company believes that certain settlements and judgments, as well as some legal defense costs, relating to product liability matters are or may be covered in whole or in part under its product liability insurance policies with a limited number of insurance carriers, or, in some circumstances, indemnification obligations to the Company from other parties, which if disputed, the Company intends to vigorously contest. Amounts recovered under the Company’s product liability insurance policies or indemnification arrangements may be less than the stated coverage limits or less than otherwise expected and may not be adequate to cover damages and/or costs relating to claims. In addition, there is no guarantee that insurers or other parties will pay claims or that coverage or indemnity will be otherwise available. Hernia Product Claims As of September 30, 2018, the Company is defending approximately 3,154 product liability claims involving Bard’s line of hernia repair devices (collectively, the “Hernia Product Claims”). The majority of those claims are currently pending in a coordinated proceeding in Rhode Island State Court, but claims are also pending in other state and/or federal court jurisdictions. In addition, those claims include multiple putative class actions in Canada. Generally, the Hernia Product Claims seek damages for personal injury allegedly resulting from use of the products. From time to time, the Company engages in resolution discussions with plaintiffs’ law firms regarding certain of the Hernia Product Claims, but the Company also intends to vigorously defend Hernia Product Claims that do not settle, including through litigation. Trials are scheduled throughout 2019 in various state and/or federal courts. The Company expects additional trials of Hernia Product Claims to take place over the next 12 months. In August 2018, a new hernia multi-district litigation (“MDL”) was ordered to be established in the Southern District of Ohio. The Company cannot give any assurances that the resolution of the Hernia Product Claims that have not settled, including asserted and unasserted claims and the putative class action lawsuits, will not have a material adverse effect on the Company’s business, results of operations, financial condition and/or liquidity. Women’s Health Product Claims As of September 30, 2018, the Company is defending approximately 1,322 product liability claims involving Bard’s line of pelvic mesh devices. The majority of those claims are currently pending in a federal MDL in the United States District Court for the Southern District of West Virginia, but claims are also pending in other state and/or federal court jurisdictions, including a coordinated proceeding in New Jersey State Court. In addition, those claims include putative class actions filed in the United States. Not included in the figures above are approximately 1,037 filed and unfiled claims that have been asserted or threatened against Bard but lack sufficient information to determine whether a Bard pelvic mesh device is actually at issue. The claims identified above also include products manufactured by both Bard and two subsidiaries of Medtronic plc (as successor in interest to Covidien plc) (“Medtronic”), each a supplier of Bard. Medtronic has an obligation to defend and indemnify Bard with respect to any product defect liability relating to products its subsidiaries had manufactured. As described below, in July 2015 the Company reached an agreement with Medtronic (which was amended in June 2017) regarding certain aspects of Medtronic’s indemnification obligation. The foregoing lawsuits, unfiled claims, putative class actions, and other claims, together with claims that have settled or are the subject of agreements or agreements in principle to settle, are referred to collectively as the “Women’s Health Product Claims.” The Women’s Health Product Claims generally seek damages for personal injury allegedly resulting from use of the products. As of September 30, 2018, the Company has reached agreements or agreements in principle with various plaintiffs’ law firms to settle their respective inventories of cases totaling approximately 15,021 of the Women’s Health Product Claims. The Company believes that these Women’s Health Product Claims are not the subject of Medtronic’s indemnification obligation. These settlement agreements and agreements in principle include unfiled and previously unknown claims held by various plaintiffs’ law firms, which are not included in the approximate number of lawsuits set forth in the first paragraph of this section. Each agreement is subject to certain conditions, including requirements for participation in the proposed settlements by a certain minimum number of plaintiffs. The Company continues to engage in discussions with other plaintiffs’ law firms regarding potential resolution of unsettled Women’s Health Product Claims, which may include additional inventory settlements. Starting in 2014 in the MDL, the court entered certain pre-trial orders requiring trial work up and remand of a significant number of Women’s Health Product Claims, including an order entered in the MDL on January 30, 2018, that requires the work up and remand of all remaining unsettled cases (the “WHP Pre-Trial Orders”). The WHP Pre-Trial Orders may result in material additional costs or trial verdicts in future periods in defending Women’s Health Product Claims. Trials are anticipated in 2018 and throughout 2019 in state courts. A trial in the New Jersey coordinated proceeding began in March 2018, and in April 2018 a jury entered a verdict against the Company in the total amount of $68 million ($33 million compensatory; $35 million punitive). The Company is in the process of challenging that verdict. The Company expects additional trials of Women’s Health Product Claims to take place over the next 12 months. In July 2015, as part of the agreement with Medtronic noted above, Medtronic agreed to take responsibility for pursuing settlement of certain of the Women’s Health Product Claims that relate to products distributed by Bard under supply agreements with Medtronic, and Bard has paid Medtronic $121 million towards these potential settlements. In June 2017, Bard amended the agreement with Medtronic to transfer responsibility for settlement of additional Women’s Health Product Claims to Medtronic on terms similar to the July 2015 agreement, including with respect to the obligation to make payments to Medtronic towards these potential settlements. Bard also may, in its sole discretion, transfer responsibility for settlement of additional Women’s Health Product Claims to Medtronic on similar terms. The agreements do not resolve the dispute between Bard and Medtronic with respect to Women’s Health Product Claims that do not settle, if any. During the course of engaging in settlement discussions with plaintiffs’ law firms, the Company has learned, and may in future periods learn, additional information regarding these and other unfiled claims, or other lawsuits, which could materially impact the Company’s estimate of the number of claims or lawsuits against the Company. Filter Product Claims As of September 30, 2018, the Company is defending approximately 4,515 product liability claims involving Bard’s line of inferior vena cava filters (collectively, the “Filter Product Claims”). The majority of those claims are currently pending in an MDL in the United States District Court for the District of Arizona, but claims are also pending in other state and/or federal court jurisdictions, including a coordinated proceeding in Arizona State Court. In addition, those claims include putative class actions filed in the United States and Canada. The Filter Product Claims generally seek damages for personal injury allegedly resulting from use of the products. The Company has limited information regarding the nature and quantity of certain of the Filter Product Claims. The Company continues to receive claims and lawsuits and may in future periods learn additional information regarding other unfiled or unknown claims, or other lawsuits, which could materially impact the Company’s estimate of the number of claims or lawsuits against the Company. Trials are scheduled throughout 2018 in the MDL and state courts. On March 30, 2018, a jury in the first MDL trial found the Company liable for negligent failure to warn and entered a verdict in favor of plaintiffs. The jury found the Company was not liable for (a) strict liability design defect; (b) strict liability failure to warn; and (c) negligent design. The Company has appealed that verdict. On June 1, 2018, a jury in the second MDL trial unanimously found in favor of the Company on all claims. On August 17, 2018, the Court entered summary judgment in favor of the Company on all claims in the third MDL trial. On October 5, 2018, a jury in the fourth MDL trial unanimously found in favor of the Company on all claims. The Company expects additional trials of Filter Product Claims may take place over the next 12 months. In most product liability litigations (like those described above), plaintiffs allege a wide variety of claims, ranging from allegations of serious injury caused by the products to efforts to obtain compensation notwithstanding the absence of any injury. In many of these cases, the Company has not yet received and reviewed complete information regarding the plaintiffs and their medical conditions and, consequently, is unable to fully evaluate the claims. The Company expects that it will receive and review additional information regarding any remaining unsettled product liability matters. In January 2017, the Company reached an agreement to resolve litigation filed in the Southern District of New York by its insurance carriers in connection with Women’s Health Product Claims and Filter Product Claims. The agreement requires the insurance carriers to reimburse the Company for certain future costs incurred in connection with Filter Product Claims up to an agreed amount. For certain product liability claims or lawsuits, the Company does not maintain or has limited remaining insurance coverage. Other Legal Matters In June 2007, Retractable Technologies, Inc. (“RTI”) filed a complaint against the Company under the caption Retractable Technologies, Inc. vs. Becton Dickinson and Company (Civil Action No. 2:07-cv-250, U.S. District Court, Eastern District of Texas) alleging that the BD Integra™ syringes infringe patents licensed exclusively to RTI. Included in its complaint, RTI also alleged that the Company engaged in false advertising with respect to certain of the Company’s safety-engineered products in violation of the Lanham Act; acted to exclude RTI from various product markets and to maintain its market share through, among other things, exclusionary contracts in violation of state and federal antitrust laws; and engaged in unfair competition. In January 2008, the Court severed the patent and non-patent claims into separate cases. BD paid a $5 million award following an adverse infringement verdict at the district court and the Company's unsuccessful appeal. On September 19, 2013, a jury returned a verdict against BD with respect to RTI’s Lanham Act claim and claim for attempted monopolization based on deception in the safety syringe market. The jury awarded RTI $113.5 million for its attempted monopolization claim (which would be trebled under the antitrust statute). Upon issuance of a Court of Appeals decision reversing the attempted monopolization claim, the Company recorded a $337 million reversal of reserves associated with the initial judgment, in Other operating (income) expense, net, in the first quarter of fiscal year 2017. The Court of Appeals affirmed the judgment for Lanham Act liability, and remanded the case to the district court to consider whether and if so how much profit should be disgorged by BD on that claim. The Court of Appeals also vacated and remanded the injunction ordered by the district court. On January 31, 2017, RTI filed a petition for a writ of certiorari with the U.S. Supreme Court. On March 20, 2017, the U.S. Supreme Court denied certiorari, and the district court thereafter heard RTI’s request for disgorgement. On August 17, 2017, the district court entered judgment in favor of BD and ruled that RTI is not entitled to any award of money damages. RTI has appealed this ruling to the Fifth Circuit Court of Appeals. Oral argument on the appeal occurred on October 3, 2018. Since early 2013, Bard has received subpoenas or Civil Investigative Demands from a number of State Attorneys General seeking information related to the sales and marketing of certain of the Company’s products that are the subject of the Hernia Product Claims and the Women’s Health Product Claims. The Company is cooperating with these requests. Although the Company has had, and continues to have, discussions with the State Attorneys General with respect to overall potential resolution of this matter, there can be no assurance that a resolution will be reached or what the terms of any such resolution may be. In November 2015, the Department of Defense Inspector General issued an investigative subpoena to Bard. The Department of Health and Human Services is also participating in this investigation. The subpoena seeks documents related to the Company’s sales and marketing of certain filter products, drug coated balloon catheters, and peripheral arterial disease detection products. In July 2017, a separate civil investigative demand was served by the Department of Justice seeking documents and information relating to an investigation into possible violations of the False Claims Act in connection with the sales and marketing of FloChec® and QuantaFloTM devices. The Company is cooperating with these requests. Since it is not feasible to predict the outcome of these matters, the Company cannot give any assurances that the resolution of these matters will not have a material adverse effect on the Company’s business, results of operations, financial condition and/or liquidity. The Company is a potentially responsible party to a number of federal administrative proceedings in the United States brought under the Comprehensive Environment Response, Compensation and Liability Act, also known as “Superfund,” and similar state laws. The affected sites are in varying stages of development. In some instances, the remedy has been completed, while in others, environmental studies are underway or commencing. For several sites, there are other potentially responsible parties that may be jointly or severally liable to pay all or part of cleanup costs. While it is not feasible to predict the outcome of these proceedings, based upon the Company’s experience, current information and applicable law, the Company does not expect these proceedings to have a material adverse effect on its financial condition and/or liquidity. However, one or more of the proceedings could be material to the Company’s business and/or results of operations. The Company is also involved both as a plaintiff and a defendant in other legal proceedings and claims that arise in the ordinary course of business. The Company believes that it has meritorious defenses to these suits pending against the Company and is engaged in a vigorous defense of each of these matters. Litigation Reserves Accruals for the Bard product liability claims which are specifically discussed above, as well as the related legal defense costs, amounted to approximately $2.0 billion at September 30, 2018. Such amounts include provisional estimates which have been recorded with respect to the acquired liabilities. These amounts may be adjusted upon the availability of new or additional information regarding facts or circumstances which existed at the acquisition date. As of September 30, 2018, the Company has $94 million in Bard-related qualified settlement funds (“QSFs”), subject to certain settlement conditions, for certain product liability matters. Payments to QSFs are recorded as a component of Restricted cash. The Company's expected recoveries related to Bard-related product liability claims and related legal defense costs were approximately $343 million at September 30, 2018. A substantial amount of these expected recoveries at September 30, 2018 relate to the Company’s agreements with Medtronic related to certain Women’s Health Product Claims. The terms of the Company’s agreements with Medtronic are substantially consistent with the assumptions underlying, and the manner in which, the Company has recorded expected recoveries related to the indemnification obligation. The expected recoveries at September 30, 2018 related to the indemnification obligation are not in dispute with respect to claims that Medtronic settles pursuant to the agreements. As described above, the agreements do not resolve the dispute between the Company and Medtronic with respect to Women’s Health Product Claims that do not settle, if any, and the Company also may, in its sole discretion, transfer responsibility for settlement of additional Women’s Health Product Claims to Medtronic on similar terms. |
Segment Data |
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Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Data | Segment Data Beginning in the second quarter of fiscal year 2018, the Company’s organizational structure was based upon three principal business segments: BD Medical (“Medical”), BD Life Sciences (“Life Sciences”) and BD Interventional ("Interventional"). As is further discussed in Note 9, the Company completed its acquisition of Bard on December 29, 2017. Beginning in the second quarter of fiscal year 2018, the Interventional segment included the majority of Bard’s product offerings and certain product offerings, as further detailed below, which were previously reported in the Medical segment. Certain of Bard's product offerings were included under the Company's Medical segment, specifically within the new Medication Delivery Solutions unit, which was formerly the Medical segment's Medication and Procedural Solutions unit. The Company’s three principal business segments are strategic businesses that are managed separately because each one develops, manufactures and markets distinct products and services. BD Medical BD Medical 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 BD Medical are hospitals and clinics; physicians’ office practices; consumers and retail pharmacies; governmental and nonprofit public health agencies; pharmaceutical companies; and healthcare workers. BD Medical consists of the following organizational units:
BD Life Sciences BD Life 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 (“HAIs”) and cancers. In addition, BD 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 BD Life Sciences are hospitals, laboratories and clinics; blood banks; healthcare workers; public health agencies; physicians’ office practices; academic and government institutions; and pharmaceutical and biotechnology companies. BD Life Sciences consists of the following organizational units:
BD Interventional BD Interventional provides vascular, urology, oncology and surgical specialty products that are, with the exception of the V. Muller surgical and laparoscopic instrumentation products, intended to be used once and then discarded or are either temporarily or permanently implanted. The primary customers served by BD Interventional are hospitals, individual healthcare professionals, extended care facilities, alternate site facilities and directly to patients via the segment's Homecare business. The Interventional segment consists of the following organizational units:
Additional Segment Information Distribution of products is primarily through independent distribution channels, and directly to end-users by BD and independent sales representatives. No customer accounted for 10% or more of revenues in any of the three years presented. Segment disclosures are on a performance basis consistent with internal management reporting. The Company evaluates performance of its business segments and allocates resources to them primarily based upon operating income, which represents revenues reduced by product costs and operating expenses. Segment operating income represents revenues reduced by product costs and operating expenses. Beginning with its first quarter fiscal year 2018, the Company changed its management reporting approach so that certain general and administrative costs, which were previously allocated to the segments, are now excluded from the segments' operating expenses. The Medical and Life Sciences segments' operating income for the year ended September 30, 2017 included allocated general corporate costs of $166 million and $113 million, respectively. The Medical and Life Sciences segments' operating income for the year ended September 30, 2016 included allocated general corporate costs of $175 million and $95 million, respectively. No such allocations were made in the year ended September 30, 2018. As more fully discussed in Note 10, the Company sold a 50.1% controlling financial interest in its Respiratory Solutions business, a component of the Medical segment, in October 2016. This transaction did not meet the criteria established for reporting discontinued operations and as such, results for the year ended September 30, 2016 included $822 million of revenues which did not occur in 2018 and 2017.
(a)The Company has no material intersegment revenues. (b)Prior-year amounts have been reclassified to reflect the movement of certain product offerings previously reported in the Medical segment and which are now reported in the Interventional segment, as further discussed above. Accordingly, all amounts presented in 2017 and 2016 for the Interventional segment are associated with these products. (c)The amounts in 2018 included expense related to the recognition of a $478 million fair value step-up adjustment related to Bard's inventory on the acquisition date. The step-up adjustments recognized by the Medical and Interventional segments in 2018 were $60 million and $418 million, respectively. (d)The amount in 2018 included $58 million of charges to write down the value of fixed assets primarily in the Diabetes Care unit. (e)The amount in 2018 included $81 million of charges recorded to write down the carrying value of certain intangible and other assets in the Biosciences unit. (f)The amounts in 2018, 2017 and 2016 comprised of foreign exchange, corporate expenses, and share-based compensation expense. Results in 2018 were impacted by the Company's change in its management reporting approach, as further discussed above. Results in 2017 included a $748 million non-cash charge resulting from a modification to the Company's dispensing equipment lease contracts with customers, as well as the reversal of certain litigation reserves as further discussed in Note 5. (g)Includes cash and investments and corporate assets. Geographic Information The countries in which the Company has local revenue-generating operations have been combined into the following geographic areas: the United States (including Puerto Rico); Europe; Greater Asia (which includes Japan and Asia Pacific); and Other, which is comprised of Latin America, Canada, and EMA (which includes the Commonwealth of Independent States, Middle East and Africa). Revenues to unaffiliated customers are generally based upon the source of the product shipment. Long-lived assets, which include net property, plant and equipment, are based upon physical location.
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Share-Based Compensation |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Compensation | Share-Based Compensation The 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. The amounts and location of compensation cost relating to share-based payments included in the consolidated statements of income is as follows:
Upon the Company's acquisition of Bard in 2018, certain pre-acquisition equity awards of Bard were converted into either BD SARs or BD restricted stock awards, as applicable. These awards have substantially the same terms and conditions as the converted Bard awards immediately prior to the acquisition date. The compensation expense of $126 million associated with these replacement awards was recorded in Acquisitions and other restructurings. Stock Appreciation Rights SARs 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 vest over a four-year period and have a ten-year term. The fair value was estimated on the date of grant using a lattice-based binomial option valuation model that uses the following weighted-average assumptions:
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 1.4 million shares during 2018 to satisfy the SARs exercised. A summary of SARs outstanding as of September 30, 2018 and changes during the year then ended is as follows:
A summary of SARs exercised 2018, 2017 and 2016 is as follows:
Stock Options The Company has not granted stock options since 2005. Certain pre-acquisition equity awards of CareFusion were converted on March 17, 2015 into BD stock options with accelerated vesting terms and there were 166 thousand of these awards outstanding at September 30, 2018. Amounts recognized or realized in 2018, 2017 and 2016 relative to stock option exercises, including cash received, the tax benefit realized and the total intrinsic value, were immaterial to the Company’s consolidated financial results. Performance-Based and Time-Vested Restricted Stock Units Performance-based restricted stock units cliff vest three years after the date of grant. These units are tied to the Company’s performance against pre-established targets over a three-year performance period. The performance measures for fiscal years 2018, 2017 and 2016 were relative total shareholder return (measures the Company’s stock performance during the performance period against that of peer companies) and average annual return on invested capital. Under the Company’s long-term incentive program, the actual payout under these awards may vary from zero to 200% of an employee’s target payout, based on the Company’s actual performance over the three-year performance period. The fair value is based on the market price of the Company’s stock on the date of grant. Compensation cost initially recognized assumes that the target payout level will be achieved and is adjusted for subsequent changes in the expected outcome of performance-related conditions. For units for which the performance conditions are modified after the date of grant, any incremental increase in the fair value of the modified units, over the original units, is recorded as compensation expense on the date of the modification for vested units, or over the remaining performance period for units not yet vested. Time-vested restricted stock unit awards granted after January 2015 vest on a graded basis over a three-year period. Time-vested restricted stock units granted before January 2015 cliff vest three years after the date of grant, except for certain key executives of the Company, including the executive officers, for which such units generally vest one year following the employee’s retirement. The related share-based compensation expense is recorded over the requisite service period, which is the vesting period or is based on retirement eligibility. The fair value of all time-vested restricted stock units is based on the market value of the Company’s stock on the date of grant. A summary of restricted stock units outstanding as of September 30, 2018 and changes during the year then ended is as follows:
The weighted average grant date fair value of restricted stock units granted during the years 2018, 2017 and 2016 are as follows:
The total fair value of stock units vested during 2018, 2017 and 2016 was as follows:
At September 30, 2018, the weighted average remaining vesting term of performance-based and time vested restricted stock units is 0.79 and 1.05 year, respectively. Unrecognized Compensation Expense and Other Stock Plans The amount of unrecognized compensation expense for all non-vested share-based awards as of September 30, 2018, is approximately $307 million, which is expected to be recognized over a weighted-average remaining life of approximately 2.04 years. At September 30, 2018, 7.1 million shares were authorized for future grants under the 2004 Plan. The Company has a policy of satisfying share-based payments through either open market purchases or shares held in treasury. At September 30, 2018, the Company has sufficient shares held in treasury to satisfy these payments. As of September 30, 2018, 135 thousand shares were held in trust relative to a Director's Deferral plan, which provides a means to defer director compensation, from time to time, on a deferred stock or cash basis. Also as of September 30, 2018, 338 thousand shares were issuable under a Deferred Compensation Plan that allows certain highly-compensated employees, including executive officers, to defer salary, annual incentive awards and certain equity-based compensation. |
Benefit Plans |
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Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Benefit Plans | Benefit Plans The Company has defined benefit pension plans covering certain employees in the United States and certain international locations. Postretirement healthcare and life insurance benefits provided to qualifying domestic retirees as well as other postretirement benefit plans in international countries are not material. The measurement date used for the Company’s employee benefit plans is September 30. Effective January 1, 2018, the legacy U.S. pension plan was frozen to limit the participation of employees who are hired or re-hired by the Company, or who transfer employment to the Company, on or after January 1, 2018. Net pension cost for the years ended September 30 included the following components:
The amounts provided above for amortization of prior service credit and amortization of loss represent the reclassifications of prior service credits and net actuarial losses that were recognized in Accumulated other comprehensive income (loss) in prior periods. The settlement losses recorded in 2018 and 2016 primarily included lump sum benefit payments associated with the Company’s U.S. supplemental pension plan. The Company recognizes pension settlements when payments from the supplemental plan exceed the sum of service and interest cost components of net periodic pension cost associated with this plan for the fiscal year. The change in benefit obligation, change in fair value of pension plan assets, funded status and amounts recognized in the Consolidated Balance Sheets for these plans were as follows:
International pension plan assets at fair value included in the preceding table were $821 million and $678 million at September 30, 2018 and 2017, respectively. The international pension plan projected benefit obligations were $1.064 billion and $917 million at September 30, 2018 and 2017, respectively. The benefit obligation associated with postretirement healthcare and life insurance plans provided to qualifying domestic retirees, which was largely recorded to Long-Term Employee Benefit Obligations, was $148 million and $165 million at September 30, 2018 and 2017, respectively. Pension plans with accumulated benefit obligations in excess of plan assets and plans with projected benefit obligations in excess of plan assets consist of the following at September 30:
The estimated net actuarial loss and prior service credit for pension benefits that will be amortized from Accumulated other comprehensive income (loss) into net pension costs over the next fiscal year are expected to be $79 million and $14 million, respectively. The net actuarial loss for other postretirement benefits that will be amortized from Accumulated other comprehensive income (loss) into net other postretirement costs over the next fiscal year is immaterial. The estimated prior service credit that will be amortized from Accumulated other comprehensive income (loss) into net other postretirement costs over the next fiscal year is expected to be $5 million. The weighted average assumptions used in determining pension plan information were as follows:
Expected Rate of Return on Plan Assets The expected rate of return on plan assets is based upon expectations of long-term average rates of return to be achieved by the underlying investment portfolios. In establishing this assumption, the Company considers many factors, including historical assumptions compared with actual results; benchmark data; expected returns on various plan asset classes, as well as current and expected asset allocations. Expected Funding The Company’s funding policy for its defined benefit pension plans is to contribute amounts sufficient to meet legal funding requirements, plus any additional amounts that may be appropriate considering the funded status of the plans, tax consequences, the cash flow generated by the Company and other factors. The Company made discretionary contributions of $287 million to its U.S. pension plans in 2018. The Company also made a discretionary contribution of $200 million to its BD U.S. pension in October 2018. The Company does not anticipate any significant required contributions to its pension plans in 2019. Expected benefit payments are as follows:
Investments The Company’s primary objective is to achieve returns sufficient to meet future benefit obligations. It seeks to generate above market returns by investing in more volatile asset classes such as equities while at the same time controlling risk through diversification in non-correlated asset classes and through allocations to more stable asset classes like fixed income. U.S. Plans The Company’s U.S. pension plans comprise 69% of total benefit plan investments, based on September 30, 2018 market values and have a target asset mix of 40% fixed income, 28% diversifying investments and 32% equities. This mix was established based on an analysis of projected benefit payments and estimates of long-term returns, volatilities and correlations for various asset classes. The asset allocations to diversifying investments include high-yield bonds, hedge funds, real estate, infrastructure, commodities, leveraged loans and emerging markets bonds. The actual portfolio investment mix may, from time to time, deviate from the established target mix due to various factors such as normal market fluctuations, the reliance on estimates in connection with the determination of allocations and normal portfolio activity such as additions and withdrawals. Rebalancing of the asset portfolio on a quarterly basis is required to address any allocations that deviate from the established target allocations in excess of defined allowable ranges. The target allocations are subject to periodic review, including a review of the asset portfolio’s performance, by the named fiduciary of the plans. Any tactical deviations from the established asset mix require the approval of the named fiduciary. The U.S. plans may enter into both exchange traded and non-exchange traded derivative transactions in order to manage interest rate exposure, volatility, term structure of interest rates, and sector and currency exposures within the fixed income portfolios. The Company has established minimum credit quality standards for counterparties in such transactions. The following table provides the fair value measurements of U.S. plan assets, as well as the measurement techniques and inputs utilized to measure fair value of these assets, at September 30, 2018 and 2017. The categorization of fund investments is based upon the categorization of these funds’ underlying assets.
Fixed Income Securities U.S. pension plan assets categorized above as fixed income securities include fund investments comprised of mortgage-backed, corporate, government and agency and asset-backed instruments. Mortgage-backed securities consist of residential mortgage pass-through certificates. Investments in corporate bonds are diversified across industry and sector and consist of investment-grade, as well as high-yield debt instruments. U.S. government investments consist of obligations of the U.S. Treasury, other U.S. government agencies, state governments and local municipalities. Assets categorized as foreign government and agency debt securities included investments in developed and emerging markets. The values of fixed income investments classified within Level 1 are based on the closing price reported on the major market on which the investments are traded. A portion of the fixed income instruments classified within Level 2 are valued based upon estimated prices from independent vendors’ pricing models and these prices are derived from market observable sources including: benchmark yields, reported trades, broker/dealer quotes, issuer spreads, benchmark securities, bids, offers and other market-related data. Equity Securities U.S. pension plan assets categorized as equity securities consist of fund investments in publicly-traded U.S. and non-U.S. equity securities. In order to achieve appropriate diversification, these portfolios are invested across market sectors, investment styles, capitalization weights and geographic regions. The values of equity securities classified within Level 1 are based on the closing price reported on the major market on which the investments are traded. Cash and Cash Equivalents A portion of the U.S. plans’ assets consists of investments in cash and cash equivalents, primarily to accommodate liquidity requirements relating to trade settlement and benefit payment activity, and the values of these assets are based upon quoted market prices. Other Securities Other U.S. pension plan assets include fund investments comprised of underlying assets of real estate, infrastructure, commodities and hedge funds. The values of such instruments classified within Level 1 are based on the closing price reported on the major market on which the investments are traded. International Plans International plan assets comprise 31% of the Company’s total benefit plan assets, based on market value at September 30, 2018. Such plans have local independent fiduciary committees, with responsibility for development and oversight of investment policy, including asset allocation decisions. In making such decisions, consideration is given to local regulations, investment practices and funding rules. The following table provides the fair value measurements of international plan assets, as well as the measurement techniques and inputs utilized to measure fair value of these assets, at September 30, 2018 and 2017.
Fixed Income Securities Fixed income investments held by international pension plans include corporate, U.S. government and non-U.S. government securities. The values of fixed income securities classified within Level 1 are based on the closing price reported on the major market on which the investments are traded. Values of investments classified within Level 2 are based upon estimated prices from independent vendors’ pricing models and these prices are derived from market observable sources. Equity Securities Equity securities included in the international plan assets consist of publicly-traded U.S. and non-U.S. equity securities. The values of equity securities classified within Level 1 are based on the closing price reported on the major market on which the investments are traded. Other Securities The international plans hold a portion of assets in cash and cash equivalents, in order to accommodate liquidity requirements and the values are based upon quoted market prices. Real estate investments consist of investments in funds holding an interest in real properties and the corresponding values represent the estimated fair value based on the fair value of the underlying investment value or cost, adjusted for any accumulated earnings or losses. The values of insurance contracts approximately represent cash surrender value. Other investments include fund investments for which values are based upon either quoted market prices or market observable sources. The following table summarizes the changes, for the years ended September 30, 2018 and 2017, in the fair value of international pension assets measured using Level 3 inputs:
Defined Contribution Plans The Company has voluntary defined contribution plans covering eligible employees in the United States which provide for a Company match as well as a Company contribution for Bard associates and for associates hired or rehired after December 31, 2017. The cost of these plans was $89 million in 2018, $67 million in 2017 and $61 million in 2016. The 2018 increase in the cost associated with these plans is attributable to the Company's acquisition of Bard. |
Acquisitions |
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Acquisitions | Acquisitions Bard On December 29, 2017, the Company completed its acquisition of Bard, to create a medical technology company which is uniquely positioned to improve both the treatment of disease for patients and the process of care for health care providers. Under the terms of the transaction, Bard common shareholders received approximately $222.93 in cash and 0.5077 shares of BD stock per Bard share. The Company financed the cash portion of total consideration transferred with available cash, which included net proceeds raised in the third quarter of fiscal year 2017 through registered public offerings of equity securities and debt transactions of approximately $4.8 billion and $9.6 billion, respectively. The operating activities of Bard from the acquisition date through December 31, 2017 were not material to the Company’s consolidated results of operations. As such, Bard's operating results were included in the Company’s consolidated results of operations beginning on January 1, 2018. The acquisition-date fair value of consideration transferred consisted of the components below. The fair value of the shares and equity awards issued as consideration was recognized as a $6.5 billion increase to Capital in excess of par value and a $2.1 billion decrease to Common stock in treasury.
The acquisition-date fair value of the Company’s ordinary shares issued to Bard shareholders was calculated per the following (shares in millions):
Allocation of Consideration Transferred to Net Assets Acquired As discussed in Note 6, the majority of Bard's product offerings are reported, beginning with the second quarter of fiscal year 2018, under the Interventional segment and Bard's remaining product offerings are reported under the Company's Medical segment. The acquisition was accounted for under the acquisition method of accounting for business combinations. The Company is in the process of finalizing the allocation of the purchase price to the individual assets acquired and liabilities assumed. The preliminary allocations of the purchase price below provide a reasonable basis for estimating the fair values of assets acquired and liabilities assumed. These provisional estimates will be adjusted upon the availability of further information regarding events or circumstances which existed at the acquisition date and such adjustments may be significant. The assets acquired and liabilities assumed in this acquisition, as recorded in the Company's consolidated balance sheet at September 30, 2018, were largely allocated to the Company's new Interventional segment.
Identifiable Intangible Assets Acquired The developed technology assets acquired represented Bard’s developed technologies in the fields of vascular, urology, oncology, and surgical specialties. The technologies’ fair values were determined based on the present value of projected cash flows utilizing an income approach with a risk-adjusted discount rate of 8%. The technologies will be amortized over an estimated weighted-average amortization period of 14 years, which is the weighted average period over which the technologies are expected to generate substantial cash flows. The customer relationships assets acquired represented Bard’s relationships with its customers. The fair value of these customer relationships was determined based on the present value of projected cash flows utilizing an income approach with a risk-adjusted discount rate of 8%. The estimated weighted-average amortization period of the customer relationships was determined to be 13 years and this period corresponds with the weighted average of lives determined for the product technology which underlies the customer contracts. Goodwill Goodwill typically results through expected synergies from combining operations of the acquiree and the acquirer, as well as from intangible assets that do not qualify for separate recognition. The goodwill recognized as a result of this acquisition includes, among other things, the value of combining the Company's leadership in medication management and infection prevention with an expanded offering of solutions across the care continuum. Additionally, Bard's strong product portfolio and innovation pipeline are expected to increase the Company's opportunities in fast-growing clinical areas. Revenue synergies are also expected to result from enhanced growth opportunities for the combined company in non-U.S. markets. No portion of goodwill from this acquisition was deductible for tax purposes. Amounts Related to Bard's Legal Proceedings and Claims Accruals for Bard-related product liability and other legal matters represented approximately $2.0 billion of the liabilities assumed. Cash and equivalents include a restricted cash balance acquired which largely represents funds that are restricted for certain product liability matters assumed. Additional disclosures regarding Bard's legal proceedings and claims are provided in Note 5. The Tax Cuts and Job Act Transition Tax The net assets acquired included approximately $175 million of transition tax payable based on the Company’s best estimate of its transition tax liability under new U.S. tax legislation which is further discussed in Note 16. Transaction Costs Transaction costs related to this acquisition incurred during the years ended September 30, 2018 and 2017 were approximately $56 million and $25 million, respectively. These transaction costs were recorded as Acquisitions and other restructurings and consisted of legal, advisory and other costs. See Note 11 for discussion regarding restructuring costs incurred relative to the Bard acquisition in 2018. Unaudited Pro Forma Information As noted above, Bard's operating activities from the acquisition date through December 31, 2017 were not material and the Company included Bard in its consolidated results of operations beginning on January 1, 2018. Revenues in 2018 were $3 billion. Net Income in 2018 included loss attributable to Bard of $(107) million. The following table provides the pro forma results for the fiscal years 2018 and 2017 as if Bard had been acquired as of October 1, 2016.
The pro forma results above include the impact of the following adjustments, as necessary: additional amortization and depreciation expense relating to assets acquired; interest and other financing costs relating to the acquisition transaction; and the elimination of one-time or nonrecurring items. The one-time or nonrecurring items eliminated for the year ended September 30, 2018 were primarily comprised of fair value step-up adjustments of $478 million recorded relative to Bard's inventory on the acquisition date, the transaction costs discussed above, as well as certain Bard-related restructuring costs disclosed in Note 11. In addition, amounts previously reported by Bard as revenues related to a royalty income stream have been reclassified to Other income (expense), net to conform to the Company's reporting classification. The pro forma results do not include any anticipated cost savings or other effects of the planned integration of Bard. Accordingly, the pro forma results above are not necessarily indicative of the results that would have been if the acquisition had occurred on the dates indicated, nor are the pro forma results indicative of results which may occur in the future. Other Transactions During the fourth quarter of fiscal year 2018, the Company acquired TVA Medical, Inc., a company that develops minimally invasive vascular access solutions for patients with chronic kidney disease requiring hemodialysis. This acquisition did not materially impact the Company's consolidated financial results. The Company has completed various other acquisitions during fiscal year 2018 which were not material individually or in the aggregate. Upon the Company's acquisition of CareFusion, it acquired a 40% ownership interest in Caesarea Medical Electronics ("CME"), an Israeli-based global infusion pump systems manufacturer. The Company previously accounted for this interest as an equity investment. On April 3, 2017, the Company acquired the remaining 60% ownership interest in CME. This acquisition did not materially impact the Company's consolidated financial results. |
Divestiture |
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Discontinued Operations and Disposal Groups [Abstract] | |
Divestiture | Divestiture Advanced Bioprocessing The Company completed the sale of its Advanced Bioprocessing business in October 2018 per a definitive agreement that was signed in September 2018. Assets held for sale on the consolidated balance sheet at September 30, 2018, subject to this agreement, were approximately $137 million. Liabilities held for sale under the agreement were immaterial. The Company estimates that its gross cash proceeds received will be approximately $475 million, subject to post-closing adjustments. The historical financial results for the Advanced Bioprocessing business, which included approximately $106 million, $103 million and $95 million of revenues for the years ended September 30, 2018, 2017 and 2016, respectively, have not been classified as a discontinued operation. Respiratory Solutions and Vyaire Medical On October 3, 2016, the Company sold a 50.1% controlling financial interest in its Respiratory Solutions business, a component of the Medical segment, to form a venture, Vyaire Medical. The Company retained a 49.9% non-controlling interest in the new standalone entity. The Company agreed to various contract manufacturing and certain logistical and transition services agreements with the new entity for a period of up to two years after the sale. The Company accounted for its remaining interest in the new entity as an equity method investment and recorded its share of the new entity's earnings or losses on a one-quarter lag to Other income (expense), net. In April 2018, the Company completed the sale of its remaining interest in Vyaire Medical. The Company received gross cash proceeds of approximately $435 million and recognized a pre-tax gain on the sale of approximately $303 million, which was recognized in Other income (expense), net. |
Business Restructuring Charges |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Restructuring Charges | Business Restructuring Charges In connection with the Company's acquisition of Bard, the 2015 acquisition of CareFusion and other portfolio rationalization initiatives, the Company incurred restructuring costs which were recorded as Acquisitions and other restructurings. Additional disclosures regarding these restructuring activities and the related costs are provided in Notes 7, 9 and 10. Restructuring liability activity in 2018, 2017 and 2016 was as follows:
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Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Intangible Assets | Intangible Assets Intangible assets at September 30 consisted of:
Additional disclosures regarding the increases to the developed technology assets and customer relationships as a result of the Bard acquisition are provided in Note 9. Intangible amortization expense was $1.255 billion, $0.533 billion and $0.552 billion in 2018, 2017 and 2016, respectively. The estimated aggregate amortization expense for the fiscal years ending September 30, 2019 to 2023 are as follows: 2019 — $1.472 billion; 2020 — $1.350 billion; 2021 — $1.347 billion; 2022 — $1.338 billion; 2023 — $1.333 billion. The following is a reconciliation of goodwill by business segment:
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Derivative Instruments and Hedging Activities |
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities The Company uses derivative instruments to mitigate certain exposures. The Company does not enter into derivative financial instruments for trading or speculative purposes. The effects these derivative instruments and hedged items have on financial position, financial performance, and cash flows are provided below. Foreign Currency Risks and Related Strategies The Company has foreign currency exposures throughout Europe, Greater Asia, Canada and Latin America. Transactional currency exposures that arise from entering into transactions, generally on an intercompany basis, in non-hyperinflationary countries that are denominated in currencies other than the functional currency are mitigated primarily through the use of forward contracts and currency options. Hedges of the transactional foreign exchange exposures resulting primarily from intercompany payables and receivables are undesignated hedges. As such, the gains or losses on these instruments are recognized immediately in income. These gains and losses are largely offset by gains and losses on the underlying hedged items, as well as the hedging costs associated with the derivative instruments. The net amounts recognized in Other income (expense), net, during the years ending September 30, 2018, 2017 and 2016 were immaterial to the Company's consolidated financial results. The total notional amounts of the Company’s outstanding foreign exchange contracts as of September 30, 2018 and 2017 were $3.1 billion and $2.5 billion, respectively. In order to mitigate foreign currency exposure relating to its investments in certain foreign subsidiaries, the Company has designated $2.7 billion of Euro-denominated debt and $324 million of British Pound-denominated debt as net investment hedges. Accordingly, net gains or losses relating to this debt, which are attributable to changes in the foreign currencies to U.S. dollar spot exchange rates, are recorded as accumulated foreign currency translation in Other comprehensive income (loss). The Company has recorded net gains (losses) relating to these net investment hedges of $81 million and $(159) million to Accumulated other comprehensive income (loss) as of September 30, 2018 and 2017, respectively. Additional disclosures regarding the Company's issuances of the Euro-denominated debt and British Pound-denominated in fiscal year 2018 are provided in Note 15. Interest Rate Risks and Related Strategies The Company’s primary interest rate exposure results from changes in U.S. dollar interest rates. The Company’s policy is to manage interest cost using a mix of fixed and variable rate debt. The Company periodically uses interest rate swaps to manage such exposures. Under these interest rate swaps, the Company exchanges, at specified intervals, the difference between fixed and floating interest amounts calculated by reference to an agreed-upon notional principal amount. These swaps are designated as either fair value or cash flow hedges. For interest rate swaps designated as fair value hedges (i.e., hedges against the exposure to changes in the fair value of an asset or a liability or an identified portion thereof that is attributable to a particular risk), changes in the fair value of the interest rate swaps offset changes in the fair value of the fixed rate debt due to changes in market interest rates. Changes in the fair value of the interest rate swaps designated as cash flow hedges (i.e., hedging the exposure to variability in expected future cash flows that is attributable to a particular risk) are offset by amounts recorded in Other comprehensive income (loss). If interest rate derivatives designated as cash flow hedges are terminated, the balance in Accumulated other comprehensive income (loss) attributable to those derivatives is reclassified into earnings over the remaining life of the hedged debt. The net realized loss related to terminated interest rate swaps expected to be reclassified and recorded in Interest expense within the next 12 months is $6 million, net of tax. The total notional amount of the Company’s outstanding interest rate swaps designated as fair value hedges was $1.2 billion and $375 million at September 30, 2018 and 2017, respectively. The outstanding swaps represent fixed-to-floating interest rate swap agreements the Company entered into to convert the interest payments on certain long-term notes from the fixed rate to a floating interest rate based on LIBOR. Changes in the fair value of the interest rate swaps offset changes in the fair value of the fixed rate debt. The amounts recorded during the years ended September 30, 2018 and 2017 for changes in the fair value of these hedges were immaterial to the Company's consolidated financial results. Other Risk Exposures The Company purchases resins, which are oil-based components used in the manufacture of certain products. Significant increases in world oil prices that lead to increases in resin purchase costs could impact future operating results. From time to time, the Company has managed price risks associated with these commodity purchases through commodity derivative forward contracts. The Company had no outstanding commodity derivative forward contracts at September 30, 2018 and 2017. Financial Statement Effects Effects on Consolidated Balance Sheets The fair values of derivative instruments outstanding at September 30, 2018 and 2017 were not material to the Company's consolidated balance sheets. Effects on Consolidated Statements of Income The amounts recognized from other comprehensive income relating to cash flow hedges during 2018, 2017 and 2016 were not material to the Company's consolidated financial results. |
Financial Instruments and Fair Value Measurements |
12 Months Ended |
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Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Financial Instruments and Fair Value Measurements | Financial Instruments and Fair Value Measurements The Company’s institutional money market accounts permit daily redemption and the fair values of these investments are based upon the quoted prices in active markets provided by the holding financial institutions, which are considered Level 1 inputs in the fair value hierarchy. The fair values of these accounts were $228 million and $2.026 billion at September 30, 2018 and 2017, respectively. The Company’s remaining cash and equivalents, excluding restricted cash, were $913 million and $12.153 billion at September 30, 2018 and 2017, respectively. Short-term investments are held to their maturities and are carried at cost, which approximates fair value. The cash equivalents consist of liquid investments with a maturity of three months or less and the short-term investments consist of instruments with maturities greater than three months and less than one year. Long-term debt is recorded at amortized cost. The fair value of long-term debt is measured based upon quoted prices in active markets for similar instruments, which are considered Level 2 inputs in the fair value hierarchy. The fair value of long-term debt was $18.8 billion and $19.2 billion at September 30, 2018 and 2017, respectively. The fair value of the current portion of long-term debt was $1.893 billion and $206 million at September 30, 2018 and 2017, respectively. All other instruments measured by the Company at fair value, including derivatives and contingent consideration liabilities, are immaterial to the Company's consolidated balance sheets. Nonrecurring Fair Value Measurements In fiscal year 2018, the Company recorded charges of $58 million to write down the value of fixed assets, primarily in the Diabetes Care unit, as well as charges of $81 million to write down the carrying value of certain intangible and other assets in the Biosciences unit. In fiscal year 2016, the Company recorded a charge to Acquisitions and other restructurings of $214 million to impair capitalized internal-use software assets held for sale as a result of the Company's transition of certain elements of its information technology infrastructure to an outsourced model. Also in fiscal year 2016, the Company recorded losses of $81 million on the held for sale assets of certain non-core businesses. The amounts recognized in 2018 and 2016 were recorded to adjust the carrying amount of assets to the assets' fair values, which were estimated, based upon a market participant's perspective, using either Level 2 inputs, including quoted prices for similar assets, or Level 3 inputs, including values estimated using the income approach. Concentration of Credit Risk The Company maintains cash deposits in excess of government-provided insurance limits. Such cash deposits are exposed to loss in the event of nonperformance by financial institutions. Substantially all of the Company’s trade receivables are due from public and private entities involved in the healthcare industry. Due to the large size and diversity of the Company’s customer base, concentrations of credit risk with respect to trade receivables are limited. The Company does not normally require collateral. The Company is exposed to credit loss in the event of nonperformance by financial institutions with which it conducts business. However, this loss is limited to the amounts, if any, by which the obligations of the counterparty to the financial instrument contract exceed the obligations of the Company. The Company also minimizes exposure to credit risk by dealing with a diversified group of major financial institutions. The Company continually evaluates its accounts receivables for potential collection risks particularly those resulting from sales to government-owned or government-supported healthcare facilities in certain countries as payment may be dependent upon the financial stability and creditworthiness of those countries’ national economies. The Company continually evaluates all governmental receivables for potential collection risks associated with the availability of government funding and reimbursement practices. The Company believes the current reserves related to all governmental receivables are adequate and that this concentration of credit risk will not have a material adverse impact on its financial position or liquidity. |
Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | Debt Short-term debt Short-term debt at September 30 consisted of:
The weighted average interest rates for short-term debt were 1.58% and 4.90% at September 30, 2018 and 2017, respectively. Long-term debt Long-Term Debt at September 30 consisted of:
The aggregate annual maturities of debt including interest during the fiscal years ending September 30, 2019 to 2023 are as follows: 2019 — $3.3 billion; 2020 — $2.8 billion; 2021 — $2.3 billion; 2022 — $3.8 billion; 2023 — $1.7 billion. Other current credit facilities In connection with the Company's agreement to acquire Bard, the Company entered into a three-year senior unsecured term loan facility of $2.25 billion during the third quarter of fiscal year 2017. During the first quarter of fiscal year 2018, the proceeds from this facility were used to fund a portion of the cash consideration for the Bard acquisition, as well as the fees and expenses incurred in connection with the acquisition. In September 2018, the Company entered into a 364-day $750 million senior unsecured term loan facility. The Company used $230 million of proceeds drawn from this facility in September 2018 to repay all borrowings outstanding under the three-year term loan facility discussed above. Borrowings outstanding under the new, 364-day term loan facility were $710 million at September 30, 2018. The Company also entered into a five-year senior unsecured revolving credit facility in the third quarter of fiscal year 2017 which became effective upon the closing of the Bard acquisition and which provides borrowing of up to $2.25 billion. This facility will expire in December 2022 and replaced the $1.5 billion syndicated credit facility the Company previously had in place for general corporate purposes. Under the new revolving facility, the Company will be able to issue up to $100 million in letters of credit under this new revolving credit facility and it also includes a provision that enables the Company, subject to additional commitments made by the lenders, to access up to an additional $500 million in financing through the facility for a maximum aggregate commitment of $2.75 billion. There were no borrowings outstanding under the revolving credit facility at September 30, 2018. In addition, the Company has informal lines of credit outside of the United States. Exchange of Bard Notes Also in connection with the Company's acquisition of Bard, the Company exchanged certain outstanding notes issued by Bard for a like-amount of new notes issued by the Company. The exchange offers, which were conditioned upon the closing of the Bard acquisition, expired on December 29, 2017. The aggregate principal amounts of Bard notes which were validly tendered for notes issued by the Company are provided below.
This exchange transaction was accounted for as a modification of the assumed debt instruments. Following the exchange of the notes, the aggregate principal amount of Bard notes that remained outstanding after settlement of the exchange transaction was $111 million. 2018 Debt-Related Transactions In January 2018, the Company commenced an offer to repurchase any and all of the outstanding 3.000% Notes due May 15, 2026 that were issued as a result of the exchange transaction discussed above. Under the terms of the repurchase offer, holders were entitled to receive cash equal to 101% of the principal amount of notes validly tendered, plus accrued and unpaid interest, if any, to the date of purchase. The offer to repurchase the 3.000% Notes expired on March 1, 2018 and a total of $461 million aggregate principal amount of notes were validly tendered at a market price of $465 million. Based upon the carrying value of $452 million, the Company recorded a loss relating to this debt extinguishment in the second quarter of fiscal year 2018 of $13 million as Other income (expense), net, on its consolidated statements of income. During the second quarter of fiscal year 2018, the Company issued Euro-denominated debt consisting of 300 million Euros ($370 million) of 0.368% notes due June 6, 2019 under an indenture pursuant to which the Company previously issued, in the third quarter of fiscal year 2017, 0.368% notes due June 6, 2019. Also in the second quarter of fiscal year 2018, the Company issued $1 billion of floating rate senior unsecured U.S. notes due December 29, 2020. The Company used the net proceeds from these long-term debt offerings to repay portions of the balances outstanding on its term loan and revolving credit facilities, which are discussed above, as well as accrued interest, related premiums, fees and expenses related to these repaid amounts. In June 2018, the Company redeemed all of the 4.400% Notes due January 15, 2021 and 3.000% Notes due May 15, 2026 which were issued by Bard and that remained outstanding after the exchange offer discussed further above. Also in June 2018, the Company redeemed all of the 4.400% Notes due January 15, 2021 which were issued by the Company upon the exchange offer, as well as all of the 3.000% Notes due May 15, 2026 issued by the Company which remained outstanding after the repurchase offer also discussed above. The total aggregate principal amount of notes redeemed was $539 million. Based upon the $556 million carrying value of these notes and the $559 million the Company paid to redeem the aggregate principal amount of the notes, the Company recorded a loss on these debt extinguishment transactions in the third quarter of fiscal year 2018 of $3 million as Other income (expense), net, on its consolidated statements of income. During the third quarter of fiscal year 2018, the Company issued Euro-denominated debt consisting of 300 million Euros ($354 million) of 1.401% notes due May 24, 2023. Also in the third quarter of fiscal year 2018, the Company issued British Pound-denominated debt of 250 million British Pounds ($337.5 million) of 3.02% notes due May 24, 2025. The Company used the net proceeds from these long-term debt offerings to redeem certain notes in the third quarter, as further discussed above, and to repay a portion of the balance outstanding on its term loan, as well as accrued interest, related premiums, fees and expenses related to this repaid amount. 2017 Debt-Related Transactions In December 2016, the Company issued euro-denominated debt consisting of 500 million Euros of 1.000% notes and 500 million Euros of 1.900% notes. The Company used the net proceeds from this long-term debt offering, together with other sources of liquidity, to fund the Company's repurchase of certain of its senior notes outstanding. Under this cash tender offer, the Company repurchased all or a portion of the aggregate principal amounts of certain of its long-term notes outstanding, totaling $1.689 billion, at an aggregate market price of $1.764 billion. The carrying value of these long-term notes was $1.727 billion, and the Company recognized a loss on this debt extinguishment of $42 million, which was recorded in December 2016 as Other income (expense), net, on the Company’s consolidated statements of income. During the third quarter of 2017 and in connection with the Company's acquisition of Bard, as previously discussed in Note 9, the Company issued senior unsecured U.S. notes with an aggregate principal amount of $9.675 billion. Also during the third quarter of 2017, the Company issued Euro-denominated debt consisting of 700 million Euros of 0.368% Notes due June 6, 2019. Also in 2017, the Company redeemed all or a portion of the aggregate principal amounts of certain of its long-term senior notes outstanding, totaling $1.717 billion, at an aggregate market price of $1.776 billion. The carrying value of these long-term notes was $1.745 billion and the Company recognized a loss on this debt extinguishment of $31 million, which was recorded in June 2017 as Other income (expense), net, on the Company’s consolidated statements of income. Capitalized interest The Company capitalizes interest costs as a component of the cost of construction in progress. A summary of interest costs and payments for the years ended September 30 is as follows:
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Income Taxes |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | Income Taxes New U.S. Tax Legislation New U.S. tax legislation, which is commonly referred to as the Tax Cuts and Job Act (the "Act") and which was enacted on December 22, 2017, reduces the U.S. federal corporate tax rate from 35% to 21%, requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred, and creates new taxes on certain foreign-sourced earnings. Under U.S. generally accepted accounting principles, companies must account for the effects of changes in income tax rates and laws in the period in which the legislation is enacted. However, the U.S. Securities and Exchange Commission (the "SEC") has provided guidance which allows companies to report financial results including provisional amounts that have been recorded for the income tax effects of the Act based upon a reasonable estimate of those effects. The SEC expects that accounting for the Act should be completed by companies by no later than one year from the enactment date of the Act. As of September 30, 2018, the Company has not completed its accounting for the tax effects of enactment of the Act; however, the Company has made what it believes is a reasonable estimate of the effects on the remeasurement of U.S. deferred tax balances, the one-time transition tax, and the taxes accrued relating to the change in permanent reinvestment assertion for unremitted earnings of its foreign subsidiaries. As a result of these estimates, the Company recognized a provisional expense in the amount of $640 million, which is reflected in the Company's consolidated statement of income within Income tax provision. The Company also recorded a charge, which is further discussed below, relating to historic unremitted foreign earnings as of September 30, 2018. The Company will continue to gather information and perform additional analysis on these estimates, including, but not limited to, the amount of earnings and profits subject to the transition tax, the calculation of foreign tax credits, the local tax treatment of future distributions of unremitted earnings and the remeasurement of U.S. deferred taxes. Any measurement period adjustments will be reported as a component of Income tax provision in the reporting period the amounts are determined. The final accounting will be completed no later than one year from the enactment of the Act. The Company is currently in the process of evaluating the new Global Intangible Low-Taxed Income’s ("GILTI") provisions and has not yet elected an accounting policy regarding whether to record deferred taxes related to GILTI. Therefore, the Company has not made any adjustments related to the GILTI tax in its financial statements. Under the SEC guidance noted above, the Company will continue to analyze and assess the effects of the GILTI provisions of the Act. Provisional Amounts The Company believes that all provisional amounts reflected in its financial statements are based on the best estimates that can be made at this time. The Company will continue to analyze all impacts of the Act and will update provisional amounts as required. Deferred tax assets and liabilities The Company remeasured certain deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future, which is generally 21%. However, the Company is still analyzing certain aspects of the Act and refining its calculations, which could potentially affect the measurement of these balances or potentially give rise to new deferred tax amounts. The Company recorded a provisional tax benefit of $182 million related to the re-measurement of the Company's deferred tax balances. Foreign tax effects The one-time transition tax is based on the Company's total post-1986 earnings and profits ("E&P") that the Company previously deferred from U.S. income taxes. The Company recorded a provisional amount for its one-time transition tax liability for all of its foreign subsidiaries, resulting in an increase in income tax expense of $822 million. However, the Company has not yet completed its calculation of the total post-1986 E&P for these foreign subsidiaries. Further, the transition tax is based in part on the amount of those earnings held in cash and other specified assets. This amount may change when the Company finalizes the calculation of post-1986 foreign E&P previously deferred from U.S. federal taxation and finalizes the amounts held in cash or other specified assets. As discussed in Note 9, the Company completed its acquisition of Bard on December 29, 2017. The net assets acquired included approximately $175 million of transition tax payable based on the Company's best estimate of its transition tax liability. The combined company's transition tax liability, 8% of which is payable per year over the next five years with the balance payable over the following three years, is approximately $1 billion. The anticipated payment of this tax is expected to begin on January 15, 2019. The Company has historically asserted indefinite reinvestment of the earnings of certain non-U.S. subsidiaries outside the United States. The Act eliminated certain material tax effects on the repatriation of cash to the United States. Future repatriation of cash and other property held by our foreign subsidiaries will generally not be subject to U.S. federal income tax. As a result, after reevaluation of the permanent reinvestment assertion, the Company is no longer permanently reinvested with respect to its historic unremitted foreign earnings as of September 30, 2018. As a result of the change in the assertion, during fiscal 2018, the Company recorded a charge of $134 million to Income tax provision related to historic unremitted foreign earnings as of September 30, 2018. Provision for Income Taxes The provision for income taxes the years ended September 30 consisted of:
The components of Income Before Income Taxes for the years ended September 30 consisted of:
Unrecognized Tax Benefits The 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 certain audits will close within the next twelve months but no significant increases or decreases in the amount of the unrecognized tax benefits are expected to result.
Upon the Company's acquisition of CareFusion in 2015, the Company became a party to a tax matters agreement with Cardinal Health resulting from Cardinal Health's spin-off of CareFusion in fiscal year 2010. Under the tax matters agreement, the Company is obligated to indemnify Cardinal Health for certain tax exposures and transaction taxes prior to CareFusion’s spin-off from Cardinal Health. The indemnification payable is approximately $140 million at September 30, 2018 and is included in Deferred Income Taxes and Other on the consolidated balance sheet. At September 30, 2018, 2017 and 2016, there are $632 million, $415 million and $478 million of unrecognized tax benefits that if recognized, would affect the effective tax rate. During the fiscal years ended September 30, 2018, 2017 and 2016, the Company reported interest and penalties associated with unrecognized tax benefits of $20 million, $57 million and $(38) million on the consolidated statements of income as a component of Income tax provision. 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 for the BD Legacy fiscal year 2014 and combined company fiscal years 2016 and 2017. For the BD legacy business, all years are effectively settled with the exception of 2015 for which the Company believes it is adequately reserved for any potential exposures. The IRS is currently examining the CareFusion legacy fiscal year 2014 and short period 2015. With the exception of the CareFusion legacy fiscal year 2010 audit, all other periods are at various stages of appeals or protests. With regard to Bard, all examinations have been completed through calendar year 2014. The IRS has commenced the examination of calendar years 2015 and 2016. For the other major tax jurisdictions where the Company conducts business, tax years are generally open after 2012. Deferred Income Taxes Deferred income taxes at September 30 consisted of:
Deferred tax assets and liabilities are netted on the balance sheet by separate tax jurisdictions. Deferred taxes have been provided on undistributed earnings of foreign subsidiaries as of September 30, 2018. Generally, deferred tax assets have been established as a result of net operating losses and credit carryforwards with expiration dates from 2019 to an unlimited expiration date. Valuation allowances have been established as a result of an evaluation of the uncertainty associated with the realization of certain deferred tax assets on these losses and credit carryforwards. The valuation allowance for 2018 is primarily the result of foreign losses due to the Company’s global re-organization of its foreign entities and these generally have no expiration date. Valuation allowances are also maintained with respect to deferred tax assets for certain federal and state carryforwards that may not be realized and that principally expire in 2038. Tax Rate Reconciliation A reconciliation of the federal statutory tax rate to the Company’s effective income tax rate was as follows:
Tax Holidays and Payments The approximate amounts of tax reductions related to tax holidays in various countries in which the Company does business were $101 million, $144 million and $121 million, in 2018, 2017 and 2016, respectively. The benefit of the tax holiday on diluted earnings per share was approximately $0.38, $0.64 and $0.56 for fiscal years 2018, 2017 and 2016, respectively. The tax holidays expire at various dates through 2028. The Company made income tax payments, net of refunds, of $235 million in 2018, $265 million in 2017 and $218 million in 2016. |
Sale-Type Leases and Financing Receivables |
12 Months Ended |
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Sep. 30, 2018 | |
Receivables [Abstract] | |
Sale-Type Leases and Financing Receivable | Sales-Type Leases and Financing Receivables In April 2017, in conjunction with the implementation of a new “go-to-market” business model for the Company's U.S. dispensing business within the Medication Management Solutions (“MMS”) unit of the Medical segment, the Company amended the terms of certain customer leases for dispensing equipment within the MMS unit. The modification provided customers the ability to reduce its dispensing asset base via a return provision, resulting in a more flexible lease term. Prior to the modification, these leases were accounted for as sales-type leases in accordance with Accounting Standards Codification Topic 840, "Leases", as the non-cancellable lease term of 5 years exceeded 75% of the equipment’s estimated useful life and the present value of the minimum lease payments exceeded 90% of the equipment’s fair value. As a result of the lease modification, the Company was required to reassess the classification of the leases due to the amended lease term. Accordingly, most amended lease contracts were classified as operating leases beginning in April 2017. The change in lease classification resulted in a pre-tax charge to earnings in fiscal year 2017 of $748 million, which was recorded in Other operating expense, net. Beginning April 1, 2017, revenue associated with these modified contracts has been recognized on a straight-line basis over the remaining lease term, along with depreciation on the reinstated leased assets. The Company's consolidated financial results in 2018 and 2017 were not materially impacted by the financing receivables remaining subsequent to the lease modification discussed above. |
Supplemental Financial Information |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Financial Information | Supplemental Financial Information Other Income (Expense), Net
Trade Receivables, Net The amounts recognized in 2018, 2017 and 2016 relating to allowances for doubtful accounts and cash discounts, which are netted against trade receivables, are provided in the following table:
Inventories Inventories at September 30 consisted of:
The Company acquired $974 million of inventories in the Bard transaction which is further discussed in Note 9. Property, Plant and Equipment, Net Property, Plant and Equipment, Net at September 30 consisted of:
The Company acquired $553 million of property, plant and equipment assets, which largely consisted of machinery, equipment and fixtures, in the Bard transaction. |
Supplementary Data (Unaudited) |
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Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Financial Data (Unaudited) | SUPPLEMENTARY QUARTERLY DATA (UNAUDITED)
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Summary of Significant Accounting Policies (Policies) |
12 Months Ended |
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Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying Consolidated Financial Statements and Notes to Consolidated Financial Statements of Becton, Dickinson and Company (the “Company”) have been prepared in accordance with U.S. generally accepted accounting principles. Within the financial statements and tables presented, certain columns and rows may not add due to the use of rounded numbers for disclosure purposes. Percentages and earnings per share amounts presented are calculated from the underlying amounts. Our fiscal year ends on September 30. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the Company’s accounts and those of its majority-owned subsidiaries after the elimination of intercompany transactions. The Company has no material interests in variable interest entities. |
Cash Equivalents | Cash Equivalents Cash equivalents consist of all highly liquid investments with a maturity of three months or less at time of purchase. |
Restricted Cash | Restricted Cash Restricted cash consists of cash restricted from withdrawal and usage and largely represents funds that are restricted for certain product liability matters assumed in the acquisition of C.R. Bard, Inc. ("Bard") which is further discussed in Note 9. |
Short-Term Investments | Short-Term Investments Short-term investments consist of time deposits with maturities greater than three months and less than one year when purchased. |
Trade and Financing Receivables | Trade Receivables The Company grants credit to customers in the normal course of business and the resulting trade receivables are stated at their net realizable value. The allowance for doubtful accounts represents the Company’s estimate of probable credit losses relating to trade receivables and is determined based on historical experience and other specific account data. Amounts are written off against the allowances for doubtful accounts when the Company determines that a customer account is uncollectible. |
Inventories | Inventories Inventories are stated at the lower of first-in, first-out cost or market. |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment are stated at cost, less accumulated depreciation and amortization. Depreciation and amortization are principally provided on the straight-line basis over estimated useful lives, which range from 20 to 45 years for buildings, four to 13 years for machinery and equipment and one to 20 years for leasehold improvements. |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets The Company’s unamortized intangible assets include goodwill and in-process research and development assets which arise from acquisitions. The Company currently reviews all indefinite-lived assets, including goodwill, for impairment generally using quantitative models. Goodwill is reviewed at least annually for impairment at the reporting unit level, which is defined as an operating segment or one level below an operating segment, referred to as a component. The Company’s reporting units generally represent one level below reporting segments. Potential impairment of goodwill is generally identified by comparing the fair value of a reporting unit, estimated using an income approach, with its carrying value. The annual impairment review performed on July 1, 2018 indicated that all identified reporting units’ fair values exceeded their respective carrying values. The review for impairment of in-process research and development assets is performed by comparing the fair value of the technology or project assets, estimated using an income approach, with their carrying value. In-process research and development assets are considered indefinite-lived assets and are reviewed at least annually for impairment until projects are completed or abandoned. Amortized intangible assets include developed technology assets which arise from acquisitions. These assets represent acquired intellectual property that is already technologically feasible upon the acquisition date or acquired in-process research and development assets that are completed subsequent to acquisition. Developed technology assets are generally amortized over periods ranging from 15 to 20 years, using the straight-line method. Customer relationship assets are generally amortized over periods ranging from 10 to 15 years, using the straight-line method. Other intangibles with finite useful lives, which include patents, are amortized over periods principally ranging from one to 40 years, using the straight-line method. Finite-lived intangible assets, including developed technology assets, are periodically reviewed when impairment indicators are present to assess recoverability from future operations using undiscounted cash flows. The carrying values of these finite-lived assets are compared to the undiscounted cash flows they are expected to generate and an impairment loss is recognized in operating results to the extent any finite-lived intangible asset’s carrying value exceeds its calculated fair value. |
Foreign Currency Translation | Foreign Currency Translation Generally, foreign subsidiaries’ functional currency is the local currency of operations and the net assets of foreign operations are translated into U.S. dollars using current exchange rates. The U.S. dollar results that arise from such translation, as well as exchange gains and losses on intercompany balances of a long-term investment nature, are included in the foreign currency translation adjustments in Accumulated other comprehensive income (loss). |
Revenue Recognition | Revenue Recognition Revenue from product sales is typically recognized when all of the following criteria have been met: persuasive evidence of an arrangement exists; delivery has occurred or services have been rendered; product price is fixed or determinable; collection of the resulting receivable is reasonably assured. Certain sales arrangements contain multiple deliverables, including equipment and service deliverables, which requires the Company to determine the separate units of account. If the deliverable meets the criteria of a separate unit of accounting, the arrangement consideration is allocated to each element based upon its relative selling price. In determining the best evidence of selling price of a unit of account the Company utilizes vendor-specific objective evidence (“VSOE”), which is the price the Company charges when the deliverable is sold separately. When VSOE is not available, management uses relevant third-party evidence (“TPE”) of selling price, if available. When neither VSOE nor TPE of selling price exists, management uses its best estimate of selling price. Revenue allocated to certain equipment deliverables is recognized upon customer acceptance, which occurs after the transfer of title and risk of loss to the customer and the completion of installation or training services. When related services are considered inconsequential, delivery is deemed to occur upon the transfer of title and risk of loss, at which time revenue and the costs associated with services are recognized. For equipment lease revenue, transactions are evaluated and classified as either operating leases or sales-type leases. Generally, the Company's lease arrangements with customers are accounted for as operating leases and therefore, revenue is recognized at the contracted rate over the rental period, as defined within the customer agreement. For products sold and leased with embedded software, if software is considered not essential to the non-software elements of a product but is considered more than incidental to a product as a whole, the product’s software elements must be separated from its non-software elements under the requirements relating to multiple-element arrangements and accounted for under software industry-specific revenue recognition requirements. However, if it is determined that the embedded software is more than incidental to the product as a whole but the non-software elements and software elements work together to deliver the essential functionality of the products as a whole, then the accounting for such product does not fall within the scope of software industry-specific accounting requirements. The Company’s domestic businesses sell products primarily to distributors that resell the products to end-user customers. Rebates are provided to distributors that sell to end-user customers at prices determined under a contract between the Company and the end-user customer. Provisions for rebates, as well as sales discounts and returns, are based upon estimates and are accounted for as a reduction of revenues when revenue is recognized. |
Shipping and Handling Costs | Shipping and Handling Costs Shipping and handling costs are included in Selling and administrative expense. |
Derivative Financial Instruments | Derivative Financial Instruments All derivatives are recorded in the balance sheet at fair value and changes in fair value are recognized currently in earnings unless specific hedge accounting criteria are met. Any deferred gains or losses associated with derivative instruments are recognized in income in the period in which the underlying hedged transaction is recognized. |
Income Taxes | Income Taxes The Company has historically asserted indefinite reinvestment of the earnings of certain non-U.S. subsidiaries outside the United States. New U.S. tax legislation, which is further discussed in Note 16, eliminated certain material tax effects on the repatriation of cash to the United States. Future repatriation of cash and other property held by the Company's foreign subsidiaries will generally not be subject to U.S. federal income tax. As a result, after reevaluation of the permanent reinvestment assertion, the Company is no longer permanently reinvested with respect to its historic unremitted foreign earnings as of September 30, 2018. The Company conducts business and files tax returns in numerous countries and currently has tax audits in progress in a number of tax jurisdictions. In evaluating the exposure associated with various tax filing positions, the Company records accruals for uncertain tax positions, based on the technical support for the positions, past audit experience with similar situations, and the potential interest and penalties related to the matters. The Company maintains valuation allowances where it is more likely than not that all or a portion of a deferred tax asset will not be realized. Changes in valuation allowances are included in the tax provision in the period of change. In determining whether a valuation allowance is warranted, management evaluates factors such as prior earnings history, expected future earnings, carryback and carryforward periods and tax strategies that could potentially enhance the likelihood of the realization of a deferred tax asset. |
Earnings per Share | Earnings per Share Basic earnings per share are computed by dividing income available to common stockholders by the weighted average number of common shares outstanding. Diluted earnings per share reflect the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. In computing diluted earnings per share, only potential common shares that are dilutive (i.e., those that reduce earnings per share or increase loss per share) are included in the calculation. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions. These estimates or assumptions affect reported assets, liabilities, revenues and expenses as reflected in the consolidated financial statements. Actual results could differ from these estimates. |
New Accounting Principle Adopted and New Accounting Principles Not Yet Adopted | New Accounting Principle Adopted In the second quarter of its fiscal year 2018, the Company prospectively adopted an accounting standard update issued by the Financial Accounting Standards Board ("FASB") relating to the stranded income tax effects on items within Accumulated other comprehensive income (loss) resulting from the enactment of new U.S. tax legislation, which legislation is further discussed in Note 16. Additional disclosures regarding this accounting standard adoption are provided in Note 3. On October 1, 2016, the Company prospectively adopted amended requirements issued by the FASB relating to the timing of recognition and classification of share-based compensation award-related income tax effects. Upon adoption of the requirements in 2017, the Company has recorded tax benefits relating to share-based compensation awards within Income tax (benefit) provision on its consolidated statement of income. These tax benefits had been previously recorded within Capital in excess of par value on the Company's consolidated balance sheet. Also upon adoption of the amended guidance in 2017, the Company has classified excess tax benefits on its consolidated statement of cash flows within Net Cash Provided by Operating Activities, rather than Net Cash Provided by (Used for) Financing Activities. New Accounting Principles Not Yet Adopted In March 2017, the FASB issued an accounting standard update which requires all components of net periodic pension and postretirement benefit costs to be disaggregated from the service cost component and to be presented on the income statement outside a subtotal of income from operations, if one is presented. The Company's adoption of the new requirements on October 1, 2018 is not expected to have a material impact on its consolidated financial statements. In February 2016, the FASB issued a new lease accounting standard which requires lessees to recognize lease assets and lease liabilities on the balance sheet. The new standard also requires expanded disclosures regarding leasing arrangements. The Company will adopt the standard on October 1, 2019 and has commenced its initial assessment of the impact on its consolidated financial statements. In May 2014, the FASB issued a new revenue recognition standard. Under this standard, revenue is recognized upon the transfer of goods or services to customers and the amount of revenue recognized reflects the consideration to which a reporting entity expects to be entitled in exchange for those goods or services. The Company adopted the standard on October 1, 2018 using the modified retrospective method. The Company assessed the impact that this new revenue recognition standard will have on its consolidated financial statements based upon a review of contracts that were not completed as of October 1, 2018. The Company is currently finalizing the changes to its processes, systems and controls which are necessary to support recognition and disclosure under the new revenue recognition standard. The Company does not expect its adoption of the new standard to have a material impact on its consolidated financial statements. |
Contingencies | Contingencies Given the uncertain nature of litigation generally, the Company is not able, in all cases, to estimate the amount or range of loss that could result from an unfavorable outcome of the litigation to which the Company is a party. In accordance with U.S. generally accepted accounting principles, the Company establishes accruals to the extent probable future losses are estimable (in the case of environmental matters, without considering possible third-party recoveries). With respect to putative class action lawsuits in the United States and certain of the Canadian lawsuits described below relating to product liability matters, the Company is unable to 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 the class. With respect to the investigative subpoena issued by the Department of Defense Inspector General and the Department of Health and Human Services and the civil investigative demand served by the Department of Justice, as discussed below, the Company is unable to estimate a range of reasonably possible losses for the following reasons: (i) all or certain of the proceedings are in early stages; and/or (ii) there are significant factual and legal issues to be resolved. In view of the uncertainties discussed below, the Company could incur charges in excess of any currently established accruals and, to the extent available, liability insurance. In the opinion of management, any such future charges, individually or in the aggregate, could have a material adverse effect on the Company’s consolidated results of operations and consolidated cash flows. Product Liability Matters As is further discussed in Note 9, the Company completed its acquisition of Bard on December 29, 2017 and the following matters include Bard-related legal proceedings and claims that the Company assumed on the acquisition date (“Bard-related Product Liability Matters”). The Company believes that certain settlements and judgments, as well as some legal defense costs, relating to product liability matters are or may be covered in whole or in part under its product liability insurance policies with a limited number of insurance carriers, or, in some circumstances, indemnification obligations to the Company from other parties, which if disputed, the Company intends to vigorously contest. Amounts recovered under the Company’s product liability insurance policies or indemnification arrangements may be less than the stated coverage limits or less than otherwise expected and may not be adequate to cover damages and/or costs relating to claims. In addition, there is no guarantee that insurers or other parties will pay claims or that coverage or indemnity will be otherwise available. Hernia Product Claims As of September 30, 2018, the Company is defending approximately 3,154 product liability claims involving Bard’s line of hernia repair devices (collectively, the “Hernia Product Claims”). The majority of those claims are currently pending in a coordinated proceeding in Rhode Island State Court, but claims are also pending in other state and/or federal court jurisdictions. In addition, those claims include multiple putative class actions in Canada. Generally, the Hernia Product Claims seek damages for personal injury allegedly resulting from use of the products. From time to time, the Company engages in resolution discussions with plaintiffs’ law firms regarding certain of the Hernia Product Claims, but the Company also intends to vigorously defend Hernia Product Claims that do not settle, including through litigation. Trials are scheduled throughout 2019 in various state and/or federal courts. The Company expects additional trials of Hernia Product Claims to take place over the next 12 months. In August 2018, a new hernia multi-district litigation (“MDL”) was ordered to be established in the Southern District of Ohio. The Company cannot give any assurances that the resolution of the Hernia Product Claims that have not settled, including asserted and unasserted claims and the putative class action lawsuits, will not have a material adverse effect on the Company’s business, results of operations, financial condition and/or liquidity. Women’s Health Product Claims As of September 30, 2018, the Company is defending approximately 1,322 product liability claims involving Bard’s line of pelvic mesh devices. The majority of those claims are currently pending in a federal MDL in the United States District Court for the Southern District of West Virginia, but claims are also pending in other state and/or federal court jurisdictions, including a coordinated proceeding in New Jersey State Court. In addition, those claims include putative class actions filed in the United States. Not included in the figures above are approximately 1,037 filed and unfiled claims that have been asserted or threatened against Bard but lack sufficient information to determine whether a Bard pelvic mesh device is actually at issue. The claims identified above also include products manufactured by both Bard and two subsidiaries of Medtronic plc (as successor in interest to Covidien plc) (“Medtronic”), each a supplier of Bard. Medtronic has an obligation to defend and indemnify Bard with respect to any product defect liability relating to products its subsidiaries had manufactured. As described below, in July 2015 the Company reached an agreement with Medtronic (which was amended in June 2017) regarding certain aspects of Medtronic’s indemnification obligation. The foregoing lawsuits, unfiled claims, putative class actions, and other claims, together with claims that have settled or are the subject of agreements or agreements in principle to settle, are referred to collectively as the “Women’s Health Product Claims.” The Women’s Health Product Claims generally seek damages for personal injury allegedly resulting from use of the products. As of September 30, 2018, the Company has reached agreements or agreements in principle with various plaintiffs’ law firms to settle their respective inventories of cases totaling approximately 15,021 of the Women’s Health Product Claims. The Company believes that these Women’s Health Product Claims are not the subject of Medtronic’s indemnification obligation. These settlement agreements and agreements in principle include unfiled and previously unknown claims held by various plaintiffs’ law firms, which are not included in the approximate number of lawsuits set forth in the first paragraph of this section. Each agreement is subject to certain conditions, including requirements for participation in the proposed settlements by a certain minimum number of plaintiffs. The Company continues to engage in discussions with other plaintiffs’ law firms regarding potential resolution of unsettled Women’s Health Product Claims, which may include additional inventory settlements. Starting in 2014 in the MDL, the court entered certain pre-trial orders requiring trial work up and remand of a significant number of Women’s Health Product Claims, including an order entered in the MDL on January 30, 2018, that requires the work up and remand of all remaining unsettled cases (the “WHP Pre-Trial Orders”). The WHP Pre-Trial Orders may result in material additional costs or trial verdicts in future periods in defending Women’s Health Product Claims. Trials are anticipated in 2018 and throughout 2019 in state courts. A trial in the New Jersey coordinated proceeding began in March 2018, and in April 2018 a jury entered a verdict against the Company in the total amount of $68 million ($33 million compensatory; $35 million punitive). The Company is in the process of challenging that verdict. The Company expects additional trials of Women’s Health Product Claims to take place over the next 12 months. In July 2015, as part of the agreement with Medtronic noted above, Medtronic agreed to take responsibility for pursuing settlement of certain of the Women’s Health Product Claims that relate to products distributed by Bard under supply agreements with Medtronic, and Bard has paid Medtronic $121 million towards these potential settlements. In June 2017, Bard amended the agreement with Medtronic to transfer responsibility for settlement of additional Women’s Health Product Claims to Medtronic on terms similar to the July 2015 agreement, including with respect to the obligation to make payments to Medtronic towards these potential settlements. Bard also may, in its sole discretion, transfer responsibility for settlement of additional Women’s Health Product Claims to Medtronic on similar terms. The agreements do not resolve the dispute between Bard and Medtronic with respect to Women’s Health Product Claims that do not settle, if any. During the course of engaging in settlement discussions with plaintiffs’ law firms, the Company has learned, and may in future periods learn, additional information regarding these and other unfiled claims, or other lawsuits, which could materially impact the Company’s estimate of the number of claims or lawsuits against the Company. Filter Product Claims As of September 30, 2018, the Company is defending approximately 4,515 product liability claims involving Bard’s line of inferior vena cava filters (collectively, the “Filter Product Claims”). The majority of those claims are currently pending in an MDL in the United States District Court for the District of Arizona, but claims are also pending in other state and/or federal court jurisdictions, including a coordinated proceeding in Arizona State Court. In addition, those claims include putative class actions filed in the United States and Canada. The Filter Product Claims generally seek damages for personal injury allegedly resulting from use of the products. The Company has limited information regarding the nature and quantity of certain of the Filter Product Claims. The Company continues to receive claims and lawsuits and may in future periods learn additional information regarding other unfiled or unknown claims, or other lawsuits, which could materially impact the Company’s estimate of the number of claims or lawsuits against the Company. Trials are scheduled throughout 2018 in the MDL and state courts. On March 30, 2018, a jury in the first MDL trial found the Company liable for negligent failure to warn and entered a verdict in favor of plaintiffs. The jury found the Company was not liable for (a) strict liability design defect; (b) strict liability failure to warn; and (c) negligent design. The Company has appealed that verdict. On June 1, 2018, a jury in the second MDL trial unanimously found in favor of the Company on all claims. On August 17, 2018, the Court entered summary judgment in favor of the Company on all claims in the third MDL trial. On October 5, 2018, a jury in the fourth MDL trial unanimously found in favor of the Company on all claims. The Company expects additional trials of Filter Product Claims may take place over the next 12 months. In most product liability litigations (like those described above), plaintiffs allege a wide variety of claims, ranging from allegations of serious injury caused by the products to efforts to obtain compensation notwithstanding the absence of any injury. In many of these cases, the Company has not yet received and reviewed complete information regarding the plaintiffs and their medical conditions and, consequently, is unable to fully evaluate the claims. The Company expects that it will receive and review additional information regarding any remaining unsettled product liability matters. In January 2017, the Company reached an agreement to resolve litigation filed in the Southern District of New York by its insurance carriers in connection with Women’s Health Product Claims and Filter Product Claims. The agreement requires the insurance carriers to reimburse the Company for certain future costs incurred in connection with Filter Product Claims up to an agreed amount. For certain product liability claims or lawsuits, the Company does not maintain or has limited remaining insurance coverage. Other Legal Matters In June 2007, Retractable Technologies, Inc. (“RTI”) filed a complaint against the Company under the caption Retractable Technologies, Inc. vs. Becton Dickinson and Company (Civil Action No. 2:07-cv-250, U.S. District Court, Eastern District of Texas) alleging that the BD Integra™ syringes infringe patents licensed exclusively to RTI. Included in its complaint, RTI also alleged that the Company engaged in false advertising with respect to certain of the Company’s safety-engineered products in violation of the Lanham Act; acted to exclude RTI from various product markets and to maintain its market share through, among other things, exclusionary contracts in violation of state and federal antitrust laws; and engaged in unfair competition. In January 2008, the Court severed the patent and non-patent claims into separate cases. BD paid a $5 million award following an adverse infringement verdict at the district court and the Company's unsuccessful appeal. On September 19, 2013, a jury returned a verdict against BD with respect to RTI’s Lanham Act claim and claim for attempted monopolization based on deception in the safety syringe market. The jury awarded RTI $113.5 million for its attempted monopolization claim (which would be trebled under the antitrust statute). Upon issuance of a Court of Appeals decision reversing the attempted monopolization claim, the Company recorded a $337 million reversal of reserves associated with the initial judgment, in Other operating (income) expense, net, in the first quarter of fiscal year 2017. The Court of Appeals affirmed the judgment for Lanham Act liability, and remanded the case to the district court to consider whether and if so how much profit should be disgorged by BD on that claim. The Court of Appeals also vacated and remanded the injunction ordered by the district court. On January 31, 2017, RTI filed a petition for a writ of certiorari with the U.S. Supreme Court. On March 20, 2017, the U.S. Supreme Court denied certiorari, and the district court thereafter heard RTI’s request for disgorgement. On August 17, 2017, the district court entered judgment in favor of BD and ruled that RTI is not entitled to any award of money damages. RTI has appealed this ruling to the Fifth Circuit Court of Appeals. Oral argument on the appeal occurred on October 3, 2018. Since early 2013, Bard has received subpoenas or Civil Investigative Demands from a number of State Attorneys General seeking information related to the sales and marketing of certain of the Company’s products that are the subject of the Hernia Product Claims and the Women’s Health Product Claims. The Company is cooperating with these requests. Although the Company has had, and continues to have, discussions with the State Attorneys General with respect to overall potential resolution of this matter, there can be no assurance that a resolution will be reached or what the terms of any such resolution may be. In November 2015, the Department of Defense Inspector General issued an investigative subpoena to Bard. The Department of Health and Human Services is also participating in this investigation. The subpoena seeks documents related to the Company’s sales and marketing of certain filter products, drug coated balloon catheters, and peripheral arterial disease detection products. In July 2017, a separate civil investigative demand was served by the Department of Justice seeking documents and information relating to an investigation into possible violations of the False Claims Act in connection with the sales and marketing of FloChec® and QuantaFloTM devices. The Company is cooperating with these requests. Since it is not feasible to predict the outcome of these matters, the Company cannot give any assurances that the resolution of these matters will not have a material adverse effect on the Company’s business, results of operations, financial condition and/or liquidity. The Company is a potentially responsible party to a number of federal administrative proceedings in the United States brought under the Comprehensive Environment Response, Compensation and Liability Act, also known as “Superfund,” and similar state laws. The affected sites are in varying stages of development. In some instances, the remedy has been completed, while in others, environmental studies are underway or commencing. For several sites, there are other potentially responsible parties that may be jointly or severally liable to pay all or part of cleanup costs. While it is not feasible to predict the outcome of these proceedings, based upon the Company’s experience, current information and applicable law, the Company does not expect these proceedings to have a material adverse effect on its financial condition and/or liquidity. However, one or more of the proceedings could be material to the Company’s business and/or results of operations. The Company is also involved both as a plaintiff and a defendant in other legal proceedings and claims that arise in the ordinary course of business. The Company believes that it has meritorious defenses to these suits pending against the Company and is engaged in a vigorous defense of each of these matters. Litigation Reserves Accruals for the Bard product liability claims which are specifically discussed above, as well as the related legal defense costs, amounted to approximately $2.0 billion at September 30, 2018. Such amounts include provisional estimates which have been recorded with respect to the acquired liabilities. These amounts may be adjusted upon the availability of new or additional information regarding facts or circumstances which existed at the acquisition date. As of September 30, 2018, the Company has $94 million in Bard-related qualified settlement funds (“QSFs”), subject to certain settlement conditions, for certain product liability matters. Payments to QSFs are recorded as a component of Restricted cash. The Company's expected recoveries related to Bard-related product liability claims and related legal defense costs were approximately $343 million at September 30, 2018. A substantial amount of these expected recoveries at September 30, 2018 relate to the Company’s agreements with Medtronic related to certain Women’s Health Product Claims. The terms of the Company’s agreements with Medtronic are substantially consistent with the assumptions underlying, and the manner in which, the Company has recorded expected recoveries related to the indemnification obligation. The expected recoveries at September 30, 2018 related to the indemnification obligation are not in dispute with respect to claims that Medtronic settles pursuant to the agreements. As described above, the agreements do not resolve the dispute between the Company and Medtronic with respect to Women’s Health Product Claims that do not settle, if any, and the Company also may, in its sole discretion, transfer responsibility for settlement of additional Women’s Health Product Claims to Medtronic on similar terms. |
Fair Value of Financial Instruments | Long-term debt is recorded at amortized cost. The fair value of long-term debt is measured based upon quoted prices in active markets for similar instruments, which are considered Level 2 inputs in the fair value hierarchy. |
Concentration of Credit Risk | Concentration of Credit Risk The Company maintains cash deposits in excess of government-provided insurance limits. Such cash deposits are exposed to loss in the event of nonperformance by financial institutions. Substantially all of the Company’s trade receivables are due from public and private entities involved in the healthcare industry. Due to the large size and diversity of the Company’s customer base, concentrations of credit risk with respect to trade receivables are limited. The Company does not normally require collateral. The Company is exposed to credit loss in the event of nonperformance by financial institutions with which it conducts business. However, this loss is limited to the amounts, if any, by which the obligations of the counterparty to the financial instrument contract exceed the obligations of the Company. The Company also minimizes exposure to credit risk by dealing with a diversified group of major financial institutions. The Company continually evaluates its accounts receivables for potential collection risks particularly those resulting from sales to government-owned or government-supported healthcare facilities in certain countries as payment may be dependent upon the financial stability and creditworthiness of those countries’ national economies. The Company continually evaluates all governmental receivables for potential collection risks associated with the availability of government funding and reimbursement practices. The Company believes the current reserves related to all governmental receivables are adequate and that this concentration of credit risk will not have a material adverse impact on its financial position or liquidity. |
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Stockholders' Equity Note [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in Certain Components of Shareholders' Equity | Changes in certain components of shareholders’ equity were as follows:
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Accumulated Other Comprehensive (Loss) Income | The components and changes of Accumulated other comprehensive income (loss) were as follows:
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Other Comprehensive Income (Loss), Tax | The tax impacts for amounts recognized in other comprehensive income before reclassifications were as follows:
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Earnings per Share (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Weighted Average Common Shares Used in Computations of Basic and Diluted Earnings Per Share | The weighted average common shares used in the computations of basic and diluted earnings per share (shares in thousands) for the years ended September 30 were as follows:
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Segment Data (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Information for Company's Segments |
(a)The Company has no material intersegment revenues. (b)Prior-year amounts have been reclassified to reflect the movement of certain product offerings previously reported in the Medical segment and which are now reported in the Interventional segment, as further discussed above. Accordingly, all amounts presented in 2017 and 2016 for the Interventional segment are associated with these products. (c)The amounts in 2018 included expense related to the recognition of a $478 million fair value step-up adjustment related to Bard's inventory on the acquisition date. The step-up adjustments recognized by the Medical and Interventional segments in 2018 were $60 million and $418 million, respectively. (d)The amount in 2018 included $58 million of charges to write down the value of fixed assets primarily in the Diabetes Care unit. (e)The amount in 2018 included $81 million of charges recorded to write down the carrying value of certain intangible and other assets in the Biosciences unit. (f)The amounts in 2018, 2017 and 2016 comprised of foreign exchange, corporate expenses, and share-based compensation expense. Results in 2018 were impacted by the Company's change in its management reporting approach, as further discussed above. Results in 2017 included a $748 million non-cash charge resulting from a modification to the Company's dispensing equipment lease contracts with customers, as well as the reversal of certain litigation reserves as further discussed in Note 5. (g)Includes cash and investments and corporate assets. |
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Revenues to Unaffiliated Customers and Long-lived Assets Including Property, Plant and Equipment | Revenues to unaffiliated customers are generally based upon the source of the product shipment. Long-lived assets, which include net property, plant and equipment, are based upon physical location.
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Share-Based Compensation (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Compensation Cost Relating to Share-Based Payments | The amounts and location of compensation cost relating to share-based payments included in the consolidated statements of income is as follows:
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Assumptions for Estimation of Fair Values of Stock Appreciation Rights Granted During Reporting Periods | The fair value was estimated on the date of grant using a lattice-based binomial option valuation model that uses the following weighted-average assumptions:
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Summary of SARs Outstanding | A summary of SARs outstanding as of September 30, 2018 and changes during the year then ended is as follows:
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Schedule Of Share Based Compensation, Summary of Stock Appreciation Rights Exercised [Table Text Block] | A summary of SARs exercised 2018, 2017 and 2016 is as follows:
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Summary of Performance-Based Restricted Stock Units Outstanding | A summary of restricted stock units outstanding as of September 30, 2018 and changes during the year then ended is as follows:
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Schedule Of Share Based Compensation, Restricted Stock Units, Grant Date Fair Value of Units Granted [Table Text Block] | The weighted average grant date fair value of restricted stock units granted during the years 2018, 2017 and 2016 are as follows:
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Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity [Table Text Block] | The total fair value of stock units vested during 2018, 2017 and 2016 was as follows:
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Benefit Plans (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Pension and Other Postretirement Cost | Net pension cost for the years ended September 30 included the following components:
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Change in Benefit Obligation, Change in Fair Value of Plan Assets | The change in benefit obligation, change in fair value of pension plan assets, funded status and amounts recognized in the Consolidated Balance Sheets for these plans were as follows:
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Pension Plans with Accumulated Benefit Obligations | Pension plans with accumulated benefit obligations in excess of plan assets and plans with projected benefit obligations in excess of plan assets consist of the following at September 30:
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Weighted Average Assumptions Determining Pension Plan | The weighted average assumptions used in determining pension plan information were as follows:
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Expected Benefit Payments | Expected benefit payments are as follows:
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Fair Value Measurements of U.S. Plan Assets | The following table provides the fair value measurements of U.S. plan assets, as well as the measurement techniques and inputs utilized to measure fair value of these assets, at September 30, 2018 and 2017. The categorization of fund investments is based upon the categorization of these funds’ underlying assets.
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Fair Value Measurements of Foreign Plan Assets | The following table provides the fair value measurements of international plan assets, as well as the measurement techniques and inputs utilized to measure fair value of these assets, at September 30, 2018 and 2017.
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Pension Plans | Foreign Plans | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in Fair Value Pension Assets Measured Using Level 3 Inputs | The following table summarizes the changes, for the years ended September 30, 2018 and 2017, in the fair value of international pension assets measured using Level 3 inputs:
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Acquisitions (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Business Acquisition By Acquisition Fair Value Of Consideration Transferred Table | The acquisition-date fair value of consideration transferred consisted of the components below. The fair value of the shares and equity awards issued as consideration was recognized as a $6.5 billion increase to Capital in excess of par value and a $2.1 billion decrease to Common stock in treasury.
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Schedule of Business Acquisitions by Acquisition, Equity Interest Issued or Issuable | The acquisition-date fair value of the Company’s ordinary shares issued to Bard shareholders was calculated per the following (shares in millions):
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Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The preliminary allocations of the purchase price below provide a reasonable basis for estimating the fair values of assets acquired and liabilities assumed. These provisional estimates will be adjusted upon the availability of further information regarding events or circumstances which existed at the acquisition date and such adjustments may be significant. The assets acquired and liabilities assumed in this acquisition, as recorded in the Company's consolidated balance sheet at September 30, 2018, were largely allocated to the Company's new Interventional segment.
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Business Acquisition, Pro Forma Information | The following table provides the pro forma results for the fiscal years 2018 and 2017 as if Bard had been acquired as of October 1, 2016.
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Business Restructuring Charges Business Restructuring Charges (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Restructuring Accrual Activity | Restructuring liability activity in 2018, 2017 and 2016 was as follows:
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Intangible Assets (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Intangible Assets | Intangible assets at September 30 consisted of:
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Reconciliation of Goodwill by Business Segment | The following is a reconciliation of goodwill by business segment:
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Debt (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Short-Term Debt | Short-term debt at September 30 consisted of:
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Summary of Long-Term Debt | The aggregate principal amounts of Bard notes which were validly tendered for notes issued by the Company are provided below.
Long-Term Debt at September 30 consisted of:
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Summary of Interest Costs and Payments | A summary of interest costs and payments for the years ended September 30 is as follows:
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Income Taxes (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Provision for Income Taxes from Continuing Operations | The provision for income taxes the years ended September 30 consisted of:
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Components of Income from Continuing Operations Before Income Taxes | The components of Income Before Income Taxes for the years ended September 30 consisted of:
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Summary of Gross Amounts of Unrecognized Tax Benefits | The 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 certain audits will close within the next twelve months but no significant increases or decreases in the amount of the unrecognized tax benefits are expected to result.
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Deferred Income Taxes | Deferred income taxes at September 30 consisted of:
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Reconciliation of Federal Statutory Tax Rate to Company's Effective Tax Rate | A reconciliation of the federal statutory tax rate to the Company’s effective income tax rate was as follows:
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Supplemental Financial Information (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Other Nonoperating Income (Expense) | Other Income (Expense), Net
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Trade Receivables, Allowances for Doubtful Accounts and Cash Discounts | The amounts recognized in 2018, 2017 and 2016 relating to allowances for doubtful accounts and cash discounts, which are netted against trade receivables, are provided in the following table:
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Inventories | Inventories at September 30 consisted of:
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Property, Plant and Equipment, Net | Property, Plant and Equipment, Net at September 30 consisted of:
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Supplementary Data (Unaudited) (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Quarterly Financial Information | SUPPLEMENTARY QUARTERLY DATA (UNAUDITED)
|
Shareholders' Equity - Changes in Certain Components of Shareholders' Equity (Detail II) - $ / shares |
12 Months Ended | ||
---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Stockholders' Equity Note [Abstract] | |||
Common stock dividend per share (USD per share) | $ 3.00 | $ 2.92 | $ 2.64 |
Shareholders' Equity - Other Comprehensive Income (Loss), Tax (Detail) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Stockholders' Equity Note [Abstract] | |||
Income tax (provision) benefit for net gains (losses) recorded in other comprehensive income | $ (19) | $ (60) | $ 79 |
Earnings per Share - Weighted Average Common Shares Used in Computations of Basic and Diluted Earnings Per Share (Detail) - shares shares in Thousands |
12 Months Ended | ||
---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Earnings Per Share [Abstract] | |||
Average common shares outstanding (shares) | 258,354 | 218,943 | 212,702 |
Dilutive share equivalents from share-based plans (shares) | 6,267 | 4,645 | 4,834 |
Average common and common equivalent shares outstanding - assuming dilution (shares) | 264,621 | 223,588 | 217,536 |
Earnings per Share - Weighted Average Common Shares Used in Computations of Basic and Diluted Earnings Per Share Footnotes (Detail) - shares |
12 Months Ended | ||
---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 0 | 0 | 0 |
Convertible Preferred Stock [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 12,000,000 | 5,000,000 |
Segment Data - Revenues to Unaffiliated Customers and Long-lived Assets Including Property, Plant and Equipment (Detail) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2018 |
Jun. 30, 2018 |
Mar. 31, 2018 |
Dec. 31, 2017 |
Sep. 30, 2017 |
Jun. 30, 2017 |
Mar. 31, 2017 |
Dec. 31, 2016 |
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenues | $ 4,402 | $ 4,278 | $ 4,222 | $ 3,080 | $ 3,166 | $ 3,035 | $ 2,969 | $ 2,922 | $ 15,983 | $ 12,093 | $ 12,483 |
Long-Lived Assets | 46,494 | 19,101 | 46,494 | 19,101 | 19,220 | ||||||
Corporate | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Long-Lived Assets | 375 | 366 | 375 | 366 | 329 | ||||||
United States | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenues | 8,768 | 6,504 | 6,893 | ||||||||
Long-Lived Assets | 38,982 | 13,151 | 38,982 | 13,151 | 14,075 | ||||||
Europe | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenues | 3,298 | 2,588 | 2,674 | ||||||||
Long-Lived Assets | 5,640 | 4,421 | 5,640 | 4,421 | 3,747 | ||||||
Greater Asia | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenues | 2,460 | 1,744 | 1,692 | ||||||||
Long-Lived Assets | 851 | 578 | 851 | 578 | 586 | ||||||
Other | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenues | 1,457 | 1,257 | 1,225 | ||||||||
Long-Lived Assets | $ 645 | $ 584 | $ 645 | $ 584 | $ 483 |
Share-Based Compensation - Assumptions for Estimation of Fair Values of Stock Appreciation Rights Granted During Reporting Periods (Detail) - Stock Appreciation Rights (SARs) - $ / shares |
12 Months Ended | ||
---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Risk-free interest rate | 2.32% | 2.33% | 2.17% |
Expected volatility | 19.00% | 20.00% | 19.00% |
Expected dividend yield | 1.33% | 1.71% | 1.76% |
Expected life | 7 years 5 months | 7 years 6 months 12 days | 7 years 7 months 9 days |
Fair value derived (USD per share) | $ 46.10 | $ 33.81 | $ 27.69 |
Share-Based Compensation Summary of SARs Exercised (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Total intrinsic value of SARs exercised | $ 333 | $ 148 | $ 148 |
Share Based Compensation Tax Benefit Realized From Exercise Of Stock Appreciation Rights | 90 | 53 | 52 |
Total fair value of SARs vested | $ 107 | $ 30 | $ 24 |
Share-Based Compensation - Summary of Performance-Based Restricted Stock Units Outstanding Footnote (Detail) shares in Thousands |
12 Months Ended |
---|---|
Sep. 30, 2018
shares
| |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Percentage of target payout on which performance-based restricted stock units are based | 200.00% |
Expected forfeited performance-based restricted stock units (shares) | 64 |
Units in excess of the expected performance payout (shares) | 420 |
Share-Based Compensation Weighted Average Grant Date Fair Value of Restricted Stock Units (Details) - $ / shares |
12 Months Ended | ||
---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Performance-Based Restricted Stock Units | |||
Schedule Of Share Based Compensation, Restricted Stock Units Award, Grant Date Fair Value of Units Granted [Line Items] | |||
Granted, stock units weighted average grant date fair value (USD per share) | $ 251.75 | $ 174.92 | $ 153.73 |
Time-Vested Restricted Stock Units | |||
Schedule Of Share Based Compensation, Restricted Stock Units Award, Grant Date Fair Value of Units Granted [Line Items] | |||
Granted, stock units weighted average grant date fair value (USD per share) | $ 216.06 | $ 165.96 | $ 145.57 |
Share-Based Compensation Fair Value of Stock Units Vested (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Performance-Based Restricted Stock Units | |||
Schedule Of Share Based Compensation, Restricted Stock Units, Fair Value of Stock Units Vested [Line Items] | |||
Total fair value of restricted stock units | $ 31 | $ 32 | $ 22 |
Time-Vested Restricted Stock Units | |||
Schedule Of Share Based Compensation, Restricted Stock Units, Fair Value of Stock Units Vested [Line Items] | |||
Total fair value of restricted stock units | $ 362 | $ 139 | $ 114 |
Benefit Plans - Net Pension and Other Postretirement Cost (Detail) - Pension Plans - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Defined Benefit Plan Disclosure [Line Items] | |||
Service cost | $ 136 | $ 110 | $ 81 |
Interest cost | 90 | 61 | 72 |
Expected return on plan assets | (154) | (112) | (109) |
Amortization of prior service credit | (13) | (14) | (15) |
Amortization of loss | 78 | 92 | 77 |
Settlements | 2 | 0 | 7 |
Net pension cost | 137 | 138 | 113 |
Foreign Plans | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Net pension cost | $ 34 | $ 43 | $ 35 |
Benefit Plans - Pension Plans with Accumulated Benefit Obligations (Detail) - USD ($) $ in Millions |
Sep. 30, 2018 |
Sep. 30, 2017 |
---|---|---|
Retirement Benefits [Abstract] | ||
Accumulated benefit obligation exceeds the fair value of plan assets, projected benefit obligation | $ 2,618 | $ 2,551 |
Accumulated benefit obligation exceeds the fair value of plan assets, accumulated benefit obligation | 2,533 | 2,470 |
Accumulated benefit obligation exceeds the fair value of plan assets, fair value of plan assets | 2,012 | 1,833 |
Projected benefit obligation exceeds the fair value of plan assets, projected benefit obligation | 3,121 | 2,613 |
Projected benefit obligation exceeds the fair value of plan assets, fair value of plan assets | $ 2,502 | $ 1,889 |
Benefit Plans - Weighted Average Assumptions Determining Pension Plan (Detail) - Pension Plans |
12 Months Ended | ||
---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
U.S. Plans | |||
Net Cost | |||
Discount rate | 3.71% | 3.42% | 4.15% |
Expected return on plan assets | 7.20% | 7.25% | 7.50% |
Rate of compensation increase | 4.51% | 4.25% | 4.25% |
Benefit Obligation | |||
Discount rate | 4.26% | 3.72% | 3.42% |
Rate of compensation increase | 4.29% | 4.51% | 4.25% |
Foreign Plans | |||
Net Cost | |||
Discount rate | 2.30% | 1.70% | 2.84% |
Expected return on plan assets | 4.95% | 4.65% | 5.02% |
Rate of compensation increase | 2.31% | 2.33% | 2.33% |
Benefit Obligation | |||
Discount rate | 2.30% | 2.25% | 1.70% |
Rate of compensation increase | 2.36% | 2.30% | 2.33% |
Benefit Plans - Expected Benefit Payments (Detail) $ in Millions |
Sep. 30, 2018
USD ($)
|
---|---|
Pension Plans | |
Defined Benefit Plan Disclosure [Line Items] | |
2019 | $ 213 |
2020 | 202 |
2021 | 208 |
2022 | 209 |
2023 | 214 |
2024-2028 | 1,096 |
Other Postretirement Benefits | |
Defined Benefit Plan Disclosure [Line Items] | |
2019 | 14 |
2020 | 14 |
2021 | 13 |
2022 | 13 |
2023 | 12 |
2024-2028 | $ 54 |
Acquisitions - Fair Value of Consideration Transferred (Detail) - USD ($) $ in Millions |
12 Months Ended | |||
---|---|---|---|---|
Dec. 29, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Business Acquisition [Line Items] | ||||
Noncash consideration-fair value of shares issued | $ 8,004 | $ 0 | $ 0 | |
Noncash consideration-fair value of stock options and other equity awards | $ 613 | $ 0 | $ 0 | |
CR Bard Inc [Member] | ||||
Business Acquisition [Line Items] | ||||
Cash consideration | $ 16,400 | |||
Noncash consideration-fair value of shares issued | 8,004 | |||
Noncash consideration-fair value of stock options and other equity awards | 613 | |||
Total consideration transferred | $ 25,017 |
Acquisitions Acquisition - Fair Value of Company's Ordinary Shares Issued (Details) - USD ($) $ / shares in Units, $ in Millions |
12 Months Ended | |||
---|---|---|---|---|
Dec. 29, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Business Acquisition [Line Items] | ||||
Fair value of the Company’s issued shares | $ 8,004 | $ 0 | $ 0 | |
CR Bard Inc [Member] | ||||
Business Acquisition [Line Items] | ||||
Total Bard shares outstanding | 73,359,000 | |||
Conversion factor | 0.5077 | |||
Conversion of Bard shares outstanding | 37,243,000 | |||
Conversion of pre-acquisition equity awards | 104,000 | |||
Total number of the Company's share issued | 37,347,000 | |||
Closing price of the Company’s stock | $ 214.32 | |||
Fair value of the Company’s issued shares | $ 8,004 |
Acquisitions Fair Value of Assets and Liabilities Assumed (Details) - USD ($) $ in Millions |
Dec. 29, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2016 |
---|---|---|---|---|
Business Acquisition [Line Items] | ||||
Goodwill | $ 23,600 | $ 7,563 | $ 7,419 | |
CR Bard Inc [Member] | ||||
Business Acquisition [Line Items] | ||||
Cash and equivalents | $ 1,480 | |||
Trade receivables | 472 | |||
Inventories | 974 | |||
Property, plant and equipment | 553 | |||
Developed technology | 10,469 | |||
Customer relationships | 1,146 | |||
Other assets | 624 | |||
Total identifiable assets acquired | 15,718 | |||
Payables, accrued expenses and other liabilities | 1,276 | |||
Short term and long-term debt | 1,692 | |||
Product liability and other legal reserves | 2,029 | |||
Deferred tax liabilities | 1,713 | |||
Total liabilities assumed | 6,711 | |||
Net identifiable assets acquired | 9,007 | |||
Goodwill | 16,009 | |||
Net assets acquired | $ 25,017 |
Acquisitions - Summary of Pro Forma Results (Detail) - CR Bard Inc [Member] - USD ($) $ / shares in Units, $ in Millions |
12 Months Ended | |
---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Business Acquisition [Line Items] | ||
Revenues | $ 16,947 | $ 15,781 |
Net Income | $ 390 | $ 1,145 |
Diluted Earnings per Share (USD per share) | $ 0.90 | $ 3.60 |
Business Restructuring Charges Business Restructuring Charges - Changes in Restructuring Balance Footnote (Detail) $ in Millions |
12 Months Ended |
---|---|
Sep. 30, 2016
USD ($)
| |
Restructuring Cost and Reserve [Line Items] | |
Capitalized Computer Software, Impairments | $ 214 |
Respiratory Solutions | Disposal Group, Held-for-sale, Not Discontinued Operations | |
Restructuring Cost and Reserve [Line Items] | |
Gain (Loss) on Disposition of Business | (81) |
IT Restructuring | |
Restructuring Cost and Reserve [Line Items] | |
Change in workforce related costs | 13 |
Care Fusion Corporation | |
Restructuring Cost and Reserve [Line Items] | |
Change in workforce related costs | $ 40 |
Intangible Assets - Additional Information (Detail) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Intangible amortization expense | $ 1,255 | $ 533 | $ 552 |
Estimated aggregate amortization expense in 2019 | 1,472 | ||
Estimated aggregate amortization expense in 2020 | 1,350 | ||
Estimated aggregate amortization expense in 2021 | 1,347 | ||
Estimated aggregate amortization expense in 2022 | 1,338 | ||
Estimated aggregate amortization expense in 2023 | $ 1,333 |
Debt - Summary of Short-Term Debt (Detail) - USD ($) $ in Millions |
Sep. 30, 2018 |
Mar. 31, 2018 |
Sep. 30, 2017 |
Jun. 30, 2017 |
---|---|---|---|---|
Short-term Debt [Line Items] | ||||
Other Short-term Borrowings | $ 10 | $ 3 | ||
Short-term debt | $ 2,601 | 203 | ||
2.133% Notes due June 6, 2019 | ||||
Short-term Debt [Line Items] | ||||
Interest rate | 2.133% | |||
Current portion of long-term debt | $ 724 | 0 | ||
0.368% Notes due June 6, 2019 | ||||
Short-term Debt [Line Items] | ||||
Interest rate | 0.368% | 0.368% | 0.368% | |
Current portion of long-term debt | $ 1,157 | 0 | ||
4.900% Notes due April 15, 2018 | ||||
Short-term Debt [Line Items] | ||||
Interest rate | 4.90% | |||
Current portion of long-term debt | $ 0 | 200 | ||
Term Loan Facility due September 5, 2019 [Member] | ||||
Short-term Debt [Line Items] | ||||
Short-term Debt | $ 710 | $ 0 |
Debt - Summary of Interest Costs and Payments (Detail) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Debt Disclosure [Abstract] | |||
Charged to operations | $ 706 | $ 521 | $ 388 |
Capitalized | 42 | 32 | 30 |
Total interest costs | 748 | 553 | 418 |
Interest paid, net of amounts capitalized | $ 674 | $ 435 | $ 392 |
Income Taxes - Provision for Income Taxes from Continuing Operations (Detail) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Income Tax Disclosure [Abstract] | |||
Federal | $ 665 | $ (230) | $ 312 |
State and local, including Puerto Rico | 73 | (20) | 17 |
Foreign | 387 | 200 | 286 |
Total, Current | 1,124 | (50) | 616 |
Domestic | (201) | (64) | (441) |
Foreign | (61) | (10) | (78) |
Total, Deferred | (262) | (74) | (519) |
Income tax provision | $ 862 | $ (124) | $ 97 |
Income Taxes - Components of Income from Continuing Operations Before Income Taxes (Detail) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Income Tax Disclosure [Abstract] | |||
Domestic, including Puerto Rico | $ (135) | $ (386) | $ (232) |
Foreign | 1,308 | 1,362 | 1,306 |
Income Before Income Taxes | $ 1,173 | $ 976 | $ 1,074 |
Income Taxes - Summary of Gross Amounts of Unrecognized Tax Benefits (Detail) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Balance at October 1 | $ 349 | $ 469 | $ 593 |
Increase due to acquisitions | 140 | 0 | 0 |
Increase due to current year tax positions | 43 | 41 | 81 |
Increase due to prior year tax positions | 43 | 19 | 10 |
Decreases due to prior year tax positions | 0 | (30) | (3) |
Decrease due to settlements with tax authorities | (29) | (145) | (147) |
Decrease due to lapse of statute of limitations | (3) | (5) | (65) |
Balance at September 30 | $ 543 | $ 349 | $ 469 |
Income Taxes - Deferred Income Taxes (Detail) - USD ($) $ in Millions |
Sep. 30, 2018 |
Sep. 30, 2017 |
---|---|---|
Income Tax Disclosure [Abstract] | ||
Compensation and benefits, assets | $ 458 | $ 618 |
Loss and credit carryforwards, assets | 1,290 | 1,098 |
Other, assets | 707 | 531 |
Deferred income taxes, assets, gross | 2,455 | 2,247 |
Valuation allowance, assets | (1,181) | (1,032) |
Deferred income taxes, assets | 1,275 | 1,216 |
Property and equipment, liabilities | 253 | 244 |
Deferred Tax Liabilities, Other Finite-Lived Assets | 2,948 | 1,584 |
Other, liabilities | 384 | 164 |
Deferred income taxes, liabilities, gross | 3,585 | 1,992 |
Deferred income taxes, liabilities | $ 3,585 | $ 1,992 |
Sale-Type Leases and Financing Receivables Sales-Type Leases and Financing Receivables - Additional Information (Detail) - USD ($) $ in Millions |
9 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Receivables [Abstract] | ||||
Lessor, Sales-Type Lease, Contract Term | 5 years | |||
Lease Contract Modification Related Charge | $ 0 | $ 748 | $ 0 |
Supplemental Financial Information - Other Income (Expense), Net (Detail) - USD ($) $ in Millions |
1 Months Ended | 3 Months Ended | 12 Months Ended | ||||
---|---|---|---|---|---|---|---|
Jun. 30, 2017 |
Dec. 31, 2016 |
Jun. 30, 2018 |
Mar. 31, 2018 |
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Losses on debt extinguishment | $ 31 | $ 42 | $ 3 | $ 13 | $ (16) | $ (73) | $ 0 |
Income (Loss) from Equity Method Investments | 8 | 3 | 8 | ||||
Losses on undesignated foreign exchange derivatives, net | (14) | (11) | (3) | ||||
Royalty Income, Nonoperating | 51 | 0 | 0 | ||||
Gains on previously held investments | 0 | 24 | 0 | ||||
Other | 0 | 3 | 7 | ||||
Other income (expense), net | 318 | (57) | 11 | ||||
Vyaire Medical [Member] | |||||||
Income (Loss) from Equity Method Investments | $ 288 | $ (3) | $ 0 |
Supplemental Financial Information - Additional Information (Detail) - CR Bard Inc [Member] $ in Millions |
Dec. 29, 2017
USD ($)
|
---|---|
Condensed Income Statements, Captions [Line Items] | |
Inventories | $ 974 |
Property, plant and equipment | $ 553 |
Supplemental Financial Information - Trade Receivables, Allowances for Doubtful Accounts and Cash Discounts (Detail) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Beginning Balance | $ 58 | $ 67 | $ 62 |
Additions charged to costs and expenses | 89 | 68 | 60 |
Deductions and other | (61) | (76) | (55) |
Ending Balance | 86 | 58 | 67 |
Allowance for Doubtful Accounts | |||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Beginning Balance | 54 | 61 | 53 |
Additions charged to costs and expenses | 31 | 25 | 23 |
Deductions and other | (11) | (32) | (14) |
Ending Balance | 75 | 54 | 61 |
Allowance for Cash Discounts | |||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Beginning Balance | 4 | 6 | 9 |
Additions charged to costs and expenses | 58 | 43 | 37 |
Deductions and other | (50) | (45) | (40) |
Ending Balance | $ 12 | $ 4 | $ 6 |
Supplemental Financial Information - Inventories (Detail) - USD ($) $ in Millions |
Sep. 30, 2018 |
Sep. 30, 2017 |
---|---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Materials | $ 510 | $ 313 |
Work in process | 297 | 271 |
Finished products | 1,644 | 1,234 |
Inventories | $ 2,451 | $ 1,818 |
Supplemental Financial Information - Property, Plant and Equipment, Net (Detail) - USD ($) $ in Millions |
Sep. 30, 2018 |
Sep. 30, 2017 |
---|---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Land | $ 173 | $ 146 |
Buildings | 2,724 | 2,496 |
Machinery, equipment and fixtures | 7,405 | 6,584 |
Leasehold improvements | 182 | 163 |
Property, Plant and Equipment, gross | 10,485 | 9,389 |
Less accumulated depreciation and amortization | 5,111 | 4,752 |
Property, Plant and Equipment, Net | $ 5,375 | $ 4,638 |
Supplementary Data (Unaudited) - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2018 |
Jun. 30, 2018 |
Mar. 31, 2018 |
Dec. 31, 2017 |
Sep. 30, 2017 |
Jun. 30, 2017 |
Mar. 31, 2017 |
Dec. 31, 2016 |
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Revenues | $ 4,402 | $ 4,278 | $ 4,222 | $ 3,080 | $ 3,166 | $ 3,035 | $ 2,969 | $ 2,922 | $ 15,983 | $ 12,093 | $ 12,483 |
Gross Profit | 2,091 | 2,017 | 1,604 | 1,550 | 1,554 | 1,504 | 1,432 | 1,452 | 7,262 | 5,942 | |
Net Income | $ (135) | $ 594 | $ (12) | $ (136) | $ 327 | $ (132) | $ 344 | $ 562 | $ 311 | $ 1,100 | $ 976 |
Earnings (loss) per Share: (a) | |||||||||||
Basic Earnings per Share (USD per share) | $ (0.64) | $ 2.08 | $ (0.19) | $ (0.76) | $ 1.27 | $ (0.75) | $ 1.61 | $ 2.64 | $ 0.62 | $ 4.70 | $ 4.59 |
Diluted Earnings per Share (USD per share) | $ (0.64) | $ 2.03 | $ (0.19) | $ (0.76) | $ 1.24 | $ (0.75) | $ 1.58 | $ 2.58 | $ 0.60 | $ 4.60 | $ 4.49 |
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