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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2021
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                      to                     
Commission file number 001-4802
Becton, Dickinson and Company
(Exact name of registrant as specified in its charter)
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
07417-1880
(201)847-6800
(Address of principal executive offices) (Zip Code)(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each ClassTrading SymbolName of Each Exchange on Which Registered
Common stock, par value $1.00BDXNew York Stock Exchange
Depositary Shares, each representing a 1/20th interest in a share of 6.00% Mandatory Convertible Preferred Stock, Series BBDXBNew York Stock Exchange
1.000% Notes due December 15, 2022BDX22ANew York Stock Exchange
1.900% Notes due December 15, 2026BDX26New York Stock Exchange
1.401% Notes due May 24, 2023BDX23ANew York Stock Exchange
3.020% Notes due May 24, 2025BDX25New York Stock Exchange
0.632% Notes due June 4, 2023BDX/23ANew York Stock Exchange
1.208% Notes due June 4, 2026BDX/26ANew York Stock Exchange
1.213% Notes due February 12, 2036BDX/36New York Stock Exchange
    Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐
    Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No   ☐
    Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of large accelerated filer, accelerated filer, smaller reporting company, and emerging growth company in Rule 12b-2 of the Exchange Act.
Large accelerated filer 
  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.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  ☒
There were 287,190,180 shares of Common Stock, $1.00 par value, outstanding at June 30, 2021.


BECTON, DICKINSON AND COMPANY
FORM 10-Q
For the quarterly period ended June 30, 2021
TABLE OF CONTENTS
  
Page
Number
Part I.FINANCIAL INFORMATION
Item 1.
Item 2.
Item 3.
Item 4.
Part II.
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.
2


ITEM 1. FINANCIAL STATEMENTS
BECTON, DICKINSON AND COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
Millions of dollars
June 30,
2021
September 30,
2020
Assets(Unaudited)
Current Assets:
Cash and equivalents$3,153 $2,825 
Restricted cash128 92 
Short-term investments24 20 
Trade receivables, net2,078 2,398 
Inventories:
Materials636 602 
Work in process388 335 
Finished products1,922 1,806 
2,947 2,743 
Prepaid expenses and other1,207 891 
Total Current Assets9,538 8,969 
Property, Plant and Equipment12,651 11,919 
Less allowances for depreciation and amortization6,487 5,996 
Property, Plant and Equipment, Net6,164 5,923 
Goodwill23,814 23,620 
Developed Technology, Net9,541 10,146 
Customer Relationships, Net2,899 3,107 
Other Intangibles, Net557 560 
Other Assets1,821 1,687 
Total Assets$54,333 $54,012 
Liabilities and Shareholders’ Equity
Current Liabilities:
Short-term debt$2,033 $707 
Payables, accrued expenses and other current liabilities5,716 5,129 
Total Current Liabilities7,749 5,836 
Long-Term Debt15,700 17,224 
Long-Term Employee Benefit Obligations1,421 1,435 
Deferred Income Taxes and Other Liabilities5,329 5,753 
Commitments and Contingencies (See Note 5)
Shareholders’ Equity
Preferred stock2 2 
Common stock365 365 
Capital in excess of par value19,282 19,270 
Retained earnings13,821 12,791 
Deferred compensation23 23 
Common stock in treasury - at cost(7,027)(6,138)
Accumulated other comprehensive loss(2,330)(2,548)
Total Shareholders’ Equity24,135 23,765 
Total Liabilities and Shareholders’ Equity$54,333 $54,012 
Amounts may not add due to rounding.
See notes to condensed consolidated financial statements
3


BECTON, DICKINSON AND COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Millions of dollars, except per share data
(Unaudited)
 Three Months Ended
June 30,
Nine Months Ended
June 30,
 2021202020212020
Revenues$4,890 $3,855 $15,113 $12,333 
Cost of products sold2,729 2,195 7,973 6,962 
Selling and administrative expense1,237 980 3,535 3,126 
Research and development expense344 262 952 797 
Acquisitions and other restructurings24 74 126 235 
Other operating (income) expense, net(72)(15)224 (15)
Total Operating Costs and Expenses4,262 3,497 12,809 11,104 
Operating Income628 358 2,304 1,229 
Interest expense(115)(135)(358)(405)
Interest income2 2 7 5 
Other (expense) income, net(1)23 23 12 
Income Before Income Taxes514 248 1,976 842 
Income tax (benefit) provision(11)(38)149 96 
Net Income525 286 1,827 746 
Preferred stock dividends(23)(9)(68)(84)
Net income applicable to common shareholders$502 $277 $1,760 $662 
Basic Earnings per Share$1.73 $0.98 $6.06 $2.41 
Diluted Earnings per Share$1.72 $0.97 $6.00 $2.38 
Dividends per Common Share$0.83 $0.79 $2.49 $2.37 
Amounts may not add due to rounding.
See notes to condensed consolidated financial statements
4


BECTON, DICKINSON AND COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Millions of dollars
(Unaudited)
 Three Months Ended
June 30,
Nine Months Ended
June 30,
 2021202020212020
Net Income$525 $286 $1,827 $746 
Other Comprehensive Income (Loss), Net of Tax
Foreign currency translation adjustments19 34 68 (66)
Defined benefit pension and postretirement plans14 17 72 50 
Cash flow hedges(34)2 78 (68)
Other Comprehensive (Loss) Income, Net of Tax(1)53 218 (83)
Comprehensive Income$524 $338 $2,045 $663 
Amounts may not add due to rounding.
See notes to condensed consolidated financial statements
5


BECTON, DICKINSON AND COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Millions of dollars
(Unaudited)
 Nine Months Ended
June 30,
 20212020
Operating Activities
Net income $1,827 $746 
Adjustments to net income to derive net cash provided by operating activities:
Depreciation and amortization1,681 1,601 
Share-based compensation189 193 
Deferred income taxes(95)(203)
Change in operating assets and liabilities158 (248)
Pension obligation52 77 
Product liability-related charge296  
Other, net(411)(107)
Net Cash Provided by Operating Activities3,696 2,058 
Investing Activities
Capital expenditures(766)(597)
Acquisitions, net of cash acquired(283)(139)
Other, net(137)(169)
Net Cash Used for Investing Activities(1,186)(905)
Financing Activities
Change in credit facility borrowings (485)
Proceeds from long-term debt and term loans1,715 3,389 
Payments of debt and term loans(1,999)(3,711)
Proceeds from issuance of equity securities 2,917 
Repurchases of common stock(1,000) 
Dividends paid(789)(773)
Other, net(91)(106)
Net Cash (Used for) Provided by Financing Activities(2,164)1,230 
Effect of exchange rate changes on cash and equivalents and restricted cash18 (9)
Net increase in cash and equivalents and restricted cash365 2,374 
Opening Cash and Equivalents and Restricted Cash2,917 590 
Closing Cash and Equivalents and Restricted Cash$3,282 $2,964 
Amounts may not add due to rounding.
See notes to condensed consolidated financial statements
6


BECTON, DICKINSON AND COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2021
Note 1 – Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and, in the opinion of the management of Becton, Dickinson and Company (the "Company" or "BD"), include all adjustments which are of a normal recurring nature, necessary for a fair presentation of the financial position and the results of operations and cash flows for the periods presented. However, the financial statements do not include all information and accompanying notes required for a presentation in accordance with U.S. generally accepted accounting principles ("U.S. GAAP"). These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s 2020 Annual Report on Form 10-K. 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. The results of operations for the interim periods are not necessarily indicative of the results of operations to be expected for the full year.
BD’s Intention to Spin Off Diabetes Care
On May 6, 2021, the Company announced its intention to spin off its Diabetes Care business as a separate publicly traded company to BD’s shareholders. The proposed spin-off is intended to be a tax-free transaction for U.S. federal income tax purposes and is expected to be completed in the first half of calendar year 2022, subject to the satisfaction of customary conditions, including final approval from BD’s Board of Directors and the effectiveness of a registration statement on Form 10.
Note 2 – Accounting Changes
New Accounting Principle Adopted
In June 2016, the Financial Accounting Standards Board issued a new accounting standard which requires earlier recognition of credit losses on loans and other financial instruments held by entities, including trade receivables. The new standard requires entities to measure all expected credit losses for financial assets held at each reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. The Company’s adoption of this accounting standard on October 1, 2020, using the modified retrospective method, did not have a material impact on the Company's condensed consolidated financial statements.
7


Note 3 – Shareholders' Equity
Changes in certain components of shareholders' equity for the first three quarters of fiscal years 2021 and 2020 were as follows:
 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, 2020$365 $19,270 $12,791 $23 (74,623)$(6,138)
Net income— — 1,003 — — — 
Common dividends ($0.83 per share)
— — (242)— — — 
Preferred dividends— — (23)— — — 
Common stock issued for share-based compensation and other plans, net— (53)— — 549 2 
Share-based compensation— 83 — — — — 
Common stock held in trusts, net (a)— — — — (7)— 
Effect of change in accounting principles (see Note 2)— — (9)— — — 
Balance at December 31, 2020$365 $19,301 $13,522 $23 (74,080)$(6,136)
Net income— — 299 — — — 
Common dividends ($0.83 per share)
— — (242)— — — 
Preferred dividends— — (23)— — — 
Common stock issued for share-based compensation and other plans, net— (15)— — 234 4 
Share-based compensation— 55 — — — — 
Common stock held in trusts, net (a)— — — — 23 — 
Balance at March 31, 2021$365 $19,341 $13,557 $23 (73,821)$(6,132)
Net income— — 525 — — — 
Common dividends ($0.83 per share)
— — (239)— — — 
Preferred dividends— — (23)— — — 
Common stock issued for share-based compensation and other plans, net— (9)— — 87 5 
Share-based compensation— 50 — — — — 
Common stock held in trusts, net (a)— — — — 8 — 
Repurchase of common stock— (100)— — (3,724)(900)
Balance at June 30, 2021$365 $19,282 $13,821 $23 (77,450)$(7,027)
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 Common
Stock  Issued
at Par Value
Capital in
Excess of
Par Value
Retained
Earnings
Deferred
Compensation
Treasury Stock
(Millions of dollars)Shares (in
thousands)
Amount
Balance at September 30, 2019$347 $16,270 $12,913 $23 (76,260)$(6,190)
Net income— — 278 — — — 
Common dividends ($0.79 per share)
— — (215)— — — 
Preferred dividends— — (38)— — — 
Common stock issued for share-based compensation and other plans, net— (32)— 1 758 (38)
Share-based compensation— 82 — — — — 
Common stock held in trusts, net (a)— — — — (12)— 
Balance at December 31, 2019$347 $16,320 $12,938 $24 (75,514)$(6,228)
Net income— — 183 — — — 
Common dividends ($0.79 per share)
— — (215)— — — 
Preferred dividends— — (38)— — — 
Common stock issued for share-based compensation and other plans, net— (91)— (1)573 70 
Share-based compensation— 58 — — — — 
Common stock held in trusts, net (a)— — — — 30 — 
Balance at March 31, 2020$347 $16,288 $12,868 $23 (74,911)$(6,158)
Net income— — 286 — — — 
Common dividends ($0.79 per share)
— — (229)— — — 
Preferred dividends— — (9)— — — 
Common stock issued for:
Preferred shares converted to common shares12 (9)— — — — 
Public equity offerings6 2,909 — — — — 
Share-based compensation and other plans, net— (12)— — 127 13 
Share-based compensation— 52 — — — — 
Common stock held in trusts, net (a)— — — — 13 — 
Balance at June 30, 2020$365 $19,228 $12,916 $23 (74,771)$(6,145)
(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.
Share Repurchases
In the third quarter of fiscal year 2021, the Company executed an accelerated share repurchase agreement to repurchase an aggregate $500 million of its common stock. The Company accounted for this agreement as two transactions upon prepayment of the $500 million: (1) the initial delivery of approximately 1.658 million shares was recorded as a $400 million increase to Common stock in treasury to recognize the acquisition of common stock acquired in a treasury stock transaction, and (2) the remaining amount of $100 million was recorded as a decrease to Capital in excess of par value to recognize a net share-settled forward sale contract indexed to the Company's own common stock. Upon final settlement of the repurchase agreement and the forward sale contract in July 2021, the Company’s receipt of approximately 403 thousand additional shares was recorded as a $100 million increase to Common stock in treasury and an offsetting increase to Capital in excess of par value.
The Company also repurchased approximately 2.066 million shares of its common stock during the third quarter of fiscal year 2021 through open market repurchases. The shares repurchased during the third quarter of fiscal year 2021 were recorded as a $500 million increase to Common stock in treasury.
The share repurchases discussed above were made pursuant to the repurchase program authorized by the Board of Directors on September 24, 2013 for 10 million shares, for which there is no expiration date.
9


The components and changes of Accumulated other comprehensive income (loss) for the first three quarters of fiscal years 2021 and 2020 were as follows:
(Millions of dollars)TotalForeign Currency
Translation
Benefit Plans
Cash Flow Hedges
Balance at September 30, 2020$(2,548)$(1,416)$(1,040)$(91)
Other comprehensive income before reclassifications, net of taxes115 64 24 27 
Amounts reclassified into income, net of taxes19  18 2 
Balance at December 31, 2020$(2,414)$(1,352)$(998)$(62)
Other comprehensive income (loss) before reclassifications, net of taxes64 (15) 78 
Amounts reclassified into income, net of taxes21  16 5 
Balance at March 31, 2021$(2,329)$(1,367)$(982)$21 
Other comprehensive (loss) income before reclassifications, net of taxes(16)19  (34)
Amounts reclassified into income, net of taxes15  14 1 
Balance at June 30, 2021$(2,330)$(1,348)$(967)$(13)
(Millions of dollars)TotalForeign Currency
Translation
Benefit Plans
Cash Flow Hedges
Balance at September 30, 2019$(2,283)$(1,256)$(1,005)$(23)
Other comprehensive income before reclassifications, net of taxes63 26  37 
Amounts reclassified into income, net of taxes19  17 2 
Balance at December 31, 2019$(2,202)$(1,230)$(988)$16 
Other comprehensive loss before reclassifications, net of taxes(237)(125) (111)
Amounts reclassified into income, net of taxes19  17 2 
Balance at March 31, 2020$(2,419)$(1,355)$(971)$(93)
Other comprehensive income before reclassifications, net of taxes34 34   
Amounts reclassified into income, net of taxes19  17 2 
Balance at June 30, 2020$(2,367)$(1,321)$(955)$(91)
The amounts of foreign currency translation recognized in other comprehensive income during the three and nine months ended June 30, 2021 and 2020 included net (losses) gains relating to net investment hedges. Other comprehensive income relating to benefit plans during the three months ended December 31, 2020 represented a net gain recognized as a result of the Company’s remeasurement, as of October 31, 2020, of the legacy Bard U.S. defined pension benefit plan upon its merger with the BD defined benefit cash balance pension plan in the first quarter of fiscal year 2021. The amounts recognized in other comprehensive (loss) income relating to cash flow hedges during the three and nine months ended June 30, 2021 and 2020 related to forward starting interest rate swaps. Additional disclosures regarding the Company's derivatives are provided in Note 11.
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Note 4 – Earnings per Share
The weighted average common shares used in the computations of basic and diluted earnings per share (shares in thousands) were as follows:
 Three Months Ended
June 30,
Nine Months Ended
June 30,
 2021202020212020
Average common shares outstanding289,522 282,385 290,401 275,152 
Dilutive share equivalents from share-based plans2,375 2,763 2,693 3,411 
Average common and common equivalent shares outstanding – assuming dilution291,897 285,148 293,094 278,563 
Share equivalents excluded from the diluted shares outstanding calculation because the result would have been antidilutive:
Mandatory convertible preferred stock6,168 6,328 6,168 9,918 
Note 5 – 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 in which the Company is a party. In accordance with U.S. GAAP, the Company establishes accruals to the extent probable future losses are estimable (and 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 any class. With respect to the civil investigative demand (“CID”) served by the Department of Justice, 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
The Company believes that certain settlements and judgments, as well as legal defense costs, may be covered under indemnification obligations from other parties, which if disputed, the Company intends to vigorously contest. Amounts recovered under the Company’s product liability indemnification arrangements may be 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 other parties will pay claims or that indemnity will be otherwise available.
Hernia Product Claims
As of June 30, 2021, the Company is defending approximately 23,590 product liability claims involving the Company’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 and in a federal multi-district litigation (“MDL”) established in the Southern District of Ohio, 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 into fiscal year 2022 in various state and/or federal courts, including one currently scheduled for August 2021 in the MDL and another trial currently scheduled for November 2021 in the Rhode Island State Court. The Company expects additional trials of Hernia Product Claims to take place over the next 12 months. 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.
11


Women’s Health Product Claims
As of June 30, 2021, the Company is defending approximately 405 product liability claims involving the Company’s line of pelvic mesh devices. The majority of those claims are currently pending in various federal court jurisdictions, and a coordinated proceeding in New Jersey State Court, but claims are also pending in other state court jurisdictions. In addition, those claims include putative class actions filed in the United States. Not included in the figures above are approximately 835 filed and unfiled claims that have been asserted or threatened against the Company but lack sufficient information to determine whether a pelvic mesh device of the Company is actually at issue.
The claims identified above also include products manufactured by both the Company and two subsidiaries of Medtronic plc (as successor in interest to Covidien plc) (“Medtronic”), each a supplier of the Company. Medtronic has an obligation to defend and indemnify the Company with respect to any product defect liability relating to products its subsidiaries had manufactured. In July 2015, the Company reached an agreement with Medtronic in which Medtronic agreed to take responsibility for pursuing settlement of certain of the Women’s Health Product Claims that relate to products distributed by the Company under supply agreements with Medtronic. In June 2017, the Company 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 toward these potential settlements. As of June 30, 2021, the Company has paid Medtronic $160 million toward these potential settlements. The Company 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 the Company and Medtronic with respect to Women’s Health Product Claims that do not settle, if any. 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 June 30, 2021, the Company has reached agreements or agreements in principle with various plaintiffs’ law firms to settle their respective inventories of cases totaling approximately 15,285 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.
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). In March 2021, the Appellate Division of the New Jersey Superior Court vacated the verdict and ordered a new trial. Plaintiffs have sought appeal of the reversal to the New Jersey Supreme Court and the Company has cross-appealed on a separate issue; the court has not yet advised if it will consider the appeal. Additional trials of Women’s Health Product Claims may take place over the next 12 months, which could potentially include consolidated trials.
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 June 30, 2021, the Company is defending approximately 360 product liability claims involving the Company’s line of inferior vena cava filters (collectively, the “Filter Product Claims”). The majority of those claims were previously pending in an MDL in the United States District Court for the District of Arizona, but those MDL claims either have been, or are in the process of being, remanded to various federal jurisdictions. Filter Product Claims are also pending in various state 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. On May 31, 2019, the MDL Court ceased accepting direct filings or transfers into the Filter Product Claims MDL and, as noted above, remands for non-settled cases have begun and are expected to continue over the next three months. Federal and state court trials are scheduled and expected to take place over the next 12 months. As of June 30, 2021, the Company entered into settlement agreements and/or settlement agreements in principle for approximately 9,450 cases.
12


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.
Other Legal Matters
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.

On February 27, 2020, a putative class action captioned Kabak v. Becton, Dickinson and Company, et al., Civ. No. 2:20-cv-02155 (SRC) (CLW), now captioned Industriens Pensionsforsikring v. Becton, Dickinson and Company, et al., was filed in the U.S. District Court for the District of New Jersey against the Company and certain of its officers. The complaint, which purports to be brought on behalf of all persons (other than defendants) who purchased or otherwise acquired the Company's common stock from November 5, 2019 through February 5, 2020, asserts claims for purported violations of Sections 10 and 20 of the Securities Exchange Act of 1934 and Securities and Exchange Commission (“SEC”) Rule 10b-5 promulgated thereunder, and seeks, among other things, damages and costs. The complaint alleges that defendants concealed material information regarding AlarisTM infusion pumps, including that (1) certain pumps exhibited software errors, (2) the Company was investing in remediation efforts as opposed to other enhancements and (3) the Company was thus reasonably likely to recall certain pumps and/or experience regulatory delays. These alleged omissions, the complaint asserts, rendered certain public statements about the Company’s business, operations and prospects false or misleading, causing investors to purchase stock at an inflated price. The plaintiff filed a second amended complaint to add certain additional factual allegations on February 3, 2021, which the company moved to dismiss on March 19, 2021. Briefing on the Company’s motion to dismiss was concluded in June 2021. The Company believes the claims are without merit and intends to vigorously defend this action.
On November 2, 2020, a civil action captioned Jankowski v. Forlenza, et al., Civ. No. 2:20-cv-15474, was filed in the U.S. District Court for the District of New Jersey by a shareholder, Ronald Jankowski, derivatively on behalf of the Company, against its individual directors and certain of its officers. The complaint seeks recovery for breach of fiduciary duties by directors and various officers; violations of the Securities Exchange Act of 1934; and insider trading. In general, the complaint alleges, among other things, that various directors and/or officers (1) caused the Company to issue purportedly misleading statements and SEC filings regarding AlarisTM infusion pumps, (2) issued a misleading proxy statement, (3) engaged in improper insider trading and (4) caused or contributed to various violations of the Securities Exchange Act of 1934, including sections 10(b), 14(a) and 21D. The complaint seeks damages, including restitution and disgorgement of profits, and an injunction requiring the Company to undertake remedial measures with respect to certain corporate governance and internal procedures. A second derivative action, Schranz v. Polen, et al., Civ. No 2:21-cv-01081, was filed on January 24, 2021 in the U.S. District Court for the District of New Jersey and the two actions were consolidated. In March 2021, the Company received letters from two additional shareholders which, in general, mirrored the allegations in the Jankowski and Schranz consolidated actions, and demanded, among other things, that the Board of Directors pursue civil action against members of management for claimed breaches of fiduciary duties. Consistent with New Jersey law, the Board appointed a special committee to review the allegations and demands in the derivative actions and demand letters. Following an investigation, the special committee determined that no action was warranted, and rejected the shareholders’ demands. The special committee’s determination has been communicated to counsel for the shareholders. Should the shareholders continue to pursue their claims in court, the Company will take appropriate steps to seek dismissal of the complaints.
In February 2021, the Company received a subpoena from the Enforcement Division of the SEC requesting information from the Company relating to, among other things, AlarisTM infusion pumps. The Company is cooperating with the SEC and responding to these requests. The Company cannot anticipate the timing, scope, outcome or possible impact of the investigation, financial or otherwise.
In April 2019, the Department of Justice served the Company and CareFusion with CIDs seeking information regarding certain of CareFusion’s contracts with the Department of Veteran’s Affairs for certain products, including AlarisTM and PyxisTM devices, in connection with a civil investigation of possible violations of the False Claims Act, and the government recently expanded the investigation to include several additional contracts. The government has made several requests for documents and interviews or depositions of Company personnel. The Company is cooperating with the government and responding to these requests.
13


The Company cannot predict the outcome of these matters, nor can it predict whether any outcome will have a material adverse effect on the Company’s business, results of operations, financial condition and/or liquidity. Accordingly, the Company has made no provisions for these other legal matters in its consolidated results of operations.

In July 2021, the Company became aware of approximately 150 lawsuits that had been filed against it in state court in Gwinnett County, Georgia. The suits were filed by plaintiffs who reside near Company facilities in Covington, GA, where ethylene oxide (EtO) sterilization activities take place. The claims allege a variety of injuries, including but not limited to multiple types of cancer, allegedly attributable to exposure to EtO in the ambient air. The Company has meritorious defenses and intends to defend itself vigorously.
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 Accruals
The Company regularly monitors and evaluates the status of product liability and other legal matters, and may, from time-to-time, engage in settlement and mediation discussions taking into consideration developments in the matters and the risks and uncertainties surrounding litigation. These discussions could result in settlements of one or more of these claims at any time.
In the second quarter of fiscal 2021, the Company recorded a pre-tax charge of approximately $296 million to Other operating (income) expense, net related to certain of the product liability matters discussed above under the heading “Product Liability Matters,” including the related legal defense costs. The Company recorded this charge based on additional information obtained during the quarter, including but not limited to: the nature and quantity of unfiled and filed claims and the continued rate of claims being filed in certain product liability matters; the status of certain settlement discussions with plaintiffs’ counsel; the allegations and documentation supporting or refuting such allegations; and the stage of litigation.
Accruals for the Company's product liability claims which are discussed above, as well as the related legal defense costs, amounted to approximately $2.5 billion at June 30, 2021 and September 30, 2020. These accruals, which are generally long-term in nature, are largely recorded within Deferred Income Taxes and Other Liabilities on the Company's condensed consolidated balance sheets. As of June 30, 2021 and September 30, 2020, the Company had $128 million and $92 million, respectively, in 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 product liability claims and related legal defense costs were approximately $92 million and $139 million at June 30, 2021 and September 30, 2020, respectively. The expected recoveries at June 30, 2021 related entirely to the Company’s agreements with Medtronic related to certain Women’s Health Product Claims. A substantial amount of the expected recoveries at September 30, 2020 related to the Company’s agreements with Medtronic related to certain Women’s Health Product Claims. The expected recoveries at June 30, 2021 related to the indemnification obligation are not in dispute with respect to claims that Medtronic settles pursuant to the agreements.
Note 6 – Revenues
The Company’s policies for recognizing sales have not changed from those described in the Company’s 2020 Annual Report on Form 10-K. The Company sells a broad range of medical supplies, devices, laboratory equipment and diagnostic products which are distributed through independent distribution channels and directly by BD through sales representatives. End-users of the Company's products include healthcare institutions, physicians, life science researchers, clinical laboratories, the pharmaceutical industry and the general public.
Measurement of Revenues
The Company’s allowance for doubtful accounts reflects the current estimate of credit losses expected to be incurred over the life of its trade receivables. Such estimated credit losses are determined based on historical loss experiences, customer-specific credit risk, and reasonable and supportable forward-looking information, such as country or regional risks that are not captured
14


in the historical loss information. The allowance for doubtful accounts for trade receivables is not material to the Company's consolidated financial results.
The Company's gross revenues are subject to a variety of deductions which are recorded in the same period that the underlying revenues are recognized. Such variable consideration includes rebates, sales discounts and sales returns. The impact of other forms of variable consideration, including sales discounts and sales returns, is not material to the Company's revenues.
Effects of Revenue Arrangements on Consolidated Balance Sheets
Capitalized contract costs associated with the costs to fulfill contracts for certain products in the Medication Management Solutions organizational unit are immaterial to the Company's condensed consolidated balance sheets. Commissions relating to revenues recognized over a period longer than one year are recorded as assets which are amortized over the period over which the revenues underlying the commissions are recognized. Capitalized contract costs related to such commissions are immaterial to the Company's condensed consolidated balance sheets.
Contract liabilities for unearned revenue that is allocable to performance obligations, such as extended warranty and software maintenance contracts, which are performed over time are immaterial to the Company's consolidated financial results. The Company's liability for product warranties provided under its agreements with customers is not material to its condensed consolidated balance sheets.
Remaining Performance Obligations
The Company's obligations relative to service contracts and pending installations of equipment, primarily in the Company's Medication Management Solutions unit, represent unsatisfied performance obligations of the Company. The revenues under existing contracts with original expected durations of more than one year, which are attributable to products and/or services that have not yet been installed or provided are estimated to be approximately $1.9 billion at June 30, 2021. The Company expects to recognize the majority of this revenue over the next three years.
Within the Company's Medication Management Solutions, Medication Delivery Solutions, Integrated Diagnostic Solutions, and Biosciences units, some contracts also contain minimum purchase commitments of reagents or other consumables and the future sales of these consumables represent additional unsatisfied performance obligations of the Company. The revenue attributable to the unsatisfied minimum purchase commitment-related performance obligations, for contracts with original expected durations of more than one year, is estimated to be approximately $2.8 billion at June 30, 2021.  This revenue will be recognized over the customer relationship periods.
Disaggregation of Revenues
A disaggregation of the Company's revenues by segment, organizational unit and geographic region is provided in Note 7.
Note 7 – Segment Data
The Company's organizational structure is based upon three worldwide business segments: BD Medical (“Medical”), BD Life Sciences (“Life Sciences”) and BD Interventional ("Interventional"). The Company's segments are strategic businesses that are managed separately because each one develops, manufactures and markets distinct products and services. 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 segment operating income, which represents revenues reduced by product costs and operating expenses.
Revenues by segment, organizational unit and geographical areas for the three and nine-month periods are detailed below. The Company has no material intersegment revenues.
15


Three Months Ended June 30,
(Millions of dollars)20212020
United StatesInternationalTotalUnited StatesInternationalTotal
Medical
Medication Delivery Solutions$560 $447 $1,007 $412 $369 $781 
Medication Management Solutions459 139 597 500 177 677 
Diabetes Care152 143 294 136 123 260 
Pharmaceutical Systems112 364 476 113 291 403 
Total segment revenues$1,283 $1,092 $2,375 $1,161 $960 $2,122 
Life Sciences
Integrated Diagnostic Solutions$435 $682 $1,117 $344 $370 $714 
Biosciences124 192 316 93 145 237 
Total segment revenues$559 $874 $1,433 $436 $515 $951