QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||||||||||||||
(Address of principal executive offices) (Zip Code) | (Registrant’s telephone number, including area code) |
Title of Each Class | Trading Symbol | Name of Each Exchange on Which Registered | ||||||||||||
☒ | 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. | ☐ |
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. | ||||||||
Three Months Ended December 31, | |||||||||||
2022 | 2021 | ||||||||||
Revenues | $ | $ | |||||||||
Cost of products sold | |||||||||||
Selling and administrative expense | |||||||||||
Research and development expense | |||||||||||
Acquisition-related integration and restructuring expense | |||||||||||
Other operating expense (income), net | ( | ||||||||||
Total Operating Costs and Expenses | |||||||||||
Operating Income | |||||||||||
Interest expense | ( | ( | |||||||||
Interest income | |||||||||||
Other (expense) income, net | ( | ||||||||||
Income from Continuing Operations Before Income Taxes | |||||||||||
Income tax (benefit) provision | ( | ||||||||||
Net Income from Continuing Operations | |||||||||||
Income from Discontinued Operations, Net of Tax | |||||||||||
Net Income | |||||||||||
Preferred stock dividends | ( | ( | |||||||||
Net income applicable to common shareholders | $ | $ | |||||||||
Basic Earnings per Share | |||||||||||
Income from Continuing Operations | $ | $ | |||||||||
Income from Discontinued Operations | |||||||||||
Basic Earnings per Share | $ | $ | |||||||||
Diluted Earnings per Share | |||||||||||
Income from Continuing Operations | $ | $ | |||||||||
Income from Discontinued Operations | |||||||||||
Diluted Earnings per Share | $ | $ | |||||||||
Dividends per Common Share | $ | $ |
Three Months Ended December 31, | |||||||||||
2022 | 2021 | ||||||||||
Net Income | $ | $ | |||||||||
Other Comprehensive (Loss) Income, Net of Tax | |||||||||||
Foreign currency translation adjustments | ( | ||||||||||
Defined benefit pension and postretirement plans | |||||||||||
Cash flow hedges | ( | ( | |||||||||
Other Comprehensive (Loss) Income, Net of Tax | ( | ||||||||||
Comprehensive Income | $ | $ |
December 31, 2022 | September 30, 2022 | ||||||||||
Assets | (Unaudited) | ||||||||||
Current Assets: | |||||||||||
Cash and equivalents | $ | $ | |||||||||
Restricted cash | |||||||||||
Short-term investments | |||||||||||
Trade receivables, net | |||||||||||
Inventories: | |||||||||||
Materials | |||||||||||
Work in process | |||||||||||
Finished products | |||||||||||
Prepaid expenses and other | |||||||||||
Total Current Assets | |||||||||||
Property, Plant and Equipment | |||||||||||
Less allowances for depreciation and amortization | |||||||||||
Property, Plant and Equipment, Net | |||||||||||
Goodwill | |||||||||||
Developed Technology, Net | |||||||||||
Customer Relationships, Net | |||||||||||
Other Intangibles, Net | |||||||||||
Other Assets | |||||||||||
Total Assets | $ | $ | |||||||||
Liabilities and Shareholders’ Equity | |||||||||||
Current Liabilities: | |||||||||||
Current debt obligations | $ | $ | |||||||||
Payables, accrued expenses and other current liabilities | |||||||||||
Total Current Liabilities | |||||||||||
Long-Term Debt | |||||||||||
Long-Term Employee Benefit Obligations | |||||||||||
Deferred Income Taxes and Other Liabilities | |||||||||||
Commitments and Contingencies (See Note 5) | |||||||||||
Shareholders’ Equity | |||||||||||
Preferred stock | |||||||||||
Common stock — $ | |||||||||||
Capital in excess of par value | |||||||||||
Retained earnings | |||||||||||
Deferred compensation | |||||||||||
Treasury stock | ( | ( | |||||||||
Accumulated other comprehensive loss | ( | ( | |||||||||
Total Shareholders’ Equity | |||||||||||
Total Liabilities and Shareholders’ Equity | $ | $ |
Three Months Ended December 31, | |||||||||||
2022 | 2021 | ||||||||||
Operating Activities | |||||||||||
Net income | $ | $ | |||||||||
Less: Income from discontinued operations, net of tax | |||||||||||
Income from continuing operations, net of tax | |||||||||||
Adjustments to net income from continuing operations to derive net cash provided by continuing operating activities: | |||||||||||
Depreciation and amortization | |||||||||||
Share-based compensation | |||||||||||
Deferred income taxes | ( | ( | |||||||||
Change in operating assets and liabilities | ( | ( | |||||||||
Pension obligation | ( | ||||||||||
Other, net | ( | ( | |||||||||
Net Cash Provided by Continuing Operating Activities | |||||||||||
Investing Activities | |||||||||||
Capital expenditures | ( | ( | |||||||||
Acquisitions, net of cash acquired | ( | ||||||||||
Other, net | ( | ( | |||||||||
Net Cash Used for Continuing Investing Activities | ( | ( | |||||||||
Financing Activities | |||||||||||
Change in short-term debt | |||||||||||
Payments of debt | ( | ||||||||||
Dividends paid | ( | ( | |||||||||
Other, net | ( | ( | |||||||||
Net Cash Used for Continuing Financing Activities | ( | ( | |||||||||
Discontinued Operations | |||||||||||
Net cash provided by operating activities | |||||||||||
Net cash used for investing activities | ( | ||||||||||
Net Cash Provided by Discontinued Operations | |||||||||||
Effect of exchange rate changes on cash and equivalents and restricted cash | ( | ||||||||||
Net decrease in cash and equivalents and restricted cash | ( | ( | |||||||||
Opening Cash and Equivalents and Restricted Cash | |||||||||||
Closing Cash and Equivalents and Restricted Cash | $ | $ | |||||||||
Three Months Ended December 31, | ||||||||
Millions of dollars | 2021 | |||||||
Revenues | $ | |||||||
Cost of products sold | ||||||||
Selling and administrative expense | ||||||||
Research and development expense | ||||||||
Other operating expense, net | ||||||||
Total Operating Costs and Expenses | ||||||||
Operating Income | ||||||||
Interest expense | ||||||||
Other income, net | ||||||||
Income from Discontinued Operations Before Income Taxes | ||||||||
Income tax provision | ||||||||
Income from Discontinued Operations, Net of Tax | $ |
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, 2022 | $ | $ | $ | $ | ( | $ | ( | ||||||||||||||||||||||||||||
Net income | — | — | — | — | — | ||||||||||||||||||||||||||||||
Common dividends ($ | — | — | ( | — | — | — | |||||||||||||||||||||||||||||
Preferred dividends | — | — | ( | — | — | — | |||||||||||||||||||||||||||||
Common stock issued for share-based compensation and other plans, net | — | ( | — | — | ( | ||||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||
Common stock held in trusts, net (a) | — | — | — | — | ( | — | |||||||||||||||||||||||||||||
Balance at December 31, 2022 | $ | $ | $ | $ | ( | $ | ( | ||||||||||||||||||||||||||||
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, 2021 | $ | $ | $ | $ | ( | $ | ( | ||||||||||||||||||||||||||||
Net income | — | — | — | — | — | ||||||||||||||||||||||||||||||
Common dividends ($ | — | — | ( | — | — | — | |||||||||||||||||||||||||||||
Preferred dividends | — | — | ( | — | — | — | |||||||||||||||||||||||||||||
Common stock issued for share-based compensation and other plans, net | — | ( | — | — | |||||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||
Common stock held in trusts, net (a) | — | — | — | — | ( | — | |||||||||||||||||||||||||||||
Repurchase of common stock (b) | — | — | — | ( | ( | ||||||||||||||||||||||||||||||
Balance at December 31, 2021 | $ | $ | $ | $ | ( | $ | ( | ||||||||||||||||||||||||||||
(Millions of dollars) | Total | Foreign Currency Translation | Benefit Plans | Cash Flow Hedges | |||||||||||||||||||
Balance at September 30, 2022 | $ | ( | $ | ( | $ | ( | $ | ||||||||||||||||
Other comprehensive loss before reclassifications, net of taxes | ( | ( | ( | ||||||||||||||||||||
Amounts reclassified into income, net of taxes | |||||||||||||||||||||||
Balance at December 31, 2022 | $ | ( | $ | ( | $ | ( | $ | ||||||||||||||||
(Millions of dollars) | Total | Foreign Currency Translation | Benefit Plans | Cash Flow Hedges | |||||||||||||||||||
Balance at September 30, 2021 | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Other comprehensive income (loss) before reclassifications, net of taxes | ( | ||||||||||||||||||||||
Amounts reclassified into income, net of taxes | |||||||||||||||||||||||
Balance at December 31, 2021 | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Three Months Ended December 31, | |||||||||||
2022 | 2021 | ||||||||||
Average common shares outstanding | |||||||||||
Dilutive share equivalents from share-based plans | |||||||||||
Average common and common equivalent shares outstanding – assuming dilution | |||||||||||
Share equivalents excluded from the diluted shares outstanding calculation: | |||||||||||
Mandatory convertible preferred stock (a) | |||||||||||
Share-based plans (b) |
Three Months Ended December 31, | |||||||||||||||||||||||||||||||||||
(Millions of dollars) | 2022 | 2021 | |||||||||||||||||||||||||||||||||
United States | International | Total | United States | International | Total | ||||||||||||||||||||||||||||||
Medical | |||||||||||||||||||||||||||||||||||
Medication Delivery Solutions (a) | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Medication Management Solutions | |||||||||||||||||||||||||||||||||||
Pharmaceutical Systems (a) | |||||||||||||||||||||||||||||||||||
Total segment revenues | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Life Sciences | |||||||||||||||||||||||||||||||||||
Integrated Diagnostic Solutions | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Biosciences | |||||||||||||||||||||||||||||||||||
Total segment revenues | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Interventional | |||||||||||||||||||||||||||||||||||
Surgery | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Peripheral Intervention | |||||||||||||||||||||||||||||||||||
Urology and Critical Care | |||||||||||||||||||||||||||||||||||
Total segment revenues | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Total revenues from continuing operations | $ | $ | $ | $ | $ | $ |
Three Months Ended December 31, | |||||||||||
(Millions of dollars) | 2022 | 2021 | |||||||||
Income from Continuing Operations Before Income Taxes | |||||||||||
Medical | $ | $ | |||||||||
Life Sciences | |||||||||||
Interventional | |||||||||||
Total Segment Operating Income | |||||||||||
Acquisition-related integration and restructuring expense | ( | ( | |||||||||
Net interest expense | ( | ( | |||||||||
Other unallocated items (a) | ( | ( | |||||||||
Total Income from Continuing Operations Before Income Taxes | $ | $ |
Three Months Ended December 31, | |||||||||||
(Millions of dollars) | 2022 | 2021 | |||||||||
Service cost | $ | $ | |||||||||
Interest cost | |||||||||||
Expected return on plan assets | ( | ( | |||||||||
Amortization of prior service credit | ( | ( | |||||||||
Amortization of loss | |||||||||||
Settlements | |||||||||||
Net pension cost | $ | $ |
(Millions of dollars) | Employee Termination | Other | Total | ||||||||||||||
Balance at September 30, 2022 | $ | $ | $ | ||||||||||||||
Charged to expense | |||||||||||||||||
Cash payments | ( | ( | ( | ||||||||||||||
Non-cash settlements | ( | ( | |||||||||||||||
Balance at December 31, 2022 | $ | $ | $ |
December 31, 2022 | September 30, 2022 | ||||||||||||||||||||||||||||||||||
(Millions of dollars) | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | |||||||||||||||||||||||||||||
Amortized intangible assets | |||||||||||||||||||||||||||||||||||
Developed technology | $ | $ | ( | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||
Customer relationships | ( | ( | |||||||||||||||||||||||||||||||||
Product rights | ( | ( | |||||||||||||||||||||||||||||||||
Trademarks | ( | ( | |||||||||||||||||||||||||||||||||
Patents and other | ( | ( | |||||||||||||||||||||||||||||||||
Amortized intangible assets | $ | $ | ( | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||
Unamortized intangible assets | |||||||||||||||||||||||||||||||||||
Acquired in-process research and development | $ | $ | |||||||||||||||||||||||||||||||||
Trademarks | |||||||||||||||||||||||||||||||||||
Unamortized intangible assets | $ | $ |
(Millions of dollars) | Medical | Life Sciences | Interventional | Total | |||||||||||||||||||
Goodwill as of September 30, 2022 | $ | $ | $ | $ | |||||||||||||||||||
Purchase price allocation adjustments | |||||||||||||||||||||||
Currency translation | |||||||||||||||||||||||
Goodwill as of December 31, 2022 | $ | $ | $ | $ |
(Millions of dollars) | Hedge Designation | December 31, 2022 | September 30, 2022 | ||||||||||||||
Foreign exchange contracts (a) | Undesignated | $ | $ | ||||||||||||||
Foreign currency-denominated debt (b) | Net investment hedges | ||||||||||||||||
Cross-currency swaps (c) | Net investment hedges |
Three Months Ended December 31, | |||||||||||
(Millions of dollars) | 2022 | 2021 | |||||||||
Foreign currency-denominated debt | $ | ( | $ | ||||||||
Cross-currency swaps | ( | ||||||||||
(Millions of dollars) | Hedge Designation | December 31, 2022 | September 30, 2022 | ||||||||||||||
Interest rate swaps (a) | Fair value hedges | $ | $ | ||||||||||||||
Forward starting interest rate swaps (b) | Cash flow hedges |
(Millions of dollars) | December 31, 2022 | September 30, 2022 | |||||||||
Cash and equivalents | $ | $ | |||||||||
Restricted cash | |||||||||||
Cash and equivalents and restricted cash | $ | $ |
(Millions of dollars) | Basis of fair value measurement | December 31, 2022 | September 30, 2022 | ||||||||||||||
Institutional money market accounts (a) | Level 1 | $ | $ | ||||||||||||||
Current portion of long-term debt (b) | Level 2 | ||||||||||||||||
Long-term debt (b) | Level 2 |
Three Months Ended December 31, | |||||||||||
(Millions of dollars) | 2022 | 2021 | |||||||||
Trade receivables transferred to third parties under factoring arrangements | $ | $ |
December 31, 2022 | September 30, 2022 | ||||||||||
Amounts yet to be collected and remitted to the third parties | $ | $ |
Increase (decrease) in current-period revenues | |||||
Volume | 1.9 | % | |||
Period-over-period decline in revenues related to COVID-19-only testing | (3.2) | % | |||
Pricing | 3.0 | % | |||
Foreign currency translation | (4.5) | % | |||
Decrease in revenues from the prior-year period | (2.8) | % |
Three months ended December 31, | |||||||||||||||||||||||||||||
(Millions of dollars) | 2022 | 2021 | Total Change | Estimated FX Impact | FXN Change | ||||||||||||||||||||||||
Medication Delivery Solutions (a) | $ | 1,039 | $ | 1,096 | (5.2) | % | (4.2) | % | (1.0) | % | |||||||||||||||||||
Medication Management Solutions | 706 | 627 | 12.6 | % | (2.9) | % | 15.5 | % | |||||||||||||||||||||
Pharmaceutical Systems (a) | 409 | 397 | 3.2 | % | (7.4) | % | 10.6 | % | |||||||||||||||||||||
Total Medical Revenues | $ | 2,154 | $ | 2,120 | 1.6 | % | (4.5) | % | 6.1 | % |
Three months ended December 31, | |||||||||||
(Millions of dollars) | 2022 | 2021 | |||||||||
Medical segment income | $ | 554 | $ | 572 | |||||||
Segment income as % of Medical revenues | 25.7 | % | 27.0 | % |
Three months ended December 31, | |||||||||||||||||||||||||||||
(Millions of dollars) | 2022 | 2021 | Total Change | Estimated FX Impact | FXN Change | ||||||||||||||||||||||||
Integrated Diagnostic Solutions | $ | 952 | $ | 1,145 | (16.8) | % | (4.6) | % | (12.2) | % | |||||||||||||||||||
Biosciences | 349 | 338 | 3.3 | % | (5.9) | % | 9.2 | % | |||||||||||||||||||||
Total Life Sciences Revenues | $ | 1,302 | $ | 1,483 | (12.2) | % | (4.9) | % | (7.3) | % |
Three months ended December 31, | |||||||||||
(Millions of dollars) | 2022 | 2021 | |||||||||
Life Sciences segment income | $ | 433 | $ | 534 | |||||||
Segment income as % of Life Sciences revenues | 33.3 | % | 36.0 | % |
Three months ended December 31, | |||||||||||||||||||||||||||||
(Millions of dollars) | 2022 | 2021 | Total Change | Estimated FX Impact | FXN Change | ||||||||||||||||||||||||
Surgery | $ | 363 | $ | 361 | 0.4 | % | (2.7) | % | 3.1 | % | |||||||||||||||||||
Peripheral Intervention | 433 | 413 | 4.8 | % | (6.0) | % | 10.8 | % | |||||||||||||||||||||
Urology and Critical Care | 333 | 340 | (2.0) | % | (3.8) | % | 1.8 | % | |||||||||||||||||||||
Total Interventional Revenues | $ | 1,129 | $ | 1,115 | 1.3 | % | (4.3) | % | 5.6 | % |
Three months ended December 31, | |||||||||||
(Millions of dollars) | 2022 | 2021 | |||||||||
Interventional segment income | $ | 301 | $ | 265 | |||||||
Segment income as % of Interventional revenues | 26.7 | % | 23.7 | % |
Three months ended December 31, | |||||||||||||||||||||||||||||
(Millions of dollars) | 2022 | 2021 | Total Change | Estimated FX Impact | FXN Change | ||||||||||||||||||||||||
United States | $ | 2,730 | $ | 2,703 | 1.0 | % | — | % | 1.0 | % | |||||||||||||||||||
International | 1,856 | 2,016 | (7.9) | % | (10.6) | % | 2.7 | % | |||||||||||||||||||||
Total Revenues | $ | 4,586 | $ | 4,718 | (2.8) | % | (4.5) | % | 1.7 | % |
Three months ended December 31, | |||||||||||||||||||||||||||||
(Millions of dollars) | 2022 | 2021 | Total Change | Estimated FX Impact | FXN Change | ||||||||||||||||||||||||
Emerging markets | $ | 699 | $ | 719 | (2.8) | % | (6.3) | % | 3.5 | % |
Three months ended December 31, | |||||||||||
(Millions of dollars) | 2022 | 2021 | |||||||||
Integration costs (a) | $ | 18 | $ | 17 | |||||||
Restructuring costs (a) | 26 | 17 | |||||||||
Separation-related items (b) | 6 | — | |||||||||
Purchase accounting adjustments (c) | 362 | 364 | |||||||||
European regulatory initiative-related costs (d) | 33 | 31 | |||||||||
Product, litigation, and other items (e) | 4 | 22 | |||||||||
Total specified items | 449 | 451 | |||||||||
Less: tax impact of specified items | 86 | 86 | |||||||||
After-tax impact of specified items | $ | 364 | $ | 364 |
Three-month period | |||||
December 31, 2021 gross profit margin % | 47.1 | % | |||
Impact of purchase accounting adjustments and other specified items | (0.1) | % | |||
Period-over-period decline in COVID-19-only testing profitability | (0.3) | % | |||
Operating performance | (1.1) | % | |||
Foreign currency translation | 0.9 | % | |||
December 31, 2022 gross profit margin % | 46.5 | % |
Three months ended December 31, | Increase (decrease) in basis points | ||||||||||||||||
2022 | 2021 | ||||||||||||||||
(Millions of dollars) | |||||||||||||||||
Selling and administrative expense | $ | 1,187 | $ | 1,185 | |||||||||||||
% of revenues | 25.9 | % | 25.1 | % | 80 | ||||||||||||
Research and development expense | $ | 313 | $ | 314 | |||||||||||||
% of revenues | 6.8 | % | 6.7 | % | 10 | ||||||||||||
Acquisition-related integration and restructuring expense | $ | 44 | $ | 34 | |||||||||||||
Other operating expense (income), net | $ | 3 | $ | (4) |
Three months ended December 31, | |||||||||||
(Millions of dollars) | 2022 | 2021 | |||||||||
Interest expense | $ | (102) | $ | (98) | |||||||
Interest income | 6 | 2 | |||||||||
Net interest expense | $ | (96) | $ | (96) |
Three months ended December 31, | |||||||||||
2022 | 2021 | ||||||||||
Effective income tax rate for continuing operations | (5.8) | % | 5.3 | % | |||||||
Impact, in basis points, from specified items | (1,200) | (590) |
Three months ended December 31, | |||||||||||
2022 | 2021 | ||||||||||
Net Income from Continuing Operations (Millions of dollars) | $ | 509 | $ | 568 | |||||||
Diluted Earnings per Share from Continuing Operations | $ | 1.70 | $ | 1.90 | |||||||
Unfavorable impact-specified items | $ | (1.27) | $ | (1.27) | |||||||
Unfavorable impact-foreign currency translation | $ | (0.04) |
Three months ended December 31, | |||||||||||
(Millions of dollars) | 2022 | 2021 | |||||||||
Net cash provided by (used for) continuing operations | |||||||||||
Operating activities | $ | 399 | $ | 530 | |||||||
Investing activities | $ | (291) | $ | (682) | |||||||
Financing activities | $ | (534) | $ | (327) |
Three months ended December 31, | |||||||||||
(Millions of dollars) | 2022 | 2021 | |||||||||
Cash inflow (outflow) | |||||||||||
Change in short-term debt | $ | 365 | $ | — | |||||||
Payments of debt | $ | (528) | $ | — | |||||||
Dividends paid | $ | (281) | $ | (271) |
(Millions of dollars) | December 31, 2022 | September 30, 2022 | |||||||||
Total debt | $ | 16,456 | $ | 16,065 | |||||||
Weighted average cost of total debt | 2.9 | % | 2.8 | % | |||||||
Total debt as a percentage of total capital* | 37.8 | % | 37.3 | % |
For the three months ended December 31, 2022 | Total Number of Shares Purchased (1) | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs (2) | ||||||||||||||||||||||
October 1 - 31, 2022 | 2,523 | $ | 235.54 | — | 8,799,998 | |||||||||||||||||||||
November 1 – 30, 2022 | — | — | — | 8,799,998 | ||||||||||||||||||||||
December 1 – 31, 2022 | — | — | — | 8,799,998 | ||||||||||||||||||||||
Total | 2,523 | $ | 235.54 | — | 8,799,998 |
Subsidiary Issuer of Guaranteed Securities. | ||||||||
Certifications of Chief Executive Officer and Chief Financial Officer, pursuant to SEC Rule 13a - 14(a). | ||||||||
Certifications of Chief Executive Officer and Chief Financial Officer, pursuant to Rule 13a - 14(b) and Section 1350 of Chapter 63 of Title 18 of the U.S. Code. | ||||||||
101 | The following materials from this report, formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Income, (iii) the Condensed Consolidated Statements of Comprehensive Income, (iv) the Condensed Consolidated Statements of Cash Flows, and (v) Notes to Condensed Consolidated Financial Statements. | |||||||
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
Becton, Dickinson and Company | |||||
(Registrant) |
/s/ Christopher J. DelOrefice | |||||
Christopher J. DelOrefice | |||||
Executive Vice President and Chief Financial Officer | |||||
(Principal Financial Officer) | |||||
/s/ Thomas J. Spoerel | |||||
Thomas J. Spoerel | |||||
Senior Vice President, Controller and Chief Accounting Officer | |||||
(Principal Accounting Officer) |
/s/ Thomas E. Polen | |||||
Thomas E. Polen | |||||
Chairman, Chief Executive Officer and President |
/s/ Christopher J. DelOrefice | |||||
Christopher J. DelOrefice | |||||
Executive Vice President and Chief Financial Officer |
/s/ Thomas E. Polen | |||||
Name: Thomas E. Polen | |||||
Chief Executive Officer |
/s/ Christopher J. DelOrefice | |||||
Name: Christopher J. DelOrefice | |||||
Chief Financial Officer |
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Millions |
3 Months Ended | |
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Dec. 31, 2022 |
Dec. 31, 2021 |
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Statement of Comprehensive Income [Abstract] | ||
Net Income | $ 509 | $ 677 |
Other Comprehensive (Loss) Income, Net of Tax | ||
Foreign currency translation adjustments | (80) | 41 |
Defined benefit pension and postretirement plans | 11 | 11 |
Cash flow hedges | (3) | (7) |
Other Comprehensive (Loss) Income, Net of Tax | (72) | 45 |
Comprehensive Income | $ 437 | $ 722 |
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares |
Dec. 31, 2022 |
Sep. 30, 2022 |
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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) | 364,639,901 | 364,639,901 |
Basis of Presentation |
3 Months Ended |
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Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | 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 2022 Annual Report on Form 10-K. On April 1, 2022, the Company completed the spin-off of its Diabetes Care business as a separate publicly traded company. The historical results of the Diabetes Care business (previously included in BD’s Medical segment) that was contributed to Embecta Corp (“Embecta”) in the spin-off, as well as interest expense related to indebtedness incurred by Embecta prior to the spin-off date, have been reflected as discontinued operations in the Company’s condensed consolidated financial statements for the three months ended December 31, 2021. Additional disclosures regarding the spin-off are provided in Note 2. 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.
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Spin-Off of Embecta Corp. |
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Spin-Off of Embecta Corp. | Spin-Off of Embecta Corp. On April 1, 2022, the Company completed the spin-off of its Diabetes Care business as a separate publicly traded company named Embecta through a distribution of Embecta’s publicly traded common stock (listed on NASDAQ under the ticker symbol “EMBC”) to BD’s shareholders of record as of the close of business on March 22, 2022 (the “record date”). The Company distributed one share of Embecta common stock for every five common shares of BD outstanding as of the record date and shareholders received cash in lieu of fractional shares of Embecta common stock. BD retained no ownership interest in Embecta subsequent to the spin-off. The distribution is expected to qualify and has been treated as tax-free to the Company and its shareholders for U.S. federal income tax purposes. The Company and Embecta entered into various agreements to effect the spin-off and provide a framework for the relationship between the Company and Embecta after the spin-off. Such agreements include the separation and distribution agreement, as well as the following ongoing agreements: a cannula supply agreement, an intellectual property matters agreement, a transition services agreement, manufacturing and supply agreements, a lease agreement, a distribution agreement to support commercial operations, a logistics services agreement and other agreements including an employee matters agreement and a tax matters agreement. Under these agreements, the Company will continue to provide certain products and services to Embecta following the spin-off. The agreements do not provide the Company with the ability to influence the operating or financial policies of Embecta subsequent to the spin-off date. Amounts included in the Company’s condensed consolidated statements of income during the three months ended December 31, 2022 as a result of these agreements were immaterial. . Details of Income from Discontinued Operations, Net of Tax are as follows:
During the three months ended December 31, 2021, the Company incurred $25 million of separation costs, including those for consulting, legal, tax and other advisory services associated with the spin-off, which were previously recorded within Other operating expense (income), net and are now included as a component of Income from Discontinued Operations, Net of Tax. The Company’s Revenues and Cost of products sold from continuing operations were recast to reflect previously eliminated intercompany transactions that occurred between BD and Embecta and that resulted in a third-party sale in the same period. The impacts of these transactions to Embecta are also reflected as a component of Income from Discontinued Operations, Net of Tax.
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Shareholders' Equity |
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Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shareholders' Equity | Shareholders' Equity Changes in certain components of shareholders' equity for the first quarters of fiscal years 2023 and 2022 were as follows:
(a)Common stock held in trusts consists of the Company’s shares held in rabbi trusts in connection with deferred compensation under the Company’s employee salary and bonus deferral plan and directors’ deferral plan. (b)Represents shares received upon final settlement of an accelerated share repurchase agreement, and the related forward sale contract, entered into during the fourth quarter of fiscal year 2021. The share repurchases 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. In November 2021, the Board of Directors authorized the Company to repurchase up to an additional 10 million shares of BD common stock, for which there is also no expiration date. The components and changes of Accumulated other comprehensive income (loss) for the first quarters of fiscal years 2023 and 2022 were as follows:
The amounts of foreign currency translation recognized in other comprehensive income during the three months ended December 31, 2022 and 2021 included net (losses) gains relating to net investment hedges. Disclosures regarding amounts the Company recognized in other comprehensive income relating to cash flow hedges during the three months ended December 31, 2022 and 2021 are provided in Note 11. The tax impacts for amounts recognized in other comprehensive income (loss) before reclassifications and for reclassifications out of Accumulated other comprehensive income (loss) relating to benefit plans and cash flow hedges during the three months ended December 31, 2022 and 2021 were immaterial to the Company's consolidated financial results.
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Earnings Per Share |
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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) were as follows:
(a)Excluded from the diluted shares outstanding calculation because the result would have been antidilutive. (b)Excluded from the diluted earnings per share calculation as the exercise prices of these awards were greater than the average market price of the Company’s common shares.
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Contingencies |
3 Months Ended |
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Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | Contingencies The Company is involved, both as a plaintiff and a defendant, in various legal proceedings that arise in the ordinary course of business, including, without limitation, product liability and environmental matters in certain U.S. and international locations. Given the uncertain nature of litigation generally, the Company is not able, in all cases, to estimate the amount or range of loss that could result from an unfavorable outcome of 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, 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 demands (“CIDs”) served by the Department of Justice which are 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. Product Liability Matters As of December 31, 2022, the Company is defending approximately 32,305 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 (“RI”) 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. •The first bellwether trial in the hernia MDL resulted in a complete defense verdict in favor of the Company in September 2021. •The second hernia MDL bellwether resulted in a $255 thousand verdict in April 2022. •The first bellwether trial in RI resulted in a $4.8 million verdict in August 2022, which the Company plans to appeal. Trials are currently scheduled in state and/or federal courts, including an additional bellwether trial in the MDL in May 2023. The Company also expects additional trials of Hernia Product Claims to take place over the next 12 months in RI, including trials in June 2023 and October 2023. The Company also continues to be a defendant in certain other mass tort litigation. As of December 31, 2022, the Company is defending product liability claims involving the Company’s line of pelvic mesh products, the majority of which are pending in various federal court jurisdictions and in a coordinated proceeding in New Jersey Superior Court. Also, as of December 31, 2022, the Company is defending product liability claims involving the Company’s line of inferior vena cava (“IVC”) filter products. The majority of those claims are pending in various federal court jurisdictions after having been remanded from the MDL in the United States District Court for the District of Arizona. 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 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 (“Exchange Act”) 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 certain material information regarding AlarisTM infusion pumps, allegedly rendering certain public statements about the Company’s business, operations and prospects false or misleading, thereby allegedly causing investors to purchase stock at an inflated price. After an initial without prejudice dismissal, the plaintiff filed amended pleadings, which the Company in turn moved to dismiss. Ultimately, the court permitted certain aspects of the case to proceed. An answer with affirmative defenses was thereafter filed on October 3, 2022. Discovery has commenced and plaintiff’s motion for class certification was filed on January 17, 2023. The Company believes that it has strong defenses to the allegations that were not dismissed and it intends to defend itself vigorously. On November 2, 2020, a putative shareholder derivative 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, derivatively on behalf of the Company, against certain of the Company’s directors and officers. The complaint asserts claims for breach of fiduciary duty, violations of sections 10(b), 14(a) and 21D of the Exchange Act, and insider trading. The complaint principally alleges that the Company made misleading statements regarding AlarisTM infusion pumps in a proxy statement and other SEC filings. A second derivative action was filed on January 24, 2021, 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 derivative actions, and demanded, among other things, that the Board of Directors pursue claims 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, communicating its determination to counsel for the shareholders. On January 10, 2023, one of the two shareholders referenced above filed a separate derivative action that: (i) is generally consistent with the shareholder letter and the two prior actions; and (ii) purports to challenge the reasonableness of the special committee’s process and determination. The Company believes that is has strong defenses to these claims and intends to defend itself vigorously. In May 2017, the Company was sued by a competitor in the Northern District of New York, alleging antitrust violations related to certain aspects of the Company’s medical delivery solutions business in a case captioned AngioDynamics, Inc. v. C. R. Bard, Inc. et al., Civ. No. 1:17-CV-0598. Trial began on September 19, 2022, resulting in a complete defense verdict for the Company on October 6, 2022, from which AngioDynamics has filed a notice of appeal. 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. In September 2021, the Company received a CID related to an inquiry initiated by the Northern District of Georgia in 2018. The requests concern sales and marketing practices with respect to certain aspects of the Company’s urology business. The government has made requests for documents and has interviewed employees. The inquiry is ongoing and the Company is cooperating with the government and responding to its requests. In September 2021, the Company was served with a complaint from the New Mexico Attorney General, alleging violations of the state’s consumer protection laws in connection with the sales and marketing of its IVC filters. The Company’s motion to dismiss certain of the claims was granted on May 10, 2022 and discovery is proceeding as to the remaining claims. The Company intends to vigorously defend itself in the litigation. As the case is in its early stages, the Company cannot anticipate the timing, scope, outcome or possible impact at present. The Company has been sued in state and federal courts in Georgia by plaintiffs who work or reside near Company facilities in Covington, GA, where ethylene oxide (“EtO”) sterilization activities take place. The plaintiffs in those cases seek compensatory and punitive damages. Pursuant to Georgia statute, punitive damages in these cases are generally capped at $250,000 per claimant. The cases allege a variety of injuries, including but not limited to multiple types of cancer, allegedly attributable to exposure to EtO. The Company does not believe these cases are appropriate for class action treatment and they have not been filed as such. The Company currently has approximately 220 of such suits involving approximately 320 plaintiffs; approximately 45 of the cases also allege injury caused by exposure to a chemical of another defendant entirely unrelated to the Company. The Company has meritorious defenses and intends to defend itself vigorously and believes that future claims would generally face statute of limitations hurdles. 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. The Company cannot predict the outcome of these other legal matters discussed above, nor can it predict whether any outcome will have a material adverse effect on the Company’s consolidated results of operations and/or consolidated cash flows. Accordingly, the Company has made no provisions for these other legal matters in its consolidated results of operations. 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 Company also is subject to administrative proceedings under environmental laws in jurisdictions outside the U.S. 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 consolidated results of operations and/or consolidated cash flows. 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. Accruals for the Company's product liability claims which are discussed above, as well as the related legal defense costs, amounted to approximately $2.0 billion and $2.1 billion on December 31, 2022 and September 30, 2022, respectively. 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. In view of the uncertainties discussed above, 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, financial condition, and/or consolidated cash flows.
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Revenues |
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Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenues | Revenues The Company’s policies for recognizing sales have not changed from those described in the Company’s 2022 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 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 Company’s rebate liability at December 31, 2022 and September 30, 2022 was $560 million and $525 million, respectively. 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 $2.5 billion at December 31, 2022. 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 $1.9 billion at December 31, 2022. 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.
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Segment Data |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Data | 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. Prior to its spin-off on April 1, 2022, the Company reported the Diabetes Care business as an organizational unit within the Medical segment. As such, historical financial information of the Medical segment has been recast in the tables below to reflect the total segment revenues and revenues from continuing operations. Revenues and operating income from the Diabetes Care business prior to its spin-off are included in Income from Discontinued Operations, Net of Tax. See Note 2 for further information. Revenues by segment, organizational unit and geographical areas for the three-month periods are detailed below. The Company has no material intersegment revenues.
(a)Certain prior-period amounts were recast to reflect former intercompany transactions with Embecta. Segment income for the three-month periods was as follows:
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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. The measurement date used for these plans is September 30. Net pension cost included the following components for the three-month periods:
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Business Restructuring Charges |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Restructuring Charges | Business Restructuring Charges The Company incurred restructuring costs during the three months ended December 31, 2022, primarily in connection with the Company's simplification and other cost saving initiatives, which were recorded within Acquisition-related integration and restructuring expense. These simplification and other costs saving initiatives are focused on reducing complexity, enhancing product quality, refining customer experience, and improving cost efficiency across all of the Company’s segments. Restructuring liability activity for the three months ended December 31, 2022 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 consisted of:
Intangible amortization expense for the three months ended December 31, 2022 and 2021 was $365 million and $355 million, respectively. The following is a reconciliation of goodwill by business segment:
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Derivative Instruments and Hedging Activities |
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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 had on the Company’s balance sheets and the fair values of the derivatives outstanding at December 31, 2022 and September 30, 2022 were not material. The effects on the Company’s 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. In order to mitigate foreign currency exposure relating to its investments in certain foreign subsidiaries, the Company has hedged the currency risk associated with those investments with certain instruments, such as foreign currency-denominated debt and cross-currency swaps, which are designated as net investment hedges, as well as currency exchange contracts. The notional amounts of the Company’s foreign currency-related derivative instruments as of December 31, 2022 and September 30, 2022 were as follows:
(a)Represent hedges of transactional foreign exchange exposures resulting primarily from intercompany payables and receivables. Gains and 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. Net amounts recognized in Other (expense) income, net, during the three months ended December 31, 2022 and 2021 were immaterial to the Company's consolidated financial results. (b)Represents foreign currency-denominated long-term notes outstanding which were effective as economic hedges of net investments in certain of the Company's foreign subsidiaries. (c)Represents cross-currency swaps which were effective as economic hedges of net investments in certain of the Company's foreign subsidiaries. Net gains or losses relating to the net investment hedges, 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). Upon the termination of a net investment hedge, any net gain or loss included in Accumulated other comprehensive income (loss) relative to the investment hedge remains until the foreign subsidiary investment is disposed of or is substantially liquidated. Net (losses) gains recorded to Accumulated other comprehensive income (loss) relating to the Company's net investment hedges for the three-month periods were as follows:
Interest Rate Risks and Related Strategies The Company uses a mix of fixed and variable rate debt to manage its interest rate exposure, and 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 cash flow or fair value hedges. 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 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, within Interest expense, over the remaining life of the hedged debt. The amounts reclassified from accumulated other comprehensive income relating to cash flow hedges during the three months ended December 31, 2022 and 2021, as well as the amounts expected to be reclassified within the next 12 months, are not material to the Company's consolidated financial results. Net after-tax losses and gains recorded in Other comprehensive income relating to interest rate hedges during the three months ended December 31, 2022 and 2021 were immaterial to the Company’s consolidated financial results. 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. Amounts recorded during the three months ended December 31, 2022 and 2021 were immaterial to the Company's consolidated financial results. The notional amounts of the Company’s interest rate-related derivative instruments as of December 31, 2022 and September 30, 2022 were as follows:
(a)Represents 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. (b)Represents interest rate derivatives entered into to mitigate exposure to interest rate risk related to future debt issuances. 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's commodity derivative forward contracts at December 31, 2022 and September 30, 2022 were immaterial to the Company's consolidated financial results.
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Financial Instruments and Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Instruments and Fair Value Measurements | Financial Instruments and Fair Value Measurements The following reconciles cash and equivalents and restricted cash reported within the Company's condensed consolidated balance sheets at December 31, 2022 and September 30, 2022 to the total of these amounts shown on the Company's consolidated statements of cash flows:
Cash equivalents consist of all highly liquid investments with a maturity of three months or less at time of purchase. Restricted cash consists of cash restricted from withdrawal and usage except for certain product liability matters. The fair values of the Company’s financial instruments are as follows:
(a)These financial instruments are recorded within Cash and equivalents on the condensed consolidated balance sheets. The institutional money market accounts permit daily redemption. The fair values of these investments are based upon the quoted prices in active markets provided by the holding financial institutions. (b)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. Short-term investments are held to their maturities and are carried at cost, which approximates fair value. The short-term investments consist of instruments with maturities greater than three months and less than one year. All other instruments measured by the Company at fair value, including derivatives and contingent consideration liabilities, are immaterial to the Company's condensed consolidated balance sheets. Transfers of trade receivables Over the normal course of its business activities, the Company transfers certain trade receivable assets to third parties under factoring agreements. Per the terms of these agreements, the Company surrenders control over its trade receivables upon transfer. Accordingly, the Company accounts for the transfers as sales of trade receivables by recognizing an increase to Cash and equivalents and a decrease to Trade receivables, net when proceeds from the transactions are received. The costs incurred by the Company in connection with factoring activities were not material to its consolidated financial results. The amounts transferred and yet to be remitted under factoring arrangements are provided below.
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Income Taxes |
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Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Income Tax Expense The Company’s effective income tax rates for the three months ended December 31, 2022 and 2021 were (5.8)% and 5.3%, respectively. The decrease in the Company’s effective tax rate for the three months ended December 31, 2022 was largely due to a remeasurement of deferred tax assets and liabilities upon the approval of a tax incentive.
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Basis of Presentation (Policies) |
3 Months Ended |
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Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Contingencies | The Company is involved, both as a plaintiff and a defendant, in various legal proceedings that arise in the ordinary course of business, including, without limitation, product liability and environmental matters in certain U.S. and international locations. Given the uncertain nature of litigation generally, the Company is not able, in all cases, to estimate the amount or range of loss that could result from an unfavorable outcome of 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, 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 demands (“CIDs”) served by the Department of Justice which are 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 above, 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, financial condition, and/or consolidated cash flows. |
Revenue | 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 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.
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Derivatives | The Company uses derivative instruments to mitigate certain exposures. The Company does not enter into derivative financial instruments for trading or speculative purposes.The Company uses a mix of fixed and variable rate debt to manage its interest rate exposure, and 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 cash flow or fair value hedges.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 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, within Interest expense, over the remaining life of the hedged debt.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. |
Cash and Cash Equivalents | Cash equivalents consist of all highly liquid investments with a maturity of three months or less at time of purchase. |
Cash and Cash Equivalents, Restricted Cash and Cash Equivalents | Restricted cash consists of cash restricted from withdrawal and usage except for certain product liability matters. |
Fair Value of Financial Instruments | The fair values of these investments are based upon the quoted prices in active markets provided by the holding financial institutions.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.Short-term investments are held to their maturities and are carried at cost, which approximates fair value. The short-term investments consist of instruments with maturities greater than three months and less than one year. |
Spin-Off of Embecta Corp. (Tables) |
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Discontinued Operations and Disposal Groups [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disposal Groups, Including Discontinued Operations | Details of Income from Discontinued Operations, Net of Tax are as follows:
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Shareholders' Equity (Tables) |
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Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Shareholders Equity | Changes in certain components of shareholders' equity for the first quarters of fiscal years 2023 and 2022 were as follows:
(a)Common stock held in trusts consists of the Company’s shares held in rabbi trusts in connection with deferred compensation under the Company’s employee salary and bonus deferral plan and directors’ deferral plan. (b)Represents shares received upon final settlement of an accelerated share repurchase agreement, and the related forward sale contract, entered into during the fourth quarter of fiscal year 2021. The share repurchases 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. In November 2021, the Board of Directors authorized the Company to repurchase up to an additional 10 million shares of BD common stock, for which there is also no expiration date.
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Schedule of Accumulated Other Comprehensive Income (Loss) | The components and changes of Accumulated other comprehensive income (loss) for the first quarters of fiscal years 2023 and 2022 were as follows:
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Earnings Per Share (Tables) |
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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) were as follows:
(a)Excluded from the diluted shares outstanding calculation because the result would have been antidilutive. (b)Excluded from the diluted earnings per share calculation as the exercise prices of these awards were greater than the average market price of the Company’s common shares.
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Segment Data (Tables) |
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from External Customers by Geographic Area | Revenues by segment, organizational unit and geographical areas for the three-month periods are detailed below. The Company has no material intersegment revenues.
(a)Certain prior-period amounts were recast to reflect former intercompany transactions with Embecta.
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||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Information for Company's Segments | Segment income for the three-month periods was as follows:
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Benefit Plans (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Pension and Postretirement Cost | Net pension cost included the following components for the three-month periods:
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Business Restructuring Charges (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Restructuring Accrual Activity | Restructuring liability activity for the three months ended December 31, 2022 was as follows:
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Intangible Assets (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Intangible Assets | Intangible assets 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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Derivative Instruments and Hedging Activities (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Notional Amounts of Outstanding Derivative Positions | The notional amounts of the Company’s foreign currency-related derivative instruments as of December 31, 2022 and September 30, 2022 were as follows:
(a)Represent hedges of transactional foreign exchange exposures resulting primarily from intercompany payables and receivables. Gains and 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. Net amounts recognized in Other (expense) income, net, during the three months ended December 31, 2022 and 2021 were immaterial to the Company's consolidated financial results. (b)Represents foreign currency-denominated long-term notes outstanding which were effective as economic hedges of net investments in certain of the Company's foreign subsidiaries. (c)Represents cross-currency swaps which were effective as economic hedges of net investments in certain of the Company's foreign subsidiaries. The notional amounts of the Company’s interest rate-related derivative instruments as of December 31, 2022 and September 30, 2022 were as follows:
(a)Represents 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. (b)Represents interest rate derivatives entered into to mitigate exposure to interest rate risk related to future debt issuances.
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Schedule of Net Investment Hedges in Accumulated Other Comprehensive Income (Loss) | Net (losses) gains recorded to Accumulated other comprehensive income (loss) relating to the Company's net investment hedges for the three-month periods were as follows:
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Financial Instruments and Fair Value Measurements (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Cash and Cash Equivalents | The following reconciles cash and equivalents and restricted cash reported within the Company's condensed consolidated balance sheets at December 31, 2022 and September 30, 2022 to the total of these amounts shown on the Company's consolidated statements of cash flows:
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Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The fair values of the Company’s financial instruments are as follows:
(a)These financial instruments are recorded within Cash and equivalents on the condensed consolidated balance sheets. The institutional money market accounts permit daily redemption. The fair values of these investments are based upon the quoted prices in active markets provided by the holding financial institutions. (b)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.
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Transfer of Financial Assets Accounted for as Sales | The amounts transferred and yet to be remitted under factoring arrangements are provided below.
|
Spin-Off of Embecta Corp. - Additional Information (Details) $ in Millions |
3 Months Ended |
---|---|
Dec. 31, 2021
USD ($)
| |
Discontinued Operations, Disposed of by Means Other than Sale, Spinoff | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Disposal Group, Including Discontinued Operation, Other Expense | $ 25 |
Spin-Off of Embecta Corp. - Income from Discontinued Operations, Net of Tax (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
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Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Income from Discontinued Operations, Net of Tax | $ 0 | $ 109 |
Discontinued Operations, Disposed of by Means Other than Sale, Spinoff | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Revenues | 277 | |
Cost of products sold | 74 | |
Selling and administrative expense | 38 | |
Research and development expense | 15 | |
Other operating expense, net | (26) | |
Total Operating Costs and Expenses | 153 | |
Operating Income | 123 | |
Interest expense | 0 | |
Other income, net | 0 | |
Income from Discontinued Operations Before Income Taxes | 123 | |
Income tax provision | 14 | |
Income from Discontinued Operations, Net of Tax | 109 | |
Disposal Group, Including Discontinued Operation, Other Expense | $ 25 |
Earnings Per Share - Weighted Average Common Shares Used in Computations of Basic and Diluted Earnings per Share (Detail) - shares shares in Thousands |
3 Months Ended | |
---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Earnings Per Share [Abstract] | ||
Average common shares outstanding (shares) | 283,887 | 284,685 |
Dilutive share equivalents from share-based plans (shares) | 1,453 | 2,038 |
Average common and common equivalent shares outstanding - assuming dilution (shares) | 285,340 | 286,723 |
Convertible Preferred Stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Share equivalents excluded from the diluted shares outstanding calculation (shares) | 5,899 | 5,965 |
Share Based Compensation | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Share equivalents excluded from the diluted shares outstanding calculation (shares) | 1,374 | 730 |
Contingencies (Detail) $ in Thousands |
1 Months Ended | 3 Months Ended | ||
---|---|---|---|---|
Aug. 31, 2022
USD ($)
|
Apr. 30, 2022
USD ($)
|
Dec. 31, 2022
USD ($)
plaintiff
lawsuit
claim
|
Sep. 30, 2022
USD ($)
|
|
Loss Contingencies [Line Items] | ||||
Damages awarded | $ 4,800 | $ 255 | ||
Loss contingency accrual | $ 2,000,000 | $ 2,100,000 | ||
GEORGIA | ||||
Loss Contingencies [Line Items] | ||||
Number of EtO lawsuits filed | lawsuit | 220 | |||
Loss Contingency, Number of Plaintiffs | plaintiff | 320 | |||
Gwinnett County, Georgia | ||||
Loss Contingencies [Line Items] | ||||
Number of EtO Sterilization Lawsuits, Allege Injury From Unrelated Defendants | lawsuit | 45 | |||
Gwinnett County, Georgia | Maximum | ||||
Loss Contingencies [Line Items] | ||||
Loss Contingency, Damages Sought, Value | $ 250 | |||
Hernia Product Claims | ||||
Loss Contingencies [Line Items] | ||||
Pending claims | claim | 32,305 |
Segment Data - Additional Information (Detail) |
3 Months Ended |
---|---|
Dec. 31, 2022
segment
| |
Segment Reporting [Abstract] | |
Number of principal business segments (segment) | 3 |
Benefit Plans (Detail) - Pension Plans - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | $ 24 | $ 35 |
Interest cost | 35 | 20 |
Expected return on plan assets | (38) | (48) |
Amortization of prior service credit | (2) | (4) |
Amortization of loss | 17 | 16 |
Settlements | 0 | 5 |
Net pension cost | $ 36 | $ 24 |
Business Restructuring Charges (Detail) $ in Millions |
3 Months Ended |
---|---|
Dec. 31, 2022
USD ($)
| |
Restructuring Reserve [Roll Forward] | |
Beginning Balance | $ 35 |
Charged to expense | 26 |
Cash payments | (26) |
Ending Balance | 31 |
Other Initiatives | |
Restructuring Reserve [Roll Forward] | |
Non-cash settlements | (4) |
Employee Termination | |
Restructuring Reserve [Roll Forward] | |
Beginning Balance | 24 |
Charged to expense | 4 |
Cash payments | (8) |
Ending Balance | 20 |
Employee Termination | Other Initiatives | |
Restructuring Reserve [Roll Forward] | |
Non-cash settlements | 0 |
Other | |
Restructuring Reserve [Roll Forward] | |
Beginning Balance | 11 |
Charged to expense | 22 |
Cash payments | (18) |
Ending Balance | 11 |
Other | Other Initiatives | |
Restructuring Reserve [Roll Forward] | |
Non-cash settlements | $ (4) |
Intangible Assets - Additional Information (Detail) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Intangible amortization expense | $ 365 | $ 355 |
Intangible Assets - Reconciliation of Goodwill by Business Segment (Detail) $ in Millions |
3 Months Ended |
---|---|
Dec. 31, 2022
USD ($)
| |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | $ 24,621 |
Purchase price allocation adjustments | 3 |
Currency translation | 139 |
Goodwill, ending balance | 24,763 |
Medical | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | 10,909 |
Purchase price allocation adjustments | 3 |
Currency translation | 54 |
Goodwill, ending balance | 10,965 |
Life Sciences | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | 888 |
Purchase price allocation adjustments | 0 |
Currency translation | 10 |
Goodwill, ending balance | 898 |
Interventional | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | 12,824 |
Purchase price allocation adjustments | 0 |
Currency translation | 76 |
Goodwill, ending balance | $ 12,900 |
Derivative Instruments and Hedging Activities - Schedule of Notional Amounts of Outstanding Derivative Positions (Detail) - USD ($) $ in Millions |
Dec. 31, 2022 |
Sep. 30, 2022 |
---|---|---|
Foreign Exchange Contracts | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Notional amount of derivative | $ 1,639 | $ 2,766 |
Cross-Currency Swaps | Net investment hedges | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Notional amount of derivative | 1,473 | 910 |
Interest Rate Swaps | Fair value hedges | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Notional amount of derivative | 700 | 700 |
Forward Starting Interest Rate Swaps | Cash flow hedges | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Notional amount of derivative | 500 | 500 |
Foreign Currency-Denominated Debt | Net investment hedges | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Notional amount of derivative | $ 1,801 | $ 2,140 |
Derivative Instruments and Hedging Activities Disclosure - Gains (Losses) on Net Investment Hedges (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Derivative Instruments, Gain (Loss) [Line Items] | ||
Net gains (losses) recorded to Accumulated other comprehensive income (loss), net of tax | $ (80) | $ 41 |
Foreign Currency-Denominated Debt | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Net gains (losses) recorded to Accumulated other comprehensive income (loss), net of tax | (142) | 49 |
Cross-Currency Swaps | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Net gains (losses) recorded to Accumulated other comprehensive income (loss), net of tax | $ (80) | $ 30 |
Financial Instruments and Fair Value Measurements - Cash and Equivalents and Restricted Cash (Details) - USD ($) $ in Millions |
Dec. 31, 2022 |
Sep. 30, 2022 |
Dec. 31, 2021 |
Sep. 30, 2021 |
---|---|---|---|---|
Fair Value Disclosures [Abstract] | ||||
Cash and equivalents | $ 612 | $ 1,006 | ||
Restricted cash | 133 | 153 | ||
Cash and equivalents and restricted cash | $ 744 | $ 1,159 | $ 2,047 | $ 2,392 |
Financial Instruments and Fair Value Measurements - Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis (Details) - USD ($) $ in Millions |
Dec. 31, 2022 |
Sep. 30, 2022 |
---|---|---|
Fair Value Disclosures [Abstract] | ||
Institutional money market accounts | $ 0 | $ 1 |
Current portion of long-term debt | 1,579 | 1,927 |
Long-term debt | $ 12,608 | $ 12,119 |
Financial Instruments and Fair Value Measurements - Additional Information (Detail) |
3 Months Ended |
---|---|
Dec. 31, 2022 | |
Minimum | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Maturity period of short-term investments at the time of purchase | 3 months |
Maximum | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Maturity period of short-term investments at the time of purchase | 1 year |
Financial Instruments and Fair Value Measurements - Transfer of Financial Assets Accounted for as Sales (Details) - USD ($) $ in Millions |
3 Months Ended | ||
---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Sep. 30, 2022 |
|
Fair Value Disclosures [Abstract] | |||
Trade receivables transferred to third parties under factoring arrangements | $ 740 | $ 143 | |
Amounts yet to be collected and remitted to the third parties | $ 314 | $ 323 |
Income Taxes - Additional Information (Details) |
3 Months Ended | |
---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Income Tax Disclosure [Abstract] | ||
Effective Income Tax Rate Reconciliation, Percent | (5.80%) | 5.30% |
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