Note 5 – Segment Data

The Company’s organizational structure is based upon its three principal business segments: BD Medical (“Medical”), BD Diagnostics (“Diagnostics”) and BD Biosciences (“Biosciences”). These segments are strategic businesses that are managed separately because each one develops, manufactures and markets distinct products and services. The Company evaluates performance of its business segments and allocates resources to them primarily based upon operating income. Segment operating income represents revenues reduced by product costs and operating expenses. Segment Operating Income for the Medical and Biosciences segments for the six months ended March 31, 2014 reflect a correction of a $6 million misallocation of costs between the segments for the three months ended December 31, 2013 which was identified subsequent to the issuance of the Company’s condensed consolidated financial statements for the first quarter of fiscal year 2014. This misallocation, which had no impact on the Company’s consolidated results of operations, financial position, or cash flows, resulted in an understatement of the Medical segment’s selling and administrative expense with an offsetting overstatement of the Biosciences segment’s selling and administrative expense. Financial information for the Company’s segments was as follows:


	Three Months Ended March 31,						Six Months Ended March 31,
(millions of dollars)	2014			2013			2014			2013
Revenues (A)
Medical	$	1,116		$	1,062		$	2,180		$	2,045
Diagnostics		653			659			1,325			1,311
Biosciences		302			279			581			544

Total Revenues	$	2,072		$	2,000		$	4,086		$	3,901

Segment Operating Income
Medical	$	317		$	291		$	611		$	579
Diagnostics		131	^(B)		145			293	^(B)		315
Biosciences		67	^(C)		71			139	^(C)		136
Total Segment Operating Income		515			507			1,043			1,030
Unallocated Items (D)		(152	)^(E)		(147	)		(321	)^(E)		(304	)

Income from Continuing Operations Before Income Taxes	$	363		$	360		$	722		$	726

(A)	Intersegment revenues are not material.

(B)	Includes an $11 million charge that resulted from the early termination of a European distributor agreement.

(C)	Includes a $20 million charge primarily resulting from the discontinuance of an instrument product development program. The charge is largely attributable to capitalized product software, but also includes a lesser amount attributable to fixed assets.

(D)	Includes primarily interest, net; foreign exchange; corporate expenses; and share-based compensation expense.

(E)	Includes an $8 million gain resulting from the Company’s receipt of cash proceeds from the sale of a company in which it held a small equity ownership interest.


	Three Months Ended March 31,				Six Months Ended March 31,
(millions of dollars)	2014		2013		2014		2013
Revenues by Organizational Units
BD Medical
Medical Surgical Systems	$	551	$	539	$	1,130	$	1,075
Diabetes Care		251		232		514		475
Pharmaceutical Systems		314		291		535		496

Total		1,116		1,062		2,180		2,045

BD Diagnostics
Preanalytical Systems		342		330		690		665
Diagnostic Systems		311		329		636		646

Total		653		659		1,325		1,311

BD Biosciences		302		279		581		544

Total Revenues	$	2,072	$	2,000	$	4,086	$	3,901

Revenues by geographic areas were as follows:


	Three Months Ended March 31,				Six Months Ended March 31,
(millions of dollars)	2014		2013		2014		2013
Total Revenues
United States	$	826	$	824	$	1,675	$	1,654
International		1,246		1,177		2,412		2,247

Total Revenues	$	2,072	$	2,000	$	4,086	$	3,901