Note 6 – Segment Data

Effective October 1, 2014, the Company’s organizational structure was realigned to better complement its customer-focused solutions strategy and is based upon two principal business segments: BD Medical (“Medical”) and BD Life Sciences (“Life Sciences”). The composition of the Medical segment did not change from its historical composition as a result of this realignment. The Life Sciences segment consists of the former BD Diagnostics and BD Biosciences segments. Beginning on October 1, 2014, decisions about resource allocation and performance assessment are made separately for the Medical and Life Sciences segments. Prior-period information presented for comparative purposes has been revised to reflect the new two-segment organizational structure. CareFusion, which was acquired on March 17, 2015, operates as part of the Company’s Medical segment. The Company’s two principal business 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.

Financial information for the Company’s segments was as follows:


	Three Months Ended June 30,						Nine Months Ended June 30,
(Millions of dollars)	2015			2014			2015			2014
Revenues (A)
Medical	$	2,199	(B)	$	1,201		$	4,377	(B)	$	3,381
Life Sciences		921			956			2,845			2,863

Total Revenues	$	3,120		$	2,157		$	7,222		$	6,244


Segment Operating Income
Medical	$	483	(C)	$	356	(D)	$	1,115	(C)	$	968	(D)
Life Sciences		197			221			610			653	(E)

Total Segment Operating Income		680			578			1,725			1,621
Unallocated Items (F)		(641	) (G)		(155	)		(1,176	) (H)		(476	) (I)

Income Before Income Taxes	$	39		$	423		$	549		$	1,145

(A)	Intersegment revenues are not material.

(B)	Includes $13 million in amortization of the acquisition-date write-down of CareFusion’s deferred revenue balance that was recorded to reflect a fair value measurement as of the acquisition date.

(C)

Includes an increase of $130 million in non-cash amortization expense relating to the identifiable intangible assets acquired in the CareFusion transaction as well as depreciation expense relating to the fixed assets acquired in the transaction. Additional disclosures regarding the assets acquired in this acquisition are provided in Note 9. Also includes a $5 million adjustment to decrease the liability for employee termination costs recorded relative to certain workforce reduction actions taken in the fourth quarter of fiscal year 2014.

(D)	Includes a $9 million charge associated with the decision to terminate a research and development program; the charge relates to program asset write-offs and obligations.

(E)

Includes an $11 million charge that resulted from the early termination of a European distributor agreement as well as a $20 million charge primarily resulting from the discontinuance of an instrument product development program. The development-related charge is largely attributable to capitalized product software, but also includes a lesser amount attributable to fixed assets.

(F)	Includes primarily interest, net; foreign exchange; corporate expenses; share-based compensation expense; and acquisition-related costs.

(G)

Includes financing, transaction, integration and restructuring costs associated with the CareFusion. Also includes $281 million in recognition of the fair value step-up adjustment recorded relative to CareFusion’s inventory on the acquisition date. Additional disclosures regarding this acquisition are provided in Note 9.

(H)

Includes financing, transaction, integration and restructuring costs associated with the CareFusion acquisition, as well as the recognition of the inventory step-up adjustment, as noted above. Also includes a $12 million charge for RTI’s attorneys’ fees associated with the unfavorable verdict returned in the antitrust and false advertising lawsuit RTI filed against BD. For further discussion, refer to Note 5 in the notes to the financial statements. Additionally includes an acquisition-date accounting gain of $9 million on the previously held investment in CRISI Medical Systems, Inc. (“CRISI”), which the Company fully acquired during the second quarter of 2015.

(I)	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.

Revenues by geographic areas were as follows:


	Three Months Ended June 30,				Nine Months Ended June 30,
(Millions of dollars)	2015		2014		2015		2014
Revenues
United States	$	1,693	$	871	$	3,437	$	2,546
International		1,427		1,286		3,785		3,698

Total Revenues	$	3,120	$	2,157	$	7,222	$	6,244