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 Medical segment produces a broad array of medical devices that are used in a wide range of healthcare settings. The principal product lines in the Medical segment include syringes and pen needles for the injection of insulin and other drugs used in the treatment of diabetes; needles, syringes and intravenous catheters for medication delivery (including safety-engineered and auto-disable devices); prefilled IV flush syringes; regional anesthesia needles and trays; sharps disposal containers; closed-system transfer devices; skin antiseptic products; surgical and laproscopic instrumentation; generic prefilled injectables; intravenous medication safety and infusion therapy delivery systems, including infusion pumps and dedicated disposables; automated medication dispensing and supply management systems; prefillable drug delivery systems provided to pharmaceutical companies and sold to end-users as drug/device combinations; respiratory ventilation and diagnostics equipment and consumables used during respiratory diagnostics and therapy; and consumables used for patient monitoring and anesthesia delivery.

The Life Sciences segment produces products for the safe collection and transport of diagnostics specimens, as well as instruments and reagent systems to detect a broad range of infectious diseases, healthcare-associated infections (“HAIs”) and cancers. The segment also produces research and clinical tools that facilitate the study of cells, and the components of cells, to gain a better understanding of normal and disease processes. The principal products and services in the Life Sciences segment include integrated systems for specimen collection; safety-engineered blood collection products and systems; automated blood culturing and tuberculosis culturing systems; molecular testing systems for infectious diseases and women’s health; microorganism identification and drug susceptibility systems; liquid-based cytology systems for cervical cancer screening; rapid diagnostic assays; microbiology laboratory automation; plated media; fluorescence-activated cell sorters and analyzers; monoclonal antibodies and kits for performing cell analysis; reagent systems for life science research; molecular indexing and next-generation sequencing sample preparation for genomics research; clinical oncology, immunological (HIV) and transplantation diagnostic/monitoring reagents and analyzers; and cell culture media supplements for biopharmaceutical manufacturing.

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.

Distribution of products is primarily through independent distribution channels, and directly to end-users by BD and independent sales representatives. No customer accounted for 10% or more of revenues in any of the three years presented.



(Millions of dollars)	2015				2014				2013
Revenues (A)
Medical	$	6,460		(B)	$	4,573			$	4,306
Life Sciences	3,822				3,872				3,748
Total Revenues	$	10,282			$	8,446			$	8,054
Segment Operating Income
Medical	$	1,530		(C)	$	1,291		(D)	$	1,233
Life Sciences	839				861			(E)	907
Total Segment Operating Income	2,368				2,152				2,140
Unallocated Items (F)	(1,629		)	(G)	(630		)	(H)	(976		)	(I)
Income From Continuing Operations Before Income Taxes	$	739			$	1,522			$	1,165
Segment Assets
Medical	$	20,055			$	4,668			$	4,582
Life Sciences	3,932				3,783				3,776
Total Segment Assets	23,987				8,451				8,357
Corporate and All Other (J)	2,833				3,997				3,792
Total Assets	$	26,820			$	12,447			$	12,149
Capital Expenditures
Medical	$	414			$	420			$	354
Life Sciences	168				155				158
Corporate and All Other	14				16				9
Total Capital Expenditures	$	596			$	592			$	522
Depreciation and Amortization
Medical	$	619			$	293			$	259
Life Sciences	256				251				267
Corporate and All Other	17				18				19
Total Depreciation and Amortization	$	891			$	562			$	546


(A)	Intersegment revenues are not material.


(B)	Includes $20 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 $284 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. Additional disclosures regarding these actions are provided in Note 8.


(D)	Includes $21 million of the charge associated with workforce reduction actions noted above. Also, includes a $6 million charge associated with the decision to terminate a research and development program; the charge relates to program asset write-offs and obligations. Additionally includes $4 million of acquisition-related transaction costs recorded in Selling and administrative expense.

(E)

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. Also, includes an $11 million charge that resulted from the early termination of a European distributor agreement and $10 million of the charge associated with the workforce reduction actions noted above. Additionally includes a $5 million charge due to an adjustment to the carrying amount of an asset that is being held for sale and $1 million of acquisition-related transaction costs recorded in Selling and administrative expense.


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

(G)

Includes financing, transaction, integration and restructuring costs associated with the CareFusion acquisition. Also includes $293 million in recognition of the fair value step-up adjustment recorded relative to CareFusion’s inventory on the acquisition date as well as $16 million of favorable amortization relating to the acquisition-date fair value step-up recorded on CareFusion’s long-term debt. Additional disclosures regarding this acquisition are provided in Note 9. 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. 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.


(H)	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. Also includes $5 million of the charge associated with the workforce reductions noted above.


(I)	Includes the $341 million charge associated with the unfavorable verdict returned in the antitrust and false advertising lawsuit filed against the Company by RTI as well as a $22 million charge associated with a litigation settlement related to indirect purchaser antitrust class action cases. Additional disclosures regarding legal matters are provided in Note 5.


(J)	Includes cash and investments and corporate assets.

Geographic Information

The countries in which the Company has local revenue-generating operations have been combined into the following geographic areas: the United States (including Puerto Rico); Europe; Greater Asia (which includes Japan and Asia Pacific); and Other, which is comprised of Latin America, Canada, and EMA (which includes the Commonwealth of Independent States, Middle East and Africa).

Revenues to unaffiliated customers are based upon the source of the product shipment. Long-lived assets, which include net property, plant and equipment, are based upon physical location.



(Millions of dollars)	2015		2014		2013
Revenues
United States	$	5,069	$	3,417	$	3,353
Europe	2,434		2,383		2,189
Greater Asia	1,545		1,437		1,344
Other	1,234		1,210		1,168
	$	10,282	$	8,446	$	8,054
Long-Lived Assets
United States	$	15,513	$	3,126	$	3,251
Europe	3,876		1,790		1,649
Greater Asia	569		555		519
Other	484		505		505
Corporate	332		340		350
	$	20,774	$	6,317	$	6,276