UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)



ý☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, ~~2019~~2020



¨☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 001-4802

Becton, Dickinson and Company

(Exact name of registrant as specified in its charter)



New Jersey				22-0760120
(State or other jurisdiction of incorporation or organization)				(I.R.S. Employer Identification No.)

1 Becton Drive,	Franklin Lakes,	New Jersey	07417-1880	(201)	847-6800
(Address of principal executive offices) (Zip Code)				(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ý No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of large accelerated filer, accelerated filer, smaller reporting company, and emerging growth company in Rule 12b-2 of the Exchange Act.



~~Large accelerated filer~~	ý	~~Accelerated filer~~	¨
~~Non-accelerated filer~~	¨	~~Smaller reporting company~~	¨
~~Emerging growth company~~	¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.			¨

~~Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes~~ ¨ No ý

Securities registered pursuant to Section 12(b) of the Act:



Title of Each Class	Trading Symbol	Name of Each Exchange on Which Registered
Common stock, par value $1.00	BDX	~~New York Stock Exchange~~
~~Depositary Shares, each representing a 1/20th interest in a share of 6.125% Cumulative Preferred Stock Series A~~	~~BDXA~~	~~New York Stock Exchange~~
~~0.368% Notes due June 6, 2019~~	~~BDX19D~~	New York Stock Exchange
1.000% Notes due December 15, 2022	BDX22A	New York Stock Exchange
1.900% Notes due December 15, 2026	BDX26	New York Stock Exchange
1.401% Notes due May 24, 2023	BDX23A	New York Stock Exchange
3.020% Notes due May 24, 2025	BDX25	New York Stock Exchange
0.174% Notes due June 4, 2021	BDX/21	New York Stock Exchange
0.632% Notes due June 4, 2023	BDX/23A	New York Stock Exchange
1.208% Notes due June 4, 2026	BDX/26A	New York Stock Exchange



Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.			☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

There were ~~269,731,903~~271,776,378 shares of Common Stock, $1.00 par value, outstanding at March 31, ~~2019.~~2020.

BECTON, DICKINSON AND COMPANY

FORM 10-Q

For the quarterly period ended March 31, ~~2019~~2020

TABLE OF CONTENTS



		Page Number
Part I.	FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited)
	Condensed Consolidated Balance Sheets	3
	Condensed Consolidated Statements of Income (Loss)	4
	Condensed Consolidated Statements of Comprehensive Income (Loss)	5
	Condensed Consolidated Statements of Cash Flows	6
	Notes to Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2322
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3637
Item 4.	Controls and Procedures	3637

Part II.	OTHER INFORMATION

Item 1.	Legal Proceedings	37
~~Item 1A.~~	~~Risk Factors~~	38
Item 1A.	Risk Factors	39
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	38
~~Item 3.~~	~~Defaults Upon Senior Securities~~	39
Item 4.3.	~~Mine Safety Disclosures~~Defaults Upon Senior Securities	3940
Item 4.	Mine Safety Disclosures	40
Item 5.	Other Information	3940
Item 6.	Exhibits	39

~~Signatures~~		40

~~Exhibits~~Signatures		41

ITEM 1. FINANCIAL STATEMENTS

BECTON, DICKINSON AND COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS

Millions of dollars


	March 31, 2019			September 30, 2018			March 31, 2020			September 30, 2019
Assets	(Unaudited)						(Unaudited)
Current Assets:
Cash and equivalents	$	686		$	1,140		$	2,351		$	536
Restricted cash	81			96			88			54
Short-term investments	10			17			6			30
Trade receivables, net	2,279			2,319			2,160			2,345
Inventories:
Materials	555			510			601			544
Work in process	325			297			357			318
Finished products	1,748			1,644			1,836			1,717
	2,627			2,451			2,793			2,579
Assets held for sale	—			137
Prepaid expenses and other	1,161			1,251			1,156			1,119
Total Current Assets	6,844			7,411			8,555			6,664
Property, Plant and Equipment	10,875			10,485			11,262			11,128
Less allowances for depreciation and amortization	5,402			5,111			5,598			5,469
Property, Plant and Equipment, Net	5,473			5,375			5,664			5,659
Goodwill	23,513			23,600			23,415			23,376
Developed Technology, Net	11,625			12,184			10,545			11,054
Customer Relationships, Net	3,564			3,723			3,261			3,424
Other Intangibles, Net	518			534			567			500
Other Assets	1,061			1,078			1,509			1,088
Total Assets	$	52,598		$	53,904		$	53,516		$	51,765
Liabilities and Shareholders’ Equity
Current Liabilities:
Short-term debt	$	3,057		$	2,601		$	4,357		$	1,309
Payables and accrued expenses	4,050			4,615
Payables, accrued expenses and other current liabilities							4,398			4,345
Total Current Liabilities	7,108			7,216			8,755			5,655
Long-Term Debt	17,556			18,894			16,809			18,081
Long-Term Employee Benefit Obligations	815			1,056			1,253			1,272
Deferred Income Taxes and Other	5,810			5,743
Deferred Income Taxes and Other Liabilities							5,747			5,676
Commitments and Contingencies (See Note 5)
Shareholders’ Equity
Preferred stock	2			2			2			2
Common stock	347			347			347			347
Capital in excess of par value	16,177			16,179			16,288			16,270
Retained earnings	12,792			12,596			12,868			12,913
Deferred compensation	23			22			23			23
Common stock in treasury - at cost	(6,192		)	(6,243		)	(6,158		)	(6,190		)
Accumulated other comprehensive loss	(1,839		)	(1,909		)	(2,419		)	(2,283		)
Total Shareholders’ Equity	21,309			20,994			20,951			21,081
Total Liabilities and Shareholders’ Equity	$	52,598		$	53,904		$	53,516		$	51,765

Amounts may not add due to rounding.

See notes to condensed consolidated financial statements

BECTON, DICKINSON AND COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)

Millions of dollars, except per share data

(Unaudited)


	Three Months Ended March 31,						Six Months Ended March 31,						Three Months Ended March 31,						Six Months Ended March 31,
	2019			2018			2019			2018			2020			2019			2020			2019
Revenues	$	4,195		$	4,222		$	8,355		$	7,302		$	4,253		$	4,195		$	8,479		$	8,355
Cost of products sold	2,221			2,616			4,408			4,143			2,520			2,221			4,766			4,408
Selling and administrative expense	1,089			1,056			2,161			1,829			1,025			1,089			2,146			2,161
Research and development expense	252			259			510			451			264			252			535			510
Acquisitions and other restructurings	101			104			191			458			75			101			161			191
Other operating expense, net	396			—			61			—			—			396			—			61
Total Operating Costs and Expenses	4,059			4,036			7,332			6,881			3,884			4,059			7,607			7,332
Operating Income	136			186			1,024			422			370			136			871			1,024
Interest expense	(171		)	(185		)	(342		)	(343		)	(134		)	(171		)	(270		)	(342		)
Interest income	18			4			6			48			2			18			3			6
Other income (expense), net	20			1			30			(15		)
Other (expense) income, net													(38		)	20			(11		)	30
Income Before Income Taxes	3			6			718			111			200			3			594			718
Income tax (benefit) provision	(17		)	18			98			260
Net Income (Loss)	20			(12		)	619			(148		)
Income tax provision (benefit)													17			(17		)	134			98
Net Income													183			20			461			619
Preferred stock dividends	(38		)	(38		)	(76		)	(76		)	(38		)	(38		)	(76		)	(76		)
Net (loss) income applicable to common shareholders	$	(18	)	$	(50	)	$	544		$	(224	)
Net income (loss) applicable to common shareholders													$	145		$	(18	)	$	385		$	544


Basic (Loss) Earnings per Share	$	(0.07	)	$	(0.19	)	$	2.02		$	(0.90	)
Diluted (Loss) Earnings per Share	$	(0.07	)	$	(0.19	)	$	1.98		$	(0.90	)
Basic Earnings (Loss) per Share													$	0.53		$	(0.07	)	$	1.42		$	2.02
Diluted Earnings (Loss) per Share													$	0.53		$	(0.07	)	$	1.40		$	1.98
Dividends per Common Share	$	0.77		$	0.75		$	1.54		$	1.50		$	0.79		$	0.77		$	1.58		$	1.54

Amounts may not add due to rounding.

See notes to condensed consolidated financial statements

BECTON, DICKINSON AND COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Millions of dollars

(Unaudited)

Three Months Ended
March 31, Six Months Ended
March 31,
2019 2018 2019 2018
Net Income (Loss) $ 20
$ (12 ) $ 619
$ (148 )
Other Comprehensive Income (Loss), Net of Tax
Foreign currency translation adjustments 76
128
42
92
Defined benefit pension and postretirement plans 13
(90 ) 28
(72 )
Cash flow hedges (1 ) (2 ) —
(1 )
Other Comprehensive Income, Net of Tax 88
36
70
18
Comprehensive Income (Loss) $ 108
$ 24
$ 689
$ (130 )



	Three Months Ended March 31,						Six Months Ended March 31,
	2020			2019			2020			2019
Net Income	$	183		$	20		$	461		$	619
Other Comprehensive (Loss) Income, Net of Tax
Foreign currency translation adjustments	(125		)	76			(99		)	42
Defined benefit pension and postretirement plans	17			13			33			28
Cash flow hedges	(109		)	(1		)	(70		)	—
Other Comprehensive (Loss) Income, Net of Tax	(218		)	88			(136		)	70
Comprehensive (Loss) Income	$	(35	)	$	108		$	325		$	689

Amounts may not add due to rounding.

See notes to condensed consolidated financial statements

BECTON, DICKINSON AND COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Millions of dollars

(Unaudited)


	Six Months Ended March 31,						Six Months Ended March 31,
	2019			2018			2020			2019
Operating Activities
Net income (loss)	$	619		$	(148	)
Adjustments to net income (loss) to derive net cash provided by operating activities:
Net income							$	461		$	619
Adjustments to net income to derive net cash provided by operating activities:
Depreciation and amortization	1,126			844			1,067			1,126
Share-based compensation	152			207			141			152
Deferred income taxes	(109		)	(400		)	(136		)	(109		)
Change in operating assets and liabilities	(531		)	702			(258		)	(531		)
Pension obligation	(202		)	(72		)	49			(202		)
Excess tax benefits from payments under share-based compensation plans	38			56
Gain on sale of business	(335		)	—			—			(335		)
Product liability-related charge	331			—			—			331
Other, net	(63		)	(172		)	(128		)	(25		)
Net Cash Provided by Operating Activities	1,027			1,017			1,196			1,027
Investing Activities
Capital expenditures	(362		)	(391		)	(395		)	(362		)
Proceeds from sale of investments, net	5			7
Acquisitions of businesses, net of cash acquired	—			(15,006		)
Proceeds from divestitures, net	477			100			—			477
Other, net	(90		)	(84		)	(147		)	(85		)
Net Cash Provided by (Used for) Investing Activities	30			(15,373		)
Net Cash (Used for) Provided by Investing Activities							(542		)	30
Financing Activities
Change in credit facility borrowings	—			380			210			—
Proceeds from long-term debt and term loans	—			3,622			1,900			—
Payments of debt and term loans	(905		)	(1,833		)	(305		)	(905		)
Dividends paid	(491		)	(449		)	(505		)	(491		)
Other, net	(135		)	(155		)	(90		)	(135		)
Net Cash (Used for) Provided by Financing Activities	(1,532		)	1,565
Net Cash Provided by (Used for) Financing Activities							1,210			(1,532		)
Effect of exchange rate changes on cash and equivalents and restricted cash	5			29			(15		)	5
Net decrease in cash and equivalents and restricted cash	(469		)	(12,762		)
Net increase (decrease) in cash and equivalents and restricted cash							1,849			(469		)
Opening Cash and Equivalents and Restricted Cash	1,236			14,179			590			1,236
Closing Cash and Equivalents and Restricted Cash	$	767		$	1,417		$	2,439		$	767

Non-Cash Investing Activities
Fair value of shares issued as acquisition consideration	$	—		$	8,004
Fair value of equity awards issued as acquisition consideration	$	—		$	613

Amounts may not add due to rounding.

See notes to condensed consolidated financial statements

BECTON, DICKINSON AND COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, ~~2019~~2020

Note 1 – Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and, in the opinion of the management of Becton, Dickinson and Company (the "Company" or "BD"), include all adjustments which are of a normal recurring nature, necessary for a fair presentation of the financial position and the results of operations and cash flows for the periods presented. However, the financial statements do not include all information and accompanying notes required for a presentation in accordance with U.S. generally accepted accounting principles ("U.S. GAAP"). These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s ~~2018~~2019 Annual Report on Form 10-K. Within the financial statements and tables presented, certain columns and rows may not add due to the use of rounded numbers for disclosure purposes. Percentages and earnings per share amounts presented are calculated from the underlying amounts. The results of operations for the interim periods are not necessarily indicative of the results of operations to be expected for the full year.

Note 2 – Accounting Changes

~~New Accounting Principles Adopted~~

On October 1, 2018, the Company adopted Accounting Standards Codification Topic 606, "Revenue from Contracts with Customers" ("ASC 606") using the modified retrospective method. Under ASC 606, revenue is recognized upon the transfer of control of goods or services to customers and reflects the amount of consideration to which a reporting entity expects to be entitled in exchange for those goods or services. The Company assessed the impact of this new standard on its consolidated financial statements based upon a review of contracts that were not completed as of October 1, 2018. Amounts presented in the Company's financial statements for the prior-year periods have not been revised and are reflective of the revenue recognition requirements which were in effect for those periods. This accounting standard adoption, which is further discussed in Note 6, did not materially impact any line items of the Company's consolidated income statements and balance sheet.

On October 1, 2018, the Company retrospectively adopted an accounting standard update which requires all components of net periodic pension and postretirement benefit costs to be disaggregated from the service cost component and to be presented on the income statement outside a subtotal of income from operations, if one is presented. Upon the Company's adoption of the accounting standard update, which did not have a material impact on its consolidated financial statements, all components of the Company’s net periodic pension and postretirement benefit costs, aside from service cost, are recorded to ~~Other income (expense), net~~ ~~on its consolidated income statements for all periods presented. Revisions of prior-year period amounts were estimated based upon previously disclosed amounts.~~

On October 1, 2018, the Company adopted an accounting standard update which requires that the income tax effects of intercompany sales or transfers of assets, except those involving inventory, be recognized in the income statement as income tax expense (or benefit) in the period that the sale or transfer occurs. The Company adopted this accounting standard update, which did not have a material impact on its consolidated financial statements, using the modified retrospective method.

New Accounting Principle ~~Not Yet~~ Adopted

In February 2016, the ~~FASB~~Financial Accounting Standards Board ("FASB") issued a new lease accounting standard which requires lessees to recognize lease assets and lease liabilities on the balance ~~sheet. The new standard also~~sheet, as well as requires expanded disclosures regarding leasing arrangements. The Company ~~will adopt the~~adopted this standard on October 1, 2019 and ~~continues~~elected certain practical expedients permitted under the transition guidance, including a transition method which allows application of the new standard at its adoption date, rather than at the earliest comparative period presented in the financial statements. The Company also elected not to ~~evaluate~~perform any reassessments relative to its expired and existing leases upon its adoption of the new requirements. The Company's adoption of this standard did not materially impact its condensed consolidated financial statements. Additional disclosures regarding the Company’s lease arrangements are provided in Note 15.

New Accounting Principles Not Yet Adopted

In June 2016, the FASB issued a new accounting standard which requires earlier recognition of credit losses on loans and other financial instruments held by entities, including trade receivables. The new standard requires entities to measure all expected credit losses for financial assets held at each reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. The Company is currently evaluating the impact that this new accounting standard will have on its consolidated financial ~~statements.~~statements upon its adoption on October 1, 2020.

In August 2018, the FASB issued a new accounting standard to align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal use software license). The standard is effective for the Company on October 1, 2020, but early adoption is permitted, including adoption in any interim period. The Company is currently evaluating the impact that this new accounting standard will have on its consolidated financial statements upon its adoption.

Note 3 – Shareholders' Equity

Changes in certain components of shareholders' equity for the first two quarters of fiscal years ~~2019~~2020 and ~~2018~~2019 were as follows:

Common
Stock Issued
at Par Value

Capital in
Excess of
Par Value

Retained
Earnings

Deferred
Compensation
Treasury Stock
(Millions of dollars)
Shares (in
thousands)
Amount
Balance at September 30, 2018 $ 347
$ 16,179
$ 12,596
$ 22
(78,463 ) $ (6,243 )
Net income —
—
599
—
—
—
Common dividends ($0.77 per share) —
—
(207 ) —
—
—
Preferred dividends —
—
(38 ) —
—
—
Common stock issued for share-based compensation and other plans, net —
(97 ) —
2
851
9
Share-based compensation —
92
—
—
—
—
Common stock held in trusts, net (a) —
—
—
—
(12 ) —
Effect of changes in accounting principles (see Note 2) —
—
68
—
—
—
Balance at December 31, 2018 $ 347
$ 16,174
$ 13,018
$ 24
(77,624 ) $ (6,235 )
Net income —
—
20
—
—
—
Common dividends ($0.77 per share) —
—
(208 ) —
—
—
Preferred dividends —
—
(38 ) —
—
—
Common stock issued for share-based compensation and other plans, net —
(57 ) (1 ) (1 ) 618
42
Share-based compensation —
60
—
—
—
—
Common stock held in trusts, net (a) —
—
—
—
50
—
Balance at March 31, 2019 $ 347
$ 16,177
$ 12,792
$ 23
(76,955 ) $ (6,192 )



	Common Stock Issued at Par Value		Capital in Excess of Par Value			Retained Earnings			Deferred Compensation			Treasury Stock
(Millions of dollars)	Common Stock Issued at Par Value		Capital in Excess of Par Value			Retained Earnings			Deferred Compensation			Shares (in thousands)		Amount
Balance at September 30, 2019	$	347	$	16,270		$	12,913		$	23		(76,260	)	$	(6,190	)
Net income	—		—			278			—			—		—
Common dividends ($0.79 per share)	—		—			(215		)	—			—		—
Preferred dividends	—		—			(38		)	—			—		—
Common stock issued for share-based compensation and other plans, net	—		(32		)	—			1			758		(38		)
Share-based compensation	—		82			—			—			—		—
Common stock held in trusts, net (a)	—		—			—			—			(12	)	—
Balance at December 31, 2019	$	347	$	16,320		$	12,938		$	24		(75,514	)	$	(6,228	)
Net income	—		—			183			—			—		—
Common dividends ($0.79 per share)	—		—			(215		)	—			—		—
Preferred dividends	—		—			(38		)	—			—		—
Common stock issued for share-based compensation and other plans, net	—		(91		)	—			(1		)	573		70
Share-based compensation	—		58			—			—			—		—
Common stock held in trusts, net (a)	—		—			—			—			30		—
Balance at March 31, 2020	$	347	$	16,288		$	12,868		$	23		(74,911	)	$	(6,158	)

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, 2017 $ 347
$ 9,619
$ 13,111
$ 19
(118,745 ) $ (8,427 )
Net loss —
—
(136 ) —
—
—
Common dividends ($0.75 per share) —
—
(172 ) —
—
—
Preferred dividends —
—
(38 ) —
—
—
Common stock issued for acquisition —
6,487
—
—
37,306
2,121
Common stock issued for share-based compensation and other plans, net —
(51 ) —
—
1,021
(37 )
Share-based compensation —
142
—
—
—
—
Common stock held in trusts, net (a) —
—
—
—
(27 ) —
Balance at December 31, 2017 $ 347
$ 16,197
$ 12,765
$ 19
(80,445 ) $ (6,343 )
Net loss —
—
(12 ) —
—
—
Common dividends ($0.75 per share) —
—
(201 ) —
—
—
Preferred dividends —
—
(38 ) —
—
—
Common stock issued for acquisition —
(9 ) —
—
—
—
Common stock issued for share-based compensation and other plans, net —
(94 ) (1 ) 2
943
44
Share-based compensation —
76
—
—
—
—
Common stock held in trusts, net (a) —
—
—
—
17
—
Effect of changes in accounting principles (see Note 2) —
—
103
—
—
—
Balance at March 31, 2018 $ 347
$ 16,170
$ 12,616
$ 21
(79,485 ) $ (6,300 )



	Common Stock Issued at Par Value		Capital in Excess of Par Value			Retained Earnings			Deferred Compensation			Treasury Stock
(Millions of dollars)	Common Stock Issued at Par Value		Capital in Excess of Par Value			Retained Earnings			Deferred Compensation			Shares (in thousands)		Amount
Balance at September 30, 2018	$	347	$	16,179		$	12,596		$	22		(78,463	)	$	(6,243	)
Net income	—		—			599			—			—		—
Common dividends ($0.77 per share)	—		—			(207		)	—			—		—
Preferred dividends	—		—			(38		)	—			—		—
Common stock issued for share-based compensation and other plans, net	—		(97		)	—			2			851		9
Share-based compensation	—		92			—			—			—		—
Common stock held in trusts, net (a)	—		—			—			—			(12	)	—
Effect of change in accounting principles	—		—			68			—			—		—
Balance at December 31, 2018	$	347	$	16,174		$	13,018		$	24		(77,624	)	$	(6,235	)
Net income	—		—			20			—			—		—
Common dividends ($0.77 per share)	—		—			(208		)	—			—		—
Preferred dividends	—		—			(38		)	—			—		—
Common stock issued for share-based compensation and other plans, net	—		(57		)	(1		)	(1		)	618		42
Share-based compensation	—		60			—			—			—		—
Common stock held in trusts, net (a)	—		—			—			—			50		—
Balance at March 31, 2019	$	347	$	16,177		$	12,792		$	23		(76,955	)	$	(6,192	)


(a)	Common stock held in trusts represents rabbi trusts in connection with deferred compensation under the Company’s employee salary and bonus deferral plan and directors’ deferral plan.

The components and changes of Accumulated other comprehensive income (loss) for the first two quarters of fiscal years ~~2019~~2020 and ~~2018~~2019 were as follows:



(Millions of dollars)	Total			Foreign Currency Translation			Benefit Plans			Cash Flow Hedges
Balance at September 30, 2019	$	(2,283	)	$	(1,256	)	$	(1,005	)	$	(23	)
Other comprehensive income before reclassifications, net of taxes	63			26			—			37
Amounts reclassified into income, net of taxes	19			—			17			2
Balance at December 31, 2019	$	(2,202	)	$	(1,230	)	$	(988	)	$	16
Other comprehensive loss before reclassifications, net of taxes	(237		)	(125		)	—			(111		)
Amounts reclassified into income, net of taxes	19			—			17			2
Balance at March 31, 2020	$	(2,419	)	$	(1,355	)	$	(971	)	$	(93	)



(Millions of dollars)	Total			Foreign Currency Translation			Benefit Plans			Cash Flow Hedges
Balance at September 30, 2018	$	(1,909	)	$	(1,162	)	$	(729	)	$	(17	)
Other comprehensive (loss) income before reclassifications, net of taxes	(32		)	(35		)	3			(1		)
Amounts reclassified into income, net of taxes	14			—			13			1
Balance at December 31, 2018	$	(1,927	)	$	(1,197	)	$	(714	)	$	(16	)
Other comprehensive income (loss) before reclassifications, net of taxes	74			76			—			(2		)
Amounts reclassified into income, net of taxes	14			—			13			1
Balance at March 31, 2019	$	(1,839	)	$	(1,121	)	$	(701	)	$	(17	)

(Millions of dollars) Total
Foreign Currency
Translation
Benefit Plans

Cash Flow Hedges
Balance at September 30, 2017 $ (1,723 ) $ (1,001 ) $ (703 ) $ (18 )
Other comprehensive loss before reclassifications, net of taxes (36 ) (36 ) —
—
Amounts reclassified into income, net of taxes 18
—
17
1
Balance at December 31, 2017 $ (1,740 ) $ (1,037 ) $ (686 ) $ (17 )
Other comprehensive income before reclassifications, net of taxes 128
128
—
—
Amounts reclassified into income, net of taxes 11
—
9
2
Tax effects reclassified into retained earnings (103 ) —
(99 ) (4 )
Balance at March 31, 2018 $ (1,704 ) $ (909 ) $ (776 ) $ (20 )

The ~~amount~~amounts of foreign currency translation recognized in other comprehensive income during the three and six months ended March 31, ~~2019~~2020 and ~~2018~~2019 included net gains (losses) ~~gains~~ relating to net investment ~~hedges, as further discussed~~hedges. The amounts recognized in ~~Note~~ 13~~. During the second quarter of 2018, as permitted under U.S. GAAP guidance, the Company reclassified stranded income tax effects on items within~~ ~~Accumulated~~ other comprehensive income ~~(loss)~~ ~~resulting from~~relating to cash flow hedges during the ~~enactment of new U.S. tax legislation to~~ ~~Retained earnings.~~ ~~The reclassified tax effects~~three and six months ended March 31, 2020 related to ~~prior service credits and net actuarial losses relating to benefit plans, as well as to terminated cash flow hedges. The tax effects relating to these items~~forward starting interest rate swaps. Additional disclosures regarding the Company's derivatives are ~~generally recognized as such amounts are amortized into earnings.~~provided in Note 12.

Note 4 – Earnings per Share

The weighted average common shares used in the computations of basic and diluted earnings per share (shares in thousands) were as follows:



	Three Months Ended March 31,		Six Months Ended March 31,
	2020	2019	2020	2019
Average common shares outstanding	272,014	269,882	271,555	269,454
Dilutive share equivalents from share-based plans	3,023	—	3,618	4,975
Average common and common equivalent shares outstanding – assuming dilution	275,037	269,882	275,173	274,429

Share equivalents excluded from the diluted shares outstanding calculation because the result would have been antidilutive:
Mandatory convertible preferred stock	11,685	11,685	11,685	11,685
Share-based plans	—	4,405	—	—

In accordance with the terms of the Company's mandatory convertible preferred stock, on the mandatory conversion date of May 1, 2020, the 2.475 million mandatory convertible preferred shares that were issued in May 2017 in connection with the Company's acquisition of C.R. Bard, Inc. ("Bard") were converted into 11.703 million shares of BD common stock.

Three Months Ended
March 31, Six Months Ended
March 31,
2019 2018 2019 2018
Average common shares outstanding 269,882
267,341
269,454
248,484
Dilutive share equivalents from share-based plans —
—
4,975
—
Average common and common equivalent shares outstanding – assuming dilution 269,882
267,341
274,429
248,484

Share equivalents excluded from the diluted shares outstanding calculation because the result would have been antidilutive:
Mandatory convertible preferred stock 11,685
11,685
11,685
11,685
Share-based plans 4,405
6,352
—
5,439

Note 5 – Contingencies

Given the uncertain nature of litigation generally, the Company is not able, in all cases, to estimate the amount or range of loss that could result from an unfavorable outcome of the litigation to which the Company is a party. In accordance with U.S. GAAP, the Company establishes accruals to the extent probable future losses are estimable (in the case of environmental matters, without considering possible third-party recoveries). With respect to putative class action lawsuits in the United States and certain of the Canadian lawsuits described below relating to product liability matters, the Company is unable to estimate a range of reasonably possible losses for the following reasons: (i) all or certain of the proceedings are in early stages; (ii) the Company has not received and reviewed complete information regarding all or certain of the plaintiffs and their medical conditions; and/or (iii) there are significant factual issues to be resolved. In addition, there is uncertainty as to the likelihood of a class being certified or the ultimate size of the class. With respect to the ~~investigative subpoena issued by the Department of Defense Inspector General and the Department of Health and Human Services and the~~ civil investigative demand served by the Department of Justice, as discussed below, the Company is unable to estimate a range of reasonably possible losses for the following reasons: (i) all or certain of the proceedings are in early stages; and/or (ii) there are significant factual and legal issues to be resolved.

In view of the uncertainties discussed below, the Company could incur charges in excess of any currently established accruals and, to the extent available, liability insurance. In the opinion of management, any such future charges, individually or in the aggregate, could have a material adverse effect on the Company’s consolidated results of operations and consolidated cash flows.

Product Liability Matters

The Company believes that certain settlements and judgments, as well as legal defense costs, relating to product liability matters are or may be covered in whole or in part under its product liability insurance policies with a limited number of insurance carriers, or, in some circumstances, indemnification obligations to the Company from other parties, which if disputed, the Company intends to vigorously contest. Amounts recovered under the Company’s product liability insurance policies or indemnification arrangements may be less than the stated coverage limits or less than otherwise expected and may not be adequate to cover damages and/or costs relating to claims. In addition, there is no guarantee that insurers or other parties will pay claims or that coverage or indemnity will be otherwise available.

Hernia Product Claims

As of March 31, ~~2019,~~2020, the Company is defending approximately ~~6,755~~16,815 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, but claims are also pending in other state and/or federal court jurisdictions. In addition, those claims include multiple putative class actions in Canada. Generally, the Hernia Product Claims seek damages for personal injury allegedly resulting from use of the products. From time to time, the Company engages in resolution discussions with plaintiffs’ law firms regarding certain of the Hernia Product Claims, but the Company also intends to vigorously defend Hernia Product Claims that do not settle, including through litigation. Trials are scheduled throughout ~~2019~~2020 in various state and/or federal ~~courts.~~courts, with the first trial currently scheduled for June 2020 in Rhode Island. The Company expects additional trials of Hernia Product Claims to take place over the next 12 months. In August 2018, a new hernia multi-district litigation (“MDL”) was ordered to be established in the Southern District of Ohio. The Company cannot give any assurances that the resolution of the Hernia Product Claims that have not settled, including asserted and unasserted claims and the putative class action lawsuits, will not have a material adverse effect on the Company’s business, results of operations, financial condition and/or liquidity.

Women’s Health Product Claims

As of March 31, ~~2019,~~2020, the Company is defending approximately ~~1,050~~580 product liability claims involving the Company’s line of pelvic mesh devices. The majority of those claims are currently pending in ~~either the~~various federal ~~MDL in the United States District Court for the Southern District of West Virginia, or~~court jurisdictions, and a coordinated proceeding in New Jersey State Court, but claims are also pending in other state ~~and/or federal~~ court jurisdictions. In addition, those claims include putative class actions filed in the United States. Not included in the figures above are approximately ~~1,015~~1,005 filed and unfiled claims that have been asserted or threatened against the Company but lack sufficient information to determine whether a pelvic mesh device of the Company is actually at issue.

The claims identified above also include products manufactured by both the Company and two subsidiaries of Medtronic plc (as successor in interest to Covidien plc) (“Medtronic”), each a supplier of the Company. Medtronic has an obligation to defend and indemnify the Company with respect to any product defect liability relating to products its subsidiaries had manufactured. ~~As described below, in~~In July 2015, the Company reached an agreement with Medtronic ~~(which was~~in which Medtronic agreed to take responsibility for pursuing settlement of certain of the Women’s Health Product Claims that relate to products distributed by the

Company under supply agreements with Medtronic. In June 2017, the Company amended the agreement with Medtronic to transfer responsibility for settlement of additional Women’s Health Product Claims to Medtronic on terms similar to the July 2015 agreement, including with respect to the obligation to make payments to Medtronic towards these potential settlements. As of March 31, 2020, the Company has paid Medtronic $141 million towards these potential settlements. The Company also may, in ~~June 2017) regarding certain aspects~~its sole discretion, transfer responsibility for settlement of ~~Medtronic’s indemnification obligation.~~additional Women’s Health Product Claims to Medtronic on similar terms. The agreements do not resolve the dispute between the Company and Medtronic with respect to Women’s Health Product Claims that do not settle, if any. The foregoing lawsuits, unfiled claims, putative class actions, and other claims, together with claims that have settled or are the subject of agreements or agreements in principle to settle, are referred to collectively as the “Women’s Health Product Claims.” The Women’s Health Product Claims generally seek damages for personal injury allegedly resulting from use of the products.

As of March 31, ~~2019,~~2020, the Company has reached agreements or agreements in principle with various plaintiffs’ law firms to settle their respective inventories of cases totaling approximately ~~15,160~~15,220 of the Women’s Health Product Claims. The Company believes that these Women’s Health Product Claims are not the subject of Medtronic’s indemnification obligation. These settlement agreements and agreements in principle include unfiled and previously unknown claims held by various plaintiffs’ law firms, which are not included in the approximate number of lawsuits set forth in the first paragraph of this section. Each agreement is subject to certain conditions, including requirements for participation in the proposed settlements by a certain minimum number of plaintiffs. The Company continues to engage in discussions with other plaintiffs’ law firms regarding potential resolution of unsettled Women’s Health Product Claims, which may include additional inventory settlements.

Starting in 2014 in the MDL, the court entered certain pre-trial orders requiring trial work up and remand of a significant number of Women’s Health Product Claims, including an order entered in the MDL on January 30, 2018, that requires the work up and remand of all remaining unsettled cases (the “WHP Pre-Trial Orders”). The WHP Pre-Trial Orders may result in material additional costs or trial verdicts in future periods in defending Women’s Health Product Claims. Trials are anticipated throughout ~~2019~~2020 in state and federal courts. A trial in the New Jersey coordinated proceeding began in March 2018, and in April 2018 a

jury entered a verdict against the Company in the total amount of $68 million ($33 million compensatory; $35 million punitive). The Company is in the process of appealing that verdict. ~~A consolidated trial involving two plaintiffs is scheduled to begin in September 2019 in the New Jersey coordinated proceeding.~~ The Company expects additional trials of Women’s Health Product Claims to take place over the next 12 months, which may potentially include consolidated trials.

In July 2015, as part of the agreement with Medtronic noted above, Medtronic agreed to take responsibility for pursuing settlement of certain of the Women’s Health Product Claims that relate to products distributed by the Company under supply agreements with Medtronic, and the Company has paid Medtronic $121 million towards these potential settlements. In June 2017, the Company amended the agreement with Medtronic to transfer responsibility for settlement of additional Women’s Health Product Claims to Medtronic on terms similar to the July 2015 agreement, including with respect to the obligation to make payments to Medtronic towards these potential settlements. The Company also may, in its sole discretion, transfer responsibility for settlement of additional Women’s Health Product Claims to Medtronic on similar terms. The agreements do not resolve the dispute between the Company and Medtronic with respect to Women’s Health Product Claims that do not settle, if any.

During the course of engaging in settlement discussions with plaintiffs’ law firms, the Company has learned, and may in future periods learn, additional information regarding these and other unfiled claims, or other lawsuits, which could materially impact the Company’s estimate of the number of claims or lawsuits against the Company.

Filter Product Claims

As of March 31, ~~2019,~~2020, the Company is defending approximately ~~6,960~~1,785 product liability claims involving the Company’s line of inferior vena cava filters (collectively, the “Filter Product Claims”). The majority of those claims ~~are currently~~were previously pending in an MDL in the United States District Court for the District of Arizona, but those MDL claims either have been, or are in the process of being, remanded to various federal jurisdictions. Filter Product Claims are also pending in ~~other~~various state ~~and/or federal~~ court jurisdictions, including a coordinated proceeding in Arizona State Court. In addition, those claims include putative class actions filed in the United States and Canada. The Filter Product Claims generally seek damages for personal injury allegedly resulting from use of the products. The Company has limited information regarding the nature and quantity of certain of the Filter Product Claims. The Company continues to receive claims and lawsuits and may in future periods learn additional information regarding other unfiled or unknown claims, or other lawsuits, which could materially impact the Company’s estimate of the number of claims or lawsuits against the Company. ~~Trials~~On May 31, 2019, the MDL Court ceased accepting direct filings or transfers into the Filter Product Claims MDL and, as noted above, remands for non-settled cases have begun and are expected to continue over the next three months. Federal and state court trials are scheduled throughout ~~2019~~2020. As of March 31, 2020, the Company entered into settlement agreements and/or settlement agreements in ~~the MDL and state courts.~~principle for approximately 7,300 cases. On March 30, 2018, a jury in the first MDL trial found the Company liable for negligent failure to warn and entered a verdict in favor of plaintiffs. The jury found the Company was not liable for (a) strict liability design defect; (b) strict liability failure to warn; and (c) negligent design. The Company has appealed that verdict. On June 1, 2018, a jury in the second MDL trial unanimously found in favor of the Company on all claims. On August 17, 2018, the Court entered summary judgment in favor of the Company on all claims in the third MDL trial. On October 5, 2018, a jury in the fourth MDL trial unanimously found in favor of the Company on all claims. The final MDL bellwether trial is scheduled to begin in May 2019. The MDL Court has indicated that as of May 31, 2019, it will no longer accept direct filings or transfers of cases into the Filter Product Claims MDL. The Company expects additional trials of Filter Product Claims may take place over the next 12 months.

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.

In ~~January 2017,~~connection with the ~~Company reached~~settlement of a prior litigation with certain of the Company's insurance carriers, an agreement ~~to resolve litigation filed in~~with the ~~Southern District of New York by its~~Company's insurance carriers ~~in connection with Women’s Health Product Claims and Filter Product Claims. The agreement requires the insurance carriers~~was reached to reimburse the Company for certain future costs incurred in connection with Filter Product Claims up to an agreed amount. For certain product liability claims or lawsuits, the Company does not maintain or has limited remaining insurance coverage.

Other Legal Matters

Since early 2013, the Company has received subpoenas or Civil Investigative Demands from a number of State Attorneys General seeking information related to the sales and marketing of certain of the Company’s products that are the subject of the Hernia Product Claims and the Women’s Health Product Claims. The Company is cooperating with these requests. Although the Company has had, and continues to have, discussions with the State Attorneys General with respect to overall potential resolution of this matter, there can be no assurance that a resolution will be reached or what the terms of any such resolution may be.

In July 2017, a civil investigative demand was served by the Department of Justice seeking documents and information relating to an investigation into possible violations of the False Claims Act in connection with the sales and marketing of FloChec^® and QuantaFlo^TM devices. The Company is cooperating with these requests. Since it is not feasible to predict the outcome of these matters, the Company cannot give any assurances that the resolution of these matters will not have a material adverse effect on the Company’s business, results of operations, financial condition and/or liquidity.

The Company is a potentially responsible party to a number of federal administrative proceedings in the United States brought under the Comprehensive Environment Response, Compensation and Liability Act, also known as “Superfund,” and similar state laws. The affected sites are in varying stages of development. In some instances, the remedy has been completed, while in others, environmental studies are underway or commencing. For several sites, there are other potentially responsible parties that may be jointly or severally liable to pay all or part of cleanup costs. While it is not feasible to predict the outcome of these proceedings, based upon the Company’s experience, current information and applicable law, the Company does not expect these proceedings to have a material adverse effect on its financial condition and/or liquidity. However, one or more of the proceedings could be material to the Company’s business and/or results of operations.

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), was filed in the U.S. District Court for the District of New Jersey against the Company and certain of its officers. The complaint, which purports to be brought on behalf of all persons (other than defendants) who purchased or otherwise acquired the Company's common stock from November 5, 2019 through February 5, 2020, asserts claims for purported violations of Sections 10 and 20 of the Securities Exchange Act of 1934 and SEC Rule 10b-5 promulgated thereunder, and seeks, among other things, damages and costs. The complaint alleges that defendants concealed material information regarding Alaris^TM infusion pumps, including that (1) certain pumps exhibited software errors, (2) the Company was investing in remediation efforts as opposed to other enhancements and (3) the Company was thus reasonably likely to recall certain pumps and/or experience regulatory delays. These alleged omissions, the complaint asserts, rendered certain public statements about the Company’s business, operations and prospects false or misleading, causing investors to purchase stock at an inflated price. The Company believes these claims are without merit and intends to vigorously defend this action.

On April 27, 2020, three putative stockholders, including the named plaintiff in the Kabak complaint, filed motions to be appointed lead plaintiff and for their counsel to be appointed lead counsel pursuant to the Private Securities Litigation Reform Act of 1995. Those motions remain pending.

The Company is also involved both as a plaintiff and a defendant in other legal proceedings and claims that arise in the ordinary course of business. The Company believes that it has meritorious defenses to these suits pending against the Company and is engaged in a vigorous defense of each of these matters.

Litigation Reserves

The Company regularly monitors and evaluates the status of product liability and other legal matters, and may, from time-to-time, engage in settlement and mediation discussions taking into consideration developments in the matters and the risks and uncertainties surrounding litigation. These discussions could result in settlements of one or more of these claims at any time.

In the second ~~quarter~~and fourth quarters of fiscal year 2019, the Company recorded a pre-tax ~~charge~~charges to Other operating expense, net, of approximately $331 million and $582 million, respectively, related to certain of the product liability matters discussed above under the heading “Product Liability Matters,” including the related legal defense costs. The Company recorded ~~this charge~~these charges based on additional information obtained during the ~~quarter, including but not limited to: the allegations~~second and documentation supporting or refuting such allegations; publicly available information regarding similar medical device mass tort settlements; historical information regarding other product liability settlements involving the Company; and the stagefourth quarters of ~~litigation.~~fiscal year 2019.

Accruals for the Company's product liability claims which are ~~specifically~~ discussed above, as well as the related legal defense costs, amounted to approximately ~~$2.0~~$2.3 billion at ~~both~~ March 31, ~~2019~~2020 and $2.5 billion at September 30, ~~2018.~~2019. These accruals, which are generally long-term in nature, are largely recorded within Deferred Income Taxes and Other Liabilities on the Company's condensed consolidated balance sheets. As of March 31, ~~2019~~2020 and September 30, ~~2018,~~2019, the Company had ~~$80~~$87 million and ~~$94~~$53 million, respectively, in qualified settlement funds (“QSFs”), subject to certain settlement conditions, for certain product liability matters. Payments to QSFs are recorded as a component of Restricted cash. The Company's expected recoveries related to product liability claims and related legal defense costs were approximately ~~$152~~$117 million and ~~$343~~$150 million at March 31, ~~2019~~2020 and September 30, ~~2018,~~2019, respectively. A substantial amount of these expected recoveries at March 31, ~~2019~~2020 and September 30, ~~2018~~2019 related to the Company’s agreements with Medtronic related to certain Women’s Health Product Claims. During the six months ended March 31, 2019, Medtronic provided the Company with releases from liability for certain claims that were the subject of the agreement discussed further above. Accordingly, adjustments to reduce accruals for the Company's product liability claims, as well as the balance recorded for expected recoveries related to product liability claims, were recorded during the six months ended March 31, 2019.

The terms of the Company’s agreements with Medtronic are substantially consistent with the assumptions underlying, and the manner in which, the Company has recorded expected recoveries related to the indemnification obligation. The expected recoveries at March 31, ~~2019~~2020 related to the indemnification obligation are not in dispute with respect to claims that Medtronic settles pursuant to the agreements. As

Note 6 – Revenues

The Company’s policies for recognizing sales have not changed from those described ~~above,~~in the agreements do not resolve the dispute between the Company and Medtronic with respect to Women’s Health Product Claims that do not settle, if any, and the Company also may, in its sole discretion, transfer responsibility for settlement of additional Women’s Health Product Claims to MedtronicCompany’s 2019 Annual Report on ~~similar terms.~~

~~Note 6 – Revenues~~

~~As previously discussed in Note~~ 2~~, the Company adopted ASC 606 using the modified retrospective method.~~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.

~~Timing of Revenue Recognition~~

The Company's revenues are primarily recognized when the customer obtains control of the product sold, which is generally upon shipment or delivery, depending on the delivery terms specified in the sales agreement. Revenues associated with certain instruments and equipment for which installation is complex, and therefore significantly affects the customer’s ability to use and benefit from the product, are recognized when customer acceptance of these installed products has been confirmed. For certain service arrangements, including extended warranty and software maintenance contracts, revenue is recognized ratably over the contract term. The majority of revenues relating to extended warranty contracts associated with certain instruments and equipment is generally recognized within a few years whereas deferred revenue relating to software maintenance contracts is generally recognized over a longer period.

Measurement of Revenues

The Company acts as the principal in substantially all of its customer arrangements and as such, generally records revenues on a gross basis. Revenues exclude any taxes that the Company collects from customers and remits to tax authorities. The Company considers its shipping and handling costs to be costs of contract fulfillment and has made the accounting policy election to record these costs within ~~Selling and administrative expense~~.

Payment terms extended to the Company's customers are based upon commercially reasonable terms for the markets in which the Company's products are sold. Because the Company generally expects to receive payment within one year or less from when control of a product is transferred to the customer, the Company does not generally adjust its revenues for the effects of a financing component. The Company’s estimate of probable credit losses relating to trade receivables is determined based on historical experience and other specific account data. Amounts are written off against the allowances for doubtful accounts when the Company determines that a customer account is ~~uncollectible.~~uncollectable. Such amounts are 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 ~~include~~includes rebates, sales discounts and sales returns. Because these deductions represent estimates of the related obligations, judgment is required when determining the impact of these revenue deductions on gross revenues for a reporting period. Rebates provided by the Company are based upon prices determined under the Company's agreements with its end-user customers. Additional factors considered in the estimate of the Company's rebate liability include the quantification of inventory that is either in stock at or in transit to the Company's distributors, as well as the estimated lag time between the sale of product and the payment of corresponding rebates. The impact ~~of other forms~~ of variable consideration, including sales discounts and sales returns, is not material to the Company's revenues.

The Company's agreements with customers within certain organizational units including Medication Management Solutions, Diagnostic Systems and Biosciences, contain multiple performance obligations including both products and certain services noted above. The transaction price for these agreements is allocated to each performance obligation based upon its relative standalone selling price. Standalone selling price is the amount at which the Company would sell a promised good or service separately to a customer. The Company generally estimates standalone selling prices using its list prices and a consideration of typical discounts offered to customers.

Effects of Revenue Arrangements on Consolidated Balance ~~Sheet~~Sheets

~~Due to the nature of the majority of the Company's products and services, the Company typically does not incur costs to fulfill a contract in advance of providing the customer with goods or services.~~ 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. The Company's costs to obtain contracts are comprised of sales commissions which are paid to the Company's employees or third party agents. The majority of the sales commissions incurred by the Company relate to revenue that is recognized over a period that is less than one year and as such, the Company has elected a practical expedient provided under ASC 606 to record the majority of its expense associated with sales commissions as it is incurred. 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.

~~The Company records contract~~Contract liabilities for unearned revenue that is allocable to performance obligations, such as extended warranty and software maintenance contracts, which are performed over time ~~as discussed further above. These contract liabilities~~ 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 ~~which are further discussed above,~~ 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 ~~and noncancelable~~ contracts with original expected durations of more than one year, which are attributable to products and/or services that have not yet been installed or provided are estimated to be approximately ~~$1.6~~$1.7 billion at March 31, ~~2019 and the~~2020. 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 ~~Systems~~Solutions, and Biosciences units, some contracts also contain minimum purchase commitments of reagents or other consumables and the future sales of these consumables represent additional unsatisfied performance obligations of the Company. The revenue attributable to the unsatisfied minimum purchase commitment-related performance obligations, for contracts with original expected durations of more than one year, is estimated to be approximately $2.7 billion at March 31, 2020. This revenue will be recognized over the customer relationship ~~period, which usually encompasses the current agreement term and subsequent renewal terms.~~period.

Disaggregation of Revenues

A disaggregation of the Company's revenues by segment, organizational unit and geographic region is provided in Note 7.

Note 7 – Segment Data

The Company's organizational structure is based upon ~~three~~3 principal 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.

Effective October 1, 2019, Life Sciences joined its former Preanalytical Systems and Diagnostic Systems organizational units to create a new Integrated Diagnostic Solutions organizational unit which focuses on driving growth and innovation around integrated specimen management to diagnostic solutions. The Integrated Diagnostic Solutions organizational unit consists of the following principal product lines:



Organizational Unit		Principal Product Lines
Integrated Diagnostic Solutions		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 for testing of respiratory infections; microbiology laboratory automation and plated media for clinical and industrial applications.

Revenues by segment, organizational unit and geographical areas for the three and six-month periods are detailed below. The Company has no material intersegment revenues. On December 29, 2017, the Company completed its acquisition of C.R. Bard, Inc. ("Bard"), which is further discussed in Note 9. Bard's operating results were included in the Company’s consolidated results of operations beginning on January 1, 2018 and as such, are not included in the financial results detailed below for the first quarter of the prior-year six-month period.



	Three Months Ended March 31,
(Millions of dollars)	2020						2019
	United States		International		Total		United States		International		Total
Medical
Medication Delivery Solutions (a)	$	518	$	386	$	904	$	482	$	446	$	928
Medication Management Solutions (a)	449		119		568		499		118		617
Diabetes Care	142		137		278		137		133		270
Pharmaceutical Systems	91		309		400		93		273		366
Total segment revenues	$	1,200	$	951	$	2,151	$	1,211	$	969	$	2,180

Life Sciences
Integrated Diagnostic Solutions
Preanalytical Systems	$	208	$	192	$	400	$	171	$	195	$	366
Diagnostic Systems	206		228		434		180		209		389
Total Integrated Diagnostic Solutions	413		420		833		350		404		755
Biosciences	108		172		280		120		177		297
Total segment revenues	$	522	$	591	$	1,113	$	470	$	582	$	1,052

Interventional
Surgery (b)	$	249	$	63	$	312	$	242	$	66	$	308
Peripheral Intervention (b)	242		157		399		225		162		387
Urology and Critical Care (b)	202		76		279		193		75		268
Total segment revenues	$	693	$	297	$	990	$	659	$	303	$	963

Total Company revenues	$	2,415	$	1,839	$	4,253	$	2,341	$	1,854	$	4,195


(a)	Prior-period amounts reflect the reclassification of U.S. revenues of $2 million associated with the movement, effective on October 1, 2019, of certain products from the Medication Delivery Solutions unit to the Medication Management Solutions unit.


(b)	Prior-period amounts reflect the total reclassifications of $31 million of U.S. revenues and $13 million of international revenues associated with the movement, effective on October 1, 2019, of certain products from the Surgery unit and the Urology and Critical Care unit to the Peripheral Intervention unit.


	Three Months Ended March 31,												Six Months Ended March 31,
(Millions of dollars)	2019						2018						2020						2019
	United States		International		Total		United States		International		Total		United States		International		Total		United States		International		Total
Medical
Medication Delivery Solutions(a)	$	484	$	446	$	929	$	504	$	454	$	958	$	1,038	$	814	$	1,852	$	1,000	$	883	$	1,884
Medication Management Solutions(a)	497		118		615		461		120		581		912		231		1,143		1,007		236		1,242
Diabetes Care	137		133		270		131		136		267		281		266		547		282		261		544
Pharmaceutical Systems	93		273		366		82		284		366		174		525		699		161		485		646
Total segment revenues	$	1,211	$	969	$	2,180	$	1,178	$	994	$	2,172	$	2,404	$	1,836	$	4,241	$	2,450	$	1,865	$	4,316

Life Sciences
Integrated Diagnostic Solutions
Preanalytical Systems	$	171	$	195	$	366	$	181	$	200	$	381	$	410	$	388	$	798	$	371	$	387	$	758
Diagnostic Systems	180		209		389		201		209		410		390		446		835		355		416		771
Total Integrated Diagnostic Solutions													799		834		1,633		726		803		1,529
Biosciences	120		177		297		116		191		307		260		342		603		228		350		579
Total segment revenues	$	470	$	582	$	1,052	$	498	$	600	$	1,098	$	1,060	$	1,176	$	2,236	$	954	$	1,153	$	2,108

Interventional
Surgery	$	271	$	75	$	345	$	276	$	75	$	351
Peripheral Intervention	194		148		342		194		145		338
Urology and Critical Care	195		80		275		180		84		264
Surgery (b)													$	505	$	133	$	638	$	488	$	130	$	618
Peripheral Intervention (b)													467		327		794		448		321		769
Urology and Critical Care (b)													409		161		570		388		158		545
Total segment revenues	$	659	$	303	$	963	$	649	$	303	$	952	$	1,381	$	621	$	2,002	$	1,323	$	609	$	1,932

Total Company revenues	$	2,341	$	1,854	$	4,195	$	2,325	$	1,898	$	4,222	$	4,845	$	3,634	$	8,479	$	4,728	$	3,628	$	8,355


(a)	Prior-period amounts reflect the reclassification of U.S. revenues of $3 million associated with the movement, effective on October 1, 2019, of certain products from the Medication Delivery Solutions unit to the Medication Management Solutions unit.


(b)	Prior-period amounts reflect the total reclassifications of $63 million of U.S. revenues and $28 million of international revenues associated with the movement, effective on October 1, 2019, of certain products from the Surgery unit and the Urology and Critical Care unit to the Peripheral Intervention unit.

Six Months Ended March 31,
(Millions of dollars) 2019 2018
United States International Total United States International Total
Medical
Medication Delivery Solutions $ 1,004
$ 883
$ 1,887
$ 874
$ 826
$ 1,700
Medication Management Solutions 1,003
236
1,239
932
237
1,168
Diabetes Care 282
261
544
277
267
544
Pharmaceutical Systems 161
485
646
136
475
612
Total segment revenues $ 2,450
$ 1,865
$ 4,316
$ 2,218
$ 1,806
$ 4,024

Life Sciences
Preanalytical Systems $ 371
$ 387
$ 758
$ 366
$ 391
$ 756
Diagnostic Systems 355
416
771
367
423
791
Biosciences 228
350
579
224
372
596
Total segment revenues $ 954
$ 1,153
$ 2,108
$ 957
$ 1,186
$ 2,143

Interventional
Surgery $ 545
$ 148
$ 693
$ 428
$ 99
$ 528
Peripheral Intervention 385
294
679
198
146
344
Urology and Critical Care 393
168
560
180
84
264
Total segment revenues $ 1,323
$ 609
$ 1,932
$ 806
$ 329
$ 1,135

Total Company revenues $ 4,728
$ 3,628
$ 8,355
$ 3,982
$ 3,321
$ 7,302

Segment income for the three and six-month periods was as follows:


	Three Months Ended March 31,						Six Months Ended March 31,						Three Months Ended March 31,						Six Months Ended March 31,
(Millions of dollars)	2019			2018			2019			2018			2020			2019			2020			2019
Income Before Income Taxes
Medical (a) (b)	$	599		$	588		$	1,265		$	1,211		$	443		$	599		$	1,007		$	1,265
Life Sciences(c)	293			336			598			652			285			293			646			598
Interventional ~~(b)~~	231			(154		)	441			(72		)	213			231			455			441
Total Segment Operating Income	1,123			770			2,303			1,791			941			1,123			2,109			2,303
Acquisitions and other restructurings	(101		)	(104		)	(191		)	(458		)	(75		)	(101		)	(161		)	(191		)
Net interest expense	(153		)	(181		)	(336		)	(295		)	(132		)	(153		)	(266		)	(336		)
Other unallocated items ~~(c)~~(d)	(866		)	(479		)	(1,058		)	(926		)	(534		)	(866		)	(1,087		)	(1,058		)
Income Before Income Taxes	$	3		$	6		$	718		$	111
Total Income Before Income Taxes													$	200		$	3		$	594		$	718

(a)

The amounts for the three and six months ended March 31, 2020 include a probable estimate of future costs within the Medication Management Solutions unit associated with remediation efforts related to Alaris^TM infusion pumps of $199 million and $258 million, respectively, which were recorded to Cost of products sold. Based on the course of remediation efforts, it is possible that the estimate of future costs could increase over time.


(b)	The amounts for the three and six-month periods in 2019 ~~include~~included $65 million of estimated remediation costs recorded to Other operating expense, net relating to a recall of a product component, which generally pre-dated the Company's acquisition of CareFusion in fiscal year 2015, within the Medication Management Solutions unit's infusion systems platform.


~~(b)~~	The amounts in 2018 included expense of $53 million and $369 million for the Medical and Interventional segments, respectively, related to the recognition of a fair value step-up adjustment of $422 million related to Bard's inventory on the acquisition date.


(c)	The amounts for the three and six-month periods in 2020 include a charge of $39 million recorded to Cost of products sold to write down the carrying value of certain intangible assets in the Biosciences unit.

(d)

Primarily comprised of foreign exchange, certain general and administrative expenses and share-based compensation expense. The amounts for the three and six-month periods in 2019 include a pre-tax charge of $331 million related to certain product liability matters, which is further discussed in Note 5.5. In addition, the amount for the six months ended March 31, 2019 included the pre-tax gain recognized on the Company's sale of its Advanced Bioprocessing business of approximately $335 million, which is further discussed in Note ~~10.~~9.

Note 8 – 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 and six months ended March 31:


	Three Months Ended March 31,						Six Months Ended March 31,						Three Months Ended March 31,						Six Months Ended March 31,
(Millions of dollars)	2019			2018			2019			2018			2020			2019			2020			2019
Service cost	$	33		$	34		$	68		$	64		$	39		$	33		$	79		$	68
Interest cost	26			22			54			41			21			26			43			54
Expected return on plan assets	(45		)	(40		)	(91		)	(72		)	(48		)	(45		)	(97		)	(91		)
Amortization of prior service credit	(3		)	(3		)	(7		)	(7		)	(3		)	(3		)	(7		)	(7		)
Amortization of loss	19			19			39			39			25			19			50			39
Settlements	—			2			—			2
Net pension cost	$	31		$	35		$	63		$	67		$	34		$	31		$	68		$	63

The amounts provided above for amortization of prior service credit and amortization of loss represent the reclassifications of prior service credits and net actuarial losses that were recognized in Accumulated other comprehensive income (loss) in prior periods.

~~As further discussed in Note 2, upon adopting an accounting standard update on October 1, 2018, all~~ All components of the Company’s net periodic pension ~~and postretirement benefit costs,~~cost, aside from service cost, are recorded to Other income (expense), net on its condensed consolidated statements of ~~income, for all periods presented.~~income.

Note 9 ~~– Acquisition~~

~~Bard~~

On December 29, 2017, the Company completed its acquisition of Bard. The operating activities of Bard from the acquisition date through December 31, 2017 were not material to the Company’s consolidated results of operations. As such, Bard's operating results were included in the Company’s consolidated results of operations beginning on January 1, 2018. During the first quarter of fiscal year 2019, the Company finalized its allocation of the fair value of consideration transferred to the individual assets acquired and liabilities assumed in this acquisition, which resulted in no material adjustments to the allocation.

~~Note 10~~ – Divestiture

~~The~~In October 2018, the Company completed the sale of its Life Sciences segment's Advanced Bioprocessing business in October 2018 pursuant to a definitive agreement that was signed in September 2018. Assets held for sale on the consolidated balance sheet at September 30, 2018, subject to this agreement, were approximately $137 million. Liabilities held for sale under the agreement were immaterial.business. The Company recognized a pre-tax gain on the sale of approximately $335 million which was recorded as a component of Other operating expense, net~~. The historical financial results for~~in the ~~Advanced Bioprocessing business have not been classified as a discontinued operation.~~first quarter of fiscal year 2019.

Note 1110 – Business Restructuring Charges

The Company incurred restructuring costs during the six months ended March 31, ~~2019, largely~~2020, in connection with ~~its~~the Company's acquisition of Bard and portfolio rationalization initiatives, which were largely recorded as within Acquisitions and other restructurings. Restructuring liability activity for the six months ended March 31, ~~2019~~2020 was as follows:



(Millions of dollars)	Employee Termination						Other						Total
	Bard			Other Initiatives			Bard (a)			Other Initiatives			Bard			Other Initiatives
Balance at September 30, 2019	$	22		$	31		$	1		$	3		$	23		$	34
Charged to expense	6			(2		)	23			14			29			12
Cash payments	(12		)	(23		)	(5		)	(12		)	(17		)	(35		)
Non-cash settlements	—			—			(16		)	(2		)	(16		)	(2		)
Balance at March 31, 2020	$	16		$	6		3			$	3		$	19		$	9

(Millions of dollars)
Employee
Termination
Other Total
Bard Other Initiatives Bard (a) Other Initiatives Bard Other Initiatives
Balance at September 30, 2018 $ 33
$ 23
$ —
$ 4
$ 33
$ 27
Charged to expense 9
8
38
17
47
25
Cash payments (22 ) (11 ) (2 ) (14 ) (24 ) (25 )
Non-cash settlements —
—
(36 ) (4 ) (36 ) (4 )
Balance at March 31, 2019 $ 20
$ 20
—
$ 3
$ 20
$ 23


(a)	Largely represents the cost associated with certain pre-acquisition equity awards of Bard which, to encourage post-acquisition employee retention, were converted to BD equity awards with substantially the same terms and conditions as were applicable under such Bard awards immediately prior to the acquisition date.

Note 1211 – Intangible Assets

Intangible assets consisted of:



	March 31, 2020				September 30, 2019
(Millions of dollars)	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Amortized intangible assets
Developed technology	$	13,985	$	3,440	$	13,960	$	2,906
Customer relationships	4,606		1,345		4,608		1,183
Product rights	106		61		110		60
Trademarks	407		110		407		102
Patents and other	493		315		445		305
Amortized intangible assets	$	19,597	$	5,271	$	19,530	$	4,555
Unamortized intangible assets
Acquired in-process research and development (a)	$	46			$	1
Trademarks	2				2
Unamortized intangible assets	$	48			$	3

March 31, 2019 September 30, 2018
(Millions of dollars)
Gross
Carrying
Amount

Accumulated
Amortization

Gross
Carrying
Amount

Accumulated
Amortization
Amortized intangible assets
Developed technology $ 13,976
$ 2,352
$ 13,966
$ 1,782
Customer relationships 4,586
1,022
4,584
861
Product rights 118
60
121
58
Trademarks 407
93
407
84
Patents and other 407
295
397
288
Amortized intangible assets $ 19,495
$ 3,822
$ 19,475
$ 3,073
Unamortized intangible assets
Acquired in-process research and development $ 31
$ 37

Trademarks 2
2

Unamortized intangible assets $ 33
$ 39


(a)	The increase in the carrying value of assets in 2020 was attributable to an immaterial acquisition which occurred during the second quarter of fiscal year 2020.

Intangible amortization expense for the three months ended March 31, 2020 and 2019 ~~and 2018~~ was ~~$376~~$347 million and ~~$370~~$376 million, respectively. Intangible amortization expense for the six months ended March 31, 2020 and 2019 was $693 million and ~~2018 was~~ $754 million, ~~and $505 million,~~ respectively. ~~The increase in intangible amortization expense for the six months ended March 31, 2019 was attributable to assets acquired in the Bard transaction, which is further discussed in Note 9.~~

The following is a reconciliation of goodwill by business segment:

(Millions of dollars) Medical Life Sciences Interventional Total
Goodwill as of September 30, 2018 $ 10,054
   $ 775
$ 12,771
   $ 23,600
Divestiture-related adjustments —
3
—
3
Purchase accounting adjustments (a) (15 ) —
(70 ) (84 )
Currency translation (3 ) (2 ) —
(5 )
Goodwill as of March 31, 2019 $ 10,036
   $ 776
$ 12,701
   $ 23,513



(Millions of dollars)	Medical			Life Sciences			Interventional			Total
Goodwill as of September 30, 2019	$	9,989		$	772		$	12,615		$	23,376
Acquisitions (a)	10			58			—			68
Currency translation	(2		)	(1		)	(26		)	(29		)
Goodwill as of March 31, 2020	$	9,997		$	828		$	12,589		$	23,415


(a)	~~The purchase accounting adjustments~~Represents goodwill recognized relative to certain acquisitions which were ~~primarily driven by adjustments to tax-related balances.~~not material individually or in the aggregate.

Note 1312 – 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 have on financial position, 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~~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 instruments, such as foreign currency-denominated debt, cross-currency swaps and currency ~~options.~~ exchange contracts, which are designated as net investment hedges.

Hedges of the transactional foreign exchange exposures resulting primarily from intercompany payables and receivables are undesignated hedges. As such, the gains or 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. The net amounts recognized in Other (expense) income, ~~(expense),~~ net, during the three and six months ended March 31, ~~2019~~2020 and ~~2018~~2019 were immaterial to the Company's consolidated financial results.

The total notional amounts of the Company’s outstanding foreign exchange contracts as of March 31, ~~2019~~2020 and September 30, ~~2018~~2019 were ~~$1.5~~$1.2 billion and ~~$3.1~~$2.3 billion, respectively.

~~In order to mitigate~~Certain of the Company's foreign ~~currency exposure relating to its~~currency-denominated long-term notes outstanding, which had a total carrying value of $1.4 billion as of March 31, 2020 and September 30, 2019, were designated as, and were effective as, economic hedges of net investments in certain of the Company's foreign ~~subsidiaries, the~~subsidiaries. The Company has entered into cross-currency swaps, all of which are designated ~~$2.6~~and effective as economic hedges of net investments in certain of the Company's foreign subsidiaries. The notional amounts of the cross-currency swaps were $3.0 billion and $2.3 billion as of ~~Euro-denominated debt~~March 31, 2020 and ~~$327 million of British Pound-denominated debt as net investment hedges. Accordingly, net~~September 30, 2019, respectively.

Net gains or losses relating to ~~this debt,~~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). ~~Net (losses) gains recorded to~~ 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 gains (losses) recorded to Accumulated other comprehensive income (loss) relating to the Company's net investment hedges for the three and six-month periods were as follows:



	Three Months Ended March 31,					Six Months Ended March 31,
(Millions of dollars)	2020		2019			2020		2019
Foreign currency-denominated debt	$	44	$	(18	)	$	10	$	41
Cross-currency swaps	$	193	$	—		$	141	$	—

Three Months Ended
March 31, Six Months Ended
March 31,
(Millions of dollars) 2019 2018 2019 2018
Net (losses) gains on net investment hedges $ (18 ) $ (103 ) $ 41
$ (104 )

Interest Rate Risks and Related Strategies

The Company’s ~~primary interest rate exposure results from changes in U.S. dollar interest rates. The Company’s~~ policy is to manage interest ~~cost~~rate exposure using a mix of fixed and variable rate debt. The Company 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 fair value or cash flow hedges.

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.

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 offset by amounts 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 over the remaining life of the hedged debt. The net realized loss related to terminated interest rate swaps expected to be reclassified and recorded in ~~Interest expense~~ ~~within the next 12 months is $6 million, net of tax.~~

The total notional amount of the Company’s outstanding interest rate swaps designated as fair value hedges was ~~$1.2 billion~~$375 million at March 31, ~~2019~~2020 and September 30, ~~2018.~~2019. The outstanding swaps represent 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. Changes in the fair value of the interest rate swaps offset changes in the fair value of the fixed rate debt. The amounts recorded during the three and six months ended March 31, ~~2019~~2020 and ~~2018~~2019 for changes in the fair value of these hedges were immaterial to the Company's consolidated financial results.

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 over the remaining life of the hedged debt. The net realized loss related to terminated interest rate swaps expected to be reclassified and recorded in Interest expense within the next 12 months is $6 million, net of tax.

The total notional amount of the Company's outstanding forward starting interest rate swaps was $1.5 billion at March 31, 2020 and September 30, 2019. The Company entered into these contracts in the fourth quarter of fiscal year 2019 to mitigate its exposure to interest rate risk. The Company recorded after-tax losses of $111 million and $74 million in Other comprehensive income (loss) relating to these interest rate hedges during the three and six months ended March 31, 2020, respectively.

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~~Company had 0 outstanding commodity derivative forward contracts at March 31, 2020 and the amount outstanding as of September 30, 2019 ~~were~~was immaterial to the Company's consolidated financial results. ~~The Company had no outstanding commodity derivative forward contracts at September 30, 2018.~~

Financial Statement Effects

The fair values of derivative instruments outstanding at March 31, ~~2019~~2020 and September 30, ~~2018~~2019 were not material to the Company's consolidated balance sheets.

The amounts reclassified from accumulated other comprehensive income relating to cash flow hedges during the three and six months ended March 31, ~~2019~~2020 and ~~2018~~2019 were not material to the Company's consolidated financial results.

Note 1413 – Financial Instruments and Fair Value Measurements

The following reconciles cash and equivalents and restricted cash reported within the Company's consolidated balance sheets at March 31, ~~2019~~2020 and September 30, ~~2018~~2019 to the total of these amounts shown on the Company's consolidated statements of cash flows:



(Millions of dollars)	March 31, 2020		September 30, 2019
Cash and equivalents	$	2,351	$	536
Restricted cash	88		54
Cash and equivalents and restricted cash	$	2,439	$	590

(Millions of dollars) March 31, 2019 September 30, 2018
Cash and equivalents $ 686
$ 1,140
Restricted cash 81
96
Cash and equivalents and restricted cash $ 767
$ 1,236

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 Company’s cash and equivalents ~~includes~~include institutional money market accounts which permit daily redemption and the fair values of these investments are based upon the quoted prices in active markets provided by the holding financial institutions, which are considered Level 1 inputs in the fair value hierarchy. The fair values of these accounts were ~~$25 million~~$1.8 billion and ~~$228~~$39 million at March 31, ~~2019~~2020 and September 30, ~~2018,~~2019, respectively. The Company’s remaining cash and equivalents, excluding restricted cash, were ~~$661~~$516 million and ~~$913~~$497 million at March 31, ~~2019~~2020 and September 30, ~~2018,~~2019, respectively.

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.

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, which are considered Level 2 inputs in the fair value hierarchy. The fair value of long-term debt was ~~$18.2~~$17.2 billion and ~~$18.8~~$19.2 billion at March 31, ~~2019~~2020 and September 30, ~~2018,~~2019, respectively. The fair value of the current portion of long-term debt was ~~$3.0~~$2.4 billion and ~~$1.9~~$1.3 billion at March 31, ~~2019~~2020 and September 30, ~~2018,~~2019, respectively.

All other instruments measured by the Company at fair value, including derivatives and contingent consideration liabilities, are immaterial to the Company's consolidated balance sheets.

~~Note 15 – Debt~~

Nonrecurring Fair Value Measurements

In March 2019, the Company redeemed an aggregate principal amount of $250 million of its outstanding floating rate senior unsecured U.S. notes due December 29, 2020. Based upon the $249 million carrying value of the notes redeemed and the $250 million the Company paid to redeem the aggregate principal amount of the notes, the Company recorded a loss on this debt extinguishment transaction in the second quarter of fiscal year 2020, the Company recorded a charge to Cost of products sold of $39 million to write down the carrying value of certain intangible assets in the Biosciences unit. The amount recognized in the second quarter of 2020 was recorded to adjust the carrying amount of assets to the assets' fair values, which were estimated, based upon a market participant's perspective, using Level 3 inputs, as values were estimated using the income approach.

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 Company’s balance of Trade receivables, net at March 31, 2020 excludes trade receivables of $246 million that have been transferred to third parties under factoring arrangements. The costs incurred by the Company in connection with factoring activities were not material to its consolidated financial results. The Company’s transfers of trade receivables during the six months ended March 31, 2019 were not material to its consolidated financial results.

Note 14 – Debt

While the Company deemed its liquidity sufficient to fund its operations and meet its obligations, the Company has taken steps, as a precautionary measure, to preserve its financial flexibility in light of ~~$1 million~~the uncertainty in the global markets resulting from the COVID-19 pandemic. In March 2020, the Company entered into a 364-day $1.4 billion senior unsecured term loan facility and later in March 2020, this agreement was amended to increase the borrowing capacity available under the facility to $2.0 billion. Borrowings outstanding under the term loan facility were $1.9 billion at March 31, 2020 and these proceeds are included in the Company's balance of Cash and equivalents at March 31, 2020.

In April 2020, the Company entered into a supplement to its existing $2.25 billion senior unsecured revolving credit facility which increased the revolving commitments available to the Company under revolving credit facility by $381 million. As such, the Company's senior unsecured revolving credit facility currently provides borrowings of up to $2.63 billion. Proceeds from this facility are used to fund general corporate needs and borrowings outstanding under the revolving credit facility at March 31, 2020 were $695 million.

Note 15 – Leases

The Company leases real estate, vehicles and other equipment which are used in the Company’s manufacturing, administrative and research and development activities. The Company identifies a contract that contains a lease as ~~Other income (expense), net~~,one which conveys a right, either explicitly or implicitly, to control the use of an identified asset in exchange for consideration. The Company’s lease arrangements are generally classified as operating leases. These arrangements have remaining terms ranging from less than one year to approximately 25 years and the weighted-average remaining lease term of the Company’s leases is approximately 7.5 years. An option to renew or terminate the current term of a lease arrangement is included in the lease term if the Company is reasonably certain to exercise that option.

The Company does not recognize a right-of-use asset and lease liability for short-term leases, which have terms of 12 months or less, on its consolidated balance sheet. For the longer-term lease arrangements that are recognized on the Company’s consolidated balance sheet, the right-of-use asset and lease liability is initially measured at the commencement date based upon the present value of the lease payments due under the lease. These payments represent the combination of the fixed lease and fixed non-lease components that are due under the arrangement. The costs associated with the Company’s short-term leases, as well as variable costs relating to the Company’s lease arrangements, are not material to its consolidated financial results.

The implicit interest rates of the Company’s lease arrangements are generally not readily determinable and as such, the Company applies an incremental borrowing rate, which is established based upon the information available at the lease commencement date, to determine the present value of lease payments due under an arrangement. The weighted-average incremental borrowing rate that has been applied to measure the Company’s lease liabilities is 2.3%.

The Company’s lease costs recorded in its consolidated statements of ~~income.~~income for the three and six months ended March 31, 2020 were $32 million and $65 million, respectively. Cash payments arising from the Company’s lease arrangements are reflected on its condensed consolidated statement of cash flows as outflows used for operating activities. The right-of-use assets and lease liabilities recognized on the Company’s condensed consolidated balance sheet as of March 31, 2020 were as follows:



(Millions of dollars)	March 31, 2020
Right-of-use assets recorded in Other Assets	$	427
Current lease liabilities recorded in Payables, accrued expenses and other current liabilities	$	103
Non-current lease liabilities recorded in Deferred Income Taxes and Other Liabilities	$	345

The Company’s payments due under its operating leases are as follows:



(Millions of dollars)
Remaining for 2020	$	58
2021	102
2022	83
2023	55
2024	36
Thereafter	164
Total payments due	499
Less: imputed interest	50
Total	$	448

The Company’s future minimum rental commitments on non-cancelable leases at September 30, 2019, as disclosed in the Company’s 2019 Annual Report on Form 10-K, were as follows:



(Millions of dollars)
2020	$	122
2021	103
2022	83
2023	57
2024	56
Thereafter	123
Total	$	546

~~Note 16 – Income Taxes~~

New U.S. tax legislation, which is commonly referred to as the Tax Cuts and Jobs Act (the "Act"), was enacted on December 22, 2017. Upon completing its accounting for the tax effects of the Act during fiscal year 2019, the Company recognized a net

~~charge of $10 million, which is reflected in the Company's consolidated statement of income within~~ ~~Income tax (benefit) provision, to adjustits one-time transition tax liability for all of its foreign subsidiaries. The Company also recorded charges to~~ ~~Income tax (benefit) provision~~ during fiscal year 2019 of $7 million and $2 million, respectively, to adjust the Company's reevaluation of the permanent reinvestment assertion regarding foreign earnings and its re-measurement of deferred tax balances.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following commentary should be read in conjunction with the condensed consolidated financial statements and accompanying notes presented in this report. Within the tables presented throughout this discussion, certain columns 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.

Company Overview

Becton, Dickinson and Company (“BD”) is a global medical technology company engaged in the development, manufacture and sale of a broad range of medical supplies, devices, laboratory equipment and diagnostic products used by healthcare institutions, physicians, life science researchers, clinical laboratories, the pharmaceutical industry and the general public. The Company's organizational structure is based upon three principal business segments, BD Medical (“Medical”), BD Life Sciences (“Life Sciences”) and BD Interventional (“Interventional”).

BD’s products are manufactured and sold worldwide. Our products are marketed in the United States and internationally through independent distribution channels and directly to end-users by BD and independent sales representatives. We organize our operations outside the United States as follows: Europe; EMA (which includes the Commonwealth of Independent States, the Middle East and Africa); Greater Asia (which includes ~~Japan~~countries in East Asia, South Asia, Southeast Asia and ~~Asia Pacific)~~the Oceania region); Latin America (which includes Mexico, Central America, the Caribbean, and South America); and Canada. We continue to pursue growth opportunities in emerging markets, which include the following geographic regions: Eastern Europe, the Middle East, Africa, Latin America and certain countries within ~~Asia Pacific.~~Greater Asia. We are primarily focused on certain countries whose healthcare systems are expanding.

Recent Developments

A novel strain of coronavirus (“COVID-19”) was officially declared a pandemic by the World Health Organization ("WHO") in March 2020. In efforts to slow the spread of COVID-19, governments around the world have issued travel restrictions as well as recommendations or mandates to avoid large gatherings or to self-quarantine. Such measures have led to a sudden and significant decline in economic activity within a number of countries worldwide. The COVID-19 pandemic has resulted in a decline in elective procedures which has unfavorably impacted our results of operations for the three months ended March 31, 2020. While certain of our organizational units realized positive benefits to revenues from the pandemic for the second quarter, the estimated net impact on total consolidated revenues was an unfavorable impact of $56 million.

We are deploying our capabilities, expertise and scale to address critical health needs related to COVID-19. A molecular test for the detection of COVID-19 for clinical laboratories is currently available and we are also currently developing a new point-of-care test that can detect antibodies in blood to confirm current or past exposure to COVID-19. We have been adhering to guidance provided by the WHO, as well as by health officials in various countries affected by the COVID-19 pandemic, to protect the health and safety of BD employees while ensuring continued availability of BD’s critical medical devices and technologies at this unprecedented time. We have enacted business continuity plans in order to minimize the risk of disruption to our operations and supply chain, and to date, we have not experienced any significant disruption. We have been working closely with governmental officials in an effort to keep our manufacturing facilities (and those of our suppliers) open due to the essential nature of our products.

We continue to generate operating cash flows that are sufficient to meet our short-term liquidity needs. We have taken steps, as a precautionary measure, to preserve our financial flexibility in light of uncertainty in the global markets resulting from the COVID-19 pandemic. Such measures included entering into a $2.0 billion term loan agreement and increasing the commitments available under our revolving credit facility by $381 million, as is further discussed in Note 14 in the Notes to Condensed Consolidated Financial Statements. We believe that given our debt ratings and our capital allocation strategy, we would have access to additional short-term and long-term capital should the need arise. We have not observed any impairments of our assets due to the COVID-19 pandemic and the decline in global economic activity.

We have enacted certain cost containment measures to mitigate the unfavorable impact of the COVID-19 pandemic to our future results of operations. Such actions have included travel restrictions, temporary reductions in executive compensation, a temporary suspension of matching contributions to certain voluntary defined contribution and other benefit plans, as well as temporary work reductions for certain manufacturing teams.

Our business is experiencing weakened demand for our products as a result of a significant decline in medical procedures due to government restrictions and healthcare priorities, particularly with respect to hernia and other elective procedures. We are also seeing delays in instrument placements relating to our medical management solutions, including Pyxis™, as well as decreased non-COVID-19 diagnostic testing and specimen collections, which is being partially offset by higher demand for COVID-19 testing. There has also been a decrease in research activity due to laboratory closures and reduced clinical testing.

Accordingly, our future operating performance, particularly in the short-term, will be subject to volatility. The ultimate impact of the COVID-19 pandemic on our business, results of operations, financial condition and cash flows is dependent on future developments, which are uncertain at this time, including:

The timing and extent of recovery in the global demand for our products, particularly those sold by our Surgery and Peripheral Interventional units which are used in elective medical procedures;

The pace at which hospitals resume patient care that is not related to the COVID-19 pandemic;

The progress of development for our point-of-care test, which was previously discussed above, and the degree to which COVID-19 testing solutions are made available and utilized by governments;

The timing of when research performed by research laboratories and institutions will resume to normal operations; and

The degree of pressure that the weaker macroeconomic environment will put on future healthcare utilization.

Further discussion regarding the impacts of the COVID-19 pandemic on our results for the three months ended March 31, 2020 is provided below.

Overview of Financial Results and Financial Condition

For the three months ended March 31, ~~2019,~~2020, worldwide revenues of ~~$4.195~~$4.253 billion ~~decreased 0.6%~~increased 1.4% from the prior-year period which reflected volume growth of ~~over 3%~~approximately 2.3%, an unfavorable impact from foreign currency translation of approximately ~~2.7%~~1.0% and a favorable impact from pricing ~~pressures~~ of approximately 0.1%. ~~Revenues for~~We estimate that the three months ended March 31, 2019 also reflected an unfavorable impact of approximately 1% which was largely attributable to the Biosciences unit's divestiture of its Advanced Bioprocessing business at the end of October 2018, as is further discussed in Note 10COVID-19 pandemic reduced volume growth in the ~~Notes to Condensed Consolidated Financial Statements.~~second quarter by approximately 1.4%. Volume growth in the second quarter of fiscal year ~~2019 was as follows:~~2020 reflected the following:

Medical segment ~~volume~~revenues in the second quarter reflected strong growth in the Pharmaceutical Systems. Revenues in the Diabetes Care unit benefited from COVID-19 due to increased orders from retailers and distributors in the United States. Medical segment revenues in the second quarter were unfavorably impacted by declines in the Medication Management Solutions and Medication Delivery Solutions units, as is further discussed below.

Life Sciences segment revenues in the second quarter reflected growth in ~~all of~~ the ~~segment's units, particularly~~Integrated Diagnostic Solutions unit that was partially offset by declines in the ~~Medication Management Solutions unit.~~

~~Life Sciences segment volume growth in~~Biosciences unit due to the ~~second quarter was mainly driven by~~COVID-19 pandemic and an unfavorable comparison to the ~~segment's Preanalytical Systems and Biosciences units.~~prior-year period due to the timing of licensing revenues.

Interventional segment ~~volume growth~~revenues in the second quarter reflected sales growth in all ~~units, particularly~~units. Revenues in the Surgery and Peripheral Intervention ~~unit~~units were negatively impacted by the deferral of elective medical procedures as ~~well~~a result of the COVID-19 pandemic.

Second quarter Medical segment revenues were unfavorably impacted by the Medication Management Solutions unit's delay of shipments of Alaris^TM infusion pumps pending compliance with certain 510(k) filing requirements of the U.S. Food and Drug Administration ("FDA"), as previously reported. While we continue to make progress on our regulatory filing related to the Alaris^TM infusion pumps, due to the COVID-19 pandemic and other factors, we no longer expect to submit the 510(k) to the FDA in the ~~Urology and Critical Care unit.~~fourth quarter of fiscal year 2020.

We continue to invest in research and development, geographic expansion, and new product ~~market~~development programs to drive further revenue and profit growth. Our ability to sustain our long-term growth will depend on a number of factors, including our ability to expand our core business (including geographical expansion), develop innovative new products, and continue to improve operating efficiency and organizational effectiveness. While the economic ~~environment~~environments for the healthcare industry and healthcare utilization in the United States isand Europe have been generally stable, destabilization inresulting from the ~~future could~~COVID-19 pandemic or other factors has adversely ~~impact~~impacted our businesses. ~~Additionally, macroeconomic challenges in Europe~~Our businesses will continue to ~~constrain healthcare utilization, although we currently view~~be impacted by the ~~environment as stable.~~COVID-19 pandemic throughout its duration and while government measures implemented in response to the pandemic continue to be in place. In emerging markets, the Company’s growth is dependent primarily on government funding for healthcare systems. In addition, pricing pressure exists globally which could adversely impact our businesses.

Cash flows from operating activities were ~~$1.027~~$1.196 billion in the first six months of fiscal year ~~2019.~~2020. At March 31, ~~2019,~~2020, we had ~~$777 million~~$2.445 billion in cash and equivalents and short-term investments, including restricted cash. We continued to return value to our shareholders in the form of dividends. During the first six months of fiscal year ~~2019,~~2020, we paid cash dividends of ~~$491 million.~~$505 million, including $430 million paid to common shareholders and $76 million paid to preferred shareholders.

Each reporting period, we face currency exposure that arises from translating the results of our worldwide operations to the U.S. dollar at exchange rates that fluctuate from the beginning of such period. A stronger U.S. dollar, compared to the prior-year period, resulted in an unfavorable foreign currency translation impact to our ~~revenue and earnings~~revenues during the second quarter of fiscal year ~~2019.~~2020. We evaluate our results of operations on both a reported and a foreign currency-neutral basis, which excludes the impact of fluctuations in foreign currency exchange rates. As exchange rates are an important factor in understanding ~~period-to-period~~period-to-

period comparisons, we believe the presentation of results on a foreign currency-neutral basis in addition to reported results helps improve investors’ ability to understand our operating results and evaluate our performance in comparison to prior periods. Foreign currency-neutral ("FXN") information compares results between periods as if exchange rates had remained constant period-over-period. We use results on a foreign currency-neutral basis as one measure to evaluate

our performance. We calculate foreign currency-neutral percentages by converting our current-period local currency financial results using the prior-period foreign currency exchange rates and comparing these adjusted amounts to our current-period results. These results should be considered in addition to, not as a substitute for, results reported in accordance with U.S. generally accepted accounting principles ("GAAP"). Results on a foreign currency-neutral basis, as we present them, may not be comparable to similarly titled measures used by other companies and are not measures of performance presented in accordance with U.S. GAAP.

Results of Operations

Medical Segment

The following summarizes second quarter Medical revenues by organizational unit:


	Three months ended March 31,										Three months ended March 31,
(Millions of dollars)	2019		2018		Total Change		Estimated FX Impact		FXN Change		2020		2019		Total Change		Estimated FX Impact		FXN Change
Medication Delivery Solutions(a)	$	929	$	958	(3.0	)%	(3.2	)%	0.2	%	$	904	$	928	(2.5	)%	(1.2	)%	(1.3	)%
Medication Management Solutions(a)	615		581		5.9	%	(1.4	)%	7.3	%	568		617		(7.9	)%	(0.4	)%	(7.5	)%
Diabetes Care	270		267		1.1	%	(3.4	)%	4.5	%	278		270		2.9	%	(1.3	)%	4.2	%
Pharmaceutical Systems	366		366		(0.1	)%	(4.0	)%	3.9	%	400		366		9.4	%	(2.0	)%	11.4	%
Total Medical Revenues	$	2,180	$	2,172	0.4	%	(2.9	)%	3.3	%	$	2,151	$	2,180	(1.4	)%	(1.1	)%	(0.3	)%



	March 31, 2019				September 30, 2018
(Millions of dollars)	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Amortized intangible assets
Developed technology	$	13,976	$	2,352	$	13,966	$	1,782
Customer relationships	4,586		1,022		4,584		861
Product rights	118		60		121		58
Trademarks	407		93		407		84
Patents and other	407		295		397		288
Amortized intangible assets	$	19,495	$	3,822	$	19,475	$	3,073
Unamortized intangible assets
Acquired in-process research and development	$	31			$	37
Trademarks	2				2
Unamortized intangible assets	$	33			$	39


(a)	The presentation of prior-period amounts reflects the reclassification of $2 million associated with the movement, effective on October 1, 2019, of certain products from the Medication Delivery Solutions unit to the Medication Management Solutions unit.


•	The Medical segment's income in the second quarter of 2019 additionally reflected the estimated cumulative costs of a product recall of $65 million recorded within Other operating expense, net. The recall related to a product component, which generally pre-dated our acquisition of CareFusion in fiscal year 2015, within the Medication Management Solutions unit's infusion systems platform.


(a)	Effective October 1, 2019, the Preanalytical Systems and Diagnostic Systems units were joined to create the new Integrated Diagnostic Solutions unit. Additional disclosures regarding this change are provided in Note 7 in the Notes to Condensed Consolidated Financial Statements.


(a)	Represents integration ~~restructuring~~ and ~~transaction~~restructuring costs which are primarily recorded in Acquisitions and other restructurings and are further discussed below.


(b)	~~Represents financing impacts associated with~~Includes amortization and other adjustments related to the ~~Bard acquisition, which were~~purchase accounting for acquisitions impacting identified intangible assets and valuation of fixed assets and debt. BD’s amortization expense is primarily recorded in ~~Interest income~~ ~~and~~ ~~Interest expense~~Cost of products sold.


~~(e)~~(d)	Represents initial costs required to develop processes and systems to comply with emerging regulations such as the European Union Medical Device Regulation ("EUMDR") and General Data Protection Regulation ("GDPR"). These costs were recorded in Cost of products sold and Research and development ~~expense.~~expense.


(e)	The amounts in 2020 primarily represented a charge of $39 million recorded in Cost of products sold to write down the carrying value of certain intangible assets in the Biosciences unit.


(f)	~~Represents losses recognized in~~ ~~Other income (expense), net~~ ~~upon our extinguishment of certain long-term senior notes.~~


~~(g)~~	The ~~amounts~~amount in the six-month ~~periods~~period of fiscal ~~years~~year 2019 ~~and 2018~~ included additional tax expense, net, of $20 million ~~and $275 million, respectively~~ relating to new U.S. tax legislation, as further discussed below.


	Three-month period		Six-month period		Three-month period		Six-month period
March 31, 2018 gross profit margin %	38.0	%	43.3	%
March 31, 2019 gross profit margin %					47.1	%	47.2	%
Impact of purchase accounting adjustments and other specified items	10.1	%	3.9	%	(5.7	)%	(3.3	)%
Operating performance	—	%	1.0	%	(1.1	)%	(0.3	)%
Foreign currency translation	(1.0	)%	(1.0	)%	0.5	%	0.2	%
March 31, 2019 gross profit margin %	47.1	%	47.2	%
March 31, 2020 gross profit margin %					40.8	%	43.8	%


•	The impact in the six-month period additionally includes a $59 million charge recognized in the first quarter by the Medical segment to record estimated product remediation costs related to the Alaris^TM infusion pumps.


	Three months ended March 31,						Increase (decrease) in basis points			Six months ended March 31,								Increase (decrease) in basis points		Three months ended March 31,						Increase (decrease) in basis points		Six months ended March 31,						Increase (decrease) in basis points
	2019			2018					2019				2018				2020				2019				2020			2019						Increase (decrease) in basis points
(Millions of dollars)							Increase (decrease) in basis points											Increase (decrease) in basis points
Selling and administrative expense	$	1,089		$	1,056					$	2,161			$	1,829					$	1,025		$	1,089		Increase (decrease) in basis points			$	2,146		$	2,161
% of revenues	25.9		%	25.0		%	90			25.9		%		25.0		%		90		24.1		%	25.9		%	(180	)	25.3		%	25.9		%	(60	)

Research and development expense	$	252		$	259					$	510			$	451					$	264		$	252				$	535		$	510
% of revenues	6.0		%	6.1		%	(10	)		6.1		%		6.2		%		(10	)	6.2		%	6.0		%	20		6.3		%	6.1		%	20

Acquisitions and other restructurings	$	101		$	104					$	191			$	458					$	75		$	101				$	161		$	191

Other operating expense, net	$	396		$	—					$	61			$	—					$	—		$	396				$	—		$	61


◦	6-to-1 from the closing date of the Bard acquisition until and including the first fiscal quarter-end thereafter;


◦	5.75-to-1 for the subsequent four fiscal quarters thereafter;


◦	5.25-to-1 for the subsequent four fiscal quarters thereafter;


◦	4.5-to-1 for the subsequent four fiscal quarters thereafter;


◦	4-to-1 for the subsequent four fiscal quarters thereafter;


◦	5.25-to-1 from the effectiveness of the Term Loan Agreement until and including the last day of the fiscal quarter ending March 31, 2020;


◦	4.5-to-1 as of the last day of any fiscal quarter thereafter.



For the three months ended March 31, 2019	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)
January 1 – 31, 2019	—	$	—	—	7,857,742
February 1 – 28, 2019	676	246.60		—	7,857,742
March 1 – 31, 2019	—	—		—	7,857,742
Total	676	$	246.60	—	7,857,742



For the three months ended March 31, 2020	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)
January 1 – 31, 2020	1,229	$	279.21	—	7,857,742
February 1 – 29, 2020	376	256.87		—	7,857,742
March 1 – 31, 2020	—	—		—	7,857,742
Total	1,605	$	273.98	—	7,857,742


(1)	Consists of ~~676~~1,605 shares purchased during the quarter in open market transactions by the trust relating to BD’s Deferred Compensation and Retirement Benefit Restoration Plan and 1996 Directors’ Deferral Plan.


(2)	Represents shares available under a repurchase program authorized by the Board of Directors on September 24, 2013 for 10 million shares, for which there is no expiration date.



10.1	364-Day Term Loan Agreement, dated as of March 20, 2020, among Becton, Dickinson and Company, the banks named therein and Wells Fargo Bank, National Association, as administrative agent (incorporated by reference to Exhibit 10.1	~~Offer letter~~ of ~~Patrick Kaltenbach, dated~~the registrant's Current Report on Form 8-K filed on March ~~29, 2018.~~

	23, 2020).

10.2		First Amendment to 364-Day Term Loan Agreement and Joinder Agreement, dated as of March 27, 2020, among Becton, Dickinson and Company, the banks named therein and Wells Fargo Bank, National Association, as administrative agent (incorporated by reference to Exhibit 10.1 of the registrant's Current Report on Form 8-K filed on April 2, 2020).

10.3		Joinder Agreement, dated as of March 31, 2020, among Becton, Dickinson and Company, the bank named therein and Wells Fargo Bank, National Association, as administrative agent (incorporated by reference to Exhibit 10.2 of the registrant's Current Report on Form 8-K filed on April 2, 2020).

31		Certifications of Chief Executive Officer and Chief Financial Officer, pursuant to SEC Rule 13a - 14(a).


~~Exhibit~~ 32		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.


~~Exhibit~~ 101		The following materials from this report, formatted in ~~XBRL (Extensible~~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)



	/s/ Christopher Reidy
	Christopher Reidy
	Executive Vice President, Chief Financial Officer and Chief Administrative Officer
	(Principal Financial Officer)

	/s/ ~~Charles Bodner~~Thomas J. Spoerel
	~~Charles Bodner~~Thomas J. Spoerel
	~~Senior~~ Vice President, ~~Corporate Finance,~~Controller and Chief Accounting Officer
	(Principal Accounting Officer)



~~Exhibit~~ ~~Number~~		~~Description of Exhibits~~


~~10.1~~		~~Offer letter of Patrick Kaltenbach, dated March 29, 2018.~~
31		~~Certifications of Chief Executive Officer and Chief Financial Officer, pursuant to SEC Rule 13a - 14(a).~~

32		~~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 XBRL (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.