Our balance sheet remains strong with net cash provided by continuing operations at approximately $380 million for the six months ended March 31, 2006, and our debt-to-capitalization ratio (shareholders’ equity, net non-current deferred income tax liabilities, and debt) decreasing to 25.7% at March 31, 2006 from 27.3% at September 30, 2005.
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 with higher gross profit margins across our business segments, and continue to improve operating efficiency and organizational effectiveness. Numerous factors can affect our ability to achieve these goals, including without limitation, U.S. and global economic conditions, increased competition and healthcare cost containment initiatives. We believe that there are several important factors relating to our business that tend to reduce the impact on BD of any potential economic or political events in countries in which we do business, including the effects of possible healthcare system reforms. These include the non-discretionary nature of the demand for many of our core products, which may reduce the impact of economic downturns, the international nature of our business and our ability to meet the needs of the worldwide healthcare industry with cost-effective and innovative products.
During fiscal 2006, we continued to experience higher resin purchase costs, primarily due to recent increases in world oil prices. BD purchases supplies of resins, which are oil-based components used in the manufacture of certain products. The impact of any further increases in resin purchase costs for the remainder of the year are expected to be mitigated through continued improvement in our profit margins resulting from increased sales of products with higher margins, cost reduction programs, productivity improvements and, to a lesser extent, periodic price increases and adjustments.
Our anticipated revenue growth over the next three years, excluding any impact relating to foreign exchange, is expected to come from the following:
On February 14, 2006, BD acquired GeneOhm Sciences, Inc. (“GeneOhm”), a company that has developed molecular diagnostic testing for the rapid detection of bacterial organisms, including those known to cause healthcare-associated infections. In connection with the acquisition, BD incurred a charge of $53 million for acquired in-process research and development. See Note 8 for additional discussion.
Refer to Note 5 in the Notes to Condensed Consolidated Financial Statements for segment financial data.
Medical Segment – Second quarter revenues of $795 million represented an increase of $64 million, or 9%, from the prior year’s quarter, including an estimated $19 million or a 3% unfavorable impact due to foreign currency translation. Primary drivers of this growth were strong sales in the Diabetes Care and Pharmaceutical Systems units. Medical revenues also reflect the continued conversion in the United States to safety-engineered products, which accounted for sales of $123 million, as compared with $115 million in the prior year’s quarter. The growth rate of safety-engineered products benefited, in part, from a favorable comparison to the prior year’s second quarter revenues, which were negatively impacted by reductions in inventory by a major U.S. distributor. International sales of safety-engineered products of $22 million grew 7% from the prior year’s quarter, including an estimated 3 to 4 percent unfavorable impact due to foreign currency translation. For the six-month period ended March 31, 2006, U.S. sales of safety-engineered products were $255 million, as compared with $241 million in the prior year’s period. In addition, international sales of safety-engineered products of $44 million grew 13% from the prior year’s period, including an estimated 2 to 3 percent unfavorable impact due to foreign currency translation. For the six-month period ended March 31, 2006, total BD Medical segment revenues increased by 10% from the prior year period.
Diagnostics Segment – Second quarter revenues of $434 million represented an increase of $4 million, or 1%, over the prior year quarter, including an estimated $10 million, or 2%, unfavorable impact due to foreign currency translation. The Preanalytical Systems unit of the segment reported revenue growth of 11 percent over the prior year’s quarter, benefiting from bothBD Vacutainer Push Button Blood Collection Set sales in the current year’s quarter and a favorable comparison to the prior year’s revenues, which were negatively impacted by reductions in inventory by a major U.S. distributor. U.S. sales of safety-engineered products totaled $97 million, compared with $79 million in the prior year’s quarter. International sales of safety-engineered products of $55 million grew 16% from the prior year’s quarter, including an estimated 4 to 5 percent unfavorable impact due to foreign currency translation. For the six-month period ended March 31, 2006, the Preanalytical Systems unit of the segment reported 9% revenue growth and included U.S. sales of safety-engineered products of $193 million, compared with $165 million in the prior year’s period. Preanalytical Systems revenues for the six-month period also included international sales of safety-engineered products of $107 million, which grew 18% from the prior year’s period, including an estimated 3 to 4 percent unfavorable impact due to foreign currency translation. Second quarter revenues in the Diagnostics Systems unit of the segment declined 8%, despite strong sales from diagnostic instrument platforms. This decline in revenues was primarily due to a relatively mild flu season in fiscal 2006 compared with 2005, in both Japan and the United States. In addition, second quarter revenues were negatively impacted by the timing of early sales of flu diagnostic tests in the first fiscal quarter of 2006 and a comparison to strong sales of flu diagnostic tests in the prior year’s quarter in Japan. For the six-month period ended March 31, 2006, total BD Diagnostics segment revenues increased by 4% from the prior year period.
Biosciences Segment – Second quarter revenues of $220 million represented an increase of $16 million or 8% over the prior year’s quarter, including an estimated $7 million, or 3%, unfavorable impact due to foreign currency translation. Flow cytometry instruments and reagent sales continued to be the primary growth contributors. Sales in the Discovery Labware unit as well as sales of cell imaging products also contributed to sales growth. For the six-month period ended March 31, 2006, total BD Biosciences segment revenues increased by 9% from the prior year period, representing continued strong sales of flow cytometry instruments and reagents.
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Segment Operating Income
Medical Segment
Segment operating income for the second quarter was $193 million, or 24.3% of Medical revenues, compared to $162 million, or 22.2%, in the prior year’s quarter. The increase in operating income as a percentage of revenues reflected increased sales of products that have relatively high gross profit margins, in particular insulin delivery products, and improved manufacturing efficiencies which more than offset higher raw material costs associated with resin-based products. See further discussion on gross profit margin below. Selling and administrative expense as a percent of Medical revenues in the second quarter of 2006 was low compared with the second quarter of 2005. Certain incremental investments to support the BGM initiative were more than offset by tight controls on base spending. Research and development expenses for the quarter grew 8.3% as the segment continues to invest in the development of innovative products. Segment operating income for the six-month period was $407 million, or 26.0% of Medical revenues, compared to $326 million, or 22.9%, in the prior year’s period.
Diagnostics Segment
Segment operating income for the second quarter was $60 million, or 13.8% of Diagnostics revenues, compared to $117 million, or 27.2%, in the prior year’s quarter. Segment operating income for the current quarter includes the in-process research and development charge of $53 million associated with the GeneOhm acquisition, as further discussed above, which reduced operating income as a percentage of Diagnostics revenues by 12.3%. Gross profit margin was slightly lower than the second quarter of 2005, in part, due to lower flu diagnostic revenues, which have relatively high overall gross profit margins. See further discussion on gross profit margin below. Selling and administrative expense as a percentage of Diagnostics revenues in the second quarter of 2006 was slightly below the comparable amount in the second quarter of 2005 primarily due to tight controls on spending. Research and development expenses in the second quarter of 2006 increased $56 million, which includes the in-process research and development charge. Segment operating income for the six-month period was $181 million, or 20.6% of Diagnostics revenues, compared to $220 million, or 26.0%, in the prior year’s period.
Biosciences Segment
Segment operating income for the second quarter was $54 million, or 24.6% of Biosciences revenues, compared to $46 million, or 22.6%, in the prior year’s quarter. The increase in operating income as a percentage of revenues reflected an increase in sales of products, in particular, flow cytometry instruments and reagents. Selling and administrative expense as a percent of Biosciences revenues for the quarter was lower compared with the prior year’s quarter. This decrease was attributable to revenue growth combined with continued effective spending control. Research and development expenses in the prior year’s quarter increased $1.4 million, or 8.8%, reflecting spending on new product development. Segment operating income for the six-month period was $101 million, or 24.1% of Biosciences revenues, compared to $83 million, or 21.7%, in the prior year’s period.
Gross Profit Margin
Gross profit margin was 51.0% for the second quarter and 51.6% for the six-month period, compared with 50.3% and 50.5%, respectively, for the comparable prior year periods. Gross profit margin in the second quarter of fiscal 2006 as compared to the prior period reflected an
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estimated 1.0% improvement relating to increased sales of products with relatively high margins. This improvement was partially offset by an estimated 0.3%, primarily relating to higher raw material costs and an increase in share-based compensation. Gross profit margin in the six-month period of fiscal 2006 as compared to the prior period reflected an estimated 1.0% improvement relating to increased sales of products with relatively high margins, an estimated 0.3% improvement associated primarily with productivity gains and a 0.2% improvement resulting from foreign currency activity. These gross profit margin improvements were partially offset by an estimated 0.2% relating to higher raw material costs and an increase in share-based compensation of 0.2%. We expect gross profit margin to improve, on a reported basis, by about 50 to 60 basis points in fiscal 2006.
Selling and Administrative Expense
Selling and administrative expense was 25.5% of revenues for the second quarter and 25.8% for the six-month period, compared with 26.8% and 26.7%, respectively, for the prior year’s periods. Aggregate expenses for the current period reflect increases in base spending of $10 million, in line with inflation, in expenses related to the BGM initiative of $7 million and in share-based compensation expense of $5 million. These increases in selling and administrative expense were partially offset by proceeds from an insurance settlement of $10 million received in connection with the Company’s previously owned latex glove business and a favorable foreign exchange impact of $9 million. Aggregate expenses in the six-month period reflect increases in share-based compensation expense of $21 million, in base spending of $16 million, in line with inflation, and in expenses related to the BGM initiative of $15 million. These increases were partially offset by proceeds from insurance settlements of $17 million, as further discussed above, and a favorable foreign exchange impact of $14 million. Selling and administrative expense as a percentage of revenues is expected to decrease, on a reported basis, by about 40 basis points in fiscal 2006.
Research and Development Expense
Research and development expense was $129 million, or 8.9% of revenues for the second quarter, compared with the prior year’s amount of $66 million, or 4.8% of revenues. Research and development expense was $198 million, or 6.9% of revenues for the six-month period in the current year, compared with the prior year’s amount of $128 million, or 4.8% of revenues. The in-process research and development charge of $53 million associated with the GeneOhm acquisition was recorded to research and development expense in the three and six-month periods of 2006, respectively. Research and development expenditures also reflect increased spending for new programs in each of our segments for the three and six-month periods of 2006. We anticipate research and development expense to increase, on a reported basis, about 33% for fiscal 2006, including the in-process research and development charge.
Non-Operating Expense and Income
Interest expense increased to $20 million in the second quarter and $37 million in the six-month period compared with $13 million and $27 million, respectively, for the prior year’s periods. These increases reflect higher debt levels and the impact of higher interest rates on floating rate debt and on interest rate swap transactions, consisting of fair value hedges of certain fixed-rate debt instruments, under which the difference between fixed and floating interest rates is exchanged at specified intervals. Interest income increased to $17 million in the second quarter and $32 million in the six-month period from $8 million and $14 million, respectively, in the prior year’s periods. These increases reflect higher interest rates and cash balances.
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Income Taxes
The income tax rate was 33.9% for the second quarter. The six-month tax rate was 30.0% compared with the prior year’s rate of 21.8%. The increase is principally due to the lack of a tax benefit related to the acquired in-process research and development charge associated with the GeneOhm acquisition. The six-month rate reflected a provision of approximately 0.3% relating to proceeds received from insurance settlements, as further discussed above. The prior year’s rate reflected an estimated 2.3% benefit due to the reversal of tax reserves in the first quarter in connection with the conclusion of tax examinations in four non-U.S. jurisdictions. The Company expects the reported tax rate for the full year to be approximately 27%.
Income from Continuing Operations and Diluted Earnings Per Share from Continuing Operations
Income from continuing operations and diluted earnings per share from continuing operations for the second quarter of 2006 were $156 million and 60 cents, respectively. This compared with income from continuing operations and diluted earnings per share from continuing operations for the prior year’s second quarter of $187 million and 71 cents, respectively. The in-process research and development charge associated with the GeneOhm acquisition reduced income from continuing operations for the current quarter by $53 million and diluted earnings per share from continuing operations by 21 cents. Proceeds from an insurance settlement increased income from continuing operations for the current quarter by $10 million and diluted earnings per share from continuing operations by 2 cents. For the six-month periods, income from continuing operations and diluted earnings per share from continuing operations were $374 million and $1.45, respectively, in 2006, which reflected the in-process research and development charge, and $381 million and $1.45, respectively, in 2005. Proceeds from insurance settlements increased income from continuing operations in the six-month period by $17 million and diluted earnings per share from continuing operations by 4 cents. The prior year’s six-month period included the effect of the reversal of tax reserves, as further discussed above, which increased income from continuing operations by $11 million and diluted earnings per share from continuing operations by 4 cents.
Liquidity and Capital Resources
Net cash provided by continuing operating activities, which continues to be our primary source of funds to finance operating needs and capital expenditures, was $380 million during the first six months of fiscal 2006, and $462 million in the same period in fiscal 2005. The decrease to the change in working capital of $228 million in the first six months of fiscal 2006, as compared to the prior year’s period of $83 million, was primarily due to a decrease in accounts payable and accrued expenses. Net cash provided by operations in the current period was reduced by a change in the pension obligation of $105 million, which reflected a discretionary cash contribution of $150 million in the first quarter of 2006.
Net cash used for continuing investing activities for the first six months of the current year was $433 million, compared to $159 million in the prior year period. The current year amount reflects $230 million of cash paid for the GeneOhm acquisition. Capital expenditures were $151 million in the first six months of fiscal 2006 and $108 million in the same period in fiscal 2005. We expect capital spending for fiscal 2006 to be in the $400 million range.
Net cash used for continuing financing activities in the first six months of the current year was
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$211 million, compared to $206 million in the prior year period. As of March 31, 2006, total debt of $1.3 billion represented 25.7% of total capital (shareholders’ equity, net non-current deferred income tax liabilities, and debt), versus 27.3% at September 30, 2005. Short-term debt increased to 24% of total debt at the end of the six month period, from 16% at September 30, 2005.
For the first six months of the current and prior year, the Company repurchased approximately $225 million of its common stock. At March 31, 2006, approximately 0.7 million common shares remained available for purchase pursuant to a repurchase program for 10 million shares authorized by the Board of Directors (the “Board”) in November 2004. The Board authorized an additional repurchase program for 10 million shares in November 2005. Stock repurchases were offset, in part, by the issuance of common stock from treasury due to the exercising of stock options by employees.
We have in place a commercial paper borrowing program that is available to meet our short-term financing needs, including working capital requirements. Borrowings outstanding under this program were $200 million at March 31, 2006. We maintain a $900 million syndicated credit facility in order to provide backup support for our commercial paper program and for other general corporate purposes. This credit facility expires in August 2009 and includes a single financial covenant that requires BD to maintain an interest expense coverage ratio (ratio of earnings before income taxes, depreciation and amortization to interest expense) of not less than 5-to-1 for the most recent four consecutive fiscal quarters. On the last eight measurement dates, this ratio had ranged from 19-to-1 to 21-to-1. The facility, under which there were no borrowings outstanding at March 31, 2006, can be used to support the commercial paper program or for general corporate purposes. In addition, we have informal lines of credit outside the United States.
BD’s ability to generate cash flow from operations, issue debt, enter into other financing arrangements and attract long-term capital on acceptable terms could be adversely affected in the event there was a material decline in the demand for BD’s products, deterioration in BD’s key financial ratios or credit ratings or other significantly unfavorable changes in conditions. While a deterioration in the Company’s credit ratings would increase the costs associated with maintaining and borrowing under its existing credit arrangements, such a downgrade would not affect the Company’s ability to draw on these credit facilities, nor would it result in an acceleration of the scheduled maturities of any outstanding debt.
As of March 31, 2006, we repatriated approximately $690 million of the approximately $1.3 billion of foreign earnings expected to be repatriated pursuant to our approved plan under the American Jobs Creation Act of 2004.
Cautionary Statement Pursuant to Private Securities Litigation Reform Act of 1995 — “Safe Harbor” for Forward-Looking Statements
The Private Securities Litigation Reform Act of 1995 (the “Act”) provides a safe harbor for forward-looking statements made by or on behalf of BD. BD and its representatives may from time to time make certain forward-looking statements, both written and oral, including statements contained in this report and filings with the Securities and Exchange Commission (“SEC”) and in our other reports to shareholders. Forward-looking statements may be identified
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by the use of words like “plan,” “expect,” “believe,” “intend,” “will,” “anticipate,” “estimate” and other words of similar meaning in conjunction with, among other things, discussions of future operations and financial performance, as well as our strategy for growth, product development, regulatory approvals, market position and expenditures. All statements which address operating performance or events or developments that we expect or anticipate will occur in the future — including statements relating to volume growth, sales and earnings per share growth, gross profit margins, various expenditures and statements expressing views about future operating results — are forward-looking statements within the meaning of the Act.
Forward-looking statements are based on current expectations of future events. The forward-looking statements are and will be based on management’s then-current views and assumptions regarding future events and operating performance, and speak only as of their dates. Investors should realize that if underlying assumptions prove inaccurate or unknown risks or uncertainties materialize, actual results could vary materially from our expectations and projections. Investors are therefore cautioned not to place undue reliance on any forward-looking statements. Furthermore, we undertake no obligation to update or revise any forward-looking statements whether as a result of new information, future events and developments or otherwise.
The following are some important factors that could cause our actual results to differ from our expectations in any forward-looking statements:
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• | Regional, national and foreign economic factors, including inflation and fluctuations in interest rates and foreign currency exchange rates and the potential effect of such fluctuations on revenues, expenses and resulting margins. |
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• | We operate in a highly competitive environment. New product introductions by our current or future competitors could adversely affect our ability to compete in the global market. Patents attained by competitors, particularly as patents on our products expire, may also adversely impact our competitive position. |
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• | Recently, the U.S. Food and Drug Administration (“FDA”) and European authorities have approved a new inhaled form of insulin for adults, which could adversely impact sales of our insulin injection devices. |
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• | Changes in domestic and foreign healthcare industry practices and regulations resulting in increased pricing pressures, including the continued consolidation among healthcare providers; trends toward managed care and healthcare cost containment and government laws and regulations relating to sales and promotion, reimbursement and pricing generally. |
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• | The effects, if any, of governmental and media activities relating to U.S. Congressional hearings regarding the business practices of group purchasing organizations, which negotiate product prices on behalf of their member hospitals with BD and other suppliers. |
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• | Fluctuations in energy costs and their effect on, among other things, the costs of producing our products. |
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• | Fluctuations in the cost and availability of raw materials and the ability to maintain favorable supplier arrangements and relationships (particularly with respect to sole-source suppliers) |
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| and the potential adverse effects of any disruption in the availability of such raw materials. |
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• | Our ability to obtain the anticipated benefits of any restructuring programs, if any, that we may undertake. |
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• | Adoption of or changes in government laws and regulations affecting domestic and foreign operations, including those relating to trade, monetary and fiscal policies, taxation, environmental matters, sales practices, price controls, licensing and regulatory approval of new products, or changes in enforcement practices with respect to any such laws and regulations. |
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• | Fluctuations in U.S. and international governmental funding and policies for life science research. |
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• | Difficulties inherent in product development, including the potential inability to successfully continue technological innovation, complete clinical trials, obtain regulatory approvals in the United States and abroad, or gain and maintain market approval of products, as well as the possibility of encountering infringement claims by competitors with respect to patent or other intellectual property rights, all of which can preclude or delay commercialization of a product. |
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• | Pending and potential litigation or other proceedings adverse to BD, including antitrust claims, product liability claims, and patent infringement claims, as well as other risks and uncertainties detailed from time to time in our SEC filings. |
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• | The effects, if any, of adverse media exposure or other publicity regarding BD’s business or operations. |
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• | Our ability to achieve earnings forecasts, which are generated based on projected volumes and sales of many product types, some of which are more profitable than others. There can be no assurance that we will achieve the projected level or mix of product sales. |
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• | The effect of market fluctuations on the value of assets in BD’s pension plans and the possibility that BD may need to make additional contributions to the plans as a result of any decline in the value of such assets. |
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• | Our ability to effect infrastructure enhancements and incorporate new systems technologies into our operations. |
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• | Product efficacy or safety concerns resulting in product recalls, regulatory action on the part of the FDA (or foreign counterparts) or declining sales. |
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• | Economic and political conditions in international markets, including civil unrest, governmental changes and restrictions on the ability to transfer capital across borders. |
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• | The effects of natural disasters, including hurricanes or pandemic diseases, on our ability to manufacture our products, particularly where production of a product line is concentrated in |
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| one or more plants, or on our ability to source components from suppliers that are needed for such manufacturing. |
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• | Our ability to penetrate developing and emerging markets, which also depends on economic and political conditions, and how well we are able to acquire or form strategic business alliances with local companies and make necessary infrastructure enhancements to production facilities, distribution networks, sales equipment and technology. |
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• | The impact of business combinations, including acquisitions and divestitures, both internally for BD and externally, in the healthcare industry. |
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• | Issuance of new or revised accounting standards by the Financial Accounting Standards Board or the SEC. |
The foregoing list sets forth many, but not all, of the factors that could impact our ability to achieve results described in any forward-looking statements. Investors should understand that it is not possible to predict or identify all such factors and should not consider this list to be a complete statement of all potential risks and uncertainties.
Item 3.Quantitative and Qualitative Disclosures About Market Risk
There have been no material changes in information reported since the end of the fiscal year ended September 30, 2005.
Item 4.Controls and Procedures
An evaluation was carried out by BD’s management, with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of BD’s disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934) as of March 31, 2006. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the design and operation of these disclosure controls and procedures were, as of the end of the period covered by this report, adequate and effective to ensure that material information relating to BD and its consolidated subsidiaries would be made known to them by others within these entities. There were no changes in our internal control over financial reporting during the fiscal quarter ended March 31, 2006 identified in connection with the above-referenced evaluation that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II -OTHER INFORMATION
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Item 1. | Legal Proceedings |
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| We are involved, both as a plaintiff and a defendant, in various legal proceedings which arise in the ordinary course of business, including product liability and environmental matters as set forth in our 2005 Annual Report on Form 10-K and in our Quarterly Report on Form 10-Q for the first quarter of fiscal year 2006. |
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| Given the uncertain nature of litigation generally, BD 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 BD is a party. In accordance with U.S. generally accepted accounting principles, BD establishes accruals to the extent probable future losses are estimable (in the case of environmental matters, without considering possible third-party recoveries). In view of the uncertainties of litigation, BD could incur charges in excess of any currently established accruals and, to the extent available, excess liability insurance. In the opinion of management, any such future charges, individually or in the aggregate, could have a material adverse effect on BD’s consolidated results of operations and consolidated cash flows in the period or periods in which they are recorded or paid. |
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Item 1A. | Risk Factors |
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| Not applicable. |
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Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
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| The table below sets forth certain information regarding our purchases of common stock of BD during the fiscal quarter ended March 31, 2006. |
Issuer Purchases of Equity Securities
| | | | | | | | | | | | | |
For the three months ended
March 31, 2006 | | Total Number of
Shares Purchased (1) | | Average Price
Paid per
Share | | Total Number of
Shares Purchased
as Part of
Publicly
Announced Plans
or Programs (2) | | Maximum Number
of Shares that May
Yet Be Purchased
Under the Plans or
Programs (2) | |
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|
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|
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|
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January 1 – 31, 2006 | | | 22,449 | | $ | 63.64 | | | — | | | 12,644,914 | |
February 1 – 28, 2006 | | | 1,160,213 | | $ | 64.19 | | | 1,150,000 | | | 11,494,914 | |
March 1 – 31, 2006 | | | 794,900 | | $ | 63.70 | | | 794,900 | | | 10,700,014 | |
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|
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|
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|
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|
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Total | | | 1,977,562 | | $ | 63.99 | | | 1,944,900 | | | 10,700,014 | |
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|
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|
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|
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|
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(1) | Includes for the quarter 4,747 shares purchased in open market transactions by the trustee under BD’s Deferred Compensation Plan and 1996 Directors’ Deferral Plan. Also includes 27,915 shares delivered to the Company in connection with stock option exercises. |
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(2) | These repurchases were made pursuant to a repurchase program for 10 million shares announced on November 23, 2004 (the “2004 Program”). There is no expiration date for the 2004 Program. On November 22, 2005, the Board of Directors of BD authorized an additional repurchase program for 10 million shares. |
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Item 3. | Defaults Upon Senior Securities. |
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| Not applicable. |
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Item 4. | Submission of Matters to a Vote of Security Holders. |
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| Our Annual Meeting of Shareholders was held on January 31, 2006, at which the following matters were voted upon: |
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| i.) | A management proposal for the election of three directors for the terms indicated below was voted upon as follows: |
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| | | | | | | | | | | |
| | | | | | | Votes | |
| | | | | | |
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| Nominee | | | Term | | | For | | | Withheld | |
|
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| | |
| | |
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| Edward J. Ludwig | | | 3 Years | | | 208,868,737 | | | 6,905,452 | |
| Willard J. Overlock, Jr. | | | 3 Years | | | 212,162,197 | | | 3,611,992 | |
| Bertram L. Scott | | | 3 Years | | | 209,297,765 | | | 6,476,424 | |
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| | The other directors whose term of office as a director continued after the meeting are: Basil L. Anderson, Henry P. Becton, Jr., Edward F. DeGraan, Gary A. Mecklenburg, James F. Orr, James E. Perrella, Alfred Sommer and Margaretha af Ugglas. |
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| ii.) | A management proposal to ratify the selection of Ernst & Young LLP as independent registered public accounting firm for the fiscal year ending September 30, 2006 was voted upon. 211,302,059 shares were voted for the proposal, 2,964,216 shares were voted against, and 1,507,914 shares abstained. |
| | |
| iii.) | A shareholder proposal requesting that the Board of Directors publish a report evaluating the Company’s policies on brominated flame retardants and other toxic chemicals was voted upon. 14,393,882 shares were voted for the proposal, 150,699,713 shares were voted against, 26,390,342 shares abstained, and there were 24,290,252 broker non-votes. |
| | |
| iv.) | A shareholder proposal requesting that the Board of Directors take the necessary steps to provide for cumulative voting in the election of directors was voted upon. 74,079,013 shares were voted for the proposal, 97,376,269 shares were voted against, 20,028,655 shares abstained, and there were 24,290,252 broker non-votes. |
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Item 5. | Other Information. |
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| Not applicable. |
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Item 6. | Exhibits |
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| Exhibit 10(s) | Amended and Restated Aircraft Time Sharing Agreement between Becton, Dickinson and Company and Edward J. Ludwig dated as of March 28, 2006. |
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| Exhibit 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. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| | |
| Becton, Dickinson and Company | |
|
| |
| (Registrant) | |
Dated: May 9, 2006
| | |
| /s/ John R. Considine | |
|
| |
| John R. Considine | |
| Executive Vice President and | |
| Chief Financial Officer | |
| (Principal Financial Officer) | |
| | |
| /s/ William A. Tozzi | |
|
| |
| William A. Tozzi | |
| Vice President and Controller | |
| (Chief Accounting Officer) | |
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INDEX TO EXHIBITS
| | |
Exhibit Number | | Description of Exhibits |
| |
|
10(s) | | Amended and Restated Aircraft Time Sharing Agreement between Becton, Dickinson and Company and Edward J. Ludwig dated as of March 28, 2006. |
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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. |
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