Mail Stop 0306
March 23, 2005
Via U.S. Mail and Fax
Mr. John R. Considine
Executive Vice President and Chief Financial Officer
Becton, Dickinson and Company
1 Becton Drive
Franklin Lakes, New Jersey 07417-1880
Re: Becton, Dickinson and Company
Form 10-K for the fiscal year ended September 30, 2004
Filed December 13, 2004
Quarterly Report on Form 10-Q for the quarter ended December 31,
2004
Form 8-K dated January 26, 2005
File No. 001-04802
Dear Mr. Considine:
We have reviewed your filings and have the following
comments.
We have limited our review to only your financial statements and
related disclosures and will make no further review of your
documents. Where indicated, we think you should revise your
documents in response to these comments. If you disagree, we will
consider your explanation as to why our comment is inapplicable or
a
revision is unnecessary. Please be as detailed as necessary in
your
explanation. In some of our comments, we may ask you to provide
us
with supplemental information so we may better understand your
disclosure. After reviewing this information, we may or may not
raise additional comments.
Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects. We welcome
any questions you may have about our comments or on any other
aspect
of our review. Feel free to call us at the telephone numbers
listed
at the end of this letter.
Form 10-K for the Fiscal Year ended September 30, 2004
Item 9A. Controls and Procedures - Page 12
1. We note your disclosure that your "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, effective and designed to ensure
that
material information relating to BD and its consolidated
subsidiaries
would be made known to them by others within these entities."
Please
revise your disclosures in future filings to state, in clear and
unqualified language, the conclusions reached by your chief
executive
officer and your chief financial officer on the effectiveness of
your
disclosure controls and procedures. Alternatively, revise future
filings to clarify, if true, that the information required to be
disclosed by the Company in reports that it files under the
Exchange
Act is recorded, processed, summarized and reported within the
time
periods specified in the rules and forms of the SEC and is
accumulated and communicated to your management, including your
chief
executive officer and chief financial officer, to allow timely
decisions regarding required disclosure. See Exchange Act Rule
13a-
15(e).
Exhibit 13
Financial Review - Page 24
Results of Continuing Operations - Page 25
2. We note your discussions of the changes in your various types
of
revenues. Please expand future filings to quantify and discuss
the
underlying reasons, such as changes in sales price and units
(volume), had on revenues. Refer to Regulation S-K Item 303 as
necessary.
3. We note the discussions of the changes in your various segments
operating income. Please expand future filings to separately
quantify and discuss each significant factor. For example revise
future filings to quantify the gross profit margin improvements
resulting from the conversion to safety-engineered devices from
conventional products. Apply this guidance throughout MD&A to the
extent practicable.
Financial Statements - Page 37
Note 2. Accounting Changes - Page 44
Inventories - Page 45
4. Supplementally please explain why the retroactive restatement
for
the change to the FIFO method had no impact on the Consolidated
Statements of Income for all periods presented.
Note 16. Segment Data - Page 59
5. We note that the geographic information has been separated into
two components, the United States and International. Please
confirm
supplementally that no revenues or assets attributed to any
individual foreign country are material. If material, please
disclose separately in future filings. Refer to SFAS 131
paragraph
38.
Form 10-Q for the Quarterly Period Ended December 31, 2004
Management`s Discussion and Analysis of Financial Condition and
Results of Operations - Page 16
Use of Non-GAAP Financial Measures - Page 22
6. We note that you present and discuss several non-GAAP measures
in
your MD&A, including underlying revenues excluding the estimated
impact of foreign currency translation, and gross profit excluding
share-based compensation and BGM charges. In future filings,
please
consider revising MD&A to disclose and quantify the impact of
these
transactions on your U.S. GAAP results. For example, you could
indicate that the increase in revenues for the period reflected
the
impact of foreign currency fluctuations of $XX million or XX%.
If you continue to provide these non-GAAP measures, please revise
future filings to fully comply with Item 10(e) of Regulation S-K,
including a reconciliation to the directly comparable GAAP measure
for each non-GAAP measure presented.
7. In this regard, we have concerns regarding this presentation of
non-GAAP information and the adjustment for items characterized as
unusual or nonrecurring. Note that Item 10(e)(1)(ii) of Regulation
S-
K prohibits "excluding charges or liabilities that require, or
will
require, cash settlement or would have required cash settlement
absent an ability to settle in another manner" and adjustment to
non-
GAAP measures to "eliminate or smooth items identified as non-
recurring, infrequent or unusual, when the nature of the charge or
gain is such that it is reasonably likely to recur within two
years
or there was a similar charge or gain within two years." In
future
filings, please revise MD&A to comply with Item 10(e) of
Regulation
S-X or tell us why you believe your disclosure complies. Refer to
Frequently Asked Questions Regarding the Use of Non-GAAP Financial
Measures dated June 13, 2003 for further guidance.
Form 8-K dated January 26, 2005
8. We note that you refer to your non-GAAP information as "pro
forma"
results. The pro forma terminology has very specific meaning in
accounting literature, as indicated by Article 11 of Regulation S-
X.
In future filings, please revise your presentation to omit the pro
forma terminology when referring to your non-GAAP information.
9. The reconciliation of GAAP to non-GAAP information includes
several non-GAAP measures, including adjusted cost of products
sold,
adjusted gross profit, adjusted selling, general and
administrative
expense, adjusted research and development expense, adjusted
operating income, etc. Yet, you have not provided the disclosures
required by Item 10(e)(1)(i) of Regulation S-K, including a
specific
and detailed explanation of why each non-GAAP measure is useful to
investors and how each of these measures are used by management.
Please revise future filings to provide all the disclosures
required
for each of these measures.
* * * *
As appropriate, please respond to these comments within 10
business days or tell us when you will provide us with a response.
Please furnish a cover letter with your amendment that keys your
responses to our comments and provides any requested supplemental
information. Detailed cover letters greatly facilitate our
review.
Please file your cover letter on EDGAR. When sending supplemental
information regarding this filing, please include the following
ZIP+4
code in our address: 20549-0306. Please understand that we may
have
additional comments after reviewing your responses to our
comments.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filings reviewed by the staff to
be
certain that they have provided all information investors require
for
an informed decision. Since the company and its management are in
possession of all facts relating to a company`s disclosure, they
are
responsible for the accuracy and adequacy of the disclosures they
have made.
In connection with responding to our comments, please
provide,
in writing, a statement from the company acknowledging that:
* the company is responsible for the adequacy and accuracy of the
disclosure in the filing;
* staff comments or changes to disclosures in response to staff
comments in the filings reviewed by the staff do not foreclose the
Commission from taking any action with respect to the filing; and
* the company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.
In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in connection with our review of
your
filing or in response to our comments on your filing.
You may contact Lynn Dicker, Staff Accountant, at (202) 824-
5264 or me at (202) 942-1931 if you have questions regarding
comments
on the financial statements and related matters. In this regard,
do
not hesitate to contact Brian Cascio, Accounting Branch Chief, at
(202) 942-1791.
Sincerely,
Angela Crane
Reviewing Accountant
??
??
??
??
Mr. John R. Considine
Becton, Dickinson and Company
March 23, 2005
Page 1