FORM 10-Q
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended March 31, 2002
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from to
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Commission file number 001-4802
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Becton, Dickinson and Company
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(Exact name of registrant as specified in its charter)
New Jersey 22-0760120
- ---------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1 Becton Drive, Franklin Lakes, New Jersey 07417-1880
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(Address of principal executive offices)
(Zip Code)
(201) 847-6800
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(Registrant's telephone number, including area code)
N/A
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(Former name, former address and former fiscal year,
if changed since last report)
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 X. No .
---- ----
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Class of Common Stock Shares Outstanding as of April 30, 2002
--------------------- ---------------------------------------
Common stock, par value $1.00 258,332,167
BECTON, DICKINSON AND COMPANY
FORM 10-Q
For the quarterly period ended March 31, 2002
TABLE OF CONTENTS
Part I. FINANCIAL INFORMATION Page Number
- ------- --------------------- -----------
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets.............................. 3
Condensed Consolidated Statements of Income........................ 4
Condensed Consolidated Statements of Cash Flows.................... 5
Notes to Condensed Consolidated Financial Statements............... 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations............................................... 14
Item 3. Quantitative and Qualitative Disclosures About Market Risk.............. 21
Part II. OTHER INFORMATION
- -------- -----------------
Item 1. Legal Proceedings....................................................... 22
Item 2. Changes in Securities and Use of Proceeds............................... 23
Item 3. Defaults Upon Senior Securities......................................... 23
Item 4. Submission of Matters to a Vote of Security Holders..................... 24
Item 5. Other Information....................................................... 24
Item 6. Exhibits and Reports on Form 8-K........................................ 24
Signatures ........................................................................ 26
2
ITEM 1. FINANCIAL STATEMENTS
BECTON, DICKINSON AND COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
Thousands of Dollars
March 31, September 30,
Assets 2002 2001
------------ ------------
(Unaudited)
Current Assets:
Cash and equivalents $ 180,127 $ 82,129
Short-term investments 1,959 4,571
Trade receivables, net 737,389 768,047
Inventories:
Materials 166,689 160,208
Work in process 130,590 115,257
Finished products 399,593 432,279
----------- -----------
696,872 707,744
Prepaid expenses, deferred taxes and other 194,788 200,451
----------- -----------
Total Current Assets 1,811,135 1,762,942
Property, plant and equipment 3,485,839 3,420,294
Less allowances for depreciation and amortization 1,761,336 1,704,271
----------- -----------
1,724,503 1,716,023
Goodwill, Net 462,826 431,452
Core and Developed Technology, Net 293,925 304,688
Other Intangibles, Net 126,296 164,643
Capitalized Software, Net 261,259 231,123
Other 165,526 191,416
----------- -----------
Total Assets $ 4,845,470 $ 4,802,287
=========== ===========
Liabilities and Shareholders' Equity
Current Liabilities:
Short-term debt $ 559,862 $ 454,012
Payables and accrued expenses 777,307 810,664
----------- -----------
Total Current Liabilities 1,337,169 1,264,676
Long-Term Debt 762,666 782,996
Long-Term Employee Benefit Obligations 245,977 335,731
Deferred Income Taxes and Other 88,249 90,117
Commitments and Contingencies - -
Shareholders' Equity:
Preferred stock 39,664 40,528
Common stock 332,662 332,662
Capital in excess of par value 171,447 148,690
Retained earnings 3,314,439 3,137,304
Unearned ESOP compensation (13,151) (12,001)
Deferred compensation 8,380 7,096
Common shares in treasury - at cost (1,026,424) (937,790)
Accumulated other comprehensive loss (415,608) (387,722)
----------- -----------
Total Shareholders' Equity 2,411,409 2,328,767
----------- -----------
Total Liabilities and Shareholders' Equity $ 4,845,470 $ 4,802,287
=========== ===========
See notes to condensed consolidated financial statements
3
BECTON, DICKINSON AND COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Thousands of Dollars, Except Per-share Data
(Unaudited)
Three Months Ended Six Months Ended
March 31, March 31,
------------------------------ -------------------------
2002 2001 2002 2001
---------- -------- ---------- ----------
Revenues $1,012,971 $950,949 $1,957,917 $1,815,367
Cost of products sold 523,133 486,738 1,022,895 940,656
Selling and administrative 247,660 241,912 495,954 477,204
Research and development 56,314 54,497 111,551 107,224
Special charges 9,937 - 9,937 -
---------- -------- ---------- ----------
Total Operating Costs and Expenses 837,044 783,147 1,640,337 1,525,084
---------- -------- ---------- ----------
Operating Income 175,927 167,802 317,580 290,283
Interest expense, net (8,839) (15,998) (18,410) (34,562)
Other income (expense), net 492 (3,200) (1,124) (5,259)
---------- -------- ---------- ----------
Income Before Income Taxes and Cumulative
Effect of Change in Accounting Principle 167,580 148,604 298,046 250,462
Income tax provision 38,392 34,439 69,185 62,599
---------- -------- ---------- ----------
Income Before Cumulative Effect of Change
in Accounting Principle 129,188 114,165 228,861 187,863
Cumulative effect of change in
accounting principle, net of tax - - - (36,750)
---------- -------- ---------- ----------
Net Income $ 129,188 $114,165 $ 228,861 $ 151,113
========== ======== ========== ==========
Basic Earnings Per Share
Before Cumulative Effect of Change in
Accounting Principle $ .50 $ .44 $ .88 $ .73
Cumulative effect of change in accounting
principle, net of tax - - - (.14)
---------- -------- ---------- ----------
Basic Earnings Per Share $ .50 $ .44 $ .88 $ .59
========== ======== ========== ==========
Diluted Earnings Per Share
Before Cumulative Effect of Change in
Accounting Principle $ .48 $ .42 $ .85 $ .70
Cumulative effect of change in accounting
principle, net of tax - - - (.14)
---------- -------- ---------- ----------
Diluted Earnings Per Share $ .48 $ .42 $ .85 $ .56
========== ======== ========== ==========
Dividends Per Common Share $ .0975 $ .095 $ .195 $ .19
========== ======== ========== ==========
See notes to condensed consolidated financial statements
4
BECTON, DICKINSON AND COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Thousands of Dollars
(Unaudited)
Six Months Ended
March 31,
----------------------------------
2002 2001
---------- ----------
Operating Activities
Net income $ 228,861 $ 151,113
Adjustments to net income to derive net cash
provided by operating activities:
Depreciation and amortization 145,683 155,057
Pension contribution (100,000) -
Non-cash special charges 5,109 -
Cumulative effect of change in accounting principle, net of tax - 36,750
Change in working capital (4,766) (57,470)
Other, net 17,246 30,529
--------- ---------
Net Cash Provided by Operating Activities 292,133 315,979
--------- ---------
Investing Activities
Capital expenditures (115,159) (180,090)
Capitalized software (42,407) (37,625)
Sales (purchases) of investments, net 5,233 (2,909)
Acquisitions of businesses, net of cash acquired - (30,953)
Other, net (18,485) (24,321)
--------- ---------
Net Cash Used for Investing Activities (170,818) (275,898)
--------- ---------
Financing Activities
Change in short-term debt 107,818 80,793
Proceeds from long-term debt 3,822 2,388
Payments of long-term debt (2,354) (100,679)
Repurchase of common stock (103,022) -
Issuance of common stock from treasury 24,134 60,720
Dividends paid (51,635) (50,116)
--------- ---------
Net Cash Used for Financing Activities (21,237) (6,894)
--------- ---------
Effect of exchange rate changes on cash and equivalents (2,080) (2,457)
--------- ---------
Net increase in cash and equivalents 97,998 30,730
Opening Cash and Equivalents 82,129 49,196
--------- ---------
Closing Cash and Equivalents $ 180,127 $ 79,926
========= =========
See notes to condensed consolidated financial statements
5
BECTON, DICKINSON AND COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Dollar and Share Amounts in Thousands, Except Per-share Data
March 31, 2002
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 the Company, include all adjustments which are of a normal
recurring nature, necessary for a fair presentation of financial position and
the results of operations and cash flows for the periods presented. However, the
financial statements do not include all information and footnotes required for a
presentation in accordance with generally accepted accounting principles. These
condensed consolidated financial statements should be read in conjunction with
the consolidated financial statements and the notes thereto included or
incorporated by reference in the Company's 2001 Annual Report on Form 10-K. The
results of operations for the interim periods are not necessarily indicative of
the results of operations to be expected for the full year.
The Company adopted the provisions of Securities and Exchange Commission Staff
Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements,"
("SAB 101") in the fourth quarter of fiscal 2001, retroactive to October 1,
2000, as more fully discussed in the 2001 Annual Report on Form 10-K. Prior year
results have been restated to reflect this adoption.
Effective October 1, 2001, the Company adopted the provisions of Statement of
Financial Accounting Standard ("SFAS") No. 141, "Business Combinations," and
SFAS No. 142, "Goodwill and Other Intangible Assets," as more fully discussed in
Note 8. As a result of the adoption of these Statements, the Company is no
longer amortizing goodwill and indefinite-lived intangible assets, and has
reclassified certain assets to Goodwill, Net from Other Intangibles, Net that
did not meet the criteria for recognition apart from goodwill.
The Company redesignated its cash flow hedges in April 2001 pursuant to
implementation guidance released by the Derivatives Implementation Group of the
Financial Accounting Standards Board ("FASB") related to SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities," as more fully
discussed in the its 2001 Annual Report on Form 10-K. This interpretation allows
changes in time value of option contracts to be included in effectiveness
testing. Prior to the release of this guidance and the redesignation of these
hedges, the Company recorded hedging costs related to the change in the time
value of option contracts in other expense. Prior year hedging costs recorded in
other expense of $2,218 for the second quarter and $8,121 for the six months
ended have been reclassified as a reduction in revenues, to conform with the
current year presentation.
Capitalized software primarily represents costs associated with our
enterprise-wide program to upgrade our business information systems, known
internally as Genesis. The costs associated with the Genesis program will be
fully amortized by 2009, with amortization expense being reported as Selling and
administrative expense.
6
Note 2 - Inventory Valuation
The Company uses the last-in, first-out ("LIFO") method of determining cost for
substantially all inventories in the United States. An actual valuation of
inventory under the LIFO method will be made only at the end of each fiscal year
based on the inventory levels and costs at that time. Accordingly, interim LIFO
calculations are based on management's estimates of expected year-end inventory
levels and costs. All other inventories are accounted for using the first-in,
first-out ("FIFO") method.
Note 3 - Comprehensive Income
Comprehensive income for the Company is comprised of the following:
Three Months Ended Six Months Ended
March 31, March 31,
---------------------- -----------------------
2002 2001 2002 2001
-------- -------- -------- --------
Net Income $129,188 $114,165 $228,861 $151,113
Other Comprehensive Income,
Net of Tax
Foreign currency translation
adjustments (23,429) (41,738) (35,262) (35,391)
Unrealized (loss) gain on
investments, net of
amounts realized (2,806) (1,850) 3,527 (2,709)
Unrealized gain on
cash flow hedges, net of
amounts realized 984 3,221 3,849 5,271
-------- -------- -------- --------
Comprehensive Income $103,937 $ 73,798 $200,975 $118,284
======== ======== ======== ========
The amount of unrealized gains or losses on investments and cash flow hedges in
comprehensive income has been adjusted to reflect the realized gains included in
net income during the three and six months ended March 31, 2002 and 2001.
Note 4 - Earnings per Share
The following table sets forth the computations of basic and diluted earnings
per share, before the cumulative effect of accounting change:
7
Three Months Ended Six Months Ended
March 31, March 31,
----------------------- ----------------------
2002 2001 2002 2001
---------- -------- -------- --------
Income Before Cumulative
Effect of Accounting Change $129,188 $114,165 $228,861 $187,863
Preferred stock dividends (646) (685) (1,300) (1,386)
-------- -------- -------- --------
Income available to common
shareholders (A) 128,542 113,480 227,561 186,477
Preferred stock dividends -
using "if converted" method 646 685 1,300 1,386
Additional ESOP contribution -
using "if converted" method (146) (156) (297) (322)
-------- -------- -------- --------
Income available to common
shareholders after assumed
conversions (B) $129,042 $114,009 $228,564 $187,541
======== ======== ======== ========
Average common shares
outstanding (C) 258,436 257,021 258,819 255,729
Dilutive stock equivalents from
stock plans 6,970 7,612 6,908 7,538
Shares issuable upon conversion
of preferred stock 4,303 4,539 4,303 4,539
-------- -------- -------- --------
Average common and common
equivalent shares outstanding
- assuming dilution (D) 269,709 269,172 270,030 267,806
======== ======== ======== ========
Basic earnings per share (A/C) $ .50 $ .44 $ .88 $ .73
======== ======== ======== ========
Diluted earnings per share (B/D) $ .48 $ .42 $ .85 $ .70
======== ======== ======== ========
Note 5 - Contingencies
The Company is involved, both as a plaintiff and a defendant, in various legal
proceedings and claims which arise in the ordinary course of business,
including, without limitation, product liability, and environmental matters.
While it is not possible to predict or determine the outcome of the legal
actions brought against the Company, upon resolution of such matters, the
Company may incur charges in excess of presently established reserves. While
such future charges, individually and in the aggregate, could have a material
adverse impact on the Company's net income and net cash flows in the period in
which they are recorded or paid, in the Company's opinion, the results of these
matters, individually and in the aggregate, are not expected to have a material
adverse effect on the Company's consolidated financial condition. Further
discussion of legal proceedings is included in Part II of this Report on Form
10-Q.
8
Note 6 - Segment Data
For the six months ended March 31, 2002, decisions about resource allocation
and performance assessment were made separately for the BD Medical Systems
("Medical") segment, the BD Clinical Laboratory Solutions ("Clinical Lab")
segment, and the BD Biosciences ("Biosciences") segment.
The Company evaluates performance based upon operating income. Segment operating
income represents revenues reduced by product costs and operating expenses. As
discussed more fully in the Company's 2001 Annual Report on Form 10-K, during
fiscal 2001, the Company refined its methodology for allocating indirect
expenses for purposes of reporting segment operating income to the chief
operating decision maker. The Company believes this new approach is a preferable
method for allocating shared expenses as the allocations are now being performed
at a more detailed level of reporting. As a result of this change in
methodology, segment operating income has been restated for the prior year.
Financial information for the Company's segments is as follows:
Three Months Ended Six Months Ended
March 31, March 31,
-------------------------- -----------------------------
2002 2001(A) 2002 2001(A)
--------- -------- ------------ ----------
Revenues
Medical $ 530,384 $499,524 $1,033,414 $ 959,913
Clinical Lab 317,657 297,473 612,406 572,076
Biosciences 164,930 153,952 312,097 283,378
---------- -------- ---------- ----------
Total Revenues (B) $1,012,971 $950,949 $1,957,917 $1,815,367
========== ======== ========== ==========
Segment Operating Income (C)
Medical $ 111,896(D) $110,937 $ 210,128 (D) $ 201,562
Clinical Lab 68,728 57,441 123,450 103,318
Biosciences 32,406 26,914 57,890 40,324
---------- -------- ---------- ----------
Total Segment Operating
Income 213,030 195,292 391,468 345,204
Unallocated Items (E) (45,450) (46,688) (93,422) (94,742)
---------- -------- ---------- ----------
Income Before Income Taxes and
Cumulative Effect of Change in
Accounting Principle $ 167,580 $148,604 $ 298,046 $ 250,462
========== ======== ========== ==========
(A) As discussed in Note 1, prior year amounts reflect the reclassification of
hedging costs from other expense to revenues. The amounts reclassified were
$589 for Medical, $776 for Clinical Lab, and $853 for Biosciences for the
quarter, and $2,768 for Medical, $3,017 for Clinical Lab, and $2,336 for
Biosciences for the six months ended. Prior year amounts have also been
restated to reflect the adoption of SAB 101.
(B) Intersegment revenues are not material.
(C) The Company ceased amortizing goodwill and indefinite-lived intangible
assets on 10/1/2001, as discussed in Note 8.
(D) Includes $9,937 for special charges, as discussed in Note 7.
(E) Includes interest, net; foreign exchange; corporate expenses; gains on
sales of investments and certain legal defense costs.
9
Note 7 - Special Charges
Fiscal Year 2002
The Company recorded special charges of $9,937 during the second quarter of
fiscal 2002 related to a manufacturing restructuring program in the Medical
segment. This program is aimed at optimizing manufacturing efficiencies and
improving the Company's competitiveness in the different markets in which it
operates. Of these charges, $4,828 related to severance costs for the
termination of 267 employees in France, Mexico, China, and Florida. The Company
expects these terminations to be completed and the related accrued severance to
be substantially paid by the first quarter of fiscal 2003. Also included in
second quarter special charges was $5,109 for the write-down to net realizable
value of impaired assets in China. The depreciation of these assets will be
accelerated over the period remaining until the completion of the exit plan.
There were no significant severance payments made during the quarter related to
this plan.
Fiscal Year 2000
The Company recorded special charges of $57,514 in fiscal year 2000, as
discussed in the 2001 Annual Report on Form 10-K. The Company developed a
worldwide organizational restructuring plan to align its existing infrastructure
with its projected growth programs. This plan included the elimination of open
positions and employee terminations from all businesses, functional areas and
regions for the sole purpose of cost reduction. This plan provided for the
termination of approximately 600 employees. As of March 31, 2002, 542 of the
targeted 600 had been severed. The remaining terminations and related accrued
severance are expected to be substantially completed and paid no later than the
second half of fiscal 2002.
A summary of the 2000 special charge accrual activity during the first six
months of fiscal 2002 follows:
Severance Restructuring Other
------------------- ------------------- -----------------
Accrual Balance at
September 30, 2001 $6,300 $1,200 $11,700
Payments (1,800) - (3,300)
------------------- ------------------- -----------------
Accrual Balance at
March 31, 2002 $4,500 $1,200 $8,400
=================== =================== =================
Fiscal Year 1998
The Company recorded special charges of $90,945 in fiscal year 1998 as discussed
in the 2001 Annual Report on Form 10-K. In an effort to improve manufacturing
efficiencies at certain of its locations, the Company initiated a restructuring
plan in 1998, which included the closing of a surgical blade plant in Hancock,
New York. The move of a production line from Hancock to another location has
been delayed, as more fully described in the Company's 2001 Annual Report on
Form 10-K. The Company expects the Hancock restructuring plan to be completed
and the related accruals to be substantially paid by December 2002. The
remaining 150 employees will be terminated upon closure of the plant.
10
A summary of the 1998 special charge accrual activity follows:
Severance Restructuring Other
---------------- ----------------- --------------
Accrual Balance at September 30, 2001 $6,900 $1,500 $1,300
Payments (300) (400) (100)
---------------- ----------------- --------------
Accrual Balance at March 31, 2002 $6,600 $1,100 $1,200
================ ================= ==============
Note 8 - Adoption of New Accounting Standards
Effective October 1, 2001, the Company adopted the provisions of SFAS No. 141,
"Business Combinations," and SFAS No. 142, "Goodwill and Other Intangible
Assets." SFAS No. 141 eliminates the pooling-of-interests method of accounting
for business combinations initiated after July 1, 2001, and changes the criteria
for recognizing intangible assets apart from goodwill. SFAS No. 141 requires any
business combination initiated after June 30, 2001 to be accounted for by the
purchase method. SFAS No. 142 stipulates that goodwill and indefinite-lived
intangible assets will no longer be amortized, but instead will be periodically
reviewed for impairment. Diluted earnings per share for the six months ended
March 31, 2002 reflect an approximate five-cent benefit from the adoption of
SFAS 142.
Upon adoption of these Statements, the Company reclassified approximately
$28,500 of assets from Other Intangibles, Net to Goodwill, Net, primarily
related to assembled workforce. These assets did not meet the criteria for
recognition apart from goodwill under SFAS No. 141. Of this amount,
approximately $18,400 related to the Biosciences segment and approximately
$10,100 related to the Medical segment. The Company also ceased amortizing
certain trademarks that were deemed to have indefinite lives as they are
expected to generate cash flows indefinitely. The following table reconciles
reported net income to that which would have been reported if the current method
of accounting was used for the quarter and six months ended March 31, 2001:
Three Months Ended Six Months Ended
March 31, March 31,
------------------ -------------------
2002 2001 2002 2001
------------------ -------------------
Reported Net Income $129,188 $114,165 $228,861 $151,113
Add back: Goodwill
Amortization - 6,595 - 12,740
Add back: Amortization
of Indefinite-Lived
Intangible Assets - 344 - 619
------------------ ------------------
Adjusted Net Income $129,188 $121,104 $228,861 $164,472
================== ==================
11
Three Months Ended Six Months Ended
March 31, March 31,
------------------ ----------------
2002 2001 2002 2001
------------------ ----------------
Basic Earnings Per Share $ .50 $ .44 $ .88 $ .59
Goodwill Amortization - .03 - .07
Amortization of
Indefinite-Lived
Intangible Assets - - - -
------------------ ----------------
Adjusted Basic Earnings
Per Share $ .50 $ .47 $ .88 $ .66
================== ================
Diluted Earnings Per
Share $ .48 $ .42 $ .85 $ .56
Goodwill Amortization - .02 - .05
Amortization of
Indefinite-Lived
Intangible Assets - - - -
------------------ ----------------
Adjusted Diluted Earnings
Per Share $ .48 $ .44 $ .85 $ .61
================== ================
Acquired Intangible Assets
As of March 31, 2002
--------------------------------------
Gross Carrying Accumulated
Amount Amortization
-------------------------------------
Amortized intangible assets:
Core and Developed Technology $370,044 $76,119
Patents, Trademarks, & Other 299,399 190,724
--------------------------------------
Total $669,443 $266,843
======================================
Unamortized intangible assets:
Goodwill $462,826
Trademarks 17,621
---------------
Total $480,447
===============
Estimated Intangible Amortization Expense:
For the Years Ending September 30:
2002 $36,999
2003 36,902
2004 35,219
2005 32,709
2006 31,400
2007 31,047
12
On March 31, 2002, the Company completed its goodwill impairment assessment as
required by SFAS No. 142. The adoption of this aspect of SFAS No. 142 did not
result in a goodwill impairment and therefore had no impact on the results of
operations or financial condition of the Company.
Pending Adoption of New Accounting Standard
In August 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets." This Statement requires that one accounting
model be used for long-lived assets to be disposed of by sale and it broadens
the presentation of discontinued operations to include more disposal
transactions. The provisions relating to long-lived assets to be disposed of by
sale or otherwise are effective for disposal activities initiated by a
commitment to a plan after the effective date of the Statement. The Company is
required to adopt the provisions of this Statement no later than October 1,
2002, and does not expect that this Statement will have a material impact on its
consolidated financial position or results of operations.
13
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Results of Operations
Becton, Dickinson and Company ("BD") adopted the provisions of Securities and
Exchange Commission Staff Accounting Bulletin No. 101, "Revenue Recognition in
Financial Statements," ("SAB 101") in the fourth quarter of fiscal 2001,
retroactive to October 1, 2000, as more fully discussed in our 2001 Annual
Report on Form 10-K. Prior year results have been restated to reflect this
adoption.
Second quarter revenues of $1 billion represented a seven percent increase from
the same period a year ago. Revenues for the six months were $2 billion, an
eight percent increase over a year ago. Revenue growth was unfavorably affected
by foreign currency translation, which we estimate reduced revenues by two
percent for both the three and six month periods. International revenue growth
of three percent was adversely affected by the euro, Japanese yen, and Brazilian
real. After excluding the unfavorable impact of foreign currency translation,
international revenues grew nine percent and ten percent for the three and six
months, respectively.
BD Medical Systems ("Medical") revenues increased six percent for the quarter,
with over one-half of this growth from sales of advanced protection devices in
the United States. Worldwide sales of prefillable drug delivery devices, which
grew about $10 million or 15%, also contributed to the growth of this segment.
International Medical revenue growth was nine percent, after excluding the
unfavorable impact of foreign currency translation. Medical revenue growth was
offset, as anticipated, by essentially flat sales in the consumer health care
product area, due in part to the redirection of promotional efforts in the
United States toward branded diabetes syringe sales at the retail level.
BD Clinical Laboratory Solutions ("Clinical Lab") revenues increased seven
percent for the quarter. International Clinical Lab revenue growth was eight
percent, after excluding the unfavorable impact of foreign currency translation.
Sales of advanced protection devices in the United States contributed about two
percent to the growth for the segment, as did sales of our new diagnostic
products, BD ProbeTec ET'TM' and BD Phoenix'TM'. Increased sales of respiratory
and flu diagnostic tests also contributed two percent to the growth for the
segment, as did an anticipated inventory stocking by distributors in the
diagnostic systems area in advance of the installation of a new enterprise
resource planning system. Revenue growth for the segment was partially offset by
the voluntary recall of specific lots of BD Safety-Lok'TM' blood collection sets
during the quarter, which reduced revenues by about one percent. Revenue growth
for the year is not expected to be significantly impacted by this recall.
BD Biosciences ("Biosciences") revenues grew seven percent for the quarter,
driven primarily by strong flow cytometry instrument and immunology reagent
revenues. Revenue growth for the segment was adversely impacted by continued
weaker demand for certain molecular biology products, as well as by essentially
flat revenues in the United States for the discovery labware product area.
International Biosciences revenues grew approximately 14 percent, after
excluding the unfavorable impact of foreign currency translation.
14
Segment Revenues Three Months Ended March 31, Six Months Ended March 31,
---------------------------------------------------------
(Dollars in millions) 2002 2001 % Change 2002 2001 % Change
========================================================================================
Medical
United States $ 269 $245 10 $ 520 $ 471 11
International 261 255 2 513 489 5
- ----------------------------------------------------------------------------------------
Total $ 530 $500 6 $1,033 $ 960 8
========================================================================================
Clinical Lab
United States $ 194 $175 10 $ 366 $ 335 9
International 124 122 2 246 237 4
- ----------------------------------------------------------------------------------------
Total $ 318 $297 7 $ 612 $ 572 7
========================================================================================
Biosciences
United States $ 88 $ 83 7 $ 165 $ 156 6
International 77 71 8 147 127 15
- ----------------------------------------------------------------------------------------
Total $ 165 $154 7 $ 312 $ 283 10
========================================================================================
Total Revenues
United States $ 551 $503 9 $1,051 $ 962 9
International 462 448 3 907 853 6
- ----------------------------------------------------------------------------------------
Total $1,013 $951 7 $1,958 $1,815 8
========================================================================================
Refer to Note 6 in Notes to Condensed Consolidated Financial Statements for
additional segment data.
Effective October 1, 2001, BD adopted the provisions of Statement of Financial
Accounting Standards ("SFAS") No. 141, "Business Combinations," and SFAS No.
142, "Goodwill and Other Intangible Assets", which, among other things,
eliminates the requirement to amortize goodwill and certain other intangible
assets. See Note 8 of the Notes to Condensed Consolidated Financial Statements
for further discussion.
Excluding the impact of special charges as more fully described below and in
Note 7 of the Notes to Condensed Consolidated Financial Statements and the
adoption of SFAS Nos. 141 and 142, changes in segment operating income were
primarily driven by fluctuations in revenue, as discussed above. Clinical Lab
segment operating income also benefited from increased sales of advanced
protection devices as well as respiratory and flu diagnostic tests, which have
higher overall gross profit margins as compared to products sold in the same
period in the prior year. Biosciences segment operating income benefited from
foreign exchange gains in the current quarter.
Gross profit margin was 48.4% for the quarter and 47.8% for the six months,
compared with 48.8% and 48.2%, respectively, for the prior year. Higher gross
margins from sales of our advanced protection products were more than offset by
increased sales in the current year of products with lower overall gross profit
margins. Gross profit margin was also negatively impacted by unfavorable
manufacturing variances resulting from an inventory reduction program in the
Medical segment.
Selling and administrative expense was 24.4% of revenues for the quarter and
25.3% of revenues
15
for the six months, compared with the prior year's ratios of 25.4% and 26.3%,
respectively. Excluding goodwill amortization associated with the adoption of
SFAS Nos. 141 and 142, prior year selling and administrative expense as a
percent of revenues would have been about 24.8% for the quarter and 25.6% for
the six months. Incremental spending on key initiatives was mostly offset by $6
million of favorable foreign currency translation. Investment in research and
development was 5.6% of revenues for the quarter and 5.7% of revenues for the
six months, compared with 5.7% and 5.9% of revenues, respectively, in the prior
year.
Operating margin was 17.4% for the quarter and 16.2% for the six months,
compared with 17.6% and 16.0%, respectively, in the prior year. Excluding the
aforementioned impact of special charges in the current year's quarter and
goodwill amortization in the prior year's quarter, operating margin as a percent
of revenue would have been 18.3% for the quarter and 16.7% for the six months in
both the current and prior years. Net interest expense declined $7 million for
the quarter and $16 million for the six months compared with the prior year,
primarily due to lower short-term interest rates.
Other income, net was $500 thousand for the quarter, compared with other
expense, net, in the prior year of $3 million. Foreign exchange gains of $9
million in the current quarter were offset by write-downs of assets to fair
value, including $5 million relating to assets held for sale. Other expense, net
for the six months was $1 million, compared with $5 million in the prior year.
For the six months, foreign exchange gains of $13 million were offset by net
losses on investments of $7 million and write-downs of assets of $8 million. As
further described in Note 1 of the Notes to Condensed Consolidated Financial
Statements, hedging costs of $8 million recorded in other expense in the first
six months of fiscal 2001 have been reclassified as a reduction in revenues, to
conform with the current year presentation.
The income tax rate was 23% for the quarter, or 24% excluding the impact of
special charges. Our tax rate in the prior year was 23% on a post-SAB 101 basis.
We expect our tax rate for the full year to be about 24%, excluding the impact
of special charges.
Net income and diluted earnings per share for the current quarter were $129
million and 48 cents, respectively, compared with $114 million and 42 cents in
the prior year. Excluding the impact of special charges discussed earlier,
diluted earnings per share for the quarter would have been 50 cents. Reported
net income and diluted earnings per share for the current six months were $229
million and 85 cents, respectively, compared with net income and diluted
earnings per share, excluding the cumulative effect of accounting change, of
$188 million and 70 cents for the same period in fiscal 2001. Diluted earnings
per share for the current quarter and six months reflect a benefit of
approximately 2 1/2 cents and 5 cents, respectively, from the adoption of SFAS
No. 142. See Note 8 of the Notes to Condensed Consolidated Financial Statements
for further discussion.
16
On April 8, 2002, we entered into a non-binding letter of intent with AorTech
International plc ("AorTech") to sell our critical care product line for
approximately $52 million. Approximately one-half of the purchase price is
expected to be paid over 30 months following the date of closing, and is subject
to adjustments based on future sales results. The critical care product line
generated sales of about $47 million in fiscal 2001. Assuming this divestiture
had been completed as of October 1, 2001, we estimate that fiscal 2002 diluted
earnings per share would have been impacted by less than one cent, excluding the
estimated loss on sale discussed below.
The transaction is subject to the execution of a definitive purchase agreement
and the approval of AorTech's Board of Directors and shareholders, as well as
BD's Board of Directors. These events are expected to occur in the second half
of our fiscal year, at which time we will record a substantially non-cash loss
on sale, that we presently estimate to be in the range of $25 to $30 million, or
approximately six to seven cents per share.
Special Charges
We recorded special charges of $10 million, or two cents per share, during the
second quarter related to a manufacturing restructuring program in the Medical
segment, as more fully described in Note 7 of the Notes to Condensed
Consolidated Financial Statements. During the third quarter of fiscal 2002, we
anticipate recording additional special charges associated with this
restructuring program, which we currently estimate to be approximately $12
million, or four cents per share, primarily related to severance in Europe. Over
the next 12 months, we expect any savings from the reduction in salaries and
wages expense to be more than offset by other costs related to this
restructuring program, including accelerated depreciation and equipment transfer
costs. Beginning in Q3 of fiscal 2003, we anticipate the net savings associated
with this program to be approximately $2 million each quarter.
We recorded special charges of $58 million and $91 million in fiscal years 2000
and 1998, respectively, as described in Note 7 of the Notes to Condensed
Consolidated Financial Statements. For the 2000 restructuring plan, the annual
savings from the reduction in salaries and wages expense are estimated to be $30
million. As anticipated, these savings, beginning in 2001, offset incremental
costs relating to programs, such as advanced protection technologies, molecular
oncology, and our enterprise-wide program to upgrade our business information
systems, known internally as Genesis. The estimated annual benefits of $4
million for the 1998 restructuring plan related to reduced manufacturing costs
and tax savings associated with the move of a surgical blade plant are expected
to be realized following the closure of the facility. See Note 7 of the Notes to
Condensed Consolidated Financial Statements for further discussion.
Liquidity and Capital Resources
During the first six months of fiscal 2002, cash provided by operating
activities was $292 million compared to $316 million during the first six months
of last year. Cash provided by operations in fiscal 2002 was reduced by a $100
million cash contribution to the U.S. pension plan made in November 2001. We
made this contribution in order to mitigate the decline in the market value of
pension assets during fiscal 2001.
17
As of March 31, 2002, total debt of $1.3 billion represented 34.8% of total
capital (shareholders' equity, net non-current deferred income tax liabilities,
and debt), down from 38.9% a year ago. We use commercial paper to meet our
short-term financing needs, including working capital requirements. As discussed
in our Annual Report on Form 10-K, we currently have in place two syndicated
credit facilities totaling $900 million that are available to provide backup
support for our commercial paper program and for other general corporate
purposes. Each of these facilities contains a single financial covenant relating
to our interest coverage ratio. Given the availability of these facilities and
our strong credit ratings, we continue to have a high degree of confidence in
our ability to refinance maturing short-term and long-term debt, as well as
incur substantial additional debt, if required.
Capital expenditures during the first six months were $115 million, compared
with last year's amount of $180 million. We expect capital spending for fiscal
2002 to be about $300 million. The decline in cash provided by financing
activities is primarily due to the repurchase of three million shares of our
common stock for $103 million during the first six months. At March 31, 2002,
seven million shares remained under a September 2001 Board of Directors'
resolution that authorized the repurchase of up to 10 million common shares.
Critical Accounting Policies
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" discusses our condensed consolidated financial statements, which
have been prepared in accordance with accounting principles generally accepted
in the United States. The preparation of these financial statements requires
management to make estimates and assumptions that affect the reported amounts of
assets, liabilities, revenues and expenses, as well as the disclosure of
contingent assets and liabilities at the date of the financial statements. Some
of those judgments can be subjective and complex, and consequently actual
results could differ from those estimates. Management bases its estimates and
judgments on historical experience and on various other factors that are
believed to be reasonable under the circumstances, the results of which form the
basis for making judgments about the carrying values of assets and liabilities
that are not readily apparent from other sources. For any given estimate or
assumption made by management, there may also be other estimates or assumptions
that are reasonable. However, we believe that given the current facts and
circumstances, it is unlikely that applying any such other reasonable judgment
would materially impact the accompanying financial statements.
Management believes the following critical accounting policies affect its more
significant judgments and estimates used in the preparation of BD's consolidated
financial statements.
Revenue Recognition
We recognize revenue for most instruments sold from the Biosciences segment upon
installation at the customer's site, due to the fact that a substantive
installation effort is required and only we can perform the service. We also
defer revenue recognition related to branded insulin syringe products that are
sold under incentive programs to distributors in the U.S. consumer trade
channel. These distributors have implied rights of return on unsold merchandise
held by them. We recognize revenue on these products upon the sell-through of
the respective product from the
18
distribution channel partner to the end customer. Substantially all other
revenue is recognized when products are shipped to customers.
Investments
We hold minority interests in companies having operations or technology in areas
within or adjacent to BD's strategic focus. Some of these companies are publicly
traded for which share prices are available, and some are non-publicly traded
whose value is difficult to determine. We write down an investment when
management believes an investment has experienced a decline in value that is
other than temporary. Future adverse changes in market conditions or poor
operating results of the underlying investments could result in an inability to
recover the carrying value of the investments, thereby possibly requiring
impairment charges in the future.
Restructuring
During the current quarter, we recorded reserves in connection with our
restructuring program. These reserves include estimates pertaining to employee
separation costs. In fiscal years 2000 and 1998, we also recorded reserves
related to restructuring programs. These reserves included estimates pertaining
to employee separation costs, as well as litigation defense costs associated
with our latex glove business, which was divested in 1995. See Note 7 of the
Notes to Condensed Consolidated Financial Statements for further discussion.
Although we do not anticipate significant changes, the actual costs may differ
from these estimates.
Contingencies
We are involved, both as a plaintiff and a defendant, in various legal
proceedings which arise in the ordinary course of business, including, without
limitation, product liability and environmental matters. A more complete
description of legal proceedings has been set forth in our 2001 Annual Report on
Form 10-K (the "10-K"), subsequent periodic reports filed with the Securities
and Exchange Commission on Forms 10-Q and 8-K and in Part II of this Report on
Form 10-Q. We assess the likelihood of any adverse judgments or outcomes to
these matters as well as potential ranges of probable losses. A determination of
the amount of reserves, if any, for these contingencies is made after careful
analysis of each individual issue and, when appropriate, is developed after
consultation with outside counsel. The reserves may change in the future due
to new developments in each matter or changes in our strategy in dealing with
these matters.
Benefit Plans
We have significant pension and post-retirement benefit costs and credits that
are developed from actuarial valuations. Inherent in these valuations are key
assumptions including discount rates and expected return on plan assets. We
consider current market conditions, including changes in interest rates, in
selecting these assumptions. Changes in the related pension and post-retirement
benefit costs or credits may occur in the future due to changes in the
assumptions.
19
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 Becton, Dickinson
and Company ("BD"). BD and its representatives may from time to time make
certain forward-looking statements in publicly-released materials, both written
and oral, including statements contained in this report and filings with the
Securities and Exchange Commission and in our other reports to shareowners.
Forward-looking statements may be identified 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 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:
o 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.
o Competitive product and pricing pressures and our ability to gain or
maintain market share in the global market as a result of actions by
competitors, including technological advances achieved and patents attained
by competitors as patents on our products expire. While we believe our
opportunities for sustained, profitable growth are considerable, actions of
competitors could impact our earnings, share of sales and volume growth.
o Changes in domestic and foreign healthcare resulting in 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.
o Fluctuations in the cost and availability of raw materials and the ability
to maintain favorable supplier arrangements and relationships.
20
o 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.
o 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, and 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.
o Significant litigation adverse to BD, including product liability claims,
patent infringement claims, and antitrust claims, as well as other risks
and uncertainties detailed from time to time in our Securities and Exchange
Commission filings.
o 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.
o Product efficacy or safety concerns resulting in product recalls,
regulatory action on the part of the Food and Drug Administration (or
foreign counterparts) or declining sales.
o Economic and political conditions in international markets, including civil
unrest, governmental changes and restrictions on the ability to transfer
capital across borders.
o 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.
o The impact of business combinations, including acquisitions and
divestitures, both internally for BD and externally in the healthcare
industry.
o Issuance of new or revised accounting standards by the American Institute
of Certified Public Accountants, the Financial Accounting Standards Board
or the Securities and Exchange Commission.
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 fiscal
year ended September 30, 2001.
21
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
We are involved, both as a plaintiff and a defendant, in various legal
proceedings which arise in the ordinary course of business, including,
without limitation, product liability and environmental matters.
A more complete description of legal proceedings has been set forth in
our 2001 Annual Report on Form 10-K (the "10-K"). For the quarter ended
March 31, 2002, the following changes have occurred.
Latex Cases
We have received a total of 513 claims to date, relating to alleged
reactions caused by exposure to latex resulting from the use, over time,
of latex gloves. The facts and circumstances of new claims filed since
the 10-K are similar to those previously filed and we are of the same
opinion as stated in the 10-K.
RTI Litigation
On January 18, 2002, Retractable Technologies, Inc. ("RTI" or
"plaintiff") filed a second amended complaint against BD, another
manufacturer, and two group purchasing organizations ("GPOs") under the
caption Retractable Technologies, Inc. vs. Becton, Dickinson and
Company, et al. (Civil Action No. 501 CV 036, United States District
Court, Eastern District of Texas) for alleged violations of state and
Federal antitrust laws. Plaintiff also has asserted claims for business
disparagement, common law conspiracy, and tortious interference with
business relationships. Plaintiff seeks money damages in an as yet
undisclosed amount. On February 22, 2002, BD filed a motion, now
pending, to dismiss the second amended complaint. Although the Court
previously set September 10, 2002 to begin jury selection, extension of
that date until early 2003 is the subject of discussions among the
parties, as well as the subject of a pending motion filed by the
defendants with the Court on April 24, 2002.
Class Action Cases
We, along with another manufacturer and several medical product
distributors, have been named as a defendant in product liability class
action lawsuits relating to healthcare workers who allegedly sustained
needlesticks on conventional products, but have not become infected with
any disease. At the time of the filing of the 10-K, cases were pending
on behalf of an unspecified number of healthcare workers in seven states
seeking class certification under the laws of these states. Since the
filing of our Quarterly Report on Form 10-Q for the period ended
December 31, 2001, the following developments have occurred:
o In Alabama, in Daniels vs. Becton Dickinson et al (Case no. CV 1998
2757, Montgomery Circuit County Court), which was filed on October
30, 1998, the court dismissed the claims without prejudice on March
1, 2002.
22
o In Illinois, in McCaster vs. Becton Dickinson et al. (Case No.
98L09478, Cook County Circuit Court), which was filed on August 13,
1998, the appeals court issued a decision on March 6, 2002 denying
plaintiff's petition for review of the trial court's January 11, 2002
decision to deny class certification.
o In New Jersey, in Pollak, Swartley vs. Becton Dickinson et al (Case
No. L-9449-98, Camden County Superior Court, which was filed on
December 7, 1998, the court dismissed the case (including the
individual claims of all the named plaintiffs) with prejudice on
March 6, 2002. Summary judgment dismissing the complaint of the class
representative had previously been granted on November 30, 2001.
The Company continues its vigorous defense of the four remaining class
action lawsuits pending.
CalOSHA
As reported in the Form 10-K, CalOSHA issued a Citation and Notification
of Penalty to the Kaiser Permanent Sunset facility in Los Angeles,
alleging that the BD Eclipse'TM' blood collection device used in the
laboratory at that facility did not meet the California regulatory
standard for a needle with engineered sharp injury protection. The
Citation did not state the factual basis of the allegation or the relief
sought. Kaiser appealed the Citation and BD intervened in the
proceeding. On February 25, 2002, the California Occupational Safety and
Health Appeals Board entered an Order in which CalOSHA withdrew the
Citation regarding the BD Eclipse'TM', stating that "The Division
[CalOSHA] has made no finding that the Eclipse device is unacceptable or
that California employees should not be using the device."
Summary
While it is not possible to predict or determine the outcome of the
above or other legal actions brought against BD, upon resolution of such
matters, we may incur charges in excess of presently established
reserves. Such future charges, individually and in the aggregate, could
have a material adverse impact on our net income and net cash flows in
the period in which they are recorded or paid, however, in our opinion,
the results of the above matters, individually and in the aggregate, are
not expected to have a material adverse effect on the Company's
consolidated financial condition.
Item 2. Changes in Securities and Use of Proceeds.
Not applicable.
Item 3. Defaults Upon Senior Securities.
Not applicable.
23
Item 4. Submission of Matters to a Vote of Security Holders.
a.) Our Annual Meeting of Shareholders was held on February 13, 2002.
c.) i.) A management proposal for the election of three directors for
the terms indicated below was voted upon as follows:
Votes Votes
Nominee Term For Withheld
-------------------------------------------------------------------------
Albert J. Costello 3 Years 229,613,527 2,534,181
James E. Perrella 3 Years 229,594,907 2,552,801
Alfred Sommer 3 Years 229,647,495 2,500,213
ii.) A management proposal to approve the selection of Ernst &
Young, LLP as independent auditors for the fiscal year ending
September 30, 2002 was voted upon. 229,478,035 shares were
voted for the proposal, 1,543,019 shares were voted against,
and 1,126,654 shares abstained.
iii.) A management proposal relating to the adoption of the 2002
Stock Option Plan was voted upon. 208,084,543 shares were
voted for the proposal, 22,307,585 shares were voted against,
and 1,755,580 shares abstained.
iv.) A shareholder proposal requesting the Board of Directors take
the necessary steps to provide for cumulative voting in the
election of directors was voted upon. 74,217,231 shares were
voted for the proposal, 118,313,472 shares were voted against
and 15,916,558 shares abstained.
Item 5. Other Information.
Not applicable.
Item 6. Exhibits and Reports on Form 8-K.
a) Exhibits
None.
b) Reports on Form 8-K
During the three-month period ended March 31, 2002, we filed
three Current Reports on Form 8-K:
(i) Under Item 5 - Other Events, we announced our results for the
first quarter ended December 31, 2001 in a report dated
January 23, 2002.
24
(ii) Under Item 5 - Other Events, in a report dated February 14,
2002, we confirmed the election of Edward J. Ludwig to the
additional role of Chairman of the Board effective following
the BD Annual Meeting of shareholders that was held on
February 13, 2002.
(iii) Under Item 9 - Regulation FD Disclosure, we furnished
information in a report dated March 20, 2002 regarding recent
developments in three product liability class action lawsuits.
25
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)
Date May 13, 2002
/s/ John R. Considine
---------------------------------------------------
John R. Considine
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
/s/ Richard M. Hyne
---------------------------------------------------
Richard M. Hyne
Vice President and Controller
(Chief Accounting Officer)
26
STATEMENT OF DIFFERENCES
------------------------
The trademark symbol shall be expressed as ............................... 'TM'