BECTON DICKINSON & CO

Becton, Dickinson and Company is a global medical technology company engaged in the development, manufacture and sale of a broad range of medical supplies, devices, laboratory equipment and diagnostic products used by healthcare institutions, physicians, life science researchers, clinical laboratories, the pharmaceutical industry and the general public. The company operates in the increasingly complex and challenging medical technology marketplace, where technological advances and scientific discoveries have accelerated the pace of change, the regulatory environment is becoming more complex and vigorous, and economic conditions have resulted in a challenging market. Companies of varying sizes compete in this global field, with some more specialized than BD with respect to particular markets and some having greater financial resources, while new companies have entered the field particularly in molecular diagnostics, non-traditional point of care and at-home testing, safety-engineered devices and in the life sciences.

BD faces significant competition from a wide range of existing competitors and new market entrants, including large medical device companies with multiple product lines, some of which may have greater financial and other resources, as well as firms which are more specialized with respect to particular markets or product lines. Nontraditional entrants, such as technology companies, are also entering the healthcare industry and some may have greater financial and other resources. The company competes on the basis of many factors including price, quality, innovation, service, reputation, distribution and promotion. The entry into the market of low-cost manufacturers has created increased pricing pressures, and acquisitions and collaborations by and among companies seeking a competitive advantage also affect the competitive environment.

BD generates revenue through the development, manufacture and sale of a broad range of medical supplies, devices, laboratory equipment and diagnostic products. The company's products are marketed and distributed in the United States and internationally through independent distribution channels, as well as directly to hospitals and other healthcare related institutions by BD and independent sales representatives. In the United States, BD uses acute care, non-acute care, laboratory and drug wholesaler distributors to broadly support overall disposable product demand from end user customers, while capital equipment is mostly sold direct to end user customers. In international markets, products are distributed either directly or through distributors, with the practice varying by country. The company's worldwide sales are not generally seasonal, with the exception of certain medical devices in the Medication Delivery Solutions business unit and flu diagnostic products in the Diagnostic Solutions business unit, both of which relate to seasonal diseases such as influenza.

BD Medical produces a broad array of medical technologies and devices used to help improve healthcare delivery, consisting of four organizational units. Medication Delivery Solutions includes peripheral intravenous catheters, advanced peripheral catheters, central lines, acute dialysis catheters, vascular access technology, vascular care products, needle-free IV connectors, closed-system drug transfer devices, conventional and safety hypodermic syringes and needles, anesthesia needles and trays, enteral syringes, and sharps disposal systems. Medication Management Solutions includes IV medication safety and infusion therapy delivery systems including infusion pumps, dedicated disposables, and IV fluids, medication compounding workflow systems, automated medication dispensing, automated supply management systems, medication inventory optimization and tracking systems, informatics and analytics solutions, and pharmacy automation systems. Pharmaceutical Systems includes prefillable drug delivery systems such as prefillable syringes, safety, shielding and self-injection systems and support services provided to pharmaceutical companies for use as containers for injectable pharmaceutical products. Advanced Patient Monitoring includes advanced hemodynamic monitoring systems used to measure a patient's heart function and fluid status in surgical and intensive care settings, including noninvasive tissue oximetry systems, hemodynamic and tissue oximetry monitoring systems, pulmonary artery catheters and arterial pressure monitoring products and blood pressure measurement systems. Total Medical revenues were $11.456 billion ¹ in fiscal 2025, compared to $10.074 billion ² in fiscal 2024 and $9.502 billion ³ in fiscal 2023.

BD Life Sciences provides products for the safe collection and transport of diagnostics specimens, and instruments and reagent systems to detect a broad range of infectious diseases, healthcare-associated infections and cancers, and produces research and clinical tools that facilitate the study of cells. Diagnostic Solutions includes automated blood culturing and tuberculosis culturing systems, microorganism identification and drug susceptibility systems, microbiology laboratory automation and informatics, dehydrated, liquid and plated media, molecular testing systems for infectious diseases and women's health, and rapid diagnostic assays for testing of respiratory infections at point of care. Biosciences includes fluorescence-activated cell sorters and analyzers, antibodies and kits for performing cell analysis, reagents for life science research, solutions for high-throughput single-cell gene and protein expression analysis, and clinical oncology, immunological and transplantation diagnostic/monitoring reagents, analyzers and informatics. Specimen Management includes blood collection systems including safety-engineered wingsets, needles and blood collection tubes, arterial blood gas devices, urine collection kits, molecular research tubes, capillary collection technologies alongside associated products for patient identification, data capture, storage and transportation. Total Life Sciences revenues were $5.167 billion ⁴ in fiscal 2025, compared to $5.191 billion ⁵ in fiscal 2024 and $5.133 billion ⁶ in fiscal 2023. BD Interventional provides vascular, urology, oncology and surgical specialty products that are intended to be used once and then discarded or are either temporarily or permanently implanted. Surgery includes hernia and soft tissue repair, biological grafts, bioresorbable grafts, biosurgery, and other surgical products, BD Surgiphor Antimicrobial Irrigation System, and BD ChloraPrep surgical infection prevention products. Peripheral Intervention includes percutaneous transluminal angioplasty balloon catheters, radio frequency ablation catheters, peripheral vascular stents, self-expanding and balloon-expandable stent grafts, vascular grafts, drug coated balloons, ports, biopsy, chronic dialysis, inferior vena catheter filters, endovascular fistula creation devices and drainage products, and atherectomy and thrombectomy systems. Urology and Critical Care includes urine management and measurement devices, indwelling, intermittent and external urine catheters, kidney stone management devices, Targeted Temperature Management, and fecal management devices. Total Interventional revenues were $5.217 billion ⁷ in fiscal 2025, compared to $4.980 billion ⁸ in fiscal 2024 and $4.736 billion ⁹ in fiscal 2023.

On September 3, 2024, BD completed the acquisition of Edwards Lifesciences' Critical Care product group, which was renamed as BD Advanced Patient Monitoring, for total consideration of $3.914 billion ¹⁰. On July 13, 2025, BD entered into a definitive agreement to combine its Biosciences and Diagnostic Solutions business with Waters Corporation in a Reverse Morris Trust transaction, with BD's shareholders expected to own approximately 39.2% ¹¹ of the combined company and existing Waters' shareholders expected to own approximately 60.8% ¹² of the combined company; BD expects to receive a cash distribution of approximately $4 billion ¹³ prior to completion and Waters is expected to assume approximately $4 billion ¹⁴ of incremental debt, with the transaction expected to close around the end of the first quarter of calendar year 2026. In August 2023, BD completed the sale of the Interventional segment's Surgical Instrumentation platform, recognizing a pre-tax gain of approximately $268 million ¹⁵. During fiscal year 2025, BD repurchased approximately $1 billion ¹⁶ of its common stock, including an accelerated share repurchase agreement for 3.256 million ¹⁷ shares for total consideration of $750 million ¹⁸ and open market repurchases of 1.278 million ¹⁹ shares for total consideration of $250 million ²⁰. BD also paid cash dividends to common shareholders of $1.196 billion ²¹ during fiscal year 2025. In November 2025, the Company repurchased $250 million ²² of its common stock through open market repurchases.

Worldwide revenues in fiscal 2025 were $21.840 billion ²³, an increase of 8.2% ²⁴ from the prior-year period of $20.178 billion ²⁵. This increase reflected volume/other growth of 3.2% ²⁶, pricing impact of negative 0.3% ²⁷, foreign currency impact of 0.1% ²⁸, acquisition of Advanced Patient Monitoring contributing 4.8% ²⁹, and other items contributing 0.4% ³⁰. Net income from continuing operations was $1.678 billion ³¹ in fiscal 2025, compared to $1.705 billion ³² in fiscal 2024 and $1.530 billion ³³ in fiscal 2023. Diluted earnings per share from continuing operations were $5.82 ³⁴ in fiscal 2025, compared to $5.86 ³⁵ in fiscal 2024 and $5.10 ³⁶ in fiscal 2023. Cash flows from continuing operating activities were $3.430 billion ³⁷ in fiscal 2025. The gross profit margin was 45.4% ³⁸ in fiscal 2025, compared to 45.2% ³⁹ in fiscal 2024 and 42.2% ⁴⁰ in fiscal 2023.

A primary growth vector is the proposed combination of BD's Biosciences and Diagnostic Solutions business with Waters Corporation, structured as a Reverse Morris Trust transaction. BD's shareholders are expected to own approximately 39.2% ⁴¹ of the combined company, and existing Waters' shareholders are expected to own approximately 60.8% ⁴² of the combined company. BD expects to receive a cash distribution of approximately $4 billion ⁴³ prior to completion of the combination, subject to adjustment for cash, working capital, and indebtedness, and Waters is expected to assume approximately $4 billion ⁴⁴ of incremental debt. The transaction is expected to close around the end of the first quarter of calendar year 2026, subject to receipt of required regulatory approvals, Waters shareholder approval, compliance with applicable SEC requirements, the receipt of a private letter ruling from the IRS regarding certain matters germane to the U.S. federal income tax consequences of the transactions, and satisfaction of other customary closing conditions. The company expects the transaction to be generally tax-free for U.S. federal income tax purposes to BD and BD's shareholders.

Another growth vector is the continued focus on innovation and new product development, with the company investing in research and development that leads to and expands category leadership and results in a robust product pipeline. The company is accelerating innovation in smart devices, robotics, analytics, and artificial intelligence in order to enable new care settings, improve outcomes, streamline care workflows, and reduce costs within healthcare settings. The company also seeks to supplement internal growth through strategic acquisitions in faster growing market segments, as demonstrated by the acquisition of Edwards Lifesciences' Critical Care product group for $3.914 billion ⁴⁵, which expanded BD's portfolio of smart connected care solutions with leading monitoring technologies, advanced AI-enabled clinical decision tools and a robust innovation pipeline. Additionally, the company continues to pursue growth opportunities in emerging markets, which include Eastern Europe, the Middle East and Africa, Latin America, and certain countries within Greater Asia.

The company is focused on driving operating effectiveness and margin expansion through deployment of its BD Excellence program to increase factory productivity and asset efficiencies, reducing complexity by rationalizing its product portfolio and simplifying its architecture and operating model, and making strategic investments that prioritize a culture of quality. The gross profit margin improved to 45.4% ⁴⁶ in fiscal 2025 from 45.2% ⁴⁷ in fiscal 2024, with operating performance contributing 1.5% ⁴⁸ of improvement in 2025 primarily reflecting lower manufacturing costs from continuous improvement projects, supply chain optimization and other productivity initiatives, partially offset by higher labor costs and tariffs. The company expects tariffs to adversely impact its operating expense for fiscal year 2026 and potentially beyond, primarily relating to any products or components imported from countries across its global supply chain for which there are limited mitigation opportunities.

The company continues to invest in research and development, with spending of $1.265 billion ⁴⁹ in fiscal 2025, $1.190 billion ⁵⁰ in fiscal 2024, and $1.237 billion ⁵¹ in fiscal 2023. Capital expenditures were $760 million ⁵² in fiscal 2025, $725 million ⁵³ in fiscal 2024, and $874 million ⁵⁴ in fiscal 2023, primarily related to manufacturing capacity expansions. The company repurchased approximately $1 billion ⁵⁵ of its common stock during fiscal year 2025, and as of September 30, 2025, approximately 12 million ⁵⁶ shares remained unused under the authorized repurchase programs. The company paid cash dividends to common shareholders of $1.196 billion ⁵⁷ in fiscal 2025, $1.100 billion ⁵⁸ in fiscal 2024, and $1.114 billion ⁵⁹ in fiscal 2023. In November 2025, the Company repurchased $250 million ⁶⁰ of its common stock through open market repurchases.

The company faces structural headwinds from market dynamics in China, such as volume-based procurement programs and the government's focus to improve compliance of healthcare practitioners, which have unfavorably impacted revenues and may continue to impact results of operations in certain countries. Reductions or delays in governmental research funding have caused customers for certain instruments to delay or forgo purchases of these products, and the company has seen a reduction in government funding in fiscal year 2025. Lower demand for vaccines has also adversely impacted results of operations. The company also faces headwinds from tariffs, sanctions or other trade barriers imposed by the United States, or against the United States from countries in which it does business, which could adversely impact supply chain costs, results of operations and financial condition; based upon the latest published tariffs that are currently in effect, the company expects tariffs to adversely impact its operating expense for fiscal year 2026 and potentially beyond.

The company faces constraints from global macroeconomic factors including heightened inflation, capital market volatility including volatility resulting from the imposition of and changing policies around tariffs and related countermeasures, interest rate and currency rate fluctuations, and economic slowdown or recession. Currency exchange rates have been especially volatile in the recent past, and these currency fluctuations have affected and may continue to affect the reported value of assets and liabilities as well as cash flows. The company has also experienced and may continue to experience challenges in its global supply chain, including shortages in supply or disruptions in production and shipments of certain materials or components used in its products and related price increases. The company's international operations subject it to changing political, social, and geopolitical conditions, such as the continuation and/or escalation of the situation in Ukraine, the Middle East and Asia, including instability resulting from war, terrorism, insurrections and civil unrest, political conflict and changing economic conditions.

The company faces material risks from the proposed combination of its Biosciences and Diagnostic Solutions business with Waters, which may not be completed on the currently contemplated timeline or at all, and a failure to complete the transaction could adversely impact business, financial condition, results of operations and cash flows. The company is subject to extensive FDA regulation, including operating under an amended Consent Decree for its U.S. infusion pump business that authorizes the FDA to order cessation of manufacturing and distribution of infusion pumps, recall products, and order payment of damages of $15,000 per day per violation up to $15 million per year ⁶¹ for non-compliance. The company is also operating under two FDA Warning Letters for its Dispensing and Specimen Management businesses, with a liability recorded of $98 million ⁶² as of September 30, 2025 for estimated future costs associated with the Dispensing Warning Letter. The company faces significant product liability litigation, including approximately 6,905 ⁶³ hernia product claims, approximately 2,380 ⁶⁴ implantable port product claims, and approximately 405 ⁶⁵ ethylene oxide-related suits involving approximately 415 ⁶⁶ plaintiffs, with a jury awarding $20 million ⁶⁷ in compensatory damages and $50 million ⁶⁸ in punitive damages in the first ethylene oxide trial, though no judgment has been entered. The company's international operations subject it to risks from tariffs, with expectations that tariffs will adversely impact operating expense for fiscal year 2026 and potentially beyond, and from market dynamics in China including volume-based procurement programs that have unfavorably impacted revenues.

Management's message emphasizes a strategy anchored in three key pillars: grow, simplify and empower. The grow pillar focuses on accelerating innovation in smart devices, robotics, analytics, and artificial intelligence, focusing on a strong portfolio of core leading products, investing in research and development, leveraging global scale, supplementing internal growth through strategic acquisitions, and focusing on cash management and an efficient capital structure. The simplify pillar focuses on driving operating effectiveness and margin expansion through the BD Excellence program, reducing complexity, making strategic investments in quality, enhancing customer experiences through digitalization, collaborating across the supply chain, and continuing investments in an enterprise-wide renewable energy strategy. The empower pillar focuses on fostering a purpose-driven culture, cultivating an inclusive work environment, growing and enabling talent through training and development, and driving sustainability initiatives. Management states that BD remains focused on delivering durable growth, creating shareholder value and making appropriate investments for the future, and that the company's strategy is to increase revenue growth by continuing to focus on innovation and new product development.