Becton Dickinson & Co. (BDX) 10-K risk factor changes: FY2019 vs FY2018

[removed: A] [added: A] downturn in [removed: global] economic conditions could adversely affect our [removed: operations.][added: operations.]

Deterioration in the [removed: global] [added: domestic or international] economic environment, particularly in emerging markets and countries with government-sponsored healthcare systems, may cause decreased demand for our products and services and increased competition, which could result in lower sales volume and [removed: downward pressure on the] [added: lower] prices for our products, longer sales cycles, and slower adoption of new technologies.

[removed: We have previously experienced delays in collecting government receivables in certain countries in Western Europe due to] economic conditions, and we may experience similar delays in the future in these and other countries or regions experiencing financial problems.

[removed: The] [added: The] medical technology industry is very [removed: competitive.][added: competitive.]

These include large medical device companies with multiple product lines, some of which may have greater financial and marketing resources than we do, [removed: and] [added: as well as] firms that are more specialized than we are with respect to particular markets or product lines.

[removed: In addition, we face] [added: Our ability to compete is also impacted by] changing customer preferences and requirements, [removed: including] [added: such as] increased [removed: customer] demand for more environmentally-friendly [removed: products,] [added: products and for products incorporating digital capabilities,] as well as changes in the ways health care services are delivered (including the transition of more care [added: from acute] to non-acute [removed: settings).][added: settings and increased focus on chronic disease management).]

The development of new or improved products, processes or technologies by other companies (such as needle-free injection technology) that provide better features, [removed: pricing or] [added: pricing,] clinical outcomes or economic value may render our products or proposed products obsolete or less competitive.

The medical technology industry has also experienced a significant amount of consolidation, resulting in companies with greater [added: scale and] market [removed: presence.][added: presence than BD.]

[removed: Health] [added: In addition, health] care systems and other [removed: health care companies] [added: providers] are [removed: also] consolidating, resulting in greater purchasing power for these companies.

[added: Further consolidation in the industry] could intensify competition among medical device suppliers and exert additional pressure on the [added: demand for and] prices of our products.

[removed: We] [added: We] are subject to foreign currency exchange [removed: risk.][added: risk.]

A discussion of the financial impact of exchange rate fluctuations and the ways and extent to which we may attempt to address any impact is contained in Item [removed: 7., Management’s Discussion of Financial Condition and Results of Operations.][added: 7.]

[removed: Changes] [added: Changes] in reimbursement practices of third-party payers [added: or other cost containment measures] could affect the demand for our products and the prices at which they are [removed: sold.][added: sold.]

[removed: Our sales depend, in part, on the extent to which healthcare providers and facilities are reimbursed by] government [removed: authorities, private insurers and other third-party payers for the costs of our products] [added: authorities] (including Medicare, Medicaid and comparable foreign [removed: programs, as well as] [added: programs) and] private [removed: payors).][added: insurers for the costs of our products.]

Reimbursement rates can also affect the [added: market] acceptance rate of new technologies and products.

[removed: Legislative or administrative reforms] [added: Reforms] to reimbursement systems in the United States or abroad, changes in coverage or reimbursement rates by private payers, or adverse decisions relating to our products by administrators of these systems could significantly reduce reimbursement for procedures using our products or result in denial of reimbursement for those products, which would adversely affect customer demand or the price customers are willing to pay for such products.

[removed: The] [added: The] reinstatement of the PPACA's medical device tax may adversely affect our results of [removed: operations.][added: operations.]

[removed: Cost] [added: Cost] volatility could adversely affect our [removed: operations.][added: operations.]

Our results of operations could be negatively impacted by volatility in the cost of raw materials, components, freight and energy [removed: that] [added: that, in turn,] increases the costs of producing and distributing our products.

New laws or regulations adopted in response to climate change could also increase energy [removed: costs] [added: and transportation costs,] as well as the costs of certain raw materials and components.

We may not be able to offset any increases in [removed: these] [added: our] operational costs.

[removed: Breaches] [added: Breaches] of our information technology systems could have a material adverse effect on our [removed: operations.][added: operations.]

Cyber-attacks could result in our intellectual property and other confidential information being accessed or [removed: stolen.][added: stolen, which could adversely affect our competitive position in the market.]

Likewise, we could suffer disruption of our operations and other significant negative consequences, including increased costs for security measures or remediation, diversion of management attention, [added: litigation] and [removed: adverse impact on] [added: damage to] our relationships with vendors, business partners and customers.

Cyber-attacks could result in unauthorized access to our systems and products which could also [added: impact our compliance with privacy and other laws and regulations, and] result in actions by regulatory bodies or civil litigation.

[removed: While we will continue to dedicate significant resources to] protect against unauthorized access to our systems and [added: products, and] work with government authorities [added: and third party providers] to detect and reduce the risk of future cyber incidents, cyber-attacks are becoming more sophisticated, frequent and adaptive.

There can be no assurances that [removed: our] [added: these] protective measures will prevent future attacks that could have a material adverse impact on our business.

[removed: Our] [added: Our] future growth is dependent in part upon the development of new products, and there can be no assurance that such products will be [removed: developed.][added: developed.]

[removed: We] [added: We] cannot guarantee that any of our strategic acquisitions, investments or alliances will be [removed: successful.][added: successful.]

[removed: The] [added: Our] international operations [removed: of our business may] subject us to certain business [removed: risks.][added: risks.]

Our foreign operations subject us to certain [removed: risks, including,] [added: risks relating to,] among [removed: others, the effects of] [added: other things,] fluctuations in foreign currency exchange (discussed above), [removed: the effects of] local economic and political conditions, competition from local companies, [added: increases in] trade [removed: protectionism and restrictions on the transfer of capital across borders,] [added: protectionism,] U.S. relations with the governments of the foreign countries in which we operate, foreign regulatory requirements or changes in such requirements, [added: changes in] local [added: health care payment systems and health care delivery systems, local] product preferences and [removed: product] requirements, longer payment terms for account receivables than we experience in the U.S., difficulty in establishing, staffing and managing foreign operations, changes to international trade agreements and treaties, changes in tax laws, weakening or loss of the protection of intellectual property rights in some countries, and import or export licensing requirements.

While we have implemented policies and procedures to enhance compliance with these laws, our international operations, which often involve customer relationships with foreign [added: governments, create the risk that there may be unauthorized payments or offers of payments made by employees, consultants, sales agents or distributors.]

Any alleged or actual violations of these laws may subject us to government [removed: investigations,] [added: investigations and] significant criminal or civil sanctions and other liabilities, and negatively affect our reputation.

[removed: In 2018, the] [added: The] U.S. [added: has] imposed tariffs on steel and aluminum as well as on goods imported from China and certain other countries, which has resulted in retaliatory tariffs by China and other countries.

Additional tariffs imposed by the U.S. on a broader range of imports, or further retaliatory trade measures taken by China or other countries in response, could result in an increase in supply chain costs that we may not be able to offset or [added: that] otherwise adversely impact our results of operations.

The June 2016 referendum [removed: result] in the United Kingdom (“UK”) to exit the European Union (“EU”) (commonly known as [removed: “Brexit”), and the subsequent commencement of the official withdrawal process by the UK government in March 2017,] [added: “Brexit”)] has created uncertainties affecting business operations in the UK and the [removed: EU.][added: EU, and possibly other countries, including with respect to compliance with the regulatory regimes regarding the labeling and registration of the products we sell in these markets.]

[removed: Reductions] [added: Reductions] in customers’ research budgets or government funding may adversely affect our [removed: business.][added: business.]

[removed: A] [added: A] reduction or interruption in the supply of certain raw materials and components [removed: would] [added: could] adversely affect our [removed: manufacturing operations and related product sales.][added: operating results.]

[removed: Interruption of our manufacturing operations] [added: Natural disasters, war and other events] could adversely affect our future revenues and operating [removed: income.][added: income.]

[removed: Damage] [added: Interruption] to [removed: one or more of these facilities] [added: our manufacturing operations resulting] from weather or natural disasters, [added: regulatory requirements] or issues in our manufacturing process, equipment failure or other factors, could adversely affect our ability to manufacture [removed: these products, resulting in lost revenues and damage to] our [removed: relationships with customers.][added: products.]

We may also be adversely impacted by other risks not presently known to us or that we currently consider immaterial.

We have previously experienced delays in collecting government receivables in certain countries in Western Europe due to

Cost containment efforts by governments and the private sector are also resulting in increased emphasis on products that reduce costs, improve clinical results and expand patient access.

Our ability to remain competitive will depend on how well we meet these changing market demands in terms of our product offerings and marketing approaches.

Lower cost producers have also created pricing pressure, particularly in developing markets.

Traditional distributors are also manufacturers of medical devices, providing another source of competition.

Management’s Discussion of Financial Condition and Results of Operations.

Our sales depend, in part, on the extent to which healthcare providers and facilities are reimbursed by

Initiatives to limit the growth of healthcare costs in the U.S. and other countries where we do business may also put pressure on medical device pricing.

In the U.S., these include, among others, value-based purchasing and managed care arrangements.

Governments in China and other countries are also using various mechanisms to control healthcare expenditures, including increased use of competitive bidding and tenders, and price regulation.

While we will continue to dedicate significant resources to

These and other factors may adversely impact our ability to pursue our growth strategy in these markets.

The possibility that the U.K. may exit the EU without a formal withdrawal agreement in place has increased the uncertainty around Brexit.

While we have taken proactive steps to mitigate any disruption to our operations, we could face increased regulatory costs, volatility in exchange rates, market instability and other risks, depending on the final terms of the U.K.’s exit from the EU.

Interruption of our manufacturing or sterilization operations could adversely affect our business.

In some instances, we may not be able to transition manufacturing to other BD sites or a third party to replace the lost production.

A significant interruption of our manufacturing operations could result in lost revenues and damage to our relationships with customers.

In addition, many of our products require sterilization prior to sale, and we utilize both BD facilities and third-parties for this process.

In some instances, only a few facilities are qualified under applicable regulations to conduct this sterilization.

To the extent we or third-parties are unable to sterilize our products, whether due to

lack of capacity, regulatory requirements or otherwise, we may be unable to transition sterilization to other sites or modalities in a timely or cost effective manner, or at all, which could have an adverse impact on our operating results.

Governmental

In March 2019, the FDA issued a letter to healthcare professionals regarding the use of paclitaxel-coated devices in the treatment of peripheral artery disease, advising clinicians to consider using alternative treatments.

The FDA letter resulted in decreased sales of BD’s drug-coated balloons in fiscal year 2019 compared to the prior year.

The extent and duration of the impact from the FDA letter beyond fiscal year 2019, and the likelihood of FDA approval of new drug-coated devices, is difficult to predict, and no assurance can be given that it will not have a material impact on our results of operations in future periods.

We may not realize all of the anticipated benefits and cost savings resulting from our acquisition of Bard.

While we have realized significant cost savings to date in connection with our acquisition of Bard, achieving additional cost synergies may prove more difficult than expected, and it is possible that the anticipated cost synergies of the merger may not be realized fully, or may take longer to realize than expected.

If we do not achieve the expected benefits

Risks Relating to BD

The entry into the market of manufacturers located in China and other low-cost manufacturing locations has also created pricing pressure, particularly in developing markets.

Further consolidation in the industry

governments, create the risk that there may be unauthorized payments or offers of payments made by employees, consultants, sales agents or distributors.

Until the terms of the UK’s exit from the EU in March 2019 are determined, including any transition period, it is difficult to predict its impact.

It is possible that the withdrawal could, among other things, affect the legal and regulatory environments to which our businesses are subject, impact trade between the UK and the EU and other parties and create economic and political uncertainty in the region.

Once clearance or approval has been obtained for a product, there is an obligation to ensure that all applicable FDA and other regulatory requirements continue to be met.

products and result in fines, delays or suspensions of regulatory clearances, closure of manufacturing sites, seizures or recalls of products and damage to our reputation.

Natural disasters, war and other events could adversely affect our future revenues and operating income.

Risks Relating To Our Acquisition of Bard

The integration of the Bard business may be more difficult, costly or time consuming than expected and the anticipated benefits and cost savings of the Bard acquisition may not be realized.

The success of the Bard acquisition, including anticipated benefits and cost savings, will depend, in part, on our ability to successfully combine and integrate our legacy business with the business of Bard.

The integration of Bard’s business with our existing business is a complex, costly and time-consuming process.

It is possible that a number of factors, including, without limitation, the loss of key employees, higher than expected costs, diversion of management attention and resources, the disruption of ongoing businesses or inconsistencies in standards, controls, procedures and policies, could adversely affect our ability to maintain relationships with customers, vendors and employees or to achieve the anticipated benefits and cost savings of the acquisition.

If we experience difficulties with the integration process, the anticipated benefits of the Bard acquisition may not be realized fully or at all, or may take longer to realize than expected.

These integration matters could have an adverse effect on us for an undetermined period following the acquisition.

In addition, the actual cost savings of the Bard acquisition could be less than anticipated.

The future results of the combined company may be adversely impacted if we do not effectively manage our expanded operations.

Following the completion of the Bard acquisition, the size of our business has increased significantly.

Our ability to successfully manage this expanded business will depend, in part, upon management’s ability to design and implement strategic initiatives that address not only the integration of the two companies, but also the increased scale and scope of the combined business with its associated increased costs and complexity.

There can be no assurances that we will be successful or that we will realize the expected operating efficiencies, cost savings and other benefits currently anticipated from the Bard acquisition.

We will incur substantial expenses related to the integration of Bard.

We incurred, and expect to continue to incur, a number of non-recurring costs associated with the Bard integration related to formulating and implementing integration plans, including facilities and systems consolidation costs and employment-related costs.

We continue to assess the magnitude of these costs, and additional unanticipated costs may be incurred in the Bard integration.

Although we expect that the elimination of duplicative costs, as well as the realization of other efficiencies related to the integration of the businesses, should allow us to offset integration-related costs over time, this net benefit may not be achieved in the near term, or at all.

agreements containing cross-default provisions.

The mandatory convertible preferred stock underlying the depositary shares issued in connection with the financing of the Bard transaction may adversely affect the market price of BD common stock.

The market price of BD common stock is likely to be influenced by the mandatory convertible preferred stock underlying the depositary shares issued in connection with the financing for the Bard transaction.

The market price of BD common stock could become more volatile and could be depressed by:

| | |

| --- | --- |

| • | investors’ anticipation of the potential resale in the market of a substantial number of additional shares of BD common stock received upon conversion of the mandatory convertible preferred stock; |

| • | possible sales of BD common stock by investors who view the mandatory convertible preferred stock as a more attractive means of equity participation in BD than owning shares of BD common stock; and |

| • | hedging or arbitrage trading activity that may develop involving the mandatory convertible preferred stock and BD common stock. |

The following commentary should be read in conjunction with the consolidated financial statements and accompanying [removed: notes.][added: notes presented in this report.]

[removed: Company Overview][added: Company Overview]

[removed: Description] [added: Description] of the Company and Business [removed: Segments][added: Segments]

The Company's organizational structure is based upon three principal business segments, BD Medical (“Medical”), BD Life Sciences (“Life Sciences”) and BD Interventional [removed: (“Interventional”), as further discussed below.][added: (“Interventional”).]

We organize our operations outside the United States as follows: Europe; EMA (which includes the Commonwealth of Independent States, the Middle East and Africa); Greater Asia (which includes [removed: Japan and] [added: countries in East Asia, South Asia, Southeast] Asia [removed: Pacific);] [added: and the Oceania region);] Latin America (which includes Mexico, Central America, the Caribbean, and South America); and Canada.

We continue to pursue growth opportunities in emerging markets, which include the following geographic regions: Eastern Europe, the Middle East, Africa, Latin America and certain countries within [removed: Asia Pacific.][added: Greater Asia.]

[removed: Strategic Objectives][added: Strategic Objectives]

In assessing the outcomes of these strategies as well as BD’s financial condition and operating performance, management generally reviews quarterly forecast data, monthly actual results, segment sales and [removed: other similar information.]

We also consider trends related to certain key financial data, including gross profit [added: margin, selling and administrative expense, investment in research and development, return on invested capital, and cash flows.]

For further [removed: discussions] [added: disclosures] regarding the [removed: reporting of Bard products within BD's segments] [added: costs relating to acquisitions] and [removed: the Bard acquisition,] [added: other restructurings,] refer to Notes [removed: 6] [added: 10, 11] and [removed: 9, respectively,] [added: 12] to the consolidated financial statements contained in Item 8.

Additional disclosures regarding our accounting for [removed: the Act] [added: income taxes] are provided in Note [removed: 16] [added: 17] to the consolidated financial statements contained in Item 8.

[removed: Summary] [added: Summary] of Financial [removed: Results][added: Results]

Worldwide revenues in [removed: 2018] [added: 2019] of [removed: $15.983] [added: $17.290] billion increased [removed: 32.2%] [added: 8.2%] from the prior-year period.

Revenue growth in [removed: 2018 also] [added: 2019 additionally] reflected volume growth of [removed: over 5.5%, a favorable] [added: approximately 5.4%, an unfavorable] impact from foreign currency translation of approximately 2.3% and an unfavorable impact of price of approximately 0.3%.

| • | Medical segment [removed: volume] growth [removed: in 2018] was driven by sales growth in all of the segment's units, particularly by growth in the Medication [added: Management Solutions, Medication] Delivery Solutions and [removed: Medication Management Solutions] [added: Pharmaceutical Systems] units. |

[removed: | • |] [added: The] Life Sciences [removed: segment volume growth in] [added: segment's] 2018 [added: revenues] was driven by [removed: sales] growth [removed: in] [added: across] all three of its organizational [removed: units, particularly in its Diagnostic Systems unit. |][added: units.]

Our financial position remains strong, with cash flows from operating activities totaling [removed: $2.865] [added: $3.330] billion in [removed: 2018.][added: 2019.]

At September 30, [removed: 2018,] [added: 2019,] we had [removed: $1.3 billion] [added: $620 million] in cash and equivalents and short-term investments, including restricted cash.

A [removed: weaker] [added: stronger] U.S. dollar in [removed: 2018,] [added: 2019,] compared with [removed: 2017,] [added: 2018,] resulted in [removed: a favorable] [added: an unfavorable] foreign currency translation impact to our [removed: revenue] [added: revenues] and earnings during [removed: 2018.][added: 2019.]

[added: As] exchange rates are an important factor in understanding period-to-period comparisons, we believe the presentation of results on a foreign currency-neutral basis in addition to reported results helps improve investors’ ability to understand our operating results and evaluate our performance in comparison to prior periods.

[removed: Results on a foreign currency-neutral basis, as we present them, may not be comparable to similarly titled] measures used by other companies and are not measures of performance presented in accordance with U.S. GAAP.

[removed: Results] [added: Results] of [removed: Operations][added: Operations]

[removed: Medical Segment][added: Medical Segment]

| | | | | | | | | | | | | | [removed: 2018] [added: 2019] vs. [removed: 2017] [added: 2018] | | | | | | | | | [removed: 2017] [added: 2018] vs. [removed: 2016] [added: 2017] | | | | | | | |

| [removed: (Millions] [added: (Millions] of [removed: dollars)] [added: dollars)] | [removed: 2018] [added: 2019] | | | | [removed: 2017] [added: 2018] | | | | [removed: 2016] [added: 2017] | | | | [removed: Total Change] [added: Total Change] | | | [removed: Estimated FX Impact] [added: Estimated FX Impact] | | | [removed: FXN Change] [added: FXN Change] | | | [removed: Total Change] [added: Total Change] | | | [removed: Estimated FX Impact] [added: Estimated FX Impact] | | | [removed: FXN Change] [added: FXN Change] | |

| Medication Delivery Solutions [removed: (a)] | $ | [removed: 3,644] [added: 3,859] | | | $ | [removed: 2,812] [added: 3,644] | | | $ | [removed: 2,724] [added: 2,812] | | | [removed: 29.6] [added: 5.9] | % | | [removed: 1.9] [added: (2.7] | [removed: %] [added: )%] | | [removed: 27.7] [added: 8.6] | % | | [removed: 3.2] [added: 29.6] | % | | [removed: (0.8] [added: 1.9] | [removed: )%] [added: %] | | [removed: 4.0] [added: 27.7] | % |

| Medication Management Solutions | [removed: 2,470] [added: 2,629] | | | | [removed: 2,295] [added: 2,470] | | | | [removed: 2,197] [added: 2,295] | | | | [removed: 7.7] [added: 6.4] | % | | [removed: 1.1] [added: (1.1] | [removed: %] [added: )%] | | [removed: 6.6] [added: 7.5] | % | | [removed: 4.4] [added: 7.7] | % | | [removed: (0.5] [added: 1.1] | [removed: )%] [added: %] | | [removed: 4.9] [added: 6.6] | % |

| Diabetes Care | [removed: 1,105] [added: 1,110] | | | | [removed: 1,056] [added: 1,105] | | | | [removed: 1,023] [added: 1,056] | | | | [removed: 4.6] [added: 0.5] | % | | [removed: 1.7] [added: (2.4] | [removed: %] [added: )%] | | 2.9 | % | | [removed: 3.3] [added: 4.6] | % | | [removed: (0.3] [added: 1.7] | [removed: )%] [added: %] | | [removed: 3.6] [added: 2.9] | % |

| Pharmaceutical Systems | [removed: 1,397] [added: 1,465] | | | | [removed: 1,256] [added: 1,397] | | | | [removed: 1,199] [added: 1,256] | | | | [removed: 11.2] [added: 4.8] | % | | [removed: 4.8] [added: (3.4] | [removed: %] [added: )%] | | [removed: 6.4] [added: 8.2] | % | | [removed: 4.8] [added: 11.2] | % | | [removed: (0.5] [added: 4.8] | [removed: )%] [added: %] | | [removed: 5.3] [added: 6.4] | % |

| Total Medical revenues | $ | [removed: 8,616] [added: 9,064] | | | $ | [removed: 7,419] [added: 8,616] | | | $ | [removed: 7,965] [added: 7,419] | | | [removed: 16.1] [added: 5.2] | % | | [removed: 2.1] [added: (2.3] | [removed: %] [added: )%] | | [removed: 14.0] [added: 7.5] | % | | [removed: (6.8] [added: 16.1] | [removed: )%] [added: %] | | [removed: (0.5] [added: 2.1] | [removed: )%] [added: %] | | [removed: (6.3] [added: 14.0] | [removed: )%] [added: %] |

Medical segment [added: revenue] growth in 2018 was favorably impacted by the inclusion of revenues associated with certain Bard products within the Medication Delivery Solutions unit, beginning on January 1, [removed: 2018.][added: 2018, as noted above.]

[removed: Medical segment] [added: The Pharmaceutical Systems unit's 2019] revenue growth [removed: in 2017] was driven by [removed: the Medication Delivery Solutions unit's] sales of [removed: infusion disposables products, particularly in international markets,] [added: prefillable products] and [removed: the Pharmaceutical Systems unit’s sales of] self-injection systems.

| [removed: (Millions] [added: (Millions] of [removed: dollars)] [added: dollars)] | [removed: 2018] [added: 2019] | | | | [removed: 2017] [added: 2018] | | | | [removed: 2016] [added: 2017] | | |

| Medical segment operating income (a) [removed: (b)] | $ | [removed: 2,624] [added: 2,824] | | | $ | [removed: 1,907] [added: 2,624] | | | $ | [removed: 1,807] [added: 1,907] | |

| [removed: Segment] [added: *Segment] operating income as % of Medical [removed: revenues] [added: revenues*] | [removed: 30.5] [added: *31.2*] | | [removed: %] [added: *%*] | | [removed: 25.7] [added: *30.5*] | | [removed: %] [added: *%*] | | [removed: 22.7] [added: *25.7*] | | [removed: %] [added: *%*] |

| (a) | Operating income in [added: 2019 and] 2018 excluded certain general and administrative costs, which were allocated to the segment in [removed: 2017 and 2016,] [added: 2017,] due to a change in our management reporting approach, as is further discussed in Note [removed: 6] [added: 7] to the consolidated financial statements contained in Item 8. Financial Statements and Supplementary Data. |

The [removed: Medical] [added: Interventional] segment's operating income was driven by its performance with respect to gross profit margin and operating expenses [added: in 2019] as discussed in greater detail below:

[removed: -] The Medical segment's gross profit margin in 2018 was lower as compared with 2017 primarily due to the expense related to amortization of intangible assets acquired in the Bard transaction [removed: and the expense related to] [added: as well as] the [removed: recognition] [added: impact] of [removed: a] [added: the] fair value step-up adjustment [removed: relating to Bard's inventory on the acquisition date.][added: and write-down charges noted above.]

The Medical segment's gross profit margin in 2018 was also unfavorably impacted by [removed: charges to write down the value of fixed assets, primarily in the Diabetes Care unit,] higher raw material costs and pricing pressures.

[removed: -] Selling and administrative expense as a percentage of revenues in 2018 was lower compared with 2017 which primarily reflected a reduction in the general and administrative costs allocated to the segment, as noted above.

| • | Enhancing disease management with our product offerings. |

other similar information.

The increase reflected a favorable impact of approximately 6% resulting from the inclusion of revenues from our acquisition of Bard in the first quarter of fiscal year 2019 but not in the first quarter of the prior-year period as operating activities of the business, which was acquired on December 29, 2017, were not included in our consolidated results of operations until January 1, 2018.

Revenues in 2019 also reflected an unfavorable impact of almost 1% attributable to the Biosciences unit's divestiture of its Advanced Bioprocessing business at the end of October 2018, as is further discussed in Note 11 to the consolidated financial statements contained in Item 8.

Volume growth in 2019 was as follows:

| • | Life Sciences segment growth reflected growth in all of the segment's units, particularly in the Biosciences unit. |

| • | Interventional segment growth reflected sales growth in all units, particularly in the Surgery unit and the Urology and Critical Care unit. |

During fiscal year 2019, we paid cash dividends of $984 million, including $832 million paid to common shareholders and $152 million paid to preferred shareholders.

Results on a foreign currency-neutral basis, as we present them, may not be comparable to similarly titled

The Medical segment's revenues in 2019 were favorably impacted by the inclusion of revenues associated with certain Bard products within the Medication Delivery Solutions unit in the first quarter of fiscal year 2019, as noted above, and also reflected strong growth in this unit's global sales of vascular access devices.

The Medication Management Solutions unit's revenues in 2019 reflected sales growth attributable to the installations of infusion and dispensing systems, as well as growth in sales of disposables.

Strength in the Diabetes Care unit's sales of pen needles in emerging markets was partially offset by lower growth in U.S. sales.

- The Medical segment's gross profit margin in 2019 was higher as compared with 2018 primarily due to lower manufacturing costs resulting from continuous improvement projects which enhanced the efficiency of our operations.

Additionally, the comparison of gross profit margin in 2019 with gross profit margin in 2018 reflected the unfavorable impacts in 2018 of a fair value step-up adjustment relating to Bard's inventory on the acquisition date and charges to write down the value of fixed assets, primarily in the Diabetes Care unit.

These favorable impacts to the Medical segment's gross margin in 2019 were partially offset by unfavorable foreign currency translation, higher raw material costs and pricing pressures.

- Research and development expense as a percentage of revenues was lower in 2019 due to recent completion of projects and the timing of project spending.

The Diagnostic Systems unit's 2019 revenues reflected growth in its *BD MAX*TM molecular platform as well as growth in sales of core microbiology products.

This sales growth in the Diagnostic Systems unit was partially offset by an unfavorable comparison of the unit's U.S. revenues in 2019 to revenues in 2018, as the prior-year period benefited from a more severe influenza season.

Revenues in the Biosciences unit in 2019 reflected growth in research reagent sales, as well as growth in U.S. research instrument sales, but were unfavorably impacted by the divestiture of the Advanced Bioprocessing business, as previously discussed.

The Biosciences unit's results for 2018 and 2017 included revenues associated with the Advanced Bioprocessing business of $106 million and $103 million, respectively.

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| | | | | | | | | | | | | | | | | | | | | | | |

| (Millions of dollars) | 2019 | | | | 2018 | | | | 2017 | | | | Total Change | | | Estimated FX Impact | | | FXN Change | | | Total Change |

| Surgery (a) | $ | 1,397 | | | $ | 1,192 | | | $ | 666 | | | 17.3 | % | | (1.1 | )% | | 18.4 | % | | NM |

| (a) | Amounts presented in 2017 are associated with certain product offerings that were moved from the Medical segment to the Interventional segment in order to align with the reportable segment structure that became effective beginning in the second quarter of fiscal year 2018. |

The Interventional segment's revenues in 2019 were favorably impacted by the inclusion of revenues associated with Bard's products in the segment's results for the first quarter of fiscal year 2019, as noted above.

Interventional segment revenues in 2019 also reflected growth in the Urology and Critical Care unit's sales of acute urology products and sales by the unit's home care and targeted temperature management businesses.

Fiscal year 2019 revenues in the Surgery unit reflected growth in sales of the unit's biosurgery and infection prevention products.

The Peripheral Intervention unit's 2019 revenues reflected growth in emerging market sales.

This growth was partially offset by an unfavorable impact related to a letter issued in March 2019 by the FDA to healthcare professionals regarding the use of paclitaxel-coated devices in the treatment of peripheral artery disease, which impacted sales of our drug-coated balloon products.

The extent and duration of the impact from the FDA letter on the Peripheral Intervention unit’s future revenues is difficult to predict.

| (a) | The amount presented in 2017 is associated with certain product offerings that were moved from the Medical segment to the Interventional segment in order to align with the reportable segment structure that became effective beginning in the second quarter of fiscal year 2018. |

| • | Gross profit margin was higher in 2019 as compared with 2018 primarily due to the unfavorable prior-year impact of recognizing a fair value step-up adjustment relating to Bard's inventory on the acquisition date and lower manufacturing costs resulting from continuous improvement projects, which enhanced the efficiency of our operations, and synergy initiatives. These favorable impacts to the Interventional segment's gross margin were partially offset by unfavorable product mix and unfavorable foreign currency translation. |

| • | Selling and administrative expense as a percentage of revenues in 2019 was relatively flat compared with 2018. |

| • | Research and development expense as a percentage of revenues was higher in 2019 as compared with 2018 primarily due to the Surgery unit's recognition of a write-down in the current-year period, as further discussed below. |

| | | | | | | | | | | | | | 2019 vs. 2018 | | | | | | | | | 2018 vs. 2017 | | | | | | | |

| (Millions of dollars) | 2019 | | | | 2018 | | | | 2017 | | | | Total Change | | | Estimated FX Impact | | | FXN Change | | | Total Change | | | Estimated FX Impact | | | FXN Change | |

U.S. revenues in 2019 reflected growth in all three segments.

U.S. revenues in 2019 were favorably impacted by the inclusion of revenues associated with Bard's products in results for the first quarter of fiscal year 2019, as noted above.

| | |

| --- | --- |

| • | Enhancing disease management in diabetes, women’s health and cancer, infectious disease and other targeted conditions. |

margin, selling and administrative expense, investment in research and development, return on invested capital, and cash flows.

Acquisition of C.R. Bard, Inc.

On December 29, 2017, BD completed its acquisition of C. R. Bard, Inc. ("Bard") for total consideration transferred, including cash and stock, of approximately $25 billion.

The combination created a medical technology company that is uniquely positioned to improve both the treatment of disease for patients and the process of care for health care providers.

The operating activities of the acquired businesses were included in our consolidated results of operations beginning on January 1, 2018.

BD reports the results associated with the majority of Bard's product offerings within the Interventional segment.

Bard's remaining product offerings are reported under the Medical segment.

Financial Statements and Supplementary Data.

Impact of Tax Reform Act

On December 22, 2017, new U.S. tax legislation commonly referred to as the Tax Cuts and Jobs Act (the "Act") was enacted.

The new tax legislation, which became effective January 1, 2018, reduces the U.S. federal corporate tax rate from 35% to 21%, requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred, and creates new taxes on certain foreign-sourced earnings.

Based upon our determinations regarding the tax effects of the Act, we recognized additional tax expense in 2018 of $640 million, which is reflected in our consolidated statement of income within Income tax provision (benefit).

The increase reflected an impact of almost 24.5% resulting from the acquisition of Bard.

Volume growth in 2018 attributable to the Medical and Life Sciences segments was as follows:

During fiscal year 2018, we paid cash dividends of $927 million.

As

| Respiratory Solutions | — | | | | — | | | | 822 | | | | NM | | | NM | | | NM | | | NM | | | NM | | | NM | |

"NM" denotes that the percentage is not meaningful.

| (a) | The presentation of prior-period amounts reflects a reclassification of $685 million and $689 million in 2017 and 2016, respectively, of certain product revenues from the Medical segment to the Interventional segment as further discussed in discussed in Note 6 to the consolidated financial statements contained in Item 8. Financial Statements and Supplementary Data. |

Revenue growth in 2017 also reflected the Diabetes Care unit's increased sales of pen needles in the United States and emerging markets.

International growth in the Diabetes Care unit was impacted by weaker revenues in Europe, primarily in the United Kingdom, due to increasing pressure from government

payers as part of austerity measures.

Medical segment revenues in 2017 were unfavorably impacted by the divestiture of the Respiratory Solutions business and the modification to dispensing equipment lease contracts in the Medication Management Solutions unit, as discussed above.

In 2017, revenues in the Medication Management Solutions unit included $151 million of revenues relating to amended preexisting lease contracts.

| | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| (b) | The presentation of prior-period amounts reflects reclassifications of $248 million and $245 million in 2017 and 2016, respectively, relating to the movement of certain product offerings from the Medical segment to the Interventional segment as noted above. |

The Medical segment's gross profit margin in 2017 was higher as compared with 2016 primarily due to the divestiture of the Respiratory Solutions business, which had products with relatively lower gross profit margins.

Gross profit margin in 2017 also reflected lower manufacturing costs resulting from continuous improvement projects.

Selling and administrative expense as a percentage of revenues in 2017 was lower compared with 2016, primarily due to the divestiture of the Respiratory Solutions business, as this business generally had a lower operating margin.

Research and development expense as a percentage of revenues in 2017 reflected ongoing investment in new products and platforms, but was lower compared with 2016 as expense in 2016 included a one-time payment relating to one of the segment's ongoing projects.

The Life Sciences segment's revenue growth in 2018 was driven by growth across all three of its organizational units.

The segment’s 2017 revenue growth was also driven by increased Biosciences unit sales, particularly in developed markets.

| Surgery (a) | $ | 1,192 | | | $ | 666 | | | $ | 670 | | | NM | | NM |

| (a) | The presentation of prior-period amounts reflects reclassifications of $685 million and $689 million in 2017 and 2016, respectively, of certain product revenues from the Medical segment to the Interventional segment as noted above. |

| (a) | The presentation of prior-period amounts reflects reclassifications of $248 million and $245 million in 2017 and 2016, respectively, relating to the movement of certain product offerings from the Medical segment to the Interventional segment as noted above. |

U.S. revenues in 2017 were unfavorably impacted by the Medical segment's divestiture of the Respiratory Solutions business and the modification to dispensing equipment lease contracts with customers in the Medical segment's Medication Management Solutions unit, as previously discussed.

Management’s Discussion and Analysis of Financial Condition and Results of Operations, and in Notes 1, [removed: 13 and] 14 [added: and 15] to the consolidated financial statements contained in Item [removed: 8, Financial Statements and Supplementary Data, and is incorporated herein by reference.][added: 8.]

Financial Statements and Supplementary Data, and is incorporated herein by reference.

[removed: General][added: General]

Becton, Dickinson and Company (also [removed: known] [added: referred to herein] as “BD”) was incorporated under the laws of the State of New Jersey in November 1906, as successor to a New York business started in 1897.

[removed: Business Segments][added: Business Segments]

Information with respect to BD’s business segments and the Bard acquisition is included in Note [removed: 6] [added: 7] and Note [removed: 9,] [added: 10,] respectively, to the consolidated financial statements contained in Item [removed: 8, Financial Statements and Supplementary Data, and is incorporated herein by reference.][added: 8.]

[removed: BD Medical][added: BD Medical]

| [removed: Organizational Unit] [added: *Organizational Unit*] | [removed: Principal] [added: *Principal] Product [removed: Lines] [added: Lines*] |

| Medication Delivery Solutions | Peripheral [removed: IV] [added: intravenous ("IV")] catheters (conventional, safety); advanced peripheral catheters (guidewire assisted peripherally inserted venous catheters, midline catheters, port access); central lines (peripherally inserted central catheters); acute dialysis catheters; vascular access technology (ultrasonic imaging); vascular care (lock solutions, prefilled flush syringes, disinfecting caps); vascular preparation (skin antiseptics, dressings, securement); needle-free IV connectors and extensions sets; [removed: IV fluids;] closed-system drug transfer devices; hazardous drug detection; conventional and safety hypodermic syringes and needles, anesthesia needles (spinal, epidural) and trays; enteral syringes, sharps disposal systems. |

| Medication Management Solutions | [removed: Intravenous] [added: IV] medication safety and infusion therapy delivery systems, including infusion [removed: pumps and] [added: pumps,] dedicated [removed: disposables;] [added: disposables, and IV fluids;] medication compounding workflow systems; automated medication dispensing; automated supply management systems; medication inventory optimization and tracking systems; and [added: informatics and] analytics [removed: related to all the above products.] [added: solutions for enterprise medication management.] |

| Pharmaceutical Systems | Prefillable drug delivery systems - prefillable syringes, safety, shielding and self-injection systems [added: and support services] - provided to pharmaceutical companies for use as containers for injectable pharmaceutical products, which are then placed on the market as drug/device combinations. |

[removed: BD] [added: BD] Life [removed: Sciences][added: Sciences]

The primary customers served by BD Life Sciences are hospitals, laboratories and clinics; blood banks; healthcare workers; public health agencies; physicians’ office practices; [added: retail pharmacies;] academic and government institutions; and pharmaceutical and biotechnology companies.

| Diagnostic Systems | Automated blood culturing and tuberculosis culturing systems; molecular testing systems for infectious diseases and women’s health; microorganism identification and drug susceptibility systems; liquid-based cytology systems for cervical cancer screening; rapid diagnostic [removed: assays;] [added: assays for testing of respiratory infections;] microbiology laboratory automation; and plated [removed: media.] [added: media for clinical and industrial applications.] |

| Biosciences | Fluorescence-activated cell sorters and analyzers; [removed: monoclonal] antibodies and kits for performing cell analysis; reagent systems for life science research; [removed: bench-side] solutions for high-throughput [removed: targeted] single-cell gene expression [removed: and RNA-Seq] analysis; [removed: molecular indexing] and [removed: next-generation sequencing sample preparation for genomics research; and] clinical oncology, immunological (HIV) and transplantation diagnostic/monitoring reagents and analyzers. |

[removed: BD Interventional][added: BD Interventional]

The primary customers served by BD Interventional are hospitals, individual healthcare professionals, extended care facilities, alternate site [removed: facilities] [added: facilities,] and [removed: directly to] patients via our Homecare business.

| Surgery | Hernia and soft tissue repair, biological grafts, bioresorbable grafts, biosurgery, and other surgical products; BD ChloraPrep™ surgical infection prevention products, [removed: thoracic] and [removed: abdominal drainage products and] V. Mueller™ surgical and laparoscopic instrumentation [removed: products, which are products previously included within the former Medication and Procedural Solutions unit of BD Medical.] [added: products.] |

| Urology and Critical Care | [removed: Urological] [added: Urine management devices, urological] drainage products, intermittent catheters, [removed: urinary and fecal management devices,] kidney stone management devices, [removed: and] Targeted Temperature [removed: Management.] [added: Management, and fecal management devices.] |

[removed: Acquisitions][added: Acquisitions]

[removed: TVA] [added: *TVA] Medical, [removed: Inc.][added: Inc.*]

[removed: C.] [added: *C.] R. Bard, [removed: Inc.][added: Inc.*]

BD financed the cash portion of [added: the] total consideration transferred with available cash, which included net proceeds raised in the third quarter of fiscal year 2017 through registered public offerings of [removed: equity] securities and debt transactions.

Additional information regarding the Bard acquisition is contained in Note [removed: 9] [added: 10] to the consolidated financial statements contained in Item [removed: 8, Financial Statements and Supplementary Data, which is incorporated herein by reference.][added: 8.]

[removed: CareFusion Corporation][added: *CareFusion Corporation*]

[removed: Remaining] [added: *Remaining] interest in Caesarea Medical [removed: Electronics][added: Electronics*]

Additional information regarding these [removed: acquisitions] [added: divestitures] is contained in Note [removed: 9] [added: 11] to the consolidated financial statements contained in Item [removed: 8., Financial Statements and Supplementary Data, which is incorporated herein by reference.][added: 8.]

[removed: Divestitures][added: Divestitures]

[removed: Advanced Bioprocessing][added: *Advanced Bioprocessing*]

[removed: Respiratory] [added: *Respiratory] Solutions and Vyaire [removed: Medical][added: Medical*]

Additional information regarding [removed: these divestitures] [added: the Bard acquisition] is contained in Note 10 to the consolidated financial statements contained in Item [removed: 8, Financial Statements and Supplementary Data, which is incorporated herein by reference.][added: 8.]

[removed: International Operations][added: International Operations]

For reporting purposes, we organize our operations outside the United States as follows: Europe, EMA (which includes the Commonwealth of Independent States, the Middle East and Africa); Greater Asia (which includes [removed: Japan and] [added: countries in East Asia, South Asia, Southeast] Asia [removed: Pacific);] [added: and the Oceania region);] Latin America (which includes Mexico, Central America, the Caribbean and South America); and Canada.

The principal products sold by BD outside the United States are hypodermic needles and syringes; insulin syringes and pen needles; BD Hypak™ brand prefillable syringe systems; infusion therapy [removed: products] [added: products,] including Alaris™ infusion pumps; pharmacy automation [removed: equipment] [added: equipment,] including Pyxis™ systems; devices and services for the treatment of peripheral arterial and venous disease, cancer detection, and end-stage renal disease and maintenance; synthetic and resorbable mesh, biologic implants and fixation systems to complement innovative techniques for inguinal, ventral and other hernia repair procedures; medical devices for urine drainage in the acute care hospital and home care settings; BD Vacutainer™ brand blood collection products; diagnostic systems and laboratory equipment and products; [added: and] flow cytometry instruments and reagents.

Geographic information with respect to BD’s operations is included under the heading “Geographic Information” in Note [removed: 6] [added: 7] to the consolidated financial statements included in Item [removed: 8, Financial Statements and Supplementary Data, and is incorporated herein by reference.][added: 8.]

See further discussion of [removed: this risk] [added: these risks] in Item 1A.

[removed: Distribution][added: Distribution]

BD’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 Systems business unit, which relate to seasonal diseases such [added: as influenza.]

[removed: Raw] [added: Raw] Materials and [removed: Components][added: Components]

[removed: Research] [added: Research] and [removed: Development][added: Development]

[removed: Intellectual] [added: Intellectual] Property and [removed: Licenses][added: Licenses]

[removed: Competition][added: Competition]

Financial Statements and Supplementary Data, and is incorporated herein by reference.

| *Organizational Unit* | *Principal Product Lines* |

Effective October 1, 2019, BD Life Sciences joined its Preanalytical Systems and Diagnostic Systems organizational units to create a new Integrated Diagnostic Solutions organizational unit which will focus on driving growth and innovation around integrated specimen management to diagnostic solutions.

The new Integrated Diagnostic Solutions organizational unit will consist of the following principal product lines:

| *Organizational Unit* | *Principal Product Lines* |

| Integrated Diagnostic Solutions | Integrated systems for specimen collection; safety-engineered blood collection products and systems; automated blood culturing and tuberculosis culturing systems; molecular testing systems for infectious diseases and women’s health; microorganism identification and drug susceptibility systems; liquid-based cytology systems for cervical cancer screening; rapid diagnostic assays for testing of respiratory infections; microbiology laboratory automation; and plated media for clinical and industrial applications. |

| | |

| --- | --- |

| | |

| *Organizational Unit* | *Principal Product Lines* |

On December 29, 2017, BD completed the acquisition of Bard, a global medical technology company in the fields of vascular, urology, oncology and surgical specialty products.

Financial Statements and Supplementary Data, which is incorporated herein by reference.

Financial Statements and Supplementary Data, which is incorporated herein by reference.

Financial Statements and Supplementary Data, which is incorporated herein by reference.

Financial Statements and Supplementary Data.

See further discussion of the risks relating to competition in the medical technology industry in Item 1A.

Vertical integration has created a very concentrated market among payers.

In addition, most payers are seeking price predictability in order to mitigate future exposure to manufacturer price increases.

This is coupled with an increase in high deductible private insurance plans, which transfer more pricing exposure and burden directly to the patient.

BD's operations are global and are affected by complex state, federal and international laws relating to healthcare, environmental protection, antitrust, anti-corruption, marketing, fraud and abuse (including anti-kickback and false claims laws), export control, employment, privacy and other areas.

Consent order - Covington, Georgia

On October 28, 2019, BD entered into a consent order with the Environmental Protection Division of the Georgia Department of Natural Resources (the “EPD”), following the filing of a complaint and motion for temporary restraining order by the EPD seeking to enjoin BD from continuing sterilization operations at its Covington, Georgia facility.

Under the terms of the consent order, BD voluntarily agreed to a number of operational changes at its Covington and Madison, Georgia facilities designed to further reduce ethylene oxide emissions, including but not limited to operating at a reduced capacity.

BD does not believe that the consent order will have a material impact on its operations.

Violation of the consent order, though, could subject us to additional restrictions on the sterilization operations at our Covington and Madison facilities.

BD has business continuity plans in place to mitigate the impact of any additional restrictions on our operations at these facilities, although it is possible that these plans will not be able to fully offset such impact.

Risk Factors.

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

On December 29, 2017, BD completed the acquisition of Bard to create a medical technology company that is uniquely positioned to improve both the treatment of disease for patients and the process of care for health care providers.

The CareFusion acquisition positioned BD as a global leader in medication management.

as influenza.

BD spent approximately $1,006 million, $774 million and $828 million on research and development during the fiscal years ended September 30, 2018, 2017, and 2016, respectively.

environment.

Some competitors have also established manufacturing sites or have contracted with suppliers located in these countries as a means to lower their costs.

The FDA conducted an inspection of BD’s facility located in Franklin, Wisconsin (“BD Franklin site”) from May 16, 2018 through August 1, 2018.

On August 1, 2018, the FDA issued a Form 483 to the BD Franklin site in connection with these inspections that contained observations of non-conformance relating to quality system regulations relating to certain pre-filled Heparin lock flush syringes and pre-filled 0.9% sodium chloride lock flush syringes.

On September 14, 2018, BD received a Warning Letter from the FDA, citing certain alleged violations of quality system regulations and of law.

In the Warning Letter, FDA stated that BD’s response appears to be adequate, but that several of the actions are still in progress and a follow-up inspection by FDA of the site will be necessary to verify compliance.

We submitted our response to the Warning Letter on October 1, 2018.

public conference calls and webcasts.

[added: UNITED STATES] SECURITIES AND EXCHANGE [removed: COMMISSION][added: COMMISSION]

[removed: Washington,] [added: Washington,] D.C. [removed: 20549][added: 20549]

[removed: Form 10-K][added: Form 10-K]

[removed: ANNUAL] [added: ☑ANNUAL] REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF [removed: 1934][added: 1934]

[removed: FOR THE FISCAL YEAR ENDED SEPTEMBER] [added: For the fiscal year ended September] 30, [removed: 2018][added: 2019]

[removed: COMMISSION] [added: COMMISSION] FILE [removed: NUMBER 1-4802][added: NUMBER 001-4802]

[removed: BECTON,] [added: BECTON,] DICKINSON AND [removed: COMPANY][added: COMPANY]

[removed: (Exact] [added: *(Exact] name of registrant as specified in its [removed: charter)][added: charter)*]

| [removed: New Jersey] [added: New Jersey] | | [removed: 22-0760120] | [added: | 22-0760120 |]

| [removed: (State] [added: *(State] or other jurisdiction of incorporation or [removed: organization)] [added: organization)*] | | [removed: (I.R.S.] [added: | | *(I.R.S.] Employer Identification [removed: No.)] [added: No.)*] |

| [removed: 1] [added: 1] Becton [removed: Drive Franklin Lakes, New Jersey (Address of principal executive offices)] [added: Drive,] | [added: Franklin Lakes,] | [removed: 07417-1880 (Zip code)] [added: New Jersey] | [added: | 07417-1880 |]

Registrant’s telephone number, including area code [removed: (201) 847-6800][added: (201) 847-6800]

[removed: Securities] [added: Securities] registered pursuant to Section 12(b) of the [removed: Act:][added: Act:]

| [removed: Title] [added: Title] of Each [removed: Class] [added: Class] | | [removed: Name] [added: Trading Symbol | | Name] of Each Exchange on Which [removed: Registered] [added: Registered] |

| Common [removed: Stock,] [added: stock,] par value $1.00 | | [added: BDX | |] New York Stock Exchange |

| Depositary Shares, each representing [removed: a] 1/20th [removed: interest in] [added: of] a share of 6.125% Cumulative Preferred Stock Series A | | [added: BDXA | |] New York Stock Exchange |

| [removed: 0.368%] [added: 0.174%] Notes due June [removed: 6, 2019] [added: 4, 2021] | | [added: BDX/21 | |] New York Stock Exchange |

| 1.000% Notes due December 15, 2022 | | [added: BDX22A | |] New York Stock Exchange |

| 1.900% Notes due December 15, 2026 | | [added: BDX26 | |] New York Stock Exchange |

| 1.401% Notes due May 24, 2023 | | [added: BDX23A | |] New York Stock Exchange |

| 3.020% Notes due May 24, 2025 | | [added: BDX25 | |] New York Stock Exchange |

[removed: Securities] [added: Securities] registered pursuant to Section 12(g) of the [removed: Act:] [added: Act:] None

Yes [removed: þ] [added: ☑] No [removed: ¨][added: ☐]

Yes [removed: ¨] [added: ☐] No [removed: þ][added: ☑]

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

| Large accelerated filer | | [removed: þ] [added: ☑] | | Accelerated filer | | [removed: ¨] [added: ☐] | | Non-accelerated filer | | [removed: ¨] [added: ☐] |

| Smaller reporting company | | [removed: ¨] [added: ☐] | | Emerging growth company | | [removed: ¨] [added: ☐] | | | | |

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

As of March 31, [removed: 2018,] [added: 2019,] the aggregate market value of the registrant’s outstanding common stock held by non-affiliates of the registrant was approximately [removed: $56,903,426,170.][added: $67,278,853,280.]

As of October 31, [removed: 2018, 268,257,940] [added: 2019, 270,459,892] shares of the registrant’s common stock were outstanding.

[removed: Documents] [added: Documents] Incorporated by [removed: Reference] [added: Reference] Portions of the registrant’s Proxy Statement for the Annual Meeting of Shareholders to be held January [removed: 22, 2019] [added: 28, 2020] are incorporated by reference into Part III hereof.

[removed: TABLE] [added: TABLE] OF [removed: CONTENTS][added: CONTENTS]

[removed: | [PART I](#sCC43CD6AA5465F5BBE661D83A212A742) | [1](#sCC43CD6AA5465F5BBE661D83A212A742) |][added: PART I]

| [Item 1. [removed: Business](#s0D680ECE3293555DB9A6B55B4471B823)] [added: Business](#sD6D31602FC3F510584952B8152C103EA)] | [removed: [1](#s0D680ECE3293555DB9A6B55B4471B823)] [added: [1](#sD6D31602FC3F510584952B8152C103EA)] |

| [Item 1A. Risk [removed: Factors](#s15B7D93D6A5951C18516BB458C4500E6)] [added: Factors](#sF93263AA516054E9BB1DBA741BC719B1)] | [removed: [10](#s15B7D93D6A5951C18516BB458C4500E6)] [added: [10](#sF93263AA516054E9BB1DBA741BC719B1)] |

| [Item 1B. Unresolved Staff [removed: Comments](#sB826AECECE6758459F711B070A54661B)] [added: Comments](#s0FF850BA8C0559D9AEFE83487D9C2869)] | [removed: [18](#sB826AECECE6758459F711B070A54661B)] [added: [18](#s0FF850BA8C0559D9AEFE83487D9C2869)] |

| [Item 2. [removed: Properties](#s7C6E0A048B465DFCB5C39438A9DFDB44)] [added: Properties](#sC91322D3A679512D9E38D94A5A5E5834)] | [removed: [18](#s7C6E0A048B465DFCB5C39438A9DFDB44)] [added: [18](#sC91322D3A679512D9E38D94A5A5E5834)] |

| [Item 3. Legal [removed: Proceedings](#s37E5BFAD440A5092B3F7B2564226A215)] [added: Proceedings](#sDDB20431A09258D48BBD24A1E620D608)] | [removed: [19](#s37E5BFAD440A5092B3F7B2564226A215)] [added: [19](#sDDB20431A09258D48BBD24A1E620D608)] |

| [Item 4. Mine Safety [removed: Disclosures](#s6106A425DAA75A7FB8F486F6147AF7D1)] [added: Disclosures](#s8913BF6F094F51D58805E094B7B76B04)] | [removed: [19](#s6106A425DAA75A7FB8F486F6147AF7D1)] [added: [19](#s8913BF6F094F51D58805E094B7B76B04)] |

| [Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#s32865FDCA90353A68470582B97E46967)] [added: Securities](#sD54D20C01B515821A76CFDF829929E3D)] | [removed: [21](#s32865FDCA90353A68470582B97E46967)] [added: [21](#sD54D20C01B515821A76CFDF829929E3D)] |

(Mark One)

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

For the transition period from to

| | | | | |

| --- | --- | --- | --- | --- |

| | | | | |

| *(Address of principal executive offices)* | | | | *(Zip code)* |

| | | | | |

| --- | --- | --- | --- | --- |

| | | | | |

| 0.632% Notes due June 4, 2023 | | BDX/23A | | New York Stock Exchange |

| 1.208% Notes due June 4, 2026 | | BDX/26A | | New York Stock Exchange |

Yes ☑ No ☐

Yes ☑ No ☐

Yes ☐ No ☑

| [Information About Our Executive Officers](#s2DB28D2AD1FC55C386B9C6C0D4AE43BA) | [20](#s2DB28D2AD1FC55C386B9C6C0D4AE43BA) |

| [PART II](#s6B8B6AC120145CE484EC394FACA4260E) | [21](#s6B8B6AC120145CE484EC394FACA4260E) |

| [PART III](#s4FE4D87A731D5A819E4362FE9CC06D22) | [104](#s4FE4D87A731D5A819E4362FE9CC06D22) |

| [PART IV](#s8421C5ADB54E5E53BDF01D81797864B1) | [105](#s8421C5ADB54E5E53BDF01D81797864B1) |

| [SIGNATURES](#s037B73CC75A6522881B2662CEE99B716) | [111](#s037B73CC75A6522881B2662CEE99B716) |

| [EXHIBIT INDEX](#sD5227AF16FE55BD5A2E247CCB2863466) | [106](#sD5227AF16FE55BD5A2E247CCB2863466) |

10-K 1 bdx2018-09x3010xk.htm 10-K

UNITED STATES

| | | |

| --- | --- | --- |

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.

See the definitions of large accelerated filer, accelerated filer, smaller reporting company, and emerging growth company in Rule 12b-2 of the Exchange Act.

| [Executive Officers of the Registrant](#s36A6B6AB4735590C89BD6D0951EBE87C) | [20](#s36A6B6AB4735590C89BD6D0951EBE87C) |

| [PART II](#sDA91659B8E9D5186AE790E3AF2EA3B96) | [21](#sDA91659B8E9D5186AE790E3AF2EA3B96) |

| [PART III](#sC263B738FFEB5519B7B3BA1117D4117B) | [100](#sC263B738FFEB5519B7B3BA1117D4117B) |

| [PART IV](#sECAC497359F2538CA0C72AE144AE5807) | [100](#sECAC497359F2538CA0C72AE144AE5807) |

| [SIGNATURES](#s7DA02BB65B5D5F6FBEA019E3896ABC86) | [102](#s7DA02BB65B5D5F6FBEA019E3896ABC86) |

| [EXHIBIT INDEX](#sF9C760C81F2D592798FEA0D9659CC20E) | [104](#sF9C760C81F2D592798FEA0D9659CC20E) |

As of October [removed: 31, 2018,] [added: 28, 2019,] BD owned or leased [removed: 380] [added: 362] facilities throughout the world, comprising approximately [removed: 24,658,363] [added: 25,296,582] square feet of manufacturing, warehousing, administrative and research facilities.

The U.S. facilities, including those in Puerto Rico, comprise approximately [removed: 8,619,099] [added: 8,428,226] square feet of owned and [removed: 4,407,539] [added: 4,458,036] square feet of leased space.

[removed: The international] facilities comprise approximately [removed: 8,484,223] [added: 8,971,758] square feet of owned and [removed: 3,147,502] [added: 3,438,562] square feet of leased space.

The U.S. facilities are located in Alabama, Arizona, California, Connecticut, Florida, Georgia, Illinois, Indiana, Maryland, Massachusetts, [removed: Michigan,] Minnesota, Missouri, Montana, Nebraska, New Jersey, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, Utah, Virginia, Washington, D.C., Washington, [removed: Wisconsin] and Puerto Rico.

\- [removed: Europe,] [added: *Europe,] Middle East, [removed: Africa,] [added: Africa*,] which includes facilities in Austria, Belgium, [removed: Bosnia and Herzegovina,] [added: Bosnia,] the Czech Republic, Denmark, England, Finland, France, Germany, Ghana, Greece, Hungary, Ireland, Israel, Italy, Kenya, Luxembourg, Netherlands, Norway, Pakistan, Poland, Portugal, Russia, Saudi Arabia, South Africa, Spain, Sweden, Switzerland, Turkey, the United Arab Emirates and Zambia.

\- [removed: Greater Asia,] [added: *Greater Asia*,] which includes facilities in Australia, Bangladesh, China, India, Indonesia, Japan, Malaysia, New Zealand, the Philippines, Singapore, South Korea, Taiwan, Thailand and Vietnam.

\- [removed: Latin America,] [added: *Latin America*,] which includes facilities in Argentina, Brazil, Chile, Colombia, Mexico, Peru and the Dominican Republic.

The international

\- *Canada*.

The following table summarizes property information by business segment.

| | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- |

| Sites | Corporate | BD Life Sciences | BD Medical | BD Interventional | Mixed(a) | Total | |

| Leased | 20 | 21 | 81 | 86 | 83 | 291 | |

| Owned | 6 | 23 | 31 | 23 | 6 | 89 | |

| Total | 26 | 44 | 112 | 109 | 89 | 380 | |

| Square feet | 2,281,986 | 3,958,668 | 10,946,766 | 4,651,903 | 2,819,040 | 24,658,363 | |

| | |

| --- | --- |

| (a) | Facilities used by more than one business segment. |

\- Canada.

| [removed: Name] [added: Name] | [removed: Age] [added: Age] | [removed: Position] [added: Position] |

| Vincent A. Forlenza | [removed: 65] [added: 66] | Chairman since July 2012; Chief Executive Officer since [removed: October] 2011; and President from January 2009 to April 2017. [added: Mr. Forlenza will become executive Chairman, effective January 28, 2020.] |

| Thomas E. Polen | [removed: 45] [added: 46] | Chief Operating Officer since October 2018; President since April 2017; [added: and] Executive Vice President and President - Medical Segment from October 2014 to April [removed: 2017; and Group President from October 2013] [added: 2017. The BD Board of Directors has elected Mr. Polen] to [removed: October 2014.] [added: serve as BD's Chief Executive Officer and President, effective January 28, 2020.] |

| Simon D. Campion | [removed: 47] [added: 48] | Executive Vice President and President, Interventional Segment since September 2018; Worldwide President, BD Interventional - Surgery from December 2017 to September 2018; President, Davol (now part of our Surgery business), C.R. Bard, Inc. from July 2015 to December 2017; and prior thereto, Vice President and General Manager, Davol. |

| Roland Goette | [removed: 56] [added: 57] | Executive Vice President and President, EMEA since May 2017; [added: and] President, Europe from October 2014 to May [removed: 2017; and prior thereto, Vice President and General Manager - Medical Surgical Systems, Western Europe.] [added: 2017.] |

| Patrick K. Kaltenbach | [removed: 55] [added: 56] | Executive Vice President and President, Life Sciences Segment since May 2018; [added: and] Senior Vice President and President, Life Sciences and Applied Markets Group, Agilent Technologies, Inc. from November 2014 to April [removed: 2018; Vice President and General Manager of Agilent’s Life Sciences Products and Solutions organization from January 2014 to November 2014; and prior thereto, Vice President and General Manager of the Life Sciences Products and Solutions organization.] [added: 2018.] |

| Samrat S. Khichi | [removed: 51] [added: 52] | Executive Vice [added: President, Public Policy and Regulatory Affairs since May 2019; Executive Vice] President and General Counsel [removed: since] [added: from] December [removed: 2017;] [added: 2017 to May 2019; and] Senior Vice President, General Counsel and Corporate Secretary, C.R. Bard, Inc. from July 2014 to December [removed: 2017; and prior thereto, Chief Administrative Officer, Senior Vice President, General Counsel and Secretary, Catalent Pharma Solutions, a portfolio company of The Blackstone Group.] [added: 2017.] |

| Betty D. Larson | [removed: 42] [added: 43] | Executive Vice President, Human Resources, and Chief Human Resources Officer since July 2018; Senior Vice President of Human Resources, Interventional Segment from December 2017 to July 2018; Vice President, Human Resources, C.R. Bard, Inc. from September [removed: 2014] [added: 2017] to December 2017; and prior thereto, Vice President, Human Resources - Global Medical Products Business, [removed: Baxter International.] [added: C.R. Bard, Inc.] |

| James Lim | [removed: 54] [added: 55] | Executive Vice President and President, Greater Asia since June 2012. |

| Alberto Mas | [removed: 57] [added: 58] | Executive Vice President and President - Medical Segment since June 2018; Executive Vice President and President - Life Sciences Segment from October 2016 to June 2018; and Worldwide President - Diagnostic Systems from October 2013 to October 2016. |

| Christopher R. Reidy | [removed: 61] [added: 62] | Executive Vice President, Chief Financial Officer and Chief Administrative Officer since July 2013. |

[removed: PART II][added: PART II]

Information about our Executive Officers

| Alexandre Conroy | 56 | Executive Vice President and Chief Integrated Supply Chain Officer since February 2019; Worldwide President, Medication and Procedural Solutions from May 2017 to February 2019; and Executive Vice President and President, Europe, EMA and the Americas from June 2012 to May 2017. |

Executive Officers of the Registrant

| James W. Borzi | 56 | Executive Vice President, Global Operations and Chief Supply Chain Office since October 2017; Senior Vice President, Global Operations from 2015 to October 2017; and Vice President, Global Manufacturing from 2013 to 2015. |

As of October 31, [removed: 2018,] [added: 2019,] there were approximately [removed: 14,130] [added: 13,277] shareholders of record.

The table below sets forth certain information regarding BD’s purchases of its common stock during the fiscal quarter ended September 30, [removed: 2018.][added: 2019.]

| [removed: Period] [added: Period] | [removed: Total] [added: Total] Number [removed: of Shares Purchased(1)] [added: of Shares Purchased(1)] | | | [removed: Average Price Paid per Share] [added: Average Price Paid per Share] | | | [removed: Total] [added: Total] Number of [removed: Shares Purchased] [added: Shares Purchased] as Part [removed: of Publicly Announced Plans] [added: of Publicly Announced Plans] or [removed: Programs] [added: Programs] | | | [removed: Maximum Number of] [added: Maximum Number of] Shares [removed: that May] [added: that May] Yet [removed: be Purchased] [added: be Purchased] Under [removed: the Plans] [added: the Plans] or [removed: Programs(2)] [added: Programs(2)] | |

| September 1-30, [removed: 2018] [added: 2019] | — | | | — | | | — | | | 7,857,742 | |

| Total | [removed: 2,034] [added: 1,541] | | | [removed: $245.33] [added: $252.66] | | | — | | | 7,857,742 | |

| July 1-31, 2019 | 1,329 | | | $253.11 | | | — | | | 7,857,742 | |

| August 1-31, 2019 | 212 | | | $249.88 | | | — | | | 7,857,742 | |

Issuer Purchases of Equity Securities

| July 1-31, 2018 | 1,499 | | | $244.50 | | | — | | | 7,857,742 | |

| August 1-31, 2018 | 535 | | | $247.67 | | | — | | | 7,857,742 | |

[removed: FIVE-YEAR] [added: FIVE-YEAR] SUMMARY OF SELECTED FINANCIAL [removed: DATA][added: DATA]

[removed: Becton,] [added: Becton,] Dickinson and [removed: Company][added: Company]

| | [removed: Years] [added: Years] Ended September [removed: 30] [added: 30] | | | | | | | | | | | | | | | | | | |

| | [removed: 2018] [added: 2019] | | | | [removed: 2017] [added: 2018] | | | | [removed: 2016] [added: 2017] | | | | [removed: 2015] [added: 2016] | | | | [removed: 2014] [added: 2015] | | |

| | [removed: Dollars] [added: Dollars] in millions, except share and per share [removed: amounts] [added: amounts] | | | | | | | | | | | | | | | | | | |

| [removed: Operations] [added: Operations] | | | | | | | | | | | | | | | | | | | |

| Revenues | $ | [removed: 15,983] [added: 17,290] | | | $ | [removed: 12,093] [added: 15,983] | | | $ | [removed: 12,483] [added: 12,093] | | | $ | [removed: 10,282] [added: 12,483] | | | $ | [removed: 8,446] [added: 10,282] | |

| Income Before Income Taxes | [removed: 1,173] [added: 1,176] | | | | [removed: 976] [added: 1,173] | | | | [removed: 1,074] [added: 976] | | | | [removed: 739] [added: 1,074] | | | | [removed: 1,522] [added: 739] | | |

| Income Tax [removed: Provision] (Benefit) [added: Provision] | [added: (57 | | ) | |] 862 | | | | (124 | | ) | | 97 | | | | 44 | | | [removed: | 337 | | |]

| Net Income | [removed: 311] [added: 1,233] | | | | [removed: 1,100] [added: 311] | | | | [removed: 976] [added: 1,100] | | | | [removed: 695] [added: 976] | | | | [removed: 1,185] [added: 695] | | |

| Basic Earnings Per Share | [removed: 0.62] [added: 4.01] | | | | [removed: 4.70] [added: 0.62] | | | | [removed: 4.59] [added: 4.70] | | | | [removed: 3.43] [added: 4.59] | | | | [removed: 6.13] [added: 3.43] | | |

| Diluted Earnings Per Share | [removed: 0.60] [added: 3.94] | | | | [removed: 4.60] [added: 0.60] | | | | [removed: 4.49] [added: 4.60] | | | | [removed: 3.35] [added: 4.49] | | | | [removed: 5.99] [added: 3.35] | | |

| Dividends Per Common Share | [removed: 3.00] [added: 3.08] | | | | [removed: 2.92] [added: 3.00] | | | | [removed: 2.64] [added: 2.92] | | | | [removed: 2.40] [added: 2.64] | | | | [removed: 2.18] [added: 2.40] | | |

| [removed: Financial Position] [added: Financial Position] | | | | | | | | | | | | | | | | | | | |

| Total Assets | [removed: 53,904] [added: 51,765] | | | | [removed: 37,734] [added: 53,904] | | | | [removed: 25,586] [added: 37,734] | | | | [removed: 26,478] [added: 25,586] | | | | [removed: 12,384] [added: 26,478] | | |

| Total Long-Term Debt | [removed: 18,894] [added: 18,081] | | | | [removed: 18,667] [added: 18,894] | | | | [removed: 10,550] [added: 18,667] | | | | [removed: 11,370] [added: 10,550] | | | | [removed: 3,768] [added: 11,370] | | |

| Total Shareholders’ Equity | [removed: 20,994] [added: 21,081] | | | | [removed: 12,948] [added: 20,994] | | | | [removed: 7,633] [added: 12,948] | | | | [removed: 7,164] [added: 7,633] | | | | [removed: 5,053] [added: 7,164] | | |

| [removed: Additional Data] [added: Additional Data] | | | | | | | | | | | | | | | | | | | |

| Average Common and Common Equivalent Shares Outstanding — Assuming Dilution (millions) | [removed: 264.6] [added: 274.8] | | | | [removed: 223.6] [added: 264.6] | | | | [removed: 217.5] [added: 223.6] | | | | [removed: 207.5] [added: 217.5] | | | | [removed: 197.7] [added: 207.5] | | |

Additional discussion regarding the specified items in fiscal years [removed: 2018, 2017] [added: 2019, 2018] and [removed: 2016] [added: 2017] are provided in Item 7.

| [removed: Millions] [added: Millions] of dollars, except per share [removed: amounts] [added: amounts] | [removed: 2018] [added: 2019] | | | | [removed: 2017] [added: 2018] | | | | [removed: 2016] [added: 2017] | | | | [removed: 2015] [added: 2016] | | | | [removed: 2014] [added: 2015] | | |

| Total specified items | $ | [removed: 2,409] [added: 2,749] | | | $ | [removed: 1,466] [added: 2,409] | | | $ | [removed: 1,261] [added: 1,466] | | | $ | [removed: 1,186] [added: 1,261] | | | $ | [removed: 153] [added: 1,186] | |

| After-tax impact of specified items | $ | [removed: 2,674] [added: 2,127] | | | $ | [removed: 971] [added: 2,674] | | | $ | [removed: 892] [added: 971] | | | $ | [removed: 786] [added: 892] | | | $ | [removed: 101] [added: 786] | |

| Impact of specified items on diluted earnings per share | $ | [removed: (10.11] [added: (7.74] | ) | | $ | [removed: (4.34] [added: (10.11] | ) | | $ | [removed: (4.10] [added: (4.34] | ) | | $ | [removed: (3.79] [added: (4.10] | ) | | $ | [removed: (0.51] [added: (3.79] | ) |

| [removed: Impact of dilution] [added: Dilutive impact] from share issuances | $ | [added: — | | | $ |] (0.30 | ) | | $ | (0.54 | ) | | $ | — | | | $ | (0.02 | ) | [removed: | $ | — | |]

| Gross Profit (a) | 8,288 | | | | 7,269 | | | | 5,965 | | | | 6,018 | | | | 4,719 | | |

| Operating Income (a) | 1,760 | | | | 1,509 | | | | 1,522 | | | | 1,481 | | | | 1,119 | | |

| | |

| --- | --- |

| (a) | Prior-year amounts were revised to reflect the recognition of all components of the Company’s net periodic pension and postretirement benefit costs, aside from service cost, to *Other income (expense), net* on its consolidated income statements, as is further discussed in Note 2 to the consolidated financial statements contained in Item 8. Financial Statements and Supplementary Data. |

| | Years Ended September 30 | | | | | | | | | | | | | | | | | | |

| Gross Profit | 7,262 | | | | 5,942 | | | | 5,991 | | | | 4,695 | | | | 4,301 | | |

| Operating Income | 1,497 | | | | 1,478 | | | | 1,430 | | | | 1,074 | | | | 1,606 | | |

[removed: Reports] [added: Reports] of [removed: Management][added: Management]

[removed: Management’s Responsibilities][added: Management’s Responsibilities]

[removed: Management’s] [added: Management’s] Report on Internal Control Over Financial [removed: Reporting][added: Reporting]

[removed: On December 29, 2017,] [added: As discussed in Note 10,] the Company completed [removed: the] [added: its] acquisition of [removed: C.R. Bard, Inc. ("Bard").][added: Bard on December 29, 2017.]

Based on the Company's assessment of the effectiveness of internal control over financial reporting and the criteria noted above, management concluded that internal control over financial reporting was effective as of September 30, [removed: 2018.][added: 2019.]

| /s/ Vincent A. Forlenza | | /s/ Christopher Reidy | | /s/ [removed: Charles Bodner] [added: Thomas J. Spoerel] |

| Vincent A. Forlenza | | Christopher Reidy | | [removed: Charles Bodner] [added: Thomas J. Spoerel] |

| [removed: Chairman] [added: *Chairman] and Chief Executive [removed: Officer] [added: Officer*] | | [removed: Executive] [added: *Executive] Vice President, Chief Financial Officer and Chief Administrative [removed: Officer] [added: Officer*] | | [removed: Senior Vice] [added: *Vice] President, [removed: Corporate Finance] [added: Controller] and Chief Accounting [removed: Officer] [added: Officer*] |

[removed: Report] [added: Report] of Independent Registered Public Accounting [removed: Firm][added: Firm]

[removed: Becton,] [added: Becton,] Dickinson and [removed: Company][added: Company]

[removed: Opinion] [added: Opinion] on the Financial [removed: Statements][added: Statements]

We have audited the accompanying consolidated balance sheets of Becton, Dickinson and Company (the Company) as of September 30, [removed: 2018] [added: 2019] and [removed: 2017,] [added: 2018,] the related consolidated statements of income, comprehensive income and cash flows for each of the three years in the period ended September 30, [removed: 2018,] [added: 2019,] and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at September 30, [removed: 2018] [added: 2019] and [removed: 2017,] [added: 2018,] and the results of its operations and its cash flows for each of the three years in the period ended September 30, [removed: 2018,] [added: 2019,] in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of September 30, [removed: 2018,] [added: 2019,] based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated November [removed: 21, 2018] [added: 27, 2019] expressed an unqualified [removed: opinion thereon.][added: opinion.]

[removed: Basis] [added: Basis] for [removed: Opinion][added: Opinion]

[removed: Opinion] [added: Opinion] on Internal Control over Financial [removed: Reporting][added: Reporting]

We have audited Becton, Dickinson and Company’s internal control over financial reporting as of September 30, [removed: 2018,] [added: 2019,] based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway [removed: Commission] [added: Commission,] (2013 [removed: framework)] [added: framework),] (the COSO criteria).

In our opinion, Becton, Dickinson and Company (the Company) maintained, in all material respects, effective internal control over financial reporting as of September 30, [removed: 2018,] [added: 2019,] based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the [removed: 2018] consolidated balance sheets of the Company as of September 30, [removed: 2018] [added: 2019] and [removed: 2017,] [added: 2018,] the related consolidated statements of [added: income,] comprehensive income and cash flows for each of the three years in the period ended September 30, [removed: 2018,] [added: 2019,] and the related notes and our report dated November [removed: 21, 2018] [added: 27, 2019] expressed an unqualified opinion thereon.

[removed: Definition] [added: Definition] and Limitations of Internal Control Over Financial [removed: Reporting][added: Reporting]

[removed: Consolidated] [added: Consolidated] Statements of [removed: Income][added: Income]

[removed: Years] [added: Years] Ended September [removed: 30][added: 30]

| [removed: Millions] [added: Millions] of dollars, except per share [removed: amounts] [added: amounts] | [removed: 2018] [added: 2019] | | | | [removed: 2017] [added: 2018] | | | | [removed: 2016] [added: 2017] | | |

| Revenues | $ | [removed: 15,983] [added: 17,290] | | | $ | [removed: 12,093] [added: 15,983] | | | $ | [removed: 12,483] [added: 12,093] | |

| Cost of products sold | [removed: 8,721] [added: $] | [added: 37] | | | [removed: 6,151] [added: $] | [added: 36] | | | [removed: 6,492] [added: $] | [added: 30] | |

| Selling and administrative expense | [removed: 4,015] [added: 4,332] | | | | [removed: 2,925] [added: 4,016] | | | | [removed: 3,005] [added: 2,909] | | |

| Research and development expense | [removed: 1,006] [added: 32] | | | | [removed: 774] [added: 29] | | | | [removed: 828] [added: 24] | | |

| Acquisitions and other restructurings | [removed: 744] [added: 480] | | | | [removed: 354] [added: 740] | | | | [removed: 728] [added: 354] | | |

| Other operating expense, net | [removed: —] [added: 654] | | | | [removed: 410] [added: —] | | | | [removed: —] [added: 410] | | |

| Total Operating Costs and Expenses | [removed: 14,487] [added: 15,530] | | | | [removed: 10,615] [added: 14,474] | | | | [removed: 11,053] [added: 10,571] | | |

| Interest expense | [removed: (706] [added: (639] | | ) | | [removed: (521] [added: (706] | | ) | | [removed: (388] [added: (521] | | ) |

| Interest income | [removed: 65] [added: 12] | | | | [removed: 76] [added: 65] | | | | [removed: 21] [added: 76] | | |

[removed: | Other income (expense), net | 318 | | | | (57 | | ) | | 11 | | |][added: Other Income (Expense), Net]

| Income Before Income Taxes | [removed: 1,173] [added: 1,176] | | | | [removed: 976] [added: 1,173] | | | | [removed: 1,074] [added: 976] | | |

| Income tax [removed: provision] (benefit) [added: provision] | [removed: 862] [added: (57] | | [added: )] | | [removed: (124] [added: 862] | | [removed: )] | | [removed: 97] [added: (124] | | [added: )] |

| Net Income | [removed: 311] [added: 1,233] | | | | [removed: 1,100] [added: 311] | | | | [removed: 976] [added: 1,100] | | |

| Preferred stock dividends | (152 | | ) | | [removed: (70] [added: (152] | | ) | | [removed: —] [added: (70] | | [added: )] |

| Net income applicable to common shareholders | $ | [removed: 159] [added: 1,082] | | | $ | [removed: 1,030] [added: 159] | | | $ | [removed: 976] [added: 1,030] | |

| Basic Earnings per Share | $ | [removed: 0.62] [added: 4.01] | | | $ | [removed: 4.70] [added: 0.62] | | | $ | [removed: 4.59] [added: 4.70] | |

| Diluted Earnings per Share | $ | [removed: 0.60] [added: 3.94] | | | $ | [removed: 4.60] [added: 0.60] | | | $ | [removed: 4.49] [added: 4.60] | |

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

| | | Estimation of Product Liability Reserves |

| *Description of the Matter* | | As described in Note 5 to the consolidated financial statements, the Company is a defendant in various product liability matters in which the plaintiffs allege a wide variety of claims associated with the use of certain Company devices. At September 30, 2019, the Company’s product liability reserves totaled approximately $2.5 billion. The Company engaged an actuarial specialist to perform an analysis to estimate the outstanding liability for indemnity costs related to claims arising from these product liability matters. The methods used by the Company to estimate these reserves are based on reported claims, historical settlement amounts, and stage of litigation, among other items. Auditing management’s estimate of the product liability reserves and related disclosure was challenging due to the significant judgment required to determine the methods used to estimate the amount of unreported product liability claims and the indemnity costs and the key assumptions utilized in those methods given the stages of these matters and the amount of claims history. |

| *How We Addressed the Matter in Our Audit* | | We obtained an understanding, evaluated the design and tested the operating effectiveness of the controls over the Company’s evaluation of the product liability reserve. For example, we tested controls over management's review of the methods, significant assumptions and the underlying data used by the actuary to estimate the product liability reserve. To evaluate management’s estimate of the product liability reserve, our audit procedures included, among others, testing the completeness and accuracy of the underlying data used by management's actuarial specialist to estimate the amount of unreported claims and the indemnity cost. For example, we compared filed and settled claims data to legal letters obtained from external counsel, and, on a sample basis, compared settlement amounts to the underlying agreements. In addition, we involved our actuarial specialists to assist us in evaluating the methods used to estimate the unreported claims and the indemnity cost used in the calculation of the product liability reserves. We have also assessed the adequacy of the Company’s disclosures in relation to these matters. |

| | | Income taxes - Uncertain tax positions |

| *Description of the Matter* | | As discussed in Notes 1 and 17 of the consolidated financial statements, the Company has recorded a liability of $624 million related to uncertain tax positions as of September 30, 2019. The Company conducts business in numerous countries and is therefore subject to income taxes in multiple jurisdictions, which impacts the provision for income taxes. Due to the multinational operations of the Company, changes in global income tax laws and regulation result in complexity in the accounting for and monitoring of income taxes including the provision for uncertain tax positions. Auditing the completeness of management’s identification of uncertain tax positions involved complex analysis and auditor judgment related to the evaluation of the income tax consequences of significant transactions, including internal restructurings, and changes in income tax law and regulations in various jurisdictions, which is often subject to interpretation. |

| *How We Addressed the Matter in Our Audit* | | We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s income tax provision process, such as controls over management’s identification and assessment of changes to tax laws and income tax positions to account for uncertain tax positions, including management’s review of the related tax technical analyses. We performed audit procedures, among others, to evaluate the Company’s assumptions used to develop its uncertain tax positions and related unrecognized income tax benefit amounts by jurisdiction. We obtained an understanding of the Company’s legal structure through our review of organizational charts and related legal documents. We further considered the income tax consequences of significant transactions, including internal restructurings, and assessed management’s interpretation of those changes under the relevant jurisdiction’s tax law. Due to the complexity of tax law, we involved our tax subject matter professionals to assess the Company’s interpretation of and compliance with tax laws in these jurisdictions, as well as to identify tax law changes. We also involved our tax subject matter professionals to evaluate the technical merits of the Company’s accounting for its tax positions, including assessing the Company’s correspondence with the relevant tax authorities and evaluating third-party advice obtained by the Company. We also evaluated the Company’s income tax disclosures included in Note 17 to the consolidated financial statements in relation to these matters. |

| | | Goodwill impairment - Interventional segment |

| *Description of the Matter* | | At September 30, 2019, the Company’s goodwill assigned to the Interventional segment was $12.6 billion. As discussed in Note 1 of the consolidated financial statements, goodwill is tested for impairment at least annually at the reporting unit level using quantitative models. Auditing management’s annual goodwill impairment test was complex and highly judgmental due to the significant estimation required in determining the fair value of the reporting units. In particular, the fair value estimates were sensitive to significant assumptions such as the discount rate, revenue growth rate, operating margin, and terminal value, which are affected by expectations about future market or economic conditions. |

| *How We Addressed the Matter in Our Audit* | | We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s goodwill impairment review process. For example, we tested controls over management’s review of the inputs and assumptions to the goodwill impairment analysis. To test the estimated fair value of the Company’s reporting units, our audit procedures included, among others, assessing fair value methodology, evaluating the prospective financial information used by the Company in its valuation analysis and involving our valuation specialists to assist in testing the significant assumptions discussed above. We compared the significant assumptions used by management to current industry and economic trends, historical financial results, and other relevant factors that would affect the significant assumptions. We assessed the historical accuracy of management’s estimates and performed sensitivity analyses of significant assumptions to evaluate the changes in the fair value of the reporting units. In addition, we tested the reconciliation of the fair value of the reporting units to the market capitalization of the Company. |

| November 27, 2019 | |

Report of Independent Registered Public Accounting Firm

Basis for Opinion

| November 27, 2019 | |

| Operating Income | 1,760 | | | | 1,509 | | | | 1,522 | | |

Becton, Dickinson and Company

Years Ended September 30

Becton, Dickinson and Company

Becton, Dickinson and Company

Years Ended September 30

| Net income | $ | 1,233 | | | $ | 311 | | | $ | 1,100 | |

| Gain on sale of business | (336 | | ) | | — | | | | — | | |

| Product liability-related charges | 914 | | | | — | | | | — | | |

| Other, net | (261 | | ) | | (217 | | ) | | (148 | | ) |

Becton, Dickinson and Company

Becton, Dickinson and Company

The Company recognizes revenue from product sales when the customer obtains control of the product, which is generally upon shipment or delivery, depending on the delivery terms specified in the sales agreement.

Revenues associated with certain instruments and equipment for which installation is complex, and therefore significantly affects the customer’s ability to use and benefit from the product, are recognized upon customer acceptance of these installed products.

Revenue for certain service arrangements, including extended warranty and software maintenance contracts, is recognized ratably over the contract term.

When arrangements include multiple performance obligations, the total transaction price of the contract is allocated to each performance obligation based on the estimated relative standalone selling prices of the promised goods or services underlying each performance obligation.

Variable consideration such as rebates, sales discounts and sales returns are estimated and treated as a reduction of revenue in the same period the related revenue is recognized.

These estimates are based on contractual terms, historical practices, and current trends, and are adjusted as new information becomes available.

Revenues exclude any taxes that the Company collects from customers and remits to tax authorities.

Additional disclosures regarding the Company's accounting for revenue recognition are provided in Note 6.

Notes to Consolidated Financial Statements — (Continued)

Becton, Dickinson and Company

The Company considers its shipping and handling costs to be contract fulfillment costs and records them within *Selling and administrative expense.* Shipping expense was $511 million, $479 million and $365 million in 2019, 2018 and 2017, respectively.

The Company has reviewed its needs in the United States for possible repatriation of undistributed earnings of its foreign subsidiaries and continues to invest foreign subsidiaries earnings outside of the United States to fund foreign investments or meet foreign working capital and property, plant and equipment expenditure needs.

While the Company has extended its oversight and monitoring processes that support its internal control over financial reporting, as well as its disclosure controls and procedures, the Company continues to integrate the acquired operations of Bard.

As such, the Company has excluded Bard from its evaluation of internal control over financial reporting.

This exclusion is in accordance with the U.S. Securities and Exchange Commission's general guidance that a recently acquired business may be omitted from the assessment scope for up to one year from the date of acquisition.

Bard is a wholly-owned subsidiary with total assets that represented approximately 5% of the Company's consolidated total assets at September 30, 2018 and total revenues that represented approximately 19% of the Company's consolidated revenues for fiscal year 2018.

| November 21, 2018 | |

As indicated in the accompanying Management's Report on Internal Control over Financial Reporting, management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of C.R. Bard, Inc., which is included in the 2018 consolidated financial statements of the Company and constituted 5% of total assets as of September 30, 2018 and 19% of net sales for the year then ended.

Our audit of internal control over financial reporting of the Company also did not include an evaluation of the internal control over financial reporting of C.R. Bard, Inc.

| Operating Income | 1,497 | | | | 1,478 | | | | 1,430 | | |

| Proceeds from (purchases of) investments, net | 11 | | | | 13 | | | | (1 | | ) |

| Other, net | (198 | | ) | | (161 | | ) | | (133 | | ) |

| Excess tax benefit from payments under share-based compensation plans | — | | | | — | | | | 86 | | |

The review for impairment of in-process research and development assets is performed by comparing the fair value of the technology or project assets, estimated using an income approach, with their carrying value.

In-process research and development assets are considered indefinite-lived assets and are reviewed at least annually for impairment until projects are completed or abandoned.

Revenue from product sales is typically recognized when all of the following criteria have been met: persuasive evidence of an arrangement exists; delivery has occurred or services have been rendered; product price is fixed or determinable; collection of the resulting receivable is reasonably assured.

Certain sales arrangements contain multiple deliverables, including equipment and service deliverables, which requires the Company to determine the separate units of account.

If the deliverable meets the criteria of a separate unit of accounting, the arrangement consideration is allocated to each element based upon its relative selling price.

In determining the best evidence of selling price of a unit of account the Company utilizes vendor-specific objective evidence (“VSOE”), which is the price the Company charges when the deliverable is sold separately.

When VSOE is not available, management uses relevant third-party evidence (“TPE”) of selling price, if available.

When neither VSOE nor TPE of selling price exists, management uses its best estimate of selling price.

Revenue allocated to certain equipment deliverables is recognized upon customer acceptance, which occurs after the transfer of title and risk of loss to the customer and the completion of installation or training services.

When related services are considered inconsequential, delivery is deemed to occur upon the transfer of title and risk of loss, at which time revenue and the costs associated with services are recognized.

For products sold and leased with embedded software, if software is considered not essential to the non-software elements of a product but is considered more than incidental to a product as a whole, the product’s software elements must be separated from its non-software elements under the requirements relating to multiple-element arrangements and accounted for under software industry-specific revenue recognition requirements.

However, if it is determined that the embedded software is more than incidental to the product as a whole but the non-software elements and software elements work together to deliver the essential functionality of the products as a whole, then the accounting for such product does not fall within the scope of software industry-specific accounting requirements.

The Company’s domestic businesses sell products primarily to distributors that resell the products to end-user customers.

Provisions for rebates, as well as sales discounts and returns, are based upon estimates and are accounted for as a reduction of revenues when revenue is recognized.

Shipping and handling costs are included in Selling and administrative expense.

Shipping expense was $479 million, $365 million and $401 million in 2018, 2017 and 2016, respectively.

The Company has historically asserted indefinite reinvestment of the earnings of certain non-U.S. subsidiaries outside the United States.

New U.S. tax legislation, which is further discussed in Note 16, eliminated certain material tax effects on the repatriation of cash to the United States.

Future repatriation of cash and other property held by the Company's foreign subsidiaries will generally not be subject to U.S. federal income tax.

Diluted earnings per share reflect the potential

The Company will adopt the standard on October 1, 2019 and has commenced its initial assessment of the impact on its consolidated financial statements.

In May 2014, the FASB issued a new revenue recognition standard.

The Company is currently finalizing the changes to its processes, systems and controls which are necessary to support recognition and disclosure under the new revenue recognition standard.

| Balance at September 30, 2015 | $ | 333 | | | $ | 4,475 | | | $ | 12,314 | | | $ | 20 | | | (121,967 | ) | | $ | (8,239 | ) |

| Common stock issued for: | | | | | | | | | | | | | | | | | | | | | | |

| Balance at September 30, 2015 | $ | (1,738 | ) | | $ | (961 | ) | | $ | (741 | ) | | $ | (36 | ) |

| (b) | The adjustment to calculate diluted share equivalents from share-based plans in 2016 included excess tax benefits relating to share-based compensation awards. Upon the Company's adoption, as discussed in Note 2, of new accounting requirements relating to share-based compensation award-related income tax effects, the adjustments in 2018 and 2017 excluded these excess tax benefits. |

Future minimum rental commitments on non-cancelable leases are as follows: 2019 — $107 million; 2020 — $94 million; 2021 — $76 million; 2022 — $62 million; 2023 — $48 million and an aggregate of $124 million thereafter.

As is further discussed in Note 9, the Company completed its acquisition of Bard on December 29, 2017 and the following matters include Bard-related legal proceedings and claims that the Company assumed on the acquisition date (“Bard-related Product Liability Matters”).

An evaluation was conducted by BD’s management, with the participation of BD’s 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 September 30, [removed: 2018.][added: 2019.]

There were no changes in our internal control over financial reporting during the fiscal quarter ended September 30, [removed: 2018] [added: 2019] identified in connection with the above-referenced evaluation that have materially affected, or are reasonably likely to materially affect, BD’s internal control over financial reporting.

Management’s Report on Internal Control Over Financial Reporting and the Report of Independent Registered Public Accounting Firm are contained in Item [removed: 8, Financial Statements and Supplementary Data, and are incorporated herein by reference.][added: 8.]

Financial Statements and Supplementary Data, and are incorporated herein by reference.

On December 29, 2017, BD completed the acquisition of Bard.

While BD has extended its oversight and monitoring processes that support our internal control over financial reporting, as well as its disclosure controls and procedures, we continue to integrate the acquired operations of Bard.

As such, we have excluded Bard from our evaluation of internal control over financial reporting.

This exclusion is in accordance with the U.S. Securities and Exchange Commission's general guidance that a recently acquired business may be omitted from the assessment scope for up to one year from the date of acquisition.

Bard is a wholly-owned subsidiary with total assets that represented approximately 5% of BD's consolidated total assets at September 30, 2018 and total revenues that represented approximately 19% of BD's consolidated revenues for fiscal year 2018.

[removed: PART III][added: PART III]

As previously reported, the Board of Directors elected Thomas E.

Polen to serve as BD’s Chief Executive Officer and President, effective upon the conclusion of BD’s 2020 annual meeting of shareholders.

Upon assuming the role of Chief Executive Officer and President, Mr. Polen’s base salary will increase to $1,150,000 and his annual incentive award target will increase to 150% of base salary.

None.

Election of Directors” and “Board of Directors - Committee membership and function - Audit Committee” in a definitive proxy statement involving the election of directors, which the registrant will file with the SEC not later than 120 days after September 30, [removed: 2018] [added: 2019] (the [removed: “2018] [added: “2020] Proxy Statement”), and such information is incorporated herein by reference.

The information relating to executive officers required by this item is included herein in Part I under the caption [removed: “Executive Officers of the Registrant.”][added: “Information about our Executive Officers.”]

Certain other information required by this item will be contained under the captions “Ownership of BD Common [removed: Stock - Section 16(a) beneficial ownership reporting compliance”, “Corporate Governance - Director nomination process"] [added: Stock”,] and [removed: Corporate] [added: "Corporate] Governance - Code of Conduct” in BD’s [removed: 2018] [added: 2020] Proxy Statement, and such information is incorporated herein by reference.

The information required by this item will be contained under the captions “Compensation Discussion and Analysis,” “Report of the Compensation and Management Development Committee,” “Compensation of Named Executive Officers”, “Board of Directors - Non‑management directors’ compensation,” and “CEO Pay Ratio" in BD’s [removed: 2018] [added: 2020] Proxy Statement, and such information is incorporated herein by reference.