Item 1. FINANCIAL STATEMENTS

BECTON, DICKINSON AND COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

Millions of dollars, except per share data

(Unaudited)

			Three Months Ended June 30,												Nine Months Ended June 30,
			2023						2022						2023						2022
Revenues			$	4,878					$	4,641					$	14,285					$	14,109
Cost of products sold			2,778						2,574						7,816						7,709
Selling and administrative expense			1,190						1,149						3,581						3,527
Research and development expense			306						315						956						956
Acquisition-related integration and restructuring expense			70						55						175						118
Other operating (income) expense, net			(13)						11						(7)						7
Total Operating Costs and Expenses			4,329						4,104						12,523						12,316
Operating Income			549						537						1,762						1,793
Interest expense			(119)						(99)						(339)						(294)
Interest income			24						5						40						9
Other income (expense), net			17						(21)						18						(45)
Income from Continuing Operations Before Income Taxes			471						421						1,481						1,463
Income tax provision			64						31						104						115
Net Income from Continuing Operations			407						390						1,376						1,348
(Loss) Income from Discontinued Operations, Net of Tax			—						(30)						—						144
Net Income			407						360						1,376						1,491
Preferred stock dividends			(15)						(23)						(60)						(68)
Net income applicable to common shareholders			$	392					$	338					$	1,316					$	1,424
Basic Earnings per Share
Income from Continuing Operations			$	1.37					$	1.29					$	4.62					$	4.49
(Loss) Income from Discontinued Operations			—						(0.10)						—						0.50
Basic Earnings per Share			$	1.37					$	1.18					$	4.62					$	4.99
Diluted Earnings per Share
Income from Continuing Operations			$	1.36					$	1.28					$	4.60					$	4.45
(Loss) Income from Discontinued Operations			—						(0.10)						—						0.50
Diluted Earnings per Share			$	1.36					$	1.18					$	4.60					$	4.95
Dividends per Common Share			$	0.91					$	0.87					$	2.73					$	2.61

Amounts may not add due to rounding.

See notes to condensed consolidated financial statements

BECTON, DICKINSON AND COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Millions of dollars

(Unaudited)

			Three Months Ended June 30,												Nine Months Ended June 30,
			2023						2022						2023						2022
Net Income			$	407					$	360					$	1,376					$	1,491
Other Comprehensive Income (Loss), Net of Tax
Foreign currency translation adjustments			44						203						(57)						322
Defined benefit pension and postretirement plans			11						11						34						32
Cash flow hedges			12						37						4						74
Other Comprehensive Income (Loss), Net of Tax			68						250						(20)						428
Comprehensive Income			$	475					$	610					$	1,357					$	1,919

Amounts may not add due to rounding.

See notes to condensed consolidated financial statements

BECTON, DICKINSON AND COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS

Millions of dollars, except per share amounts and numbers of shares

			June 30, 2023						September 30, 2022
Assets			(Unaudited)
Current Assets:
Cash and equivalents			$	923					$	1,006
Restricted cash			101						153
Short-term investments			8						8
Trade receivables, net			2,414						2,191
Inventories:
Materials			766						707
Work in process			406						397
Finished products			2,416						2,120
			3,588						3,224
Assets held for sale			271						—
Prepaid expenses and other			1,282						1,559
Total Current Assets			8,588						8,141
Property, Plant and Equipment			13,475						12,415
Less allowances for depreciation and amortization			7,002						6,402
Property, Plant and Equipment, Net			6,474						6,012
Goodwill			24,584						24,621
Developed Technology, Net			8,335						9,108
Customer Relationships, Net			2,426						2,683
Other Intangibles, Net			552						519
Other Assets			2,059						1,848
Total Assets			$	53,017					$	52,934
Liabilities and Shareholders’ Equity
Current Liabilities:
Current debt obligations			$	1,856					$	2,179
Payables, accrued expenses and other current liabilities			5,021						5,632
Total Current Liabilities			6,878						7,811
Long-Term Debt			14,926						13,886
Long-Term Employee Benefit Obligations			904						902
Deferred Income Taxes and Other Liabilities			4,373						5,052
Commitments and Contingencies (See Note 5)
Shareholders’ Equity
Preferred stock			—						2
Common stock — $1 par value; authorized — 640,000,000 shares; issued — 370,594,401 shares in June 30, 2023 and 364,639,901 shares in September 30, 2022			371						365
Capital in excess of par value			19,681						19,553
Retained earnings			15,691						15,157
Deferred compensation			23						23
Treasury stock			(8,321)						(8,330)
Accumulated other comprehensive loss			(1,507)						(1,488)
Total Shareholders’ Equity			25,937						25,282
Total Liabilities and Shareholders’ Equity			$	53,017					$	52,934

Amounts may not add due to rounding.

See notes to condensed consolidated financial statements

BECTON, DICKINSON AND COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Millions of dollars

(Unaudited)

			Nine Months Ended June 30,
			2023						2022
Operating Activities
Net income			$	1,376					$	1,491
Less: Income from discontinued operations, net of tax			—						144
Income from continuing operations, net of tax			1,376						1,348
Adjustments to net income from continuing operations to derive net cash provided by continuing operating activities:
Depreciation and amortization			1,701						1,648
Share-based compensation			201						184
Deferred income taxes			(424)						(99)
Change in operating assets and liabilities			(1,144)						(1,445)
Pension obligation			52						(126)
Other, net			(98)						(11)
Net Cash Provided by Continuing Operating Activities			1,665						1,498
Investing Activities
Capital expenditures			(580)						(658)
Acquisitions, net of cash acquired			—						(450)
Other, net			(272)						(107)
Net Cash Used for Continuing Investing Activities			(853)						(1,215)
Financing Activities
Change in short-term debt			49						—
Proceeds from long-term debt			1,662						—
Distribution from Embecta Corp. (see Note 2)			—						1,266
Net transfer of cash to Embecta upon spin-off			—						(265)
Payments of debt			(1,716)						(305)
Dividends paid			(849)						(812)
Other, net			(105)						(70)
Net Cash Used for Continuing Financing Activities			(959)						(187)
Discontinued Operations
Net cash provided by operating activities			—						163
Net cash used for investing activities			—						(11)
Net cash provided by financing activities			—						145
Net Cash Provided by Discontinued Operations			—						298
Effect of exchange rate changes on cash and equivalents and restricted cash			13						(26)
Net (decrease) increase in cash and equivalents and restricted cash			(134)						368
Opening Cash and Equivalents and Restricted Cash			1,159						2,392
Closing Cash and Equivalents and Restricted Cash			$	1,024					$	2,759

Amounts may not add due to rounding.

See notes to condensed consolidated financial statements

BECTON, DICKINSON AND COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2023

Note 1 – Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and, in the opinion of the management of Becton, Dickinson and Company (the "Company" or "BD"), include all adjustments which are of a normal recurring nature, necessary for a fair presentation of the financial position and the results of operations and cash flows for the periods presented. However, the financial statements do not include all information and accompanying notes required for a presentation in accordance with U.S. generally accepted accounting principles ("U.S. GAAP"). These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s 2022 Annual Report on Form 10-K.

On April 1, 2022, the Company completed the spin-off of its Diabetes Care business as a separate publicly traded company. The historical results of the Diabetes Care business (previously included in BD’s Medical segment) that was contributed to Embecta Corp (“Embecta”) in the spin-off were reflected as discontinued operations in the Company’s condensed consolidated financial statements. Additional disclosures regarding the spin-off and this presentation of results are provided in Note 2.

Within the financial statements and tables presented, certain columns and rows may not add due to the use of rounded numbers for disclosure purposes. Percentages and earnings per share amounts presented are calculated from the underlying amounts. The results of operations for the interim periods are not necessarily indicative of the results of operations to be expected for the full year.

Note 2 – Spin-Off of Embecta Corp.

On April 1, 2022, the Company completed the spin-off of its Diabetes Care business as a separate publicly traded company named Embecta through a distribution of Embecta’s publicly traded common stock (listed on NASDAQ under the ticker symbol “EMBC”) to BD’s shareholders of record as of the close of business on March 22, 2022 (the “record date”). The Company distributed one share of Embecta common stock for every five common shares of BD outstanding as of the record date and shareholders received cash in lieu of fractional shares of Embecta common stock. BD retained no ownership interest in Embecta subsequent to the spin-off. The distribution is expected to qualify and has been treated as tax-free to the Company and its shareholders for U.S. federal income tax purposes. On March 31, 2022, Embecta used a portion of the proceeds from its financing transactions to make a cash distribution of approximately $1.266 billion to the Company.

The Company and Embecta entered into various agreements to effect the spin-off and provide a framework for the relationship between the Company and Embecta after the spin-off. Such agreements include the separation and distribution agreement, as well as the following ongoing agreements: a cannula supply agreement, an intellectual property matters agreement, a transition services agreement, manufacturing and supply agreements, a lease agreement, a distribution agreement to support commercial operations, a logistics services agreement and other agreements including an employee matters agreement and a tax matters agreement. Under these agreements, the Company will continue to provide certain products and services to Embecta following the spin-off. The agreements do not provide the Company with the ability to influence the operating or financial policies of Embecta subsequent to the spin-off date. Amounts included in the Company’s condensed consolidated statements of income during the three and nine months ended June 30, 2023 and the three months ended June 30, 2022 as a result of these agreements were immaterial.

Details of Income from Discontinued Operations, Net of Tax, which represent the historical results of the Diabetes Care business prior to the spin-off date of April 1, 2022, are as follows:

												Nine Months Ended June 30,
Millions of dollars															2022
Revenues															$	538
Cost of products sold															143
Selling and administrative expense															78
Research and development expense															32
Other operating expense, net															95
Total Operating Costs and Expenses															348
Operating Income															190
Interest expense															(4)
Income from Discontinued Operations Before Income Taxes															186
Income tax provision															42
Income from Discontinued Operations, Net of Tax															$	144

Other operating expense, net above includes $30 million of costs incurred by the Company to execute the spin-off and other costs for related residual activities during the three months ended June 30, 2022, as well as $78 million of separation costs incurred by the Company prior to the spin-off date, including those for consulting, legal, tax and other advisory services associated with the spin-off.

The amounts of Revenues and Cost of products sold from discontinued operations detailed above include previously eliminated intercompany transactions that occurred between BD and Embecta, which resulted in a third-party sale in the same period.

Note 3 – Shareholders' Equity

Changes in certain components of shareholders' equity for the first three quarters of fiscal years 2023 and 2022 were as follows:

			Common Stock Issued at Par Value						Capital in Excess of Par Value						Retained Earnings						Deferred Compensation						Treasury Stock
(Millions of dollars)			Shares (in thousands)						Amount
Balance at September 30, 2022			$	365					$	19,553					$	15,157					$	23					(81,283)						$	(8,330)
Net income			—						—						509						—						—						—
Common dividends ($0.91 per share)			—						—						(259)						—						—						—
Preferred dividends			—						—						(23)						—						—						—
Issuance of shares under employee and other plans, net			—						(52)						—						—						556						(3)
Share-based compensation			—						89						—						—						—						—
Common stock held in trusts, net (a)			—						—						—						—						(11)						—
Balance at December 31, 2022			$	365					$	19,590					$	15,384					$	24					(80,738)						$	(8,333)
Net income			—						—						460						—						—						—
Common dividends ($0.91 per share)			—						—						(259)						—						—						—
Preferred dividends			—						—						(23)						—						—						—
Issuance of shares under employee and other plans, net			—						(7)						—						—						21						5
Share-based compensation			—						56						—						—						—						—
Common stock held in trusts, net (a)			—						—						—						—						92						—
Balance at March 31, 2023			$	365					$	19,639					$	15,563					$	24					(80,625)						$	(8,327)
Net income			—						—						407						—						—						—
Common dividends ($0.91 per share)			—						—						(264)						—						—						—
Preferred dividends			—						—						(15)						—						—						—
Issuance of shares for preferred shares converted to common shares (b)			6						(4)						—						—						—						—
Issuance of shares under employee and other plans, net			—						(9)						—						(1)						131						6
Share-based compensation			—						56						—						—						—						—
Common stock held in trusts, net (a)			—						—						—						—						8						—
Balance at June 30, 2023			$	371					$	19,681					$	15,691					$	23					(80,486)						$	(8,321)

			Common Stock Issued at Par Value						Capital in Excess of Par Value						Retained Earnings						Deferred Compensation						Treasury Stock
(Millions of dollars)			Shares (in thousands)						Amount
Balance at September 30, 2021			$	365					$	19,272					$	13,826					$	23					(80,164)						$	(7,723)
Net income			—						—						677						—						—						—
Common dividends ($0.87 per share)			—						—						(248)						—						—						—
Preferred dividends			—						—						(23)						—						—						—
Issuance of shares under employee and other plans, net			—						(71)						—						—						762						19
Share-based compensation			—						83						—						—												—
Common stock held in trusts, net (a)			—						—						—						—						(5)						—
Repurchase of common stock (c)			—						150						—						—						(462)						(150)
Balance at December 31, 2021			$	365					$	19,435					$	14,233					$	24					(79,869)						$	(7,855)
Net income			—						—						454						—						—						—
Common dividends ($0.87 per share)			—						—						(248)						—						—						—
Preferred dividends			—						—						(23)						—						—						—
Issuance of shares under employee and other plans, net			—						(21)						—						1						284						14
Share-based compensation			—						56						—						—						—						—
Common stock held in trusts, net (a)			—						24						—						—						9						(24)
Balance at March 31, 2022			$	365					$	19,495					$	14,416					$	24					(79,575)						$	(7,866)
Net income			—						—						360						—						—						—
Common dividends ($0.87 per share)			—						—						(248)						—						—						—
Preferred dividends			—						—						(23)						—						—						—
Issuance of shares under employee and other plans, net			—						(9)						—						—						122						5
Share-based compensation			—						50						—						—						—						—
Common stock held in trusts, net (a)			—						(24)						—						—						9						24
Spin-off of Embecta			—						—						583						—						—						—
Balance at June 30, 2022			$	365					$	19,511					$	15,088					$	24					(79,445)						$	(7,836)

(a)Common stock held in trusts consists of the Company’s shares held in rabbi trusts in connection with deferred compensation under the Company’s employee salary and bonus deferral plan and directors’ deferral plan. During the second quarter of fiscal year 2022, the common stock held in trusts was temporarily replaced with the Company’s Series C preferred shares to adhere to trust requirements until the Company’s spin-off of its Diabetes Care business was completed on April 1, 2022.

(b)In accordance with their terms, 1.500 million mandatory convertible preferred shares that were issued in May 2020 were converted into 5.955 million shares of BD common stock on the mandatory conversion date of June 1, 2023.

(c)Represents shares received upon final settlement of an accelerated share repurchase agreement, and the related forward sale contract, entered into during the fourth quarter of fiscal year 2021. The share repurchases were made pursuant to the repurchase program authorized by the Board of Directors on September 24, 2013 for 10 million shares, which has been fully utilized. In November 2021, the Board of Directors authorized the Company to repurchase up to an additional 10 million shares of BD common stock, for which there is also no expiration date.

The components and changes of Accumulated other comprehensive income (loss) for the first three quarters of fiscal years 2023 and 2022 were as follows:

(Millions of dollars)			Total						Foreign Currency Translation						Benefit Plans						Cash Flow Hedges
Balance at September 30, 2022			$	(1,488)					$	(987)					$	(574)					$	75
Other comprehensive loss before reclassifications, net of taxes			(84)						(80)						—						(4)
Amounts reclassified into income, net of taxes			12						—						11						1
Balance at December 31, 2022			$	(1,559)					$	(1,067)					$	(563)					$	73
Other comprehensive loss before reclassifications, net of taxes			(29)						(21)						—						(8)
Amounts reclassified into income, net of taxes			13						—						11						2
Balance at March 31, 2023			$	(1,575)					$	(1,088)					$	(552)					$	67
Other comprehensive income before reclassifications, net of taxes			55						44						—						11
Amounts reclassified into income, net of taxes			13						—						11						2
Balance at June 30, 2023			$	(1,507)					$	(1,044)					$	(541)					$	79

(Millions of dollars)			Total						Foreign Currency Translation						Benefit Plans						Cash Flow Hedges
Balance at September 30, 2021			$	(2,088)					$	(1,292)					$	(784)					$	(10)
Other comprehensive income (loss) before reclassifications, net of taxes			34						41						—						(7)
Amounts reclassified into income, net of taxes			11						—						11						—
Balance at December 31, 2021			$	(2,043)					$	(1,251)					$	(774)					$	(17)
Other comprehensive income before reclassifications, net of taxes			122						78						—						44
Amounts reclassified into income, net of taxes			11						—						11						—
Balance at March 31, 2022			$	(1,910)					$	(1,173)					$	(763)					$	28
Other comprehensive (loss) income before reclassifications, net of taxes			(13)						(48)						—						35
Amounts reclassified into income, net of taxes			12						—						11						2
Spin-off of Embecta			251						251						—						—
Balance at June 30, 2022			$	(1,660)					$	(970)					$	(752)					$	64

The amounts of foreign currency translation recognized in other comprehensive income during the three and nine months ended June 30, 2023 and 2022 included net (losses) gains relating to net investment hedges. The amounts recognized in other comprehensive income relating to cash flow hedges during the three and nine months ended June 30, 2023 and 2022 are primarily related to forward starting interest rate swaps. Additional disclosures regarding amounts the Company recognized in other comprehensive income relating to cash flow hedges during the three and nine months ended June 30, 2023 and 2022 are provided in Note 12.

The tax impacts for amounts recognized in other comprehensive income (loss) before reclassifications and for reclassifications out of Accumulated other comprehensive income (loss) relating to benefit plans and cash flow hedges during the three and nine months ended June 30, 2023 and 2022 were immaterial to the Company's consolidated financial results.

Note 4 – Earnings per Share

The weighted average common shares used in the computations of basic and diluted earnings per share (shares in thousands) were as follows:

			Three Months Ended June 30,												Nine Months Ended June 30,
			2023						2022						2023						2022
Average common shares outstanding			286,317						285,441						284,830						285,121
Dilutive share equivalents from share-based plans			1,627						1,818						1,538						2,279
Dilutive share equivalents from Series C preferred shares (a)			—						38						—						31
Average common and common equivalent shares outstanding – assuming dilution			287,944						287,297						286,368						287,431
Share equivalents excluded from the diluted shares outstanding calculation:
Mandatory convertible preferred stock (b)			4,057						6,084						5,322						6,084
Share-based plans (c)			—						—						588						—

(a)Represents dilutive share equivalents from Series C preferred shares that temporarily replaced shares of common stock held in trusts to adhere to trust requirements until the Company’s spin-off of its Diabetes Care business on April 1, 2022 was completed.

(b)Excluded from the diluted shares outstanding calculation because the result would have been antidilutive.

(c)Excluded from the diluted earnings per share calculation as the exercise prices of these awards were greater than the average market price of the Company’s common shares.

Note 5 – Contingencies

The Company is involved, both as a plaintiff and a defendant, in various legal proceedings that arise in the ordinary course of business, including, without limitation, product liability and environmental matters in certain U.S. and international locations. Given the uncertain nature of litigation generally, the Company is not able, in all cases, to estimate the amount or range of loss that could result from an unfavorable outcome of litigation in which the Company is a party. In accordance with U.S. GAAP, the Company establishes accruals to the extent probable future losses are estimable (and in the case of environmental matters, without considering possible third-party recoveries). With respect to putative class action lawsuits in the United States and certain of the Canadian lawsuits described below, the Company is unable to estimate a range of reasonably possible losses for the following reasons: (i) all or certain of the proceedings are in early stages; (ii) the Company has not received and reviewed complete information regarding all or certain of the plaintiffs and their medical conditions; and/or (iii) there are significant factual issues to be resolved. In addition, there is uncertainty as to the likelihood of a class being certified or the ultimate size of any class. With respect to the civil investigative demands (“CIDs”) served by the Department of Justice which are discussed below, the Company is unable to estimate a range of reasonably possible losses for the following reasons: (i) all or certain of the proceedings are in early stages; and/or (ii) there are significant factual and legal issues to be resolved.

Product Liability Matters

As of June 30, 2023, the Company is defending approximately 34,285 product liability claims involving the Company’s line of hernia repair devices (collectively, the “Hernia Product Claims”). The Company’s outstanding Hernia Product Claims as of September 30, 2022 were approximately 31,445. The Company’s outstanding product liability claims represent nonhomogeneous populations of claims which vary widely based upon various factors, most notably the quality of the claims. As such, claim activity during any given period may not necessarily be indicative of the Company’s ultimate liability under a mass tort matter. As further discussed below, the Company’s underlying estimate of its product liability includes and already accounts for unfiled claims and as such, the net year-to-date change in the number of outstanding Hernia Product Claims did not materially impact the Company’s product liability accrual as of June 30, 2023. The majority of the outstanding claims are currently pending in a coordinated proceeding in Rhode Island State Court (“RI”) and in a federal multi-district litigation (“MDL”) established in the Southern District of Ohio, but claims are also pending in other state and/or federal court jurisdictions. In addition, outstanding claims include multiple putative class actions in Canada. Generally, the Hernia Product Claims seek damages for personal injury allegedly resulting from use of the products. From time to time, the Company engages in resolution discussions with plaintiffs’ law firms regarding certain of the Hernia Product Claims, but the Company also intends to vigorously defend Hernia Product Claims that do not settle, including through litigation.

• The first bellwether trial in the hernia MDL resulted in a complete defense verdict in favor of the Company in

September 2021.

• The second hernia MDL bellwether resulted in a $255 thousand verdict in April 2022.

• The first bellwether trial in RI resulted in a $4.8 million verdict in August 2022, which the Company is appealing.

Trials are currently scheduled in state and/or federal courts, including additional bellwether trials in the MDL in October 2023 and January 2024. The Company also expects additional trials of Hernia Product Claims to take place over the next 12 months in RI, including trials in September 2023 and January 2024.

The Company also continues to be a defendant in certain other mass tort litigation. As of June 30, 2023, the Company is defending product liability claims involving the Company’s line of pelvic mesh products, the majority of which are pending in a coordinated proceeding in New Jersey Superior Court and in various federal court jurisdictions. Also, as of June 30, 2023, the Company is defending product liability claims involving the Company’s line of inferior vena cava (“IVC”) filter products. The majority of those claims are pending in various federal court jurisdictions after having been remanded from the MDL in the United States District Court for the District of Arizona.

In most product liability litigations like those described above, plaintiffs allege a wide variety of claims, ranging from allegations of serious injury caused by the products to efforts to obtain compensation notwithstanding the absence of any injury. In many of these cases, the Company has not yet received and reviewed complete information regarding the plaintiffs and their medical conditions and, consequently, is unable to fully evaluate the claims. The Company expects that it will receive and review additional information regarding any remaining unsettled product liability matters.

Other Legal Matters

On February 27, 2020, a putative class action captioned Kabak v. Becton, Dickinson and Company, et al., Civ. No. 2:20-cv-02155 (SRC) (CLW), now captioned Industriens Pensionsforsikring v. Becton, Dickinson and Company, et al., was filed in the U.S. District Court for the District of New Jersey against the Company and certain of its officers. The complaint, which purports to be brought on behalf of all persons (other than defendants) who purchased or otherwise acquired the Company's common stock from November 5, 2019 through February 5, 2020, asserts claims for purported violations of Sections 10 and 20 of the Securities Exchange Act of 1934 (“Exchange Act”) and Securities and Exchange Commission (“SEC”) Rule 10b-5 promulgated thereunder, and seeks, among other things, damages and costs. The complaint alleges that defendants concealed certain material information regarding AlarisTM infusion pumps, allegedly rendering certain public statements about the Company’s business, operations and prospects false or misleading, thereby allegedly causing investors to purchase stock at an inflated price. After an initial without prejudice dismissal, the plaintiff filed amended pleadings, which the Company in turn moved to dismiss. Ultimately, the court permitted certain aspects of the case to proceed. An answer with affirmative defenses was thereafter filed on October 3, 2022. The court has also permitted claims to be asserted on behalf of option holders. Discovery has commenced and plaintiff’s motion for class certification was filed on January 17, 2023. That motion is fully briefed and under review by the court. The Company believes that it has strong defenses to the allegations that were not dismissed, and it intends to defend itself vigorously.

On November 2, 2020, a putative shareholder derivative action captioned Jankowski v. Forlenza, et al., Civ. No. 2:20-cv-15474, was filed in the U.S. District Court for the District of New Jersey by a shareholder, derivatively on behalf of the Company, against certain of the Company’s directors and officers. The complaint asserts claims for breach of fiduciary duty, violations of sections 10(b), 14(a) and 21D of the Exchange Act, and insider trading. The complaint principally alleges that the Company made misleading statements regarding AlarisTM infusion pumps in a proxy statement and other SEC filings. A second derivative action was filed on January 24, 2021, and the two actions were consolidated. In March 2021, the Company received letters from two additional shareholders which, in general, mirrored the allegations in the derivative actions, and demanded, among other things, that the Board of Directors pursue claims against members of management for claimed breaches of fiduciary duties. Consistent with New Jersey law, the Board appointed a special committee to review the allegations and demands in the derivative actions and demand letters. Following an investigation, the special committee determined that no action was warranted, and rejected the shareholders’ demands, communicating its determination to counsel for the shareholders. On January 10, 2023, one of the two shareholders referenced above filed a separate derivative action that: (i) is generally consistent with the shareholder letter and the two prior actions; and (ii) purports to challenge the reasonableness of the special committee’s process and determination. The Company believes that is has strong defenses to these claims and intends to defend itself vigorously.

Beginning in February 2021, the Company received subpoenas from the Enforcement Division of the SEC requesting information from the Company relating to, among other things, AlarisTM infusion pumps. The Company is cooperating with the SEC and responding to these requests, including requests for employee interviews and depositions. The Company cannot anticipate the timing, scope, outcome or possible impact of the investigation, financial or otherwise.

In April 2019, the Department of Justice served the Company and CareFusion with CIDs seeking information regarding certain of CareFusion’s contracts with the Department of Veteran’s Affairs for certain products, including AlarisTM and PyxisTM devices, in connection with a civil investigation of possible violations of the False Claims Act, and the government later expanded the investigation to include several additional contracts. The government has made several requests for documents and interviews or depositions of Company personnel. The Company is cooperating with the government and responding to these requests.

In September 2021, the Company received a CID related to an inquiry initiated by the Northern District of Georgia in 2018. The requests concern sales and marketing practices with respect to certain aspects of the Company’s urology business. The government has made requests for documents and has interviewed employees. The inquiry is ongoing and the Company is cooperating with the government and responding to its requests. The Company and the government have agreed to mediation in an effort to resolve this dispute.

In April 2023, the Department of Justice served the Company with a CID seeking information regarding the Company’s GenesisTM container products in connection with an investigation of possible violations of the False Claims Act. The government has made requests for documents and the Company is cooperating with the government and responding to its requests.

In September 2021, the Company was served with a complaint from the New Mexico Attorney General, alleging violations of the state’s consumer protection laws in connection with the sales and marketing of its IVC filters. The Company’s motion to dismiss certain of the claims was granted on May 10, 2022 and discovery is proceeding as to the remaining claims. The Company intends to vigorously defend itself in the litigation. As the case is in its early stages, the Company cannot anticipate the timing, scope, outcome or possible impact at present.

The Company was sued in state and federal courts in Georgia by plaintiffs who work or reside near Company facilities in Covington, GA, where ethylene oxide (“EtO”) sterilization activities take place. The federal cases have been dismissed and refiled in state court. The plaintiffs in the cases seek compensatory and punitive damages. Pursuant to Georgia statute, punitive damages in these cases are generally capped at $250,000 per claimant. The cases allege a variety of injuries, including but not limited to multiple types of cancer, allegedly attributable to exposure to EtO. The Company does not believe these cases are appropriate for class action treatment and they have not been filed as such. The Company currently has approximately 225 of such suits involving approximately 325 plaintiffs; approximately 45 of the cases also allege injury caused by exposure to a chemical of another defendant entirely unrelated to the Company. Three trial dates have been set in 2024. The Company has meritorious defenses and intends to defend itself vigorously.

The Company is also involved both as a plaintiff and a defendant in other legal proceedings and claims that arise in the ordinary course of business. The Company believes that it has meritorious defenses to these suits pending against the Company and is engaged in a vigorous defense of each of these matters.

The Company cannot predict the outcome of these other legal matters discussed above, nor can it predict whether any outcome will have a material adverse effect on the Company’s consolidated results of operations and/or consolidated cash flows. Accordingly, the Company has made no provisions for these other legal matters in its consolidated results of operations.

The Company is a potentially responsible party to a number of federal administrative proceedings in the United States brought under the Comprehensive Environment Response, Compensation and Liability Act, also known as “Superfund,” and similar state laws. The Company also is subject to administrative proceedings under environmental laws in jurisdictions outside the U.S. The affected sites are in varying stages of development. In some instances, the remedy has been completed, while in others, environmental studies are underway or commencing. For several sites, there are other potentially responsible parties that may be jointly or severally liable to pay all or part of cleanup costs. While it is not feasible to predict the outcome of these proceedings, based upon the Company’s experience, current information and applicable law, the Company does not expect these proceedings to have a material adverse effect on its consolidated results of operations and/or consolidated cash flows.

Litigation Accruals

The Company regularly monitors and evaluates the status of product liability and other litigated matters, and may, from time-to-time, engage in settlement discussions and mediation, taking into consideration, among other things, developments in the litigation and the risks and uncertainties associated therewith. These activities have resulted in confidential settlements and going forward could result in further settlements, the terms of which would be confidential. A determination of the accrual amounts for these contingencies is made after analysis of each litigation matter. When appropriate, the accrual is developed with the consultation of outside counsel and, in the case of certain mass tort litigation, actuarial specialists regarding the nature, timing, and extent of each matter.

The Company considers relevant information when estimating its product liability accruals, including, but not limited to: the nature, number, and quality of unfiled and filed claims; the rate of claims being filed; the status of settlement discussions with plaintiffs’ counsel; the allegations and documentation supporting or refuting such allegations; publicly available information regarding similar medical device mass tort settlements; historical information regarding other product liability settlements involving the Company; and the stage of litigation. Because currently available information regarding product liability matters is often limited, there is inherent uncertainty and volatility relating to the Company’s estimate of product liability. As additional information becomes available, the Company records adjustments to its product liability accruals as required.

Accruals for the Company's product liability claims which are discussed above, as well as the related legal defense costs, amounted to approximately $1.9 billion and $2.1 billion on June 30, 2023 and September 30, 2022, respectively. These accruals, which are generally long-term in nature, are largely recorded within Deferred Income Taxes and Other Liabilities on the Company's condensed consolidated balance sheets. The decrease in the Company’s product liability accrual as of June 30, 2023, as compared with September 30, 2022, largely reflected the payment of settlements and legal fees during the fiscal year 2023, which reduced the amount of the accrual. The increase in the number of outstanding hernia repair device claims discussed above did not materially impact the Company’s product liability accrual because the underlying estimate of the Company’s liability includes and already accounts for unfiled claims. Moreover, the accrual reflects the determination that the quality of new hernia repair device claims has generally diminished over time. Claim activity during the fiscal year 2023 relating to the pelvic mesh device and IVC filter matters did not materially impact the Company’s product liability accrual as of June 30, 2023.

Additionally, while the outcomes in the bellwether trials are noted above, the particular outcome in any one product liability trial is typically not representative of potential outcomes of all cases or claims. Because the accrual already contemplates a wide range of possible outcomes, including those with a de minimis value, individual outcomes generally do not impact the value of other cases in the total case inventory or the overall product liability accrual.

In view of the uncertainties discussed above, the Company could incur charges in excess of any currently established accruals and, to the extent available, liability insurance. In the opinion of management, any such future charges, individually or in the aggregate, could have a material adverse effect on the Company’s consolidated results of operations, financial condition, and/or consolidated cash flows.

Note 6 – Revenues

The Company’s policies for recognizing sales have not changed from those described in the Company’s 2022 Annual Report on Form 10-K. The Company sells a broad range of medical supplies, devices, laboratory equipment and diagnostic products which are distributed through independent distribution channels and directly by BD through sales representatives. End-users of the Company's products include healthcare institutions, physicians, life science researchers, clinical laboratories, the pharmaceutical industry and the general public.

Measurement of Revenues

The Company’s allowance for doubtful accounts reflects the current estimate of credit losses expected to be incurred over the life of its trade receivables. Such estimated credit losses are determined based on historical loss experiences, customer-specific credit risk, and reasonable and supportable forward-looking information, such as country or regional risks that are not captured in the historical loss information. The allowance for doubtful accounts for trade receivables is not material to the Company's consolidated financial results.

The Company's gross revenues are subject to a variety of deductions which are recorded in the same period that the underlying revenues are recognized. Such variable consideration includes rebates, sales discounts and sales returns. The Company’s rebate liability at June 30, 2023 and September 30, 2022 was $555 million and $525 million, respectively. The impact of other forms of variable consideration, including sales discounts and sales returns, is not material to the Company's revenues.

Effects of Revenue Arrangements on Consolidated Balance Sheets

Capitalized contract costs associated with the costs to fulfill contracts for certain products in the Medication Management Solutions organizational unit are immaterial to the Company's condensed consolidated balance sheets. Commissions relating to revenues recognized over a period longer than one year are recorded as assets which are amortized over the period over which the revenues underlying the commissions are recognized. Capitalized contract costs related to such commissions are immaterial to the Company's condensed consolidated balance sheets.

Contract liabilities for unearned revenue that is allocable to performance obligations, such as extended warranty and software maintenance contracts, which are performed over time are immaterial to the Company's consolidated financial results. The

Company's liability for product warranties provided under its agreements with customers is not material to its condensed consolidated balance sheets.

Remaining Performance Obligations

The Company's obligations relative to service contracts and pending installations of equipment, primarily in the Company's Medication Management Solutions unit, represent unsatisfied performance obligations of the Company. The revenues under existing contracts with original expected durations of more than one year, which are attributable to products and/or services that have not yet been installed or provided are estimated to be approximately $2.5 billion at June 30, 2023. The Company expects to recognize the majority of this revenue over the next three years.

Within the Company's Medication Management Solutions, Medication Delivery Solutions, Integrated Diagnostic Solutions, and Biosciences units, some contracts also contain minimum purchase commitments of reagents or other consumables, and the future sales of these consumables represent additional unsatisfied performance obligations of the Company. The revenue attributable to the unsatisfied minimum purchase commitment-related performance obligations, for contracts with original expected durations of more than one year, is estimated to be approximately $2.1 billion at June 30, 2023. This revenue will be recognized over the customer relationship periods.

Disaggregation of Revenues

A disaggregation of the Company's revenues by segment, organizational unit and geographic region is provided in Note 7.

Note 7 – Segment Data

The Company's organizational structure is based upon three worldwide business segments: BD Medical (“Medical”), BD Life Sciences (“Life Sciences”) and BD Interventional (“Interventional”). The Company's segments are strategic businesses that are managed separately because each one develops, manufactures and markets distinct products and services. Segment disclosures are on a performance basis consistent with internal management reporting. The Company evaluates performance of its business segments and allocates resources to them primarily based upon segment operating income, which represents revenues reduced by product costs and operating expenses. Revenues and operating income from the Diabetes Care business prior to its spin-off are included in Income from Discontinued Operations, Net of Tax. See Note 2 for further information.

Revenues by segment, organizational unit and geographical areas for the three and nine-month periods are detailed below. The Company has no material intersegment revenues.

			Three Months Ended June 30,
(Millions of dollars)			2023																		2022
			United States						International						Total						United States						International						Total
Medical
Medication Delivery Solutions			$	628					$	459					$	1,086					$	621					$	439					$	1,061
Medication Management Solutions			587						167						754						463						144						607
Pharmaceutical Systems			186						408						594						135						388						523
Total segment revenues			$	1,400					$	1,033					$	2,434					$	1,219					$	971					$	2,191
Life Sciences
Integrated Diagnostic Solutions			$	398					$	460					$	858					$	499					$	461					$	961
Biosciences			148						220						368						147						201						348
Total segment revenues			$	546					$	680					$	1,226					$	646					$	663					$	1,309
Interventional
Surgery			$	298					$	90					$	388					$	274					$	77					$	352
Peripheral Intervention			256						225						481						255						208						463
Urology and Critical Care			272						77						349						248						79						326
Total segment revenues			$	826					$	392					$	1,218					$	777					$	364					$	1,142
Total Company revenues from continuing operations			$	2,772					$	2,106					$	4,878					$	2,643					$	1,998					$	4,641

			Nine Months Ended June 30,
(Millions of dollars)			2023																		2022
			United States						International						Total						United States						International						Total
Medical
Medication Delivery Solutions			$	1,863					$	1,332					$	3,195					$	1,831					$	1,375					$	3,207
Medication Management Solutions			1,701						483						2,184						1,408						430						1,838
Pharmaceutical Systems			478						1,092						1,570						363						1,057						1,420
Total segment revenues			$	4,042					$	2,907					$	6,949					$	3,602					$	2,863					$	6,465
Life Sciences
Integrated Diagnostic Solutions			$	1,327					$	1,371					$	2,699					$	1,732					$	1,524					$	3,255
Biosciences			444						660						1,104						405						617						1,022
Total segment revenues			$	1,772					$	2,031					$	3,803					$	2,136					$	2,140					$	4,277
Interventional
Surgery			$	880					$	252					$	1,131					$	824					$	229					$	1,053
Peripheral Intervention			748						635						1,383						712						615						1,327
Urology and Critical Care			794						225						1,019						740						247						987
Total segment revenues			$	2,421					$	1,112					$	3,533					$	2,276					$	1,091					$	3,367
Total Company revenues from continuing operations			$	8,235					$	6,050					$	14,285					$	8,014					$	6,095					$	14,109

Segment income for the three and nine-month periods was as follows:

			Three Months Ended June 30,												Nine Months Ended June 30,
(Millions of dollars)			2023						2022						2023						2022
Income from Continuing Operations Before Income Taxes
Medical (a)			$	588					$	573					$	1,783					$	1,587
Life Sciences			343						414						1,171						1,366
Interventional			323						293						922						826
Total Segment Operating Income			1,254						1,280						3,875						3,778
Acquisition-related integration and restructuring expense			(70)						(36)						(175)						(99)
Net interest expense			(95)						(94)						(299)						(285)
Other unallocated items (b)			(618)						(728)						(1,920)						(1,932)
Total Income from Continuing Operations Before Income Taxes			$	471					$	421					$	1,481					$	1,463

(a)The amounts include charges recorded to Cost of products sold of $90 million for the three and nine months ended June 30, 2023 and $41 million for the nine months ended June 30, 2022 to adjust estimated future product remediation costs. The amount for the nine months ended June 30, 2022 also includes a charge of $54 million recorded to Cost of products sold to write down the carrying value of certain fixed assets in the Pharmaceutical Systems unit.

(b)Primarily comprised of foreign exchange, certain general and administrative expenses and share-based compensation expense.

Note 8 – Benefit Plans

The Company has defined benefit pension plans covering certain employees in the United States and certain international locations. The measurement date used for these plans is September 30.

Net pension cost included the following components for the three and nine-month periods:

			Three Months Ended June 30,												Nine Months Ended June 30,
(Millions of dollars)			2023						2022						2023						2022
Service cost			$	24					$	38					$	71					$	106
Interest cost			35						21						103						59
Expected return on plan assets			(38)						(52)						(112)						(146)
Amortization of prior service credit			(2)						(4)						(5)						(12)
Amortization of loss			17						17						49						48
Curtailment/settlement (gain) loss			(14)						(1)						(13)						5
Net pension cost			$	22					$	19					$	92					$	61

The amounts provided above for amortization of prior service credit and amortization of loss represent the reclassifications of prior service credits and net actuarial losses that were recognized in Accumulated other comprehensive income (loss) in prior periods. All components of the Company’s net periodic pension and postretirement benefit costs, aside from service cost, are recorded to Other income (expense), net on its condensed consolidated statements of income.

The Company has announced that effective September 30, 2024, it will freeze its U.S. pension plan and plan participants will no longer accrue benefits under the plan subsequent to this date.

Note 9 – Divestiture

The Company completed the sale of its Interventional segment's Surgical Instrumentation platform in August 2023 pursuant to a definitive agreement that was signed in June 2023. Assets held for sale on the condensed consolidated balance sheet at June 30, 2023, subject to this agreement, were approximately $271 million. The Company received gross proceeds of approximately $540 million, which are subject to post-closing adjustments. The historical financial results for the Surgical Instrumentation platform have not been classified as a discontinued operation. Revenues attributable to the platform for the three and nine months ended June 30, 2023 were approximately $43 million and $126 million, respectively, and approximately $40 million and $123 million for the three and nine months ended June 30, 2022, respectively.

Note 10 – Business Restructuring Charges

The Company incurred restructuring costs during the nine months ended June 30, 2023, primarily in connection with the Company's simplification and other cost saving initiatives, which were recorded within Acquisition-related integration and restructuring expense. These simplification and other costs saving initiatives are focused on reducing complexity, enhancing product quality, refining customer experience, and improving cost efficiency across all of the Company’s segments.

Restructuring liability activity for the nine months ended June 30, 2023 was as follows:

(Millions of dollars)			Employee Termination						Other (a)						Total
Balance at September 30, 2022			$	24					$	11					$	35
Charged to expense			46						74						120
Cash payments			(25)						(72)						(97)
Non-cash settlements			—						(14)						(14)
Other adjustments			—						1						1
Balance at June 30, 2023			$	45					$	—					$	45

(a) Expense primarily relates to other costs associated with the execution of the Company’s cost efficiency and restructuring programs, such as incremental project management costs and asset write-offs.

Note 11 – Intangible Assets

Intangible assets consisted of:

			June 30, 2023																		September 30, 2022
(Millions of dollars)			Gross Carrying Amount						Accumulated Amortization						Net Carrying Amount						Gross Carrying Amount						Accumulated Amortization						Net Carrying Amount
Amortized intangible assets
Developed technology			$	15,105					$	(6,770)					$	8,335					$	15,087					$	(5,979)					$	9,108
Customer relationships			4,861						(2,435)						2,426						4,853						(2,170)						2,683
Patents, trademarks and other			1,120						(614)						506						1,046						(574)						473
Amortized intangible assets			$	21,087					$	(9,820)					$	11,267					$	20,987					$	(8,723)					$	12,264
Unamortized intangible assets
Acquired in-process research and development			$	44																	$	44
Trademarks			2																		2
Unamortized intangible assets			$	46																	$	46

Intangible amortization expense for the three months ended June 30, 2023 and 2022 was $367 million and $357 million, respectively. Intangible amortization expense for the nine months ended June 30, 2023 and 2022 was $1.098 billion and $1.064 billion, respectively.

The following is a reconciliation of goodwill by business segment:

(Millions of dollars)			Medical						Life Sciences						Interventional						Total
Goodwill as of September 30, 2022			$	10,909					$	888					$	12,824					$	24,621
Divestitures and related adjustments (a)			—						—						(218)						(218)
Purchase price allocation adjustments (b)			13						—						—						13
Currency translation			59						13						95						167
Goodwill as of June 30, 2023			$	10,981					$	901					$	12,702					$	24,584

(a) Represents goodwill reclassified to Assets held for sale in connection with the Company's agreement to sell its Surgical Instrumentation platform, as further discussed in Note 9.

(b) The purchase price allocation adjustments were primarily driven by an adjustment to tax-related balances recorded upon the finalization of the Parata acquisition allocation within one year of the transaction's closing.

Note 12 – Derivative Instruments and Hedging Activities

The Company uses derivative instruments to mitigate certain exposures. The Company does not enter into derivative financial instruments for trading or speculative purposes. The effects these derivative instruments and hedged items had on the Company’s balance sheets and the fair values of the derivatives outstanding at June 30, 2023 and September 30, 2022 were not material. The effects on the Company’s financial performance and cash flows are provided below.

Foreign Currency Risks and Related Strategies

The Company has foreign currency exposures throughout Europe, Greater Asia, Canada and Latin America. Transactional currency exposures that arise from entering into transactions, generally on an intercompany basis, in non-hyperinflationary countries that are denominated in currencies other than the functional currency are mitigated primarily through the use of forward contracts. In order to mitigate foreign currency exposure relating to its investments in certain foreign subsidiaries, the Company has hedged the currency risk associated with those investments with certain instruments, such as foreign currency-denominated debt and cross-currency swaps, which are designated as net investment hedges, as well as currency exchange contracts.

The notional amounts of the Company’s foreign currency-related derivative instruments as of June 30, 2023 and September 30, 2022 were as follows:

(Millions of dollars)			Hedge Designation						June 30, 2023						September 30, 2022
Foreign exchange contracts (a)			Undesignated						$	1,731					$	2,766
Foreign currency-denominated debt (b)			Net investment hedges						1,524						2,140
Cross-currency swaps (c)			Net investment hedges						2,119						910

(a)Represent hedges of transactional foreign exchange exposures resulting primarily from intercompany payables and receivables. Gains and losses on these instruments are recognized immediately in income. These gains and losses are largely offset by gains and losses on the underlying hedged items, as well as the hedging costs associated with the derivative instruments. Net amounts recognized in Other income (expense), net, during the three and nine months ended June 30, 2023 and 2022 were immaterial to the Company's consolidated financial results.

(b)Represents foreign currency-denominated long-term notes outstanding which were effective as economic hedges of net investments in certain of the Company's foreign subsidiaries.

(c)Represents cross-currency swaps which were effective as economic hedges of net investments in certain of the Company's foreign subsidiaries.

Net gains or losses relating to the net investment hedges, which are attributable to changes in the foreign currencies to U.S. dollar spot exchange rates, are recorded as accumulated foreign currency translation in Other comprehensive income (loss). Upon the termination of a net investment hedge, any net gain or loss included in Accumulated other comprehensive income (loss) relative to the investment hedge remains until the foreign subsidiary investment is disposed of or is substantially liquidated.

Net (losses) gains recorded to Accumulated other comprehensive income (loss) relating to the Company's net investment hedges for the three and nine-month periods were as follows:

			Three Months Ended June 30,												Nine Months Ended June 30,
(Millions of dollars)			2023						2022						2023						2022
Foreign currency-denominated debt			$	(14)					$	99					$	(178)					$	193
Cross-currency swaps (a)			(18)						84						$	(119)					$	129

(a) The amounts for the nine months ended June 30, 2023 include a gain, net of tax, of $13 million recognized on terminated cross-currency swaps.

Interest Rate Risks and Related Strategies

The Company uses a mix of fixed and variable rate debt to manage its interest rate exposure, and periodically uses interest rate swaps to manage such exposures. Under these interest rate swaps, the Company exchanges, at specified intervals, the difference between fixed and floating interest amounts calculated by reference to an agreed-upon notional principal amount. These swaps are designated as either cash flow or fair value hedges.

Changes in the fair value of the interest rate swaps designated as cash flow hedges (i.e., hedging the exposure to variability in expected future cash flows that is attributable to a particular risk) are recorded in Other comprehensive income (loss). If interest rate derivatives designated as cash flow hedges are terminated, the balance in Accumulated other comprehensive income (loss) attributable to those derivatives is reclassified into earnings, within Interest expense, over the remaining life of the hedged debt. The amounts reclassified from accumulated other comprehensive income relating to cash flow hedges during the three and nine months ended June 30, 2023 and 2022, as well as the amounts expected to be reclassified within the next 12 months, are not material to the Company's consolidated financial results.

Net after-tax gains (losses) recorded in Other comprehensive income relating to interest rate cash flow hedges during the three and nine months ended June 30, 2023 were immaterial to the Company’s consolidated financial results and were $37 million and $77 million during the three and nine months ended June 30, 2022, respectively. The gains recorded during the prior year’s three and nine-month periods were driven by a net after-tax gain of $41 million that was realized upon the Company’s termination of $500 million of forward starting interest rate swaps.

For interest rate swaps designated as fair value hedges (i.e., hedges against the exposure to changes in the fair value of an asset or a liability or an identified portion thereof that is attributable to a particular risk), changes in the fair value of the interest rate

swaps offset changes in the fair value of the fixed rate debt due to changes in market interest rates. Amounts recorded during the three and nine months ended June 30, 2023 and 2022 were immaterial to the Company's consolidated financial results.

The notional amounts of the Company’s interest rate-related derivative instruments as of June 30, 2023 and September 30, 2022 were as follows:

(Millions of dollars)			Hedge Designation						June 30, 2023						September 30, 2022
Interest rate swaps (a)			Fair value hedges						$	700					$	700
Forward starting interest rate swaps (b)			Cash flow hedges						500						500

(a)Represents fixed-to-floating interest rate swap agreements the Company entered into to convert the interest payments on certain long-term notes from the fixed rate to a floating interest rate based on secured overnight financing rates (“SOFR”), which replaced LIBOR rates in the third quarter of fiscal year 2023.

(b)Represents interest rate derivatives entered into to mitigate exposure to interest rate risk related to future debt issuances.

Other Risk Exposures

The Company purchases resins, which are oil-based components used in the manufacture of certain products. Significant increases in world oil prices that lead to increases in resin purchase costs could impact future operating results. From time to time, the Company has managed price risks associated with these commodity purchases through commodity derivative forward contracts. The Company's commodity derivative forward contracts at June 30, 2023 and September 30, 2022 were immaterial to the Company's consolidated financial results.

Note 13 – Financial Instruments and Fair Value Measurements

The following reconciles cash and equivalents and restricted cash reported within the Company's condensed consolidated balance sheets at June 30, 2023 and September 30, 2022 to the total of these amounts shown on the Company's condensed consolidated statements of cash flows:

(Millions of dollars)			June 30, 2023						September 30, 2022
Cash and equivalents			$	923					$	1,006
Restricted cash			101						153
Cash and equivalents and restricted cash			$	1,024					$	1,159

Cash equivalents consist of all highly liquid investments with a maturity of three months or less at time of purchase. Restricted cash consists of cash restricted from withdrawal and usage except for certain product liability matters.

The fair values of the Company’s financial instruments are as follows:

(Millions of dollars)			Basis of fair value measurement						June 30, 2023						September 30, 2022
Institutional money market accounts (a)			Level 1						$	100					$	1
Current portion of long-term debt (b)			Level 2						1,554						1,927
Long-term debt (b)			Level 2						13,457						12,119

(a)These financial instruments are recorded within Cash and equivalents on the condensed consolidated balance sheets. The institutional money market accounts permit daily redemption. The fair values of these investments are based upon the quoted prices in active markets provided by the holding financial institutions.

(b)Long-term debt is recorded at amortized cost. The fair value of long-term debt is measured based upon quoted prices in active markets for similar instruments.

Short-term investments are held to their maturities and are carried at cost, which approximates fair value. The short-term investments consist of instruments with maturities greater than three months and less than one year. All other instruments measured by the Company at fair value, including derivatives and contingent consideration liabilities, are immaterial to the Company's condensed consolidated balance sheets.

Nonrecurring Fair Value Measurements

In the third quarter of fiscal year 2022, the Company recorded non-cash asset impairment charges of $11 million to Cost of products sold in the Life Sciences segment and $19 million to Acquisition-related integration and restructuring expense in the

Medical segment. In the second quarter of fiscal year 2022, the Company recorded a noncash asset impairment charge of $54 million to Cost of products sold in the Medical segment. These impairment charges were recorded to adjust the carrying amount of assets to the assets' fair values, which were estimated, based upon a market participant's perspective, using Level 3 inputs, including values estimated using the income approach.

Transfers of trade receivables

Over the normal course of its business activities, the Company transfers certain trade receivable assets to third parties under factoring agreements. Per the terms of these agreements, the Company surrenders control over its trade receivables upon transfer. Accordingly, the Company accounts for the transfers as sales of trade receivables by recognizing an increase to Cash and equivalents and a decrease to Trade receivables, net when proceeds from the transactions are received. The costs incurred by the Company in connection with factoring activities were not material to its consolidated financial results. The amounts transferred and yet to be remitted under factoring arrangements are provided below.

			Three Months Ended June 30,												Nine Months Ended June 30,
(Millions of dollars)			2023						2022						2023						2022
Trade receivables transferred to third parties under factoring arrangements			$	762					$	215					$	2,252					$	650

			June 30, 2023						September 30, 2022
Amounts yet to be collected and remitted to the third parties			$	345					$	323

Note 14 – Debt

In February 2023, the Company issued $800 million of 4.693% notes due February 13, 2028. Also in February 2023, Becton Dickinson Euro Finance S.à r.l., a private limited liability company (société à responsabilité limitée), which is an indirect, wholly-owned finance subsidiary of the Company, issued €800 million ($868 million) of 3.553% Euro-denominated notes due September 13, 2029 (the “BD Finance Notes”). The BD Finance Notes are fully and unconditionally guaranteed on a senior unsecured basis by the Company. No other of the Company's subsidiaries provide any guarantees with respect to the BD Finance Notes. The indenture covenants included a limitation on liens and a restriction on sale and leasebacks, change of control and consolidation, merger and sale of assets covenants. These covenants are subject to a number of exceptions, limitations and qualifications. The indenture does not restrict the Company, Becton Dickinson Euro Finance S.à r.l., or any other of the Company's subsidiaries from incurring additional debt or other liabilities, including additional senior debt. Additionally, the indenture does not restrict Becton Dickinson Euro Finance S.à r.l. and the Company from granting security interests over its assets.