AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Policy quality-scores-2: six equally weighted categories. The overall score requires full coverage. Missing inputs are not zero. Qualitative grades are sourced interpretations, not probabilities. 6/6 · 18/10/2026
Moat50
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
structural advantage · 2/4 · Installation complexity, associated consumable utilization and actual licensing revenue support limited structural protection. Comparative superiority and portfolio-wide barriers remain unproven.
durability · 2/4 · Multi-year equipment support and diversified intellectual property support persistence, but patent expiration risks and realized technology impairments limit confidence in long-term protection.
customer dependency · 2/4 · Complex installations and higher infusion-set utilization indicate workflow dependency indirectly. The passages do not demonstrate exclusive compatibility, replacement costs or renewal rates.
erosion resilience · 2/4 · Continued infusion sales and positive pricing offsets show some resilience. Realized procurement pressure, remediation charges and warning-letter costs show that the advantages do not prevent erosion.
Pricing power44
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
realized pricing · 2/4 · Selective increases were implemented and pricing partially offset Interventional cost pressures in 2026. Government procurement and price controls have also unfavorably affected revenues; company-wide net pricing is not disclosed.
retention · 2/4 · Assessed indirectly from continued infusion-system demand, higher infusion-set utilization and multi-year support arrangements. These support repeat demand but do not establish retention following price increases.
margin resilience · 2/4 · Pricing absorbed part of actual Interventional cost pressure, but that segment's margin declined. Continuing operating income also fell despite revenue growth, with restructuring and transaction expenses affecting comparability. This is mixed resilience rather than proof of broad pricing strength.
contractual freedom · 1/4 · Realized effects from price regulation, tenders, volume-based procurement and government paybacks demonstrate constrained price-setting freedom in affected markets. Customer-level repricing clauses and the share of revenues subject to these constraints are missing.
Predictability93
Five consecutive annual periods. Equal weights: nondeclining revenue frequency; revenue-growth volatility (5–40pp); positive FCF frequency; FCF-margin volatility (3–20pp). Stability indicator, not a growth forecast.
- Nondeclining revenue years (%)
- 75.00
- Revenue growth volatility (pp)
- 5.51
- Positive FCF years (%)
- 100.00
- FCF margin volatility (pp)
- 3.20
Financial strength17
Equal-weight grades: debt/FCF (1–8x), net debt/earnings before interest and tax (0–5x), interest service (1–12x), current ratio (0.75–2x). Earnings use reported operating income, or reported pretax profit plus reported interest expense when operating income is unavailable. Interest service uses earnings/interest expense; if unavailable, it uses reported operating cash flow/cash interest paid, without relabeling cash paid as accrued expense. Nonpositive cash flow/earnings score 0 for their service component; reported zero interest with a positive numerator scores 100. Net cash scores 100 for net leverage. Missing disclosures remain unavailable. General nonfinancial-company rubric, not a credit rating; exceptional and nonoperating gains are not normalized out. IFRS finance-cost and cash-flow classifications retain their reported scope.
- debtFcfGrade
- 11.66
- netDebtEbitGrade
- 0.00
- interestCoverageGrade
- 29.16
- currentRatioGrade
- 29.07
- Debt / FCF (x)
- 7.18
- Net debt / operating income (x)
- 7.19
- Interest coverage (x)
- 4.21
- Current ratio (x)
- 1.11
Capital allocation79
Three-year equal-weight indicators: pretax return on average invested capital (0–25%; equity + debt − cash, each year and its prior year), share-count growth (0–5%, lower better), share-based cost/revenue (2–20%, lower better), consolidated FCF/net income (0–1x). Return uses reported operating income or, if unavailable, EBIT calculated from reported pretax profit plus reported interest expense; exceptional/nonoperating gains are not normalized out. Share-based cost uses the reported cash-flow add-back or, if absent, separately reported recognized compensation expense; the latter never becomes an FCF adjustment. Nonpositive net income scores 0 for cash conversion; absent income/FCF stays unavailable. Nonpositive invested capital has no defined return and remains unavailable. Does not establish acquisition quality or buyback timing.
- 3-year pre-tax operating return (%)
- 5.59
- 3-year average dilution (%)
- 0.31
- 3-year average SBC / revenue (%)
- 1.25
- cashConversionGrade
- 100.00
Management56
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
capital discipline · 2/4 · Nine-month continuing operating cash flow rose to $2.104 billion against $376 million of capital expenditure. Debt payments and $2.250 billion of repurchases followed a $3.857 billion spin-off distribution, broadly consistent with the earlier allocation commitment. However, distributions exceeded operating cash after capital spending, and $450 million of impairments evidence unsuccessful prior commitments. Repurchase value creation is not established.
incentive alignment · 2/4 · Actual 2025 equity awards include three-year ROIC and revenue conditions with a relative shareholder-return modifier, and actual annual awards were reduced for underperformance. Committee discretion and substantial adjusted-EPS exclusions weaken a stronger conclusion. Future vesting and executive ownership compliance are not established.
execution · 2/4 · Operating evidence supports continued infusion demand, improved continuing operating cash flow and a completed spin-off. These achievements are offset by lower continuing operating income, remediation costs, warning-letter costs and strategic impairments. Execution is assessed from these outcomes rather than management's growth ambitions.
governance · 3/4 · Disclosed shareholder rights, annual director elections and majority voting provide substantive governance protections, supported by an unqualified external internal-control opinion as of September 30, 2025. The CEO also chairs the board and is not independent. Nominee independence disclosures do not establish subsequent election outcomes, and these protections do not prove exceptional oversight effectiveness.
Evidence
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 when customer acceptance of these installed products has been confirmed.
Notes to financial statements — installation-dependent revenue recognition · Filed 25/11/2025
•Double-digit growth in sales of infusion systems, as well as higher utilization of infusion sets within the Medication Management Solutions unit, partially offset by an unfavorable comparison to stronger placements of dispensing solutions in 2023.
MD&A — fiscal 2024 infusion-system sales and infusion-set utilization · Filed 25/11/2025
•Growth in the Medication Management Solutions unit driven by continued strength in sales of infusion systems, partially offset by the timing of dispensing and pharmacy automation installations, based upon customer readiness, in the current year.
MD&A — fiscal 2025 Medication Management Solutions growth · Filed 25/11/2025
The majority of revenues relating to extended warranty contracts associated with certain instruments and equipment is generally recognized within a few years whereas deferred revenue relating to software maintenance contracts is generally recognized over a longer period.
Notes to financial statements — warranty and software-maintenance revenue periods · Filed 25/11/2025
Intellectual Property and Licenses BD owns significant intellectual property, including patents, patent applications, technology, trade secrets, know-how, copyrights and trademarks in the United States and other countries.
Business — intellectual property ownership · Filed 25/11/2025
In the aggregate, these intellectual property assets and licenses are of material importance to BD’s business.
Business — aggregate importance of intellectual property · Filed 25/11/2025
BD believes, however, that no single patent, technology, trademark, intellectual property asset or license is material in relation to BD’s business as a whole, or to any business segment.
Business — absence of dependence on a single intellectual property asset · Filed 25/11/2025
Periodically, the Company generates revenues attributable to licensing, which includes consideration received in exchange for the use of BD intellectual property by third parties.
Notes to condensed financial statements — licensing revenue · Filed 06/08/2026
Globally, governments in China and other countries continue to use various mechanisms to control healthcare expenditures, including increased use of competitive bidding and tenders, price regulation (such as volume-based procurement programs (“VoBP”)), government imposed payback provisions, and changes in reimbursement practices and policies on average selling prices for our products, which have unfavorably impacted our revenues and may continue to impact our results of operations in certain countries.
Risk factors — realized revenue effects of healthcare expenditure controls · Filed 25/11/2025
The amounts in the nine months ended June 30, 2026 and 2025 included charges of $57 million and $98 million, respectively, within Cost of products sold, to adjust future costs estimated for certain product remediation efforts, as well as charges related to various legal matters as discussed in Note 6.
Segment reconciliation notes — product remediation charges · Filed 06/08/2026
Three months ended June 30, Nine months ended June 30, (Millions of dollars) 2026 2025 2026 2025 Interventional segment income $ 565 $ 549 $ 1,704 $ 1,674 Segment income as % of Interventional revenues 39.9 % 41.3 % 41.5 % 43.5 % The Interventional segment's operating income as a percentage of revenues in the third quarter of 2026 compared with the third quarter of 2025 reflected the following: •Gross profit margin in the third quarter of 2026 was lower compared with the third quarter of 2025, which primarily reflected costs associated with certain actions required to respond to the El Paso Warning Letter, as further discussed in Note 6 in the Notes to Condensed Consolidated Financial Statements, and an unfavorable impact from tariffs.
MD&A — Interventional margins, El Paso Warning Letter costs and tariffs · Filed 06/08/2026
federal and state policies (affecting products such as pharmaceuticals and vaccines), changes in research and development efforts, investment or suspension by pharmaceuticals companies with regard to vaccine development, consolidation or strategic alliances among healthcare companies, distributors and/or payers of healthcare to improve their competitive position or develop new models for the delivery of healthcare, increased pricing pressure due to the impact of low-cost manufacturers, patents attained by competitors (particularly as patents on our products expire), new entrants into our markets, changes in the practice of medicine or the development of alternative therapies for disease states that may be delivered without a medical device.
Forward-looking risk discussion — low-cost competition, patent expiration and alternative therapies · Filed 06/08/2026
Non‑cash asset impairment charges of $450 million, relating to all of the Company’s reportable segments, were charged to expense during the second quarter of fiscal year 2026 upon the Company’s commitment to exit certain operational activities and projects which no longer align with and facilitate its current operational strategy, Excellence Unleashed.
Restructuring notes — realized asset impairments and operational exits · Filed 06/08/2026
Intangible assets consisted of: June 30, 2026 September 30, 2025 (Millions of dollars) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Amortized intangible assets Developed technology (a) $ 14,802 $ (9,142) $ 5,661 $ 15,079 $ (8,515) $ 6,564 Customer relationships 5,472 (3,561) 1,912 5,464 (3,258) 2,206 Patents, trademarks and other 1,049 (601) 448 1,032 (577) 456 Amortized intangible assets $ 21,323 $ (13,303) $ 8,020 $ 21,575 $ (12,350) $ 9,226 (a)The decrease in the carrying value as of June 30, 2026 included $134 million of non-cash asset impairment charges recorded during the second quarter of fiscal year 2026, which are further discussed in Notes 10 and 13.
Intangible assets note — developed-technology impairment · Filed 06/08/2026
These unfavorable impacts to gross margin were partially offset by pricing.
MD&A — pricing partially offsetting Interventional gross-margin pressures · Filed 06/08/2026
While we have implemented cost containment measures, progressed selective price increases and taken other actions to mitigate these inflationary pressures in our supply chain, we may not be able to completely offset all the increases in our operational costs.
Risk factors — implemented cost containment and selective price increases · Filed 25/11/2025
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, 2026 2025 2026 2025 Revenues $ 4,983 $ 4,726 $ 14,183 $ 13,539 Cost of products sold 2,668 2,491 7,662 7,646 Selling and administrative expense 1,261 1,163 3,703 3,435 Research and development expense 258 230 742 706 Integration, restructuring and transaction expense 89 96 729 277 Other operating expense, net 44 7 122 70 Total Operating Costs and Expenses 4,320 3,986 12,958 12,134 Operating Income 663 739 1,225 1,405 Interest expense (132) (152) (434) (458) Interest income 4 4 16 31 Other income (expense), net 19 (22) 97 (72) Income from Continuing Operations Before Income Taxes 554 569 904 906 Income tax provision 102 118 179 151 Net Income from Continuing Operations 451 451 725 755 (Loss) Income from Discontinued Operations, Net of Tax (74) 123 (276) 430 Net Income $ 377 $ 574 $ 449 $ 1,185 Basic Earnings per Share Income from Continuing Operations $ 1.64 $ 1.57 $ 2.59 $ 2.62 (Loss) Income from Discontinued Operations (0.27) 0.43 (0.99) 1.49 Basic Earnings per Share $ 1.37 $ 2.00 $ 1.60 $ 4.11 Diluted Earnings per Share Income from Continuing Operations $ 1.64 $ 1.57 $ 2.58 $ 2.62 (Loss) Income from Discontinued Operations (0.27) 0.43 (0.98) 1.49 Diluted Earnings per Share $ 1.37 $ 2.00 $ 1.59 $ 4.10 Dividends per Common Share $ 1.05 $ 1.04 $ 3.15 $ 3.12 Amounts may not add due to rounding.
Condensed consolidated statements of income — continuing operations · Filed 06/08/2026
See notes to condensed consolidated financial statements 5 BECTON, DICKINSON AND COMPANY CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS Millions of dollars (Unaudited) Nine Months Ended June 30, 2026 2025 Operating Activities Net income $ 449 $ 1,185 Less: (Loss) income from discontinued operations, net of tax (276) 430 Income from continuing operations, net of tax 725 755 Adjustments to income from continuing operations, net of tax to derive net cash provided by continuing operating activities: Depreciation and amortization 1,697 1,706 Share-based compensation 204 179 Deferred income taxes (118) (252) Change in operating assets and liabilities (542) (920) Pension obligation 42 21 Asset impairment charges 450 — Impacts of debt extinguishment (122) — Other, net (231) 89 Net Cash Provided by Continuing Operating Activities 2,104 1,578 Investing Activities Capital expenditures (376) (383) Maturities and sales of investments 27 408 Acquisitions, net of cash acquired and adjustments (22) 13 Other, net (192) (267) Net Cash Used for Continuing Investing Activities (563) (229) Financing Activities Change in short-term debt 37 133 Proceeds from long-term debt 704 — Distribution from spin-off entity, net (see Note 2) 3,857 — Payments of debt (2,696) (1,208) Repurchases of common stock (2,250) (750) Dividends paid (875) (899) Other, net (70) (83) Net Cash Used for Continuing Financing Activities (1,293) (2,807) Discontinued Operations Net cash (used for) provided by operating activities (198) 498 Net cash used for investing activities (40) (96) Net cash used for financing activities (3) — Net Cash (Used for) Provided by Discontinued Operations (241) 403 Net change in cash and equivalents and restricted cash, including cash classified within current assets of discontinued operations 7 (1,055) Net change in cash and equivalents classified within current assets of discontinued operations 74 (8) Effect of exchange rate changes on cash and equivalents and restricted cash 5 (2) Net increase (decrease) in cash and equivalents and restricted cash 86 (1,065) Opening Cash and Equivalents and Restricted Cash 777 1,792 Closing Cash and Equivalents and Restricted Cash $ 863 $ 727 Amounts may not add due to rounding.
Condensed consolidated statements of cash flows — spending, financing and shareholder distributions · Filed 06/08/2026
The transaction also enhances our capital allocation framework, with a commitment to allocating at least half of the expected $4 billion cash proceeds for share repurchases with the balance for debt repayment following the closing.
Shareholder letter — planned allocation of transaction proceeds · Filed 18/12/2025
Equity compensation awards 2025 awards The Compensation Committee made the equity compensation awards to our NEOs shown in the Summary Compensation Table on page 73 during fiscal year 2025.
Compensation discussion — equity awards actually made in fiscal 2025 · Filed 18/12/2025
As described earlier, the payout factor for the Performance Units will be determined based on the Company's performance against the three-year ROIC and Revenue goals detailed above and modified based on the Company’s relative TSR performance during the three-year performance period.
Compensation discussion — three-year performance-unit payout conditions · Filed 18/12/2025
Garrison each received a PIP award equal to 76.5% of their respective target awards, consistent with the final PIP performance factor and an Individual Performance Percentage of 90%, to reflect the underperformance of certain business units in their respective segments.
Compensation discussion — reduced actual incentive awards for business-unit underperformance · Filed 18/12/2025
The Compensation Committee (and the independent directors in the case of our CEO) has the discretion to determine what it believes is an appropriate PIP award to recognize BD’s performance and the executive’s contribution to that performance.
Compensation discussion — committee discretion over annual incentive awards · Filed 18/12/2025
Corporate Governance Practices •Annual election of directors •Majority voting standard for election of directors •12 out of 13 director nominees are independent •Robust lead director structure •Lead Director and Governance Committee Chair conduct annual board self-evaluation •Rigorous annual board self-evaluation and director renomination process •Shareholder right to call special meetings •Proxy access by-law •Shareholder right to act by written consent •Restrictions on corporate political contributions •Annual report of charitable contributions •Director and executive officer share ownership requirements •Overboarding policy •No poison pill •Active shareholder engagement process •Mandatory director retirement policy •Robust director orientation and education process Proposal 2 Ratification of selection of independent registered public accounting firm THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” PROPOSAL 2.
Proxy overview — disclosed governance practices and director nominees · Filed 18/12/2025
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, 2025, 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 25, 2025 expressed an unqualified opinion thereon.
Independent auditor report — unqualified internal-control opinion as of September 30, 2025 · Filed 25/11/2025
Mr. Polen is an employee of BD and is, therefore, not independent.
Corporate governance — CEO independence status · Filed 18/12/2025
The components and changes of Accumulated other comprehensive income (loss) for the first three quarters of fiscal years 2026 and 2025 were as follows: (Millions of dollars) Total Foreign Currency Translation (a) Benefit Plans (b) Cash Flow Hedges (c) Available-for-Sale Debt Securities Balance at September 30, 2025 $ (1,895) $ (1,353) $ (636) $ 94 $ — Other comprehensive income before reclassifications, net of taxes 28 17 — 11 — Amounts reclassified into income, net of taxes 9 — 11 (1) — Balance at December 31, 2025 $ (1,857) $ (1,336) $ (625) $ 104 $ — Other comprehensive income (loss) before reclassifications, net of taxes 31 58 (29) 5 (3) Amounts reclassified into income, net of taxes 24 — 28 (4) — Spin-off of Biosciences and Diagnostic Solutions business (See Note 2) 39 39 — — — Balance at March 31, 2026 $ (1,764) $ (1,239) $ (626) $ 105 $ (3) Other comprehensive income before reclassifications, net of taxes 98 83 — 12 3 Amounts reclassified into income, net of taxes 16 — 24 (8) — Balance at June 30, 2026 $ (1,649) $ (1,157) $ (602) $ 110 $ — 12 (Millions of dollars) Total Foreign Currency Translation (a) Benefit Plans Cash Flow Hedges (c) Available-for-Sale Debt Securities Balance at September 30, 2024 $ (1,732) $ (1,244) $ (557) $ 70 $ (1) Other comprehensive income before reclassifications, net of taxes 49 46 — 3 — Amounts reclassified into income, net of taxes 6 — 8 (2) — Balance at December 31, 2024 $ (1,676) $ (1,199) $ (549) $ 72 $ (1) Other comprehensive loss before reclassifications, net of taxes (47) (48) — — — Amounts reclassified into income, net of taxes 7 — 8 — — Balance at March 31, 2025 $ (1,716) $ (1,246) $ (541) $ 72 $ (1) Other comprehensive (loss) income before reclassifications, net of taxes (109) (114) — 4 1 Amounts reclassified into income, net of taxes 12 — 8 4 — Balance at June 30, 2025 $ (1,813) $ (1,360) $ (533) $ 80 $ — (a)Includes net gains (losses) relating to net investment hedges and amounts relating to intercompany balances of a long-term investment nature.
Accumulated other comprehensive income note — completed Biosciences and Diagnostic Solutions spin-off · Filed 06/08/2026
We face competition across all our product lines and in each market in which our products are sold on the basis of product features, clinical or economic outcomes, product quality, availability, price, services and other factors.
Risk factors — disclosed dimensions of competition · Filed 25/11/2025
2025 Adjusted earnings per share Reported Diluted Earnings per Share from Continuing Operations $ 5.82 Purchase accounting adjustments ($1.898 billion pre-tax) (1) 6.58 Integration costs ($127 million pre-tax) (2) 0.44 Restructuring costs ($275 million pre-tax) (2) 0.95 Transaction costs ($6 million pre-tax) (3) 0.02 Separation-related items ($97 million pre-tax) (4) 0.34 Product, litigation and other items ($548 million pre-tax) (5) 1.90 Tax impact of specified items and other tax related (($473) million) (1.64) Adjusted Diluted Earnings per Share from Continuing Operations $ 14.40 Adjustments for unbudgeted foreign currency translation (0.06) Adjusted Diluted Earnings per Share from Continuing Operations used for PIP $ 14.34 (1)Includes amortization and other adjustments related to the purchase accounting for acquisitions.
Compensation appendix — adjusted EPS and exclusions used for annual incentives · Filed 18/12/2025
