Business Context and Reporting Period
Company: Becton, Dickinson and Company (BD)
Filing Type: Form 8-K (Current Report)
Date of Report: November 3, 2010
Reporting Period: Fourth fiscal quarter and full fiscal year ended September 30, 2010.
This filing serves to announce the issuance of a press release containing financial results for the specified period. The report details the company's use of non-GAAP financial measures to supplement GAAP results.
Key Financial Metrics
Revenue, Profit, Cash Flow, Margins, Debt, Liquidity: The filing text does not provide specific numerical values for revenue, profit, cash flow, margins, debt, or liquidity. These figures are contained within the referenced press release (Exhibit 99.1) and reconciliation tables (Exhibit 99.2), which are not included in the provided text.
Non-GAAP Measures Discussed:
- Revenue Growth: Presented after eliminating the effect of foreign currency translation and hedging gains/losses to show underlying operating results.
- Earnings Per Share (EPS): Adjusted for fiscal year 2010 to exclude a non-cash charge related to health care reform impacting Medicare Part D reimbursements.
- Comparative EPS: Fiscal year 2009 EPS is adjusted to exclude tax benefits from tax settlements and charges from pending antitrust class action settlements.
- EPS Growth: Presented for the fourth quarter and full year 2010 after eliminating foreign currency translation effects.
Material Changes and Adjustments
The filing highlights specific adjustments made to financial metrics to facilitate period-to-period comparisons:
- Health Care Reform: A non-cash charge related to Medicare Part D reimbursement changes was excluded from 2010 adjusted EPS.
- Legal and Tax Items: 2009 adjusted EPS excludes tax benefits from settlements and charges from antitrust litigation.
- Currency Impact: Revenue and EPS growth rates are adjusted to remove the volatility of foreign currency translation and hedging activities.
Guidance, Outlook, and Risks
Management Commentary: Management utilizes these non-GAAP measures for internal performance evaluation, budget planning, and to provide investors with insight into underlying operational performance. They assert that excluded items are not part of ordinary operations.
Risks and Limitations:
- Non-GAAP results are not a substitute for GAAP results and should not be considered in isolation.
- Excluded items (such as the health care reform charge or legal settlements) may have a material impact on net income and cash flows calculated under GAAP.
- Non-GAAP measures may differ from similar measures used by other companies.
Guidance: The filing text does not contain specific forward-looking guidance or outlook figures.
Investor Verification Checklist
- Verify the specific GAAP revenue and net income figures in the attached press release (Exhibit 99.1).
- Review the reconciliation table (Exhibit 99.2) to quantify the exact dollar impact of the Medicare Part D charge and antitrust settlements.
- Assess the magnitude of foreign currency translation effects on reported growth rates.
- Confirm the status of the pending antitrust class action suits mentioned as a factor in 2009 adjustments.