Business Context and Reporting Period
Company: Becton, Dickinson and Company (BD)
Filing Type: Form 8-K (Current Report)
Date of Report: January 28, 2010
Reporting Period: First fiscal quarter ending December 31, 2009
This filing announces the issuance of a press release detailing financial results for the first quarter of fiscal year 2010. The report focuses on the methodology for presenting non-GAAP financial measures to better reflect underlying operating performance.
Key Financial Metrics
The filing text does not provide specific numerical values for revenue, profit, cash flow, margins, debt, or liquidity. Instead, it outlines the definitions and adjustments applied to non-GAAP measures:
- Revenues: Presented with growth rates for international and total revenue (company-wide, segments, and business units) after eliminating the effect of foreign currency translation and hedging gains/losses.
- Earnings Per Share (EPS): Diluted EPS from continuing operations is presented excluding foreign currency translation effects. Additionally, fiscal year 2009 EPS is adjusted to exclude a charge related to pending antitrust class action settlements and tax benefits from various tax settlements.
Material Changes and Non-GAAP Adjustments
Management highlights specific adjustments to facilitate period-to-period comparisons and isolate ordinary operations:
- Foreign Currency: Both revenue growth and EPS growth are adjusted to remove the impact of foreign currency translation and hedging activities.
- One-Time Items (FY 2009): Adjustments were made to exclude the impact of a charge for pending antitrust settlements and tax benefits from tax settlements, which management deems outside of ordinary operations.
Guidance, Outlook, and Management Commentary
Management Commentary: BD management utilizes these non-GAAP measures for internal performance evaluation, budget planning, and to provide investors with insight into underlying operational results. They believe these measures allow for better comparison to prior periods and clarify the company's performance trajectory.
Risks and Limitations: The filing explicitly states that non-GAAP results should not be considered in isolation or as a substitute for GAAP results. Management acknowledges that items excluded from non-GAAP measures may have a material impact on net income, EPS, or cash flows calculated under GAAP. Consequently, these measures are used in conjunction with GAAP results.
Investor Verification Checklist
- Review Exhibit 99.1 (Press Release) for the actual numerical financial results for Q1 2010.
- Examine Exhibit 99.2 for the detailed reconciliation between GAAP and non-GAAP financial measures.
- Verify the specific dollar amounts of the antitrust settlement charge and tax benefits excluded from the 2009 EPS calculation.
- Compare the reported non-GAAP growth rates against GAAP growth rates to assess the magnitude of foreign currency impacts.