Business Context and Reporting Period
Company: Becton, Dickinson and Company (BD)
Filing Type: Form 8-K (Current Report)
Date of Report: April 29, 2010
Reporting Period: Second fiscal quarter ending March 31, 2010, and the first six months of fiscal year 2010.
Key Financial Metrics
This filing serves as a notification of the issuance of a press release (Exhibit 99.1) containing financial results. The text of the 8-K itself does not provide specific numerical values for revenue, profit, cash flow, margins, debt, or liquidity. Instead, it details the methodology for presenting non-GAAP financial measures:
- Revenues: Presented with foreign currency translation effects eliminated to show underlying operating results.
- Earnings Per Share (EPS): Adjusted to exclude non-cash charges related to healthcare reform (Medicare Part D) and, for prior periods, charges related to antitrust litigation settlements and tax benefits.
- Adjusted EPS Growth: Presented excluding the effect of foreign currency translation.
Material Changes and Non-GAAP Adjustments
The filing highlights specific items excluded from non-GAAP measures to facilitate period-to-period comparability:
- Healthcare Reform: Non-cash charges impacting Medicare Part D reimbursements are excluded from current period EPS.
- Litigation: Charges related to the pending settlement of antitrust class action suits are excluded from 2009 EPS comparisons.
- Tax Settlements: Tax benefits relating to various tax settlements are excluded from full-year 2009 EPS.
- Foreign Currency: Gains or losses from hedging activities and currency translation are eliminated from revenue and EPS growth metrics.
Guidance, Outlook, and Management Commentary
Management Commentary: Management utilizes these non-GAAP measures for internal evaluation, budget planning, and to provide investors with insight into underlying operational performance. They assert that these adjusted measures are more indicative of BD's performance than GAAP results for the specified periods.
Guidance: The filing notes that BD presents adjusted EPS guidance for the full fiscal year 2010, excluding foreign currency effects. Specific guidance numbers are not contained in this 8-K text but are referenced as being in the attached press release.
Risks and Limitations: Management cautions that non-GAAP results should not be considered in isolation or as a substitute for GAAP results. Items excluded from non-GAAP measures may have a material impact on net income and cash flows.
Investor Verification Checklist
- Review Exhibit 99.1 (Press Release) for specific revenue, net income, and EPS figures for Q2 and YTD 2010.
- Examine Exhibit 99.2 for the detailed reconciliation between GAAP and non-GAAP financial measures.
- Verify the specific dollar amounts excluded for the Medicare Part D charge and the antitrust litigation settlement.
- Confirm the full-year 2010 adjusted EPS guidance figures provided in the press release.
- Assess the impact of foreign currency fluctuations on reported revenue growth versus constant currency growth.