Business Context and Reporting Period
Company: Becton, Dickinson and Company (BD)
Filing Type: Form 8-K (Current Report)
Date of Report: July 22, 2005
Reporting Period: Third fiscal quarter of fiscal year 2005
This filing serves to announce the issuance of a press release containing financial results for the third quarter of 2005. The document primarily details the company's methodology for presenting non-GAAP financial measures alongside 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. The document focuses exclusively on defining the adjustments made to these metrics rather than reporting the final figures.
Non-GAAP Adjustments Defined: Management presents adjusted measures for the following items to facilitate period-to-period comparisons:
- Revenues: Growth rates presented at constant foreign exchange rates.
- Cost of Products Sold, Gross Profit, Operating Income: Adjusted to exclude share-based compensation expense and significant charges.
- Income from Continuing Operations: Adjusted to exclude share-based compensation, significant reversals of tax reserves, and effects of changes in tax laws/regulations.
- Net Income and Earnings Per Share: Adjusted to exclude significant charges, share-based compensation, and tax-related fluctuations.
- Selling, Administrative, and R&D Expenses: Adjusted to exclude share-based compensation expense.
- Income Taxes/Effective Tax Rate: Adjusted to exclude share-based compensation, tax reserve reversals, and legislative changes.
Material Changes Versus Prior Period
The filing does not contain specific data regarding material changes in financial performance compared to the prior comparable period. It notes that management uses these non-GAAP measures to improve comparability to prior periods where share-based compensation was not recognized or where tax rates varied due to legislative changes.
Guidance, Outlook, and Management Commentary
Management Commentary: Management states that non-GAAP measures are used internally for performance evaluation and budget planning. They believe these adjusted figures better reflect underlying operational performance by removing the impact of currency fluctuations, share-based compensation, significant charges, and tax rate anomalies.
Risks and Limitations: The filing explicitly warns that non-GAAP results should not be considered in isolation or as a substitute for GAAP results. Management acknowledges that excluded items may have a material impact on net income, earnings per share, or cash flows calculated under GAAP. Additionally, non-GAAP measures may differ from similar metrics used by other companies.
Guidance/Outlook: No specific forward-looking guidance or outlook figures are provided in this text.
Investor Verification Checklist
- Verify the specific GAAP and non-GAAP numerical values in the press release (Exhibit 99.1) referenced in this filing, as they are not included in the 8-K text.
- Confirm the magnitude of share-based compensation expense excluded from operating metrics.
- Review the details of any "significant charges" or "reversals of tax reserves" mentioned as exclusions.
- Assess the impact of foreign exchange rate fluctuations on reported revenue growth.
- Reconcile the adjusted effective tax rate with the GAAP effective tax rate to understand the impact of legislative changes.