BDX 10-K & 10-Q changes, risk factors and insider trading

General global economic downturns and macroeconomic trends, including heightened inflation, capital market volatility,volatility (including volatility resulting from the imposition of (and changing policies around) tariffs and related countermeasures), import or export licensing requirements, interest rate and currency rate fluctuations, economic slowdown or recession, have contributed to conditions that have impacted, and may continue to impact, demand for our products and services, or the prices we can charge for our products, disrupt aspects of our supply chain, impair our ability to produce our products, increase borrowing costs and exacerbate other risks that affect our business, financial condition and results of operations. In addition, general economic conditions have adversely impacted, and may impactcontinue to adversely impact, the healthcare industry, including reductions in capital spending,spending and U.S. federal funding and changes in the delivery of healthcare servicesservices, which have affected, and increasing labor disputes or shortages, which could in turnthe affectfuture affect, demand for our products and services.products. Both domestic and international markets experienced inflationary pressures in fiscal year 20242025 and we expect inflation to persist in the future but at lower levels than in recent years.future. In addition, currency exchange rates have been especially volatile in the recent past, and these currency fluctuations have affected, and may continue to affect, the reported value of our assets and liabilities, as well as our cash flows.

We have also experienced, and may continue to experience, challenges in our global supply chain, including shortages in supply, or disruptions in production and shipments, of certain materials or components used in our products,products and related price increases. While to date, we have been able to manage the challenges associated with these delays and shortages without significant disruption to our business, no assurance can be given that these efforts will continue to be successful.

A substantial amount of our sales come from our operations outside the U.S., and we intend to continue to pursue growth opportunities in new and existing foreign markets, especially in emerging markets. Our foreign operations subject us to certain commercial, political and financial risks. In addition to fluctuations in foreign currency exchange (discussed above), our business in these foreign markets is subject to changing political, social, and geopolitical conditions, such as the evolvingcontinuation situationsand/or escalation of the situation in Ukraine, the Middle East and Asia. These conditions include instability resulting from war, terrorism, insurrections and civil unrest, political conflict,conflict and changing economic conditions, such as inflation, deflation, interest rate volatility and credit availability. Additionally, a number of factors, including U.S. relations with or among the governments of the foreign countries in which we operate, changes to international trade agreements and treaties, changes in tax laws and regulations, economic sanctions, export controls, restrictions on the ability to transfer capital across borders, tariffs and other increases in trade protectionism and barriers to market participation, or the weakening or loss of certain intellectual property rights in some countries, may affect our business, financial condition and results of operations. Foreign regulatory requirements, including those related to the testing, authorization, and labeling of products and import or export licensing requirements, could affect the availability of our products in these markets. In addition to these broader market conditions, our operations may also be impacted by a variety of local factors, such as competition from local companies, local product preferences and requirements, changes in local healthcare payment systems and healthcare delivery systems, changes resulting from new political administrations, and labor force instability.

The success of our operations outside the U.S. also depends, in part, on our ability to make necessary infrastructure enhancements to, among other things, our production facilities and sales and distribution networksnetworks, and manageour andstrategic staffstaffing widespreadplans required to support our international operations. These and other factors may adversely impact our ability to pursue our growth strategy in these markets.

In addition, our international operations increase our compliance risk. For example, such international operations are governed by the U.S. Foreign Corrupt Practices Act and similar foreign anti-corruption laws. Global enforcement of anti-corruption and bribery laws has increased substantially in recent years, with more enforcement proceedings by U.S. and foreign governmental agencies and the imposition of significant fines and penalties. While we have implemented policiespolicies, procedures and procedurestraining relatingrelated to compliance with these laws, our international operations, which often involve customer relationships with foreign governments, create the risk that there may be unauthorized payments or offers of payments made by employees, consultants, sales agents or distributors. We are also subject to certain U.S. and foreign laws and regulations that restrict BDus from transacting business with, or making investments in, certain countries, governments, entities and individuals subject to U.S. or foreign economic sanctions or export restrictions. Any alleged or actual violations of these laws may subject us to government investigations and significant criminal or civil sanctions and other liabilities, and negatively affect our reputation andwhich could result in a material adverse effect on our business, results of operations, financial condition and cash flows.

Our ability to compete is also impacted by changing customer and patient preferences and requirements, including changes in demand as a result of changes to U.S. federal and state policies (affecting products such as pharmaceuticals and vaccines), increased focus on products using materials of concern and demand for more sustainable products, and for products incorporatingutilizing digitalemerging capabilities,technologies including(such artificialas intelligence,AI), as well as changes in the ways healthcare services are delivered, such as the transition of more care from acute to non-acute settings and increased focus on chronic disease management. In particular, the shift of care from acute to non-acute settings may also place financial pressure on hospitals and broader healthcare systems that could result in less demand for our productsproducts. Tariffs and services.other Costcost containment efforts by governments and the private sector arehave alsoled resultingto increased competitiveness in terms of product pricing and have resulted and may continue to result in increased emphasis on products that reduce costs, improve clinical results and expand patient access. In addition, changes in regulatory or market standards, including, without limitation, data protection and cybersecurity requirements, often require significant investment tofor maintain compliance to relevant standards.compliance. Our ability to remain competitive will depend on how well we meet these changing market and regulatory demands in terms of our product offerings and go-to-market approaches.

The medical technology industry is also subject to rapid technological change, discovery and frequent product introductions. The development of new or improved products, processes or technologies by other companies that provide better features, pricing, clinical outcomes or economic value may render our current products or subsequently developed products obsolete or less competitive. In some instances, competitors, including pharmaceutical companies, also offer (or are attempting to develop) alternative therapies for disease states that may be delivered without a medical device.device, Lowersuch costas producersoral haveGLP-1 also created pricing pressure, particularly in developing markets.medications.

A substantial amount of our revenue is derived from international operations, and we anticipate that a significant portion of our future sales will continue to come from outside the U.S. The revenuesrevenue we report with respect to our international operations outsidehas the U.S. have beenbeen, and may continue to be adverselybe, affected by fluctuations in foreign currency exchange rates, which are caused by a number of factors, including changes in a country's political and economic policiespolicies, such as tariffs, and inflationary conditions. Furthermore, currency exchange rates have been especially volatile in the recent past, and these currency fluctuations have affected, and may continue to affect, the reported value of our assets and liabilities, as well as our cash flows. A discussion of the financial impact of exchange rate fluctuations and the ways and extent to which we may attempt to address any impact is contained in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. Any foreign currency exchange rate hedging activities we engage in may only offset a portion of the adverse financial impact resulting from unfavorable changes in foreign currency exchange rates. We cannot predict with any certainty changes in foreign currency exchange rates or the degree to which we can effectively mitigatemanage these risks.fluctuations.

Our ability to compete effectively depends upon our ability to attract and retain executives, key employees and other associates. Competition for experienced employees, particularly for persons with certain technical competencies in some geographies, can be a challenge. Additionally, we need qualified managers and skilled employees with technical, manufacturing and distribution experience to operate our business successfully. Our ability to recruit and retain such talent will depend on a number of factors, including how BD’s compensation, benefits, work location, corporate culture and work environment compares with those offered by our competitors and other local employers. While there has been a slightan improvement in what had been an intensely competitive labor market, there continues to be pressure on skilled labor in certain markets. A sustained labor shortage or increased turnover rates within our employee base has led to, and may continue to lead to, increased costs, such as an increase in overtime necessary to meet demand and increased wages and benefit costs to attract and retain skilled employees, and could negatively affect our ability to efficiently operate our manufacturing and distribution facilities and overall business. If we cannot effectively recruit and retain qualified executives and skilled employees, we could encounter operational disruptions or other negative consequences to our business, financial condition or results of operations.

We rely on a large number of information and technology (“IT”) systems and related infrastructure, including services provided to us by third-party vendors to operate our business. We collect, use, store, transfer and otherwise process electronic information in our day-to-day operations, including personal, confidential, or proprietary information of BD and its customers, vendors and other business partners,partners and patients. SomeAdditionally, some of our products and systems collect personal, confidential or proprietary information regarding patients and patient therapy on behalf of our customers and some of our products are internet enabled or connect to our IT systems for maintenance and other purposes. We also have products and systems that connect to the internet, hospital networks, electronic medical record systems or electronic health record systems. In addition, we rely on networks and services, including internet sites, cloud and software-as-a-service (“SaaS”) solutions, platform-as-a-service (“PaaS”) solutions, data hosting and processing facilities, artificial intelligence,AI, tools and other hardware, software (including open-source software) and technical applications and platforms, including some that are managed, hosted, provided and/or used by third-party vendors, to operate our business. Further, we expect that the breadth and complexity of our IT systems and infrastructure will increase as we expand our product offerings to utilize cloud technologies and potentially artificial intelligence,AI, which present inherent enterprise technology risks, including those related to privacy, data protection and cybersecurity, that need to be managed. The foregoing could expose us to further risk of potential breaches, failures, interruptions and disruptions.disruptions, which could result in adverse consequences, including regulatory inquiries or litigation, increased costs and expenses, reputational damage, lost revenue, and fines or penalties. In particular, risks associated with the deployment and use of AI into our operations generally could introduce new risks related to the management of our information and technology systems and related infrastructure and our overall cybersecurity threat landscape.

While we are continuing to modernize our IT systems and infrastructure (such as hardware, software and operating systems), there are still legacy technologies in operation that are more vulnerable to risk of failures, interruptions and disruptions. In addition, while we continue to enhance business continuity and disaster recovery plans and strategies, there is no guarantee that such plans and strategies will be effective or account for all eventualities. We have experienced, and could in the future experience, the failure, interruption or disruption of the functionality of our IT systems and infrastructure,infrastructure (or those of third-party vendors upon which we rely,rely), which could impair our ability or that of our customers, suppliers and other business partners to conduct business,business. Such a disruption could also result in the loss of BDour trade secrets or otherwise compromise personal, confidential or proprietary information of BDours or itsour customers, suppliers and other business partners, or of patients,patients. Additionally, depending on the nature of such a disruption, it could result in efficacy or safety concerns for certain of our products, result in reputational harm to our business and result in actions by regulatory bodies or civil litigation.

Unauthorized tampering, adulteration or interference with our products, including through cyberattacks, may also create issues with product functionality that could result in a loss or alteration of data, risk to patient safety and product recalls or field actions, as well as impact our compliance with privacy, data protection and other laws and regulations and could result in reputational damage and actions by regulatory bodies or civil litigation.

In addition, acquisitions,acquisitions and the integration of acquired companies into the Company’sour existing and future IT systems and infrastructure, including with third-party vendors and processes, inherently presentspresent cybersecurity risks, such as exposing us to vulnerabilities and threats that were previously unknown or unmanaged. While we attempt to mitigate these risks through due diligence, risk assessments and the implementation of cybersecurity controls and protocols during and after the acquisition process, there can be no assurance that such measures will be sufficient to prevent, mitigate or remediate cybersecurity incidents or breaches, which could have a material adverse effect on our business, financial condition and results of operations.

While we have mademade, and expect to continue making, significant investments intended to addressstrengthen threats presented byour cybersecurity incidentsposture—including andmeasures breaches, continue to dedicate significant resources intendeddesigned to protect our productsproducts, systems, and systemsdata—we fromcannot guarantee that these efforts will fully prevent, mitigate or remediate cybersecurity incidents andor breaches,breaches. We maintain processes designed to monitor, detect and continuerespond to workthreats and collaborate with government authorities and third-party vendorspartners in an effort to detectreduce risk. However, given the evolving nature, sophistication, scale and reduce the riskfrequency of future cybersecurity incidents and breaches, thereno system can be noentirely assurancessecure. thatA these protective measures will be sufficient to preventsuccessful cybersecurity incidentsincident or breaches thatbreach could havematerially aadversely material adverse impact onaffect our business.business, financial condition, results of operations or cash flows.

We purchase many different types of raw materials and components used in our products, some of which are not available from multiple sources. In addition, for quality assurance, cost-effectiveness and other reasons, certain raw materials and components are purchased from sole suppliers. Our reliance on sole suppliers can create greater exposure to shortages, magnify price swings and increase the difficulty of negotiating favorable terms. The price and supply of these materials and components has been, and may in the future be, impacted or disrupted for reasons beyond our control, including supplier shutdowns, supplier capacity constraints, supplier insolvencies, labor disruptions or shortages, transportation delays, inflationary pricing pressures, work stoppages, extreme weather events, tariffs and other geopolitical developments, global economic uncertainty or downturns, sanctions and trade restrictions,restrictions and other governmental regulatory actions or inactions (such as in the area of materials of concern), including those taken as a result of a prolonged U.S. government shutdown, and any such changes or disruptions could adversely affect our business, results of operations, financial condition and cash flows. We have experienced, and may continue to experience, significant challenges to our global transportation channels and other aspects of our global supply chain network, including to the cost and availability of energy, raw materials and components due to shortages, labor strikes,strikes and cost inflation. We continuously explore alternative routes, transportation modes,modes and replenishment timings to preempt and mitigate associated risks, but no assurance can be given that these efforts will adequately address these challenges and disruptions.

At a broader level, there is increasedcontinued focus on the use and emission of ethylene oxide by the EPA and state environmental regulatory agencies. Additional regulatory requirements associated with the use and emission of ethylene oxide for sterilization may be imposed in the future, both domestically and outside the U.S. On April 5, 2024, the final National Emission Standards for Hazardous Air Pollutants (“NESHAP”): Ethylene Oxide Emissions Standards for Sterilization Facilities regulation issued by the EPA became effective. CompaniesWhile generallycompanies havewere initially given two years from the effective date to comply with the new requirements of the NESHAP.NESHAP generally, in July 2025, the current U.S. administration issued an executive order exempting medical device sterilization facilities (including certain of our facilities) from compliance with such requirements for two years beyond the initial April 2026 compliance deadline. We are in the process of implementingimplemented certain changes to our facilities in accordance with NESHAP’s requirements,requirements in 2024 and such2025 measuresand willare requirein the process of implementing certain additional implementationchanges andto ongoingour operationalfacilities costs,to includingachieve investmentscompliance inwith certainsuch newrequirements technologies.by April 2028.

In addition, on April 13, 2023, the EPA published a Pesticide Registration Review: Proposed Interim Decision and Draft Risk Assessment Addendum for Ethylene Oxide. On January 14, 2025, the EPA published the Pesticide Registration Review; Interim Registration Review Decision for Ethylene Oxide (“PIDID”). The EPA has not yet finalized the PID,, which regulates the use of ethylene oxide as a sterilant and is intended to mitigate any human health and environmental risks associated with its use. WeAmong cannotother predict whatthings, the finalID PIDrequires adoptedmedical device sterilization facilities to comply with a new and stricter occupational ethylene oxide exposure limit, establish engineering controls for worker protection, provide workers with personal protective equipment, conduct continuous stationary indoor monitoring and comply with a maximum concentration limit for ethylene oxide (with higher levels permitted if required and approved by the EPAFDA). mayCompliance requiredeadlines andfor thereforethe wevarious mitigation measures required by the ID range from within 60 days to ten years of the effective date. We are notin ablethe toprocess assessof assessing the impact of the ID requirements on our sterilization facilities, on the third-party sterilization facilities that BDwe utilizesutilize and our operations moregenerally. generally.We expect to implement certain changes at our facilities to comply with NESHAP and ID requirements, which will require us to incur additional implementation and ongoing operating costs.

This increased regulation could require BDus or our third-party sterilization service providers, including providers used by BD, to temporarily suspend operations to install additional emissions control technology, limit the use of ethylene oxide or take other actions, which would impact BD’sour operations and further reduce the available capacity to sterilize medical devices and healthcare products, and could also result in additional costs. If any existing regulatory requirements or any such regulatory actions or rulemaking result in the suspension or interruption of our sterilization operations at BD or at third-party medical device sterilizers usedwe by BD,use, or otherwise limit the availability of third-party sterilization capacity, thiswhich could interrupt or otherwise adversely impact production of certain of our products or lead to civil litigation or other claims against BD.us. BDWe hashave business continuity plans in place to mitigate the impact of any such disruption, although these plans may not be able to fully offset such impact, for the reasons noted above. See “Item 1. Business - Regulation” for a discussion of the consent order BD entered into with the Environmental Protection Division of the Georgia Department of Natural Resources and the risk related to sterilization operations generally.

Climate change,change and related sustainability efforts, or legal, regulatory or market measures to address climatethese change,efforts, could adversely affect our business, financial condition or results of operations.

Climate change resulting from increased concentrations of carbon dioxide and other greenhouse gases (“GHG”) in the atmosphere may present risks to our business and operations. Extreme weather or other conditions, such as hurricanes, tornadoes, windstorms, wildfires or flooding, which may result from climate change could adversely impact our operations and supply chain, including the availability and cost of raw materials and components required for the operation of our business, andas well as result in human capital issues for BDus and companies within our supply chain. In addition, access to (and pricing of) certain natural resources, such as water, could impact our manufacturing operations. Such conditions could also result in physical damage to our products, plants and distribution centers, as well as the infrastructure and facilities of our suppliers and of hospitals, medical care facilities and other customers.

There has also been increasedshifting focus by federal, international, state and local regulatory and legislative bodies toon combatcombating and/or limit the effects oflimiting climate change through a variety of means, including regulating GHG emissions (and requirements to disclosepromote sustainability and related efforts through measures such as requiring disclosure of climate-related risks and metrics, including GHG emissions),emissions, conducting risk assessments on sustainability practices, adopting policies mandating or promoting the use of renewable or zero-carbon energyenergy, implementing sustainability initiatives and sustainability initiatives, andimposing additional taxes on fuel and energy. There has been, and in the future there may be additional,Additional legislation or regulations enacted or promulgated in the United States and in other jurisdictions in which we doand businessour thatsuppliers operate may impose more stringent restrictionsrestrictions, and requirements on our operations than our historical legal or regulatory obligations as well as additional disclosure or reporting requirements.obligations. We have experienced, and companies in our supply chain have experienced, and may continue to experience, increased compliance burdens and costs to meet the regulatorythese obligations. SuchIf increasedwe complianceor burdensour suppliers are unable or unwilling to comply with these obligations, it could be more difficult and/or costly to manufacture and costssell could cause disruption in the sourcing, manufacturing and distributioncertain of our products and we could experience supply chain interruptions, including impacts to sourcing and distribution. In addition, we could be subject to litigation, substantial fines and other damages if we fail to comply with these obligations, which could adversely affectimpact our business, financial condition orcondition, results of operations.operations and cash flows.

Additionally, the impacts of climateClimate change and related regulations and sustainability efforts may furtheralso influence customercustomer, shareholder and other stakeholder preferences and requirements.requirements, including in diverging directions. This includes increased or shifting demand for more sustainable products, including products with lower environmental footprints, and for companies to produce and demonstrate progress againsttoward sustainability goals and GHG reduction targets, including product-level GHG emissions data. Failure to meet customer, shareholder and other stakeholder expectations or our own goals or commitments relating to sustainability or GHG emissions reductions, provide sustainable products or demonstrate GHG reductions could potentially result in loss of market share, reputational impacts, or anchallenges inabilityin to attractattracting and retainretaining customers.

ReservesAccruals are established for estimated losses with respect to legal proceedings do not represent an exact calculation of our actual liability, but instead represent our estimate of the probable loss at the time the reserve is established to the extent futurelosses lossesfor individual matters are probable and reasonably estimable.estimable Duebased upon our assessment of the likelihood of any adverse judgments or outcomes relative to these matters, as well as the inherentpotential uncertaintyranges of probable losses. Given the uncertain nature of litigation and our underlying loss reserve estimates, additional reserves may be established or current reserves may be significantly increased from time-to-time. Also, in some instances,generally, we are not able in all cases to reasonably estimate the amount or range of loss that could result from an unfavorable outcome of the litigation toin which we are a party. InAlso, viewaccruals relating to legal proceedings may change in the future as new information for an individual matter becomes available or due to changes in our litigation strategy. Given the uncertain nature of these uncertainties,litigation, we could incur charges materially in excess of any currently established accruals and, to the extent available, excess liability insurance.insurance and any such future charges, individually or in the aggregate, could have a material adverse effect on our consolidated results of operations, financial condition and/or consolidated cash flows. In addition, even if thewe Companybelieve believeswe it hashave meritorious defenses, from time to time thewe Company engagesengage in settlement discussions and mediation and considersconsider settlements taking into account various factors including, among other things, developments in such legal proceedings and the resulting risks and uncertainties. These activities have resulted in settlements for certain matters and going forward could result in further settlements, any of which may be confidential and could be significant and result in charges in excess of accruals. Any such future charges, individually or in the aggregate, could have a material adverse effect on our results of operations, financial condition and/or liquidity.

Our operations are global and are affected by complex state, federal and international laws relating to healthcare, environmental protection, occupational health and safety, antitrust, anti-corruption, marketing, fraud and abuse (including anti-kickback and false claims laws), export control, product safety and efficacy, employment, labor, privacy and data protection, taxation, artificialthe intelligencedevelopment, deployment and use of emerging technologies (such as AI) and other areas. Violations of these laws can result in criminal or civil sanctions, including substantial fines and, in some cases, exclusion from participation in healthcare programs such as Medicare and Medicaid. Environmental laws, particularly with respect to climate change and the emission of greenhouse gases, are also generally becoming more stringent throughout the world, which may increase our costs of operations or necessitate closures of, or changes to, our manufacturing plants or processes or those of our suppliers, or result in liability to BD. The enactment of additional laws and reporting requirements in the future or changes in the interpretation of existing laws or regulations, may increase our compliance costs or otherwise adversely impact our operations and financial performance. For example, the FDA’s increased oversight of laboratory developed tests may impact certain of our customers and, as a result, could affect our financial performance.

We are subject to extensive regulation by the FDA pursuant to the Federal Food, Drug and Cosmetic Act, by comparable agencies in foreign countries, and by other regulatory agencies and governing bodies. Most of our products must receive authorization from the FDA or counterpart regulatory agencies in other countries before they can be marketed or sold. This process may require us to incur significant costs in terms of time and resources, and these costs have been increasing due to increased requirements from the FDA and comparable governing bodies for supporting data for submissions. The regulatory process may also require changes to our products or result in limitations on the indicated uses of our products. Governmental agencies may also impose new requirements regarding registration, including, but not limited to, labeling updates or changes to prohibited materials that require us to modify or re-register products already on the market or otherwise impact our ability to market our products in those countries. In addition, changesgovernment shutdowns, recent reductions in U.S. government agency staffing and government spending more generally could impact ordinary course operations of agencies with which we haveinteract made,routinely, orsuch as the FDA. Following these reductions, the agencies may makelack inadequate thestaff future,and resources to ourmeet products have been, or may in the future be, subject to U.S. or foreign regulatorycurrent review, including additional 510(k) clearance, PMA approval and otherinspection marketing authorizations (such as, but not limited to, with respect to BD AlarisTM pumps and related sets and BD VacutainerTM). We have made modifications to certain of our products in the past and have determined based on our review of our internal documentation and data and the applicable FDA or foreign regulations and guidance that in certain instances new 510(k) clearances or other premarket submissions were not required. We may make similar modifications or add additional features in the future that we believe do not require a new clearance or approval. If the FDA or a foreign regulator disagrees with our determinations, we may be required to cease marketing and/or to recall the modified product until we obtain a new marketing authorization,schedules, which could result in lost revenue, additional costs and damage to our reputation. Such non-compliance may also subjectdelay the Companyreceipt to civil and criminal, monetary and non-monetary penalties,of or otherotherwise actionsadversely being taken with respect to products inaffect the field.outcomes Marketingof authorizationproduct and the time needed to secure such authorization is uncertain andauthorizations we may not be able to obtain such authorization on the timeline or conditions we expect or at all. Our ability to obtain and maintain regulatory approvals from the FDA or foreign regulators may be difficult and could increase the cost of compliance and impact our ability to market our products.seek.

Following the introduction of a product, these agencies also periodically review our manufacturing processes and product performance. Our failure to comply with the applicable good manufacturing practices, adverse event reporting and other post market requirements of these agencies could delay or prevent the production, marketing or sale of our products and result in delays or suspensions of regulatory clearances, warning letters or consent decrees, closure of manufacturing sites, import bans, seizures or recalls of products, civil or criminal sanctions and damage to our reputation. More stringent oversight by the FDA and other agencies incan recent years has resultedresult in increased enforcement activity, which increasescould increase our compliance risk.

Our CareFusion 303, Inc. subsidiary is operating under aan amended Consent Decree that affects our BD Alaris™ infusion pump business in the U.S.United States. We are also currently operating under two warning letters issued by the FDA for our Dispensing and Specimen Management businesses. For more information regarding the consent decree and warning letters, see “Regulation” under Item 1. Business.

As previously disclosed, on July 21, 2023, BD received 510(k) clearance from the FDA for its updated BD Alaris™ Infusion System, which enablesenabled both remediation and a return to market for the BD Alaris™ Infusion System. InTo accordanceaddress withopen ourrecalls commitmentsand toensure thedevices FDA,at allcustomer sites are running a recent, cleared version of the currentBD Alaris™ Infusion System Software, BD Alaris™ Infusion System devices in the U.S. market willare bebeing remediated or replaced with the updated 510(k) cleared versionversion, which we expect to be substantially complete over the next severalcalendar years.year. The overall timing and cost of replacement or remediation of the BD Alaris™ Infusion Systems and return to market in the U.S. may be impacted by, among other things, customer readiness, supply continuity, and our continued engagement with the FDA.

In addition, the European Union (“EU”) has adopted the EU Medical Device Regulation (Regulation (EU) 2017/745, the “EU MDR”) and the In Vitro Diagnostic Regulation (Regulation (EU) 2017/746, the “EU IVDR”), each of which impose stricter requirements for the marketing and sale of medical devices, including in the area of clinical evidence requirements,evidence, quality management systems and post-market surveillance. TheAlthough the EU MDR has been fully operationalapplicable for previously approved self-certified medical devices since May 2021.2021, Thethe application of the EU MDR has been extended until 2027 for certain devices considered higher-risk and to 2028 for other devices. This longer transition timeline applies only to devices that are transitioning to MDR and meet other specific conditions set out in the EU IVDR.conditions. The EU IVDR has been fullyapplicable applicablesince May 2022, but transition periods apply for manufacturers ofcertain in vitro diagnostic medical devices since May 2022.devices. Complying with and maintaining devices under these regulations requires us to incur significant expenditures. Additionally, the availability of EU notifiedEU-notified body services certified tounder the new requirements is limited, which may delay the marketing approval for some of our products under thethese EU MDR.regulations. Any such delays, or any failure to meet these requirements could adversely impact our business in the EU and other regions that tie their product registrations to EU conformity requirements.

BD remains focused on delivering durable growth, creating shareholder value and making appropriate investments for the future. BDOur 2025, our vehicle for value creation,strategy is anchored in three key pillars: grow, simplify and empower. BD's management team aligns our operating model and investments with these key strategic pillars through continuous focus on the following underlying objectives:

On September 3, 2024, we completed the acquisition of Edwards Lifesciences’ Critical Care product group (“Critical Care”),group, which we renamed as BD Advanced Patient Monitoring (“Advanced Patient Monitoring”), for total consideration of $3.911$3.914 billion. Advanced Patient Monitoring is a global leader in advanced monitoring solutions that expands BD’s portfolio of smart connected care solutions with its growing set of leading monitoring technologies, advanced AI-enabled clinical decision tools and robust innovation pipeline that complement our existing technologies serving operating rooms and intensive care units.

BD reports the results associated with Advanced Patient Monitoring’s product offerings as a separate organizational unit within our Medical segment and additional disclosures relating to this acquisition are provided in Notes 8, 11 and 16 to the consolidated financial statements contained in Item 8. Financial Statements and Supplementary Data.

In April 2022, we completed the spin-offseparation and distribution of ourEmbecta formerCorp., formerly BD's Diabetes Care businessbusiness, asinto a separateseparate, publicly tradedpublicly-traded company. TheHistorical historicalfinancial results ofhave the Diabetes Care business that was contributed in the spin-off werebeen reflected as discontinued operations in our consolidated financial statements.

Additional disclosures regarding the sale and spin-offseparation are provided in Note 2 to the consolidated financial statements contained in Item 8. Financial Statements and Supplementary Data.

Key Trends and Uncertainties Affecting Results of Operations

Our operations, supply chain, suppliers and customers are exposed to various global macroeconomic factors and other risks which we continually evaluate macroeconomic conditions to assess their potential impact to our operations and financial results. Macroeconomic factors which affected our operations and impacted results in fiscal year 2024 included the following:

(b) Represents the recognitionimpact of accruals resultingrecognized fromin recentfiscal developmentsyear 2024 relating to the Italian government medical device pay back legislation, as well as another legal matter, and which substantially relate to years prior to the current fiscal year.year 2024. Additional disclosures regarding these legislative and legal matters are provided in NotesNote 6 and 8 to the consolidated financial statements contained in Item 8. Financial Statements and Supplementary Data.

Our financial position remains strong, with cashCash flows from continuing operating activities totalingwere $3.844$3.430 billion in 2024.2025. At September 30, 2024,2025, we had $2.301$859 billionmillion in cash and equivalents and short-term investments, including restricted cash. We continued to return value to our shareholders in the form of dividends and during fiscal year 2024,2025, we paid cash dividends to common shareholders of $1.100$1.196 billion.billion.We also repurchased approximately $1 billion of our common stock during fiscal year 2025.

•Higher selling and administrative expense as a percentage of revenues in 2025 compared with 2024 primarily reflected costs attributable to the Advanced Patient Monitoring unit. Lower selling and administrative expense as a percentage of revenues in 2024 compared with 2023 primarily reflected revenue growth that outpaced spending and lower shipping costs. Selling and administrative expense as a percentage of revenues in 2023 was lower compared with 2022 due to lower selling and shipping costs.

•Higher research and development expense as a percentage of revenues in 2025 compared with 2024 which primarily reflected costs attributable to the Advanced Patient Monitoring unit, offset by the timing of project spending. Research and development expense as a percentage of revenues in 2024 was lower compared with 2023, and in 2023 compared with 2022, which reflected revenue growth that outpaced project spending.

•StrongA growthdecline in sales of the Integrated Diagnostic Solutions unit’sunit specimen management portfolio, partially offsetdriven by an unfavorable comparison to higher respiratory testing revenues in 2023, including COVID-19-only diagnostic testing revenues.

Tariffs, sanctions or other trade barriers imposed by the United States, or against the United States from countries in which we do business, could also adversely impact our supply chain costs, results of operations and our financial condition. Tariffs have adversely impacted our secondthird quarter fiscal year 2026 operating expense and we continue to monitor international trade policy-related developments, including developments regarding refunds of certain tariffs, to assess their potential future impacts to our operations. Based upon the latest published tariffs that are currently in effect, we expect a continued adverse impact to operating expense for fiscal year 2026 and potentially beyond, primarily relating to any products (or components) imported from countries across our global supply chain which have no exemption opportunities. The ultimate impact of any existing or new tariffs or other changes in international trade policies is subject to a number of factors including, but not limited to, the duration of such tariffs, changes in tariff rates, the amount, scope and nature of the tariffs, any countermeasures that target countries may take, or any mitigating actions that may become available. While sourcing optimization and tariff exemptions for qualifying products are key aspects of our mitigation strategy, the timing of such or the ultimate results we will realize from these efforts are uncertain. In addition, while we have received refunds of certain tariffs, our tariff mitigation strategies have been, and may be further challenged, rejected or eliminated through legislation or other challenges, or may otherwise not be effective, which may impact the collectability of the remaining receivable we have recorded for exemption claims.

For the three months ended MarchJune 31,30, 2026, worldwide revenues of $4.714$4.983 billion increased 5.2%5.4% from the prior-year period. This increase reflected the following impacts:

Cash flows from continuing operating activities were $1.328$2.104 billion in the first sixnine months of fiscal year 2026. At MarchJune 31,30, 2026, we had $1.018$864 billionmillion in cash and equivalents and short-term investments, including restricted cash. We continued to return value to our shareholders in the form of dividends and during the first sixnine months of fiscal year 2026, we paid cash dividends to common shareholders of $589$875 million. We also paid cash to repurchase approximately $2.250 billion of our common stock during the six-monthnine-month period. In connection with the Transaction, we received a $4 billion cash distribution which was used to fund our second quarter share repurchases and debt repayments, as further discussed in Notes 4 and 14 in the Notes to Condensed Consolidated Financial Statements.

Each reporting period and given our worldwide operations, we face exposure to our results of operations from changes in foreign currencies. We calculate translational foreign currency impacts by converting our current-period local currency financial results using the prior-period foreign currency exchange rates and comparing these adjusted amounts to our current-period results, which allows us to compare results between periods as if exchange rates had remained constant period-over-period. The secondthird quarter fiscal year 2026 impact of foreign currency on our revenues, which is primarily translational, is provided above. The translational impact on our earnings is provided further below. We evaluate our results of operations on both a reported and a foreign currency-neutral basis. As exchange rates are an important factor in understanding period-to-period comparisons, we believe the presentation of results on a foreign currency-neutral basis, excluding translational foreign currency impacts, in addition to reported results helps improve investors’ ability to understand our operating results and evaluate our performance in comparison to prior periods. We use results on a foreign currency-neutral basis as one measure to evaluate our performance. These results should be considered in addition to, not as a substitute for, results reported in accordance with U.S. generally accepted accounting principles (“GAAP”). Results on a foreign currency-neutral basis, as we present them, may not be comparable to similarly titled measures used by other companies and are not measures of performance presented in accordance with U.S. GAAP.

The following summarizes secondthird quarter Medical Essentials revenues by organizational unit:

The Medical Essentials segment’s revenue growth in the secondthird quarter of 2026 primarily reflected the following:

•BothStrong U.S. performance in the Medication Delivery Solutions andunit’s SpecimenVascular Access Management unitsportfolio wereattributable unfavorablyto impactedshare gains and higher utilization of infusion sets in the current-year period due to a prior-period disruption in fluid supply, partially offset by unfavorable impacts of market dynamics in China, including VoBP.

Medical Essentials segment total revenues for the six-monthnine-month periods were as follows:

The Medical Essentials segment’s income for the three and six-monthnine-month periods is provided below.

The Medical Essentials segment's operating income as a percentage of revenues in the secondthird quarter of 2026 compared with the secondthird quarter of 2025 reflected the following:

•Lower gross profit margin in the secondthird quarter of 2026 compared with the secondthird quarter of 2025 primarily reflected unfavorable impacts from tariffs, higher labor costs, and foreign currency translation, and higher labor costs, partially offset by lower manufacturing costs, which resulted from continuous improvement projects,projects supplyin chainconnection optimizationwith andour otherBD productivityExcellence initiatives.operating model.

•Higher selling and administrative expense as a percentage of revenues in the secondthird quarter of 2026 compared with the secondthird quarter of 2025 primarily reflected higher selling and generalshipping andcosts administrativedue costs.to inflationary pressures.

•Research and development expense as a percentage of revenues in the secondthird quarter of 2026 was flat compared with the secondthird quarter of 2025 which primarily reflected the timing of project spending.

The following summarizes secondthird quarter Connected Care revenues by organizational unit:

The Connected Care segment’s revenue growth in the secondthird quarter of 2026 primarily reflected the following:

•GrowthStrong growth within the Medication Management Solutions unit which was primarily driven by internationala salesstrong backlog of BDcustomer RowaTMorders, favorable U.S. mix between sales-type and operating leases in the Pharmacydispensing Automationplatform, portfolioas andwell increasedas higher utilization of infusion sets,sets in the current-year period due to a prior-period disruption in fluid supply. Growth within the Medication Management Solutions unit was partially offset by an unfavorable comparison to stronger U.S. placementssales of infusionAlaris systems in the prior-year period.period that were driven by U.S. return-to-market efforts.

•The Advanced Patient Monitoring unit experienced strong volume growth across its portfolio, specifically driven by Smart Recovery, HemoSphere AltaTM and the continued adoption of Acumen IQTM Cuff and Acumen IQTM Sensor.Sensor, as well as growth in sales of consumables.

Connected Care segment total revenues for the six-monthnine-month periods were as follows:

The Connected Care segment’s income for the three and six-monthnine-month periods is provided below.

The Connected Care segment's operating income as a percentage of revenues in the secondthird quarter of 2026 compared with the secondthird quarter of 2025 reflected the following:

•HigherLower gross profit margin in the secondthird quarter of 2026 compared with the secondthird quarter of 2025 primarily reflected lower manufacturing costs, which resulted from continuous improvement projects, supply chain optimization and other productivity initiatives, as well as favorable product mix, partially offset by an unfavorable impact from tariffslower assales wellvolumes asand higher labor costs.costs, partially offset by favorable product mix and pricing.

•Higher selling and administrative expense as a percentage of revenues in the secondthird quarter of 2026 compared with the secondthird quarter of 2025 primarily reflected higher shipping,selling selling,costs associated with continued investments in strategic growth regions and higher U.S. general and administrative costs.costs due to inflationary pressures.

•Research and development expense as a percentage of revenues in the secondthird quarter of 2026 was higher compared with the secondthird quarter of 2025, which primarily reflected the timing of project spending.

The following summarizes secondthird quarter BioPharma Systems revenues:

The BioPharma Systems segment’s revenuesrevenue growth in the secondthird quarter of 2026 reflected a decline primarily driven by lower market demand for vaccines products, partially offset byreflected double-digit growth of prefillable solutions in the biologic drug category, led by sales of GLP-1 delivery products, partially offset by lower market demand for vaccine products.

BioPharma Systems segment revenues for the six-monthnine-month periods were as follows:

The BioPharma Systems segment’s income for the three and six-monthnine-month periods is provided below.

The BioPharma Systems segment's operating income as a percentage of revenues in the secondthird quarter of 2026 compared with the secondthird quarter of 2025 reflected the following:

•Gross profit margin in the secondthird quarter of 2026 was lowerhigher compared with the secondthird quarter of 2025 and primarily reflected unfavorable impacts from foreign currency translation, product mix, higher labor costs, and tariffs, partially offset by lower manufacturing costs, which resulted from continuous improvement projects,projects supplyin chainconnection optimizationwith our BD Excellence operating model, partially offset by unfavorable impacts from higher raw materials and otherlabor productivitycosts initiatives.due to inflationary pressures, tariffs, and pricing.

•Selling and administrative expense as a percentage of revenues in the secondthird quarter of 2026 was higherflat compared with the secondthird quarter of 2025, which primarily reflected higher general and administrative costs.2025.

•Research and development expense as a percentage of revenues in the secondthird quarter of 2026 was lower compared with the secondthird quarter of 2025, which primarily reflected certain cost containment efforts and the timing of project spending.

The following summarizes secondthird quarter Interventional revenues by organizational unit:

The Interventional segment’s revenue growth in the secondthird quarter of 2026 primarily reflected the following:

•Strength in sales of the Peripheral Intervention unit’s oncology products and RotarexTM Atherectomy System and oncology products,System, partially offset by a VoBP impact in China.

Interventional segment total revenues for the six-monthnine-month periods were as follows:

Interventional segment income for the three and six-monthnine-month periods is provided below.

The Interventional segment's operating income as a percentage of revenues in the secondthird quarter of 2026 compared with the secondthird quarter of 2025 reflected the following:

•HigherLower selling and administrative expense as a percentage of revenues in the secondthird quarter of 2026 compared with the secondthird quarter of 2025 primarily reflected lower general and administrative costs, partially offset by higher selling costs attributable to growth-accelerating initiatives.

•Research and development expense as a percentage of revenues in the secondthird quarter of 2026 was higher compared with the secondthird quarter of 2025, which primarily reflected an increase in investment to support product development.

BD’s worldwide secondthird quarter revenues by geography were as follows:

U.S. revenue growth in the secondthird quarter of 2026 reflected strong sales in both the Medical Essentials segment’s Medication Delivery Solutions unit,units, the Connected Care segment’s AdvancedMedication PatientManagement MonitoringSolutions unit, the BioPharma Systems segment, and the Interventional segment’s Peripheral Intervention and Urology and Critical Care unit.units.

Reflected in the financial results for the three and six-monthnine-month periods of fiscal years 2026 and 2025 were the following specified items:

(a)Represents amounts associated with restructuring and acquisition integration activities, which are recorded in Integration, restructuring and transaction expense and are further discussed below. Restructuring costs in the three and sixnine months ended MarchJune 31,30, 2026 include non-cash asset impairment charges of $450 millionmillion, which were recorded during the second quarter, upon our commitment to exit certain operational activities and projects which no longer align with and facilitate our current operational strategy, “Excellence Unleashed”, as further discussed in Notes 10 and 13 in the Notes to Condensed Consolidated Financial Statements.

(d)Includes amortization and other adjustments related to the purchase accounting for acquisitions. BD’s amortization expense is recorded in Cost of products sold. The amountsamount in the threenine-month and six-month periodsperiod of 2025 includeincludes $162charges of $336 million and $342 million, respectively, recorded due to a fair value step-up adjustment relating to Advanced Patient Monitoring's inventory on the acquisition date.

(e)Includes certain (income) expense items which are not part of ordinary operations and affect the comparability of the periods presented. Such items may include certain product remediation costs, amounts related to certain legal matters, certain investment gains and losses, certain asset impairment charges, and certain pension settlement costs. The amounts presented includeincluded the following:

•The amounts in the three and six months ended March 31, 2026 included charges of $52 million and $63 million, respectively, and the amounts in the three and six months ended March 31, 2025 included charges of $32 million and $60 million, respectively,Charges recorded to Other operating expense, net, related to various legal matters. These charges were $75 million and $64 million in the nine-month periods of fiscal years 2026 and 2025, respectively. Additional disclosures regarding legislative and legal matters are provided in Note 6 in the Notes to Condensed Consolidated Financial Statements.

•The amounts in the three and sixnine-month monthsperiods endedof Marchfiscal 31,years 2026 and 2025 also included pension settlement costs of $25 million, recorded to Other income (expense), net, as further discussed in Note 9 in the Notes to Condensed Consolidated Financial Statements.

The comparison of gross profit margin for the three and six-monthnine-month periods of fiscal years 2026 and 2025 reflected the following impacts:

The favorableimpact impactfrom specified items on gross margin for the threenine-month and six-month periodsperiod of 2026 from specified items reflected a favorable comparison to specified items recorded in the prior-year periods,period, which included impactsan impact of $162$336 million and $342 million, respectively, resulting from a fair value step-up adjustment relating to Advanced Patient Monitoring's inventory on the acquisition date. Additionally, specified items in the threenine-month and six-month-periodsperiod of 2026 included $42$57 million of charges recorded to adjust the estimate of future product remediation costs as compared to $76$98 million and $98 million, respectively, in the prior-year three and six-month-periods.nine-month-period.

Operating performance in the three and six-monthnine-month periods of 2026 compared with the prior-year periodperiods primarily reflected tariffs and higher labor costs, as well as charges recorded in the Interventional segment to recognize 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. These impacts were partially offset by lower manufacturing costs resulting from our ongoing continuous improvement projects,projects supplyin chainconnection optimization,with andour otherBD productivityExcellence initiatives.operating model.

A summary of operating expenses for the three and six-monthnine-month periods of fiscal years 2026 and 2025 is as follows: