NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2026
Note 1 – Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and, in the opinion of the management of Becton, Dickinson and Company (the "Company" or "BD"), include all adjustments which are of a normal recurring nature, necessary for a fair presentation of the financial position and the results of operations and cash flows for the periods presented. However, the financial statements do not include all information and accompanying notes required for a presentation in accordance with U.S. generally accepted accounting principles ("U.S. GAAP"). These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s 2025 Annual Report on Form 10-K.
On February 9, 2026, the Company completed the spin-off of its former Biosciences and Diagnostic Solutions business and the combination of the business with Waters Corporation (“Waters”) in a Reverse Morris Trust transaction. The historical results of the former Biosciences and Diagnostic Solutions business (which was previously BD’s Life Sciences segment) are reflected as discontinued operations in the Company’s condensed consolidated financial statements for all periods presented prior to the spin-off date. Assets and liabilities associated with the former Biosciences and Diagnostic Solutions business are classified as assets and liabilities of discontinued operations in the Company’s condensed consolidated balance sheet as of September 30, 2025. Additional disclosures regarding the spin-off and this presentation of results are provided in Note 2.
Within the financial statements and tables presented, certain columns and rows may not add due to the use of rounded numbers for disclosure purposes. Percentages and earnings per share amounts presented are calculated from the underlying amounts. The results of operations for the interim periods are not necessarily indicative of the results of operations to be expected for the full year.
Note 2 – Divestiture
On February 9, 2026, the Company completed the spin-off to BD shareholders of the Company’s former Biosciences and Diagnostic Solutions business and the combination of the business with Waters in a Reverse Morris Trust transaction (the “Transaction”). In the Transaction, BD's shareholders received shares of Waters common stock representing 39.2% of the combined company on a fully diluted basis. In connection with the Transaction, BD received a cash distribution of $4 billion from the spin-off entity, which was funded by $4 billion of indebtedness incurred by that entity. The $4 billion cash distribution received from the spin-off entity was offset by a $143 million cash distribution to the spin-off entity relating to the opening cash balance conveyed on the Transaction date and certain net working capital adjustments. Further adjustments to the net distribution may be recorded upon finalization of the post-closing net working capital settlement process. BD used $2 billion of the proceeds to repurchase BD common shares under the terms of an accelerated share repurchase program, which is further discussed in Note 4, and the remaining $2 billion was used for debt repayments, which is further discussed in Note 14. BD has received a favorable Private Letter Ruling from the Internal Revenue Service regarding matters relating to the U.S. federal income tax consequences of the Transaction.
In connection with the separation and combination, the Company and Waters entered into various agreements to effect the Transaction and provide a framework for the relationship between the Company and Waters after the Transaction close. Such agreements include the separation agreement, a transition services agreement, an employee matters agreement, a tax matters agreement, manufacturing agreements, and various lease agreements. Under these agreements the Company will continue to provide certain products and services to Waters following the completion of the Transaction. Amounts recorded to Other income (expense), net during the three and six months ended March 31, 2026 as a result of these agreements were immaterial.
The historical results of the former Biosciences and Diagnostic Solutions business that are presented within (Loss) Income from Discontinued Operations, Net of Tax are as follows:
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| Three Months Ended
March 31, | | Six Months Ended
March 31, |
| (Millions of dollars) | 2026 (a) | | 2025 | | 2026 (a) | | 2025 |
| Revenues | $ | 273 | | | $ | 792 | | | $ | 1,039 | | | $ | 1,627 | |
| Cost of products sold | 162 | | | 396 | | | 568 | | | 793 | |
| Selling and administrative expense | 78 | | | 156 | | | 242 | | | 320 | |
| Research and development expense | 35 | | | 70 | | | 106 | | | 170 | |
| Integration, restructuring and transaction impacts | — | | | (3) | | | 4 | | | 1 | |
| Other operating expense, net | 204 | | | 10 | | | 241 | | | 10 | |
| Total Operating Costs and Expenses | 479 | | | 629 | | | 1,161 | | | 1,293 | |
| Operating (Loss) Income | (206) | | | 163 | | | (122) | | | 334 | |
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| Other expense, net | (1) | | | (1) | | | (4) | | | (3) | |
| (Loss) Income from Discontinued Operations Before Income Taxes | (207) | | | 162 | | | (125) | | | 331 | |
| Income tax provision | 67 | | | 12 | | | 77 | | | 25 | |
| (Loss) Income from Discontinued Operations, Net of Tax | $ | (274) | | | $ | 150 | | | $ | (202) | | | $ | 306 | |
(a)Reflects results through to the February 9, 2026 Transaction date.
Other operating expense, net above consists of costs incurred to execute the Transaction, as well as consulting, legal, tax, other advisory services, and other incremental costs directly related to separation activities. Costs incurred for ongoing post-separation activities, including employee costs, professional fees, and other costs for transitionary activities undertaken to establish stand-alone operations and information systems, are recorded as Other operating expense, net within Net (Loss) Income from Continuing Operations for the three and six months ended March 31, 2026.
The following amounts associated with the former Biosciences and Diagnostic Solutions business are classified as assets and liabilities of discontinued operations in the Company’s condensed consolidated balance sheet at September 30, 2025:
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| (Millions of dollars) | | September 30,
2025 |
| Assets | | |
| Cash and equivalents | | $ | 74 | |
| Trade receivables, net | | 598 | |
| Inventories | | 745 | |
| Prepaid expenses and other | | 129 | |
| Current Assets of Discontinued Operations | | 1,545 | |
| | |
| Property, Plant and Equipment, Net | | 614 | |
| Goodwill | | 648 | |
| Other Intangibles, Net | | 179 | |
| Other Assets | | 673 | |
| Noncurrent Assets of Discontinued Operations | | $ | 2,114 | |
| | |
| Liabilities | | |
| Accounts payable | | $ | 200 | |
| Accrued expenses and other current liabilities | | 293 | |
| Salaries, wages and related items | | 155 | |
| Current Liabilities of Discontinued Operations | | 648 | |
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| Long-Term Employee Benefit Obligations | | 41 | |
| Deferred Income Taxes and Other Liabilities | | 301 | |
| Noncurrent Liabilities of Discontinued Operations | | $ | 342 | |
The Company recorded the net impact of the $3.857 billion net cash distribution received and its distribution of net assets to the spin-off entity, based on the carrying amounts of the net assets as of February 9, 2026, as an increase in Retained earnings. The Company also recorded a net decrease to Accumulated other comprehensive loss of $39 million to derecognize foreign currency translation losses which were attributable to the spin-off entity.
In connection with the Transaction, all outstanding (vested and unvested) BD share-based awards that had been granted to former Biosciences and Diagnostic Solutions business employees transferred to the spin-off entity were converted into Waters awards. These awards were intended to preserve the same intrinsic value, as well as general terms and conditions, of the original BD awards, as required by the terms of the BD awards. The Company also adjusted share-based awards outstanding to BD employees, with the intention that the intrinsic value of these awards after the spin-off would equal the awards’ intrinsic value prior to the spin-off. These adjustments resulted in an immaterial amount of incremental compensation expense, a portion of which was recognized during the second quarter of fiscal year 2026, with the remaining amount to be recognized over the remaining term of the affected awards.
Note 3 – Accounting Changes
New Accounting Principles Not Yet Adopted
In September 2025, the Financial Accounting Standards Board (“FASB”) issued an accounting standard update to amend the criteria for capitalizing internal-use software costs. This update is intended to modernize the accounting for software costs by replacing the legacy guidance under which capitalization is based on the nature of costs and the project development stage. This update requires software capitalization to begin when (1) management has authorized and committed funding to the software project and (2) it is probable that the project will be completed and the software will be used to perform the function intended. The update is effective for the Company beginning in its fiscal year 2029, with early adoption permitted. The Company is currently assessing the potential impact of this update on its consolidated financial statements.
In November 2024, the FASB issued an accounting standard update that requires the Company to disclose more detailed information about the types of expenses (including purchases of inventory, employee compensation, depreciation, and
amortization) included in each relevant income statement expense caption. The update is effective for the Company beginning with its fiscal year 2028 reporting and for interim reporting beginning with its fiscal year 2029. Early adoption is permitted. The Company is currently evaluating the impact that this update will have on its disclosures.
In December 2023, the FASB issued an accounting standard update that requires more disaggregated information to be included annually in the income tax rate reconciliation and income taxes paid disclosures. This update is effective for the Company for its fiscal year 2026, and the Company expects to include the required disclosures in its 2026 Annual Report on Form 10-K.
Note 4 – Shareholders' Equity
Changes in certain components of shareholders' equity for the first two quarters of fiscal years 2026 and 2025 were as follows:
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| | Common
Stock Issued
at Par Value | | Capital in
Excess of
Par Value | | Retained
Earnings | | Deferred
Compensation | | Treasury Stock |
| (Millions of dollars) | Shares (in
thousands) | | Amount |
Balance at September 30, 2025 | $ | 371 | | | $ | 20,075 | | | $ | 16,622 | | | $ | 25 | | | (85,192) | | | $ | (9,808) | |
| Net income | — | | | — | | | 382 | | | — | | | — | | | — | |
Common dividends ($1.05 per share) | — | | | — | | | (299) | | | — | | | — | | | — | |
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| Issuance of shares under employee and other plans, net | — | | | (63) | | | — | | | — | | | 660 | | | (2) | |
| Share-based compensation | — | | | 91 | | | — | | | — | | | — | | | — | |
| Common stock held in trusts, net (a) | — | | | — | | | — | | | — | | | (5) | | | — | |
| Repurchase of common stock (b) | — | | | — | | | — | | | — | | | (1,315) | | | (254) | |
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Balance at December 31, 2025 | $ | 371 | | | $ | 20,103 | | | $ | 16,704 | | | $ | 25 | | | (85,853) | | | $ | (10,064) | |
| Net loss | — | | | — | | | (311) | | | — | | | — | | | — | |
Common dividends ($1.05 per share) | — | | | — | | | (290) | | | — | | | — | | | — | |
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| Issuance of shares under employee and other plans, net | — | | | (8) | | | (1) | | | 1 | | | 115 | | | 18 | |
| Share-based compensation | — | | | 73 | | | — | | | — | | | — | | | — | |
| Common stock held in trusts, net (a) | — | | | — | | | — | | | — | | | 3 | | | — | |
| Repurchase of common stock | — | | | (400) | | | — | | | — | | | (9,320) | | | (1,613) | |
| Spin-off of Biosciences and Diagnostic Solutions business (See Note 2) | — | | | — | | | 1,288 | | | — | | | — | | | — | |
Balance at March 31, 2026 | $ | 371 | | | $ | 19,768 | | | $ | 17,391 | | | $ | 26 | | | (95,054) | | | $ | (11,660) | |
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| | Common
Stock Issued
at Par Value | | Capital in
Excess of
Par Value | | Retained
Earnings | | Deferred
Compensation | | Treasury Stock |
| (Millions of dollars) | Shares (in
thousands) | | Amount |
Balance at September 30, 2024 | $ | 371 | | | $ | 19,893 | | | $ | 16,139 | | | $ | 25 | | | (81,493) | | | $ | (8,807) | |
| Net income | — | | | — | | | 303 | | | — | | | — | | | — | |
Common dividends ($1.04 per share) | — | | | — | | | (302) | | | — | | | — | | | — | |
| | | | | | | | | | | |
| Issuance of shares under employee and other plans, net | — | | | (65) | | | — | | | — | | | 679 | | | (12) | |
| Share-based compensation | — | | | 90 | | | — | | | — | | | — | | | — | |
| Common stock held in trusts, net (a) | — | | | — | | | — | | | — | | | (8) | | | — | |
| | | | | | | | | | | |
| Repurchase of common stock (b) | — | | | (150) | | | — | | | — | | | (2,637) | | | (606) | |
| Balance at December 31, 2024 | $ | 371 | | | $ | 19,768 | | | $ | 16,141 | | | $ | 25 | | | (83,459) | | | $ | (9,425) | |
| Net income | — | | | — | | | 308 | | | — | | | — | | | — | |
Common dividends ($1.04 per share) | — | | | — | | | (298) | | | — | | | — | | | — | |
| | | | | | | | | | | |
| Issuance of shares under employee and other plans, net | — | | | (6) | | | — | | | 1 | | | 78 | | | 13 | |
| Share-based compensation | — | | | 59 | | | — | | | — | | | — | | | — | |
| Common stock held in trusts, net (a) | — | | | — | | | — | | | — | | | 13 | | | — | |
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| Repurchase of common stock (b) | — | | | 150 | | | — | | | — | | | (619) | | | (150) | |
Balance at March 31, 2025 | $ | 371 | | | $ | 19,971 | | | $ | 16,150 | | | $ | 26 | | | (83,987) | | | $ | (9,561) | |
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(a)Common stock held in trusts consists of the Company’s shares held in rabbi trusts in connection with deferred compensation under the Company’s employee salary and bonus deferral plan and directors’ deferral plan.
(b)Amounts recorded to Treasury stock include excise tax on share repurchases.
Share Repurchases
In the first quarter of fiscal year 2026, the Company repurchased 1.315 million shares of its common stock for total consideration of $250 million through open market repurchases.
In the second quarter of fiscal year 2026, using a portion of the proceeds from the Transaction as further discussed in Note 2, the Company executed two accelerated share repurchase (“ASR”) agreements to repurchase an aggregate of $2 billion of its common stock. The Company accounted for the agreements as two transactions upon prepayment: (1) the aggregate initial delivery of approximately 9.320 million shares was recorded as a $1.600 billion increase to Treasury stock to recognize the acquisition of common stock acquired in a treasury stock transaction, and (2) the remaining aggregate amount of $400 million was recorded as a decrease to Capital in excess of par value to recognize a net share-settled forward sale contract indexed to the Company's own common stock. Upon final settlement of the repurchase agreements and the forward sale contracts in the third quarter of fiscal year 2026, the Company will record its receipt of additional shares as an increase to Treasury stock with an offsetting increase to Capital in excess of par value. The number of shares the Company will receive at settlement will be determined based upon the volume weighted average price of BD's shares over the term of the ASR agreements, less a discount.
In the first quarter of fiscal year 2025, the Company executed an accelerated share repurchase agreement for the repurchase of 3.256 million shares of its common stock for total consideration of $750 million. During the first quarter of fiscal year 2025, the initial delivery of 2.637 million shares for $600 million was recorded as an increase to Treasury stock to recognize the acquisition of common stock acquired in a treasury stock transaction, and the remaining 619 thousand shares were recorded as a $150 million decrease to Capital in excess of par value to recognize a net share-settled forward sale contract indexed to the Company's own common stock. Upon final settlement of the repurchase agreement and the forward sale contract in the second quarter of fiscal year 2025, the receipt of the remaining shares was recorded as an increase to Treasury stock, with an offsetting increase of $150 million recorded to Capital in excess of par value.
The share repurchases discussed above were made pursuant to repurchase programs authorized by the Board of Directors on November 3, 2021 for 10 million shares of BD common stock and January 28, 2025 for 10 million shares of BD common stock. The November 3, 2021 repurchase authorization was fully utilized during the second quarter of fiscal year 2026. On January 27, 2026, the Company’s Board of Directors authorized it to repurchase an additional 10 million shares of BD common stock. There is no expiration date for the remaining repurchase programs and, as of March 31, 2026, 11.5 million shares remained unused under these programs.
The components and changes of Accumulated other comprehensive income (loss) for the first two quarters of fiscal years 2026 and 2025 were as follows:
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| (Millions of dollars) | Total | | Foreign Currency
Translation (a) | | Benefit Plans (b) | | Cash Flow Hedges (c) | | Available-for-Sale Debt Securities | |
Balance at September 30, 2025 | $ | (1,895) | | | $ | (1,353) | | | $ | (636) | | | $ | 94 | | | $ | — | | |
| Other comprehensive income before reclassifications, net of taxes | 28 | | | 17 | | | — | | | 11 | | | — | | |
| Amounts reclassified into income, net of taxes | 9 | | | — | | | 11 | | | (1) | | | — | | |
Balance at December 31, 2025 | $ | (1,857) | | | $ | (1,336) | | | $ | (625) | | | $ | 104 | | | $ | — | | |
| Other comprehensive income (loss) before reclassifications, net of taxes | 31 | | | 58 | | | (29) | | | 5 | | | (3) | | |
| Amounts reclassified into income, net of taxes | 24 | | | — | | | 28 | | | (4) | | | — | | |
| Spin-off of Biosciences and Diagnostic Solutions business (See Note 2) | 39 | | | 39 | | | — | | | — | | | — | | |
Balance at March 31, 2026 | $ | (1,764) | | | $ | (1,239) | | | $ | (626) | | | $ | 105 | | | $ | (3) | | |
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| (Millions of dollars) | Total | | Foreign Currency
Translation (a) | | Benefit Plans (b) | | Cash Flow Hedges (c) | | Available-for-Sale Debt Securities |
Balance at September 30, 2024 | $ | (1,732) | | | $ | (1,244) | | | $ | (557) | | | $ | 70 | | | $ | (1) | |
| Other comprehensive income before reclassifications, net of taxes | 49 | | | 46 | | | — | | | 3 | | | — | |
| Amounts reclassified into income, net of taxes | 6 | | | — | | | 8 | | | (2) | | | — | |
Balance at December 31, 2024 | $ | (1,676) | | | $ | (1,199) | | | $ | (549) | | | $ | 72 | | | $ | (1) | |
| Other comprehensive loss before reclassifications, net of taxes | (47) | | | (48) | | | — | | | — | | | — | |
| Amounts reclassified into income, net of taxes | 7 | | | — | | | 8 | | | — | | | — | |
Balance at March 31, 2025 | $ | (1,716) | | | $ | (1,246) | | | $ | (541) | | | $ | 72 | | | $ | (1) | |
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(a)Includes net (losses) relating to net investment hedges and amounts relating to intercompany balances of a long-term investment nature.
(b)Other comprehensive loss relating to benefit plans during the three months ended March 31, 2026 reflects a net loss, primarily related to the U.S. defined benefit pension plan, that was recognized upon the Company’s remeasurement of plan liabilities, as of January 31, 2026, due to plan curtailments related to the Transaction.
(c)Relates primarily to foreign exchange contracts. Additional disclosures regarding the Company's derivatives are provided in Note 12.
The tax impacts for amounts recognized in other comprehensive income before reclassifications and for reclassifications out of Accumulated other comprehensive income (loss) relating to benefit plans and cash flow hedges during the three and six months ended March 31, 2026 and 2025 were immaterial to the Company's consolidated financial results.
Note 5 – Earnings per Share
The weighted average common shares used in the computations of basic and diluted earnings per share (shares in thousands) were as follows:
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| | Three Months Ended
March 31, | | Six Months Ended
March 31, |
| | 2026 | | 2025 | | 2026 | | 2025 |
| Average common shares outstanding | 280,640 | | | 287,293 | | | 283,138 | | | 288,411 | |
| Dilutive share equivalents from share-based plans (a) | — | | | 444 | | | 1,496 | | | 782 | |
| Average common and common equivalent shares outstanding – assuming dilution | 280,640 | | | 287,737 | | | 284,634 | | | 289,193 | |
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| Share equivalents excluded from the diluted shares outstanding calculation (a)(b) | 1,682 | | | 2,734 | | | 649 | | | 2,734 | |
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(a)For the three months ended March 31, 2026, 1.033 million share equivalents from share-based plans were excluded from the computation of diluted loss per share, as their inclusion would have been antidilutive due to the Company’s net loss for the period.
(b)Share equivalents excluded from the diluted shares outstanding calculation include awards with an exercise price that is greater than the average market price of the Company’s common shares.
Note 6 – Contingencies
The Company is involved, both as a plaintiff and a defendant, in various legal proceedings that arise in the ordinary course of business, including, without limitation, product liability and environmental matters in certain U.S. and international locations. Given the uncertain nature of litigation generally, the Company is not able, in all cases, to reasonably estimate the amount or range of loss that could result from an unfavorable outcome of litigation in which the Company is a party. Even if the Company believes it has meritorious defenses, from time to time the Company engages in settlement discussions and mediation and considers 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, which may be confidential and could be significant and result in charges in excess of accruals.
In accordance with U.S. GAAP, the Company establishes accruals to the extent losses are probable and reasonably estimable. With respect to putative class action lawsuits and certain tort actions in the United States and certain of the Canadian lawsuits described below or in its other Securities and Exchange Commission (“SEC”) filings, the Company may not be able to determine if a probable loss exists or estimate a range of reasonably possible losses for the following reasons: (i) all or certain of the proceedings are in early stages; (ii) the Company has not received and reviewed complete information regarding all or certain of the plaintiffs and their medical conditions; and/or (iii) there are significant factual issues to be resolved. In addition, there is uncertainty as to the likelihood of a class being certified or the ultimate size of any class. With respect to certain of the civil investigative demands (“CIDs”) served by the Department of Justice, which are discussed below, the Company may not be able to determine if a probable loss exists, unless otherwise noted, for the following reasons: (i) all or certain of the proceedings are in early stages; and/or (ii) there are significant factual and legal issues to be resolved.
Product Liability Matters
As of March 31, 2026 and September 30, 2025, the Company was defending approximately 6,995 and 6,905, respectively, product liability claims involving its line of hernia repair devices (collectively, the “Hernia Product Claims”). In the fourth quarter of fiscal year 2024, the Company entered into a settlement agreement to resolve the vast majority of its existing hernia litigation, and the amounts payable pursuant to this settlement agreement are included within the Company’s recorded accrual for this matter and will be paid out over a multi-year period.
The majority of the claims are currently pending in a coordinated proceeding in Rhode Island State Court and in a federal multi-district litigation (“MDL”) established in the Southern District of Ohio, but claims are also pending in other state and/or federal court jurisdictions. In addition, outstanding claims include multiple putative class actions in Canada. Generally, the Hernia Product Claims seek damages for personal injury allegedly resulting from use of the products. The Company believes that it has meritorious defenses and is vigorously defending itself in these matters. There are no trials currently scheduled.
The Company also continues to be a defendant in certain other mass tort litigation. As of March 31, 2026, the Company is defending product liability claims involving the Company’s line of pelvic mesh products, the majority of which are pending in a coordinated proceeding in New Jersey Superior Court, and the Company’s line of inferior vena cava filter products, which are pending in various jurisdictions. As of March 31, 2026, the Company is defending approximately 3,250 product liability claims involving the Company’s line of implantable ports, the majority of which are pending in an MDL in the United States District Court for the District of Arizona. The first scheduled trial commenced in April 2026 and the next is scheduled in August 2026. The Company believes that it has meritorious defenses and is vigorously defending itself in these matters.
In most product liability litigations like those described above, plaintiffs allege a wide variety of claims, ranging from allegations of serious injury caused by the products to efforts to obtain compensation notwithstanding the absence of any injury. In many of these cases, the Company has not yet received and reviewed complete information regarding the plaintiffs and their medical conditions and, consequently, is unable to fully evaluate the claims. The Company expects that it will receive and review additional information regarding any remaining unsettled product liability matters.
Government Matters
In April 2019, the Department of Justice served the Company and CareFusion with CIDs seeking information regarding certain of CareFusion’s contracts with the Department of Veteran’s Affairs, some dating back more than 10 years, for certain products, including AlarisTM and PyxisTM devices, in connection with a civil investigation of possible violations of the False Claims Act, and the government later expanded the investigation to include several additional contracts. The government has made several requests for documents and interviews or depositions of Company personnel and set forth a preliminary case assessment. The Company is cooperating with the government, responding to its requests and the assessment.
In April 2023, the Department of Justice served the Company with a CID seeking information regarding the Company’s GenesisTM container products in connection with an investigation of possible violations of the False Claims Act. The government has requested documents and set forth a preliminary case assessment, and the Company is cooperating with the government, responding to these requests and the assessment.
Other Matters
The Company was sued in state and federal courts in Georgia by plaintiffs who work or reside near Company facilities in Covington, Georgia, where ethylene oxide (“EtO”) sterilization activities take place. The federal cases have been dismissed and refiled in state court. The plaintiffs in the cases seek compensatory and punitive damages. Pursuant to Georgia statute, punitive damages in these cases are generally capped at $250,000 per claimant, unless the plaintiff can prove that the Company acted, or failed to act, with a specific intent to cause harm, which the court to date has cast as a jury issue, meaning that the jury could negate the cap. The cases allege a variety of injuries, including but not limited to multiple types of cancer, allegedly attributable to exposure to EtO. As of March 31, 2026, the Company has approximately 430 of such suits involving approximately 440 plaintiffs asserting individual personal injury claims; approximately 50 of the cases also allege injury caused by exposure to a chemical of another defendant entirely unrelated to the Company. In addition, the Company has become aware of certain unfiled claims that have been asserted or threatened against the Company but lack sufficient information to assess the validity. The Company believes that it has meritorious defenses and is vigorously defending itself in these matters.
On May 2, 2025, the compensatory phase of the first trial in these cases resulted in the jury awarding the plaintiff $20 million in compensatory damages with the matter proceeding to a punitive phase. On May 6, 2025, the jury made a punitive damages finding in the amount of $50 million, which was set aside by the court as the judge declared a mistrial as to this phase of the trial. The mistrial was declared because the jury was not unanimous regarding the issue of specific intent to cause harm, which is required in a case like this for a punitive damages award above a $250,000 cap. After declaring a mistrial in the punitive phase, the court asked for briefing as to potential broader ramifications of that declaration, ruling on September 15, 2025, that a retrial would only be on the issue of specific intent to cause harm and not a complete mistrial which the Company sought. The trial court also permitted the Company to seek appellate review, which the Georgia Court of Appeals accepted on October 23, 2025. The appeal is now fully briefed and oral argument is set for May 14, 2026. At this time, no judgment has been entered in the case, which is still pending. No amounts have been accrued with respect to this individual case because there is no judgment and there are a multitude of strong appellate issues, which the Company is pursuing.
In December 2025, the Company was served with a complaint by competitor TELA Bio, Inc., making antitrust allegations relating to certain sales of hernia devices. The Company disputes the allegations, has filed a motion to dismiss and is otherwise vigorously defending itself in this matter.
In 2015, legislation was enacted in Italy which requires medical technology companies to make payments to the Italian government if Italy’s medical device expenditures exceed annual regional expenditure ceilings. The amount of these payments
is based on the amount by which the regional ceilings for the given year were exceeded. Considerable uncertainty has existed regarding the enforceability and implementation of this payback legislation since it was enacted and the Company, as well as other medical device companies, have filed appeals which challenge the enforceability of this legislation. In July 2024, the Italian Constitutional Court affirmed the constitutionality of the medical device payback legislation. During its fourth quarter of fiscal year 2025, the Company made a payment to settle its obligations for calendar years 2015 through 2018 in accordance with an Economy Decree issued by the Italian government in June 2025 which allowed companies, upon their closure of all pending litigation relating to amounts due for calendar years 2015 through 2018, to pay 25% of the invoiced amounts for those years. No payment requests have been issued to the Company for any subsequent years and ultimate resolution for amounts that may be due for these later years is unknown at this time. As such, it is possible that the amount of the Company’s liability could differ from its currently accrued amount.
In May 2024, CareFusion 303, Inc., the Company’s subsidiary that manufactures its BD PyxisTM dispensing equipment, received a Form 483 Notice following an inspection from the U.S. Food and Drug Administration (“FDA”) that contained observations of non-conformance with the FDA’s Quality System and Medical Device Reporting (“MDR”) regulations. In November 2024, the Company received a Warning Letter following the inspection of its Dispensing quality management system at its facility located in San Diego, California, citing certain alleged violations of the quality system regulations, MDR regulation, the corrections and removals reporting regulation and law. The Company’s liability recorded for estimated future costs associated with certain actions required to respond to the Warning Letter and to address the non-conformities was $68 million as of March 31, 2026. Since receipt of the Warning Letter, the Company has continued to assess, based upon currently available information, the resources that will be required to address the non-conformities cited in the Warning Letter while optimizing the customer experience and ensuring the Company’s remediation plans can be fully executed within its planned timelines. The Company submitted a comprehensive response to address the FDA’s feedback in the Warning Letter, which committed to implementing additional corrective actions; however, no assurances can be given regarding further action by the FDA as a result of the noted non-conformities, or that corrective actions proposed and taken by CareFusion 303, Inc. will be adequate to address the Warning Letter. Any failure to adequately address this Warning Letter may result in regulatory actions initiated by the FDA without further notice, which may include, but are not limited to, seizure, injunction and civil monetary penalties. As a result, the ultimate resolution of this Warning Letter and its impact on the Company’s operations is unknown at this time, and it is possible that the amount of the Company’s liability could exceed its currently accrued amount.
On April 30, 2026, BD’s El Paso manufacturing facility received a Warning Letter from the FDA following an inspection conducted in October 2025 related to drug-device combination products manufactured at the site, including ChloraPrepTM and PurPrepTM (the “El Paso Warning Letter”). The El Paso Warning Letter cited deficiencies related to compliance with current good manufacturing practice requirements, including inadequate investigation of deviations, complaints, and out-of-specification results; insufficient laboratory controls and verification activities supporting product quality and sterility assurance; and shortcomings in equipment cleaning, contamination control, and facility design. The FDA also raised concerns regarding repeat observations, terminal sterilization processes, and the authority and effectiveness of the Quality Unit, as well as additional issues not previously identified in the inspectional observations. As requested by the El Paso Warning Letter, BD is preparing a comprehensive response to address the FDA’s feedback, which may include implementing additional corrections and corrective actions, including potential product recalls; however, no assurances can be given as to whether the FDA may take further action in connection with any of the non-conformities and deficiencies cited in the El Paso Warning Letter, or whether corrective and preventive actions proposed and taken by BD will be adequate to address such non-conformities and deficiencies. As of May 6, 2026, BD has voluntarily determined to put ChloraPrepTM and PurPrepTM on ship hold in the U.S. while it conducts additional final release testing based on the FDA’s request detailed in the El Paso Warning Letter. The Company intends to resume shipment upon receipt of satisfactory final release test results. Any failure to adequately address the El Paso Warning Letter may result in additional regulatory actions initiated by the FDA without further notice, which may include, but are not limited to, seizure or injunction, which may be settled through a consent decree. Until the violations are completely addressed and the FDA confirms the site’s compliance, the FDA is likely to withhold the issuance of Export Certificates on drug or drug-led combination products manufactured at the El Paso site and withhold approval of new applications or supplements that list the site as a drug manufacturer. The ultimate resolution of the El Paso Warning Letter and its impact on BD’s operations is unknown at this time. While BD believes, based upon currently available information, that a loss associated with this matter is probable, BD is not able to reasonably estimate the amount or range of any such loss at this time.
The Company is also involved both as a plaintiff and a defendant in other legal proceedings and claims that arise in the ordinary course of business. The Company believes that it has meritorious defenses and is vigorously defending itself in each of these matters.
The Company is a potentially responsible party to a number of federal administrative proceedings in the United States brought under the Comprehensive Environment Response, Compensation and Liability Act, also known as “Superfund,” and similar state laws. The Company also is subject to administrative proceedings under environmental laws in jurisdictions outside the
United States. The affected sites are in varying stages of development. In some instances, the remediation has been completed, while in others, environmental studies are underway or commencing. For several sites, there are other potentially responsible parties that may be jointly or severally liable to pay all or part of cleanup costs. While it is not feasible to predict the outcome of these proceedings, based upon the Company’s experience, current information and applicable law, the Company does not expect these proceedings to have a material adverse effect on its consolidated results of operations and/or consolidated cash flows.
Litigation Accruals
Except as otherwise noted, the Company cannot predict the outcome of the other legal matters discussed above, nor can it predict whether any outcome will have a material adverse effect on the Company’s consolidated results of operations and/or consolidated cash flows. Further, the Company may not be able to determine if a probable loss exists for certain of the other legal matters discussed above, and accordingly, the Company has recorded no provisions for such matters in its consolidated results of operations.
The Company regularly monitors and evaluates the status of product liability and other litigated matters, and may, from time-to-time, engage in settlement discussions and mediations taking into consideration, among other things, developments in the litigation and the risks and uncertainties associated therewith. These activities have resulted in confidential settlements and going forward could result in further settlements, the terms of which may be confidential and could be significant and result in charges in excess of accruals. A determination of the accrual amounts for these contingencies is made after analysis of each litigation matter. When appropriate, the accrual is developed with the consultation of outside counsel regarding the nature, timing, and extent of each matter.
During the three and six months ended March 31, 2026, the Company recorded pre-tax charges to Other operating expense, net, of approximately $52 million and $63 million, respectively, related to certain of the matters discussed above.
The Company considers relevant information when estimating its accruals for product liability and other legal matters, including, but not limited to: the nature, number, and quality of unfiled and filed claims; the rate of claims being filed; the status of settlement discussions with plaintiffs’ counsel; the allegations and documentation supporting or refuting such allegations; publicly available information regarding similar settlements; historical information regarding settlements involving the Company; and the stage of litigation. Because currently available information is often limited, there is inherent uncertainty and volatility relating to the Company’s estimates of liability. As additional information becomes available, the Company records adjustments to its accruals as required.
Accruals for the Company’s product liability claims and certain other legal matters, which are discussed above, as well as legal defense costs for certain of these matters, amounted to approximately $1.7 billion and $1.8 billion at March 31, 2026 and September 30, 2025, respectively. A substantial portion of these accruals are recorded within Deferred Income Taxes and Other Liabilities and the remainder are recorded within Total Current Liabilities on the Company’s condensed consolidated balance sheets. The Company’s accruals for product liability and certain other legal matters as of March 31, 2026, as compared with September 30, 2025, primarily reflected payments of settlements and legal fees, partially offset by an increase in accruals for certain matters.
The particular outcome in any one trial is typically not representative of potential outcomes of all cases or claims. Because any accrual already contemplates a wide range of possible outcomes, including those with a de minimis value, individual outcomes generally do not impact the value of other cases in the total case inventory or the overall product liability accrual.
In view of the uncertainties discussed above, the Company could incur charges in excess of any currently established accruals and, to the extent available, liability insurance. In the opinion of management, any such future charges, individually or in the aggregate, could have a material adverse effect on the Company’s consolidated results of operations, financial condition, and/or consolidated cash flows.
Note 7 – Revenues
The Company’s policies for recognizing sales have not changed from those described in the Company’s 2025 Annual Report on Form 10-K. The Company sells a broad range of medical supplies and devices which are distributed through independent distribution channels and directly by BD through sales representatives. End-users of the Company's products include healthcare institutions, physicians, clinical laboratories, the pharmaceutical industry and the general public. Periodically, the Company generates revenues attributable to licensing, which includes consideration received in exchange for the use of BD intellectual property by third parties.
Measurement of Revenues
The Company’s allowance for doubtful accounts reflects the current estimate of credit losses expected to be incurred over the life of its trade receivables. Such estimated credit losses are determined based on historical loss experiences, customer-specific credit risk, and reasonable and supportable forward-looking information, such as country or regional risks that are not captured in the historical loss information. The allowance for doubtful accounts for trade receivables is not material to the Company's consolidated financial results.
The Company's gross revenues are subject to a variety of deductions, which are recorded in the same period that the underlying revenues are recognized. Such variable consideration includes rebates, sales discounts and sales returns. The Company’s rebate liabilities are classified as an offset to Trade receivables, net, or as Payables, accrued expenses and other current liabilities, depending on the form of settlement and were $880 million and $817 million at March 31, 2026 and September 30, 2025, respectively. The impact of other forms of variable consideration, including sales discounts and sales returns, is not material to the Company's revenues.
Effects of Revenue Arrangements on Condensed Consolidated Balance Sheets
Capitalized contract costs associated with the costs to fulfill contracts for certain products in the Medication Management Solutions organizational unit are immaterial to the Company's condensed consolidated balance sheets. Commissions relating to revenues recognized over a period longer than one year are recorded as assets, which are amortized over the period over which the revenues underlying the commissions are recognized. Capitalized contract costs related to such commissions are immaterial to the Company's condensed consolidated balance sheets.
Contract liabilities for unearned revenue that is allocable to performance obligations, such as extended warranty and software maintenance contracts, which are performed over time, were approximately $337 million and $336 million and as of March 31, 2026 and September 30, 2025, respectively, and are included in Payables, accrued expenses and other current liabilities on the Company’s condensed consolidated balance sheets. The Company's liability for product warranties provided under its agreements with customers is not material to its condensed consolidated balance sheets.
Remaining Performance Obligations
The Company's obligations relative to service contracts and pending installations of equipment, primarily in the Company's Medication Management Solutions unit, represent unsatisfied performance obligations of the Company. The revenues under existing contracts with original expected durations of more than one year, which are attributable to products and/or services that have not yet been installed or provided are estimated to be approximately $2.3 billion at March 31, 2026. The Company expects to recognize the majority of this revenue over the next three years.
Within the Company's Medication Management Solutions and Medication Delivery Solutions units, some contracts also contain minimum purchase commitments of consumables, and the future sales of these consumables represent additional unsatisfied performance obligations of the Company. The revenue attributable to the unsatisfied minimum purchase commitment-related performance obligations, for contracts with original expected durations of more than one year, is estimated to be approximately $2.0 billion at March 31, 2026. This revenue will be recognized over the customer relationship periods.
Disaggregation of Revenues
A disaggregation of the Company's revenues by segment, organizational unit and geographic region is provided in Note 8.
Note 8 – Segment Data
The Company's segments are strategic businesses that are managed separately because each one develops, manufactures and markets distinct products and services. Effective October 1, 2025, the Company reorganized its organizational units into five worldwide business segments: BD Medical Essentials (“Medical Essentials”), BD Connected Care (“Connected Care”), BD BioPharma Systems (“BioPharma Systems”), BD Interventional (“Interventional”) and BD Life Sciences (“Life Sciences”). The segment reorganization did not affect the principal product lines of any organizational unit.
Subsequent to the spin-off of the Company’s former Biosciences and Diagnostic Solutions business (which was previously the Life Sciences segment) and the combination of the business with Waters on February 9, 2026, the Life Sciences segment was eliminated. Post-separation, the Company’s segment reporting structure consists of the following four remaining segments and their respective organizational units:
| | | | | |
| Reportable Segment: | Organizational Units: |
Medical Essentials | Medication Delivery Solutions, Specimen Management |
Connected Care | Medication Management Solutions, Advanced Patient Monitoring |
BioPharma Systems | BioPharma Systems (formerly Pharmaceutical Systems) |
Interventional | Urology and Critical Care, Peripheral Intervention, Surgery |
| |
Historical Life Sciences segment amounts prior to the separation are reflected as discontinued operations in the Company’s condensed consolidated financial statements, as further discussed in Note 2.
The Company’s Chairman, Chief Executive Officer and President is its chief operating decision maker (“CODM”). The Company presents segment results on a consistent basis with internal reporting regularly reviewed by the CODM, on both a reported and a foreign currency-neutral basis, to evaluate business segment performance as compared to budget and allocate resources such as capital and headcount. Business segment performance is evaluated based on operating income before taxes excluding certain corporate expenses and other adjustments that are not considered part of ordinary operations. Such adjustments primarily include: amortization and other adjustments related to the purchase accounting for acquisitions; certain product remediation costs; amounts related to certain legal matters; costs associated with restructuring and integration activities; acquisition-related transaction costs; and separation-related items. These amounts are included in the reconciliation of segment operating income to the Company’s Income Before Income Taxes below.
The Company’s CODM does not receive any asset information by business segment and, as such, the Company does not report asset information by business segment.
The Company's prior-period segment amounts have been recast in the tables below to conform to the new segment structure and to the current-period segment income presentation, on a continuing operations basis.
Revenues by segment, organizational unit and geographical areas for the three and six months ended March 31, 2026 and 2025 are detailed below. The Company has no material intersegment revenues.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | |
| Three Months Ended March 31, |
| (Millions of dollars) | 2026 | | 2025 |
| United States | | International | | Total | | United States | | International | | Total |
| Medical Essentials | | | | | | | | | | | |
| Medication Delivery Solutions | $ | 712 | | | $ | 451 | | | $ | 1,163 | | | $ | 687 | | | $ | 430 | | | $ | 1,117 | |
| Specimen Management | 253 | | | 231 | | | 484 | | | 242 | | | 213 | | | 456 | |
| Total segment revenues | $ | 965 | | | $ | 682 | | | $ | 1,647 | | | $ | 929 | | | $ | 643 | | | $ | 1,573 | |
| | | | | | | | | | | |
| Connected Care | | | | | | | | | | | |
| Medication Management Solutions | $ | 660 | | | $ | 168 | | | $ | 829 | | | $ | 662 | | | $ | 149 | | | $ | 811 | |
| Advanced Patient Monitoring | 180 | | | 112 | | | 292 | | | 155 | | | 102 | | | 257 | |
| Total segment revenues | $ | 840 | | | $ | 280 | | | $ | 1,120 | | | $ | 817 | | | $ | 251 | | | $ | 1,068 | |
| | | | | | | | | | | |
| BioPharma Systems | $ | 178 | | | $ | 411 | | | $ | 590 | | | $ | 149 | | | $ | 426 | | | $ | 575 | |
| | | | | | | | | | | |
| Interventional | | | | | | | | | | | |
| Peripheral Intervention | $ | 279 | | | $ | 236 | | | $ | 515 | | | $ | 269 | | | $ | 212 | | | $ | 481 | |
| Urology and Critical Care | 351 | | | 79 | | | 430 | | | 323 | | | 77 | | | 400 | |
| Surgery | 303 | | | 109 | | | 411 | | | 289 | | | 94 | | | 383 | |
| Total segment revenues | $ | 933 | | | $ | 423 | | | $ | 1,357 | | | $ | 880 | | | $ | 384 | | | $ | 1,264 | |
| | | | | | | | | | | |
| Total Company revenues from continuing operations | $ | 2,917 | | | $ | 1,797 | | | $ | 4,714 | | | $ | 2,776 | | | $ | 1,704 | | | $ | 4,480 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Six Months Ended March 31, |
| (Millions of dollars) | 2026 | | 2025 |
| United States | | International | | Total | | United States | | International | | Total |
| Medical Essentials | | | | | | | | | | | |
| Medication Delivery Solutions | $ | 1,405 | | | $ | 886 | | | $ | 2,291 | | | $ | 1,381 | | | $ | 860 | | | $ | 2,241 | |
| Specimen Management | 498 | | | 453 | | | 951 | | | 481 | | | 437 | | | 917 | |
| Total segment revenues | $ | 1,903 | | | $ | 1,340 | | | $ | 3,242 | | | $ | 1,861 | | | $ | 1,297 | | | $ | 3,158 | |
| | | | | | | | | | | |
| Connected Care | | | | | | | | | | | |
| Medication Management Solutions | $ | 1,339 | | | $ | 324 | | | $ | 1,663 | | | $ | 1,321 | | | $ | 291 | | | $ | 1,612 | |
| Advanced Patient Monitoring | 358 | | | 231 | | | 589 | | | 314 | | | 215 | | | 528 | |
| Total segment revenues | $ | 1,697 | | | $ | 555 | | | $ | 2,252 | | | $ | 1,635 | | | $ | 506 | | | $ | 2,141 | |
| | | | | | | | | | | |
| BioPharma Systems | $ | 329 | | | $ | 690 | | | $ | 1,019 | | | $ | 253 | | | $ | 740 | | | $ | 993 | |
| | | | | | | | | | | |
| Interventional | | | | | | | | | | | |
| Peripheral Intervention | $ | 545 | | | $ | 456 | | | $ | 1,000 | | | $ | 522 | | | $ | 432 | | | $ | 954 | |
| Urology and Critical Care | 690 | | | 167 | | | 857 | | | 629 | | | 160 | | | 789 | |
| Surgery | 613 | | | 217 | | | 829 | | | 591 | | | 187 | | | 778 | |
| Total segment revenues | $ | 1,847 | | | $ | 839 | | | $ | 2,687 | | | $ | 1,742 | | | $ | 779 | | | $ | 2,521 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| Total Company revenues from continuing operations | $ | 5,776 | | | $ | 3,424 | | | $ | 9,200 | | | $ | 5,490 | | | $ | 3,322 | | | $ | 8,813 | |
The following tables include the significant expenses, by segment, that are regularly provided to the CODM and a reconciliation of segment operating income to Income from Continuing Operations Before Income Taxes.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended March 31, 2026 | | | | | | | | | |
| | | | | | | | | |
| (Millions of dollars) | Medical | | Connected | | BioPharma | | | | |
| Essentials | | Care | | Systems | | Interventional | | Total |
| Revenues | $ | 1,647 | | | $ | 1,120 | | | $ | 590 | | | $ | 1,357 | | | $ | 4,714 | |
| Segment expenses: | | | | | | | | | |
| Cost of products sold | 835 | | | 490 | | | 316 | | | 429 | | | 2,070 | |
| % of revenues | 50.7 | % | | 43.7 | % | | 53.6 | % | | 31.6 | % | | |
| Selling and administrative expense | 185 | | | 190 | | | 32 | | | 277 | | | 684 | |
| % of revenues | 11.2 | % | | 17.0 | % | | 5.4 | % | | 20.4 | % | | |
| Research and development expense | 53 | | | 90 | | | 17 | | | 72 | | | 232 | |
| % of revenues | 3.2 | % | | 8.1 | % | | 2.8 | % | | 5.3 | % | | |
| Other operating expense, net | — | | | 3 | | | — | | | — | | | 3 | |
| % of revenues | — | % | | 0.3 | % | | — | % | | — | % | | |
| Segment Operating Income | $ | 574 | | | $ | 347 | | | $ | 225 | | | $ | 579 | | | $ | 1,724 | |
| % of revenues | 34.8 | % | | 31.0 | % | | 38.1 | % | | 42.7 | % | | |
| | | | | | | | | |
| Unallocated items | | | | | | | | | |
| Net interest expense | | | | (140) | |
| Corporate administrative and other unallocated (a) | | | (595) | |
| Specified items: | | | | |
| Purchase accounting adjustments (b) | | | (368) | |
| Integration, restructuring and transaction expense (c) | | | | (533) | |
| Product, litigation, and other items (d) | | | (132) | |
| | | | |
| Separation-related items (e) | | | (40) | |
| Impacts of debt extinguishment | | | 122 | |
| Income from Continuing Operations Before Income Taxes | | | $ | 39 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended March 31, 2025 | | | | | | | | | |
| | | | | | | | | |
| (Millions of dollars) | Medical | | Connected | | BioPharma | | | | |
| Essentials | | Care | | Systems | | Interventional | | Total |
| Revenues | $ | 1,573 | | | $ | 1,068 | | | $ | 575 | | | $ | 1,264 | | | $ | 4,480 | |
| Segment expenses: | | | | | | | | | |
| Cost of products sold | 743 | | | 478 | | | 306 | | | 401 | | | 1,928 | |
| % of revenues | 47.0 | % | | 44.8 | % | | 53.2 | % | | 31.7 | % | | |
| Selling and administrative expense | 164 | | | 161 | | | 28 | | | 236 | | | 589 | |
| % of revenues | 10.4 | % | | 15.1 | % | | 4.8 | % | | 18.6 | % | | |
| Research and development expense | 48 | | | 74 | | | 18 | | | 63 | | | 203 | |
| % of revenues | 3.1 | % | | 6.9 | % | | 3.1 | % | | 5.0 | % | | |
| Other operating expense, net | — | | | 2 | | | — | | | — | | | 2 | |
| % of revenues | — | % | | 0.2 | % | | — | % | | — | % | | |
| Segment Operating Income | $ | 617 | | | $ | 353 | | | $ | 224 | | | $ | 565 | | | $ | 1,759 | |
| % of revenues | 39.3 | % | | 33.0 | % | | 38.9 | % | | 44.7 | % | | |
| | | | | | | | | |
| Unallocated items | | | | | | | | | |
| Net interest expense | | | | (146) | |
| Corporate administrative and other unallocated (a) | | | (636) | |
| Specified items: | | | | |
| Purchase accounting adjustments (b) | | | (543) | |
| Integration, restructuring and transaction expense | | | | (93) | |
| Product, litigation, and other items (d) | | | (139) | |
| | | | |
| | | |
| | | |
| Income from Continuing Operations Before Income Taxes | | | $ | 201 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Six Months Ended March 31, 2026 | | | | | | | | | |
| | | | | | | | | |
| (Millions of dollars) | Medical | | Connected | | BioPharma | | | | |
| Essentials | | Care | | Systems | | Interventional | | Total |
| Revenues | $ | 3,242 | | | $ | 2,252 | | | $ | 1,019 | | | $ | 2,687 | | | $ | 9,200 | |
| Segment expenses: | | | | | | | | | |
| Cost of products sold | 1,635 | | | 991 | | | 559 | | | 874 | | | 4,060 | |
| % of revenues | 50.4 | % | | 44.0 | % | | 54.9 | % | | 32.5 | % | | |
| Selling and administrative expense | 365 | | | 381 | | | 60 | | | 539 | | | 1,345 | |
| % of revenues | 11.3 | % | | 16.9 | % | | 5.9 | % | | 20.1 | % | | |
| Research and development expense | 100 | | | 175 | | | 34 | | | 135 | | | 444 | |
| % of revenues | 3.1 | % | | 7.8 | % | | 3.4 | % | | 5.0 | % | | |
| Other operating expense, net | — | | | 6 | | | — | | | — | | | 6 | |
| % of revenues | — | % | | 0.3 | % | | — | % | | — | % | | |
| Segment Operating Income | $ | 1,142 | | | $ | 699 | | | $ | 365 | | | $ | 1,139 | | | $ | 3,345 | |
| % of revenues | 35.2 | % | | 31.0 | % | | 35.8 | % | | 42.4 | % | | |
| | | | | | | | | |
| Unallocated items | | | | | | | | | |
| Net interest expense | | | | (289) | |
| Corporate administrative and other unallocated (a) | | | (1,257) | |
| Specified items: | | | | |
| Purchase accounting adjustments (b) | | | (751) | |
| Integration, restructuring and transaction expense (c) | | | | (639) | |
| Product, litigation, and other items (d) | | | (140) | |
| | | | |
| Separation-related items (e) | | | (41) | |
| Impacts of debt extinguishment | | | 122 | |
| Income from Continuing Operations Before Income Taxes | | | $ | 350 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Six Months Ended March 31, 2025 | | | | | | | | | |
| | | | | | | | | |
| (Millions of dollars) | Medical | | Connected | | BioPharma | | | | |
| Essentials | | Care | | Systems | | Interventional | | Total |
| Revenues | $ | 3,158 | | | $ | 2,141 | | | $ | 993 | | | $ | 2,521 | | | $ | 8,813 | |
| Segment expenses: | | | | | | | | | |
| Cost of products sold | 1,512 | | | 961 | | | 538 | | | 804 | | | 3,815 | |
| % of revenues | 47.9 | % | | 44.9 | % | | 54.1 | % | | 31.9 | % | | |
| Selling and administrative expense | 329 | | | 329 | | | 56 | | | 472 | | | 1,187 | |
| % of revenues | 10.4 | % | | 15.4 | % | | 5.7 | % | | 18.7 | % | | |
| Research and development expense | 93 | | | 154 | | | 35 | | | 119 | | | 400 | |
| % of revenues | 2.9 | % | | 7.2 | % | | 3.5 | % | | 4.7 | % | | |
| Other operating expense, net | — | | | 8 | | | — | | | — | | | 8 | |
| % of revenues | — | % | | 0.4 | % | | — | % | | — | % | | |
| Segment Operating Income | $ | 1,224 | | | $ | 689 | | | $ | 365 | | | $ | 1,125 | | | $ | 3,403 | |
| % of revenues | 38.8 | % | | 32.2 | % | | 36.7 | % | | 44.6 | % | | |
| | | | | | | | | |
| Unallocated items | | | | | | | | | |
| Net interest expense | | | | (278) | |
| Corporate administrative and other unallocated (a) | | | (1,290) | |
| Specified items: | | | | |
| Purchase accounting adjustments (b) | | | (1,105) | |
| Integration, restructuring and transaction expense | | | | (182) | |
| Product, litigation, and other items (d) | | | (211) | |
| | | | |
| | | |
| | | | | | | | | |
| Income from Continuing Operations Before Income Taxes | | | $ | 337 | |
(a)Primarily comprised of corporate general and administrative expenses, share-based compensation expense, and foreign exchange.
(b)Includes amortization and other adjustments related to the purchase accounting for acquisitions. The Company’s amortization expense is recorded in Cost of products sold. The amounts for the three and six months ended March 31, 2025 included $162 million and $342 million, respectively, due to a fair value step-up adjustment relating to Advanced Patient Monitoring's inventory on the acquisition date.
(c)The amounts for the three and six months ended March 31, 2026 included non-cash asset impairment charges of $450 million, which are further discussed in Notes 10, 11, and 13.
(d)Includes certain 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 in the three and six months ended March 31, 2026 included charges of $42 million and the amounts in the three and six months ended March 31, 2025 included charges of $76 million and $98 million, respectively, within Cost of products sold, to adjust future costs estimated for product remediation efforts.
(e)Represents costs recorded to Other operating expense, net incurred in connection with the Transaction, as further discussed in Note 2.
Segment information for depreciation and amortization related to continuing operations is provided below.
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended
March 31, | | Six Months Ended
March 31, |
| (Millions of dollars) | 2026 | | 2025 | | 2026 | | 2025 |
| Depreciation and Amortization | | | | | | | |
Medical Essentials | $ | 147 | | | $ | 136 | | | $ | 288 | | | $ | 270 | |
Connected Care | 194 | | | 199 | | | 388 | | | 394 | |
BioPharma Systems | 27 | | | 32 | | | 62 | | | 62 | |
| Interventional | 192 | | | 198 | | | 389 | | | 399 | |
| Corporate and All Other | 3 | | | 3 | | | 6 | | | 6 | |
| Total Depreciation and Amortization | $ | 563 | | | $ | 567 | | | $ | 1,134 | | | $ | 1,131 | |
Note 9 – Benefit Plans
The Company has defined benefit pension plans covering certain employees in the United States and certain international locations. The measurement date used for these plans is September 30.
Net pension cost included the following components for the three and six-month periods:
| | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended
March 31, | | Six Months Ended
March 31, |
| (Millions of dollars) | 2026 | | 2025 | | 2026 | | 2025 |
| Service cost | $ | 7 | | | $ | 7 | | | $ | 16 | | | $ | 18 | |
| Interest cost | 30 | | | 28 | | | 60 | | | 70 | |
| Expected return on plan assets | (39) | | | (38) | | | (79) | | | (93) | |
| | | | | | | |
| Amortization of loss | 7 | | | 7 | | | 14 | | | 17 | |
| Settlement loss | 25 | | | — | | | 25 | | | — | |
| Other | 1 | | | — | | | 1 | | | — | |
| Net pension cost | $ | 30 | | | $ | 5 | | | $ | 37 | | | $ | 12 | |
The amounts provided above for amortization of loss represent the reclassifications of net actuarial losses that were recognized in Accumulated other comprehensive income (loss) in prior periods. The Company recognizes pension settlements when payments from the plan exceed the sum of the service and interest cost components of net periodic pension cost associated with the plan for the fiscal year. The settlement loss recorded in the three and six-months ended March 31, 2026 included lump sum benefit payments associated with the Company’s U.S. pension plan. All components of the Company’s net periodic pension and postretirement benefit costs, aside from service cost, are recorded to Other income (expense), net on its condensed consolidated statements of income. Net pension costs related to employees transferred to the spin-off entity and reflected in (Loss) Income from Discontinued Operations, Net of Tax were immaterial. Additionally, the Company’s transfer of employees to the spin-off entity did not materially impact the Company’s benefit obligations.
Note 10 – Business Restructuring Charges
The Company incurred restructuring costs during the six months ended March 31, 2026, primarily in connection with the Company's simplification and other cost-saving initiatives, which were recorded within Integration, restructuring and transaction expense. These simplification and other cost-saving initiatives are focused on organizational realignment related to the separation of the Company’s former Biosciences and Diagnostic Solutions business, as well as alignment with BD’s current operational strategy, Excellence Unleashed, and are intended to reduce complexity, optimize the Company’s supply chain efficiency, streamline its global manufacturing footprint, enhance product quality, refine customer experience, and improve cost efficiency across all of the Company’s segments.
Restructuring liability activity for the six months ended March 31, 2026 was as follows:
| | | | | | | | | | | | | | | | | |
| (Millions of dollars) | Employee
Termination | | Other (a) | | Total |
Balance at September 30, 2025 | $ | 31 | | | $ | 27 | | | $ | 58 | |
| | | | | |
| Charged to expense | 62 | | | 495 | | | 557 | |
| Cash payments | (62) | | | (32) | | | (94) | |
| Non-cash settlements | — | | | (442) | | | (442) | |
| | | | | |
Balance at March 31, 2026 | $ | 31 | | | $ | 48 | | | $ | 79 | |
(a)Primarily consists of non-employee-related costs associated with the execution of the Company’s cost efficiency and restructuring programs, such as non-cash asset impairment charges and incremental project management costs. Non‑cash asset impairment charges of $450 million, relating to all of the Company’s reportable segments, were charged to expense during the second quarter of fiscal year 2026 upon the Company’s commitment to exit certain operational activities and projects which no longer align with and facilitate its current operational strategy, Excellence Unleashed. These exit actions are aimed at simplifying the Company’s operations and aligning resources behind its most value-creating platforms. Additional discussion regarding these charges is provided in Notes 11 and 13.
Note 11 – Intangible Assets
At September 30, 2025, goodwill and other intangible assets related to the former Biosciences and Diagnostic Solutions business were classified as Noncurrent Assets of Discontinued Operations. For additional information, see Note 2.
Intangible assets consisted of:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | March 31, 2026 | | September 30, 2025 |
| (Millions of dollars) | Gross
Carrying
Amount | | Accumulated
Amortization | | Net Carrying Amount | | Gross
Carrying
Amount | | Accumulated
Amortization | | Net Carrying Amount |
| Amortized intangible assets | | | | | | | | | | | |
| Developed technology (a) | $ | 14,783 | | | $ | (8,889) | | | $ | 5,894 | | | $ | 15,079 | | | $ | (8,515) | | | $ | 6,564 | |
| Customer relationships | 5,465 | | | (3,461) | | | 2,005 | | | 5,464 | | | (3,258) | | | 2,206 | |
| Patents, trademarks and other | 1,040 | | | (591) | | | 450 | | | 1,032 | | | (577) | | | 456 | |
| Amortized intangible assets | $ | 21,289 | | | $ | (12,940) | | | $ | 8,348 | | | $ | 21,575 | | | $ | (12,350) | | | $ | 9,226 | |
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(a)The decrease in the carrying value as of March 31, 2026 included $134 million of non-cash asset impairment charges recorded during the second quarter of fiscal year 2026, which are further discussed in Notes 10 and 13.
Intangible amortization expense was $380 million and $387 million for the three months ended March 31, 2026 and 2025, respectively, and $768 million and $772 million for the six months ended March 31, 2026 and 2025, respectively.
The following is a reconciliation of goodwill by business segment:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (Millions of dollars) | Medical
Essentials (a) | | Connected
Care (a) | | BioPharma Systems (a) | | Interventional (a) | | Total |
Goodwill as of September 30, 2025 | $ | 7,011 | | | $ | 6,093 | | | $ | 96 | | | $ | 12,764 | | | $ | 25,964 | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| Currency translation | (2) | | | 2 | | | — | | | (10) | | | (9) | |
Goodwill as of March 31, 2026 | $ | 7,010 | | | $ | 6,095 | | | $ | 96 | | | $ | 12,755 | | | $ | 25,955 | |
(a)As further discussed in Note 8, effective October 1, 2025, the Company reorganized its organizational units into five distinct, separately-managed segments, based on the nature of its product and service offerings. Subsequent to the Transaction, as further discussed in Note 2, the Company’s segment reporting structure consists of four segments.
Note 12 – Derivative Instruments and Hedging Activities
The Company uses derivative instruments to mitigate certain exposures. The Company does not enter into derivative financial instruments for trading or speculative purposes. The effects these derivative instruments and hedged items had on the Company’s balance sheets and the fair values of the derivatives outstanding at March 31, 2026 and September 30, 2025 were not material. The effects on the Company’s financial performance and cash flows are provided below.
Foreign Currency Risks and Related Strategies
The Company has foreign currency exposures throughout Europe, Greater Asia, Canada and Latin America. Transactional currency exposures that arise from entering into transactions, generally on an intercompany basis, in non-hyperinflationary countries that are denominated in currencies other than the functional currency are mitigated primarily through the use of forward contracts.
In order to mitigate transactional foreign currency exposures resulting from anticipated intercompany purchases and sales denominated in a currency other than local functional currencies, the Company has hedged a portion of this currency risk with certain instruments such as foreign exchange forward and option contracts, which are designated as cash flow hedges.
In order to mitigate foreign currency exposure relating to its investments in certain foreign subsidiaries, the Company has hedged the currency risk associated with those investments with certain instruments, such as foreign currency-denominated debt and cross-currency swaps, which are designated as net investment hedges, as well as currency exchange contracts.
The notional amounts of the Company’s foreign currency-related derivative instruments as of March 31, 2026 and September 30, 2025 were as follows:
| | | | | | | | | | | | | | | | | |
| (Millions of dollars) | Hedge Designation | | March 31, 2026 | | September 30, 2025 |
| Foreign exchange contracts (a) | Undesignated | | $ | 3,926 | | | $ | 5,710 | |
| Foreign exchange contracts (b) | Cash flow hedges | | 789 | | | 1,170 | |
| Foreign currency-denominated debt (c) | Net investment hedges | | 2,597 | | | 2,630 | |
| Cross-currency swaps (d) | Net investment hedges | | 1,054 | | | 1,054 | |
(a)Represents hedges of transactional foreign exchange exposures resulting primarily from intercompany payables and receivables. Gains and losses on these instruments are recognized immediately in income. These gains and losses are largely offset by gains and losses on the underlying hedged items, as well as the hedging costs associated with the derivative instruments. The Company recorded net losses to Other income (expense), net, relating to these hedges of $45 million and $41 million for the three and six months ended March 31, 2026, respectively. Net amounts recognized in Other income (expense), net, during the three and six months ended March 31, 2025 were immaterial to the Company's consolidated financial results.
(b)Represents foreign exchange contracts related to anticipated intercompany purchases and sales, which generally have durations of less than eighteen months.
(c)Represents foreign currency-denominated long-term notes outstanding which were effective as economic hedges of net investments in certain of the Company's foreign subsidiaries.
(d)Represents cross-currency swaps, which were effective as economic hedges of net investments in certain of the Company’s foreign subsidiaries.
Net gains or losses resulting from the change in fair value of the foreign exchange contracts designated as cash flow hedges are initially recorded within Other comprehensive income (loss) and reclassified into earnings upon the occurrence of the related underlying third-party transaction. If foreign exchange contracts designated as cash flow hedges are terminated prematurely as a result of the hedged transaction being probable of not occurring, the balance in Accumulated other comprehensive income (loss) attributable to those derivatives is immediately reclassified into Revenues or Cost of products sold (depending on whether the hedged item is an intercompany sale or purchase).
Net after tax amounts recognized in Other comprehensive income (loss), as well as amounts reclassified from Accumulated other comprehensive income (loss) into earnings relating to these cash flow hedges during the three and six months ended March 31, 2026 and 2025 were immaterial. Net realized gains of $33 million, net of tax, related to these cash flow hedges are expected to be reclassified from accumulated other comprehensive income into earnings within the next 12 months of March 31, 2026.
Net gains or losses relating to the net investment hedges, which are attributable to changes in the foreign currencies to U.S. dollar spot exchange rates, are recorded as foreign currency translation in Other comprehensive income (loss), net of tax. Upon the termination of a net investment hedge, any net gain or loss included in Accumulated other comprehensive income (loss) relative to the investment hedge remains until the foreign subsidiary investment is disposed of or is substantially liquidated.
Net gains (losses) recorded to Accumulated other comprehensive income (loss) relating to the Company's net investment hedges for the three and six-month period were as follows:
| | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended
March 31, | | Six Months Ended
March 31, |
| (Millions of dollars) | 2026 | | 2025 | | 2026 | | 2025 |
| Foreign currency-denominated debt | $ | 36 | | | $ | (63) | | | $ | 26 | | | $ | 81 | |
| Cross-currency swaps (a) | 13 | | | (19) | | | 13 | | | 47 | |
| | | | | | | |
(a)The amount for the six months ended March 31, 2025 includes a loss, net of tax, of $18 million recognized on terminated cross-currency swaps.
Interest Rate Risks and Related Strategies
The Company uses a mix of fixed and variable rate debt to manage its interest rate exposure, and periodically uses interest rate swaps to manage such exposures. Under these interest rate swaps, the Company exchanges, at specified intervals, the difference between fixed and floating interest amounts calculated by reference to an agreed-upon notional principal amount. These swaps are designated as either cash flow or fair value hedges.
Changes in the fair value of the interest rate swaps designated as cash flow hedges (i.e., hedging the exposure to variability in expected future cash flows that is attributable to a particular risk) are recorded in Other comprehensive income (loss), net of tax. If interest rate derivatives designated as cash flow hedges are terminated, the balance in Accumulated other comprehensive income (loss) attributable to those derivatives is reclassified into earnings, within Interest expense, over the remaining life of the hedged debt.
For interest rate swaps designated as fair value hedges (i.e., hedges against the exposure to changes in the fair value of an asset or a liability or an identified portion thereof that is attributable to a particular risk), changes in the fair value of the interest rate swaps offset changes in the fair value of the fixed rate debt due to changes in market interest rates. Amounts recorded during the three and six months ended March 31, 2026 and 2025 were immaterial to the Company's consolidated financial results.
The notional amounts of the Company’s interest rate-related derivative instruments as of March 31, 2026 and September 30, 2025 were as follows:
| | | | | | | | | | | | | | | | | |
| (Millions of dollars) | Hedge Designation | | March 31, 2026 | | September 30, 2025 |
| Interest rate swaps (a) | Fair value hedges | | $ | 700 | | | $ | 700 | |
| | | | | |
(a)Represents fixed-to-floating interest rate swap agreements the Company entered into to convert the interest payments on certain long-term notes from the fixed rate to a floating interest rate based on secured overnight financing rates (“SOFR”).
Other Risk Exposures
The Company purchases resins, which are oil-based components used in the manufacture of certain products. Significant increases in world oil prices that lead to increases in resin purchase costs could impact future operating results. From time to time, the Company has managed price risks associated with these commodity purchases through commodity derivative forward contracts. The Company's commodity derivative forward contracts at March 31, 2026 and September 30, 2025 were immaterial to the Company's consolidated financial results.
Note 13 – Financial Instruments and Fair Value Measurements
The following reconciles cash and equivalents and restricted cash reported within the Company's condensed consolidated balance sheets at March 31, 2026 and September 30, 2025 to the total of these amounts shown on the Company's condensed consolidated statements of cash flows:
| | | | | | | | | | | |
| (Millions of dollars) | March 31, 2026 | | September 30, 2025 |
| Cash and equivalents | $ | 813 | | | $ | 567 | |
| Restricted cash | 202 | | | 210 | |
| Cash and equivalents and restricted cash | $ | 1,015 | | | $ | 777 | |
Cash equivalents consist of all highly liquid investments with a maturity of three months or less at time of purchase. Restricted cash consists of cash restricted from withdrawal and usage except for certain product liability matters.
The fair values of the Company’s financial instruments are as follows:
| | | | | | | | | | | | | | | | | |
| (Millions of dollars) | Basis of fair value measurement | | March 31, 2026 | | September 30, 2025 |
| Institutional money market accounts (a) | Level 1 | | $ | 5 | | | $ | 18 | |
| Current portion of long-term debt (b) | Level 2 | | 1,386 | | | 700 | |
| Long-term debt (b) | Level 2 | | 13,779 | | | 16,745 | |
(a)These financial instruments are recorded within Cash and equivalents on the condensed consolidated balance sheets. The institutional money market accounts permit daily redemption. The fair values of these investments are based upon the quoted prices in active markets provided by the holding financial institutions.
(b)Long-term debt is recorded at amortized cost. The fair value of long-term debt is measured based upon quoted prices in active markets for similar instruments.
Short-term investments are held to their maturities and are carried at cost, which approximates fair value. The short-term investments primarily consist of time deposits with maturities greater than three months and less than one year. All other instruments measured by the Company at fair value, including derivatives, contingent consideration liabilities and available-for-sale debt securities, are immaterial to the Company's condensed consolidated balance sheets.
Nonrecurring Fair Value Measurements
During the second quarter of fiscal year 2026, the Company recorded non-cash asset impairment charges of $450 million to Integration, restructuring and transaction expense, relating to all of the Company’s reportable segments, as further discussed in Notes 10 and 11. The impairment charges are primarily reflected as decreases within Property, Plant and Equipment, Net and Developed Technology, Net of $238 million and $134 million, respectively, on the Company’s March 31, 2026 condensed consolidated balance sheet. The amounts recognized were recorded to adjust the carrying amounts of the assets to the assets' fair values, which were estimated, based upon a market participant's perspective, using Level 3 measurements, including values estimated using the income approach.
Transfers of Trade Receivables
Over the normal course of its business activities, the Company transfers certain trade receivable assets to third parties under factoring agreements. Per the terms of these agreements, the Company surrenders control over its trade receivables upon transfer. Accordingly, the Company accounts for the transfers as sales of trade receivables by recognizing an increase to Cash and equivalents and a decrease to Trade receivables, net when proceeds from the transactions are received. The costs incurred by the Company in connection with factoring activities were not material to its consolidated financial results. The amounts transferred and yet to be remitted under factoring arrangements are provided below.
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended March 31, | | Six Months Ended March 31, |
| (Millions of dollars) | 2026 | | 2025 | | 2026 | | 2025 |
| Trade receivables transferred to third parties under factoring arrangements | $ | 402 | | | $ | 293 | | | $ | 834 | | | $ | 560 | |
| | | | | | | | | | | |
| March 31, 2026 | | September 30, 2025 |
| Amounts yet to be collected and remitted to the third parties | $ | 381 | | | $ | 289 | |
Supplier Finance Programs
The Company has agreements where participating suppliers are provided the ability to receive early payment of the Company’s obligations at a nominal discount through supplier finance programs entered into with third party financial institutions. The Company is not a party to these arrangements, and these programs do not impact the Company’s obligations or affect the Company’s payment terms, which generally range from 90 to 150 days. The agreements with the financial institutions do not require the Company to provide assets pledged as security or other forms of guarantees for the supplier finance programs. The Company had $215 million and $234 million of outstanding payables related to supplier finance programs as of March 31, 2026 and September 30, 2025, respectively, which were recorded within Payables, accrued expenses and other current liabilities on the Company's condensed consolidated balance sheets.
Note 14 – Debt
Debt Retirements
On February 27, 2026, the Company commenced a series of tender offers to purchase, for cash, certain of its outstanding senior notes and debentures. The tender offers were funded using a portion of the proceeds from the Transaction, as further discussed in Note 2. The Company’s retirements of debt resulting from the tender offers in the second quarter of fiscal year 2026 included the following:
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | (Millions of dollars) |
| Principal, interest rate and maturity | | Period of retirement | | Carrying value | | Market price of retirement (a) | | Gain (loss) recognized to Other income (expense), net (b) |
$36 million of 6.700% notes due 2026 | | Second quarter 2026 | | $ | 37 | | | $ | 37 | | | $ | — | |
$33 million of 7.000% debentures due 2027 | | Second quarter 2026 | | 33 | | | 34 | | | (1) | |
$27 million of 6.700% debentures due 2028 | | Second quarter 2026 | | 28 | | | 29 | | | (1) | |
$62 million of 6.000% notes due 2039 | | Second quarter 2026 | | 61 | | | 68 | | | (7) | |
$91 million of 4.875% notes due 2044 | | Second quarter 2026 | | 99 | | | 85 | | | 13 | |
$656 million of 4.669% notes due 2047 | | Second quarter 2026 | | 650 | | | 602 | | | 49 | |
$37 million of 5.000% notes due 2040 | | Second quarter 2026 | | 37 | | | 37 | | | — | |
$472 million of 4.685% notes due 2044 | | Second quarter 2026 | | 480 | | | 442 | | | 38 | |
$445 million of 5.081% notes due 2029 | | Second quarter 2026 | | 443 | | | 463 | | | (20) | |
$263 million of 3.794% notes due 2050 | | Second quarter 2026 | | 260 | | | 208 | | | 52 | |
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| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
(a)Included related premiums, fees, and expenses.
(b)Debt retirement was accounted for as an early debt extinguishment.
Note 15 – Income Taxes
Income Tax Expense
The Company’s effective income tax rates were 193.1% and 21.5% for the three months ended March 31, 2026 and 2025, respectively, and were 21.8% and 9.7% for the six months ended March 31, 2026 and 2025, respectively. The effective income tax rate for the current-year periods reflect an unfavorable net impact from discrete items compared with the prior-year periods, including the recognition of a deferred tax liability upon the decision to distribute certain prior-year earnings of a number of foreign subsidiaries.