Notes to Consolidated Financial Statements

Becton, Dickinson and Company

15 Segment Data

The Company’s organizational structure is based upon its three principal business segments: BD Medical (“Medical”), BD Diagnostics (“Diagnostics”) and BD Biosciences (“Biosciences”).

     The major product lines in the Medical segment include needles, syringes and intravenous catheters, including safety-engineered devices, for medication delivery; syringes and pen needles for the self-injection of insulin and other drugs used in the treatment of diabetes; prefillable drug delivery devices provided to pharmaceutical companies and sold to end-users as drug/device combinations; surgical blades and regional anesthesia needles; critical care monitoring devices; ophthalmic surgical instruments; sharps disposal containers; and home healthcare products. The major products and services in the Diagnostics segment are integrated systems for specimen collection; an extensive line of safety-engineered specimen blood collection products and systems; plated media; automated blood culturing systems; molecular testing systems for sexually transmitted diseases and healthcare-associated infections; microorganism identification and drug susceptibility systems; and rapid diagnostic assays. The major product lines in the Biosciences segment include fluorescence activated cell sorters and analyzers; cell imaging systems; monoclonal antibodies and kits; reagent systems for life sciences research; tools to aid in drug discovery and growth of tissue and cells; and diagnostic assays.

     The Company evaluates performance of its business segments based upon operating income. Segment operating income represents revenues reduced by product costs and operating expenses.

     Distribution of products is primarily through distributors, as well as directly to hospitals, laboratories and other end-users. Sales to a distributor which supplies the Company’s products to many end users accounted for approximately 11% of revenues in 2006, 2005 and 2004, respectively and included products from the Medical and Diagnostics segments. No other customer accounted for 10% or more of revenues in each of the three years presented.

Revenues(A) 2006 2005 2004
Medical      $ 3,203,456             $ 2,958,088             $ 2,680,165       
Diagnostics   1,754,866     1,657,064     1,531,639  
Biosciences   876,505     799,529     722,941  
$ 5,834,827   $ 5,414,681   $ 4,934,745  


Segment Operating Income
                 
Medical $ 767,672 (B)  $ 710,551   $ 566,582 (D) 
Diagnostics   399,212 (C)    413,908     359,370  
Biosciences   213,068     175,339     155,888  
Total Segment Operating Income   1,379,952     1,299,798     1,081,840  
Unallocated Expenses(E)   (344,995 )(F)    (294,944 )(F)   (328,972 )(G)
Income From Continuing Operations
   Before Income Taxes
$ 1,034,957   $ 1,004,854   $ 752,868  
 

Segment Assets
                 
Medical $ 2,835,613   $ 2,656,320   $ 2,703,643  
Diagnostics   1,485,959     1,245,769     1,217,620  
Biosciences   727,634     678,286     706,728  
Total Segment Assets   5,049,206     4,580,375     4,627,991  
Corporate and All Other(H)   1,775,319     1,552,418     1,060,894  
Discontinued Operations           63,694  
$ 6,824,525   $ 6,132,793   $ 5,752,579  


Capital Expenditures
                 
Medical $ 270,910   $ 184,525   $ 158,728  
Diagnostics   104,815     99,742     79,782  
Biosciences   38,952     22,218     16,560  
Corporate and All Other   44,631     11,143     10,648  
$ 459,308   $ 317,628   $ 265,718  


Depreciation and Amortization
                 
Medical $ 212,807   $ 202,825   $ 187,254  
Diagnostics   116,072     102,882     97,731  
Biosciences   63,383     64,599     55,878  
Corporate and All Other   12,833     17,190     16,361  
$ 405,095   $ 387,496   $ 357,224  
(A)   Intersegment revenues are not material.
(B)   Includes the $63,414 charge related to BGM exit costs, as discussed in Note 3.
(C)   Includes the in-process research and development charge related to the GeneOhm acquisition, as discussed in Note 3.
(D)   Includes the $45,024 charge related to BGM products as discussed in Note 16.
(E)   Includes interest, net; foreign exchange; and corporate expenses.
(F)   Includes share-based compensation expense, as discussed in Note 2.
(G)   Includes the litigation settlement of $100,000 as discussed in Note 16.
(H)   Includes cash and investments and corporate assets.


Revenues by Organizational Units 2006 2005 2004
BD Medical
   Medical Surgical Systems
     $ 1,748,743             $ 1,661,150             $ 1,540,723       
   Diabetes Care   753,343     674,020     586,190  
   Pharmaceutical Systems   639,694     563,271     497,421  
   Ophthalmic Systems   61,676     59,647     55,831  
  $ 3,203,456   $ 2,958,088   $ 2,680,165  

BD Diagnostic
   Preanalytical Systems
$ 927,759   $ 854,831   $ 787,996  
   Diagnostic Systems   827,107     802,233     743,643  
  $ 1,754,866   $ 1,657,064   $ 1,531,639  

BD Biosciences
   Immunocytometry Systems
$ 502,847   $ 452,383   $ 397,151  
   Pharmingen   157,349     140,585     135,650  
   Discovery Labware   216,309     206,561     190,140  
  $ 876,505   $ 799,529   $ 722,941  
  $ 5,834,827   $ 5,414,681   $ 4,934,745  

Geographic Information
The countries in which the Company has local revenue-generating operations have been combined into the following geographic areas: the United States (including Puerto Rico), Europe, and Other, which is composed of Canada, Latin America, Japan and Asia Pacific.

     Revenues to unaffiliated customers are based upon the source of the product shipment. Long-lived assets, which include net property, plant and equipment, are based upon physical location.

  2006 2005 2004
Revenues
   United States
     $ 2,828,023             $ 2,590,951             $ 2,435,889       
   Europe   1,764,600     1,671,112     1,482,793  
   Other   1,242,204     1,152,618     1,016,063  
  $ 5,834,827   $ 5,414,681   $ 4,934,745  


Long-Lived Assets
   United States
$ 1,934,994   $ 1,687,808   $ 1,687,276  
   Europe   893,495     823,694     805,179  
   Other   540,925     424,165     398,453  
   Corporate   269,858     221,812     220,337  
  $ 3,639,272   $ 3,157,479   $ 3,111,245