Company Overview

Becton, Dickinson and Company ("BD") is a global medical technology company engaged principally in the development, manufacture and sale of medical devices, instrument systems and reagents used by healthcare institutions, life science researchers, clinical laboratories, the pharmaceutical industry and the general public. Our business consists of three worldwide business segments - BD Medical ("Medical"), BD Diagnostics ("Diagnostics") and BD Biosciences ("Biosciences"). Our products are marketed in the United States and internationally through independent distribution channels and directly to end-users by BD and independent sales representatives.

Overview of Financial Results and Financial Condition

First quarter revenues of $1.9 billion represented an increase of 3.7% from the same period a year ago, and reflected volume increases of approximately 5.9%, partially offset by price decreases of approximately 0.7% and unfavorable foreign exchange translation of approximately 1.5%. Revenue growth in the first quarter of fiscal year 2013 was driven by our Medical and Diagnostics segments. Revenue growth in the period was partially aided by an early start to the 2012-2013 influenza season. As discussed further below, revenue growth in certain units also benefitted from favorable comparisons to the prior-year period. In our Biosciences segment, solid growth was driven by increased instrument placements in the U.S. as well as a favorable comparison to the prior-year period. International revenues reflected continued strength in emerging market sales and strong sales of safety-engineered products. Sales in the United States of safety-engineered devices in the first quarter of 2013 of $291 million were flat as compared with the prior year's quarter. International sales of safety-engineered devices of $220 million in the first quarter of 2013 grew 11.8% over the prior year's period, including an estimated 2.5% unfavorable impact due to foreign currency translation. International safety-engineered device revenue growth continues to be driven by strong growth in the Medical segment, with the largest growth in Western Europe and emerging markets.

We continue to invest in research and development spending, geographic expansion, and new product promotions to drive further revenue and profit growth. Our ability to sustain our long-term growth will depend on a number of factors, including our ability to expand our core business (including geographical expansion), develop innovative new products with higher gross profit margins across our business segments, and continue to improve operating efficiency and organizational effectiveness. The healthcare industry continues to face a challenging economic environment. The current economic conditions and other circumstances have resulted in pricing pressures for some of our products. Continued uncertainty in the research spending environment could adversely affect our Biosciences segment. In other areas of our U.S. business, healthcare utilization is stable but constrained. Additionally, uncertainty in Europe due to continued macroeconomic challenges has resulted in constrained healthcare utilization in that region.

In addition to the economic conditions in the United States and elsewhere, numerous other factors can affect our ability to achieve our goals including, without limitation, increased competition and healthcare reform initiatives. For example, the U.S. Patient Protection and

Affordable Care Act contains certain tax provisions that will affect BD. The most significant impact is the medical device excise tax, which imposes a 2.3% tax on certain U.S. sales of medical devices, which was effective in January 2013. We currently estimate that our fiscal 2013 excise tax (impacting only three quarters for fiscal year 2013) will be between $40 million to $50 million and will be recorded in selling and administrative expense.

Our financial position remains strong, with cash flows from operating activities totaling $226 million in the first three months of 2013. At December 31, 2012, we had $2.5 billion in cash and equivalents and short-term investments. Cash outflows relating to acquisitions represented the purchase of Safety Syringes, Inc., a privately held California-based company that specializes in the development of anti-needlestick devices for prefilled syringes for $124 million, net of cash acquired. For further discussion, refer to Note 7 in the Notes to Condensed Consolidated Financial Statements. Cash inflows from divestitures of $721 million represented the sale of Biosciences' Discovery Labware unit, excluding its Advanced Bioprocessing platform. Refer to Note 8 in the Notes to Condensed Consolidated Financial Statements for additional information. Also, we continued to return value to our shareholders in the form of share repurchases and dividends. During the first three months of 2013, we repurchased $300 million of our common stock and paid cash dividends of $97 million.

We face currency exposure each reporting period that arises from translating the results of our worldwide operations to the U.S. dollar at exchange rates that fluctuate from the beginning of such period. We evaluate our results of operations on both an as reported and a foreign currency-neutral basis, which excludes the impact of fluctuations in foreign currency exchange rates. We calculate foreign currency-neutral percentages by converting our current-period local currency financial results using the prior-period foreign currency exchange rates and comparing these adjusted amounts to our current-period reported results. From time to time, we may purchase forward contracts and options to partially protect against adverse foreign exchange rate movements. Gains or losses on our derivative instruments are largely offset by the gains or losses on the underlying hedged transactions. We do not enter into derivative instruments for trading or speculative purposes. For further discussion, refer to Note 10 in the Notes to Condensed Consolidated Financial Statements.

Results of Operations

Revenues

Refer to Note 4 in the Notes to Condensed Consolidated Financial Statements for segment financial data.

Medical Segment

First quarter revenues of $983 million increased 3.5% over the prior year's quarter, which reflected an estimated unfavorable foreign currency translation impact of 1.6%.

The following is a summary of first quarter Medical revenues by organizational unit:

                                           Three months ended December 31,
                                                                           Estimated
                                                                            Foreign
                                                             Total         Exchange
      (millions of dollars)       2012          2011         Change         Impact
      Medical Surgical Systems   $   536       $   522           2.6 %           (1.3 )%
      Diabetes Care                  243           226           7.5 %           (1.6 )%
      Pharmaceutical Systems         205           202           1.2 %           (2.8 )%

      Total Revenues*            $   983       $   950           3.5 %           (1.6 )%

* Amounts may not add due to rounding

Medical segment revenue growth was primarily driven by the Diabetes Care unit with continued strong sales of pen needles, including the BD Ultra-Fine™ Nano and PentaPoint™ products. Diabetes Care revenue growth also benefitted from a favorable comparison to the prior-year period which was negatively impacted by softer international sales. Solid revenue growth in the Medical Surgical Systems unit was largely attributable to sales in emerging markets and strong international sales of safety-engineered products, including the BD PhaSeal™ System. Global sales of safety-engineered products were $252 million, as compared with $240 million in the prior year's quarter, and included an estimated $2 million unfavorable impact due to foreign currency translation.

Medical operating income for the first quarter was $288 million, or 29.3% of Medical revenues, compared with $254 million, or 26.7% of segment revenues, in the prior year's quarter. Gross profit margin was higher in the current quarter than the first quarter of 2012 primarily due to lower manufacturing costs resulting from Project ReLoCo, a global, cross-functional business initiative to drive sustained low-cost capability primarily benefitting Medical Surgical Systems. Gross profit margin was also favorably impacted by lower raw material costs, favorable foreign currency translation and the Company's change in useful lives of certain machinery and equipment assets, which was effective January 1, 2012. These favorable impacts on gross profit margin were partially offset by unfavorable pricing impacts on certain product lines. See further discussion on gross profit margin below. Selling and administrative expense as a percent of Medical revenues in the first quarter of 2013 was higher than in the first quarter of 2012, primarily due to increased spending for expansion in emerging markets. Research and development expenses for the quarter increased $5 million, or 13% above the prior year's period, reflecting ongoing investment in new products and platforms.

Diagnostics Segment

First quarter revenues of $652 million increased 5.0% over the prior year's quarter, which reflected an estimated unfavorable foreign currency translation impact of 1.1%.

The following is a summary of first quarter Diagnostics revenues by organizational unit:

                                          Three months ended December 31,
                                                                          Estimated
                                                                           Foreign
                                                            Total         Exchange
        (millions of dollars)    2012          2011         Change         Impact
        Preanalytical Systems   $   335       $   317           5.7 %           (1.2 )%
        Diagnostic Systems          317           304           4.3 %           (1.0 )%

        Total Revenues          $   652       $   621           5.0 %           (1.1 )%

Diagnostics segment revenue growth was primarily driven by international expansion, as well as by a favorable comparison to the prior-year period in the Preanalytical Systems unit due to uneven timing of orders. Diagnostics revenue growth in the quarter also benefitted from an early start to the 2012-2013 influenza season. Global sales of safety-engineered products in the Preanalytical Systems unit totaled $259 million, compared with $248 million in the prior year's quarter, and included an estimated $3 million unfavorable impact due to foreign currency translation.

Diagnostics operating income for the first quarter was $170 million, or 26.1% of Diagnostics revenues, compared with $165 million, or 26.6% of segment revenues, in the prior year's quarter. Gross profit margin was higher in the current quarter than in the prior year's quarter primarily due to favorable foreign currency translation and decreases in certain raw material costs. These favorable impacts to gross profit margin were partially offset by the Gen-Probe legal settlement and amortization of the Jaguar Plus Platform, an in-process research development project that was acquired in the Company's fiscal year 2010 acquisition of HandyLab, Inc. and was completed in the fourth quarter of fiscal year 2012. See further discussion on gross profit margin below. Selling and administrative expense as a percentage of Diagnostics revenues in the first quarter of 2013 was higher than in the first quarter of 2012 primarily due to increased spending for expansion in emerging markets and spending for new product launches. Research and development expenses in the first quarter of 2013 increased by $3 million, or 8% compared with the prior year's period, and reflected increased investment in new products and platforms.

Biosciences Segment

First quarter revenues of $265 million increased 1.7% over the prior year's quarter, which reflected an estimated unfavorable foreign currency translation impact of 1.6%. Biosciences segment revenue growth was driven by increased instrument placements in the U.S. Segment revenue growth also benefited from a favorable comparison to the prior-year period, which reflected constrained research spending in the U.S. and lower demand for high-end instruments. We remain cautious about short-term revenue growth expectations for this segment given some continued uncertainty around U.S. government research funding.

Biosciences operating income for the first quarter was $65 million, or 24.6% of Biosciences revenues, compared with $61 million, or 23.5% of segment revenues, in the prior year's quarter. Gross profit margin as a percent of Biosciences revenues, was higher in the current quarter than in the prior year's quarter due to favorable foreign currency translation and lower manufacturing costs. See further discussion on gross profit margin below. Selling and administrative expense as a percentage of Biosciences revenues in the first quarter of 2013 was higher compared with the prior year's quarter and reflected increased spending for expansion in emerging markets. Research and development expenses in the first quarter of 2013 was lower compared with spending in the prior year's period, reflecting timing of expenses and reduced headcount.

Geographic Revenues

Revenues in the United States for the first quarter of $830 million represented an increase of 3.0% over the prior year's quarter and reflected growth in all segments. International revenues for the first quarter of $1.070 billion represented an increase of 4.3% over the prior year's quarter, including a 2.7% unfavorable impact due to foreign currency translation. International revenues for the first quarter of 2013 reflected strong growth from the Medical and Diagnostics segments. Biosciences international revenue growth was unfavorably impacted by uneven timing of orders in certain geographies. International revenue growth reflected strong growth in emerging markets for all segments. International Medical and Diagnostic revenues also reflected strong sales of safety-engineered products.

Gross Profit Margin

Gross profit margin was 52.9% for the first quarter, compared with 50.8% for the comparable prior-year period. The increase in gross profit margin reflected estimated favorable impacts of 120 basis points relating to operating performance and 90 basis points relating to foreign currency translation. Operating performance was favorably impacted by approximately 130 basis points primarily due to lower manufacturing costs from continuous improvement projects such as Project ReLoCo and lower raw material costs. Operating performance was also favorably impacted by approximately 50 basis points due to the Company's change in useful lives of certain machinery and equipment assets, which was effective January 1, 2012. Operating performance was adversely affected by approximately 60 basis points primarily due to unfavorable pricing impacts on certain product lines and amortization of intangibles associated with recent acquisitions.

Selling and Administrative Expense

Selling and administrative expense was 26.1% of revenues for the first quarter, compared with 26.3% for the prior year's period. Aggregate expenses for the first quarter reflected an increase in core spending of $38 million, primarily relating to expansion of our business in emerging markets and higher expenses resulting from recent acquisitions. Aggregate expenses for the first

quarter of 2013 also reflected increased spending of $3 million related to our global enterprise resource planning initiative to update our business information systems. These increases were partially offset by favorable foreign currency translation of $6 million and a decrease in the deferred compensation plan liability of $4 million. This change in the deferred compensation liability is further discussed below. Selling and administrative expenses in the current year's period also reflected a favorable comparison to the prior-year period of $17 million due to the timing of litigation costs recognized in the first quarter of 2012.

Research and Development Expense

Research and development expense was $118 million, or 6.2% of revenues, for the first quarter, representing an increase of 5.3% compared with the prior year's amount of $112 million, or 6.1% of revenues. This increase in research and development expense compared with the prior year's period reflected increased investment in new products and platforms within the Medical and Diagnostics segments.

Non-Operating Expense and Income

Interest income was $8 million in the first quarter of 2013, compared with $15 million in the prior year's period. The decrease in the current year's period compared with the prior year's period reflected the impact of lower rates on investments outside the U.S., as well as lower investment gains on assets related to our deferred compensation plan. The offsetting movements in the deferred compensation plan liability were recorded in selling and administrative expense. Interest expense was $35 million in the first quarter, compared with $29 million in the prior year's period. This increase primarily reflects higher levels of long-term fixed-rate debt, partially offset by lower average interest rates on this debt.

Income Taxes

The income tax rate was 26.1% for the first quarter, compared with the prior year's rate of 22.9%. The increase in the income tax rate in the first quarter of 2013 primarily reflected the inclusion of certain discrete tax expenses and the absence of the U.S. research and development tax credit which was not reinstated until the Company's fiscal year 2013 second quarter. The Company's full-year fiscal year 2013 tax rate will benefit from such reinstatement. The income tax rate in the first quarter of 2012 reflected the favorable impact of various tax settlements in multiple jurisdictions, as further discussed below.

Income from Continuing Operations and Diluted Earnings Per Share from Continuing Operations

Income from continuing operations and diluted earnings per share from continuing operations for the first quarter of 2013 were $270 million and $1.35, respectively. Income from continuing operations and diluted earnings per share from continuing operations for the prior year's first quarter were $249 million and $1.14, respectively. The current quarter's earnings reflected an estimated $0.03 favorable impact due to foreign currency translation. The prior period's earnings included an approximate $0.04 tax benefit primarily relating to various tax settlements in multiple jurisdictions.

Liquidity and Capital Resources

Cash generated from operations, along with available cash and cash equivalents, is expected to be sufficient to fund our normal operating needs in fiscal year 2013. Normal operating needs in fiscal year 2013 include working capital, capital expenditures, cash dividends and common stock repurchases. Net cash provided by continuing operating activities was $226 million during the first three months of 2013, compared with $298 million in the same period in 2012. The current period change in operating assets and liabilities was a net use of cash and primarily reflected higher levels of inventory and lower levels of accounts payable and accrued expenses, partially offset by lower levels of accounts receivable and prepaid expenses. Net cash provided by continuing operating activities in the first quarter of 2013 was reduced by changes in the pension obligation resulting primarily from discretionary cash contributions of approximately $132 million. Net cash provided by continuing operating activities in the prior-year period was also reduced by changes in the pension obligation resulting primarily from discretionary cash contributions of approximately $100 million.

Net cash provided by continuing investing activities for the first three months of the current year was $391 million, compared with net cash used for continuing investing activities of $251 million in the prior-year period. The current period's net cash provided by continuing investing activities included approximately $721 million of net proceeds from the sale of the Discovery Labware disposal group. Cash outflows relating to acquisitions were $124 million in the first three months of the current year as a result of the Company's first quarter 2013 acquisition of Safety Syringes, Inc. Capital expenditures were $80 million in the first three months of 2013 and $102 million in the same period in 2012.

Net cash used for financing activities for the first three months of the current year was $379 million, compared with net cash provided by financing activities of $959 million in the prior-year period. The prior period's net cash provided by financing activities included the proceeds from $500 million of 5-year 1.75% notes and $1 billion of 10-year 3.125% notes issued on November 3, 2011.

For the first three months of the current year, we repurchased approximately 3.9 million shares of our common stock for $300 million, compared with approximately 5.5 million shares of our common stock for $400 million in the prior-year period. Aggregate common stock repurchases are estimated to be approximately $500 million for the full fiscal year 2013, subject to market conditions. At December 31, 2012, a total of approximately 4.3 million common shares remained available for purchase under the Board of Directors' July 2011 repurchase authorization.

At December 31, 2012, total worldwide cash and short-term investments were approximately $2.5 billion, of which $1.8 billion was held in jurisdictions outside of the United States. We regularly review the amount of cash and short-term investments held outside the United States and currently intend to use most of such amounts to fund our international operations and their growth initiatives. However, if these amounts were moved out of these jurisdictions or repatriated to the United States, there could be adverse tax consequences. It is anticipated that cash above the Company's normal amount of annual repatriations may be repatriated out of fiscal year 2013 earnings. The cost of such potential incremental cash repatriations is not anticipated to materially impact the Company's forecasted effective tax rate for the full fiscal year 2013.

As of December 31, 2012, total debt of $4.2 billion represented 47.7% of total capital (shareholders' equity, net non-current deferred income tax liabilities, and debt), versus 49.7% at September 30, 2012. Short-term debt increased to 9.8% of total debt at the end of December 31, 2012, from 9.7% at September 30, 2012.

We have in place a commercial paper borrowing program that is available to meet our short-term financing needs, including working capital requirements. Borrowings outstanding under this program were $200 million at December 31, 2012. We have available a $1 billion syndicated credit facility with an expiration date of May 2017. This credit facility, under which there were no borrowings outstanding at December 31, 2012, provides backup support for our commercial paper program and can also be used for other general corporate purposes. It includes a provision that enables BD, subject to additional commitments made by the lenders, to access up to an additional $500 million in financing through the facility, for a maximum aggregate commitment of $1.5 billion. The credit facility includes a single financial covenant that requires BD to maintain an interest expense coverage ratio (ratio of earnings before income taxes, depreciation and amortization to interest expense) of not less than 5-to-1 for the most recent four consecutive fiscal quarters. On the last eight measurement dates, this ratio has ranged from 13-to-1 to 23-to-1. In addition, we have informal lines of credit outside the United States.

Government Receivables

Accounts receivable balances include sales to government-owned or government-supported healthcare facilities in several countries, which are subject to delays. Payment may be dependent upon the financial stability and creditworthiness of those countries' national economies. Deteriorating credit and economic conditions in parts of Western Europe, particularly in Italy and Spain, may continue to increase the average length of time it takes us to collect our accounts receivable in certain regions within these countries. Outstanding governmental receivable balances, net of reserves, in Italy and Spain at December 31, 2012 were $72 million and $44 million, respectively.

We continually evaluate all governmental receivables for potential collection risks associated with the availability of government funding and reimbursement practices. We believe the current reserves related to all governmental receivables are adequate and that this concentration of credit risk will not have a material adverse impact on our financial position or liquidity.

Cautionary Statement Regarding Forward-Looking Statements

BD and its representatives may from time to time make certain forward-looking statements in publicly released materials, both written and oral, including statements contained in filings with the Securities and Exchange Commission, press releases, and our reports to shareholders. Forward-looking statements may be identified by the use of words such as "plan," "expect," "believe," "intend," "will," "anticipate," "estimate" and other words of similar meaning in conjunction with, among other things, discussions of future operations and financial performance, as well as our strategy for growth, product development, regulatory approvals, market position and expenditures. All statements that address operating performance or events or developments that we expect or anticipate will occur in the future - including statements relating to volume growth, sales and earnings per share growth, cash flows or uses, and

statements expressing views about future operating results - are forward-looking statements.

Forward-looking statements are based on current expectations of future events. The forward-looking statements are, and will be, based on management's then-current views and assumptions regarding future events and operating performance, and speak only as of their dates. Investors should realize that if underlying assumptions prove inaccurate or unknown risks or uncertainties materialize, actual results could vary materially from our expectations and projections. Investors are therefore cautioned not to place undue reliance on any forward-looking statements. Furthermore, we undertake no obligation to update or revise any forward-looking statements after the date they are made, . . .