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Spin-Off of Embecta Corp. | 3 Months Ended
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Dec. 31, 2022
Discontinued Operations and Disposal Groups [Abstract] |
Spin-Off of Embecta Corp. | Spin-Off of Embecta Corp. On April 1, 2022, the Company completed the spin-off of its Diabetes Care business as a separate publicly traded company named Embecta through a distribution of Embecta’s publicly traded common stock (listed on NASDAQ under the ticker symbol “EMBC”) to BD’s shareholders of record as of the close of business on March 22, 2022 (the “record date”). The Company distributed one share of Embecta common stock for every five common shares of BD outstanding as of the record date and shareholders received cash in lieu of fractional shares of Embecta common stock. BD retained no ownership interest in Embecta subsequent to the spin-off. The distribution is expected to qualify and has been treated as tax-free to the Company and its shareholders for U.S. federal income tax purposes. The Company and Embecta entered into various agreements to effect the spin-off and provide a framework for the relationship between the Company and Embecta after the spin-off. Such agreements include the separation and distribution agreement, as well as the following ongoing agreements: a cannula supply agreement, an intellectual property matters agreement, a transition services agreement, manufacturing and supply agreements, a lease agreement, a distribution agreement to support commercial operations, a logistics services agreement and other agreements including an employee matters agreement and a tax matters agreement. Under these agreements, the Company will continue to provide certain products and services to Embecta following the spin-off. The agreements do not provide the Company with the ability to influence the operating or financial policies of Embecta subsequent to the spin-off date. Amounts included in the Company’s condensed consolidated statements of income during the three months ended December 31, 2022 as a result of these agreements were immaterial. . Details of Income from Discontinued Operations, Net of Tax are as follows:
|  | Three Months Ended December 31, |  |
Millions of dollars |  |  | 2021 |  |  |  |
Revenues |  |  | $ | 277 |  |  |  |  |
Cost of products sold |  |  | 74 |  |  |  |  |
Selling and administrative expense |  |  | 38 |  |  |  |  |
Research and development expense |  |  | 15 |  |  |  |  |
Other operating expense, net |  |  | 26 |  |  |  |  |
Total Operating Costs and Expenses |  |  | 153 |  |  |  |  |
Operating Income |  |  | 123 |  |  |  |  |
Interest expense |  |  | — |  |  |  |  |
Other income, net |  |  | — |  |  |  |  |
Income from Discontinued Operations Before Income Taxes |  |  | 123 |  |  |  |  |
Income tax provision |  |  | 14 |  |  |  |  |
Income from Discontinued Operations, Net of Tax |  |  | $ | 109 |  |  |  |  |
During the three months ended December 31, 2021, the Company incurred $25 million of separation costs, including those for consulting, legal, tax and other advisory services associated with the spin-off, which were previously recorded within Other operating expense (income), net and are now included as a component of Income from Discontinued Operations, Net of Tax. The Company’s Revenues and Cost of products sold from continuing operations were recast to reflect previously eliminated intercompany transactions that occurred between BD and Embecta and that resulted in a third-party sale in the same period. The impacts of these transactions to Embecta are also reflected as a component of Income from Discontinued Operations, Net of Tax.

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- Definition The entire disclosure related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -URI https://asc.fasb.org/topic&trid=2155823 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -URI https://asc.fasb.org/subtopic&trid=2122178 + Details
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