SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------
FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the fiscal year ended June 30, 2006
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the transition period from to
Commission file number 1-4802
BECTON, DICKINSON AND COMPANY SAVINGS INCENTIVE PLAN
(FULL TITLE OF THE PLAN)
BECTON, DICKINSON AND COMPANY
(NAME OF ISSUER OF SECURITIES HELD PURSUANT TO THE PLAN)
1 Becton Drive
Franklin Lakes, New Jersey 07417-1880
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICER) (ZIP CODE)
(201) 847-6800
(TELEPHONE NUMBER)
1. FINANCIAL STATEMENTS AND SCHEDULES.
The following financial data for the Plan are submitted herewith:
Report of Independent Registered Public Accounting Firm
Statements of Net Assets Available for Benefits as of June 30, 2006 and
2005
Statement of Changes in Net Assets Available for Benefits for the year ended
June 30, 2006
Notes to Financial Statements
Schedule H, Line 4(i) -- Schedule of Assets (Held at End of Year)
2.1 EXHIBITS.
See Exhibit Index for a list of Exhibits filed or incorporated by reference
as part of this report.
2
Annual Report on Form 11-K
Becton, Dickinson and Company
Savings Incentive Plan
Audited Financial Statements and Supplemental Schedule
June 30, 2006
CONTENTS
Report of Independent Registered Public Accounting Firm..................................F-2
Financial Statements
Statements of Net Assets Available for Benefits as of June 30, 2006 and 2005.............F-3
Statement of Changes in Net Assets Available for Benefits for the year ended
June 30, 2006.........................................................................F-4
Notes to Financial Statements............................................................F-5
Supplemental Schedule
Schedule H, Line 4(i)--Schedule of Assets (Held at End of Year).........................F-11
Consent of Independent Registered Public Accounting Firm
F-1
Report of Independent Registered Public Accounting Firm
We have audited the accompanying statements of net assets available for benefits
of the Becton, Dickinson and Company Savings Incentive Plan as of June 30, 2006
and 2005, and the related statements of changes in net assets available for
benefits for the year ended June 30, 2006. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. We were not engaged to perform an
audit of the Plan's internal control over financial reporting. Our audits
included consideration of internal control over financial reporting as a basis
for designing audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the Plan's
internal control over financial reporting. Accordingly, we express no such
opinion. An audit also includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan at June
30, 2006 and 2005, and the changes in its net assets available for benefits for
the year ended June 30, 2006, in conformity with U.S. generally accepted
accounting principles.
Our audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedule of assets
(held at end of year) as of June 30, 2006 is not a required part of the
financial statements but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974. This supplemental schedule
is the responsibility of the Plan's management. The supplemental schedule has
been subjected to the auditing procedures applied in our audits of the financial
statements and, in our opinion, are fairly stated in all material respects in
relation to the financial statements taken as a whole.
/s/ Ernst & Young LLP
New York, New York
December 15, 2006
F-2
Becton, Dickinson and Company
Savings Incentive Plan
Statements of Net Assets Available for Benefits
JUNE 30
2006 2005
-----------------------------------
ASSETS
Investments at fair value:
Becton, Dickinson and Company Common Stock
(6,723,506 shares and 7,352,955 shares, respectively) $ 391,193,182 $ 367,096,281
State Street Bank and Trust Company S&P 500 Flagship
Fund Series A 153,219,300 143,991,517
State Street Bank and Trust Company MidCap Index
Fund Series A 102,668,483 86,661,640
Wells Fargo Nikko Investment Advisors Commingled
Equity Fund - 48,918,200
State Street Short-Term Investment Fund 4,717,745 4,396,813
Capital Guardian International Equity Fund 50,195,170 28,557,326
Lord Abbett Development Growth Fund - 25,939,059
State Street Global Advisors Small Cap Index Plus
Strategy Fund I 42,862,787 -
Barclay's Life Path Retirement 1,490,850 -
Barclay's Life Path 2010 3,964,410 -
Barclay's Life Path 2020 54,010,670 -
Barclay's Life Path 2030 3,709,907 -
Barclay's Life Path 2040 1,696,755 -
Investment contracts at contract value 281,016,311 256,511,142
------------------------------------
Total investments 1,090,745,570 962,071,978
Receivables:
Interest 43,858 32,205
Employer contributions 1,238,142 1,168,648
Employee contributions 2,363,627 2,037,095
Loans receivable from participants 23,899,649 22,249,276
Cash and cash equivalents 8,816,368 11,044,213
------------------------------------
Total assets 1,127,107,214 998,603,415
LIABILITIES
Investment management fees payable 202,835 10,146
------------------------------------
Net assets available for benefits $ 1,126,904,379 $ 998,593,269
====================================
See notes to financial statements.
F-3
Becton, Dickinson and Company
Savings Incentive Plan
Statement of Changes in Net Assets Available for Benefits
Year ended June 30, 2006
Additions:
Participants' contributions $ 58,384,551
Rollover contributions 9,618,281
Company contributions 15,818,468
Interest income 12,655,256
Dividends 5,889,774
Assets transferred into the Plan 1,026,220
-----------------
103,392,550
Deductions:
Distributions to participants 76,351,509
Administrative expenses and other 754,319
-----------------
77,105,828
Net appreciation in fair value of investments 102,024,388
-----------------
Net increase in net assets available for benefits 128,311,110
Net assets available for benefits at beginning of year 998,593,269
-----------------
Net assets available for benefits at end of year $1,126,904,379
=================
See notes to financial statements.
F-4
Becton, Dickinson and Company
Savings Incentive Plan
Notes to Financial Statements
June 30, 2006
1. SIGNIFICANT ACCOUNTING POLICIES
Accounting records of the Becton, Dickinson and Company Savings Incentive Plan
(the "Plan") are maintained on the accrual basis whereby all income, costs and
expenses are recorded when earned or incurred. Investments are recorded on the
basis of cost but are reported in the Plan's financial statements at fair value,
redemption value or contract value. Fair value of marketable equity securities
is determined by quoted market prices in an active market. Investment contracts
are contracts with insurance companies, which are fully benefit responsive and
valued at contract value. Contract value represents contributions made, plus
interest at the contract rate and transfers, less distributions. Interests in
commingled trust funds and mutual funds are valued at the redemption price
established by the trustee or investment manager of the respective fund.
Participant loans are valued at unpaid principal balances with maturities
ranging from three months to four and one-half years for ordinary loans and
twenty years for primary residence loans. Cash equivalents are stated at cost,
which approximates fair value. The Plan considers all highly-liquid investments
with a maturity of 90 days or less when purchased to be cash equivalents.
Investment management fees, brokerage fees, commissions, stock transfer taxes,
and other expenses related to each investment fund are paid out of the
respective fund. Other expenses, such as trustee fees, and other administrative
expenses are shared by Becton, Dickinson and Company (the "Company") and the
Plan.
The preparation of financial statements in conformity with U.S. generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
The investment contracts are contracts with various insurance companies, which
provide known rates of return on deposited funds, provided that the contracts
remain in force until their maturity. The weighted average yield for the
investment contracts was 4.68% and 5.11% at June 30, 2006 and 2005,
respectively. The crediting interest rates ranged from 3.52% to 5.61% for the
plan year ended June 30, 2006. Crediting interest rates are determined based on
the balance and duration of the contract, with certain contracts subject to
quarterly rate resets based on market indices. There are no minimum crediting
interest rates or limitations on guarantees under the terms of the contracts. No
valuation reserves have been established to adjust contract amounts. The
contract value of the investment contracts, which approximates fair value, is
$281,016,311 and $256,511,142 at June 30, 2006 and 2005, respectively.
F-5
Becton, Dickinson and Company
Savings Incentive Plan
Notes to Financial Statements (continued)
2. DESCRIPTION OF THE PLAN
The Plan is a defined contribution plan established for the purpose of
encouraging and assisting employees in following a systematic savings program
and to provide an opportunity for employees, at no cost to themselves, to become
shareholders of Becton, Dickinson and Company. Employees of Becton, Dickinson
and Company and certain of its domestic subsidiaries are eligible for
participation in the Plan on the first enrollment date coincident with or next
following their date of hire. Becton, Dickinson and Company is the sponsor of
the Plan.
Eligible employees who are members of the Plan can authorize a payroll deduction
for a contribution to the Plan in an amount per payroll period equal to any
selected whole percentage of pay from 2% to 20% inclusive. For purposes of the
Plan, total pay includes base pay, overtime compensation and commissions.
Pre-tax contributions are subject to annual Internal Revenue Code limitations of
$15,000 plus a catch-up contribution of $5,000 for participants age 50 and older
for 2006 and $14,000 plus a catch-up contribution of $4,000 for participants age
50 and older for 2005.
Individual employee contributions of up to 6% of total pay are eligible for a
matching Company contribution. The Board of Directors of the Company may, within
prescribed limits, establish, from time to time, the rate of Company
contributions. It has authorized the Company to make a monthly contribution to
the Plan in an amount equal to 50% of eligible employee contributions during
said month minus any forfeitures.
Employee contributions can be in either before-tax ("401(k)") dollars or
after-tax dollars or a combination of both. Employee contributions in before-tax
dollars result in savings going into the Plan before most federal, state or
local taxes are withheld. Taxes are deferred until the employee withdraws the
401(k) contributions from the Plan.
Participating employees are not liable for federal income taxes on amounts
earned in the Plan or on amounts contributed by the Company until such time that
their participating interest is distributed to them. In general, a participating
employee is subject to tax on the amount by which the distribution paid to the
employee exceeds the amount of after-tax dollars the employee has contributed to
the Plan.
Employee contributions are invested, at the option of the employee, in any of
the available funds in 1% increments.
F-6
Becton, Dickinson and Company
Savings Incentive Plan
Notes to Financial Statements (continued)
2. DESCRIPTION OF THE PLAN (CONTINUED)
State Street Bank & Trust Company ("State Street Bank") is the Plan's Trustee.
State Street Bank is also the investment manager of the S&P 500 Flagship Fund
Series A, the MidCap Index Fund Series A, Short-Term Investment Fund, Small Cap
Index Plus Strategy Fund I and the Becton, Dickinson and Company Common Stock
Fund. Wells Fargo Nikko Investment Advisors is the investment manager of the
Commingled Equity Fund, Lord Abbett is the investment manager of the Development
Growth Fund, Capital Guardian Trust Company is the investment manager of the
International Equity Fund and Barclay's is the Investment Manager of the Life
Path Retirement Fund, Life Path 2010 Fund, Life Path 2020 Fund, Life Path 2030
Fund and Life Path 2040 Fund.
The assets of the Company Common Stock Fund are invested in shares of the
Company's common stock. The Trustee has advised that its present intention is to
purchase the Company's common stock exclusively on the open market.
Contributions to the Company Common Stock Fund are comprised of both employee
contributions, as well as employer matching contributions.
Any portion of the Funds, pending permanent investment or distribution, may be
held on a short-term basis in cash or cash equivalents. The State Street
Short-Term Investment Fund is a holding account and represents funds received
awaiting allocation to an investment fund.
The Plan also has loan provisions whereby employees are allowed to take loans on
their vested account balances. Loans originating during a year bear a fixed rate
of interest which is set annually. Employees are required to make installment
payments at each payroll date. The outstanding balance of a loan becomes due and
payable upon an employee's termination. Should an employee, upon his
termination, elect not to repay the outstanding balance, the loan is canceled
and deemed a distribution under the Plan.
The Plan provides for vesting in employer matching contributions based on years
of service as follows:
FULL YEARS OF SERVICE PERCENTAGE
----------------------------------------------
Less than 2 years 0%
2 years but less than 3 years 50%
3 years but less than 4 years 75%
4 years or more 100%
F-7
Becton, Dickinson and Company
Savings Incentive Plan
Notes to Financial Statements (continued)
2. DESCRIPTION OF THE PLAN (CONTINUED)
Participants may become fully vested on the date of termination of employment by
reasons of death, retirement or disability, or attainment of age 65.
Participants may be partially vested under certain conditions in the event of
termination of employment or participation in the Plan for any other reason.
Non-vested Company contributions forfeited by participants are applied to reduce
future Company contributions. Participants' contributions are always 100%
vested.
The Board of Directors of the Company reserves the right to terminate, modify,
alter or amend the Plan at any time and at its own discretion, provided that no
such termination, modification, alteration or amendment shall permit any of the
funds established pursuant to the Plan to be used for any purpose other than the
exclusive benefit of the participating employees. The right to modify, alter or
amend includes the right to change the percentage of the Company's
contributions.
Amounts allocated to withdrawn participants which have not yet been distributed
from the Plan as of June 30, 2006 and 2005 amounted to $3,973,740 and
$4,484,049, respectively. For the purpose of preparing the Plan's Form 5500 such
amounts are recorded as liabilities.
Effective November 1, 2005, the Atto Bioscience, Inc. 401(k) Plan merged into
the Plan. Assets totaling $1,026,220 were transferred into the Plan at that
time.
F-8
Becton, Dickinson and Company
Savings Incentive Plan
Notes to Financial Statements (continued)
3. INVESTMENTS
During 2006, the Plan's investments (including investments purchased, sold, as
well as held during the year) appreciated (depreciated) in fair value as
determined by quoted market prices as follows:
Participant-directed:
Becton, Dickinson and Company Common Stock $ 60,342,862
State Street Bank and Trust Company S&P 500 Flagship Fund Series A 12,521,499
State Street Bank and Trust Company MidCap Index Fund Series A 11,328,933
Wells Fargo Nikko Investment Advisors Commingled Equity Fund 2,668,089
Capital Guardian International Equity Fund 8,971,222
State Street Global Advisors Small Cap Index Plus Strategy Fund I 5,877,687
Barclay's Life Path Retirement (1,928)
Barclay's Life Path 2010 13,373
Barclay's Life Path 2020 256,386
Barclay's Life Path 2030 27,692
Barclay's Life Path 2040 18,573
------------------
$ 102,024,388
==================
4. INCOME TAX STATUS
The Plan has received a determination letter from the Internal Revenue Service
dated February 4, 2004, stating that the Plan is qualified under Section 401(a)
of the Internal Revenue Code (the "Code") and, therefore, the related trust is
exempt from taxation. Once qualified, the Plan is required to operate in
conformity with the Code to maintain its qualification. The plan administrator
believes the Plan is being operated in compliance with the applicable
requirements of the Code and, therefore, believes that the Plan is qualified and
the related trust is tax exempt.
5. RELATED PARTY TRANSACTIONS
During the year ended June 30, 2006, the Plan purchased and distributed 133,000
shares and 762,449 shares, respectively, of the Company's common stock and
recorded $5,517,858 in dividends on the common stock from the Company.
F-9
Becton, Dickinson and Company
Savings Incentive Plan
Notes to Financial Statements (continued)
6. RISKS AND UNCERTAINTIES
The Plan invests in various investment securities. Investment securities are
exposed to various risks such as interest rate, market and credit risks. Due to
the level of risk associated with certain investment securities, it is at least
reasonably possible that changes in the values of investment securities will
occur in the near term and that such changes could materially affect
participants' account balances and the amounts reported in the statements of net
assets available for benefits.
F-10
EIN: 22-0760120
Plan #: 011
Becton, Dickinson and Company
Savings Incentive Plan
Schedule H, Line 4(i)--Schedule of Assets
(Held at End of Year)
June 30, 2006
NUMBER CONTRACT
IDENTITY OF ISSUE, BORROWER, LESSOR OR SIMILAR OF UNITS OR CURRENT
PARTY AND DESCRIPTION OF INVESTMENT OR SHARES VALUE
------------------------------------------------------------------------------------------------------------
STATE STREET BANK & TRUST COMPANY
Becton, Dickinson and Company Common Stock 6,723,506 $391,193,182
*STATE STREET BANK & TRUST COMPANY
S&P 500 Flagship Fund Series A 3,320,843 153,219,300
*STATE STREET BANK & TRUST COMPANY
S&P MidCap Index Fund Series A 18,946,973 102,668,483
*STATE STREET BANK & TRUST COMPANY
State Street Short-Term Investment Fund 34,540,550 4,717,745
*STATE STREET BANK & TRUST COMPANY
Cap Guardian International Equity Fund 35,025,459 50,195,170
*STATE STREET BANK & TRUST COMPANY
State Street Global Advisors Small Cap Index
Plus Strategy Fund I 33,632,431 42,862,787
BARCLAY'S
Life Path Retirement 149,215 1,490,850
Life Path 2010 397,056 3,964,410
Life Path 2020 5,377,181 54,010,670
Life Path 2030 372,577 3,709,907
Life Path 2040 170,560 1,696,755
* As State Street Bank & Trust Company is the trustee of the plan, these
represent party-in-interest transactions.
F-11
EIN: 22-0760120
Plan #: 011
Becton, Dickinson and Company
Savings Incentive Plan
Schedule H, Line 4(i)--Schedule of Assets
(Held at End of Year) (continued)
June 30, 2006
NUMBER CONTRACT
IDENTITY OF ISSUE, BORROWER, LESSOR OR SIMILAR OF UNITS OR CURRENT
PARTY AND DESCRIPTION OF INVESTMENT OR SHARES VALUE
--------------------------------------------------------------------------------------------------------------
IXIS FINANCIAL
GIC #1239-02, due at 4.66% $ 57,169,268
JP MORGAN CHASE BANK
GIC #ABECTON1, at 4.89% 50,060,285
RABOBANK NEDERLAND (IGT BIKRK INT GIC)
BDX080301, due 8/12/03 at 4.94% 50,735,424
MONUMENTAL LIFE INSURANCE COMPANY
#MDA00091TR, termination date as specified by contract,
at 3.52% 8,256,136
MONUMENTAL LIFE INSURANCE COMPANY
#MDA 00591TR, at 5.61% 42,992,676
STATE STREET BANK (IGT INVESCO SHORT-TERM BOND)
GIC #103054, at 4.45% 36,055,609
UBS AG
GIC #5121, at 4.50% 35,746,913
------------------
Total investments 1,090,745,570
Loans receivable from participants (original loan amounts
ranging from $1,000 to $50,000 bearing interest at rates
ranging from 5% to 11.5%) 23,899,649
------------------
$ 1,114,645,219
==================
F-12
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THE
MEMBERS OF THE SAVINGS INCENTIVE PLAN COMMITTEE HAVE DULY CAUSED THIS ANNUAL
REPORT TO BE SIGNED BY THE UNDERSIGNED HEREUNTO DULY AUTHORIZED.
Becton, Dickinson and Company
Savings Incentive Plan
/s/ Gerald Caporicci
--------------------------
GERALD CAPORICCI
MEMBER, SAVINGS INCENTIVE PLAN
COMMITTEE
Date: December 21, 2006
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION METHOD OF FILING
------ ----------- ----------------
23 Consent of Independent Registered Filed with this report
Public Accounting Firm