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Jae Jun | Old School Value

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Becton Dickinson & Co

www.oldschoolvalue.com

8/15/2009

BDX

1999200020012002200320042005200620072008

TTM

Revenue3,418.4$ 3,618.3$ 3,754.3$ 4,033.1$ 4,527.9$ 4,934.8$ 5,414.7$ 5,834.8$ 6,359.7$ 7,155.9$ 7,177.5$

COGS1,711.7$ 1,848.3$ 1,913.3$ 2,083.7$ 2,336.3$ 2,500.4$ 2,662.0$ 2,886.9$ 3,071.9$ 3,492.6$ 3,451.3$ COGS (%)50.1%51.1%51.0%51.7%51.6%50.7%49.2%49.5%48.3%48.8%48.1%

Gross Profit1,706.7$ 1,770.0$ 1,841.0$ 1,949.4$ 2,191.7$ 2,434.4$ 2,752.7$ 2,948.0$ 3,287.8$ 3,663.4$ 3,726.2$ Gross Profit (%)49.9%48.9%49.0%48.3%48.4%49.3%50.8%50.5%51.7%51.2%51.9%

SG&A931.9$ 973.9$ 983.3$ 1,032.0$ 1,207.5$ 1,311.5$ 1,449.9$ 1,537.5$ 1,602.4$ 1,715.1$ 1,728.3$ SG&A (%)27.3%26.9%26.2%25.6%26.7%26.6%26.8%26.4%25.2%24.0%24.1%R&D254.0$ 223.8$ 211.8$ 220.2$ 235.1$ 235.7$ 271.6$ 360.0$ 482.2$ 396.2$ 404.9$ R&D (%)7.4%6.2%5.6%5.5%5.2%4.8%5.0%6.2%7.6%5.5%5.6%Other75.5$ 57.5$ NaN21.5$ -NaN100.0$ -$ -$ -$ -$ -$ Other (%)2.2%1.6%#VALUE!0.5%#VALUE!2.0%0.0%0.0%0.0%0.0%0.0%

Operating Income445.3$ 514.8$ 645.9$ 675.7$ 749.1$ 787.3$ 1,031.2$ 1,050.5$ 1,203.2$ 1,552.1$ 1,593.1$ Operating Income (%)13.0%14.2%17.2%16.8%16.5%16.0%19.0%18.0%18.9%21.7%22.2%

Net Int Inc & Other(72.6)$ 5.1$ (69.1)$ (47.1)$ (39.4)$ (34.4)$ (26.3)$ (15.5)$ 0.8$ 1.5$ (8.7)$

Earnings Before Taxes372.7$ 519.9$ 576.8$ 628.6$ 709.7$ 752.9$ 1,004.9$ 1,035.0$ 1,204.0$ 1,553.6$ 1,584.4$

Income Taxes96.9$ 127.0$ 138.4$ 148.6$ 162.7$ 170.4$ 312.6$ 279.4$ 347.8$ 425.7$ 429.6$

Earnings After Taxes275.7$ 392.9$ 438.4$ 480.0$ 547.1$ 582.5$ 692.3$ 755.6$ 856.2$ 1,127.9$ 1,154.8$

Acctg Changes-$ -$ (36.8)$ -$ -$ -$ -$ -$ -$ -$ -$ Disc Operations-$ -$ -$ -$ -$ (115.1)$ 30.0$ (3.3)$ 33.9$ (0.9)$ (2.2)$ Ext Items-$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

Net Income275.7$ 392.9$ 401.7$ 480.0$ 547.1$ 467.4$ 722.3$ 752.3$ 890.0$ 1,127.0$ 1,152.6$ Net Income (%)8.1%10.9%10.7%11.9%12.1%9.5%13.3%12.9%14.0%15.7%16.1%

Diluted EPS, Cont Ops$1.0$ 1.5$ 1.6$ 1.8$ 2.1$ 2.2$ 2.7$ 3.0$ 3.4$ 4.5$ 4.8$ Diluted EPS$1.0$ 1.5$ 1.5$ 1.8$ 2.1$ 1.8$ 2.8$ 2.9$ 3.5$ 4.5$ 4.8$ Shares265263269268264264260256255244241Cash and Equiv59.9$ 49.2$ 82.1$ 243.1$ 519.9$ 719.4$ 1,042.9$ 1,000.3$ 511.5$ 830.5$ 542.7$ Short-Term Investments4.7$ 5.6$ 4.6$ 1.9$ -$ 32.1$ 86.8$ 106.4$ 158.0$ 199.9$ 187.5$ Accts Rec812.5$ 751.7$ 768.1$ 746.0$ 781.3$ 807.4$ 842.8$ 885.8$ 1,083.2$ 1,079.1$ 1,062.1$ Inventory642.5$ 678.7$ 707.7$ 697.7$ 795.0$ 738.8$ 776.0$ 875.7$ 1,052.0$ 1,080.4$ 1,180.7$ Other Current Assets164.1$ 175.5$ 200.5$ 240.0$ 242.3$ 343.7$ 226.9$ 317.1$ 325.9$ 424.8$ 434.8$

Total Current Assets1,683.7$ 1,660.7$ 1,762.9$ 1,928.7$ 2,338.6$ 2,641.3$ 2,975.3$ 3,185.3$ 3,130.6$ 3,614.7$ 3,407.8$

Net PP&E1,431.2$ 1,576.1$ 1,716.0$ 1,765.7$ 1,844.8$ 1,881.0$ 1,933.7$ 2,133.6$ 2,497.3$ 2,744.5$ 2,663.1$ Intangibles1,034.7$ 948.1$ 900.8$ 1,186.4$ 1,196.8$ 1,039.1$ 966.8$ 1,090.8$ 1,234.9$ 715.4$ 1,167.2$ Other Long-Term Assets287.4$ 320.2$ 422.6$ 159.7$ 192.1$ 191.1$ 196.2$ 414.9$ 466.6$ 838.4$ 337.8$

Total Assets4,437.0$ 4,505.1$ 4,802.3$ 5,040.5$ 5,572.3$ 5,752.6$ 6,072.0$ 6,824.5$ 7,329.4$ 7,912.9$ 7,575.8$

Accts Payable209.4$ 184.0$ 205.1$ 224.7$ 221.5$ 206.9$ 252.3$ 243.6$ 267.0$ 260.9$ -$ Short-Term Debt631.3$ 637.7$ 454.0$ 434.6$ 121.9$ 49.3$ 206.5$ 427.2$ 207.6$ 201.3$ 405.6$ Taxes Payable23.4$ 32.3$ 50.1$ 57.2$ 75.0$ 86.7$ 70.9$ 34.6$ 86.9$ 28.9$ -$ Accrued Liabilities465.3$ 499.6$ 555.5$ 535.9$ 625.0$ 692.9$ 769.8$ 870.9$ 917.3$ 519.1$ -$ Other Short-TermLiabilities-$ -$ NaNNaN-$ 14.2$ NaN-$ -$ 406.4$ 1,105.1$

Total Current Liabilities1,329.3$ 1,353.5$ 1,264.7$ 1,252.5$ 1,043.4$ 1,050.1$ 1,299.4$ 1,576.3$ 1,478.8$ 1,416.6$ 1,510.7$

Long-Term Debt954.2$ 779.6$ 783.0$ 803.0$ 1,184.0$ 1,171.5$ 1,060.8$ 957.0$ 955.7$ 953.2$ 747.7$ Other Long-TermLiabilities384.8$ 416.0$ 425.8$ 497.1$ 447.9$ 463.1$ 427.8$ 455.0$ 532.9$ 607.6$ 513.5$

Total Liabilities2,668.3$ 2,549.1$ 2,473.5$ 2,552.5$ 2,675.3$ 2,684.7$ 2,788.0$ 2,988.3$ 2,967.4$ 2,977.4$ 2,771.8$ Total Equity1,768.7$ 1,956.0$ 2,328.8$ 2,488.0$ 2,897.0$ 3,067.9$ 3,284.0$ 3,836.2$ 4,362.0$ 4,935.6$ 4,804.0$ Total Liabilities & Equity4,437.0$ 4,505.1$ 4,802.3$ 5,040.5$ 5,572.3$ 5,752.6$ 6,072.0$ 6,824.5$ 7,329.4$ 7,913.0$ 7,575.8$

Net Income275.7$ 392.9$ 401.7$ 480.0$ 547.1$ 467.4$ 722.3$ 752.3$ 890.0$ 1,127.0$ 1,152.6$ Depr & Amort258.9$ 288.3$ 305.7$ 304.9$ 344.5$ 357.2$ 387.5$ 405.1$ 441.3$ 477.4$ 479.2$ Deferred Taxes4.6$ 37.3$ 37.4$ 57.2$ (1.0)$ (31.4)$ 63.2$ (129.3)$ (115.5)$ 80.1$ 97.3$ Other(107.4)$ (102.9)$ 33.9$ (6.0)$ 15.2$ 307.0$ 50.9$ 48.3$ 20.2$ 3.5$ (201.6)$

Cash from Operations431.8$ 615.5$ 778.7$ 836.0$ 905.7$ 1,100.3$ 1,223.9$ 1,076.4$ 1,236.1$ 1,688.0$ 1,527.5$

Cap Ex(311.6)$ (376.4)$ (370.8)$ (259.7)$ (261.0)$ (265.7)$ (317.6)$ (459.3)$ (556.4)$ (602.0)$ (559.2)$ Purchase of Business(374.2)$ (21.3)$ (31.0)$ -$ -$ (24.3)$ -$ (231.5)$ (339.5)$ (41.3)$ -$ Other(130.1)$ (5.8)$ (140.2)$ (101.4)$ (88.3)$ (105.3)$ (64.4)$ (95.8)$ (122.3)$ (139.8)$ (206.2)$

Cash from Investing(815.9)$ (403.4)$ (541.9)$ (361.1)$ (349.4)$ (395.2)$ (382.0)$ (786.5)$ (1,018.3)$ (783.0)$ (765.4)$

Net Issuance of Stock26.8$ 34.7$ 82.9$ (185.9)$ (263.4)$ (273.9)$ (426.5)$ (301.1)$ (319.5)$ (364.6)$ (470.1)$ Net Issuance of Debt79.2$ (60.0)$ (100.1)$ (6.6)$ 396.6$ (21.7)$ (104.5)$ (0.8)$ (100.8)$ -$ -$ Dividends(88.1)$ (95.7)$ (101.3)$ (102.5)$ (104.1)$ (152.4)$ (182.2)$ (212.4)$ (239.8)$ (278.5)$ (297.8)$ Other346.8$ (98.5)$ (82.6)$ (18.8)$ (320.8)$ (56.5)$ 188.8$ 172.2$ (66.0)$ 57.3$ 16.3$

Cash from Financing364.7$ (219.5)$ (201.1)$ (313.7)$ (291.7)$ (504.4)$ (524.5)$ (342.2)$ (726.0)$ (585.8)$ (751.6)$

Currency Adj(4.0)$ (3.3)$ (2.7)$ (0.2)$ 12.1$ 1.6$ 3.9$ 9.7$ 15.0$ 0.8$ (26.5)$ Change in Cash(23.3)$ (10.7)$ 32.9$ 161.0$ 276.8$ 199.5$ 323.5$ (42.6)$ (488.8)$ 319.0$ (18.3)$ Cash from Operations431.8$ 615.5$ 778.7$ 836.0$ 905.7$ 1,100.3$ 1,223.9$ 1,076.4$ 1,236.1$ 1,688.0$ 1,527.5$ Cap Ex(311.6)$ (376.4)$ (370.8)$ (259.7)$ (261.0)$ (265.7)$ (317.6)$ (459.3)$ (556.4)$ (602.0)$ (559.2)$

Free Cash Flow223.0$ 304.8$ 336.6$ 525.2$ 630.6$ 558.9$ 792.2$ 698.1$ 774.9$ 1,002.4$ 1,072.6$

Book Value Per Share6.67$ 7.44$ 8.66$ 9.28$ 10.97$ 11.62$ 12.63$ 14.99$ 17.11$ 20.23$ 19.93$ ticker

BDX

Financial Data

Company Name

Income Statement

Operating ExpensesOther Income and Expense

Balance SheetFree Cash FlowLiabilities & Stockholders' EquityCash Flows StatementCash Flows From Operating ActivitiesCash Flows From Investing ActivitiesAssetsCash Flows From Financing Activities

all figures in $Mil

8/15/2009

User Growth

www.oldschoolvalue.com

10.00%Desired MOSGrowthDiscount %PriceShare ValueBuy underActual D/C %

52Wk High52Wk Low

50%10.0%9.0%66.39$87.38$ 43.69$ 24%$89.24$58.14 1999200020012002200320042005200620072008Revenue

3,418.4$ 3,618.3$ 3,754.3$ 4,033.1$ 4,527.9$ 4,934.8$ 5,414.7$ 5,834.8$ 6,359.7$ 7,155.9$

Gross Profit

1,706.7$ 1,770.0$ 1,841.0$ 1,949.4$ 2,191.7$ 2,434.4$ 2,752.7$ 2,948.0$ 3,287.8$ 3,663.4$

Operating Income

445.3$ 514.8$ 645.9$ 675.7$ 749.1$ 787.3$ 1,031.2$ 1,050.5$ 1,203.2$ 1,552.1$

Net Income

275.7$ 392.9$ 401.7$ 480.0$ 547.1$ 467.4$ 722.3$ 752.3$ 890.0$ 1,127.0$

Diluted EPS

1.0$ 1.5$ 1.5$ 1.8$ 2.1$ 1.8$ 2.8$ 2.9$ 3.5$ 4.5$

Cash from Operations

431.8$ 615.5$ 778.7$ 836.0$ 905.7$ 1,100.3$ 1,223.9$ 1,076.4$ 1,236.1$ 1,688.0$

Free Cash Flow

223.0$ 304.8$ 336.6$ 525.2$ 630.6$ 558.9$ 792.2$ 698.1$ 774.9$ 1,002.4$

Current Assets

1,683.7$ 1,660.7$ 1,762.9$ 1,928.7$ 2,338.6$ 2,641.3$ 2,975.3$ 3,185.3$ 3,130.6$ 3,614.7$

Current Liabilities

1,329.3$ 1,353.5$ 1,264.7$ 1,252.5$ 1,043.4$ 1,050.1$ 1,299.4$ 1,576.3$ 1,478.8$ 1,416.6$

Total Liabilities

2,668.3$ 2,549.1$ 2,473.5$ 2,552.5$ 2,675.3$ 2,684.7$ 2,788.0$ 2,988.3$ 2,967.4$ 2,977.4$

Tangible Shareholder Equity

734.0$ 1,007.9$ 1,428.0$ 1,301.6$ 1,700.2$ 2,028.8$ 2,317.2$ 2,745.4$ 3,127.1$ 4,220.2$

Gross Margin

49.93%48.92%49.04%48.34%48.40%49.33%50.84%50.52%51.70%51.19%

Operating Margin

13.03%14.23%17.20%16.75%16.54%15.95%19.04%18.00%18.92%21.69%

Net Margin

8.07%10.86%10.70%11.90%12.08%9.47%13.34%12.89%13.99%15.75%

Current Assets>1.5 times

1.31.21.41.52.22.52.32.02.12.6

CROIC

10.76%13.83%12.77%20.19%18.93%15.26%20.82%16.79%16.79%17.34%

FCF/Sales

6.5%8.4%9.0%13.0%13.9%11.3%14.6%12.0%12.2%14.0%

Inventory Turnover

2.72.72.73.02.93.43.43.32.93.2

Return On Assets (ROA)

6.66%8.79%8.63%9.75%10.31%8.25%12.22%11.67%12.58%14.79%

Retun On Equity (ROE)

16.78%21.62%19.12%20.26%20.59%15.85%22.85%21.13%21.71%24.24%

Debt to Equity

150.9%130.3%106.2%102.6%92.3%87.5%84.9%77.9%68.0%60.3%

Capitalization Ratio

35.0%28.5%25.2%24.4%29.0%27.6%24.4%20.0%18.0%16.2%

FCF to Debt

8.4%12.0%13.6%20.6%23.6%20.8%28.4%23.4%26.1%33.7%

2003-20072004-20082003-20062004-20072005-20082003-20052004-20062005-20072006-2008MedianShareholder Equity

16.5%20.1%17.3%15.5%22.1%16.7%16.3%16.2%24.0%16.7%

Free Cash Flow

5.3%15.7%3.4%11.5%8.2%12.1%11.8%-1.1%19.8%11.5%

CROIC

16.8%16.8%17.9%16.8%17.1%18.9%16.8%16.8%16.8%16.8%

FCF/Sales

12.2%12.2%12.9%12.1%13.1%13.9%12.0%12.2%12.2%12.2%

ROA

11.7%12.2%11.0%11.9%12.4%10.3%11.7%12.2%12.6%11.9%

ROE

21.1%21.7%20.9%21.4%22.3%20.6%21.1%21.7%21.7%21.4%

Revenue Growth

8.9%9.7%8.8%8.8%9.7%9.4%8.7%8.4%10.7%8.9%

Gross Margin

50.5%50.8%49.9%50.7%51.0%49.3%50.5%50.8%51.2%50.7%

Operating Margin

18.0%18.9%17.3%18.5%19.0%16.5%18.0%18.9%18.9%18.5%

Net Margin

12.9%13.3%12.5%13.1%13.7%12.1%12.9%13.3%14.0%13.1%

Earnings Growth

13.9%26.0%12.3%25.4%17.2%15.7%28.7%12.2%23.4%17.2%

Cash from Ops Growth

8.1%11.3%5.9%4.0%11.3%16.2%-1.1%0.5%25.2%8.1%

Growing at200920102011201220132014201520162017201810%

1,103$ 1,213$ 1,334$ $1,414.97$1,542.32$1,681.13$1,832.43$1,869.16$2,020.56$2,184.23

Growing at 3% (Default)2019202020212022202320242025202620272028

2,249.75$ 2,317.25$ 2,386.77$ 2,458.37$ 2,532.12$ 2,608.08$ 2,686.33$ 2,766.91$ 2,849.92$ 2,935.42$

Total ValueShares OutstandingPer Share ValueMargin of SafetyPurchase PriceCurrent PriceActual DiscountEnterprise ValueEnterprise Value/EBITDA

66.39$

24%

Becton Dickinson & Co

all figures in $Mil

7.844

Cash Flow Data

50%

43.69$

Projection of future Free Cash Flow

16,330.00$20,931$Company Nameticker

87.38$

Free Cash Flow and Tangible Shareholder Equity TrendCompany Valuation

BDX

User Input Params

Balance Sheet Data

Financial Data

Efficiency & ProfitabilityMargins

239.53

Income Sheet DataMulti-Year PerformanceDebt Related

$223.0$304.8$336.6$525.2$630.6$558.9$792.2$698.1$774.9$1,002.4$734.0$1,007.9$1,428.0$1,301.6$1,700.2$2,028.8$2,317.2$2,745.4$3,127.1$4,220.2$-$500.0$1,000.0$1,500.0$2,000.0$2,500.0$3,000.0$3,500.0$4,000.0$4,500.01999 2000 2001 2002 2003 2004 2005 2006 2007 2008