10q10k10q10k.net

What changed in Baxter International's 10-K — 2024 vs 2025

vs

Paragraph-level year-over-year comparison of Baxter International's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+575 added−725 removedSource: 10-K (2026-02-12) vs 10-K (2025-02-21)

Top changes in Baxter International's 2025 10-K

575 paragraphs added · 725 removed · 430 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

59 edited+15 added−25 removed29 unchanged
Biggest changeOur diversified and broad portfolio of medical products that treat acute or chronic conditions and our global presence are core components of our strategy as we work to achieve these objectives. We are focused on key strategic pillars as part of our pursuit of industry leading performance: innovation; operational efficiency; and capital allocation.
Biggest changeBusiness Strategy Our business strategy is focused on driving sustainable growth and innovation aligned with our mission to save and sustain lives and our vision to redefine healthcare delivery. Our diversified and broad portfolio of medical products that treat acute or chronic conditions and our global presence are core components of our strategy as we work to achieve these objectives.
These reports are also available free of charge via EDGAR through the Securities and Exchange Commission website (www.sec.gov).
Securities and Exchange Commission. These reports are also available free of charge via EDGAR through the Securities and Exchange Commission website (www.sec.gov).
Sales and Distribution We have our own direct sales force and also make sales to and through independent distributors, drug wholesalers acting as sales agents and specialty pharmacy or other alternate site providers. In the United States, third parties, such as Cardinal Health, Inc., warehouse and ship a significant portion of our products through their distribution centers.
Sales and Distribution We have our own direct sales force and also make sales to and through independent distributors, drug wholesalers acting as sales agents and specialty pharmacy or other alternate site providers. In the United States, third parties, such as Cardinal Health, Inc. and Medline Inc., warehouse and ship a significant portion of our products through their distribution centers.
Management's Discussion and Analysis of Financial Condition and Results of Operations of this Annual Report on Form 10-K. Contractual Arrangements Our products are sold through contracts with customers, both within and outside the United States. Some of these contracts have terms of more than one year and place limits on our ability to increase prices.
Management's Discussion and Analysis of Financial Condition and Results of Operations of this Annual Report on Form 10-K. 3 Contractual Arrangements Our products are sold through contracts with customers, both within and outside the United States. Some of these contracts have terms of more than one year and place limits on our ability to increase prices.
In addition, global and regional competitors continue to expand their manufacturing capacity and sales and marketing channels. We believe customer purchasing decisions are primarily focused on cost-effectiveness, price, service, product performance and technological innovation. There has been consolidation in our customer base and by our competitors, which has resulted and continues to result in pricing and market pressures. 1.
In addition, global and regional competitors continue to expand their manufacturing capacity and sales and marketing channels. We believe customer purchasing decisions are primarily focused on cost-effectiveness, price, service, product performance and technological innovation. There has been consolidation in our customer base and by our competitors, which has resulted and continues to result in pricing and market pressures.
The success and growth of our business depends in large part on our ability to attract, retain and develop talented and high-performing employees at all levels of our organization with a myriad of backgrounds and experiences, including the individuals who comprise our global workforce as well as executive officers and other key personnel.
The success and growth of our business depends in large part on our ability to attract, retain, develop and engage talented and high-performing employees at all levels of our organization with a myriad of backgrounds and experiences, including the individuals who comprise our global workforce as well as executive officers and other key personnel.
Such actions may include warning letters, product recalls or seizures, monetary sanctions, injunctions to halt the manufacture and distribution of products, civil or criminal sanctions, refusal of a government to grant approvals or licenses, restrictions on operations or withdrawal of existing approvals and licenses.
Such actions may include warning letters, import restrictions, product recalls or seizures, monetary sanctions, injunctions to halt the manufacture and distribution of products, civil or criminal sanctions, refusal of a government to grant approvals or licenses, restrictions on operations or withdrawal of existing approvals and licenses.
Item 1. Business. Company Overview Baxter International Inc., through its subsidiaries, provides a broad portfolio of essential healthcare products, including sterile intravenous (IV) solutions; infusion systems and devices; parenteral nutrition therapies; inhaled anesthetics; generic injectable pharmaceuticals; surgical hemostat and sealant products, advanced surgical equipment; smart bed systems; patient monitoring and diagnostic technologies; and respiratory health devices.
Item 1. Business. Company Overview Baxter International Inc., through our subsidiaries, provides a broad portfolio of essential healthcare products, including sterile intravenous (IV) solutions; infusion systems and devices; parenteral nutrition therapies; inhaled anesthetics; generic injectable pharmaceuticals; surgical hemostat and sealant products; advanced surgical equipment; smart bed systems; patient monitoring and diagnostic technologies; and respiratory health devices.
For more information on these risks, see the information under the captions “Risks Relating to Our Business—We are subject to risks associated with doing business globally” and “—Changes in foreign currency exchange rates and interest rates have had, and may in the future have, an adverse effect on our results of operations, financial condition, cash flows and liquidity” in Item 1A.
For more information on these risks, see the information under the captions “Risks Relating to Our Operations—We are subject to risks associated with doing business globally” and “Risks Relating to Our Business and Financial Performance—Changes in foreign currency exchange rates and interest rates have had, and may in the future have, an adverse effect on our results of operations, financial condition, cash flows and liquidity” in Item 1A.
To assess the impact of the investments we make in our people, and to help us consistently improve our human resources programs, we regularly conduct anonymous surveys of our global workforce to seek feedback on a variety of topics including confidence in our leadership, competitiveness of our compensation and benefits packages, career growth opportunities and improvements on how we can make our company an employer of choice.
To assess the impact of the investments we make in our people, and to help us consistently improve our human resources programs, we periodically conduct anonymous surveys of our global workforce to seek feedback on a variety of topics including confidence in our leadership, competitiveness of our compensation and benefits packages, career growth opportunities and improvements on how we can make our company an employer of choice.
These actions appear to be part of a general trend toward increased enforcement activity globally. Our operations involve the use of substances regulated under environmental laws, primarily in manufacturing and sterilization processes. Our environmental policies require compliance with all applicable environmental regulations and contemplate, among other things, appropriate capital expenditures for environmental protection.
These actions appear to be part of a general trend toward increased enforcement activity globally. 6 Our operations involve the use of substances regulated under environmental laws, primarily in manufacturing processes. Our environmental policies require compliance with all applicable environmental regulations and contemplate, among other things, appropriate capital expenditures for environmental protection.
Information contained on our website shall not be deemed incorporated into, or to be a part of, this Annual Report on Form 10-K.
Information contained on our website shall not be deemed incorporated into, or to be a part of, this Annual Report on Form 10-K. 7
Advancing our corporate responsibility goals contributes to business, social and economic value, including attraction and retention of employees, enhanced operational efficiency and implementation of enterprise risk management strategies, among others. In 2021, we launched our 2030 Corporate Responsibility Commitment featuring strategic goals for focused action.
We believe advancing our sustainability and corporate responsibility goals contributes to business, economic, and social value, including attraction and retention of employees, enhanced operational efficiency and implementation of enterprise risk management strategies, among others. In 2021, we launched our 2030 Corporate Responsibility Commitment featuring strategic goals for focused action.
Available Information We make available free of charge on our website at www.baxter.com our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (Exchange Act), as soon as reasonably practicable after electronically filing or furnishing such material with the Securities and Exchange Commission.
Available Information We make available free of charge on our website at www.baxter.com our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (Exchange Act), as soon as reasonably practicable after electronically filing or furnishing such material with the U.S.
Operational Excellence As discussed above under “Recent Strategic Actions,” in the third quarter of 2023, we implemented a new operating model intended to simplify and streamline our operations and better align our manufacturing and supply chain to our commercial activities.
Operational Simplification As discussed above under “Recent Strategic Actions,” in the third quarter of 2023, we implemented a new operating model intended to simplify and streamline our operations and better align our manufacturing and supply chain to our commercial activities.
The Pharmaceuticals segment includes sales of specialty injectable pharmaceuticals, inhaled anesthetics and drug compounding services. For financial information about our segments, see Note 18 in Item 8 of this Annual Report on Form 10-K.
The Pharmaceuticals segment includes sales of specialty injectable pharmaceuticals, inhaled anesthetics and drug compounding services. For financial information about our segments, see Note 17 in Item 8 of this Annual Report on Form 10-K.
During this deleveraging period, we currently intend to continue paying a dividend (which we reduced in November 2024), not make any share repurchases and be highly selective with respect to any potential acquisitions.
During this deleveraging period, we currently intend to continue paying a dividend (which we reduced in November 2025), not make any share repurchases and be highly selective with respect to any potential acquisitions.
Risk Factors of this Annual Report on Form 10-K. For financial information about our foreign and domestic revenues and segment information, see Note 18, in Item 8 of this Annual Report on Form 10-K. For more information regarding foreign currency exchange risk, refer to the 3 discussion under the caption entitled “Financial Instrument Market Risk” in Item 7.
Risk Factors of this Annual Report on Form 10-K. For financial information about our foreign and domestic revenues and segment information, see Note 17, in Item 8 of this Annual Report on Form 10-K. For more information regarding foreign currency exchange risk, refer to the discussion under the caption entitled “Financial Instrument Market Risk” in Item 7.
Management's Discussion of Analysis and Financial Condition and Results of Operations of this Annual Report on Form 10-K. Corporate Responsibility Driven by our mission to save and sustain lives, Baxter's corporate responsibility strategy focuses on addressing corporate responsibility matters that affect our patients, customers, employees, communities and other critical stakeholders worldwide.
Management's Discussion of Analysis and Financial Condition and Results of Operations of this Annual Report on Form 10-K. 5 Sustainability and Corporate Responsibility Driven by our mission to save and sustain lives, Baxter's sustainability and corporate responsibility strategy focuses on addressing related matters that affect our patients, customers, employees, communities and other critical stakeholders worldwide.
As of December 31, 2024, after giving effect to the recent sale of our Kidney Care business (as discussed below), we manufactured products in over 20 countries and sold them in over 100 countries. Baxter International Inc. was incorporated under Delaware law in 1931.
As of December 31, 2025, after giving effect to the sale of our Kidney Care business (as discussed below), we manufactured products in over 20 countries and sold them in over 100 countries. Baxter International Inc. was incorporated under Delaware law in 1931.
Even after we obtain regulatory authorization to market a product, additional regulatory authorization may be necessary to maintain the product in the market, including additional 501(k) clearances, new drug approval (NDA) supplements, and other regulatory submissions.
Even after we obtain regulatory authorization to market a product, additional regulatory authorization may be necessary to maintain the product in the market, including additional 510(k) clearances, new drug approval supplements, and other regulatory submissions.
The Healthcare Systems & Technologies segment includes sales of our connected care solutions and collaboration tools, including smart bed systems, patient monitoring systems and diagnostic technologies, respiratory health devices and advanced equipment for the surgical space, including surgical video technologies, precision positioning devices and other accessories.
The Healthcare Systems & Technologies segment includes sales of our connected care solutions and collaboration tools, including smart bed systems, patient monitoring systems and diagnostic technologies, respiratory health devices and advanced equipment for the surgical space, including operating room integration technologies, precision positioning devices and other accessories.
Products manufactured by us are sold primarily under our own trademarks and trade names. Some products distributed by us are sold under our trade names, while others are sold under trade names owned by our suppliers or partners. Trade secret protection of unpatented confidential and proprietary information is also important to us.
Some products distributed by us are sold under our trade names, while others are sold under trade names owned by our suppliers or partners. Trade secret protection of unpatented confidential and proprietary information is also important to us.
Quality Management Our continued success depends upon the quality of our products. Quality management plays an essential role in determining and meeting customer requirements, helping to prevent defects, facilitating continuing improvement of our processes, products and services, and helping to assure the safety and efficacy of our products.
Quality management plays an essential role in determining and meeting customer requirements, helping to prevent defects, facilitating continuing improvement of our processes, products and services, and helping to assure the safety and efficacy of our products.
In each jurisdiction outside the United States, our activities are subject to regulation by government agencies including the EMA and MHRA in Europe, NMPA in China and other agencies in other jurisdictions. Many of the agencies enforcing these laws have increased their enforcement activities with respect to healthcare companies in recent years.
In each jurisdiction outside the United States, our activities are subject to regulation by government agencies including the above mentioned EMA, MHRA, Health Canada, NMPA and other agencies in other jurisdictions. Many of the agencies enforcing these laws have increased their enforcement activities with respect to healthcare companies in recent years.
The Food and Drug Administration (FDA) in the United States, the European Medicines Agency (EMA) and the Medicines & 6 Healthcare products Regulatory Agency (MHRA) in Europe, the National Medical Products Administration (NMPA) in China and other government agencies, inside and outside of the United States, administer requirements covering the testing, safety, effectiveness, manufacturing, labeling, promotion and advertising, distribution and post-market surveillance of our products.
The Food and Drug Administration (FDA) in the United States, the European Medicines Agency (EMA) in the European Union, the Medicines & Healthcare products Regulatory Agency (MHRA) in the United Kingdom, Health Canada in Canada, the National Medical Products Administration (NMPA) in China and other government agencies, inside and outside of the United States, administer requirements covering the testing, safety, effectiveness, manufacturing, labeling, promotion and advertising, pricing, distribution and post-market surveillance of our products.
Our compensation programs are designed to align the compensation of our employees with our performance and to provide the proper incentives to attract, retain and motivate 7 employees to achieve superior results. The structure of our compensation programs balances incentive earnings for both short-term and long-term performance. • Health and Safety.
Our compensation programs are designed to align the compensation of our employees with our performance and to provide the proper incentives to attract, retain and motivate employees to achieve superior results. The structure of our compensation programs balances incentive earnings for both short-term and long-term performance. • Health and Safety. Health and safety are firmly rooted across our global footprint.
Maintaining Disciplined and Balanced Capital Allocation Subject to market conditions and our investment grade targets, our capital allocation strategies currently include the following: • debt repayments to support our deleveraging commitments; • active portfolio management through the identification of attractive acquisition and divestiture transactions, including the recent divestitures of our BPS and Kidney Care businesses; and • returning capital to stockholders through dividends, while balancing any returns with other strategic actions we take.
Maintaining Disciplined and Balanced Capital Allocation Subject to market conditions and our investment grade targets, our capital allocation strategies currently include the following: • debt repayments to support our deleveraging commitments; • active portfolio management through the identification of attractive acquisition and divestiture transactions, including the divestitures of our BPS and Kidney Care businesses and strategic market exits, which we expect to continue in the future; and • returning capital to stockholders through dividends and eventually share repurchases, while balancing returns with strategic actions we take.
Human Capital Management As of December 31, 2024, after giving effect to the Kidney Care sale, we employed approximately 38,000 people globally, with approximately 15,000 employees in the United States and approximately 23,000 employees outside of the United States. Our employees set the foundation for our ability to achieve our strategic objectives.
Human Capital Management As of December 31, 2025, after giving effect to the Kidney Care sale, we employed approximately 37,500 people globally, with approximately 15,100 employees in the United States and approximately 22,400 employees outside of the United States. Our employees set the foundation for our ability to achieve our strategic objectives.
Our Commitment is anchored by three pillars - Empower our Patients, Protect our Planet and Champion our People and Communities. The 2030 Corporate Responsibility Commitment and Goals highlight Baxter's corporate responsibility focus and help to further advance our corporate responsibility performance.
Our Commitment is anchored by three pillars - Deliver Sustainable Healthcare, Protect our Planet and Champion our People and Communities. The 2030 Corporate Responsibility Commitment and Goals highlight Baxter's focus to further advance our sustainability and corporate responsibility performance.
After giving effect to certain adjustments, we received approximately $3.71 billion pre-tax cash proceeds at closing of the transaction with the net after tax proceeds currently estimated to be approximately $3.4 billion, subject to certain post-closing adjustments.
After giving effect to certain adjustments, we received approximately $3.71 billion pre-tax cash proceeds at closing of the transaction with the net after tax proceeds of approximately $3.3 billion, prior to giving effects to certain post-closing adjustments.
We also benefit from efficiencies and cost advantages resulting from shared manufacturing facilities and the technological advantages of our products. 4 Although no single company competes with us in all of our businesses, we face substantial competition in each of our segments from international and domestic healthcare, medical products and pharmaceutical companies and providers of all sizes, and these competitors often differ across our businesses.
Although no single company competes with us in all of our businesses, we face substantial competition in each of our segments from international and domestic healthcare, medical products and pharmaceutical companies and providers of all sizes, and these competitors often differ across our businesses.
We expect to announce a refreshed Corporate Responsibility commitment and goal set after the issuance of our 2024 Corporate Responsibility Report (to be issued in June 2025), either in a separate announcement or as part of the 2025 Corporate Responsibility Report.
We expect to announce a refreshed commitments and goals set after the issuance of our 2025 Corporate Responsibility Report, either in a separate announcement or as part of the 2026 Corporate Responsibility Report.
We also seek to develop new and alternative sources of supply where beneficial to our overall raw materials procurement strategy. Refer to Item 1A. Risk Factors of this Annual Report on Form 10-K for further information regarding risks related to the supply chain, raw materials and component parts (including with respect to the qualification of any new or alternative supplier).
Risk Factors of this Annual Report on Form 10-K for further information regarding risks related to the supply chain, raw materials and component parts (including with respect to the qualification of any new or alternative supplier).
These activities may result in the consolidation of one or more R&D facilities. For more information on our R&D activities, refer to the discussion under the caption entitled “Strategic Objectives” in Item 7. Management's Discussion of Analysis and Financial Condition and Results of Operations of this Annual Report on Form 10-K.
For more information on our R&D activities, refer to the discussion under the caption entitled “Strategic Objectives” in Item 7. Management's Discussion of Analysis and Financial Condition and Results of Operations of this Annual Report on Form 10-K. Quality Management Our continued success depends upon the quality of our products.
We used substantially all of the after-tax proceeds from this transaction to repay certain of our debt obligations, including $514 million of commercial paper borrowings and $2.28 billion of long-term debt that we repaid during the fourth quarter of 2023, as well as €750 million of senior notes that we repaid during the second quarter of 2024.
We used substantially all of the after-tax proceeds from this transaction to repay certain of our debt obligations, including $514 million of commercial paper borrowings and $2.28 billion of long-term debt that we repaid during the fourth quarter of 2023, as well as €750 million of senior notes that we repaid during the second quarter of 2024. 1 Business Segments and Products We currently manage our global operations based on three reportable segments: Medical Products & Therapies, Healthcare Systems & Technologies and Pharmaceuticals.
International Operations A significant portion of our revenues are generated outside of the United States and thoughtful geographic expansion remains a key component of our strategy. Our international presence includes operations in Europe, the Middle East, Africa, Asia-Pacific, Latin America and Canada. We are subject to certain risks inherent in conducting business outside the United States.
Our international presence includes operations in Europe, the Middle East, Africa, Asia-Pacific, Latin America and Canada. We are subject to certain risks inherent in conducting business outside the United States.
They contribute to our success and are instrumental in driving operational execution and our ability to deliver strong financial performance, advancing innovation and maintaining a strong quality and compliance program across our organization.
They contribute to our success and are instrumental in driving operational execution and our ability to deliver on our stated goals and commitments, advance innovation and maintain a strong quality and compliance program across our organization.
We use recruitment vehicles to attract talent to our organization and we prioritize learning opportunities that foster a growth mindset. Our formal offerings include a tuition reimbursement program, an e-learning platform known as BaxU and virtual workshops that support our culture, strategy and the development of crucial skills.
Our formal offerings include a tuition reimbursement program, an e-learning platform known as BaxU and virtual workshops that support our culture, strategy and the development of crucial skills.
We have purchasing agreements with several of the major GPOs in the United States, which are subject to renewal from time to time. GPOs may have agreements with more than one supplier for certain products.
We have purchasing agreements with several of the major GPOs in the United States, which are subject to renewal from time to time. We are subject to certain risks inherent in contracting with GPOs and IDNs.
Business Segments and Products We currently manage our global operations based on three reportable segments: Medical Products & Therapies, Healthcare Systems & Technologies and Pharmaceuticals. The Medical Products & Therapies segment includes sales of our sterile IV solutions, infusion systems, administration sets, parenteral nutrition therapies and surgical hemostat, sealant and adhesion prevention products.
The Medical Products & Therapies segment includes sales of our sterile IV solutions, infusion systems, administration sets, parenteral nutrition therapies and surgical hemostat, sealant and adhesion prevention products.
In the third quarter of 2023, we completed the implementation of a new operating model intended to simplify and streamline our operations and better align our manufacturing and supply chain to our commercial activities. Under this operating model, our business is currently comprised of three reportable segments: Medical Products & Therapies, Healthcare Systems & Technologies, and Pharmaceuticals.
Implementation of New Operating Model In the third quarter of 2023, we completed the implementation of a new operating model intended to simplify and streamline our operations and better align our manufacturing and supply chain to our commercial activities.
We paid down $3.65 billion of net debt during 2024 and through February 21, 2025 using proceeds from the sales of our BPS and Kidney Care businesses, and we are committed to retaining our investment grade rating, including taking actions toward achieving a net leverage target of approximately 3.0x by the end of 2025 through ongoing debt repayment and financing activities.
We paid down $3.81 billion of legacy indebtedness in 2025 (which repayment does not include $2.0 billion of indebtedness repaid with proceeds from a new notes offering), primarily using proceeds from the sales of our Kidney Care business, and we are committed to retaining our investment grade rating, including taking actions toward achieving a net leverage target of approximately 3.0x by the end of 2026 through ongoing debt repayment and financing activities.
Innovation Our innovation strategy, which encompasses both organic and inorganic initiatives, is focused on accelerating our sales growth through the introduction of new connected care and core therapy offerings.
We are focused on improving performance and driving a culture of continuous improvement across the enterprise. Innovation Our innovation strategy, which encompasses both organic and inorganic initiatives over the longer term, is focused on accelerating our sales growth through the introduction of new customer centric connected care and core therapy offerings.
We operate in an industry susceptible to significant patent litigation. At any given time, we are involved as either a plaintiff or defendant in a number of patent infringement and other intellectual property-related actions. Such litigation can result in significant royalty or other payments or result in injunctions that can prevent the sale of products.
Risk Factors of this Annual Report on Form 10-K. We operate in an industry susceptible to significant patent litigation. At any given time, we are involved as either a plaintiff or defendant in a number of patent infringement and other intellectual property-related actions.
We believe these changes will allow us to be a more integrated and nimble organization that can respond more effectively to operational challenges and changes in the macroeconomic environment while enhancing our ability to drive innovation in our product portfolio. We also continue to focus on increasing efficiencies through automation and digitization.
These changes put us on a path to become a more integrated and nimble organization that should be able to respond more effectively to operational challenges and changes in the macroeconomic environment while enhancing our ability to drive innovation in, and continued optimization of our product portfolio.
Administered and analyzed by an independent third-party, the survey results are reviewed by our senior leaders, which include our executive officers. Summaries of select surveys are also provided to our Board of Directors. The results of this engagement survey are also shared with individual managers, who are then tasked with taking action based on their employees’ anonymous feedback.
Administered and analyzed by an independent third-party, the survey results are reviewed by our senior leaders, which include our executive officers. Summaries of select surveys are also provided to the Compensation and Human Capital Committee of our Board of Directors.
As discussed above in under "Recent Strategic Actions," in the third quarter of 2023, we implemented a new operating model intended to simplify and streamline our operations, including with respect to our R&D activities. We are also working to create a more resilient supply chain and better align our manufacturing footprint and supply chain to our commercial activities.
As discussed above in under "Recent Strategic Actions," we are working to create a more resilient supply chain and better align our manufacturing footprint and supply chain to our commercial activities. These activities may result in the consolidation of one or more R&D facilities.
Intellectual Property Patents and other proprietary rights are essential to our business. We rely on patents, trademarks, copyrights, trade secrets, know-how and confidentiality agreements to develop, maintain and strengthen our competitive position. We own numerous patents and trademarks throughout the world and have entered into license arrangements relating to various third-party patents and technologies.
Risk Factors of this Annual Report on Form 10-K. Intellectual Property Patents and other proprietary rights are essential to our business. We rely on patents, trademarks, copyrights, trade secrets, know-how and confidentiality agreements to develop, maintain and strengthen our competitive position.
We completed the last of these strategic actions on January 31, 2025 in connection with the sale of our Kidney Care business. Sale of Kidney Care Business On August 12, 2024, we entered into an Equity Purchase Agreement (EPA) with certain affiliates of Carlyle Group Inc. (Carlyle) to sell our Kidney Care business.
Sale of Kidney Care Business On August 12, 2024, we entered into an Equity Purchase Agreement (EPA) with certain affiliates of Carlyle Group Inc. (Carlyle) to sell our Kidney Care business. That business, which is now known as Vantive Health LLC (Vantive) is comprised of our former Kidney Care segment.
Accordingly, our Kidney Care business is reported in discontinued operations in the accompanying consolidated financial systems, and our prior period results have been adjusted to reflect discontinued operations presentation.
The financial position, results of operations and cash flows of our Kidney Care business, including our gain from the sale of that business and the related cash proceeds received, are reported as discontinued operations in the accompanying consolidated financial statements, and our prior period results have been adjusted to reflect discontinued operations.
For more information on patent and other litigation, see Note 8 in Item 8 of this Annual Report on Form 10-K. Research and Development 5 We believe our investment in research and development (R&D), consistent with our portfolio optimization and capital allocation strategies, will help fuel our future growth and our ability to remain competitive.
Research and Development We believe our investment in research and development (R&D), consistent with our portfolio optimization and capital allocation strategies, will help fuel our future growth and our ability to remain competitive. Accordingly, we continue to focus our investment on select R&D programs to enhance future growth through clinical differentiation.
Sales are made and products are distributed on a direct basis or through independent distributors or sales agents in more than 100 countries as of December 31, 2024, giving effect to the sale of our Kidney Care business.
Sales are made and products are distributed on a direct basis or through independent distributors or sales agents in more than 100 countries as of December 31, 2025. International Operations A significant portion of our revenues are generated outside of the United States and thoughtful optimization of the markets in which we operate remains a key component of our strategy.
As used in this report, “Baxter International” means Baxter International Inc. and “we", "our” or "us" means Baxter International and its consolidated subsidiaries, unless the context otherwise requires. Recent Strategic Actions In mid-2022, our Board of Directors authorized a strategic review of our business portfolio, with the goal of increasing stockholder value.
As used in this report, “we", "our” or "us" means Baxter International Inc. and its consolidated subsidiaries, unless the context otherwise requires. Recent Strategic Actions Since January 2023, we have completed several strategic actions, as discussed below.
Our segment reporting was changed during the third quarter of 2023 to align with our new operating model, and all periods presented are under the new operating model. 1 Sale of BPS Business On September 29, 2023, we completed the sale of our BioPharma Solutions (BPS) business and received cash proceeds of $3.96 billion from that transaction.
Under this operating model, our business is currently comprised of three reportable segments: Medical Products & Therapies, Healthcare Systems & Technologies, and Pharmaceuticals. Sale of BPS Business On September 29, 2023, we completed the sale of our BioPharma Solutions (BPS) business and received cash proceeds of $3.96 billion from that transaction.
Health and safety are firmly rooted across our global footprint. We aim for a zero-harm workplace and prioritize the elimination of risks and incident precursors to drive improvement. In 2024, Baxter focused on employee engagement, hazard identification and accelerated technology deployment to better understand and address top health and safety risk areas.
We aim for a zero-harm workplace and prioritize the elimination of risks and incident precursors to drive improvement. In 2025, Baxter continued to focus on employee engagement and, hazard identification and further prioritized safety controls implementation for high hazard work activities.
These comprise a mix of entirely new product offerings and meaningful improvements to existing technologies. Portfolio Optimization Our strategy also involves active portfolio management in the interest of maximizing value for Baxter stockholders and best positioning Baxter for long-term success.
We are working to accelerate the pace at which we bring these advances to market to support our future growth. Portfolio Optimization Our strategy also involves active portfolio management in the interest of maximizing value for Baxter stockholders and best positioning Baxter for long-term success, consistent with our profitability objectives.
Accordingly, we continue to focus our investment on select R&D programs to enhance future growth through clinical differentiation. Expenditures for our R&D activities were $590 million in 2024, $518 million in 2023, and $450 million in 2022.
Expenditures for our R&D activities were $518 million in 2025, $590 million in 2024, and $518 million in 2023.
We maintain certain details about our processes, products and technology as trade secrets and generally require employees, consultants, and business partners to enter into confidentiality agreements. These agreements may be breached and we may not have adequate remedies for any breach. In addition, our trade secrets may otherwise become known or be independently discovered by competitors.
We maintain certain details about our processes, products and technology as trade secrets and generally require employees, consultants, and business partners to enter into confidentiality agreements. Our policy is to protect our products and technology through patents and trademarks on a worldwide basis.
Removed
As part of that review process, we identified and evaluated a range of potential strategic actions, including opportunities for sales and other separation transactions. In January 2023, following the completion of that review, we announced a number of planned strategic actions, as discussed below, which are intended to enhance our operational effectiveness, accelerate innovation and drive additional stockholder value.
Added
As of December 31, 2025, we repaid $3.81 billion of legacy indebtedness in 2025 (which repayment does not include $2.00 billion of indebtedness repaid with proceeds from a new notes offering) primarily with the net after-tax proceeds from the sale of our Kidney Care business.
Removed
That business, which is now known as Vantive Health LLC (Vantive) is comprised of our former Kidney Care segment and provides chronic and acute dialysis therapies and services, including peritoneal dialysis, hemodialysis, continuous renal replacement therapies, and other organ support therapies.
Added
We regularly assess the strategic fit of businesses in our portfolio and the geographies in which we have operations. Portfolio changes may also result from channel expansion or market development activities.
Removed
We determined that our Kidney Care business met the criteria to be classified as held-for-sale in August 2024, and we also concluded that it met the conditions to be reported as a discontinued operation at that time.
Added
In July 2025, Andrew Hider was appointed as our President and Chief Executive Officer and we continue work to streamline the organization through the elimination of managerial layers that are intended to simplify our organization, accelerate innovation, bring us closer to our customers and improve performance. 2 Operational Excellence We also continue to focus on increasing efficiencies through increased automation and digitization (including through our thoughtful exploration of artificial intelligence initiatives).
Removed
Implementation of New Operating Model and Resulting Segment Change Our reportable segments were previously comprised of the following geographic segments related to our legacy Baxter business: Americas (North and South America), EMEA (Europe, Middle East and Africa) and APAC (Asia Pacific), and a global segment for the Hill-Rom Holdings, Inc. (Hillrom) business we acquired in December 2021.
Added
Beginning in October 2025, we launched Baxter Growth and Performance system, our high performance business system grounded in continuous improvement and management by objectives.
Removed
Business Strategy Our business strategy is focused on driving sustainable growth and innovation aligned with our mission to save and sustain lives and our vision to transform healthcare with a customer focus to help improve patient outcomes, enhance workflow efficiency, and enable cost-effective care.
Added
For more information on these risks, see the information under the captions “ Risks Relating to Our Operations Business—Segments of our business are significantly dependent on major contracts with GPOs, IDNs, and certain other distributors and purchasers” in Item 1A. Risk Factors of this Annual Report on Form 10-K.
Removed
We are working to accelerate the pace at which we bring these advances to market to support our future growth. We are in the midst of launching (or have recently launched) several new products, geographic expansions and line extensions in areas such as smart pump technology, hospital pharmaceuticals and nutritionals, surgical sealants, smart beds, respiratory vests and more.
Added
We also seek to develop new and alternative sources of supply where beneficial to our overall raw materials procurement strategy.
Removed
The recent Kidney Care sale has given us enhanced flexibility to deploy (or in some cases redeploy) capital toward opportunities that seek to accelerate our growth objectives, 2 whether as a result of innovation or expanding our portfolio geographically or as a result of channel expansion or market development activities.
Added
Refer to “Risks Relating to Our Business and Financial Performance – We have experienced disruptions in our supply chain” and “Risks Relating to Our Operations – We may be unable to obtain sufficient components or raw materials on a timely basis or for a cost-effective price” in Item 1A.
Removed
We also intend to reinstate share repurchases over the longer term.
Added
We also benefit from efficiencies and cost advantages resulting from shared manufacturing facilities and the technological advantages of our products.
Removed
Accordingly, in these cases, we face competition from other suppliers even where a customer is a member of a GPO under contract with us, which may constrain our ability to secure negotiated price increases. Purchasing power is similarly consolidated in many other countries.
Added
For further discussion, refer to “Risks Relating to our Business and Financial Performance – Continued consolidation in the health care industry or additional governmental controls exerted over pricing and access in key markets could lead to increased demands for price concessions or limit or eliminate our ability to sell to certain of our significant market segments” and “Risks Relating to Legal and Regulatory Matters – If reimbursement or other payment for our current or future products is reduced or modified in the U.S. or in foreign countries, including through the implementation or repeal of government-sponsored healthcare reform or other similar actions, cost containment measures, or there are changes to policies with respect to pricing, taxation, or rebates, our business could suffer.” in Item 1A.
Removed
For example, public contracting authorities often act as the purchasing entities for the hospitals and other customers of medical products in their region and many hospitals and other customers have joined joint procurement entities and buying consortia. The result is that demand for healthcare products is increasingly concentrated across our markets globally.
Added
We 4 own numerous patents and trademarks throughout the world and have entered into license arrangements relating to various third-party patents and technologies. Products manufactured by us are sold primarily under our own trademarks and trade names.
Removed
Additionally, our contractual pricing arrangements with GPOs, IDNs and public contracting authorities can sometimes limit our ability to increase prices in order to offset raw materials or component price increases or otherwise. Some of these agreements contain failure to supply clauses with varying remedies, inclusive of limited termination rights.

… 19 more changes not shown on this page.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

183 edited+61 added−101 removed76 unchanged
Biggest changeRisks Relating to Our Strategic Actions • We are exposed to risks as a result of our strategic actions, including the recent sale of our Kidney Care business. • We may continue to experience difficulties with our ongoing integration of Hillrom or fail to realize the anticipated benefits of the Hillrom acquisition. • If our business strategy and development activities are unsuccessful, our business, results of operations, financial condition and cash flows could be adversely affected. 8 Risks Relating to Our Financial Performance and Our Common Stock • Global economic conditions, including inflation and supply chain disruptions, have adversely affected, and could continue to adversely affect, our operations. • Our operating results and financial condition have fluctuated and may in the future continue to fluctuate. • We may not achieve our financial goals. • Our common stock price has fluctuated significantly and may continue to do so. • Our significant indebtedness requires us to use a substantial amount of our cash flow for debt service and could constrain our flexibility in responding to unanticipated or adverse business conditions and adversely affect our business, results of operations, financial condition and cash flows. • Changes in foreign currency exchange rates and interest rates have had, and may in the future have, an adverse effect on our results of operations, financial condition, cash flows and liquidity. • Future material impairments in the value of our goodwill, intangible assets and other long-lived assets, would negatively affect our operating results. • We cannot guarantee that in the future we will not further reduce the amount of dividends we pay.
Biggest changeRisks Relating to Our Business and Financial Performance • We are exposed to risks as a result of our strategic actions. • We may not achieve the anticipated benefits of our significant transactions, including the sale of our Kidney Care business and our acquisition of Hillrom. • Our significant indebtedness requires us to use a substantial amount of our cash flow for debt service and constrains our ability to pursue growth strategies and advance our R&D capabilities. • There is substantial competition in the product markets in which we operate and the risk of declining demand and pricing pressures could adversely affect our business, results of operations, financial condition and cash flows. • We may be unable to successfully introduce or monetize new and existing products or services or keep pace with changing consumer preferences and needs or advances in technology. • We may not achieve our financial goals. • We have experienced disruptions in our supply chain. • Global economic conditions, including inflation, have adversely affected, and could continue to adversely affect, our operations. • We may not be successful in achieving expected operating efficiencies and sustaining or improving operating expense reductions. • Continued consolidation in the health care industry or additional governmental controls exerted over pricing and access in key markets could lead to increased demands for price concessions or limit or eliminate our ability to sell to certain of our significant market segments. • Our operating results and financial condition have fluctuated and may in the future continue to fluctuate. • Management transition creates uncertainties, and we may experience difficulties in managing such transitions, including attracting and retaining key employees. • Changes in foreign currency exchange rates and interest rates have had, and may in the future have, an adverse effect on our results of operations, financial condition, cash flows, and liquidity. • Future material impairments in the value of our goodwill, intangible assets, and other long-lived assets would negatively affect our operating results.
Our participation in these agreements often requires increased discounting or restrictions on our ability to raise prices, and failure to participate or to be awarded these agreements might result in a reduction of sales to the member hospitals.
Our participation in these agreements often requires increased discounting or restrictions on our ability to raise prices, and failure to participate in or to be awarded these agreements might result in a reduction of sales to the member hospitals.
Significant increases in the cost of raw materials, sub-assemblies or materials used in the production of our products that cannot be recovered through increased prices of our products (or the unavailability of those raw materials, sub-assemblies or production materials) have adversely affected our business, results of operations, financial condition and cash flows and may continue to do so in the future.
Significant increases in the cost of raw materials, sub-assemblies, or materials used in the production of our products that cannot be recovered through increased prices of our products (or the unavailability of those raw materials, sub-assemblies, or materials) have adversely affected our business, results of operations, financial condition, and cash flows and may continue to do so in the future.
Further, the impacts of climate change, particularly severe weather events and droughts, may have negatively impacted, and may in the future negatively impact, our ability to obtain material energy and water sources and other resources, including employee availability and access to shipping routes.
Further, the impacts of climate change, particularly severe weather events and droughts, have negatively impacted, and may in the future negatively impact, our ability to obtain material energy and water sources and other resources, including employee availability and access to shipping routes.
The laws and regulations discussed above are broad in scope and subject to evolving interpretations and changes, which may be violated unknowingly, could require us to incur substantial costs regarding compliance or to alter our sales and marketing practices and may subject us to enforcement actions or litigation, and of which could adversely affect our business, results of operations, financial condition and cash flows.
The laws and regulations discussed above are broad in scope and subject to evolving interpretations and changes, which may be violated unknowingly, could require us to incur substantial costs regarding compliance or to alter our sales and marketing practices, and may subject us to enforcement actions or litigation, and which could adversely affect our business, results of operations, financial condition, and cash flows.
Additionally, our ongoing integration of Hillrom and the recent sale of our Kidney Care business, as well as a number of our employees having fully remote or hybrid work arrangements expose us to, among other things, heightened risks related to our information technology systems and networks, including cyber attacks, computer viruses, malicious software, security breaches and telecommunication failures, both for systems and networks we control directly and for those that employees and third-party developers rely on to work remotely.
Additionally, our ongoing integration of Hillrom and the sale of our Kidney Care business, as well as a number of our employees having fully remote or hybrid work arrangements expose us to, among other things, heightened risks related to our information technology systems and networks, including cyber attacks, computer viruses, malicious software, security breaches and telecommunication failures, both for systems and networks we control directly and for those that employees and third-party developers rely on to work remotely.
Failure of a third-party supplier to provide compliant raw materials, component parts or supplies, give us adequate notice of issues or help us secure all required regulatory approvals for the use of their products or services has resulted in delays, service interruptions and quality-related issues, and may do so again in the future, and may negatively impact our business results and results of operations.
Failure of a third-party supplier to provide compliant raw materials, component parts, or supplies, give us adequate notice of issues, or help us secure all required regulatory 17 approvals for the use of their products or services has resulted in delays, service interruptions, and quality-related issues, and may do so again in the future, and may negatively impact our business results and results of operations.
If such steps triggered retaliation in other markets, such as by restricting access to foreign products by their government-owned healthcare systems, the outcomes could have an adverse effect on our business, results of operations, financial condition and cash flows. A portion of our workforce is unionized, and we could face labor disruptions that would interfere with our operations.
If such steps triggered retaliation in other markets, such as by restricting access to foreign products by their government-owned healthcare systems, the outcomes could have an adverse effect on our business, results of operations, financial condition and cash flows. 19 A portion of our workforce is unionized, and we could face labor disruptions that would interfere with our operations.
Our Amended and Restated Bylaws (Bylaws) provide that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery in the State of Delaware (or, if no state court located in the State of Delaware has jurisdiction, the federal district court for the District of Delaware) is the sole and exclusive forum, to the fullest extent permitted by law, to bring (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim for or based on a breach of a fiduciary duty owed by any current or former director or officer or other employee of the company to the company or our stockholders, (iii) any action asserting a claim arising pursuant to any provision of the Delaware General Corporation Law or our Certificate of Incorporation or these Bylaws, as either may be amended from time to time, or (iv) any action to interpret, apply, enforce or determine the validity of the Certificate of Incorporation or Bylaws or (v) any other action asserting a claim governed by the internal affairs doctrine or that is otherwise an “internal corporate claim” as defined in Section 115 of the Delaware General Corporation Law.
Our Amended and Restated Bylaws (Bylaws) provide that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery in the State of Delaware (or, if no state court located in the State of Delaware has jurisdiction, the federal district court for the District of Delaware) is the sole and exclusive forum, to the fullest extent permitted by law, to bring (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim for or based on a breach of a fiduciary duty owed by any current or former director or officer or other employee of the company to the company or our stockholders, (iii) any action asserting a claim arising pursuant to any provision of the Delaware General Corporation Law or our Amended and Restated Certificate of Incorporation (Certificate of Incorporation) or our Bylaws, as either may be amended from time to time, (iv) any 26 action to interpret, apply, enforce, or determine the validity of the Certificate of Incorporation or Bylaws, or (v) any other action asserting a claim governed by the internal affairs doctrine or that is otherwise an “internal corporate claim” as defined in Section 115 of the Delaware General Corporation Law.
Current or worsening economic conditions may impact the ability of our customers (including governments) to pay for our products and services and the amount spent on healthcare generally, which could result in decreased demand for our products and services, a decline in cash flows, longer sales cycles, increased inventory levels, slower adoption of new technologies and increased price competition.
Further, current or worsening economic conditions may impact the ability of our customers (including governments) to pay for our products and services and the amount spent on healthcare generally, which could result in decreased demand for our products and services, a decline in cash flows, longer sales cycles, increased inventory levels, slower adoption of new technologies, and increased price competition.
We cannot predict with certainty what laws, regulations and healthcare initiatives, if any, will be implemented, or what the ultimate effect of healthcare reform or any future legislation or regulation will have on us. For more information related to ongoing government investigations, see Note 8 in Item 8 of this Annual Report on Form 10-K.
We cannot predict with certainty what laws, regulations, and healthcare initiatives, if any, will be implemented, or what the ultimate effect of healthcare reform or any future legislation or regulation will have on us. For more information related to ongoing government investigations, see Note 7 in Item 8 of this Annual Report on Form 10-K.
Failure to meet market demand may result in customers transitioning to available competitive products, loss of market share, negative publicity, reputational damage, loss of customer confidence or other negative consequences (including a decline in stock price). 15 Our success also depends on our ability to maintain and routinely improve product quality and our quality management program.
Failure to meet market demand may result in customers transitioning to available competitive products, loss of market share, negative publicity, reputational damage, loss of customer confidence, or other negative consequences (including a decline in stock price). Our success also depends on our ability to maintain and routinely improve product quality and our quality management program.
Future material impairments in the value of our goodwill, intangible assets and other long-lived assets would negatively affect our operating results. We regularly review our goodwill, intangible assets and property, plant and equipment for potential impairment. Goodwill and indefinite-lived intangible assets are subject to impairment reviews on an annual basis or whenever potential impairment indicators are present.
Future material impairments in the value of our goodwill, intangible assets, and other long-lived assets would negatively affect our operating results. We regularly review our goodwill, intangible assets, and property, plant and equipment for potential impairment. Goodwill and indefinite-lived intangible assets are subject to impairment reviews on an annual basis or whenever 14 potential impairment indicators are present.
If any of these providers were to encounter delivery performance issues such as loss, damage or destruction of any systems or machines, it would be costly to replace such systems or machines in a 19 timely manner and such occurrences may damage our reputation and lead to decreased demand for our products and increased cost and expense to our business.
If any of these providers were to encounter delivery performance issues, such as loss, damage, or destruction of any systems or machines, it would be costly to replace such systems or machines in a timely manner and such occurrences may damage our reputation and lead to decreased demand for our products and increased cost and expense to our business.
Such supply chain issues could also prevent us from satisfying obligations under one or more of our customer contracts or arrangements, which could result in significant failure to supply penalties, which in some instances include contract termination rights or may prevent us from participating in future tenders.
Such supply chain issues could also prevent us from satisfying obligations under one or more of our customer contracts or arrangements, which could result in significant failure to supply penalties, which in some instances include limited contract termination rights or may prevent us from participating in future tenders.
For example, our medical devices that are sold or distributed in the EU have to comply with the EU Medical Device Regulation that entered into force in May 2021. This Medical Device Regulation currently provides a staggered phase-in period for manufacturers to comply with related regulations through December 2028.
For example, our medical devices that are sold or distributed in the EU have to comply with the EU Medical Device Regulation that entered into force in May 2021. The EU Medical Device Regulation currently provides a staggered phase-in period for manufacturers to comply with related regulations through December 2028.
The laws and standards governing the 25 promotion, pricing, sale and reimbursement of our products and those governing our relationships with healthcare providers and governments, including the Physician Payments Sunshine Act, are complicated, subject to frequent change and may be violated unknowingly.
The laws and standards governing the promotion, pricing, sale, and reimbursement of our products and those governing our relationships with healthcare providers and governments, including the Physician Payments Sunshine Act, are complicated, subject to frequent change, and may be violated unknowingly.
Our employees, consultants, parties to collaboration agreements and other business partners are generally subject to confidentiality or similar agreements to protect our confidential and proprietary information. These agreements 28 may be breached, and we may not have adequate remedies for any breach.
Our employees, consultants, parties to collaboration agreements and other business partners are generally subject to confidentiality or similar agreements to protect our confidential and proprietary information. These agreements may be breached, and we may not have adequate remedies for any breach.
These and other events or disruptions of manufacturing or sterilization processes that we or third parties may experience, whether due to a lack of capacity, environmental, regulatory or compliance issues (including evolving regulatory requirements), catastrophic events or otherwise, have resulted in, and could in the future result in, product shortage, unanticipated costs, loss of revenues, operational restrictions, additional capital expenditure requirements, litigation and damage to our reputation, all of which could have a material adverse effect on our business, results of operations, financial condition and cash flows.
These and other events or disruptions of manufacturing or sterilization processes that we or third parties may experience, whether due to a lack of capacity, environmental, regulatory or compliance issues (including evolving regulatory requirements), catastrophic events or otherwise, have resulted in, and could in the future result in, product shortage, unanticipated costs, loss of revenues, operational restrictions, additional capital expenditure requirements, litigation, and damage to our reputation, all of which could have a significant adverse effect on our business, results of operations, financial condition, and cash flows.
We continue to evaluate and refine both our short-term and long-term financial objectives, including our stated commitment to achieve certain net leverage targets and to fully offset the stranded costs related to the recent sale of our Kidney Care business.
We continue to evaluate and refine both our short- and long-term financial objectives, including our stated commitment to achieve certain net leverage targets and to fully offset the stranded costs related to the sale of our Kidney Care business.
We may not be able to successfully develop, integrate or deploy AI or ML technologies in our products and services, or we may face delays, increased costs or technical difficulties in doing so.
We may not be able to successfully develop, integrate or deploy AI technologies in our products and services, or we may face delays, increased costs or technical difficulties in doing so.
Failure to successfully introduce new products or services in a cost-effective manner, or delays in customer purchasing decisions related to the evaluation of new products or services, could cause us to lose market share and could materially adversely affect our business. Furthermore, product development requires substantial investment and there is inherent risk in the R&D process.
Failure to successfully introduce new products or services in a cost-effective manner, or delays in customer purchasing decisions related to the evaluation of new products or services, could cause us to lose market share and could significantly adversely affect our business. Furthermore, product development requires substantial investment and there is inherent risk in the R&D process.
Foreign governments are also focused on examining medical product and pharmaceutical companies’ sales and marketing activities and relationships with healthcare providers and competitive practices generally.
Foreign governments 22 are also focused on examining medical product and pharmaceutical companies’ sales and marketing activities, relationships with healthcare providers, and competitive practices generally.
As a result, we believe that period-to-period comparisons of our results of operations are not necessarily meaningful, nor should they be relied upon as an indication of future performance. Our operating results and financial condition are also subject to fluctuation from all of the risks described throughout this section.
As a result, we believe that period-to-period comparisons of our results of operations are not necessarily meaningful, nor should they be relied upon as an indication of future performance. Our operating results and financial condition are also subject to fluctuation from all of the risks described throughout this “Risk Factor” section.
In addition, a substantial portion of our revenues is dependent on federal healthcare program reimbursement, and any disruptions in federal government operations, including a federal government shutdown or failure of the U.S. government to enact annual appropriations, could have a material adverse effect on our business, results of operations, financial condition and cash flows.
In addition, a substantial portion of our revenues is dependent on federal healthcare program reimbursement, and any disruptions in federal government operations, including a federal government shutdown or failure of the U.S. government to enact annual appropriations, could have a significant adverse effect on our business, results of operations, financial condition, and cash flows.
Such expenses have been significant, and may continue to grow. In addition, the anticipated benefits of the sale are based on a number of assumptions, some of which may prove incorrect, and we cannot predict with certainty when the expected benefits will occur, or the extent to which they will be achieved.
Such expenses have been significant. In addition, the anticipated benefits of the sale are based on a number of assumptions, some of which may prove incorrect, and we cannot predict with certainty when the expected benefits will occur, or the extent to which they will be achieved.
As a result, even with the completed sale of the Kidney Care business, we may not achieve some or all of the anticipated strategic, financial, operational or other benefits in the expected timeframe, or at all, which could adversely impact our business, results of operations, financial condition and cash flows.
As a result, even with the completed sale of the Kidney Care business, we may not achieve all of the anticipated strategic, financial, operational or other benefits in the expected timeframe, which could adversely impact our business, results of operations, financial condition and cash flows.
Our facilities must be registered, approved and/or licensed prior to production and remain subject to inspection from time to time 24 thereafter.
Our facilities must be registered, approved, and/or licensed prior to production and remain subject to inspection from time to time thereafter.
These developments, or the perception that they could occur, may have a material adverse effect on global economic conditions and the stability of global financial markets, and may significantly reduce global trade and, in particular, trade between the impacted countries.
These developments, or the perception that they could occur, may have a significant adverse effect on global economic conditions and the stability of global financial markets, and may significantly reduce global trade and, in particular, trade between the impacted countries.
See “Risks Relating to Legal and Regulatory Matters.” An inability to address a quality or safety issue in an effective and timely manner may also cause negative publicity, potentially leading to a loss of customer confidence in us or our current or future products, which may result in the loss of sales and difficulty in successfully launching new products.
See “Risks Relating to Legal and Regulatory Matters.” An inability to address a quality or safety issue in an effective and timely manner has caused, and may in the future cause, negative publicity, potentially leading to a loss of customer confidence in us or our current or future products, which may result in the loss of sales and difficulty in successfully launching new products.
Compliance with these and similar laws (or failure to comply with these laws) could have a material adverse effect on our business, results of operations, financial condition and cash flows.
Compliance with these and similar laws (or failure to comply with these laws) could have a significant adverse effect on our business, results of operations, financial condition, and cash flows.
Further, we expect that the breadth and complexity of our information and technology systems and infrastructure will increase as we expand our product offerings to utilize and generate data analytics and potentially artificial intelligence (AI) (which create emerging enterprise risks, including cybersecurity, monitoring, and oversight).
Further, we expect that the breadth and complexity of our information and technology systems and infrastructure will increase as we work to expand our product offerings to utilize and generate data analytics and potentially AI (which create emerging enterprise risks, including cybersecurity, monitoring, and oversight).
Furthermore, governments have chosen (as in the case of the Chinese government) or may choose to prioritize anti-corruption efforts in the healthcare sector as part of their law enforcement activities. We are also subject to environmental laws, which are becoming more stringent throughout the world.
Furthermore, governments have chosen or may choose to prioritize anti-corruption efforts in the healthcare sector as part of their law enforcement activities. We are also subject to environmental laws, which are becoming more stringent throughout the world.
Because we operate in multiple income tax jurisdictions both inside and outside the United States, cross border transactions among our affiliates are a significant part of the manner in which we operate. Tax authorities may disagree with our intra-company charges, cross-jurisdictional transfer pricing or other matters, and may assess additional taxes as a result.
Because we operate in multiple income tax jurisdictions both inside and outside the U.S., cross border transactions among our affiliates are a significant part of the manner in which we operate. Tax authorities may disagree with our intra-company charges, cross-jurisdictional transfer pricing or other matters, and may assess additional taxes as a result.
See “Risks Relating to Legal and Regulatory Matters – If we are unable to protect or enforce our patents or other proprietary rights, or if we become subject to claims or litigation alleging infringement of the patents or other proprietary rights of others, our competitiveness and business prospects may be materially damaged.” Warranty claims and service costs relating to our new products might be greater than anticipated, and we might be required to devote significant resources to address any quality issues associated with our new products, which could reduce the resources available for further new product development and other matters.
See “Risks Relating to Legal and Regulatory Matters – If we are unable to protect or enforce our patents or other proprietary rights, or if we become subject to claims or litigation alleging infringement of the patents or other proprietary rights of others, our competitiveness and business prospects may be materially damaged.” Warranty claims and service costs relating to certain of our new products have been, and might in the future be, greater than anticipated, and we might be required to devote significant resources to address any quality issues associated with our new products, which could reduce the resources available for future new product development.
Loss or damage to, or closure of, a manufacturing facility or storage site due to a natural disaster, such as we experienced as a result of Hurricane Helene, war, acts of terrorism or otherwise has adversely affected, and could in the future adversely affect, our ability to manufacture sufficient quantities of key products or deliver products to meet customer demand or contractual requirements, which has resulted, and may in the future result, in a loss of revenue and other adverse business consequences, including those identified in the paragraphs above.
Loss or damage to, or closure of, a manufacturing facility or storage site due to a natural disaster (such as we experienced at our North Cove facility as a result of Hurricane Helene), war, acts of terrorism, pandemics (including COVID 19) or otherwise has adversely affected, and could in the future adversely affect, our ability to manufacture sufficient quantities of key products or deliver products to meet customer demand or contractual requirements, which has resulted, and may in the future result, in a loss of revenue and other adverse business consequences, including those identified in the paragraphs above.
Any of these outcomes may, in turn, result in customers transitioning to available competitive products, loss of market share, negative publicity, reputational damage, loss of customer confidence or other negative consequences, such as a decline in stock price.
Any of these outcomes could result in customers transitioning to available competitive products, loss of market share, negative publicity, reputational damage, loss of customer confidence, or other negative consequences, such as a decline in stock price.
Additionally, our Bylaws provide that unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States shall be the sole and exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act of 1933, as amended.
Additionally, our Bylaws provide that unless we consent in writing to the selection of an alternative forum, the federal district courts of the U.S. shall be the sole and exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act of 1933, as amended.
We face substantial competition in all of our markets from international and domestic healthcare medical products and pharmaceutical companies and providers of all sizes, and these competitors often differ across our businesses. Competition is primarily focused on cost-effectiveness, price, service, product performance and technological innovation.
We face substantial competition in all of our markets from international and domestic healthcare medical products and pharmaceutical companies and providers of all sizes, and these competitors often differ across our businesses. Competition is primarily focused on cost-effectiveness, price, service, product performance, technological innovation, clinical practices, and consistency of supply.
The manufacture of our products requires, among other things, the timely supply or delivery of sufficient amounts of quality components and raw materials. We manufacture our products in approximately 40 principal manufacturing locations. We acquire our components, raw materials and other requirements for manufacturing from many suppliers and vendors in various countries, including sometimes from ourselves for self-supplied requirements.
The manufacture of our products requires, among other things, the timely supply or delivery of sufficient amounts of quality components and raw materials. We acquire our components, raw materials, and other requirements for manufacturing from many suppliers and vendors in various countries, including sometimes from ourselves for self-supplied requirements.
Our Technology is vulnerable to breakdown, interruption, cyber and other security attacks, system malfunction, unauthorized access, inadvertent exposure or disclosure of information, theft and other events and requires at times requires the manual application of security upgrades or patches on each machine or device that utilizes the Technology.
Our IT systems and Technology are vulnerable to breakdown, interruption, cyber and other security attacks, system malfunction, unauthorized access, inadvertent exposure or disclosure of information, theft, and other events and, at times, requires the manual application of security upgrades or patches on each machine or device that utilizes the Technology.
If reimbursement or other payment for our current or future products is reduced or modified in the United States or in foreign countries, including through the implementation or repeal of government-sponsored healthcare reform or other similar actions, cost containment measures, or there are changes to policies with respect to pricing, taxation or rebates, our business could suffer.
If reimbursement or other payment for our current or future products is reduced or modified in the U.S. or in foreign countries, including through the implementation or repeal of government-sponsored healthcare 23 reform or other similar actions, cost containment measures, or there are changes to policies with respect to pricing, taxation, or rebates, our business could suffer.
If any of the events described below occurs, our business, results of operations, financial condition, cash flows, future growth prospects and stock price could suffer. Further, other unknown or unpredictable factors could also have material adverse effects on our future results.
If any of the events described below occurs, our business, results of operations, financial condition, cash flows, future growth prospects, reputation or stock price could suffer. Further, other unknown or unpredictable factors could also have significant adverse effects on our future results.
Failure to be awarded or to maintain certain of these agreements could have a material adverse effect on our business, including product sales and service and rental revenue.
Failure to be awarded or to maintain certain of these agreements could have a significant adverse effect on our business, including lost product sales and service and rental revenue.
The continuing evolution of technology we use, including cloud-based computing and data hosting as well as AI, and reliance on third parties and Software as a Service solutions, whom may also use cloud-based computing and data hosting or AI tools, create additional opportunities for the unintentional, intentional, unauthorized or unlawful disclosure, exposure, dissemination, loss, alteration, access or destruction of Protected Information stored or processed in our devices, systems, servers, infrastructure and products (collectively, Technology).
The continuing evolution of technology we use, including cloud-based computing, open-source software, data hosting, AI, and reliance on third parties and Software as a Service (Saas) solutions, whom may also use open-source software, cloud-based computing, data hosting, or AI tools, create additional opportunities for the unintentional, intentional, unauthorized or unlawful disclosure, exposure, dissemination, loss, alteration, access or destruction of Protected Information stored or processed in our devices, systems, servers, infrastructure, and products (collectively, Technology), and those of our Saas providers and third party service providers.
Sales of our products depend, in part, on the extent to which the costs of our products are paid by both public and private payers. These payers include Medicare, Medicaid, private healthcare insurers in the United States and foreign governments and third-party payers outside the United States.
Sales of our products depend, in part, on the extent to which the costs of our products are paid by both public and private payers. These payers include Medicare, Medicaid, private healthcare insurers in the U.S. and foreign governments and third-party payers outside the U.S.
We are required to comply with increasingly complex and changing legal and regulatory requirements and frameworks in the United States and in other countries that govern not only the 26 collection, use, storage, security, transfer, disclosure and other processing of protected health information and personal and sensitive data, but also the development and use of AI, the sharing of certain data and timely disclosure of cybersecurity incidents.
We are required to comply with increasingly complex and changing legal and regulatory requirements and frameworks in the U.S. and in other countries that govern not only the collection, use, storage, security, transfer, disclosure and other processing of protected health information and personal and sensitive data, but also the development and use of AI, the sharing of certain data, and timely disclosure of 24 cybersecurity incidents.
Responding to these CR considerations and implementation of our CR goals and initiatives involves risks and uncertainties, requires investments (some of which still need to be funded or identified), and depends in part on our relative performance (or perceived performance) against third-parties that is beyond our control.
Responding to these sustainability and corporate responsibility considerations and implementation of our related goals and initiatives involves risks and uncertainties, requires investments (some of which still need to be funded or identified), and depends in part on our relative performance (or perceived performance) against third-parties that is beyond our control.
Additionally, organizations that provide information to investors on corporate governance and related matters have developed ratings processes for evaluating companies on their respective approaches to CR matters, which are increasingly being employed by investors, lenders, and customers to inform their investment, financing, or purchasing decisions.
Additionally, organizations that provide information to investors on corporate governance and related matters have developed ratings processes for evaluating companies on their respective approaches to sustainability and corporate responsibility matters, which are employed by investors, lenders, and customers to inform their investment, financing, or purchasing decisions.
We regularly assess the likely outcomes of these audits in order to determine the appropriateness of our tax provision. However, we may not accurately predict the outcome of these audits and, as a result, the actual outcome of these audits may have an adverse impact on our financial results.
With respect to audits by the applicable tax authorities, we regularly assess the likely outcomes of these audits in order to determine the appropriateness of our tax provision. However, we may not accurately predict the outcome of these audits and, as a result, the actual outcome of these audits may have an adverse impact on our financial results.
Further, such benefits might be realized later than expected, and the ongoing costs of implementing these measures might be greater than anticipated. If these measures are not successful or sustainable, we might undertake additional realignment and cost reduction efforts, which could result in future charges.
Further, such benefits might be realized later than expected, and the ongoing costs of implementing these measures might be greater than anticipated. If these measures are not successful or sustainable, we might undertake additional actions, which could result in future charges.
Volatility in the demand for our products or our costs of energy, transportation, freight, raw materials and component parts and other supply, manufacturing, distribution and warehousing or storage costs have adversely affected, and could in the future adversely affect, our business, results of operations, financial condition and cash flows and have prevented, and may continue to prevent, suppliers from providing goods and services to us on reasonable terms or at all.
See “Risks Relating to Legal and Regulatory Matters.” In addition, volatility in the demand for our products or our costs of energy, transportation, freight, raw materials and component parts, and other supply, manufacturing, distribution and warehousing, or storage costs have adversely affected, and could in the future adversely affect, our business, results of operations, financial condition, and cash flows and have prevented, and may continue to prevent, suppliers from providing goods and services to us on reasonable terms or at all.
Department of Commerce administer laws and regulations that restrict U.S. persons and, in some instances, non- U.S. persons, in conducting activities, transacting business or making investments in certain countries or regions, or with governments, entities and individuals subject to U.S. economic sanctions.
Department of Commerce, Bureau of Industry and Security) administers laws and regulations that restrict U.S. persons and, in some instances, non- U.S. persons, in conducting activities, transacting business or making investments in certain countries or regions, or with governments, entities and individuals subject to U.S. economic sanctions.
The failure of our suppliers to comply with applicable regulations could also adversely affect segments of our business as regulatory actions taken by FDA or other regulatory authorities against those manufacturers, or actions we are required to take to comply with regulatory requirements with respect to services and goods furnished by our suppliers, can result in product shortages, recalls or modifications.
The failure of our suppliers to comply with applicable regulations have also adversely affected certain segments of our business (and could do so in the future) as regulatory actions taken by FDA or other regulatory authorities against those manufacturers, or actions we are required to take to comply with regulatory requirements with respect to services and goods furnished by our suppliers, can result in product shortages, recalls, or modifications.
In addition, our customers’ use of third parties to service or repair our products has caused, and may in the future cause, quality or safety issues, including due to such third parties’ lack of knowledge of or training on our products.
New or unintended uses of our products may also raise quality or safety issues. In addition, our customers’ use of third parties to service or repair our products has caused, and may in the future cause, quality or safety issues, including due to such third parties’ lack of knowledge of or training on our products.
In the United States, we are subject to the Health Insurance Portability and Accountability Act, as amended (HIPAA), the Health Information Technology for Economic and Clinical Health Act and the California Consumer Privacy Act (the CCPA) and California Privacy Rights Act as well as other new and emerging state laws.
In the U.S., for example, we are subject to the Health Insurance Portability and Accountability Act, as amended (HIPAA), the Health Information Technology for Economic and Clinical Health Act and the California Consumer Privacy Act (the CCPA) and California Privacy Rights Act as well as other new and emerging state laws.
For example, we will continue to incur the costs of providing transition services, products and product components to Vantive under the agreements described above and other stranded costs that we will no longer be able to share with the Kidney Care business and which we may not be able to fully offset.
For example, we will continue to incur the costs of providing transition services, products and product components to Vantive under the relevant agreements (including the TSA and the MSA) and other stranded costs that we will no longer be able to share with the Kidney Care business and which we may not be able to fully offset.
There can be no assurance that the marketplace will support higher prices or that such prices and productivity gains will fully offset any commodity cost increases in the future. From time to time, we enter into fixed price supply contracts with respect to raw material purchases.
There can be no assurance that the marketplace will support higher prices or that any related price increase will fully offset any commodity cost increases in the future. From time to time, we enter into fixed price supply contracts with respect to raw material purchases.
For example, we routinely rely on technology systems and infrastructure in the collection, use, storage and transfer, disclosure and other processing of voluminous amounts of protected information, including personal data, protected health information, and sensitive data (of patients, employees, customers and third parties) as well as confidential, business, financial, and other sensitive information (collectively, Protected Information).
We also routinely rely on technology systems and infrastructure in the collection, use, storage and transfer, disclosure, and other processing of voluminous amounts of protected information, including personal data, protected health information, and sensitive data (of patients, employees, customers, and third parties) as well as internal confidential information (collectively, Protected Information).
Some of our employees both in and outside of the United States work under collective bargaining agreements or national trade union agreements or are subject to works councils.
Some of our employees both in and outside of the U.S. work under collective bargaining agreements or national trade union agreements or are subject to works councils.
As a participant in the healthcare industry, our operations and products, and those of our customers, are regulated by numerous government agencies, both inside and outside the United States.
As a participant in the healthcare industry, our operations and products, and those of our customers, are regulated by numerous government agencies, both inside and outside the U.S.
This is due to the complex nature of manufacturing devices and pharmaceuticals, including biologics, as well as the strict regulatory regime governing our manufacturing operations. Variations in the manufacturing process may result in production failures, which could lead to launch delays, product shortage, unanticipated costs, lost revenues and damage to our reputation.
Many of our products are difficult to manufacture due to the complex nature of manufacturing devices and pharmaceuticals, including biologics, as well as the strict regulatory regime governing our manufacturing operations. Variations in the manufacturing process may result in production failures, which could lead to launch delays, product shortage, unanticipated costs, lost revenues, and damage to our reputation.
In addition, in recent years, select market participants have shown an increased focus on individual GPO members negotiating directly with manufacturers on committed contracts. IDNs and health systems, when negotiating directly with manufacturers, often request additional discounts or other enhancements.
In addition, in recent years, select market participants have shown an increased focus on individual GPO members negotiating directly with manufacturers on committed contracts. IDNs and health systems, when negotiating directly with manufacturers, often request additional discounts or other enhancements, such as most-favored-nation clauses.
Alternatively, if a court were to find the exclusive choice of forum provision contained in our Bylaws to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions. Item 1B. Unresolved Staff Comments. None.
Alternatively, if a court were to find the exclusive choice of forum provision contained in our Bylaws to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions.
We also may have more difficulty protecting or enforcing our data and intellectual property rights as a result of these technologies, and there may be a risk of infringing on the intellectual property rights of others which could lead to litigation, arbitration or other disputes over the ownership, validity, scope or enforcement of our or others’ patents, trademarks, copyrights, trade secrets or other proprietary rights related to AI and ML technologies.
We also may have more difficulty protecting or enforcing our regulated personal data, confidential data, and intellectual property rights as a result of these technologies, and there may be a risk of data leakage or infringing on the intellectual property or data rights of others which could lead to regulatory action, or litigation, arbitration or other disputes over the ownership, validity, scope or enforcement of our or others’ patents, trademarks, copyrights, trade secrets or other proprietary rights.
Our common stock may not match some holders’ investment strategies or meet minimum criteria for inclusion in stock market indices or portfolios, causing certain investors to sell their shares, which could in turn lead to declines in the trading price of such stock.
Our common stock may not match some holders’ investment strategies or meet minimum criteria for inclusion in stock market indices or portfolios, causing certain investors to sell their shares, which could in turn lead to declines in the trading price of such stock. Item 1B. Unresolved Staff Comments. None. 27
Our operations are subject to risks inherent in conducting business globally and under the laws, regulations and customs of various jurisdictions and geographies.
We are subject to risks associated with doing business globally. Our operations are subject to risks inherent in conducting business globally and under the laws, regulations and customs of various jurisdictions and geographies.
Various penalties exist for non-compliance with the laws implementing the European Medical Device Regulations which, if incurred, could have a material adverse impact on portions of our business, results of operations, financial condition and cash flows.
Various penalties exist for non-compliance with the EU Medical Device Regulation which, if incurred, could have a material adverse impact on portions of our business, results of operations, financial condition, and cash flows.
In addition, we have faced and continue to face challenges related to increasing costs associated with these agreements (associated with ongoing supply chain challenges and inflation), which have negatively impacted our revenues and may continue to do so in the future.
In addition, we have faced and continue to face challenges related to increasing costs associated with these agreements (including as a result of supply chain challenges and inflation), which have negatively impacted our revenues and may continue to do so in the future.
These regulations require companies that wish to manufacture and distribute medical devices in EU member states to meet certain quality system and safety requirements and ongoing product monitoring responsibilities and obtain a “CE” marking (i.e., a mandatory conformity marking for certain products sold within the European Economic Area) for their products.
The regulation also requires companies that wish to manufacture and distribute medical devices in EU member states to meet certain quality system and safety 21 requirements and ongoing product monitoring responsibilities and obtain a “CE” marking (i.e., a mandatory conformity marking for certain products sold within the European Economic Area (EEA)) for their products.
Events, such as changes to our expectations, strategy or forecasts (including as a result of evolving global macroeconomic conditions, updated expectations regarding the timing of new regulatory approvals or the impact or timing of our cost savings initiatives) or even a relatively small revenue shortfall or increase in supply chain or other costs which we are unable to offset have, and may in the future, cause financial results for a period to be below our expectations or projections.
Events, such as changes to our expectations, strategy or forecasts (including as a result of evolving global macroeconomic conditions or regulatory developments) or even a relatively small revenue shortfall or increase in supply chain or other costs which we are unable to offset, have, and may in the future, cause financial results for a period to be below our expectations or projections.
Such impacts, such as damage to manufacturing facilities (including as a result of Hurricane Helene), local infrastructure and utilities have disrupted, and may in the future disrupt, our supply chain and manufacturing operations by adversely affecting our ability to procure goods or services required for the operation of our business at the quantities and levels we require due to impairment of the availability and increases in the cost of certain products, materials, commodities and energy.
Impacts of climate change have included and may in the future include, damage to manufacturing facilities (including as a result of Hurricane Helene), disruption to local infrastructure and utilities, loss of sales, and interruption to our supply chain and manufacturing operations by adversely affecting our ability to procure goods or services required for the operation of our business at the quantities and levels we require due to impairment of the availability and increases in the cost of certain products, materials, commodities, and energy.
To the extent that our employees, consultants, parties to collaboration agreements and other business partners use intellectual property owned by others in their work for us, disputes may arise as to the rights in related or resulting know-how and inventions.
To the extent that our employees, consultants, parties to collaboration agreements and other business partners use intellectual property owned by others in their work for us, disputes may arise as to the rights in related or resulting know-how and inventions. We may incur additional tax expense or become subject to additional tax liabilities.
We are party to a number of pending lawsuits, settlement discussions, mediations, arbitrations and other disputes, some of which are set forth in Note 8 in Item 8 of this Annual Report on Form 10-K.
We are party to a number of pending lawsuits and other disputes which may adversely impact us. We are party to a number of pending lawsuits, unfiled claims, settlement discussions, mediations, arbitrations and other disputes, some of which are set forth in Note 7 in Item 8 of this Annual Report on Form 10-K.
A failure to identify and address manufacturing problems prior to the release of products to our customers may also result in a quality or safety issue of the type discussed in the “Risk Factors” section.
A failure to identify and address manufacturing problems prior to the release of products to our customers has resulted in, and in the future may result in, quality or safety issues of the type discussed in the “Risk Factors” section.
Governmental bodies are increasingly imposing AI related regulation as well as cyber incident disclosure regulations with differing criteria for what incidents must be reported as well as the timelines in which to report them.
Governmental authorities are also increasingly imposing cyber incident disclosure regulations with differing criteria for what incidents must be reported as well as the timelines in which to report them.
The ultimate impact of any tariffs and any retaliatory counter measures will depend on various factors, including if any tariffs are ultimately implemented, the timing of implementation, and the amount, scope and nature of the tariffs.
The ultimate impact of any tariffs and any retaliatory counter measures will depend on various factors, including if any tariffs are ultimately implemented, the timing of implementation, the amount, scope and nature of the tariffs, and the applicability of such tariffs to Baxter’s product portfolio.
The unavailability or inadequacy of third-party insurance coverage for current or future liability claims could increase our potential exposure to unanticipated claims and adverse decisions. Protracted litigation and other disputes, including any adverse outcomes, may have an adverse 29 impact on our business, results of operations, financial condition and cash flows.
Should third-party insurance coverage for current or future liability claims be unavailable or inadequate, it could increase our potential exposure to adverse decisions. Protracted litigation and other disputes, including any adverse outcomes, may have an adverse impact on our business, results of operations, financial condition, and cash flows.
Quality management plays an essential role in meeting customer requirements, preventing defects, improving our products and services and assuring the safety and efficacy of our products. While we have a quality system that covers the lifecycle of our products, quality and safety issues have occurred, and may in the future occur, with respect to our products.
Quality management plays an essential role in helping to meet customer requirements, prevent defects, improve our products and services, and assure the safety and efficacy of our products. While we have a quality system that covers the lifecycle of our products, quality and safety issues have occurred, and may in the future occur, with respect to our products.
Further, difficulties in, or the inability to, refinance our indebtedness, or to do so upon attractive terms, could materially and adversely affect our business, prospects, results of operations, financial condition and cash flows, and make us vulnerable to adverse industry and general economic conditions.
Further, difficulties in, or the inability to, refinance our indebtedness, or to do so upon attractive terms, could materially and adversely affect our business, prospects, results of operations, financial condition and cash flows.

… 265 more changes not shown on this page.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

17 edited+1 added−3 removed7 unchanged
Biggest changeThe Board oversees information technology functions generally, including product related cybersecurity matters (which had previously been subject to the oversight of the QRC Committee). The Audit Committee is responsible for the oversight of certain significant cybersecurity incidents, including ones related to our products and services and receives related updates from management on those incidents.
Biggest changeThe Audit Committee of the Board is responsible for the oversight of certain significant cybersecurity incidents, including ones related to our products and services, and, in the event of a significant cybersecurity incident, receives related updates from management on those incidents.
These defenses include 30 the ongoing monitoring of our systems (including with the assistance of third-party vendors), conducting response and recovery exercises with employees and senior management (including our executive officers) to promote awareness of related matters and improve internal processes, and engaging with external cybersecurity rating agencies that assess our cyber risk.
These defenses include the ongoing monitoring of our systems (including with the assistance of third-party vendors), conducting response and recovery exercises with employees and senior management (including our executive officers) to promote awareness of related matters and improve internal processes, and engaging with external cybersecurity rating agencies that assess our cyber risk.
Consistent with this oversight responsibility, the Audit Committee is responsible for reviewing proposed disclosures in connection with any material cybersecurity incident consistent with our disclosure obligations under Item 1.05 of Form 8-K.
Consistent with this oversight responsibility, the Audit Committee is responsible for reviewing proposed disclosures in connection with any material cybersecurity incident consistent with our disclosure 28 obligations under Item 1.05 of Form 8-K.
Our cross functional cybersecurity compliance committee, which is led by the CISO, is composed of members of senior management, including the CIO, and reviews matters such as cybersecurity escalations, critical remediations and disclosure recommendations.
Our cross functional cybersecurity compliance committee is led by the CISO, is composed of members of senior management, including the CIO, and reviews matters such as cybersecurity escalations, critical remediations, and disclosure recommendations.
Our current CIO has over 30 years of experience in information technology and has served in a number of professional services leadership roles, including as CIO over the past 15 years at three companies.
Our CIO has over 30 years of experience in information technology and has served in a number of professional services leadership roles, including as CIO over the past 15 years at three companies.
Additionally, the CISO, in partnership with a third-party consultant, facilitates periodic cyber-crisis tabletop exercises with members of senior management (including our executive officers) to help us prepare for the occurrence of a significant cybersecurity event and our related response activities. Cybersecurity risks and threats, including any previous cybersecurity incidents, have not materially impacted us or our operations to date.
Additionally, we, in partnership with a third-party consultant, facilitate periodic cyber-crisis tabletop exercises with members of senior management (including our executive officers) to help us prepare for the occurrence of a significant cybersecurity event and our related response activities. Cybersecurity risks and threats, including any previous cybersecurity incidents, have not materially impacted us or our operations to date.
As part of this program, all employees with a Baxter email address receive annual training on the recognition and prevention of cybersecurity threats as well as training on how to report suspicious activity or potential breaches through the appropriate channels.
As part of this program, all stakeholders (including Baxter employees and contractors) with a Baxter email address receive annual training on the recognition and prevention of cybersecurity threats as well as training on how to report suspicious activity or potential breaches through the appropriate channels.
Risk Factors of this Annual Report on Form 10-K for a discussion of cybersecurity-related risks. 31
Risk Factors of this Annual Report on Form 10-K for a discussion of cybersecurity-related risks. 29
The Cybersecurity Program maintains a cybersecurity governance and oversight framework that seeks to drive accountability for all levels of employees, including senior management and executive officers. Cybersecurity matters are generally managed by a combination of working groups that report to the cybersecurity compliance committee and ultimately the cybersecurity executive oversight committee, as appropriate.
The Cybersecurity Program and the CISO's organization maintain a cybersecurity governance and oversight framework that seeks to drive accountability for all levels of employees, including senior management and executive officers. Cybersecurity matters are generally managed by a combination of working groups, the cybersecurity compliance committee and ultimately the cybersecurity executive oversight committee, as appropriate.
The full Board receives periodic updates on information technology and cybersecurity matters from company management (including the CIO and CISO) and external advisors from time to time and the Audit Committee receives periodic updates (including as part of continuing director education) on the evolving cybersecurity landscape and regulatory reporting requirements.
The full Board receives periodic updates on information technology and cybersecurity matters from management (including the CIO and CISO) and external advisors from time to time, and the Audit Committee receives periodic updates (including as part of continuing director education) on the evolving cybersecurity and artificial intelligence landscapes and regulatory reporting requirements.
In addition, from time to time, we also utilize external auditors and assessors to help evaluate our Cybersecurity Program, including conducting penetration testing and vulnerability, risk and maturity assessments.
In addition, from time to time, we also utilize external auditors, assessors, and pen-testers to help evaluate the maturity of our Cybersecurity Program, including conducting penetration testing and vulnerability, risk, and maturity assessments.
In addition, to help promote privacy and security awareness throughout the company, the CISO maintains a Cyber Awareness and Engagement Program.
In addition, to help promote privacy and security awareness throughout the company, the CISO's organization maintains a Cyber Awareness and Engagement Program.
The CISO maintains and annually updates a Cybersecurity Incident Response Plan which is a guide for our Cyber Security Incident Response Team and business to respond to cybersecurity incidents in a coordinated manner.
We maintain and annually update a Cybersecurity Incident Response Plan, which is a guide for our Cyber Security Incident Response Team and business to respond to cybersecurity incidents in a coordinated manner.
The output from the cybersecurity compliance committee meetings is discussed at meetings of Baxter’s cybersecurity executive oversight committee, which is led by the CISO and includes the CIO and other members of management.
The output from the cybersecurity compliance committee meetings is discussed at meetings of Baxter’s cybersecurity executive oversight committee, which is also led by the CISO's organization and includes the CEO, other members of the CEO's executive management including the CIO, Chief Financial Officer and General Counsel.
The Cybersecurity Program is currently overseen by the Board of Directors (Board) and is managed by a dedicated Chief Information Security Officer (CISO), who in turn reports to the Chief Information Officer (CIO), who currently reports to the CEO.
The Cybersecurity Program is currently overseen by the Board of Directors (Board) and is managed by our Chief Information Officer (CIO), who is currently serving as our interim Chief Information Security Officer (CISO) while we complete the search for a permanent CISO.
The CISO's organization has oversight responsibilities for cybersecurity strategy, policy, standards, architecture and processes for the security of our corporate and manufacturing enterprise network, information assets and medical device technologies.
The CISO's organization is responsible for cybersecurity strategy, policy, standards, risk-management architectures, and processes for the security of our corporate and manufacturing enterprise network, information assets and medical device technologies. Additionally, this organization provides governance and guidance related to secure-by-design principles and secure development practices for medical technologies.
However, we cannot provide any assurance that we will not be subject to a material cybersecurity incident in the future.
However, we cannot provide any assurance that we will not be subject to a material cybersecurity incident in the future. See "Risks Relating to Our Operations—We may experience breaches and breakdowns affecting our information technology systems or protected information, including from obsolescence, cyber security breaches and data leakage” in Item 1A.
Removed
Our current CISO has over 20 years of experience in cybersecurity and risk and technology management, and has held numerous positions in the cybersecurity sector, including serving as Global Cyber Risk Officer at another Fortune 500 medical products and equipment company and CISO at other healthcare companies and health care delivery organizations.
Added
The Board oversees information technology functions generally, including product related cybersecurity matters as well as our use of artificial intelligence (whether internally or in our products and services).
Removed
In February 2024, we amended the charters of the Audit Committee and Quality and Regulatory Compliance (QRC) Committee of our Board to provide for the realignment of oversight over the company’s innovation strategy and cybersecurity to the full Board, as these responsibilities now sit within the vertically integrated segments and are part of the business strategies themselves.
Removed
See "Risks Relating to Our Operations—Breaches and breakdowns affecting our information technology systems or protected information, including from cyber security breaches and data leakage, could have a material adverse effect on our business, results of operations, financial condition, cash flows, reputation and competitive position” in Item 1A.

Item 2. Properties

Properties — owned and leased real estate

4 edited+0 added−1 removed3 unchanged
Biggest changeIn the United States and Puerto Rico, there are five shared distribution facilities with the principal facilities located in Memphis, Tennessee; Cataño, Puerto Rico; and North Cove, North Carolina.
Biggest changeIn the United States and Puerto Rico, there are three shared distribution facilities with the principal facilities located in Byhalia, Mississippi; North Cove, North Carolina; and Cataño, Puerto Rico. Internationally, we have approximately 10 shared distribution facilities located in Australia, Belgium, Canada, Germany, Mexico, New Zealand, Spain, and Sweden.
Paul, Minnesota Leased Skaneateles Falls, New York Owned Suzhou, China Leased Taicang, China Leased Pluvigner, France Owned Saalfeld, Germany Owned Tijuana, Mexico Leased Monterrey, Mexico Owned Luleå, Sweden Owned Pharmaceuticals Guayama, Puerto Rico Owned Round Lake, Illinois Owned Ahmedabad, India Owned (1) Includes both owned and leased facilities We also own or operate shared distribution facilities throughout the world.
Paul, Minnesota Leased Skaneateles Falls, New York Owned Taicang, China Leased Pluvigner, France Owned Saalfeld, Germany Owned Tijuana, Mexico Leased Monterrey, Mexico Owned Luleå, Sweden Owned Pharmaceuticals Guayama, Puerto Rico Owned Round Lake, Illinois Owned Ahmedabad, India Owned (1) Includes both owned and leased facilities We also own or operate shared distribution facilities throughout the world.
Paul, Minnesota Leased Irvine, California Owned Toongabbie, Australia Owned Lessines, Belgium Owned Marsa, Malta Leased Sabinanigo, Spain Owned San Vittore, Switzerland Leased Thetford, United Kingdom Owned Tel Aviv, Israel Leased Elstree, United Kingdom Leased Shanghai, China Owned Mountain Home, Arkansas Owned/Leased (1) Healthcare Systems & Technologies Batesville, Indiana Owned Charleston, South Carolina Leased Milwaukee, Wisconsin Owned St.
Paul, Minnesota Leased Irvine, California Owned Toongabbie, Australia Owned Lessines, Belgium Owned Marsa, Malta Leased Sabinanigo, Spain Owned San Vittore, Switzerland Leased Thetford, United Kingdom Owned Tel Aviv, Israel Leased Elstree, United Kingdom Leased Shanghai, China Owned Mountain Home, Arkansas Owned/Leased (1) Healthcare Systems & Technologies Batesville, Indiana Owned Charleston, South Carolina Leased St.
Incorporated by reference to Note 8 in Item 8 of this Annual Report on Form 10-K.
Incorporated by reference to Note 7 in Item 8 of this Annual Report on Form 10-K.
Removed
Internationally, we have more than 75 shared distribution facilities located in Australia, Austria, Belgium, Brazil, Canada, Chile, China, Colombia, Costa Rica, the Czech Republic, Ecuador, France, Germany, Greece, Hong Kong, India, Ireland, Israel, Italy, Japan, Korea, Mexico, New Zealand, Panama, Poland, Portugal, Russia, South Africa, Spain, Sweden, Switzerland, Taiwan, Thailand, Turkey, the United Arab Emirates, and the United Kingdom.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

8 edited+4 added−14 removed2 unchanged
Biggest changeRosenbloom is a member of the Board of the Digestive Health Foundation, which supports research at Northwestern Digestive Health Center, which is part of Northwestern Medicine at Northwestern Memorial Hospital. Alok Sonig , age 52, is Executive Vice President and Group President, Pharmaceuticals. He was appointed to his role in 2023 after serving as President since 2022. Mr.
Biggest changeRosenbloom is a member of the advisory counsel of the Digestive Health Institute. Maria Cecilia Soriano , age 54, is Group President, Infusion Therapies & Technologies & Pharmaceuticals. Ms. Soriano was appointed to her current role in 2025 after serving as President, Infusion Therapies & Technologies since 2023. Prior to joining Baxter, Ms.
Rasul began his professional career with Toyota Motor Corporation and ultimately held multiple leadership positions in strategy, product development and operations. David S. Rosenbloom , age 65, is Executive Vice President and General Counsel. Mr.
Rasul began his professional career with Toyota Motor Corporation and ultimately held multiple leadership positions in strategy, product development, and operations. David S. Rosenbloom , age 66, is Executive Vice President and General Counsel. Mr.
Rosenbloom joined Baxter from McDermott Will & Emery (McDermott), where he served as a partner for 24 years and Global Head of the Litigation Practice Group from 2017 to 2022. Prior to McDermott, he served for eight years in the U.S. Attorney’s Office for the Northern District of Illinois. Mr.
Rosenbloom joined Baxter from McDermott Will & Schultz, formerly known as McDermott Will & Emery (McDermott), where he served as a partner for 24 years and Global Head of the Litigation Practice Group from 2017 to 2022. Prior to McDermott, he served for eight years in the U.S. Attorney’s Office for the Northern District of Illinois. Mr.
He most recently served as Sysco’s Executive Vice President, Corporate Development from 2020 to 2023. His previous roles at Sysco included Executive Vice President and Chief Financial Officer from 2015 to 2020, Senior Vice President of Finance and Chief Accounting Officer, and Senior Vice President of foodservice operations.
His previous roles at Sysco included Executive Vice President and Chief Financial Officer from 2015 to 2020, Senior Vice President of Finance and Chief Accounting Officer, and Senior Vice President of foodservice operations.
Item 4. Mine Safety Disclosures. Not Applicable. Information about our Executive Officers As of February 21, 2025, the following serve as Baxter’s executive officers: Brent Shafer , age 67, is Chair and Interim Chief Executive Officer. He was appointed to his role on February 3, 2025, in connection with Mr. José Almeida's separation from Baxter.
Item 4. Mine Safety Disclosures. Not Applicable. Information about our Executive Officers As of February 12, 2026, the following serve as Baxter’s executive officers: Andrew Hider , age 49, is President and Chief Executive Officer and a member of the Board of Directors of Baxter. He was appointed on August 19, 2025.
Grade joined Baxter in 2023 as Executive Vice President, Chief Financial Officer. Additionally, he was elected as our interim Chief Accounting Officer and Principal Accounting Officer (CAO) in September 2024 and will cease serving in that interim capacity as of February 21, 2025. Mr. Grade joined Baxter following a 25-year career with Sysco Corporation (Sysco), the world’s global foodservice leader.
Grade also served as our Interim Chief Accounting Officer and Principal Accounting Officer from September 2024 through February 2025. Mr. Grade joined Baxter following a 25-year career with Sysco Corporation (Sysco). He most recently served as Sysco’s Executive Vice President, Corporate Development from 2020 to 2023.
He currently serves as a member of Northwestern University-Kellogg School of Business Financial Network Advisory Board and the Dean’s External Advisory Board of the University of Wisconsin School of Business. Heather Knight, age 53, is Executive Vice President, Chief Operating Officer and Interim Group President, Medical Products & Therapies. She was appointed to her role on February 3, 2025. Ms.
He currently serves as a member of Northwestern University-Kellogg School of Business Financial Network Advisory Board and the Dean’s External Advisory Board of the University of Wisconsin School of Business. Reazur Rasul , age 49, is Executive Vice President and Group President, Healthcare Systems & Technologies.
Sonig is currently a member of the Advisory Boards for the American University, Kogod School of Business, and Sentry Sciences, Inc., and is a member of the Board of the Southern Asian Pharmaceutical Council. All executive officers hold office until the next annual election of officers or until their respective successors are elected and qualified. 33 PART II
Soriano currently serves as a member of the board of directors of ScionHealth. All executive officers hold office until their respective successors are elected and qualified or until their earlier death, resignation or removal. 31 PART II
Removed
He is the former Chair and Chief Executive Officer of Cerner Corporation (Cerner), a leading provider of various health information technologies, ranging from medical devices to electronic health records to hardware, serving in this role from 2018 to 2021. Prior to Cerner, Mr.
Added
Additionally, he was appointed as our Interim Group President, Medical Products & Therapies, in October 2025 and served in that interim capacity until December 2025. Before joining Baxter, he served as Chief Executive Officer and a member of the board of directors of ATS Corporation, roles which he has held since March 2017 and May 2017, respectively. Previously, Mr.
Removed
Shafer held a number of roles at Philips, including Chief Executive Officer of Philips North America, a leader in diagnostic imaging, image-guided therapy, patient monitoring and health informatics, as well as in consumer health and home care. Mr. Shafer was also the Chief Executive Officer of Philips Home Healthcare Solution business. Before joining Philips, Mr.
Added
Hider served as President and Chief Executive Officer of the Taylor Made Group, LLC, from May 2016 to February 2017. Prior to that, Mr. Hider served for ten years at Danaher Corporation, working in roles of increasing responsibility, most recently serving as President of Veeder Root. Mr.
Removed
Shafer was Vice President and General Manager of Hillrom’s Patient Care Environment Division and worked at GE Medical Systems where he served in key positions in sales, marketing, and general management. Mr. Shafer has also held senior roles at Hewlett Packard’s Medical Products Group and Johnson & Johnson. Mr.
Added
Hider began his career with General Electric, serving in a number of areas including manufacturing, project management, procurement and finance. He currently serves on the board of directors of Tennant Company (NYSE: TNC). Joel T. Grade, age 55, is Executive Vice President, Chief Financial Officer, a role in which he has served in since joining Baxter in 2023. Mr.
Removed
Shafer currently serves as a director of Tactile Systems Technology, Inc. and Veracyte, Inc. James Borzi , age 62, is Executive Vice President and Chief Supply Chain Officer. He joined Baxter in August 2020 from GE Healthcare, where he served as Vice President, Chief Supply Chain Officer from 2019 to 2020.
Added
Soriano served in increasing roles of responsibility at Becton Dickinson and Company, including as Global Vice President, General Manager, Microbiology from 2020 to 2023; U.S. Vice President, General Manager, Diabetes Care; Senior Vice President, Global Marketing and Strategy; and Vice 30 President, Strategic Marketing. Previously, she worked at Johnson & Johnson, the Coca Cola Company and Citibank, N.A. Ms.
Removed
Prior to joining GE Healthcare, he served in various manufacturing operations leadership roles at Becton Dickinson, including Executive Vice President of Global Operations and Chief Supply Chain Officer from 2013 to 2019. Earlier in his career, he was Senior Vice President of Operations & Technology at Hydro Aluminum and Executive Vice President of Worldwide Operations at Lennox International.
Removed
Prior to that, he was the Chief Operating Officer at AEES Inc. and Senior Vice President of Americas Operations at Alcoa Corporation. Mr. Borzi is a senior advisor to the NAI Group, a Pritzker Private Capital company. Joel T. Grade, age 54, is Executive Vice President, Chief Financial Officer and Interim Chief Accounting Officer. Mr.
Removed
Knight has led our Medical Products & Therapies segment since 2023. From 2021 through 2023, she served as president of our former Americas region and our Acute Therapies, Clinical Nutrition, and Medication Delivery business units. She joined Baxter in 2019 as general manager, U.S. Hospital Products. Throughout her 30-year career in the healthcare industry, Ms.
Removed
Knight has held numerous roles of increasing leadership in general management, global upstream and commercial capacities at companies including Medtronic plc (Medtronic), Covidien plc, Tyco International plc and Kendall Healthcare 32 Products Company. Prior to joining Baxter, she most recently served as vice president and general manager in Medtronic's Surgical Innovations business. Ms.
Removed
Knight earned her bachelor's degree in Biological Sciences from the University of Buffalo and completed the Executive Sales and Management program from the University of Chicago Booth School of Management. Ms. Knight currently serves as a director of Waters Corporation. Jeanne K.
Removed
Mason , Ph.D., age 69, is Executive Vice President and Chief Human Resources Officer having served in that capacity since 2006. Ms. Mason joined Baxter in 2006 from GE Insurance Solutions, a primary insurance and reinsurance business, where she was responsible for global human resource functions. Ms.
Removed
Mason began her career with General Electric (GE) in 1988 after serving with the U.S. General Accounting Office in Washington, D.C. Her GE experience included leadership roles in Europe for GE Information Services and GE Capital Real Estate.
Removed
She is a member of the Board of Directors of Family Service of Lake County and is a member of the Executive Advisory Council for the Chicago Chapter of National Association of African Americans in Human Resources. Reazur Rasul , age 48, is Executive Vice President and Group President, Healthcare Systems & Technologies.
Removed
Sonig joined Baxter in 2022 from Lupin, Inc. (Lupin), where he served as U.S. CEO and Global Head of R&D and Biosimilars from 2018 to 2022. He brings more than 25 years of experience in the life sciences industry. Prior to Lupin, Mr. Sonig served as CEO of Developed Markets (U.S., Canada, Europe, and Japan) at Dr. Reddy’s Laboratories.
Removed
He also spent more than 15 years at Bristol Myers Squibb, where he held several positions of increasing responsibility in general management, global strategy and marketing. Mr.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

3 edited+0 added−0 removed1 unchanged
Biggest changeThe New York Stock Exchange is the principal market on which our common stock is traded under the symbol “BAX”. As of February 13, 2025, there were 18,094 holders of record of our common stock.
Biggest changeThe NYSE is the principal market on which our common stock is traded under the symbol “BAX”. As of February 5, 2026, there were 17,166 holders of record of our common stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Issuer Purchases of Equity Securities In July 2012, the Board of Directors authorized a share repurchase program and the related authorization was subsequently increased a number of times. During the fourth quarter of 2024, we did not repurchase any shares under this authority.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Issuer Purchases of Equity Securities In July 2012, the Board of Directors authorized a share repurchase program and the related authorization was subsequently increased a number of times. During the fourth quarter of 2025, we did not repurchase any shares under this authority.
The remaining authorization under this program totaled approximately $1.30 billion at December 31, 2024. This program does not have an expiration date. Market Information and Holders of our Common Stock Our common stock is listed on the New York and Chicago stock exchanges.
The remaining authorization under this program totaled approximately $1.30 billion at December 31, 2025. This program does not have an expiration date. Market Information and Holders of our Common Stock Our common stock is listed on the New York Stock Exchange (NYSE) and the NYSE Chicago stock exchanges.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

155 edited+64 added−151 removed65 unchanged
Biggest changeAdditional special items are identified because they are highly variable, difficult to predict and of a size that may substantially impact our reported results of operations for the period. 42 The following table provides a summary of our special items and the related impact by line item on our consolidated results of operations for 2024, 2023 and 2022. years ended December 31 (in millions) 2024 2023 2022 Gross Margin Intangible asset amortization expense $ (419) $ (383) $ (392) Long-lived asset impairments 1 — — (344) Business optimization items 2 (67) (27) (16) Product related items 3 (15) — (44) Acquisition and integration items 4 (1) (1) (170) European medical devices regulation 5 (33) (41) (42) Hurricane Helene costs 6 (110) — — Total Special Items $ (645) $ (452) $ (1,008) Impact on Gross Margin Ratio (6.0 pts) (4.3 pts) (10.0 pts) Selling, General and Administrative (SG&A) Expenses Intangible asset amortization expense $ 206 $ 207 $ 287 Business optimization items 2 65 137 174 Acquisition and integration items 4 22 18 82 Legal matters 7 17 15 — Total Special Items $ 310 $ 377 $ 543 Impact on SG&A Expense Ratio 2.9 pts 3.6 pts 5.4 pts R&D Expenses Business optimization items 2 $ 30 $ 10 $ 3 Long-lived asset impairments 1 50 — — Total Special Items $ 80 $ 10 $ 3 Impact on R&D Expense Ratio 0.7 pts 0.1 pts 0.1 pts Goodwill Impairments Goodwill impairments 8 $ 425 $ — $ 2,812 Total Special Items $ 425 $ — $ 2,812 Other Operating Expense (Income), Net Acquisition and integration items 4 $ — $ (19) $ (39) Legal matters 7 — (8) — Loss on product divestiture arrangement 9 — — 54 Loss on subsidiary liquidation 10 — — 21 Total Special Items $ — $ (27) $ 36 Other (Income) Expense, Net Pension curtailment 11 $ — $ — $ (11) Reclassification of cumulative translation loss to earnings 12 — — 65 Investment impairments 13 — 31 — Total Special Items $ — $ 31 $ 54 Income Tax Expense (Benefit) Tax matters 14 $ 80 $ 65 $ 25 Tax effects of special items 15 (248) (226) (375) Total Special Items $ (168) $ (161) $ (350) Impact on Effective Tax Rate (30.3) pts 4.7 pts (13.6) pts 1 Our results in 2024 included a long-lived asset impairment charge of $50 million to reduce the carrying amount of an IPR&D asset to its fair value.
Biggest changeAdditional special items are identified because they are highly variable, difficult to predict and of a size that may substantially impact our reported results of operations for the period. 38 The following table provides a summary of our special items from continuing operations and the related impact by line item on our consolidated results of continuing operations for 2025 and 2024. years ended December 31 (in millions) 2025 2024 Gross Margin Intangible asset amortization expense $ (396) $ (419) Indefinite-lived asset impairments 1 (290) — Business optimization items 2 (67) (67) Product related reserves 3 (113) (15) Acquisition and integration items 4 — (1) European medical devices regulation 5 (21) (33) Separation-related costs 6 (4) — Hurricane Helene cost 7 (133) (110) Legal matters 8 (11) — Total Special Items $ (1,035) $ (645) Impact on Gross Margin Ratio (9.2 pts) (6.0 pts) Selling, General and Administrative (SG&A) Expenses Intangible asset amortization expense $ 202 $ 206 Business optimization items 2 97 65 Acquisition and integration items 4 25 22 Separation-related costs 6 53 — Legal matters 8 — 17 Total Special Items $ 377 $ 310 Impact on SG&A Expense Ratio 3.4 pts 2.9 pts R&D Expenses Business optimization items 2 $ 14 $ 30 Separation-related costs 6 1 — Indefinite-lived asset impairments 1 — 50 Total Special Items $ 15 $ 80 Impact on R&D Expense Ratio 0.1 pts 0.7 pts Goodwill Impairments Goodwill impairments 9 $ 485 $ 425 Total Special Items $ 485 $ 425 Other Operating Expense (Income), Net Acquisition and integration items 4 $ 2 $ — Gain on sale of long-lived asset 10 (16) — Total Special Items $ (14) $ — Other (Income) Expense, Net Acquisition and integration items 4 $ 5 $ — Investment impairments 11 9 — Gain on debt extinguishment 12 (16) — Total Special Items $ (2) $ — Income Tax (Benefit) Expense Tax matters 13 $ 513 $ 80 Tax effects of special items 14 (342) (248) Total Special Items $ 171 $ (168) Impact on Effective Tax Rate (94.3 pts) (30.3 pts) 1 Our results in 2025 included an indefinite-lived asset impairment charge of $290 million to reduce the carrying amount of a trade name asset to its fair value.
In 2024, $45 million of the restructuring charges, consisting of employee termination costs, were related to initiatives to reduce our cost structure following the sale of our Kidney Care segment. In addition, $46 45 million of the restructuring charges were related to business optimization initiatives within our Healthcare Systems & Technologies segment.
In 2024, $45 million of the restructuring charges, consisting of employee termination costs, were related to initiatives to reduce our cost structure following the sale of our Kidney Care segment. In addition, $46 million of the restructuring charges were related to business optimization initiatives within our Healthcare Systems & Technologies segment.
As authorized by the Board of Directors, we repurchase our stock depending upon our cash flows, net debt levels and market conditions. In July 2012, the Board of Directors authorized a share repurchase program and the related authorization was subsequently increased a number of times.
As authorized by the Board of Directors, we repurchase our stock depending upon our cash flows, net debt levels and market conditions. In July 2012, our Board of Directors authorized a share repurchase program and the related authorization was subsequently increased a number of times.
The fair value of the Front Line Care reporting unit was determined based on a discounted cash flow model (an income approach) and earnings multiples (a market approach) based on the guideline public company method.
The fair value of the Front Line Care reporting unit was determined based on a discounted cash flow model (an income approach) and earnings multiples (a market approach) based on the guideline public company method.
Cash Flows from Financing Activities In 2024, cash used in financing activities included debt repayments of $2.66 billion, dividend payments of $590 million, partially offset by proceeds from borrowings on our delayed draw term loan of $1.83 billion, an increase in commercial paper borrowings of $296 million, and proceeds from stock issued under employee benefit plans of $71 million.
In 2024, cash used in financing activities included debt repayments of $2.66 billion, dividend payments of $590 million, partially offset by proceeds from borrowings on our delayed draw term loan of $1.83 billion, an increase in commercial paper borrowings of $296 million, and proceeds from stock issued under employee benefit plans of $71 million.
These regulations (as described in Item 1, Government Regulation, of this Annual Report on Form 10-K) require that we obtain specific approval from FDA or applicable non-U.S. regulatory authorities before we can market and sell most of our products in a particular country.
These regulations (as described in Item 1, Government Regulation, of this Annual Report on Form 10-K) require that we obtain specific approval from FDA or the applicable non-U.S. regulatory authorities before we can market and sell most of our products in a particular country.
In 2024, these restructuring and other business optimization costs included costs primarily related to initiatives to reduce our cost structure following the sale of our Kidney Care segment, initiatives within our Healthcare Systems & Technologies segment including the discontinuance of a product line and rationalization of certain other manufacturing and distribution facilities.
In 2024, these restructuring and other business optimization costs included costs primarily related to initiatives to reduce our cost structure following the sale of our former Kidney Care segment, initiatives within our Healthcare Systems & Technologies segment including the discontinuance of a product line and rationalization of certain other manufacturing and distribution facilities.
Risk Factors, and other filings with the SEC, all of which are available on our website. 62 Actual results may differ materially from those projected in the forward-looking statements, which are more fully discussed in Item 1A. Risk Factors and Item 7.
Risk Factors, and other filings with the SEC, all of which are available on our website. Actual results may differ materially from those projected in the forward-looking statements, which are more fully discussed in Item 1A. Risk Factors and Item 7.
Interest payments on debt and finance lease obligations are calculated for future periods using interest rates in effect at the end of 2024. Certain of these projected interest payments may differ in the future based on foreign currency fluctuations or other factors or events. The projected interest payments only pertain to obligations and agreements outstanding at December 31, 2024.
Interest payments on debt and finance lease obligations are calculated for future periods using interest rates in effect at the end of 2025. Certain of these projected interest payments may differ in the future based on foreign currency fluctuations or other factors or events. The projected interest payments only pertain to obligations and agreements outstanding at December 31, 2025.
Refer to Note 12 in Item 8 of this Annual Report on Form 10-K for additional information regarding our business optimization programs. Goodwill Impairments We assess goodwill and indefinite-lived intangible assets for impairment annually during the fourth quarter or whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable.
Refer to Note 11 in Item 8 of this Annual Report on Form 10-K for additional information regarding our business optimization programs. 41 Goodwill Impairments We assess goodwill and indefinite-lived intangible assets for impairment annually during the fourth quarter or whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable.
The reduction in value was primarily due to lower forecasted operating results and a lower terminal growth rate utilized in valuing this reporting unit which contributed to reduced expected future cash flows, as well as lower earnings multiples.
The reduction in value was primarily due to lower forecasted operating results, a higher discount rate and a lower terminal growth rate utilized in valuing this reporting unit which contributed to reduced expected future cash flows, as well as lower earnings multiples.
For a discussion of our significant off-balance sheet arrangements, refer to Note 3 and Note 8 in Item 8 of this Annual Report on Form 10-K for information regarding joint development and commercialization arrangements, indemnifications and legal contingencies.
For a discussion of our significant off-balance sheet arrangements, refer to Note 7 in Item 8 of this Annual Report on Form 10-K for information regarding joint development and commercialization arrangements, indemnifications and legal contingencies.
The primary components of other non-current liabilities in our consolidated balance sheet as of December 31, 2024 are pension and other postretirement benefits, deferred tax liabilities, long-term tax liabilities, and litigation and environmental reserves.
The primary components of other non-current liabilities in our consolidated balance sheet as of December 31, 2025 are pension and other postretirement benefits, deferred tax liabilities, long-term tax liabilities, and litigation and environmental reserves.
Refer to Note 16 in Item 8 of this Annual Report on Form 10-K for further information regarding our financial instruments and hedging strategies.
Refer to Note 15 in Item 8 of this Annual Report on Form 10-K for further information regarding our financial instruments and hedging strategies.
Failure to obtain or maintain those approvals or clearances (including temporary importation authorizations) could have a material adverse impact on our business (including with respect to our ability to compete in the product markets in which we currently operate).
Failure to obtain or maintain those approvals, clearances (including temporary importation authorizations), licenses or other marketing authorizations could have a material adverse impact on our business (including with respect to our ability to compete in the product markets in which we currently operate).
While have faced and may continue to face operational and global macroeconomic challenges, our financial position remains strong, with operating cash flows from continuing operations totaling $819 million in 2024. We have continued to execute on our disciplined capital allocation framework, as discussed in the "Business Strategy" section in Item 1.
While we have faced and may continue to face operational and global macroeconomic challenges, our financial position remains strong, with operating cash flows from continuing operations totaling $951 million in 2025. We have continued to execute on our disciplined capital allocation framework, as discussed in the "Business Strategy" section in Item 1.
The maximum term over which we have cash flow hedge contracts in place related to foreign exchange risk on forecasted transactions as of December 31, 2024 is 11 months. We also enter into derivative instruments to hedge foreign exchange risk on certain intra-company and third-party receivables and payables and debt denominated in foreign currencies.
The maximum term over which we have cash flow hedge contracts in place related to foreign exchange risk on forecasted transactions as of December 31, 2025 is 12 months. We also enter into derivative instruments to hedge foreign exchange risk on certain intra-company and third-party receivables and payables and debt denominated in foreign currencies.
We projected the timing of the related future cash payments based on contractual maturity dates (where applicable) and estimates of the timing of payments (for liabilities with no contractual maturity dates). The actual timing of payments could differ from our estimates. We contributed $46 million and $27 million to our defined benefit pension plans in 2024 and 2023, respectively.
We projected the timing of the related future cash payments based on contractual maturity dates (where applicable) and estimates of the timing of payments (for liabilities with no contractual maturity dates). The actual timing of payments could differ from our estimates. We contributed $56 million and $46 million to our defined benefit pension plans in 2025 and 2024, respectively.
We had $1.76 billion of cash and cash equivalents as of December 31, 2024, with adequate cash available to meet operating requirements in each jurisdiction in which we operate. We invest our excess cash in money market and other funds and diversify the concentration of cash among different financial institutions.
We had $1.97 billion of cash and cash equivalents as of December 31, 2025, with adequate cash available to meet operating requirements in each jurisdiction in which we operate. We invest our excess cash in money market and other funds and diversify the concentration of cash among different financial institutions.
Our financial results included research and development (R&D) expenses totaling $590 million in 2024, which reflects our focus on balancing investments to support our new product pipeline with efforts to optimize overall R&D spending (including with respect to the maintenance of our portfolio).
Our financial results included research and development (R&D) expenses totaling $518 million in 2025, which reflects our focus on balancing investments to support our new product pipeline with efforts to optimize overall R&D spending (including with respect to the maintenance of our portfolio).
See the section entitled “Non-GAAP Financial Measures” for additional information about our use of that measure. Medical Product & Therapies segment net sales increased 4% for the year ended December 31, 2024, as compared to the prior year period.
See the section entitled “Non-GAAP Financial Measures” for additional information about our use of that measure. Medical Product & Therapies segment net sales increased 2% for the year ended December 31, 2025, as compared to the prior year period.
Healthcare Systems & Technologies Our Healthcare Systems & Technologies segment includes sales of our connected care solutions and collaboration tools, including smart bed systems, patient monitoring systems and diagnostic technologies, respiratory health devices and advanced equipment for the surgical space, including surgical video technologies, precision positioning devices and other accessories.
Healthcare Systems & Technologies Our Healthcare Systems & Technologies segment includes sales of our connected care solutions and collaboration tools, including smart bed systems, patient monitoring systems and diagnostic technologies, respiratory health devices and advanced equipment for the surgical space, including operating room integration technologies, precision positioning devices and other accessories.
See the section entitled “Non-GAAP Financial Measures” for additional information about our use of that measure. Healthcare Systems & Technologies segment net sales increased 3% for the year ended December 31, 2023, as compared to the prior year period.
See the section entitled “Non-GAAP Financial Measures” for additional information about our use of that measure. Healthcare Systems & Technologies segment net sales increased 4% for the year ended December 31, 2025, as compared to the prior year period.
On July 17, 2024, we entered into a credit agreement pursuant to which a group of banks provided us with senior unsecured term loans in an aggregate principal amount of up to $2.05 billion ("the bridge facility").
On July 17, 2024, we entered into a credit agreement pursuant to which a group of banks committed to provide us with senior unsecured term loans in an aggregate principal amount of up to $2.05 billion ("bridge facility").
The amount included within other non-current liabilities (and excluded from the table above) related to our pension plan liabilities was $553 million as of December 31, 2024. We have no obligation to fund our principal plans in the United States in 2025. We continually reassess the amount and timing of any discretionary contributions.
The amount included within other non-current liabilities (and excluded from the table above) related to our pension plan liabilities was $513 million as of December 31, 2025. We have no obligation to fund our principal plans in the United States in 2026. We 47 continually reassess the amount and timing of any discretionary contributions.
Refer to Note 6 and Note 7, respectively, in Item 8 of this Annual Report on Form 10-K for further discussion regarding our debt instruments outstanding and finance lease obligations at December 31, 2024. 2.
Refer to Note 5 and Note 6, respectively, in Item 8 of this Annual Report on Form 10-K for further discussion regarding our debt instruments outstanding and finance lease obligations at December 31, 2025. 2.
The Medical Products & Therapies segment includes sales of our sterile IV solutions, infusion systems, administration sets, parenteral nutrition therapies and surgical hemostat, sealant and adhesion prevention products.
NET SALES BY SEGMENT Medical Products & Therapies Our Medical Products & Therapies segment includes sales of our sterile IV solutions, infusion systems, administration sets, parenteral nutrition therapies and surgical hemostat, sealant and adhesion prevention products.
On September 29, 2023, we completed the sale of our BPS business and its results have been presented as discontinued operations for the years ended December 31, 2023 and 2022 are reported as discontinued operations in the consolidated financial statements included in Item 8 of this Annual Report on Form 10-K.
On September 29, 2023, we completed the sale of our BPS business and its results have been presented as discontinued operations for the year ended December 31, 2023 in the consolidated financial statements included in Item 8 of this Annual Report on Form 10-K.
The existence of high inflation rates in the United States and in many of the countries where we conduct business has resulted in, and may in the future result in, higher interest rates, shipping costs, labor costs, and other costs and expenses.
Over the past few years, the existence of high inflation rates in the United States and in many of the countries where we conduct business has resulted in, and may in the future result in, higher interest rates, shipping costs, labor costs, and other costs and expenses.
As of December 31, 2024, our subsidiary in Turkey had net monetary assets of $27 million. 54 Interest Rate Risk We are also exposed to the risk that our earnings and cash flows could be adversely impacted by fluctuations in interest rates.
As of December 31, 2025, our subsidiary in Turkey had net monetary assets of $38 million. Interest Rate Risk We are also exposed to the risk that our earnings and cash flows could be adversely impacted by fluctuations in interest rates.
Our effective income tax rate can differ from the 21% U.S. federal statutory rate due to a number of factors, including tax incentives, foreign rate differences, state income taxes, non-deductible expenses, non-taxable income, increases or decreases in valuation allowances and liabilities for uncertain tax positions, excess tax benefits or shortfalls on stock compensation awards, audit developments and legislative changes.
Our effective income tax rate can differ from the 21% U.S. federal statutory rate due to a number of factors, including foreign rate differences, tax incentives, non-deductible expenses, non-taxable income, increases or decreases in valuation allowances, increase or decreases in liabilities for uncertain tax positions, and excess tax benefits or shortfalls on stock compensation awards.
Our ability to generate cash flows from operations, issue debt, including commercial paper, or enter into other financing arrangements on acceptable terms could be adversely affected if there is a material decline in the demand for our products or in the solvency of our customers or suppliers, deterioration in our key financial ratios or credit ratings or other significantly unfavorable changes in conditions.
Our ability to generate cash flows from operations, issue debt, including commercial paper, or enter into other financing arrangements on acceptable terms could be adversely affected if there is a material decline in the demand for our products or in the solvency of our customers or suppliers, deterioration in our credit ratings (as discussed below), or other significantly unfavorable changes in conditions (including if our key financial ratios do not show sustained improvement).
A sensitivity analysis of changes in the fair value of foreign exchange contracts outstanding as of December 31, 2024, while not predictive in nature, indicated that if the U.S. Dollar uniformly weakened by 10% against all currencies, the net pre-tax asset balance of $5 million with respect to those contracts would change by $5 million.
A sensitivity analysis of changes in the fair value of foreign exchange contracts outstanding as of December 31, 2025, while not predictive in nature, indicated that if the U.S. Dollar uniformly weakened by 10% against all currencies, the net pre-tax liability balance of $1 million with respect to those contracts would change by $2 million.
See the section entitled “Non-GAAP Financial Measures” for additional information about our use of that measure. Pharmaceuticals segment net sales increased 7% for the year ended December 31, 2024, as compared to the prior year period.
See the section entitled “Non-GAAP Financial Measures” for additional information about our use of that measure. 37 Pharmaceuticals segment net sales increased 3% for the year ended December 31, 2025, as compared to the prior year period.
Net income (loss) attributable to Baxter stockholders in 2024 included special items which adversely impacted net income (loss) by $2.13 billion, or $4.17 per diluted share. See our special items subsection, in the Results of Operations section below, for information about special items for all periods present.
Net income (loss) attributable to Baxter stockholders in 2025 included special items which adversely impacted net income (loss) by $2.09 billion, or $4.08 per diluted share. See our special items subsection, in the Results of Operations section below, for information about special items for all periods present.
We continue to pursue cost savings initiatives, including those intended to mitigate a portion of the dis-synergies expected to arise as a result of the sale of our Kidney Care business, and to the extent further cost savings opportunities are identified, we would incur additional restructuring charges and costs to implement business optimization programs in future periods.
We continue to pursue cost savings initiatives, including those intended to mitigate a portion of the dis-synergies that arose as a result of the sale of our Kidney Care business and to further optimize our business and manufacturing footprint, and to the extent further cost savings opportunities are identified, we would incur additional restructuring charges and costs to implement business optimization programs in future periods.
These sensitivity analyses disregard the possibility that currency exchange rates can move in opposite directions and that gains from one currency may or may not be offset by losses from another currency. The analyses also disregard the offsetting change in value of the underlying hedged transactions and balances.
All other factors are held constant. These sensitivity analyses disregard the possibility that currency exchange rates can move in opposite directions and that gains from one currency may or may not be offset by losses from another currency. The analyses also disregard the offsetting change in value of the underlying hedged transactions and balances.
We also periodically use forward-starting interest rate swaps and treasury rate locks to hedge the risk to earnings associated with fluctuations in interest rates relating to anticipated issuances of term debt. As of December 31, 2024, there were no interest rate derivative contracts outstanding and we had $3.48 billion of outstanding floating rate debt.
We also periodically use forward-starting interest rate swaps and treasury rate locks to hedge the risk to earnings associated with fluctuations in interest rates relating to anticipated issuances of term debt. As of December 31, 2025, there were no interest rate derivative contracts outstanding.
We expect to incur dis-synergies following our sale of our Kidney Care business due to the reduced size of our company and, as a result, we have begun to undertake certain actions (and will need to undertake additional actions) to ensure that our cost structure is appropriate to support our remaining businesses.
We have incurred and expect to incur additional dis-synergies following our sale of our Kidney Care business due to the reduced size of our company and, as a result, we have begun to undertake certain restructuring actions (and intend undertake additional actions) to help ensure our cost structure is appropriate to support our remaining businesses.
Refer to Note 2 in Item 8 of this Annual Report on Form 10-K for additional information. Net Income (Loss) and Earnings (Loss) per Diluted Share Net income (loss) for the total company, including discontinued operations, was $(638) million in 2024, $2.66 billion in 2023 and $(2.42) billion in 2022.
Refer to Note 2 in Item 8 of this Annual Report on Form 10-K for additional information. Net Income (Loss) and Earnings (Loss) per Diluted Share Net income (loss) for the total company, including discontinued operations, was $(957) million in 2025 and $(638) million in 2024.
Foreign currency exchange rates adversely impacted net sales by 1% for the year ended December 31, 2024, as compared to the prior year period.
Foreign currency exchange rates favorably impacted net sales by 1% for the year ended December 31, 2025, as compared to the prior year period.
Significant assumptions used in the determination of the fair values of our reporting units generally include revenue growth rates, forecasted earnings before income, taxes, depreciation and amortization (EBITDA) margins, discount rates, terminal growth rates and earnings multiples.
Significant assumptions used in the determination of the fair values of our reporting units generally include revenue growth rates, forecasted EBITDA margins, discount rates, terminal growth rates and earnings multiples.
CRITICAL ACCOUNTING POLICIES The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. A summary of our significant accounting policies is included in Note 1 in Item 8 of this Annual Report on Form 10-K.
GAAP requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. A summary of our significant accounting policies is included in Note 1 in Item 8 of this Annual Report on Form 10-K.
GAAP) of acquired assets and liabilities in a business combination. Management performs an impairment test in the fourth quarter of each year, or whenever events or changes in circumstances indicate that the fair value of the reporting unit is more likely than not below its carrying amount.
Management performs an impairment test in the fourth quarter of each year, or whenever events or changes in circumstances indicate that the fair value of the reporting unit is more likely than not below its carrying amount.
Our global footprint and the critical nature of our products and services, which are sold in over 100 countries as of December 31, 2024, after giving effect to the Kidney Care sale, play a key role in expanding access to healthcare in emerging and developed countries.
Our global footprint and the critical nature of our products and services, which are sold in over 100 countries as of December 31, 2025, play a key role in expanding access to healthcare in emerging and developed countries.
This standard is effective for annual consolidated financial statements for the year ending December 31, 2027 and for interim periods beginning in 2028. We are currently evaluating the impact of this new standard on our consolidated financial statements.
This standard is effective for annual consolidated financial statements for the year ending December 31, 2027 and for interim periods beginning in 2028. We are currently evaluating the impact of this new standard on our consolidated financial statements. CRITICAL ACCOUNTING POLICIES The preparation of financial statements in accordance with U.S.
Refer to Note 3 in Item 8 of this Annual Report on Form 10-K for additional information regarding these goodwill impairment charges. Further adverse changes to macroeconomic conditions or our earnings forecasts could lead to additional goodwill impairment charges in future periods and such charges could be material to our results of operations. For further discussion, refer to Item 1A.
Refer to the "Critical Accounting Policies" section below and Note 4 in Item 8 of this Annual Report on Form 10-K for additional information regarding these goodwill impairments. Further adverse changes to macroeconomic conditions or our earnings forecasts could lead to additional goodwill impairment charges in future periods and such charges could be material to our results of operations.
We did not repurchase any shares under this authority in 2024 and had $1.30 billion remaining available under this authorization as of December 31, 2024. Credit Facilities, Commercial Paper Program and Access to Capital and Credit Ratings Credit Facilities and Commercial Paper Program As of December 31, 2024, we had a U.S.
We did not repurchase any shares under this authority in 2024 and had $1.30 billion remaining available under this authorization as of December 31, 2025. 45 Credit Facilities, Commercial Paper Program and Access to Capital and Credit Ratings Credit Facilities and Commercial Paper Program As of December 31, 2025, we had a multicurrency revolving credit facility, as described below.
As of December 31, 2024, we had $13.13 billion of long-term debt and finance lease obligations, including current maturities, and short-term debt.
As of December 31, 2025, we had $9.48 billion of long-term debt and finance lease obligations, including current maturities, and short-term debt.
See Notes 2 and 6 in Item 8 of this Annual Report on Form 10-K for additional information. Financial Results Our global net sales totaled $10.64 billion in 2024, an increase of 3% over 2023 on a reported basis and 3% on a constant currency basis.
See Notes 2 and 5 in Item 8 of this Annual Report on Form 10-K for additional information. 33 Financial Results Our global net sales totaled $11.24 billion in 2025, an increase of 6% over 2024 on a reported basis and 3% on an operational sales basis.
The reduction in value was primarily due to lower forecasted revenues and margins which contributed to reduced expected future cash flows. The intangible asset impairment charge is classified within research and development expenses in the accompanying consolidated statements of income (loss) for the year ended December 31, 2024.
The 51 reduction in value was primarily due to lower forecasted revenues and margins which contributed to a lower royalty rate and reduced expected future cash flows. The intangible asset impairment charge is classified within cost of sales in the accompanying consolidated statements of income (loss) for the year ended December 31, 2025.
After giving effect to certain adjustments, we received approximately $3.71 billion pre-tax cash proceeds at closing of the transaction with the net after tax proceeds currently estimated to be approximately $3.4 billion, subject to certain post-closing adjustments.
After giving effect to certain adjustments, we received approximately $3.71 billion pre-tax cash proceeds at closing of the transaction with the net after tax proceeds of approximately $3.3 billion, prior to giving effects to certain post-closing adjustments.
Income Taxes Our effective income tax rate was (12.8)%, 25.2% and 4.2% in 2024, 2023 and 2022, respectively. The special items identified above impacted our effective tax rate by (30.3) percentage points, 4.7 percentage points and (13.6) percentage points in 2024, 2023 and 2022, respectively. Refer to the Special Items caption earlier in this section for additional detail.
Income Taxes Our effective income tax rate was (78.2)% and (12.8)% in 2025 and 2024, respectively. The special items identified above impacted our effective tax rate by (94.3) and (30.3) percentage points in 2025 and 2024, respectively. Refer to the Special Items caption earlier in this section for additional detail.
In January 2025, we used a portion of the approximately $3.4 billion of net after-tax cash proceeds from the sale of our Kidney Care business to repay the $1.83 billion outstanding under the bridge facility, at which time it was terminated.
In January 2025, we used a portion of the approximately $3.3 billion of net after-tax cash proceeds from the sale of our Kidney Care business to repay the $1.83 billion outstanding under the bridge facility, at which time it was terminated. As of December 31, 2025, we were in compliance with the financial covenants in the Multicurrency Revolver.
Cash Flows from Investing Activities In 2024, cash used for investing activities from continuing operations included capital expenditures of $446 million. In 2023, cash used for investing activities from continuing operations included capital expenditures of $432 million.
Cash Flows from Investing Activities - Continuing Operations In 2025, cash used in investing activities from continuing operations included capital expenditures of $513 million. In 2024, cash used in investing activities from continuing operations included capital expenditures of $446 million.
Access to Capital and Credit Ratings We intend to fund short-term and long-term obligations as they mature through cash on hand, including the proceeds from the recently completed sale of our Kidney Care business, future cash flows from operations, or by issuing additional debt, which could include commercial paper.
Access to Capital and Credit Ratings We intend to fund short-term and long-term obligations as they mature through cash on hand, future cash flows from operations, or by issuing additional debt, which could include commercial paper.
Sale of Kidney Care Business On August 12, 2024, we entered into an Equity Purchase Agreement (EPA ) with certain affiliates of Carlyle Group Inc. (Carlyle) to sell our Kidney Care business, which will be known as Vantive.
Sale of Kidney Care Business On August 12, 2024, we entered into an Equity Purchase Agreement (EPA ) with certain affiliates of Carlyle Group Inc. (Carlyle) to sell our Kidney Care business. That business, which is now known as Vantive Health LLC (Vantive) is comprised of our former Kidney Care segment.
The special items identified earlier in this section had an unfavorable impact on the SG&A expense ratio of 2.9, 3.6 and 5.4 percentage points in 2024, 2023 and 2022, respectively. Refer to the Special Items caption earlier in this section for additional detail.
SG&A The SG&A expense ratio was 25.7% and 27.9% for the years ended 2025 and 2024, respectively. The special items identified earlier in this section had an unfavorable impact on the SG&A expense ratio of 3.4 and 2.9 percentage points in 2025 and 2024, respectively. Refer to the Special Items caption earlier in this section for additional detail.
In 2025, we expect to make contributions of at least $26 million to our Puerto Rico plan and $7 million to our foreign pension plans. We expect to have net cash outflows relating to our OPEB plans of $16 million in 2025.
In 2026, we expect to make contributions of at least $10 million to our Puerto Rico plan and $5 million to our foreign pension plans. We expect to have net cash outflows relating to our OPEB plans of $15 million in 2026.
RESULTS OF OPERATIONS CONSOLIDATED NET SALES Percent change At actual currency rates At constant currency rates 3 years ended December 31 (in millions) 2024 2023 2022 2024 2023 2024 2023 United States $ 5,850 $ 5,802 $ 5,769 1 % 1 % 1 % 1 % Emerging markets 1 1,350 1,343 1,253 1 % 7 % 3 % 8 % Rest of world 2 3,436 3,215 3,035 7 % 6 % 7 % 6 % Total net sales $ 10,636 $ 10,360 $ 10,057 3 % 3 % 3 % 3 % 1 Emerging markets include sales from our operations in Eastern Europe, the Middle East, Africa, Latin America and Asia (except for Japan). 2 Rest of world includes sales from our operations in Western Europe, Canada, Japan, Australia and New Zealand. 3 Percent change in net sales at constant currency rates is a non-GAAP financial measure.
RESULTS OF OPERATIONS CONSOLIDATED NET SALES Percent change years ended December 31 (in millions) 2025 2024 At actual rates At operational sales growth 3 United States $ 6,122 $ 5,850 5 % 1 % Emerging markets 1 1,394 1,350 3 % 6 % Rest of world 2 3,728 3,436 8 % 4 % Total net sales $ 11,244 $ 10,636 6 % 3 % 1 Emerging markets include sales from our operations in Eastern Europe, the Middle East, Africa, Latin America and Asia (except for Japan). 2 Rest of world includes sales from our operations in Western Europe, Canada, Japan, Australia and New Zealand. 3 Percent change in net sales at operational sales growth is a non-GAAP financial measure.
Foreign currency exchange rates adversely impacted net sales by 1% for the year ended December 31, 2023, as compared to the prior year period. Drug Compounding net sales increased 10% for the year ended December 31, 2023, as compared to the prior year period, driven by increased demand for our international pharmacy compounding services.
Drug Compounding net sales increased 10% for the year ended December 31, 2025, as compared to the prior year period, driven by improved product mix and increased demand for our international pharmacy compounding offerings. Foreign currency exchange rates favorably impacted net sales by 1% for the year ended December 31, 2025, as compared to the prior year period.
For the year ended December 31, 2024, the difference between our effective income tax rate and the U.S. federal statutory rate was adversely impacted by a non-deductible impairment of goodwill, legislative changes under IRC Section 987 (which is the exchange gain or loss on foreign branch remittances in the U.S., effective in 2024), and a net revaluation of the Swiss basis step-up deferred tax asset and related valuation allowance that arose from Swiss 47 tax reform legislation in 2019, partially offset by a favorable geographic earnings mix, a decrease in valuation allowance mainly related to U.S. foreign tax credit carryforward, and a tax benefit related to research and development tax credits.
For the year ended December 31, 2024, the difference between our effective income tax rate and the U.S. federal statutory rate was adversely impacted by a non-deductible impairment of goodwill, legislative changes under IRC Section 987 (which is the exchange gain or loss on foreign branch remittances in the U.S., effective in 2024), and a net revaluation of the Swiss basis step-up deferred tax asset and related valuation allowance that arose from Swiss tax reform legislation in 2019, partially offset by a favorable geographic earnings mix, a decrease in valuation allowance mainly related to U.S. foreign tax credit carryforward, and a tax benefit related to research and development tax credits. 42 Our tax provisions for 2025 and 2024 did not include any significant tax charges related to either the Base Erosion and Anti-Abuse Tax (BEAT) or Global Intangible Low Taxed Income (GILTI) provisions, except for the inability to fully utilize foreign tax credits against such GILTI.
We also incurred a ticking fee on undrawn commitments at a rate based on our long-term debt ratings in effect from time to time. The banks' funding commitments under the bridge facility terminated on December 31, 2024.
Borrowings under the bridge facility bore interest at a rate based on our long-term debt ratings in effect from time to time. The banks' funding commitments under the bridge facility terminated on December 31, 2024.
Discontinued Operations In August 2024, we entered into a definitive agreement to sell our Kidney Care business and its results have been presented as discontinued operations for the years ended December 31, 2024, 2023 and 2022 in the consolidated financial statements included in Item 8 of this Annual Report on Form 10-K.
Discontinued Operations On January 31, 2025, we completed the sale of our Kidney Care Business and its results have been presented as discontinued operations for the years ended December 31, 2025, 2024 and 2023 in the consolidated financial statements included in Item 8 of this Annual Report on Form 10-K.
Refer to the Net Sales discussion in the Results of Operations section below for more information related to changes in net sales on a constant currency basis. Net income (loss) attributable to Baxter stockholders totaled $(649) million, or $(1.27) per diluted share, in 2024.
Refer to the Net Sales discussion in the Results of Operations section below for more information related to changes in net sales on an operational sales basis. Net income (loss) attributable to Baxter stockholders totaled $(957) million, or $(1.87) per diluted share, in 2025.
The special items identified earlier in this section had an unfavorable impact on the R&D expense ratio of 0.7 percentage points in 2024 , and 0.1 percentage points both in 2023 and 2022. Refer to the Special Items caption earlier in this section for additional detail.
R&D The R&D expense ratio was 4.6% and 5.5% for the years ended 2025 and 2024, respectively. The special items identified earlier in this section had an unfavorable impact on the R&D expense ratio of 0.1 and 0.7 percentage points in 2025 and 2024, respectively. Refer to the Special Items caption earlier in this section for additional detail.
Infusion Therapies & Technologies net sales increased 4% for the year ended December 31, 2024, as compared to the prior year period.
Infusion Therapies & Technologies net sales were flat for the year ended December 31, 2025, as compared to the prior year period.
Percent change years ended December 31 (in millions) 2024 2023 At actual currency rates At constant currency rates 1 Care and Connectivity Solutions $ 1,814 $ 1,800 1 % 1 % Front Line Care 1,137 1,213 (6) % (6) % Total Healthcare Systems & Technologies net sales $ 2,951 $ 3,013 (2) % (2) % 1 Percent change in net sales at constant currency rates is a non-GAAP financial measure.
Percent change years ended December 31 (in millions) 2025 2024 At actual currency rates At operational sales growth 1 Care and Connectivity Solutions $ 1,911 $ 1,814 5 % 4 % Front Line Care 1,160 1,137 2 % 2 % Total Healthcare Systems & Technologies net sales $ 3,071 $ 2,951 4 % 3 % 1 Percent change in net sales at operational sales growth is a non-GAAP financial measure.
GAAP measure of percent change in net sales at actual currency rates, may provide a more complete understanding and facilitate a fuller analysis of our results of operations, particularly in evaluating performance from one period to another.
We believe that the non-GAAP measure of percent change in net sales at operational growth, when used in conjunction with the U.S. GAAP measure of percent change in net sales at actual currency rates, may provide a more complete understanding and facilitate a fuller analysis of our results of operations, particularly in evaluating performance from one period to another.
We consider the adoption of these regulations to be a significant one-time regulatory charge and believe that the costs of initial compliance for previously registered products over the implementation period are not indicative of our core operating results. 6 Our results in 2024 included pre-tax net charges of $110 million related damages caused by Hurricane Helene.
We consider the adoption of these regulations to be a significant one-time regulatory charge and believe that the costs of initial compliance for previously registered products over the implementation period are not indicative of our core operating results. 6 Our results in 2025 included $58 million of separation-related costs primarily reflecting costs of external advisors supporting our activities related to the sale of our former Kidney Care segment. 7 Our results in 2025 included pre-tax charges of $133 million related to damages caused by Hurricane Helene.
We recognize a goodwill impairment charge for the amount by which a reporting unit's carrying amount exceeds its fair value. In connection with our annual goodwill impairment assessment in the fourth quarter of 2024, we recorded a $425 million goodwill impairment related to our Front Line Care reporting unit within our Healthcare Systems & Technologies segment.
In connection with our annual goodwill impairment assessment in the fourth quarter of 2024, we recorded a $425 million goodwill impairment related to our Front Line Care reporting unit within our Healthcare Systems & Technologies segment.
We believe our tax positions comply with applicable tax law and we intend to defend our positions. In evaluating the exposure associated with various tax filing positions, we record reserves for uncertain tax positions in accordance with U.S.
These challenges relate to the timing and amount of deductions and the allocation of income among various tax jurisdictions. We believe our tax positions comply with applicable tax law and we intend to defend our positions. In evaluating the exposure associated with various tax filing positions, we record reserves for uncertain tax positions in accordance with U.S.
Currency Risk We are primarily exposed to foreign exchange risk with respect to revenues generated outside of the United States denominated in the Euro, British Pound, Australian Dollar, Canadian Dollar, Chinese Renminbi, Japanese Yen, Mexican Peso, Indian Rupee and Swedish Krona.
Currency Risk We are primarily exposed to foreign exchange risk with respect to revenues generated outside of the United States denominated in the Euro, British Pound, Australian Dollar, Turkish Lira, Canadian Dollar, New Zealand Dollar, and Mexican Peso.
We currently expect to incur additional pre-tax cash costs, primarily related to the implementation of business optimization programs, of approximately $4 million through the completion of initiatives that are currently underway.
We currently expect to incur additional pre-tax cash costs, primarily related to the implementation of business optimization programs, of approximately $2 million through the completion of initiatives that were launched prior to December 31, 2025.
CERTAIN REGULATORY MATTERS In July 2017, immediately prior to the closing of our acquisition of Claris Injectables Limited (Claris), FDA commenced an inspection of the Claris’ facilities in Ahmedabad, India.
CERTAIN REGULATORY MATTERS In July 2017, immediately prior to the closing of our acquisition of Claris Injectables Limited (Claris), FDA commenced an inspection of the Claris’ facilities in Ahmedabad, India. FDA completed the inspection and subsequently issued a Warning Letter based on observations identified in the 2017 inspection¹.
Percent change years ended December 31 (in millions) 2024 2023 At actual currency rates At constant currency rates 1 Injectables and Anesthesia $ 1,373 $ 1,347 2 % 3 % Drug Compounding 1,038 902 15 % 15 % Total Pharmaceuticals net sales $ 2,411 $ 2,249 7 % 7 % 1 Percent change in net sales at constant currency rates is a non-GAAP financial measure.
Percent change years ended December 31 (in millions) 2025 2024 At actual currency rates At operational sales growth 1 Injectables and Anesthesia $ 1,352 $ 1,373 (2) % (2) % Drug Compounding 1,141 1,038 10 % 9 % Total Pharmaceuticals net sales $ 2,493 $ 2,411 3 % 3 % 1 Percent change in net sales at operational sales growth is a non-GAAP financial measure.
The costs of restructuring actions consisted primarily of employee termination costs, contract termination costs and asset impairments. We incurred restructuring charges of $162 million, $174 million and $193 million in 2024, 2023 and 2022, respectively.
The costs of these actions consisted primarily of employee termination costs, implementation costs, contract termination costs, and asset impairments. We incurred charges of $178 million and $162 million in 2025 and 2024, respectively.
International sales totaled $4.79 billion in 2024, an increase of 5% compared to 2023 on a reported basis and 6% on a constant currency basis. Sales in the United States totaled $5.85 billion in 2024, an increase of 1% compared to 2023.
International sales totaled $5.12 billion in 2025, an increase of 7% compared to 2024 on a reported basis and 5% on an operational sales basis. Sales in the United States totaled $6.12 billion in 2025, an increase of 5% compared to 2024 on a reported basis and 1% on an operational basis.
Furthermore, FDA in the United States, the EMA and MHRA in Europe, the NMPA in China, and other government agencies, inside and outside of the United States, administer requirements covering the testing, safety, effectiveness, manufacturing, labeling, promotion and advertising, pricing, distribution, and post-market surveillance of our products.
Furthermore, FDA in the United States, the European Medicines Agency in the Europe Union, the Medicines & Healthcare products Regulatory Agency in the United Kingdom, Health Canada in Canada, the China Food and Drug Administration in China, and other government agencies, inside and outside of the United States, administer requirements covering the testing, safety, effectiveness, manufacturing, labeling, promotion and advertising, pricing, distribution, and post-market surveillance of our products.
The following commentary should be read in conjunction with the consolidated financial statements and accompanying notes included in Item 8 of this Annual Report on Form 10-K. 34 EXECUTIVE OVERVIEW Description of the Company, Recent Strategic Actions and Business Segments Baxter International Inc. is a global medical technology with approximately 38,000 employees worldwide who are engaged in the development, manufacture and sale of a broad range of products, digital health solutions and therapies used by hospitals, nursing homes, rehabilitation centers, ambulatory surgery centers, doctors’ offices and patients at home under physician supervision.
EXECUTIVE OVERVIEW Description of the Company, Recent Strategic Actions and Business Segments Baxter International Inc. is a global medical technology with approximately 37,500 employees worldwide who are engaged in the development, manufacture and sale of a broad range of products, digital health solutions and therapies used by hospitals, nursing homes, rehabilitation centers, ambulatory surgery centers, doctors’ offices and patients at home under physician supervision.

… 290 more changes not shown on this page.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

1 edited+0 added−0 removed0 unchanged
Biggest changeItem 7A. Quantitative and Qualitative Disclosures About Market Risk. Incorporated by reference to the section entitled “Financial Instrument Market Risk” in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations of this Annual Report on Form 10-K. 63
Biggest changeItem 7A. Quantitative and Qualitative Disclosures About Market Risk. Incorporated by reference to the section entitled “Financial Instrument Market Risk” in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations of this Annual Report on Form 10-K. 55

Other BAX 10-K year-over-year comparisons