- Fourth-quarter sales from continuing operations of $3.89
billion increased 4% on a reported basis and 3% on a constant
currency basis1
- Fourth-quarter U.S. GAAP diluted earnings per share (EPS) from
continuing operations of $0.14 and adjusted diluted EPS from
continuing operations of $0.88
- Full-year sales from continuing operations of $14.81 billion
increased 2% on a reported basis and 3% on a constant currency
basis
- Full-year U.S. GAAP diluted EPS (loss) from continuing
operations of ($0.15) and adjusted diluted EPS from continuing
operations of $2.60
Baxter International Inc. (NYSE:BAX), a global medtech leader,
today reported results for the fourth quarter and full year ended
Dec. 31, 2023, and provided its financial guidance for full-year
and first-quarter 2024.
“Baxter’s performance in 2023 reflects our building momentum as
we executed upon several strategic initiatives designed to enhance
our future performance, including the implementation of a new
operating model, the sale of our BioPharma Solutions business and
steady progress on the proposed separation of our Kidney Care
segment,” said José (Joe) E. Almeida, chair, president and chief
executive officer. “Results for the fourth quarter and full year
reflect solid demand for a range of our medically essential
products, as well as continued improvement in the macroeconomic and
supply chain environment. We plan to build on this momentum in 2024
as our dedicated employees work to advance Baxter’s ongoing
business transformation and prepare for the proposed separation of
our Kidney Care segment.”
Fourth-Quarter Financial Results
Worldwide sales from continuing operations in the fourth quarter
totaled approximately $3.89 billion, an increase of 4% on a
reported basis and 3% on a constant currency basis. Continuing
operations exclude Baxter’s BioPharma Solutions (BPS) business,
which was acquired by Advent International and Warburg Pincus at
the close of the third quarter of 2023.
U.S. sales from continuing operations in the fourth quarter
totaled approximately $1.82 billion, increasing 2% on a reported
basis. International sales from continuing operations in the fourth
quarter totaled approximately $2.07 billion, an increase of 6% on a
reported basis and 4% at constant currency rates.
Fourth-quarter sales performance exceeded Baxter’s previously
announced guidance, driven by better-than-expected sales in the
company’s Medical Products and Therapies, Kidney Care and
Pharmaceuticals segments. Sales growth in the quarter was driven by
strong performance in the Healthcare Systems and Technologies
segment, reflecting strength in Care and Connectivity Solutions, as
well as increased demand for Medical Products and Therapies and
Pharmaceuticals products. Growth in the quarter was partially
offset by a decline in Kidney Care sales, reflecting a difficult
comparison to the prior year period due in part to certain discrete
items that benefited the prior year as well as the impact of lower
sales in select markets outside of the U.S.
Please see the attached schedules accompanying this press
release for additional details on sales performance in the quarter,
including breakouts by Baxter’s segments.
For the fourth quarter, total net income attributable to Baxter
on a U.S. GAAP (Generally Accepted Accounting Principles) basis was
$245 million, or $0.48 per diluted share. Total U.S. GAAP diluted
EPS includes $0.14 from continuing operations and $0.34 from
discontinued operations. These results include special items
totaling $189 million, primarily related to the impact of
intangible amortization, tax matters, separation-related costs and
investment impairments, among other factors. On an adjusted basis,
income from continuing operations was $0.88 per diluted share.
Full-Year Financial Results
Baxter’s 2023 worldwide sales from continuing operations totaled
$14.81 billion, an increase of 2% on a reported basis and 3% on a
constant currency basis. Sales from continuing operations in the
U.S. totaled $7.00 billion, growing 1% on a reported basis.
International sales from continuing operations of $7.81 billion
grew 3% on a reported basis and 4% at constant currency rates. The
accompanying schedules include additional details on sales
performance, including breakouts by Baxter’s segments.
For full-year 2023, net income attributable to Baxter on a U.S.
GAAP basis totaled $2.66 billion, or $5.25 per diluted share. Total
U.S. GAAP diluted EPS (loss) includes ($0.15) from continuing
operations and $5.40 from discontinued operations. These results
include special items totaling $1.18 billion after-tax, which
primarily reflected the gain on the divestiture of Baxter’s BPS
business offset by intangible amortization and business
optimization costs, among other items. On an adjusted basis, 2023
income from continuing operations totaled $2.60 per diluted share.
Total adjusted net income attributable to Baxter totaled $1.48
billion or $2.92 per diluted share, which included earnings of
$0.32 from discontinued operations.
For the full year, Baxter generated $1.70 billion in operating
cash flow from continuing operations and $1.01 billion in free cash
flow (operating cash flow from continuing operations less capital
expenditures of $692 million).
“Consistent with our focus on advancing Baxter’s transformation
journey and creating value for our stakeholders, we made
significant progress in 2023 in line with our capital allocation
priorities,” said Joel Grade, executive vice president and chief
financial officer. “Most notably, net after-tax proceeds from the
sale of our BioPharma Solutions business were allocated towards
debt repayment. During 2024, we will remain focused on deleveraging
while also significantly enhancing our focus on cash flow
generation.”
Kidney Care Separation Update
Baxter’s preparations are progressing for the proposed
separation of its Kidney Care segment into a standalone company to
be named Vantive. As a standalone entity, Vantive is expected to
benefit from a heightened strategic focus and the ability to pursue
its unique investment priorities, to emerge better positioned to
accelerate growth and innovation, and to create incremental value
for its patients, clinicians, investors, and other stakeholder
communities.
Chris Toth, executive vice president and group president, Kidney
Care, and designated chief executive officer of Vantive, continues
to build out his senior management team. Recently, he named Matt
Harbaugh as vice president, Finance, Kidney Care and designated
chief financial officer of Vantive. Mr. Harbaugh was previously
chief financial officer at NuVasive Inc.
Recent Highlights2
Baxter continues to advance key strategic priorities in pursuit
of its Mission to Save and Sustain Lives.
At the end of the third quarter of 2023, the company completed
the divestiture of its BPS business, further streamlining its
strategic focus in line with the transformational initiatives
outlined at the start of 2023.
Among other 2023 highlights across Baxter’s business
segments:
Healthcare Systems and Technologies
- Announced the launch of digital image capture capability for
eye exams using Baxter’s current Welch Allyn PanOptic Plus
Ophthalmoscope. The iExaminer Pro System adds the ability
for a clinician to connect a smart device to capture eye images for
further examination. When used with the iExaminer Pro app,
clinicians can save and share images for tracking and trending, and
initiate more informed consultations with specialists.
- Launched its next-generation Hillrom Progressa+ ICU bed
in the U.S. Progressa+ offers new technology and features to
help address complex critical care needs, including in-bed
pulmonary therapies designed to aid in the reduction of pulmonary
complications, improved protection of the patient’s skin to help
prevent pressure injuries, and support for early mobility
protocols. Baxter plans to continue launching Progressa+ in
additional global markets in 2024.
- Commercially launched the new Baxter Patient Warming System,
which minimizes risks associated with forced air warming, reduces
noise and waste in the operating room, and lessens the burden on
clinician workflows. The updated system eliminates the need for
disposables, as the warming technology is built into the table pad
and employs reusable conductive warming blankets that can reach
temperatures of 43 degrees Celsius.
- Launched SpotConnect, an electronic medical records
(EMR) application for the Welch Allyn Spot Vision Screener
device. Spot Vision Screener allows healthcare providers to
detect and treat six vision risk factors in children.
SpotConnect helps streamline clinical workflows through
secure EMR connectivity and allows access to screening results
across the care team.
- Introduced the ReadyConnect System for Baxter's
Centrella Smart+ Bed. This innovative system delivers
reliable, cable-free connectivity between the hospital bed and most
nurse call systems on the market, and requires no wireless network,
incremental server software licenses, or other IT resources from
the customer.
Medical Products and Therapies
- Announced the FDA Premarket Approval and subsequent U.S. launch
of PERCLOT Absorbable Hemostatic Powder. PERCLOT is a
passive, absorbable hemostatic powder that is ready to use and
designed for patients with intact coagulation to address mild
bleeding. This represents Baxter's first passive hemostat in the
U.S. market, broadening Baxter's portfolio to include a full range
of active and passive solutions.
- Launched Floseal + Recothrom, the first and only active
flowable hemostat with a recombinant thrombin, resulting in 1.5
times faster preparation. Floseal + Recothrom has a thrombin
component manufactured using recombinant DNA technology, and
therefore contains no human blood components, eliminating reliance
on human blood donations.
- Advanced its intravenous (IV) bag recycling program pilot in
the U.S. in conjunction with Chicago’s Northwestern Memorial
Hospital, successfully demonstrating proof of concept with more
than six tons of plastic IV bag waste diverted from landfill.
Baxter is now expanding the pilot program to support
scalability.
Pharmaceuticals
- Launched ZOSYN (piperacillin and tazobactam) in the U.S.
Zosyn premix is indicated for the treatment of multiple
infections caused by susceptible bacteria and is available in
Baxter's proprietary single-dose Galaxy containers, which enable
premixed medications to have a longer shelf life. Its frozen premix
formulation helps support patient safety, simplify medication
preparation and improve operational efficiencies.
- Launched a range of additional injectable pharmaceutical
molecules, including the anti-infective daptomycin premix,
antiviral foscarnet premix, oncolytic bendamustine and
anti-hypertensive norepinephrine in the U.S., and the
anti-infective vancomycin in Australia. Collectively, these
injectables reinforce Baxter’s focus on differentiated molecules
and expand the Pharmaceuticals segment portfolio in critical
therapeutic areas.
Kidney Care
- Announced new data at Kidney Week indicating Baxter’s
Sharesource remote patient management digital platform, when
used with an automated peritoneal dialysis (PD) system, is
associated with a 77% reduction in the risk of PD technique
failure.
- Announced a collaborative research agreement with life sciences
company Miromatrix to help support additional treatment options for
patients with acute liver failure.
Corporate Responsibility
Baxter furthers its aspirations as a healthcare leader through
responsible corporate citizenship and the dedication of its
employees to doing business the right way. In 2023, Baxter
continued to advance its 2030 Corporate Responsibility Commitment,
featuring 10 goals that support an overarching pledge to “Empower
our Patients,” “Protect our Planet” and “Champion our People and
Communities.” The company’s corporate responsibility goals align
with certain of the United Nations Sustainable Development Goals
(UN SDGs) and 2030 Agenda with a global blueprint for achieving a
more sustainable future.
In line with Baxter’s commitment to providing transparent
information on the environmental, social and governance topics most
important to its stakeholders, the company published its first
report against the Task Force on Climate-related Financial
Disclosures (TCFD) framework, which was recently incorporated into
the International Sustainability Standards Board Standards. The
TCFD framework is designed to help improve climate-related
disclosure that is relevant to Baxter's investors and other key
stakeholders in the areas of governance, strategy, risk management,
and metrics and targets. Moving forward, Baxter expects to report
against the TCFD framework in the company's annual Corporate
Responsibility Report.
Baxter continues to be recognized for its leadership in
corporate responsibility and workplace excellence. In 2023, the
company was named to the Dow Jones Sustainability Index (DJSI)
North America, which has included Baxter each year since it
launched in 2005. Additionally, Baxter was included in 2023 on the
FTSE Russell's FTSE4Good Index Series and JUST Capital's America's
Most JUST Companies list, among numerous other regional and
country-specific recognitions across the globe. Learn more about
Baxter's corporate responsibility initiatives here.
2024 Financial Outlook
For full-year 2024: Baxter expects
sales growth of approximately 2% on both a reported and constant
currency basis. The company expects adjusted earnings, before
special items, of $2.85 to $2.95 per diluted share.
For first-quarter 2024: The company
expects sales growth of approximately 1% on a reported basis and 1%
to 2% on a constant currency basis. The company expects adjusted
earnings, before special items, of $0.59 to $0.62 per diluted
share.
A webcast of Baxter’s fourth-quarter 2023 conference call for
investors can be accessed live from a link in the Investor
Relations section of the company’s website at www.baxter.com
beginning at 7:30 a.m. CST on Feb. 8, 2024. Please see
www.baxter.com for more information regarding this and future
investor events and webcasts.
About Baxter
Every day, millions of patients, caregivers and healthcare
providers rely on Baxter’s leading portfolio of diagnostic,
critical care, kidney care, nutrition, hospital and surgical
products used across patient homes, hospitals, physician offices
and other sites of care. For more than 90 years, we’ve been
operating at the critical intersection where innovations that save
and sustain lives meet the healthcare providers who make it happen.
With products, digital health solutions and therapies available in
more than 100 countries, Baxter’s employees worldwide are now
building upon the company’s rich heritage of medical breakthroughs
to advance the next generation of transformative healthcare
innovations. To learn more, visit www.baxter.com and follow us on
X/Twitter, LinkedIn and Facebook.
Non-GAAP Financial Measures
Non-GAAP financial measures may enhance an understanding of the
company’s operations and may facilitate an analysis of those
operations, particularly in evaluating performance from one period
to another. Management believes that non-GAAP financial measures,
when used in conjunction with the results presented in accordance
with U.S. GAAP and the company’s reconciliations to corresponding
U.S. GAAP financial measures (which are included in the tables
accompanying this release), may enhance an investor’s overall
understanding of the company’s past financial performance and
prospects for the future. Management uses these non-GAAP measures
internally in financial planning, to monitor business unit
performance, and, in some cases, for purposes of determining
incentive compensation. This information should be considered in
addition to, and not as substitutes for, information prepared in
accordance with U.S. GAAP.
Net sales growth on a constant currency basis is a non-GAAP
financial measure that provides information on the percentage
change in net sales growth as if foreign currency exchange rates
had remained constant between the prior and current periods.
Other non-GAAP financial measures included in this release and
the accompanying tables (including within the tables that provide
the company’s detailed reconciliations to the corresponding U.S.
GAAP financial measures) are: adjusted gross margin, adjusted
selling, general, and administrative expenses, adjusted research
and development expenses, adjusted other operating expense
(income), net, adjusted operating income (loss), adjusted other
income (expense), net, adjusted income (loss) from continuing
operations before income taxes, adjusted income tax expense
(benefit), adjusted income (loss) from continuing operations,
adjusted income (loss) from discontinued operations, adjusted net
income (loss), adjusted net income (loss) attributable to Baxter
stockholders, adjusted diluted earnings per share from continuing
operations, adjusted diluted earnings per share from discontinued
operations and adjusted diluted earnings per share. Those non-GAAP
financial measures exclude the impact of special items. For the
quarter and full year ended December 31, 2023 and 2022, special
items for one or more periods included intangible asset
amortization, business optimization charges, acquisition and
integration costs, separation-related costs, expenses related to
European medical devices regulation, certain legal matters,
goodwill and long-lived asset impairments, non-marketable
investment impairments, a pension curtailment gain, product-related
items, a loss on a product divestiture arrangement, a loss on a
subsidiary liquidation, the reclassification of a cumulative
translation loss to earnings upon the substantial liquidation of a
subsidiary, the gain on the sale of the BPS business and certain
tax matters. These items are excluded because they are highly
variable or unusual and of a size that may substantially impact the
company’s reported operations for a period. Additionally,
intangible asset amortization is excluded as a special item to
facilitate an evaluation of current and past operating performance
and is consistent with how management and the company’s Board of
Directors assess performance.
This release and the accompanying tables also include free cash
flow, a non-GAAP financial measure that Baxter defines as operating
cash flow less capital expenditures. Free cash flow is used by
management and the company’s Board of Directors to evaluate the
cash generated from Baxter’s operating activities each period after
deducting its capital spending.
This release also includes forecasts of certain of the
aforementioned non-GAAP measures on a forward-looking basis as part
of the company’s financial outlook for upcoming periods. Baxter
calculates forward-looking non-GAAP financial measures based on
forecasts that omit certain amounts that would be included in GAAP
financial measures. For instance, forward-looking adjusted diluted
EPS guidance excludes potential charges or gains that would be
reflected as non-GAAP adjustments to earnings. Baxter provides
forward-looking adjusted diluted EPS guidance because it believes
that this measure provides useful information for the reasons noted
above. Baxter has not provided reconciliations of forward-looking
adjusted EPS guidance to forward-looking GAAP EPS guidance because
the company is unable to predict with reasonable certainty the
impact of legal proceedings, future business optimization actions,
separation-related costs, integration-related costs, asset
impairments and unusual gains and losses, and the related amounts
are unavailable without unreasonable efforts (as specified in the
exception provided by Item 10(e)(1)(i)(B) of Regulation S-K). In
addition, Baxter believes that such reconciliations would imply a
degree of precision and certainty that could be confusing to
investors. Such items could have a substantial impact on GAAP
measures of financial performance.
Forward-Looking Statements
This release includes forward-looking statements concerning the
company’s financial results (including the outlook for
first-quarter and full-year 2024) and business development and
regulatory activities. These forward-looking statements are based
on assumptions about many important factors, including the
following, which could cause actual results to differ materially
from those in the forward-looking statements: the company’s ability
to execute and complete strategic initiatives, asset dispositions
and other transactions and development activities, including the
proposed separation of the company’s Kidney Care business, the
company’s plans to simplify its manufacturing footprint and the
timing for such transactions, the ability to satisfy any applicable
conditions and the expected proceeds, consideration and benefits;
failure to accurately forecast or achieve the company’s short- and
long-term financial performance and goals (including with respect
to the company’s strategic initiatives and other actions) and
related impacts on our liquidity; the company’s ability to execute
on its capital allocation plans, including the company’s debt
repayment plans, the timing and amount of any dividends, share
repurchases and divestiture proceeds and the capital structure of
the company to be formed as a result of the proposed spinoff of our
Kidney Care business (and the resulting capital structure for the
remaining company); the company’s ability to successfully integrate
acquisitions; the impact of global economic conditions (including,
among other things, inflation levels, interest rates, financial
market volatility, banking crises, the potential for a recession,
the war in Ukraine, the conflict in the Middle East (including
recent attacks on merchant ships in the Red Sea), tensions between
China and Taiwan, and the potential for escalation of these
conflicts, the related economic sanctions being imposed globally in
response to the conflicts and potential trade wars and global
public health crises, pandemics and epidemics, such as the COVID-19
pandemic, or the anticipation of any of the foregoing, on the
company’s operations and on the company’s employees, customers,
suppliers, and foreign governments in countries in which the
company operates; downgrades to the company’s credit ratings or
ratings outlooks, and the impact on the company’s funding costs and
liquidity; product development risks, including satisfactory
clinical performance and obtaining and maintaining required
regulatory approvals (including as a result of evolving regulatory
requirements or the withdrawal or resubmission of any pending
applications), the ability to manufacture at appropriate scale and
the general unpredictability associated with the product
development cycle; product quality or patient safety issues leading
to product recalls, withdrawals, launch delays, warning letters,
import bans, sanctions, seizures, litigation or declining sales,
including the focus on evaluating product portfolios for the
potential presence or formation of nitrosamines; future actions of,
or failures to act or delays in acting by, FDA, the European
Medicines Agency or any other regulatory body or government
authority (including the SEC, Department of Justice or the Attorney
General of any State) that could delay, limit or suspend product
development, manufacturing or sale or result in seizures, recalls,
injunctions, monetary sanctions or criminal or civil liabilities;
demand and market acceptance risks for, and competitive pressures
related to, new and existing products, challenges with the
company’s ability to accurately predict changing consumer
preferences and future expenditures and inventory levels, and
challenges with the company’s ability to monetize new and existing
products and services, the impact of those products on quality and
patient safety concerns and the need for ongoing training and
support for our products; breaches, including by cyber-attack, data
leakage, unauthorized access or theft, or failures of or
vulnerabilities in, the company’s information technology systems or
products; the continuity, availability and pricing of acceptable
raw materials and component parts, the company’s ability to pass
some or all of these costs to the company’s customers through
recent price increases or otherwise, and the related continuity of
the company’s manufacturing and distribution and those of the
company’s suppliers; inability to create additional production
capacity in a timely manner or the occurrence of other
manufacturing, sterilization or supply difficulties, including as a
result of natural disaster, war, terrorism, global public health
crises and epidemics/pandemics, regulatory actions or otherwise;
the company’s ability to finance and develop new products or
enhancements on commercially acceptable terms or at all; loss of
key employees, the occurrence of labor disruptions (including as a
result of labor disagreements under bargaining agreements or
national trade union agreements or disputes with works councils) or
the inability to attract, develop, retain and engage employees;
failures with respect to the company’s quality, compliance or
ethics programs; future actions of third parties, including
third-party payers and the company’s customers and distributors
(including GPOs and IDNs); changes to legislation and regulation
and other governmental pressures in United States and globally,
including the cost of compliance and potential penalties for
purported noncompliance thereof, including new or amended laws,
rules and regulations as well as the impact of healthcare reform
and its implementation, suspension, repeal, replacement, amendment,
modification and other similar actions undertaken by the United
States or foreign governments, including with respect to pricing,
reimbursement, taxation and rebate policies; the outcome of pending
or future litigation; the impact of competitive products and
pricing, including generic competition, drug reimportation and
disruptive technologies; global regulatory, trade and tax policies,
including with respect to climate change and other sustainability
matters; the ability to protect or enforce the company’s patents or
other proprietary rights (including trademarks, copyrights, trade
secrets and know-how) or where the patents of third parties prevent
or restrict the company’s manufacture, sale or use of affected
products or technology; the impact of any goodwill, intangible
asset or other long-lived asset impairments on the company’s
operating results; fluctuations in foreign exchange and interest
rates; any changes in law concerning the taxation of income
(whether with respect to current or future tax reform); actions by
tax authorities in connection with ongoing tax audits; and other
risks identified in Baxter’s most recent filings on Form 10-K and
Form 10-Q and other SEC filings, all of which are available on
Baxter’s website. Baxter does not undertake to update its
forward-looking statements unless otherwise required by the federal
securities laws.
Baxter, Centrella, Floseal, iExaminer Pro, PanOptic Plus,
PerClot, Progressa+, Recothrom, ReadyConnect, Sharesource, Spot
Vision Screener, SpotConnect, Welch Allyn and Zosyn are trademarks
of Baxter International Inc.
Any other trademarks or product brands appearing herein are the
property of their respective owners.
________________________________
1 Sales growth at constant currency rates
and adjusted diluted EPS are non-GAAP financial measures. See the
“Non-GAAP Financial Measures” section below for information about
the non-GAAP financial measures included in this release and see
the accompanying tables to this press release for reconciliations
of those non-GAAP measures to the corresponding U.S. GAAP
measures.
2 See links to original press releases for
additional product information.
BAXTER INTERNATIONAL
INC.
Consolidated Statements of
Income (Loss)
(unaudited)
(in millions, except per share
and percentage data)
Three Months Ended December
31,
2023
2022
Change
NET SALES
$
3,885
$
3,745
4%
COST OF SALES
2,413
2,357
2%
GROSS MARGIN
1,472
1,388
6%
% of Net Sales
37.9
%
37.1
%
0.8 pts
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES
985
901
9%
% of Net Sales
25.4
%
24.1
%
1.3 pts
RESEARCH AND DEVELOPMENT
EXPENSES
172
154
12%
% of Net Sales
4.4
%
4.1
%
0.3 pts
GOODWILL IMPAIRMENTS
—
27
NM
OTHER OPERATING INCOME, NET
(14
)
16
NM
OPERATING INCOME (LOSS)
329
290
13%
% of Net Sales
8.5
%
7.7
%
0.8 pts
INTEREST EXPENSE, NET
73
117
(38) %
OTHER (INCOME) EXPENSE, NET
18
11
64%
INCOME (LOSS) FROM CONTINUING
OPERATIONS BEFORE INCOME TAXES
238
162
47%
INCOME TAX BENEFIT
165
18
NM
% of Income (Loss) from Continuing
Operations Before Income Taxes
69.3
%
11.1
%
NM
INCOME (LOSS) FROM CONTINUING
OPERATIONS
73
144
(49) %
INCOME FROM DISCONTINUED OPERATIONS,
NET OF TAX
173
41
NM
NET INCOME (LOSS)
246
185
33%
NET INCOME ATTRIBUTABLE TO
NONCONTROLLING INTERESTS
1
4
(75) %
NET INCOME (LOSS) ATTRIBUTABLE TO
BAXTER STOCKHOLDERS
$
245
$
181
35%
INCOME (LOSS) FROM CONTINUING
OPERATIONS PER COMMON SHARE
Basic
$
0.14
$
0.28
(50)%
Diluted
$
0.14
$
0.28
(50)%
INCOME FROM DISCONTINUED OPERATIONS PER
COMMON SHARE
Basic
$
0.34
$
0.08
NM
Diluted
$
0.34
$
0.08
NM
NET INCOME (LOSS) PER COMMON
SHARE
Basic
$
0.48
$
0.36
33%
Diluted
$
0.48
$
0.36
33%
WEIGHTED-AVERAGE NUMBER OF SHARES
OUTSTANDING
Basic
507
504
Diluted
509
507
ADJUSTED OPERATING INCOME (excluding
special items)¹
$
630
$
595
6%
ADJUSTED INCOME FROM CONTINUING
OPERATIONS (excluding special items)¹
$
449
$
399
13%
ADJUSTED INCOME FROM DISCONTINUED
OPERATIONS (excluding special items)1
$
(14
)
$
49
NM
ADJUSTED NET INCOME ATTRIBUTABLE TO
BAXTER STOCKHOLDERS (excluding special items)¹
$
434
$
444
(2)%
ADJUSTED DILUTED EPS FROM CONTINUING
OPERATIONS (excluding special items)¹
$
0.88
$
0.78
13%
ADJUSTED DILUTED EPS FROM DISCONTINUED
OPERATIONS (excluding special items)¹
$
(0.03
)
$
0.10
NM
ADJUSTED DILUTED EPS (excluding special
items)¹
$
0.85
$
0.88
(3)%
1 Refer to page 13 for a description of
the adjustments and a reconciliation to U.S. GAAP measures.
NM - Not Meaningful
BAXTER INTERNATIONAL
INC.
Description of Adjustments and
Reconciliation of U.S. GAAP to Non-GAAP Measures
(unaudited, in
millions)
The company’s U.S. GAAP results for the
three months ended December 31, 2023 included special items which
impacted the U.S. GAAP measures as follows:
Gross Margin
Selling, General and
Administrative Expenses
Other Operating Income, Net
Operating Income (Loss)
Other (Income) Expense, Net
Income (Loss) From Continuing
Operations Before Income Taxes
Income Tax Expense (Benefit)
Income (Loss) From Continuing
Operations
Income From Discontinued
Operations, Net of Tax
Net Income (Loss)
Net Income (Loss) Attributable to
Baxter Stockholders
Diluted Earnings Per Share from
Continuing Operations
Diluted Earnings Per Share from
Discontinued Operations
Diluted Earnings Per Share
Reported
$
1,472
$
985
$
(14
)
$
329
$
18
$
238
$
165
$
73
$
173
$
246
$
245
$
0.14
$
0.34
$
0.48
Reported percent of net sales (or
effective tax rate for income tax expense (benefit))
37.9
%
25.4
%
(0.4
) %
8.5
%
0.5
%
6.1
%
69.3
%
1.9
%
4.5
%
6.3
%
6.3
%
Intangible asset amortization
119
(52
)
—
171
—
171
47
124
—
124
124
0.24
0.00
0.24
Business optimization items1
22
(4
)
—
26
—
26
35
(9
)
(1
)
(10
)
(10
)
(0.02
)
0.00
(0.02
)
Acquisition and integration items2
—
(3
)
5
(2
)
—
(2
)
—
(2
)
—
(2
)
(2
)
0.00
0.00
0.00
Separation-related costs3
7
(95
)
—
102
—
102
29
73
(2
)
71
71
0.14
0.00
0.14
European medical devices regulation4
10
—
—
10
—
10
1
9
—
9
9
0.02
0.00
0.02
Legal matters5
—
(2
)
8
(6
)
—
(6
)
(1
)
(5
)
—
(5
)
(5
)
(0.01
)
0.00
(0.01
)
Long-lived asset impairments6
—
—
—
—
—
—
4
(4
)
—
(4
)
(4
)
(0.01
)
0.00
(0.01
)
Investment impairments7
—
—
—
—
(29
)
29
(5
)
34
—
34
34
0.07
0.00
0.07
Gain on BPS Sale8
—
—
—
—
—
—
—
—
15
15
15
0.00
0.03
0.03
Tax matters12
—
—
—
—
—
—
(156
)
156
(199
)
(43
)
(43
)
0.31
(0.39
)
(0.08
)
Adjusted
$
1,630
$
829
$
(1
)
$
630
$
(11
)
$
568
$
119
$
449
$
(14
)
$
435
$
434
$
0.88
$
(0.03
)
$
0.85
Adjusted percent of net sales (or
effective tax rate for income tax expense (benefit))
42.0
%
21.3
%
0.0
%
16.2
%
(0.3
)%
14.6
%
21.0
%
11.6
%
(0.4
)%
11.2
%
11.2
%
Reported
Adjusted
Income (loss) from continuing
operations
$
73
$
449
Less: Net income attributable to
noncontrolling interests
1
1
Income (loss) from continuing operations
attributable to Baxter stockholders
$
72
$
448
The company’s U.S. GAAP results for the
three months ended December 31, 2022 included special items which
impacted the U.S. GAAP measures as follows:
Gross Margin
Selling, General and
Administrative Expenses
Research and Development
Expenses
Goodwill Impairment
Other Operating Expense, Net
Operating Income (Loss)
Income (Loss) From Continuing
Operations Before Income Taxes
Income Tax Expense (Benefit)
Income (Loss) From Continuing
Operations
Income From Discontinued
Operations
Net Income (Loss)
Net Income (Loss) Attributable to
Baxter Stockholders
Diluted Earnings Per Share from
Continuing Operations
Diluted Earnings Per Share from
Discontinued Operations
Diluted Earnings Per Share
Reported
$
1,388
$
901
$
154
$
27
$
16
$
290
$
162
$
18
$
144
$
41
$
185
$
181
$
0.28
$
0.08
$
0.36
Reported percent of net sales (or
effective tax rate for income tax expense (benefit))
37.1
%
24.1
%
4.1
%
0.7
%
0.4
%
7.7
%
4.3
%
11.1
%
3.8
%
1.1
%
4.9
%
4.8
%
Intangible asset amortization
122
(53
)
—
—
—
175
175
31
144
—
144
144
0.28
0.00
0.28
Business optimization items1
7
(23
)
1
—
—
29
29
8
21
—
21
21
0.04
0.00
0.04
Acquisition and integration items2
(1
)
(27
)
1
—
5
20
20
17
3
—
3
3
0.01
0.00
0.01
Separation-related costs3
—
(7
)
—
—
—
7
7
3
4
5
9
9
0.01
0.01
0.02
European medical devices regulation4
13
—
—
—
—
13
13
4
9
—
9
9
0.02
0.00
0.02
Long-lived asset impairments6
12
—
—
—
—
12
12
5
7
—
7
7
0.01
0.00
0.01
Goodwill impairments9
—
—
—
(27
)
—
27
27
—
27
—
27
27
0.05
0.00
0.05
Product-related items 10
1
—
—
—
—
1
1
—
1
—
1
1
0.00
0.00
0.00
Loss on subsidiary liquidation11
—
—
—
—
(21
)
21
21
4
17
—
17
17
0.03
0.00
0.03
Tax matters12
—
—
—
—
—
—
—
(22
)
22
3
25
25
0.04
0.01
0.05
Adjusted
$
1,542
$
791
$
156
$
—
$
—
$
595
$
467
$
68
$
399
$
49
$
448
$
444
$
0.78
$
0.10
$
0.88
Adjusted percent of net sales (or
effective tax rate for income tax expense)
41.2
%
21.1
%
4.2
%
0.0
%
0.0
%
15.9
%
12.5
%
14.6
%
10.7
%
1.3
%
12.0
%
11.9
%
Reported
Adjusted
Income (loss) from continuing
operations
$
144
$
399
Less: Net income attributable to
noncontrolling interests
4
4
Income (loss) from continuing operations
attributable to Baxter stockholders
$
140
$
395
1
The company’s results in 2023 and 2022
included charges associated with its execution of programs to
optimize its organization and cost structure. In 2023, these
restructuring and other business optimization costs included
actions related to its decision to close one its U.S.-based
manufacturing facilities this year. In 2022, restructuring and
business optimization costs included actions related to its
integration of Hillrom.
2
The company’s results in 2023 and 2022
included acquisition and integration-related items comprised of
Hillrom integration expenses and net gains from changes in the fair
value of contingent consideration liabilities.
3
The company's results in 2023 and 2022
included separation-related costs primarily related to external
advisors supporting its activities to prepare for the proposed
separation of its Kidney Care segment, which are reported in
continuing operations. The company's results in 2023 and 2022 also
included separation-related costs related to the sale of its
BioPharma Solutions (BPS) business, which are reported in
discontinued operations.
4
The company’s results in 2023 and 2022
included incremental costs to comply with the European Union’s
medical device regulations for previously registered products,
which primarily consist of contractor costs and other direct
third-party costs. The company considers the adoption of these
regulations to be a significant one-time regulatory change and
believes that the costs of initial compliance for previously
registered products over the implementation period are not
indicative of its core operating results.
5
The company's results in 2023 included
proceeds received, net of legal fees, from a settlement related to
an intellectual property dispute.
6
The company's results in 2022 included
impairments of developed technology intangible assets.
7
The company's results in 2023 included
impairments of non-marketable investments in several early-stage
companies consisting of noncash impairment write-downs.
8
The company's results in 2023 included
adjustments to its third quarter 2023 gain from the sale of its BPS
business, reported in discontinued operations, related to final
working capital and transaction cost amounts.
9
The company's results in 2022 included
goodwill impairments charges related to a reporting unit acquired
in its December 2021 acquisition of Hillrom.
10
The company's results in 2022 included
charges related to warranty and remediation activities from two
field corrective actions on certain of its infusion pumps.
11
The company's results in 2022 included
costs related to its deconsolidation of a foreign subsidiary,
including the derecognition of the related noncontrolling interest,
upon its liquidation in December 2022 that was completed in
connection with the company's legal entity rationalization
activities.
12
The company's results in 2023 included a
$199 million reallocation of income tax expense between
discontinued operations and continuing operations resulting from
the application of intraperiod tax allocation to the company's
adjusted results during interim periods throughout the year. The
company’s results in 2023 included a $22 million income tax benefit
from an internal reorganization transaction related to the proposed
separation of its Kidney Care segment. The company’s results in
2023 included a $21 million valuation allowance decrease and its
results in 2022 included a $25 million valuation allowance increase
related to its estimated recoverability of a deferred tax asset for
a net asset step-up related to Swiss tax reform legislation enacted
during 2019 that is amortizable as a tax deduction ratably over tax
years 2025 through 2029.
For more information on the company's use
of non-GAAP financial measures, please see the Non-GAAP Financial
Measures section of this press release.
BAXTER INTERNATIONAL
INC.
Consolidated Statements of
Income (Loss)
(unaudited)
(in millions, except per share
and percentage data)
Twelve Months Ended December
31,
2023
2022
Change
NET SALES
$
14,813
$
14,506
2%
COST OF SALES
9,838
9,440
4%
GROSS MARGIN
4,975
5,066
(2)%
% of Net Sales
33.6
%
34.9
%
(1.3 pts)
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES
3,946
3,859
2%
% of Net Sales
26.6
%
26.6
%
(0.0 pts)
RESEARCH AND DEVELOPMENT
EXPENSES
667
602
11%
% of Net Sales
4.5
%
4.2
%
0.3 pts
GOODWILL IMPAIRMENTS
—
2,812
NM
OTHER OPERATING INCOME, NET
(28
)
36
NM
OPERATING INCOME (LOSS)
390
(2,243
)
NM
% of Net Sales
2.6
%
(15.5
)%
18.1 pts
INTEREST EXPENSE, NET
442
395
12%
OTHER (INCOME) EXPENSE, NET
51
12
NM
LOSS FROM CONTINUING OPERATIONS BEFORE
INCOME TAXES
(103
)
(2,650
)
(96)%
INCOME TAX EXPENSE
(34
)
4
NM
% of Income (Loss) from Continuing
Operations Before Income Taxes
33.0
%
(0.2
)%
33.2 pts
LOSS FROM CONTINUING OPERATIONS
(69
)
(2,654
)
(97)%
INCOME FROM DISCONTINUED OPERATIONS,
NET OF TAX
2,732
233
NM
NET INCOME (LOSS)
2,663
(2,421
)
NM
NET INCOME ATTRIBUTABLE TO
NONCONTROLLING INTERESTS
7
12
(42)%
NET INCOME (LOSS) ATTRIBUTABLE TO
BAXTER STOCKHOLDERS
$
2,656
$
(2,433
)
NM
INCOME (LOSS) FROM CONTINUING
OPERATIONS PER COMMON SHARE
Basic
$
(0.15
)
$
(5.29
)
(97)%
Diluted
$
(0.15
)
$
(5.29
)
(97)%
INCOME FROM DISCONTINUED OPERATIONS PER
COMMON SHARE
Basic
$
5.40
$
0.46
NM
Diluted
$
5.40
$
0.46
NM
NET INCOME (LOSS) PER COMMON
SHARE
Basic
$
5.25
$
(4.83
)
NM
Diluted
$
5.25
$
(4.83
)
NM
WEIGHTED-AVERAGE NUMBER OF SHARES
OUTSTANDING
Basic
506
504
Diluted
506
504
ADJUSTED OPERATING INCOME (excluding
special items)¹
$
2,123
$
2,278
(7)%
ADJUSTED INCOME (LOSS) FROM CONTINUING
OPERATIONS (excluding special items)¹
$
1,327
$
1,548
(14)%
ADJUSTED INCOME FROM DISCONTINUED
OPERATIONS (excluding special items)1
$
161
$
236
(32)%
ADJUSTED NET INCOME ATTRIBUTABLE TO
BAXTER STOCKHOLDERS (excluding special items)¹
$
1,481
$
1,772
(16)%
ADJUSTED DILUTED EPS FROM CONTINUING
OPERATIONS (excluding special items)1
$
2.60
$
3.03
(14)%
ADJUSTED DILUTED EPS FROM DISCONTINUED
OPERATIONS (excluding special items)1
$
0.32
$
0.47
(32)%
ADJUSTED DILUTED EPS (excluding special
items)¹
$
2.92
$
3.50
(17)%
1 Refer to page 1 for a description of the
adjustments and a reconciliation to U.S. GAAP measures.
NM - Not Meaningful
BAXTER INTERNATIONAL
INC.
Description of Adjustments and
Reconciliation of U.S. GAAP to Non-GAAP Measures
(unaudited, in
millions)
The company’s U.S. GAAP results for the
twelve months ended December 31, 2023 included special items which
impacted the U.S. GAAP measures as follows:
Gross Margin
Selling, General and
Administrative Expenses
Research and Development
Expenses
Other Operating Income, Net
Operating Income (Loss)
Other (Income) Expense, Net
Income (Loss) From Continuing
Operations Before Income Taxes
Income Tax Expense (Benefit)
Income (Loss) From Continuing
Operations
Income From Discontinued
Operations, Net of Tax
Net Income (Loss)
Net Income (Loss) Attributable to
Baxter Stockholders
Diluted Earnings Per Share From
Continuing Operations
Diluted Earnings Per Share from
Discontinued Operations
Diluted Earnings Per Share
Reported
$
4,975
$
3,946
$
667
$
(28
)
$
390
$
51
$
(103
)
$
(34
)
$
(69
)
$
2,732
$
2,663
$
2,656
$
(0.15
)
$
5.40
$
5.25
Reported percent of net sales (or
effective tax rate for income tax expense (benefit))
33.6
%
26.6
%
4.5
%
(0.2
)%
2.6
%
0.3
%
(0.7
)%
33.0
%
(0.5
)%
18.4
%
18.0
%
17.9
%
Intangible asset amortization
445
(207
)
—
—
652
—
652
153
499
—
499
499
0.98
0.00
0.98
Business optimization items1
349
(173
)
(12
)
—
534
—
534
127
407
—
407
407
0.80
0.00
0.80
Acquisition and integration items2
1
(18
)
—
19
—
—
—
1
(1
)
—
(1
)
(1
)
0.00
0.00
0.00
Separation-related costs3
22
(203
)
—
—
225
—
225
29
196
17
213
213
0.39
0.03
0.42
European medical devices regulation4
48
—
—
—
48
—
48
12
36
—
36
36
0.07
0.00
0.07
Long-lived asset impairments5
267
—
—
—
267
—
267
66
201
—
201
201
0.40
0.00
0.40
Legal matters6
—
(15
)
—
8
7
—
7
2
5
—
5
5
0.01
0.00
0.01
Investment impairments7
—
—
—
—
—
(49
)
49
—
49
—
49
49
0.10
0.00
0.10
Gain on BPS Sale8
—
—
—
—
—
—
—
—
—
(2,588
)
(2,588
)
(2,588
)
0.00
(5.09
)
(5.09
)
Tax matters15
—
—
—
—
—
—
—
(4
)
4
—
4
4
0.01
0.00
0.01
Adjusted
$
6,107
$
3,330
$
655
$
(1
)
$
2,123
$
2
$
1,679
$
352
$
1,327
$
161
$
1,488
$
1,481
$
2.60
$
0.32
$
2.92
Adjusted percent of net sales (or
effective tax rate for income tax expense)
41.2
%
22.5
%
4.4
%
0.0
%
14.3
%
0.0
%
11.3
%
21.0
%
9.0
%
1.1
%
10.0
%
10.0
%
Reported
Adjusted
Income (loss) from continuing
operations
$
(69
)
$
1,327
Less: Net income attributable to
noncontrolling interests
7
7
Income (loss) from continuing operations
attributable to Baxter stockholders
$
(76
)
$
1,320
Weighted-average diluted shares as
reported
506
Effect of dilutive securities that were
anti-dilutive to dilutive EPS as reported
2
Weighted-average diluted shares as
adjusted
508
The company’s U.S. GAAP results for the
twelve months ended December 31, 2022 included special items which
impacted the U.S. GAAP measures as follows:
Gross Margin
Selling, General and
Administrative Expenses
Research and Development
Expenses
Goodwill Impairment
Other Operating Expense, Net
Operating Income (Loss)
Other (Income) Expense, Net
Income (Loss) From Continuing
Operations Before Income Taxes
Income Tax Expense (Benefit)
Income (Loss) From Continuing
Operations
Income From Discontinued
Operations, Net of Tax
Net Income (Loss)
Net Income (Loss) Attributable to
Baxter Stockholders
Diluted Earnings Per Share From
Continuing Operations
Diluted Earnings Per Share From
Discontinued Operations
Diluted Earnings Per Share
Reported
$
5,066
$
3,859
$
602
$
2,812
$
36
$
(2,243
)
$
12
$
(2,650
)
$
4
$
(2,654
)
$
233
$
(2,421
)
$
(2,433
)
$
(5.29
)
$
0.46
$
(4.83
)
Reported percent of net sales (or
effective tax rate for income tax expense (benefit))
34.9
%
26.6
%
4.2
%
19.4
%
0.2
%
(15.5
)%
0.1
%
(18.3
)%
(0.2
)%
(18.3
)%
1.6
%
(16.7
)%
(16.8
)%
Intangible asset amortization
466
(287
)
—
—
—
753
—
753
168
585
—
585
585
1.15
0.00
1.15
Business optimization items1
28
(194
)
(3
)
—
—
225
—
225
60
165
—
165
165
0.33
0.00
0.33
Acquisition and integration items2
170
(82
)
—
—
39
213
—
213
53
160
—
160
160
0.32
0.00
0.32
Separation-related costs3
—
(7
)
—
—
—
7
—
7
3
4
5
9
9
0.01
0.01
0.02
European medical devices regulation4
48
—
—
—
—
48
—
48
12
36
—
36
36
0.07
0.00
0.07
Long-lived asset impairments5
344
—
—
—
—
344
—
344
83
261
—
261
261
0.51
0.00
0.51
Pension curtailment9
—
—
—
—
—
—
11
(11
)
(2
)
(9
)
—
(9
)
(9
)
(0.02
)
0.00
(0.02
)
Product-related items10
44
—
—
—
—
44
—
44
5
39
—
39
39
0.08
0.00
0.08
Loss on product divestiture
arrangement11
—
—
—
—
(54
)
54
—
54
14
40
—
40
40
0.08
0.00
0.08
Goodwill impairments12
—
—
—
(2,812
)
—
2,812
—
2,812
—
2,812
—
2,812
2,812
5.55
0.00
5.55
Loss on subsidiary liquidation13
—
—
—
—
(21
)
21
—
21
4
17
—
17
17
0.03
0.00
0.03
Reclassification of cumulative translation
loss to earnings14
—
—
—
—
—
—
(65
)
65
—
65
—
65
65
0.13
0.00
0.13
Tax matters15
—
—
—
—
—
—
—
—
(27
)
27
(2
)
25
25
0.05
0.00
0.05
Adjusted
$
6,166
$
3,289
$
599
$
—
$
—
$
2,278
$
(42
)
$
1,925
$
377
$
1,548
$
236
$
1,784
$
1,772
$
3.03
$
0.47
$
3.50
Adjusted percent of net sales (or
effective tax rate for income tax expense)
42.5
%
22.7
%
4.1
%
0.0
%
0.0
%
15.7
%
(0.3
)%
13.3
%
19.6
%
10.7
%
1.6
%
12.3
%
12.2
%
Reported
Adjusted
Income (loss) from continuing
operations
$
(2,654
)
$
1,548
Less: Net income attributable to
noncontrolling interests
12
12
Income (loss) from continuing operations
attributable to Baxter stockholders
$
(2,666
)
$
1,536
Weighted-average diluted shares as
reported
504
Effect of dilutive securities that were
anti-dilutive to dilutive EPS as reported
3
Weighted-average diluted shares as
adjusted
507
1
The company’s results of continuing
operations in 2023 and 2022 included charges associated with its
execution of programs to optimize its organization and cost
structure. In 2023, these restructuring and other business
optimization costs included actions related to its implementation
of a new operating model intended to simplify and streamline its
operations and better align its manufacturing and supply chain to
its commercial activities, and its decision to close one its
U.S.-based manufacturing facilities this year, which resulted in a
$243 million noncash impairment of property, plant and equipment in
the first half of 2023. In 2022, restructuring and business
optimization costs included actions related to its integration of
Hillrom.
2
The company’s results in 2023 and 2022
included acquisition and integration-related items comprised of
Hillrom acquisition and integration expenses, including $159
million of incremental cost of sales in 2022 from fair value
step-ups on acquired Hillrom inventory, and gains from changes in
the fair value of contingent consideration liabilities.
3
The company's results in 2023 and 2022
included separation-related costs primarily related to external
advisors supporting its activities to prepare for the proposed
separation of its Kidney Care segment, which are reported in
continuing operations. The company's results in 2023 and 2022 also
included separation-related costs related to the sale of its
BioPharma Solutions (BPS) business, which are reported as in
discontinued operations.
4
The company’s results in 2023 and 2022
included incremental costs to comply with the European Union’s
medical device regulations for previously registered products,
which primarily consist of contractor costs and other direct
third-party costs. The company considers the adoption of these
regulations to be a significant one-time regulatory change and
believes that the costs of initial compliance for previously
registered products over the implementation period are not
indicative of its core operating results
5
The company's results in 2023 included
long-lived asset impairment charges of $267 million related to the
Hemodialysis business within its Kidney Care segment. The company's
results in 2022 included $344 million of long-lived asset
impairments, including $332 million of impairments related to
indefinite-lived intangible assets acquired in our December 2021
acquisition of Hillrom. Long-lived asset impairments presented
within this special item do not include impairments of long-lived
assets related to restructuring actions, which are presented within
the business optimization special item described in footnote 1
above.
6
The company's results in 2023 included
costs, including associated legal fees, related to matters
involving alleged violations of the False Claims Act related to a
now-discontinued legacy Hillrom sales line and alleged injury from
environmental exposure, partially offset by proceeds received, net
of legal fees, from a settlement related to an intellectual
property dispute.
7
The company's results in 2023 included
impairments of non-marketable investments in several early stage
companies, partially offset by a gain from the sale of an
investment.
8
The company's results in 2023 included a
$2.59 billion gain, net of tax, from the sale of its BPS
business.
9
The company's results in 2022 included a
curtailment gain on an announced change for active non-bargaining
participants in its U.S. Hillrom pension plan.
10
The company's results in 2022 included
charges related to warranty and remediation activities from two
field corrective actions on certain of its infusion pumps.
11
The company's results in 2022 included a
loss related to an arrangement to divest certain product rights for
an amount that is less than the cost of those product rights, which
was triggered by U.S. and European Union regulatory approvals of
the related products.
12
The company's results in 2022 included
goodwill impairment charges related to reporting units acquired in
its December 2021 acquisition of Hillrom.
13
The company's results in 2022 included
costs related to its deconsolidation of a foreign subsidiary,
including the derecognition of the related noncontrolling interest,
upon its liquidation in December 2022 that was completed in
connection with the company's legal entity rationalization
activities.
14
The company's results in 2022 included a
charge related to cumulative translation adjustments reclassified
from accumulated other comprehensive income (loss) as a result of
the substantial liquidation of its operations in Argentina.
15
The company's results in 2023 included a
$5 million net income tax benefit from internal reorganization
transactions, primarily related to the proposed separation of its
Kidney Care segment. The company’s results in 2023 and 2022
included valuation allowance increases of $9 million and $25
million, respectively, related to its estimated recoverability of a
deferred tax asset for a net asset step-up related to Swiss tax
reform legislation enacted during 2019 that is amortizable as a tax
deduction ratably over tax years 2025 through 2029.
For more information on the company's use
of non-GAAP financial measures, please see the Non-GAAP Financial
Measures section of this press release.
BAXTER INTERNATIONAL INC. Sales by
Operating Segment (unaudited) ($ in millions)
The Medical Products and 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 Healthcare Systems and
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 Pharmaceuticals segment includes sales of
specialty injectable pharmaceuticals, inhaled anesthesia and drug
compounding. The Kidney Care segment includes sales of chronic and
acute dialysis therapies and services, including peritoneal
dialysis, hemodialysis, continuous renal replacement therapies
(CRRT) and other organ support therapies. Other sales not allocated
to a segment primarily include sales of products and services
provided directly through certain of our manufacturing
facilities.
Three Months Ended December
31,
Twelve Months Ended December
31,
2023
2022
% Growth @ Actual
Rates
% Growth @ Constant
Rates
2023
2022
% Growth @ Actual
Rates
% Growth @ Constant
Rates
Infusion Therapies and Technologies
$
1,042
$
988
5%
4%
$
3,960
$
3,817
4%
4%
Advanced Surgery
278
260
7%
6%
1,051
998
5%
6%
Medical Products and Therapies
1,320
1,248
6%
4%
5,011
4,815
4%
4%
Care and Connectivity Solutions
492
441
12%
11%
1,800
1,791
1%
1%
Front Line Care
303
293
3%
2%
1,213
1,148
6%
6%
Healthcare Systems and Technologies
795
734
8%
7%
3,013
2,939
3%
3%
Injectables and Anesthesia
359
344
4%
5%
1,347
1,305
3%
4%
Drug Compounding
237
208
14%
11%
902
821
10%
12%
Pharmaceuticals
596
552
8%
7%
2,249
2,126
6%
7%
Chronic Therapies
950
970
(2)
(3
3,683
3,714
(1)
0%
Acute Therapies
206
193
7%
6%
770
735
5%
6%
Kidney Care
1,156
1,163
(1)
(1)
4,453
4,449
0%
1%
Other
18
48
(63)%
(58)%
87
177
(51)%
(51)%
Total - Continuing Operations
$
3,885
$
3,745
4%
3%
$
14,813
$
14,506
2%
3%
In connection with our segment change in the third quarter of
2023, we reclassified $16 million of sales from the first half of
2023 and $34 million of sales for the year ended December 31, 2022,
from Chronic Therapies to Acute Therapies to conform to the current
period presentation. Additionally, in connection with the
reclassification of our BPS business to discontinued operations
during the second quarter of 2023, we reclassified $2 million of
contract manufacturing revenues from the first quarter of 2023 and
$37 million for the year ended December 31, 2022 from BPS to Other
(within continuing operations), as the related manufacturing
facility was not part of that divestiture transaction.
Constant currency growth is a non-GAAP measure. For more
information on the company’s use of non-GAAP financial measures,
please see the Non-GAAP Financial Measures section of this press
release.
BAXTER INTERNATIONAL
INC.
Segment Operating
Income
(unaudited)
($ in millions)
Three months ended December
31,
Twelve months ended December
31,
(in millions)
2023
2022
2023
2022
Medical Products and Therapies
$
266
$
259
$
972
$
962
% of Segment Net Sales
20.2
%
20.8
%
19.4
%
20.0
%
Healthcare Systems and Technologies
156
127
483
494
% of Segment Net Sales
19.6
%
17.3
%
16.0
%
16.8
%
Pharmaceuticals
117
96
401
391
% of Segment Net Sales
19.6
%
17.4
%
17.8
%
18.4
%
Kidney Care
92
101
300
408
% of Segment Net Sales
8.0
%
8.7
%
6.7
%
9.2
%
Other
(1
)
25
18
77
Total
630
608
2,174
2,332
Unallocated corporate costs
—
(13
)
(51
)
(54
)
Intangible asset amortization expense
(171
)
(175
)
(652
)
(753
)
Business optimization items
(26
)
(29
)
(534
)
(225
)
Acquisition and integration items
2
(20
)
—
(213
)
Separation-related costs
(102
)
(7
)
(225
)
(7
)
European medical devices regulation
(10
)
(13
)
(48
)
(48
)
Product-related items
—
(1
)
—
(44
)
Legal matters
6
—
(7
)
—
Loss on product divestiture
arrangement
—
—
—
(54
)
Long-lived asset impairments
—
(12
)
(267
)
(344
)
Goodwill impairments
—
(27
)
—
(2,812
)
Loss on subsidiary liquidation
—
(21
)
—
(21
)
Total operating income (loss)
329
290
390
(2,243
)
Interest expense, net
73
117
442
395
Other (income) expense, net
18
11
51
12
Loss from continuing operations before
income taxes
$
238
$
162
$
(103
)
$
(2,650
)
BAXTER INTERNATIONAL
INC.
Operating Segment Sales by
U.S. and International
(unaudited)
($ in millions)
Three Months Ended December
31,
2023
2022
% Growth
U.S.
International
Total
U.S.
International
Total
U.S.
International
Total
Infusion Therapies and Technologies
$
573
$
469
$
1,042
$
569
$
419
$
988
1%
12%
5%
Advanced Surgery
149
129
278
146
114
260
2%
13%
7%
Medical Products and Therapies
722
598
1,320
715
533
1,248
1%
12%
6%
Care and Connectivity Solutions
337
155
492
304
137
441
11%
13%
12%
Front Line Care
223
80
303
222
71
293
0%
13%
3%
Healthcare Systems and Technologies
560
235
795
526
208
734
6%
13%
8%
Injectables and Anesthesia
209
150
359
188
156
344
11%
(4)%
4%
Drug Compounding
—
237
237
—
208
208
0%
14%
14%
Pharmaceuticals
209
387
596
188
364
552
11%
6%
8%
Chronic Therapies
235
715
950
248
722
970
(5)%
(1)%
(2)%
Acute Therapies
77
129
206
69
124
193
12%
4%
7%
Kidney Care
312
844
1,156
317
846
1,163
(2)%
(0)%
(1)%
Other
14
4
18
39
9
48
(64)%
(56)%
(63)%
Total - Continuing Operations
$
1,817
$
2,068
$
3,885
$
1,785
$
1,960
$
3,745
2%
6%
4%
BAXTER INTERNATIONAL
INC.
Operating Segment Sales by
U.S. and International
(unaudited)
($ in millions)
Twelve Months Ended December
31,
2023
2022
% Growth
U.S.
International
Total
U.S.
International
Total
U.S.
International
Total
Infusion Therapies and Technologies
$
2,227
$
1,733
$
3,960
$
2,241
$
1,576
$
3,817
(1)%
10%
4%
Advanced Surgery
582
469
1,051
574
424
998
1%
11%
5%
Medical Products and Therapies
2,809
2,202
5,011
2,815
2,000
4,815
(0)%
10%
4%
Care and Connectivity Solutions
1,263
537
1,800
1,295
496
1,791
(2)%
8%
1%
Front Line Care
905
308
1,213
840
308
1,148
8%
0%
6%
Healthcare Systems and Technologies
2,168
845
3,013
2,135
804
2,939
2%
5%
3%
Injectables and Anesthesia
759
588
1,347
682
623
1,305
11%
(6)
3%
Drug Compounding
—
902
902
—
821
821
0%
10%
10%
Pharmaceuticals
759
1,490
2,249
682
1,444
2,126
11%
3%
6%
Chronic Therapies
927
2,756
3,683
923
2,791
3,714
0%
(1)%
(1)
Acute Therapies
271
499
770
263
472
735
3%
6%
5%
Kidney Care
1,198
3,255
4,453
1,186
3,263
4,449
1%
(0)%
0%
Other
66
21
87
137
40
177
(52)%
(48)%
(51)%
Total - Continuing Operations
$
7,000
$
7,813
$
14,813
$
6,955
$
7,551
$
14,506
1%
3%
2%
BAXTER INTERNATIONAL
INC.
Reconciliation of Non-GAAP
Financial Measure
Operating Cash Flow to Free
Cash Flow
(unaudited)
($ in millions)
Twelve Months Ended December
31,
2023
2022
Cash flows from operations – continuing
operations
$
1,702
$
1,031
Cash flows from investing activities -
continuing operations
(672
)
(872
)
Cash flows from financing activities -
continuing operations
(3,489
)
(1,438
)
Cash flows from operations - continuing
operations
$
1,702
$
1,031
Capital expenditures - continuing
operations
(692
)
(620
)
Free cash flow - continuing
operations
$
1,010
$
411
Twelve Months Ended December
31,
2023
2022
Cash flows from operations – discontinued
operations
$
24
180
Cash flows from investing activities -
discontinued operations
3,885
(59
)
Cash flows from operations - discontinued
operations
$
24
$
180
Capital expenditures - discontinued
operations
(27
)
(59
)
Free cash flow - discontinued
operations
$
(3
)
$
121
Twelve Months Ended December
31,
2023
2022
Cash flows from operations – Total
Baxter
$
1,726
$
1,211
Cash flows from investing activities -
Total Baxter
3,213
(931
)
Cash flows from financing activities -
Total Baxter
(3,489
)
(1,438
)
Cash flows from operations - Total
Baxter
$
1,726
$
1,211
Capital expenditures - Total Baxter
(719
)
(679
)
Free cash flow - Total Baxter
$
1,007
$
532
Free cash flow is a non-GAAP measure. For
more information on the company’s use of non-GAAP financial
measures, please see the Non-GAAP Financial Measures section of
this press release.
BAXTER INTERNATIONAL
INC.
Reconciliation of Non-GAAP
Financial Measure
Change in Net Sales Growth As
Reported to Constant Currency Sales Growth
From The Three Months Ended
December 31, 2022 to The Three Months Ended December 31,
2023
(unaudited)
Net Sales Growth
As Reported
FX
Constant Currency Sales
Growth*
Infusion Therapies and Technologies
5%
(1)%
4%
Advanced Surgery
7%
(1)%
6%
Medical Products and Therapies
6%
(2)%
4%
Care and Connectivity Solutions
12%
(1)%
11%
Front Line Care
3%
(1)%
2%
Healthcare Systems and
Technologies
8%
(1)%
7%
Injectables and Anesthesia
4%
1%
5%
Drug Compounding
14%
(3)%
11%
Pharmaceuticals
8%
(1)%
7%
Chronic Therapies
(2)%
(1)%
(3)%
Acute Therapies
7%
(1)%
6%
Kidney Care
(1)%
0%
(1)%
Other
(63)%
5%
(58)%
Total - Continuing Operations
4 %
(1)%
3%
*Totals may not add across due to
rounding
Constant currency sales growth is a
non-GAAP measure. For more information on the company’s use of
non-GAAP financial measures, please see the Non-GAAP Financial
Measures section of this press release.
BAXTER INTERNATIONAL
INC.
Reconciliation of Non-GAAP
Financial Measure
Change in Net Sales Growth As
Reported to Constant Currency Sales Growth
From The Twelve Months Ended
December 31, 2022 to The Twelve Months Ended December 31,
2023
(unaudited)
Net Sales Growth
As Reported
FX
Constant Currency Sales
Growth*
Infusion Therapies and Technologies
4%
0%
4%
Advanced Surgery
5%
1%
6%
Medical Products and Therapies
4%
0%
4%
Care and Connectivity Solutions
1%
0%
1%
Front Line Care
6%
0%
6%
Healthcare Systems and
Technologies
3%
0%
3%
Injectables and Anesthesia
3%
1%
4%
Drug Compounding
10%
2%
12%
Pharmaceuticals
6%
1%
7%
Chronic Therapies
(1)%
1%
0%
Acute Therapies
5%
1%
6%
Kidney Care
0%
1%
1%
Other
(51)%
0%
(51)%
Total - Continuing Operations
2%
1%
3%
*Totals may not add across due to
rounding
Constant currency sales growth is a
non-GAAP measure. For more information on the company’s use of
non-GAAP financial measures, please see the Non-GAAP Financial
Measures section of this press release.
BAXTER INTERNATIONAL
INC.
Projected First Quarter and
Full Year 2024 U.S. GAAP Sales Growth to Projected Constant
Currency Sales Growth and Projected First Quarter and Full Year
2024 Adjusted Earnings Per Share
(unaudited)
Sales Growth Guidance
Q1 2024*
FY 2024*
Sales growth - U.S. GAAP
~ 1%
~ 2%
Foreign Exchange
< 50 bps
~ 0%
Sales growth - Constant currency
1% - 2%
~ 2%
Adjusted Earnings Per Share
Guidance
Q1 2024
FY 2024
Adjusted diluted EPS
$0.59 - $0.62
$2.85 - $2.95
*Totals may not foot due to rounding
Baxter calculates forward-looking non-GAAP financial measures
based on forecasts that omit certain amounts that would be included
in GAAP financial measures. For instance, forward-looking adjusted
diluted EPS guidance excludes potential charges or gains that would
be reflected as non-GAAP adjustments to earnings. Baxter provides
forward-looking adjusted diluted EPS guidance because it believes
that this measure provides useful information for the reasons noted
in the accompanying release. Baxter has not provided
reconciliations of forward-looking adjusted EPS guidance to
forward-looking GAAP EPS guidance because the company is unable to
predict with reasonable certainty the impact of legal proceedings,
future business optimization actions, separation-related costs,
integration-related costs, asset impairments and unusual gains and
losses, and the related amounts are unavailable without
unreasonable efforts (as specified in the exception provided by
Item 10(e)(1)(i)(B) of Regulation S-K). In addition, Baxter
believes that such reconciliations would imply a degree of
precision and certainty that could be confusing to investors. Such
items could have a substantial impact on GAAP measures of financial
performance.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240206320749/en/
Media Contact Andrea Johnson, (224) 948-5353
media@baxter.com
Investor Contact Clare Trachtman, (224) 948-3020
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