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Market ClerkRecap
Sat Oct 24 · markets closed6 signals on Oct 2394 insider buys this week · $48.3MCIRO short report next: Oct 31The week ahead

BAX

BAXTER INTERNATIONAL INC
NYSE · HEALTH CARE · SURGICAL & MEDICAL INSTRUMENTS & APPARATUS
25.30
−0.35 −1.36%
USD · close Oct 23
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MKT CAP $13.1BP/E —DIV YIELD 0.79%FCF YIELD —REV TTM $11.5B +5.4%NET INCOME −$1.1BNET DEBT $7.3B52W 15.80 – 28.35SEC XBRL · TTM TO Invalid Date

How BAX rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025
Text kept
30%
of sentences unchanged
Added
591
new sentences
Dropped
682
sentences removed
Length
−5,116
words, now 48,833

New in FY2025

  • NON-GAAP FINANCIAL MEASURES Our presentation of percentage changes in net sales at operational sales growth excludes the impact of the Kidney Care Manufacturing and Supply Agreement (Kidney Care MSA) sales not reflected in reportable segments, reflects the previously announced exit of IV solutions in China in our Infusion Therapies & Technologies division, in our Medical Products & Therapies reportable segment, and is calculated at constant currency rates.
  • Constant currency rates are computed using current period local currency sales at the prior period's foreign exchange rates.
  • Operational sales growth is a non-GAAP financial measure.
  • The measure provides information about growth (or declines) in our net sales as if the Kidney Care MSA and the exit of IV solutions in China had no impact on our sales and foreign currency exchange rates had not changed between the prior period and the current period.
  • We believe that the non-GAAP measure of percent change in net sales at operational growth, when used in conjunction with the U.S.
  • 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.
  • For the year ended December 31, 2025, the Kidney Care MSA sales favorably impacted sales growth by 3%.
  • The previously announced exit of IV solutions in China and foreign currency rates were not meaningful.
  • Percent change years ended December 31 (in millions) 2025 2024 At actual currency rates At operational sales growth 1 Infusion Therapies & Technologies $ 4,101 $ 4,103 (0) % 1 % Advanced Surgery 1,198 1,104 9 % 8 % Total Medical Product & Therapies net sales $ 5,299 $ 5,207 2 % 2 % 1 Percent change in net sales at operational sales growth is a non-GAAP financial measure.
  • Medical Product & Therapies segment net sales increased 2% for the year ended December 31, 2025, 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.
  • Sales performance in 2025 was primarily driven by lower sales as a result of the ship and installation hold on Novum LVP and lower demand in our IV Solutions business in the U.S. as customers continued fluid conservation practices embedded with clinical practice changes.
  • This decline was partially offset by one-time pricing benefits and price increases in certain products globally.
  • The previously announced exit of IV solutions in China adversely impacted sales growth by 1% for the year ended December 31, 2025, as compared to the prior year period.
  • As previously discussed in "Factors Affecting our Results of Operations", we elected to temporarily stop distributing and installing the Novum LVP in the U.S. and Canada, except in the case of medical necessity.
  • The timing of the release of the ship and installation hold remains uncertain.
  • As a result, we expect no meaningful sales of Novum LVP while these holds are in effect.
  • Our Spectrum IQ large volume pump remains available as an alternative option for customers with Novum LVPs.
  • Advanced Surgery net sales increased 9% for the year ended December 31, 2025, as compared to the prior year period, driven by growth in hemostats and sealants and was primarily attributable to increased sales volume globally.
  • Foreign currency exchange rates favorably impacted net sales by 1% 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 operating room integration technologies, precision positioning devices and other accessories.
  • 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.
  • Healthcare Systems & Technologies segment net sales increased 4% for the year ended December 31, 2025, as compared to the prior year period.
  • Care and Connectivity Solutions net sales increased 5% for the year ended December 31, 2025, driven by increased volume associated with increased capital spending by customers in the U.S. for both patient support systems and surgical solutions product categories, as compared to the prior year periods, as well as higher installations of our care communications products.
  • Front Line Care net sales increased 2% for the year ended December 31, 2025, as compared to the prior year period, primarily driven by growth in our cardiology products partially offset by a strategic product exit within our respiratory health products business.
  • 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.
  • Pharmaceuticals segment net sales increased 3% for the year ended December 31, 2025, as compared to the prior year period.
  • Injectables and Anesthesia net sales decreased 2% for the year ended December 31, 2025, as compared to the prior year period, primarily driven by pricing competition and lower demand in specialty injectables, partially offset by growth in inhaled anesthesia in certain international markets.
  • 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.
  • Other During the years ended December 31, 2025 and 2024, we earned $381 million and $67 million, respectively, of revenues that were not attributable to our reportable segments.
  • In the current year period, Other sales primarily represent revenue recognized under the Kidney Care MSA, entered into upon the sale of our Kidney Care business in January 2025, and to a lesser extent, revenues earned by certain of our manufacturing facilities from contract manufacturing activities.
  • In the prior year period, Other sales primarily represented revenues earned by certain of our manufacturing facilities from contract manufacturing activities.
  • GAAP measures to remove the impact of special items is a non-GAAP presentation.
  • 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.
  • Our results in 2024 included an indefinite-lived asset impairment charge of $50 million to reduce the carrying amount of an IPR&D asset to its fair value.
  • Refer to Note 4 in Item 8 of this Annual Report on Form 10-K for further information regarding the impairments. 2 Our results in 2025 and 2024 included business optimization charges of $178 million and $162 million, respectively.
  • In 2025, these restructuring and business optimization costs primarily related to our initiative to reduce our cost structure following the sale of our former Kidney Care segment and the exit of a product line at one our manufacturing 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.
  • Refer to Note 11 in Item 8 of this Annual Report on Form 10-K for further information regarding these charges and related liabilities. 3 Our results in 2025 included charges $113 million primarily related to inventory and contract asset write-downs and estimates of warranty and remediation activities from field corrective actions across our infusion pump category.
  • Our results in 2024 included charges of $15 million, comprised of (i) $12 million related to warranty and remediation activities arising from field corrective actions on Healthcare Systems & Technologies products and (ii) $3 million related to a revised estimate of warranty and remediation activities arising from a field corrective action on certain of our infusion pumps initially recorded in 2022. 4 Our results in 2025 and 2024 included $32 million and $23 million, respectively, of integration costs which primarily reflected third-party consulting costs related to our ongoing integration of Hill-Rom Holdings Inc.

and 551 more.

Gone since FY2024

  • RECENT BUSINESS COMBINATIONS AND ASSET ACQUISITIONS Zosyn On March 22, 2022, we entered into an agreement with a subsidiary of Pfizer Inc. to acquire the rights to Zosyn, a premixed frozen piperacillin-tazobactam product, in the U.S. and Canada.
  • Zosyn is used for the treatment of intra-abdominal infections, nosocomial pneumonia, skin and skin structure infections, female pelvic infections and community-acquired pneumonia.
  • Under the terms of the acquisition, we paid the acquisition price of $ 122 million and received specified intellectual property, including patent rights, in the first quarter of 2022 and received additional intellectual property, including the product rights to Zosyn, in the first quarter of 2023.
  • Under the arrangement, we received profit sharing payments from sales of Zosyn until the product rights transferred to us in March 2023.
  • Refer to Note 3 in Item 8 of this Annual Report on Form 10-K for additional information regarding our acquisition of the rights to Zosyn.
  • In 2024, 2023 and 2022 our Healthcare Systems & Technologies segment (formerly referred to as our Hillrom segment) generated net sales of $2.95 billion, $3.01 billion, and $2.94 billion, respectively.
  • During 2024, we recorded a $425 million goodwill impairment related to our Front Line Care reporting unit within our Healthcare Systems & Technologies segment.
  • During 2022, we also recognized $2.81 billion of goodwill impairments and $332 million of indefinite-lived intangible asset impairments related to goodwill and trade name intangible assets that arose from the Hillrom acquisition.
  • See Notes 3, 5 and 18 in Item 8 of this Annual Report on Form 10-K for additional information about the Hillrom acquisition, goodwill and intangible asset impairments, and our Healthcare Systems & Technologies segment results, respectively.
  • NON-GAAP FINANCIAL MEASURES Our presentation of percentage changes in net sales at constant currency rates, which is computed using current period local currency sales at the prior period’s foreign exchange rates, is a non-GAAP financial measure.
  • This measure provides information about growth (or declines) in our net sales as if foreign currency exchange rates had not changed between the prior period and the current period.
  • We believe that the non-GAAP measure of percent change in net sales at constant currency rates, when used in conjunction with the U.S.
  • 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.
  • As set forth above, foreign currency had no material impact on net sales during the year ended December 31, 2024, as compared to the prior year period, primarily due to the strengthening of the U.S.
  • Dollar relative to the Turkish Lira, Japanese Yen, Brazilian Real, Mexican Peso, and the Canadian Dollar, offset by the weakening of the U.S.
  • Dollar relative to the British Pound and Colombian Peso.
  • Foreign currency had no material impact on net sales during the year ended December 31, 2023, as compared to the prior year period, primarily due to the strengthening of the U.S.
  • Dollar relative to the Euro, Turkish Lira, Australian Dollar, Japanese Yen and Chinese Renminbi offset by the weakening of the U.S.
  • Dollar relative to the Mexican Peso and Brazilian Real.
  • Percent change years ended December 31 (in millions) 2024 2023 At actual currency rates At constant currency rates 1 Infusion Therapies & Technologies $ 4,103 $ 3,960 4 % 4 % Advanced Surgery 1,104 1,051 5 % 6 % Total Medical Product & Therapies net sales $ 5,207 $ 5,011 4 % 5 % 1 Percent change in net sales at constant currency rates is a non-GAAP financial measure.
  • Medical Product & Therapies segment net sales increased 4% for the year ended December 31, 2024, as compared to the prior year period.
  • Infusion Therapies & Technologies net sales increased 4% for the year ended December 31, 2024, as compared to the prior year period.
  • Sales performance in 2024 primarily reflected growth in Infusion Systems as a result of sales of our Novum IQ large volume infusion and syringe pump in the U.S., and sales of Nutrition product offerings, which was attributable to both pricing initiatives and increased sales volume.
  • In September 2024, Hurricane Helene, which brought significant rain and extensive flooding to Western North Carolina, caused damage to certain of our assets at our North Cove facility in Marion, N.C. and disrupted operations at that facility.
  • This facility, which manufactures IV Solutions primarily for the U.S. market, was not fully operational for most of the fourth quarter.
  • As a consequence, Hurricane Helene had an estimated $110 million adverse impact on sales, which offset price and underlying volume gains during the year.
  • Advanced Surgery net sales increased 5% for the year ended December 31, 2024, as compared to the prior year period, driven by growth in hemostats and sealants and was primarily attributable to increased sales volume.
  • Foreign currency exchange rates adversely impacted net sales by 1% for the year ended December 31, 2024, as compared to the prior year period.
  • Percent change years ended December 31 (in millions) 2023 2022 At actual currency rates At constant currency rates 1 Infusion Therapies & Technologies $ 3,960 $ 3,817 4 % 4 % Advanced Surgery 1,051 998 5 % 6 % Total Medical Product & Therapies net sales $ 5,011 $ 4,815 4 % 4 % 1 Percent change in net sales at constant currency rates is a non-GAAP financial measure.
  • Medical Product & Therapies segment net sales increased 4% for the year ended December 31, 2023, as compared to the prior year period.
  • Infusion Therapies & Technologies net sales increased 4% for the year ended December 31, 2023, as compared to the prior year period.
  • Sales performance in 2023 reflected strong demand for our infusion systems and administration sets, as well as growth in IV solutions and international nutrition compounding, partially offset by lower sales of parenteral nutrition products in the U.S. as compared to the prior year.
  • Advanced Surgery net sales increased 5% for the year ended December 31, 2023, as compared to the prior year period, driven by continued recovery in surgical procedures, partially offset by temporary supply constraints, the exit of a product distribution arrangement and a comparison against prior year periods that benefited from competitor supply constraints.
  • Foreign currency exchange rates adversely impacted net sales by 1% for the year ended December 31, 2023, 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.
  • 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.
  • Healthcare Systems & Technologies segment net sales decreased 2% for the year ended December 31, 2024, as compared to the prior year period.
  • Care and Connectivity Solutions net sales increased 1% for the year ended December 31, 2024, driven by increased order volume associated with capital spending in the U.S. as compared to the prior year, partially offset by declines in care communication products driven by the shifting of installations to future periods and lower sales outside of the U.S.
  • Front Line Care net sales decreased 6% for the year ended December 31, 2024, as compared to the prior year period, primarily driven by a backlog reduction in the prior year period which increased sales in the prior year, reduced demand in the primary care market, lower government orders, certain product exits and select supply constraints impacting product availability.
  • These declines were partially offset by growth in our cardiology products.

and 642 more.

Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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