Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2019 | Feb. 29, 2020 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2019 | |
Document Transition Report | false | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Entity Registrant Name | BAXTER INTERNATIONAL INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Central Index Key | 0000010456 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Current Reporting Status | Yes | |
Entity Shell Company | false | |
Entity File Number | 1-4448 | |
Entity Tax Identification Number | 36-0781620 | |
Entity Address, Address Line One | One Baxter Parkway, | |
Entity Address, City or Town | Deerfield, | |
Entity Address, State or Province | IL | |
Entity Address, Postal Zip Code | 60015 | |
City Area Code | 224. | |
Local Phone Number | 948.2000 | |
Entity Common Stock, Shares Outstanding | 507,263,731 | |
Entity Interactive Data Current | Yes | |
Current Fiscal Year End Date | --12-31 | |
CHICAGO STOCK EXCHANGE, INC | ||
Document Information [Line Items] | ||
Security Exchange Name | CHX | |
Common Stock, $1.00 per Value | NEW YORK STOCK EXCHANGE, INC. | ||
Document Information [Line Items] | ||
Trading Symbol | BAX (NYSE) | |
Title of 12(b) Security | Common Stock, $1.00 par value | |
Security Exchange Name | NYSE | |
Common Stock, $1.00 per Value | CHICAGO STOCK EXCHANGE, INC | ||
Document Information [Line Items] | ||
Trading Symbol | BAX (NYSE) | |
Title of 12(b) Security | Common Stock, $1.00 par value | |
0.4% Global Notes due 2024 | NEW YORK STOCK EXCHANGE, INC. | ||
Document Information [Line Items] | ||
Trading Symbol | BAX 24 | |
Title of 12(b) Security | 0.4% Global Notes due 2024 | |
Security Exchange Name | NYSE | |
1.3% Global Notes due 2025 | NEW YORK STOCK EXCHANGE, INC. | ||
Document Information [Line Items] | ||
Trading Symbol | BAX 25 | |
Title of 12(b) Security | 1.3% Global Notes due 2025 | |
Security Exchange Name | NYSE | |
1.3% Global Notes due 2029 | NEW YORK STOCK EXCHANGE, INC. | ||
Document Information [Line Items] | ||
Trading Symbol | BAX 29 | |
Title of 12(b) Security | 1.3% Global Notes due 2029 | |
Security Exchange Name | NYSE |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (unaudited) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 3,009 | $ 1,838 |
Accounts receivable, net | 1,814 | 1,840 |
Inventories | 1,715 | 1,667 |
Prepaid expenses and other current assets | 672 | 614 |
Total current assets | 7,210 | 5,959 |
Property, plant and equipment, net | 4,406 | 4,530 |
Goodwill | 2,847 | 3,002 |
Other intangible assets, net | 1,365 | 1,410 |
Operating lease right-of-use assets | 589 | |
Other non-current assets | 882 | 819 |
Total assets | 17,299 | 15,720 |
Current liabilities: | ||
Short-term debt | 0 | 2 |
Current maturities of long-term debt and finance lease obligations | 2 | 2 |
Accounts payable and accrued liabilities | 2,609 | 2,810 |
Total current liabilities | 2,611 | 2,814 |
Long-term debt and finance lease obligations | 5,063 | 3,481 |
Operating lease liabilities | 494 | |
Other non-current liabilities | 1,514 | 1,559 |
Total liabilities | 9,682 | 7,854 |
Commitments and contingencies | ||
Equity: | ||
Common stock, $1 par value, authorized 2,000,000,000 shares, issued 683,494,944 shares in 2019 and 2018 | 683 | 683 |
Common stock in treasury, at cost, 175,461,299 shares in 2019 and 170,495,859 shares in 2018 | (10,582) | (9,989) |
Additional contributed capital | 5,926 | 5,898 |
Retained earnings | 15,849 | 15,075 |
Accumulated other comprehensive (loss) income | (4,288) | (3,823) |
Total Baxter stockholders’ equity | 7,588 | 7,844 |
Noncontrolling interests | 29 | 22 |
Total equity | 7,617 | 7,866 |
Total liabilities and equity | $ 17,299 | $ 15,720 |
Common stock, par value (in dollars per share) | $ 1 | $ 1 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 1 | $ 1 |
Common stock, authorized (in shares) | 2,000,000,000 | 2,000,000,000 |
Common stock, issued (in shares) | 683,494,944 | 683,494,944 |
Treasury stock, shares (in shares) | 175,461,299 | 170,495,859 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income (Unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Statement [Abstract] | ||||
Net sales | $ 2,851 | $ 2,761 | $ 8,323 | $ 8,266 |
Cost of sales | 1,621 | 1,529 | 4,860 | 4,690 |
Gross margin | 1,230 | 1,232 | 3,463 | 3,576 |
Selling, general and administrative expenses | 627 | 684 | 1,869 | 1,993 |
Research and development expenses | 144 | 166 | 439 | 479 |
Other operating income, net | (44) | 0 | (81) | (89) |
Operating income | 503 | 382 | 1,236 | 1,193 |
Interest expense, net | 13 | 11 | 51 | 34 |
Other (income) expense, net | 9 | (1) | (8) | (45) |
Income before income taxes | 481 | 372 | 1,193 | 1,204 |
Income tax expense (benefit) | 106 | (146) | 163 | (37) |
Net income | 375 | 518 | 1,030 | 1,241 |
Less: Net income attributable to noncontrolling interests | 6 | 0 | 6 | 0 |
Net income attributable to Baxter stockholders | $ 369 | $ 518 | $ 1,024 | $ 1,241 |
Earnings per share | ||||
Basic (in dollars per share) | $ 0.72 | $ 0.97 | $ 2.01 | $ 2.32 |
Diluted (in dollars per share) | $ 0.71 | $ 0.95 | $ 1.97 | $ 2.26 |
Weighted-average number of shares outstanding | ||||
Basic (in shares) | 511 | 534 | 510 | 536 |
Diluted (in shares) | 520 | 546 | 520 | 548 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 375 | $ 518 | $ 1,030 | $ 1,241 |
Other comprehensive (loss) income, net of tax: | ||||
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax | (177) | (9) | (272) | (314) |
Other Comprehensive (Income) Loss, Defined Benefit Plan, after Reclassification Adjustment, after Tax | 17 | 9 | 37 | 94 |
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), after Reclassification and Tax | (42) | 2 | (69) | 8 |
Net other comprehensive income (loss) | (202) | 2 | (304) | (212) |
Comprehensive income | 173 | 520 | 726 | 1,029 |
Less: Comprehensive income attributable to noncontrolling interests | 6 | 0 | 6 | 0 |
Comprehensive income attributable to Baxter stockholders | $ 167 | $ 520 | $ 720 | $ 1,029 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Comprehensive Income (Unaudited) (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Statement of Comprehensive Income [Abstract] | ||||
Tax (benefit) expense on currency translation adjustments | $ (13) | $ 3 | $ (11) | $ (24) |
Tax expense on pension and other postretirement benefits | 3 | 9 | 9 | 26 |
Tax (benefit) expense on hedging activities | $ (13) | $ (21) | ||
Tax (benefit) expense on hedging activities | $ 1 | $ 4 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Changes in Equity (Unaudited) - USD ($) $ in Millions | Total | Common Stock | Common Stock in Treasury | Additional Contributed Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Parent | Noncontrolling Interest |
Beginning of period (in shares) at Dec. 31, 2017 | 683,000,000 | |||||||
Beginning of period at Dec. 31, 2017 | $ 9,109 | $ 683 | $ (7,981) | $ 5,940 | $ 14,014 | $ (3,539) | $ 9,117 | $ (8) |
Beginning of period, treasury shares (in shares) at Dec. 31, 2017 | 142,000,000 | |||||||
Adoption of new accounting standards | (23) | (20) | (3) | (23) | ||||
Net income | 1,241 | 1,241 | 1,241 | |||||
Other comprehensive income (loss) | $ (212) | (212) | (212) | |||||
Purchases of treasury stock (in shares) | 14,900,000 | 15,000,000 | ||||||
Purchases of treasury stock | $ (1,028) | $ (1,028) | (1,028) | |||||
Stock issued under employee benefit plans and other (in shares) | (7,000,000) | |||||||
Stock issued under employee benefit plans and other | 302 | $ 370 | (9) | (59) | 302 | |||
Dividends declared on common stock | (290) | (290) | (290) | |||||
Change in noncontrolling interests | (9) | (9) | ||||||
End of period (in shares) at Sep. 30, 2018 | 683,000,000 | |||||||
End of period at Sep. 30, 2018 | 9,090 | $ 683 | $ (8,639) | 5,931 | 14,886 | (3,754) | 9,107 | (17) |
End of period, treasury shares (in shares) at Sep. 30, 2018 | 150,000,000 | |||||||
Beginning of period (in shares) at Dec. 31, 2017 | 683,000,000 | |||||||
Beginning of period at Dec. 31, 2017 | $ 9,109 | $ 683 | $ (7,981) | 5,940 | 14,014 | (3,539) | 9,117 | (8) |
Beginning of period, treasury shares (in shares) at Dec. 31, 2017 | 142,000,000 | |||||||
End of period (in shares) at Dec. 31, 2018 | 683,494,944 | 683,000,000 | ||||||
End of period at Dec. 31, 2018 | $ 7,866 | $ 683 | $ (9,989) | 5,898 | 15,075 | (3,823) | 7,844 | 22 |
End of period, treasury shares (in shares) at Dec. 31, 2018 | 170,495,859 | 170,000,000 | ||||||
Beginning of period (in shares) at Jun. 30, 2018 | 683,000,000 | |||||||
Beginning of period at Jun. 30, 2018 | $ 8,830 | $ 683 | $ (8,485) | 5,916 | 14,484 | (3,756) | 8,842 | (12) |
Beginning of period, treasury shares (in shares) at Jun. 30, 2018 | 148,000,000 | |||||||
Net income | 518 | 518 | 518 | |||||
Other comprehensive income (loss) | 2 | 2 | 2 | |||||
Purchases of treasury stock (in shares) | 4,000,000 | |||||||
Purchases of treasury stock | (247) | $ (247) | (247) | |||||
Stock issued under employee benefit plans and other (in shares) | (2,000,000) | |||||||
Stock issued under employee benefit plans and other | 94 | $ 93 | 15 | (14) | 94 | |||
Dividends declared on common stock | (102) | (102) | (102) | |||||
Change in noncontrolling interests | (5) | (5) | ||||||
End of period (in shares) at Sep. 30, 2018 | 683,000,000 | |||||||
End of period at Sep. 30, 2018 | $ 9,090 | $ 683 | $ (8,639) | 5,931 | 14,886 | (3,754) | 9,107 | (17) |
End of period, treasury shares (in shares) at Sep. 30, 2018 | 150,000,000 | |||||||
Beginning of period (in shares) at Dec. 31, 2018 | 683,494,944 | 683,000,000 | ||||||
Beginning of period at Dec. 31, 2018 | $ 7,866 | $ 683 | $ (9,989) | 5,898 | 15,075 | (3,823) | 7,844 | 22 |
Beginning of period, treasury shares (in shares) at Dec. 31, 2018 | 170,495,859 | 170,000,000 | ||||||
Adoption of new accounting standards | $ 0 | 161 | (161) | |||||
Net income | 1,030 | 1,024 | 1,024 | 6 | ||||
Other comprehensive income (loss) | $ (304) | (304) | (304) | |||||
Purchases of treasury stock (in shares) | 13,500,000 | 14,000,000 | ||||||
Purchases of treasury stock | $ (1,043) | $ (1,089) | 46 | (1,043) | ||||
Stock issued under employee benefit plans and other (in shares) | (9,000,000) | |||||||
Stock issued under employee benefit plans and other | 394 | $ 496 | (18) | (84) | 394 | |||
Dividends declared on common stock | (327) | (327) | (327) | |||||
Change in noncontrolling interests | $ 1 | 1 | ||||||
End of period (in shares) at Sep. 30, 2019 | 683,494,944 | 683,000,000 | ||||||
End of period at Sep. 30, 2019 | $ 7,617 | $ 683 | $ (10,582) | 5,926 | 15,849 | (4,288) | 7,588 | 29 |
End of period, treasury shares (in shares) at Sep. 30, 2019 | 175,461,299 | 175,000,000 | ||||||
Beginning of period (in shares) at Jun. 30, 2019 | 683,000,000 | |||||||
Beginning of period at Jun. 30, 2019 | $ 7,803 | $ 683 | $ (10,322) | 5,906 | 15,598 | (4,086) | 7,779 | 24 |
Beginning of period, treasury shares (in shares) at Jun. 30, 2019 | 173,000,000 | |||||||
Net income | 375 | 369 | 369 | 6 | ||||
Other comprehensive income (loss) | (202) | (202) | (202) | |||||
Purchases of treasury stock (in shares) | 4,000,000 | |||||||
Purchases of treasury stock | (346) | $ (346) | 0 | (346) | ||||
Stock issued under employee benefit plans and other (in shares) | (2,000,000) | |||||||
Stock issued under employee benefit plans and other | 105 | $ 86 | 20 | (1) | 105 | |||
Dividends declared on common stock | (117) | (117) | (117) | |||||
Change in noncontrolling interests | $ (1) | (1) | ||||||
End of period (in shares) at Sep. 30, 2019 | 683,494,944 | 683,000,000 | ||||||
End of period at Sep. 30, 2019 | $ 7,617 | $ 683 | $ (10,582) | $ 5,926 | $ 15,849 | $ (4,288) | $ 7,588 | $ 29 |
End of period, treasury shares (in shares) at Sep. 30, 2019 | 175,461,299 | 175,000,000 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows (unaudited) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Cash flows from operations | ||
Net income | $ 1,030 | $ 1,241 |
Adjustments to reconcile net income to cash flows from operations: | ||
Depreciation and amortization | 580 | 586 |
Deferred income taxes | (45) | (291) |
Stock compensation | 92 | 87 |
Net periodic pension benefit and other postretirement costs | 8 | 31 |
Intangible asset impairment | 31 | 0 |
Other | 90 | 23 |
Changes in balance sheet items: | ||
Accounts receivable, net | (23) | (16) |
Inventories | (88) | (226) |
Accounts payable and accrued liabilities | (249) | (32) |
Other | (145) | (95) |
Cash flows from operations – continuing operations | 1,281 | 1,308 |
Cash flows from operations – discontinued operations | (6) | 0 |
Cash flows from operations | 1,275 | 1,308 |
Cash flows from investing activities | ||
Capital expenditures | (505) | (453) |
Acquisitions and investments | (186) | (255) |
Other investing activities, net | 12 | 8 |
Cash flows from investing activities | (679) | (700) |
Cash flows from financing activities | ||
Issuances of debt | 1,661 | 0 |
Cash dividends on common stock | (310) | (274) |
Proceeds from stock issued under employee benefit plans | 334 | 232 |
Purchases of treasury stock | (1,029) | (1,028) |
Other financing activities, net | (42) | (25) |
Cash flows from financing activities | 614 | (1,095) |
Effect of foreign exchange rate changes on cash and cash equivalents | (39) | (53) |
Increase (decrease) in cash and cash equivalents | 1,171 | (540) |
Cash and cash equivalents at beginning of period | 1,838 | 3,403 |
Cash and cash equivalents at end of period | $ 3,009 | $ 2,863 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 9 Months Ended |
Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION The unaudited interim condensed consolidated financial statements of Baxter International Inc. and its subsidiaries (we or our) have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP) in the United States have been condensed or omitted. These unaudited interim condensed consolidated financial statements should be read in conjunction with the restated consolidated financial statements and notes as of and for the year ended December 31, 2018 included in our Annual Report on Form 10-K for the year ended December 31, 2019 (2019 Annual Report) which was filed on March 17, 2020. In the opinion of management, the unaudited interim condensed consolidated financial statements reflect all adjustments necessary for a fair presentation of the financial position, results of operations and cash flows for the periods presented. All such adjustments, unless otherwise noted herein, are of a normal, recurring nature. The results of operations for the current interim period are not necessarily indicative of the results of operations to be expected for the full year. Certain reclassifications have been made to conform the prior period condensed consolidated statements to the current period presentation. New Accounting Standards Recently adopted accounting pronouncements As of January 1, 2019, we adopted Accounting Standards Update (ASU) No. 2016-02, Leases (Topic 842). Under this guidance, lessees are required to recognize a right-of-use asset and a lease liability on the balance sheet for all operating leases, other than those that meet the definition of a short-term lease. We adopted Topic 842 using the modified retrospective method. We elected the following practical expedients when assessing the transition impact: i) not to reassess whether any expired or existing contracts as of the adoption date are or contain leases; ii) not to reassess the lease classification for any expired or existing leases as of the adoption date; and iii) not to reassess initial direct costs for any existing leases as of the adoption date. The adjustment to record operating lease right-of-use assets and operating lease liabilities was $502 million as of January 1, 2019. The impact to the condensed consolidated statements of income was not material and there was no net impact to the condensed consolidated statements of cash flows. As of January 1, 2019, we adopted ASU No. 2017-12, Targeted Improvements to Accounting for Hedging Activities. The purpose of this ASU is to better align a company’s risk management activities and financial reporting for hedging relationships, simplify the hedge accounting requirements, and improve the disclosures of hedging arrangements. The adoption of this standard did not have a material impact on our condensed consolidated financial statements. As of January 1, 2019, we adopted ASU No. 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (AOCI). As a result of the enactment of the U.S. Tax Cuts and Jobs Act of 2017 (the 2017 Tax Act), this guidance provides for a reclassification of certain tax effects from AOCI to retained earnings. The impact of the adoption of this standard was a $161 million increase to retained earnings. |
RESTATEMENT OF PREVIOUSLY ISSUE
RESTATEMENT OF PREVIOUSLY ISSUED CONSOLIDATED FINANCIAL STATEMENTS | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Changes and Error Corrections [Abstract] | |
Accounting Changes and Error Corrections | Baxter International Inc. Condensed Consolidated Statement of Changes in Equity (in millions) For the Three Months Ended September 30, 2018 Baxter International Inc. stockholders' equity Common stock shares Common stock Common stock shares in treasury Common stock in treasury Additional contributed capital Retained earnings Accumulated other comprehensive income (loss) Total Baxter stockholders' equity Noncontrolling interests Total equity As previously reported Balance as of July 1, 2018 683 $ 683 148 $ (8,485) $ 5,916 $ 14,966 $ (4,199) $ 8,881 $ (12) $ 8,869 Net income — — — — — 544 — $ 544 — $ 544 Other comprehensive income (loss) — — — — — — (40) (40) — (40) Purchases of treasury stock — — 4 (247) — — — (247) — (247) Stock issued under employee benefit plans and other — — (2) 93 15 (14) — 94 — 94 Dividends declared on common stock — — — — — (102) — (102) — (102) Changes in noncontrolling interests — — — — — — — — (5) (5) Balance as of September 30, 2018 683 $ 683 150 $ (8,639) $ 5,931 $ 15,394 $ (4,239) $ 9,130 $ (17) $ 9,113 Restatement impacts Balance as of July 1, 2018 — $ — — $ — $ — $ (482) $ 443 $ (39) $ — $ (39) Net income — — — — — (26) — (26) — (26) Other comprehensive income (loss) — — — — — — 42 42 — 42 Balance as of September 30, 2018 — $ — — $ — $ — $ (508) $ 485 $ (23) $ — $ (23) As restated Balance as of July 1, 2018 683 $ 683 148 $ (8,485) $ 5,916 $ 14,484 $ (3,756) $ 8,842 $ (12) $ 8,830 Net income — — — — — 518 — 518 — 518 Other comprehensive income (loss) — — — — — — 2 2 — 2 Purchases of treasury stock — — 4 (247) — — — (247) — (247) Stock issued under employee benefit plans and other — — (2) 93 15 (14) — 94 — 94 Dividends declared on common stock — — — — — (102) — (102) — (102) Changes in noncontrolling interests — — — — — — — — (5) (5) Balance as of September 30, 2018 683 $ 683 150 $ (8,639) $ 5,931 $ 14,886 $ (3,754) $ 9,107 $ (17) $ 9,090 See descriptions of the net income and other comprehensive income impacts in the condensed consolidated statement of income and condensed consolidated statement of comprehensive income for the three months ended September 30, 2018 sections above. Baxter International Inc. Condensed Consolidated Statement of Changes in Equity (in millions) For the Nine Months Ended September 30, 2018 Baxter International Inc. stockholders' equity Common stock shares Common stock Common stock shares in treasury Common stock in treasury Additional contributed capital Retained earnings Accumulated other comprehensive income (loss) Total Baxter stockholders' equity Noncontrolling interests Total equity As previously reported Balance as of January 1, 2018 683 $ 683 142 $ (7,981) $ 5,940 $ 14,483 $ (4,001) $ 9,124 $ (8) $ 9,116 Adoption of new accounting standards — — — — — (16) (3) $ (19) — $ (19) Net income — — — — — 1,276 — $ 1,276 — $ 1,276 Other comprehensive income (loss) — — — — — — (235) (235) — (235) Purchases of treasury stock — — 15 (1,028) — — — (1,028) — (1,028) Stock issued under employee benefit plans and other — — (7) 370 (9) (59) — 302 — 302 Dividends declared on common stock — — — — — (290) — (290) — (290) Other changes in noncontrolling interests — — — — — — — — (9) (9) Balance as of September 30, 2018 683 $ 683 150 $ (8,639) $ 5,931 $ 15,394 $ (4,239) $ 9,130 $ (17) $ 9,113 Restatement impacts Balance as of January 1, 2018 — $ — — $ — $ — $ (469) $ 462 $ (7) $ — $ (7) Adoption of new accounting standards — — — — — (4) — (4) — (4) Net income — — — — — (35) — (35) — (35) Other comprehensive income (loss) — — — — — — 23 23 — 23 Balance as of September 30, 2018 — $ — — $ — $ — $ (508) $ 485 $ (23) $ — $ (23) As restated Balance as of January 1, 2018 683 $ 683 142 $ (7,981) $ 5,940 $ 14,014 $ (3,539) $ 9,117 $ (8) $ 9,109 Adoption of new accounting standards — — — — — (20) (3) (23) — (23) Net income — — — — — 1,241 — 1,241 — 1,241 Other comprehensive income (loss) — — — — — — (212) (212) — (212) Purchases of treasury stock — — 15 (1,028) — — — (1,028) — (1,028) Stock issued under employee benefit plans and other — — (7) 370 (9) (59) — 302 — 302 Dividends declared on common stock — — — — — (290) — (290) — (290) Other changes in noncontrolling interests — — — — — — — — (9) (9) Balance as of September 30, 2018 683 $ 683 150 $ (8,639) $ 5,931 $ 14,886 $ (3,754) $ 9,107 $ (17) $ 9,090 The adjustment to the January 1, 2018 retained earnings and accumulated other comprehensive loss represent the cumulative impacts of foreign exchange gains and losses and the translation of our financial position and results of operations for our foreign operations into U.S. dollars for the periods prior to January 1, 2018. Retained earnings also includes the cumulative impacts of equipment leased to customers under operating leases and other miscellaneous adjustments for the periods prior to January 1, 2018. Baxter International Inc. Condensed Consolidated Statement of Cash Flows (in millions) For the Nine Months Ended September 30, 2018 As previously reported Restatement impacts Restatement reference As restated Cash flows from operations Net income $ 1,276 $ (35) $ 1,241 Adjustments to reconcile net income to net cash from operating activities: Depreciation and amortization 594 (8) (c) 586 Deferred income taxes (284) (7) (c)(g) (291) Stock compensation 87 — 87 Net periodic pension benefit and other postretirement costs 31 — 31 Other 6 17 (d) 23 Changes in balance sheet items: Accounts receivable, net (16) — (16) Inventories (226) — (226) Accounts payable and accrued liabilities (31) (1) (b) (32) Other (96) 1 (e) (95) Cash flows from operations 1,341 (33) 1,308 Cash flows from investing activities Capital expenditures (468) 15 (c) (453) Acquisitions and investments, net of cash acquired (255) — (255) Other investing activities, net 8 — 8 Cash flows from investing activities (715) 15 (700) Cash flows from financing activities Cash dividends on common stock (274) — (274) Proceeds from stock issued under employee benefit plans 232 — 232 Purchases of treasury stock (1,028) — (1,028) Other financing activities, net (25) — (25) Cash flows from financing activities (1,095) — (1,095) Effect of foreign exchange rate changes on cash and cash equivalents (65) 12 (a)(d)(e) (53) Increase (decrease) in cash and cash equivalents (534) (6) (540) Cash and cash equivalents at beginning of period 3,394 9 (e) 3,403 Cash and cash equivalents at end of period $ 2,860 $ 3 (e) $ 2,863 The $35 million decrease to net income was driven by the items described above in the condensed consolidated statement of income for the nine months ended September 30, 2018 section. (a) Foreign Currency Denominated Monetary Assets and Liabilities—The correction of these misstatements resulted in an increase to the effect of foreign exchange rate changes on cash and cash equivalents of $35 million for the nine months ended September 30, 2018. (b) Foreign Currency Derivative Contracts—The correction of these misstatements resulted in a decrease to changes in accounts payable and accrued liabilities of $1 million for the nine months ended September 30, 2019. (c) Equipment Leased to Customers under Operating Leases—The correction of these misstatements resulted in decreases to depreciation and amortization of $8 million, deferred income taxes of $2 million and capital expenditures of $15 million for the nine months ended September 30, 2018. (d) Classification of Foreign Currency Gains and Losses in our Consolidated Statements of Cash Flows - The corrections of these misstatements resulted in a decrease to the effect of foreign exchange rate changes on cash and cash equivalents and an increase to other adjustments to reconcile net income to net cash from operating activities of $17 million for the nine months ended September 30, 2018. (e) Translation of the Financial Position and Results of Operations of our Foreign Operations into U.S. Dollars - The corrections of these misstatements resulted in an increase in cash and cash equivalents at the beginning of the period of $9 million, at the end of the period of $3 million, and other changes in balance sheet items of $1 million and a decrease to the effect of foreign exchange rate changes on cash and cash equivalents of $6 million for the nine months ended September 30, 2018. (g) Other miscellaneous adjustments - The correction of these misstatements resulted in a decrease to deferred income taxes of $5 million for the nine months ended September 30, 2018. |
ACQUISITIONS AND OTHER ARRANGEM
ACQUISITIONS AND OTHER ARRANGEMENTS | 9 Months Ended |
Sep. 30, 2019 | |
Business Combinations [Abstract] | |
ACQUISITIONS AND OTHER ARRANGEMENTS | ACQUISITIONS AND OTHER ARRANGEMENTS In the first nine months of 2019, we acquired the rights to multiple products for an aggregate purchase price of $166 million. The purchase prices were capitalized primarily as developed-technology intangible assets and we are amortizing the assets over their estimated weighted-average useful lives of 11 years. Net sales related to these products in the first nine months of 2019 were not material. Cheetah Medical, Inc. On October 25, 2019, we acquired 100% of Cheetah Medical, Inc. (Cheetah) for total upfront cash consideration of $195 million, net of cash acquired, with the potential for additional cash consideration, up to $40 million, based on clinical and commercial milestones for which the acquisition date fair value was $18 million. Cheetah is a leading provider of hemodynamic monitoring technologies. As the acquisition was completed after September 30, 2019, our condensed consolidated financial statements do not include the financial condition or operating results of Cheetah in any of the periods presented herein. The fair value of the potential contingent consideration payments was estimated by applying a probability-weighted expected payment model for the clinical milestone and a Monte Carlo simulation model for the commercial milestone, which were then discounted to present value. The fair value measurements were based on Level 3 inputs. Refer to Note 17 for additional information regarding fair value measurements. The following table summarizes the fair value of consideration transferred: (in millions) Cash consideration transferred $ 197 Contingent consideration 18 Total consideration $ 215 The following table summarizes the fair values of the assets acquired and liabilities assumed as of the acquisition date: (in millions) Assets acquired and liabilities assumed Cash $ 2 Accounts receivable, net 3 Inventories 1 Prepaid expenses and other current assets 1 Property, plant and equipment 1 Goodwill 111 Other intangible assets 131 Operating lease right-of-use assets 1 Accounts payable and other accrued liabilities (4) Other non-current liabilities (32) Total assets acquired and liabilities assumed $ 215 We allocated $123 million of the total consideration to the developed product rights with a weighted-average useful life of 15 years and $8 million to customer relationships with a useful life of 13 years. The fair values of the intangible assets were determined using the income approach. The discount rates used to measure the intangible assets were 11.0% for developed product rights and 10.0% for customer relationships. We consider the fair value of the intangible assets to be Level 3 measurements due to the significant estimates and assumptions used by management in establishing the estimated fair values. The goodwill, which is not deductible for tax purposes, includes the value of potential future technologies as well as the overall strategic benefits provided to our product portfolio and is included primarily in the Americas segment. Seprafilm Adhesion Barrier In December 2019, we entered into a definitive agreement to acquire Seprafilm Adhesion Barrier (Seprafilm) from Sanofi. The transaction closed in February 2020 and we paid approximately $345 million for the acquired assets, subject to a post-close adjustment. Seprafilm is indicated for use in patients undergoing abdominal or pelvic laparotomy as an adjunct intended to reduce the incidence, extent and severity of postoperative adhesions between the abdominal wall and the underlying viscera such as omentum, small bowel, bladder, and stomach, and between the uterus and surrounding structures such as tubes and ovaries, large bowel, and bladder. As the acquisition was completed after September 30, 2019, our condensed consolidated financial statements do not include the financial condition or results of operations of Seprafilm in any of the periods presented herein. We expect that most of the purchase price will be allocated to intangible assets and we are evaluating whether this transaction will be accounted for as an asset acquisition or a business combination. Other In January 2020, we acquired the U.S. rights to an additional product for $60 million. The purchase price will be capitalized as a developed-technology intangible asset in the quarter ending March 31, 2020 and will be amortized over its estimated useful life of 11 years. |
SUPPLEMENTAL FINANCIAL INFORMAT
SUPPLEMENTAL FINANCIAL INFORMATION | 9 Months Ended |
Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
SUPPLEMENTAL FINANCIAL INFORMATION | SUPPLEMENTAL FINANCIAL INFORMATION Interest Expense, Net Three months ended Nine months ended (in millions) 2019 2018 2019 2018 Interest expense, net of capitalized interest $ 28 $ 24 $ 81 $ 70 Interest income (15) (13) (30) (36) Interest expense, net $ 13 $ 11 $ 51 $ 34 Other (Income) Expense, Net Three months ended Nine months ended As Restated As Restated (in millions) 2019 2018 2019 2018 Foreign exchange losses (gains), net $ 30 $ 10 $ 44 $ (19) Pension and other postretirement benefit plans (17) (13) (48) (39) Other, net (4) 2 (4) 13 Other (income) expense, net $ 9 $ (1) $ (8) $ (45) Inventories As Restated (in millions) September 30, December 31, Raw materials $ 380 $ 367 Work in process 194 207 Finished goods 1,141 1,093 Inventories $ 1,715 $ 1,667 Property, Plant and Equipment, Net As Restated (in millions) September 30, December 31, Property, plant and equipment, at cost $ 10,379 $ 10,333 Accumulated depreciation (5,973) (5,803) Property, plant and equipment, net $ 4,406 $ 4,530 Purchases of property, plant and equipment included in accounts payable and accrued liabilities as of September 30, 2019 and 2018 was $47 million and $62 million, respectively. |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS, NET | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS, NET | GOODWILL AND OTHER INTANGIBLE ASSETS, NET Goodwill The following is a reconciliation of goodwill by business segment. (in millions) Americas EMEA APAC Total Balance as of December 31, 2018 (As Restated) $ 2,386 $ 393 $ 223 $ 3,002 Currency translation and other adjustments (121) (23) (11) (155) Balance as of September 30, 2019 $ 2,265 $ 370 $ 212 $ 2,847 As of September 30, 2019, there were no reductions in goodwill relating to impairment losses. Other intangible assets, net The following is a summary of our other intangible assets. (in millions) Developed technology, including patents Other amortized intangible assets Indefinite-lived intangible assets September 30, 2019 Gross other intangible assets $ 2,202 $ 447 $ 173 $ 2,822 Accumulated amortization (1,188) (269) — (1,457) Other intangible assets, net $ 1,014 $ 178 $ 173 $ 1,365 December 31, 2018 (As Restated) Gross other intangible assets $ 2,135 $ 457 $ 188 $ 2,780 Accumulated amortization (1,117) (253) — (1,370) Other intangible assets, net $ 1,018 $ 204 $ 188 $ 1,410 Intangible asset amortization expense was $48 million and $42 million for the three months ended September 30, 2019 and 2018, respectively, and $136 million and $127 million for the nine months ended September 30, 2019 and 2018, respectively. In the second quarter of 2019, we recognized a $31 million impairment charge related to a developed-technology intangible asset due to a decline in market expectations for the related product. The fair value of the intangible asset was measured using a discounted cash flow approach and the charge is classified within cost of sales in the accompanying condensed consolidated statement of income for the nine months ended September 30, 2019. We consider the fair value of the asset to be a Level 3 measurement due to the significant estimates and assumptions we used in establishing the estimated fair value. |
FINANCIAL ARRANGEMENTS
FINANCIAL ARRANGEMENTS | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
FINANCIAL ARRANGEMENTS | FINANCING ARRANGEMENTS Debt Issuance In May 2019, we issued €750 million of 0.40% senior notes due in May 2024 and €750 million of 1.30% senior notes due in May 2029. We have designated these debt instruments as net investment hedges of our European operations. Refer to Note 16 for additional information. Short-term Debt In the second quarter of 2019, we repaid $795 million of commercial paper and other short-term borrowings that were outstanding as of March 31, 2019. No commercial paper was outstanding as of September 30, 2019 or December 31, 2018. Credit Facilities In December 2019, we entered into new U.S. and Euro-denominated credit facilities. Our U.S. dollar-denominated revolving credit facility has capacity of $2.0 billion and our Euro-denominated senior revolving credit facility has a capacity of €200 million. Each of the facilities matures in 2024. As of December 31, 2019, we had €200 million ($224 million) outstanding under our Euro-denominated facility at a 0.91% interest rate and no borrowings outstanding under our U.S. dollar-denominated credit facility. The facilities enable us to borrow funds on an unsecured basis at variable interest rates, and contain various covenants, including a maximum net leverage ratio. Fees under the credit facilities are variable and are based on our credit ratings and the total capacity of the facility. There were no borrowings outstanding under our previous credit facilities as of September 30, 2019 or December 31, 2018. |
LEASES
LEASES | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Lessor, Operating Leases | LEASES Lessee Activity We have entered into operating and finance leases primarily for office, manufacturing and research and development (R&D) facilities, vehicles and equipment. Our leases have remaining terms from one leases include options that provide us with the ability to extend the lease term for periods ranging from one Certain of our leases include provisions for variable lease payments which are based on, but not limited to, maintenance, insurance, taxes, index escalations and usage-based amounts. For all asset classes, we have elected to apply a practical expedient to account for other services within lease contracts as components of the lease. We also have elected to apply a practical expedient for short-term leases whereby we do not recognize a lease liability and right-of-use asset for leases with a term of less than 12 months. We classify our leases as operating or finance at the lease commencement date. Finance leases are generally those leases for which we will pay substantially all of the underlying asset’s fair value or will use the asset for all or a major part of its economic life, including circumstances in which we will ultimately own the asset. All other leases are operating leases. For finance leases, we recognize interest expense using the effective interest method and we recognize amortization expense on the right-of-use asset over the shorter of the lease term or the useful life of the asset. For operating leases, we recognize lease cost on a straight-line basis over the term of the lease. Lease liabilities and right-of-use assets are recognized at the lease commencement date based on the present value of minimum lease payments over the lease term. We determine the present value of payments under a lease based on our incremental borrowing rate as of the lease commencement date. The incremental borrowing rate is equal to the rate of interest that we would have to pay to borrow on a collateralized basis over a similar term in an amount equal to the lease payments in a similar economic environment. For operating leases that commenced prior to our adoption of Topic 842, we measured the lease liabilities and right-of-use assets using our incremental borrowing rate as of January 1, 2019. The components of lease cost for the three and nine months ended September 30, 2019 were: (in millions) Three months ended September 30, 2019 Nine months ended Operating lease cost $ 30 $ 90 Finance lease cost Amortization of right-of-use assets 1 4 Interest on lease liabilities 3 4 Variable lease cost 24 68 Lease cost $ 58 $ 166 The following table contains supplemental cash flow information related to leases for the nine months ended September 30, 2019: (in millions) Nine months ended Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 89 Operating cash flows from finance leases 3 Financing cash flows from finance leases 3 Right-of-use operating lease assets obtained in exchange for lease obligations 164 There were no material lease transactions that we entered into but have not yet commenced as of September 30, 2019. Supplemental balance sheet information related to leases as of September 30, 2019 includes: (in millions) September 30, 2019 Operating leases Operating lease right-of-use assets $ 589 Accounts payable and accrued liabilities $ 98 Operating lease liabilities 494 Total operating lease liabilities $ 592 Finance leases Property, plant and equipment, at cost $ 65 Accumulated depreciation (19) Property, plant and equipment, net $ 46 Current maturities of long-term debt and finance lease obligations $ — Long-term debt and finance lease obligations 53 Total finance lease liabilities $ 53 Lease term and discount rates as of September 30, 2019 were: September 30, 2019 Weighted-average remaining lease term (years) Operating leases 10 Finance leases 15 Weighted-average discount rate Operating leases 2.8 % Finance leases 10.5 % Maturities of operating and finance lease liabilities as of September 30, 2019 were: (in millions) Finance Leases Operating Leases 2019 $ 2 $ 30 2020 7 104 2021 7 88 2022 7 74 2023 6 62 Thereafter 83 308 Total minimum lease payments 112 666 Less: imputed interest (59) (74) Present value of lease liabilities $ 53 $ 592 Future minimum lease payments as of December 31, 2018 were: As Restated (in millions) Capital Leases Operating Leases 2019 $ 7 $ 123 2020 7 94 2021 8 86 2022 8 72 2023 6 64 Thereafter 88 212 Total minimum lease payments 124 $ 651 Less: imputed interest (62) Present value of lease liabilities $ 62 Lessor Activity We lease medical equipment, such as renal dialysis equipment and infusion pumps, to customers, primarily in conjunction with arrangements to provide consumable medical products such as dialysis therapies, intravenous (IV) fluids and inhaled anesthetics. Certain of our equipment leases are classified as sales-type leases and the remainder are operating leases. The terms of the related contracts, including the proportion of fixed versus variable payments and any options to shorten or extend the lease term, vary by customer. We allocate revenue between equipment leases and medical products based on their standalone selling prices. The components of lease revenue for the three and nine months ended September 30, 2019 were: (in millions) Three months ended September 30, 2019 Nine months ended September 30, 2019 Sales-type lease revenue $ 3 $ 14 Operating lease revenue 16 46 Variable lease revenue 23 65 Total lease revenue $ 42 $ 125 The components of our net investment in sales-type leases as of September 30, 2019 were: (in millions) September 30, 2019 Minimum lease payments $ 83 Unguaranteed residual values 11 Net investment in leases $ 94 Our net investment in sales-type leases is classified as follows in the accompanying condensed consolidated balance sheets: (in millions) September 30, 2019 Accounts receivable, net $ 36 Other non-current assets 58 Total $ 94 Maturities of sales-type and operating leases as of September 30, 2019 were: (in millions) Sales-type Leases Operating Leases 2019 $ 10 $ 15 2020 31 61 2021 25 61 2022 17 58 2023 9 27 Thereafter 3 5 Total minimum lease payments 95 $ 227 Less: imputed interest (12) Present value of minimum lease payments $ 83 |
Lessee, Operating Leases | LEASES Lessee Activity We have entered into operating and finance leases primarily for office, manufacturing and research and development (R&D) facilities, vehicles and equipment. Our leases have remaining terms from one leases include options that provide us with the ability to extend the lease term for periods ranging from one Certain of our leases include provisions for variable lease payments which are based on, but not limited to, maintenance, insurance, taxes, index escalations and usage-based amounts. For all asset classes, we have elected to apply a practical expedient to account for other services within lease contracts as components of the lease. We also have elected to apply a practical expedient for short-term leases whereby we do not recognize a lease liability and right-of-use asset for leases with a term of less than 12 months. We classify our leases as operating or finance at the lease commencement date. Finance leases are generally those leases for which we will pay substantially all of the underlying asset’s fair value or will use the asset for all or a major part of its economic life, including circumstances in which we will ultimately own the asset. All other leases are operating leases. For finance leases, we recognize interest expense using the effective interest method and we recognize amortization expense on the right-of-use asset over the shorter of the lease term or the useful life of the asset. For operating leases, we recognize lease cost on a straight-line basis over the term of the lease. Lease liabilities and right-of-use assets are recognized at the lease commencement date based on the present value of minimum lease payments over the lease term. We determine the present value of payments under a lease based on our incremental borrowing rate as of the lease commencement date. The incremental borrowing rate is equal to the rate of interest that we would have to pay to borrow on a collateralized basis over a similar term in an amount equal to the lease payments in a similar economic environment. For operating leases that commenced prior to our adoption of Topic 842, we measured the lease liabilities and right-of-use assets using our incremental borrowing rate as of January 1, 2019. The components of lease cost for the three and nine months ended September 30, 2019 were: (in millions) Three months ended September 30, 2019 Nine months ended Operating lease cost $ 30 $ 90 Finance lease cost Amortization of right-of-use assets 1 4 Interest on lease liabilities 3 4 Variable lease cost 24 68 Lease cost $ 58 $ 166 The following table contains supplemental cash flow information related to leases for the nine months ended September 30, 2019: (in millions) Nine months ended Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 89 Operating cash flows from finance leases 3 Financing cash flows from finance leases 3 Right-of-use operating lease assets obtained in exchange for lease obligations 164 There were no material lease transactions that we entered into but have not yet commenced as of September 30, 2019. Supplemental balance sheet information related to leases as of September 30, 2019 includes: (in millions) September 30, 2019 Operating leases Operating lease right-of-use assets $ 589 Accounts payable and accrued liabilities $ 98 Operating lease liabilities 494 Total operating lease liabilities $ 592 Finance leases Property, plant and equipment, at cost $ 65 Accumulated depreciation (19) Property, plant and equipment, net $ 46 Current maturities of long-term debt and finance lease obligations $ — Long-term debt and finance lease obligations 53 Total finance lease liabilities $ 53 Lease term and discount rates as of September 30, 2019 were: September 30, 2019 Weighted-average remaining lease term (years) Operating leases 10 Finance leases 15 Weighted-average discount rate Operating leases 2.8 % Finance leases 10.5 % Maturities of operating and finance lease liabilities as of September 30, 2019 were: (in millions) Finance Leases Operating Leases 2019 $ 2 $ 30 2020 7 104 2021 7 88 2022 7 74 2023 6 62 Thereafter 83 308 Total minimum lease payments 112 666 Less: imputed interest (59) (74) Present value of lease liabilities $ 53 $ 592 Future minimum lease payments as of December 31, 2018 were: As Restated (in millions) Capital Leases Operating Leases 2019 $ 7 $ 123 2020 7 94 2021 8 86 2022 8 72 2023 6 64 Thereafter 88 212 Total minimum lease payments 124 $ 651 Less: imputed interest (62) Present value of lease liabilities $ 62 Lessor Activity We lease medical equipment, such as renal dialysis equipment and infusion pumps, to customers, primarily in conjunction with arrangements to provide consumable medical products such as dialysis therapies, intravenous (IV) fluids and inhaled anesthetics. Certain of our equipment leases are classified as sales-type leases and the remainder are operating leases. The terms of the related contracts, including the proportion of fixed versus variable payments and any options to shorten or extend the lease term, vary by customer. We allocate revenue between equipment leases and medical products based on their standalone selling prices. The components of lease revenue for the three and nine months ended September 30, 2019 were: (in millions) Three months ended September 30, 2019 Nine months ended September 30, 2019 Sales-type lease revenue $ 3 $ 14 Operating lease revenue 16 46 Variable lease revenue 23 65 Total lease revenue $ 42 $ 125 The components of our net investment in sales-type leases as of September 30, 2019 were: (in millions) September 30, 2019 Minimum lease payments $ 83 Unguaranteed residual values 11 Net investment in leases $ 94 Our net investment in sales-type leases is classified as follows in the accompanying condensed consolidated balance sheets: (in millions) September 30, 2019 Accounts receivable, net $ 36 Other non-current assets 58 Total $ 94 Maturities of sales-type and operating leases as of September 30, 2019 were: (in millions) Sales-type Leases Operating Leases 2019 $ 10 $ 15 2020 31 61 2021 25 61 2022 17 58 2023 9 27 Thereafter 3 5 Total minimum lease payments 95 $ 227 Less: imputed interest (12) Present value of minimum lease payments $ 83 |
Lessee, Finance Leases | LEASES Lessee Activity We have entered into operating and finance leases primarily for office, manufacturing and research and development (R&D) facilities, vehicles and equipment. Our leases have remaining terms from one leases include options that provide us with the ability to extend the lease term for periods ranging from one Certain of our leases include provisions for variable lease payments which are based on, but not limited to, maintenance, insurance, taxes, index escalations and usage-based amounts. For all asset classes, we have elected to apply a practical expedient to account for other services within lease contracts as components of the lease. We also have elected to apply a practical expedient for short-term leases whereby we do not recognize a lease liability and right-of-use asset for leases with a term of less than 12 months. We classify our leases as operating or finance at the lease commencement date. Finance leases are generally those leases for which we will pay substantially all of the underlying asset’s fair value or will use the asset for all or a major part of its economic life, including circumstances in which we will ultimately own the asset. All other leases are operating leases. For finance leases, we recognize interest expense using the effective interest method and we recognize amortization expense on the right-of-use asset over the shorter of the lease term or the useful life of the asset. For operating leases, we recognize lease cost on a straight-line basis over the term of the lease. Lease liabilities and right-of-use assets are recognized at the lease commencement date based on the present value of minimum lease payments over the lease term. We determine the present value of payments under a lease based on our incremental borrowing rate as of the lease commencement date. The incremental borrowing rate is equal to the rate of interest that we would have to pay to borrow on a collateralized basis over a similar term in an amount equal to the lease payments in a similar economic environment. For operating leases that commenced prior to our adoption of Topic 842, we measured the lease liabilities and right-of-use assets using our incremental borrowing rate as of January 1, 2019. The components of lease cost for the three and nine months ended September 30, 2019 were: (in millions) Three months ended September 30, 2019 Nine months ended Operating lease cost $ 30 $ 90 Finance lease cost Amortization of right-of-use assets 1 4 Interest on lease liabilities 3 4 Variable lease cost 24 68 Lease cost $ 58 $ 166 The following table contains supplemental cash flow information related to leases for the nine months ended September 30, 2019: (in millions) Nine months ended Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 89 Operating cash flows from finance leases 3 Financing cash flows from finance leases 3 Right-of-use operating lease assets obtained in exchange for lease obligations 164 There were no material lease transactions that we entered into but have not yet commenced as of September 30, 2019. Supplemental balance sheet information related to leases as of September 30, 2019 includes: (in millions) September 30, 2019 Operating leases Operating lease right-of-use assets $ 589 Accounts payable and accrued liabilities $ 98 Operating lease liabilities 494 Total operating lease liabilities $ 592 Finance leases Property, plant and equipment, at cost $ 65 Accumulated depreciation (19) Property, plant and equipment, net $ 46 Current maturities of long-term debt and finance lease obligations $ — Long-term debt and finance lease obligations 53 Total finance lease liabilities $ 53 Lease term and discount rates as of September 30, 2019 were: September 30, 2019 Weighted-average remaining lease term (years) Operating leases 10 Finance leases 15 Weighted-average discount rate Operating leases 2.8 % Finance leases 10.5 % Maturities of operating and finance lease liabilities as of September 30, 2019 were: (in millions) Finance Leases Operating Leases 2019 $ 2 $ 30 2020 7 104 2021 7 88 2022 7 74 2023 6 62 Thereafter 83 308 Total minimum lease payments 112 666 Less: imputed interest (59) (74) Present value of lease liabilities $ 53 $ 592 Future minimum lease payments as of December 31, 2018 were: As Restated (in millions) Capital Leases Operating Leases 2019 $ 7 $ 123 2020 7 94 2021 8 86 2022 8 72 2023 6 64 Thereafter 88 212 Total minimum lease payments 124 $ 651 Less: imputed interest (62) Present value of lease liabilities $ 62 Lessor Activity We lease medical equipment, such as renal dialysis equipment and infusion pumps, to customers, primarily in conjunction with arrangements to provide consumable medical products such as dialysis therapies, intravenous (IV) fluids and inhaled anesthetics. Certain of our equipment leases are classified as sales-type leases and the remainder are operating leases. The terms of the related contracts, including the proportion of fixed versus variable payments and any options to shorten or extend the lease term, vary by customer. We allocate revenue between equipment leases and medical products based on their standalone selling prices. The components of lease revenue for the three and nine months ended September 30, 2019 were: (in millions) Three months ended September 30, 2019 Nine months ended September 30, 2019 Sales-type lease revenue $ 3 $ 14 Operating lease revenue 16 46 Variable lease revenue 23 65 Total lease revenue $ 42 $ 125 The components of our net investment in sales-type leases as of September 30, 2019 were: (in millions) September 30, 2019 Minimum lease payments $ 83 Unguaranteed residual values 11 Net investment in leases $ 94 Our net investment in sales-type leases is classified as follows in the accompanying condensed consolidated balance sheets: (in millions) September 30, 2019 Accounts receivable, net $ 36 Other non-current assets 58 Total $ 94 Maturities of sales-type and operating leases as of September 30, 2019 were: (in millions) Sales-type Leases Operating Leases 2019 $ 10 $ 15 2020 31 61 2021 25 61 2022 17 58 2023 9 27 Thereafter 3 5 Total minimum lease payments 95 $ 227 Less: imputed interest (12) Present value of minimum lease payments $ 83 |
Lessor, Direct Financing Leases | LEASES Lessee Activity We have entered into operating and finance leases primarily for office, manufacturing and research and development (R&D) facilities, vehicles and equipment. Our leases have remaining terms from one leases include options that provide us with the ability to extend the lease term for periods ranging from one Certain of our leases include provisions for variable lease payments which are based on, but not limited to, maintenance, insurance, taxes, index escalations and usage-based amounts. For all asset classes, we have elected to apply a practical expedient to account for other services within lease contracts as components of the lease. We also have elected to apply a practical expedient for short-term leases whereby we do not recognize a lease liability and right-of-use asset for leases with a term of less than 12 months. We classify our leases as operating or finance at the lease commencement date. Finance leases are generally those leases for which we will pay substantially all of the underlying asset’s fair value or will use the asset for all or a major part of its economic life, including circumstances in which we will ultimately own the asset. All other leases are operating leases. For finance leases, we recognize interest expense using the effective interest method and we recognize amortization expense on the right-of-use asset over the shorter of the lease term or the useful life of the asset. For operating leases, we recognize lease cost on a straight-line basis over the term of the lease. Lease liabilities and right-of-use assets are recognized at the lease commencement date based on the present value of minimum lease payments over the lease term. We determine the present value of payments under a lease based on our incremental borrowing rate as of the lease commencement date. The incremental borrowing rate is equal to the rate of interest that we would have to pay to borrow on a collateralized basis over a similar term in an amount equal to the lease payments in a similar economic environment. For operating leases that commenced prior to our adoption of Topic 842, we measured the lease liabilities and right-of-use assets using our incremental borrowing rate as of January 1, 2019. The components of lease cost for the three and nine months ended September 30, 2019 were: (in millions) Three months ended September 30, 2019 Nine months ended Operating lease cost $ 30 $ 90 Finance lease cost Amortization of right-of-use assets 1 4 Interest on lease liabilities 3 4 Variable lease cost 24 68 Lease cost $ 58 $ 166 The following table contains supplemental cash flow information related to leases for the nine months ended September 30, 2019: (in millions) Nine months ended Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 89 Operating cash flows from finance leases 3 Financing cash flows from finance leases 3 Right-of-use operating lease assets obtained in exchange for lease obligations 164 There were no material lease transactions that we entered into but have not yet commenced as of September 30, 2019. Supplemental balance sheet information related to leases as of September 30, 2019 includes: (in millions) September 30, 2019 Operating leases Operating lease right-of-use assets $ 589 Accounts payable and accrued liabilities $ 98 Operating lease liabilities 494 Total operating lease liabilities $ 592 Finance leases Property, plant and equipment, at cost $ 65 Accumulated depreciation (19) Property, plant and equipment, net $ 46 Current maturities of long-term debt and finance lease obligations $ — Long-term debt and finance lease obligations 53 Total finance lease liabilities $ 53 Lease term and discount rates as of September 30, 2019 were: September 30, 2019 Weighted-average remaining lease term (years) Operating leases 10 Finance leases 15 Weighted-average discount rate Operating leases 2.8 % Finance leases 10.5 % Maturities of operating and finance lease liabilities as of September 30, 2019 were: (in millions) Finance Leases Operating Leases 2019 $ 2 $ 30 2020 7 104 2021 7 88 2022 7 74 2023 6 62 Thereafter 83 308 Total minimum lease payments 112 666 Less: imputed interest (59) (74) Present value of lease liabilities $ 53 $ 592 Future minimum lease payments as of December 31, 2018 were: As Restated (in millions) Capital Leases Operating Leases 2019 $ 7 $ 123 2020 7 94 2021 8 86 2022 8 72 2023 6 64 Thereafter 88 212 Total minimum lease payments 124 $ 651 Less: imputed interest (62) Present value of lease liabilities $ 62 Lessor Activity We lease medical equipment, such as renal dialysis equipment and infusion pumps, to customers, primarily in conjunction with arrangements to provide consumable medical products such as dialysis therapies, intravenous (IV) fluids and inhaled anesthetics. Certain of our equipment leases are classified as sales-type leases and the remainder are operating leases. The terms of the related contracts, including the proportion of fixed versus variable payments and any options to shorten or extend the lease term, vary by customer. We allocate revenue between equipment leases and medical products based on their standalone selling prices. The components of lease revenue for the three and nine months ended September 30, 2019 were: (in millions) Three months ended September 30, 2019 Nine months ended September 30, 2019 Sales-type lease revenue $ 3 $ 14 Operating lease revenue 16 46 Variable lease revenue 23 65 Total lease revenue $ 42 $ 125 The components of our net investment in sales-type leases as of September 30, 2019 were: (in millions) September 30, 2019 Minimum lease payments $ 83 Unguaranteed residual values 11 Net investment in leases $ 94 Our net investment in sales-type leases is classified as follows in the accompanying condensed consolidated balance sheets: (in millions) September 30, 2019 Accounts receivable, net $ 36 Other non-current assets 58 Total $ 94 Maturities of sales-type and operating leases as of September 30, 2019 were: (in millions) Sales-type Leases Operating Leases 2019 $ 10 $ 15 2020 31 61 2021 25 61 2022 17 58 2023 9 27 Thereafter 3 5 Total minimum lease payments 95 $ 227 Less: imputed interest (12) Present value of minimum lease payments $ 83 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES We are involved in product liability, patent, commercial, and other legal matters that arise in the normal course of our business. We record a liability when a loss is considered probable and the amount can be reasonably estimated. If the reasonable estimate of a probable loss is a range, and no amount within the range is a better estimate, the minimum amount in the range is accrued. If a loss is not probable or a probable loss cannot be reasonably estimated, no liability is recorded. As of September 30, 2019 and December 31, 2018, our total recorded reserves with respect to legal and environmental matters were $55 million and $46 million, respectively, and there were no related receivables. We have established reserves for certain of the matters discussed below. We are not able to estimate the amount or range of any loss for certain contingencies for which there is no reserve or additional loss for matters already reserved. While our liability in connection with these claims cannot be estimated and the resolution thereof in any reporting period could have a significant impact on our results of operations and cash flows for that period, the outcome of these legal proceedings is not expected to have a material adverse effect on our consolidated financial position. While we believe that we have valid defenses in the matters set forth below, litigation is inherently uncertain, excessive verdicts do occur, and we may incur material judgments or enter into material settlements of claims. In addition to the matters described below, we remain subject to the risk of future administrative and legal actions. With respect to governmental and regulatory matters, these actions may lead to product recalls, injunctions, and other restrictions on our operations and monetary sanctions, including significant civil or criminal penalties. With respect to intellectual property, we may be exposed to significant litigation concerning the scope of our and others’ rights. Such litigation could result in a loss of patent protection or the ability to market products, which could lead to a significant loss of sales, or otherwise materially affect future results of operations. Environmental We are involved as a potentially responsible party (PRP) for environmental clean-up costs at six Superfund sites. Under the U.S. Superfund statute and many state laws, generators of hazardous waste sent to a disposal or recycling site are liable for site cleanup if contaminants from that property later leak into the environment. The laws generally provide that a PRP may be held jointly and severally liable for the costs of investigating and remediating the site. Separate from the Superfund cases noted above, we are involved in an ongoing voluntary environmental remediation associated with historic operations at our Irvine, California, United States facility. As of September 30, 2019 and December 31, 2018, our environmental reserves, which are measured on an undiscounted basis, were $19 million. After considering these reserves, management is of the opinion that the outcome of these matters will not have a material adverse effect on our financial position or results of operations. General Litigation In November 2016, a purported antitrust class action complaint seeking monetary and injunctive relief was filed in the United States District Court for the Northern District of Illinois. The complaint alleges a conspiracy among manufacturers of IV solutions to restrict output and affect pricing in connection with a shortage of such solutions. Similar parallel actions subsequently were filed. In January 2017, a single consolidated complaint covering these matters was filed in the Northern District of Illinois. We filed a motion to dismiss the consolidated complaint in February 2017. The court granted our motion to dismiss the consolidated complaint without prejudice in July 2018. The plaintiffs filed an amended complaint on September 6, 2018. We filed a motion to dismiss the amended complaint on November 9, 2018. In April 2017, we became aware of a criminal investigation by the U.S. Department of Justice (DOJ), Antitrust Division and a federal grand jury in the United States District Court for the Eastern District of Pennsylvania. We and an employee received subpoenas seeking production of documents and testimony regarding the manufacturing, selling, pricing and shortages of IV solutions and containers (including saline solutions and certain other injectable medicines sold by us) and communications with competitors regarding the same. On November 30, 2018, the DOJ notified us that it had closed the investigation. The New York Attorney General has also requested that we provide information regarding business practices in the IV saline industry. We are cooperating with the New York Attorney General. In August 2019, we were named in an amended complaint filed by Fayette County, Georgia in the MDL In re: National Prescription Opiate Litigation pending in the U.S. District Court, Northern District of Ohio. The complaint alleges that multiple manufacturers and distributors of opiate products improperly marketed and diverted these products, which caused harm to Fayette County. The complaint is limited in its allegations as to Baxter and does not distinguish between injectable opiate products and orally administered opiates. We manufactured generic injectable opiate products in our facility in Cherry Hill, NJ, which we divested in 2011. In November 2019, we and certain of our officers were named in a class action complaint captioned Ethan E. Silverman et al. v. Baxter International Inc. et al. that was filed in the United States District Court for the Northern District of Illinois. The plaintiff, who allegedly purchased shares of our common stock during the specified class period, filed this putative class action on behalf of himself and shareholders who acquired Baxter common stock between February 21, 2019 and October 23, 2019. The plaintiff alleges that we and certain officers violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder by making allegedly false and misleading statements and failing to disclose material facts relating to certain intra-company transactions undertaken for the purpose of generating foreign exchange gains or avoiding foreign exchange losses, as well as our internal controls over financial reporting. On January 29, 2020, the Court appointed Varma Mutual Pension Insurance Company and Louisiana Municipal Police Employees Retirement System as lead plaintiffs in the case. In addition, we have received a stockholder request for inspection of our books and records in connection with the announcement made in our Form 8-K on October 24, 2019 that we had commenced an internal investigation into certain intra-company transactions that impacted our previously reported non-operating foreign exchange gains and losses. As initially disclosed on October 24, 2019, we also voluntarily advised the staff of the SEC of our previously disclosed internal investigation and we are continuing to cooperate with the staff of the SEC. In March 2020, two lawsuits were filed against us in the Northern District of Illinois by plaintiffs alleging injuries as a result of exposure to ethylene oxide used in our manufacturing facility in Mountain Home, Arkansas to sterilize certain of our products. The plaintiffs seek damages, including compensatory and punitive damages in an unspecified amount, and unspecified injunctive and declaratory relief. Other As previously disclosed, in 2008 we recalled our heparin sodium injection products in the United States. Following the recall, more than 1,000 lawsuits alleging that plaintiffs suffered various reactions to a heparin contaminant, in some cases resulting in fatalities, were filed. In January 2019, the last of these cases was settled. In the first nine months of 2019, following the resolution of an insurance dispute, we received cash proceeds of $39 million for our allocation of the insurance proceeds under a settlement and cost-sharing agreement related to the defense of the heparin product liability cases. We recognized a $37 million gain in connection with the resolution of the dispute with the insurer that is classified within other operating income, net on the condensed consolidated statement of income for the nine months ended September 30, 2019. In September 2017, Hurricane Maria caused damage to certain of our assets in Puerto Rico and disrupted operations. As previously disclosed, we realized $42 million of insurance recoveries in 2018 related to the damages and losses from that hurricane. In July 2019, an additional $40 million of claims were approved by our insurers and a gain was recognized within other operating income, net on the condensed consolidated statements of income for the three and nine months ended September 30, 2019. In October 2019, an additional $60 million of claims were approved by our insurers and a gain for that amount will be recognized within other operating income, net in the fourth quarter of 2019. No further insurance recoveries are expected. |
STOCKHOLDERS_ EQUITY
STOCKHOLDERS’ EQUITY | 9 Months Ended |
Sep. 30, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCKHOLDERS' EQUITY | STOCKHOLDERS’ EQUITY Cash Dividends Cash dividends declared per share for the three and nine months ended September 30, 2019 were $0.22 and $0.63, respectively. Cash dividends declared per share for the three and nine months ended September 30, 2018 were $0.19 and $0.54, respectively. Stock Repurchase Programs In July 2012, the Board of Directors authorized the repurchase of up to $2.0 billion of our common stock. The Board of Directors increased this authority by an additional $1.5 billion in each of November 2016 and February 2018 and by an additional $2.0 billion in November 2018. During the first nine months of 2019, we repurchased 13.5 million shares under this authority pursuant to Rule 10b5-1 plans and otherwise. As of September 30, 2019, we recognized a liability within accounts payable and accrued liabilities of $37 million for share repurchases that settled in early October 2019. During the first nine months of 2018, we repurchased 14.9 million shares pursuant to Rule 10b5-1 plans. We had $1.1 billion remaining available under the authorization as of September 30, 2019. In December 2018, we entered into a $300 million accelerated share repurchase agreement (ASR Agreement) with an investment bank. We funded the ASR Agreement with available cash. The ASR Agreement was executed pursuant to the 2012 Repurchase Authorization described above. Under the ASR Agreement, we received 3.6 million shares upon execution. Based on the volume-weighted average price of our common stock during the term of the ASR Agreement, we received an additional 0.6 million shares from the investment bank at settlement on May 7, 2019. |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE INCOME | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE INCOME | ACCUMULATED OTHER COMPREHENSIVE INCOME Comprehensive income includes all changes in stockholders’ equity that do not arise from transactions with stockholders, and consists of net income, currency translation adjustments (CTA), certain gains and losses from pension and other postretirement employee benefit (OPEB) plans, gains and losses on cash flow hedges and, prior to 2018, unrealized gains and losses on available-for-sale equity securities. As a result of changes in accounting guidance related to available-for-sale equity securities, the unrealized gains and losses associated with these assets are no longer recognized in AOCI beginning January 1, 2018. The following table is a net-of-tax summary of the changes in AOCI by component for the nine months ended September 30, 2019 and 2018. (in millions) CTA Pension and OPEB plans Hedging activities Total Gains (losses) Balance as of December 31, 2018 (as restated) $ (2,868) $ (954) $ (1) $ (3,823) Adoption of new accounting standard 9 (169) (1) (161) Other comprehensive income (loss) before reclassifications (272) 20 (66) (318) Amounts reclassified from AOCI (a) — 17 (3) 14 Net other comprehensive income (loss) (272) 37 (69) (304) Balance as of September 30, 2019 $ (3,131) $ (1,086) $ (71) $ (4,288) As Restated (in millions) CTA Pension and OPEB plans Hedging activities Available- for-sale- equity securities Total Gains (losses) Balance as of December 31, 2017 $ (2,545) $ (987) $ (10) $ 3 $ (3,539) Adoption of new accounting standard — — — (3) (3) Other comprehensive income (loss) before (314) 50 1 — (263) Amounts reclassified from AOCI (a) — 44 7 — 51 Net other comprehensive income (loss) (314) 94 8 — (212) Balance as of September 30, 2018 $ (2,859) $ (893) $ (2) $ — $ (3,754) (a) See table below for details about these reclassifications. The following is a summary of the amounts reclassified from AOCI to net income during the three and nine months ended September 30, 2019 and 2018. Amounts reclassified from AOCI (a) (in millions) Three months ended September 30, 2019 Nine months ended September 30, 2019 Location of impact in income statement Amortization of pension and OPEB items Amortization of net losses and prior service costs or credits $ (8) $ (23) Other income, net Less: Tax effect 4 6 Income tax expense $ (4) $ (17) Net of tax Gains on hedging activities Foreign exchange contracts $ 2 $ 3 Cost of sales Less: Tax effect — — Income tax expense $ 2 $ 3 Net of tax Total reclassifications for the period $ (2) $ (14) Total net of tax Amounts reclassified from AOCI (a) (in millions) Three months ended September 30, 2018 Nine months ended September 30, 2018 Location of impact in income statement Amortization of pension and OPEB items Amortization of net losses and prior service costs or credits $ (18) $ (54) Other income, net Less: Tax effect 4 10 Income tax expense $ (14) $ (44) Net of tax Losses on hedging activities Foreign exchange contracts $ (1) $ (11) Cost of sales Less: Tax effect 1 4 Income tax expense $ — $ (7) Net of tax Total reclassifications for the period $ (14) $ (51) Total net of tax (a) Amounts in parentheses indicate reductions to net income. Refer to Note 13 for additional information regarding the amortization of pension and OPEB items and Note 16 for additional information regarding hedging activity. |
REVENUES
REVENUES | 9 Months Ended |
Sep. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
REVENUES | REVENUES Revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods or providing services. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of account in the contract. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. Some of our contracts have multiple performance obligations. For contracts with multiple performance obligations, we allocate the contract’s transaction price to each performance obligation using our best estimate of the standalone selling price of each distinct good or service in the contract. Our global payment terms are typically between 30-90 days. The majority of our performance obligations are satisfied at a point in time. This includes sales of our broad portfolio of essential healthcare products across our geographic segments including acute and chronic dialysis therapies; sterile IV solutions; infusion systems and devices; parenteral nutrition therapies; inhaled anesthetics; generic injectable pharmaceuticals; and surgical hemostat and sealant products. For a majority of these sales, our performance obligation is satisfied upon delivery to the customer. Shipping and handling activities are considered to be fulfillment activities and are not considered to be a separate performance obligation. To a lesser extent, in all of our segments, we enter into other types of contracts including contract manufacturing arrangements, equipment leases, and certain subscription software and licensing arrangements. We recognize revenue for these arrangements over time or at a point in time depending on our evaluation of when the customer obtains control of the promised goods or services. Revenue is recognized over time when we are creating or enhancing an asset that the customer controls as the asset is created or enhanced or our performance does not create an asset with an alternative use and we have an enforceable right to payment for performance completed. On September 30, 2019, we had $9.0 billion of transaction price allocated to remaining performance obligations related to executed contracts with an original duration of one year or more, which are primarily included in the Americas segment. Some contracts in the United States included in this amount contain index-dependent price increases, which are not known at this time. We expect to recognize approximately 5% of this amount as revenue over the remainder of 2019, 20% in each year between 2020 and 2022, 10% in each of 2023 and 2024, and the remaining balance thereafter. Significant Judgments Revenues from product sales are recorded at the net sales price (transaction price), which includes estimates of variable consideration related to rebates, product returns, sales discounts and wholesaler chargebacks. These reserves are based on estimates of the amounts earned or to be claimed on the related sales and are included in accounts receivable, net and accounts payable and accrued liabilities on the condensed consolidated balance sheets. Management's estimates take into consideration historical experience, current contractual and statutory requirements, specific known market events and trends, industry data, and forecasted customer buying and payment patterns. Overall, these reserves reflect our best estimates of the amount of consideration to which we are entitled based on the terms of the contract using the expected value method. The amount of variable consideration included in the net sales price is limited to the amount that is probable not to result in a significant reversal in the amount of the cumulative revenue recognized in a future period. Revenue recognized during the three and nine months ended September 30, 2019 and 2018 related to performance obligations satisfied in prior periods was not material. Contract Balances The timing of revenue recognition, billings and cash collections results in the recognition of trade accounts receivable, unbilled receivables, contract assets and customer advances and deposits (contract liabilities) on our condensed consolidated balance sheets. Net trade accounts receivable was $1.7 billion and $1.8 billion as of September 30, 2019 and December 31, 2018, respectively. For contract manufacturing arrangements, revenue is primarily recognized throughout the production cycle, which typically lasts up to 90 days, resulting in the recognition of contract assets until the related services are completed and the customers are billed. Additionally, for arrangements containing a performance obligation to deliver software that can be used with medical devices, we recognize revenue upon delivery of the software, which results in the recognition of contract assets when customers are billed over time, generally over one one Disaggregation of Net Sales The following tables disaggregate our net sales from contracts with customers by Global Business Unit (GBU) between the U.S. and international: Three months ended September 30, As Restated 2019 2018 (in millions) U.S. International Total U.S. International Total Renal Care 1 $ 199 $ 719 $ 918 $ 209 $ 698 $ 907 Medication Delivery 2 461 240 701 418 234 652 Pharmaceuticals 3 223 304 527 240 278 518 Clinical Nutrition 4 80 139 219 80 137 217 Advanced Surgery 5 134 82 216 122 77 199 Acute Therapies 6 44 86 130 41 81 122 Other 7 83 57 140 84 62 146 Total Baxter $ 1,224 $ 1,627 $ 2,851 $ 1,194 $ 1,567 $ 2,761 Nine months ended September 30, As Restated 2019 2018 (in millions) U.S. International Total U.S. International Total Renal Care 1 $ 587 $ 2,092 $ 2,679 $ 609 $ 2,091 $ 2,700 Medication Delivery 2 1,308 716 2,024 1,280 726 2,006 Pharmaceuticals 3 690 885 1,575 745 803 1,548 Clinical Nutrition 4 236 403 639 243 417 660 Advanced Surgery 5 397 249 646 339 246 585 Acute Therapies 6 136 255 391 129 250 379 Other 7 183 186 369 206 182 388 Total Baxter $ 3,537 $ 4,786 $ 8,323 $ 3,551 $ 4,715 $ 8,266 1 Renal Care includes sales of our peritoneal dialysis (PD), hemodialysis (HD) and additional dialysis therapies and services. 2 Medication Delivery includes sales of our IV therapies, infusion pumps, administration sets and drug reconstitution devices. 3 Pharmaceuticals includes sales of our premixed and oncology drug platforms, inhaled anesthesia and critical care products and pharmacy compounding services. 4 Clinical Nutrition includes sales of our parenteral nutrition (PN) therapies and related products. 5 Advanced Surgery includes sales of our biological products and medical devices used in surgical procedures for hemostasis, tissue sealing and adhesion prevention. 6 Acute Therapies includes sales of our continuous renal replacement therapies (CRRT) and other organ support therapies focused in the intensive care unit (ICU). 7 Other primarily includes sales of contract manufacturing services from our pharmaceutical partnering business. |
BUSINESS OPTIMIZATION CHARGES
BUSINESS OPTIMIZATION CHARGES | 9 Months Ended |
Sep. 30, 2019 | |
Restructuring and Related Activities [Abstract] | |
BUSINESS OPTIMIZATION CHARGES | BUSINESS OPTIMIZATION CHARGESIn recent years, we have undertaken actions to transform our cost structure and enhance operational efficiency. These efforts include restructuring the organization, optimizing the manufacturing footprint, R&D operations and supply chain network, employing disciplined cost management, and centralizing and streamlining certain support functions. From the commencement of our business optimization activities in the second half of 2015 through September 30, 2019, we have incurred cumulative pre-tax costs of $927 million related to these actions. The costs consisted primarily of employee termination, implementation costs, asset impairments and accelerated depreciation. We currently expect to incur additional pre-tax costs of approximately $100 million through the completion of these initiatives under our current program. These costs will primarily include employee termination costs, implementation costs, and accelerated depreciation. To the extent further cost savings opportunities are identified, we may incur additional business optimization expenses. During the three and nine months ended September 30, 2019 and 2018, we recorded the following charges related to business optimization programs. Three months ended Nine months ended (in millions) 2019 2018 2019 2018 Restructuring charges $ 17 $ 63 $ 94 $ 96 Costs to implement business optimization programs 10 24 32 74 Accelerated depreciation 1 3 5 5 Total business optimization charges $ 28 $ 90 $ 131 $ 175 For segment reporting purposes, business optimization charges are unallocated expenses. Costs to implement business optimization programs for the three and nine months ended September 30, 2019 and 2018, respectively, consisted primarily of external consulting and transition costs, including employee compensation and related costs. The costs were generally included within cost of sales, selling, general and administrative (SG&A) expense and R&D expense. For the three and nine months ended September 30, 2019 and 2018, respectively, we recognized accelerated depreciation, primarily associated with facilities to be closed. The costs were recorded within cost of sales and SG&A expense. During the three and nine months ended September 30, 2019 and 2018, we recorded the following restructuring charges. Three months ended September 30, 2019 (in millions) COGS SG&A R&D Total Employee termination costs $ 1 $ 2 $ 2 $ 5 Contract termination and other costs 1 — — 1 Asset impairments 7 — 4 11 Total restructuring charges $ 9 $ 2 $ 6 $ 17 Three months ended September 30, 2018 (in millions) COGS SG&A R&D Total Employee termination costs $ 16 $ 33 $ 9 $ 58 Contract termination costs — 4 — 4 Asset impairments — 1 — 1 Total restructuring charges $ 16 $ 38 $ 9 $ 63 Nine months ended September 30, 2019 (in millions) COGS SG&A R&D Total Employee termination costs $ 7 $ 27 $ 28 $ 62 Contract termination and other costs 9 — — 9 Asset impairments 17 1 5 23 Total restructuring charges $ 33 $ 28 $ 33 $ 94 Nine months ended September 30, 2018 (in millions) COGS SG&A R&D Total Employee termination costs $ 20 $ 47 $ 19 $ 86 Contract termination costs — 6 — 6 Asset impairments 1 3 — 4 Total restructuring charges $ 21 $ 56 $ 19 $ 96 The following table summarizes activity in the liability related to our restructuring initiatives. (in millions) Liability balance as of December 31, 2018 $ 101 Charges 84 Payments (77) Reserve adjustments (13) Currency translation (5) Liability balance as of September 30, 2019 $ 90 Reserve adjustments primarily related to employee termination cost reserves established in prior periods. Substantially all of our restructuring liabilities as of September 30, 2019 relate to employee termination costs, with the remaining liabilities attributable to contract termination costs. Substantially all of the cash payments for those liabilities are expected to be disbursed by the end of 2020. |
PENSION AND OTHER POSTRETIREMEN
PENSION AND OTHER POSTRETIREMENT BENEFIT PROGRAMS | 9 Months Ended |
Sep. 30, 2019 | |
Retirement Benefits [Abstract] | |
PENSION AND OTHER POSTRETIREMENT BENEFIT PROGRAMS | PENSION AND OTHER POSTRETIREMENT BENEFIT PROGRAMS The following is a summary of net periodic benefit cost relating to our pension and OPEB plans. Three months ended Nine months ended (in millions) 2019 2018 2019 2018 Pension benefits Service cost $ 18 $ 23 $ 56 $ 70 Interest cost 47 45 137 136 Expected return on plan assets (74) (78) (214) (235) Amortization of net losses and prior service costs 15 24 44 72 Net periodic pension benefit cost $ 6 $ 14 $ 23 $ 43 OPEB Interest cost $ 2 $ 2 $ 6 $ 6 Amortization of net loss and prior service credit (7) (6) (21) (18) Net periodic OPEB cost $ (5) $ (4) $ (15) $ (12) As part of our continued effort to reduce pension plan obligations, we transferred approximately $2.4 billion of U.S. qualified pension plan liabilities to an insurance company through the purchase of a group annuity contract in October 2019. As a result of this transaction, we will recognize a non-cash pretax pension settlement charge of $755 million in the fourth quarter of 2019. |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES Our effective income tax rate was 22.0% and (39.2)% for the three months ended September 30, 2019 and 2018, respectively, and 13.7% and (3.1)% for the nine months ended September 30, 2019 and 2018, respectively. 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, increases or decreases in valuation allowances and liabilities for uncertain tax positions and excess tax benefits on stock compensation awards. For the three months ended September 30, 2019, our effective income tax rate was substantially consistent with the 21% U.S. federal statutory rate as unfavorable return-to-provision adjustments in various jurisdictions were offset by excess tax benefits on stock compensation awards. For the nine months ended September 30, 2019, the difference between our effective tax rate and the U.S. federal statutory rate was primarily attributable to excess tax benefits on stock compensation awards and the recognition of tax benefits associated with a favorable tax ruling. For the three months ended September 30, 2018, the difference between our effective income tax rate and the U.S. federal statutory rate was primarily driven by a benefit from an adjustment to the 2017 Tax Act provisional amounts as permitted by Staff Accounting Bulletin 118. Specifically, we released a $200 million valuation allowance related to our U.S. foreign tax credit deferred tax assets. For the nine months ended September 30, 2018, the difference between |
EARNINGS PER SHARE
EARNINGS PER SHARE | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE The numerator for both basic and diluted earnings per share (EPS) is net income. The denominator for basic EPS is the weighted-average number of shares outstanding during the period. The dilutive effect of outstanding stock options, restricted stock units (RSUs) and performance share units (PSUs) is reflected in the denominator for diluted EPS using the treasury stock method. The following table is a reconciliation of basic shares to diluted shares. Three months ended Nine months ended (in millions) 2019 2018 2019 2018 Basic shares 511 534 510 536 Effect of dilutive securities 9 12 10 12 Diluted shares 520 546 520 548 The effect of dilutive securities included unexercised stock options, unvested RSUs and contingently issuable shares related to granted PSUs. The computation of diluted EPS excluded 4 million equity awards each for the three and nine months ended September 30, 2019, respectively, and 3 million equity awards each for the three and nine months ended September 30, 2018, respectively, because their inclusion would have had an anti-dilutive effect on diluted EPS. |
DERIVATIVE INSTRUMENTS AND HEDG
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | 9 Months Ended |
Sep. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES We operate on a global basis and are exposed to the risk that our earnings, cash flows and equity could be adversely impacted by fluctuations in foreign exchange and interest rates. Our hedging policy attempts to manage these risks to an acceptable level based on our judgment of the appropriate trade-off between risk, opportunity and costs. We are primarily exposed to foreign exchange risk with respect to recognized assets and liabilities, forecasted transactions and net assets denominated in the Euro, British Pound, Chinese Yuan, Korean Won, Australian Dollar, Canadian Dollar, Japanese Yen, Colombian Peso, Brazilian Real, Mexican Peso and Swedish Krona. We manage our foreign currency exposures on a consolidated basis, which allows us to net exposures and take advantage of any natural offsets. In addition, we use derivative and nonderivative instruments to further reduce the net exposure to foreign exchange risk. Gains and losses on the hedging instruments offset losses and gains on the hedged transactions and reduce the earnings and equity volatility resulting from changes in foreign exchange rates. Financial market and currency volatility may limit our ability to cost-effectively hedge these exposures. We are also exposed to the risk that our earnings and cash flows could be adversely impacted by fluctuations in interest rates. Our policy is to manage interest costs using a mix of fixed- and floating-rate debt that we believe is appropriate. To manage this mix in a cost-efficient manner, we periodically enter into interest rate swaps in which we agree to exchange, at specified intervals, the difference between fixed and floating interest amounts calculated by reference to an agreed-upon notional amount. We do not hold any instruments for trading purposes and none of our outstanding derivative instruments contain credit-risk-related contingent features. All derivative instruments are recognized as either assets or liabilities at fair value in the condensed consolidated balance sheets and are classified as short-term or long-term based on the scheduled maturity of the instrument. We designate certain of our derivatives and foreign-currency denominated as hedging instruments in cash flow, fair value, or net investment hedges. Cash Flow Hed g es We may use options, including collars and purchased options, forwards and cross-currency swaps to hedge the foreign exchange risk to earnings relating to forecasted transactions and recognized assets and liabilities. We periodically use treasury rate locks to hedge the risk to earnings associated with movements in interest rates relating to anticipated issuances of debt. For each derivative instrument that is designated and effective as a cash flow hedge, the gain or loss on the derivative is recorded in AOCI and then recognized in earnings consistent with the underlying hedged item. Option premiums or net premiums paid are initially recorded as assets and reclassified to other comprehensive income (OCI) over the life of the option, and then recognized in earnings consistent with the underlying hedged item. Cash flow hedges are classified in cost of sales and interest expense, net, and are primarily related to forecasted third-party sales denominated in foreign currencies, forecasted intra-company sales denominated in foreign currencies, and anticipated issuances of debt, respectively. The notional amounts of foreign exchange contracts designated as cash flow hedges were $689 million and $706 million as of September 30, 2019 and December 31, 2018, respectively. The maximum term over which we have cash flow hedge contracts in place related to forecasted transactions at September 30, 2019 is 15 months for foreign exchange contracts. The total notional amounts of interest rate contracts designated as cash flow hedges were $550 million and $150 million as of September 30, 2019 and December 31, 2018, respectively. The interest rate contracts have maturity dates in 2022 and hedge the variability in future benchmark interest payments attributable to changes in interest rates on the forecasted issuance of fixed-rate debt. Fair Value Hed g es We periodically use interest rate swaps to convert a portion of our fixed-rate debt into variable-rate debt. These instruments hedge our earnings from changes in the fair value of debt due to fluctuations in the designated benchmark interest rate. For each derivative instrument that is designated and effective as a fair value hedge, the gain or loss on the derivative is recognized immediately to earnings, and offsets changes in fair value attributable to a particular risk, such as changes in interest rates, of the hedged item. Fair value hedges are classified in interest expense, net, as they hedge the interest rate risk associated with certain of our fixed-rate debt. There were no outstanding interest rate swap contracts designated as fair value hedges as of September 30, 2019 and December 31, 2018. Net Investment Hed g es In May 2017, we issued €600 million of senior notes due May 2025. In May 2019, we issued €750 million of senior notes due May 2024 and €750 million of senior notes due May 2029. We have designated these debt obligations as hedges of our net investment in our European operations and, as a result, mark to spot rate adjustments on the outstanding debt balances are recorded as a component of AOCI. As of September 30, 2019, we had an accumulated pre-tax unrealized translation gain in AOCI of $41 million related to the Euro-denominated senior notes. In May 2019, we entered into forward contracts designated as net investment hedges to reduce exposure to changes in currency rates on €1.2 billion of our net investment in our European operations. Those hedges were entered into in advance of the issuance of our senior notes mentioned above, were settled in the second quarter of 2019 and resulted in an insignificant loss. Dedesignations If it is determined that a derivative or nonderivative hedging instrument is no longer highly effective as a hedge, we discontinue hedge accounting prospectively. Gains or losses relating to terminations of effective cash flow hedges generally continue to be deferred and are recognized consistent with the loss or income recognition of the underlying hedged items. However, if it is probable that the hedged forecasted transactions will not occur, any gains or losses would be immediately reclassified from AOCI to earnings. There were no hedge dedesignations in the first nine months of 2019 or 2018 resulting from changes in our assessment of the probability that the hedged forecasted transactions would occur. If we terminate a fair value hedge, an amount equal to the cumulative fair value adjustment to the hedged item at the date of termination is amortized to earnings over the remaining term of the hedged item. There were no fair value hedges terminated during the first nine months of 2019. In the first nine months of 2018, we terminated our interest rate fair value hedges and the cumulative fair value adjustment to the hedged item was insignificant. If we terminate a net investment hedge, any gain or loss recognized in AOCI is not reclassified to earnings until we sell, liquidate, or deconsolidate the foreign investments that were being hedged. In the second quarter of 2019, we dedesignated €1.2 billion of forward contracts designated as a net investment hedge of our European operations. Undesignated Derivative Instruments We use forward contracts to hedge earnings from the effects of foreign exchange relating to certain of our intra-company and third-party receivables and payables denominated in a foreign currency. These derivative instruments are generally not formally designated as hedges and the terms of these instruments generally do not exceed one month. The total notional amount of undesignated derivative instruments was $562 million as of September 30, 2019 and $487 million as of December 31, 2018. Gains and Losses on Hedging Instruments The following tables summarize the income statement locations and gains and losses on our hedging instruments for the three months ended September 30, 2019 and 2018. Gain (loss) recognized in OCI Location of gain (loss) Gain (loss) reclassified from AOCI into income (in millions) 2019 2018 2019 2018 Cash flow hedges Interest rate contracts $ (57) $ — Interest expense, net $ — $ — Foreign exchange contracts 4 3 Cost of sales 2 (1) Net investment hedges 96 5 Other income, net — — Total $ 43 $ 8 $ 2 $ (1) Location of gain (loss) in income statement Gain (loss) recognized in income As Restated (in millions) 2019 2018 Undesignated derivative instruments Foreign exchange contracts Other income, net $ (4) $ 9 The following tables summarize the income statement locations and gains and losses on our hedging instruments for the nine months ended September 30, 2019 and 2018. Gain (loss) recognized in OCI Location of gain (loss) Gain (loss) reclassified from AOCI (in millions) 2019 2018 2019 2018 Cash flow hedges Interest rate contracts $ (91) $ — Interest expense, net $ — $ — Foreign exchange contracts 4 1 Cost of sales 3 (11) Net investment hedges 74 22 Other income, net — — Total $ (13) $ 23 $ 3 $ (11) Location of gain (loss) Gain (loss) recognized in income As Restated (in millions) 2019 2018 Fair value hedges Interest rate contracts Interest expense, net $ — $ (4) Undesignated derivative instruments Foreign exchange contracts Other income, net $ (16) $ 3 For our fair value hedges, an equal and offsetting gain of $4 million was recognized in interest expense, net as an adjustment to the underlying hedged item, fixed-rate debt, in the first nine months of 2018. As of September 30, 2019, $5 million of deferred, net after-tax gains on derivative instruments included in AOCI are expected to be recognized in earnings during the next 12 months, coinciding with when the hedged items are expected to impact earnings. Derivative Assets and Liabilities The following table summarizes the classification and fair values of derivative instruments reported in the condensed consolidated balance sheet as of September 30, 2019. Derivatives in asset positions Derivatives in liability positions (in millions) Balance sheet location Fair value Balance sheet location Fair value Derivative instruments designated as hedges Interest rate contracts Other non-current assets $ 1 Other non-current liabilities $ 95 Foreign exchange contracts Prepaid expenses and other current assets 24 Accounts payable and accrued liabilities 1 Foreign exchange contracts Other non-current assets 2 Other non-current liabilities — Total derivative instruments designated as hedges 27 96 Undesignated derivative instruments Foreign exchange contracts Prepaid expenses and other current assets — Accounts payable and accrued liabilities — Total derivative instruments $ 27 $ 96 The following table summarizes the classification and fair values of derivative instruments reported in the condensed consolidated balance sheet as of December 31, 2018. Derivatives in asset positions Derivatives in liability positions As Restated As Restated (in millions) Balance sheet location Fair value Balance sheet location Fair value Derivative instruments designated as hedges Interest rate contracts Other non-current assets $ — Other non-current liabilities $ 3 Foreign exchange contracts Prepaid expenses and other current assets 22 Accounts payable and accrued liabilities 1 Foreign exchange contracts Other non-current assets 1 Other non-current liabilities — Total derivative instruments designated as hedges 23 4 Undesignated derivative instruments Foreign exchange contracts Prepaid expenses and other current assets 2 Accounts payable and accrued liabilities 2 Total derivative instruments $ 25 $ 6 While some of our derivatives are subject to master netting arrangements, we present our assets and liabilities related to derivative instruments on a gross basis within the condensed consolidated balance sheets. Additionally, we are not required to post collateral for any of our outstanding derivatives. The following table provides information on our derivative positions as if they were presented on a net basis, allowing for the right of offset by counterparty. 2019 2018 As Restated (in millions) Asset Liability Asset Liability Gross amounts recognized in the consolidated balance sheet $ 27 $ 96 $ 25 $ 6 Gross amount subject to offset in master netting arrangements not offset in the consolidated balance sheet (2) (2) (3) (3) Total $ 25 $ 94 $ 22 $ 3 The following table presents the amounts recorded on the condensed consolidated balance sheet related to fair value hedges: Carrying amount of hedged item Cumulative amount of fair value hedging adjustment included in the carrying amount of the hedged item (a) (in millions) Balance as of September 30, 2019 Balance as of December 31, 2018 Balance as of September 30, 2019 Balance as of December 31, 2018 Long-term debt $ 103 $ 103 $ 6 $ 7 (a) These fair value hedges were terminated prior to December 31, 2018. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS The following tables summarize our financial instruments that are measured at fair value on a recurring basis. Basis of fair value measurement (in millions) Balance as of September 30, 2019 Quoted prices in active markets for identical assets Significant other Significant Assets Foreign exchange contracts $ 26 $ — $ 26 $ — Interest rate contracts 1 — 1 — Marketable equity securities 4 4 — — Total $ 31 $ 4 $ 27 $ — Liabilities Foreign exchange contracts $ 1 $ — $ 1 $ — Interest rate contracts 95 — 95 — Contingent payments related to acquisitions 27 — — 27 Total $ 123 $ — $ 96 $ 27 As Restated Basis of fair value measurement (in millions) Balance as of December 31, 2018 Quoted prices in active markets for identical assets Significant other Significant Assets Foreign exchange contracts $ 25 $ — $ 25 $ — Marketable equity securities 3 3 — — Total $ 28 $ 3 $ 25 $ — Liabilities Foreign exchange contracts $ 3 $ — $ 3 $ — Interest rate contracts 3 — 3 — Contingent payments related to acquisitions 32 — — 32 Total $ 38 $ — $ 6 $ 32 As of September 30, 2019 and December 31, 2018, cash and cash equivalents of $3.0 billion and $1.8 billion, respectively, included money market and other short-term funds of approximately $1.6 billion and $169 million, respectively, which are considered Level 2 in the fair value hierarchy. For assets that are measured using quoted prices in active markets, the fair value is the published market price per unit multiplied by the number of units held, without consideration of transaction costs. The majority of the derivatives entered into by us are valued using internal valuation techniques as no quoted market prices exist for such instruments. The principal techniques used to value these instruments are discounted cash flow and Black-Scholes models. The key inputs, which are considered observable and vary depending on the type of derivative, include contractual terms, interest rate yield curves, foreign exchange rates and volatility. Contingent payments related to acquisitions, which consist of milestone payments and sales-based payments, are valued using discounted cash flow techniques. The fair value of milestone payments reflects management’s expectations of probability of payment, and increases as the probability of payment increases or the expected timing of payments is accelerated. The fair value of sales-based payments is based upon probability-weighted future revenue estimates, and increases as revenue estimates increase, probability weighting of higher revenue scenarios increases or the expected timing of payment is accelerated. The following table is a reconciliation of the fair value measurements that use significant unobservable inputs (Level 3), which consist of contingent payments related to acquisitions. Three months ended Nine months ended (in millions) 2019 2018 2019 2018 Fair value at beginning of period $ 27 $ 23 $ 32 $ 9 Additions — 9 — 24 Change in fair value recognized in earnings — — (4) — Payments — — (1) (1) Fair value at end of period $ 27 $ 32 $ 27 $ 32 Equity investments not measured at fair value are comprised of other equity investments without readily determinable fair values and were $38 million at September 30, 2019 and $41 million at December 31, 2018. These amounts are included in Other non-current assets. Fair Values of Financial Instruments Not Measured at Fair Value In addition to the financial instruments that we are required to recognize at fair value in the condensed consolidated balance sheets, we have certain financial instruments that are recognized at amortized cost or some basis other than fair value. For these financial instruments, the following table provides the values recognized in the condensed consolidated balance sheets and the estimated fair values as of September 30, 2019 and December 31, 2018. Book values Fair values(a) As Restated (in millions) 2019 2018 2019 2018 Liabilities Short-term debt $ — $ 2 $ — $ 2 Current maturities of long-term debt and finance lease obligations 2 2 2 2 Long-term debt and finance lease obligations 5,063 3,481 5,466 3,469 (a) These fair value amounts are classified as Level 2 within the fair value hierarchy as they are estimated based on observable inputs. The carrying value of short-term debt approximates its fair value due to the short-term maturities of the obligations. The estimated fair values of current and long-term debt were computed by multiplying price by the notional amount of the respective debt instruments. Price is calculated using the stated terms of the respective debt instrument and yield curves commensurate with our credit risk. The carrying values of other financial instruments approximate their fair values due to the short-term maturities of most of those assets and liabilities. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION We manage our business based on three geographical segments: Americas (North and South America), EMEA (Europe, Middle East and Africa) and APAC (Asia Pacific). Our segments provide a broad portfolio of essential healthcare products, including acute and chronic dialysis therapies; sterile IV solutions; infusion systems and devices; parenteral nutrition therapies; inhaled anesthetics; generic injectable pharmaceuticals; and surgical hemostat and sealant products. We use operating income on a segment basis to make resource allocation decisions and assess the ongoing performance of our business segments. Intersegment sales are eliminated in consolidation. Certain items are maintained at Corporate and are not allocated to a segment. They primarily include the majority of foreign currency hedging activities, corporate headquarters costs, certain R&D costs, certain GBU support costs, stock compensation expense, certain employee benefit plan costs, and certain gains, losses, and other charges (such as business optimization, acquisition and integration costs, intangible asset amortization and asset impairments). Our chief operating decision maker does not receive any asset information by operating segment and, accordingly, we do not report asset information by operating segment. Financial information for our segments is as follows. Three months ended Nine months ended As Restated As Restated (in millions) 2019 2018 2019 2018 Net sales: Americas $ 1,534 $ 1,497 $ 4,462 $ 4,459 EMEA 730 707 2,179 2,180 APAC 587 557 1,682 1,627 Total net sales $ 2,851 $ 2,761 $ 8,323 $ 8,266 Operating income : Americas $ 595 $ 624 $ 1,715 $ 1,809 EMEA 162 164 465 475 APAC 138 137 394 383 Total segment operating income $ 895 $ 925 $ 2,574 $ 2,667 The following is a reconciliation of segment operating income to income before income taxes per the condensed consolidated statements of income. Three months ended Nine months ended As Restated As Restated (in millions) 2019 2018 2019 2018 Total segment operating income $ 895 $ 925 $ 2,574 $ 2,667 Corporate and other (392) (543) (1,338) (1,474) Total operating income 503 382 1,236 1,193 Net interest expense 13 11 51 34 Other (income) expense, net 9 (1) (8) (45) Income before income taxes $ 481 $ 372 $ 1,193 $ 1,204 Refer to Note 11 for additional information on Net Sales by GBU. |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | The unaudited interim condensed consolidated financial statements of Baxter International Inc. and its subsidiaries (we or our) have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP) in the United States have been condensed or omitted. These unaudited interim condensed consolidated financial statements should be read in conjunction with the restated consolidated financial statements and notes as of and for the year ended December 31, 2018 included in our Annual Report on Form 10-K for the year ended December 31, 2019 (2019 Annual Report) which was filed on March 17, 2020. In the opinion of management, the unaudited interim condensed consolidated financial statements reflect all adjustments necessary for a fair presentation of the financial position, results of operations and cash flows for the periods presented. All such adjustments, unless otherwise noted herein, are of a normal, recurring nature. The results of operations for the current interim period are not necessarily indicative of the results of operations to be expected for the full year. Certain reclassifications have been made to conform the prior period condensed consolidated statements to the current period presentation. |
New Accounting Standards | New Accounting Standards Recently adopted accounting pronouncements As of January 1, 2019, we adopted Accounting Standards Update (ASU) No. 2016-02, Leases (Topic 842). Under this guidance, lessees are required to recognize a right-of-use asset and a lease liability on the balance sheet for all operating leases, other than those that meet the definition of a short-term lease. We adopted Topic 842 using the modified retrospective method. We elected the following practical expedients when assessing the transition impact: i) not to reassess whether any expired or existing contracts as of the adoption date are or contain leases; ii) not to reassess the lease classification for any expired or existing leases as of the adoption date; and iii) not to reassess initial direct costs for any existing leases as of the adoption date. The adjustment to record operating lease right-of-use assets and operating lease liabilities was $502 million as of January 1, 2019. The impact to the condensed consolidated statements of income was not material and there was no net impact to the condensed consolidated statements of cash flows. As of January 1, 2019, we adopted ASU No. 2017-12, Targeted Improvements to Accounting for Hedging Activities. The purpose of this ASU is to better align a company’s risk management activities and financial reporting for hedging relationships, simplify the hedge accounting requirements, and improve the disclosures of hedging arrangements. The adoption of this standard did not have a material impact on our condensed consolidated financial statements. As of January 1, 2019, we adopted ASU No. 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (AOCI). As a result of the enactment of the U.S. Tax Cuts and Jobs Act of 2017 (the 2017 Tax Act), this guidance provides for a reclassification of certain tax effects from AOCI to retained earnings. The impact of the adoption of this standard was a $161 million increase to retained earnings. |
RESTATEMENT OF PREVIOUSLY ISS_2
RESTATEMENT OF PREVIOUSLY ISSUED CONSOLIDATED FINANCIAL STATEMENTS (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Changes and Error Corrections [Abstract] | |
Schedule of Quantifying Prior Year Misstatements Corrected in Current Year Financial Statements | Following the restated condensed consolidated financial statement tables, we have presented reconciliations from our prior periods as previously reported to the restated amounts. The amounts as previously reported for the three and nine months ended September 30, 2018 were derived from our Quarterly Report on Form 10-Q for the period ended September 30, 2018 filed on November 5, 2018. Baxter International Inc. Condensed Consolidated Balance Sheet (in millions, except per share) December 31, 2018 As previously reported Restatement impacts Restatement reference As restated Current assets: Cash and cash equivalents $ 1,832 $ 6 (e) $ 1,838 Accounts receivable, net 1,812 28 (e)(g) 1,840 Inventories 1,653 14 (e)(g) 1,667 Prepaid expenses and other current assets 622 (8) (b)(e)(g) 614 Total current assets 5,919 40 5,959 Property, plant and equipment, net 4,542 (12) (c)(e) 4,530 Goodwill 2,958 44 (e) 3,002 Other intangible assets, net 1,398 12 (e)(g) 1,410 Other non-current assets 824 (5) (a)(c)(e)(g) 819 Total assets $ 15,641 $ 79 $ 15,720 Current liabilities: Short-term debt $ 2 $ — $ 2 Current maturities of long-term debt and finance lease obligations 2 — 2 Accounts payable and accrued liabilities 2,832 (22) (b)(e)(g) 2,810 Total current liabilities 2,836 (22) 2,814 Long-term debt and finance lease obligations 3,473 8 (e) 3,481 Other non-current liabilities 1,516 43 (a)(c)(e)(g) 1,559 Total liabilities 7,825 29 7,854 Commitments and contingencies Equity: Common stock, $1 par value, authorized 2,000,000,000 shares, issued 683,494,944 shares 683 — 683 Common stock in treasury, at cost, 170,495,859 shares (9,989) — (9,989) Additional contributed capital 5,898 — 5,898 Retained earnings 15,626 (551) (a)(b)(c)(e)(g) 15,075 Accumulated other comprehensive (loss) income (4,424) 601 (a)(e) (3,823) Total Baxter stockholders’ equity 7,794 50 7,844 Noncontrolling interests 22 — 22 Total equity 7,816 50 7,866 Total liabilities and equity $ 15,641 $ 79 $ 15,720 (a) Foreign Currency Denominated Monetary Assets and Liabilities—The correction of these misstatements resulted in decreases to retained earnings of $487 million and accumulated other comprehensive loss of $482 million and increases to other non-current assets of $8 million and other non-current liabilities of $13 million as of December 31, 2018. (b) Foreign Currency Derivative Contracts—The correction of these misstatements resulted in increases to prepaid expenses and other current assets of $2 million, accounts payable and accrued liabilities of $1 million and retained earnings of $1 million as of December 31, 2018. (c) Equipment Leased to Customers under Operating Leases—The correction of these misstatements resulted in decreases to property, plant and equipment, net of $53 million, other non-current liabilities of $5 million, and retained earnings of $38 million, and an increase to other non-current assets of $10 million as of December 31, 2018. (e) Translation of the Financial Position and Results of Operations of our Foreign Operations into U.S. Dollars—The correction of these misstatements resulted in increases to cash and cash equivalents of $6 million, accounts receivable, net of $22 million, inventories of $19 million, prepaid expenses and other current assets of $2 million, property, plant and equipment of $41 million, goodwill of $44 million, other intangible assets, net of $13 million, other non-current assets of $6 million, accounts payable and accrued liabilities of $24 million, long-term debt and finance lease obligations of $8 million, and other non-current liabilities of $19 million as of December 31, 2018. The correction of these misstatements also resulted in decreases to retained earnings of $17 million and accumulated other comprehensive loss of $119 million as of December 31, 2018. (g) Other miscellaneous adjustments - The correction of these misstatements resulted in decreases to inventories of $5 million, prepaid expenses and other current assets of $12 million, other intangible assets, net of $1 million, other non-current assets of $29 million, accounts payable and accrued liabilities of $47 million, and retained earnings of $10 million, and increases to accounts receivable, net of $6 million and other non-current liabilities of $16 million as of December 31, 2018. Baxter International Inc. Condensed Consolidated Statement of Income (in millions, except per share) Three months ended September 30, 2018 As previously reported Restatement impacts Restatement reference As restated Net sales $ 2,767 $ (6) (e) $ 2,761 Cost of sales 1,531 (2) (c)(e) 1,529 Gross margin 1,236 (4) 1,232 Selling, general and administrative expenses 685 (1) (e) 684 Research and development expenses 166 — 166 Operating income 385 (3) 382 Interest expense, net 11 — 11 Other (income) expense, net (32) 31 (a)(b)(e) (1) Income before income taxes 406 (34) 372 Income tax benefit (138) (8) (a)(b)(c)(e) (146) Net income $ 544 $ (26) $ 518 Earnings per share Basic $ 1.02 $ (0.05) $ 0.97 Diluted $ 1.00 $ (0.05) $ 0.95 Weighted-average number of shares outstanding Basic 534 — 534 Diluted 546 — 546 (a) Foreign Currency Denominated Monetary Assets and Liabilities—The correction of these misstatements resulted in decreases to other (income) expense, net of $49 million and income tax expense of $10 million for the three months ended September 30, 2018. (b) Foreign Currency Derivative Contracts—The correction of these misstatements resulted in increases to other (income) expense, net of $19 million and income tax expense of $4 million for the three months ended September 30, 2018. (c) Equipment Leased to Customers under Operating Leases—The correction of these misstatements resulted in an increase to cost of sales of $4 million and a decrease to income tax expense of $1 million for the three months ended September 30, 2018. (e) Translation of the Financial Position and Results of Operations of our Foreign Operations into U.S. Dollars—The correction of these misstatements resulted in decreases to net sales of $6 million, cost of sales of $6 million, SG&A expense of $1 million, other (income) expense, net of $1 million, and income tax expense of $1 million for the three months ended September 30, 2018. Baxter International Inc. Condensed Consolidated Statement of Income (in millions, except per share) Nine months ended September 30, 2018 As previously reported Restatement impacts Restatement reference As restated Net sales $ 8,286 $ (20) (e) $ 8,266 Cost of sales 4,697 (7) (c)(e) 4,690 Gross margin 3,589 (13) 3,576 Selling, general and administrative expenses 1,988 5 (e)(f) 1,993 Research and development expenses 480 (1) (e) 479 Other operating income, net (80) (9) (f) (89) Operating income 1,201 (8) 1,193 Interest expense, net 34 — 34 Other (income) expense, net (81) 36 (a)(b)(e) (45) Income before income taxes 1,248 (44) 1,204 Income tax benefit (28) (9) (a)(c)(e) (37) Net income $ 1,276 $ (35) $ 1,241 Earnings per share Basic $ 2.38 $ (0.06) $ 2.32 Diluted $ 2.33 $ (0.07) $ 2.26 Weighted-average number of shares outstanding Basic 536 — 536 Diluted 548 — 548 (a) Foreign Currency Denominated Monetary Assets and Liabilities—The correction of these misstatements resulted in decreases to other (income) expense, net of $32 million and income tax expense of $5 million for the nine months ended September 30, 2018. (b) Foreign Currency Derivative Contracts—The correction of these misstatements resulted in a decrease to other (income) expense, net of $2 million for the nine months ended September 30, 2018. (c) Equipment Leased to Customers under Operating Leases—The correction of these misstatements resulted in an increase to cost of sales of $7 million and a decrease to income tax expense of $2 million for the nine months ended September 30, 2018. (e) Translation of the Financial Position and Results of Operations of our Foreign Operations into U.S. Dollars—The correction of these misstatements resulted in decreases to net sales of $20 million, cost of sales of $14 million, SG&A expense of $4 million, R&D expense of $1 million, other (income) expense, net of $2 million and income tax expense of $2 million for the nine months ended September 30, 2018. (f) Income Statement Classification of Transition Services Income—The correction of these misstatements resulted in increases to SG&A expense and other operating income, net of $9 million for the nine months ended September 30, 2018. Baxter International Inc. Condensed Consolidated Statement of Comprehensive Income (in millions) Three months ended September 30, 2018 As previously reported Restatement impacts As restated Net income $ 544 $ (26) $ 518 Other comprehensive (loss) income, net of tax: Currency translation adjustments (50) 41 (9) Pension and other postretirement benefit plans 8 1 9 Hedging activities 2 — 2 Total other comprehensive loss, net of tax (40) 42 2 Comprehensive income $ 504 $ 16 $ 520 Baxter International Inc. Condensed Consolidated Statement of Comprehensive Income (in millions) Nine months ended September 30, 2018 As previously reported Restatement impacts As restated Net income $ 1,276 $ (35) $ 1,241 Other comprehensive (loss) income, net of tax: Currency translation adjustments (332) 18 (314) Pension and other postretirement benefit plans 89 5 94 Hedging activities 8 — 8 Total other comprehensive loss, net of tax (235) 23 (212) Comprehensive income $ 1,041 $ (12) $ 1,029 Baxter International Inc. Condensed Consolidated Statement of Changes in Equity (in millions) For the Three Months Ended September 30, 2018 Baxter International Inc. stockholders' equity Common stock shares Common stock Common stock shares in treasury Common stock in treasury Additional contributed capital Retained earnings Accumulated other comprehensive income (loss) Total Baxter stockholders' equity Noncontrolling interests Total equity As previously reported Balance as of July 1, 2018 683 $ 683 148 $ (8,485) $ 5,916 $ 14,966 $ (4,199) $ 8,881 $ (12) $ 8,869 Net income — — — — — 544 — $ 544 — $ 544 Other comprehensive income (loss) — — — — — — (40) (40) — (40) Purchases of treasury stock — — 4 (247) — — — (247) — (247) Stock issued under employee benefit plans and other — — (2) 93 15 (14) — 94 — 94 Dividends declared on common stock — — — — — (102) — (102) — (102) Changes in noncontrolling interests — — — — — — — — (5) (5) Balance as of September 30, 2018 683 $ 683 150 $ (8,639) $ 5,931 $ 15,394 $ (4,239) $ 9,130 $ (17) $ 9,113 Restatement impacts Balance as of July 1, 2018 — $ — — $ — $ — $ (482) $ 443 $ (39) $ — $ (39) Net income — — — — — (26) — (26) — (26) Other comprehensive income (loss) — — — — — — 42 42 — 42 Balance as of September 30, 2018 — $ — — $ — $ — $ (508) $ 485 $ (23) $ — $ (23) As restated Balance as of July 1, 2018 683 $ 683 148 $ (8,485) $ 5,916 $ 14,484 $ (3,756) $ 8,842 $ (12) $ 8,830 Net income — — — — — 518 — 518 — 518 Other comprehensive income (loss) — — — — — — 2 2 — 2 Purchases of treasury stock — — 4 (247) — — — (247) — (247) Stock issued under employee benefit plans and other — — (2) 93 15 (14) — 94 — 94 Dividends declared on common stock — — — — — (102) — (102) — (102) Changes in noncontrolling interests — — — — — — — — (5) (5) Balance as of September 30, 2018 683 $ 683 150 $ (8,639) $ 5,931 $ 14,886 $ (3,754) $ 9,107 $ (17) $ 9,090 See descriptions of the net income and other comprehensive income impacts in the condensed consolidated statement of income and condensed consolidated statement of comprehensive income for the three months ended September 30, 2018 sections above. Baxter International Inc. Condensed Consolidated Statement of Changes in Equity (in millions) For the Nine Months Ended September 30, 2018 Baxter International Inc. stockholders' equity Common stock shares Common stock Common stock shares in treasury Common stock in treasury Additional contributed capital Retained earnings Accumulated other comprehensive income (loss) Total Baxter stockholders' equity Noncontrolling interests Total equity As previously reported Balance as of January 1, 2018 683 $ 683 142 $ (7,981) $ 5,940 $ 14,483 $ (4,001) $ 9,124 $ (8) $ 9,116 Adoption of new accounting standards — — — — — (16) (3) $ (19) — $ (19) Net income — — — — — 1,276 — $ 1,276 — $ 1,276 Other comprehensive income (loss) — — — — — — (235) (235) — (235) Purchases of treasury stock — — 15 (1,028) — — — (1,028) — (1,028) Stock issued under employee benefit plans and other — — (7) 370 (9) (59) — 302 — 302 Dividends declared on common stock — — — — — (290) — (290) — (290) Other changes in noncontrolling interests — — — — — — — — (9) (9) Balance as of September 30, 2018 683 $ 683 150 $ (8,639) $ 5,931 $ 15,394 $ (4,239) $ 9,130 $ (17) $ 9,113 Restatement impacts Balance as of January 1, 2018 — $ — — $ — $ — $ (469) $ 462 $ (7) $ — $ (7) Adoption of new accounting standards — — — — — (4) — (4) — (4) Net income — — — — — (35) — (35) — (35) Other comprehensive income (loss) — — — — — — 23 23 — 23 Balance as of September 30, 2018 — $ — — $ — $ — $ (508) $ 485 $ (23) $ — $ (23) As restated Balance as of January 1, 2018 683 $ 683 142 $ (7,981) $ 5,940 $ 14,014 $ (3,539) $ 9,117 $ (8) $ 9,109 Adoption of new accounting standards — — — — — (20) (3) (23) — (23) Net income — — — — — 1,241 — 1,241 — 1,241 Other comprehensive income (loss) — — — — — — (212) (212) — (212) Purchases of treasury stock — — 15 (1,028) — — — (1,028) — (1,028) Stock issued under employee benefit plans and other — — (7) 370 (9) (59) — 302 — 302 Dividends declared on common stock — — — — — (290) — (290) — (290) Other changes in noncontrolling interests — — — — — — — — (9) (9) Balance as of September 30, 2018 683 $ 683 150 $ (8,639) $ 5,931 $ 14,886 $ (3,754) $ 9,107 $ (17) $ 9,090 The adjustment to the January 1, 2018 retained earnings and accumulated other comprehensive loss represent the cumulative impacts of foreign exchange gains and losses and the translation of our financial position and results of operations for our foreign operations into U.S. dollars for the periods prior to January 1, 2018. Retained earnings also includes the cumulative impacts of equipment leased to customers under operating leases and other miscellaneous adjustments for the periods prior to January 1, 2018. Baxter International Inc. Condensed Consolidated Statement of Cash Flows (in millions) For the Nine Months Ended September 30, 2018 As previously reported Restatement impacts Restatement reference As restated Cash flows from operations Net income $ 1,276 $ (35) $ 1,241 Adjustments to reconcile net income to net cash from operating activities: Depreciation and amortization 594 (8) (c) 586 Deferred income taxes (284) (7) (c)(g) (291) Stock compensation 87 — 87 Net periodic pension benefit and other postretirement costs 31 — 31 Other 6 17 (d) 23 Changes in balance sheet items: Accounts receivable, net (16) — (16) Inventories (226) — (226) Accounts payable and accrued liabilities (31) (1) (b) (32) Other (96) 1 (e) (95) Cash flows from operations 1,341 (33) 1,308 Cash flows from investing activities Capital expenditures (468) 15 (c) (453) Acquisitions and investments, net of cash acquired (255) — (255) Other investing activities, net 8 — 8 Cash flows from investing activities (715) 15 (700) Cash flows from financing activities Cash dividends on common stock (274) — (274) Proceeds from stock issued under employee benefit plans 232 — 232 Purchases of treasury stock (1,028) — (1,028) Other financing activities, net (25) — (25) Cash flows from financing activities (1,095) — (1,095) Effect of foreign exchange rate changes on cash and cash equivalents (65) 12 (a)(d)(e) (53) Increase (decrease) in cash and cash equivalents (534) (6) (540) Cash and cash equivalents at beginning of period 3,394 9 (e) 3,403 Cash and cash equivalents at end of period $ 2,860 $ 3 (e) $ 2,863 The $35 million decrease to net income was driven by the items described above in the condensed consolidated statement of income for the nine months ended September 30, 2018 section. (a) Foreign Currency Denominated Monetary Assets and Liabilities—The correction of these misstatements resulted in an increase to the effect of foreign exchange rate changes on cash and cash equivalents of $35 million for the nine months ended September 30, 2018. (b) Foreign Currency Derivative Contracts—The correction of these misstatements resulted in a decrease to changes in accounts payable and accrued liabilities of $1 million for the nine months ended September 30, 2019. (c) Equipment Leased to Customers under Operating Leases—The correction of these misstatements resulted in decreases to depreciation and amortization of $8 million, deferred income taxes of $2 million and capital expenditures of $15 million for the nine months ended September 30, 2018. (d) Classification of Foreign Currency Gains and Losses in our Consolidated Statements of Cash Flows - The corrections of these misstatements resulted in a decrease to the effect of foreign exchange rate changes on cash and cash equivalents and an increase to other adjustments to reconcile net income to net cash from operating activities of $17 million for the nine months ended September 30, 2018. (e) Translation of the Financial Position and Results of Operations of our Foreign Operations into U.S. Dollars - The corrections of these misstatements resulted in an increase in cash and cash equivalents at the beginning of the period of $9 million, at the end of the period of $3 million, and other changes in balance sheet items of $1 million and a decrease to the effect of foreign exchange rate changes on cash and cash equivalents of $6 million for the nine months ended September 30, 2018. (g) Other miscellaneous adjustments - The correction of these misstatements resulted in a decrease to deferred income taxes of $5 million for the nine months ended September 30, 2018. |
ACQUISITIONS AND OTHER ARRANG_2
ACQUISITIONS AND OTHER ARRANGEMENTS (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Business Combinations [Abstract] | |
Schedule of Business Acquisitions by Acquisition, Contingent Consideration | The following table summarizes the fair value of consideration transferred: (in millions) Cash consideration transferred $ 197 Contingent consideration 18 Total consideration $ 215 |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes the fair values of the assets acquired and liabilities assumed as of the acquisition date: (in millions) Assets acquired and liabilities assumed Cash $ 2 Accounts receivable, net 3 Inventories 1 Prepaid expenses and other current assets 1 Property, plant and equipment 1 Goodwill 111 Other intangible assets 131 Operating lease right-of-use assets 1 Accounts payable and other accrued liabilities (4) Other non-current liabilities (32) Total assets acquired and liabilities assumed $ 215 |
SUPPLEMENTAL FINANCIAL INFORM_2
SUPPLEMENTAL FINANCIAL INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Interest Expense, Net | Interest Expense, Net Three months ended Nine months ended (in millions) 2019 2018 2019 2018 Interest expense, net of capitalized interest $ 28 $ 24 $ 81 $ 70 Interest income (15) (13) (30) (36) Interest expense, net $ 13 $ 11 $ 51 $ 34 |
Other Income, Net | Other (Income) Expense, Net Three months ended Nine months ended As Restated As Restated (in millions) 2019 2018 2019 2018 Foreign exchange losses (gains), net $ 30 $ 10 $ 44 $ (19) Pension and other postretirement benefit plans (17) (13) (48) (39) Other, net (4) 2 (4) 13 Other (income) expense, net $ 9 $ (1) $ (8) $ (45) |
Inventories | Inventories As Restated (in millions) September 30, December 31, Raw materials $ 380 $ 367 Work in process 194 207 Finished goods 1,141 1,093 Inventories $ 1,715 $ 1,667 |
Property, Plant and Equipment, Net | Property, Plant and Equipment, Net As Restated (in millions) September 30, December 31, Property, plant and equipment, at cost $ 10,379 $ 10,333 Accumulated depreciation (5,973) (5,803) Property, plant and equipment, net $ 4,406 $ 4,530 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS, NET (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | The following is a reconciliation of goodwill by business segment. (in millions) Americas EMEA APAC Total Balance as of December 31, 2018 (As Restated) $ 2,386 $ 393 $ 223 $ 3,002 Currency translation and other adjustments (121) (23) (11) (155) Balance as of September 30, 2019 $ 2,265 $ 370 $ 212 $ 2,847 |
Schedule of Indefinite-Lived Intangible Assets | Other intangible assets, net The following is a summary of our other intangible assets. (in millions) Developed technology, including patents Other amortized intangible assets Indefinite-lived intangible assets September 30, 2019 Gross other intangible assets $ 2,202 $ 447 $ 173 $ 2,822 Accumulated amortization (1,188) (269) — (1,457) Other intangible assets, net $ 1,014 $ 178 $ 173 $ 1,365 December 31, 2018 (As Restated) Gross other intangible assets $ 2,135 $ 457 $ 188 $ 2,780 Accumulated amortization (1,117) (253) — (1,370) Other intangible assets, net $ 1,018 $ 204 $ 188 $ 1,410 |
Schedule of Finite-Lived Intangible Assets | Other intangible assets, net The following is a summary of our other intangible assets. (in millions) Developed technology, including patents Other amortized intangible assets Indefinite-lived intangible assets September 30, 2019 Gross other intangible assets $ 2,202 $ 447 $ 173 $ 2,822 Accumulated amortization (1,188) (269) — (1,457) Other intangible assets, net $ 1,014 $ 178 $ 173 $ 1,365 December 31, 2018 (As Restated) Gross other intangible assets $ 2,135 $ 457 $ 188 $ 2,780 Accumulated amortization (1,117) (253) — (1,370) Other intangible assets, net $ 1,018 $ 204 $ 188 $ 1,410 |
LEASES (Tables)
LEASES (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Components of Lease Cost | The components of lease cost for the three and nine months ended September 30, 2019 were: (in millions) Three months ended September 30, 2019 Nine months ended Operating lease cost $ 30 $ 90 Finance lease cost Amortization of right-of-use assets 1 4 Interest on lease liabilities 3 4 Variable lease cost 24 68 Lease cost $ 58 $ 166 The following table contains supplemental cash flow information related to leases for the nine months ended September 30, 2019: (in millions) Nine months ended Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 89 Operating cash flows from finance leases 3 Financing cash flows from finance leases 3 Right-of-use operating lease assets obtained in exchange for lease obligations 164 |
Assets And Liabilities, Lessee | Supplemental balance sheet information related to leases as of September 30, 2019 includes: (in millions) September 30, 2019 Operating leases Operating lease right-of-use assets $ 589 Accounts payable and accrued liabilities $ 98 Operating lease liabilities 494 Total operating lease liabilities $ 592 Finance leases Property, plant and equipment, at cost $ 65 Accumulated depreciation (19) Property, plant and equipment, net $ 46 Current maturities of long-term debt and finance lease obligations $ — Long-term debt and finance lease obligations 53 Total finance lease liabilities $ 53 |
Lease, Term and Discount Rates | Lease term and discount rates as of September 30, 2019 were: September 30, 2019 Weighted-average remaining lease term (years) Operating leases 10 Finance leases 15 Weighted-average discount rate Operating leases 2.8 % Finance leases 10.5 % |
Lessee, Operating Lease, Liability, Maturity | Maturities of operating and finance lease liabilities as of September 30, 2019 were: (in millions) Finance Leases Operating Leases 2019 $ 2 $ 30 2020 7 104 2021 7 88 2022 7 74 2023 6 62 Thereafter 83 308 Total minimum lease payments 112 666 Less: imputed interest (59) (74) Present value of lease liabilities $ 53 $ 592 |
Finance Lease, Liability, Maturity | Maturities of operating and finance lease liabilities as of September 30, 2019 were: (in millions) Finance Leases Operating Leases 2019 $ 2 $ 30 2020 7 104 2021 7 88 2022 7 74 2023 6 62 Thereafter 83 308 Total minimum lease payments 112 666 Less: imputed interest (59) (74) Present value of lease liabilities $ 53 $ 592 |
Contractual Obligation, Fiscal Year Maturity Schedule | Future minimum lease payments as of December 31, 2018 were: As Restated (in millions) Capital Leases Operating Leases 2019 $ 7 $ 123 2020 7 94 2021 8 86 2022 8 72 2023 6 64 Thereafter 88 212 Total minimum lease payments 124 $ 651 Less: imputed interest (62) Present value of lease liabilities $ 62 |
Operating Lease, Lease Income | The components of lease revenue for the three and nine months ended September 30, 2019 were: (in millions) Three months ended September 30, 2019 Nine months ended September 30, 2019 Sales-type lease revenue $ 3 $ 14 Operating lease revenue 16 46 Variable lease revenue 23 65 Total lease revenue $ 42 $ 125 |
Sales-type Lease, Lease Income | The components of our net investment in sales-type leases as of September 30, 2019 were: (in millions) September 30, 2019 Minimum lease payments $ 83 Unguaranteed residual values 11 Net investment in leases $ 94 Our net investment in sales-type leases is classified as follows in the accompanying condensed consolidated balance sheets: (in millions) September 30, 2019 Accounts receivable, net $ 36 Other non-current assets 58 Total $ 94 |
Lessor, Operating Lease, Payments to be Received, Maturity | Maturities of sales-type and operating leases as of September 30, 2019 were: (in millions) Sales-type Leases Operating Leases 2019 $ 10 $ 15 2020 31 61 2021 25 61 2022 17 58 2023 9 27 Thereafter 3 5 Total minimum lease payments 95 $ 227 Less: imputed interest (12) Present value of minimum lease payments $ 83 |
Sales-type and Direct Financing Leases, Lease Receivable, Maturity | Maturities of sales-type and operating leases as of September 30, 2019 were: (in millions) Sales-type Leases Operating Leases 2019 $ 10 $ 15 2020 31 61 2021 25 61 2022 17 58 2023 9 27 Thereafter 3 5 Total minimum lease payments 95 $ 227 Less: imputed interest (12) Present value of minimum lease payments $ 83 |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE INCOME (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Summary of Changes in AOCI by Component | The following table is a net-of-tax summary of the changes in AOCI by component for the nine months ended September 30, 2019 and 2018. (in millions) CTA Pension and OPEB plans Hedging activities Total Gains (losses) Balance as of December 31, 2018 (as restated) $ (2,868) $ (954) $ (1) $ (3,823) Adoption of new accounting standard 9 (169) (1) (161) Other comprehensive income (loss) before reclassifications (272) 20 (66) (318) Amounts reclassified from AOCI (a) — 17 (3) 14 Net other comprehensive income (loss) (272) 37 (69) (304) Balance as of September 30, 2019 $ (3,131) $ (1,086) $ (71) $ (4,288) As Restated (in millions) CTA Pension and OPEB plans Hedging activities Available- for-sale- equity securities Total Gains (losses) Balance as of December 31, 2017 $ (2,545) $ (987) $ (10) $ 3 $ (3,539) Adoption of new accounting standard — — — (3) (3) Other comprehensive income (loss) before (314) 50 1 — (263) Amounts reclassified from AOCI (a) — 44 7 — 51 Net other comprehensive income (loss) (314) 94 8 — (212) Balance as of September 30, 2018 $ (2,859) $ (893) $ (2) $ — $ (3,754) |
Summary of Reclassification from AOCI to Net Income | The following is a summary of the amounts reclassified from AOCI to net income during the three and nine months ended September 30, 2019 and 2018. Amounts reclassified from AOCI (a) (in millions) Three months ended September 30, 2019 Nine months ended September 30, 2019 Location of impact in income statement Amortization of pension and OPEB items Amortization of net losses and prior service costs or credits $ (8) $ (23) Other income, net Less: Tax effect 4 6 Income tax expense $ (4) $ (17) Net of tax Gains on hedging activities Foreign exchange contracts $ 2 $ 3 Cost of sales Less: Tax effect — — Income tax expense $ 2 $ 3 Net of tax Total reclassifications for the period $ (2) $ (14) Total net of tax Amounts reclassified from AOCI (a) (in millions) Three months ended September 30, 2018 Nine months ended September 30, 2018 Location of impact in income statement Amortization of pension and OPEB items Amortization of net losses and prior service costs or credits $ (18) $ (54) Other income, net Less: Tax effect 4 10 Income tax expense $ (14) $ (44) Net of tax Losses on hedging activities Foreign exchange contracts $ (1) $ (11) Cost of sales Less: Tax effect 1 4 Income tax expense $ — $ (7) Net of tax Total reclassifications for the period $ (14) $ (51) Total net of tax (a) Amounts in parentheses indicate reductions to net income. |
REVENUES (Tables)
REVENUES (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Net Sales from Contracts with Customers by Global Business Unit | The following tables disaggregate our net sales from contracts with customers by Global Business Unit (GBU) between the U.S. and international: Three months ended September 30, As Restated 2019 2018 (in millions) U.S. International Total U.S. International Total Renal Care 1 $ 199 $ 719 $ 918 $ 209 $ 698 $ 907 Medication Delivery 2 461 240 701 418 234 652 Pharmaceuticals 3 223 304 527 240 278 518 Clinical Nutrition 4 80 139 219 80 137 217 Advanced Surgery 5 134 82 216 122 77 199 Acute Therapies 6 44 86 130 41 81 122 Other 7 83 57 140 84 62 146 Total Baxter $ 1,224 $ 1,627 $ 2,851 $ 1,194 $ 1,567 $ 2,761 Nine months ended September 30, As Restated 2019 2018 (in millions) U.S. International Total U.S. International Total Renal Care 1 $ 587 $ 2,092 $ 2,679 $ 609 $ 2,091 $ 2,700 Medication Delivery 2 1,308 716 2,024 1,280 726 2,006 Pharmaceuticals 3 690 885 1,575 745 803 1,548 Clinical Nutrition 4 236 403 639 243 417 660 Advanced Surgery 5 397 249 646 339 246 585 Acute Therapies 6 136 255 391 129 250 379 Other 7 183 186 369 206 182 388 Total Baxter $ 3,537 $ 4,786 $ 8,323 $ 3,551 $ 4,715 $ 8,266 1 Renal Care includes sales of our peritoneal dialysis (PD), hemodialysis (HD) and additional dialysis therapies and services. 2 Medication Delivery includes sales of our IV therapies, infusion pumps, administration sets and drug reconstitution devices. 3 Pharmaceuticals includes sales of our premixed and oncology drug platforms, inhaled anesthesia and critical care products and pharmacy compounding services. 4 Clinical Nutrition includes sales of our parenteral nutrition (PN) therapies and related products. 5 Advanced Surgery includes sales of our biological products and medical devices used in surgical procedures for hemostasis, tissue sealing and adhesion prevention. 6 Acute Therapies includes sales of our continuous renal replacement therapies (CRRT) and other organ support therapies focused in the intensive care unit (ICU). 7 Other primarily includes sales of contract manufacturing services from our pharmaceutical partnering business. |
BUSINESS OPTIMIZATION CHARGES (
BUSINESS OPTIMIZATION CHARGES (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Restructuring and Related Activities [Abstract] | |
Summary of Business Optimization Charges | During the three and nine months ended September 30, 2019 and 2018, we recorded the following charges related to business optimization programs. Three months ended Nine months ended (in millions) 2019 2018 2019 2018 Restructuring charges $ 17 $ 63 $ 94 $ 96 Costs to implement business optimization programs 10 24 32 74 Accelerated depreciation 1 3 5 5 Total business optimization charges $ 28 $ 90 $ 131 $ 175 |
Components of Restructuring Charges | During the three and nine months ended September 30, 2019 and 2018, we recorded the following restructuring charges. Three months ended September 30, 2019 (in millions) COGS SG&A R&D Total Employee termination costs $ 1 $ 2 $ 2 $ 5 Contract termination and other costs 1 — — 1 Asset impairments 7 — 4 11 Total restructuring charges $ 9 $ 2 $ 6 $ 17 Three months ended September 30, 2018 (in millions) COGS SG&A R&D Total Employee termination costs $ 16 $ 33 $ 9 $ 58 Contract termination costs — 4 — 4 Asset impairments — 1 — 1 Total restructuring charges $ 16 $ 38 $ 9 $ 63 Nine months ended September 30, 2019 (in millions) COGS SG&A R&D Total Employee termination costs $ 7 $ 27 $ 28 $ 62 Contract termination and other costs 9 — — 9 Asset impairments 17 1 5 23 Total restructuring charges $ 33 $ 28 $ 33 $ 94 Nine months ended September 30, 2018 (in millions) COGS SG&A R&D Total Employee termination costs $ 20 $ 47 $ 19 $ 86 Contract termination costs — 6 — 6 Asset impairments 1 3 — 4 Total restructuring charges $ 21 $ 56 $ 19 $ 96 |
Summary of Activity in Reserves Related to Restructuring Initiatives | The following table summarizes activity in the liability related to our restructuring initiatives. (in millions) Liability balance as of December 31, 2018 $ 101 Charges 84 Payments (77) Reserve adjustments (13) Currency translation (5) Liability balance as of September 30, 2019 $ 90 |
PENSION AND OTHER POSTRETIREM_2
PENSION AND OTHER POSTRETIREMENT BENEFIT PROGRAMS (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Retirement Benefits [Abstract] | |
Net Periodic Benefit Cost Relating to Pension and Other Postemployment Employee Benefit Plans | The following is a summary of net periodic benefit cost relating to our pension and OPEB plans. Three months ended Nine months ended (in millions) 2019 2018 2019 2018 Pension benefits Service cost $ 18 $ 23 $ 56 $ 70 Interest cost 47 45 137 136 Expected return on plan assets (74) (78) (214) (235) Amortization of net losses and prior service costs 15 24 44 72 Net periodic pension benefit cost $ 6 $ 14 $ 23 $ 43 OPEB Interest cost $ 2 $ 2 $ 6 $ 6 Amortization of net loss and prior service credit (7) (6) (21) (18) Net periodic OPEB cost $ (5) $ (4) $ (15) $ (12) |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Reconciliation of Basic Shares to Diluted Shares | The following table is a reconciliation of basic shares to diluted shares. Three months ended Nine months ended (in millions) 2019 2018 2019 2018 Basic shares 511 534 510 536 Effect of dilutive securities 9 12 10 12 Diluted shares 520 546 520 548 |
DERIVATIVE INSTRUMENTS AND HE_2
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Summary of Gains and Losses on Derivative Instruments | The following tables summarize the income statement locations and gains and losses on our hedging instruments for the three months ended September 30, 2019 and 2018. Gain (loss) recognized in OCI Location of gain (loss) Gain (loss) reclassified from AOCI into income (in millions) 2019 2018 2019 2018 Cash flow hedges Interest rate contracts $ (57) $ — Interest expense, net $ — $ — Foreign exchange contracts 4 3 Cost of sales 2 (1) Net investment hedges 96 5 Other income, net — — Total $ 43 $ 8 $ 2 $ (1) Location of gain (loss) in income statement Gain (loss) recognized in income As Restated (in millions) 2019 2018 Undesignated derivative instruments Foreign exchange contracts Other income, net $ (4) $ 9 The following tables summarize the income statement locations and gains and losses on our hedging instruments for the nine months ended September 30, 2019 and 2018. Gain (loss) recognized in OCI Location of gain (loss) Gain (loss) reclassified from AOCI (in millions) 2019 2018 2019 2018 Cash flow hedges Interest rate contracts $ (91) $ — Interest expense, net $ — $ — Foreign exchange contracts 4 1 Cost of sales 3 (11) Net investment hedges 74 22 Other income, net — — Total $ (13) $ 23 $ 3 $ (11) Location of gain (loss) Gain (loss) recognized in income As Restated (in millions) 2019 2018 Fair value hedges Interest rate contracts Interest expense, net $ — $ (4) Undesignated derivative instruments Foreign exchange contracts Other income, net $ (16) $ 3 |
Classification and Fair Values of Derivative Instruments | The following table summarizes the classification and fair values of derivative instruments reported in the condensed consolidated balance sheet as of September 30, 2019. Derivatives in asset positions Derivatives in liability positions (in millions) Balance sheet location Fair value Balance sheet location Fair value Derivative instruments designated as hedges Interest rate contracts Other non-current assets $ 1 Other non-current liabilities $ 95 Foreign exchange contracts Prepaid expenses and other current assets 24 Accounts payable and accrued liabilities 1 Foreign exchange contracts Other non-current assets 2 Other non-current liabilities — Total derivative instruments designated as hedges 27 96 Undesignated derivative instruments Foreign exchange contracts Prepaid expenses and other current assets — Accounts payable and accrued liabilities — Total derivative instruments $ 27 $ 96 The following table summarizes the classification and fair values of derivative instruments reported in the condensed consolidated balance sheet as of December 31, 2018. Derivatives in asset positions Derivatives in liability positions As Restated As Restated (in millions) Balance sheet location Fair value Balance sheet location Fair value Derivative instruments designated as hedges Interest rate contracts Other non-current assets $ — Other non-current liabilities $ 3 Foreign exchange contracts Prepaid expenses and other current assets 22 Accounts payable and accrued liabilities 1 Foreign exchange contracts Other non-current assets 1 Other non-current liabilities — Total derivative instruments designated as hedges 23 4 Undesignated derivative instruments Foreign exchange contracts Prepaid expenses and other current assets 2 Accounts payable and accrued liabilities 2 Total derivative instruments $ 25 $ 6 |
Derivative Positions Presented On Net Basis | The following table provides information on our derivative positions as if they were presented on a net basis, allowing for the right of offset by counterparty. 2019 2018 As Restated (in millions) Asset Liability Asset Liability Gross amounts recognized in the consolidated balance sheet $ 27 $ 96 $ 25 $ 6 Gross amount subject to offset in master netting arrangements not offset in the consolidated balance sheet (2) (2) (3) (3) Total $ 25 $ 94 $ 22 $ 3 |
Amounts Recorded on Condensed Consolidated Balance Sheet Related to Fair Value Hedges | The following table presents the amounts recorded on the condensed consolidated balance sheet related to fair value hedges: Carrying amount of hedged item Cumulative amount of fair value hedging adjustment included in the carrying amount of the hedged item (a) (in millions) Balance as of September 30, 2019 Balance as of December 31, 2018 Balance as of September 30, 2019 Balance as of December 31, 2018 Long-term debt $ 103 $ 103 $ 6 $ 7 (a) These fair value hedges were terminated prior to December 31, 2018. |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Summary of Financial Instruments Measured at Fair Value on Recurring Basis | The following tables summarize our financial instruments that are measured at fair value on a recurring basis. Basis of fair value measurement (in millions) Balance as of September 30, 2019 Quoted prices in active markets for identical assets Significant other Significant Assets Foreign exchange contracts $ 26 $ — $ 26 $ — Interest rate contracts 1 — 1 — Marketable equity securities 4 4 — — Total $ 31 $ 4 $ 27 $ — Liabilities Foreign exchange contracts $ 1 $ — $ 1 $ — Interest rate contracts 95 — 95 — Contingent payments related to acquisitions 27 — — 27 Total $ 123 $ — $ 96 $ 27 As Restated Basis of fair value measurement (in millions) Balance as of December 31, 2018 Quoted prices in active markets for identical assets Significant other Significant Assets Foreign exchange contracts $ 25 $ — $ 25 $ — Marketable equity securities 3 3 — — Total $ 28 $ 3 $ 25 $ — Liabilities Foreign exchange contracts $ 3 $ — $ 3 $ — Interest rate contracts 3 — 3 — Contingent payments related to acquisitions 32 — — 32 Total $ 38 $ — $ 6 $ 32 |
Reconciliation of Fair Value Measurements that Use Significant Unobservable Inputs | The following table is a reconciliation of the fair value measurements that use significant unobservable inputs (Level 3), which consist of contingent payments related to acquisitions. Three months ended Nine months ended (in millions) 2019 2018 2019 2018 Fair value at beginning of period $ 27 $ 23 $ 32 $ 9 Additions — 9 — 24 Change in fair value recognized in earnings — — (4) — Payments — — (1) (1) Fair value at end of period $ 27 $ 32 $ 27 $ 32 |
Book Values and Fair Values of Financial Instruments | the following table provides the values recognized in the condensed consolidated balance sheets and the estimated fair values as of September 30, 2019 and December 31, 2018. Book values Fair values(a) As Restated (in millions) 2019 2018 2019 2018 Liabilities Short-term debt $ — $ 2 $ — $ 2 Current maturities of long-term debt and finance lease obligations 2 2 2 2 Long-term debt and finance lease obligations 5,063 3,481 5,466 3,469 (a) These fair value amounts are classified as Level 2 within the fair value hierarchy as they are estimated based on observable inputs. |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Summary of Financial Information for Our Segments | Financial information for our segments is as follows. Three months ended Nine months ended As Restated As Restated (in millions) 2019 2018 2019 2018 Net sales: Americas $ 1,534 $ 1,497 $ 4,462 $ 4,459 EMEA 730 707 2,179 2,180 APAC 587 557 1,682 1,627 Total net sales $ 2,851 $ 2,761 $ 8,323 $ 8,266 Operating income : Americas $ 595 $ 624 $ 1,715 $ 1,809 EMEA 162 164 465 475 APAC 138 137 394 383 Total segment operating income $ 895 $ 925 $ 2,574 $ 2,667 |
Operating Income to Income Before Income Taxes Reconciliation | The following is a reconciliation of segment operating income to income before income taxes per the condensed consolidated statements of income. Three months ended Nine months ended As Restated As Restated (in millions) 2019 2018 2019 2018 Total segment operating income $ 895 $ 925 $ 2,574 $ 2,667 Corporate and other (392) (543) (1,338) (1,474) Total operating income 503 382 1,236 1,193 Net interest expense 13 11 51 34 Other (income) expense, net 9 (1) (8) (45) Income before income taxes $ 481 $ 372 $ 1,193 $ 1,204 |
Basis of Presentation - Additio
Basis of Presentation - Additional Information (Detail) - USD ($) $ in Millions | Jan. 01, 2019 | Sep. 30, 2019 |
Disclosure Basis Of Presentation Details [Line Items] | ||
Operating lease right-of-use asset | $ 589 | |
Operating lease liabilities | $ 502 | 494 |
ASU 2016-02 | ||
Disclosure Basis Of Presentation Details [Line Items] | ||
Operating lease right-of-use asset | 502 | |
ASU 2018-02 | ||
Disclosure Basis Of Presentation Details [Line Items] | ||
Other comprehensive income to retained earnings | $ 161 | $ (161) |
RESTATEMENT OF PREVIOUSLY ISS_3
RESTATEMENT OF PREVIOUSLY ISSUED CONSOLIDATED FINANCIAL STATEMENTS - Consolidated Balance Sheet (Details) - USD ($) $ / shares in Units, $ in Millions | Sep. 30, 2019 | Jun. 30, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Dec. 31, 2017 |
Current assets: | ||||||
Cash and cash equivalents | $ 3,009 | $ 1,838 | ||||
Accounts receivable, net | 1,814 | 1,840 | ||||
Inventories | 1,715 | 1,667 | ||||
Prepaid expenses and other current assets | 672 | 614 | ||||
Total current assets | 7,210 | 5,959 | ||||
Property, plant and equipment, net | 4,406 | 4,530 | ||||
Goodwill | 2,847 | 3,002 | ||||
Other intangible assets, net | 1,365 | 1,410 | ||||
Other non-current assets | 882 | 819 | ||||
Total assets | 17,299 | 15,720 | ||||
Current liabilities: | ||||||
Short-term debt | 0 | 2 | ||||
Current maturities of long-term debt and finance lease obligations | 2 | 2 | ||||
Accounts payable and accrued liabilities | 2,609 | 2,810 | ||||
Total current liabilities | 2,611 | 2,814 | ||||
Long-term debt and finance lease obligations | 5,063 | 3,481 | ||||
Other non-current liabilities | 1,514 | 1,559 | ||||
Total liabilities | 9,682 | 7,854 | ||||
Equity: | ||||||
Common stock | 683 | 683 | ||||
Common stock in treasury, at cost | (10,582) | (9,989) | ||||
Additional contributed capital | 5,926 | 5,898 | ||||
Retained earnings | 15,849 | 15,075 | ||||
Accumulated other comprehensive (loss) income | (4,288) | (3,823) | ||||
Total Baxter stockholders’ equity | 7,588 | 7,844 | ||||
Noncontrolling interests | 29 | 22 | ||||
Total equity | 7,617 | $ 7,803 | 7,866 | $ 9,090 | $ 8,830 | $ 9,109 |
Total liabilities and equity | $ 17,299 | $ 15,720 | ||||
Common stock, par value (in dollars per share) | $ 1 | $ 1 | ||||
Common stock, authorized (in shares) | 2,000,000,000 | 2,000,000,000 | ||||
Common stock, issued (in shares) | 683,494,944 | 683,494,944 | ||||
Treasury stock, common (in shares) | 170,495,859 | |||||
Translation of the Financial Position and Results of Operations of our Foreign Operations into U.S. Dollars | ||||||
Current assets: | ||||||
Prepaid expenses and other current assets | $ 2 | |||||
As previously reported | ||||||
Current assets: | ||||||
Cash and cash equivalents | 1,832 | |||||
Accounts receivable, net | 1,812 | |||||
Inventories | 1,653 | |||||
Prepaid expenses and other current assets | 622 | |||||
Total current assets | 5,919 | |||||
Property, plant and equipment, net | 4,542 | |||||
Goodwill | 2,958 | |||||
Other intangible assets, net | 1,398 | |||||
Other non-current assets | 824 | |||||
Total assets | 15,641 | |||||
Current liabilities: | ||||||
Short-term debt | 2 | |||||
Current maturities of long-term debt and finance lease obligations | 2 | |||||
Accounts payable and accrued liabilities | 2,832 | |||||
Total current liabilities | 2,836 | |||||
Long-term debt and finance lease obligations | 3,473 | |||||
Other non-current liabilities | 1,516 | |||||
Total liabilities | 7,825 | |||||
Equity: | ||||||
Common stock | 683 | |||||
Common stock in treasury, at cost | (9,989) | |||||
Additional contributed capital | 5,898 | |||||
Retained earnings | 15,626 | |||||
Accumulated other comprehensive (loss) income | (4,424) | |||||
Total Baxter stockholders’ equity | 7,794 | |||||
Noncontrolling interests | 22 | |||||
Total equity | 7,816 | 9,113 | 8,869 | 9,116 | ||
Total liabilities and equity | 15,641 | |||||
Restatement impacts | ||||||
Current assets: | ||||||
Cash and cash equivalents | 6 | |||||
Accounts receivable, net | 28 | |||||
Inventories | 14 | |||||
Prepaid expenses and other current assets | (8) | |||||
Total current assets | 40 | |||||
Property, plant and equipment, net | (12) | |||||
Goodwill | 44 | |||||
Other intangible assets, net | 12 | |||||
Other non-current assets | (5) | |||||
Total assets | 79 | |||||
Current liabilities: | ||||||
Short-term debt | 0 | |||||
Current maturities of long-term debt and finance lease obligations | 0 | |||||
Accounts payable and accrued liabilities | (22) | |||||
Total current liabilities | (22) | |||||
Long-term debt and finance lease obligations | 8 | |||||
Other non-current liabilities | 43 | |||||
Total liabilities | 29 | |||||
Equity: | ||||||
Common stock | 0 | |||||
Common stock in treasury, at cost | 0 | |||||
Additional contributed capital | 0 | |||||
Retained earnings | (551) | |||||
Accumulated other comprehensive (loss) income | 601 | |||||
Total Baxter stockholders’ equity | 50 | |||||
Noncontrolling interests | 0 | |||||
Total equity | 50 | $ (23) | $ (39) | $ (7) | ||
Total liabilities and equity | 79 | |||||
Restatement impacts | Foreign Currency Denominated Monetary Assets and Liabilities | ||||||
Current assets: | ||||||
Other non-current assets | 8 | |||||
Current liabilities: | ||||||
Other non-current liabilities | 13 | |||||
Equity: | ||||||
Retained earnings | 487 | |||||
Accumulated other comprehensive (loss) income | 482 | |||||
Restatement impacts | Equipment Leased to Customers under Operating Leases | ||||||
Current assets: | ||||||
Property, plant and equipment, net | 53 | |||||
Other non-current assets | 10 | |||||
Current liabilities: | ||||||
Other non-current liabilities | 5 | |||||
Equity: | ||||||
Retained earnings | 38 | |||||
Restatement impacts | Translation of the Financial Position and Results of Operations of our Foreign Operations into U.S. Dollars | ||||||
Current assets: | ||||||
Cash and cash equivalents | 6 | |||||
Accounts receivable, net | 22 | |||||
Inventories | 19 | |||||
Property, plant and equipment, net | 41 | |||||
Goodwill | 44 | |||||
Other intangible assets, net | 13 | |||||
Other non-current assets | 6 | |||||
Current liabilities: | ||||||
Accounts payable and accrued liabilities | 24 | |||||
Long-term debt and finance lease obligations | 8 | |||||
Other non-current liabilities | 19 | |||||
Equity: | ||||||
Retained earnings | 17 | |||||
Accumulated other comprehensive (loss) income | 119 | |||||
Restatement impacts | Other miscellaneous adjustments | ||||||
Current assets: | ||||||
Accounts receivable, net | 6 | |||||
Inventories | 5 | |||||
Prepaid expenses and other current assets | 12 | |||||
Other intangible assets, net | 1 | |||||
Other non-current assets | 29 | |||||
Current liabilities: | ||||||
Accounts payable and accrued liabilities | 47 | |||||
Other non-current liabilities | 16 | |||||
Equity: | ||||||
Retained earnings | 10 | |||||
Restatement impacts | Foreign exchange contracts | Foreign Currency Derivative Contracts | ||||||
Current assets: | ||||||
Prepaid expenses and other current assets | 2 | |||||
Current liabilities: | ||||||
Accounts payable and accrued liabilities | 1 | |||||
Equity: | ||||||
Retained earnings | $ 1 |
RESTATEMENT OF PREVIOUSLY ISS_4
RESTATEMENT OF PREVIOUSLY ISSUED CONSOLIDATED FINANCIAL STATEMENTS - Consolidated Statement of Income (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Net sales | $ 2,851 | $ 2,761 | $ 8,323 | $ 8,266 |
Cost of sales | 1,621 | 1,529 | 4,860 | 4,690 |
Gross margin | 1,230 | 1,232 | 3,463 | 3,576 |
Selling, general and administrative expenses | 627 | 684 | 1,869 | 1,993 |
Research and development expenses | 144 | 166 | 439 | 479 |
Operating income | 503 | 382 | 1,236 | 1,193 |
Interest expense, net | 13 | 11 | 51 | 34 |
Other (income) expense, net | 9 | (1) | (8) | (45) |
Income before income taxes | 481 | 372 | 1,193 | 1,204 |
Income tax expense (benefit) | 106 | (146) | 163 | (37) |
Net income | $ 369 | $ 518 | $ 1,024 | $ 1,241 |
Earnings per share | ||||
Basic (in dollars per share) | $ 0.72 | $ 0.97 | $ 2.01 | $ 2.32 |
Diluted (in dollars per share) | $ 0.71 | $ 0.95 | $ 1.97 | $ 2.26 |
Weighted-average number of shares outstanding | ||||
Basic (in shares) | 511 | 534 | 510 | 536 |
Diluted (in shares) | 520 | 546 | 520 | 548 |
As previously reported | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Net sales | $ 2,767 | $ 8,286 | ||
Cost of sales | 1,531 | 4,697 | ||
Gross margin | 1,236 | 3,589 | ||
Selling, general and administrative expenses | 685 | 1,988 | ||
Research and development expenses | 166 | 480 | ||
Other operating income, net | (80) | |||
Operating income | 385 | 1,201 | ||
Interest expense, net | 11 | 34 | ||
Other (income) expense, net | (32) | (81) | ||
Income before income taxes | 406 | 1,248 | ||
Income tax expense (benefit) | (138) | (28) | ||
Net income | $ 544 | $ 1,276 | ||
Earnings per share | ||||
Basic (in dollars per share) | $ 1.02 | $ 2.38 | ||
Diluted (in dollars per share) | $ 1 | $ 2.33 | ||
Weighted-average number of shares outstanding | ||||
Basic (in shares) | 534 | 536 | ||
Diluted (in shares) | 546 | 548 | ||
Restatement impacts | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Net sales | $ (6) | $ (20) | ||
Cost of sales | (2) | (7) | ||
Gross margin | (4) | (13) | ||
Selling, general and administrative expenses | (1) | 5 | ||
Research and development expenses | 0 | (1) | ||
Other operating income, net | (9) | |||
Operating income | (3) | (8) | ||
Interest expense, net | 0 | 0 | ||
Other (income) expense, net | $ 30 | 31 | $ 34 | 36 |
Income before income taxes | (34) | (44) | ||
Income tax expense (benefit) | (8) | (9) | ||
Net income | $ (26) | $ (35) | ||
Earnings per share | ||||
Basic (in dollars per share) | $ (0.05) | $ (0.06) | ||
Diluted (in dollars per share) | $ (0.05) | $ (0.07) | ||
Weighted-average number of shares outstanding | ||||
Basic (in shares) | 0 | 0 | ||
Diluted (in shares) | 0 | 0 | ||
Restatement impacts | Foreign Currency Denominated Monetary Assets and Liabilities | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Other (income) expense, net | $ 49 | $ 32 | ||
Income tax expense (benefit) | 10 | 5 | ||
Restatement impacts | Equipment Leased to Customers under Operating Leases | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Cost of sales | 4 | 7 | ||
Income tax expense (benefit) | 1 | 2 | ||
Restatement impacts | Translation of the Financial Position and Results of Operations of our Foreign Operations into U.S. Dollars | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Net sales | 6 | (20) | ||
Cost of sales | 6 | 14 | ||
Selling, general and administrative expenses | 1 | 4 | ||
Research and development expenses | 1 | |||
Other (income) expense, net | 1 | 2 | ||
Income tax expense (benefit) | 1 | 2 | ||
Restatement impacts | Income Statement Classification of Transition Services Income | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Selling, general and administrative expenses | 9 | |||
Other operating income, net | (9) | |||
Restatement impacts | Foreign exchange contracts | Foreign Currency Derivative Contracts | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Other (income) expense, net | 19 | $ 2 | ||
Income tax expense (benefit) | $ 4 |
RESTATEMENT OF PREVIOUSLY ISS_5
RESTATEMENT OF PREVIOUSLY ISSUED CONSOLIDATED FINANCIAL STATEMENTS - Consolidated Statement of Comprehensive Income (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Net income | $ 369 | $ 518 | $ 1,024 | $ 1,241 |
Other comprehensive (loss) income, net of tax: | ||||
Currency translation adjustments | (177) | (9) | (272) | (314) |
Pension and other postretirement benefit plans | 17 | 9 | 37 | 94 |
Hedging activities | (42) | 2 | (69) | 8 |
Net other comprehensive income (loss) | (202) | 2 | (304) | (212) |
Comprehensive income | 173 | 520 | 726 | 1,029 |
Net income | $ 375 | 518 | $ 1,030 | 1,241 |
As previously reported | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Net income | 544 | 1,276 | ||
Other comprehensive (loss) income, net of tax: | ||||
Currency translation adjustments | (50) | (332) | ||
Pension and other postretirement benefit plans | 8 | 89 | ||
Hedging activities | 2 | 8 | ||
Net other comprehensive income (loss) | (40) | (235) | ||
Comprehensive income | 504 | 1,041 | ||
Net income | 544 | 1,276 | ||
Restatement impacts | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Net income | (26) | (35) | ||
Other comprehensive (loss) income, net of tax: | ||||
Currency translation adjustments | 41 | 18 | ||
Pension and other postretirement benefit plans | 1 | 5 | ||
Hedging activities | 0 | 0 | ||
Net other comprehensive income (loss) | 42 | 23 | ||
Comprehensive income | 16 | (12) | ||
Net income | (26) | (35) | ||
Restatement impacts | Foreign Exchange Rate Used To Translate | ||||
Other comprehensive (loss) income, net of tax: | ||||
Currency translation adjustments | 8 | (14) | ||
Restatement impacts | Offsetting Balance Sheet Impact Adjustments | ||||
Other comprehensive (loss) income, net of tax: | ||||
Currency translation adjustments | $ 49 | $ 32 |
RESTATEMENT OF PREVIOUSLY ISS_6
RESTATEMENT OF PREVIOUSLY ISSUED CONSOLIDATED FINANCIAL STATEMENTS - Consolidated Statement of Changes in Equity (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2017 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||||
Beginning of period (in shares) | 683,494,944 | |||||||
Beginning of period | $ 7,803 | $ 8,830 | $ 7,866 | $ 9,109 | $ 9,109 | |||
Treasury stock, shares (in shares) | 175,461,299 | 175,461,299 | 170,495,859 | |||||
Adoption of new accounting standards | $ 0 | (23) | ||||||
Net income | $ 369 | 518 | 1,024 | 1,241 | ||||
Other comprehensive income (loss) | (202) | 2 | $ (304) | $ (212) | ||||
Purchases of treasury stock (in shares) | 13,500,000 | 14,900,000 | ||||||
Purchases of treasury stock | (346) | (247) | $ (1,043) | $ (1,028) | ||||
Stock issued under employee benefit plans and other | 105 | 94 | 394 | 302 | ||||
Dividends declared on common stock | (117) | (102) | (327) | (290) | ||||
Change in noncontrolling interests | $ (1) | (5) | $ 1 | (9) | ||||
End of period (in shares) | 683,494,944 | 683,494,944 | 683,494,944 | |||||
End of period | $ 7,617 | 9,090 | $ 7,617 | 9,090 | $ 7,866 | |||
Net income | $ 375 | $ 518 | $ 1,030 | $ 1,241 | ||||
Common stock | ||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||||
Beginning of period (in shares) | 683,000,000 | 683,000,000 | 683,000,000 | 683,000,000 | 683,000,000 | |||
Beginning of period | $ 683 | $ 683 | $ 683 | $ 683 | $ 683 | |||
End of period (in shares) | 683,000,000 | 683,000,000 | 683,000,000 | 683,000,000 | 683,000,000 | |||
End of period | $ 683 | $ 683 | $ 683 | $ 683 | $ 683 | |||
Common stock in treasury | ||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||||
Beginning of period | $ (10,322) | $ (8,485) | $ (9,989) | $ (7,981) | $ (7,981) | |||
Treasury stock, shares (in shares) | 175,000,000 | 150,000,000 | 175,000,000 | 150,000,000 | 170,000,000 | 173,000,000 | 148,000,000 | 142,000,000 |
Purchases of treasury stock (in shares) | 4,000,000 | 4,000,000 | 14,000,000 | 15,000,000 | ||||
Purchases of treasury stock | $ (346) | $ (247) | $ (1,089) | $ (1,028) | ||||
Stock issued under employee benefit plans and other (in shares) | (2,000,000) | (2,000,000) | (9,000,000) | (7,000,000) | ||||
Stock issued under employee benefit plans and other | $ 86 | $ 93 | $ 496 | $ 370 | ||||
End of period | (10,582) | (8,639) | (10,582) | (8,639) | $ (9,989) | |||
Additional contributed capital | ||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||||
Beginning of period | 5,906 | 5,916 | 5,898 | 5,940 | 5,940 | |||
Purchases of treasury stock | 0 | 46 | ||||||
Stock issued under employee benefit plans and other | 20 | 15 | (18) | (9) | ||||
End of period | 5,926 | 5,931 | 5,926 | 5,931 | 5,898 | |||
Retained earnings | ||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||||
Beginning of period | 15,598 | 14,484 | 15,075 | 14,014 | 14,014 | |||
Adoption of new accounting standards | 161 | (20) | ||||||
Stock issued under employee benefit plans and other | (1) | (14) | (84) | (59) | ||||
Dividends declared on common stock | (117) | (102) | (327) | (290) | ||||
End of period | 15,849 | 14,886 | 15,849 | 14,886 | 15,075 | |||
Net income | 369 | 518 | 1,024 | 1,241 | ||||
Accumulated other comprehensive income (loss) | ||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||||
Beginning of period | (4,086) | (3,756) | (3,823) | (3,539) | (3,539) | |||
Adoption of new accounting standards | (161) | (3) | ||||||
Other comprehensive income (loss) | (202) | 2 | (304) | (212) | ||||
End of period | (4,288) | (3,754) | (4,288) | (3,754) | (3,823) | |||
Total Baxter stockholders' equity | ||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||||
Beginning of period | 7,779 | 8,842 | 7,844 | 9,117 | 9,117 | |||
Adoption of new accounting standards | (23) | |||||||
Other comprehensive income (loss) | (202) | 2 | (304) | (212) | ||||
Purchases of treasury stock | (346) | (247) | (1,043) | (1,028) | ||||
Stock issued under employee benefit plans and other | 105 | 94 | 394 | 302 | ||||
Dividends declared on common stock | (117) | (102) | (327) | (290) | ||||
End of period | 7,588 | 9,107 | 7,588 | 9,107 | 7,844 | |||
Net income | 369 | 518 | 1,024 | 1,241 | ||||
Noncontrolling interests | ||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||||
Beginning of period | 24 | (12) | 22 | (8) | (8) | |||
Change in noncontrolling interests | (1) | (5) | 1 | (9) | ||||
End of period | 29 | (17) | 29 | (17) | 22 | |||
Net income | $ 6 | 6 | ||||||
As previously reported | ||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||||
Beginning of period | 8,869 | 7,816 | 9,116 | 9,116 | ||||
Adoption of new accounting standards | (19) | |||||||
Net income | 544 | 1,276 | ||||||
Other comprehensive income (loss) | (40) | (235) | ||||||
Purchases of treasury stock | (247) | (1,028) | ||||||
Stock issued under employee benefit plans and other | 94 | 302 | ||||||
Dividends declared on common stock | (102) | (290) | ||||||
Change in noncontrolling interests | (5) | (9) | ||||||
End of period | 9,113 | 9,113 | $ 7,816 | |||||
Net income | $ 544 | $ 1,276 | ||||||
As previously reported | Common stock | ||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||||
Beginning of period (in shares) | 683,000,000 | 683,000,000 | 683,000,000 | |||||
Beginning of period | $ 683 | $ 683 | $ 683 | |||||
End of period (in shares) | 683,000,000 | 683,000,000 | ||||||
End of period | $ 683 | $ 683 | ||||||
As previously reported | Common stock in treasury | ||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||||
Beginning of period | $ (8,485) | $ (7,981) | (7,981) | |||||
Treasury stock, shares (in shares) | 150,000,000 | 150,000,000 | 148,000,000 | 142,000,000 | ||||
Purchases of treasury stock (in shares) | 4,000,000 | 15,000,000 | ||||||
Purchases of treasury stock | $ (247) | $ (1,028) | ||||||
Stock issued under employee benefit plans and other (in shares) | (2,000,000) | (7,000,000) | ||||||
Stock issued under employee benefit plans and other | $ 93 | $ 370 | ||||||
End of period | (8,639) | (8,639) | ||||||
As previously reported | Additional contributed capital | ||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||||
Beginning of period | 5,916 | 5,940 | 5,940 | |||||
Stock issued under employee benefit plans and other | 15 | (9) | ||||||
End of period | 5,931 | 5,931 | ||||||
As previously reported | Retained earnings | ||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||||
Beginning of period | 14,966 | 14,483 | 14,483 | |||||
Adoption of new accounting standards | (16) | |||||||
Stock issued under employee benefit plans and other | (14) | (59) | ||||||
Dividends declared on common stock | (102) | (290) | ||||||
End of period | 15,394 | 15,394 | ||||||
Net income | 544 | 1,276 | ||||||
As previously reported | Accumulated other comprehensive income (loss) | ||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||||
Beginning of period | (4,199) | (4,001) | (4,001) | |||||
Adoption of new accounting standards | (3) | |||||||
Other comprehensive income (loss) | (40) | (235) | ||||||
End of period | (4,239) | (4,239) | ||||||
As previously reported | Total Baxter stockholders' equity | ||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||||
Beginning of period | 8,881 | 9,124 | 9,124 | |||||
Adoption of new accounting standards | (19) | |||||||
Other comprehensive income (loss) | (40) | (235) | ||||||
Purchases of treasury stock | (247) | (1,028) | ||||||
Stock issued under employee benefit plans and other | 94 | 302 | ||||||
Dividends declared on common stock | (102) | (290) | ||||||
End of period | 9,130 | 9,130 | ||||||
Net income | 544 | 1,276 | ||||||
As previously reported | Noncontrolling interests | ||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||||
Beginning of period | (12) | (8) | (8) | |||||
Change in noncontrolling interests | (5) | (9) | ||||||
End of period | (17) | (17) | ||||||
Restatement impacts | ||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||||
Beginning of period | (39) | $ 50 | (7) | (7) | ||||
Adoption of new accounting standards | (4) | |||||||
Net income | (26) | (35) | ||||||
Other comprehensive income (loss) | 42 | 23 | ||||||
End of period | (23) | (23) | $ 50 | |||||
Net income | $ (26) | $ (35) | ||||||
Restatement impacts | Common stock | ||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||||
Beginning of period (in shares) | 0 | 0 | 0 | |||||
Beginning of period | $ 0 | $ 0 | $ 0 | |||||
End of period (in shares) | 0 | 0 | ||||||
End of period | $ 0 | $ 0 | ||||||
Restatement impacts | Common stock in treasury | ||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||||
Beginning of period | $ 0 | $ 0 | 0 | |||||
Treasury stock, shares (in shares) | 0 | 0 | 0 | 0 | ||||
End of period | $ 0 | $ 0 | ||||||
Restatement impacts | Additional contributed capital | ||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||||
Beginning of period | 0 | 0 | 0 | |||||
End of period | 0 | 0 | ||||||
Restatement impacts | Retained earnings | ||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||||
Beginning of period | (482) | (469) | (469) | |||||
Adoption of new accounting standards | (4) | |||||||
End of period | (508) | (508) | ||||||
Net income | (26) | (35) | ||||||
Restatement impacts | Accumulated other comprehensive income (loss) | ||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||||
Beginning of period | 443 | 462 | 462 | |||||
Other comprehensive income (loss) | 42 | 23 | ||||||
End of period | 485 | 485 | ||||||
Restatement impacts | Total Baxter stockholders' equity | ||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||||
Beginning of period | (39) | (7) | (7) | |||||
Adoption of new accounting standards | (4) | |||||||
Other comprehensive income (loss) | 42 | 23 | ||||||
End of period | (23) | (23) | ||||||
Net income | (26) | (35) | ||||||
Restatement impacts | Noncontrolling interests | ||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||||
Beginning of period | 0 | 0 | $ 0 | |||||
End of period | $ 0 | $ 0 |
RESTATEMENT OF PREVIOUSLY ISS_7
RESTATEMENT OF PREVIOUSLY ISSUED CONSOLIDATED FINANCIAL STATEMENTS - Consolidated Statement of Cash Flows (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2017 | |
Cash flows from operations | |||||
Net income | $ 369 | $ 518 | $ 1,024 | $ 1,241 | |
Adjustments to reconcile net income to cash flows from operations: | |||||
Depreciation and amortization | 580 | 586 | |||
Deferred income taxes | (45) | (291) | |||
Stock compensation | 92 | 87 | |||
Net periodic pension benefit and other postretirement costs | 8 | 31 | |||
Intangible asset impairment | 31 | 0 | |||
Changes in balance sheet items: | |||||
Accounts receivable, net | (23) | (16) | |||
Inventories | (88) | (226) | |||
Accounts payable and accrued liabilities | (249) | (32) | |||
Other | (145) | (95) | |||
Cash flows from operations – continuing operations | 1,281 | 1,308 | |||
Cash flows from investing activities | |||||
Capital expenditures | (505) | (453) | |||
Acquisitions and investments | (186) | (255) | |||
Other investing activities, net | 12 | 8 | |||
Cash flows from investing activities | (679) | (700) | |||
Cash flows from financing activities | |||||
Cash dividends on common stock | (310) | (274) | |||
Proceeds from stock issued under employee benefit plans | 334 | 232 | |||
Purchases of treasury stock | (1,029) | (1,028) | |||
Other financing activities, net | (42) | (25) | |||
Cash flows from financing activities | 614 | (1,095) | |||
Effect of foreign exchange rate changes on cash and cash equivalents | (39) | (53) | |||
Increase (decrease) in cash and cash equivalents | 1,171 | (540) | |||
Cash and cash equivalents at beginning of period | 1,838 | 3,403 | |||
Cash and cash equivalents at end of period | 3,009 | 2,863 | 3,009 | 2,863 | |
Proceeds from stock issued under employee benefit plans | 334 | 232 | |||
Net income | $ 375 | 518 | $ 1,030 | 1,241 | |
As previously reported | |||||
Cash flows from operations | |||||
Net income | 544 | 1,276 | |||
Adjustments to reconcile net income to cash flows from operations: | |||||
Depreciation and amortization | 594 | ||||
Deferred income taxes | (284) | ||||
Stock compensation | 87 | ||||
Net periodic pension benefit and other postretirement costs | 31 | ||||
Intangible asset impairment | 6 | ||||
Changes in balance sheet items: | |||||
Accounts receivable, net | (16) | ||||
Inventories | (226) | ||||
Accounts payable and accrued liabilities | (31) | ||||
Other | (96) | ||||
Cash flows from operations – continuing operations | 1,341 | ||||
Cash flows from investing activities | |||||
Capital expenditures | (468) | ||||
Acquisitions and investments | (255) | ||||
Other investing activities, net | 8 | ||||
Cash flows from investing activities | (715) | ||||
Cash flows from financing activities | |||||
Cash dividends on common stock | (274) | ||||
Proceeds from stock issued under employee benefit plans | 232 | ||||
Purchases of treasury stock | (1,028) | ||||
Other financing activities, net | (25) | ||||
Cash flows from financing activities | (1,095) | ||||
Effect of foreign exchange rate changes on cash and cash equivalents | (65) | ||||
Increase (decrease) in cash and cash equivalents | (534) | ||||
Cash and cash equivalents at beginning of period | 3,394 | ||||
Cash and cash equivalents at end of period | 2,860 | 2,860 | |||
Proceeds from stock issued under employee benefit plans | 232 | ||||
Net income | 544 | 1,276 | |||
Restatement impacts | |||||
Cash flows from operations | |||||
Net income | (26) | (35) | |||
Adjustments to reconcile net income to cash flows from operations: | |||||
Depreciation and amortization | (8) | ||||
Deferred income taxes | (7) | ||||
Stock compensation | 0 | ||||
Net periodic pension benefit and other postretirement costs | 0 | ||||
Intangible asset impairment | 17 | ||||
Changes in balance sheet items: | |||||
Accounts receivable, net | 0 | ||||
Inventories | 0 | ||||
Accounts payable and accrued liabilities | (1) | ||||
Other | 1 | ||||
Cash flows from operations – continuing operations | (33) | ||||
Cash flows from investing activities | |||||
Capital expenditures | 15 | ||||
Acquisitions and investments | 0 | ||||
Other investing activities, net | 0 | ||||
Cash flows from investing activities | 15 | ||||
Cash flows from financing activities | |||||
Cash dividends on common stock | 0 | ||||
Proceeds from stock issued under employee benefit plans | 0 | ||||
Purchases of treasury stock | 0 | ||||
Other financing activities, net | 0 | ||||
Cash flows from financing activities | 0 | ||||
Effect of foreign exchange rate changes on cash and cash equivalents | 12 | ||||
Increase (decrease) in cash and cash equivalents | (6) | ||||
Cash and cash equivalents at beginning of period | 9 | ||||
Cash and cash equivalents at end of period | 3 | 3 | |||
Proceeds from stock issued under employee benefit plans | 0 | ||||
Net income | (26) | (35) | |||
Restatement impacts | Equipment Leased to Customers under Operating Leases | |||||
Adjustments to reconcile net income to cash flows from operations: | |||||
Depreciation and amortization | (8) | ||||
Deferred income taxes | (2) | ||||
Cash flows from investing activities | |||||
Capital expenditures | 15 | ||||
Restatement impacts | Correction of Classification of Foreign Currency Gains and Losses in our Consolidated Statements of Cash Flows | |||||
Cash flows from financing activities | |||||
Effect of Exchange Rate on Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | 17 | ||||
Restatement impacts | Other Miscellaneous Adjustments to Cash Flows [Member] | |||||
Adjustments to reconcile net income to cash flows from operations: | |||||
Deferred income taxes | 5 | ||||
Restatement impacts | Foreign Currency Denominated Monetary Assets and Liabilities | |||||
Cash flows from financing activities | |||||
Effect of Exchange Rate on Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | 35 | ||||
Restatement impacts | Foreign Currency Derivative Contracts | Foreign exchange contracts | |||||
Changes in balance sheet items: | |||||
Accounts payable and accrued liabilities | 1 | ||||
Restatement impacts | Correction Of Translation Of The Financial Position And Results Of Operations Into U.S. Dollars Misstatements | |||||
Changes in balance sheet items: | |||||
Other | 1 | ||||
Cash flows from financing activities | |||||
Effect of Exchange Rate on Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | 6 | ||||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | $ 3 | $ 3 | $ 9 |
RESTATEMENT OF PREVIOUSLY ISS_8
RESTATEMENT OF PREVIOUSLY ISSUED CONSOLIDATED FINANCIAL STATEMENTS - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Other Nonoperating Income (Expense) | $ (9) | $ 1 | $ 8 | $ 45 |
Selling, general and administrative expenses | 627 | 684 | 1,869 | 1,993 |
Restatement impacts | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Other Nonoperating Income (Expense) | $ (30) | (31) | $ (34) | (36) |
Selling, general and administrative expenses | $ (1) | $ 5 |
Acquisitions and Other Arrang_3
Acquisitions and Other Arrangements - Additional Information (Details) $ in Millions | Oct. 02, 2019USD ($) | Jan. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Oct. 31, 2019USD ($) | Sep. 30, 2019USD ($) | Oct. 25, 2019USD ($) |
Subsequent Event | Developed Technology Rights Acquisition | ||||||
Acquisitions And Collaborations [Line Items] | ||||||
Asset acquisition, consideration transferred | $ 60 | |||||
Developed Technology Intangible Asset | Subsequent Event | Developed Technology Rights Acquisition | ||||||
Acquisitions And Collaborations [Line Items] | ||||||
Finite-Lived Intangible Asset, Useful Life | 11 years | |||||
U.S. Rights to Multiple Products | ||||||
Acquisitions And Collaborations [Line Items] | ||||||
Payments to acquire rights | $ 166 | |||||
Weighted-average useful life | 11 years | |||||
Net sales | $ 0 | |||||
Cheetah Medical, Inc. | Subsequent Event | ||||||
Acquisitions And Collaborations [Line Items] | ||||||
Percentage of voting interests acquired | 100.00% | |||||
Cash consideration transferred | $ 197 | $ 195 | ||||
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, High | $ 40 | |||||
Total consideration | 215 | |||||
Other intangible assets | $ 131 | |||||
Cheetah Medical, Inc. | Developed Product Rights | Subsequent Event | ||||||
Acquisitions And Collaborations [Line Items] | ||||||
Weighted-average useful life | 15 years | |||||
Cash consideration transferred | $ 123 | |||||
Cheetah Medical, Inc. | Customer Relationships | Subsequent Event | ||||||
Acquisitions And Collaborations [Line Items] | ||||||
Weighted-average useful life | 13 years | |||||
Other intangible assets | $ 8 | |||||
Cheetah Medical, Inc. | Measurement Input, Discount Rate | Developed Product Rights | Subsequent Event | ||||||
Acquisitions And Collaborations [Line Items] | ||||||
Alternative Investment, Measurement Input | 0.110 | |||||
Cheetah Medical, Inc. | Measurement Input, Discount Rate | Customer Relationships | Subsequent Event | ||||||
Acquisitions And Collaborations [Line Items] | ||||||
Alternative Investment, Measurement Input | 0.100 | |||||
Seprafilm Adhesion Barrier | Subsequent Event | ||||||
Acquisitions And Collaborations [Line Items] | ||||||
Cash consideration transferred | $ 345 |
ACQUISITIONS AND OTHER ARRANG_4
ACQUISITIONS AND OTHER ARRANGEMENTS - Summary of Fair Value of Consideration Transferred (Details) - Cheetah Medical, Inc. - Subsequent Event - USD ($) $ in Millions | Oct. 02, 2019 | Oct. 31, 2019 |
Business Acquisition [Line Items] | ||
Cash consideration transferred | $ 197 | $ 195 |
Contingent consideration | 18 | |
Total consideration | $ 215 |
ACQUISITIONS AND OTHER ARRANG_5
ACQUISITIONS AND OTHER ARRANGEMENTS - Schedule of Fair Value of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Millions | Oct. 02, 2019 | Sep. 30, 2019 | Dec. 31, 2018 |
Business Acquisition [Line Items] | |||
Goodwill | $ 2,847 | $ 3,002 | |
Cheetah Medical, Inc. | Subsequent Event | |||
Business Acquisition [Line Items] | |||
Cash | $ 2 | ||
Accounts receivable, net | 3 | ||
Inventories | 1 | ||
Prepaid expenses and other current assets | 1 | ||
Property, plant and equipment | 1 | ||
Goodwill | 111 | ||
Other intangible assets | 131 | ||
Operating lease right-of-use assets | 1 | ||
Accounts payable and other accrued liabilities | (4) | ||
Other non-current liabilities | (32) | ||
Total assets acquired and liabilities assumed | $ 215 |
Supplemental Financial Inform_3
Supplemental Financial Information - Interest Expense, Net (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Interest Income Expense Net | ||||
Interest expense, net of capitalized interest | $ 28 | $ 24 | $ 81 | $ 70 |
Interest income | (15) | (13) | (30) | (36) |
Interest expense, net | $ 13 | $ 11 | $ 51 | $ 34 |
Supplemental Financial Inform_4
Supplemental Financial Information - Other Income, Net (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Other Income, net | ||||
Foreign exchange losses (gains), net | $ 30 | $ 10 | $ 44 | $ (19) |
Pension and other postretirement benefit plans | 17 | 13 | 48 | 39 |
Other, net | (4) | 2 | (4) | 13 |
Other (income) expense, net | $ 9 | $ (1) | $ (8) | $ (45) |
Supplemental Financial Inform_5
Supplemental Financial Information - Inventories (Detail) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Raw materials | $ 380 | $ 367 |
Work in process | 194 | 207 |
Finished goods | 1,141 | 1,093 |
Inventories | $ 1,715 | $ 1,667 |
Supplemental Financial Inform_6
Supplemental Financial Information - Property, Plant and Equipment, Net (Detail) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Property, plant and equipment, at cost | $ 10,379 | $ 10,333 |
Accumulated depreciation | (5,973) | (5,803) |
Property, plant and equipment, net | $ 4,406 | $ 4,530 |
Supplemental Financial Inform_7
Supplemental Financial Information - Additional Information (Detail) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Property, Plant and Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Additions | $ 47 | $ 62 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets, Net - Goodwill (Detail) $ in Millions | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | $ 3,002 |
Currency translation and other adjustments | (155) |
Goodwill, ending balance | 2,847 |
Americas | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | 2,386 |
Currency translation and other adjustments | (121) |
Goodwill, ending balance | 2,265 |
EMEA | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | 393 |
Currency translation and other adjustments | (23) |
Goodwill, ending balance | 370 |
APAC | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | 223 |
Currency translation and other adjustments | (11) |
Goodwill, ending balance | $ 212 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets, Net - Other Intangible Assets, Net (Detail) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Intangible Asset Excluding Goodwill [Line Items] | ||
Gross other intangible assets | $ 2,822 | $ 2,780 |
Accumulated amortization | (1,457) | (1,370) |
Other intangible assets | 173 | 188 |
Other intangible assets, net | 1,365 | 1,410 |
Developed technology, including patents | ||
Intangible Asset Excluding Goodwill [Line Items] | ||
Gross other intangible assets | 2,202 | 2,135 |
Accumulated amortization | (1,188) | (1,117) |
Other intangible assets, net | 1,014 | 1,018 |
Other amortized intangible assets | ||
Intangible Asset Excluding Goodwill [Line Items] | ||
Gross other intangible assets | 447 | 457 |
Accumulated amortization | (269) | (253) |
Other intangible assets, net | $ 178 | $ 204 |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets, Net - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Jun. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Finite-Lived Intangible Assets [Line Items] | |||||
Intangible asset amortization expense | $ 48 | $ 42 | $ 136 | $ 127 | |
Intangible asset impairment | $ 31 | $ 0 | |||
Developed Technology Intangible Asset | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Intangible asset impairment | $ 31 |
Financing Arrangements - Additi
Financing Arrangements - Additional Information (Detail) | 3 Months Ended | |||||
Jun. 30, 2019USD ($) | Dec. 31, 2019EUR (€) | Dec. 31, 2019USD ($) | Sep. 30, 2019USD ($) | May 31, 2019EUR (€) | Dec. 31, 2018USD ($) | |
Debt Instrument [Line Items] | ||||||
Repayments of outstanding commercial paper and other short-term borrowings | $ | $ 795,000,000 | |||||
Commercial paper | $ | $ 0 | $ 0 | ||||
Domestic Line of Credit | Subsequent Event | ||||||
Debt Instrument [Line Items] | ||||||
Line of Credit Facility, Current Borrowing Capacity | $ | $ 2,000,000,000 | |||||
Foreign Line of Credit | Subsequent Event | ||||||
Debt Instrument [Line Items] | ||||||
Line of Credit Facility, Current Borrowing Capacity | € | € 200,000,000 | |||||
Long-term Line of Credit | $ | $ 224,000,000 | |||||
Line of Credit Facility, Interest Rate at Period End | 0.91% | 0.91% | ||||
0.4% Senior Notes Due in May 2024 | ||||||
Debt Instrument [Line Items] | ||||||
Senior notes | € | € 750,000,000 | |||||
0.4% Senior Notes Due in May 2024 | Senior Notes | ||||||
Debt Instrument [Line Items] | ||||||
Senior notes | € | € 750,000,000 | |||||
Senior notes, interest rate | 0.40% | |||||
1.3% Senior Notes Due in May 2029 | ||||||
Debt Instrument [Line Items] | ||||||
Senior notes | € | € 750,000,000 | |||||
Senior notes, interest rate | 1.30% |
Leases - Additional Information
Leases - Additional Information (Detail) | 9 Months Ended |
Sep. 30, 2019 | |
Minimum | |
Leases [Line Items] | |
Remaining term of contract | 1 year |
Lessee, option to extend lease term | 1 year |
Maximum | |
Leases [Line Items] | |
Remaining term of contract | 16 years |
Lessee, option to extend lease term | 12 years |
Leases - Components of Lease Co
Leases - Components of Lease Cost (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019 | Sep. 30, 2019 | |
Leases [Abstract] | ||
Operating lease cost | $ 30 | $ 90 |
Finance leases | ||
Amortization of right-of-use assets | 1 | 4 |
Interest on lease liabilities | 3 | 4 |
Variable lease cost | 24 | 68 |
Lease cost | $ 58 | $ 166 |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow Information Related to Leases (Detail) $ in Millions | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Leases [Abstract] | |
Operating cash flows from operating leases | $ 89 |
Operating cash flows from finance leases | 3 |
Financing cash flows from finance leases | 3 |
Right-of-use operating lease assets obtained in exchange for lease obligations | $ 164 |
Leases - Assets and Liabilities
Leases - Assets and Liabilities of Lessee (Detail) - USD ($) $ in Millions | Sep. 30, 2019 | Jan. 01, 2019 |
Leases, Operating [Abstract] | ||
Operating lease right-of-use assets | $ 589 | |
Accounts payable and accrued liabilities | 98 | |
Operating lease liabilities | 494 | $ 502 |
Total operating lease liabilities | 592 | |
Finance leases | ||
Property, plant and equipment, at cost | 65 | |
Accumulated depreciation | (19) | |
Property, plant and equipment, net | 46 | |
Current maturities of long-term debt and finance lease obligations | 0 | |
Long-term debt and finance lease obligations | 53 | |
Total finance lease liabilities | $ 53 |
Leases - Schedule of Lease Term
Leases - Schedule of Lease Term and Discount Rates (Detail) | Sep. 30, 2019 |
Leases [Abstract] | |
Operating leases, Weighted-average remaining lease term (years) | 10 years |
Finance leases, Weighted-average remaining lease term (years) | 15 years |
Operating lease, Weighted-average discount rate | 2.80% |
Finance leases, Weighted-average discount rate | 10.50% |
Leases - Maturities of Operatin
Leases - Maturities of Operating and Finance Lease Liabilities (Detail) $ in Millions | Sep. 30, 2019USD ($) |
Finance Leases | |
2019 | $ 2 |
2020 | 7 |
2021 | 7 |
2022 | 7 |
2023 | 6 |
Thereafter | 83 |
Total minimum lease payments | 112 |
Less: imputed interest | (59) |
Present value of lease liabilities | 53 |
Operating Leases | |
2019 | 30 |
2020 | 104 |
2021 | 88 |
2022 | 74 |
2023 | 62 |
Thereafter | 308 |
Total minimum lease payments | 666 |
Less: imputed interest | (74) |
Present value of lease liabilities | $ 592 |
Leases - Schedule of Future Min
Leases - Schedule of Future Minimum Lease Payments (Detail) $ in Millions | Dec. 31, 2018USD ($) |
Capital Leases | |
2019 | $ 7 |
2020 | 7 |
2021 | 8 |
2022 | 8 |
2023 | 6 |
Thereafter | 88 |
Total minimum lease payments | 124 |
Less: imputed interest | (62) |
Present value of lease liabilities | 62 |
Operating Leases | |
2019 | 123 |
2020 | 94 |
2021 | 86 |
2022 | 72 |
2023 | 64 |
Thereafter | 212 |
Total minimum lease payments | $ 651 |
Leases - Components of Operatin
Leases - Components of Operating Lease Income (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019 | Sep. 30, 2019 | |
Leases [Abstract] | ||
Sales-type Lease, Revenue | $ 3 | $ 14 |
Operating lease revenue | 16 | 46 |
Variable lease revenue | 23 | 65 |
Total lease revenue | $ 42 | $ 125 |
Leases - Components of Net Inve
Leases - Components of Net Investment in Sales-type Lease (Detail) $ in Millions | Sep. 30, 2019USD ($) |
Leases [Abstract] | |
Minimum lease payments | $ 83 |
Unguaranteed residual values | 11 |
Net investment in leases | $ 94 |
Leases - Components of Sales Ty
Leases - Components of Sales Type Lease Income (Detail) $ in Millions | Sep. 30, 2019USD ($) |
Leases [Abstract] | |
Accounts receivable, net | $ 36 |
Other non-current assets | 58 |
Total | $ 94 |
Leases - Maturities of Sales-ty
Leases - Maturities of Sales-type and Operating Leases (Detail) $ in Millions | Sep. 30, 2019USD ($) |
Sales-type Leases | |
2019 | $ 10 |
2020 | 31 |
2021 | 25 |
2022 | 17 |
2023 | 9 |
Thereafter | 3 |
Total minimum lease payments | 95 |
Less: imputed interest | (12) |
Present value of minimum lease payments | 83 |
Operating Leases | |
2019 | 15 |
2020 | 61 |
2021 | 61 |
2022 | 58 |
2023 | 27 |
Thereafter | 5 |
Total minimum lease payments | $ 227 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) | 1 Months Ended | 9 Months Ended | 12 Months Ended | |
Oct. 31, 2019USD ($) | Jul. 31, 2019USD ($) | Sep. 30, 2019USD ($)SiteLawsuit | Dec. 31, 2018USD ($) | |
Loss Contingencies [Line Items] | ||||
Litigation reserve | $ 55,000,000 | $ 46,000,000 | ||
Litigation related receivables | 0 | 0 | ||
Proceeds from insurance dispute settlements | 39,000,000 | |||
Gain on insurance claims | $ 37,000,000 | |||
Hurricane Maria | ||||
Loss Contingencies [Line Items] | ||||
Insurance recoveries | $ 40,000,000 | 42,000,000 | ||
Hurricane Maria | Subsequent Event | ||||
Loss Contingencies [Line Items] | ||||
Insurance recoveries | $ 60,000,000 | |||
Minimum | ||||
Loss Contingencies [Line Items] | ||||
Number of law suits filed | Lawsuit | 1,000 | |||
Superfund Sites | Environmental Clean-up | ||||
Loss Contingencies [Line Items] | ||||
Number of sites | Site | 6 | |||
Environmental reserves | $ 19,000,000 | $ 19,000,000 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Detail) - USD ($) | May 07, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Nov. 30, 2018 | Feb. 28, 2018 | Nov. 30, 2016 | Jul. 31, 2012 |
Stockholders Equity Note [Line Items] | ||||||||||
Cash dividends declared per common share (in dollars per share) | $ 0.22 | $ 0.19 | $ 0.63 | $ 0.54 | ||||||
Stock repurchase program, authorized amount | $ 2,000,000,000 | |||||||||
Stock repurchase program, additional authorized amount | $ 2,000,000,000 | $ 1,500,000,000 | $ 1,500,000,000 | |||||||
Share repurchases (in shares) | 13,500,000 | 14,900,000 | ||||||||
Stock Repurchase Program, Liability | $ 37,000,000 | $ 37,000,000 | ||||||||
Remaining value available under stock repurchase programs | 1,100,000,000 | $ 1,100,000,000 | ||||||||
Purchases of treasury stock (in shares) | 13,500,000 | 14,900,000 | ||||||||
Purchases of treasury stock | $ 346,000,000 | $ 247,000,000 | $ 1,043,000,000 | $ 1,028,000,000 | ||||||
ASR Agreement | ||||||||||
Stockholders Equity Note [Line Items] | ||||||||||
Stock repurchase program, authorized amount | $ 300,000,000 | |||||||||
Share repurchases (in shares) | 600,000 | 3,600,000 | ||||||||
Purchases of treasury stock (in shares) | 600,000 | 3,600,000 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income - Summary of Changes in AOCI by Component (Detail) - USD ($) $ in Millions | Jan. 01, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Beginning of period | $ 7,866 | $ 7,803 | $ 8,830 | $ 7,866 | $ 9,109 |
Other comprehensive income (loss) before reclassifications | (318) | (263) | |||
Amounts reclassified from AOCI | 14 | 51 | |||
Net other comprehensive income (loss) | (202) | 2 | (304) | (212) | |
End of period | 7,617 | 9,090 | 7,617 | 9,090 | |
ASU 2018-02 | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Adoption of new accounting standard | (161) | 161 | |||
ASU 2016-01 | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Adoption of new accounting standard | (3) | ||||
CTA | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Beginning of period | (2,868) | (2,868) | (2,545) | ||
Other comprehensive income (loss) before reclassifications | (272) | (314) | |||
Amounts reclassified from AOCI | 0 | 0 | |||
Net other comprehensive income (loss) | (272) | (314) | |||
End of period | (3,131) | (2,859) | (3,131) | (2,859) | |
CTA | ASU 2018-02 | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Adoption of new accounting standard | (9) | ||||
CTA | ASU 2016-01 | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Adoption of new accounting standard | 0 | ||||
Pension and OPEB Plans | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Beginning of period | (954) | (954) | (987) | ||
Other comprehensive income (loss) before reclassifications | 20 | 50 | |||
Amounts reclassified from AOCI | 17 | 44 | |||
Net other comprehensive income (loss) | 37 | 94 | |||
End of period | (1,086) | (893) | (1,086) | (893) | |
Pension and OPEB Plans | ASU 2018-02 | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Adoption of new accounting standard | 169 | ||||
Pension and OPEB Plans | ASU 2016-01 | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Adoption of new accounting standard | 0 | ||||
Hedging activities | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Beginning of period | (1) | (1) | (10) | ||
Other comprehensive income (loss) before reclassifications | (66) | 1 | |||
Amounts reclassified from AOCI | (3) | 7 | |||
Net other comprehensive income (loss) | (69) | 8 | |||
End of period | (71) | (2) | (71) | (2) | |
Hedging activities | ASU 2018-02 | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Adoption of new accounting standard | 1 | ||||
Hedging activities | ASU 2016-01 | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Adoption of new accounting standard | 0 | ||||
Available-for-sale securities | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Beginning of period | 3 | ||||
Other comprehensive income (loss) before reclassifications | 0 | ||||
Amounts reclassified from AOCI | 0 | ||||
Net other comprehensive income (loss) | 0 | ||||
End of period | 0 | 0 | |||
Available-for-sale securities | ASU 2016-01 | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Adoption of new accounting standard | (3) | ||||
Accumulated Other Comprehensive Income (Loss) | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Beginning of period | $ (3,823) | (3,823) | (3,539) | ||
End of period | $ (4,288) | $ (3,754) | $ (4,288) | $ (3,754) |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Income - Summary of Amounts Reclassification from AOCI to Net Income (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Other income, net | $ (9) | $ 1 | $ 8 | $ 45 |
Income tax expense (benefit) | 106 | (146) | 163 | (37) |
Cost of sales | 1,621 | 1,529 | 4,860 | 4,690 |
Net income attributable to Baxter stockholders | 369 | 518 | 1,024 | 1,241 |
Amounts reclassified from AOCI | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Net income attributable to Baxter stockholders | (2) | (14) | (14) | (51) |
Amortization of pension and OPEB items | Amounts reclassified from AOCI | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Other income, net | (8) | (18) | (23) | (54) |
Income tax expense (benefit) | 4 | 4 | 6 | 10 |
Net income attributable to Baxter stockholders | (4) | (14) | (17) | (44) |
Hedging activities | Amounts reclassified from AOCI | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Income tax expense (benefit) | 0 | 1 | 0 | 4 |
Net income attributable to Baxter stockholders | 2 | 0 | 3 | (7) |
Hedging activities | Foreign exchange contracts | Amounts reclassified from AOCI | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Cost of sales | $ 2 | $ (1) | $ 3 | $ (11) |
Revenues - Additional Informati
Revenues - Additional Information (Detail) € in Millions, $ in Millions | 9 Months Ended | ||
Sep. 30, 2019EUR (€) | Sep. 30, 2019USD ($) | Dec. 31, 2018USD ($) | |
Revenue From Contract With Customer [Line Items] | |||
Transaction price allocated to remaining performance obligations | $ 9,000 | ||
Net trade accounts receivable | 1,700 | $ 1,800 | |
Contract assets | 109 | 80 | |
Accounts and Other Receivables, Net | |||
Revenue From Contract With Customer [Line Items] | |||
Contract assets | 63 | 50 | |
Other Non Current Assets | |||
Revenue From Contract With Customer [Line Items] | |||
Contract assets | 46 | 30 | |
Manufacturing Arrangements | |||
Revenue From Contract With Customer [Line Items] | |||
Contract assets | 31 | 33 | |
Software Arrangements | |||
Revenue From Contract With Customer [Line Items] | |||
Contract assets | 39 | $ 47 | |
Bundled Equipment | |||
Revenue From Contract With Customer [Line Items] | |||
Contract assets | € | € 39 | ||
Consumable Medical Products | |||
Revenue From Contract With Customer [Line Items] | |||
Contract assets | $ 12 | ||
Minimum | |||
Revenue From Contract With Customer [Line Items] | |||
Global payment terms | 30 days | ||
Minimum | Software Arrangements | |||
Revenue From Contract With Customer [Line Items] | |||
Revenue recognized contract period | 1 year | ||
Minimum | Consumable Medical Products | |||
Revenue From Contract With Customer [Line Items] | |||
Revenue recognized contract period | 1 year | ||
Maximum | |||
Revenue From Contract With Customer [Line Items] | |||
Global payment terms | 90 days | ||
Maximum | Manufacturing Arrangements | |||
Revenue From Contract With Customer [Line Items] | |||
Revenue recognized contract period | 90 days | ||
Maximum | Software Arrangements | |||
Revenue From Contract With Customer [Line Items] | |||
Revenue recognized contract period | 5 years | ||
Maximum | Consumable Medical Products | |||
Revenue From Contract With Customer [Line Items] | |||
Revenue recognized contract period | 7 years |
Revenues -Narrative (Detail)
Revenues -Narrative (Detail) | Sep. 30, 2019 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2019-10-01 | |
Revenue From Contract With Customer [Line Items] | |
Remaining revenue performance obligation, percentage of revenue expected to be recognized | 5.00% |
Remaining performance obligations period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2020-01-01 | |
Revenue From Contract With Customer [Line Items] | |
Remaining revenue performance obligation, percentage of revenue expected to be recognized | 20.00% |
Remaining performance obligations period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2021-01-01 | |
Revenue From Contract With Customer [Line Items] | |
Remaining revenue performance obligation, percentage of revenue expected to be recognized | 20.00% |
Remaining performance obligations period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2022-01-01 | |
Revenue From Contract With Customer [Line Items] | |
Remaining revenue performance obligation, percentage of revenue expected to be recognized | 20.00% |
Remaining performance obligations period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2023-01-01 | |
Revenue From Contract With Customer [Line Items] | |
Remaining revenue performance obligation, percentage of revenue expected to be recognized | 10.00% |
Remaining performance obligations period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2024-01-01 | |
Revenue From Contract With Customer [Line Items] | |
Remaining revenue performance obligation, percentage of revenue expected to be recognized | 10.00% |
Remaining performance obligations period | 1 year |
Revenues - Net Sales from Contr
Revenues - Net Sales from Contracts with Customers by Global Business Unit (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Revenue From Contract With Customer [Line Items] | ||||
Net sales | $ 2,851 | $ 2,761 | $ 8,323 | $ 8,266 |
U.S. | ||||
Revenue From Contract With Customer [Line Items] | ||||
Net sales | 1,224 | 1,194 | 3,537 | 3,551 |
International | ||||
Revenue From Contract With Customer [Line Items] | ||||
Net sales | 1,627 | 1,567 | 4,786 | 4,715 |
Renal | ||||
Revenue From Contract With Customer [Line Items] | ||||
Net sales | 918 | 907 | 2,679 | 2,700 |
Renal | U.S. | ||||
Revenue From Contract With Customer [Line Items] | ||||
Net sales | 199 | 209 | 587 | 609 |
Renal | International | ||||
Revenue From Contract With Customer [Line Items] | ||||
Net sales | 719 | 698 | 2,092 | 2,091 |
Medication Delivery | ||||
Revenue From Contract With Customer [Line Items] | ||||
Net sales | 701 | 652 | 2,024 | 2,006 |
Medication Delivery | U.S. | ||||
Revenue From Contract With Customer [Line Items] | ||||
Net sales | 461 | 418 | 1,308 | 1,280 |
Medication Delivery | International | ||||
Revenue From Contract With Customer [Line Items] | ||||
Net sales | 240 | 234 | 716 | 726 |
Pharmaceuticals | ||||
Revenue From Contract With Customer [Line Items] | ||||
Net sales | 527 | 518 | 1,575 | 1,548 |
Pharmaceuticals | U.S. | ||||
Revenue From Contract With Customer [Line Items] | ||||
Net sales | 223 | 240 | 690 | 745 |
Pharmaceuticals | International | ||||
Revenue From Contract With Customer [Line Items] | ||||
Net sales | 304 | 278 | 885 | 803 |
Clinical Nutrition | ||||
Revenue From Contract With Customer [Line Items] | ||||
Net sales | 219 | 217 | 639 | 660 |
Clinical Nutrition | U.S. | ||||
Revenue From Contract With Customer [Line Items] | ||||
Net sales | 80 | 80 | 236 | 243 |
Clinical Nutrition | International | ||||
Revenue From Contract With Customer [Line Items] | ||||
Net sales | 139 | 137 | 403 | 417 |
Advanced Surgery | ||||
Revenue From Contract With Customer [Line Items] | ||||
Net sales | 216 | 199 | 646 | 585 |
Advanced Surgery | U.S. | ||||
Revenue From Contract With Customer [Line Items] | ||||
Net sales | 134 | 122 | 397 | 339 |
Advanced Surgery | International | ||||
Revenue From Contract With Customer [Line Items] | ||||
Net sales | 82 | 77 | 249 | 246 |
Acute Therapies | ||||
Revenue From Contract With Customer [Line Items] | ||||
Net sales | 130 | 122 | 391 | 379 |
Acute Therapies | U.S. | ||||
Revenue From Contract With Customer [Line Items] | ||||
Net sales | 44 | 41 | 136 | 129 |
Acute Therapies | International | ||||
Revenue From Contract With Customer [Line Items] | ||||
Net sales | 86 | 81 | 255 | 250 |
Other | ||||
Revenue From Contract With Customer [Line Items] | ||||
Net sales | 140 | 146 | 369 | 388 |
Other | U.S. | ||||
Revenue From Contract With Customer [Line Items] | ||||
Net sales | 83 | 84 | 183 | 206 |
Other | International | ||||
Revenue From Contract With Customer [Line Items] | ||||
Net sales | $ 57 | $ 62 | $ 186 | $ 182 |
Business Optimization Charges -
Business Optimization Charges - Additional Information (Details) $ in Millions | Sep. 30, 2019USD ($) |
Restructuring and Related Activities [Abstract] | |
Cumulative pre-tax costs incurred | $ 927 |
Expected additional pre-tax costs | $ 100 |
Business Optimization Charges_2
Business Optimization Charges - Summary of Business Optimization Charges (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | $ 17 | $ 63 | $ 94 | $ 96 |
Business Optimization Programs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | 17 | 63 | 94 | 96 |
Costs to implement business optimization programs | 10 | 24 | 32 | 74 |
Accelerated depreciation | 1 | 3 | 5 | 5 |
Total business optimization charges | $ 28 | $ 90 | $ 131 | $ 175 |
Business Optimization Charges_3
Business Optimization Charges - Components of Restructuring Charges (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Restructuring Cost and Reserve [Line Items] | ||||
Charges | $ 17 | $ 63 | $ 94 | $ 96 |
Cost of Goods Sold | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Charges | 9 | 16 | 33 | 21 |
Selling, General and Administrative Expenses | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Charges | 2 | 38 | 28 | 56 |
Research and Development Expenses | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Charges | 6 | 9 | 33 | 19 |
Employee termination costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Charges | 5 | 58 | 62 | 86 |
Employee termination costs | Cost of Goods Sold | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Charges | 1 | 16 | 7 | 20 |
Employee termination costs | Selling, General and Administrative Expenses | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Charges | 2 | 33 | 27 | 47 |
Employee termination costs | Research and Development Expenses | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Charges | 2 | 9 | 28 | 19 |
Contract termination and other costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Charges | 1 | 9 | ||
Contract termination and other costs | Cost of Goods Sold | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Charges | 1 | 9 | ||
Contract termination and other costs | Selling, General and Administrative Expenses | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Charges | 0 | 0 | ||
Contract termination and other costs | Research and Development Expenses | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Charges | 0 | 0 | ||
Asset impairments | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Charges | 11 | 1 | 23 | 4 |
Asset impairments | Cost of Goods Sold | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Charges | 7 | 0 | 17 | 1 |
Asset impairments | Selling, General and Administrative Expenses | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Charges | 0 | 1 | 1 | 3 |
Asset impairments | Research and Development Expenses | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Charges | $ 4 | 0 | $ 5 | 0 |
Contract termination costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Charges | 4 | 6 | ||
Contract termination costs | Cost of Goods Sold | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Charges | 0 | 0 | ||
Contract termination costs | Selling, General and Administrative Expenses | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Charges | 4 | 6 | ||
Contract termination costs | Research and Development Expenses | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Charges | $ 0 | $ 0 |
Business Optimization Charges_4
Business Optimization Charges - Summary of Activity in Reserves Related to Restructuring Initiatives (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Restructuring Cost and Reserve [Line Items] | ||||
Charges | $ 17 | $ 63 | $ 94 | $ 96 |
Severance and Other Employee Related Costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Reserve, beginning balance | 101 | |||
Charges | 84 | |||
Payments | (13) | |||
Reserve adjustments | (77) | |||
Currency translation | (5) | |||
Reserve, ending balance | $ 90 | $ 90 |
Pension and Other Postretirem_3
Pension and Other Postretirement Benefit Programs - Net Periodic Benefit Cost Relating to Pension and Other Postemployment Employee Benefit Plans (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Pension benefits | ||||
Net periodic benefit cost | ||||
Service cost | $ 18 | $ 23 | $ 56 | $ 70 |
Interest cost | 47 | 45 | 137 | 136 |
Expected return on plan assets | (74) | (78) | (214) | (235) |
Amortization of net losses and prior service costs (credit) | 15 | 24 | 44 | 72 |
Net periodic cost | 6 | 14 | 23 | 43 |
OPEB | ||||
Net periodic benefit cost | ||||
Interest cost | 2 | 2 | 6 | 6 |
Amortization of net losses and prior service costs (credit) | (7) | (6) | (21) | (18) |
Net periodic cost | $ (5) | $ (4) | $ (15) | $ (12) |
Pension and Other Postretirem_4
Pension and Other Postretirement Programs - Additional Information (Details) - Subsequent Event - USD ($) $ in Millions | 3 Months Ended | |
Dec. 31, 2019 | Oct. 31, 2019 | |
Defined Benefit Plan Disclosure [Line Items] | ||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Gain (Loss) Due to Settlement | $ 755 | |
Pension benefits | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Pension plan liabilities | $ 2,400 |
INCOME TAXES - Additional Infor
INCOME TAXES - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate | 22.00% | (39.20%) | 13.70% | (3.10%) |
U.S. Federal statutory rate | 21.00% | 21.00% | 21.00% | 21.00% |
Foreign Tax Credits | ||||
Valuation Allowance [Line Items] | ||||
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount | $ (200) |
Earnings Per Share - Reconcilia
Earnings Per Share - Reconciliation of Basic Shares to Diluted Shares (Detail) - shares shares in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Reconciliation of Basic Shares to Diluted Shares | ||||
Basic (in shares) | 511 | 534 | 510 | 536 |
Effect of dilutive securities (in shares) | 9 | 12 | 10 | 12 |
Diluted (in shares) | 520 | 546 | 520 | 548 |
Earnings Per Share - Additional
Earnings Per Share - Additional Information (Detail) - shares shares in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Earnings Per Share [Abstract] | ||||
Anti-dilutive securities excluded from computation of EPS (in shares) | 4 | 3 | 4 | 3 |
Derivative Instruments and He_3
Derivative Instruments and Hedging Activities - Additional Information (Detail) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||||
May 31, 2019EUR (€) | Sep. 30, 2019EUR (€) | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Dec. 31, 2018USD ($) | May 31, 2017EUR (€) | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||||
Currency translation adjustments | $ (177,000,000) | $ (9,000,000) | $ (272,000,000) | $ (314,000,000) | ||||
Derivative, Fair Value, Terminated | 0 | 0 | ||||||
Gain (loss) on hedged item in fair value hedge | 4,000,000 | |||||||
Deferred, net after-tax gains on derivative instruments | 5,000,000 | |||||||
Not Designated as Hedging Instrument | ||||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||||
Derivative, Notional Amount | 562,000,000 | 562,000,000 | $ 487,000,000 | |||||
1.30% Senior Notes due May 2025 | ||||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||||
Senior notes | € | € 600,000,000 | |||||||
0.4% Senior Notes Due in May 2024 | ||||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||||
Senior notes | € | € 750,000,000 | |||||||
1.3% Senior Notes Due in May 2029 | ||||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||||
Senior notes | € | 750,000,000 | |||||||
Net investment hedge | ||||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||||
Accumulated pre-tax unrealized translation gain in AOCI | 41,000,000 | 41,000,000 | ||||||
Net investment hedge | Forward Contracts | Derivative instruments designated as hedges | ||||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||||
Currency translation adjustments | € | € 1,200,000,000 | € 1,200,000,000 | ||||||
Foreign exchange contracts | ||||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||||
Derivative, Notional Amount | 689,000,000 | $ 689,000,000 | 706,000,000 | |||||
Maximum length of time hedge in cash flow hedge | 15 months | |||||||
Interest rate contracts | ||||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||||
Derivative, Notional Amount | 550,000,000 | $ 550,000,000 | 150,000,000 | |||||
Gain (loss) on hedged item in fair value hedge | 0 | $ (4,000,000) | ||||||
Interest rate swap | ||||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||||
Derivative, fair value, net | $ 0 | $ 0 | $ 0 |
Derivative Instruments and He_4
Derivative Instruments and Hedging Activities - Summary of Gains and Losses on Hedging Instruments (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Other comprehensive income (loss), net investment hedge, gain (loss), before reclassification and tax | $ 96 | |||
Other comprehensive income (loss), unrealized gain (loss) on derivatives Arising during Period, net investment hedge, before tax | $ 5 | |||
Other comprehensive income (loss), cash flow hedge and net investment hedge, gain (loss), before reclassification, tax | 43 | 8 | $ (13) | $ 23 |
Other comprehensive income (loss), reclassification adjustment from AOCI, cash flow hedges and net investment hedges, net of tax | 2 | 3 | ||
Other comprehensive income (loss), reclassification adjustment from AOCI on derivatives, net of tax | (1) | (11) | ||
Gain (loss) recognized in income, fair value hedges | 4 | |||
Other income, net | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Other comprehensive income (loss), net investment hedge, gain (loss), before reclassification and tax | 0 | 0 | ||
Other comprehensive income (loss), unrealized gain (loss) on derivatives Arising during Period, net investment hedge, before tax | 0 | 0 | ||
Interest rate contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Other comprehensive income (loss), cash flow hedge, gain (loss), before reclassification, tax | (57) | |||
Other comprehensive income (loss), unrealized gain (loss) on derivatives Arising during period, before tax | 0 | |||
Gain (loss) recognized in income, fair value hedges | 0 | (4) | ||
Interest rate contracts | Interest expense, net | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Other comprehensive income (loss), cash flow hedge, gain (loss), reclassification, before tax | 0 | |||
Derivative instruments, gain (loss) reclassified from accumulated OCI into income, effective portion, net | 0 | |||
Foreign exchange contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Other comprehensive income (loss), cash flow hedge, gain (loss), before reclassification, tax | 4 | |||
Other comprehensive income (loss), unrealized gain (loss) on derivatives Arising during period, before tax | 3 | |||
Foreign exchange contracts | Cost of Sales | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Other comprehensive income (loss), cash flow hedge, gain (loss), reclassification, before tax | 2 | |||
Derivative instruments, gain (loss) reclassified from accumulated OCI into income, effective portion, net | (1) | |||
Foreign exchange contracts | Other income, net | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (loss) recognized in income, undesignated derivative instruments | $ (4) | 9 | (16) | 3 |
Cash Flow Hedges | Interest rate contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Other comprehensive income (loss), cash flow hedge, gain (loss), before reclassification, tax | (91) | |||
Other comprehensive income (loss), unrealized gain (loss) on derivatives Arising during period, before tax | 0 | |||
Cash Flow Hedges | Interest rate contracts | Interest expense, net | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Other comprehensive income (loss), cash flow hedge, gain (loss), reclassification, before tax | 0 | |||
Derivative instruments, gain (loss) reclassified from accumulated OCI into income, effective portion, net | 0 | |||
Cash Flow Hedges | Foreign exchange contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Other comprehensive income (loss), cash flow hedge, gain (loss), before reclassification, tax | 4 | |||
Other comprehensive income (loss), unrealized gain (loss) on derivatives Arising during period, before tax | 1 | |||
Cash Flow Hedges | Foreign exchange contracts | Cost of Sales | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Other comprehensive income (loss), cash flow hedge, gain (loss), reclassification, before tax | $ 3 | |||
Derivative instruments, gain (loss) reclassified from accumulated OCI into income, effective portion, net | (11) | |||
Net investment hedges | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Other comprehensive income (loss), net investment hedge, gain (loss), before reclassification and tax | $ 74 | |||
Other comprehensive income (loss), unrealized gain (loss) on derivatives Arising during Period, net investment hedge, before tax | $ 22 |
Derivative Instruments and He_5
Derivative Instruments and Hedging Activities - Classification and Fair Value Amounts of Derivative Instruments (Detail) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Derivatives, Fair Value [Line Items] | ||
Derivative asset, fair value | $ 27 | $ 25 |
Derivative liability, fair value | 96 | 6 |
Derivative instruments designated as hedges | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset, fair value | 27 | 23 |
Derivative liability, fair value | 96 | 4 |
Derivative instruments designated as hedges | Interest rate contracts | Other non-current assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset, fair value | 1 | 0 |
Derivative instruments designated as hedges | Interest rate contracts | Other non-current liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability, fair value | 95 | 3 |
Derivative instruments designated as hedges | Foreign exchange contracts | Other non-current assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset, fair value | 2 | 1 |
Derivative instruments designated as hedges | Foreign exchange contracts | Prepaid expenses and other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset, fair value | 24 | 22 |
Derivative instruments designated as hedges | Foreign exchange contracts | Other non-current liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability, fair value | 0 | 0 |
Derivative instruments designated as hedges | Foreign exchange contracts | Accounts payable and accrued liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability, fair value | 1 | 1 |
Undesignated derivative instruments | Foreign exchange contracts | Prepaid expenses and other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset, fair value | 0 | 2 |
Undesignated derivative instruments | Foreign exchange contracts | Accounts payable and accrued liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability, fair value | $ 0 | $ 2 |
Derivative Instruments and He_6
Derivative Instruments and Hedging Activities - Derivative Positions Presented On Net Basis (Detail) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Gross amounts recognized in the consolidated balance sheet, Asset | $ 27 | $ 25 |
Gross amount subject to offset in master netting arrangements not offset in the consolidated balance sheet, Asset | (2) | (3) |
Total, Asset | 25 | 22 |
Gross amounts recognized in the consolidated balance sheet, Liability | 96 | 6 |
Gross amount subject to offset in master netting arrangements not offset in the consolidated balance sheet, Liability | (2) | (3) |
Total, Liability | $ 94 | $ 3 |
Derivative Instruments and He_7
Derivative Instruments and Hedging Activities - Amounts Recorded on Condensed Consolidated Balance Sheet Related to Fair Value Hedges (Detail) - Long-term debt - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Derivatives, Fair Value [Line Items] | ||
Contracts designated as fair value hedges | $ 103 | $ 103 |
Cumulative amount of fair value hedging adjustment included in the carrying amount of the hedged item | $ 6 | $ 7 |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Financial Instruments Measured at Fair Value on Recurring Basis (Detail) - Fair Value, Measurements, Recurring - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Foreign exchange contracts, assets at fair value | $ 26 | $ 25 |
Interest Rate Fair Value Hedge Asset at Fair Value | 1 | |
Marketable equity securities | 4 | 3 |
Total assets | 31 | 28 |
Foreign currency hedges, liabilities at fair value | 1 | 3 |
Interest rate contracts, liabilities at fair value | 95 | 3 |
Contingent payments related to acquisitions | 27 | 32 |
Total liabilities | 123 | 38 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Foreign exchange contracts, assets at fair value | 0 | 0 |
Interest Rate Fair Value Hedge Asset at Fair Value | 0 | |
Marketable equity securities | 4 | |
Total assets | 4 | 3 |
Foreign currency hedges, liabilities at fair value | 0 | 0 |
Interest rate contracts, liabilities at fair value | 0 | 0 |
Contingent payments related to acquisitions | 0 | 0 |
Total liabilities | 0 | 0 |
Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Foreign exchange contracts, assets at fair value | 26 | 25 |
Interest Rate Fair Value Hedge Asset at Fair Value | 1 | |
Marketable equity securities | 0 | 0 |
Total assets | 27 | 25 |
Foreign currency hedges, liabilities at fair value | 1 | 3 |
Interest rate contracts, liabilities at fair value | 95 | 3 |
Contingent payments related to acquisitions | 0 | 0 |
Total liabilities | 96 | 6 |
Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Foreign exchange contracts, assets at fair value | 0 | 0 |
Interest Rate Fair Value Hedge Asset at Fair Value | 0 | |
Marketable equity securities | 0 | 0 |
Total assets | 0 | 0 |
Foreign currency hedges, liabilities at fair value | 0 | 0 |
Interest rate contracts, liabilities at fair value | 0 | 0 |
Contingent payments related to acquisitions | 27 | 32 |
Total liabilities | $ 27 | $ 32 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Detail) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Fair Value Disclosures [Line Items] | ||
Cash and cash equivalents | $ 3,009 | $ 1,838 |
Other Assets | ||
Fair Value Disclosures [Line Items] | ||
Other equity investments without readily determinable fair values | 38 | 41 |
Significant Other Observable Inputs (Level 2) | ||
Fair Value Disclosures [Line Items] | ||
Money market funds, at carrying value | $ 1,600 | $ 169 |
Fair Value Measurements - Recon
Fair Value Measurements - Reconciliation of Fair Value Measurements that Use Significant Unobservable Inputs (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | ||||
Contingent payments, Fair value as of beginning of period | $ 27 | $ 23 | $ 32 | $ 9 |
Contingent payments, additions | 0 | 9 | 0 | 24 |
Contingent payments, change in fair value recognized in earnings | 0 | 0 | (4) | 0 |
Contingent payments, payments | 0 | 0 | (1) | (1) |
Contingent payments, Fair value as of end of period | $ 27 | $ 32 | $ 27 | $ 32 |
Fair Value Measurements - Book
Fair Value Measurements - Book Values and Fair Values of Financial Instruments (Detail) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Book Values | ||
Fair Value And Carrying Value By Balance Sheet Grouping [Line Items] | ||
Short-term debt | $ 0 | $ 2 |
Current maturities of long-term debt and finance lease obligations | 2 | 2 |
Long-term debt and finance lease obligations | 5,063 | 3,481 |
Fair values | ||
Fair Value And Carrying Value By Balance Sheet Grouping [Line Items] | ||
Short-term debt | 0 | 2 |
Current maturities of long-term debt and finance lease obligations | 2 | 2 |
Long-term debt and finance lease obligations | $ 5,466 | $ 3,469 |
Segment Information - Summary o
Segment Information - Summary of Financial Information for Our Segments (Detail) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)Segment | Sep. 30, 2018USD ($) | |
Segment Reporting Information [Line Items] | ||||
Number of Operating Segments | Segment | 3 | |||
Net sales | $ 2,851 | $ 2,761 | $ 8,323 | $ 8,266 |
Total segment operating income | 503 | 382 | 1,236 | 1,193 |
Americas | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 1,534 | 1,497 | 4,462 | 4,459 |
EMEA | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 730 | 707 | 2,179 | 2,180 |
APAC | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 587 | 557 | 1,682 | 1,627 |
Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Total segment operating income | 895 | 925 | 2,574 | 2,667 |
Operating Segments | Americas | ||||
Segment Reporting Information [Line Items] | ||||
Total segment operating income | 595 | 624 | 1,715 | 1,809 |
Operating Segments | EMEA | ||||
Segment Reporting Information [Line Items] | ||||
Total segment operating income | 162 | 164 | 465 | 475 |
Operating Segments | APAC | ||||
Segment Reporting Information [Line Items] | ||||
Total segment operating income | $ 138 | $ 137 | $ 394 | $ 383 |
Segment Information - Operating
Segment Information - Operating Income to Income Before Income Taxes Reconciliation (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Operating Income (Loss) | $ 503 | $ 382 | $ 1,236 | $ 1,193 |
Net interest expense | (13) | (11) | (51) | (34) |
Other (income) expense, net | 9 | (1) | (8) | (45) |
Income before income taxes | 481 | 372 | 1,193 | 1,204 |
Operating Segments | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Operating Income (Loss) | 895 | 925 | 2,574 | 2,667 |
Corporate and Other | ||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||
Operating Income (Loss) | $ (392) | $ (543) | $ (1,338) | $ (1,474) |