Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2021 | Apr. 22, 2021 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2021 | |
Document Transition Report | false | |
Entity File Number | 1-4448 | |
Entity Registrant Name | BAXTER INTERNATIONAL INC. | |
Entity Incorporation, State or Country Code | DE | |
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 Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 502,851,993 | |
Entity Central Index Key | 0000010456 | |
Current Fiscal Year End Date | --12-31 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q1 | |
Common Stock, $1.00 par value | New York Stock Exchange | ||
Document Information [Line Items] | ||
Title of 12(b) Security | Common Stock, $1.00 par value | |
Trading Symbol | BAX (NYSE) | |
Security Exchange Name | NYSE | |
Common Stock, $1.00 par value | Chicago Stock Exchange | ||
Document Information [Line Items] | ||
Title of 12(b) Security | Common Stock, $1.00 par value | |
Trading Symbol | BAX (NYSE) | |
Security Exchange Name | CHX | |
0.4% Global Notes due 2024 | New York Stock Exchange | ||
Document Information [Line Items] | ||
Title of 12(b) Security | 0.4% Global Notes due 2024 | |
Trading Symbol | BAX 24 | |
Security Exchange Name | NYSE | |
1.3% Global Notes due 2025 | New York Stock Exchange | ||
Document Information [Line Items] | ||
Title of 12(b) Security | 1.3% Global Notes due 2025 | |
Trading Symbol | BAX 25 | |
Security Exchange Name | NYSE | |
1.3% Global Notes due 2029 | New York Stock Exchange | ||
Document Information [Line Items] | ||
Title of 12(b) Security | 1.3% Global Notes due 2029 | |
Trading Symbol | BAX 29 | |
Security Exchange Name | NYSE |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (unaudited) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 3,182 | $ 3,730 |
Accounts receivable, net of allowances of $120 in 2021 and $125 in 2020 | 1,915 | 2,007 |
Inventories | 2,017 | 1,916 |
Prepaid expenses and other current assets | 742 | 758 |
Total current assets | 7,856 | 8,411 |
Property, plant and equipment, net | 4,614 | 4,722 |
Goodwill | 3,111 | 3,217 |
Other intangible assets, net | 1,962 | 1,671 |
Operating lease right-of-use assets | 567 | 603 |
Other non-current assets | 1,356 | 1,395 |
Total assets | 19,466 | 20,019 |
Current liabilities: | ||
Current maturities of long-term debt and finance lease obligations | 407 | 406 |
Accounts payable | 1,023 | 1,043 |
Accrued expenses and other current liabilities | 1,757 | 1,884 |
Total current liabilities | 3,187 | 3,333 |
Long-term debt and finance lease obligations | 5,681 | 5,786 |
Operating lease liabilities | 472 | 501 |
Other non-current liabilities | 1,636 | 1,673 |
Total liabilities | 10,976 | 11,293 |
Commitments and contingencies | ||
Equity: | ||
Common stock, $1 par value, authorized 2,000,000,000 shares, issued 683,494,944 shares in 2021 and 2020 | 683 | 683 |
Common stock in treasury, at cost, 180,817,748 shares in 2021 and 178,580,208 shares in 2020 | (11,296) | (11,051) |
Additional contributed capital | 6,043 | 6,043 |
Retained earnings | 16,502 | 16,328 |
Accumulated other comprehensive (loss) income | (3,480) | (3,314) |
Total Baxter stockholders’ equity | 8,452 | 8,689 |
Noncontrolling interests | 38 | 37 |
Total equity | 8,490 | 8,726 |
Total liabilities and equity | $ 19,466 | $ 20,019 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (unaudited) (Parenthetical) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Allowance for accounts receivable, current | $ 120 | $ 125 |
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) | 180,817,748 | 178,580,208 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income (unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Income Statement [Abstract] | ||
Net sales | $ 2,946 | $ 2,802 |
Cost of sales | 1,801 | 1,639 |
Gross margin | 1,145 | 1,163 |
Selling, general and administrative expenses | 627 | 628 |
Research and development expenses | 128 | 146 |
Other operating income, net | 0 | (20) |
Operating income | 390 | 409 |
Interest expense, net | 34 | 21 |
Other expense, net | 5 | 10 |
Income before income taxes | 351 | 378 |
Income tax expense | 51 | 45 |
Net income | 300 | 333 |
Net income attributable to noncontrolling interests | 2 | 1 |
Net income attributable to Baxter stockholders | $ 298 | $ 332 |
Earnings per share | ||
Basic (in dollars per share) | $ 0.59 | $ 0.65 |
Diluted (in dollars per share) | $ 0.58 | $ 0.64 |
Weighted-average number of shares outstanding | ||
Basic (in shares) | 505 | 507 |
Diluted (in shares) | 511 | 516 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Loss) (unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 300 | $ 333 |
Other comprehensive income (loss), net of tax: | ||
Currency translation adjustments, net of tax expense (benefit) of $17 and $(8) for the three months ended March 31, 2021 and 2020, respectively | (208) | (359) |
Pension and other postretirement benefits, net of tax expense of $8 and $6 for the three months ended March 31, 2021 and 2020, respectively | 30 | 22 |
Hedging activities, net of tax expense (benefit) of $3 and ($39) for the three months ended March 31, 2021 and 2020, respectively | 12 | (130) |
Total other comprehensive income (loss), net of tax | (166) | (467) |
Comprehensive income (loss) | 134 | (134) |
Less: Comprehensive income attributable to noncontrolling interests | 2 | 1 |
Comprehensive income (loss) attributable to Baxter stockholders | $ 132 | $ (135) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Comprehensive Income (Loss) (unaudited) (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Statement of Comprehensive Income [Abstract] | ||
Currency translation adjustments, tax | $ 17 | $ (8) |
Pension and other postretirement benefits, tax | 8 | 6 |
Hedging activities, tax | $ 3 | $ (39) |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Changes in Equity (unaudited) - USD ($) $ in Millions | Total | Cumulative Effect, Period of Adoption, Adjustment | Common stock | Common stock in treasury | Additional contributed capital | Retained earnings | Retained earningsCumulative Effect, Period of Adoption, Adjustment | Accumulated other comprehensive income (loss) | Total Baxter stockholders' equity | Total Baxter stockholders' equityCumulative Effect, Period of Adoption, Adjustment | Noncontrolling interests |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Adoption of new accounting standard | $ 7,912 | $ (4) | $ 683 | $ (10,764) | $ 5,955 | $ 15,718 | $ (4) | $ (3,710) | $ 7,882 | $ (4) | $ 30 |
Beginning of period (in shares) at Dec. 31, 2019 | 683,000,000 | ||||||||||
Beginning of period at Dec. 31, 2019 | 7,912 | (4) | $ 683 | $ (10,764) | 5,955 | 15,718 | (4) | (3,710) | 7,882 | (4) | 30 |
Beginning of period, treasury shares (in shares) at Dec. 31, 2019 | 177,000,000 | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Adoption of new accounting standard | 7,730 | $ (4) | $ 683 | $ (10,677) | 5,935 | 15,935 | $ (4) | (4,177) | 7,699 | $ (4) | 31 |
Net income | 333 | 332 | 332 | 1 | |||||||
Other comprehensive income (loss) | (467) | (467) | (467) | ||||||||
Stock issued under employee benefit plans and other (in shares) | (2,000,000) | ||||||||||
Stock issued under employee benefit plans and other | 67 | $ 87 | (20) | 67 | |||||||
Dividends declared on common stock | (111) | (111) | (111) | ||||||||
End of period (in shares) at Mar. 31, 2020 | 683,000,000 | ||||||||||
End of period at Mar. 31, 2020 | 7,730 | $ 683 | $ (10,677) | 5,935 | 15,935 | (4,177) | 7,699 | 31 | |||
End of period, treasury shares (in shares) at Mar. 31, 2020 | 175,000,000 | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Adoption of new accounting standard | 7,730 | 683 | $ (10,677) | 5,935 | 15,935 | (4,177) | 7,699 | 31 | |||
Adoption of new accounting standard | $ 8,726 | $ 683 | (11,051) | 6,043 | 16,328 | (3,314) | 8,689 | 37 | |||
Beginning of period (in shares) at Dec. 31, 2020 | 683,494,944 | 683,000,000 | |||||||||
Beginning of period at Dec. 31, 2020 | $ 8,726 | $ 683 | $ (11,051) | 6,043 | 16,328 | (3,314) | 8,689 | 37 | |||
Beginning of period, treasury shares (in shares) at Dec. 31, 2020 | 178,580,208 | 179,000,000 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Adoption of new accounting standard | $ 8,490 | $ 683 | $ (11,296) | 6,043 | 16,502 | (3,480) | 8,452 | 38 | |||
Net income | 300 | 298 | 298 | 2 | |||||||
Other comprehensive income (loss) | $ (166) | (166) | (166) | ||||||||
Purchases of treasury stock (in shares) | 3,600,000 | 4,000,000 | |||||||||
Purchases of treasury stock | $ (300) | $ (300) | (300) | ||||||||
Stock issued under employee benefit plans and other (in shares) | (2,000,000) | ||||||||||
Stock issued under employee benefit plans and other | 55 | $ 55 | 55 | ||||||||
Dividends declared on common stock | (124) | (124) | (124) | ||||||||
Change in noncontrolling interests | $ (1) | (1) | |||||||||
End of period (in shares) at Mar. 31, 2021 | 683,494,944 | 683,000,000 | |||||||||
End of period at Mar. 31, 2021 | $ 8,490 | $ 683 | $ (11,296) | 6,043 | 16,502 | (3,480) | 8,452 | 38 | |||
End of period, treasury shares (in shares) at Mar. 31, 2021 | 180,817,748 | 181,000,000 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Adoption of new accounting standard | $ 8,490 | $ 683 | $ (11,296) | $ 6,043 | $ 16,502 | $ (3,480) | $ 8,452 | $ 38 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows (unaudited) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | ||
Cash flows from operations | |||
Net income | $ 300 | $ 333 | |
Adjustments to reconcile net income to cash flows from operations: | |||
Depreciation and amortization | 217 | 199 | |
Deferred income taxes | (25) | (17) | |
Stock compensation | 22 | 29 | |
Net periodic pension and other postretirement costs | 26 | 20 | |
Other | 14 | 13 | |
Changes in balance sheet items: | |||
Accounts receivable, net | 51 | (57) | |
Inventories | (129) | (83) | |
Prepaid expenses and other current assets | 2 | (14) | |
Accounts payable | 22 | 82 | |
Accrued expenses and other current liabilities | (124) | (192) | |
Other | 1 | (39) | |
Cash flows from operations – continuing operations | 377 | 274 | |
Cash flows from operations – discontinued operations | 0 | (2) | |
Cash flows from operations | 377 | 272 | |
Cash flows from investing activities | |||
Capital expenditures | (171) | (172) | |
Acquisitions, net of cash acquired, and investments | (381) | (443) | |
Other investing activities, net | 14 | 11 | |
Cash flows from investing activities | (538) | (604) | |
Cash flows from financing activities | |||
Issuances of debt | 0 | 1,240 | |
Cash dividends on common stock | (125) | (111) | |
Proceeds from stock issued under employee benefit plans | 48 | 66 | |
Purchases of treasury stock | (253) | 0 | |
Other financing activities, net | (28) | (25) | |
Cash flows from financing activities | (358) | 1,170 | |
Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash | (31) | (63) | |
Increase (decrease) in cash, cash equivalents and restricted cash | (550) | 775 | |
Cash, cash equivalents and restricted cash at beginning of period | 3,736 | 3,335 | |
Cash, cash equivalents and restricted cash at end of period | [1] | $ 3,186 | $ 4,110 |
[1] | We did not have any restricted cash balances as of March 31, 2020 or December 31, 2019. The following table provides a reconciliation of cash, cash equivalents and restricted cash shown above to the amounts reported within the condensed consolidated balance sheet as of March 31, 2021 and December 31, 2020 (in millions): March 31, 2021 December 31, 2020 Cash and cash equivalents $ 3,182 $ 3,730 Restricted cash included in prepaid expenses and other current assets 4 6 Cash, cash equivalents and restricted cash $ 3,186 $ 3,736 |
Condensed Consolidated Statem_6
Condensed Consolidated Statements of Cash Flows (unaudited) (Parenthetical) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 | |
Statement of Cash Flows [Abstract] | |||
Cash and cash equivalents | $ 3,182 | $ 3,730 | |
Restricted cash included in prepaid expenses and other current assets | 4 | 6 | |
Cash, cash equivalents and restricted cash | $ 3,186 | [1] | $ 3,736 |
[1] | We did not have any restricted cash balances as of March 31, 2020 or December 31, 2019. The following table provides a reconciliation of cash, cash equivalents and restricted cash shown above to the amounts reported within the condensed consolidated balance sheet as of March 31, 2021 and December 31, 2020 (in millions): March 31, 2021 December 31, 2020 Cash and cash equivalents $ 3,182 $ 3,730 Restricted cash included in prepaid expenses and other current assets 4 6 Cash, cash equivalents and restricted cash $ 3,186 $ 3,736 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 3 Months Ended |
Mar. 31, 2021 | |
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 consolidated financial statements and notes included in our Annual Report on Form 10-K for the year ended December 31, 2020 (2020 Annual Report). 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. Risks and Uncertainties Related to COVID-19 |
ACQUISITIONS AND OTHER ARRANGEM
ACQUISITIONS AND OTHER ARRANGEMENTS | 3 Months Ended |
Mar. 31, 2021 | |
Business Combinations [Abstract] | |
ACQUISITIONS AND OTHER ARRANGEMENTS | ACQUISITIONS AND OTHER ARRANGEMENTS Transderm Scop In March 2021, we acquired the rights to Transderm Scop (TDS) for the U.S. and specified territories outside of the U.S. from subsidiaries of GlaxoSmithKline for an upfront purchase price of $60 million including the cost of acquired inventory and the potential for additional cash consideration of $30 million, which had an acquisition-date fair value of $24 million, based upon regulatory approval of a new contract manufacturer by a specified date. We previously sold this product under a distribution license to the U.S. institutional market. TDS is indicated for post-operative nausea and vomiting in the U.S. and motion sickness in European markets. W e concluded that the acquired assets met the definition of a business and accounted for the transaction as a business combination using the acquisition method of accounting. The fair value of the potential contingent consideration payment was estimated by applying a probability-weighted expected payment model and is a Level 3 fair value measurement due to the significant estimates and assumptions used by management in establishing the estimated fair value. The following table summarizes the fair value of the consideration transferred: (in millions) Cash $ 60 Contingent Consideration 24 Total Consideration $ 84 The following table summarizes the fair value of the assets acquired as of the acquisition date: (in millions) Assets acquired Inventory $ 14 Goodwill 3 Other intangible assets 67 Total assets required $ 84 The valuation of the assets acquired are preliminary and measurement period adjustments may be recorded in the future as we finalize our fair value estimates. The results of operations of the acquired business have been included in our consolidated statement of income since the date the business was acquired and were insignificant during the three months ended March 31, 2021. We allocated $64 million of the total consideration to the TDS developed product rights with an estimated useful life of 9 years and $3 million to customer relationships with an estimated useful life of 7 years. The fair values of the intangible assets were determined using the income approach. The discount rates used to measure the intangible assets were 22.5% for developed product rights and 15.5% 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 deductible for tax purposes, includes the value of overall strategic benefits provided to our pharmaceutical portfolio and is included in the Americas and EMEA segments. We have not presented pro forma financial information for the acquisition because its results are not material to our consolidated financial statements. Caelyx and Doxil In February 2021, we acquired the rights to Caelyx and Doxil, the branded versions of liposomal doxorubicin, from a subsidiary of Johnson & Johnson for specified territories outside of the U.S. We previously acquired the U.S. rights to this product in 2019. Liposomal doxorubicin is a chemotherapy medicine used to treat various types of cancer. The transaction was accounted for as an asset acquisition, as substantially all of the fair value of the gross assets acquired was concentrated in the developed technology intangible asset. The purchase price of $325 million was allocated to the assets acquired, which included a $314 million developed-technology intangible asset with an estimated useful life of 9 years and an $11 million customer relationship intangible asset with an estimated useful life of 8 years. Net sales related to this acquisition from the acquisition date through March 31, 2021 were $13 million. |
SUPPLEMENTAL FINANCIAL INFORMAT
SUPPLEMENTAL FINANCIAL INFORMATION | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
SUPPLEMENTAL FINANCIAL INFORMATION | SUPPLEMENTAL FINANCIAL INFORMATION Interest Expense, Net Three months ended (in millions) 2021 2020 Interest expense, net of capitalized interest $ 37 $ 30 Interest income (3) (9) Interest expense, net $ 34 $ 21 Other Expense, Net Three months ended (in millions) 2021 2020 Foreign exchange (gains) losses, net $ (3) $ 11 Pension and other postretirement benefit plans 4 (1) Other, net 4 — Other expense, net $ 5 $ 10 Allowance for Doubtful Accounts The following table is a summary of the changes in our allowance for doubtful accounts for the three months ended March 31, 2021 and 2020. Three months ended (in millions) 2021 2020 Balance at beginning of period $ 125 $ 112 Adoption of new accounting standard — 4 Charged to costs and expenses 1 7 Currency translation adjustments (6) (9) Balance at end of period $ 120 $ 114 Inventories (in millions) March 31, December 31, Raw materials $ 457 $ 460 Work in process 221 196 Finished goods 1,339 1,260 Inventories $ 2,017 $ 1,916 Property, Plant and Equipment, Net (in millions) March 31, December 31, Property, plant and equipment, at cost $ 11,105 $ 11,271 Accumulated depreciation (6,491) (6,549) Property, plant and equipment, net $ 4,614 $ 4,722 Non-Cash Operating and Investing Activities Right-of-use operating lease assets obtained in exchange for lease obligations for the three months ended March 31, 2021 and 2020 were $5 million and $15 million, respectively. As of March 31, 2021, we have entered into lease agreements with aggregate future lease payments of approximately $46 million for facilities and equipment that have not yet commenced. Purchases of property, plant and equipment included in accounts payable as of March 31, 2021 and 2020 were $63 million and $49 million, respectively. |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS, NET | 3 Months Ended |
Mar. 31, 2021 | |
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, 2020 $ 2,574 $ 406 $ 237 $ 3,217 Reallocation of goodwill 81 (81) — — Acquisitions 2 1 — 3 Currency translation (90) (11) (8) (109) Balance as of March 31, 2021 $ 2,567 $ 315 $ 229 $ 3,111 As of March 31, 2021, there were no reductions in goodwill relating to impairment losses. As discussed in Note 16 - Segment Information, we made a change to our reportable segments in the first quarter of 2021. As a result of this change, we reallocated goodwill from our EMEA segment to the Americas segment using a relative fair value approach. In addition, we completed an assessment of any potential goodwill impairment for all reporting units immediately prior to the reallocation and determined that no impairment existed. 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 Total March 31, 2021 Gross other intangible assets $ 3,023 $ 491 $ 169 $ 3,683 Accumulated amortization (1,394) (327) — (1,721) Other intangible assets, net $ 1,629 $ 164 $ 169 $ 1,962 December 31, 2020 Gross other intangible assets $ 2,713 $ 495 $ 169 $ 3,377 Accumulated amortization (1,374) (332) — (1,706) Other intangible assets, net $ 1,339 $ 163 $ 169 $ 1,671 Intangible asset amortization expense was $64 million and $52 million for the three months ended March 31, 2021 and 2020, respectively. |
FINANCING ARRANGEMENTS
FINANCING ARRANGEMENTS | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
FINANCING ARRANGEMENTS | FINANCING ARRANGEMENTS Credit Facilities Our U.S. dollar-denominated revolving credit facility has a capacity of $2.0 billion and our Euro-denominated revolving credit facility has a capacity of approximately €200 million. As of March 31, 2021 and December 31, 2020, there were no borrowings outstanding under our U.S. dollar or Euro-denominated credit facilities. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2021 | |
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 March 31, 2021 and December 31, 2020, our total recorded reserves with respect to legal and environmental matters were $53 million and $40 million, respectively, and there was a $7 million insurance receivable as of March 31, 2021. 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 these Superfund cases, we are involved in an ongoing voluntary environmental remediation associated with historic operations at our Irvine, California, United States facility. As of March 31, 2021 and December 31, 2020, our environmental reserves, which are measured on an undiscounted basis, were $19 million and $20 million, respectively. After considering these reserves, the outcome of these matters is not expected to have a material adverse effect on our financial position or results of operations. General Litigation In November 2016, a putative 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, which we moved to dismiss on November 9, 2018. The court granted our motion to dismiss the amended complaint with prejudice on April 3, 2020. The plaintiffs did not file an appeal. 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 had also requested that we provide information regarding business practices in the IV saline industry. We cooperated with that request and have been advised that the matter has now been closed. 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. Plaintiffs filed an amended complaint on June 25, 2020 containing substantially the same allegations. On August 24, 2020, we filed a motion to dismiss the amended complaint. On January 12, 2021, the Court granted our motion to dismiss the amended complaint but gave plaintiffs an opportunity to file a further-amended complaint. The parties reached an agreement to settle the case for $16 million, subject to the completion of confirmatory discovery and final approval by the Court. The Court granted preliminary approval of the settlement on April 20, 2021. A final approval hearing is currently scheduled for August 10, 2021. We are fully reserved for the settlement amount as of March 31, 2021. 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 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. |
STOCKHOLDERS_ EQUITY
STOCKHOLDERS’ EQUITY | 3 Months Ended |
Mar. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
STOCKHOLDERS' EQUITY | STOCKHOLDERS’ EQUITY Stock-Based Compensation Stock compensation expense totaled $22 million and $29 million in the first quarter of 2021 and 2020, respectively. Approximately 75% of stock compensation expense is classified within SG&A expense with the remainder classified in cost of sales and R&D expense. We awarded stock compensation grants which consisted of 4.0 million stock options, 0.5 million restricted stock units (RSUs) and 0.3 million performance stock units (PSUs) during the first quarter of 2021. The grant date fair values of stock options, RSUs and PSUs awarded in the first quarter of 2021 were $62 million, $40 million and $27 million, respectively. Stock options and RSUs generally vest in one-third increments over a three-year period. Approximately 12.5% of the PSUs with a grant date in the current period related to the establishment of the adjusted operating margin vesting condition for awards issued in 2019. The remainder of PSUs granted in the current period were awarded in March 2021, for which the vesting conditions are equally divided based on our compound annual sales growth rate performance, our adjusted return on invested capital performance and on our stock performance relative to a specified peer group. All of the PSUs vest at the end of the applicable three-year service period. Stock Options The weighted-average Black-Scholes assumptions used in establishing the fair value of stock options granted during the period, along with weighted-average grant date fair values, were as follows: Three months ended 2021 2020 Expected volatility 25 % 26 % Expected life (in years) 5.5 5.5 Risk-free interest rate 0.8 % 0.6 % Dividend yield 1.3 % 1.2 % Fair value per stock option $ 16 $ 16 The total intrinsic value of stock options exercised was $21 million and $52 million during the first quarters of 2021 and 2020, respectively. As of March 31, 2021, the unrecognized compensation cost related to all unvested stock options of $109 million is expected to be recognized as expense over a weighted-average period of 2.1 years. RSUs As of March 31, 2021, the unrecognized compensation cost related to all unvested RSUs of $75 million is expected to be recognized as expense over a weighted-average period of 2.1 years. PSUs As of March 31, 2021, the unrecognized compensation cost related to all unvested PSUs of $46 million is expected to be recognized as expense over a weighted-average period of 1.8 years. Stock Options Award Modification In the first quarter of 2020, we modified the terms of stock option awards granted to 123 employees. Specifically, we extended the term for certain stock options that were scheduled to expire in the first quarter of 2020 as applicable employees were not permitted to exercise these awards due to our announcement in February 2020 that our previously issued financial statements should no longer be relied upon. The stock options were extended in order to allow impacted employees to exercise their stock option awards for a brief period once we became current with our SEC reporting obligations, which occurred in March 2020. As a result of the modifications, we recognized an additional $8 million of stock compensation expense during the quarter ended March 31, 2020. Cash Dividends Cash dividends declared per share for the three months ended March 31, 2021 and March 31, 2020 were $0.245 and $0.22, respectively. Stock Repurchase Programs |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE INCOME | 3 Months Ended |
Mar. 31, 2021 | |
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 and gains and losses on cash flow hedges. The following table is a net-of-tax summary of the changes in accumulated other comprehensive (loss) income (AOCI) by component for the three months ended March 31, 2021 and 2020. (in millions) CTA Pension and OPEB plans Hedging activities Total Gains (losses) Balance as of December 31, 2020 $ (2,587) $ (574) $ (153) $ (3,314) Other comprehensive income (loss) before reclassifications (208) 13 3 (192) Amounts reclassified from AOCI (a) — 17 9 26 Net other comprehensive income (loss) (208) 30 12 (166) Balance as of March 31, 2021 $ (2,795) $ (544) $ (141) $ (3,480) (in millions) CTA Pension and OPEB plans Hedging activities Total Gains (losses) Balance as of December 31, 2019 $ (2,954) $ (715) $ (41) $ (3,710) Other comprehensive income (loss) before (359) 10 (131) (480) Amounts reclassified from AOCI (a) — 12 1 13 Net other comprehensive income (loss) (359) 22 (130) (467) Balance as of March 31, 2020 $ (3,313) $ (693) $ (171) $ (4,177) (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 months ended March 31, 2021 and 2020. Amounts reclassified from AOCI (a) (in millions) Three months ended March 31, 2021 Three Months Ended March 31, 2020 Location of impact in income statement Amortization of pension and OPEB items Amortization of net losses and prior service costs or credits $ (21) $ (15) Other expense, net Less: Tax effect 4 3 Income tax expense $ (17) $ (12) Net of tax Gains (losses) on hedging activities Foreign exchange contracts $ (10) $ (1) Cost of sales Interest rate contracts $ (1) — Interest expense, net (11) (1) Total before tax Less: Tax effect 2 — Income tax expense $ (9) $ (1) Net of tax Total reclassifications for the period $ (26) $ (13) Total net of tax (a) Amounts in parentheses indicate reductions to net income. Refer to Note 11 for additional information regarding the amortization of pension and OPEB items and Note 14 for additional information regarding hedging activity. |
REVENUES
REVENUES | 3 Months Ended |
Mar. 31, 2021 | |
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. As of March 31, 2021, we had $7.9 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 25% of this amount as revenue over the remainder of 2021, 30% in 2022, 25% in 2023, and 10% in each of 2024 and 2025. Significant Judgments Revenues from product sales are recorded at the net sales price (transaction price), which includes estimates of variable consideration primarily related to rebates 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 accrued expenses and other current 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 for which it is probable that a significant reversal in revenue will not occur when the related uncertainty is resolved. Revenue recognized during the three months ended March 31, 2021 and 2020 related to performance obligations satisfied in prior periods was not material. Additionally, our contracts with customers often include promises to transfer multiple products and services to a customer. Determining whether products and services are considered distinct performance obligations that should be accounted for separately and determining the allocation of the transaction price may require significant judgement. 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 $1.6 billion and $1.7 billion as of March 31, 2021 and December 31, 2020, 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 The following table summarizes our contract assets: (in millions) March 31, December 31, Contract manufacturing services $ 49 $ 47 Software sales 41 40 Bundled equipment and consumable medical products contracts 46 47 Contract assets $ 136 $ 134 The following table summarizes the classification of contract assets and contract liabilities as reported in the condensed consolidated balance sheets: (in millions) March 31, December 31, Prepaid expenses and other current assets $ 74 $ 70 Other non-current assets 62 64 Contract assets $ 136 $ 134 Accrued expenses and other current liabilities $ 38 $ 32 Other non-current liabilities 42 34 Contract liabilities $ 80 $ 66 Contract liabilities are recognized when a customer pays consideration before we transfer goods or provide services. During the three months ended March 31, 2021 and 2020, the amount of revenue recognized that was included in contract liabilities as of December 31, 2020 and 2019 was not significant. Disaggregation of Net Sales Beginning in the first quarter of 2021, our product category net sales disclosures (previously referred to as global business units (GBUs)) separately present net sales from our BioPharma Solutions business, which was previously included within Other. Concurrent with that disaggregation of net sales from our BioPharma Solutions business, we have also allocated certain previously unallocated sales deductions from Other to various categories, primarily based on their respective net sales. Net sales for the first quarter of 2020 have been recast to conform to the current period presentation. The following tables disaggregate our net sales from contracts with customers by product category between the U.S. and international: Three Months Ended March 31, 2021 2020 (in millions) U.S. International Total U.S. International Total Renal Care 1 $ 216 $ 706 $ 922 $ 204 $ 666 $ 870 Medication Delivery 2 411 241 652 449 229 678 Pharmaceuticals 3 200 352 552 220 296 516 Clinical Nutrition 4 83 151 234 79 138 217 Advanced Surgery 5 126 91 217 137 87 224 Acute Therapies 6 81 126 207 60 96 156 BioPharma Solutions 7 44 91 135 48 66 114 Other 8 19 8 27 20 7 27 Total Baxter $ 1,180 $ 1,766 $ 2,946 $ 1,217 $ 1,585 $ 2,802 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 intravenous (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 BioPharma Solutions includes sales of contracted services we provide to various pharmaceutical and biopharmaceutical companies. 8 Other includes sales of miscellaneous product and service offerings. Lease Revenue 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, 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 months ended March 31, 2021 and 2020 were: Three Months Ended March 31, (in millions) 2021 2020 Sales-type lease revenue $ 6 $ 6 Operating lease revenue 34 14 Variable lease revenue 17 18 Total lease revenue $ 57 $ 38 Our net investment in sales-type leases was $131 million as of March 31, 2021, of which $19 million originated in 2017 and prior, $32 million in 2018, $36 million in 2019, $38 million in 2020 and $6 million in 2021. |
BUSINESS OPTIMIZATION CHARGES
BUSINESS OPTIMIZATION CHARGES | 3 Months Ended |
Mar. 31, 2021 | |
Restructuring and Related Activities [Abstract] | |
BUSINESS OPTIMIZATION CHARGES | BUSINESS OPTIMIZATION CHARGES In 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 through March 31, 2021, we have incurred cumulative pre-tax costs of $1.1 billion related to these actions. The costs consisted primarily of employee termination costs, implementation costs, contract termination costs, asset impairments and accelerated depreciation. We currently expect to incur additional pre-tax costs of approximately $12 million through the completion of the initiatives that are currently underway, primarily related to implementation costs. We continue to pursue cost savings initiatives and, to the extent further cost savings opportunities are identified, we may incur additional restructuring charges and costs to implement business optimization programs in future periods. During the three months ended March 31, 2021 and 2020, we recorded the following charges related to business optimization programs. Three Months Ended March 31, (in millions) 2021 2020 Restructuring charges $ 25 $ 25 Costs to implement business optimization programs 2 7 Total business optimization charges $ 27 $ 32 For segment reporting purposes, business optimization charges are unallocated expenses. Costs to implement business optimization programs for the three months ended March 31, 2021 and 2020, respectively, consisted primarily of external consulting and transition costs, including employee compensation and related costs. These costs were primarily included within cost of sales and SG&A expense. During the three months ended March 31, 2021 and 2020, we recorded the following restructuring charges. Three months ended March 31, 2021 (in millions) COGS SG&A R&D Total Employee termination costs $ 16 $ 5 $ — $ 21 Asset impairments 4 — — 4 Total restructuring charges $ 20 $ 5 $ — $ 25 Three months ended March 31, 2020 (in millions) COGS SG&A R&D Total Employee termination costs $ 2 $ 16 $ 1 $ 19 Asset impairments 6 — — 6 Total restructuring charges $ 8 $ 16 $ 1 $ 25 In conjunction with our business optimization initiatives in 2020, we sold property that resulted in a gain of $17 million. This gain is reflected within other operating income, net in our condensed consolidated statement of income for the three months ended March 31, 2020. The following table summarizes activity in the liability related to our restructuring initiatives. (in millions) Liability balance as of December 31, 2020 $ 113 Charges 21 Payments (24) Currency translation (3) Liability balance as of March 31, 2021 $ 107 Substantially all of our restructuring liabilities as of March 31, 2021 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 2022. |
PENSION AND OTHER POSTRETIREMEN
PENSION AND OTHER POSTRETIREMENT BENEFIT PROGRAMS | 3 Months Ended |
Mar. 31, 2021 | |
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 (in millions) 2021 2020 Pension benefits Service cost $ 22 $ 21 Interest cost 18 24 Expected return on plan assets (36) (41) Amortization of net losses and prior service costs 23 19 Net periodic pension cost $ 27 $ 23 OPEB Interest cost $ 1 $ 1 Amortization of net loss and prior service credit (2) (4) Net periodic OPEB cost (income) $ (1) $ (3) |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES Our effective income tax rate was 14.5% and 11.9% for the three months ended March 31, 2021 and 2020, 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 March 31, 2021, the difference between our effective income tax rate and the U.S. federal statutory rate was primarily attributable to decreases in accrued withholding taxes in several foreign jurisdictions and a favorable geographic earnings mix. As of March 31, 2021, we had an uncertain tax position under appeal in a foreign jurisdiction for which we did not record income tax expense because we believed that the position had a more-likely-than-not chance of being sustained based on its technical merits under the applicable tax laws. On April 23, 2021, we received an unfavorable court decision related to this matter. As a result of that decision, we will record a discrete income tax expense of $22 million to reflect the resolution of this tax matter in the second quarter of 2021. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 3 Months Ended |
Mar. 31, 2021 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE The numerator for both basic and diluted earnings per share (EPS) is net income attributable to Baxter stockholders. The denominator for basic EPS is the weighted-average number of shares outstanding during the period. The dilutive effect of outstanding stock options, RSUs and 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 (in millions) 2021 2020 Basic shares 505 507 Effect of dilutive securities 6 9 Diluted shares 511 516 The effect of dilutive securities includes unexercised stock options, unvested RSUs and contingently issuable shares related to granted PSUs. The computation of diluted EPS excludes 7 million and 1 million equity awards for the three months ended March 31, 2021, and 2020, respectively, because their inclusion would have had an anti-dilutive effect on diluted EPS. Refer to Note 7 for additional information regarding items impacting basic and diluted shares. |
DERIVATIVE INSTRUMENTS AND HEDG
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | 3 Months Ended |
Mar. 31, 2021 | |
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 Renminbi, Korean Won, Australian Dollar, Canadian Dollar, Japanese Yen, Colombian Peso, Brazilian Real, Mexican Peso, Indian Rupee 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 the mix of fixed- and floating-rate debt that we believe is appropriate at that time. 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 generally 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 debt 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 forecasted interest payments on anticipated issuances of debt, respectively. The notional amounts of foreign exchange contracts designated as cash flow hedges were $355 million and $345 million as of March 31, 2021 and December 31, 2020, respectively. The maximum term over which we have cash flow hedge contracts in place related to forecasted transactions at March 31, 2021 is 12 months for foreign exchange contracts. There were no outstanding interest rate contracts designated as cash flow hedges as of March 31, 2021 and December 31, 2020. 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, which are also recognized in earnings. Changes in the fair value of hedge instruments designated as 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 contracts designated as fair value hedges as of March 31, 2021 and December 31, 2020. 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 March 31, 2021, we had an accumulated pre-tax unrealized translation loss in AOCI of $131 million related to the Euro-denominated senior notes. 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 three months of 2021 or 2020 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 three months of 2021 or 2020. If we remove a net investment hedge designation, 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. There were no net investment hedges terminated during the first three months of 2021 or 2020. 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 $780 million as of March 31, 2021 and $1.0 billion as of December 31, 2020. Gains and Losses on Hedging Instruments and Undesignated Derivative Instruments The following tables summarize the gains and losses on our hedging instruments and the classification of those gains and losses within our condensed consolidated financial statements for the three months ended March 31, 2021 and 2020. Gain (loss) recognized in OCI Location of gain (loss) Gain (loss) reclassified from AOCI into income (in millions) 2021 2020 2021 2020 Cash flow hedges Interest rate contracts $ — $ (184) Interest expense, net $ (1) $ — Foreign exchange contracts 4 14 Cost of sales (10) (1) Net investment hedges 114 49 Other expense, net — — Total $ 118 $ (121) $ (11) $ (1) Location of gain (loss) in income statement Gain (loss) recognized in income (in millions) 2021 2020 Undesignated derivative instruments Foreign exchange contracts Other expense, net $ (22) $ 2 As of March 31, 2021, $12 million of deferred, net after-tax losses 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 March 31, 2021. 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 Foreign exchange contracts Prepaid expenses and other current assets 2 Accrued expenses and other current liabilities 8 Total derivative instruments designated as hedges 2 8 Undesignated derivative instruments Foreign exchange contracts Prepaid expenses and other current assets 1 Accrued expenses and other current liabilities 7 Total derivative instruments $ 3 $ 15 The following table summarizes the classification and fair values of derivative instruments reported in the condensed consolidated balance sheet as of December 31, 2020. 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 Foreign exchange contracts Prepaid expenses and other current assets — Accrued expenses and other current liabilities 17 Total derivative instruments designated as hedges — 17 Undesignated derivative instruments Foreign exchange contracts Prepaid expenses and other current assets 11 Accrued expenses and other current liabilities 2 Total derivative instruments $ 11 $ 19 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. March 31, 2021 December 31, 2020 (in millions) Asset Liability Asset Liability Gross amounts recognized in the consolidated balance sheet $ 3 $ 15 $ 11 $ 19 Gross amount subject to offset in master netting arrangements not offset in the consolidated balance sheet (3) (3) (6) (6) Total $ — $ 12 $ 5 $ 13 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 millions) Balance as of March 31, 2021 Balance as of December 31, 2020 Balance as of March 31, 2021 Balance as of December 31, 2020 Long-term debt $ 102 $ 102 $ 5 $ 5 (a) These fair value hedges were terminated in 2018 and earlier periods. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended |
Mar. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS The following tables summarize our assets and liabilities that are measured at fair value on a recurring basis. Basis of fair value measurement (in millions) Balance as of March 31, 2021 Quoted prices in active markets for identical assets Significant other Significant Assets Foreign exchange contracts $ 3 $ — $ 3 $ — Debt securities 13 — 13 — Marketable equity securities 2 2 — — Total $ 18 $ 2 $ 16 $ — Liabilities Foreign exchange contracts $ 15 $ — $ 15 $ — Contingent payments related to acquisitions 38 — — 38 Total $ 53 $ — $ 15 $ 38 Basis of fair value measurement (in millions) Balance as of December 31, 2020 Quoted prices in active markets for identical assets Significant other Significant Assets Foreign exchange contracts $ 11 $ — $ 11 $ — Debt securities 13 — 13 — Marketable equity securities 17 17 — — Total $ 41 $ 17 $ 24 $ — Liabilities Foreign exchange contracts $ 19 $ — $ 19 $ — Contingent payments related to acquisitions 30 — — 30 Total $ 49 $ — $ 19 $ 30 As of March 31, 2021 and December 31, 2020, cash and cash equivalents of $3.2 billion and $3.7 billion, respectively, included money market and other short-term funds of approximately $1.7 billion and $1.8 billion, 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 recurring fair value measurements that use significant unobservable inputs (Level 3), which consist of contingent payments related to acquisitions. Three months ended (in millions) 2021 2020 Fair value at beginning of period $ 30 $ 39 Additions 24 4 Change in fair value recognized in earnings — (3) Payments (16) (1) Fair value at end of period $ 38 $ 39 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 March 31, 2021 and December 31, 2020. Book values Fair values(a) (in millions) 2021 2020 2021 2020 Liabilities Current maturities of long-term debt and finance lease obligations 407 406 409 409 Long-term debt and finance lease obligations 5,681 5,786 6,085 6,471 (a) These fair value amounts are classified as Level 2 within the fair value hierarchy as they are estimated based on observable inputs. 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, such as accounts receivable and accounts payable, approximate their fair values due to the short-term maturities of most of those assets and liabilities. Equity investments not measured at fair value are comprised of other equity investments without readily determinable fair values and were $98 million at March 31, 2021 and $105 million at December 31, 2020. Those investments are included in Other non-current assets on our condensed consolidated balance sheets. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 3 Months Ended |
Mar. 31, 2021 | |
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. In the first quarter of 2021, the information provided to our Chief Executive Officer for purposes of allocating resources and assessing performance was updated to reallocate contracted services activities performed at a German manufacturing facility from our EMEA segment to our Americas segment. The contracted services performed at that facility are part of our BioPharma Solutions business, which is managed as part of the Americas segment. Accordingly, the reported financial results of the Americas segment now include the contracted services activities performed at that facility. Segment results for the first quarter of 2020 have been recast to conform to the current period presentation. 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 corporate headquarters costs, certain R&D costs, certain product category support costs, stock compensation expense, certain employee benefit plan costs, certain foreign currency hedging activities, 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 (in millions) 2021 2020 Net sales: Americas $ 1,560 $ 1,565 EMEA 738 688 APAC 648 549 Total net sales $ 2,946 $ 2,802 Operating income : Americas $ 599 $ 588 EMEA 135 117 APAC 138 128 Total segment operating income $ 872 $ 833 The following is a reconciliation of segment operating income to income before income taxes per the condensed consolidated statements of income. Three months ended (in millions) 2021 2020 Total segment operating income $ 872 $ 833 Corporate and other (482) (424) Total operating income 390 409 Net interest expense 34 21 Other expense, net 5 10 Income before income taxes $ 351 $ 378 Refer to Note 9 for additional information on Net Sales by product category. |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
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 consolidated financial statements and notes included in our Annual Report on Form 10-K for the year ended December 31, 2020 (2020 Annual Report). 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. Risks and Uncertainties Related to COVID-19 |
ACQUISITIONS AND OTHER ARRANG_2
ACQUISITIONS AND OTHER ARRANGEMENTS (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Business Combinations [Abstract] | |
Schedule Of Asset Acquisition Consideration | The following table summarizes the fair value of the consideration transferred: (in millions) Cash $ 60 Contingent Consideration 24 Total Consideration $ 84 |
Schedule Of Asset Acquisition | The following table summarizes the fair value of the assets acquired as of the acquisition date: (in millions) Assets acquired Inventory $ 14 Goodwill 3 Other intangible assets 67 Total assets required $ 84 |
SUPPLEMENTAL FINANCIAL INFORM_2
SUPPLEMENTAL FINANCIAL INFORMATION (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Interest Expense, Net | Interest Expense, Net Three months ended (in millions) 2021 2020 Interest expense, net of capitalized interest $ 37 $ 30 Interest income (3) (9) Interest expense, net $ 34 $ 21 |
Other (Income) Expense, Net | Other Expense, Net Three months ended (in millions) 2021 2020 Foreign exchange (gains) losses, net $ (3) $ 11 Pension and other postretirement benefit plans 4 (1) Other, net 4 — Other expense, net $ 5 $ 10 |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts The following table is a summary of the changes in our allowance for doubtful accounts for the three months ended March 31, 2021 and 2020. Three months ended (in millions) 2021 2020 Balance at beginning of period $ 125 $ 112 Adoption of new accounting standard — 4 Charged to costs and expenses 1 7 Currency translation adjustments (6) (9) Balance at end of period $ 120 $ 114 |
Inventories | Inventories (in millions) March 31, December 31, Raw materials $ 457 $ 460 Work in process 221 196 Finished goods 1,339 1,260 Inventories $ 2,017 $ 1,916 |
Property, Plant and Equipment, Net | Property, Plant and Equipment, Net (in millions) March 31, December 31, Property, plant and equipment, at cost $ 11,105 $ 11,271 Accumulated depreciation (6,491) (6,549) Property, plant and equipment, net $ 4,614 $ 4,722 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS, NET (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
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, 2020 $ 2,574 $ 406 $ 237 $ 3,217 Reallocation of goodwill 81 (81) — — Acquisitions 2 1 — 3 Currency translation (90) (11) (8) (109) Balance as of March 31, 2021 $ 2,567 $ 315 $ 229 $ 3,111 |
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 Total March 31, 2021 Gross other intangible assets $ 3,023 $ 491 $ 169 $ 3,683 Accumulated amortization (1,394) (327) — (1,721) Other intangible assets, net $ 1,629 $ 164 $ 169 $ 1,962 December 31, 2020 Gross other intangible assets $ 2,713 $ 495 $ 169 $ 3,377 Accumulated amortization (1,374) (332) — (1,706) Other intangible assets, net $ 1,339 $ 163 $ 169 $ 1,671 |
STOCKHOLDERS_ EQUITY (Tables)
STOCKHOLDERS’ EQUITY (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | The weighted-average Black-Scholes assumptions used in establishing the fair value of stock options granted during the period, along with weighted-average grant date fair values, were as follows: Three months ended 2021 2020 Expected volatility 25 % 26 % Expected life (in years) 5.5 5.5 Risk-free interest rate 0.8 % 0.6 % Dividend yield 1.3 % 1.2 % Fair value per stock option $ 16 $ 16 |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE INCOME (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Equity [Abstract] | |
Summary of Changes in AOCI by Component | The following table is a net-of-tax summary of the changes in accumulated other comprehensive (loss) income (AOCI) by component for the three months ended March 31, 2021 and 2020. (in millions) CTA Pension and OPEB plans Hedging activities Total Gains (losses) Balance as of December 31, 2020 $ (2,587) $ (574) $ (153) $ (3,314) Other comprehensive income (loss) before reclassifications (208) 13 3 (192) Amounts reclassified from AOCI (a) — 17 9 26 Net other comprehensive income (loss) (208) 30 12 (166) Balance as of March 31, 2021 $ (2,795) $ (544) $ (141) $ (3,480) (in millions) CTA Pension and OPEB plans Hedging activities Total Gains (losses) Balance as of December 31, 2019 $ (2,954) $ (715) $ (41) $ (3,710) Other comprehensive income (loss) before (359) 10 (131) (480) Amounts reclassified from AOCI (a) — 12 1 13 Net other comprehensive income (loss) (359) 22 (130) (467) Balance as of March 31, 2020 $ (3,313) $ (693) $ (171) $ (4,177) (a) See table below for details about these reclassifications. |
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 months ended March 31, 2021 and 2020. Amounts reclassified from AOCI (a) (in millions) Three months ended March 31, 2021 Three Months Ended March 31, 2020 Location of impact in income statement Amortization of pension and OPEB items Amortization of net losses and prior service costs or credits $ (21) $ (15) Other expense, net Less: Tax effect 4 3 Income tax expense $ (17) $ (12) Net of tax Gains (losses) on hedging activities Foreign exchange contracts $ (10) $ (1) Cost of sales Interest rate contracts $ (1) — Interest expense, net (11) (1) Total before tax Less: Tax effect 2 — Income tax expense $ (9) $ (1) Net of tax Total reclassifications for the period $ (26) $ (13) Total net of tax (a) Amounts in parentheses indicate reductions to net income. |
REVENUES (Tables)
REVENUES (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Contract with Customer, Contract Asset | The following table summarizes our contract assets: (in millions) March 31, December 31, Contract manufacturing services $ 49 $ 47 Software sales 41 40 Bundled equipment and consumable medical products contracts 46 47 Contract assets $ 136 $ 134 The following table summarizes the classification of contract assets and contract liabilities as reported in the condensed consolidated balance sheets: (in millions) March 31, December 31, Prepaid expenses and other current assets $ 74 $ 70 Other non-current assets 62 64 Contract assets $ 136 $ 134 Accrued expenses and other current liabilities $ 38 $ 32 Other non-current liabilities 42 34 Contract liabilities $ 80 $ 66 |
Net Sales from Contracts with Customers by Global Business Unit | The following tables disaggregate our net sales from contracts with customers by product category between the U.S. and international: Three Months Ended March 31, 2021 2020 (in millions) U.S. International Total U.S. International Total Renal Care 1 $ 216 $ 706 $ 922 $ 204 $ 666 $ 870 Medication Delivery 2 411 241 652 449 229 678 Pharmaceuticals 3 200 352 552 220 296 516 Clinical Nutrition 4 83 151 234 79 138 217 Advanced Surgery 5 126 91 217 137 87 224 Acute Therapies 6 81 126 207 60 96 156 BioPharma Solutions 7 44 91 135 48 66 114 Other 8 19 8 27 20 7 27 Total Baxter $ 1,180 $ 1,766 $ 2,946 $ 1,217 $ 1,585 $ 2,802 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 intravenous (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 BioPharma Solutions includes sales of contracted services we provide to various pharmaceutical and biopharmaceutical companies. 8 Other includes sales of miscellaneous product and service offerings. |
Sales-type Lease, Lease Income | The components of lease revenue for the three months ended March 31, 2021 and 2020 were: Three Months Ended March 31, (in millions) 2021 2020 Sales-type lease revenue $ 6 $ 6 Operating lease revenue 34 14 Variable lease revenue 17 18 Total lease revenue $ 57 $ 38 |
Operating Lease, Lease Income | The components of lease revenue for the three months ended March 31, 2021 and 2020 were: Three Months Ended March 31, (in millions) 2021 2020 Sales-type lease revenue $ 6 $ 6 Operating lease revenue 34 14 Variable lease revenue 17 18 Total lease revenue $ 57 $ 38 |
BUSINESS OPTIMIZATION CHARGES (
BUSINESS OPTIMIZATION CHARGES (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Restructuring and Related Activities [Abstract] | |
Summary of Business Optimization Charges | During the three months ended March 31, 2021 and 2020, we recorded the following charges related to business optimization programs. Three Months Ended March 31, (in millions) 2021 2020 Restructuring charges $ 25 $ 25 Costs to implement business optimization programs 2 7 Total business optimization charges $ 27 $ 32 |
Components of Restructuring Charges | During the three months ended March 31, 2021 and 2020, we recorded the following restructuring charges. Three months ended March 31, 2021 (in millions) COGS SG&A R&D Total Employee termination costs $ 16 $ 5 $ — $ 21 Asset impairments 4 — — 4 Total restructuring charges $ 20 $ 5 $ — $ 25 Three months ended March 31, 2020 (in millions) COGS SG&A R&D Total Employee termination costs $ 2 $ 16 $ 1 $ 19 Asset impairments 6 — — 6 Total restructuring charges $ 8 $ 16 $ 1 $ 25 |
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, 2020 $ 113 Charges 21 Payments (24) Currency translation (3) Liability balance as of March 31, 2021 $ 107 |
PENSION AND OTHER POSTRETIREM_2
PENSION AND OTHER POSTRETIREMENT BENEFIT PROGRAMS (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
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 (in millions) 2021 2020 Pension benefits Service cost $ 22 $ 21 Interest cost 18 24 Expected return on plan assets (36) (41) Amortization of net losses and prior service costs 23 19 Net periodic pension cost $ 27 $ 23 OPEB Interest cost $ 1 $ 1 Amortization of net loss and prior service credit (2) (4) Net periodic OPEB cost (income) $ (1) $ (3) |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
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 (in millions) 2021 2020 Basic shares 505 507 Effect of dilutive securities 6 9 Diluted shares 511 516 |
DERIVATIVE INSTRUMENTS AND HE_2
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Summary of Gains and Losses on Derivative Instruments | The following tables summarize the gains and losses on our hedging instruments and the classification of those gains and losses within our condensed consolidated financial statements for the three months ended March 31, 2021 and 2020. Gain (loss) recognized in OCI Location of gain (loss) Gain (loss) reclassified from AOCI into income (in millions) 2021 2020 2021 2020 Cash flow hedges Interest rate contracts $ — $ (184) Interest expense, net $ (1) $ — Foreign exchange contracts 4 14 Cost of sales (10) (1) Net investment hedges 114 49 Other expense, net — — Total $ 118 $ (121) $ (11) $ (1) Location of gain (loss) in income statement Gain (loss) recognized in income (in millions) 2021 2020 Undesignated derivative instruments Foreign exchange contracts Other expense, net $ (22) $ 2 |
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 March 31, 2021. 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 Foreign exchange contracts Prepaid expenses and other current assets 2 Accrued expenses and other current liabilities 8 Total derivative instruments designated as hedges 2 8 Undesignated derivative instruments Foreign exchange contracts Prepaid expenses and other current assets 1 Accrued expenses and other current liabilities 7 Total derivative instruments $ 3 $ 15 The following table summarizes the classification and fair values of derivative instruments reported in the condensed consolidated balance sheet as of December 31, 2020. 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 Foreign exchange contracts Prepaid expenses and other current assets — Accrued expenses and other current liabilities 17 Total derivative instruments designated as hedges — 17 Undesignated derivative instruments Foreign exchange contracts Prepaid expenses and other current assets 11 Accrued expenses and other current liabilities 2 Total derivative instruments $ 11 $ 19 |
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. March 31, 2021 December 31, 2020 (in millions) Asset Liability Asset Liability Gross amounts recognized in the consolidated balance sheet $ 3 $ 15 $ 11 $ 19 Gross amount subject to offset in master netting arrangements not offset in the consolidated balance sheet (3) (3) (6) (6) Total $ — $ 12 $ 5 $ 13 |
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 millions) Balance as of March 31, 2021 Balance as of December 31, 2020 Balance as of March 31, 2021 Balance as of December 31, 2020 Long-term debt $ 102 $ 102 $ 5 $ 5 (a) These fair value hedges were terminated in 2018 and earlier periods. |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Summary of Financial Instruments Measured at Fair Value on Recurring Basis | The following tables summarize our assets and liabilities that are measured at fair value on a recurring basis. Basis of fair value measurement (in millions) Balance as of March 31, 2021 Quoted prices in active markets for identical assets Significant other Significant Assets Foreign exchange contracts $ 3 $ — $ 3 $ — Debt securities 13 — 13 — Marketable equity securities 2 2 — — Total $ 18 $ 2 $ 16 $ — Liabilities Foreign exchange contracts $ 15 $ — $ 15 $ — Contingent payments related to acquisitions 38 — — 38 Total $ 53 $ — $ 15 $ 38 Basis of fair value measurement (in millions) Balance as of December 31, 2020 Quoted prices in active markets for identical assets Significant other Significant Assets Foreign exchange contracts $ 11 $ — $ 11 $ — Debt securities 13 — 13 — Marketable equity securities 17 17 — — Total $ 41 $ 17 $ 24 $ — Liabilities Foreign exchange contracts $ 19 $ — $ 19 $ — Contingent payments related to acquisitions 30 — — 30 Total $ 49 $ — $ 19 $ 30 |
Reconciliation of Fair Value Measurements that Use Significant Unobservable Inputs | The following table is a reconciliation of recurring fair value measurements that use significant unobservable inputs (Level 3), which consist of contingent payments related to acquisitions. Three months ended (in millions) 2021 2020 Fair value at beginning of period $ 30 $ 39 Additions 24 4 Change in fair value recognized in earnings — (3) Payments (16) (1) Fair value at end of period $ 38 $ 39 |
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 March 31, 2021 and December 31, 2020. Book values Fair values(a) (in millions) 2021 2020 2021 2020 Liabilities Current maturities of long-term debt and finance lease obligations 407 406 409 409 Long-term debt and finance lease obligations 5,681 5,786 6,085 6,471 (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) | 3 Months Ended |
Mar. 31, 2021 | |
Segment Reporting [Abstract] | |
Summary of Financial Information for Our Segments | Financial information for our segments is as follows. Three months ended (in millions) 2021 2020 Net sales: Americas $ 1,560 $ 1,565 EMEA 738 688 APAC 648 549 Total net sales $ 2,946 $ 2,802 Operating income : Americas $ 599 $ 588 EMEA 135 117 APAC 138 128 Total segment operating income $ 872 $ 833 |
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 (in millions) 2021 2020 Total segment operating income $ 872 $ 833 Corporate and other (482) (424) Total operating income 390 409 Net interest expense 34 21 Other expense, net 5 10 Income before income taxes $ 351 $ 378 |
ACQUISITIONS AND OTHER ARRANG_3
ACQUISITIONS AND OTHER ARRANGEMENTS - Additional Information (Details) $ in Millions | 1 Months Ended | 2 Months Ended | 3 Months Ended | ||
Mar. 31, 2021USD ($) | Feb. 28, 2021USD ($) | Mar. 31, 2021USD ($) | Mar. 31, 2021USD ($) | Mar. 31, 2020USD ($) | |
Business Acquisition [Line Items] | |||||
Payments to acquire productive assets | $ 171 | $ 172 | |||
Net sales | 2,946 | $ 2,802 | |||
Caelyx and Doxil | |||||
Business Acquisition [Line Items] | |||||
Payments to acquire productive assets | $ 325 | ||||
Net sales | $ 13 | ||||
Caelyx and Doxil | Customer Relationships | |||||
Business Acquisition [Line Items] | |||||
Weighted-average useful life | 8 years | ||||
Payments to acquire productive assets | $ 11 | ||||
Caelyx and Doxil | Developed Technology Intangible Asset | |||||
Business Acquisition [Line Items] | |||||
Weighted-average useful life | 9 years | ||||
Payments to acquire productive assets | $ 314 | ||||
Transderm Scop | Glaxo Smith Kline | |||||
Business Acquisition [Line Items] | |||||
Cash | $ 60 | ||||
Contingent Consideration | 30 | $ 30 | $ 30 | ||
Contingent consideration, fair value | 24 | ||||
Transderm Scop | Developed Product Rights | Glaxo Smith Kline | |||||
Business Acquisition [Line Items] | |||||
Fair value of asset acquired | $ 64 | ||||
Weighted-average useful life | 9 years | ||||
Transderm Scop | Developed Product Rights | Measurement Input, Discount Rate | Glaxo Smith Kline | |||||
Business Acquisition [Line Items] | |||||
Discount rate used to measure intangible assets | 0.225 | 0.225 | 0.225 | ||
Transderm Scop | Customer Relationships | Glaxo Smith Kline | |||||
Business Acquisition [Line Items] | |||||
Fair value of asset acquired | $ 3 | ||||
Weighted-average useful life | 7 years | ||||
Transderm Scop | Customer Relationships | Measurement Input, Discount Rate | Glaxo Smith Kline | |||||
Business Acquisition [Line Items] | |||||
Discount rate used to measure intangible assets | 0.155 | 0.155 | 0.155 |
ACQUISITIONS AND OTHER ARRANG_4
ACQUISITIONS AND OTHER ARRANGEMENTS - Schedule of Fair Value of Consideration Transferred (Details) - Transderm Scop - Glaxo Smith Kline - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended |
Mar. 31, 2021 | Mar. 31, 2021 | |
Business Acquisition [Line Items] | ||
Cash | $ 60 | |
Contingent Consideration | $ 24 | |
Total Consideration | $ 84 |
ACQUISITIONS AND OTHER ARRANG_5
ACQUISITIONS AND OTHER ARRANGEMENTS - Fair Value of Assets Acquired (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Assets acquired | ||
Goodwill | $ 3,111 | $ 3,217 |
Transderm Scop | Glaxo Smith Kline | ||
Assets acquired | ||
Inventory | 14 | |
Goodwill | 3 | |
Other intangible assets | 67 | |
Total assets required | $ 84 |
SUPPLEMENTAL FINANCIAL INFORM_3
SUPPLEMENTAL FINANCIAL INFORMATION - Interest Expense, Net (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Interest Income Expense Net | ||
Interest expense, net of capitalized interest | $ 37 | $ 30 |
Interest income | (3) | (9) |
Interest expense, net | $ 34 | $ 21 |
SUPPLEMENTAL FINANCIAL INFORM_4
SUPPLEMENTAL FINANCIAL INFORMATION - Other Expense, Net (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Other Income, net | ||
Foreign exchange (gains) losses, net | $ (3) | $ 11 |
Pension and other postretirement benefit plans | 4 | (1) |
Other, net | 4 | 0 |
Other expense, net | $ 5 | $ 10 |
SUPPLEMENTAL FINANCIAL INFORM_5
SUPPLEMENTAL FINANCIAL INFORMATION - Allowance for Doubtful Accounts (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Allowance for Doubtful Accounts Receivable [Roll Forward] | ||
Balance at beginning of period | $ 125 | $ 112 |
Adoption of new accounting standard | 0 | 4 |
Charged to costs and expenses | 1 | 7 |
Currency translation adjustments | (6) | (9) |
Balance at end of period | $ 120 | $ 114 |
SUPPLEMENTAL FINANCIAL INFORM_6
SUPPLEMENTAL FINANCIAL INFORMATION - Inventories (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Raw materials | $ 457 | $ 460 |
Work in process | 221 | 196 |
Finished goods | 1,339 | 1,260 |
Inventories | $ 2,017 | $ 1,916 |
SUPPLEMENTAL FINANCIAL INFORM_7
SUPPLEMENTAL FINANCIAL INFORMATION - Property, Plant and Equipment, Net (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Property, plant and equipment, at cost | $ 11,105 | $ 11,271 |
Accumulated depreciation | (6,491) | (6,549) |
Property, plant and equipment, net | $ 4,614 | $ 4,722 |
SUPPLEMENTAL FINANCIAL INFORM_8
SUPPLEMENTAL FINANCIAL INFORMATION - Additional Information (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Property, Plant and Equipment [Line Items] | ||
Right-of-use asset obtained in exchange for operating lease liability | $ 5,000,000 | $ 15,000,000 |
Lease not yet commenced, assumption and judgment, value of underlying asset, amount | 46,000,000 | |
Unsettled share repurchase | 47,000,000 | 0 |
Property, Plant and Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Capital expenditures incurred but not yet paid | $ 63,000,000 | $ 49,000,000 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS, NET - Goodwill (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | $ 3,217 |
Reallocation of goodwill | 0 |
Acquisitions | 3 |
Currency translation | (109) |
Goodwill, ending balance | 3,111 |
Americas | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | 2,574 |
Reallocation of goodwill | 81 |
Acquisitions | 2 |
Currency translation | (90) |
Goodwill, ending balance | 2,567 |
EMEA | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | 406 |
Reallocation of goodwill | (81) |
Acquisitions | 1 |
Currency translation | (11) |
Goodwill, ending balance | 315 |
APAC | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | 237 |
Reallocation of goodwill | 0 |
Acquisitions | 0 |
Currency translation | (8) |
Goodwill, ending balance | $ 229 |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS, NET - Additional Information (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Goodwill, impairment loss | $ 0 | |
Intangible asset amortization expense | $ 64,000,000 | $ 52,000,000 |
GOODWILL AND OTHER INTANGIBLE_5
GOODWILL AND OTHER INTANGIBLE ASSETS, NET - Other Intangible Assets, Net (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Intangible Asset Excluding Goodwill [Line Items] | ||
Gross other intangible assets | $ 3,683 | $ 3,377 |
Accumulated amortization | (1,721) | (1,706) |
Other intangible assets | 169 | 169 |
Other intangible assets, net | 1,962 | 1,671 |
Developed technology, including patents | ||
Intangible Asset Excluding Goodwill [Line Items] | ||
Gross other intangible assets | 3,023 | 2,713 |
Accumulated amortization | (1,394) | (1,374) |
Other intangible assets, net | 1,629 | 1,339 |
Other amortized intangible assets | ||
Intangible Asset Excluding Goodwill [Line Items] | ||
Gross other intangible assets | 491 | 495 |
Accumulated amortization | (327) | (332) |
Other intangible assets, net | $ 164 | $ 163 |
FINANCING ARRANGEMENTS (Details
FINANCING ARRANGEMENTS (Details) - Mar. 31, 2021 € in Millions, $ in Billions | USD ($) | EUR (€) |
Domestic Line of Credit | ||
Debt Instrument [Line Items] | ||
Line of credit, current borrowing capacity | $ | $ 2 | |
Foreign Line of Credit | ||
Debt Instrument [Line Items] | ||
Line of credit, current borrowing capacity | € | € 200 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) $ in Millions | Apr. 20, 2021USD ($) | Mar. 31, 2021USD ($)site | Dec. 31, 2020USD ($) | Mar. 31, 2020lawsuit |
Loss Contingencies [Line Items] | ||||
Litigation reserve | $ 53 | $ 40 | ||
Litigation related receivables | $ 7 | |||
Number of lawsuits | lawsuit | 2 | |||
Subsequent Event | ||||
Loss Contingencies [Line Items] | ||||
Agreement to settle the case | $ 16 | |||
Superfund Sites | Environmental Clean-up | ||||
Loss Contingencies [Line Items] | ||||
Number of sites | site | 6 | |||
Environmental reserves | $ 19 | $ 20 |
STOCKHOLDERS' EQUITY - Addition
STOCKHOLDERS' EQUITY - Additional Information (Details) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2021USD ($)$ / sharesshares | Mar. 31, 2020USD ($)employee$ / shares | |
Stockholders Equity Note [Line Items] | ||
Stock compensation expense | $ 22 | $ 29 |
Total intrinsic value of stock options exercised | $ 21 | $ 52 |
Number of employees affected | employee | 123 | |
Cash dividends declared per common share (in dollars per share) | $ / shares | $ 0.245 | $ 0.22 |
SG&A | ||
Stockholders Equity Note [Line Items] | ||
Stock compensation expense allocation percentage | 75.00% | |
Employee Stock Option | ||
Stockholders Equity Note [Line Items] | ||
Grants in period (in shares) | shares | 4 | |
Stock granted, value, share-based compensation, gross | $ 62 | |
Target service period | 3 years | |
Unrecognized compensation cost related to all unvested stock options | $ 109 | |
Weighted-average period for all unvested stock options | 2 years 1 month 6 days | |
Incremental compensation cost | $ 8 | |
Restricted Stock Units (RSUs) | ||
Stockholders Equity Note [Line Items] | ||
Grants in period (in shares) | shares | 0.5 | |
Stock granted, value, share-based compensation, gross | $ 40 | |
Vesting percentage | 33.33% | |
Unrecognized compensation cost related to all unvested stock options | $ 75 | |
Weighted-average period for all unvested stock options | 2 years 1 month 6 days | |
Performance Shares | ||
Stockholders Equity Note [Line Items] | ||
Grants in period (in shares) | shares | 0.3 | |
Stock granted, value, share-based compensation, gross | $ 27 | |
Vesting percentage, adjusted operating margin | 12.50% | |
Target service period | 3 years | |
Unrecognized compensation cost related to all unvested stock options | $ 46 | |
Weighted-average period for all unvested stock options | 1 year 9 months 18 days |
STOCKHOLDERS' EQUITY - Stock Op
STOCKHOLDERS' EQUITY - Stock Options Fair Value Assumptions (Details) - $ / shares | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | ||
Expected volatility | 25.00% | 26.00% |
Expected life (in years) | 5 years 6 months | 5 years 6 months |
Risk-free interest rate | 0.80% | 0.60% |
Dividend yield | 1.30% | 1.20% |
Fair value per stock option (in USD per share) | $ 16 | $ 16 |
STOCKHOLDERS' EQUITY - Stock Re
STOCKHOLDERS' EQUITY - Stock Repurchase Programs Narrative (Details) - USD ($) shares in Millions | 3 Months Ended | ||||||
Mar. 31, 2021 | Oct. 31, 2020 | Mar. 31, 2020 | Nov. 30, 2018 | Feb. 28, 2018 | Nov. 30, 2016 | Jul. 31, 2012 | |
Share-based Payment Arrangement [Abstract] | |||||||
Stock repurchase program, authorized amount | $ 2,000,000,000 | ||||||
Stock repurchase program, additional authorized amount | $ 1,500,000,000 | $ 2,000,000,000 | $ 1,500,000,000 | $ 1,500,000,000 | |||
Purchases of treasury stock (in shares) | 3.6 | ||||||
Stock repurchase program, liability | $ 47,000,000 | ||||||
Remaining value available under stock repurchase programs | $ 1,600,000,000 |
ACCUMULATED OTHER COMPREHENSI_3
ACCUMULATED OTHER COMPREHENSIVE INCOME - Summary of Changes in AOCI by Component (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Beginning of period | $ 8,726 | $ 7,912 |
Other comprehensive income (loss) before reclassifications | (192) | (480) |
Amounts reclassified from AOCI | 26 | 13 |
Total other comprehensive income (loss), net of tax | (166) | (467) |
End of period | 8,490 | 7,730 |
CTA | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Beginning of period | (2,587) | (2,954) |
Other comprehensive income (loss) before reclassifications | (208) | (359) |
Amounts reclassified from AOCI | 0 | 0 |
Total other comprehensive income (loss), net of tax | (208) | (359) |
End of period | (2,795) | (3,313) |
Pension and OPEB plans | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Beginning of period | (574) | (715) |
Other comprehensive income (loss) before reclassifications | 13 | 10 |
Amounts reclassified from AOCI | 17 | 12 |
Total other comprehensive income (loss), net of tax | 30 | 22 |
End of period | (544) | (693) |
Hedging activities | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Beginning of period | (153) | (41) |
Other comprehensive income (loss) before reclassifications | 3 | (131) |
Amounts reclassified from AOCI | 9 | 1 |
Total other comprehensive income (loss), net of tax | 12 | (130) |
End of period | (141) | (171) |
Accumulated Other Comprehensive Income (Loss) | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Beginning of period | (3,314) | (3,710) |
End of period | $ (3,480) | $ (4,177) |
ACCUMULATED OTHER COMPREHENSI_4
ACCUMULATED OTHER COMPREHENSIVE INCOME - Summary of Amounts Reclassification from AOCI to Net Income (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Other expense, net | $ (5) | $ (10) |
Income tax expense | (51) | (45) |
Cost of sales | (1,801) | (1,639) |
Income before income taxes | 351 | 378 |
Net income (loss) attributable to Baxter | 298 | 332 |
Amounts reclassified from AOCI | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Net income (loss) attributable to Baxter | (26) | (13) |
Amortization of pension and OPEB items | Amounts reclassified from AOCI | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Other expense, net | (21) | (15) |
Income tax expense | (4) | (3) |
Net income (loss) attributable to Baxter | (17) | (12) |
Gains (losses) on hedging activities | Amounts reclassified from AOCI | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Income tax expense | 2 | 0 |
Income before income taxes | (11) | (1) |
Net income (loss) attributable to Baxter | (9) | (1) |
Gains (losses) on hedging activities | Foreign exchange contracts | Amounts reclassified from AOCI | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Cost of sales | (10) | (1) |
Gains (losses) on hedging activities | Interest rate contracts | Amounts reclassified from AOCI | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Interest expense, net | $ (1) | $ 0 |
REVENUES - Additional Informati
REVENUES - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |||||
Mar. 31, 2021 | Dec. 31, 2020 | Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2017 | |
Revenue From Contract With Customer [Line Items] | ||||||
Net trade accounts receivable | $ 1,600 | $ 1,700 | ||||
Sales-type lease, net of investment in lease | 131 | |||||
Sales-type leases, receivables | $ 6 | $ 38 | $ 36 | $ 32 | $ 19 | |
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 - Remaining Performanc
REVENUES - Remaining Performance Obligations (Details) $ in Billions | Mar. 31, 2021USD ($) |
Revenue from Contract with Customer [Abstract] | |
Transaction price allocated to remaining performance obligations | $ 7.9 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2021-04-01 | |
Revenue From Contract With Customer [Line Items] | |
Remaining revenue performance obligation, percentage of revenue expected to be recognized | 25.00% |
Remaining performance obligations period | 9 months |
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 | 30.00% |
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 | 25.00% |
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 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2025-01-01 | |
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 - Contract Assets and
REVENUES - Contract Assets and Contract Liabilities (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Revenue From Contract With Customer [Line Items] | ||
Contract assets | $ 136 | $ 134 |
Contract liabilities | 80 | 66 |
Prepaid expenses and other current assets | ||
Revenue From Contract With Customer [Line Items] | ||
Contract assets | 74 | 70 |
Other non-current assets | ||
Revenue From Contract With Customer [Line Items] | ||
Contract assets | 62 | 64 |
Accrued expenses and other current liabilities | ||
Revenue From Contract With Customer [Line Items] | ||
Contract liabilities | 38 | 32 |
Other non-current liabilities | ||
Revenue From Contract With Customer [Line Items] | ||
Contract liabilities | 42 | 34 |
Manufacturing Arrangements | ||
Revenue From Contract With Customer [Line Items] | ||
Contract assets | 49 | 47 |
Software Arrangements | ||
Revenue From Contract With Customer [Line Items] | ||
Contract assets | 41 | 40 |
Bundled equipment and consumable medical products contracts | ||
Revenue From Contract With Customer [Line Items] | ||
Contract assets | $ 46 | $ 47 |
REVENUES - Net Sales from Contr
REVENUES - Net Sales from Contracts with Customers by Global Business Unit (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Revenue From Contract With Customer [Line Items] | ||
Net sales | $ 2,946 | $ 2,802 |
U.S. | ||
Revenue From Contract With Customer [Line Items] | ||
Net sales | 1,180 | 1,217 |
International | ||
Revenue From Contract With Customer [Line Items] | ||
Net sales | 1,766 | 1,585 |
Renal Care | ||
Revenue From Contract With Customer [Line Items] | ||
Net sales | 922 | 870 |
Renal Care | U.S. | ||
Revenue From Contract With Customer [Line Items] | ||
Net sales | 216 | 204 |
Renal Care | International | ||
Revenue From Contract With Customer [Line Items] | ||
Net sales | 706 | 666 |
Medication Delivery | ||
Revenue From Contract With Customer [Line Items] | ||
Net sales | 652 | 678 |
Medication Delivery | U.S. | ||
Revenue From Contract With Customer [Line Items] | ||
Net sales | 411 | 449 |
Medication Delivery | International | ||
Revenue From Contract With Customer [Line Items] | ||
Net sales | 241 | 229 |
Pharmaceuticals | ||
Revenue From Contract With Customer [Line Items] | ||
Net sales | 552 | 516 |
Pharmaceuticals | U.S. | ||
Revenue From Contract With Customer [Line Items] | ||
Net sales | 200 | 220 |
Pharmaceuticals | International | ||
Revenue From Contract With Customer [Line Items] | ||
Net sales | 352 | 296 |
Clinical Nutrition | ||
Revenue From Contract With Customer [Line Items] | ||
Net sales | 234 | 217 |
Clinical Nutrition | U.S. | ||
Revenue From Contract With Customer [Line Items] | ||
Net sales | 83 | 79 |
Clinical Nutrition | International | ||
Revenue From Contract With Customer [Line Items] | ||
Net sales | 151 | 138 |
Advanced Surgery | ||
Revenue From Contract With Customer [Line Items] | ||
Net sales | 217 | 224 |
Advanced Surgery | U.S. | ||
Revenue From Contract With Customer [Line Items] | ||
Net sales | 126 | 137 |
Advanced Surgery | International | ||
Revenue From Contract With Customer [Line Items] | ||
Net sales | 91 | 87 |
Acute Therapies | ||
Revenue From Contract With Customer [Line Items] | ||
Net sales | 207 | 156 |
Acute Therapies | U.S. | ||
Revenue From Contract With Customer [Line Items] | ||
Net sales | 81 | 60 |
Acute Therapies | International | ||
Revenue From Contract With Customer [Line Items] | ||
Net sales | 126 | 96 |
BioPharma Solutions | ||
Revenue From Contract With Customer [Line Items] | ||
Net sales | 135 | 114 |
BioPharma Solutions | U.S. | ||
Revenue From Contract With Customer [Line Items] | ||
Net sales | 44 | 48 |
BioPharma Solutions | International | ||
Revenue From Contract With Customer [Line Items] | ||
Net sales | 91 | 66 |
Other | ||
Revenue From Contract With Customer [Line Items] | ||
Net sales | 27 | 27 |
Other | U.S. | ||
Revenue From Contract With Customer [Line Items] | ||
Net sales | 19 | 20 |
Other | International | ||
Revenue From Contract With Customer [Line Items] | ||
Net sales | $ 8 | $ 7 |
REVENUES - Lease Revenue (Detai
REVENUES - Lease Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | ||
Sales-type lease revenue | $ 6 | $ 6 |
Operating lease revenue | 34 | 14 |
Variable lease revenue | 17 | 18 |
Total lease revenue | $ 57 | $ 38 |
BUSINESS OPTIMIZATION CHARGES -
BUSINESS OPTIMIZATION CHARGES - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2021 | |
Restructuring and Related Activities [Abstract] | ||
Cumulative pre-tax costs incurred | $ 1,100 | |
Expected additional pre-tax costs | $ 12 | |
Sale of properties | $ 17 |
BUSINESS OPTIMIZATION CHARGES_2
BUSINESS OPTIMIZATION CHARGES - Summary of Business Optimization Charges (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | $ 25 | $ 25 |
Business Optimization Programs | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 25 | 25 |
Costs to implement business optimization programs | 2 | 7 |
Total business optimization charges | $ 27 | $ 32 |
BUSINESS OPTIMIZATION CHARGES_3
BUSINESS OPTIMIZATION CHARGES - Components of Restructuring Charges (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | $ 25 | $ 25 |
COGS | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 20 | 8 |
SG&A | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 5 | 16 |
R&D | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 0 | 1 |
Employee termination costs | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 21 | 19 |
Employee termination costs | COGS | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 16 | 2 |
Employee termination costs | SG&A | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 5 | 16 |
Employee termination costs | R&D | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 0 | 1 |
Asset impairments | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 4 | 6 |
Asset impairments | COGS | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 4 | 6 |
Asset impairments | SG&A | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 0 | 0 |
Asset impairments | R&D | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring 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 | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Restructuring Reserve [Roll Forward] | ||
Charges | $ 25 | $ 25 |
Severance and Other Employee Related Costs | ||
Restructuring Reserve [Roll Forward] | ||
Reserve, beginning balance | 113 | |
Charges | 21 | |
Payments | (24) | |
Currency translation | (3) | |
Reserve, ending balance | $ 107 |
PENSION AND OTHER POSTRETIREM_3
PENSION AND OTHER POSTRETIREMENT BENEFIT PROGRAMS - Net Periodic Benefit Cost Relating to Pension and Other Postemployment Employee Benefit Plans (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Pension benefits | ||
Net periodic benefit cost | ||
Service cost | $ 22 | $ 21 |
Interest cost | 18 | 24 |
Expected return on plan assets | (36) | (41) |
Amortization of net losses and prior service costs | 23 | 19 |
Net periodic cost | 27 | 23 |
OPEB | ||
Net periodic benefit cost | ||
Interest cost | 1 | 1 |
Amortization of net losses and prior service costs | (2) | (4) |
Net periodic cost | $ (1) | $ (3) |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Jun. 30, 2021 | Mar. 31, 2021 | Mar. 31, 2020 | |
Operating Loss Carryforwards [Line Items] | |||
Effective income tax rate | 14.50% | 11.90% | |
U.S. Federal statutory rate | 21.00% | ||
Forecast | |||
Operating Loss Carryforwards [Line Items] | |||
Discrete income tax expense | $ 22 |
EARNINGS PER SHARE - Reconcilia
EARNINGS PER SHARE - Reconciliation of Basic Shares to Diluted Shares (Details) - shares shares in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Reconciliation of Basic Shares to Diluted Shares | ||
Basic (in shares) | 505 | 507 |
Effect of dilutive securities (in shares) | 6 | 9 |
Diluted (in shares) | 511 | 516 |
EARNINGS PER SHARE - Additional
EARNINGS PER SHARE - Additional Information (Details) - shares shares in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Earnings Per Share [Abstract] | ||
Anti-dilutive securities excluded from computation of EPS (in shares) | 7 | 1 |
DERIVATIVE INSTRUMENTS AND HE_3
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Additional Information (Details) | 3 Months Ended | ||||
Mar. 31, 2021USD ($) | Mar. 31, 2020USD ($) | Dec. 31, 2020USD ($) | May 31, 2019EUR (€) | May 31, 2017EUR (€) | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Derivative, notional amount | $ 0 | $ 0 | |||
Derivative, fair value, terminated | 0 | 0 | |||
Derivative, net investment terminated | 0 | $ 0 | |||
Deferred, net after-tax gains on derivative instruments | 12,000,000 | ||||
Undesignated derivative instruments | |||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Derivative, notional amount | 780,000,000 | $ 1,000,000,000 | |||
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 | 131,000,000 | ||||
Foreign exchange contracts | |||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Derivative, notional amount | $ 355,000,000 | 345,000,000 | |||
Maximum length of time hedge in cash flow hedge | 12 months | ||||
Interest rate swap | |||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Derivative, fair value, net | $ 0 | 0 | |||
Interest rate contracts | |||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Derivative, fair value, net | $ 0 | $ 0 |
DERIVATIVE INSTRUMENTS AND HE_4
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Summary of Gains and Losses on Hedging Instruments (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Other comprehensive income (loss), net investment hedge, gain (loss), before reclassification and tax | $ 114 | $ 49 |
Other comprehensive income (loss), cash flow hedge and net investment hedge, gain (loss), before reclassification, tax | 118 | (121) |
Other comprehensive income (loss), reclassification adjustment from AOCI, cash flow hedges and net investment hedges, net of tax | (11) | (1) |
Other expense, net | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Other comprehensive income (loss), net investment hedge, gain (loss), before reclassification and tax | 0 | 0 |
Interest rate contracts | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Other comprehensive income (loss), cash flow hedge, gain (loss), before reclassification, tax | 0 | (184) |
Interest rate contracts | Interest expense, net | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Other comprehensive income (loss), cash flow hedge, gain (loss), reclassification, before tax | (1) | 0 |
Foreign exchange contracts | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Other comprehensive income (loss), cash flow hedge, gain (loss), before reclassification, tax | 4 | 14 |
Foreign exchange contracts | Cost of sales | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Other comprehensive income (loss), cash flow hedge, gain (loss), reclassification, before tax | (10) | (1) |
Foreign exchange contracts | Other expense, net | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) recognized in income, undesignated derivative instruments | $ (22) | $ 2 |
DERIVATIVE INSTRUMENTS AND HE_5
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Classification and Fair Value Amounts of Derivative Instruments (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Derivatives, Fair Value [Line Items] | ||
Derivative asset, fair value | $ 3 | $ 11 |
Derivative liability, fair value | 15 | 19 |
Derivative instruments designated as hedges | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset, fair value | 2 | 0 |
Derivative liability, fair value | 8 | 17 |
Derivative instruments designated as hedges | Foreign exchange contracts | Prepaid expenses and other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset, fair value | 2 | 0 |
Derivative instruments designated as hedges | Foreign exchange contracts | Accrued expenses and other current liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability, fair value | 8 | 17 |
Undesignated derivative instruments | Foreign exchange contracts | Prepaid expenses and other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset, fair value | 1 | 11 |
Undesignated derivative instruments | Foreign exchange contracts | Accrued expenses and other current liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability, fair value | $ 7 | $ 2 |
DERIVATIVE INSTRUMENTS AND HE_6
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Derivative Positions Presented On Net Basis (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Asset | ||
Gross amounts recognized in the consolidated balance sheet | $ 3 | $ 11 |
Gross amount subject to offset in master netting arrangements not offset in the consolidated balance sheet | (3) | (6) |
Total, asset | 0 | 5 |
Liability | ||
Gross amounts recognized in the consolidated balance sheet | 15 | 19 |
Gross amount subject to offset in master netting arrangements not offset in the consolidated balance sheet | (3) | (6) |
Total, liability | $ 12 | $ 13 |
DERIVATIVE INSTRUMENTS AND HE_7
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Amounts Recorded on Condensed Consolidated Balance Sheet Related to Fair Value Hedges (Details) - Long-term debt - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Derivatives, Fair Value [Line Items] | ||
Carrying amount of hedged item | $ 102 | $ 102 |
Cumulative amount of fair value hedging adjustment included in the carrying amount of the hedged item | $ 5 | $ 5 |
FAIR VALUE MEASUREMENTS - Summa
FAIR VALUE MEASUREMENTS - Summary of Financial Instruments Measured at Fair Value on Recurring Basis (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Assets | ||
Foreign exchange contracts | $ 3 | $ 11 |
Debt securities | 13 | 13 |
Marketable equity securities | 2 | 17 |
Total assets | 18 | 41 |
Liabilities | ||
Foreign exchange contracts | 15 | 19 |
Contingent payments related to acquisitions | 38 | 30 |
Total liabilities | 53 | 49 |
Quoted prices in active markets for identical assets (Level 1) | ||
Assets | ||
Foreign exchange contracts | 0 | 0 |
Debt securities | 0 | 0 |
Marketable equity securities | 2 | 17 |
Total assets | 2 | 17 |
Liabilities | ||
Foreign exchange contracts | 0 | 0 |
Contingent payments related to acquisitions | 0 | 0 |
Total liabilities | 0 | 0 |
Significant other observable inputs (Level 2) | ||
Assets | ||
Foreign exchange contracts | 3 | 11 |
Debt securities | 13 | 13 |
Marketable equity securities | 0 | 0 |
Total assets | 16 | 24 |
Liabilities | ||
Foreign exchange contracts | 15 | 19 |
Contingent payments related to acquisitions | 0 | 0 |
Total liabilities | 15 | 19 |
Significant unobservable inputs (Level 3) | ||
Assets | ||
Foreign exchange contracts | 0 | 0 |
Debt securities | 0 | 0 |
Marketable equity securities | 0 | 0 |
Total assets | 0 | 0 |
Liabilities | ||
Foreign exchange contracts | 0 | 0 |
Contingent payments related to acquisitions | 38 | 30 |
Total liabilities | $ 38 | $ 30 |
FAIR VALUE MEASUREMENTS - Addit
FAIR VALUE MEASUREMENTS - Additional Information (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Fair Value Disclosures [Line Items] | ||
Cash and cash equivalents | $ 3,182 | $ 3,730 |
Other Assets | ||
Fair Value Disclosures [Line Items] | ||
Other equity investments without readily determinable fair values | 98 | 105 |
Significant other observable inputs (Level 2) | ||
Fair Value Disclosures [Line Items] | ||
Money market funds, at carrying value | $ 1,700 | $ 1,800 |
FAIR VALUE MEASUREMENTS - Recon
FAIR VALUE MEASUREMENTS - Reconciliation of Fair Value Measurements that Use Significant Unobservable Inputs (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Fair value at beginning of period | $ 30 | $ 39 |
Additions | 24 | 4 |
Change in fair value recognized in earnings | 0 | (3) |
Payments | (16) | (1) |
Fair value at end of period | $ 38 | $ 39 |
FAIR VALUE MEASUREMENTS - Book
FAIR VALUE MEASUREMENTS - Book Values and Fair Values of Financial Instruments (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Book values | ||
Fair Value And Carrying Value By Balance Sheet Grouping [Line Items] | ||
Current maturities of long-term debt and finance lease obligations | $ 407 | $ 406 |
Long-term debt and finance lease obligations | 5,681 | 5,786 |
Fair values | ||
Fair Value And Carrying Value By Balance Sheet Grouping [Line Items] | ||
Current maturities of long-term debt and finance lease obligations | 409 | 409 |
Long-term debt and finance lease obligations | $ 6,085 | $ 6,471 |
SEGMENT INFORMATION - Summary o
SEGMENT INFORMATION - Summary of Financial Information for Our Segments (Details) $ in Millions | 3 Months Ended | |
Mar. 31, 2021USD ($)segment | Mar. 31, 2020USD ($) | |
Segment Reporting Information [Line Items] | ||
Number of operating segments | segment | 3 | |
Total net sales | $ 2,946 | $ 2,802 |
Total segment operating income | 390 | 409 |
Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Total net sales | 2,946 | 2,802 |
Total segment operating income | 872 | 833 |
Operating Segments | Americas | ||
Segment Reporting Information [Line Items] | ||
Total net sales | 1,560 | 1,565 |
Total segment operating income | 599 | 588 |
Operating Segments | EMEA | ||
Segment Reporting Information [Line Items] | ||
Total net sales | 738 | 688 |
Total segment operating income | 135 | 117 |
Operating Segments | APAC | ||
Segment Reporting Information [Line Items] | ||
Total net sales | 648 | 549 |
Total segment operating income | $ 138 | $ 128 |
SEGMENT INFORMATION - Operating
SEGMENT INFORMATION - Operating Income to Income Before Income Taxes Reconciliation (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Total operating income | $ 390 | $ 409 |
Net interest expense | (34) | (21) |
Other expense, net | 5 | 10 |
Income before income taxes | 351 | 378 |
Operating Segments | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Total operating income | 872 | 833 |
Corporate and Other | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Total operating income | $ (482) | $ (424) |
Uncategorized Items - bax-20210
Label | Element | Value |
Accounting Standards Update [Extensible List] | us-gaap_AccountingStandardsUpdateExtensibleList | us-gaap:AccountingStandardsUpdate201613Member |