Baxter International (BAX) 10-K risk factor changes: FY2024 vs FY2023

Risks Relating to Our [added: Recent and Ongoing] Strategic Actions

- We may continue to experience difficulties with our [added: ongoing] integration of Hillrom or fail to realize the anticipated benefits of the Hillrom acquisition.

- Our operating results and financial condition [removed: have,] [added: have fluctuated] and may in the [removed: future,] [added: future continue to] fluctuate.

- [removed: We incurred] [added: Our significant indebtedness requires us to use] a substantial amount of [added: our cash flow for] debt [removed: in connection with the Hillrom acquisition, which] [added: service and] could [added: constrain our flexibility in responding to unanticipated or adverse business conditions and] adversely affect our business, results of operations, financial condition and cash flows.

- Changes in foreign currency exchange rates and interest rates [removed: have,] [added: have had,] and may in the future have, an adverse effect on our results of operations, financial condition, cash flows and liquidity.

[removed: Other Risks] [added: Risks] Relating to Our Business

- Issues with [added: quality management or] product quality could, among other things, have an adverse effect on our business or cause a loss of customer confidence in us or our products.

[removed: - If] [added: If] we fail to attract, develop, retain and engage key employees, [added: including a permanent CEO and other members of] our [added: senior management, our] business may [removed: suffer.][added: suffer.]

Risks Relating to Our [removed: Business] Operations

- We may not be successful in achieving expected operating efficiencies and sustaining or improving operating expense [removed: reductions,] [added: reductions] and [removed: might] [added: may] experience business disruptions and adverse tax consequences associated with restructuring, realignment and cost reduction activities.

- Breaches and breakdowns affecting our information technology systems or protected [removed: information] [added: information, including from obsolescence, cyber security breaches and data leakage,] could have a material adverse effect on us.

[removed: - Increasing] [added: Increasing] regulatory focus on [removed: privacy] [added: privacy, artificial intelligence] and cybersecurity issues and expanding laws could impact our business and expose us to increased [removed: liability.][added: liability.]

Our businesses have begun to face, and will continue to face, material challenges in connection with the [removed: proposed spinoff] [added: sale of our Kidney Care business] and the other strategic actions we [removed: are undertaking] [added: have undertaken] (including the [removed: recent] implementation of a simplified operating model and the ongoing simplification of our manufacturing footprint).

In [removed: particular,] [added: addition,] in the last few years, we have undertaken other strategic and business transformation actions (including the [removed: recent] divestiture of our BPS business, the acquisition of Hillrom and cost reduction initiatives) that have entailed changes across our organizational structure, senior leadership, culture, functional alignment, outsourcing and other areas.

[removed: This poses] [added: These actions pose] risks in the form of personnel capacity constraints and institutional knowledge loss that has led to, and could in the future lead to, missed performance [removed: or] [added: of] financial targets [added: (including those related to cost savings initiatives)] and harm to our [removed: reputation, and these risks are heightened with the additional interdependent actions that will be needed to complete the proposed spinoff and other strategic actions we are currently implementing and pursing or which we may pursue in the future.][added: reputation.]

We have incurred, and will continue to incur, significant expenses in connection with the [removed: proposed spinoff and other strategic actions we are undertaking.][added: sale of our Kidney Care business.]

[added: In addition, the anticipated] benefits of [removed: these actions] [added: the sale] are based on a number of assumptions, some of which may prove incorrect, and we cannot predict with certainty when the expected benefits will occur, or the extent to which they will be achieved.

As a result, even [removed: if] [added: with] the [removed: proposed spinoff or other strategic actions are completed, they] [added: completed sale of the Kidney Care business, we] may not achieve some or all of the anticipated strategic, financial, operational or other benefits in the expected timeframe, or at all, which could adversely impact our business, results of operations, financial condition and cash flows.

[removed: In addition,] [added: Furthermore, with] the [added: sale having decreased the] diversification of [added: our] revenues, costs and cash [removed: flows will diminish, such that each company’s results of] [added: flows, our] operations, cash flows, working capital, effective tax rate and financing requirements may be subject to increased volatility, and [removed: each company’s] [added: our] ability to fund capital expenditures and investments, pay dividends and meet debt obligations and other liabilities may be diminished.

Our common stock [removed: or the common stock of the new company] may not match some holders’ investment strategies or meet minimum criteria for inclusion in stock market indices or portfolios, [removed: which could cause] [added: causing] certain investors to sell their shares, which could in turn lead to declines in the trading price of such stock.

We may continue to experience difficulties with our [added: ongoing] integration of Hillrom or fail to realize the anticipated benefits of the Hillrom acquisition.

The success of this acquisition depends on, among other things, our ability to [removed: integrate] [added: complete the integration of] Hillrom in a manner that facilitates growth opportunities, realizes anticipated cost and revenue synergies and achieves certain previously communicated net leverage targets without adversely affecting current revenues and investments in future growth.

If we are not able to successfully achieve these [removed: objectives,] [added: objectives (including completing] the [added: ongoing integration), the] anticipated benefits of the Hillrom acquisition may not be realized [removed: fully] [added: fully,] or at [removed: all] [added: all,] or may take longer to realize than expected.

Challenges associated with our integration efforts are also heightened due to the other strategic actions we [removed: are pursuing.][added: have recently completed (including the sale of our Kidney Care business).]

[removed: This has resulted in, and may continue to result in, additional expenses and other difficulties as we work to complete our ongoing strategic initiatives, including challenges consolidating certain operations and functions] (including [removed: regulatory and other corporate functions), integrating technologies (including] differing information technology systems and processes), organizations, procedures, policies and [removed: operations,] [added: operations and] addressing differences in the business cultures of the two companies, [removed: and retaining key personnel,] any of which could adversely affect our ability to achieve the anticipated benefits of the acquisition.

The integration process and other disruptions resulting from the Hillrom acquisition and our [removed: ongoing] [added: recently completed] strategic initiatives also disrupt our ongoing businesses and could cause inconsistencies in standards, controls, procedures and policies that adversely affect our relationships with market participants, employees, regulators and others with whom we have business or other dealings.

While we remain committed to deleveraging, we expect to engage in significant business development activities over the longer term [removed: (once we have satisfied] [added: in a manner that is consistent with] our net leverage [removed: targets),] [added: targets,] including evaluating acquisitions, joint development opportunities, technology licensing arrangements and other opportunities, such as potential divestitures and targeted market exits as we look to optimize our product portfolio and improve our operating margins.

[added: Our success developing products, expanding into new markets and optimizing our market presence from such activities will depend on a number of factors, including our ability to find suitable opportunities or partners for acquisition, investment, alliance or] divestiture; competition from other companies in the industries in which we operate that are seeking similar opportunities; whether we are able to complete an acquisition, investment, alliance or divestiture on terms that are satisfactory to us or at all; the strength of the underlying technology and products of any of the other parties involved in a transaction, as well as their ability to execute their business strategies; any intellectual property and litigation related to any other party’s products or technology; and our ability to successfully integrate the acquired company, business, product, technology or research into our existing operations (or to divest such company, business, product, technology or research from our existing operations), including the ability to adequately fund acquired in-process R&D projects and to maintain adequate controls over the combined operations.

General global economic downturns and macroeconomic trends, including heightened inflation, capital markets volatility, interest rate and currency rate fluctuations, [added: changes in monetary policy] and economic slowdown or recession, have resulted in, and may continue to result in, unfavorable conditions that negatively affect demand for our products and exacerbate other risks described in this “Risk Factors” section that affect our business, results of operations, financial condition and cash flows.

[removed: In addition,] [added: For example,] the Federal Reserve in the U.S. and other central banks in various countries have raised, and may again raise, interest rates in response to concerns about inflation, which, coupled with reduced government spending and volatility in financial markets, has had, and may continue to have, the effect of further increasing economic uncertainty and heightening these risks.

[removed: Furthermore, currency exchange rates have been especially volatile in the recent past, and these] [added: As a result,] currency fluctuations have affected, and may continue to affect, the reported value of our assets and liabilities, as well as our cash [removed: flows.][added: flows and results of operations We cannot predict with any certainty changes in foreign currency exchange rates or our ability to mitigate these risks.]

We have experienced significant challenges to our global supply chain in recent periods, including production delays and interruptions, increased costs and shortages of raw materials and component parts (including resins and electromechanical devices), heightened inventory levels to reduce the risk of patient supply disruption and higher transportation and labor costs, resulting from [removed: COVID-19 and other exogenous factors including] significant weather [removed: events,] [added: events (including Hurricane Helene),] elevated inflation levels, disruptions to certain ports of call around the world, the war in Ukraine, the conflict in the Middle East [removed: (including recent attacks on merchant ships in the Red Sea), tensions between China] and [removed: Taiwan and] other geopolitical events.

Due to the nature of our products, which include dense consumable medical products such as IV fluids, and the geographic locations of our manufacturing, storage and distribution facilities, which [added: were further consolidated in anticipation of the recent Kidney Care sale and which] often require us to transport our products long [removed: distances and which are being further consolidated in anticipation of the proposed spinoff,] [added: distances,] we may be more susceptible to increases in freight costs and other supply [removed: chain challenges than certain of our industry peers.]

We continue to do business with foreign governments in certain countries that have [added: experienced deterioration in credit and economic conditions.]

Our operating results and financial condition [removed: have,] [added: have fluctuated] and may in the [removed: future,] [added: future continue to] fluctuate.

Events, such as changes to our expectations, strategy or forecasts (including as a result of evolving global macroeconomic [removed: conditions and] [added: conditions,] updated expectations regarding the timing of new regulatory [removed: approvals)] [added: approvals] or [added: the impact or timing of our cost savings initiatives) or] even a relatively small revenue shortfall or increase in supply chain or other costs which we are unable to offset have, and may in the future, cause financial results for a period to be below our expectations or projections.

We continue to evaluate and refine both our short-term and long-term financial objectives, including our stated commitment to achieve certain net leverage [removed: targets.][added: targets and to fully offset the stranded costs related to the recent sale of our Kidney Care business.]

Our ability to achieve these [removed: targets] [added: anticipated benefits] depends, in part, on our ability to realize the anticipated benefits of the Hillrom acquisition [added: and Kidney Care sale] (and related cost and revenue synergy targets) while working to execute on our stated portfolio management [removed: and other ongoing strategic initiatives including the proposed spinoff.][added: initiatives.]

We may fail to achieve our targeted financial results if we are unsuccessful in implementing our [removed: strategies,] [added: strategies or if] our estimates or assumptions change or for any other reason.

[removed: We incurred] [added: Our significant indebtedness requires us to use] a substantial amount of [added: our cash flow for] debt [removed: in connection with the Hillrom acquisition, which] [added: service and] could [added: constrain our flexibility in responding to unanticipated or adverse business conditions and] adversely affect our business, results of operations, financial condition and cash flows.

- We are exposed to risks as a result of our strategic actions, including the recent sale of our Kidney Care business.

- We cannot guarantee that in the future we will not further reduce the amount of dividends we pay.

- Incorporating artificial intelligence, machine learning and other emerging technologies into our products, services and operations exposes us to legal and regulatory risks and could result in reputational harm or have other adverse consequences to our business, financial condition or results of operations.

- Our commitments, goals and disclosures related to corporate responsibility matters, and the perception of our activities in these areas, may adversely impact the company, including through reputational harm.

- Our Amended and Restated By-Laws could limit our stockholders’ ability to choose their preferred judicial forum for disputes with us or our directors, officers, or employees.

We are exposed to risks as a result of our strategic actions, including the recent sale of our Kidney Care business.

The success of the sale of our Kidney Care business depends on, among other things, our ability to effectively transition the Kidney Care business to Carlyle in a manner that: minimizes disruption to our customers, employees, other personnel and operations; realizes the expected tax benefits; avoids potential liabilities or claims; and enables us to achieve related cost savings initiatives.

The Kidney Care sale may result in challenges such as: the diversion of management’s attention from our ongoing business concerns and any newly identified strategic initiatives; attracting, retaining and motivating key management and other employees; retaining existing, or attracting new, business and operational relationships, including with customers, suppliers, employees and other counterparties; maintaining our relationships with regulators; the potential for disputes or litigation with Carlyle or Vantive, as applicable, arising from the transaction, the EPA or the various agreements (including a transition services agreement and a manufacturing and supply agreement) that we entered into with Vantive in connection with the Kidney Care closing (as further described below) and liabilities and obligations otherwise related to the transaction, the EPA or the other agreements described in this paragraph; the potential for exposure related to certain pre-closing Kidney Care liabilities we retained; the potential for adverse tax consequences or changes in tax laws or

regulations that could affect our remaining businesses; the potential for regulatory actions or investigations related to the transaction or the businesses involved; and potential negative reactions from the financial markets, ratings agencies, customers, employees, other personnel or other stakeholders.

In connection with the closing of the Kidney Care sale, we entered into certain agreements as described above (including a transition services agreement and a manufacturing and supply agreement).

These agreements provide for the performance of services, and the provision of certain dialysis-related products, other products and product components, by each company for the benefit of the other for a period of time.

If Vantive is unable to satisfy its obligations under these agreements, including its supply and indemnification obligations, we could incur losses.

Additionally, in the event that Vantive asserts claims for breaches of any of these agreements, our indemnity obligations and other liabilities to Vantive under these agreements could be significant.

These arrangements could also lead to disputes over rights to certain shared property and rights and over the allocation of costs and revenues for products and operations.

Our inability to effectively manage these activities and related events could adversely affect our business, financial condition or results of operations.

For example, we will continue to incur the costs of providing transition services, products and product components to Vantive under the agreements described above and other stranded costs that we will no longer be able to share with the Kidney Care business and which we may not be able to fully offset.

Such expenses have been significant, and may continue to grow.

Further, the sale of the Kidney Care business results in a smaller, less diversified company, with more limited and concentrated businesses than before the transaction, which may leave us more vulnerable to changing market conditions.

Additionally, until the market has fully analyzed our valuation following the sale of the Kidney Care business, the price of our common stock may continue to fluctuate even after a sufficient amount of time has passed for the market to fully analyze our valuation following the sale of the Kidney Care business.

This has resulted in, and may continue to result in, additional expenses and other difficulties as we work to complete the integration, including challenges consolidating certain operations and functions (including regulatory and other corporate functions), integrating technologies

These activities may result in substantial investment of our resources.

In addition, increases in interest rates and volatility in currency exchange rates have negatively impacted, and may continue to negatively impact, our results of operations.

See “Risks Relating to Our Financial Performance and Our Common Stock – Changes in foreign currency exchange rates and interest rates have had, and may in the future have, an adverse effect on our results of operations, financial condition, cash flows and liquidity”.

chain challenges than certain of our industry peers.

As of December 31, 2024, we had approximately $13.13 billion of indebtedness outstanding and, as of February 21, 2025 have paid down approximately $3.13 billion.

Our level of indebtedness can also constrain our flexibility in responding to unanticipated or adverse business conditions.

If we are unable to repay our indebtedness in accordance with our stated objectives, or at all, or if credit ratings agencies do not believe we are repaying our indebtedness promptly, they may further reduce our senior debt credit ratings.

Further, difficulties in, or the inability to, refinance our indebtedness, or to do so upon attractive terms, could materially and adversely affect our business, prospects, results of operations, financial condition and cash flows, and make us vulnerable to adverse industry and general economic conditions.

We generate a meaningful portion of our net sales and profit outside the United States and currency exchange rates have been especially volatile in recent years.

For example, as described in more detail in Note 5 of Item 8 of this Annual Report, we recorded a $425 million goodwill impairment related to our Front Line Care reporting unit within our Healthcare Systems & Technologies segment and an impairment charge of $50 million to reduce the carrying amount of an in-process research & development (IPR&D) asset to its fair value during 2024.

connection with our December 2021 acquisition of Hillrom.

We cannot guarantee that in the future we will not further reduce the amount of dividends we pay.

The timing, declaration, amount and payment of any future dividends fall within the discretion of our Board of Directors and will depend on many factors, including our available cash, estimated cash needs, earnings, financial condition, operating results, capital requirements, limitations in our contractual agreements, applicable law, regulatory constraints, industry practice and other business considerations that our Board of Directors considers relevant.

In November 2024, we announced a reduction in our quarterly dividend in anticipation of the sale of our Kidney Care business and the corresponding reduction to our earnings and cash flows.

Any further change in our dividend program could have an adverse effect on the market price of our common stock.

Risks Relating to Our Business

In addition, our customers’ use of third parties to service or repair our products has caused, and may in the future cause, quality or safety issues, including due to such third parties’ lack of knowledge of or training on our products.

If we face an increase in costs or are unable to achieve targeted price increases because of industry consolidation or otherwise, the long-term nature of our customer

Any decline or lower-than-expected growth in the markets (or portions thereof) in which we operate or intend to operate could diminish demand for our products and services, which may adversely affect our financial performance.

In addition, the loss of services of our senior management or other key employees could delay or prevent the achievement of our financial, operating or strategic objectives.

- The proposed spinoff of our Kidney Care business may not be completed on the terms, structure or timeline we have announced, if at all.

- We are exposed to new risks as a result of the proposed spinoff and other strategic actions we are undertaking.

- Our Amended and Restated By-Laws designate certain courts in the State of Delaware or the federal district courts of the United States will be the sole and exclusive forum for substantially all disputes between us and our stockholders.

The proposed spinoff of our Kidney Care business may not be completed on the terms, structure or timeline we have announced, if at all.

In January 2023, we announced a series of strategic actions, including, among other things, the proposed spinoff of our Kidney Care business into an independent company (the proposed spinoff) and plans to implement a simplified operating model and manufacturing footprint.

While we have completed implementation of the new operating model, we may encounter challenges to executing the proposed spinoff on the terms, structure and within the timeframe we have announced, or at all.

The proposed spinoff will be subject to the satisfaction of a number of customary conditions, including final approval from Baxter’s Board of Directors.

The failure to satisfy any of the required conditions could delay the completion of the proposed spinoff for a significant period of time or prevent it from occurring at all.

Additionally, the proposed spinoff is complex in nature, and unanticipated developments or changes, including disruptions in general market conditions, changes in law, challenges or complexities in executing the spinoff of the two businesses or developments of viable medical, pharmacological and technological advances (as further discussed in “Other Risks Relating to Our Business If we are unable to successfully introduce or monetize new and existing products or services, or fail to keep pace with changing consumer preferences and needs or advances in technology, our business, results of operations, financial condition and cash flows could be adversely affected”) may affect our ability to complete the proposed spinoff on the terms or on the timeline we have announced, or at all.

The terms and conditions of the required regulatory authorizations and consents that are granted, if any, may also impose requirements, limitations or costs, or place restrictions on the conduct of the independent companies or impact our ability to complete the proposed spinoff on the terms or timeline we have announced, or at all.

Although we intend for the proposed spinoff to be tax-free to Baxter’s stockholders for U.S. federal income tax purposes, we have initiated the preparatory restructuring, which has generated, and we expect to continue to generate, non-U.S. tax liabilities and may also generate potential impairments of deferred tax assets.

Moreover, there can be no assurance that the proposed spinoff will qualify as tax-free for U.S. federal income tax purposes.

The IRS ruling and tax opinion mentioned above will be based upon various factual representations and assumptions, as well as certain undertakings made by Baxter and the new independent company.

If any of these factual representations or assumptions are, or become, untrue or incomplete in any material respect, an undertaking is not complied with, or the facts upon which the opinion or ruling are based are materially different from the actual facts relating to the proposed spinoff, reliance on the opinion or ruling may be jeopardized.

If the proposed spinoff were ultimately determined to be taxable for U.S. federal income tax purposes, we would incur a significant tax liability, while the distributions to Baxter’s stockholders would become taxable and the new company could incur income tax liabilities as well.

We are exposed to new risks as a result of the proposed spinoff and other strategic actions we are undertaking.

Our strategic actions may not achieve their anticipated benefits, or our costs may exceed our estimates.

These challenges include, without limitation, the diversion of management’s attention from ongoing business concerns; appropriately allocating assets and liabilities among the companies to be separated in the proposed spinoff, particularly given the complex nature of the proposed spinoff; attracting, retaining and motivating key management and other employees; retaining existing, or attracting new, business and operational relationships, including with customers, suppliers, employees and other counterparties; maintaining our relationships with regulators; assigning customer contracts and intellectual property to each of the businesses; and potential negative reactions from the financial markets.

These expenses have been significant, and may continue to grow, and may not yield a discernible benefit if the actions are not completed on schedule or at all.

In addition, the anticipated

Further, even if the proposed spinoff is completed, we cannot assure you that each separate company will be successful.

Completion of the proposed spinoff will result in independent companies that are smaller, less diversified companies, with more limited businesses concentrated in their respective industries than Baxter.

As a result, each company will be more vulnerable to changing market conditions, which could have a material adverse effect on its business, results of operations, financial conditions and cash flows.

Following completion of the proposed spinoff, each company will also incur one-time and ongoing costs, including the costs of operating as independent companies, that the separated businesses will no longer be able to share.

In addition, until the market has fully analyzed the values of the separate companies, the price of our common stock and common stock of the new company may experience volatility.

As a result of any of the foregoing or other risks, the combined value of the common stock of the two publicly traded companies may be less than what the value of our common stock would have been absent the proposed spinoff.

These activities may result in substantial investment of our resources (including resources currently focused on our ongoing strategic initiatives, such as the proposed spinoff).

Our success developing products, expanding into new markets and optimizing our market presence from such activities will depend on a number of factors, including our ability to find suitable opportunities or partners for acquisition, investment, alliance or

experienced deterioration in credit and economic conditions.

We incurred acquisition-related debt financing of $11.80 billion to fund the cash consideration for the Hillrom acquisition, refinance certain indebtedness of Hillrom and pay related fees and expenses.

Our substantially increased indebtedness and higher debt-to-equity ratio following the acquisition has the effect, among other things, of reducing our flexibility to respond to changing business and economic conditions and has increased our borrowing costs (including as a result of the downgrades in our senior debt credit ratings since 2021).

We generate the majority of our net sales and profit outside the United States.

As a result, our results of operations have been, and may in the future be, adversely affected by fluctuations in foreign currency exchange rates.

We cannot predict with any certainty changes in foreign currency exchange rates or our ability to mitigate these risks.

For example, as described in more detail in Note 4 of Item 8 of this Annual Report, we recognized $510 million of long-lived asset impairment charges related to the HD business within our Kidney Care segment during 2023.

our product portfolio in response to those requirements, our products may be rendered obsolete or non-competitive.

A pandemic or other public health emergency has adversely affected, and many continue to adversely affect, our business in many ways, including, but not limited to, the following:

Some of our products are particularly sensitive to reductions in elective medical procedures.

For example, many elective procedures were suspended or postponed in our principal markets as hospital systems prioritized treatment of COVID-19 patients or otherwise were required to comply with changing government guidelines.

If patients and hospital systems de-prioritize, delay or cancel elective procedures in the future, our business, financial condition and results of operations may be negatively affected.

Baxter International Inc. is a global medical technology with approximately [removed: 60,000] [added: 38,000] employees worldwide who are engaged in the development, manufacture and sale of a broad range of products, digital health solutions and therapies used by hospitals, [removed: kidney dialysis centers,] nursing homes, rehabilitation centers, ambulatory surgery centers, doctors’ offices and patients at home under physician supervision.

Our global footprint and the critical nature of our products and services, which are sold in over 100 countries as of December 31, [removed: 2023,] [added: 2024, after giving effect to the Kidney Care sale,] play a key role in expanding access to healthcare in emerging and developed countries.

[removed: Proposed Separation] [added: Sale] of Kidney Care Business

[removed: Additionally, we] [added: We] expect to incur dis-synergies following our [removed: completion] [added: sale] of [removed: the proposed spinoff transaction] [added: our Kidney Care business] due to the reduced size of our company and, as a result, we [added: have begun to undertake certain actions (and] will need to undertake [removed: actions] [added: additional actions)] to ensure that our cost structure is appropriate to support our remaining businesses.

[removed: As discussed below under “Recent Strategic Actions,” in] [added: In] the third quarter of 2023, we completed the implementation of a new operating model intended to simplify and streamline our operations and better align our manufacturing and supply chain to our commercial activities.

Our [removed: segment reporting was] [added: segments were] changed during the third quarter of 2023 to align with our new operating [removed: model and prior period segment disclosures have been revised to reflect the new segments.][added: model.]

The Medical Products [removed: and] [added: &] Therapies segment includes sales of our sterile IV solutions, infusion systems, administration sets, parenteral nutrition therapies and surgical hemostat, sealant and adhesion prevention products.

The Healthcare Systems [removed: and] [added: &] Technologies segment includes sales of our connected care solutions and [added: collaboration tools, including smart bed systems, patient monitoring systems and diagnostic technologies, respiratory health]

[added: Our Healthcare Systems & Technologies segment includes sales of our connected care solutions and] collaboration tools, including smart bed systems, patient monitoring systems and diagnostic technologies, respiratory health devices and advanced equipment for the surgical space, including surgical video technologies, precision positioning devices and other accessories.

The Pharmaceuticals segment includes sales of specialty injectable pharmaceuticals, inhaled [removed: anesthesia] [added: anesthetics] and drug [removed: compounding.][added: compounding services.]

[removed: The] [added: That business, which is comprised of our] Kidney Care [removed: segment includes sales of] [added: segment, provides] chronic and acute dialysis therapies and services, including peritoneal [removed: dialysis (PD), hemodialysis (HD),] [added: dialysis, hemodialysis,] continuous renal replacement [removed: therapies (CRRT)] [added: therapies,] and other organ support therapies.

The [removed: financial position,] results of operations and cash flows of our BPS business, including the $2.88 billion pre-tax gain ($2.59 billion net of tax) from the sale of that business and the related cash proceeds received, are reported as discontinued operations in the accompanying consolidated financial statements.

We [removed: intend to use] [added: used] substantially all of the after-tax proceeds from this transaction to repay certain of our debt obligations, including $514 million of commercial paper borrowings and $2.28 billion of long-term debt that we repaid during the fourth quarter of [removed: 2023.][added: 2023, as well as €750 million of senior notes that we repaid during the second quarter of 2024.]

See [removed: Note] [added: Notes] 2 [added: and 6] in Item 8 of this Annual Report on Form 10-K for additional information.

Our global net sales totaled [removed: $14.81] [added: $10.64] billion in [removed: 2023,] [added: 2024,] an increase of [removed: 2%] [added: 3%] over [removed: 2022] [added: 2023] on a reported basis and 3% on a constant currency basis.

International sales totaled [removed: $7.81] [added: $4.79] billion in [removed: 2023,] [added: 2024,] an increase of [removed: 3%] [added: 5%] compared to [removed: 2022] [added: 2023] on a reported basis and [removed: 4%] [added: 6%] on a constant currency basis.

Sales in the United States totaled [removed: $7.00] [added: $5.85] billion in [removed: 2023,] [added: 2024,] an increase of 1% compared to [removed: 2022.][added: 2023.]

Net income (loss) attributable to Baxter stockholders totaled [removed: $2.66 billion,] [added: $(649) million,] or [removed: $5.25] [added: $(1.27)] per diluted share, in [removed: 2023.][added: 2024.]

Net income (loss) attributable to Baxter stockholders in [removed: 2023] [added: 2024] included special items which [removed: increased] [added: adversely impacted] net income [added: (loss)] by [removed: $1.18] [added: $2.13] billion, or [removed: $2.33] [added: $4.17] per diluted share.

Net income (loss) from continuing operations totaled [removed: $(69)] [added: $(326)] million, or [removed: $(0.15)] [added: $(0.64)] per diluted share, in [removed: 2023.][added: 2024.]

Net income (loss) from continuing operations in [removed: 2023] [added: 2024] included special items which adversely impacted our results by [removed: $1.40] [added: $1.29] billion, or [removed: $2.75] [added: $2.53] per diluted share.

Our financial results included research and development (R&D) expenses totaling [removed: $667] [added: $590] million in [removed: 2023,] [added: 2024,] which reflects our focus on balancing investments to support our new product pipeline with efforts to optimize overall R&D spending (including with respect to the maintenance of our portfolio).

While [removed: we] [added: have faced and may] continue to face [removed: continuing] [added: operational and] global macroeconomic challenges, our financial position remains strong, with operating cash flows from continuing operations totaling [removed: $1.70 billion] [added: $819 million] in [removed: 2023.][added: 2024.]

Capital expenditures totaled [removed: $692] [added: $446] million in [removed: 2023] [added: 2024] as we [removed: continue] [added: continued] to invest across our businesses to support future growth, including additional investments in support of new and existing product capacity expansions.

Our investments in capital expenditures in [removed: 2023] [added: 2024] were focused on projects that improve production efficiency, enhance our quality systems and optimize manufacturing capabilities to support our business growth.

During [removed: 2023,] [added: 2024,] we paid cash dividends to our stockholders totaling [removed: $586] [added: $590] million.

[removed: We] [added: In recent years, we] have experienced significant challenges to our global supply [removed: chain in recent periods,] [added: chain,] including production delays and interruptions, increased costs and shortages of raw materials and component parts (including resins and electromechanical [removed: devices) and] [added: devices),] higher transportation costs, [removed: resulting] [added: adverse impacts] from [removed: the pandemic and other exogenous factors including] significant weather [removed: events,] [added: events (including Hurricane Helene and the flooding of our North Cove facility),] elevated inflation [removed: levels, increased] [added: levels and] interest rates, disruptions to certain ports of call and access to shipping ports around the world, the war in Ukraine, the conflict in the Middle [removed: East (including recent attacks on merchant ships in the Red Sea), tensions between China and Taiwan] [added: East,] and other geopolitical events.

While we have seen [removed: some] improvements in the availability of [removed: certain] component parts and improved pricing in [removed: certain] raw [removed: materials,] [added: materials and on transportation costs, some of] these challenges [removed: have not completely subsided and may continue] [added: (including certain of those set forth above as we work] to [added: fully remediate our North Cove facility) are expected to] have a negative impact on our [removed: supply chain] [added: results of operations] in [removed: future periods.][added: the future.]

The war in Ukraine, the conflict in the Middle [removed: East (including recent attacks on merchant ships in the Red Sea), tensions between China and Taiwan and] [added: East, other geopolitical events,] the sanctions and other measures being imposed in response to these conflicts (and the potential for escalation of these [removed: conflicts)] [added: conflicts), recently imposed or future quotas, duties or tariffs and any retaliatory counter measures, and recent political changes to trade policies,] have increased the levels of economic and political uncertainty and we continue to closely monitor the developing situations.

While [removed: these countries do not constitute a material portion of] [added: we have substantially completed] our [removed: business,] [added: wind down efforts related to our business in Russia,] a significant escalation or expansion of economic disruption or the current scope of [removed: these conflicts] [added: the war in Ukraine] could have an adverse effect on our [removed: business] [added: operations (including our supply chain)] in the region.

The existence of high inflation rates in the United States and in many of the countries where we conduct business has resulted in, and may [removed: continue to] [added: in the future] result in, higher interest rates, shipping costs, labor [removed: costs] [added: costs,] and other costs and expenses.

Additionally, adverse changes in foreign currency exchange rates have [removed: increased] [added: increased, and could continue to increase,] our costs of sourcing certain raw materials in some jurisdictions.

We have experienced and may [removed: continue to] [added: in the future] experience inflationary increases in manufacturing costs and operating [removed: expenses,] [added: expenses] and we may not be able to pass these cost increases on to our customers in a timely manner or at all, which could have a material adverse impact on our profitability and results of operations.

[removed: Business] [added: These regulations (as described in Item 1, Government Regulation,] of this Annual Report on Form [removed: 10-K,] [added: 10-K)] require that we obtain specific approval from [removed: the Food and Drug Administration (FDA) and] [added: FDA or applicable] non-U.S. regulatory authorities before we can market and sell most of our products in a particular country.

Failure to obtain or maintain those approvals or clearances [added: (including temporary importation authorizations)] could have a material adverse impact on our business (including with respect to our ability to compete in the product markets in which we currently operate).

[added: Furthermore, FDA in the United States, the EMA and MHRA in Europe, the NMPA in China, and other] government agencies, inside and outside of the United States, administer requirements covering the testing, safety, effectiveness, manufacturing, labeling, promotion and advertising, [removed: distribution] [added: pricing, distribution,] and post-market surveillance of our products.

Our failure to comply with these requirements may subject us to various actions, including warning letters, product recalls or seizures, monetary sanctions, injunctions to halt the manufacture and distribution of products, civil or criminal sanctions, refusal of a government to grant approvals or licenses, restrictions on operations or withdrawal of existing approvals and [removed: licenses] [added: licenses,] and may have a material adverse impact on our results of operations.

In [added: 2024,] 2023 and 2022 our Healthcare Systems [removed: and] [added: &] Technologies segment (formerly [added: referred to as] our Hillrom segment) generated net sales of [added: $2.95 billion,] $3.01 [removed: billion] [added: billion,] and $2.94 billion, respectively.

See Notes 3, [removed: 5, 6] [added: 5] and 18 in Item 8 of this Annual Report on Form 10-K for additional information about the Hillrom acquisition, goodwill and intangible asset impairments, [removed: Hillrom acquisition financing arrangements] and our Healthcare Systems [removed: and] [added: &] Technologies segment results, respectively.

Refer to Note [removed: 3] [added: 5] in Item 8 of this Annual Report on Form 10-K for additional information regarding [removed: the acquisition of PerClot.][added: this goodwill impairment charge.]

In January 2023, following the completion of that review, we announced a number of planned strategic actions, as discussed below, which are intended to enhance our operational effectiveness, accelerate innovation and drive additional stockholder value.

We completed the last of these strategic actions on January 31, 2025 in connection with the sale of our Kidney Care business.

On August 12, 2024, we entered into an Equity Purchase Agreement (EPA ) with certain affiliates of Carlyle Group Inc. (Carlyle) to sell our Kidney Care business, which will be known as Vantive.

On January 31, 2025, we completed the sale of our Kidney Care business to Carlyle for an aggregate purchase price of $3.80 billion in cash, subject to certain closing cash, working capital and debt adjustments.

After giving effect to certain adjustments, we received approximately $3.71 billion pre-tax cash proceeds at closing of the transaction with the net after tax proceeds currently estimated to be approximately $3.4 billion, subject to certain post-closing adjustments.

We determined that our Kidney Care business met the criteria to be classified as held-for-sale in August 2024, and we also concluded that it met the conditions to be reported as a discontinued operation at that time.

Accordingly, our Kidney Care business is reported in discontinued operations in the accompanying consolidated financial systems, and our prior period results have been adjusted to reflect discontinued operations presentation.

The fair value and carrying value of assets held for sale are evaluated each period and a loss on sale is recognized when the fair value less costs to sell are below the carrying value.

There has been no loss on sale recognized for the period ending December 31, 2024.

We will recognize a gain or loss upon disposition of the business depending on the carrying value at that date, including any tax impacts of the sale, which may be material.

Under this operating model, our business is currently comprised of three reportable segments: Medical Products & Therapies, Healthcare Systems & Technologies, and Pharmaceuticals.

See Notes 2 and 6 in Item 8 of this Annual Report on Form 10-K for additional information.

Hurricane Helene

In September 2024, Hurricane Helene, which brought significant rain and extensive flooding to Western North Carolina, caused damage to certain of our assets at our North Cove facility in Marion, N.C. and disrupted operations at that facility.

As we work to fully remediate the facility, we currently expect to incur an estimated $50 million of charges in the first quarter of 2025 primarily consisting of remediation costs, air freight (as we transfer product across our global network in the interest of increasing the availability of intravenous solutions for our customers) and other charges.

See Note 1 for further discussion of insurance recoveries related to Hurricane Helene.

In 2021, we acquired Hillrom.

During 2024, we recorded a $425 million goodwill impairment related to our Front Line Care reporting unit within our Healthcare Systems & Technologies segment.

| United States | | | $ | 5,850 | | $ | 5,802 | | $ | 5,769 | | | | | 1 | | % | 1 | | % | | | | 1 | | % | 1 | | % |

| Emerging markets 1 | | | 1,350 | | | 1,343 | | | 1,253 | | | | | | 1 | | % | 7 | | % | | | | 3 | | % | 8 | | % |

| Rest of world 2 | | | 3,436 | | | 3,215 | | | 3,035 | | | | | | 7 | | % | 6 | | % | | | | 7 | | % | 6 | | % |

| Total net sales | | | $ | 10,636 | | $ | 10,360 | | $ | 10,057 | | | | | 3 | | % | 3 | | % | | | | 3 | | % | 3 | | % |

| Infusion Therapies & Technologies | | | $ | 4,103 | | $ | 3,960 | | | | | 4 | | % | | | | 4 | | % |

| Advanced Surgery | | | 1,104 | | | 1,051 | | | | | | 5 | | % | | | | 6 | | % |

Sales performance in 2024 primarily reflected growth in Infusion Systems as a result of sales of our Novum IQ large volume infusion and syringe pump in the U.S., and sales of Nutrition product offerings, which was attributable to both pricing initiatives and increased sales volume.

In September 2024, Hurricane Helene, which brought significant rain and extensive flooding to Western North Carolina, caused damage to certain of our assets at our North Cove facility in Marion, N.C. and disrupted operations at that facility.

This facility, which manufactures IV Solutions primarily for the U.S. market, was not fully operational for most of the fourth quarter.

As a consequence, Hurricane Helene had an estimated $110 million adverse impact on sales, which offset price and underlying volume gains during the year.

Sales performance in 2023 reflected strong demand for our infusion systems and

Care and Connectivity Solutions net sales increased 1% for the year ended December 31, 2024, driven by increased order volume associated with capital spending in the U.S. as compared to the prior year, partially offset by declines in care communication products driven by the shifting of installations to future periods and lower sales outside of the U.S.

Front Line Care net sales decreased 6% for the year ended December 31, 2024, as compared to the prior year period, primarily driven by a backlog reduction in the prior year period which increased sales in the prior year, reduced demand in the primary care market, lower government orders, certain product exits and select supply constraints impacting product availability.

These declines were partially offset by growth in our cardiology products.

| years ended December 31 (in millions) | | | 2024 | | | 2023 | | | | | | At actual currency rates | | | | | | At constant currency rates 1 | | |

| Drug Compounding | | | 1,038 | | | 902 | | | | | | 15 | | % | | | | 15 | | % |

Injectables and Anesthesia net sales increased 2% for the year ended December 31, 2024, as compared to the prior year period, primarily due to growth in our U.S. specialty injectable products, driven by strong sales volume in our core portfolio and recent product launches, partially offset by declines for inhaled anesthetics.

Drug Compounding net sales increased 15% for the year ended December 31, 2024, as compared to the prior year period, driven by increased demand for our international pharmacy compounding offerings, due in part, to customer capacity constraints that resulted in increased outsourcing of compounding activities.

The years ended December 31, 2023 and 2022 also included royalty income under a business development arrangement.

The decrease in Other sales for the year ended December 31, 2024 as compared to the prior year period reflects lower contract manufacturing volume.

| Hurricane Helene costs6 | | | (110) | | | — | | | — | | |

| Long-lived asset impairments1 | | | 50 | | | — | | | — | | |

In January 2023, following the completion of that review, we announced the following planned strategic actions that are intended to enhance our operational effectiveness, accelerate innovation and drive additional stockholder value: (a) a proposed spinoff of our Kidney Care business into an independent publicly traded company focused on kidney care and organ support (the proposed spinoff), (b) our development of a new operating model to simplify our operations and better align our manufacturing and supply chain to our commercial activities and (c) our pursuit of strategic alternatives for our BioPharma Solutions (BPS) business.

We are working to complete the proposed separation of our Kidney Care business in the interest of establishing an independent company focused on kidney care and organ support.

While we continue to evaluate all strategic options in the interest of maximizing stockholder value, we continue to progress towards our current target of July 2024 for completion of the proposed spinoff of this business.

In both 2023 and 2022 we generated $4.45 billion of combined net sales from our Kidney Care segment, representing approximately 30% and 31%, respectively, of our consolidated net sales.

We intend for the proposed spinoff to qualify as tax-free to Baxter and our stockholders for U.S. federal income tax purposes.

The proposed spinoff is subject to the satisfaction of customary conditions, including final approval from our Board of Directors, the filing and effectiveness of a registration statement on Form 10, receipt of an Internal Revenue Service (IRS) ruling or related tax opinions from counsel, satisfactory completion of financing arrangements, consultations with works councils and other employee representative bodies and any necessary regulatory approvals.

We incurred $225 million of pre-tax costs related to the proposed spin-off during 2023 and we expect to continue to incur significant separation-related costs in 2024.

There can be no guarantees that the proposed spinoff will be completed in the manner or over the timeframes described above, or at all.

Our reportable segments were previously comprised of the following geographic segments related to our legacy Baxter business: Americas (North and South America), EMEA (Europe, Middle East and Africa) and APAC (Asia Pacific), and a global segment for our Hillrom business.

Under this new operating model, our business is comprised of four segments: Medical Products and Therapies, Healthcare Systems and Technologies (formerly referred to as our Hillrom segment), Pharmaceuticals and Kidney Care (which would become an independent publicly traded company following the completion of the proposed spinoff transaction).

On September 29, 2023, we completed the sale of our BPS business and received cash proceeds of $3.96 billion from that transaction.

During 2024, we expect to continue to incur significant separation-related costs related to the proposed spinoff, which may adversely impact our earnings and operating cash flows.

Due to the nature of our products, which include dense consumable medical products such as IV fluids, and the geographic locations of our manufacturing facilities, which often require us to transport our products long distances, we may be more susceptible to increases in freight costs and other supply chain challenges than certain of our industry peers.

These challenges, including the unavailability of certain raw materials and component parts, have also had a negative impact on our sales for certain product categories (including those acquired in our December 2021 acquisition of Hill-Rom Holdings, Inc. (Hillrom)) due to our inability to fully satisfy demand and may continue to have a negative impact on our sales in the future.

With respect to the war in Ukraine and our business in Russia, we have substantially completed our wind down efforts related to our business in Russia in a manner that we structured to be compliant with all applicable U.S. and European Union sanctions and regulations.

Our global operations expose us to risks associated with public health crises and epidemics/pandemics.

COVID-19 had, and it or any other future public health crisis could in the future have an adverse impact on, among other things, our expenses, operations, supply chains and distribution systems.

Over the course of the COVID-19 pandemic, our business was impacted by shifting healthcare priorities and significant volatility in the demand for our products, and any resurgence of the pandemic or any new public health crisis could again impact healthcare priorities and cause volatility in the demand for our products.

These regulations, as described in "Government Regulation" in Item 1.

Furthermore, FDA in the United States, the European Medicines Agency (EMA) in Europe, the China Food and Drug Administration (CFDA) in China and other

On December 13, 2021, we completed our acquisition of all outstanding equity interests of Hillrom for a purchase price of $10.48 billion.

Including the assumption of Hillrom's outstanding debt obligations, the enterprise value of the transaction was $12.84 billion.

Hillrom was a global medical technology leader whose products and services help enable earlier diagnosis and treatment, optimize surgical efficiency, and accelerate patient recovery while simplifying clinical communication and shifting care closer to home.

Hillrom made those outcomes possible through digital and connected care solutions and collaboration tools, including smart bed systems, patient monitoring and diagnostic technologies, respiratory health devices, advanced equipment for the surgical space and more, delivering actionable, real-time insights at the point of care.

PerClot

On July 29, 2021, we acquired certain assets related to PerClot Polysaccharide Hemostatic System (PerClot), including distribution rights for the U.S. and specified territories outside of the U.S., from CryoLife, Inc. for an upfront purchase price of $25 million and the potential for additional cash consideration of up to $36 million, which had an acquisition-date fair value of $28 million, based upon regulatory and commercial milestones.

PerClot is an absorbable powder hemostat indicated for use in surgical procedures, including cardiac, vascular, orthopedic, spinal, neurological, gynecological, ENT and trauma surgery as an adjunct hemostat when control of bleeding from capillary, venous, or arteriolar vessels by pressure, ligature, and other conventional means is either ineffective or impractical.

Transderm Scop

On March 31, 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.

Caelyx and Doxil

On February 17, 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 for $325 million in cash.

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.

| United States | | | $ | 7,000 | | $ | 6,955 | | $ | 4,938 | | | | | 1 | | % | 41 | | % | | | | 1 | | % | 41 | | % |

| Emerging markets 1 | | | 3,319 | | | 3,222 | | | 3,012 | | | | | | 3 | | % | 7 | | % | | | | 5 | | % | 14 | | % |

| Rest of world 2 | | | 4,494 | | | 4,329 | | | 4,196 | | | | | | 4 | | % | 3 | | % | | | | 4 | | % | 13 | | % |

| Total net sales | | | $ | 14,813 | | $ | 14,506 | | $ | 12,146 | | | | | 2 | | % | 19 | | % | | | | 3 | | % | 24 | | % |

| | | | | | | | | | | | | | | | | | | | | |

Baxter International Inc., through its subsidiaries, provides a broad portfolio of essential healthcare products, including [removed: acute and chronic dialysis therapies;] sterile intravenous (IV) solutions; infusion systems and devices; parenteral nutrition therapies; inhaled anesthetics; generic injectable pharmaceuticals; surgical hemostat and sealant products, advanced surgical equipment; smart bed systems; patient monitoring and diagnostic technologies; and respiratory health devices.

These products are used by hospitals, [removed: kidney dialysis centers,] nursing homes, rehabilitation centers, ambulatory surgery centers, doctors’ [removed: offices] [added: offices, kidney dialysis centers] and patients at home under physician supervision.

As of December 31, [removed: 2023,] [added: 2024, after giving effect to the recent sale of our Kidney Care business (as discussed below),] we manufactured products in over 20 countries and sold them in over 100 countries.

[removed: Proposed Separation] [added: Sale] of Kidney Care Business

Our reportable segments were previously comprised of the following geographic segments related to our legacy Baxter business: Americas (North and South America), EMEA (Europe, Middle East and Africa) and APAC (Asia Pacific), and a global segment for [removed: our Hillrom business.][added: the Hill-Rom Holdings, Inc. (Hillrom) business we acquired in December 2021.]

Our segment reporting was changed during the third quarter of 2023 to align with our new operating [removed: model] [added: model,] and [removed: prior period segment disclosures have been revised to reflect] [added: all periods presented are under] the new [removed: segments.][added: operating model.]

On September 29, 2023, we completed the sale of our [removed: BPS] [added: BioPharma Solutions (BPS)] business and received cash proceeds of $3.96 billion from that transaction.

The [removed: financial position,] results of operations and cash flows of our BPS business, including the $2.88 billion pre-tax gain ($2.59 billion net of tax) from the sale of that business and the related cash proceeds received, are reported as discontinued operations in the accompanying consolidated financial statements.

We [removed: intend to use] [added: used] substantially all of the after-tax proceeds from this transaction to repay certain of our debt obligations, including $514 million of commercial paper borrowings and $2.28 billion of long-term debt that we repaid during the fourth quarter of [removed: 2023.][added: 2023, as well as €750 million of senior notes that we repaid during the second quarter of 2024.]

[removed: Hillrom made those outcomes possible through digital and] [added: The Healthcare Systems & Technologies segment includes sales of our] connected care solutions and collaboration tools, including smart bed systems, patient monitoring [added: systems] and diagnostic technologies, respiratory health [removed: devices,] [added: devices and] advanced equipment for the surgical [removed: space] [added: space, including surgical video technologies, precision positioning devices] and [removed: more, delivering actionable, real-time insights at the point of care.][added: other accessories.]

We currently manage our global operations based on [removed: four] [added: three reportable] segments: Medical Products [removed: and] [added: &] Therapies, Healthcare Systems [removed: and Technologies, Pharmaceuticals] [added: & Technologies] and [removed: Kidney Care.][added: Pharmaceuticals.]

The Medical Products [removed: and] [added: &] Therapies segment includes sales of our sterile IV solutions, infusion systems, administration sets, parenteral nutrition therapies and surgical hemostat, sealant and adhesion prevention products.

The Pharmaceuticals segment includes sales of specialty injectable pharmaceuticals, inhaled [removed: anesthesia] [added: anesthetics] and drug [removed: compounding.][added: compounding services.]

[removed: The] [added: That business, which is now known as Vantive Health LLC (Vantive) is comprised of our former] Kidney Care segment [removed: includes sales of] [added: and provides] chronic and acute dialysis therapies and services, including peritoneal [removed: dialysis (PD), hemodialysis (HD),] [added: dialysis, hemodialysis,] continuous renal replacement [removed: therapies (CRRT)] [added: therapies,] and other organ support therapies.

We are focused on [removed: four] [added: key] strategic pillars as part of our pursuit of industry leading performance: innovation; [removed: market expansion;] operational efficiency; and capital allocation.

Our innovation strategy, which encompasses both organic and inorganic initiatives, is focused on accelerating our sales growth through the introduction of new connected care and core [removed: therapies] [added: therapy] offerings.

Connected care offerings include devices or software that can [added: digitally] connect, communicate and/or analyze data to help transform healthcare and improve patient [removed: outcomes.][added: outcomes, and we are continuing to build out our connected care portfolio offerings, which includes smart bed systems, infusion pumps, patient monitoring and diagnostic technologies, respiratory health devices and advanced equipment for the surgical space.]

Our core [removed: therapies] [added: therapy] product offerings include pharmaceuticals and consumable medical products designed to address essential patient and provider needs across the continuum of care.

We are in the midst of launching [added: (or have recently launched)] several new products, geographic expansions and line extensions in areas such as smart pump technology, hospital pharmaceuticals and nutritionals, surgical sealants, smart beds, respiratory [removed: vests, chronic and acute renal care] [added: vests] and more.

As discussed above under “Recent Strategic Actions,” [added: in the third quarter of 2023,] we [removed: recently] implemented a new operating model intended to simplify and streamline our operations and better align our manufacturing and supply chain to our commercial activities.

[removed: Going forward we expect] [added: We believe these changes will allow us] to be a more integrated and nimble organization that can respond more effectively to [added: operational challenges and] changes in the macroeconomic environment while enhancing our ability to drive innovation in our product portfolio.

Such high value activities include supporting innovation, [removed: building out] [added: actively managing] the portfolio, expanding patient access and accelerating growth for our stockholders.

- active portfolio management through the identification of attractive acquisition and divestiture transactions, including the recent [removed: divestiture] [added: divestitures] of our BPS [removed: business] and [removed: the proposed] Kidney Care [removed: separation;] [added: businesses;] and

We paid down [removed: $2.80] [added: $3.65] billion of [added: net] debt during [removed: 2023,] [added: 2024 and through February 21, 2025] using proceeds from the [removed: sale] [added: sales] of our BPS [removed: business,] and [added: Kidney Care businesses, and] we are committed to retaining our investment grade rating, including taking actions toward achieving a [removed: 2.75x] net leverage target [removed: in 2025.][added: of approximately 3.0x by the end of 2025 through ongoing debt repayment and financing activities.]

During this deleveraging period, we currently intend to continue paying a [removed: dividend,] [added: dividend (which we reduced in November 2024),] not make any share repurchases and be highly selective with respect to any potential acquisitions.

Sales are made and products are distributed on a direct basis or through independent distributors or sales agents in more than 100 countries as of December 31, [removed: 2023.][added: 2024, giving effect to the sale of our Kidney Care business.]

[removed: The majority] [added: A significant portion] of our revenues are generated outside of the United States and [added: thoughtful] geographic expansion remains a key component of our [removed: strategy, particularly with respect to our Healthcare Systems and Technologies business.][added: strategy.]

For more information on these risks, see the information under the captions “Risks Relating to Our Business—We are subject to risks associated with doing business globally” and “—Changes in foreign currency exchange rates and interest rates [removed: have,] [added: have had,] and may in the future have, an adverse effect on our results of operations, financial condition, cash flows and liquidity” in Item 1A.

For more information regarding foreign currency exchange risk, refer to the [removed: discussion under the caption entitled “Financial Instrument Market Risk” in Item 7.]

Additionally, our contractual pricing arrangements with GPOs, IDNs and public contracting authorities [added: can sometimes] limit our ability to increase prices in order to offset raw materials or component price increases or otherwise.

Our ability to do so in the face of limited supply of certain raw materials and component parts and inflationary environment [added: has been and] may [added: in the future] be limited.

There has been consolidation in our customer base and by our competitors, which [added: has resulted and] continues to result in pricing and market pressures.

[removed: Global] [added: 1.Global] efforts toward healthcare cost containment continue to exert pressure on product pricing.

Expenditures for our R&D activities were [removed: $667] [added: $590] million in [removed: 2023, $602] [added: 2024, $518] million in [removed: 2022,] [added: 2023,] and [removed: $531] [added: $450] million in [removed: 2021.][added: 2022.]

These expenditures include costs associated with R&D activities performed at our R&D centers located around the world, which include facilities in Belgium, [removed: China, Germany,] India, Italy, [removed: Japan, Sweden] [added: Malta] and the United States, as well as in-licensing, milestone and reimbursement payments made to partners for R&D work performed at non-Baxter locations.

As discussed above in under "Recent Strategic Actions," [added: in the third quarter of 2023,] we [removed: have recently] implemented a new operating model intended to simplify and streamline our operations, including with respect to our R&D activities.

For more information on corrective actions taken by us, refer to the discussion under the caption [added: entitled “Certain Regulatory Matters” in Item 7.]

Driven by our mission to save and sustain lives, Baxter's corporate responsibility strategy focuses on addressing [removed: the environmental, social and governance (ESG) issues] [added: corporate responsibility matters] that affect our patients, customers, employees, communities and other [added: critical] stakeholders worldwide.

In 2021, we launched our 2030 Corporate Responsibility Commitment featuring [removed: ten] strategic goals for focused action.

Our Commitment is anchored by three pillars - Empower [removed: Our] [added: our] Patients, Protect [removed: Our] [added: our] Planet and Champion [removed: Our People and Communities - and bolstered by] our [removed: approach to the foundational principles of Ethics and Compliance, Human Rights, Diversity, Equity and Inclusion and Privacy] [added: People] and [removed: Data Protection.][added: Communities.]

In January 2023, following the completion of that review, we announced a number of planned strategic actions, as discussed below, which are intended to enhance our operational effectiveness, accelerate innovation and drive additional stockholder value.

We completed the last of these strategic actions on January 31, 2025 in connection with the sale of our Kidney Care business.

On August 12, 2024, we entered into an Equity Purchase Agreement (EPA) with certain affiliates of Carlyle Group Inc. (Carlyle) to sell our Kidney Care business.

On January 31, 2025, we completed the sale of our Kidney Care business to Carlyle for an aggregate purchase price of $3.80 billion in cash, subject to certain closing cash, working capital and debt adjustments.

After giving effect to certain adjustments, we received approximately $3.71 billion pre-tax cash proceeds at closing of the transaction with the net after tax proceeds currently estimated to be approximately $3.4 billion, subject to certain post-closing adjustments.

We determined that our Kidney Care business met the criteria to be classified as held-for-sale in August 2024, and we also concluded that it met the conditions to be reported as a discontinued operation at that time.

Accordingly, our Kidney Care business is reported in discontinued operations in the accompanying consolidated financial systems, and our prior period results have been adjusted to reflect discontinued operations presentation.

Under this operating model, our business is currently comprised of three reportable segments: Medical Products & Therapies, Healthcare Systems & Technologies, and Pharmaceuticals.

Portfolio Optimization

Our strategy also involves active portfolio management in the interest of maximizing value for Baxter stockholders and best positioning Baxter for long-term success.

The recent Kidney Care sale has given us enhanced flexibility to deploy (or in some cases redeploy) capital toward opportunities that seek to accelerate our growth objectives,

whether as a result of innovation or expanding our portfolio geographically or as a result of channel expansion or market development activities.

We also continue to focus on increasing efficiencies through automation and digitization.

discussion under the caption entitled “Financial Instrument Market Risk” in Item 7.

Some of these agreements contain failure to supply clauses with varying remedies, inclusive of limited termination rights.

Additionally, our profit margins were negatively impacted in the fourth quarter of 2024 (and may continue to be negatively impacted in the short term) because we were unable to fully offset the increased supply chain costs associated with our ongoing North Cove recovery efforts (including as a result of importing additional product from outside the United States to support IV solutions demand).

We expect to announce a refreshed Corporate Responsibility commitment and goal set after the issuance of our 2024 Corporate Responsibility Report (to be issued in June 2025), either in a separate announcement or as part of the 2025 Corporate Responsibility Report.

This timing should allow for a new, permanent CEO to have the opportunity to review and contribute to our commitment and goals and to reflect recent operational and other developments (including the recent Kidney Care sale).

The Food and Drug Administration (FDA) in the United States, the European Medicines Agency (EMA) and the Medicines &

Even after we obtain regulatory authorization to market a product, additional regulatory authorization may be necessary to maintain the product in the market, including additional 501(k) clearances, new drug approval (NDA) supplements, and other regulatory submissions.

In addition, the raw materials, manufacturing facilities, processes and quality systems used in the manufacture of a product are subject to continued review by FDA and other regulatory authorities globally.

employees to achieve superior results.

In January 2023, following the completion of that review, we announced the following planned strategic actions that are intended to enhance our operational effectiveness, accelerate innovation and drive additional stockholder value: (a) a proposed spinoff of our Kidney Care business into an independent publicly traded company focused on kidney care and organ support (the proposed spinoff), (b) our development of a new operating model to simplify our operations and better align our manufacturing and supply chain to our commercial activities and (c) our pursuit of strategic alternatives for our BioPharma Solutions (BPS) business.

Following these actions, we intend to emerge as a stronger hospital solutions and connected care company.

As a more focused business, we expect to be better positioned to make strategic investments to accelerate our vision and to deliver differentiated value to our stakeholders with our unique combination of products, therapies and connected care platforms.

We are working to complete the proposed separation of our Kidney Care business in the interest of establishing an independent company focused on kidney care and organ support.

While we continue to evaluate all strategic options in the interest of maximizing stockholder value, we continue to progress towards our current target of July 2024 for completion of the proposed spinoff of this business.

In both 2023 and 2022 we generated $4.45 billion of net sales from our Kidney Care segment, representing approximately 30% and 31%, respectively, of our consolidated net sales.

We intend for the proposed spinoff to qualify as tax-free to Baxter and our stockholders for U.S. federal income tax purposes.

The proposed spinoff is subject to the satisfaction of customary conditions, including final approval from our Board of Directors, the filing and effectiveness of a registration statement on Form 10, receipt of an Internal Revenue Service (IRS) ruling or related tax opinions from counsel, satisfactory completion of financing arrangements, consultations with works councils and other employee representative bodies and any necessary regulatory approvals.

There can be no guarantees that the proposed separation will be completed in the form of a spinoff or over the timeframe described above, or at all.

Under this new operating model, our business is comprised of four segments: Medical Products and Therapies, Healthcare Systems and Technologies (formerly referred to as our Hillrom segment), Pharmaceuticals and Kidney Care (which would become an independent publicly traded company following the completion of the proposed spinoff transaction).

Acquisition of Hillrom

On December 13, 2021, we completed our acquisition of all outstanding equity interests of Hill-Rom Holdings, Inc. (Hillrom) for a purchase price of $10.48 billion.

Including the assumption of Hillrom's outstanding debt obligations, the enterprise value of the transaction was $12.84 billion.

Hillrom was a global medical technology leader and its products and services help enable earlier diagnosis and treatment, optimize surgical efficiency, and accelerate patient recovery while simplifying clinical communication and shifting care closer to home.

In 2023 and 2022, our Healthcare Systems and Technologies segment generated net sales of $3.01 billion and $2.94 billion, respectively.

During 2022, we also recognized $2.81 billion of goodwill impairments and $332 million of indefinite-lived intangible asset impairments related to goodwill and trade name intangible assets that arose from the Hillrom acquisition.

See Notes 3, 5, 6 and 18 in Item 8 of this Annual Report on Form 10-K for additional information about the Hillrom acquisition, goodwill and intangible asset impairments, Hillrom acquisition financing arrangements and the Healthcare Systems and Technologies segment results, respectively.

The Healthcare Systems and Technologies segment includes sales of our connected care solutions and collaboration tools, including smart bed systems, patient monitoring systems and diagnostic technologies, respiratory health devices and advanced equipment for the surgical space, including surgical video technologies, precision positioning devices and other accessories.

Through our acquisition of Hillrom, we are continuing to build out our connected care portfolio offerings, as its product portfolio includes digital and connected care solutions and collaboration tools such as smart bed systems, patient monitoring and diagnostic technologies, respiratory health devices and advanced equipment for the surgical space.

Market Expansion

The market expansion component of our strategy includes expanding our portfolio geographically, broadening our portfolio through channel expansion and increasing utilization of our products and therapies through market development activities.

These initiatives include using Baxter’s geographic footprint to introduce the Healthcare Systems and Technologies product portfolio into new markets, as well as expanding value-added services, increasing adoption of underpenetrated therapies and providing education and advocacy to improve access to our products.

We also continue to focus on increasing efficiencies through automation and digitization and delivering on the targeted cost synergies expected to be achieved from our acquisition of Hillrom.

In recent periods, we have experienced increased costs and shortages of raw materials and component parts (including resins and electromechanical devices), which has had a negative impact on our profit margins and on our sales for certain product categories, due to our inability to fully satisfy demand.

entitled “Certain Regulatory Matters” in Item 7.

Our corporate responsibility approach supports our business priorities to achieve top quartile results relative to industry peers and other comparators across four dimensions: patient safety and quality, growth through innovation, best place to work and industry-leading performance.

Even after we obtain regulatory approval to market a product, the product and our manufacturing processes and quality systems are subject to continued review by FDA and other regulatory authorities globally, including additional 510(k) and other regulatory submissions, and approvals or the time needed to secure approvals are not certain.

healthcare companies in recent years.

For example, we made $6 million and $33 million of capital expenditures in 2022 and 2021, respectively, related to a new ethylene oxide emissions control system at our Mountain Home, Arkansas facility that was substantially completed in 2022.

- Activating Change Today. Building on the success of our nine business resource groups (BRGs), one such BRG, Baxter’s Black Alliance, joined forces with colleagues across the company to introduce Activating Change Today (ACT), a multidimensional program to advance inclusion and racial justice.

ACT is focused on driving results across four key areas – Workforce, Workplace, Community and Marketplace – encompassing employees, external stakeholders and the markets and communities we serve.

reasonably practicable after electronically filing or furnishing such material with the Securities and Exchange Commission.

For the fiscal year ended December 31, [removed: 2023][added: 2024]

[removed: ][added: ]

The aggregate market value of the voting common equity held by non-affiliates of the registrant as of June 30, [removed: 2023] [added: 2024] (the last business day of the registrant’s most recently completed second fiscal quarter), based on the [removed: per share closing sale price of $45.56 on that date and the] assumption for the purpose of this computation only that all of the registrant’s directors and executive officers are affiliates, was approximately [removed: $23] [added: $17] billion.

The number of shares of the registrant’s common stock, $1.00 par value, outstanding as of [removed: January 31, 2024] [added: February 13, 2025] was [removed: 507,827,437.][added: 511,624,996.]

Portions of the registrant’s definitive 2024 proxy statement for use in connection with its Annual Meeting of Stockholders expected to be held on May [removed: 7, 2024] [added: 6, 2025] are incorporated by reference into Part III of this report.

| [Item [removed: 1.](#i07617ba54a2545699a185a64dfa20a99_10)] [added: 1.](#i5f53b2f53b854e0d802df7b875649210_10)] | | | [removed: [Business](#i07617ba54a2545699a185a64dfa20a99_10)] [added: [Business](#i5f53b2f53b854e0d802df7b875649210_10)] | | | [removed: [1](#i07617ba54a2545699a185a64dfa20a99_10)] [added: [1](#i5f53b2f53b854e0d802df7b875649210_10)] | | |

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| | | | | | | | | | | | | Chicago Stock Exchange | | |

| 0.4% Global Notes due 2024 | | | | | | BAX 24 | | | | | | New York Stock Exchange | | |

We assess, identify and manage risks from cybersecurity threats through our Global Cybersecurity and Compliance Program (Cybersecurity [removed: Program), which is part of our larger enterprise risk management framework.][added: Program).]

The [removed: Cybersecurity Program is currently overseen by the Audit Committee and Quality, Compliance and Technology Committee (QCT Committee) of the Board of Directors and is managed by a dedicated Chief Information Security Officer (CISO), whose] [added: CISO's] organization has oversight [removed: of] [added: responsibilities for] cybersecurity strategy, policy, standards, architecture and processes for the security of our [added: corporate and manufacturing] enterprise network, information assets and medical device technologies.

Our current CISO has over 20 years of experience in cybersecurity and [added: risk and technology management, and] has held numerous positions in the cybersecurity sector, including serving as Global Cyber Risk Officer at another Fortune 500 medical products and equipment company and CISO at [removed: another] [added: other] healthcare [removed: company.][added: companies and health care delivery organizations.]

The CISO’s organization monitors and manages, and works to identify and assess, cybersecurity risk through various technologies, resources, processes and policies that are [removed: regularly] updated [added: as necessary] to align with the changing threat landscape, our evolving business needs as well as global regulatory requirements.

In addition, from time to time, we also utilize external auditors and assessors to help evaluate our Cybersecurity Program, including [removed: our control measures, and to assist in] conducting [added: penetration testing and vulnerability,] risk and maturity assessments.

We also actively engage with industry experts, regulatory agencies, advocacy groups, [added: industry peers,] intelligence and law enforcement communities as part of our continuing efforts to evaluate and enhance the effectiveness of our Cybersecurity [removed: Program.][added: Program and to stay abreast of the emerging cybersecurity landscape.]

[removed: We use a range of defenses to help protect against cybersecurity threats and to work to secure our assets, reduce detection time and improve recoverability, such as] the ongoing monitoring of our [removed: systems, including] [added: systems (including] with the assistance of [removed: third party vendors,] [added: third-party vendors),] conducting [removed: routine] [added: response and recovery] exercises with employees and senior [removed: management, including] [added: management (including] our executive [removed: officers,] [added: officers)] to promote awareness [added: of related matters] and improve internal processes, and engaging with [removed: proxy advisors and] external cybersecurity rating agencies that assess our cyber [removed: risk to improve our internal evaluations and vulnerability management processes.][added: risk.]

Cybersecurity matters are generally managed by a combination of working groups [removed: led by senior management] that report to the cybersecurity [removed: steering] [added: compliance] committee [removed: or] [added: and ultimately the] cybersecurity executive oversight committee, as [removed: appropriate, on matters such as, among other things, enterprise level cybersecurity initiatives and directives, threat intelligence and product cybersecurity risks and remediations.][added: appropriate.]

Our cross functional cybersecurity [removed: steering] [added: compliance] committee, which is led by the CISO, is composed of members of senior management, including the [removed: Chief Information Officer,] [added: CIO,] and reviews matters such as [removed: product security] [added: cybersecurity] escalations, critical remediations and disclosure recommendations.

[removed: steering] [added: The output from the cybersecurity compliance] committee meetings is discussed at meetings of Baxter’s cybersecurity executive oversight committee, which is led by the CISO and includes the [removed: Chief Executive Officer, Chief Financial Officer, General Counsel, Chief Compliance & Trust Officer] [added: CIO] and [removed: our business segment presidents.][added: other members of management.]

The Audit Committee is [removed: also] responsible for the oversight of [removed: any] [added: certain significant] cybersecurity [removed: incident,] [added: incidents,] including ones related to our products and [removed: services.][added: services and receives related updates from management on those incidents.]

[removed: Additionally, the] [added: The] full Board [removed: generally] receives periodic updates on information technology and cybersecurity matters from [added: company] management [added: (including the CIO] and [added: CISO) and] external [removed: advisors.][added: advisors from time to time and the Audit Committee receives periodic updates (including as part of continuing director education) on the evolving cybersecurity landscape and regulatory reporting requirements.]

The CISO maintains and annually updates a Cybersecurity Incident Response Plan which is a guide for our Cyber Security Incident Response Team [added: and business] to respond [removed: effectively and efficiently] to cybersecurity incidents in a coordinated [removed: manner in the interest of minimizing the risk of harm to our patients, customers, operations, partners, employees and third parties, consistent with our legal obligations.][added: manner.]

Cybersecurity risks and threats, including [removed: as a result of] any previous cybersecurity incidents, have not materially impacted [removed: and are not reasonably expected to materially impact] us or our operations to date.

However, we [removed: recognize the ever-evolving cyber risk landscape and] cannot provide any [removed: assurances] [added: assurance] that we will not be subject to a material cybersecurity incident in the future.

[removed: Risk Factors “Breaches] [added: See "Risks Relating to Our Operations—Breaches] and breakdowns affecting our information technology systems or protected information, including from cyber security breaches and data leakage, could have a material adverse effect on our business, results of operations, financial condition, cash flows, reputation and competitive position” [removed: for a discussion of cybersecurity-related risks.][added: in Item 1A.]

Cybersecurity risks identified in the Cybersecurity Program are integrated into our Enterprise Risk Management Program.

In addition, the Cybersecurity Program seeks to incorporate consideration of cybersecurity risk into our product development, business strategy, financial planning and capital allocation decisions.

The Cybersecurity Program is currently overseen by the Board of Directors (Board) and is managed by a dedicated Chief Information Security Officer (CISO), who in turn reports to the Chief Information Officer (CIO), who currently reports to the CEO.

Our current CIO has over 30 years of experience in information technology and has served in a number of professional services leadership roles, including as CIO over the past 15 years at three companies.

We use a range of defenses to help protect against cybersecurity threats and to work to secure our assets, reduce the time it takes to detect a cybersecurity threat and improve our recoverability capabilities.

These defenses include

In addition, to help promote privacy and security awareness throughout the company, the CISO maintains a Cyber Awareness and Engagement Program.

As part of this program, all employees with a Baxter email address receive annual training on the recognition and prevention of cybersecurity threats as well as training on how to report suspicious activity or potential breaches through the appropriate channels.

Our Cyber Awareness team communicates cybersecurity best practices to our employees through internal communications, including the company intranet, newsletters and global virtual seminars, and also hosts ongoing cybersecurity awareness campaigns, including phishing simulations.

Further, our Third-Party Risk Management Program utilizes a managed service that uses a standard framework to help identify, assess and monitor potential cybersecurity risks posed by third parties.

Third-party cybersecurity risks (including reputational ones) are assessed by evaluating the third party's security practices (including those associated with data protection), compliance with applicable regulations and planning associated with business continuity and incident detection and response.

In February 2024, we amended the charters of the Audit Committee and Quality and Regulatory Compliance (QRC) Committee of our Board to provide for the realignment of oversight over the company’s innovation strategy and cybersecurity to the full Board, as these responsibilities now sit within the vertically integrated segments and are part of the business strategies themselves.

The Board oversees information technology functions generally, including product related cybersecurity matters (which had previously been subject to the oversight of the QRC Committee).

Consistent with this oversight responsibility, the Audit Committee is responsible for reviewing proposed disclosures in connection with any material cybersecurity incident consistent with our disclosure obligations under Item 1.05 of Form 8-K.

Additionally, the CISO, in partnership with a third-party consultant, facilitates periodic cyber-crisis tabletop exercises with members of senior management (including our executive officers) to help us prepare for the occurrence of a significant cybersecurity event and our related response activities.

Risk Factors of this Annual Report on Form 10-K for a discussion of cybersecurity-related risks.

In addition, to help promote privacy and security awareness throughout the company, all employees with a valid Baxter email address receive annual training and access to virtual events and updated materials.

Further, our Third-Party Risk Management Program includes assessment and monitoring of security standards and control procedures for external suppliers and vendors, with enhanced engagement or internal controls depending on the results of the assessment.

The output from the

The cybersecurity executive oversight committee meets quarterly, oversees enterprise and cybersecurity risk management and reports to the Audit Committee and QCT Committee of the Board.

The Audit Committee currently oversees our information technology functions generally, including non-product-related cybersecurity matters, and the QCT Committee oversees product or service-based information technology matters, including with respect to product cybersecurity matters.

Both committees receive updates from management on cybersecurity-related topics within their purview throughout the year.

See Item 1A.

We manage our global operations based on [removed: four] [added: three reportable] segments: Medical Products [removed: and] [added: &] Therapies, Healthcare Systems [removed: and] [added: &] Technologies, [removed: Pharmaceuticals] and [removed: Kidney Care.][added: Pharmaceuticals.]

| Segments | | | Location | | | Owned/Leased | | | [added: | | |]

| Medical Products [removed: and] [added: &] Therapies | | | | | | | | | [added: | | |]

| | | | Aibonito, Puerto Rico | | | Leased | | | [added: | | |]

| | | | Alliston, Canada | | | Owned | | | [added: | | |]

| | | | Cali, Colombia | | | Owned | | | [added: | | |]

| | | | Cartago, Costa Rica | | | Owned | | | [added: | | |]

| | | | Haina, Dominican Republic | | | Leased | | | [added: | | |]

| | | | Hayward, California | | | Leased | | | [added: | | |]

| | | | Cleveland, Mississippi | | | Leased | | | [added: | | |]

| | | | Medina, New York | | | Leased | | | [added: | | |]

| | | | Jayuya, Puerto Rico | | | Leased | | | [added: | | |]

| | | | Sao Paulo, Brazil | | | Owned | | | [added: | | |]

| | | | North Cove, North Carolina | | | Owned | | | [added: | | |]

| | | | St. Paul, Minnesota | | | Leased | | | [added: | | |]

| | | | Irvine, California | | | Owned | | | [added: | | |]

| | | | Toongabbie, Australia | | | Owned | | | [added: | | |]

| | | | Lessines, Belgium | | | Owned | | | [added: | | |]

| | | | Marsa, Malta | | | [removed: Owned] [added: Leased] | | | [added: | | |]

| | | | Sabinanigo, Spain | | | Owned | | | [added: | | |]

| | | | San Vittore, Switzerland | | | [removed: Owned] [added: Leased] | | | [added: | | |]

| | | | Thetford, United Kingdom | | | Owned | | | [added: | | |]

| | | | Tel Aviv, Israel | | | Leased | | | [added: | | |]

| | | | Elstree, United Kingdom | | | Leased | | | [added: | | |]

| Healthcare Systems [removed: and] [added: &] Technologies | | | | | | | | | [added: | | |]

| | | | Batesville, Indiana | | | Owned | | | [added: | | |]

| | | | Charleston, South Carolina | | | Leased | | | [added: | | |]

| | | | Milwaukee, Wisconsin | | | Owned | | | [added: | | |]

| | | | Skaneateles Falls, New York | | | Owned | | | [added: | | |]

| | | | Suzhou, China | | | Leased | | | [added: | | |]

| | | | Taicang, China | | | Leased | | | [added: | | |]

| | | | Pluvigner, France | | | Owned | | | [added: | | |]

| | | | Saalfeld, Germany | | | Owned | | | [added: | | |]

| | | | Tijuana, Mexico | | | [removed: Owned] [added: Leased] | | | [added: | | |]

| | | | Monterrey, Mexico | | | Owned | | | [added: | | |]

| | | | Luleå, Sweden | | | Owned | | | [added: | | |]

| Pharmaceuticals | | | | | | | | | [added: | | |]

| | | | Guayama, Puerto Rico | | | Owned | | | [added: | | |]

| | | | Round Lake, Illinois | | | Owned | | | [added: | | |]

| | | | Ahmedabad, India | | | Owned | | | [added: | | |]

| | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | |

| | | | St. Paul, Minnesota | | | Leased | | | | | |

| | | | | | | | | | | | |

| | | | | | | | | | | | |

| | | | | | | | | | | | |

Rico; and North Cove, North Carolina.

| | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | Mountain View, California | | | Leased | | |

| | | | Acton, Massachusetts | | | Leased | | |

| | | | Cary, North Carolina | | | Leased | | |

| Kidney Care | | | | | | | | |

| | | | Cuernavaca, Mexico | | | Owned | | |

| | | | Pesa, Mexico | | | Leased | | |

| | | | Shanghai, China | | | Owned | | |

| | | | Suzhou, China | | | Owned | | |

| | | | Woodlands, Singapore | | | Owned/Leased(2) | | |

| | | | Amata, Thailand | | | Owned | | |

| | | | Tianjin, China | | | Owned | | |

| | | | Miyazaki, Japan | | | Owned | | |

| | | | Castlebar, Ireland | | | Owned | | |

| | | | Grosotto, Italy | | | Owned | | |

| | | | Hechingen, Germany | | | Leased | | |

| | | | Liverpool, United Kingdom | | | Leased | | |

| | | | Lund, Sweden | | | Leased | | |

| | | | Medolla, Italy | | | Owned | | |

| | | | Meyzieu, France | | | Owned | | |

| | | | Rostock, Germany | | | Leased | | |

| | | | Sondalo, Italy | | | Owned | | |

| | | | Swinford, Ireland | | | Owned | | |

| | | | Tunis, Tunisia | | | Owned | | |

| | | | Dammam, Saudi Arabia | | | Owned | | |

__________________________________________________________________

(2)We own the facility located at Woodlands, Singapore and lease the property upon which it rests.

As of February [removed: 8, 2024,] [added: 21, 2025,] the following serve as Baxter’s executive officers:

[removed: Almeida*,] [added: Mason*, Ph.D.,] age [removed: 61,] [added: 69,] is [removed: Chair,] [added: Executive Vice] President and Chief [removed: Executive Officer,] [added: Human Resources Officer] having served in that capacity since [removed: January 2016.][added: 2006.]

*James Borzi*, age [removed: 61,] [added: 62,] is Executive Vice President and Chief Supply Chain Officer.

Prior to joining GE Healthcare, he served in various manufacturing operations leadership roles at Becton [removed: Dickinson (BD),] [added: Dickinson,] including Executive Vice President of Global Operations and Chief Supply Chain Officer from 2013 to 2019.

Grade,* age [removed: 53,] [added: 54,] is Executive Vice [removed: President and] [added: President,] Chief Financial [added: Officer and Interim Chief Accounting] Officer.

Mr. Grade joined Baxter [removed: in 2023] following a 25-year career with Sysco Corporation (Sysco), the world’s global foodservice leader.

*Heather Knight,* age [removed: 52,] [added: 53,] is Executive Vice [removed: President] [added: President, Chief Operating Officer] and [added: Interim] Group President, Medical Products & Therapies.

She [removed: previously served] [added: joined Baxter in 2019] as [removed: General Manager,] [added: general manager,] U.S. Hospital [removed: Products from 2019 to 2021.][added: Products.]

*Reazur Rasul*, age [removed: 47,] [added: 48,] is Executive Vice President and Group President, Healthcare Systems & Technologies.

[added: Prior to that, Mr.] Rasul served as General Manager for the Acute Therapies & Medication Delivery businesses from 2021 to 2022, and General Manager, for the Acute Therapies business from 2017 to 2021.

Rosenbloom*, age [removed: 64,] [added: 65,] is Executive Vice President and General Counsel.

*Alok Sonig*, age [removed: 51,] [added: 52,] is Executive Vice President and Group President, Pharmaceuticals.

He was appointed to his [removed: new] role in 2023 after serving as President since 2022.

*Brent Shafer*, age 67, is Chair and Interim Chief Executive Officer.

He was appointed to his role on February 3, 2025, in connection with Mr. José Almeida's separation from Baxter.

He is the former Chair and Chief Executive Officer of Cerner Corporation (Cerner), a leading provider of various health information technologies, ranging from medical devices to electronic health records to hardware, serving in this role from 2018 to 2021.

Prior to Cerner, Mr. Shafer held a number of roles at Philips, including Chief Executive Officer of Philips North America, a leader in diagnostic imaging, image-guided therapy, patient monitoring and health informatics, as well as in consumer health and home care.

Mr. Shafer was also the Chief Executive Officer of Philips Home Healthcare Solution business.

Before joining Philips, Mr. Shafer was Vice President and General Manager of Hillrom’s Patient Care Environment Division and worked at GE Medical Systems where he served in key positions in sales, marketing, and general management.

Mr. Shafer has also held senior roles at Hewlett Packard’s Medical Products Group and Johnson & Johnson.

Mr. Shafer currently serves as a director of Tactile Systems Technology, Inc. and Veracyte, Inc.

Mr. Grade joined Baxter in 2023 as Executive Vice President, Chief Financial Officer.

Additionally, he was elected as our interim Chief Accounting Officer and Principal Accounting Officer (CAO) in September 2024 and will cease serving in that interim capacity as of February 21, 2025.

She was appointed to her role on February 3, 2025.

Ms. Knight has led our Medical Products & Therapies segment since 2023.

From 2021 through 2023, she served as president of our former Americas region and our Acute Therapies, Clinical Nutrition, and Medication Delivery business units.

Throughout her 30-year career in the healthcare industry, Ms. Knight has held numerous roles of increasing leadership in general management, global upstream and commercial capacities at companies including Medtronic plc (Medtronic), Covidien plc, Tyco International plc and Kendall Healthcare

Products Company.

Prior to joining Baxter, she most recently served as vice president and general manager in Medtronic's Surgical Innovations business.

Ms. Knight earned her bachelor's degree in Biological Sciences from the University of Buffalo and completed the Executive Sales and Management program from the University of Chicago Booth School of Management.

Ms. Knight currently serves as a director of Waters Corporation.

*José E.

He began serving as an executive officer of Baxter in October 2015.

He served as Senior Advisor with The Carlyle Group from May 2015 until October 2015.

Previously, he served as the Chairman, President and Chief Executive Officer of Covidien plc (Covidien), a global health care products company, from March 2012 to January 2015, prior to the acquisition of Covidien by Medtronic plc (Medtronic), and President and Chief Executive Officer of Covidien from July 2011 to March 2012.

Mr. Almeida served in other executive roles with Covidien (formerly Tyco Healthcare (Tyco)) between April 2004 and June 2011.

Mr. Almeida currently serves on the Board of Directors of Bank of America.

He previously served as a member of the Board of Directors of Ortho-Clinical Diagnostics, Walgreens Boots Alliance, Inc., and the board of trustees of Partners in Health.

She was appointed to her role leading Medical Products & Therapies in 2023 after serving as President, Acute Therapies, Clinical Nutrition, Medication Delivery, Latin America and Canada since 2021.

Ms. Knight joined Baxter in 2019 from Medtronic plc (Medtronic), where she served as Vice President/General Manager of the global gynecologic health, colorectal health and hernia businesses from 2016 to 2019.

She has nearly 30 years of experience across the pharmaceutical and medical device industries in roles of increasing responsibility.

Prior to joining Medtronic, she held key commercial leadership positions at Kendal Healthcare, Tyco Healthcare, and Covidien.

Ms. Knight is a member of the Board of Chanell Medsystems, a medical device company dedicated to empowering every woman to take control of her health journey and live her best life, and Technovation, a global technology education nonprofit that inspires girls to be leaders and problem solvers in their lives and their community.

She previously served as a member of the Board of Titan Medical Inc.

Mason*, Ph.D., age 68, is Executive Vice President and Chief Human Resources Officer having served in that capacity since 2006.

Prior to that, Mr.

*Christopher A.

Toth*, age 44, is Executive Vice President and Group President, Kidney Care.

Mr. Toth assumed his responsibilities at Baxter in June 2023 and has been selected as the Chief Executive Officer of the independent company to emerge from the proposed separation of our Kidney Care business into an independent company.

Before joining Baxter, he served as Chief Executive Officer of Varian, a Siemens Healthineers Company from 2021 to 2023.

Prior to this, he held numerous executive leadership roles across a two-decade career with Varian, including as President and Chief Operating Officer from 2019 to 2021, President of Varian Oncology Systems from 2018 to 2019; and President of Global Commercial and Field Operations.

Mr. Toth was previously a member of the U.S. India Strategic Partnership Forum Board and President Biden’s Advisory Council on Doing Business in Africa.

During the fourth quarter of [removed: 2023,] [added: 2024,] we did not repurchase any shares under this authority.

The remaining authorization under this program totaled approximately $1.30 billion at December 31, [removed: 2023.][added: 2024.]

As of [removed: January 31, 2024,] [added: February 13, 2025,] there were [removed: 19,117] [added: 18,094] holders of record of our common stock.

[removed: ![Five Year] [added: ![5 year] TSR [removed: Graph.gif](https://www.sec.gov/Archives/edgar/data/10456/000162828024003932/bax-20231231_g2.gif)][added: table.jpg](https://www.sec.gov/Archives/edgar/data/10456/000162828025007201/bax-20241231_g2.jpg)]

| as of December 31 (in millions, except share information) | | | [removed: 2023] [added: 2024] | | | | | | [removed: 2022] [added: 2023] | | |

| Cash and cash equivalents | | | $ | [removed: 3,194] [added: 1,764] | | | | | $ | [removed: 1,718] [added: 3,078] | |

| Prepaid expenses and other current assets | | | [removed: 892 | | |] [added: $] | [added: 51] | | [removed: 857] [added: $] | [added: 53] | |

| Current assets of discontinued operations | | | [removed: —] [added: 2,611] | | | | | | [removed: 186] [added: 2,179] | | |

| Total current assets | | | [removed: 9,600] [added: 8,853] | | | | | | [removed: 8,011] [added: 9,600] | | |

| Property, plant and equipment, net | | | [removed: 4,433] [added: $] | [added: 18] | | | | | [removed: 4,695] [added: $] | [added: 20] | |

| Other intangible assets, net | | | [removed: 6,079] [added: 5,223] | | | | | | [removed: 6,793] [added: 5,918] | | |

| Operating lease right-of-use assets | | | [removed: 524] [added: 306] | | | | | | [removed: 541] [added: 336] | | |

| Other non-current assets | | | [removed: 1,126] [added: 22] | | | | | | [removed: 1,109] [added: 26] | | |

| Non-current assets of discontinued operations | | | [removed: —] [added: 2,500] | | | | | | [removed: 686] [added: 2,949] | | |

| Total assets | | | $ | [removed: 28,276] [added: 25,782] | | | | | $ | [removed: 28,287] [added: 28,276] | |

| Short-term debt | | | $ | [removed: —] [added: 2,126] | | | | | $ | [removed: 299] [added: —] | |

| Current maturities of long-term debt and finance lease obligations | | | [removed: 2,668] [added: $] | [added: 2] | | | | | [removed: 1,105] [added: $] | [added: 2] | |

| Accounts payable | | | [removed: 1,241] [added: 112] | | | [added: 92] | | | [removed: 1,110] [added: (67)] | | |

| Accrued expenses and other current liabilities | | | [removed: 2,594] [added: $] | [added: 80] | | | | | [removed: 2,170] [added: $] | [added: 92] | |

| Current liabilities of discontinued operations | | | [removed: —] [added: 930] | | | | | | [removed: 61] [added: 1,040] | | |

| Total current liabilities | | | [removed: 6,503] [added: 6,511] | | | | | | [removed: 4,745] [added: 6,503] | | |

| Long-term debt and finance lease obligations, less current portion | | | [removed: 11,130] [added: 10,374] | | | | | | [removed: 15,232] [added: 11,089] | | |

| Operating lease liabilities | | | [removed: 438 | | |] [added: 80] | | | [removed: 447] [added: 92] | | |

| Other non-current liabilities | | | [removed: 1,737 | | |] [added: 40] | | | [removed: 1,848] [added: 41] | | |

| Non-current liabilities of discontinued operations | | | [removed: —] [added: 554] | | | | | | [removed: 120] [added: 551] | | |

| Total liabilities | | | [removed: 19,808] [added: 18,758] | | | | | | [removed: 22,392] [added: 19,808] | | |

| Common stock, $1 par value, authorized 2,000,000,000 shares, issued 683,494,944 shares in [removed: 2023] [added: 2024] and [removed: 2022] [added: 2023] | | | 683 | | | | | | 683 | | |

| Common stock in treasury, at cost, [removed: 175,861,893] [added: 172,567,636] shares in [removed: 2023] [added: 2024] and [removed: 179,062,594] [added: 175,861,893] shares in [removed: 2022] [added: 2023] | | | [removed: (11,230)] [added: (11,059)] | | | | | | [removed: (11,389)] [added: (11,230)] | | |

| Additional contributed capital | | | [removed: 6,389] [added: 6,421] | | | | | | [removed: 6,322] [added: 6,389] | | |

| Retained earnings | | | [removed: 16,114] [added: 14,929] | | | | | | [removed: 14,050] [added: 16,114] | | |

| Accumulated other comprehensive income (loss) | | | [removed: (3,554)] [added: (4,010)] | | | | | | [removed: (3,833)] [added: (3,554)] | | |

| Total Baxter stockholders’ equity | | | [removed: 8,402] [added: 6,964] | | | | | | [removed: 5,833] [added: 8,402] | | |

| Noncontrolling interests | | | [removed: 66] [added: 60] | | | | | | [removed: 62] [added: 66] | | |

| Total equity | | | [removed: 8,468] [added: 7,024] | | | | | | [removed: 5,895] [added: 8,468] | | |

| Total liabilities and equity | | | $ | [removed: 28,276] [added: 25,782] | | | | | $ | [removed: 28,287] [added: 28,276] | |

| years ended December 31 (in millions, except per share data) | | | [removed: 2023] [added: 2024] | | | [removed: 2022] [added: 2023] | | | [removed: 2021] [added: 2022] | | |

| Selling, general and administrative expenses | | | [removed: 3,946] [added: 2,967] | | | [removed: 3,859] [added: 2,953] | | | [removed: 2,845] [added: 3,097] | | |

| Research and development expenses | | | [removed: 667] [added: 216] | | | [removed: 602] [added: 184] | | | [removed: 531] [added: 91] | | | [added: | | |]

| Goodwill impairments | | | [removed: —] [added: 425] | | | [removed: 2,812] [added: —] | | | [removed: —] [added: 2,812] | | |

| Other operating expense (income), net | | | [removed: (28)] [added: (12)] | | | [removed: 36] [added: (28)] | | | [removed: (6)] [added: 35] | | |

| Interest expense, net | | | [removed: 442] [added: 13] | | | [removed: 395] [added: 3] | | | [removed: 193] [added: 1] | | | [added: | | | — | | | (1) | | | — | | | | | | 13 | | | 2 | | | 1 | | |]

| Other (income) expense, net | | | [removed: 51] [added: (38)] | | | [removed: 12] [added: 26] | | | [removed: 41] [added: 9] | | |

| Income (loss) from continuing operations before income taxes | | | [removed: (103)] [added: (289)] | | | [removed: (2,650)] [added: 242] | | | [removed: 1,116] [added: (3,248)] | | |

| Income tax (benefit) expense | | | [removed: (34)] [added: 37] | | | [removed: 4] [added: 61] | | | [removed: 83] [added: (135)] | | |

| Accounts receivable, net of allowance of $71 in 2024 and $62 in 2023 | | | 1,679 | | | | | | 1,719 | | |

| Inventories | | | 2,046 | | | | | | 1,918 | | |

| Goodwill | | | 5,275 | | | | | | 5,793 | | |

| Net sales | | | $ | 10,636 | | $ | 10,360 | | $ | 10,057 | |

| Cost of sales | | | 6,652 | | | 6,210 | | | 6,508 | | |

| Gross margin | | | 3,984 | | | 4,150 | | | 3,549 | | |

| Research and development expenses | | | 590 | | | 518 | | | 450 | | |

| Operating income (loss) | | | 14 | | | 707 | | | (2,845) | | |

| Interest expense, net | | | 341 | | | 439 | | | 394 | | |

| Less: Net income attributable to noncontrolling interests included in discontinued operations | | | 11 | | | 7 | | | 11 | | |

| Basic | | | $ | (0.64) | | $ | 0.36 | | $ | (6.18) | |

| Diluted | | | $ | (0.64) | | $ | 0.36 | | $ | (6.18) | |

| Basic | | | $ | (0.63) | | $ | 4.89 | | $ | 1.35 | |

| Diluted | | | $ | (0.63) | | $ | 4.87 | | $ | 1.35 | |

| Diluted | | | $ | (1.27) | | $ | 5.23 | | $ | (4.83) | |

| Income (loss) from discontinued operations, net of tax | | | (312) | | | 2,482 | | | 692 | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Balance as of December 31, 2024 | | | 683 | | | $ | 683 | | 173 | | | $ | (11,059) | | $ | 6,421 | | $ | 14,929 | | $ | (4,010) | | $ | 6,964 | | $ | 60 | | $ | 7,024 | |

| Depreciation and amortization | | | 997 | | | 984 | | | 1,072 | | |

| Deferred income taxes | | | (262) | | | (256) | | | (260) | | |

| Stock compensation | | | 114 | | | 115 | | | 140 | | |

| Inventories | | | (201) | | | (128) | | | (198) | | |

| Capital expenditures | | | (446) | | | (432) | | | (377) | | |

| Acquisitions of developed technology and investments | | | (14) | | | (4) | | | (258) | | |

| Proceeds from sale of marketable equity securities | | | 34 | | | — | | | — | | |

| Less cash and cash equivalents of discontinued operations | | | 648 | | | 116 | | | 97 | | |

| Cash, cash equivalents and restricted cash of continuing operations | | | $ | 1,766 | | $ | 3,082 | | $ | 1,625 | |

| Cash and cash equivalents | | | $ | 1,764 | | $ | 3,078 | | $ | 1,621 | |

Our business is comprised of three reportable segments: Medical Products & Therapies, Healthcare Systems & Technologies, and Pharmaceuticals which are described in Note 18.

On August 12, 2024, we entered into an Equity Purchase Agreement (EPA ) with certain affiliates of Carlyle Group Inc. (Carlyle) to sell our Kidney Care business.

That business, which is now known as Vantive Health LLC (Vantive) is comprised of our former Kidney Care segment and provides chronic and acute dialysis therapies and services, including peritoneal dialysis, hemodialysis, continuous renal replacement therapies, and other organ support therapies.

On January 31, 2025, we completed the sale of our Kidney Care business to Carlyle for an aggregate purchase price of $3.80 billion in cash, subject to certain closing cash, working capital and debt adjustments.

After giving effect to certain adjustments, we received approximately $3.71 billion pre-tax cash proceeds at closing of the transaction with the net after tax proceeds currently estimated to be approximately $3.4 billion, subject to certain post-closing adjustments.

We determined that our Kidney Care business met the criteria to be classified as held-for-sale in August 2024, and we also concluded that it met the conditions to be reported as a discontinued operation at that time.

Accordingly, our Kidney Care business is reported in discontinued operations in the accompanying consolidated financial systems, and our prior period results have been adjusted to reflect discontinued operations presentation.

Hurricane Helene

In September 2024, Hurricane Helene, which brought significant rain and extensive flooding to Western North Carolina, caused damage to certain of our assets at our North Cove facility in Marion, N.C. and disrupted operations at that facility.

Since then, we have actively worked with our customers, regulators and other stakeholders to manage inventory and minimize disruption to patient care as we worked towards resuming our North Cove manufacturing operations.

Our insurance policies generally cover the repair or replacement of our assets that suffer loss or damage, less applicable deductibles and subject to any coverage limits and exclusions.

Our insurance policies also provide coverage for interruption to our business, including lost profits, and reimbursement for other expenses and costs that have been incurred relating to the damages and losses suffered.

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Accounts receivable, net of allowance of $129 in 2023 and $114 in 2022 | | | 2,690 | | | | | | 2,571 | | |

| Inventories | | | 2,824 | | | | | | 2,679 | | |

| Goodwill | | | 6,514 | | | | | | 6,452 | | |

| Net sales | | | $ | 14,813 | | $ | 14,506 | | $ | 12,146 | |

| Cost of sales | | | 9,838 | | | 9,440 | | | 7,426 | | |

| Gross margin | | | 4,975 | | | 5,066 | | | 4,720 | | |

| Operating income (loss) | | | 390 | | | (2,243) | | | 1,350 | | |

| Basic | | | $ | (0.15) | | $ | (5.29) | | $ | 2.04 | |

| Diluted | | | $ | (0.15) | | $ | (5.29) | | $ | 2.01 | |

| Basic | | | $ | 5.40 | | $ | 0.46 | | $ | 0.52 | |

| Diluted | | | $ | 5.40 | | $ | 0.46 | | $ | 0.52 | |

| Diluted | | | $ | 5.25 | | $ | (4.83) | | $ | 2.53 | |

| Balance as of January 1, 2021 | | | 683 | | | $ | 683 | | 179 | | | $ | (11,051) | | $ | 6,043 | | $ | 16,328 | | $ | (3,314) | | $ | 8,689 | | $ | 37 | | $ | 8,726 | |

| Depreciation and amortization | | | 1,263 | | | 1,380 | | | 867 | | |

| Deferred income taxes | | | (499) | | | (230) | | | (161) | | |

| Stock compensation | | | 133 | | | 153 | | | 146 | | |

| Losses on debt extinguishments | | | — | | | — | | | 5 | | |

| Inventories | | | (114) | | | (367) | | | (27) | | |

| Accounts payable | | | 107 | | | (73) | | | 105 | | |

| Other | | | (31) | | | (106) | | | (137) | | |

| Capital expenditures | | | (692) | | | (620) | | | (691) | | |

| Acquisitions, net of cash acquired, and investments | | | (6) | | | (263) | | | (10,502) | | |

| Issuances of debt | | | — | | | — | | | 11,903 | | |

| Purchases of treasury stock | | | — | | | (32) | | | (600) | | |

| Debt issuance costs | | | — | | | — | | | (98) | | |

| Cash and cash equivalents | | | $ | 3,194 | | $ | 1,718 | | $ | 2,951 | |

Our segments were changed during the third quarter of 2023 to align with our new operating model and prior period segment disclosures have been revised to reflect the new segment presentation.

In January 2023, we announced our intention to separate our Kidney Care business into a new, publicly traded company.

While we continue to evaluate all strategic options in the interest of maximizing stockholder value, we continue to progress towards our current target of July 2024 for completion of the proposed spinoff of this business.

We expect to continue to experience some of these and other challenges related to our supply chain in future periods.

These challenges, including the unavailability of certain raw materials and component parts, have also had a negative impact on our sales for certain product categories due to our inability to fully satisfy demand.

While we have seen improvements in the availability of certain component parts and improved pricing of certain raw materials, these challenges have not completely subsided and may continue to have a negative impact on our sales in the future.

Reclassifications

Certain prior year amounts have been reclassified to conform to the current year presentation.

Goodwill is not amortized but is subject to an impairment review annually and whenever indicators of impairment exist.

of other assets and liabilities.

Option premiums or net premiums paid are initially recorded as assets and reclassified to OCI over the life of the option, and then recognized in earnings consistent with the underlying hedged item.

variable payments even though the lessor expects the arrangement will be profitable overall.

In the fourth quarter of 2021, we adopted ASU 2021-08, Business Combinations - Accounting for Contract Assets and Contract Liabilities from Contracts with Customers.

We have established disclosure controls and procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934 (the Exchange Act) is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and that such information is communicated to our management, including our [added: Interim] Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

Our management, with the participation of our [added: Interim] Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of December 31, [removed: 2023.][added: 2024.]

Based on that evaluation, our [added: Interim] Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of December 31, [removed: 2023.][added: 2024.]

Management performed an assessment of the effectiveness of our internal control over financial reporting as of December 31, [removed: 2023.][added: 2024.]

Based on that assessment under the framework in *Internal Control-Integrated Framework (2013)*, management concluded that our internal control over financial reporting was effective as of December 31, [removed: 2023.][added: 2024.]

The effectiveness of our internal control over financial reporting as of December 31, [removed: 2023] [added: 2024] has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which appears herein.

There have been no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended December 31, [removed: 2023] [added: 2024] that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Refer to information under the captions entitled “Corporate Governance at Baxter International Inc. — Proposal 1 — Election of Directors,” “— Board of Directors — Nomination of Directors,” “— Committees of the Board — Audit Committee,” “— Board Responsibilities — Code of Conduct,” [removed: and] “Ownership of Baxter Stock — Delinquent Section 16(a) Reports” [added: and "Compensation Discussion and Analysis — Additional Compensation Governance — Prohibitions on Trading; No-Hedging"] in Baxter’s definitive proxy statement to be filed with the Securities and Exchange Commission and delivered to stockholders in connection with the Annual Meeting of Stockholders expected to be held on May [removed: 7, 2024] [added: 6, 2025] (the Proxy Statement), all of which information is incorporated herein by reference.

Refer to information under the captions entitled “Executive Compensation,” [added: "—Compensation] and [added: Human Capital Committee Report,"] “Corporate Governance at Baxter International Inc.—Director [removed: Compensation”] [added: Compensation,” and “— Committees of the Board — CHC Committee Interlocks and Insider Participation”] in the Proxy Statement, all of which information is incorporated herein by reference.

The following table provides information relating to shares of common stock that may be issued under our existing equity compensation plans as of December 31, [removed: 2023.][added: 2024.]

| Equity Compensation Plans [added: Not] Approved by Stockholders | | | [removed: 24,286,290] [added: —] | | | | | | [removed: (1)] | | | | | | $ | [removed: 59.35] [added: —] | | | | | [removed: (2)] | | | | | | [removed: 29,535,570] [added: —] | | | | | | [removed: (3)] | | |

| Equity Compensation Plans [removed: Not] Approved by Stockholders | | | [removed: 52,245] [added: 25,169,949] | | | | | | [removed: (4)] [added: (1)] | | | | | | $ | [removed: —] [added: 60.15] | | | | | [added: (2)] | | | | | | [removed: —] [added: 55,869,497] | | | | | | [added: (3)] | | |

(3)Includes (i) [removed: 9,040,834] [added: 7,676,283] shares of common stock available for purchase under the Employee Stock Purchase Plan and (ii) [removed: 20,494,735] [added: 48,191,214] shares of common stock available under the 2021 Incentive Plan.

[removed: (5)Includes] [added: (4)Includes] outstanding awards of [removed: 19,467,050] [added: 17,381,375] stock options, which have a weighted-average exercise price of [removed: $59.35] [added: 60.15] and a weighted-average remaining term of [removed: 5.3] [added: 3.83] years, [removed: 4,005,462] [added: 6,940,259] shares of common stock issuable upon vesting of RSUs, and [removed: 729,130] [added: 602,107] shares of common stock reserved for issuance in connection with PSU grants.

| Total | | | 25,169,949 | | | | | | (4) | | | | | | $ | 60.15 | | | | | (2) | | | | | | 55,869,497 | | | | | | | | |

| Total | | | 24,338,535 | | | | | | (5) | | | | | | $ | 59.35 | | | | | (2) | | | | | | 29,535,570 | | | | | | | | |

(4)Includes 52,245 of outstanding replacement RSUs granted to holders of Hillrom equity awards at closing of the Hillrom acquisition.

These replacement RSUs were approved by our Board of Directors, not our stockholders.

Refer to the information under the caption entitled “Corporate Governance at Baxter International Inc.—Board of [added: Directors—Director Independence,” “— Proposal 1 — Election of] Directors,” [removed: “Corporate Governance at Baxter International Inc.—Board] [added: “— Committees] of [removed: Directors—Director Independence”] [added: the Board,”] and [removed: “Corporate Governance at Baxter International Inc.—Board] [added: “—Board] Responsibilities—Certain Relationships and Related Person Transactions” in the Proxy Statement, all of which information is incorporated herein by reference.

| | | | [Consolidated Balance [removed: Sheets](#i07617ba54a2545699a185a64dfa20a99_70)] [added: Sheets](#i5f53b2f53b854e0d802df7b875649210_109)] | | | 48 | | |

| | | | [Consolidated Statements of Income [removed: (Loss)](#i07617ba54a2545699a185a64dfa20a99_73)] [added: (Loss)](#i5f53b2f53b854e0d802df7b875649210_112)] | | | 49 | | |

| | | | [Consolidated Statements of Comprehensive Income [removed: (Loss)](#i07617ba54a2545699a185a64dfa20a99_76)] [added: (Loss)](#i5f53b2f53b854e0d802df7b875649210_115)] | | | 50 | | |

| | | | [Consolidated Statements of Changes in [removed: Equity](#i07617ba54a2545699a185a64dfa20a99_82)] [added: Equity](#i5f53b2f53b854e0d802df7b875649210_121)] | | | 51 | | |

| | | | [Consolidated Statements of Cash [removed: Flows](#i07617ba54a2545699a185a64dfa20a99_85)] [added: Flows](#i5f53b2f53b854e0d802df7b875649210_124)] | | | 52 | | |

| | | | [Notes to Consolidated Financial [removed: Statements](#i07617ba54a2545699a185a64dfa20a99_88)] [added: Statements](#i5f53b2f53b854e0d802df7b875649210_127)] | | | 54 | | |

| | | | [Report of Independent Registered Public Accounting Firm (PCAOB [removed: ID](#i07617ba54a2545699a185a64dfa20a99_145) [](#i07617ba54a2545699a185a64dfa20a99_145)238[)](#i07617ba54a2545699a185a64dfa20a99_145)] [added: ID](#i5f53b2f53b854e0d802df7b875649210_193) [](#i5f53b2f53b854e0d802df7b875649210_193)238[)](#i5f53b2f53b854e0d802df7b875649210_193)] | | | 105 | | |

| 2.1 | | | [Agreement and Plan of Merger, dated September 1, 2021, among Hill-Rom Holdings, Inc., the Company and Bel Air Subsidiary, Inc. (incorporated by reference to Exhibit 2.1 [removed: to](http://www.sec.gov/Archives/edgar/data/0000010456/000119312521263688/d222750dex21.htm) [Baxter Internation](http://www.sec.gov/Archives/edgar/data/0000010456/000119312521263688/d222750dex21.htm)[a](http://www.sec.gov/Archives/edgar/data/0000010456/000119312521263688/d222750dex21.htm)[l Inc.](http://www.sec.gov/Archives/edgar/data/0000010456/000119312521263688/d222750dex21.htm)[’s] [added: to Baxter International Inc.’s] Current Report on Form 8-K, filed on September 2, 2021).](http://www.sec.gov/Archives/edgar/data/0000010456/000119312521263688/d222750dex21.htm) | | |

| [removed: 3.1] [added: C 10.45] | | | [removed: [Amended and Restated Certificate of Incorporation of Baxter] [added: [Baxter] International Inc. [added: and Subsidiaries Pension Plan, as amended and restated effective January 5, 2018] (incorporated by reference to Exhibit [removed: 3.1 to](http://www.sec.gov/Archives/edgar/data/10456/000119312522143745/d147479dex31.htm) [Baxter] [added: 10.1 to Baxter] International [removed: Inc.](http://www.sec.gov/Archives/edgar/data/10456/000119312522143745/d147479dex31.htm)['s] [added: Inc.’s] Current Report on Form 8-K, filed on [removed: May 6, 2022).](http://www.sec.gov/Archives/edgar/data/10456/000119312522143745/d147479dex31.htm)] [added: January 8, 2018).](http://www.sec.gov/Archives/edgar/data/10456/000119312518005221/d520610dex101.htm)] | | |

| [removed: 3.2] [added: C 10.49] | | | [removed: [Amended] [added: [Baxter International Inc.] and [removed: Restated Bylaws, dated May 6, 2023] [added: Subsidiaries Supplemental Pension Plan, as amended and restated effective January 5, 2018] (incorporated by reference to Exhibit [removed: 3.1] [added: 10.3] to Baxter International [removed: Inc.'s] [added: Inc.’s] Current Report on Form 8-K, filed on [removed: May 9, 2023).](http://www.sec.gov/Archives/edgar/data/10456/000119312523138972/d406146dex31.htm)] [added: January 8, 2018).](http://www.sec.gov/Archives/edgar/data/10456/000119312518005221/d520610dex103.htm)] | | |

| [removed: 4.2] [added: C 10.27] | | | [removed: [Description of Securities Registered Under Section 12] [added: [Baxter International Inc. 2020 Equity Plan, effective as] of [removed: the Exchange Act] [added: March 16, 2020] (incorporated by reference to Exhibit [removed: 4.9] [added: 10.22] to Baxter International [removed: Inc.'s] [added: Inc.’s] Annual Report on Form 10-K, filed on March 17, [removed: 2020).](http://www.sec.gov/Archives/edgar/data/10456/000162828020003693/bax-20191231xexx49.htm)] [added: 2020).](http://www.sec.gov/Archives/edgar/data/10456/000162828020003693/bax-20191231xexx1022.htm)] | | |

| 4.3 | | | [Indenture, dated August 8, 2006, between the Company and J.P. Morgan Trust Company, National Association, as Trustee (incorporated by reference to Exhibit 4.1 [removed: to](http://www.sec.gov/Archives/edgar/data/10456/000095013706008933/c07629exv4w1.htm) [Baxter] [added: to Baxter] International [removed: Inc.](http://www.sec.gov/Archives/edgar/data/10456/000095013706008933/c07629exv4w1.htm)[’s] [added: Inc.’s] Current Report on Form 8-K, filed on August 9, [removed: 2006).](http://www.sec.gov/Archives/edgar/data/10456/000095013706008933/c07629exv4w1.htm)] [added: 2006).](https://www.sec.gov/Archives/edgar/data/10456/000095013706008933/c07629exv4w1.htm)] | | |

| 4.5 | | | [Eighth Supplemental Indenture, dated August 13, 2012, between the Company and The Bank of New York Mellon Trust Company, N.A. (as successor in interest to J.P. Morgan Trust Company, National Association), as Trustee (including [removed: forms] [added: form] of [removed: 2.400% Senior Notes due 2022 and] 3.650% Senior Notes due 2042) (incorporated by reference to Exhibit 4.1 to Baxter International Inc.’s Current Report on Form 8-K, filed on August 13, 2012).](http://www.sec.gov/Archives/edgar/data/10456/000119312512351947/d396975dex41.htm) | | |

| 4.7 | | | [Tenth Supplemental Indenture, dated August 13, 2016, between the Company and The Bank of New York Mellon Trust Company, N.A., as Trustee (including forms of [removed: 1.700% Senior Notes due 2021,] 2.600% Senior Notes due 2026 and 3.500% Senior Notes due 2046) (incorporated by reference to Exhibit 4.2 to Baxter International Inc.’s Current Report on Form 8-K, filed on August 15, 2016).](http://www.sec.gov/Archives/edgar/data/10456/000119312516682018/d234689dex42.htm) | | |

| 4.9 | | | [Twelfth Supplemental Indenture, dated as of May 15, 2019, by and between the Company and The Bank of New York Mellon Trust Company, N.A., as Trustee (including form of [removed: 0.400% Senior Notes due 2024 and form of] 1.300% Senior Notes due 2029) (incorporated by reference to Exhibit 4.2 of Baxter International Inc.’s Current Report on Form 8-K, filed on May 15, 2019).](http://www.sec.gov/Archives/edgar/data/10456/000119312519147345/d751331dex42.htm) | | |

| 4.12 | | | [Second Supplemental Indenture, dated as of November 2, 2020, to the Indenture, dated as of March 26, 2020, between the Company and The Bank of New York Mellon Trust Company, N.A., as [removed: Trustee,] [added: Trustee] (including form of 1.730% Senior Notes due 2031) (incorporated by reference to Exhibit 4.1 to Baxter International Inc.’s Current Report on Form 8-K, filed on November 6, 2020).](http://www.sec.gov/Archives/edgar/data/10456/000162828020015975/exhibit41-supplemental.htm) | | |

| 4.15 | | | [First Supplemental Indenture, dated as of December 1, 2021, to the Indenture, dated as of December 1, 2021, between the Company and U.S. Bank National Association, as Trustee (including forms of [removed: 0.868% Senior Notes due 2023, 1.322% Senior Notes due 2024,] 1.915% Senior Notes due 2027, 2.272% Senior Notes due 2028, 2.539% Senior Notes due [removed: 2032, 3.132% Senior Notes due 2051, Floating Rate Senior Notes due 2023] [added: 2032] and [removed: Floating Rate] [added: 3.132%] Senior Notes due [removed: 2024)] [added: 2051)] (incorporated by reference to Exhibit 4.2 to Baxter International Inc.’s Current Report on Form 8-K, filed on December 2, 2021).](http://www.sec.gov/Archives/edgar/data/10456/000119312521346720/d270061dex42.htm) | | |

| [removed: 10.8] [added: 10.10] | | | [Five-Year Credit Agreement, dated as of September 30, 2021, among the Company, as Borrower, the financial institutions named therein, as Banks, JPMorgan Chase Bank, N.A., as Administrative Agent, and Bank of America, N.A. and Citibank, N.A., as Syndication Agents (incorporated by reference to Exhibit 10.2 to Baxter International Inc.’s Current Report on Form 8-K, filed on October 4, [removed: 2021).](http://www.sec.gov/Archives/edgar/data/10456/000119312521290255/d218121dex102.htm)] [added: 2021).](https://www.sec.gov/Archives/edgar/data/10456/000119312521290255/d218121dex102.htm)] | | |

| [removed: 10.9] [added: 10.11] | | | [First Amendment, dated as of September 28, 2022, to the Five-Year Credit Agreement, dated as of September 30, 2021, among Baxter International Inc., as Borrower, JPMorgan Chase Bank, National Association, as Administrative Agent and certain other financial institutions named therein (incorporated by reference to Exhibit 10.3 to Baxter International Inc.'s Current Report on Form 8-K, filed on September 30, [removed: 2022).](http://www.sec.gov/Archives/edgar/data/10456/000119312522255523/d378856dex103.htm)] [added: 2022).](https://www.sec.gov/Archives/edgar/data/10456/000119312522255523/d378856dex103.htm)] | | |

| [removed: 10.10] [added: 10.12] | | | [Second Amendment, dated as of September 28, 2022, to the Five-Year Credit Agreement, dated as of September 30, 2021, among Baxter International Inc., as Borrower, JPMorgan Chase Bank, National Association, as Administrative Agent and certain other financial institutions named therein (incorporated by reference to Exhibit 10.4 to Baxter International Inc.'s Current Report on Form 8-K, filed on September 30, [removed: 2022).](http://www.sec.gov/Archives/edgar/data/10456/000119312522255523/d378856dex104.htm)] [added: 2022).](https://www.sec.gov/Archives/edgar/data/10456/000119312522255523/d378856dex104.htm)] | | |