Baxter International 10-Q 2022-03-31

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

_________________________________________________________________________________

FORM 10-Q

_________________________________________________________________________________

☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2022

☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 1-4448

_________________________________________________________________________________

BAXTER INTERNATIONAL INC.

(Exact name of registrant as specified in its charter)

_________________________________________________________________________________

Delaware												36-0781620
(State or other jurisdiction of incorporation or organization)												(I.R.S. Employer Identification No.)
One Baxter Parkway,			Deerfield,			Illinois						60015
(Address of Principal Executive Offices)												(Zip Code)

						224.			948.2000
						(Registrant’s telephone number, including area code)

_________________________________________________________________________________

Securities registered pursuant to Section 12(b) of the Act:

Title of each class						Trading Symbol(s)						Name of each exchange on which registered
Common Stock, $1.00 par value						BAX (NYSE)						New York Stock Exchange
												Chicago Stock Exchange
0.4% Global Notes due 2024						BAX 24						New York Stock Exchange
1.3% Global Notes due 2025						BAX 25						New York Stock Exchange
1.3% Global Notes due 2029						BAX 29						New York Stock Exchange
3.95% Global Notes due 2030						BAX 30						New York Stock Exchange
1.73% Global Notes due 2031						BAX 31						New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer			x						Accelerated filer			o
Non-accelerated filer			o						Smaller reporting company			☐
Emerging growth company			☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x

The number of shares of the registrant’s Common Stock, par value $1.00 per share, outstanding as of April 21, 2022 was 503,528,678 shares.

BAXTER INTERNATIONAL INC.

FORM 10-Q

For the quarterly period ended March 31, 2022

TABLE OF CONTENTS

						Page Number
PART I.			FINANCIAL INFORMATION			2
Item 1.			Financial Statements (unaudited)			2
			Condensed Consolidated Balance Sheets			2
			Condensed Consolidated Statements of Income			3
			Condensed Consolidated Statements of Comprehensive Income			4
			Condensed Consolidated Statements of Changes in Equity			5
			Condensed Consolidated Statements of Cash Flows			6
			Notes to Condensed Consolidated Financial Statements			7
Item 2.			Management’s Discussion and Analysis of Financial Condition and Results of Operations			28
Item 3.			Quantitative and Qualitative Disclosures about Market Risk			40
Item 4.			Controls and Procedures			41
PART II.			OTHER INFORMATION			42
Item 1.			Legal Proceedings			42
Item 1A.			Risk Factors			42
Item 2.			Unregistered Sales of Equity Securities and Use of Proceeds			42
Item 6.			Exhibits			43
Signature						44

PART I. FINANCIAL INFORMATION

Baxter International Inc.

Condensed Consolidated Balance Sheets (unaudited)

(in millions, except share information)

			March 31, 2022			December 31, 2021
Current assets:
Cash and cash equivalents			$	2,294		$	2,951
Accounts receivable, net of allowances of $129 in 2022 and $122 in 2021			2,471			2,629
Inventories			2,548			2,453
Prepaid expenses and other current assets			860			839
Total current assets			8,173			8,872
Property, plant and equipment, net			5,114			5,178
Goodwill			9,816			9,836
Other intangible assets, net			7,693			7,792
Operating lease right-of-use assets			609			630
Other non-current assets			1,311			1,213
Total assets			$	32,716		$	33,521
Current liabilities:
Short-term debt			$	200		$	301
Current maturities of long-term debt and finance lease obligations			209			210
Accounts payable			1,223			1,246
Accrued expenses and other current liabilities			2,258			2,479
Total current liabilities			3,890			4,236
Long-term debt and finance lease obligations, less current portion			16,765			17,149
Operating lease liabilities			508			522
Other non-current liabilities			2,434			2,493
Total liabilities			23,597			24,400
Commitments and contingencies
Equity:
Common stock, $1 par value, authorized 2,000,000,000 shares, issued 683,494,944 shares in 2022 and 2021			683			683
Common stock in treasury, at cost,180,058,105 shares in 2022 and 181,879,516 shares in 2021			(11,422)			(11,488)
Additional contributed capital			6,207			6,197
Retained earnings			16,994			17,065
Accumulated other comprehensive (loss) income			(3,387)			(3,380)
Total Baxter stockholders’ equity			9,075			9,077
Noncontrolling interests			44			44
Total equity			9,119			9,121
Total liabilities and equity			$	32,716		$	33,521

The accompanying notes are an integral part of these condensed consolidated financial statements.

Baxter International Inc.

Condensed Consolidated Statements of Income (unaudited)

(in millions, except per share data)

			Three months ended March 31,
			2022			2021
Net sales			$	3,707		$	2,946
Cost of sales			2,359			1,801
Gross margin			1,348			1,145
Selling, general and administrative expenses			1,052			627
Research and development expenses			150			128
Other operating income, net			(17)			—
Operating income			163			390
Interest expense, net			85			34
Other (income) expense, net			(16)			5
Income before income taxes			94			351
Income tax expense			21			51
Net income			73			300
Net income attributable to noncontrolling interests			2			2
Net income attributable to Baxter stockholders			$	71		$	298
Earnings per share
Basic			$	0.14		$	0.59
Diluted			$	0.14		$	0.58
Weighted-average number of shares outstanding
Basic			503			505
Diluted			509			511

The accompanying notes are an integral part of these condensed consolidated financial statements.

Baxter International Inc.

Condensed Consolidated Statements of Comprehensive Income (unaudited)

(in millions)

			Three months ended March 31,
			2022			2021
Net income			$	73		$	300
Other comprehensive income (loss), net of tax:
Currency translation adjustments, net of tax expense (benefit) of ($11) and $17 for the three months ended March 31, 2022 and 2021, respectively.			(15)			(208)
Pension and other postretirement benefits, net of tax expense of $3 and $8 for the three months ended March 31, 2022 and 2021, respectively.			9			30
Hedging activities, net of tax expense (benefit) of ($1) and $3 for the three months ended March 31, 2022 and 2021, respectively.			(2)			12
Debt securities, net of tax expense of $1 and zero for the three months ended March 31, 2022 and 2021, respectively			1			—
Total other comprehensive loss, net of tax			(7)			(166)
Comprehensive income			66			134
Less: Comprehensive income attributable to noncontrolling interests			2			2
Comprehensive income attributable to Baxter stockholders			$	64		$	132

The accompanying notes are an integral part of these condensed consolidated financial statements.

Baxter International Inc.

Condensed Consolidated Statements of Changes in Equity (unaudited)

(in millions)

			For the three months ended March 31, 2022
			Baxter International Inc. stockholders' equity
			Common stock shares			Common stock			Common stock shares in treasury			Common stock in treasury			Additional contributed capital			Retained earnings			Accumulated other comprehensive income (loss)			Total Baxter stockholders' equity			Noncontrolling interests			Total equity
Balance as of January 1, 2022			683			$	683		182			$	(11,488)		$	6,197		$	17,065		$	(3,380)

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Refer to our Annual Report on Form 10-K for the year ended December 31, 2021, for management’s discussion and analysis of our financial condition and results of operations. The following is management’s discussion and analysis of our financial condition and results of operations for the three months ended March 31, 2022 and 2021.

RESULTS OF OPERATIONS

Net income attributable to Baxter stockholders for the three months ended March 31, 2022 totaled $71 million, or $0.14 per diluted share, compared to $298 million, or $0.58 per diluted share, for the three months ended March 31, 2021. The first quarter of 2022 is the first full quarter reflecting Hillrom results of operations after the December 13, 2021 acquisition. Net income for the three months ended March 31, 2022 included special items which decreased net income by $400 million, or $0.79 per diluted share, respectively, as further discussed below. Net income for the three months ended March 31, 2021 included special items which decreased net income by $88 million, or $0.18 per diluted share, as further discussed below.

Special Items

The following table provides a summary of our special items and the related impact by line item on our results for the three months ended March 31, 2022 and 2021.

			Three months ended March 31,
(in millions)			2022			2021
Gross Margin
Intangible asset amortization expense			$	(122)		$	(64)
Business optimization items1			(2)			(21)
Acquisition and integration expenses2			(164)			—
European medical devices regulation3			(11)			(8)
Product-related items5			(23)			—
Total Special Items			$	(322)		$	(93)
Impact on Gross Margin Ratio			(8.6 pts)			(3.1 pts)
Selling, General and Administrative (SG&A) Expenses
Intangible asset amortization expense			$	95		$	—
Business optimization items1			78			6
Acquisition and integration expenses2			24			1
Investigation and related costs4			—			11
Total Special Items			$	197		$	18
Impact on SG&A Ratio			5.3 pts			0.6 pts
Research and Development (R&D) Expenses
Business optimization items1			$	1		$	—
Total Special Items			$	1		$	—
Impact on R&D Ratio			0.0 pts			0.0 pts
Other Operating Income, net
Acquisition and integration expenses2			(17)			—
Total Special Items			$	(17)		$	—
Income Tax Expense
Tax effects of special items6			(103)			(23)
Total Special Items			$	(103)		$	(23)
Impact on Effective Tax Rate			1.5 pts			(1.5 pts)

Intangible asset amortization expense, which increased significantly from the prior year due to the Hillrom acquisition, is identified as a special item to facilitate an evaluation of current and past operating performance and is consistent

with how management and our Board of Directors assess performance. Additional special items are identified above because they are highly variable, difficult to predict and of a size that may substantially impact our reported results of operations for the period. Management believes that providing the separate impact of those items may provide a more complete understanding and facilitate a fuller analysis of our results of operations, particularly in evaluating performance from one period to another.

1In 2022 and 2021, our results were impacted by costs associated with our execution of programs to optimize our organization and cost structure. These actions included streamlining our international operations, rationalizing our manufacturing and distribution facilities, reducing our general and administrative infrastructure, re-aligning certain R&D activities and cancelling certain R&D programs. In the current period, restructuring charges include actions taken in connection with our integration of Hill-Rom Holdings, Inc. (Hillrom), which we acquired in December 2021. Our results in 2022 and 2021 included business optimization charges of $81 million and $27 million, respectively. Refer to Note 10 in Item 1 of this Quarterly Report on Form 10-Q for further information regarding these charges and related liabilities.

2Our results in 2022 included $171 million of acquisition and integration-related expenses. Those costs included $188 million related to our acquisition of Hillrom, primarily reflecting $159 million of incremental cost of sales from the fair value step-ups on acquired Hillrom inventory that was sold in the current period. We do not expect to incur significant incremental cost of sales from those inventory fair value step-ups after the first quarter 2022. Other integration expenses in the current period included third party consulting costs related to our integration and related cost savings activities. Those acquisition and integration-related expenses related to Hillrom were partially offset by a $17 million benefit from a change in the estimated fair value of contingent consideration liabilities assumed in the Hillrom acquisition. Our results in 2021 included $1 million of integration expenses related to our acquisition of the rights to Caelyx and Doxil for specified territories outside of the U.S. Refer to Note 2 in Item 1 of this Quarterly Report on Form 10-Q for further information regarding business development activities.

3Our results in 2022 and 2021 included $11 million and $8 million, respectively, related to updating our quality systems and product labeling to comply with the new medical device reporting regulation and other requirements of the European Union’s regulations for medical devices that became effective in stages beginning in 2021.

4Our results in 2021 included charges of $11 million for investigation and related cost for matters associated with our previously announced investigation of foreign exchange gains and losses. Refer to Note 6 in Item 1 of this Quarterly Report on Form 10-Q for further information regarding the investigation.

5Our results in 2022 included charges of $23 million related to warranty and remediation activities arising from two field corrective actions on certain of our infusion pumps.

6Reflected in this item is the income tax impact of the special items identified in this table. The tax effect of each special item is based on the jurisdiction in which the item was incurred and the tax laws in effect for each such jurisdiction.

COVID-19 and Global Economic Conditions

Our global operations expose us to risks associated with public health crises and epidemics/pandemics, such as the novel strain of coronavirus (COVID-19). COVID-19 has had, and we expect will continue to have, an adverse impact on our operations, supply chains and distribution systems and has increased and we expect will continue to increase our expenses, including as a result of impacts associated with preventive and precautionary measures that we, other businesses and governments have taken and continue to take. Initial measures taken in 2020 led to unprecedented restrictions on, disruptions in, and other related impacts on business and personal activities, including a shift in healthcare priorities, which resulted in a significant decline in medical procedures in 2020. Some of these disruptions and impacts (including the suspension or postponement of elective medical procedures) in certain of our principal markets have continued into 2021 and 2022. The pandemic has created significant volatility in the demand for our products. For further discussion, refer to the Product Category Net Sales Reporting section below. Significant uncertainty remains regarding the duration and overall impact of the COVID-19 pandemic. For example, concerns remain regarding the pace of economic recovery due to virus resurgence across the globe from the Omicron variants, sub variants and other virus mutations as well as vaccine distribution and hesitancy. The U.S. and other governments may continue existing measures or implement new restrictions and other requirements in light of the continuing spread of the pandemic (including with respect to mandatory vaccinations for certain of our employees, moratoriums on elective procedures and mandatory quarantines and travel restrictions). Due to the uncertainty caused by the pandemic, our operating performance and financial results, particularly in the short term, may be subject to volatility. We have experienced significant challenges, including lengthy delays, shortages and interruptions, posed by the

pandemic and other exogenous factors (including significant weather events, disruptions to certain ports of call around the world and certain geopolitical events) to our global supply chain, including the cost and availability of raw materials and component parts (including resins and electromechanical devices) and higher transportation costs, and may experience these and other challenges in future periods. Many of our manufacturing plant and distribution center personnel are currently unvaccinated, and we may also experience employee resistance in complying with current and future government vaccine and testing mandates, which may cause labor shortages significantly impacting manufacturing production and distribution center productivity. We expect that these challenges as well as evolving governmental restrictions and requirements, among other factors, may continue to have an adverse effect on our business.

Our results of operations are affected by economic conditions, including macroeconomic conditions and levels of business confidence. The war in Ukraine and the sanctions and other measures being imposed in response to this conflict have increased the levels of economic and political uncertainty. In response, we continue to monitor the developing situation with respect to ongoing business in Russia and are working on appropriate contingency plans that will support our desire to serving existing, chronically ill patient populations while remaining compliant with all applicable U.S. and European Union sanctions and regulations. While Russia and Ukraine do not constitute a material portion of our business, a significant escalation or expansion of economic disruption or the conflict’s current scope could have an adverse effect on our business.

For further discussion, please refer to Item 1A, "Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021.

NET SALES

			Three Months Ended March 31,									Percent change
(in millions)			2022			2021						At actual currency rates			At constant currency rates
United States			$	1,757		$	1,180					49		%	49		%
International			$	1,950		1,766						10		%	16		%
Total net sales			$	3,707		$	2,946					26		%	29		%

Our acquisition of Hillrom favorably impacted net sales by 26 percentage points during the first quarter of 2022 compared to the prior year period. Foreign currency unfavorably impacted net sales by 3 percentage points, during the first quarter of 2022 compared to the prior-year period, principally due to the strengthening of the U.S. Dollar relative to the Euro, Turkish Lira, Australian Dollar and Japanese Yen.

The comparisons presented at constant currency rates reflect local currency sales at the prior period’s foreign exchange rates. This measure provides information on the change in net sales assuming that foreign currency exchange rates had not changed between the prior and the current period. We believe that the non-GAAP measure of change in net sales at constant currency rates, when used in conjunction with the U.S. GAAP measure of change in net sales at actual currency rates, may provide a more complete understanding and facilitate a fuller analysis of our results of operations, particularly in evaluating performance from one period to another.

Product Category Net Sales Reporting

In connection with our acquisition of Hillrom, we have added three new product categories: Patient Support Systems, Front Line Care and Surgical Solutions. Following these additions, our product categories include the following:

• Renal Care includes sales of our peritoneal dialysis (PD), hemodialysis (HD) and additional dialysis therapies and services.

• Medication Delivery includes sales of our intravenous (IV) therapies, infusion pumps, administration sets and drug reconstitution devices.

• Pharmaceuticals includes sales of our premixed and oncology drug platforms, inhaled anesthesia and critical care products and pharmacy compounding services.

• Clinical Nutrition includes sales of our parenteral nutrition (PN) therapies and related products.

• Advanced Surgery includes sales of our biological products and medical devices used in surgical procedures for hemostasis, tissue sealing and adhesion prevention.

• Acute Therapies includes sales of our continuous renal replacement therapies (CRRT) and other organ support therapies focused in the intensive care unit (ICU).

• BioPharma Solutions includes sales of contracted services we provide to various pharmaceutical and biopharmaceutical companies.

• Patient Support Systems** includes sales of our connected care solutions: devices, software, communications and integration technologies.

• Front Line Care** includes sales of our integrated patient monitoring and diagnostic technologies to help diagnose, treat and manage a wide variety of illness and diseases, including respiratory therapy, cardiology, vision screening and physical assessment.

• Surgical Solutions** includes sales of our surgical video technologies, tables, lights, pendants, precision positioning devices and other accessories.

• Other includes sales of other miscellaneous product and service offerings.

The following is a summary of net sales by product category:

			Three Months Ended March 31,									Percent change
(in millions)			2022			2021						At actual currency rates			At constant currency rates
Renal Care			$	894		$	922					(3)		%	1		%
Medication Delivery			706			652						8		%	10		%
Pharmaceuticals			521			552						(6)		%	(2)		%
Clinical Nutrition			227			234						(3)		%	1		%
Advanced Surgery			228			217						5		%	8		%
Acute Therapies			188			207						(9)		%	(7)		%
BioPharma Solutions			156			135						16		%	21		%
Patient Support Systems			383			—						N/A			N/A
Front Line Care			294			—						N/A			N/A
Surgical Solutions			78			—						N/A			N/A
Other			32			27						19		%	19		%
Total Baxter			$	3,707		$	2,946					26		%	29		%

Renal Care net sales decreased 3% in the first quarter of 2022, as compared to the prior-year period. That decrease was driven by a 4% negative impact from foreign exchange rate changes, as compared to the prior-year period, and lower in-center HD sales, partially offset by global patient growth in PD.

Medication Delivery net sales increased 8% in the first quarter of 2022, as compared to the prior-year period. That increase was driven by increased demand for IV administration sets and solutions, reflecting a recovery in hospital admission rates and elective surgeries, and by lower U.S. customer rebates in the current year period. Those items were partially offset by a 2% negative impact from foreign exchange rates as compared to the prior-year period.

Pharmaceuticals net sales decreased 6% in the first quarter of 2022, as compared to the prior-year period. That decrease was primarily driven by a 4% negative impact from foreign exchange rates, as compared to the prior-year period. Additionally, pharmaceuticals net sales were adversely impacted by new market entrants increasing competition for certain molecules and due to supply constraints driven, in part, by labor shortages at certain of our manufacturing facilities.

Clinical Nutrition net sales decreased 3% in the first quarter of 2022, as compared to the prior-year period. That decrease was driven by a 4% negative impact from foreign exchange rate changes, as compared to the prior-year period and lower sales of vitamins resulting from supply constraints. Those decreases were partially offset by growth in the U.S. for our PN therapies and related products.

Advanced Surgery net sales increased 5% in the first quarter of 2022, as compared to the prior-year period. That increase was driven by a partial recovery in elective surgeries and benefits from competitor supply constraints. Partially offsetting that increase was a 3% negative impact from foreign exchange rates, as compared to the prior-year period.

Acute Therapies net sales decreased 9% in the first quarter of 2022, as compared to the prior-year period. That decrease was driven by lower COVID-related demand for our CRRT systems and a 2% negative impact from foreign exchange rate changes, as compared to the prior-year period.

BioPharma Solutions net sales increased 16% in the first quarter of 2022, as compared to the prior-year period. That increase was driven by manufacturing services and supply packaging related to the production of COVID-19 vaccines on behalf of multiple pharmaceutical companies, partially offset by a 5% negative impact from foreign exchange rate changes, as compared to the prior-year period.

The Patient Support Systems, Front Line Care and Surgical Solutions product categories were added in connection with our acquisition of Hillrom.

Gross Margin and Expense Ratios

			Three months ended March 31,
			2022			% of net sales			2021			% of net sales			$ change			% change
Gross margin			$	1,348		36.4		%	$	1,145		38.9		%	$	203		17.7		%
SG&A			$	1,052		28.4		%	$	627		21.3		%	$	425		67.8		%
R&D			$	150		4.0		%	$	128		4.3		%	$	22		17.2		%

Gross Margin

The gross margin ratio was 36.4% and 38.9% in the first quarter of 2022 and 2021, respectively. The special items identified above had an unfavorable impact of approximately 8.6 and 3.1 percentage points on the gross margin ratio in the first quarter of 2022 and 2021, respectively. Refer to the Special Items caption above for additional detail.

Excluding the impact of the special items, the gross margin ratio increased in the first quarter of 2022 compared to the prior-year period. The increase was due to a favorable product mix, primarily driven by our acquisition of Hillrom, which was partially offset by higher manufacturing and supply chain costs resulting from raw materials inflation and the continuing impact of the COVID-19 pandemic.

SG&A

The SG&A expenses ratio was 28.4% and 21.3% in the first quarter of 2022 and 2021, respectively. The special items identified above had an unfavorable impact of approximately 5.3 and 0.6 percentage points on the SG&A expenses ratio in the first quarter of 2022 and 2021, respectively. Refer to the Special Items caption above for additional detail.

Excluding the impact of the special items, the SG&A expenses ratio increased in the first quarter of 2022 compared to the prior-year period primarily due to the acquisition of Hillrom and increased outbound freight costs.

R&D

The R&D expenses ratio was 4.0% and 4.3% in the first quarter of 2022 and 2021, respectively. The special items identified above had no impact on the R&D expenses ratio in the first quarter of 2022 and 2021. Refer to the Special Items caption above for additional detail.

The R&D expenses ratio decreased in the first quarter of 2022 compared to the prior-year period as a result of decreased project-related expenditures.

Business Optimization Items

In recent years, we have undertaken actions to transform our cost structure and enhance operational efficiency. These efforts include restructuring the organization, optimizing our manufacturing footprint, R&D operations and supply chain network, employing disciplined cost management, and centralizing and streamlining certain support functions. In the current period, restructuring charges include actions taken in connection with our integration of Hillrom. From the commencement of our business optimization actions in the second half of 2015 through March 31, 2022, we have incurred cumulative pre-tax costs of $1.3 billion related to these actions. The costs consisted primarily of employee termination costs, implementation costs, contract termination costs, asset impairments, and accelerated depreciation. We currently expect to incur additional pre-tax costs of approximately $25 million through the completion of the

initiatives that are currently underway, primarily related to implementation costs. We continue to pursue cost savings initiatives and, to the extent further cost savings opportunities are identified, we may incur additional restructuring charges and costs to implement business optimization programs in future periods. The reductions in our cost base from these actions in the aggregate are expected to provide cumulative annual pre-tax savings of more than $1.2 billion once the remaining actions are complete. The savings from these actions have reduced cost of sales, SG&A expenses, and R&D expenses. Approximately 99 percent of the expected annual pre-tax savings are expected to be realized by the end of 2022, with the remainder by the end of 2023.

Other Operating Income, Net

Other operating income, net was income of $17 million in the first quarter of 2022, which was comprised of changes in the estimated fair value of contingent consideration liabilities.

In September 2013, we entered into an agreement with Celerity Pharmaceutical, LLC (Celerity) to develop certain acute care generic injectable premix and oncolytic products through regulatory approval. We transferred our rights in these products to Celerity and Celerity assumed ownership and responsibility for development of the products. We are obligated to purchase the individual product rights from Celerity if the products obtain regulatory approval. In December 2020, we entered into an agreement with a third party to divest one of the products that is currently being developed by Celerity if that product receives regulatory approval in the U.S. and/or European Union. If regulatory approval is obtained, we would incur a loss ranging from $30 million to $60 million for the difference between our purchase price and the divestiture proceeds in connection with that transaction.

Interest Expense, Net

Interest expense, net was $85 million in the first quarter of 2022 and $34 million in the first quarter of 2021. The increase in 2022 was driven by higher average debt outstanding in connection with the Hillrom acquisition.

Other (Income) Expense, Net

Other (income) expense, net was income of $16 million and expense of $5 million in the first quarter of 2022 and 2021, respectively. The increase in the first quarter of 2022 compared to the prior year was primarily due to higher foreign exchange gains in the current-year period, higher pension benefits and an investment impairment in the prior year.

In the first quarter of 2021, we began to wind down our operations in Argentina. Upon substantial liquidation of those operations in the future, we expect to reclassify currency translation adjustments (CTA) from accumulated other comprehensive (loss) income to other (income) expense, net and recognize a non-cash charge. As of March 31, 2022, the CTA loss for our Argentina operations was in excess of $60 million.

Income Taxes

Our effective income tax rate was 22.3% and 14.5% in the first quarter 2022 and 2021, respectively. Our effective income tax rate can differ from the 21% U.S. federal statutory rate due to a number of factors, including foreign rate differences, tax incentives, increases or decreases in valuation allowances and liabilities for uncertain tax positions and excess tax benefits on stock compensation awards.

For the three months ended March 31, 2022, the difference between our effective income tax rate and the U.S. federal statutory rate was primarily attributable to discrete tax matters in various foreign jurisdictions, of which none are individually material, and an increase in our liabilities for uncertain tax positions, partially offset by excess tax benefits on stock compensation awards and a favorable geographic earnings mix.

For the three months ended March 31, 2021, the difference between our effective income tax rate and the U.S. federal statutory rate was primarily attributable to decreases in accrued withholding taxes in several foreign jurisdictions and a favorable geographic earnings mix.

Segment Results

We manage our global operations based on four segments, consisting of the following geographic segments related to legacy Baxter business: Americas, EMEA and APAC, and a new global segment for our recently acquired Hillrom business. We use net sales and operating income on a segment basis to make resource allocation decisions and

assess the ongoing performance of our segments. The following is a summary of financial information for our reportable segments:

			Net sales												Operating income (loss)
			Three months ended March 31,															Three months ended March 31,
(in millions)			2022			2021															2022			2021
Americas			$	1,626		$	1,560														$	610		$	599
EMEA			699			738															119			135
APAC			627			648															151			138
Hillrom			755			—															200			—
Total segments			3,707			2,946															1,080			872
Corporate and other			—			—															(917)			(482)
Total			$	3,707		$	2,946														$	163		$	390

Americas

Segment net sales and operating income were $1.6 billion and $610 million, respectively, in the first quarter of 2022 and $1.6 billion and $599 million, respectively, in the first quarter of 2021. The increase in operating profit in the first quarter was due to favorable sales performance in our BioPharma Solutions, Medication Delivery and Advanced Surgery product categories, partially offset by unfavorable performance in Pharmaceuticals and higher supply chain costs.

EMEA

Segment net sales and operating income were $699 million and $119 million, respectively, in the first quarter of 2022 and $738 million and $135 million, respectively, in the first quarter of 2021. The decrease in operating profit in the first quarter was primarily due to an unfavorable impact of foreign exchange rates on results as compared to the prior-year period and higher supply chain costs, partially offset by having a full quarter of sales from our February 2021 acquisition of the rights to Caelyx and Doxil for specified territories outside the U.S.

APAC

Segment net sales and operating income were $627 million and $151 million, respectively, in the first quarter of 2022 and $648 million and $138 million, respectively, in the first quarter of 2021. The increase in operating profit in the first quarter was due to improved gross margin, driven by a favorable product mix, and lower operating expenses, partially offset by the unfavorable impact of foreign exchange rates on results as compared to the prior year period.

Hillrom

Segment net sales and operating income were $755 million and $200 million, respectively, in the first quarter of 2022. The increase in operating profit in the first quarter was due to the acquisition of Hillrom in December 2021.

Corporate and Other

Certain items are maintained at Corporate and are not allocated to a segment. They primarily include corporate headquarters costs, certain R&D costs, certain product categories support costs, stock compensation expense, certain employee benefit plan costs, and certain gains, losses, and other charges (such as business optimization, acquisition and integration costs, intangible asset amortization and asset impairments). For the period from our acquisition of Hillrom on December 13, 2021 through December 31, 2021, we previously included all costs incurred by the Hillrom business within that segment, including the types of costs described in the preceding sentence that are maintained at Corporate for our legacy Baxter segments. In connection with our ongoing integration activities, beginning in the first quarter 2022, we have updated the measure of profitability for our Hillrom segment by excluding such unallocated costs, consistent with our legacy Baxter segments. Those unallocated costs related to Hillrom which totaled $219 million for the three months ended March 31, 2022, are now presented within Corporate as well.

The Corporate operating loss in the first quarter was significantly higher than the prior-year period primarily due to higher intangible asset amortization expense, acquisition and integration-related expenses and business optimization charges, all driven by the Hillrom acquisition.

LIQUIDITY AND CAPITAL RESOURCES

The following table is a summary of the statement of cash flows for the three-month periods ended March 31, 2022 and 2021.

			Three months ended March 31,
(in millions)			2022						2021
Cash flows from operations			$	208					$	377
Cash flows from investing activities			(304)						(538)
Cash flows from financing activities			(548)						(358)

Cash Flows from Operations

In the first three months of 2022, cash provided by operating activities was $208 million, as compared to cash provided by operating activities of $377 million in the first three months of 2021, a decrease of $169 million. The decrease was primarily due to a decrease in our net income in 2022 and higher annual payouts under our employee incentive compensation plans in the current year period, partially offset by favorable accounts receivable collection performance and a lower increase in inventories compared to the prior year period.

Cash Flows from Investing Activities

In the first three months of 2022, cash used for investing activities included payments for acquisitions and investments of $174 million, primarily related to our payment to acquire the rights to Zosyn, and capital expenditures of $140 million. In the first three months of 2021, cash used for investing activities included payments for acquisitions and investments of $381 million, primarily related to Caelyx and Doxil and Transderm Scop, and capital expenditures of $171 million. See Note 2 in Item 1 of this Quarterly Report on Form 10-Q for further information regarding business development activities.

Cash Flows from Financing Activities

In the first three months of 2022, cash used in financing activities included debt repayments of $404 million, dividend payments of $140 million, and a $45 million net repayment of short-term borrowings, partially offset by proceeds from stock issued under employee benefit plans of $66 million. In the first three months of 2021, cash used for financing activities included payments for treasury stock repurchases of $253 million and dividend payments of $125 million, partially offset by proceeds from stock issued under employee benefit plans of $48 million.

As authorized by the Board of Directors, we repurchase our stock depending upon our cash flows, net debt levels and market conditions. In July 2012, the Board of Directors authorized the repurchase of up to $2.0 billion of our common stock. The Board of Directors increased this authority by an additional $1.5 billion in each of November 2016 and February 2018, by an additional $2.0 billion in November 2018 and by an additional $1.5 billion in October 2020. We did not repurchase any shares under this authority in the first three months of 2022. We had $1.3 billion remaining available under this authorization as of March 31, 2022.

Credit Facilities and Access to Capital and Credit Ratings

Credit Facilities

As of March 31, 2022, our U.S. dollar-denominated revolving credit facility and Euro-denominated revolving credit facility had a maximum capacity of $2.5 billion and €200 million, respectively. There were no borrowings outstanding under these credit facilities as of March 31, 2022 or December 31, 2021.

As of March 31, 2022, we were in compliance with the financial covenants in these agreements. The non-performance of any financial institution supporting either of the credit facilities would reduce the maximum capacity of these facilities by the institution’s respective commitment.

Access to Capital and Credit Ratings

We intend to fund short-term and long-term obligations as they mature through cash on hand, future cash flows from operations or by issuing additional debt. We had $2.3 billion of cash and cash equivalents as of March 31, 2022, with adequate cash available to meet operating requirements in each jurisdiction in which we operate. We invest our excess cash in money market and other funds and diversify the concentration of cash among different financial institutions. As of March 31, 2022, we had approximately $17.2 billion of long-term debt and finance lease obligations, including current maturities, and short-term debt. Subject to market conditions, we regularly evaluate opportunities with respect to our capital structure.

Our ability to generate cash flows from operations, issue debt or enter into other financing arrangements on acceptable terms could be adversely affected if there is a material decline in the demand for our products or in the solvency of our customers or suppliers, deterioration in our key financial ratios or credit ratings or other significantly unfavorable changes in conditions, including global economic conditions. However, we believe we have sufficient financial flexibility to issue debt, enter into other financing arrangements and attract long-term capital on acceptable terms to support our growth objectives. There have been no changes to our investment grade credit ratings that we disclosed in our 2021 Annual Report.

LIBOR Reform

In 2017, the United Kingdom’s Financial Conduct Authority announced that after 2021 it would no longer compel banks to submit the rates required to calculate the London Interbank Offered Rate (LIBOR) and other interbank offered rates, which have been widely used as reference rates for various securities and financial contracts, including loans, debt and derivatives. This announcement indicated that the continuation of LIBOR on the current basis was not guaranteed after 2021. Regulators in the U.S. and other jurisdictions have been working to replace these rates with alternative reference interest rates that are supported by transactions in liquid and observable markets, such as the Secured Overnight Financing Rate (SOFR). In 2020, it was announced that certain U.S. dollar LIBOR tenors would not cease until 2023. Currently, our $2.5 billion U.S. dollar-denominated revolving credit facility, our €200 million Euro-denominated revolving credit facility and our $4.0 billion Term Loan Credit Agreement reference LIBOR-based rates. The discontinuation of LIBOR will require these arrangements to be modified in order to replace LIBOR with an alternative reference interest rate, which could impact our cost of funds. Our credit facilities and term loan credit agreement include provisions related to the determination of a successor LIBOR rate.

CRITICAL ACCOUNTING POLICIES

The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. A summary of our significant accounting policies is included in Note 1 to our consolidated financial statements in our 2021 Annual Report. Certain of our accounting policies are considered critical, as these policies are the most important to the depiction of our financial statements and require significant, difficult or complex judgments by us, often employing the use of estimates about the effects of matters that are inherently uncertain. Such policies are summarized in the Management’s Discussion and Analysis of Financial Condition and Results of Operations section in our 2021 Annual Report. There have been no significant changes in the application of our critical accounting policies during the first three months of 2022.

RECENT ACCOUNTING PRONOUNCEMENTS

There are no accounting standards issued but not yet effective that we believe will have a material impact on our condensed consolidated financial statements.

LEGAL CONTINGENCIES

Refer to Note 6 within Item 1 for a discussion of our legal contingencies. Upon resolution of any of these uncertainties, we may incur charges in excess of presently established liabilities. While our liability in connection with certain claims cannot be estimated with any certainty, and although the resolution in any reporting period of one or more of these matters could have a significant impact on our results of operations and cash flows for that period, the outcome of these legal proceedings is not expected to have a material adverse effect on our consolidated financial position. While we believe that we have valid defenses in these matters, litigation is inherently uncertain, excessive verdicts do occur, and we may in the future incur material judgments or enter into material settlements of claims.

CERTAIN REGULATORY MATTERS

The U.S. Food and Drug Administration (FDA) commenced an inspection of Claris’ facilities in Ahmedabad, India in July 2017, immediately prior to the closing of our acquisition of Claris Injectables Limited (Claris). FDA completed the inspection and subsequently issued a Warning Letter based on observations identified in the 2017 inspection (Claris Warning Letter).1 Due to challenges with the ongoing COVID-19 pandemic, FDA has not yet re-inspected the facilities and management cannot speculate on when the Claris Warning Letter will be lifted. However, we are continuing to implement corrective and preventive actions to address FDA’s prior observations and other items we identified and management continues to pursue and implement other manufacturing locations, including contract manufacturing organizations, to support the production of new products for distribution in the U.S. As previously disclosed, we have secured alternative locations to produce a majority of the planned new products to be manufactured in Ahmedabad for distribution into the U.S. and are producing new products from those locations.

1 Available online at https://www.fda.gov/ICECI/EnforcementActions/WarningLetters/ucm613538.htm

FORWARD-LOOKING INFORMATION

This quarterly report on Form 10-Q includes forward-looking statements. Use of the words “may,” “will,” “would,” “could,” “should,” “believes,” “estimates,” “projects,” “potential,” “expects,” “plans,” “seeks,” “intends,” “evaluates,” “pursues,” “anticipates,” “continues,” “designs,” “impacts,” “affects,” “forecasts,” “target,” “outlook,” “initiative,” “objective,” “designed,” “priorities,” “goal,” or the negative of those words or other similar expressions is intended to identify forward-looking statements that represent our current judgment about possible future events. These forward-looking statements may include statements with respect to accounting estimates and assumptions, impacts of the COVID-19 pandemic, litigation-related matters including outcomes, impacts of the internal investigation related to foreign exchange gains and losses, future regulatory filings and our R&D pipeline, strategic objectives, sales from new product offerings, credit exposure to foreign governments, potential developments with respect to credit ratings, investment of foreign earnings, estimates of liabilities including those related to uncertain tax positions, contingent payments, future pension plan contributions, costs, discount rates and rates of return, our exposure to financial market volatility and foreign currency and interest rate risks, potential tax liabilities associated with the separation of our biopharmaceuticals business from our medical products businesses, the impact of competition, future sales growth, business development activities (including the acquisitions of Cheetah, Seprafilm, certain outside of the U.S. (OUS) rights to Caelyx and Doxil, full U.S. and specific OUS rights to Transderm Scop, PerClot, Hillrom and certain rights to Zosyn in the U.S. and Canada), business optimization initiatives, cost saving initiatives, future capital and R&D expenditures, future debt issuances, manufacturing expansion, the adequacy of credit facilities, tax provisions and reserves, the effective tax rate and all other statements that do not relate to historical facts.

These forward-looking statements are based on certain assumptions and analyses made in light of our experience and perception of historical trends, current conditions, and expected future developments as well as other factors that we believe are appropriate in the circumstances. While these statements represent our judgment on what the future may hold, and we believe these judgments are reasonable, these statements are not guarantees of any events or financial results. Whether actual future results and developments will conform to expectations and predictions is subject to a number of risks and uncertainties, including the following factors, many of which are beyond our control:

			•			demand for and market acceptance risks for and competitive pressures related to new and existing products (including challenges with our ability to accurately predict changing customer preferences and needs and advances in technology and the resulting impact on customer inventory levels and the impact of reduced hospital admission rates and elective surgery volumes), and the impact of those products on quality and patient safety concerns;

			•			product development risks, including satisfactory clinical performance and obtaining required regulatory approvals, the ability to manufacture at appropriate scale, and the general unpredictability associated with the product development cycle;

			•			our ability to finance and develop new products or enhancements on commercially acceptable terms or at all;

			•			the impact of global economic conditions (including, among other things, the ongoing war in Ukraine and the related economic sanctions being imposed globally in response to the conflict and potential trade wars) and continuing public health crises, pandemics and epidemics, such as the ongoing COVID-19 pandemic, on us and our employees, customers and suppliers, including foreign governments in countries in which we operate;

			•			the continuity, availability and pricing of acceptable raw materials and component parts, and the related continuity of our manufacturing and distribution (including impacts from COVID-19) and those of our suppliers;

			•			inability to create additional production capacity in a timely manner or the occurrence of other manufacturing, sterilization or supply difficulties (including as a result of natural disaster, public health crises and epidemics/pandemics, regulatory actions or otherwise);

			•			our ability to identify business development and growth opportunities and to successfully execute on business development strategies (including the Hillrom acquisition and related integration and restructuring activities);

			•			product quality or patient safety issues, leading to product recalls, withdrawals, launch delays, warning letters, import bans, sanctions, seizures, litigation, or declining sales;

			•			breaches or failures of our information technology systems or products, including by cyber-attack, data leakage, unauthorized access or theft (as a result of increased remote working arrangements or otherwise);

			•			future actions of (or failures to act or delays in acting by) FDA, the European Medicines Agency or any other regulatory body or government authority (including the SEC, DOJ or the Attorney General of any State) that could delay, limit or suspend product development, manufacturing or sale or result in seizures, recalls, injunctions, monetary sanctions or criminal or civil liabilities, including the continued delay in lifting the warning letter at our Ahmedabad facility;

			•			failures with respect to our quality, compliance or ethics programs;

			•			future actions of third parties, including third-party payers and our customers and distributors (including group purchasing organizations and formed integrated delivery networks), the impact of healthcare reform and its implementation, suspension, repeal, replacement, amendment, modification and other similar actions undertaken by the United States or foreign governments, including with respect to pricing, reimbursement, taxation and rebate policies; legislation, regulation and other governmental pressures in the United States or globally, including the cost of compliance and potential penalties for purported noncompliance thereof, all of which may affect pricing, reimbursement, taxation and rebate policies of government agencies and private payers or other elements of our business, including new or amended laws, rules and regulations (such as the California Consumer Privacy Act of 2018, the European Union’s General Data Protection Regulation and proposed regulatory changes of the U.S. Department of Health and Human Services in kidney health policy and reimbursement, which may substantially change the U.S. end stage renal disease market and demand for our peritoneal dialysis products, necessitating significant multi-year capital expenditures, which are difficult to estimate in advance);

			•			the outcome of pending or future litigation, including the opioid litigation and current or future ethylene oxide litigation or other claims;
			•			failure to achieve our short- and long-term financial goals;

			•			the impact of competitive products and pricing, including generic competition, drug reimportation and disruptive technologies;

			•			global regulatory, trade and tax policies (including with respect to climate change and other sustainability matters);

			•			the ability to protect or enforce our owned or in-licensed patent or other proprietary rights (including trademarks, copyrights, trade secrets and know-how) or patents of third parties preventing or restricting our manufacture, sale or use of affected products or technology;

			•			the impact of any goodwill or other intangible asset impairments on our operating results;

			•			fluctuations in foreign exchange and interest rates;

			•			any changes in law concerning the taxation of income (whether with respect to current or future tax reform), including income earned outside the United States and potential taxes associated with the Base Erosion and Anti-Abuse Tax or the Build Back Better framework;

			•			actions by tax authorities in connection with ongoing tax audits;

			•			loss of key employees, the occurrence of labor disruptions or the inability to identify and recruit new employees;

			•			other factors identified elsewhere in this report and other filings with the SEC, including those factors described in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2021, all of which are available on our website.

Actual results may differ materially from those projected in the forward-looking statements. We do not undertake to update our forward-looking statements.

Currency Risk

We are primarily exposed to foreign exchange risk with respect to revenues generated outside of the United States denominated in the Euro, British Pound, Chinese Renminbi, Korean Won, Australian Dollar, Canadian Dollar, Japanese Yen, Colombian Peso, Brazilian Real, Mexican Peso, Indian Rupee and Swedish Krona. We manage our foreign currency exposures on a consolidated basis, which allows us to net exposures and take advantage of any natural offsets. In addition, we use derivative and nonderivative financial instruments to further reduce the net exposure to foreign exchange. Gains and losses on the hedging instruments offset losses and gains on the hedged transactions and reduce the earnings and stockholders’ equity volatility relating to foreign exchange. However, we don't hedge our entire foreign exchange exposure and are still subject to earnings and stockholders' equity volatility relating to foreign exchange risk. Financial market and currency volatility may limit our ability to cost-effectively hedge these exposures.

We use options and forwards to hedge the foreign exchange risk to earnings relating to forecasted transactions and recognized assets and liabilities denominated in foreign currencies. The maximum term over which we have cash flow hedge contracts in place related to foreign exchange risk on forecasted transactions as of March 31, 2022 is 12 months. We also enter into derivative instruments to hedge foreign exchange risk on certain intra-company and third-party receivables and payables and debt denominated in foreign currencies.

As part of our risk-management program, we perform sensitivity analyses to assess potential changes in the fair value of our foreign exchange instruments relating to hypothetical and reasonably possible near-term movements in foreign exchange rates.

A sensitivity analysis of changes in the fair value of foreign exchange contracts outstanding as of March 31, 2022, while not predictive in nature, indicated that if the U.S. Dollar uniformly weakened by 10% against all currencies, the net pre-tax asset balance of $9 million with respect to those contracts would change by $55 million.

The sensitivity analysis model recalculates the fair value of the foreign exchange contracts outstanding as of March 31, 2022 by replacing the actual exchange rates as of March 31, 2022 with exchange rates that are 10% weaker compared to the actual exchange rates for each applicable currency. All other factors are held constant. These sensitivity analyses disregard the possibility that currency exchange rates can move in opposite directions and that gains from one currency may or may not be offset by losses from another currency. The analyses also disregard the offsetting change in value of the underlying hedged transactions and balances.

In February 2022, the three-year cumulative inflation rate in Turkey exceeded 100 percent. As a result, we will begin reporting the results of our subsidiary in that jurisdiction using highly inflationary accounting, which requires that the functional currency of the entity be changed to the reporting currency of its parent, effective April 1, 2022. We are not able to quantify the anticipated impact of that change at the present time. As of March 31, 2022, our subsidiary in Turkey had net monetary assets of $43 million.

Our subsidiary in Argentina is reported using highly inflationary accounting effective July 1, 2018. Changes in the value of the Argentine Peso applied to our peso-denominated net monetary asset positions are recorded in income at the time of the change. As of March 31, 2022, our net monetary assets denominated in Argentine Pesos are not significant.

Interest Rate and Other Risks

Refer to the caption “Interest Rate and Other Risks” in the “Financial Instrument Market Risk” section of the 2021 Annual Report. There were no significant changes during the quarter ended March 31, 2022.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and our 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 Securities Exchange Act of 1934, as amended (the Exchange Act)) as of March 31, 2022. Based on that evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures were effective as of March 31, 2022.

Changes in Internal Control over Financial Reporting

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 March 31, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

The information in Part I, Item 1, Note 6 is incorporated herein by reference.

We do not believe that there have been any material changes to the risk factors previously disclosed in our 2021 Annual Report.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

In July 2012, we announced that our Board of Directors authorized us to repurchase up to $2.0 billion of our common stock on the open market or in private transactions. The Board of Directors increased this authority by an additional $1.5 billion in each of November 2016 and February 2018, by an additional $2.0 billion in November 2018 and by an additional $1.5 billion in October 2020. During the first quarter of 2022, we did not repurchase any shares under this authority. We had $1.3 billion remaining under this program as of March 31, 2022. This program does not have an expiration date.

Exhibit Index:

Exhibit Number						Description
C10.1*						Form of Performance Stock Unit Grant Agreement under Baxter International Inc. 2021 Incentive Plan
C 10.2*						Form of Restricted Stock Unit Grant Agreement under Baxter International Inc. 2021 Incentive Plan
C 10.3*						Form of Stock Option Grant Agreement under Baxter International Inc. 2021 Incentive Plan
C 10.4*						Offer Letter between Baxter Healthcare (Asia) Pte Ltd and Andrew Frye, dated July 1, 2019
C 10.5*						Equity Addendum to Offer Letter between Baxter Healthcare (Asia) Pte Ltd and Andrew Frye, dated July 1, 2019
C 10.6*						Mobility Addendum to Offer Letter between Baxter Healthcare (Asia) Pte Ltd and Andrew Frye, dated July 9, 2019
31.1*						Certification of Chief Executive Officer Pursuant to Rules 13a-14 (a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended.
31.2*						Certification of Chief Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended.
32.1*						Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*						Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*						XBRL Instance Document
101.SCH*						XBRL Taxonomy Extension Schema Document
101.CAL*						XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB*						XBRL Taxonomy Extension Label Linkbase Document
101.PRE*						XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF*						XBRL Taxonomy Extension Definition Linkbase Document
104*						Cover Page Interactive Data File (formatted as Inline XBRL and contained within the Inline XBRL Instance Document in Exhibit 101)

---

• Filed herewith.

C Management contract or compensatory plan or arrangement.

Signature

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

						BAXTER INTERNATIONAL INC.
						(Registrant)
Date: April 28, 2022
			By:			/s/ James K. Saccaro
						James K. Saccaro Executive Vice President and Chief Financial Officer (duly authorized officer and principal financial officer)