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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 September 30, 2024
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)
_________________________________________________________________________________
Delaware36-0781620
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
One Baxter Parkway,Deerfield,Illinois60015
(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 classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $1.00 par valueBAX (NYSE)New York Stock Exchange
NYSE Chicago
1.3% Global Notes due 2025BAX 25New York Stock Exchange
1.3% Global Notes due 2029BAX 29New 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 filerxAccelerated filero
Non-accelerated fileroSmaller 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 October 31, 2024 was 510,587,581 shares.




BAXTER INTERNATIONAL INC.
FORM 10-Q
For the quarterly period ended September 30, 2024






























PART I. FINANCIAL INFORMATION
Item 1.    Financial Statements
Baxter International Inc.
Condensed Consolidated Balance Sheets (unaudited)
(in millions, except share information)
September 30,
2024
December 31,
2023
Current assets:
Cash and cash equivalents $1,420 3,078 
Accounts receivable, net of allowances of $65 in 2024 and $62 in 2023
1,729 1,719 
Inventories2,103 1,918 
Prepaid expenses and other current assets720 706 
Current assets of discontinued operations2,892 2,179 
Total current assets8,864 9,600 
Property, plant and equipment, net 2,833 2,871 
Goodwill 5,783 5,793 
Other intangible assets, net 5,449 5,918 
Operating lease right-of-use assets327 336 
Other non-current assets 886 809 
Non-current assets of discontinued operations2,534 2,949 
Total assets $26,676 $28,276 
Current liabilities:
Current maturities of long-term debt and finance lease obligations$2,498 $2,667 
Accounts payable 841 881 
Accrued expenses and other current liabilities1,772 1,915 
Current liabilities of discontinued operations1,089 1,040 
Total current liabilities 6,200 6,503 
Long-term debt and finance lease obligations, less current portion10,437 11,089 
Operating lease liabilities259 265 
Other non-current liabilities 1,263 1,400 
Non-current liabilities of discontinued operations575 551 
Total liabilities 18,734 19,808 
Commitments and contingencies
Equity:
Common stock, $1 par value, authorized 2,000,000,000 shares, issued 683,494,944 shares in 2024 and 2023
683 683 
Common stock in treasury, at cost, 173,032,822 shares in 2024 and 175,861,893 shares in 2023
(11,084)(11,230)
Additional contributed capital6,391 6,389 
Retained earnings15,529 16,114 
Accumulated other comprehensive loss(3,647)(3,554)
Total Baxter stockholders’ equity7,872 8,402 
Noncontrolling interests70 66 
Total equity7,942 8,468 
Total liabilities and equity$26,676 $28,276 
The accompanying notes are an integral part of these condensed consolidated financial statements.
2


Baxter International Inc.
Condensed Consolidated Statements of Income (Loss) (unaudited)
(in millions, except per share data)
Three months ended
September 30,
Nine months ended
September 30,
2024202320242023
Net sales$2,699 $2,599 $7,883 $7,634 
Cost of sales1,666 1,543 4,858 4,584 
Gross margin1,033 1,056 3,025 3,050 
Selling, general and administrative expenses754 744 2,206 2,270 
Research and development expenses129 133 379 391 
Other operating income, net(5) (9)(14)
Operating income 155 179 449 403 
Interest expense, net87 127 251 367 
Other (income) expense, net(1)(12)(34)15 
Income from continuing operations before income taxes69 64 232 21 
Income tax expense8 27 70 59 
Income (loss) from continuing operations61 37 162 (38)
Income (loss) from discontinued operations, net of tax83 2,474 (290)2,455 
Net income (loss)144 2,511 (128)2,417 
Net income attributable to noncontrolling interests included in continuing operations    
Net income attributable to noncontrolling interests included in discontinued operations4 3 9 6 
Net income attributable to noncontrolling interests4 3 9 6 
Net income (loss) attributable to Baxter stockholders$140 $2,508 $(137)$2,411 
Income (loss) from continuing operations per common share
Basic$0.12 $0.07 $0.32 $(0.08)
Diluted$0.12 $0.07 $0.32 $(0.08)
Income (loss) from discontinued operations per common share
Basic$0.15 $4.88 $(0.59)$4.84 
Diluted$0.15 $4.86 $(0.59)$4.84 
Income (loss) per common share
Basic$0.27 $4.95 $(0.27)$4.76 
Diluted$0.27 $4.93 $(0.27)$4.76 
Weighted-average number of shares outstanding
Basic510 507 509 506 
Diluted512 509 511 506 
The accompanying notes are an integral part of these condensed consolidated financial statements.
3


Baxter International Inc.
Condensed Consolidated Statements of Comprehensive Income (Loss) (unaudited)
(in millions)
Three months ended
September 30,
Nine months ended
September 30,
2024202320242023
Income (loss) from continuing operations$61 $37 $162 $(38)
Other comprehensive income (loss) from continuing operations, net of tax:
Currency translation adjustments, net of tax expense (benefit) of ($19) and $12 for the three months ended September 30, 2024 and 2023, respectively, and ($3) and $2 for the nine months ended September 30, 2024 and 2023, respectively.
106 (36)(61)(39)
Pension and other postretirement benefits, net of tax expense (benefit) of ($2) and zero for the three months ended September 30, 2024 and 2023, respectively, and zero and ($3) for the nine months ended September 30, 2024 and 2023, respectively.
(6)(1)(2)(11)
Hedging activities, net of tax expense (benefit) of ($3) and $2 for the three months ended September 30, 2024 and 2023, respectively and zero and $3 for the nine months ended September 30, 2024 and 2023, respectively.
(9)5 2 10 
Total other comprehensive income (loss) from continuing operations, net of tax91 (32)(61)(40)
Comprehensive loss from continuing operations152 5 101 (78)
Income (loss) from discontinued operations, net of tax83 2,474 (290)2,455 
Other comprehensive income (loss) from discontinued operations
Currency translation adjustments, net of tax expense (benefit) of $(11) and $(1) for the three months ended September 30, 2024 and 2023, respectively, and $(15) and $(1) for the nine months ended September 30, 2024 and 2023, respectively.
90 134 (35)162 
Pension and other postretirement benefits, net of tax expense (benefit) of zero for the three and nine months ended September 30, 2024 and 2023
 (4)(1)(5)
Total other comprehensive income (loss) from discontinued operations90 130 (36)157 
Comprehensive income (loss) from discontinued operations173 2,604 (326)2,612 
Comprehensive income (loss)325 2,609 (225)2,534 
Less: Comprehensive income attributable to noncontrolling interests4 3 9 6 
Less: Other comprehensive loss attributable to noncontrolling interests  (4) 
Comprehensive income (loss) attributable to Baxter stockholders$321 $2,606 $(230)$2,528 
The accompanying notes are an integral part of these condensed consolidated financial statements.
4


Baxter International Inc.
Condensed Consolidated Statements of Changes in Equity (unaudited)
(in millions)
For the three months ended September 30, 2024
Baxter International Inc. stockholders' equity
Common stock sharesCommon stockCommon stock shares
in treasury
Common stock in
treasury
Additional contributed capitalRetained earningsAccumulated other comprehensive
loss
Total Baxter stockholders' equityNoncontrolling interestsTotal equity
Balance as of July 1, 2024683 $683 173 $(11,104)$6,353 $15,539 $(3,828)$7,643 $65 $7,708 
Net income— — — — — 140 — 140 4 144 
Other comprehensive income (loss)— — — — — — 181 181 — 181 
Stock issued under employee benefit plans and other— — — 20 38 — — 58 — 58 
Dividends declared on common stock— — — — — (150)— (150)— (150)
Change in noncontrolling interests— — — — — — — — 1 1 
Balance as of September 30, 2024
683 $683 173 $(11,084)$6,391 $15,529 $(3,647)$7,872 $70 $7,942 
For the nine months ended September 30, 2024
Baxter International Inc. stockholders' equity
Common stock sharesCommon stockCommon stock shares in treasuryCommon stock in treasuryAdditional contributed capitalRetained earningsAccumulated other comprehensive lossTotal Baxter stockholders' equityNoncontrolling interestsTotal equity
Balance as of January 1, 2024683 $683 176 $(11,230)$6,389 $16,114 $(3,554)$8,402 $66 $8,468 
Net loss— — — — — (137)— (137)9 (128)
Other comprehensive income (loss)— — — — — — (93)(93)(4)(97)
Stock issued under employee benefit plans and other— — (3)146 2 — — 148 — 148 
Dividends declared on common stock— — — — — (448)— (448)— (448)
Change in noncontrolling interests— — — — — — — — (1)(1)
Balance as of September 30, 2024
683 $683 173 $(11,084)$6,391 $15,529 $(3,647)$7,872 $70 $7,942 
For the three months ended September 30, 2023
Baxter International Inc. stockholders' equity
Common stock sharesCommon stockCommon stock shares in treasuryCommon stock in treasuryAdditional contributed capitalRetained earningsAccumulated other comprehensive lossTotal Baxter stockholders' equityNoncontrolling interestsTotal equity
Balance as of July 1, 2023683 $683 177 $(11,296)$6,341 $13,655 $(3,814)$5,569 $62 $5,631 
Net income— — — — 2,508 — 2,508 3 2,511 
Other comprehensive income (loss)— — — — — — 98 98 — 98 
Stock issued under employee benefit plans and other— — (1)47 27 — — 74 — 74 
Dividends declared on common stock— — — — — (148)(148)— (148)
Balance as of September 30, 2023683 $683 176 $(11,249)$6,368 $16,015 $(3,716)$8,101 $65 $8,166 
For the nine months ended September 30, 2023
Baxter International Inc. stockholders' equity
Common stock sharesCommon stockCommon stock shares in treasuryCommon stock in treasuryAdditional contributed capitalRetained earningsAccumulated other comprehensive income lossTotal Baxter stockholders' equityNoncontrolling interestsTotal equity
Balance as of January 1, 2023683 $683 179 $(11,389)$6,322 $14,050 $(3,833)$5,833 $62 $5,895 
Net income— — — — — 2,411 — 2,411 6 2,417 
Other comprehensive income (loss)— — — — — — 117 117 — 117 
Stock issued under employee benefit plans and other— — (3)140 46 — — 186 — 186 
Dividends declared on common stock— — — — — (446)— (446)— (446)
Change in noncontrolling interests— — — — — — — — (3)(3)
Balance as of September 30, 2023
683 $683 176 $(11,249)$6,368 $16,015 $(3,716)$8,101 $65 $8,166 
The accompanying notes are an integral part of these condensed consolidated financial statements.
5


Baxter International Inc.
Condensed Consolidated Statements of Cash Flows (unaudited)
(in millions)
Nine Months Ended September 30,
20242023
Cash flows from operations
Net income (loss)$(128)$2,417 
Less: Income (loss) from discontinued operations, net of tax(290)2,455 
Income (loss) from continuing operations162 (38)
Adjustments to reconcile net loss to cash flows from operations:
Depreciation and amortization752 720 
Deferred income taxes(136)(239)
Stock compensation75 90 
Net periodic pension and other postretirement costs(21)(19)
Other long-lived asset impairments42 3 
Other20 25 
Changes in balance sheet items:
Accounts receivable, net(17)52 
Inventories(180)(120)
Prepaid expenses and other current assets(61)(41)
Accounts payable 3 161 
Accrued expenses and other current liabilities(192)261 
Other(71)(63)
Cash flows from operations - continuing operations376 792 
Cash flows from operations - discontinued operations155 403 
Cash flows from operations531 1,195 
Cash flows from investing activities
Capital expenditures(314)(340)
Acquisitions of developed technology and investments(9)(4)
Proceeds from sale of marketable equity securities34  
Other investing activities, net8 19 
Cash flows from investing activities - continuing operations(281)(325)
Cash flows from investing activities - discontinued operations(140)3,768 
Cash flows from investing activities(421)3,443 
Cash flows from financing activities
Repayments of debt(827)(353)
Net increases in debt with original maturities of three months or less 214 
Cash dividends on common stock(443)(439)
Proceeds from stock issued under employee benefit plans63 86 
Other financing activities, net(15)(62)
Cash flows from financing activities(1,222)(554)
Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash - continuing operations(45)(37)
Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash - discontinued operations39 23 
Increase (decrease) in cash, cash equivalents and restricted cash(1,118)4,070 
Cash, cash equivalents and restricted cash at beginning of period (1)
3,198 1,722 
Cash, cash equivalents and restricted cash at end of period (1)
2,080 5,792 
Less cash and cash equivalents of discontinued operations658 72 
Cash, cash equivalents and restricted cash of continuing operations$1,422 $5,720 
(1) The following table provides a reconciliation of cash, cash equivalents and restricted cash shown above to the amounts reported within the condensed consolidated balance sheet as of September 30, 2024, December 31, 2023, and September 30, 2023 (in millions):
September 30, 2024December 31, 2023September 30, 2023
Cash and cash equivalents$1,420 $3,078 $5,716 
Restricted cash included in other non-current assets2 4 4 
Cash, cash equivalents and restricted cash$1,422 $3,082 $5,720 
The accompanying notes are an integral part of these condensed consolidated financial statements.
6


Baxter International Inc.
Notes to Condensed Consolidated Financial Statements (unaudited)
1. BASIS OF PRESENTATION
The unaudited interim condensed consolidated financial statements of Baxter International Inc. and its subsidiaries (we, our or Baxter) have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (SEC) for interim financial reporting. Accordingly, certain information and note disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP) in the United States have been condensed or omitted. These unaudited interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in our Annual Report on Form 10-K for the year ended December 31, 2023 (2023 Annual Report).
In the opinion of management, the unaudited interim condensed consolidated financial statements reflect all adjustments necessary for a fair statement of the financial position, results of operations and cash flows for the periods presented. All such adjustments, unless otherwise noted herein, are of a normal, recurring nature. The disclosures presented in our notes to the consolidated financial statements are presented on a continuing operations basis. The results of operations for the current interim period are not necessarily indicative of the results of operations to be expected for the full year.
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, for an aggregate purchase price of $3.80 billion. After giving effect to certain closing adjustments, we currently expect to receive approximately $3.50 billion in cash with net after-tax proceeds currently estimated to be in the range of $3.15 billion to $3.25 billion. The transaction is currently expected to close in late 2024 or early 2025, subject to the receipt of customary regulatory approvals and satisfaction of other closing conditions. 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 condensed consolidated financial statements, and our prior period results have been adjusted to reflect discontinued operations presentation. See Note 2 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. We are actively working with customers, regulators and other stakeholders to manage inventory and minimize disruption to patient care as we work to fully restore 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, and we are working closely with our insurance carriers and claims adjusters to ascertain the full amount of insurance proceeds due to us as a result of the damages and the loss we suffered as a result of Hurricane Helene (which proceeds are likely to be less than the applicable losses). 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. In the third quarter of 2024, we recorded $25 million of pre-tax net charges related to damages caused by Hurricane Helene. This consisted of $44 million related to the write-off of damaged inventory and fixed assets offset by a receivable of $19 million, which is the amount of the loss, net of our insurance deductible, related to insurance recoveries expected as a result of those asset write-offs. These amounts were recorded as a component of cost of sales in the condensed consolidated statements of income for the three and nine month periods ended September 30, 2024. At this time, the full amount of combined property damage and business interruption costs cannot be estimated and any additional insurance recoveries are not realizable, and accordingly, no additional amounts have been recorded as of September 30, 2024. On November 1, 2024, we received $101 million of cash related to insurance proceeds which included recoveries for expenses incurred after the balance sheet date. We expect to receive additional related insurance proceeds in the future.
Risks and Uncertainties
Supply Constraints and Global Economic Conditions
In recent years, we have experienced significant challenges to our global supply chain, including production delays and interruptions, increased costs and shortages of raw materials and component parts (including resins and
7


electromechanical devices), higher transportation costs, adverse impacts from significant weather events (including Hurricane Helene and the flooding of our North Cove facility), elevated inflation levels and interest rates, disruptions to certain ports of call and access to shipping lanes around the world, the war in Ukraine, the conflict in the Middle East, tensions amongst China, Taiwan, and the U.S., and other geopolitical events. While we have seen improvements in the availability of component parts and improved pricing of raw materials and on transportation costs, some of these challenges (such as additional transportation costs resulting from Hurricane Helene as we transfer product across our global network in the interest of increasing the availability of intravenous and peritoneal dialysis solutions for our customers while we work to fully remediate our North Cove facility) are expected to have a negative impact on our results of operations in the future.
2. DISCONTINUED OPERATIONS
A component of an entity is reported in discontinued operations after meeting the criteria for held-for-sale classification if the disposition represents a strategic shift that has (or will have) a major effect on the entity's operations and financial results. The condensed consolidated financial statements reflect discontinued operations presentation for two strategic actions, as described below.
Discontinued Operations - Kidney Care
On August 12, 2024, we entered into an EPA to sell our Kidney Care business, subject to receipt of customary regulatory approvals and satisfaction of other closing conditions. That business, which is comprised of our Kidney Care segment, provides chronic and acute dialysis therapies and services, including peritoneal dialysis, hemodialysis, continuous renal replacement therapies, and other organ support therapies. Pursuant to the EPA, we expect to sell the Kidney Care business to Carlyle for an aggregate purchase price of $3.80 billion. After giving effect to certain adjustments, we currently expect to receive approximately $3.50 billion of net pre-tax cash proceeds (approximately $3.15 billion to $3.25 billion after tax). The transaction is currently expected to close in late 2024 or early 2025, subject to receipt of customary regulatory approvals and satisfaction of other closing conditions. We intend to use the net after-tax proceeds from this transaction to repay certain of our debt obligations, consistent with our stated capital allocation priorities.
We concluded that our Kidney Care business met the criteria to be classified as held-for-sale in August 2024. We analyzed the quantitative and qualitative factors relevant to the pending sale of our Kidney Care business, including its significance to our overall net income (loss), earnings (loss) per share, and net assets, and determined that those conditions for discontinued operations presentation had been met. As such, the financial position, results of operations and cash flows of that business are reported as discontinued operations in the accompanying condensed consolidated financial statements. Prior period amounts have been adjusted to reflect discontinued operations presentation.
Upon closing of the pending sale of the Kidney Care business, Baxter and Vantive will enter into several agreements, including a Manufacturing and Supply Agreement (Kidney Care MSA), a long-term Master Services Agreement, a Distribution Agreement, a Transition Services Agreement (Kidney Care TSA), and an Intellectual Property Agreement. Pursuant to the Kidney Care MSA, Baxter and the Kidney Care divested entities will provide each other with certain dialysis-related products, other products, product components and fulfillment services for a period up to 10 years post-closing (with certain extension rights as provided therein). Pursuant to the Kidney Care TSA, Baxter and the entities that will be divested in connection with the pending Kidney Care sale (the Kidney Care divested entities) will provide each other, on an interim basis, certain transitional services for up to 30 months post-closing (with certain extension rights as provided therein) to help ensure business continuity and help minimize disruptions to the entities' operations post-closing. Services to be provided under the TSA include IT, supply chain and certain other corporate and administrative services. Pursuant to the EPA, Baxter will retain (i) the manufacture and sale of saline solutions and (ii) the plastics operations of Baxter and its subsidiaries at its Mountain Home, Arkansas facility, which is not part of the Kidney Care segment.
Discontinued Operations - BioPharma Solutions
On September 29, 2023, we sold our BioPharma Solutions (BPS) business to Advent International and Warburg Pincus (collectively, the BPS buyers).
The BPS business, which was historically reported within our former Americas segment, provided contract manufacturing and development services, which include sterile fill-finish manufacturing and support services across clinical and commercial applications, primarily serving customers in the pharmaceutical industry. BPS was historically
8


operated through our former, wholly-owned subsidiaries Baxter Pharmaceutical Solutions LLC, a Delaware limited liability company, and Baxter Oncology GmbH, a German limited liability company (collectively, the BPS divested entities).
We concluded that our BPS business met the criteria to be classified as held-for-sale in May 2023. We analyzed the quantitative and qualitative factors relevant to the divestiture of our BPS business, including its significance to our overall net income and earnings per share, and determined that those conditions for discontinued operations presentation had been met. As such, the financial position, results of operations and cash flows of that business are reported as discontinued operations in the accompanying condensed consolidated financial statements. Prior period amounts have been adjusted to reflect discontinued operations presentation.
At closing of the transaction, Baxter entered into a Transition Services Agreement (BPS TSA) and a Master Commercial Manufacturing and Supply Agreement (BPS MSA) with the divested entities. Pursuant to the BPS TSA, Baxter and the BPS divested entities provide to each other, on an interim basis, specific transition services for up to 24 months post-closing to help ensure business continuity and minimize disruptions. Services provided under the BPS TSA include finance, information technology, human resources, integrated supply chain, and certain other administrative services. Pursuant to the BPS MSA, the BPS divested entities provide development, manufacturing, regulatory, and other related services for certain Baxter pharmaceutical products for up to 5 years post-closing (with certain extension rights as provided therein).
Results of Discontinued Operations and Assets and Liabilities of Discontinued Operations
The following tables summarize the major classes of line items included in income (loss) from discontinued operations, net of tax, for the three and nine months ended September 30, 2024 and 2023:
Kidney CareBioPharma SolutionsTotal
Three Months Ended September 30,Three Months Ended September 30,Three Months Ended September 30,
(in millions)202420232024202320242023
Net sales$1,155 $1,109 $ $191 $1,155 $1,300 
Cost of sales731 1,048  81 731 1,129 
Gross margin424 61  110 424 171 
Selling, general and administrative expenses278 258  15 278 273 
Research and development expenses41 33  1 41 34 
Other operating income, net(1)   (1) 
Operating income (loss)106 (230) 94 106 (136)
Interest expense, net1 1   1 1 
Other (income) expense, net(8)5  2 (8)7 
Income (loss) from discontinued operations before gain on disposition and income taxes113 (236) 92 113 (144)
Gain on disposition   2,890  2,890 
Income tax expense (benefit)30 (250) 522 30 272 
Income from discontinued operations, net of tax83 14  2,460 83 2,474 
Less: Net income attributable to noncontrolling interest included in discontinued operations4 3   4 3 
Net income attributable to Baxter stockholders included in discontinued operations$79 $11 $ $2,460 $79 $2,471 
9


Kidney CareBioPharma SolutionsTotal
Nine Months Ended September 30,Nine Months Ended September 30,Nine Months Ended September 30,
202420232024202320242023
Net sales$3,375 $3,294 $ $469 $3,375 $3,763 
Cost of sales2,125 2,841  216 2,125 3,057 
Gross margin1,250 453  253 1,250 706 
Selling, general and administrative expenses874 691  44 874 735 
Research and development expenses140 104  2 140 106 
Goodwill impairment430    430  
Other operating income, net(1)   (1) 
Operating income (loss)(193)(342) 207 (193)(135)
Interest expense, net 2    2 
Other (income) expense, net(2)18  2 (2)20 
Income (loss) from discontinued operations before income taxes(191)(362) 205 (191)(157)
Gain on disposition   2,890  2,890 
Income tax expense (benefit)99 (258) 536 99 278 
Income (loss) from discontinued operations, net of tax(290)(104) 2,559 (290)2,455 
Less: Net income attributable to noncontrolling interests included in discontinued operations9 6   9 6 
Net income (loss) attributable to Baxter stockholders included in discontinued operations$(299)$(110)$ $2,559 $(299)$2,449 
For the three and nine months ended September 30, 2024, selling, general and administrative expenses (SG&A) includes $69 million and $236 million, respectively, of separation-related costs incurred in connection with the pending sale of our Kidney Care business. For the three months ended September 30, 2023, SG&A includes separation-related costs of $67 million and $8 million, incurred in connection with the pending sale of our Kidney Care business and the sale of BPS, respectively. For the nine months ended September 30, 2023, SG&A includes separation-related costs of $108 million and $15 million, incurred in connection with the pending sale of our Kidney Care business and the sale of BPS, respectively.
10


The following table summarizes the carrying amounts of the major classes of assets and liabilities classified as discontinued operations, related to our Kidney Care business, in the condensed consolidated balance sheets as of September 30, 2024 and December 31, 2023:
(in millions)September 30, 2024December 31, 2023
Cash and cash equivalents$658 $116 
Accounts receivable, net of allowances1,045 971 
Inventories960 906 
Prepaid expenses and other current assets229 186 
Current assets of discontinued operations2,892 2,179 
Property, plant and equipment, net1,542 1,562 
Goodwill276 721 
Other intangible assets, net147 161 
Operating lease right-of-use assets209 188 
Other non-current assets360 317 
Non-current assets of discontinued operations2,534 2,949 
Assets of discontinued operations$5,426 $5,128 
Current maturities of finance lease obligations$ $1 
Accounts payable396 360 
Accrued expenses and other current liabilities693 679 
Current liabilities of discontinued operations1,089 1,040 
Long-term finance lease obligations, less current portion40 41 
Operating lease liabilities186 173 
Other non-current liabilities349 337 
Non-current liabilities of discontinued operations575 551 
Liabilities of discontinued operations$1,664 $1,591 

3. SUPPLEMENTAL FINANCIAL INFORMATION
Allowance for Doubtful Accounts
The following table is a summary of the changes in our allowance for doubtful accounts for the three and nine months ended September 30, 2024 and 2023.
Three Months Ended September 30,Nine Months Ended September 30,
(in millions)2024202320242023
Balance at beginning of period$67 $61 $62 $50 
Charged to costs and expenses4 2 4 17 
Write-offs(3)1 (6)(2)
Currency translation adjustments(3)2 5 1 
Balance at end of period$65 $66 $65 $66 
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Inventories
(in millions)September 30,
2024
December 31,
2023
Raw materials$532 $530 
Work in process256 234 
Finished goods1,315 1,154 
Inventories$2,103 $1,918 
Property, Plant and Equipment, Net
(in millions)September 30,
2024
December 31,
2023
Property, plant and equipment, at cost$7,605 $7,650 
Accumulated depreciation(4,772)(4,779)
Property, plant and equipment, net$2,833 $2,871 
Interest Expense, Net
Three Months Ended September 30,Nine Months Ended September 30,
(in millions)2024202320242023
Interest expense, net of capitalized interest$101 $136 $308 $394 
Interest income(14)(9)(57)(27)
Interest expense, net$87 $127 $251 $367 
Other (Income) Expense, Net
Three Months Ended September 30,Nine Months Ended September 30,
(in millions)2024202320242023
Foreign exchange losses, net$7 $10 $21 49 
Pension and other postretirement benefit plans(9)(15)(34)(37)
Change in fair value of marketable equity securities (3)(3)3 
Non-marketable investment impairments   13 
Other, net1 (4)(18)(13)
Other (income) expense, net$(1)$(12)$(34)$15 
Non-Cash Operating and Investing Activities
Right-of-use operating lease assets obtained in exchange for lease obligations for the nine months ended September 30, 2024 and 2023 were $54 million and $55 million, respectively.
Purchases of property, plant and equipment included in accounts payable as of September 30, 2024 and 2023 were $34 million and $30 million, respectively.
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4. GOODWILL AND OTHER INTANGIBLE ASSETS, NET
Goodwill
The following is a reconciliation of goodwill by segment.
(in millions)Medical Products and TherapiesHealthcare Systems and TechnologiesPharmaceuticalsTotal
Balance as of December 31, 2023$1,241 $3,989 $563 $5,793 
Currency translation (7) (3)(10)
Balance as of September 30, 2024$1,234 $3,989 $560 $5,783 
Other intangible assets, net
The following is a summary of our other intangible assets.
Indefinite-lived intangible assets
(in millions)Customer relationshipsDeveloped technology, including patentsTrade namesOther amortized intangible assetsTrade namesIn process Research and Development
Total
September 30, 2024
Gross other intangible assets$3,390 $3,182 $963 $87 $680 $157 $8,459 
Accumulated amortization(824)(2,027)(92)(67)— — (3,010)
Other intangible assets, net$2,566 $1,155 $871 $20 $680 $157 $5,449 
December 31, 2023
Gross other intangible assets$3,390 $3,181 $964 $86 $680 $157 $