| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) | |||||||||||||
| (Address of Principal Executive Offices) | (Zip Code) | |||||||||||||
| Title of Each Class | Trading Symbol(s) | Name of Each Exchange on Which Registered | ||||||||||||
| ☑ | Accelerated filer | ☐ | ||||||||||||
| Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||
| Emerging growth company | ||||||||||||||
| Page Number | ||||||||
| Segments | Location | Owned/Leased | ||||||
| Americas | ||||||||
| Aibonito, Puerto Rico | Leased | |||||||
| Alliston, Canada | Owned | |||||||
| Cali, Colombia | Owned | |||||||
| Cartago, Costa Rica | Owned | |||||||
| Cuernavaca, Mexico | Owned | |||||||
| Guayama, Puerto Rico | Owned | |||||||
| Haina, Dominican Republic | Leased | |||||||
| Hayward, California | Leased | |||||||
| Round Lake, Illinois | Owned | |||||||
| Bloomington, Indiana | Owned/Leased(1) | |||||||
| Cleveland, Mississippi | Leased | |||||||
| Medina, New York | Leased | |||||||
| Jayuya, Puerto Rico | Leased | |||||||
| Opelika, Alabama | Owned | |||||||
| Pesa, Mexico | Leased | |||||||
| Sao Paulo, Brazil | Owned | |||||||
| Tijuana, Mexico | Owned | |||||||
| Mountain Home, Arkansas | Owned/Leased(1) | |||||||
| North Cove, North Carolina | Owned | |||||||
| St. Paul, Minnesota | Leased | |||||||
| Irvine, California | Owned | |||||||
| Mountain View, California | Leased | |||||||
| APAC | ||||||||
| Ahmedabad, India | Owned | |||||||
| Guangzhou, China | Owned | |||||||
| Shanghai, China | Owned | |||||||
| Suzhou, China | Owned | |||||||
| Toongabbie, Australia | Owned | |||||||
| Woodlands, Singapore | Owned/Leased(2) | |||||||
| Canlubang, Philippines | Leased | |||||||
| Amata, Thailand | Owned | |||||||
| Tianjin, China | Owned | |||||||
| Miyazaki, Japan | Owned | |||||||
| EMEA | ||||||||
| Castlebar, Ireland | Owned | |||||||
| Grosotto, Italy | Owned | |||||||
| Halle, Germany | Owned | |||||||
| Hechingen, Germany | Leased | |||||||
| Lessines, Belgium | Owned | |||||||
| Liverpool, United Kingdom | Leased | |||||||
| Lund, Sweden | Leased | |||||||
| Marsa, Malta | Owned | |||||||
| Medolla, Italy | Owned | |||||||
| Meyzieu, France | Owned | |||||||
| Rostock, Germany | Leased | |||||||
| Sabinanigo, Spain | Owned | |||||||
| San Vittore, Switzerland | Owned | |||||||
| Sondalo, Italy | Owned | |||||||
| Swinford, Ireland | Owned | |||||||
| Thetford, United Kingdom | Owned | |||||||
| Tel Aviv, Israel | Leased | |||||||
| Elstree, United Kingdom | Leased | |||||||
| Tunis, Tunisia | Owned | |||||||
| Dammam, Saudi Arabia | Owned | |||||||
| Hillrom | ||||||||
| Acton, Massachusetts | Leased | |||||||
| Batesville, Indiana | Owned | |||||||
| Milwaukee, Wisconsin | Owned | |||||||
| Suzhou, China | Leased | |||||||
| Taicang, China | Leased | |||||||
| Pluvigner, France | Owned | |||||||
| Saalfeld, Germany | Owned | |||||||
| Navan, County Meath, Ireland | Owned | |||||||
| Tijuana, Mexico | Owned | |||||||
| Monterrey, Mexico | Owned | |||||||
| Luleå, Sweden | Owned | |||||||

| years ended December 31 (in millions) | 2022 | 2021 | ||||||
| Gross Margin | ||||||||
| Intangible asset amortization expense | $ | (466) | $ | (287) | ||||
Intangible asset impairments1 | (344) | — | ||||||
Business optimization items2 | (28) | (53) | ||||||
Product-related items3 | (44) | — | ||||||
Acquisition and integration costs4 | (170) | (50) | ||||||
European medical devices regulation5 | (48) | (42) | ||||||
| Total Special Items | $ | (1,100) | $ | (432) | ||||
| Impact on Gross Margin Ratio | (7.3 pts) | (3.4 pts) | ||||||
| Selling, General and Administrative (SG&A) Expenses | ||||||||
| Intangible asset amortization expense | $ | 287 | $ | 11 | ||||
Business optimization items2 | 194 | 60 | ||||||
Divestiture-related costs6 | 12 | — | ||||||
Acquisition and integration costs4 | 82 | 144 | ||||||
Investigation and related costs7 | — | 31 | ||||||
Litigation matter8 | — | 13 | ||||||
| Total Special Items | $ | 575 | $ | 259 | ||||
| Impact on SG&A Expense Ratio | 3.8 pts | 2.0 pts | ||||||
| R&D Expenses | ||||||||
Business optimization items2 | $ | 3 | $ | 1 | ||||
| Total Special Items | $ | 3 | $ | 1 | ||||
| Impact on R&D Expense Ratio | 0.0 pts | 0.0 pts | ||||||
| Goodwill Impairments | ||||||||
Goodwill impairments1 | $ | 2,812 | $ | — | ||||
| Total Special Items | $ | 2,812 | $ | — | ||||
| Other Operating Expense (Income), net | ||||||||
Loss on product divestiture arrangement9 | $ | 54 | $ | — | ||||
Loss on subsidiary liquidation10 | 21 | — | ||||||
Acquisition and integration costs (income)4 | (39) | (6) | ||||||
| Total Special Items | $ | 36 | $ | (6) | ||||
| Interest Expense, Net | ||||||||
Acquisition and integration costs4 | $ | — | $ | 48 | ||||
| Total Special Items | $ | — | $ | 48 | ||||
| Other (Income) Expense, Net | ||||||||
Pension curtailment11 | $ | (11) | $ | — | ||||
Reclassification of cumulative translation loss to earnings12 | 65 | — | ||||||
Loss on debt extinguishment13 | — | 5 | ||||||
| Total Special Items | $ | 54 | $ | 5 | ||||
| Income Tax Expense (Benefit) | ||||||||
Tax matters14 | $ | 25 | $ | (54) | ||||
Tax effects of special items15 | (400) | (137) | ||||||
| Total Special Items | $ | (375) | $ | (191) | ||||
| Impact on Effective Tax Rate | (22.8 pts) | (4.5 pts) | ||||||
| Percent change | ||||||||||||||||||||
| years ended December 31 (in millions) | 2022 | 2021 | At actual currency rates | At constant currency rates | ||||||||||||||||
| United States | $ | 7,223 | $ | 5,180 | 39 | % | 39 | % | ||||||||||||
| International | 7,890 | 7,604 | 4 | % | 12 | % | ||||||||||||||
| Total net sales | $ | 15,113 | $ | 12,784 | 18 | % | 23 | % | ||||||||||||
| Percent change | ||||||||||||||||||||
| years ended December 31 (in millions) | 2022 | 2021 | At actual currency rates | At constant currency rates | ||||||||||||||||
| Renal Care | $ | 3,748 | $ | 3,900 | (4) | % | 2 | % | ||||||||||||
| Medication Delivery | 2,886 | 2,880 | 0 | % | 3 | % | ||||||||||||||
| Pharmaceuticals | 2,126 | 2,291 | (7) | % | (1) | % | ||||||||||||||
| Clinical Nutrition | 931 | 964 | (3) | % | 4 | % | ||||||||||||||
| Advanced Surgery | 998 | 977 | 2 | % | 8 | % | ||||||||||||||
| Acute Therapies | 701 | 782 | (10) | % | (6) | % | ||||||||||||||
| BioPharma Solutions | 644 | 669 | (4) | % | 2 | % | ||||||||||||||
| Patient Support Systems | 1,487 | 115 | NM | NM | ||||||||||||||||
| Front Line Care | 1,148 | 70 | NM | NM | ||||||||||||||||
| Surgical Solutions | 304 | 27 | NM | NM | ||||||||||||||||
| Other | 140 | 109 | 28 | % | 30 | % | ||||||||||||||
| Total Baxter | $ | 15,113 | $ | 12,784 | 18 | % | 23 | % | ||||||||||||
| years ended December 31 | 2022 | % of net sales | 2021 | % of net sales | $ change | % change | |||||||||||||||||
| Gross margin | $ | 5,397 | 35.7 | % | $ | 5,105 | 39.9 | % | $ | 292 | 5.7 | % | |||||||||||
| SG&A | $ | 3,887 | 25.7 | % | $ | 2,867 | 22.4 | % | $ | 1,020 | 35.6 | % | |||||||||||
| R&D | $ | 605 | 4.0 | % | $ | 534 | 4.2 | % | $ | 71 | 13.3 | % | |||||||||||
| Net sales | Operating income (loss) | ||||||||||||||||
| years ended December 31 (in millions) | 2022 | 2021 | 2022 | 2021 | |||||||||||||
| Americas | $ | 6,710 | $ | 6,666 | $ | 2,384 | $ | 2,612 | |||||||||
| EMEA | 2,879 | 3,115 | 607 | 632 | |||||||||||||
| APAC | 2,585 | 2,791 | 623 | 623 | |||||||||||||
| Hillrom | 2,939 | 212 | 730 | (80) | |||||||||||||
| Corporate and other | — | — | (6,287) | (2,077) | |||||||||||||
| Total | $ | 15,113 | $ | 12,784 | $ | (1,943) | $ | 1,710 | |||||||||
| Standard & Poor’s | Fitch | Moody’s | |||||||||
| Ratings | |||||||||||
| Senior debt | BBB | BBB | Baa2 | ||||||||
| Short-term debt | A2 | F2 | P2 | ||||||||
| Outlook | Negative | Negative | Stable | ||||||||
| (in millions) | Total | Less than one year | More than one year | ||||||||
| Long-term debt and finance lease obligations, including current maturities | $ | 16,702 | $ | 1,404 | $ | 15,298 | |||||
Interest on short- and long-term debt and finance lease obligations 1 | 3,015 | 387 | 2,628 | ||||||||
| Operating leases | 629 | 127 | 502 | ||||||||
Other non-current liabilities2 | 457 | — | 457 | ||||||||
Purchase obligations3 | 1,393 | 819 | 574 | ||||||||
Contractual obligations2 | $ | 22,196 | $ | 2,737 | $ | 19,459 | |||||
• | our ability to execute and complete strategic initiatives, asset dispositions and other transactions, including the proposed spinoff of our Renal Care and Acute Therapies product categories, our plans to simplify our operating model and manufacturing footprint and our strategic alternatives for our BPS product category, the timing for such transactions, the ability to satisfy any applicable conditions and the expected proceeds, consideration and benefits; | |||||||
• | failure to accurately forecast or achieve our short-and long-term financial improvement performance and goals (including with respect to our recently announced strategic actions) and related impacts on our liquidity; | |||||||
• | our ability to execute on our capital allocation plans, including our debt repayment plans, the timing and amount of any dividends, share repurchases and divestiture proceeds and the capital structure of the public company that we expect to form as a result of the proposed spinoff (and the resulting capital structure for the remaining company); | |||||||
• | the impact of global economic conditions (including, among other things, inflation levels, interest rates, the potential for a recession, the ongoing war in Ukraine, 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, or the anticipation of any of the foregoing, on our operations and on our employees, customers and suppliers, including foreign governments in countries in which we operate; | |||||||
• | downgrades to our credit ratings or ratings outlooks, and the related impact on our funding costs and liquidity; | |||||||
• | 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 consumer preferences, which has led to and may continue to lead to increased inventory levels, 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; | |||||||
• | the continuity, availability and pricing of acceptable raw materials and component parts (and our ability to pass some or all of these costs to our customers through recent price increases), and the related continuity of our manufacturing and distribution 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); | |||||||
• | product development risks, including satisfactory clinical performance and obtaining required regulatory approvals (including as a result of evolving regulatory requirements), 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; | |||||||
• | loss of key employees, the occurrence of labor disruptions or the inability to identify and recruit new employees; | |||||||
• | product quality or patient safety issues leading to product recalls, withdrawals, launch delays, warning letters, import bans, sanctions, seizures, litigation, or declining sales, including the focus on evaluating product portfolios for the potential presence or formation of nitrosamines; | |||||||
• | breaches or failures of our information technology systems or products, including by cyber-attack, data leakage, unauthorized access or theft (as a result of 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 GPOs and IDNs), 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 annual 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 ethylene oxide litigation or other claims; | |||||||
• | 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); | |||||||
• | actions by tax authorities in connection with ongoing tax audits; | |||||||
• | other factors identified elsewhere in this Annual Report on Form 10-K including those factors described in Item 1A and other filings with the SEC, all of which are available on our website. | |||||||
| as of December 31 (in millions, except share information) | 2022 | 2021 | |||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
Accounts receivable, net of allowance of $ | |||||||||||
| Inventories | |||||||||||
| Prepaid expenses and other current assets | |||||||||||
| Total current assets | |||||||||||
| Property, plant and equipment, net | |||||||||||
| Goodwill | |||||||||||
| Other intangible assets, net | |||||||||||
| Operating lease right-of-use assets | |||||||||||
| Other non-current assets | |||||||||||
| Total assets | $ | $ | |||||||||
| Current liabilities: | |||||||||||
| Short-term debt | $ | $ | |||||||||
| Current maturities of long-term debt and finance lease obligations | |||||||||||
| Accounts payable | |||||||||||
| Accrued expenses and other current liabilities | |||||||||||
| Total current liabilities | |||||||||||
| Long-term debt and finance lease obligations | |||||||||||
| Operating lease liabilities | |||||||||||
| Other non-current liabilities | |||||||||||
| Total liabilities | |||||||||||
| Commitments and contingencies | |||||||||||
| Equity: | |||||||||||
Common stock, $ | |||||||||||
Common stock in treasury, at cost, | ( | ( | |||||||||
| Additional contributed capital | |||||||||||
| Retained earnings | |||||||||||
| Accumulated other comprehensive (loss) income | ( | ( | |||||||||
| Total Baxter stockholders’ equity | |||||||||||
| Noncontrolling interests | |||||||||||
| Total equity | |||||||||||
| Total liabilities and equity | $ | $ | |||||||||
| years ended December 31 (in millions, except per share data) | 2022 | 2021 | 2020 | ||||||||
| Net sales | $ | $ | $ | ||||||||
| Cost of sales | |||||||||||
| Gross margin | |||||||||||
| Selling, general and administrative expenses | |||||||||||
| Research and development expenses | |||||||||||
| Goodwill impairments | |||||||||||
| Other operating expense (income), net | ( | ( | |||||||||
| Operating income (loss) | ( | ||||||||||
| Interest expense, net | |||||||||||
| Other (income) expense, net | |||||||||||
| Income (loss) before income taxes | ( | ||||||||||
| Income tax expense (benefit) | |||||||||||
| Net income (loss) | ( | ||||||||||
| Net income attributable to noncontrolling interests | |||||||||||
| Net income (loss) attributable to Baxter stockholders | $ | ( | $ | $ | |||||||
| Earnings (loss) per share | |||||||||||
| Basic | $ | ( | $ | $ | |||||||
| Diluted | $ | ( | $ | $ | |||||||
| Weighted-average number of shares outstanding | |||||||||||
| Basic | |||||||||||
| Diluted | |||||||||||
| years ended December 31 (in millions) | 2022 | 2021 | 2020 | ||||||||
| Net income (loss) | $ | ( | $ | $ | |||||||
| Other comprehensive (loss) income, net of tax: | |||||||||||
Currency translation adjustments, net of tax expense (benefit) of $ | ( | ( | |||||||||
Pension and other postretirement benefit plans, net of tax expense of $ | |||||||||||
Hedging activities, net of tax expense (benefit) of $ | ( | ||||||||||
Available-for-sale debt securities, net of tax expense of $ | |||||||||||
| Total other comprehensive (loss) income, net of tax | ( | ( | |||||||||
| Comprehensive income (loss) | ( | ||||||||||
| Less: Net income attributable to noncontrolling interests | |||||||||||
| Less: Other comprehensive loss attributable to noncontrolling interests | ( | ||||||||||
| Comprehensive income (loss) attributable to Baxter stockholders | $ | ( | $ | $ | |||||||
| Baxter International Inc. stockholders' equity | ||||||||||||||||||||||||||||||||
| (in millions) | 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, 2020 | $ | $ | ( | $ | $ | $ | ( | $ | $ | $ | ||||||||||||||||||||||
| Adoption of new accounting standard | — | — | — | — | — | ( | — | $ | ( | — | $ | ( | ||||||||||||||||||||
| Net income (loss) | — | — | — | — | — | — | $ | $ | ||||||||||||||||||||||||
| Other comprehensive income (loss) | — | — | — | — | — | — | — | |||||||||||||||||||||||||
| Purchases of treasury stock | — | — | ( | — | — | — | ( | — | ( | |||||||||||||||||||||||
| Stock issued under employee benefit plans and other | — | — | ( | — | — | — | ||||||||||||||||||||||||||
| Dividends declared on common stock | — | — | — | — | — | ( | — | ( | — | ( | ||||||||||||||||||||||
| Other changes in noncontrolling interests | — | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||
| Balance as of December 31, 2020 | $ | $ | ( | $ | $ | $ | ( | $ | $ | $ | ||||||||||||||||||||||
| Net income (loss) | — | — | — | — | — | — | ||||||||||||||||||||||||||
| Other comprehensive income (loss) | — | — | — | — | — | — | ( | ( | — | ( | ||||||||||||||||||||||
| Purchases of treasury stock | — | — | ( | — | — | — | ( | — | ( | |||||||||||||||||||||||
| Stock issued under employee benefit plans and other | — | — | ( | — | — | — | ||||||||||||||||||||||||||
| Dividends declared on common stock | — | — | — | — | — | ( | — | ( | — | ( | ||||||||||||||||||||||
| Other changes in noncontrolling interests | — | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||
| Balance as of December 31, 2021 | $ | $ | ( | $ | $ | $ | ( | $ | $ | $ | ||||||||||||||||||||||
| Net income (loss) | — | — | — | — | — | ( | — | ( | ( | |||||||||||||||||||||||
| Other comprehensive income (loss) | — | — | — | — | — | — | ( | ( | ( | ( | ||||||||||||||||||||||
| Purchases of treasury stock | — | — | — | ( | — | — | — | ( | — | ( | ||||||||||||||||||||||
| Stock issued under employee benefit plans and other | — | — | ( | — | — | — | ||||||||||||||||||||||||||
| Dividends declared on common stock | — | — | — | — | — | ( | — | ( | — | ( | ||||||||||||||||||||||
| Other changes in noncontrolling interests | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
| Balance as of December 31, 2022 | $ | $ | ( | $ | $ | $ | ( | $ | $ | $ | ||||||||||||||||||||||
| years ended December 31 (in millions) | 2022 | 2021 | 2020 | ||||||||
| Cash flows from operations | |||||||||||
| Net income (loss) | $ | ( | $ | $ | |||||||
| Adjustments to reconcile net income (loss) to net cash from operating activities: | |||||||||||
| Depreciation and amortization | |||||||||||
| Pension settlement and curtailment (gains) losses | ( | ||||||||||
| Net periodic pension benefit and other postretirement costs | |||||||||||
| Deferred income taxes | ( | ( | ( | ||||||||
| Stock compensation | |||||||||||
| Losses on debt extinguishments | |||||||||||
| Intangible asset impairments | |||||||||||
| Goodwill impairments | |||||||||||
| Loss on product divestiture arrangement | |||||||||||
| Reclassification of cumulative translation loss to earnings | |||||||||||
| Loss on subsidiary liquidation | |||||||||||
| Settlement of interest rate derivative contracts | ( | ||||||||||
| Other | ( | ||||||||||
| Changes in balance sheet items: | |||||||||||
| Accounts receivable, net | ( | ( | ( | ||||||||
| Inventories | ( | ( | ( | ||||||||
| Prepaid expenses and other current assets | ( | ( | ( | ||||||||
| Accounts payable | ( | ||||||||||
| Accrued expenses and other current liabilities | ( | ||||||||||
| Other | ( | ( | ( | ||||||||
| Cash flows from operations – continuing operations | |||||||||||
| Cash flows from operations – discontinued operations | ( | ||||||||||
| Cash flows from operations | |||||||||||
| Cash flows from investing activities | |||||||||||
| Capital expenditures | ( | ( | ( | ||||||||
| Acquisitions, net of cash acquired, and investments | ( | ( | ( | ||||||||
| Other investing activities, net | |||||||||||
| Cash flows from investing activities | ( | ( | ( | ||||||||
| Cash flows from financing activities | |||||||||||
| Issuances of debt | |||||||||||
| Repayments of debt | ( | ( | ( | ||||||||
| Net increase (decrease) in debt with original maturities of three months or less | ( | ||||||||||
| Cash dividends on common stock | ( | ( | ( | ||||||||
| Proceeds from stock issued under employee benefit plans | |||||||||||
| Purchases of treasury stock | ( | ( | ( | ||||||||
| Debt issuance costs | ( | ( | |||||||||
| Other financing activities, net | ( | ( | ( | ||||||||
| Cash flows from financing activities | ( | ( | |||||||||
| Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash | ( | ( | |||||||||
| Increase (decrease) in cash, cash equivalents and restricted cash | ( | ( | |||||||||
Cash, cash equivalents and restricted cash at beginning of year (1) | |||||||||||
Cash, cash equivalents and restricted cash at end of year (1) | $ | $ | $ | ||||||||
| As of December 31 (in millions) | 2022 | 2021 | 2020 | ||||||||
| Cash and cash equivalents | $ | $ | $ | ||||||||
| Restricted cash included in prepaid expenses and other current assets | |||||||||||
| Cash, cash equivalents and restricted cash | $ | $ | $ | ||||||||
| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
ACQUISITIONS AND OTHER ARRANGEMENTS | ||
| (in millions) | |||||
Cash consideration paid to Hillrom shareholders(a) | $ | ||||
Fair value of equity awards issued to Hillrom equity award holders(b) | |||||
| Total Consideration | $ | ||||
| (in millions) | |||||
| Assets acquired and liabilities assumed | |||||
| Cash and cash equivalents | $ | ||||
| Accounts receivable | |||||
| Inventories | |||||
| Prepaid expenses and other current assets | |||||
| Property, plant and equipment | |||||
| Goodwill | |||||
| Other intangible assets | |||||
| Operating lease right-of-use assets | |||||
| Other non-current assets | |||||
| Short-term debt | ( | ||||
| Accounts payable | ( | ||||
| Accrued expenses and other current liabilities | ( | ||||
| Long-term debt and finance lease obligations | ( | ||||
| Operating lease liabilities | ( | ||||
| Other non-current liabilities | ( | ||||
| Total assets acquired and liabilities assumed | $ | ||||
| years ended December 31 (in millions) | 2021 | 2020 | ||||||
| Net sales | $ | $ | ||||||
| Net income attributable to Baxter stockholders | ||||||||
| (in millions) | |||||
| Cash | $ | ||||
| Contingent Consideration | |||||
| Total Consideration | $ | ||||
| (in millions) | |||||
| Assets acquired | |||||
| Goodwill | $ | ||||
| Other intangible assets | |||||
| Total assets acquired | $ | ||||
| (in millions) | |||||
| Cash | $ | ||||
| Contingent Consideration | |||||
| Total Consideration | $ | ||||
| (in millions) | |||||
| Assets acquired | |||||
| Inventory | $ | ||||
| Goodwill | |||||
| Other intangible assets | |||||
| Total assets acquired | $ | ||||
| (in millions) | |||||
| Assets acquired | |||||
| Inventories | $ | ||||
| Goodwill | |||||
| Other intangible assets | |||||
| Total assets acquired | $ | ||||
SUPPLEMENTAL FINANCIAL INFORMATION | ||
| years ended December 31 (in millions) | 2022 | 2021 | ||||||
| Balance at beginning of period | $ | $ | ||||||
| Acquisition | ||||||||
| Charged to costs and expenses | ( | |||||||
| Write-offs | ( | ( | ||||||
| Currency translation adjustments | ( | ( | ||||||
| Balance at end of period | $ | $ | ||||||
| as of December 31 (in millions) | 2022 | 2021 | ||||||
| Raw materials | $ | $ | ||||||
| Work in process | ||||||||
| Finished goods | ||||||||
| Inventories | $ | $ | ||||||
| as of December 31 (in millions) | 2022 | 2021 | ||||||
| Prepaid value added taxes | $ | $ | ||||||
| Prepaid income taxes | ||||||||
| Contract assets | ||||||||
| Assets held for sale | ||||||||
| Other | ||||||||
| Prepaid expenses and other current assets | $ | $ | ||||||
| as of December 31 (in millions) | 2022 | 2021 | ||||||
| Land and land improvements | $ | $ | ||||||
| Buildings and leasehold improvements | ||||||||
| Machinery and equipment | ||||||||
| Equipment on lease with customers | ||||||||
| Construction in progress | ||||||||
| Total property, plant and equipment, at cost | ||||||||
| Accumulated depreciation | ( | ( | ||||||
| Property, plant and equipment, net | $ | $ | ||||||
| as of December 31 (in millions) | 2022 | 2021 | ||||||
| Deferred tax assets | $ | $ | ||||||
| Non-current receivables, net | ||||||||
| Contract assets | ||||||||
| Capitalized implementation costs in hosting arrangements | ||||||||
| Pension and other postretirement benefits | ||||||||
| Investments | ||||||||
| Other | ||||||||
| Other non-current assets | $ | $ | ||||||
| as of December 31 (in millions) | 2022 | 2021 | ||||||
| Common stock dividends payable | $ | $ | ||||||
| Employee compensation and withholdings | ||||||||
| Property, payroll and certain other taxes | ||||||||
| Contract liabilities | ||||||||
| Restructuring liabilities | ||||||||
| Accrued rebates | ||||||||
| Operating lease liabilities | ||||||||
| Income taxes payable | ||||||||
| Pension and other postretirement benefits | ||||||||
| Contingent payments related to acquisitions | ||||||||
| Other | ||||||||
| Accrued expenses and other current liabilities | $ | $ | ||||||
| as of December 31 (in millions) | 2022 | 2021 | ||||||
| Pension and other postretirement benefits | $ | $ | ||||||
| Deferred tax liabilities | ||||||||
| Long-term tax liabilities | ||||||||
| Contingent payments related to acquisitions | ||||||||
| Contract liabilities | ||||||||
| Litigation and environmental reserves | ||||||||
| Restructuring liabilities | ||||||||
| Other | ||||||||
| Other non-current liabilities | $ | $ | ||||||
| years ended December 31 (in millions) | 2022 | 2021 | 2020 | ||||||||
| Interest costs | $ | $ | $ | ||||||||
| Interest costs capitalized | ( | ( | ( | ||||||||
| Interest expense | |||||||||||
| Interest income | ( | ( | ( | ||||||||
| Interest expense, net | $ | $ | $ | ||||||||
| years ended December 31 (in millions) | 2022 | 2021 | 2020 | ||||||||
| Foreign exchange (gains) losses, net | $ | ( | $ | $ | |||||||
| Change in fair value of marketable equity securities | ( | ( | |||||||||
| Loss on debt extinguishment | |||||||||||
| Pension settlement and curtailment (gains) losses | ( | ||||||||||
| Pension and other postretirement benefit (gains) losses | ( | ( | |||||||||
| Reclassification of cumulative translation loss to earnings | |||||||||||
| Other, net | ( | ( | |||||||||
| Other (income) expense, net | $ | $ | $ | ||||||||
| year ended December 31 (in millions) | 2022 | 2021 | 2020 | ||||||||
| Interest paid, net of portion capitalized | $ | $ | $ | ||||||||
| Income taxes paid | $ | $ | $ | ||||||||
GOODWILL AND OTHER INTANGIBLE ASSETS, NET | ||
| (in millions) | Americas | EMEA | APAC | Hillrom | Total | ||||||||||||
| December 31, 2020 | $ | $ | $ | $ | $ | ||||||||||||
| Reallocation of Goodwill | ( | ||||||||||||||||
| Additions | |||||||||||||||||
| Currency translation | ( | ( | ( | ( | |||||||||||||
| December 31, 2021 | $ | $ | $ | $ | $ | ||||||||||||
| Impairments | ( | ( | |||||||||||||||
| Measurement period adjustments | |||||||||||||||||
| Currency translation | ( | ( | ( | ( | ( | ||||||||||||
| December 31, 2022 | $ | $ | $ | $ | $ | ||||||||||||
| Indefinite-lived intangible assets | ||||||||||||||||||||
| (in millions) | Customer relationships | Developed technology, including patents | Other amortized intangible assets | Trade Names | In process Research and Development | Total | ||||||||||||||
| December 31, 2022 | ||||||||||||||||||||
| Gross other intangible assets | $ | $ | $ | $ | $ | $ | ||||||||||||||
| Accumulated amortization | ( | ( | ( | — | — | $ | ( | |||||||||||||
| Other intangible assets, net | $ | $ | $ | $ | $ | $ | ||||||||||||||
| December 31, 2021 | ||||||||||||||||||||
| Gross other intangible assets | $ | $ | $ | $ | $ | $ | ||||||||||||||
| Accumulated amortization | ( | ( | ( | — | — | $ | ( | |||||||||||||
| Other intangible assets, net | $ | $ | $ | $ | $ | $ | ||||||||||||||
DEBT AND CREDIT FACILITIES | ||
| as of December 31 (in millions) | Effective interest rate in 2022¹ | 20221 | 20211 | |||||||||||
| Commercial paper | % | $ | $ | |||||||||||
| % | ||||||||||||||
| % | ||||||||||||||
| Floating-rate notes due 2023 | % | |||||||||||||
| % | ||||||||||||||
| % | ||||||||||||||
| % | ||||||||||||||
| Floating-rate notes due 2024 | % | |||||||||||||
| Term loan due 2024 | % | |||||||||||||
| % | ||||||||||||||
| % | ||||||||||||||
| Term loan due 2026 | % | |||||||||||||
| % | ||||||||||||||
| % | ||||||||||||||
| % | ||||||||||||||
| % | ||||||||||||||
| % | ||||||||||||||
| % | ||||||||||||||
| % | ||||||||||||||
| % | ||||||||||||||
| % | ||||||||||||||
| % | ||||||||||||||
| % | ||||||||||||||
| % | ||||||||||||||
| % | ||||||||||||||
| Finance leases and other | % | |||||||||||||
| Total debt | ||||||||||||||
| Short-term debt | ( | ( | ||||||||||||
| Current maturities of long-term debt and finance lease obligations | ( | ( | ||||||||||||
| Long-term debt and finance lease obligations | $ | $ | ||||||||||||
| as of and for the years ended December 31 (in millions) | Debt maturities | ||||
| 2023 | $ | ||||
| 2024 | |||||
| 2025 | |||||
| 2026 | |||||
| 2027 | |||||
| Thereafter | |||||
| Total obligations and commitments | |||||
| Discounts, premiums, and adjustments relating to hedging instruments | ( | ||||
| Total debt | $ | ||||
LEASES | ||
| (in millions) | 2022 | 2021 | 2020 | ||||||||||||||
| Operating lease cost | $ | $ | $ | ||||||||||||||
| Finance lease cost | |||||||||||||||||
| Amortization of right-of-use assets | |||||||||||||||||
| Interest on lease liabilities | |||||||||||||||||
| Variable lease cost | |||||||||||||||||
| Lease cost | $ | $ | $ | ||||||||||||||
| (in millions) | 2022 | 2021 | 2020 | ||||||||||||||
| Cash paid for amounts included in the measurement of lease liabilities: | |||||||||||||||||
| Operating cash flows from operating leases | $ | $ | $ | ||||||||||||||
| Operating cash flows from finance leases | |||||||||||||||||
| Financing cash flows from finance leases | |||||||||||||||||
| Right-of-use operating lease assets obtained in exchange for lease obligations | |||||||||||||||||
| Right-of-use finance lease assets obtained in exchange for lease obligations | |||||||||||||||||
| (in millions) | 2022 | 2021 | |||||||||
| Operating leases | |||||||||||
| Operating lease right-of-use assets | $ | $ | |||||||||
| $ | $ | ||||||||||
| Operating lease liabilities | |||||||||||
| Total operating lease liabilities | $ | $ | |||||||||
| Finance leases | |||||||||||
| Property, plant and equipment, at cost | $ | $ | |||||||||
| Accumulated depreciation | ( | ( | |||||||||
| $ | $ | ||||||||||
| $ | $ | ||||||||||
| Total finance lease liabilities | $ | $ | |||||||||
| December 31, 2022 | December 31, 2021 | ||||||||||
| Weighted-average remaining lease term (years) | |||||||||||
| Operating leases | |||||||||||
| Finance leases | |||||||||||
| Weighted-average discount rate | |||||||||||
| Operating leases | % | % | |||||||||
| Finance leases | % | % | |||||||||
| (in millions) | Finance Leases | Operating Leases | ||||||
| 2023 | $ | $ | ||||||
| 2024 | ||||||||
| 2025 | ||||||||
| 2026 | ||||||||
| 2027 | ||||||||
| Thereafter | ||||||||
| Total minimum lease payments | ||||||||
| Less: imputed interest | ( | ( | ||||||
| Present value of lease liabilities | $ | $ | ||||||
| (in millions) | 2022 | 2021 | 2020 | ||||||||||||||
| Sales-type lease revenue | $ | $ | $ | ||||||||||||||
| Variable lease revenue | |||||||||||||||||
| Total lease revenue | $ | $ | $ | ||||||||||||||
| (in millions) | 2022 | 2021 | |||||||||
| Minimum lease payments | $ | $ | |||||||||
| Unguaranteed residual values | |||||||||||
| Net investment in leases | $ | $ | |||||||||
| (in millions) | December 31, 2022 | December 31, 2021 | |||||||||
| Accounts receivable, net | $ | $ | |||||||||
| Other non-current assets | |||||||||||
| Total | $ | $ | |||||||||
| (in millions) | Sales-type Leases | Operating Leases | ||||||
| 2023 | $ | $ | ||||||
| 2024 | ||||||||
| 2025 | ||||||||
| 2026 | ||||||||
| 2027 | ||||||||
| Thereafter | ||||||||
| Total minimum lease payments | $ | |||||||
| Less: imputed interest | ( | |||||||
| Present value of minimum lease payments | $ | |||||||
| COMMITMENTS AND CONTINGENCIES | ||
| STOCKHOLDERS’ EQUITY | ||
| years ended December 31 | 2022 | 2021 | 2020 | ||||||||
| Expected volatility | % | % | % | ||||||||
| Expected life (in years) | |||||||||||
| Risk-free interest rate | % | % | % | ||||||||
| Dividend yield | % | % | % | ||||||||
| Fair value per stock option | $ | $ | $ | ||||||||
| (options and aggregate intrinsic values in thousands) | Options | Weighted- average exercise price | Weighted- average remaining contractual term (in years) | Aggregate intrinsic value | ||||||||||
| Outstanding as of January 1, 2022 | $ | |||||||||||||
| Granted | $ | |||||||||||||
| Exercised | ( | $ | ||||||||||||
| Forfeited | ( | $ | ||||||||||||
| Expired | ( | $ | ||||||||||||
| Outstanding as of December 31, 2022 | $ | $ | ||||||||||||
| Vested or expected to vest as of December 31, 2022 | $ | $ | ||||||||||||
| Exercisable as of December 31, 2022 | $ | $ | ||||||||||||
| (share units in thousands) | Share units | Weighted- average grant-date fair value | ||||||
| Nonvested RSUs as of January 1, 2022 | $ | |||||||
| Granted | $ | |||||||
| Vested | ( | $ | ||||||
| Forfeited | ( | $ | ||||||
| Nonvested RSUs as of December 31, 2022 | $ | |||||||
| years ended December 31 | 2022 | 2021 | 2020 | ||||||||
| Baxter volatility | % | % | % | ||||||||
| Peer group volatility | |||||||||||
| Correlation of returns | |||||||||||
| Risk-free interest rate | % | % | % | ||||||||
| Fair value per PSU | $ | $ | $ | ||||||||
| (share units in thousands) | Share units | Weighted- average grant-date fair value | ||||||
| Nonvested PSUs as of January 1, 2022 | $ | |||||||
| Granted | $ | |||||||
| Vested | ( | $ | ||||||
| Forfeited | ( | $ | ||||||
| Nonvested PSUs as of December 31, 2022 | $ | |||||||
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | ||
| (in millions) | CTA | Pension and OPEB plans | Hedging activities | Available-for-sale debt securities | Total | ||||||||||||
| Gains (losses) | |||||||||||||||||
| Balance as of December 31, 2021 | $ | ( | $ | ( | $ | ( | $ | $ | ( | ||||||||
| Other comprehensive income (loss) before reclassifications | ( | ( | ( | ||||||||||||||
| Amounts reclassified from AOCI (a) | ( | ||||||||||||||||
| Net other comprehensive income (loss) | ( | ( | |||||||||||||||
| Balance as of December 31, 2022 | $ | ( | $ | ( | $ | ( | $ | $ | ( | ||||||||
| (in millions) | CTA | Pension and OPEB plans | Hedging activities | Total | ||||||||||
| Gains (losses) | ||||||||||||||
| Balance as of December 31, 2020 | $ | ( | $ | ( | $ | ( | $ | ( | ||||||
| Other comprehensive income (loss) before reclassifications | ( | ( | ||||||||||||
| Amounts reclassified from AOCI (a) | ||||||||||||||
| Net other comprehensive income (loss) | ( | ( | ||||||||||||
| Balance as of December 31, 2021 | $ | ( | $ | ( | $ | ( | $ | ( | ||||||
Amounts reclassified from AOCI (a) | |||||||||||
| (in millions) | 2022 | 2021 | Location of impact in income statement | ||||||||
| CTA | |||||||||||
| Reclassification of cumulative translation loss to earnings | $ | ( | $ | Other (income) expense, net | |||||||
| ( | |||||||||||
| Less: Tax effect | Income tax expense (benefit) | ||||||||||
| $ | ( | $ | |||||||||
| Pension and OPEB items | |||||||||||
| Amortization of net losses and prior service costs or credits | $ | ( | $ | ( | Other (income) expense, net | ||||||
| Settlement charges | ( | ( | Other (income) expense, net | ||||||||
| ( | ( | Total before tax | |||||||||
| Less: Tax effect | Income tax expense (benefit) | ||||||||||
| $ | ( | $ | ( | Net of tax | |||||||
| Gains (losses) on hedging activities | |||||||||||
| Foreign exchange contracts | $ | $ | ( | Cost of sales | |||||||
| Interest rate contracts | ( | ( | Interest expense, net | ||||||||
| ( | Total before tax | ||||||||||
| Less: Tax effect | ( | Income tax expense (benefit) | |||||||||
| $ | $ | ( | Net of tax | ||||||||
| Total reclassifications for the period | $ | ( | $ | ( | Total net of tax | ||||||
NET SALES | ||
| as of December 31 (in millions) | 2022 | 2021 | ||||||
| Contract manufacturing services | $ | $ | ||||||
| Software sales | ||||||||
| Bundled equipment and consumable medical products contracts | ||||||||
| Contract assets | $ | $ | ||||||
| as of December 31 (in millions) | 2022 | 2021 | ||||||
| Prepaid expenses and other current assets | $ | $ | ||||||
| Other non-current assets | ||||||||
| Contract assets | $ | $ | ||||||
| Accrued expenses and other current liabilities | $ | $ | ||||||
| Other non-current liabilities | ||||||||
| Contract liabilities | $ | $ | ||||||
| year ended December 31 (in millions) | 2022 | ||||
| Balance at beginning of period | $ | ||||
| New revenue deferrals | |||||
| Revenue recognized upon satisfaction of performance obligations | ( | ||||
| Currency translation | ( | ||||
| Balance at end of period | $ | ||||
| 2022 | 2021 | 2020 | |||||||||||||||||||||||||||||||||
| years ended December 31 (in millions) | U.S. | International | Total | U.S. | International | Total | U.S. | International | Total | ||||||||||||||||||||||||||
Renal Care1 | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||
Medication Delivery2 | |||||||||||||||||||||||||||||||||||
Pharmaceuticals3 | |||||||||||||||||||||||||||||||||||
Clinical Nutrition4 | |||||||||||||||||||||||||||||||||||
Advanced Surgery5 | |||||||||||||||||||||||||||||||||||
Acute Therapies6 | |||||||||||||||||||||||||||||||||||
BioPharma Solutions7 | |||||||||||||||||||||||||||||||||||
Patient Support Systems8 | |||||||||||||||||||||||||||||||||||
Front Line Care9 | |||||||||||||||||||||||||||||||||||
Surgical Solutions10 | |||||||||||||||||||||||||||||||||||
Other11 | |||||||||||||||||||||||||||||||||||
| Total Baxter | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||
BUSINESS OPTIMIZATION CHARGES | ||
| years ended December 31 (in millions) | 2022 | 2021 | 2020 | ||||||||
| Restructuring charges | $ | $ | $ | ||||||||
| Costs to implement business optimization programs | |||||||||||
| Total business optimization charges | $ | $ | $ | ||||||||
| 2022 | ||||||||||||||
| (in millions) | COGS | SG&A | R&D | Total | ||||||||||
| Employee termination costs | $ | $ | $ | $ | ||||||||||
| Contract termination and other costs | ||||||||||||||
| Asset impairments | ||||||||||||||
| Total restructuring charges | $ | $ | $ | $ | ||||||||||
| 2021 | ||||||||||||||
| (in millions) | COGS | SG&A | R&D | Total | ||||||||||
| Employee termination costs | $ | $ | $ | $ | ||||||||||
| Contract termination and other costs | ||||||||||||||
| Asset impairments | ||||||||||||||
| Total restructuring charges | $ | $ | $ | $ | ||||||||||
| 2020 | ||||||||||||||
| (in millions) | COGS | SG&A | R&D | Total | ||||||||||
| Employee termination costs | $ | $ | $ | $ | ||||||||||
| Contract termination and other costs | ||||||||||||||
| Asset impairments | ||||||||||||||
| Total restructuring charges | $ | $ | $ | $ | ||||||||||
| (in millions) | |||||
| Liability balance as of December 31, 2019 | $ | ||||
| Charges | |||||
| Payments | ( | ||||
| Reserve adjustments | ( | ||||
| Currency translation | |||||
| Liability balance as of December 31, 2020 | |||||
| Assumed in acquisition | |||||
| Charges | |||||
| Payments | ( | ||||
| Reserve adjustments | ( | ||||
| Currency translation | ( | ||||
| Liability balance as of December 31, 2021 | |||||
| Charges | |||||
| Payments | ( | ||||
| Reserve adjustments | ( | ||||
| Currency translation | ( | ||||
| Liability balance as of December 31, 2022 | $ | ||||
PENSION AND OTHER POSTRETIREMENT BENEFIT PROGRAMS | ||
| Pension benefits | OPEB | ||||||||||||||||
| as of and for the years ended December 31 (in millions) | 2022 | 2021 | 2022 | 2021 | |||||||||||||
| Benefit obligations | |||||||||||||||||
| Beginning of period | $ | $ | $ | $ | |||||||||||||
| Service cost | |||||||||||||||||
| Interest cost | |||||||||||||||||
| Participant contributions | |||||||||||||||||
| Actuarial (gain) loss | ( | ( | ( | ( | |||||||||||||
| Benefit payments | ( | ( | ( | ( | |||||||||||||
| Settlements | ( | ( | |||||||||||||||
| Curtailment | ( | ( | |||||||||||||||
| Acquisitions | |||||||||||||||||
| Plan Amendments | |||||||||||||||||
| Foreign exchange and other | ( | ( | |||||||||||||||
| End of period | |||||||||||||||||
| Fair value of plan assets | |||||||||||||||||
| Beginning of period | |||||||||||||||||
| Actual return on plan assets | ( | ||||||||||||||||
| Employer contributions | |||||||||||||||||
| Participant contributions | |||||||||||||||||
| Benefit payments | ( | ( | ( | ( | |||||||||||||
| Settlements | ( | ( | |||||||||||||||
| Acquisitions | |||||||||||||||||
| Foreign exchange and other | ( | ( | |||||||||||||||
| End of period | |||||||||||||||||
| Funded status at December 31 | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||
| Amounts recognized in the consolidated balance sheets | |||||||||||||||||
| Noncurrent asset | $ | $ | $ | $ | |||||||||||||
| Current liability | ( | ( | ( | ( | |||||||||||||
| Noncurrent liability | ( | ( | ( | ( | |||||||||||||
| Net liability recognized at December 31 | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||
| as of December 31 (in millions) | 2022 | 2021 | ||||||
| ABO | $ | $ | ||||||
| Fair value of plan assets | $ | $ | ||||||
| as of December 31 (in millions) | 2022 | 2021 | ||||||
| PBO | $ | $ | ||||||
| Fair value of plan assets | $ | $ | ||||||
| (in millions) | Pension benefits | OPEB | ||||||
| 2023 | $ | $ | ||||||
| 2024 | ||||||||
| 2025 | ||||||||
| 2026 | ||||||||
| 2027 | ||||||||
| 2028 through 2032 | ||||||||
| Total expected net benefit payments for next 10 years | $ | $ | ||||||
| (in millions) | Pension benefits | OPEB | ||||||
| Actuarial loss (gain) | $ | $ | ( | |||||
| Prior service credit and transition obligation | ( | |||||||
| Total pre-tax loss (gain) recognized in AOCI at December 31, 2022 | $ | $ | ( | |||||
| Actuarial loss (gain) | $ | $ | ( | |||||
| Prior service credit and transition obligation | ( | |||||||
| Total pre-tax loss (gain) recognized in AOCI at December 31, 2021 | $ | $ | ( | |||||
| Year ended December 31 (in millions) | 2022 | 2021 | 2020 | ||||||||
Gain (loss) arising during the year, net of tax of $ | $ | ( | $ | $ | |||||||
Amortization of loss to earnings, net of tax of $ | |||||||||||
Settlement charges, net of tax of | |||||||||||
| Pension and other employee benefits | $ | $ | $ | ||||||||
| Year ended December 31 (in millions) | 2022 | 2021 | 2020 | ||||||||
| Pension benefits | |||||||||||
| Service cost | $ | $ | $ | ||||||||
| Interest cost | |||||||||||
| Expected return on plan assets | ( | ( | ( | ||||||||
| Amortization of net losses and other deferred amounts | |||||||||||
| Curtailment gain | ( | ||||||||||
| Other | ( | ||||||||||
| Net periodic pension benefit cost | $ | $ | $ | ||||||||
| OPEB | |||||||||||
| Service cost | $ | $ | $ | ||||||||
| Interest cost | |||||||||||
| Amortization of net losses and prior service credit | ( | ( | ( | ||||||||
| Net periodic OPEB cost | $ | ( | $ | ( | $ | ( | |||||
| Pension benefits | OPEB | ||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||||
| Discount rate | |||||||||||||||||
| U.S. and Puerto Rico plans | % | % | % | % | |||||||||||||
| International plans | % | % | n/a | n/a | |||||||||||||
| Rate of compensation increase | |||||||||||||||||
| U.S. and Puerto Rico plans | % | % | n/a | n/a | |||||||||||||
| International plans | % | % | n/a | n/a | |||||||||||||
| Annual rate of increase in the per-capita cost | n/a | n/a | % | % | |||||||||||||
| Rate decreased to | n/a | n/a | % | % | |||||||||||||
| by the year ended | n/a | n/a | 2029 | 2027 | |||||||||||||
| Pension benefits | OPEB | ||||||||||||||||||||||
| 2022 | 2021 | 2020 | 2022 | 2021 | 2020 | ||||||||||||||||||
| Discount rate | |||||||||||||||||||||||
| U.S. and Puerto Rico plans | % | % | % | % | % | % | |||||||||||||||||
| International plans | % | % | % | n/a | n/a | n/a | |||||||||||||||||
| Expected return on plan assets | |||||||||||||||||||||||
| U.S. and Puerto Rico plans | % | % | % | n/a | n/a | n/a | |||||||||||||||||
| International plans | % | % | % | n/a | n/a | n/a | |||||||||||||||||
| Rate of compensation increase | |||||||||||||||||||||||
| U.S. and Puerto Rico plans | % | % | % | n/a | n/a | n/a | |||||||||||||||||
| International plans | % | % | % | n/a | n/a | n/a | |||||||||||||||||
| Annual rate of increase in the per-capita cost | n/a | n/a | n/a | % | % | % | |||||||||||||||||
| Rate decreased to | n/a | n/a | n/a | % | % | % | |||||||||||||||||
| by the year ended | n/a | n/a | n/a | 2029 | 2027 | 2027 | |||||||||||||||||
| Basis of fair value measurement | |||||||||||||||||
| (in millions) | Balance at December 31, 2022 | Quoted prices in active markets for identical assets (Level 1) | Significant other observable inputs (Level 2) | Significant unobservable inputs (Level 3) | Measured at NAV (a) | ||||||||||||
| Assets | |||||||||||||||||
| Fixed income securities | |||||||||||||||||
| Cash and cash equivalents | $ | $ | $ | $ | $ | ||||||||||||
| U.S. government and government agency issues | |||||||||||||||||
| Corporate bonds | |||||||||||||||||
| Equity securities | |||||||||||||||||
| Common stock | |||||||||||||||||
| Mutual funds | |||||||||||||||||
| Common/collective trust funds | |||||||||||||||||
| Partnership investments | |||||||||||||||||
| Other holdings | |||||||||||||||||
| Fair value of pension plan assets | $ | $ | $ | $ | $ | ||||||||||||
| Basis of fair value measurement | |||||||||||||||||
| (in millions) | Balance at December 31, 2021 | Quoted prices in active markets for identical assets (Level 1) | Significant other observable inputs (Level 2) | Significant unobservable inputs (Level 3) | Measured at NAV (a) | ||||||||||||
| Assets | |||||||||||||||||
| Fixed income securities | |||||||||||||||||
| Cash and cash equivalents | $ | $ | $ | $ | $ | ||||||||||||
| U.S. government and government agency issues | |||||||||||||||||
| Corporate bonds | |||||||||||||||||
| Equity securities | |||||||||||||||||
| Common stock | |||||||||||||||||
| Mutual funds | |||||||||||||||||
| Common/collective trust funds | |||||||||||||||||
| Partnership investments | |||||||||||||||||
| Other holdings | |||||||||||||||||
| Fair value of pension plan assets | $ | $ | $ | $ | $ | ||||||||||||
| (in millions) | Other holdings | ||||
| Balance at December 31, 2020 | $ | ||||
| Sales | ( | ||||
| Balance at December 31, 2021 | |||||
| Transfers out | ( | ||||
| Balance at December 31, 2022 | $ | ||||
| Investment category | Valuation methodology | ||||
| Cash and cash equivalents | These largely consist of a short-term investment fund, U.S. dollars and foreign currency. The fair value of the short-term investment fund is based on the net asset value. | ||||
| U.S. government and government agency issues | Values are based on reputable pricing vendors, who typically use pricing matrices or models that use observable inputs. | ||||
| Corporate bonds | Values are based on reputable pricing vendors, who typically use pricing matrices or models that use observable inputs. | ||||
| Common stock | Values are based on the closing prices on the valuation date in an active market on national and international stock exchanges. | ||||
| Mutual funds | Values are based on the net asset value of the units held in the respective fund which are obtained from national and international exchanges or based on the net asset value of the underlying assets of the fund provided by the fund manager. | ||||
| Common/collective trust funds | Values are based on the net asset value of the units held at year end. | ||||
| Partnership investments | Values are based on the net asset value of the participation by us in the investment as determined by the general partner or investment manager of the respective partnership. | ||||
| Other holdings | The value of these assets vary by investment type, but primarily are determined by reputable pricing vendors, who use pricing matrices or models that use observable inputs. | ||||
| Collateral held on loaned securities | Values are based on the net asset value per unit of the fund in which the collateral is invested. | ||||
| Collateral to be paid on loaned securities | Values are based on the fair value of the underlying securities loaned on the valuation date. | ||||
| United States and Puerto Rico | International | |||||||||||||||||||
| as of December 31, 2022 (in millions) | Qualified plans | Nonqualified plan | Funded plans | Unfunded plans | Total | |||||||||||||||
| Fair value of plan assets | $ | n/a | $ | n/a | $ | |||||||||||||||
| PBO | $ | $ | ||||||||||||||||||
| Funded status percentage | % | n/a | % | n/a | % | |||||||||||||||
INCOME TAXES | ||
| years ended December 31 (in millions) | 2022 | 2021 | 2020 | ||||||||
| United States | $ | ( | $ | ( | $ | ( | |||||
| International | |||||||||||
| Income (loss) before income taxes | $ | ( | $ | $ | |||||||
| years ended December 31 (in millions) | 2022 | 2021 | 2020 | ||||||||
| Current | |||||||||||
| United States | |||||||||||
| Federal | $ | $ | ( | $ | |||||||
| State and local | ( | ||||||||||
| International | |||||||||||
| Current income tax expense (benefit) | |||||||||||
| Deferred | |||||||||||
| United States | |||||||||||
| Federal | ( | ( | ( | ||||||||
| State and local | ( | ( | |||||||||
| International | ( | ||||||||||
| Deferred income tax expense (benefit) | ( | ( | ( | ||||||||
| Income tax expense (benefit) | $ | $ | $ | ||||||||
| as of December 31 (in millions) | 2022 | 2021 | ||||||
| Deferred tax assets | ||||||||
| Accrued liabilities and other | $ | $ | ||||||
| Pension and other postretirement benefits | ||||||||
| Tax credit and net operating loss carryforwards | ||||||||
| Swiss tax reform net asset basis step-up | ||||||||
| Operating lease liabilities | ||||||||
| Valuation allowances | ( | ( | ||||||
| Total deferred tax assets | ||||||||
| Deferred tax liabilities | ||||||||
| Subsidiaries’ unremitted earnings | ||||||||
| Long-lived assets and other | ||||||||
| Operating lease right-of-use assets | ||||||||
| Total deferred tax liabilities | ||||||||
| Net deferred tax asset (liability) | $ | ( | $ | ( | ||||
| years ended December 31 (in millions) | 2022 | 2021 | 2020 | ||||||||
| Income tax expense (benefit) at U.S. statutory rate | $ | ( | $ | $ | |||||||
| Tax incentives | ( | ( | ( | ||||||||
| State and local taxes, net of federal benefit | ( | ( | |||||||||
| Impact of foreign taxes | |||||||||||
| Tax-deductible foreign statutory loss on an investment in a foreign subsidiary | ( | ||||||||||
Unfavorable court decision in a foreign jurisdiction related to an uncertain tax position | |||||||||||
| Non-deductible goodwill impairments | |||||||||||
| Notional interest deduction benefit | ( | ( | ( | ||||||||
| Valuation allowances | ( | ||||||||||
| Stock compensation windfall tax benefits | ( | ( | ( | ||||||||
| Research and development tax credits | ( | ( | ( | ||||||||
| Unutilized foreign tax credits | |||||||||||
| Other, net | |||||||||||
| Income tax expense (benefit) | $ | $ | $ | ||||||||
| as of and for the years ended (in millions) | 2022 | 2021 | 2020 | ||||||||
| Balance at beginning of the year | $ | $ | $ | ||||||||
| Increase due to acquisition | |||||||||||
| Increase associated with tax positions taken during the current year | |||||||||||
| Increase (decrease) associated with tax positions taken during a prior year | ( | ( | |||||||||
| Settlements | ( | ( | ( | ||||||||
| Decrease associated with lapses in statutes of limitations | ( | ( | ( | ||||||||
| Balance at end of the year | $ | $ | $ | ||||||||
| EARNINGS (LOSS) PER SHARE | ||
| years ended December 31(in millions) | 2022 | 2021 | 2020 | ||||||||
| Basic shares | |||||||||||
| Effect of dilutive securities | |||||||||||
| Diluted shares | |||||||||||
FINANCIAL INSTRUMENTS, DERIVATIVES AND HEDGING ACTIVITIES | ||
| as of and for the years ended December 31 (in millions) | 2022 | 2021 | 2020 | |||||||||||
| Sold receivables at beginning of year | $ | $ | $ | |||||||||||
| Proceeds from sales of receivables | ||||||||||||||
| Cash collections (remitted to the owners of the receivables) | ( | ( | ( | |||||||||||
| Effect of foreign exchange rate changes | ( | ( | ||||||||||||
| Sold receivables at end of year | $ | $ | $ | |||||||||||
| (in millions) | Gain (loss) recognized in OCI | Location of gain (loss) in income statement | Gain (loss) reclassified from AOCI into income | ||||||||||||||||||||
| 2022 | 2021 | 2020 | 2022 | 2021 | 2020 | ||||||||||||||||||
| Cash flow hedges | |||||||||||||||||||||||
| Interest rate contracts | $ | $ | $ | ( | Interest expense, net | $ | ( | $ | ( | $ | ( | ||||||||||||
| Foreign exchange contracts | ( | Cost of sales | ( | ( | |||||||||||||||||||
| Net investment hedges | ( | Other (income) expense, net | |||||||||||||||||||||
| Total | $ | $ | $ | ( | $ | $ | ( | $ | ( | ||||||||||||||
| Location of gain (loss) in income statement | Gain (loss) recognized in income | ||||||||||||||||
| (in millions) | 2022 | 2021 | 2020 | ||||||||||||||
| Undesignated derivative instruments | |||||||||||||||||
| Foreign exchange contracts | Other (income) expense, net | $ | ( | $ | ( | $ | |||||||||||
| as of and for the year ended December 31 (in millions) | 2022 | 2021 | 2020 | ||||||||
| Accumulated other comprehensive income (loss) balance at beginning of year | $ | ( | $ | ( | $ | ( | |||||
| (Loss) gain in fair value of derivatives during the year | ( | ||||||||||
| Amount reclassified to earnings during the year | ( | ||||||||||
| Accumulated other comprehensive income (loss) balance at end of year | $ | ( | $ | ( | $ | ( | |||||
| Derivatives in asset positions | Derivatives in liability positions | ||||||||||||||||
| (in millions) | Balance sheet location | Fair value | Balance sheet location | Fair value | |||||||||||||
| Derivative instruments designated as hedges | |||||||||||||||||
Foreign exchange contracts | Prepaid expenses and other current assets | $ | Accrued expenses and other current liabilities | $ | |||||||||||||
| Total derivative instruments designated as hedges | |||||||||||||||||
| Undesignated derivative instruments | |||||||||||||||||
Foreign exchange contracts | Prepaid expenses and other current assets | Accrued expenses and other current liabilities | |||||||||||||||
| Total derivative instruments | $ | $ | |||||||||||||||
| Derivatives in asset positions | Derivatives in liability positions | ||||||||||||||||
| (in millions) | Balance sheet location | Fair value | Balance sheet location | Fair value | |||||||||||||
| Derivative instruments designated as hedges | |||||||||||||||||
Foreign exchange contracts | Prepaid expenses and other current assets | $ | Accrued expenses and other current liabilities | $ | |||||||||||||
| Total derivative instruments designated as hedges | |||||||||||||||||
| Undesignated derivative instruments | |||||||||||||||||
Foreign exchange contracts | Prepaid expenses and other current assets | Accrued expenses and other current liabilities | |||||||||||||||
| Total derivative instruments | $ | $ | |||||||||||||||
| December 31, 2022 | December 31, 2021 | ||||||||||||||||
| (in millions) | Asset | Liability | Asset | Liability | |||||||||||||
| Gross amounts recognized in the consolidated balance sheets | $ | $ | $ | $ | |||||||||||||
| Gross amount subject to offset in master netting arrangements not offset in the consolidated balance sheets | ( | ( | ( | ( | |||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||
| Carrying amount of hedged items | Cumulative amount of fair value hedging adjustment included in the carrying amount of the hedged items (a) | ||||||||||||||||
| (in millions) | Balance as of December 31, 2022 | Balance as of December 31, 2021 | Balance as of December 31, 2022 | Balance as of December 31, 2021 | |||||||||||||
| Long-term debt | $ | $ | $ | $ | |||||||||||||
FAIR VALUE MEASUREMENTS | ||
| Basis of fair value measurement | ||||||||||||||
| (in millions) | Balance as of December 31, 2022 | Quoted prices in active markets for identical assets (Level 1) | Significant other observable inputs (Level 2) | Significant unobservable inputs (Level 3) | ||||||||||
| Assets | ||||||||||||||
| Foreign exchange contracts | $ | $ | $ | $ | ||||||||||
| Available-for-sale debt securities | ||||||||||||||
| Marketable equity securities | ||||||||||||||
| Total | $ | $ | $ | $ | ||||||||||
| Liabilities | ||||||||||||||
| Foreign exchange contracts | $ | $ | $ | $ | ||||||||||
| Contingent payments related to acquisitions | ||||||||||||||
| Total | $ | $ | $ | $ | ||||||||||
| Basis of fair value measurement | ||||||||||||||
| (in millions) | Balance as of December 31, 2021 | Quoted prices in active markets for identical assets (Level 1) | Significant other observable inputs (Level 2) | Significant unobservable inputs (Level 3) | ||||||||||
| Assets | ||||||||||||||
| Foreign exchange contracts | $ | $ | $ | $ | ||||||||||
| Available-for-sale debt securities | ||||||||||||||
| Marketable equity securities | ||||||||||||||
| Total | $ | $ | $ | $ | ||||||||||
| Liabilities | ||||||||||||||
| Foreign exchange contracts | $ | $ | $ | $ | ||||||||||
| Contingent payments related to acquisitions | ||||||||||||||
| Total | $ | $ | $ | $ | ||||||||||
| 2022 | 2021 | |||||||||||||
| as of and for the years ended December 31 (in millions) | Contingent payments related to acquisitions | Available-for-sale debt securities | Contingent payments related to acquisitions | |||||||||||
| Fair value at beginning of period | $ | $ | $ | |||||||||||
| Additions | ||||||||||||||
| Change in fair value recognized in earnings | ( | ( | ||||||||||||
| Change in fair value recognized in AOCI | ||||||||||||||
| Payments | ( | ( | ||||||||||||
| Transfers out of Level 3 | ( | |||||||||||||
| Fair value at end of period | $ | $ | $ | |||||||||||
| Book values | Fair values(a) | ||||||||||||||||
| as of December 31 (in millions) | 2022 | 2021 | 2022 | 2021 | |||||||||||||
| Liabilities | |||||||||||||||||
| Short-term debt | $ | $ | $ | $ | |||||||||||||
| Current maturities of long-term debt and finance lease obligations | |||||||||||||||||
| Long-term debt and finance lease obligations | |||||||||||||||||
SEGMENT INFORMATION | ||
| for the years ended December 31 (in millions) | 2022 | 2021 | 2020 | ||||||||
| Net sales: | |||||||||||
| Americas | $ | $ | $ | ||||||||
| EMEA | |||||||||||
| APAC | |||||||||||
| Hillrom | |||||||||||
| Total net sales | $ | $ | $ | ||||||||
| Operating income (loss): | |||||||||||
| Americas | $ | $ | $ | ||||||||
| EMEA | |||||||||||
| APAC | |||||||||||
| Hillrom | ( | ||||||||||
| Total segment operating income | $ | $ | $ | ||||||||
| Depreciation Expense: | |||||||||||
| Americas | $ | $ | $ | ||||||||
| EMEA | |||||||||||
| APAC | |||||||||||
| Hillrom | |||||||||||
| Corporate and other | |||||||||||
| Total depreciation expense | $ | $ | $ | ||||||||
| Capital expenditures: | |||||||||||
| Americas | $ | $ | $ | ||||||||
| EMEA | |||||||||||
| APAC | |||||||||||
| Hillrom | |||||||||||
| Corporate and other | |||||||||||
| Total capital expenditures | $ | $ | $ | ||||||||
| for the years ended December 31 (in millions) | 2022 | 2021 | 2020 | ||||||||
| Total segment operating income | $ | $ | $ | ||||||||
| Corporate and other | ( | ( | ( | ||||||||
| Total operating income (loss) | ( | ||||||||||
| Net interest expense | |||||||||||
| Other (income) expense, net | |||||||||||
| Income (loss) before income taxes | $ | ( | $ | $ | |||||||
| for the years ended December 31 (in millions) | 2022 | 2021 | 2020 | ||||||||
| Net sales: | |||||||||||
| United States | $ | $ | $ | ||||||||
| Latin America and Canada | |||||||||||
| EMEA | |||||||||||
| APAC | |||||||||||
| Total net sales | $ | $ | $ | ||||||||
| as of December 31 (in millions) | 2022 | 2021 | ||||||
| Property, plant and equipment and operating lease right-of-use assets, net: | ||||||||
| United States | $ | $ | ||||||
| EMEA | ||||||||
| APAC | ||||||||
| Latin America and Canada | ||||||||
| Total property, plant and equipment and operating lease right-of-use assets, net | $ | $ | ||||||
| Plan Category | Number of Shares to be Issued upon Exercise of Outstanding Options, Warrants and Rights(a) | Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights(b) | Number of Shares Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Shares Reflected in Column(a)(b)) | ||||||||||||||||||||||||||||||||
Equity Compensation Plans Approved by Stockholders | 22,119,806 | (1) | $ | 63.51 | (2) | 44,003,587 | (3) | ||||||||||||||||||||||||||||
Equity Compensation Plans Not Approved by Stockholders | 146,798 | (4) | $ | — | — | ||||||||||||||||||||||||||||||
| Total | 22,266,604 | (5) | $ | 63.51 | (2) | 44,003,587 | |||||||||||||||||||||||||||||
| Page Number | ||||||||
| (1) | Financial Statements: | |||||||
| 48 | ||||||||
| 49 | ||||||||
| 50 | ||||||||
| 51 | ||||||||
| 52 | ||||||||
| 54 | ||||||||
| 105 | ||||||||
| (2) | Schedules required by Article 12 of Regulation S-X: | |||||||
| 117 | ||||||||
| All other schedules have been omitted because they are not applicable or not required. | ||||||||
| (3) | Exhibits required by Item 601 of Regulation S-K are listed in the Exhibit Index, which is incorporated herein by reference. Exhibits in the Exhibit Index marked with a “C” in the left margin constitute management contracts or compensatory plans or arrangements contemplated by Item 15(b) of Form 10-K. | |||||||
| Number and Description of Exhibit | |||||
| 2.1 | |||||
| 3.1 | |||||
| 3.2 | |||||
| 4.1(P) | Form of Common Stock Certificate of the Company (incorporated by reference to Exhibit(a) to the Company’s Registration Statement on Form S-16 (Registration No. 02-65269), filed on August 17, 1979). | ||||
| 4.2 | |||||
| 4.3 | |||||
| 4.4 | |||||
| 4.5 | |||||
| 4.6 | |||||
| 4.7 | |||||
| 4.8 | |||||
| 4.9 | |||||
| 4.10 | |||||
| 4.11 | |||||
| 4.12 | |||||
| Number and Description of Exhibit | |||||
| 4.13 | |||||
| 4.14 | |||||
| 4.15 | |||||
| 4.16 | |||||
| 4.17 | |||||
| 4.18 | |||||
| 4.19 | |||||
| 4.20 | |||||
| 4.21 | |||||
| 4.22 | |||||
| 10.1 | |||||
| 10.2 | |||||
| Number and Description of Exhibit | |||||
| 10.3 | |||||
| 10.4 | |||||
| 10.5 | |||||
| 10.6 | |||||
| C 10.7 | |||||
| C 10.8 | |||||
| C 10.9 | |||||
| C 10.10 | |||||
| C 10.11 | |||||
| C 10.12 | |||||
| C 10.13 | |||||
| C 10.14 | |||||
| C 10.15 | |||||
| C 10.16 | |||||
| C 10.17 | |||||
| C 10.18 | |||||
| C 10.19 | |||||
| C 10.20 | |||||
| C 10.21 | |||||
| Number and Description of Exhibit | |||||
| C 10.22 | |||||
| C 10.23 | |||||
| C 10.24 | |||||
| C 10.25 | |||||
| C 10.26 | |||||
| C 10.27* | |||||
| C 10.28 | |||||
C 10.29R | |||||
| C 10.30 | |||||
| C 10.31 | |||||
| C 10.32 | |||||
| C 10.33 | |||||
| C 10.34 | |||||
| C 10.35 | |||||
| C 10.36 | |||||
| C 10.37 | |||||
| C 10.38 | |||||
| C 10.39 | |||||
| Number and Description of Exhibit | |||||
| C 10.40 | |||||
| C 10.41 | |||||
| 21* | |||||
| 23* | |||||
| 31.1* | |||||
| 31.2* | |||||
| 32.1* | |||||
| 32.2* | |||||
| 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 | ||||
| BAXTER INTERNATIONAL INC. | ||||||||
| By: | /s/ José E. Almeida | |||||||
| José E. Almeida | ||||||||
| Chairman and Chief Executive Officer | ||||||||
| Signature | Title | |||||||
| /s/ José E. Almeida | Chairman and Chief Executive Officer | |||||||
| José E. Almeida | (principal executive officer) | |||||||
| /s/ James K. Saccaro | Executive Vice President and Chief Financial Officer | |||||||
| James K. Saccaro | (principal financial officer) | |||||||
| /s/ Brian C. Stevens | Senior Vice President, Chief Accounting Officer and Controller | |||||||
| Brian C. Stevens | (principal accounting officer) | |||||||
| /s/ Thomas F. Chen | Director | |||||||
| Thomas F. Chen | ||||||||
| /s/ Michael F. Mahoney | Director | |||||||
| Michael F. Mahoney | ||||||||
| /s/ Patricia B. Morrison | Director | |||||||
| Patricia B. Morrison | ||||||||
| /s/ Stephen N. Oesterle, M.D. | Director | |||||||
| Stephen N. Oesterle, M.D. | ||||||||
| /s/ Nancy Schlichting | Director | |||||||
| Nancy M. Schlichting | ||||||||
| /s/ Brent Shafer | Director | |||||||
| Brent Shafer | ||||||||
| /s/ Cathy R. Smith | Director | |||||||
| Cathy R. Smith | ||||||||
| /s/ Albert P. L. Stroucken | Director | |||||||
| Albert P. L. Stroucken | ||||||||
| /s/ Amy A. Wendell | Director | |||||||
| Amy A. Wendell | ||||||||
| /s/ David S. Wilkes, M.D. | Director | |||||||
| David S. Wilkes, M.D. | ||||||||
| /s/ Peter M. Wilver | Director | |||||||
| Peter M. Wilver | ||||||||
| Additions | |||||||||||||||||||||||||||||||||||
| Valuation and Qualifying Accounts (in millions) | Balance at beginning of period | Acquisition | Charged to costs and expenses | (Credited) charged to other accounts (1) | Deductions | Balance at end of period | |||||||||||||||||||||||||||||
| Year ended December 31, 2022: | |||||||||||||||||||||||||||||||||||
| Allowance for doubtful accounts | $ | ( | ( | $ | |||||||||||||||||||||||||||||||
| Deferred tax asset valuation allowance | $ | ( | ( | $ | |||||||||||||||||||||||||||||||
| Year ended December 31, 2021: | |||||||||||||||||||||||||||||||||||
| Allowance for doubtful accounts | $ | ( | ( | ( | $ | ||||||||||||||||||||||||||||||
| Deferred tax asset valuation allowance | $ | ( | ( | $ | |||||||||||||||||||||||||||||||
| Year ended December 31, 2020: | |||||||||||||||||||||||||||||||||||
| Allowance for doubtful accounts | $ | ( | $ | ||||||||||||||||||||||||||||||||
| Deferred tax asset valuation allowance | $ | ( | $ | ||||||||||||||||||||||||||||||||
| Domestic Subsidiary | Incorporation | |||||||
| Baxter Corporation Englewood | Colorado | |||||||
| Baxter Healthcare Corporation | Delaware | |||||||
| Baxter Pharmaceutical Solutions LLC | Delaware | |||||||
| Baxter Sales and Distribution LLC | Delaware | |||||||
| Cheetah Medical, Inc. | Delaware | |||||||
| Gambro Renal Products, Inc. | Colorado | |||||||
| Gambro UF Solutions, Inc. | Delaware | |||||||
| Hill-Rom Holdings, Inc | Indiana | |||||||
| Laboratorios Baxter S.A. | Delaware | |||||||
| Synovis Life Technologies, Inc. | Minnesota | |||||||
| Synovis Micro Companies Alliance, Inc. | Minnesota | |||||||
| Foreign Subsidiary | Incorporation | |||||||
| Baxter Healthcare Pty Ltd | Australia | |||||||
| Baxter Belgium SPRL | Belgium | |||||||
| Baxter Distribution Center Europe SA | Belgium | |||||||
| Baxter R and D Europe SPRL | Belgium | |||||||
| Baxter SA | Belgium | |||||||
| Baxter Services Europe SA | Belgium | |||||||
| Baxter World Trade SPRL | Belgium | |||||||
| Baxter Hospitalar Ltda. | Brazil | |||||||
| Baxter Corporation (Canada) | Canada | |||||||
| Baxter (China) Investment Co., Ltd | China | |||||||
| Baxter Healthcare (Guangzhou) Company Ltd | China | 88 | % | |||||
| Baxter Healthcare (Shanghai) Company Ltd. | China | |||||||
| Baxter Healthcare (Suzhou) Company Ltd | China | |||||||
| Baxter Healthcare (Tianjin) Co., Ltd. | China | |||||||
| Baxter Healthcare Trading (Shanghai) Co., Ltd. | China | |||||||
| RTS Colombia SAS | Colombia | |||||||
| Baxter Productos Medicos, Ltda. | Costa Rica | |||||||
| Baxter S.A.S. | France | |||||||
| Gambro Industries SAS | France | |||||||
| Baxter Deutschland GmbH | Germany | |||||||
| Baxter Oncology GmbH | Germany | |||||||
| Gambro Dialysatoren GmbH | Germany | |||||||
| Baxter (Hellas) EPE | Greece | |||||||
| Baxter de Guatemala, Sociedad Anonima | Guatemala | |||||||
| Baxter Healthcare Limited (Hong Kong, China) | Hong Kong | |||||||
| Baxter (India) Private Limited | India | |||||||
| Baxter Pharmaceuticals India Pvt Ltd. | India | |||||||
| Baxter Innovations & Business Solutions Private Limited (India) | India | |||||||
| Baxter Shared Services & Competencies Limited | Ireland | |||||||
| Cheetah Medical (Israel), Ltd. | Israel | |||||||
| Baxter S.p.A. | Italy | |||||||
| Bieffe Medital S.p.A. | Italy | |||||||
| Gambro Dasco S.p.A. | Italy | |||||||
| Baxter Limited | Japan | |||||||
| Baxter S.A. de C.V. | Mexico | |||||||
| Baxter Healthcare Limited | New Zealand | |||||||
| Baxter Polska Sp. z o.o. | Poland | |||||||
| Baxter AO | Russian Federation | |||||||
| Baxter Company Ltd | Saudi Arabia | 51 | % | |||||
| Baxter Healthcare SA (Singapore Woodlands Branch) | Singapore | |||||||
| Baxter Pharmaceuticals (Asia) Pte Ltd. | Singapore | |||||||
| Baxter Incorporated | South Korea | |||||||
| Baxter, S.L. | Spain | |||||||
| Baxter Medical AB | Sweden | |||||||
| Gambro AB | Sweden | |||||||
| Gambro Lundia AB | Sweden | |||||||
| Baxter AG | Switzerland | |||||||
| Baxter Healthcare SA | Switzerland | |||||||
| Baxter Healthcare Limited (Taiwan) | Taiwan | |||||||
| Baxter Healthcare (Thailand) Company Limited | Thailand | |||||||
| Baxter Manufacturing, (Thailand) Co., Ltd. | Thailand | |||||||
| Baxter Holding B.V. | The Netherlands | |||||||
| ApaTech Limited | United Kingdom | |||||||
| Baxter Healthcare Limited | United Kingdom | |||||||
| Cheetah Medical (UK) Limited | United Kingdom | |||||||
| /s/ José E. Almeida | |||||
| José E. Almeida | |||||
| Chairman of the Board and | |||||
| Chief Executive Officer | |||||
| /s/ James K. Saccaro | |||||
| James K. Saccaro | |||||
| Executive Vice President and | |||||
| Chief Financial Officer | |||||
| /s/ José E. Almeida | |||||
| José E. Almeida | |||||
| Chairman of the Board and | |||||
| Chief Executive Officer | |||||
| /s/ James K. Saccaro | |||||
| James K. Saccaro | |||||
| Executive Vice President and | |||||
| Chief Financial Officer | |||||
Audit Information |
12 Months Ended |
|---|---|
Dec. 31, 2022 | |
| Audit Information [Abstract] | |
| Auditor Name | PricewaterhouseCoopers LLP |
| Auditor Location | Chicago, Illinois |
| Auditor Firm ID | 238 |
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions |
Dec. 31, 2022 |
Dec. 31, 2021 |
|---|---|---|
| Statement of Financial Position [Abstract] | ||
| Allowance for doubtful accounts | $ 114 | $ 122 |
| Common stock, par value (in dollars per share) | $ 1 | $ 1 |
| Common stock, authorized (in shares) | 2,000,000,000 | 2,000,000,000 |
| Common stock, issued (in shares) | 683,494,944 | 683,494,944 |
| Treasury stock, shares (in shares) | 179,062,594 | 181,879,516 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Parenthetical) - USD ($) $ in Millions |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
| Statement of Comprehensive Income [Abstract] | |||
| Currency translation adjustments, tax | $ 41 | $ 30 | $ (51) |
| Pension and other postretirement benefits, tax | 12 | 60 | 40 |
| Hedging activities, tax | 2 | 7 | (34) |
| Tax expense on available-for-sale securities | $ 1 | $ 0 | $ 0 |
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cash flows from operations | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income (loss) | $ (2,421,000,000) | $ 1,295,000,000 | $ 1,110,000,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Adjustments to reconcile net income (loss) to net cash from operating activities: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Depreciation and amortization | 1,403,000,000 | 890,000,000 | 823,000,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pension settlement and curtailment (gains) losses | 12,000,000 | (2,000,000) | (46,000,000) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net periodic pension benefit and other postretirement costs | 51,000,000 | 99,000,000 | 81,000,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Deferred income taxes | (225,000,000) | (146,000,000) | (88,000,000) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock compensation | 154,000,000 | 146,000,000 | 130,000,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Losses on debt extinguishments | 0 | 5,000,000 | 110,000,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Intangible asset impairments | 344,000,000 | 0 | 17,000,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Goodwill impairments | 2,812,000,000 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Loss on product divestiture arrangement | 54,000,000 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Reclassification of cumulative translation loss to earnings | 65,000,000 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Loss on subsidiary liquidation | (21,000,000) | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Settlement of interest rate derivative contracts | 0 | 0 | (173,000,000) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other | (12,000,000) | 92,000,000 | 86,000,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Changes in balance sheet items: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accounts receivable, net | (146,000,000) | (170,000,000) | (119,000,000) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Inventories | (361,000,000) | (37,000,000) | (162,000,000) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Prepaid expenses and other current assets | (39,000,000) | (41,000,000) | (37,000,000) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accounts payable | (76,000,000) | 104,000,000 | 57,000,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accrued expenses and other current liabilities | (273,000,000) | 108,000,000 | 86,000,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other | (128,000,000) | (125,000,000) | (97,000,000) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cash flows from operations – continuing operations | 1,211,000,000 | 2,222,000,000 | 1,870,000,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cash flows from operations – discontinued operations | 0 | 0 | (2,000,000) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cash flows from operations | 1,211,000,000 | 2,222,000,000 | 1,868,000,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cash flows from investing activities | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Capital expenditures | (679,000,000) | (743,000,000) | (709,000,000) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Acquisitions, net of cash acquired, and investments | (263,000,000) | (10,502,000,000) | (494,000,000) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other investing activities, net | 11,000,000 | 45,000,000 | 24,000,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cash flows from investing activities | (931,000,000) | (11,200,000,000) | (1,179,000,000) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cash flows from financing activities | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuances of debt | 0 | 11,903,000,000 | 1,885,000,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Repayments of debt | (954,000,000) | (2,823,000,000) | (1,181,000,000) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net increase (decrease) in debt with original maturities of three months or less | 55,000,000 | 246,000,000 | (226,000,000) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cash dividends on common stock | (573,000,000) | (530,000,000) | (473,000,000) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Proceeds from stock issued under employee benefit plans | 127,000,000 | 187,000,000 | 202,000,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Purchases of treasury stock | (32,000,000) | (600,000,000) | (500,000,000) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt issuance costs | 0 | (98,000,000) | (5,000,000) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other financing activities, net | (61,000,000) | (40,000,000) | (47,000,000) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cash flows from financing activities | (1,438,000,000) | 8,245,000,000 | (345,000,000) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash | (76,000,000) | (47,000,000) | 57,000,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Increase (decrease) in cash, cash equivalents and restricted cash | (1,234,000,000) | (780,000,000) | 401,000,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cash, cash equivalents and restricted cash at beginning of year | [1] | 2,956,000,000 | 3,736,000,000 | 3,335,000,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cash, cash equivalents and restricted cash at end of year | [1] | 1,722,000,000 | 2,956,000,000 | 3,736,000,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cash and cash equivalents | 1,718,000,000 | 2,951,000,000 | 3,730,000,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Restricted cash included in prepaid expenses and other current assets | $ 4,000,000 | $ 5,000,000 | $ 6,000,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
12 Months Ended | ||||||
|---|---|---|---|---|---|---|---|
Dec. 31, 2022 | |||||||
| Accounting Policies [Abstract] | |||||||
| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
Nature of Operations Baxter International Inc., through our subsidiaries (collectively, Baxter, we, our or us), provides a broad portfolio of essential healthcare products, including acute and chronic dialysis therapies; sterile intravenous (IV) solutions; infusion systems and devices; parenteral nutrition therapies; inhaled anesthetics; generic injectable pharmaceuticals; surgical hemostat and sealant products, advanced surgical equipment; smart bed systems; patient monitoring and diagnostic technologies; and respiratory health devices. These products are used by hospitals, kidney dialysis centers, nursing homes, rehabilitation centers, doctors’ offices and patients at home under physician supervision. Our global footprint and the critical nature of our products and services play a key role in expanding access to healthcare in emerging and developed countries. We operate in four segments: Americas, EMEA, APAC and Hillrom which are described in Note 17. In January 2023, we announced our intention to separate our Renal Care and Acute Therapies product categories into a new, publicly traded company. While completion of the proposed spinoff is subject to satisfaction of customary conditions, we are targeting completion of the planned separation in 12 to 18 months after the initial announcement. Risks and Uncertainties Supply Constraints and Global Economic Conditions We have experienced significant challenges to our global supply chain in recent periods, including production delays and interruptions, increased costs and shortages of raw materials and component parts (including resins and electromechanical devices) and higher transportation costs, resulting from the pandemic and other exogenous factors including significant weather events, elevated inflation levels, disruptions to certain ports of call around the world, the war in Ukraine and other geopolitical events. We expect to experience some of these and other challenges related to our supply chain in future periods. These challenges, including the unavailability of certain raw materials and component parts, have also had a negative impact on our sales for certain product categories due to our inability to fully satisfy demand and may continue to have a negative impact on our sales in the future. COVID-19 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. Over the course of the pandemic, our business has been impacted by shifting healthcare priorities and significant volatility in the demand for our products. For further information about our revenues by product category, refer to Note 10. Significant uncertainty remains regarding the duration and overall impact of the COVID-19 pandemic. Concerns remain regarding the pace of economic recovery due to virus resurgence across the globe from the Omicron variants, subvariants and other virus mutations. 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 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 continued volatility. We expect that the challenges caused by global economic conditions (including the COVID-19 pandemic), among other factors, may continue to have an adverse effect on our business. Use of Estimates The preparation of financial statements in conformity with U.S. Generally Accepted Accounting Principles (U.S. GAAP) requires us to make estimates and assumptions that affect the reported amounts and related disclosures in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Principles of Consolidation The consolidated financial statements include the accounts of Baxter and our majority-owned subsidiaries that we control, after elimination of intra-company balances and transactions. Reclassifications Certain prior year amounts have been reclassified to conform to the current year presentation. Revenue Recognition Revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods or providing services. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account in the contract. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. Some of our contracts have multiple performance obligations. For contracts with multiple performance obligations, we allocate the contract’s transaction price to each performance obligation using our best estimate of the standalone selling price of each distinct good or service in the contract. Our global payment terms are typically between 30-90 days. Most of our performance obligations are satisfied at a point in time. This includes sales of our broad portfolio of essential healthcare products across our business segments. Our three legacy Baxter geographic segments including acute and chronic dialysis therapies; sterile IV solutions; infusion systems and devices; parenteral nutrition therapies; inhaled anesthetics; generic injectable pharmaceuticals; and surgical hemostat and sealant products. Our legacy Hillrom segment includes smart bed systems; patient monitoring and diagnostic technologies, respiratory health devices; and advanced equipment for the surgical space. For most of these sales, our performance obligation is satisfied upon delivery to the customer. Shipping and handling activities are considered to be fulfillment activities and are not considered to be a separate performance obligation. To a lesser extent, we enter into arrangements for which revenue may be recognized over time. For example, our Americas segment includes contract manufacturing arrangements, our Hillrom segment includes digital and connected care solutions and collaboration tools that are implemented over time and all our segments include equipment leases and certain subscription software and licensing arrangements. We recognize revenue for these arrangements over time or at a point in time depending on our evaluation of when the customer obtains control of the promised goods or services. Revenue is recognized over time when we are creating or enhancing an asset that the customer controls as the asset is created or enhanced or our performance does not create an asset with an alternative use and we have an enforceable right to payment for performance completed. As of December 31, 2022, we had $10.7 billion of transaction price allocated to remaining performance obligations related to executed contracts with an original duration of more than one year, which are primarily included in the Americas segment. Some contracts in the United States included in this amount contain index-dependent price increases, which are not known at this time. We expect to recognize approximately 35% of this amount as revenue in 2023, 30% in 2024, 20% in 2025, 10% in 2026, and 5% in 2027. Significant Judgments Revenues from product sales are recorded at the net sales price (transaction price), which includes estimates of variable consideration primarily related to rebates, wholesaler chargebacks and government clawbacks. These reserves are based on estimates of the amounts earned or to be claimed on the related sales and are included in accrued expenses and other current liabilities and as reductions of accounts receivable, net on the consolidated balance sheets. Management's estimates take into consideration historical experience, current contractual and statutory requirements, specific known market events and trends, industry data and forecasted customer buying and payment patterns. Overall, these reserves reflect our best estimates of the amount of consideration to which we are entitled based on the terms of the contract using the expected value method. The amount of variable consideration included in the net sales price is limited to the amount for which it is probable that a significant reversal in revenue will not occur when the related uncertainty is resolved. Revenue recognized in the years ended December 31, 2022, 2021 and 2020 related to performance obligations satisfied in prior periods was not material. Additionally, our contracts with customers often include promises to transfer multiple products and services to a customer. Determining whether products and services are considered distinct performance obligations that should be accounted for separately and determining the allocation of the transaction price may require significant judgment. Practical Expedients We apply a practical expedient to expense as incurred costs to obtain a contract with a customer when the amortization period would have been one year or less. We do not disclose the value of the transaction price that is allocated to unsatisfied performance obligations for contracts with an original expected length of less than one year. We have elected to use the practical expedient to not adjust the promised amount of consideration for the effects of a significant financing component if it is expected, at contract inception, that the period between when we transfer a promised good or service to a customer and when the customer pays for that good or service will be one year or less. Additionally, all taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction and collected from a customer are excluded from revenue. Accounts Receivable and Allowance for Doubtful Accounts In the normal course of business, we provide credit to our customers, perform credit evaluations of these customers and maintain reserves for potential credit losses. In determining the amount of the allowance for doubtful accounts, we consider, among other items, historical credit losses, the past-due status of receivables, payment histories, other customer-specific information, current economic conditions and reasonable and supportable future forecasts. Receivables are written off when we determine that they are uncollectible. Shipping and Handling Costs Shipping costs incurred to physically move product from our premises to the customer’s premises are classified as selling, general and administrative (SG&A) expenses. Handling costs, which are costs incurred to store, move and prepare products for shipment, are classified as cost of sales. Approximately $493 million in 2022, $381 million in 2021 and $325 million in 2020 of shipping costs were classified in SG&A expenses. Cash, Cash Equivalents and Restricted Cash Cash and cash equivalents include cash, certificates of deposit and money market and other short-term funds with original maturities of three months or less. Restricted cash represents cash balances restricted as to withdrawal or use and are included in prepaid expenses and other current assets on the consolidated balance sheets. Inventories Inventories are stated at the lower of cost or net realizable value determined by the first-in, first-out method. We review inventories on hand at least quarterly and record provisions for estimated excess, slow-moving and obsolete inventory, as well as inventory with a carrying value in excess of net realizable value. Property, Plant and Equipment, Net Property, plant and equipment are stated at cost. Depreciation expense is calculated using the straight-line method over the estimated useful lives of the related assets, which range from 20 to 50 years for buildings and improvements and from 3 to 15 years for machinery and equipment. Leasehold improvements are amortized over the life of the related facility lease (including any renewal periods, if appropriate) or the asset, whichever is shorter. We capitalize certain computer software and software development costs incurred in connection with developing or obtaining software for internal use. Capitalized software costs are included within machinery and equipment and are amortized on a straight-line basis over the estimated useful lives of the software, which generally range from to five years. Research and Development Research and development (R&D) costs, including R&D acquired in transactions that are not business combinations, are expensed as incurred. Pre-regulatory approval contingent milestone obligations to counterparties in collaborative arrangements, which include acquired R&D, are expensed when the milestone is probable to be achieved. Contingent milestone payments made to such counterparties on or after regulatory approval are capitalized and amortized over the remaining useful life of the related product. Amounts capitalized for such payments are included in other intangible assets, net. Acquired in-process R&D (IPR&D) is the value assigned to technology or products under development acquired in a business combination which have not received regulatory approval and have no alternative future use. Acquired IPR&D is capitalized as an indefinite-lived intangible asset. Development costs incurred after the acquisition are expensed as incurred. Upon receipt of regulatory approval of the related technology or product, the indefinite-lived intangible asset is accounted for as a finite-lived intangible asset and amortized on a straight-line basis over the estimated economic life of the related technology or product, subject to annual impairment reviews as discussed below. If the R&D project is abandoned, the indefinite-lived asset is charged to expense. Collaborative Arrangements We enter into collaborative arrangements in the normal course of business. These collaborative arrangements take a number of forms and structures and are designed to enhance and expedite long-term sales and profitability growth. These arrangements may provide for us to obtain commercialization rights to a product under development, and require us to make upfront payments, contingent milestone payments, profit-sharing, and/or royalty payments. We may be responsible for ongoing costs associated with the arrangements, including R&D cost reimbursements to the counterparty. See the R&D section of this note regarding the accounting treatment of upfront and contingent milestone payments. Any royalty and profit-sharing payments during the commercialization phase are expensed as cost of sales when they become due and payable. Restructuring Charges We record liabilities for costs associated with exit or disposal activities in the period in which the liability is incurred. Employee termination costs are primarily recorded when actions are probable and estimable. Costs for one-time termination benefits in which the employee is required to render service until termination in order to receive the benefits are recognized ratably over the future service period. Refer to the discussion below regarding the accounting for asset impairment charges. Goodwill, Intangible Assets and Other Long-Lived Assets Goodwill is initially measured as the excess of the purchase price over the fair value (or other measurement attribute required by U.S. GAAP) of acquired assets and liabilities in a business combination. Goodwill is not amortized but is subject to an impairment review annually and whenever indicators of impairment exist. We have the option to assess goodwill for impairment by initially performing a qualitative assessment to determine whether it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount. If we determine that it is not more-likely-than-not that the fair value of a reporting unit is less than its carrying amount, then the quantitative goodwill impairment test is not required to be performed. If we determine that it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount, or if we do not elect the option to perform an initial qualitative assessment, we perform a quantitative goodwill impairment test. In the quantitative impairment test, we calculate the estimated fair value of the reporting unit. If the carrying amount of the reporting unit exceeds the estimated fair value, an impairment charge is recorded for the amount that its carrying amount, including goodwill, exceeds its fair value, limited to the total amount of goodwill allocated to that reporting unit. In a quantitative goodwill impairment test, the fair values of our reporting units are generally determined based on a discounted cash flow model (an income approach) and earnings multiples (a market approach). Significant inputs to reporting unit fair value measurements generally include forecasted cash flows, discount rates, terminal growth rates and earnings multiples. Each of those inputs can significantly affect the fair values of our reporting units. In 2021, we changed the measurement date of our annual goodwill impairment test from December 31 to November 1. This change better aligns the timing of the goodwill impairment test with our long-term business planning process. The change was not material to our consolidated financial statements as it did not result in the delay, acceleration or avoidance of an impairment charge. Indefinite-lived intangible assets, such as IPR&D acquired in business combinations and certain trade names with indefinite lives, are subject to an impairment review annually and whenever indicators of impairment exist. We have the option to assess indefinite-lived intangible assets for impairment by first performing qualitative assessments to determine whether it is more-likely-than-not that the fair values of the indefinite-lived intangible assets are less than the carrying amounts. If we determine that it is more-likely-than-not that an indefinite-lived intangible asset is impaired, or if we elect not to perform an initial qualitative assessment, we then perform the quantitative impairment test by comparing the fair value of the indefinite-lived intangible asset with its carrying amount. If the carrying amount exceeds the fair value of the indefinite-lived intangible asset, we write the carrying amount down to the fair value. In 2021, we changed the measurement date of our annual indefinite-lived intangible asset impairment tests from December 31 to November 1. This change better aligns the timing of the impairment tests with our long-term business planning process. The change was not material to our consolidated financial statements as it did not result in the delay, acceleration or avoidance of an impairment charge. During the third quarter of 2022, we performed trigger-based impairment tests of the goodwill of each of our Hillrom reporting units as well as the indefinite-lived intangible assets, consisting primarily of trade names, that we acquired in connection with the Hillrom acquisition. We recognized $2.8 billion of goodwill impairment charges and $332 million of pre-tax impairment charges related to those indefinite-lived intangible assets. In connection with our annual goodwill impairment assessment in the fourth quarter of 2022, we performed quantitative impairment tests for all of our reporting units and recorded an additional $27 million goodwill impairment related to one of our Hillrom reporting units. See Note 4, Goodwill and Other Intangible Assets, Net for further information about those impairments. We review the carrying amounts of long-lived assets used in operations, other than goodwill and intangible assets not subject to amortization, for potential impairment when events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. In evaluating recoverability, we group assets and liabilities at the lowest level such that the identifiable cash flows relating to the group are largely independent of the cash flows of other assets and liabilities. We then compare the carrying amounts of the assets or asset groups with the related estimated undiscounted future cash flows. In the event an asset (or asset group) is not recoverable, an impairment charge is recorded as the amount by which the carrying amount of the asset (or asset group) exceeds its fair value. Long-lived assets are classified as held for sale when certain criteria are met, including when management has committed to sell the asset, the asset is available for sale in its present condition and the sale is probable of being completed within one year of the balance sheet date. Assets held for sale are no longer depreciated or amortized and they are reported at the lower of their carrying amount or fair value less cost to sell. Investments in Equity Securities Our investments in marketable equity securities are classified as other non-current assets and are measured at fair value with gains and losses recognized in other (income) expense, net. We have elected to apply the measurement alternative to equity securities without readily determinable fair values. As such, our non-marketable equity securities are measured at cost, less any impairment, and are adjusted for changes in fair value resulting from observable transactions for identical or similar investments of the same issuer. Gains and losses on non-marketable equity securities are also recognized in other (income) expense, net. Noncontrolling investments in common stock or in-substance common stock are accounted for under the equity method if we have the ability to exercise significant influence over the operating and financial policies of the investee. Income Taxes Deferred taxes are recognized for the future tax effects of temporary differences between financial and income tax reporting based on enacted tax laws and rates. We maintain valuation allowances unless it is more-likely-than-not that the deferred tax asset will be realized. With respect to uncertain tax positions, we determine whether the position is more-likely-than-not to be sustained upon examination based on the technical merits of the position. Any tax position that meets the more-likely-than-not recognition threshold is measured and recognized in the consolidated financial statements at the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. The liability relating to uncertain tax positions is classified as current in the consolidated balance sheets to the extent that we anticipate making a payment within one year. Interest and penalties associated with income taxes are classified in the income tax expense (benefit) line in the consolidated statements of income (loss). Foreign Currency Translation Cumulative translation adjustments (CTA) related to foreign operations are included in other comprehensive (loss) income (OCI). For foreign operations in highly inflationary economies, translation gains and losses are included in other (income) expense, net, and were not material in 2022, 2021 and 2020. Derivatives and Hedging Activities All derivative instruments are generally recognized as either assets or liabilities at fair value in the consolidated balance sheets and are classified as short-term or long-term based on the scheduled maturity of the instrument. We designate certain of our derivatives and foreign-currency denominated debt as hedging instruments in cash flow, fair value or net investment hedges. For each derivative instrument that is designated and effective as a cash flow hedge, the gain or loss on the derivative is recorded in accumulated other comprehensive income (loss) (AOCI) and then recognized in earnings consistent with the underlying hedged item. Option premiums or net premiums paid are initially recorded as assets and reclassified to OCI over the life of the option, and then recognized in earnings consistent with the underlying hedged item. Cash flow hedges are classified in cost of sales and interest expense, net, and are primarily related to forecasted intra-company sales denominated in foreign currencies and forecasted interest payments on anticipated issuances of debt, respectively. For each derivative instrument that is designated and effective as a fair value hedge, the gain or loss on the derivative is recognized immediately to earnings, and offsets changes in fair value attributable to a particular risk, such as changes in interest rates, of the hedged item, which are also recognized in earnings. Changes in the fair value of hedge instruments designated as fair value hedges are classified in interest expense, net, as they hedge the interest rate risk associated with certain of our fixed-rate debt. We have designated our Euro-denominated senior notes as hedges of our net investment in our European operations and, as a result, mark to spot rate adjustments on the outstanding debt balances are recorded as a component of AOCI. For derivative instruments that are not designated as hedges, the change in fair value is recorded directly to other (income) expense, net. If it is determined that a derivative or nonderivative hedging instrument is no longer highly effective as a hedge, we discontinue hedge accounting prospectively. Gains or losses relating to terminations of effective cash flow hedges generally continue to be deferred and are recognized consistent with the loss or income recognition of the underlying hedged items. However, if it is probable that the hedged forecasted transactions will not occur, any gains or losses would be immediately reclassified from AOCI to earnings. If we terminate a fair value hedge, an amount equal to the cumulative fair value adjustment to the hedged item at the date of termination is amortized to earnings over the remaining term of the hedged item. If we remove a net investment hedge designation, any gains or losses recognized in AOCI are not reclassified to earnings until we sell, liquidate, or deconsolidate the foreign investments that were being hedged. Cash flows related to the settlement of derivative instruments designated as net investment hedges of foreign operations are classified in the consolidated statements of cash flows within investing activities. Cash flows for all other derivatives, including those that are not designated as a hedge, are classified in the same line item as the cash flows of the related hedged item, which is generally within operating activities. New Accounting Standards Recently issued accounting standards not yet adopted In June 2022, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sales Restrictions, which (1) clarifies the guidance in Topic 820 on the fair value measurement of an equity security that is subject to contractual restrictions that prohibit the sale of an equity security and (2) requires specific disclosures related to such an equity security. The standard is effective for our financial statements beginning in 2024. The impact of the adoption of this ASU is not expected to have a material effect on our consolidated financial statements. Recently adopted accounting pronouncements As of January 1, 2022, we adopted ASU 2021-05, Leases (Topic 842), which requires a lessor to classify a lease with variable lease payments (that do not depend on an index or rate) as an operating lease if (1) the lease would have been classified as a sales-type or direct financing lease, and (2) the lessor would have recognized a selling loss at lease commencement. These changes are intended to avoid recognizing a day-one loss for a lease with variable payments even though the lessor expects the arrangement will be profitable overall. The adoption of this ASU did not have a material impact on our consolidated financial statements. In the fourth quarter of 2021, we adopted ASU 2021-08, Business Combinations - Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. This ASU requires an entity to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606 (Revenue from Contracts with Customers). This ASU is expected to reduce diversity in practice and increase comparability for both the recognition and measurement of acquired revenue contracts with customers at the date of and after a business combination. In accordance with this ASU we recognized contract liabilities of $142 million as part of the Hillrom acquisition in December 2021. We did not acquire contract assets or liabilities in connection with other acquisitions completed in 2021. As of January 1, 2020, we adopted ASU No. 2016-13, Financial Instruments - Credit Losses, which requires the measurement of expected lifetime credit losses, rather than incurred losses, for financial instruments held at the reporting date based on historical experience, current conditions and reasonable forecasts. The main objective of this ASU is to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. We adopted this ASU using the modified retrospective approach. The impact of the adoption of this ASU was an increase to our allowance for doubtful accounts and a decrease to retained earnings of $4 million.
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| Business Combination and Asset Acquisition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ACQUISITIONS AND OTHER ARRANGEMENTS |
Results of operations of acquired businesses are included in our results of operations beginning as of the respective acquisition dates. The purchase price of each acquisition is allocated to the net assets acquired based on estimates of their fair values (or other measurement attribute required under U.S. GAAP) at the date of the acquisition. Any purchase price in excess of these net assets is recorded as goodwill. The allocation of purchase price in certain cases may be subject to revision based on the final determination of fair values during the measurement period, which may be up to one year from the acquisition date. Contingent consideration related to business combinations is recognized at its estimated fair value on the acquisition date. Subsequent changes to the fair value of those contingent consideration arrangements are recognized in earnings. Contingent consideration related to business acquisitions may consist of development, regulatory and commercial milestone payments, and sales or earnings-based payments, and are valued using discounted cash flow techniques. The fair value of development, regulatory and commercial milestone payments reflects management’s expectations of the probability of payment, and increases or decreases as the probability of payment or expectation of timing or amount of payments changes. The fair value of sales-based payments is based upon probability-weighted future revenue estimates and increases or decreases as revenue estimates or expectation of timing or amount of payments changes. Hillrom On December 13, 2021, we completed our acquisition of all outstanding equity interests of Hillrom for a purchase price of $10.5 billion. Including the assumption of Hillrom's outstanding debt obligations, the enterprise value of the transaction was approximately $12.8 billion. Under the terms of the transaction agreement, Hillrom shareholders received $156.00 in cash per each outstanding Hillrom common share. Hillrom was a global medical technology leader whose products and services help enable earlier diagnosis and treatment, optimize surgical efficiency, and accelerate patient recovery while simplifying clinical communication and shifting care closer to home. Hillrom made those outcomes possible through digital and connected care solutions and collaboration tools, including smart bed systems, patient monitoring and diagnostic technologies, respiratory health devices, advanced equipment for the surgical space and more, delivering actionable, real-time insights at the point of care. The following table summarizes the fair value of the total consideration paid:
(a) Represents cash consideration transferred of $156.00 per outstanding Hillrom common share to existing shareholders and holders of equity awards that vested at closing pursuant to their original terms. (b) Represents the pre-acquisition service portion of the fair value of 668 thousand replacement restricted stock units issued to Hillrom equity award holders at closing. The valuation of assets acquired and liabilities assumed was finalized during the fourth quarter of 2022. The following table summarizes the fair values of the assets acquired and liabilities assumed as of the acquisition date:
In the fourth quarter of 2022, we finalized our valuation of the acquisition date assets acquired and liabilities assumed. The measurement period adjustments recorded in 2022 primarily impacted accounts receivable, property plant and equipment, other intangible assets, accrued expenses and other current liabilities and deferred income tax liabilities. Individually, the measurement period adjustments were not material and in total increased goodwill by $49 million. The measurement period adjustments did not have a significant impact to our results of operations. We allocated $804 million of the total consideration to developed technology with a weighted-average useful life of 5 years, $1.9 billion to trade names with an indefinite useful life, $62 million to trade names with a weighted-average useful life of 7 years, $3.2 billion to customer relationships with a weighted-average useful life of 15 years and $30 million to IPR&D that is considered an indefinite lived intangible asset. The fair values of the intangible assets were determined using the income approach. We used a discount rate of 8.5% to value the developed technology, trade names and customer relationships and 9.0% to value the IPR&D. We consider the fair value of the intangible assets to be Level 3 measurements due to the significant estimates and assumptions used by management in establishing the estimated fair value. We also recognized $1.3 billion of deferred income tax liabilities in connection with the acquisition, which are included in other non-current liabilities in the accompanying consolidated balance sheet as of December 31, 2021. The goodwill, which is not deductible for tax purposes, includes the value of an assembled workforce as well as the overall strategic benefits provided to our product portfolio and is included in the Hillrom segment. See Note 4 for additional information about the impairments recognized in the second half of 2022 related to goodwill and certain intangible assets acquired in the Hillrom acquisition. The results of operations of the acquired business have been included in our consolidated statement of income (loss) since the date the business was acquired. The Hillrom acquisition contributed $2.9 billion and $212 million of net sales for the years ended December 31, 2022 and 2021, respectively, and $3.6 billion and $96 million of pretax losses, for the years ended December 31, 2022 and 2021. Significant drivers of Hillrom’s pretax loss in 2022 included goodwill and intangible asset impairments, intangible asset amortization expense, incremental cost of sales from fair value step-ups on acquired inventory, restructuring charges related to the integration and interest expense on the borrowings used to finance the acquisition. Significant drivers of Hillrom’s pretax loss for 2021, which reflects the period from the December 13, 2021 acquisition date through year-end, included intangible asset amortization expense, incremental cost of sales from fair value step-ups on acquired inventory, acquisition-related expenses and interest expense on the borrowings used to finance the acquisition. For the year ended December 31, 2022, we incurred $93 million of integration-related costs and $159 million of incremental cost of sales from the fair value step-ups on acquired Hillrom inventory that was sold in 2022. We also incurred $85 million of restructuring charges in 2022 related to our integration of Hillrom. See Note 11 for additional information about our restructuring activities. For the year ended December 31, 2021, we incurred $139 million of acquisition and integration-related costs, $48 million of bridge facility fees and other pre-acquisition financing costs and $42 million of incremental cost of sales from the fair value step-ups on acquired Hillrom inventory that was sold in 2021. See Note 5 for additional information about financing arrangements related to the Hillrom acquisition. The following table presents the unaudited pro forma combined results of Baxter and Hillrom for the years ended December 31, 2021 and 2020 as if the acquisition of Hillrom had occurred on January 1, 2020:
The acquisition has been accounted for in the unaudited pro forma combined financial information using the acquisition method of accounting with Baxter as the acquirer. In order to reflect the occurrence of the acquisition as if it occurred on January 1, 2020 as required, the unaudited pro forma combined financial information includes adjustments to reflect incremental depreciation and amortization expense based on the current preliminary fair values of the identifiable tangible and intangible assets acquired, additional interest expense associated with the issuance of debt to finance the acquisition, nonrecurring costs directly attributable to the acquisition and the income tax effects of the pro forma adjustments. Those nonrecurring costs, which consist of $201 million of costs from inventory fair value step-ups and $314 million of acquisition-related costs for both Baxter and Hillrom, are reflected in the unaudited pro forma combined financial information for the year ended December 31, 2020. The unaudited pro forma combined financial information is not necessarily indicative of what the consolidated results of operations would have been had the acquisition been completed on January 1, 2020. In addition, the unaudited pro forma combined financial information is not a projection of future results of operations of the combined company nor does it reflect the expected realization of any potential synergies or cost savings associated with the acquisition. PerClot On July 29, 2021, we acquired certain assets related to PerClot, including distribution rights for the U.S. and specified territories outside of the U.S., from CryoLife, Inc. for an upfront purchase price of $25 million and the potential for additional cash consideration of up to $36 million, which had an acquisition-date fair value of $28 million, based upon regulatory and commercial milestones. PerClot is an absorbable powder hemostat indicated for use in surgical procedures, including cardiac, vascular, orthopedic, spinal, neurological, gynecological, ENT and trauma surgery as an adjunct hemostat when control of bleeding from capillary, venous, or arteriolar vessels by pressure, ligature, and other conventional means is either ineffective or impractical. PerClot is approved for distribution in the European Union and other markets and was submitted for Pre-Market Approval (PMA) for distribution in the U.S. in the fourth quarter of 2021. We concluded that the acquired assets met the definition of a business and accounted for the transaction as a business combination using the acquisition method of accounting. The fair values of the potential contingent consideration payments were estimated by applying probability-weighted expected payment models and are Level 3 fair value measurements due to the significant estimates and assumptions used by management in establishing the estimated fair values. The following table summarizes the fair value of the consideration transferred:
The following table summarizes the fair value of the assets acquired as of the acquisition date:
The results of operations of the acquired business have been included in our consolidated statement of income (loss) since the date the business was acquired and were not material for the year ended December 31, 2021. We allocated $39 million of the total consideration to an IPR&D asset with an indefinite useful life, $9 million to the approved PerClot developed product rights with an estimated useful life of 10 years and $1 million to customer relationships with an estimated useful life of 10 years. The fair values of the intangible assets were determined using the income approach. The discount rates used to measure the intangible assets were 18.7% for IPR&D, 16.0% for developed product rights and 15.0% for customer relationships. We consider the fair values of the intangible assets to be Level 3 measurements due to the significant estimates and assumptions used by management in establishing the estimated fair values. The goodwill, which is deductible for tax purposes, includes the value of overall strategic benefits provided to our surgical portfolio of hemostats and sealants and is included in the Americas and EMEA segments. Transderm Scop On March 31, 2021, we acquired the rights to TDS for the U.S. and specified territories outside of the U.S. from subsidiaries of GlaxoSmithKline for an upfront purchase price of $60 million including the cost of acquired inventory and the potential for additional cash consideration of $30 million, which had an acquisition-date fair value of $24 million, based upon regulatory approval of a new contract manufacturer by a specified date. We previously sold this product under a distribution license to the U.S. institutional market. TDS is indicated for post-operative nausea and vomiting in the U.S. and motion sickness in European markets. We concluded that the acquired assets met the definition of a business and accounted for the transaction as a business combination using the acquisition method of accounting. The fair value of the potential contingent consideration payment was estimated by applying a probability-weighted expected payment model and is a Level 3 fair value measurement due to the significant estimates and assumptions used by management in establishing the estimated fair value. The following table summarizes the fair value of the consideration transferred:
The following table summarizes the fair value of the assets acquired as of the acquisition date:
The results of operations of the acquired business have been included in our consolidated statement of income (loss) since the date the business was acquired and were not material for the year ended December 31, 2021. We allocated $64 million of the total consideration to the TDS developed product rights with an estimated useful life of 9 years and $3 million to customer relationships with an estimated useful life of 7 years. The fair values of the intangible assets were determined using the income approach. The discount rates used to measure the intangible assets were 22.5% for developed product rights and 15.5% for customer relationships. We consider the fair values of the intangible assets to be Level 3 measurements due to the significant estimates and assumptions used by management in establishing the estimated fair values. The goodwill, which is deductible for tax purposes, includes the value of overall strategic benefits provided to our pharmaceutical portfolio and is included in the Americas segment. Seprafilm Adhesion Barrier On February 14, 2020, we completed the acquisition of the product rights to Seprafilm Adhesion Barrier (Seprafilm) from Sanofi for approximately $342 million in cash. Seprafilm is indicated for use in patients undergoing abdominal or pelvic laparotomy as an adjunct intended to reduce the incidence, extent and severity of postoperative adhesions between the abdominal wall and the underlying viscera such as omentum, small bowel, bladder, and stomach, and between the uterus and surrounding structures such as tubes and ovaries, large bowel, and bladder. We concluded that the acquired assets met the definition of a business and accounted for the transaction as a business combination using the acquisition method of accounting. The following table summarizes the fair values of the assets acquired as of the acquisition date:
The results of operations of the acquired business have been included in our consolidated statement of income (loss) since the date the business was acquired. The acquisition contributed $94 million of net sales and $18 million of pretax income for the year ended December 31, 2020. Acquisition and integration costs, primarily incremental cost of sales relating to inventory fair value step-ups, associated with the acquisition were $15 million for the year ended December 31, 2020. We allocated $286 million and $10 million of the total consideration to the Seprafilm developed product rights and customer relationships with useful lives of 10 and 7 years, respectively. The fair values of the intangible assets were determined using the income approach. The discount rates used to measure the developed product rights and customer relationship intangible assets were 14.8% and 11.0%, respectively. We consider the fair values of the intangible assets to be Level 3 measurements due to the significant estimates and assumptions we used in establishing the estimated fair values. The goodwill, which is deductible for tax purposes, includes the value of the overall strategic benefits provided to our product portfolio of hemostats and sealants and is included in the Americas and APAC segments. Other Total consideration transferred for other acquisitions totaled $32 million, $21 million and $18 million in 2022, 2021 and 2020, respectively, and primarily resulted in the recognition of goodwill and other intangible assets. These acquisitions did not materially affect our results of operations. Excluding Hillrom, we have not presented pro forma financial information for any of the 2022, 2021 or 2020 acquisitions because their results are not material to our consolidated financial statements. Other Business Development Activities Celerity Pharmaceuticals, LLC In September 2013, we entered into an agreement with Celerity Pharmaceuticals, 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 were obligated to purchase the individual product rights from Celerity if the products obtained regulatory approval. In December 2020, we entered into an agreement with a third party to divest our rights to one of the products that was being developed by Celerity, a generic version of liposomal doxorubicin, for less than $1 million if that product were to receive regulatory approval in the U.S. and European Union in 2022. Liposomal doxorubicin is a chemotherapy medicine used to treat various types of cancer and we entered into this transaction to divest our rights to this generic version of that product after we had separately entered into a transaction to acquire the branded version. The related regulatory approvals were subsequently obtained for the generic version of liposomal doxorubicin and we recognized a loss of approximately $54 million in the third quarter of 2022, representing the difference between the amount we owed Celerity following those regulatory approvals and the proceeds that we were entitled to receive from our divestiture of those product rights. That loss is reported within other operating expense (income), net in our consolidated statements of operations for the year ended December 31, 2022. Zosyn In March 2022, we entered into an agreement with a subsidiary of Pfizer Inc. to acquire the rights to Zosyn, a premixed frozen piperacillin-tazobactam product, in the U.S. and Canada. Zosyn is used for the treatment of intra-abdominal infections, nosocomial pneumonia, skin and skin structure infections, female pelvic infections and community-acquired pneumonia. Under the terms of the acquisition, we paid the acquisition price of $122 million and received specified intellectual property, including patent rights, in the first quarter of 2022 and will receive additional intellectual property, including the product rights to Zosyn, in the first quarter of 2023. Under the arrangement, we are entitled to receive profit sharing payments from sales of Zosyn until the product rights transfer to us in March 2023. The related profit sharing payments that were received during 2022 were not material. The transaction has been accounted for as an asset acquisition, as substantially all of the fair value of the assets being acquired under the arrangement was concentrated in the product rights that we will receive, which we classify as a developed technology intangible asset. Accordingly, the $122 million purchase price was primarily allocated to the developed technology intangible asset class and will be amortized over an estimated useful life of 9 years. Caelyx and Doxil On February 17, 2021, we acquired the rights to Caelyx and Doxil, the branded versions of liposomal doxorubicin, from a subsidiary of Johnson & Johnson for specified territories outside of the U.S. We previously acquired the U.S. rights to this product in 2019. Liposomal doxorubicin is a chemotherapy medicine used to treat various types of cancer. The transaction was accounted for as an asset acquisition, as substantially all of the fair value of the gross assets acquired was concentrated in the developed technology intangible asset. The purchase price of $325 million was allocated to the assets acquired, which included a $314 million developed-technology intangible asset with an estimated useful life of 9 years and an $11 million customer relationship intangible asset with an estimated useful life of 8 years. Net sales related to this acquisition were $108 million for the year ended December 31, 2021. Other Asset Acquisitions During 2020, we acquired the rights to multiple products for $73 million. The purchase prices were capitalized as developed-technology intangible assets and are being amortized over a weighted-average estimated useful life of 11 years. During 2021 and 2020, we also entered into distribution license arrangements for multiple products that have not yet obtained regulatory approval for upfront cash payments of $3 million and $22 million, respectively. The cash paid was treated as R&D expenses on our consolidated statements of income (loss). We could make additional payments of up to $36 million upon the achievement of certain development, regulatory or commercial milestones. Other In addition to the significant arrangements described above, we have entered into several other collaborative arrangements. We could make additional payments of up to $20 million upon the achievement of certain development and regulatory milestones, in addition to future payments related to contingent commercialization milestones, profit-sharing and royalties.
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| ACQUISITIONS AND OTHER ARRANGEMENTS |
Results of operations of acquired businesses are included in our results of operations beginning as of the respective acquisition dates. The purchase price of each acquisition is allocated to the net assets acquired based on estimates of their fair values (or other measurement attribute required under U.S. GAAP) at the date of the acquisition. Any purchase price in excess of these net assets is recorded as goodwill. The allocation of purchase price in certain cases may be subject to revision based on the final determination of fair values during the measurement period, which may be up to one year from the acquisition date. Contingent consideration related to business combinations is recognized at its estimated fair value on the acquisition date. Subsequent changes to the fair value of those contingent consideration arrangements are recognized in earnings. Contingent consideration related to business acquisitions may consist of development, regulatory and commercial milestone payments, and sales or earnings-based payments, and are valued using discounted cash flow techniques. The fair value of development, regulatory and commercial milestone payments reflects management’s expectations of the probability of payment, and increases or decreases as the probability of payment or expectation of timing or amount of payments changes. The fair value of sales-based payments is based upon probability-weighted future revenue estimates and increases or decreases as revenue estimates or expectation of timing or amount of payments changes. Hillrom On December 13, 2021, we completed our acquisition of all outstanding equity interests of Hillrom for a purchase price of $10.5 billion. Including the assumption of Hillrom's outstanding debt obligations, the enterprise value of the transaction was approximately $12.8 billion. Under the terms of the transaction agreement, Hillrom shareholders received $156.00 in cash per each outstanding Hillrom common share. Hillrom was a global medical technology leader whose products and services help enable earlier diagnosis and treatment, optimize surgical efficiency, and accelerate patient recovery while simplifying clinical communication and shifting care closer to home. Hillrom made those outcomes possible through digital and connected care solutions and collaboration tools, including smart bed systems, patient monitoring and diagnostic technologies, respiratory health devices, advanced equipment for the surgical space and more, delivering actionable, real-time insights at the point of care. The following table summarizes the fair value of the total consideration paid:
(a) Represents cash consideration transferred of $156.00 per outstanding Hillrom common share to existing shareholders and holders of equity awards that vested at closing pursuant to their original terms. (b) Represents the pre-acquisition service portion of the fair value of 668 thousand replacement restricted stock units issued to Hillrom equity award holders at closing. The valuation of assets acquired and liabilities assumed was finalized during the fourth quarter of 2022. The following table summarizes the fair values of the assets acquired and liabilities assumed as of the acquisition date:
In the fourth quarter of 2022, we finalized our valuation of the acquisition date assets acquired and liabilities assumed. The measurement period adjustments recorded in 2022 primarily impacted accounts receivable, property plant and equipment, other intangible assets, accrued expenses and other current liabilities and deferred income tax liabilities. Individually, the measurement period adjustments were not material and in total increased goodwill by $49 million. The measurement period adjustments did not have a significant impact to our results of operations. We allocated $804 million of the total consideration to developed technology with a weighted-average useful life of 5 years, $1.9 billion to trade names with an indefinite useful life, $62 million to trade names with a weighted-average useful life of 7 years, $3.2 billion to customer relationships with a weighted-average useful life of 15 years and $30 million to IPR&D that is considered an indefinite lived intangible asset. The fair values of the intangible assets were determined using the income approach. We used a discount rate of 8.5% to value the developed technology, trade names and customer relationships and 9.0% to value the IPR&D. We consider the fair value of the intangible assets to be Level 3 measurements due to the significant estimates and assumptions used by management in establishing the estimated fair value. We also recognized $1.3 billion of deferred income tax liabilities in connection with the acquisition, which are included in other non-current liabilities in the accompanying consolidated balance sheet as of December 31, 2021. The goodwill, which is not deductible for tax purposes, includes the value of an assembled workforce as well as the overall strategic benefits provided to our product portfolio and is included in the Hillrom segment. See Note 4 for additional information about the impairments recognized in the second half of 2022 related to goodwill and certain intangible assets acquired in the Hillrom acquisition. The results of operations of the acquired business have been included in our consolidated statement of income (loss) since the date the business was acquired. The Hillrom acquisition contributed $2.9 billion and $212 million of net sales for the years ended December 31, 2022 and 2021, respectively, and $3.6 billion and $96 million of pretax losses, for the years ended December 31, 2022 and 2021. Significant drivers of Hillrom’s pretax loss in 2022 included goodwill and intangible asset impairments, intangible asset amortization expense, incremental cost of sales from fair value step-ups on acquired inventory, restructuring charges related to the integration and interest expense on the borrowings used to finance the acquisition. Significant drivers of Hillrom’s pretax loss for 2021, which reflects the period from the December 13, 2021 acquisition date through year-end, included intangible asset amortization expense, incremental cost of sales from fair value step-ups on acquired inventory, acquisition-related expenses and interest expense on the borrowings used to finance the acquisition. For the year ended December 31, 2022, we incurred $93 million of integration-related costs and $159 million of incremental cost of sales from the fair value step-ups on acquired Hillrom inventory that was sold in 2022. We also incurred $85 million of restructuring charges in 2022 related to our integration of Hillrom. See Note 11 for additional information about our restructuring activities. For the year ended December 31, 2021, we incurred $139 million of acquisition and integration-related costs, $48 million of bridge facility fees and other pre-acquisition financing costs and $42 million of incremental cost of sales from the fair value step-ups on acquired Hillrom inventory that was sold in 2021. See Note 5 for additional information about financing arrangements related to the Hillrom acquisition. The following table presents the unaudited pro forma combined results of Baxter and Hillrom for the years ended December 31, 2021 and 2020 as if the acquisition of Hillrom had occurred on January 1, 2020:
The acquisition has been accounted for in the unaudited pro forma combined financial information using the acquisition method of accounting with Baxter as the acquirer. In order to reflect the occurrence of the acquisition as if it occurred on January 1, 2020 as required, the unaudited pro forma combined financial information includes adjustments to reflect incremental depreciation and amortization expense based on the current preliminary fair values of the identifiable tangible and intangible assets acquired, additional interest expense associated with the issuance of debt to finance the acquisition, nonrecurring costs directly attributable to the acquisition and the income tax effects of the pro forma adjustments. Those nonrecurring costs, which consist of $201 million of costs from inventory fair value step-ups and $314 million of acquisition-related costs for both Baxter and Hillrom, are reflected in the unaudited pro forma combined financial information for the year ended December 31, 2020. The unaudited pro forma combined financial information is not necessarily indicative of what the consolidated results of operations would have been had the acquisition been completed on January 1, 2020. In addition, the unaudited pro forma combined financial information is not a projection of future results of operations of the combined company nor does it reflect the expected realization of any potential synergies or cost savings associated with the acquisition. PerClot On July 29, 2021, we acquired certain assets related to PerClot, including distribution rights for the U.S. and specified territories outside of the U.S., from CryoLife, Inc. for an upfront purchase price of $25 million and the potential for additional cash consideration of up to $36 million, which had an acquisition-date fair value of $28 million, based upon regulatory and commercial milestones. PerClot is an absorbable powder hemostat indicated for use in surgical procedures, including cardiac, vascular, orthopedic, spinal, neurological, gynecological, ENT and trauma surgery as an adjunct hemostat when control of bleeding from capillary, venous, or arteriolar vessels by pressure, ligature, and other conventional means is either ineffective or impractical. PerClot is approved for distribution in the European Union and other markets and was submitted for Pre-Market Approval (PMA) for distribution in the U.S. in the fourth quarter of 2021. We concluded that the acquired assets met the definition of a business and accounted for the transaction as a business combination using the acquisition method of accounting. The fair values of the potential contingent consideration payments were estimated by applying probability-weighted expected payment models and are Level 3 fair value measurements due to the significant estimates and assumptions used by management in establishing the estimated fair values. The following table summarizes the fair value of the consideration transferred:
The following table summarizes the fair value of the assets acquired as of the acquisition date:
The results of operations of the acquired business have been included in our consolidated statement of income (loss) since the date the business was acquired and were not material for the year ended December 31, 2021. We allocated $39 million of the total consideration to an IPR&D asset with an indefinite useful life, $9 million to the approved PerClot developed product rights with an estimated useful life of 10 years and $1 million to customer relationships with an estimated useful life of 10 years. The fair values of the intangible assets were determined using the income approach. The discount rates used to measure the intangible assets were 18.7% for IPR&D, 16.0% for developed product rights and 15.0% for customer relationships. We consider the fair values of the intangible assets to be Level 3 measurements due to the significant estimates and assumptions used by management in establishing the estimated fair values. The goodwill, which is deductible for tax purposes, includes the value of overall strategic benefits provided to our surgical portfolio of hemostats and sealants and is included in the Americas and EMEA segments. Transderm Scop On March 31, 2021, we acquired the rights to TDS for the U.S. and specified territories outside of the U.S. from subsidiaries of GlaxoSmithKline for an upfront purchase price of $60 million including the cost of acquired inventory and the potential for additional cash consideration of $30 million, which had an acquisition-date fair value of $24 million, based upon regulatory approval of a new contract manufacturer by a specified date. We previously sold this product under a distribution license to the U.S. institutional market. TDS is indicated for post-operative nausea and vomiting in the U.S. and motion sickness in European markets. We concluded that the acquired assets met the definition of a business and accounted for the transaction as a business combination using the acquisition method of accounting. The fair value of the potential contingent consideration payment was estimated by applying a probability-weighted expected payment model and is a Level 3 fair value measurement due to the significant estimates and assumptions used by management in establishing the estimated fair value. The following table summarizes the fair value of the consideration transferred:
The following table summarizes the fair value of the assets acquired as of the acquisition date:
The results of operations of the acquired business have been included in our consolidated statement of income (loss) since the date the business was acquired and were not material for the year ended December 31, 2021. We allocated $64 million of the total consideration to the TDS developed product rights with an estimated useful life of 9 years and $3 million to customer relationships with an estimated useful life of 7 years. The fair values of the intangible assets were determined using the income approach. The discount rates used to measure the intangible assets were 22.5% for developed product rights and 15.5% for customer relationships. We consider the fair values of the intangible assets to be Level 3 measurements due to the significant estimates and assumptions used by management in establishing the estimated fair values. The goodwill, which is deductible for tax purposes, includes the value of overall strategic benefits provided to our pharmaceutical portfolio and is included in the Americas segment. Seprafilm Adhesion Barrier On February 14, 2020, we completed the acquisition of the product rights to Seprafilm Adhesion Barrier (Seprafilm) from Sanofi for approximately $342 million in cash. Seprafilm is indicated for use in patients undergoing abdominal or pelvic laparotomy as an adjunct intended to reduce the incidence, extent and severity of postoperative adhesions between the abdominal wall and the underlying viscera such as omentum, small bowel, bladder, and stomach, and between the uterus and surrounding structures such as tubes and ovaries, large bowel, and bladder. We concluded that the acquired assets met the definition of a business and accounted for the transaction as a business combination using the acquisition method of accounting. The following table summarizes the fair values of the assets acquired as of the acquisition date:
The results of operations of the acquired business have been included in our consolidated statement of income (loss) since the date the business was acquired. The acquisition contributed $94 million of net sales and $18 million of pretax income for the year ended December 31, 2020. Acquisition and integration costs, primarily incremental cost of sales relating to inventory fair value step-ups, associated with the acquisition were $15 million for the year ended December 31, 2020. We allocated $286 million and $10 million of the total consideration to the Seprafilm developed product rights and customer relationships with useful lives of 10 and 7 years, respectively. The fair values of the intangible assets were determined using the income approach. The discount rates used to measure the developed product rights and customer relationship intangible assets were 14.8% and 11.0%, respectively. We consider the fair values of the intangible assets to be Level 3 measurements due to the significant estimates and assumptions we used in establishing the estimated fair values. The goodwill, which is deductible for tax purposes, includes the value of the overall strategic benefits provided to our product portfolio of hemostats and sealants and is included in the Americas and APAC segments. Other Total consideration transferred for other acquisitions totaled $32 million, $21 million and $18 million in 2022, 2021 and 2020, respectively, and primarily resulted in the recognition of goodwill and other intangible assets. These acquisitions did not materially affect our results of operations. Excluding Hillrom, we have not presented pro forma financial information for any of the 2022, 2021 or 2020 acquisitions because their results are not material to our consolidated financial statements. Other Business Development Activities Celerity Pharmaceuticals, LLC In September 2013, we entered into an agreement with Celerity Pharmaceuticals, 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 were obligated to purchase the individual product rights from Celerity if the products obtained regulatory approval. In December 2020, we entered into an agreement with a third party to divest our rights to one of the products that was being developed by Celerity, a generic version of liposomal doxorubicin, for less than $1 million if that product were to receive regulatory approval in the U.S. and European Union in 2022. Liposomal doxorubicin is a chemotherapy medicine used to treat various types of cancer and we entered into this transaction to divest our rights to this generic version of that product after we had separately entered into a transaction to acquire the branded version. The related regulatory approvals were subsequently obtained for the generic version of liposomal doxorubicin and we recognized a loss of approximately $54 million in the third quarter of 2022, representing the difference between the amount we owed Celerity following those regulatory approvals and the proceeds that we were entitled to receive from our divestiture of those product rights. That loss is reported within other operating expense (income), net in our consolidated statements of operations for the year ended December 31, 2022. Zosyn In March 2022, we entered into an agreement with a subsidiary of Pfizer Inc. to acquire the rights to Zosyn, a premixed frozen piperacillin-tazobactam product, in the U.S. and Canada. Zosyn is used for the treatment of intra-abdominal infections, nosocomial pneumonia, skin and skin structure infections, female pelvic infections and community-acquired pneumonia. Under the terms of the acquisition, we paid the acquisition price of $122 million and received specified intellectual property, including patent rights, in the first quarter of 2022 and will receive additional intellectual property, including the product rights to Zosyn, in the first quarter of 2023. Under the arrangement, we are entitled to receive profit sharing payments from sales of Zosyn until the product rights transfer to us in March 2023. The related profit sharing payments that were received during 2022 were not material. The transaction has been accounted for as an asset acquisition, as substantially all of the fair value of the assets being acquired under the arrangement was concentrated in the product rights that we will receive, which we classify as a developed technology intangible asset. Accordingly, the $122 million purchase price was primarily allocated to the developed technology intangible asset class and will be amortized over an estimated useful life of 9 years. Caelyx and Doxil On February 17, 2021, we acquired the rights to Caelyx and Doxil, the branded versions of liposomal doxorubicin, from a subsidiary of Johnson & Johnson for specified territories outside of the U.S. We previously acquired the U.S. rights to this product in 2019. Liposomal doxorubicin is a chemotherapy medicine used to treat various types of cancer. The transaction was accounted for as an asset acquisition, as substantially all of the fair value of the gross assets acquired was concentrated in the developed technology intangible asset. The purchase price of $325 million was allocated to the assets acquired, which included a $314 million developed-technology intangible asset with an estimated useful life of 9 years and an $11 million customer relationship intangible asset with an estimated useful life of 8 years. Net sales related to this acquisition were $108 million for the year ended December 31, 2021. Other Asset Acquisitions During 2020, we acquired the rights to multiple products for $73 million. The purchase prices were capitalized as developed-technology intangible assets and are being amortized over a weighted-average estimated useful life of 11 years. During 2021 and 2020, we also entered into distribution license arrangements for multiple products that have not yet obtained regulatory approval for upfront cash payments of $3 million and $22 million, respectively. The cash paid was treated as R&D expenses on our consolidated statements of income (loss). We could make additional payments of up to $36 million upon the achievement of certain development, regulatory or commercial milestones. Other In addition to the significant arrangements described above, we have entered into several other collaborative arrangements. We could make additional payments of up to $20 million upon the achievement of certain development and regulatory milestones, in addition to future payments related to contingent commercialization milestones, profit-sharing and royalties.
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SUPPLEMENTAL FINANCIAL INFORMATION |
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| Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SUPPLEMENTAL FINANCIAL INFORMATION |
Allowance for Doubtful Accounts The following table is a summary of changes in our allowance for doubtful accounts for the years ended December 31, 2022 and 2021.
Inventories
Prepaid Expenses and Other Current Assets
In September 2022, we signed a purchase agreement with a buyer to sell our corporate headquarters in Deerfield, Illinois for $52 million. The related assets are classified as held for sale and are presented within prepaid expenses and other current assets in the accompanying consolidated balance sheet as of December 31, 2022. While the closing remains subject to the satisfaction of various closing conditions (including satisfactory completion of municipal diligence by the buyer), we expect the transaction to close in 2023. The net book value of the assets approximates the transaction price net of estimated selling costs. Property, Plant and Equipment, Net
Depreciation expense was $650 million in 2022, $592 million in 2021 and $601 million in 2020. Other Non-Current Assets
Accrued Expenses and Other Current Liabilities
Other Non-Current Liabilities
Interest Expense, net
Other (Income) Expense, net
We have been winding down our operations in Argentina since early 2021 and we determined that the net assets of the related entities were substantially liquidated during the third quarter of 2022. As a result of that determination, we reclassified their $65 million cumulative translation loss from accumulated other comprehensive income (loss) to other (income) expense, net. Supplemental Cash Flow Information Non-Cash Investing Activities Purchases of property, plant and equipment included in accounts payable and accrued liabilities as of December 31, 2022, 2021 and 2020 was $91 million, $79 million and $102 million, respectively. Other Supplemental Information
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GOODWILL AND OTHER INTANGIBLE ASSETS, NET |
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| Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| GOODWILL AND OTHER INTANGIBLE ASSETS, NET |
Goodwill The following is a reconciliation of goodwill by business segment.
Goodwill Impairments As described in Note 2, we acquired Hillrom on December 13, 2021 and recognized $6.8 billion of goodwill and $6.0 billion of other intangible assets, including $1.9 billion of indefinite-lived intangible assets, in connection with that acquisition. Our Hillrom segment includes the following three reporting units: Patient Support Systems, Front Line Care and Surgical Solutions. During the third quarter of 2022, we performed trigger-based impairment tests of the goodwill of each of those three reporting units, as well as the indefinite-lived intangible assets, consisting primarily of trade names, that we acquired in connection with the Hillrom acquisition. We performed those tests as of September 30, 2022 due to (a) current macroeconomic conditions, including the rising interest rate environment and broad declines in equity valuations, and (b) reduced earnings forecasts for our three Hillrom reporting units, driven primarily by current shortages of certain component parts used in our products, raw materials inflation and increased supply chain costs. Those impairment tests resulted in total pre-tax goodwill impairment charges of $2.8 billion in the third quarter of 2022 relating to our Patient Support Systems, Front Line Care and Surgical Solutions reporting units. In connection with our annual goodwill impairment assessment in the fourth quarter of 2022, we performed quantitative impairment tests for all of our reporting units and recorded an additional $27 million goodwill impairment related to our Surgical Solutions reporting unit. No goodwill impairments were recorded for our remaining reporting units in connection with our annual goodwill impairment tests because the fair values of those reporting units exceeded their carrying amounts. See further discussion below for information regarding intangible asset impairment charges recognized during the third and fourth quarters of 2022. The fair values of the reporting units tested for impairment during 2022 were determined based on a discounted cash flow model (an income approach) and earnings multiples (a market approach) based on the guideline public company method. Significant assumptions used in the determination of fair value of our reporting units generally include forecasted cash flows, discount rates, terminal growth rates and earnings multiples. The discounted cash flow models used to determine the fair values of our reporting units during 2022 reflected our most recent cash flow projections, discount rates ranging from 9% to 10% and terminal growth rates ranging from 2% to 3%. Our reporting unit fair value measurements are classified as Level 3 in the fair value hierarchy because they involve significant unobservable inputs. Other Intangible Assets, Net The following is a summary of our other intangible assets.
Intangible asset amortization expense was $753 million in 2022, $298 million in 2021 and $222 million in 2020. The anticipated annual amortization expense for definite-lived intangible assets recorded as of December 31, 2022 is $635 million in 2023, $615 million in 2024, $583 million in 2025, $553 million in 2026 and $385 million in 2027. Intangible Asset Impairments In addition to the goodwill impairments discussed above, we recognized pre-tax impairment charges of $332 million in the third quarter of 2022 to reduce the carrying amounts of certain indefinite-lived intangible assets, which primarily related to the Hillrom and Welch Allyn trade names acquired in the Hillrom acquisition, to their estimated fair values. Those intangible asset impairment charges are classified within cost of sales in the accompanying for the year ended December 31, 2022. The fair values of the trade name intangible assets were determined using the relief from royalty method. Significant assumptions used in the determination of the fair value of the trade name intangible assets included revenue growth rates, terminal growth rates, discount rates and royalty rates. The relief from royalty models used in the determination of the fair values of our trade name intangible assets during 2022 reflected our most recent revenue projections, a discount rate of 9.5%, royalty rates ranging from 3% to 5% and terminal growth rates ranging from 2% to 3%. Our trade name intangible asset fair value measurements are classified as Level 3 in the fair value hierarchy because they involve significant unobservable inputs. In the fourth quarter of 2022 and second quarter of 2020, we recognized impairment charges of $12 million and $17 million, respectively, related to developed-technology intangible assets due to declines in market expectations for the related products. The fair values of the intangible assets were measured using a discounted cash flow approach and the charges are classified within cost of sales in the accompanying consolidated statements of income (loss) for the years ended December 31, 2022 and 2020. We consider the fair values of the assets to be Level 3 measurements due to the significant estimates and assumptions, including forecasted future cash flows, that we used in establishing the estimated fair values.
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DEBT AND CREDIT FACILITIES |
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| Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| DEBT AND CREDIT FACILITIES |
Debt Outstanding At December 31, 2022 and 2021, we had the following debt outstanding:
1Book values include any discounts, premiums and adjustments related to hedging instruments and effective interest rates reflect amortization of those items. Significant Debt Activity In March 2020, we issued $750 million of 3.75% senior notes due in October 2025 and $500 million of 3.95% senior notes due in April 2030 (collectively, the March 2020 senior notes). Pursuant to a registration rights agreement (the March 2020 Registration Rights Agreement) with the initial purchasers of the March 2020 senior notes, we agreed to use our commercially reasonable efforts to file a registration statement with respect to a registered offer to exchange the March 2020 senior notes for new notes with terms substantially identical in all material respects to the March 2020 senior notes and to have such registration statement declared effective under the U.S. Securities Act of 1933. The exchange offer with respect to the notes due April 2030 was completed in May 2021. In October 2020, we repaid $322 million of variable-rate loans that matured in 2020. In November 2020, we issued $650 million of 1.73% senior notes due in April 2031 (the November 2020 senior notes). Pursuant to a registration rights agreement (the November 2020 Registration Rights Agreement) with the initial purchasers of the November 2020 senior notes, we agreed to use our commercially reasonable efforts to file a registration statement with respect to a registered offer to exchange the November 2020 senior notes for new notes with terms substantially identical in all material respects to the November 2020 senior notes and to have such registration statement declared effective under the U.S. Securities Act of 1933. The exchange offer with respect to the November 2020 senior notes was completed in May 2021. We used the proceeds from the November 2020 senior notes, along with cash on hand, to redeem the $750 million of 3.75% senior notes due in October 2025 that were issued in March 2020. In connection with the redemption of the $750 million of 3.75% senior notes due in October 2025, including the payment of a $104 million make-whole premium to the debt holders, we recognized a pre-tax loss of $110 million from the early extinguishment of debt, which is included in other (income) expense, net in 2020. In July 2021, we redeemed $400 million in 1.7% senior notes due August 2021, which was partially funded by the issuance of commercial paper. On September 30, 2021, we entered into a term loan credit agreement (the Term Loan Credit Agreement), pursuant to which a syndicate of financial institutions committed to provide us with a senior unsecured term loan facility in an aggregate principal amount of $4.0 billion (the Term Loan Facility), consisting of a $2.0 billion three-year term loan facility and a $2.0 billion five-year term loan facility. Loans under the Term Loan Facility were funded on the closing date of the Hillrom acquisition to fund a portion of the consideration for the Hillrom acquisition, repay certain indebtedness of Hillrom, and pay fees and expenses related to the foregoing. Loans under the Term Loan Facility bear interest at variable rates, are subject to amortization at a quarterly rate of 0.625% for the first four quarters following the anniversary of our initial borrowing date and 1.25% thereafter (with loans outstanding under the five-year tranche subject to amortization at a quarterly rate of 1.875% after the second anniversary of the commencement of amortization and 2.500% after the third anniversary of the commencement of amortization). The Term Loan Credit Agreement contains various covenants, including a maximum net leverage ratio. In December 2021, we issued $800 million of 0.868% senior notes due in 2023, $1.4 billion of 1.322% senior notes due in 2024, $1.45 billion of 1.915% senior notes due in 2027, $1.25 billion of 2.272% senior notes due in 2028, $1.55 billion of 2.539% senior notes due in 2032, $750 million of 3.132% senior notes due in 2051, $300 million of floating rate senior notes due in 2023 and $300 million of floating rate senior notes due in 2024 (collectively, the Hillrom notes) to fund a portion of the consideration for the Hillrom acquisition, repay certain indebtedness of Hillrom, and pay fees and expenses related to the foregoing. In conjunction with the issuances of the Hillrom notes, we entered into a registration rights agreement in which we agreed to file a registration statement with the SEC with respect to an offer to exchange the Hillrom notes for new issues of notes with the same terms registered under the Securities Act of 1933, as amended. Those exchange offers with respect to the Hillrom notes were completed in the second quarter of 2022. On September 1, 2021, we entered into a bridge facility commitment letter with JPMorgan Chase Bank, N.A. (JP Morgan) and Citigroup Global Markets Inc. (Citi) pursuant to which JP Morgan and Citi committed to provide a 364-day senior unsecured bridge term loan facility in an aggregate principal amount of $11.4 billion (the Bridge Facility) for the purpose of funding the consideration for the Hillrom acquisition, repaying certain indebtedness of Hillrom, and paying fees and expenses related to the foregoing. The Bridge Facility included upfront fees of $40 million. The commitments under the Bridge Facility were reduced by $4.0 billion on September 30, 2021 when we entered into the Term Loan Facility and the remaining commitments were reduced to zero on December 1, 2021 when we issued the Hillrom notes, both in accordance with the terms of the commitment letter. As a result, the Bridge Facility was terminated and the remaining unamortized upfront fees related to the Bridge Facility were charged to interest expense, net during the year ended December 31, 2021. Baxter assumed debt with an acquisition-date fair value of $2.4 billion as part of the acquisition of Hillrom. Baxter used the proceeds from the Hillrom notes, the Term Loan Facility and cash on hand to repay substantially all of this indebtedness, including accrued interest and applicable early redemption premiums, and recognized a net loss on the early extinguishment of debt of $5 million. In the first half of 2022, we repaid $335 million of our $2.0 billion three-year term loan facility and $355 million of our $2.0 billion five-year term loan facility. The loss from the early extinguishment of this debt was not significant. In the third quarter of 2022, we amended the credit agreements governing our term loan facility and our U.S. dollar- denominated revolving credit facility and the guaranty agreement with respect to our Euro-denominated revolving credit facility, in each case to delay the commencement of our net leverage ratio covenant step-down schedule until June 30, 2024. We also amended the credit agreements governing our term loan facility and our U.S. dollar denominated revolving credit facility to transition the benchmark rate from LIBOR to the Secured Overnight Financing Rate (SOFR). In the third quarter of 2022, we repaid $203 million of our 2.4% senior notes due in 2022. Credit Facilities On September 30, 2021, we entered into a new U.S. dollar-denominated revolving credit facility (the USD Revolver), and on October 1, 2021, we amended our existing Euro-denominated revolving credit facility (as amended, the Euro Revolver). Our USD Revolver has a capacity of $2.5 billion and our Euro Revolver has a capacity of €200 million. Each of the facilities matures in 2026. The facilities enable us to borrow funds on an unsecured basis at variable interest rates, and contain various covenants, including a maximum net leverage ratio. Fees under the credit facilities are 0.125% and 0.09% annually as of December 31, 2022 and 2021, respectively, and are based on our credit ratings and the total capacity of the facility. There were no borrowings outstanding under these credit facilities as of December 31, 2022 and 2021. Our commercial paper borrowing arrangements require us to maintain undrawn borrowing capacity under our credit facilities for an amount at least equal to our outstanding commercial paper borrowings. Based on our covenant calculations as of December 31, 2022 we have capacity to draw approximately $2.1 billion under our credit facilities, less commercial paper borrowings which were $299 million at year-end. We also maintain other credit arrangements, which totaled approximately $230 million and $225 million as of December 31, 2022 and 2021, respectively. There were no amounts outstanding under these arrangements as of December 31, 2022 and 2021. As of December 31, 2022, we were in compliance with the financial covenants in these agreements. The non-performance of any financial institution supporting any of the credit facilities would reduce the maximum capacity of these facilities by each institution’s respective commitment. Commercial Paper As of December 31, 2022, we had $299 million of commercial paper outstanding with a weighted-average interest rate of 4.75% and an original weighted-average term of 32 days. As of December 31, 2021, we had $300 million of commercial paper outstanding with a weighted-average interest rate of 0.27% and an original weighted-average term of 88 days. Future Debt Maturities
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| Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| LEASES |
Lessee Activity We have entered into operating and finance leases primarily for office, manufacturing, warehouse and R&D facilities, vehicles and equipment. Our leases have remaining terms from 1 to 40 years and some of those leases include options that provide us with the ability to extend the lease term for periods ranging from 1 to 16 years. Such options are included in the lease term when it is reasonably certain that the option will be exercised. Certain of our leases include provisions for variable lease payments which are based on, but not limited to, maintenance, insurance, taxes, index escalations and usage-based amounts. For all asset classes, we have elected to apply a practical expedient to account for other services within lease contracts as components of the lease. We also have elected to apply a practical expedient for short-term leases whereby we do not recognize a lease liability and right-of-use asset for leases with a term of less than 12 months. We classify our leases as operating or finance at the lease commencement date. Finance leases are generally those leases for which we will pay substantially all of the underlying asset’s fair value or will use the asset for all or a major part of its economic life, including circumstances in which we will ultimately own the asset. All other leases are operating leases. For finance leases, we recognize interest expense using the effective interest method and we recognize amortization expense on the right-of-use asset over the shorter of the lease term or the useful life of the asset. For operating leases, we recognize lease cost on a straight-line basis over the term of the lease. Lease liabilities and right-of-use assets are recognized at the lease commencement date based on the present value of minimum lease payments over the lease term. We determine the present value of payments under a lease based on our incremental borrowing rate as of the lease commencement date. The incremental borrowing rate is equal to the rate of interest that we would have to pay to borrow on a collateralized basis over a similar term in an amount equal to the lease payments in a similar economic environment. The components of lease cost for the years ended December 31, 2022, 2021 and 2020 were:
The following table contains supplemental cash flow information related to leases for the years ended December 31, 2022, 2021 and 2020:
We have entered into lease agreements with aggregate future payments of $13 million for leases that have not yet commenced as of December 31, 2022. Supplemental balance sheet information related to leases as of December 31, 2022 and 2021 include:
Lease term and discount rates as of December 31, 2022 and 2021 were:
Maturities of operating and finance lease liabilities as of December 31, 2022 were:
Lessor Activity We lease medical equipment, such as smart beds, renal dialysis equipment and infusion pumps, to customers, often in conjunction with arrangements to provide consumable medical products such as dialysis therapies, intravenous (IV) fluids and inhaled anesthetics. Certain of our equipment leases are classified as sales-type leases and the remainder are operating leases. The terms of the related contracts, including the proportion of fixed versus variable payments and any options to shorten or extend the lease term, vary by customer. We allocate revenue between equipment leases and medical products based on their standalone selling prices. The components of lease revenue for the years ended December 31, 2022, 2021 and 2020 were:
The components of our net investment in sales-type leases as of December 31, 2022 and 2021 were:
Our net investment in sales-type leases is classified as follows in the accompanying consolidated balance sheets:
Our net investment in sales-type leases was $88 million as of December 31, 2022, of which $12 million originated in 2018 and prior, $17 million in 2019, $25 million in 2020, $23 million in 2021 and $11 million in 2022. Maturities of sales-type and operating leases as of December 31, 2022 were:
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| LEASES |
Lessee Activity We have entered into operating and finance leases primarily for office, manufacturing, warehouse and R&D facilities, vehicles and equipment. Our leases have remaining terms from 1 to 40 years and some of those leases include options that provide us with the ability to extend the lease term for periods ranging from 1 to 16 years. Such options are included in the lease term when it is reasonably certain that the option will be exercised. Certain of our leases include provisions for variable lease payments which are based on, but not limited to, maintenance, insurance, taxes, index escalations and usage-based amounts. For all asset classes, we have elected to apply a practical expedient to account for other services within lease contracts as components of the lease. We also have elected to apply a practical expedient for short-term leases whereby we do not recognize a lease liability and right-of-use asset for leases with a term of less than 12 months. We classify our leases as operating or finance at the lease commencement date. Finance leases are generally those leases for which we will pay substantially all of the underlying asset’s fair value or will use the asset for all or a major part of its economic life, including circumstances in which we will ultimately own the asset. All other leases are operating leases. For finance leases, we recognize interest expense using the effective interest method and we recognize amortization expense on the right-of-use asset over the shorter of the lease term or the useful life of the asset. For operating leases, we recognize lease cost on a straight-line basis over the term of the lease. Lease liabilities and right-of-use assets are recognized at the lease commencement date based on the present value of minimum lease payments over the lease term. We determine the present value of payments under a lease based on our incremental borrowing rate as of the lease commencement date. The incremental borrowing rate is equal to the rate of interest that we would have to pay to borrow on a collateralized basis over a similar term in an amount equal to the lease payments in a similar economic environment. The components of lease cost for the years ended December 31, 2022, 2021 and 2020 were:
The following table contains supplemental cash flow information related to leases for the years ended December 31, 2022, 2021 and 2020:
We have entered into lease agreements with aggregate future payments of $13 million for leases that have not yet commenced as of December 31, 2022. Supplemental balance sheet information related to leases as of December 31, 2022 and 2021 include:
Lease term and discount rates as of December 31, 2022 and 2021 were:
Maturities of operating and finance lease liabilities as of December 31, 2022 were:
Lessor Activity We lease medical equipment, such as smart beds, renal dialysis equipment and infusion pumps, to customers, often in conjunction with arrangements to provide consumable medical products such as dialysis therapies, intravenous (IV) fluids and inhaled anesthetics. Certain of our equipment leases are classified as sales-type leases and the remainder are operating leases. The terms of the related contracts, including the proportion of fixed versus variable payments and any options to shorten or extend the lease term, vary by customer. We allocate revenue between equipment leases and medical products based on their standalone selling prices. The components of lease revenue for the years ended December 31, 2022, 2021 and 2020 were:
The components of our net investment in sales-type leases as of December 31, 2022 and 2021 were:
Our net investment in sales-type leases is classified as follows in the accompanying consolidated balance sheets:
Our net investment in sales-type leases was $88 million as of December 31, 2022, of which $12 million originated in 2018 and prior, $17 million in 2019, $25 million in 2020, $23 million in 2021 and $11 million in 2022. Maturities of sales-type and operating leases as of December 31, 2022 were:
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| LEASES |
Lessee Activity We have entered into operating and finance leases primarily for office, manufacturing, warehouse and R&D facilities, vehicles and equipment. Our leases have remaining terms from 1 to 40 years and some of those leases include options that provide us with the ability to extend the lease term for periods ranging from 1 to 16 years. Such options are included in the lease term when it is reasonably certain that the option will be exercised. Certain of our leases include provisions for variable lease payments which are based on, but not limited to, maintenance, insurance, taxes, index escalations and usage-based amounts. For all asset classes, we have elected to apply a practical expedient to account for other services within lease contracts as components of the lease. We also have elected to apply a practical expedient for short-term leases whereby we do not recognize a lease liability and right-of-use asset for leases with a term of less than 12 months. We classify our leases as operating or finance at the lease commencement date. Finance leases are generally those leases for which we will pay substantially all of the underlying asset’s fair value or will use the asset for all or a major part of its economic life, including circumstances in which we will ultimately own the asset. All other leases are operating leases. For finance leases, we recognize interest expense using the effective interest method and we recognize amortization expense on the right-of-use asset over the shorter of the lease term or the useful life of the asset. For operating leases, we recognize lease cost on a straight-line basis over the term of the lease. Lease liabilities and right-of-use assets are recognized at the lease commencement date based on the present value of minimum lease payments over the lease term. We determine the present value of payments under a lease based on our incremental borrowing rate as of the lease commencement date. The incremental borrowing rate is equal to the rate of interest that we would have to pay to borrow on a collateralized basis over a similar term in an amount equal to the lease payments in a similar economic environment. The components of lease cost for the years ended December 31, 2022, 2021 and 2020 were:
The following table contains supplemental cash flow information related to leases for the years ended December 31, 2022, 2021 and 2020:
We have entered into lease agreements with aggregate future payments of $13 million for leases that have not yet commenced as of December 31, 2022. Supplemental balance sheet information related to leases as of December 31, 2022 and 2021 include:
Lease term and discount rates as of December 31, 2022 and 2021 were:
Maturities of operating and finance lease liabilities as of December 31, 2022 were:
Lessor Activity We lease medical equipment, such as smart beds, renal dialysis equipment and infusion pumps, to customers, often in conjunction with arrangements to provide consumable medical products such as dialysis therapies, intravenous (IV) fluids and inhaled anesthetics. Certain of our equipment leases are classified as sales-type leases and the remainder are operating leases. The terms of the related contracts, including the proportion of fixed versus variable payments and any options to shorten or extend the lease term, vary by customer. We allocate revenue between equipment leases and medical products based on their standalone selling prices. The components of lease revenue for the years ended December 31, 2022, 2021 and 2020 were:
The components of our net investment in sales-type leases as of December 31, 2022 and 2021 were:
Our net investment in sales-type leases is classified as follows in the accompanying consolidated balance sheets:
Our net investment in sales-type leases was $88 million as of December 31, 2022, of which $12 million originated in 2018 and prior, $17 million in 2019, $25 million in 2020, $23 million in 2021 and $11 million in 2022. Maturities of sales-type and operating leases as of December 31, 2022 were:
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| LEASES |
Lessee Activity We have entered into operating and finance leases primarily for office, manufacturing, warehouse and R&D facilities, vehicles and equipment. Our leases have remaining terms from 1 to 40 years and some of those leases include options that provide us with the ability to extend the lease term for periods ranging from 1 to 16 years. Such options are included in the lease term when it is reasonably certain that the option will be exercised. Certain of our leases include provisions for variable lease payments which are based on, but not limited to, maintenance, insurance, taxes, index escalations and usage-based amounts. For all asset classes, we have elected to apply a practical expedient to account for other services within lease contracts as components of the lease. We also have elected to apply a practical expedient for short-term leases whereby we do not recognize a lease liability and right-of-use asset for leases with a term of less than 12 months. We classify our leases as operating or finance at the lease commencement date. Finance leases are generally those leases for which we will pay substantially all of the underlying asset’s fair value or will use the asset for all or a major part of its economic life, including circumstances in which we will ultimately own the asset. All other leases are operating leases. For finance leases, we recognize interest expense using the effective interest method and we recognize amortization expense on the right-of-use asset over the shorter of the lease term or the useful life of the asset. For operating leases, we recognize lease cost on a straight-line basis over the term of the lease. Lease liabilities and right-of-use assets are recognized at the lease commencement date based on the present value of minimum lease payments over the lease term. We determine the present value of payments under a lease based on our incremental borrowing rate as of the lease commencement date. The incremental borrowing rate is equal to the rate of interest that we would have to pay to borrow on a collateralized basis over a similar term in an amount equal to the lease payments in a similar economic environment. The components of lease cost for the years ended December 31, 2022, 2021 and 2020 were:
The following table contains supplemental cash flow information related to leases for the years ended December 31, 2022, 2021 and 2020:
We have entered into lease agreements with aggregate future payments of $13 million for leases that have not yet commenced as of December 31, 2022. Supplemental balance sheet information related to leases as of December 31, 2022 and 2021 include:
Lease term and discount rates as of December 31, 2022 and 2021 were:
Maturities of operating and finance lease liabilities as of December 31, 2022 were:
Lessor Activity We lease medical equipment, such as smart beds, renal dialysis equipment and infusion pumps, to customers, often in conjunction with arrangements to provide consumable medical products such as dialysis therapies, intravenous (IV) fluids and inhaled anesthetics. Certain of our equipment leases are classified as sales-type leases and the remainder are operating leases. The terms of the related contracts, including the proportion of fixed versus variable payments and any options to shorten or extend the lease term, vary by customer. We allocate revenue between equipment leases and medical products based on their standalone selling prices. The components of lease revenue for the years ended December 31, 2022, 2021 and 2020 were:
The components of our net investment in sales-type leases as of December 31, 2022 and 2021 were:
Our net investment in sales-type leases is classified as follows in the accompanying consolidated balance sheets:
Our net investment in sales-type leases was $88 million as of December 31, 2022, of which $12 million originated in 2018 and prior, $17 million in 2019, $25 million in 2020, $23 million in 2021 and $11 million in 2022. Maturities of sales-type and operating leases as of December 31, 2022 were:
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COMMITMENTS AND CONTINGENCIES |
12 Months Ended | ||||||
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Dec. 31, 2022 | |||||||
| Commitments and Contingencies Disclosure [Abstract] | |||||||
| COMMITMENTS AND CONTINGENCIES |
Refer to Note 2 for information regarding our unfunded contingent payments associated with collaborative and other arrangements. Indemnifications During the normal course of business, we make indemnities, commitments and guarantees pursuant to which we may be required to make payments related to specific transactions. Indemnifications include: (i) intellectual property indemnities to customers in connection with the use, sales or license of products and services; (ii) indemnities to customers in connection with losses incurred while performing services on their premises; (iii) indemnities to vendors and service providers pertaining to claims based on negligence or willful misconduct; (iv) indemnities involving the representations and warranties in certain contracts; and (v) contractual indemnities for our directors and certain of our executive officers for services provided to or at the request of us. In addition, under our Amended and Restated Certificate of Incorporation, and consistent with Delaware General Corporation Law, we have agreed to indemnify our directors and officers for certain losses and expenses upon the occurrence of certain prescribed events. The majority of these indemnities, commitments and guarantees do not provide for any limitation on the maximum potential for future payments that we could be obligated to make. To help address some of these risks, we maintain various insurance coverages. Based on historical experience and evaluation of the agreements, we do not believe that any payments related to our indemnities will have a material impact on our financial condition or results of operations. Legal Contingencies We are involved in product liability, patent, commercial, and other legal matters that arise in the normal course of our business. We record a liability when a loss is considered probable and the amount can be reasonably estimated. If the reasonable estimate of a probable loss is a range, and no amount within the range is a better estimate, the minimum amount in the range is accrued. If a loss is not probable or a probable loss cannot be reasonably estimated, no liability is recorded. As of December 31, 2022 and 2021, our total recorded reserves with respect to legal and environmental matters were $28 million and $72 million, respectively. We have established reserves for certain of the matters discussed below. We are not able to estimate the amount or range of any loss for certain contingencies for which there is no reserve or additional loss for matters already reserved. While our liability in connection with these claims cannot be estimated and the resolution thereof in any reporting period could have a significant impact on our results of operations and cash flows for that period, the outcome of these legal proceedings is not expected to have a material adverse effect on our consolidated financial position. While we believe that we have valid defenses in the matters set forth below, litigation is inherently uncertain, excessive verdicts do occur, and we may incur material judgments or enter into material settlements of claims. In addition to the matters described below, we remain subject to the risk of future administrative and legal actions. With respect to governmental and regulatory matters, these actions may lead to product recalls, injunctions, and other restrictions on our operations and monetary sanctions, including significant civil or criminal penalties, all of which could materially affect future results of operations. With respect to intellectual property, we may be exposed to significant litigation concerning the scope of our and others’ rights. Such litigation could result in a loss of patent protection or the ability to market products, which could lead to a significant loss of sales, or otherwise materially affect future results of operations. Environmental We are involved as a potentially responsible party (PRP) for environmental clean-up costs at six Superfund sites. Under the U.S. Superfund statute and many state laws, generators of hazardous waste sent to a disposal or recycling site are liable for site cleanup if contaminants from that property later leak into the environment. The laws generally provide that a PRP may be held jointly and severally liable for the costs of investigating and remediating the site. Separate from the Superfund cases noted above, we are involved in ongoing environmental remediations associated with historic operations at certain of our facilities. As of December 31, 2022 and 2021, our environmental reserves, which are measured on an undiscounted basis, were $19 million and $18 million, respectively. After considering these reserves, the outcome of these matters is not expected to have a material adverse effect on our financial position or results of operations. General litigation In August 2019, we were named in an amended complaint filed by Fayette County, Georgia in the MDL In re: National Prescription Opiate Litigation pending in the U.S. District Court, Northern District of Ohio. The complaint alleges that multiple manufacturers and distributors of opiate products improperly marketed and diverted these products, which caused harm to Fayette County. The complaint is limited in its allegations as to Baxter and does not distinguish between injectable opiate products and orally administered opiates. We manufactured generic injectable opiate products in our facility in Cherry Hill, NJ, which we divested in 2011. In November 2019, we and certain of our officers were named in a class action complaint captioned Ethan E. Silverman et al. v. Baxter International Inc. et al. that was filed in the United States District Court for the Northern District of Illinois. The plaintiff, who allegedly purchased shares of our common stock during the specified class period, filed this putative class action on behalf of himself and shareholders who acquired Baxter common stock between February 21, 2019 and October 23, 2019. The plaintiff alleged that we and certain officers violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder by making allegedly false and misleading statements and failing to disclose material facts relating to certain intra-company transactions undertaken for the purpose of generating foreign exchange gains or avoiding foreign exchange losses, as well as our internal controls over financial reporting. On January 29, 2020, the Court appointed Varma Mutual Pension Insurance Company and Louisiana Municipal Police Employees Retirement System as lead plaintiffs in the case. Plaintiffs filed an amended complaint on June 25, 2020 containing substantially the same allegations. On August 24, 2020, we filed a motion to dismiss the amended complaint. On January 12, 2021, the Court granted our motion to dismiss the amended complaint but gave plaintiffs an opportunity to file a further-amended complaint. The parties reached an agreement to settle the case for $16 million, subject to the completion of confirmatory discovery and final approval by the Court. The Court granted final approval of the settlement on August 11, 2021 and the settlement became effective on September 13, 2021. As initially disclosed in our Form 8-K on October 24, 2019, we voluntarily advised the staff of the SEC of an internal investigation into certain intra-company transactions that impacted our previously reported non-operating foreign exchange gains and losses. We also received a stockholder request for inspection of our books and records in connection with the October 24, 2019 announcement. The Company cooperated with the staff of the SEC in its investigation into related matters, and on February 18, 2022, we reached a settlement with the SEC. Without admitting or denying the findings in the administrative order issued by the SEC, we agreed to pay a civil penalty of $18 million and to cease and desist from violations of specified provisions of the federal securities laws and related rules. In the order, the SEC acknowledged the Company’s cooperation. We paid the penalty in the first quarter of 2022. In March 2020, two lawsuits were filed against us in the Northern District of Illinois by plaintiffs alleging injuries as a result of exposure to ethylene oxide used in our manufacturing facility in Mountain Home, Arkansas to sterilize certain of our products. The plaintiffs sought damages, including compensatory and punitive damages in an unspecified amount, and unspecified injunctive and declaratory relief. The parties reached agreement to settle these lawsuits in the third quarter of 2021 for amounts that are not material to our financial results, which were paid in the fourth quarter of 2021. We have since resolved, without litigation, additional claims of injuries from exposure to ethylene oxide at Mountain Home for amounts within accruals previously established as of December 31, 2021. On October 20, 2022, a lawsuit was filed against us in the Western District of Arkansas alleging injury as a result of exposure to ethylene oxide at Mountain Home. On December 16, 2022, we filed a motion to dismiss and for a more definite statement. In response, Plaintiffs filed a First Amended Complaint on January 6, 2023. We answered the First Amended Complaint on January 27, 2023. In July 2021, Hill-Rom, Inc. received a subpoena (from the United States Office of Inspector General for the Department of Health and Human Services (the DHHS) requesting documents and information related to compliance with the False Claims Act and the Anti-Kickback Statute. Hillrom has been working with the DHHS and the Department of Justice (DOJ) to provide information responsive to the subpoena. Hillrom also voluntarily began a related internal review and Hillrom and now Baxter have been cooperating fully with the DHHS and the DOJ with respect to these matters. In October 2022, the DOJ issued a separate Civil Investigative Demand (CID) addressed to Hillrom, requesting documents and information related to compliance with the False Claims Act and the Anti-Kickback Statute. Baxter intends to cooperate with the DOJ in responding to the CID. The DHHS and DOJ often issue these types of requests when investigating alleged violations of the False Claims Act. On December 28, 2021, Linet Americas, Inc. (Linet) filed a complaint against Hill-Rom Holdings, Inc., Hill-Rom Company, Inc., and Hill-Rom Services, Inc. in the United States District Court for the Northern District of Illinois, captioned Linet Americas, Inc. v. Hill-Rom Holdings, Inc.; Hill-Rom Company, Inc.; Hill-Rom Services, Inc. Linet alleges that Hillrom violated Sections 1, 2 and 3 of The Sherman Antitrust Act of 1890 and the Illinois Antitrust Act by allegedly engaging in anti-competitive conduct in alleged markets for standard, ICU and birthing beds. Hillrom filed an answer to the complaint on January 28, 2022 and filed a motion challenging certain aspects of plaintiff's case on May 27, 2022.
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STOCKHOLDERS’ EQUITY |
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| Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| STOCKHOLDERS' EQUITY |
Stock-Based Compensation Our stock-based compensation generally includes stock options, restricted stock units (RSUs), performance share units (PSUs) and purchases under our employee stock purchase plan. Shares issued relating to our stock-based plans are generally issued out of treasury stock. As of December 31, 2022, approximately 44 million authorized shares are available for future awards under our stock-based compensation plans. Stock Compensation Expense Stock compensation expense was $154 million, $146 million and $130 million in 2022, 2021 and 2020, respectively. The related tax benefit recognized was $34 million in 2022, $36 million in 2021 and $53 million in 2020. Included in the benefit in 2022, 2021 and 2020 were realized excess tax benefits for stock-based compensation of $5 million, $13 million and $27 million, respectively. Stock compensation expense is recorded at the corporate level and is not allocated to the segments. Approximately 75% of stock compensation expense is classified in SG&A expenses, with the remainder classified in cost of sales and R&D expenses. Costs capitalized in the consolidated balance sheets at December 31, 2022 and 2021 were not material. Stock compensation expense is based on awards expected to vest, and therefore has been reduced by estimated forfeitures. Stock Options Stock options are granted to employees and non-employee directors with exercise prices equal to 100% of the market value on the date of grant. Stock options granted to employees generally vest in one-third increments over a three-year period. Stock options granted to non-employee directors generally vest immediately on the grant date and are issued with a six-month claw-back provision. Stock options typically have a contractual term of 10 years. The grant-date fair value, adjusted for estimated forfeitures, is recognized as expense on a straight-line basis over the substantive vesting period. The fair value of stock options is determined using the Black-Scholes model. The weighted-average assumptions used in estimating the fair value of stock options granted during each year, along with the weighted-average grant-date fair values, were as follows:
The following table summarizes stock option activity for the year ended December 31, 2022 and the outstanding stock options as of December 31, 2022.
The aggregate intrinsic value in the table above represents the difference between the exercise price and our closing stock price on the last trading day of the year. The total intrinsic value of options exercised in 2022, 2021 and 2020 was $38 million, $78 million and $131 million, respectively. As of December 31, 2022, $41 million of unrecognized compensation cost related to stock options is expected to be recognized as expense over a weighted-average period of approximately 1.6 years. RSUs RSUs are granted to employees and non-employee directors. RSUs granted to employees generally vest in one-third increments over a three-year period. RSUs granted to non-employee directors generally vest immediately on the grant date and are issued with a six-month claw-back provision. The grant-date fair value, adjusted for estimated forfeitures, is recognized as expense on a straight-line basis over the substantive vesting period. The fair value of RSUs is determined based on the number of shares granted and the closing price of our common stock on the date of grant. The following table summarizes nonvested RSU activity for the year ended December 31, 2022.
As of December 31, 2022, $97 million of unrecognized compensation cost related to RSUs is expected to be recognized as expense over a weighted-average period of approximately 1.9 years. The weighted-average grant-date fair value of RSUs granted in 2022, 2021 and 2020 was $81.53, $79.30 and $77.51, respectively. The fair value of RSUs vested in 2022, 2021 and 2020 was $76 million, $47 million and $52 million, respectively. PSUs Our annual equity awards stock compensation program for senior management includes the issuance of PSUs. The PSUs awarded were based on our compound annual sales growth rate (CAGR) performance, our adjusted return on invested capital (ROIC) performance and on our stock performance relative to our peer group. PSUs awarded between 2018 and 2019 were based on adjusted operating margin as well as stock performance relative to our peer group. The vesting condition for CAGR and ROIC PSUs is set at the beginning of the 3-year service period while the vesting condition for adjusted operating margin is set at the beginning of each year for each tranche of the award during the 3-year service period. Compensation cost for the CAGR, adjusted ROIC and adjusted operating margin PSUs is measured based on the fair value of the awards on the date that the specific vesting terms for each award are established and the fair value of the awards is determined based on the quoted price of our stock on the grant date of the award. The compensation cost for CAGR, adjusted ROIC and adjusted operating margin PSUs is adjusted at each reporting date to reflect the estimated vesting outcome. The fair value for PSUs based on our stock performance relative to our peer group is determined using a Monte Carlo model. The assumptions used in estimating the fair value of these PSUs granted during the period, along with the grant-date fair values, were as follows:
The following table summarizes nonvested PSU activity for the year ended December 31, 2022.
Unrecognized compensation cost related to all unvested PSUs of $24 million at December 31, 2022 is expected to be recognized as expense over a weighted-average period of 2.8 years. Employee Stock Purchase Plan Nearly all employees are eligible to participate in our employee stock purchase plan. The employee purchase price is 85% of the closing market price on the purchase date. The Baxter International Inc. Employee Stock Purchase Plan provides for 20 million shares of common stock available for issuance to eligible participants, of which approximately 10 million shares were available for future purchases as of December 31, 2022. During 2022, 2021, and 2020, we issued approximately 0.9 million, 0.7 million and 0.7 million shares, respectively, under the employee stock purchase plan. Stock Options Award Modification In the first quarter of 2020, we modified the terms of stock option awards granted to 123 employees. Specifically, we extended the term for certain stock options that were scheduled to expire in the first quarter of 2020 as applicable employees were not permitted to exercise these awards due to our announcement in February 2020 that our previously issued financial statements should no longer be relied upon. The stock options were extended in order to allow impacted employees to exercise their stock option awards for a brief period once we became current with our SEC reporting obligations, which occurred in March 2020. As a result of the modifications, we recognized an additional $8 million of stock compensation expense during the first quarter of 2020. Cash Dividends Total cash dividends declared per share for 2022, 2021, and 2020 were $1.15, $1.085 and $0.955, respectively. A quarterly dividend of $0.28 per share ($1.12 on an annualized basis) was declared in February 2022 and was paid in April 2022. A quarterly dividend of $0.29 per share ($1.16 on an annualized basis) was declared in May and July of 2022 and were paid in July and October of 2022, respectively. Our Board of Directors declared a quarterly dividend of $0.29 per share in November of 2022, which was paid in January of 2023. Stock Repurchase Programs As authorized by the Board of Directors, we repurchase our stock depending on our cash flows, net debt level 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 repurchased 0.5 million shares under this authority pursuant to a Rule 10b5-1 plan for $32 million in cash in 2022, 7.3 million shares under this authority pursuant to Rule 10b5-1 plans for $600 million in cash in 2021 and 6.3 million shares under this authority pursuant to a Rule 10b5-1 plan for $500 million in cash in 2020. We had $1.3 billion of purchase authority available as of December 31, 2022. Other In addition to common stock, our authorized capital structure includes 100 million shares of preferred stock, no par value. As of December 31, 2022 and 2021, no shares of preferred stock were outstanding.
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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) |
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| ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) |
Comprehensive income (loss) includes all changes in stockholders’ equity that do not arise from transactions with stockholders, and consists of net income (loss), CTA, certain gains and losses from pension and other postretirement employee benefit (OPEB) plans, gains and losses on cash flow hedges and unrealized gains and losses on available-for-sale debt securities. The following table is a net-of-tax summary of the changes in AOCI by component for the years ended December 31, 2022 and 2021.
(a) See table below for details about these reclassifications. The following table is a summary of the amounts reclassified from AOCI to net income (loss) during the years ended December 31, 2022 and 2021.
(a)Amounts in parentheses indicate reductions to net income. Refer to Note 3 for additional information regarding the reclassification of a cumulative translation loss to earnings, Note 12 for additional information regarding the amortization of pension and OPEB items and Note 15 for additional information regarding hedging activity.
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| Revenue from Contract with Customer [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| NET SALES |
Contract Balances The timing of revenue recognition, billings and cash collections results in the recognition of trade accounts receivable, unbilled receivables, contract assets, and customer advances and deposits (contract liabilities) on our consolidated balance sheets. Net trade accounts receivable was $2.4 billion as of December 31, 2022 and 2021. For contract manufacturing arrangements, revenue is primarily recognized throughout the production cycle, which typically lasts up to 90 days, resulting in the recognition of contract assets until the related services are completed and the customers are billed. Additionally, for certain arrangements containing a performance obligation to deliver software that can be used with medical devices, we recognize revenue upon delivery of the software, which results in the recognition of contract assets when customers are billed over time, generally over to five years. For bundled contracts involving equipment delivered up-front and consumable medical products to be delivered over time, total contract revenue is allocated between the equipment and consumable medical products. In certain of those arrangements, a contract asset is created for the difference between the amount of equipment revenue recognized upon delivery and the amount of consideration initially receivable from the customer. In those arrangements, the contract asset becomes a trade account receivable as consumable medical products are provided and billed, generally over to seven years. The following table summarizes our contract assets:
The following table summarizes the classification of contract assets and contract liabilities as reported in the consolidated balance sheet:
Contract liabilities represent deferred revenues that arise as a result of cash received from customers or where the timing of billing for services precedes satisfaction of our performance obligations. Such remaining performance obligations represent the portion of the contract price for which work has not been performed and are primarily related to our installation and service contracts. We expect to satisfy the majority of the remaining performance obligations and recognize revenue related to installation and service contracts within the next 12 months with most of the non-current performance obligations satisfied within 24 months. The following table summarizes contract liability activity for the year ended December 31, 2022. The contract liability balance represents the transaction price allocated to the remaining performance obligations.
In 2022 and 2021, $121 million and $20 million of revenue was recognized that was included in contract liabilities as of December 31, 2021 and 2020, respectively. In 2020, the amount of revenue recognized that was included in contract liabilities as of December 31, 2019 was not significant. Disaggregation of Net Sales In connection with our acquisition of Hillrom in December 2021, we have added three new product categories: Patient Support Systems, Front Line Care and Surgical Solutions. The following tables disaggregate our net sales from contracts with customers by product category between the U.S. and international:
1 Renal Care includes sales of our peritoneal dialysis (PD), hemodialysis (HD) and additional dialysis therapies and services. 2 Medication Delivery includes sales of our IV therapies, infusion pumps, administration sets and drug reconstitution devices. 3 Pharmaceuticals includes sales of our premixed and oncology drug platforms, inhaled anesthesia and critical care products and pharmacy compounding services. 4 Clinical Nutrition includes sales of our parenteral nutrition (PN) therapies and related products. 5 Advanced Surgery includes sales of our biological products and medical devices used in surgical procedures for hemostasis, tissue sealing and adhesion prevention. 6 Acute Therapies includes sales of our continuous renal replacement therapies (CRRT) and other organ support therapies focused in the intensive care unit (ICU). 7 BioPharma Solutions includes sales of contracted services we provide to various pharmaceutical and biopharmaceutical companies. 8 Patient Support Systems includes sales of our connected care solutions: devices, software, communications and integration technologies and smart beds. 9 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. 10 Surgical Solutions includes sales of our surgical video technologies, tables, lights, pendants, precision positioning devices and other accessories. 11 Other includes sales of miscellaneous product and service offerings.
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BUSINESS OPTIMIZATION CHARGES |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Restructuring and Related Activities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| BUSINESS OPTIMIZATION CHARGES |
In recent years, we have undertaken actions to transform our cost structure and enhance operational efficiency. These efforts include restructuring the organization, optimizing the manufacturing footprint, R&D operations and supply chain network, employing disciplined cost management and centralizing and streamlining certain support functions. From the commencement of our business optimization activities in the second half of 2015 through December 31, 2022, we have incurred cumulative pre-tax costs of approximately $1.4 billion related to these actions. These 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 cash costs of approximately $46 million through the completion of the initiatives that are currently underway. We continue to pursue cost savings initiatives, including those related to our integration of Hillrom, and, to the extent further cost savings opportunities are identified, we would incur additional restructuring charges and costs to implement business optimization programs in future periods. We recorded the following charges related to business optimization programs in 2022, 2021, and 2020:
For segment reporting, business optimization charges are unallocated expenses. Costs to implement business optimization programs for the years ended December 31, 2022, 2021 and 2020, respectively, consisted primarily of external consulting and transition costs, including employee compensation and related costs. The costs were primarily included within cost of sales, SG&A expense and R&D expense. During the years ended December 31, 2022, 2021 and 2020, we recorded the following restructuring charges:
For the year ended December 31, 2022, $85 million of the restructuring charges reflected in the table above were related to integration activities for the Hillrom acquisition, consisting of $55 million of employee termination costs, $22 million of contract terminations and other costs and $8 million of asset impairments. In conjunction with our business optimization initiatives, we sold property that resulted in a gain of $17 million in 2020. This benefit is reflected within other operating expense (income), net in our consolidated statement of income (loss) for the year ended December 31, 2020. The following table summarizes activity in the liability related to our restructuring initiatives.
Reserve adjustments primarily relate to employee termination cost reserves established in prior periods. Substantially all of our restructuring liabilities as of December 31, 2022 relate to employee termination costs, with the remaining liabilities attributable to contract termination costs. Substantially all of the cash payments for those liabilities are expected to be disbursed by the end of 2023.
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PENSION AND OTHER POSTRETIREMENT BENEFIT PROGRAMS |
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| Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| PENSION AND OTHER POSTRETIREMENT BENEFIT PROGRAMS |
Reconciliation of Pension and Other Postretirement Benefit Plan Obligations, Assets and Funded Status The benefit plan information in the table below pertains to all of our pension and OPEB plans, both in the United States and in other countries.
Actuarial gains and losses result from changes in actuarial assumptions (such as changes in the discount rate and revised mortality rates). Actuarial gains in 2022 and losses in 2021 related to plan benefit obligations were primarily the result of changes in discount rates. The pension obligation information in the table above represents the projected benefit obligation (PBO). The PBO incorporates assumptions relating to future compensation levels. The accumulated benefit obligation (ABO) is the same as the PBO except that it includes no assumptions relating to future compensation levels. The ABO for all of our pension plans was $3.0 billion and $4.3 billion at the 2022 and 2021 measurement dates, respectively. The information in the funded status table above represents the totals for all of our pension plans. The following table is information relating to the individual plans in the funded status table above that have an ABO in excess of plan assets.
The following table presents information relating to the individual plans in the funded status table above that have a PBO in excess of plan assets (many of which also have an ABO in excess of assets and are therefore also included in the table directly above).
Expected Net Pension and OPEB Plan Payments for the Next 10 Years
The expected net benefit payments above reflect the total net benefits expected to be paid from the plans’ assets (for funded plans) or from our assets (for unfunded plans). The federal subsidies relating to the Medicare Prescription Drug, Improvement and Modernization Act are not expected to be significant. Amounts Recognized in AOCI The pension and OPEB plans’ gains or losses, prior service costs or credits, and transition assets or obligations not yet recognized in net periodic benefit cost are recognized on a net-of-tax basis in AOCI and will be amortized from AOCI to net periodic benefit cost in the future. For active employees, we utilize the average future working lifetime as the amortization period for prior service. For inactive employees, we utilize the average remaining life expectancy as the amortization period for prior service. The following table is a summary of the pre-tax losses included in AOCI at December 31, 2022 and December 31, 2021.
Refer to Note 9 for the net-of-tax balances included in AOCI as of each of the year-end dates. The following table is a summary of the net-of-tax amounts recorded in OCI relating to pension and OPEB plans.
In 2022, 2021 and 2020, OCI activity for pension and OPEB plans was primarily related to actuarial gains and losses. Net Periodic Benefit Cost
Weighted-Average Assumptions Used in Determining Benefit Obligations at the Measurement Date
The assumptions above, which were used in calculating the December 31, 2022 measurement date benefit obligations, will be used in the calculation of net periodic benefit cost in 2023. Weighted-Average Assumptions Used in Determining Net Periodic Benefit Cost
We established the expected return on plan assets assumption primarily based on a review of historical compound average asset returns, both company-specific and relating to the broad market (based on our asset allocation), as well as an analysis of current market and economic information and future expectations. We plan to use a 6.43% assumption for our U.S. and Puerto Rico plans for 2023. Pension Plan Assets An investment committee of members of senior management is responsible for supervising, monitoring and evaluating the invested assets of our funded pension plans. The investment committee, which meets at least quarterly, abides by documented policies and procedures relating to investment goals, targeted asset allocations, risk management practices, allowable and prohibited investment holdings, diversification, use of derivatives, the relationship between plan assets and benefit obligations, and other relevant factors and considerations. The investment committee’s policies and procedures include the following: •Ability to pay all benefits when due; •Targeted long-term performance expectations relative to applicable market indices, such as Russell, MSCI EAFE, and other indices; •Targeted asset allocation percentage ranges (summarized below), and periodic reviews of these allocations; •Diversification of assets among third-party investment managers, and by geography, industry, stage of business cycle and other measures; •Specified investment holding and transaction prohibitions (for example, private placements or other restricted securities, securities that are not traded in a sufficiently active market, short sales, certain derivatives, commodities and margin transactions); •Specified portfolio percentage limits on holdings in a single corporate or other entity (generally 5% at time of purchase, except for holdings in U.S. government or agency securities); •Specified average credit quality for the fixed-income securities portfolio (at least A- by Standard & Poor’s or A3 by Moody’s); •Specified portfolio percentage limits on foreign holdings; and •Periodic monitoring of investment manager performance and adherence to the investment committee’s policies. Plan assets are invested using a total return investment approach whereby a mix of equity securities, debt securities and other investments are used to preserve asset values, diversify risk and exceed the planned benchmark investment return. Investment strategies and asset allocations are based on consideration of plan liabilities, the plans’ funded status and other factors, such as the plans’ demographics and liability durations. Investment performance is reviewed by the investment committee on a quarterly basis and asset allocations are reviewed at least annually. Plan assets are managed in a balanced portfolio comprised of two major components: return-seeking investments and liability hedging investments. The target allocations for plan assets are 50% in return-seeking investments and 50% in liability hedging investments and other holdings. The documented policy includes an allocation range based on each individual investment type within the major components that allows for a variance from the target allocations depending on the investment type. Return-seeking investments primarily include common stock of U.S. and international companies, common/collective trust funds, mutual funds, hedge funds, and partnership investments. Liability hedging investments and other holdings primarily include cash, money market funds with an original maturity of three months or less, U.S. and foreign government and governmental agency issues, corporate bonds, municipal securities, derivative contracts and asset-backed securities. While the investment committee provides oversight over plan assets for U.S. and international plans, the summary above is specific to the plans in the United States. The plan assets for international plans are managed and allocated by the entities in each country, with input and oversight provided by the investment committee. The plan assets for the U.S. and international plans are included in the table below. The following tables summarize our pension plan financial instruments that are measured at fair value on a recurring basis.
(a) Certain assets that are measured at fair value using the NAV per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy.
(a) Certain assets that are measured at fair value using the NAV per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The following table is a reconciliation of changes in fair value measurements that used significant unobservable inputs (Level 3).
The assets and liabilities of our pension plans are valued using the following valuation methods:
Expected Pension and OPEB Plan Funding Our funding policy for our pension plans is to contribute amounts sufficient to meet legal funding requirements, plus any additional amounts that we may determine to be appropriate considering the funded status of the plans, tax deductibility, the cash flows generated by us, and other factors. Volatility in the global financial markets could have an unfavorable impact on future funding requirements. We have no obligation to fund our principal plans in the United States and Puerto Rico in 2023. We continually reassess the amount and timing of any discretionary contributions. In 2023, we expect to make contributions of at least $43 million to our foreign pension plans. We expect to have net cash outflows relating to our OPEB plans of approximately $18 million in 2023. The following table details the funded status percentage of our pension plans as of December 31, 2022, including certain plans that are unfunded in accordance with the guidelines of our funding policy outlined above.
Pension Settlement Transactions In October 2020, we offered certain former U.S. employees with vested pension benefits a limited-time option to take a lump sum distribution in lieu of future monthly payments. This option expired in November 2020 and approximately 40% of the eligible participants accepted the offer. Payments from plan assets to participants who accepted the offer were made in December 2020 and totaled $252 million. As a result of these transactions, we recognized non-cash pretax pension settlement charges of $43 million in the fourth quarter of 2020. Pension Plan Amendments In May 2022, we announced that the pay and service amounts used to calculate pension benefits for active non-bargaining participants in our U.S. Hillrom pension plan will freeze as of December 31, 2022. Years of additional service earned and eligible compensation received after December 31, 2022 will not be included in the determination of the benefits payable to those participants. This change resulted in an $11 million decline in the projected benefit obligation (PBO) with an offsetting curtailment gain included within other (income) expense, net on the consolidated statements of income (loss) for the year ended December 31, 2022. As of December 31, 2022, we transferred the assets and liabilities of the Baxter International Inc. and Subsidiaries Pension Plan II to the Baxter International Inc. and Subsidiaries Pension Plan, resulting in one qualified U.S. defined benefit plan. U.S. Defined Contribution Plan Most U.S. employees are eligible to participate in a qualified defined contribution plan. We recognized expense of $96 million in 2022, $59 million in 2021 and $61 million in 2020 related to contributions to this plan.
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INCOME TAXES |
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| Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| INCOME TAXES |
Income (Loss) Before Income Tax Expense (Benefit) by Category
Income Tax Expense (Benefit)
Deferred Tax Assets and Liabilities
At December 31, 2022, we had U.S. state operating loss carryforwards totaling $744 million, U.S. federal operating loss carryforwards totaling $285 million and tax credit carryforwards totaling $410 million, which includes a U.S. foreign tax credit carryforward of $320 million. The U.S. federal and state operating loss and tax credit carryforwards expire between 2023 and 2042, with $286 million of the operating loss carryforwards having no expiration date. At December 31, 2022, with respect to our operations outside the U.S., we had foreign operating loss carryforwards totaling $1.2 billion and foreign tax credit carryforwards totaling $15 million. The foreign operating loss carryforwards expire between 2023 and 2039 with $648 million having no expiration date. All of the foreign tax credit carryforwards have no expiration date. Realization of the U.S. and foreign operating loss and tax credit carryforwards depends on generating sufficient future earnings. A valuation allowance of $704 million and $401 million was recognized as of December 31, 2022 and 2021, respectively, to reduce the deferred tax assets associated with net operating loss and tax credit carryforwards because we do not believe it is more likely than not that these assets will be fully realized prior to expiration. After evaluating relevant U.S. tax laws, any elections or other opportunities that may be available and the future expiration of certain U.S. tax provisions that will impact the utilization of our U.S. foreign tax credit carryforwards, management expects to be able to realize some, but not all, of the U.S. foreign tax credit deferred tax assets up to its overall domestic loss (ODL) balance plus other recurring and non-recurring foreign inclusions. Therefore, a valuation allowance of $119 million and $98 million was recognized with respect to the foreign tax credit carryforwards as of December 31, 2022 and 2021, respectively. We will continue to evaluate the need for additional valuation allowances and, as circumstances change, the valuation allowance may change. As a result of Swiss tax reform legislation enacted during 2019, we recognized an $863 million net asset tax basis step-up that is amortizable as a tax deduction ratably over tax years 2025 through 2029. A deferred tax asset of $151 million and $161 million for the tax basis step-up was recognized as of December 31, 2022 and 2021, respectively. We expect to realize some, but not all, of the Swiss deferred tax assets for that tax basis step-up based on expected future earnings generated by our Swiss subsidiary during the period in which the tax basis will be amortized. Therefore, a valuation allowance of $84 million and $59 million was recognized on the Swiss deferred tax assets for the tax basis step-up as of December 31, 2022 and 2021, respectively. For the year ended December 31, 2022, we recognized $25 million of deferred tax expense to increase our valuation allowance to reflect our current estimate of its recoverability. As part of the acquisition of Hillrom in 2021, we recorded deferred tax liabilities of $1.3 billion related to the step-up in our U.S. GAAP basis of tangible and intangible assets and liabilities to fair market value which is in excess of the assets’ historical tax bases. Income Tax Expense (Benefit) Reconciliation
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, non-deductible expenses, non-taxable income, increases or decreases in valuation allowances and liabilities for uncertain tax positions and excess tax benefits or shortfalls on stock compensation awards. In 2022, our effective rate was adversely impacted by non-deductible impairments of goodwill acquired in the Hillrom acquisition and valuation allowance increases, including the increase described above related to deferred tax assets from a tax basis step-up that arose from Swiss tax reform legislation in 2019. Those items were partially offset by a $47 million net tax benefit, after related valuation allowances, from notional interest deductions that are received by certain wholly-owned foreign subsidiaries that have financed their operations with equity capital. In 2021, our effective rate was impacted favorably by geographic earnings mix, including a $50 million net tax benefit, after related valuation allowances from notional interest deductions, a $58 million tax benefit related to a tax-deductible foreign statutory loss on an investment in a foreign subsidiary, a tax benefit related to a change in U.S. foreign tax credit regulations, which is reflected in the valuation allowances item in the table above, and excess tax benefits on stock compensation awards, partially offset by an unfavorable court decision in a foreign jurisdiction related to an uncertain tax position. In 2020, our effective tax rate was impacted favorably by geographic earnings mix, including a $49 million net tax benefit, after related valuation allowances, from notional interest deductions, and excess tax benefits on stock compensation awards. We plan to repatriate our foreign earnings with the exception of approximately $423 million of accumulated earnings that are indefinitely reinvested as of December 31, 2022 related to two of our foreign operations. Additional withholding and capital gain taxes of $50 million would be incurred if such earnings were remitted currently. Our tax provisions for 2022, 2021 and 2020 do not include any significant tax charges related to either the Base Erosion and Anti-Abuse Tax (BEAT) or Global Intangible Low Taxed Income (GILTI) provisions, except for the inability to fully utilize foreign tax credits against such GILTI. Our accounting policy is to recognize any GILTI charge as a period cost. Unrecognized Tax Benefits We classify interest and penalties associated with income taxes in income tax expense (benefit) within the consolidated statements of income (loss). Net interest and penalties recognized were not significant during 2022, 2021 and 2020. The liability recognized related to interest and penalties was $16 million and $19 million as of December 31, 2022 and 2021, respectively. The total amount of gross unrecognized tax benefits that, if recognized, would impact the effective tax rate are $33 million, $39 million and $48 million as of December 31, 2022, 2021 and 2020, respectively. We believe that it is reasonably possible that our gross unrecognized tax benefits will be reduced within the next 12 months by $8 million. The following table is a reconciliation of our unrecognized tax benefits for the years ended December 31, 2022, 2021 and 2020.
Of the gross unrecognized tax benefits, $35 million and $39 million were recognized as liabilities in the consolidated balance sheets as of December 31, 2022 and 2021, respectively. Tax Incentives We have received tax incentives in Puerto Rico, Switzerland, Dominican Republic, Costa Rica and Thailand. The financial impact of the reductions as compared to the statutory tax rates is indicated in the income tax expense (benefit) reconciliation table above. The tax reductions as compared to the local statutory rate favorably impacted earnings (loss) per diluted share by $0.31 in 2022, $0.38 in 2021 and $0.33 in 2020. The above grants provide that our manufacturing operations are and will be partially exempt from local taxes with varying expirations from 2024 to 2034. Examinations of Tax Returns As of December 31, 2022, we had ongoing audits in the United States, Germany, Belgium and other jurisdictions. During 2022, we closed U.S. tax years 2017-2018 with the IRS with no material adjustments to our financial statements. Tax years 2019 and 2020 remain under examination by the IRS and tax years 2012 and forward remain under examination by various foreign taxing authorities. While the final outcome of these matters is inherently uncertain, we believe we have made adequate tax provisions for all years subject to examination.
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EARNINGS (LOSS) PER SHARE |
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| EARNINGS (LOSS) PER SHARE |
The numerator for both basic and diluted earnings (loss) per share (EPS) is net income (loss) attributable to Baxter stockholders. The denominator for basic EPS is the weighted-average number of shares outstanding during the period. The dilutive effect of outstanding stock options, RSUs and PSUs is reflected in the denominator for diluted EPS using the treasury stock method. The following table is a reconciliation of basic shares to diluted shares.
Basic and diluted shares are the same for the year ended December 31, 2022 due to our net loss for the period. The effect of dilutive securities for the years ended December 31, 2021 and 2020, included unexercised stock options, unvested RSUs and contingently issuable shares related to granted PSUs. The computation of diluted EPS excluded 22 million, 7 million, and 4 million equity awards in 2022, 2021, and 2020, respectively, because their inclusion would have had an anti-dilutive effect on diluted EPS. Refer to Note 8 for additional information regarding items impacting basic shares.
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FINANCIAL INSTRUMENTS, DERIVATIVES AND HEDGING ACTIVITIES |
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| Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| FINANCIAL INSTRUMENTS, DERIVATIVES AND HEDGING ACTIVITIES |
Accounts Receivable Sales For accounts receivable originated in Japan, we have entered into agreements with financial institutions in which the entire interest in and ownership of the receivable is sold. We continue to service the receivables in this arrangement. Servicing assets or liabilities are not recognized because we receive adequate compensation to service the sold receivables. The Japanese arrangement includes limited recourse provisions, which are not material. The following is a summary of the activity relating to the arrangement.
The net gains or losses relating to the sales of accounts receivable were immaterial for each year. Concentrations of Credit Risk We invest excess cash in certificates of deposit or money market or other funds and diversify the concentration of cash among different financial institutions. With respect to financial instruments, where appropriate, we have diversified our selection of counterparties, and have arranged collateralization and master-netting agreements to minimize the risk of loss. Global economic conditions and liquidity issues in certain countries have resulted, and may continue to result, in delays in the collection of receivables and credit losses. Global economic conditions, governmental actions and customer-specific factors may require us to re-evaluate the collectability of our receivables and we could potentially incur additional credit losses. These conditions may also impact the stability of the Euro. Foreign Currency and Interest Rate Risk Management We operate on a global basis and are exposed to the risk that our earnings, cash flows and equity could be adversely impacted by fluctuations in foreign exchange and interest rates. Our hedging policy attempts to manage these risks to an acceptable level based on our judgment of the appropriate trade-off between risk, opportunity and costs. We are primarily exposed to foreign exchange risk with respect to recognized assets and liabilities, forecasted transactions and net assets denominated in the Euro, British Pound, Chinese Renminbi, Korean Won, Australian Dollar, Canadian Dollar, Japanese Yen, Colombian Peso, Brazilian Real, Mexican Peso, Turkish Lira, Indian Rupee and Swedish Krona. We manage our foreign currency exposures on a consolidated basis, which allows us to net exposures and take advantage of any natural offsets. In addition, we use derivative and nonderivative instruments to further reduce the net exposure to foreign exchange risk. Gains and losses on the hedging instruments offset losses and gains on the hedged transactions and reduce the earnings and equity volatility resulting from changes in foreign exchange rates. Financial market and currency volatility may limit our ability to cost-effectively hedge these exposures. We are also exposed to the risk that our earnings and cash flows could be adversely impacted by fluctuations in interest rates. Our policy is to manage interest costs using the mix of fixed- and floating-rate debt that we believe is appropriate at that time. To manage this mix in a cost-efficient manner, we periodically enter into interest rate swaps in which we agree to exchange, at specified intervals, the difference between fixed and floating interest amounts calculated by reference to an agreed-upon notional amount. We do not hold any instruments for trading purposes and none of our outstanding derivative instruments contain credit-risk-related contingent features. Cash Flow Hedges We may use options, including collars and purchased options, forwards and cross-currency swaps to hedge the foreign exchange risk to earnings relating to forecasted transactions and recognized assets and liabilities. We periodically use treasury rate locks to hedge the risk to earnings associated with movements in interest rates relating to anticipated issuances of debt. The notional amounts of foreign exchange contracts designated as cash flow hedges were $398 million and $377 million as of December 31, 2022 and 2021, respectively. The maximum term over which we have cash flow hedge contracts in place related to forecasted transactions at December 31, 2022 is 12 months for foreign exchange contracts. There were no outstanding interest rate contracts designated as cash flow hedges as of December 31, 2022 and 2021. Fair Value Hedges We periodically use interest rate swaps to convert a portion of our fixed-rate debt into variable-rate debt. These instruments hedge our earnings from changes in the fair value of debt due to fluctuations in the designated benchmark interest rate. There were no outstanding interest rate contracts designated as fair value hedges as of December 31, 2022 and 2021. Net Investment Hedges In May 2017, we issued €600 million of 1.3% senior notes due May 2025. In May 2019, we issued €750 million of 0.40% senior notes due May 2024 and €750 million of 1.3% senior notes due May 2029. We have designated these debt obligations as hedges of our net investment in our European operations and, as a result, mark to spot rate adjustments of the outstanding debt balances are recorded as a component of AOCI. As of December 31, 2022, we had an accumulated pre-tax unrealized translation gain in AOCI of $95 million related to the Euro-denominated senior notes. Dedesignations If it is determined that a derivative or nonderivative hedging instrument is no longer highly effective as a hedge, we discontinue hedge accounting prospectively. Gains or losses relating to terminations of effective cash flow hedges generally continue to be deferred and are recognized consistent with the loss or income recognition of the underlying hedged items. However, if it is probable that hedged forecasted transactions will not occur, any gains or losses would be immediately reclassified from AOCI to earnings. There were no cash flow hedge dedesignations in 2022, 2021 or 2020 resulting from changes in our assessment of the probability that the hedged forecasted transactions would occur. In 2020, we terminated interest rate contracts with a notional amount of $550 million for $173 million in cash payments. The losses relating to these terminations continue to be deferred and are being recognized consistent with the underlying hedged item, interest expense on the issuance of debt. If we terminate a fair value hedge, an amount equal to the cumulative fair value adjustment to the hedged item at the date of termination is amortized to earnings over the remaining term of the hedged item. There were no fair value hedges terminated in 2022, 2021 or 2020. If we remove a net investment hedge designation, any gain or loss recognized in AOCI is not reclassified to earnings until we sell, liquidate, or deconsolidate the foreign investments that were being hedged. There were no net investment hedges terminated in 2022, 2021 or 2020. Undesignated Derivative Instruments We use forward contracts to hedge earnings from the effects of foreign exchange relating to certain of our intra-company and third-party receivables and payables denominated in a foreign currency. These derivative instruments are generally not formally designated as hedges and the terms of these instruments generally do not exceed one month. The total notional amount of undesignated derivative instruments was $753 million and $851 million as of December 31, 2022 and 2021, respectively. Gains and Losses on Hedging Instruments and Undesignated Derivative Instruments The following tables summarize the gains and losses on our hedging instruments and the classification of those gains and losses within our consolidated financial statements for the years ended December 31, 2022, 2021 and 2020.
The following table summarizes net-of-tax activity in AOCI, a component of stockholders’ equity, related to our cash flow hedges.
As of December 31, 2022, less than $1 million of deferred, net after-tax gains on derivative instruments included in AOCI are expected to be recognized in earnings during the next 12 months, coinciding with when the hedged items are expected to impact earnings. Derivative Assets and Liabilities The following table summarizes the classification and fair values of derivative instruments reported in the consolidated balance sheet as of December 31, 2022.
The following table summarizes the classification and fair values of derivative instruments reported in the consolidated balance sheet as of December 31, 2021.
While some of our derivatives are subject to master netting arrangements, we present our assets and liabilities related to derivative instruments on a gross basis within the consolidated balance sheets. Additionally, we are not required to post collateral for any of our outstanding derivatives. The following table provides information on our derivative positions as if they were presented on a net basis, allowing for the right of offset by counterparty.
The following table presents the amounts recorded on the consolidated balance sheets related to fair value hedges:
(a) These fair value hedges were terminated in 2018 and earlier periods.
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FAIR VALUE MEASUREMENTS |
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| Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| FAIR VALUE MEASUREMENTS |
The fair value hierarchy consists of the following three levels: •Level 1 — Quoted prices in active markets that we have the ability to access for identical assets or liabilities; •Level 2 — Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuations in which all significant inputs are observable in the market; and •Level 3 — Valuations using significant inputs that are unobservable in the market and include the use of judgment by management about the assumptions market participants would use in pricing the asset or liability. The following tables summarize our assets and liabilities that are measured at fair value on a recurring basis.
As of December 31, 2022 and 2021, cash and cash equivalents of $1.7 billion and $3.0 billion, respectively, included money market and other short-term funds of approximately $341 million and $816 million, respectively, which are considered Level 2 in the fair value hierarchy. For assets that are measured using quoted prices in active markets, the fair value is the published market price per unit multiplied by the number of units held, without consideration of transaction costs. The majority of the derivatives entered into by us are valued using internal valuation techniques as no quoted market prices exist for such instruments. The principal techniques used to value these instruments are discounted cash flow and Black-Scholes models. The key inputs, which are considered observable and vary depending on the type of derivative, include contractual terms, interest rate yield curves, foreign exchange rates and volatility. Available-for-sale debt securities, which consist of convertible debt and convertible redeemable preferred shares issued by nonpublic entities, are measured using discounted cash flow and option pricing models. Those available-for-sale debt securities are classified as Level 3 fair value measurements when there are no observable transactions near the balance sheet date due to the lack of observable data over certain fair value inputs such as equity volatility. The fair values of available-for-sale debt securities increase when interest rates decrease, equity volatility increases, or the fair values of the equity shares underlying the conversion options increase. Contingent payments related to acquisitions, which consist of milestone payments and sales-based payments, are valued using discounted cash flow techniques. The fair value of milestone payments reflects management’s expectations of probability of payment, and increases as the probability of payment increases or the expected timing of payments is accelerated. The fair value of sales-based payments is based upon probability-weighted future revenue estimates, and increases as revenue estimates increase, probability weighting of higher revenue scenarios increases or the expected timing of payment is accelerated. The following table is a reconciliation of recurring fair value measurements that use significant unobservable inputs (Level 3), which consist of contingent payments related to acquisitions and available-for-sale debt securities.
During the year ended December 31, 2022, $10 million of available-for-sale debt securities were reclassified from Level 3, including $8 million that converted to marketable equity securities, which are classified as Level 1 in the fair value hierarchy, upon the initial public offering of the investee. Financial Instruments Not Measured at Fair Value In addition to the financial instruments that we are required to recognize at fair value in the consolidated balance sheets, we have certain financial instruments that are recognized at amortized cost or some basis other than fair value. For these financial instruments, the following table provides the values recognized in the consolidated balance sheets and the estimated fair values.
(a) These fair value amounts are classified as Level 2 within the fair value hierarchy as they are estimated based on observable inputs. The carrying value of short-term debt approximates its fair value due to the short-term maturities of the obligations. The estimated fair values of current and long-term debt were computed by multiplying price by the notional amount of the respective debt instruments. Price is calculated using the stated terms of the respective debt instrument and yield curves commensurate with our credit risk. The carrying values of other financial instruments, such as accounts receivable and accounts payable, approximate their fair values due to the short-term maturities of most of those assets and liabilities. The carrying values of equity investments without readily determinable fair values that we measure at cost, less impairment were $104 million and $114 million at December 31, 2022 and 2021, respectively. When applicable, we also adjust the measurement of such equity investments for observable prices in orderly transactions for an identical or similar investment of the same issuer. These investments are included in Other non-current assets on our consolidated balance sheets.
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SEGMENT INFORMATION |
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| Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SEGMENT INFORMATION |
APAC segments provide a broad portfolio of essential healthcare products, including acute and chronic dialysis therapies; sterile IV solutions; infusion systems and devices; parenteral nutrition therapies; inhaled anesthetics; generic injectable pharmaceuticals; and surgical hemostat and sealant products. The Hillrom segment provides digital and connected care solutions and collaboration tools, including smart bed systems, patient monitoring and diagnostic technologies, respiratory health devices, and advanced equipment for the surgical space. We use operating income on a segment basis to make resource allocation decisions and assess the ongoing performance of our business segments. Intersegment sales are eliminated in consolidation. Certain items are maintained at Corporate and are not allocated to a segment. They primarily include corporate headquarters costs, certain R&D costs, manufacturing variances and centrally managed supply chain costs, product category 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 $127 million related to 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 of 2022, we updated the measure of profitability for our Hillrom segment by excluding such unallocated costs, consistent with our legacy Baxter segments. Our chief operating decision maker does not receive any asset information by operating segment and, accordingly, we do not report asset information by operating segment. Financial information for our segments is as follows:
The following table is a reconciliation of segment operating income to income (loss) before income taxes per the consolidated statements of income (loss).
We are designing a new operating model intended to simplify and streamline our operations and we expect that our reportable segments will be changed to align with that new operating model when it is fully implemented. Geographic information
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Schedule II - Qualifying And Valuation Accounts |
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| SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule II - Qualifying And Valuation Accounts | SCHEDULE II – Qualifying and Valuation accounts for each of the three years in the period ended December 31, 2022
______________________________________ (1)Includes the adoption of a new accounting pronouncement as of January 1, 2020 and foreign currency translation adjustments. Reserves are deducted from assets to which they apply.
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
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| Accounting Policies [Abstract] | |
| Nature of Operations | Nature of Operations Baxter International Inc., through our subsidiaries (collectively, Baxter, we, our or us), provides a broad portfolio of essential healthcare products, including acute and chronic dialysis therapies; sterile intravenous (IV) solutions; infusion systems and devices; parenteral nutrition therapies; inhaled anesthetics; generic injectable pharmaceuticals; surgical hemostat and sealant products, advanced surgical equipment; smart bed systems; patient monitoring and diagnostic technologies; and respiratory health devices. These products are used by hospitals, kidney dialysis centers, nursing homes, rehabilitation centers, doctors’ offices and patients at home under physician supervision. Our global footprint and the critical nature of our products and services play a key role in expanding access to healthcare in emerging and developed countries. We operate in four segments: Americas, EMEA, APAC and Hillrom which are described in Note 17. In January 2023, we announced our intention to separate our Renal Care and Acute Therapies product categories into a new, publicly traded company. While completion of the proposed spinoff is subject to satisfaction of customary conditions, we are targeting completion of the planned separation in 12 to 18 months after the initial announcement. Risks and Uncertainties Supply Constraints and Global Economic Conditions We have experienced significant challenges to our global supply chain in recent periods, including production delays and interruptions, increased costs and shortages of raw materials and component parts (including resins and electromechanical devices) and higher transportation costs, resulting from the pandemic and other exogenous factors including significant weather events, elevated inflation levels, disruptions to certain ports of call around the world, the war in Ukraine and other geopolitical events. We expect to experience some of these and other challenges related to our supply chain in future periods. These challenges, including the unavailability of certain raw materials and component parts, have also had a negative impact on our sales for certain product categories due to our inability to fully satisfy demand and may continue to have a negative impact on our sales in the future. COVID-19 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. Over the course of the pandemic, our business has been impacted by shifting healthcare priorities and significant volatility in the demand for our products. For further information about our revenues by product category, refer to Note 10. Significant uncertainty remains regarding the duration and overall impact of the COVID-19 pandemic. Concerns remain regarding the pace of economic recovery due to virus resurgence across the globe from the Omicron variants, subvariants and other virus mutations. 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 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 continued volatility. We expect that the challenges caused by global economic conditions (including the COVID-19 pandemic), among other factors, may continue to have an adverse effect on our business.
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| Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. Generally Accepted Accounting Principles (U.S. GAAP) requires us to make estimates and assumptions that affect the reported amounts and related disclosures in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates.
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| Principles of Consolidation | Principles of ConsolidationThe consolidated financial statements include the accounts of Baxter and our majority-owned subsidiaries that we control, after elimination of intra-company balances and transactions. |
| Reclassifications | Reclassifications Certain prior year amounts have been reclassified to conform to the current year presentation.
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| Revenue Recognition | Revenue Recognition Revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods or providing services. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account in the contract. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. Some of our contracts have multiple performance obligations. For contracts with multiple performance obligations, we allocate the contract’s transaction price to each performance obligation using our best estimate of the standalone selling price of each distinct good or service in the contract. Our global payment terms are typically between 30-90 days. Most of our performance obligations are satisfied at a point in time. This includes sales of our broad portfolio of essential healthcare products across our business segments. Our three legacy Baxter geographic segments including acute and chronic dialysis therapies; sterile IV solutions; infusion systems and devices; parenteral nutrition therapies; inhaled anesthetics; generic injectable pharmaceuticals; and surgical hemostat and sealant products. Our legacy Hillrom segment includes smart bed systems; patient monitoring and diagnostic technologies, respiratory health devices; and advanced equipment for the surgical space. For most of these sales, our performance obligation is satisfied upon delivery to the customer. Shipping and handling activities are considered to be fulfillment activities and are not considered to be a separate performance obligation. To a lesser extent, we enter into arrangements for which revenue may be recognized over time. For example, our Americas segment includes contract manufacturing arrangements, our Hillrom segment includes digital and connected care solutions and collaboration tools that are implemented over time and all our segments include equipment leases and certain subscription software and licensing arrangements. We recognize revenue for these arrangements over time or at a point in time depending on our evaluation of when the customer obtains control of the promised goods or services. Revenue is recognized over time when we are creating or enhancing an asset that the customer controls as the asset is created or enhanced or our performance does not create an asset with an alternative use and we have an enforceable right to payment for performance completed. As of December 31, 2022, we had $10.7 billion of transaction price allocated to remaining performance obligations related to executed contracts with an original duration of more than one year, which are primarily included in the Americas segment. Some contracts in the United States included in this amount contain index-dependent price increases, which are not known at this time. We expect to recognize approximately 35% of this amount as revenue in 2023, 30% in 2024, 20% in 2025, 10% in 2026, and 5% in 2027. Significant Judgments Revenues from product sales are recorded at the net sales price (transaction price), which includes estimates of variable consideration primarily related to rebates, wholesaler chargebacks and government clawbacks. These reserves are based on estimates of the amounts earned or to be claimed on the related sales and are included in accrued expenses and other current liabilities and as reductions of accounts receivable, net on the consolidated balance sheets. Management's estimates take into consideration historical experience, current contractual and statutory requirements, specific known market events and trends, industry data and forecasted customer buying and payment patterns. Overall, these reserves reflect our best estimates of the amount of consideration to which we are entitled based on the terms of the contract using the expected value method. The amount of variable consideration included in the net sales price is limited to the amount for which it is probable that a significant reversal in revenue will not occur when the related uncertainty is resolved. Revenue recognized in the years ended December 31, 2022, 2021 and 2020 related to performance obligations satisfied in prior periods was not material. Additionally, our contracts with customers often include promises to transfer multiple products and services to a customer. Determining whether products and services are considered distinct performance obligations that should be accounted for separately and determining the allocation of the transaction price may require significant judgment.
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| Practical Expedients | Practical Expedients We apply a practical expedient to expense as incurred costs to obtain a contract with a customer when the amortization period would have been one year or less. We do not disclose the value of the transaction price that is allocated to unsatisfied performance obligations for contracts with an original expected length of less than one year. We have elected to use the practical expedient to not adjust the promised amount of consideration for the effects of a significant financing component if it is expected, at contract inception, that the period between when we transfer a promised good or service to a customer and when the customer pays for that good or service will be one year or less. Additionally, all taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction and collected from a customer are excluded from revenue.
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| Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful AccountsIn the normal course of business, we provide credit to our customers, perform credit evaluations of these customers and maintain reserves for potential credit losses. In determining the amount of the allowance for doubtful accounts, we consider, among other items, historical credit losses, the past-due status of receivables, payment histories, other customer-specific information, current economic conditions and reasonable and supportable future forecasts. Receivables are written off when we determine that they are uncollectible. |
| Shipping and Handling Costs | Shipping and Handling Costs Shipping costs incurred to physically move product from our premises to the customer’s premises are classified as selling, general and administrative (SG&A) expenses. Handling costs, which are costs incurred to store, move and prepare products for shipment, are classified as cost of sales. Approximately $493 million in 2022, $381 million in 2021 and $325 million in 2020 of shipping costs were classified in SG&A expenses.
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| Cash, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents and Restricted Cash Cash and cash equivalents include cash, certificates of deposit and money market and other short-term funds with original maturities of three months or less. Restricted cash represents cash balances restricted as to withdrawal or use and are included in prepaid expenses and other current assets on the consolidated balance sheets.
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| Inventories | Inventories Inventories are stated at the lower of cost or net realizable value determined by the first-in, first-out method. We review inventories on hand at least quarterly and record provisions for estimated excess, slow-moving and obsolete inventory, as well as inventory with a carrying value in excess of net realizable value.
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| Property, Plant and Equipment, Net | Property, Plant and Equipment, NetProperty, plant and equipment are stated at cost. Depreciation expense is calculated using the straight-line method over the estimated useful lives of the related assets, which range from 20 to 50 years for buildings and improvements and from 3 to 15 years for machinery and equipment. Leasehold improvements are amortized over the life of the related facility lease (including any renewal periods, if appropriate) or the asset, whichever is shorter. We capitalize certain computer software and software development costs incurred in connection with developing or obtaining software for internal use. Capitalized software costs are included within machinery and equipment and are amortized on a straight-line basis over the estimated useful lives of the software, which generally range from to five years. |
| Research and Development | Research and Development Research and development (R&D) costs, including R&D acquired in transactions that are not business combinations, are expensed as incurred. Pre-regulatory approval contingent milestone obligations to counterparties in collaborative arrangements, which include acquired R&D, are expensed when the milestone is probable to be achieved. Contingent milestone payments made to such counterparties on or after regulatory approval are capitalized and amortized over the remaining useful life of the related product. Amounts capitalized for such payments are included in other intangible assets, net. Acquired in-process R&D (IPR&D) is the value assigned to technology or products under development acquired in a business combination which have not received regulatory approval and have no alternative future use. Acquired IPR&D is capitalized as an indefinite-lived intangible asset. Development costs incurred after the acquisition are expensed as incurred. Upon receipt of regulatory approval of the related technology or product, the indefinite-lived intangible asset is accounted for as a finite-lived intangible asset and amortized on a straight-line basis over the estimated economic life of the related technology or product, subject to annual impairment reviews as discussed below. If the R&D project is abandoned, the indefinite-lived asset is charged to expense.
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| Collaborative Arrangements | Collaborative Arrangements We enter into collaborative arrangements in the normal course of business. These collaborative arrangements take a number of forms and structures and are designed to enhance and expedite long-term sales and profitability growth. These arrangements may provide for us to obtain commercialization rights to a product under development, and require us to make upfront payments, contingent milestone payments, profit-sharing, and/or royalty payments. We may be responsible for ongoing costs associated with the arrangements, including R&D cost reimbursements to the counterparty. See the R&D section of this note regarding the accounting treatment of upfront and contingent milestone payments. Any royalty and profit-sharing payments during the commercialization phase are expensed as cost of sales when they become due and payable.
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| Restructuring Charges | Restructuring Charges We record liabilities for costs associated with exit or disposal activities in the period in which the liability is incurred. Employee termination costs are primarily recorded when actions are probable and estimable. Costs for one-time termination benefits in which the employee is required to render service until termination in order to receive the benefits are recognized ratably over the future service period. Refer to the discussion below regarding the accounting for asset impairment charges.
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| Goodwill, Intangible Assets, and Other Long-Lived Assets | Goodwill, Intangible Assets and Other Long-Lived Assets Goodwill is initially measured as the excess of the purchase price over the fair value (or other measurement attribute required by U.S. GAAP) of acquired assets and liabilities in a business combination. Goodwill is not amortized but is subject to an impairment review annually and whenever indicators of impairment exist. We have the option to assess goodwill for impairment by initially performing a qualitative assessment to determine whether it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount. If we determine that it is not more-likely-than-not that the fair value of a reporting unit is less than its carrying amount, then the quantitative goodwill impairment test is not required to be performed. If we determine that it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount, or if we do not elect the option to perform an initial qualitative assessment, we perform a quantitative goodwill impairment test. In the quantitative impairment test, we calculate the estimated fair value of the reporting unit. If the carrying amount of the reporting unit exceeds the estimated fair value, an impairment charge is recorded for the amount that its carrying amount, including goodwill, exceeds its fair value, limited to the total amount of goodwill allocated to that reporting unit. In a quantitative goodwill impairment test, the fair values of our reporting units are generally determined based on a discounted cash flow model (an income approach) and earnings multiples (a market approach). Significant inputs to reporting unit fair value measurements generally include forecasted cash flows, discount rates, terminal growth rates and earnings multiples. Each of those inputs can significantly affect the fair values of our reporting units. In 2021, we changed the measurement date of our annual goodwill impairment test from December 31 to November 1. This change better aligns the timing of the goodwill impairment test with our long-term business planning process. The change was not material to our consolidated financial statements as it did not result in the delay, acceleration or avoidance of an impairment charge. Indefinite-lived intangible assets, such as IPR&D acquired in business combinations and certain trade names with indefinite lives, are subject to an impairment review annually and whenever indicators of impairment exist. We have the option to assess indefinite-lived intangible assets for impairment by first performing qualitative assessments to determine whether it is more-likely-than-not that the fair values of the indefinite-lived intangible assets are less than the carrying amounts. If we determine that it is more-likely-than-not that an indefinite-lived intangible asset is impaired, or if we elect not to perform an initial qualitative assessment, we then perform the quantitative impairment test by comparing the fair value of the indefinite-lived intangible asset with its carrying amount. If the carrying amount exceeds the fair value of the indefinite-lived intangible asset, we write the carrying amount down to the fair value. In 2021, we changed the measurement date of our annual indefinite-lived intangible asset impairment tests from December 31 to November 1. This change better aligns the timing of the impairment tests with our long-term business planning process. The change was not material to our consolidated financial statements as it did not result in the delay, acceleration or avoidance of an impairment charge. During the third quarter of 2022, we performed trigger-based impairment tests of the goodwill of each of our Hillrom reporting units as well as the indefinite-lived intangible assets, consisting primarily of trade names, that we acquired in connection with the Hillrom acquisition. We recognized $2.8 billion of goodwill impairment charges and $332 million of pre-tax impairment charges related to those indefinite-lived intangible assets. In connection with our annual goodwill impairment assessment in the fourth quarter of 2022, we performed quantitative impairment tests for all of our reporting units and recorded an additional $27 million goodwill impairment related to one of our Hillrom reporting units. See Note 4, Goodwill and Other Intangible Assets, Net for further information about those impairments. We review the carrying amounts of long-lived assets used in operations, other than goodwill and intangible assets not subject to amortization, for potential impairment when events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. In evaluating recoverability, we group assets and liabilities at the lowest level such that the identifiable cash flows relating to the group are largely independent of the cash flows of other assets and liabilities. We then compare the carrying amounts of the assets or asset groups with the related estimated undiscounted future cash flows. In the event an asset (or asset group) is not recoverable, an impairment charge is recorded as the amount by which the carrying amount of the asset (or asset group) exceeds its fair value. Long-lived assets are classified as held for sale when certain criteria are met, including when management has committed to sell the asset, the asset is available for sale in its present condition and the sale is probable of being completed within one year of the balance sheet date. Assets held for sale are no longer depreciated or amortized and they are reported at the lower of their carrying amount or fair value less cost to sell.
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| Investments in Equity Securities | Investments in Equity Securities Our investments in marketable equity securities are classified as other non-current assets and are measured at fair value with gains and losses recognized in other (income) expense, net. We have elected to apply the measurement alternative to equity securities without readily determinable fair values. As such, our non-marketable equity securities are measured at cost, less any impairment, and are adjusted for changes in fair value resulting from observable transactions for identical or similar investments of the same issuer. Gains and losses on non-marketable equity securities are also recognized in other (income) expense, net. Noncontrolling investments in common stock or in-substance common stock are accounted for under the equity method if we have the ability to exercise significant influence over the operating and financial policies of the investee.
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| Income Taxes | Income Taxes Deferred taxes are recognized for the future tax effects of temporary differences between financial and income tax reporting based on enacted tax laws and rates. We maintain valuation allowances unless it is more-likely-than-not that the deferred tax asset will be realized. With respect to uncertain tax positions, we determine whether the position is more-likely-than-not to be sustained upon examination based on the technical merits of the position. Any tax position that meets the more-likely-than-not recognition threshold is measured and recognized in the consolidated financial statements at the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. The liability relating to uncertain tax positions is classified as current in the consolidated balance sheets to the extent that we anticipate making a payment within one year. Interest and penalties associated with income taxes are classified in the income tax expense (benefit) line in the consolidated statements of income (loss).
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| Foreign Currency Translation | Foreign Currency Translation Cumulative translation adjustments (CTA) related to foreign operations are included in other comprehensive (loss) income (OCI). For foreign operations in highly inflationary economies, translation gains and losses are included in other (income) expense, net, and were not material in 2022, 2021 and 2020.
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| Derivatives and Hedging Activities | Derivatives and Hedging Activities All derivative instruments are generally recognized as either assets or liabilities at fair value in the consolidated balance sheets and are classified as short-term or long-term based on the scheduled maturity of the instrument. We designate certain of our derivatives and foreign-currency denominated debt as hedging instruments in cash flow, fair value or net investment hedges. For each derivative instrument that is designated and effective as a cash flow hedge, the gain or loss on the derivative is recorded in accumulated other comprehensive income (loss) (AOCI) and then recognized in earnings consistent with the underlying hedged item. Option premiums or net premiums paid are initially recorded as assets and reclassified to OCI over the life of the option, and then recognized in earnings consistent with the underlying hedged item. Cash flow hedges are classified in cost of sales and interest expense, net, and are primarily related to forecasted intra-company sales denominated in foreign currencies and forecasted interest payments on anticipated issuances of debt, respectively. For each derivative instrument that is designated and effective as a fair value hedge, the gain or loss on the derivative is recognized immediately to earnings, and offsets changes in fair value attributable to a particular risk, such as changes in interest rates, of the hedged item, which are also recognized in earnings. Changes in the fair value of hedge instruments designated as fair value hedges are classified in interest expense, net, as they hedge the interest rate risk associated with certain of our fixed-rate debt. We have designated our Euro-denominated senior notes as hedges of our net investment in our European operations and, as a result, mark to spot rate adjustments on the outstanding debt balances are recorded as a component of AOCI. For derivative instruments that are not designated as hedges, the change in fair value is recorded directly to other (income) expense, net. If it is determined that a derivative or nonderivative hedging instrument is no longer highly effective as a hedge, we discontinue hedge accounting prospectively. Gains or losses relating to terminations of effective cash flow hedges generally continue to be deferred and are recognized consistent with the loss or income recognition of the underlying hedged items. However, if it is probable that the hedged forecasted transactions will not occur, any gains or losses would be immediately reclassified from AOCI to earnings. If we terminate a fair value hedge, an amount equal to the cumulative fair value adjustment to the hedged item at the date of termination is amortized to earnings over the remaining term of the hedged item. If we remove a net investment hedge designation, any gains or losses recognized in AOCI are not reclassified to earnings until we sell, liquidate, or deconsolidate the foreign investments that were being hedged. Cash flows related to the settlement of derivative instruments designated as net investment hedges of foreign operations are classified in the consolidated statements of cash flows within investing activities. Cash flows for all other derivatives, including those that are not designated as a hedge, are classified in the same line item as the cash flows of the related hedged item, which is generally within operating activities.
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| New Accounting Standards | New Accounting Standards Recently issued accounting standards not yet adopted In June 2022, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sales Restrictions, which (1) clarifies the guidance in Topic 820 on the fair value measurement of an equity security that is subject to contractual restrictions that prohibit the sale of an equity security and (2) requires specific disclosures related to such an equity security. The standard is effective for our financial statements beginning in 2024. The impact of the adoption of this ASU is not expected to have a material effect on our consolidated financial statements. Recently adopted accounting pronouncements As of January 1, 2022, we adopted ASU 2021-05, Leases (Topic 842), which requires a lessor to classify a lease with variable lease payments (that do not depend on an index or rate) as an operating lease if (1) the lease would have been classified as a sales-type or direct financing lease, and (2) the lessor would have recognized a selling loss at lease commencement. These changes are intended to avoid recognizing a day-one loss for a lease with variable payments even though the lessor expects the arrangement will be profitable overall. The adoption of this ASU did not have a material impact on our consolidated financial statements. In the fourth quarter of 2021, we adopted ASU 2021-08, Business Combinations - Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. This ASU requires an entity to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606 (Revenue from Contracts with Customers). This ASU is expected to reduce diversity in practice and increase comparability for both the recognition and measurement of acquired revenue contracts with customers at the date of and after a business combination. In accordance with this ASU we recognized contract liabilities of $142 million as part of the Hillrom acquisition in December 2021. We did not acquire contract assets or liabilities in connection with other acquisitions completed in 2021. As of January 1, 2020, we adopted ASU No. 2016-13, Financial Instruments - Credit Losses, which requires the measurement of expected lifetime credit losses, rather than incurred losses, for financial instruments held at the reporting date based on historical experience, current conditions and reasonable forecasts. The main objective of this ASU is to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. We adopted this ASU using the modified retrospective approach. The impact of the adoption of this ASU was an increase to our allowance for doubtful accounts and a decrease to retained earnings of $4 million.
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ACQUISITIONS AND OTHER ARRANGEMENTS (Tables) |
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Business Combination and Asset Acquisition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Business Acquisitions, by Acquisition | The following table summarizes the fair value of the total consideration paid:
(a) Represents cash consideration transferred of $156.00 per outstanding Hillrom common share to existing shareholders and holders of equity awards that vested at closing pursuant to their original terms. (b) Represents the pre-acquisition service portion of the fair value of 668 thousand replacement restricted stock units issued to Hillrom equity award holders at closing.
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| Summary of Fair Value of Assets Acquired and Liabilities Assumed | The following table summarizes the fair values of the assets acquired and liabilities assumed as of the acquisition date:
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| Business Acquisition, Pro Forma Information | The following table presents the unaudited pro forma combined results of Baxter and Hillrom for the years ended December 31, 2021 and 2020 as if the acquisition of Hillrom had occurred on January 1, 2020:
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| Asset Acquisition | The following table summarizes the fair value of the consideration transferred:
The following table summarizes the fair value of the assets acquired as of the acquisition date:
The following table summarizes the fair value of the consideration transferred:
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SUPPLEMENTAL FINANCIAL INFORMATION (Tables) |
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Inventories | Inventories
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| Prepaid Expenses and Other Current Assets | Prepaid Expenses and Other Current Assets
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| Property, Plant and Equipment, Net | Property, Plant and Equipment, Net
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| Other Non-Current Assets | Other Non-Current Assets
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| Accrued Expenses and Other Current Liabilities | Accrued Expenses and Other Current Liabilities
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| Other Non-Current Liabilities | Other Non-Current Liabilities
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| Interest Expense, net | Interest Expense, net
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| Other Expense, net | Other (Income) Expense, net
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| Other Supplemental Information | Other Supplemental Information
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| Allowance for Doubtful Accounts | Allowance for Doubtful Accounts The following table is a summary of changes in our allowance for doubtful accounts for the years ended December 31, 2022 and 2021.
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GOODWILL AND OTHER INTANGIBLE ASSETS, NET (Tables) |
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| Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Goodwill | The following is a reconciliation of goodwill by business segment.
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| Other Intangible Assets, Net | The following is a summary of our other intangible assets.
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DEBT AND CREDIT FACILITIES (Tables) |
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| Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt Outstanding | At December 31, 2022 and 2021, we had the following debt outstanding:
1Book values include any discounts, premiums and adjustments related to hedging instruments and effective interest rates reflect amortization of those items.
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| Future Debt Maturities | Future Debt Maturities
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LEASES (Tables) |
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| Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Components of Lease Cost | The components of lease cost for the years ended December 31, 2022, 2021 and 2020 were:
The following table contains supplemental cash flow information related to leases for the years ended December 31, 2022, 2021 and 2020: Lease term and discount rates as of December 31, 2022 and 2021 were:
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| Supplemental Balance Sheet Information Related To Leases | Supplemental balance sheet information related to leases as of December 31, 2022 and 2021 include:
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| Maturities of Operating Lease Liabilities | Maturities of operating and finance lease liabilities as of December 31, 2022 were:
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| Maturities of Finance Lease Liabilities | Maturities of operating and finance lease liabilities as of December 31, 2022 were:
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| Components of Lease Revenue | The components of lease revenue for the years ended December 31, 2022, 2021 and 2020 were:
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| Components of Net Investment In Sales-Type Leases | The components of our net investment in sales-type leases as of December 31, 2022 and 2021 were:
Our net investment in sales-type leases is classified as follows in the accompanying consolidated balance sheets:
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| Maturities of Sales-Type Leases | Maturities of sales-type and operating leases as of December 31, 2022 were:
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| Maturities of Operating Leases | Maturities of sales-type and operating leases as of December 31, 2022 were:
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STOCKHOLDERS’ EQUITY (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock Options Fair Value Assumptions | The weighted-average assumptions used in estimating the fair value of stock options granted during each year, along with the weighted-average grant-date fair values, were as follows:
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| Summary of Stock Option Activity | The following table summarizes stock option activity for the year ended December 31, 2022 and the outstanding stock options as of December 31, 2022.
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| Summary of Nonvested RSU Activity | The following table summarizes nonvested RSU activity for the year ended December 31, 2022.
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| Performance Stock Units Fair Value | The assumptions used in estimating the fair value of these PSUs granted during the period, along with the grant-date fair values, were as follows:
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| Summary of Nonvested Performance Stock Unit Activity | The following table summarizes nonvested PSU activity for the year ended December 31, 2022.
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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Summary of Changes in AOCI by Component | The following table is a net-of-tax summary of the changes in AOCI by component for the years ended December 31, 2022 and 2021.
(a) See table below for details about these reclassifications.
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| Summary of Reclassification from AOCI to Net Income | The following table is a summary of the amounts reclassified from AOCI to net income (loss) during the years ended December 31, 2022 and 2021.
(a)Amounts in parentheses indicate reductions to net income.
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NET SALES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Summary of Contract Assets and Liabilities | The following table summarizes our contract assets:
The following table summarizes the classification of contract assets and contract liabilities as reported in the consolidated balance sheet:
The following table summarizes contract liability activity for the year ended December 31, 2022. The contract liability balance represents the transaction price allocated to the remaining performance obligations.
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| Disaggregation of Revenue | The following tables disaggregate our net sales from contracts with customers by product category between the U.S. and international:
1 Renal Care includes sales of our peritoneal dialysis (PD), hemodialysis (HD) and additional dialysis therapies and services. 2 Medication Delivery includes sales of our IV therapies, infusion pumps, administration sets and drug reconstitution devices. 3 Pharmaceuticals includes sales of our premixed and oncology drug platforms, inhaled anesthesia and critical care products and pharmacy compounding services. 4 Clinical Nutrition includes sales of our parenteral nutrition (PN) therapies and related products. 5 Advanced Surgery includes sales of our biological products and medical devices used in surgical procedures for hemostasis, tissue sealing and adhesion prevention. 6 Acute Therapies includes sales of our continuous renal replacement therapies (CRRT) and other organ support therapies focused in the intensive care unit (ICU). 7 BioPharma Solutions includes sales of contracted services we provide to various pharmaceutical and biopharmaceutical companies. 8 Patient Support Systems includes sales of our connected care solutions: devices, software, communications and integration technologies and smart beds. 9 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. 10 Surgical Solutions includes sales of our surgical video technologies, tables, lights, pendants, precision positioning devices and other accessories. 11 Other includes sales of miscellaneous product and service offerings.
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BUSINESS OPTIMIZATION CHARGES (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Restructuring and Related Activities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Business Optimization Charges | We recorded the following charges related to business optimization programs in 2022, 2021, and 2020:
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| Components of Restructuring Costs | During the years ended December 31, 2022, 2021 and 2020, we recorded the following restructuring charges:
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| Summary of Activity in Reserves related to Business Optimization Initiatives | The following table summarizes activity in the liability related to our restructuring initiatives.
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PENSION AND OTHER POSTRETIREMENT BENEFIT PROGRAMS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Reconciliation of Pension and OPEB Plan Obligations, Assets and Funded Status | The benefit plan information in the table below pertains to all of our pension and OPEB plans, both in the United States and in other countries.
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| Information Relating to Individual Plans in Funded Status that have ABO in Excess of Plan Assets | The following table is information relating to the individual plans in the funded status table above that have an ABO in excess of plan assets.
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| Information Relating to Individual Plans in Funded Status that have PBO in Excess of Plan Assets | The following table presents information relating to the individual plans in the funded status table above that have a PBO in excess of plan assets (many of which also have an ABO in excess of assets and are therefore also included in the table directly above).
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| Expected Net Pension and OPEB Plan Payments for Next 10 Years |
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| Summary of Pre-Tax losses Included in AOCI | The following table is a summary of the pre-tax losses included in AOCI at December 31, 2022 and December 31, 2021.
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| Summary of Net-of-Tax Amounts Recorded in OCI Relating to Pension and OPEB Plans | The following table is a summary of the net-of-tax amounts recorded in OCI relating to pension and OPEB plans.
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| Net Periodic Benefit Cost - Continuing Operations |
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| Weighted-Average Assumptions Used in Determining Benefit Obligations at Measurement Date |
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| Fair Value of Pension Plan Assets and Liabilities | The following tables summarize our pension plan financial instruments that are measured at fair value on a recurring basis.
(a) Certain assets that are measured at fair value using the NAV per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy.
(a) Certain assets that are measured at fair value using the NAV per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy.
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| Changes in Fair Value Measurements that Used Significant Unobservable Inputs | The following table is a reconciliation of changes in fair value measurements that used significant unobservable inputs (Level 3).
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| Funded Status Percentage of Pension Plans | The following table details the funded status percentage of our pension plans as of December 31, 2022, including certain plans that are unfunded in accordance with the guidelines of our funding policy outlined above.
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INCOME TAXES (Tables) |
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Income (Loss) Before Income Tax Expense (Benefit) by Category | Income (Loss) Before Income Tax Expense (Benefit) by Category
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| Income Tax Expense (Benefit) | Income Tax Expense (Benefit)
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| Deferred Tax Assets and Liabilities | Deferred Tax Assets and Liabilities
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| Income Tax Expense (Benefit) Reconciliation | Income Tax Expense (Benefit) Reconciliation
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| Reconciliation of Unrecognized Tax Benefits | The following table is a reconciliation of our unrecognized tax benefits for the years ended December 31, 2022, 2021 and 2020.
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EARNINGS (LOSS) PER SHARE (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Reconciliation of Basic Shares to Diluted Shares | The following table is a reconciliation of basic shares to diluted shares.
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FINANCIAL INSTRUMENTS, DERIVATIVES AND HEDGING ACTIVITIES (Tables) |
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Summary of Activity Relating to Securitization Arrangement | The following is a summary of the activity relating to the arrangement.
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| Summary of Gains and Losses on Derivative Instruments | The following tables summarize the gains and losses on our hedging instruments and the classification of those gains and losses within our consolidated financial statements for the years ended December 31, 2022, 2021 and 2020.
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| Net of Tax Activity in Accumulated Other Comprehensive Income Related to Cash Flow Hedges | The following table summarizes net-of-tax activity in AOCI, a component of stockholders’ equity, related to our cash flow hedges.
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| Classification and Fair Value Amounts of Derivative Instruments | The following table summarizes the classification and fair values of derivative instruments reported in the consolidated balance sheet as of December 31, 2022.
The following table summarizes the classification and fair values of derivative instruments reported in the consolidated balance sheet as of December 31, 2021.
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| Derivative Positions Presented on Net Basis | The following table provides information on our derivative positions as if they were presented on a net basis, allowing for the right of offset by counterparty.
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| Schedule of Fair Value Hedging Instruments, Statements of Financial Performance and Financial Position, Location | The following table presents the amounts recorded on the consolidated balance sheets related to fair value hedges:
(a) These fair value hedges were terminated in 2018 and earlier periods.
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FAIR VALUE MEASUREMENTS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Summary of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis | The following tables summarize our assets and liabilities that are measured at fair value on a recurring basis.
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| Reconciliation of Fair Value Measurements that Use Significant Unobservable Inputs | The following table is a reconciliation of recurring fair value measurements that use significant unobservable inputs (Level 3), which consist of contingent payments related to acquisitions and available-for-sale debt securities.
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| Book Values and Fair Values of Financial Instruments | For these financial instruments, the following table provides the values recognized in the consolidated balance sheets and the estimated fair values.
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SEGMENT INFORMATION (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Segment Information | Financial information for our segments is as follows:
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| Reconciliation of Segment Operating Income To Income Before Income Taxes | The following table is a reconciliation of segment operating income to income (loss) before income taxes per the consolidated statements of income (loss).
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| Geographic Information | Geographic information
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Nature of Operations - Additional Information (Details) - segment |
1 Months Ended | 12 Months Ended |
|---|---|---|
Jan. 31, 2023 |
Dec. 31, 2022 |
|
| Summary Of Significant Accounting Policies [Line Items] | ||
| Number of segments | 4 | |
| Subsequent Event | Minimum | ||
| Summary Of Significant Accounting Policies [Line Items] | ||
| Planned separation (in months) | 12 months | |
| Subsequent Event | Maximum | ||
| Summary Of Significant Accounting Policies [Line Items] | ||
| Planned separation (in months) | 18 months |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Shipping and Handling Costs - Additional Information (Details) - USD ($) $ in Millions |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
| Accounting Policies [Abstract] | |||
| Shipping costs included in marketing and administrative expenses | $ 493 | $ 381 | $ 325 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property, Plant and Equipment, Net - Additional Information (Details) |
12 Months Ended |
|---|---|
Dec. 31, 2022 | |
| Minimum | Building and Building Improvements | |
| Summary Of Significant Accounting Policies [Line Items] | |
| Estimated useful life | 20 years |
| Minimum | Machinery and equipment | |
| Summary Of Significant Accounting Policies [Line Items] | |
| Estimated useful life | 3 years |
| Minimum | Software and Software Development Costs | |
| Summary Of Significant Accounting Policies [Line Items] | |
| Estimated useful life | 3 years |
| Maximum | Building and Building Improvements | |
| Summary Of Significant Accounting Policies [Line Items] | |
| Estimated useful life | 50 years |
| Maximum | Machinery and equipment | |
| Summary Of Significant Accounting Policies [Line Items] | |
| Estimated useful life | 15 years |
| Maximum | Software and Software Development Costs | |
| Summary Of Significant Accounting Policies [Line Items] | |
| Estimated useful life | 5 years |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Goodwill, Intangible Assets, and Other Long-Lived Assets (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | |||
|---|---|---|---|---|---|
Dec. 31, 2022 |
Sep. 30, 2022 |
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
| Goodwill And Other Intangible Asset [Line Items] | |||||
| Goodwill impairments | $ 2,812 | $ 0 | $ 0 | ||
| Hillrom | |||||
| Goodwill And Other Intangible Asset [Line Items] | |||||
| Goodwill impairments | $ 2,800 | ||||
| Impairment of indefinite-lived intangible asset | $ 332 | ||||
| Hillrom | Surgical Solutions Reporting Unit | |||||
| Goodwill And Other Intangible Asset [Line Items] | |||||
| Goodwill impairments | $ 27 | ||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - New Accounting Standards - Additional Information (Details) - USD ($) $ in Millions |
Dec. 31, 2022 |
Dec. 31, 2021 |
Jan. 01, 2020 |
|---|---|---|---|
| Summary Of Significant Accounting Policies [Line Items] | |||
| Retained earnings, adjustment | $ 14,050 | $ 17,065 | |
| Hillrom | |||
| Summary Of Significant Accounting Policies [Line Items] | |||
| Total assets acquired | $ 142 | ||
| Accounting Standards Update 2016-13 | |||
| Summary Of Significant Accounting Policies [Line Items] | |||
| Retained earnings, adjustment | $ 4 |
ACQUISITIONS AND OTHER ARRANGEMENTS - Schedule of Total Consideration for Hillrom (Details) - Hillrom $ / shares in Units, $ in Millions |
Dec. 13, 2021
USD ($)
$ / shares
|
|---|---|
| Acquisitions And Collaborations [Line Items] | |
| Cash consideration paid to Hillrom shareholders | $ 10,474 |
| Fair value of equity awards issued to Hillrom equity award holders | 2 |
| Total Consideration | $ 10,476 |
| Cash consideration transferred (usd per share) | $ / shares | $ 156.00 |
ACQUISITIONS AND OTHER ARRANGEMENTS - Summary of Fair Value of Assets Acquired and Liabilities Assumed for Hillrom (Details) - USD ($) $ in Millions |
12 Months Ended | |||
|---|---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2022 |
Dec. 13, 2021 |
|
| Acquisitions And Collaborations [Line Items] | ||||
| Goodwill | $ 9,836 | $ 3,217 | $ 6,843 | $ 6,800 |
| Other intangible assets | 6,000 | |||
| Net sales | 15,574 | 14,610 | ||
| Net income attributable | $ 962 | $ 635 | ||
| Hillrom | ||||
| Acquisitions And Collaborations [Line Items] | ||||
| Cash and cash equivalents | 399 | |||
| Accounts receivable | 561 | |||
| Inventories | 559 | |||
| Prepaid expenses and other current assets | 49 | |||
| Property, plant and equipment | 506 | |||
| Goodwill | 6,834 | |||
| Other intangible assets | 6,029 | |||
| Operating lease right-of-use assets | 74 | |||
| Other non-current assets | 133 | |||
| Short-term debt | (250) | |||
| Accounts payable | (140) | |||
| Accrued expenses and other current liabilities | (578) | |||
| Long-term debt and finance lease obligations | (2,118) | |||
| Operating lease liabilities | (57) | |||
| Other non-current liabilities | (1,525) | |||
| Total assets acquired and liabilities assumed | $ 10,476 | |||
ACQUISITIONS AND OTHER ARRANGEMENTS - Schedule of Total Consideration for PerClot (Details) - USD ($) $ in Millions |
Jul. 29, 2021 |
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 13, 2021 |
Dec. 31, 2020 |
|---|---|---|---|---|---|
| Acquisitions And Collaborations [Line Items] | |||||
| Goodwill | $ 6,843 | $ 9,836 | $ 6,800 | $ 3,217 | |
| Other intangible assets | $ 6,000 | ||||
| PerClot | |||||
| Acquisitions And Collaborations [Line Items] | |||||
| Purchase price | $ 25 | ||||
| Contingent Consideration | 28 | ||||
| Total Consideration | 53 | ||||
| Goodwill | 4 | ||||
| Other intangible assets | 49 | ||||
| Total assets acquired | $ 53 |
ACQUISITIONS AND OTHER ARRANGEMENTS - Transderm Scop Narrative (Details) - Transderm Scop $ in Millions |
Mar. 31, 2021
USD ($)
|
|---|---|
| Asset Acquisition [Line Items] | |
| Purchase price | $ 60 |
| Additional cash consideration | 30 |
| Contingent Consideration | 24 |
| Developed Product Rights | |
| Asset Acquisition [Line Items] | |
| Reacquired license rights fair value total | $ 64 |
| Weighted-average useful life | 9 years |
| Developed Product Rights | Measurement Input Discount Rate | |
| Asset Acquisition [Line Items] | |
| Discount rate used to measure intangible assets | 0.225 |
| Customer relationships | |
| Asset Acquisition [Line Items] | |
| Reacquired license rights fair value total | $ 3 |
| Weighted-average useful life | 7 years |
| Customer relationships | Measurement Input Discount Rate | |
| Asset Acquisition [Line Items] | |
| Discount rate used to measure intangible assets | 0.155 |
ACQUISITIONS AND OTHER ARRANGEMENTS - Schedule of Total Consideration for Transderm Scop (Details) - Transderm Scop $ in Millions |
Mar. 31, 2021
USD ($)
|
|---|---|
| Acquisitions And Collaborations [Line Items] | |
| Purchase price | $ 60 |
| Contingent Consideration | 24 |
| Consideration transferred | $ 84 |
ACQUISITIONS AND OTHER ARRANGEMENTS - Celerity Pharmaceuticals, LLC Narrative (Details) - Licensing Agreements - Celerity - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended |
|---|---|---|
Sep. 30, 2022 |
Dec. 31, 2020 |
|
| Acquisitions And Collaborations [Line Items] | ||
| Proceeds from divestiture of product rights | $ 1 | |
| Loss on product divestiture arrangement | $ 54 |
ACQUISITIONS AND OTHER ARRANGEMENTS - Caelyx and Doxil Narrative (Details) - Caelyx and Doxil - USD ($) $ in Millions |
12 Months Ended | |
|---|---|---|
Feb. 17, 2021 |
Dec. 31, 2021 |
|
| Acquisitions And Collaborations [Line Items] | ||
| Purchase price | $ 325 | |
| Revenue since acquisition | $ 108 | |
| Developed Technology Rights | ||
| Acquisitions And Collaborations [Line Items] | ||
| Reacquired license rights fair value total | $ 314 | |
| Weighted-average useful life | 9 years | |
| Customer relationships | ||
| Acquisitions And Collaborations [Line Items] | ||
| Reacquired license rights fair value total | $ 11 | |
| Weighted-average useful life | 8 years |
SUPPLEMENTAL FINANCIAL INFORMATION - Allowance for Doubtful Accounts (Details) - USD ($) $ in Millions |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
| Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |||
| Balance at end of period | $ 114 | $ 122 | $ 125 |
| Acquisition | 0 | 13 | |
| Charged to costs and expenses | 7 | (2) | |
| Write-offs | (7) | (5) | |
| Currency translation adjustments | $ (8) | $ (9) | |
SUPPLEMENTAL FINANCIAL INFORMATION - Inventories (Details) - USD ($) $ in Millions |
Dec. 31, 2022 |
Dec. 31, 2021 |
|---|---|---|
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
| Raw materials | $ 738 | $ 591 |
| Work in process | 293 | 300 |
| Finished goods | 1,687 | 1,562 |
| Inventories | $ 2,718 | $ 2,453 |
SUPPLEMENTAL FINANCIAL INFORMATION - Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Millions |
Dec. 31, 2022 |
Sep. 30, 2022 |
Dec. 31, 2021 |
|---|---|---|---|
| Property, Plant and Equipment [Line Items] | |||
| Prepaid value added taxes | $ 189 | $ 199 | |
| Prepaid income taxes | 185 | 166 | |
| Contract assets | 93 | 84 | |
| Assets held for sale | 50 | 0 | |
| Other | 399 | 390 | |
| Prepaid expenses and other current assets | $ 916 | $ 839 | |
| Disposal Group, Not Discontinued Operations | Geographic Basis, Corporate Headquarters | |||
| Property, Plant and Equipment [Line Items] | |||
| Agreed purchase price | $ 52 |
SUPPLEMENTAL FINANCIAL INFORMATION - Other Non-Current Assets (Detail) - USD ($) $ in Millions |
Dec. 31, 2022 |
Dec. 31, 2021 |
|---|---|---|
| Other Assets, Noncurrent | ||
| Deferred tax assets | $ 280 | $ 376 |
| Non-current receivables, net | 89 | 113 |
| Contract assets | 122 | 111 |
| Capitalized implementation costs in hosting arrangements | 119 | 99 |
| Pension and other postretirement benefits | 123 | 228 |
| Investments | 247 | 195 |
| Other | 131 | 91 |
| Other non-current assets | $ 1,111 | $ 1,213 |
SUPPLEMENTAL FINANCIAL INFORMATION - Accrued Expenses and Other Current Liabilities (Detail) - USD ($) $ in Millions |
Dec. 31, 2022 |
Dec. 31, 2021 |
|---|---|---|
| Accounts Payable and Accrued Liabilities, Current | ||
| Common stock dividends payable | $ 146 | $ 140 |
| Employee compensation and withholdings | 418 | 608 |
| Property, payroll and certain other taxes | 163 | 174 |
| Contract liabilities | 164 | 162 |
| Restructuring liabilities | 100 | 97 |
| Accrued rebates | 257 | 312 |
| Operating lease liabilities | 121 | 128 |
| Income taxes payable | 91 | 90 |
| Pension and other postretirement benefits | 49 | 46 |
| Contingent payments related to acquisitions | 34 | 21 |
| Other | 659 | 701 |
| Accrued expenses and other current liabilities | $ 2,202 | $ 2,479 |
SUPPLEMENTAL FINANCIAL INFORMATION - Other Non-Current Liabilities (Detail) - USD ($) $ in Millions |
Dec. 31, 2022 |
Dec. 31, 2021 |
|---|---|---|
| Other Liabilities Noncurrent | ||
| Pension and other postretirement benefits | $ 879 | $ 1,052 |
| Deferred tax liabilities | 698 | 962 |
| Long-term tax liabilities | 64 | 80 |
| Contingent payments related to acquisitions | 50 | 122 |
| Contract liabilities | 80 | 84 |
| Litigation and environmental reserves | 20 | 28 |
| Restructuring liabilities | 7 | 12 |
| Other | 161 | 153 |
| Other non-current liabilities | $ 1,959 | $ 2,493 |
SUPPLEMENTAL FINANCIAL INFORMATION - Interest Expense, net (Detail) - USD ($) $ in Millions |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
| Interest Income Expense Net | |||
| Interest costs | $ 426 | $ 217 | $ 162 |
| Interest costs capitalized | (11) | (11) | (9) |
| Interest expense | 415 | 206 | 153 |
| Interest income | (20) | (14) | (19) |
| Interest expense, net | $ 395 | $ 192 | $ 134 |
SUPPLEMENTAL FINANCIAL INFORMATION - Other Expense, net (Detail) - USD ($) |
1 Months Ended | 3 Months Ended | 12 Months Ended | ||
|---|---|---|---|---|---|
Nov. 30, 2020 |
Dec. 31, 2022 |
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
| Other Income, net | |||||
| Foreign exchange (gains) losses, net | $ (3,000,000) | $ 19,000,000 | $ 49,000,000 | ||
| Change in fair value of marketable equity securities | (8,000,000) | 7,000,000 | (13,000,000) | ||
| Losses on debt extinguishments | $ 110,000,000 | 0 | 5,000,000 | 110,000,000 | |
| Pension settlement and curtailment (gains) losses | (12,000,000) | 2,000,000 | 46,000,000 | ||
| Pension and other postretirement benefit (gains) losses | (25,000,000) | 11,000,000 | (3,000,000) | ||
| Reclassification of cumulative translation loss to earnings | 65,000,000 | 0 | 0 | ||
| Other, net | (2,000,000) | (3,000,000) | 1,000,000 | ||
| Other (income) expense, net | $ 15,000,000 | $ 41,000,000 | $ 190,000,000 | ||
| Reclassification of cumulative translation loss to earnings | $ 65,000,000 | ||||
SUPPLEMENTAL FINANCIAL INFORMATION - Supplemental Cash Flow Information (Details) - USD ($) $ in Millions |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
| Property, Plant and Equipment [Line Items] | |||
| Interest paid, net of portion capitalized | $ 355 | $ 145 | $ 137 |
| Income taxes paid | 330 | 282 | 249 |
| Property, Plant and Equipment | |||
| Property, Plant and Equipment [Line Items] | |||
| Capital expenditures incurred but not yet paid | $ 91 | $ 79 | $ 102 |
DEBT AND CREDIT FACILITIES - Schedule of Maturities of Long-term Debt (Details) - USD ($) $ in Millions |
Dec. 31, 2022 |
Dec. 31, 2021 |
|---|---|---|
| Debt Disclosure [Abstract] | ||
| 2023 | $ 1,404 | |
| 2024 | 4,182 | |
| 2025 | 643 | |
| 2026 | 2,399 | |
| 2027 | 1,459 | |
| Thereafter | 6,615 | |
| Total obligations and commitments | 16,702 | |
| Discounts, premiums, and adjustments relating to hedging instruments | (66) | |
| Total debt | $ 16,636 | $ 17,660 |
LEASES - Additional Information (Details) - USD ($) $ in Millions |
12 Months Ended | ||||
|---|---|---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
| Leases [Line Items] | |||||
| Aggregate future payments | $ 13 | ||||
| Net investment in sales-type leases | 88 | $ 115 | |||
| Sales-type leases, receivables | $ 11 | $ 23 | $ 25 | $ 17 | $ 12 |
| Minimum | |||||
| Leases [Line Items] | |||||
| Lessee operating and finance lease remaining term of contract | 1 year | ||||
| Lessee, renewal term | 1 year | ||||
| Maximum | |||||
| Leases [Line Items] | |||||
| Lessee operating and finance lease remaining term of contract | 40 years | ||||
| Lessee, renewal term | 16 years |
LEASES - Components of Lease Cost (Details) - USD ($) $ in Millions |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
| Leases [Abstract] | |||
| Operating lease cost | $ 124 | $ 114 | $ 115 |
| Finance lease cost | |||
| Amortization of right-of-use assets | 6 | 7 | 5 |
| Interest on lease liabilities | 5 | 5 | 5 |
| Variable lease cost | 62 | 52 | 54 |
| Lease cost | $ 197 | $ 178 | $ 179 |
LEASES - Supplemental Cash Flow Information Related to Leases (Details) - USD ($) $ in Millions |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
| Leases [Abstract] | |||
| Operating cash flows from operating leases | $ 141 | $ 124 | $ 127 |
| Operating cash flows from finance leases | 5 | 5 | 4 |
| Financing cash flows from finance leases | 4 | 4 | 4 |
| Right-of-use operating lease assets obtained in exchange for lease obligations | 74 | 71 | 67 |
| Right-of-use finance lease assets obtained in exchange for lease obligations | $ 3 | $ 4 | $ 8 |
LEASES - Schedule of Lease Term and Discount Rates (Details) |
Dec. 31, 2022 |
Dec. 31, 2021 |
|---|---|---|
| Leases [Abstract] | ||
| Operating lease, weighted average remaining lease term | 7 years | 8 years |
| Finance lease, weighted average remaining lease term | 11 years | 12 years |
| Operating lease, weighted average discount rate | 2.70% | 1.80% |
| Finance lease, weighted average discount rate | 9.40% | 9.30% |
LEASES - Maturities of Operating and Finance Lease Liabilities (Details) - USD ($) $ in Millions |
Dec. 31, 2022 |
Dec. 31, 2021 |
|---|---|---|
| Finance Leases | ||
| 2023 | $ 9 | |
| 2024 | 9 | |
| 2025 | 9 | |
| 2026 | 9 | |
| 2027 | 8 | |
| Thereafter | 61 | |
| Total minimum lease payments | 105 | |
| Less: imputed interest | (41) | |
| Total finance lease liabilities | 64 | $ 70 |
| Operating Leases | ||
| 2023 | 127 | |
| 2024 | 110 | |
| 2025 | 88 | |
| 2026 | 70 | |
| 2027 | 60 | |
| Thereafter | 174 | |
| Total minimum lease payments | 629 | |
| Less: imputed interest | (52) | |
| Total operating lease liabilities | $ 577 | $ 650 |
LEASES - Components of Operating Lease Income (Details) - USD ($) $ in Millions |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
| Leases [Abstract] | |||
| Sales-type lease revenue | $ 15 | $ 27 | $ 38 |
| Operating lease revenue | 514 | 136 | 84 |
| Variable lease revenue | 54 | 79 | 80 |
| Total lease revenue | $ 583 | $ 242 | $ 202 |
| Operating Lease Income Comprehensive Income Extensible List Not Disclosed Flag | Operating lease revenue | Operating lease revenue | Operating lease revenue |
LEASES - Components of Net Investment in Sales-type Lease (Details) - USD ($) $ in Millions |
Dec. 31, 2022 |
Dec. 31, 2021 |
|---|---|---|
| Leases [Abstract] | ||
| Minimum lease payments | $ 87 | $ 111 |
| Unguaranteed residual values | 1 | 4 |
| Net investment in leases | $ 88 | $ 115 |
LEASES - Components of Sales Type Lease Income (Details) - USD ($) $ in Millions |
Dec. 31, 2022 |
Dec. 31, 2021 |
|---|---|---|
| Leases [Abstract] | ||
| Accounts receivable, net | $ 35 | $ 40 |
| Other non-current assets | 53 | 75 |
| Total | $ 88 | $ 115 |
LEASES - Maturities of Sales-type and Operating Leases (Details) $ in Millions |
Dec. 31, 2022
USD ($)
|
|---|---|
| Sales-type Leases | |
| 2023 | $ 39 |
| 2024 | 27 |
| 2025 | 17 |
| 2026 | 4 |
| 2027 | 1 |
| Thereafter | 0 |
| Total minimum lease payments | 88 |
| Less: imputed interest | (1) |
| Total minimum lease payments | 87 |
| Operating Leases | |
| 2023 | 80 |
| 2024 | 72 |
| 2025 | 71 |
| 2026 | 54 |
| 2027 | 3 |
| Thereafter | 0 |
| Present value of minimum lease payments | $ 280 |
COMMITMENTS AND CONTINGENCIES - Additional Information (Details) $ in Millions |
12 Months Ended | ||||
|---|---|---|---|---|---|
|
Feb. 18, 2022
USD ($)
|
Jan. 12, 2021
USD ($)
|
Dec. 31, 2022
USD ($)
site
|
Dec. 31, 2021
USD ($)
|
Mar. 31, 2020
lawsuit
|
|
| Loss Contingencies [Line Items] | |||||
| Litigation reserve | $ 28 | $ 72 | |||
| Litigation settlement | $ 16 | ||||
| Civil settlement amount | $ 18 | ||||
| Loss contingency, number of lawsuits | lawsuit | 2 | ||||
| Environmental Clean-up | Superfund Sites | |||||
| Loss Contingencies [Line Items] | |||||
| Number of sites | site | 6 | ||||
| Environmental reserves | $ 19 | $ 18 |
STOCKHOLDERS’ EQUITY - Stock-based Compensation Narrative (Details) - USD ($) shares in Millions, $ in Millions |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
| Stockholders Equity Note [Line Items] | |||
| Shares available for future awards under the stock-based compensation plans (in shares) | 44 | ||
| Stock compensation | $ 154 | $ 146 | $ 130 |
| Tax benefit related to stock based compensation | 34 | 36 | 53 |
| Excess tax benefit for stock based compensation | $ 5 | $ 13 | $ 27 |
| Marketing and Administrative Expenses | |||
| Stockholders Equity Note [Line Items] | |||
| Stock compensation expense allocation percentage | 75.00% | 75.00% | |
STOCKHOLDERS’ EQUITY - Stock Options Narrative (Details) - USD ($) $ in Millions |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
| Employee stock option | |||
| Stockholders Equity Note [Line Items] | |||
| Target service period | 3 years | ||
| Stock repurchase program, period in force | 6 months | ||
| Stock options granted contractual term | 10 years | ||
| Total intrinsic value of stock options exercised | $ 38 | $ 78 | $ 131 |
| Unrecognized compensation cost related to all unvested | $ 41 | ||
| Weighted-average period for all unvested | 1 year 7 months 6 days | ||
| Equity Option | |||
| Stockholders Equity Note [Line Items] | |||
| Exercise price, percent | 100.00% | ||
STOCKHOLDERS’ EQUITY - Stock Options Fair Value Assumptions (Details) - Employee stock option - $ / shares |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
| Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
| Expected volatility | 24.00% | 24.00% | 26.00% |
| Expected life (in years) | 5 years 6 months | 5 years 6 months | 5 years 6 months |
| Risk-free interest rate | 1.80% | 0.80% | 0.60% |
| Dividend yield | 1.30% | 1.30% | 1.20% |
| Fair value per stock (in us dollar per share) | $ 18 | $ 16 | $ 16 |
STOCKHOLDERS’ EQUITY - RSUs Narrative (Details) - Restricted Stock Units - USD ($) $ / shares in Units, $ in Millions |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
| Stockholders Equity Note [Line Items] | |||
| Target service period | 3 years | ||
| Stock repurchase program, period in force | 6 months | ||
| Unrecognized compensation cost related to all unvested | $ 97 | ||
| Weighted-average period for all unvested | 1 year 10 months 24 days | ||
| Weighted average fair value (in dollars per share) | $ 81.53 | $ 79.30 | $ 77.51 |
| Fair value of RSUs and restricted stock vested | $ 76 | $ 47 | $ 52 |
STOCKHOLDERS’ EQUITY - PSUs Narrative (Details) - Performance Shares $ in Millions |
12 Months Ended |
|---|---|
|
Dec. 31, 2022
USD ($)
| |
| Stockholders Equity Note [Line Items] | |
| Target service period | 3 years |
| Unrecognized compensation cost related to all unvested | $ 24 |
| Weighted-average period for all unvested | 2 years 9 months 18 days |
STOCKHOLDERS' EQUITY - Performance Stock Units Fair Value Assumptions (Detail) - Performance Shares - $ / shares |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
| Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
| Baxter volatility | 27.00% | 28.00% | 26.00% |
| Peer group volatility | |||
| Peer group volatility minimum | 24.00% | 26.00% | 23.00% |
| Peer group volatility maximum | 54.00% | 81.00% | 95.00% |
| Correlation of returns | |||
| Correlation of returns minimum | 0.21 | 0.05 | 0.19 |
| Correlation of returns maximum | 0.61 | 0.65 | 0.70 |
| Risk-free interest rate | 1.60% | 0.30% | 0.40% |
| Fair value per PSU (in dollars per share) | $ 102 | $ 86 | $ 108 |
STOCKHOLDERS' EQUITY - Summary of Nonvested Performance Stock Unit Activity (Detail) - Performance Shares shares in Thousands |
12 Months Ended |
|---|---|
|
Dec. 31, 2022
$ / shares
shares
| |
| PSUs shares | |
| Nonvested Units at beginning of year (in shares) | shares | 732 |
| Granted (in shares) | shares | 239 |
| Vested (in shares) | shares | (179) |
| Forfeited (in shares) | shares | (94) |
| Nonvested Units at end of year (in shares) | shares | 698 |
| PSUs weighted-average grant date fair value | |
| Weighted-average grant date fair value Nonvested Units at beginning of year (in dollars per share) | $ / shares | $ 85.87 |
| Weighted-average grant date fair value Granted (in dollars per share) | $ / shares | 87.55 |
| Weighted-average grant date fair value Vested (in dollars per share) | $ / shares | 91.12 |
| Weighted-average grant date fair value Forfeited (in dollars per share) | $ / shares | 85.89 |
| Weighted-average grant date fair value Nonvested Units at end of year (in dollars per share) | $ / shares | $ 85.00 |
NET SALES - Additional Information (Details) - USD ($) $ in Millions |
12 Months Ended | |
|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
|
| Disaggregation of Revenue [Line Items] | ||
| Net trade accounts receivable | $ 2,400 | $ 2,400 |
| Contract liability, revenue recognized | $ 121 | $ 20 |
| Minimum | Software sales | ||
| Disaggregation of Revenue [Line Items] | ||
| Revenue recognized, contract period (years) | 1 year | |
| Minimum | Consumable Medical Products | ||
| Disaggregation of Revenue [Line Items] | ||
| Revenue recognized, contract period (years) | 1 year | |
| Maximum | Software sales | ||
| Disaggregation of Revenue [Line Items] | ||
| Revenue recognized, contract period (years) | 5 years | |
| Maximum | Consumable Medical Products | ||
| Disaggregation of Revenue [Line Items] | ||
| Revenue recognized, contract period (years) | 7 years | |
| Maximum | Contract manufacturing services | ||
| Disaggregation of Revenue [Line Items] | ||
| Revenue recognized, contract period (years) | 90 days | |
BUSINESS OPTIMIZATION CHARGES - Schedule of Business Optimization Charges (Detail) - USD ($) $ in Millions |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
| Restructuring and Related Activities [Abstract] | |||
| Restructuring charges | $ 163 | $ 91 | $ 111 |
| Costs to implement business optimization programs | 62 | 23 | 23 |
| Total business optimization charges | $ 225 | $ 114 | $ 134 |
BUSINESS OPTIMIZATION CHARGES - Summary of Activity in Reserves related to Business Optimization Initiatives (Detail) - USD ($) $ in Millions |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
| Restructuring Reserve [Roll Forward] | |||
| Assumed in acquisition | $ 6 | ||
| Restructuring charges | $ 163 | 91 | $ 111 |
| Severance and Other Employee Related Costs | |||
| Restructuring Reserve [Roll Forward] | |||
| Reserve, beginning balance | 109 | 113 | 92 |
| Restructuring charges | 172 | 94 | 116 |
| Payments | (145) | (78) | (86) |
| Reserve adjustments | (21) | (19) | (16) |
| Currency translation | (8) | (7) | 7 |
| Reserve, ending balance | $ 107 | $ 109 | $ 113 |
PENSION AND OTHER POSTRETIREMENT BENEFIT PROGRAMS - Additional Information (Details) $ in Millions |
12 Months Ended |
|---|---|
|
Dec. 31, 2022
USD ($)
| |
| Defined Benefit Plan Disclosure [Line Items] | |
| Allowed variance from target allocation of plan assets | 6.43% |
| General investment portfolio limits on holdings, description | 5.00% |
| International plans | |
| Defined Benefit Plan Disclosure [Line Items] | |
| Defined benefit plan, expected future employer contributions, next fiscal year | $ 43 |
| OPEB | |
| Defined Benefit Plan Disclosure [Line Items] | |
| Defined benefit plan, expected future employer contributions, next fiscal year | $ 18 |
| Return-Seeking Investments | |
| Defined Benefit Plan Disclosure [Line Items] | |
| Allowed variance from target allocation of plan assets | 50.00% |
| Liability Hedging Investments | |
| Defined Benefit Plan Disclosure [Line Items] | |
| Allowed variance from target allocation of plan assets | 50.00% |
PENSION AND OTHER POSTRETIREMENT BENEFIT PROGRAMS - Information Relating to Individual Plans in Funded Status Table above that have ABO in Excess of Plan Assets (Details) - USD ($) $ in Millions |
Dec. 31, 2022 |
Dec. 31, 2021 |
|---|---|---|
| Information relating to the individual plans in the funded status table above that have an ABO in excess of plan assets | ||
| ABO | $ 2,594 | $ 2,991 |
| Fair value of plan assets | $ 1,865 | $ 2,209 |
PENSION AND OTHER POSTRETIREMENT BENEFIT PROGRAMS - Information Relating to Individual Plans in Funded Status Table that have PBO in Excess of Plan Assets (Details) - USD ($) $ in Millions |
Dec. 31, 2022 |
Dec. 31, 2021 |
|---|---|---|
| Information relating to the individual plans in the funded status table above that have a PBO in excess of plan assets | ||
| PBO | $ 2,774 | $ 3,254 |
| Fair value of plan assets | $ 2,006 | $ 2,366 |
PENSION AND OTHER POSTRETIREMENT BENEFIT PROGRAMS - Expected Net Pension and OPEB Plan Payments for Next 10 Years (Details) $ in Millions |
Dec. 31, 2022
USD ($)
|
|---|---|
| Pension benefits | |
| Expected Net Pension and OPEB Plan Payments for the Next 10 Years | |
| 2023 | $ 138 |
| 2024 | 155 |
| 2025 | 167 |
| 2026 | 177 |
| 2027 | 192 |
| 2028 through 2032 | 1,059 |
| Total expected net benefit payments for next 10 years | 1,888 |
| OPEB | |
| Expected Net Pension and OPEB Plan Payments for the Next 10 Years | |
| 2023 | 18 |
| 2024 | 17 |
| 2025 | 16 |
| 2026 | 15 |
| 2027 | 14 |
| 2028 through 2032 | 62 |
| Total expected net benefit payments for next 10 years | $ 142 |
PENSION AND OTHER POSTRETIREMENT BENEFIT PROGRAMS - Summary of Pre-Tax losses Included in AOCI (Details) - USD ($) $ in Millions |
Dec. 31, 2022 |
Dec. 31, 2021 |
|---|---|---|
| Pension benefits | ||
| Summary of the pre-tax losses included in AOCI | ||
| Actuarial loss (gain) | $ 509 | $ 509 |
| Prior service credit and transition obligation | 8 | 8 |
| Total pre-tax loss (gain) recognized in AOCI | 517 | 517 |
| OPEB | ||
| Summary of the pre-tax losses included in AOCI | ||
| Actuarial loss (gain) | (69) | (37) |
| Prior service credit and transition obligation | (27) | (36) |
| Total pre-tax loss (gain) recognized in AOCI | $ (96) | $ (73) |
PENSION AND OTHER POSTRETIREMENT BENEFIT PROGRAMS - Summary of Net-of-Tax Amounts Recorded in OCI Relating to Pension and OPEB Plans (Details) - USD ($) |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
| Summary of the net-of-tax amounts recorded in OCI relating to pension and OPEB plans | |||
| Gain (loss) arising during the year, net of tax of $6 in 2022, $43 in 2021 and $17 in 2020 | $ (9,000,000) | $ 160,000,000 | $ 59,000,000 |
| Amortization of loss to earnings, net of tax of $6 in 2022, $17 in 2021 and $12 in 2020 | 24,000,000 | 65,000,000 | 47,000,000 |
| Settlement charges, net of tax of zero in 2022, zero in 2021 and $11 in 2020 | 1,000,000 | 2,000,000 | 35,000,000 |
| Pension and other employee benefits | 16,000,000 | 227,000,000 | 141,000,000 |
| Gain (loss) arising during the year, tax expense (benefit) | 6,000,000 | 43,000,000 | 17,000,000 |
| Amortization of loss to earnings, tax benefit | 6,000,000 | 17,000,000 | 12,000,000 |
| Settlement, tax benefit | $ 0 | $ 0 | $ 11,000,000 |
PENSION AND OTHER POSTRETIREMENT BENEFIT PROGRAMS - Net Periodic Benefit Cost - Continuing Operations (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | ||
|---|---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
| Net periodic benefit cost | ||||
| DefinedBenefitPlanNetPeriodicBenefitCostCreditSettlementGainLossStatementOfIncomeOrComprehensiveIncomeExtensibleListNotDisclosedFlag | Settlement charges | |||
| Settlement charges | $ (43) | $ (1) | $ (2) | $ (46) |
| Pension benefits | ||||
| Net periodic benefit cost | ||||
| Service cost | 75 | 87 | 83 | |
| Interest cost | 97 | 72 | 95 | |
| Expected return on plan assets | (157) | (143) | (163) | |
| Amortization of net losses and other deferred amounts | 44 | 91 | 77 | |
| Curtailment gain | (13) | 0 | 0 | |
| Other | 1 | (4) | 0 | |
| Net periodic benefit cost | 48 | 105 | 138 | |
| OPEB | ||||
| Net periodic benefit cost | ||||
| Service cost | 1 | 1 | 1 | |
| Interest cost | 4 | 4 | 6 | |
| Amortization of net losses and prior service credit | (14) | (9) | (18) | |
| Net periodic benefit cost | $ (9) | $ (4) | $ (11) | |
PENSION AND OTHER POSTRETIREMENT BENEFIT PROGRAMS - Changes in Fair Value Measurements that Used Significant Unobservable Inputs (Details) - Other holdings - USD ($) $ in Millions |
12 Months Ended | |
|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
|
| Defined Benefit Plan, Change in Fair Value of Plan Assets, Level 3 Reconciliation [Roll Forward] | ||
| Beginning of period | $ 152 | |
| End of period | 85 | $ 152 |
| Significant unobservable inputs (Level 3) | ||
| Defined Benefit Plan, Change in Fair Value of Plan Assets, Level 3 Reconciliation [Roll Forward] | ||
| Beginning of period | 9 | 11 |
| Purchases | (2) | |
| Transfers out | 1 | |
| End of period | $ 8 | $ 9 |
PENSION AND OTHER POSTRETIREMENT BENEFIT PROGRAMS - Funded Status Percentage of Company's Pension Plans (Details) - USD ($) $ in Millions |
Dec. 31, 2022 |
Dec. 31, 2021 |
|---|---|---|
| Funded status percentage of the company's pension plans | ||
| Fair value of plan assets | $ 2,501 | $ 3,784 |
| PBO | $ 3,146 | |
| Funded status percentage | 79.00% | |
| Qualified Pension Plan | U.S. | ||
| Funded status percentage of the company's pension plans | ||
| Fair value of plan assets | $ 1,745 | |
| PBO | $ 1,969 | |
| Funded status percentage | 89.00% | |
| Qualified Pension Plan | International plans | ||
| Funded status percentage of the company's pension plans | ||
| Fair value of plan assets | $ 756 | |
| PBO | $ 676 | |
| Funded status percentage | 112.00% | |
| Non Qualified Pension Plan | U.S. | ||
| Funded status percentage of the company's pension plans | ||
| PBO | $ 194 | |
| Non Qualified Pension Plan | International plans | ||
| Funded status percentage of the company's pension plans | ||
| PBO | $ 307 |
PENSION AND OTHER POSTRETIREMENT BENEFIT PROGRAMS - Pension Plan Amendments (Details) $ in Millions |
1 Months Ended | 3 Months Ended | 12 Months Ended | |||
|---|---|---|---|---|---|---|
|
Dec. 31, 2020
USD ($)
|
Dec. 31, 2020
USD ($)
|
Dec. 31, 2022
USD ($)
benefitPlan
|
Dec. 31, 2021
USD ($)
|
Dec. 31, 2020
USD ($)
|
May 31, 2022
USD ($)
|
|
| Defined Benefit Plan Disclosure [Line Items] | ||||||
| Payment for participants | $ 252 | |||||
| Settlement charges | $ 43 | $ 1 | $ 2 | $ 46 | ||
| Accumulated benefit obligation of company's pension plans | $ 3,000 | $ 4,300 | ||||
| Projected benefit obligation | $ 11 | |||||
| Number of defined benefit plans | benefitPlan | 1 | |||||
PENSION AND OTHER POSTRETIREMENT BENEFIT PROGRAMS - U.S. Defined Contribution Plan (Details) - USD ($) $ in Millions |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
| Retirement Benefits [Abstract] | |||
| Defined contribution plan, contributions by employer | $ 96 | $ 59 | $ 61 |
INCOME TAXES - Income From Continuing Operations Before Income Tax Expense by Category (Details) - USD ($) $ in Millions |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
| Income Tax Disclosure [Abstract] | |||
| United States | $ (3,759) | $ (424) | $ (329) |
| International | 1,406 | 1,901 | 1,621 |
| Income (loss) before income taxes | $ (2,353) | $ 1,477 | $ 1,292 |
INCOME TAXES - Income Tax Expense Related To Continuing Operations (Details) - USD ($) $ in Millions |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
| Current | |||
| Federal | $ 3 | $ (11) | $ 7 |
| State and local | 4 | 10 | (7) |
| International | 286 | 329 | 270 |
| Current income tax expense (benefit) | 293 | 328 | 270 |
| Deferred | |||
| Federal | (253) | (103) | (99) |
| State and local | (52) | (8) | 5 |
| International | 80 | (35) | 6 |
| Deferred income tax expense (benefit) | (225) | (146) | (88) |
| Income tax expense (benefit) | $ 68 | $ 182 | $ 182 |
INCOME TAXES - Deferred Tax Assets and Liabilities (Detail) - USD ($) $ in Millions |
Dec. 31, 2022 |
Dec. 31, 2021 |
|---|---|---|
| Deferred tax assets | ||
| Accrued liabilities and other | $ 399 | $ 434 |
| Pension and other postretirement benefits | 147 | 174 |
| Tax credit and net operating loss carryforwards | 1,143 | 939 |
| Swiss tax reform net asset basis step-up | 151 | 161 |
| Operating lease liabilities | 144 | 155 |
| Valuation allowances | (704) | (401) |
| Total deferred tax assets | 1,280 | 1,462 |
| Deferred tax liabilities | ||
| Subsidiaries’ unremitted earnings | 55 | 66 |
| Long-lived assets and other | 1,506 | 1,831 |
| Operating lease right-of-use assets | 137 | 151 |
| Total deferred tax liabilities | 1,698 | 2,048 |
| Total deferred tax liabilities | $ 418 | $ 586 |
INCOME TAXES - Income Tax Expense Reconciliation (Details) - USD ($) $ in Millions |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
| Income Tax Expense Reconciliation | |||
| Income tax expense (benefit) at U.S. statutory rate | $ (494) | $ 310 | $ 271 |
| Tax incentives | (157) | (193) | (169) |
| State and local taxes, net of federal benefit | (23) | 10 | (2) |
| Impact of foreign taxes | 107 | 200 | 142 |
| Tax-deductible foreign statutory loss on an investment in a foreign subsidiary | 0 | (58) | 0 |
| Unfavorable court decision in a foreign jurisdiction related to an uncertain tax position | 0 | 22 | 0 |
| Non-deductible goodwill impairments | 591 | 0 | 0 |
| Notional interest deduction benefit | (306) | (97) | (54) |
| Valuation allowances | 314 | (61) | 8 |
| Stock compensation windfall tax benefits | (5) | (13) | (27) |
| Research and development tax credits | (11) | (5) | (7) |
| Unutilized foreign tax credits | 23 | 14 | 15 |
| Other, net | 29 | 53 | 5 |
| Income tax expense (benefit) | $ 68 | $ 182 | $ 182 |
INCOME TAXES - Reconciliation of Company's Unrecognized Tax Benefits (Detail) - USD ($) $ in Millions |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
| Reconciliation Of Unrecognized Tax Benefits Excluding Amounts Pertaining To Examined Tax Returns | |||
| Balance at beginning of the year | $ 111 | $ 90 | $ 111 |
| Increase due to acquisition | 0 | 11 | 0 |
| Increase associated with tax positions taken during the current year | 11 | 31 | 8 |
| Increase (decrease) associated with tax positions taken during a prior year | 11 | (3) | (1) |
| Settlements | (7) | (2) | (18) |
| Decrease associated with lapses in statutes of limitations | (37) | (16) | (10) |
| Balance at end of the year | $ 89 | $ 111 | $ 90 |
EARNINGS (LOSS) PER SHARE - Reconciliation of Basic Shares to Diluted Shares (Details) - shares shares in Millions |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
| Reconciliation of Basic Shares to Diluted Shares | |||
| Basic (in shares) | 504 | 502 | 509 |
| Effect of dilutive securities (in shares) | 0 | 6 | 8 |
| Diluted (in shares) | 504 | 508 | 517 |
EARNINGS (LOSS) PER SHARE - Additional Information (Details) - shares shares in Millions |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
| Earnings Per Share [Abstract] | |||
| Anti-dilutive securities excluded from computation of EPS (in shares) | 22 | 7 | 4 |
FINANCIAL INSTRUMENTS, DERIVATIVES AND HEDGING ACTIVITIES (Details) - USD ($) $ in Millions |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
| Trade Receivables Held-for-sale, Net, Reconciliation to Cash Flow [Roll Forward] | |||
| Sold receivables at beginning of year | $ 81 | $ 96 | $ 79 |
| Proceeds from sales of receivables | 291 | 339 | 348 |
| Cash collections (remitted to the owners of the receivables) | (293) | (346) | (335) |
| Effect of foreign exchange rate changes | (8) | (8) | 4 |
| Sold receivables at end of year | $ 71 | $ 81 | $ 96 |
FINANCIAL INSTRUMENTS, DERIVATIVES AND HEDGING ACTIVITIES - Net of Tax Activity in Accumulated Other Comprehensive Income Related to Cash Flow Hedges (Details) - USD ($) $ in Millions |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
| AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
| Accumulated other comprehensive income (loss) balance at beginning of year | $ (3,380) | ||
| Accumulated other comprehensive income (loss) balance at end of year | (3,833) | $ (3,380) | |
| Deferred, net after-tax gains on derivative instruments | 1 | ||
| Continuing Operations | |||
| AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
| Accumulated other comprehensive income (loss) balance at beginning of year | (126) | (153) | $ (41) |
| (Loss) gain in fair value of derivatives during the year | 22 | 4 | (117) |
| Amount reclassified to earnings during the year | (15) | 23 | 5 |
| Accumulated other comprehensive income (loss) balance at end of year | $ (119) | $ (126) | $ (153) |
FINANCIAL INSTRUMENTS, DERIVATIVES AND HEDGING ACTIVITIES - Derivative Positions Presented On Net Basis (Details) - USD ($) $ in Millions |
Dec. 31, 2022 |
Dec. 31, 2021 |
|---|---|---|
| Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
| Derivative asset, fair value | $ 14 | $ 8 |
| Gross amount subject to offset in master netting arrangements not offset in the consolidated balance sheet, asset | (4) | (2) |
| Total, Asset | 10 | 6 |
| Derivative liability, fair value | 12 | 5 |
| Gross amount subject to offset in master netting arrangements not offset in the consolidated balance sheet, liability | (4) | (2) |
| Total, Liability | $ 8 | $ 3 |
FINANCIAL INSTRUMENTS, DERIVATIVES AND HEDGING ACTIVITIES - Amounts Recorded on Condensed Consolidated Balance Sheet Related to Fair Value Hedges (Details) - Long-term debt - USD ($) $ in Millions |
Dec. 31, 2022 |
Dec. 31, 2021 |
|---|---|---|
| Derivatives, Fair Value [Line Items] | ||
| Carrying amount of hedged items | $ 101 | $ 101 |
| Cumulative amount of fair value hedging adjustment included in the carrying amount of the hedged item | $ 4 | $ 4 |
FAIR VALUE MEASUREMENTS - Additional Information (Details) - USD ($) $ in Millions |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
| Financial Instruments and Fair Value [Line Items] | |||
| Cash and cash equivalents | $ 1,718 | $ 2,951 | $ 3,730 |
| Available-For-Sale, Debt Securities | |||
| Financial Instruments and Fair Value [Line Items] | |||
| Transfers out of Level 3 | 10 | ||
| Transfers out of Level 3 | 8 | ||
| Other Assets | |||
| Financial Instruments and Fair Value [Line Items] | |||
| Other equity investments without readily determinable fair values | 104 | 114 | |
| Fair Value, Inputs, Level 2 | |||
| Financial Instruments and Fair Value [Line Items] | |||
| Cash and cash equivalents | 1,700 | 3,000 | |
| Money market funds, at carrying value | $ 341 | $ 816 |
FAIR VALUE MEASUREMENTS - Reconciliation of Fair Value Measurements that Use Significant Unobservable Inputs (Details) - USD ($) $ in Millions |
12 Months Ended | |
|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
|
| Available-For-Sale, Debt Securities | ||
| Available-for-sale debt securities | ||
| Fair value at beginning of period | $ 30 | |
| Additions | 23 | |
| Change in fair value recognized in earnings | 0 | |
| Change in fair value recognized in AOCI | 4 | |
| Payments | 0 | |
| Transfers out of Level 3 | (10) | |
| Fair value at end of period | 47 | $ 30 |
| Acquisition-related Costs | ||
| Contingent payments related to acquisitions | ||
| Fair value at beginning of period | 143 | 30 |
| Additions | 0 | 135 |
| Change in fair value recognized in earnings | (39) | (6) |
| Change in fair value recognized in AOCI | 0 | 0 |
| Payments | (20) | (16) |
| Transfers out of Level 3 | 0 | 0 |
| Fair value at end of period | $ 84 | $ 143 |
FAIR VALUE MEASUREMENTS - Book Values and Fair Values of Financial Instruments (Details) - USD ($) $ in Millions |
Dec. 31, 2022 |
Dec. 31, 2021 |
|---|---|---|
| Book values | ||
| Fair Value And Carrying Value By Balance Sheet Grouping [Line Items] | ||
| Short-term debt | $ 299 | $ 301 |
| Current maturities of long-term debt and finance lease obligations | 1,105 | 210 |
| Long-term debt and finance lease obligations | 15,232 | 17,149 |
| Fair values | ||
| Fair Value And Carrying Value By Balance Sheet Grouping [Line Items] | ||
| Short-term debt | 299 | 301 |
| Current maturities of long-term debt and finance lease obligations | 1,079 | 212 |
| Long-term debt and finance lease obligations | $ 13,657 | $ 17,568 |
SEGMENT INFORMATION - Additional Information (Details) $ in Millions |
1 Months Ended | |
|---|---|---|
|
Dec. 31, 2021
USD ($)
|
Dec. 31, 2022
segment
|
|
| Segment Reporting Information [Line Items] | ||
| Number geographical segments | segment | 4 | |
| Hillrom | ||
| Segment Reporting Information [Line Items] | ||
| Acquisition costs | $ | $ 127 |
SEGMENT INFORMATION - Operating Income to Income from Continuing Operations Reconciliation (Details) - USD ($) $ in Millions |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
| Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||
| Total segment operating income | $ (1,943) | $ 1,710 | $ 1,616 |
| Net interest expense | 395 | 192 | 134 |
| Other (income) expense, net | 15 | 41 | 190 |
| Income (loss) before income taxes | (2,353) | 1,477 | 1,292 |
| Operating Segments | |||
| Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||
| Total segment operating income | 4,344 | 3,787 | 3,503 |
| Corporate and other | |||
| Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||
| Total segment operating income | $ (6,287) | $ (2,077) | $ (1,887) |
Qualifying And Valuation Accounts (Detail) - USD ($) $ in Millions |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
| Allowance for doubtful accounts | |||
| SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
| Balance at beginning of period | $ 122 | $ 125 | $ 112 |
| Additions Acquisition | 0 | 13 | 0 |
| Additions Charged to costs and expenses | 7 | (2) | 11 |
| (Credited) charged to other accounts | (8) | (9) | 6 |
| Deductions | (7) | (5) | (4) |
| Balance at end of period | 114 | 122 | 125 |
| Deferred tax asset valuation allowance | |||
| SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
| Balance at beginning of period | 401 | 454 | 420 |
| Additions Acquisition | 0 | 38 | 0 |
| Additions Charged to costs and expenses | 315 | 37 | 77 |
| (Credited) charged to other accounts | (11) | (30) | 26 |
| Deductions | (1) | (98) | (69) |
| Balance at end of period | $ 704 | $ 401 | $ 454 |
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