Baxter International Inc. (NYSE:BAX) today announced financial results
for the fourth quarter of 2012, and provided its financial outlook for
the first quarter and full-year 2013.
Baxter reported net income in the fourth quarter of $494 million, which
compares to $463 million reported in the prior-year period. Earnings per
diluted share of $0.89 compares to $0.82 per diluted share reported in
the fourth quarter of 2011, reflecting an increase of 9 percent. The
fourth quarter 2012 results included special after-tax items of $206
million (or $0.37 per diluted share) primarily related to costs
associated with settlement of certain U.S. pension obligations and
business optimization initiatives. After-tax special items in the fourth
quarter of 2011 totaled approximately $200 million (or $0.35 per diluted
share).
On an adjusted basis, excluding special items in both periods, Baxter’s
net income of $700 million increased 6 percent in the fourth quarter
from $662 million in the prior-year period. Adjusted earnings per
diluted share of $1.26 advanced 8 percent from $1.17 per diluted share
reported in the fourth quarter of 2011. These results were in line with
the company’s previously issued earnings guidance of $1.24 to $1.27 per
diluted share.
Worldwide revenues grew 4 percent in the fourth quarter to $3.8 billion
compared to $3.6 billion in the fourth quarter of 2011. Excluding the
impact of foreign currency, sales increased 5 percent. Sales within the
United States of $1.6 billion advanced 7 percent, and international
sales increased 2 percent to $2.2 billion (or 4 percent excluding the
impact of foreign currency).
BioScience revenues totaled $1.7 billion and rose 7 percent (or 9
percent excluding the impact of foreign currency) from the same period
last year. Driving this performance was robust growth in demand,
particularly in the United States, for ADVATE [Antihemophilic Factor
(Recombinant), Plasma/Albumin-Free Method], and GAMMAGARD LIQUID [Immune
Globulin Intravenous (Human)], as well as other plasma-based
therapeutics including FEIBA, an inhibitor bypass therapy, and albumin.
In addition, the company benefited from milestone payments related to
the company’s ongoing collaborations with governments on the development
of influenza vaccines, and the acquisition of Synovis Life Technologies.
Medical Products sales totaled $2.1 billion and increased 2 percent over
the prior-year period (or 3 percent excluding the impact of foreign
currency), driven primarily by gains in peritoneal dialysis patients in
the U.S., as well as growth in intravenous therapies (including the
company’s parenteral nutrition products), certain injectable drugs
including oncolytics and critical care products, and a benefit from the
company’s acquisition of Baxa Corporation.
Full-Year 2012 Results
For the full year 2012, Baxter reported net income of $2.3 billion or
$4.18 per diluted share, compared to net income of $2.2 billion or $3.88
per diluted share in 2011. On an adjusted basis, excluding special items
in both years, Baxter’s net income was $2.5 billion in 2012, which
represents an increase of 2 percent over the prior year, and earnings
per diluted share of $4.53 rose 5 percent from earnings per diluted
share of $4.31 reported in 2011.
Baxter’s worldwide sales totaled $14.2 billion for full-year 2012 and
increased 2 percent versus the prior-year period (or 5 percent excluding
the impact of foreign currency). Sales within the United States of $6.1
billion advanced 6 percent in 2012, and international sales declined 1
percent to $8.1 billion (but increased 4 percent excluding the impact of
foreign currency). BioScience sales improved 3 percent (or 6 percent
excluding the impact of foreign currency) to $6.2 billion, while Medical
Products sales increased 1 percent to $8.0 billion (or 4 percent
excluding the impact of foreign currency).
Baxter generated strong cash flows from operations in 2012 and returned
significant value to shareholders in the form of dividends and share
repurchases. Cash flows from operations rose 10 percent and totaled more
than $3.1 billion in 2012, a record level. Baxter returned approximately
$2.3 billion to shareholders during the year, through dividends totaling
$800 million and share repurchases of approximately $1.5 billion (or
approximately 25 million shares).
At the same time, Baxter increased its investments in research and
development to $1.2 billion, reflecting an increase of 22 percent, as
the company advanced a number of clinical programs in its pipeline,
expanded its portfolio with several product launches and line
extensions, and initiated several new programs and collaborations. In
addition, Baxter announced investments to enhance future plasma
production capacity with a new state-of-the-art manufacturing facility
in Georgia and a collaboration with Stichting Sanquin Bloedvoorziening
(Sanquin Blood Supply Foundation) in the Netherlands to support growth
of its plasma-based treatments. The company also entered into a number
of partnerships, such as a novel public-private partnership in Brazil to
expand patient access to vital hemophilia therapies, and executed
several business development initiatives to enhance future growth,
including the proposed acquisition of Gambro AB, a global medical
technology company focused on developing, manufacturing and supplying
dialysis products and therapies for patients with acute or chronic
kidney disease.
''The progress we have made during 2012, together with our solid
financial performance, sets a very strong foundation for 2013 and
beyond. We remain very confident in the long-term growth prospects for
our company,'' said Robert L. Parkinson, Jr., chairman and chief
executive officer. ''Baxter’s core portfolio continues to benefit from
our focus on life-saving therapies, and the increased level of R&D
investment has transformed our new product pipeline into a robust
portfolio of products and therapies directed at improving the quality of
care while addressing key, high-potential areas of unmet medical need.
We’ve also entered into a number of partnerships and executed business
development initiatives that align with our core strengths, position
Baxter for future success, and enhance shareholder value.''
Recent achievements reflecting these priorities include the following:
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Announcement of pivotal Phase III study results evaluating the
efficacy and safety of routine prophylaxis compared to on-demand
treatment of FEIBA NF [Anti-Inhibitor Coagulant Complex], Nanofiltered
and Vapor Heated, in patients with hemophilia A or B that develop
inhibitors. Top-line results from the study showed a reduced median
annual bleed rate from 28.7 during FEIBA NF on-demand treatment to 7.9
during FEIBA NF prophylactic treatment (a 72.5 percent reduction). The
Phase III study will form the basis of a biologics license application
to be filed with the U.S. Food and Drug Administration (FDA) in the
first quarter of 2013.
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Submission of an Investigational New Drug application for hemophilia A
treatment BAX 855 with the FDA, following positive results from a
Phase I trial. BAX 855 is a full-length longer-acting recombinant
factor VIII (rFVIII) that was developed to increase the half-life of
ADVATE [Antihemophilic Factor (Recombinant) Plasma/Albumin-Free
Method] – the most widely chosen rFVIII in the world. Baxter expects
to start enrollment of adult patients in its Phase II/III study in the
first quarter of 2013.
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Execution of an exclusive 20-year partnership with Hemobrás (Empresa
Brasileira de Hemoderivados e Biotechnologia) to provide hemophilia
patients in Brazil greater access to recombinant factor VIII (rFVIII)
therapy for the treatment of hemophilia A. Hemophilia A is a genetic
condition in which the body does not produce enough clotting protein
factor VIII. It is estimated that more than 10,000 people in Brazil
are living with hemophilia A, and today the vast majority are treated
with plasma-derived FVIII therapy. Through this innovative
partnership, Baxter will be the exclusive provider of Brazil's
recombinant FVIII treatment over the next 10 years while the companies
work together on a technology transfer to support development of local
manufacturing capacity by Hemobrás.
-
Completion of the first U.S. study of the company’s home hemodialysis
system and initiation of a nocturnal in-center trial in Canada. Data
from both trials will support the company’s submission for CE Mark in
Europe in 2013.
-
Conclusion of Baxter's first Phase III trial evaluating IG therapy in
mild to moderate Alzheimer's disease patients. Initial data from the
trial are expected to be released in the second quarter of 2013, and
the company continues enrollment in a second, confirmatory Phase III
trial.
Outlook for First Quarter, Full-Year 2013
Baxter also announced today its outlook for the first quarter and
full-year 2013. The company’s full-year guidance includes the impact of
the Gambro AB acquisition, which is projected to close at the end of the
second quarter and dilute full-year 2013 earnings by $0.10 to $0.15 per
diluted share. Including Gambro, Baxter’s guidance reflects sales growth
for the full-year 2013 of approximately 10 percent, before the impact of
foreign exchange. Also, for the full year, Baxter expects earnings of
$4.60 to $4.70 per diluted share, before any special items, and cash
flows from operations of approximately $3.3 billion.
For the first quarter of 2013, the company expects sales growth of
approximately 2 to 3 percent, excluding the impact of foreign currency.
Baxter expects earnings of $1.03 to $1.05 per diluted share in the first
quarter, before any special items.
A webcast of Baxter’s fourth quarter conference call for investors can
be accessed live from a link on the company's website at www.baxter.com
beginning at 7:30 a.m. CST on January 24, 2013. Please visit www.baxter.com
for more information regarding this and future investor events and
webcasts.
Baxter International Inc., through its subsidiaries, develops,
manufactures and markets products that save and sustain the lives of
people with hemophilia, immune disorders, infectious diseases, kidney
disease, trauma, and other chronic and acute medical conditions. As a
global, diversified healthcare company, Baxter applies a unique
combination of expertise in medical devices, pharmaceuticals and
biotechnology to create products that advance patient care worldwide.
This release includes forward-looking statements concerning the
company’s financial results, business development activities, R&D
pipeline and outlook for 2013. The statements are based on assumptions
about many important factors, including the following, which could cause
actual results to differ materially from those in the forward-looking
statements: demand for and market acceptance risks for new and existing
products, such as ADVATE, and other technologies; future actions of
regulatory bodies and other governmental authorities that could delay,
limit or suspend product development, manufacturing or sales or result
in sanctions; product quality or patient safety concerns leading
to product recalls, withdrawals, launch delays, litigation, or declining
sales; the ability of the company to obtain required regulatory
approvals, satisfy closing conditions and close the Gambro AB
transaction in a timely manner; future actions of governmental
authorities and other third parties as U.S. healthcare reform
legislation and other austerity measures are implemented globally;
additional legislation, regulation and other governmental pressures,
which may affect pricing, taxation, reimbursement and rebate policies of
government agencies and private payers or other elements of the
company’s business; product development risks, including satisfactory
clinical performance; the company's ability to realize the anticipated
benefits from its business development and R&D activities; inventory
reductions or fluctuations in buying patterns by wholesalers or
distributors; the impact of geographic and product mix on the company's
sales; the impact of competitive products and pricing, including generic
competition, drug reimportation and disruptive technologies; the
availability of acceptable raw materials and component supply;
fluctuations in supply and demand and the pricing of plasma-based
therapies; the ability to enforce company patents; patents of third
parties preventing or restricting the company’s manufacture, sale or use
of affected products or technology; the impact of global economic
conditions on Baxter and its customers, including foreign governments in
certain countries in which the company operates; foreign currency
fluctuations and other risks identified in the company’s most recent
filing on Form 10-K and other Securities and Exchange Commission
filings, all of which are available on the company's website. The
company does not undertake to update its forward-looking statements. Financial
schedules are attached to this release and available on the company’s
website.
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BAXTER INTERNATIONAL INC.
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Consolidated Statements of Income
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Three Months Ended December 31, 2012 and 2011
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(unaudited)
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(in millions, except per share and percentage data)
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Three Months Ended
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December 31,
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2012
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2011
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Change
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NET SALES
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$3,753
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$3,594
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4%
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COST OF SALES
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1,848
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1,829
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1%
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GROSS MARGIN
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1,905
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1,765
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8%
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% of Net Sales
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50.8%
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49.1%
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1.7 pts
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MARKETING AND ADMINISTRATIVE EXPENSES
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1,040
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886
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17%
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% of Net Sales
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27.7%
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24.7%
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3.0 pts
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RESEARCH AND DEVELOPMENT EXPENSES
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291
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254
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15%
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% of Net Sales
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7.8%
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7.1%
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0.7 pts
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NET INTEREST EXPENSE
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22
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15
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47%
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OTHER (INCOME) EXPENSE, NET
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(22)
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A |
71
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A |
N/M
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PRE-TAX INCOME
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574
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539
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6%
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INCOME TAX EXPENSE
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80
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76
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5%
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% of Pre-Tax Income
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13.9%
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14.1%
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(0.2 pts)
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NET INCOME
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$494
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$463
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7%
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BASIC EPS
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$0.90
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$0.82
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10%
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DILUTED EPS
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$0.89
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$0.82
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9%
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WEIGHTED-AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
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Basic
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548
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562
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Diluted
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555
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566
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ADJUSTED PRE-TAX INCOME (excluding special items)
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$894
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B
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$834
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B |
7%
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ADJUSTED NET INCOME (excluding special items)
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$700
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B |
$662
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B |
6%
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ADJUSTED DILUTED EPS (excluding special items)
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$1.26
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B |
$1.17
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B |
8%
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A |
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Other (income) expense, net includes the net results attributable to
noncontrolling interests, which had been reported separately in the
prior year. The prior period consolidated statement of income
presented above, the reconciliation of GAAP (generally accepted
accounting principles) to non-GAAP measures presented on page 9, and
the cash flows from operations schedule presented on page 12 have
been conformed to the current period presentation.
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B |
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Refer to page 9 for a description of the adjustments and a
reconciliation to GAAP measures.
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BAXTER INTERNATIONAL INC.
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Note to Consolidated Statements of Income
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Three Months Ended December 31, 2012 and 2011
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Description of Adjustments and Reconciliation of GAAP to Non-GAAP
Measures
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(unaudited)
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(in millions, except per share and percentage data)
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The company's GAAP results for the three months ended December 31,
2012 and 2011 included special items which impacted the GAAP
measures as follows:
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Three Months Ended
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December 31,
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2012
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2011
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Change
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Gross Margin
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$1,905
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$1,765
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8%
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Business optimization items1 |
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62
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95
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Adjusted Gross Margin
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$1,967
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$1,860
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6%
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% of Net Sales
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52.4%
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51.8%
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0.6 pts
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Marketing and Administrative Expenses
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$1,040
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$886
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17%
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Business optimization items 1 |
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(60)
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(97)
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Pension settlement items2 |
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(170)
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-
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Asset impairment and other items 3 |
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-
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(41)
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Adjusted Marketing and Administrative Expenses
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$810
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$748
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8%
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% of Net Sales
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21.6%
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20.8%
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0.8 pts
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Research and Development Expenses
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$291
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$254
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15%
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Business optimization items 1 |
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(28)
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-
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Adjusted Research and Development Expenses
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$263
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$254
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4%
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% of Net Sales
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7.0%
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7.1%
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(0.1 pts)
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Other (Income) Expense, Net
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$(22)
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$71
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N/M
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Asset impairment and other items 3 |
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-
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(62)
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Adjusted Other (Income) Expense, Net
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$(22)
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$9
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N/M
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Pre-Tax Income
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$574
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$539
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6%
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Impact of special items
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320
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295
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Adjusted Pre-Tax Income
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$894
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$834
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7%
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Income Tax Expense
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$80
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$76
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5%
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Impact of special items
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|
114
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96
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Adjusted Income Tax Expense
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$194
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$172
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13%
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% of Adjusted Pre-Tax Income
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21.7%
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20.6%
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1.1 pts
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Net Income
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$494
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$463
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7%
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Impact of special items
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206
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199
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Adjusted Net Income
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$700
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$662
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6%
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Diluted EPS
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$0.89
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$0.82
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9%
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Impact of special items
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0.37
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0.35
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Adjusted Diluted EPS
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$1.26
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$1.17
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8%
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WEIGHTED-AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
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Diluted
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555
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566
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1 |
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The company undertook business optimization initiatives resulting in
charges totaling $150 million ($101 million, or $0.18 per diluted
share, on an after-tax basis) and $192 million ($128 million, or
$0.22 per diluted share, on an after-tax basis) in 2012 and 2011,
respectively.
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2 |
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Marketing and administrative expenses in 2012 included a charge
totaling $170 million ($105 million, or $0.19 per diluted share, on
an after-tax basis) primarily related to the settlement of certain
pension obligations in the United States.
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3 |
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Marketing and administrative expenses and other (income) expense,
net in 2011 included charges totaling $103 million ($71 million, or
$0.13 per diluted share, on an after-tax basis) primarily related to
a contribution to the Baxter International Foundation and the
write-down of Greek government bonds.
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For more information on the company's use of non-GAAP financial
measures in this press release, please see the company's Current
Report on Form 8-K filed with the Securities and Exchange Commission
on the date of this press release.
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BAXTER INTERNATIONAL INC.
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Consolidated Statements of Income
|
Twelve Months Ended December 31, 2012 and 2011
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(unaudited)
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(in millions, except per share and percentage data)
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Twelve Months Ended
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December 31,
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2012
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2011
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Change
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NET SALES
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$14,190
|
|
$13,893
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2%
|
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COST OF SALES
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6,889
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6,847
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1%
|
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GROSS MARGIN
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7,301
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7,046
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4%
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% of Net Sales
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51.5%
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50.7%
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0.8 pts
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MARKETING AND ADMINISTRATIVE EXPENSES
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3,324
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|
3,154
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5%
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% of Net Sales
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23.4%
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22.7%
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0.7 pts
|
|
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RESEARCH AND DEVELOPMENT EXPENSES
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1,156
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|
946
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22%
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% of Net Sales
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8.1%
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6.8%
|
|
1.3 pts
|
|
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|
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NET INTEREST EXPENSE
|
|
87
|
|
54
|
|
61%
|
|
|
|
|
|
|
|
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OTHER (INCOME) EXPENSE, NET
|
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(155)
|
A |
115
|
A |
N/M
|
|
|
|
|
|
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|
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PRE-TAX INCOME
|
|
2,889
|
|
2,777
|
|
4%
|
|
|
|
|
|
|
|
|
INCOME TAX EXPENSE
|
|
563
|
|
553
|
|
2%
|
% of Pre-Tax Income
|
|
19.5%
|
|
19.9%
|
|
(0.4 pts)
|
|
|
|
|
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NET INCOME
|
|
$2,326
|
|
$2,224
|
|
5%
|
|
|
|
|
|
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|
BASIC EPS
|
|
$4.22
|
|
$3.91
|
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8%
|
DILUTED EPS
|
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$4.18
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|
$3.88
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8%
|
|
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WEIGHTED-AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
|
|
|
|
|
|
|
Basic
|
|
551
|
|
569
|
|
|
Diluted
|
|
556
|
|
573
|
|
|
|
|
|
|
|
|
|
|
ADJUSTED PRE-TAX INCOME (excluding special items)
|
|
$3,223
|
B |
$3,151
|
B |
2%
|
ADJUSTED NET INCOME (excluding special items)
|
|
$2,516
|
B |
$2,471
|
B |
2%
|
ADJUSTED DILUTED EPS (excluding special items)
|
|
$4.53
|
B |
$4.31
|
B |
5%
|
|
|
|
A |
|
Other (income) expense, net includes the net results attributable to
noncontrolling interests, which had been reported separately in the
prior year. The prior period consolidated statement of income
presented above, the reconciliation of GAAP to non-GAAP measures
presented on page 11, and the cash flows from operations schedule
presented on page 12 have been conformed to the current period
presentation.
|
|
|
|
B |
|
Refer to page 11 for a description of the adjustments and a
reconciliation to GAAP measures.
|
|
|
|
|
|
|
|
BAXTER INTERNATIONAL INC.
|
Note to Consolidated Statements of Income
|
Twelve Months Ended December 31, 2012 and 2011
|
Description of Adjustments and Reconciliation of GAAP to Non-GAAP
Measures
|
(unaudited)
|
(in millions, except per share and percentage data)
|
|
|
|
|
|
|
|
|
The company's GAAP results for the twelve months ended December 31,
2012 and 2011 included special items which impacted the GAAP
measures as follows:
|
|
|
|
|
|
|
|
|
Twelve Months Ended
|
|
|
|
|
December 31,
|
|
|
|
|
2012
|
|
2011
|
|
Change
|
Gross Margin
|
|
$7,301
|
|
$7,046
|
|
4%
|
Business optimization items 1 |
|
62
|
|
95
|
|
|
Reserve adjustments 2 |
|
(23)
|
|
-
|
|
|
Business development items 3 |
|
6
|
|
-
|
|
|
Adjusted Gross Margin
|
|
$7,346
|
|
$7,141
|
|
3%
|
% of Net Sales
|
|
51.8%
|
|
51.4%
|
|
0.4 pts
|
|
|
|
|
|
|
|
|
Marketing and Administrative Expenses
|
|
$3,324
|
|
$3,154
|
|
5%
|
Business optimization items 1 |
|
(60)
|
|
(97)
|
|
|
Business development items 3 |
|
(9)
|
|
-
|
|
|
Pension settlement items4 |
|
(170)
|
|
-
|
|
|
AWP litigation and historical rebate and discount items 5 |
|
-
|
|
(79)
|
|
|
Asset impairment and other items 6 |
|
-
|
|
(41)
|
|
|
Adjusted Marketing and Administrative Expenses
|
|
$3,085
|
|
$2,937
|
|
5%
|
% of Net Sales
|
|
21.7%
|
|
21.1%
|
|
0.6 pts
|
|
|
|
|
|
|
|
|
Research and Development Expenses
|
|
$1,156
|
|
$946
|
|
22%
|
Business optimization items1 |
|
(28)
|
|
-
|
|
|
Business development items 3 |
|
(113)
|
|
-
|
|
|
Adjusted Research and Development Expenses
|
|
$1,015
|
|
$946
|
|
7%
|
% of Net Sales
|
|
7.2%
|
|
6.8%
|
|
0.4 pts
|
|
|
|
|
|
|
|
|
Other (Income) Expense, Net
|
|
$(155)
|
|
$115
|
|
N/M
|
Reserve adjustments 2 |
|
91
|
|
-
|
|
|
Asset impairment and other items 6 |
|
-
|
|
(62)
|
|
|
Adjusted Other (Income) Expense, Net
|
|
$(64)
|
|
$53
|
|
N/M
|
|
|
|
|
|
|
|
|
Pre-Tax Income
|
|
$2,889
|
|
$2,777
|
|
4%
|
Impact of special items
|
|
334
|
|
374
|
|
|
Adjusted Pre-Tax Income
|
|
$3,223
|
|
$3,151
|
|
2%
|
|
|
|
|
|
|
|
|
Income Tax Expense
|
|
$563
|
|
$553
|
|
2%
|
Impact of special items
|
|
144
|
|
127
|
|
|
Adjusted Income Tax Expense
|
|
$707
|
|
$680
|
|
4%
|
% of Adjusted Pre-Tax Income
|
|
21.9%
|
|
21.6%
|
|
0.3 pts
|
|
|
|
|
|
|
|
|
Net Income
|
|
$2,326
|
|
$2,224
|
|
5%
|
Impact of special items
|
|
190
|
|
247
|
|
|
Adjusted Net Income
|
|
$2,516
|
|
$2,471
|
|
2%
|
|
|
|
|
|
|
|
|
Diluted EPS
|
|
$4.18
|
|
$3.88
|
|
8%
|
Impact of special items
|
|
0.35
|
|
0.43
|
|
|
Adjusted Diluted EPS
|
|
$4.53
|
|
$4.31
|
|
5%
|
|
|
|
|
|
|
|
|
WEIGHTED-AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
|
|
|
|
|
|
|
Diluted
|
|
556
|
|
573
|
|
|
|
|
|
1 |
|
The company undertook business optimization initiatives resulting in
charges totaling $150 million ($101 million, or $0.18 per diluted
share, on an after-tax basis) and $192 million ($128 million, or
$0.22 per diluted share, on an after-tax basis) in 2012 and 2011,
respectively.
|
|
|
|
2 |
|
Cost of sales included a net benefit of $23 million ($27 million, or
$0.05 per diluted share, on an after-tax basis) primarily related to
an adjustment to the COLLEAGUE infusion pump reserves when the
company substantially completed its recall activities in the United
States in 2012. Other (income) expense, net in 2012 included a
benefit of $91 million, or $0.16 per diluted share, consisting of
gains of $53 million and $38 million for the reduction of certain
contingent payment liabilities related to the prior acquisitions of
Prism Pharmaceuticals, Inc. (Prism) and ApaTech Limited,
respectively, for which there was no tax expense recognized.
|
|
|
|
3 |
|
The company incurred business development charges in 2012 totaling
$128 million ($102 million, or $0.19 per diluted share, on an
after-tax basis) which principally related to R&D charges of $33
million associated with the company’s global collaboration with
Momenta Pharmaceuticals, Inc. (Momenta), $30 million associated with
the company's global collaboration with Chatham Therapeutics, LLC
(Chatham), and $50 million associated with the company's licensing
agreement with Onconova Therapeutics, Inc. (Onconova).
|
|
|
|
4 |
|
Marketing and administrative expenses in 2012 included a charge
totaling $170 million ($105 million, or $0.19 per diluted share, on
an after-tax basis) primarily related to the settlement of certain
pension obligations in the United States.
|
|
|
|
5 |
|
Marketing and administrative expenses in 2011 included a charge
totaling $79 million ($48 million, or $0.09 per diluted share, on an
after-tax basis) related to the resolution of litigation pertaining
to average wholesale prices (AWP) and certain historical rebate and
discount adjustments.
|
|
|
|
6 |
|
Marketing and administrative expenses and other (income) expense,
net in 2011 included charges totaling $103 million ($71 million, or
$0.12 per diluted share, on an after-tax basis) primarily related to
a contribution to the Baxter International Foundation and the
write-down of Greek government bonds.
|
|
|
|
For more information on the company's use of non-GAAP financial
measures in this press release, please see the company's Current
Report on Form 8-K filed with the Securities and Exchange Commission
on the date of this press release.
|
|
|
|
|
|
|
|
|
|
|
BAXTER INTERNATIONAL INC.
|
Cash Flows from Operations and Changes in Net Debt
|
(unaudited)
|
($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from Operations
|
|
|
|
|
|
|
|
|
|
(Brackets denote cash outflows)
|
|
Three Months Ended
|
|
Twelve Months Ended
|
|
|
|
|
December 31,
|
|
December 31,
|
|
|
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$494
|
|
$463
|
|
$2,326
|
|
$2,224
|
|
Adjustments
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
178
|
|
167
|
|
712
|
|
670
|
|
|
Deferred income taxes
|
|
(214)
|
|
(46)
|
|
(17)
|
|
172
|
|
|
Stock compensation
|
|
33
|
|
25
|
|
130
|
|
119
|
|
|
Realized excess tax benefits from stock issued
|
|
|
|
|
|
|
|
|
|
|
under employee benefit plans
|
|
(10)
|
|
(4)
|
|
(24)
|
|
(21)
|
|
|
Business optimization items
|
|
150
|
|
192
|
|
150
|
|
192
|
|
|
Asset impairment and other items
|
|
-
|
|
103
|
|
-
|
|
182
|
|
|
Other
|
|
5
|
|
17
|
|
(42)
|
|
64
|
|
Changes in balance sheet items
|
|
|
|
|
|
|
|
|
|
|
Accounts and other current receivables, net
|
|
(113)
|
|
(127)
|
|
(41)
|
|
(229)
|
|
|
Inventories
|
|
7
|
|
(43)
|
|
(129)
|
|
(315)
|
|
|
Accounts payable and accrued liabilities
|
|
300
|
|
188
|
|
18
|
|
98
|
|
|
Infusion pump and business optimization payments
|
|
(57)
|
|
(89)
|
|
(283)
|
|
(347)
|
|
|
Other
|
|
172
|
A |
46
|
|
306
|
A |
8
|
A |
Cash flows from operations
|
|
$945
|
|
$892
|
|
$3,106
|
|
$2,817
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes in Net Debt
|
|
|
|
|
|
|
|
|
|
Increase (decrease)
|
|
Three Months Ended
|
|
Twelve Months Ended
|
|
|
|
|
December 31,
|
|
December 31,
|
|
|
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
|
|
Net debt, beginning of period
|
|
$2,756
|
|
$2,204
|
|
$2,290
|
|
$1,702
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from operations
|
|
(945)
|
|
(892)
|
|
(3,106)
|
|
(2,817)
|
|
Capital expenditures
|
|
399
|
|
317
|
|
1,161
|
|
960
|
|
Dividends
|
|
246
|
|
175
|
|
804
|
|
709
|
|
Proceeds from stock issued under employee benefit plans
|
|
(195)
|
|
(39)
|
|
(488)
|
|
(427)
|
|
Purchases of treasury stock
|
|
415
|
|
170
|
|
1,480
|
|
1,583
|
|
Acquisitions and investments
|
|
20
|
|
361
|
B |
605
|
B |
590
|
B |
Divestiture and other investing activities
|
|
(21)
|
|
(17)
|
|
(107)
|
|
(123)
|
|
Other, including the effect of exchange rate changes
|
|
(15)
|
|
11
|
|
21
|
|
113
|
|
(Decrease) increase in net debt
|
|
(96)
|
|
86
|
|
370
|
|
588
|
|
|
|
|
|
|
|
|
|
|
|
|
Net debt, December 31
|
|
$2,660
|
|
$2,290
|
|
$2,660
|
|
$2,290
|
|
|
|
|
|
|
|
|
|
|
|
|
Key statistics, December 31:
|
|
|
|
|
|
|
|
|
|
Days sales outstanding
|
|
53.3
|
|
53.5
|
|
53.3
|
|
53.5
|
|
Inventory turns
|
|
2.5
|
|
2.7
|
|
2.5
|
|
2.7
|
|
|
|
|
A |
|
Other changes in balance sheet items included the pension settlement
charge of $170 million primarily related to the settlement of
certain pension obligations in the United States in 2012 and the
discretionary contribution of $150 million to the company's pension
plan in the United States in 2011.
|
|
|
|
B |
|
Acquisitions and investments in 2012 and 2011 included $100 million
for the third quarter 2012 investment in Onconova preferred stock
and execution of a licensing agreement, $90 million for the second
quarter 2012 exercise of the company's option to acquire the
remaining equity interest in Sigma International General Medical
Apparatus, LLC, $30 million related to the second quarter 2012
collaboration with Chatham, $304 million for the first quarter 2012
acquisition of Synovis Life Technologies, Inc., $33 million for the
first quarter 2012 payment to execute the Momenta collaboration,
$360 million for the fourth quarter 2011 acquisition of Baxa
Corporation, and $170 million for the second quarter 2011
acquisition of Prism.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BAXTER INTERNATIONAL INC.
|
Net Sales
|
Periods Ending December 31, 2012 and 2011
|
(unaudited)
|
($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q4
|
|
Q4
|
|
% Growth @
|
|
% Growth @
|
|
|
|
|
|
YTD
|
|
YTD
|
|
% Growth @
|
|
% Growth @
|
|
|
|
|
|
2012
|
|
2011
|
|
Actual Rates
|
|
Constant Rates
|
|
|
|
|
|
2012
|
|
2011
|
|
Actual Rates
|
|
Constant Rates
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BioScience
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United States
|
|
|
|
$825
|
|
$735
|
|
12%
|
|
12%
|
|
|
|
|
|
$3,087
|
|
$2,805
|
|
10%
|
|
10%
|
International
|
|
|
|
862
|
|
840
|
|
3%
|
|
6%
|
|
|
|
|
|
3,150
|
|
3,248
|
|
(3%)
|
|
2%
|
Total BioScience
|
|
|
|
$1,687
|
|
$1,575
|
|
7%
|
|
9%
|
|
|
|
|
|
$6,237
|
|
$6,053
|
|
3%
|
|
6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Medical Products
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United States 1 |
|
|
|
$747
|
|
$731
|
|
2%
|
|
2%
|
|
|
|
|
|
$2,969
|
|
$2,904
|
|
2%
|
|
2%
|
International 1 |
|
|
|
1,319
|
|
1,288
|
|
2%
|
|
3%
|
|
|
|
|
|
4,984
|
|
4,936
|
|
1%
|
|
4%
|
Total Medical Products 1 |
|
|
|
$2,066
|
|
$2,019
|
|
2%
|
|
3%
|
|
|
|
|
|
$7,953
|
|
$7,840
|
|
1%
|
|
4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Baxter International Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United States
|
|
|
|
$1,572
|
|
$1,466
|
|
7%
|
|
7%
|
|
|
|
|
|
$6,056
|
|
$5,709
|
|
6%
|
|
6%
|
International
|
|
|
|
2,181
|
|
2,128
|
|
2%
|
|
4%
|
|
|
|
|
|
8,134
|
|
8,184
|
|
(1%)
|
|
4%
|
Total Baxter
|
|
|
|
$3,753
|
|
$3,594
|
|
4%
|
|
5%
|
|
|
|
|
|
$14,190
|
|
$13,893
|
|
2%
|
|
5%
|
|
|
|
1 |
|
Includes revenues associated with manufacturing, distribution and
other services provided by the company to the buyer of the
Transfusion Therapies (TT) business after the February 2007
divestiture, which had previously been reported separately. The
prior periods have been recast to conform to the current period
presentation.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BAXTER INTERNATIONAL INC.
|
Key Product Line Sales
|
Periods Ending December 31, 2012 and 2011
|
(unaudited)
|
($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q4
|
|
Q4
|
|
% Growth @
|
|
% Growth @
|
|
|
|
|
|
YTD
|
|
YTD
|
|
% Growth @
|
|
% Growth @
|
|
|
|
|
|
2012
|
|
2011
|
|
Actual Rates
|
|
Constant Rates
|
|
|
|
|
|
2012
|
|
2011
|
|
Actual Rates
|
|
Constant Rates
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BioScience
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Recombinants
|
|
|
|
$581
|
|
$578
|
|
1%
|
|
3%
|
|
|
|
|
|
$2,234
|
|
$2,212
|
|
1%
|
|
4%
|
Antibody Therapy
|
|
|
|
425
|
|
406
|
|
5%
|
|
5%
|
|
|
|
|
|
1,593
|
|
1,541
|
|
3%
|
|
5%
|
Plasma Proteins
|
|
|
|
447
|
|
397
|
|
13%
|
|
13%
|
|
|
|
|
|
1,464
|
|
1,440
|
|
2%
|
|
4%
|
Regenerative Medicine
|
|
|
|
180
|
|
150
|
|
20%
|
|
21%
|
|
|
|
|
|
673
|
|
580
|
|
16%
|
|
19%
|
Other 1 |
|
|
|
54
|
|
44
|
|
23%
|
|
30%
|
|
|
|
|
|
273
|
|
280
|
|
(3%)
|
|
5%
|
Total BioScience
|
|
|
|
$1,687
|
|
$1,575
|
|
7%
|
|
9%
|
|
|
|
|
|
$6,237
|
|
$6,053
|
|
3%
|
|
6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Medical Products
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Renal
|
|
|
|
$675
|
|
$664
|
|
2%
|
|
2%
|
|
|
|
|
|
$2,527
|
|
$2,530
|
|
0%
|
|
2%
|
Global Injectables
|
|
|
|
522
|
|
487
|
|
7%
|
|
8%
|
|
|
|
|
|
2,075
|
|
2,004
|
|
4%
|
|
5%
|
IV Therapies
|
|
|
|
500
|
|
469
|
|
7%
|
|
8%
|
|
|
|
|
|
1,930
|
|
1,802
|
|
7%
|
|
10%
|
Infusion Systems
|
|
|
|
210
|
|
235
|
|
(11%)
|
|
(11%)
|
|
|
|
|
|
813
|
|
901
|
|
(10%)
|
|
(9%)
|
Anesthesia
|
|
|
|
140
|
|
147
|
|
(5%)
|
|
(5%)
|
|
|
|
|
|
545
|
|
537
|
|
1%
|
|
3%
|
Other 2 |
|
|
|
19
|
|
17
|
|
12%
|
|
0%
|
|
|
|
|
|
63
|
|
66
|
|
(5%)
|
|
(9%)
|
Total Medical Products 2 |
|
|
|
$2,066
|
|
$2,019
|
|
2%
|
|
3%
|
|
|
|
|
|
$7,953
|
|
$7,840
|
|
1%
|
|
4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Baxter
|
|
|
|
$3,753
|
|
$3,594
|
|
4%
|
|
5%
|
|
|
|
|
|
$14,190
|
|
$13,893
|
|
2%
|
|
5%
|
|
|
|
1 |
|
Principally includes vaccines and sales of plasma to third parties.
|
|
|
|
2 |
|
Includes revenues associated with manufacturing, distribution and
other services provided by the company to the buyer of the TT
business after the February 2007 divestiture, which had previously
been reported separately. The prior periods have been recast to
conform to the current period presentation.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BAXTER INTERNATIONAL INC.
|
Key Product Line Sales by U.S. and International
|
Three-Month Periods Ending December 31, 2012 and 2011
|
(unaudited)
|
($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q4 2012
|
|
|
|
|
|
Q4 2011
|
|
|
|
|
|
% Growth
|
|
|
|
|
|
U.S.
|
|
International
|
|
Total
|
|
|
|
|
|
U.S.
|
|
International
|
|
Total
|
|
|
|
|
|
U.S.
|
|
International
|
|
Total
|
BioScience
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Recombinants
|
|
|
|
$268
|
|
$313
|
|
$581
|
|
|
|
|
|
$246
|
|
$332
|
|
$578
|
|
|
|
|
|
9%
|
|
(6%)
|
|
1%
|
Antibody Therapy
|
|
|
|
317
|
|
108
|
|
425
|
|
|
|
|
|
290
|
|
116
|
|
406
|
|
|
|
|
|
9%
|
|
(7%)
|
|
5%
|
Plasma Proteins
|
|
|
|
121
|
|
326
|
|
447
|
|
|
|
|
|
106
|
|
291
|
|
397
|
|
|
|
|
|
14%
|
|
12%
|
|
13%
|
Regenerative Medicine
|
|
|
|
102
|
|
78
|
|
180
|
|
|
|
|
|
81
|
|
69
|
|
150
|
|
|
|
|
|
26%
|
|
13%
|
|
20%
|
Other 1 |
|
|
|
17
|
|
37
|
|
54
|
|
|
|
|
|
12
|
|
32
|
|
44
|
|
|
|
|
|
42%
|
|
16%
|
|
23%
|
Total BioScience
|
|
|
|
$825
|
|
$862
|
|
$1,687
|
|
|
|
|
|
$735
|
|
$840
|
|
$1,575
|
|
|
|
|
|
12%
|
|
3%
|
|
7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Medical Products
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Renal
|
|
|
|
$109
|
|
$566
|
|
$675
|
|
|
|
|
|
$96
|
|
$568
|
|
$664
|
|
|
|
|
|
14%
|
|
0%
|
|
2%
|
Global Injectables
|
|
|
|
252
|
|
270
|
|
522
|
|
|
|
|
|
232
|
|
255
|
|
487
|
|
|
|
|
|
9%
|
|
6%
|
|
7%
|
IV Therapies
|
|
|
|
182
|
|
318
|
|
500
|
|
|
|
|
|
166
|
|
303
|
|
469
|
|
|
|
|
|
10%
|
|
5%
|
|
7%
|
Infusion Systems
|
|
|
|
114
|
|
96
|
|
210
|
|
|
|
|
|
137
|
|
98
|
|
235
|
|
|
|
|
|
(17%)
|
|
(2%)
|
|
(11%)
|
Anesthesia
|
|
|
|
78
|
|
62
|
|
140
|
|
|
|
|
|
92
|
|
55
|
|
147
|
|
|
|
|
|
(15%)
|
|
13%
|
|
(5%)
|
Other 2 |
|
|
|
12
|
|
7
|
|
19
|
|
|
|
|
|
8
|
|
9
|
|
17
|
|
|
|
|
|
50%
|
|
(22%)
|
|
12%
|
Total Medical Products 2 |
|
|
|
$747
|
|
$1,319
|
|
$2,066
|
|
|
|
|
|
$731
|
|
$1,288
|
|
$2,019
|
|
|
|
|
|
2%
|
|
2%
|
|
2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Baxter
|
|
|
|
$1,572
|
|
$2,181
|
|
$3,753
|
|
|
|
|
|
$1,466
|
|
$2,128
|
|
$3,594
|
|
|
|
|
|
7%
|
|
2%
|
|
4%
|
|
|
|
1 |
|
Principally includes vaccines and sales of plasma to third parties.
|
|
|
|
2 |
|
Includes revenues associated with manufacturing, distribution and
other services provided by the company to the buyer of the TT
business after the February 2007 divestiture, which had previously
been reported separately. The prior period has been recast to
conform to the current period presentation.
|