What the changes say
- Baxter sold its Kidney Care business and reduced legacy debt to $9.48 billion while cutting its quarterly dividend.
- The company experienced supply chain disruptions, severe weather impacts from Hurricane Helene, and a leadership transition with a new CEO.
- Baxter added disclosures covering risks from integrating artificial intelligence and machine learning technologies across its operations and products.
What changed since the prior 10-K
New
- NewRisks Relating to Our Business and Financial Performance
We have undertaken several significant transactions, including the sale of our Kidney Care business and our acquisition of Hillrom, and we may fail to achieve the anticipated benefits of these transactions
Baxter faces potential disputes, tax exposures, and TSA/MSA complications following the January 2025 sale of its Kidney Care business to Carlyle and Vantive.
- NewRisks Relating to Our Business and Financial Performance
Our significant indebtedness requires us to use a substantial amount of our cash flow for debt service and constrains our ability to pursue growth strategies and advance our R&D capabilities
With $9.48 billion in debt as of December 31, 2025, debt service limits Baxter's R&D, capital expenditures, and led to a dividend cut to $0.01 per share.
- NewRisks Relating to Our Business and Financial Performance
We have experienced disruptions in our supply chain
Global supply chain challenges, including Hurricane Helene, component shortages in resins and electromechanical devices, and inflation, have disrupted production and increased costs.
- NewRisks Relating to Our Business and Financial Performance
Due to the nature of our products and the geographic locations of our manufacturing, storage and distribution facilities, we may be more susceptible to increases in freight costs and other supply chain challenges than certain of our industry peers
Baxter's product locations and facility footprints make it more vulnerable to freight cost increases and supply chain interruptions than industry peers.
- NewRisks Relating to Our Business and Financial Performance
Continued consolidation in the health care industry or additional governmental controls exerted over pricing and access in key markets could lead to increased demands for price concessions or limit or eliminate our ability to sell to certain of our significant market segments
Health care industry consolidation and regional tender pricing processes favor domestic companies or demand price concessions from multinational firms like Baxter.
- NewRisks Relating to Our Business and Financial Performance
Management transition creates uncertainties, and any difficulties we experience in managing such transitions, including attracting and retaining our key employees, could adversely affect our business and results of operations
Andrew Hider became President and CEO in July 2025, bringing leadership transition uncertainties and intense competition for healthcare talent.
- NewRisks Relating to Our Operations
response to economic conditions, regulatory requirements, seasonality, natural disasters, wars, acts of terrorism, pandemics, epidemics, and other matters
Unforeseen commodity cost spikes for raw materials and sub-assemblies cannot always be fully offset by higher product prices.
- NewRisks Relating to Our Operations
We may experience manufacturing, sterilization, supply, or distribution difficulties
Manufacturing complex devices and biologics creates risks of production failures, launch delays, and shortages under strict regulatory regimes.
- NewRisks Relating to Our Operations
We have experienced and may continue to experience issues with quality management or product quality
Imprecise demand forecasting can cause inventory oversupply or shortages, while quality management failures risk market share and customer confidence.
- NewRisks Relating to Our Operations
We are exposed to risks associated with incorporating AI, machine learning and other emerging technologies into our products, services and operations
Integrating internal and third-party AI and machine learning tools into products and operations exposes Baxter to technical, deployment, and cybersecurity risks.
- NewRisks Relating to Legal and Regulatory Matters
reform or other similar actions, cost containment measures, or there are changes to policies with respect to pricing, taxation, or rebates, our business could suffer
Working with public payers like Medicare, Medicaid, and foreign governments exposes Baxter to strict audits, reporting obligations, and funding risks.
- NewRisks Relating to Legal and Regulatory Matters
Changes to the tax laws in the U.S. or other countries in which we operate, such as the evolving two-pillared plan proposed by the Organization for Economic Cooperation & Development (OECD), could have an adverse effect on our operating results
Cross-border intra-company transfer pricing and OECD tax reforms create audit vulnerabilities and potential indemnity liabilities from past divestitures.
- NewRisks Relating to Our Common Stock
We recently decreased our quarterly dividend to $0.01 per share and cannot guarantee that we will increase the amount of dividends we pay, or that we will not cease paying dividends
Dropped
- DroppedRisks Relating to Our Recent and Ongoing Strategic Actions
regulations that could affect our remaining businesses; the potential for regulatory actions or investigations related to the transaction or the businesses involved; and potential negative reactions from the financial markets, ratings agencies, customers, employees, other personnel or other stakeholders
- DroppedRisks Relating to Our Recent and Ongoing Strategic Actions
We may continue to experience difficulties with our ongoing integration of Hillrom or fail to realize the anticipated benefits of the Hillrom acquisition
Organizational restructuring risks from the BPS divestiture, Hillrom integration, and cost-reduction initiatives.
- DroppedRisks Relating to Our Recent and Ongoing Strategic Actions
If our business strategy and development activities are unsuccessful, our business, results of operations, financial condition and cash flows could be adversely affected
Risks related to the ongoing integration of Hillrom completed in 2021.
- DroppedRisks Relating to Our Financial Performance and Our Common Stock
Our significant indebtedness requires us to use a substantial amount of our cash flow for debt service and could constrain our flexibility in responding to unanticipated or adverse business conditions and adversely affect our business, results of operations, financial condition and cash flows
Risks that future business development, joint ventures, or portfolio divestitures fail.
- DroppedRisks Relating to Our Financial Performance and Our Common Stock
We cannot guarantee that in the future we will not further reduce the amount of dividends we pay
- DroppedRisks Relating to Our Business
Issues with quality management or product quality could have an adverse effect on our business or cause a loss of customer confidence in us or our products, among other negative consequences
- DroppedRisks Relating to Our Business
contracts or for other reasons, or if we lose customers as a result of consolidation, our business, results of operations, financial condition and cash flows could be adversely affected
- DroppedRisks Relating to Our Business
If we fail to attract, develop, retain and engage key employees, including a permanent CEO and other members of our senior management, our business may suffer
- DroppedRisks Relating to Our Business
Pandemics and other public health emergencies, or the fear thereof, have had, and may in the future have, a material adverse effect on our business. The nature and extent of future impacts are uncertain and unpredictable
Prior debt level of $13.13 billion as of December 31, 2024 restricting financial flexibility.
- DroppedRisks Relating to Our Operations
endeavor, either alone or working closely with our suppliers, to ensure the continuity of our inputs and supplies, but these efforts may not always be successful
- DroppedRisks Relating to Our Operations
timely manner and such occurrences may damage our reputation and lead to decreased demand for our products and increased cost and expense to our business
- DroppedRisks Relating to Our Operations
In addition, Technology management issues arise from time-to-time as we continue to consolidate and outsource certain information technology support activities and certain computer operations and application support activities as a result of our ongoing business transformation activities and cost saving initiatives
Uncertainty regarding potential future reductions in quarterly dividend payouts.
- DroppedRisks Relating to Our Operations
Incorporating artificial intelligence, machine learning and other emerging technologies into our products, services and operations may result in legal and regulatory risks, reputational harm or have other adverse consequences to our business, financial condition or results of operations
- DroppedRisks Relating to Legal and Regulatory Matters
Changes in tax laws or exposure to additional income tax liabilities may have a negative impact on our operating results
Quality management issues impacting product demand and customer confidence.
Reworded
- 98% rewrittenRisks Relating to Our Business and Financial Performance
We are exposed to risks as a result of our strategic actions
Updated to state that following the Kidney Care and BPS divestitures and Hillrom acquisition, Baxter is smaller, less diversified, and more vulnerable to market volatility.
Was: We are exposed to risks as a result of our strategic actions, including the recent sale of our Kidney Care business
- 87% rewrittenRisks Relating to Our Operations
We may be unable to obtain sufficient components or raw materials on a timely basis or for a cost-effective price
Added specific mention of sole-source suppliers and the lengthy FDA approval process required to replace interrupted component vendors.
Was: If we are unable to obtain sufficient components or raw materials on a timely basis or for a cost-effective price or if we experience other manufacturing, sterilization, supply or distribution difficulties, our business, results of operations, financial condition and cash flows may be adversely affected
- 76% rewrittenRisks Relating to Legal and Regulatory Matters
Increasing regulatory focus on, and expanding laws relating to, privacy, AI, and cybersecurity could impact our business and expose us to increased liability
Expanded to emphasize that emerging global digital and technology laws create a complex regulatory interplay across multiple countries' AI and cybersecurity rules.
Was: Increasing regulatory focus on privacy, artificial intelligence and cybersecurity issues and expanding laws could impact our business and expose us to increased liability
- 73% rewrittenRisks Relating to Our Business and Financial Performance
There is substantial competition in the product markets in which we operate and the risk of declining demand and pricing pressures could adversely affect our business, results of operations, financial condition and cash flows
Added cash flow constraints and consistency of supply as key competitive factors impacting Baxter's market share.
- 72% rewrittenRisks Relating to Our Operations
We may experience breaches and breakdowns affecting our information technology systems or protected information, including from obsolescence, cyber security breaches and data leakage
Streamlined definitions of protected health information and internal confidential information relied upon across IT systems.
Was: Breaches and breakdowns affecting our information technology systems or protected information, including from obsolescence, cyber security breaches and data leakage, could have a material adverse effect on our business, results of operations, financial condition, cash flows, reputation and competitive position
- 64% rewrittenRisks Relating to Our Operations
Our commitments, goals, activities, and disclosures related to sustainability and corporate responsibility matters, and the perception of our activities in these areas, may fail to satisfy the differing expectations of key stakeholders on these matters
Shifted focus to sustainability and corporate responsibility goals being impacted by rapidly changing technological and market developments outside management's control.
Was: Our commitments, goals and disclosures related to corporate responsibility matters, and the perception of our activities in these areas, may adversely impact us, including through reputational harm
- 63% rewrittenRisks Relating to Our Business and Financial Performance
Global economic conditions, including inflation, have adversely affected, and could continue to adversely affect, our operations
Retained core language on global inflation and macroeconomic trends impacting operational results.
Was: Global economic conditions, including inflation and supply chain disruptions, have adversely affected, and could continue to adversely affect, our operations
- 63% rewrittenRisks Relating to Our Operations
The effects of climate change, including legal, regulatory, or market measures related to climate change and other sustainability topics, could adversely affect our business, results of operations, financial condition, and cash flows
Expanded climate change transition risks to explicitly include changing stakeholder expectations and lower carbon footprint demands.
Was: Climate change, or legal, regulatory or market measures to address climate change, could adversely affect our business, results of operations, financial condition and cash flows
- 60% rewrittenRisks Relating to Our Business and Financial Performance
We may not achieve our financial goals
- 58% rewrittenRisks Relating to Our Business and Financial Performance
Future material impairments in the value of our goodwill, intangible assets, and other long-lived assets would negatively affect our operating results
- 49% rewrittenRisks Relating to Our Business and Financial Performance
We may not be successful in achieving expected operating efficiencies and sustaining or improving operating expense reductions and may experience business disruptions and adverse tax consequences associated with restructuring initiatives
Was: We may not be successful in achieving expected operating efficiencies and sustaining or improving operating expense reductions and may experience business disruptions and adverse tax consequences associated with restructuring, realignment and cost reduction activities
- 46% rewrittenRisks Relating to Legal and Regulatory Matters
Public and private payers have challenged, and are expected to continue to challenge, prices charged for medical products and services. Such downward pricing pressures from any or all of these payers may result in an adverse effect on our business, results of operations, financial condition, and cash flows
- 45% rewrittenRisks Relating to Legal and Regulatory Matters
If we are unable to protect or enforce our patents or other proprietary rights, or if we become subject to claims or litigation alleging infringement of the patents or other proprietary rights of others, our competitiveness and business prospects may be materially damaged
- 42% rewrittenRisks Relating to Our Common Stock
Our common stock price has fluctuated significantly and may continue to do so in the future
- 36% rewrittenRisks Relating to Our Operations
We are subject to risks associated with doing business globally
- 36% rewrittenRisks Relating to Legal and Regulatory Matters
As a participant in the healthcare industry, our operations and products, and those of our customers, are regulated by numerous government agencies, both inside and outside the U.S
Was: As a participant in the healthcare industry, our operations and products, and those of our customers, are regulated by numerous government agencies, both inside and outside the United States
- 32% rewrittenRisks Relating to Our Business and Financial Performance
We may be unable to successfully introduce or monetize new and existing products or services or keep pace with changing consumer preferences and needs or advances in technology
Was: If we are unable to successfully introduce or monetize new and existing products or services, or fail to keep pace with changing consumer preferences and needs or advances in technology, our business, results of operations, financial condition and cash flows could be adversely affected
- 27% rewrittenRisks Relating to Our Business and Financial Performance
Our operating results and financial condition have fluctuated and may in the future continue to fluctuate
- 23% rewrittenRisks Relating to Our Operations
Segments of our business are significantly dependent on major contracts with GPOs, IDNs, and certain other distributors and purchasers
- 21% rewrittenRisks Relating to Legal and Regulatory Matters
We are party to a number of pending lawsuits and other disputes which may adversely impact us
Was: We are party to a number of pending lawsuits and other disputes which may have an adverse impact on our business, results of operations, financial condition and cash flows
All 37 risk factors
Headings as the filing states them, in filing order.
Risks Relating to Our Business and Financial Performance
- 01We are exposed to risks as a result of our strategic actions98% rewritten
- 02We have undertaken several significant transactions, including the sale of our Kidney Care business and our acquisition of Hillrom, and we may fail to achieve the anticipated benefits of these transactionsNew
- 03Our significant indebtedness requires us to use a substantial amount of our cash flow for debt service and constrains our ability to pursue growth strategies and advance our R&D capabilitiesNew
- 04There is substantial competition in the product markets in which we operate and the risk of declining demand and pricing pressures could adversely affect our business, results of operations, financial condition and cash flows73% rewritten
- 05We may be unable to successfully introduce or monetize new and existing products or services or keep pace with changing consumer preferences and needs or advances in technology32% rewritten
- 06We may not achieve our financial goals60% rewritten
- 07We have experienced disruptions in our supply chainNew
- 08Due to the nature of our products and the geographic locations of our manufacturing, storage and distribution facilities, we may be more susceptible to increases in freight costs and other supply chain challenges than certain of our industry peersNew
- 09Global economic conditions, including inflation, have adversely affected, and could continue to adversely affect, our operations63% rewritten
- 10We may not be successful in achieving expected operating efficiencies and sustaining or improving operating expense reductions and may experience business disruptions and adverse tax consequences associated with restructuring initiatives49% rewritten
- 11Continued consolidation in the health care industry or additional governmental controls exerted over pricing and access in key markets could lead to increased demands for price concessions or limit or eliminate our ability to sell to certain of our significant market segmentsNew
- 12Our operating results and financial condition have fluctuated and may in the future continue to fluctuate27% rewritten
- 13Management transition creates uncertainties, and any difficulties we experience in managing such transitions, including attracting and retaining our key employees, could adversely affect our business and results of operationsNew
- 14Changes in foreign currency exchange rates and interest rates have had, and may in the future have, an adverse effect on our results of operations, financial condition, cash flows, and liquidity
- 15Future material impairments in the value of our goodwill, intangible assets, and other long-lived assets would negatively affect our operating results58% rewritten
Risks Relating to Our Operations
- 16Segments of our business are significantly dependent on major contracts with GPOs, IDNs, and certain other distributors and purchasers23% rewritten
- 17We may be unable to obtain sufficient components or raw materials on a timely basis or for a cost-effective price87% rewritten
- 18response to economic conditions, regulatory requirements, seasonality, natural disasters, wars, acts of terrorism, pandemics, epidemics, and other mattersNew
- 19We may experience manufacturing, sterilization, supply, or distribution difficultiesNew
- 20We have experienced and may continue to experience issues with quality management or product qualityNew
- 21We may experience breaches and breakdowns affecting our information technology systems or protected information, including from obsolescence, cyber security breaches and data leakage72% rewritten
- 22We are exposed to risks associated with incorporating AI, machine learning and other emerging technologies into our products, services and operationsNew
- 23We are subject to risks associated with doing business globally36% rewritten
- 24A portion of our workforce is unionized, and we could face labor disruptions that would interfere with our operations
- 25The effects of climate change, including legal, regulatory, or market measures related to climate change and other sustainability topics, could adversely affect our business, results of operations, financial condition, and cash flows63% rewritten
- 26Our commitments, goals, activities, and disclosures related to sustainability and corporate responsibility matters, and the perception of our activities in these areas, may fail to satisfy the differing expectations of key stakeholders on these matters64% rewritten
Risks Relating to Legal and Regulatory Matters
- 27As a participant in the healthcare industry, our operations and products, and those of our customers, are regulated by numerous government agencies, both inside and outside the U.S36% rewritten
- 28reform or other similar actions, cost containment measures, or there are changes to policies with respect to pricing, taxation, or rebates, our business could sufferNew
- 29Public and private payers have challenged, and are expected to continue to challenge, prices charged for medical products and services. Such downward pricing pressures from any or all of these payers may result in an adverse effect on our business, results of operations, financial condition, and cash flows46% rewritten
- 30Increasing regulatory focus on, and expanding laws relating to, privacy, AI, and cybersecurity could impact our business and expose us to increased liability76% rewritten
- 31We are party to a number of pending lawsuits and other disputes which may adversely impact us21% rewritten
- 32We could be subject to fines or damages and possible exclusion from participation in federal or state healthcare programs if we fail to comply with the laws and regulations applicable to our business
- 33If we are unable to protect or enforce our patents or other proprietary rights, or if we become subject to claims or litigation alleging infringement of the patents or other proprietary rights of others, our competitiveness and business prospects may be materially damaged45% rewritten
- 34Changes to the tax laws in the U.S. or other countries in which we operate, such as the evolving two-pillared plan proposed by the Organization for Economic Cooperation & Development (OECD), could have an adverse effect on our operating resultsNew
- 35Our Amended and Restated Bylaws could limit our stockholders’ ability to choose their preferred judicial forum for disputes with us or our directors, officers, or employees
Risks Relating to Our Common Stock
- 36We recently decreased our quarterly dividend to $0.01 per share and cannot guarantee that we will increase the amount of dividends we pay, or that we will not cease paying dividendsNew
- 37Our common stock price has fluctuated significantly and may continue to do so in the future42% rewritten
Other Baxter International 10-Ks
- FY2024 10-K risk factors38 risks
Baxter faces major transformation risks from the Kidney Care divestiture, Hillrom integration, and high indebtedness of $13.13 billion.
Filed Feb 21, 2025
About this page
The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.