Cover Page
Cover Page - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2021 | Jan. 31, 2022 | Jun. 30, 2021 | |
Entity Information [Line Items] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2021 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 1-4448 | ||
Entity Registrant Name | Baxter International Inc. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 36-0781620 | ||
Entity Address, Address Line One | One Baxter Parkway, | ||
Entity Address, City or Town | Deerfield, | ||
Entity Address, State or Province | IL | ||
Entity Address, Postal Zip Code | 60015 | ||
City Area Code | 224 | ||
Local Phone Number | 948.2000 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 40 | ||
Entity Common Stock, Shares Outstanding | 502,293,624 | ||
Documents Incorporated by Reference | Portions of the registrant’s definitive 2022 proxy statement for use in connection with its Annual Meeting of Stockholders expected to be held on May 3, 2022 are incorporated by reference into Part III of this report. | ||
Entity Central Index Key | 0000010456 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2021 | ||
CHICAGO STOCK EXCHANGE, INC. | Common stock, $1.00 par value | |||
Entity Information [Line Items] | |||
Title of 12(b) Security | Common stock, $1.00 par value | ||
Trading Symbol | BAX (NYSE) | ||
Security Exchange Name | CHX | ||
NEW YORK STOCK EXCHANGE, INC. | Common stock, $1.00 par value | |||
Entity Information [Line Items] | |||
Title of 12(b) Security | Common stock, $1.00 par value | ||
Trading Symbol | BAX (NYSE) | ||
Security Exchange Name | NYSE | ||
NEW YORK STOCK EXCHANGE, INC. | 0.4% Global Notes due 2024 | |||
Entity Information [Line Items] | |||
Title of 12(b) Security | 0.4% Global Notes due 2024 | ||
Trading Symbol | BAX 24 | ||
Security Exchange Name | NYSE | ||
NEW YORK STOCK EXCHANGE, INC. | 1.3% Global Notes due 2025 | |||
Entity Information [Line Items] | |||
Title of 12(b) Security | 1.3% Global Notes due 2025 | ||
Trading Symbol | BAX 25 | ||
Security Exchange Name | NYSE | ||
NEW YORK STOCK EXCHANGE, INC. | 1.3% Global Notes due 2029 | |||
Entity Information [Line Items] | |||
Title of 12(b) Security | 1.3% Global Notes due 2029 | ||
Trading Symbol | BAX 29 | ||
Security Exchange Name | NYSE | ||
NEW YORK STOCK EXCHANGE, INC. | 3.95% Global Notes due 2030 | |||
Entity Information [Line Items] | |||
Title of 12(b) Security | 3.95% Global Notes due 2030 | ||
Trading Symbol | BAX 30 | ||
Security Exchange Name | NYSE | ||
NEW YORK STOCK EXCHANGE, INC. | 1.73% Global Notes due 2031 | |||
Entity Information [Line Items] | |||
Title of 12(b) Security | 1.73% Global Notes due 2031 | ||
Trading Symbol | BAX 31 | ||
Security Exchange Name | NYSE |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2021 | |
Audit Information [Abstract] | |
Auditor Name | PricewaterhouseCoopers LLP |
Auditor Location | Chicago, Illinois |
Auditor Firm ID | 238 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 2,951 | $ 3,730 |
Accounts receivable, net of allowance of $122 in 2021 and $125 in 2020 | 2,629 | 2,007 |
Inventories | 2,453 | 1,916 |
Prepaid expenses and other current assets | 839 | 758 |
Total current assets | 8,872 | 8,411 |
Property, plant and equipment, net | 5,178 | 4,722 |
Goodwill | 9,836 | 3,217 |
Other intangible assets | 7,792 | 1,671 |
Operating lease right-of-use assets | 630 | 603 |
Other non-current assets | 1,213 | 1,395 |
Total assets | 33,521 | 20,019 |
Current liabilities: | ||
Short-term debt | 301 | 0 |
Current maturities of long-term debt and finance lease obligations | 210 | 406 |
Accounts payable | 1,246 | 1,043 |
Accrued expenses and other current liabilities | 2,479 | 1,884 |
Total current liabilities | 4,236 | 3,333 |
Long-term debt and finance lease obligations | 17,149 | 5,786 |
Operating lease liabilities | 522 | 501 |
Other non-current liabilities | 2,493 | 1,673 |
Total liabilities | 24,400 | 11,293 |
Commitments and contingencies | ||
Equity: | ||
Common stock, $1 par value, authorized 2,000,000,000 shares, issued 683,494,944 shares in 2021 and 2020 | 683 | 683 |
Common stock in treasury, at cost, 181,879,516 shares in 2021 and 178,580,208 shares in 2020 | (11,488) | (11,051) |
Additional contributed capital | 6,197 | 6,043 |
Retained earnings | 17,065 | 16,328 |
Accumulated other comprehensive (loss) income | (3,380) | (3,314) |
Total Baxter stockholders’ equity | 9,077 | 8,689 |
Noncontrolling interests | 44 | 37 |
Total equity | 9,121 | 8,726 |
Total liabilities and equity | $ 33,521 | $ 20,019 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 122 | $ 125 |
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) | 181,879,516 | 178,580,208 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Statement [Abstract] | |||
Net sales | $ 12,784 | $ 11,673 | $ 11,362 |
Cost of sales | 7,679 | 7,086 | 6,601 |
Gross margin | 5,105 | 4,587 | 4,761 |
Selling, general and administrative expenses | 2,867 | 2,469 | 2,535 |
Research and development expenses | 534 | 521 | 595 |
Other operating income, net | (6) | (19) | (141) |
Operating income | 1,710 | 1,616 | 1,772 |
Interest Income (Expense), Net | 192 | 134 | 71 |
Other expense, net | 41 | 190 | 731 |
Income before income taxes | 1,477 | 1,292 | 970 |
Income tax expense (benefit) | (182) | (182) | 41 |
Net income | 1,295 | 1,110 | 1,011 |
Net income attributable to noncontrolling interests | 11 | 8 | 10 |
Net income attributable to Baxter stockholders | $ 1,284 | $ 1,102 | $ 1,001 |
Earnings per share | |||
Basic (in dollars per share) | $ 2.56 | $ 2.17 | $ 1.97 |
Diluted (in dollars per share) | $ 2.53 | $ 2.13 | $ 1.93 |
Weighted-average number of shares outstanding | |||
Basic (in shares) | 502 | 509 | 509 |
Diluted (in shares) | 508 | 517 | 519 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 1,295 | $ 1,110 | $ 1,011 |
Other comprehensive (loss) income, net of tax: | |||
Currency translation adjustments, net of tax expense (benefit) of $30 in 2021, ($51) in 2020 and $(5) in 2019 | (320) | 367 | (95) |
Pension and other postretirement benefit plans, net of tax expense of $60 in 2021 $40 in 2020 and $130 in 2019 | 227 | 141 | 408 |
Hedging activities, net of tax expense (benefit) of $7 in 2021, $(34) in 2020 and ($11) in 2019 | 27 | (112) | (39) |
Total other comprehensive (loss) income, net of tax | (66) | 396 | 274 |
Comprehensive income | 1,229 | 1,506 | 1,285 |
Less: Comprehensive income attributable to noncontrolling interests | 11 | 8 | 10 |
Comprehensive income attributable to Baxter stockholders | $ 1,218 | $ 1,498 | $ 1,275 |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Statement of Comprehensive Income [Abstract] | |||
Currency translation adjustments, tax | $ 30 | $ (51) | $ (5) |
Pension and other postretirement benefits, tax | 60 | 40 | 130 |
Hedging activities, tax | $ 7 | $ (34) | $ (11) |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - USD ($) | Total | Cumulative Effect, Period of Adoption, Adjustment | Common stock | Common stock in treasury | Additional contributed capital | Retained earnings | Retained earningsCumulative Effect, Period of Adoption, Adjustment | Accumulated other comprehensive income (loss) | Accumulated other comprehensive income (loss)Cumulative Effect, Period of Adoption, Adjustment | Total Baxter stockholders' equity | Total Baxter stockholders' equityCumulative Effect, Period of Adoption, Adjustment | Noncontrolling interests |
Beginning of year (in shares) at Dec. 31, 2018 | 683,000,000 | |||||||||||
Beginning of year at Dec. 31, 2018 | $ 7,866,000,000 | $ 0 | $ 683,000,000 | $ (9,989,000,000) | $ 5,898,000,000 | $ 15,075,000,000 | $ 161,000,000 | $ (3,823,000,000) | $ (161,000,000) | $ 7,844,000,000 | $ 0 | $ 22,000,000 |
Beginning of year (in shares) at Dec. 31, 2018 | 170,000,000 | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Net income | 1,011,000,000 | 1,001,000,000 | 1,001,000,000 | 10,000,000 | ||||||||
Other comprehensive income (loss) | $ 274,000,000 | 274,000,000 | 274,000,000 | |||||||||
Purchases of common stock (in shares) | 16,500,000 | 16,000,000 | ||||||||||
Purchases of treasury stock | $ (1,247,000,000) | $ (1,293,000,000) | 46,000,000 | (1,247,000,000) | ||||||||
Stock issued under employee benefit plans and other (in shares) | (9,000,000) | |||||||||||
Stock issued under employee benefit plans and other | (445,000,000) | $ (518,000,000) | (11,000,000) | (84,000,000) | (445,000,000) | |||||||
Dividends declared on common stock | (435,000,000) | (435,000,000) | (435,000,000) | |||||||||
Changes in noncontrolling interests | (2,000,000) | (2,000,000) | ||||||||||
End of year (in shares) at Dec. 31, 2019 | 683,000,000 | |||||||||||
End of year at Dec. 31, 2019 | 7,912,000,000 | $ (4,000,000) | $ 683,000,000 | $ (10,764,000,000) | 5,955,000,000 | 15,718,000,000 | $ (4,000,000) | (3,710,000,000) | $ 0 | 7,882,000,000 | $ (4,000,000) | 30,000,000 |
End of year (in shares) at Dec. 31, 2019 | 177,000,000 | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Net income | 1,110,000,000 | 1,102,000,000 | 1,102,000,000 | 8,000,000 | ||||||||
Other comprehensive income (loss) | $ 396,000,000 | 396,000,000 | 396,000,000 | |||||||||
Purchases of common stock (in shares) | 6,300,000 | 6,000,000 | ||||||||||
Purchases of treasury stock | $ (500,000,000) | $ (500,000,000) | 0 | (500,000,000) | ||||||||
Stock issued under employee benefit plans and other (in shares) | (4,000,000) | |||||||||||
Stock issued under employee benefit plans and other | (301,000,000) | $ (213,000,000) | (88,000,000) | 0 | (301,000,000) | |||||||
Dividends declared on common stock | (488,000,000) | (488,000,000) | (488,000,000) | |||||||||
Changes in noncontrolling interests | $ (1,000,000) | (1,000,000) | ||||||||||
End of year (in shares) at Dec. 31, 2020 | 683,494,944 | 683,000,000 | ||||||||||
End of year at Dec. 31, 2020 | $ 8,726,000,000 | $ 683,000,000 | $ (11,051,000,000) | 6,043,000,000 | 16,328,000,000 | (3,314,000,000) | 8,689,000,000 | 37,000,000 | ||||
End of year (in shares) at Dec. 31, 2020 | 178,580,208 | 179,000,000 | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Net income | $ 1,295,000,000 | 1,284,000,000 | 1,284,000,000 | 11,000,000 | ||||||||
Other comprehensive income (loss) | $ (66,000,000) | (66,000,000) | (66,000,000) | |||||||||
Purchases of common stock (in shares) | 7,300,000 | 7,000,000 | ||||||||||
Purchases of treasury stock | $ (600,000,000) | $ (600,000,000) | 0 | (600,000,000) | ||||||||
Stock issued under employee benefit plans and other (in shares) | (4,000,000) | |||||||||||
Stock issued under employee benefit plans and other | (317,000,000) | $ (163,000,000) | (154,000,000) | 0 | (317,000,000) | |||||||
Dividends declared on common stock | (547,000,000) | (547,000,000) | (547,000,000) | |||||||||
Changes in noncontrolling interests | $ (4,000,000) | (4,000,000) | ||||||||||
End of year (in shares) at Dec. 31, 2021 | 683,494,944 | 683,000,000 | ||||||||||
End of year at Dec. 31, 2021 | $ 9,121,000,000 | $ 683,000,000 | $ (11,488,000,000) | $ 6,197,000,000 | $ 17,065,000,000 | $ (3,380,000,000) | $ 9,077,000,000 | $ 44,000,000 | ||||
End of year (in shares) at Dec. 31, 2021 | 181,879,516 | 182,000,000 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | ||
Cash flows from operations | ||||
Net income | $ 1,295,000,000 | $ 1,110,000,000 | $ 1,011,000,000 | |
Adjustments to reconcile net income to net cash from operating activities: | ||||
Depreciation and amortization | 890,000,000 | 823,000,000 | 789,000,000 | |
Pension settlement charges | 2,000,000 | 46,000,000 | 755,000,000 | |
Net periodic pension benefit and other postretirement costs | 99,000,000 | 81,000,000 | 22,000,000 | |
Deferred income taxes | (146,000,000) | (88,000,000) | (310,000,000) | |
Stock compensation | 146,000,000 | 130,000,000 | 122,000,000 | |
Loss on debt extinguishment | 5,000,000 | 110,000,000 | 0 | |
Intangible asset impairments | 0 | 17,000,000 | 31,000,000 | |
Settlement of interest rate derivative contracts | 0 | (173,000,000) | 0 | |
Other | 92,000,000 | 86,000,000 | 115,000,000 | |
Changes in balance sheet items: | ||||
Accounts receivable, net | (170,000,000) | (119,000,000) | (52,000,000) | |
Inventories | (37,000,000) | (162,000,000) | 4,000,000 | |
Prepaid expenses and other current assets | (41,000,000) | (37,000,000) | (31,000,000) | |
Accounts payable | 104,000,000 | 57,000,000 | (23,000,000) | |
Accrued expenses and other current liabilities | 108,000,000 | 86,000,000 | (196,000,000) | |
Other | (125,000,000) | (97,000,000) | (127,000,000) | |
Cash flows from operations – continuing operations | 2,222,000,000 | 1,870,000,000 | 2,110,000,000 | |
Cash flows from operations – discontinued operations | 0 | (2,000,000) | (6,000,000) | |
Cash flows from operations | 2,222,000,000 | 1,868,000,000 | 2,104,000,000 | |
Cash flows from investing activities | ||||
Capital expenditures | (743,000,000) | (709,000,000) | (696,000,000) | |
Acquisitions, net of cash acquired, and investments | (10,502,000,000) | (494,000,000) | (418,000,000) | |
Other investing activities, net | 45,000,000 | 24,000,000 | 14,000,000 | |
Cash flows from investing activities | (11,200,000,000) | (1,179,000,000) | (1,100,000,000) | |
Cash flows from financing activities | ||||
Issuances of debt | 11,903,000,000 | 1,885,000,000 | 1,661,000,000 | |
Repayments of debt | (2,823,000,000) | (1,181,000,000) | 0 | |
Net increase (decrease) in debt with original maturities of three months or less | 246,000,000 | (226,000,000) | 222,000,000 | |
Cash dividends on common stock | (530,000,000) | (473,000,000) | (423,000,000) | |
Proceeds from stock issued under employee benefit plans | 187,000,000 | 202,000,000 | 356,000,000 | |
Purchases of treasury stock | (600,000,000) | (500,000,000) | (1,270,000,000) | |
Debt issuance costs | (98,000,000) | (5,000,000) | (2,000,000) | |
Other financing activities, net | (40,000,000) | (47,000,000) | (46,000,000) | |
Cash flows from financing activities | 8,245,000,000 | (345,000,000) | 498,000,000 | |
Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash | (47,000,000) | 57,000,000 | (5,000,000) | |
Increase (decrease) in cash, cash equivalents and restricted cash | (780,000,000) | 401,000,000 | 1,497,000,000 | |
Cash, cash equivalents and restricted cash at beginning of year | [1] | 3,736,000,000 | 3,335,000,000 | 1,838,000,000 |
Cash, cash equivalents and restricted cash at end of year | [1] | 2,956,000,000 | 3,736,000,000 | $ 3,335,000,000 |
Cash and cash equivalents | 2,951,000,000 | 3,730,000,000 | ||
Restricted cash included in prepaid expenses and other current assets | $ 5,000,000 | $ 6,000,000 | ||
[1] | We did not have restricted cash balances as of December 31, 2019. The following table provides a reconciliation of cash, cash equivalents and restricted cash amounts as shown in the consolidated statement of cash flows to the amount reported in the consolidated balance sheet as of December 31, 2021 and 2020: As of December 31 (in millions) 2021 2020 Cash and cash equivalents $ 2,951 $ 3,730 Restricted cash included in prepaid expenses and other current assets 5 6 Cash, cash equivalents and restricted cash $ 2,956 $ 3,736 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 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. Risks and Uncertainties Related to 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, including as a result of impacts associated with preventive and precautionary measures that we, other businesses and governments have taken and continue to take. Initial measures taken in 2020 led to unprecedented restrictions on, disruptions in, and other related impacts on business and personal activities, including a shift in healthcare priorities, which resulted in a significant decline in medical procedures in 2020. The pandemic has created 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. For example, concerns remain regarding the pace of economic recovery due to virus resurgence across the globe from the Omicron and Delta variants and other virus mutations as well as vaccine distribution and hesitancy. The U.S. and other governments may continue existing measures or implement new restrictions and other requirements in light of the continuing spread of the pandemic (including with respect to mandatory vaccinations for certain of our employees and moratoriums on elective procedures). Due to the uncertainty caused by the pandemic, our operating performance and financial results, particularly in the short term, may be subject to volatility. We have experienced significant challenges, including lengthy delays, shortages and interruptions, posed by the pandemic and other exogenous factors (including significant weather events and disruptions to certain ports of call around the world) to our global supply chain, including the cost and availability of raw materials and component parts (including resins and electromechanical devices) and higher transportation costs, and may experience these and other challenges in future periods. Many of our manufacturing plant and distribution center personnel are currently unvaccinated, and we may also experience employee resistance in complying with current and future government vaccine and testing mandates, which may cause labor shortages significantly impacting manufacturing production and distribution center productivity. We expect that these challenges as well as evolving governmental restrictions and requirements, among other factors, may continue to have an adverse effect on our business. 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 reported amounts and related disclosures. Actual results could differ from those estimates. Basis of Presentation The consolidated financial statements include the accounts of Baxter and our majority-owned subsidiaries that we control, after elimination of intra-company transactions. Certain reclassifications have been made to conform the prior period consolidated financial statements to the current period presentation. On December 13, 2021, we completed the previously announced acquisition of all outstanding equity interests of Hill-Rom Holdings, Inc. (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. Beginning December 13, 2021, our financial statements include the assets, liabilities and operating results of Hillrom. Refer to Note 2 for additional information. On July 29, 2021, we acquired certain assets related to PerClot Polysaccharide Hemostatic System (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. Beginning July 29, 2021, our financial statements include the assets, liabilities and operating results of PerClot. Refer to Note 2 for additional information. On March 31, 2021, we acquired the rights to Transderm Scop (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. Beginning on March 31, 2021, our financial statements include the assets, liabilities and operating results of TDS. Refer to Note 2 for additional information. 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 for approximately $325 million in cash. Beginning February 17, 2021, our financial statements include the assets, liabilities and operating results of Caelyx and Doxil. Refer to Note 2 for additional information. 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 . Beginning February 14, 2020, our financial statements include the assets, liabilities and operating results of Seprafilm. Refer to Note 2 for additional information. On October 25, 2019, we acquired 100 percent of Cheetah Medical, Inc. (Cheetah) for total cash consideration of $188 million, net of cash acquired, with the potential for additional cash consideration, up to $40 million, based on clinical and commercial milestones for which the acquisition date fair value was $18 million. Beginning October 25, 2019, our financial statements include the assets, liabilities and operating results of Cheetah. Refer to Note 2 for additional information. 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. The majority of our performance obligations are satisfied at a point in time. This includes sales of our broad portfolio of essential healthcare products across our 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. For a majority 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, in all of our segments, we enter into other types of contracts, including contract manufacturing arrangements, 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 when 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, 2021, we had $7.8 billion of transaction price allocated to remaining performance obligations related to executed contracts with an original duration of one year or more, 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 2022, 30% in 2023, 15% in each of 2024 and 2025, and 5% in 2026. 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 and wholesaler chargebacks. 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 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 that is probable not to result in a significant reversal in the amount of the cumulative revenue recognized in a future period. Revenue recognized in the years ended December 31, 2021, 2020 and 2019 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 they are uncollectible. The following table summarizes the allowance for doubtful accounts. years ended December 31 2021 2020 Balance at beginning of period $ 125 $ 112 Acquisition 13 — Adoption of new accounting standard — 4 Charged to costs and expenses (2) 11 Write-offs (5) (4) Currency translation adjustments (9) 2 Balance at end of period $ 122 $ 125 Shipping and Handling Costs Shipping costs, which are 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 $381 million in 2021, $325 million in 2020 and $324 million in 2019 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 three 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 the excess of the purchase price over the fair value 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 2021, we changed the measurement date of our annual goodwill impairment test from December 31st to November 1st. 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 trademarks 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 31st to November 1st. 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. We review the carrying amounts of long-lived assets, 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 impairment exists, an impairment charge is recorded as the amount by which the carrying amount of the asset or asset group exceeds the fair value. 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 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 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 line in the consolidated statements of income. Foreign Currency Translation Currency translation adjustments (CTA) related to foreign operations are included in other comprehensive income (OCI). For foreign operations in highly inflationary economies, translation gains and losses are included in other expense, net, and were not material in 2021, 2020 and 2019. Derivatives and Hedging Activities All derivative instruments are recognized as either assets or liabilities at fair value in the consolidated balance sheets and are generally 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 (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 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. Refer to Note 15 for further information regarding our derivative and hedging activities. New Accounting Standards Recently issued accounting standards not yet adopted In July 2021, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (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 standard is effective for our financial statements beginning in 2022. 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 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. As of January 1, 2020, we adopted ASU No. 2018-15, Intangibles-Goodwill and Other-Internal-Use Software, which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. Our policies for capitalizing implementation costs incurred in a hosting arrangement were not impacted by this ASU. However, we have historically classified those capitalized costs within property, plant and equipment, net on our consolidated balance sheets and as capital expenditures on our consolidated statements of cash flows. Under the new ASU, those capitalized costs are presented as other non-current assets on our consolidated balance sheets and within operating cash flows on our consolidated statements of cash flows. We adopted this ASU on a prospective basis and capitalized $45 million and $44 million of implementation costs related to hosting arrangements that are service contracts during the years ended December 31, 2021 and 2020, respectively. As of January 1, 2020, we adopted ASU No. 2017-04, Intangibles – Goodwill and Other, Simplifying the Test for Goodwill Impairment. This standard eliminates Step 2 of the goodwill impairment test and requires a goodwill impairment to be measured as the amount by which a reporting unit’s carrying amount exceeds its fair value, not to exceed the carrying amount of its goodwill. The adoption of this standard did not impact our consolidated financial statements. As of January 1, 2020, we adopted ASU No. 2018-14, Compensation – Retirement Benefits – Defined Benefit Plans – General (Topic 715-20): Disclosure Framework – Changes to the Disclosure Requirements for Defined Benefit Plans. This ASU amends ASC 715 to remove certain disclosures, clarify certain existing disclosures and add additional disclosures. The adoption of this standard did not have a material impact on our consolidated financial statements. As of January 1, 2019, we adopted ASU No. 2016-02, Leases (Topic 842). Under this guidance, lessees are required to recognize a right-of-use asset and a lease liability on the balance sheet for all operating leases, other than those that meet the definition of a short-term lease. We adopted Topic 842 using the modified retrospective method. We elected the following practical expedients |
ACQUISITIONS AND OTHER ARRANGEM
ACQUISITIONS AND OTHER ARRANGEMENTS | 12 Months Ended |
Dec. 31, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
ACQUISITIONS AND OTHER ARRANGEMENTS | ACQUISITIONS AND OTHER ARRANGEMENTS Results of operations of acquired companies are included in our results of operations 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 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 the previously announced 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. Prior to our acquisition of Hillrom, 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: (in millions) Cash consideration paid to Hillrom shareholders (a) $ 10,474 Fair value of equity awards issued to Hillrom equity award holders (b) 2 Total Consideration $ 10,476 (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 has not yet been finalized as of December 31, 2021. As a result, we recorded preliminary estimates for the fair value of assets acquired and liabilities assumed as of the acquisition date. Finalization of the valuation during the measurement period could result in a change in the amounts recorded for the acquisition date fair value of intangible assets, goodwill and income taxes among other items. The completion of the valuation will occur no later than one year from the acquisition date. The following table summarizes the preliminary fair values of the assets acquired and liabilities assumed as of the acquisition date: (in millions) Assets acquired and liabilities assumed Cash and cash equivalents $ 399 Accounts receivable 591 Inventories 560 Prepaid expenses and other current assets 49 Property, plant and equipment 503 Goodwill 6,785 Other intangible assets 6,022 Operating lease right-of-use assets 74 Other non-current assets 128 Short-term debt (250) Accounts payable (140) Accrued expenses and other current liabilities (552) Long-term debt and finance lease obligations (2,118) Operating lease liabilities (57) Other non-current liabilities (1,518) Total assets acquired and liabilities assumed $ 10,476 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. The results of operations of the acquired business have been included in our consolidated statement of income since the date the business was acquired. The Hillrom acquisition contributed $212 million of net sales and a $96 million of pretax loss, including integration costs and interest expense on acquisition financing, for the year ended December 31, 2021. Costs directly resulting from the Hillrom acquisition, included acquisition and integration costs of $139 million and the incremental cost of sales relating to inventory fair value step-ups of $42 million in 2021. 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: years ended December 31 (in millions) 2021 2020 Net sales $ 15,574 $ 14,610 Net income attributable to Baxter stockholders 962 635 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: (in millions) Cash $ 25 Contingent Consideration 28 Total Consideration $ 53 The following table summarizes the fair value of the assets acquired as of the acquisition date: (in millions) Assets acquired Goodwill $ 4 Other intangible assets 49 Total assets acquired $ 53 The valuation of the assets acquired are preliminary and measurement period adjustments may be recorded in the future as we finalize our fair value estimates. The results of operations of the acquired business have been included in our consolidated statement of income 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 in-process research and development (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. W e 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: (in millions) Cash $ 60 Contingent Consideration 24 Total Consideration $ 84 The following table summarizes the fair value of the assets acquired as of the acquisition date: (in millions) Assets acquired Inventory $ 16 Goodwill 1 Other intangible assets 67 Total assets acquired $ 84 The results of operations of the acquired business have been included in our consolidated statement of income 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: (in millions) Assets acquired Inventories $ 18 Goodwill 28 Other intangible assets 296 Total assets acquired $ 342 The results of operations of the acquired business have been included in our consolidated statement of income 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. Cheetah Medical, Inc. On October 25, 2019, we acquired 100 percent of Cheetah Medical, Inc. (Cheetah), a leading provider of hemodynamic monitoring technologies, for total upfront cash consideration of $195 million, net of cash acquired, with the potential for additional cash consideration, up to $40 million, based on clinical and commercial milestones for which the acquisition date fair value was $18 million. In 2020, we received $7 million from the sellers as a result of an acquisition price adjustment in accordance with the acquisition agreement. The fair value of the potential contingent consideration payments was estimated by applying a probability-weighted expected payment model for the clinical milestone and a Monte Carlo simulation model for the commercial milestone, which were then discounted to present value. The fair value measurements were based on Level 3 inputs. The following table summarizes the fair value of consideration transferred: (in millions) Cash consideration transferred $ 190 Contingent consideration 18 Total consideration $ 208 The following table summarizes the fair values of the assets acquired and liabilities assumed as of the acquisition date: (in millions) Assets acquired and liabilities assumed Cash $ 2 Accounts receivable, net 3 Inventories 1 Prepaid expenses and other current assets 1 Property, plant and equipment 1 Goodwill 84 Other intangible assets 131 Operating lease right-of-use assets 1 Accounts payable and accrued liabilities (4) Other non-current liabilities (12) Total assets acquired and liabilities assumed $ 208 The results of operations of the acquired business have been included in our consolidated statement of income since the date the business was acquired and were not significant. Acquisition and integration costs associated with the acquisition were $5 million and $3 million in 2020 and 2019, respectively. We allocated $123 million of the total consideration to the developed product rights with a weighted-average useful life of 15 years and $8 million to customer relationships with a useful life of 13 years. The fair values of the intangible assets were determined using the income approach. The discount rates used to measure the intangible assets were 11.0% for developed product rights and 10.0% for customer relationships. 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 values. The goodwill, which is not deductible for tax purposes, includes the value of potential future technologies as well as the overall strategic benefits provided to our product portfolio and is included primarily in the Americas segment. Other Business Combinations Total consideration transferred for other acquisitions totaled $21 million, $18 million and $10 million in 2021, 2020 and 2019, 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 2021, 2020 or 2019 acquisitions because their results are not material to our consolidated financial statements. Other Business Development Activities 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. Celerity Pharmaceuticals, LLC In September 2013, we entered into an agreement with Celerity Pharmaceutical, LLC (Celerity) to develop certain acute care generic injectable premix and oncolytic products through regulatory approval. We transferred our rights in these products to Celerity and Celerity assumed ownership and responsibility for development of the products. We are obligated to purchase the individual product rights from Celerity if the products obtain regulatory approval. We did not purchase any product rights from Celerity in 2021 or 2020. In 2019, we paid $86 million to acquire the rights to various products that have received regulatory approval. We capitalized the purchase prices of products that were purchased upon regulatory approval as intangible assets and are amortizing the assets over their estimated useful lives of 12 years. As of December 31, 2021, our contingent future payments total up to $77 million upon Celerity’s achievement of specified regulatory approvals. In December 2020, we entered into an agreement with a third party to divest one of the products that is currently being developed by Celerity if that product receives regulatory approval in the U.S. and/or European Union. If regulatory approval is obtained, we would incur a loss ranging from $30 million to $60 million for the difference between our purchase price and the divestiture proceeds in connection with that transaction. 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. We could make additional payments of up to $35 million upon the achievement of certain development, regulatory or commercial milestones. During 2019, we acquired the rights to multiple products for an aggregate purchase price of $80 million. The purchase prices were capitalized primarily as developed-technology intangible assets and are being amortized over a weighted-average useful life of 10 years. 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 $19 million upon the achievement of certain development and regulatory milestones, in addition to future payments related to contingent commercialization milestones, profit-sharing and royalties. |
ACQUISITIONS AND OTHER ARRANGEMENTS | ACQUISITIONS AND OTHER ARRANGEMENTS Results of operations of acquired companies are included in our results of operations 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 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 the previously announced 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. Prior to our acquisition of Hillrom, 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: (in millions) Cash consideration paid to Hillrom shareholders (a) $ 10,474 Fair value of equity awards issued to Hillrom equity award holders (b) 2 Total Consideration $ 10,476 (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 has not yet been finalized as of December 31, 2021. As a result, we recorded preliminary estimates for the fair value of assets acquired and liabilities assumed as of the acquisition date. Finalization of the valuation during the measurement period could result in a change in the amounts recorded for the acquisition date fair value of intangible assets, goodwill and income taxes among other items. The completion of the valuation will occur no later than one year from the acquisition date. The following table summarizes the preliminary fair values of the assets acquired and liabilities assumed as of the acquisition date: (in millions) Assets acquired and liabilities assumed Cash and cash equivalents $ 399 Accounts receivable 591 Inventories 560 Prepaid expenses and other current assets 49 Property, plant and equipment 503 Goodwill 6,785 Other intangible assets 6,022 Operating lease right-of-use assets 74 Other non-current assets 128 Short-term debt (250) Accounts payable (140) Accrued expenses and other current liabilities (552) Long-term debt and finance lease obligations (2,118) Operating lease liabilities (57) Other non-current liabilities (1,518) Total assets acquired and liabilities assumed $ 10,476 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. The results of operations of the acquired business have been included in our consolidated statement of income since the date the business was acquired. The Hillrom acquisition contributed $212 million of net sales and a $96 million of pretax loss, including integration costs and interest expense on acquisition financing, for the year ended December 31, 2021. Costs directly resulting from the Hillrom acquisition, included acquisition and integration costs of $139 million and the incremental cost of sales relating to inventory fair value step-ups of $42 million in 2021. 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: years ended December 31 (in millions) 2021 2020 Net sales $ 15,574 $ 14,610 Net income attributable to Baxter stockholders 962 635 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: (in millions) Cash $ 25 Contingent Consideration 28 Total Consideration $ 53 The following table summarizes the fair value of the assets acquired as of the acquisition date: (in millions) Assets acquired Goodwill $ 4 Other intangible assets 49 Total assets acquired $ 53 The valuation of the assets acquired are preliminary and measurement period adjustments may be recorded in the future as we finalize our fair value estimates. The results of operations of the acquired business have been included in our consolidated statement of income 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 in-process research and development (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. W e 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: (in millions) Cash $ 60 Contingent Consideration 24 Total Consideration $ 84 The following table summarizes the fair value of the assets acquired as of the acquisition date: (in millions) Assets acquired Inventory $ 16 Goodwill 1 Other intangible assets 67 Total assets acquired $ 84 The results of operations of the acquired business have been included in our consolidated statement of income 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: (in millions) Assets acquired Inventories $ 18 Goodwill 28 Other intangible assets 296 Total assets acquired $ 342 The results of operations of the acquired business have been included in our consolidated statement of income 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. Cheetah Medical, Inc. On October 25, 2019, we acquired 100 percent of Cheetah Medical, Inc. (Cheetah), a leading provider of hemodynamic monitoring technologies, for total upfront cash consideration of $195 million, net of cash acquired, with the potential for additional cash consideration, up to $40 million, based on clinical and commercial milestones for which the acquisition date fair value was $18 million. In 2020, we received $7 million from the sellers as a result of an acquisition price adjustment in accordance with the acquisition agreement. The fair value of the potential contingent consideration payments was estimated by applying a probability-weighted expected payment model for the clinical milestone and a Monte Carlo simulation model for the commercial milestone, which were then discounted to present value. The fair value measurements were based on Level 3 inputs. The following table summarizes the fair value of consideration transferred: (in millions) Cash consideration transferred $ 190 Contingent consideration 18 Total consideration $ 208 The following table summarizes the fair values of the assets acquired and liabilities assumed as of the acquisition date: (in millions) Assets acquired and liabilities assumed Cash $ 2 Accounts receivable, net 3 Inventories 1 Prepaid expenses and other current assets 1 Property, plant and equipment 1 Goodwill 84 Other intangible assets 131 Operating lease right-of-use assets 1 Accounts payable and accrued liabilities (4) Other non-current liabilities (12) Total assets acquired and liabilities assumed $ 208 The results of operations of the acquired business have been included in our consolidated statement of income since the date the business was acquired and were not significant. Acquisition and integration costs associated with the acquisition were $5 million and $3 million in 2020 and 2019, respectively. We allocated $123 million of the total consideration to the developed product rights with a weighted-average useful life of 15 years and $8 million to customer relationships with a useful life of 13 years. The fair values of the intangible assets were determined using the income approach. The discount rates used to measure the intangible assets were 11.0% for developed product rights and 10.0% for customer relationships. 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 values. The goodwill, which is not deductible for tax purposes, includes the value of potential future technologies as well as the overall strategic benefits provided to our product portfolio and is included primarily in the Americas segment. Other Business Combinations Total consideration transferred for other acquisitions totaled $21 million, $18 million and $10 million in 2021, 2020 and 2019, 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 2021, 2020 or 2019 acquisitions because their results are not material to our consolidated financial statements. Other Business Development Activities 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. Celerity Pharmaceuticals, LLC In September 2013, we entered into an agreement with Celerity Pharmaceutical, LLC (Celerity) to develop certain acute care generic injectable premix and oncolytic products through regulatory approval. We transferred our rights in these products to Celerity and Celerity assumed ownership and responsibility for development of the products. We are obligated to purchase the individual product rights from Celerity if the products obtain regulatory approval. We did not purchase any product rights from Celerity in 2021 or 2020. In 2019, we paid $86 million to acquire the rights to various products that have received regulatory approval. We capitalized the purchase prices of products that were purchased upon regulatory approval as intangible assets and are amortizing the assets over their estimated useful lives of 12 years. As of December 31, 2021, our contingent future payments total up to $77 million upon Celerity’s achievement of specified regulatory approvals. In December 2020, we entered into an agreement with a third party to divest one of the products that is currently being developed by Celerity if that product receives regulatory approval in the U.S. and/or European Union. If regulatory approval is obtained, we would incur a loss ranging from $30 million to $60 million for the difference between our purchase price and the divestiture proceeds in connection with that transaction. 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. We could make additional payments of up to $35 million upon the achievement of certain development, regulatory or commercial milestones. During 2019, we acquired the rights to multiple products for an aggregate purchase price of $80 million. The purchase prices were capitalized primarily as developed-technology intangible assets and are being amortized over a weighted-average useful life of 10 years. 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 $19 million upon the achievement of certain development and regulatory milestones, in addition to future payments related to contingent commercialization milestones, profit-sharing and royalties. |
SUPPLEMENTAL FINANCIAL INFORMAT
SUPPLEMENTAL FINANCIAL INFORMATION | 12 Months Ended |
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
SUPPLEMENTAL FINANCIAL INFORMATION | SUPPLEMENTAL FINANCIAL INFORMATION Inventories as of December 31 (in millions) 2021 2020 Raw materials $ 591 $ 460 Work in process 300 196 Finished goods 1,562 1,260 Inventories $ 2,453 $ 1,916 Prepaid Expenses and Other Current Assets as of December 31 (in millions) 2021 2020 Prepaid value added taxes $ 199 $ 163 Prepaid income taxes 166 183 Contract assets 84 70 Other 390 342 Prepaid expenses and other current assets $ 839 $ 758 Property, Plant and Equipment, Net as of December 31 (in millions) 2021 2020 Land and land improvements $ 172 $ 166 Buildings and leasehold improvements 1,915 1,849 Machinery and equipment 7,097 6,884 Equipment on lease with customers 1,684 1,671 Construction in progress 860 701 Total property, plant and equipment, at cost 11,728 11,271 Accumulated depreciation (6,550) (6,549) Property, plant and equipment, net $ 5,178 $ 4,722 Depreciation expense was $592 million in 2021, $601 million in 2020 and $606 million in 2019. Other Non-Current Assets as of December 31 (in millions) 2021 2020 Deferred tax assets $ 376 $ 748 Non-current receivables, net 113 158 Contract assets 111 64 Capitalized implementation costs in hosting arrangements 99 68 Pension and other postretirement benefits 228 155 Investments 154 135 Other 132 67 Other non-current assets $ 1,213 $ 1,395 Accrued Expenses and Other Current Liabilities as of December 31 (in millions) 2021 2020 Common stock dividends payable $ 140 $ 125 Employee compensation and withholdings 608 415 Property, payroll and certain other taxes 174 148 Contract liabilities 162 32 Restructuring liabilities 97 92 Accrued rebates 312 239 Operating lease liabilities 128 111 Income taxes payable 90 135 Pension and other postretirement benefits 46 48 Contingent payments related to acquisitions 21 16 Other 701 523 Accrued expenses and other current liabilities $ 2,479 $ 1,884 Other Non-Current Liabilities as of December 31 (in millions) 2021 2020 Pension and other postretirement benefits $ 1,052 $ 1,214 Deferred tax liabilities 962 143 Long-term tax liabilities 80 84 Contingent payments related to acquisitions 122 14 Contract liabilities 84 34 Litigation and environmental reserves 28 29 Restructuring liabilities 12 21 Other 153 134 Other non-current liabilities $ 2,493 $ 1,673 Interest Expense, net years ended December 31 (in millions) 2021 2020 2019 Interest costs $ 217 $ 162 $ 120 Interest costs capitalized (11) (9) (9) Interest expense 206 153 111 Interest income (14) (19) (40) Interest expense, net $ 192 $ 134 $ 71 Other Expense, net years ended December 31 (in millions) 2021 2020 2019 Foreign exchange (gains) losses, net $ 19 $ 49 $ 37 Change in fair value of marketable equity securities 7 (13) (1) Loss on debt extinguishment 5 110 — Pension settlements 2 46 755 Pension and other postretirement benefit plans 11 (3) (53) Other, net (3) 1 (7) Other expense, net $ 41 $ 190 $ 731 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, 2021, 2020 and 2019 was $79 million, $102 million and $87 million, respectively. Other Supplemental Information year ended December 31 (in millions) 2021 2020 2019 Interest paid, net of portion capitalized $ 145 $ 137 $ 103 Income taxes paid $ 282 $ 249 $ 294 |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS, NET | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS, NET | GOODWILL AND OTHER INTANGIBLE ASSETS, NET Goodwill The following is a reconciliation of goodwill by business segment. (in millions) Americas EMEA APAC Hillrom Total December 31, 2019 $ 2,428 $ 385 $ 217 $ — $ 3,030 Additions 26 1 7 — 34 Acquisition accounting adjustments (45) (6) (2) — (53) Currency translation 165 26 15 — 206 December 31, 2020 $ 2,574 $ 406 $ 237 $ — $ 3,217 Reallocation of goodwill 81 (81) — — — Additions 4 1 — 6,785 6,790 Currency translation (142) (17) (13) 1 (171) December 31, 2021 $ 2,517 $ 309 $ 224 $ 6,786 $ 9,836 As of December 31, 2021, there were no reductions in goodwill relating to impairment losses. As discussed in Note 17 - Segment Information, we made a change to our reportable segments in the first quarter of 2021. As a result of this change, we reallocated goodwill from our EMEA segment to the Americas segment using a relative fair value approach. In addition, we completed an assessment of any potential goodwill impairment for all reporting units immediately prior to and following the reallocation and determined that no impairment existed. Other Intangible Assets, Net The following is a summary of our other intangible assets. (in millions) Developed technology, Other amortized Customer relationships Indefinite-lived Total December 31, 2021 Gross other intangible assets $ 3,801 $ 344 $ 3,437 $ 2,140 $ 9,722 Accumulated amortization (1,556) (212) (162) — $ (1,930) Other intangible assets, net $ 2,245 $ 132 $ 3,275 $ 2,140 $ 7,792 December 31, 2020 Gross other intangible assets $ 2,713 $ 269 $ 226 $ 169 $ 3,377 Accumulated amortization (1,374) (193) (139) — $ (1,706) Other intangible assets, net $ 1,339 $ 76 $ 87 $ 169 $ 1,671 Intangible asset amortization expense was $298 million in 2021, $222 million in 2020 and $183 million in 2019. The anticipated annual amortization expense for definite-lived intangible assets recorded as of December 31, 2021 is $718 million in 2022, $627 million in 2023, $605 million in 2024, $572 million in 2025 and $542 million in 2026. In the second quarters of 2020 and 2019, we recognized impairment charges of $17 million and $31 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 for the years ended December 31, 2020 and 2019. We consider the fair values of the assets to be Level 3 measurements due to the significant estimates and assumptions we used in establishing the estimated fair values. |
DEBT AND CREDIT FACILITIES
DEBT AND CREDIT FACILITIES | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
DEBT AND CREDIT FACILITIES | DEBT AND CREDIT FACILITIES Debt Outstanding At December 31, 2021 and 2020, we had the following debt outstanding: as of December 31 (in millions) Effective interest rate in 2021¹ 2021 1 2020 1 Commercial paper 0.3 % $ 300 $ — 1.7% notes due 2021 1.9 % — 400 2.4% notes due 2022 2.5 % 203 203 0.868% notes due 2023 1.2 % 797 — Floating-rate notes due 2023 1.9 % 298 — 0.4% notes due 2024 0.6 % 846 915 1.322% notes due 2024 1.7 % 1,393 — 7.0% notes due 2024 7.0 % 13 — Floating-rate notes due 2024 0.9 % 298 — Term loan due 2024 1.8 % 1,998 — 1.3% notes due in 2025 1.4 % 678 734 2.6% notes due 2026 2.7 % 747 746 Term loan due 2026 1.9 % 1,998 — 7.65% debentures due 2027 7.7 % 5 5 1.915% notes due 2027 2.2 % 1,441 — 6.625% debentures due 2028 5.6 % 96 97 2.272% notes due 2028 2.5 % 1,241 — 1.3% notes due 2029 1.4 % 841 912 3.95% notes due 2030 4.0 % 495 495 1.73% notes due 2031 3.2 % 644 644 2.539% notes due 2032 2.7 % 1,537 — 6.25% notes due 2037 6.3 % 265 265 3.65% notes due 2042 3.7 % 6 6 4.5% notes due 2043 4.6 % 256 256 3.5% notes due 2046 3.6 % 441 440 3.132% notes due 2051 3.2 % 742 — Finance leases and other 9.3 % 81 74 Total debt 17,660 6,192 Short-term debt (301) — Current maturities of long-term debt and finance lease obligations (210) (406) Long-term debt and finance lease obligations $ 17,149 $ 5,786 1 Book values include any discounts, premiums and adjustments related to hedging instruments and effective interest rates reflect amortization of those items. Significant Debt Activity 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 instruments as net investment hedges of our European operations. Refer to Note 15 for additional information. 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 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 has 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 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. Pursuant to a registration rights agreement (the Hillrom Notes Registration Rights Agreement) with the initial purchasers of the Hillrom notes, we agreed to use our commercially reasonable efforts to file a registration statement with respect to a registered offer to exchange the Hillrom notes for new notes with terms substantially identical in all material respects to the Hillrom notes and to have such registration statement declared effective under the U.S. Securities Act of 1933. If we fail to have such registration statement declared effective by March 25, 2023 (a registration default), the annual interest rate on the Hillrom notes would increase by 0.25% for the 90-day period immediately following such registration default and by an additional 0.25% thereafter. The maximum additional interest rate is 0.50% per annum and if a registration default is corrected, the Hillrom notes would revert to the original interest rates. The payment of additional interest is the sole remedy for the holders of the Hillrom notes in the event of a registration default. 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. 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 0.09% annually as of December 31, 2021 and are based on our credit ratings and the total capacity of the facility. Prior to entering into the USD Revolver and the Euro Revolver, our previous U.S. dollar-denominated revolving credit facility and Euro-denominated revolving credit facility had a maximum capacity of $2.0 billion and €200 million, respectively. Fees under these credit facilities were 0.09% annually as of December 31, 2020 and were 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, 2021 and 2020. We also maintain other credit arrangements, which totaled approximately $225 million and $200 million as of December 31, 2021 and 2020, respectively. There were no amounts outstanding under these arrangements as of December 31, 2021 and 2020. As of December 31, 2021, 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, 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. There was no commercial paper outstanding as of December 31, 2020. Future Debt Maturities as of and for the years ended December 31 (in millions) Debt maturities 2022 $ 513 2023 1,108 2024 4,567 2025 684 2026 2,754 Thereafter 8,128 Total obligations and commitments 17,754 Discounts, premiums, and adjustments relating to hedging instruments (94) Total debt $ 17,660 |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
LEASES | 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 41 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. For operating leases that commenced prior to our adoption of Topic 842, we measured the lease liabilities and right-of-use assets using our incremental borrowing rate as of January 1, 2019. The components of lease cost for the years ended December 31, 2021, 2020 and 2019 were: (in millions) 2021 2020 2019 Operating lease cost $ 114 $ 115 $ 121 Finance lease cost Amortization of right-of-use assets 7 5 5 Interest on lease liabilities 5 5 5 Variable lease cost 52 54 89 Lease cost $ 178 $ 179 $ 220 The following table contains supplemental cash flow information related to leases for the years ended December 31, 2021, 2020 and 2019: (in millions) 2021 2020 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 124 $ 127 $ 119 Operating cash flows from finance leases 5 4 4 Financing cash flows from finance leases 4 4 4 Right-of-use operating lease assets obtained in exchange for lease obligations 71 67 207 Right-of-use finance lease assets obtained in exchange for lease obligations 4 8 — There are no material lease transactions that we entered into but have not yet commenced as of December 31, 2021. Supplemental balance sheet information related to leases as of December 31, 2021 and 2020 include: (in millions) 2021 2020 Operating leases Operating lease right-of-use assets $ 630 $ 603 Accrued expenses and other current liabilities $ 128 $ 111 Operating lease liabilities 522 501 Total operating lease liabilities $ 650 $ 612 Finance leases Property, plant and equipment, at cost $ 86 $ 76 Accumulated depreciation (31) (28) Property, plant and equipment, net $ 55 $ 48 Current maturities of long-term debt and finance lease obligations $ 2 $ 1 Long-term debt and finance lease obligations 68 64 Total finance lease liabilities $ 70 $ 65 Lease term and discount rates as of December 31, 2021 and 2020 were: December 31, 2021 December 31, 2020 Weighted-average remaining lease term (years) Operating leases 8 9 Finance leases 12 13 Weighted-average discount rate Operating leases 1.8 % 2.2 % Finance leases 9.3 % 10.3 % Maturities of operating and finance lease liabilities as of December 31, 2021 were: (in millions) Finance Leases Operating Leases 2022 $ 10 $ 141 2023 9 118 2024 9 95 2025 9 76 2026 9 60 Thereafter 72 216 Total minimum lease payments 118 706 Less: imputed interest (48) (56) Present value of lease liabilities $ 70 $ 650 Lessor Activity We lease medical equipment, such as renal dialysis equipment and infusion pumps, to customers, primarily 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, 2021, 2020 and 2019 were: (in millions) 2021 2020 2019 Sales-type lease revenue $ 27 $ 38 $ 35 Operating lease revenue 136 84 61 Variable lease revenue 79 80 85 Total lease revenue $ 242 $ 202 $ 181 The components of our net investment in sales-type leases as of December 31, 2021 and 2020 were: (in millions) 2021 2020 Minimum lease payments $ 111 $ 122 Unguaranteed residual values 4 12 Net investment in leases $ 115 $ 134 Our net investment in sales-type leases is classified as follows in the accompanying consolidated balance sheets: (in millions) December 31, 2021 December 31, 2020 Accounts receivable, net $ 40 $ 39 Other non-current assets 75 95 Total $ 115 $ 134 Our net investment in sales-type leases was $115 million as of December 31, 2021, of which $13 million originated in 2017 and prior, $24 million in 2018, $24 million in 2019, $32 million in 2020 and $22 million in 2021. Maturities of sales-type and operating leases as of December 31, 2021 were: (in millions) Sales-type Leases Operating Leases 2022 $ 43 $ 87 2023 32 79 2024 22 75 2025 12 60 2026 5 11 Thereafter 1 2 Total minimum lease payments 115 $ 314 Less: imputed interest (4) Present value of minimum lease payments $ 111 |
LEASES | 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 41 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. For operating leases that commenced prior to our adoption of Topic 842, we measured the lease liabilities and right-of-use assets using our incremental borrowing rate as of January 1, 2019. The components of lease cost for the years ended December 31, 2021, 2020 and 2019 were: (in millions) 2021 2020 2019 Operating lease cost $ 114 $ 115 $ 121 Finance lease cost Amortization of right-of-use assets 7 5 5 Interest on lease liabilities 5 5 5 Variable lease cost 52 54 89 Lease cost $ 178 $ 179 $ 220 The following table contains supplemental cash flow information related to leases for the years ended December 31, 2021, 2020 and 2019: (in millions) 2021 2020 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 124 $ 127 $ 119 Operating cash flows from finance leases 5 4 4 Financing cash flows from finance leases 4 4 4 Right-of-use operating lease assets obtained in exchange for lease obligations 71 67 207 Right-of-use finance lease assets obtained in exchange for lease obligations 4 8 — There are no material lease transactions that we entered into but have not yet commenced as of December 31, 2021. Supplemental balance sheet information related to leases as of December 31, 2021 and 2020 include: (in millions) 2021 2020 Operating leases Operating lease right-of-use assets $ 630 $ 603 Accrued expenses and other current liabilities $ 128 $ 111 Operating lease liabilities 522 501 Total operating lease liabilities $ 650 $ 612 Finance leases Property, plant and equipment, at cost $ 86 $ 76 Accumulated depreciation (31) (28) Property, plant and equipment, net $ 55 $ 48 Current maturities of long-term debt and finance lease obligations $ 2 $ 1 Long-term debt and finance lease obligations 68 64 Total finance lease liabilities $ 70 $ 65 Lease term and discount rates as of December 31, 2021 and 2020 were: December 31, 2021 December 31, 2020 Weighted-average remaining lease term (years) Operating leases 8 9 Finance leases 12 13 Weighted-average discount rate Operating leases 1.8 % 2.2 % Finance leases 9.3 % 10.3 % Maturities of operating and finance lease liabilities as of December 31, 2021 were: (in millions) Finance Leases Operating Leases 2022 $ 10 $ 141 2023 9 118 2024 9 95 2025 9 76 2026 9 60 Thereafter 72 216 Total minimum lease payments 118 706 Less: imputed interest (48) (56) Present value of lease liabilities $ 70 $ 650 Lessor Activity We lease medical equipment, such as renal dialysis equipment and infusion pumps, to customers, primarily 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, 2021, 2020 and 2019 were: (in millions) 2021 2020 2019 Sales-type lease revenue $ 27 $ 38 $ 35 Operating lease revenue 136 84 61 Variable lease revenue 79 80 85 Total lease revenue $ 242 $ 202 $ 181 The components of our net investment in sales-type leases as of December 31, 2021 and 2020 were: (in millions) 2021 2020 Minimum lease payments $ 111 $ 122 Unguaranteed residual values 4 12 Net investment in leases $ 115 $ 134 Our net investment in sales-type leases is classified as follows in the accompanying consolidated balance sheets: (in millions) December 31, 2021 December 31, 2020 Accounts receivable, net $ 40 $ 39 Other non-current assets 75 95 Total $ 115 $ 134 Our net investment in sales-type leases was $115 million as of December 31, 2021, of which $13 million originated in 2017 and prior, $24 million in 2018, $24 million in 2019, $32 million in 2020 and $22 million in 2021. Maturities of sales-type and operating leases as of December 31, 2021 were: (in millions) Sales-type Leases Operating Leases 2022 $ 43 $ 87 2023 32 79 2024 22 75 2025 12 60 2026 5 11 Thereafter 1 2 Total minimum lease payments 115 $ 314 Less: imputed interest (4) Present value of minimum lease payments $ 111 |
LEASES | 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 41 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. For operating leases that commenced prior to our adoption of Topic 842, we measured the lease liabilities and right-of-use assets using our incremental borrowing rate as of January 1, 2019. The components of lease cost for the years ended December 31, 2021, 2020 and 2019 were: (in millions) 2021 2020 2019 Operating lease cost $ 114 $ 115 $ 121 Finance lease cost Amortization of right-of-use assets 7 5 5 Interest on lease liabilities 5 5 5 Variable lease cost 52 54 89 Lease cost $ 178 $ 179 $ 220 The following table contains supplemental cash flow information related to leases for the years ended December 31, 2021, 2020 and 2019: (in millions) 2021 2020 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 124 $ 127 $ 119 Operating cash flows from finance leases 5 4 4 Financing cash flows from finance leases 4 4 4 Right-of-use operating lease assets obtained in exchange for lease obligations 71 67 207 Right-of-use finance lease assets obtained in exchange for lease obligations 4 8 — There are no material lease transactions that we entered into but have not yet commenced as of December 31, 2021. Supplemental balance sheet information related to leases as of December 31, 2021 and 2020 include: (in millions) 2021 2020 Operating leases Operating lease right-of-use assets $ 630 $ 603 Accrued expenses and other current liabilities $ 128 $ 111 Operating lease liabilities 522 501 Total operating lease liabilities $ 650 $ 612 Finance leases Property, plant and equipment, at cost $ 86 $ 76 Accumulated depreciation (31) (28) Property, plant and equipment, net $ 55 $ 48 Current maturities of long-term debt and finance lease obligations $ 2 $ 1 Long-term debt and finance lease obligations 68 64 Total finance lease liabilities $ 70 $ 65 Lease term and discount rates as of December 31, 2021 and 2020 were: December 31, 2021 December 31, 2020 Weighted-average remaining lease term (years) Operating leases 8 9 Finance leases 12 13 Weighted-average discount rate Operating leases 1.8 % 2.2 % Finance leases 9.3 % 10.3 % Maturities of operating and finance lease liabilities as of December 31, 2021 were: (in millions) Finance Leases Operating Leases 2022 $ 10 $ 141 2023 9 118 2024 9 95 2025 9 76 2026 9 60 Thereafter 72 216 Total minimum lease payments 118 706 Less: imputed interest (48) (56) Present value of lease liabilities $ 70 $ 650 Lessor Activity We lease medical equipment, such as renal dialysis equipment and infusion pumps, to customers, primarily 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, 2021, 2020 and 2019 were: (in millions) 2021 2020 2019 Sales-type lease revenue $ 27 $ 38 $ 35 Operating lease revenue 136 84 61 Variable lease revenue 79 80 85 Total lease revenue $ 242 $ 202 $ 181 The components of our net investment in sales-type leases as of December 31, 2021 and 2020 were: (in millions) 2021 2020 Minimum lease payments $ 111 $ 122 Unguaranteed residual values 4 12 Net investment in leases $ 115 $ 134 Our net investment in sales-type leases is classified as follows in the accompanying consolidated balance sheets: (in millions) December 31, 2021 December 31, 2020 Accounts receivable, net $ 40 $ 39 Other non-current assets 75 95 Total $ 115 $ 134 Our net investment in sales-type leases was $115 million as of December 31, 2021, of which $13 million originated in 2017 and prior, $24 million in 2018, $24 million in 2019, $32 million in 2020 and $22 million in 2021. Maturities of sales-type and operating leases as of December 31, 2021 were: (in millions) Sales-type Leases Operating Leases 2022 $ 43 $ 87 2023 32 79 2024 22 75 2025 12 60 2026 5 11 Thereafter 1 2 Total minimum lease payments 115 $ 314 Less: imputed interest (4) Present value of minimum lease payments $ 111 |
LEASES | 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 41 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. For operating leases that commenced prior to our adoption of Topic 842, we measured the lease liabilities and right-of-use assets using our incremental borrowing rate as of January 1, 2019. The components of lease cost for the years ended December 31, 2021, 2020 and 2019 were: (in millions) 2021 2020 2019 Operating lease cost $ 114 $ 115 $ 121 Finance lease cost Amortization of right-of-use assets 7 5 5 Interest on lease liabilities 5 5 5 Variable lease cost 52 54 89 Lease cost $ 178 $ 179 $ 220 The following table contains supplemental cash flow information related to leases for the years ended December 31, 2021, 2020 and 2019: (in millions) 2021 2020 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 124 $ 127 $ 119 Operating cash flows from finance leases 5 4 4 Financing cash flows from finance leases 4 4 4 Right-of-use operating lease assets obtained in exchange for lease obligations 71 67 207 Right-of-use finance lease assets obtained in exchange for lease obligations 4 8 — There are no material lease transactions that we entered into but have not yet commenced as of December 31, 2021. Supplemental balance sheet information related to leases as of December 31, 2021 and 2020 include: (in millions) 2021 2020 Operating leases Operating lease right-of-use assets $ 630 $ 603 Accrued expenses and other current liabilities $ 128 $ 111 Operating lease liabilities 522 501 Total operating lease liabilities $ 650 $ 612 Finance leases Property, plant and equipment, at cost $ 86 $ 76 Accumulated depreciation (31) (28) Property, plant and equipment, net $ 55 $ 48 Current maturities of long-term debt and finance lease obligations $ 2 $ 1 Long-term debt and finance lease obligations 68 64 Total finance lease liabilities $ 70 $ 65 Lease term and discount rates as of December 31, 2021 and 2020 were: December 31, 2021 December 31, 2020 Weighted-average remaining lease term (years) Operating leases 8 9 Finance leases 12 13 Weighted-average discount rate Operating leases 1.8 % 2.2 % Finance leases 9.3 % 10.3 % Maturities of operating and finance lease liabilities as of December 31, 2021 were: (in millions) Finance Leases Operating Leases 2022 $ 10 $ 141 2023 9 118 2024 9 95 2025 9 76 2026 9 60 Thereafter 72 216 Total minimum lease payments 118 706 Less: imputed interest (48) (56) Present value of lease liabilities $ 70 $ 650 Lessor Activity We lease medical equipment, such as renal dialysis equipment and infusion pumps, to customers, primarily 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, 2021, 2020 and 2019 were: (in millions) 2021 2020 2019 Sales-type lease revenue $ 27 $ 38 $ 35 Operating lease revenue 136 84 61 Variable lease revenue 79 80 85 Total lease revenue $ 242 $ 202 $ 181 The components of our net investment in sales-type leases as of December 31, 2021 and 2020 were: (in millions) 2021 2020 Minimum lease payments $ 111 $ 122 Unguaranteed residual values 4 12 Net investment in leases $ 115 $ 134 Our net investment in sales-type leases is classified as follows in the accompanying consolidated balance sheets: (in millions) December 31, 2021 December 31, 2020 Accounts receivable, net $ 40 $ 39 Other non-current assets 75 95 Total $ 115 $ 134 Our net investment in sales-type leases was $115 million as of December 31, 2021, of which $13 million originated in 2017 and prior, $24 million in 2018, $24 million in 2019, $32 million in 2020 and $22 million in 2021. Maturities of sales-type and operating leases as of December 31, 2021 were: (in millions) Sales-type Leases Operating Leases 2022 $ 43 $ 87 2023 32 79 2024 22 75 2025 12 60 2026 5 11 Thereafter 1 2 Total minimum lease payments 115 $ 314 Less: imputed interest (4) Present value of minimum lease payments $ 111 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 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, 2021 and 2020, our total recorded reserves with respect to legal and environmental matters were $72 million and $40 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, 2021 and 2020, our environmental reserves, which are measured on an undiscounted basis, were $18 million and $20 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 November 2016, a putative antitrust class action complaint seeking monetary and injunctive relief was filed in the United States District Court for the Northern District of Illinois. The complaint alleges a conspiracy among manufacturers of IV solutions to restrict output and affect pricing in connection with a shortage of such solutions. Similar parallel actions subsequently were filed. In January 2017, a single consolidated complaint covering these matters was filed in the Northern District of Illinois. We filed a motion to dismiss the consolidated complaint in February 2017. The court granted our motion to dismiss the consolidated complaint without prejudice in July 2018. The plaintiffs filed an amended complaint, which we moved to dismiss on November 9, 2018. The court granted our motion to dismiss the amended complaint with prejudice on April 3, 2020. The plaintiffs did not file an appeal. In April 2017, we became aware of a criminal investigation by the U.S. Department of Justice (DOJ), Antitrust Division and a federal grand jury in the United States District Court for the Eastern District of Pennsylvania. We and an employee received subpoenas seeking production of documents and testimony regarding the manufacturing, selling, pricing and shortages of IV solutions and containers (including saline solutions and certain other injectable medicines sold by us) and communications with competitors regarding the same. On November 30, 2018, the DOJ notified us that it had closed the investigation. The New York Attorney General has also requested that we provide information regarding business practices in the IV saline industry. We cooperated with that request and have been advised that the matter has now been closed. 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 alleges 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. In addition, we have received a stockholder request for inspection of our books and records in connection with the announcement made in our Form 8-K on October 24, 2019 that we had commenced an internal investigation into certain intra-company transactions that impacted our previously reported non-operating foreign exchange gains and losses. As initially disclosed on October 24, 2019, we also voluntarily advised the staff of the SEC of our internal investigation and we have been cooperating with the staff of the SEC. On February 18, 2022, we reached a settlement with the SEC, which resolved the SEC’s investigation into related matters. 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 are fully accrued for the civil penalty as of December 31, 2021 and we expect to pay 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. The settlement of these claims does not preclude potential future lawsuits. 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 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. The DHHS often issues this type of subpoena 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. Other As previously disclosed, in 2008 we recalled our heparin sodium injection products in the United States. Following the recall, more than 1,000 lawsuits alleging that plaintiffs suffered various reactions to a heparin contaminant, in some cases resulting in fatalities, were filed. In January 2019, the last of these cases was settled. In 2019, following the resolution of an insurance dispute, we received cash proceeds of $39 million for our allocation of the insurance proceeds under a settlement and cost-sharing agreement related to the defense of the heparin product liability cases. We recognized a $37 million gain in connection with the resolution of the dispute with the insurer that is classified within other operating income, net on the consolidated statement of income for the year ended December 31, 2019. |
STOCKHOLDERS_ EQUITY
STOCKHOLDERS’ EQUITY | 12 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY | 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, 2021, approximately 51 million authorized shares are available for future awards under our stock-based compensation plans. Stock Compensation Expense Stock compensation expense was $146 million, $130 million and $122 million in 2021, 2020 and 2019, respectively. The related tax benefit recognized was $36 million in 2021, $53 million in 2020 and $70 million in 2019. Included in the benefit in 2021, 2020 and 2019 were realized excess tax benefits for stock-based compensation of $13 million, $27 million and $54 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, 2021 and 2020 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: years ended December 31 2021 2020 2019 Expected volatility 24 % 26 % 19 % Expected life (in years) 5.5 5.5 5.5 Risk-free interest rate 0.8 % 0.6 % 2.5 % Dividend yield 1.3 % 1.2 % 1.0 % Fair value per stock option $ 16 $ 16 $ 15 The following table summarizes stock option activity for the year ended December 31, 2021 and the outstanding stock options as of December 31, 2021. (options and aggregate intrinsic values in thousands) Options Weighted- Weighted- Aggregate Outstanding as of January 1, 2021 20,196 $ 56.88 Granted 4,034 $ 77.32 Exercised (2,759) $ 49.68 Forfeited (729) $ 76.33 Expired (46) $ 53.75 Outstanding as of December 31, 2021 20,696 $ 61.14 5.9 $ 511,187 Vested or expected to vest as of December 31, 2021 20,391 $ 60.91 5.9 $ 508,645 Exercisable as of December 31, 2021 13,821 $ 53.46 4.6 $ 447,799 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 2021, 2020 and 2019 was $78 million, $131 million and $272 million, respectively. As of December 31, 2021, $60 million of unrecognized compensation cost related to stock options is expected to be recognized as expense over a weighted-average period of approximately 1.7 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, 2021. (share units in thousands) Share units Weighted- Nonvested RSUs as of January 1, 2021 1,138 $ 73.11 Granted 714 $ 77.84 Replacement RSUs granted in acquisition 668 $ 80.86 Vested (591) $ 71.63 Forfeited (131) $ 77.75 Nonvested RSUs as of December 31, 2021 1,798 $ 78.01 In connection with the Hillrom acquisition, during the fourth quarter of 2021, we issued 668 thousand replacement RSUs to holders of Hillrom equity awards. Refer to Note 2 for additional information regarding the Hillrom acquisition. As of December 31, 2021, $82 million of unrecognized compensation cost related to RSUs is expected to be recognized as expense over a weighted-average period of approximately 2.1 years. The weighted-average grant-date fair value of RSUs granted in 2021, 2020 and 2019 was $79.30, $77.51 and $75.60, respectively. The fair value of RSUs vested in 2021, 2020 and 2019 was $47 million, $52 million and $57 million, respectively. PSUs Our annual equity awards stock compensation program for senior management includes the issuance of PSUs. In 2020 and 2021, 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 2017 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: years ended December 31 2021 2020 2019 Baxter volatility 28 % 26 % 19 % Peer group volatility 26%-81% 23%-95% 18%-113% Correlation of returns 0.05-0.65 0.19-0.70 0.13-0.63 Risk-free interest rate 0.3 % 0.4 % 2.5 % Fair value per PSU $ 86 $ 108 $ 106 The following table summarizes nonvested PSU activity for the year ended December 31, 2021. (share units in thousands) Share units Weighted- Nonvested PSUs as of January 1, 2021 760 $ 86.69 Granted 241 $ 78.24 Vested (178) $ 78.41 Forfeited (91) $ 87.63 Nonvested PSUs as of December 31, 2021 732 $ 85.87 Unrecognized compensation cost related to all unvested PSUs of $23 million at December 31, 2021 is expected to be recognized as expense over a weighted-average period of 1.5 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 11 million shares were available for future purchases as of December 31, 2021. During 2021, 2020, and 2019, we issued approximately 0.7 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 2021, 2020, and 2019 were $1.085, $0.955 and $0.850, respectively. A quarterly dividend of $0.245 per share ($0.98 on an annualized basis) was declared in February 2021 and was paid in April 2021. Quarterly dividends of $0.28 per share ($1.12 on an annualized basis) were declared in May and July of 2021 and were paid in July and October of 2021, respectively. Our Board of Directors declared a quarterly dividend of $0.28 per share in November of 2021, which was paid in January of 2022. 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 7.3 million shares under this authority pursuant to Rule 10b5-1 plans for $600 million in cash in 2021, 6.3 million shares under this authority pursuant to a Rule 10b5-1 plan for $500 million in cash in 2020 and 16.5 million shares under this authority pursuant to Rule 10b5-1 plans and otherwise for $1.3 billion in cash in 2019. We had $1.3 billion of purchase authority available as of December 31, 2021. Accelerated Share Repurchase Agreement In December 2018, we entered into a $300 million accelerated share repurchase agreement (ASR Agreement) with an investment bank. We funded the ASR Agreement with available cash. The ASR Agreement was executed pursuant to the 2012 Repurchase Authorization described above. Under the ASR Agreement, we received 3.6 million shares upon execution. Based on the volume-weighted average price of our common stock during the term of the ASR Agreement, we received an additional 0.6 million shares from the investment bank at settlement in May 2019. Other In addition to common stock, our authorized capital structure includes 100 million shares of preferred stock, no par value. As of December 31, 2021 and 2020, no shares of preferred stock were outstanding. |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE INCOME | 12 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE INCOME | ACCUMULATED OTHER COMPREHENSIVE INCOME The following table is a net-of-tax summary of the changes in AOCI by component for the years ended December 31, 2021 and 2020. (in millions) CTA Pension and OPEB plans Hedging Total Gains (losses) Balance as of December 31, 2020 $ (2,587) $ (574) $ (153) $ (3,314) Other comprehensive (loss) income before reclassifications (320) 160 4 (156) Amounts reclassified from AOCI (a) — 67 23 90 Net other comprehensive (loss) income (320) 227 27 (66) Balance as of December 31, 2021 $ (2,907) $ (347) $ (126) $ (3,380) (in millions) CTA Pension and OPEB plans Hedging Total Gains (losses) Balance as of December 31, 2019 $ (2,954) $ (715) $ (41) $ (3,710) Other comprehensive income (loss) before reclassifications 367 59 (117) 309 Amounts reclassified from AOCI (a) — 82 5 87 Net other comprehensive (loss) income 367 141 (112) 396 Balance as of December 31, 2020 $ (2,587) $ (574) $ (153) $ (3,314) (a) See table below for details about these reclassifications. The following table is a summary of the amounts reclassified from AOCI to net income during the years ended December 31, 2021 and 2020. Amounts reclassified from AOCI (a) (in millions) 2021 2020 Location of impact Pension and OPEB items Amortization of net losses and prior service costs or credits $ (82) $ (59) Other expense, net Settlement charges (2) (46) Other expense, net (84) (105) Total before tax Less: Tax effect 17 23 Income tax expense $ (67) $ (82) Net of tax Gains (losses) on hedging activities Foreign exchange contracts $ (23) $ (5) Cost of sales Interest rate contracts (6) (1) Interest expense, net (29) (6) Total before tax Less: Tax effect 6 1 Income tax expense $ (23) $ (5) Net of tax Total reclassification for the period $ (90) $ (87) Total net of tax (a) Amounts in parentheses indicate reductions to net income. Refer to Note 12 for additional information regarding the amortization of pension and OPEB items and Note 15 for additional information regarding hedging activity. |
REVENUES
REVENUES | 12 Months Ended |
Dec. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
REVENUES | REVENUES 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 and $1.7 billion as of December 31, 2021 and 2020, respectively. 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 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 one The following table summarizes our contract assets: as of December 31 (in millions) 2021 2020 Contract manufacturing services $ 50 $ 47 Software sales 45 40 Bundled equipment and consumable medical products contracts 100 47 Contract assets $ 195 $ 134 The following table summarizes the classification of contract assets and contract liabilities as reported in the consolidated balance sheet: as of December 31 (in millions) 2021 2020 Prepaid expenses and other current assets $ 84 $ 70 Other non-current assets 111 64 Contract assets $ 195 $ 134 Accrued expenses and other current liabilities $ 162 $ 32 Other non-current liabilities 84 34 Contract liabilities $ 246 $ 66 In 2021, $20 million of revenue was recognized that was included in contract liabilities as of December 31, 2020. In 2020 and 2019, the amount of revenue recognized that was included in contract liabilities as of December 31, 2019 and 2018 was not significant. Disaggregation of Net Sales Beginning in the first quarter of 2021, our product category net sales disclosures (previously referred to as global business units (GBUs)) separately present net sales from our BioPharma Solutions business, which was previously included within Other. Concurrent with that disaggregation of net sales from our BioPharma Solutions business, we have also allocated certain previously unallocated sales deductions from Other to various categories, primarily based on their respective net sales. Net sales for 2020 and 2019 have been recast to conform to this presentation. Additionally, with the 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: 2021 2020 2019 years ended December 31 (in millions) U.S. International Total U.S. International Total U.S. International Total Renal Care 1 $ 890 $ 3,010 $ 3,900 $ 848 $ 2,909 $ 3,757 $ 791 $ 2,848 $ 3,639 Medication Delivery 2 1,859 1,021 2,880 1,738 953 2,691 1,762 977 2,739 Pharmaceuticals 3 753 1,538 2,291 849 1,249 2,098 904 1,215 2,119 Clinical Nutrition 4 343 621 964 330 580 910 308 552 860 Advanced Surgery 5 545 432 977 516 370 886 533 342 875 Acute Therapies 6 287 495 782 286 454 740 184 351 535 BioPharma Solutions 7 273 396 669 234 252 486 257 212 469 Patient Support Systems 8 86 29 115 — — — — — — Front Line Care 9 51 19 70 — — — — — — Surgical Solutions 10 12 15 27 — — — — — — Other 11 81 28 109 77 28 105 87 39 126 Total Baxter $ 5,180 $ 7,604 $ 12,784 $ 4,878 $ 6,795 $ 11,673 $ 4,826 $ 6,536 $ 11,362 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. 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. |
BUSINESS OPTIMIZATION CHARGES
BUSINESS OPTIMIZATION CHARGES | 12 Months Ended |
Dec. 31, 2021 | |
Restructuring and Related Activities [Abstract] | |
BUSINESS OPTIMIZATION CHARGES | BUSINESS OPTIMIZATION CHARGES approximately $30 million through the completion of the initiatives that are currently underway, primarily related to implementation costs. We continue to pursue cost savings initiatives and, to the extent further cost savings opportunities are identified, we may incur additional restructuring charges and costs to implement business optimization programs in future periods. We recorded the following charges related to business optimization programs in 2021, 2020, and 2019: years ended December 31 (in millions) 2021 2020 2019 Restructuring charges $ 91 $ 111 $ 134 Costs to implement business optimization programs 23 23 45 Accelerated depreciation — — 5 Total business optimization charges $ 114 $ 134 $ 184 For segment reporting, business optimization charges are unallocated expenses. Costs to implement business optimization programs for the years ended December 31, 2021, 2020 and 2019, respectively, consisted primarily of external consulting and transition costs, including employee compensation and related costs. The costs were generally included within cost of sales, SG&A expense and R&D expense. For the year ended December 31, 2019, we recognized accelerated depreciation, primarily associated with facilities to be closed. The costs were recorded within cost of sales and SG&A expense. During the years ended December 31, 2021, 2020 and 2019, we recorded the following restructuring charges: 2021 (in millions) COGS SG&A R&D Total Employee termination costs $ 37 $ 35 $ 1 $ 73 Contract termination and other costs — 2 — 2 Asset impairments 16 — — 16 Total restructuring charges $ 53 $ 37 $ 1 $ 91 2020 (in millions) COGS SG&A R&D Total Employee termination costs $ 36 $ 54 $ 2 $ 92 Contract termination and other costs 4 4 — 8 Asset impairments 8 3 — 11 Total restructuring charges $ 48 $ 61 $ 2 $ 111 2019 (in millions) COGS SG&A R&D Total Employee termination costs $ 13 $ 37 $ 25 $ 75 Contract termination and other costs 10 1 — 11 Asset impairments 37 2 9 48 Total restructuring charges $ 60 $ 40 $ 34 $ 134 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 income, net in our consolidated statement of income for the year ended December 31, 2020. The following table summarizes activity in the liability related to our restructuring initiatives. (in millions) Liability balance as of December 31, 2018 $ 101 Charges 113 Payments (93) Reserve adjustments (27) Currency translation (2) Liability balance as of December 31, 2019 92 Charges 116 Payments (86) Reserve adjustments (16) Currency translation 7 Liability balance as of December 31, 2020 113 Assumed in acquisition 6 Charges 94 Payments (78) Reserve adjustments (19) Currency translation (7) Liability balance as of December 31, 2021 $ 109 Reserve adjustments primarily relate to employee termination cost reserves established in prior periods. Substantially all of our restructuring liabilities as of December 31, 2021 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. |
PENSION AND OTHER POSTRETIREMEN
PENSION AND OTHER POSTRETIREMENT BENEFIT PROGRAMS | 12 Months Ended |
Dec. 31, 2021 | |
Retirement Benefits [Abstract] | |
PENSION AND OTHER POSTRETIREMENT BENEFIT PROGRAMS | 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. Pension benefits OPEB as of and for the years ended December 31 (in millions) 2021 2020 2021 2020 Benefit obligations Beginning of period $ 4,313 $ 3,973 $ 228 $ 228 Service cost 87 83 1 1 Interest cost 72 95 4 6 Participant contributions 4 4 — — Actuarial (gain) loss (186) 401 (14) 13 Benefit payments (103) (109) (19) (20) Settlements (13) (271) — — Curtailment (5) (4) — — Acquisitions 364 — 11 — Plan Amendments 15 — — — Foreign exchange and other (105) 141 — — End of period 4,443 4,313 211 228 Fair value of plan assets Beginning of period 3,434 2,973 — — Actual return on plan assets 141 688 — — Employer contributions 73 74 19 20 Participant contributions 4 4 — — Benefit payments (103) (109) (19) (20) Settlements (13) (271) — — Acquisitions 305 — — — Foreign exchange and other (57) 75 — — End of period 3,784 3,434 — — Funded status at December 31 $ (659) $ (879) $ (211) $ (228) Amounts recognized in the consolidated balance sheets Noncurrent asset $ 228 $ 155 $ — $ — Current liability (29) (30) (17) (18) Noncurrent liability (858) (1,004) (194) (210) Net liability recognized at December 31 $ (659) $ (879) $ (211) $ (228) Actuarial gains and losses result from changes in actuarial assumptions (such as changes in the discount rate and revised mortality rates). Actuarial gains in 2021 and losses in 2020 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 $4.3 billion and $4.1 billion at the 2021 and 2020 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. as of December 31 (in millions) 2021 2020 ABO $ 2,991 $ 2,920 Fair value of plan assets $ 2,209 $ 2,047 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). as of December 31 (in millions) 2021 2020 PBO $ 3,254 $ 3,421 Fair value of plan assets $ 2,366 $ 2,387 Expected Net Pension and OPEB Plan Payments for the Next 10 Years (in millions) Pension benefits OPEB 2022 $ 126 $ 19 2023 146 17 2024 161 17 2025 166 16 2026 179 15 2027 through 2031 1,018 64 Total expected net benefit payments for next 10 years $ 1,796 $ 148 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, 2021 and December 31, 2020. (in millions) Pension benefits OPEB Actuarial loss (gain) $ 509 $ (37) Prior service credit and transition obligation 8 (36) Total pre-tax loss (gain) recognized in AOCI at December 31, 2021 $ 517 $ (73) Actuarial loss (gain) $ 811 $ (23) Prior service credit and transition obligation (9) (45) Total pre-tax loss (gain) recognized in AOCI at December 31, 2020 $ 802 $ (68) 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. Year ended December 31 (in millions) 2021 2020 2019 Gain (loss) arising during the year, net of tax of $43 in 2021, $17 in 2020 and $(64) in 2019 $ 160 $ 59 $ (184) Amortization of loss to earnings, net of tax of $17 in 2021, $12 in 2020 and $6 in 2019 65 47 25 Settlement charges, net of tax of $0 in 2021, $11 in 2020 and $188 in 2019 2 35 567 Pension and other employee benefits $ 227 $ 141 $ 408 In 2021 and 2020, OCI activity for pension and OPEB plans was primarily related to actuarial gains and losses. In 2019, OCI activity for pension and OPEB plans was primarily related to the U.S. pension settlement charge and actuarial gains and losses. Net Periodic Benefit Cost Year ended December 31 (in millions) 2021 2020 2019 Pension benefits Service cost $ 87 $ 83 $ 74 Interest cost 72 95 172 Expected return on plan assets (143) (163) (264) Amortization of net losses and other deferred amounts 91 77 58 Settlement charges 2 46 755 Other (4) — — Net periodic pension benefit cost $ 105 $ 138 $ 795 OPEB Service cost $ 1 $ 1 $ 1 Interest cost 4 6 8 Amortization of net losses and prior service credit (9) (18) (27) Net periodic OPEB cost $ (4) $ (11) $ (18) Weighted-Average Assumptions Used in Determining Benefit Obligations at the Measurement Date Pension benefits OPEB 2021 2020 2021 2020 Discount rate U.S. and Puerto Rico plans 3.01 % 2.73 % 2.76 % 2.33 % International plans 1.47 % 1.00 % n/a n/a Rate of compensation increase U.S. and Puerto Rico plans 3.68 % 3.68 % n/a n/a International plans 3.11 % 3.03 % n/a n/a Annual rate of increase in the per-capita cost n/a n/a 6.25 % 6.50 % Rate decreased to n/a n/a 5.00 % 5.00 % by the year ended n/a n/a 2027 2027 The assumptions above, which were used in calculating the December 31, 2021 measurement date benefit obligations, will be used in the calculation of net periodic benefit cost in 2022. Weighted-Average Assumptions Used in Determining Net Periodic Benefit Cost Pension benefits OPEB 2021 2020 2019 2021 2020 2019 Discount rate U.S. and Puerto Rico plans 2.73 % 3.44 % 4.18 % 2.33 % 3.16 % 4.20 % International plans 1.00 % 1.34 % 2.02 % n/a n/a n/a Expected return on plan assets U.S. and Puerto Rico plans 5.50 % 6.50 % 6.29 % n/a n/a n/a International plans 3.58 % 4.23 % 5.45 % n/a n/a n/a Rate of compensation increase U.S. and Puerto Rico plans 3.68 % 3.68 % 3.66 % n/a n/a n/a International plans 3.03 % 3.03 % 3.08 % n/a n/a n/a Annual rate of increase in the per-capita cost n/a n/a n/a 6.25 % 6.50 % 6.75 % Rate decreased to n/a n/a n/a 5.00 % 5.00 % 5.00 % by the year ended n/a n/a n/a 2027 2027 2027 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 5.00% assumption for our U.S. and Puerto Rico plans for 2022. 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. Basis of fair value measurement (in millions) Balance at December 31, 2021 Quoted prices Significant Significant Measured at NAV (a) Assets Fixed income securities Cash and cash equivalents $ 368 $ 50 $ 318 $ — $ — U.S. government and government agency issues 271 — 271 — — Corporate bonds 573 — 573 — — Equity securities Common stock 452 452 — — — Mutual funds 521 235 286 — — Common/collective trust funds 1,118 — 358 — 760 Partnership investments 329 — — — 329 Other holdings 152 21 122 9 — Fair value of pension plan assets $ 3,784 $ 758 $ 1,928 $ 9 $ 1,089 (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. Basis of fair value measurement (in millions) Balance at December 31, 2020 Quoted prices Significant Significant Measured at NAV (a) Assets Fixed income securities Cash and cash equivalents $ 265 $ 91 $ 174 $ — $ — U.S. government and government agency issues 280 — 280 — — Corporate bonds 744 — 744 — — Equity securities Common stock 453 453 — — — Mutual funds 510 217 293 — — Common/collective trust funds 771 — 341 — 430 Partnership investments 296 — — — 296 Other holdings 115 22 82 11 — Collateral held on loaned securities 19 — 19 — — Liabilities Collateral to be paid on loaned securities (19) (19) — — — Fair value of pension plan assets $ 3,434 $ 764 $ 1,933 $ 11 $ 726 (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). (in millions) Other Balance at December 31, 2019 $ 10 Purchases 1 Balance at December 31, 2020 11 Sales (2) Balance at December 31, 2021 $ 9 The assets and liabilities of our pension plans are valued using the following valuation methods: 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. 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 2022. We continually reassess the amount and timing of any discretionary contributions. In 2022, we expect to make contributions of at least $41 million to our foreign pension plans. We expect to have net cash outflows relating to our OPEB plans of approximately $19 million in 2022. The following table details the funded status percentage of our pension plans as of December 31, 2021, including certain plans that are unfunded in accordance with the guidelines of our funding policy outlined above. United States and Puerto Rico International as of December 31, 2021 (in millions) Qualified Nonqualified Funded Unfunded Total Fair value of plan assets $ 2,700 n/a $ 1,084 n/a $ 3,784 PBO 2,713 $ 257 1,015 $ 458 4,443 Funded status percentage 100 % n/a 107 % n/a 85 % 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. As part of our continued effort to reduce pension plan obligations, we transferred approximately $2.4 billion of U.S. qualified pension plan liabilities to an insurance company through the purchase of a group annuity contract in October 2019. As a result of this transaction, we recognized a non-cash pretax pension settlement charge of $755 million in the fourth quarter of 2019. U.S. Defined Contribution Plan Most U.S. employees are eligible to participate in a qualified defined contribution plan. We recognized expense of $59 million in 2021, $61 million in 2020 and $53 million in 2019 related to contributions to this plan. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES Income Before Income Tax Expense (Benefit) by Category years ended December 31 (in millions) 2021 2020 2019 United States $ (424) $ (329) $ (586) International 1,901 1,621 1,556 Income before income taxes $ 1,477 $ 1,292 $ 970 Income Tax Expense (Benefit) years ended December 31 (in millions) 2021 2020 2019 Current United States Federal $ (11) $ 7 $ 8 State and local 10 (7) 3 International 329 270 258 Current income tax expense 328 270 269 Deferred United States Federal (103) (99) (140) State and local (8) 5 (29) International (35) 6 (141) Deferred income tax expense (benefit) (146) (88) (310) Income tax expense (benefit) $ 182 $ 182 $ (41) Deferred Tax Assets and Liabilities as of December 31 (in millions) 2021 2020 Deferred tax assets Accrued liabilities and other $ 434 $ 376 Pension and other postretirement benefits 174 218 Tax credit and net operating loss carryforwards 939 905 Swiss tax reform net asset basis step-up 161 174 Operating lease liabilities 155 148 Valuation allowances (401) (454) Total deferred tax assets 1,462 1,367 Deferred tax liabilities Subsidiaries’ unremitted earnings 66 77 Long-lived assets and other 1,831 539 Operating lease right-of-use assets 151 146 Total deferred tax liabilities 2,048 762 Net deferred tax asset (liability) $ (586) $ 605 At December 31, 2021, we had U.S. state operating loss carryforwards totaling $1.1 billion, U.S. federal operating loss carryforwards totaling $455 million and tax credit carryforwards totaling $411 million, which includes a U.S. foreign tax credit carryforward of $339 million. The U.S. federal and state operating loss and tax credit carryforwards expire between 2022 and 2041, with $334 million of the operating loss carryforwards having no expiration date. At December 31, 2021, with respect to our operations outside the U.S., we had foreign operating loss carryforwards totaling $1.4 billion and foreign tax credit carryforwards totaling $15 million. The foreign operating loss carryforwards expire between 2022 and 2033 with $798 million having no expiration date. A ll 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 $401 million and $454 million was recognized as of December 31, 2021 and 2020, 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 $98 million and $157 million was recognized with respect to the foreign tax credit carryforwards as of December 31, 2021 and 2020, 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 basis step-up that is amortizable as a tax deduction ratably over tax years 2025 through 2029. Accordingly, a deferred tax asset of $161 million and $174 million was recognized as of December 31, 2021 and 2020, respectively. We expect to realize some, but not all, of the Swiss deferred tax assets based principally on expected future earnings generated by the Swiss subsidiary during the period in which the tax basis will be amortized. Therefore, a valuation allowance of $59 million and $72 million was recognized on the Swiss deferred tax assets as of December 31, 2021 and 2020, respectively. 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 years ended December 31 (in millions) 2021 2020 2019 Income tax expense at U.S. statutory rate $ 310 $ 271 $ 204 Tax incentives (193) (169) (140) State and local taxes, net of federal benefit 10 (2) (17) Impact of foreign taxes 103 88 65 Tax-deductible foreign statutory loss on an investment in a foreign subsidiary (58) — — Unfavorable court decision in a foreign jurisdiction related to an uncertain tax position 22 — — Swiss tax reform net asset basis step-up — — (159) Deferred tax revaluation due to 2017 Tax Act and foreign tax reform — — (19) Transition tax due to 2017 Tax Act — — (16) Valuation allowances (61) 8 110 Stock compensation windfall tax benefits (13) (27) (54) Research and development tax credits (5) (7) (13) Unutilized foreign tax credits 14 15 5 Other, net 53 5 (7) Income tax expense (benefit) $ 182 $ 182 $ (41) We plan to repatriate our foreign earnings with the exception of approximately $286 million of accumulated earnings that are indefinitely reinvested as of December 31, 2021 related to one of our foreign operations. Additional withholding and capital gain taxes of $29 million would be incurred if such earnings were remitted currently. Our tax provisions for 2021, 2020 and 2019 do not include any 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. Our effective income tax rate can differ from the 21% U.S. federal statutory rate due to a number of factors, including foreign rate differences, tax incentives, increases or decreases in valuation allowances and liabilities for uncertain tax positions and excess tax benefits on stock compensation awards. In 2021, our effective rate was impacted favorably by geographic earnings mix, 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 and excess tax benefits on stock compensation awards. In 2019, Switzerland and India enacted tax reform legislation that had a material impact on our effective tax rate. We recognized a deferred tax benefit of $90 million to reflect a tax basis step-up, net of a valuation allowance, partially offset by a $5 million deferred tax revaluation to reflect an increase in the statutory tax rate, under the newly enacted Swiss tax laws. We also recognized a net deferred tax benefit of $24 million associated with deferred tax revaluation in India to reflect a decrease in the statutory tax rate. Our effective tax rate was also favorably impacted by $57 million in 2019 related to a notional interest deduction on the share capital of a foreign subsidiary. The gross tax benefit of the deduction is included in the table above within impact of foreign taxes and the portion not expected to be realized is included within valuation allowances. Unrecognized Tax Benefits We classify interest and penalties associated with income taxes in income tax expense (benefit) within the consolidated statements of income. Net interest and penalties recognized were not significant during 2021, 2020 and 2019. The liability recognized related to interest and penalties was $19 million and $17 million as of December 31, 2021 and 2020, respectively. The total amount of gross unrecognized tax benefits that, if recognized, would impact the effective tax rate are $39 million, $48 million and $70 million as of December 31, 2021, 2020 and 2019, respectively. The following table is a reconciliation of our unrecognized tax benefits, including those related to discontinued operations, for the years ended December 31, 2021, 2020 and 2019. as of and for the years ended (in millions) 2021 2020 2019 Balance at beginning of the year $ 90 $ 111 $ 127 Increase due to acquisition 11 — — Increase associated with tax positions taken during the current year 31 8 8 Increase (decrease) associated with tax positions taken during a prior year (3) (1) (3) Settlements (2) (18) (20) Decrease associated with lapses in statutes of limitations (16) (10) (1) Balance at end of the year $ 111 $ 90 $ 111 Of the gross unrecognized tax benefits, $39 million and $47 million were recognized as liabilities in the consolidated balance sheets as of December 31, 2021 and 2020, 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 reconciliation table above. The tax reductions as compared to the local statutory rate favorably impacted earnings per diluted share by $0.38 in 2021, $0.33 in 2020, and $0.27 in 2019. The above grants provide that our manufacturing operations are and will be partially exempt from local taxes with varying expirations from 2023 to 2029. Examinations of Tax Returns As of December 31, 2021, we had ongoing audits in the United States, Germany, United Kingdom, China and other jurisdictions. During 2021, we closed U.S. tax years 2009-2016 with the IRS with no material adjustments to our financial statements. Tax years 2017 and forward remain under examination by the IRS and tax years 2012 and forward remain under examination by various foreign taxing authorities. We believe that it is reasonably possible that our gross unrecognized tax benefits will be reduced within the next 12 months by $30 million. While the final outcome of these matters is inherently uncertain, we believe we have made adequate tax provisions for all years subject to examination. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE The following table is a reconciliation of basic shares to diluted shares. years ended December 31(in millions) 2021 2020 2019 Basic shares 502 509 509 Effect of dilutive securities 6 8 10 Diluted shares 508 517 519 The effect of dilutive securities included unexercised stock options, unvested RSUs and contingently issuable shares related to granted PSUs. The computation of diluted EPS excluded 7 million, 4 million, and 4 million equity awards in 2021, 2020, and 2019, 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. |
FINANCIAL INSTRUMENTS, DERIVATI
FINANCIAL INSTRUMENTS, DERIVATIVES AND HEDGING ACTIVITIES | 12 Months Ended |
Dec. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
FINANCIAL INSTRUMENTS, DERIVATIVES AND HEDGING ACTIVITIES | 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. as of and for the years ended December 31 (in millions) 2021 2020 2019 Sold receivables at beginning of year $ 96 $ 79 $ 69 Proceeds from sales of receivables 339 348 292 Cash collections (remitted to the owners of the receivables) (346) (335) (282) Effect of foreign exchange rate changes (8) 4 — Sold receivables at end of year $ 81 $ 96 $ 79 The net 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 $377 million and $345 million as of December 31, 2021 and 2020, respectively. The maximum term over which we have cash flow hedge contracts in place related to forecasted transactions at December 31, 2021 is 12 months for foreign exchange contracts. There were no outstanding interest rate contracts designated as cash flow hedges as of December 31, 2021 and 2020. 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, 2021 and 2020. Net Investment Hedges In May 2017, we issued €600 million of senior notes due May 2025. In May 2019, we issued €750 million of senior notes due May 2024 and €750 million of 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, 2021, we had an accumulated pre-tax unrealized translation loss in AOCI of $45 million related to the Euro-denominated senior notes. In May 2019, we entered into forward contracts designated as net investment hedges to reduce exposure to changes in currency rates on €1.2 billion of our net investment in our European operations. Those hedges were entered into in advance of the issuance of our senior notes mentioned above, were settled in the second quarter of 2019 and resulted in an insignificant loss. 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 2021, 2020 or 2019 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 2021, 2020 or 2019. 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. In 2019, we dedesignated €1.2 billion of forward contracts designated as a net investment hedge of our European operations. There were no net investment hedges terminated in 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 $851 million and $1.0 billion as of December 31, 2021 and 2020, 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, 2021, 2020, and 2019. (in millions) Gain (loss) Location of gain Gain (loss) reclassified from 2021 2020 2019 2021 2020 2019 Cash flow hedges Interest rate contracts $ — $ (131) $ (37) Interest expense, net $ (6) $ (1) $ — Foreign exchange contracts 5 (21) (9) Cost of sales (23) (5) 4 Net investment hedges 200 (224) 12 Other expense, net — — — Total $ 205 $ (376) $ (34) $ (29) $ (6) $ 4 Location of gain (loss) in Gain (loss) recognized (in millions) 2021 2020 2019 Undesignated derivative instruments Foreign exchange contracts Other expense, net $ (36) $ 49 $ 17 The following table summarizes net-of-tax activity in AOCI, a component of stockholders’ equity, related to our cash flow hedges. as of and for the year ended December 31 (in millions) 2021 2020 2019 Accumulated other comprehensive income (loss) balance at beginning of year $ (153) $ (41) $ (1) Adoption of new accounting standard — — (1) (Loss) gain in fair value of derivatives during the year 4 (117) (36) Amount reclassified to earnings during the year 23 5 (3) Accumulated other comprehensive income (loss) balance at end of year $ (126) $ (153) $ (41) As of December 31, 2021, $2 million of deferred, net after-tax losses 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, 2021. 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 $ 6 Accrued expenses and other current liabilities $ 3 Total derivative instruments designated as hedges 6 3 Undesignated derivative instruments Foreign exchange contracts Prepaid expenses and other current assets 2 Accrued expenses and other current liabilities 2 Total derivative instruments $ 8 $ 5 The following table summarizes the classification and fair values of derivative instruments reported in the consolidated balance sheet as of December 31, 2020. 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 17 Total derivative instruments designated as hedges — 17 Undesignated derivative instruments Foreign exchange contracts Prepaid expenses and other current assets 11 Accrued expenses and other current liabilities 2 Total derivative instruments $ 11 $ 19 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. December 31, 2021 December 31, 2020 (in millions) Asset Liability Asset Liability Gross amounts recognized in the consolidated balance sheets $ 8 $ 5 $ 11 $ 19 Gross amount subject to offset in master netting arrangements not offset in the consolidated balance sheets (2) (2) (6) (6) Total $ 6 $ 3 $ 5 $ 13 The following table presents the amounts recorded on the consolidated balance sheets related to fair value hedges: Carrying amount of hedged item Cumulative amount of fair value hedging adjustment included in the carrying amount of the hedged item (a) (in millions) Balance as of December 31, 2021 Balance as of December 31, 2020 Balance as of December 31, 2021 Balance as of December 31, 2020 Long-term debt $ 101 $ 102 $ 4 $ 5 (a) These fair value hedges were terminated in 2018 and earlier periods. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | 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. Basis of fair value measurement (in millions) Balance as of December 31, Quoted prices Significant Significant Assets Foreign exchange contracts $ 8 $ — $ 8 $ — Debt securities 30 — — 30 Marketable equity securities 10 10 — — Total $ 48 $ 10 $ 8 $ 30 Liabilities Foreign exchange contracts $ 5 $ — $ 5 $ — Contingent payments related to acquisitions 143 — — 143 Total $ 148 $ — $ 5 $ 143 Basis of fair value measurement (in millions) Balance as of December 31, Quoted prices Significant Significant Assets Foreign exchange contracts $ 11 $ — $ 11 $ — Debt securities 13 — 13 — Marketable equity securities 17 17 — — Total $ 41 $ 17 $ 24 $ — Liabilities Foreign exchange contracts $ 19 $ — $ 19 $ — Contingent payments related to acquisitions 30 — — 30 Total $ 49 $ — $ 19 $ 30 As of December 31, 2021 and 2020, cash and cash equivalents of $3.0 billion and $3.7 billion, respectively, included money market and other short-term funds of approximately $816 million and $1.8 billion, 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. Debt securities were reclassified to Level 3 as of December 31, 2021 because there were no observable transactions for those debt securities near the balance sheet date. There was no change in the estimated fair value of those debt securities for the year ended December 31, 2021. 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 our recurring fair value measurements that use significant unobservable inputs (Level 3), which consist of contingent payments related to acquisitions. as of and for the years ended December 31 (in millions) 2021 2020 Fair value at beginning of period $ 30 $ 39 Additions 135 4 Change in fair value recognized in earnings (6) (2) Payments (16) (11) Fair value at end of period $ 143 $ 30 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. Book values Fair values(a) as of December 31 (in millions) 2021 2020 2021 2020 Liabilities Short-term debt $ 301 $ — $ 301 $ — Current maturities of long-term debt and finance lease obligations 210 406 212 409 Long-term debt and finance lease obligations 17,149 5,786 17,568 6,471 (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. Equity investments not measured at fair value are comprised of other equity investments without readily determinable fair values and were $114 million and $105 million at December 31, 2021 and 2020, respectively. These amounts are included in Other non-current assets on our consolidated balance sheets. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 12 Months Ended |
Dec. 31, 2021 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION We manage our global operations based on four segments, consisting of the following geographic segments related to our legacy Baxter business: Americas (North and South America), EMEA (Europe, Middle East and Africa) and APAC (Asia-Pacific), and a new global segment for our recently acquired Hillrom business. The Americas, EMEA and 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. In the first quarter of 2021, the information provided to our Chief Executive Officer for purposes of allocating resources and assessing performance was updated to reallocate contracted services activities performed at a German manufacturing facility from our EMEA segment to our Americas segment. The contracted services performed at that facility are part of our BioPharma Solutions business, which is managed as part of the Americas segment. Accordingly, the reported financial results of the Americas segment now include the contracted services activities performed at that facility. Segment results for 2020 and 2019 have been recast to conform to this presentation. 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, certain product category support costs, stock compensation expense, certain employee benefit plan costs, certain foreign currency hedging activities, and certain gains, losses, and other charges (such as business optimization, acquisition and integration costs, intangible asset amortization and asset impairments). 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: for the years ended December 31 (in millions) 2021 2020 2019 Net sales: Americas $ 6,666 $ 6,321 $ 6,306 EMEA 3,115 2,877 2,756 APAC 2,791 2,475 2,300 Hillrom 212 — — Total net sales $ 12,784 $ 11,673 $ 11,362 Operating income: Americas $ 2,612 $ 2,389 $ 2,499 EMEA 632 523 527 APAC 623 591 549 Hillrom (80) — — Total segment operating income $ 3,787 $ 3,503 $ 3,575 Depreciation Expense: Americas $ 257 $ 249 $ 255 EMEA 147 150 149 APAC 98 94 85 Hillrom 4 — — Corporate and other 86 108 117 Total depreciation expense $ 592 $ 601 $ 606 Capital expenditures: Americas $ 394 $ 380 $ 325 EMEA 156 157 143 APAC 82 103 98 Hillrom 5 — — Corporate and other 72 84 120 Total capital expenditures $ 709 $ 724 $ 686 The following table is a reconciliation of segment operating income to income before income taxes per the consolidated statements of income. for the years ended December 31 (in millions) 2021 2020 2019 Total segment operating income $ 3,787 $ 3,503 $ 3,575 Corporate and other (2,077) (1,887) (1,803) Total operating income 1,710 1,616 1,772 Net interest expense 192 134 71 Other expense, net 41 190 731 Income before income taxes $ 1,477 $ 1,292 $ 970 Geographic information for the years ended December 31 (in millions) 2021 2020 2019 Net sales: United States $ 5,180 $ 4,878 $ 4,826 Latin America and Canada 1,249 1,191 1,268 EMEA 3,552 3,129 2,968 APAC 2,803 2,475 2,300 Total net sales $ 12,784 $ 11,673 $ 11,362 as of December 31 (in millions) 2021 2020 Property, plant and equipment and operating lease right-of-use assets, net: United States $ 2,337 $ 1,888 EMEA 1,576 1,556 APAC 978 1,024 Latin America and Canada 917 857 Total property, plant and equipment and operating lease right-of-use assets, net $ 5,808 $ 5,325 |
Schedule II - Qualifying And Va
Schedule II - Qualifying And Valuation Accounts | 12 Months Ended |
Dec. 31, 2021 | |
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, 2021 Additions Valuation and Qualifying Accounts (in millions) Balance at Acquisition Charged to (Credited) Deductions Balance at Year ended December 31, 2021: Allowance for doubtful accounts $ 125 13 (2) (9) (5) $ 122 Deferred tax asset valuation allowance $ 454 38 37 (30) (98) $ 401 Year ended December 31, 2020: Allowance for doubtful accounts $ 112 — 11 6 (4) $ 125 Deferred tax asset valuation allowance $ 420 — 77 26 (69) $ 454 Year ended December 31, 2019: Allowance for doubtful accounts $ 110 — 12 (2) (8) $ 112 Deferred tax asset valuation allowance $ 310 — 117 — (7) $ 420 ______________________________________ (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. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
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. Risks and Uncertainties Related to COVID-19 |
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 reported amounts and related disclosures. Actual results could differ from those estimates. |
Basis of Presentation | Basis of Presentation The consolidated financial statements include the accounts of Baxter and our majority-owned subsidiaries that we control, after elimination of intra-company transactions. Certain reclassifications have been made to conform the prior period consolidated financial statements to the current period presentation. |
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. The majority of our performance obligations are satisfied at a point in time. This includes sales of our broad portfolio of essential healthcare products across our 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. For a majority 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, in all of our segments, we enter into other types of contracts, including contract manufacturing arrangements, 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 when 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, 2021, we had $7.8 billion of transaction price allocated to remaining performance obligations related to executed contracts with an original duration of one year or more, 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 2022, 30% in 2023, 15% in each of 2024 and 2025, and 5% in 2026. 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 and wholesaler chargebacks. 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 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 that is probable not to result in a significant reversal in the amount of the cumulative revenue recognized in a future period. Revenue recognized in the years ended December 31, 2021, 2020 and 2019 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 | 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 | 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. |
Shipping and Handling Costs | Shipping and Handling Costs Shipping costs, which are 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 |
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. |
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. |
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 three |
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. |
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. |
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 |
Goodwill, Intangible Assets, and Other Long-Lived Assets | Goodwill, Intangible Assets, and Other Long-Lived Assets Goodwill is the excess of the purchase price over the fair value 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 2021, we changed the measurement date of our annual goodwill impairment test from December 31st to November 1st. 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 trademarks 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 31st to November 1st. 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. We review the carrying amounts of long-lived assets, 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 impairment exists, an impairment charge is recorded as the amount by which the carrying amount of the asset or asset group exceeds the fair value. |
Marketable Securities, Policy | 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 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 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 | 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 |
Foreign Currency Translation | Foreign Currency TranslationCurrency translation adjustments (CTA) related to foreign operations are included in other comprehensive income (OCI). |
Derivatives and Hedging Activities | Derivatives and Hedging Activities All derivative instruments are recognized as either assets or liabilities at fair value in the consolidated balance sheets and are generally 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 (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 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 | New Accounting Standards Recently issued accounting standards not yet adopted In July 2021, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (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 standard is effective for our financial statements beginning in 2022. 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 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. As of January 1, 2020, we adopted ASU No. 2018-15, Intangibles-Goodwill and Other-Internal-Use Software, which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. Our policies for capitalizing implementation costs incurred in a hosting arrangement were not impacted by this ASU. However, we have historically classified those capitalized costs within property, plant and equipment, net on our consolidated balance sheets and as capital expenditures on our consolidated statements of cash flows. Under the new ASU, those capitalized costs are presented as other non-current assets on our consolidated balance sheets and within operating cash flows on our consolidated statements of cash flows. We adopted this ASU on a prospective basis and capitalized $45 million and $44 million of implementation costs related to hosting arrangements that are service contracts during the years ended December 31, 2021 and 2020, respectively. As of January 1, 2020, we adopted ASU No. 2017-04, Intangibles – Goodwill and Other, Simplifying the Test for Goodwill Impairment. This standard eliminates Step 2 of the goodwill impairment test and requires a goodwill impairment to be measured as the amount by which a reporting unit’s carrying amount exceeds its fair value, not to exceed the carrying amount of its goodwill. The adoption of this standard did not impact our consolidated financial statements. As of January 1, 2020, we adopted ASU No. 2018-14, Compensation – Retirement Benefits – Defined Benefit Plans – General (Topic 715-20): Disclosure Framework – Changes to the Disclosure Requirements for Defined Benefit Plans. This ASU amends ASC 715 to remove certain disclosures, clarify certain existing disclosures and add additional disclosures. The adoption of this standard did not have a material impact on our consolidated financial statements. As of January 1, 2019, we adopted ASU No. 2016-02, Leases (Topic 842). Under this guidance, lessees are required to recognize a right-of-use asset and a lease liability on the balance sheet for all operating leases, other than those that meet the definition of a short-term lease. We adopted Topic 842 using the modified retrospective method. We elected the following practical expedients when assessing the transition impact: i) not to reassess whether any expired or existing contracts as of the adoption date are or contain leases; ii) not to reassess the lease classification for any expired or existing leases as of the adoption date; and iii) not to reassess initial direct costs for any existing leases as of the adoption date. The impact to the consolidated statements of income was not material and there was no net impact to the consolidated statements of cash flows. As of January 1, 2019, we adopted ASU No. 2018-02, Reclassification of Certain Tax Effects from AOCI. This guidance provides for a reclassification of certain tax effects from AOCI to retained earnings. The impact of the adoption of this standard was a $161 million increase to retained earnings. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Contract with Customer, Contract Asset | The following table summarizes our contract assets: as of December 31 (in millions) 2021 2020 Contract manufacturing services $ 50 $ 47 Software sales 45 40 Bundled equipment and consumable medical products contracts 100 47 Contract assets $ 195 $ 134 The following table summarizes the classification of contract assets and contract liabilities as reported in the consolidated balance sheet: as of December 31 (in millions) 2021 2020 Prepaid expenses and other current assets $ 84 $ 70 Other non-current assets 111 64 Contract assets $ 195 $ 134 Accrued expenses and other current liabilities $ 162 $ 32 Other non-current liabilities 84 34 Contract liabilities $ 246 $ 66 |
Disaggregation of Revenue | The following tables disaggregate our net sales from contracts with customers by product category between the U.S. and international: 2021 2020 2019 years ended December 31 (in millions) U.S. International Total U.S. International Total U.S. International Total Renal Care 1 $ 890 $ 3,010 $ 3,900 $ 848 $ 2,909 $ 3,757 $ 791 $ 2,848 $ 3,639 Medication Delivery 2 1,859 1,021 2,880 1,738 953 2,691 1,762 977 2,739 Pharmaceuticals 3 753 1,538 2,291 849 1,249 2,098 904 1,215 2,119 Clinical Nutrition 4 343 621 964 330 580 910 308 552 860 Advanced Surgery 5 545 432 977 516 370 886 533 342 875 Acute Therapies 6 287 495 782 286 454 740 184 351 535 BioPharma Solutions 7 273 396 669 234 252 486 257 212 469 Patient Support Systems 8 86 29 115 — — — — — — Front Line Care 9 51 19 70 — — — — — — Surgical Solutions 10 12 15 27 — — — — — — Other 11 81 28 109 77 28 105 87 39 126 Total Baxter $ 5,180 $ 7,604 $ 12,784 $ 4,878 $ 6,795 $ 11,673 $ 4,826 $ 6,536 $ 11,362 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. 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. |
Schedule of New Accounting Standards | The following table summarizes the allowance for doubtful accounts. years ended December 31 2021 2020 Balance at beginning of period $ 125 $ 112 Acquisition 13 — Adoption of new accounting standard — 4 Charged to costs and expenses (2) 11 Write-offs (5) (4) Currency translation adjustments (9) 2 Balance at end of period $ 122 $ 125 |
ACQUISITIONS AND OTHER ARRANG_2
ACQUISITIONS AND OTHER ARRANGEMENTS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Total Consideration | The following table summarizes the fair value of consideration transferred: (in millions) Cash consideration transferred $ 190 Contingent consideration 18 Total consideration $ 208 |
Summary of Fair Value of Assets Acquired and Liabilities Assumed | The following table summarizes the preliminary fair values of the assets acquired and liabilities assumed as of the acquisition date: (in millions) Assets acquired and liabilities assumed Cash and cash equivalents $ 399 Accounts receivable 591 Inventories 560 Prepaid expenses and other current assets 49 Property, plant and equipment 503 Goodwill 6,785 Other intangible assets 6,022 Operating lease right-of-use assets 74 Other non-current assets 128 Short-term debt (250) Accounts payable (140) Accrued expenses and other current liabilities (552) Long-term debt and finance lease obligations (2,118) Operating lease liabilities (57) Other non-current liabilities (1,518) Total assets acquired and liabilities assumed $ 10,476 The following table summarizes the fair values of the assets acquired and liabilities assumed as of the acquisition date: (in millions) Assets acquired and liabilities assumed Cash $ 2 Accounts receivable, net 3 Inventories 1 Prepaid expenses and other current assets 1 Property, plant and equipment 1 Goodwill 84 Other intangible assets 131 Operating lease right-of-use assets 1 Accounts payable and accrued liabilities (4) Other non-current liabilities (12) Total assets acquired and liabilities assumed $ 208 |
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: years ended December 31 (in millions) 2021 2020 Net sales $ 15,574 $ 14,610 Net income attributable to Baxter stockholders 962 635 |
Schedule of Business Acquisitions, by Acquisition | The following table summarizes the fair value of the total consideration paid: (in millions) Cash consideration paid to Hillrom shareholders (a) $ 10,474 Fair value of equity awards issued to Hillrom equity award holders (b) 2 Total Consideration $ 10,476 (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. |
Asset Acquisition | The following table summarizes the fair value of the consideration transferred: (in millions) Cash $ 25 Contingent Consideration 28 Total Consideration $ 53 The following table summarizes the fair value of the assets acquired as of the acquisition date: (in millions) Assets acquired Goodwill $ 4 Other intangible assets 49 Total assets acquired $ 53 The following table summarizes the fair value of the consideration transferred: (in millions) Cash $ 60 Contingent Consideration 24 Total Consideration $ 84 The following table summarizes the fair value of the assets acquired as of the acquisition date: (in millions) Assets acquired Inventory $ 16 Goodwill 1 Other intangible assets 67 Total assets acquired $ 84 The following table summarizes the fair values of the assets acquired as of the acquisition date: (in millions) Assets acquired Inventories $ 18 Goodwill 28 Other intangible assets 296 Total assets acquired $ 342 |
SUPPLEMENTAL FINANCIAL INFORM_2
SUPPLEMENTAL FINANCIAL INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Inventories | Inventories as of December 31 (in millions) 2021 2020 Raw materials $ 591 $ 460 Work in process 300 196 Finished goods 1,562 1,260 Inventories $ 2,453 $ 1,916 |
Prepaid Expenses and Other | Prepaid Expenses and Other Current Assets as of December 31 (in millions) 2021 2020 Prepaid value added taxes $ 199 $ 163 Prepaid income taxes 166 183 Contract assets 84 70 Other 390 342 Prepaid expenses and other current assets $ 839 $ 758 |
Property, Plant and Equipment, Net | Property, Plant and Equipment, Net as of December 31 (in millions) 2021 2020 Land and land improvements $ 172 $ 166 Buildings and leasehold improvements 1,915 1,849 Machinery and equipment 7,097 6,884 Equipment on lease with customers 1,684 1,671 Construction in progress 860 701 Total property, plant and equipment, at cost 11,728 11,271 Accumulated depreciation (6,550) (6,549) Property, plant and equipment, net $ 5,178 $ 4,722 |
Other Long-Term Assets | as of December 31 (in millions) 2021 2020 Deferred tax assets $ 376 $ 748 Non-current receivables, net 113 158 Contract assets 111 64 Capitalized implementation costs in hosting arrangements 99 68 Pension and other postretirement benefits 228 155 Investments 154 135 Other 132 67 Other non-current assets $ 1,213 $ 1,395 |
Accounts Payable and Accrued Liabilities | as of December 31 (in millions) 2021 2020 Common stock dividends payable $ 140 $ 125 Employee compensation and withholdings 608 415 Property, payroll and certain other taxes 174 148 Contract liabilities 162 32 Restructuring liabilities 97 92 Accrued rebates 312 239 Operating lease liabilities 128 111 Income taxes payable 90 135 Pension and other postretirement benefits 46 48 Contingent payments related to acquisitions 21 16 Other 701 523 Accrued expenses and other current liabilities $ 2,479 $ 1,884 |
Other Long-Term Liabilities | as of December 31 (in millions) 2021 2020 Pension and other postretirement benefits $ 1,052 $ 1,214 Deferred tax liabilities 962 143 Long-term tax liabilities 80 84 Contingent payments related to acquisitions 122 14 Contract liabilities 84 34 Litigation and environmental reserves 28 29 Restructuring liabilities 12 21 Other 153 134 Other non-current liabilities $ 2,493 $ 1,673 |
Net Interest Expense | years ended December 31 (in millions) 2021 2020 2019 Interest costs $ 217 $ 162 $ 120 Interest costs capitalized (11) (9) (9) Interest expense 206 153 111 Interest income (14) (19) (40) Interest expense, net $ 192 $ 134 $ 71 |
Other (Income) Expense, Net | years ended December 31 (in millions) 2021 2020 2019 Foreign exchange (gains) losses, net $ 19 $ 49 $ 37 Change in fair value of marketable equity securities 7 (13) (1) Loss on debt extinguishment 5 110 — Pension settlements 2 46 755 Pension and other postretirement benefit plans 11 (3) (53) Other, net (3) 1 (7) Other expense, net $ 41 $ 190 $ 731 |
Supplemental Cash Flow Information | year ended December 31 (in millions) 2021 2020 2019 Interest paid, net of portion capitalized $ 145 $ 137 $ 103 Income taxes paid $ 282 $ 249 $ 294 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS, NET (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | The following is a reconciliation of goodwill by business segment. (in millions) Americas EMEA APAC Hillrom Total December 31, 2019 $ 2,428 $ 385 $ 217 $ — $ 3,030 Additions 26 1 7 — 34 Acquisition accounting adjustments (45) (6) (2) — (53) Currency translation 165 26 15 — 206 December 31, 2020 $ 2,574 $ 406 $ 237 $ — $ 3,217 Reallocation of goodwill 81 (81) — — — Additions 4 1 — 6,785 6,790 Currency translation (142) (17) (13) 1 (171) December 31, 2021 $ 2,517 $ 309 $ 224 $ 6,786 $ 9,836 |
Other Intangible Assets, Net | The following is a summary of our other intangible assets. (in millions) Developed technology, Other amortized Customer relationships Indefinite-lived Total December 31, 2021 Gross other intangible assets $ 3,801 $ 344 $ 3,437 $ 2,140 $ 9,722 Accumulated amortization (1,556) (212) (162) — $ (1,930) Other intangible assets, net $ 2,245 $ 132 $ 3,275 $ 2,140 $ 7,792 December 31, 2020 Gross other intangible assets $ 2,713 $ 269 $ 226 $ 169 $ 3,377 Accumulated amortization (1,374) (193) (139) — $ (1,706) Other intangible assets, net $ 1,339 $ 76 $ 87 $ 169 $ 1,671 |
DEBT AND CREDIT FACILITIES (Tab
DEBT AND CREDIT FACILITIES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Debt Outstanding | At December 31, 2021 and 2020, we had the following debt outstanding: as of December 31 (in millions) Effective interest rate in 2021¹ 2021 1 2020 1 Commercial paper 0.3 % $ 300 $ — 1.7% notes due 2021 1.9 % — 400 2.4% notes due 2022 2.5 % 203 203 0.868% notes due 2023 1.2 % 797 — Floating-rate notes due 2023 1.9 % 298 — 0.4% notes due 2024 0.6 % 846 915 1.322% notes due 2024 1.7 % 1,393 — 7.0% notes due 2024 7.0 % 13 — Floating-rate notes due 2024 0.9 % 298 — Term loan due 2024 1.8 % 1,998 — 1.3% notes due in 2025 1.4 % 678 734 2.6% notes due 2026 2.7 % 747 746 Term loan due 2026 1.9 % 1,998 — 7.65% debentures due 2027 7.7 % 5 5 1.915% notes due 2027 2.2 % 1,441 — 6.625% debentures due 2028 5.6 % 96 97 2.272% notes due 2028 2.5 % 1,241 — 1.3% notes due 2029 1.4 % 841 912 3.95% notes due 2030 4.0 % 495 495 1.73% notes due 2031 3.2 % 644 644 2.539% notes due 2032 2.7 % 1,537 — 6.25% notes due 2037 6.3 % 265 265 3.65% notes due 2042 3.7 % 6 6 4.5% notes due 2043 4.6 % 256 256 3.5% notes due 2046 3.6 % 441 440 3.132% notes due 2051 3.2 % 742 — Finance leases and other 9.3 % 81 74 Total debt 17,660 6,192 Short-term debt (301) — Current maturities of long-term debt and finance lease obligations (210) (406) Long-term debt and finance lease obligations $ 17,149 $ 5,786 1 Book values include any discounts, premiums and adjustments related to hedging instruments and effective interest rates reflect amortization of those items. |
Schedule of Maturities of Long-term Debt | Future Debt Maturities as of and for the years ended December 31 (in millions) Debt maturities 2022 $ 513 2023 1,108 2024 4,567 2025 684 2026 2,754 Thereafter 8,128 Total obligations and commitments 17,754 Discounts, premiums, and adjustments relating to hedging instruments (94) Total debt $ 17,660 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
Lease, Cost | The components of lease cost for the years ended December 31, 2021, 2020 and 2019 were: (in millions) 2021 2020 2019 Operating lease cost $ 114 $ 115 $ 121 Finance lease cost Amortization of right-of-use assets 7 5 5 Interest on lease liabilities 5 5 5 Variable lease cost 52 54 89 Lease cost $ 178 $ 179 $ 220 The following table contains supplemental cash flow information related to leases for the years ended December 31, 2021, 2020 and 2019: (in millions) 2021 2020 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 124 $ 127 $ 119 Operating cash flows from finance leases 5 4 4 Financing cash flows from finance leases 4 4 4 Right-of-use operating lease assets obtained in exchange for lease obligations 71 67 207 Right-of-use finance lease assets obtained in exchange for lease obligations 4 8 — Lease term and discount rates as of December 31, 2021 and 2020 were: December 31, 2021 December 31, 2020 Weighted-average remaining lease term (years) Operating leases 8 9 Finance leases 12 13 Weighted-average discount rate Operating leases 1.8 % 2.2 % Finance leases 9.3 % 10.3 % |
Assets And Liabilities, Lessee | Supplemental balance sheet information related to leases as of December 31, 2021 and 2020 include: (in millions) 2021 2020 Operating leases Operating lease right-of-use assets $ 630 $ 603 Accrued expenses and other current liabilities $ 128 $ 111 Operating lease liabilities 522 501 Total operating lease liabilities $ 650 $ 612 Finance leases Property, plant and equipment, at cost $ 86 $ 76 Accumulated depreciation (31) (28) Property, plant and equipment, net $ 55 $ 48 Current maturities of long-term debt and finance lease obligations $ 2 $ 1 Long-term debt and finance lease obligations 68 64 Total finance lease liabilities $ 70 $ 65 |
Lessee, Operating Lease, Liability, Maturity | Maturities of operating and finance lease liabilities as of December 31, 2021 were: (in millions) Finance Leases Operating Leases 2022 $ 10 $ 141 2023 9 118 2024 9 95 2025 9 76 2026 9 60 Thereafter 72 216 Total minimum lease payments 118 706 Less: imputed interest (48) (56) Present value of lease liabilities $ 70 $ 650 |
Finance Lease, Liability, Maturity | Maturities of operating and finance lease liabilities as of December 31, 2021 were: (in millions) Finance Leases Operating Leases 2022 $ 10 $ 141 2023 9 118 2024 9 95 2025 9 76 2026 9 60 Thereafter 72 216 Total minimum lease payments 118 706 Less: imputed interest (48) (56) Present value of lease liabilities $ 70 $ 650 |
Operating Lease, Lease Income | The components of lease revenue for the years ended December 31, 2021, 2020 and 2019 were: (in millions) 2021 2020 2019 Sales-type lease revenue $ 27 $ 38 $ 35 Operating lease revenue 136 84 61 Variable lease revenue 79 80 85 Total lease revenue $ 242 $ 202 $ 181 |
Sales-type Lease, Lease Income | The components of our net investment in sales-type leases as of December 31, 2021 and 2020 were: (in millions) 2021 2020 Minimum lease payments $ 111 $ 122 Unguaranteed residual values 4 12 Net investment in leases $ 115 $ 134 Our net investment in sales-type leases is classified as follows in the accompanying consolidated balance sheets: (in millions) December 31, 2021 December 31, 2020 Accounts receivable, net $ 40 $ 39 Other non-current assets 75 95 Total $ 115 $ 134 |
Sales-type and Direct Financing Leases, Lease Receivable, Maturity | Maturities of sales-type and operating leases as of December 31, 2021 were: (in millions) Sales-type Leases Operating Leases 2022 $ 43 $ 87 2023 32 79 2024 22 75 2025 12 60 2026 5 11 Thereafter 1 2 Total minimum lease payments 115 $ 314 Less: imputed interest (4) Present value of minimum lease payments $ 111 |
Lessor, Operating Lease, Payments to be Received, Maturity | Maturities of sales-type and operating leases as of December 31, 2021 were: (in millions) Sales-type Leases Operating Leases 2022 $ 43 $ 87 2023 32 79 2024 22 75 2025 12 60 2026 5 11 Thereafter 1 2 Total minimum lease payments 115 $ 314 Less: imputed interest (4) Present value of minimum lease payments $ 111 |
STOCKHOLDERS_ EQUITY (Tables)
STOCKHOLDERS’ EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
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: years ended December 31 2021 2020 2019 Expected volatility 24 % 26 % 19 % Expected life (in years) 5.5 5.5 5.5 Risk-free interest rate 0.8 % 0.6 % 2.5 % Dividend yield 1.3 % 1.2 % 1.0 % Fair value per stock option $ 16 $ 16 $ 15 |
Summary of Stock Option Activity | The following table summarizes stock option activity for the year ended December 31, 2021 and the outstanding stock options as of December 31, 2021. (options and aggregate intrinsic values in thousands) Options Weighted- Weighted- Aggregate Outstanding as of January 1, 2021 20,196 $ 56.88 Granted 4,034 $ 77.32 Exercised (2,759) $ 49.68 Forfeited (729) $ 76.33 Expired (46) $ 53.75 Outstanding as of December 31, 2021 20,696 $ 61.14 5.9 $ 511,187 Vested or expected to vest as of December 31, 2021 20,391 $ 60.91 5.9 $ 508,645 Exercisable as of December 31, 2021 13,821 $ 53.46 4.6 $ 447,799 |
Summary of Nonvested RSU Activity | The following table summarizes nonvested RSU activity for the year ended December 31, 2021. (share units in thousands) Share units Weighted- Nonvested RSUs as of January 1, 2021 1,138 $ 73.11 Granted 714 $ 77.84 Replacement RSUs granted in acquisition 668 $ 80.86 Vested (591) $ 71.63 Forfeited (131) $ 77.75 Nonvested RSUs as of December 31, 2021 1,798 $ 78.01 |
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: years ended December 31 2021 2020 2019 Baxter volatility 28 % 26 % 19 % Peer group volatility 26%-81% 23%-95% 18%-113% Correlation of returns 0.05-0.65 0.19-0.70 0.13-0.63 Risk-free interest rate 0.3 % 0.4 % 2.5 % Fair value per PSU $ 86 $ 108 $ 106 |
Summary of Nonvested Performance Stock Unit Activity | The following table summarizes nonvested PSU activity for the year ended December 31, 2021. (share units in thousands) Share units Weighted- Nonvested PSUs as of January 1, 2021 760 $ 86.69 Granted 241 $ 78.24 Vested (178) $ 78.41 Forfeited (91) $ 87.63 Nonvested PSUs as of December 31, 2021 732 $ 85.87 |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE INCOME (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
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, 2021 and 2020. (in millions) CTA Pension and OPEB plans Hedging Total Gains (losses) Balance as of December 31, 2020 $ (2,587) $ (574) $ (153) $ (3,314) Other comprehensive (loss) income before reclassifications (320) 160 4 (156) Amounts reclassified from AOCI (a) — 67 23 90 Net other comprehensive (loss) income (320) 227 27 (66) Balance as of December 31, 2021 $ (2,907) $ (347) $ (126) $ (3,380) (in millions) CTA Pension and OPEB plans Hedging Total Gains (losses) Balance as of December 31, 2019 $ (2,954) $ (715) $ (41) $ (3,710) Other comprehensive income (loss) before reclassifications 367 59 (117) 309 Amounts reclassified from AOCI (a) — 82 5 87 Net other comprehensive (loss) income 367 141 (112) 396 Balance as of December 31, 2020 $ (2,587) $ (574) $ (153) $ (3,314) (a) See table below for details about these reclassifications. |
Summary of Reclassification from AOCI to Net Income | The following table is a summary of the amounts reclassified from AOCI to net income during the years ended December 31, 2021 and 2020. Amounts reclassified from AOCI (a) (in millions) 2021 2020 Location of impact Pension and OPEB items Amortization of net losses and prior service costs or credits $ (82) $ (59) Other expense, net Settlement charges (2) (46) Other expense, net (84) (105) Total before tax Less: Tax effect 17 23 Income tax expense $ (67) $ (82) Net of tax Gains (losses) on hedging activities Foreign exchange contracts $ (23) $ (5) Cost of sales Interest rate contracts (6) (1) Interest expense, net (29) (6) Total before tax Less: Tax effect 6 1 Income tax expense $ (23) $ (5) Net of tax Total reclassification for the period $ (90) $ (87) Total net of tax (a) Amounts in parentheses indicate reductions to net income. |
REVENUES (Tables)
REVENUES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Contract with Customer, Contract Asset | The following table summarizes our contract assets: as of December 31 (in millions) 2021 2020 Contract manufacturing services $ 50 $ 47 Software sales 45 40 Bundled equipment and consumable medical products contracts 100 47 Contract assets $ 195 $ 134 The following table summarizes the classification of contract assets and contract liabilities as reported in the consolidated balance sheet: as of December 31 (in millions) 2021 2020 Prepaid expenses and other current assets $ 84 $ 70 Other non-current assets 111 64 Contract assets $ 195 $ 134 Accrued expenses and other current liabilities $ 162 $ 32 Other non-current liabilities 84 34 Contract liabilities $ 246 $ 66 |
Disaggregation of Revenue | The following tables disaggregate our net sales from contracts with customers by product category between the U.S. and international: 2021 2020 2019 years ended December 31 (in millions) U.S. International Total U.S. International Total U.S. International Total Renal Care 1 $ 890 $ 3,010 $ 3,900 $ 848 $ 2,909 $ 3,757 $ 791 $ 2,848 $ 3,639 Medication Delivery 2 1,859 1,021 2,880 1,738 953 2,691 1,762 977 2,739 Pharmaceuticals 3 753 1,538 2,291 849 1,249 2,098 904 1,215 2,119 Clinical Nutrition 4 343 621 964 330 580 910 308 552 860 Advanced Surgery 5 545 432 977 516 370 886 533 342 875 Acute Therapies 6 287 495 782 286 454 740 184 351 535 BioPharma Solutions 7 273 396 669 234 252 486 257 212 469 Patient Support Systems 8 86 29 115 — — — — — — Front Line Care 9 51 19 70 — — — — — — Surgical Solutions 10 12 15 27 — — — — — — Other 11 81 28 109 77 28 105 87 39 126 Total Baxter $ 5,180 $ 7,604 $ 12,784 $ 4,878 $ 6,795 $ 11,673 $ 4,826 $ 6,536 $ 11,362 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. 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. |
BUSINESS OPTIMIZATION CHARGES (
BUSINESS OPTIMIZATION CHARGES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Restructuring and Related Activities [Abstract] | |
Business Optimization Charges | We recorded the following charges related to business optimization programs in 2021, 2020, and 2019: years ended December 31 (in millions) 2021 2020 2019 Restructuring charges $ 91 $ 111 $ 134 Costs to implement business optimization programs 23 23 45 Accelerated depreciation — — 5 Total business optimization charges $ 114 $ 134 $ 184 |
Components of Restructuring Costs | During the years ended December 31, 2021, 2020 and 2019, we recorded the following restructuring charges: 2021 (in millions) COGS SG&A R&D Total Employee termination costs $ 37 $ 35 $ 1 $ 73 Contract termination and other costs — 2 — 2 Asset impairments 16 — — 16 Total restructuring charges $ 53 $ 37 $ 1 $ 91 2020 (in millions) COGS SG&A R&D Total Employee termination costs $ 36 $ 54 $ 2 $ 92 Contract termination and other costs 4 4 — 8 Asset impairments 8 3 — 11 Total restructuring charges $ 48 $ 61 $ 2 $ 111 2019 (in millions) COGS SG&A R&D Total Employee termination costs $ 13 $ 37 $ 25 $ 75 Contract termination and other costs 10 1 — 11 Asset impairments 37 2 9 48 Total restructuring charges $ 60 $ 40 $ 34 $ 134 |
Summary of Activity in Reserves related to Business Optimization Initiatives | The following table summarizes activity in the liability related to our restructuring initiatives. (in millions) Liability balance as of December 31, 2018 $ 101 Charges 113 Payments (93) Reserve adjustments (27) Currency translation (2) Liability balance as of December 31, 2019 92 Charges 116 Payments (86) Reserve adjustments (16) Currency translation 7 Liability balance as of December 31, 2020 113 Assumed in acquisition 6 Charges 94 Payments (78) Reserve adjustments (19) Currency translation (7) Liability balance as of December 31, 2021 $ 109 |
PENSION AND OTHER POSTRETIREM_2
PENSION AND OTHER POSTRETIREMENT BENEFIT PROGRAMS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
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. Pension benefits OPEB as of and for the years ended December 31 (in millions) 2021 2020 2021 2020 Benefit obligations Beginning of period $ 4,313 $ 3,973 $ 228 $ 228 Service cost 87 83 1 1 Interest cost 72 95 4 6 Participant contributions 4 4 — — Actuarial (gain) loss (186) 401 (14) 13 Benefit payments (103) (109) (19) (20) Settlements (13) (271) — — Curtailment (5) (4) — — Acquisitions 364 — 11 — Plan Amendments 15 — — — Foreign exchange and other (105) 141 — — End of period 4,443 4,313 211 228 Fair value of plan assets Beginning of period 3,434 2,973 — — Actual return on plan assets 141 688 — — Employer contributions 73 74 19 20 Participant contributions 4 4 — — Benefit payments (103) (109) (19) (20) Settlements (13) (271) — — Acquisitions 305 — — — Foreign exchange and other (57) 75 — — End of period 3,784 3,434 — — Funded status at December 31 $ (659) $ (879) $ (211) $ (228) Amounts recognized in the consolidated balance sheets Noncurrent asset $ 228 $ 155 $ — $ — Current liability (29) (30) (17) (18) Noncurrent liability (858) (1,004) (194) (210) Net liability recognized at December 31 $ (659) $ (879) $ (211) $ (228) |
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. as of December 31 (in millions) 2021 2020 ABO $ 2,991 $ 2,920 Fair value of plan assets $ 2,209 $ 2,047 |
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). as of December 31 (in millions) 2021 2020 PBO $ 3,254 $ 3,421 Fair value of plan assets $ 2,366 $ 2,387 |
Expected Net Pension and OPEB Plan Payments for Next 10 Years | (in millions) Pension benefits OPEB 2022 $ 126 $ 19 2023 146 17 2024 161 17 2025 166 16 2026 179 15 2027 through 2031 1,018 64 Total expected net benefit payments for next 10 years $ 1,796 $ 148 |
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, 2021 and December 31, 2020. (in millions) Pension benefits OPEB Actuarial loss (gain) $ 509 $ (37) Prior service credit and transition obligation 8 (36) Total pre-tax loss (gain) recognized in AOCI at December 31, 2021 $ 517 $ (73) Actuarial loss (gain) $ 811 $ (23) Prior service credit and transition obligation (9) (45) Total pre-tax loss (gain) recognized in AOCI at December 31, 2020 $ 802 $ (68) |
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. Year ended December 31 (in millions) 2021 2020 2019 Gain (loss) arising during the year, net of tax of $43 in 2021, $17 in 2020 and $(64) in 2019 $ 160 $ 59 $ (184) Amortization of loss to earnings, net of tax of $17 in 2021, $12 in 2020 and $6 in 2019 65 47 25 Settlement charges, net of tax of $0 in 2021, $11 in 2020 and $188 in 2019 2 35 567 Pension and other employee benefits $ 227 $ 141 $ 408 |
Net Periodic Benefit Cost - Continuing Operations | Year ended December 31 (in millions) 2021 2020 2019 Pension benefits Service cost $ 87 $ 83 $ 74 Interest cost 72 95 172 Expected return on plan assets (143) (163) (264) Amortization of net losses and other deferred amounts 91 77 58 Settlement charges 2 46 755 Other (4) — — Net periodic pension benefit cost $ 105 $ 138 $ 795 OPEB Service cost $ 1 $ 1 $ 1 Interest cost 4 6 8 Amortization of net losses and prior service credit (9) (18) (27) Net periodic OPEB cost $ (4) $ (11) $ (18) |
Weighted-Average Assumptions Used in Determining Benefit Obligations at Measurement Date | Pension benefits OPEB 2021 2020 2021 2020 Discount rate U.S. and Puerto Rico plans 3.01 % 2.73 % 2.76 % 2.33 % International plans 1.47 % 1.00 % n/a n/a Rate of compensation increase U.S. and Puerto Rico plans 3.68 % 3.68 % n/a n/a International plans 3.11 % 3.03 % n/a n/a Annual rate of increase in the per-capita cost n/a n/a 6.25 % 6.50 % Rate decreased to n/a n/a 5.00 % 5.00 % by the year ended n/a n/a 2027 2027 Pension benefits OPEB 2021 2020 2019 2021 2020 2019 Discount rate U.S. and Puerto Rico plans 2.73 % 3.44 % 4.18 % 2.33 % 3.16 % 4.20 % International plans 1.00 % 1.34 % 2.02 % n/a n/a n/a Expected return on plan assets U.S. and Puerto Rico plans 5.50 % 6.50 % 6.29 % n/a n/a n/a International plans 3.58 % 4.23 % 5.45 % n/a n/a n/a Rate of compensation increase U.S. and Puerto Rico plans 3.68 % 3.68 % 3.66 % n/a n/a n/a International plans 3.03 % 3.03 % 3.08 % n/a n/a n/a Annual rate of increase in the per-capita cost n/a n/a n/a 6.25 % 6.50 % 6.75 % Rate decreased to n/a n/a n/a 5.00 % 5.00 % 5.00 % by the year ended n/a n/a n/a 2027 2027 2027 |
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. Basis of fair value measurement (in millions) Balance at December 31, 2021 Quoted prices Significant Significant Measured at NAV (a) Assets Fixed income securities Cash and cash equivalents $ 368 $ 50 $ 318 $ — $ — U.S. government and government agency issues 271 — 271 — — Corporate bonds 573 — 573 — — Equity securities Common stock 452 452 — — — Mutual funds 521 235 286 — — Common/collective trust funds 1,118 — 358 — 760 Partnership investments 329 — — — 329 Other holdings 152 21 122 9 — Fair value of pension plan assets $ 3,784 $ 758 $ 1,928 $ 9 $ 1,089 (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. Basis of fair value measurement (in millions) Balance at December 31, 2020 Quoted prices Significant Significant Measured at NAV (a) Assets Fixed income securities Cash and cash equivalents $ 265 $ 91 $ 174 $ — $ — U.S. government and government agency issues 280 — 280 — — Corporate bonds 744 — 744 — — Equity securities Common stock 453 453 — — — Mutual funds 510 217 293 — — Common/collective trust funds 771 — 341 — 430 Partnership investments 296 — — — 296 Other holdings 115 22 82 11 — Collateral held on loaned securities 19 — 19 — — Liabilities Collateral to be paid on loaned securities (19) (19) — — — Fair value of pension plan assets $ 3,434 $ 764 $ 1,933 $ 11 $ 726 (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. |
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). (in millions) Other Balance at December 31, 2019 $ 10 Purchases 1 Balance at December 31, 2020 11 Sales (2) Balance at December 31, 2021 $ 9 |
Funded Status Percentage of Pension Plans | The following table details the funded status percentage of our pension plans as of December 31, 2021, including certain plans that are unfunded in accordance with the guidelines of our funding policy outlined above. United States and Puerto Rico International as of December 31, 2021 (in millions) Qualified Nonqualified Funded Unfunded Total Fair value of plan assets $ 2,700 n/a $ 1,084 n/a $ 3,784 PBO 2,713 $ 257 1,015 $ 458 4,443 Funded status percentage 100 % n/a 107 % n/a 85 % |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Before Income Tax Expense by Category | years ended December 31 (in millions) 2021 2020 2019 United States $ (424) $ (329) $ (586) International 1,901 1,621 1,556 Income before income taxes $ 1,477 $ 1,292 $ 970 |
Income Tax Expense | years ended December 31 (in millions) 2021 2020 2019 Current United States Federal $ (11) $ 7 $ 8 State and local 10 (7) 3 International 329 270 258 Current income tax expense 328 270 269 Deferred United States Federal (103) (99) (140) State and local (8) 5 (29) International (35) 6 (141) Deferred income tax expense (benefit) (146) (88) (310) Income tax expense (benefit) $ 182 $ 182 $ (41) |
Deferred Tax Assets and Liabilities | as of December 31 (in millions) 2021 2020 Deferred tax assets Accrued liabilities and other $ 434 $ 376 Pension and other postretirement benefits 174 218 Tax credit and net operating loss carryforwards 939 905 Swiss tax reform net asset basis step-up 161 174 Operating lease liabilities 155 148 Valuation allowances (401) (454) Total deferred tax assets 1,462 1,367 Deferred tax liabilities Subsidiaries’ unremitted earnings 66 77 Long-lived assets and other 1,831 539 Operating lease right-of-use assets 151 146 Total deferred tax liabilities 2,048 762 Net deferred tax asset (liability) $ (586) $ 605 |
Income Tax Expense (Benefit) Reconciliation | Income Tax Expense (Benefit) Reconciliation years ended December 31 (in millions) 2021 2020 2019 Income tax expense at U.S. statutory rate $ 310 $ 271 $ 204 Tax incentives (193) (169) (140) State and local taxes, net of federal benefit 10 (2) (17) Impact of foreign taxes 103 88 65 Tax-deductible foreign statutory loss on an investment in a foreign subsidiary (58) — — Unfavorable court decision in a foreign jurisdiction related to an uncertain tax position 22 — — Swiss tax reform net asset basis step-up — — (159) Deferred tax revaluation due to 2017 Tax Act and foreign tax reform — — (19) Transition tax due to 2017 Tax Act — — (16) Valuation allowances (61) 8 110 Stock compensation windfall tax benefits (13) (27) (54) Research and development tax credits (5) (7) (13) Unutilized foreign tax credits 14 15 5 Other, net 53 5 (7) Income tax expense (benefit) $ 182 $ 182 $ (41) |
Reconciliation of Unrecognized Tax Benefits | The following table is a reconciliation of our unrecognized tax benefits, including those related to discontinued operations, for the years ended December 31, 2021, 2020 and 2019. as of and for the years ended (in millions) 2021 2020 2019 Balance at beginning of the year $ 90 $ 111 $ 127 Increase due to acquisition 11 — — Increase associated with tax positions taken during the current year 31 8 8 Increase (decrease) associated with tax positions taken during a prior year (3) (1) (3) Settlements (2) (18) (20) Decrease associated with lapses in statutes of limitations (16) (10) (1) Balance at end of the year $ 111 $ 90 $ 111 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
Reconciliation of Basic Shares to Diluted Shares | The following table is a reconciliation of basic shares to diluted shares. years ended December 31(in millions) 2021 2020 2019 Basic shares 502 509 509 Effect of dilutive securities 6 8 10 Diluted shares 508 517 519 |
FINANCIAL INSTRUMENTS, DERIVA_2
FINANCIAL INSTRUMENTS, DERIVATIVES AND HEDGING ACTIVITIES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
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. as of and for the years ended December 31 (in millions) 2021 2020 2019 Sold receivables at beginning of year $ 96 $ 79 $ 69 Proceeds from sales of receivables 339 348 292 Cash collections (remitted to the owners of the receivables) (346) (335) (282) Effect of foreign exchange rate changes (8) 4 — Sold receivables at end of year $ 81 $ 96 $ 79 |
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, 2021, 2020, and 2019. (in millions) Gain (loss) Location of gain Gain (loss) reclassified from 2021 2020 2019 2021 2020 2019 Cash flow hedges Interest rate contracts $ — $ (131) $ (37) Interest expense, net $ (6) $ (1) $ — Foreign exchange contracts 5 (21) (9) Cost of sales (23) (5) 4 Net investment hedges 200 (224) 12 Other expense, net — — — Total $ 205 $ (376) $ (34) $ (29) $ (6) $ 4 Location of gain (loss) in Gain (loss) recognized (in millions) 2021 2020 2019 Undesignated derivative instruments Foreign exchange contracts Other expense, net $ (36) $ 49 $ 17 |
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. as of and for the year ended December 31 (in millions) 2021 2020 2019 Accumulated other comprehensive income (loss) balance at beginning of year $ (153) $ (41) $ (1) Adoption of new accounting standard — — (1) (Loss) gain in fair value of derivatives during the year 4 (117) (36) Amount reclassified to earnings during the year 23 5 (3) Accumulated other comprehensive income (loss) balance at end of year $ (126) $ (153) $ (41) |
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, 2021. 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 $ 6 Accrued expenses and other current liabilities $ 3 Total derivative instruments designated as hedges 6 3 Undesignated derivative instruments Foreign exchange contracts Prepaid expenses and other current assets 2 Accrued expenses and other current liabilities 2 Total derivative instruments $ 8 $ 5 The following table summarizes the classification and fair values of derivative instruments reported in the consolidated balance sheet as of December 31, 2020. 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 17 Total derivative instruments designated as hedges — 17 Undesignated derivative instruments Foreign exchange contracts Prepaid expenses and other current assets 11 Accrued expenses and other current liabilities 2 Total derivative instruments $ 11 $ 19 |
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. December 31, 2021 December 31, 2020 (in millions) Asset Liability Asset Liability Gross amounts recognized in the consolidated balance sheets $ 8 $ 5 $ 11 $ 19 Gross amount subject to offset in master netting arrangements not offset in the consolidated balance sheets (2) (2) (6) (6) Total $ 6 $ 3 $ 5 $ 13 |
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: Carrying amount of hedged item Cumulative amount of fair value hedging adjustment included in the carrying amount of the hedged item (a) (in millions) Balance as of December 31, 2021 Balance as of December 31, 2020 Balance as of December 31, 2021 Balance as of December 31, 2020 Long-term debt $ 101 $ 102 $ 4 $ 5 (a) These fair value hedges were terminated in 2018 and earlier periods. |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
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. Basis of fair value measurement (in millions) Balance as of December 31, Quoted prices Significant Significant Assets Foreign exchange contracts $ 8 $ — $ 8 $ — Debt securities 30 — — 30 Marketable equity securities 10 10 — — Total $ 48 $ 10 $ 8 $ 30 Liabilities Foreign exchange contracts $ 5 $ — $ 5 $ — Contingent payments related to acquisitions 143 — — 143 Total $ 148 $ — $ 5 $ 143 Basis of fair value measurement (in millions) Balance as of December 31, Quoted prices Significant Significant Assets Foreign exchange contracts $ 11 $ — $ 11 $ — Debt securities 13 — 13 — Marketable equity securities 17 17 — — Total $ 41 $ 17 $ 24 $ — Liabilities Foreign exchange contracts $ 19 $ — $ 19 $ — Contingent payments related to acquisitions 30 — — 30 Total $ 49 $ — $ 19 $ 30 |
Reconciliation of Fair Value Measurements that Use Significant Unobservable Inputs | The following table is a reconciliation of our recurring fair value measurements that use significant unobservable inputs (Level 3), which consist of contingent payments related to acquisitions. as of and for the years ended December 31 (in millions) 2021 2020 Fair value at beginning of period $ 30 $ 39 Additions 135 4 Change in fair value recognized in earnings (6) (2) Payments (16) (11) Fair value at end of period $ 143 $ 30 |
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. Book values Fair values(a) as of December 31 (in millions) 2021 2020 2021 2020 Liabilities Short-term debt $ 301 $ — $ 301 $ — Current maturities of long-term debt and finance lease obligations 210 406 212 409 Long-term debt and finance lease obligations 17,149 5,786 17,568 6,471 (a) These fair value amounts are classified as Level 2 within the fair value hierarchy as they are estimated based on observable inputs. |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Segment Reporting [Abstract] | |
Segment Information | Financial information for our segments is as follows: for the years ended December 31 (in millions) 2021 2020 2019 Net sales: Americas $ 6,666 $ 6,321 $ 6,306 EMEA 3,115 2,877 2,756 APAC 2,791 2,475 2,300 Hillrom 212 — — Total net sales $ 12,784 $ 11,673 $ 11,362 Operating income: Americas $ 2,612 $ 2,389 $ 2,499 EMEA 632 523 527 APAC 623 591 549 Hillrom (80) — — Total segment operating income $ 3,787 $ 3,503 $ 3,575 Depreciation Expense: Americas $ 257 $ 249 $ 255 EMEA 147 150 149 APAC 98 94 85 Hillrom 4 — — Corporate and other 86 108 117 Total depreciation expense $ 592 $ 601 $ 606 Capital expenditures: Americas $ 394 $ 380 $ 325 EMEA 156 157 143 APAC 82 103 98 Hillrom 5 — — Corporate and other 72 84 120 Total capital expenditures $ 709 $ 724 $ 686 |
Operating Income to Income from Continuing Operations Reconciliation | The following table is a reconciliation of segment operating income to income before income taxes per the consolidated statements of income. for the years ended December 31 (in millions) 2021 2020 2019 Total segment operating income $ 3,787 $ 3,503 $ 3,575 Corporate and other (2,077) (1,887) (1,803) Total operating income 1,710 1,616 1,772 Net interest expense 192 134 71 Other expense, net 41 190 731 Income before income taxes $ 1,477 $ 1,292 $ 970 |
Geographic Information | for the years ended December 31 (in millions) 2021 2020 2019 Net sales: United States $ 5,180 $ 4,878 $ 4,826 Latin America and Canada 1,249 1,191 1,268 EMEA 3,552 3,129 2,968 APAC 2,803 2,475 2,300 Total net sales $ 12,784 $ 11,673 $ 11,362 as of December 31 (in millions) 2021 2020 Property, plant and equipment and operating lease right-of-use assets, net: United States $ 2,337 $ 1,888 EMEA 1,576 1,556 APAC 978 1,024 Latin America and Canada 917 857 Total property, plant and equipment and operating lease right-of-use assets, net $ 5,808 $ 5,325 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Nature of Operations - Additional Information (Details) | 12 Months Ended |
Dec. 31, 2021segment | |
Accounting Policies [Abstract] | |
Number of segments | 4 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Basis of Presentation - Additional Information (Details) - USD ($) | Dec. 13, 2021 | Jul. 29, 2021 | Mar. 31, 2021 | Feb. 17, 2021 | Feb. 14, 2020 | Oct. 25, 2019 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Summary Of Significant Accounting Policies [Line Items] | |||||||||
Cash | $ 743,000,000 | $ 709,000,000 | $ 696,000,000 | ||||||
Total cash consideration, net of cash acquired | 10,502,000,000 | $ 494,000,000 | $ 418,000,000 | ||||||
Cheetah Medical, Inc. | |||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||
Consideration transferred | $ 208,000,000 | ||||||||
Cash consideration transferred | 190,000,000 | ||||||||
Total assets acquired | $ 208,000,000 | ||||||||
Percentage of ownership acquired | 100.00% | ||||||||
Total cash consideration, net of cash acquired | $ 188,000,000 | ||||||||
Consideration transferred, additional potential amounts | 40,000,000 | ||||||||
Contingent Consideration | $ 18,000,000 | ||||||||
Hillrom | |||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||
Purchase price | $ 10,500,000,000 | ||||||||
Enterprise value | 12,800,000,000 | ||||||||
Consideration transferred | 10,476,000,000 | ||||||||
Cash consideration transferred | 10,474,000,000 | ||||||||
Total assets acquired | $ 10,476,000,000 | ||||||||
Total assets acquired | $ 142,000,000 | ||||||||
Seprafilm Adhesion Barrier | |||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||
Cash consideration transferred | $ 342,000,000 | ||||||||
Total assets acquired | 342,000,000 | ||||||||
PerClot | |||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||
Cash | $ 25,000,000 | ||||||||
Contingent consideration liability | 36,000,000 | ||||||||
Total assets acquired | 53,000,000 | ||||||||
Contingent Consideration | $ 28,000,000 | ||||||||
Transderm Scop | |||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||
Cash | $ 60,000,000 | ||||||||
Contingent consideration liability | 30,000,000 | ||||||||
Total assets acquired | $ 84,000,000 | ||||||||
Contingent Consideration | $ 24,000,000 | ||||||||
Caelyx and Doxil | |||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||
Cash consideration transferred | $ 325,000,000 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Revenue Recognition - Additional Information (Details) - USD ($) $ in Billions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Summary Of Significant Accounting Policies [Line Items] | ||
Transaction price allocated to remaining performance obligations | $ 7.8 | |
Net trade accounts receivable | $ 2.4 | $ 1.7 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2022-01-01 | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Remaining performance obligations period | 1 year | |
Remaining revenue performance obligation, percentage of revenue expected to be recognized | 35.00% | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2023-01-01 | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Remaining performance obligations period | 1 year | |
Remaining revenue performance obligation, percentage of revenue expected to be recognized | 30.00% | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2024-01-01 | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Remaining performance obligations period | 1 year | |
Remaining revenue performance obligation, percentage of revenue expected to be recognized | 15.00% | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2025-01-01 | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Remaining performance obligations period | 1 year | |
Remaining revenue performance obligation, percentage of revenue expected to be recognized | 15.00% | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2026-01-01 | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Remaining performance obligations period | ||
Remaining revenue performance obligation, percentage of revenue expected to be recognized | 5.00% | |
Minimum | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Global payment terms | 30 days | |
Maximum | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Global payment terms | 90 days | |
Amortization period for cost incurred to obtain contract | 1 year | |
Contract with customer period for goods or service transfers and customer pays for goods or service | 1 year |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Contract Assets and Contract Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Summary Of Significant Accounting Policies [Line Items] | ||
Contract assets | $ 195 | $ 134 |
Contract liabilities | 246 | 66 |
Other non-current assets | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Contract assets | 111 | 64 |
Accrued expenses and other current liabilities | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Contract liabilities | 162 | 32 |
Other non-current liabilities | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Contract liabilities | $ 84 | $ 34 |
SUMMARY OF SIGNIFICANT ACCOUN_8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Disaggregation of Revenue (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Summary Of Significant Accounting Policies [Line Items] | |||
Net sales | $ 12,784 | $ 11,673 | $ 11,362 |
Renal Care | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Net sales | 3,900 | 3,757 | 3,639 |
Medication Delivery | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Net sales | 2,880 | 2,691 | 2,739 |
Pharmaceuticals | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Net sales | 2,291 | 2,098 | 2,119 |
Clinical Nutrition | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Net sales | 964 | 910 | 860 |
Advanced Surgery | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Net sales | 977 | 886 | 875 |
Acute Therapies | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Net sales | 782 | 740 | 535 |
BioPharma Solutions | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Net sales | 669 | 486 | 469 |
Patient support systems | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Net sales | 115 | 0 | 0 |
Front line care | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Net sales | 70 | 0 | 0 |
Surgical solutions | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Net sales | 27 | 0 | 0 |
Other | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Net sales | 109 | 105 | 126 |
U.S. | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Net sales | 5,180 | 4,878 | 4,826 |
U.S. | Renal Care | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Net sales | 890 | 848 | 791 |
U.S. | Medication Delivery | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Net sales | 1,859 | 1,738 | 1,762 |
U.S. | Pharmaceuticals | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Net sales | 753 | 849 | 904 |
U.S. | Clinical Nutrition | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Net sales | 343 | 330 | 308 |
U.S. | Advanced Surgery | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Net sales | 545 | 516 | 533 |
U.S. | Acute Therapies | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Net sales | 287 | 286 | 184 |
U.S. | BioPharma Solutions | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Net sales | 273 | 234 | 257 |
U.S. | Patient support systems | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Net sales | 86 | 0 | 0 |
U.S. | Front line care | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Net sales | 51 | 0 | 0 |
U.S. | Surgical solutions | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Net sales | 12 | 0 | 0 |
U.S. | Other | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Net sales | 81 | 77 | 87 |
International | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Net sales | 7,604 | 6,795 | 6,536 |
International | Renal Care | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Net sales | 3,010 | 2,909 | 2,848 |
International | Medication Delivery | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Net sales | 1,021 | 953 | 977 |
International | Pharmaceuticals | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Net sales | 1,538 | 1,249 | 1,215 |
International | Clinical Nutrition | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Net sales | 621 | 580 | 552 |
International | Advanced Surgery | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Net sales | 432 | 370 | 342 |
International | Acute Therapies | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Net sales | 495 | 454 | 351 |
International | BioPharma Solutions | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Net sales | 396 | 252 | 212 |
International | Patient support systems | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Net sales | 29 | 0 | 0 |
International | Front line care | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Net sales | 19 | 0 | 0 |
International | Surgical solutions | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Net sales | 15 | 0 | 0 |
International | Other | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Net sales | $ 28 | $ 28 | $ 39 |
SUMMARY OF SIGNIFICANT ACCOUN_9
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Changes In Allowance for Doubtful Accounts (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||
Balance at beginning of period | $ 125 | $ 112 |
Acquisition | 13 | 0 |
Adoption of new accounting standard | 0 | 4 |
Charged to costs and expenses | (2) | 11 |
Write-offs | (5) | (4) |
Currency translation adjustments | (9) | 2 |
Balance at end of period | $ 122 | $ 125 |
SUMMARY OF SIGNIFICANT ACCOU_10
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Shipping and Handling Costs - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Accounting Policies [Abstract] | |||
Shipping costs included in marketing and administrative expenses | $ 381 | $ 325 | $ 324 |
SUMMARY OF SIGNIFICANT ACCOU_11
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property, Plant and Equipment, Net - Additional Information (Details) | 12 Months Ended |
Dec. 31, 2021 | |
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 ACCOU_12
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - New Accounting Standards - Additional Information (Details) - USD ($) $ in Millions | Jan. 01, 2019 | Dec. 31, 2021 | Dec. 31, 2020 | Jan. 01, 2020 |
Summary Of Significant Accounting Policies [Line Items] | ||||
Retained earnings, adjustment | $ 17,065 | $ 16,328 | ||
Operating lease right-of-use assets | 630 | 603 | ||
Retained earnings | 17,065 | 16,328 | ||
Hillrom | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Total assets acquired | 142 | |||
Accounting Standards Update 2019-03 | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Retained earnings, adjustment | $ 4 | |||
Retained earnings | $ 4 | |||
Accounting Standards Update 2018-02 | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Tax cuts and jobs act, reclassification from AOCI to retained earnings, tax effect | $ 161 | |||
Accounting Standards Update 2018-15 | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Gross other intangible assets, developed technology including patents | $ 45 | $ 44 |
ACQUISITIONS AND OTHER ARRANG_3
ACQUISITIONS AND OTHER ARRANGEMENTS - Hillrom Narrative (Details) - USD ($) $ / shares in Units, shares in Thousands | Dec. 13, 2021 | Dec. 31, 2021 | Dec. 31, 2020 |
Acquisitions And Collaborations [Line Items] | |||
Net sales | $ 15,574,000,000 | $ 14,610,000,000 | |
Net income attributable | 962,000,000 | 635,000,000 | |
In-process research and development (IPR&D) | Hillrom | Measurement Input Discount Rate | |||
Acquisitions And Collaborations [Line Items] | |||
Discount rate used to measure intangible assets | 0.090 | ||
Hillrom | |||
Acquisitions And Collaborations [Line Items] | |||
Purchase price | $ 10,500,000,000 | ||
Enterprise value | $ 12,800,000,000 | ||
Cash consideration transferred (usd per share) | $ 156 | ||
Business acquisition, equity interest Issued or issuable (in shares) | 668 | ||
Deferred tax liabilities | $ 1,300,000,000 | ||
Revenue since acquisition | 212,000,000 | ||
Pre-tax loss | (96,000,000) | ||
Acquisition costs | 139,000,000 | 314,000,000 | |
Inventory cost | $ 42,000,000 | $ 201,000,000 | |
Hillrom | Trade Names | |||
Acquisitions And Collaborations [Line Items] | |||
Indefinite-lived intangible assets acquired | 1,900 | ||
Hillrom | In-process research and development (IPR&D) | |||
Acquisitions And Collaborations [Line Items] | |||
Indefinite-lived intangible assets acquired | 30 | ||
Hillrom | Developed Technology Rights | |||
Acquisitions And Collaborations [Line Items] | |||
Reacquired license rights fair value total | $ 804,000,000 | ||
Weighted-average useful life | 5 years | ||
Hillrom | Trade Names | |||
Acquisitions And Collaborations [Line Items] | |||
Reacquired license rights fair value total | $ 62,000,000 | ||
Weighted-average useful life | 7 years | ||
Hillrom | Customer relationships | |||
Acquisitions And Collaborations [Line Items] | |||
Reacquired license rights fair value total | $ 3,200,000,000 | ||
Weighted-average useful life | 15 years | ||
Finite-lived intangible assets acquired, discount rate | 8.50% |
ACQUISITIONS AND OTHER ARRANG_4
ACQUISITIONS AND OTHER ARRANGEMENTS - Schedule of Total Consideration for Hillrom (Details) - Hillrom $ / shares in Units, $ in Millions | Dec. 13, 2021USD ($)$ / 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 |
ACQUISITIONS AND OTHER ARRANG_5
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. 13, 2021 | Dec. 31, 2019 | |
Acquisitions And Collaborations [Line Items] | ||||
Goodwill | $ 9,836 | $ 3,217 | $ 3,030 | |
Net sales | 15,574 | 14,610 | ||
Net income attributable | $ 962 | $ 635 | ||
Hillrom | ||||
Acquisitions And Collaborations [Line Items] | ||||
Cash | $ 399 | |||
Accounts receivable, net | 591 | |||
Inventories | 560 | |||
Prepaid expenses and other current assets | 49 | |||
Property, plant and equipment | 503 | |||
Goodwill | 6,785 | |||
Other intangible assets | 6,022 | |||
Operating lease right-of-use assets | 74 | |||
Other non-current assets | 128 | |||
Short-term debt | (250) | |||
Accounts payable | (140) | |||
Accrued expenses and other current liabilities | (552) | |||
Long-term debt and finance lease obligations | (2,118) | |||
Operating lease liabilities | (57) | |||
Other non-current liabilities | (1,518) | |||
Total assets acquired and liabilities assumed | $ 10,476 |
ACQUISITIONS AND OTHER ARRANG_6
ACQUISITIONS AND OTHER ARRANGEMENTS - PerClot Narrative (Details) | Jul. 29, 2021USD ($) | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) |
Acquisitions And Collaborations [Line Items] | ||||
Cash | $ 743,000,000 | $ 709,000,000 | $ 696,000,000 | |
PerClot | ||||
Acquisitions And Collaborations [Line Items] | ||||
Cash | $ 25,000,000 | |||
Contingent consideration liability | 36,000,000 | |||
Contingent Consideration | 28,000,000 | |||
PerClot | Developed Product Rights | ||||
Acquisitions And Collaborations [Line Items] | ||||
Reacquired license rights fair value total | $ 9,000,000 | |||
Weighted-average useful life | 10 years | |||
PerClot | Developed Product Rights | Measurement Input Discount Rate | ||||
Acquisitions And Collaborations [Line Items] | ||||
Discount rate used to measure intangible assets | 0.160 | |||
PerClot | Customer relationships | ||||
Acquisitions And Collaborations [Line Items] | ||||
Reacquired license rights fair value total | $ 1,000,000 | |||
Weighted-average useful life | 10 years | |||
PerClot | Customer relationships | Measurement Input Discount Rate | ||||
Acquisitions And Collaborations [Line Items] | ||||
Discount rate used to measure intangible assets | 0.150 | |||
PerClot | In-process research and development (IPR&D) | ||||
Acquisitions And Collaborations [Line Items] | ||||
Indefinite-lived intangible assets acquired | $ 39,000,000 | |||
PerClot | In-process research and development (IPR&D) | Measurement Input Discount Rate | ||||
Acquisitions And Collaborations [Line Items] | ||||
Discount rate used to measure intangible assets | 0.187 |
ACQUISITIONS AND OTHER ARRANG_7
ACQUISITIONS AND OTHER ARRANGEMENTS - Schedule of Total Consideration for PerClot (Details) - USD ($) | Jul. 29, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Acquisitions And Collaborations [Line Items] | ||||
Cash | $ 743,000,000 | $ 709,000,000 | $ 696,000,000 | |
Goodwill | $ 9,836,000,000 | $ 3,217,000,000 | $ 3,030,000,000 | |
PerClot | ||||
Acquisitions And Collaborations [Line Items] | ||||
Cash | $ 25,000,000 | |||
Contingent Consideration | 28,000,000 | |||
Total Consideration | 53,000,000 | |||
Goodwill | 4,000,000 | |||
Other intangible assets | 49,000,000 | |||
Total assets acquired | $ 53,000,000 |
ACQUISITIONS AND OTHER ARRANG_8
ACQUISITIONS AND OTHER ARRANGEMENTS - Transderm Scop Narrative (Details) | Mar. 31, 2021USD ($) | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) |
Asset Acquisition [Line Items] | ||||
Cash | $ 743,000,000 | $ 709,000,000 | $ 696,000,000 | |
Transderm Scop | ||||
Asset Acquisition [Line Items] | ||||
Cash | $ 60,000,000 | |||
Contingent consideration liability | 30,000,000 | |||
Developed Product Rights | Transderm Scop | ||||
Asset Acquisition [Line Items] | ||||
Reacquired license rights fair value total | $ 64,000,000 | |||
Weighted-average useful life | 9 years | |||
Developed Product Rights | Measurement Input Discount Rate | Transderm Scop | ||||
Asset Acquisition [Line Items] | ||||
Discount rate used to measure intangible assets | 0.225 | |||
Customer relationships | Transderm Scop | ||||
Asset Acquisition [Line Items] | ||||
Reacquired license rights fair value total | $ 3,000,000 | |||
Weighted-average useful life | 7 years | |||
Customer relationships | Measurement Input Discount Rate | Transderm Scop | ||||
Asset Acquisition [Line Items] | ||||
Discount rate used to measure intangible assets | 0.155 |
ACQUISITIONS AND OTHER ARRANG_9
ACQUISITIONS AND OTHER ARRANGEMENTS - Schedule of Total Consideration for Transderm Scop (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Acquisitions And Collaborations [Line Items] | ||||
Cash | $ 743,000,000 | $ 709,000,000 | $ 696,000,000 | |
Transderm Scop | ||||
Acquisitions And Collaborations [Line Items] | ||||
Cash | $ 60,000,000 | |||
Contingent Consideration | 24,000,000 | |||
Total Consideration | $ 84,000,000 |
Summary of Fair Value of Assets
Summary of Fair Value of Assets Acquired and Liabilities Assumed for Transderm Scop (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 | Feb. 14, 2020 | Dec. 31, 2019 |
Asset Acquisition [Line Items] | ||||
Goodwill | $ 9,836,000,000 | $ 3,217,000,000 | $ 3,030,000,000 | |
Transderm Scop | ||||
Asset Acquisition [Line Items] | ||||
Inventories | $ 16,000,000 | |||
Goodwill | 1,000,000 | |||
Other intangible assets | 67,000,000 | |||
Total assets acquired | $ 84,000,000 |
ACQUISITIONS AND OTHER ARRAN_10
ACQUISITIONS AND OTHER ARRANGEMENTS - Seprafilm Adhesion Barrier (Details) | Feb. 14, 2020USD ($) | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) |
Acquisitions And Collaborations [Line Items] | ||||
Goodwill | $ 9,836,000,000 | $ 3,217,000,000 | $ 3,030,000,000 | |
Net sales | $ 15,574,000,000 | 14,610,000,000 | ||
Seprafilm Adhesion Barrier | ||||
Acquisitions And Collaborations [Line Items] | ||||
Cash consideration transferred | $ 342,000,000 | |||
Inventories | 18,000,000 | |||
Goodwill | 28,000,000 | |||
Other intangible assets | 296,000,000 | |||
Total assets acquired and liabilities assumed | 342,000,000 | |||
Net sales | 94,000,000 | |||
Pre-tax gain | 18,000,000 | |||
Integration related costs | $ 15,000,000 | |||
Seprafilm Adhesion Barrier | Developed Product Rights | ||||
Acquisitions And Collaborations [Line Items] | ||||
Fair value of asset acquired | $ 286,000,000 | |||
Weighted-average useful life | 10 years | |||
Seprafilm Adhesion Barrier | Developed Product Rights | Measurement Input Discount Rate | ||||
Acquisitions And Collaborations [Line Items] | ||||
Discount rate used to measure intangible assets | 0.148 | |||
Seprafilm Adhesion Barrier | Customer relationships | ||||
Acquisitions And Collaborations [Line Items] | ||||
Fair value of asset acquired | $ 10,000,000 | |||
Weighted-average useful life | 7 years | |||
Seprafilm Adhesion Barrier | Customer relationships | Measurement Input Discount Rate | ||||
Acquisitions And Collaborations [Line Items] | ||||
Discount rate used to measure intangible assets | 0.110 |
ACQUISITIONS AND OTHER ARRAN_11
ACQUISITIONS AND OTHER ARRANGEMENTS - Cheetah Medical, Inc. Narrative (Details) - Cheetah Medical, Inc. - USD ($) | Oct. 25, 2019 | Dec. 31, 2020 | Dec. 31, 2019 |
Acquisitions And Collaborations [Line Items] | |||
Percentage of ownership acquired | 100.00% | ||
Total upfront cash consideration | $ 195,000,000 | ||
Maximum contingent future payments | 40,000,000 | ||
Contingent Consideration | 18,000,000 | ||
Post-close payment received | $ 7,000,000 | ||
Integration related costs | $ 5,000,000 | $ 3,000,000 | |
Other intangible assets | 131,000,000 | ||
Developed Product Rights | |||
Acquisitions And Collaborations [Line Items] | |||
Other intangible assets | $ 123,000,000 | ||
Weighted-average useful life | 15 years | ||
Customer relationships | |||
Acquisitions And Collaborations [Line Items] | |||
Other intangible assets | $ 8,000,000 | ||
Weighted-average useful life | 13 years | ||
Measurement Input Discount Rate | Developed Product Rights | |||
Acquisitions And Collaborations [Line Items] | |||
Discount rate used to measure intangible assets | 0.110 | ||
Measurement Input Discount Rate | Customer relationships | |||
Acquisitions And Collaborations [Line Items] | |||
Discount rate used to measure intangible assets | 0.100 |
ACQUISITIONS AND OTHER ARRAN_12
ACQUISITIONS AND OTHER ARRANGEMENTS - Schedule of Total Consideration for Cheetah Medical, Inc. (Details) - Cheetah Medical, Inc. | Oct. 25, 2019USD ($) |
Acquisitions And Collaborations [Line Items] | |
Cash consideration transferred | $ 190,000,000 |
Contingent Consideration | 18,000,000 |
Total Consideration | $ 208,000,000 |
ACQUISITIONS AND OTHER ARRAN_13
ACQUISITIONS AND OTHER ARRANGEMENTS - Summary of Fair Value of Assets Acquired and Liabilities Assumed for Cheetah Medical, Inc. (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Oct. 25, 2019 |
Acquisitions And Collaborations [Line Items] | ||||
Goodwill | $ 9,836 | $ 3,217 | $ 3,030 | |
Cheetah Medical, Inc. | ||||
Acquisitions And Collaborations [Line Items] | ||||
Cash | $ 2 | |||
Accounts receivable, net | 3 | |||
Inventories | 1 | |||
Prepaid expenses and other current assets | 1 | |||
Property, plant and equipment | 1 | |||
Goodwill | 84 | |||
Other intangible assets | 131 | |||
Operating lease right-of-use assets | 1 | |||
Accounts payable and accrued liabilities | (4) | |||
Other non-current liabilities | (12) | |||
Total assets acquired and liabilities assumed | $ 208 |
ACQUISITIONS AND OTHER ARRAN_14
ACQUISITIONS AND OTHER ARRANGEMENTS - Caelyx and Doxil Narrative (Details) - Caelyx and Doxil - USD ($) | Feb. 17, 2021 | Dec. 31, 2021 |
Acquisitions And Collaborations [Line Items] | ||
Cash consideration transferred | $ 325,000,000 | |
Revenue since acquisition | $ 108,000,000 | |
Developed Technology Rights | ||
Acquisitions And Collaborations [Line Items] | ||
Reacquired license rights fair value total | $ 314,000,000 | |
Weighted-average useful life | 9 years | |
Customer relationships | ||
Acquisitions And Collaborations [Line Items] | ||
Reacquired license rights fair value total | $ 11,000,000 | |
Weighted-average useful life | 8 years |
ACQUISITIONS AND OTHER ARRAN_15
ACQUISITIONS AND OTHER ARRANGEMENTS - Celerity Pharmaceuticals, LLC Narrative (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Acquisitions And Collaborations [Line Items] | ||||
Loss on acquisition | $ (962,000,000) | $ (635,000,000) | ||
Celerity Pharmaceutical LLC | ||||
Acquisitions And Collaborations [Line Items] | ||||
Payment to acquire the rights | $ 86,000,000 | |||
Maximum contingent future payments | $ 77,000,000 | |||
Celerity Pharmaceutical LLC | Developed Technology Rights | ||||
Acquisitions And Collaborations [Line Items] | ||||
Estimated useful lives | 12 years | |||
Celerity Pharmaceutical LLC | Minimum | ||||
Acquisitions And Collaborations [Line Items] | ||||
Loss on acquisition | $ 30,000,000 | |||
Celerity Pharmaceutical LLC | Maximum | ||||
Acquisitions And Collaborations [Line Items] | ||||
Loss on acquisition | $ 60,000,000 |
ACQUISITIONS AND OTHER ARRAN_16
ACQUISITIONS AND OTHER ARRANGEMENTS - Other Business Combinations and Asset Acquisitions (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Licensing Agreements | |||
Acquisitions And Collaborations [Line Items] | |||
Payment to acquire the rights | $ 3,000,000 | $ 22,000,000 | |
Payments for development regulatory and commercial milestones | 35,000,000 | ||
Series of Individually Immaterial Asset Acquisitions | |||
Acquisitions And Collaborations [Line Items] | |||
Development and regulatory milestone payments, maximum | 19,000,000 | ||
Developed Technology Rights Acquisition | Developed Technology Rights | |||
Acquisitions And Collaborations [Line Items] | |||
Total Consideration | $ 73,000,000 | $ 80,000,000 | |
Estimated useful lives | 11 years | 10 years | |
Series of Individually Immaterial Business Acquisitions | |||
Acquisitions And Collaborations [Line Items] | |||
Consideration transferred | $ 21,000,000 | $ 18,000,000 | $ 10,000,000 |
SUPPLEMENTAL FINANCIAL INFORM_3
SUPPLEMENTAL FINANCIAL INFORMATION - Inventories (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Raw materials | $ 591 | $ 460 |
Work in process | 300 | 196 |
Finished goods | 1,562 | 1,260 |
Inventories | $ 2,453 | $ 1,916 |
SUPPLEMENTAL FINANCIAL INFORM_4
SUPPLEMENTAL FINANCIAL INFORMATION - Prepaid Expenses and Other (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Prepaid expenses and other | ||
Prepaid value added taxes | $ 199 | $ 163 |
Prepaid income taxes | 166 | 183 |
Contract assets | 84 | 70 |
Other | 390 | 342 |
Prepaid expenses and other current assets | $ 839 | $ 758 |
SUPPLEMENTAL FINANCIAL INFORM_5
SUPPLEMENTAL FINANCIAL INFORMATION - Property, Plant and Equipment, Net (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, at cost | $ 11,728 | $ 11,271 | |
Accumulated depreciation | (6,550) | (6,549) | |
Property, plant and equipment (PP&E), net | 5,178 | 4,722 | |
Depreciation expense | 592 | 601 | $ 606 |
Land and land improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, at cost | 172 | 166 | |
Buildings and leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, at cost | 1,915 | 1,849 | |
Machinery and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, at cost | 7,097 | 6,884 | |
Equipment on lease with customers | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, at cost | 1,684 | 1,671 | |
Construction in progress | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, at cost | $ 860 | $ 701 |
SUPPLEMENTAL FINANCIAL INFORM_6
SUPPLEMENTAL FINANCIAL INFORMATION - Other Long-Term Assets (Detail) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Other Assets, Noncurrent | ||
Deferred tax assets | $ 376 | $ 748 |
Non-current receivables, net | 113 | 158 |
Contract assets | 111 | 64 |
Capitalized implementation costs in hosting arrangements | 99 | 68 |
Pension and other postretirement benefits | 228 | 155 |
Investments | 154 | 135 |
Other | 132 | 67 |
Other non-current assets | $ 1,213 | $ 1,395 |
SUPPLEMENTAL FINANCIAL INFORM_7
SUPPLEMENTAL FINANCIAL INFORMATION - Accounts Payable and Accrued Liabilities (Detail) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Accounts Payable and Accrued Liabilities, Current | ||
Common stock dividends payable | $ 140 | $ 125 |
Employee compensation and withholdings | 608 | 415 |
Property, payroll and certain other taxes | 174 | 148 |
Contract liabilities | 162 | 32 |
Restructuring liabilities | 97 | 92 |
Accrued rebates | 312 | 239 |
Operating lease liabilities | 128 | 111 |
Income taxes payable | 90 | 135 |
Pension and other postretirement benefits | 46 | 48 |
Contingent payments related to acquisitions | 21 | 16 |
Other | 701 | 523 |
Accrued expenses and other current liabilities | $ 2,479 | $ 1,884 |
SUPPLEMENTAL FINANCIAL INFORM_8
SUPPLEMENTAL FINANCIAL INFORMATION - Other Long-Term Liabilities (Detail) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Other Liabilities Noncurrent | ||
Pension and other postretirement benefits | $ 1,052 | $ 1,214 |
Deferred tax liabilities | 962 | 143 |
Long-term tax liabilities | 80 | 84 |
Contingent payments related to acquisitions | 122 | 14 |
Contract liabilities | 84 | 34 |
Litigation and environmental reserves | 28 | 29 |
Restructuring liabilities | 12 | 21 |
Other | 153 | 134 |
Other non-current liabilities | $ 2,493 | $ 1,673 |
SUPPLEMENTAL FINANCIAL INFORM_9
SUPPLEMENTAL FINANCIAL INFORMATION - Net Interest Expense (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Interest Income Expense Net | |||
Interest costs | $ 217 | $ 162 | $ 120 |
Interest costs capitalized | (11) | (9) | (9) |
Interest expense | 206 | 153 | 111 |
Interest income | (14) | (19) | (40) |
Interest expense, net | $ 192 | $ 134 | $ 71 |
SUPPLEMENTAL FINANCIAL INFOR_10
SUPPLEMENTAL FINANCIAL INFORMATION - Other (Income) Expense, net (Detail) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Nov. 30, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Other Income, net | ||||
Foreign exchange (gains) losses, net | $ 19,000,000 | $ 49,000,000 | $ 37,000,000 | |
Change in fair value of marketable equity securities | 7,000,000 | (13,000,000) | (1,000,000) | |
Loss on debt extinguishment | $ 110,000,000 | 5,000,000 | 110,000,000 | 0 |
Pension settlements | 2,000,000 | 46,000,000 | 755,000,000 | |
Pension and other postretirement benefit plans | 11,000,000 | (3,000,000) | (53,000,000) | |
Other, net | (3,000,000) | 1,000,000 | (7,000,000) | |
Other expense, net | $ 41,000,000 | $ 190,000,000 | $ 731,000,000 |
SUPPLEMENTAL FINANCIAL INFOR_11
SUPPLEMENTAL FINANCIAL INFORMATION - Supplemental Cash Flow Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Property, Plant and Equipment [Line Items] | |||
Interest paid, net of portion capitalized | $ 145 | $ 137 | $ 103 |
Income taxes paid | 282 | 249 | 294 |
Property, Plant and Equipment | |||
Property, Plant and Equipment [Line Items] | |||
Capital expenditures incurred but not yet paid | $ 79 | $ 102 | $ 87 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS, NET - Schedule of Goodwill (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | $ 3,217 | $ 3,030 |
Reallocation of goodwill | 0 | |
Additions | 6,790 | 34 |
Acquisition accounting adjustments | (53) | |
Currency translation | (171) | 206 |
Goodwill, ending balance | 9,836 | 3,217 |
Americas | ||
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | 2,574 | 2,428 |
Reallocation of goodwill | 81 | |
Additions | 4 | 26 |
Acquisition accounting adjustments | (45) | |
Currency translation | (142) | 165 |
Goodwill, ending balance | 2,517 | 2,574 |
EMEA | ||
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | 406 | 385 |
Reallocation of goodwill | (81) | |
Additions | 1 | 1 |
Acquisition accounting adjustments | (6) | |
Currency translation | (17) | 26 |
Goodwill, ending balance | 309 | 406 |
APAC | ||
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | 237 | 217 |
Reallocation of goodwill | 0 | |
Additions | 0 | 7 |
Acquisition accounting adjustments | (2) | |
Currency translation | (13) | 15 |
Goodwill, ending balance | 224 | 237 |
Hillrom | ||
Goodwill [Roll Forward] | ||
Goodwill, beginning balance | 0 | 0 |
Reallocation of goodwill | 0 | |
Additions | 6,785 | 0 |
Acquisition accounting adjustments | 0 | |
Currency translation | 1 | 0 |
Goodwill, ending balance | $ 6,786 | $ 0 |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS, NET - Other Intangible Assets, Net (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Intangible Asset Excluding Goodwill [Line Items] | |||||
Accumulated amortization | $ (1,930,000,000) | $ (1,706,000,000) | |||
Gross other intangible assets | 9,722,000,000 | 3,377,000,000 | |||
Other intangible assets, net | 7,792,000,000 | 1,671,000,000 | |||
Intangible asset impairments | 0 | 17,000,000 | $ 31,000,000 | ||
Indefinite-lived intangible assets | |||||
Intangible Asset Excluding Goodwill [Line Items] | |||||
Accumulated amortization | 0 | ||||
Gross other intangible assets, indefinite-lived intangible assets | 2,140,000,000 | 169,000,000 | |||
Developed technology, including patents | |||||
Intangible Asset Excluding Goodwill [Line Items] | |||||
Gross other intangible assets, developed technology including patents | 3,801,000,000 | 2,713,000,000 | |||
Accumulated amortization | (1,556,000,000) | (1,374,000,000) | |||
Other intangible assets, net | 2,245,000,000 | 1,339,000,000 | |||
Other amortized intangible assets | |||||
Intangible Asset Excluding Goodwill [Line Items] | |||||
Gross other intangible assets, developed technology including patents | 344,000,000 | 269,000,000 | |||
Accumulated amortization | (212,000,000) | (193,000,000) | |||
Other intangible assets, net | 132,000,000 | 76,000,000 | |||
Customer relationships | |||||
Intangible Asset Excluding Goodwill [Line Items] | |||||
Gross other intangible assets, developed technology including patents | 3,437,000,000 | 226,000,000 | |||
Accumulated amortization | (162,000,000) | (139,000,000) | |||
Other intangible assets, net | $ 3,275,000,000 | $ 87,000,000 | |||
Developed Technology Rights | |||||
Intangible Asset Excluding Goodwill [Line Items] | |||||
Intangible asset impairments | $ 17,000,000 | $ 31,000,000 |
GOODWILL AND OTHER INTANGIBLE_5
GOODWILL AND OTHER INTANGIBLE ASSETS, NET - Additional Information (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Intangible Asset Excluding Goodwill [Line Items] | |||||
Goodwill, impairment loss | $ 0 | ||||
Intangible asset amortization expense | 298,000,000 | $ 222,000,000 | $ 183,000,000 | ||
Anticipated annual amortization expense of other intangible assets for 2022 | 718,000,000 | ||||
Anticipated annual amortization expense of other intangible assets for 2023 | 627,000,000 | ||||
Anticipated annual amortization expense of other intangible assets for 2024 | 605,000,000 | ||||
Anticipated annual amortization expense of other intangible assets for 2025 | 572,000,000 | ||||
Anticipated annual amortization expense of other intangible assets for 2026 | 542,000,000 | ||||
Intangible asset impairments | $ 0 | $ 17,000,000 | $ 31,000,000 | ||
Developed Technology Rights | |||||
Intangible Asset Excluding Goodwill [Line Items] | |||||
Intangible asset impairments | $ 17,000,000 | $ 31,000,000 |
DEBT AND CREDIT FACILITIES - Sc
DEBT AND CREDIT FACILITIES - Schedule of Debt (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 | May 31, 2019 |
Debt Instrument [Line Items] | |||
Total debt | $ 17,660 | $ 6,192 | |
Short-term debt | (301) | 0 | |
Current maturities of long-term debt and finance lease obligations | (210) | (406) | |
Long-term debt and finance lease obligations | $ 17,149 | 5,786 | |
Commercial paper | |||
Debt Instrument [Line Items] | |||
Effective interest rate | 0.30% | ||
Total debt | $ 300 | 0 | |
1.7% notes due 2021 | |||
Debt Instrument [Line Items] | |||
Senior notes, coupon rates | 1.70% | ||
Effective interest rate | 1.90% | ||
Total debt | $ 0 | 400 | |
2.4% notes due 2022 | |||
Debt Instrument [Line Items] | |||
Senior notes, coupon rates | 2.40% | ||
Effective interest rate | 2.50% | ||
Total debt | $ 203 | 203 | |
0.868% notes due 2023 | |||
Debt Instrument [Line Items] | |||
Senior notes, coupon rates | 0.868% | ||
Effective interest rate | 1.20% | ||
Total debt | $ 797 | 0 | |
Floating-rate notes due 2023 | |||
Debt Instrument [Line Items] | |||
Effective interest rate | 1.90% | ||
Total debt | $ 298 | 0 | |
0.4% notes due 2024 | |||
Debt Instrument [Line Items] | |||
Senior notes, coupon rates | 0.40% | 0.40% | |
Effective interest rate | 0.60% | ||
Total debt | $ 846 | 915 | |
1.322% notes due 2024 | |||
Debt Instrument [Line Items] | |||
Senior notes, coupon rates | 1.322% | ||
Effective interest rate | 1.70% | ||
Total debt | $ 1,393 | 0 | |
7.0% notes due 2024 | |||
Debt Instrument [Line Items] | |||
Senior notes, coupon rates | 7.00% | ||
Effective interest rate | 7.00% | ||
Total debt | $ 13 | 0 | |
Floating-rate notes due 2024 | |||
Debt Instrument [Line Items] | |||
Effective interest rate | 0.90% | ||
Total debt | $ 298 | 0 | |
Term loan due 2024 | |||
Debt Instrument [Line Items] | |||
Effective interest rate | 1.80% | ||
Total debt | $ 1,998 | 0 | |
1.3% notes due in 2025 | |||
Debt Instrument [Line Items] | |||
Senior notes, coupon rates | 1.30% | ||
Effective interest rate | 1.40% | ||
Total debt | $ 678 | 734 | |
2.6% notes due 2026 | |||
Debt Instrument [Line Items] | |||
Senior notes, coupon rates | 2.60% | ||
Effective interest rate | 2.70% | ||
Total debt | $ 747 | 746 | |
Term loan due 2026 | |||
Debt Instrument [Line Items] | |||
Effective interest rate | 1.90% | ||
Total debt | $ 1,998 | 0 | |
7.65% debentures due 2027 | |||
Debt Instrument [Line Items] | |||
Senior notes, coupon rates | 7.65% | ||
Effective interest rate | 7.70% | ||
Total debt | $ 5 | 5 | |
1.915% notes due 2027 | |||
Debt Instrument [Line Items] | |||
Senior notes, coupon rates | 1.915% | ||
Effective interest rate | 2.20% | ||
Total debt | $ 1,441 | 0 | |
6.625% debentures due 2028 | |||
Debt Instrument [Line Items] | |||
Senior notes, coupon rates | 6.625% | ||
Effective interest rate | 5.60% | ||
Total debt | $ 96 | 97 | |
2.272% notes due 2028 | |||
Debt Instrument [Line Items] | |||
Senior notes, coupon rates | 2.272% | ||
Effective interest rate | 2.50% | ||
Total debt | $ 1,241 | 0 | |
1.3% notes due 2029 | |||
Debt Instrument [Line Items] | |||
Senior notes, coupon rates | 1.30% | 1.30% | |
Effective interest rate | 1.40% | ||
Total debt | $ 841 | 912 | |
3.95% notes due 2030 | |||
Debt Instrument [Line Items] | |||
Senior notes, coupon rates | 3.95% | ||
Effective interest rate | 4.00% | ||
Total debt | $ 495 | 495 | |
1.73% notes due 2031 | |||
Debt Instrument [Line Items] | |||
Senior notes, coupon rates | 1.73% | ||
Effective interest rate | 3.20% | ||
Total debt | $ 644 | 644 | |
2.539% notes due 2032 | |||
Debt Instrument [Line Items] | |||
Senior notes, coupon rates | 2.539% | ||
Effective interest rate | 2.70% | ||
Total debt | $ 1,537 | 0 | |
6.25% notes due 2037 | |||
Debt Instrument [Line Items] | |||
Senior notes, coupon rates | 6.25% | ||
Effective interest rate | 6.30% | ||
Total debt | $ 265 | 265 | |
3.65% notes due 2042 | |||
Debt Instrument [Line Items] | |||
Senior notes, coupon rates | 3.65% | ||
Effective interest rate | 3.70% | ||
Total debt | $ 6 | 6 | |
4.5% notes due 2043 | |||
Debt Instrument [Line Items] | |||
Senior notes, coupon rates | 4.50% | ||
Effective interest rate | 4.60% | ||
Total debt | $ 256 | 256 | |
3.5% notes due 2046 | |||
Debt Instrument [Line Items] | |||
Senior notes, coupon rates | 3.50% | ||
Effective interest rate | 3.60% | ||
Total debt | $ 441 | 440 | |
3.132% notes due 2051 | |||
Debt Instrument [Line Items] | |||
Senior notes, coupon rates | 3.132% | ||
Effective interest rate | 3.20% | ||
Total debt | $ 742 | 0 | |
Finance leases and other | |||
Debt Instrument [Line Items] | |||
Effective interest rate | 9.30% | ||
Total debt | $ 81 | $ 74 |
DEBT AND CREDIT FACILITIES - Ad
DEBT AND CREDIT FACILITIES - Additional Information (Details) | Dec. 31, 2021USD ($) | Dec. 13, 2021USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2021USD ($) | Nov. 30, 2020USD ($) | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Dec. 01, 2021USD ($) | Oct. 01, 2021USD ($) | Oct. 01, 2021EUR (€) | Sep. 30, 2021USD ($) | Sep. 01, 2021USD ($) | Jul. 31, 2021USD ($) | Dec. 31, 2020EUR (€) | Oct. 31, 2020USD ($) | Mar. 31, 2020USD ($) | May 31, 2019EUR (€) |
Debt Instrument [Line Items] | ||||||||||||||||||
Debt obligations | $ 17,660,000,000 | $ 6,192,000,000 | $ 17,660,000,000 | $ 17,660,000,000 | $ 6,192,000,000 | |||||||||||||
Loss on debt extinguishment | $ 110,000,000 | 5,000,000 | 110,000,000 | $ 0 | ||||||||||||||
Commercial paper, average outstanding | $ 300,000,000 | |||||||||||||||||
Weighted-average interest rate | 0.27% | 0.27% | 0.27% | |||||||||||||||
Original weighted-average term | 88 days | |||||||||||||||||
Hillrom | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Debt assumed | $ 2,400,000,000 | |||||||||||||||||
Loss on debt extinguishment | $ 5,000,000 | |||||||||||||||||
Bridge Facility | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Senior notes | $ 0 | $ 4,000,000,000 | ||||||||||||||||
Debt fee | $ 40,000,000 | |||||||||||||||||
Domestic Line of Credit | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Credit facility, maximum capacity | 2,000,000,000 | 2,000,000,000 | $ 2,500,000,000 | |||||||||||||||
Foreign Line of Credit | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Credit facility, maximum capacity | € | € 200,000,000 | € 200,000,000 | ||||||||||||||||
Other Line Of Credit | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Credit facility, maximum capacity | $ 225,000,000 | $ 200,000,000 | $ 225,000,000 | $ 225,000,000 | 200,000,000 | |||||||||||||
Line of credit, borrowings outstanding | $ 0 | $ 0 | $ 0 | |||||||||||||||
Revolving Credit Facility | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Fees under the credit facilities | 0.09% | 0.09% | ||||||||||||||||
Debt Instrument Interest Schedule 1 | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Senior notes, coupon rates | 0.625% | |||||||||||||||||
Annual interest rate, potential increase | 0.25% | |||||||||||||||||
Debt Instrument Interest Schedule 2 | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Senior notes, coupon rates | 1.25% | |||||||||||||||||
Annual interest rate, potential increase | 0.25% | |||||||||||||||||
Debt Instrument Interest Schedule 3 | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Senior notes, coupon rates | 1.875% | |||||||||||||||||
Annual interest rate, potential increase | 0.50% | |||||||||||||||||
Debt Instrument Interest Schedule 4 | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Senior notes, coupon rates | 2.50% | |||||||||||||||||
0.40% Senior Notes due May 2024 | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Senior notes | € | € 750,000,000 | |||||||||||||||||
Senior notes, coupon rates | 0.40% | 0.40% | 0.40% | 0.40% | ||||||||||||||
Debt obligations | $ 846,000,000 | $ 915,000,000 | $ 846,000,000 | $ 846,000,000 | 915,000,000 | |||||||||||||
1.3% Senior Notes due May 2029 | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Senior notes | € | € 750,000,000 | |||||||||||||||||
Senior notes, coupon rates | 1.30% | 1.30% | 1.30% | 1.30% | ||||||||||||||
Debt obligations | $ 841,000,000 | 912,000,000 | $ 841,000,000 | $ 841,000,000 | 912,000,000 | |||||||||||||
Senior Notes Due 2025 | Senior Notes | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Senior notes | $ 750,000,000 | |||||||||||||||||
Senior notes, coupon rates | 3.75% | |||||||||||||||||
Payment to debt holders | 104,000,000 | |||||||||||||||||
Senior Notes Due 2021 | Senior Notes | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Senior notes | $ 400,000,000 | |||||||||||||||||
Senior notes, coupon rates | 1.70% | |||||||||||||||||
Senior Notes Due 2030 | Senior Notes | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Senior notes | $ 500,000,000 | |||||||||||||||||
Senior notes, coupon rates | 3.95% | |||||||||||||||||
Variable Rate Loan Due 2020 | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Debt obligations | $ 322,000,000 | |||||||||||||||||
Senior Notes Due 2031 | Senior Notes | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Senior notes | $ 650,000,000 | |||||||||||||||||
Senior notes, coupon rates | 1.73% | |||||||||||||||||
Senior unsecured term loan facility | Senior Notes | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Senior notes | $ 4,000,000,000 | |||||||||||||||||
Senior three year term loan | Senior Notes | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Senior notes | $ 2,000,000,000 | |||||||||||||||||
Debt term | 3 years | |||||||||||||||||
Senior five year term loan | Senior Notes | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Senior notes | $ 2,000,000,000 | |||||||||||||||||
Debt term | 5 years | |||||||||||||||||
Senior Notes Due 2023 | Senior Notes | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Senior notes | 800,000,000 | 800,000,000 | 800,000,000 | |||||||||||||||
Senior Notes Due 2024 | Senior Notes | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Senior notes | 1,400,000,000 | 1,400,000,000 | 1,400,000,000 | |||||||||||||||
Senior Notes Due 2027 | Senior Notes | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Senior notes | 1,450,000,000 | 1,450,000,000 | 1,450,000,000 | |||||||||||||||
Senior Notes Due 2028 | Senior Notes | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Senior notes | 1,250,000,000 | 1,250,000,000 | 1,250,000,000 | |||||||||||||||
Senior Notes Due 2032 | Senior Notes | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Senior notes | 1,550,000,000 | 1,550,000,000 | 1,550,000,000 | |||||||||||||||
Senior Notes Due 2051 | Senior Notes | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Senior notes | 750,000,000 | 750,000,000 | 750,000,000 | |||||||||||||||
364-day Senior Unsecured Bridge Term Loan | Bridge Facility | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Senior notes | $ 11,400,000,000 | |||||||||||||||||
Floating-rate notes due 2023 | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Debt obligations | 298,000,000 | 0 | 298,000,000 | 298,000,000 | 0 | |||||||||||||
Floating-rate notes due 2023 | Senior Notes | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Senior notes | 300,000,000 | 300,000,000 | 300,000,000 | |||||||||||||||
Floating-rate notes due 2024 | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Debt obligations | 298,000,000 | 0 | 298,000,000 | 298,000,000 | 0 | |||||||||||||
Floating-rate notes due 2024 | Senior Notes | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Senior notes | $ 300,000,000 | $ 300,000,000 | $ 300,000,000 | |||||||||||||||
0.868% notes due 2023 | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Senior notes, coupon rates | 0.868% | 0.868% | 0.868% | |||||||||||||||
Debt obligations | $ 797,000,000 | 0 | $ 797,000,000 | $ 797,000,000 | 0 | |||||||||||||
1.322% notes due 2024 | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Senior notes, coupon rates | 1.322% | 1.322% | 1.322% | |||||||||||||||
Debt obligations | $ 1,393,000,000 | 0 | $ 1,393,000,000 | $ 1,393,000,000 | 0 | |||||||||||||
1.915% notes due 2027 | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Senior notes, coupon rates | 1.915% | 1.915% | 1.915% | |||||||||||||||
Debt obligations | $ 1,441,000,000 | 0 | $ 1,441,000,000 | $ 1,441,000,000 | 0 | |||||||||||||
2.272% notes due 2028 | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Senior notes, coupon rates | 2.272% | 2.272% | 2.272% | |||||||||||||||
Debt obligations | $ 1,241,000,000 | 0 | $ 1,241,000,000 | $ 1,241,000,000 | 0 | |||||||||||||
2.539% notes due 2032 | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Senior notes, coupon rates | 2.539% | 2.539% | 2.539% | |||||||||||||||
Debt obligations | $ 1,537,000,000 | 0 | $ 1,537,000,000 | $ 1,537,000,000 | 0 | |||||||||||||
3.132% notes due 2051 | ||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||
Senior notes, coupon rates | 3.132% | 3.132% | 3.132% | |||||||||||||||
Debt obligations | $ 742,000,000 | $ 0 | $ 742,000,000 | $ 742,000,000 | $ 0 |
DEBT AND CREDIT FACILITIES - _2
DEBT AND CREDIT FACILITIES - Schedule of Maturities of Long-term Debt (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Debt Disclosure [Abstract] | ||
2022 | $ 513 | |
2023 | 1,108 | |
2024 | 4,567 | |
2025 | 684 | |
2026 | 2,754 | |
Thereafter | 8,128 | |
Total obligations and commitments | 17,754 | |
Discounts, premiums, and adjustments relating to hedging instruments | (94) | |
Total debt | $ 17,660 | $ 6,192 |
LEASES - Additional Information
LEASES - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Leases [Line Items] | |||||
Lessee, operating lease, liability, to be paid | $ 706 | ||||
Net investment in sales-type leases | 115 | $ 134 | |||
Sales-type leases, receivables | $ 22 | $ 32 | $ 24 | $ 24 | |
Sales-type leases, receivables | $ 13 | ||||
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 | 41 years | ||||
Lessee, renewal term | 16 years |
LEASES - Components of Lease Co
LEASES - Components of Lease Cost (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Leases [Abstract] | |||
Operating lease cost | $ 114 | $ 115 | $ 121 |
Finance lease cost | |||
Amortization of right-of-use assets | 7 | 5 | 5 |
Interest on lease liabilities | 5 | 5 | 5 |
Variable lease cost | 52 | 54 | 89 |
Lease cost | $ 178 | $ 179 | $ 220 |
LEASES - Supplemental Cash Flow
LEASES - Supplemental Cash Flow Information Related to Leases (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Leases [Abstract] | |||
Operating cash flows from operating leases | $ 124 | $ 127 | $ 119 |
Operating cash flows from finance leases | 5 | 4 | 4 |
Financing cash flows from finance leases | 4 | 4 | 4 |
Right-of-use operating lease assets obtained in exchange for lease obligations | 71 | 67 | 207 |
Right-of-use finance lease assets obtained in exchange for lease obligations | $ 4 | $ 8 | $ 0 |
LEASES - Assets and Liabilities
LEASES - Assets and Liabilities of Lessee (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Operating leases | ||
Operating lease right-of-use assets | $ 630 | $ 603 |
Accrued expenses and other current liabilities | 128 | 111 |
Operating lease liabilities | 522 | 501 |
Total operating lease liabilities | 650 | 612 |
Finance leases | ||
Property, plant and equipment, at cost | 86 | 76 |
Accumulated depreciation | $ (31) | $ (28) |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Property, plant and equipment, net | Property, plant and equipment, net |
Property, plant and equipment, net | $ 55 | $ 48 |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Current maturities of long-term debt and finance lease obligations | Current maturities of long-term debt and finance lease obligations |
Current maturities of long-term debt and finance lease obligations | $ 2 | $ 1 |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Long-term debt and finance lease obligations | Long-term debt and finance lease obligations |
Long-term debt and finance lease obligations | $ 68 | $ 64 |
Total finance lease liabilities | $ 70 | $ 65 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Accrued expenses and other current liabilities | Accrued expenses and other current liabilities |
LEASES - Schedule of Lease Term
LEASES - Schedule of Lease Term and Discount Rates (Details) | Dec. 31, 2021 | Dec. 31, 2020 |
Leases [Abstract] | ||
Operating lease, weighted average remaining lease term | 8 years | 9 years |
Finance lease, weighted average remaining lease term | 12 years | 13 years |
Operating lease, weighted average discount rate | 1.80% | 2.20% |
Finance lease, weighted average discount rate | 9.30% | 10.30% |
LEASES - Maturities of Operatin
LEASES - Maturities of Operating and Finance Lease Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Finance Leases | ||
2022 | $ 10 | |
2023 | 9 | |
2024 | 9 | |
2025 | 9 | |
2026 | 9 | |
Thereafter | 72 | |
Total minimum lease payments | 118 | |
Less: imputed interest | (48) | |
Total finance lease liabilities | 70 | $ 65 |
Operating Leases | ||
2022 | 141 | |
2023 | 118 | |
2024 | 95 | |
2025 | 76 | |
2026 | 60 | |
Thereafter | 216 | |
Total minimum lease payments | 706 | |
Less: imputed interest | (56) | |
Total operating lease liabilities | $ 650 | $ 612 |
LEASES - Components of Operatin
LEASES - Components of Operating Lease Income (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Leases [Abstract] | |||
Sales-type lease revenue | $ 27 | $ 38 | $ 35 |
Operating lease revenue | 136 | 84 | 61 |
Variable lease revenue | 79 | 80 | 85 |
Total lease revenue | $ 242 | $ 202 | $ 181 |
LEASES - Components of Net Inve
LEASES - Components of Net Investment in Sales-type Lease (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Leases [Abstract] | ||
Minimum lease payments | $ 111 | $ 122 |
Unguaranteed residual values | 4 | 12 |
Net investment in leases | $ 115 | $ 134 |
LEASES - Components of Sales Ty
LEASES - Components of Sales Type Lease Income (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Leases [Abstract] | ||
Accounts receivable, net | $ 40 | $ 39 |
Other non-current assets | 75 | 95 |
Total | $ 115 | $ 134 |
LEASES - Maturities of Sales-ty
LEASES - Maturities of Sales-type and Operating Leases (Details) $ in Millions | Dec. 31, 2021USD ($) |
Sales-type Leases | |
2022 | $ 43 |
2023 | 32 |
2024 | 22 |
2025 | 12 |
2026 | 5 |
Thereafter | 1 |
Total minimum lease payments | 115 |
Less: imputed interest | (4) |
Total minimum lease payments | 111 |
Operating Leases | |
2022 | 87 |
2023 | 79 |
2024 | 75 |
2025 | 60 |
2026 | 11 |
Thereafter | 2 |
Present value of minimum lease payments | $ 314 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Additional Information (Details) | Feb. 18, 2022USD ($) | Jan. 12, 2021USD ($) | Dec. 31, 2021USD ($)site | Dec. 31, 2019USD ($) | Dec. 31, 2008Lawsuit | Dec. 31, 2020USD ($) | Mar. 01, 2020lawsuit |
Loss Contingencies [Line Items] | |||||||
Litigation reserve | $ 72,000,000 | $ 40,000,000 | |||||
Litigation settlement | $ 16,000,000 | ||||||
Loss contingency, number of lawsuits | lawsuit | 2 | ||||||
Proceeds from legal settlements | $ 39,000,000 | ||||||
Gain related litigation settlement | 37,000,000 | ||||||
Subsequent Event | |||||||
Loss Contingencies [Line Items] | |||||||
Civil settlement amount | $ 18,000,000 | ||||||
Asset Impairments and Idle Facility and Other Costs | Hurricane Maria | |||||||
Loss Contingencies [Line Items] | |||||||
Insurance recoveries | $ 100,000,000 | ||||||
Minimum | |||||||
Loss Contingencies [Line Items] | |||||||
Number of law suits filed | Lawsuit | 1,000 | ||||||
Environmental Clean-up | Superfund Sites | |||||||
Loss Contingencies [Line Items] | |||||||
Number of sites | site | 6 | ||||||
Environmental reserves | $ 18,000,000 | $ 20,000,000 |
STOCKHOLDERS_ EQUITY - Stock-ba
STOCKHOLDERS’ EQUITY - Stock-based Compensation Narrative (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Stockholders Equity Note [Line Items] | |||
Shares available for future awards under the stock-based compensation plans (in shares) | 51,000,000 | ||
Stock compensation | $ 146,000,000 | $ 130,000,000 | $ 122,000,000 |
Tax benefit related to stock based compensation | 36,000,000 | 53,000,000 | 70,000,000 |
Excess tax benefit for stock based compensation | $ 13,000,000 | $ 27,000,000 | $ 54,000,000 |
Marketing and Administrative Expenses | |||
Stockholders Equity Note [Line Items] | |||
Stock compensation expense allocation percentage | 75.00% | 75.00% |
STOCKHOLDERS_ EQUITY - Stock Op
STOCKHOLDERS’ EQUITY - Stock Options Narrative (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Stockholders Equity Note [Line Items] | |||
Percentage of common stock retained | 100.00% | ||
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 | $ 78,000,000 | $ 131,000,000 | $ 272,000,000 |
Unrecognized compensation cost related to all unvested | $ 60,000,000 | ||
Weighted-average period for all unvested | 1 year 8 months 12 days |
STOCKHOLDERS_ EQUITY - Stock _2
STOCKHOLDERS’ EQUITY - Stock Options Fair Value Assumptions (Details) - Employee stock option - $ / shares | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected volatility | 24.00% | 26.00% | 19.00% |
Expected life (in years) | 5 years 6 months | 5 years 6 months | 5 years 6 months |
Risk-free interest rate | 0.80% | 0.60% | 2.50% |
Dividend yield | 1.30% | 1.20% | 1.00% |
Fair value per stock (in us dollar per share) | $ 16 | $ 16 | $ 15 |
STOCKHOLDERS_ EQUITY - Summary
STOCKHOLDERS’ EQUITY - Summary of Stock Option Activity (Detail) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended |
Dec. 31, 2021USD ($)$ / sharesshares | |
Number of options | |
Number of options, Outstanding at beginning of year (in shares) | shares | 20,196 |
Number of options, Granted (in shares) | shares | 4,034 |
Number of options, Exercised (in shares) | shares | (2,759) |
Number of options, Forfeited (in shares) | shares | (729) |
Number of options, Expired (in shares) | shares | (46) |
Number of options, Outstanding at end of year (in shares) | shares | 20,696 |
Number of options, Vested or expected to vest at end of year (in shares) | shares | 20,391 |
Number of options , Exercisable at end of year (in shares) | shares | 13,821 |
Stock options grant weighted-average exercise price | |
Weighted-average exercise price, Outstanding at beginning of year (in dollars per share) | $ / shares | $ 56.88 |
Weighted-average exercise price, Granted (in dollars per share) | $ / shares | 77.32 |
Weighted-average exercise price, Exercised (in dollars per share) | $ / shares | 49.68 |
Weighted-average exercise price, Forfeited (in dollars per share) | $ / shares | 76.33 |
Weighted-average exercise price, Expired (in dollars per share) | $ / shares | 53.75 |
Weighted Average Exercise Price Outstanding at end of year (in dollars per share) | $ / shares | 61.14 |
Weighted Average Exercise Price Vested or expected to vest at end of year (in dollars per share) | $ / shares | 60.91 |
Weighted Average Exercise Price Exercisable at end of year (in dollars per share) | $ / shares | $ 53.46 |
Stock options grant Weighted-average remaining contractual life | |
Weighted average remaining contractual life, Outstanding at end of year | 5 years 10 months 24 days |
Weighted average remaining contractual life, Vested or expected to vest at end of year | 5 years 10 months 24 days |
Weighted average remaining contractual life, Exercisable at end of year | 4 years 7 months 6 days |
Stock options grant aggregate intrinsic value | |
Aggregate intrinsic value, outstanding, ending balance | $ | $ 511,187 |
Aggregate intrinsic value,Vested or expected to vest at end of year | $ | 508,645 |
Aggregate intrinsic value, Exercisable at end of year | $ | $ 447,799 |
STOCKHOLDERS_ EQUITY - RSUs Nar
STOCKHOLDERS’ EQUITY - RSUs Narrative (Details) - Restricted Stock Units - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
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 | $ 82,000,000 | ||
Weighted-average period for all unvested | 2 years 1 month 6 days | ||
Weighted average fair value (in dollars per share) | $ 79.30 | $ 77.51 | $ 75.60 |
Fair value of RSUs and restricted stock vested | $ 47,000,000 | $ 52,000,000 | $ 57,000,000 |
STOCKHOLDERS_ EQUITY - PSUs Nar
STOCKHOLDERS’ EQUITY - PSUs Narrative (Details) - Performance Shares $ in Millions | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Stockholders Equity Note [Line Items] | |
Unrecognized compensation cost related to all unvested | $ 23 |
Weighted-average period for all unvested | 1 year 6 months |
Target service period | 3 years |
STOCKHOLDERS_ EQUITY - Summar_2
STOCKHOLDERS’ EQUITY - Summary of Nonvested Restricted Stock Units Activity (Detail) - Restricted Stock Units - $ / shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
RSUs shares | |||
Nonvested Units at beginning of year (in shares) | 1,138 | ||
Vested (in shares) | (591) | ||
Forfeited (in shares) | (131) | ||
Nonvested Units at end of year (in shares) | 1,798 | 1,138 | |
RSUs weighted-average grant date fair value | |||
Weighted-average grant date fair value Nonvested Units at beginning of year (in dollars per share) | $ 73.11 | ||
Weighted-average grant date fair value Granted (in dollars per share) | 79.30 | $ 77.51 | $ 75.60 |
Weighted-average grant date fair value Vested (in dollars per share) | 71.63 | ||
Weighted-average grant date fair value Forfeited (in dollars per share) | 77.75 | ||
Weighted-average grant date fair value Nonvested Units at end of year (in dollars per share) | $ 78.01 | $ 73.11 | |
Baxter Employee | |||
RSUs shares | |||
Granted (in shares) | 714 | ||
RSUs weighted-average grant date fair value | |||
Weighted-average grant date fair value Granted (in dollars per share) | $ 77.84 | ||
Hillrom | |||
RSUs shares | |||
Granted (in shares) | 668 | ||
RSUs weighted-average grant date fair value | |||
Weighted-average grant date fair value Granted (in dollars per share) | $ 80.86 |
STOCKHOLDERS' EQUITY - Performa
STOCKHOLDERS' EQUITY - Performance Stock Units Fair Value Assumptions (Detail) - Performance Shares - $ / shares | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Baxter volatility | 28.00% | 26.00% | 19.00% |
Peer group volatility | |||
Peer group volatility minimum | 26.00% | 23.00% | 18.00% |
Peer group volatility maximum | 81.00% | 95.00% | 113.00% |
Correlation of returns | |||
Correlation of returns minimum | 0.05 | 0.19 | 0.13 |
Correlation of returns maximum | 0.65 | 0.70 | 0.63 |
Risk-free interest rate | 0.30% | 0.40% | 2.50% |
Fair value per PSU (in dollars per share) | $ 86 | $ 108 | $ 106 |
STOCKHOLDERS' EQUITY - Summary
STOCKHOLDERS' EQUITY - Summary of Nonvested Performance Stock Unit Activity (Detail) - Performance Shares shares in Thousands | 12 Months Ended |
Dec. 31, 2021$ / sharesshares | |
PSUs shares | |
Nonvested Units at beginning of year (in shares) | shares | 760 |
Granted (in shares) | shares | 241 |
Vested (in shares) | shares | (178) |
Forfeited (in shares) | shares | (91) |
Nonvested Units at end of year (in shares) | shares | 732 |
PSUs weighted-average grant date fair value | |
Weighted-average grant date fair value Nonvested Units at beginning of year (in dollars per share) | $ / shares | $ 86.69 |
Weighted-average grant date fair value Granted (in dollars per share) | $ / shares | 78.24 |
Weighted-average grant date fair value Vested (in dollars per share) | $ / shares | 78.41 |
Weighted-average grant date fair value Forfeited (in dollars per share) | $ / shares | 87.63 |
Weighted-average grant date fair value Nonvested Units at end of year (in dollars per share) | $ / shares | $ 85.87 |
STOCKHOLDERS_ EQUITY - Employee
STOCKHOLDERS’ EQUITY - Employee Purchase Plan Narrative (Details) | May 07, 2019shares | Nov. 30, 2021$ / shares | May 31, 2021$ / shares | Apr. 30, 2021$ / shares | Feb. 28, 2021$ / shares | Jul. 31, 2020$ / shares | Mar. 31, 2020USD ($)employee | Dec. 31, 2021USD ($)$ / sharesshares | Dec. 31, 2020USD ($)$ / sharesshares | Dec. 31, 2019USD ($)$ / sharesshares | Dec. 31, 2018USD ($)shares | Oct. 31, 2020USD ($) | Nov. 30, 2018USD ($) | Feb. 28, 2018USD ($) | Nov. 30, 2016USD ($) | Jul. 31, 2012USD ($) |
Stockholders Equity Note [Line Items] | ||||||||||||||||
Shares available for future awards under the stock-based compensation plans (in shares) | 51,000,000 | |||||||||||||||
Number of employees affected | employee | 123 | |||||||||||||||
Cash dividends declared per common share (in dollars per share) | $ / shares | $ 0.28 | $ 0.28 | $ 0.245 | $ 0.245 | $ 0.28 | $ 1.085 | $ 0.955 | $ 0.850 | ||||||||
Cash dividends declared per common share annualized basis (in dollars per share) | $ / shares | $ 1.12 | $ 0.98 | $ 0.98 | $ 1.12 | ||||||||||||
Stock repurchase program, authorized amount | $ | $ 2,000,000,000 | |||||||||||||||
Stock repurchase program, additional authorized amount | $ | $ 1,500,000,000 | $ 2,000,000,000 | $ 1,500,000,000 | $ 1,500,000,000 | ||||||||||||
Purchases of common stock (in shares) | 7,300,000 | 6,300,000 | 16,500,000 | |||||||||||||
Purchases of treasury stock | $ | $ 600,000,000 | $ 500,000,000 | $ 1,247,000,000 | |||||||||||||
Remaining value available under stock repurchase programs | $ | $ 1,300,000,000 | |||||||||||||||
Preferred stock authorized (in shares) | 100,000,000 | |||||||||||||||
Preferred stock (in shares) | 0 | 0 | ||||||||||||||
Common stock in treasury | ||||||||||||||||
Stockholders Equity Note [Line Items] | ||||||||||||||||
Purchases of common stock (in shares) | 7,000,000 | 6,000,000 | 16,000,000 | |||||||||||||
Purchases of treasury stock | $ | $ 600,000,000 | $ 500,000,000 | $ 1,293,000,000 | |||||||||||||
ASR Agreement | ||||||||||||||||
Stockholders Equity Note [Line Items] | ||||||||||||||||
Stock repurchase program, authorized amount | $ | $ 300,000,000 | |||||||||||||||
Purchases of common stock (in shares) | 600,000 | 3,600,000 | ||||||||||||||
Employee Stock Purchase Plan | ||||||||||||||||
Stockholders Equity Note [Line Items] | ||||||||||||||||
Employee purchase price, percent | 85.00% | |||||||||||||||
Authorized shares available for future awards under the stock-based compensation plans (in shares) | 20,000,000 | |||||||||||||||
Shares available for future awards under the stock-based compensation plans (in shares) | 11,000,000 | |||||||||||||||
Share issued, ESPP (in shares) | 700,000 | 700,000 | 700,000 | |||||||||||||
Employee stock option | ||||||||||||||||
Stockholders Equity Note [Line Items] | ||||||||||||||||
Incremental compensation cost | $ | $ 8,000,000 |
ACCUMULATED OTHER COMPREHENSI_3
ACCUMULATED OTHER COMPREHENSIVE INCOME - Summary of Changes in AOCI by Component (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Beginning of year | $ 8,726 | $ 7,912 | $ 7,866 |
Other comprehensive income (loss) before reclassifications | (156) | 309 | |
Amounts reclassified from AOCI | 90 | 87 | |
Net other comprehensive (loss) income | (66) | 396 | 274 |
End of year | 9,121 | 8,726 | 7,912 |
CTA | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Beginning of year | (2,587) | (2,954) | |
Other comprehensive income (loss) before reclassifications | (320) | 367 | |
Amounts reclassified from AOCI | 0 | 0 | |
Net other comprehensive (loss) income | (320) | 367 | |
End of year | (2,907) | (2,587) | (2,954) |
Pension and OPEB plans | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Beginning of year | (574) | (715) | |
Other comprehensive income (loss) before reclassifications | 160 | 59 | |
Amounts reclassified from AOCI | 67 | 82 | |
Net other comprehensive (loss) income | 227 | 141 | |
End of year | (347) | (574) | (715) |
Hedging activities | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Beginning of year | (153) | ||
Other comprehensive income (loss) before reclassifications | 4 | ||
Amounts reclassified from AOCI | 23 | ||
Net other comprehensive (loss) income | 27 | ||
End of year | (126) | (153) | |
Hedging activities | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Beginning of year | (153) | (41) | |
Other comprehensive income (loss) before reclassifications | (117) | ||
Amounts reclassified from AOCI | 5 | ||
Net other comprehensive (loss) income | (112) | ||
End of year | (153) | (41) | |
Accumulated Other Comprehensive Income (Loss) | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Beginning of year | (3,314) | (3,710) | |
End of year | $ (3,380) | $ (3,314) | $ (3,710) |
ACCUMULATED OTHER COMPREHENSI_4
ACCUMULATED OTHER COMPREHENSIVE INCOME - Summary of Amounts Reclassification from AOCI to Net Income (Detail) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||
Amortization of net losses and prior service costs or credits | $ (41) | $ (190) | $ (731) | ||
Settlement charges | $ (43) | $ (755) | (2) | (46) | (755) |
Income before income taxes | 1,477 | 1,292 | 970 | ||
Cost of sales | (7,679) | (7,086) | (6,601) | ||
Reclassifications, Income tax expense (benefit) | (182) | (182) | 41 | ||
Net Income (Loss) Attributable to Parent | 1,284 | 1,102 | $ 1,001 | ||
Reclassification out of Accumulated Other Comprehensive Income | |||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||
Net Income (Loss) Attributable to Parent | (90) | (87) | |||
Amortization of pension and other employee benefits items | Reclassification out of Accumulated Other Comprehensive Income | |||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||
Amortization of net losses and prior service costs or credits | (82) | (59) | |||
Settlement charges | (2) | (46) | |||
Income before income taxes | (84) | (105) | |||
Reclassifications, Income tax expense (benefit) | 17 | 23 | |||
Net Income (Loss) Attributable to Parent | (67) | (82) | |||
Hedging activities | Reclassification out of Accumulated Other Comprehensive Income | |||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||
Income before income taxes | (29) | (6) | |||
Reclassifications, Income tax expense (benefit) | 6 | 1 | |||
Net Income (Loss) Attributable to Parent | (23) | (5) | |||
Hedging activities | Reclassification out of Accumulated Other Comprehensive Income | Foreign exchange contracts | |||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||
Cost of sales | (23) | (5) | |||
Hedging activities | Reclassification out of Accumulated Other Comprehensive Income | Interest rate contracts | |||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||
Interest expense, net | $ (6) | $ (1) |
REVENUES (Details)
REVENUES (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |||
Net trade accounts receivable | $ 2,400 | $ 1,700 | |
Disaggregation of Revenue [Line Items] | |||
Contract assets | 195 | 134 | |
Contract liabilities | 246 | 66 | |
Contract liability, revenue recognized | 20 | ||
Total net sales | $ 12,784 | 11,673 | $ 11,362 |
Minimum | Software sales | |||
Disaggregation of Revenue [Line Items] | |||
Revenue Recognized Contract Period | 1 year | ||
Maximum | Software sales | |||
Disaggregation of Revenue [Line Items] | |||
Revenue Recognized Contract Period | 5 years | ||
U.S. | |||
Disaggregation of Revenue [Line Items] | |||
Total net sales | $ 5,180 | 4,878 | 4,826 |
International | |||
Disaggregation of Revenue [Line Items] | |||
Total net sales | 7,604 | 6,795 | 6,536 |
Prepaid expenses and other current assets | |||
Disaggregation of Revenue [Line Items] | |||
Contract assets | 84 | 70 | |
Other non-current assets | |||
Disaggregation of Revenue [Line Items] | |||
Contract assets | 111 | 64 | |
Accrued expenses and other current liabilities | |||
Disaggregation of Revenue [Line Items] | |||
Contract liabilities | 162 | 32 | |
Other non-current liabilities | |||
Disaggregation of Revenue [Line Items] | |||
Contract liabilities | 84 | 34 | |
Contract manufacturing services | |||
Disaggregation of Revenue [Line Items] | |||
Contract assets | 50 | 47 | |
Software sales | |||
Disaggregation of Revenue [Line Items] | |||
Contract assets | 45 | 40 | |
Bundled equipment and consumable medical products contracts | |||
Disaggregation of Revenue [Line Items] | |||
Contract assets | 100 | 47 | |
Renal Care | |||
Disaggregation of Revenue [Line Items] | |||
Total net sales | 3,900 | 3,757 | 3,639 |
Renal Care | U.S. | |||
Disaggregation of Revenue [Line Items] | |||
Total net sales | 890 | 848 | 791 |
Renal Care | International | |||
Disaggregation of Revenue [Line Items] | |||
Total net sales | 3,010 | 2,909 | 2,848 |
Medication Delivery | |||
Disaggregation of Revenue [Line Items] | |||
Total net sales | 2,880 | 2,691 | 2,739 |
Medication Delivery | U.S. | |||
Disaggregation of Revenue [Line Items] | |||
Total net sales | 1,859 | 1,738 | 1,762 |
Medication Delivery | International | |||
Disaggregation of Revenue [Line Items] | |||
Total net sales | 1,021 | 953 | 977 |
Pharmaceuticals | |||
Disaggregation of Revenue [Line Items] | |||
Total net sales | 2,291 | 2,098 | 2,119 |
Pharmaceuticals | U.S. | |||
Disaggregation of Revenue [Line Items] | |||
Total net sales | 753 | 849 | 904 |
Pharmaceuticals | International | |||
Disaggregation of Revenue [Line Items] | |||
Total net sales | 1,538 | 1,249 | 1,215 |
Clinical Nutrition | |||
Disaggregation of Revenue [Line Items] | |||
Total net sales | 964 | 910 | 860 |
Clinical Nutrition | U.S. | |||
Disaggregation of Revenue [Line Items] | |||
Total net sales | 343 | 330 | 308 |
Clinical Nutrition | International | |||
Disaggregation of Revenue [Line Items] | |||
Total net sales | 621 | 580 | 552 |
Advanced Surgery | |||
Disaggregation of Revenue [Line Items] | |||
Total net sales | 977 | 886 | 875 |
Advanced Surgery | U.S. | |||
Disaggregation of Revenue [Line Items] | |||
Total net sales | 545 | 516 | 533 |
Advanced Surgery | International | |||
Disaggregation of Revenue [Line Items] | |||
Total net sales | 432 | 370 | 342 |
Acute Therapies | |||
Disaggregation of Revenue [Line Items] | |||
Total net sales | 782 | 740 | 535 |
Acute Therapies | U.S. | |||
Disaggregation of Revenue [Line Items] | |||
Total net sales | 287 | 286 | 184 |
Acute Therapies | International | |||
Disaggregation of Revenue [Line Items] | |||
Total net sales | 495 | 454 | 351 |
BioPharma Solutions | |||
Disaggregation of Revenue [Line Items] | |||
Total net sales | 669 | 486 | 469 |
BioPharma Solutions | U.S. | |||
Disaggregation of Revenue [Line Items] | |||
Total net sales | 273 | 234 | 257 |
BioPharma Solutions | International | |||
Disaggregation of Revenue [Line Items] | |||
Total net sales | 396 | 252 | 212 |
Patient support systems | |||
Disaggregation of Revenue [Line Items] | |||
Total net sales | 115 | 0 | 0 |
Patient support systems | U.S. | |||
Disaggregation of Revenue [Line Items] | |||
Total net sales | 86 | 0 | 0 |
Patient support systems | International | |||
Disaggregation of Revenue [Line Items] | |||
Total net sales | 29 | 0 | 0 |
Front line care | |||
Disaggregation of Revenue [Line Items] | |||
Total net sales | 70 | 0 | 0 |
Front line care | U.S. | |||
Disaggregation of Revenue [Line Items] | |||
Total net sales | 51 | 0 | 0 |
Front line care | International | |||
Disaggregation of Revenue [Line Items] | |||
Total net sales | 19 | 0 | 0 |
Surgical solutions | |||
Disaggregation of Revenue [Line Items] | |||
Total net sales | 27 | 0 | 0 |
Surgical solutions | U.S. | |||
Disaggregation of Revenue [Line Items] | |||
Total net sales | 12 | 0 | 0 |
Surgical solutions | International | |||
Disaggregation of Revenue [Line Items] | |||
Total net sales | 15 | 0 | 0 |
Other | |||
Disaggregation of Revenue [Line Items] | |||
Total net sales | 109 | 105 | 126 |
Other | U.S. | |||
Disaggregation of Revenue [Line Items] | |||
Total net sales | 81 | 77 | 87 |
Other | International | |||
Disaggregation of Revenue [Line Items] | |||
Total net sales | $ 28 | $ 28 | $ 39 |
BUSINESS OPTIMIZATION CHARGES -
BUSINESS OPTIMIZATION CHARGES - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2021 | |
Restructuring and Related Activities [Abstract] | ||
Cumulative pre-tax costs incurred | $ 1,200 | |
Expected additional pre-tax cash costs | $ 30 | |
Sale of properties | $ 17 |
BUSINESS OPTIMIZATION CHARGES_2
BUSINESS OPTIMIZATION CHARGES - Schedule of Business Optimization Charges (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Restructuring and Related Activities [Abstract] | |||
Restructuring charges | $ 91 | $ 111 | $ 134 |
Costs to implement business optimization programs | 23 | 23 | 45 |
Accelerated depreciation | 0 | 0 | 5 |
Total business optimization charges | $ 114 | $ 134 | $ 184 |
BUSINESS OPTIMIZATION CHARGES_3
BUSINESS OPTIMIZATION CHARGES - Components of Restructuring Costs (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | $ 91 | $ 111 | $ 134 |
Employee termination costs | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | 73 | 92 | 75 |
Contract termination and other costs | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | 2 | 8 | 11 |
Asset impairments | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | 16 | 11 | 48 |
COGS | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | 53 | 48 | 60 |
COGS | Employee termination costs | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | 37 | 36 | 13 |
COGS | Contract termination and other costs | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | 0 | 4 | 10 |
COGS | Asset impairments | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | 16 | 8 | 37 |
SG&A | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | 37 | 61 | 40 |
SG&A | Employee termination costs | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | 35 | 54 | 37 |
SG&A | Contract termination and other costs | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | 2 | 4 | 1 |
SG&A | Asset impairments | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | 0 | 3 | 2 |
R&D | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | 1 | 2 | 34 |
R&D | Employee termination costs | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | 1 | 2 | 25 |
R&D | Contract termination and other costs | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | 0 | 0 | 0 |
R&D | Asset impairments | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | $ 0 | $ 0 | $ 9 |
BUSINESS OPTIMIZATION CHARGES_4
BUSINESS OPTIMIZATION CHARGES - Summary of Activity in Reserves related to Business Optimization Initiatives (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Restructuring Reserve [Roll Forward] | |||
Assumed in acquisition | $ 6 | ||
Restructuring charges | 91 | $ 111 | $ 134 |
Severance and Other Employee Related Costs | |||
Restructuring Reserve [Roll Forward] | |||
Reserve, beginning balance | 113 | 92 | 101 |
Restructuring charges | 94 | 116 | 113 |
Payments | (78) | (86) | (93) |
Reserve adjustments | (19) | (16) | (27) |
Currency translation | (7) | 7 | (2) |
Reserve, ending balance | $ 109 | $ 113 | $ 92 |
PENSION AND OTHER POSTRETIREM_3
PENSION AND OTHER POSTRETIREMENT BENEFIT PROGRAMS - Reconciliation of Pension and OPEB Plan Obligations, Assets and Funded Status (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Benefit obligations | |||
End of period | $ 4,443 | ||
Fair value of plan assets | |||
Beginning of period | 3,434 | ||
End of period | 3,784 | $ 3,434 | |
Amounts recognized in the consolidated balance sheets | |||
Noncurrent asset | 228 | 155 | |
Pension benefits | |||
Benefit obligations | |||
Beginning of period | 4,313 | 3,973 | |
Service cost | 87 | 83 | $ 74 |
Interest cost | 72 | 95 | 172 |
Participant contributions | 4 | 4 | |
Actuarial (gain) loss | (186) | 401 | |
Benefit payments | (103) | (109) | |
Settlements | (13) | (271) | |
Curtailment | (5) | (4) | |
Acquisitions | (364) | 0 | |
Plan Amendments | (15) | 0 | |
Foreign exchange and other | (105) | 141 | |
End of period | 4,443 | 4,313 | 3,973 |
Fair value of plan assets | |||
Beginning of period | 3,434 | 2,973 | |
Actual return on plan assets | 141 | 688 | |
Employer contributions | 73 | 74 | |
Participant contributions | 4 | 4 | |
Benefit payments | (103) | (109) | |
Settlements | (13) | (271) | |
Acquisitions | 305 | 0 | |
Foreign exchange and other | (57) | 75 | |
End of period | 3,784 | 3,434 | 2,973 |
Funded status | (659) | (879) | |
Amounts recognized in the consolidated balance sheets | |||
Noncurrent asset | 228 | 155 | |
Current liability | (29) | (30) | |
Noncurrent liability | (858) | (1,004) | |
Net liability recognized | (659) | (879) | |
OPEB | |||
Benefit obligations | |||
Beginning of period | 228 | 228 | |
Service cost | 1 | 1 | 1 |
Interest cost | 4 | 6 | 8 |
Participant contributions | 0 | 0 | |
Actuarial (gain) loss | (14) | 13 | |
Benefit payments | (19) | (20) | |
Settlements | 0 | 0 | |
Curtailment | 0 | 0 | |
Acquisitions | (11) | 0 | |
Plan Amendments | 0 | 0 | |
Foreign exchange and other | 0 | 0 | |
End of period | 211 | 228 | 228 |
Fair value of plan assets | |||
Beginning of period | 0 | 0 | |
Actual return on plan assets | 0 | 0 | |
Employer contributions | 19 | 20 | |
Participant contributions | 0 | 0 | |
Benefit payments | (19) | (20) | |
Settlements | 0 | 0 | |
Acquisitions | 0 | 0 | |
Foreign exchange and other | 0 | 0 | |
End of period | 0 | 0 | $ 0 |
Funded status | (211) | (228) | |
Amounts recognized in the consolidated balance sheets | |||
Noncurrent asset | 0 | 0 | |
Current liability | (17) | (18) | |
Noncurrent liability | (194) | (210) | |
Net liability recognized | $ (211) | $ (228) |
PENSION AND OTHER POSTRETIREM_4
PENSION AND OTHER POSTRETIREMENT BENEFIT PROGRAMS - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Defined Benefit Plan Disclosure [Line Items] | ||
Accumulated benefit obligation of company's pension plans | $ 4,300 | $ 4,100 |
Allowed variance from target allocation of plan assets | 5.00% | |
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 | $ 41 | |
OPEB | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Defined benefit plan, expected future employer contributions, next fiscal year | $ 19 | |
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 POSTRETIREM_5
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, 2021 | Dec. 31, 2020 |
Information relating to the individual plans in the funded status table above that have an ABO in excess of plan assets | ||
ABO | $ 2,991 | $ 2,920 |
Fair value of plan assets | $ 2,209 | $ 2,047 |
PENSION AND OTHER POSTRETIREM_6
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, 2021 | Dec. 31, 2020 |
Information relating to the individual plans in the funded status table above that have a PBO in excess of plan assets | ||
PBO | $ 3,254 | $ 3,421 |
Fair value of plan assets | $ 2,366 | $ 2,387 |
PENSION AND OTHER POSTRETIREM_7
PENSION AND OTHER POSTRETIREMENT BENEFIT PROGRAMS - Expected Net Pension and OPEB Plan Payments for Next 10 Years (Details) $ in Millions | Dec. 31, 2021USD ($) |
Pension benefits | |
Expected Net Pension and OPEB Plan Payments for the Next 10 Years | |
2022 | $ 126 |
2023 | 146 |
2024 | 161 |
2025 | 166 |
2026 | 179 |
2027 through 2031 | 1,018 |
Total expected net benefit payments for next 10 years | 1,796 |
OPEB | |
Expected Net Pension and OPEB Plan Payments for the Next 10 Years | |
2022 | 19 |
2023 | 17 |
2024 | 17 |
2025 | 16 |
2026 | 15 |
2027 through 2031 | 64 |
Total expected net benefit payments for next 10 years | $ 148 |
PENSION AND OTHER POSTRETIREM_8
PENSION AND OTHER POSTRETIREMENT BENEFIT PROGRAMS - Summary of Pre-Tax losses Included in AOCI (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Pension benefits | ||
Summary of the pre-tax losses included in AOCI | ||
Actuarial loss (gain) | $ 509 | $ 811 |
Prior service credit and transition obligation | 8 | (9) |
Total pre-tax loss (gain) recognized in AOCI | 517 | 802 |
OPEB | ||
Summary of the pre-tax losses included in AOCI | ||
Actuarial loss (gain) | (37) | (23) |
Prior service credit and transition obligation | (36) | (45) |
Total pre-tax loss (gain) recognized in AOCI | $ (73) | $ (68) |
PENSION AND OTHER POSTRETIREM_9
PENSION AND OTHER POSTRETIREMENT BENEFIT PROGRAMS - Summary of Net-of-Tax Amounts Recorded in OCI Relating to Pension and OPEB Plans (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
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 $43 in 2021, $17 in 2020 and $(64) in 2019 | $ 160 | $ 59 | $ (184) |
Amortization of loss to earnings, net of tax of $17 in 2021, $12 in 2020 and $6 in 2019 | 65 | 47 | 25 |
Settlement charges, net of tax of $0 in 2021, $11 in 2020 and $188 in 2019 | 2 | 35 | 567 |
Pension and other employee benefits | 227 | 141 | 408 |
Gain (loss) arising during the year, tax expense (benefit) | 43 | 17 | (64) |
Amortization of loss to earnings, tax benefit | 17 | 12 | 6 |
Settlement, tax benefit | $ 0 | $ 11 | $ 188 |
PENSION AND OTHER POSTRETIRE_10
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, 2019 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Net periodic benefit cost | |||||
Settlement charges | $ (43) | $ (755) | $ (2) | $ (46) | $ (755) |
Pension benefits | |||||
Net periodic benefit cost | |||||
Service cost | 87 | 83 | 74 | ||
Interest cost | 72 | 95 | 172 | ||
Expected return on plan assets | (143) | (163) | (264) | ||
Amortization of net losses and other deferred amounts | 91 | 77 | 58 | ||
Other | (4) | 0 | 0 | ||
Net periodic benefit cost | 105 | 138 | 795 | ||
OPEB | |||||
Net periodic benefit cost | |||||
Service cost | 1 | 1 | 1 | ||
Interest cost | 4 | 6 | 8 | ||
Amortization of net losses and prior service credit | (9) | (18) | (27) | ||
Net periodic benefit cost | $ (4) | $ (11) | $ (18) |
PENSION AND OTHER POSTRETIRE_11
PENSION AND OTHER POSTRETIREMENT BENEFIT PROGRAMS - Weighted-Average Assumptions Used in Determining (Details) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Pension benefits | Unfunded Plan | International plans | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Discount rate | 1.47% | 1.00% | |
Rate of compensation increase | 3.11% | 3.03% | |
Discount rate | 1.00% | 1.34% | 2.02% |
Expected return on plan assets | 3.58% | 4.23% | 5.45% |
Rate of compensation increase | 3.03% | 3.03% | 3.08% |
Pension benefits | Nonqualified Plan | U.S. | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Discount rate | 3.01% | 2.73% | |
Rate of compensation increase | 3.68% | 3.68% | |
Discount rate | 2.73% | 3.44% | 4.18% |
Expected return on plan assets | 5.50% | 6.50% | 6.29% |
Rate of compensation increase | 3.68% | 3.68% | 3.66% |
OPEB | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Annual rate of increase in the per-capita cost | 6.25% | 6.50% | |
Rate decreased to | 5.00% | 5.00% | |
Annual rate of increase in the per-capita cost | 6.25% | 6.50% | 6.75% |
Rate decreased to | 5.00% | 5.00% | 5.00% |
OPEB | Nonqualified Plan | U.S. | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Discount rate | 2.76% | 2.33% | |
Discount rate | 2.33% | 3.16% | 4.20% |
PENSION AND OTHER POSTRETIRE_12
PENSION AND OTHER POSTRETIREMENT BENEFIT PROGRAMS - Fair Value of Pension Plan Assets and Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of pension plan assets | $ 3,784 | $ 3,434 | |
Quoted prices in active markets for identical assets (Level 1) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of pension plan assets | 758 | 764 | |
Significant other observable inputs (Level 2) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of pension plan assets | 1,928 | 1,933 | |
Significant unobservable inputs (Level 3) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of pension plan assets | 9 | 11 | |
Fair Value, Measured at NAV | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of pension plan assets | 1,089 | 726 | |
Cash and cash equivalents | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of pension plan assets | 368 | 265 | |
Cash and cash equivalents | Quoted prices in active markets for identical assets (Level 1) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of pension plan assets | 50 | 91 | |
Cash and cash equivalents | Significant other observable inputs (Level 2) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of pension plan assets | 318 | 174 | |
Cash and cash equivalents | Significant unobservable inputs (Level 3) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of pension plan assets | 0 | 0 | |
Cash and cash equivalents | Fair Value, Measured at NAV | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of pension plan assets | 0 | 0 | |
U.S. government and government agency issues | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of pension plan assets | 271 | 280 | |
U.S. government and government agency issues | Quoted prices in active markets for identical assets (Level 1) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of pension plan assets | 0 | 0 | |
U.S. government and government agency issues | Significant other observable inputs (Level 2) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of pension plan assets | 271 | 280 | |
U.S. government and government agency issues | Significant unobservable inputs (Level 3) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of pension plan assets | 0 | 0 | |
U.S. government and government agency issues | Fair Value, Measured at NAV | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of pension plan assets | 0 | 0 | |
Corporate bonds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of pension plan assets | 573 | 744 | |
Corporate bonds | Quoted prices in active markets for identical assets (Level 1) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of pension plan assets | 0 | 0 | |
Corporate bonds | Significant other observable inputs (Level 2) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of pension plan assets | 573 | 744 | |
Corporate bonds | Significant unobservable inputs (Level 3) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of pension plan assets | 0 | 0 | |
Corporate bonds | Fair Value, Measured at NAV | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of pension plan assets | 0 | 0 | |
Common stock | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of pension plan assets | 452 | 453 | |
Common stock | Quoted prices in active markets for identical assets (Level 1) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of pension plan assets | 452 | 453 | |
Common stock | Significant other observable inputs (Level 2) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of pension plan assets | 0 | 0 | |
Common stock | Significant unobservable inputs (Level 3) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of pension plan assets | 0 | 0 | |
Common stock | Fair Value, Measured at NAV | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of pension plan assets | 0 | 0 | |
Mutual funds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of pension plan assets | 521 | 510 | |
Mutual funds | Quoted prices in active markets for identical assets (Level 1) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of pension plan assets | 235 | 217 | |
Mutual funds | Significant other observable inputs (Level 2) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of pension plan assets | 286 | 293 | |
Mutual funds | Significant unobservable inputs (Level 3) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of pension plan assets | 0 | 0 | |
Mutual funds | Fair Value, Measured at NAV | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of pension plan assets | 0 | 0 | |
Common/collective trust funds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of pension plan assets | 1,118 | 771 | |
Common/collective trust funds | Quoted prices in active markets for identical assets (Level 1) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of pension plan assets | 0 | 0 | |
Common/collective trust funds | Significant other observable inputs (Level 2) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of pension plan assets | 358 | 341 | |
Common/collective trust funds | Significant unobservable inputs (Level 3) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of pension plan assets | 0 | 0 | |
Common/collective trust funds | Fair Value, Measured at NAV | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of pension plan assets | 760 | 430 | |
Partnership investments | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of pension plan assets | 329 | 296 | |
Partnership investments | Quoted prices in active markets for identical assets (Level 1) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of pension plan assets | 0 | 0 | |
Partnership investments | Significant other observable inputs (Level 2) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of pension plan assets | 0 | 0 | |
Partnership investments | Significant unobservable inputs (Level 3) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of pension plan assets | 0 | 0 | |
Partnership investments | Fair Value, Measured at NAV | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of pension plan assets | 329 | 296 | |
Other holdings | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of pension plan assets | 152 | 115 | |
Other holdings | Quoted prices in active markets for identical assets (Level 1) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of pension plan assets | 21 | 22 | |
Other holdings | Significant other observable inputs (Level 2) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of pension plan assets | 122 | 82 | |
Other holdings | Significant unobservable inputs (Level 3) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of pension plan assets | 9 | 11 | $ 10 |
Other holdings | Fair Value, Measured at NAV | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of pension plan assets | $ 0 | 0 | |
Collateral held on loaned securities | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of pension plan assets | 19 | ||
Collateral held on loaned securities | Quoted prices in active markets for identical assets (Level 1) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of pension plan assets | 0 | ||
Collateral held on loaned securities | Significant other observable inputs (Level 2) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of pension plan assets | 19 | ||
Collateral held on loaned securities | Significant unobservable inputs (Level 3) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of pension plan assets | 0 | ||
Collateral held on loaned securities | Fair Value, Measured at NAV | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of pension plan assets | 0 | ||
Collateral to be paid on loaned securities | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Collateral to be paid on loaned securities | (19) | ||
Collateral to be paid on loaned securities | Quoted prices in active markets for identical assets (Level 1) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Collateral to be paid on loaned securities | (19) | ||
Collateral to be paid on loaned securities | Significant other observable inputs (Level 2) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Collateral to be paid on loaned securities | 0 | ||
Collateral to be paid on loaned securities | Significant unobservable inputs (Level 3) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Collateral to be paid on loaned securities | 0 | ||
Collateral to be paid on loaned securities | Fair Value, Measured at NAV | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Collateral to be paid on loaned securities | $ 0 |
PENSION AND OTHER POSTRETIRE_13
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, 2021 | Dec. 31, 2020 | |
Defined Benefit Plan, Change in Fair Value of Plan Assets, Level 3 Reconciliation [Roll Forward] | ||
Beginning of period | $ 115 | |
End of period | 152 | $ 115 |
Significant unobservable inputs (Level 3) | ||
Defined Benefit Plan, Change in Fair Value of Plan Assets, Level 3 Reconciliation [Roll Forward] | ||
Beginning of period | 11 | 10 |
Sales | (2) | (1) |
End of period | $ 9 | $ 11 |
PENSION AND OTHER POSTRETIRE_14
PENSION AND OTHER POSTRETIREMENT BENEFIT PROGRAMS - Funded Status Percentage of Company's Pension Plans (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Funded status percentage of the company's pension plans | ||
Fair value of plan assets | $ 3,784 | $ 3,434 |
PBO | $ 4,443 | |
Funded status percentage | 85.00% | |
Qualified Pension Plan | U.S. | ||
Funded status percentage of the company's pension plans | ||
Fair value of plan assets | $ 2,700 | |
PBO | $ 2,713 | |
Funded status percentage | 100.00% | |
Qualified Pension Plan | International plans | ||
Funded status percentage of the company's pension plans | ||
Fair value of plan assets | $ 1,084 | |
PBO | $ 1,015 | |
Funded status percentage | 107.00% | |
Non Qualified Pension Plan | U.S. | ||
Funded status percentage of the company's pension plans | ||
PBO | $ 257 | |
Non Qualified Pension Plan | International plans | ||
Funded status percentage of the company's pension plans | ||
PBO | $ 458 |
PENSION AND OTHER POSTRETIRE_15
PENSION AND OTHER POSTRETIREMENT BENEFIT PROGRAMS - Pension Plan Amendments (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Oct. 31, 2019 | |
Defined Benefit Plan Disclosure [Line Items] | ||||||
Payment for participants | $ 252 | |||||
Settlement charges | $ 43 | $ 755 | $ 2 | $ 46 | $ 755 | |
Pension benefits | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Pension plan liabilities | $ 2,400 |
PENSION AND OTHER POSTRETIRE_16
PENSION AND OTHER POSTRETIREMENT BENEFIT PROGRAMS - U.S. Defined Contribution Plan (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Retirement Benefits [Abstract] | |||
Defined contribution plan, contributions by employer | $ 59 | $ 61 | $ 53 |
INCOME TAXES - Income From Cont
INCOME TAXES - Income From Continuing Operations Before Income Tax Expense by Category (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |||
United States | $ (424) | $ (329) | $ (586) |
International | 1,901 | 1,621 | 1,556 |
Income before income taxes | $ 1,477 | $ 1,292 | $ 970 |
INCOME TAXES - Income Tax Expen
INCOME TAXES - Income Tax Expense Related To Continuing Operations (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Current | |||
Federal | $ (11) | $ 7 | $ 8 |
State and local | 10 | (7) | 3 |
International | 329 | 270 | 258 |
Current income tax expense | 328 | 270 | 269 |
Deferred | |||
Federal | (103) | (99) | (140) |
State and local | (8) | 5 | (29) |
International | (35) | 6 | (141) |
Deferred income tax expense (benefit) | (146) | (88) | (310) |
Income tax expense (benefit) | $ 182 | $ 182 | $ (41) |
INCOME TAXES - Deferred Tax Ass
INCOME TAXES - Deferred Tax Assets and Liabilities (Detail) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Deferred tax assets | ||
Accrued liabilities and other | $ 434 | $ 376 |
Pension and other postretirement benefits | 174 | 218 |
Tax credit and net operating loss carryforwards | 939 | 905 |
Swiss tax reform net asset basis step-up | 161 | 174 |
Operating lease liabilities | 155 | 148 |
Valuation allowances | (401) | (454) |
Total deferred tax assets | 1,462 | 1,367 |
Deferred tax liabilities | ||
Subsidiaries’ unremitted earnings | 66 | 77 |
Long-lived assets and other | 1,831 | 539 |
Operating lease right-of-use assets | 151 | 146 |
Total deferred tax liabilities | 2,048 | 762 |
Net deferred tax asset (liability) | $ (586) | |
Net deferred tax asset (liability) | $ 605 |
INCOME TAXES - Additional Infor
INCOME TAXES - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Taxes [Line Items] | |||
Valuation allowance | $ 401 | $ 454 | |
Net asset basis step-up | $ 863 | ||
Swiss tax reform net asset basis step-up | 161 | 174 | |
Deferred tax asset, swiss tax reform net asset basis step-up, valuation allowance | 59 | 72 | |
One time transitional tax expense | 286 | ||
Expense (benefit), would be incurred if earnings remitted | 29 | ||
Tax-deductible foreign statutory loss on an investment in a foreign subsidiary | 58 | 0 | 0 |
Deferred tax assets, net of valuation allowance | 1,462 | 1,367 | |
Unrecognized interest and penalties expense | 19 | 17 | |
Deferred tax assets | 605 | ||
Increase (decrease) due to notional interest deduction | 57 | ||
Unrecognized tax benefits that, if recognized, would impact effective tax rate | 39 | 48 | 70 |
Gross unrecognized tax benefit liability | 39 | 47 | |
Expected reduction in gross unrecognized tax benefits | 30 | ||
Hillrom | |||
Income Taxes [Line Items] | |||
Deferred tax liabilities | 1,300 | ||
Tax Year No Expiration | |||
Income Taxes [Line Items] | |||
Operating loss carryforwards | 334 | ||
State and Local Jurisdiction | |||
Income Taxes [Line Items] | |||
Operating loss carryforwards | 1,100 | ||
Domestic Tax Authority | |||
Income Taxes [Line Items] | |||
Operating loss carryforwards | 455 | ||
Tax credit carryforwards | 411 | ||
Foreign tax credit carryforward | 339 | ||
Foreign Tax Authority | |||
Income Taxes [Line Items] | |||
Operating loss carryforwards | 1,400 | ||
Tax credit carryforwards | 15 | ||
Valuation allowance | $ 98 | $ 157 | |
Deferred tax assets, net of valuation allowance | 90 | ||
Valuation allowance, deferred tax asset, increase (decrease), amount | 5 | ||
Deferred tax assets | $ 24 | ||
Impact on earnings from continuing operations per diluted shares | $ 0.38 | $ 0.33 | $ 0.27 |
Foreign Tax Authority | Tax Year No Expiration | |||
Income Taxes [Line Items] | |||
Operating loss carryforwards | $ 798 |
INCOME TAXES - Income Tax Exp_2
INCOME TAXES - Income Tax Expense Reconciliation (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Expense Reconciliation | |||
Income tax expense at U.S. statutory rate | $ 310 | $ 271 | $ 204 |
Tax incentives | (193) | (169) | (140) |
State and local taxes, net of federal benefit | 10 | (2) | (17) |
Impact of foreign taxes | 103 | 88 | 65 |
Tax-deductible foreign statutory loss on an investment in a foreign subsidiary | (58) | 0 | 0 |
Unfavorable court decision in a foreign jurisdiction related to an uncertain tax position | 22 | 0 | 0 |
Swiss tax reform net asset basis step-up | 0 | 0 | (159) |
Deferred tax revaluation due to 2017 Tax Act and foreign tax reform | 0 | 0 | (19) |
Transition tax due to 2017 Tax Act | 0 | 0 | (16) |
Valuation allowances | (61) | 8 | 110 |
Stock compensation windfall tax benefits | (13) | (27) | (54) |
Research and development tax credits | (5) | (7) | (13) |
Unutilized foreign tax credits | 14 | 15 | 5 |
Other, net | 53 | 5 | (7) |
Income tax expense (benefit) | $ 182 | $ 182 | $ (41) |
INCOME TAXES - Reconciliation o
INCOME TAXES - Reconciliation of Company's Unrecognized Tax Benefits (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Reconciliation Of Unrecognized Tax Benefits Excluding Amounts Pertaining To Examined Tax Returns | |||
Balance at beginning of the year | $ 90 | $ 111 | $ 127 |
Increase due to acquisition | 11 | 0 | 0 |
Increase associated with tax positions taken during the current year | 31 | 8 | 8 |
Increase (decrease) associated with tax positions taken during a prior year | (3) | (1) | (3) |
Settlements | (2) | (18) | (20) |
Decrease associated with lapses in statutes of limitations | (16) | (10) | (1) |
Balance at end of the year | $ 111 | $ 90 | $ 111 |
EARNINGS PER SHARE - Reconcilia
EARNINGS PER SHARE - Reconciliation of Basic Shares to Diluted Shares (Details) - shares shares in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Reconciliation of Basic Shares to Diluted Shares | |||
Basic (in shares) | 502 | 509 | 509 |
Effect of dilutive securities (in shares) | 6 | 8 | 10 |
Diluted (in shares) | 508 | 517 | 519 |
EARNINGS PER SHARE - Additional
EARNINGS PER SHARE - Additional Information (Details) - shares shares in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |||
Anti-dilutive securities excluded from computation of EPS (in shares) | 7 | 4 | 4 |
FINANCIAL INSTRUMENTS, DERIVA_3
FINANCIAL INSTRUMENTS, DERIVATIVES AND HEDGING ACTIVITIES (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Trade Receivables Held-for-sale, Net, Reconciliation to Cash Flow [Roll Forward] | |||
Sold receivables at beginning of year | $ 96 | $ 79 | $ 69 |
Proceeds from sales of receivables | 339 | 348 | 292 |
Cash collections (remitted to the owners of the receivables) | (346) | (335) | (282) |
Effect of foreign exchange rate changes | (8) | 4 | 0 |
Sold receivables at end of year | $ 81 | $ 96 | $ 79 |
FINANCIAL INSTRUMENTS, DERIVA_4
FINANCIAL INSTRUMENTS, DERIVATIVES AND HEDGING ACTIVITIES - Additional Information (Details) | 1 Months Ended | 12 Months Ended | ||||
May 31, 2019EUR (€) | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Nov. 30, 2020USD ($) | May 31, 2017EUR (€) | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||
Derivative, notional amount | $ 0 | $ 0 | ||||
Currency transaction and translation adjustment, net of tax | $ (320,000,000) | 367,000,000 | $ (95,000,000) | |||
Payments of derivative issuance costs | 173,000,000 | |||||
1.30% Senior Notes due May 2025 | ||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||
Senior notes | € | € 600,000,000 | |||||
0.40% Senior Notes due May 2024 | ||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||
Senior notes | € | € 750,000,000 | |||||
1.3% Senior Notes due May 2029 | ||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||
Senior notes | € | 750,000,000 | |||||
Senior Notes Due 2031 | Senior Notes | ||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||
Senior notes | $ 650,000,000 | |||||
Designated as Hedging Instrument | ||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||
Derivative, notional amount | 0 | |||||
Not Designated as Hedging Instrument | ||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||
Derivative, notional amount | 851,000,000 | 1,000,000,000 | ||||
Net investment hedge | ||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||
Accumulated pre-tax unrealized translation losses in AOCI related to euro-denominated senior notes | 45,000,000 | |||||
Net investment hedge | Designated as Hedging Instrument | Forward Contracts | ||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||
Currency transaction and translation adjustment, net of tax | € | € 1,200,000,000 | |||||
Foreign exchange contracts | ||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||
Derivative, notional amount | $ 377,000,000 | 345,000,000 | ||||
Maximum length of time hedge in cash flow hedge | 12 months | |||||
Interest rate contracts | ||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||
Derivative, notional amount | 550,000,000 | |||||
Interest rate contracts | Fair value hedges | ||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||
Derivative, notional amount | $ 0 | $ 0 |
FINANCIAL INSTRUMENTS, DERIVA_5
FINANCIAL INSTRUMENTS, DERIVATIVES AND HEDGING ACTIVITIES - Summary of Gains and Losses on Derivative Instruments (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Derivative Instruments, Gain (Loss) [Line Items] | |||
Total, gain (loss) recognized in OCI | $ 205 | $ (376) | $ (34) |
Total, gain (loss) reclassified from AOCI into income | (29) | (6) | 4 |
Other expense, net | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Net investment hedges | 0 | 0 | 0 |
Foreign exchange contracts | Other expense, net | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain (loss) recognized in income, undesignated derivative instruments | (36) | 49 | 17 |
Cash Flow Hedges | Interest rate contracts | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain (loss) recognized in OCI | 0 | (131) | (37) |
Cash Flow Hedges | Interest rate contracts | Interest expense, net | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain (loss) reclassified from AOCI into income | (6) | (1) | 0 |
Cash Flow Hedges | Foreign exchange contracts | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain (loss) recognized in OCI | 5 | (21) | (9) |
Cash Flow Hedges | Foreign exchange contracts | COGS | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain (loss) reclassified from AOCI into income | (23) | (5) | 4 |
Net investment hedge | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Net investment hedges | $ 200 | $ (224) | $ 12 |
FINANCIAL INSTRUMENTS, DERIVA_6
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, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Accumulated other comprehensive income (loss) balance at beginning of year | $ (3,314) | |||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | 9,121 | $ 8,726 | $ 7,912 | $ 7,866 |
Accumulated other comprehensive income (loss) balance at end of year | (3,380) | (3,314) | ||
Deferred, net after-tax gains on derivative instruments | 2 | |||
Continuing Operations | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Accumulated other comprehensive income (loss) balance at beginning of year | (153) | (41) | (1) | |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | 0 | 0 | (1) | |
(Loss) gain in fair value of derivatives during the year | 4 | (117) | (36) | |
Amount reclassified to earnings during the year | 23 | 5 | (3) | |
Accumulated other comprehensive income (loss) balance at end of year | $ (126) | $ (153) | $ (41) |
FINANCIAL INSTRUMENTS, DERIVA_7
FINANCIAL INSTRUMENTS, DERIVATIVES AND HEDGING ACTIVITIES - Classification and Fair Value Amounts of Derivative Instruments (Detail) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Derivatives, Fair Value [Line Items] | ||
Derivative asset, fair value | $ 8 | $ 11 |
Derivative liability, fair value | 5 | 19 |
Designated as Hedging Instrument | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset, fair value | 6 | 0 |
Derivative liability, fair value | 3 | 17 |
Designated as Hedging Instrument | Foreign exchange contracts | Prepaid expenses and other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset, fair value | 6 | 0 |
Designated as Hedging Instrument | Foreign exchange contracts | Accrued expenses and other current liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability, fair value | 3 | 17 |
Not Designated as Hedging Instrument | Foreign exchange contracts | Prepaid expenses and other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset, fair value | 2 | 11 |
Not Designated as Hedging Instrument | Foreign exchange contracts | Accrued expenses and other current liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability, fair value | $ 2 | $ 2 |
FINANCIAL INSTRUMENTS, DERIVA_8
FINANCIAL INSTRUMENTS, DERIVATIVES AND HEDGING ACTIVITIES - Derivative Positions Presented On Net Basis (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Derivative asset, fair value | $ 8 | $ 11 |
Gross amount subject to offset in master netting arrangements not offset in the consolidated balance sheet, asset | (2) | (6) |
Total, Asset | 6 | 5 |
Derivative liability, fair value | 5 | 19 |
Gross amount subject to offset in master netting arrangements not offset in the consolidated balance sheet, liability | (2) | (6) |
Total, Liability | $ 3 | $ 13 |
FINANCIAL INSTRUMENTS, DERIVA_9
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, 2021 | Dec. 31, 2020 |
Derivatives, Fair Value [Line Items] | ||
Carrying amount of hedged item | $ 101 | $ 102 |
Cumulative amount of fair value hedging adjustment included in the carrying amount of the hedged item | $ 4 | $ 5 |
FAIR VALUE MEASUREMENTS - Summa
FAIR VALUE MEASUREMENTS - Summary of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Foreign exchange contracts | $ 8 | $ 11 |
Debt securities | 30 | 13 |
Marketable equity securities | 10 | 17 |
Total assets | 48 | 41 |
Foreign exchange contracts | 5 | 19 |
Contingent payments related to acquisitions | 143 | 30 |
Total liabilities | 148 | 49 |
Quoted prices in active markets for identical assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Foreign exchange contracts | 0 | 0 |
Debt securities | 0 | 0 |
Marketable equity securities | 10 | 17 |
Total assets | 10 | 17 |
Foreign exchange contracts | 0 | 0 |
Contingent payments related to acquisitions | 0 | 0 |
Total liabilities | 0 | 0 |
Significant other observable inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Foreign exchange contracts | 8 | 11 |
Debt securities | 0 | 13 |
Marketable equity securities | 0 | 0 |
Total assets | 8 | 24 |
Foreign exchange contracts | 5 | 19 |
Contingent payments related to acquisitions | 0 | 0 |
Total liabilities | 5 | 19 |
Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Foreign exchange contracts | 0 | 0 |
Debt securities | 30 | 0 |
Marketable equity securities | 0 | 0 |
Total assets | 30 | 0 |
Foreign exchange contracts | 0 | 0 |
Contingent payments related to acquisitions | 143 | 30 |
Total liabilities | $ 143 | $ 30 |
FAIR VALUE MEASUREMENTS - Finan
FAIR VALUE MEASUREMENTS - Financial Instruments and Related Fair Value Measurements - Additional Information (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Financial Instruments and Fair Value [Line Items] | ||
Cash and cash equivalents | $ 2,951 | $ 3,730 |
Other Assets | ||
Financial Instruments and Fair Value [Line Items] | ||
Other equity investments without readily determinable fair values | 114 | 105 |
Fair Value, Inputs, Level 2 | ||
Financial Instruments and Fair Value [Line Items] | ||
Cash and cash equivalents | 3,000 | 3,700 |
Money market funds, at carrying value | $ 816 | $ 1,800 |
FAIR VALUE MEASUREMENTS - Recon
FAIR VALUE MEASUREMENTS - Reconciliation of Fair Value Measurements that Use Significant Unobservable Inputs (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||
Contingent payments, Fair value as of beginning of period | $ 30 | $ 39 |
Contingent payments, additions | 135 | 4 |
Contingent payments, change in fair value recognized in earnings | (6) | (2) |
Contingent payments, payments | (16) | (11) |
Contingent payments, Fair value as of end of period | $ 143 | $ 30 |
FAIR VALUE MEASUREMENTS - Book
FAIR VALUE MEASUREMENTS - Book Values and Fair Values of Financial Instruments (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Book values | ||
Fair Value And Carrying Value By Balance Sheet Grouping [Line Items] | ||
Short-term debt | $ 301 | $ 0 |
Current maturities of long-term debt and finance lease obligations | 210 | 406 |
Long-term debt and finance lease obligations | 17,149 | 5,786 |
Fair values | ||
Fair Value And Carrying Value By Balance Sheet Grouping [Line Items] | ||
Short-term debt | 301 | 0 |
Current maturities of long-term debt and finance lease obligations | 212 | 409 |
Long-term debt and finance lease obligations | $ 17,568 | $ 6,471 |
SEGMENT INFORMATION - Financial
SEGMENT INFORMATION - Financial Information of Segments (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021USD ($)u_baxGeographical | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | |
Segment Reporting Information [Line Items] | |||
Number geographical segments | u_baxGeographical | 4 | ||
Total net sales | $ 12,784 | $ 11,673 | $ 11,362 |
Total segment operating income | 1,710 | 1,616 | 1,772 |
Depreciation expense | 592 | 601 | 606 |
Capital expenditures | 709 | 724 | 686 |
Americas | |||
Segment Reporting Information [Line Items] | |||
Total net sales | 6,666 | 6,321 | 6,306 |
EMEA | |||
Segment Reporting Information [Line Items] | |||
Total net sales | 3,115 | 2,877 | 2,756 |
APAC | |||
Segment Reporting Information [Line Items] | |||
Total net sales | 2,791 | 2,475 | 2,300 |
Hillrom | |||
Segment Reporting Information [Line Items] | |||
Total net sales | 212 | 0 | 0 |
Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Total segment operating income | 3,787 | 3,503 | 3,575 |
Operating Segments | Americas | |||
Segment Reporting Information [Line Items] | |||
Total segment operating income | 2,612 | 2,389 | 2,499 |
Depreciation expense | 257 | 249 | 255 |
Capital expenditures | 394 | 380 | 325 |
Operating Segments | EMEA | |||
Segment Reporting Information [Line Items] | |||
Total segment operating income | 632 | 523 | 527 |
Depreciation expense | 147 | 150 | 149 |
Capital expenditures | 156 | 157 | 143 |
Operating Segments | APAC | |||
Segment Reporting Information [Line Items] | |||
Total segment operating income | 623 | 591 | 549 |
Depreciation expense | 98 | 94 | 85 |
Capital expenditures | 82 | 103 | 98 |
Operating Segments | Hillrom | |||
Segment Reporting Information [Line Items] | |||
Total segment operating income | (80) | 0 | 0 |
Depreciation expense | 4 | 0 | 0 |
Capital expenditures | 5 | 0 | 0 |
Corporate and other | |||
Segment Reporting Information [Line Items] | |||
Total segment operating income | (2,077) | (1,887) | (1,803) |
Depreciation expense | 86 | 108 | 117 |
Capital expenditures | $ 72 | $ 84 | $ 120 |
SEGMENT INFORMATION - Operating
SEGMENT INFORMATION - Operating Income to Income from Continuing Operations Reconciliation (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||
Operating Income (Loss) | $ 1,710 | $ 1,616 | $ 1,772 |
Net interest expense | 192 | 134 | 71 |
Other expense, net | 41 | 190 | 731 |
Income before income taxes | 1,477 | 1,292 | 970 |
Operating Segments | |||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||
Operating Income (Loss) | 3,787 | 3,503 | 3,575 |
Corporate and other | |||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||
Operating Income (Loss) | $ (2,077) | $ (1,887) | $ (1,803) |
SEGMENT INFORMATION - Geographi
SEGMENT INFORMATION - Geographic Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total net sales | $ 12,784 | $ 11,673 | $ 11,362 |
Total property, plant and equipment and operating lease right-of-use assets, net | 5,808 | 5,325 | |
United States | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total net sales | 5,180 | 4,878 | 4,826 |
Total property, plant and equipment and operating lease right-of-use assets, net | 2,337 | 1,888 | |
Latin America and Canada | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total net sales | 1,249 | 1,191 | 1,268 |
Total property, plant and equipment and operating lease right-of-use assets, net | 917 | 857 | |
EMEA | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total net sales | 3,552 | 3,129 | 2,968 |
Total property, plant and equipment and operating lease right-of-use assets, net | 1,576 | 1,556 | |
APAC | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total net sales | 2,803 | 2,475 | $ 2,300 |
Total property, plant and equipment and operating lease right-of-use assets, net | $ 978 | $ 1,024 |
Qualifying And Valuation Accoun
Qualifying And Valuation Accounts (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Allowance for doubtful accounts | |||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at beginning of period | $ 125 | $ 112 | $ 110 |
Additions Acquisition | 13 | 0 | 0 |
Additions Charged to costs and expenses | (2) | 11 | 12 |
(Credited) charged to other accounts | (9) | 6 | (2) |
Deductions | (5) | (4) | (8) |
Balance at end of period | 122 | 125 | 112 |
Deferred tax asset valuation allowance | |||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at beginning of period | 454 | 420 | 310 |
Additions Acquisition | 38 | 0 | 0 |
Additions Charged to costs and expenses | 37 | 77 | 117 |
(Credited) charged to other accounts | (30) | 26 | 0 |
Deductions | (98) | (69) | (7) |
Balance at end of period | $ 401 | $ 454 | $ 420 |