[July 26, 2017] |
|
Baxter Reports Second-Quarter 2017 Results and Provides Updated Financial Outlook for 2017 and 2020
Baxter International Inc. (NYSE:BAX) today reported results for the
second quarter of 2017 and increased its financial outlook for full-year
2017 and 2020.
"Our solid second quarter performance reflects continued execution of
our strategic objectives," said José (Joe) E. Almeida, chairman and
chief executive officer. "Baxter's focus on innovation and operational
excellence is fueling our mission to save and sustain lives, and deliver
improved performance for our patients, customers and shareholders. In
light of this progress and potential, we are raising our financial
outlook for both full-year 2017 and 2020."
Second-Quarter Financial Results
In the second quarter, worldwide sales totaled $2.6 billion, an increase
of 1 percent on a reported basis and 2 percent on a constant currency
basis as compared to the prior-year period. Operationally, Baxter's
sales rose 3 percent, adjusting for the impact of foreign exchange,
generic competition for U.S. cyclophosphamide and the previously
communicated select strategic product exits the company is undertaking.
Sales within the U.S. were $1.1 billion, advancing 4 percent.
International sales totaled approximately $1.5 billion, representing a 2
percent decrease on a reported basis and a 1 percent increase on a
constant currency basis. Baxter's operational sales increased 5 percent
in the U.S. and 2 percent internationally.
Global sales for Hospital Products totaled $1.6 billion in the second
quarter, increasing 1 percent on a reported basis, 2 percent on a
constant currency basis and 4 percent operationally as compared to the
prior-year period. Performance in the quarter benefited from continued
strength in our U.S. fluid systems business, favorable demand for
parenteral nutrition therapies and pre-mixed injectable pharmaceuticals,
as well as for select anesthesia and critical care products.
Baxter's Renal sales totaled $968 million, comparable to the prior year
on a reported basis and up 3 percent on both a constant currency basis
and operational basis. Growth in the quarter was driven by increased
sales for in-center hemodialysis (HD) products in the U.S.,
international acute renal care sales and global sales of peritoneal
dialysis (PD) therapies.
Baxter reported income from continuing operations of $264 million, or
$0.48 per diluted share, on a GAAP (Generally Accepted Accounting
Principles) basis for the second quarter. These results included special
items totaling $113 million ($84 million net after-tax), primarily
related to business optimization, intangible asset amortization and the
deconsolidation of the company's Venezuela business.
On an adjusted basis, excluding special items, Baxter's second quarter
income from continuing operations totaled $348 million, or $0.63 per
diluted share, exceeding the company's previously issued guidance of
$0.55 to $0.57 per diluted share.
Business Highlights
In support of its strategy to accelerate profitable growth and deliver
meaningful innovation for patients and healthcare professionals around
the world, Baxter has achieved a number of recent operational, pipeline
and commercial milestones.
-
Secured clearance from all regulatory authorities to complete the
company's proposed acquisition of Claris Injectables Limited, a global
generic injectables pharmaceutical company. The transaction
significantly broadens Baxter's presence in the generic
pharmaceuticals space and will help boost the supply of essential
medicines to Baxter customers. The company expects to close the
transaction by the end of July 2017.
-
Entered into an agreement
with Dorizoe Lifesciences Limited, a full-service global contract
research and development organization, that will facilitate
accelerated development of more than 20 generic injectable products.
-
Received U.S. Food and Drug Administration (FDA) approval of two new
premixed injectables - clindamycin injection in both saline and
dextrose presentations. Baxter is the first and only company to offer
a premixed
clindamycin injection in a saline presentation, which makes this
commonly prescribed antibiotic suitable for use with a wider patient
population.
-
Announced research and clinical development collaborations with
leading institutions -- Mayo
Clinic and Ramot
at Tel Aviv University/Tel Aviv Sourasky Medical Center -- to
transform patient care with new technologies and products across an
array of therapeutic areas, including renal care and surgical care,
respectively.
-
Achieved a regulatory milestone for our new
innovative, home PD technology with the receipt of guidance from
the FDA clarifying the regulatory pathway. The new system is designed
to produce sterile PD solutions using a small water filtration device
that would be placed in the patient's home and integrated with
Baxter's unique AMIA automated peritoneal dialysis (APD) system with
SHARESOURCE telehealth platform.
-
Launched a new version of the AK-98
HD system in select markets offering two-way IT connectivity and
capabilities to meet the needs of patients with lower weights. The
system can also be used to deliver HDx
enabled by THERANOVA, which was designed to work with all
hemodialysis machines. HDx enabled by the THERANOVA dialyzer extends
the range of molecules that can be filtered from the blood during
dialysis, resulting in a filtration profile that more closely mimics
the natural kidney.1
2017 Financial Outlook
For full-year 2017: Baxter is raising its financial outlook for the year
and now expects sales growth of approximately 3 percent on a reported
basis, approximately 4 percent on a constant currency basis, and
approximately 5 percent operationally. Earnings from continuing
operations, before special items, are expected to be $2.34 to $2.40 per
diluted share. This guidance assumes the closure of the company's
proposed acquisition of Claris Injectables, to be complete by the end of
July 2017.
For the third quarter: The company expects sales growth of approximately
4 percent on a reported basis, approximately 5 percent on a constant
currency basis and approximately 6 percent operationally. The company
expects earnings from continuing operations, before special items, of
$0.58 to $0.60 per diluted share.
Please see the schedules accompanying this press release for
reconciliations between the projected 2017 operational sales and
adjusted earnings per diluted share to the projected GAAP sales and
earnings per diluted share.
2020 Financial Outlook
As a result of the company's ongoing business transformation efforts
designed to accelerate performance, the company is increasing its 2020
financial outlook. Baxter expects sales to grow approximately 4 percent
on a compounded annual basis from 2016 to 20202 and now
anticipates an adjusted operating margin in 2020 of approximately 20
percent as compared to previous guidance of 17 to 18 percent. The
company anticipates 2020 adjusted diluted earnings of $3.25 to $3.40 per
share. Baxter also increased its cash flow expectations for 2020 and now
anticipates operating cash flow of approximately $2.65 billion. Capital
expenditures are expected to total $650 million in 2020, resulting in
free cash flow generation of approximately $2 billion, an increase of
$250 million versus prior guidance.
"Baxter's increased financial outlook and enhanced free cash flow
generation provide the flexibility to invest in the business both
organically and inorganically while also returning meaningful value to
shareholders through dividends and share repurchases," said Jay Saccaro,
executive vice president and chief financial officer. "The company is
well-positioned to execute on its aspiration of delivering sustainable
industry-leading performance."
The non-GAAP measures set forth above reflect the impact of several
known items. The reconciliation of adjusted operating margin for known
intangible asset amortization expense of approximately 1 percent results
in operating margin of approximately 19 percent in 2020. Additionally,
the reconciliation of adjusted diluted earnings per share for known
intangible asset amortization expense ($0.17 in 2020) results in diluted
earnings per share between $3.08 and $3.23, respectively.
A webcast of Baxter's second quarter conference call for investors can
be accessed live from a link on the company's website at www.baxter.com
beginning at 7:30 a.m. CDT on July 26, 2017. Please see www.baxter.com
for more information regarding this and future investor events and
webcasts.
About Baxter
Baxter provides a broad portfolio of essential renal and hospital
products, including home, acute and in-center dialysis; sterile IV
solutions; infusion systems and devices; parenteral nutrition; surgery
products and anesthetics; and pharmacy automation, software and
services. The company's global footprint and the critical nature of its
products and services play a key role in expanding access to healthcare
in emerging and developed countries. Baxter's employees worldwide are
building upon the company's rich heritage of medical breakthroughs to
advance the next generation of healthcare innovations that enable
patient care.
This release includes forward-looking statements concerning the
company's financial results, business development activities, capital
structure, cost savings initiatives, R&D pipeline including results of
clinical trials and planned product launches, and outlook for 2017 and
2020. The statements are based on assumptions about many important
factors, including the following, which could cause actual results to
differ materially from those in the forward-looking statements: demand
for and market acceptance of risks for new and existing products, and
the impact of those products on quality or patient safety concerns;
product development risks; product quality or patient safety concerns;
future actions of regulatory bodies and other governmental authorities,
including the FDA, the Department of Justice, the New York Attorney
General and foreign regulatory agencies; failures with respect to
compliance programs; future actions of third parties, including payers;
U.S. healthcare reform and other global austerity measures; pricing,
reimbursement, taxation and rebate policies of government agencies and
private payers; the impact of competitive products and pricing,
including generic competition, drug reimportation and disruptive
technologies; global, trade and tax policies; accurate identification of
and execution on business development and R&D opportunities and
realization of anticipated benefits (including the proposed acquisition
of Claris Injectables in July 2017); fluctuations in supply and demand;
the availability of acceptable raw materials and component supply; the
inability to create timely production capacity or other manufacturing
supply difficulties; the ability to achieve the intended results
associated with the separation of the biopharmaceutical and medical
products businesses; the ability to enforce owned or in-licensed patents
or the patents of third parties preventing or restricting manufacture,
sale or use of affected products or technology; the impact of global
economic conditions; fluctuations in foreign exchange and interest
rates; any change in law concerning the taxation of income, including
income earned outside the United States; actions taken by tax
authorities in connection with ongoing tax audits; breaches or failures
of the company's information technology systems; loss of key employees
or inability to identify and recruit new employees; the outcome of
pending or future litigation; the adequacy of the company's cash flows
from operations to meet its ongoing cash obligations and fund its
investment program; and other risks identified in Baxter's most recent
filing on Form 10-K and other Securities and Exchange Commission
filings, all of which are available on Baxter's website. Baxter does not
undertake to update its forward-looking statements.
1 Boschetti-de-Fierro A, et al. MCO Membranes: Enhanced
Selectivity in High-Flux Class. Scientific Reports (2015); 5:118448
|
2 Assumes constant currency foreign exchange rates from
2017 through 2020
|
BAXTER INTERNATIONAL INC.
|
Consolidated Statements of Income
|
Three Months Ended June 30, 2017 and 2016
|
(unaudited)
|
(in millions, except per share and percentage data)
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
June 30,
|
|
|
|
|
2017
|
|
2016
|
|
Change
|
|
|
|
|
|
|
|
NET SALES
|
|
$2,605
|
|
$2,585
|
|
1%
|
|
|
|
|
|
|
|
COST OF SALES
|
|
1,475
|
|
1,613
|
|
(9%)
|
|
|
|
|
|
|
|
GROSS MARGIN
|
|
1,130
|
|
972
|
|
16%
|
% of Net Sales
|
|
43.4%
|
|
37.6%
|
|
5.8 pts
|
|
|
|
|
|
|
|
MARKETING AND ADMINISTRATIVE EXPENSES
|
|
635
|
|
709
|
|
(10%)
|
% of Net Sales
|
|
24.4%
|
|
27.4%
|
|
(3 pts)
|
|
|
|
|
|
|
|
RESEARCH AND DEVELOPMENT EXPENSES
|
|
156
|
|
195
|
|
(20%)
|
% of Net Sales
|
|
6.0%
|
|
7.5%
|
|
(1.5 pts)
|
|
|
|
|
|
|
|
OPERATING INCOME
|
|
339
|
|
68
|
|
NM
|
% of Net Sales
|
|
13.0%
|
|
2.6%
|
|
10.4 pts
|
|
|
|
|
|
|
|
NET INTEREST EXPENSE
|
|
13
|
|
11
|
|
18%
|
|
|
|
|
|
|
|
OTHER EXPENSE (INCOME), NET
|
|
20
|
|
(1,161)
|
|
(102%)
|
|
|
|
|
|
|
|
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
|
|
306
|
|
1,218
|
|
(75%)
|
|
|
|
|
|
|
|
INCOME TAX EXPENSE
|
|
42
|
|
6
|
|
NM
|
% of Income from Continuing Operations before Income Taxes
|
|
13.7%
|
|
0.5%
|
|
13.2 pts
|
|
|
|
|
|
|
|
INCOME FROM CONTINUING OPERATIONS
|
|
264
|
|
1,212
|
|
(78%)
|
|
|
|
|
|
|
|
INCOME FROM DISCONTINUED OPERATIONS, NET OF TAX
|
|
1
|
|
-
|
|
NM
|
|
|
|
|
|
|
|
NET INCOME
|
|
$265
|
|
$1,212
|
|
(78%)
|
|
|
|
|
|
|
|
INCOME FROM CONTINUING OPERATIONS PER COMMON SHARE
|
|
|
|
|
|
|
Basic
|
|
$0.49
|
|
$2.21
|
|
(78%)
|
Diluted
|
|
$0.48
|
|
$2.19
|
|
(78%)
|
|
|
|
|
|
|
|
INCOME FROM DISCONTINUED OPERATIONS PER COMMON SHARE
|
|
|
|
|
|
|
Basic
|
|
$0.00
|
|
$0.00
|
|
NM
|
Diluted
|
|
$0.00
|
|
$0.00
|
|
NM
|
|
|
|
|
|
|
|
NET INCOME PER COMMON SHARE
|
|
|
|
|
|
|
Basic
|
|
$0.49
|
|
$2.21
|
|
(78%)
|
Diluted
|
|
$0.48
|
|
$2.19
|
|
(78%)
|
|
|
|
|
|
|
|
WEIGHTED-AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
|
|
|
|
|
|
|
Basic
|
|
544
|
|
548
|
|
|
Diluted
|
|
555
|
|
553
|
|
|
|
|
|
|
|
|
|
ADJUSTED OPERATING INCOME (excluding special items)
|
|
$419
|
A
|
$318
|
A
|
32%
|
ADJUSTED PRE-TAX INCOME FROM CONTINUING OPERATIONS (excluding
special items)
|
|
$419
|
A
|
$320
|
A
|
31%
|
ADJUSTED INCOME FROM CONTINUING OPERATIONS (excluding special
items)
|
|
$348
|
A
|
$256
|
A
|
36%
|
ADJUSTED DILUTED EPS FROM CONTINUING OPERATIONS (excluding
special items)
|
|
$0.63
|
A
|
$0.46
|
A
|
37%
|
|
|
|
|
|
|
|
A Refer to page 10 for a description of the
adjustments and a reconciliation to GAAP measures.
|
NM -Not Meaningful
|
BAXTER INTERNATIONAL INC.
|
Note to Consolidated Statements of Income
|
Three Months Ended June 30, 2017 and 2016
|
Description of Adjustments and Reconciliation of GAAP to Non-GAAP
Measures
|
(unaudited)
|
(in millions, except per share and percentage data)
|
|
The company's GAAP results for the three months ended June 30, 2017
and 2016 included special items which impacted the GAAP measures as
follows:
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
|
|
|
2017
|
|
2016
|
|
Change
|
Gross Margin
|
|
$1,130
|
|
$972
|
|
16%
|
Intangible asset amortization expense 1
|
|
36
|
|
42
|
|
|
Business optimization items 2
|
|
14
|
|
66
|
|
|
Intangible asset impairment 3
|
|
-
|
|
51
|
|
|
Baxalta separation-related costs 4
|
|
1
|
|
-
|
|
|
Product-related items 5
|
|
(4)
|
|
-
|
|
|
Adjusted Gross Margin
|
|
$1,177
|
|
$1,131
|
|
4%
|
% of Net Sales
|
|
45.2%
|
|
43.8%
|
|
1.4 pts
|
|
|
|
|
|
|
|
Marketing and Administrative Expenses
|
|
$635
|
|
$709
|
|
(10%)
|
Business optimization items 2
|
|
(20)
|
|
(28)
|
|
|
Baxalta separation-related costs 4
|
|
(7)
|
|
(18)
|
|
|
Claris acquisition and integration expenses 6
|
|
(5)
|
|
-
|
|
|
Adjusted Marketing and Administrative Expenses
|
|
$603
|
|
$663
|
|
(9%)
|
% of Net Sales
|
|
23.1%
|
|
25.6%
|
|
(2.5 pts)
|
|
|
|
|
|
|
|
Research and Development Expenses
|
|
$156
|
|
$195
|
|
(20%)
|
Business optimization items 2
|
|
(1)
|
|
(45)
|
|
|
Adjusted Research and Development Expenses
|
|
$155
|
|
$150
|
|
3%
|
% of Net Sales
|
|
6.0%
|
|
5.8%
|
|
0.2 pts
|
|
|
|
|
|
|
|
Operating Income
|
|
$339
|
|
$68
|
|
NM
|
Impact of special items
|
|
80
|
|
250
|
|
|
Adjusted Operating Income
|
|
$419
|
|
$318
|
|
32%
|
% of Net Sales
|
|
16.1%
|
|
12.3%
|
|
3.8 pts
|
|
|
|
|
|
|
|
Other Expense (Income), Net
|
|
$20
|
|
$(1,161)
|
|
(102%)
|
Net realized gains on Baxalta Retained Share transactions 7
|
|
-
|
|
1,148
|
|
|
Venezuela deconsolidation 8
|
|
(33)
|
|
-
|
|
|
Adjusted Other Income, Net
|
|
$(13)
|
|
$(13)
|
|
0%
|
|
|
|
|
|
|
|
Pre-Tax Income from Continuing Operations
|
|
$306
|
|
$1,218
|
|
(75%)
|
Impact of special items
|
|
113
|
|
(898)
|
|
|
Adjusted Pre-Tax Income from Continuing Operations
|
|
$419
|
|
$320
|
|
31%
|
|
|
|
|
|
|
|
Income Tax Expense
|
|
$42
|
|
$6
|
|
NM
|
Impact of special items
|
|
29
|
|
58
|
|
|
Adjusted Income Tax Expense
|
|
$71
|
|
$64
|
|
11%
|
% of Adjusted Pre-Tax Income from Continuing Operations
|
|
16.9%
|
|
20.0%
|
|
(3.1 pts)
|
|
|
|
|
|
|
|
Income from Continuing Operations
|
|
$264
|
|
$1,212
|
|
(78%)
|
Impact of special items
|
|
84
|
|
(956)
|
|
|
Adjusted Income from Continuing Operations
|
|
$348
|
|
$256
|
|
36%
|
|
|
|
|
|
|
|
Diluted EPS from Continuing Operations
|
|
$0.48
|
|
$2.19
|
|
(78%)
|
Impact of special items
|
|
0.15
|
|
(1.73)
|
|
|
Adjusted Diluted EPS from Continuing Operations
|
|
$0.63
|
|
$0.46
|
|
37%
|
|
|
|
|
|
|
|
WEIGHTED-AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
|
Diluted
|
|
555
|
|
553
|
|
|
1
|
|
The company's results in 2017 and 2016 included intangible asset
amortization expense of $36 million ($27 million, or $0.05 per
diluted share, on an after-tax basis) and $42 million ($32 million,
or $0.06 per diluted share, on an after-tax basis), respectively.
|
2
|
|
The company's results in 2017 included a charge of $35 million ($26
million, or $0.05 per diluted share, on an after-tax basis) related
to business optimization initiatives. This included a charge of $16
million related to restructuring activities, $16 million of costs to
implement business optimization programs which primarily included
external consulting and project employee costs, and $3 million of
accelerated depreciation associated with facilities to be closed.
The $16 million of restructuring charges included $7 million of
employee termination costs, $4 million of contract termination
costs, and $5 million of asset impairment charges primarily related
to facility closures.
|
|
|
The company's results in 2016 included a net charge of $139 million
($107 million, or $0.19 per diluted share, on an after-tax basis)
related to business optimization initiatives. This included a net
charge of $103 million related to restructuring activities, $15
million of costs to implement business optimization programs which
included external consulting and employee salary and related costs,
$14 million of accelerated depreciation associated with facilities
to be closed, and $7 million of Gambro integration costs. The $103
million of restructuring activities included $40 million of employee
termination costs, $58 million of costs related to the
discontinuance of the VIVIA home hemodialysis development program,
and $5 million of other exit costs.
|
3
|
|
The company's results in 2016 included a $51 million ($39 million,
or $0.07 per diluted share, on an after-tax basis) impairment
primarily related to developed technology.
|
4
|
|
The company's results in 2017 and 2016 included costs incurred
related to the Baxalta separation totaling $8 million ($6 million,
or $0.01 per diluted share, on an after-tax basis) and $18 million
($14 million, or $0.03 per diluted share, on an after-tax basis),
respectively.
|
5
|
|
The company's results in 2017 included a benefit of $4 million ($3
million, or $0.01 per diluted share, on an after-tax basis) related
to an adjustment to historical product reserves.
|
6
|
|
The company's results in 2017 included acquisition and integration
costs of $5 million ($4 million, or $0.01 per diluted share, on an
after-tax basis) related to the company's pending acquisition of
Claris Injectables Limited.
|
7
|
|
The company's results in 2016 included net realized gains of $1.1
billion ($1.1 billion, or $2.08 per diluted share, on an after-tax
basis), related to the exchange of the company's retained shares of
Baxalta for Baxter shares and the contribution of retained shares in
Baxalta to Baxter's U.S. pension fund.
|
8
|
|
The company's results in 2017 included a charge of $33 million ($24
million, or $0.04 per diluted share, on an after-tax basis) related
to the deconsolidation of its Venezuelan operations.
|
|
|
|
For more information on the company's use of non-GAAP financial
measures in this press release, please see the company's Current
Report on Form 8-K filed with the Securities and Exchange Commission
on the date of this press release.
|
NM - Not Meaningful
|
BAXTER INTERNATIONAL INC.
|
Consolidated Statements of Income
|
Six Months Ended June 30, 2017 and 2016
|
(unaudited)
|
(in millions, except per share and percentage data)
|
|
|
|
|
|
|
|
|
|
Six Months Ended
|
|
|
|
|
June 30,
|
|
|
|
|
2017
|
|
2016
|
|
Change
|
|
|
|
|
|
|
|
NET SALES
|
|
$5,080
|
|
$4,960
|
|
2%
|
|
|
|
|
|
|
|
COST OF SALES
|
|
2,908
|
|
3,023
|
|
(4%)
|
|
|
|
|
|
|
|
GROSS MARGIN
|
|
2,172
|
|
1,937
|
|
12%
|
% of Net Sales
|
|
42.8%
|
|
39.1%
|
|
3.7 pts
|
|
|
|
|
|
|
|
MARKETING AND ADMINISTRATIVE EXPENSES
|
|
1,205
|
|
1,350
|
|
(11%)
|
% of Net Sales
|
|
23.7%
|
|
27.2%
|
|
(3.5 pts)
|
|
|
|
|
|
|
|
RESEARCH AND DEVELOPMENT EXPENSES
|
|
284
|
|
331
|
|
(14%)
|
% of Net Sales
|
|
5.6%
|
|
6.7%
|
|
(1.1 pts)
|
|
|
|
|
|
|
|
OPERATING INCOME
|
|
683
|
|
256
|
|
167%
|
% of Net Sales
|
|
13.4%
|
|
5.2%
|
|
8.2 pts
|
|
|
|
|
|
|
|
NET INTEREST EXPENSE
|
|
27
|
|
39
|
|
(31%)
|
|
|
|
|
|
|
|
OTHER EXPENSE (INCOME), NET A
|
|
22
|
|
(4,330)
|
|
(101%)
|
|
|
|
|
|
|
|
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
|
|
634
|
|
4,547
|
|
(86%)
|
|
|
|
|
|
|
|
INCOME TAX EXPENSE (BENEFIT)
|
|
97
|
|
(52)
|
|
NM
|
% of Income from Continuing Operations before Income Taxes
|
|
15.3%
|
|
(1.1%)
|
|
16.4 pts
|
|
|
|
|
|
|
|
INCOME FROM CONTINUING OPERATIONS
|
|
537
|
|
4,599
|
|
(88%)
|
|
|
|
|
|
|
|
(LOSS) INCOME FROM DISCONTINUED OPERATIONS, NET OF TAX
|
|
-
|
|
(7)
|
|
(100%)
|
|
|
|
|
|
|
|
NET INCOME
|
|
$537
|
|
$4,592
|
|
(88%)
|
|
|
|
|
|
|
|
INCOME FROM CONTINUING OPERATIONS PER COMMON SHARE
|
|
|
|
|
|
|
Basic
|
|
$0.99
|
|
$8.39
|
|
(88%)
|
Diluted
|
|
$0.97
|
|
$8.33
|
|
(88%)
|
|
|
|
|
|
|
|
(LOSS) INCOME FROM DISCONTINUED OPERATIONS PER COMMON SHARE
|
|
|
|
|
|
|
Basic
|
|
$0.00
|
|
($0.01)
|
|
(100%)
|
Diluted
|
|
$0.00
|
|
($0.01)
|
|
(100%)
|
|
|
|
|
|
|
|
NET INCOME PER COMMON SHARE
|
|
|
|
|
|
|
Basic
|
|
$0.99
|
|
$8.38
|
|
(88%)
|
Diluted
|
|
$0.97
|
|
$8.32
|
|
(88%)
|
|
|
|
|
|
|
|
WEIGHTED-AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
|
|
|
|
|
|
|
Basic
|
|
542
|
|
548
|
|
|
Diluted
|
|
553
|
|
552
|
|
|
|
|
|
|
|
|
|
ADJUSTED OPERATING INCOME (excluding special items)
|
|
$825
|
B
|
$567
|
B
|
46%
|
ADJUSTED PRE-TAX INCOME FROM CONTINUING OPERATIONS (excluding
special items)
|
|
$809
|
B
|
$568
|
B
|
42%
|
ADJUSTED INCOME FROM CONTINUING OPERATIONS (excluding special
items)
|
|
$666
|
B
|
$455
|
B
|
46%
|
ADJUSTED DILUTED EPS FROM CONTINUING OPERATIONS (excluding
special items)
|
|
$1.20
|
B
|
$0.82
|
B
|
46%
|
A
|
|
Other Income, net for the period ended June 30, 2016 includes $4.4
billion net realized gains on the Baxalta retained shares
transactions and a $101 million net debt extinguishment loss.
|
B
|
|
Refer to page 12 for a description of the adjustments and a
reconciliation to GAAP measures.
|
NM - Not Meaningful
|
BAXTER INTERNATIONAL INC.
|
Note to Consolidated Statements of Income
|
Six Months Ended June 30, 2017 and 2016
|
Description of Adjustments and Reconciliation of GAAP to Non-GAAP
Measures
|
(unaudited)
|
(in millions, except per share and percentage data)
|
|
The company's GAAP results for the six months ended June 30, 2017
and 2016 included special items which impacted the GAAP measures as
follows:
|
|
|
|
|
|
Six Months Ended
June 30,
|
|
|
|
|
2017
|
|
2016
|
|
Change
|
Gross Margin
|
|
$2,172
|
|
$1,937
|
|
12%
|
Intangible asset amortization expense 1
|
|
74
|
|
82
|
|
|
Business optimization items 2
|
|
30
|
|
78
|
|
|
Intangible asset impairment 3
|
|
-
|
|
51
|
|
|
Baxalta separation-related costs 4
|
|
1
|
|
-
|
|
|
Product-related items 5
|
|
(4)
|
|
(12)
|
|
|
Adjusted Gross Margin
|
|
$2,273
|
|
$2,136
|
|
6%
|
% of Net Sales
|
|
44.7%
|
|
43.1%
|
|
1.6 pts
|
|
|
|
|
|
|
|
Marketing and Administrative Expenses
|
|
$1,205
|
|
$1,350
|
|
(11%)
|
Business optimization items 2
|
|
(35)
|
|
(31)
|
|
|
Baxalta separation-related costs 4
|
|
(14)
|
|
(36)
|
|
|
Historical rebate and discount adjustments 6
|
|
12
|
|
-
|
|
|
Claris acquisition and integration expenses 7
|
|
(5)
|
|
-
|
|
|
Adjusted Marketing and Administrative Expenses
|
|
$1,163
|
|
$1,283
|
|
(9%)
|
% of Net Sales
|
|
22.9%
|
|
25.9%
|
|
(3 pts)
|
|
|
|
|
|
|
|
Research and Development Expenses
|
|
$284
|
|
$331
|
|
(14%)
|
Business optimization items 2
|
|
1
|
|
(45)
|
|
|
Adjusted Research and Development Expenses
|
|
$285
|
|
$286
|
|
0%
|
% of Net Sales
|
|
5.6%
|
|
5.8%
|
|
(0.2 pts)
|
|
|
|
|
|
|
|
Operating Income
|
|
$683
|
|
$256
|
|
167%
|
Impact of special items
|
|
142
|
|
311
|
|
|
Adjusted Operating Income
|
|
$825
|
|
$567
|
|
46%
|
% of Net Sales
|
|
16.2%
|
|
11.4%
|
|
4.8 pts
|
|
|
|
|
|
|
|
Other Expense (Income), Net
|
|
$22
|
|
$(4,330)
|
|
(101%)
|
Net realized gains on Baxalta Retained Shares transactions 8
|
|
-
|
|
4,391
|
|
|
Loss on debt extinguishment 9
|
|
-
|
|
(101)
|
|
|
Venezuelan deconsolidation 10
|
|
(33)
|
|
-
|
|
|
Adjusted Other Income, Net
|
|
$(11)
|
|
$(40)
|
|
(73%)
|
|
|
|
|
|
|
|
Pre-Tax Income from Continuing Operations
|
|
$634
|
|
$4,547
|
|
(86%)
|
Impact of special items
|
|
175
|
|
(3,979)
|
|
|
Adjusted Pre-Tax Income from Continuing Operations
|
|
$809
|
|
$568
|
|
42%
|
|
|
|
|
|
|
|
Income Tax Expense (Benefit)
|
|
$97
|
|
$(52)
|
|
NM
|
Impact of special items
|
|
46
|
|
165
|
|
|
Adjusted Income Tax Expense
|
|
$143
|
|
$113
|
|
27%
|
% of Adjusted Pre-Tax Income from Continuing Operations
|
|
17.7%
|
|
19.9%
|
|
(2.2 pts)
|
|
|
|
|
|
|
|
Income from Continuing Operations
|
|
$537
|
|
$4,599
|
|
(88%)
|
Impact of special items
|
|
129
|
|
(4,144)
|
|
|
Adjusted Income from Continuing Operations
|
|
$666
|
|
$455
|
|
46%
|
|
|
|
|
|
|
|
Diluted EPS from Continuing Operations
|
|
$0.97
|
|
$8.33
|
|
(88%)
|
Impact of special items
|
|
0.23
|
|
(7.51)
|
|
|
Adjusted Diluted EPS from Continuing Operations
|
|
$1.20
|
|
$0.82
|
|
46%
|
|
|
|
|
|
|
|
WEIGHTED-AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
|
Diluted
|
|
553
|
|
552
|
|
|
1
|
The company's results in 2017 and 2016 included intangible asset
amortization expense of $74 million ($55 million, or $0.10 per
diluted share, on an after-tax basis) and $82 million ($62 million,
or $0.11 per diluted share, on an after-tax basis), respectively.
|
2
|
The company's results in 2017 included a net charge of $64 million
($47 million, or $0.08 per diluted share, on an after-tax basis)
related to business optimization initiatives. This included a net
charge of $19 million related to restructuring activities, $37
million of costs to implement business optimization programs which
primarily included external consulting and project employee costs,
and $8 million of accelerated depreciation associated with
facilities to be closed. The $19 million of net restructuring
charges included $9 million of employee termination costs, $5
million of contract termination costs, and $5 million of asset
impairment charges primarily related to facility closures.
|
|
The company's results in 2016 included a net charge of $154 million
($117 million, or $0.21 per diluted share, on an after-tax basis)
related to business optimization initiatives. This included a net
charge of $107 million related to restructuring activities, $19
million of costs to implement business optimization programs which
included external consulting and employee salary and related costs,
$14 million of accelerated depreciation associated with facilities
to be closed, and $14 million of Gambro integration costs. The $107
million of restructuring activities included $44 million of employee
termination costs, $58 million of costs related to the
discontinuance of the VIVIA home hemodialysis development program,
and $5 million of other exit costs.
|
3
|
The company's results in 2016 included a $51 million ($39 million,
or $0.07 per diluted share, on an after-tax basis) impairment
primarily related to developed technology.
|
4
|
The company's results in 2017 and 2016 included costs incurred
related to the Baxalta separation totaling $15 million ($11 million,
or $0.02 per diluted share, on an after-tax basis) and $36 million
($27 million, or $0.05 per diluted share, on an after-tax basis),
respectively.
|
5
|
The company's results in 2017 include a benefit of $4 million ($3
million, or $0.01 per diluted share, on an after-tax basis) related
to an adjustment to historical product reserves. The company's
results in 2016 included benefits related to adjustments to the
SIGMA SPECTRUM infusion pump reserves of $12 million ($9 million, or
$0.02 per diluted share, on an after-tax basis).
|
6
|
The company's results in 2017 included a benefit of $12 million ($9
million, or $0.02 per diluted share, on an after-tax basis) related
to an adjustment to the company's historical rebates and discount
reserves.
|
7
|
The company's results in 2017 included acquisition and integration
costs of $5 million ($4 million, or $0.01 per diluted share, on an
after-tax basis) related to the company's pending acquisition of
Claris Injectables Limited.
|
8
|
The company's results in 2016 included net realized gains of $4.4
billion ($4.4 billion, or $8.05 per diluted share, on an after-tax
basis), related to the debt-for-equity exchanges of the company's
retained shares in Baxalta for certain indebtedness, the exchange of
the company's retained shares of Baxalta for Baxter shares and the
contribution of retained shares in Baxalta to Baxter's U.S. pension
fund. A tax benefit of $54 million was recognized as a result of the
Retained Shares transactions.
|
9
|
The company's results in 2016 included a net debt extinguishment
loss totaling $101 million ($65 million, or $0.12 per diluted share,
on an after-tax basis) related to the March 2016 debt-for-equity
exchange for certain company indebtedness in a Retained Shares
transaction.
|
10
|
The company's results in 2017 included a charge of $33 million ($24
million, or $0.05 per diluted share, on an after-tax basis) related
to the deconsolidation of its Venezuelan operations.
|
|
|
For more information on the company's use of non-GAAP financial
measures in this press release, please see the company's Current
Report on Form 8-K filed with the Securities and Exchange Commission
on the date of this press release.
|
NM - Not Meaningful
|
BAXTER INTERNATIONAL INC.
|
|
Net Sales
|
|
Periods Ending June 30, 2017 and 2016
|
|
(unaudited)
|
|
($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q2
|
|
Q2
|
|
% Growth @
|
|
% Growth @
|
|
|
|
|
|
YTD
|
|
YTD
|
|
% Growth @
|
|
% Growth @
|
|
|
|
|
|
|
|
2017
|
|
2016
|
|
Actual Rates
|
|
Constant Rates
|
|
|
|
|
|
2017
|
|
2016
|
|
Actual Rates
|
|
Constant Rates
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Renal
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United States
|
|
|
|
|
|
$225
|
|
$210
|
|
7%
|
|
7%
|
|
|
|
|
|
$441
|
|
$411
|
|
7%
|
|
7%
|
|
International
|
|
|
|
|
|
743
|
|
755
|
|
(2%)
|
|
1%
|
|
|
|
|
|
1,423
|
|
1,452
|
|
(2%)
|
|
0%
|
|
Total Renal
|
|
|
|
|
|
$968
|
|
$965
|
|
0%
|
|
3%
|
|
|
|
|
|
$1,864
|
|
$1,863
|
|
0%
|
|
2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hospital Products
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United States
|
|
|
|
|
|
$906
|
|
$873
|
|
4%
|
|
4%
|
|
|
|
|
|
$1,793
|
|
$1,664
|
|
8%
|
|
8%
|
|
International
|
|
|
|
|
|
731
|
|
747
|
|
(2%)
|
|
1%
|
|
|
|
|
|
1,423
|
|
1,433
|
|
(1%)
|
|
1%
|
|
Total Hospital Products
|
|
|
|
|
|
$1,637
|
|
$1,620
|
|
1%
|
|
2%
|
|
|
|
|
|
$3,216
|
|
$3,097
|
|
4%
|
|
5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Baxter International Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United States
|
|
|
|
|
|
$1,131
|
|
$1,083
|
|
4%
|
|
4%
|
|
|
|
|
|
$2,234
|
|
$2,075
|
|
8%
|
|
8%
|
|
International
|
|
|
|
|
|
1,474
|
|
1,502
|
|
(2%)
|
|
1%
|
|
|
|
|
|
2,846
|
|
2,885
|
|
(1%)
|
|
1%
|
|
Total Baxter
|
|
|
|
|
|
$2,605
|
|
$2,585
|
|
1%
|
|
2%
|
|
|
|
|
|
$5,080
|
|
$4,960
|
|
2%
|
|
4%
|
|
BAXTER INTERNATIONAL INC.
|
|
Sales by Franchise
|
|
Periods Ending June 30, 2017 and 2016
|
|
(unaudited)
|
|
($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q2
|
|
Q2
|
|
% Growth @
|
|
% Growth @
|
|
YTD
|
|
YTD
|
|
% Growth @
|
|
% Growth @
|
|
|
|
|
|
|
|
2017
|
|
2016
|
|
Actual Rates
|
|
Constant Rates
|
|
2017
|
|
2016
|
|
Actual Rates
|
|
Constant Rates
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Renal 1
|
|
|
|
|
|
$968
|
|
$965
|
|
0%
|
|
3%
|
|
$1,864
|
|
$1,863
|
|
0%
|
|
2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hospital Products
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fluid Systems 2
|
|
|
|
|
|
$607
|
|
$586
|
|
4%
|
|
5%
|
|
$1,192
|
|
$1,110
|
|
7%
|
|
8%
|
|
Integrated Pharmacy Solutions 3
|
|
|
|
|
|
568
|
|
563
|
|
1%
|
|
3%
|
|
1,120
|
|
1,119
|
|
0%
|
|
1%
|
|
Surgical Care 4
|
|
|
|
|
|
352
|
|
347
|
|
1%
|
|
2%
|
|
686
|
|
652
|
|
5%
|
|
6%
|
|
Other 5
|
|
|
|
|
|
110
|
|
124
|
|
(11%)
|
|
(10%)
|
|
218
|
|
216
|
|
1%
|
|
2%
|
|
Total Hospital Products
|
|
|
|
|
|
$1,637
|
|
$1,620
|
|
1%
|
|
2%
|
|
$3,216
|
|
$3,097
|
|
4%
|
|
5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Baxter
|
|
|
|
|
|
$2,605
|
|
$2,585
|
|
1%
|
|
2%
|
|
$5,080
|
|
$4,960
|
|
2%
|
|
4%
|
|
1
|
|
Includes sales of the company's peritoneal dialysis, hemodialysis
and continuous renal replacement therapies.
|
2
|
|
Includes sales of the company's IV therapies, infusion pumps and
administration sets.
|
3
|
|
Includes sales of the company's premixed and oncology drug
platforms, nutrition products and pharmacy compounding services.
|
4
|
|
Includes sales of the company's inhaled anesthesia products as well
as biological products and medical devices used in surgical
procedures for hemostasis, tissue sealing and adhesion prevention.
|
5
|
|
Includes sales primarily from the company's pharmaceutical
partnering business.
|
BAXTER INTERNATIONAL INC.
|
Franchise Sales by U.S. and International
|
Three-Month Periods Ending June 30, 2017 and 2016
|
(unaudited)
|
($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q2 2017
|
|
|
|
|
|
Q2 2016
|
|
|
|
|
|
% Growth
|
|
|
|
|
|
|
U.S.
|
|
International
|
|
Total
|
|
|
|
|
|
U.S.
|
|
International
|
|
Total
|
|
|
|
|
|
U.S.
|
|
International
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Renal
|
|
|
|
|
|
$225
|
|
$743
|
|
$968
|
|
|
|
|
|
$210
|
|
$755
|
|
$965
|
|
|
|
|
|
7%
|
|
(2%)
|
|
0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hospital Products
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fluid Systems
|
|
|
|
|
|
$365
|
|
$242
|
|
$607
|
|
|
|
|
|
$329
|
|
$257
|
|
$586
|
|
|
|
|
|
11%
|
|
(6%)
|
|
4%
|
Integrated Pharmacy Solutions
|
|
|
|
|
|
275
|
|
293
|
|
568
|
|
|
|
|
|
261
|
|
302
|
|
563
|
|
|
|
|
|
5%
|
|
(3%)
|
|
1%
|
Surgical Care
|
|
|
|
|
|
204
|
|
148
|
|
352
|
|
|
|
|
|
200
|
|
147
|
|
347
|
|
|
|
|
|
2%
|
|
1%
|
|
1%
|
Other
|
|
|
|
|
|
62
|
|
48
|
|
110
|
|
|
|
|
|
83
|
|
41
|
|
124
|
|
|
|
|
|
(25%)
|
|
17%
|
|
(11%)
|
Total Hospital Products
|
|
|
|
|
|
$906
|
|
$731
|
|
$1,637
|
|
|
|
|
|
$873
|
|
$747
|
|
$1,620
|
|
|
|
|
|
4%
|
|
(2%)
|
|
1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Baxter
|
|
|
|
|
|
$1,131
|
|
$1,474
|
|
$2,605
|
|
|
|
|
|
$1,083
|
|
$1,502
|
|
$2,585
|
|
|
|
|
|
4%
|
|
(2%)
|
|
1%
|
BAXTER INTERNATIONAL INC.
|
Franchise Sales by U.S. and International
|
Periods Ending June 30, 2017 and 2016
|
(unaudited)
|
($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD 2017
|
|
|
|
|
|
YTD 2016
|
|
|
|
|
|
% Growth
|
|
|
|
|
|
|
U.S.
|
|
International
|
|
Total
|
|
|
|
|
|
U.S.
|
|
International
|
|
Total
|
|
|
|
|
|
U.S.
|
|
International
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Renal
|
|
|
|
|
|
$441
|
|
$1,423
|
|
$1,864
|
|
|
|
|
|
$411
|
|
$1,452
|
|
$1,863
|
|
|
|
|
|
7%
|
|
(2%)
|
|
0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hospital Products
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fluid Systems
|
|
|
|
|
|
$724
|
|
$468
|
|
$1,192
|
|
|
|
|
|
$627
|
|
$483
|
|
$1,110
|
|
|
|
|
|
15%
|
|
(3%)
|
|
7%
|
Integrated Pharmacy Solutions
|
|
|
|
|
|
541
|
|
579
|
|
1,120
|
|
|
|
|
|
525
|
|
594
|
|
1,119
|
|
|
|
|
|
3%
|
|
(3%)
|
|
0%
|
Surgical Care
|
|
|
|
|
|
406
|
|
280
|
|
686
|
|
|
|
|
|
381
|
|
271
|
|
652
|
|
|
|
|
|
7%
|
|
3%
|
|
5%
|
Other
|
|
|
|
|
|
122
|
|
96
|
|
218
|
|
|
|
|
|
131
|
|
85
|
|
216
|
|
|
|
|
|
(7%)
|
|
13%
|
|
1%
|
Total Hospital Products
|
|
|
|
|
|
$1,793
|
|
$1,423
|
|
$3,216
|
|
|
|
|
|
$1,664
|
|
$1,433
|
|
$3,097
|
|
|
|
|
|
8%
|
|
(1%)
|
|
4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Baxter
|
|
|
|
|
|
$2,234
|
|
$2,846
|
|
$5,080
|
|
|
|
|
|
$2,075
|
|
$2,885
|
|
$4,960
|
|
|
|
|
|
8%
|
|
(1%)
|
|
2%
|
BAXTER INTERNATIONAL INC.
|
Free Cash Flow Reconciliation
|
(unaudited)
|
($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
|
|
|
|
|
|
|
June 30,
|
|
|
|
|
|
|
2017
|
|
2016
|
Cash flows from operations - continuing operations
|
|
|
|
|
|
$767
|
|
$401
|
Capital expenditures
|
|
|
|
|
|
(279)
|
|
(352)
|
Free cash flow - continuing operations
|
|
|
|
|
|
$488
|
|
$49
|
BAXTER INTERNATIONAL INC.
|
|
Reconciliation of Non-GAAP Financial Measure
|
|
Change in Net Sales As Reported to Operational Sales
|
|
From The Three and Six Months Ended June 30, 2016 to The Three
and Six Months Ended June 30, 2017
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q2 2017
|
|
|
|
|
|
|
|
Net sales
|
|
US
|
|
Product
|
|
|
|
|
|
|
Operational
|
|
|
|
|
|
|
|
As Reported
|
|
Cyclophosphamide
|
|
Exits
|
|
|
|
|
FX
|
|
Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Renal
|
|
|
|
|
|
0%
|
|
0%
|
|
0%
|
|
|
|
|
3%
|
|
3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hospital Products
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fluid Systems
|
|
|
|
|
|
4%
|
|
0%
|
|
1%
|
|
|
|
|
1%
|
|
6%
|
|
Integrated Pharmacy Solutions
|
|
|
|
|
|
1%
|
|
1%
|
|
0%
|
|
|
|
|
2%
|
|
4%
|
|
Surgical Care
|
|
|
|
|
|
1%
|
|
0%
|
|
1%
|
|
|
|
|
1%
|
|
3%
|
|
Other
|
|
|
|
|
|
(11%)
|
|
0%
|
|
0%
|
|
|
|
|
1%
|
|
(10%)
|
|
Total Hospital Products
|
|
|
|
|
|
1%
|
|
1%
|
|
1%
|
|
|
|
|
1%
|
|
4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Baxter International Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United States
|
|
|
|
|
|
4%
|
|
1%
|
|
0%
|
|
|
|
|
0%
|
|
5%
|
|
International
|
|
|
|
|
|
(2%)
|
|
0%
|
|
1%
|
|
|
|
|
3%
|
|
2%
|
|
Total Baxter
|
|
|
|
|
|
1%
|
|
0%
|
|
1%
|
|
|
|
|
1%
|
|
3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD 2017
|
|
|
|
|
|
|
|
Net sales
|
|
US
|
|
Product
|
|
|
|
|
|
|
Operational
|
|
|
|
|
|
|
|
As Reported
|
|
Cyclophosphamide
|
|
Exits
|
|
|
|
|
FX
|
|
Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Renal
|
|
|
|
|
|
0%
|
|
0%
|
|
1%
|
|
|
|
|
2%
|
|
3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hospital Products
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fluid Systems
|
|
|
|
|
|
7%
|
|
0%
|
|
1%
|
|
|
|
|
1%
|
|
9%
|
|
Integrated Pharmacy Solutions
|
|
|
|
|
|
0%
|
|
2%
|
|
1%
|
|
|
|
|
1%
|
|
4%
|
|
Surgical Care
|
|
|
|
|
|
5%
|
|
0%
|
|
1%
|
|
|
|
|
1%
|
|
7%
|
|
Other
|
|
|
|
|
|
1%
|
|
0%
|
|
0%
|
|
|
|
|
1%
|
|
2%
|
|
Total Hospital Products
|
|
|
|
|
|
4%
|
|
0%
|
|
1%
|
|
|
|
|
1%
|
|
6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Baxter International Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United States
|
|
|
|
|
|
8%
|
|
1%
|
|
0%
|
|
|
|
|
0%
|
|
9%
|
|
International
|
|
|
|
|
|
(1%)
|
|
0%
|
|
1%
|
|
|
|
|
2%
|
|
2%
|
|
Total Baxter
|
|
|
|
|
|
2%
|
|
0%
|
|
1%
|
|
|
|
|
2%
|
|
5%
|
|
BAXTER INTERNATIONAL INC.
|
|
Reconciliation of Non-GAAP Financial Measures
|
|
Projected 2017 Adjusted Earnings Per Share and Projected GAAP
Earnings Per Share, and
|
|
Projected 2017 Adjusted Sales Growth and Projected GAAP Sales
Growth
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2017 Earnings Per Share Guidance
|
|
|
|
|
|
Q3 2017
|
|
|
|
|
|
FY 2017
|
|
Earnings per Diluted Share - Adjusted
|
|
|
|
|
|
$0.58 - $0.60
|
|
|
|
|
|
$2.34 - $2.40
|
|
Estimated intangible asset amortization
|
|
|
|
|
|
$0.05
|
|
|
|
|
|
$0.19
|
|
Estimated business optimization charges
|
|
|
|
|
|
$0.06 - $0.07
|
|
|
|
|
|
$0.19 - $0.23
|
|
Estimated Baxalta separation-related expenses
|
|
|
|
|
|
-
|
|
|
|
|
|
$0.02
|
|
Historical rebate and discount adjustments
|
|
|
|
|
|
-
|
|
|
|
|
|
($0.01)
|
|
Product-related items
|
|
|
|
|
|
-
|
|
|
|
|
|
($0.01)
|
|
Venezuela deconsolidation
|
|
|
|
|
|
-
|
|
|
|
|
|
$0.04
|
|
Claris acquisition and integration expenses
|
|
|
|
|
|
$0.02
|
|
|
|
|
|
$0.03
|
|
Earnings per Diluted Share - GAAP
|
|
|
|
|
|
$0.44 - $0.47
|
|
|
|
|
|
$1.85 - $1.95
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2017 Sales Growth Guidance
|
|
|
|
|
|
Q3 2017
|
|
|
|
|
|
FY 2017
|
|
Sales Growth - Adjusted
|
|
|
|
|
|
6%
|
|
|
|
|
|
5%
|
|
U.S. cyclophosphamide
|
|
|
|
|
|
(1%)
|
|
|
|
|
|
(1%)
|
|
Strategic product exits
|
|
|
|
|
|
(1%)
|
|
|
|
|
|
(1%)
|
|
Claris acquisition
|
|
|
|
|
|
1%
|
|
|
|
|
|
1%
|
|
Foreign exchange
|
|
|
|
|
|
(1%)
|
|
|
|
|
|
(1%)
|
|
Sales Growth - GAAP
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4%
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3%
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View source version on businesswire.com: http://www.businesswire.com/news/home/20170726005576/en/
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