4 unchanged sentences
Baxter International Inc.
−Removed: is a global medical technology with approximately 60,000 employees worldwide who are engaged in the development, manufacture and sale of a broad range of products, digital health solutions and therapies used by hospitals, kidney dialysis centers, nursing homes, rehabilitation centers, ambulatory surgery centers, doctors’ offices and patients at home under physician supervision.
−Removed: Our global footprint and the critical nature of our products and services, which are sold in over 100 countries as of December 31, 2023, play a key role in expanding access to healthcare in emerging and developed countries.
+Added: is a global medical technology with approximately 38,000 employees worldwide who are engaged in the development, manufacture and sale of a broad range of products, digital health solutions and therapies used by hospitals, nursing homes, rehabilitation centers, ambulatory surgery centers, doctors’ offices and patients at home under physician supervision.
+Added: Our global footprint and the critical nature of our products and services, which are sold in over 100 countries as of December 31, 2024, after giving effect to the Kidney Care sale, play a key role in expanding access to healthcare in emerging and developed countries.
In mid-2022, our Board of Directors authorized a strategic review of our business portfolio, with the goal of increasing stockholder value.
As part of that review process, we identified and evaluated a range of potential strategic actions, including opportunities for sales and other separation transactions.
−Removed: In January 2023, following the completion of that review, we announced the following planned strategic actions that are intended to enhance our operational effectiveness, accelerate innovation and drive additional stockholder value:
−Removed: (a) a proposed spinoff of our Kidney Care business into an independent publicly traded company focused on kidney care and organ support (the proposed spinoff), (b) our development of a new operating model to simplify our operations and better align our manufacturing and supply chain to our commercial activities and (c) our pursuit of strategic alternatives for our BioPharma Solutions (BPS) business.
−Removed: Proposed Separation of Kidney Care Business
−Removed: We are working to complete the proposed separation of our Kidney Care business in the interest of establishing an independent company focused on kidney care and organ support.
−Removed: While we continue to evaluate all strategic options in the interest of maximizing stockholder value, we continue to progress towards our current target of July 2024 for completion of the proposed spinoff of this business.
−Removed: In both 2023 and 2022 we generated $4.45 billion of combined net sales from our Kidney Care segment, representing approximately 30% and 31%, respectively, of our consolidated net sales.
−Removed: We intend for the proposed spinoff to qualify as tax-free to Baxter and our stockholders for U.S.
−Removed: federal income tax purposes.
−Removed: The proposed spinoff is subject to the satisfaction of customary conditions, including final approval from our Board of Directors, the filing and effectiveness of a registration statement on Form 10, receipt of an Internal Revenue Service (IRS) ruling or related tax opinions from counsel, satisfactory completion of financing arrangements, consultations with works councils and other employee representative bodies and any necessary regulatory approvals.
−Removed: We incurred $225 million of pre-tax costs related to the proposed spin-off during 2023 and we expect to continue to incur significant separation-related costs in 2024.
−Removed: Additionally, we expect to incur dis-synergies following our completion of the proposed spinoff transaction due to the reduced size of our company and, as a result, we will need to undertake actions to ensure that our cost structure is appropriate to support our remaining businesses.
−Removed: There can be no guarantees that the proposed spinoff will be completed in the manner or over the timeframes described above, or at all.
+Added: In January 2023, following the completion of that review, we announced a number of planned strategic actions, as discussed below, which are intended to enhance our operational effectiveness, accelerate innovation and drive additional stockholder value.
+Added: We completed the last of these strategic actions on January 31, 2025 in connection with the sale of our Kidney Care business.
+Added: Sale of Kidney Care Business
+Added: On August 12, 2024, we entered into an Equity Purchase Agreement (EPA ) with certain affiliates of Carlyle Group Inc.
+Added: (Carlyle) to sell our Kidney Care business, which will be known as Vantive.
+Added: That business, which is comprised of our Kidney Care segment, provides chronic and acute dialysis therapies and services, including peritoneal dialysis, hemodialysis, continuous renal replacement therapies, and other organ support therapies.
+Added: On January 31, 2025, we completed the sale of our Kidney Care business to Carlyle for an aggregate purchase price of $3.80 billion in cash, subject to certain closing cash, working capital and debt adjustments.
+Added: After giving effect to certain adjustments, we received approximately $3.71 billion pre-tax cash proceeds at closing of the transaction with the net after tax proceeds currently estimated to be approximately $3.4 billion, subject to certain post-closing adjustments.
+Added: As of February 21, 2025, we repaid $3.13 billion of short- and long-term indebtedness primarily with the net after-tax cash proceeds from the sale of our Kidney Care business, and we expect to use substantially all of the remaining net after-tax proceeds to continue to repay indebtedness through the second quarter of 2025.
+Added: We determined that our Kidney Care business met the criteria to be classified as held-for-sale in August 2024, and we also concluded that it met the conditions to be reported as a discontinued operation at that time.
+Added: Accordingly, our Kidney Care business is reported in discontinued operations in the accompanying consolidated financial systems, and our prior period results have been adjusted to reflect discontinued operations presentation.
+Added: The fair value and carrying value of assets held for sale are evaluated each period and a loss on sale is recognized when the fair value less costs to sell are below the carrying value.
+Added: There has been no loss on sale recognized for the period ending December 31, 2024.
+Added: We will recognize a gain or loss upon disposition of the business depending on the carrying value at that date, including any tax impacts of the sale, which may be material.
+Added: We expect to incur dis-synergies following our sale of our Kidney Care business due to the reduced size of our company and, as a result, we have begun to undertake certain actions (and will need to undertake additional actions) to ensure that our cost structure is appropriate to support our remaining businesses.
+Added: See Notes 2 and 6 in Item 8 of this Annual Report on Form 10-K for additional information.
Implementation of New Operating Model and Resulting Segment Change
−Removed: Our reportable segments were previously comprised of the following geographic segments related to our legacy Baxter business:
−Removed: Americas (North and South America), EMEA (Europe, Middle East and Africa) and APAC (Asia Pacific), and a global segment for our Hillrom business.
−Removed: As discussed below under “Recent Strategic Actions,” in the third quarter of 2023, we completed the implementation of a new operating model intended to simplify and streamline our operations and better align our manufacturing and supply chain to our commercial activities.
−Removed: Under this new operating model, our business is comprised of four segments:
−Removed: Medical Products and Therapies, Healthcare Systems and Technologies (formerly referred to as our Hillrom segment), Pharmaceuticals and Kidney Care (which would become an independent publicly traded company following the completion of the proposed spinoff transaction).
−Removed: Our segment reporting was changed during the third quarter of 2023 to align with our new operating model and prior period segment disclosures have been revised to reflect the new segments.
−Removed: The Medical Products and Therapies segment includes sales of our sterile IV solutions, infusion systems, administration sets, parenteral nutrition therapies and surgical hemostat, sealant and adhesion prevention products.
−Removed: The Healthcare Systems and Technologies segment includes sales of our connected care solutions and
−Removed: collaboration tools, including smart bed systems, patient monitoring systems and diagnostic technologies, respiratory health devices and advanced equipment for the surgical space, including surgical video technologies, precision positioning devices and other accessories.
−Removed: The Pharmaceuticals segment includes sales of specialty injectable pharmaceuticals, inhaled anesthesia and drug compounding.
−Removed: The Kidney Care segment includes sales of chronic and acute dialysis therapies and services, including peritoneal dialysis (PD), hemodialysis (HD), continuous renal replacement therapies (CRRT) and other organ support therapies.
+Added: In the third quarter of 2023, we completed the implementation of a new operating model intended to simplify and streamline our operations and better align our manufacturing and supply chain to our commercial activities.
+Added: Under this operating model, our business is currently comprised of three reportable segments:
+Added: Medical Products & Therapies, Healthcare Systems & Technologies, and Pharmaceuticals.
+Added: Our segments were changed during the third quarter of 2023 to align with our new operating model.
+Added: The Medical Products & Therapies segment includes sales of our sterile IV solutions, infusion systems, administration sets, parenteral nutrition therapies and surgical hemostat, sealant and adhesion prevention products.
+Added: The Healthcare Systems & Technologies segment includes sales of our connected care solutions and collaboration tools, including smart bed systems, patient monitoring systems and diagnostic technologies, respiratory health
+Added: devices and advanced equipment for the surgical space, including surgical video technologies, precision positioning devices and other accessories.
+Added: The Pharmaceuticals segment includes sales of specialty injectable pharmaceuticals, inhaled anesthetics and drug compounding services.
Other sales not allocated to a segment primarily include sales of products and services provided directly through certain of our manufacturing facilities and royalty income under a business development arrangement that ended in early 2023 when we acquired the related product rights.
2 unchanged sentences
On September 29, 2023, we completed the sale of our BPS business and received cash proceeds of $3.96 billion from that transaction.
−Removed: The financial position, results of operations and cash flows of our BPS business, including the $2.88 billion pre-tax gain ($2.59 billion net of tax) from the sale of that business and the related cash proceeds received, are reported as discontinued operations in the accompanying consolidated financial statements.
−Removed: We intend to use substantially all of the after-tax proceeds from this transaction to repay certain of our debt obligations, including $514 million of commercial paper borrowings and $2.28 billion of long-term debt that we repaid during the fourth quarter of 2023.
−Removed: See Note 2 in Item 8 of this Annual Report on Form 10-K for additional information.
+Added: The results of operations and cash flows of our BPS business, including the $2.88 billion pre-tax gain ($2.59 billion net of tax) from the sale of that business and the related cash proceeds received, are reported as discontinued operations in the accompanying consolidated financial statements.
+Added: We used substantially all of the after-tax proceeds from this transaction to repay certain of our debt obligations, including $514 million of commercial paper borrowings and $2.28 billion of long-term debt that we repaid during the fourth quarter of 2023, as well as €750 million of senior notes that we repaid during the second quarter of 2024.
+Added: See Notes 2 and 6 in Item 8 of this Annual Report on Form 10-K for additional information.
Financial Results
3 unchanged sentences
Refer to the Net Sales discussion in the Results of Operations section below for more information related to changes in net sales on a constant currency basis.
−Removed: Net income (loss) attributable to Baxter stockholders totaled $2.66 billion, or $5.25 per diluted share, in 2023.
−Removed: Net income (loss) attributable to Baxter stockholders in 2023 included special items which increased net income by $1.18 billion, or $2.33 per diluted share.
+Added: Net income (loss) attributable to Baxter stockholders totaled $(649) million, or $(1.27) per diluted share, in 2024.
+Added: Net income (loss) attributable to Baxter stockholders in 2024 included special items which adversely impacted net income (loss) by $2.13 billion, or $4.17 per diluted share.
See our special items subsection, in the Results of Operations section below, for information about special items for all periods present.
2 unchanged sentences
Our financial results included research and development (R&D) expenses totaling $590 million in 2024, which reflects our focus on balancing investments to support our new product pipeline with efforts to optimize overall R&D spending (including with respect to the maintenance of our portfolio).
−Removed: While we continue to face continuing global macroeconomic challenges, our financial position remains strong, with operating cash flows from continuing operations totaling $1.70 billion in 2023.
+Added: While have faced and may continue to face operational and global macroeconomic challenges, our financial position remains strong, with operating cash flows from continuing operations totaling $819 million in 2024.
We have continued to execute on our disciplined capital allocation framework, as discussed in the "Business Strategy" section in Item 1.
Business of this Annual Report on Form 10-K, which is designed to optimize stockholder value creation through reinvestment in our businesses, dividends and share repurchases, as well as acquisitions and other business development initiatives and debt repayments, consistent with our previously stated commitment to achieve our net leverage targets.
−Removed: Capital expenditures totaled $692 million in 2023 as we continue to invest across our businesses to support future growth, including additional investments in support of new and existing product capacity expansions.
+Added: Capital expenditures totaled $446 million in 2024 as we continued to invest across our businesses to support future growth, including additional investments in support of new and existing product capacity expansions.
Our investments in capital expenditures in 2024 were focused on projects that improve production efficiency, enhance our quality systems and optimize manufacturing capabilities to support our business growth.
1 unchanged sentence
During 2024, we paid cash dividends to our stockholders totaling $590 million.
−Removed: During 2024, we expect to continue to incur significant separation-related costs related to the proposed spinoff, which may adversely impact our earnings and operating cash flows.
FACTORS AFFECTING OUR RESULTS OF OPERATIONS
+Added: Hurricane Helene
+Added: In September 2024, Hurricane Helene, which brought significant rain and extensive flooding to Western North Carolina, caused damage to certain of our assets at our North Cove facility in Marion, N.C.
+Added: and disrupted operations at that facility.
+Added: As we work to fully remediate the facility, we currently expect to incur an estimated $50 million of charges in the first quarter of 2025 primarily consisting of remediation costs, air freight (as we transfer product across our global network in the interest of increasing the availability of intravenous solutions for our customers) and other charges.
+Added: See Note 1 for further discussion of insurance recoveries related to Hurricane Helene.
Supply Constraints and Global Economic Conditions
−Removed: We have experienced significant challenges to our global supply chain in recent periods, including production delays and interruptions, increased costs and shortages of raw materials and component parts (including resins and electromechanical devices) and higher transportation costs, resulting from the pandemic and other exogenous factors including significant weather events, elevated inflation levels, increased interest rates, disruptions to certain ports of call and access to shipping ports around the world, the war in Ukraine, the conflict in the Middle East (including recent attacks on merchant ships in the Red Sea), tensions between China and Taiwan and other geopolitical events.
−Removed: Due to the nature of our products, which include dense consumable medical products such as IV fluids, and the geographic locations of our manufacturing facilities, which often require us to transport our products long distances, we may be more susceptible to increases in freight costs and other supply chain challenges than certain of our industry peers.
−Removed: While we have seen some improvements in the availability of certain component parts and improved pricing in certain raw materials, these challenges have not completely subsided and may continue to have a negative impact on our supply chain in future periods.
−Removed: These challenges, including the unavailability of certain raw materials and component parts, have also had a negative impact on our sales for certain product categories (including those acquired in our December 2021 acquisition of Hill-Rom Holdings, Inc.
−Removed: (Hillrom)) due to our inability to fully satisfy demand and may continue to have a negative impact on our sales in the future.
+Added: In recent years, we have experienced significant challenges to our global supply chain, including production delays and interruptions, increased costs and shortages of raw materials and component parts (including resins and electromechanical devices), higher transportation costs, adverse impacts from significant weather events (including Hurricane Helene and the flooding of our North Cove facility), elevated inflation levels and interest rates, disruptions to certain ports of call and access to shipping ports around the world, the war in Ukraine, the conflict in the Middle East, and other geopolitical events.
+Added: While we have seen improvements in the availability of component parts and improved pricing in raw materials and on transportation costs, some of these challenges (including certain of those set forth above as we work to fully remediate our North Cove facility) are expected to have a negative impact on our results of operations in the future.
Our results of operations are also affected by macroeconomic conditions and levels of business confidence.
−Removed: The war in Ukraine, the conflict in the Middle East (including recent attacks on merchant ships in the Red Sea), tensions between China and Taiwan and the sanctions and other measures being imposed in response to these conflicts (and the potential for escalation of these conflicts) have increased the levels of economic and political uncertainty and we continue to closely monitor the developing situations.
−Removed: With respect to the war in Ukraine and our business in Russia, we have substantially completed our wind down efforts related to our business in Russia in a manner that we structured to be compliant with all applicable U.S.
−Removed: and European Union sanctions and regulations.
−Removed: While these countries do not constitute a material portion of our business, a significant escalation or expansion of economic disruption or the current scope of these conflicts could have an adverse effect on our business in the region.
−Removed: Our global operations expose us to risks associated with public health crises and epidemics/pandemics.
−Removed: COVID-19 had, and it or any other future public health crisis could in the future have an adverse impact on, among other things, our expenses, operations, supply chains and distribution systems.
−Removed: Over the course of the COVID-19 pandemic, our business was impacted by shifting healthcare priorities and significant volatility in the demand for our products, and any resurgence of the pandemic or any new public health crisis could again impact healthcare priorities and cause volatility in the demand for our products.
−Removed: The existence of high inflation rates in the United States and in many of the countries where we conduct business has resulted in, and may continue to result in, higher interest rates, shipping costs, labor costs and other costs and expenses.
−Removed: Additionally, adverse changes in foreign currency exchange rates have increased our costs of sourcing certain raw materials in some jurisdictions.
−Removed: We have experienced and may continue to experience inflationary increases in manufacturing costs and operating expenses, and we may not be able to pass these cost increases on to our customers in a timely manner or at all, which could have a material adverse impact on our profitability and results of operations.
+Added: The war in Ukraine, the conflict in the Middle East, other geopolitical events, the sanctions and other measures being imposed in response to these conflicts (and the potential for escalation of these conflicts), recently imposed or future quotas, duties or tariffs and any retaliatory counter measures, and recent political changes to trade policies, have increased the levels of economic and political uncertainty and we continue to closely monitor the developing situations.
+Added: While we have substantially completed our wind down efforts related to our business in Russia, a significant escalation or expansion of economic disruption or the current scope of the war in Ukraine could have an adverse effect on our operations (including our supply chain) in the region.
+Added: The existence of high inflation rates in the United States and in many of the countries where we conduct business has resulted in, and may in the future result in, higher interest rates, shipping costs, labor costs, and other costs and expenses.
+Added: Additionally, adverse changes in foreign currency exchange rates have increased, and could continue to increase, our costs of sourcing certain raw materials in some jurisdictions.
+Added: We have experienced and may in the future experience inflationary increases in manufacturing costs and operating expenses and we may not be able to pass these cost increases on to our customers in a timely manner or at all, which could have a material adverse impact on our profitability and results of operations.
Inflation and general macroeconomic factors have caused certain of our customers to reduce or delay orders for our products and services and could cause them to do so in the future, which could have a material adverse impact on our sales and results of operations.
As a medical products company, our operations and many of the products manufactured or sold by us are subject to extensive regulation by numerous government agencies, both within and outside the United States.
−Removed: These regulations, as described in "Government Regulation" in Item 1.
−Removed: Business of this Annual Report on Form 10-K, require that we obtain specific approval from the Food and Drug Administration (FDA) and non-U.S.
+Added: These regulations (as described in Item 1, Government Regulation, of this Annual Report on Form 10-K) require that we obtain specific approval from FDA or applicable non-U.S.
regulatory authorities before we can market and sell most of our products in a particular country.
−Removed: Failure to obtain or maintain those approvals or clearances could have a material adverse impact on our business (including with respect to our ability to compete in the product markets in which we currently operate).
−Removed: Furthermore, FDA in the United States, the European Medicines Agency (EMA) in Europe, the China Food and Drug Administration (CFDA) in China and other
−Removed: government agencies, inside and outside of the United States, administer requirements covering the testing, safety, effectiveness, manufacturing, labeling, promotion and advertising, distribution and post-market surveillance of our products.
+Added: Failure to obtain or maintain those approvals or clearances (including temporary importation authorizations) could have a material adverse impact on our business (including with respect to our ability to compete in the product markets in which we currently operate).
+Added: Furthermore, FDA in the United States, the EMA and MHRA in Europe, the NMPA in China, and other government agencies, inside and outside of the United States, administer requirements covering the testing, safety, effectiveness, manufacturing, labeling, promotion and advertising, pricing, distribution, and post-market surveillance of our products.
Our failure to comply with these requirements may subject us to various actions, including warning letters, product recalls or seizures, monetary sanctions, injunctions to halt the manufacture and distribution of products, civil or criminal sanctions, refusal of a government to grant approvals or licenses, restrictions on operations or withdrawal of existing approvals and licenses, and may have a material adverse impact on our results of operations.
8 unchanged sentences
Refer to Note 3 in Item 8 of this Annual Report on Form 10-K for additional information regarding our acquisition of the rights to Zosyn.
−Removed: On December 13, 2021, we completed our acquisition of all outstanding equity interests of Hillrom for a purchase price of $10.48 billion.
−Removed: Including the assumption of Hillrom's outstanding debt obligations, the enterprise value of the transaction was $12.84 billion.
−Removed: 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.
−Removed: 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.
−Removed: In 2023 and 2022 our Healthcare Systems and Technologies segment (formerly our Hillrom segment) generated net sales of $3.01 billion and $2.94 billion, respectively.
+Added: In 2021, we acquired Hillrom.
+Added: In 2024, 2023 and 2022 our Healthcare Systems & Technologies segment (formerly referred to as our Hillrom segment) generated net sales of $2.95 billion, $3.01 billion, and $2.94 billion, respectively.
+Added: During 2024, we recorded a $425 million goodwill impairment related to our Front Line Care reporting unit within our Healthcare Systems & Technologies segment.
During 2022, we also recognized $2.81 billion of goodwill impairments and $332 million of indefinite-lived intangible asset impairments related to goodwill and trade name intangible assets that arose from the Hillrom acquisition.
−Removed: See Notes 3, 5, 6 and 18 in Item 8 of this Annual Report on Form 10-K for additional information about the Hillrom acquisition, goodwill and intangible asset impairments, Hillrom acquisition financing arrangements and our Healthcare Systems and Technologies segment results, respectively.
−Removed: On July 29, 2021, we acquired certain assets related to PerClot Polysaccharide Hemostatic System (PerClot), including distribution rights for the U.S.
−Removed: and specified territories outside of the U.S., from CryoLife, Inc.
−Removed: 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.
−Removed: 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.
−Removed: Refer to Note 3 in Item 8 of this Annual Report on Form 10-K for additional information regarding the acquisition of PerClot.
−Removed: Transderm Scop
−Removed: On March 31, 2021, we acquired the rights to Transderm Scop (TDS) for the U.S.
−Removed: and specified territories outside of the U.S.
−Removed: 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.
−Removed: We previously sold this product under a distribution license to the U.S.
−Removed: institutional market.
−Removed: TDS is indicated for post-operative nausea and vomiting in the U.S.
−Removed: and motion sickness in European markets.
−Removed: Refer to Note 3 in Item 8 of this Annual Report on Form 10-K for additional information regarding the acquisition of TDS.
−Removed: Caelyx and Doxil
−Removed: 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 $325 million in cash.
−Removed: We previously acquired the U.S.
−Removed: rights to this product in 2019.
−Removed: Liposomal doxorubicin is a chemotherapy medicine used to treat various types of cancer.
−Removed: Refer to Note 3 in Item 8 of this Annual Report on Form 10-K for additional information regarding the acquisition of Caelyx and Doxil.
+Added: See Notes 3, 5 and 18 in Item 8 of this Annual Report on Form 10-K for additional information about the Hillrom acquisition, goodwill and intangible asset impairments, and our Healthcare Systems & Technologies segment results, respectively.
NON-GAAP FINANCIAL MEASURES
19 unchanged sentences
See the section entitled “Non-GAAP Financial Measures” for additional information about our use of that measure.
−Removed: Foreign currency adversely impacted net sales by 1 percentage point during the year ended December 31, 2023, as compared to the prior year period, primarily due to the strengthening of the U.S.
−Removed: Dollar relative to the Turkish Lira, Chinese Renminbi, Australian Dollar, Japanese Yen and the Canadian Dollar, partially offset by the weakening of the U.S.
−Removed: Dollar relative to the Euro and Mexican Peso.
−Removed: Our acquisition of Hillrom in December 2021 favorably impacted net sales by 23 percentage points for the year ended December 31, 2022, as compared to the prior year period.
−Removed: Foreign currency adversely impacted net sales by 5 percentage points during the year ended December 31, 2022, as compared to the prior year period, primarily due to the strengthening of the U.S.
−Removed: Dollar relative to the Euro, British Pound, Turkish Lira, Australian Dollar, Japanese Yen and Chinese Renminbi.
+Added: As set forth above, foreign currency had no material impact on net sales during the year ended December 31, 2024, as compared to the prior year period, primarily due to the strengthening of the U.S.
+Added: Dollar relative to the Turkish Lira, Japanese Yen, Brazilian Real, Mexican Peso, and the Canadian Dollar, offset by the weakening of the U.S.
+Added: Dollar relative to the British Pound and Colombian Peso.
+Added: Foreign currency had no material impact on net sales during the year ended December 31, 2023, as compared to the prior year period, primarily due to the strengthening of the U.S.
+Added: Dollar relative to the Euro, Turkish Lira, Australian Dollar, Japanese Yen and Chinese Renminbi offset by the weakening of the U.S.
+Added: Dollar relative to the Mexican Peso and Brazilian Real.
NET SALES BY SEGMENT
−Removed: Medical Products and Therapies
−Removed: Our Medical Products and Therapies segment includes sales of our sterile IV solutions, infusion systems, administration sets, parenteral nutrition therapies and surgical hemostat, sealant and adhesion prevention products.
+Added: Medical Products & Therapies
+Added: Our Medical Products & Therapies segment includes sales of our sterile IV solutions, infusion systems, administration sets, parenteral nutrition therapies and surgical hemostat, sealant and adhesion prevention products.
Percent change
2 unchanged sentences
currency rates 1
−Removed: Infusion Therapies and Technologies
+Added: Infusion Therapies & Technologies
$ 4,103 $ 3,960 4 % 4 %
Advanced Surgery 1,104 1,051 5 % 6 %
−Removed: Total Medical Product and Therapies net sales $ 5,011 $ 4,815 4 % 4 %
+Added: Total Medical Product & Therapies net sales $ 5,207 $ 5,011 4 % 5 %
1 Percent change in net sales at constant currency rates is a non-GAAP financial measure.
See the section entitled “Non-GAAP Financial Measures” for additional information about our use of that measure.
−Removed: Medical Product and Therapies segment net sales increased 4% for the year ended December 31, 2023, as compared to the prior year period.
−Removed: Infusion Therapies and Technologies net sales increased 4% for the year ended December 31, 2023, as compared to the prior year period.
−Removed: Sales performance in 2023 reflected strong demand for our infusion systems and administration sets, as well as growth in IV solutions and international nutrition compounding, partially offset by lower sales of parenteral nutrition products in the U.S.
−Removed: as compared with the prior year period.
−Removed: Advanced Surgery net sales increased 5% for the year ended December 31, 2023, as compared to the prior year period, driven by continued recovery in surgical procedures, partially offset by temporary supply constraints, the exit of a product distribution arrangement and a comparison against prior year periods that benefited from competitor supply constraints.
+Added: Medical Product & Therapies segment net sales increased 4% for the year ended December 31, 2024, as compared to the prior year period.
+Added: Infusion Therapies & Technologies net sales increased 4% for the year ended December 31, 2024, as compared to the prior year period.
+Added: Sales performance in 2024 primarily reflected growth in Infusion Systems as a result of sales of our Novum IQ large volume infusion and syringe pump in the U.S., and sales of Nutrition product offerings, which was attributable to both pricing initiatives and increased sales volume.
+Added: In September 2024, Hurricane Helene, which brought significant rain and extensive flooding to Western North Carolina, caused damage to certain of our assets at our North Cove facility in Marion, N.C.
+Added: and disrupted operations at that facility.
+Added: This facility, which manufactures IV Solutions primarily for the U.S.
+Added: market, was not fully operational for most of the fourth quarter.
+Added: As a consequence, Hurricane Helene had an estimated $110 million adverse impact on sales, which offset price and underlying volume gains during the year.
+Added: Advanced Surgery net sales increased 5% for the year ended December 31, 2024, as compared to the prior year period, driven by growth in hemostats and sealants and was primarily attributable to increased sales volume.
Foreign currency exchange rates adversely impacted net sales by 1% for the year ended December 31, 2024, as compared to the prior year period.
3 unchanged sentences
currency rates 1
−Removed: Infusion Therapies and Technologies
+Added: Infusion Therapies & Technologies
$ 3,960 $ 3,817 4 % 4 %
Advanced Surgery 1,051 998 5 % 6 %
−Removed: Total Medical Product and Therapies net sales $ 4,815 $ 4,821 (0) % 4 %
+Added: Total Medical Product & Therapies net sales $ 5,011 $ 4,815 4 % 4 %
1 Percent change in net sales at constant currency rates is a non-GAAP financial measure.
See the section entitled “Non-GAAP Financial Measures” for additional information about our use of that measure.
−Removed: Medical Product and Therapies segment net sales remained flat for the year ended December 31, 2022, as compared to the prior year period.
−Removed: Infusion Therapies and Technologies net sales decreased 1% for the year ended December 31, 2022, as compared to the prior year period.
−Removed: Sales performance in 2022 reflected lower sales of infusion pumps, sales headwinds in China driven by COVID-related lockdowns and lower sales of vitamins resulting from ongoing supply constraints.
−Removed: Supply chain constraints, including constraints related to the availability of semiconductor components and other components used in the production of our infusion pumps, adversely impacted sales of infusion pumps.
−Removed: Those items were offset by increased demand for IV administration sets and solutions, reflecting a recovery in hospital administration rates and surgical procedures and lower growth in the U.S.
−Removed: for our parenteral nutrition therapies and related products, including multi-chamber bags.
−Removed: Foreign currency exchange rates adversely impacted net sales by 4% for the year ended December 31, 2022, as compared to the prior year period.
−Removed: Advanced Surgery net sales increased 2% for the year ended December 31, 2022, as compared to the prior year period, driven by a continued recovery in surgical procedures, particularly in Europe, and benefits from competitor supply constraints.
+Added: Medical Product & Therapies segment net sales increased 4% for the year ended December 31, 2023, as compared to the prior year period.
+Added: Infusion Therapies & Technologies net sales increased 4% for the year ended December 31, 2023, as compared to the prior year period.
+Added: Sales performance in 2023 reflected strong demand for our infusion systems and
+Added: administration sets, as well as growth in IV solutions and international nutrition compounding, partially offset by lower sales of parenteral nutrition products in the U.S.
+Added: as compared to the prior year.
+Added: Advanced Surgery net sales increased 5% for the year ended December 31, 2023, as compared to the prior year period, driven by continued recovery in surgical procedures, partially offset by temporary supply constraints, the exit of a product distribution arrangement and a comparison against prior year periods that benefited from competitor supply constraints.
Foreign currency exchange rates adversely impacted net sales by 1% for the year ended December 31, 2023, as compared to the prior year period.
−Removed: Healthcare Systems and Technologies
−Removed: Our Healthcare Systems and Technologies segment includes sales of our connected care solutions and collaboration tools, including smart bed systems, patient monitoring systems and diagnostic technologies, respiratory health devices and advanced equipment for the surgical space, including surgical video technologies, precision positioning devices and other accessories.
+Added: Healthcare Systems & Technologies
+Added: Our Healthcare Systems & Technologies segment includes sales of our connected care solutions and collaboration tools, including smart bed systems, patient monitoring systems and diagnostic technologies, respiratory health devices and advanced equipment for the surgical space, including surgical video technologies, precision positioning devices and other accessories.
Percent change
4 unchanged sentences
Front Line Care 1,137 1,213 (6) % (6) %
−Removed: Total Healthcare Systems and Technologies net sales
+Added: Total Healthcare Systems & Technologies net sales
$ 2,951 $ 3,013 (2) % (2) %
−Removed: 1 Sales growth at constant currency rates is a non-GAAP financial measure.
−Removed: See the section entitled “Non-GAAP Financial Measures” for further information.
−Removed: Healthcare Systems and Technologies segment net sales increased 3% for the year ended December 31, 2023, as compared to the prior year period.
−Removed: Care and Connectivity Solutions net sales increased 1% for the year ended December 31, 2023, as compared to the prior year period, driven by international demand and sales generated from recent product launches in the U.S., partially offset by lower rental revenues and lower capital spending in the U.S.
−Removed: reflecting the macroeconomic environment in 2023.
−Removed: Front Line Care net sales increased 6% for the year ended December 31, 2023, as compared to the prior year period, primarily driven by increased demand for our cardiology products, patient monitoring systems and physical assessment tools.
−Removed: Performance in the current year benefited from backlog reductions due to improved availability of component parts used in certain of our products.
+Added: 1 Percent change in net sales at constant currency rates is a non-GAAP financial measure.
+Added: See the section entitled “Non-GAAP Financial Measures” for additional information about our use of that measure.
+Added: Healthcare Systems & Technologies segment net sales decreased 2% for the year ended December 31, 2024, as compared to the prior year period.
+Added: Care and Connectivity Solutions net sales increased 1% for the year ended December 31, 2024, driven by increased order volume associated with capital spending in the U.S.
+Added: as compared to the prior year, partially offset by declines in care communication products driven by the shifting of installations to future periods and lower sales outside of the U.S.
+Added: Front Line Care net sales decreased 6% for the year ended December 31, 2024, as compared to the prior year period, primarily driven by a backlog reduction in the prior year period which increased sales in the prior year, reduced demand in the primary care market, lower government orders, certain product exits and select supply constraints impacting product availability.
+Added: These declines were partially offset by growth in our cardiology products.
Percent change
2 unchanged sentences
currency rates 1
−Removed: Care and Connectivity Solutions $ 1,791 $ 142 NM NM
−Removed: Front Line Care 1,148 70 NM NM
−Removed: Total Healthcare Systems and Technologies net sales $ 2,939 $ 212 NM NM
+Added: Care and Connectivity Solutions $ 1,800 $ 1,791 1 % 1 %
+Added: Front Line Care 1,213 1,148 6 % 6 %
+Added: Total Healthcare Systems & Technologies net sales $ 3,013 $ 2,939 3 % 3 %
1 Percent change in net sales at constant currency rates is a non-GAAP financial measure.
See the section entitled “Non-GAAP Financial Measures” for additional information about our use of that measure.
−Removed: NM - Not Meaningful
−Removed: The Healthcare Systems and Technologies segment was added in connection with our acquisition of Hillrom in December 2021.
−Removed: Net sales for the year ended December 31, 2022 were adversely impacted by supply chain constraints, particularly related to components used in our Front Line Care product offerings, hospital budget constraints and delays in product installations for Care and Connectivity Solutions resulting from limitations on hospital access due, in part, to staffing challenges experienced by those customers.
−Removed: The net sales amounts for 2021 reflect sales over the 18-day period from the Hillrom acquisition date through year-end.
+Added: Healthcare Systems & Technologies segment net sales increased 3% for the year ended December 31, 2023, as compared to the prior year period.
+Added: Care and Connectivity Solutions net sales increased 1% for the year ended December 31, 2023, as compared to the prior year period, driven by international demand and sales generated from recent product launches in the U.S., partially offset by lower rental revenues and lower capital spending in the U.S.
+Added: reflecting the macroeconomic environment in 2023.
+Added: Front Line Care net sales increased 6% for the year ended December 31, 2023, as compared to the prior year period, primarily driven by increased demand for our cardiology products, patient monitoring systems and physical assessment tools.
+Added: Performance in the current year benefited from backlog reductions due to improved availability of component parts used in certain of our products.
Pharmaceuticals
−Removed: Our Pharmaceuticals segment includes sales of specialty injectable pharmaceuticals, inhaled anesthesia and drug compounding.
+Added: Our Pharmaceuticals segment includes sales of specialty injectable pharmaceuticals, inhaled anesthetics and drug compounding services.
Percent change
10 unchanged sentences
Injectables and Anesthesia net sales increased 2% for the year ended December 31, 2024, as compared to the prior year period, primarily due to growth in our U.S.
−Removed: injectable products, driven by our launches of Zosyn, following the transfer of the related product rights to us in April 2023, Bendamustine and Norepinephrine, partially offset by lower sales of inhaled anesthesia products.
−Removed: Foreign currency exchange rates adversely impacted net sales by 1% for the year ended December 31, 2023, as compared to the prior year period.
−Removed: Drug Compounding net sales increased 10% for the year ended December 31, 2023, as compared to the prior year period, driven by increased demand for our international pharmacy compounding services.
+Added: specialty injectable products, driven by strong sales volume in our core portfolio and recent product launches, partially offset by declines for inhaled anesthetics.
Foreign currency exchange rates adversely impacted net sales by 1% for the year ended December 31, 2024, as compared to the prior year period.
+Added: Drug Compounding net sales increased 15% for the year ended December 31, 2024, as compared to the prior year period, driven by increased demand for our international pharmacy compounding offerings, due in part, to customer capacity constraints that resulted in increased outsourcing of compounding activities.
Percent change
7 unchanged sentences
See the section entitled “Non-GAAP Financial Measures” for additional information about our use of that measure.
−Removed: Pharmaceuticals segment net sales decreased 7% for the year ended December 31, 2022, as compared to the prior year period.
−Removed: Injectables and Anesthesia net sales decreased 6% for the year ended December 31, 2022, as compared to the prior year period, primarily due to a 4% negative impact from foreign exchange rate changes as compared to the prior year period.
−Removed: Net sales were also adversely impacted by increased competition from new market entrants and supply constraints impacting the production of certain molecules.
−Removed: Those items were partially offset by increased international sales of inhaled anesthesia products.
−Removed: Drug Compounding net sales decreased 9% for the year ended December 31, 2022, as compared to the prior year period, primarily driven by a 9% negative impact from foreign exchange rate changes.
−Removed: Our Kidney Care segment includes sales of products used in PD, HD, CRRT and other organ support therapies (OSTs).
−Removed: Percent change
−Removed: years ended December 31 (in millions) 2023 2022 At actual
−Removed: currency rates At constant
−Removed: currency rates 1
−Removed: Chronic Therapies $ 3,683 $ 3,714 (1) % 0 %
−Removed: Acute Therapies 770 735 5 % 6 %
−Removed: Total Kidney Care net sales
−Removed: $ 4,453 $ 4,449 0 % 1 %
−Removed: 1 Percent change in net sales at constant currency rates is a non-GAAP financial measure.
−Removed: See the section entitled “Non-GAAP Financial Measures” for additional information about our use of that measure.
−Removed: Kidney Care segment net sales were flat for the year ended December 31, 2023, as compared to the prior year.
−Removed: Chronic Therapies net sales decreased 1% for the year ended December 31, 2023, as compared to the prior year.
−Removed: Sales performance in the current year was primarily due to lower sales in China, driven by government-based procurement initiatives and the impact of COVID-19 on that country’s renal patient population, and the termination of distribution agreements in the U.S, offset by patient growth in PD, pricing initiatives and recent government tender awards in EMEA.
+Added: Pharmaceuticals segment net sales increased 6% for the year ended December 31, 2023, as compared to the prior year period.
+Added: Injectables and Anesthesia net sales increased 3% for the year ended December 31, 2023, as compared to the prior year period, primarily due to growth in our U.S.
+Added: injectable products, driven by our launches of Zosyn, following the transfer of the related product rights to us in April 2023, Bendamustine and Norepinephrine, partially offset by lower sales of inhaled anesthesia products.
Foreign currency exchange rates adversely impacted net sales by 1% for the year ended December 31, 2023, as compared to the prior year period.
−Removed: Acute Therapies net sales increased 5% for the year ended December 31, 2023, as compared to the prior year, driven by strong demand for our CRRT offerings.
−Removed: Sales growth in 2023 was adversely impacted by a comparison against a prior year period that included strong COVID-related demand for our CRRT offerings during the first quarter.
+Added: Drug Compounding net sales increased 10% for the year ended December 31, 2023, as compared to the prior year period, driven by increased demand for our international pharmacy compounding services.
Foreign currency exchange rates adversely impacted net sales by 2% for the year ended December 31, 2023, as compared to the prior year period.
−Removed: Percent change
−Removed: years ended December 31 (in millions) 2022 2021 At actual
−Removed: currency rates At constant
−Removed: currency rates 1
−Removed: Chronic Therapies $ 3,714 $ 3,862 (4) % 2 %
−Removed: Acute Therapies 735 820 (10) % (6) %
−Removed: Total Kidney Care net sales $ 4,449 $ 4,682 (5) % 1 %
−Removed: 1 Percent change in net sales at constant currency rates is a non-GAAP financial measure.
−Removed: See the section entitled “Non-GAAP Financial Measures” for further information.
−Removed: Kidney Care segment net sales decreased 5% for the year ended December 31, 2022, as compared to the prior year.
−Removed: Chronic Therapies sales decreased 4% for the year ended December 31, 2022, as compared to the prior year.
−Removed: The decrease in 2022 was driven by a 6% negative impact from foreign exchange rate changes and non-renewals of certain low margin customer contracts, particularly in Western Europe, partially offset by global patient growth and $28 million of incremental revenue from a customer that did not meet its contractual minimum purchase requirements.
−Removed: Acute Therapies net sales decreased 10% for the year ended December 31, 2022, as compared to the prior year.
−Removed: The decrease in 2022 was driven by lower COVID-related demand for our CRRT product offerings and a 4% negative impact from foreign exchange rate changes, as compared to the prior year period.
During the years ended December 31, 2024, 2023 and 2022, we earned $67 million, $87 million and $177 million, respectively, of revenues that were not attributable to our reportable segments.
−Removed: In the current and prior year periods, those other sales primarily represent revenues earned by certain of our manufacturing facilities from contract manufacturing activities and royalty income under a business development arrangement.
−Removed: The decrease for the year ended December 31, 2023 as compared to the prior year period reflects lower contract manufacturing volume and the termination of the royalty arrangement following our acquisition of the rights to the underlying product in April
−Removed: The increase for the year ended December 31, 2022 as compared to the prior year period was primarily driven by increased contract manufacturing revenue and royalty income from a business development arrangement entered into in March 2022.
+Added: In the current and prior year periods, Other sales primarily represent revenues earned by certain of our manufacturing facilities from contract manufacturing activities.
+Added: The years ended December 31, 2023 and 2022 also included royalty income under a business development arrangement.
+Added: The decrease in Other sales for the year ended December 31, 2024 as compared to the prior year period reflects lower contract manufacturing volume.
+Added: The decrease for the year ended December 31, 2023 as compared to the prior year period was primarily driven by lower contract manufacturing
+Added: volume and, to a lessor extent, termination of the royalty arrangement following our acquisition of the rights to the underlying product.
Special Items
7 unchanged sentences
Long-lived asset impairments 1
−Removed: (267) (344) —
Business optimization items 2
5 unchanged sentences
(33) (41) (42)
−Removed: Separation-related costs 6
+Added: Hurricane Helene costs 6
Total Special Items $ (645) $ (452) $ (1,008)
4 unchanged sentences
Acquisition and integration items 4
−Removed: Separation-related costs 6
Legal matters 7
−Removed: Investigation and related costs 8
Total Special Items $ 310 $ 377 $ 543
1 unchanged sentence
Business optimization items 2
+Added: $ 30 $ 10 $ 3
+Added: Long-lived asset impairments 1
Total Special Items $ 80 $ 10 $ 3
11 unchanged sentences
Total Special Items $ — $ (27) $ 36
−Removed: Interest Expense, Net
−Removed: Acquisition and integration items 4
−Removed: Total Special Items $ — $ — $ 48
Other (Income) Expense, Net
3 unchanged sentences
Investment impairments 13
−Removed: Loss on debt extinguishment 14
Total Special Items $ — $ 31 $ 54
6 unchanged sentences
Impact on Effective Tax Rate (30.3) pts 4.7 pts (13.6) pts
−Removed: 1 Our results in 2023 included long-lived asset impairment charges of $267 million related to the HD business within our Kidney Care segment, comprised of (i) a $190 million impairment charge related to certain manufacturing equipment, operating lease right-of-use assets and HD equipment leased to customers and (ii) a $77 million impairment charge related to a developed technology intangible asset.
−Removed: Our results in 2022 included long-lived asset impairment charges related to assets acquired in our December 2021 acquisition of Hillrom, comprised of (i) a $2.81 billion goodwill impairment and (ii) $332 million of indefinite-lived intangible assets.
−Removed: We also recognized $12 million of developed technology intangible asset impairments during 2022.
+Added: 1 Our results in 2024 included a long-lived asset impairment charge of $50 million to reduce the carrying amount of an IPR&D asset to its fair value.
+Added: Our results in 2022 included long-lived asset impairment charges related to assets acquired in our December 2021 acquisition of Hillrom, comprised of (i) $332 million of indefinite-lived intangible assets and (ii) $12 million of developed technology intangible asset impairments.
Refer to Notes 3 and 5 in Item 8 of this Annual Report on Form 10-K for further information regarding the impairments.
1 unchanged sentence
2 Our results in 2024, 2023 and 2022 were impacted by costs associated with our execution of programs to optimize our organization and cost structure.
−Removed: These restructuring and other business optimization costs included actions related to our current implementation of a new operating model intended to simplify and streamline our operations and better align our manufacturing and supply chain to our commercial activities, our integration of Hillrom, the decision to close one of our U.S.-based manufacturing facilities this year, which resulted in a $243 million noncash impairment of property, plant and equipment, rationalization of certain other manufacturing and distribution facilities and transformation of certain general and administrative functions.
+Added: In 2024, these restructuring and other business optimization costs included costs primarily related to initiatives to reduce our cost structure following the sale of our Kidney Care segment, initiatives within our Healthcare Systems & Technologies segment including the discontinuance of a product line and rationalization of certain other manufacturing and distribution facilities.
+Added: In 2023 and 2022, these restructuring and other business optimization costs included actions related to our implementation of a new operating model intended to simplify and streamline our operations and better align our manufacturing and supply chain to our commercial activities, and our ongoing integration of Hillrom.
Our results in 2024 and 2023 and 2021 included business optimization charges of $162 million, $174 million, $193 million, respectively.
Refer to Note 12 in Item 8 of this Annual Report on Form 10-K for further information regarding these charges and related liabilities.
+Added: 3 Our results in 2024 included charges of $15 million, comprised of (i) $12 million related to warranty and remediation activities arising from field corrective actions on Healthcare Systems & Technologies products and (ii) $3 million related to a revised estimate of warranty and remediation activities arising from a field corrective action on certain of our infusion pumps initially recorded in 2022.
Our results in 2022 included charges of $44 million related to warranty and remediation activities arising from two field corrective actions on certain of our infusion pumps.
+Added: 4 Our results in 2024 included $23 million of integration costs which primarily reflected third-party consulting costs related to our integration of Hillrom.
Our results in 2023 included $19 million of integration-related costs, primarily related to our integration of Hillrom, offset by a $19 million benefit from changes in the estimated fair values of contingent consideration liabilities.
Our results in 2022 included $213 million of acquisition and integration-related items, which reflected $93 million of integration-related costs and $159 million of incremental cost of sales from the fair value step-ups on acquired Hillrom inventory that was sold in 2022, partially offset by a $39 million benefit from changes in the estimated fair value of contingent consideration liabilities.
−Removed: Our results in 2021 included acquisition, integration and related financing expenses of $236 million.
−Removed: This included acquisition, integration and related financing expenses for our acquisition of Hillrom and the acquisition of the rights to Caelyx and Doxil for specified territories outside of the U.S.
−Removed: These expenses were partially offset by benefits from changes in the estimated fair value of contingent consideration liabilities.
Refer to Note 3 in Item 8 of this Annual Report on Form 10-K for further information regarding business and asset acquisitions.
1 unchanged sentence
We consider the adoption of these regulations to be a significant one-time regulatory charge and believe that the costs of initial compliance for previously registered products over the implementation period are not indicative of our core operating results.
−Removed: 6 Our results in 2023 and 2022 included $225 million and $7 million of separation-related costs, primarily reflecting costs of external advisors supporting our activities to prepare for the proposed spinoff of our Kidney Care segment.
−Removed: We also incurred $17 million and $5 million of additional separation-related costs in 2023 and 2022, respectively, related to the sale of our BPS business that are reported in discontinued operations and are not presented in the table above.
+Added: 6 Our results in 2024 included pre-tax net charges of $110 million related damages caused by Hurricane Helene.
+Added: This amount consisted of $44 million related to the write-off of damaged inventory and fixed assets, as well as $317 million of remediation, idle facility, air freight and other costs, partially offset by $251 million of insurance recoveries.
+Added: Refer to Note 1 in Item 8 of this Annual Report on Form 10-K for further information.
+Added: 7 Our results in 2024 included charges of $17 million related to environmental reserves for remediation actions associated with historic operations at certain of our facilities.
Our results in 2023 included $7 million of net costs from certain legal matters.
These costs included $13 million, including related legal fees, related to matters involving alleged violations of the False Claims Act related to a now-discontinued legacy Hillrom sales line and alleged injury from environmental exposure, partially offset by $6 million of proceeds received, net of related legal fees, from a settlement related to an intellectual property dispute.
−Removed: Our results in 2021 included legal fees of $13 million associated with claimants alleging injuries as a result of proximity to one of our plants.
−Removed: 8 Our results in 2021 included charges of $31 million for investigation and related costs for matters associated with our previously announced investigation of foreign exchange gains and losses.
−Removed: Refer to Note 8 in Item 8 of this Annual Report on Form 10-K for further information regarding these charges.
+Added: 8 Our results in 2024 included a goodwill impairment charge of $425 million related to the Front Line Care reporting unit within our Health Care Systems & Technologies segment.
+Added: Our results in 2022 included goodwill impairment charges of $2.81 billion related to reporting units within our Health Care Systems & Technologies segment.
+Added: Refer to Notes 3 and 5 in Item 8 of this Annual Report on Form 10-K for further information regarding these goodwill impairments.
9 Our results in 2022 included a loss of $54 million under an arrangement to divest certain product rights for an amount that is less than our cost of those product rights, which was triggered by U.S.
7 unchanged sentences
13 Our results in 2023 included $31 million of net pre-tax losses from non-marketable investments in several early-stage companies, consisting of $34 million of noncash impairment write-downs, partially offset by a $3 million gain from the sale of an investment.
−Removed: 14 Our results in 2021 included a loss of $5 million on the early extinguishment of the $2.40 billion debt assumed as part of the Hillrom acquisition.
−Removed: 15 Our results in 2023 included a $5 million net income tax benefit from internal reorganization transactions, primarily related to the proposed spinoff of our Kidney Care segment, and a $9 million valuation allowance to reduce the carrying amount of a deferred tax asset for a tax basis step-up related to previously enacted Swiss tax reform legislation to reflect our current estimate of its recoverability.
+Added: 14 Our results in 2024 included a $80 million net income tax expense consisting of a $28 million valuation allowance recorded to reduce the carrying amount of tax attribute carryforwards in the U.S., $22 million of net income tax costs on internal reorganization transactions related to the sale of our Kidney Care segment, a $17 million income tax expense related to legislative changes under Internal Revenue Code of 1986 (IRC) Section 987 (which is the exchange gain or loss on foreign branch remittances in the U.S., effective in 2024), and a $13 million net revaluation of the Swiss basis step-up deferred tax asset and related valuation allowance that arose from Swiss tax reform legislation in 2019 that was partially offset by a decrease in such valuation allowance to reflect our current estimate of recoverability of the basis step-up deferred tax asset.
+Added: Our results in 2023 included a $14 million income tax expense from separation related income tax costs associated with the sale of our BPS business, and a $9 million valuation allowance to reduce the carrying amount of a deferred tax asset for a tax basis step-up related to previously enacted Swiss tax reform legislation to reflect our current estimate of its recoverability with the remaining tax expense related to the tax effects of other special items.
Our results in 2022 included a $25 million valuation allowance to reduce the carrying amount of a deferred tax asset for a tax basis step-up related to previously enacted Swiss tax reform legislation to reflect our current estimate of its recoverability.
−Removed: Our results in 2021 included a $58 million income tax benefit related to a tax-deductible foreign statutory loss on an investment in a foreign subsidiary and an $18 million income tax benefit related to a change in U.S.
−Removed: foreign tax credit regulations, partially offset by a $22 million income tax expense related to an unfavorable court ruling for an uncertain tax position.
15 This item reflects the income tax impact of the special items identified in this table.
7 unchanged sentences
The gross margin ratio was 37.5%, 40.1% and 35.3% for the years ended 2024, 2023 and 2022, respectively.
−Removed: The special items identified earlier in this section had an unfavorable impact on gross margin ratio of 7.6 percentage points in both 2023 and 2022 and 3.5 percentage points in 2021.
+Added: The special items identified earlier in this section had an unfavorable impact on gross margin ratio of 6.0, 4.3, and 10.0 percentage points in 2024.
+Added: 2023, and 2022, respectively.
Refer to the Special Items caption earlier in this section for additional detail.
−Removed: Excluding the impact of special items, the gross margin ratio decreased 1.3 percentage points in 2023 compared to 2022 and increased 0.1 percentage points in 2022 compared to 2021.
+Added: Excluding the impact of special items, the gross margin ratio decreased 0.9 percentage points in 2024 compared to 2023 and decreased 0.9 percentage points in 2023 compared to 2022.
+Added: The decrease in 2024 was driven by an unfavorable product mix, partially offset by initiatives to reduce our manufacturing and supply chain costs.
The decrease in 2023 was primarily due to the adverse cost impacts of raw materials inflation driving higher manufacturing costs and higher bonus accruals under our annual employee incentive compensation plans, partially offset by manufacturing initiatives.
−Removed: The increase in 2022 was due to a favorable product mix that was primarily driven by our acquisition of Hillrom, lower bonus accruals under our annual employee incentive compensation plans, lower U.S.
−Removed: customer rebates and $28 million of incremental revenue from a customer that did not meet its contractual minimum purchase requirements, partially offset by raw materials inflation and, to a lesser extent, increased supply chain costs.
−Removed: The SG&A expense ratio was 26.6% in both 2023 and 2022 and 23.4% in 2021.
+Added: The SG&A expense ratio was 27.9%, 28.5% and 30.8% for the years ended 2024, 2023 and 2022, respectively.
The special items identified earlier in this section had an unfavorable impact on the SG&A expense ratio of 2.9, 3.6 and 5.4 percentage points in 2024, 2023 and 2022, respectively.
Refer to the Special Items caption earlier in this section for additional detail.
−Removed: Excluding the impact of special items, the SG&A expense ratio decreased 0.2 percentage points in 2023 compared to 2022 and increased 1.4 percentage points in 2022 compared to 2021.
+Added: Excluding the impact of special items, the SG&A expense ratio increased 0.1 percentage points in 2024 compared to 2023 and decreased 0.5 percentage points in 2023 compared to 2022.
+Added: The increase in 2024 was primarily due to higher corporate function costs and annual compensation increases, partially offset by lower accruals under our annual employee incentive compensation plans.
The decrease in 2023 was primarily due to savings from restructuring actions implemented in recent periods, partially offset by higher bonus accruals under our annual employee incentive compensation plans.
−Removed: The increase in 2022 was primarily due to the acquisition of Hillrom and increased outbound freight costs, partially offset by lower bonus accruals under our annual employee incentive compensation plans.
The R&D expense ratio was 5.5%, 5.0% and 4.5% for the years ended 2024, 2023 and 2022, respectively.
−Removed: The special items identified earlier in this section had an unfavorable impact on the R&D expense ratio of 0.1 percentage points both in 2023 and 2022 and had no impact on the R&D expense ratio in 2021.
+Added: The special items identified earlier in this section had an unfavorable impact on the R&D expense ratio of 0.7 percentage points in 2024 , and 0.1 percentage points both in 2023 and 2022.
Refer to the Special Items caption earlier in this section for additional detail.
−Removed: Excluding the impact of special items, the R&D expense ratio increased 0.3 percentage points in 2023 compared to 2022 and decreased 0.3 basis points in 2022 compared to 2021.
−Removed: The increase in 2023 was driven by increased project-related expenditures, particularly related to the connected care portfolio in our Healthcare Systems and Technologies segment, and higher bonus accruals under our annual employee incentive compensation plans.
−Removed: The decrease in 2022 reflected lower bonus accruals under our annual employee incentive compensation plans, partially offset by an increase in R&D spend following the Hillrom acquisition.
+Added: Excluding the impact of special items, the R&D expense ratio decreased 0.1 percentage points in 2024 compared to 2023 and increased 0.5 basis points in 2023 compared to 2022.
+Added: The decrease in 2024 was driven by lower bonus accruals under our annual employee incentive compensation plans.
+Added: The increase in 2023 reflected higher outbound freight costs.
Business Optimization Items
In recent years, we have undertaken actions to transform our cost structure and enhance operational efficiency.
−Removed: These efforts have included restructuring the organization, optimizing our manufacturing footprint, R&D operations and supply chain network, employing disciplined cost management, and centralizing and streamlining certain support functions.
−Removed: The costs of these actions consisted primarily of employee termination costs, implementation costs, contract termination costs and asset impairments.
+Added: These efforts include restructuring the organization, optimizing the manufacturing footprint, R&D operations and supply chain network, employing disciplined cost management and centralizing and streamlining certain support functions.
+Added: The costs of restructuring actions consisted primarily of employee termination costs, contract termination costs and asset impairments.
We incurred restructuring charges of $162 million, $174 million and $193 million in 2024, 2023 and 2022, respectively.
−Removed: In 2023, $111 million of our restructuring charges, consisting of employee termination costs, were related to the implementation of our previously announced new operating model intended to simplify and streamline our operations.
−Removed: In addition, $267 million of the restructuring charges, consisting of $243 million of long-lived asset impairment charges, $14 million of other asset write-downs and $10 million of employee termination costs, were related to our decision to cease production of dialyzers at one of our manufacturing facilities in connection with our initiatives to streamline our manufacturing footprint and improve our profitability.
−Removed: In 2022, $85 million of our restructuring charges were related to integration activities for the Hillrom acquisition, consisting of $55 million of employee termination costs, $22 million of contract termination and other costs and $8 million of asset impairments.
−Removed: For the year ended December 31, 2021, $37 million and $12 million, respectively, of restructuring charges, consisting of employee termination costs, were related to global programs to simplify and streamline our supply chain and finance functions.
−Removed: We currently expect to incur additional pre-tax costs, primarily related to the implementation of business optimization programs, of approximately $50 million through the completion of initiatives that are currently underway.
−Removed: We continue to pursue cost savings initiatives and, to the extent further cost savings opportunities are identified, we would incur additional restructuring charges and costs to implement business optimization programs in future periods.
+Added: In 2024, $45 million of the restructuring charges, consisting of employee termination costs, were related to initiatives to reduce our cost structure following the sale of our Kidney Care segment.
+Added: In addition, $46
+Added: million of the restructuring charges were related to business optimization initiatives within our Healthcare Systems & Technologies segment.
+Added: These charges included $21 million of long-lived asset impairment charges, $9 million of other asset write-downs related to inventory and $2 million of employee termination costs related to our decision to discontinue a product line.
+Added: Additionally, these charges included $14 million of employee termination costs related to other business optimization initiatives within this segment.
+Added: In 2023, $81 million of the restructuring charges, consisting of employee termination costs, were related to the implementation of our new operating model intended to streamline our operations.
+Added: In 2022, $85 million restructuring charges were related to integration activities for the Hillrom acquisition, consisting of $55 million of employee termination costs, $22 million of contract terminations and other costs and $8 million of asset impairments.
+Added: We currently expect to incur additional pre-tax cash costs, primarily related to the implementation of business optimization programs, of approximately $4 million through the completion of initiatives that are currently underway.
+Added: We continue to pursue cost savings initiatives, including those intended to mitigate a portion of the dis-synergies expected to arise as a result of the sale of our Kidney Care business, and to the extent further cost savings opportunities are identified, we would incur additional restructuring charges and costs to implement business optimization programs in future periods.
Refer to Note 12 in Item 8 of this Annual Report on Form 10-K for additional information regarding our business optimization programs.
2 unchanged sentences
We recognize a goodwill impairment charge for the amount by which a reporting unit's carrying amount exceeds its fair value.
+Added: In connection with our annual goodwill impairment assessment in the fourth quarter of 2024, we recorded a $425 million goodwill impairment related to our Front Line Care reporting unit within our Healthcare Systems & Technologies segment.
+Added: The reduction in value was primarily due to lower forecasted operating results and a lower terminal growth rate utilized in valuing this reporting unit which contributed to reduced expected future cash flows, as well as lower earnings multiples.
+Added: The fair value of the Front Line Care reporting unit was determined based on a discounted cash flow model (an income approach) and earnings multiples (a market approach) based on the guideline public company method.
+Added: Significant assumptions used in the determination of the fair values of our reporting units generally include revenue growth rates, forecasted earnings before income, taxes, depreciation and amortization (EBITDA) margins, discount rates, terminal growth rates and earnings multiples.
+Added: The discounted cash flow model used to determine the fair value of our Front Line Care reporting unit reflected our most recent cash flow projections, a discount rate of 9.5% and a terminal growth rate of 3.25%.
+Added: Our reporting unit fair value measurements are classified as Level 3 in the fair value hierarchy because they involve significant unobservable inputs.
+Added: As of December 31, 2024, the carrying amount of goodwill for our Front Line Care reporting unit was $1.99 billion.
+Added: No goodwill impairments were recorded for our remaining reporting units in connection with our annual goodwill impairment tests because the fair values of those reporting units exceeded their carrying amounts.
+Added: Refer to Note 5 in Item 8 of this Annual Report on Form 10-K for additional information regarding this goodwill impairment charge.
We acquired Hillrom on December 13, 2021 and recognized $6.83 billion of goodwill and $6.03 billion of other intangible assets, including $1.91 billion of indefinite-lived intangible assets, in connection with that acquisition.
−Removed: During the third quarter of 2022, we performed trigger-based impairment tests for each of the reporting units within our Hillrom segment (currently referred to as our Healthcare Systems and Technologies segment), as well as the indefinite-lived intangible assets, consisting primarily of trade names, that we acquired in connection with the Hillrom acquisition.
+Added: During the third quarter of 2022, we performed trigger-based impairment tests for each of the reporting units within our Hillrom segment (currently referred to as our Healthcare Systems & Technologies segment), as well as the indefinite-lived intangible assets, consisting primarily of trade names, that we acquired in connection with the Hillrom acquisition.
We performed those tests as of September 30, 2022 due to (a) current macroeconomic conditions, including the rising interest rate environment and broad declines in equity valuations, and (b) reduced earnings forecasts for our three Hillrom reporting units, driven primarily by shortages of certain component parts used in our products, raw materials inflation and increased supply chain costs.
Those goodwill impairment tests resulted in total pre-tax goodwill impairment charges of $2.79 billion in the third quarter of 2022.
−Removed: In connection with our annual goodwill impairment assessment in the fourth quarter of 2022, we performed quantitative impairment tests for all our reporting units and recorded an additional $27 million goodwill impairment related to our Global Surgical Solutions reporting unit (now combined with our previous Patient Support Systems reporting unit in our Care and Connectivity Solutions reporting unit).
−Removed: No goodwill impairments were recorded for our remaining reporting units in connection with our annual goodwill impairment tests because the fair values of those reporting units exceeded their net book values.
−Removed: Refer to Note 5 in Item 8 of this Annual Report on Form 10-K for additional information regarding these goodwill impairment charges, as well as information about related indefinite-lived intangible asset impairment charges.
−Removed: Further adverse changes to macroeconomic conditions or our earnings forecasts could lead to additional goodwill or intangible asset impairment charges in future periods and such charges could be material to our results of operations.
+Added: In connection with our annual goodwill impairment assessment in the fourth quarter of 2022, we performed quantitative impairment tests for all our reporting units and recorded an additional $27 million goodwill impairment related to our Global Surgical Solutions reporting unit (now combined with our previous Patient Support Systems reporting unit in our Care and Connectivity
+Added: Solutions reporting unit).
+Added: Refer to Note 3 in Item 8 of this Annual Report on Form 10-K for additional information regarding these goodwill impairment charges.
+Added: Further adverse changes to macroeconomic conditions or our earnings forecasts could lead to additional goodwill impairment charges in future periods and such charges could be material to our results of operations.
For further discussion, refer to Item 1A.
1 unchanged sentence
Other Operating Expense (Income), Net
−Removed: Other operating expense (income), net was income of $28 million in 2023, an expense of $36 million in 2022 and income of $6 million in 2021.
−Removed: The income in 2023 was comprised of gains from changes in the fair values of contingent consideration arrangements and proceeds from a settlement related to an intellectual property dispute.
+Added: Other operating expense (income), net was income of $12 million in 2024, income of $28 million in 2023 and expense of $35 million in 2022.
+Added: The income in 2024 was comprised of income from transition services arrangements related to the divestiture of our BPS business.
+Added: In 2023, this amount was comprised of gains from changes in the estimated fair value of contingent consideration arrangements and proceeds from a settlement related to an intellectual property dispute.
In 2022, we recognized a loss of $54 million under an arrangement to divest certain product rights for an amount that was less than our cost of those product rights, which was triggered by U.S.
3 unchanged sentences
Those losses were partially offset by gains of $39 million from net decreases in the estimated fair values of contingent consideration liabilities.
−Removed: In 2021, we recognized $6 million of gains from net decreases in the estimated fair values of contingent consideration liabilities.
Interest Expense, Net
Interest expense, net was $341 million, $439 million and $394 million in 2024, 2023 and 2022, respectively.
+Added: The decrease in 2024 was driven by debt repayments in the fourth quarter of 2023 and, to a lesser extent, higher interest income due to a higher average cash balance and higher interest rates during the current year period.
The increase in 2023 was driven by higher interest rates on our floating rate debt, partially offset by net repayments in the current year periods and higher interest income in 2023.
−Removed: The increase in 2022 was primarily driven by higher average debt outstanding in connection with the Hillrom acquisition, partially offset by acquisition bridge facility commitment fees recognized in 2021 and higher interest income in 2022.
−Removed: We expect that our net interest expense will decrease in future periods as a result of debt repayments during the fourth quarter of 2023 and planned debt repayments during the first half of 2024 using the proceeds we received from the recent sale of our BPS business.
+Added: We expect that our net interest expense will decrease in future periods as a result of debt repayments during the fourth quarter of 2024 and debt repayments during the first quarter of 2025 using the proceeds we received from the recent sale of our Kidney Care business.
Refer to Note 6 in Item 8 of this Annual Report on Form 10-K for a summary of the components of interest expense, net for 2024, 2023 and 2022.
Other (Income) Expense, Net
−Removed: Other (income) expense, net was expense of $51 million, $12 million and $41 million in 2023, 2022 and 2021, respectively.
−Removed: The net expense in 2023 was primarily driven by foreign exchange losses and non-marketable investment impairments, partially offset by pension and other postretirement benefits (OPEB) and increases in the fair value of marketable equity securities.
+Added: Other (income) expense, net was income of $38 million, expense of $26 million and expense of $9 million in 2024, 2023 and 2022, respectively.
+Added: The net income in 2024 was primarily driven by pension and other postretirement benefits, partially offset by foreign exchange losses.
+Added: The net expense in 2023 was primarily driven by foreign exchange losses, non-marketable investment impairments, partially offset by pension and postretirement benefits.
The net expense in 2022 was primarily due to the reclassification of a cumulative translation loss from accumulated other comprehensive income (loss) to earnings due to the substantial liquidation of our operations in Argentina, partially offset by pension and OPEB benefits, a pension curtailment gain and net increases in the fair value of marketable equity securities.
−Removed: The net expense in 2021 was primarily driven by foreign exchange losses, pension and OPEB costs and a loss on debt extinguishment.
Our effective income tax rate was (12.8)%, 25.2% and 4.2% in 2024, 2023 and 2022, respectively.
4 unchanged sentences
For the year ended December 31, 2024, the difference between our effective income tax rate and the U.S.
−Removed: federal statutory rate was impacted favorably by the jurisdictional mix of global earnings, which included the long-lived asset impairments we recognized during 2023, a $50 million net tax benefit after related valuation allowances from notional interest deductions received by certain wholly-owned foreign subsidiaries that have financed their operations with equity capital and a $21 million tax benefit related to research and development tax credits, partially offset by non-deductible separation-related income tax costs and tax shortfalls on stock compensation awards.
+Added: federal statutory rate was adversely impacted by a non-deductible impairment of goodwill, legislative changes under IRC Section 987 (which is the exchange gain or loss on foreign branch remittances in the U.S., effective in 2024), and a net revaluation of the Swiss basis step-up deferred tax asset and related valuation allowance that arose from Swiss
+Added: tax reform legislation in 2019, partially offset by a favorable geographic earnings mix, a decrease in valuation allowance mainly related to U.S.
+Added: foreign tax credit carryforward, and a tax benefit related to research and development tax credits.
For the year ended December 31, 2023, the difference between our effective income tax rate and the U.S.
−Removed: federal statutory rate was primarily attributable to non-deductible impairments of goodwill acquired in the Hillrom acquisition
−Removed: and valuation allowance increases, including a $25 million increase related to deferred tax assets from a tax basis step-up related to previously enacted Swiss tax legislation.
−Removed: Those items were partially offset by a $47 million net tax benefit after related valuation allowances from notional interest deductions.
+Added: federal statutory rate was impacted favorably by geographical earnings mix, a $50 million net tax benefit after related valuation allowances from notional interest deductions received by certain wholly-owned foreign subsidiaries that have financed their operations with equity capital and a $17 million tax benefit related to research and development tax credits, partially offset by tax shortfalls on stock compensation awards.
For the year ended December 31, 2022, the difference between our effective income tax rate and the U.S.
−Removed: federal statutory rate was primarily attributable to favorable geographic earnings mix, a $50 million net tax benefit after related valuation allowances from notional interest deductions, a $58 million tax benefit related to a tax-deductible foreign statutory loss on an investment in a foreign subsidiary, a tax benefit related to a change in U.S.
−Removed: foreign tax credit regulations 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.
+Added: federal statutory rate was primarily attributable to non-deductible impairments of goodwill acquired in the Hillrom acquisition and valuation allowance increases, including the increase described above related to deferred tax assets from a tax basis step-up related to previously enacted Swiss tax legislation in 2019.
+Added: Those items were partially offset by a $47 million net tax benefit after related valuation allowances from notional interest deductions.
Our tax provisions for 2024, 2023 and 2022 did not include any significant tax charges related to either the Base Erosion and Anti-Abuse Tax (BEAT) or Global Intangible Low Taxed Income (GILTI) provisions, except for the inability to fully utilize foreign tax credits against such GILTI.
Our accounting policy is to recognize any GILTI charge as a period cost.
+Added: The Organization of Economic Co-operation and Development (OECD) and the G20 Inclusive Framework on Base Erosion and Profit Shifting (the Inclusive Framework) has put forth two proposals—Pillar One and Pillar Two—that (i) revise the existing profit allocation and nexus rules and (ii) ensure a minimal level of taxation, respectively.
+Added: On December 12, 2022, the EU member states agreed to implement the Inclusive Framework’s global corporate minimum tax rate of 15%, and various countries both within and outside the EU have enacted new laws implementing Pillar Two or have draft legislation proposed for adoption.
+Added: The OECD continues to release additional guidance on the two-pillar framework, with widespread implementation occurring in 2024.
+Added: The impact of the Pillar Two legislation on our income tax expense for the year ended December 31, 2024 was $11 million.
+Added: We are continuing to evaluate the potential impacts of the Inclusive Framework for 2025 and future years, pending legislative adoption by individual countries, which could result in further adverse impacts on our income tax expense and cash flows.
Discontinued Operations
−Removed: On September 29, 2023, we completed the sale of our BPS business and received cash proceeds of $3.96 billion from that transaction.
−Removed: The financial position, results of operations and cash flows of our BPS business, including our gain from the sale of that business and the related cash proceeds received, are reported as discontinued operations in the consolidated financial statements included in Item 8 of this Annual Report on Form 10-K.
−Removed: Income from discontinued operations, net of tax, was $2.73 billion, $233 million and $262 million in 2023, 2022 and 2021, respectively.
−Removed: The increase in the current year period was primarily driven by the $2.88 billion pre-tax gain from the sale of the BPS business ($2.59 billion net of tax).
−Removed: Excluding that gain on sale, pre-tax income from discontinued operations decreased by $90 million in 2023 compared to 2022, which was primarily driven by there being only nine months of activity through the sale of the business on September 29, 2023, lower sales from contract manufacturing of COVID-19 vaccines and increased SG&A expenses in the current year period from separation-related costs.
−Removed: Pre-tax income from discontinued operations decreased by $64 million in 2022 compared to 2021, which was primarily driven by lower sales from contract manufacturing of COVID-19 vaccines.
+Added: In August 2024, we entered into a definitive agreement to sell our Kidney Care business and its results have been presented as discontinued operations for the years ended December 31, 2024, 2023 and 2022 in the consolidated financial statements included in Item 8 of this Annual Report on Form 10-K.
+Added: On September 29, 2023, we completed the sale of our BPS business and its results have been presented as discontinued operations for the years ended December 31, 2023 and 2022 are reported as discontinued operations in the consolidated financial statements included in Item 8 of this Annual Report on Form 10-K.
+Added: Income (loss) from discontinued operations, net of tax, was $(312) million, $2.48 billion and $692 million in 2024, 2023 and 2022, respectively.
+Added: The decrease in the current year period was primarily driven by the $2.88 billion pre-tax gain from the sale of the BPS business ($2.59 billion net of tax).
Refer to Note 2 in Item 8 of this Annual Report on Form 10-K for additional information.
Net Income (Loss) and Earnings (Loss) per Diluted Share
−Removed: Net income (loss) for the total company, including discontinued operations, was income of $2.66 billion in 2023, loss of $2.42 billion in 2022 and income of $1.30 billion in 2021.
+Added: Net income (loss) for the total company, including discontinued operations, was $(638) million in 2024, $2.66 billion in 2023 and $(2.42) billion in 2022.
Diluted earnings (loss) per share for the total company, including discontinued operations, was $(1.27) per share in 2024, $5.23 per share in 2023 and $(4.83) per share in 2022.
3 unchanged sentences
SEGMENT OPERATING INCOME (LOSS)
−Removed: The following is a summary of operating income for our reportable segments.
+Added: The following is a summary of operating income (loss) for our reportable segments.
for the years ended December 31 (in millions) 2024 2023 2022
−Removed: Medical Products and Therapies $ 972 $ 962 $ 955
+Added: Medical Products & Therapies $ 950 $ 972 $ 962
% of Segment Net Sales 18.2 % 19.4 % 20.0 %
−Removed: Healthcare Systems and Technologies 483 494 60
+Added: Healthcare Systems & Technologies 468 483 494
% of Segment Net Sales 15.9 % 16.0 % 16.8 %
1 unchanged sentence
% of Segment Net Sales 13.0 % 17.8 % 18.4 %
−Removed: Kidney Care 300 408 488
−Removed: % of Segment Net Sales 6.7 % 9.2 % 10.4 %
+Added: Total reportable segment operating income 1,731 1,856 1,847
Other 18 18 77
−Removed: Total 2,174 2,332 2,085
Unallocated corporate costs (275) (355) (367)
3 unchanged sentences
Long-lived asset impairments (50) — (344)
−Removed: Separation-related costs (225) (7) —
Legal matters (17) (7) —
1 unchanged sentence
Product-related items (15) — (44)
+Added: Hurricane Helene Costs (110) — —
Loss on product divestiture arrangement — — (54)
1 unchanged sentence
Loss on subsidiary liquidation — — (21)
−Removed: Investigation and related costs — — (31)
Total operating income (loss) 14 707 (2,845)
1 unchanged sentence
Other (income) expense, net (38) 26 9
−Removed: Loss from continuing operations before income taxes $ (103) $ (2,650) $ 1,116
−Removed: Medical Products and Therapies
+Added: Income (loss) from continuing operations before income taxes $ (289) $ 242 $ (3,248)
+Added: Medical Products & Therapies
Segment operating income was $950 million, $972 million and $962 million for the years ended 2024, 2023 and 2022, respectively.
+Added: Segment operating income decreased in 2024 compared to the prior year due to increased allocations of manufacturing and supply chain overheads, annual compensation increases and higher corporate shared costs, partially offset by higher sales.
+Added: In addition, we estimate that the North Cove flood resulting from Hurricane Helene had an adverse impact of $60 million on segment operating income in 2024.
Segment operating income increased in 2023 compared to the prior year due to the gross profit from higher sales, partially offset by increases in SG&A and R&D expenses.
−Removed: Segment operating income increased in 2022 compared to the prior year due to decreases in R&D expenses, partially offset by lower gross margins.
−Removed: Healthcare Systems and Technologies
+Added: Healthcare Systems & Technologies
Segment operating income was $468 million, $483 million and $494 million for the years ended 2024, 2023 and 2022, respectively.
+Added: Segment operating income decreased in 2024 primarily due to decreased gross profit from lower sales.
Segment operating income decreased in 2023 primarily due to increased R&D expenses, particularly related to the connected care portfolio.
−Removed: Segment operating income increased in 2022 due to our acquisition of Hillrom in December 2021.
−Removed: The 2021 amounts reflect activity over the 18-day period from the acquisition date through year-end.
Pharmaceuticals
Segment operating income was $313 million, $401 million and $391 million for the years ended 2024, 2023 and 2022, respectively.
−Removed: Segment operating income increased in 2023 primarily due to income from recent product launches, partially offset by a lower gross margin, primarily driven by raw materials inflation, and increased R&D
−Removed: Segment operating income decreased in 2022 primarily due to a lower gross margin driven by lower sales, partially offset by decreased R&D expenses.
−Removed: Segment operating income was $300 million, $408 million and $488 million for the years ended 2023, 2022 and 2021, respectively.
−Removed: Segment operating income decreased in 2023 primarily due to raw materials inflation and higher bonus accruals under our annual employee incentive compensation plans.
−Removed: Segment operating income decreased in 2022 primarily due to raw materials inflation, lower net sales and, to a lesser extent, increased supply chain costs, partially offset by lower bonus accruals under our annual employee incentive compensation plans and $28 million of incremental revenue from a customer that did not meet its contractual minimum purchase requirements.
−Removed: During the years ended December 31, 2023, 2022 and 2021, we earned $18 million, $77 million and $59 million, respectively, of operating income that was not attributable to our reportable segments.
−Removed: Operating income generated by activities not attributable to our reportable segments is presented as Other.
−Removed: In the current and prior year periods, other operating income primarily represents income from revenues earned by certain of our manufacturing facilities from contract manufacturing activities and royalty income under a business development arrangement.
−Removed: The decrease in 2023 as compared to the prior year period reflects lower contract manufacturing volume and the termination of the royalty arrangement following our acquisition of the rights to the underlying product in April 2023.
−Removed: The increase in 2022 as compared to the prior year period was primarily driven by royalty income from a business development arrangement entered into in March 2022.
+Added: The decreases in segment operating income in 2024 were driven by lower gross margin percentages, primarily driven by the increased cost of certain inventory manufactured by our former BPS business, which includes a third-party mark-up following our divestiture of that business in September 2023, an unfavorable product mix, and increased operating expenses, including marketing-related costs in connection with recent product
+Added: Segment operating income increased in 2023 primarily due to income from recent product launches, partially offset by a lower gross margin, primarily driven by raw materials inflation, and increased R&D expense.
+Added: Other operating income, which represents operating income not attributable to our reportable segments, was $18 million for both the years ended December 31, 2024 and 2023 and $77 million for the year ended December 31, 2022.
+Added: In the current and prior year periods, other operating income primarily represents income from revenues earned by certain of our manufacturing facilities from contract manufacturing activities.
+Added: Other operating income in 2022 also included royalty income under a business development arrangement.
+Added: Other operating income in 2024 was flat as compared to the prior year period.
+Added: The decrease in 2023 as compared to the prior year period reflects the termination of the royalty arrangement following our acquisition of the rights to the underlying product, partially offset by improved gross margins from contract manufacturing.
Unallocated Corporate Costs
1 unchanged sentence
Corporate costs that are not allocated to our segments, as well as any differences between actual corporate costs and the amounts allocated to our segments, are presented as unallocated corporate costs.
+Added: With the results of our Kidney Care segment reported in discontinued operations, corporate costs that had previously been allocated to the Kidney Care segment which will not convey with the Kidney Care segment in the sale, are now presented as unallocated corporate costs.
Additionally, intangible asset amortization and other special items are not allocated to our segments.
−Removed: Prior to the implementation of our new operating model in the third quarter of 2023, more costs were maintained at corporate and were not allocated to our previous segments.
+Added: Prior to the implementation of our operating model in the third quarter of 2023, more costs were maintained at corporate and were not allocated to our previous segments.
Certain of the costs that were previously maintained at corporate under our prior segment structure that are now allocated to our segments include manufacturing variances and centrally managed supply chain costs, certain R&D costs, product category support costs, stock compensation expense, and certain employee benefit plan costs.
5 unchanged sentences
Cash Flows from Operations — Continuing Operations
−Removed: In 2023, 2022 and 2021, cash provided by operating activities from continuing operations was $1.70 billion, $1.03 billion and $2.03 billion, respectively.
−Removed: Operating cash flows from continuing operations increased in 2023 compared to 2022 primarily due to a decrease in our net loss from continuing operations, lower annual payouts under our employee incentive compensation plans, which were based on our 2022 results, the timing of accounts payable payments and lower increases in inventory and accounts receivable balances as compared to the prior year.
−Removed: Operating cash flows from continuing operations decreased in 2022 compared to 2021 primarily due to our net loss from continuing operations, increases in inventory levels and higher annual payouts under our employee incentive compensation plans, which were based on our 2021 results.
−Removed: Operating cash flows were also adversely impacted in 2022 by the timing of accounts receivable collections and accounts payable payments.
+Added: In 2024, 2023 and 2022, cash provided by operating activities from continuing operations was $819 million, $1.21 billion and $528 million, respectively.
+Added: Operating cash flows from continuing operations in the current year were unfavorably impacted as compared to 2023 due to an increase in our net loss from continuing operations and higher annual payouts under our employee incentive plans, which were determined based on our 2023 performance.
+Added: Operating cash flows from continuing operations increased in 2023 compared to 2022 primarily due to a decrease in our net loss from continuing operations, lower annual payouts under our employee incentive compensation plans, which were based on our 2022 results, the timing of accounts payable payments and lower increases in inventory as compared to the prior year.
Cash Flows from Investing Activities
In 2024, cash used for investing activities from continuing operations included capital expenditures of $446 million.
−Removed: In 2022, cash used for investing activities from continuing operations included capital expenditures of $620 million and payments for acquisitions and investments of $263 million, primarily related to our acquisition of the rights to Zosyn.
−Removed: In 2021, cash used for investing activities from continuing operations included payments for acquisitions and investments of $10.50 billion, primarily related to our acquisition of Hillrom, and capital expenditures of $691 million.
+Added: In 2023, cash used for investing activities from continuing operations included capital expenditures of $432 million.
+Added: In 2022, cash used for investing activities from continuing operations included capital expenditures of $377 million
+Added: and payments for acquisitions and investments of $258 million, primarily related to our acquisition of the rights to Zosyn.
Cash Flows from Financing Activities
−Removed: In 2023, cash used in financing activities included debt repayments of $2.63 billion, dividend payments of $586 million and a net decrease in commercial paper borrowings of $299 million, partially offset by proceeds from stock issued under employee benefit plans of $95 million.
−Removed: In 2022, cash used in financing activities included debt repayments of $954 million and dividend payments of $573 million, partially offset by a net increase in commercial paper borrowings of $55 million and proceeds from stock issued under employee benefit plans of $127 million.
−Removed: In 2021, cash generated from financing activities included $11.80 billion to fund the consideration for the Hillrom acquisition, repay certain indebtedness of Hillrom and pay fees and expenses related to the foregoing.
−Removed: We also had net proceeds from commercial paper borrowings of $299 million and repaid debt obligations of $2.82 billion, including $2.40 billion of debt that was assumed in the Hillrom acquisition.
−Removed: Financing activities in 2021 also included payments for treasury stock repurchases of $600 million, dividend payments of $530 million and receipts from stock issued under employee benefit plans of $187 million.
+Added: In 2024, cash used in financing activities included debt repayments of $2.66 billion, dividend payments of $590 million, partially offset by proceeds from borrowings on our delayed draw term loan of $1.83 billion, an increase in commercial paper borrowings of $296 million, and proceeds from stock issued under employee benefit plans of $71 million.
+Added: In 2023, cash used in financing activities included debt repayments of $2.63 billion and dividend payments of $586 million, and a decrease in commercial paper borrowings of $301 million, partially offset by proceeds from stock issued under employee benefit plans of $95 million.
+Added: In 2022, cash used in financing activities included debt repayments of $954 million and dividend payments of $573 million, partially offset by receipts from stock issued under employee benefit plans of $127 million and a net increase in commercial paper borrowings of $55 million.
As authorized by the Board of Directors, we repurchase our stock depending upon our cash flows, net debt levels and market conditions.
4 unchanged sentences
As of December 31, 2024, we had a U.S.
−Removed: Dollar-denominated term loan credit facility, which had two tranches of term loans outstanding, a U.S.
+Added: Dollar-denominated term loan credit facility, which had one tranche of term loans outstanding, a U.S.
Dollar-denominated revolving credit facility and a Euro-denominated revolving credit facility.
−Removed: As of December 31, 2023, we had $130 million outstanding under one tranche of our U.S.
−Removed: Dollar-denominated term loan credit facility that matures in 2024 and $1.64 billion outstanding under the other tranche of our U.S.
+Added: As of December 31, 2024, we had $1.64 billion outstanding under our U.S.
Dollar-denominated term loan credit facility that matures in 2026.
2 unchanged sentences
We have the option to prepay outstanding amounts under the term loan credit facility in whole or in part at any time.
+Added: In February 2025, we repaid $1.00 billion under our $1.64 billion five-year term loan facility maturing in 2026.
As of December 31, 2024, our U.S.
Dollar-denominated revolving credit facility and Euro-denominated revolving credit facility had a maximum capacity of $2.00 billion and €200 million, respectively, and there were no borrowings under either of these revolving credit facilities as of December, 31, 2024 or December 31, 2023.
+Added: Our commercial paper borrowing arrangements require us to maintain undrawn borrowing capacity under our revolving credit facilities for an amount at least equal to our outstanding commercial paper borrowings.
Each of the revolving credit facilities matures in 2026.
The revolving credit facilities enable us to borrow funds on an unsecured basis at variable interest rates, and contain various covenants, including a maximum net leverage ratio.
+Added: Based on our covenant calculations as of December 31, 2024 we have capacity to draw on the full amounts under our revolving credit facilities, less commercial paper borrowings which were $300 million at year-end.
Facility fees under the credit facilities were 0.125% annually as of both December 31, 2024 and 2023 and are based on our credit ratings and the total capacity of the revolving credit facility.
+Added: On July 17, 2024, we entered into a credit agreement pursuant to which a group of banks provided us with senior unsecured term loans in an aggregate principal amount of up to $2.05 billion ("the bridge facility").
+Added: Borrowings under the bridge facility were available in up to three drawings to fund (a) the refinancing of our 1.322% Senior Notes due November 29, 2024, our Floating Rate Notes due November 29, 2024, and certain borrowings under our existing term loan facility and (b) payment of certain U.S.
+Added: tax liabilities arising from internal reorganization transactions related to the sale of our Kidney Care business.
+Added: Borrowings under the bridge facility bore interest at a rate based on our long-term debt ratings in effect from time to time and the interest rate on any borrowings outstanding beyond December 31, 2024 would increase by 0.25%.
+Added: We also incurred a ticking fee on undrawn commitments at a rate based on our long-term debt ratings in effect from time to time.
+Added: The banks' funding commitments under the bridge facility terminated on December 31, 2024.
+Added: Outstanding borrowings under the bridge facility were scheduled to mature on the earlier of 364 days from the first funding date and November 24, 2025.
+Added: Additionally, we were required
+Added: to use the net cash proceeds from certain transactions (including from the sale of our Kidney Care business) to repay any outstanding borrowings under the bridge facility.
+Added: The bridge facility contained financial and other covenants, including a net leverage covenant, and provided for customary events of default.
+Added: In November 2024, we reduced the bridge facility capacity from $2.05 billion to $1.83 billion.
+Added: Additionally, during the fourth quarter of 2024 we drew on the bridge facility to repay our 1.322% Senior Notes due November 29, 2024, our Floating Rate Notes due November 29, 2024 and the outstanding balance on our three-year term loan facility.
+Added: There was $1.83 billion outstanding under this bridge facility as of December 31, 2024.
+Added: In January 2025, we used a portion of the approximately $3.4 billion of net after-tax cash proceeds from the sale of our Kidney Care business to repay the $1.83 billion outstanding under the bridge facility, at which time it was terminated.
In the first quarter of 2024, we amended the credit agreements governing our U.S.
−Removed: Dollar-denominated term loan credit facility and revolving credit facility and the guaranty agreement with respect to our Euro-denominated revolving credit facility, in each case to amend the net leverage ratio covenant to increase the maximum net leverage ratio for the four fiscal quarters ending March 31, 2023, June 30, 2023, September 30, 2023 and December 31, 2023.
+Added: dollar-denominated term loan credit facility and revolving credit facility and the guaranty agreement with respect to our Euro-denominated revolving credit facility to increase the maximum net leverage ratio covenant for the six fiscal quarters ending June 30, 2024, September 30, 2024, December 31, 2024, March 31, 2025, June 30, 2025, and September 30, 2025.
+Added: In accordance with the terms of the amendment, the capacity under our U.S dollar-denominated revolving credit facility was reduced from $2.50 billion to $2.00 billion on September 30, 2024.
As of December 31, 2024, we were in compliance with the financial covenants in these agreements.
−Removed: Based on our covenant calculations as of December 31, 2023, we have capacity to draw on the full amounts under our revolving credit facilities.
+Added: Based on our covenant calculations as of December 31, 2024, we have capacity to draw on the full amounts under our revolving credit facilities, less commercial paper borrowings which were $300 million at year-end.
The non-performance of any financial institution supporting either of the revolving credit facilities would reduce the maximum capacity of the revolving credit facilities by the institution’s respective commitment.
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however, electing to do so would result in higher interest expense.
−Removed: We had no commercial paper borrowings outstanding as of December 31, 2023.
+Added: As of December 31, 2024, we had $300 million of commercial paper outstanding, which were repaid in full in January 2025.
We also maintain other credit arrangements, as described in Note 6 in Item 8 of this Annual Report on Form 10-K.
Access to Capital and Credit Ratings
−Removed: We intend to fund short-term and long-term obligations as they mature through cash on hand, including the proceeds from the recently completed sale of our BPS business, future cash flows from operations, or by issuing additional debt, which could include commercial paper.
+Added: We intend to fund short-term and long-term obligations as they mature through cash on hand, including the proceeds from the recently completed sale of our Kidney Care business, future cash flows from operations, or by issuing additional debt, which could include commercial paper.
We had $1.76 billion of cash and cash equivalents as of December 31, 2024, with adequate cash available to meet operating requirements in each jurisdiction in which we operate.
We invest our excess cash in money market and other funds and diversify the concentration of cash among different financial institutions.
−Removed: As of December 31, 2023, we had $13.80 billion of long-term debt and finance lease obligations, including current maturities, and no short-term debt.
−Removed: During the fourth quarter of 2023, we used a portion of the approximately $3.70 billion of net after-tax cash proceeds from the BPS divestiture to repay $2.80 billion of short- and long-term indebtedness and we expect to use substantially all of the remaining net after-tax proceeds to continue to repay indebtedness through the first half of 2024.
−Removed: Subject to market conditions, we regularly evaluate opportunities with respect to our capital structure.
+Added: As of December 31, 2024, we had $13.13 billion of long-term debt and finance lease obligations, including current maturities, and short-term debt.
+Added: As of February 21, 2025, we repaid $3.13 billion of short- and long-term indebtedness primarily with the net after-tax cash proceeds from the sale of our Kidney Care business, and we expect to use substantially all of the remaining net after-tax proceeds to continue to repay indebtedness through the second quarter of 2025.
+Added: Subject to market conditions, we regularly evaluate opportunities with respect to our capital structure (including with respect to the potential refinancing of our outstanding indebtedness).
Our ability to generate cash flows from operations, issue debt, including commercial paper, or enter into other financing arrangements on acceptable terms could be adversely affected if there is a material decline in the demand for our products or in the solvency of our customers or suppliers, deterioration in our key financial ratios or credit ratings or other significantly unfavorable changes in conditions.
−Removed: However, we believe we have sufficient financial flexibility to issue debt, enter into other financing arrangements and attract long-term capital on acceptable terms to support our growth objectives and reduce our post-Hillrom acquisition debt levels as we take actions consistent with our capital allocation priorities.
+Added: However, we believe we have sufficient financial flexibility to issue debt, enter into other financing arrangements and attract long-term capital on acceptable terms to support our growth objectives and further reduce our debt levels as we take actions consistent with our capital allocation priorities.
Our credit ratings at December 31, 2024 were as follows:
−Removed: Standard & Poor’s Fitch Moody’s
−Removed: Senior debt BBB BBB Baa2
−Removed: Short-term debt A2 F2 P2
−Removed: Outlook Negative Rating Watch Negative Stable
−Removed: In January 2024, Fitch revised our senior debt credit rating from BBB to BBB-, our senior debt credit rating outlook rating from rating watch negative to stable and our short-term debt credit rating from F2 to F3.
+Added: Standard & Poor’s Moody’s
+Added: Senior debt BBB Baa2
+Added: Short-term debt A2 P2
+Added: Outlook Negative Stable
+Added: In May 2024, our contract with Fitch expired.
+Added: In June 2024, Fitch affirmed and withdrew ratings and coverage on us.
+Added: As a result they no longer maintain ratings on our senior debt or our short-term debt.
Contractual Obligations
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The actual timing of payments could differ from our estimates.
−Removed: We contributed $47 million to our defined benefit pension plans in 2023 and 2022.
+Added: We contributed $46 million and $27 million to our defined benefit pension plans in 2024 and 2023, respectively.
The timing of funding in future periods is uncertain and is dependent on future movements in interest rates, investment returns, changes in laws and regulations, and other variables.
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Also, upon resolution of uncertainties, we may incur charges in excess of presently established liabilities for certain matters (such as contractual indemnifications).
−Removed: For a discussion of our significant off-balance sheet arrangements, refer to Note 16 in Item 8 of this Annual Report on Form 10-K for information regarding receivable transactions, and Note 3 and Note 8 in Item 8 of this Annual Report on Form 10-K for information regarding joint development and commercialization arrangements, indemnifications and legal contingencies.
+Added: For a discussion of our significant off-balance sheet arrangements, refer to Note 3 and Note 8 in Item 8 of this Annual Report on Form 10-K for information regarding joint development and commercialization arrangements, indemnifications and legal contingencies.
FINANCIAL INSTRUMENT MARKET RISK
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Currency Risk
−Removed: We are primarily exposed to foreign exchange risk with respect to revenues generated outside of the United States denominated in the Euro, British Pound, Chinese Renminbi, Korean Won, Australian Dollar, Canadian Dollar, Japanese Yen, Colombian Peso, Brazilian Real, Mexican Peso, Indian Rupee and Swedish Krona.
+Added: We are primarily exposed to foreign exchange risk with respect to revenues generated outside of the United States denominated in the Euro, British Pound, Australian Dollar, Canadian Dollar, Chinese Renminbi, Japanese Yen, Mexican Peso, 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.
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Recently issued accounting standards not yet adopted
−Removed: In November 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-07, Segment Reporting (Topic 280):
−Removed: Improvements to Reportable Segment Disclosures, which requires enhanced disclosures about segment expenses on an annual and interim basis.
−Removed: This standard is effective for our annual consolidated financial statements for the year ending December 31, 2024 and for interim periods beginning in 2025.
−Removed: We are currently evaluating the impact of this standard on our consolidated financial statements.
+Added: In November 2024, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40):
+Added: Disaggregation of Income Statement Expenses, which requires disaggregated disclosure of certain expenses on an interim and annual basis in the notes to the financial statements.
+Added: This standard is effective for annual consolidated financial statements for the year ending December 31, 2027 and for interim periods beginning in 2028.
+Added: We are currently evaluating the impact of this new standard on our consolidated financial statements.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):
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We are currently evaluating the impact of this standard on our consolidated financial statements.
−Removed: In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement of Equity Securities Subject to Contractual Sales Restrictions, which (1) clarifies the guidance in Topic 820 on the fair value measurement of an equity security that is subject to contractual restrictions that prohibit the sale of an equity security and (2) requires specific disclosures related to such an equity security.
−Removed: The standard is effective for our annual consolidated financial statements for the year ending December 31, 2024 and for interim periods beginning in 2025.
−Removed: The impact of the adoption of this ASU is not expected to have a material effect on our consolidated financial statements.
CRITICAL ACCOUNTING POLICIES
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These reserves are based on estimates of the amounts earned or to be claimed on the related sales.
−Removed: Our estimates take into consideration historical experience, current contractual and statutory requirements, specific known market events and trends,
−Removed: industry data, and forecasted customer buying and payment patterns.
+Added: Our 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.
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and Puerto Rico employees.
−Removed: This assumption will increase to 6.75% in 2024.
+Added: This assumption will remain the same in 2025.
This assumption is not applicable to our OPEB plan because it is not funded.
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foreign tax credit carryforwards, management expects to be able to realize some, but not all, of the U.S.
−Removed: foreign tax credit deferred
−Removed: tax assets up to its recurring and non-recurring foreign inclusions.
+Added: foreign tax credit deferred tax assets up to its recurring and non-recurring foreign inclusions.
Therefore, a valuation allowance of $131 million and $130 million was recognized with respect to the foreign tax credit carryforwards as of December 31, 2024 and 2023, respectively.
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GAAP) of acquired assets and liabilities in a business combination.
−Removed: Goodwill is not amortized but is subject to an impairment review annually and whenever indicators of impairment exist.
+Added: Management performs an impairment test in the fourth quarter of each year, or whenever events or changes in circumstances indicate that the fair value of the reporting unit is more likely than not below its carrying amount.
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.
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In a quantitative goodwill impairment test, the fair values of our reporting units are generally determined based on a discounted cash flow model (an income approach) and earnings multiples (a market approach) based on the guideline public company method.
−Removed: Significant assumptions used in reporting unit fair value measurements generally include forecasted cash flows, discount rates, terminal growth rates and earnings multiples.
+Added: Significant assumptions used in reporting unit fair value measurements generally include revenue growth rates, forecasted EBITDA margins, discount rates, terminal growth rates and earnings multiples.
The discounted cash flow models used to determine the fair values of our reporting units during 2024 reflected our most recent cash flow projections, discount rates ranging from 9.0% to 9.5% and terminal growth rates ranging from 3.0% to 3.25%.
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Our operating and reportable segments were changed in the third quarter of 2023 to align with our new operating model:
−Removed: Medical Products and Therapies, Healthcare Systems and Technologies (formerly referred to as our Hillrom segment), Pharmaceuticals and Kidney Care.
−Removed: As a result of this segment change, we reallocated the goodwill from our previous Americas, EMEA and APAC segments to the reporting units within our new Medical Products and Therapies, Pharmaceuticals and Kidney Care segments based on the relative fair values of those reporting units.
+Added: Medical Products & Therapies, Healthcare Systems & Technologies (formerly referred to as our Hillrom segment) and Pharmaceuticals.
+Added: As a result of this segment change, we reallocated the goodwill from our previous Americas, EMEA and APAC segments to the reporting units within our new Medical Products & Therapies and Pharmaceuticals segments based on the relative fair values of those reporting units.
We performed impairment tests both before and after the reporting unit change and determined that no goodwill impairment had occurred.
−Removed: Upon our segment change in the third quarter of 2023, we initially identified three reporting units within our new Kidney Care segment:
−Removed: PD, HD and Acute Therapies.
−Removed: In connection with the ongoing activities related to the proposed separation of our Kidney Care segment, that business completed an organizational realignment during the fourth quarter of 2023.
−Removed: As a result of that organizational realignment within our Kidney Care segment, the previous PD and HD reporting units were combined into a single Chronic Therapies reporting unit.
−Removed: We performed impairment tests of the Kidney Care reporting units, both before and after the combination of PD and HD into Chronic Therapies, and determined that no goodwill impairment had occurred.
−Removed: In connection with our November 1, 2023 annual goodwill impairment tests, we determined that no goodwill impairments had occurred.
−Removed: The fair values of the Front Line Care reporting unit within our Healthcare Systems and Technologies segment and the Chronic Therapies reporting unit within our Kidney Care segment exceeded their carrying values by approximately 5% and 6%, respectively.
−Removed: We are continuing to closely monitor the performance of those reporting units, and if there is a significant adverse change in our outlook for those businesses in the future, a goodwill impairment could arise at that time.
−Removed: As of December 31, 2023, the carrying amounts of goodwill for our Front Line Care and Chronic Therapies reporting units were $2.42 billion and $444 million, respectively.
+Added: In connection with our annual goodwill impairment assessment in the fourth quarter of 2024, we recorded a $425 million goodwill impairment related to our Front Line Care reporting unit within our Healthcare Systems & Technologies segment.
+Added: The reduction in value was primarily due to lower forecasted operating results and a lower terminal growth rate utilized in valuing this reporting unit which contributed to reduced expected future cash flows, as well as lower earnings multiples.
+Added: The fair value of the Front Line Care reporting unit was determined based on a discounted cash flow model (an income approach) and earnings multiples (a market approach) based on the guideline public company method.
+Added: Significant assumptions used in the determination of the fair values of our reporting units generally include revenue growth rates, forecasted EBITDA margins, discount rates, terminal growth rates and earnings multiples.
+Added: The discounted cash flow model used to determine the fair value of our Front Line Care reporting unit reflected our most recent cash flow projections, a discount rate of 9.5% and a terminal growth rate of 3.25%.
+Added: In order to evaluate the sensitivity of the fair value calculations used in the Front Line Care reporting unit goodwill impairment test, we applied a hypothetical 5% decrease to the fair value and compared that hypothetical value to the underlying asset carrying value.
+Added: The application of a hypothetical 5% decrease in fair value would result in an additional impairment of approximately $200 million.
+Added: As of December 31, 2024, the carrying amount of goodwill for our Front Line Care reporting unit was $1.99 billion.
+Added: No goodwill impairments were recorded for our remaining reporting units in connection with our annual goodwill impairment tests because the fair values of those reporting units exceeded their carrying amounts.
We acquired Hillrom on December 13, 2021 and recognized $6.83 billion of goodwill and $6.03 billion of other intangible assets, including $1.91 billion of indefinite-lived intangible assets, in connection with that acquisition.
−Removed: In the second half of 2022, we recognized $2.81 of goodwill impairments related to the reporting units within our Hillrom segment (currently referred to as out Healthcare Systems and Technologies segment).
−Removed: As discussed below,
−Removed: we also recognized impairments of indefinite-lived intangible assets related to that business, consisting primarily of trade names.
+Added: In the second half of 2022, we recognized $2.81 of goodwill impairments related to the reporting units within our Hillrom segment (currently referred to as out Healthcare Systems & Technologies segment).
+Added: As discussed below, we also recognized impairments of indefinite-lived intangible assets related to that business, consisting primarily of trade names.
Other Long-Lived Assets
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Significant assumptions used in valuations of indefinite-lived intangible assets include the forecasted cash flows, discount rates, the assessment of the asset’s life cycle, the stage in completion (for acquired IPR&D intangible assets), royalty rates, terminal growth rates and contributory asset charges.
−Removed: The relief from royalty models used in the determination of the fair values of our trade name intangible assets during 2023 reflected our most recent revenue projections, a discount rate of 9%, royalty rates ranging from 4% to 5% and terminal growth rates ranging from 3.0% to 3.5%.
+Added: The relief from royalty models used in the determination of the fair values of our trade name intangible assets during 2024 reflected our most recent revenue projections, a discount rate of 9%, a royalty rate of 5% and a terminal growth rate of 3.0%.
Each of these factors and assumptions can significantly affect the value of the intangible asset.
−Removed: As a result of an update to our long-term branding strategy, we reclassified two trade name intangible assets with carrying amounts of $870 million and $21 million from indefinite-lived intangible assets to amortizing intangible assets during the fourth quarter of 2023.
−Removed: The estimated useful lives assigned to those assets were 15 years and 5 years, respectively, and we recognized $10 million of amortization expense on those intangible assets from the date of reclassification through December 31, 2023.
−Removed: We performed impairment tests of those intangible assets at the time of the reclassification and determined that no impairment had occurred.
+Added: We tested our indefinite-lived intangible trade name intangible asset for impairment during the fourth quarter of 2024 and determined that no impairment had occurred.
+Added: In connection with our annual IPR&D impairment assessment in the fourth quarter of 2024, we recognized a pre-tax impairment charge of $50 million to reduce the carrying amount of an IPR&D asset to its fair value.
+Added: The reduction in value was primarily due to lower forecasted revenues and margins which contributed to reduced expected future cash flows.
+Added: The intangible asset impairment charge is classified within research and development expenses in the accompanying consolidated statements of income (loss) for the year ended December 31, 2024.
+Added: The fair value of the IPR&D asset was determined using the multi-period excess earnings method.
+Added: Significant assumptions used in the determination of the fair value of the IPR&D asset included forecasted cash flows and the discount rate.
+Added: The multi-period excess earnings model used in our determination of the fair value of the IPR&D asset reflected our most recent cash flow projections and a discount rate of 11%.
The total carrying amount of our indefinite-lived intangible assets was $787 million as of December 31, 2024, comprised of a trade name intangible asset and IPR&D.
−Removed: We tested our indefinite-lived intangible assets for impairment during the fourth quarter of 2023 and determined that no impairment had occurred.
+Added: During the fourth quarter of 2023, as a result of an update to our long-term branding strategy, we reclassified two trade name intangible assets with carrying amounts of $870 million and $21 million from indefinite-lived intangible assets to amortizing intangible assets.
+Added: The estimated useful lives assigned to those assets were 15 years and 5 years, respectively.
+Added: We performed impairment tests of those intangible assets at the time of the reclassification and determined that no impairment had occurred.
Intangible Assets with Definite Lives and Property, Plant and Equipment
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However, the portion of an impairment loss allocated to an individual long-lived asset within an asset group cannot reduce the carrying amount of that asset below its fair value if its fair value is determinable without undue cost and effort.
−Removed: Our manufacturing facility in Opelika, Alabama was one of three Baxter manufacturing facilities that produced dialyzers used in hemodialysis (HD) treatments.
−Removed: The current competitive environment has increased the global supply of those products and, in connection with our initiatives to streamline our manufacturing footprint and improve our profitability, we made the decision in the second quarter of 2023 to cease production of dialyzers at the Opelika facility near the end of 2023.
−Removed: As a result of our decision to cease dialyzer production at this manufacturing facility, we performed a trigger-based recoverability assessment of its long-lived assets, which consist of a building
−Removed: and manufacturing equipment, including specialized equipment used in the production of dialyzers.
−Removed: The carrying amount of that asset group exceeded the estimated undiscounted cash flows expected to be generated, and we recognized an impairment charge of $243 million, classified within cost of sales in the accompanying consolidated statements of income (loss), during the year ended December 31, 2023 to reduce the carrying amounts to their estimated fair values.
−Removed: The fair values of the building and manufacturing equipment tested for impairment during the second quarter of 2023 were determined based on transaction prices of comparable assets.
−Removed: Significant assumptions used in the determination of the fair values included the identification of representative comparable assets.
−Removed: As discussed above, we identified new reporting units as a result of our segment change in the third quarter of 2023 and performed fair value measurements of our reporting units to reallocate goodwill to the new reporting units based on their relative fair values and to assess those reporting units for impairment.
−Removed: The HD business within our Kidney Care segment was initially identified as one of the new reporting units at that time.
−Removed: Based on the estimated fair value of our HD business, we allocated no goodwill to it.
−Removed: Additionally, we determined that a triggering event was present to review the carrying amounts of long-lived assets within the HD business, which include four manufacturing facilities that primarily manufacture HD products, HD equipment leased to customers under operating leases and developed technology intangible assets, for potential impairment.
−Removed: In connection with that evaluation, we determined that the carrying amount of the asset group represented by our HD business, which is the lowest level for which identifiable cash flows are largely independent of other assets and liabilities, exceeded its forecasted undiscounted cash flows.
−Removed: We then measured the excess of the carrying amount of that asset group over its fair value and allocated the resulting impairment to its long-lived assets, limiting the impairments of individual assets within the group to amounts that would not result in their carrying amounts being written down below their fair values.
−Removed: As a result, we recognized $267 million of long-lived asset impairment charges, comprised of (i) a $190 million impairment charge related to certain manufacturing equipment, operating lease right-of-use assets and HD equipment leased to customers and (ii) a $77 million impairment charge related to developed technology intangible assets.
−Removed: The fair value of the HD asset group was based on a discounted cash flow model (an income approach).
−Removed: Significant assumptions used in the determination of its fair value include forecasted cash flows, discount rates and terminal growth rates.
−Removed: The discounted cash flow model used to determine the fair value of the HD asset group during the third quarter 2023 reflected our most recent cash flow projections, a discount rate of 8% and a terminal growth rate of 1.5%.
−Removed: We also measured the fair values of individual assets within that asset group to ensure that the allocation of the asset group’s impairment to the long-lived assets within that group would not reduce the carrying amount of any individual asset below its fair value.
−Removed: The fair values of the buildings within that asset group were determined based on a cost approach.
−Removed: Significant assumptions used in the determination of those fair values included replacement costs of assets with a similar age and condition.
−Removed: The fair values of manufacturing equipment and HD equipment leased to customers within that group were determined based on transaction prices of comparable assets.
−Removed: Significant assumptions used in the determination of those fair values included the identification of representative comparable assets.
−Removed: The fair value of the right-of-use asset within that group was determined based on market rents and discount rates.
During the third quarter of 2022, we recognized pre-tax impairment charges of $332 million to reduce the carrying amounts of certain indefinite-lived intangible assets, which primarily related to the Hillrom and Welch Allyn trade names acquired in the Hillrom acquisition, to their estimated fair values.
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Use of the words “may,” “will,” “would,” “could,” “should,” “believes,” “estimates,” “projects,” “potential,” “expects,” “plans,” “seeks,” “intends,” “evaluates,” “pursues,” “anticipates,” “continues,” “designs,” “impacts,” “affects,” “forecasts,” “target,” “outlook,” “initiative,” “objective,” “designed,” “priorities,” “goal,” or the negative of those words or other similar expressions may identify forward-looking statements, although not all forward-looking statements contain such words.
−Removed: These forward-looking statements include statements with respect to the proposed separation of our Kidney Care business and other portfolio management activities we may undertake in the future, the costs and timing associated with strategic initiatives including the proposed separation, the viability and accuracy of anticipated benefits of our strategic actions, accounting estimates and assumptions (including with respect to goodwill and other intangible asset impairments), global economic conditions, litigation-related matters, future regulatory filings (or the withdrawal or resubmission of any pending submissions) and our R&D pipeline (including anticipated product approvals or clearances), sales from new product offerings, credit exposure to foreign governments, the adequacy of cash flows and credit facilities, potential developments with respect to credit ratings, investment of foreign earnings, estimates of liabilities including those related to uncertain tax positions, contingent payments, future pension plan contributions, costs, discount rates and rates of return, our exposure to financial market volatility and foreign currency, interest rate and credit risks, our net interest expense, the impact of inflation on our business, the impact of competition, future sales growth, business development activities, cost saving initiatives, future capital and R&D expenditures, future debt issuances and refinancings, the adequacy of tax provisions and reserves, the effective income tax rate and all other statements that do not relate to historical facts.
+Added: These forward-looking statements may include statements with respect to the anticipated benefits of our recent strategic actions, our ability to successfully integrate acquisitions, the expected growth rates for our segments, accounting estimates and assumptions (including with respect to goodwill and other intangible asset impairments), global economic conditions, litigation-related matters, future
+Added: regulatory filings (or the withdrawal or resubmission of any pending submissions) and our R&D pipeline (including anticipated product approvals or clearances), sales from new product offerings, credit exposure to foreign governments, the adequacy of cash flows and credit facilities, potential developments with respect to credit ratings, investment of foreign earnings, estimates of liabilities including those related to uncertain tax positions, contingent payments, future pension plan contributions, costs, discount rates and rates of return, our exposure to financial market volatility and foreign currency, interest rate and credit risks, our net interest expense, the impact of inflation on our business, the impact of any significant new tariffs or changes in trade policies and treaties, the impact of competition, future sales growth, business development activities, cost saving initiatives, future capital and R&D expenditures, future debt issuances and refinancings, the adequacy of tax provisions and reserves, the effective income tax rate, the impacts of severe weather events (including Hurricane Helene) and all other statements that do not relate to historical facts.
These forward-looking statements are based on certain assumptions and analyses made in light of our experience and perception of historical trends, current conditions, and expected future developments as well as other factors that we believe are appropriate in the circumstances.
While these statements represent our judgment on what the future may hold, and we believe these judgments are reasonable, these statements are not guarantees of any events or financial results.
−Removed: Whether actual future results and developments will conform to expectations and
−Removed: predictions is subject to a number of risks and uncertainties, including the following factors, many of which are beyond our control:
−Removed: • our ability to execute and complete strategic initiatives, asset dispositions and other transactions and development activities, including the proposed separation of our Kidney Care business, our plans to simplify our manufacturing footprint and the timing for such transactions, the ability to satisfy any applicable conditions and the expected proceeds, consideration and benefits;
−Removed: • failure to accurately forecast or achieve our short-and long-term financial performance and goals (including with respect to our strategic initiatives and other actions) and related impacts on our liquidity;
−Removed: • our ability to execute on our capital allocation plans, including our debt repayment plans, the timing and amount of any dividends, share repurchases and divestiture proceeds and the capital structure of the public company that we expect to form as a result of the proposed spinoff of our Kidney Care business (and the resulting capital structure for the remaining company);
−Removed: • our ability to successfully integrate acquisitions;
−Removed: • the impact of global economic conditions (including, among other things, inflation levels, interest rates, financial market volatility, banking crises, the potential for a recession, the war in Ukraine, the conflict in the Middle East (including recent attacks on merchant ships in the Red Sea), tensions between China and Taiwan and the potential for escalation of these conflicts, the related economic sanctions being imposed globally in response to the conflicts and potential trade wars and global public health crises, pandemics and epidemics, such as the COVID-19 pandemic, or the anticipation of any of the foregoing, on our operations and our employees, customers, suppliers and foreign governments in countries in which we operate;
−Removed: • downgrades to our credit ratings or ratings outlooks, and the impact on our funding costs and liquidity;
+Added: Whether actual future results and developments will conform to expectations and predictions is subject to a number of risks and uncertainties, including the following factors, many of which are beyond our control:
+Added: • our ability to achieve the intended benefits of our recent strategic actions, including the sale of our Kidney Care business, and cost saving initiatives;
+Added: • our ability to successfully integrate acquisitions, including the acquisition of Hillrom, and the related impact on our organization structure, senior leadership, culture, functional alignment, outsourcing and other areas, our management of resulting related personnel capacity constraints and potential institutional knowledge loss, and our ability to achieve anticipated performance or financial targets and maintain our reputation following integration;
+Added: • the impact of global economic conditions (including, among other things, changes in taxation, tariffs, trade policies and treaties, sanctions, embargos, export control restrictions, inflation levels and interest rates, financial market volatility, banking crises, the potential for a recession, the war in Ukraine, the conflict in the Middle East and other geopolitical events and the potential for escalation of these conflicts, the related economic sanctions being imposed globally in response to the conflicts and potential trade wars, global public health crises, pandemics and epidemics, or the anticipation of any of the foregoing, on our operations and our employees, customers, suppliers, and foreign governments in countries in which we operate;
+Added: • failure to accurately forecast or achieve our short-and long-term financial performance and goals, market and category growth rates, and related impacts on our liquidity;
+Added: • our ability to execute on our capital allocation plans, including our debt repayment plans, the timing and amount of any dividends, share repurchases and divestiture proceeds;
+Added: • downgrades to our credit ratings or ratings outlooks, or withdrawals by rating agencies from rating us and our indebtedness, and the related impact on our funding costs and liquidity;
+Added: • fluctuations in foreign exchange and interest rates;
+Added: • the impact of any goodwill, intangible asset, or other long-lived asset impairments on our operating results;
+Added: • our ability to finance and develop new products or services, or enhancements thereto, on commercially acceptable terms or at all;
• product development risks, including satisfactory clinical performance and obtaining and maintaining required regulatory approvals (including as a result of evolving regulatory requirements or the withdrawal or resubmission of any pending applications), the ability to manufacture at appropriate scale, and the general unpredictability associated with the product development cycle;
−Removed: • product quality or patient safety issues leading to product recalls, withdrawals, launch delays, warning letters, import bans, sanctions, seizures, litigation or declining sales, including the focus on evaluating product portfolios for the potential presence or formation of nitrosamines;
+Added: • demand and market acceptance risks for, and competitive pressures related to, new and existing products and services, challenges with accurately predicting changing customer preferences and future expenditures and inventory levels and with being able to monetize new and existing products and services (and to sustain any related price increases), the impact of those products and services on quality and patient safety concerns, and the need for ongoing training and support for our products and services;
+Added: • the impact of competitive products and pricing, including generic competition, drug reimportation, and disruptive technologies;
+Added: • regulatory agency inspections, product quality or patient safety issues leading to product recalls, withdrawals, labeling changes, launch delays, warning letters, import bans, denial of import certifications, sanctions, seizures, litigation, or declining sales, including the focus on evaluating product portfolios for the potential presence or formation of nitrosamines;
• future actions of, or failures to act or delays in acting by FDA, the European Medicines Agency, or any other regulatory body or government authority (including the SEC, DOJ, or the Attorney General of any state) that could delay, limit or suspend product development, manufacturing or sale or result in seizures, recalls, injunctions, monetary sanctions or criminal or civil liabilities;
−Removed: • demand and market acceptance risks for, and competitive pressures related to, new and existing products, challenges with accurately predicting changing customer preferences and future expenditures and inventory levels and with being able to monetize new and existing products and services, the impact of those products on quality and patient safety concerns and the need for ongoing training and support for our products;
−Removed: • breaches, including by cyber-attack, data leakage, unauthorized access or theft, or failures of or vulnerabilities in, our information technology systems or products;
−Removed: • the continuity, availability and pricing of acceptable raw materials and component parts, our ability to pass some or all of these costs to our customers through price increases or otherwise, and the related continuity of our manufacturing and distribution and those of our suppliers;
−Removed: • inability to create additional production capacity in a timely manner or the occurrence of other manufacturing, sterilization or supply difficulties, including as a result of natural disaster, war, terrorism, global public health crises and epidemics/pandemics, regulatory actions or otherwise;
−Removed: • our ability to finance and develop new products or enhancements on commercially acceptable terms or at all;
−Removed: • loss of key employees, the occurrence of labor disruptions (including as a result of labor disagreements under bargaining agreements or national trade union agreements or disputes with works councils) or the inability to attract, develop, retain and engage employees
• failures with respect to our quality, compliance or ethics programs;
+Added: • loss of key employees, including senior management, the occurrence of labor disruptions (including as a result of labor disagreements under bargaining agreements or national trade union agreements or disputes with works councils) or the inability to attract, develop, retain and engage employees;
+Added: • inability to create additional production capacity in a timely manner or the occurrence of other manufacturing, sterilization, or supply difficulties, including as a result of natural disaster (such as Hurricane Helene), war, terrorism, global public health crises and epidemics/pandemics, regulatory actions, or otherwise;
• future actions of third parties, including third-party payors and our customers and distributors (including GPOs and IDNs);
+Added: • the continuity, availability, and pricing of acceptable raw materials and component parts, our ability to pass some or all of these costs to our customers through price increases or otherwise, and the related continuity of our manufacturing and distribution and those of our suppliers;
+Added: • breaches, including by cyber-attack, data leakage, unauthorized access or theft, or failures of or vulnerabilities in, our information technology systems, or products;
+Added: • ability to effectively develop, integrate or deploy artificial intelligence, machine learning and other emerging technologies into our products, services and operations in a manner that is compliant with existing and emerging regulations;
+Added: • the impact of physical effects of climate change, severe storms (including Hurricane Helene) and storm-related events, including our ability to resume production at our North Cove facility to pre-hurricane levels and to complete the remediation;
• changes to legislation and regulation and other governmental pressures in the United States and globally, including the cost of compliance and potential penalties for purported noncompliance thereof, including new or amended laws, rules and regulations as well as the impact of healthcare reform and its implementation, suspension, repeal, replacement, amendment, modification and other similar actions undertaken by the United States or foreign governments, including with respect to pricing, reimbursement, taxation and rebate policies;
−Removed: • the outcome of pending or future litigation;
−Removed: • the impact of competitive products and pricing, including generic competition, drug reimportation and disruptive technologies;
+Added: • ability meet evolving and varied corporate responsibility expectations of our stakeholders, including compliance with new and emerging sustainability regulations;
• global regulatory, trade, and tax policies, including with respect to climate change and other sustainability matters;
• the ability to protect or enforce our patents or other proprietary rights (including trademarks, copyrights, trade secrets, and know-how) or where the patents of third parties prevent or restrict our manufacture, sale, or use of affected products or technology;
−Removed: • the impact of any goodwill, intangible asset or other long-lived asset impairments on our operating results;
−Removed: • fluctuations in foreign exchange and interest rates;
• any changes in law concerning the taxation of income (whether with respect to current or future tax reform);
• actions by tax authorities in connection with ongoing tax audits;
+Added: • the outcome of pending or future litigation;
• other factors discussed elsewhere in this Annual Report on Form 10-K, including those factors described in Item 1A.
5 unchanged sentences
Further, other unknown or unpredictable factors could also have material adverse effects on future results.
−Removed: Any forward-looking statement in this information statement speaks only as of the date on which it is made.
+Added: Any forward-looking statement in this Annual Report on Form 10-K speaks only as of the date on which it is made.
Except as required by law, we assume no obligation, and expressly disclaim any obligation, to update or revise any forward-looking statements, whether as a result of new information or future events.
3 unchanged sentences
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.