What changed in this filing

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Item 1. Financial Statements

2026-07-30 compared with 2026-04-30 · 276 added, 160 removed, 684 unchanged (39% of the section changed)

1 unchanged sentence

Baxter International Inc.

Condensed Consolidated Balance Sheets (unaudited)

Condensed Consolidated Balance Sheets

(in millions, except share information)

2026 December 31,

2026 (unaudited) December 31,

Current assets:

36 unchanged sentences

Three months ended

June 30, Six months ended

2026 2025 2026 2025

Net sales $ 2,960 $ 2,810 $ 5,661 $ 5,435

31 unchanged sentences

Three months ended

June 30, Six months ended

2026 2025 2026 2025

Income (loss) from continuing operations $ 135 $ 122 $ 118 $ 186

Other comprehensive income (loss) from continuing operations, net of tax:

Currency translation adjustments, net of tax expense (benefit) of $ 15 and $ 6 for the three months ended March 31, 2026 and 2025, respectively.

Currency translation adjustments, net of tax expense (benefit) of ($ 7 ) and $( 18 ) for the three months ended June 30, 2026 and 2025, respectively, and $ 8 and $( 12 ) for six months ended June 30, 2026 and 2025, respectively.

( 20 ) 204 ( 72 ) 135

Pension and other postretirement benefits, net of tax expense (benefit) of $ 1 and $( 4 ) for the three months ended March 31, 2026 and 2025, respectively.

Hedging activities, net of tax expense (benefit) of zero and $( 1 ) for the three months ended March 31, 2026 and 2025, respectively.

Pension and other postretirement benefits, net of tax expense (benefit) of zero and $( 3 ) for the three months ended June 30, 2026 and 2025, respectively, and $ 1 and $( 7 ) for six months ended June 30, 2026 and 2025, respectively.

Hedging activities, net of tax expense (benefit) of $ 1 and zero for the three months ended June 30, 2026 and 2025, respectively, and $ 1 and $( 1 ) for six months ended June 30, 2026 and 2025, respectively.

1 ( 2 ) 2 ( 3 )

Total other comprehensive income (loss) from continuing operations, net of tax ( 17 ) 196 ( 65 ) 138

2 unchanged sentences

Other comprehensive income (loss) from discontinued operations

Currency translation adjustments, net of tax expense (benefit) of zero for the three months ended March 31, 2026 and 2025, respectively.

Pension and other postretirement benefits, net of tax expense (benefit) of zero and $( 3 ) for the three months ended March 31, 2026 and 2025, respectively.

Currency translation adjustments, net of tax expense (benefit) of zero for the three months ended June 30, 2026 and 2025, and zero for six months ended June 30, 2026 and 2025.

Pension and other postretirement benefits, net of tax expense (benefit) of zero for the three months ended June 30, 2026 and 2025, and zero and $( 3 ) for six months ended June 30, 2026 and 2025, respectively.

Total other comprehensive income (loss) from discontinued operations — — — 126

8 unchanged sentences

(in millions)

For the three months ended March 31, 2026

For the three months ended June 30, 2026

Baxter International Inc.

4 unchanged sentences

income (loss) Total Baxter stockholders' equity Noncontrolling interests Total equity

Balance as of April 1, 2026 683 $ 683 167 $ ( 10,737 ) $ 6,214 $ 13,685 $ ( 3,802 ) $ 6,043 $ ( 27 ) $ 6,016

Net income (loss) — — — — — 126 — 126 — 126

Other comprehensive income (loss) — — — — — — ( 17 ) ( 17 ) — ( 17 )

Stock issued under employee benefit plans and other — — ( 1 ) 32 27 — — 59 — 59

Dividends declared on common stock — — — — — ( 5 ) — ( 5 ) — ( 5 )

Balance as of June 30, 2026

683 $ 683 166 $ ( 10,705 ) $ 6,241 $ 13,806 $ ( 3,819 ) $ 6,206 $ ( 27 ) $ 6,179

For the six months ended June 30, 2026

Baxter International Inc.

stockholders' equity

Common stock shares Common stock Common stock shares in treasury Common stock in treasury Additional contributed capital Retained earnings Accumulated other comprehensive income (loss) Total Baxter stockholders' equity Noncontrolling interests Total equity

Balance as of January 1, 2026 683 $ 683 169 $ ( 10,873 ) $ 6,368 $ 13,705 $ ( 3,754 ) $ 6,129 $ ( 27 ) $ 6,102

3 unchanged sentences

Dividends declared on common stock — — — — — ( 10 ) — ( 10 ) — ( 10 )

Balance as of March 31, 2026

Balance as of June 30, 2026

683 $ 683 166 $ ( 10,705 ) $ 6,241 $ 13,806 $ ( 3,819 ) $ 6,206 $ ( 27 ) $ 6,179

For the three months ended March 31, 2025

For the three months ended June 30, 2025

Baxter International Inc.

1 unchanged sentence

Balance as of April 1, 2025 683 $ 683 170 $ ( 10,937 ) $ 6,309 $ 14,968 $ ( 3,942 ) $ 7,081 $ ( 27 ) $ 7,054

Net income (loss) — — — — — 91 — 91 — 91

Other comprehensive income (loss) — — — — — — 196 196 — 196

Stock issued under employee benefit plans and other — — — 22 19 — — 41 — 41

Dividends declared on common stock — — — — — ( 89 ) — ( 89 ) — ( 89 )

Balance as of June 30, 2025 683 $ 683 170 $ ( 10,915 ) $ 6,328 $ 14,970 $ ( 3,746 ) $ 7,320 $ ( 27 ) $ 7,293

For the six months ended June 30, 2025

Baxter International Inc.

stockholders' equity

Balance as of January 1, 2025 683 $ 683 173 $ ( 11,059 ) $ 6,421 $ 14,929 $ ( 4,010 ) $ 6,964 $ 60 $ 7,024

5 unchanged sentences

Disposition of noncontrolling interest associated with the Kidney Care separation — — — — — — — — ( 87 ) ( 87 )

Balance as of March 31, 2025 683 $ 683 170 $ ( 10,937 ) $ 6,309 $ 14,968 $ ( 3,942 ) $ 7,081 $ ( 27 ) $ 7,054

Balance as of June 30, 2025

683 $ 683 170 $ ( 10,915 ) $ 6,328 $ 14,970 $ ( 3,746 ) $ 7,320 $ ( 27 ) $ 7,293

The accompanying notes are an integral part of these condensed consolidated financial statements.

2 unchanged sentences

(in millions)

Three Months Ended March 31,

Six Months Ended June 30,

Cash flows from operations

20 unchanged sentences

Capital expenditures ( 253 ) ( 262 )

Acquisitions of developed technology and investments ( 3 ) ( 9 )

Other investing activities, net 6 32

7 unchanged sentences

Proceeds from stock issued under employee benefit plans 13 16

Payments of contingent liabilities ( 31 ) —

Other financing activities, net ( 14 ) ( 25 )

2 unchanged sentences

Increase (decrease) in cash, cash equivalents and restricted cash 188 ( 726 )

Cash, cash equivalents and restricted cash at beginning of period (1)

Cash, cash equivalents and restricted cash at end of period (1)

Less cash and cash equivalents of discontinued operations — —

Cash, cash equivalents and restricted cash of continuing operations $ 2,019 $ 2,296

(1) The following table provides a reconciliation of cash, cash equivalents and restricted cash shown above to the amounts reported within the condensed consolidated balance sheet as of March 31, 2026, December 31, 2025, and March 31, 2025 (in millions):

March 31, 2026 December 31, 2025 March 31, 2025

Cash, cash equivalents and restricted cash of continuing operations at beginning of period (1)

Cash, cash equivalents and restricted cash of continuing operations at end of period (1)

(1) The following table provides a reconciliation of cash, cash equivalents and restricted cash shown above to the amounts reported within the condensed consolidated balance sheet as of June 30, 2026, December 31, 2025, and June 30, 2025 (in millions):

June 30, 2026 December 31, 2025 June 30, 2025

Cash and cash equivalents $ 2,150 $ 1,966 $ 1,686

6 unchanged sentences

The unaudited interim condensed consolidated financial statements of Baxter International Inc.

and its subsidiaries (we, our or Baxter) have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (SEC) for interim financial reporting.

and its subsidiaries (we, our or Baxter) have been prepared pursuant to the rules and regulations of the U.S.

Securities and Exchange Commission (SEC) for interim financial reporting.

Accordingly, certain information and note disclosures normally included in financial statements prepared in accordance with U.S.

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The results of operations for the current interim period are not necessarily indicative of the results of operations to be expected for the full year.

Prior period segment disclosures have been recast to reflect the current period segment structure and presentation.

Refer to Notes 4 and 16 for further information regarding these reclassifications.

DISCONTINUED OPERATIONS

3 unchanged sentences

On January 31, 2025, we completed the sale of our Kidney Care business to certain affiliates of Carlyle Group Inc.

That business, which is known as Vantive Health LLC (Vantive) is comprised of our former Kidney Care segment and provides chronic and acute dialysis therapies and services, including peritoneal dialysis, hemodialysis, continuous renal replacement therapies, and other organ support therapies.

That business, which is known as Vantive Health LLC (Vantive) is comprised of our former Kidney Care business and provides chronic and acute dialysis therapies and services, including peritoneal dialysis, hemodialysis, continuous renal replacement therapies, and other organ support therapies.

Upon closing of the sale of the Kidney Care business, pursuant to the Equity Purchase Agreement (EPA), Baxter and Vantive entered into several agreements, including a Manufacturing and Supply Agreement (Kidney Care MSA), a Transition Services Agreement (Kidney Care TSA), a Long Term Master Services Agreement, a Distribution Agreement and certain other arrangements providing for short-term supply of saline products, and an Intellectual Property Agreement.

6 unchanged sentences

In accordance with the EPA, we have agreed to indemnify Vantive for certain items, including taxes imposed on or with respect to the Kidney Care divested entities, for pre-closing tax periods.

The net indemnification liability as of March 31, 2026 was $ 53 million.

The net indemnification liability as of June 30, 2026 was $ 43 million.

Further, in accordance with the EPA, Baxter recorded a contingent liability for payments to reimburse Vantive for qualifying capital expenditures of $ 133 million over a period of three years post sale.

The contingent liability as of March 31, 2026 was $ 83 million based on payments made to date.

The contingent liability as of June 30, 2026 was $ 52 million based on payments made to date and classified as current liabilities within our condensed consolidated balance sheet.

Certain of the business guarantees originally entered by us on behalf of the Kidney Care business were not released prior to the completion of the sale and remain outstanding.

These legacy guarantees primarily relate to certain leases, performance contracts and ones to support regulatory requirements of the Kidney Care business.

As of March 31,

2026, the total amount of Kidney Care business guarantees retained by us was approximately $ 24 million.

As of June 30, 2026, the total amount of Kidney Care business guarantees retained by us was approximately $ 28 million.

Under terms of the EPA, Carlyle has agreed to indemnify us for any cost or expense, or payments made in the future under these arrangements.

Results of Discontinued Operations

The following tables summarize the major classes of line items included in income (loss) from discontinued operations, net of tax, for the three months ended March 31, 2025:

Three Months Ended March 31,

The following tables summarize the major classes of line items included in income (loss) from discontinued operations, net of tax, for the three and six months ended June 30, 2025:

Three Months Ended June 30, Six Months Ended June 30,

(in millions) 2025 2025

4 unchanged sentences

Research and development expenses — 16

Goodwill impairment —

Other operating income, net —

Operating income (loss) — 14

7 unchanged sentences

Net income (loss) attributable to Baxter stockholders included in discontinued operations $ ( 31 ) $ 31

For the three and six months ended June 30, 2026, activity in discontinued operations primarily related to tax indemnifications.

SUPPLEMENTAL FINANCIAL INFORMATION

Allowance for Doubtful Accounts

The following table is a summary of the changes in our allowance for doubtful accounts for the three months ended March 31, 2026 and 2025.

Three Months Ended March 31,

The following table is a summary of the changes in our allowance for doubtful accounts for the three and six months ended June 30, 2026 and 2025.

Three Months Ended June 30, Six Months Ended June 30,

(in millions) 2026 2025 2026 2025

Balance at beginning of period $ 67 $ 66 $ 63 $ 71

Charged to costs and expenses 5 ( 4 )

Charged (released) to costs and expenses ( 6 ) 4 ( 1 ) —

Write-offs ( 5 ) ( 1 ) ( 6 ) ( 3 )

1 unchanged sentence

Balance at end of period $ 56 $ 71 $ 56 $ 71

(in millions) March 31,

(in millions) June 30,

2026 December 31,

3 unchanged sentences

Inventories $ 2,259 $ 2,232

Other Current Assets

As of June 30, 2026, we have recorded International Emergency Economic Powers Act (IEEPA) tariff refunds receivable of approximately $ 65 million which are probable and are presented in prepaid expenses and other current assets in our condensed consolidated balance sheet.

Property, Plant and Equipment, Net

(in millions) March 31,

(in millions) June 30,

2026 December 31,

3 unchanged sentences

Interest Expense, Net

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(in millions) 2026 2025 2026 2025

3 unchanged sentences

Other (Income) Expense, Net

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(in millions) 2026 2025 2026 2025

6 unchanged sentences

Non-Cash Operating and Investing Activities

Right-of-use operating lease assets obtained in exchange for lease obligations for the three months ended March 31, 2026 and 2025 were $ 20 million and $ 5 million, respectively.

Purchases of property, plant and equipment included in accounts payable as of March 31, 2026 and 2025 were $ 54 million and $ 39 million, respectively.

Right-of-use operating lease assets obtained in exchange for lease obligations for the six months ended June 30, 2026 and 2025 were $ 23 million and $ 12 million, respectively.

Purchases of property, plant and equipment included in accounts payable as of June 30, 2026 and 2025 were $ 40 million and $ 39 million, respectively.

GOODWILL AND OTHER INTANGIBLE ASSETS, NET

2 unchanged sentences

Balance as of December 31, 2025 $ 1,265 $ 3,087 $ 577 $ 4,929

Reallocation of goodwill 569 — ( 569 ) —

Currency translation ( 29 ) ( 6 ) ( 8 ) ( 43 )

Balance as of March 31, 2026 $ 1,248 $ 3,082 $ 569 $ 4,899

Balance as of June 30, 2026 $ 1,805 $ 3,081 $ — $ 4,886

Change in Reportable Segments

As discussed in Note 16, in the second quarter of 2026, we implemented a new operating model to better align decision-making, cost structure, and execution across our businesses.

Our business is now comprised of two reportable segments under this new operating model:

Medical Products & Therapies and Healthcare Systems & Technologies.

Previously, our reportable segments were comprised of three segments:

Medical Products & Therapies, Healthcare Systems & Technologies, and Pharmaceuticals.

Our former Pharmaceuticals segment is now reported in our Medical Products & Therapies segment.

As a result of this segment change, we reallocated the goodwill from our previous Pharmaceuticals segment to a reporting unit within our Medical Products & Therapies segment.

We also performed goodwill impairment assessments of both the legacy reporting units and new reporting units of our segments before and after the segment change and did not identify any goodwill impairments.

Other intangible assets, net

6 unchanged sentences

Other intangible assets, net $ 2,298 774 781 19 390 107 4,369

March 31, 2026

June 30, 2026

Gross other intangible assets $ 3,391 $ 3,189 $ 953 $ 91 $ 390 $ 107 $ 8,121

1 unchanged sentence

Other intangible assets, net $ 2,190 $ 621 $ 746 $ 19 $ 390 $ 107 $ 4,073

Intangible asset amortization expense was $ 146 million and $ 155 million for the three months ended March 31, 2026 and 2025, respectively.

Intangible asset amortization expense was $ 145 million and $ 151 million for the three months ended June 30, 2026 and 2025, respectively, and $ 291 million and $ 306 million for the six months ended June 30, 2026 and 2025, respectively.

FINANCING ARRANGEMENTS

6 unchanged sentences

Borrowings in Euros are subject to a sublimit of $ 300 million.

We may, at our option, seek to increase the aggregate commitment under the Multicurrency Revolver by up to $ 1.10 billion, which would result in a maximum aggregate commitment of up to $ 3.30 billion.

There were no borrowings outstanding under the Multicurrency Revolver as of March 31, 2026 or December 31, 2025.

We may, at our option, seek to increase the aggregate commitment under the Multicurrency Revolver by up to $ 1.10 billion, which would result in a maximum

aggregate commitment of up to $ 3.30 billion.

There were no borrowings outstanding under the Multicurrency Revolver as of June 30, 2026 or December 31, 2025.

Our commercial paper borrowing arrangements require us to maintain undrawn borrowing capacity under our Multicurrency Revolver for an amount at least equal to our outstanding commercial paper borrowings.

Based on our covenant calculations as of March 31, 2026, we had capacity to draw $ 1.62 billion under the Multicurrency Revolver.

As of March 31, 2026, we were in compliance with the financial covenant in the Multicurrency Revolver.

Based on our covenant calculations as of June 30, 2026, we had capacity to draw $ 1.41 billion under the Multicurrency Revolver.

As of June 30, 2026, we were in compliance with the financial covenant in the Multicurrency Revolver.

The non-performance of any financial institution supporting the Multicurrency Revolver would reduce the capacity thereunder by such institution's respective commitment.

2 unchanged sentences

We record a liability when a loss is considered probable and the amount can be reasonably estimated.

If the reasonable estimate of a probable loss is a range, and no amount within the range is a better

estimate than any other amount, the minimum amount in the range is accrued.

If the reasonable estimate of a probable loss is a range, and no amount within the range is a better estimate than any other amount, the minimum amount in the range is accrued.

If a loss is not probable or a probable loss cannot be reasonably estimated, no liability is recorded.

1 unchanged sentence

The amount of ultimate loss may differ from these estimates and could have a material adverse effect on our results of operations and cash flows.

As of March 31, 2026 and December 31, 2025, our total recorded reserves with respect to legal and environmental matters were $ 44 million and $ 47 million, respectively.

As of June 30, 2026 and December 31, 2025, our total recorded reserves with respect to legal and environmental matters were $ 39 million and $ 47 million, respectively.

We have established reserves for certain of the matters discussed below.

1 unchanged sentence

In addition to the matters described below, we remain subject to the risk of future administrative and legal actions.

With respect to governmental and regulatory matters, these actions may lead to additional product recalls, injunctions, and other restrictions on our operations (including our ability to launch new products) and monetary sanctions, including significant civil or criminal penalties.

With respect to intellectual property, we may be exposed to significant litigation concerning the scope of our and others’ rights.

3 unchanged sentences

Food and Drug Administration (FDA) classified these voluntary corrections as Class I recalls.

We have implemented certain corrections related to these recalls, and are developing additional corrections related to these recalls, some of which may require regulatory clearance or approval.

We have implemented certain corrections related to these recalls and have identified additional corrections to address these recalls, some of which may require regulatory clearance or approval, and are in the early stages of verification testing.

In July 2025, we elected to temporarily stop distributing and installing the Novum LVP in the U.S.

3 unchanged sentences

In the first quarter of 2026, we adjusted certain estimates associated with these Novum LVP corrections that were not material to our condensed consolidated financial statements;

no such adjustments were recorded in the second quarter of 2026.

Environmental

4 unchanged sentences

Separate from these Superfund cases noted above, we are involved in ongoing environmental remediations associated with historic operations at certain of our facilities.

As of March 31, 2026 and December 31, 2025, our environmental reserves, which are measured on an undiscounted basis, were $ 25 million and $ 29 million, respectively.

As of June 30, 2026 and December 31, 2025, our environmental reserves, which are measured on an undiscounted basis, were $ 25 million and $ 29 million,

respectively.

After considering these reserves, the outcome of these matters is not expected to have a material adverse effect on our financial position or results of operations.

1 unchanged sentence

Since December 2023, lawsuits have been filed against us in the Circuit Court of Cook County, Illinois by plaintiffs alleging injuries as a result of exposure to ethylene oxide used by several companies, including historic use by us for sterilization at our facility in Round Lake, Illinois.

Thirty-eight complaints are currently filed and pending.

The parties have reached an agreement in principle to resolve these filed cases, for an amount not material to Baxter.

In October 2022, the DOJ issued a Civil Investigative Demand (CID) addressed to Hillrom, requesting documents and information related to compliance with the False Claims Act and the Anti-Kickback Statute.

The parties resolved these filed cases, for an amount not material to Baxter.

In June 2026, the court dismissed with prejudice all pending ethylene oxide matters as to Baxter.

In October 2022, the Department of Justice (DOJ) issued a Civil Investigative Demand (CID) addressed to Hillrom, requesting documents and information related to compliance with the False Claims Act and the Anti-Kickback Statute.

In October 2024, the DOJ issued a subpoena (the 2024 Subpoena), pursuant to 18 U.S.C.

8 unchanged sentences

Hillrom filed an answer to the complaint in January 2022 and filed a motion challenging certain aspects of plaintiff's case in May 2022, which was denied in January 2024, subject to further discovery.

Fact discovery is ongoing.

Fact and expert discovery are ongoing.

In June 2024, Reading Hospital filed a putative class action complaint against Hill-Rom Holdings, Inc., Hill-Rom Company, Inc., and Hill-Rom Services, Inc.

5 unchanged sentences

After briefing and a hearing, the court granted the motion and dismissed the case with prejudice in September 2025.

Reading Hospital filed a Notice of Appeal of the dismissal in October 2025;

appellate briefing is underway.

Reading Hospital appealed, and appellate briefing is complete.

In October 2025, we and certain of our current and former officers and employees were named in a class action complaint captioned Electrical Workers Pension Fund, Local 103, I.B.E.W.

3 unchanged sentences

The plaintiff alleges that we and certain former and current officers and employees violated federal securities laws by making allegedly false and misleading statements and failing to disclose material facts relating to Novum LVP.

In December 2025, an additional class action complaint was filed against us and certain of our current and former officers and employees in the United States District Court for the Northern District of Illinois, captioned City of Hallansdale Beach Police Officers' and Firefighters' Personnel Retirement Trust v.

In December 2025, an additional class action complaint was filed against us and certain of our current and former officers and employees in the United States District Court for the Northern District of Illinois, captioned City of Hallandale Beach Police Officers' and Firefighters' Personnel Retirement Trust v.

Baxter International Inc., et al.

The additional complaint included substantially the same allegations for the expanded period from February 23, 2022, through October 29, 2025.

Plaintiffs filed their respective motions to be appointed lead plaintiff in December 2025, which are pending before the court.

In June 2026, the court appointed a lead plaintiff and co-lead counsel.

In November 2025, certain of our current and former directors, officers and employees were named in two derivative complaints in the United States District Court for the Northern District of Illinois, captioned Ryan Wood v.

4 unchanged sentences

The two derivative complaints were consolidated before the court in January 2026.

By order of the court, the consolidated matter is currently stayed.

In addition, we have received stockholder requests for inspections of our books and records in connection with statements made about Novum LVP.

3 unchanged sentences

Cash Dividends

Cash dividends declared per share for the three months ended March 31, 2026 and 2025 were $ 0.01 and $ 0.17 , respectively.

Cash dividends declared per share for the three months ended June 30, 2026 and 2025 were $ 0.01 and $ 0.17 , respectively, and for the six months ended June 30, 2026 and 2025 were $ 0.02 and $ 0.34 , respectively.

Stock Repurchase Programs

In July 2012, our Board of Directors authorized a share repurchase program and the related authorization amount was subsequently increased a number of times.

During the first three months of 2026 and 2025 we did not repurchase any shares under this authority.

We had $ 1.30 billion remaining available under the authorization as of March 31, 2026.

During the first six months of 2026 and 2025 we did not repurchase any shares under this authority.

We had $ 1.30 billion remaining available under the authorization as of June 30, 2026.

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

employee benefit (OPEB) plans, certain gains and losses from hedging activities and unrealized gains and losses on available-for-sale debt securities.

The following table is a net-of-tax summary of the changes in accumulated other comprehensive income (loss) (AOCI) by component for the three months ended March 31, 2026 and 2025.

Comprehensive income (loss) represents net earnings plus items that are recorded directly to shareholders’ equity, such as cumulative translation adjustments (CTA), certain gains and losses from pension and other postretirement employee benefit (OPEB) plans, certain gains and losses from hedging activities and unrealized gains and losses on available-for-sale debt securities.

The following table is a net-of-tax summary of the changes in accumulated other comprehensive income (loss) (AOCI) by component for the six months ended June 30, 2026 and 2025.

Gains (losses)

5 unchanged sentences

Net other comprehensive income (loss) ( 72 ) 5 2 — ( 65 )

Balance as of March 31, 2026 $ ( 3,185 ) $ ( 511 ) $ ( 109 ) $ 3 $ ( 3,802 )

Balance as of June 30, 2026 $ ( 3,205 ) $ ( 509 ) $ ( 108 ) $ 3 $ ( 3,819 )

Gains (losses)

5 unchanged sentences

Net other comprehensive income (loss) 272 ( 5 ) ( 3 ) — 264

Balance as of March 31, 2025 $ ( 3,361 ) $ ( 474 ) $ ( 110 ) $ 3 $ ( 3,942 )

Balance as of June 30, 2025 $ ( 3,158 ) $ ( 480 ) $ ( 111 ) $ 3 $ ( 3,746 )

(a) See table below for details about these reclassifications.

The following is a summary of the amounts reclassified from AOCI to net income (loss) during the three months ended March 31, 2026 and 2025.

The following is a summary of the amounts reclassified from AOCI to net income (loss) during the three and six months ended June 30, 2026 and 2025.

Amounts reclassified from AOCI (a)

(in millions) Three months ended March 31, 2026 Three months ended March 31, 2025 Location of impact in income statement

(in millions) Three Months Ended June 30, 2026 Six Months Ended June 30, 2026 Location of impact in income statement

Pension and OPEB items

Amortization of net losses and prior service costs or credits $ ( 2 ) $ ( 5 ) Other (income) expense, net

Tax effect — 1 Income tax expense (benefit)

$ ( 2 ) $ ( 4 ) Net of tax

Gains (losses) on hedging activities

Interest rate contracts ( 2 ) ( 3 ) Interest expense, net

Tax effect 1 1 Income tax expense (benefit)

$ ( 1 ) $ ( 2 ) Net of tax

Total reclassifications for the period $ ( 3 ) $ ( 6 ) Total net of tax

Amounts reclassified from AOCI (a)

(in millions) Three Months Ended June 30, 2025 Six Months Ended June 30, 2025 Location of impact in income statement

Reclassification of cumulative translation loss to earnings from Kidney Care separation $ — $ ( 126 ) Income from discontinued operations, net of tax

4 unchanged sentences

Pension settlement from Kidney Care separation — 14 Income from discontinued operations, net of tax

$ ( 3 ) $ 17 Total before tax

Tax effect 1 ( 1 ) Income tax expense (benefit)

Tax effect ( 1 ) ( 2 ) Income tax expense

Tax effect on pension settlement from Kidney Care separation — ( 3 ) Income from discontinued operations, net of tax

36 unchanged sentences

Revenue is recognized over time when we are creating or enhancing an asset that the customer controls as the asset is created or enhanced or our performance does not create an asset with an alternative use and we have an enforceable right to payment for performance completed.

As of March 31, 2026, we had $ 8.87 billion of transaction price allocated to remaining performance obligations related to executed contracts with an original duration of more than one year, which are primarily included in the Medical Products & Therapies segment.

As of June 30, 2026, we had $ 7.91 billion of transaction price allocated to remaining performance obligations related to executed contracts with an original duration of more than one year, which are included in the Medical Products & Therapies segment.

Some contracts in the United States included in this amount contain index-dependent price increases, which are not known at this time.

6 unchanged sentences

The amount of variable consideration included in the net sales price is limited to the amount for which it is probable that a significant reversal in revenue will not occur when the related uncertainty is resolved.

Revenue recognized during the three months ended March 31, 2026 and 2025 related to performance obligations satisfied in prior periods was no t material.

Revenue recognized during the three and six months ended June 30, 2026 and 2025 related to performance obligations satisfied in prior periods was no t material.

Additionally, our contracts with customers often include promises to transfer multiple products and services to a customer.

2 unchanged sentences

The timing of revenue recognition, billings and cash collections results in the recognition of trade accounts receivable, unbilled receivables, contract assets and customer advances, and deposits (contract liabilities) on our condensed consolidated balance sheets.

Net trade accounts receivable was $ 1.54 billion and $ 1.70 billion as of March 31, 2026 and December 31, 2025, respectively.

Net trade accounts receivable was $ 1.63 billion and $ 1.70 billion as of June 30, 2026 and December 31, 2025, respectively.

For contract manufacturing arrangements, revenue is primarily recognized throughout the production cycle, which typically lasts up to 90 days, resulting in the recognition of contract assets until the related services are completed and the customers are billed.

4 unchanged sentences

The following table summarizes our contract assets:

(in millions) March 31,

(in millions) June 30,

2026 December 31,

6 unchanged sentences

We expect to satisfy the majority of the remaining performance obligations and recognize revenue related to installation and service contracts within the next 12 months with most of the non-current performance obligations satisfied within 24 months.

The following table summarizes contract liability activity for the three months ended March 31, 2026 and 2025.

The following table summarizes contract liability activity for the six months ended June 30, 2026 and 2025.

The contract liability balance represents the transaction price allocated to the remaining performance obligations.

Three Months Ended March 31,

Six Months Ended June 30,

(in millions) 2026

4 unchanged sentences

Balance at end of period $ 166 $ 178

For the three months ended March 31, 2026 and 2025, $ 46 million and $ 34 million of revenue was recognized that was included in contract liabilities as of December 31, 2025 and 2024, respectively.

For the six months ended June 30, 2026 and 2025, $ 90 million and $ 57 million of revenue was recognized that was included in contract liabilities as of December 31, 2025 and 2024, respectively.

The following table summarizes the classification of contract assets and contract liabilities as reported in the condensed consolidated balance sheets:

(in millions) March 31,

(in millions) June 30,

2026 December 31,

12 unchanged sentences

We allocate revenue between equipment leases and medical products based on their standalone selling prices.

The components of lease revenue for the three months ended March 31, 2026 and 2025 were:

Three Months Ended March 31,

The components of lease revenue for the three and six months ended June 30, 2026 and 2025 were:

Three Months Ended June 30, Six Months Ended June 30,

(in millions) 2026 2025 2026 2025

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Total lease revenue $ 93 $ 95 $ 193 $ 201

Our net investment in sales-type leases was $ 30 million as of March 31, 2026, of which $ 5 million originated in 2022 and prior, $ 5 million in 2023, $ 9 million in 2024, $ 8 million in 2025, and $ 3 million in 2026.

Our net investment in sales-type leases was $ 24 million as of June 30, 2026, of which $ 5 million originated in 2022 and prior, $ 4 million in 2023, $ 6 million in 2024, $ 3 million in 2025, and $ 6 million in 2026.

BUSINESS OPTIMIZATION CHARGES

We are continuing to undertake actions to transform our cost structure and enhance operational efficiency.

In recent years, these efforts have included restructuring the organization into verticalized segments, optimizing the manufacturing footprint, R&D operations and supply chain network, employing disciplined cost management, and centralizing and streamlining certain support functions, some of which are still ongoing.

We currently expect to incur additional pre-tax cash costs, primarily related to the implementation of business optimization programs, of approximately $ 2 million through the completion of certain initiatives that are currently underway.

In recent years, these efforts have included restructuring the organization into verticalized segments, optimizing the manufacturing footprint, research and development (R&D) operations and supply chain network, employing disciplined cost management, and centralizing and streamlining certain support functions, some of which are still ongoing.

We currently expect to incur additional pre-tax cash costs, primarily related to the implementation of business optimization programs, that are not material to our condensed consolidated financial statements, through the completion of certain initiatives that are currently underway.

We continue to pursue cost savings initiatives, including those intended to mitigate a portion of the dis-synergies that arose as a result of the sale of our Kidney Care business, and we expect to incur additional restructuring charges and costs in future periods to implement business optimization programs.

For segment reporting, business optimization charges are unallocated expenses.

During the three months ended March 31, 2026 and 2025, we recorded the following charges related to business optimization programs.

Three Months Ended March 31,

During the three and six months ended June 30, 2026 and 2025, we recorded the following charges related to business optimization programs.

Three Months Ended June 30, Six Months Ended June 30,

(in millions) 2026 2025 2026 2025

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Total business optimization charges $ 7 $ 17 $ 75 $ 62

1 Costs to implement business optimization programs for the three months ended March 31, 2026 and 2025, respectively, consisted primarily of external consulting and transition costs, including employee compensation and related costs.

1 Costs to implement business optimization programs for the three and six months ended June 30, 2026 and 2025, respectively, consisted primarily of external consulting and transition costs, including employee compensation and related costs.

These costs were primarily included within cost of sales and SG&A expense .

During the three months ended March 31, 2026 and 2025, we recorded the following restructuring charges.

Three months ended March 31, 2026

During the three and six months ended June 30, 2026 and 2025, we recorded the following restructuring charges.

Three months ended June 30, 2026

(in millions) COGS SG&A R&D Total

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Contract termination and other costs 1 — 1 2

Total restructuring charges $ 2 $ ( 1 ) $ 1 $ 2

Three months ended June 30, 2025

(in millions) COGS SG&A Total

Employee termination costs $ ( 1 ) $ 6 $ 5

Contract termination and other costs 2 2 4

Asset write offs 3 2 5

Total restructuring charges $ 4 $ 10 $ 14

Three months ended March 31, 2025

Six months ended June 30, 2026

(in millions) COGS SG&A R&D Total

Employee termination costs $ 11 $ 34 $ 13 $ 58

Contract termination and other costs 2 — 2 4

Asset write offs — 1 — 1

Total restructuring charges $ 13 $ 35 $ 15 $ 63

For the three months ended March 31, 2026 and 2025, $ 58 million and $ 25 million, respectively, of the restructuring charges reflected in the table above, consisting of employee termination costs, were related to initiatives to reduce our cost structure following the sale of our Kidney Care segment.

Six months ended June 30, 2025

(in millions) COGS SG&A R&D Total

Employee termination costs $ 11 $ 19 $ 1 $ 31

Contract termination and other costs 2 2 — 4

Asset write offs 4 19 — 23

Total restructuring charges $ 17 $ 40 $ 1 $ 58

For the six months ended June 30, 2026, $ 58 million, and for the three and six months ended June 30, 2025, $ 6 million and $ 31 million, respectively, of the restructuring charges reflected in the table above, consisting of employee termination costs, were related to initiatives to reduce our cost structure following the sale of our Kidney Care business.

The following table summarizes activity in the liability related to our restructuring initiatives.

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Currency translation ( 1 )

Liability balance as of March 31, 2026 $ 144

Substantially all of our restructuring liabilities as of March 31, 2026 relate to employee termination costs, with the remaining liabilities attributable to contract termination costs.

Liability balance as of June 30, 2026 $ 98

Substantially all of our restructuring liabilities as of June 30, 2026 relate to employee termination costs, with the remaining liabilities attributable to contract termination costs.

Substantially all of the cash payments for those liabilities are expected to be disbursed by the end of 2027.

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The following is a summary of net periodic benefit cost relating to our pension and OPEB plans.

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(in millions) 2026 2025 2026 2025

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Net periodic OPEB cost (income) $ 1 $ ( 2 ) $ 2 $ ( 4 )

Our effective income tax rate was 15 % and 8 % for the three months ended June 30, 2026 and 2025, respectively, and 22 % and ( 43 )% for the six months ended June 30, 2026 and 2025, respectively.

Our effective income tax rate can differ from the 21 % U.S.

federal statutory rate due to a number of factors, including foreign rate differences, tax incentives, non-deductible expenses, non-taxable income, increases or decreases in

valuation allowances, increases or decreases in liabilities for uncertain tax positions, and excess tax benefits or shortfalls on stock compensation awards.

For the three months ended March 31, 2026, the difference between our effective income tax rate and the U.S.

federal statutory rate was primarily driven by our near break-even pre-tax results and increases to our valuation allowance on U.S.

deferred tax assets.

The quarter also reflects income tax recorded related to tax shortfalls on stock compensation awards.

For the three months ended March 31, 2025, the difference between our effective income tax rate and the U.S.

federal statutory rate was primarily driven by our near break-even pre-tax income and a tax benefit driven by an entity classification election that we made for U.S.

federal statutory rate due to a number of factors, including foreign rate differences, tax incentives, non-deductible expenses, non-taxable income, increases or decreases in valuation allowances, increases or decreases in liabilities for uncertain tax positions, and excess tax benefits or shortfalls on stock compensation awards.

For the three months ended June 30, 2026, the difference between our effective income tax rate and the U.S.

federal statutory rate was primarily driven by global earnings mix, partially offset by increases to our valuation allowance on U.S.

deferred tax assets and tax shortfalls on stock compensation awards.

For the six months ended June 30, 2026, the difference between our effective income tax rate and the U.S.

federal statutory rate was primarily driven by global earnings mix, partially offset by increases to our valuation allowance on U.S.

deferred tax assets and tax shortfalls on stock compensation awards.

For the three months ended June 30, 2025, the difference between our effective income tax rate and the U.S.

federal statutory rate was primarily driven by our global earnings mix.

For the six months ended June 30, 2025, the difference between our effective income tax rate and the U.S.

federal statutory rate was primarily driven by a tax benefit driven by an entity classification election that we made for U.S.

tax purposes, which resulted in a capital loss.

We are currently under examination by the Internal Revenue Service (IRS) for transfer pricing matters related to transactions with our manufacturing operations in Costa Rica and Puerto Rico for the 2019 and 2020 tax years.

During the quarter, we received a Notice of Proposed Adjustment (NOPA) from the IRS covering the 2019 and 2020 tax years that is consistent with our existing and previously disclosed uncertain tax position reserves.

We did not record adjustments to the reserves in connection with the NOPA, other than interest that may be owed upon conclusion of the audit.

In the first quarter of 2026, we received a Notice of Proposed Adjustment (NOPA) from the Internal Revenue Service (IRS) for examination related to transfer pricing matters related to transactions with our manufacturing operations in Costa Rica and Puerto Rico for the 2019 and 2020 tax years.

In the second quarter of 2026, we settled the examination by the IRS related to these matters for amounts materially consistent with our existing and previously disclosed uncertain tax position reserves.

The previously disclosed uncertain tax position reserves for tax years 2021 through 2025 were not adjusted as a result of the aforementioned IRS settlement for 2019 and 2020 tax years.

EARNINGS PER SHARE

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The following table is a reconciliation of income (loss) from continuing operations to net income (loss) attributable to Baxter stockholders.

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(in millions) 2026 2025 2026 2025

Income (loss) from continuing operations $ 135 $ 122 $ 118 $ 186

Net income attributable to noncontrolling interests included in continuing operations — —

Net income attributable to noncontrolling interests — — — —

Income (loss) from continuing operations attributable to Baxter stockholders 135 122 118 186

Income (loss) from discontinued operations ( 9 ) ( 31 ) ( 7 ) 31

Net income attributable to noncontrolling interests included in discontinued operations — —

Income (loss) from discontinued operations attributable to Baxter stockholders 2 62

Net income (loss) attributable to Baxter stockholders $ 126 $ 91 $ 111 $ 217

The following table is a reconciliation of basic shares and diluted shares.

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(in millions) 2026 2025 2026 2025

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Diluted shares 518 514 517 514

Basic and diluted shares are the same for three months ended March 31, 2026 due to our loss from continuing operations attributable to Baxter stockholders.

The effect of dilutive securities includes unexercised stock options, unvested RSUs and contingently issuable shares related to granted PSUs.

The computation of diluted EPS excludes 25 million and 20 million shares issuable under equity awards for the three months ended March 31, 2026 and 2025, respectively, because their inclusion would have had an anti-dilutive effect on diluted EPS.

The computation of diluted EPS excludes 19 million shares issuable under equity awards for the three and six months ended June 30, 2026, respectively, and 20 million shares issuable under equity awards for the three and six months ended June 30, 2025, respectively, because their inclusion would have had an anti-dilutive effect on diluted EPS.

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

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Our hedging policy attempts to manage these risks to an acceptable level based on our judgment of the appropriate trade-off between risk, opportunity and costs.

We are primarily exposed to foreign exchange risk with respect to recognized assets and liabilities, forecasted transactions and net assets denominated in the Euro, Polish Zloty, Swedish Krona, Swiss Franc, Turkish Lira, Australian Dollar, Singapore Dollar, Korean Wan, Chinese Renminbi, and Canadian Dollar.

We are primarily exposed to foreign exchange risk with respect to recognized assets and liabilities, forecasted transactions and net assets denominated in the Euro, Swedish Krona, Polish Zloty, Chinese Renminbi, Turkish Lira, Swiss Franc, Australian Dollar, British Pound, Canadian Dollar and Singapore Dollar.

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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Cash flow hedges are classified in cost of sales and interest expense, net, and are primarily related to forecasted intra-company sales denominated in foreign currencies and forecasted interest payments on anticipated issuances of debt, respectively.

There were no foreign exchange contracts designated as cash flow hedges outstanding as of March 31, 2026 and December 31, 2025.

There were no outstanding interest rate contracts designated as cash flow hedges as of March 31, 2026 and December 31, 2025.

There were no foreign exchange contracts designated as cash flow hedges outstanding as of June 30, 2026 and December 31, 2025.

There were no outstanding interest rate contracts designated as cash flow hedges as of June 30, 2026 and December 31, 2025.

Fair Value Hed g es

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These instruments hedge our earnings from changes in the fair value of debt due to fluctuations in the designated benchmark interest rate.

There were no outstanding interest rate contracts designated as fair value hedges as of March 31, 2026 and December 31, 2025.

There were no outstanding interest rate contracts designated as fair value hedges as of June 30, 2026 and December 31, 2025.

Net Investment Hed g es

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We had designated these debt obligations as hedges of our net investment in our European operations and, as a result, mark to spot rate adjustments of the outstanding debt balances were previously recorded as a component of AOCI.

In March 2025, we dedesignated this

previously designated net investment hedge and concurrently entered into forward contracts to manage foreign exchange risk in earnings relating to these outstanding debt balances.

In March 2025, we dedesignated this previously designated net investment hedge and concurrently entered into forward contracts to manage foreign exchange risk in earnings relating to these outstanding debt balances.

These forward contracts matured in May 2025.

1 unchanged sentence

We have designated these debt obligations as hedges of our net investment in our European operations and, as a result, mark to spot rate adjustments on the outstanding debt balances are recorded as a component of AOCI.

As of March 31, 2026, we had an accumulated pre-tax unrealized translation gain in AOCI of $ 17 million related to the Euro-denominated senior notes.

As of June 30, 2026, we had an accumulated pre-tax unrealized translation gain in AOCI of $ 22 million related to the Euro-denominated senior notes.

Dedesignations

2 unchanged sentences

However, if it is probable that the hedged forecasted transactions will not occur, any gains or losses would be immediately reclassified from AOCI to earnings.

There were no cash flow hedge dedesignations in the first three months of 2026 or 2025 resulting from changes in our assessment of the probability that the hedged forecasted transactions would occur.

There were no cash flow hedge dedesignations in the first six months of 2026 or 2025 resulting from changes in our assessment of the probability that the hedged forecasted transactions would occur.

If we terminate a fair value hedge, an amount equal to the cumulative fair value adjustment to the hedged item at the date of termination is amortized to earnings over the remaining term of the hedged item.

There were no fair value hedges terminated during the first three months of 2026 or 2025.

There were no fair value hedges terminated during the first six months of 2026 or 2025.

If we remove a net investment hedge designation, any gain or loss recognized in AOCI is not reclassified to earnings until we sell, liquidate, or deconsolidate the foreign investments that were being hedged.

There were no net investment hedges terminated during the first three months of 2026.

There were no net investment hedges terminated during the first six months of 2026.

In March 2025, we dedesignated one of our net investment hedges as discussed in the "Net Investment Hedges" section above.

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These forward contracts matured in May 2025.

The total notional amount of undesignated derivative instruments was $ 187 million as of March 31, 2026 and $ 323 million as of December 31, 2025.

The total notional amount of undesignated derivative instruments was $ 204 million as of June 30, 2026 and $ 323 million as of December 31, 2025.

Gains and Losses on Hedging Instruments and Undesignated Derivative Instruments

The following tables summarize the gains and losses on our hedging instruments and the classification of those gains and losses within our condensed consolidated financial statements for the three months ended March 31, 2026 and 2025.

Gain (loss) recognized in OCI Location of gain (loss)

11 unchanged sentences

Total $ — $ 33

As of March 31, 2026, $ 4 million of deferred, net after-tax losses on derivative instruments included in AOCI are expected to be recognized in earnings during the next 12 months, coinciding with when the hedged items are expected to impact earnings.

The following tables summarize the gains and losses on our hedging instruments and the classification of those gains and losses within our consolidated financial statements for the six months ended June 30, 2026 and 2025.

Gain (loss) recognized in OCI Location of gain (loss)

in income statement Gain (loss) reclassified from AOCI into income

(in millions) 2026 2025 2026 2025

Cash flow hedges

Interest rate contracts $ — $ — Interest expense, net $ ( 3 ) $ ( 3 )

Foreign exchange contracts — ( 2 ) Cost of sales — 6

Net investment hedges 25 ( 127 ) Other (income) expense, net — —

Total $ 25 $ ( 129 ) $ ( 3 ) $ 3

Location of gain (loss) in income statement Gain (loss) recognized in income

(in millions) 2026 2025

Undesignated derivative instruments

Foreign exchange contracts Other (income) expense, net ( 4 ) 31

Total $ ( 4 ) $ 31

As of June 30, 2026, $ 4 million of deferred, net after-tax losses on derivative instruments included in AOCI are expected to be recognized in earnings during the next 12 months, coinciding with when the hedged items are expected to impact earnings.

Derivative Assets and Liabilities

The following table summarizes the classification and fair values of derivative instruments reported in the condensed consolidated balance sheet as of March 31, 2026.

Derivatives in liability positions

(in millions) Balance sheet location Fair value

The following table summarizes the classification and fair values of derivative instruments reported in the condensed consolidated balance sheet as of June 30, 2026.

Derivatives in asset positions Derivatives in liability positions

(in millions) Balance sheet location Fair value Balance sheet location Fair value

Derivative instruments designated as hedges

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Undesignated derivative instruments

Foreign exchange contracts Accrued expenses and other current liabilities 2

Foreign exchange contracts Prepaid expenses and other current assets 1 Accrued expenses and other current liabilities 3

Total derivative instruments $ 1 $ 813

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The following table provides information on our derivative positions as if they were presented on a net basis, allowing for the right of offset by counterparty.

March 31, 2026 December 31, 2025

June 30, 2026 December 31, 2025

(in millions) Asset Liability Asset Liability

5 unchanged sentences

in the carrying amount of the hedged item (a)

(in millions) Balance as of March 31, 2026 Balance as of December 31, 2025 Balance as of March 31, 2026 Balance as of December 31, 2025

(in millions) Balance as of June 30, 2026 Balance as of December 31, 2025 Balance as of June 30, 2026 Balance as of December 31, 2025

Long-term debt $ 98 $ 99 $ 1 $ 2

3 unchanged sentences

Basis of fair value measurement

(in millions) Balance as of March 31, 2026 Quoted prices in active markets for identical assets

(in millions) Balance as of June 30, 2026 Quoted prices in active markets for identical assets

(Level 1) Significant other

24 unchanged sentences

Total $ 61 $ — $ 1 $ 60

As of March 31, 2026 and December 31, 2025, cash and cash equivalents of $ 2.02 billion and $ 1.97 billion, respectively, included money market fund and other short-term funds of approximately $ 853 million and $ 832 million, respectively, that are considered Level 2 in the fair value hierarchy.

1 See Note 2 for additional information.

As of June 30, 2026 and December 31, 2025, cash and cash equivalents of $ 2.15 billion and $ 1.97 billion, respectively, included money market fund and other short-term funds of approximately $ 1.09 billion and $ 832 million, respectively, that are considered Level 2 in the fair value hierarchy.

For assets that are measured using quoted prices in active markets, the fair value is the published market price per unit multiplied by the number of units held, without consideration of transaction costs.

A majority of the derivatives entered into by us are valued using internal valuation techniques as no quoted market prices exist for such instruments.

A majority of the derivatives

entered into by us are valued using internal valuation techniques as no quoted market prices exist for such instruments.

The principal techniques used to value these instruments are discounted cash flow and Black-Scholes models.

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The following table is a reconciliation of recurring fair value measurements that use significant unobservable inputs (Level 3), which consist of indemnifications related to the Kidney Care separation, contingent payments related to acquisitions and available-for-sale debt securities.

Three Months Ended March 31,

Three Months Ended June 30,

(in millions) Indemnifications related to Kidney Care separation Contingent payments related to acquisitions Available-for-sale debt securities Indemnifications related to Kidney Care separation Contingent payments related to acquisitions Available-for-sale debt securities

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Additions — — — 19 — —

Change in fair value recognized in earnings — 3 — — — —

Payments ( 10 ) — — — — —

Fair value at end of period $ 43 $ 10 $ 1 $ 56 $ 12 $ 1

Six Months Ended June 30,

Fair value at beginning of period $ 53 $ 7 $ 1 $ — $ 12 $ 1

Additions — — — 56 — —

Change in fair value recognized in earnings — 3 — — — —

Payments ( 10 ) — — — — —

Fair value at end of period $ 43 $ 10 $ 1 $ 56 $ 12 $ 1

Financial Instruments Not Measured at Fair Value

In addition to the financial instruments that we are required to recognize at fair value in the condensed consolidated balance sheets, we have certain financial instruments that are recognized at amortized cost or some basis other than fair value.

For these financial instruments, the following table provides the values recognized in the condensed consolidated balance sheets and the estimated fair values as of March 31, 2026 and December 31, 2025.

For these financial instruments, the following table provides the values recognized in the condensed consolidated balance sheets and the estimated fair values as of June 30, 2026 and December 31, 2025.

Book values Fair values(a)

(in millions) 2026 2025 2026 2025

Current maturities of long-term debt and finance lease obligations 842 — 823 $ —

Long-term debt and finance lease obligations 8,621 9,436 7,749 8,714

Current maturities of long-term debt 840 — 828 $ —

Long-term debt 8,577 9,436 7,777 8,714

(a) These fair value amounts are classified as Level 2 within the fair value hierarchy as they are estimated based on observable inputs.

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Price is calculated using the stated terms of the respective debt instrument and yield curves commensurate with our credit risk.

The carrying values of other financial instruments not presented in the above table, such as accounts receivable and accounts payable, approximate their fair values due to the short-term maturities of most of those assets and liabilities.

The carrying values of other financial instruments not presented in the above table, such as accounts receivable, accounts payable and short-term debt, approximate their fair values due to the short-term maturities of most of those assets and liabilities.

Investments Without Readily Determinable Fair Values

The carrying values of equity investments without readily determinable fair values that we measure at cost, less impairment were $ 45 million and $ 50 million as of as of March 31, 2026 and December 31, 2025, respectively.

The carrying values of equity investments without readily determinable fair values that we measure at cost, less impairment were $ 45 million and $ 50 million as of as of June 30, 2026 and December 31, 2025, respectively.

When applicable, we also adjust the measurement of such equity investments for observable prices in orderly transactions for an identical or similar investment of the same issuer.

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SEGMENT INFORMATION

Our business is comprised of three segments:

In the second quarter of 2026, as part of our new operating model to better align decision-making, cost structure, and execution across our businesses, we have changed our reportable segments to reflect the way our chief operating decision maker (CODM), who has been identified as our President and Chief Executive Officer, allocates resources and assesses our performance.

Starting in the second quarter of 2026, our business is now comprised of two reportable segments under this new operating model:

Medical Products & Therapies and Healthcare Systems & Technologies.

Previously, our business was comprised of three segments:

Medical Products & Therapies, Healthcare Systems & Technologies, and Pharmaceuticals.

Our former Pharmaceuticals segment is now reported within the Infusion Therapies & Platforms division of the Medical Products & Therapies segment.

Additionally, sales of products and services provided directly through certain of our manufacturing facilities related to Infusion Therapies & Platforms that were previously reported in Other are now reported in our Infusion Therapies & Platforms division of the Medical Products & Therapies segment.

In addition, we updated our approach to our corporate cost allocations.

Certain shared corporate expenses will now remain unallocated, rather than being fully allocated to the segments (as they had been previously).

Prior period segment disclosures have been recast to reflect the new segment presentation.

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, specialty injectable pharmaceuticals, inhaled anesthesia, drug compounding and sales of products and services provided directly through certain of our manufacturing facilities.

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 devices, and advanced equipment for the surgical space, including operating room integration technologies, precision positioning devices, and other accessories.

The Pharmaceuticals segment includes sales of specialty injectable pharmaceuticals, inhaled anesthesia, and drug compounding.

Other sales not allocated to a segment primarily includes sales to Vantive, pursuant to the Kidney Care MSA, and sales of products and services provided directly through certain of our manufacturing facilities.

Other sales not allocated to a segment includes sales to Vantive, pursuant to the Kidney Care MSA.

Disaggregation of Net Sales

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and international disaggregated net sales.

Three Months Ended March 31,

Three Months Ended June 30,

(in millions) U.S.

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International Total

Infusion Therapies & Technologies

Infusion Therapies & Platforms

$ 769 $ 976 $ 1,745 $ 753 $ 896 $ 1,649

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587 214 801 562 205 767

Injectables & Anesthesia

Other 57 26 83 63 35 98

Total Baxter $ 1,595 $ 1,365 $ 2,960 $ 1,536 $ 1,274 $ 2,810

Six Months Ended June 30,

(in millions) U.S.

International Total U.S.

International Total

Infusion Therapies & Platforms

$ 1,480 $ 1,881 $ 3,361 $ 1,539 $ 1,700 $ 3,239

Drug Compounding — 320 320 — 246 246

Pharmaceuticals 180 441 621 195 386 581

Advanced Surgery

347 288 635 303 261 564

Medical Products & Therapies 1,827 2,169 3,996 1,842 1,961 3,803

Care & Connectivity Solutions

676 261 937 657 244 901

Front Line Care

424 145 569 423 147 570

Healthcare Systems & Technologies

1,100 406 1,506 1,080 391 1,471

Other 103 56 159 104 57 161

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Segment Operating Income

Our chief operating decision maker who has been identified as our President and Chief Executive Officer, reviews the financial information presented for purposes of evaluating the performance of our segments and to make resource allocation decisions.

Our CODM reviews the financial information presented for purposes of evaluating the performance of our segments and to make resource allocation decisions.

Segment operating income is the measure of segment profitability and represents income before income taxes, interest and other non-operating income or expense, unallocated corporate costs, intangible asset amortization, and other special items.

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Corporate costs, inclusive of global functional support costs, overhead costs and other shared costs that benefit our segments are allocated to those segments.

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.

Segment results include net sales, cost of sales, selling, general and administrative expenses, R&D expenses, corporate costs that had previously been allocated to our former Kidney Care segment which did not convey in the related sale, and other segment items which are directly allocated to each segment.

Billings by us under the Kidney

Care TSA are included in other segment items as further described in Note 2.

Corporate costs that do not benefit our segments are presented as unallocated corporate costs.

Segment results include net sales, cost of sales, selling, general and administrative expenses, R&D expenses, and other segment items which are directly allocated to each segment.

Billings by us under the Kidney Care TSA are

included in segment operating income.

The following table presents our segment information of net sales, significant expenses and operating income during the periods presented.

Three Months Ended March 31, 2026 Three Months Ended March 31, 2025

(in millions) Medical Products & Therapies Healthcare Systems & Technologies Pharmaceuticals Medical Products & Therapies Healthcare Systems & Technologies Pharmaceuticals

Three Months Ended June 30, 2026 Three Months Ended June 30, 2025

(in millions) Medical Products & Therapies Healthcare Systems & Technologies Medical Products & Therapies Healthcare Systems & Technologies

Net sales $ 2,076 $ 801 $ 1,945 $ 767

4 unchanged sentences

Segment operating income $ 400 $ 163 $ 444 $ 156

Six Months Ended June 30, 2026 Six Months Ended June 30, 2025

(in millions) Medical Products & Therapies Healthcare Systems & Technologies Medical Products & Therapies Healthcare Systems & Technologies

Net sales $ 3,996 $ 1,506 $ 3,803 $ 1,471

Cost of sales 2,568 787 2,256 729

Selling, general and administrative expenses 605 384 601 385

Research and development expenses 145 92 166 95

Other segment items ( 72 ) ( 19 ) ( 67 ) ( 16 )

Segment operating income $ 750 $ 262 $ 847 $ 278

The following table presents our reportable segment operating income and reconciliations of reportable segment operating income to income (loss) from continuing operations before income taxes.

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(in millions) 2026 2025 2026 2025

1 unchanged sentence

Healthcare Systems & Technologies 163 156 262 278

Pharmaceuticals 46 63

Total reportable segment operating income 563 600 1,012 1,125

Other 6 6 13 12

Unallocated corporate costs ( 148 ) ( 183 ) ( 307 ) ( 322 )

13 unchanged sentences

Additional financial information for our segments is as follows:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(in millions) 2026 2025 2026 2025

2 unchanged sentences

Healthcare Systems & Technologies 15 19 30 35

Pharmaceuticals 16 16

Total segment depreciation expense 87 99 173 184

Unallocated corporate depreciation expense 7 7 12 14

Total depreciation expense $ 94 $ 106 $ 185 $ 198

1 Depreciation expense related to Corporate property, plant and equipment has been fully allocated to our segments and those segment allocations are reflected in the depreciation amounts presented herein.

Our CODM does not receive asset information by reportable segment and, accordingly, we do not report that information for our segments.

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.

What changed 10-Q

Item 1. Financial Statements