Baxter International (BAX) Risk Factor Changes

•fluctuations in the results of our operations and general conditions in the economy, our market, and the markets served by our customers, including with respect to technological advances and evolving clinical practic…

The timing, declaration, amount, and payment of any future dividends fall within the discretion of our Board of Directors and will depend on many factors, including our available cash, estimated cash needs, earnings,…

Our Amended and Restated Bylaws (Bylaws) provide that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery in the State of Delaware (or, if no state court located in the State…

Our Amended and Restated Bylaws could limit our stockholders’ ability to choose their preferred judicial forum for disputes with us or our directors, officers, or employees.

With respect to audits by the applicable tax authorities, we regularly assess the likely outcomes of these audits in order to determine the appropriateness of our tax provision.

Our employees, consultants, parties to collaboration agreements and other business partners are generally subject to confidentiality or similar agreements to protect our confidential and proprietary information.

Patent and other proprietary rights are essential to our business.

We are party to a number of pending lawsuits, unfiled claims, settlement discussions, mediations, arbitrations and other disputes, some of which are set forth in Note 7 in Item 8 of this Annual Report on Form 10-K.

We are party to a number of pending lawsuits and other disputes which may adversely impact us.

As a global company, we are subject to global data privacy, AI, and cybersecurity laws, regulations and codes of conduct that apply to our businesses.

Increasing regulatory focus on, and expanding laws relating to, privacy, AI, and cybersecurity could impact our business and expose us to increased liability.

In addition, a substantial portion of our revenues is dependent on federal healthcare program reimbursement, and any disruptions in federal government operations, including a federal government shutdown or failure of…

The Healthcare Reform Act includes several provisions which impact our businesses in the U.S., including increased Medicaid rebates and an expansion of the 340B Drug Pricing Program, which provides certain qualified e…

Sales of our products are dependent, in part, on the availability of reimbursement by government agencies and healthcare programs, as well as insurance companies and other private payers.

If reimbursement or other payment for our current or future products is reduced or modified in the U.S.

Additionally, U.S.

We are also subject to environmental laws, which are becoming more stringent throughout the world.

are also focused on examining medical product and pharmaceutical companies’ sales and marketing activities, relationships with healthcare providers, and competitive practices generally.

We cannot predict whether additional U.S.

Our business is also subject to risks associated with U.S.

requirements and ongoing product monitoring responsibilities and obtain a “CE” marking (i.e., a mandatory conformity marking for certain products sold within the European Economic Area (EEA)) for their products.

The manufacture, distribution, marketing, and use of our products are subject to extensive regulation and scrutiny by FDA and other regulatory authorities globally, and such regulations require that we obtain specific…

As a participant in the healthcare industry, our operations and products, and those of our customers, are regulated by numerous government agencies, both inside and outside the U.S.

We risk experiencing negative stockholder reaction, as well as damage to our brand and reputation and other potential costs, if we fail to (or are perceived to fail to) maintain and satisfy our goals, commitments, and…

Our commitments, goals, activities, and disclosures related to sustainability and corporate responsibility matters, and the perception of our activities in these areas, may fail to satisfy the differing expectations o…

Furthermore, companies across all industries are facing continued scrutiny from investors, regulators, and other stakeholders related to their sustainability and corporate responsibility commitments, performance, and…

The long-term effects of climate change are difficult to predict and may be widespread.

The effects of climate change, including legal, regulatory, or market measures related to climate change and other sustainability topics, could adversely affect our business, results of operations, financial condition…

The escalating global economic competition and trade tensions among the U.S.

We use both internally developed and third party-provided AI and machine learning (ML) technologies to support our functions and operations (including Generative AI tools) and anticipate integrating such technology in…

Additionally, our ongoing integration of Hillrom and the sale of our Kidney Care business, as well as a number of our employees having fully remote or hybrid work arrangements expose us to, among other things, heighte…

Unaffiliated third-party suppliers provide a number of goods and services to our R&D, clinical, and manufacturing organizations, many of whom do so on a spot basis and not pursuant to a contractual arrangement.

New or unintended uses of our products may also raise quality or safety issues.

The development of new or enhanced products involves a lengthy regulatory process and is capital intensive.

These and other events or disruptions of manufacturing or sterilization processes that we or third parties may experience, whether due to a lack of capacity, environmental, regulatory or compliance issues (including e…

Some of our products are manufactured at a single manufacturing facility or stored at a single storage site.

We rely heavily on a limited number of providers of transport services for reliable and secure point-to-point transport of our products to our customers and patients and for tracking of these shipments, and from time…

As of December 31, 2025, we manufacture our products at various facilities globally.

Significant increases in the cost of raw materials, sub-assemblies, or materials used in the production of our products that cannot be recovered through increased prices of our products (or the unavailability of those…

In certain instances, we use a single source or supplier or there is only a sole source or supplier.

The manufacture of our products requires, among other things, the timely supply or delivery of sufficient amounts of quality components and raw materials.

Our participation in these agreements often requires increased discounting or restrictions on our ability to raise prices, and failure to participate in or to be awarded these agreements might result in a reduction of…

For more information on the valuation of goodwill and intangible assets, see “Critical Accounting Policies” in Item 7.

potential impairment indicators are present.

Our ability to compete effectively depends on our ability to attract, develop, retain, and engage key employees, including people in senior management, sales, marketing, information technology, and R&D positions.

Our operating results and financial condition have, and may in the future, fluctuate from quarter-to-quarter and year-to-year for a number of reasons.

Portions of our business have been, and will be, the subject of various restructuring initiatives.

We may not be successful in achieving expected operating efficiencies and sustaining or improving operating expense reductions and may experience business disruptions and adverse tax consequences associated with restr…

Further, current or worsening economic conditions may impact the ability of our customers (including governments) to pay for our products and services and the amount spent on healthcare generally, which could result i…

General global economic downturns and macroeconomic trends, including heightened inflation, capital markets volatility, interest rate and currency rate fluctuations, changes in monetary policy and economic slowdown or…

Global economic conditions, including inflation, have adversely affected, and could continue to adversely affect, our operations.

We expect to experience some of these and other challenges related to our supply chain in future periods.

We continue to evaluate and refine both our short- and long-term financial objectives, including our stated commitment to achieve certain net leverage targets and to fully offset the stranded costs related to the sale…

In order to successfully introduce or monetize new and existing products and services, we must commit substantial funds and other resources to R&D and other innovation initiatives, which ability may be negatively impa…

We may be unable to successfully introduce or monetize new and existing products or services or keep pace with changing consumer preferences and needs or advances in technology.

Demand for our products and services, and our overall growth, depend in large part on overall demand and growth in the healthcare market.

Competition may increase further as additional companies begin to enter our markets, launch new products or modify their existing products to compete directly with ours.

We face substantial competition in all of our markets from international and domestic healthcare medical products and pharmaceutical companies and providers of all sizes, and these competitors often differ across our…

amount of our cash flow for debt service, which reduces funds available (under our credit facilities or otherwise) for investments in R&D, capital expenditures, dividend payments, pension plan contributions, acquisiti…

We have also incurred, and will continue to incur, significant expenses in connection with the sale of our Kidney Care business.

We are exposed to risks as a result of our strategic actions.

•We are party to a number of pending lawsuits and other disputes which may adversely impact us.

•Increasing regulatory focus on, and expanding laws relating to, privacy, AI, and cybersecurity could impact our business and expose us to increased liability.

•If reimbursement or other payment for our current or future products is reduced or modified in the U.S.

•Our commitments, goals, activities, and disclosures related to sustainability and corporate responsibility matters, and the perception of our activities in these areas, may fail to satisfy the differing expectations…

•The effects of climate change, including legal, regulatory, or market measures related to climate change and other sustainability topics, could adversely affect our business, results of operations, financial conditio…

•We may experience breaches and breakdowns affecting our information technology systems or protected information, including from obsolescence, cyber security breaches and data leakage.

•We may not be successful in achieving expected operating efficiencies and sustaining or improving operating expense reductions.

•Global economic conditions, including inflation, have adversely affected, and could continue to adversely affect, our operations.

•We may be unable to successfully introduce or monetize new and existing products or services or keep pace with changing consumer preferences and needs or advances in technology.

•We are exposed to risks as a result of our strategic actions.

Risks Relating to Our Business and Financial Performance

impact on our business, results of operations, financial condition and cash flows.

Changes to the tax laws in the United States or other countries in which we operate could have an adverse effect on our operating results.

Changes in tax laws or exposure to additional income tax liabilities may have a negative impact on our operating results.

Furthermore, our intellectual property, proprietary technology and sensitive company data is potentially vulnerable to loss, damage and misappropriation from system malfunction, computer viruses and unauthorized acces…

Our employees, consultants, parties to collaboration agreements and other business partners are generally subject to confidentiality or similar agreements to protect our confidential and proprietary information.

The Healthcare Reform Act includes several provisions which impact our businesses in the United States, including increased Medicaid rebates and an expansion of the 340B Drug Pricing Program, which provides certain qu…

We or our third-party providers and business partners may also be subjected to audits or investigations by one or more domestic or foreign government agencies relating to compliance with information security and priva…

collection, use, storage, security, transfer, disclosure and other processing of protected health information and personal and sensitive data, but also the development and use of AI, the sharing of certain data and ti…

We are subject to a number of laws and regulations, non-compliance with which could adversely affect our business, results of operations, financial condition and cash flows, and we are susceptible to a changing regula…

In addition, some stakeholders may disagree with our CR goals and initiatives.

Governmental authorities, investors, customers, employees, certain institutional investors, lenders and other stakeholders are increasingly focused on CR commitments, practices, performance and disclosures, and in rec…

processes or systems to track them), alternative energy policies and sustainability initiatives.

In addition, the increasing concern over climate change has resulted in, and may continue to result in, more local, state, regional, federal and global legal and regulatory requirements relating to climate change, inc…

We may experience breaches, failures or disruptions of information technology systems or products (whether ours or those of third parties on which we rely) that use or rely on AI, ML or emerging technologies We have a…

Incorporating artificial intelligence, machine learning and other emerging technologies into our products, services and operations may result in legal and regulatory risks, reputational harm or have other adverse cons…

In addition, Technology management issues arise from time-to-time as we continue to consolidate and outsource certain information technology support activities and certain computer operations and application support a…

Our Technology is vulnerable to breakdown, interruption, cyber and other security attacks, system malfunction, unauthorized access, inadvertent exposure or disclosure of information, theft and other events and require…

results of operations”.

We rely upon information technology systems and infrastructure, including services provided by our partners and third parties, to support our business, facilities, products and customers.

Breaches and breakdowns affecting our information technology systems or protected information, including from obsolescence, cyber security breaches and data leakage, could have a material adverse effect on our busines…

timely manner and such occurrences may damage our reputation and lead to decreased demand for our products and increased cost and expense to our business.

Additionally, our success depends upon the availability and quality of our products and the underlying raw materials and component parts.

Additionally, we obtain certain components and materials on a spot basis from third-party suppliers with whom we do not have contractual arrangements.

endeavor, either alone or working closely with our suppliers, to ensure the continuity of our inputs and supplies, but these efforts may not always be successful.

If we are unable to obtain sufficient components or raw materials on a timely basis or for a cost-effective price or if we experience other manufacturing, sterilization, supply or distribution difficulties, our busine…

and supply chains, and negative effects on certain of the company’s operations as well as the operations of its suppliers, distributors, customers, manufacturers and other third-party vendors.

The COVID-19 pandemic adversely affected our business in many ways, including significant reductions and increases in demand for certain products, increased difficulty in serving customers, disruptions to manufacturing

Our global operations expose us to risks associated with public health emergencies, including epidemics and pandemics, such as the COVID-19 pandemic.