Baxter International Inc., balance sheet: debt

US$ in millions

	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012	Dec 31, 2011
Short-term debt	1,775)	913)	181)	27)	256)
Current maturities of long-term debt and lease obligations	810)	786)	859)	323)	190)
Long-term debt and lease obligations, excluding current maturities	3,935)	7,606)	8,126)	5,580)	4,749)
Total debt and lease obligations (carrying amount)	6,520)	9,305)	9,166)	5,930)	5,195)

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Debt item	Description	The company
Total debt and lease obligations (carrying amount)	Sum of the carrying values as of the balance sheet date of all debt plus capital lease obligations.	Baxter International Inc. total debt increased from 2013 to 2014 but then decreased significantly from 2014 to 2015.

	Dec 31, 2015
Selected Financial Data (US$ in millions)
Short-term debt	1,775)
Current maturities of long-term debt and lease obligations	818)
Long-term debt and lease obligations, excluding current maturities	4,089)
Total debt and lease obligations (fair value)	6,682)
Financial Ratio
Debt, fair value to carrying amount ratio	1.02

Weighted-average effective interest rate on debt: 2.88%

Interest rate	Debt amount¹	Interest rate × Debt amount
6.00%	302)	18)
1.10%	500)	6)
2.00%	500)	10)
5.50%	502)	28)
2.00%	750)	15)
4.60%	531)	24)
4.40%	299)	13)
0.70%	281)	2)
2.60%	212)	6)
3.60%	147)	5)
6.20%	101)	6)
6.40%	266)	17)
4.00%	6)	—)
4.60%	257)	12)
1.41%	1,450)	20)
0.60%	300)	2)
Total	6,404)	184)
2.88%

¹ US$ in millions

² Weighted-average interest rate = 100 × 184 ÷ 6,404 = 2.88%

Baxter International Inc., interest costs incurred

US$ in millions

12 months ended:	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012	Dec 31, 2011
Interest expense	146)	167)	155)	113)	92)
Interest costs capitalized	51)	70)	70)	52)	40)
Interest costs	197)	237)	225)	165)	132)

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Debt item	Description	The company
Interest expense	Amount of the cost of borrowed funds accounted for as interest expense for debt.	Baxter International Inc. interest expense increased from 2013 to 2014 but then decreased significantly from 2014 to 2015.
Interest costs capitalized	Amount of interest costs capitalized disclosed as an adjusting item to interest costs incurred.
Interest costs	Total interest costs incurred during the period and either capitalized or charged against earnings.	Baxter International Inc. interest costs increased from 2013 to 2014 but then decreased significantly from 2014 to 2015.

	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012	Dec 31, 2011
Selected Financial Data (US$ in millions)
Net income attributable to Baxter	968)	2,497)	2,012)	2,326)	2,224)
Add: Net income attributable to noncontrolling interest	—)	—)	—)	—)	32)
Less: Income from discontinued operations, net of tax	575)	551)	—)	—)	—)
Add: Income tax expense	35)	493)	537)	563)	553)
Add: Interest expense	146)	167)	155)	113)	92)
Earnings before interest and tax (EBIT)	574)	2,606)	2,704)	3,002)	2,901)

Interest costs	197)	237)	225)	165)	132)
Financial Ratio With and Without Capitalized Interest
Interest coverage ratio (without capitalized interest)¹	3.93	15.60	17.45	26.57	31.53
Adjusted interest coverage ratio (with capitalized interest)²	2.91	11.00	12.02	18.19	21.98

2015 Calculations

¹ Interest coverage ratio (without capitalized interest) = EBIT ÷ Interest expense
= 574 ÷ 146 = 3.93

² Adjusted interest coverage ratio (with capitalized interest) = EBIT ÷ Interest costs
= 574 ÷ 197 = 2.91

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Solvency ratio	Description	The company
Adjusted interest coverage ratio	A solvency ratio calculated as EBIT divided by interest payments (including capitalized interest).	Baxter International Inc. adjusted interest coverage ratio deteriorated from 2013 to 2014 and from 2014 to 2015.

Baxter International Inc. (NYSE:BAX)

Analysis of Debt