Stock Analysis on Net
Stock Analysis on Net

Baxter International Inc. (NYSE:BAX)

This company has been moved to the archive! The financial data has not been updated since August 4, 2016.

Analysis of Income Taxes

Microsoft Excel

Income Tax Expense (Benefit)

Baxter International Inc., income tax expense (benefit), continuing operations

US$ in millions

Microsoft Excel
12 months ended: Dec 31, 2015 Dec 31, 2014 Dec 31, 2013 Dec 31, 2012 Dec 31, 2011
Federal (251) 102 296 122 75
State and local (6) 22 28 55 32
United States (257) 124 324 177 107
International 345 447 437 403 274
Current income tax expense 88 571 761 580 381
Federal (9) (15) (147) 112 155
State and local (20) (6) (5) (81) (6)
United States (29) (21) (152) 31 149
International (24) (57) (72) (48) 23
Deferred income tax expense (benefit) (53) (78) (224) (17) 172
Income tax expense 35 493 537 563 553

Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).

Item Description The company
Current income tax expense Amount of current income tax expense (benefit) pertaining to taxable income (loss) from continuing operations. Baxter International Inc. current income tax expense decreased from 2013 to 2014 and from 2014 to 2015.
Deferred income tax expense (benefit) Amount of deferred income tax expense (benefit) pertaining to income (loss) from continuing operations. Baxter International Inc. deferred income tax expense (benefit) increased from 2013 to 2014 and from 2014 to 2015.
Income tax expense Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. Baxter International Inc. income tax expense decreased from 2013 to 2014 and from 2014 to 2015.

Effective Income Tax Rate (EITR)

Baxter International Inc., effective income tax rate (EITR) reconciliation

Microsoft Excel
Dec 31, 2015 Dec 31, 2014 Dec 31, 2013 Dec 31, 2012 Dec 31, 2011
U.S. federal statutory rate 35.00% 35.00% 35.00% 35.00% 35.00%
Effective income tax rate 8.20% 20.20% 21.00% 20.00% 20.00%

Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).

Item Description The company
Effective income tax rate Percentage of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. Baxter International Inc. effective income tax rate decreased from 2013 to 2014 and from 2014 to 2015.

Components of Deferred Tax Assets and Liabilities

Baxter International Inc., components of deferred tax assets and liabilities

US$ in millions

Microsoft Excel
Dec 31, 2015 Dec 31, 2014 Dec 31, 2013 Dec 31, 2012 Dec 31, 2011
Accrued expenses 389 642 426 171 251
Retirement benefits 352 898 669 804 658
Alternative minimum tax credit — — — — 54
Tax credits and net operating losses 547 369 426 169 198
Deferred tax assets, gross 1,288 1,909 1,521 1,144 1,161
Valuation allowances (135) (137) (137) (104) (116)
Deferred tax assets 1,153 1,772 1,384 1,040 1,045
Subsidiaries’ unremitted earnings (147) (208) (265) (222) (211)
Asset basis differences (847) (1,011) (849) (294) (270)
Deferred tax liabilities (994) (1,219) (1,114) (516) (481)
Net deferred tax asset (liability) 159 553 270 524 564

Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).

Item Description The company
Deferred tax assets, gross Amount before allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. Baxter International Inc. deferred tax assets, gross increased from 2013 to 2014 but then decreased significantly from 2014 to 2015.
Deferred tax assets Amount after allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. Baxter International Inc. deferred tax assets increased from 2013 to 2014 but then decreased significantly from 2014 to 2015.
Net deferred tax asset (liability) Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, without jurisdictional netting. Baxter International Inc. net deferred tax asset (liability) increased from 2013 to 2014 but then decreased significantly from 2014 to 2015.

Deferred Tax Assets and Liabilities, Classification

Baxter International Inc., deferred tax assets and liabilities, classification

US$ in millions

Microsoft Excel
Dec 31, 2015 Dec 31, 2014 Dec 31, 2013 Dec 31, 2012 Dec 31, 2011
Current deferred tax assets — 501 393 344 295
Noncurrent deferred tax assets 354 273 876 1,156 1,123
Current deferred tax liabilities — 9 760 878 738
Noncurrent deferred tax liabilities 195 212 239 98 116

Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).

Item Description The company
Noncurrent deferred tax assets Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, with jurisdictional netting and classified as noncurrent. Baxter International Inc. noncurrent deferred tax assets decreased from 2013 to 2014 but then slightly increased from 2014 to 2015.
Noncurrent deferred tax liabilities Amount, after deferred tax asset, of deferred tax liability attributable to taxable differences, with jurisdictional netting and classified as noncurrent. Baxter International Inc. noncurrent deferred tax liabilities decreased from 2013 to 2014 and from 2014 to 2015.

Adjustments to Financial Statements: Removal of Deferred Taxes

Baxter International Inc., adjustments to financial statements

US$ in millions

Microsoft Excel
Dec 31, 2015 Dec 31, 2014 Dec 31, 2013 Dec 31, 2012 Dec 31, 2011
Adjustment to Current Assets
Current assets (as reported) 11,796 10,351 10,004 9,260 8,650
Less: Current deferred tax assets, net — 501 393 344 295
Current assets (adjusted) 11,796 9,850 9,611 8,916 8,355
Adjustment to Total Assets
Total assets (as reported) 20,975 25,917 25,869 20,390 19,073
Less: Current deferred tax assets, net — 501 393 344 295
Less: Noncurrent deferred tax assets, net 354 273 876 1,156 1,123
Total assets (adjusted) 20,621 25,143 24,600 18,890 17,655
Adjustment to Current Liabilities
Current liabilities (as reported) 5,750 6,042 5,906 4,759 4,857
Less: Current deferred tax liabilities, net — 9 760 878 738
Current liabilities (adjusted) 5,750 6,033 5,146 3,881 4,119
Adjustment to Total Liabilities
Total liabilities (as reported) 12,110 17,761 17,383 13,412 12,245
Less: Current deferred tax liabilities, net — 9 760 878 738
Less: Noncurrent deferred tax liabilities, net 195 212 239 98 116
Total liabilities (adjusted) 11,915 17,540 16,384 12,436 11,391
Adjustment to Total Baxter Shareholders’ Equity
Total Baxter shareholders’ equity (as reported) 8,846 8,120 8,463 6,938 6,585
Less: Net deferred tax assets (liabilities) 159 553 270 524 564
Total Baxter shareholders’ equity (adjusted) 8,687 7,567 8,193 6,414 6,021
Adjustment to Net Income Attributable To Baxter
Net income attributable to Baxter (as reported) 968 2,497 2,012 2,326 2,224
Add: Deferred income tax expense (benefit) (53) (78) (224) (17) 172
Net income attributable to Baxter (adjusted) 915 2,419 1,788 2,309 2,396

Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).

Baxter International Inc., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)

Baxter International Inc., adjusted financial ratios

Microsoft Excel
Dec 31, 2015 Dec 31, 2014 Dec 31, 2013 Dec 31, 2012 Dec 31, 2011
Current Ratio
Reported current ratio 2.05 1.71 1.69 1.95 1.78
Adjusted current ratio 2.05 1.63 1.87 2.30 2.03
Net Profit Margin
Reported net profit margin 9.71% 14.98% 13.19% 16.39% 16.01%
Adjusted net profit margin 9.18% 14.51% 11.72% 16.27% 17.25%
Total Asset Turnover
Reported total asset turnover 0.48 0.64 0.59 0.70 0.73
Adjusted total asset turnover 0.48 0.66 0.62 0.75 0.79
Financial Leverage
Reported financial leverage 2.37 3.19 3.06 2.94 2.90
Adjusted financial leverage 2.37 3.32 3.00 2.95 2.93
Return on Equity (ROE)
Reported ROE 10.94% 30.75% 23.77% 33.53% 33.77%
Adjusted ROE 10.53% 31.97% 21.82% 36.00% 39.79%
Return on Assets (ROA)
Reported ROA 4.62% 9.63% 7.78% 11.41% 11.66%
Adjusted ROA 4.44% 9.62% 7.27% 12.22% 13.57%

Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).

Financial ratio Description The company
Adjusted current ratio A liquidity ratio calculated as adjusted current assets divided by adjusted current liabilities. Baxter International Inc. adjusted current ratio deteriorated from 2013 to 2014 but then improved from 2014 to 2015 exceeding 2013 level.
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. Baxter International Inc. adjusted net profit margin ratio improved from 2013 to 2014 but then deteriorated significantly from 2014 to 2015.
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Baxter International Inc. adjusted total asset turnover ratio improved from 2013 to 2014 but then deteriorated significantly from 2014 to 2015.
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.		 Baxter International Inc. adjusted financial leverage ratio increased from 2013 to 2014 but then decreased significantly from 2014 to 2015.
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. Baxter International Inc. adjusted ROE improved from 2013 to 2014 but then deteriorated significantly from 2014 to 2015.
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. Baxter International Inc. adjusted ROA improved from 2013 to 2014 but then deteriorated significantly from 2014 to 2015.

Baxter International Inc., Financial Ratios: Reported vs. Adjusted

Adjusted Current Ratio

Microsoft Excel
Dec 31, 2015 Dec 31, 2014 Dec 31, 2013 Dec 31, 2012 Dec 31, 2011
As Reported
Selected Financial Data (US$ in millions)
Current assets 11,796 10,351 10,004 9,260 8,650
Current liabilities 5,750 6,042 5,906 4,759 4,857
Liquidity Ratio
Current ratio1 2.05 1.71 1.69 1.95 1.78
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted current assets 11,796 9,850 9,611 8,916 8,355
Adjusted current liabilities 5,750 6,033 5,146 3,881 4,119
Liquidity Ratio
Adjusted current ratio2 2.05 1.63 1.87 2.30 2.03

Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).

2015 Calculations

1 Current ratio = Current assets ÷ Current liabilities
= 11,796 ÷ 5,750 = 2.05

2 Adjusted current ratio = Adjusted current assets ÷ Adjusted current liabilities
= 11,796 ÷ 5,750 = 2.05

Liquidity ratio Description The company
Adjusted current ratio A liquidity ratio calculated as adjusted current assets divided by adjusted current liabilities. Baxter International Inc. adjusted current ratio deteriorated from 2013 to 2014 but then improved from 2014 to 2015 exceeding 2013 level.

Adjusted Net Profit Margin

Microsoft Excel
Dec 31, 2015 Dec 31, 2014 Dec 31, 2013 Dec 31, 2012 Dec 31, 2011
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to Baxter 968 2,497 2,012 2,326 2,224
Net sales 9,968 16,671 15,259 14,190 13,893
Profitability Ratio
Net profit margin1 9.71% 14.98% 13.19% 16.39% 16.01%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income attributable to Baxter 915 2,419 1,788 2,309 2,396
Net sales 9,968 16,671 15,259 14,190 13,893
Profitability Ratio
Adjusted net profit margin2 9.18% 14.51% 11.72% 16.27% 17.25%

Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).

2015 Calculations

1 Net profit margin = 100 × Net income attributable to Baxter ÷ Net sales
= 100 × 968 ÷ 9,968 = 9.71%

2 Adjusted net profit margin = 100 × Adjusted net income attributable to Baxter ÷ Net sales
= 100 × 915 ÷ 9,968 = 9.18%

Profitability ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. Baxter International Inc. adjusted net profit margin ratio improved from 2013 to 2014 but then deteriorated significantly from 2014 to 2015.

Adjusted Total Asset Turnover

Microsoft Excel
Dec 31, 2015 Dec 31, 2014 Dec 31, 2013 Dec 31, 2012 Dec 31, 2011
As Reported
Selected Financial Data (US$ in millions)
Net sales 9,968 16,671 15,259 14,190 13,893
Total assets 20,975 25,917 25,869 20,390 19,073
Activity Ratio
Total asset turnover1 0.48 0.64 0.59 0.70 0.73
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Net sales 9,968 16,671 15,259 14,190 13,893
Adjusted total assets 20,621 25,143 24,600 18,890 17,655
Activity Ratio
Adjusted total asset turnover2 0.48 0.66 0.62 0.75 0.79

Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).

2015 Calculations

1 Total asset turnover = Net sales ÷ Total assets
= 9,968 ÷ 20,975 = 0.48

2 Adjusted total asset turnover = Net sales ÷ Adjusted total assets
= 9,968 ÷ 20,621 = 0.48

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Baxter International Inc. adjusted total asset turnover ratio improved from 2013 to 2014 but then deteriorated significantly from 2014 to 2015.

Adjusted Financial Leverage

Microsoft Excel
Dec 31, 2015 Dec 31, 2014 Dec 31, 2013 Dec 31, 2012 Dec 31, 2011
As Reported
Selected Financial Data (US$ in millions)
Total assets 20,975 25,917 25,869 20,390 19,073
Total Baxter shareholders’ equity 8,846 8,120 8,463 6,938 6,585
Solvency Ratio
Financial leverage1 2.37 3.19 3.06 2.94 2.90
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted total assets 20,621 25,143 24,600 18,890 17,655
Adjusted total Baxter shareholders’ equity 8,687 7,567 8,193 6,414 6,021
Solvency Ratio
Adjusted financial leverage2 2.37 3.32 3.00 2.95 2.93

Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).

2015 Calculations

1 Financial leverage = Total assets ÷ Total Baxter shareholders’ equity
= 20,975 ÷ 8,846 = 2.37

2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted total Baxter shareholders’ equity
= 20,621 ÷ 8,687 = 2.37

Solvency ratio Description The company
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.		 Baxter International Inc. adjusted financial leverage ratio increased from 2013 to 2014 but then decreased significantly from 2014 to 2015.

Adjusted Return on Equity (ROE)

Microsoft Excel
Dec 31, 2015 Dec 31, 2014 Dec 31, 2013 Dec 31, 2012 Dec 31, 2011
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to Baxter 968 2,497 2,012 2,326 2,224
Total Baxter shareholders’ equity 8,846 8,120 8,463 6,938 6,585
Profitability Ratio
ROE1 10.94% 30.75% 23.77% 33.53% 33.77%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income attributable to Baxter 915 2,419 1,788 2,309 2,396
Adjusted total Baxter shareholders’ equity 8,687 7,567 8,193 6,414 6,021
Profitability Ratio
Adjusted ROE2 10.53% 31.97% 21.82% 36.00% 39.79%

Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).

2015 Calculations

1 ROE = 100 × Net income attributable to Baxter ÷ Total Baxter shareholders’ equity
= 100 × 968 ÷ 8,846 = 10.94%

2 Adjusted ROE = 100 × Adjusted net income attributable to Baxter ÷ Adjusted total Baxter shareholders’ equity
= 100 × 915 ÷ 8,687 = 10.53%

Profitability ratio Description The company
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. Baxter International Inc. adjusted ROE improved from 2013 to 2014 but then deteriorated significantly from 2014 to 2015.

Adjusted Return on Assets (ROA)

Microsoft Excel
Dec 31, 2015 Dec 31, 2014 Dec 31, 2013 Dec 31, 2012 Dec 31, 2011
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to Baxter 968 2,497 2,012 2,326 2,224
Total assets 20,975 25,917 25,869 20,390 19,073
Profitability Ratio
ROA1 4.62% 9.63% 7.78% 11.41% 11.66%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income attributable to Baxter 915 2,419 1,788 2,309 2,396
Adjusted total assets 20,621 25,143 24,600 18,890 17,655
Profitability Ratio
Adjusted ROA2 4.44% 9.62% 7.27% 12.22% 13.57%

Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).

2015 Calculations

1 ROA = 100 × Net income attributable to Baxter ÷ Total assets
= 100 × 968 ÷ 20,975 = 4.62%

2 Adjusted ROA = 100 × Adjusted net income attributable to Baxter ÷ Adjusted total assets
= 100 × 915 ÷ 20,621 = 4.44%

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. Baxter International Inc. adjusted ROA improved from 2013 to 2014 but then deteriorated significantly from 2014 to 2015.