Name: Baxter International Inc. (NYSE:BAX) | Liabilities and Stockholders’ Equity
Creator: Stock Analysis on Net

Balance Sheet: Liabilities and Stockholders’ Equity

The balance sheet provides creditors, investors, and analysts with information on company resources (assets) and its sources of capital (its equity and liabilities). It normally also provides information about the future earnings capacity of a company assets as well as an indication of cash flows that may come from receivables and inventories.

Liabilities represents obligations of a company arising from past events, the settlement of which is expected to result in an outflow of economic benefits from the entity.

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Baxter International Inc., consolidated balance sheet: liabilities and stockholders’ equity

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)
Accounts payable, principally trade	716)	1,264)	1,103)	766)	795)
Deferred income taxes	—)	9)	760)	878)	738)
Common stock dividends payable	137)	282)	266)	246)	188)
Employee compensation and withholdings	481)	716)	667)	567)	517)
Property, payroll and certain other taxes	166)	261)	237)	152)	150)
Infusion pump reserves	52)	22)	64)	37)	202)
Business optimization reserves	98)	118)	199)	151)	176)
Accrued rebates	192)	374)	346)	291)	267)
Separation-related reserves	190)	—)	—)	—)	—)
Other	634)	961)	922)	870)	1,025)
Accounts payable and accrued liabilities	2,666)	4,007)	4,564)	3,958)	4,058)
Current income taxes payable	453)	336)	302)	451)	353)
Current liabilities held for disposition	46)	—)	—)	—)	—)
Current liabilities	5,750)	6,042)	5,906)	4,759)	4,857)
Long-term debt and lease obligations, excluding current maturities	3,935)	7,606)	8,126)	5,580)	4,749)
Pension and other employee benefits	2,041)	2,748)	2,049)	2,427)	1,920)
Deferred tax liabilities	195)	212)	239)	98)	116)
Litigation reserves	24)	53)	72)	32)	63)
Infusion pump reserves	—)	—)	19)	90)	74)
Business optimization reserves	18)	51)	89)	69)	49)
Contingent payment liabilities	20)	569)	340)	86)	—)
Other	127)	480)	543)	271)	417)
Other long-term liabilities	2,425)	4,113)	3,351)	3,073)	2,639)
Noncurrent liabilities	6,360)	11,719)	11,477)	8,653)	7,388)
Total liabilities	12,110)	17,761)	17,383)	13,412)	12,245)
Common stock, $1 par value	683)	683)	683)	683)	683)
Common stock in treasury, at cost	(7,646)	(7,993)	(7,914)	(7,592)	(6,719)
Additional contributed capital	5,902)	5,853)	5,818)	5,769)	5,783)
Retained earnings	9,683)	13,227)	11,852)	10,888)	9,429)
Accumulated other comprehensive income (loss)	224)	(3,650)	(1,976)	(2,810)	(2,591)
Total Baxter shareholders’ equity	8,846)	8,120)	8,463)	6,938)	6,585)
Noncontrolling interests	19)	36)	23)	40)	243)
Total equity	8,865)	8,156)	8,486)	6,978)	6,828)
Total liabilities and equity	20,975)	25,917)	25,869)	20,390)	19,073)

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).

The financial position between 2011 and 2015 is characterized by a significant expansion of the balance sheet peaking in 2014, followed by a substantial contraction in 2015. Total liabilities and equity rose from 19,073 million in 2011 to a high of 25,917 million in 2014, before declining to 20,975 million by the end of 2015. This movement suggests a period of aggressive capital allocation or debt-funded expansion followed by a significant restructuring or divestiture phase.

Current Liabilities and Liquidity Obligations: Current liabilities remained relatively stable from 2011 to 2012 but grew significantly to peak at 6,042 million in 2014. A notable shift occurred in the composition of short-term obligations; short-term debt remained low until 2013, after which it escalated rapidly to 1,775 million in 2015. Conversely, accounts payable and accrued liabilities, which peaked at 4,564 million in 2013, decreased substantially to 2,666 million by 2015, indicating a shift from trade-based credit to formal short-term borrowing.
Long-Term Debt and Noncurrent Liabilities: A sharp increase in long-term debt and lease obligations is observed from 2011 to 2013, rising from 4,749 million to 8,126 million. This trend reversed sharply in 2015, with long-term debt falling to 3,935 million. Total noncurrent liabilities followed a similar trajectory, peaking at 11,719 million in 2014 before dropping to 6,360 million in 2015. This suggests a significant deleveraging event or the reclassification of long-term obligations toward the short-term during the final year of the period.
Stockholders' Equity and Retained Earnings: Total equity demonstrated a general upward trend, increasing from 6,828 million in 2011 to 8,865 million in 2015. However, this growth was not linear. Retained earnings grew steadily from 9,429 million in 2011 to a peak of 13,227 million in 2014, before dropping to 9,683 million in 2015. This decrease in retained earnings, occurring simultaneously with the overall increase in total equity, is partially offset by a dramatic swing in accumulated other comprehensive income, which moved from a loss of 3,650 million in 2014 to a gain of 224 million in 2015.
Overall Capital Structure Trends: The total liabilities-to-equity relationship fluctuated significantly. Total liabilities expanded from 12,245 million in 2011 to 17,761 million in 2014, increasing the firm's leverage. The sharp reduction of total liabilities to 12,110 million in 2015, combined with the increase in total equity, indicates a strengthened solvency position and a reduced reliance on long-term debt by the end of the observed period.

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