Baxter International

“New or unintended uses of our products may also raise quality or safety issues. In addition, our customers’ use of third parties to service or repair our products has caused, and may in the future cause, quality or safety issues, including due to such third parties’ lack of knowledge of or training on our products. A quality or safety issue has resulted in, and may in the future result in one or more of the following: product recalls (either voluntary or required by FDA or similar governmental authorities in other countries); adverse regulatory site inspections and/or inspectional classifications; warning letters; other regulatory actions; import bans; seizures; injunctions; monetary sanctions; civil or criminal sanctions (which may include corporate integrity agreements); costly litigation; refusal of a government to grant clearances, approvals, and/or licenses; restrictions on operations; or withdrawal of existing approvals and licenses.”

Annual report 2025A · The company itself

“Novum IQ Large Volume Pump (Novum LVP) Beginning in April 2025, we initiated a voluntary correction for the Novum LVP due to the potential for under-infusion when the pump is in "standby mode" for an extended period of time. Beginning in July 2025, we initiated voluntary corrections for the Novum LVP due to the potential for under-infusion when the pump is directed to deliver a bolus infusion or significantly increase the rate of infusion after it has been running at a lower infusion rate and the potential for over- and under-infusion related to set misloading, as well as certain software anomalies.”

Annual report 2025A · The company itself

“Infusion Therapies & Technologies net sales were flat for the year ended December 31, 2025, as compared to the prior year period. Sales performance in 2025 was primarily driven by lower sales as a result of the ship and installation hold on Novum LVP and lower demand in our IV Solutions business in the U.S. as customers continued 36 fluid conservation practices embedded with clinical practice changes.”

Annual report 2025A · The company itself

“Our success also depends on our ability to maintain and routinely improve product quality and our quality management program. Quality management plays an essential role in helping to meet customer requirements, prevent defects, improve our products and services, and assure the safety and efficacy of our products.”

Annual report 2025A · The company itself

“EXECUTIVE OVERVIEW Description of the Company, Recent Strategic Actions and Business Segments Baxter International Inc. is a global medical technology with approximately 37,500 employees worldwide who are engaged in the development, manufacture and sale of a broad range of products, digital health solutions and therapies used by hospitals, nursing homes, rehabilitation centers, ambulatory surgery centers, doctors’ offices and patients at home under physician supervision.”

Annual report 2025A · The company itself

“NET SALES BY SEGMENT Medical Products & Therapies Our 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.”

Annual report 2025A · The company itself

“Pharmaceuticals Our Pharmaceuticals segment includes sales of specialty injectable pharmaceuticals, inhaled anesthetics and drug compounding services.”

Annual report 2025A · The company itself

“Continued consolidation in the health care industry or additional governmental controls exerted over pricing and access in key markets could lead to increased demands for price concessions or limit or eliminate our ability to sell to certain of our significant market segments. Numerous initiatives and reforms by legislators, regulators, and third-party payers to curb the rising cost of health care, and to increase access to care, have catalyzed a consolidation of aggregate purchasing power within many of the markets in which we sell our products.”

Annual report 2025A · The company itself

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

Annual report 2025A · The company itself

“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 sales to the member hospitals. In addition, in recent years, select market participants have shown an increased focus on individual GPO members negotiating directly with manufacturers on committed contracts. IDNs and health systems, when negotiating directly with manufacturers, often request additional discounts or other enhancements, such as most-favored-nation clauses.”

Annual report 2025A · The company itself

“With the healthcare market’s increased focus on asset and resource efficiency, as well as reimbursement constraints and competitive dynamics (including consolidation within healthcare systems, as discussed below in “Continued consolidation in the health care industry or additional governmental controls exerted over pricing and access in key markets could lead to increased demands for price concessions or limit or eliminate our ability to sell to certain of our significant market segments”), we have seen margins for some of our products decline and they may continue to do so over time.”

Annual report 2025A · The company itself

“EXECUTIVE OVERVIEW Description of the Company, Recent Strategic Actions and Business Segments Baxter International Inc. is a global medical technology with approximately 37,500 employees worldwide who are engaged in the development, manufacture and sale of a broad range of products, digital health solutions and therapies used by hospitals, nursing homes, rehabilitation centers, ambulatory surgery centers, doctors’ offices and patients at home under physician supervision.”

Annual report 2025A · The company itself

“Healthcare Systems & Technologies Our 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.”

Annual report 2025A · The company itself

“Our IT systems and Technology are vulnerable to breakdown, interruption, cyber and other security attacks, system malfunction, unauthorized access, inadvertent exposure or disclosure of information, theft, and other events and, at times, requires the manual application of security upgrades or patches on each machine or device that utilizes the Technology. Third-party systems and solutions that we rely on are also vulnerable to the same risks and may contain defects in design or manufacture or other problems that could result in system disruption or compromise the information security of our own systems, products, and services.”

Annual report 2025A · The company itself

“The continuing evolution of technology we use, including cloud-based computing, open-source software, data hosting, AI, and reliance on third parties and Software as a Service (Saas) solutions, whom may also use open-source software, cloud-based computing, data hosting, or AI tools, create additional opportunities for the unintentional, intentional, unauthorized or unlawful disclosure, exposure, dissemination, loss, alteration, access or destruction of Protected Information stored or processed in our devices, systems, servers, infrastructure, and products (collectively, Technology), and those of our Saas providers and third party service providers.”

Annual report 2025A · The company itself

“We also face all of the same risks listed above and other heightened risks when acquiring a company, in particular if we need to transition or implement certain processes or controls with the acquired company.”

Annual report 2025A · The company itself

“We are also subject to similar risks associated with the continued support for Vantive’s information technology systems, through the transitional services period in the Vantive TSA, which could lead to breaches, disruption, interruptions and impact our financial condition or lead to reputational harm, litigation, and operational disruption.”

Annual report 2025A · The company itself

“We rely upon information technology systems (IT systems) and infrastructure, including services provided by our partners and third parties, to support our business, facilities, operations, product development, products, and services. We also routinely rely on technology systems and infrastructure in the collection, use, storage and transfer, disclosure, and other processing of voluminous amounts of protected information, including personal data, protected health information, and sensitive data (of patients, employees, customers, and third parties) as well as internal confidential information (collectively, Protected Information).”

Annual report 2025A · The company itself

“While we continue to invest in improvements to our IT systems, there is no assurance that our investments have prevented or will prevent future breakdowns, attacks or breaches in our Technology, or cyber incidents.”

Annual report 2025A · The company itself

“Security threats, including cyber and other attacks, have become very sophisticated, frequent, and adaptive. The adversarial use of AI also poses unique challenges and may impact real-time detection capabilities and containment efforts.”

Annual report 2025A · The company itself

“Further, we expect that the breadth and complexity of our information and technology systems and infrastructure will increase as we work to expand our product offerings to utilize and generate data analytics and potentially AI (which create emerging enterprise risks, including cybersecurity, monitoring, and oversight). See “Risks Relating to Our Operations – We are exposed to risks associated with incorporating AI, machine learning and other emerging technologies into our products, services and operations”.”

Annual report 2025A · The company itself

“However, we face risks and uncertainties related to the development, adoption and use of AI, ML and other emerging technologies. Additionally, our internal AI-related policies may not be effective in managing AI use and reducing inherent risks associated with the use of AI, including but not limited to AI-specific cybersecurity risks.”

Annual report 2025A · The company itself

“We may not be able to successfully develop, integrate or deploy AI technologies in our products and services, or we may face delays, increased costs or technical difficulties in doing so. We may also encounter difficulties in obtaining or maintaining the necessary regulatory approvals or clearances for these products and services, or face increased scrutiny or liability from regulators, customers, or other stakeholders regarding the safety, effectiveness, accuracy, reliability, security or ethical implications of such technology.”

Annual report 2025A · The company itself

“We also may have more difficulty protecting or enforcing our regulated personal data, confidential data, and intellectual property rights as a result of these technologies, and there may be a risk of data leakage or infringing on the intellectual property or data rights of others which could lead to regulatory action, or litigation, arbitration or other disputes over the ownership, validity, scope or enforcement of our or others’ patents, trademarks, copyrights, trade secrets or other proprietary rights.”

Annual report 2025A · The company itself

“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 impacted by our current leverage levels. See “Our significant indebtedness requires us to use a substantial amount of our cash flow for debt service and constrains our ability to pursue growth strategies and advance our R&D capabilities” above.”

Annual report 2025A · The company itself

“We are exposed to risks associated with incorporating AI, machine learning and other emerging technologies into our products, services and operations. 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 select products and services in the future (consistent with our internal AI-related governance procedures and policies). We further anticipate that AI and ML will become increasingly important to our innovation and competitiveness in the future.”

Annual report 2025A · The company itself

“Implementation of New Operating Model In the third quarter of 2023, we completed the implementation of a new operating model intended to simplify and streamline our operations and better align our manufacturing and supply chain to our commercial activities. Under this operating model, our business is currently comprised of three reportable segments: Medical Products & Therapies, Healthcare Systems & Technologies, and Pharmaceuticals (each discussed below).”

Annual report 2025A · The company itself

“Capital expenditures totaled $513 million in 2025 as we continued to invest across our businesses to support future growth, including additional investments in support of new and existing product capacity expansions. Our investments in capital expenditures in 2025 were focused on projects that are structured to improve production efficiency, enhance our quality systems and optimize manufacturing capabilities to support our business growth.”

Annual report 2025A · The company itself

“Healthcare Systems & Technologies Our 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.”

Annual report 2025A · The company itself

“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 impacted by our current leverage levels. See “Our significant indebtedness requires us to use a substantial amount of our cash flow for debt service and constrains our ability to pursue growth strategies and advance our R&D capabilities” above.”

Annual report 2025A · The company itself

“Implementation of New Operating Model In the third quarter of 2023, we completed the implementation of a new operating model intended to simplify and streamline our operations and better align our manufacturing and supply chain to our commercial activities. Under this operating model, our business is currently comprised of three reportable segments: Medical Products & Therapies, Healthcare Systems & Technologies, and Pharmaceuticals (each discussed below).”

Annual report 2025A · The company itself

“Healthcare Systems & Technologies Our 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.”

Annual report 2025A · The company itself

“We expect to experience some of these and other challenges related to our supply chain in future periods. These challenges, including the unavailability of certain raw materials and component parts, have also had a negative impact on our sales for certain product categories due to our inability to fully satisfy demand and may continue to have a negative impact on our sales in the future.”

Annual report 2025A · The company itself

“We have faced, and may in the future face, difficulties obtaining supplies of key materials, such as electromechanical components, active ingredients for pharmaceuticals and resins, due to supply chain disruptions and global pandemics (including COVID-19).”

Annual report 2025A · The company itself

“NET SALES BY SEGMENT Medical Products & Therapies Our 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.”

Annual report 2025A · The company itself

“Sales performance in 2025 was primarily driven by lower sales as a result of the ship and installation hold on Novum LVP and lower demand in our IV Solutions business in the U.S. as customers continued 36 fluid conservation practices embedded with clinical practice changes. This decline was partially offset by one-time pricing benefits and price increases in certain products globally.”

Annual report 2025A · The company itself

“With the healthcare market’s increased focus on asset and resource efficiency, as well as reimbursement constraints and competitive dynamics (including consolidation within healthcare systems, as discussed below in “Continued consolidation in the health care industry or additional governmental controls exerted over pricing and access in key markets could lead to increased demands for price concessions or limit or eliminate our ability to sell to certain of our significant market segments”), we have seen margins for some of our products decline and they may continue to do so over time.”

Annual report 2025A · The company itself

“These actions have entailed significant changes across our organizational structure and functional areas and have led to select market exits and may lead to additional market exits as we continue to optimize our portfolio. Today, we are a smaller, less diversified company, with more limited and concentrated businesses, which may leave us more vulnerable to changing market conditions and increased volatility in our financial performance.”

Annual report 2025A · The company itself

“EXECUTIVE OVERVIEW Description of the Company, Recent Strategic Actions and Business Segments Baxter International Inc. is a global medical technology with approximately 37,500 employees worldwide who are engaged in the development, manufacture and sale of a broad range of products, digital health solutions and therapies used by hospitals, nursing homes, rehabilitation centers, ambulatory surgery centers, doctors’ offices and patients at home under physician supervision.”

Annual report 2025A · The company itself

“Our success also depends on our ability to maintain and routinely improve product quality and our quality management program. Quality management plays an essential role in helping to meet customer requirements, prevent defects, improve our products and services, and assure the safety and efficacy of our products.”

Annual report 2025A · The company itself

“Additionally, a growing number of countries have instituted or are contemplating introducing regional or national tender processes driven primarily by price. In some cases, such processes may favor local companies to multinational companies like us. In other instances, multinational companies, including Baxter, are subject to a separate tender bidding process in which they compete only with each other and not with domestic companies.”

Annual report 2025A · The company itself

“Our operations are subject to risks inherent in conducting business globally and under the laws, regulations and customs of various jurisdictions and geographies. These risks include changes in exchange controls and other governmental actions, loss of business in government and public tenders that are held annually in many cases, increasingly complex labor environments, availability of raw materials and component parts, changes in taxation, tariffs, sanctions, embargos, export control restrictions, changes in or violations of U.S. or local laws, dependence on a few government entities as customers, pricing restrictions, economic and political instability, monetary or currency volatility or instability (including as it relates to the U.S.”

Annual report 2025A · The company itself

“The escalating global economic competition and trade tensions among the U.S. and its trading partners could have an adverse effect on our business, results of operations, financial condition and cash flows, and there is risk of additional tariffs and other kinds of restrictions, including in connection with the transition to new political administrations.”

Annual report 2025A · The company itself

“Department of Commerce has initiated an investigation under Section 232 of the Trade Expansion Act of 1962, as amended, to determine the effects of importing pharmaceuticals and pharmaceutical ingredients and medical devices on national security. This investigation may lead to the imposition of tariffs on pharmaceutical imports, consistent with the current U.S. administration's stated policy objective of reshoring pharmaceutical manufacturing to the U.S.”

Annual report 2025A · The company itself

“Tariff exclusions awarded to us by the U.S. Government require annual renewal, and policies for granting exclusions could shift.”

Annual report 2025A · The company itself

“More generally, several governments have raised the possibility of policies to induce “re-shoring” of supply chains, less reliance on imported supplies and greater national production. If such steps triggered retaliation in other markets, such as by restricting access to foreign products by their government-owned healthcare systems, the outcomes could have an adverse effect on our business, results of operations, financial condition and cash flows.”

Annual report 2025A · The company itself

“Our business is also subject to risks associated with U.S. and foreign legislation, regulations and trade agreements (including those resulting from the transition to new political administrations) relating to the materials we import, including quotas, duties, tariffs, or taxes, and other charges or restrictions on imports and the nature of materials that can be used in our products, which could adversely affect our operations and our ability to import materials used in our products at current or increased levels.”

Annual report 2025A · The company itself

“For example, the U.S. has enacted and proposed to enact significant new tariffs.”

Annual report 2025A · The company itself

“In addition, there continues to exist significant uncertainty about the future relationship between the U.S. and other countries with respect to trade policies, treaties, and tariffs. These developments, or the perception that they could occur, may have a significant adverse effect on global economic conditions and the stability of global financial markets, and may significantly reduce global trade and, in particular, trade between the impacted countries.”

Annual report 2025A · The company itself

“We cannot predict whether additional U.S. and foreign customs quotas, duties (including antidumping or countervailing duties), tariffs and any retaliatory counter measures, taxes, or other charges or restrictions, requirements as to where raw materials and component parts must be purchased, additional workplace regulations, or other restrictions on our imports will be imposed in the future or adversely modified, or what effect such actions would have on our costs of operations. Recently imposed or future quotas, duties or tariffs and any retaliatory counter measures may have a significant adverse effect on the cost of our products and the related components and raw materials (and the availability of such related component parts and raw materials) and our ability to sell products and services outside the U.S.”

Annual report 2025A · The company itself

“Future trade agreements or modifications to existing trade agreements could also provide our competitors with an advantage over us, which could have a significant adverse effect on our business, results of operations, financial condition and cash flows.”

Annual report 2025A · The company itself

“Our results have been adversely affected by, and we expect our results to continue to be negatively affected by, tariffs.”

Annual report 2025A · The company itself

“In addition, announcements regarding changes in U.S. trade policies and practices, including the implementation of global tariffs and proposed further tariffs (including potential medical device and pharmaceutical tariffs), have significantly affected financial markets and economic conditions. While we are in the process of implementing select tariff offsets and working to identify additional mitigation opportunities, our results have been adversely affected by these events and we expect for our results to continue to be negatively affected by tariffs.”

Annual report 2025A · The company itself

“Sole source supplier relationships may limit our ability to respond to these tariffs with alternative or lower cost raw materials or component parts.”

Annual report 2025A · The company itself

“Our IT systems and Technology are vulnerable to breakdown, interruption, cyber and other security attacks, system malfunction, unauthorized access, inadvertent exposure or disclosure of information, theft, and other events and, at times, requires the manual application of security upgrades or patches on each machine or device that utilizes the Technology. Third-party systems and solutions that we rely on are also vulnerable to the same risks and may contain defects in design or manufacture or other problems that could result in system disruption or compromise the information security of our own systems, products, and services.”

Annual report 2025A · The company itself

“Security threats, including cyber and other attacks, have become very sophisticated, frequent, and adaptive. The adversarial use of AI also poses unique challenges and may impact real-time detection capabilities and containment efforts.”

Annual report 2025A · The company itself

“Further, we expect that the breadth and complexity of our information and technology systems and infrastructure will increase as we work to expand our product offerings to utilize and generate data analytics and potentially AI (which create emerging enterprise risks, including cybersecurity, monitoring, and oversight). See “Risks Relating to Our Operations – We are exposed to risks associated with incorporating AI, machine learning and other emerging technologies into our products, services and operations”.”

Annual report 2025A · The company itself

“The continuing evolution of technology we use, including cloud-based computing, open-source software, data hosting, AI, and reliance on third parties and Software as a Service (Saas) solutions, whom may also use open-source software, cloud-based computing, data hosting, or AI tools, create additional opportunities for the unintentional, intentional, unauthorized or unlawful disclosure, exposure, dissemination, loss, alteration, access or destruction of Protected Information stored or processed in our devices, systems, servers, infrastructure, and products (collectively, Technology), and those of our Saas providers and third party service providers.”

Annual report 2025A · The company itself

“Additionally, certain of our products and systems collect Protected Information regarding customers, partners, patients and their therapies, and are internet enabled and connect to our systems, hospital networks, electronic medical record systems, or electronic health record systems, and are subject to the same risks, and could impact patient safety and lead to field actions or product recalls.”

Annual report 2025A · The company itself

“We, like other global companies, have experienced cyber incidents in the past (including ones related to the unauthorized access to or disclosure of data and to certain of our third-party service providers), and may experience them in the future. These events have exposed and may continue to expose vulnerabilities in our information technology systems, and could expose Protected Information to unauthorized third parties and/or cause temporary or loss or unavailability of such information.”

Annual report 2025A · The company itself

“We could also suffer strained relationships with customers, business partners, physicians and other healthcare professionals, increased costs, litigation or other negative consequences as a result of such cyber incidents.”

Annual report 2025A · The company itself

“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, heightened risks related to our information technology systems and networks, including cyber attacks, computer viruses, malicious software, security breaches and telecommunication failures, both for systems and networks we control directly and for those that employees and third-party developers rely on to work remotely.”

Annual report 2025A · The company itself

“However, we face risks and uncertainties related to the development, adoption and use of AI, ML and other emerging technologies. Additionally, our internal AI-related policies may not be effective in managing AI use and reducing inherent risks associated with the use of AI, including but not limited to AI-specific cybersecurity risks.”

Annual report 2025A · The company itself

“We also may have more difficulty protecting or enforcing our regulated personal data, confidential data, and intellectual property rights as a result of these technologies, and there may be a risk of data leakage or infringing on the intellectual property or data rights of others which could lead to regulatory action, or litigation, arbitration or other disputes over the ownership, validity, scope or enforcement of our or others’ patents, trademarks, copyrights, trade secrets or other proprietary rights.”

Annual report 2025A · The company itself

“Governmental authorities are also increasingly imposing cyber incident disclosure regulations with differing criteria for what incidents must be reported as well as the timelines in which to report them.”

Annual report 2025A · The company itself

“Additionally, some of our manufacturing facilities are located in the same geographic area. Loss or damage to, or closure of, a manufacturing facility or storage site due to a natural disaster (such as we experienced at our North Cove facility as a result of Hurricane Helene), war, acts of terrorism, pandemics (including COVID 19) or otherwise has adversely affected, and could in the future adversely affect, our ability to manufacture sufficient quantities of key products or deliver products to meet customer demand or contractual requirements, which has resulted, and may in the future result, in a loss of revenue and other adverse business consequences, including those identified in the paragraphs above.”

Annual report 2025A · The company itself

“For example, new clinical practices implemented after Hurricane Helene appear to have reset demand levels in our IV solutions business and negatively impacted sales of certain of our premix products.”

Annual report 2025A · The company itself

“These levels vary in 15 response to economic conditions, regulatory requirements, seasonality, natural disasters, wars, acts of terrorism, pandemics, epidemics, and other matters. 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 raw materials, sub-assemblies, or materials) have adversely affected our business, results of operations, financial condition, and cash flows and may continue to do so in the future.”

Annual report 2025A · The company itself

“Dollar, the Euro, the Mexican Peso, and currencies in emerging market countries), disputes between countries, trade relationships and conflicts, diminished or insufficient protection of intellectual property, and disruption or destruction of operations in a significant geographic region regardless of cause, including natural disaster, pandemic, power loss, cyber-attack, data breach, war, terrorism, riot, labor disruption, civil insurrection, or social unrest.”

Annual report 2025A · The company itself

“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, and cash flows. The long-term effects of climate change are difficult to predict and may be widespread. Climate change has increased, and in the future may continue to increase, physical risks (such as water scarcity, rising sea levels, or frequency and severity of extreme weather conditions, including natural disasters such as hurricanes, cyclones, and typhoons), social and human effects (such as population dislocations or harm to health and well-being), compliance costs and transition risks (including due to changes in regulation, technology, or stakeholder expectations), shifts in market trends (for example if customers increasingly prioritize purchasing products that can be reused or recycled or have a lower perceived carbon footprint).”

Annual report 2025A · The company itself

“Impacts of climate change have included and may in the future include, damage to manufacturing facilities (including as a result of Hurricane Helene), disruption to local infrastructure and utilities, loss of sales, and interruption to our supply chain and manufacturing operations by adversely affecting our ability to procure goods or services required for the operation of our business at the quantities and levels we require due to impairment of the availability and increases in the cost of certain products, materials, commodities, and energy.”

Annual report 2025A · The company itself

“Further, the impacts of climate change, particularly severe weather events and droughts, have negatively impacted, and may in the future negatively impact, our ability to obtain material energy and water sources and other resources, including employee availability and access to shipping routes.”

Annual report 2025A · The company itself

“Additionally, a growing number of countries have instituted or are contemplating introducing regional or national tender processes driven primarily by price. In some cases, such processes may favor local companies to multinational companies like us. In other instances, multinational companies, including Baxter, are subject to a separate tender bidding process in which they compete only with each other and not with domestic companies.”

Annual report 2025A · The company itself

“These levels vary in 15 response to economic conditions, regulatory requirements, seasonality, natural disasters, wars, acts of terrorism, pandemics, epidemics, and other matters. 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 raw materials, sub-assemblies, or materials) have adversely affected our business, results of operations, financial condition, and cash flows and may continue to do so in the future.”

Annual report 2025A · The company itself

“Our operations are subject to risks inherent in conducting business globally and under the laws, regulations and customs of various jurisdictions and geographies. These risks include changes in exchange controls and other governmental actions, loss of business in government and public tenders that are held annually in many cases, increasingly complex labor environments, availability of raw materials and component parts, changes in taxation, tariffs, sanctions, embargos, export control restrictions, changes in or violations of U.S. or local laws, dependence on a few government entities as customers, pricing restrictions, economic and political instability, monetary or currency volatility or instability (including as it relates to the U.S.”

Annual report 2025A · The company itself

“Dollar, the Euro, the Mexican Peso, and currencies in emerging market countries), disputes between countries, trade relationships and conflicts, diminished or insufficient protection of intellectual property, and disruption or destruction of operations in a significant geographic region regardless of cause, including natural disaster, pandemic, power loss, cyber-attack, data breach, war, terrorism, riot, labor disruption, civil insurrection, or social unrest.”

Annual report 2025A · The company itself

“Additionally, U.S. government (through agencies such as the U.S. Department of the Treasury’s Office of Foreign Assets Control and the U.S. Department of Commerce, Bureau of Industry and Security) administers laws and regulations that restrict U.S. persons and, in some instances, non- U.S. persons, in conducting activities, transacting business or making investments in certain countries or regions, or with governments, entities and individuals subject to U.S. economic sanctions. Similar restrictions have been or may be enacted by other governments with respect to certain customers located in the U.S.”

Annual report 2025A · The company itself

“Supply Constraints, Tariffs and Global Economic Conditions We have experienced challenges to our global supply chain, including, as a result of adverse impacts from significant weather events like Hurricane Helene, as well as adverse impacts as result of other global macroeconomic and geopolitical events, which have had a negative impact on our results of operations and may do so in the future.”

Annual report 2025A · The company itself

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

Annual report 2025A · The company itself

“Global economic conditions, including inflation, have adversely affected, and could continue to adversely affect, our operations. 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 recession, have resulted in, and may continue to result in, unfavorable conditions that negatively affect demand for our products and exacerbate other risks described in this “Risk Factors” section that affect our business, results of operations, financial condition, and cash flows. Both domestic and international markets have been experiencing significant inflationary pressures in recent years and inflation rates in the U.S., as well as in other countries in which we operate, are currently expected to continue at elevated levels for the near term.”

Annual report 2025A · The company itself

“The escalating global economic competition and trade tensions among the U.S. and its trading partners could have an adverse effect on our business, results of operations, financial condition and cash flows, and there is risk of additional tariffs and other kinds of restrictions, including in connection with the transition to new political administrations.”

Annual report 2025A · The company itself

“In addition, there continues to exist significant uncertainty about the future relationship between the U.S. and other countries with respect to trade policies, treaties, and tariffs. These developments, or the perception that they could occur, may have a significant adverse effect on global economic conditions and the stability of global financial markets, and may significantly reduce global trade and, in particular, trade between the impacted countries.”

Annual report 2025A · The company itself

“Inflation and general macroeconomic factors have caused certain of our customers to reduce or delay orders for our products and services and could cause them to do so in the future, which could have a material adverse impact on our sales and results of operations.”

Annual report 2025A · The company itself

“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, and cash flows. The long-term effects of climate change are difficult to predict and may be widespread. Climate change has increased, and in the future may continue to increase, physical risks (such as water scarcity, rising sea levels, or frequency and severity of extreme weather conditions, including natural disasters such as hurricanes, cyclones, and typhoons), social and human effects (such as population dislocations or harm to health and well-being), compliance costs and transition risks (including due to changes in regulation, technology, or stakeholder expectations), shifts in market trends (for example if customers increasingly prioritize purchasing products that can be reused or recycled or have a lower perceived carbon footprint).”

Annual report 2025A · The company itself

“In addition, new or expanded local, state, regional, federal, and global legal and regulatory requirements relating to climate change and other sustainability topics have been proposed or adopted in recent years and may continue to emerge in the future. As a result of these developments, we may experience disruptions in or increases in the costs associated with R&D, sourcing, manufacturing, distributing, and end of life of our products.”

Annual report 2025A · The company itself

“These requirements continue to evolve, and jurisdictions in which we operate may adopt additional laws and regulations on such topics or may continue to change their enforcement of existing laws and regulations. Additionally, as local, state, regional, federal, and global legal and regulatory requirements relating to climate change and other sustainability topics continue to evolve, they may create inconsistent or conflicting obligations that have led to, and could continue to lead to, increased compliance costs, and regulatory uncertainty for us, our suppliers, and customers, any of which could have a significant adverse effect on our business, financial condition, result of operations and cash flows.”

Annual report 2025A · The company itself

“If we or our suppliers are unable or unwilling to comply with regulatory sustainability requirements, we may experience an adverse impact on our ability to manufacture or supply certain products as well as increased costs and interruptions in the supply chain. We could be subject to litigation, substantial fines, and other damages if we fail to comply with related risk assessment requirements, which could adversely impact our financial condition and results of operations.”

Annual report 2025A · The company itself

“For example, our medical devices that are sold or distributed in the EU have to comply with the EU Medical Device Regulation that entered into force in May 2021. The EU Medical Device Regulation currently provides a staggered phase-in period for manufacturers to comply with related regulations through December 2028. The regulation also requires companies that wish to manufacture and distribute medical devices in EU member states to meet certain quality system and safety 21 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.”

Annual report 2025A · The company itself

“We expect to experience some of these and other challenges related to our supply chain in future periods. These challenges, including the unavailability of certain raw materials and component parts, have also had a negative impact on our sales for certain product categories due to our inability to fully satisfy demand and may continue to have a negative impact on our sales in the future.”

Annual report 2025A · The company itself

“We have faced, and may in the future face, difficulties obtaining supplies of key materials, such as electromechanical components, active ingredients for pharmaceuticals and resins, due to supply chain disruptions and global pandemics (including COVID-19).”

Annual report 2025A · The company itself

“For example, material or sustained increases in the price of oil have had an adverse impact on the cost of many of the plastic materials or resins we use to make and package our products, as well as our transportation/freight costs.”

Annual report 2025A · The company itself

“Other governments globally are collecting information regarding, or have limited or prohibited, or are considering limiting or prohibiting, the use of certain chemicals, including, but not limited to, polyvinyl chloride, which is used in certain of our products, and per- and polyfluoroalkyl substances (PFAS) which may be used in certain of our products. These regulatory changes could materially adversely impact our ability to manufacture or supply certain products.”

Annual report 2025A · The company itself

“Specific new products must undergo lengthy and rigorous testing and other extensive, costly, and time-consuming procedures mandated by FDA and foreign regulatory authorities. The same testing and procedures sometimes apply to our products that require authorization or renewal or are subject to changes in laws or regulations.”

Annual report 2025A · The company itself

“As a medical products company, our operations and many of the products manufactured or sold by us are subject to extensive regulation by numerous government agencies, both within and outside the United States. These regulations (as described in Item 1, Government Regulation, of this Annual Report on Form 10-K) require that we obtain specific approval from FDA or the applicable non-U.S. regulatory authorities before we can market and sell most of our products in a particular country.”

Annual report 2025A · The company itself

“Global economic conditions, including inflation, have adversely affected, and could continue to adversely affect, our operations. 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 recession, have resulted in, and may continue to result in, unfavorable conditions that negatively affect demand for our products and exacerbate other risks described in this “Risk Factors” section that affect our business, results of operations, financial condition, and cash flows. Both domestic and international markets have been experiencing significant inflationary pressures in recent years and inflation rates in the U.S., as well as in other countries in which we operate, are currently expected to continue at elevated levels for the near term.”

Annual report 2025A · The company itself

“We have experienced and are likely in the future to experience inflationary and other increases in manufacturing costs and operating expenses (including as a result of the aforementioned tariffs) and are limited in our ability to pass these cost increases on to our customers in a timely manner or at all due to the longer term nature of our customer contracts and arrangements, which could have a material adverse impact on our profitability and results of operations.”

Annual report 2025A · The company itself

“As of December 31, 2025, we had approximately $9.48 billion of indebtedness outstanding. While we repaid $3.81 billion of legacy indebtedness in 2025 (which repayment does not include $2.00 billion of indebtedness repaid with proceeds from a new notes offering), our significant level of indebtedness requires us to use a substantial 10 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, acquisitions, share repurchases and other activities, and may create competitive disadvantages for us relative to other companies with lower debt levels.”

Annual report 2025A · The company itself

“Global economic conditions, including inflation, have adversely affected, and could continue to adversely affect, our operations. 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 recession, have resulted in, and may continue to result in, unfavorable conditions that negatively affect demand for our products and exacerbate other risks described in this “Risk Factors” section that affect our business, results of operations, financial condition, and cash flows. Both domestic and international markets have been experiencing significant inflationary pressures in recent years and inflation rates in the U.S., as well as in other countries in which we operate, are currently expected to continue at elevated levels for the near term.”

Annual report 2025A · The company itself

“We generate a meaningful portion of our net sales and profit outside the U.S. and currency exchange rates have been especially volatile in recent years. As a result, currency fluctuations have affected, and may continue to affect, the reported value of our assets and liabilities, as well as our cash flows and results of operations.”

Annual report 2025A · The company itself

“Additionally, adverse changes in foreign currency exchange rates have increased, and could continue to increase, our costs of sourcing certain raw materials in some jurisdictions.”

Annual report 2025A · The company itself

“For example, material or sustained increases in the price of oil have had an adverse impact on the cost of many of the plastic materials or resins we use to make and package our products, as well as our transportation/freight costs.”

Annual report 2025A · The company itself

“We generate a meaningful portion of our net sales and profit outside the U.S. and currency exchange rates have been especially volatile in recent years. As a result, currency fluctuations have affected, and may continue to affect, the reported value of our assets and liabilities, as well as our cash flows and results of operations.”

Annual report 2025A · The company itself

“In addition, new or expanded local, state, regional, federal, and global legal and regulatory requirements relating to climate change and other sustainability topics have been proposed or adopted in recent years and may continue to emerge in the future. As a result of these developments, we may experience disruptions in or increases in the costs associated with R&D, sourcing, manufacturing, distributing, and end of life of our products.”

Annual report 2025A · The company itself

“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 of key stakeholders on these matters. Governmental authorities, investors, customers, employees, certain institutional investors, lenders, and other stakeholders are increasingly focused on sustainability and corporate responsibility commitments, practices, performance and disclosures. However, there is no guarantee that we will be able to achieve any sustainability and corporate responsibility goals or maintain any commitments or practices we have publicly announced in the past or that we may announce in the future, including due to rapidly changing regulatory, technological, scientific, and market developments that are outside of our control.”

Annual report 2025A · The company itself

“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 other sustainability and corporate responsibility efforts, if we fail to accurately measure or report our progress with respect to our goals and initiatives or if we are perceived to not be acting responsibly in key sustainability and corporate responsibility areas. Responding to these sustainability and corporate responsibility considerations and implementation of our related goals and initiatives involves risks and uncertainties, requires investments (some of which still need to be funded or identified), and depends in part on our relative performance (or perceived performance) against third-parties that is beyond our control.”

Annual report 2025A · The company itself

“Additionally, organizations that provide information to investors on corporate governance and related matters have developed ratings processes for evaluating companies on their respective approaches to sustainability and corporate responsibility matters, which are employed by investors, lenders, and customers to inform their investment, financing, or purchasing decisions. A failure to adequately meet stakeholder expectations, which may differ or conflict, may result in the loss of business, reputational impacts, diluted market valuation, an inability to attract customers, and an inability to attract and retain talent.”

Annual report 2025A · The company itself

“Furthermore, stakeholder expectations related to key sustainability and corporate responsibility topics continue to diverge across the jurisdictions in which we operate. Our stakeholders may have conflicting views on our goals, commitments, and initiatives with one another. If we fail to satisfy the differing and evolving sustainability and corporate responsibility expectations of our investors, customers, employees, and other stakeholders, we could experience reduced demand for our products, loss of customers and employees, and suffer other negative impacts to our business, reputation, and results of operations.”

Annual report 2025A · The company itself

“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. We are required to comply with increasingly complex and changing legal and regulatory requirements and frameworks in the U.S. and in other countries that govern not only the 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 timely disclosure of 24 cybersecurity incidents.”

Annual report 2025A · The company itself

“In the U.S., for example, we are subject to the Health Insurance Portability and Accountability Act, as amended (HIPAA), the Health Information Technology for Economic and Clinical Health Act and the California Consumer Privacy Act (the CCPA) and California Privacy Rights Act as well as other new and emerging state laws. Further, we are, or will be, subject to, amongst other applicable laws, the EU’s General Data Protection Regulation (the GDPR) the EU Data Act, the Artificial Intelligence Act, and the NIS2 Directive.”

Annual report 2025A · The company itself

“Furthermore, FDA in the United States, the European Medicines Agency in the Europe Union, the Medicines & Healthcare products Regulatory Agency in the United Kingdom, Health Canada in Canada, the China Food and Drug Administration in China, and other government agencies, inside and outside of the United States, administer requirements covering the testing, safety, effectiveness, manufacturing, labeling, promotion and advertising, pricing, distribution, and post-market surveillance of our products.”

Annual report 2025A · The company itself

“Drug Compounding net sales increased 10% for the year ended December 31, 2025, as compared to the prior year period, driven by improved product mix and increased demand for our international pharmacy compounding offerings.”

Annual report 2025A · The company itself

“Our global footprint and the critical nature of our products and services, which are sold in over 100 countries as of December 31, 2025, play a key role in expanding access to healthcare in emerging and developed countries.”

Annual report 2025A · The company itself

“International sales totaled $5.12 billion in 2025, an increase of 7% compared to 2024 on a reported basis and 5% on an operational sales basis.”

Annual report 2025A · The company itself

“Moreover, increased regulatory scrutiny around potential impurities, such as nitrosamines, in our products could lead to regulatory and legal actions, product recalls and seizures, fines and penalties, interruption of production leading to product shortages, import bans or denials of import certifications, delays or denials in new product approvals or line extensions or supplemental approvals of current products pending resolution of the issues, and reputational harm, any of which could adversely affect our business.”

Annual report 2025A · The company itself

“We have faced, and may in the future face, difficulties obtaining supplies of key materials, such as electromechanical components, active ingredients for pharmaceuticals and resins, due to supply chain disruptions and global pandemics (including COVID-19).”

Annual report 2025A · The company itself

“Other governments globally are collecting information regarding, or have limited or prohibited, or are considering limiting or prohibiting, the use of certain chemicals, including, but not limited to, polyvinyl chloride, which is used in certain of our products, and per- and polyfluoroalkyl substances (PFAS) which may be used in certain of our products. These regulatory changes could materially adversely impact our ability to manufacture or supply certain products.”

Annual report 2025A · The company itself

“Furthermore, FDA in the United States, the European Medicines Agency in the Europe Union, the Medicines & Healthcare products Regulatory Agency in the United Kingdom, Health Canada in Canada, the China Food and Drug Administration in China, and other government agencies, inside and outside of the United States, administer requirements covering the testing, safety, effectiveness, manufacturing, labeling, promotion and advertising, pricing, distribution, and post-market surveillance of our products.”

Annual report 2025A · The company itself

“Our global footprint and the critical nature of our products and services, which are sold in over 100 countries as of December 31, 2025, play a key role in expanding access to healthcare in emerging and developed countries.”

Annual report 2025A · The company itself

“Financial Results Our global net sales totaled $11.24 billion in 2025, an increase of 6% over 2024 on a reported basis and 3% on an operational sales basis. International sales totaled $5.12 billion in 2025, an increase of 7% compared to 2024 on a reported basis and 5% on an operational sales basis. Sales in the United States totaled $6.12 billion in 2025, an increase of 5% compared to 2024 on a reported basis and 1% on an operational basis.”

Annual report 2025A · The company itself

“The insurance we have procured related to cybersecurity risks may not cover a particular cyber incident or such coverage may be insufficient.”

Annual report 2025A · The company itself

“Further, any perceived increase in the potential of severe weather events and business interruption may put an upward pressure on the cost of our risk insurance premiums, which could adversely impact our business, results of operations, financial condition, and cash flows.”

Annual report 2025A · The company itself

“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. Competition for top talent in the healthcare industry can be intense, especially for experienced management and technical and professional employees, which could increase costs associated with identifying, attracting, and retaining such individuals.”

Annual report 2025A · The company itself

“A portion of our workforce is unionized, and we could face labor disruptions that would interfere with our operations. Some of our employees both in and outside of the U.S. work under collective bargaining agreements or national trade union agreements or are subject to works councils. Significant work stoppages as a result of labor disagreements may occur in the future, including as a result of any failure to maintain the collective bargaining agreements we have in place for one of our U.S. manufacturing facilities (which are scheduled to expire in January 2027 and January 2029). Our inability to negotiate satisfactory new agreements or a labor disturbance at any of our manufacturing facilities could have a significant adverse effect on our operations.”

Annual report 2025A · The company itself

“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 to time we require warehousing for our products. If any of these providers were to encounter delivery performance issues, such as loss, damage, or destruction of any systems or machines, it would be costly to replace such systems or machines in a 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.”

Annual report 2025A · The company itself

“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.”

Annual report 2025A · The company itself

“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, heightened risks related to our information technology systems and networks, including cyber attacks, computer viruses, malicious software, security breaches and telecommunication failures, both for systems and networks we control directly and for those that employees and third-party developers rely on to work remotely.”

Annual report 2025A · The company itself

“Our ethics and compliance programs, training, monitoring, and policies may not always protect us from conduct by individual employees that violate these laws. Violations or allegations of violations of these laws may result in large civil and criminal penalties, debarment, or exclusion from participating in government programs, diversion of management time, attention, and resources, and may otherwise have an adverse effect on our business, results of operations, financial condition, and cash flows.”

Annual report 2025A · The company itself

“We are also subject to environmental laws, which are becoming more stringent throughout the world. For example, multiple jurisdictions, including the EEA and certain U.S. states have finalized, or are introducing, regulations associated with the use of Bis(2-ethylhexyl) (DEHP). We have obtained authorization to continue to use DEHP in certain of our products in the EEA, and our processes to remove DEHP from these products are in progress, but we cannot guarantee they will be completed prior to the effectiveness of all scheduled phase-outs, which may impact our ability to compete globally.”

Annual report 2025A · The company itself

“These levels vary in 15 response to economic conditions, regulatory requirements, seasonality, natural disasters, wars, acts of terrorism, pandemics, epidemics, and other matters. 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 raw materials, sub-assemblies, or materials) have adversely affected our business, results of operations, financial condition, and cash flows and may continue to do so in the future.”

Annual report 2025A · The company itself

“Care and Connectivity Solutions net sales increased 5% for the year ended December 31, 2025, driven by increased volume associated with increased capital spending by customers in the U.S. for both patient support systems and surgical solutions product categories, as compared to the prior year periods, as well as higher installations of our care communications products.”

Annual report 2025A · The company itself

“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 to time we require warehousing for our products. If any of these providers were to encounter delivery performance issues, such as loss, damage, or destruction of any systems or machines, it would be costly to replace such systems or machines in a 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.”

Annual report 2025A · The company itself

“Further, the impacts of climate change, particularly severe weather events and droughts, have negatively impacted, and may in the future negatively impact, our ability to obtain material energy and water sources and other resources, including employee availability and access to shipping routes.”

Annual report 2025A · The company itself

“Drug Compounding net sales increased 10% for the year ended December 31, 2025, as compared to the prior year period, driven by improved product mix and increased demand for our international pharmacy compounding offerings.”

Annual report 2025A · The company itself

“Our global footprint and the critical nature of our products and services, which are sold in over 100 countries as of December 31, 2025, play a key role in expanding access to healthcare in emerging and developed countries.”

Annual report 2025A · The company itself

“International sales totaled $5.12 billion in 2025, an increase of 7% compared to 2024 on a reported basis and 5% on an operational sales basis.”

Annual report 2025A · The company itself