SUPPLEMENTAL FINANCIAL INFORMATION

12 Months Ended

Dec. 31, 2025

Organization, Consolidation and Presentation of Financial Statements [Abstract]


SUPPLEMENTAL FINANCIAL INFORMATION

Allowance for Doubtful Accounts

The following table is a summary of changes in our allowance for doubtful accounts for the years ended December 31, 2025 and 2024.


years ended December 31 (in millions)	2025		2024		2023
Balance at beginning of period	$	71	$	62	$	50
Charged (released) to costs and expenses	(6)		7		7
Write-offs	(5)		(8)		(4)
Currency translation adjustments	3		10		9
Balance at end of period	$	63	$	71	$	62

Inventories


as of December 31 (in millions)	2025		2024
Raw materials	$	536	$	510
Work in process	369		266
Finished goods	1,327		1,270
Inventories	$	2,232	$	2,046

Prepaid Expenses and Other Current Assets


as of December 31 (in millions)	2025		2024
Prepaid value added taxes	$	86	$	167
Prepaid income taxes	175		199
Spare parts	140		123
Contract assets	71		51

Derivative assets	—		8
Other	341		205
Prepaid expenses and other current assets	$	813	$	753

Property, Plant and Equipment, Net


as of December 31 (in millions)	2025		2024
Land and land improvements	$	119	$	115
Buildings and leasehold improvements	1,402		1,301
Machinery and equipment	5,454		5,047
Equipment on lease with customers	375		467
Construction in progress	704		718
Total property, plant and equipment, at cost	8,054		7,648
Accumulated depreciation	(5,144)		(4,778)
Property, plant and equipment, net	$	2,910	$	2,870

Depreciation expense was $383 million in 2025, $372 million in 2024 and $394 million in 2023.

Other Non-Current Assets


as of December 31 (in millions)	2025		2024
Deferred tax assets	$	200	$	204
Non-current receivables, net	50		50
Contract assets	76		82
Capitalized implementation costs in hosting arrangements	89		102
Pension and other postretirement benefits	66		56
Investments	103		109
Other	115		152
Other non-current assets	$	699	$	755

Accrued Expenses and Other Current Liabilities


as of December 31 (in millions)	2025		2024

Common stock dividends payable	$	5	$	87
Employee compensation and withholdings	397		447
Property, payroll and certain other taxes	96		96
Contract liabilities	141		131
Restructuring liabilities	127		112
Accrued rebates	215		214
Operating lease liabilities	81		80
Income taxes payable	83		121
Pension and other postretirement benefits	39		39

Other	784		534
Accrued expenses and other current liabilities	$	1,968	$	1,861

Other Non-Current Liabilities


as of December 31 (in millions)	2025		2024
Pension and other postretirement benefits	$	637	$	678
Deferred tax liabilities	245		103
Long-term tax liabilities	146		94

Contingent payments related to acquisitions	7		11
Contract liabilities	36		40
Litigation and environmental reserves	31		29
Restructuring liabilities	6		10
Other	179		111
Other non-current liabilities	$	1,287	$	1,076

Interest Expense, net


years ended December 31 (in millions)	2025		2024		2023
Interest costs	$	304	$	421	$	523
Interest costs capitalized	(14)		(13)		(15)
Interest expense	290		408		508
Interest income	(52)		(67)		(69)
Interest expense, net	$	238	$	341	$	439

Other (Income) Expense, net


years ended December 31 (in millions)	2025		2024		2023
Foreign exchange (gains) losses, net	$	18	$	25	$	53
Change in fair value of marketable equity securities	(1)		(3)		(7)

Pension and other postretirement benefit (gains) losses	(45)		(39)		(48)
Gain on debt extinguishment	(16)		—		—
Equity method investment impairment	9		—		—

Non-marketable investment impairments	—		—		34
Other, net	(6)		(21)		(6)
Other (income) expense, net	$	(41)	$	(38)	$	26

Supplemental Cash Flow Information

Non-Cash Operating and Investing Activities

Purchases of property, plant and equipment included in accounts payable and accrued liabilities as of December 31, 2025, 2024 and 2023 was $74 million, $64 million and $58 million, respectively.

Other Supplemental Information

As discussed in Note 1, Summary of Significant Accounting Policies, we have elected to prospectively adopt the guidance in ASU 2023-09. The following table is a summary of income taxes paid by jurisdiction for the year ended December 31, 2025.


year ended December 31 (in millions)	2025
United States - federal	$	12
United States - state and local	12
Foreign
Australia	18
Canada	25
Germany	39
Other	116
Total income taxes paid	$	222

The following table is a summary of interest paid for the years ended December 31, 2025, 2024 and 2023 and income taxes paid, in accordance with the guidance prior to the adoption of ASU 2023-09, for the years ended December 31, 2024 and 2023.


years ended December 31 (in millions)	2025		2024		2023
Interest paid, net of portion capitalized	$	303	$	401	$	484
Income taxes paid			$	223	$	174

BAXTER INTERNATIONAL INC 10-K