QUARTERLY FINANCIAL DATA (UNAUDITED) (Tables)

12 Months Ended

Dec. 31, 2019

Quarterly Financial Information Disclosure [Abstract]

Quarterly Financial Results and Market for Company's Stock

	As Restated
years ended December 31 (in millions, except per share data)	First quarter		Second quarter		Third quarter		Fourth quarter¹		Full year
2019
Net sales	$	2,638	$	2,834	$	2,851	$	3,039	$	11,362
Gross margin	1,080		1,153		1,230		1,298		4,761
Net income (loss) attributable to Baxter stockholders	342		313		369		(23)		1,001
Earnings (loss) per share
Basic	0.67		0.61		0.72		(0.05)		1.97
Diluted	0.66		0.60		0.71		(0.05)		1.93
Cash dividends declared per share	0.190		0.220		0.220		0.220		0.850
Market price per share
High	81.31		82.41		89.78		88.45		89.78
Low	64.48		73.44		81.40		76.70		64.48
	As Restated						As Restated
	First quarter		Second quarter		Third quarter		Fourth quarter		Full year
2018
Net sales	$	2,692	$	2,813	$	2,761	$	2,833	$	11,099
Gross margin	1,121		1,223		1,232		1,183		4,759
Income from continuing operations	382		341		518		311		1,552
Earnings per share from continuing operations
Basic	0.71		0.64		0.97		0.59		2.91
Diluted	0.69		0.62		0.95		0.58		2.84
Loss from discontinued operations, net of tax	—		—		—		(6)		(6)
Loss per share from discontinued operations
Basic	—		—		—		(0.01)		(0.01)
Diluted	—		—		—		(0.01)		(0.01)
Net income	382		341		518		305		1,546
Earnings per share
Basic	0.71		0.64		0.97		0.58		2.90
Diluted	0.69		0.62		0.95		0.57		2.83
Cash dividends declared per share	0.160		0.190		0.190		0.190		0.730
Market price per share
High	72.26		75.41		77.75		77.80		77.80
Low	62.56		63.43		70.71		61.45		61.45

¹Results for the fourth quarter and full year of 2019 include a $755 million pre-tax charge related to the annuitization of a portion of our U.S. pension plan.

Schedule of Error Corrections and Prior Period Adjustments

Baxter International Inc.
Condensed Consolidated Balance Sheets
(in millions, except per share)
	As Restated
	June 30, 2019		March 31, 2019
Current assets:
Cash and cash equivalents	$	2,934	$	1,902
Accounts receivable, net	1,897		1,801
Inventories	1,756		1,743
Prepaid expenses and other current assets	642		614
Total current assets	7,229		6,060
Property, plant and equipment, net	4,485		4,476
Goodwill	2,937		2,929
Other intangible assets, net	1,363		1,440
Operating lease right-of-use assets	595		513
Other non-current assets	894		823
Total assets	$	17,503	$	16,241
Current liabilities:
Short-term debt	$	2	$	796
Current maturities of long-term debt and finance lease obligations	2		2
Accounts payable and accrued liabilities	2,553		2,478
Total current liabilities	2,557		3,276
Long-term debt and finance lease obligations	5,157		3,451
Operating lease liabilities	496		417
Other non-current liabilities	1,490		1,504
Total liabilities	9,700		8,648
Commitments and contingencies
Equity:
Common stock, $1 par value, authorized 2,000,000,000 shares, issued 683,494,944 shares at June 30, 2019 and March 31, 2019	683		683
Common stock in treasury, at cost, 173,275,586 shares at June 30, 2019 and 173,447,198 shares at March 31, 2019	(10,322)		(10,284)
Additional contributed capital	5,906		5,839
Retained earnings	15,598		15,414
Accumulated other comprehensive (loss) income	(4,086)		(4,082)
Total Baxter stockholders’ equity	7,779		7,570
Noncontrolling interests	24		23
Total equity	7,803		7,593
Total liabilities and equity	$	17,503	$	16,241

Baxter International Inc.
Condensed Consolidated Balance Sheets
(in millions, except per share)
	As Restated
	September 30, 2018		June 30, 2018		March 31, 2018
Current assets:
Cash and cash equivalents	$	2,863	$	2,858	$	2,949
Accounts receivable, net	1,837		1,789		1,818
Inventories	1,716		1,616		1,578
Prepaid expenses and other current assets	615		621		610
Total current assets	7,031		6,884		6,955
Property, plant and equipment, net	4,476		4,486		4,576
Goodwill	2,978		2,981		3,103
Other intangible assets, net	1,400		1,424		1,505
Other non-current assets	918		744		704
Total assets	$	16,803	$	16,519	$	16,843
Current liabilities:
Current maturities of long-term debt and finance lease obligations	$	3	$	3	$	3
Accounts payable and accrued liabilities	2,660		2,583		2,598
Total current liabilities	2,663		2,586		2,601
Long-term debt and finance lease obligations	3,480		3,491		3,550
Other non-current liabilities	1,570		1,612		1,630
Total liabilities	7,713		7,689		7,781
Commitments and contingencies
Equity:
Common stock, $1 par value, authorized 2,000,000,000 shares, issued 683,494,944 shares at September 30, 2018, June 30, 2018 and March 31, 2018	683		683		683
Common stock in treasury, at cost, 150,213,621 shares at September 30, 2018, 148,485,202 shares at June 30, 2018 and 146,993,164 shares at March 31, 2018	(8,639)		(8,485)		(8,354)
Additional contributed capital	5,931		5,916		5,912
Retained earnings	14,886		14,484		14,254
Accumulated other comprehensive (loss) income	(3,754)		(3,756)		(3,427)
Total Baxter stockholders’ equity	9,107		8,842		9,068
Noncontrolling interests	(17)		(12)		(6)
Total equity	9,090		8,830		9,062
Total liabilities and equity	$	16,803	$	16,519	$	16,843

Baxter International Inc.
Condensed Consolidated Statements of Income
(in millions, except per share)
	As Restated
	June 30, 2019				March 31, 2019
	Six months ended		Three months ended		Three months ended
Net sales	$	5,472	$	2,834	$	2,638
Cost of sales	3,239		1,681		1,558
Gross margin	2,233		1,153		1,080
Selling, general and administrative expenses	1,242		641		601
Research and development expenses	295		166		129
Other operating income, net	(37)		(4)		(33)
Operating income	733		350		383
Interest expense, net	38		20		18
Other (income) expense, net	(17)		4		(21)
Income before income taxes	712		326		386
Income tax expense	57		13		44
Net income	$	655	$	313	$	342
Earnings per share
Basic	$	1.28	$	0.61	$	0.67
Diluted	$	1.26	$	0.60	$	0.66
Weighted-average number of shares outstanding
Basic	511		510		512
Diluted	520		519		522

Baxter International Inc.
Condensed Consolidated Statements of Income
(in millions, except per share)
	As Restated
	December 31, 2018		June 30, 2018				March 31, 2018
	Three months ended		Six months ended		Three months ended		Three months ended
Net sales	$	2,833	$	5,505	$	2,813	$	2,692
Cost of sales	1,650		3,161		1,590		1,571
Gross margin	1,183		2,344		1,223		1,121
Selling, general and administrative expenses	627		1,309		676		633
Research and development expenses	175		313		172		141
Other operating income, net	(10)		(89)		(2)		(87)
Operating income	391		811		377		434
Interest expense, net	11		23		11		12
Other (income) expense, net	(33)		(44)		(38)		(6)
Income from continuing operations before income taxes	413		832		404		428
Income tax expense	102		109		63		46
Income from continuing operations	311		723		341		382
Loss from discontinued operations, net of tax	(6)		—		—		—
Net income	$	305	$	723	$	341	$	382
Earnings per share from continuing operations
Basic	$	0.59	$	1.35	$	0.64	$	0.71
Diluted	$	0.58	$	1.32	$	0.62	$	0.69
Loss per share from discontinued operations
Basic	$	(0.01)	$	—	$	—	$	—
Diluted	$	(0.01)	$	—	$	—	$	—
Earnings per share
Basic	$	0.58	$	1.35	$	0.64	$	0.71
Diluted	$	0.57	$	1.32	$	0.62	$	0.69
Weighted-average number of shares outstanding
Basic	528		537		535		539
Diluted	538		549		547		551

Baxter International Inc.
Condensed Consolidated Statements of Comprehensive Income
(in millions)
	As Restated
	June 30, 2019				March 31, 2019
	Six months ended		Three months ended		Three months ended
Net income	$	655	$	313	$	342
Other comprehensive (loss) income, net of tax:
Currency translation adjustments	(95)		2		(97)
Pension and other postretirement benefit plans	20		6		14
Hedging activities	(27)		(12)		(15)
Total other comprehensive (loss) income, net of tax	(102)		(4)		(98)
Comprehensive income	$	553	$	309	$	244

Baxter International Inc.
Condensed Consolidated Statements of Comprehensive Income
(in millions)
	As Restated
	June 30, 2018				March 31, 2018
	Six months ended		Three months ended		Three months ended
Net income	$	723	$	341	$	382
Other comprehensive (loss) income, net of tax:
Currency translation adjustments	(305)		(368)		63
Pension and other postretirement benefit plans	85		28		57
Hedging activities	6		11		(5)
Total other comprehensive (loss) income, net of tax	(214)		(329)		115
Comprehensive income	$	509	$	12	$	497

Baxter International Inc.
Condensed Consolidated Statements of Changes in Equity
(in millions)
	As Restated
	For the Three Months Ended June 30, 2019
	Baxter International Inc. stockholders' equity
	Common stock shares	Common stock		Common stock shares in treasury	Common stock in treasury		Additional contributed capital		Retained earnings		Accumulated other comprehensive income (loss)		Total Baxter stockholders' equity		Noncontrolling interests		Total equity
Balance as of April 1, 2019	683	$	683	173	$	(10,284)	$	5,839	$	15,414	$	(4,082)	$	7,570	$	23	$	7,593
Net income	—	—		—	—		—		313		—		313		—		313
Other comprehensive income (loss)	—	—		—	—		—		—		(4)		(4)		—		(4)
Purchases of treasury stock	—	—		2	(157)		46		—		—		(111)		—		(111)
Stock issued under employee benefit plans and other	—	—		(2)	119		21		(17)		—		123		—		123
Dividends declared on common stock	—	—		—	—		—		(112)		—		(112)		—		(112)
Change in noncontrolling interests	—	—		—	—		—		—		—		—		1		1
Balance as of June 30, 2019	683	$	683	173	$	(10,322)	$	5,906	$	15,598	$	(4,086)	$	7,779	$	24	$	7,803

Baxter International Inc.
Condensed Consolidated Statements of Changes in Equity
(in millions)
	As Restated
	For the Six Months Ended June 30, 2019
	Baxter International Inc. stockholders' equity
	Common stock shares	Common stock		Common stock shares in treasury	Common stock in treasury		Additional contributed capital		Retained earnings		Accumulated other comprehensive income (loss)		Total Baxter stockholders' equity		Noncontrolling interests		Total equity
Balance as of January 1, 2019	683	$	683	170	$	(9,989)	$	5,898	$	15,075	$	(3,823)	$	7,844	$	22	$	7,866
Adoption of new accounting standards	—	—		—	—		—		161		(161)		—		—		—
Net income	—	—		—	—		—		655		—		655		—		655
Other comprehensive income (loss)	—	—		—	—		—		—		(102)		(102)		—		(102)
Purchases of treasury stock	—	—		10	(743)		46		—		—		(697)		—		(697)
Stock issued under employee benefit plans and other	—	—		(7)	410		(38)		(83)		—		289		—		289
Dividends declared on common stock	—	—		—	—		—		(210)		—		(210)		—		(210)
Change in noncontrolling interests	—	—		—	—		—		—		—		—		2		2
Balance as of June 30, 2019	683	$	683	173	$	(10,322)	$	5,906	$	15,598	$	(4,086)	$	7,779	$	24	$	7,803

Baxter International Inc.
Condensed Consolidated Statements of Changes in Equity
(in millions)
	As Restated
	For the Three Months Ended March 31, 2019
	Baxter International Inc. stockholders' equity
	Common stock shares	Common stock		Common stock shares in treasury	Common stock in treasury		Additional contributed capital		Retained earnings		Accumulated other comprehensive income (loss)		Total Baxter stockholders' equity		Noncontrolling interests		Total equity
Balance as of January 1, 2019	683	$	683	170	$	(9,989)	$	5,898	$	15,075	$	(3,823)	$	7,844	$	22	$	7,866
Adoption of new accounting standards	—	—		—	—		—		161		(161)		—		—		—
Net income	—	—		—	—		—		342		—		342		—		342
Other comprehensive income (loss)	—	—		—	—		—		—		(98)		(98)		—		(98)
Purchases of treasury stock	—	—		8	(586)		—		—		—		(586)		—		(586)
Stock issued under employee benefit plans and other	—	—		(5)	291		(59)		(66)		—		166		—		166
Dividends declared on common stock	—	—		—	—		—		(98)		—		(98)		—		(98)
Change in noncontrolling interests	—	—		—	—		—		—		—		—		1		1
Balance as of March 31, 2019	683	$	683	173	$	(10,284)	$	5,839	$	15,414	$	(4,082)	$	7,570	$	23	$	7,593

Baxter International Inc.
Condensed Consolidated Statements of Changes in Equity
(in millions)
	As Restated
	For the Three Months Ended June 30, 2018
	Baxter International Inc. stockholders' equity
	Common stock shares	Common stock		Common stock shares in treasury	Common stock in treasury		Additional contributed capital		Retained earnings		Accumulated other comprehensive income (loss)		Total Baxter stockholders' equity		Noncontrolling interests		Total equity
Balance as of April 1, 2018	683	$	683	147	$	(8,354)	$	5,912	$	14,254	$	(3,427)	$	9,068	$	(6)	$	9,062
Net income	—	—		—	—		—		341		—		341		—		341
Other comprehensive income (loss)	—	—		—	—		—		—		(329)		(329)		—		(329)
Purchases of treasury stock	—	—		3	(259)		—		—		—		(259)		—		(259)
Stock issued under employee benefit plans and other	—	—		(2)	128		4		(9)		—		123		—		123
Dividends declared on common stock	—	—		—	—		—		(102)		—		(102)		—		(102)
Change in noncontrolling interests	—	—		—	—		—		—		—		—		(6)		(6)
Balance as of June 30, 2018	683	683		148	(8,485)		5,916		14,484		(3,756)		8,842		(12)		8,830

Baxter International Inc.
Condensed Consolidated Statements of Changes in Equity
(in millions)
	As Restated
	For the Six Months Ended June 30, 2018
	Baxter International Inc. stockholders' equity
	Common stock shares	Common stock		Common stock shares in treasury	Common stock in treasury		Additional contributed capital		Retained earnings		Accumulated other comprehensive income (loss)		Total Baxter stockholders' equity		Noncontrolling interests		Total equity
Balance as of January 1, 2018	683	$	683	142	$	(7,981)	$	5,940	$	14,014	$	(3,539)	$	9,117	$	(8)	$	9,109
Adoption of new accounting standards	—	—		—	—		—		(20)		(3)		(23)		—		(23)
Net income	—	—		—	—		—		723		—		723		—		723
Other comprehensive income (loss)	—	—		—	—		—		—		(214)		(214)		—		(214)
Purchases of treasury stock	—	—		11	(781)		—		—		—		(781)		—		(781)
Stock issued under employee benefit plans and other	—	—		(5)	277		(24)		(45)		—		208		—		208
Dividends declared on common stock	—	—		—	—		—		(188)		—		(188)		—		(188)
Change in noncontrolling interests	—	—		—	—		—		—		—		—		(4)		(4)
Balance as of June 30, 2018	683	$	683	148	$	(8,485)	$	5,916	$	14,484	$	(3,756)	$	8,842	$	(12)	$	8,830

Baxter International Inc.
Condensed Consolidated Statements of Changes in Equity
(in millions)
	As Restated
	For the Three Months Ended March 31, 2018
	Baxter International Inc. stockholders' equity
	Common stock shares	Common stock		Common stock shares in treasury	Common stock in treasury		Additional contributed capital		Retained earnings		Accumulated other comprehensive income (loss)		Total Baxter stockholders' equity		Noncontrolling interests		Total equity
Balance as of January 1, 2018	683	$	683	142	$	(7,981)	$	5,940	$	14,014	$	(3,539)	$	9,117	$	(8)	$	9,109
Adoption of new accounting standards	—	—		—	—		—		(20)		(3)		(23)		—		(23)
Net income	—	—		—	—		—		382		—		382		—		382
Other comprehensive income (loss)	—	—		—	—		—		—		115		115		—		115
Purchases of treasury stock	—	—		8	(522)		—		—		—		(522)		—		(522)
Stock issued under employee benefit plans and other	—	—		(3)	149		(28)		(36)		—		85		—		85
Dividends declared on common stock	—	—		—	—		—		(86)		—		(86)		—		(86)
Change in noncontrolling interests	—	—		—	—		—		—		—		—		2		2
Balance as of March 31, 2018	683	$	683	147	$	(8,354)	$	5,912	$	14,254	$	(3,427)	$	9,068	$	(6)	$	9,062

Baxter International Inc.
Condensed Consolidated Statements of Cash Flows
(in millions)
	As Restated
	Six months ended June 30, 2019		Three months ended March 31, 2019
Cash flows from operations
Net income	$	655	$	342
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization	385		192
Deferred income taxes	(63)		(6)
Stock compensation	57		22
Net periodic pension benefit and other postretirement costs	7		3
Intangible asset impairment	31		—
Other	44		14
Changes in balance sheet items:
Accounts receivable, net	(60)		32
Inventories	(91)		(82)
Accounts payable and accrued liabilities	(299)		(335)
Other	(86)		(48)
Cash flows from operations – continuing operations	580		134
Cash flows from operations – discontinued operations	(6)		(6)
Cash flows from operations	574		128
Cash flows from investing activities
Capital expenditures	(338)		(193)
Acquisitions and investments, net of cash acquired	(111)		(109)
Other investing activities, net	1		1
Cash flows from investing activities	(448)		(301)
Cash flows from financing activities
Issuances of debt	1,661		—
Net increases in debt obligations with original maturities of three months or less	—		795
Cash dividends on common stock	(198)		(101)
Proceeds from stock issued under employee benefit plans	262		173
Purchases of treasury stock	(720)		(597)
Other financing activities, net	(37)		(32)
Cash flows from financing activities	968		238
Effect of foreign exchange rate changes on cash and cash equivalents	2		(1)
Increase in cash and cash equivalents	1,096		64
Cash and cash equivalents at beginning of period	1,838		1,838
Cash and cash equivalents at end of period	$	2,934	$	1,902

Baxter International Inc.
Condensed Consolidated Statements of Cash Flows
(in millions)
	As Restated
	Six months ended June 30, 2018		Three months ended March 31, 2018
Cash flows from operations
Net income	$	723	$	382
Adjustments to reconcile income from continuing operations to net cash from operating activities:
Depreciation and amortization	382		190
Deferred income taxes	(51)		(38)
Stock compensation	54		20
Net periodic pension benefit and other postretirement costs	21		10
Other	—		(1)
Changes in balance sheet items:
Accounts receivable, net	43		76
Inventories	(134)		(56)
Accounts payable and accrued liabilities	(124)		(119)
Other	(82)		(34)
Cash flows from operations	832		430
Cash flows from investing activities
Capital expenditures	(303)		(152)
Acquisitions and investments, net of cash acquired	(228)		(219)
Cash flows from investing activities	(531)		(371)
Cash flows from financing activities
Cash dividends on common stock	(173)		(87)
Proceeds from stock issued under employee benefit plans	170		82
Purchases of treasury stock	(781)		(522)
Other financing activities, net	(24)		(18)
Cash flows from financing activities	(808)		(545)
Effect of foreign exchange rate changes on cash and cash equivalents	(38)		32
Decrease in cash and cash equivalents	(545)		(454)
Cash and cash equivalents at beginning of period	3,403		3,403
Cash and cash equivalents at end of period	$	2,858	$	2,949

Baxter International Inc.
Condensed Consolidated Balance Sheet
(in millions, except per share)
	June 30, 2019
	As previously reported		Restatement impacts		Restatement reference	As restated
Current assets:
Cash and cash equivalents	$	2,925	$	9	(e)	$	2,934
Accounts receivable, net	1,885		12		(e)(g)	1,897
Inventories	1,757		(1)		(e)(g)	1,756
Prepaid expenses and other current assets	651		(9)		(b)(e)(g)	642
Total current assets	7,218		11			7,229
Property, plant and equipment, net	4,541		(56)		(c)(e)	4,485
Goodwill	2,938		(1)		(e)	2,937
Other intangible assets, net	1,364		(1)		(g)	1,363
Operating lease right-of-use assets	588		7		(e)	595
Other non-current assets	895		(1)		(a)(c)(e)(g)	894
Total assets	$	17,544	$	(41)		$	17,503
Current liabilities:
Short-term debt	$	2	$	—		$	2
Current maturities of long-term debt and finance lease obligations	2		—			2
Accounts payable and accrued liabilities	2,593		(40)		(b)(e)(g)	2,553
Total current liabilities	2,597		(40)			2,557
Long-term debt and finance lease obligations	5,157		—			5,157
Operating lease liabilities	490		6		(e)	496
Other non-current liabilities	1,464		26		(a)(c)(e)(g)	1,490
Total liabilities	9,708		(8)			9,700
Commitments and contingencies
Equity:
Common stock, $1 par value, authorized 2,000,000,000 shares, issued 683,494,944 shares	683		—			683
Common stock in treasury, at cost, 173,275,586 shares	(10,322)		—			(10,322)
Additional contributed capital	5,906		—			5,906
Retained earnings	16,184		(586)		(a)(b)(c)(e)(g)	15,598
Accumulated other comprehensive (loss) income	(4,639)		553		(a)(e)	(4,086)
Total Baxter stockholders’ equity	7,812		(33)			7,779
Noncontrolling interests	24		—			24
Total equity	7,836		(33)			7,803
Total liabilities and equity	$	17,544	$	(41)		$	17,503

(a) Foreign Currency Denominated Monetary Assets and Liabilities—The correction of these misstatements resulted in decreases to retained earnings of $514 million and accumulated other comprehensive loss of $514 million and increases to other non-current assets of $12 million and other non-current liabilities of $12 million as of June 30, 2019.

(b) Foreign Currency Derivative Contracts—The correction of these misstatements resulted in increases to prepaid expenses and other current assets of $2 million and accounts payable and other accrued liabilities of $4 million and a decrease to retained earnings of $2 million as of June 30, 2019.

(c) Equipment Leased to Customers under Operating Leases—The correction of these misstatements resulted in decreases to property, plant and equipment, net of $61 million, other non-current liabilities of $6 million, and retained earnings of $44 million and an increase to other non-current assets of $11 million as of June 30, 2019.

(e) Translation of the Financial Position and Results of Operations of our Foreign Operations into U.S. Dollars—The correction of these misstatements resulted in increases to cash and cash equivalents of $9 million, accounts receivable, net of $6 million, inventories of $4 million, prepaid expenses and other current assets of $1 million, property, plant and equipment, net of $5 million, operating lease right-of-use assets of $7 million, other non-current assets of $5 million, accounts payable and accrued liabilities of $3 million, operating lease liabilities of $6 million, and other non-current liabilities of $4 million and decreases to goodwill of $1 million, retained earnings of $16 million, and accumulated other comprehensive loss of $39 million as of June 30, 2019.

(g) Other miscellaneous adjustments - The correction of these misstatements resulted in increases to accounts receivable, net of $6 million and other non-current liabilities of $16 million and decreases to inventories of $5 million, prepaid expenses and other current assets of $12 million, other intangible assets, net of $1 million, other non-current assets of $29 million, accounts payable and accrued liabilities of $47 million and retained earnings of $10 million as of June 30, 2019.

Baxter International Inc.
Condensed Consolidated Balance Sheet
(in millions, except per share)
	March 31, 2019
	As previously reported		Restatement impacts		Restatement reference	As restated
Current assets:
Cash and cash equivalents	$	1,908	$	(6)	(e)	$	1,902
Accounts receivable, net	1,802		(1)		(e)(g)	1,801
Inventories	1,751		(8)		(e)(g)	1,743
Prepaid expenses and other current assets	626		(12)		(b)(e)(g)	614
Total current assets	6,087		(27)			6,060
Property, plant and equipment, net	4,539		(63)		(c)(e)	4,476
Goodwill	2,930		(1)		(e)	2,929
Other intangible assets, net	1,441		(1)		(g)	1,440
Operating lease right-of-use assets	517		(4)		(e)	513
Other non-current assets	836		(13)		(a)(c)(e)(g)	823
Total assets	$	16,350	$	(109)		$	16,241
Current liabilities:
Short-term debt	$	796	$	—		$	796
Current maturities of long-term debt and finance lease obligations	2		—			2
Accounts payable and accrued liabilities	2,529		(51)		(e)(g)	2,478
Total current liabilities	3,327		(51)			3,276
Long-term debt and finance lease obligations	3,451		—			3,451
Operating lease liabilities	420		(3)		(e)	417
Other non-current liabilities	1,483		21		(a)(c)(e)(g)	1,504
Total liabilities	8,681		(33)			8,648
Commitments and contingencies
Equity:
Common stock, $1 par value, authorized 2,000,000,000 shares, issued 683,494,944 shares	683		—			683
Common stock in treasury, at cost, 173,447,198 shares	(10,284)		—			(10,284)
Additional contributed capital	5,839		—			5,839
Retained earnings	15,970		(556)		(a)(b)(c)(e)(g)	15,414
Accumulated other comprehensive (loss) income	(4,562)		480		(a)(e)	(4,082)
Total Baxter stockholders’ equity	7,646		(76)			7,570
Noncontrolling interests	23		—			23
Total equity	7,669		(76)			7,593
Total liabilities and equity	$	16,350	$	(109)		$	16,241

(a) Foreign Currency Denominated Monetary Assets and Liabilities—The correction of these misstatements resulted in decreases to retained earnings of $491 million and accumulated other comprehensive loss of $487 million and increases to other non-current assets of $9 million and other non-current liabilities of $13 million as of March 31, 2019.

(b) Foreign Currency Derivative Contracts—The correction of these misstatements resulted in increases to prepaid expenses and other current assets of $1 million and retained earnings of $1 million as of March 31, 2019.

(c) Equipment Leased to Customers under Operating Leases—The correction of these misstatements resulted in decreases to property, plant and equipment, net of $55 million, other non-current liabilities of $5 million, and retained earnings of $40 million and an increase to other non-current assets of $10 million as of March 31, 2019.

(e) Translation of the Financial Position and Results of Operations of our Foreign Operations into U.S. Dollars—The correction of these misstatements resulted in decreases to cash and cash equivalents of $6 million, accounts receivable, net of $7 million, inventories of $3 million, prepaid expenses and other current assets of $1 million, property, plant and equipment, net of $8 million, goodwill of $1 million, operating lease right-of-use assets of $4 million, other non-current assets of $3 million, accounts payable and accrued liabilities of $4 million, operating lease liabilities of $3 million, other non-current liabilities of $3 million, retained earnings of $16 million and an increase to accumulated other comprehensive loss of $7 million as of March 31, 2019.

(g) Other miscellaneous adjustments - The correction of these misstatements resulted in increases to accounts receivable, net of $6 million and other non-current liabilities of $16 million and decreases to inventories of $5 million, prepaid expenses and other current assets of $12 million, other intangible assets, net of $1 million, other non-current assets of $29 million, accounts payable and accrued liabilities of $47 million, and retained earnings of $10 million as of March 31, 2019.

Baxter International Inc.
Condensed Consolidated Balance Sheet
(in millions, except per share)
	September 30, 2018
	As previously reported		Restatement impacts		Restatement reference	As restated
Current assets:
Cash and cash equivalents	$	2,860	$	3	(e)	$	2,863
Accounts receivable, net	1,826		11		(e)(g)	1,837
Inventories	1,718		(2)		(e)(g)	1,716
Prepaid expenses and other current assets	624		(9)		(b)(g)	615
Total current assets	7,028		3			7,031
Property, plant and equipment, net	4,520		(44)		(c)(e)	4,476
Goodwill	2,980		(2)		(e)	2,978
Other intangible assets, net	1,402		(2)		(e)(g)	1,400
Other non-current assets	917		1		(a)(c)(e)(g)	918
Total assets	$	16,847	$	(44)		$	16,803
Current liabilities:
Current maturities of long-term debt and finance lease obligations	$	3	$	—		$	3
Accounts payable and accrued liabilities	2,701		(41)		(b)(e)(g)	2,660
Total current liabilities	2,704		(41)			2,663
Long-term debt and finance lease obligations	3,485		(5)		(e)	3,480
Other non-current liabilities	1,545		25		(a)(c)(e)(g)	1,570
Total liabilities	7,734		(21)			7,713
Commitments and contingencies
Equity:
Common stock, $1 par value, authorized 2,000,000,000 shares, issued 683,494,944 shares	683		—			683
Common stock in treasury, at cost, 150,213,621 shares	(8,639)		—			(8,639)
Additional contributed capital	5,931		—			5,931
Retained earnings	15,394		(508)		(a)(b)(c)(e)(g)	14,886
Accumulated other comprehensive (loss) income	(4,239)		485		(a)(e)	(3,754)
Total Baxter stockholders’ equity	9,130		(23)			9,107
Noncontrolling interests	(17)		—			(17)
Total equity	9,113		(23)			9,090
Total liabilities and equity	$	16,847	$	(44)		$	16,803

(a) Foreign Currency Denominated Monetary Assets and Liabilities—The correction of these misstatements resulted in decreases to retained earnings of $448 million and accumulated other comprehensive loss of $456 million and increases to other non-current assets of $20 million and other non-current liabilities of $12 million as of September 30, 2018.

(b) Foreign Currency Derivative Contracts—The correction of these misstatements resulted in increases to prepaid expenses and other current assets of $3 million and accounts payable and accrued liabilities of $4 million and a decrease to retained earnings of $1 million as of September 30, 2018.

(c) Equipment Leased to Customers under Operating Leases—The correction of these misstatements resulted in decreases to property, plant and equipment, net of $49 million, other non-current liabilities of $2 million, and retained earnings of $35 million and an increase to other non-current assets of $12 million as of September 30, 2018.

(e) Translation of the Financial Position and Results of Operations of our Foreign Operations into U.S. Dollars—The correction of these misstatements resulted in increases to cash and cash equivalents of $3 million, accounts receivable, net of $5 million, inventories of $3 million, property, plant and equipment, net of $5 million and accounts payable and accrued liabilities of $2 million and decreases to goodwill of $2 million, other intangible assets, net of $1 million, other non-current assets of $2 million, long-term debt and finance lease obligations of $5 million, other non-current liabilities of $1 million, retained earnings of $14 million, and accumulated other comprehensive loss of $29 million as of September 30, 2018.

(g) Other miscellaneous adjustments - The correction of these misstatements resulted in increases to accounts receivable, net of $6 million and other non-current liabilities of $16 million and decreases to inventories of $5 million, prepaid expenses and other current assets of $12 million, other intangible assets, net of $1 million, other non-current assets of $29 million, accounts payable and accrued liabilities of $47 million, and retained earnings of $10 million as of September 30, 2018.

Baxter International Inc.
Condensed Consolidated Balance Sheet
(in millions, except per share)
	June 30, 2018
	As previously reported		Restatement impacts		Restatement reference	As restated
Current assets:
Cash and cash equivalents	$	2,857	$	1	(e)	$	2,858
Accounts receivable, net	1,783		6		(g)	1,789
Inventories	1,622		(6)		(e)(g)	1,616
Prepaid expenses and other current assets	628		(7)		(b)(e)(g)	621
Total current assets	6,890		(6)			6,884
Property, plant and equipment, net	4,531		(45)		(c)	4,486
Goodwill	2,984		(3)		(e)	2,981
Other intangible assets, net	1,427		(3)		(e)(g)	1,424
Other non-current assets	746		(2)		(a)(c)(g)	744
Total assets	$	16,578	$	(59)		$	16,519
Current liabilities:
Current maturities of long-term debt and finance lease obligations	$	3	$	—		$	3
Accounts payable and accrued liabilities	2,626		(43)		(b)(g)	2,583
Total current liabilities	2,629		(43)			2,586
Long-term debt and finance lease obligations	3,495		(4)		(e)	3,491
Other non-current liabilities	1,585		27		(a)(c)(g)	1,612
Total liabilities	7,709		(20)			7,689
Commitments and contingencies
Equity:
Common stock, $1 par value, authorized 2,000,000,000 shares, issued 683,494,944 shares	683		—			683
Common stock in treasury, at cost, 148,485,202 shares	(8,485)		—			(8,485)
Additional contributed capital	5,916		—			5,916
Retained earnings	14,966		(482)		(a)(c)(e)(g)	14,484
Accumulated other comprehensive (loss) income	(4,199)		443		(a)(e)	(3,756)
Total Baxter stockholders’ equity	8,881		(39)			8,842
Noncontrolling interests	(12)		—			(12)
Total equity	8,869		(39)			8,830
Total liabilities and equity	$	16,578	$	(59)		$	16,519

(a) Foreign Currency Denominated Monetary Assets and Liabilities—The correction of these misstatements resulted in decreases to retained earnings of $425 million and accumulated other comprehensive loss of $428 million and increases to other non-current assets of $16 million and other non-current liabilities of $13 million as of June 30, 2018.

(b) Foreign Currency Derivative Contracts—The correction of these misstatements resulted in increases to prepaid expenses and other current assets of $4 million and accounts payable and accrued liabilities of $4 million as of June 30, 2018.

(c) Equipment Leased to Customers under Operating Leases—The correction of these misstatements resulted in decreases to property, plant and equipment, net of $45 million, other non-current liabilities of $2 million, and retained earnings of $32 million and an increase to other non-current assets of $11 million as of June 30, 2018.

(e) Translation of the Financial Position and Results of Operations of our Foreign Operations into U.S. Dollars—The correction of these misstatements resulted in increases to cash and cash equivalents of $1 million and prepaid expenses and other current assets of $1 million and decreases to inventories of $1 million, goodwill of $3 million, other intangible assets, net of $2 million, long-term debt and finance lease obligations of $4 million, retained earnings of $15 million, and accumulated other comprehensive loss of $15 million as of June 30, 2018.

(g) Other miscellaneous adjustments - The correction of these misstatements resulted in increases to accounts receivable, net of $6 million and other non-current liabilities of $16 million and decreases to inventories of $5 million, prepaid expenses and other current assets of $12 million, other intangible assets, net of $1 million, other non-current assets of $29 million, accounts payable and accrued liabilities of $47 million, and retained earnings of $10 million as of June 30, 2018.

Baxter International Inc.
Condensed Consolidated Balance Sheet
(in millions, except per share)
	March 31, 2018
	As previously reported		Restatement impacts		Restatement reference	As restated
Current assets:
Cash and cash equivalents	$	2,947	$	2	(e)	$	2,949
Accounts receivable, net	1,807		11		(e)(g)	1,818
Inventories	1,581		(3)		(e)(g)	1,578
Prepaid expenses and other current assets	621		(11)		(b)(g)	610
Total current assets	6,956		(1)			6,955
Property, plant and equipment, net	4,614		(38)		(c)(e)	4,576
Goodwill	3,107		(4)		(e)	3,103
Other intangible assets, net	1,507		(2)		(e)(g)	1,505
Other non-current assets	706		(2)		(a)(c)(e)(g)	704
Total assets	$	16,890	$	(47)		$	16,843
Current liabilities:
Current maturities of long-term debt and finance lease obligations	$	3	$	—		$	3
Accounts payable and accrued liabilities	2,639		(41)		(b)(e)(g)	2,598
Total current liabilities	2,642		(41)			2,601
Long-term debt and finance lease obligations	3,550		—			3,550
Other non-current liabilities	1,605		25		(a)(c)(e)(g)	1,630
Total liabilities	7,797		(16)			7,781
Commitments and contingencies
Equity:
Common stock, $1 par value, authorized 2,000,000,000 shares, issued 683,494,944 shares	683		—			683
Common stock in treasury, at cost, 146,993,164 shares	(8,354)		—			(8,354)
Additional contributed capital	5,912		—			5,912
Retained earnings	14,734		(480)		(a)(b)(c)(e)(g)	14,254
Accumulated other comprehensive (loss) income	(3,876)		449		(a)(e)	(3,427)
Total Baxter stockholders’ equity	9,099		(31)			9,068
Noncontrolling interests	(6)		—			(6)
Total equity	9,093		(31)			9,062
Total liabilities and equity	$	16,890	$	(47)		$	16,843

(a) Foreign Currency Denominated Monetary Assets and Liabilities—The correction of these misstatements resulted in decreases to retained earnings of $426 million and accumulated other comprehensive loss of $432 million and increases to other non-current assets of $20 million and other non-current liabilities of $14 million as of March 31, 2018.

(b) Foreign Currency Derivative Contracts—The correction of these misstatements resulted in increases to prepaid expenses and other current assets of $1 million and accounts payable and accrued liabilities of $4 million and a decrease to retained earnings of $3 million as of March 31, 2018.

(c) Equipment Leased to Customers under Operating Leases—The correction of these misstatements resulted in decreases to property, plant and equipment, net of $44 million, other non-current liabilities of $2 million, and retained earnings of $31 million and an increase to other non-current assets of $11 million as of March 31, 2018.

(e) Translation of the Financial Position and Results of Operations of our Foreign Operations into U.S. Dollars—The correction of these misstatements resulted in increases to cash and cash equivalents of $2 million, accounts receivable, net of $5 million, inventories of $2 million, property, plant and equipment, net of $6 million, and accounts payable and accrued liabilities of $2 million and decreases to goodwill of $4 million, other intangible assets, net of $1 million, other non-current assets of $4 million, other non-current liabilities of $3 million, retained earnings of $10 million, and accumulated other comprehensive loss of $17 million as of March 31, 2018.

(g) Other miscellaneous adjustments - The correction of these misstatements resulted in increases to accounts receivable, net of $6 million and other non-current liabilities of $16 million and decreases to inventories of $5 million, prepaid expenses and other current assets of $12 million, other intangible assets, net of $1 million, other non-current assets of $29 million, accounts payable and accrued liabilities of $47 million, and retained earnings of $10 million as of March 31, 2018.

Baxter International Inc.
Condensed Consolidated Statement of Income
(in millions, except per share)
	Three months ended June 30, 2019
	As previously reported		Restatement impacts		Restatement reference	As restated
Net sales	$	2,840	$	(6)	(e)	$	2,834
Cost of sales	1,681		—		(c)(e)	1,681
Gross margin	1,159		(6)			1,153
Selling, general and administrative expenses	642		(1)		(e)	641
Research and development expenses	166		—			166
Other operating income, net	(4)		—			(4)
Operating income	355		(5)			350
Interest expense, net	20		—			20
Other (income) expense, net	(28)		32		(a)(b)	4
Income before income taxes	363		(37)			326
Income tax expense	20		(7)		(a)(c)	13
Net income	$	343	$	(30)		$	313
Earnings per share
Basic	$	0.67	$	(0.06)		$	0.61
Diluted	$	0.66	$	(0.06)		$	0.60
Weighted-average number of shares outstanding
Basic	510		—			510
Diluted	519		—			519

(a) Foreign Currency Denominated Monetary Assets and Liabilities—The correction of these misstatements resulted in a decrease to other (income) expense, net of $26 million and a decrease to income tax expense of $5 million for the three months ended June 30, 2019.

(b) Foreign Currency Derivative Contracts—The correction of these misstatements resulted in a decrease to other (income) expense, net of $6 million for the three months ended June 30, 2019.

(c) Equipment Leased to Customers under Operating Leases—The correction of these misstatements resulted in an increase to cost of sales of $5 million and a decrease to income tax expense of $2 million for the three months ended June 30, 2019.

(e) Translation of the Financial Position and Results of Operations of our Foreign Operations into U.S. Dollars—The correction of these misstatements resulted in decreases to net sales of $6 million, cost of sales of $5 million and SG&A expense of $1 million for the three months ended June 30, 2019.

Baxter International Inc.
Condensed Consolidated Statement of Income
(in millions, except per share)
	Six months ended June 30, 2019
	As previously reported		Restatement impacts		Restatement reference	As restated
Net sales	$	5,472	$	—		$	5,472
Cost of sales	3,233		6		(c)(e)	3,239
Gross margin	2,239		(6)			2,233
Selling, general and administrative expenses	1,242		—			1,242
Research and development expenses	295		—			295
Other operating income, net	(37)		—			(37)
Operating income	739		(6)			733
Interest expense, net	38		—			38
Other (income) expense, net	(53)		36		(a)(b)	(17)
Income before income taxes	754		(42)			712
Income tax expense	64		(7)		(a)(b)(c)	57
Net income	$	690	$	(35)		$	655
Earnings per share
Basic	$	1.35	$	(0.07)		$	1.28
Diluted	$	1.33	$	(0.07)		$	1.26
Weighted-average number of shares outstanding
Basic	511		—			511
Diluted	520		—			520

(a) Foreign Currency Denominated Monetary Assets and Liabilities—The correction of these misstatements resulted in decreases to other (income) expense, net of $31 million and income tax expense of $4 million for the six months ended June 30, 2019.

(b) Foreign Currency Derivative Contracts—The correction of these misstatements resulted in decreases to other (income) expense, net of $5 million and income tax expense of $1 million for the six months ended June 30, 2019.

(c) Equipment Leased to Customers under Operating Leases—The correction of these misstatements resulted in an increase to cost of sales of $7 million and a decrease to income tax expense of $2 million for the six months ended June 30, 2019.

(e) Translation of the Financial Position and Results of Operations of our Foreign Operations into U.S. Dollars—The correction of these misstatements resulted in a decrease to cost of sales of $1 million for the six months ended June 30, 2019.

Baxter International Inc.
Condensed Consolidated Statement of Income
(in millions, except per share)
	Three months ended March 31, 2019
	As previously reported		Restatement impacts		Restatement reference	As restated
Net sales	$	2,632	$	6	(e)	$	2,638
Cost of sales	1,552		6		(c)(e)	1,558
Gross margin	1,080		—			1,080
Selling, general and administrative expenses	600		1		(e)	601
Research and development expenses	129		—			129
Other operating income, net	(33)		—			(33)
Operating income	384		(1)			383
Interest expense, net	18		—			18
Other (income) expense, net	(25)		4		(a)(b)	(21)
Income before income taxes	391		(5)			386
Income tax expense	44		—			44
Net income	$	347	$	(5)		$	342
Earnings per share
Basic	$	0.68	$	(0.01)		$	0.67
Diluted	$	0.66	$	—		$	0.66
Weighted-average number of shares outstanding
Basic	512		—			512
Diluted	522		—			522

(a) Foreign Currency Denominated Monetary Assets and Liabilities—The correction of these misstatements resulted in a decrease to other (income) expense, net of $5 million for the three months ended March 31, 2019.

(b) Foreign Currency Derivative Contracts—The correction of these misstatements resulted in an increase to other (income) expense, net of $1 million for the three months ended March 31, 2019.

(c) Equipment Leased to Customers under Operating Leases—The correction of these misstatements resulted in an increase to cost of sales of $2 million for the three months ended March 31, 2019.

(e) Translation of the Financial Position and Results of Operations of our Foreign Operations into U.S. Dollars—The correction of these misstatements resulted in increases to net sales of $6 million, cost of sales of $4 million and SG&A expense of $1 million for the three months ended March 31, 2019.

Baxter International Inc.
Condensed Consolidated Statement of Income
(in millions, except per share)
	Three months ended December 31, 2018
	As previously reported		Restatement impacts		Restatement reference	As restated
Net sales	$	2,841	$	(8)	(e)	$	2,833
Cost of sales	1,649		1		(c)(e)	1,650
Gross margin	1,192		(9)			1,183
Selling, general and administrative expenses	629		(2)		(e)	627
Research and development expenses	175		—			175
Other operating income, net	(10)		—			(10)
Operating income	398		(7)			391
Interest expense, net	11		—			11
Other (income) expense, net	(58)		25		(a)(b)	(33)
Income from continuing operations before income taxes	445		(32)			413
Income tax expense	91		11		(a)(c)(g)	102
Income from continuing operations	354		(43)			311
Loss from discontinued operations	(6)		—			(6)
Net income	$	348	$	(43)		$	305
Earnings per share from continuing operations
Basic	$	0.67	$	(0.08)		$	0.59
Diluted	$	0.66	$	(0.08)		$	0.58
Loss per share from discontinued operations
Basic	$	(0.01)	$	—		$	(0.01)
Diluted	$	(0.01)	$	—		$	(0.01)
Earnings per share
Basic	$	0.66	$	(0.08)		$	0.58
Diluted	$	0.65	$	(0.08)		$	0.57
Weighted-average number of shares outstanding
Basic	528		—			528
Diluted	538		—			538

(a) Foreign Currency Denominated Monetary Assets and Liabilities—The correction of these misstatements resulted in a decrease to other (income) expense, net of $26 million and an increase to income tax expense of $5 million for the three months ended December 31, 2018.

(b) Foreign Currency Derivative Contracts—The correction of these misstatements resulted in an increase to other (income) expense, net of $1 million.

(c) Equipment Leased to Customers under Operating Leases—The correction of these misstatements resulted in an increase to cost of sales of $4 million and a decrease to income tax expense of $1 million for the three months ended December 31, 2018.

(e) Translation of the Financial Position and Results of Operations of our Foreign Operations into U.S. Dollars—The correction of these misstatements resulted in decreases to net sales of $8 million, cost of sales of $3 million and SG&A expense of $2 million for the three months ended December 31, 2018.

(g) Other miscellaneous adjustments - The correction of these misstatements resulted in an increase to income tax expense of $7 million for the year ended December 31, 2018.

Baxter International Inc.
Condensed Consolidated Statement of Income
(in millions, except per share)
	Three months ended June 30, 2018
	As previously reported		Restatement impacts		Restatement reference	As restated
Net sales	$	2,842	$	(29)	(e)	$	2,813
Cost of sales	1,603		(13)		(c)(e)	1,590
Gross margin	1,239		(16)			1,223
Selling, general and administrative expenses	681		(5)		(e)(f)	676
Research and development expenses	174		(2)		(e)	172
Other operating income, net	—		(2)		(f)	(2)
Operating income	384		(7)			377
Interest expense, net	11		—			11
Other (income) expense, net	(31)		(7)		(b)(e)	(38)
Income before income taxes	404		—			404
Income tax expense	61		2		(b)(c)(e)	63
Net income	$	343	$	(2)		$	341
Earnings per share
Basic	$	0.64	$	—		$	0.64
Diluted	$	0.63	$	(0.01)		$	0.62
Weighted-average number of shares outstanding
Basic	535		—			535
Diluted	547		—			547

(b) Foreign Currency Derivative Contracts—The correction of these misstatements resulted in increases to other (income) expense, net of $8 million and income tax expense of $4 million for the three months ended June 30, 2018.

(c) Equipment Leased to Customers under Operating Leases—The correction of these misstatements resulted in an increase to cost of sales of $2 million and a decrease to income tax expense of $1 million for the three months ended June 30, 2018.

(e) Translation of the Financial Position and Results of Operations of our Foreign Operations into U.S. Dollars—The correction of these misstatements resulted in decreases to net sales of $29 million, cost of sales of $15 million, SG&A expense of $7 million, R&D expense of $2 million, other (income) expense, net of $1 million and income tax expense of $1 million for the three months ended June 30, 2018.

(f) Income Statement Classification of Transition Services Income—The correction of these misstatements resulted in increases to SG&A expense and other operating income, net of $2 million for the three months ended June 30, 2018.

Baxter International Inc.
Condensed Consolidated Statement of Income
(in millions, except per share)
	Six months ended June 30, 2018
	As previously reported		Restatement impacts		Restatement reference	As restated
Net sales	$	5,519	$	(14)	(e)	$	5,505
Cost of sales	3,166		(5)		(c)(e)	3,161
Gross margin	2,353		(9)			2,344
Selling, general and administrative expenses	1,303		6		(e)(f)	1,309
Research and development expenses	314		(1)		(e)	313
Other operating income, net	(80)		(9)		(f)	(89)
Operating income	816		(5)			811
Interest expense, net	23		—			23
Other (income) expense, net	(49)		5		(a)(b)(e)	(44)
Income before income taxes	842		(10)			832
Income tax expense	110		(1)		(a)(b)(c)(e)	109
Net income	$	732	$	(9)		$	723
Earnings per share
Basic	$	1.36	$	(0.01)		$	1.35
Diluted	$	1.33	$	(0.01)		$	1.32
Weighted-average number of shares outstanding
Basic	537		—			537
Diluted	549		—			549

(a) Foreign Currency Denominated Monetary Assets and Liabilities—The correction of these misstatements resulted in decreases to other (income) expense, net of $9 million and income tax expense of $3 million for the six months ended June 30, 2018.

(b) Foreign Currency Derivative Contracts—The correction of these misstatements resulted in increases to other (income) expense, net of $5 million and income tax of $4 million for the six months ended June 30, 2018.

(c) Equipment Leased to Customers under Operating Leases—The correction of these misstatements resulted in an increase to cost of sales of $3 million and a decrease to income tax expense of $1 million for the six months ended June 30, 2018.

(e) Translation of the Financial Position and Results of Operations of our Foreign Operations into U.S. Dollars—The correction of these misstatements resulted in decreases to net sales of $14 million, cost of sales of $8 million, SG&A expense of $3 million, R&D expense of $1 million, other (income) expense, net of $1 million and income tax expense of $1 million for the six months ended June 30, 2018.

(f) Income Statement Classification of Transition Services Income—The correction of these misstatements resulted in increases to SG&A expense and other operating income, net of $9 million for the six months ended June 30, 2018.

Baxter International Inc.
Condensed Consolidated Statement of Income
(in millions, except per share)
	Three months ended March 31, 2018
	As previously reported		Restatement impacts		Restatement reference	As restated
Net sales	$	2,677	$	15	(e)	$	2,692
Cost of sales	1,563		8		(c)(e)	1,571
Gross margin	1,114		7			1,121
Selling, general and administrative expenses	622		11		(e)(f)	633
Research and development expenses	140		1		(e)	141
Other operating income, net	(80)		(7)		(f)	(87)
Operating income	432		2			434
Interest expense, net	12		—			12
Other (income) expense, net	(18)		12		(a)(b)	(6)
Income before income taxes	438		(10)			428
Income tax expense	49		(3)		(a)	46
Net income	$	389	$	(7)		$	382
Earnings per share
Basic	$	0.72	$	(0.01)		$	0.71
Diluted	$	0.71	$	(0.02)		$	0.69
Weighted-average number of shares outstanding
Basic	539		—			539
Diluted	551		—			551

(a) Foreign Currency Denominated Monetary Assets and Liabilities—The correction of these misstatements resulted in decreases to other (income) expense, net of $9 million and income tax expense of $3 million for the three months ended March 31, 2018.

(b) Foreign Currency Derivative Contracts—The correction of these misstatements resulted in a decrease to other (income) expense, net of $3 million for the three months ended March 31, 2018.

(c) Equipment Leased to Customers under Operating Leases—The correction of these misstatements resulted in an increase to cost of sales of $1 million for the three months ended March 31, 2018.

(e) Translation of the Financial Position and Results of Operations of our Foreign Operations into U.S. Dollars—The correction of these misstatements resulted in increases to net sales of $15 million, cost of sales of $7 million, SG&A expense of $4 million and R&D expense of $1 million for the three months ended March 31, 2018.

(f) Income Statement Classification of Transition Services Income—The correction of these misstatements resulted in increases to SG&A expense and other operating income, net of $7 million for the three months ended March 31, 2018.

Baxter International Inc.
Condensed Consolidated Statement of Comprehensive Income
(in millions)
	Three months ended June 30, 2019
	As previously reported		Restatement impacts		As restated
Net income	$	343	$	(30)	$	313
Other comprehensive (loss) income, net of tax:
Currency translation adjustments	(78)		80		2
Pension and other postretirement benefit plans	13		(7)		6
Hedging activities	(12)		—		(12)
Total other comprehensive loss, net of tax	(77)		73		(4)
Comprehensive income	$	266	$	43	$	309

The $30 million decrease to net income was driven by the items described above in the consolidated statement of income for the three months ended June 30, 2019 section.

The $80 million decrease to currency translation adjustments for the three months ended June 30, 2019 is comprised of a $54 million decrease to correct the foreign exchange rates used to translate the financial position and results of operations of our foreign operations into U.S. dollars and a $26 million decrease from the offsetting balance sheet impact of the adjustments to foreign exchange gains and losses on intra-company receivables and payables.

The $7 million decrease to pension and other postretirement benefit plans for the three months ended June 30, 2019 is a result of the correction of the foreign exchange rates used to translate the financial position and results of operations of our foreign operations into U.S. dollars.

Baxter International Inc.
Condensed Consolidated Statement of Comprehensive Income
(in millions)
	Six months ended June 30, 2019
	As previously reported		Restatement impacts		As restated
Net income	$	690	$	(35)	$	655
Other comprehensive (loss) income, net of tax:
Currency translation adjustments	(48)		(47)		(95)
Pension and other postretirement benefit plans	21		(1)		20
Hedging activities	(27)		—		(27)
Total other comprehensive loss, net of tax	(54)		(48)		(102)
Comprehensive income	$	636	$	(83)	$	553

The $35 million decrease to net income was driven by the items described above in the consolidated statement of income for the six months ended June 30, 2019 section.

The $47 million increase to currency translation adjustments for the six months ended June 30, 2019 is comprised of a $78 million increase to correct the foreign exchange rates used to translate the financial position and results of operations of our foreign operations into U.S. dollars partially offset by a $31 million decrease from the offsetting balance sheet impact of the adjustments to foreign exchange gains and losses on intra-company receivables and payables.

The $1 million decrease to pension and other postretirement benefit plans for the six months ended June 30, 2019 is a result of the correction of the foreign exchange rates used to translate the financial position and results of operations of our foreign operations into U.S. dollars.

Baxter International Inc.
Condensed Consolidated Statement of Comprehensive Income
(in millions)
	Three months ended March 31, 2019
	As previously reported		Restatement impacts		As restated
Net income	$	347	$	(5)	$	342
Other comprehensive (loss) income, net of tax:
Currency translation adjustments	30		(127)		(97)
Pension and other postretirement benefit plans	8		6		14
Hedging activities	(15)		—		(15)
Total other comprehensive (loss) income, net of tax	23		(121)		(98)
Comprehensive income	$	370	$	(126)	$	244

The $5 million decrease to net income was driven by the items described above in the consolidated statement of income for the three months ended March 31, 2019 section.

The $127 million decrease to currency translation adjustments for the three months ended March 31, 2019 is comprised of a $132 million decrease to correct the foreign exchange rates used to translate the financial position and results of operations of our foreign operations into U.S. dollars partially offset by a $5 million increase from the offsetting balance sheet impact of the adjustments to foreign exchange gains and losses on intra-company receivables and payables.

The $6 million increase to pension and other postretirement benefit plans for the three months ended March 31, 2019 is a result of the correction of the foreign exchange rates used to translate the financial position and results of operations of our foreign operations into U.S. dollars.

Baxter International Inc.
Condensed Consolidated Statement of Comprehensive Income
(in millions)
	Three months ended June 30, 2018
	As previously reported		Restatement impacts		As restated
Net income	$	343	$	(2)	$	341
Other comprehensive (loss) income, net of tax:
Currency translation adjustments	(363)		(5)		(368)
Pension and other postretirement benefit plans	29		(1)		28
Hedging activities	11		—		11
Total other comprehensive loss, net of tax	(323)		(6)		(329)
Comprehensive income	$	20	$	(8)	$	12

The $2 million decrease to net income was driven by the items described above in the consolidated statement of income for the three months ended June 30, 2018 section.

The $5 million increase to currency translation adjustments for the three months ended June 30, 2018 is comprised of a $5 million increase to correct the foreign exchange rates used to translate the financial position and results of operations of our foreign operations into U.S. dollars.

The $1 million decrease to pension and other postretirement benefit plans for the three months ended June 30, 2018 is a result of the correction of the foreign exchange rates used to translate the financial position and results of operations of our foreign operations into U.S. dollars.

Baxter International Inc.
Condensed Consolidated Statement of Comprehensive Income
(in millions)
	Six months ended June 30, 2018
	As previously reported		Restatement impacts		As restated
Net income	$	732	$	(9)	$	723
Other comprehensive (loss) income, net of tax:
Currency translation adjustments	(282)		(23)		(305)
Pension and other postretirement benefit plans	81		4		85
Hedging activities	6		—		6
Total other comprehensive loss, net of tax	(195)		(19)		(214)
Comprehensive income	$	537	$	(28)	$	509

The $9 million decrease to net income was driven by the items described above in the consolidated statement of income for the six months ended June 30, 2018 section.

The $23 million increase to currency translation adjustments for the six months ended June 30, 2018 is comprised of a $32 million increase to correct the foreign exchange rates used to translate the financial position and results of operations of our foreign operations into U.S. dollars partially offset by a $9 million decrease from the offsetting balance sheet impact of the adjustments to foreign exchange gains and losses on intra-company receivables and payables.

The $4 million increase to pension and other postretirement benefit plans for the six months ended June 30, 2018 is a result of the correction of the foreign exchange rates used to translate the financial position and results of operations of our foreign operations into U.S. dollars.

Baxter International Inc.
Condensed Consolidated Statement of Comprehensive Income
(in millions)
	Three months ended March 31, 2018
	As previously reported		Restatement impacts		As restated
Net income	$	389	$	(7)	$	382
Other comprehensive (loss) income, net of tax:
Currency translation adjustments	81		(18)		63
Pension and other postretirement benefit plans	52		5		57
Hedging activities	(5)		—		(5)
Total other comprehensive income, net of tax	128		(13)		115
Comprehensive income	$	517	$	(20)	$	497

The $7 million decrease to net income was driven by the items described above in the consolidated statement of income for the three months ended March 31, 2018 section.

The $18 million decrease to currency translation adjustments for the three months ended March 31, 2018 is comprised of a $27 million decrease to correct the foreign exchange rates used to translate the financial position and results of operations of our foreign operations into U.S. dollars partially offset by a $9 million increase from the offsetting balance sheet impact of the adjustments to foreign exchange gains and losses on intra-company receivables and payables.

The $5 million increase to pension and other postretirement benefit plans for the three months ended March 31, 2018 is a result of the correction of the foreign exchange rates used to translate the financial position and results of operations of our foreign operations into U.S. dollars.

Baxter International Inc.
Consolidated Statement of Changes in Equity
(in millions)
	For the Three Months Ended June 30, 2019
	Baxter International Inc. stockholders' equity
	Common stock shares	Common stock		Common stock shares in treasury	Common stock in treasury		Additional contributed capital		Retained earnings		Accumulated other comprehensive income (loss)		Total Baxter stockholders' equity		Noncontrolling interests		Total equity
As previously reported
Balance as of April 1, 2019	683	$	683	173	$	(10,284)	$	5,839	$	15,970	$	(4,562)	$	7,646	$	23	$	7,669
Net income	—	—		—	—		—		343		—		343		—		343
Other comprehensive income (loss)	—	—		—	—		—		—		(77)		(77)		—		(77)
Purchases of treasury stock	—	—		2	(157)		46		—		—		(111)		—		(111)
Stock issued under employee benefit plans and other	—	—		(2)	119		21		(17)		—		123		—		123
Dividends declared on common stock	—	—		—	—		—		(112)		—		(112)		—		(112)
Changes in noncontrolling interests	—	—		—	—		—		—		—		—		1		1
Balance as of June 30, 2019	683	$	683	173	$	(10,322)	$	5,906	$	16,184	$	(4,639)	$	7,812	$	24	$	7,836
Restatement impacts
Balance as of April 1, 2019	—	$	—	—	$	—	$	—	$	(556)	$	480	$	(76)	$	—	$	(76)
Net income	—	—		—	—		—		(30)		—		(30)		—		(30)
Other comprehensive income (loss)	—	—		—	—		—		—		73		73		—		73
Balance as of June 30, 2019	—	$	—	—	$	—	$	—	$	(586)	$	553	$	(33)	$	—	$	(33)
As restated
Balance as of April 1, 2019	683	$	683	173	$	(10,284)	$	5,839	$	15,414	$	(4,082)	$	7,570	$	23	$	7,593
Net income	—	—		—	—		—		313		—		313		—		313
Other comprehensive income (loss)	—	—		—	—		—		—		(4)		(4)		—		(4)
Purchases of treasury stock	—	—		2	(157)		46		—		—		(111)		—		(111)
Stock issued under employee benefit plans and other	—	—		(2)	119		21		(17)		—		123		—		123
Dividends declared on common stock	—	—		—	—		—		(112)		—		(112)		—		(112)
Changes in noncontrolling interests	—	—		—	—		—		—		—		—		1		1
Balance as of June 30, 2019	683	$	683	173	$	(10,322)	$	5,906	$	15,598	$	(4,086)	$	7,779	$	24	$	7,803

See descriptions of the net income and other comprehensive income impacts in the consolidated statement of income and consolidated statement of comprehensive income for the three months ended June 30, 2019 sections above.

Baxter International Inc.
Consolidated Statement of Changes in Equity
(in millions)
	For the Six Months Ended June 30, 2019
	Baxter International Inc. stockholders' equity
	Common stock shares	Common stock		Common stock shares in treasury	Common stock in treasury		Additional contributed capital		Retained earnings		Accumulated other comprehensive income (loss)		Total Baxter stockholders' equity		Noncontrolling interests		Total equity
As previously reported
Balance as of January 1, 2019	683	$	683	170	$	(9,989)	$	5,898	$	15,626	$	(4,424)	$	7,794	$	22	$	7,816
Adoption of new accounting standards	—	—		—	—		—		161		(161)		—		—		—
Net income	—	—		—	—		—		690		—		690		—		690
Other comprehensive income (loss)	—	—		—	—		—		—		(54)		(54)		—		(54)
Purchases of treasury stock	—	—		10	(743)		46		—		—		(697)		—		(697)
Stock issued under employee benefit plans and other	—	—		(7)	410		(38)		(83)		—		289		—		289
Dividends declared on common stock	—	—		—	—		—		(210)		—		(210)		—		(210)
Changes in noncontrolling interests	—	—		—	—		—		—		—		—		2		2
Balance as of June 30, 2019	683	$	683	173	$	(10,322)	$	5,906	$	16,184	$	(4,639)	$	7,812	$	24	$	7,836
Restatement impacts
Balance as of January 1, 2019	—	$	—	—	$	—	$	—	$	(551)	$	601	$	50	$	—	$	50
Net income	—	—		—	—		—		(35)		—		(35)		—		(35)
Other comprehensive income (loss)	—	—		—	—		—		—		(48)		(48)		—		(48)
Balance as of June 30, 2019	—	$	—	—	$	—	$	—	$	(586)	$	553	$	(33)	$	—	$	(33)
As restated
Balance as of January 1, 2019	683	$	683	170	$	(9,989)	$	5,898	$	15,075	$	(3,823)	$	7,844	$	22	$	7,866
Adoption of new accounting standards	—	—		—	—		—		161		(161)		—		—		—
Net income	—	—		—	—		—		655		—		655		—		655
Other comprehensive income (loss)	—	—		—	—		—		—		(102)		(102)		—		(102)
Purchases of treasury stock	—	—		10	(743)		46		—		—		(697)		—		(697)
Stock issued under employee benefit plans and other	—	—		(7)	410		(38)		(83)		—		289		—		289
Dividends declared on common stock	—	—		—	—		—		(210)		—		(210)		—		(210)
Changes in noncontrolling interests	—	—		—	—		—		—		—		—		2		2
Balance as of June 30, 2019	683	$	683	173	$	(10,322)	$	5,906	$	15,598	$	(4,086)	$	7,779	$	24	$	7,803

See descriptions of the net income and other comprehensive income impacts in the consolidated statement of income and consolidated statement of comprehensive income for the six months ended June 30, 2019 sections above.

Baxter International Inc.
Consolidated Statement of Changes in Equity
(in millions)
	For the Three Months Ended March 31, 2019
	Baxter International Inc. stockholders' equity
	Common stock shares	Common stock		Common stock shares in treasury	Common stock in treasury		Additional contributed capital		Retained earnings		Accumulated other comprehensive income (loss)		Total Baxter stockholders' equity		Noncontrolling interests		Total equity
As previously reported
Balance as of January 1, 2019	683	$	683	170	$	(9,989)	$	5,898	$	15,626	$	(4,424)	$	7,794	$	22	$	7,816
Adoption of new accounting standards	—	—		—	—		—		161		(161)		—		—		—
Net income	—	—		—	—		—		347		—		347		—		347
Other comprehensive income (loss)	—	—		—	—		—		—		23		23		—		23
Purchases of treasury stock	—	—		8	(586)		—		—		—		(586)		—		(586)
Stock issued under employee benefit plans and other	—	—		(5)	291		(59)		(66)		—		166		—		166
Dividends declared on common stock	—	—		—	—		—		(98)		—		(98)		—		(98)
Changes in noncontrolling interests	—	—		—	—		—		—		—		—		1		1
Balance as of March 31, 2019	683	$	683	173	$	(10,284)	$	5,839	$	15,970	$	(4,562)	$	7,646	$	23	$	7,669
Restatement impacts
Balance as of January 1, 2019	—	$	—	—	$	—	$	—	$	(551)	$	601	$	50	$	—	$	50
Net income	—	—		—	—		—		(5)		—		(5)		—		(5)
Other comprehensive income (loss)	—	—		—	—		—		—		(121)		(121)		—		(121)
Balance as of March 31, 2019	—	$	—	—	$	—	$	—	$	(556)	$	480	$	(76)	$	—	$	(76)
As restated
Balance as of January 1, 2019	683	$	683	170	$	(9,989)	$	5,898	$	15,075	$	(3,823)	$	7,844	$	22	$	7,866
Adoption of new accounting standards	—	—		—	—		—		161		(161)		—		—		—
Net income	—	—		—	—		—		342		—		342		—		342
Other comprehensive income (loss)	—	—		—	—		—		—		(98)		(98)		—		(98)
Purchases of treasury stock	—	—		8	(586)		—		—		—		(586)		—		(586)
Stock issued under employee benefit plans and other	—	—		(5)	291		(59)		(66)		—		166		—		166
Dividends declared on common stock	—	—		—	—		—		(98)		—		(98)		—		(98)
Changes in noncontrolling interests	—	—		—	—		—		—		—		—		1		1
Balance as of March 31, 2019	683	$	683	173	$	(10,284)	$	5,839	$	15,414	$	(4,082)	$	7,570	$	23	$	7,593

See descriptions of the net income and other comprehensive income impacts in the consolidated statement of income and consolidated statement of comprehensive income for the three months ended March 31, 2019 sections above.

Baxter International Inc.
Consolidated Statement of Changes in Equity
(in millions)
	For the Three Months Ended June 30, 2018
	Baxter International Inc. stockholders' equity
	Common stock shares	Common stock		Common stock shares in treasury	Common stock in treasury		Additional contributed capital		Retained earnings		Accumulated other comprehensive income (loss)		Total Baxter stockholders' equity		Noncontrolling interests		Total equity
As previously reported
Balance as of April 1, 2018	683	$	683	147	$	(8,354)	$	5,912	$	14,734	$	(3,876)	$	9,099	$	(6)	$	9,093
Net income	—	—		—	—		—		343		—		343		—		343
Other comprehensive income (loss)	—	—		—	—		—		—		(323)		(323)		—		(323)
Purchases of treasury stock	—	—		3	(259)		—		—		—		(259)		—		(259)
Stock issued under employee benefit plans and other	—	—		(2)	128		4		(9)		—		123		—		123
Dividends declared on common stock	—	—		—	—		—		(102)		—		(102)		—		(102)
Changes in noncontrolling interests	—	—		—	—		—		—		—		—		(6)		(6)
Balance as of June 30, 2018	683	$	683	148	$	(8,485)	$	5,916	$	14,966	$	(4,199)	$	8,881	$	(12)	$	8,869
Restatement impacts
Balance as of April 1, 2018	—	$	—	—	$	—	$	—	$	(480)	$	449	$	(31)	$	—	$	(31)
Net income	—	—		—	—		—		(2)		—		(2)		—		(2)
Other comprehensive income (loss)	—	—		—	—		—		—		(6)		(6)		—		(6)
Balance as of June 30, 2018	—	$	—	—	$	—	$	—	$	(482)	$	443	$	(39)	$	—	$	(39)
As restated
Balance as of April 1, 2018	683	$	683	147	$	(8,354)	$	5,912	$	14,254	$	(3,427)	$	9,068	$	(6)	$	9,062
Net income	—	—		—	—		—		341		—		341		—		341
Other comprehensive income (loss)	—	—		—	—		—		—		(329)		(329)		—		(329)
Purchases of treasury stock	—	—		3	(259)		—		—		—		(259)		—		(259)
Stock issued under employee benefit plans and other	—	—		(2)	128		4		(9)		—		123		—		123
Dividends declared on common stock	—	—		—	—		—		(102)		—		(102)		—		(102)
Changes in noncontrolling interests	—	—		—	—		—		—		—		—		(6)		(6)
Balance as of June 30, 2018	683	$	683	148	$	(8,485)	$	5,916	$	14,484	$	(3,756)	$	8,842	$	(12)	$	8,830

See descriptions of the net income and other comprehensive income impacts in the consolidated statement of income and consolidated statement of comprehensive income for the three months ended June 30, 2018 sections above.

Baxter International Inc.
Consolidated Statement of Changes in Equity
(in millions)
	For the Six Months Ended June 30, 2018
	Baxter International Inc. stockholders' equity
	Common stock shares	Common stock		Common stock shares in treasury	Common stock in treasury		Additional contributed capital		Retained earnings		Accumulated other comprehensive income (loss)		Total Baxter stockholders' equity		Noncontrolling interests		Total equity
As previously reported
Balance as of January 1, 2018	683	$	683	142	$	(7,981)	$	5,940	$	14,483	$	(4,001)	$	9,124	$	(8)	$	9,116
Adoption of new accounting standards	—	—		—	—		—		(16)		(3)		(19)		—		(19)
Net income	—	—		—	—		—		732		—		732		—		732
Other comprehensive income (loss)	—	—		—	—		—		—		(195)		(195)		—		(195)
Purchases of treasury stock	—	—		11	(781)		—		—		—		(781)		—		(781)
Stock issued under employee benefit plans and other	—	—		(5)	277		(24)		(45)		—		208		—		208
Dividends declared on common stock	—	—		—	—		—		(188)		—		(188)		—		(188)
Changes in noncontrolling interests	—	—		—	—		—		—		—		—		(4)		(4)
Balance as of June 30, 2018	683	$	683	148	$	(8,485)	$	5,916	$	14,966	$	(4,199)	$	8,881	$	(12)	$	8,869
Restatement impacts
Balance as of January 1, 2018	—	$	—	—	$	—	$	—	$	(469)	$	462	$	(7)	$	—	$	(7)
Adoption of new accounting standards	—	—		—	—		—		(4)		—		(4)		—		(4)
Net income	—	—		—	—		—		(9)		—		(9)		—		(9)
Other comprehensive income (loss)	—	—		—	—		—		—		(19)		(19)		—		(19)
Balance as of June 30, 2018	—	$	—	—	$	—	$	—	$	(482)	$	443	$	(39)	$	—	$	(39)
As restated
Balance as of January 1, 2018	683	$	683	142	$	(7,981)	$	5,940	$	14,014	$	(3,539)	$	9,117	$	(8)	$	9,109
Adoption of new accounting standards	—	—		—	—		—		(20)		(3)		(23)		—		(23)
Net income	—	—		—	—		—		723		—		723		—		723
Other comprehensive income (loss)	—	—		—	—		—		—		(214)		(214)		—		(214)
Purchases of treasury stock	—	—		11	(781)		—		—		—		(781)		—		(781)
Stock issued under employee benefit plans and other	—	—		(5)	277		(24)		(45)		—		208		—		208
Dividends declared on common stock	—	—		—	—		—		(188)		—		(188)		—		(188)
Changes in noncontrolling interests	—	—		—	—		—		—		—		—		(4)		(4)
Balance as of June 30, 2018	683	$	683	148	$	(8,485)	$	5,916	$	14,484	$	(3,756)	$	8,842	$	(12)	$	8,830

See descriptions of the net income and other comprehensive income impacts in the consolidated statement of income and consolidated statement of comprehensive income for the six months ended June 30, 2018 sections above. Additionally, we recorded an adjustment to the opening balance of retained earnings on January 1, 2018 for the adoption of ASU No. 2016-16, which was impacted by our adjustments to equipment leased to customers under operating leases.

Baxter International Inc.
Consolidated Statement of Changes in Equity
(in millions)
	For the Three Months Ended March 31, 2018
	Baxter International Inc. stockholders' equity
	Common stock shares	Common stock		Common stock shares in treasury	Common stock in treasury		Additional contributed capital		Retained earnings		Accumulated other comprehensive income (loss)		Total Baxter stockholders' equity		Noncontrolling interests		Total equity
As previously reported
Balance as of January 1, 2018	683	$	683	142	$	(7,981)	$	5,940	$	14,483	$	(4,001)	$	9,124	$	(8)	$	9,116
Adoption of new accounting standards	—	—		—	—		—		(16)		(3)		(19)		—		(19)
Net income	—	—		—	—		—		389		—		389		—		389
Other comprehensive income (loss)	—	—		—	—		—		—		128		128		—		128
Purchases of treasury stock	—	—		8	(522)		—		—		—		(522)		—		(522)
Stock issued under employee benefit plans and other	—	—		(3)	149		(28)		(36)		—		85		—		85
Dividends declared on common stock	—	—		—	—		—		(86)		—		(86)		—		(86)
Changes in noncontrolling interests	—	—		—	—		—		—		—		—		2		2
Balance as of March 31, 2018	683	$	683	147	$	(8,354)	$	5,912	$	14,734	$	(3,876)	$	9,099	$	(6)	$	9,093
Restatement impacts
Balance as of January 1, 2018	—	$	—	—	$	—	$	—	$	(469)	$	462	$	(7)	$	—	$	(7)
Adoption of new accounting standards	—	—		—	—		—		(4)		—		(4)		—		(4)
Net income	—	—		—	—		—		(7)		—		(7)		—		(7)
Other comprehensive income (loss)	—	—		—	—		—		—		(13)		(13)		—		(13)
Balance as of March 31, 2018	—	$	—	—	$	—	$	—	$	(480)	$	449	$	(31)	$	—	$	(31)
As restated
Balance as of January 1, 2018	683	$	683	142	$	(7,981)	$	5,940	$	14,014	$	(3,539)	$	9,117	$	(8)	$	9,109
Adoption of new accounting standards	—	—		—	—		—		(20)		(3)		(23)		—		(23)
Net income	—	—		—	—		—		382		—		382		—		382
Other comprehensive income (loss)	—	—		—	—		—		—		115		115		—		115
Purchases of treasury stock	—	—		8	(522)		—		—		—		(522)		—		(522)
Stock issued under employee benefit plans and other	—	—		(3)	149		(28)		(36)		—		85		—		85
Dividends declared on common stock	—	—		—	—		—		(86)		—		(86)		—		(86)
Changes in noncontrolling interests	—	—		—	—		—		—		—		—		2		2
Balance as of March 31, 2018	683	$	683	147	$	(8,354)	$	5,912	$	14,254	$	(3,427)	$	9,068	$	(6)	$	9,062

See descriptions of the net income and other comprehensive income impacts in the consolidated statement of income and consolidated statement of comprehensive income for the three months ended March 31, 2018 sections above. Additionally, we recorded an adjustment to the opening balance of retained earnings on January 1, 2018 for the adoption of ASU No. 2016-16, which was impacted by our adjustments to equipment leased to customers under operating leases.

Baxter International Inc.
Condensed Consolidated Statement of Cash Flows
(in millions)
	For the Six Months Ended June 30, 2019
	As previously reported		Restatement impacts		Restatement reference	As restated
Cash flows from operations
Net income	$	690	$	(35)		$	655
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization	393		(8)		(c)(g)	385
Deferred income taxes	(55)		(8)		(c)(g)	(63)
Stock compensation	57		—			57
Net periodic pension benefit and other postretirement costs	7		—			7
Intangible asset impairment	31		—			31
Other	34		10		(d)	44
Changes in balance sheet items:
Accounts receivable, net	(60)		—			(60)
Inventories	(91)		—			(91)
Accounts payable and accrued liabilities	(303)		4		(b)	(299)
Other	(86)		—		(e)(g)	(86)
Cash flows from operations - continuing operations	617		(37)			580
Cash flows from operations - discontinued operations	(6)		—			(6)
Cash flows from operations	611		(37)			574
Cash flows from investing activities
Capital expenditures	(352)		14		(c)	(338)
Acquisitions and investments, net of cash acquired	(111)		—			(111)
Other investing activities, net	1		—			1
Cash flows from investing activities	(462)		14			(448)
Cash flows from financing activities
Issuances of debt	1,661		—			1,661
Cash dividends on common stock	(198)		—			(198)
Proceeds from stock issued under employee benefit plans	262		—			262
Purchases of treasury stock	(720)		—			(720)
Other financing activities, net	(37)		—			(37)
Cash flows from financing activities	968		—			968
Effect of foreign exchange rate changes on cash and cash equivalents	(24)		26		(a)(d)(e)	2
Increase in cash and cash equivalents	1,093		3			1,096
Cash and cash equivalents at beginning of period	1,832		6		(e)	1,838
Cash and cash equivalents at end of period	$	2,925	$	9	(e)	2,934

The $35 million decrease to net income was driven by the items described above in the consolidated statement of income for the six months ended June 30, 2019 section.

(a) Foreign Currency Denominated Monetary Assets and Liabilities—The correction of these misstatements resulted in an increase to the effect of foreign exchange rate changes on cash and cash equivalents of $33 million for the six months ended June 30, 2019.

(b) Foreign Currency Derivative Contracts—The correction of these misstatements resulted in an increase to changes in accounts payable and accrued liabilities of $4 million for the six months ended June 30, 2019.

(c) Equipment Leased to Customers under Operating Leases—The correction of these misstatements resulted in decreases to depreciation and amortization of $7 million, deferred income taxes of $2 million and capital expenditures of $14 million for the six months ended June 30, 2019.

(d) Classification of Foreign Currency Gains and Losses in our Consolidated Statements of Cash Flows - The corrections of these misstatements resulted in a decrease to the effect of foreign exchange rate changes on cash and cash equivalents and an increase to other adjustments to reconcile net income to net cash from operating activities of $10 million for the six months ended June 30, 2019.

(e) Translation of the Financial Position and Results of Operations of our Foreign Operations into U.S. Dollars - The corrections of these misstatements resulted in an increase in cash and cash equivalents at the beginning of the period of $6 million, at the end of the period of $9 million and the effect of foreign exchange rate changes on cash and cash equivalents of $3 million and a decrease to other changes in balance sheet items of $1 million for the six months ended June 30, 2019.

(g) Other miscellaneous adjustments - The correction of these misstatements resulted in decreases to depreciation and amortization of $1 million and deferred income taxes of $6 million and an increase to other changes in balance sheet items of $1 million for the six months ended June 30, 2019.

Baxter International Inc.
Condensed Consolidated Statement of Cash Flows
(in millions)
	For the Three Months Ended March 31, 2019
	As previously reported		Restatement impacts		Restatement reference	As restated
Cash flows from operations
Net income	$	347	$	(5)		$	342
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization	195		(3)		(c)	192
Deferred income taxes	(6)		—			(6)
Stock compensation	22		—			22
Net periodic pension benefit and other postretirement costs	3		—			3
Other	19		(5)		(d)	14
Changes in balance sheet items:
Accounts receivable, net	32		—			32
Inventories	(82)		—			(82)
Accounts payable and accrued liabilities	(333)		(2)		(b)(g)	(335)
Other	(49)		1		(b)(e)(g)	(48)
Cash flows from operations - continuing operations	148		(14)			134
Cash flows from operations - discontinued operations	(6)		—			(6)
Cash flows from operations	142		(14)			128
Cash flows from investing activities
Capital expenditures	(198)		5		(c)	(193)
Acquisitions and investments, net of cash acquired	(109)		—			(109)
Other investing activities, net	1		—			1
Cash flows from investing activities	(306)		5			(301)
Cash flows from financing activities
Net increases in debt obligations with original maturities of three months of less	795		—			795
Cash dividends on common stock	(101)		—			(101)
Proceeds from stock issued under employee benefit plans	173		—			173
Purchases of treasury stock	(597)		—			(597)
Other financing activities, net	(32)		—			(32)
Cash flows from financing activities	238		—			238
Effect of foreign exchange rate changes on cash and cash equivalents	2		(3)		(a)(d)(e)	(1)
Increase (decrease) in cash and cash equivalents	76		(12)			64
Cash and cash equivalents at beginning of period	1,832		6		(e)	1,838
Cash and cash equivalents at end of period	$	1,908	$	(6)	(e)	1,902

The $5 million decrease to net income was driven by the items described above in the consolidated statement of income for the three months ended March 31, 2019 section.

(a) Foreign Currency Denominated Monetary Assets and Liabilities—The correction of these misstatements resulted in an increase to the effect of foreign exchange rate changes on cash and cash equivalents of $4 million for the three months ended March 31, 2019.

(b) Foreign Currency Derivative Contracts—The correction of these misstatements resulted in a decrease to changes in accounts payable and accrued liabilities of $1 million and an increase in other changes in balance sheet items of $1 million for the three months ended March 31, 2019.

(c) Equipment Leased to Customers under Operating Leases—The correction of these misstatements resulted in decreases to depreciation and amortization of $3 million and capital expenditures of $5 million for the three months ended March 31, 2019.

(d) Classification of Foreign Currency Gains and Losses in our Consolidated Statements of Cash Flows - The corrections of these misstatements resulted in an increase to the effect of foreign exchange rate changes on cash and cash equivalents and a decrease to other adjustments to reconcile net income to net cash from operating activities of $5 million for the three months ended March 31, 2019.

(e) Translation of the Financial Position and Results of Operations of our Foreign Operations into U.S. Dollars - The corrections of these misstatements resulted in an increase in cash and cash equivalents at the beginning of the period of $6 million and decreases to other changes in balance sheet items of $1 million, cash and cash equivalents at the end of the period of $6 million and the effect of foreign exchange rate changes on cash and cash equivalents of $12 million for the three months ended March 31, 2019.

(g) Other miscellaneous adjustments - The correction of these misstatements resulted in an increase to other changes in balance sheet items of $1 million and a decrease in changes in accounts payable and accrued liabilities of $1 million for the three months ended March 31, 2019.

Baxter International Inc.
Condensed Consolidated Statement of Cash Flows
(in millions)
	For the Six Months Ended June 30, 2018
	As previously reported		Restatement impacts		Restatement reference	As restated
Cash flows from operations
Net income	$	732	$	(9)		$	723
Adjustments to reconcile income from continuing operations to net cash from operating activities:
Depreciation and amortization	387		(5)		(c)	382
Deferred income taxes	(51)		—		(c)(g)	(51)
Stock compensation	54		—			54
Net periodic pension benefit and other postretirement costs	21		—			21
Other	10		(10)		(d)	—
Changes in balance sheet items:
Accounts receivable, net	43		—			43
Inventories	(134)		—			(134)
Accounts payable and accrued liabilities	(126)		2		(b)	(124)
Other	(84)		2		(e)	(82)
Cash flows from operations	852		(20)			832
Cash flows from investing activities
Capital expenditures	(311)		8		(c)	(303)
Acquisitions and investments, net of cash acquired	(228)		—			(228)
Cash flows from investing activities	(539)		8			(531)
Cash flows from financing activities
Cash dividends on common stock	(173)		—			(173)
Proceeds from stock issued under employee benefit plans	170		—			170
Purchases of treasury stock	(781)		—			(781)
Other financing activities, net	(24)		—			(24)
Cash flows from financing activities	(808)		—			(808)
Effect of foreign exchange rate changes on cash and cash equivalents	(42)		4		(a)(d)(e)	(38)
Decrease in cash and cash equivalents	(537)		(8)			(545)
Cash and cash equivalents at beginning of period	3,394		9		(e)	3,403
Cash and cash equivalents at end of period	$	2,857	$	1	(e)	2,858

The $9 million decrease to net income was driven by the items described above in the consolidated statement of income for the six months ended June 30, 2018 section.

(a) Foreign Currency Denominated Monetary Assets and Liabilities—The correction of these misstatements resulted in an increase to the effect of foreign exchange rate changes on cash and cash equivalents of $2 million for the six months ended June 30, 2018.

(b) Foreign Currency Derivative Contracts—The correction of these misstatements resulted in an increase to changes in accounts payable and accrued liabilities of $2 million for the six months ended June 30, 2018.

(c) Equipment Leased to Customers under Operating Leases—The correction of these misstatements resulted in decreases to depreciation and amortization of $5 million, deferred income taxes of $1 million and capital expenditures of $8 million for the six months ended June 30, 2018.

(d) Classification of Foreign Currency Gains and Losses in our Consolidated Statements of Cash Flows - The corrections of these misstatements resulted in an increase to the effect of foreign exchange rate changes on cash and cash equivalents and a decrease to other adjustments to reconcile net income to net cash from operating activities of $10 million for the six months ended June 30, 2018.

(e) Translation of the Financial Position and Results of Operations of our Foreign Operations into U.S. Dollars - The corrections of these misstatements resulted in increases in other changes in balance sheet items of $2 million, cash and cash equivalents at the beginning of the period of $9 million and at the end of the period of $1 million and a decrease to the effect of foreign exchange rate changes on cash and cash equivalents of $8 million for the six months ended June 30, 2018.

(g) Other miscellaneous adjustments - The correction of these misstatements resulted in an increase to deferred income taxes of $1 million for the six months ended June 30, 2018.

Baxter International Inc.
Condensed Consolidated Statement of Cash Flows
(in millions)
	For the Three Months Ended March 31, 2018
	As previously reported		Restatement impacts		Restatement reference	As restated
Cash flows from operations
Net income	$	389	$	(7)		$	382
Adjustments to reconcile income from continuing operations to net cash from operating activities:
Depreciation and amortization	192		(2)		(c)	190
Deferred income taxes	(33)		(5)		(g)	(38)
Stock compensation	20		—			20
Net periodic pension benefit and other postretirement costs	10		—			10
Other	2		(3)		(d)	(1)
Changes in balance sheet items:
Accounts receivable, net	76		—			76
Inventories	(56)		—			(56)
Accounts payable and accrued liabilities	(120)		1		(b)(g)	(119)
Other	(33)		(1)		(b)(e)	(34)
Cash flows from operations	447		(17)			430
Cash flows from investing activities
Capital expenditures	(155)		3		(c)	(152)
Acquisitions and investments, net of cash acquired	(219)		—			(219)
Cash flows from investing activities	(374)		3			(371)
Cash flows from financing activities
Cash dividends on common stock	(87)		—			(87)
Proceeds from stock issued under employee benefit plans	82		—			82
Purchases of treasury stock	(522)		—			(522)
Other financing activities, net	(18)		—			(18)
Cash flows from financing activities	(545)		—			(545)
Effect of foreign exchange rate changes on cash and cash equivalents	25		7		(a)(d)(e)	32
Decrease in cash and cash equivalents	(447)		(7)			(454)
Cash and cash equivalents at beginning of period	3,394		9		(e)	3,403
Cash and cash equivalents at end of period	$	2,947	$	2	(e)	2,949

The $7 million decrease to net income was driven by the items described above in the consolidated statement of income for the three months ended March 31, 2018 section.

(a) Foreign Currency Denominated Monetary Assets and Liabilities—The correction of these misstatements resulted in an increase to the effect of foreign exchange rate changes on cash and cash equivalents of $11 million for the three months ended March 31, 2018.

(b) Foreign Currency Derivative Contracts—The correction of these misstatements resulted in a decrease to changes in accounts payable and accrued liabilities of $1 million and an increase to other changes in balance sheet items of $2 million for the three months ended March 31, 2018.

(c) Equipment Leased to Customers under Operating Leases—The correction of these misstatements resulted in decreases to depreciation and amortization of $2 million and capital expenditures of $3 million for the three months ended March 31, 2018.

(d) Classification of Foreign Currency Gains and Losses in our Consolidated Statements of Cash Flows - The corrections of these misstatements resulted in an increase to the effect of foreign exchange rate changes on cash and cash equivalents and a decrease to other adjustments to reconcile net income to net cash from operating activities of $3 million for the three months ended March 31, 2018.

(e) Translation of the Financial Position and Results of Operations of our Foreign Operations into U.S. Dollars - The corrections of these misstatements resulted in increases in cash and cash equivalents at the beginning of the period of $9 million and at the end of the period of $2 million and decreases to other changes in balance sheet items of $3 million and the effect of foreign exchange rate changes on cash and cash equivalents of $7 million for the three months ended March 31, 2018.

(g) Other miscellaneous adjustments - The correction of these misstatements resulted in a decrease to deferred income taxes of $5 million and an increase to changes in accounts payable and accrued liabilities of $2 million for the three months ended March 31, 2018.