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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_________________________________________________________________________________
FORM 10-Q
_________________________________________________________________________________
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2021
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from              to            
Commission file number 1-4448
_________________________________________________________________________________
BAXTER INTERNATIONAL INC.
(Exact name of registrant as specified in its charter)
_________________________________________________________________________________
Delaware36-0781620
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
One Baxter Parkway,Deerfield,Illinois60015
(Address of Principal Executive Offices)(Zip Code)
224.948.2000
(Registrant’s telephone number, including area code)
_________________________________________________________________________________
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $1.00 par valueBAX (NYSE)New York Stock Exchange
Chicago Stock Exchange
0.4% Global Notes due 2024BAX 24New York Stock Exchange
1.3% Global Notes due 2025BAX 25New York Stock Exchange
1.3% Global Notes due 2029BAX 29New York Stock Exchange
3.95% Global Notes due 2030BAX 30New York Stock Exchange
1.73% Global Notes due 2031BAX 31New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x  No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerxAccelerated filero
Non-accelerated fileroSmaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.    o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     Yes    No x
The number of shares of the registrant’s Common Stock, par value $1.00 per share, outstanding as of July 22, 2021 was 499,910,255 shares.




BAXTER INTERNATIONAL INC.
FORM 10-Q
For the quarterly period ended June 30, 2021
TABLE OF CONTENTS
Page Number
Item 1A.






























PART I. FINANCIAL INFORMATION
Item 1.    Financial Statements
Baxter International Inc.
Condensed Consolidated Balance Sheets (unaudited)
(in millions, except share information)
June 30,
2021
December 31,
2020
Current assets:
Cash and cash equivalents $3,136 $3,730 
Accounts receivable, net of allowances of $117 in 2021 and $125 in 2020
2,021 2,007 
Inventories2,065 1,916 
Prepaid expenses and other current assets782 758 
Total current assets8,004 8,411 
Property, plant and equipment, net 4,649 4,722 
Goodwill 3,148 3,217 
Other intangible assets, net 1,910 1,671 
Operating lease right-of-use assets567 603 
Other non-current assets 1,404 1,395 
Total assets $19,682 $20,019 
Current liabilities:
Short-term debt $51 $ 
Current maturities of long-term debt and finance lease obligations406 406 
Accounts payable 1,005 1,043 
Accrued expenses and other current liabilities1,882 1,884 
Total current liabilities 3,344 3,333 
Long-term debt and finance lease obligations 5,710 5,786 
Operating lease liabilities469 501 
Other non-current liabilities 1,624 1,673 
Total liabilities 11,147 11,293 
Commitments and contingencies
Equity:
Common stock, $1 par value, authorized 2,000,000,000 shares, issued 683,494,944 shares in 2021 and 2020
683 683 
Common stock in treasury, at cost, 183,639,786 shares in 2021 and 178,580,208 shares in 2020
(11,561)(11,051)
Additional contributed capital6,090 6,043 
Retained earnings16,658 16,328 
Accumulated other comprehensive (loss) income(3,376)(3,314)
Total Baxter stockholders’ equity8,494 8,689 
Noncontrolling interests41 37 
Total equity8,535 8,726 
Total liabilities and equity$19,682 $20,019 
The accompanying notes are an integral part of these condensed consolidated financial statements.
2


Baxter International Inc.
Condensed Consolidated Statements of Income (unaudited)
(in millions, except per share data)
Three months ended
June 30,
Six months ended
June 30,
2021202020212020
Net sales$3,098 $2,718 $6,044 $5,520 
Cost of sales1,865 1,680 3,666 3,319 
Gross margin1,233 1,038 2,378 2,201 
Selling, general and administrative expenses675 590 1,302 1,218 
Research and development expenses139 117 267 263 
Other operating income, net(5) (5)(20)
Operating income424 331 814 740 
Interest expense, net34 36 68 57 
Other (income) expense, net(2)6 3 16 
Income before income taxes392 289 743 667 
Income tax expense 91 42 142 87 
Net income 301 247 601 580 
Net income attributable to noncontrolling interests3 1 5 2 
Net income attributable to Baxter stockholders$298 $246 $596 $578 
Earnings per share
Basic$0.59 $0.48 $1.18 $1.14 
Diluted$0.59 $0.48 $1.17 $1.12 
Weighted-average number of shares outstanding
Basic503 509 504 508 
Diluted509 517 510 517 
The accompanying notes are an integral part of these condensed consolidated financial statements.
3


Baxter International Inc.
Condensed Consolidated Statements of Comprehensive Income (unaudited)
(in millions)
Three months ended
June 30,
Six months ended
June 30,
2021202020212020
Net income$301 $247 $601 $580 
Other comprehensive income (loss), net of tax:
Currency translation adjustments, net of tax expense (benefit) of ($4) and $2 for the three months ended June 30, 2021 and 2020, respectively, and $13 and ($6) for the six months ended June 30, 2021 and 2020
88 189 (120)(170)
Pension and other postretirement benefits, net of tax expense of $3 and $1 for the three months ended June 30, 2021 and 2020, respectively, and $11 and $7 for the six months ended June 30, 2021 and 2020
11 4 41 26 
Hedging activities, net of tax expense (benefit) of $2 and $1 for the three months ended June 30, 2021 and 2020, respectively, and $5 and ($38) for the six months ended June 30, 2021 and 2020
5 (4)17 (134)
Total other comprehensive income (loss), net of tax104 189 (62)(278)
Comprehensive income405 436 539 302 
Less: Comprehensive income attributable to noncontrolling interests3 1 5 2 
Comprehensive income attributable to Baxter stockholders$402 $435 $534 $300 
The accompanying notes are an integral part of these condensed consolidated financial statements.
4


Baxter International Inc.
Condensed Consolidated Statements of Changes in Equity (unaudited)
(in millions)
For the three months ended June 30, 2021
Baxter International Inc. stockholders' equity
Common stock sharesCommon stockCommon stock shares
in treasury
Common stock in
treasury
Additional contributed capitalRetained earningsAccumulated other comprehensive
income (loss)
Total Baxter stockholders' equityNoncontrolling interestsTotal equity
Balance as of April 1, 2021683 $683 181 $(11,296)$6,043 $16,502 $(3,480)$8,452 $38 $8,490 
Net income— — — — — 298 — 298 3 301 
Other comprehensive income (loss)— — — — — — 104 104 — 104 
Purchases of treasury stock— — 3 (300)— — — (300)— (300)
Stock issued under employee benefit plans and other— —  35 47 — — 82 — 82 
Dividends declared on common stock— — — — — (142)— (142)— (142)
Balance as of June 30, 2021683 $683 184 $(11,561)$6,090 $16,658 $(3,376)$8,494 $41 $8,535 
For the six months ended June 30, 2021
Baxter International Inc. stockholders' equity
Common stock sharesCommon stockCommon stock shares in treasuryCommon stock in treasuryAdditional contributed capitalRetained earningsAccumulated other comprehensive income (loss)Total Baxter stockholders' equityNoncontrolling interestsTotal equity
Balance as of January 1, 2021683 $683 179 $(11,051)$6,043 $16,328 $(3,314)$8,689 $37 $8,726 
Net income— — — — — 596 — 596 5 601 
Other comprehensive income (loss)— — — — — — (62)(62)— (62)
Purchases of treasury stock— — 7 (600) — — (600)— (600)
Stock issued under employee benefit plans and other— — (2)90 47  — 137 — 137 
Dividends declared on common stock— — — — — (266)— (266)— (266)
Change in noncontrolling interests— — — — — — — — (1)(1)
Balance as of June 30, 2021683 $683 184 $(11,561)$6,090 $16,658 $(3,376)$8,494 $41 $8,535 

5


For the three months ended June 30, 2020
Baxter International Inc. stockholders' equity
Common stock sharesCommon stockCommon stock shares in treasuryCommon stock in treasuryAdditional contributed capitalRetained earningsAccumulated other comprehensive income (loss)Total Baxter stockholders' equityNoncontrolling interestsTotal equity
Balance as of April 1, 2020683 $683 175 $(10,677)$5,935 $15,935 $(4,177)$7,699 $31 $7,730 
Net income— — — — 246 — 246 1 247 
Other comprehensive income (loss)— — — — — — 189 189 — 189 
Stock issued under employee benefit plans and other— — (2)80 40 — — 120 — 120 
Dividends declared on common stock— — — — — (126)(126)— (126)
Balance as of June 30, 2020683 $683 173 $(10,597)$5,975 $16,055 $(3,988)$8,128 $32 $8,160 
For the six months ended June 30, 2020
Baxter International Inc. stockholders' equity
Common stock sharesCommon stockCommon stock shares in treasuryCommon stock in treasuryAdditional contributed capitalRetained earningsAccumulated other comprehensive income (loss)Total Baxter stockholders' equityNoncontrolling interestsTotal equity
Balance as of January 1, 2020683 $683 177 $(10,764)$5,955 $15,718 $(3,710)$7,882 $30 $7,912 
Adoption of new accounting standards— — — — — (4)— (4) (4)
Net income— — — — — 578 — 578 2 580 
Other comprehensive income (loss)— — — — — — (278)(278)— (278)
Stock issued under employee benefit plans and other— — (4)167 20 — — 187 — 187 
Dividends declared on common stock— — — — — (237)— (237)— (237)
Balance as of June 30, 2020683 $683 173 $(10,597)$5,975 $16,055 $(3,988)$8,128 $32 $8,160 
The accompanying notes are an integral part of these condensed consolidated financial statements.
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Baxter International Inc.
Condensed Consolidated Statements of Cash Flows (unaudited)
(in millions)
Six months ended
June 30,
20212020
Cash flows from operations
Net income$601 $580 
Adjustments to reconcile net income to cash flows from operations:
Depreciation and amortization439 401 
Deferred income taxes(36)(23)
Stock compensation59 64 
Net periodic pension and other postretirement costs51 40 
Intangible asset impairments 17 
Other10 27 
Changes in balance sheet items:
Accounts receivable, net(42)(14)
Inventories(155)(261)
Prepaid expenses and other current assets(24)(74)
Accounts payable (9)116 
Accrued expenses and other current liabilities(9)(164)
Other(31)(61)
Cash flows from operations – continuing operations854 648 
Cash flows from operations – discontinued operations (2)
Cash flows from operations854 646 
Cash flows from investing activities
Capital expenditures(329)(316)
Acquisitions, net of cash acquired, and investments(417)(453)
Other investing activities, net20 11 
Cash flows from investing activities(726)(758)
Cash flows from financing activities
Issuances of debt 1,240 
Net increase (decrease) in debt with original maturities of three months or less51 (225)
Cash dividends on common stock(249)(223)
Proceeds from stock issued under employee benefit plans93 151 
Purchases of treasury stock(565) 
Other financing activities, net(37)(34)
Cash flows from financing activities(707)909 
Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash(17)(38)
Increase (decrease) in cash, cash equivalents and restricted cash(596)759 
Cash, cash equivalents and restricted cash at beginning of period3,736 3,335 
Cash, cash equivalents and restricted cash at end of period (1)
$3,140 $4,094 
(1)    We did not have any restricted cash balances as of December 31, 2019. The following table provides a reconciliation of cash, cash equivalents and restricted cash shown above to the amounts reported within the condensed consolidated balance sheet as of June 30, 2021,
December 31, 2020, and June 30, 2020 (in millions):
June 30, 2021December 31, 2020June 30, 2020
Cash and cash equivalents$3,136 $3,730 $4,085 
Restricted cash included in prepaid expenses and other current assets4 6 9 
Cash, cash equivalents and restricted cash$3,140 $3,736 $4,094 
The accompanying notes are an integral part of these condensed consolidated financial statements.
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Baxter International Inc.
Notes to Condensed Consolidated Financial Statements (unaudited)
1. BASIS OF PRESENTATION
The unaudited interim condensed consolidated financial statements of Baxter International Inc. and its subsidiaries (we or our) have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP) in the United States have been condensed or omitted. These unaudited interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in our Current Report on Form 8-K filed with the SEC on April 29, 2021 (2020 Annual Report), which revised and superseded the corresponding sections of the Annual Report on Form 10-K for the year ended December 31, 2020.
In the opinion of management, the unaudited interim condensed consolidated financial statements reflect all adjustments necessary for a fair presentation of the financial position, results of operations and cash flows for the periods presented. All such adjustments, unless otherwise noted herein, are of a normal, recurring nature. The results of operations for the current interim period are not necessarily indicative of the results of operations to be expected for the full year.
Certain reclassifications have been made to conform the prior period condensed consolidated statements to the current period presentation.
Risks and Uncertainties Related to COVID-19
Our global operations expose us to risks associated with public health crises and epidemics/pandemics, such as the novel strain of coronavirus (COVID-19). COVID-19 has had, and we expect will continue to have, an adverse impact on our operations, supply chains and distribution systems and has increased and will continue to increase our expenses, including as a result of impacts associated with preventive and precautionary measures that we, other businesses and governments are taking. These measures have led to unprecedented restrictions on, disruptions in, and other related impacts on businesses and personal activities. In addition to travel restrictions put in place in early 2020, governments have closed borders, imposed prolonged quarantines and may continue those measures or implement other restrictions and requirements in light of the continuing spread of the pandemic. We expect that these evolving restrictions and requirements will continue to have an adverse effect on our business.
2. ACQUISITIONS AND OTHER ARRANGEMENTS
Transderm Scop
In March 2021, we acquired the rights to Transderm Scop (TDS) for the U.S. and specified territories outside of the U.S. from subsidiaries of GlaxoSmithKline for an upfront purchase price of $60 million including the cost of acquired inventory and the potential for additional cash consideration of $30 million, which had an acquisition-date fair value of $24 million, based upon regulatory approval of a new contract manufacturer by a specified date. We previously sold this product under a distribution license to the U.S. institutional market. TDS is indicated for post-operative nausea and vomiting in the U.S. and motion sickness in European markets. We concluded that the acquired assets met the definition of a business and accounted for the transaction as a business combination using the acquisition method of accounting. The fair value of the potential contingent consideration payment was estimated by applying a probability-weighted expected payment model and is a Level 3 fair value measurement due to the significant estimates and assumptions used by management in establishing the estimated fair value.

The following table summarizes the fair value of the consideration transferred:
(in millions)
Cash$60 
Contingent Consideration24 
Total Consideration$84 

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The following table summarizes the fair value of the assets acquired as of the acquisition date:
(in millions)
Assets acquired
Inventory$16 
Goodwill1 
Other intangible assets67 
Total assets required$84 

The valuation of the assets acquired are preliminary and measurement period adjustments may be recorded in the future as we finalize our fair value estimates. The results of operations of the acquired business have been included in our consolidated statement of income since the date the business was acquired and were not material for the three and six months ended June 30, 2021.

We allocated $64 million of the total consideration to the TDS developed product rights with an estimated useful life of 9 years and $3 million to customer relationships with an estimated useful life of 7 years. The fair values of the intangible assets were determined using the income approach. The discount rates used to measure the intangible assets were 22.5% for developed product rights and 15.5% for customer relationships. We consider the fair value of the intangible assets to be Level 3 measurements due to the significant estimates and assumptions used by management in establishing the estimated fair values.

The goodwill, which is deductible for tax purposes, includes the value of overall strategic benefits provided to our pharmaceutical portfolio and is included in the Americas and EMEA segments.

We have not presented pro forma financial information for the acquisition because its results are not material to our consolidated financial statements.
Caelyx and Doxil
In February 2021, we acquired the rights to Caelyx and Doxil, the branded versions of liposomal doxorubicin, from a subsidiary of Johnson & Johnson for specified territories outside of the U.S. We previously acquired the U.S. rights to this product in 2019. Liposomal doxorubicin is a chemotherapy medicine used to treat various types of cancer. The transaction was accounted for as an asset acquisition, as substantially all of the fair value of the gross assets acquired was concentrated in the developed technology intangible asset. The purchase price of $325 million was allocated to the assets acquired, which included a $314 million developed-technology intangible asset with an estimated useful life of 9 years and an $11 million customer relationship intangible asset with an estimated useful life of 8 years. Net sales related to this acquisition were $28 million and $41 million, respectively, for the three and six months ended June 30, 2021.
PerClot
In July 2021, we acquired certain assets related to PerClot Polysaccharide Hemostatic System (PerClot), including distribution rights for the U.S. and specified territories outside of the U.S., from CryoLife, Inc. for an upfront purchase price of $25 million and the potential for additional cash consideration of up to $36 million based upon regulatory and commercial milestones. PerClot is an absorbable powder hemostat indicated for use in surgical procedures, including cardiac, vascular, orthopedic, spinal, neurological, gynecological, ENT and trauma surgery as an adjunct hemostat when control of bleeding from capillary, venous, or arteriolar vessels by pressure, ligature, and other conventional means is either ineffective or impractical. PerClot is approved for distribution in the European Union and other markets and is expected to be submitted for Pre-Market Approval (PMA) for distribution in the U.S. in the second half of 2021.
3. SUPPLEMENTAL FINANCIAL INFORMATION
Interest Expense, Net
Three months ended
June 30,
Six months ended
June 30,
(in millions)2021202020212020
Interest expense, net of capitalized interest$37 $40 $74 $70 
Interest income(3)(4)(6)(13)
Interest expense, net$34 $36 $68 $57 
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Other (Income) Expense, Net
Three months ended
June 30,
Six months ended
June 30,
(in millions)2021202020212020
Foreign exchange (gains) losses, net$8 $10 $5 $21 
Pension and other postretirement benefit plans3 (1)7 (2)
Change in fair value of marketable equity securities(9) (7) 
Other, net(4)(3)(2)(3)
Other (income) expense, net$(2)$6 $3 $16 
Allowance for Doubtful Accounts
The following table is a summary of the changes in our allowance for doubtful accounts for the three and six months ended June 30, 2021 and 2020.
Three months ended
June 30,
Six months ended
June 30,
(in millions)2021202020212020
Balance at beginning of period$120 $114 $125 $112 
Adoption of new accounting standard   4 
Charged to costs and expenses(4)5 (3)12 
Write-offs(1)(1)(1)(1)
Currency translation adjustments2 2 (4)(7)
Balance at end of period$117 $120 $117 $120 
Inventories
(in millions)June 30,
2021
December 31,
2020
Raw materials$474 $460 
Work in process225 196 
Finished goods1,366 1,260 
Inventories$2,065 $1,916 
Property, Plant and Equipment, Net
(in millions)June 30,
2021
December 31,
2020
Property, plant and equipment, at cost$11,261 $11,271 
Accumulated depreciation(6,612)(6,549)
Property, plant and equipment, net$4,649 $4,722 
Non-Cash Operating and Investing Activities
Right-of-use operating lease assets obtained in exchange for lease obligations for the six months ended June 30, 2021 and 2020 were $21 million and $35 million, respectively. Right-of-use finance lease assets obtained in exchange for lease obligations for the six months ended June 30, 2020 were $7 million. As of June 30, 2021, we have entered into lease agreements with aggregate future lease payments of approximately $46 million for facilities and equipment that have not yet commenced.
Purchases of property, plant and equipment included in accounts payable as of June 30, 2021 and 2020 were $70 million and $42 million, respectively.
Unsettled share repurchases included in accrued expenses and other current liabilities were $35 million as of June 30, 2021. There were no unsettled share repurchases as of June 30, 2020.
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4. GOODWILL AND OTHER INTANGIBLE ASSETS, NET
Goodwill
The following is a reconciliation of goodwill by business segment.
(in millions)AmericasEMEAAPACTotal
Balance as of December 31, 2020$2,574 $406 $237 $3,217 
Reallocation of goodwill81 (81)  
Acquisitions1   1 
Currency translation(58)(7)(5)(70)
Balance as of June 30, 2021$2,598 $318 $232 $3,148 
As of June 30, 2021, there were no reductions in goodwill relating to impairment losses.
As discussed in Note 16 - Segment Information, we made a change to our reportable segments in the first quarter of 2021. As a result of this change, we reallocated goodwill from our EMEA segment to the Americas segment using a relative fair value approach. In addition, we completed an assessment of any potential goodwill impairment for all reporting units immediately prior to the reallocation and determined that no impairment existed.
Other intangible assets, net
The following is a summary of our other intangible assets.
(in millions)Developed technology, including patentsOther amortized intangible assetsIndefinite-lived intangible assets
Total
June 30, 2021
Gross other intangible assets$3,044 $501 $169 $3,714 
Accumulated amortization(1,462)(342)— (1,804)
Other intangible assets, net$1,582 $159 $169 $1,910 
December 31, 2020
Gross other intangible assets$2,713 $495 $169 $3,377 
Accumulated amortization(1,374)(332)— (1,706)
Other intangible assets, net$1,339 $163 $169 $1,671 
Intangible asset amortization expense was $67 million and $56 million for the three months ended June 30, 2021 and 2020, respectively, and $131 million and $108 million for the six months ended June 30, 2021 and 2020, respectively.
In the second quarter of 2020, we recognized an impairment charge of $17 million related to a developed-technology intangible asset due to a decline in market expectations for the related product. The fair value of the intangible asset was measured using a discounted cash flow approach and the charge is classified within cost of sales in the accompanying condensed consolidated statement of income. We consider the fair value of the asset to be a Level 3 measurement due to the significant estimates and assumptions we used in establishing the estimated fair value.
5. FINANCING ARRANGEMENTS
Significant Debt Activity
In 2020, we issued $500 million of 3.95% senior notes due in April 2030 and $650 million of 1.73% senior notes due in 2031 (the Notes). In conjunction with the issuances of the Notes, we entered into registration rights agreements in which we agreed to file a registration statement with the SEC with respect to an offer to exchange the Notes for new
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issues of Notes with the same terms registered under the Securities Act of 1933. Those exchange offers with respect to the Notes were completed in May 2021.
In July 2021, Baxter redeemed $400 million in 1.7% Senior Notes due August 2021, which was partially funded by the issuance of commercial paper.
Credit Facilities
Our U.S. dollar-denominated revolving credit facility has a capacity of $2.0 billion and our Euro-denominated revolving credit facility has a capacity of approximately €200 million. As of June 30, 2021 and December 31, 2020, there were no borrowings outstanding under our U.S. dollar or Euro-denominated credit facilities.
Commercial Paper
As of June 30, 2021, we had $50 million of commercial paper outstanding with a weighted-average interest rate of 0.3%. There was no commercial paper outstanding as of December 31, 2020.
6. COMMITMENTS AND CONTINGENCIES
We are involved in product liability, patent, commercial, and other legal matters that arise in the normal course of our business. We record a liability when a loss is considered probable and the amount can be reasonably estimated. If the reasonable estimate of a probable loss is a range, and no amount within the range is a better estimate, the minimum amount in the range is accrued. If a loss is not probable or a probable loss cannot be reasonably estimated, no liability is recorded. As of June 30, 2021 and December 31, 2020, our total recorded reserves with respect to legal and environmental matters were $72 million and $40 million, respectively, and we had a $7 million insurance receivable as of June 30, 2021.
We have established reserves for certain of the matters discussed below. We are not able to estimate the amount or range of any loss for certain contingencies for which there is no reserve or additional loss for matters already reserved. While our liability in connection with these claims cannot be estimated and the resolution thereof in any reporting period could have a significant impact on our results of operations and cash flows for that period, the outcome of these legal proceedings is not expected to have a material adverse effect on our consolidated financial position. While we believe that we have valid defenses in the matters set forth below, litigation is inherently uncertain, excessive verdicts do occur, and we may incur material judgments or enter into material settlements of claims.
In addition to the matters described below, we remain subject to the risk of future administrative and legal actions. With respect to governmental and regulatory matters, these actions may lead to product recalls, injunctions, and other restrictions on our operations and monetary sanctions, including significant civil or criminal penalties. With respect to intellectual property, we may be exposed to significant litigation concerning the scope of our and others’ rights. Such litigation could result in a loss of patent protection or the ability to market products, which could lead to a significant loss of sales, or otherwise materially affect future results of operations.
Environmental
We are involved as a potentially responsible party (PRP) for environmental clean-up costs at six Superfund sites. Under the U.S. Superfund statute and many state laws, generators of hazardous waste sent to a disposal or recycling site are liable for site cleanup if contaminants from that property later leak into the environment. The laws generally provide that a PRP may be held jointly and severally liable for the costs of investigating and remediating the site. Separate from these Superfund cases, we are involved in an ongoing voluntary environmental remediation associated with historic operations at our Irvine, California, United States facility. As of June 30, 2021 and December 31, 2020, our environmental reserves, which are measured on an undiscounted basis, were $19 million and $20 million, respectively. After considering these reserves, the outcome of these matters is not expected to have a material adverse effect on our financial position or results of operations.
General Litigation
In November 2016, a putative antitrust class action complaint seeking monetary and injunctive relief was filed in the United States District Court for the Northern District of Illinois. The complaint alleges a conspiracy among manufacturers of IV solutions to restrict output and affect pricing in connection with a shortage of such solutions. Similar parallel actions subsequently were filed. In January 2017, a single consolidated complaint covering these matters was filed in the Northern District of Illinois. We filed a motion to dismiss the consolidated complaint in February 2017. The court granted our motion to dismiss the consolidated complaint without prejudice in July 2018.
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The plaintiffs filed an amended complaint, which we moved to dismiss on November 9, 2018. The court granted our motion to dismiss the amended complaint with prejudice on April 3, 2020. The plaintiffs did not file an appeal.
In April 2017, we became aware of a criminal investigation by the U.S. Department of Justice (DOJ), Antitrust Division and a federal grand jury in the United States District Court for the Eastern District of Pennsylvania. We and an employee received subpoenas seeking production of documents and testimony regarding the manufacturing, selling, pricing and shortages of IV solutions and containers (including saline solutions and certain other injectable medicines sold by us) and communications with competitors regarding the same. On November 30, 2018, the DOJ notified us that it had closed the investigation. The New York Attorney General had also requested that we provide information regarding business practices in the IV saline industry. We cooperated with that request and have been advised that the matter has now been closed.
In August 2019, we were named in an amended complaint filed by Fayette County, Georgia in the MDL In re: National Prescription Opiate Litigation pending in the U.S. District Court, Northern District of Ohio. The complaint alleges that multiple manufacturers and distributors of opiate products improperly marketed and diverted these products, which caused harm to Fayette County. The complaint is limited in its allegations as to Baxter and does not distinguish between injectable opiate products and orally administered opiates. We manufactured generic injectable opiate products in our facility in Cherry Hill, NJ, which we divested in 2011.
In November 2019, we and certain of our officers were named in a class action complaint captioned Ethan E. Silverman et al. v. Baxter International Inc. et al. that was filed in the United States District Court for the Northern District of Illinois. The plaintiff, who allegedly purchased shares of our common stock during the specified class period, filed this putative class action on behalf of himself and shareholders who acquired Baxter common stock between February 21, 2019 and October 23, 2019. The plaintiff alleges that we and certain officers violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder by making allegedly false and misleading statements and failing to disclose material facts relating to certain intra-company transactions undertaken for the purpose of generating foreign exchange gains or avoiding foreign exchange losses, as well as our internal controls over financial reporting. On January 29, 2020, the Court appointed Varma Mutual Pension Insurance Company and Louisiana Municipal Police Employees Retirement System as lead plaintiffs in the case. Plaintiffs filed an amended complaint on June 25, 2020 containing substantially the same allegations. On August 24, 2020, we filed a motion to dismiss the amended complaint. On January 12, 2021, the Court granted our motion to dismiss the amended complaint but gave plaintiffs an opportunity to file a further-amended complaint. The parties reached an agreement to settle the case for $16 million, subject to the completion of confirmatory discovery and final approval by the Court. The Court granted preliminary approval of the settlement on April 20, 2021. A final approval hearing is currently scheduled for August 10, 2021. We are fully reserved for the settlement amount as of June 30, 2021.
In addition, we have received a stockholder request for inspection of our books and records in connection with the announcement made in our Form 8-K on October 24, 2019 that we had commenced an internal investigation into certain intra-company transactions that impacted our previously reported non-operating foreign exchange gains and losses. As initially disclosed on October 24, 2019, we also voluntarily advised the staff of the SEC of our internal investigation and we are continuing to cooperate with the staff of the SEC.
In March 2020, two lawsuits were filed against us in the Northern District of Illinois by plaintiffs alleging injuries as a result of exposure to ethylene oxide used in our manufacturing facility in Mountain Home, Arkansas to sterilize certain of our products. The plaintiffs seek damages, including compensatory and punitive damages in an unspecified amount, and unspecified injunctive and declaratory relief.
7. STOCKHOLDERS’ EQUITY
Stock Options Award Modification
In the first quarter of 2020, we modified the terms of stock option awards granted to 123 employees. Specifically, we extended the term for certain stock options that were scheduled to expire in the first quarter of 2020 as applicable employees were not permitted to exercise these awards due to our announcement in February 2020 that our previously issued financial statements should no longer be relied upon. The stock options were extended in order to allow impacted employees to exercise their stock option awards for a brief period once we became current with our SEC reporting obligations, which occurred in March 2020. As a result of the modifications, we recognized an additional $8 million of stock compensation expense during the quarter ended March 31, 2020.
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Cash Dividends
Cash dividends declared per share for the three and six months ended June 30, 2021 were $0.28