|
Demo version. Subscribers have full viewing and printing access to our 6,000+ Annual Reports and 9,200+ 10-Ks. Click here for ordering information |
|
<- Back to Baxter International company page. Baxter International 10-K Reports: 2009 2008 2007 2006 2005 2004 2003 2001 2000 1999 1998 1997 1996 1995 1994 1993 |
| Baxter International 2001 10-K Report (Partial 10-K shown; subscribers can see the entire 10-K report.) |
0000950131-02-000882.hdr.sgml : 20020415
ACCESSION NUMBER: 0000950131-02-000882
CONFORMED SUBMISSION TYPE: 10-K
PUBLIC DOCUMENT COUNT: 9
CONFORMED PERIOD OF REPORT: 20011231
FILED AS OF DATE: 20020313
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: BAXTER INTERNATIONAL INC
CENTRAL INDEX KEY: 0000010456
STANDARD INDUSTRIAL CLASSIFICATION: SURGICAL & MEDICAL INSTRUMENTS & APPARATUS [3841]
IRS NUMBER: 360781620
STATE OF INCORPORATION: DE
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: 10-K
SEC ACT: 1934 Act
SEC FILE NUMBER: 001-04448
FILM NUMBER: 02574293
BUSINESS ADDRESS:
STREET 1: ONE BAXTER PKWY
STREET 2: DF2-2W
CITY: DEERFIELD
STATE: IL
ZIP: 60015
BUSINESS PHONE: 8479482212
MAIL ADDRESS:
STREET 1: ONE BAXTER PARKWAY
STREET 2: DF2-2W
CITY: DEERFIELD
STATE: IL
ZIP: 60015
FORMER COMPANY:
FORMER CONFORMED NAME: BAXTER LABORATORIES INC
DATE OF NAME CHANGE: 19760608
FORMER COMPANY:
FORMER CONFORMED NAME: BAXTER TRAVENOL LABORATORIES INC
DATE OF NAME CHANGE: 19880522
10-K
1
d10k.txt
FORM 10-K
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
FOR ANNUAL AND TRANSITION REPORTS
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 for the fiscal year ended December 31, 2001
OR
[_] 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
-----------------
[LOGO] Baxter
Baxter International Inc.
(Exact Name of Registrant as Specified in its Charter)
Delaware 36-0781620
(State or Other
Jurisdiction of
Incorporation or (I.R.S. Employer
Organization) Identification No.)
One Baxter Parkway,
Deerfield, Illinois 60015
(Address of Principal
Executive Offices) (Zip Code)
Registrant's telephone
number, including area
code: 847.948.2000
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
------------------- ---------------------
Common stock, $1 par value New York Stock Exchange, Inc.
Chicago Stock Exchange, Inc.
Pacific Exchange, Inc.
Preferred Stock Purchase Rights New York Stock Exchange, Inc.
(currently traded with common stock) Chicago Stock Exchange, Inc.
Pacific Exchange, Inc.
Securities registered pursuant to Section 12(g) of the Act: None
-----------------
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 __(check mark) No ____
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. [_]
The aggregate market value of the voting common equity held by
non-affiliates of the registrant (based on the per share closing sale price of
$55.37 on March 1, 2002, and for the purpose of this computation only, the
assumption that all registrant's directors and executive officers are
affiliates) was approximately $33.1 billion. There is no non-voting common
equity held by non-affiliates of the registrant.
The number of shares of the registrant's common stock, $1 par value,
outstanding as of February 28, 2002, was 599,868,645.
Documents Incorporated By Reference
Portions of the registrant's annual report to stockholders for fiscal year
ended December 31, 2001 are incorporated by reference into Parts I, II and IV
of this report. Portions of the registrant's proxy statement for use in
connection with its annual meeting of stockholders to be held on May 7, 2002
are incorporated by reference into Part III of this report.
================================================================================
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
Page
Number
------
Item 1. Business
(a) General Development of Business................................................. 1
(b) Financial Information about Segments............................................ 1
(c) Narrative Description of Business............................................... 1
(d) Financial Information about Foreign and Domestic Operations and Export Sales.... 7
Item 2. Properties.......................................................................... 7
Item 3. Legal Proceedings................................................................... 8
Item 4. Submission of Matters to a Vote of Security Holders................................. 12
Item 5. Market for the Registrant's Common Equity and Related Stockholder Matters........... 13
Item 6. Selected Financial Data............................................................. 13
Item 7. Management's Discussion and Analysis of Financial Condition and Results of
Operations........................................................................ 13
Item 7A. Quantitative and Qualitative Disclosures about Market Risk.......................... 13
Item 8. Financial Statements and Supplementary Data......................................... 13
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 13
Item 10. Directors and Executive Officers of the Registrant.................................. 14
(a) Identification of Directors..................................................... 14
(b) Identification of Executive Officers............................................ 14
(c) Compliance with Section 16(a) of the Securities Exchange Act of 1934............ 16
Item 11. Executive Compensation.............................................................. 16
Item 12. Security Ownership of Certain Beneficial Owners and Management...................... 16
Item 13. Certain Relationships and Related Transactions...................................... 16
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K..................... 17
(a) Financial Statements............................................................ 17
(b) Reports on Form 8-K............................................................. 17
(c) Exhibits........................................................................ 17
- --------------------------------------------------------------------------------
ALYX, Baxter, Ceprotin, Extraneal, HomeChoice Pediatric, INTERCEPT,
Nanoedge, Neis Vac-C and Syntra are trademarks of Baxter International Inc. and
its affiliates.
- --------------------------------------------------------------------------------
[LOGO] Baxter
Baxter International Inc., One Baxter Parkway, Deerfield, Illinois 60015
- --------------------------------------------------------------------------------
PART I
- --------------------------------------------------------------------------------
Item 1. Business.
(a) General Development of Business.
Baxter International Inc. was incorporated under Delaware law in 1931. As
used in this report, except as otherwise indicated in information incorporated
by reference, "Baxter International" means Baxter International Inc. and
"Baxter" or the "company" means Baxter International and its subsidiaries.
Baxter engages in the worldwide development, manufacture and distribution of
a diversified line of products, systems and services used primarily in the
health care field. We manufacture products in 28 countries and sell them in
over 100 countries. Health care is concerned with the preservation of health
and with the diagnosis, cure, mitigation and treatment of disease and body
defects and deficiencies. Our products are used by hospitals, clinical and
medical research laboratories, blood and blood dialysis centers, rehabilitation
centers, nursing homes, doctors' offices and by patients, at home, under
physician supervision.
For information regarding significant acquisitions, see our Annual Report to
Stockholders for the year ended December 31, 2001 (Annual Report), pages
45--47, section entitled "Notes to Consolidated Financial
Statements--Acquisitions" which is incorporated by reference.
(b) Financial Information About Segments.
Incorporated by reference from the Annual Report, pages 57--58, section
entitled "Notes to Consolidated Financial Statements--Segment Information."
(c) Narrative Description of Business.
Company Overview
Baxter operates as a global leader in critical therapies for
life-threatening conditions. Our continuing operations are comprised of three
segments: Medication Delivery, which provides a range of intravenous solutions
and specialty products that are used in combination for fluid replenishment,
nutrition therapy, pain management, antibiotic therapy and chemotherapy;
BioScience, which develops biopharmaceuticals, biosurgery products, vaccines
and blood collection, processing and storage products and technologies; and
Renal, which develops products and provides services to treat end-stage kidney
disease. Our three businesses enjoy leading positions in the medical products
and services fields. Unless otherwise indicated, each of the factors discussed
in this Part I do not materially differ in their impact across each of our
three segments.
Information about operating results is incorporated by reference from Annual
Report pages 27--36, section entitled "Management's Discussion and Analysis"
and pages 57--58, section entitled "Notes to Consolidated Financial
Statements--Segment Information."
Medication Delivery
Business Description. Baxter was founded in 1931 as the first commercial
manufacturer of intravenous (IV) solutions in glass bottles. Forty years later,
the company set a new standard for IV therapy with the
1
introduction of the first plastic IV containers. Today, Baxter manufactures a
range of products that deliver fluids, therapies and medications to patients.
IV solutions represent only 20 percent of Baxter's Medication Delivery sales,
while 80 percent of the revenue comes from specialty products that include
anesthetic agents, premixed drugs and drug-reconstitution systems, nutrition
products and delivery devices. These products are used in combination for fluid
replenishment, nutrition therapy, pain management, antibiotic therapy and
chemotherapy.
Growth Strategy. Baxter continues to participate in the consolidation of
the global marketplace for medication-delivery products, particularly in
developing markets. Baxter expects to accelerate growth through expansion of
its higher-margin specialty products outside the United States, building on its
strong base in IV solutions. The company continues to broaden its portfolio of
new products and technologies for medication delivery through internal
development, acquisitions and alliances. Baxter also leverages its strengths in
anesthesia, drug delivery and infusion systems to provide customers with
innovative solutions at all points of care. In 2001, Baxter's oncology business
was expanded with the acquisition of ASTA Medica Oncology, a German-based
manufacturer of chemotherapy drugs.
Product Development. Baxter is developing a next-generation volumetric
infusion system with enhanced features and continues to expand its line of
drug-delivery platforms. In 2001, Baxter acquired Cook Pharmaceutical
Solutions, adding the capability to formulate and package injectable drugs in
vials and syringes, and licensed RTP Pharma's proprietary Nanoedge technology
to develop injectable formulations of insoluble medications. Baxter signed 18
new agreements with pharmaceutical companies in 2001 to package their drugs in
Baxter's systems, and launched generic propofol, an injectable anesthetic, in
the United Kingdom. The company also has several nutraceuticals in the pipeline
and continues to pursue new film technologies for manufacturing IV containers
and sets without polyvinyl chloride.
BioScience
Business Description. Baxter introduced the first commercially produced
Factor VIII concentrate to treat hemophilia in 1966. Today, Baxter is a leading
producer of both plasma-based and recombinant clotting factors for hemophilia,
as well as biopharmaceuticals used to treat immune deficiencies, cancer and
other disorders. The business also develops biosurgery products, used for
hemostasis, tissue-sealing and tissue-regeneration, and vaccines. Baxter also
is a leading manufacturer of manual and automated blood-collection, processing
and storage systems, used by hospitals, blood banks and plasma-collection
centers to collect and process blood components for therapeutic use.
Therapeutic blood components are used in surgery, cancer therapy and other
critical therapies.
Growth Strategy. Baxter's strategy for increasing growth in its BioScience
business includes: expanding manufacturing capacity to meet current and future
demand, which today for most products far exceeds supply; penetrating new
markets outside North America and Europe, which currently account for more than
80 percent of sales; making acquisitions and forming other alliances and
partnerships to bring new and complementary technologies and product platforms
to Baxter; expanding the use of current products through additional indications
and establishing new standards of care; and introducing new products to
encompass additional therapies. In transfusion therapies, the focus remains on
increasing production and blood safety through advanced automation,
leukoreduction and pathogen inactivation.
Product Development. In 2001, Baxter received European licensure for
Ceprotin, a new protein C concentrate used to treat congenital protein C
deficiency. Recombinant proteins in development include a protein-free-method
recombinant Factor VIII, alpha-1-antitrypsin to treat emphysema and asthma, and
recombinant hemoglobin. Baxter also began clinical trials on a Factor VIII gene
therapy last year with its partner GenStar. In the area of vaccines, Baxter
received additional approvals for its NeisVac-C vaccine for meningitis C in
2001. The company also is developing cell-culture-derived vaccines for
influenza, smallpox and other diseases. Also in 2001, Baxter applied for FDA
approval on its ALYX automated blood component collection system and filed in
Europe for approval of the INTERCEPT Blood System for platelets.
2
Renal
Business Description. Baxter is a leading provider worldwide of products
and services for the treatment of kidney disease. In 1956, the company
pioneered hemodialysis (HD) with the introduction of the first widely available
artificial kidney machine. Nearly 20 years later, Baxter introduced products
and services for peritoneal dialysis (PD), a home-based therapy. Today, Baxter
is the world's leading manufacturer of PD products, which include dialysis
solutions, container systems and automated cyclers. Baxter also manufactures HD
instruments and dialyzers. In addition, the company owns and operates dialysis
clinics in partnership with local physicians outside the United States. In the
United States, Baxter works with payers to provide disease-management services
and with nephrologists to operate interventional outpatient centers.
Growth Strategy. Baxter is growing its presence in renal care by addressing
the needs of kidney-disease patients over their lifetime of care--from initial
diagnosis through dialysis and organ replacement. Baxter's "integrated care"
strategy looks at that spectrum of care and considers where it makes sense for
Baxter to participate. For example, in 2001, Baxter acquired the assets and
exclusive rights to a proprietary recombinant drug for the treatment of anemia.
The company also conducted a landmark clinical trial with evidence suggesting
broader applicability for PD therapy, which could yield a shift in practice
patterns that could expand use of PD over time. Other growth will come through
continued product innovation, e-health initiatives, additional acquisitions and
alliances, and further expansion in developing markets.
Product Development. Innovation remains key to Baxter's continued
leadership and growth in renal care, with several new product launches planned
in 2002. These include Baxter's first synthetic HD dialyzer, called Syntra, and
new HD instruments for self-care centers, the home and the acute-care setting.
Also in 2002, the company plans to introduce new and improved approaches to PD
that provide unique patient benefits. Baxter expects to receive approval from
the U.S. Food and Drug Administration for Extraneal PD solution. Baxter also
will be launching HomeChoice Pediatric, an updated automated PD machine
designed for patients who require lower volumes of fluid, particularly
children. The system offers new safety features and makes the dialysis process
even more convenient for pediatric patients and their parents.
United States Markets
The health care marketplace continues to be highly competitive. There has
been consolidation in the company's customer base, and by its competitors,
which has resulted in pricing and market share pressures. These industry trends
are expected to continue. The company intends to continue to manage these
issues by developing new products and services, leveraging its cost structure,
making acquisitions and entering alliances.
International Markets
Baxter generates close to 50 percent of its revenues outside the United
States. While health care cost containment continues to be a focus around the
world, demand for health care products and services continues to be strong
worldwide, particularly in developing markets. The company's strategies
emphasize global expansion and technological innovation to advance medical care
worldwide.
Joint Ventures and Affiliations
Baxter's joint venture with Gambro A.B., named Tandem Healthcare LLC,
manufactures dialyzers from a Baxter production facility in Mountain Home,
Arkansas. Baxter manages the day-to-day operations on behalf of the joint
venture. Gambro is an international medical technology and health care company
based in Sweden. The company conducts a non-material amount of business through
joint ventures.
In March 2000, Baxter teamed with other experienced companies in the health
care industry to form the Global Healthcare Exchange (GHX). GHX provides
business-to-business procurement for the health care
3
industry. Utilizing Internet-based technology, GHX integrates hospitals and
suppliers, in an attempt to improve efficiencies and add value throughout the
supply chain. GHX now is comprised of more than 100 supplier members and nearly
600 hospital members. In November 2001, GHX and HealthNexis combined their
operations into a single, comprehensive Internet-based exchange operating under
the Global Healthcare Exchange name.
Baxter also owns minority positions in certain other publicly-traded
companies, including Cerus Corporation, with which it is jointly developing a
pathogen inactivation system for platelets, plasma and red blood cells for
transfusion, and Acambis, a British vaccine developer with which Baxter is
producing smallpox vaccine for the U.S. government.
Methods of Distribution
Baxter conducts its selling efforts through its subsidiaries and divisions.
Many subsidiaries and divisions have their own sales forces and direct their
own sales efforts. In addition, sales are made to and through independent
distributors and drug wholesalers acting as sales agents. In the United States,
Allegiance Healthcare Corporation warehouses and ships a significant portion of
the company's products through its distribution centers. These distribution
centers are generally stocked with adequate inventories to facilitate prompt
customer service. Sales and distribution methods include frequent contact by
sales representatives, automated communications via various electronic
purchasing systems, circulation of catalogs and merchandising bulletins,
direct-mail campaigns, trade publications and advertising. Customers may return
defective merchandise for credit or replacement. In recent years, such returns
have been immaterial.
International sales are made and products are distributed in over 100
countries either on a direct basis or through independent local distributors.
International subsidiaries employ their own field sales forces in Argentina,
Australia, Austria, Belgium, Brazil, Canada, Chile, China, Colombia, the Czech
Republic, Denmark, Ecuador, Finland, France, Germany, Greece, Guatemala,
Hungary, India, Ireland, Italy, Japan, Korea, Mexico, The Netherlands, New
Zealand, Norway, Panama, Peru, the Philippines, Portugal, Russia, Singapore,
Spain, Sweden, Switzerland, Taiwan, Thailand, Turkey, the United Kingdom and
Venezuela. In other countries, sales are made through independent distributors
or sales agents.
Raw Materials
Raw materials essential to the company's business are purchased worldwide in
the ordinary course of business from numerous suppliers. Although the vast
majority of these materials are generally available, the company has
experienced occasional shortages in supply of source plasma and of bulk
recombinant factor VIII used by Baxter in its BioScience business. In addition,
certain raw materials used in producing some of the company's products are
available only from a small number of suppliers. Baxter works closely with its
suppliers to assure continuity of supply while maintaining high quality and
reliability. The company also continues to develop new sources of supply and
does not believe that periodic shortages in supply of raw materials will have a
material adverse effect on the company's business.
In some of these situations, the company has long-term supply contracts with
its suppliers, although it does not consider its obligations under such
contracts to be material. Baxter does not always recover cost increases through
customer pricing due to contractual limits and market pressure on such price
increases. See "Contractual Arrangements."
Patents and Trademarks
Products manufactured by Baxter are sold primarily under its own trademarks
and trade names. Some products purchased and resold by the company are sold
under the company's trade names while others are sold under trade names owned
by its suppliers.
4
Baxter owns a number of patents and trademarks throughout the world and is
licensed under patents owned by others. Baxter's policy is to protect its
products and technology through patents and trademarks on a worldwide basis.
This protection is sought in a manner that balances the cost of such protection
against obtaining the greatest value for the company. The company also
|
|
(Partial 10-K shown; subscribers can see the entire 10-K report.) |
|
Demo version. Subscribers have full viewing and printing access to our 6,000+ Annual Reports and 9,200+ 10-Ks. Click here for ordering information |
Buckmaster Annual Stockholder Reports
© Copyright 2010 Buckmaster Publishing. All rights reserved.
A collection of over 5,900 Annual Stockholder Reports dating back as far as 1995.
For information or to order a Buckmaster Annual Stockholder Reports subscription call 800-282-5628
E-mail: info@buck.com
*Fortune is a registered trademark of Time Inc.
Fortune 500 is a trademark of Fortune Magazine.