BAXTER INTERNATIONAL INC (Form: 8-K, Received: 10/27/2015 06:32:30)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) October 26, 2015

Baxter International Inc.

(Exact name of registrant as specified in its charter)

Delaware

(State or other jurisdiction of incorporation)


1-4448		36-0781620
(Commission File Number)		(IRS Employer Identification No.)


One Baxter Parkway, Deerfield, Illinois		60015
(Address of principal executive offices)		(Zip Code)

(224) 948-2000

(Registrant’s telephone number, including area code)

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions ( see General Instruction A.2. below):

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01

Entry into a Material Definitive Agreement.

On October 26, 2015, Baxter International Inc. (“Baxter” or the “Company”) entered into Amendment No. 1 to its existing $1.5 billion, five-year revolving credit agreement, dated as of July 1, 2015, with JPMorgan Chase Bank, National Association, as Administrative Agent, and the various lenders thereto. Additionally, on the same date, Baxter Healthcare SA and Baxter World Trade SPRL entered into Amendment No. 1 to their existing €200 million, five-year revolving credit agreement, dated as of July 1, 2015, with J.P. Morgan Europe Limited, as Administrative Agent, and the various lenders thereto.

Each amendment amends the “Change of Control” definition in the applicable credit agreement to remove the “continuing director” prong (clause (b) in the U.S. dollar denominated facility and clause (c) in the Euro denominated facility) from such defined term.

The descriptions of the amendments, as set forth above, are qualified in their entirety by the complete text of the amendments which are attached to this report as Exhibit 10.1 (with respect to the amendment to the U.S. dollar denominated facility) and Exhibit 10.2 (with respect to the amendment to the Euro dollar denominated facility), and incorporated herein by reference.

Item 7.01

Regulation FD Disclosure.

On July 1, 2015, Baxter completed the previously announced distribution of 80.5% of the outstanding common stock of Baxalta Incorporated (“Baxalta”) to Baxter’s shareholders (the “Distribution”) in connection with the separation of its biopharmaceuticals business from its medical products business. As part of that separation, the biopharmaceuticals business was transferred to Baxalta. Baxter retained a 19.5% ownership stake in Baxalta immediately following the Distribution. Baxalta is now an independent public company trading under the symbol “BXLT” on the New York Stock Exchange.

The information furnished as Exhibit 99.1 contains financial measures that are not calculated in accordance with generally accepted accounting principles (“GAAP”). The non-GAAP financial information for 2014 and 2015 reflects the presentation of the Baxalta business as a discontinued operation and excludes special items relating to Baxter’s continuing business. Special items are excluded because they are highly variable, difficult to predict, and of a size that may substantially impact the Company’s reported operations for a period. Non-GAAP financial measures may provide a more complete understanding of the Company’s operations and can facilitate a fuller analysis of the Company’s results of operations, particularly in evaluating performance from one period to another. The Company’s adjusted financial measures, as reflected in Exhibit 99.1, exclude intangible asset amortization expense to facilitate an evaluation of current and past operating performance, particularly in terms of cash returns, and are similar to how management internally assesses performance.

The presentation of Baxter’s historical adjusted continuing operations is inherently limited in that it does not include, for all periods, income Baxter receives from Baxalta related to transition service agreements. Furthermore, certain expenses incurred to support Baxter and Baxalta’s shared operations are included, which are not necessarily representative of costs required to support Baxter’s stand-alone business.

Management believes that non-GAAP earnings measures, when used in conjunction with the results presented in accordance with GAAP and the reconciliations to corresponding GAAP financial measures, may enhance an investor’s overall understanding of the Company’s past financial performance and prospects for the future. Accordingly, management uses these non-GAAP measures internally in financial planning, to monitor business unit performance, and in some cases for purposes of determining incentive compensation.

The Company strongly encourages investors to review its consolidated financial statements and publicly filed reports in their entirety and cautions investors that the non-GAAP measures used by the Company may differ from similar measures used by other companies, even when similar terms are used to identify such measures.

The financial information is intended for informational purposes only and does not purport to project Baxter’s financial performance or cost structure for any future period. The financial information should be read in conjunction with the audited consolidated financial statements and accompanying notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in Baxter’s Form 10-K for the year ended December 31, 2014 and the unaudited condensed consolidated financial statements and accompanying notes and “Management’s Discuss and Analysis of Financial Condition and Results of Operations” included in Baxter’s Form 10-Q for the periods ended March 31, 2015 and June 30, 2015. Such reports, however, do not give effect to the separation, as described above, or the Distribution.

Item 9.01

Financial Statements and Exhibits.

(d)

Exhibits


Exhibit No.		Exhibit

10.1		Amendment No. 1 to the Five-Year Credit Agreement, dated as of October 26, 2015, among Baxter International Inc. as Borrower, JPMorgan Chase Bank, National Association, as Administrative Agent and certain other financial institutions named therein

10.2		Amendment No. 1 to the Credit Agreement, dated as of October 26, 2015, among Baxter Healthcare SA and Baxter World Trade SPRL, as Borrowers, J.P. Morgan Europe Limited, as Administrative Agent and certain other financial institutions named therein

99.1		Unaudited Non-GAAP Financial Information for Baxter International Inc.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


BAXTER INTERNATIONAL INC.

		/s/ David P. Scharf
By:		David P. Scharf
		Corporate Vice President, General Counsel and Corporate Secretary

Date: October 27, 2015

Exhibit Index


Exhibit No.		Exhibit

10.1		Amendment No. 1 to the Five-Year Credit Agreement, dated as of October 26, 2015, among Baxter International Inc. as Borrower, JPMorgan Chase Bank, National Association, as Administrative Agent and certain other financial institutions named therein

10.2		Amendment No. 1 to the Credit Agreement, dated as of October 26, 2015, among Baxter Healthcare SA and Baxter World Trade SPRL, as Borrowers, J.P. Morgan Europe Limited, as Administrative Agent and certain other financial institutions named therein

99.1		Unaudited Non-GAAP Financial Information for Baxter International Inc.

Exhibit 10.1

Execution Version

AMENDMENT NO. 1 TO CREDIT AGREEMENT

This AMENDMENT NO. 1 TO CREDIT AGREEMENT (this “ Amendment ”) is made as of October 26, 2015 among Baxter International Inc., a Delaware corporation (the “ Borrower ”), JPMorgan Chase Bank, National Association, as administrative agent under the hereinafter defined Credit Agreement (the “ Administrative Agent ”), and the other financial institutions signatory hereto.

R E C I T A L S :

A. The Borrower, the Administrative Agent and certain financial institutions are parties to a Five-Year Credit Agreement dated as of July 1, 2015 (the “ Credit Agreement ”).

B. The Borrower, the Administrative Agent and the undersigned Banks wish to amend the Credit Agreement on the terms and conditions set forth below.

Now, therefore, in consideration of the mutual execution hereof and other good and valuable consideration, the parties hereto agree as follows:

1. Definitions . Unless otherwise specified herein, all capitalized terms used herein shall have the meanings specified in the Credit Agreement.

2. Amendment to Credit Agreement . Upon the Effective Time (as defined below), the definition of “Change of Control” in Section 1.01 of the Credit Agreement is amended in its entirety to read as follows:

“ Change of Control ” means the acquisition of ownership, directly or indirectly, beneficially or of record, by any Person or group (within the meaning of the Exchange Act and the rules of the SEC thereunder as in effect on the date hereof) of fifty percent (50%) or more of the aggregate ordinary voting power represented by the issued and outstanding Equity Interests of the Borrower.

3. Representations and Warranties of the Borrower . The Borrower represents and warrants that:

(a) the execution, delivery and performance by the Borrower of this Amendment have been duly authorized by all necessary corporate action and that this Amendment is a legal, valid and binding obligation of the Borrower enforceable against the Borrower in accordance with its terms, except as the enforcement thereof may be subject to the effect of any applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally; and

(b) no Event of Default or Unmatured Event of Default has occurred and is continuing.

4. Effective Time . This Amendment shall become effective on the date (the “ Effective Time ”) upon the execution and delivery hereof by the Borrower, the Administrative Agent and the Majority Banks.

5. Miscellaneous .

(a) Except as specifically amended hereby, the Credit Agreement, the Notes and the other agreements, instruments and documents executed in connection therewith (collectively, the “ Loan Documents ”) shall remain in full force and effect and are hereby ratified and confirmed.

(b) The execution, delivery and effectiveness of this Amendment shall not operate as a waiver of any right, power or remedy of the Administrative Agent or any Bank under the Credit Agreement or any other Loan Document, or constitute a waiver of any provision of the Credit Agreement or any other Loan Document. Upon the effectiveness of this Amendment, each reference in the Credit Agreement to “this Agreement”, “hereunder”, “hereof”, “herein” or words of similar import shall mean and be a reference to the Credit Agreement as amended hereby.

(c) Section headings in this Amendment are included herein for convenience of reference only and shall not constitute a part of this Amendment for any other purposes.

(d) This Amendment may be executed in any number of counterparts, each of which when so executed shall be deemed an original but all such counterparts shall constitute one and the same instrument. Delivery of an executed signature page of this Amendment by facsimile transmission or other electronic transmission shall be effective as delivery of a manually executed counterpart hereof.

6. Costs and Expenses . The Borrower hereby affirms its obligation under Section 11.04 of the Credit Agreement to reimburse the Administrative Agent for all reasonable and documented out-of-pocket expenses incurred by the Administrative Agent in connection with the preparation, negotiation, execution and delivery of this Amendment, including but not limited to the reasonable and documented fees, charges and disbursements of attorneys for the Administrative Agent with respect thereto.

7. Governing Law . This Amendment shall be governed by, and construed in accordance with, the laws of the State of New York.

[signature pages follow]

IN WITNESS WHEREOF, the parties have executed this Amendment as of the date and year first above written.


BAXTER INTERNATIONAL INC.

By:		/s/ David P. Scharf
Name:		David P. Scharf
Title:		Corporate Vice President and General Counsel