Item 2.02. Results of Operations and Financial Condition. On January 23, 2014 , Baxter International Inc. issued an earnings press release for the quarterly period ended December 31, 2013 . The press release, including attachments, is furnished as Exhibit 99.1 to this report. The press release furnished as Exhibit 99.1 contains financial measures that are not calculated in accordance with generally accepted accounting principles (GAAP). The non-GAAP financial measures include adjusted net income, adjusted earnings per diluted share and adjusted pre-tax income, each excluding special items. 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. Upfront and milestone payments related to collaborative arrangements that have been expensed as research and development (R&D) are uncertain and often result in a different payment and expense recognition pattern than internal R&D activities and therefore are typically excluded as special items. Beginning with the first quarter of 2014 the company intends to report adjusted earnings measures excluding intangible asset amortization expense. To facilitate comparisons to prior periods we have provided adjusted net income, adjusted earnings per share and adjusted pre-tax income excluding intangible asset amortization expense for each quarter in 2013 as well as for the year ended December 31, 2013 . Intangible asset amortization is excluded as a special item to facilitate an evaluation of current and past operating performance, particularly in terms of cash returns, and is similar to how management internally assesses performance. 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 press release also includes the non-GAAP financial measure of net debt, which represents the difference between total debt (defined as short-term debt, current maturities of long-term debt and lease obligations, and long-term debt and lease obligations) and cash and equivalents. Management uses net debt for internal planning purposes and to monitor compliance with the company's primary credit facilities as net debt corresponds with certain financial covenants contained therein. 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. Item 9.01. Financial Statements and Exhibits. (d) Exhibits. 99.1 Press Release dated January 23, 2014 . --------------------------------------------------------------------------------
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