DEERFIELD, Ill., Nov. 16 /PRNewswire-FirstCall/ -- Baxter International Inc. announced today that it has improved the funded status of its U.S. pension plans with a contribution of approximately $400 million, and is retiring approximately $1.5 billion in debt. Baxter used proceeds from its $2 billion repatriation of foreign earnings under the American Jobs Creation Act of 2004 for these purposes.
The $400 million pension contribution is in addition to a $100 million contribution Baxter made earlier this year. The company’s U.S. pension plan is now more than 90 percent funded on a projected benefit obligation basis under Generally Accepted Accounting Principles, putting Baxter’s funded position significantly in excess of minimum ERISA requirements.
The company also is using proceeds from the repatriation of foreign earnings to retire $1 billion of 3.6% senior notes associated with the company’s 2002 equity unit offering and is in the process of redeeming $500 million of 5.25% notes currently due in 2007.
“As a result of our improved operating cash flow over the past year, we have considerably improved our financial flexibility,” said John Greisch, chief financial officer. “Since June 2004, we have reduced our debt and net investment hedge liability by approximately $1.5 billion and contributed more than $500 million to our pension funds. Our strong focus on improving cash flow over the past year has enabled us to significantly improve our financial condition.”
Baxter International Inc., through its subsidiaries, assists healthcare professionals and their patients with the treatment of complex medical conditions, including cancer, hemophilia, immune disorders, kidney disease and trauma. The company applies its expertise in medical devices, pharmaceuticals and biotechnology to make a meaningful difference in patients’ lives. This release includes forward-looking statements concerning the repatriation and pension contributions. The statements are based on assumptions about many important factors, including the following, which could cause actual results to differ materially from those in the forward-looking statements: timely completion of remaining steps in the company’s repatriation plans; the availability of funds and alternative uses for funds, including needs arising as a result of unanticipated changes in the company’s operations and operating performance, contingent payment needs arising in connection with litigation, or as the result of other risks identified in the company’s most recent filing on Form 10-Q and other SEC filings, all of which are available on the company’s web site. The company does not undertake to update its forward- looking statements.
Baxter International Inc.
CONTACT: Media, Tom Kline, +1-847-948-2251, or Cindy Resman,+1-847-948-2815, or Investors, Mary Kay Ladone, +1-847-948-3371, or ClareSullivan, +1-847-948-3085, all of Baxter International Inc.
Web site: http://www.baxter.com/
