v3.22.4
NET SALES
 12 Months Ended
Dec. 31, 2022
Revenue from Contract with Customer [Abstract]  
NET SALES
NET SALES
Contract Balances
The timing of revenue recognition, billings and cash collections results in the recognition of trade accounts receivable, unbilled receivables, contract assets, and customer advances and deposits (contract liabilities) on our consolidated balance sheets. Net trade accounts receivable was $2.4 billion as of December 31, 2022 and 2021.
For contract manufacturing arrangements, revenue is primarily recognized throughout the production cycle, which typically lasts up to 90 days, resulting in the recognition of contract assets until the related services are completed and the customers are billed. Additionally, for certain arrangements containing a performance obligation to deliver software that can be used with medical devices, we recognize revenue upon delivery of the software, which results in the recognition of contract assets when customers are billed over time, generally over one to five years. For bundled contracts involving equipment delivered up-front and consumable medical products to be delivered over time, total contract revenue is allocated between the equipment and consumable medical products. In certain of those arrangements, a contract asset is created for the difference between the amount of equipment revenue recognized upon delivery and the amount of consideration initially receivable from the customer. In those arrangements, the contract asset becomes a trade account receivable as consumable medical products are provided and billed, generally over one to seven years.
The following table summarizes our contract assets:
as of December 31 (in millions)20222021
Contract manufacturing services$51 $50 
Software sales43 45 
Bundled equipment and consumable medical products contracts121 100 
Contract assets$215 $195 
The following table summarizes the classification of contract assets and contract liabilities as reported in the consolidated balance sheet:
as of December 31 (in millions)20222021
Prepaid expenses and other current assets$93 $84 
Other non-current assets122 111 
Contract assets$215 $195 
Accrued expenses and other current liabilities$164 $162 
Other non-current liabilities80 84 
Contract liabilities$244 $246 
Contract liabilities represent deferred revenues that arise as a result of cash received from customers or where the timing of billing for services precedes satisfaction of our performance obligations. Such remaining performance obligations represent the portion of the contract price for which work has not been performed and are primarily related to our installation and service contracts. We expect to satisfy the majority of the remaining performance
obligations and recognize revenue related to installation and service contracts within the next 12 months with most of the non-current performance obligations satisfied within 24 months.
The following table summarizes contract liability activity for the year ended December 31, 2022. The contract liability balance represents the transaction price allocated to the remaining performance obligations.
year ended December 31 (in millions)2022
Balance at beginning of period$246 
New revenue deferrals666 
Revenue recognized upon satisfaction of performance obligations(662)
Currency translation(6)
Balance at end of period$244 
In 2022 and 2021, $121 million and $20 million of revenue was recognized that was included in contract liabilities as of December 31, 2021 and 2020, respectively. In 2020, the amount of revenue recognized that was included in contract liabilities as of December 31, 2019 was not significant.
Disaggregation of Net Sales
In connection with our acquisition of Hillrom in December 2021, we have added three new product categories: Patient Support Systems, Front Line Care and Surgical Solutions.
The following tables disaggregate our net sales from contracts with customers by product category between the U.S. and international:
202220212020
years ended December 31 (in millions)U.S.InternationalTotalU.S.InternationalTotalU.S.InternationalTotal
Renal Care1
$945 $2,803 $3,748 $890 $3,010 $3,900 $848 $2,909 $3,757 
Medication Delivery2
1,889 997 2,886 1,859 1,021 2,880 1,738 953 2,691 
Pharmaceuticals3
682 1,444 2,126 753 1,538 2,291 849 1,249 2,098 
Clinical Nutrition4
352 579 931 343 621 964 330 580 910 
Advanced Surgery5
574 424 998 545 432 977 516 370 886 
Acute Therapies6
241 460 701 287 495 782 286 454 740 
BioPharma Solutions7
305 339 644 273 396 669 234 252 486 
Patient Support Systems8
1,150 337 1,487 86 29 115 — — — 
Front Line Care9
840 308 1,148 51 19 70 — — — 
Surgical Solutions10
145 159 304 12 15 27 — — — 
Other11
100 40 140 81 28 109 77 28 105 
Total Baxter$7,223 $7,890 $15,113 $5,180 $7,604 $12,784 $4,878 $6,795 $11,673 
1    Renal Care includes sales of our peritoneal dialysis (PD), hemodialysis (HD) and additional dialysis therapies and services.
2    Medication Delivery includes sales of our IV therapies, infusion pumps, administration sets and drug reconstitution devices.
3    Pharmaceuticals includes sales of our premixed and oncology drug platforms, inhaled anesthesia and critical care products and pharmacy compounding services.
4    Clinical Nutrition includes sales of our parenteral nutrition (PN) therapies and related products.
5    Advanced Surgery includes sales of our biological products and medical devices used in surgical procedures for hemostasis, tissue sealing and adhesion prevention.
6    Acute Therapies includes sales of our continuous renal replacement therapies (CRRT) and other organ support therapies focused in the intensive care unit (ICU).
7    BioPharma Solutions includes sales of contracted services we provide to various pharmaceutical and biopharmaceutical companies.
8    Patient Support Systems includes sales of our connected care solutions: devices, software, communications and integration technologies and smart beds.
9    Front Line Care includes sales of our integrated patient monitoring and diagnostic technologies to help diagnose, treat and manage a wide variety of illness and diseases, including respiratory therapy, cardiology, vision screening and physical assessment.
10    Surgical Solutions includes sales of our surgical video technologies, tables, lights, pendants, precision positioning devices and other accessories.
11    Other includes sales of miscellaneous product and service offerings.