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| EARNINGS (LOSS) PER SHARE |
The numerator for both basic and diluted earnings (loss) per share (EPS) is net income (loss) attributable to Baxter stockholders. The denominator for basic EPS is the weighted-average number of shares outstanding during the period. The dilutive effect of outstanding stock options, RSUs and PSUs is reflected in the denominator for diluted EPS using the treasury stock method.
The following table is a reconciliation of net income (loss) attributable to Baxter stockholders.
| | | | | | | | | | | |
| years ended December 31(in millions) | 2025 | 2024 | 2023 |
| Income (loss) from continuing operations | $ | (900) | | $ | (326) | | $ | 181 | |
| Less: Net income attributable to noncontrolling interests included in continuing operations | — | | — | | — | |
| Income (loss) from continuing operations attributable to Baxter stockholders | (900) | | (326) | | 181 | |
| Income (loss) from discontinued operations | (57) | | (312) | | 2,482 | |
| Less: Net income attributable to noncontrolling interests included in discontinued operations | — | | 11 | | 7 | |
| Income (loss) from discontinued operations attributable to Baxter stockholders | (57) | | (323) | | 2,475 | |
| Net income (loss) attributable to Baxter stockholders | $ | (957) | | $ | (649) | | $ | 2,656 | |
The following table is a reconciliation of basic shares to diluted shares. | | | | | | | | | | | |
| years ended December 31(in millions) | 2025 | 2024 | 2023 |
| Basic shares | 513 | | 510 | | 506 | |
| Effect of dilutive securities | — | | — | | 2 | |
| Diluted shares | 513 | | 510 | | 508 | |
Basic and diluted shares are the same for the years ended December 31, 2025 and 2024 due to our loss from continuing operations attributable to Baxter stockholders. The effect of dilutive securities includes unexercised stock options, unvested RSUs and contingently issuable shares related to granted PSUs. The computation of diluted EPS excludes 22 million, 25 million, and 19 million equity awards in 2025, 2024 and 2023, respectively, because their inclusion would have had an anti-dilutive effect on diluted EPS. Refer to Note 8 for additional information regarding items impacting basic shares.
About Earnings Per Share Disclosures
The earnings per share disclosure breaks down the calculation from net income to both basic and diluted EPS, revealing the full impact of a company's capital structure on per-share economics. The reconciliation between basic and diluted share counts exposes how many stock options, RSUs, convertible securities, and warrants are potentially dilutive to existing shareholders.
Key signals: a widening gap between basic and diluted shares indicates growing dilution from equity compensation or convertible instruments. Anti-dilutive securities excluded from the diluted calculation deserve attention — they represent latent dilution that will materialize if the stock price rises. Watch for the effect of share buybacks on per-share metrics: EPS growth driven primarily by repurchases rather than income growth signals weakening fundamentals. Compare year-over-year changes in the diluted share count against equity compensation expense to assess whether management is effectively managing dilution.