Baxter International (BAX) 8-K Baxter’s Second Quarter Financial Results Exceed Guidance; Company Raises Full-year Financial Outlook

Baxter International Inc.
One Baxter Parkway
Deerfield, Ill., 60015

FOR IMMEDIATE RELEASE

Media Contact:
Deborah Spak, (847) 948-2349

Investor Contacts:
Mary Kay Ladone, (847) 948-3371
Clare Trachtman, (847) 948-3085

BAXTER’S SECOND QUARTER FINANCIAL RESULTS EXCEED GUIDANCE;
COMPANY RAISES FULL-YEAR FINANCIAL OUTLOOK

Baxter Reports Double-Digit Growth in Q2 Sales and Earnings

     DEERFIELD, Ill., July 21, 2011 — Baxter International Inc. (NYSE:BAX) today announced strong financial results for the second quarter of 2011, and raised its financial outlook for full-year 2011.

     Baxter reported net income of $615 million in the second quarter, an increase of 15 percent compared to $535 million reported in the same period last year. Earnings per diluted share of $1.07 advanced 19 percent from $0.90 per diluted share in the prior-year period, and exceeded the company’s previously issued earnings guidance of $1.01 to $1.03 per diluted share. This performance reflects double-digit sales growth, operational leverage, favorable foreign exchange and the benefit from the company’s ongoing share repurchase program.

     On an adjusted basis, excluding a special item in the second quarter of 2010, Baxter’s net income and earnings per diluted share increased 10 percent

- more -

BAXTER REPORTS 2nd QUARTER FINANCIAL RESULTS — Page 2

and 15 percent, respectively, from $557 million and $0.93 per diluted share recorded in the prior-year period.

     Worldwide sales totaled $3.5 billion and increased 11 percent compared to sales of $3.2 billion in the second quarter of 2010. Excluding the impact of foreign currency, worldwide sales increased 6 percent. Sales within the United States grew 5 percent to $1.4 billion, while international sales of $2.1 billion accelerated 15 percent (or 7 percent excluding the impact of foreign currency).

     BioScience revenues totaled $1.6 billion, representing a 14 percent increase from $1.4 billion in the comparable prior-year period. Excluding the impact of foreign currency, BioScience sales advanced 10 percent boosted by strong demand for GAMMAGARD LIQUID [Immune Globulin Intravenous (Human)] (marketed as KIOVIG outside of the United States), certain specialty plasma-based therapeutics, and vaccines.

     Medical Products sales increased 8 percent to $2.0 billion from $1.8 billion reported last year. Excluding the impact of foreign currency, Medical Products sales increased 3 percent. As previously disclosed, the company completed the divestiture of its U.S. multi-source generic injectables business to Hikma Pharmaceuticals PLC during the quarter. Excluding generic injectables sales from both years, Medical Products revenues increased 10 percent (or 5 percent excluding the impact of foreign currency), reflecting strong growth of anesthesia products, nutritional therapies, infusion systems and other injectable drugs.

     “We remain encouraged with the continued improvement in our financial performance and progress with the initiatives we have implemented to enhance our commercial, operational, and scientific effectiveness,” said Robert L.

- more -

BAXTER REPORTS 2nd QUARTER FINANCIAL RESULTS — Page 3

Parkinson, Jr., chairman and chief executive officer. “These initiatives, combined with Baxter’s global presence, diversified portfolio, and focus on innovation, provide unique opportunities for future growth in an evolving and challenging macro-environment.”

Six-Month Results

     For the first six months of 2011, Baxter reported net income of $1.2 billion or $2.05 per diluted share, compared to net income of $472 million or $0.78 per diluted share in the same period last year. On an adjusted basis, excluding special items in the first half of 2010, Baxter’s net income for the six-month period increased 6 percent from $1.1 billion in the prior year, and earnings per diluted share increased 10 percent from $1.86 per diluted share reported in the first half of last year.

     Baxter’s worldwide sales totaled $6.8 billion and increased 11 percent (or 9 percent excluding the impact of foreign currency) compared to sales of $6.1 billion in the same period of 2010. Sales in 2010 included a revenue adjustment associated with the COLLEAGUE infusion pump of $213 million. Excluding this revenue adjustment, Baxter’s worldwide sales increased 8 percent over the prior six-month period (or 5 percent excluding the impact of foreign currency).

     During the first six months of this year, Baxter returned approximately $1.5 billion to shareholders through both dividends and share repurchases. The company paid dividends totaling $358 million and repurchased 21 million shares of Baxter common stock for $1.1 billion.

- more -

BAXTER REPORTS 2nd QUARTER FINANCIAL RESULTS — Page 4

Recent Highlights

     Baxter continued to enhance its portfolio and new product pipeline through investments in research and development, augmented by new business development initiatives. Recent achievements include the following:

• Acquisition of privately-held Prism Pharmaceuticals, Inc., a specialty pharmaceutical company, and the subsequent launch of NEXTERONE^® (amiodarone HCl) Premixed Injection in the United States. This is the first and only ready-to-use premixed formulation of the antiarrhythmic agent amiodarone, which is immediately available for use and reduces the risk of medication errors associated with compounding.

• Divestiture of the company’s U.S. generic injectables business to Hikma Pharmaceuticals PLC. The sale of this business, which was completed in early May, allows Baxter to redirect resources toward its proprietary, enhanced packaging offerings and formulation technologies, consistent with the company’s focus on product differentiation.

• Submission of a Biological License Application to the U.S. Food and Drug Administration for HyQ, a subcutaneous immune globulin therapy facilitated by recombinant human hyaluronidase for use in patients with primary immunodeficiency. The company also announced top-line results of a phase III study of HyQ, which confirmed the interim results presented in late 2010.

• Positive opinion from the Committee for Medicinal Products for Human Use of the European Medicines Agency for extension of the therapeutic indications of KIOVIG (marketed as GAMMAGARD LIQUID™ [Immune Globulin Intravenous (Human)] in the United States) to include multifocal motor neuropathy (MMN), a chronic condition characterized by progressive limb weakness. Upon adoption by the European Commission, Baxter will receive marketing authorization in all European Union Member States — representing the first centrally-licensed indication for an immunoglobulin preparation for MMN.

• Publication of Phase II data inCirculation Researchdemonstrating that injections of a patient’s own CD34+ adult stem cells into targeted sites in the heart have therapeutic benefits for patients with chronic myocardial ischemia (CMI). Benefits included reduction in frequency of angina episodes and improved exercise tolerance. More than 850,000 patients in the United States experience refractory angina associated with CMI and have not responded to other therapeutic options.

- more -

BAXTER REPORTS 2nd QUARTER FINANCIAL RESULTS — Page 5

• Award of the “Best in KLAS” distinction for the SIGMA Spectrum Infusion System by an independent research firm in its annual customer satisfaction report “2011 Top 20 Best in KLAS Awards: Medical Equipment & Infrastructure.” The SIGMA Spectrum Infusion System scored the highest in overall performance, reliability and delivery of technology, and builds upon previous recognition of the highest perception ratings for Cost/Value and Ease of Use in an initial KLAS report released in the first quarter of 2011.

Outlook for Third Quarter and Full-Year 2011

     Baxter also announced today its guidance for the third quarter of 2011 and raised its financial outlook for the full year.

     For full-year 2011, Baxter now expects earnings, before special items, of $4.27 to $4.32 per diluted share versus previous guidance of $4.20 to $4.28 per diluted share. Baxter continues to expect to achieve sales growth of 3 to 4 percent, excluding special items and the impact of foreign currency (or 5 to 6 percent including the benefit of foreign currency). In addition, the company expects to generate cash flows from operations of approximately $2.8 billion.

     For the third quarter of 2011, the company expects sales growth, excluding the impact of foreign currency, of 3 to 4 percent (or 6 to 7 percent including the benefit of foreign currency) and earnings per diluted share of $1.07 to $1.09, before any special items.

     A webcast of Baxter’s second quarter conference call for investors can be accessed live from a link on the company’s website at www.baxter.com beginning at 7:30 a.m. CDT on July 21, 2011. Please visit Baxter’s website for more information regarding this and future investor events and webcasts.

     Baxter International Inc., through its subsidiaries, develops, manufactures and markets products that save and sustain the lives of people with hemophilia,

- more -

BAXTER REPORTS 2nd QUARTER FINANCIAL RESULTS — Page 6

immune disorders, infectious diseases, kidney disease, trauma, and other chronic and acute medical conditions. As a global, diversified healthcare company, Baxter applies a unique combination of expertise in medical devices, pharmaceuticals and biotechnology to create products that advance patient care worldwide.

This release includes forward-looking statements concerning the company’s financial results, outlook for 2011 and R&D pipeline. 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: demand for and market acceptance risks for new and existing products, such as ADVATE, and other technologies; future actions of regulatory bodies and other governmental authorities, including with respect to the company’s implementation of the COLLEAGUE recall, that could delay, limit or suspend product development, manufacturing or sales or result in sanctions; product quality or patient safety concerns leading to product recalls, withdrawals, launch delays, litigation, or declining sales; Sigma’s ability to build production capacity to meet customer demand; future actions of governmental authorities and other third parties as U.S. healthcare reform legislation and other austerity measures are implemented; additional legislation, regulation and other governmental pressures, which may affect pricing, reimbursement and rebate policies of government agencies and private payers or other elements of the company’s business; product development risks; inventory reductions or fluctuations in buying patterns by wholesalers or distributors; the impact of geographic and product mix on the company’s sales; the impact of competitive products and pricing, including generic competition, drug reimportation and disruptive technologies; the availability of acceptable raw materials and component supply; fluctuations in supply and demand and the pricing of plasma-based therapies; the ability to enforce company patents; patents of third parties preventing or restricting the company’s manufacture, sale or use of affected products or technology; any impact of the current economic conditions on Baxter and its customers; foreign currency fluctuations and other risks identified in the company’s most recent filing on Form 10-K and other Securities and Exchange Commission filings, all of which are available on the company’s website. The company does not undertake to update its forward-looking statements. Financial schedules are attached to this release and available on the company’s website.

# # #

BAXTER — PAGE 7

BAXTER INTERNATIONAL INC.
Consolidated Statements of Income
Three Months Ended June 30, 2011 and 2010
(unaudited)
(in millions, except per share and percentage data)

	Three Months Ended
	June 30,
	2011		2010			Change
NET SALES	$	3,536	$	3,194			11%
COST OF SALES		1,701		1,556			9%
GROSS MARGIN		1,835		1,638			12%
% of Net Sales		51.9%		51.3%		0.6 pts
MARKETING AND ADMINISTRATIVE EXPENSES		765		721	A		6%
% of Net Sales		21.6%		22.6%		(1.0 pt)
RESEARCH AND DEVELOPMENT EXPENSES		239		219			9%
% of Net Sales		6.8%		6.9%		(0.1 pt)
NET INTEREST EXPENSE		15		25		(40%)
OTHER EXPENSE, NET		13		3			N/M
PRE-TAX INCOME		803		670			20%
INCOME TAX EXPENSE		174		133			31%
% of Pre-Tax Income		21.7%		19.9%		1.8 pts
NET INCOME		629		537			17%
LESS: NONCONTROLLING INTERESTS		14		2			N/M
NET INCOME ATTRIBUTABLE TO BAXTER	$	615	$	535			15%
BASIC EPS	$	1.08	$	0.90			20%
DILUTED EPS	$	1.07	$	0.90			19%
WEIGHTED-AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
Basic		570		593
Diluted		575		596
ADJUSTED PRE-TAX INCOME (excluding specified item)	$	803	$	698	B		15%
ADJUSTED NET INCOME ATTRIBUTABLE TO BAXTER (excluding specified item)	$	615	$	557	B		10%
ADJUSTED DILUTED EPS (excluding specified item)	$	1.07	$	0.93	B		15%

A	Marketing and administrative expenses in 2010 included a charge of $28 million ($22 million, or $0.03 per diluted share, on an after-tax basis) to write down accounts receivable in Greece, principally as a result of the anticipated settlement of certain accounts receivable with the Greek government.
B	Refer to page 8 for a description of the adjustment and a reconciliation to generally accepted accounting principles (GAAP) measures.

BAXTER — PAGE 8

BAXTER INTERNATIONAL INC.
Note to Consolidated Statements of Income
Three Months Ended June 30, 2011 and 2010
Description of Adjustment and Reconciliation of GAAP to Non-GAAP Measures
(unaudited)
(in millions, except per share and percentage data)

The company’s GAAP results for the three months ended June 30, 2010 included a specified item which impacted the GAAP results as follows:

	Three Months Ended June 30,										��
	2011			2010
						Greece			Excluding
						receivable			specified
	GAAP		1	GAAP		charge		2	item		Change		3
NET SALES	$	3,536		$	3,194	$	—		$	3,194		11%
COST OF SALES		1,701			1,556		—			1,556		9%
GROSS MARGIN		1,835			1,638		—			1,638		12%
% of Net Sales		51.9%			51.3%					51.3%	0.6 pts
MARKETING AND ADMINISTRATIVE EXPENSES		765			721		(28	)		693		10%
% of Net Sales		21.6%			22.6%					21.7%	(0.1 pt)
RESEARCH AND DEVELOPMENT EXPENSES		239			219		—			219		9%
% of Net Sales		6.8%			6.9%					6.9%	(0.1 pt)
NET INTEREST EXPENSE		15			25		—			25	(40%)
OTHER EXPENSE, NET		13			3		—			3		N/M
PRE-TAX INCOME		803			670		28			698		15%
INCOME TAX EXPENSE		174			133		6			139		25%
% of Pre-Tax Income		21.7%			19.9%					19.9%	1.8 pts
NET INCOME		629			537		22			559		13%
LESS: NONCONTROLLING INTERESTS		14			2		—			2		N/M
NET INCOME ATTRIBUTABLE TO BAXTER	$	615		$	535	$	22		$	557		10%
BASIC EPS	$	1.08		$	0.90	$	0.04		$	0.94		15%
DILUTED EPS	$	1.07		$	0.90	$	0.03		$	0.93		15%
WEIGHTED-AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
Basic		570			593					593
Diluted		575			596					596

1	There were no specified items included in the 2011 GAAP results.
2	Marketing and administrative expenses in 2010 included a charge of $28 million ($22 million, or $0.03 per diluted share, on an after-tax basis) to write down accounts receivable in Greece, principally as a result of the anticipated settlement of certain accounts receivable with the Greek government.
3	Represents the percentage change between the 2011 GAAP results and the 2010 results excluding the specified item.

For more information on the company’s use of non-GAAP financial measures in this press release, please see the company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on the date of this press release.

BAXTER — PAGE 9

BAXTER INTERNATIONAL INC.
Consolidated Statements of Income
Six Months Ended June 30, 2011 and 2010
(unaudited)
(in millions, except per share and percentage data)

	Six Months Ended
	June 30,
	2011		2010			Change
NET SALES	$	6,820	$	6,121	A		11%
COST OF SALES		3,310		3,440	A		(4%	)
GROSS MARGIN		3,510		2,681			31%
% of Net Sales		51.5%		43.8%		7.7 pts
MARKETING AND ADMINISTRATIVE EXPENSES		1,481		1,404	B		5%
% of Net Sales		21.7%		22.9%		(1.2 pts		)
RESEARCH AND DEVELOPMENT EXPENSES		453		446			2%
% of Net Sales		6.6%		7.3%		(0.7 pts		)
NET INTEREST EXPENSE		25		44			(43%	)
OTHER EXPENSE, NET		17		5			N/M
PRE-TAX INCOME		1,534		782			96%
INCOME TAX EXPENSE		328		305	C		8%
% of Pre-Tax Income		21.4%		39.0%		(17.6 pts		)
NET INCOME		1,206		477			153%
LESS: NONCONTROLLING INTERESTS		21		5			N/M
NET INCOME ATTRIBUTABLE TO BAXTER	$	1,185	$	472			151%
BASIC EPS	$	2.07	$	0.79			162%
DILUTED EPS	$	2.05	$	0.78			163%
WEIGHTED-AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
Basic		573		597
Diluted		578		602
ADJUSTED PRE-TAX INCOME (excluding specified items)	$	1,534	$	1,398	D		10%
ADJUSTED NET INCOME ATTRIBUTABLE TO BAXTER (excluding specified items)	$	1,185	$	1,121	D		6%
ADJUSTED DILUTED EPS (excluding specified items)	$	2.05	$	1.86	D		10%

A	Net sales and cost of sales in the first quarter of 2010 included a charge totaling $588 million, or $0.98 per diluted share, which related to the recall of COLLEAGUE infusion pumps from the U.S. market and other actions the company is undertaking outside of the United States, for which there was no net tax benefit recognized.
B	Marketing and administrative expenses in the second quarter of 2010 included a charge of $28 million ($22 million, or $0.03 per diluted share, on an after-tax basis) to write down accounts receivable in Greece, principally as a result of the anticipated settlement of certain accounts receivable with the Greek government.
C	Income tax expense in the first quarter of 2010 included a charge of $39 million, or $0.07 per diluted share, to write off a deferred tax asset as a result of a change in the tax treatment of reimbursements under the Medicare Part D retiree prescription drug subsidy program.
D	Refer to page 10 for a description of the adjustments and a reconciliation to GAAP measures.

BAXTER — PAGE 10

BAXTER INTERNATIONAL INC.
Note to Consolidated Statements of Income
Six Months Ended June 30, 2011 and 2010
Description of Adjustments and Reconciliation of GAAP to Non-GAAP Measures
(unaudited)
(in millions, except per share and percentage data)

The company’s GAAP results for the six months ended June 30, 2010 included specified items which impacted the GAAP results as follows:

	Six Months Ended June 30,
	2011			2010
						Total			Excluding
						specified			specified
	GAAP		1	GAAP		items		2	items		Change		3
NET SALES	$	6,820		$	6,121	$	213		$	6,334		8%
COST OF SALES		3,310			3,440		(375	)		3,065		8%
GROSS MARGIN		3,510			2,681		588			3,269		7%
% of Net Sales		51.5%			43.8%					51.6%	(0.1 pt)
MARKETING AND ADMINISTRATIVE EXPENSES		1,481			1,404		(28	)		1,376		8%
% of Net Sales		21.7%			22.9%					21.7%	0 pts
RESEARCH AND DEVELOPMENT EXPENSES		453			446		—			446		2%
% of Net Sales		6.6%			7.3%					7.0%	(0.4 pts)
NET INTEREST EXPENSE		25			44		—			44		(43%	)
OTHER EXPENSE, NET		17			5		—			5		N/M
PRE-TAX INCOME		1,534			782		616			1,398		10%
INCOME TAX EXPENSE		328			305		(33	)		272		21%
% of Pre-Tax Income		21.4%			39.0%					19.5%	1.9 pts
NET INCOME		1,206			477		649			1,126		7%
LESS: NONCONTROLLING INTERESTS		21			5		—			5		N/M
NET INCOME ATTRIBUTABLE TO BAXTER	$	1,185		$	472	$	649		$	1,121		6%
BASIC EPS	$	2.07		$	0.79	$	1.09		$	1.88		10%
DILUTED EPS	$	2.05		$	0.78	$	1.08		$	1.86		10%
WEIGHTED-AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
Basic		573			597					597
Diluted		578			602					602

1	There were no specified items included in the 2011 GAAP results.
2	Net sales and cost of sales in the first quarter of 2010 included a charge totaling $588 million, or $0.98 per diluted share, which related to the recall of COLLEAGUE infusion pumps from the U.S. market and other actions the company is undertaking outside of the United States, for which there was no net tax benefit recognized. Marketing and administrative expenses in the second quarter of 2010 included a charge of $28 million ($22 million, or $0.03 per diluted share, on an after-tax basis) to write down accounts receivable in Greece, principally as a result of the anticipated settlement of certain accounts receivable with the Greek government. Income tax expense in the first quarter of 2010 included a charge of $39 million, or $0.07 per diluted share, to write off a deferred tax asset as a result of a change in the tax treatment of reimbursements under the Medicare Part D retiree prescription drug subsidy program.
3	Represents the percentage change between the 2011 GAAP results and the 2010 results excluding specified items.

For more information on the company’s use of non-GAAP financial measures in this press release, please see the company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on the date of this press release.

BAXTER — PAGE 11

BAXTER INTERNATIONAL INC.
Cash Flows from Operations and Changes in Net Debt
(unaudited)
($ in millions)

Cash Flows from Operations
(Brackets denote cash outflows)
	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2011			2010			2011			2010
Net income	$	629		$	537		$	1,206		$	477
Adjustments
Depreciation and amortization		169			169			327			335
Deferred income taxes		69			29			160			120	A
Stock compensation		33			33			61			63
Realized excess tax benefits from stock issued under employee benefit plans		(8	)		(3	)		(13	)		(34	)
COLLEAGUE infusion pump charge		—			—			—			588
Greece receivable charge		—			28			—			28
Other		10			(4	)		18			5
Changes in balance sheet items
Accounts and other current receivables		(89	)		(5	)		(157	)		(38	)
Inventories		(153	)		(25	)		(214	)		(119	)
Accounts payable and accrued liabilities		11			(51	)		(124	)		(152	)
Infusion pump and business optimization payments		(87	)		(18	)		(147	)		(41	)
Other		48			93			(114	) B		(170	)  B
Cash flows from operations	$	632		$	783		$	1,003		$	1,062
Changes in Net Debt
Increase (decrease)
	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2011			2010			2011			2010
Net debt, beginning of period	$	2,206		$	2,080		$	1,702		$	1,365
Cash flows from operations		(632	)		(783	)		(1,003	)		(1,062	)
Capital expenditures		210			237			408			467
Dividends		178			174			358			348
Proceeds from stock issued under employee benefit plans		(162	)		(61	)		(291	)		(201	)
Purchases of treasury stock		478			677			1,115			1,112
Acquisitions and investments		188	C		20			202	C		254	C
Divestiture and other		(106	)		—			(106	)		—
Other, including the effect of exchange rate changes		22			170			(3	)		231
Increase in net debt		176			434			680			1,149
Net debt, June 30	$	2,382		$	2,514		$	2,382		$	2,514
Key statistics, June 30:
Days sales outstanding		57.8			54.3			57.8			54.3
Inventory turns		2.5			2.5			2.5			2.5

Selected balance sheet information:	June 30, 2011		December 31, 2010
Cash and equivalents		$2,018		$2,685
Accounts and other current receivables		$2,491		$2,265
Inventories		$2,648		$2,371
Accounts payable and accrued liabilities		$4,009		$4,017

A	Deferred income taxes in the first quarter of 2010 included a charge of $39 million to write off a deferred tax asset as a result of a change in the tax treatment of reimbursements under the Medicare Part D retiree prescription drug subsidy program.
B	Other cash flows from operations included planned contributions to the company’s pension plan in the United States of $150 million and $300 million in the first quarters of 2011 and 2010, respectively.
C	Acquisitions and investments in 2011 and 2010 principally related to the second quarter 2011 acquisition of Prism Pharmaceuticals, Inc., a specialty pharmaceutical company based in the United States, and the first quarter 2010 acquisition of ApaTech Limited, an orthobiologic products company based in the United Kingdom.

BAXTER — PAGE 12

BAXTER INTERNATIONAL INC.
Net Sales
Periods Ending June 30, 2011 and 2010
(unaudited)
($ in millions)

	Q2		Q2		% Growth @			% Growth @			YTD		YTD			% Growth @			% Growth @
	2011		2010		Actual Rates			Constant Rates			2011		2010			Actual Rates			Constant Rates
BioScience
United States	$	687	$	636		8%			8%		$	1,371	$	1,246			10%			10%
International		866		722		20%			11%			1,590		1,474			8%			5%
Total BioScience	$	1,553	$	1,358		14%			10%		$	2,961	$	2,720			9%			7%
Medical Products1
United States2	$	722	$	710		2%			2%		$	1,452	$	1,384			5%			5%
International		1,251		1,114		12%			4%			2,389		2,206			8%			4%
Total Medical Products – Adjusted2	$	1,973	$	1,824		8%			3%		$	3,841	$	3,590			7%			4%
COLLEAGUE infusion pump charge2														(213	)
Total Medical Products – GAAP 2	$	1,973	$	1,824		8%			3%		$	3,841	$	3,377			14%			11%
Transfusion Therapies 3
United States	$	9	$	9		0%			0%		$	17	$	18			(6%	)		(6%	)
International		1		3		(67%	)		(67%	)		1		6			(83%	)		(83%	)
Total Transfusion Therapies	$	10	$	12		(17%	)		(17%	)	$	18	$	24			(25%	)		(25%	)
Baxter International Inc.
United States2	$	1,418	$	1,355		5%			5%		$	2,840	$	2,648			7%			7%
International		2,118		1,839		15%			7%			3,980		3,686			8%			4%
Total Baxter - Adjusted2	$	3,536	$	3,194		11%			6%		$	6,820	$	6,334			8%			5%
COLLEAGUE infusion pump charge2														(213	)
Total Baxter - GAAP 2	$	3,536	$	3,194		11%			6%		$	6,820	$	6,121			11%			9%

1	Medical Products represents the combination of the company’s former Medication Delivery and Renal businesses into a single global business unit. Effective January 1, 2011, the company changed its segment presentation to reflect this new structure, and recast all prior periods presented to conform to the new presentation.
2	GAAP net sales in the first quarter of 2010 included a charge of $213 million related to the recall of COLLEAGUE infusion pumps. Refer to page 16 for a reconciliation to GAAP measures.
3	Represents revenues associated with manufacturing, distribution and other services provided by the company to the buyer of the Transfusion Therapies (TT) business after the February 2007 divestiture.

BAXTER — PAGE 13

BAXTER INTERNATIONAL INC.
GAAP Key Product Line Sales
Periods Ending June 30, 2011 and 2010
(unaudited)
($ in millions)

	GAAP		GAAP		% Growth @			% Growth @			GAAP		GAAP		% Growth @			% Growth @
	Q2 2011		Q2 2010		Actual Rates			Constant Rates			YTD 2011		YTD 2010		Actual Rates			Constant Rates
BioScience
Recombinants	$	570	$	525		9%			3%		$	1,082	$	1,035		5%			2%
Plasma Proteins		363		314		16%			11%			671		606		11%			9%
Antibody Therapy		381		310		23%			21%			755		632		19%			19%
Regenerative Medicine		147		133		11%			6%			287		252		14%			12%
Other1		92		76		21%			12%			166		195		(15%	)		(19%	)
Total BioScience	$	1,553	$	1,358		14%			10%		$	2,961	$	2,720		9%			7%
Medical Products2
Renal	$	633	$	585		8%			2%		$	1,220	$	1,169		4%			0%
Global Injectables		506		472		7%			3%			1,023		923		11%			9%
IV Therapies		452		418		8%			3%			880		809		9%			6%
Infusion Systems3		233		216		8%			5%			444		212		110%			106%
Anesthesia		143		130		10%			8%			261		257		2%			0%
Other		6		3		100%			25%			13		7		86%			20%
Total Medical Products3	$	1,973	$	1,824		8%			3%		$	3,841	$	3,377		14%			11%
Transfusion Therapies4	$	10	$	12		(17%	)		(17%	)	$	18	$	24		(25%	)		(25%	)
Total Baxter3	$	3,536	$	3,194		11%			6%		$	6,820	$	6,121		11%			9%

1	Principally includes vaccines and sales of plasma to third parties.
2	Medical Products represents the combination of the company’s former Medication Delivery and Renal businesses into a single global business unit. Effective January 1, 2011, the company changed its segment presentation to reflect this new structure, and recast all prior periods presented to conform to the new presentation.
3	GAAP net sales in the first quarter of 2010 included a charge of $213 million related to the recall of COLLEAGUE infusion pumps. Refer to page 16 for a reconciliation to GAAP measures.
4	Represents revenues associated with manufacturing, distribution and other services provided by the company to the buyer of the TT business after the February 2007 divestiture.

BAXTER — PAGE 14

BAXTER INTERNATIONAL INC.
Adjusted Key Product Line Sales
Periods Ending June 30, 2011 and 2010
(unaudited)
($ in millions)

	GAAP			GAAP			% Growth @			% Growth @			GAAP			Adjusted		% Growth @			% Growth @
	Q2 2011		1	Q2 2010		1	Actual Rates			Constant Rates			YTD 2011		1	YTD 2010		Actual Rates			Constant Rates
BioScience
Recombinants	$	570		$	525			9%			3%		$	1,082		$	1,035		5%			2%
Plasma Proteins		363			314			16%			11%			671			606		11%			9%
Antibody Therapy		381			310			23%			21%			755			632		19%			19%
Regenerative Medicine		147			133			11%			6%			287			252		14%			12%
Other2		92			76			21%			12%			166			195		(15%	)		(19%	)
Total BioScience	$	1,553		$	1,358			14%			10%		$	2,961		$	2,720		9%			7%
Medical Products3
Renal	$	633		$	585			8%			2%		$	1,220		$	1,169		4%			0%
Global Injectables		506			472			7%			3%			1,023			923		11%			9%
IV Therapies		452			418			8%			3%			880			809		9%			6%
Infusion Systems - Adjusted4		233			216			8%			5%			444			425		4%			3%
Anesthesia		143			130			10%			8%			261			257		2%			0%
Other		6			3			100%			25%			13			7		86%			20%
Total Medical Products - Adjusted4	$	1,973		$	1,824			8%			3%		$	3,841		$	3,590		7%			4%
Transfusion Therapies 5	$	10		$	12			(17%	)		(17%	)	$	18		$	24		(25%	)		(25%	)
Total Baxter - Adjusted4	$	3,536		$	3,194			11%			6%		$	6,820		$	6,334		8%			5%

1	There were no adjustments included in the 2011 GAAP results or the Q2 2010 GAAP results.
2	Principally includes vaccines and sales of plasma to third parties.
3	Medical Products represents the combination of the company’s former Medication Delivery and Renal businesses into a single global business unit. Effective January 1, 2011, the company changed its segment presentation to reflect this new structure, and recast all prior periods presented to conform to the new presentation.
4	Adjusted net sales in the first quarter of 2010 excluded a charge of $213 million related to the recall of COLLEAGUE infusion pumps. Refer to page 16 for a reconciliation to GAAP measures.
5	Represents revenues associated with manufacturing, distribution and other services provided by the company to the buyer of the TT business after the February 2007 divestiture.

BAXTER — PAGE 15

BAXTER INTERNATIONAL INC.
Key Product Line Sales by U.S. and International
Three-Month Periods Ending June 30, 2011 and 2010
(unaudited)
($ in millions)

	Q2 2011						Q2 2010							% Growth
	U.S.		International		Total		U.S.			International		Total		U.S.			International			Total
BioScience
Recombinants	$	239	$	331	$	570	$	233		$	292	$	525		3%			13%			9%
Plasma Proteins		103		260		363		110			204		314		(6%	)		27%			16%
Antibody Therapy		261		120		381		211			99		310		24%			21%			23%
Regenerative Medicine		78		69		147		76			57		133		3%			21%			11%
Other1		6		86		92		6			70		76		0%			23%			21%
Total BioScience	$	687	$	866	$	1,553	$	636		$	722	$	1,358		8%			20%			14%
Medical Products2
Renal	$	97	$	536	$	633	$	98		$	487	$	585		(1%	)		10%			8%
Global Injectables		255		251		506		263			209		472		(3%	)		20%			7%
IV Therapies		144		308		452		134			284		418		7%			8%			8%
Infusion Systems		137		96		233		132			84		216		4%			14%			8%
Anesthesia		88		55		143		84			46		130		5%			20%			10%
Other		1		5		6		(1	)		4		3		N/M			25%			100%
Total Medical Products	$	722	$	1,251	$	1,973	$	710		$	1,114	$	1,824		2%			12%			8%
Transfusion Therapies3	$	9	$	1	$	10	$	9		$	3	$	12		0%			(67%	)		(17%	)
Total Baxter	$	1,418	$	2,118	$	3,536	$	1,355		$	1,839	$	3,194		5%			15%			11%

1	Principally includes vaccines and sales of plasma to third parties.
2	Medical Products represents the combination of the company’s former Medication Delivery and Renal businesses into a single global business unit. Effective January 1, 2011, the company changed its segment presentation to reflect this new structure, and recast all prior periods presented to conform to the new presentation.
3	Represents revenues associated with manufacturing, distribution and other services provided by the company to the buyer of the TT business after the February 2007 divestiture.

BAXTER — PAGE 16

BAXTER INTERNATIONAL INC.
Reconciliation of GAAP to Non-GAAP Net Sales Measures
Periods Ending June 30, 2011 and 2010
(unaudited)
($ in millions)

The company’s GAAP net sales results for the six months ended June 30, 2010 included a $213 million charge related to the recall of COLLEAGUE infusion pumps, which impacted GAAP net sales as follows:

															% Growth @						% Growth @
	2011 YTD							2010 YTD							Actual Rates						Constant Rates
	U.S.		International			Total		U.S.		International			Total		U.S.		International		Total		U.S.		International		Total
Infusion Systems - GAAP						$	444						$	212						110%						106%
COLLEAGUE infusion pump charge														213
Infusion Systems - Adjusted						$	444						$	425						4%						3%
Total Medical Products - GAAP	$	1,452		$	2,389	$	3,841	$	1,171		$	2,206	$	3,377		24%		8%		14%		24%		4%		11%
COLLEAGUE infusion pump charge									213					213
Total Medical Products - Adjusted	$	1,452		$	2,389	$	3,841	$	1,384		$	2,206	$	3,590		5%		8%		7%		5%		4%		4%
Total Baxter - GAAP	$	2,840		$	3,980	$	6,820	$	2,435		$	3,686	$	6,121		17%		8%		11%		17%		4%		9%
COLLEAGUE infusion pump charge									213					213
Total Baxter - Adjusted	$	2,840		$	3,980	$	6,820	$	2,648		$	3,686	$	6,334		7%		8%		8%		7%		4%		5%

For more information on the company’s use of non-GAAP financial measures in this press release, please see the company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on the date of this press release.