Earnings Baxter International Inc. April 25, 2019 Safe Harbor - PowerPoint PPT Presentation

First-Quarter 2019 Earnings Baxter International Inc. April 25, 2019

Safe Harbor Statement This presentation includes forward- looking statements concerning Baxter’s financial results, business development activities, ca pital structure, cost savings initiatives, R&D pipeline, including results of clinical trials and planned product launches, and financial outlook for second quarter and full year 2019. 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 of risks for new and existing products; product development risks; product quality or patient safety concerns; continuity, availability and pricing of acceptable raw materials and component supply; inability to create additional production capacity in a timely manner or the occurrence of other manufacturing or supply difficulties (including as a result of a natural disaster or otherwise); breaches or failures of the company’s information t echnology systems or products, including by cyberattack, unauthorized use or theft; future actions of regulatory bodies and other governmental authorities, including FDA, the Department of Justice, the New York Attorney General and foreign regulatory agencies; failures with respect to compliance programs; accurate identification of and execution on business development and R&D opportunities and realization of anticipated benefits (including the acquisitions of Claris Injectables and two surgical products from Mallinckrodt plc); future actions of third parties, including payers; U.S. healthcare reform and other global austerity measures; pricing, reimbursement, taxation and rebate policies of government agencies and private payers; the impact of competitive products and pricing, including generic competition, drug reimportation and disruptive technologies; global, trade and tax policies; the ability to enforce owned or in-licensed patents or the patents of third parties preventing or restricting the manufacture, sale or use of affected products or technology; the impact of global economic conditions (including potential trade wars); fluctuations in foreign exchange and interest rates; any change in law concerning the taxation of income (including current or future tax reform), including income earned outside the United States and potential taxes associated with the Base Erosion and Anti-Abuse Tax; actions taken by tax authorities in connection with ongoing tax audits; loss of key employees or inability to identify and recruit new employees; the outcome of pending or future litigation; the adequacy of the company’s cash flows from operations to meet its ongoing cash obligations and fund its invest ment program; and other risks identified in Baxter’s most recent filing on Form 10 -K and other Securities and Exchange Commission filings, all of which are available on Baxter’s website. Baxter does not undertake to update its forward -looking statements. 2

Table of Contents Performance Summary 5 Financial Results 10 2019 Outlook 17

Ou Our r St Strat rategy egy Strengthen our portfolio and extend our impact through transformative innovation that spans prevention to recovery 4

Executing On Our Strategy First-Quarter 2019 Highlights Building Momentum With Strong Focus On Operational Performance 1 ▪ Delivered 2% operational sales growth reflecting the value of a diversified portfolio and an emphasis on innovation ▪ Adjusted EPS growth of 9% driven by solid operational performance, a lower tax rate, and a reduced share count Investing In Growth Opportunities And Executing On A Robust Pipeline Of Launches ▪ Announced several innovation milestones, including ready-to-use eptifibatide launch, planned Clinolipid U.S. launch, and FDA approval for faster preparation of Floseal Hemostatic Matrix ▪ Integrated a NantHealth digital health solution with Prismaflex technology and initiated AKI 2 collaboration with bioMérieux Delivering Enhanced Value For Shareholders ▪ Repurchased ~$600 million of shares and announced quarterly dividend payment of $0.19 per share ▪ Maintained financial optionality while thoroughly assessing high-value capital investment opportunities Creating A Best Place To Work And Demonstrating Leadership In Corporate Social Responsibility ▪ Included on Forbes Magazine’s annual list of America’s Best Large Employers for the fifth consecutive year ▪ Recognized as a 2019 Top Company for Executive Women by the National Association of Female Executives ▪ Received a perfect score on the HRC 3 2019 Corporate Equality Index for LGBTQ Equality for the fourth consecutive year First-Quarter Performance Supports Increased Confidence In Full-Year Outlook; Raising Adjusted EPS Guidance Range To $3.27 - $3.35 1 See www.baxter.com for information regarding non-GAAP financial metrics used in this presentation, including constant currency and operational sales, adjusted gross margin, adjusted operating 5 margin, adjusted diluted EPS, free cash flow, adjusted SG&A expense, adjusted R&D expense, and adjusted operating expense. 2 Acute kidney injury. 3 Human Rights Campaign Foundation.

Continuing Momentum Of Key Financial Metrics First-Quarter 2019 Snapshot 1 Global Reported Sales Adjusted Operating Margin Adjusted Diluted EPS ~$2.7B 17.1% ~$2.6B $0.76 16.7% $0.70 +2% +2% +40 bps +9% +9% Operational Growth 2 Q1 2018 Q1 2019 Q1 2018 Q1 2019 Q1 2018 Q1 2019 1 See www.baxter.com for information regarding non-GAAP financial metrics used in this presentation, including constant currency and operational sales, adjusted gross margin, adjusted operating margin, adjusted diluted EPS, free cash flow, adjusted SG&A expense, adjusted R&D expense, and adjusted operating expense. 2 Q1 2019 operational sales growth excludes the impact of foreign 6 currency of approximately 4% and U.S. cyclophosphamide competition of approximately 0%; GAAP sales decline for the period was approximately 2% compared to Q1 2018.

Strong Performance Driving Operational Growth First-Quarter 2019 Business Drivers 1,2 Renal Care Medication Delivery $851M, +3% Operational $634M, (4%) Operational Continued momentum in PD therapies partially Performance in line with expectations; offset by lower sales for select U.S. sales growth expected to improve in-center HD products throughout 2019 Pharmaceuticals 3 Clinical Nutrition $509M, +9% Operational $205M, (5%) Operational Strength in hospital pharmacy compounding Recapture efforts in the U.S. gaining services, anesthesia and critical care products, traction; international sales impacted by and injectable premixed drugs partially offset phasing of certain orders by lower sales of Brevibloc Advanced Surgery Acute Therapies $198M, +12% Operational $128M, +4% Operational Increased demand for hemostats and sealants Growth driven by new product launches, geographic expansion, and CRRT 4 education portfolio augmented by Recothrom acquisition Operational Sales Growth Of 2% Reflects Benefit Of Diversified Portfolio And Strength Of Organic Innovation 1 Sales and related figures represent Q1 2019; Other sales represent ~$0.1B. 2 See www.baxter.com for information regarding non-GAAP financial metrics used in this presentation, such as constant currency and operational sales. 3 Operational growth is equal to constant currency growth for all businesses with the exception of the Pharmaceuticals business; 7 Pharmaceuticals operational growth excludes the impact of U.S. cyclophosphamide competition of approximately 2%. 4 Continuous renal replacement therapy.

First-Quarter 2019 Sales And Adjusted Earnings 1 Q1 2019 Q1 2019 Metric Guidance Actual Sales Growth +1% - 2% +2% Operational Sales Growth ~1% +2% Constant Sales Growth (~3%) (2%) Reported Adjusted Diluted EPS $0.66 - $0.68 $0.76 Growth vs. Prior-Year Period (6%) – (3%) +9% 1 See www.baxter.com for information regarding non-GAAP financial metrics used in this presentation, including constant currency and operational sales, 8 adjusted gross margin, adjusted operating margin, adjusted diluted EPS, free cash flow, adjusted SG&A expense, adjusted R&D expense, and adjusted operating expense.

Advancing Our New Product Portfolio Recent R&D And Commercial Milestones ► Launched the first and only formulation of ready-to-use eptifibatide in a flexible container. Baxter’s GALAXY technology offers healthcare providers preparation efficiencies and helps to avoid potential dosing errors. ► Received FDA approval for faster preparation of Floseal Hemostatic Matrix . With 20% fewer components and steps to prepare, this next generation of Floseal makes it easier and faster for operating room nurses to get Floseal into the Ready-to-use eptifibatide Floseal Hemostatic Matrix hands of surgeons to help stop bleeding during procedures. ► Announced that a NantHealth digital health solution is now available to connect Baxter's Prismaflex technology to a hospital’s EMR 1 system. Digitally connected healthcare solutions have the potential to reduce reliance on manual documentation and convert data into meaningful insights to improve care. ► Presented plans to launch Clinolipid (20% Lipid Injectable Emulsion) , Baxter’s proprietary olive oil -based lipid emulsion, Prismaflex available with a in the U.S. later this year. NantHealth digital health technology Clinolipid 9 1 Electronic medical record.

Financial Results First-Quarter 2019 Earnings April 25, 2019