Fixed Income Investor Roadshow Jay Saccaro, EVP & CFO May 9, 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, Baxter’s long rang e plan (which includes financial outlook for 2023) and other growth strategies. 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: failure to achiev e the company’s long- term financial improvement goals and execute on the company’s business development strategies; demand for and market accept ance 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 co mpany’s information technology systems or products, including by cyberattack, unauthorized access 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); the impact of goodwill impairments; 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 c ash flows from operations to meet its ongoing cash obligations and fund its investment 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. Baxter Confidential — Do not distribute without prior approval | 2
Additional Disclaimers Baxter has filed a registration statement (including a prospectus) with the Securities Exchange Commission (“SEC”). This pres entation does not constitute an offer to sell or the solicitation of an offer to buy any securities. Any offering of securities in the future will be made only by means of the prospectus in that registration statement and a related prospectus supplement, which will be filed with the SEC. In the event that Baxter proceeds with an offering, you should read the prospectus and the related prospectus supplement and other documents Baxter has filed with the SEC for more complete information about Baxter and the offering. When available, you may obtain a copy of these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, Baxter, any underwriter or any dealer participating in the offering will arrange to send you the prospectus and the related prospectus supplement if you request it. This presentation is not a prospectus for the purposes of the European Union's Directive 2003/71/EC (as amended or superseded), as implemented in the Member States of the European Economic Area (the “EEA”). The communication of this presentation is not being made, and has not been approved, by an authorized person for the purposes of section 21 of the United Kingdom's Financial Services and Markets Act 2000, as amended (the “FSMA”). Accordingly, such presentation is not being distributed to, and must not be passed on to, the general public in the United Kingdom. The communication of such presentation as a financial promotion is only being made to those persons in the United Kingdom who have professional experience in matters relating to investments and who fall within the definition of investment professionals (as defined in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the “Financial Promotion Order”)), or who fall within Article 49(2)(a) to (d) of the Finan cial Promotion Order, or who are any other persons to whom it may otherwise lawfully be made under the Financial Promotion Order. Baxter Confidential — Do not distribute without prior approval | 3
Baxter Credit Highlights ► Target Solid Investment Grade Ratings and Commercial Paper Access ► Strong, Accelerating adjusted EBITDA Growth and Cash Flow Generation ► Efficient Capital Structure, Conservative Leverage Ratio and Robust Liquidity Profile ► Well laddered debt maturity profile ► Excellent liquidity with ~$2B in accessible global cash balances ► Undrawn $1.5B USD-denominated and EUR 200M EUR-denominated Revolving Credit Facilities ► Balanced Platform of Business Development, Balance Sheet Management, and Stakeholder Returns Baxter Confidential — Do not distribute without prior approval | 4
Baxter Profile: A Diversified And Global Portfolio 1 2018 Global Revenue ~$0 $0.5B .5B ~$0 $0.8B .8B Acute Therapies Advanced Surgery $11.1B 11.1B ~$0 $0.9B .9B ~$2 $2.7B .7B Clinical Nutrition Medication Delivery Americas 53% ~$ ~$2. 2.1B ~$3 $3.7B .7B EMEA 27% Pharmaceuticals Renal Care APAC 20% 1 Sales and related figures represent FY 2018; Other sales represent ~$0.5B. Totals may not foot due to rounding. Baxter Confidential — Do not distribute without prior approval | 5
Delivering On Our Strategy 2018 Business Highlights Building Momentum With Strong Focus on Capitalizing On New Product Launches Operational Performance And Geographic Expansion ► Delivered solid 2018 earnings growth, largely driven by operational ► Reallocating investment to higher-margin, faster-growing performance and business transformation initiatives businesses ► Continuing momentum with new product launches, geographic ► Executing on a robust pipeline to provide meaningful innovations expansion, and evidence generation for patients and providers ► Focused on meeting long-term financial goals through strategic ► Enhanced capabilities along with increasing R&D efficiency enable execution and rigorous financial management accelerating launch cadence Executing Disciplined Focus On Significantly Enhancing Balance Sheet $ Business Transformation Flexibility To Deliver Value ► Implementing optimized organizational structure, transforming cost ► Focusing on operational improvement and effective working capital structure, and simplifying processes management to improve cash flow ► Establishing global centers of excellence to drive efficiencies in ► Returned value directly to shareholders via dividends and share functional areas repurchases ► Simplifying portfolio and optimizing manufacturing footprint ► Maintaining financial optionality while thoroughly assessing capital investment opportunities Baxter Confidential — Do not distribute without prior approval | 6
Performance Across Key Metrics, 2016 – 2018 1 Adjusted Adjusted Earnings Global Revenues Free Cash Flow 2 Operating Margin Per Diluted Share $1,415M $3.05 $11.1B 17.4% $1,219M 16.3% $2.48 $1.96 $905M $10.6B 13.8% $10.2B ~+360 bps + 56% + 56% + 9% 2016 2017 2018 2016 2017 2018 2016 2017 2018 2016 2017 2018 1 See the appendix to this presentation for information regarding non-GAAP financial metrics used in this chart, including adjusted operating margin, adjusted diluted EPS, and free cash flow. 2 Operating cash flow less capital expenditures. Baxter Confidential — Do not distribute without prior approval | 7
Product safety and Quality Best place to work Growth through innovation Industry leading performance Ou Our St Strat rategy egy Strengthen our portfolio and extend our impact through transformative innovation that spans prevention to recovery Baxter Confidential — Do not distribute without prior approval | 8
Strengthening And Extending Our Impact Market Enter Portfolio Development Adjacencies Innovation Executing on pipeline Driving growth through evidence Expanding beyond the core to opportunities and geographic generation, physician education, unlock new therapies and expansion and targeted market investments markets Strategic Execution Allows Long-Term Acceleration Baxter Confidential — Do not distribute without prior approval | 9
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