Baxter's Fourth Quarter Financial Results Exceed Expectations

Company Achieves Record Sales and Earnings in 2006 and Provides Positive Financial Outlook for 2007

DEERFIELD, Ill., Jan. 25 /PRNewswire-FirstCall/ -- Baxter International Inc. today reported financial results for the fourth quarter 2006 and provided its financial outlook for the first quarter and full-year 2007.

Summary of Fourth Quarter Results

Baxter reported income from continuing operations of $433 million in the fourth quarter, an increase of 47 percent over the same period last year, and 14 percent on an adjusted basis. Earnings of $0.66 per diluted share exceeded company guidance of $0.60 to $0.62 per diluted share, and represented an increase of 43 percent on a GAAP basis and 10 percent on an adjusted basis. This performance was a result of strong sales growth, gross margin expansion and lower income tax expense.

Worldwide sales totaled $2.8 billion in the fourth quarter, an increase of 11 percent compared to the same period last year. Excluding a 2 percentage point benefit from foreign exchange, sales grew 9 percent and exceeded the company's organic sales growth guidance of 7 to 8 percent. Domestic sales increased 11 percent to $1.2 billion, and international sales also increased 11 percent to $1.5 billion (an increase of 7 percent excluding a 4 percentage point benefit from foreign exchange).

All of Baxter's businesses posted strong sales growth in the quarter. Sales within Baxter's BioScience business totaled $1.2 billion, an increase of 18 percent from the same period last year. This growth was driven by record sales of ADVATE, Antihemophilic Factor (Recombinant), Plasma/Albumin Free Method (rAHF-PFM) for the treatment of hemophilia A, antibody therapy products, including GAMMAGARD LIQUID(TM) [Immune Globulin Intravenous (Human)] (IVIG) 10% Solution for the treatment of primary immunodeficiencies, specialty plasma therapeutics and biosurgery products. Medication Delivery sales increased 7 percent to $1.0 billion, with increased sales of infusion systems, intraveneous solutions and parenteral nutrition products, along with accelerated growth in the company's drug delivery business. Renal sales increased 6 percent to $537 million reflecting accelerating gains in peritoneal dialysis patients globally.

"We are quite pleased with our strong fourth quarter results and are very well positioned as we move into 2007," said Robert L. Parkinson, Jr., chairman and chief executive officer. "Of particular importance was our ability to significantly accelerate R&D spending, which is essential to support growth in the coming years."

Summary of Full-Year 2006 Results

For full-year 2006, Baxter's worldwide sales increased 5 percent to $10.4 billion. Domestic sales totaled $4.6 billion, an increase of 5 percent from last year, while international sales increased 6 percent (with no impact from foreign exchange), to $5.8 billion.

Baxter's reported income from continuing operations totaled $1.4 billion, or $2.13 per diluted share, including special charges of $64 million ($0.10 per diluted share). On an adjusted basis, excluding special charges, the company reported 2006 income from continuing operations of $1.5 billion, or $2.23 per diluted share, an increase of 16 percent over last year. Details of special charges recorded in 2005 and 2006 are outlined in the financial schedules that follow the text of this press release.

Cash flow from operations totaled $2.2 billion in 2006, and Baxter generated $1.7 billion in free cash flow (cash flow from operations, less $526 million of capital expenditures). Baxter's full-year cash flow performance exceeded the company's guidance for 2006 of approximately $2.0 billion in cash flow from operations, and free cash flow of $1.4 billion.

"We are very pleased with the quality of our earnings results and the progress we have made financially throughout 2006," said Robert M. Davis, Baxter's chief financial officer and treasurer. "We are particularly encouraged with the strength of our cash flow, which is the best indication of our continued focus on working capital management and value creation."

Increasing Investments in Research and Development

In 2006, the company accelerated its investment in research and development by 15 percent to $614 million, the highest level of investment in the company's 75-year history.

"Rededication to science and technology will be an important driver of Baxter's future growth and success," Parkinson continued. "Over the last two years, our R&D organization has made great progress in applying disciplined prioritization and project management processes that are critical to ensuring increased productivity of our pipeline and higher returns for our shareholders."

    Examples of specific advancements include:


    --  Initiated a Phase II clinical trial utilizing adult stem cells to

        treat chronic myocardial ischemia, a severe form of coronary artery

        disease.  This trial leverages Baxter's proprietary technology to

        select stem cells for the procedure from the patient's own

        bloodstream.


    --  Announced preliminary Phase I/II clinical results of Baxter's

        candidate H5N1 pandemic influenza vaccine, suggesting the vaccine is

        well tolerated in humans and may provide wider cross protection for a

        larger number of people before and during a pandemic. This represented

        the first clinical evaluation of a cell-based H5N1 vaccine, and is the

        first clinical demonstration that a candidate H5N1 vaccine can induce

        antibodies that neutralize widely divergent strains of H5N1 virus.


    --  Supported Phase II clinical trials involving the use of intravenous

        immunoglobulin (IVIG) to treat Alzheimer's disease, which are being

        conducted by researchers at New York-Presbyterian/Weill Cornell

        Medical Center in New York City.


    --  Advanced the company's hemophilia portfolio through partnerships with

        Nektar Therapeutics and Lipoxen Technologies, leveraging each

        company's expertise to develop new therapies to reduce the frequency

        of injections required to treat blood-clotting disorders.


    --  Initiated a Phase II clinical trial involving the regeneration of bone

        using a product co-developed by Baxter and Kuros Biosurgery AG.  The

        product is based on a combination of Baxter's TISSEEL fibrin sealant

        and Kuros' proprietary biologics and associated binding technology.


    --  Initiated the development of a recombinant form of von Willebrand

        factor (VWF), a protein critical to the normal clotting of blood.

        Preclinical results, presented at the American Society of Hematology

        meeting in December, suggest that Baxter's recombinant VWF therapeutic

        protein has similar properties to plasma-derived VWF.


    --  Collaborated with Halozyme Therapeutics in the clinical and commercial

        development of Hylenex, a liquid injectable formulation of recombinant

        human hyaluronidase that can simplify the delivery of medications and

        fluids through the use of subcutaneous infusion.



    First Quarter and Full-Year 2007 Outlook

For full-year 2007, Baxter expects to achieve organic sales growth of 3 to 4 percent. This guidance reflects the divestiture of the Transfusion Therapies business before the end of the first quarter and excludes sales of the company's COLLEAGUE infusion pump in the United States, which may resume before the end of 2007. Excluding Transfusion Therapies revenues in both 2006 and 2007, Baxter expects organic sales growth of approximately 7 percent, reflecting a continued acceleration in sales growth compared to 2006.

The company expects earnings for full-year 2007 to be $2.47 to $2.53 per diluted share, and to generate cash flow from operations of approximately $2.3 billion.

For the first quarter 2007, the company expects organic sales to grow 5 to 6 percent, and earnings of $0.54 to $0.56 per diluted share. This guidance reflects the divestiture of the Transfusion Therapies business during the first quarter and ongoing transition service revenue to support this business' ongoing operations.

A webcast of Baxter's fourth quarter conference call for investors can be accessed live from a link on the company's website at http://www.baxter.com beginning at 7:30 a.m. CST on January 25, 2007, 2007. Please visit Baxter's website for more information regarding this and future investor events and webcasts, including investor presentations, a company-sponsored Investor Conference in Chicago on March 14, and the company's Annual Meeting for shareholders in Chicago on May 1.

Baxter International Inc., through its subsidiaries, assists healthcare professionals and their patients with the treatment of complex medical conditions, including hemophilia, immune disorders, cancer, infectious diseases, kidney disease, trauma and other conditions. The company applies its expertise in medical devices, pharmaceuticals and biotechnology to make a meaningful difference in patients' lives.

This release includes forward-looking statements concerning the company's financial results. 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 the FDA and foreign counterparts, that could 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; 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; reimbursement policies of government agencies and private payers; the availability of acceptable raw materials and component supply; 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; failure to satisfy closing conditions related to the sale of the Transfusion Therapies business; and other risks identified in the company's most recent filing on Form 10-Q and other SEC 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 INTERNATIONAL INC.

                      Consolidated Statements of Income

                Three Months Ended December 31, 2006 and 2005

                                 (unaudited)

             (in millions, except per share and percentage data)


                                                   Three Months Ended

                                                       December 31,

                                                  --------------------

                                                     2006      2005     Change

    CONTINUING OPERATIONS:                        --------    ------    ------


    NET SALES                                      $2,763    $2,491       11%


    GROSS PROFIT                                    1,315     1,079       22%

    % of Sales                                      47.6%     43.3%   4.3 pts


    MARKETING AND ADMINISTRATIVE EXPENSES             612       520       18%

    % of Sales                                      22.1%     20.9%   1.2 pts


    RESEARCH AND DEVELOPMENT EXPENSES                 181       134       35%

    --------------------------------------------------------------------------

    OPERATING INCOME                                  522       425       23%

    --------------------------------------------------------------------------

    % of Sales                                      18.9%     17.1%   1.8 pts


    INTEREST, NET                                       1        23      (96%)


    OTHER EXPENSE, NET                                  6        18      (67%)

    --------------------------------------------------------------------------

    INCOME BEFORE INCOME TAXES                        515       384       34%


    INCOME TAX EXPENSE                                 82        90       (9%)

    --------------------------------------------------------------------------


    INCOME FROM CONTINUING OPERATIONS                $433      $294       47%

    ==========================================================================


    BASIC EPS FROM CONTINUING OPERATIONS            $0.66     $0.47       40%

    ==========================================================================


    DILUTED EPS FROM CONTINUING OPERATIONS          $0.66     $0.46       43%

    ==========================================================================


    WEIGHTED AVERAGE NUMBER OF COMMON SHARES

      OUTSTANDING

       Basic                                          653       624

       Diluted                                        659       634

    --------------------------------------------------------------------------


    ADJUSTED INCOME FROM CONTINUING OPERATIONS

      (excluding certain items)                      $433      $379(1)


    ADJUSTED DILUTED EPS FROM CONTINUING OPERATIONS

      (excluding certain items)                     $0.66     $0.60(1)



    (1) See page 8 for description of adjustments and reconciliation to GAAP

        (generally accepted accounting principles) measures.



    Note:  Effective January 1, 2006, the company adopted SFAS No. 123-R using

    the modified prospective method.  After-tax stock-option expense for the

    fourth quarter of 2006 was $15 million, or $0.02 per diluted share.  In

    accordance with the modified prospective adoption method, the company did

    not adjust its historical consolidated financial statements to reflect the

    impact of stock-option expense.  Based on the pro forma application of

    SFAS No. 123 for the calculation of stock-option expense prior to January

    1, 2006 (as previously disclosed in the company's consolidated financial

    statements), pro forma after-tax stock-option expense in the fourth

    quarter of 2005 was $15 million, or $0.02 per diluted share.


    Non-GAAP Financial Measures:  The non-GAAP financial measures contained in

    this press release (earnings and per-share earnings, excluding certain

    items) adjust for factors that are unusual or nonrecurring.  Unusual or

    nonrecurring items can be highly variable, difficult to predict, and of a

    size that may substantially impact the company's reported operations for a

    period.  Management believes that non-GAAP financial measures can

    facilitate a fuller analysis of the company's results of operations,

    particularly in evaluating performance period over period.  Management

    uses these non-GAAP financial measures internally in financial planning,

    to monitor business unit performance, and in evaluating management

    performance. Refer to the company's filing on Form 8-K of today's date for

    additional information.




                          BAXTER INTERNATIONAL INC.

                  Note to Consolidated Statements of Income

                     Three Months Ended December 31, 2005

      Description of Adjustments and Reconciliation of GAAP to Non-GAAP

                                 (unaudited)

             (in millions, except per share and percentage data)


    The company's GAAP results for the three months ended December 31, 2005

    included certain charges related to infusion pumps, the exit of

    hemodialysis instrument manufacturing, early debt retirement costs, and

    taxes on the repatriation of foreign earnings, which impacted the GAAP

    results as follows:



                                                  Income  Income from

                                     Operating       Tax   Continuing Diluted

                                        Income   Expense   Operations     EPS

                                     ----------------------------------------

         GAAP                             $425       $90         $294   $0.46

         6060 infusion pump charge (A)      49        15           34    0.06

         Hemodialysis instruments

          charge (A)                        22         9           13    0.02

         Early debt retirement costs (B)    17         7           10    0.02

         Tax on repatriation of foreign

          earnings                           -       (28)          28    0.04

                                     ----------------------------------------

         Excluding specified items        $513       $93         $379   $0.60

                                     ========================================


         Adjusted operating income

          percentage                     20.6%


    (A)  Included in computing the Gross Profit line in the accompanying

         consolidated statement of income.  Excluding these items, which

         totaled $71 million, adjusted gross profit is $1.15 billion and the

         adjusted gross profit percentage is 46.2%.

    (B)  Included in the Other Expense, Net line in the accompanying

         consolidated statement of income.




                          BAXTER INTERNATIONAL INC.

                      Consolidated Statements of Income

                Twelve Months Ended December 31, 2006 and 2005

                                 (unaudited)

             (in millions, except per share and percentage data)


                                               Twelve Months Ended

                                                    December 31,

                                              ---------------------

                                                 2006         2005     Change

    CONTINUING OPERATIONS:                    -------       ------    -------


    NET SALES                                 $10,378       $9,849         5%


    GROSS PROFIT                                4,737        4,093        16%

    % of Sales                                  45.6%        41.6%    4.0 pts


    MARKETING AND ADMINISTRATIVE EXPENSES       2,282        2,030        12%

    % of Sales                                  22.0%        20.6%    1.4 pts


    RESEARCH AND DEVELOPMENT EXPENSES             614          533        15%


    RESTRUCTURING ADJUSTMENTS                       -         (109)     (100%)

    --------------------------------------------------------------------------

    OPERATING INCOME                            1,841        1,639        12%

    --------------------------------------------------------------------------

    % of Sales                                  17.7%        16.6%    1.1 pts


    INTEREST, NET                                  34          118       (71%)


    OTHER EXPENSE, NET                             61           77       (21%)

    --------------------------------------------------------------------------


    INCOME BEFORE INCOME TAXES                  1,746        1,444        21%


    INCOME TAX EXPENSE                            348          486       (28%)

    --------------------------------------------------------------------------


    INCOME FROM CONTINUING OPERATIONS          $1,398         $958        46%

    ==========================================================================


    BASIC EPS FROM CONTINUING OPERATIONS        $2.15        $1.54        40%

    ==========================================================================


    DILUTED EPS FROM CONTINUING OPERATIONS      $2.13        $1.52        40%

    ==========================================================================


    WEIGHTED AVERAGE NUMBER OF COMMON SHARES

      OUTSTANDING

       Basic                                      651          622

       Diluted                                    656          629

    --------------------------------------------------------------------------


    ADJUSTED INCOME FROM CONTINUING

     OPERATIONS (excluding certain items)      $1,462(1)    $1,208(1)


    ADJUSTED DILUTED EPS FROM CONTINUING

     OPERATIONS (excluding certain items)       $2.23(1)     $1.92(1)



    (1)  See page 10 for description of adjustments and reconciliation to GAAP

         measures.


    Note:  Effective January 1, 2006, the company adopted SFAS No. 123-R using

    the modified prospective method.  After-tax stock-option expense for the

    year ended December 31, 2006 was $53 million, or $0.08 per diluted share.

    In accordance with the modified prospective adoption method, the company

    did not adjust its historical consolidated financial statements to reflect

    the impact of stock-option expense.  Based on the pro forma application of

    SFAS No. 123 for the calculation of stock-option expense prior to January

    1, 2006 (as previously disclosed in the company's consolidated financial

    statements), pro forma after-tax stock-option expense for the year ended

    December 31, 2005 was $56 million, or $0.09 per diluted share.


    Non-GAAP Financial Measures:  The non-GAAP financial measures contained in

    this press release (earnings and per-share earnings, excluding certain

    items) adjust for factors that are unusual or nonrecurring.  Unusual or

    nonrecurring items can be highly variable, difficult to predict, and of a

    size that may substantially impact the company's reported operations for a

    period.  Management believes that non-GAAP financial measures can

    facilitate a fuller analysis of the company's results of operations,

    particularly in evaluating performance period over period.  Management

    uses these non-GAAP financial measures internally in financial planning,

    to monitor business unit performance, and in evaluating management

    performance. Refer to the company's filing on Form 8-K of today's date for

    additional information.




                          BAXTER INTERNATIONAL INC.

                  Note to Consolidated Statements of Income

                Twelve Months Ended December 31, 2006 and 2005

      Description of Adjustments and Reconciliation of GAAP to Non-GAAP

                                 (unaudited)

             (in millions, except per share and percentage data)


    2006 description of adjustment and reconciliation of GAAP to Non-GAAP

    ----------------------------------------------------------------------


    The company's GAAP results for the twelve months ended December 31, 2006

    included a charge related to COLLEAGUE infusion pumps, which impacted the

    GAAP results as follows:



                                                 Income  Income from

                                    Operating       Tax   Continuing  Diluted

                                       Income   Expense   Operations      EPS

                                    -----------------------------------------

        GAAP                           $1,841      $348       $1,398    $2.13

        COLLEAGUE infusion pump

         charge (A)                        76        12           64     0.10

                                    -----------------------------------------

        Excluding specified items      $1,917      $360       $1,462    $2.23

                                    =========================================

        Adjusted operating income

         percentage                      18.5%


    (A) Included in the Gross Profit line in the accompanying consolidated

        statement of income.  Excluding this item, adjusted gross profit is

        $4.81 billion and the adjusted gross profit percentage is 46.4%.



    2005 description of adjustments and reconciliation of GAAP to Non-GAAP

    ----------------------------------------------------------------------


    The company's GAAP results for the twelve months ended December 31, 2005

    included certain charges related to infusion pumps, the exit of

    hemodialysis instrument manufacturing, early debt retirement costs, taxes

    on the repatriation of foreign earnings, as well as restructuring

    adjustments, which impacted the GAAP results as follows:



                                                 Income  Income from

                                     Operating      Tax   Continuing  Diluted

                                        Income  Expense   Operations      EPS

                                     ----------------------------------------

        GAAP                           $1,639      $486         $958    $1.52

        6060 infusion pump charge (A)      49        15           34     0.06

        COLLEAGUE infusion pump

         charge   (A)                      77        12           65     0.10

        Hemodialysis instruments

         charge  (A)                       50        17           33     0.05

        Early debt retirement costs (B)    17         7           10     0.02

        Tax on repatriation of foreign

          earnings                          -      (191)         191     0.30

        Restructuring adjustments (C)    (109)      (26)         (83)   (0.13)

                                     ----------------------------------------

        Excluding specified items      $1,723      $320       $1,208    $1.92

                                     ========================================


        Adjusted operating income

         percentage                     17.5%


    (A) Included in computing the Gross Profit line in the accompanying

        consolidated statement of income.  Excluding these items, which

        totaled $176 million, adjusted gross profit is $4.27 billion and the

        adjusted gross profit percentage is 43.3%.

    (B) Included in the Other Expense, Net line in the accompanying

        consolidated statement of income.

    (C) Included in the Restructuring Adjustments line in the accompanying

        consolidated statement of income.




                          Baxter International Inc.

                    Condensed Consolidated Balance Sheets

                                 (unaudited)

                               ($ in millions)


                                                  December 31,  December 31,

                                                          2006          2005

                                                  ------------  ------------

    ASSETS

    Cash and equivalents                                $2,485          $841

    Receivables                                          1,838         1,766

    Inventories                                          2,066         1,925

    Other current assets                                   581           584

                                                  --------------------------

       Total current assets                              6,970         5,116

                                                  --------------------------

    Property, plant and equipment, net                   4,229         4,144

    Other long-term assets                               3,487         3,467

    ------------------------------------------------------------------------

        Total assets                                   $14,686       $12,727

    ========================================================================


    LIABILITIES AND SHAREHOLDERS' EQUITY

    Short-term debt                                       $234          $924

    Other current liabilities                            3,376         3,241

    Long-term debt                                       2,567         2,414

    Other long-term liabilities                          2,237         1,849

    Shareholders' equity                                 6,272         4,299

    ------------------------------------------------------------------------

        Total liabilities and shareholders' equity     $14,686       $12,727

    ========================================================================




                          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     Twelve Months

                                               Ended             Ended

                                            December 31,      December 31,

                                           --------------   ---------------

                                            2006     2005     2006     2005

                                           ------   ------  -------   ------

    Net income                              $431     $292   $1,397     $956

    Adjustments

       Depreciation and amortization         144      144      575      580

       Deferred income taxes                 (68)       3        8      201

       Stock compensation                     26        2       94        9

       Infusion pump and hemodialysis

        instrument charges                     -       71       76      176

       Restructuring adjustments               -        -        -     (109)

       Other                                   6        2       34       48

    Changes in balance sheet items

       Receivables                           (49)      45      (16)     178

       Inventories                            73       20      (35)      88

       Accounts payable and accrued

        liabilities                          160      (38)       1     (325)

       Restructuring payments                 (8)     (22)     (42)    (117)

       Other                                  47     (283)      91     (135)

    ------------------------------------------------------------------------

    Cash flows from operations              $762     $236   $2,183   $1,550

    ========================================================================



    --------------------------------------------------------------------------

    Changes in Net Debt

    --------------------------------------------------------------------------

    Increase (decrease)

                                            Three Months     Twelve Months

                                               Ended             Ended

                                            December 31,      December 31,

                                           --------------   ---------------

                                            2006     2005     2006     2005

                                           ------  ------   ------   ------

    Net debt, beginning of period           $741   $2,650   $2,497   $3,185


    Cash flows from operations              (762)    (236)  (2,183)  (1,550)

    Capital expenditures                     190      165      526      444

    Dividends                                  -        -      363      359

    Acquisitions, net                          2       33        5       47

    Issuances of common stock                  -        -   (1,249)       -

    Purchases of treasury stock              258        -      737        -

    Other, including the effect of

     exchange rate changes                  (113)    (115)    (380)      12

    ------------------------------------------------------------------------

    Decrease in net debt                    (425)    (153)  (2,181)    (688)

    ------------------------------------------------------------------------


    Net debt, December 31                   $316   $2,497     $316   $2,497

    ========================================================================



    --------------------------------------------------------------------------

    Key statistics, December 31:

    Days sales outstanding                  52.9     55.1     52.9     55.1

    Inventory turns                          2.7      2.6      2.7      2.6

    Net-debt-to-capital ratio (A)           4.8%    36.7%     4.8%    36.7%

    --------------------------------------------------------------------------


    (A) The decrease in the debt-to-capital ratio from December 31, 2005 to

        December 31, 2006 primarily related to the settlement of the

        company's equity units.  In February 2006, the purchase contracts

        included in the company's equity units matured, and the company

        issued approximately 35 million common shares in exchange for $1.25

        billion.  Management used a portion of the cash proceeds to pay down

        maturing debt.  Refer to the company's Form 10-K for the year ended

        December 31, 2005 for additional information regarding the equity

        units.




                          Baxter International Inc.

                     Net Sales from Continuing Operations

                  Periods Ending December 31, 2006 and 2005

                                 (unaudited)

                               ($ in millions)



                                                            % Growth % Growth

                                                                   @        @

                                                Q4        Q4  Actual Constant

                                              2006      2005   Rates    Rates

    -------------------------------------------------------------------------

    BioScience

    United States                             $587      $479     23%      23%

    International                              600       531     13%       7%

    Total                                   $1,187    $1,010     18%      14%

    -------------------------------------------------------------------------


    Medication Delivery

    United States                             $549      $532      3%       3%

    International                              490       440     11%       8%

    Total                                   $1,039      $972      7%       5%

    -------------------------------------------------------------------------


    Renal

    United States                              $95       $96     (1%)     (1%)

    International                              442       413      7%       5%

    Total                                     $537      $509      6%       4%

    -------------------------------------------------------------------------


    Baxter International Inc.

    United States                           $1,231    $1,107     11%      11%

    International                            1,532     1,384     11%       7%

    Total                                   $2,763    $2,491     11%       9%

    -------------------------------------------------------------------------




                                                            % Growth % Growth

                                                                   @        @

                                               YTD       YTD  Actual Constant

                                              2006      2005   Rates    Rates

    -------------------------------------------------------------------------

    BioScience

    United States                           $2,127    $1,764     21%      21%

    International                            2,269     2,088      9%       9%

    Total                                   $4,396    $3,852     14%      14%

    -------------------------------------------------------------------------


    Medication Delivery

    United States                           $2,081     $2,234     (7%)    (7%)

    International                            1,836      1,756      5%      5%

    Total                                   $3,917     $3,990     (2%)    (2%)

    -------------------------------------------------------------------------


    Renal

    United States                             $381       $385     (1%)    (1%)

    International                            1,684      1,622      4%      4%

    Total                                   $2,065     $2,007      3%      3%

    -------------------------------------------------------------------------


    Baxter International Inc.

    United States                           $4,589     $4,383      5%      5%

    International                            5,789      5,466      6%      6%

    Total                                  $10,378     $9,849      5%      5%

    -------------------------------------------------------------------------




                          Baxter International Inc.

                            Key Product Line Sales

                  Periods Ending December 31, 2006 and 2005

                                 (unaudited)

                               ($ in millions)


                                                            % Growth % Growth

                                                                   @        @

                                               Q4       Q4    Actual Constant

                                             2006     2005(1)  Rates    Rates

    --------------------------------------------------------------------------

    BioScience

    Recombinants                             $452     $394       15%      11%

    Plasma Proteins (2)                       262      193       36%      33%

    Antibody Therapy                          207      147       41%      38%

    BioSurgery (3)                             78       67       16%      13%

    Transfusion Therapies                     145      140        4%       2%

    Other (4)                                  43       69      (38%)    (42%)

    --------------------------------------------------------------------------

    Total BioScience                       $1,187   $1,010       18%      14%

    --------------------------------------------------------------------------


    Medication Delivery

    IV Therapies (5)                         $341     $316        8%       6%

    Drug Delivery                             219      196       12%      11%

    Infusion Systems                          221      194       14%      12%

    Anesthesia and Injectable Drugs           247      249       (1%)     (2%)

    Other (6)                                  11       17      (35%)    (29%)

    --------------------------------------------------------------------------

    Total Medication Delivery              $1,039     $972        7%       5%

    --------------------------------------------------------------------------


    Renal

    PD Therapy                               $429     $400        7%       6%

    HD Therapy                                108      109       (1%)     (2%)

    --------------------------------------------------------------------------

    Total Renal (7)                          $537     $509        6%       4%

    --------------------------------------------------------------------------


    TOTAL BAXTER                           $2,763   $2,491       11%       9%

    ==========================================================================




                                                            % Growth % Growth

                                                                   @        @

                                              YTD      YTD    Actual Constant

                                             2006     2005(1)  Rates    Rates

    --------------------------------------------------------------------------

    BioScience

    Recombinants                           $1,696   $1,527       11%      11%

    Plasma Proteins (2)                       881      709       24%      24%

    Antibody Therapy                          785      452       74%      73%

    BioSurgery (3)                            298      266       12%      12%

    Transfusion Therapies                     516      547       (6%)     (5%)

    Other (4)                                 220      351      (37%)    (37%)

    --------------------------------------------------------------------------

    Total BioScience                       $4,396   $3,852       14%      14%

    --------------------------------------------------------------------------


    Medication Delivery

    IV Therapies (5)                       $1,285   $1,225        5%       5%

    Drug Delivery                             832      818        2%       1%

    Infusion Systems                          817      853       (4%)     (5%)

    Anesthesia and Injectable Drugs           938    1,021       (8%)     (8%)

    Other (6)                                  45       73      (38%)    (36%)

    --------------------------------------------------------------------------

    Total Medication Delivery              $3,917   $3,990       (2%)     (2%)

    --------------------------------------------------------------------------


    Renal

    PD Therapy                             $1,634   $1,553        5%       6%

    HD Therapy                                431      454       (5%)     (5%)

    --------------------------------------------------------------------------

    Total Renal (7)                        $2,065   $2,007        3%       3%

    --------------------------------------------------------------------------


    TOTAL BAXTER                          $10,378   $9,849        5%       5%

    ==========================================================================


    (1) Prior year sales data has been reclassified to reflect the changes

        that are described in notes 2, 3, 4 and 7 below.

    (2) Includes plasma-derived hemophilia (FVII, FVIII, FIX and FEIBA),

        albumin, and certain other plasma-based products.  Sales of Tisseel,

        sales of plasma to third parties, and contract manufacturing revenues

        were previously reported in Plasma Proteins, and are now reported in

        other product lines, as detailed below.

    (3) Includes sales of Tisseel and FloSeal/CoSeal, which were previously

        reported in Plasma Proteins and Other, respectively.

    (4) Principally includes vaccines and sales of plasma to third parties.

        The sales of plasma to third parties were previously reported in

        Plasma Proteins.  The prior year sales include contract manufacturing

        revenues.

    (5) Principally includes intravenous solutions and nutritional products.

    (6) Principally includes other hospital-distributed products.

    (7) Sales of pharmaceutical and certain other products, which were

        previously reported in Other, are now reported in PD Therapy.




                         Baxter International Inc.

                Key Product Line Sales -- US/International

                      Periods Ending December 31, 2006 and 2005

                                (unaudited)

                              ($ in millions)


                                    Q4 2006                  Q4 2005 (1)

                            --------------------------------------------------

                                     Inter-                    Inter-

                                US national   Total      US  national   Total

                            --------------------------------------------------

    BioScience

    Recombinants              $191     $261    $452    $168      $226    $394

    Plasma Proteins (2)        102      160     262      72       121     193

    Antibody Therapy           158       49     207     103        44     147

    BioSurgery (3)              43       35      78      39        28      67

    Transfusion Therapies       78       67     145      67        73     140

    Other (4)                   15       28      43      30        39      69

                            --------------------------------------------------

    Total BioScience          $587     $600  $1,187    $479      $531  $1,010

                            --------------------------------------------------


    Medication Delivery

    IV Therapies (5)          $113     $228    $341    $109      $207    $316

    Drug Delivery              144       75     219     128        68     196

    Infusion Systems           132       89     221     123        71     194

    Anesthesia and Injectable

     Drugs                     154       93     247     166        83     249

    Other (6)                    6        5      11       6        11      17

                            --------------------------------------------------

    Total Medication

      Delivery                $549     $490  $1,039    $532      $440    $972

                            --------------------------------------------------


    Renal

    PD Therapy                 $67     $362    $429     $65      $335    $400

    HD Therapy                  28       80     108      31        78     109

                            --------------------------------------------------

    Total Renal (7)            $95     $442    $537     $96      $413    $509

                            --------------------------------------------------


    TOTAL BAXTER            $1,231   $1,532  $2,763  $1,107    $1,384  $2,491

                            ==================================================




                                                       % Growth

                                               ------------------------------

                                                          Inter-

                                                  US    national       Total

                                               ------------------------------

    BioScience

    Recombinants                                 14%         15%         15%

    Plasma Proteins (2)                          42%         32%         36%

    Antibody Therapy                             53%         11%         41%

    BioSurgery (3)                               10%         25%         16%

    Transfusion Therapies                        16%         (8%)         4%

    Other (4)                                   (50%)       (28%)       (38%)

                                               ------------------------------

    Total BioScience                             23%         13%         18%

                                               ------------------------------


    Medication Delivery

    IV Therapies (5)                              4%         10%          8%

    Drug Delivery                                13%         10%         12%

    Infusion Systems                              7%         25%         14%

    Anesthesia and Injectable Drugs              (7%)        12%         (1%)

    Other (6)                                     -         (55%)       (35%)

                                               ------------------------------

    Total Medication Delivery                     3%         11%          7%

                                               ------------------------------


    Renal

    PD Therapy                                    3%          8%          7%

    HD Therapy                                  (10%)         3%         (1%)

                                               ------------------------------

    Total Renal (7)                              (1%)         7%          6%

                                               ------------------------------


    TOTAL BAXTER                                 11%         11%         11%

                                               ==============================


    (1) Prior year sales data has been reclassified to reflect the changes

        that are described in notes 2, 3, 4 and 7 below.

    (2) Includes plasma-derived hemophilia (FVII, FVIII, FIX and FEIBA),

        albumin, and certain other plasma-based products.  Sales of Tisseel,

        sales of plasma to third parties, and contract manufacturing revenues

        were previously reported in Plasma Proteins, and are now reported in

        other product lines, as detailed below.

    (3) Includes sales of Tisseel and FloSeal/CoSeal, which were previously

        reported in Plasma Proteins and Other, respectively.

    (4) Principally includes vaccines and sales of plasma to third parties.

        The sales of plasma to third parties were previously reported in

        Plasma Proteins.  The prior year sales include contract manufacturing

        revenues.

    (5) Principally includes intravenous solutions and nutritional products.

    (6) Principally includes other hospital-distributed products.

    (7) Sales of pharmaceutical and certain other products, which were

        previously reported in Other, are now reported in PD Therapy.

CONTACT: Media Contacts, Deborah Spak, +1-847-948-2349, or Tom Kline,+1-847-948-2251, or Investor Contacts, Mary Kay Ladone, +1-847-948-3371, orClare Trachtman, +1-847-948-3085, all of Baxter International Inc.

Web site: http://www.baxter.com/

Ticker Symbol: (NYSE:BAX)

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Copyright © 2007 PR Newswire Association LLC. All rights reserved.
A United Business Media Company

Posted: January 2007


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