Baxter Reports First-Quarter 2019 Results

• First-quarter revenue of $2.6 billion declined 2 percent on a
  reported basis and increased 2 percent on an operational basis
• First-quarter GAAP earnings per share (EPS) of $0.66; Adjusted EPS
  of $0.76 increased 9 percent
• Company now expects full-year 2019 Adjusted EPS of $3.27 to $3.35¹

DEERFIELD, Ill.–(BUSINESS WIRE)–Baxter International Inc. (NYSE:BAX), a leading global medical products
company, today reported results for the first quarter of 2019 and
increased its full-year 2019 earnings outlook.

“We are pleased with the solid start to 2019, establishing a foundation
for accelerating performance over the course of the year,” said José
(Joe) E. Almeida, chairman and chief executive officer. “Our first
quarter results reflect the value of our diversified portfolio, an
increased emphasis on high-value innovation and an ongoing focus on
operational excellence. We remain committed to executing on our strategy
to deliver enhanced performance in 2019 and beyond.”

First-Quarter Financial Results

Worldwide sales in the first quarter totaled approximately $2.6 billion,
a decrease of 2% on a reported basis and an increase of 2% on both a
constant currency and an operational basis. Operational sales in the
first quarter exclude the impact of foreign exchange and generic
competition for U.S. cyclophosphamide.

Sales in the U.S. totaled $1.1 billion, decreasing 2% on both a reported
and operational basis. International sales of $1.5 billion decreased 1%
on a reported basis and increased 5% on a constant currency basis.

Performance in the quarter was driven by growth of Baxter’s peritoneal
dialysis and continuous renal replacement therapies, certain generic
injectable pharmaceuticals, and hemostats and sealants. In addition,
increased demand for Baxter’s hospital pharmacy compounding and
cytotoxic contract manufacturing services also contributed to growth in
the quarter. Sales growth in the quarter was partially offset by
expected lower sales of Medication Delivery and Nutritional therapies.
Baxter’s performance in International markets reflects growth across
both the Europe, Middle East and Africa (EMEA) and Asia Pacific (APAC)
regions.

Please see the attached schedules accompanying this press release for
additional details on sales performance in the quarter, including
breakouts by Baxter’s three geographic segments and six global business
units (GBUs).

Baxter reported net income of $347 million, or $0.66 per diluted share,
on a GAAP (Generally Accepted Accounting Principles) basis for the first
quarter. These results include special items totaling $52 million
after-tax, which were primarily related to business optimization charges
and intangible asset amortization, partially offset by an insurance
recovery from a legacy product-related matter. On an adjusted basis,
Baxter’s first quarter net income totaled $399 million, or $0.76 per
diluted share, ahead of the company’s expectations of $0.66 to $0.68 per
diluted share. Adjusted earnings per diluted share advanced 9% in the
quarter, driven by solid operational performance as well as benefits
from a lower tax rate and share count as compared to the prior-year
period.

Business Highlights

Baxter continues to achieve notable milestones in pursuit of its Mission
for patients and emphasis on accelerating profitable growth. Among
recent highlights, the company:

• Launched ready-to-use
  eptifibatide, a platelet aggregation inhibitor that prevents
  platelets from sticking together and clotting, using the company’s
  proprietary GALAXY container technology. Baxter’s premix presentation
  is the first of its kind available in a flexible container, offering
  healthcare providers preparation efficiencies and helping to avoid
  potential dosing errors.
• Announced U.S. Food and Drug Administration (FDA) approval for faster
  preparation of Floseal
  Hemostatic Matrix. This next generation of Floseal has 20%
  fewer components and steps to prepare,² making it easier
  and faster for operating room nurses to get Floseal into the
  hands of surgeons to help stop bleeding during procedures.
• Initiated a collaboration
  with bioMérieux, a world leader in the field of in vitro
  diagnostics, to develop future biomarkers with the goal of rapidly
  identifying and informing treatment of acute kidney injury (AKI). The
  efforts are meant to help diagnose AKI earlier so a patient can have
  improved therapy options, reflecting Baxter’s growth strategy of
  addressing patient needs across the continuum of care.
• Announced that a NantHealth
  digital health solution is now available to connect Baxter’s Prismaflex
  technology, used in the intensive care unit to treat patients with
  acute kidney injury, to a hospital’s electronic medical record (EMR)
  system. Digitally connected healthcare solutions have the potential to
  positively impact patient care in many ways, from reducing reliance on
  manual documentation to converting data into meaningful insights to
  improve care.
• Announced the planned U.S. launch of Clinolipid
  (20% Lipid Injectable Emulsion), Baxter’s proprietary olive
  oil-based lipid emulsion, later this year. The announcement was made
  at the 2019 ASPEN Nutrition Science & Practice Conference, where
  Baxter featured its diverse portfolio of parenteral nutrition products
  to address and help improve care for malnourished patients.
• Received recognition from multiple organizations for its commitment to
  workplace excellence, including:
  • Forbes Magazine, which included Baxter on its annual list of
    America’s Best Large Employers for the fifth consecutive year.
  • The National Association for Female Executives (NAFE), which cited
    Baxter among its 2019 NAFE Top Companies for Executive Women.
  • The Human Rights Campaign Foundation (HRC), which cited Baxter as
    a 2019 Best Place to Work for LGBTQ Equality based on Baxter’s
    perfect score on HRC’s Corporate Equality Index.

2019 Financial Outlook

For full-year 2019: Based on solid first
quarter performance, Baxter is raising its earnings outlook for 2019.
The company now expects adjusted earnings from continuing operations,
before special items, of $3.27 to $3.35 per diluted share. The company
continues to expect sales growth of 0 to 1 percent on a reported basis,
2 to 3 percent on a constant currency basis and 3 to 4 percent on an
operational basis.

For second-quarter 2019: The company
expects sales to decline approximately 2 percent on a reported basis,
and to grow approximately 2 percent on a constant currency basis and 2
to 3 percent on an operational basis. The company expects adjusted
earnings from continuing operations, before special items, of $0.80 to
$0.82 per diluted share.

Full-year and quarterly operational sales estimates for 2019 have been
adjusted for the impact of foreign exchange and generic competition for
U.S. cyclophosphamide.

A webcast of Baxter’s first-quarter 2019 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 April 25, 2019. Please see www.baxter.com
for more information regarding this and future investor events and
webcasts.

About Baxter

Every day, millions of patients and caregivers rely on Baxter’s leading
portfolio of critical care, nutrition, renal, hospital and surgical
products. For more than 85 years, we’ve been operating at the critical
intersection where innovations that save and sustain lives meet the
healthcare providers that make it happen. With products, technologies
and therapies available in more than 100 countries, Baxter’s employees
worldwide are now building upon the company’s rich heritage of medical
breakthroughs to advance the next generation of transformative
healthcare innovations. To learn more, visit www.baxter.com and
follow us on Twitter,
LinkedIn
and Facebook.

This release includes forward-looking statements concerning the
company’s financial results, business development activities, capital
structure, cost savings initiatives, R&D pipeline, including results of
clinical trials and planned product launches, and outlook for the 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 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);
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 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, Clinolipid, Floseal, Galaxy and Prismaflex are registered
trademarks of Baxter International Inc.

¹ See tables to the press release for reconciliations of
non-GAAP measures used in this press release to the closest GAAP
measures.

² Floseal Hemostatic Matrix Instructions for Use. Hayward,
CA: Baxter Healthcare Corporation.

Contacts

Media Contact
Steve Brett, (224) 948-5353
media@baxter.com

Investor
Contact
Clare Trachtman, (224) 948-3020