Baxter International Inc. Sadia Ritu

Global Diversified

History  Founded by Dr. Don Baxter in 1931  First manufacture of commercially prepared IV solutions  Bought out by Dr. Ralph Falk in 1935 and development of a research division  Headquarter in Deerfield Illinois  1939 ‘Transfuso-Vac container’, the first sterile, vacuum- type blood collection and storage unit.

2011 Sales by Business

BioScience  Recombinant (36%)  Antibody Therapy (26%),  Plasma Proteins (23%),  Regenerative Medicine (11%)  others (4%).

Medical Products  Renal (32%)  Global Injectable (26%),  IV Therapy (24%),  Infusion System (10%),  Anesthesia (7%)  Others (1%)

 Sales and distribution

 Supplier Relations  Operations

 Research and Development

2011 Sales by Region

Regional Growth:  North America  Europe, Middle East & Africa  Latin America & Canada  Asia Pacific

 Acquisitions

Industry  Medical Instruments and Supplies Industry billion -5.8% growth rate  Healthcare sector  In the U.S., people over the age of 65 is expected to be about 49.7 million over the next 5 years.

The economic effect  Healthcare Reform  Tax increase in 2013  Management & Employees  Baxter’s management guidance

Svigals Portfolio: 45 shares currently ($50.13/ share) 31.28% unrealized gain Tall Firs Portfolio: 340 BAX shares purchased in ($27-28/ share) about 120% unrealized gain Portfolio History

Downside  FDA and EMA risk of approval.  Suppliers  Upcoming tax increase of 2013 on medical device companies.  Product quality or patient safety issues, leading to product recalls or withdrawals.  Fluctuations in foreign exchange and interest rates.

Recent Happenings:  Baxter Said to Near Deal to Buy Gambro for $4 Billion -Nov 24, 2012  Baxter Declares Quarterly Dividend –Nov 13, 2012

Dividends

FMS 30% COV 22% MDT 5% BDX 43%

Discounted Cash Flow Analysis  -Beta

 -Revenue Model  -Cost Of Goods Sold  -SG&A  -Cap Ex  -Tax Rate

Weights: DCF-70% Comp-30% Implied Price: $70.94

Questions?

Hold Recommendation  Long term growth  80 years long Healthcare leader  Global expansions  Diverse