2020 Annual Meeting of Stockholders May 5, 2020 2020 Annual - - PowerPoint PPT Presentation

2020 Annual Meeting of Stockholders

May 5, 2020

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2020 Annual Meeting of Stockholders

Introductions and Meeting Procedures 2020 Annual Meeting Proposals Baxter Overview Voting Results Questions and Answers Adjournment

2020 Annual Meeting of Stockholders

May 5, 2020

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Baxter’s Board of Directors

All Directors up for reelection at the 2020 Annual Meeting

José (Joe) E. Almeida Michael F. Mahoney Thomas T. Stallkamp Patricia B. Morrison Thomas F. Chen Stephen N. Oesterle, M.D. John D. Forsyth Cathy R. Smith James R. Gavin III, M.D., Ph.D. Albert P.L. Stroucken Peter S. Hellman Amy A. Wendell

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Baxter’s Senior Leadership Team

Giuseppe Accogli SVP and President, Americas Laura Angelini GM, Renal Care Alex Blanco SVP, Global Supply Chain Officer Wil Boren President, Advanced Surgery Dennis Crowley SVP, Business Development & Licensing Stacey Eisen SVP, Global Communications David Ferguson, Ph.D. GM, Medication Delivery Cristiano Franzi SVP and President, Europe, Middle East, Africa Andrew (Andy) Frye SVP and President, Asia Pacific Heather Knight GM, U.S. Hospital Products Jacqueline (Jackie) Kunzler, Ph.D. SVP and Chief Quality Officer Karen Leets SVP and Treasurer Paul Martin SVP and Chief Information Officer Sean Martin SVP and General Counsel Jeanne Mason, Ph.D. SVP, Human Resources Ellen McIntosh SVP and Corporate Secretary Sumant Ramachandra, M.D., Ph.D. President, Pharmaceuticals, and SVP, Chief Science and Technology Officer Reaz Rasul GM, Acute Therapies Philippe Reale VP, Planning & Fulfillment David Roman VP, Strategy, Financial Planning and Analysis James (Jay) Saccaro EVP and Chief Financial Officer Cathy Skala VP, Business Transformation Office Brian Stevens SVP, Chief Accounting Officer and Controller Clare Trachtman VP, Investor Relations Jorge Vasseur GM, Clincal Nutrition

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Safe Harbor Statement

This presentation includes forward-looking statements concerning Baxter’s financial results, business development activities, capital structure, cost savings initiatives, R&D pipeline, including results of clinical trials and planned product launches. These forward-looking 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, public health crises and epidemics/pandemics, regulatory actions or otherwise); the impact of global economic conditions (including potential trade wars) and public health crises and epidemics, such as the novel strain of coronavirus (COVID-19), on us and our customers and suppliers, including foreign governments in countries in which we operate; breaches or failures of the company’s information technology systems or products, including by cyberattack, unauthorized access or theft; the adequacy of the company’s cash flows from operations (which may be negatively impacted by collectability concerns as a result of the COVID-19 pandemic or otherwise) and other sources of liquidity to meet its ongoing cash obligations and fund its investment program; loss of key employees or inability to identify and recruit new employees; future actions of regulatory bodies and other governmental authorities, including the FDA, the Department of Justice, the SEC, the New York Attorney General and foreign regulatory agencies, including the continued delay in lifting the warning letter at our Ahmedabad facility or proceedings related to the investigation related to foreign exchange gains and losses; the outcome of pending or future litigation, including the opioid litigation and litigation related to our internal investigation of foreign exchange gains and losses; the impacts of the material weakness identified as a result of the internal investigation and our remediation efforts, including the risk that we may experience additional material weaknesses or other deficiencies; proposed regulatory changes of the U.S. Department of Health and Human Services in kidney health policy and reimbursement, which may substantially change the U.S. end stage renal disease market and demand for our peritoneal dialysis products, necessitating significant multi-year capital expenditures, which are difficult to estimate in advance; 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 Cheetah Medical and Seprafilm Adhesion Barrier from Sanofi); 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; fluctuations in foreign exchange and interest rates; the ability to enforce owned or in-licensed patents or the prevention or restriction of the manufacture, sale or use of products or technology affected by patents of third parties; global, trade and tax policies; any change in laws 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; and other risks identified in Baxter’s most recent filing on Form 10-K and other SEC filings, all of which are available on Baxter’s website. Baxter does not undertake to update its forward-looking statements unless otherwise required by the federal securities laws.

2020 Annual Meeting of Stockholders

May 5, 2020

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2020 Annual Meeting Proposals

Election of Directors Advisory Vote to Approve Named Executive Officer Compensation Ratification of Appointment of Independent Registered Public Accounting Firm Independent Board Chairman Right to Act by Written Consent

PROPOSAL PROPOSAL PROPOSAL PROPOSAL PROPOSAL

1 2 3 4 5

2020 Annual Meeting of Stockholders

May 5, 2020

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Advancing our Mission

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Rising to the Challenge of COVID-19

► Maximizing production of critical medical products to support increased patient care levels ► Protecting employee health and safety through enhanced infection control procedures ► Actively recruiting up to 2,000 additional permanent and temporary roles globally ► Donating $2M+ to date to global relief partners through The Baxter International Foundation

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Baxter Profile: A Diversified Global Portfolio1

Americas 54% EMEA 26% Asia Pacific 20%

$1 $11. 1.4B 4B

2019 Global Revenue

~$3.6B ~$2.8B ~$2.2B ~$0.9B ~$0.9B ~$0.5B

1Sales and related figures represent FY 2019; Other sales represent ~$0.5B.

Clinical Nutrition Renal Care Medication Delivery Pharmaceuticals Advanced Surgery Acute Therapies

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Full Year 2019 Financial Snapshot1

Global Reported Sales

+5%

Operational Growth2

Adjusted Operating Margin

+140

Basis Points

Adjusted Diluted Earnings per Share

+14%

Free Cash Flow3

FY 20 2018 18 FY 20 2019 19

$2.9 .91 $3.3 .31

FY 20 2018 18 FY 20 2019 19

17.3% .3% 18 18.7% .7%

FY 20 2018 18 FY 20 2019 19

~$11.1B 1B ~$11.4B 4B

as restated as restated as restated

FY 20 2018 18 FY 20 2019 19

$1.4 1.4B $1.4 1.4B

as restated

1Non-GAAP financial metrics referenced in this slide include operational sales growth, adjusted operating margin, adjusted diluted EPS, and free cash flow. A reconciliation to comparable U.S. GAAP measures is available at

www.baxter.com. 2FY 2019 operational sales growth excludes the impact of foreign currency of approximately 3% and U.S. cyclophosphamide competition of approximately 0%; U.S. GAAP sales growth for the period was approximately 2% compared to FY 2018. 3Operating cash flows from continuing operations of $2,110 million in 2019 and $2,017 million in 2018 offset by capital expenditures of $696 million in 2019 and $659 million in 2018.

+4%

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Patient Safety and Quality: Our Top Priority

Investing in quality systems and processes Improving key quality metrics Strengthening relationships with global regulators Six FDA warning letters resolved since 2014 Sole remaining open letter:

• Ahmedabad, India

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Best Place to Work: Recognized for Excellence

Baxter’s inclusive culture and diverse workforce help advance our Mission and fuel innovation.

Select recognition highlights:

Baxter drives sustainability throughout its

• perations, and supports increased access

to care, disaster relief, and STEM education, among other efforts.

Select recognition highlights:

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Growth Through Innovation: Expanding our Impact

Multiple Avenues to Increase Patient Impact, Accelerate Growth

Driving growth through evidence generation, physician education, and targeted market investments

Market Development

Expanding beyond the core to unlock new therapies and markets

Enter Adjacencies

Executing on pipeline

• pportunities and

geographic expansion

Portfolio Innovation

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Growth Through Innovation: Expanding our Impact

Select Recent Highlights Include:

Planning in support of Advancing American Kidney Health Initiative Acquired Seprafilm Adhesion Barrier U.S. FDA approval for faster preparation of Floseal Hemostatic Matrix Launch of Sharesource 2.0 clinical portal U.S. launch of Myxredlin ready-to-use insulin for IV infusion U.S. launch of Clinolipid proprietary olive oil-based lipid emulsion U.S., Canadian launches of PrisMax system for CRRT Acquired Cheetah Medical, a leader in hemodynamic monitoring technologies

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Growth Through Innovation: Pipeline Momentum

New products, new indications and geographic expansion driving $1.7B in 2023 Sales1

1All references to “new products” and “launches” in this presentation include new product launches, line extensions and geographic expansions, unless

• therwise noted. New product sales figures reflect guidance provided at May 21, 2018 Investor Conference.

Accelerated pace of incremental and transformative innovation Culture of innovation with the right

• rganization and talent in place

Focused on successful execution of commercial launches Resources aligned with high-growth

• pportunities

2020+ Highlights

Expanded Pump Offerings Sharesource Analytics PIVA Specialized Monitoring Differentiated Molecules

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Industry Leading Performance: Operational Excellence

2016 2018 2020 2023 ~$ ~$0.4B ~$1.0B ~$1.1B ~$1.2B Portfolio Simplification Strategic Growth Continued Financial Discipline Operations Optimization

Realized $1.0B+ Cumulative Annual Savings to Date vs. 2015 Pursuing Further Opportunities for Operational Efficiency

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Industry Leading Performance: Capital Deployment

Investing in meaningful innovation and growth acceleration

• pportunities

Increased quarterly dividend to $0.245 per share; currently targeting ~35% dividend payout ratio of adjusted net income over time Executing strategic acquisitions and collaborations to generate enhanced returns Selective share repurchases to return value to shareholders

REINVEST IN BUSINESS DIVIDENDS M&A SHARE REPURCHASE1 Strategically Deploying Capital to Create Value for Investors

1As indicated on the April 30, 2020 earnings conference call, Baxter has temporarily suspended share repurchases during the course of the ongoing COVID-19 pandemic.

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Delivering Significant Value for Investors

~47% S&P HEALTH

CARE

~141% BAXTER ~51% S&P 500 ~51% DOW ~109% IHI

Total Shareholder Returns, 12/31/2015 – 5/1/20201

70 80 90 100 110 120 130 140 150 160 170 180 190 200 210 220 230 240 250 260 270 Dec-15 Feb-16 Apr-16 Jun-16 Aug-16 Oct-16 Dec-16 Feb-17 Apr-17 Jun-17 Aug-17 Oct-17 Dec-17 Feb-18 Apr-18 Jun-18 Aug-18 Oct-18 Dec-18 Feb-19 Apr-19 Jun-19 Aug-19 Oct-19 Dec-19 Feb-20 Apr-20 Indexed Return

1Bloomberg data as of 5/1/2020 market close.

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Continuing Momentum: 2020 and Beyond

► Ensuring responsiveness and agility in an uncertain market ► Increasing innovation to drive accelerated revenue growth ► Maintaining strong cadence of product launches and geographic expansions ► Realizing ongoing benefits of business transformation initiatives ► Strategically deploying capital to enhance value and improve profitability

2020 Annual Meeting of Stockholders

May 5, 2020