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Baxter's Second Quarter Sales and Earnings Exceed ExpectationsBaxter Raises Full-Year Guidance Reflecting Strong First-Half Operating Performance and Continued Momentum
DEERFIELD, Ill., July 20 /PRNewswire-FirstCall/ -- Baxter International Inc. (NYSE: BAX) today announced stronger-than-expected growth in sales and earnings for the second quarter and raised its full-year guidance to reflect the company's strong first-half operating performance and continued momentum. Excluding special items, Baxter reported second quarter income from continuing operations of $373 million, an increase of 21 percent from $309 million in 2005. On a GAAP basis, Baxter reported income from continuing operations of $309 million, compared to $324 million reported in the same period last year. Adjusted earnings per diluted share from continuing operations increased 16 percent to $0.57 per diluted share, compared to $0.49 in the prior-year period. GAAP earnings per diluted share from continuing operations of $0.47 compares to $0.51 per diluted share reported in the second quarter last year. The company's financial results reflect strong operational performance, better-than-expected sales, continued expansion of gross and operating margins, and lower interest expense. Excluding the impact of stock-option expense of approximately $0.02 per diluted share under SFAS No. 123-R, adjusted earnings per diluted share of $0.59 compares favorably with the guidance that Baxter previously provided for the quarter of $0.54 to $0.56 (which also excluded stock-option expense). Special items in the second quarter included a previously announced $64 million (or $0.10 per diluted share) after-tax charge associated with the COLLEAGUE Volumetric Infusion Pump remediation efforts. Special items impacting the second quarter 2005 results included an $80 million (or $0.12 per diluted share) after-tax benefit from adjustments to Baxter's restructuring charges and a $65 million (or $0.10 per diluted share) after-tax charge for COLLEAGUE remediation efforts. Baxter's worldwide sales totaled $2.6 billion in the second quarter and increased 3 percent, or 4 percent excluding the impact of foreign exchange. This compares favorably to the guidance the company previously provided of organic sales growth, which excluded the impact of foreign exchange, of 2 to 3 percent. Sales within the United States totaled $1.2 billion, an increase of 3 percent over the same period last year, and sales outside of the United States also grew 3 percent (or 5 percent excluding the impact of foreign exchange) to $1.5 billion in the quarter. Driving the company's sales performance was the BioScience business, with record quarterly sales of $1.1 billion, an increase of 13 percent. Momentum continued to build for several products used for the treatment of immune disorders and hemophilia, including Baxter's portfolio of intravenous immunoglobulin (IVIG) products and ADVATE [Antihemophilic Factor (Recombinant), Plasma/Albumin-Free Method (rAHF-PFM)] and specialty biosurgery products used in the areas of hemostasis, tissue sealing and tissue repair. Renal sales increased 2 percent to $516 million. Global peritoneal dialysis (PD) sales increased 5 percent (or 6 percent on an organic basis) as a result of growth in the number of patients using PD, a home-therapy for the treatment of end-stage renal disease, particularly in international markets. Offsetting this growth was a decline in lower-margin hemodialysis (HD) products. Medication Delivery sales were $1.0 billion, down 7 percent, primarily due to the COLLEAGUE infusion pump hold and generic drug competition. Research and development (R&D) spending totaled $146 million in the second quarter, an increase of 10 percent. The company has accelerated spending across all its businesses, with particular emphasis on its BioScience business where R&D spending increased by more than 15 percent over last year. "We are extremely pleased with our operational and financial performance in the first half of the year, as we realize the benefits from our ongoing margin improvement initiatives," said Robert L. Parkinson, Jr., chairman and chief executive officer. "With our financial results exceeding our first-half objectives, we now have additional flexibility to not only deliver growth in the near term, but to accelerate our investments in R&D and select marketing activities to drive future value for our shareholders." Baxter recently announced several initiatives that leverage the company's unique technology platforms and further expand its global presence. These initiatives include: -- U.S. Food and Drug Administration (FDA) approval and U.S. launch of an
ultra-high dosage strength of ADVATE for Hemophilia A, making it
easier for people requiring higher doses to administer ADVATE by
reducing both the infusion volume of drug solution and the storage
space; and the launch in Canada of GAMMAGARD Liquid [Immune Globulin
Intravenous (Human)] 10 % Solution.
-- A tender from the U.S. government, through a contract award to DVC
LLC, to develop cell-culture based influenza vaccines. Baxter will
develop seasonal and pandemic vaccines using the company's vero-cell
technology and has recently initiated a Phase I/II clinical trial to
test a candidate H5N1 pandemic influenza vaccine in Austria and
Singapore.
-- Tentative approvals from the FDA for Ondansetron Injection USP, a
generic version of GlaxoSmithKline's Zofran, in vial and premix
presentations.
-- The commercial availability of HYLENEX, a liquid injectable
formulation of recombinant human hyaluronidase, in the U.S.
Six-Month Results
For the first six months of 2006, Baxter's adjusted income from continuing operations was $655 million, or $1.00 per diluted share. On a GAAP basis, Baxter's income from continuing operations for the first half of 2006 totaled $591 million, or $0.90 per diluted share. For the first six months of 2006, Baxter's worldwide sales grew 2 percent to $5.1 billion, up from $5.0 billion in the same period last year. Excluding the impact of foreign exchange, organic sales growth for the first half of the year was 4 percent. Domestic sales totaled $2.2 billion, an increase of 2 percent over the same period last year, and international sales also grew 2 percent (or 5 percent excluding the impact of foreign exchange) to $2.8 billion. Cash flow from operations totaled $848 million for the first six months of the year, compared to $778 million in the same period in 2005. Free cash flow (cash flow from operations, less capital expenditures of $198 million in 2006) was $650 million for the first half of 2006, reflecting an improvement of approximately $35 million from the same period last year. "As we move into the second half of the year, we will continue to focus on improving our working capital management and driving a return-on-invested- capital discipline throughout the company," said Robert M. Davis, chief financial officer. "Given our strong balance sheet and cash flow generation, we have increased flexibility to balance business investments that enhance our longer-term growth with our continued commitment to return value to our shareholders using a disciplined capital-allocation framework." Third Quarter and Full-Year 2006 Guidance Given the company's strong financial performance in the first six months of the year, Baxter is raising its full-year 2006 guidance. For full-year 2006, the company now expects to achieve organic sales growth of approximately 6 percent, and earnings per diluted share of $2.13 to $2.17, before special items (or $2.03 to $2.07 on a GAAP basis). Excluding special items and the impact of stock-option expense of approximately $0.08 per diluted share, Baxter expects adjusted earnings per diluted share of $2.21 to $2.25, which compares favorably to the company's most recent full-year earnings guidance of $2.10 to $2.16 on a comparable basis. In addition, the company now expects cash flow from operations for full-year 2006 to approach $2.0 billion, with free cash flow in excess of $1.4 billion (after approximately $550 million of anticipated capital expenditures). For the third quarter of 2006, the company expects organic sales (excluding the impact of foreign exchange) to grow 6 to 7 percent, and earnings per diluted share of $0.55 to $0.57, before any special items. A webcast of Baxter's second 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. CDT on July 20, 2006. 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: 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; demand for and market acceptance risks for new and existing products, such as ADVATE, and other technologies; 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; inventory reductions or fluctuations in buying patterns by wholesalers or distributors; 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; reimbursement policies of government agencies and private payers; 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 June 30, 2006 and 2005
(unaudited)
(in millions, except per share and percentage data)
Three Months Ended
June 30,
-----------------------
2006 2005 Change
CONTINUING OPERATIONS: -------- ------- -------
----------------------
NET SALES $2,649 $2,577 3%
GROSS PROFIT 1,155 1,036 11%
% of Sales 43.6% 40.2% 3.4 pts
MARKETING AND ADMINISTRATIVE EXPENSES 582 537 8%
% of Sales 22.0% 20.8% 1.2 pts
RESEARCH AND DEVELOPMENT EXPENSES 146 133 10%
RESTRUCTURING ADJUSTMENTS - (104) (100%)
--------------------------------------------------------------------------
OPERATING INCOME 427 470 (9%)
--------------------------------------------------------------------------
% of Sales 16.1% 18.2% (2.1 pts)
INTEREST, NET 10 33 (70%)
OTHER EXPENSE, NET 19 25 (24%)
--------------------------------------------------------------------------
INCOME BEFORE INCOME TAXES 398 412 (3%)
INCOME TAX EXPENSE 89 88 1%
--------------------------------------------------------------------------
INCOME FROM CONTINUING OPERATIONS $309 $324 (5%)
==========================================================================
BASIC EPS FROM CONTINUING OPERATIONS $0.47 $0.52 (10%)
==========================================================================
DILUTED EPS FROM CONTINUING
OPERATIONS $0.47 $0.51 (8%)
==========================================================================
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING
Basic 654 621
Diluted 659 626
ADJUSTED INCOME FROM CONTINUING
OPERATIONS (excluding certain items) $373 (1) $309 (1)
ADJUSTED DILUTED EPS FROM CONTINUING
OPERATIONS (excluding certain items) $0.57 (1) $0.49 (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
second quarter of 2006 was $10 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 second
quarter of 2005 was $16 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.
Consolidated Statements of Income
Three Months Ended June 30, 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 adjustments and reconciliation of GAAP to Non-GAAP
----------------------------------------------------------------------
As previously announced, the Company's GAAP results for the three months ended June 30, 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 $427 $89 $309 $0.47
COLLEAGUE infusion
pump charge (A) 76 12 64 0.10
-----------------------------------------------
Excluding specified
items $503 $101 $373 $0.57
===============================================
Adjusted operating
income % 19.0%
(A) Included in the Gross Profit line in the accompanying consolidated
statement of income. Excluding this item, adjusted gross profit is
$1,231 million and the adjusted gross profit percentage is 46.5%
2005 description of adjustments and reconciliation of GAAP to Non-GAAP
----------------------------------------------------------------------
As previously announced, the Company's GAAP results for the three months ended June 30, 2005 included a charge related to COLLEAGUE infusion pumps, and a credit related to restructuring adjustments, which impacted the GAAP results as follows: Income Income from
Operating Tax Continuing Diluted
Income Expense Operations EPS
------------------------------------------------
GAAP $470 $88 $324 $0.51
COLLEAGUE infusion
pump charge (B) 77 12 65 0.10
Restructuring
adjustments (C) (104) (24) (80) (0.12)
-------------------------------------------------
Excluding specified
items $443 $76 $309 $0.49
=================================================
Adjusted operating
income % 17.2%
(B) Included in the Gross Profit line in the accompanying consolidated
statement of income. Excluding this item, adjusted gross profit is
$1,113 million and the adjusted gross profit percentage is 43.2%.
(C) Included in the Restructuring Adjustments line in the accompanying
consolidated statement of income.
BAXTER INTERNATIONAL INC.
Consolidated Statements of Income
Six Months Ended June 30, 2006 and 2005
(unaudited)
(in millions, except per share and percentage data)
Six Months Ended
June 30,
----------------------
CONTINUING OPERATIONS: 2006 2005 Change
---------------------- ------- ------ -------
NET SALES $5,058 $4,960 2%
GROSS PROFIT 2,207 2,005 10%
% of Sales 43.6% 40.4% 3.2 pts
MARKETING AND ADMINISTRATIVE EXPENSES 1,108 1,020 9%
% of Sales 21.9% 20.6% 1.3 pts
RESEARCH AND DEVELOPMENT EXPENSES 284 266 7%
RESTRUCTURING ADJUSTMENTS - (104) (100%)
--------------------------------------------------------------------------
OPERATING INCOME 815 823 (1%)
--------------------------------------------------------------------------
% of Sales 16.1% 16.6% (0.5 pts)
INTEREST, NET 28 64 (56%)
OTHER EXPENSE, NET 35 49 (29%)
--------------------------------------------------------------------------
INCOME BEFORE INCOME TAXES 752 710 6%
INCOME TAX EXPENSE 161 162 (1%)
--------------------------------------------------------------------------
INCOME FROM CONTINUING OPERATIONS $591 $548 8%
==========================================================================
BASIC EPS FROM CONTINUING OPERATIONS $0.91 $0.88 3%
==========================================================================
DILUTED EPS FROM CONTINUING
OPERATIONS $0.90 $0.88 2%
==========================================================================
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING
Basic 648 620
Diluted 654 624
--------------------------------------------------------------------------
ADJUSTED INCOME FROM CONTINUING
OPERATIONS (excluding certain items) $655 (1) $533 (1)
ADJUSTED DILUTED EPS FROM CONTINUING
OPERATIONS (excluding certain items) $1.00 (1) $0.85 (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
six months ended June 30, 2006 was $20 million, or $0.03 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 six months ended June 30, 2005 was $28 million, or $0.05
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.
Consolidated Statements of Income
Six Months Ended June 30, 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 adjustments and reconciliation of GAAP to Non-GAAP
----------------------------------------------------------------------
As previously announced, the Company's GAAP results for the six months ended June 30, 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 $815 $161 $591 $0.90
COLLEAGUE infusion
pump charge (A) 76 12 64 0.10
------------------------------------------------
Excluding specified
items $891 $173 $655 $1.00
===============================================
Adjusted operating
income % 17.6%
(A) Included in Gross Profit line in the accompanying consolidated
statement of income. Excluding this item, adjusted gross profit is
$2,283 million and the adjusted gross profit percentage is 45.1%.
2005 description of adjustments and reconciliation of GAAP to Non-GAAP
----------------------------------------------------------------------
As previously announced, the Company's GAAP results for the six months ended June 30, 2005 included a charge related to COLLEAGUE infusion pumps, and a credit related to restructuring adjustments, which impacted the GAAP results as follows: Income Income from
Operating Tax Continuing Diluted
Income Expense Operations EPS
------------------------------------------------
GAAP $823 $162 $548 $0.88
COLLEAGUE infusion
pump charge (B) 77 12 65 0.10
Restructuring
adjustments (C) (104) (24) (80) (0.13)
-------------------------------------------------
Excluding specified
items $796 $150 $533 $0.85
=================================================
Adjusted operating
income % 16.0%
(B) Included in the Gross Profit line in the accompanying consolidated
statement of income. Excluding this item, adjusted gross profit is
$2,082 million and the adjusted gross profit percentage is 42.0%.
(C) Included in the Restructuring Adjustments line in the accompanying
consolidated statement of income.
BAXTER INTERNATIONAL INC.
Condensed Consolidated Balance Sheets
(unaudited)
(in millions)
June 30, December 31,
2006 2005
---------- -------------
ASSETS
Cash and equivalents $1,061 $841
Receivables 1,754 1,766
Inventories 2,020 1,925
Other current assets 592 584
---------- -------------
Total current assets 5,427 5,116
Property, plant and equipment, net 4,159 4,144
Other long-term assets 3,421 3,467
--------------------------------------------------------------------------
Total assets $13,007 $12,727
==========================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
Short-term debt $115 $924
Other current liabilities 2,846 3,241
Long-term debt 2,244 2,414
Other long-term liabilities 1,937 1,849
Shareholders' equity 5,865 4,299
-------------------------------------------------------------------------
Total liabilities and
shareholders' equity $13,007 $12,727
=========================================================================
BAXTER INTERNATIONAL INC.
Cash Flows from Operations and Changes in Net Debt
(unaudited)
($ in millions)
Cash Flows from Operations
(Brackets denote cash outflows) Three Months Ended Six Months Ended
June 30, June 30,
------------------------------------
2006 2005 2006 2005
--------- -------- ------- ------
Net income $309 $322 $591 $548
Adjustments
Depreciation and amortization 146 145 285 292
Deferred income taxes 16 96 18 119
Stock compensation 20 3 38 4
Infusion pump charges 76 77 76 77
Restructuring adjustments - (104) - (104)
Other 4 10 22 26
Changes in balance sheet items
Receivables (23) (25) 15 35
Inventories 13 72 (50) 90
Accounts payable and accrued
liabilities (32) (83) (137) (342)
Restructuring payments (6) (31) (25) (73)
Other 20 24 15 106
--------------------------------------------------------------------------
Cash flows from operations $543 $506 $848 $778
==========================================================================
--------------------------------------------------------------------------
Changes in Net Debt
--------------------------------------------------------------------------
Increase (decrease) Three Months Ended Six Months Ended
June 30, June 30,
------------------------------------
2006 2005 2006 2005
-------- ------- ------- --------
Net debt, beginning of period $1,524 $3,493 $2,497 $3,185
Cash flows from operations (543) (506) (848) (778)
Capital expenditures 122 98 198 163
Dividends - - 363 359
Issuances of common stock - - (1,249) -
Purchases of treasury stock 221 - 392 -
Other, including the effect of
exchange rate changes (26) (24) (55) 132
--------------------------------------------------------------------------
Decrease in net debt (226) (432) (1,199) (124)
--------------------------------------------------------------------------
Net debt, June 30 $1,298 $3,061 $1,298 $3,061
==========================================================================
--------------------------------------------------------------------------
Key statistics, June 30:
Days sales outstanding 52.1 58.4 52.1 58.4
Inventory turns 2.7 2.9 2.7 2.9
Net-debt-to-capital ratio (A) 18.1% 30.1% 18.1% 30.1%
--------------------------------------------------------------------------
(A) The decrease in the debt-to-capital ratio from June 30, 2005 to June
30, 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. The
net-debt-to-capital ratio at June 30, 2005 was calculated in
accordance with the company's primary credit agreements, which gave
70% equity credit to the company's $1.25 billion equity units debt
outstanding on that date (the majority of which was repurchased and
retired in the fourth quarter of 2005). Refer to the company's Form
10-K for the year ended December 31, 2005 for additional information
regarding the equity units.
Baxter International Inc.
Net Sales from Continuing Operations
Period Ended June 30, 2006
(unaudited)
($ in millions)
% Growth % Growth
@ @
Q2 Q2 Actual Constant
2006 2005 Rates Rates
---------------------------------------
BioScience
United States $538 $438 23% 23%
International 583 552 6% 8%
Total $1,121 $990 13% 15%
--------------------------------------------------------------------------
Medication Delivery
United States $552 $619 (11%) (11%)
International 460 464 (1%) -%
Total $1,012 $1,083 (7%) (6%)
--------------------------------------------------------------------------
Renal
United States $97 $99 (2%) (2%)
International 419 405 3% 5%
Total $516 $504 2% 4%
--------------------------------------------------------------------------
Baxter International Inc.
United States $1,187 $1,156 3% 3%
International 1,462 1,421 3% 5%
Total $2,649 $2,577 3% 4%
--------------------------------------------------------------------------
% Growth % Growth
@ @
YTD YTD Actual Constant
2006 2005 Rates Rates
---------------------------------------
BioScience
United States $1,012 $836 21% 21%
International 1,109 1,056 5% 9%
Total $2,121 $1,892 12% 15%
--------------------------------------------------------------------------
Medication Delivery
United States $1,043 $1,171 (11%) (11%)
International 885 890 (1%) 2%
Total $1,928 $2,061 (6%) (5%)
--------------------------------------------------------------------------
Renal
United States $191 $193 (1%) (1%)
International 818 814 -% 3%
Total $1,009 $1,007 -% 2%
--------------------------------------------------------------------------
Baxter International Inc.
United States $2,246 $2,200 2% 2%
International 2,812 2,760 2% 5%
Total $5,058 $4,960 2% 4%
--------------------------------------------------------------------------
Baxter International Inc.
Key Product Line Sales
Period Ended June 30, 2006
(unaudited)
($ in millions)
% Growth % Growth
@ @
Q2 Q2 Actual Constant
2006 2005(1) Rates Rates
------------------------------------
BioScience
Recombinants $437 $397 10% 12%
Plasma Proteins (2) 213 170 25% 27%
Antibody Therapy 199 93 114% 114%
BioSurgery (3) 79 70 13% 14%
Transfusion Therapies 126 140 (10%) (9%)
Other (4) 67 120 (44%) (43%)
--------------------------------------------------------------------------
Total BioScience $1,121 $990 13% 15%
--------------------------------------------------------------------------
Medication Delivery
IV Therapies (5) $323 $312 4% 4%
Drug Delivery 213 226 (6%) (5%)
Infusion Systems 204 245 (17%) (17%)
Anesthesia 258 282 (9%) (7%)
Other (6) 14 18 (22%) (28%)
--------------------------------------------------------------------------
Total Medication Delivery $1,012 $1,083 (7%) (6%)
--------------------------------------------------------------------------
Renal
PD Therapy $408 $390 5% 6%
HD Therapy 108 114 (5%) (4%)
--------------------------------------------------------------------------
Total Renal (7) $516 $504 2% 4%
--------------------------------------------------------------------------
TOTAL BAXTER $2,649 $2,577 3% 4%
==========================================================================
% Growth % Growth
@ @
YTD YTD Actual Constant
2006 2005(1) Rates Rates
------------------------------------
BioScience
Recombinants $811 $741 9% 13%
Plasma Proteins (2) 405 340 19% 21%
Antibody Therapy 382 182 110% 112%
BioSurgery (3) 148 136 9% 11%
Transfusion Therapies 250 273 (8%) (7%)
Other (4) 125 220 (43%) (41%)
--------------------------------------------------------------------------
Total BioScience $2,121 $1,892 12% 15%
--------------------------------------------------------------------------
Medication Delivery
IV Therapies (5) $627 $608 3% 5%
Drug Delivery 408 430 (5%) (4%)
Infusion Systems 399 475 (16%) (16%)
Anesthesia 470 513 (8%) (7%)
Other (6) 24 35 (31%) (31%)
--------------------------------------------------------------------------
Total Medication Delivery $1,928 $2,061 (6%) (5%)
--------------------------------------------------------------------------
Renal
PD Therapy $796 $767 4% 6%
HD Therapy 213 240 (11%) (10%)
--------------------------------------------------------------------------
Total Renal (7) $1,009 $1,007 -% 2%
--------------------------------------------------------------------------
TOTAL BAXTER $5,058 $4,960 2% 4%
==========================================================================
(1) Prior year sales data has been reclassified to reflect the changes
that are described in notes 2, 3, 4 and 7 below.
(2) Includes plasma-derived hemophilia (FVII, FVIII, FIX and FEIBA),
albumin, and certain other plasma-based products. Sales of
Tisseel, sales of plasma to third parties, and contract manufacturing
revenues were previously reported in Plasma Proteins,
and are now reported in other product lines, as detailed below.
(3) Includes sales of Tisseel and FloSeal/CoSeal, which were previously
reported in Plasma Proteins and Other, respectively.
(4) Principally includes vaccines and sales of plasma to third parties.
The sales of plasma to third parties were previously reported in
Plasma Proteins. The prior year sales include contract manufacturing
revenues.
(5) Principally includes intravenous solutions and nutritional products.
(6) Principally includes other hospital-distributed products.
(7) Sales of pharmaceutical and certain other products, which were
previously reported in Other, are now reported in PD Therapy.
Baxter International Inc.
Key Product Line Sales -- US/International
Period Ended June 30, 2006
(unaudited)
($ in millions)
Q2 2006 Q2 2005(1)
-------------------------------------------------
Inter- Inter-
US national Total US national Total
BioScience
Recombinants $194 $243 $437 $170 $227 $397
Plasma Proteins (2) 87 126 213 55 115 170
Antibody Therapy 148 51 199 50 43 93
BioSurgery (3) 44 35 79 38 32 70
Transfusion Therapies 59 67 126 68 72 140
Other (4) 6 61 67 57 63 120
-------------------------------------------------------------------------
Total BioScience $538 $583 $1,121 $438 $552 $990
-------------------------------------------------------------------------
Medication Delivery
IV Therapies (5) $108 $215 $323 $98 $214 $312
Drug Delivery 137 76 213 148 78 226
Infusion Systems 123 81 204 163 82 245
Anesthesia 176 82 258 204 78 282
Other (6) 8 6 14 6 12 18
-------------------------------------------------------------------------
Total Medication
Delivery $552 $460 $1,012 $619 $464 $1,083
-------------------------------------------------------------------------
Renal
PD Therapy $68 $340 $408 $65 $325 $390
HD Therapy 29 79 108 34 80 114
-------------------------------------------------------------------------
Total Renal (7) $97 $419 $516 $99 $405 $504
-------------------------------------------------------------------------
TOTAL BAXTER $1,187 $1,462 $2,649 $1,156 $1,421 $2,577
=========================================================================
% Growth
-----------------------------
Inter-
US national Total
-----------------------------
BioScience
Recombinants 14% 7% 10%
Plasma Proteins (2) 58% 10% 25%
Antibody Therapy 196% 19% 114%
BioSurgery (3) 16% 9% 13%
Transfusion Therapies (13%) (7%) (10%)
Other (4) (89%) (3%) (44%)
-------------------------------------------------------------------------
Total BioScience 23% 6% 13%
-------------------------------------------------------------------------
Medication Delivery
IV Therapies (5) 10% -% 4%
Drug Delivery (7%) (3%) (6%)
Infusion Systems (25%) (1%) (17%)
Anesthesia (14%) 5% (9%)
Other (6) 33% (50%) (22%)
-------------------------------------------------------------------------
Total Medication Delivery (11%) (1%) (7%)
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Renal
PD Therapy 5% 5% 5%
HD Therapy (15%) (1%) (5%)
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Total Renal (7) (2%) 3% 2%
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TOTAL BAXTER 3% 3% 3%
=========================================================================
(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.
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