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 AmericaEurope, Middle East & AfricaLatin America & CanadaAsia Pacific

Acquisitions

IndustryMedical Instruments and Supplies Industry -106.6 billion -5.8% growth rateHealthcare 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 effectHealthcare ReformTax increase in 2013

Management & Employees Baxter’s management guidance

Svigals Portfolio: 45 shares currently($50.13/ share) 31.28% unrealized gainTall Firs Portfolio: 340 BAX shares purchased in 2003-04 ($27-28/ share) about 120% unrealized gain

Portfolio History

DownsideFDA and EMA risk of approval. SuppliersUpcoming 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

FMS30%

COV22%

MDT5%

BDX43%

Discounted Cash Flow Analysis

-BetaBeta SD Weighting

3 year Daily 0.76 20.00%

5 year weekly 0.54 13.00%

1 year daily 0.81 18.00%

5 year monthly 0.49 5.00%

Vasicek 3 year daily 0.79 24.00%

Hamada 3 year daily 0.80 20.00%

Baxter International Inc. Beta 0.74

-Revenue Model-Cost Of Goods Sold

-SG&A-Cap Ex-Tax Rate

Weights: DCF-70%Comp-30%

Implied Price: $70.94

Questions?

Hold

RecommendationLong term growth80 years long Healthcare leaderGlobal expansionsDiverse