Webcast Q4 Earnings Investor Call January 25, 2001 FREE RealPlayer G2 Required

BAXTER CONTINUES MOMENTUM WITH STRONG GROWTH IN EARNINGS AND SALES Baxter's Earnings Escalate 17 Percent in the 4th Quarter and for Full-Year 2000 Company Generates Nearly $600 Million in Cash Flow in 2000 Baxter Well-Positioned to Achieve 2001 Commitments DEERFIELD, Ill., January 25, 2001 -- Baxter International Inc. (NYSE:BAX) today reported strong earnings growth of 17 percent for the fourth quarter. Net earnings for the quarter totaled $270 million, an increase from the $231 million reported last year. Earnings per diluted share grew 15 percent to 90 cents, from 78 cents last year . "We generated great momentum and solid growth across our entire business portfolio in the fourth quarter as well as for the full year," said Harry M. Jansen Kraemer, Jr., chairman and chief executive officer. Baxter's sales advanced 15 percent in the quarter, excluding the impact of foreign exchange. After the impact of foreign exchange, Baxter's sales grew 9 percent to $1.93 billion, up from the $1.77 billion for the same period last year. Domestic sales in the quarter increased 13 percent, while international sales rose 5 percent (or 17 percent excluding the impact of foreign exchange). Sales grew across all of Baxter's businesses, with BioScience achieving 15 percent growth, I.V. Systems/Medical Products achieving 4 percent growth, and Renal achieving 9 percent growth. BioScience's sales were $690 million for the fourth quarter, driven by strong sales of recombinant and plasma-derived clotting factors used in the treatment of hemophilia, immune globulins used in the treatment of certain immune disorders, and vaccines. Specifically, sales of Recombinate Antihemophilic Factor (rAHF) grew approximately 20 percent including the impact of foreign exchange in the quarter (or in excess of 25 percent excluding the impact of foreign exchange). Baxter's I.V. Systems/Medical Products sales in the quarter were $750 million, with anesthesia products and electronic infusion pumps fueling the business' growth. The company's Renal business reported sales of $492 million in the quarter, boosted by the company's acquisition of Althin Medical and increased sales of hemodialysis products. Full-Year 2000 Results "For the seventh consecutive year, we met our earnings and cash flow commitments," Kraemer said. Baxter's commitments for 2000 were to achieve earnings growth in the mid-teens, sales growth of approximately 10 percent and generate at least $500 million in cash flow. Baxter's earnings for 2000 rose 17 percent to $915 million, up from the $779 million reported last year. Earnings per diluted share rose 16 percent to $3.06, from the $2.64 reported last year. For the full year, Baxter's sales grew 8 percent (or 12 percent excluding the impact of foreign exchange) to $6.9 billion, up from the $6.4 billion reported last year. Domestic sales rose 9 percent for the year, while international sales advanced 7 percent (or 14 percent excluding the impact of foreign exchange). Sales from the company's BioScience business grew 8 percent in 2000 to $2.4 billion. Baxter's I.V. Systems/Medical Products business sales totaled $2.7 billion for the year, an increase of 8 percent from the prior year. Renal sales grew 9 percent in 2000, to $1.8 billion. Baxter generated $588 million in operational cash flow for the year, after investing more than $1 billion in research and development and capital expenditures. 2000 Highlights On March 31, 2000, Baxter successfully completed its spin-off of Edwards Lifesciences Corporation (NYSE:EW) as a separate publicly held company. Baxter shareholders received one share of Edwards Lifesciences stock for each five shares of Baxter stock they owned on March 29. Edwards Lifesciences designs, develops and markets a comprehensive line of products and services to treat late-stage cardiovascular disease. Baxter, in collaboration with Cerus Corporation, made significant progress in the development of products for pathogen inactivation of blood components. During 2000, the companies submitted a CE Mark application for European approval of the Intercept Platelet System, initiated a U.S. Phase 1c study of the Intercept Red Cell System, and continued to enroll patients in a U.S. Phase III study for the Intercept Plasma System. Baxter announced $400 million in expansions and upgrades to its BioScience facilities in California, Switzerland and Austria to provide greater flexibility in manufacturing, additional production capacity for the company's biopharmaceuticals and vaccines and alignment of research and development priorities. As part of these efforts, Baxter began construction of a new state-of-the-art plasma processing facility in Los Angeles and made significant progress in construction of a multi-product recombinant protein manufacturing facility in Neuchatel, Switzerland. Baxter's BioScience business received U.S. Food and Drug Administration (FDA) licensure for a second production suite (Suite B) at its Thousand Oaks, California facility. The company also received European approval for Suite B and an additional production suite (Suite C) later in the year. These approvals allowed the company to increase production of its Recombinate Antihemophilic Factor (rAHF), which is produced by recombinant DNA technology for people with hemophilia. Baxter and Arriva Pharmaceuticals (formerly known as AlphaOne Pharmaceuticals) entered into a collaboration on the development of an inhaled, recombinant alpha 1-antitrypsin ("rAAT") product for the treatment of hereditary emphysema, and other pulmonary indications, including asthma, cystic fibrosis and chronic obstructive pulmonary disease. Baxter announced a collaboration with Pharming Group on the development of recombinant human C1 inhibitor to treat hereditary angiodema, a potentially fatal disease that results in the swelling of tissues and organs. Baxter entered into a strategic alliance with Cambridge, UK-based Acambis Plc (formerly known as Peptide Therapeutics Group) that encompasses several agreements to position each company in the development and commercialization of their respective vaccine pipelines. Baxter and XOMA announced a collaboration in the development of NEUPREX® (rBPI21) for certain anti-bacterial and anti-endotoxin indications. During the year, Baxter completed its acquisitions of Althin Medical A.B., a leading manufacturer of hemodialysis products, and North American Vaccine, Inc. Within weeks of completion of its acquisition of North American Vaccine, the company received market authorization from the United Kingdom Medicines Control Agency for NeisVac-C, a group C meningococcal vaccine. Baxter made significant progress on several e-business and e-health initiatives in 2000, with the formation of the Global Healthcare Exchange in collaboration with other leading health care manufacturers, and the launch of several on-line educational tools for patients and clinicians, including www.kidneydirections.com, a patient education website dedicated to increasing awareness of kidney disease and treatment options, www.tissuesealing.com and www.nutriforum.com. Late in the year, Baxter signed an agreement to acquire Sera-Tec Biologicals Limited Partnership, which owns and operates 80 FDA-licensed plasmapheresis centers in 28 states, and a central testing laboratory. The transaction is expected to close within the next few weeks. Positioned Well to Accelerate Growth in 2001 and Beyond "We accomplished a great deal in 2000 and achieved many significant milestones, including the successful spin-off of Edwards Lifesciences, several important acquisitions and alliances, advances in our product pipeline and solid financial performance. These achievements and initiatives position us extremely well to accelerate growth in 2001 and beyond," said Kraemer. "For 2001, Baxter expects to accelerate its sales growth to the low double digits and once again generate a minimum of $500 million in operational cash flow. We expect to achieve earnings growth in the low double digits for 2001. However, if the Euro remains at current levels or strengthens further, our sales and earnings growth in 2001 will be stronger," Kraemer explained. Baxter International Inc. is a global medical products and services company that provides critical therapies for people with life-threatening conditions. Baxter's products and services in bioscience (biopharmaceuticals and blood collection, separation and storage devices), medication delivery and renal therapy are used by health-care providers and their patients in more than 100 countries. A web cast of Baxter's fourth quarter conference call for investors can be accessed live from a link on Baxter's web site at www.baxter.com beginning at 10:00 a.m. CST on January 25, 2001. The company will be making investor presentations on the following dates during the first quarter of 2001: February 1, February 8, March 1, March 15 and March 27. Please visit Baxter's web site for additional information regarding web casts of these events. (Baxter and Recombinate are trademarks of Baxter International Inc.) This news release contains forward-looking statements that involve risks and uncertainties, including technological advances in the medical field, product demand and market acceptance, the effect of economic conditions, actions of regulatory bodies, the impact of competitive products and pricing, foreign currency exchange rates and other risks detailed in the company's filings with the Securities and Exchange Commission. These forward-looking statements are based on estimates and assumptions made by management of the company and are believed to be reasonable, though are inherently uncertain and difficult to predict. Actual results or experience could differ materially from the forward-looking statements.

BAXTER INTERNATIONAL INC. Consolidated Statements of Income of Continuing Operations (Unaudited) (A)
(in millions, except per share data)			Three Months Ended December 31,						Twelve Months Ended December 31,
			2000		1999		% Growth		2000		1999		% Growth
Net sales			$1,932		$1,769		9%		$6,896		$6,380		8%
Costs and expenses
	Cost of goods sold		1,065		985		8%		3,833		3,568		7%
	Marketing and administrative expenses		364		360		1%		1,343		1,311		2%
	Research and development expenses		106		90		18%		379		332		14%
	IPR&D and acquisition-related charges		--		--		N/A		286		--		N/A
	Special charges (B)		13		--		N/A		13		--		N/A
	Goodwill amortization		11		6		83%		31		19		63%
Operating income			373		328		14%		1,011		1,150		(12%)
	Interest, net		26		19		37%		85		87		(2%)
	Other expense (income)		(17)		(4)		325%		(20)		11		(282%)
Income before income taxes			364		313		16%		946		1,052		(10%)
	Income tax expense		94		82		15%		208		273		(24%)
Net income			$270		$231		17%		$738		$779		(5%)
Net income excluding IPR&D and
	acquisition-related charges		$270		$231		17%		$915		$779		17%
Earnings per basic common share:
	Before IPR&D and acquisition-related charges		$0.92		$0.80		15%		$3.13		$2.69		16%
	IPR&D and acquisition-related charges		--		--				(0.61)		--
	Total		$0.92		$0.80				$2.52		$2.69
Earnings per diluted common share:
	Before IPR&D and acquisition-related charges		$0.90		$0.78		15%		$3.06		$2.64		16%
	IPR&D and acquisition-related charges		--		--				(0.59)		--
	Total		$0.90		$0.78				$2.47		$2.64
Weighted average number of common shares outstanding
	Basic		294		291				292		290
	Diluted		301		296				299		295
			2000		1999		Change		2000		1999		Change
RATIOS
	Gross margin		44.9%		44.3%		0.6 points		44.4%		44.1%		0.3 points
	Marketing and administrative expenses		18.8%		20.4%		(1.6) points		19.5%		20.5%		(1.0) point
	Operating income *		19.3%		18.5%		0.8 points		18.8%		18.0%		0.8 points
	* Before second quarter 2000 IPR&D and acquisition-related charges.
(A)	These statements of income exclude the results of the cardiovascular business, which was distributed to shareholders on March 31, 2000 in a tax-free spin-off, and the first quarter 1999 $27 million net-of-tax cumulative effect of a change in accounting principle relating to the adoption of AICPA Statement of Position 98-5, "Reporting on the Costs of Start-up Activities."
(B)	Special charges include a charge of $42 million for exit and other reorganization costs, net of $29 million of additional insurance recoveries relating to litigation.

Baxter International Period Ending December 31, 2000 (Unaudited)
	Actual
($ in Millions)	Q4 2000	Q4 1999	% growth	% growth at constant rates
Renal
Domestic	120	106	13%	13%
International	372	346	7%	14%
Total	492	452	9%	14%
IV Systems/Medical Products
Domestic