RNS Number:7843R
Baxter International Inc
06 November 2003










FOR IMMEDIATE RELEASE


Media contacts:            Deborah Spak, (847) 948-2349

                           Liz Shea, (847) 948-3297


Investor contacts:         Neville Jeharajah, (847) 948-2875

                           Mary Kay Ladone, (847) 948-3371



BAXTER REPORTS THIRD QUARTER SALES GROWTH OF

NINE PERCENT


            Company Generates Year-to-Date Cash Flow of $668 Million


                   Baxter Reiterates Full Year 2003 Guidance



DEERFIELD, Ill., October 16, 2003 -- Baxter International Inc. (NYSE: BAX) today
reported its third quarter results, with sales growth of nine percent and
earnings per diluted share from continuing operations of $0.47.

Sales in the third quarter totaled $2.22 billion, with foreign exchange
favorably impacting sales by three percent. Baxter's sales within the United
States increased 10 percent to $1.07 billion, while sales outside the United
States grew nine percent (including a seven percent benefit from foreign
exchange) to $1.15 billion. In the third quarter, Medication Delivery sales grew
16 percent to $948 million, BioScience sales grew 6 percent to $820 million and
Renal sales grew 4 percent to $451 million. Contributing to the growth in the
quarter were strong sales of anesthesia, biosurgery, drug delivery and IV
therapy products and record sales of recombinant clotting factor, which rose 14
percent in the quarter.

Income from continuing operations totaled $278 million or $0.47 per diluted
share in the third quarter. The third quarter results compare to income from
continuing operations of $317 million, or $0.51 per diluted share, in the same
period last year.

"The third quarter financial results were in line with our expectations," said
Harry M. Jansen Kraemer, Jr., chairman and chief executive officer. "The actions
we have taken to improve our operational efficiency and simplify our capital
structure, together with the launch of new products, position us well to achieve
our goals for the year."

Recent Highlights

During the third quarter, Baxter received FDA approval for the company's
innovative hemophilia therapy ADVATE Antihemophilic Factor (Recombinant) Plasma/
Albumin-Free Method (rAHF-PFM), which offers patients the first and only factor
VIII made without any added human or animal plasma proteins or albumin in the
cell culture process, purification and final formulation, thereby eliminating
the risk of infections caused by viruses that may be carried in these proteins.

Also during the third quarter, Baxter's vaccines business was awarded a $10
million contract from the National Institutes of Health for the development of a
vaccine against Severe Acute Respiratory Syndrome (SARS). Separately, Baxter
announced it will collaborate with Avecia, one of Europe's largest privately
owned specialty chemical companies and a leader in biotechnology-derived
medicines and vaccines, to provide regulatory expertise, commercial services and
support and finishing and final packaging of a recombinant anthrax vaccine being
developed under a $71 million contract award to Avecia from the U.S.
government's National Institute of Allergy and Infectious Disease.

Within its Medication Delivery business, Baxter was awarded contracts in the
third quarter from Premier, Inc., the largest alliance of hospitals and health
systems in the United States, for Baxter's intravenous solutions, medications
and nutrition products, infusion pumps, intravenous tubing and devices, and
patient-controlled analgesia products, as well as for anesthesia and critical
care products, including generic injectables and inhaled anesthetics.

Financial Results Year-to-Date

Year-to-date, Baxter's sales grew nine percent to $6.38 billion, up from the
$5.85 billion reported last year. Foreign exchange favorably impacted sales
growth by five percent. Medication Delivery sales advanced 16 percent to $2.74
billion, BioScience sales rose four percent to $2.33 billion, and Renal sales
grew five percent to $1.31 billion. Sales within the United States totaled $3.02
billion in the first nine months of this year, up six percent. Sales outside the
United States increased 12 percent (including a nine percent benefit from
foreign exchange), to $3.36 billion. Income from continuing operations for the
first nine months of this year declined to $544 million from $774 million last
year, or to $0.90 per diluted share. Year-to-date, Baxter generated $668 million
in cash flow from continuing operations, which compares with $458 million for
the same period last year.

2003 Outlook

For the full-year 2003, the company expects to achieve sales growth in the eight
to 10 percent range, earnings per diluted share from continuing operations of
$1.65 to $1.75 and cash flow from continuing operations of approximately $1.2
billion.

A webcast of Baxter's third quarter conference call for investors can be
accessed live from a link on Baxter's website at www.baxter.com beginning at 7:
30 a.m. CDT on October 16, 2003.

Baxter International Inc., through its subsidiaries, assists health-care
professionals and their patients with treatment of complex medical conditions,
including cancer, hemophilia, immune disorders, kidney disease and trauma. The
company applies its expertise in medical devices, pharmaceuticals and
biotechnology to make a meaningful difference in patients' lives.

Questions and Answers

What impact does the lawsuit filed this week have on Baxter's relationship with
Cerus Corporation?

This lawsuit does not affect our current development and commercialization
agreements with Cerus. Baxter Capital Corporation filed a lawsuit against Cerus
Corporation seeking repayment of Cerus' loan because they are in default. The
collateral for the loan was based on revenue projections for Cerus that have not
been met.


What is the status of your ADVATE launch?

Since the late August U.S. launch of ADVATE, sales in the third quarter totaled
approximately $11 million. In Europe, we anticipate a positive opinion for
marketing authorization from the Committee for Proprietary Medicinal Products
(CPMP) of the European Medicines Evaluation Agency (EMEA), before the end of the
year. Typically, final approval notification is received 90 days following CPMP
positive opinion.


What is the status of your equity forward agreements?

During the third quarter, all of the remaining equity forward agreements were
settled. This was accomplished with the completion of an equity offering of 22
million shares of common stock, from which Baxter used a portion of the proceeds
to settle all remaining equity forward agreements.


What were the accounting changes in the third quarter?

Baxter adopted two new accounting standards on July 1, 2003. The non-cash
cumulative effect of these accounting changes, as of July 1, 2003, reduced Q3
net income by $17 million, or $0.03 per diluted share.


FASB Interpretation No. 46 (FIN 46) requires the consolidation of certain
entities by companies that do not control those entities, and FASB 150 changes
the classification of certain financial instruments from stockholders' equity to
liabilities. With the adoption of FIN 46, approximately $165 million of our
synthetic leases, which principally relate to certain office space and plasma
centers, are now on the balance sheet. With the

adoption of FASB 150, the equity forward agreements relating to Baxter common
stock were also included on the balance sheet. The company settled the remaining
equity forward agreements during the third quarter.


(ADVATE and Baxter are registered trademarks of Baxter International Inc. and
its affiliates.)

This news release contains forward-looking statements that involve risks and
uncertainties, including the effect of economic conditions, actions of
regulatory bodies, product development risks, product demand and market
acceptance, 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.


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