Baxter International Inc., adjustment to net income attributable to Baxter

US$ in millions

12 months ended:	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012	Dec 31, 2011
Net income attributable to Baxter (as reported)	968)	2,497)	2,012)	2,326)	2,224)
Add: Available-for-sale securities, net of tax	4,438)	34)	(9)	(3)	1)
Net income attributable to Baxter (adjusted)	5,406)	2,531)	2,003)	2,323)	2,225)

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Baxter International Inc., adjusted profitability ratios

	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012	Dec 31, 2011
Net Profit Margin
Reported net profit margin	9.71%	14.98%	13.19%	16.39%	16.01%
Adjusted net profit margin	54.23%	15.18%	13.13%	16.37%	16.02%
Return on Equity (ROE)
Reported ROE	10.94%	30.75%	23.77%	33.53%	33.77%
Adjusted ROE	61.11%	31.17%	23.67%	33.48%	33.79%
Return on Assets (ROA)
Reported ROA	4.62%	9.63%	7.78%	11.41%	11.66%
Adjusted ROA	25.77%	9.77%	7.74%	11.39%	11.67%

Profitability ratio	Description	The company
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by revenue.	Baxter International Inc. adjusted net profit margin ratio improved from 2013 to 2014 and from 2014 to 2015.
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by shareholders’ equity.	Baxter International Inc. adjusted ROE improved from 2013 to 2014 and from 2014 to 2015.
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by total assets.	Baxter International Inc. adjusted ROA improved from 2013 to 2014 and from 2014 to 2015.

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	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012	Dec 31, 2011
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to Baxter	968)	2,497)	2,012)	2,326)	2,224)
Net sales	9,968)	16,671)	15,259)	14,190)	13,893)
Profitability Ratio
Net profit margin¹	9.71%	14.98%	13.19%	16.39%	16.01%
Adjusted: Mark to Market Available-for-sale Securities
Selected Financial Data (US$ in millions)
Adjusted net income attributable to Baxter	5,406)	2,531)	2,003)	2,323)	2,225)
Net sales	9,968)	16,671)	15,259)	14,190)	13,893)
Profitability Ratio
Adjusted net profit margin²	54.23%	15.18%	13.13%	16.37%	16.02%

2015 Calculations

¹ Net profit margin = 100 × Net income attributable to Baxter ÷ Net sales
= 100 × 968 ÷ 9,968 = 9.71%

² Adjusted net profit margin = 100 × Adjusted net income attributable to Baxter ÷ Net sales
= 100 × 5,406 ÷ 9,968 = 54.23%

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Profitability ratio	Description	The company
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by revenue.	Baxter International Inc. adjusted net profit margin ratio improved from 2013 to 2014 and from 2014 to 2015.

	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012	Dec 31, 2011
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to Baxter	968)	2,497)	2,012)	2,326)	2,224)
Total Baxter shareholders’ equity	8,846)	8,120)	8,463)	6,938)	6,585)
Profitability Ratio
ROE¹	10.94%	30.75%	23.77%	33.53%	33.77%
Adjusted: Mark to Market Available-for-sale Securities
Selected Financial Data (US$ in millions)
Adjusted net income attributable to Baxter	5,406)	2,531)	2,003)	2,323)	2,225)
Total Baxter shareholders’ equity	8,846)	8,120)	8,463)	6,938)	6,585)
Profitability Ratio
Adjusted ROE²	61.11%	31.17%	23.67%	33.48%	33.79%

2015 Calculations

¹ ROE = 100 × Net income attributable to Baxter ÷ Total Baxter shareholders’ equity
= 100 × 968 ÷ 8,846 = 10.94%

² Adjusted ROE = 100 × Adjusted net income attributable to Baxter ÷ Total Baxter shareholders’ equity
= 100 × 5,406 ÷ 8,846 = 61.11%

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Profitability ratio	Description	The company
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by shareholders’ equity.	Baxter International Inc. adjusted ROE improved from 2013 to 2014 and from 2014 to 2015.

	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012	Dec 31, 2011
As Reported
Selected Financial Data (US$ in millions)
Net income attributable to Baxter	968)	2,497)	2,012)	2,326)	2,224)
Total assets	20,975)	25,917)	25,869)	20,390)	19,073)
Profitability Ratio
ROA¹	4.62%	9.63%	7.78%	11.41%	11.66%
Adjusted: Mark to Market Available-for-sale Securities
Selected Financial Data (US$ in millions)
Adjusted net income attributable to Baxter	5,406)	2,531)	2,003)	2,323)	2,225)
Total assets	20,975)	25,917)	25,869)	20,390)	19,073)
Profitability Ratio
Adjusted ROA²	25.77%	9.77%	7.74%	11.39%	11.67%

2015 Calculations

¹ ROA = 100 × Net income attributable to Baxter ÷ Total assets
= 100 × 968 ÷ 20,975 = 4.62%

² Adjusted ROA = 100 × Adjusted net income attributable to Baxter ÷ Total assets
= 100 × 5,406 ÷ 20,975 = 25.77%

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Profitability ratio	Description	The company
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by total assets.	Baxter International Inc. adjusted ROA improved from 2013 to 2014 and from 2014 to 2015.

Baxter International Inc. (NYSE:BAX)

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