From the Chairman and CEO

Dear Stakeholders

At Baxter, sustainability means creating lasting social, environmental and economic value by addressing the needs of our wide-ranging stakeholder base. Our goal is to realize today’s priorities and commitments in a way that ensures that our company and the many who depend on us can continue to thrive for generations to come.

We serve a broad array of constituencies in our mission to save and sustain lives: patients and healthcare professionals, who rely on today’s products and tomorrow’s innovations; governments, insurers and other institutions and business partners that count on our ongoing collaboration; our employees, who seek a safe, inclusive workplace and professional growth opportunities; shareholders, who expect and deserve a return on their investment; and communities around the world, where we positively impact health while contributing to economic growth. We succeed as a business by operating responsibly in service of these diverse stakeholders – which, in turn, ensures we can continue to advance our social, environmental and economic priorities well into the future.

With the guidance of Baxter’s executive Sustainability Steering Committee and the commitment of employees worldwide, we made meaningful progress on our nine sustainability priorities in 2011. The global macroeconomic landscape continued to pose serious challenges, yet it also helped inspire new ways to strengthen existing practices and drive greater innovation. We implemented novel facility-based energy initiatives and continued to shift to less carbon-intensive modes of product transport. We completed five new green building projects, our most yet in a single year. We responded to natural disasters around the world with millions of dollars in product donations and cash. You can learn more about these efforts and many others throughout our comprehensive online sustainability report.

Our annual assessment of progress also serves as a reminder of how much more we can accomplish. While the path forward for the healthcare industry remains challenging, there is immense potential to foster innovation through Baxter’s sustainability priorities as we advance the company’s mission on behalf of our patients. We see great opportunities to increase access to healthcare worldwide, further reduce our carbon footprint, use natural resources more efficiently, help improve math and science education in the communities we serve, and much more. Employees at all levels of the company are taking action, motivated by a sense of responsibility and desire to make a difference.

Through our balanced approach and broad-based employee involvement, we are confident that Baxter is well-positioned to make a positive impact for many years to come.

Robert L. Parkinson, Jr.
Chairman and Chief Executive Officer
June 2012