2005 Financial Review

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 13 - Accounts Receivable and Asset Securitization

(a)

Includes $377.6 million for trade and other receivables, net of $10.6 million in estimated uncollectible amounts in 2004, related to BAX Global in 2004.

In December 2000, the Company entered into a five-year agreement to sell a revolving interest in BAX Global’s U.S. domestic accounts receivable through a commercial paper conduit program. The primary purpose of the agreement was to obtain access to a lower-cost source of funds. The securitization program terminated in December 2005 under the terms of the agreement.

Qualifying accounts receivable of BAX Global’s U.S. operations were sold on a monthly basis, without recourse, to BAX Funding Corporation (“BAX Funding”), a wholly owned consolidated special-purpose subsidiary of BAX Global. BAX Funding then sold an undivided interest in the entire pool of accounts receivable to a bank-sponsored conduit entity. The conduit issued commercial paper to finance the purchase of its interest in the receivables. Under the program, BAX Funding could sell up to a $90 million interest in the receivables pool to the conduit. During the term of the agreement, the conduit’s interest in daily collections of accounts receivable was reinvested in newly originated receivables.

Due to the short-term nature of the Company’s retained interest in accounts receivable, its fair value approximated carrying value, net of an appropriate allowance. The Company did not record a servicing asset or liability because the average servicing period for accounts receivable approximated one month.

The discounts and other fees of the accounts receivable securitization are included as a component of the Company’s income (loss) from discontinued operations. Expense recorded was as follows: