Baxter International Inc.

And gentlemen, and welcome to Baxter International's 4th Quarter 2020 Earnings Conference Call. Your lines will remain in a listen-only mode until the question and answer segment of today's call. At that time, if you have a question, you will need to press star 1 key on your touch-tone phone. If anyone should require assistance during the conference, please press star then 0 on your touch-tone phone. As a reminder, this call is being recorded by Baxter and is copyrighted material. It cannot be recorded or rebroadcast. without Baxter's permission. If you have any objections, please disconnect at this time. I would now like to turn the call over to Ms. Claire Tarkman, Vice President and Federal Relations at Baxter International. Ms. Tarkman, you may begin.

Good morning, and welcome to our fourth quarter 2020 earnings conference call. Joining me today are Joel Leda, Baxter's Chairman and Chief Executive Officer, and Jason Carl, Baxter's Chief Financial Officer. On the call this morning, we will be discussing Baxter's fourth quarter and full year 2020 financial results along with our financial outlook for 2021. A supplemental presentation to complement this morning's discussion can be accessed on our website in the investor section under events and news. This presentation includes related non-GAAP reconciliations. With that, let me start our prepared remarks by reminding everyone that this presentation, including comments regarding our financial outlook for the first quarter and full year 2021, new product development, business development, and regulatory matters, contain forward-looking statements that involve risks and uncertainties. And, of course, our actual results could differ materially from our current expectations. Please refer to today's press release and our SEC filings for more detail concerning factors that could cause actual results to differ materially. In addition, on today's call, non-GAAP financial measures will be used to help investors understand factors ongoing business performance. A reconciliation of the non-GAAP financial measures being discussed today to the comparable GAAP financial measures is included in our earnings release issue this morning and available on our website. On the call this morning, we will be discussing operational sales growth which for 2020 adjusts for the impact of foreign exchange and the acquisition of Ceprofilm, which closed on February 14, 2020. Now I'd like to turn the call over to Joe. Joe?

Thank you, Claire, and thank you for everyone joining today's call. I hope that you and your loved ones are staying healthy and safe. I'll begin this morning with a review of Baxter's fourth quarter performance and some perspective on 2020 as a whole. Jay will provide additional details on the financials, including our outlook for the first quarter in full year 2021. Then we will close with Q&A. Obviously, it is impossible to frame this year's performance without reference to the COVID-19 pandemic. This has been a year like no other, and I once again want to acknowledge the healthcare providers, first responders, caregivers, researchers, and of course, patients who are on the front lines of this daily struggle. And I'm deeply grateful to my Baxter colleagues who continue to make a difference, not only battling COVID-19, but across all of the acute and chronic conditions addressed by our G.R.U.D. portfolio. In the spirit of our mission, we've partnered with three companies to manufacture selected COVID-19 vaccines through our Baxter Biopharma Solutions business. We're privileged to work alongside these companies and proud to bring our leading-edge contract manufacturing capabilities to the fight against this pandemic. Our results in 2020 demonstrate our commitment to driving performance and reflect the diversity and durability of our portfolio amid these challenging market conditions. Baxter delivered fourth quarter reported sales growth of 5%, 3% the constant occurrence rates, and 2% operations. On the bottom line, adjusted earnings per share were $0.80, down 18% year-over-year, reflecting a challenging comparison to the prior year quarter, our strongest quarter since the back-solid spin-off, as well as the ongoing impact of the pandemic on our business. Geographically, growth was led by our Asia-Pacific segment, which was up 8% of constant currency rates. This reflects the region's overall momentum and leadership in pandemic containment and recovery. Fourth quarter year-over-year sales growth was 5% for EMEA and flat in the Americas, also at constant rates. Four of our six GBUs grew for the quarter at constant rates, unless otherwise noted, all sales growth figures discussed are compared to the prior year period at constant currency rates. Growth was led by acute therapies at 15%. This reflects sustained higher demand for continuous renal replacement therapy, or CRRT, products used in the treatment of COVID-19. Our renal care business delivered mid-single-page growth for the quarter, driven by ongoing strength of peritoneal dialysis therapies, particularly in the U.S. During the quarter, we announced FDA authorization of our home choice Clarion 8 PD cycler, which features ShareSource, the only two-way remote patient management platform for PD patients in the U.S., This new cycle option alongside AMIA supports our ability to expand access to home-based therapy as the new CMS and stage renal disease treatment choices or ETC payment model takes effect this year. While the impact of COVID has been more muted on Baxter's renal care business, overall ESRD patient volumes in 2020 have been depressed by COVID, as its patient population is experiencing a higher mortality rate and the incidence of new patient diagnosis is slowing. As the leader in home therapies, we have launched a global campaign, Safer at Home, designed to educate clinicians and patients around the world about the benefits of peritoneal dialysis therapies and increase awareness of alternatives to E-centered hemodialysis treatment. As a result, we expect home therapist growth to continue to outpace that of overall ESRD growth. Clinical nutrition also grew mid-single digits, reflecting the benefit of the new product launches, enhanced commercial execution, competitive dynamics in the U.S., and demand for nutrition products as part of COVID-19 patient treatment. Advanced surgery grew at 10%, benefiting from the impact of our early 2020 separate film acquisition. Adjusting for the acquisition and foreign exchange, advanced surgery declined low single digits operation year over year, reflecting the ongoing lower rate of surgical procedures globally amid the COVID-19 pandemic. Sales in our medication delivery and pharmaceuticals businesses both declined mid-single digits, reflecting lower rates of hospital admissions versus pre-COVID levels. Declines in admissions were partially offset by increased utilization and stocking of a range of products used in treating COVID-19 patients. including certain presentations of our large-volume parenterals, minibags, and select generic injectable pharmaceuticals. Shifting perspective to full year 2020, Baxter achieved sales growth of 3% on both the reported and constant currency basis and 2% operations. On the bottom line, adjusted earnings per share were $3.09, declining 7% versus 2019. The essential nature of our portfolio has long been fundamental to our business model and mission to save and sustain lives. This certainly proved central to our overall 2020 results. While utilization of certain products and therapies declined in light of pandemic conditions, it surged in others, none more so than our acute therapies portfolio, as well as a range of other products across our GDUs. These products emerged at the core of pandemic care, and as demand rose to record levels, we invested as necessary to help increase the flow of these products to the patients and clinicians who were relying on this globally. Amid the unpredictability of 2020, we remained focused on our strategic objectives, which include advancing healthcare innovation, delivering better to all stakeholders. You can see many highlights in today's press release. And this is not changing as we seize the opportunities in 2021 and beyond. The global launch of our leading-edge NovoMyQ infusion platform achieved key milestones at the end of 2020 receiving marketing in Europe and Health Canada too. And we are on track to resubmit our 510K application to FDA by the close of the first quarter. Plus, our new product pipeline includes additional generic injectables and the next generation of our market-leading Prismax technology, among other highlights. In addition, we'll continue pursuing attractive business development and licensing opportunities in line with our core portfolio and key adjacencies. To the extent we don't find opportunities that meet our disciplines in strategic and financial criteria, we will return value to the shareholders through dividends and share repurchases. Baxter's momentum is also evident in other ways, like our growing Net Promoter Scores globally, demonstrating the strength of our customer relationships and laying the groundwork for expanding opportunities. And it can be seen in our wide-ranging ESG recognition, which reflects our standing as a good corporate citizen and an employer of choice for top talent. That's why I remain optimistic about our future. Brexit transformation, now entering its sixth year, has done far more than strengthen our financial performance. It has strengthened our agility, adaptability, resilience, and tenacity. These attributes, alongside our enduring mission and essential portfolio, have been key to navigating today's uncertainty. they will remain at the heart of driving value for patients, clinicians, and shareholders as the global healthcare landscape continues evolving rapidly. Now, we'll pass it on to Jay, who will take a closer look at our financial performance and outlook for 2021.