Baxter International Inc.

During the conference, please press star, the zero on your touchtone phone. As a reminder, this call is being recorded by Baxter and is copyrighted material. It cannot be recorded or rebroadcasted without Baxter's permission. If you have any objections, please disconnect at this time. I would now like to turn the call over to Mr. Kevin Moran, Vice President, Investor Relations at Baxter International. Mr. Moran, you may begin.

Good morning and welcome. Today we'll discuss Baxter's third quarter 2025 results along with an update to our full year 2025 outlook and newly issued fourth quarter 2025 guidance. This morning, a press release was issued with our preliminary earnings results and updated outlook. The press release and investor presentation are available on the investor section of the Baxter website. Joining me today are Andrew Heider, President, Chief Executive Officer, and Joel Gratis, Executive Vice President and Chief Financial Officer. During the call, we will be making forward-looking statements, including comments regarding our financial outlook for the fourth quarter and full year 2025, and matters related to future dividend declarations. the anticipated impact of the kidney care sale, including our ability to eliminate related costs, the anticipated impact of various regulatory and operational matters, including ones related to our infusion pump platform, what we believe to be continuing fluid conservation and heightened inventory levels, and commentary regarding the global macroeconomic environment, including tariffs and proposed mitigating actions. Forward-looking statements involve risks and uncertainties, which could cause our actual results to differ materially from our current expectations. Please refer to today's press release, the forward-looking statement slide at the beginning of our investor presentation, and our SEC filings for more detail. In addition, please note that on today's call, all our comments will be on a non-GAAP basis unless they are specifically called out as GAAP. Non-GAAP financial measures are used to help investors understand Baxter's ongoing business performance. GAPs and non-GAAP reconciliations for all relevant periods can be found in the schedules attached to our press release and in our investor presentation. Finally, as a reminder, continuing operations excludes Baxter's kidney care business, which is now reported as discontinued operations. Now, I'd like to turn the call over to Andrew.

Thank you, Kevin. Let me welcome you officially as the new head of Baxter's Relations team. And good morning, everyone. I am pleased to be here for my first earnings call as CEO. I look forward to getting to know everyone here better as the quarters progress. As I've said in many settings over the last several weeks, it is an honor to have the responsibility to lead this new chapter at Baxter. Our company is essential to healthcare. with an iconic brand that is valued and trusted by caregivers and patients globally. Since joining the company, I've immersed myself in Baxter's business, leading teams around the world, 14 site visits across seven countries and counting, working side by side with employees, speaking directly with customers, and gaining a more detailed view of the opportunities and challenges we face. I've learned a great deal in a short period. but I want to reflect on two things that clearly stand out. First is that we're building from a fundamental position of opportunity. I've been struck by the commitment and pride this team brings to Baxter's mission to save and sustain lives and to serving our customers. This is a business whose portfolio has proven resilient over its almost a hundred year history. One that has delivered significant revenues and attractive operating margins and generated solid cashflow over the years. The strength of our business, the critical role we play in healthcare, and the talent and dedication of our people who are committed to win should position us well to deliver lasting value. Second is that we are proactive and clear-eyed about what needs to improve and change at the company so we're better positioned to deliver on our potential. Let me be clear about that. We are not satisfied with our current performance. There is a recognition that challenges must be met head on with both immediate actions as well as real long-term solutions. I'm also very realistic about the road in front of us as we work to prioritize our areas of focus, improve execution and business performance, deliver sustained growth, and improve profitability and cash flows. Turning briefly to this quarter's results, which Joel will speak to in detail, Our third quarter top line performance came in lower than our previously issued guidance and exceeded expectations on the bottom line due to a favorable tax rate. These results reflect challenges in two divisions, the infusion therapies and technology division within the medical products and therapy segment and the injectables and anesthesia division within the pharmaceuticals segment. Importantly, Baxter's healthcare systems and technology segment demonstrated improved performance. Before I turn it to Joel to discuss financial results in more detail, I want to give you a better sense of how I'm approaching the first several months of my time at Baxter and to give you some context on the decisions and actions that we have taken to date and will take in the coming months. We'll have more opportunities to discuss long-term strategy down the road, but in the near term, you'll see us take actions and decisions designed to support three areas. First, stabilizing the areas of the business that require increased focus. Second, strengthening our balance sheet. And third, driving a culture of continuous improvement and enterprise-wide efficiency. Let me share my initial thoughts on each. I'll start with stabilizing the business. Baxter already has undergone significant transformation in recent years. and is now a more streamlined and focused enterprise. But of course, there have been challenges in certain areas that have hampered growth and consistent execution, and we expect our growth algorithm to continue to be pressured in the near term. With my background in operations, I am bringing a keen eye to people, process, and performance at Baxter. along with what we call uniform value creators, standardized metrics that we're focused on value creation. One critical area of focus and attention right now, for example, is related to the pause we've taken on deliveries and installations of the Novum IQ large volume pump. While we're disappointed that we expect the current hold to remain in place beyond year end, we are working tirelessly to evaluate and test potential corrections to fully resolve the flow rate issues. In parallel, we will continue to closely support current Novum IQ LVP users. We will also continue to offer Baxter's Spectrum IQ LVP, a longstanding and well-known product used in more than 1,500 facilities across the U.S. and Canada as a leading option for infusion therapy, one that Baxter continues to invest in. The Spectrum IQ LVP now operates on a shared gateway with Noblem IQ Syringe, creating a cohesive user experience and is built for the future with EMR interoperability, enhanced software, and innovative analytical capabilities. A second area of focus will be improving Baxter's balance sheet. It is from the basis of a strong balance sheet that we will be better able to invest in the business, support innovation, and deliver and return increased value to our shareholders. This means focusing on improved cash flow and taking a consistent approach to our capital allocation objective. The first step in addressing our balance sheet is taking decisive and clear steps to reduce our leverage. It is in this context that we and the Board intend to reduce the quarterly dividend to one cent per share, beginning with the dividend to be paid in January 2026. This will free up cash to accelerate deleveraging, consistent with our prior commitments. Joel will provide more details on that in his section of the call as well. The last area you will continue to see us prioritize is building enterprise efficiency into everything we do at Baxter. Earlier this month, we rolled out Baxter GPS, our new growth and performance system aimed at driving continuous improvement and a growth and performance mindset. This data-driven system is inspired by best-in-class models from organizations known for strong cultures of continuous improvement and represents a positive change in how we work. It also adapts in real time, helping to ensure we are moving toward greater efficiency, stronger performance and impact. Ultimately, this will help build the habits and discipline across the enterprise that will define our future success. I've led this type of system successfully at several other companies, and I'm confident it will lead to improved performance at Baxter over the long term. In closing, I want to step back and reflect on what makes me confident and excited about Baxter's future. Yes, there is work ahead, and the coming quarters will require significant focus, discipline, and execution. But I see a company with a strong foundation. a clear path forward, and the ability to turn challenges into opportunities. You can expect us to work with urgency and focus to accelerate growth, improve margins and cash flow, and drive enhanced innovation. We are on a journey to build a better Baxter that is more resilient, more agile, and more capable than ever. A Baxter with a more consistent execution, what I like to call a higher say-do ratio. A Baxter that will work to redefine healthcare delivery, and in doing so, continue to deliver meaningful impact for customers, patients, and long-term value creation for shareholders. I look forward to keeping you updated on our progress and getting to know you all better in the coming weeks and months. With that, I will now turn it over to Joel. Joel, over to you.