Adjustments for Non-Cash Items [USD, Millions]

Stock-Based Compensation [USD, Millions]

Changes in Working Capital [USD, Millions]

Capital Expenditures (CapEx) [USD, Millions]

Proceeds from / Repayments of Debt [USD, Millions]

Share Repurchases [USD, Millions]

Dividend Payments [USD, Millions]

Net Change in Cash [USD, Millions]

7bcfda408136891b46eb67214b12d6c2bd4790ddb3b87362434686453f5bd1d9

7d78e5832af79d8826ca52a64b2992fd77b36c929e09d71364d615b7792c149f

61739d7714598ce7e32bd2ff72fc5627e9f1f8ad1ee12c684d1c8a36f1b5cab9

Total Revenue [USD, Millions]

Cost of Goods Sold (COGS) [USD, Millions]

SG&A [USD, Millions]

R&D [USD, Millions]

D&A [USD, Millions]

Interest Expense [USD, Millions]

Operating Income (EBIT) [USD, Millions]

Net Income [USD, Millions]

EPS - Basic [USD]

EPS - Diluted [USD]

f172a41f6860f4e1f0118b1c82d77ca39546a8829fe49d6eacf86a8bbd1c5a5a

Baxter International Inc. is a global medical technology company that provides a wide range of healthcare solutions across more than 100 countries **[0001628280-24-003932_bax-20231231.htm:3]** **[0001628280-24-003932_bax-20231231.htm:114]**. The company operates through four main segments, offering products and services that include sterile IV solutions, connected care systems, specialty pharmaceuticals, and dialysis therapies **[0001628280-24-003932_bax-20231231.htm:5]** **[0001628280-24-003932_bax-20231231.htm:65]**. Baxter's diverse product portfolio and international presence enable it to address various healthcare needs worldwide **[0001628280-24-003932_bax-20231231.htm:3]** **[0001628280-24-003932_bax-20231231.htm:114]**.

1. **Kidney Care** - Provides chronic and acute dialysis therapies, including peritoneal dialysis and hemodialysis **[0001628280-24-003932_bax-20231231.htm:5]** **[0001628280-24-003932_bax-20231231.htm:65]**.
2. **Medical Products and Therapies** - Offers sterile IV solutions, infusion systems, parenteral nutrition therapies, and surgical hemostat products **[0001628280-24-003932_bax-20231231.htm:5]** **[0001628280-24-003932_bax-20231231.htm:65]**.
3. **Healthcare Systems and Technologies** - Delivers connected care solutions, smart bed systems, patient monitoring systems, and advanced surgical equipment **[0001628280-24-003932_bax-20231231.htm:5]** **[0001628280-24-003932_bax-20231231.htm:65]**.
4. **Pharmaceuticals** - Focuses on specialty injectable pharmaceuticals, inhaled anesthesia, and drug compounding **[0001628280-24-003932_bax-20231231.htm:5]** **[0001628280-24-003932_bax-20231231.htm:65]**.

027851224912d2cf6971b3eae70f8e1652fe900636ee7462e3dfe99b67860c86

1. Given the operating margin in the third quarter decreased by 90 basis points year-over-year on a comparable basis, can you explain the specific actions you are taking to achieve the significant jump to a 16.5% operating margin next year, and how confident are you in reaching this target?  **[BAX_3407220_14]** 

2. With the unprecedented disruption caused by Hurricane Helene at your North Cove facility, how do you plan to mitigate the risk of future supply interruptions, and will you consider spreading out manufacturing among other facilities to reduce this risk?  **[BAX_3407220_1]** **[BAX_3407220_11]** 

3. Considering the softness in your Healthcare Systems & Technologies segment, particularly the decline in sales related to the U.S. primary care market and international markets like China and France, what specific strategies are you implementing to drive growth and improve performance in this segment?  **[BAX_3407220_2]** **[BAX_3407220_9]** 

4. As you anticipate resetting your dividend to align with the new size of your organization post the pending sale of the Kidney Care business, can you provide clarity on your dividend policy and whether you are committed to maintaining or adjusting the dividend levels?  **[BAX_3407220_14]** **[BAX_3407220_3]** 

5. Given the expected loss of TSA income over time and the need to offset stranded costs resulting from the Kidney Care divestiture, can you detail the initiatives you are undertaking to eliminate these stranded costs and ensure operating margin expansion while the TSA income declines?  **[BAX_3407220_10]** 

7ce9c79536ca14b29828940f1b9a8dbd92f8d9ad5c1d4bb3e9368a874f9f85d5

### Q3 2024 Earnings Call
- **Issued Period:** Q3 2024
- **Guided Period:** Q4 2024 and FY 2024
- **Guidance:**
  - **Full Year 2024:**
    - Total Company Adjusted EPS: **$2.90 to $2.94** per diluted share.
    - Continuing Operations Adjusted EPS: **$1.81 to $1.84** per share.
    - Total Sales Growth: **1% to 2%** as reported, approximately **2%** on a constant currency basis.
    - Continuing Operations Sales Growth: Approximately **2%** on both reported and constant currency basis.
    - Adjusted Operating Margin: Expected to increase by more than **50 basis points**.
    - Continuing Operations Adjusted Operating Margin: Expected to decline **90 to 100 basis points**.
    - Adjusted Tax Rate: Approximately **22%** for the total company, **18.5%** for continuing operations.
    - Diluted Share Count: Expected to average **511 million shares**.
  - **Fourth Quarter 2024:**
    - Total Company and Continuing Operations Sales: Expected to decline low single digits.
    - Total Company Adjusted EPS: **$0.77 to $0.81** per diluted share.
    - Continuing Operations Adjusted EPS: **$0.50 to $0.53** per share  **[BAX_3407220_0]** **[BAX_3407220_7]** **[BAX_3407220_8]** .

### Q2 2024 Earnings Call
- **Issued Period:** Q2 2024
- **Guided Period:** FY 2024
- **Guidance:**
  - Full Year Sales Outlook: Increased, reflecting strategic priorities and momentum.
  - Adjusted EPS Guidance: Adjusted upwards due to strong performance.
  - Revenue Growth: Expected to exit the year with **4% to 5%** growth excluding Kidney Care.
  - Pricing Contribution: Impact of about **100 basis points** for the full year.
  - Kidney Care Separation: Expected in late 2024 or early 2025.
  - Fourth Quarter Revenue: Implies growth below **1%** due to product mix impacts  **[BAX_3396560_1]** **[BAX_3396560_20]** **[BAX_3396560_13]** **[BAX_3396560_2]** **[BAX_3396560_7]** **[BAX_3396560_10]** .

### Q1 2024 Earnings Call
- **Issued Period:** Q1 2024
- **Guided Period:** Q2 2024 and FY 2024
- **Guidance:**
  - **Full Year 2024:**
    - Total Sales Growth: Approximately **2%** reported, **2% to 3%** constant currency.
    - MPT Segment Sales Growth: **4% to 5%**.
    - Healthcare Systems & Technologies Segment: Flat sales.
    - Pharmaceuticals Segment Sales Growth: **6% to 7%**.
    - Kidney Care Sales Growth: Flat to **1%**.
    - Adjusted Operating Margin: Increase by at least **50 basis points**.
    - Nonoperating Expenses: Approximately **$350 million**.
    - Adjusted Tax Rate: **22.0% to 22.5%**.
    - Diluted Share Count: Average **511 million shares**.
    - Adjusted EPS: **$2.88 to $2.98** per diluted share.
  - **Second Quarter 2024:**
    - Global Sales Growth: Approximately **1%** reported, **2% to 3%** constant currency.
    - Adjusted EPS: **$0.65 to $0.67** per diluted share  **[BAX_3382102_0]** **[BAX_3382102_6]** .

### Q4 2023 Earnings Call
- **Issued Period:** Q4 2023
- **Guided Period:** Q1 2024 and FY 2024
- **Guidance:**
  - **Full Year 2024:**
    - Total Sales Growth: **2%** reported and constant currency.
    - Medical Products and Therapies Sales Growth: **3% to 4%**.
    - Healthcare Systems and Technology Sales Growth: Approximately **3%**.
    - Pharmaceuticals Sales Growth: **4% to 5%**.
    - Kidney Care Sales Decline: **1% to 2%**.
    - Adjusted Operating Margin: Increase by at least **50 basis points**.
    - Nonoperating Expenses: Approximately **$350 million**.
    - Adjusted Tax Rate: **22.0% to 22.5%**.
    - Diluted Share Count: Average **510 million shares**.
    - Adjusted EPS: **$2.85 to $2.95** per diluted share.
  - **First Quarter 2024:**
    - Global Sales Growth: Approximately **1%** reported, **1% to 2%** constant currency.
    - Adjusted EPS: **$0.59 to $0.62** per diluted share  **[BAX_3372437_5]** **[BAX_3372437_6]** .

010f31c309a3c7c6bd1ad834adc86bfdbcf2de81233b9b3de99b18b64bd97113

**Quarterly guidance for Q4 2024:**
- **Sales**: low single-digit decline  **[BAX_3407220_0]** **[BAX_3407220_7]** **[BAX_3407220_8]**  (lowered from below 1% growth  **[BAX_3396560_1]** **[BAX_3396560_20]** **[BAX_3396560_13]** **[BAX_3396560_2]** **[BAX_3396560_7]** **[BAX_3396560_10]** )  
- **Total Company Adjusted EPS**: $0.77 to $0.81  **[BAX_3407220_0]** **[BAX_3407220_7]** **[BAX_3407220_8]**  (no prior guidance)  
- **Continuing Operations Adjusted EPS**: $0.50 to $0.53  **[BAX_3407220_0]** **[BAX_3407220_7]** **[BAX_3407220_8]**  (no prior guidance)

**Annual guidance for FY 2024:**
- **Total Company Adjusted EPS**: $2.90 to $2.94  **[BAX_3407220_0]** **[BAX_3407220_7]** **[BAX_3407220_8]**  (no prior guidance)  
- **Continuing Operations Adjusted EPS**: $1.81 to $1.84  **[BAX_3407220_0]** **[BAX_3407220_7]** **[BAX_3407220_8]**  (no prior guidance)  
- **Total Sales Growth**: 1% to 2% as reported, ~2% on a constant currency basis  **[BAX_3407220_0]** **[BAX_3407220_7]** **[BAX_3407220_8]**  (no prior guidance)  
- **Continuing Operations Sales Growth**: ~2% on both a reported and constant currency basis  **[BAX_3407220_0]** **[BAX_3407220_7]** **[BAX_3407220_8]**  (no prior guidance)  
- **Adjusted Operating Margin**: expected to increase by more than 50 basis points  **[BAX_3407220_0]** **[BAX_3407220_7]** **[BAX_3407220_8]**  (no prior guidance)  
- **Continuing Operations Adjusted Operating Margin**: expected to decline 90 to 100 basis points  **[BAX_3407220_0]** **[BAX_3407220_7]** **[BAX_3407220_8]**  (no prior guidance)  
- **Adjusted Tax Rate**: approximately 22% for the total company, 18.5% for continuing operations  **[BAX_3407220_0]** **[BAX_3407220_7]** **[BAX_3407220_8]**  (no prior guidance)  
- **Diluted Share Count**: expected to average 511 million shares  **[BAX_3407220_0]** **[BAX_3407220_7]** **[BAX_3407220_8]**  (no prior guidance)  

b2a3505d961a1532af4e8fef9e42aab907cc354b3bc7cb53e562362892761e5d

1a38c96fc34f42bcb21fb1b98b5be05022abe1381b9cc2ee2f07e8cfe14fe2ee

United States

Emerging Markets

Rest of World

Americas

- Latin America and Canada

EMEA

APAC

Hillrom

- EMEA

- APAC

International

Total Revenue

883e163d3b19ca3a3774e093542e0b341efd35a14845762c09dc31e72ed4da0e

| Name                  | Position                                                                 | Start Date         | Short Bio                                                                                                                                                                                                                                                                                                                                                   |
|-----------------------|--------------------------------------------------------------------------|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| José E. Almeida       | Chair, President, and Chief Executive Officer                            | January 1, 2016    | José E. Almeida has been serving as the Chair, President, and CEO of Baxter International Inc. since January 1, 2016. He began his role as an executive officer in October 2015. Before joining Baxter, he was a Senior Advisor with The Carlyle Group and held leadership roles at Covidien plc  **[0001193125-24-075975_d546571ddef14a.htm:22]** **[0001628280-24-003932_bax-20231231.htm:60]** **[0001628280-23-002864_bax-20221231.htm:57]** .                                                |
| James Borzi           | Executive Vice President and Chief Supply Chain Officer                  | August 2020        | James Borzi joined Baxter in August 2020. Prior to Baxter, he was Vice President and Chief Supply Chain Officer at GE Healthcare and held leadership roles at Becton Dickinson (BD)  **[0001628280-24-003932_bax-20231231.htm:60]** **[0001628280-23-002864_bax-20221231.htm:57]** .                                                                                                                                                               |
| Joel T. Grade         | Executive Vice President, Chief Financial Officer, and Interim Chief Accounting Officer | 2023               | Joel T. Grade joined Baxter in 2023 after a 25-year career with Sysco Corporation. He was appointed as Interim Chief Accounting Officer on September 3, 2024, while continuing as CFO  **[0001628280-24-003932_bax-20231231.htm:60]** **[0001193125-24-075975_d546571ddef14a.htm:3]** **[0001193125-24-212145_d865964d8k.htm:1]** .                                                                                                                                                          |
| Heather Knight        | Executive Vice President and Group President, Medical Products & Therapies | 2023               | Heather Knight was appointed to her current role in 2023. She joined Baxter in 2019 from Medtronic plc and has nearly 30 years of experience in the pharmaceutical and medical device industries  **[0001628280-24-003932_bax-20231231.htm:60]** .                                                                                                               |
| Jeanne K. Mason       | Executive Vice President and Chief Human Resources Officer               | 2006               | Jeanne K. Mason has been with Baxter since 2006, coming from GE Insurance Solutions. She has held leadership roles at General Electric (GE) and is involved with various boards and councils  **[0001628280-24-003932_bax-20231231.htm:61]** .                                                                                                                   |
| Reazur Rasul          | Executive Vice President and Group President, Healthcare Systems & Technologies | 2023               | Reazur Rasul was appointed to his current role in 2023. He joined Baxter in 2017 and has held leadership positions at Hewlett Packard Enterprise and GE Healthcare  **[0001628280-24-003932_bax-20231231.htm:61]** .                                                                                                                                              |
| David S. Rosenbloom   | Executive Vice President and General Counsel                              | N/A                | David S. Rosenbloom joined Baxter from McDermott Will & Emery, where he was a partner and Global Head of the Litigation Practice Group. He also served in the U.S. Attorney’s Office for the Northern District of Illinois  **[0001628280-24-003932_bax-20231231.htm:61]** .                                                                                                                            |
| Alok Sonig            | Executive Vice President and Group President, Pharmaceuticals            | 2023               | Alok Sonig was appointed to his current role in 2023 after joining Baxter in 2022. He has over 25 years of experience in the life sciences industry, with previous roles at Lupin, Inc., Dr. Reddy’s Laboratories, and Bristol Myers Squibb  **[0001628280-24-003932_bax-20231231.htm:61]** .                                                                     |
| Christopher A. Toth   | Executive Vice President and Group President, Kidney Care                | June 2023          | Christopher A. Toth assumed his responsibilities at Baxter in June 2023. Before joining Baxter, he was CEO of Varian, a Siemens Healthineers Company, and held various executive roles over two decades  **[0001628280-24-003932_bax-20231231.htm:62]** **[0001628280-24-003932_bax-20231231xexx1031.htm:0]** .                                                                                                      |
| Jeffrey (Jay) A. Craig| Director and Member of the Audit Committee                                | September 8, 2024  | Jeffrey (Jay) A. Craig was appointed to the Board of Directors on September 8, 2024. He is the former CEO and President of Meritor, Inc., and has held leadership roles at General Motors Acceptance Corp. and Deloitte & Touche LLP  **[0001628280-24-039784_bax-20240909.htm:1]** **[0001628280-24-039784_bax-20240909xex991.htm:0]** .                                                                          |

46236d0f73e089ce36f77e89b07a9abab89623d5e42cbbdf80086ef0dd239162

| Program Details           | Program 1       |
|---------------------------|-----------------|
| Approval Date             | **July 2012**  **[0001628280-24-047221_bax-20240930.htm:20]** **[0001628280-24-047221_bax-20240930.htm:73]** **[0001628280-24-047221_bax-20240930.htm:57]**  |
| End Date/Duration         | No expiration date  **[0001628280-24-047221_bax-20240930.htm:20]** **[0001628280-24-047221_bax-20240930.htm:73]** **[0001628280-24-047221_bax-20240930.htm:57]**  |
| Total Additional Amount   | N/A             |
| Remaining Authorization   | **$1.30 billion** as of September 30, 2024  **[0001628280-24-047221_bax-20240930.htm:20]** **[0001628280-24-047221_bax-20240930.htm:73]** **[0001628280-24-047221_bax-20240930.htm:57]**  |
| Details                   | Authorization amount has been increased multiple times  **[0001628280-24-047221_bax-20240930.htm:20]** **[0001628280-24-047221_bax-20240930.htm:73]** **[0001628280-24-047221_bax-20240930.htm:57]**  |

055c4ce20a2c23b2707aa1ee064e8cceaa13a8fcd4f527ead76ef0c3d0eed79c

e05c0c4f9c8c76b0a763287237d5e74f0d3939e8963854e744ebf0f17920e2f1

| Name                          | Start Date | End Date | Reason for Change |
|-------------------------------|------------|----------|-------------------|
| PricewaterhouseCoopers LLP    | 1985  **[0001628280-24-003932_bax-20231231.htm:179]**    | Present  | Current auditor   |

1ffd86362ce6d63df6fe2118bc847b61c26d15c4e144128e911aaf91292436cb

a30f554128ab868bd825a300455c890ff2297cf59ffb38da4712e3130f1643ee

23794d91c53ae875c8e247d72561e35d9d06ee07c70c9e0dbcc977a6d161504a

- Total Revenue: $2,699 million (-27% YoY)  **[0001628280-23-036195_bax-20230930.htm:3]** **[0001628280-24-047221_bax-20240930.htm:37]** **[0001628280-24-047221_bax-20240930.htm:45]** **[0001628280-24-047221_bax-20240930.htm:47]**   
- Operating Income (EBIT): $454 million (vs. -$108 million in Q3 2023)  **[0001628280-23-036195_bax-20230930.htm:3]** **[0001628280-24-047221_bax-20240930.htm:3]**   
- Net Income: $14 million (down from $2,511 million in Q3 2023; -99% YoY)  **[0001628280-23-036195_bax-20230930.htm:3]** **[0001628280-24-047221_bax-20240930.htm:3]**   
- Medical Products & Therapies: $1,342 million (+7% YoY)  **[0001628280-23-036195_bax-20230930.htm:40]** **[0001628280-24-047221_bax-20240930.htm:37]** **[0001628280-24-047221_bax-20240930.htm:45]** **[0001628280-24-047221_bax-20240930.htm:47]**   
- Infusion Therapies & Technologies: $1,070 million (+7% YoY)  **[0001628280-23-036195_bax-20230930.htm:51]** **[0001628280-24-047221_bax-20240930.htm:37]** **[0001628280-24-047221_bax-20240930.htm:45]** **[0001628280-24-047221_bax-20240930.htm:47]**   
- Advanced Surgery: $272 million (+7% YoY)  **[0001628280-23-036195_bax-20230930.htm:51]** **[0001628280-24-047221_bax-20240930.htm:37]** **[0001628280-24-047221_bax-20240930.htm:45]** **[0001628280-24-047221_bax-20240930.htm:47]**   
- US Region: $1,500 million (-15% YoY)  **[0001628280-23-036195_bax-20230930.htm:41]** **[0001628280-24-047221_bax-20240930.htm:44]**   
- Emerging Markets: $347 million (**-81% YoY**)  **[0001628280-23-036195_bax-20230930.htm:41]** **[0001628280-24-047221_bax-20240930.htm:44]**   
- Rest of World: $852 million (-22% YoY)  **[0001628280-23-036195_bax-20230930.htm:41]** **[0001628280-24-047221_bax-20240930.htm:44]**   

04e45cda269d19af4d25f08866f408d457aac538ea0bae214a3107e447f63cb4

edc19365063c077a36edcb9cb3fff60852f0672d0d15438f36bac69e2fc3175b

Percentage change in net sales at constant currency rates for United States (percentage)

Percentage change in net sales at constant currency rates for Emerging Markets (percentage)

Percentage change in net sales at constant currency rates for Rest of World (percentage)

Percentage change in total net sales at constant currency rates (percentage)

Percentage change in net sales at constant currency rates for Infusion Therapies and Technologies (percentage)

Percentage change in net sales at constant currency rates for Advanced Surgery (percentage)

Percentage change in total net sales at constant currency rates for Medical Products and Therapies (percentage)

Percentage change in net sales at constant currency rates for Care and Connectivity Solutions (percentage)

Percentage change in net sales at constant currency rates for Front Line Care (percentage)

Percentage change in total net sales at constant currency rates for Healthcare Systems and Technologies (percentage)

Percentage change in net sales at constant currency rates for Injectables and Anesthesia (percentage)

Percentage change in net sales at constant currency rates for Drug Compounding (percentage)

Percentage change in total net sales at constant currency rates for Pharmaceuticals (percentage)

db7b682b4d1339af3665e7d0c46ab8dbebd7c44c1652d64cd079f7dc787d83a1

1. **2025 Guidance and Hurricane Impact**  
   **Q:** Confidence in meeting 2025 guidance despite hurricane and HST issues?  
   **A:** Management reaffirms confidence in achieving **4%-5% revenue growth** and **16.5% operating margin** in 2025 despite minimal first-quarter impact from Hurricane Helene.  **[BAX_3407220_9]** **[BAX_3407220_10]**  They cite normalization of the HST business, significant growth in pumps (up **50%** in 2024, continuing into 2025), positive pricing impacts, operational efficiencies, and cost-containment efforts as key drivers.  **[BAX_3407220_9]** **[BAX_3407220_10]** 

2. **Margin Target and Stranded Costs**  
   **Q:** Is the 16.5% margin target achievable or exceedable? How will you offset stranded costs and lost TSA income?  
   **A:** Management views the **16.5% operating margin** as an anchoring point for post-separation growth, expecting continued margin expansion over time.  **[BAX_3407220_10]**  They plan to eliminate stranded costs by 2027 through actions like rationalizing distribution centers and rightsizing the organization.  **[BAX_3407220_10]**  TSA income in 2025 will offset some expenses, and proactive cost-containment measures are underway.  **[BAX_3407220_10]** 

3. **IV Fluid Revenue Recovery**  
   **Q:** Will the $150 million IV fluid revenue loss recover in 2025?  
   **A:** While there's potential upside from restocking the market after the IV fluid shortage, management hasn't factored it into guidance yet.  **[BAX_3407220_12]**  They expect destocking effects to balance out in 2025 and see opportunities not yet explored.  **[BAX_3407220_12]** 

4. **Operating Margin Bridge and Dividend Policy**  
   **Q:** How do you reconcile current margins with 16.5% target? Will you maintain the dividend?  
   **A:** Current margins include stranded costs not yet offset by TSA income or cost measures.  **[BAX_3407220_13]** **[BAX_3407220_14]**  The **16.5%** target reflects expected cost containment and TSA offsets in 2025.  **[BAX_3407220_13]** **[BAX_3407220_14]**  Management plans to reset the dividend based on the company's new size but is committed to maintaining a dividend.  **[BAX_3407220_14]** 

5. **Revenue Acceleration Drivers**  
   **Q:** What drives revenue growth acceleration to 4%-5% next year?  
   **A:** Drivers include normalization of the HST business, significant growth in pumps (hardware up **50%** in 2024), new product launches, and resolution of operational issues.  **[BAX_3407220_9]** **[BAX_3407220_17]**  Front Line Care is expected to return to normal growth, and strong performance in pumps and sets will continue.  **[BAX_3407220_9]** **[BAX_3407220_17]** 

6. **Capital Allocation and Spending Trajectory**  
   **Q:** How are you balancing investments with cost measures?  
   **A:** Management continues to invest in R&D for innovation while expecting expense leverage in SG&A through cost-containment measures.  **[BAX_3407220_17]**  They anticipate gaining leverage from growth and are carefully managing expenses to offset impacts like the IV fluid shortage.  **[BAX_3407220_17]** 

7. **China Impact and Tariffs**  
   **Q:** What is the impact of China performance and potential tariffs?  
   **A:** Post-separation, China will represent less than **2%** of sales.  **[BAX_3407220_15]**  Baxter is less exposed to China-related risks, including VBPs and tariffs, and does not expect significant impact.  **[BAX_3407220_15]** 

8. **Novum Pump Uptake**  
   **Q:** How is the Novum pump uptake progressing?  
   **A:** The Novum pump launch is going extremely well, with market share gains of **2% to 2.5%** expected by year-end.  **[BAX_3407220_15]**  Infusion hardware sales are up **50%** in 2024, with strong growth expected to continue into 2025.  **[BAX_3407220_15]** 

9. **IV Solutions Manufacturing and Pricing**  
   **Q:** Will you spread out manufacturing to reduce risk? Will IV bag pricing increase?  
   **A:** Baxter utilizes a global network of plants to mitigate risk, with facilities in countries like Spain, Canada, and China.  **[BAX_3407220_11]**  They've invested over **$0.5 billion** in their facility since 2016 and recovered quickly from disruptions.  **[BAX_3407220_11]**  While acknowledging the critical nature of IV solutions, they did not comment on pricing.  **[BAX_3407220_11]** 

c3e85191aaf16d57ce27ad5d62c8b629da8f83c0b58e8cdd8100b2c7f9e6ac31

- Baxter's **compounding business is slowing down**, becoming a **headwind in the fourth quarter**, which may impact revenue growth in **2025**.  **[BAX_3396560_19]** **[BAX_3396560_20]** **[BAX_3396560_7]**
- The **Front Line Care division is still experiencing negative growth year-over-year**, with uncertainty about when it will return to positive growth, indicating potential ongoing challenges.  **[BAX_3396560_4]**
- The **Kidney Care business** is expected to face **negative growth due to value-based procurement in China**, which could affect overall performance after its planned separation.  **[BAX_3396560_11]** **[BAX_3396560_10]**

d2e22df944b83caa7b976f0f1e32bf5c779b008913bfd8e948fe8351aec424c5

- **Baxter expects to achieve 4-5% growth excluding the Kidney Care division**, driven by its **diversified portfolio with multiple growth drivers**, including acute care products, pharmaceuticals, and infusion pumps.  **[BAX_3382102_21]**
- **Strong pipeline of innovative products**, with over **seven significant launches in the HST segment in 2025**, and plans to launch **25 new high-margin injectable pharmaceuticals**, supporting future growth and profitability.  **[BAX_3382102_21]** **[BAX_3382102_14]** **[BAX_3382102_16]**
- **Operational improvements and increasing demand in the HST segment**, with improved order flow and operational actions expected to drive growth in the second half of 2024, leading to a **4% to 5% exit rate growth** by year-end.  **[BAX_3382102_7]** **[BAX_3382102_11]**

4def709d0c14b960183fe996021a3c83f645cd2c1f95c32a92cb55a0a5bdb4e9

1. **Kidney Co Separation Timing**  
   **Q:** Is the Kidney Co separation delayed to early 2025?  
   **A:** Management confirmed that the Kidney Co separation might shift to early **2025** as they continue to pursue both sale and spin options to maximize shareholder value. They are making solid progress but acknowledge the timing has shifted as they evolve the process.  **[BAX_3396560_5]** 

2. **Margin Outlook Post-Kidney Separation**  
   **Q:** How confident are you in margin expansion for RemainCo?  
   **A:** Management is confident in margin expansion for RemainCo, driven by top-line growth, new product launches, and pricing opportunities. They anticipate about **100 basis points** of pricing benefit this year, primarily outside the U.S., with similar expectations for next year as new GPO contracts take hold in the U.S. Investments in automation and efficiency programs are also expected to enhance margins.  **[BAX_3396560_6]** **[BAX_3396560_17]** 

3. **Revenue Phasing and Q4 Softness**  
   **Q:** Why does guidance imply low Q4 revenue growth?  
   **A:** The anticipated lower revenue growth in Q4 is primarily due to a slowdown in the compounding business, notably from an Australian customer with planned maintenance reducing volume. There's also an expected slowdown in the kidney business, mainly impacted by value-based procurement in China.  **[BAX_3396560_7]** **[BAX_3396560_8]** **[BAX_3396560_10]** 

4. **Sustainability of 4%+ Organic Growth**  
   **Q:** Is 4%+ organic growth sustainable going forward?  
   **A:** Management believes the **4–5%** organic growth rate, excluding the kidney business, is sustainable and expects strong momentum to continue into **2025**. This is attributed to improvements in the HST business and solid performance in the core business, including potential market share gains.  **[BAX_3396560_11]** **[BAX_3396560_20]** 

5. **Kidney Co Sale/Spin Assumptions**  
   **Q:** What are the key assumptions for the Kidney Co sale or spin?  
   **A:** The Kidney Co's margins are in the high single-digit to low double-digit range, with earlier quarters inflated by one-time impacts. Management is focused on reducing stranded costs to minimize dilution. Tax implications are considered as part of the overall economics to maximize shareholder value, whether through a sale or spin.  **[BAX_3396560_9]** 

6. **Restructuring Progress**  
   **Q:** Have you turned the corner on restructuring efforts?  
   **A:** Management feels they have turned the corner, noting significant progress in commercial execution and cost optimization. Supply chain improvements and plans to optimize SG&A and shared services are expected to drive consistent improvements in operating income margins over the next **12 to 24 months**.  **[BAX_3396560_12]** 

7. **Capital Allocation and Investments**  
   **Q:** Where are incremental SG&A and R&D dollars being deployed?  
   **A:** Incremental investments are focused on innovation in infusion technology, including new pump categories and intelligent software featuring artificial intelligence expected in **2025**. Additionally, **five** new product launches are planned in HST over the next **12 months**, along with investments in injectable specialty drugs in the pharmaceuticals segment.  **[BAX_3396560_8]** 

8. **Novum Infusion Pump Rollout**  
   **Q:** How is the Novum infusion pump rollout progressing?  
   **A:** The Novum pump rollout is ahead of expectations, with sales occurring in Q2. There is significant interest from both large and small hospital systems. Management believes this will accelerate growth in Q3, Q4, and into **2025**, enabling them to gain market share.  **[BAX_3396560_14]** 

9. **Front Line Care Outlook**  
   **Q:** What's the outlook for Front Line Care improvement?  
   **A:** Management expects Front Line Care to improve as the primary care market stabilizes and government orders resume. New technology launches in cardiology and monitoring are planned for mid-**2025**, which should drive growth alongside a recovering primary care market.  **[BAX_3396560_4]** **[BAX_3396560_15]** 

10. **Infusion Pump Market Share and Pricing**  
    **Q:** Are you gaining share and how is pricing expected to evolve?  
    **A:** Baxter has been gaining about **100 basis points** of market share annually in infusion pumps, a rate expected to accelerate with the Novum pump. Pricing contributed approximately **100 basis points** in Q2 and is anticipated to remain consistent next year as new GPO contracts impact U.S. pricing.  **[BAX_3396560_16]** **[BAX_3396560_17]** 

81481644020734f5973e0b0eb1bfd492af94e3fe48871602a7c3f27b22521f42

1. **Margin Expansion Plans**  
   **Q:** What drives margin expansion in 2024?  
   **A:** Baxter expects margin expansion of over **50 basis points** in 2024, driven mainly by operational cost improvements, pricing, and volume growth.  **[BAX_3372437_7]**  The integrated supply chain team is executing margin improvement programs focusing on automation, procurement enhancements, and optimizing logistics.  **[BAX_3372437_13]**  Pricing will also contribute positively to margins, particularly in markets like IV solutions.  **[BAX_3372437_12]** 

2. **Revenue Guidance and Growth Drivers**  
   **Q:** How will revenues grow in 2024 and why?  
   **A:** Baxter forecasts revenue growth of **3% to 4%** for the business excluding Kidney Care, which is above the market growth rate.  **[BAX_3372437_7]** **[BAX_3372437_11]**  Pharmaceuticals are expected to grow **4% to 5%**, and Medication Delivery and Technologies (MPT) between **3% and 4%**, with potential to exceed that.  **[BAX_3372437_11]**  New product launches in the Hospital Solutions & Technologies (HST) segment, including new monitors and cardiology devices in late 2024 and 2025, will further drive growth.  **[BAX_3372437_11]** 

3. **Capital Allocation and Debt Repayment**  
   **Q:** What's the plan for capital allocation and debt?  
   **A:** Post-separation of Kidney Care, Baxter will focus capital allocation on accelerating growth through innovation and potential tuck-in acquisitions.  **[BAX_3372437_11]** **[BAX_3372437_19]**  The company used **$2.8 billion** from the sale of its BioPharma Solutions business to pay down debt in Q4 2023  **[BAX_3372437_12]** , and plans to address additional debt maturing in 2024.  **[BAX_3372437_12]** 

4. **Pricing Strategies Impact on Margins**  
   **Q:** How does pricing affect margins in 2024?  
   **A:** Pricing will positively impact margins in 2024, with Baxter continuing to secure price increases across its businesses.  **[BAX_3372437_12]** **[BAX_3372437_17]**  Contracts with Group Purchasing Organizations (GPOs) will contribute to margin expansion upon taking effect in 2025.  **[BAX_3372437_17]**  The company is also incorporating indexing in pricing to better pass along cost increases.  **[BAX_3372437_17]** 

5. **New Product Launches and R&D Focus**  
   **Q:** Where will Baxter focus on innovation post-spin?  
   **A:** Baxter aims to accelerate innovation, particularly in areas like alternate sites of care and Ambulatory Surgery Centers (ASCs).  **[BAX_3372437_19]**  The company plans to reinvest savings from operational efficiencies into research and development to drive organic growth.  **[BAX_3372437_19]**  Upcoming product launches include new monitors, cardiology devices, and wireless communication tools in 2024 and 2025.  **[BAX_3372437_11]** **[BAX_3372437_19]** 

6. **Kidney Care Separation and Expectations**  
   **Q:** What are expectations for Kidney Care after separation?  
   **A:** The Kidney Care business is expected to improve profitability by exiting **$150 million** of non-core products and markets.  **[BAX_3372437_7]** **[BAX_3372437_16]**  Fundamentals are improving with solid patient growth and a rebound in Acute Therapies.  **[BAX_3372437_16]**  The focus will be on increasing peritoneal dialysis penetration globally and enhancing digital capabilities.  **[BAX_3372437_19]** 

7. **Impact of Inflation and FX on Margins**  
   **Q:** How do inflation and FX affect margins?  
   **A:** Inflationary pressures are being offset by operational cost improvements, and pricing is contributing positively to margins.  **[BAX_3372437_12]**  However, foreign exchange rates are expected to have a **40 basis point** negative impact on operating margins in 2024.  **[BAX_3372437_7]** **[BAX_3372437_12]** 

8. **Market Share Gains in Infusion Pumps**  
   **Q:** What's happening with infusion pumps and Novum?  
   **A:** Baxter continues to gain market share in infusion pumps, expecting over **40% growth** between 2023 and 2024.  **[BAX_3372437_14]**  The Sigma Spectrum pump was awarded best-in-class KLAS recognition.  **[BAX_3372437_14]**  Regarding the Novum pump, Baxter has responded to all FDA queries and is cautiously optimistic about potential approval in 2024.  **[BAX_3372437_15]** 

9. **Operational Improvements and Cost Savings**  
   **Q:** How will cost reductions improve margins?  
   **A:** Operational efficiencies in the supply chain, including automation and procurement enhancements, present significant margin expansion opportunities.  **[BAX_3372437_13]**  Baxter is also exploring shared services to streamline SG&A expenses.  **[BAX_3372437_13]**  Savings from these initiatives will be reinvested into innovation and new product development.  **[BAX_3372437_13]** 

10. **Capital Equipment Environment**  
    **Q:** What's assumed for capital equipment sales in 2024?  
    **A:** Baxter anticipates sequential improvement in capital equipment orders every quarter in 2024, leading to year-over-year growth.  **[BAX_3372437_9]**  Medium to large system sales are expected to improve, while smaller systems may face softness due to high interest rates.  **[BAX_3372437_9]** 

11. **Seasonality and Sales Cadence**  
    **Q:** How should we think about sales cadence in 2024?  
    **A:** Sales are expected to show slight acceleration in the second half of 2024.  **[BAX_3372437_8]**  Margin expansion and earnings growth will be more pronounced in the first half due to easier comparisons.  **[BAX_3372437_8]**  The HST business will see sales ramp up over the year, similar to 2023.  **[BAX_3372437_8]** 

12. **Interest Expense and Cash Management**  
    **Q:** How will interest expense change in 2024?  
    **A:** Interest expense is expected to be higher in the second half of 2024.  **[BAX_3372437_12]**  Baxter plans to pay down low coupon debt in the second quarter, which will reduce interest income from cash holdings.  **[BAX_3372437_12]**  The company used **$2.8 billion** from the sale of BioPharma Solutions to reduce debt in Q4 2023.  **[BAX_3372437_12]** 

6050983a8c31e8577c4dcea78342f8f3fc3a59e23a0e7aa333bf462019427d63

- **Projected Growth Below Peers:** Baxter's projected revenue growth for 2024 is **3% to 4%** for the business excluding Kidney Care, which is below the growth rates of some peers.  **[BAX_3372437_11]**  The company acknowledges that achieving higher growth rates depends on new product launches in 2025, introducing uncertainty and reliance on future developments.  **[BAX_3372437_11]**
- **Margin Expansion Faces Challenges:** The anticipated **50 basis point operating margin improvement** for 2024 depends heavily on operational cost improvements and pricing initiatives.  **[BAX_3372437_7]**  However, there are concerns about underlying assumptions, including inflationary pressures and FX headwinds, which may impact the company's ability to achieve these margin targets.  **[BAX_3372437_7]** **[BAX_3372437_12]**
- **Uncertain Capital Equipment Spending Recovery:** While Baxter expects improvement in hospital capital spending, the recovery remains uncertain with potential "pockets of weakness," particularly among smaller systems affected by high interest rates.  **[BAX_3372437_18]** **[BAX_3372437_9]**  This could negatively impact sales in segments dependent on capital equipment purchases.

20a30dc03186625e0973e410c3576569803fc444164b68df2832ef7277e4e88f

1. **HST Growth and Outlook**  
   **Q:** When will HST normalize and can Baxter exit fiscal '24 with 4% growth?  
   **A:** Baxter is committing to exiting 2024 with around **4–5% growth**, excluding the Kidney business.  **[BAX_3382102_7]**  The Healthcare Systems & Technology (HST) segment underperformed in Q1 due to postponed orders and operational issues, which are being addressed.  **[BAX_3382102_7]**  Orders have improved from Q1 into Q2, and there's a healthy funnel of opportunities for the rest of 2024.  **[BAX_3382102_7]**  The company is confident in the recovery of HST and expects to see growth acceleration in the second half of the year.  **[BAX_3382102_9]** 

2. **Margin Outlook and Drivers**  
   **Q:** What drove the strong margins in Q1, and what is the outlook going forward?  
   **A:** The **gross margins** in Q1 were driven by strong operational efficiencies and positive manufacturing variances from the Integrated Supply Chain (ISC).  **[BAX_3382102_8]** **[BAX_3382102_10]**  Pricing also contributed modestly.  **[BAX_3382102_8]** **[BAX_3382102_10]**  There was favorability related to the closing of the dialyzer facility, which benefited Q1 but won't recur in Q2.  **[BAX_3382102_8]** **[BAX_3382102_10]**  Baxter continues to execute margin improvement initiatives designed to offset inflation, with a focus on operational efficiencies and pricing actions.  **[BAX_3382102_10]** 

3. **Spin-off or Sale of Kidney Business**  
   **Q:** When will Baxter decide on spinning off or selling the Kidney business?  
   **A:** Baxter will be separating the Kidney business in the **second half of 2024**.  **[BAX_3382102_12]**  The company is contemplating both options—spin-off or sale—and will choose the one that maximizes shareholder return.  **[BAX_3382102_12]** 

4. **Novum IQ Pump Impact**  
   **Q:** How is the Novum IQ pump contributing to performance and competitive dynamics?  
   **A:** The **Novum IQ** pump had no impact on Q1 results, but it's expected to contribute in the second half of 2024 as shipping begins.  **[BAX_3382102_15]**  Baxter has secured orders, including a full conversion from a competitor.  **[BAX_3382102_15]**  The Novum IQ pump, with modern design and productivity features, is anticipated to drive competitive conversions and significant impact in 2025.  **[BAX_3382102_15]** 

5. **Pharmaceuticals Growth Prospects**  
   **Q:** What is the outlook for the Pharmaceuticals business, particularly injectables?  
   **A:** The Pharmaceuticals business, especially injectable pharmaceuticals, is performing strongly with **8% growth** in the first quarter.  **[BAX_3382102_14]**  Baxter is launching new molecules and premixes, which have high gross margins of **70% to 85%**, helping offset price erosion.  **[BAX_3382102_14]**  The focus is on innovation, with plans to launch more than **25 different products in 2025**, leveraging their US-based Galaxy technology.  **[BAX_3382102_16]** 

6. **Margin Expansion Opportunities**  
   **Q:** How will Baxter continue margin expansion in the core business excluding Renal?  
   **A:** Baxter sees margin expansion opportunities from volume growth, pricing improvements, operational efficiencies, and procurement initiatives.  **[BAX_3382102_18]**  They are leveraging scale and focusing on the Integrated Supply Chain to positively impact margins.  **[BAX_3382102_18]**  The company is also hiring leadership for global business services to enhance the operating model.  **[BAX_3382102_18]** 

7. **R&D Investment**  
   **Q:** Is Baxter reducing R&D investment as it grows slower than sales?  
   **A:** Baxter has actually **increased R&D** investment in the HST segment.  **[BAX_3382102_13]**  While R&D may show a slowdown as a percentage of sales, the dollar value has improved.  **[BAX_3382102_13]**  The company continues to hire and is exploring additional R&D centers, emphasizing innovation to drive **4–5% top-line growth**.  **[BAX_3382102_13]** 

8. **HST Geographic Expansion**  
   **Q:** Has the HST geographic expansion taken longer than expected?  
   **A:** Baxter has seen good performance in Western Europe and Latin America, expanding Hillrom's opportunities in these markets.  **[BAX_3382102_19]**  They are enhancing focus on capital sales in Asia Pacific by increasing talent and making organizational changes.  **[BAX_3382102_19]**  China remains challenging due to 'Made in China' restrictions, but overall, Baxter is optimistic about international growth.  **[BAX_3382102_19]** 

9. **Connectivity Solutions and Pipeline**  
   **Q:** What are the plans for Connectivity Solutions and future pipeline initiatives?  
   **A:** With the Novum IQ pumps, Baxter now has a suite of devices that connect via their **Canexus** gateway, enabling devices to communicate and improve hospital productivity.  **[BAX_3382102_20]**  The company is focusing on innovation to bring specific solutions that enhance efficiency in hospital settings.  **[BAX_3382102_20]**  Baxter plans to demonstrate these capabilities at their Investor Day later this year.  **[BAX_3382102_20]** 

0d2f67fc4eb66b65d9e5290181f72a25e08032d719ce9dc9e23882e8aa22aa8d

- **Growth is expected to slow in key segments due to market exits and government pricing initiatives, particularly in the Kidney Care segment, which is facing reduced volumes in China and is projected to have flat to 1% growth for 2024, compared to mid-single-digit growth without these impacts**.  **[BAX_3382102_11]**
- **The Healthcare Systems & Technologies (HST) segment is underperforming, with a 9% decline in sales, facing operational challenges, order timing issues, and difficulties in key markets like China due to restrictions and competitive pressures, raising concerns about the segment's recovery**.  **[BAX_3382102_11]** **[BAX_3382102_19]**
- **The company's strong margins in Q1 were aided by non-recurring factors, such as benefits from the closure of a dialyzer facility, and these benefits are not expected to continue, potentially leading to margin pressure in subsequent quarters**.  **[BAX_3382102_17]** **[BAX_3382102_8]**

0ce420f646cd7bd83dbc165d7a7b1246ab6ab974ff9622ce52f1f4992e0affd1

- **Strong Sales Growth and Building Momentum Across Core Segments**: Baxter anticipates sales growth of **3% to 4%** in its core businesses, excluding Kidney Care, for 2024, which is above the market growth rate. This growth is driven by new product launches in **Healthcare Systems & Technologies (HST)** and **Medical Products and Therapies (MPT)**, including new monitors, cardiology devices, and infusion pumps. The company expects **40% growth** in infusion pumps for 2024 and is seeing recovery in hospital capital spending, indicating improved demand for capital equipment. **[BAX_3372437_11]** **[BAX_3372437_18]** **[BAX_3372437_9]**
- **Margin Expansion Leading to Improved Profitability**: Baxter expects to expand its operating margins by over **50 basis points** in 2024, contributing to **double-digit EPS growth**. This improvement is driven by operational cost efficiencies, pricing initiatives, and supply chain optimization. The company is executing margin improvement programs, focusing on automation, procurement, and network optimization, which are expected to enhance profitability over the next several years. **[BAX_3372437_7]** **[BAX_3372437_13]** **[BAX_3372437_17]**
- **Debt Reduction and Strong Cash Flow Generation**: Baxter significantly reduced its debt by repaying approximately **$2.8 billion** in the fourth quarter of 2023 using proceeds from the divestiture of its BioPharma Solutions business. The company generated **free cash flow of over $1 billion** in 2023, compared to $411 million in the prior year. Improving cash flow generation and working capital metrics remains a key priority, positioning the company for continued financial strength in 2024. **[BAX_3372437_4]**

b5de5b7477202c877b372e9d31fc71d99b4c866e7313f5240e0a2a3e502adb86

- **Baxter expects to exit the year with a robust **4%-5%** growth rate excluding Kidney Care, driven by improvements in the Health Care Systems and Technologies (HST) segment and strong momentum across businesses.**  **[BAX_3396560_20]** **[BAX_3396560_11]**
- **The launch of the **Novum IQ** infusion pump is ahead of schedule, generating significant customer interest, and is anticipated to accelerate market share gains, with expectations to gain up to **2%** market share points annually starting in 2025.**  **[BAX_3396560_14]** **[BAX_3396560_17]** **[BAX_3396560_16]**
- **Baxter is investing heavily in innovation, focusing on high-margin products like infusion technologies and intelligent infusion systems with artificial intelligence expected in **2025**, and planning to launch **five new products** in the next **12 months** for HST, which will drive future growth and margin expansion.**  **[BAX_3396560_8]** **[BAX_3396560_12]**

41687578dcfba94aa63d7fd199b531ea84b8e37b32484e15ac3c0a6c1d84240f

- **Uncertainty in Achieving 16.5% Operating Margin in 2025**: Baxter's executives indicated that bridging from current operating margins to the targeted **16.5% operating margin in 2025** is "really complicated," raising concerns about the company's ability to meet this goal.  **[BAX_3407220_16]**
- **Impact of Stranded Costs on Operating Margins**: The company is experiencing significant headwinds from stranded costs related to the pending sale of its Kidney Care business. These **stranded costs negatively impacted operating margin by approximately 250 basis points** in the quarter, leading to a decline in adjusted operating margins by **90 to 100 basis points** for the full year 2024 on a continuing operations basis.  **[BAX_3407220_10]** **[BAX_3407220_14]** **[BAX_3407220_16]**
- **Significant Disruption from Hurricane Helene**: Baxter's largest manufacturing facility, North Cove, suffered unprecedented devastation from Hurricane Helene. This disruption is expected to negatively impact fourth-quarter sales by approximately **$200 million**, including an estimated **$150 million to $160 million impact on Medical Products & Therapies (MPT) sales**. Full production recovery is not expected until the end of the year, posing risks to operational continuity and financial performance.  **[BAX_3407220_1]** **[BAX_3407220_10]**

90a750887e0ffc38848fc82e0dd38bc4c096f6dc25774f5ecb427b732be92ab1

Baxter International Inc (BAX)

Financials