I'm Matt Taylor, the U.S. Medical Supplies and Devices Analyst here at Jefferies, and I'm pleased to be joined by management from Baxter here for our fireside chat. Next to me is Joel Grade, the CFO of Baxter, and then Clare Trachtman, IR Extraordinaire, is there on the end. So, Joel, to get started, there's a few topics I wanted to cover, but maybe let's just talk a little bit about high level. Baxter's been repositioning the company and the portfolio in a lot of different ways, looking at the operational model and making some significant divestitures to really focus the company. So I was wondering if you could start by giving us an update on that and the benefits that you think it'll provide for the company going forward. Yeah, sure. Let me. That was loud. Let me start by just maybe giving you a little bit of a perspective on where we kind of land as Baxter after all this work is. As you referenced, in January 2023, we announced a lot of strategic transformational moves that include the sale of our BPS contract manufacturing business from Pharma. That included the verticalization of a business that's historically been more country-run and now the sale of our Kidney business that is likely to close here by the end of this year or in the early part of next year. Where that leaves us as a company is really with three primary vertical segments. We're a market leader in many of the segments that we're in. The first is our Medical Products and Therapies division that is primarily IV solutions, IV, again, devices and pumps primarily. There's some Advanced Surgery products, part of our business that does surgical hemostats. And then a Pharma business that does primarily generic injectables, and drug compounding, and some inhaled anesthetics. And then our HST, which is really primarily around smart beds and other devices and monitoring instruments. And so where that, again, that leaves us as a company, I would say, that with a couple of different opportunities. One, I'm really excited where we land after all of that. I think we find ourselves in a place where, number one, we have the ability to really prioritize our capital allocation in areas that generate higher returns for our company. With Kidney, the Kidney business within our company, the return on invested capital is about half of the return of the business overall, is highly capital intensive, et cetera, et cetera. We find ourselves in a place where our ability to innovate, to invest for innovation, R&D, is something that I'm really excited about. It also leaves us an operationally more nimble, agile, and I guess, again, I may not go all the way to simple, but simpler organization in the sense that the three vertical segments are very clean and specific from their commercial operations through manufacturing all the way from an end to end of the P&L. Today, those are intermingled a fair bit, particularly in our MPT segment and Kidney. That simplicity, if you will, allows us a better ability to be more consistent in terms of our execution and our ability to run the business and then ultimately generate those, again, higher cash flows returns to invest for growth and expand our margins. So, I think really excited about the place that's been a lot of work to get there, a lot of transformation that's happened, but I think we find ourselves in a place that I'm really excited about moving forward. You said such a big company touched a lot of corners of the healthcare and the hospital market. I was wondering if you could just comment on some of the key aspects of your fundamentals. What do you foresee in terms of pricing, utilization, and maybe comment on the capital markets since you sell a fair bit of capital? Yeah, I would just maybe start just a little bit with the markets themselves. I think are continuing to be stable. Volumes continue to be, I think, in the low kind of low single digit volumes. Obviously, our aspiration, in particular, what I referred to before is actually to actually grow above those markets to accelerate our WAMGRs over and above that. From a capital standpoint, I think capital is in a pretty good place. There's a bit of a look forward with potentially lower interest rates coming that I think is favorable. Our large capital businesses in the U.S. at PSS has actually been performing really well. Our order volume has been strong. Our last couple of quarters, our revenues in that area have been strong. And in small capital, things like our pump markets are, I think, in a really pretty strong place. There's a couple-year replacement cycle that's happening that we've also been able to take advantage of, certainly with our newly introduced Novum pump. So I think that's all been positive. Pricing-wise, I think, as many of you may be aware, there's three primary GPOs, medical GPOs in the U.S. We've renegotiated two of those in 2024 that would impact 2025. The third of those will actually be renegotiated in 2026 that would impact 2027. But for the two that we've renegotiated, we'll be taking a pricing bump that's next year that we've said would be on an enterprise level, 100 basis point improvement from a pre-pricing standpoint, and so I think that's something that's encouraging. And as part of those renegotiations, we also negotiated clauses in there that allowed us to actually have more flexibility in the event that there's, I'll call it, supply shocks or other types of things that would cause our cost structure to elevate that we'd be in a better position to pass those along. So I think heading into 2025, we've had solid pricing impact this year in 2024, just come mostly from outside the U.S. in MPT. Again, we expect solid pricing impact, as I just outlined, heading into 2025. And then, again, positive pricing beyond that, but not, again, as large as we've talked about in 2025. Great. Well, speaking of shocks, you normally wouldn't think of the mountains of Western North Carolina as being in a hurricane zone. It's sad to see what's happened there, but it seems. I agree with that. Seems like you're driving a pretty quick recovery there. So maybe just give us an update on North Cove and what that means for the solutions business this year and next year? Yeah, absolutely. So number one, I guess I would just want to just express the amount of pride that I have in this organization in terms of the way that we responded. At the time this happened, there were a lot of people, even some in the competitive space that said, "Oh, they'll be out for a year plus and so that stuff." Absolutely not the case. This company has responded in a significant way. And as we've said now publicly, that we expect all of our lines in that facility to be running by the end of this year. Now, that doesn't mean we'll be at full capacity by the end of the year, but that's something I'm extremely proud of in terms of the way this company's responded. I'd say the second part that I think this company has responded amazingly is the utilization of what I'm going to call our global network. There's nine other facilities in our network that actually manufacture these products. We relied on a couple of them significantly from China, from Spain to actually provide redundancy and products to fulfill demand here. And so, again, I'm not sure a lot of other companies could have pulled that off the way we did. Again, very, very proud of that. Obviously, we've talked about some of the Q4 impacts from a sales standpoint. We do anticipate some softness from a sales standpoint, again, given that we won't be up to full capacity entering into the Q1 of next year. At this point, we're not anticipating beyond that, but that is we do see some of that heading into next year. I just, since we're talking about those potential impacts, I also would say from a cash standpoint, there is potentially an impact. There will be an impact in Q1 as well. Some of the expenses we're incurring in Q4 this year, those payables will come due in Q1. And we'll also be restocking inventories, I think, because one of the things that's happened, there's obviously been a drawdown of inventories related just because of some of the production challenges that we'll anticipate heading into Q1. But as the year goes by in 2025, from a top-line perspective, we do anticipate some of that type of some of that recovering. And then certainly, by Q4, there should be a more favorable comparison that we're looking at as we wrap up the year. And just to kind of conclude that discussion, obviously, there'll be sort of an air pocket as you get back up to full speed. Do you see any risk for share loss there because of the disruption? And on the back end of this, through the recovery, are there opportunities for you to change your network even further or maybe on price because of how important these solutions have turned out to be? Yeah. So I guess the way I would answer that is we don't see long-term share loss out of this. I think there is certainly going to be some short-term dislocation in terms of, obviously, the need to fill in products, et cetera, et cetera. But I think over the longer time horizon, we actually aren't anticipating that. And in fact, I would tell you, I think there's been a lot of goodwill generated by our organization in terms of the way that we've responded in this way. And I guess I would say there's been some situations where others in the industry have impacted customers and, "Hey, we'll fill your solutions in, but you'll have to sign up for other long-term." That hasn't been well received by customers. And so I actually think there's a lot of goodwill that's been generated out of this that I think over the longer term will be actually beneficial to us. But yes, there will be some short-term dislocation. And over the long term, I think we'll be fine. Great. Well, maybe we could pivot and talk a little bit about some of the 2025 goals that you set out there on the last call, talking about 4%-5% operational growth. And I wanted to go through some of the building blocks of that and your confidence in that. I know there's a lot of moving parts, but could you simplify that story for us and think about the key pieces to get to 4%-5% in 2025? Yeah. And so what I would start with is just number one, our businesses in MPT and Pharma have actually had really solid growth throughout this year. And we expect that momentum to continue into next year. Obviously, notwithstanding my commentary regarding North Cove, the pump business at MPT, we certainly expect to be a continued driver of growth in that area. I think, as I mentioned, there's a couple-year replacement cycle in that space . And we continue to anticipate strong growth in our MPT business over the course of next year, as well as we discussed some of the continued recovery on the solution side. From a Pharma perspective, again, we have had a strong year in Pharma. And we do anticipate those trends to continue with a couple of things I would call out as we head into next year. This year, we have had some mixed impact of the, I'll say, even further accelerated growth of compounding relative to our injectables. And I would say next year, as we head into 2025, we will have a little bit more balanced out level of growth between our injectables and compounding, which is actually a positive from a mixed standpoint. But we expect that continued momentum to carry into 2025. In our history, we've had maybe a handful of product launches in every given year in our injectables business. This year, we've now had seven. As we head into next year, we're looking at double-digit product launches in that space. So we expect continued really solid momentum for our Pharma business. From an HST perspective, I think the way I would characterize it as much as anything is really a balance of a couple of things. One, on the positive side, our U.S. PSS capital business actually has some solid momentum. Again, a really, again, solid order book. Our last couple of quarters, we've had good revenue growth out of that as well. We anticipate some of that momentum continuing into next year. The challenges we've had in that business, certainly, again, we've had some OUS impacts in CCS, mostly in Western Europe and in China as stimulus payments that we expected to happen that haven't. But in Front Line Care, some of the impacts we've had in 2024, I'd say we expect not to have some of those same headwinds in 2025. We're not predicting a sizable recovery, so to speak, in the way that would drive a meaningful impact. But we are looking at Front Line Care as having less headwind impact next year, which should translate then into a better growth trajectory for that business as well. So that's kind of the combination of things then, in addition to some of the pricing we talked about from MPT that would really drive that year. Anything you'd add to any of that? I'll touch on three revenue follow-ups I think people would care about. One is the pumps where you've had a lot of momentum. Now you've got Novum, IQ, and syringe. And so maybe talk about the trajectory you've had and how that could translate to further share gains in 2025. Yeah. I mean, I think our pump business in general has been strong, including, in fact, even pre-Novum from a spectrum standpoint. We were taking a point a year of share. And then now that Novum's actually been introduced, again, with a feature set that's been really well received in a rollout process, it's actually gone really well. In fact, again, I think one of the underappreciated pieces of that, we'd had to have that rolled out in Canada for a while before we actually rolled it in the U.S. And so there's a lot of opportunity to just work out any last-minute kind of bugs and kinks in a way that's actually had a really, again, a really smooth and impactful rollout of Novum here in the U.S. And so that has resulted in us being in a place where the one point of share we're taking in Spectrum has translated into a couple of points of share a year with Novum. We've had a number of really nice successes, both in terms of replacements with our existing customers as well as competitive wins. And so we anticipate that trajectory continuing into next year. And I would say probably even through the end of 2026, we expect a really solid view of a replacement cycle in that space. We also have introduced our syringe pump. And obviously, that's new for us. But we actually have taken some nice share gains in that space as well. Again, on a small base because, again, it's a new introduction, but that's another area we've had some success and expect to continue doing. So again, that is a key driver from a growth standpoint for us next year and particularly, obviously, in our MPT segment. And you mentioned U.S. PSS. The 3Q performance was very strong, and you had noted a good order book there. Maybe let's cover what's driving some of the growth there. What are the product categories that are growing and why in terms of factors affecting the market and share gains there? Yeah. I mean, I'll start here, and I'm going to let Clare chime in on that a little bit. I think the main, I would say a couple of things, though. Number one, our Progressa Plus bed has actually been, again, has actually done really well. And I think that's been something that's been, again, part of a new product introduction that's been part of the growth in that particular business. You might recall in the Q1 of this last year, we actually talked about some execution impacts in that space. And we've really made a lot of good progress in that in terms of we've done some realignment of sales incentives. We've actually done a better job utilizing some of the sales tools in that space that have given us a lot more really clear visibility to the order books and some of the, I guess, we'll just say a broad portfolio of products that have really allowed us to be targeted and focused in terms of how we drive and, again, understand the opportunities, but the one thing about that business, I would tell you, is one of the questions I had asked when I got here was, what's the correlation between an order and a revenue? It's very high. It's a little bit variable in terms of the timing of those things, but I would just say the combined and continued improved execution in that space and a good market dynamic, and again, we've had competitive wins in that space too. I know there's a lot of noise in that area around market share, gains or losses. We do not feel we've lost share in that space. And again, in fact, we've had some nice competitive wins. Anything you would add to any of that? I don't think there's any. And don't think there's any. And I just wanted to double-click on Front Line Care again, where you had some challenges in the physician office market just with less being built and less refreshment. So as you look into 2025, are you really just saying we're going to have easier comps and it will be less of a headwind, or do you expect any improvement in demand in that market? I think primarily what we're seeing is we're going to have easier comps and lesser headwinds. I do think over time, again, the primary care market itself, interestingly, I think is actually fine. Volumes are fine. People, again, there's no shortage of actual visits to primary care. I think there is a shortage of primary care doctors, which I think is translating into some of this. But we really are primarily saying that we're expecting less headwinds than we've experienced this year into next year. I do think over the longer term, as interest rates continue to be more favorable, there's a likelihood that there will be more new construction starts, some new entrants into the space in a way that would actually generate some recovery. Certainly, that's been some of the impact of the primary care space. It's just simply the fact that there has not been as many entrants into the space. And some of the bigger box retailers, et cetera, obviously had plans to go into that then they backed out of that. And so I think there's a little bit of a softness that's what's really generating that. But again, we certainly think over the long term, this is a space that grows in the low single digits. And again, but next year's recovery is primarily predicated on lower headwinds. Great. So I wanted to transition with some time left here to talk about margins. And you laid out on the last call a pro forma expectation for 16.5% EBIT margins next year. Maybe help us bridge to that and talk about opportunities for margin expansion beyond the 16.5%? Yeah. Yeah. So let me start with the bridge, and then I'll talk about the expansion opportunities. From a bridge perspective, the way to think about this is that in 2024, on a continuing operations basis, you have to think about the fact that there's stranded costs that were previously allocated to Kidney that are now sitting, if you will, in an unallocated corporate bucket that are continuing operations. That is a margin detriment of about 250 basis points. So if you add that back to where the 13.7% or so that we were at on a continuing operations basis, that takes you closer to around 16%, a little above. Then there's also about a 50 basis point impact of North Cove on that. And so if you add that back, that takes our 2024 comparable margins to about 16.5%. As we head into 2025, we're anticipating. I'll call it a 100 basis points improvement from the underlying business, from pricing, from our ISC impacts, from margin improvement programs, from volume leverage, and a favorable impact of mix in the sense that higher injectables versus compounding, better HST sales. So there'll be a mix improvement that gets us about 100 basis points. So that takes you to 17.5%. What we then said is there's about a 100 basis points detriment or dilution from two different effects. 60 basis points comes from the impact of MSAs that we'll have coming out of the Kidney separation, which, think about that as revenues, but a kind of low double-digit margin that has a dilutive effect on our overall operating margin. And about 40 basis points from what I'll call the net impact of TSAs and stranded costs, meaning there's stranded costs that we're going to have coming out of the separation, not all of which will be absorbed next year by either TSAs or our cost containment measures. So once you back that out, that gets us back to the 16.5%. And look, again, I think this is where people have asked, is that a high level, low level? It feels like the right level for us in this opportunity. And then as we go beyond that in the future years, our continued opportunities, again, from a growth acceleration perspective, from a, again, volume leverage and growth, again, some of these same key impacts of pricing, of our ISC margin improvement programs. Again, those are some of the things that I think are ultimately the key drivers. The growth part really starts with innovation and new product launches. I think one of the things you should expect from us as a company as we head into the future years gets back to almost where we started this conversation, where what does our new company look like? It's ex- It's ex- Kidney. It's a business that is going to contribute more efficient dollars towards R&D, more efficient dollars towards generating innovative products, and through those innovative products, generating growth. So that's how I think about that as both a growth and an enlargement improvement story. So I think we have time for maybe one more. Just to further that margin discussion, could you talk about your ability to continue to work down the stranded costs over the next couple of years as you transition through the TSAs and MSAs? Yeah. So our assumption, as we sort of think about cost containment measures, is that our TSAs are going to go away for the most part after 2025. Now, that's probably not true as a practical matter, but our assumptions in order to prepare for stranded costs are as such. We've talked about the fact that there's about $265 million of stranded costs, but a little over half of that is being absorbed at least the first year by TSAs. I'll give you a couple of examples of some of the things that are stranded costs and sort of how to think about this. One, we have a significant number of distribution centers in the United States due to the Kidney need to have home deliveries. And so there's a density of a distribution network that once Kidney is separated, we won't have a need for that many distribution centers. This is a substantial reduction. That's one type of a stranded cost that will certainly be driving towards. Another thing about TSAs is IT support. This is another area that we have a substantial level of expense that'll be responsible for helping Kidney actually support their technology infrastructure. There's a TSA associated with that. As that goes away and they develop their own mechanisms for supporting technology, those costs will go. The TSAs will go away, but our costs will also go away from that perspective. Those are the types of things. In addition to things like just continued refinements for our shared services infrastructure, just to, again, continue just to kind of overall efficiency from how we think about the continued vertical structure of our company, we still have, I think, some substantial outside the U.S. Infrastructure that'll continue to evolve based on our new company. Great. Well, thanks. I think we're out of time, but thanks so much for your time and thanks for your interest in Baxter. Yeah. Appreciate y'all. Thank you.