Good morning, ladies and gentlemen, and welcome to Baxter International second quarter 2025 earnings 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 one on your touch-tone phone. Once again, star and the number one. If anyone should require assistance during the conference, please press star, then zero on your touch-tone phone. As a reminder, this call is being recorded by Baxter International and is copyrighted material. It cannot be recorded or rebroadcast without Baxter International permission. If you have any objections, please disconnect at this time. I would now like to turn the call over to Ms. Clare Trachtman, Senior Vice President, Chief Investor Relations Officer at Baxter International Inc. Ms. Trachtman, you may begin. Good morning and welcome to our second quarter 2025 earnings conference call. Joining me today are Brent Shafer, Baxter's Chair and Interim Chief Executive Officer; Joel Grade, Baxter's Executive Vice President and Chief Financial Officer; and Heather Knight, Baxter's Executive Vice President and Chief Operating Officer. On the call this morning, we will be discussing Baxter's second quarter 2025 results along with our financial outlook for the third quarter and full year 2025. With that, let me start our prepared remarks by reminding everyone that this presentation, including comments regarding our financial outlook for the third quarter and full year 2025, the anticipated impact of our strategic actions, the potential impact of various regulatory and operational matters, including matters related to the Novum IQ Large-V olume Infusion P ump and continuing IV Fluid Conservation in the global macroeconomic environment on our results of operations, contains forward-looking statements that involve risks and uncertainties. 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 Baxter's ongoing business performance. A reconciliation of certain non-GAAP financial measures being discussed today to the comparable GAAP financial measures is included in the accompanying investor presentation and available in our earnings release issued this morning, both of which are available on our website. 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 Brent. Brent. Thanks, Clare. Good morning, everyone. Thank you for joining us. As you saw in this morning's release, our second quarter performance for continuing operations met our previously issued guidance on both top and bottom line. Specifically, second quarter sales from continuing operations grew 4% on a reported basis and 1% on an operational basis, with growth coming from all three segments. On the bottom line, adjusted earnings per share from continuing operations were $0.59, increasing 28% over the prior year. These results did come in at the low end of our guidance ranges, reflecting softness in demand for certain products within the Medical Products & Therapies and Pharmaceuticals segments. Heather and Joel will walk through more details on these factors during their remarks. Importantly, with the sale of Vantiv now complete, we have now created a more agile and focused business designed to deliver incremental value for all of our stakeholders. We expect to continue to identify opportunities to further advance our operational effectiveness and improve performance, which will be a key focus area for our next CEO, Andrew Hyder. I'll comment more on Andrew's appointment at the close of the call. We are confident in our strategy and our future opportunities to accelerate innovation, growth, and performance overall. We continue to build on the strength of our streamlined profile and to benefit from our portfolio of medically essential products. I also want to recognize our exceptional Baxter colleagues globally, united by our mission to save and sustain lives. I'm grateful for their dedication to our company and our stakeholders. Now I'd like to turn it over to Heather and Joel, who will share details on individual segment results, financial performance, and updated guidance. Heather. Thanks, Brent, and welcome, everyone. I'm pleased to be here with you this morning to discuss our second quarter results. I'm going to walk through our sales performance in the quarter, and then we'll hand it over to Joel to walk through performance across the rest of the P&L, along with our updated financial outlook for the third quarter and full year 2025. Before I begin the sales discussion, I want to provide a reminder that results discussed on today's call will reference operational growth, which excludes the impact of foreign exchange, MSA revenues from Vantiv, and the planned exit of IV s olutions from China. Second quarter 2025 global sales from continuing operations totaled $2.8 billion and increased 4% on a reported basis and 1% on an operational basis. Performance in the quarter reflected strength in drug compounding, Advanced Surgery products, and Care and Connectivity Solutions, which offset declines in injectables and anesthesia, infusion therapies and technologies, and frontline care. Now I'll walk through our results by reportable segments. Commentary regarding sales growth will reflect growth on an operational basis. Sales in our Medical Products & Therapies, or MPT segment, were $1.3 billion and increased 1% in the quarter. Performance in the quarter reflected strong demand for Advanced Surgery products, offset by softness in infusion therapies and technologies, or ITT. Within MPT, second quarter sales from our ITT division totaled $1 billion and declined 1%, primarily reflecting the previously discussed impact of hospital IV Fluid Conservation efforts and slightly lower U.S. patient admissions than previously anticipated. As noted in the press release, we have removed allocations for all IV solutions manufactured at North Cove and are working closely with our customers regarding current practices. While we have started to see a slight improvement with hospitals reducing fluid conservation efforts, our current outlook built in potential downside risk that conservation efforts don't materially improve in the second half of the year and U.S. patient admission levels remain consistent with the second quarter. We continue to believe that hospitals will return to historic practices over time. The fundamentals of the business remain strong, and we continue to recapture business from existing customers and take on new customers following the recovery of North Cove. We are committed to maintaining the broadest and most comprehensive IV solutions portfolio offering in the market, which strongly resonates with our customers. Notably, last week, Vizient announced the expansion of its reserve program to include Baxter IV fluids through a strategic partnership to help ensure reliable access to these critical products during times of supply disruption. The Baxter program provides participating healthcare organizations with dedicated on-demand inventory warehoused here in the U.S. Strength in infusion systems from the rollout of our Novum IQ Large Volume Infusion pump platform helped offset the impact from IV Fluid Conservation efforts. I do want to pause here and acknowledge a decision we made a couple of weeks ago. To address feedback that has been identified through our ongoing quality procedures and in careful consideration of customer insights, we communicated to our customers that we have decided to voluntarily and temporarily pause shipment and planned installations of the Novum LVP. During this temporary ship and install pause, our customers have been working with us as we incorporate their feedback into our process. We are focused on supporting our existing customers' continued use of the device as they implement recommended actions from the recent Novum IQ LVP corrections. We remain confident in the Novum IQ infusion platform and its support of safe and connected infusion therapy while recognizing that real-world implementation always provides opportunities to learn, adapt, and improve. While we are unable to currently commit to an exact timing for resuming shipment and installation for Novum IQ LVP, our goal is to resume both as soon as possible this year, depending on the progress we make with the related corrections and feedback from our customers. We are handling this situation with our mission in mind and with the utmost priority, speed, and care. We will continue to work in partnership with our customers and in alignment with regulatory agencies. Sales in Advanced Surgery products totaled $296 million and grew 5% globally. Results in the quarter reflected solid demand for our portfolio of hemostats and sealants, strong commercial execution across geographies, and steady procedure volumes. In Healthcare Systems & Technologies, or HST, sales in the quarter were above expectations and totaled $767 million, increasing 2%. Growth in the quarter reflected continued strong sales in the Care and Connectivity Solutions, or CCS division, increasing 4% to $474 million, with a noted improvement internationally where sales rose 7%. U.S. CCS sales increased 3% in the quarter, driven by strength in care communications and surgical solutions. Total U.S. capital orders for CCS declined in the second quarter, primarily due to a difficult comparison to the prior year period where U.S. capital orders rose 40%, which included a large contract win. To date, we have not observed a slowdown in U.S. hospital capital spending. However, given the broader macroeconomic uncertainty, we continue to closely monitor the situation. Frontline care sales in the quarter were $293 million and declined 1% compared to the prior year, but increased mid-single digits sequentially. Performance in the quarter reflected a high single-digit decline internationally, driven by softness in select markets outside the U.S. Moving on to our Pharmaceuticals segment, sales in the quarter totaled $612 million, increasing 1%. Second quarter sales within injectables and anesthesia were $332 million and declined 4%. Performance in the quarter reflected a 1% decline in our injectables portfolio, driven in part by a difficult comparison to the prior year period due to the timing of a U.S. government order. We have also experienced some softness in demand for select premixed products within our U.S. injectables portfolio. We attribute a portion of the softness in demand to follow-on impacts related to the hurricane, which caused some hospitals to evaluate IV infusion protocols, including utilizing IV push in lieu of premixed products in certain situations. Our commercial teams are working with customers to reinforce the clinical benefit and value proposition of premixed injectables while also continuing to execute on our new product launches. Lower sales of inhaled anesthesia continued to weigh on performance and declined low double digits in the quarter globally. Drug compounding grew 7% and reflected strong demand for our services outside the U.S. Other sales, which represent sales not allocated to a segment and primarily include sales of products and services provided directly through certain manufacturing facilities, were $13 million in the quarter. During the quarter, MSA revenue from Vantiv totaled $98 million. As a reminder, these sales are included in our reported growth, however, are not reflected in our operational growth for the quarter. Now I'll pass it to Joel, who will discuss performance on the rest of the P&L along with our updated financial outlook. Joel? Thanks, Heather. Good morning, everyone. I'll start my remarks today with some additional commentary regarding the P&L profile for the second quarter, before turning to our updated outlook for the remainder of the year. Second quarter adjusted gross margins from continuing operations were 40.7%, a decrease of 170 basis points compared to the prior year. The year-over-year decline primarily reflected the impact from the Vantiv MSA, lower manufacturing volumes for IV solutions, and an unfavorable product mix. As a reminder, starting in the first quarter, we reclassified certain functional expenses to cost of goods sold from SG&A following the completion of the sale of our kidney care business. These functional costs were previously recorded in SG&A and support manufacturing and are now classified as indirect costs subject to inventory capitalization and recorded in cost of sales when sold. Second quarter adjusted SG&A from continuing operations totaled $639 million, or 22.7% as a percentage of sales, a decrease of 170 basis points from the prior year period. Results of the quarter reflect continued investments in sales and marketing efforts and a headwind related to certain employee benefit-related costs. These costs were offset by the benefit from the reclassification of functional costs and continued disciplined expense management focused on mitigating the stranded cost impact. Adjusted R&D spending from continuing operations in the quarter totaled $134 million and represented 4.8% as a percentage of sales, consistent with the prior year period. We continue to make targeted investments focused on advancing our new product portfolio and bringing customer-focused innovation to patients across our segments. TSA income and other reimbursements totaled $52 million for the quarter. This came in higher than anticipated and reflected increased levels of support for Vantiv. As previously discussed, the associated expenses related to this income are reflected in other lines of the P&L, including cost of goods sold and SG&A. These factors resulted in adjusted operating margin at 15.1% on a continuing operations basis, improving 180 basis points compared to the prior year period. Operating margin in the quarter reflects the lower gross margin due to the factors just mentioned, offset by continued focus on operational execution as well as the benefit of TSA income and other reimbursements from Vantiv. Taking a look at adjusted operating margin by each reportable segment. MPT's adjusted operating margin totaled 18.1% for the quarter, increasing 10 basis points over the prior year period and reflecting positive pricing in the quarter, partially offset by the sales and manufacturing impact related to reduced fluid volumes associated with demand softness due to the factors we've discussed. R&D investments also increased in the quarter. TSA income contributed to positive performance in the quarter as well. HST adjusted operating margin increased sequentially and totaled 15.4% for the quarter. Margins declined 60 basis points from the prior year period, reflecting increased investments and higher corporate allocation expenses following the sale of kidney care. TSA income partially offset these increased expenses. Pharmaceuticals' adjusted operating margin totaled 10.5% for the quarter, decreasing 200 basis points compared to the prior year. These results reflect an unfavorable product mix, increased investments, and increased corporate allocation expenses. These expenses were partially offset by TSA income. Net interest expense from continuing operations totaled $58 million in the quarter, a decrease of $28 million versus the prior year period, reflecting lower interest expense following the paydown of existing debt with proceeds from the sale of Vantiv, including the recent repayment of an outstanding European bond. Adjusted other non-operating income expense was not meaningful in the quarter compared to income of $24 million in the prior year period, primarily reflecting the impact of losses from foreign exchange balance sheet accounts recorded in the quarter. The continuing operations adjusted tax rate for the quarter was 16.7%, decreasing 400 basis points over the prior year period. The year-over-year decrease is primarily driven by benefits from the strategic use of select tax attributes as we continue to optimize our global structure following the sale of kidney care. As previously mentioned, adjusted earnings from continuing operations were $0.59 per share for the quarter and increased 28% versus the prior year. Contributions to earnings growth include positive pricing, the receipt of TSA income and other reimbursements, as well as the benefit of lower expenses from non-operational items, including interest and tax. Before turning to our updated outlook, I want to briefly comment on our cash flows. On a year-to-date basis, we have incurred negative free cash flows of $144 million, although during the second quarter, we generated $77 million of positive free cash flows. As a reminder, the first half of the year included certain hurricane-Helene-related costs that were paid this year. We are intensely focused on improving our cash flow generation in the second half of the year. To achieve this objective, we are taking several actions, with a key focus area being on our inventory management. Let me conclude my remarks by discussing our 2025 outlook for the full year and the third quarter, including some key assumptions underpinning the guidance. For full year 2025, Baxter expects total sales growth of 6% to 7% on a reported basis. This guidance reflects current foreign exchange rates, which are expected to contribute approximately 50 basis points to top-line growth for the year. In addition, our reported sales guidance includes the contribution of approximately $320 million of anticipated MSA revenues from Vantiv. Excluding the impact of foreign exchange, the MSA revenues, and the exit of IV solutions in China, Baxter now expects operational sales growth of 3% to 4% for 2025. This is a reduction from our prior expectations of 4% to 5%, so I'd like to take a moment to walk through some of the assumptions underpinning this updated outlook. While we never want to lower expectations, our overall objective in reducing the outlook was to capture more of the potential downside risks associated with some of the factors we've discussed today, primarily around infusion pumps and fluid conservation. With respect to the Novum IQ infusion pump, as Heather mentioned, we have implemented a voluntary and temporary shift and implementation hold as we work through various updates for the Novum IQ LVP. We are working closely with our customers, and our goal is to resume shipments as soon as possible this year, pending our review of the process for implementing related corrections. In addition, we offer customers the option of our Spectrum infusion pump as an alternative. The low end of our current guidance assumes we don't resume shipments for Novum prior to the end of the year. With respect to fluid conservation, our current expectation is that fluid conservation levels will begin to lessen over the course of 2025 and into 2026. The low end of our guidance range assumes conservation levels remain similar to the first half of the year. Our teams continue to work closely with our customers to improve utilization as our supply levels have stabilized. At this time, we felt this was a prudent approach to take with respect to our sales guidance. We are hopeful that we can resume shipments of Novum prior to the year-end and that fluid conservation levels will continue to improve. Our teams are working diligently and expeditiously to execute on these objectives. The fundamentals of our business remain strong, and we are committed to accelerating sales growth and advancing innovation to drive incremental value. Operational sales guidance for the full year by reportable segment is as follows. For MPT, we now expect sales to increase 3% to 4%, reflecting the impact of the factors just discussed. We now expect sales in our HST segment to increase 3% to 4%. We continue to be pleased with the building momentum we are experiencing in HST, but we will continue to closely monitor the capital environment for any changes to hospital spending expectations. We now expect Pharmaceuticals to increase approximately 4% to 5%, which reflects some of the softness we're experiencing in the U.S. for injectables. The teams are executing on the new product launches and working with customers to reinforce the benefits and value proposition of injectables. We are optimistic these actions will drive improvements over time. Before turning to our outlook for other P&L line items, I wanted to provide our latest thoughts regarding assumptions around the impact from tariffs. Given what has been announced to date, we now estimate the net impact to our results from tariffs is approximately $40 million in 2025, which is a reduction from our prior estimate of $60 million to $70 million. This remains a dynamic area, and as such, we will continue to evaluate adjustments to our supply chain network and targeted pricing actions in response to various tariff impacts. Note these assumptions do not reflect any potential tariffs related to pharmaceutical products. As a reminder, the cash-related costs for tariffs will be higher than the P&L impact due to the capitalization and associated rollout timing for these costs. TSA income and other reimbursements are now expected to range between $170 million to $180 million. This increase reflects incremental services provided to Vantiv, with the related expenses reflected in the other lines of the P&L. We now expect full-year adjusted operating margin from continuing operations between 15% to 16%, which reflects the top-line sales reduction and the associated impact on our integrated supply chain costs from lower volumes flowing through our manufacturing facilities. We expect our non-operating expenses, which include net interest expense and other income and expense, to total between $210 million and $220 million. On a continuing operations basis, we now anticipate a full-year tax rate of approximately 18% to 18.5%. We expect our diluted share count to average approximately 515 million shares for the year, which does not contemplate any share repurchases. Based on all these factors, we have adjusted our outlook for full-year adjusted earnings on a continuing operations basis to $2.42 per share to $2.52 per diluted share from the prior guidance of $2.47 to $2.55 per share. This update reflects the impact from lowering our operating margin expectations, partially offset by a benefit from lowered interest expense and tax rate assumptions. Specific to the third quarter of 2025, we expect continuing operations sales growth of approximately 6% to 7% on a reported basis and 3% to 4% on an operational basis. For the third quarter, foreign exchange is expected to positively impact the top line by approximately 100 basis points, and MSA revenues are expected to total approximately $80 million. The China IV solutions exit is expected to impact top-line growth by approximately 70 basis points in the third quarter. On a continuing operations basis, we expect adjusted earnings per share of $0.58 to $0.62 per share. Now I'd like to turn it back over to Brent for some closing comments. Thank you, Joel, and thank you, Heather. As we look to the future, I want to share my thoughts on the recent news that Andrew Hyder will join Baxter in the coming weeks as our next CEO. The board led a comprehensive and thorough search and sought a range of experience in the candidates, including their track record of value creation, innovation, and transformation, and the ability to drive quality and operational excellence. We determined that Andrew is the right leader for Baxter's next chapter to build on our rich history and nearly a century of leadership. I've had the opportunity to spend time with Andrew during the process. Since the announcement, I've directly observed his character, deep respect for the Baxter brand, and passion about our team, our culture, and our mission to save and sustain lives. Andrew is a highly experienced public company CEO with a strong operational background. He will bring a fresh perspective and new ideas to the table from his 25 years of cross-industry experience. Throughout his career, he has consistently demonstrated an ability to advance innovation, drive growth, deliver commercial success, and create shareholder value. I can tell you that Andrew is very eager to join the Baxter team to make an impact and to meet many of you. Finally, I want to thank all of Baxter's 38,000 employees across the globe, our patients, customers, and other stakeholders. It's been my great honor to serve as Interim CEO for Baxter these last several months, and I'm pleased to continue to serve the company as Chair of the Board of Directors following Andrew's official start date. With that, we'll begin our question and answer session for the call. Thank you. We will now begin the question and answer session. If you have a question, please press star one on your touch-tone phone. Once again, star one. If you wish to remove yourself from the queue, press star one again. If you are using a speakerphone, please lift the handset to ask your question. So that we may be respectful of everyone's time, please limit your comments to one question with one follow-up question if necessary. We appreciate everyone's patience and would like to provide as many of you as possible the opportunity to ask a question. We will pause just a moment while the list is being compiled. I would like to remind participants that this call is being recorded, and a digital replay will be available on the Baxter International website for 60 days at www.baxter.com. Our first question comes from Robert Marcus at J.P. Morgan. Robert, your question, please. Great. Good morning, and thanks for taking the questions. Two for me. Maybe first on Novum. Maybe you could help us understand exactly how much weakness in the quarter was related to this, both on sales and on the operating margin line. It sounds like you have a voluntary temporary pause. How do you get comfort in the implied guidance for the rest of the year if it's a temporary pause? What happens to the guide if it turns out to be something more durable than that? Hi, Robbie. This is Heather. Good morning, and thanks for the question. There was no impact in the second quarter from Novum, as I said in the prepared remarks. We just made this decision voluntarily a couple of weeks ago, and I want to reinforce that we remain confident in the Novum platform. There are significant advantages with this pump over others on the market, and our customer receptivity to this platform, even in light of some of these field actions, has been positive. With patient safety and quality really at the forefront of everything that we do as a company, this decision aligns with our mission focus as an organization. I think it's important to recognize that infusion pumps are one of the most widely used electromechanical devices in the healthcare setting, and you're solving for millions of permutations around infusion therapy. This is relevant because when we assess the various care settings, the patient conditions, the thousands of drug combinations, fluid dynamics, human factors, all of that creates complexity. The field actions that we have out there pertain to a very small subset of clinical use cases and particular workflows that we've identified, and we're working closely with our customers and, importantly, leveraging data that we have from our connected ecosystem to understand where those are happening and working with our customers where we see those instances. Our decision to voluntarily institute the ship and implementation hold was really because we're working transparently with our customers, and we wanted to stop and pause and take their feedback and make sure that we're working through the interim mitigations with them. We don't need to have a permanent fix in place to release the ship hold. We're working through those interim mitigations as we speak, and that timeline of just those mitigations and corrections. We want to get this right, and our focus is on doing this the right way, like we always do here at Baxter. We've set expectations and timelines at this point that we're communicating that we feel like we can meet, and that's being done in close concert with the mitigations and corrections that we're putting in place, working with our customers. As I said again in the remarks, we're moving with care and speed and urgency, and the goal is to start shipping as soon as possible, targeting by the end of the year with our process overview, and certainly we'll keep you posted on that front. I want to reinforce that we believe that this is transient in nature, and I want you to know I'm still really excited about Novum, our continued ability to convert competitive accounts, and we've signed a number of new contracts recently. Our customers are looking forward to the Novum platform and the advantages that it offers. There's a lot of commercial momentum on capital and MPT, including Spectrum and Novum, and I think it really positions us well for when this hold is released. Yeah. Robert, if I could just add, your guidance question. The 2025 guidance assumes we're actually not shipping—I'm sorry, I said 2026. 2025 guidance assumes that we're actually not shipping another Novum pump, essentially the rest of the year, the low end of that. The low end of the guidance assumes no more Novums being shipped the rest of the year. I just, to be clear on that, your question is what else could run? We actually feel that is capturing the downside risk that we think is appropriate at this time. Great. Maybe just to tag along on that. It sounds like the upper end of the range does assume that there is a resumption. Joel, maybe you could bridge the lower EPS guide and what's happening down the P&L. It sounds like there's some other margin weakness in the business. As we follow that into 2026, I know after the Vantiv deal, there were some preliminary thoughts on 2026. What's the updated thought, and how do you want the street to take into account Novum here? Thanks a lot. Yeah. Thanks, Robert. I'd say a couple of things. First of all, the guide for 2025 contemplates really primarily the impact of both what we talked about here with Novum, but also, as we commented in our prepared remarks, the sort of the downside view of the fact that we're not going to have any further improvement in IV Fluid Conservation. What that impacts significantly is the amount of volume running through our manufacturing plants, and so therefore, really the operating income EPS part of that is really, number one, a big kind of is a volume impact that you're talking about for the rest of the year. Second piece is mix. As we talked about some of the products, we talked about growth in compounding versus injectables and pharma. Obviously, the pump sales themselves would have a positive impact on that, but from a mix perspective, that's really the second component to this. We do have continued price benefit. I want to be clear on that. We're actually, I would say, ahead of schedule, if you will, on some of the impact of the GPO pricing. Again, those two key areas are offsetting, which is really kind of, I'd say, the primary driver of our OI impact for the rest of this year. I'd say as we head into 2026, Robbie, the way I would look at this, obviously, given what we assume is going to be, again, a positive impact on volume as we head into next year. In other words, some of the fluid conservation we certainly expect will ease, as Heather indicated. We do, again, we're hopeful that we're going to be able to continue and resume shipping Novum. Those things, as we head into 2026 relative to 2025, are going to be a driver of some margin expansion relative to this year. Because again, volume matters a lot in this company. When you don't have it, it impacts downward, but when we do, it obviously drops through. That's one thing. I would say the second really is our continued efforts around stranded cost and the work that we're doing there, along with margin improvement programs in our supply chain, new product introductions, and again, just general growth that we anticipate heading into next year. We're not going to quantify what that is from a margin perspective, obviously, at this time, but certainly, we do expect we're going to have continued opportunities to expand our margins in 2026 relative to 2025. Appreciate it. Thanks a lot. Thanks, Robert. Thanks, Robert. And David Roman with Goldman Sachs is on the line with a question. David, please state your question. Thank you. Good morning, everybody. I wanted just to start with the broader evolution of business trends throughout the quarter. As we reflect on the May earnings call and the dynamics we introduced then, as well as some of the public disclosure throughout the quarter, it does sound like business trends did worsen materially as you progressed through the quarter. Can you maybe help us understand how things evolved and to what extent the exit rate in the business is reflected in the 1%, or did you exit the quarter at a growth rate below that? I have P&L follow-up. Yeah, David, I'll start and then have Joel chime in. Thanks for the question. This is Heather. We were very purposeful in the guidance that we set. I know originally maybe folks thought it was conservative, but we knew, particularly coming out of the hurricane, that the first half would be a bit choppy. It played out in IV Solutions, I would say, largely as we expected in the half. We had a strong first half. With our speed and urgency, we delivered every timeline coming out of North Cove that we had set, and our goal was to get the channel restocked as urgently and quickly as possible. We saw that in Q1, and then in Q2, the subsequent bleed down of that inventory across the channel. At the end user level, we really saw conservation pretty consistent through the half. I would say IV Solutions largely played out as we expected. A bit of a surprise in the quarter was U.S. injectables and pharma. We saw an elevated amount of IV push in the quarter that was a bit of a surprise. We expected a bit more recovery of that, quite honestly, and have now contemplated that in the guidance that's been set. We felt like at this point, it was prudent to be a little bit more reserved, and I would say measured in our approach for the second half, just based on the utilization and consumption backdrop that we're seeing across the market and the current macroeconomic environment. We put what I would call a realistic level loaded assumption, assuming what we saw in Q2 remains for the rest of the year. I think this is temporary. We fully expect that customers will resume normal practices, and we've started to see that already, but we're taking just a more prudent approach at this point. I'll let Joel comment on any other comments you want to make. Yeah. I think I would just reinforce, again, the point that we certainly had been very clear and purposeful on suggesting, "Hey, the second quarter is going to be our toughest comparison." As we headed into the year, the one to two, I know a lot of people, I think, thought that was, I don't know, super conservative all the way to a sandbag. We didn't see it that way, obviously. We actually, I think, came in, as Heather said, for the most part, where we anticipated. I think I would agree the injectables is the piece that was probably the biggest surprise. Very helpful. Maybe just a follow-up on the P&L. As we look at the TSA income interplay with stranded costs, you maybe help us think about the timelines of working down stranded costs and the process by which the TSAs roll off. How do you avoid a gap there whereby the TSA roll-off is faster than your ability to work down stranded costs? Yeah. Thanks, David. A couple of things I would say. First of all, we are on track with our progress towards mitigating our stranded costs. Let me start with that. One of the things we said during this year is we anticipated about a 40 basis point impact negatively from unsolved stranded costs, I'll call it. We're on track with that for what we anticipated for 2025. We're also on what I would consider on track to be, as we talked about, we're going to have them all removed by 2027. That's just to remind you of the commitment we made as it relates to that. The TSAs, think about those generally as about a 24-month period. Remember we closed the deal at the end of January this year. Think about that for the most part as about a 24-month time period while those TSAs will be in place. They will be working themselves down to some degree as we go towards the 24-month time period. David, that's where obviously the work that we're doing on the stranded cost is specifically designed to ensure we stay ahead of that, so to speak, so that we're not in a situation, to your point, where for whatever the reason, the TSA falls off and the cost hasn't been taken out. We're obviously working through a lot of stranded cost programs, and we've actually been working through that since the end of last year to really stay ahead of that, David. Like I said, I think we're on track. We're certainly well aware of that phenomenon, and I'm trying to stay well ahead of that, and I feel good about where we're at today. Very helpful. Appreciate all the perspective. Thank you. Thanks, David. Thanks, David. Travis Steed with BofA Securities is on the line with a question. Travis, please state your question. Hey, guys. Thanks for the question. First, the $100 million guide reduction on revenue this year, how much of that is Spectrum versus IV Solutions versus pharma? On the Spectrum, I guess that's like a $200 million product annualized. Maybe you're assuming $50 million of that comes out. What are you assuming on Spectrum fill-in versus kind of Spectrum loss there? You know what? Thanks for the question, Travis. I don't know that we're going to give specific guidance around the numbers themselves, but here's what I would say, just to reiterate. We're assuming in the low end of our guidance that we're not going to ship Novum. We are assuming in the low end of our guidance that we assume that we're going to ship some Spectrum, although some of that is going to be offset by things where we may end up, again, replacing Novum and there'll be a credit involved, etc. I would say that's sort of the best way to think about that. The other part of it, again, regarding the fluid conservation piece, essentially no improvement is assumed, if you will, over the next second half of the year in fluid conservation for the low end of our guidance. In the event there are improvements, which certainly, again, the team is working day and night in order to work with our customers for that to happen, that would be an improvement over the lower end of our guidance. Again, assuming the lower end of the guidance essentially assumes that there's not any improvement from where we are in the first half. That's, I think, the most clarity I can give you in terms of how to think about that. I'll just add one more bit of color. I've personally been working with a lot of our top customers, and they have minimum committed volumes and compliance with Baxter. They fully expect that they will either get back to those minimum committed volumes or we will get priced in the process. The contracts are pretty clear, and we'll be working with our customers directly as they resume practices. That gives me confidence that this is temporary in nature, and we factored in what should be a relatively modest forecast at this point. I guess the second question is more on the long term. You guys have talked about 4 to 5% revenue growth, clearly not there this year. What needs to go right to get back to that? Is the new CEO coming in kind of an opportunity to reevaluate the long-term growth model? Can you get back to hiking with the GDP's growth next year? I'll take a stab at a few things that I've personally been focused on and let Joel add some color. Baxter was really starting to hit a momentum in innovation and new product launches, and we're going to start to see that. We're starting to see some in 2025, moving into 2026 in a more aggressive cadence over the LRP. Innovation is something I'm definitely focused on and excited about. Some of these headwinds definitely will start to abate, I think, as we move into. 2026. We've got a number of transformational programs that we're focused on, and we'll be working with Andrew on reshaping the organization and the company for growth, driving both top and bottom line contributions. I think there's a lot to like about where we're headed as an organization. As we've talked about, we completed a lot of the strategic transformation items over the last few years that I think sets us up well to get through some of these temporary headwinds and then just execute like crazy. Joel? Yeah. Travis, I think a couple of things I would say. You're sort of, well, what gets you back to a 4 to 5? I think a few things there. Number one, clearly, as Heather's already said, we're very bullish on the Novum platform. Clearly, some of the impact we're talking about this year is related to that. As we've said before, we continue to be in a pump replacement cycle. The product itself, we've had a lot of competitive wins in that space. I think we certainly anticipate as we get through this, and we're doing the right thing for the right reasons. When the time comes and we continue to move forward, that's certainly something we anticipate being a driver of growth. Certainly, the volumes that we're seeing from a fluid perspective, these are key components of that. Clearly, we're not anticipating that remaining in the place that it is today. You asked about pharma a little bit. I think some of the pharma, we see some of the impacts that we talked about in the prepared remarks also as temporary in nature as it relates to, again, they're somewhat tied to some of the fluid discussions we've had. We certainly anticipate the focus on injectables, the new product launches in pharma, and really new product launches across the business itself, I think, are going to be our key elements of that. The second half of this year, from a pharma standpoint, we do anticipate compounding actually having a fair amount of pretty strong second half of the year. From a growth standpoint, we anticipate that kicking in as well. I think I would just say those are things that, as Heather said, part of the work that we're doing today in terms of driving innovation, really focusing on processes around new product introductions, the product lifecycle management, some of those things we're really excited about. As we think about the efficiencies, we're going to continue to drive through some of the transformation programs that really are looking to be reinvested into the business for growth. That's how I think about the opportunity to go back to that 4% to 5% growth, which we certainly believe is still very doable for this company. Great. Thanks for the long answer. Thanks, Travis. Vijay Kumar with Evercore ISI is on the line with a question. Vijay, please state your question. Hi, guys. Thanks for taking my question. Maybe my first one for Heather on MPT. IV fluids are off allocation. Why are hospitals still conserving fluids? Novum, I think the FDA letter noted two deaths. Historically, when we've had recalls, sometimes it's taken years. Any thoughts around how you would grade this current issue with Novum in terms of severity, whether this is something more severe, could take years, or is this more temporal, if you will? Yeah. I'll start, Vijay. Good morning. Thanks for the question. The change in MPT, as we've stated here throughout the call, is really driven by a more modest approach to fluid conservation. Hospitals are still conserving because, as you know, nothing changes fast in healthcare. We're working directly with our customers as they start to resume normal practices. If you think about it, and we've communicated this, we were in force majeure really through the end of May. We've been working over the last coming weeks with our customers on getting back to their minimum committed volumes, helping with our medical affairs and commercial teams to resume normal practices, and ensuring confidence around supply. The Vizient Partnership and Program was one of the first that we've launched, just emphasizing and reinforcing that we have good supply in the U.S. and confidence that they can resume normal practices. Regarding Novum, as I communicated earlier, this was something that we did voluntarily and temporarily just to start to work with our customers. The field actions that we're addressing are on a very small subset of clinical use cases and particular workflows that we've identified, and we saw through our quality listening systems, customer feedback, and honestly, our own infusion data. We're working through that. We do not have to have permanent fixes in place. We're working transparently with the regulators on this. I would say that this is very different than maybe what you've seen historically with competitors. We did this on our own to just take a pause and listen to our customers and look internally at the work that we needed to do. As Joel said, and as we've reflected in the guidance, right now we're assuming that we don't ship any Novum IQ Large Volume infusion Pumps for the rest of 2025. Our goal is to resume shipping as soon as possible and before the end of the year. We're hopeful to beat that. At this point, we thought that it was prudent to take that in for the second half of the year. That's helpful. Heather, and maybe Joel, one for you on operating margins down 80 basis points versus prior guidance. Is it possible for you to give us a bridge? I think the fiscal 2024 jump-off is 16.5%. I know we have a number of moving parts between TSA, MSA, expanded costs. There are some tariff assumptions, etc. If you don't mind building a bridge on the 16.5% jump-off versus 15.5%? Yeah. I would say there's a couple of key puts and takes of that. I'll just address the tariff point for a second. Again, we did actually lower our assumption of the net impact of tariffs. On the positive side, that is something that actually we are suggesting that our prior was $60 million to $70 million with a $65 million kind of midpoint, if you want to call it that. We talked about the fact that we're actually going to lower that. We're lowering that given what we know today and not including pharmaceutical tariffs. That's a $40 million impact. On the positive side, Vijay, that is a $25 million net positive impact. Again, as I mentioned earlier, the pricing is actually something that we continue to be on track with, and we've had a positive impact to this. The main impact, really and truly, is a volume impact on our integrated supply chain. From an absorption perspective, that's something that is, as volume declines, particularly in the fluids area, the absorption is impacted from an ISC standpoint. That's one of the really main drivers of this. The other one really is mix. I think some of the mix of products that we assumed, again, particularly driven by Pharmaceuticals in this case, this is something that is, I think, really those are the two main impacts, Vijay, of the drop, if you will, in the operating income percentage. I think main puts and takes there. On the EPS part, again, as we've indicated, it's the tax rate slowed down, but those are the main drivers. Thank you. All right. Thanks, Vijay. And Lawrence Biegelsen with Wells Fargo is on the line with a question. Lawrence, please state your question. Good morning. Thanks for fitting me in. Just one for Joel, one for Brent. So Joel, just the gross margin was a little lighter in Q2 than we expected. Just talk about how we should think about the gross margin the rest of this year. And Brent, just more color on what attracted the board to Andrew, given he looks like a strong candidate, but he doesn't have direct device experience. What were the skills and experiences that the board thought were most applicable to Baxter? How long do you think it'll take for him to get his arms around the business and provide an update to investors on his goals and priorities? Just lastly, the press release said his start date could be earlier than September 3. Any update on when he's starting? Thank you. Yeah. Why don't I start? Your question regarding gross margin. I think the thing I would probably encourage you to do is to actually think about this on an operating margin perspective. I guess I'll tell you why. There's a couple of, as we've talked about in the past, there's some reclassifications going back and forth between SG&A and our COGS lines. Also, the TSA revenues, which again are listed in a separate other line, some of those sit in SG&A, some of those sit in COGS. There's a lot of noise, I'm going to call it, between our gross margin and our SG&A lines. Really, truly, the way to look at this is on an operating income basis. Again, as we guided for the remainder of this year, I would say really and truly the primary drivers of that impact on the low end really is from volume. I think I already kind of commented on the tariff piece being a positive. That low end of the OI range really does assume that our fluid conservation does not come back and that obviously the impact from not shipping Novum. Those really are the main drivers of that. Obviously, you've got the, again, the positive from pricing, the positive from the TSA revenues, and then between those two items and the MSA dilution, those really are the main drivers. I just encourage you to think about that at an OI level because of the noise I just outlined between those other two lines. And Brent. Great. Yeah. And thanks for the question. We feel very good about Andrew coming in based on his experience and his background. You've probably looked at his record with ATS, value creation, and what he brought to that company. You probably saw that prior to that, he was with Danaher for a number of years. He's very steeped in the operating system and is a very disciplined operator. Prior to that, he was with GE. These are all strong operating environments. He brings that mentality and experience with him. As you hear from talking to us, Baxter is a big organization. It's a manufacturing organization with a lot of operational complexities. That operational discipline and skill set, I think, is a big advantage. I think he can bring a lot to the company. He's also a very energetic and passionate leader and moves at a quick pace. To your question about how long to come up to speed, I think he'll be a quick study. That's my assessment of his personality. He's a sharp guy. He's quick. I think it'll be a quick ramp. We're fortunate to have a great management team surrounding him who will be helping him come up to speed, who are very deep in the healthcare environment and know it very well. I'm sure he'll be tapping into that and absorbing it quickly. I think he'll also bring some fresh ideas to the company. That's part of the benefit. As far as the start date, we expect to be able to announce a date relatively soon. It should be a bit before the stated end of the month timeframe. That'll come shortly. I appreciate the question, and we're looking forward to having him on board soon. Thank you for the response. All right. Thanks, Lawrence. Our final question today comes from the line of Matt Miksic with Barclays. Matt, please state your question. Hey, thanks so much for fitting me in. You just covered a lot here. Just two quick clarifying questions on the fluid conservation efforts. I think last quarter, you mentioned that you'd sort of think of it, I think, a year like 10% hospitals still engaged in those programs. Maybe some color on what your current assumptions now assume. The other just was on just how one-time or transitory or I think there was a government contract that impacted pharma. How much of that is kind of lumpy and how much of that is sort of more just a little bit slower demand that you're baking into the rest of the year? Thanks so much. Yeah. I can start that. Thank you for the question. We've assumed at the low end of our guidance regarding IV Fluid Conservation that we maintain about -20% regarding IV Fluid Conservation. We expect, based on feedback from customers, that hopefully we do better than that, but we're taking a very modest and prudent approach at this point, just based on the utilization backdrop and assuming minimal improvement throughout the year. That's regarding IV Fluid Conservation versus the -10% that we had stated before. The pharma government order, we've taken it out just based on some of the recent trends with government ordering. There was an order last year, and we're assuming that order does not repeat this year. Thank you so much. Thank you. All right. Thank you, Matt. Ladies and gentlemen, that is the end of our Q&A session, and this also concludes today's conference call with Baxter International. Thank you for participating. Thank you.