Financial Data and Key Metrics Changes - Third quarter 2025 global sales from continuing operations totaled $2.8 billion, increasing 5% on a reported basis and 2% on an operational basis [17] - Total company adjusted earnings from continuing operations were $0.69 per share, reflecting a 41% increase versus the prior year [31] - Adjusted operating margin from continuing operations was 14.9%, improving 40 basis points compared to the prior year [28] Business Line Data and Key Metrics Changes - Sales in the Medical Products & Therapies (MPT) segment were $1.3 billion, declining 1% due to softness in Infusion Therapies and Technologies [18] - Infusion Therapies and Technologies division sales totaled $1 billion, declining 4% primarily due to lower infusion pump sales [18] - Advanced Surgery sales grew 11% globally, totaling $306 million, driven by strong demand for hemostats and sealants [20] - Healthcare Systems & Technologies (HST) sales increased 2% to $773 million, with Care and Connectivity Solutions growing 3% [23] - Pharmaceuticals segment sales totaled $632 million, increasing 7%, with Injectables and Anesthesia division growing 3% [25] Market Data and Key Metrics Changes - U.S. demand for IV Solutions remains below pre-Hurricane Helene levels, with expectations for further recovery at a moderate pace [20] - Total U.S. capital orders for Care and Connectivity Solutions increased 30% compared to the prior year [24] - The company has not observed a slowdown in U.S. hospital capital spending despite broader macroeconomic uncertainty [24] Company Strategy and Development Direction - The company is focusing on stabilizing business areas that require increased attention, strengthening the balance sheet, and driving a culture of continuous improvement [11][14] - A new growth and performance system, Baxter GPS, has been launched to drive continuous improvement and efficiency [14] - The company plans to reduce the quarterly dividend to $0.01 per share to free up cash for deleveraging [13][32] Management's Comments on Operating Environment and Future Outlook - Management acknowledges that current performance is unsatisfactory and emphasizes the need for immediate actions and long-term solutions [9] - The company expects operational sales growth of 1%-2% for 2025, reflecting a reduction from prior expectations [34] - Management remains confident in the strength of the IV Solutions business over the medium and long term [20][76] Other Important Information - The company is actively working to resolve issues related to the Novum IQ Large Volume Pump, which has led to a hold on deliveries and installations [12][19] - The adjusted tax rate for the quarter was 5.1%, driven by the release of reserves and discrete benefits [31] Q&A Session Summary Question: Vision for Baxter and future changes - Management emphasizes a focus on stabilizing business areas, strengthening the balance sheet, and driving continuous improvement through the new GPS system [40][41] Question: Potential for growth in 2026 - Management anticipates growth but does not provide specific guidance for 2026, highlighting the importance of customer relationships and market dynamics [44] Question: Impact of Novum on guidance - The hold on Novum is affecting sales, and management is working urgently to address outstanding field actions [58] Question: Free cash flow generation - Management expects continued positive free cash flow, particularly in the fourth quarter, and is focused on improving working capital [63][64] Question: Hospital CapEx trends - Management has not observed a slowdown in hospital capital spending, with robust order growth in the capital business [78]

Financial Data and Key Metrics Changes - Third quarter 2025 global sales from continuing operations totaled $2.8 billion, increasing 5% on a reported basis and 2% on an operational basis [17] - Adjusted earnings from continuing operations were $0.69 per share, reflecting a 41% increase versus the prior year [30] - Adjusted operating margin on a continuing operations basis was 14.9%, improving 40 basis points compared to the prior year [29] Business Line Data and Key Metrics Changes - Sales in the Medical Products & Therapies (MPT) segment were $1.3 billion, declining 1% due to softness in Infusion Therapies and Technologies [18] - Infusion Therapies and Technologies division sales totaled $1 billion, declining 4% primarily due to lower infusion pump sales [18] - Advanced Surgery sales totaled $306 million, growing 11% globally, driven by strong demand for hemostats and sealants [20] - Pharmaceuticals segment sales totaled $632 million, increasing 7%, with Injectables and Anesthesia division growing 3% [24] Market Data and Key Metrics Changes - U.S. demand for IV Solutions remains below pre-Hurricane Helene levels, with expectations for further recovery at a moderate pace [20] - Total U.S. capital orders for Care and Connectivity Solutions increased 30% compared to the prior year, indicating robust demand [23] - The company anticipates continued softness in specialty mix products within Pharmaceuticals, impacting overall growth [33] Company Strategy and Development Direction - The company is focusing on stabilizing business areas that require increased attention, strengthening the balance sheet, and driving a culture of continuous improvement [11][14] - A reduction in the quarterly dividend to $0.01 per share is planned to free up cash for deleveraging [13][31] - The company plans to launch an Investor Day in 2026 to provide deeper insights into long-term strategy and financial outlook [40] Management's Comments on Operating Environment and Future Outlook - Management acknowledges current performance challenges and emphasizes the need for immediate actions and long-term solutions [9] - The company expects operational sales growth of 1 to 2% for 2025, reflecting updated expectations due to evolving business dynamics [33] - Management remains confident in the strength of the IV Solutions business over the medium and long term despite current challenges [20][76] Other Important Information - The company has undergone significant transformation in recent years, becoming more streamlined and focused [11] - The introduction of Baxter GPS, a new growth and performance system, aims to drive continuous improvement across the organization [14] Q&A Session Questions and Answers Question: Vision for Baxter and future changes - Management emphasizes a focus on stabilizing business areas, strengthening the balance sheet, and driving a culture of continuous improvement [39][40] Question: Potential for positive growth in 2026 - Management anticipates growth but is not providing specific guidance for 2026 at this time [43] Question: Impact of Novum on guidance - The hold on Novum IQ Large Volume Pump is affecting sales, leading to customer evaluations of alternative solutions [57] Question: Free cash flow generation - Management expects continued positive free cash flow, particularly in the fourth quarter, and is focused on improving working capital [63][64] Question: Hospital CapEx and political impacts - There has been no observed slowdown in hospital capital spending despite political uncertainties, with robust order growth reported [78]

Financial Data and Key Metrics Changes - Third quarter 2025 global sales from continuing operations totaled $2.8 billion, increasing 5% on a reported basis and 2% on an operational basis [22] - Adjusted earnings from continuing operations were $0.69 per share, reflecting a 41% increase versus the prior year [35] - Adjusted operating margin on a continuing operations basis was 14.9%, improving 40 basis points compared to the prior year [34] Business Line Data and Key Metrics Changes - Medical Products & Therapies segment sales were $1.3 billion, declining 1% due to softness in Infusion Therapies and Technologies [23] - Infusion Therapies and Technologies division sales totaled $1 billion, declining 4% primarily due to lower infusion pump sales [23] - Advanced Surgery sales grew 11% globally, totaling $306 million, driven by strong demand for hemostats and sealants [26] - Pharmaceuticals segment sales increased 7% to $632 million, with Injectables and Anesthesia division growing 3% [29] Market Data and Key Metrics Changes - U.S. demand for IV Solutions remains below pre-Hurricane Helene levels, with expectations for moderate recovery [25] - Total U.S. capital orders for Care and Connectivity Solutions increased 30% compared to the prior year [28] - The company anticipates continued fluid conservation in 2026, impacting IV Solutions demand [25] Company Strategy and Development Direction - The company is focusing on stabilizing business areas, strengthening the balance sheet, and driving a culture of continuous improvement [14][19] - A reduction in the quarterly dividend to $0.01 per share is planned to free up cash for deleveraging [16][36] - The company aims to improve operational execution and enhance innovation through the newly launched Baxter GPS system [18][19] Management's Comments on Operating Environment and Future Outlook - Management acknowledges current performance challenges and emphasizes the need for immediate actions and long-term solutions [12] - The company expects operational sales growth of 1 to 2% for 2025, reflecting updated expectations due to evolving business dynamics [39] - Management remains confident in the strength of the IV Solutions business despite current demand challenges [25][26] Other Important Information - The company has undergone significant transformation in recent years, becoming more streamlined and focused [14] - The anticipated impact of the kidney care sale is expected to help eliminate related costs [4] - The company is closely monitoring macroeconomic uncertainties, including tariffs [4] Q&A Session Summary Question: Vision for Baxter and future changes - Management emphasizes a focus on stabilizing business areas, strengthening the balance sheet, and driving continuous improvement [46][47] Question: Potential for growth in 2026 - Management anticipates growth but does not provide specific guidance for 2026 [50] Question: Impact of Novum on guidance - The hold on Novum IQ Large Volume Pump is affecting sales and customer responses, leading to a cautious outlook [66] Question: Free cash flow generation - Management expects continued positive free cash flow, particularly in the fourth quarter, and is focused on improving working capital [71][72] Question: IV fluid conservation post-Hurricane Helene - Demand remains below pre-Hurricane Helene levels, with expectations for gradual recovery [82][85] Question: Hospital CapEx trends - No signs of hesitancy in hospital capital spending have been observed, with robust order growth reported [86]