Q4 2021 Baxter International Inc Earnings Call

Speaker 1: Good morning ladies and gentlemen and welcome to Baxter International's fourth quarter 2021 earnings conference call.

Good morning, ladies and gentlemen, and welcome to Baxter International's fourth quarter 2021 earnings conference call. Your lines will remain in a listen only mode until the question and answer segment up today's.

Speaker 1: 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 the star and the number 1 on your touch tone phone.

Call at that time, if you have a question you would need to press the star and the number one on your Touchtone phone if anyone should require assistance. During the conference. Please press Star then zero on your Touchtone phone as a reminder, this call is being recorded by Baxter.

Speaker 1: If anyone should require assistance during the conference, please press star, then zero on your touchtone phone.

Speaker 1: As a reminder, this call is being recorded by Baxter and is copyrighted material.

And is copyrighted material it cannot be recorded or rebroadcast without baxter's permission. If you have any objections. Please disconnect at this time.

Speaker 1: It cannot be recorded or rebroadcast without Faxer's permission. If you have any objections, please disconnect at this time.

Speaker 1: I would now like to turn the call over to Ms. Clara Trachman, Vice President Investor Relations at Baxter International. Ms. Trachman, you may begin.

I would now like to turn the call over to MS. Clare Trackman, Vice President Investor Relations at Baxter International MS. Trackman you may begin.

Speaker 2: Good morning and welcome to our fourth quarter 2021 earnings conference call. Joining me today are Joelle Madoff, Baxter's Chairman and Chief Executive Officer, Jay Sicaro, Baxter's Chief Financial Officer and Giuseppe Accoli, Baxter's Chief Operating Officer.

Good morning, and welcome to the fourth quarter of 2020 One earnings conference call. Joining me today are Joe Almeida, Baxter's, Chairman and Chief Executive Officer, Jason <unk>.

<unk>, Chief Financial Officer, and just Cepheid, calling Baxter's Chief operating officer.

Speaker 2: On the call this morning, we will be discussing back to fourth quarter and full year 2021 financial results, along with our financial outlook for 2022.

On the call. This morning, we will be discussing baxter's fourth quarter and full year 2021 financial results along with our financial outlook for 2022.

Speaker 2: With that, let me start our prepared remarks by reminding everyone that this presentation, including comments regarding our financial outlook for the first quarter and full year 2022, including the anticipated impact of COVID and inflationary pressures on this outlook, the recent acquisition of Pilram, including anticipated cost interduties and future net leverage targets, and the overall impact of COVID-19.

With that let me start our prepared remarks by reminding everyone that this presentation, including comments regarding our financial outlook for the first quarter and full year 2022, including the anticipated impact of Covid and inflationary pressures on this outlook. The recent acquisition of Hill, ROM, including anticipated cost synergies and future.

Your net leverage target, new product developments or launches business development and regulatory matters contain.

Speaker 2: New product development or launches, business development and regulatory matters contain forward-looking statements that involve risks and uncertainties. And of course, our actual results could differ materially from our current expectations.

Forward looking statements that involve risks and uncertainties and of course, 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.

Speaker 2: Please refer to today's press release and our SEC filings for more details concerning factors that could cause actual results to differ materially.

Speaker 2: In addition, on today's call, non-GAAP financial measures will be used to help investors understand factor's ongoing business performance. A reconciliation of the non-GAAP financial measures being discussed today to the comparable GAAP financial measures is included in our earnings release issued this morning and available on our website.

A question on today's call non-GAAP financial measures will be used to help investors understand <unk> ongoing business performance.

A reconciliation of the non-GAAP financial measures being discussed today to the comparable GAAP financial measures is included in our earnings release issued this morning and available on our website.

Speaker 2: As mentioned in our press release this morning, following Baxter's acquisition of Hillrom on December 13, 2021, Baxter's fourth quarter and full-year 2021 financial results include Hillrom financial results for the last 19 days of the quarter ended December 31, 2021.

As mentioned in our press release. This morning following back to the acquisition of pillar on December 13, 2021 that this fourth quarter and full year 2021 financial aid.

They include Hill Rom's financial results for the last 19 days of the quarter ended December 31 2021.

Speaker 2: So around financial results for these periods are reported as a new operating segment. In addition to that, existing three geographic.

Hill Rom's financial results for these periods are reported as a new operating segment. In addition to abaxis existing three geographic segments.

Speaker 2: On the call this morning, we will be discussing operational sales growth, which for the fourth quarter and full year 2021, adjusts for the impact of foreign exchange, the December 2021 acquisition of Hill

On the call. This morning, we will be discussing operational sales growth, which for the fourth quarter and full year 2021 adjust for the impact of foreign exchange.

Number 2021 acquisition of Hill ROM and the February 2021 acquisition of the rights to Calix and backstop for specified territories outside of the U S. Later in the call Dave will discuss our guidance for the first quarter and full year 2020 to.

Speaker 2: Later in the call, Jay will discuss our guidance for the first quarter and full year 2022. Operational sales growth for 2022 will exclude the impact of foreign exchange and the acquisition of hill realm. Historical 2021 quarterly sales for hill realm have been posted to the investor section of our website. Now I'd like to turn the call over to Joe.

Operational sales growth for 2022.

Third the impact of foreign exchange and the acquisition of Hill ROM Historical 2021 quarterly sales for Hill ROM have been posted to the investors section of our website now I'd like to turn the call over to Jeff.

Speaker 3: Thank you, Claire. Good morning, everyone, and thank you for joining today's call. As always, I hope that you and your loved ones are healthy and safe.

Thank you Blair good morning, everyone and thank you for joining today's call as always I hope that you and your loved ones are healthy and safe I will start this morning, with some perspective on our performance last year in future trajectory J will take a closer look at the financials and share our outlook for the first quarter.

Speaker 3: We start this morning with some perspective on our performance last year and future trajectory. Jay will take a closer look at the financials and share our outlook for the first quarter in full year 2022. Then we'll take your questions.

<unk> and full year 2022, then we will take your questions. As you. All know this is our first earnings call SKU. So wondering if youre wrong. The next inflection point in Baxter's multiyear transformation. The combination further extends our already diverse med tech portfolio improved provides a pretty.

Speaker 3: As you all know, this is our first earnings call since acquiring HIRAM, the next inflection point in Baxter's multi-year transformation. The combination further extends our already diverse MedTech portfolio and provides opportunities to broaden our reach, both geographically and across the care continuum.

Unity is to broaden our reach both geographically and across the care continuum.

Speaker 3: Importantly, it also unlocks exciting new possibilities for connected care innovation across our product lines with the potential to spark clinical insights, enhanced patient outcomes and increase workflow efficiency.

Importantly, it also unlocks exciting new possibilities for connected care innovation across our product lines with the dasher through spark clinical insights enhance patient outcomes and increase workflow efficiencies.

Speaker 3: In short, it holds the promise of greater value for all of our stakeholders, from patients and clinicians to our employees and investors. The deal closed on December 13th, so our Q4 and full year 2021 financials reflect 19 days of contribution from HILRA.

In short <unk> holds the promise of greater value for all of our stakeholders from patients and clinicians to our employees and investors.

The deal closed on December 13th So our Q4 and full year 2021 financials reflect 19 days of contribution from Hill ROM.

Speaker 3: Looking at company-wide performance, Baxter delivered fourth quarter 2021 sales growth of 10% on a reported basis, 12% at constant currency, and 4% at operational rate.

Looking at company wide performance Baxter delivered fourth quarter 2021 sales growth of 10% on a reported basis, 12% at constant currency and 4% at operational rates fourth quarter adjusted earnings.

Speaker 3: fourth quarter adjusted earnings per share were $1.04. Up 30% year over year, Hill Rum contributed $212 million in sales and $0.08 of adjusted earnings per share in the quarter.

First there were $1.04 up 30% year over ear she'll ROM contributed $212 million in sales and eight since our adjusted earnings per share in the quarter.

Speaker 3: For full year 2021, sales growth was 10% on a reported basis, 7% on a constant currency basis, and 5% on an operational basis. On the bottom line, adjusted earnings per share of $3.61 increased 17% year over year, which also reflects the contribution of HIROM.

For full year 2021 sales growth was 10% on a reported basis, 7% on a constant currency basis, and 5% on an operational basis on.

On the bottom line adjusted earnings per share of $3 61.

Increased 17% year over ear, which also reflects the contribution of Hill ROM.

Speaker 3: Growth for both the quarter and year reflect the ongoing, somewhat erratic impact of COVID-19, which negatively affected top-line sales for certain businesses while fueling demand for others, particularly later in the fourth quarter as the Omicron variant surged.

Growth for both the quarter and year reflect the ongoing somewhat erratic impact of COVID-19, which negatively affected top line sales for certain businesses, while fueling demand for others, particularly later in the fourth quarter as the omicron variant Serge.

Our top line performance for the year continues to demonstrate the diversity and durability of our portfolio, which allowed us to deliver operational sales growth of 5% for the year.

Speaker 3: Our top-line performance for the year continues to demonstrate the diversity and durability of our portfolio, which allowed us to deliver operational sales growth of 5% for the year.

Speaker 3: Demand across both our legacy Baxter and legacy Huron businesses is strong. During the fourth quarter and continuing through the start of this year, we have been experiencing a higher than normal rate of back orders due to certain supply chain limitations and staffing related challenges in our plans resulting from high rates of absenteeism amid the rising cases of

Demand across both our legacy Baxter and legacy Huron businesses.

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During the fourth quarter and continuing through the start of this year, we have been experiencing a higher than normal rate of bad quarters due to certain supply chain limitations and the staffing related challenges in our plants, resulting from high rates of absenteeism amid the rising.

Cases of Covid.

Speaker 3: We are working expeditiously to address the situation and anticipate continued improvement in the coming weeks.

We're working expeditiously to address this situation and anticipate continued improvement in the coming weeks.

Speaker 3: As we have discussed throughout the year, our cost structure has been negatively impacted by rising rates of inflation, as well as an increasingly challenging supply chain network, which has at times resulted in expedited shipments and extraordinary steps to procure necessary components. Overall, our teams have worked diligently to offset many of these pressures. Our fourth quarter results reflect higher than expected freight costs. Given the critical and essential nature of our products, we made decisions to expedite product to our customers to ensure we stay true to our mission.

As we have discussed throughout the year, our cost structure has been negatively impacted by rising rates of inflation as well as an increasingly challenging supply chain network, which has at times resulted in expedited shipments an extra ordinary.

Steps to procure necessary components, while our teams have worked diligently to offset many of these pressures our fourth quarter results reflect higher than expected freight costs, given the critical and essential nature of our products we made decisions.

To expedite product to our customers to ensure we stay true to our mission, which means prioritizing the needs of patients and clinicians with the band on the steady access to our lifesaving products, we will never compromise on this commitment.

Speaker 3: which means prioritizing the needs of patients and clinicians who depend on steady access to our life-saving products. We will never compromise on this commitment.

Speaker 3: We are realistic about the supply chain challenges that continue to test the global industry as a whole, and we are laser focused on addressing them successfully now and going forward. We are in the process of implementing new measures in procurement and logistics, including evaluating opportunities to pass through certain costs in selected geographies that will enhance performance and deliver value to all stakeholders, both in the near term and long run.

We are realistic about the supply chain challenges as they continue to test that global industry as a whole and we are laser focused on addressing them successfully now and going forward. We are in the process of implementing new measures in procurement and logistics, including evaluating opportunities.

The pass through of certain costs in selected geographies that will be enhanced performance and delivers value to all stakeholders. Both in the near term and long run we are focused on making sound choices to promote our long term success as a viable grew.

Speaker 3: We're focused on making sound choices to promote our long-term success as a viable, growing enterprise.

So in enterprise.

Speaker 3: We're building off our solid foundation and remain focused on executing against our multi-year transformation. This transformation has bolstered our operational efficiency and given us the tools to navigate through these challenging times with the resilience and tenacity this team has demonstrated over the course of the last two years.

We're building off our solid foundation and remain focused on executing against our multiyear transformation. This transformation has bolstered our operational efficiency and given us the tools to navigate through these challenging times with the resilience and tenacity. This team has demonstrated.

Over the course of the last two years.

Speaker 3: Beyond this, the acquisition of HealROM introduced crucial growth drivers across multiple fronts. The integration process is moving forward productively. We are already identifying opportunities for geographic expansion as well as synergies to drive meaningful post-production and margin expansion. And we are advancing connected care across our newly expanded capabilities.

Beyond this the acquisition of a hill ROM introduces crucial growth drivers across multiple fronts. The integration process is moving forward productively, we're already identifying opportunities for geographic expansion as well as synergies to drive meaningful cost reduction and margin expansion and.

We are advancing connected care across our newly expanded capabilities.

Speaker 3: As always, we continue to evaluate our portfolio to ensure the businesses we operate are aligned with our long-term strategic objective to accelerate top-line growth and expand margins.

As always we continue to evaluate our portfolio to ensure the businesses. We operate are aligned with our long term strategic objective to accelerate topline growth and expanded margins.

Speaker 3: This commitment was clearly demonstrated with the HIROM acquisition, which augmented and strengthened our underlying portfolio. As part of this ongoing process, to the extent we identify areas that do not align with our long-term objectives, we will look to exit or divest these businesses while also continuing to identify new opportunities to enhance future performance. We recognize that innovation is at the core of any successful enterprise, and we're focused on introducing new products that address the evolving needs of our customers and patients. Some of these include the anticipated U.S. launch of our Novum IQ smart pump this year.

This commitment was clearly demonstrated with the hue ROM acquisition, which augmented any strengthened our underlying portfolio as part of this ongoing process to the extent, we identify areas that do not align with our long term objectives, we will look to exit.

Or divest these businesses, while also continuing to identify new opportunities to enhance future performance. We recognize that innovation is at the core of any successful enterprise and we are focused on introducing new products that address the evolving needs of our customers and patients.

Some of these include the anticipated U S launch of our Novum IQ Smart pump this year as well as our true view connected digital solutions for our price mix too.

Speaker 3: as well as our TrueView connected digital solutions for our Prismax 2.

Speaker 3: Continuous renal replacement therapy technology, which is in early stage launch right now in the U.S. and Europe , Middle East and Africa.

Continuous renal replacement therapy technology, which is in early stage launch right now in the U S and Europe Middle East and Africa.

Speaker 3: Obviously, we assess our performance across multiple dimensions, just as we must continually strengthen our performance as a thriving and resilient enterprise. Our mission also demands our continued leadership as a corporate system. 2021 marked the launch of our 2030 Corporate Responsibility Commitment, comprising 10 key goals for the next decade and beyond, focused on three key action areas.

Obviously, we assess our performance across multiple dimensions, just as we must continually strengthen our performance as a thriving and resilient enterprise. Our mission also demands our continued leadership as a corporate citizen 2021 Mark.

The launch of our 2030 corporate responsibility commitment comprising Dan key goals for the next decade and beyond focused on three key action areas.

Speaker 3: empower our patients, protect our planet, and champion our people and communities. We have also taken significant steps in the past year to advance or activate change today or act initiative to advance racial justice within Baxter and across the communities and markets we serve.

Bauer, our patients protect our planet and champion our people and communities. We have also taken significant steps in the past should advance our activating changed the date.

Act initiative to advance ratio justice within Baxter and across the communities and markets we serve.

Speaker 3: Our progress as both a business and as a corporate citizen is entirely the commitment of our employees worldwide. This outstanding team has achieved so much in several years from building our transformation to stepping up tirelessly in the face of COVID-19. Now it stands prepared to power a new chapter of momentum and growth.

Our progress as both a business and as a corporate citizen is due entirely to the commitment of our employees worldwide.

Outstanding team has achieved so much in several years from building our transformation to be stepping up tirelessly in the face of COVID-19, notwithstanding prepared our new chapter of momentum and growth with these teams proven track record.

Speaker 3: With this team's proven track record, I'm confident in our ability to deliver on the opportunities we have worked so hard to create.

<unk> in our ability to deliver on the opportunities. We have worked so hard to create we will be sharing much more about our strategic trajectory at our Investor Conference. Later this year now I will turn it over to Jay to share a closer look at our performance and outlook.

Speaker 3: We will be sharing much more about our strategic trajectory at our investor conference later this year. Now I will turn it over to Jay to share a closer look at our performance and outlook.

Speaker 4: Thanks, Joe. And good morning, everyone. As Joe mentioned, we're pleased with our fourth quarter results, particularly in light of ongoing pandemic and global supply chain disruption.

Thanks, Joe and good morning, everyone as Joe mentioned, we're pleased with our fourth quarter results, particularly in light of ongoing pandemic and global supply chain disruptions.

Speaker 4: that we experienced during the quarter. Fourth quarter, 2021 global sales of $3.5 billion, advanced 10% on a reported basis, 12% on a constant currency basis, and 4% operationally. Sales came in at the high end of our guidance range, which is in line with commentary we shared in early January and underscores the essential nature and durability of our portfolio.

We experienced during the quarter fourth quarter of 2021 global sales of $3 5 billion advanced 10% on a reported basis, 12% on a constant currency basis, and 4% operationally sales came in at the high end of our guidance range, which is in line with commentary we shared in early January .

And underscores the essential nature and durability of our portfolio sales growth. This quarter reflects the benefits of revenues associated with the manufacturing of Covid vaccines strength in medication delivery renal care O U S.

Speaker 4: Sales growth this quarter reflects the benefits of revenues associated with the manufacturing of COVID vaccines, strength in medication delivery, renal care, OUS sales of Kalix, Doxil, which totaled approximately $35 million in the quarter, and a contribution of $212 million from Hillrun.

Sales of Calix, docile, which totaled approximately $35 million in the quarter and a contribution of $212 million from Hill ROM.

Speaker 4: On the bottom line, adjusted earnings increased 30% to $1.04 per share. Results in the quarter reflected a contribution of $0.08 per share from Hillrun, inclusive of incremental interest expenses related to the transaction.

On the bottom line adjusted earnings increased 30% and $1 <unk> per share results in the quarter reflected a contribution of <unk> <unk> per share from Hill ROM inclusive of incremental interest expenses related to the transaction as well as unplanned foreign exchange losses totaling <unk> <unk>.

Speaker 4: as well as unplanned foreign exchange losses totaling $0.04.

Speaker 4: and higher than expected freight costs of $0.05.

And higher than expected freight costs of five.

Speaker 4: As Joe mentioned, we incurred significant expedited freight costs late in the quarter as cases of COVID-19 surge.

As Joe mentioned, we incurred significant expedited freight costs late in the quarter as cases of COVID-19 surge.

Speaker 4: Now, I'll walk through performance by our regional segments and key product categories.

Now I'll walk through performance by our regional segments in key product categories, starting with sales by operating segment sales in the Americas increased 5% on both the constant currency and operational basis sales in Europe , Middle East and Africa grew 5% on a constant currency basis and 1% opera.

Speaker 4: Starting with sales by operating segment, sales in the Americas increased 5% on both the constant currency and operational basis.

Speaker 4: Sales in Europe , Middle East, and Africa grew 5% on a constant currency basis and 1% operationally. And sales in our APAC region advanced 6% on a constant currency basis and 5% on an operational basis. As Claire mentioned, Hillrun's financial results are reported as a new operating segment in addition to Baxter's existing three geographic segments.

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Sales in our APAC region advanced 6% on a constant currency basis, and 5% on an operational basis as Claire mentioned Hill Rom's financial results are reported as a new operating segment. In addition to <unk> existing three geographic segments.

Speaker 4: Moving on to performance by key product category, note that for this quarter, constant currency growth is equal to operational sales growth for all global businesses except for our pharmaceuticals business for which we will provide both constant currency and operational growth adjusting for the acquisition of rights in select territories outside the U.S. for Calix Doxil.

Moving on to performance by key product category note that for this quarter constant currency growth is equal to operational sales growth for all global businesses, except for our pharmaceuticals business for which we will provide both constant currency and operational growth adjusting for the acquisition of rights in select territories outside the U S for calix console.

Speaker 4: Global sales for renal care were $1 billion, increasing 4% on a constant currency basis. Performance in the corridor was driven by global growth in both our HD and PD businesses. PD benefited from year-over-year improvement in global patient volumes, despite persistent pressures from increased mortality rates in ESRD patients, delays in new patient diagnoses, and market-wide staffing shortages.

Global sales for renal care were 1 billion, increasing 4% on a constant currency basis performance in the quarter was driven by global growth in both our HD NPD businesses PD benefited from year over year improvement in global patient volumes. Despite persistent pressures from increased mortality rates in <unk>.

<unk> D patients delays in new patient diagnoses and market wide staffing shortages patient growth improved sequentially throughout the year with Q4, representing the highest patient growth in 2021 renal care sales in the quarter also benefited from mid single digit growth in our HD business, primarily driven.

Speaker 4: Patient growth improves sequentially throughout the year, with Q4 representing the highest patient growth in 2021. Renal care sales in the quarter also benefited from mid-single-digit growth, and our HD business primarily driven by increased international sales of dialyzed...

By increased international sales of dialyzer.

Speaker 4: We expect that higher mortality rates and delays in new patient diagnoses resulting from the pandemic will continue to somewhat dampen the rate of new patient growth in 2022, although we do anticipate these rates to improve from 2021 level.

We expect that higher mortality rates and delays in new patient diagnoses, resulting from the pandemic will continue to somewhat dampen the rate of new patient growth in 2022, although we do anticipate these rates to improve from 2021 levels.

Speaker 4: Sales and medication delivery of $784 million increased 6% on a constant currency basis.

Sales in medication delivery of $784 million increased 6% on a constant currency basis.

Speaker 4: Strong global growth in this business reflects continued recovery in the pace of hospital admissions compared to pre-COVID levels, as well as increased demand for large-volume infusion pumps and small-volume parenterals. For the year, we estimate that U.S. hospital admissions were down mid-single digits compared to pre-COVID levels.

<unk> global growth in this business reflects continued recovery in the pace of hospital admissions compared to pre COVID-19 levels as well as increased demand for large volume infusion pumps and small volume parental roles for the year, we estimate that U S Hospital admissions were down mid single digits compared to pre COVID-19 levels.

Speaker 4: Pharmaceutical sales of $604 million advance 8% on a constant currency basis and 2% operationally.

Pharmaceutical sales of $604 million advanced 8% on a constant currency basis and 2% operationally.

Speaker 4: Performance in the quarter was driven by demand for our international pharmacy compounding business, growth and anesthesia as our international markets continue to recover from COVID-19 and the contribution from OUS sales of Calix Doxil.

Performance in the quarter was driven by demand for our international pharmacy compounding business growth in anesthesia as our international markets continued to recover from COVID-19, and the contribution from O U S sales of Calix Docs all.

Speaker 4: This growth is partially offset by declines in our U.S. generic injectables portfolio business related to lower surgical procedures and increased competitive activity for certain molecules.

This growth was partially offset by declines in our U S generic injectables portfolio business related to lower surgical procedures and increased competitive activity for certain molecules.

Moving to clinical nutrition total sales were $249 million, increasing 4% on a constant currency basis performance in the quarter was driven by the benefit of new product launches within our broad multi chambered product offering.

Speaker 4: Moving to clinical nutrition, total sales were $249 million, increasing 4% on a constant currency basis. Performance in the quarter was driven by the benefit of new product launches within our broad multi-chamber product offering.

Speaker 4: Sales in advanced surgery were $255 million or flat on a constant currency basis. Within the quarter, we saw a strong growth in some of our international businesses, but this was offset by performance in the U.S. as surgical procedures, particularly in the second half of December , came in below our expectations due to the impact from pandemic, along with staffing shortages.

Sales in advanced surgery, with $255 million or flat on a constant currency basis within the quarter. We saw strong growth in some of our international businesses, but this was offset by performance in the U S. As surgical procedures, particularly in the second half of December came in below our expectations due to the.

Packed from pandemic, along with staffing shortages.

Speaker 4: Sales in our acute therapies business were $202 million, declining 7% on a constant currency basis, reflecting a challenging year-over-year comparison. Despite this, performance in the quarter did exceed our expectations as we continued to see elevated demand for CRRT, given the rise in COVID cases associated with new variants.

Sales in our acute therapies business were $202 million declining 7% on a constant currency basis, reflecting the challenging year over year comparison. Despite this performance in the quarter did exceed our expectations as we continued to see elevated demand for CRT given the rise in Covid cases associated with new variance.

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Speaker 4: Biopharma solution sales in the quarter $145 million, representing growth of 31% on a constant currency basis for reflecting incremental sales related to the manufacturing of COVID vaccines, which totaled approximately $50 million in the quarter.

Biopharma solution sales in the quarter were $145 million representing growth of 31% on a constant currency basis, reflecting incremental sales related to the manufacturing of COVID-19 vaccines, which totaled approximately $50 million in the quarter. While our results only include Hill Rom's financial results for the final 19 days of the <unk>.

Speaker 4: While our results only improved Hillrun's financial results for the final 19 days of the quarter, for transparency and completeness, we're providing some sales commentary for Hillrun's full quarter ended December 31st, which would have represented their first quarter of fiscal year 2022.

Order for transparency and completeness, we're providing some sales commentary for hill Rom's full quarter ended December 31, which would have represented there first quarter of fiscal year 2022.

Speaker 4: Unaudited HILROM sales for the full quarter were $724 million. Sales in the quarter reflect a difficult comparison from prior year period, following the exit of the international surgical OEM business, as well as significant supply constraints, which impacted HILROM's ability to ship products within the quarter.

Unaudited Hill ROM sales for the full quarter were $724 million sales in the quarter reflects a difficult comparison from prior year period. Following the exit of the international surgical OEM business as well as significant supply constraints, which impacted hill rom's ability to ship products within the quarter.

Speaker 4: Moving to the rest of the P&L, our adjusted gross margin of 44.3 percent, increased by 290 basis points over the prior year, reflecting a favorable product mix, operational improvements in manufacturing, and the contribution from HILROM to our financial results.

Moving to the rest of the P&L, our adjusted gross margin of 44, 3% increased by 290 basis points over the prior year, reflecting a favorable product mix operational improvements in manufacturing and the contribution from Hill ROM to our financial results adjusted.

Speaker 4: Adjusted SG&A of $710 million, increased 14% as compared to the prior year, and represented 20.2 as a percentage of sales.

Adjusted SG&A of $710 million increased 14% as compared to the prior year and represented 22 as a percentage of sales adjusted R&D spending in the quarter of $133 million increased 1% versus the prior year and represented three eight as a percent of sales adjusted SG&A and R&D spend both.

Speaker 4: Adjusted R&D spending in the quarter of $133 million increased 1% versus the prior year and represented 3.8% as a percent of sales. Adjusted SG&A and R&D spend both include the incremental contribution from HILROM.

Include the incremental contribution from Hill ROM. In addition, adjusted SG&A expense in the quarter reflects the higher freight expenses, we absorbed in the quarter as well as higher bonus accruals compared to the prior year under our annual employee incentive compensation plan.

Speaker 4: In addition, adjusted SG&A expense in the quarter reflects the higher freight expenses we absorbed in the quarter, as well as higher bonus accruals compared to the prior year under our annual employee incentive compensation plan.

Speaker 4: Adjusted operating margin in the quarter was 20.3%, an increase of 260 basis points versus the prior year, reflecting the factors I just mentioned.

Adjusted operating margin in the quarter was 23% an increase of 260 basis points versus the prior year, reflecting the factors I just mentioned <unk>.

Speaker 4: Adjusted net interest expense totaled $44 million in support, an increase of $6 million versus prior year, driven by higher outstanding debt balances related to the financing of the Hill-Rom acquisitions.

Adjusted net interest expense totaled $44 million in the quarter, an increase of $6 million versus prior year, driven by higher outstanding debt balances related to the financing of the Hill ROM acquisition.

Speaker 4: Other non-operating expense totaled $21 million in the quarter, compared to $5 million in the prior year period.

Other non operating expense totaled $21 million in the quarter compared to $5 million in the prior year period.

Speaker 4: Fourth quarter 2021 reflects unplanned expenses related to foreign exchange losses from our subsidiary in Turkey as a result of the devaluation of the Turkish Lira as well as an unrealized loss on an equity investment.

Fourth quarter 2021 reflects unplanned expenses related to foreign exchange losses from our subsidiary in Turkey. As a result of the devaluation of the Turkish lira as well as an unrealized loss on an equity investment.

Speaker 4: The adjusted tax rate in the quarter was 18.5% above our expectations, driven primarily by the mix of earnings in the quarter. The tax rate in the quarter also reflects the inclusion of Hillrun's income, which carries a higher tax rate than Legacy Baxter.

The adjusted tax rate in the quarter was $18, 5% above our expectations driven primarily by the mix of earnings in the quarter. The tax rate in the quarter also reflects the inclusion of Hill ROM income, which carries a higher tax rate than legacy Baxter.

Speaker 4: And as previously mentioned, adjusted earnings, $1.04 per share, advanced 30% versus the prior year period.

And as previously mentioned adjusted earnings of $1 <unk> per share advanced 30% versus the prior year period.

Turning to full year 2021 sales of $12 8 billion increased by 10% on a reported basis, 7% on a constant currency basis and 5% operationally.

Speaker 4: Turning to full year 2021, sales of $12.8 billion increased by 10% on a reported basis, 7% on a constant currency basis, and 5% operationally. On the bottom line, adjusted earnings increased 17% to $3.61 per diluted share.

On the bottom line adjusted earnings increased 17% to $3 61 per diluted share.

Speaker 4: On a four-year basis, we generated operating cash flow from continuing operations of $2.2 billion and free cash flow of approximately $1.5 billion. Throughout 2021, we remained focused on strategically redeploying capital to advance our performance and position Baxter for future success.

On a full year basis, we generated operating cash flow from continuing operations of $2 2 billion and free cash flow of approximately $1 5 billion. Throughout 2021, we remain focused on strategically redeploying capital to advance our performance and position Baxter for future success.

Speaker 4: We returned approximately $1.1 billion to shareholders through dividends and share repurchases, and deployed over $12 billion to inorganic investments to fuel growth, including our acquisition of Hillrun. With the acquisition now closed, our capital allocation priority will be to aggressively de-lever through the next two years to reach our net leverage target of 2.75 times by year two post-close.

We returned approximately $1 $1 billion to shareholders through dividends and share repurchases and deployed over $12 billion to inorganic investments to fuel growth, including our acquisition of Hill ROM with the acquisition now closed our capital allocation priority will be to aggressively delever through the next two years to reach our net.

Leverage target of 275 times by year, two post close.

Speaker 4: Let me conclude my comments by discussing our outlook for the first quarter and full year 2022, including some key assumptions around phasing for the year. We currently anticipate that many of the factors that impacted our fourth quarter results, including increased inflationary fractures, supply chain disruptions, staffing challenges across our manufacturing network, and ongoing impact of the pandemic, will continue to weigh on performance with the anticipated impact expected to be most pronounced in the first quarter.

Let me conclude my comments by discussing our outlook for the first quarter and full year 2022, including some key assumptions around phasing for the year. We currently anticipate that many of the factors that impacted our fourth quarter results, including increased inflationary fractures supply chain disruptions staffing challenges across our.

Manufacturing network and ongoing impact of the pandemic, we will continue to weigh on performance with the anticipated impact expected to be most pronounced in the first quarter. We're working expeditiously to address order backlogs and anticipate a strong ramp in sales into the second quarter and the remainder of 2022.

Speaker 4: We're working expeditiously to address order backlogs and anticipate a strong ramp in sales into the second quarter and the remainder of 2022, driven by new product launches and easing of COVID-19 dynamics globally.

Driven by new product launches and easing of COVID-19 dynamics globally. In addition, we're continuing to implement actions to increase operational effectiveness within our integrated supply chain network as well as evaluating opportunities to pass through certain costs in select geographies we.

Speaker 4: In addition, we're continuing to implement actions to increase operational effectiveness within our integrated supply chain network, as well as evaluating opportunities to pass through certain costs and select geographies.

Speaker 4: We anticipate these actions, coupled with the improving sales performance, will result in meaningful margin expansion and earnings growth for the company, particularly in the second half of the year as compared to the first half of 2022.

We anticipate these actions coupled with the improving sales performance will result in meaningful margin expansion and earnings growth for the company, particularly in the second half of the year as compared to the first half of 2022.

Speaker 4: Given these dynamics for the first quarter of 2022, we expect global sales growth of 24% to 25% on a reported basis, 27% to 28% on a constant currency basis, and low single-digit revenue growth on an operational basis.

Given these dynamics for the first quarter of 'twenty, two we expect global sales growth of 24% to 25% on a reported basis, 27% to 28% on a constant currency basis, and low single digit revenue growth on an operational basis.

Speaker 4: And we expect adjusted earnings excluding special items of 79 to 82 cents per diluted share.

And we expect adjusted earnings excluding special items of <unk> 79 to 82 per diluted share.

Speaker 4: For full year 2022, we expect global sales growth of 24% to 25% on a reported basis, 26% to 27% on a constant currency basis, and approximately 4% on an operational basis.

For full year 2022, we expect global sales growth of 24% to 25% on a reported basis, 26% to 27% on a constant currency basis, and approximately 4% on an operational basis.

Speaker 4: Moving down to P&L, we expect adjusted operating margin for the year of approximately 19% with first half margins below this estimate and second half margins above, as we expect performance to significantly improve throughout the year. For the year, we expect an adjusted tax rate of approximately 19% and expect the looted average share account to stay consistent with 508 million shares exiting 2021.

Moving down the P&L, we expect adjusted operating margin for the year of approximately 19% with first half margins below this estimate and second half margins above as we expect performance to significantly improve throughout the year for the year, we expect an adjusted tax rate of approximately 19% and expect diluted average.

Share count to stay consistent with 508 million shares exiting 2021.

Speaker 4: Based on these factors, we expect 2022 adjusted earnings excluding special items of $4.25 to $4.35 per diluted share.

Based on these factors, we expect 2022 adjusted earnings excluding special items of $4 25 to $4 35.

Per diluted share.

Speaker 4: With that, we can now open the call up to Q&A. Ready?

With that we can now open the call up to Q&A.

Okay.

Speaker 1: Thank you. We will now begin the question and answer session. If you have a question, please press

Thanks.

Thank you we will now begin the question and answer session. If you have a question. Please press.

Speaker 1: star then the number one on your telephone keypad.

Star then the number one on your telephone keypad.

Press the pound key if you're using a speaker phone. Please lift the handset to ask a question.

Speaker 1: Press the pound key 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 for a moment while the list is being compiled.

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'll pause for a moment, while the list is <unk>.

And compiled.

Speaker 1: 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.

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 Dot Baxter Dot com.

Yeah.

Yeah.

Speaker 1: Our first question comes from Robbie Marcus of J.P. Morgan. Your question please.

Our first question comes from Robbie Marcus of JP Morgan Your question. Please.

Oh, Thanks, good morning, everyone.

Speaker 4: Morning, Robby. Morning. Maybe to start, you know, if I use the low teens accretion you've talked about for Hill-Rom, it gets me to somewhere around 7% EPS growth for base Baxter, which is below the LRP. So maybe first start off with...

Morning, Robby good morning.

Maybe to start.

I use the low teens accretion you've talked about for Hill ROM. It gets me to somewhere around 7% EPS growth for base Baxter.

Which is below the MRP, so maybe first start off with.

Speaker 5: you know what's driving it you touched on supply chain issues and inflation but they could be important to uh... put a finer point on it and then i'll test the second question up front as well you know the first quarter is coming in a good clip below where the felt side is fitting coming into today what gives you the confidence that supply chain issues will resolved in second quarter and you could be acceleration and the drivers for the big discrepancy

Whats driving it you touched on supply chain issues and inflation, but I think it would be important to put a finer point on it and then I'll just ask the second question upfront as well the first quarter is coming in a good clip below where the sell side is sitting coming into today, what gives you the confidence.

That supply chain issues will resolve in second quarter, and you can see that acceleration and the drivers for the big discrepancy. Thanks.

Sure Robbie there are a few impacts that we're seeing in 2022 relative to previous LNP expectations. The good news from my perspective is a lot of these issues are short term in nature many of them related to the omicron Varian and some of the challenges that's created in our manufacturing.

Speaker 4: Robby, there are a few impacts that we're seeing in 2022 relative to previous LRP expectations. The good news from my perspective is a lot of these issues are short-term in nature, many of them related to the Omicron variant and some of the challenges that's created in our manufacturing facilities and supply chain. So if you think about it, you know, over the last six weeks, we've seen, you know, increases in our expectations around expedited freight.

Factoring facilities and supply chain. So if you think about it over the last six weeks we've seen.

Increases in our expectation expectations around expedited freight we've seen some increases and expectations related to supply chain labor costs in part related to absenteeism in the plants. We've also seen a bit more inflation and then finally, we've had a back order situation that really.

Speaker 4: We've seen some increases in expectations related to supply chain labor costs, in part related to absenteeism in the plants.

Speaker 4: We've also seen a bit more inflation. And then finally, we've had a backorder situation that really is some of the highest levels of backorders, both on the Baxter side and the Hillrun side that we've ever seen.

As some of the highest levels of back orders both on the Baxter side of the Hill ROM side that we've ever seen.

Speaker 4: And so from my standpoint, we have weathered a very challenging short-term environment. Some of that featured in our Q4 result, but it clearly impacts our Q1, and as a result, the full expectations for 2022.

And so from my standpoint, we have weathered a very challenging short term environment on some of that featured in our Q4 result, but it clearly impacts our Q1 and as a result, the full expectations for 2022 and so what's interesting is we are seeing.

Speaker 4: And so what's interesting is, we are seeing improvements in absentee levels at our plants. We are also seeing supply chain situation improve as we speak. So all of these things, we believe, are short-term in nature.

Improvements in absentee levels at our plants. We are also seeing supply chain situation improve as we speak. So all of these things. We believe are short term in nature, but they definitely impacted first quarter and then also the second quarter from a margin standpoint before we get back.

Speaker 4: But they definitely impact the first quarter and then also the second quarter from a margin standpoint, before we get back to a trajectory, which is much more normal and much more in line with our expectations in the third and fourth quarter.

Two a trajectory which is much more normal and much more in line with our expectations in the third and fourth quarter I think as we take a step back look we acknowledged there is some disruption in the short term, but really really like the durability of the business along with the pathway, we have going forward over the course of this.

Speaker 4: I think as we take a step back, look, we acknowledge there's some disruption in the short term, but really, really like the durability of the business along with the pathway we have going forward over the course of this year and then the future years.

Year, and then the future years, so really that and then as it relates to Q1. The issues are most pronounced and really centered on Q1, we won't resolve the back order issues until the until at some point in Q2.

Speaker 4: So really that, and then as it relates to Q1, the issues are most pronounced and really centered on Q1. We won't resolve the backorder issues until at some point in Q2. Furthermore, we won't get out of an expedited freight situation for a few more months here. So that's really why Q1 is where it is. And then we start to see improvements as we move forward.

Furthermore, we won't get out of an expedited freight situation for a few more months here. So thats really why Q1 is where it is and then we start to see improvements as we move forward.

Okay.

Great. Thanks, a lot. Thank you.

Okay.

We can take our next question Vijay Kumar of Evercore ISI is on the line with a question. Please state.

Speaker 1: We can take our next question. Vijay Kumar of Evercore ISI is on the line with a question. Please state your question.

Your question.

Speaker 6: Good morning, Joe and Jay. Thanks for taking my question. Maybe one on the revenue guidance here. Perhaps for Jay, I'm not sure if I'm doing the math right. The implied HILRAM revenues, it seems to be perhaps

Yeah.

Good morning, Joe.

Thanks for taking my question.

Maybe one on the revenue guidance here.

Perhaps where I'm, Jim Hi, Jim I'm, not sure if I'm doing the math right the implied Hill ROM revenues.

It seems to be perhaps.

Speaker 6: down year-on-year because if I look at your operational growth for standalone Baxter and then look at the implied Hill-Rom, are there any, can you just, one, remind us, has any assumptions changed on these two businesses where Hill-Rom was five plus, Baxter, clearly you're guided to four plus. Are there any COVID headwinds, Kelvins, we need to be aware of, and I'm doing this year-on-year math.

Down year on year, because if I look at your operational growth for Standalone back for and then look at the implied Hill ROM are there any can.

Can you just won that remind us has any assumptions change on these two businesses for hill ROM with five plus Baxter clearly you guided to four plus are there any COVID-19 headwinds tailwind as we need to be aware off and I'm doing this up year on year Matt.

Speaker 4: Sure. Good question, BJ. The Hillrun business, our expectation is mid-single-digit constant currency growth.

Sure. Good question Vijay The Hill ROM business, our expectation is mid single digit constant currency growth as I said earlier in my prepared remarks Baxter is approximately 4% operational growth with the real fact, and it's not a demand related.

Speaker 4: As I said earlier in my prepared remarks, Baxter is approximately 4% operational growth. With the real, and it's not a demand-related item, it really is related to back orders in the first and second quarter, and as I say, we hope to resolve those throughout the year. So the Baxter side, we're talking about approximately 4. Hillrun is mid-single-digit constant currency. And then the reported growth, you know, I think that there's some rounding going on on both the Baxter side and the overall reported revenue growth side that leads you to the numbers that you're looking at. But as we look at it, we see Hillrun in the mid-single-digit.

It really is related to back orders in the first and second quarter and as I say, we hope to resolve those throughout the year. So so the Baxter side, we're talking about approximately for hill ROM as mid single digit constant currency and then the reported growth.

I think that there is some rounding going on on both the Baxter side and the overall reported revenue growth side that would lead you to the numbers that youre looking at but as we look at it we see hill ROM in the mid single digits.

Speaker 6: And my follow-up, sorry, are there any COVID headwinds? And I think, you know, one of your, when the deal was announced, a lot of questions around the strategic rationale, and now one of your peers just did a connected care or communications deal. So maybe elaborate perhaps for Joe on this strategic rationale, connected care. How big of a deal is this, Joe, as you look at the next three to five years?

And then.

My follow up Tsi, sorry are there.

Any COVID-19 headwinds and I think.

One of your when the deal was announced a lot of questions around the strategic rationale and now one of your peers.

Just did a connected care communications deal.

So maybe elaborate perhaps for them.

Joe on the strategic rationale connected care.

How big of a deal is this too as you look at the next three to five years.

Speaker 3: Vijay, good morning. We are working on those opportunities, and we'll have more on that when we speak to our investors on investor day. But let me give you three different examples. The first one is a short-term opportunity that we have is our home peritoneal dialysis and the well-channeling remote monitoring.

Vijay good morning.

We are working on those opportunities and we will have more on that when we speak to the to our investors in our Investor day, but let me give you three different examples. The first one is a short term.

Opportunity that we have is our home peritoneal dialysis and Welch allyn and remote monitoring bringing them together is a very short term opportunity that we have.

Speaker 3: Bringing them together is a very short-term opportunity that we have, will give us insight into fluid overload and also the workflow.

We will give us.

Insights into fluid overload.

And also <unk>.

The workflow of.

Speaker 3: of government PD patients.

Governance, PD patients and allows us to do Bluetooth enabled plateaus and analytics integrated with a share source, reducing then the potential burden for patients.

Speaker 3: and allows us to do Bluetooth-enabled vitals and analytics integrated with a shared source, reducing then the potential burden for patients.

Speaker 3: and more proactive and accurate management of the patient. This is the very short term.

And more proactive in Accra management efficiency. This is a very short term.

Speaker 3: Devote system, devote alarm systems, midterm one to two years, bringing together delivery of visualization of alarms from the backstream fusion pumps, CRT devices in Starlink is our

<unk> system devote alarm systems mid term one to two years of bringing together.

Delivery of visualization of alarms from the Baxter infusion pumps CRT devices as starling is our our monitoring platform two volt, bringing that together improvements to work flowing match search for instance, ICU farmers in other parts of the hospital, just some benefits would be alarm fatigue reductions.

Speaker 3: our monitoring platform to vote. Bringing that together improves the workflow in MedSearch, for instance, ICU, pharmacy, and other parts of the hospital. Just some benefits would be alarm fatigue reduction, transition from reaction to proactive, so you can see things ahead of time, creates a much better environment for the nursing staff who will be focused on what actually matters versus alarm overload. So we think that is a good opportunity, bringing together both platforms. Vote is a very important part of the platform that Hurom has.

Transition from a reaction to proactive so you can see things ahead of time creates a.

Much better environment for.

For the nursing.

Staff, who will be focused on what actually matters versus versus alarm overload. So we think that is a good opportunity to bring together both platforms from folks is a very important part of the of the platform. The <unk> and then on the long term, we are going to close the loop fluid management.

Speaker 3: And then, on the long term, we're going to close the loop fluid management system, which is how do you actually monitor from a series of inputs, including all the way to urine output, to the infusion pumps output, and alarms, and types of drugs, bringing our monitoring together, and all the information that comes out of the smart beds. How do we create an environment that reduces significantly the load to the clinician and alarms to the clinician when problems are really arising, and preventing, eventually preventing, some of the bad outcomes to happen. So those are just three examples of things that we are working on. And there's much more. We had a significant amount of workshops, actually one specific with a significant amount of ideas. So I'm very excited about that.

System, which is how do you actually morning through from a series of inputs, including all the way to the urine output.

Infusion pumps output and alarms and types of drugs, bringing our monitoring together and all of the information that comes out of this smart beds, how do we create an environment that reduces significantly the load to the clinician and alarms to the clinician when problems are really arising in prevent and eventually preventing some of that.

Bad outcomes to happen. So those are just three examples of things that we are working on and there is much more than we had.

Significant amount of workshops for one specific was a significant amount of ideas. So I'm very excited.

Cited above that and maybe hi, Vijay. This is just maybe I would add.

Speaker 4: And maybe, Heidi, Jay, this is Giuseppe, maybe I would add a couple of other or probably another angle to that, that is the site of care, right? There is a lot that we can do having 2 million connected devices or connectable devices in the field of the two companies together. So there is a lot that we can do in the acute environment, but there is a lot that we can do in the home care environment, Joe touched base on the vault and care communication. Think about the PD patients now at home.

Yes.

Couple of other proteins and other angles to that is the site of care diabetes, a lot that we can do adding 2 million.

<unk> devices are connected devices in the field. The two companies together. So there is a lot that we can do in the acute environment, but there is a lot that we can do in there.

Home care environment, Joe touch base on the bolt and care communications to think about the PD patients now at all.

Speaker 4: with hypertension, we can monitor them in a better way and we can communicate to them. We can add more critical vital signs collection together with the cycler and we can involve with both families, we can involve the family in the treatment of the patient, which is very, very important.

With either sanctioned we can monitor them.

A better way and we can communicate to Dan we can add more critical vital.

Signs alkylation together with the Sigler and weekend involved with bolt family weakening bold the family in the treatment of the patients which is very important.

That's helpful. Jay sorry, yes.

Speaker 7: Yeah, B.J., just to close out on your question, we have roughly, year over year, $50 million worth of headwind in our DPS business related to vaccines.

P. J just to close out on your question, we haven't we have roughly year over year $50 million worth of headwind in our bps business related to vaccines and then as we look at admissions and procedures, we expect those to normalize throughout the year, but in the first quarter they are down a bit.

Speaker 7: And then, as we look at admissions and procedures, we expect those to normalize throughout the year. But in the first quarter, they are down a bit. Low, perhaps low mid-single digit impacts in the first quarter of the year. So down approximately 4% as we see it today. Now, from a COVID impact standpoint, I'm not speaking to the backorder situation and the situation that we've seen in the plans. That's, you know, I'm treating, I'm viewing that separately. It's more of a supply chain related issue. But from a demand standpoint, those are the key items impacting sales in 2022.

Low perhaps mid low mid single digit impact in the first quarter of the year, so down approximately 4% as we see it today now from a COVID-19 impact standpoint, Im not speaking to the back order situation in the situation that we've seen in the plant.

I'm trading I am viewing that separately.

More of a supply chain related issue, but from a from a demand standpoint, those are the key items impacting sales in 2022.

Understood. Thanks, guys.

Speaker 6: Thanks, guys. Thank you.

Thank you.

Speaker 1: Tito Chikorini of Deutsche Bank is on line with a question. Please ask your question.

Detailed chickering Deutsche.

Deutsche Bank is online with a question.

Please ask your question.

Hey, good morning, guys. Thanks for taking my questions.

Speaker 6: The first one is actually a bridge. Can you help us bridge the midpoint of the 1Q guidance of $0.81 versus last year's $0.76? What's the contribution from Hillrun within the first quarter guidance? I'm trying to understand the cost and backlog pressures on sort of core Baxter. And can you quantify the backlog you're assuming in the first quarter and 2Q? Sure.

The first one is actually a bridge can you help us.

The midpoint of the once your guidance of 81 versus last year's 76 cents.

What is the contribution from Hill ROM within the first quarter guidance I'm trying to understand the cost and backlog pressures on sort of core Baxter and can you quantify the backlog youre, assuming in the first quarter and into Q.

Sure.

From a from an EPS standpoint.

Speaker 7: There is definitely a good contribution from Killrum as we look at it year over year. And, you know, if you think about 2021, Q1 Actual, 76 cents.

There is definitely a good contribution from Hill ROM as we look at it year over year and if you think about 2021 Q1 actual 76.

Speaker 7: But really, between some price impacts, some inflationary impacts, and freight.

But really between some price impact some inflationary impact and frame where.

Speaker 7: We're talking about roughly $0.15 of negative impact.

We're talking about roughly 15 cents of negative impact and what we would normally expect to see on the Baxter side is really substantial organic volume growth to offset that we see some of that but it's not sufficient enough to to really carry the day in terms of driving.

Speaker 7: And what we would normally expect to see on the Baxter side is really substantial organic volume growth.

The normalized levels of earnings growth in power that we expect from the business. So we're not we're not seeing that organic volume pick up in part because of the supply chain situation, which as I said should normalize throughout the year and then Hill ROM is north of 10 in terms of contribution in the quarter, which it's not.

Speaker 7: of earnings growth and power that we expect from the business. So we're not seeing that organic volume pickup, in part because of this supply chain situation, which, as I said, should normalize throughout the year. And then Hillrun is north of 10 cents in terms of contribution in the quarter, which is something that is a great add. The business is impacted as well, though, by some of these supply chain issues, and so Hillrun's growth accelerates throughout the year as well. Great, and then a follow-up question. You talked about passing on some of the inflationary costs to customers in some geographies. Can you expand on which product lines?

And that is.

A great add the business the business is impacted as well, though by some of these supply chain issues and so he'll ron's growth accelerate throughout the year as well.

Speaker 8: Great. And then a follow-up question. You talked about passing on some of the inflationary costs to customers in some geographies. Can you expand on which product lines and geographies you can pass through those costs? And as you think about sort of global revenues, any ballpark of sort of what percentage of those can be passed through and sort of what pricing you guys think you can get on that?

Great and then a follow up question.

You talked about passing on some of the inflationary costs to some customers in some geographies can you expand on which product lines and geographies you can pass through this cost and as you think about for global revenues any ballpark of sort of what percentage of those can be passed through and sort of what what pricing as it can get on that.

Speaker 3: Peter, this is something that we comment very little. Pricing is a strategy that a company has. We have pricing built into our contracts. What we're looking at here is an exceptional amount of extra costs the company has to carry on the expedite freight, the ability to get components in the door, inflation in labor, as well as the components that are coming in. So we will selectively decide where we're putting those price increases. They will come in different forms, but we're not gonna specifically speak about geography. We know that we have put them in our plan and we'll be executing.

Peter This is.

Something that we comment very little up pricing as is.

The strategy that the company has.

We have pricing built into our contracts, where we're looking at here is an exceptional amount of extra extra cost. The company has to book has to carry on to expedite freight.

The ability to get components in the door.

Relation and labor as well as the components they are coming in so we will selectively.

Decide where we're putting those cost don't those price increases will come in different forms.

But we're not going to specifically speak about geography, we know that we have put them in our plan and we'll be executing on to them.

Speaker 3: on to them.

Great. Thanks, so much.

Larry <unk> of Wells Fargo is on the line with a question. Please state your question.

Speaker 1: Larry Bagelson of Wells Fargo is on the line with a question. Please state your question.

Speaker 9: Good morning, thanks for taking the question, guys. Just first on Nova MyQ, Joe, I heard your comments up front about expecting approval this year in the U.S., I believe. I think at J.P. Morgan earlier this year, you talked about some cybersecurity issues that you were, I think, refiling on or submitting additional information on. Could you please update us on the timing, a little bit more detail on the timing there on Nova MyQ and your confidence in approval this year? And add one follow-up.

Good morning, Thanks for taking the question guys.

Just first I know that my queue, Joe I heard your comments upfront about expecting the approval this year in the U S. I believe.

I think it at Jpmorgan earlier this year, you talked about some cyber security issues that.

You are.

<unk> re filing on or submitting additional information on could you. Please update us on the timing.

A little bit more detail on the timing there and over my queue and.

Your confidence in approval this year and I had one follow up.

Speaker 3: Larry, good morning. We we want to file this last set of documentations, which, you know, the FDA will have 31 days to provide a response to us. Okay. So this is not the beginning of the application. This is the end.

Larry Good morning.

We want to file.

This last <unk>.

Set of Documentations, which you know the FDA will have 31 days to provide a response to US. Okay. So this is not the beginning of the application business and so to that end, we want to make sure we have.

Speaker 3: So to that end, we want to make sure we have some new set of eyes to look at the whole application. It looks really good. But there were areas that we think we could do better. Cybersecurity is one of them that we want to be always tough.

Some new set of eyes looked at the whole application it looks really good but there were areas that we think we could do better cyber security is one of them do we want to be always soft.

Speaker 3: decile when it comes to that. So we went back and made some adjustments and improvements, and that took time. So we will be filing with the FDA hopefully soon, and we're expecting that to be 31 days after that, we'll have the answer on our large volume parenteral LVP pump.

Decile when it comes to that so we went back and made some adjustments and improvements.

It took time, so we will be filing.

With the FDA hopefully soon and we're expecting that to be 31 days. After that we will have the answer on our large volume parenteral LDP pump and they're following that we're going to apply the same 31 days at the end of it for distributions.

Speaker 3: And then following that, we're going to apply the same 31 days at the end of it for the syringe pump and related software that will be our enterprise software as well as the software that controls the pumps the way they work.

<unk> pump and related software that will be our enterprise software as well as software controls.

Pumps the way they work within networks. So that's pretty straightforward. We are doing the best we can to get the best chance to get this product approved by don't speak on behalf of the FTE and never do I don't have any control on the internal process. One thing that we can control is the quality of the.

Speaker 3: So that's pretty straightforward. We are doing the best we can to get the best chance to get this product approved. I don't speak on behalf of the FDA, I never do. I don't have any control on the internal process. One thing that we can control is the quality of the application that we have. And to that end, we wanna make sure that we increase our probability to the highest possible before it goes in for those 31.

<unk> that we have and to that end, we want to make sure that we increase our probability for the highest possible before it goes into those 31 days.

Speaker 9: Thanks for that, Joe. And one other thing you talked about in your prepared remarks was about evaluating the portfolio and potentially exiting or divesting, I think, non-core businesses. How long will that process take and when do you think we'll hear more about it? Thanks for taking the questions. Larry, when we started the transformation of Bapster, we had three very specific areas of improvement. I would say,

Thanks for that Joe and one other things you talked about it in your prepared remarks was about evaluating the portfolio.

Potentially exiting or divesting noncore.

Noncore businesses, how long will that process take and when do you think we'll hear more about it thanks for taking the questions.

Larry we when we started the transformation of Baxter we had.

Three very specific areas of improvement I would say for now three or four first is to bring the company into profitability States put us with close to our peers and transform the company's ability to generate free cash flow. The second was most.

Speaker 3: not three, four. First is to bring the company into a profitability state that will put us close to our peers and transform the company's ability to generate free cash flow. The second was, most importantly, the culture of the company, bring the right talent to

Fortunately the culture of the company, bringing the right talent to.

Speaker 3: to get the culture going. The third was innovation. We just spoke about it, now getting a pump with the FDA. That was unthinkable when I first got here because we did not have any internal programs or any devices within the company other than fuel that we acquired through Gamma.

To get the culture going to third was innovation and we just spoke about getting.

Getting a bump with the FDA that was.

Think about when I first got here, because we did not have any internal programs for any devices within the company other than fuel that we acquire through gambro and the fourth piece was the one that we haven't touched much we did some tuck in acquisitions and then we thought about how do we transformed the portfolio the company changed the CAGR the direction.

Speaker 3: And the fourth piece was the one that we haven't touched much. We did some tuck-in acquisitions. And then we thought about how do we transform the portfolio of the company, change the kicker, the direction, the innovation, go where the puck is going. That was the acquisition of Hiram Brinks.

Ovation go where the puck is going there was the acquisition of Hill ROM brings that debt.

Speaker 3: part into Baxter. Conversely, we do have a couple areas that we don't believe are the right businesses for Baxter to own.

Into Baxter Conversely, we do have a couple of areas. We don't believe are the right businesses for Baxter to own.

Speaker 3: And to that end, we are in the middle of analysis, and we should have more in that area either by May or a little later than that in how we're going to adjust our portfolio. What we want to do is always look at a portfolio in a way that can increase the career of the markets we serve, increase the profitability of the company, and remove businesses that have been sometimes legacy businesses. They are sitting here with probably not the right capital allocation, and bring that to people who can bring that capital allocation to them, freeing up the cash flow for backers to invest in what really we want to invest, which is in our connected care, digital health, and then double down on parts of Huron. They're doing so well.

To that end, we are in the middle of analysis, and we should have more in that area either by mail or a little later than that in how we're going to.

Just our portfolio, while we want to do is always looking at portfolio in a way that can increase the CAGR of the markets. We serve increased increase the profitability of the company and remove businesses. They have been sometimes legacy businesses. They are sitting here with probably not the right capital allocation and bring that to.

People, who can bring that capital allocation to them freeing up cash flow for Baxter to between two investing where really we want to invest we just in.

In our connected care and digital health.

And then none to double down on parts of few ROM They are doing so well.

Speaker 10: Thank you.

Thank you.

Okay.

Okay.

Speaker 1: Joshua Jennings of Cohen is on the line with a question, please state your question.

Joshua Jennings of Cowen is on the line with a question. Please state your question.

Speaker 9: Hi, good morning. Thanks for taking the questions. I wanted to just ask something from your commentary, Joe, Jay, Claire, that there are potential revenue synergies with this combination. Was wondering if there are any sales synergies baked into 2022 guidance.

Hi, good morning, Thanks for taking the questions.

Just ask it sounds like from your commentary.

Joe Jay clear that there are.

The potential revenue synergies.

With this combination.

I was wondering if there are any sales synergies baked into 2022 guidance and then just when.

Speaker 9: and then just when to communicate fully the level of sales revenue synergies. And then the follow-up is just any change to the outlook in terms of the potential for the combined business to accelerate organic revenue growth as we move through 2022 and some of the challenges that are present throughout the med device industry and into 2023 and beyond. Thanks for taking the question.

To communicate fully.

The level of sales revenue synergies.

And then the follow up is just any change to the outlook in terms of the potential for the combined business to accelerate organic revenue growth as we move through 2022 and some of the challenges that are present throughout the med device industry and into 2023 and beyond.

Thanks for taking the questions.

Sure as far as revenue synergies go we've included none INR numbers for 2022. So there is no no revenue synergies now having said that we're incredibly excited and Joe highlighted some of the work and I'll, let <unk> talk in a second about some of the progress that we're making because we're really excited about the opportunity for.

Speaker 7: As far as revenue synergies go, we have included none in our numbers for 2022. So there's no revenue synergies. Now, having said that, we're incredibly excited. And Joe highlighted some of the work, and I'll let Giuseppe talk in a second about some of the progress that we're making, because we're really excited about the opportunity for revenue synergies long-term. And I think as we learn more about the Hillrun business, and then as we also see how the Baxter business has weathered a very volatile environment, I think we're very confident about our long-term ability to drive growth across this combined platform. So Giuseppe, why don't you talk about some of the revenue synergy ideas and some of the excitement we're generating there? Sure, Jake.

Our revenue synergies long term and I think as we learn more about the Hill ROM business and then we also see how the Baxter business has weathered a very volatile environment. I think we're very confident about our long term ability to drive growth across this combined platform. So just.

Why don't you talk about some of the revenue synergy ideas and some of the excitement we're generating there sure Jake so.

Speaker 4: So the teams, both the regional teams and the GBU teams were diligent.

The teams both the regional teams and the <unk> teams worked diligently on understanding which had the themes and drivers of sales team that you said, we see few of them are very clearly the first one.

Speaker 4: understanding which are the themes and the drivers of sales synergies and we see a few of them very clearly. The first one, geo-expansion and channel optimization.

<unk> expansion and channel optimization.

Speaker 4: It is clear that Baxer's presence outside of the U.S. is much stronger than legacy Europe's presence, and that will end up to good sales synergies there. But there are also synergies in connected care, analytics, and services.

It is clear that backs up presence outside of U S is much stronger than legacy Europe presence and that will end up.

Sales synergies there, but there are also synergies in connected care analytics and services there are synergies in strengthening our position in alternate care and synergies and strengthening our position at home as well don't forget that before the Hill ROM acquisition home for box. It was mainly at <unk>. This is now.

Speaker 4: There are synergies in strengthening our position in alternate care and synergies in strengthening our position at home as well. Don't forget that before the hero map decision, home for Baxter was mainly peritoneal dialysis. Now we have new therapies like respiratory, like monitoring, cardiology monitoring.

We have new therapies like respiratory like monitoring.

Our cardiology and monitoring.

Speaker 4: and respiratory, of course, that are very, very interesting to us. So, we have a more comprehensive offer as well at home. So, just to recap, geographic expansion, connected care, alternate care, and home are the main drivers.

And <unk>.

Of course.

Our database interesting Plaza, we added more comprehensive offer as well at all so just to recap geographic expansion connected care. After net care at home are the main drivers of teenagers.

Speaker 7: We will have the opportunity to share more about this at the upcoming Investor Day, including some quantification of revenue potential and some refreshment of the financial long-term outlook for the combined company.

We will have the opportunity to share more about this at the upcoming Investor day, including some quantification of revenue potential and some refreshment of the financial long term outlook for the combined company.

Great. Thank you.

Matt <unk> of credit Suisse is on the line with a question. Please.

Speaker 1: Matt Mythik of Credit Suisse is on the line with a question. Please state your question.

Please state your question.

Speaker 11: Hi, thanks so much for taking the question. I just had one follow-up on the topic of synergies, if I could, and then on supply chain and staffing. So, appreciate the color on the revenue synergies you were just describing.

Hi, Thanks, so much for taking the question and.

One follow up on this topic of synergies if I could and then on supply chain and staffing so.

I appreciate the color on the revenue synergies you were just describing.

Speaker 11: Can you maybe talk a little bit about what you've seen so far in terms of the cost side, you know, logistics and operations integration that have begun, and both on the positive side and any risks you're building into your...

Can you maybe talk a little bit about.

What you've seen so far in <unk>.

The cost side.

<unk>.

Operations integration that had.

Begun.

Both on the on the positive side and any risks you're building into your.

Speaker 11: outlook in terms of synergies as you bring these organizations together here in the near term.

The outlook in terms of dis synergies as you bring these organizations together here in the near term.

So on the cost side, we previously shared $250 million and expectations by year three as part of as part of really focusing on certain G&A areas, some procurement opportunities and so on and what I will tell you is we're very comfortable with that number and as we learn more.

Speaker 7: So, on the cost side, we previously shared $250 million in expectations by year three as part of really focusing on certain GNA areas and procurement opportunities and so on.

We're getting increasingly comfortable there've been no negative surprises as we as we think about the cost synergy opportunity. So this one has been very much. According to plan I think we've been really pleased with talent that we've seen at hill ROM the processes. So there's a lot of great opportunity there and thought.

Speaker 7: you know, very much according to plan. I think, you know, we've been really pleased with the talent that we've seen at Hillrun, the processes. So there's a lot of great opportunity there and thoughts that we can leverage. But as far as the cost synergy goes, you know, it's right in line with where we hoped it would be, if not trending even more positive. That's great. And then on supply chain, I know there's been a couple of questions, but you made a comment and I think some other companies presenting Q4 earnings and talking about Outlook have made similar comments about this.

It's that we can leverage but as far as the cost synergy ghost.

In line with where we hoped it would be if not trending even more positive.

That's great and then on supply chain I know, it's been a couple of questions but.

Speaker 11: That's great. And then on supply chain, I know there's been a couple of questions, but you made a comment and I think some other companies presenting Q4 earnings and talking about Outlook have made similar comments about this idea of improvements.

You made a comment and I think some other companies presenting Q4 earnings and talking about outlook have made similar comments about this idea of improvements in the back half.

Speaker 11: in the back half. And, you know, we've been talking about supply chain and input costs for over a year now, I think. And I guess the visibility of just, you know, putting a stake in the ground and saying, you know, we do expect these things to improve, both in terms of staffing

And we've been talking about supply chain and input costs for over a year now I think.

And.

And I guess the visibility of just.

Putting a stake in the ground and saying you know we.

We do expect these things to improve both in terms of staffing and <unk>.

Speaker 11: and inflationary costs and backlog and things like that.

And inflationary cost in backlog.

And things like that.

Speaker 11: Can you maybe just give some sense as to your confidence in that visibility? It'd be appreciated.

Can you maybe just give some sense as to your confidence in that visibility.

I appreciate it.

Yeah.

Speaker 3: Matt, I will start. I want Jay to actually.

Matt I'll start I wanted <unk> to our fleet.

Also supplement my answer I see this in two different buckets I see the short term or the Covid impact and then why do you see a long lasting effect of having dose inflationary costs. So the first is labor.

Speaker 3: also supplement my answer. I see this in two different buckets. I see the short-term

Speaker 3: or the COVID impact, and then what is the long-lasting effect of having those inflationary costs? So the first is labor availability created by Omicron was significant.

<unk> created by Omicron was significant.

Speaker 3: It didn't take much. You could read the news and how it affects the country and the curve and acceleration of that infection took a lot of people from our plants.

It Didnt take much you could read the news and how it affects the country in the curve and acceleration of that infection took a lot of people.

From our plants there were either.

Speaker 3: They were either infected or had contact with people who, in fact, were very much in number one priority of the company's patient safety and quality, as well as employee safety. So we did not allow people to come to work and we followed the guidelines of the CDC. To that end, we end up with significant disruptions that caused all this air freight that we had to actually incur, which came actually towards the end of the fourth quarter, as we will never let patients out of products, as soon as we found that we start flying products, despite the fact some of the products were in the belly of ships that were going in because the rate and escalation of that.

The affected or had contact with people who in fact were very much in number one priority of the company is patient safety and quality as well as our employee safety. So we did not allow people to come to work then we follow the guidelines of the CDC to debt and we ended up with significant disruptions have caused all these air freight that we have to actually east.

<unk>, which came actually towards the end of the fourth quarter as we will never let patients out of products as soon as we found out we start flying products. Despite effect some of the products and the value of ships that were going in because the rate and escalation of that problem of the labor availability and <unk>.

Speaker 3: That problem of the labor availability and absenteeism is starting to subside. We have significant efforts in place, and we're starting to see our plans filling up with people, and the situation will be resolved.

As we start to subside, we have significant efforts in place and we're starting to see our plants filling up with people in the situation will be would be resolved also part and parcel to that was the fact that you have to attract employees to your plant and dosing inflationary cost the labor cost of the company.

Speaker 3: Part and parcel to that was the fact that you have to attract employees to your plant and there is an inflationary cost to the labor cost of the company, and that is the one that we also are upping our salaries and making sure that we retain people those.

That is the one that we also are up in our salaries and making sure that we retain people those.

Speaker 3: A cost of inflation will go now on for a long time. You don't reverse salary increases. What you do actually is create more cost reductions and automation to offset that. And our supply chain has a pre.

Cost of inflation will go on for a long time, you don't reverse.

<unk> increases what you do actually is create more cost reductions and automation to offset that in our supply chain has a pretty healthy cost reduction program in 2022 and beyond to offset this inflationary costs.

Speaker 3: healthy cost reduction program in 2022 and beyond to offset this inflationary.

Speaker 3: The component availability is nothing new. We've been signaling that for a long time. We're working very hard to get to our components by an advance, by large loss, and things like that. We're managing that. And that is in Baxter being managed. And we just, according to Hiram, we

<unk> availability is nothing new we've been signaling that for a long time, we're working very hard to get to our components by them advance by large loss and things like that we're managing that.

That is in Baxter B managed and we just according to <unk>.

Speaker 3: had they had similar issues we are resolving those along the way and and we believe the alleviation of our backwater and backlog will happen throughout 2022.

We had they had similar issues, we are resolving dose along the way.

And we believe the alleviation of our best quarter in backlog will happen throughout 2021 last point I want to add is that the demand is very strong for our products from two different things. One is the omicron varian itself, but also a lot of consumption of product that happened and shelves are empty.

Speaker 3: One last point I want to add is that the demand is very strong for our products from two different things. One is the Omicron variant itself, but also a lot of consumption of product that happened in shelves that are empty. So you're probably going to have replenishment of those products going out throughout the year. So we don't see a demand at this moment, from our vantage point, abating. So we have some short-term capacity issues that we're taking care by adding shifts and adding other things that we alleviate that. So we're doing everything we can always with the first thing in mind to serve the patient, second to do it in a cost-effective manner. So I think we have managed this to the best of our ability and done pretty well based on our footprint and the size of our company going into 2022. We will alleviate these pressures throughout the year, and it's not an immediate solving the component issue. It's going to go throughout second quarter and continues to improve throughout Q3 and Q4. And we want to make sure that our cost reduction, and we just verified that, is very healthy. As a matter of fact, I would say our cost reduction program for 2022 is the largest the company ever had in terms of integrated supply chain.

We're probably going to have replenishment of those products going out throughout the year. So we don't see dimmed.

The demand at this moment is from our vantage point abating. So we have some short term capacity issues that we're taking care by adding shifts and any other things that will alleviate that so we're doing everything we can always where the first thing in mind to serve the patient secondly to do it in a cost effective manner. So I think we have managed.

This to the best of our ability and done pretty well based on our footprint and the size of our company going into 2022, we will alleviate this pressures throughout the year and there is not an immediate solve in the component.

<unk> is going to go through our second quarter and continues to improve throughout Q3, and Q4 and we want to make sure we want to make sure that our cost reduction and we just verify that is very healthy. It's a matter of fact I would say our cost reduction program for 2020, which was the largest the company ever had in terms of integrated supply chain.

Very helpful. Thanks.

Speaker 11: Very helpful, thanks.

Welcome.

Speaker 1: Joanne Wensch of Citi is on the line with a question. Please state your question.

Joanne Wuensch of Citi is on the line with a question. Please state your question.

Speaker 12: Good morning, and thank you for taking the question. In your 2022 guidance, could you share with us what your COVID vaccine revenue is?

Good morning, and thank you for taking the question.

In your 2022 guidance could you share with us what your Covid vaccine revenue is.

Speaker 2: Sure, Joanne, it's about $100 million, a little north of $100 million is what COVID is, vaccine revenue is this year. Okay. And then also, historically, you've given us your thoughts on hospital census and returns to sort of, I'm not sure what we're calling normal anymore, but could you sort of give us a backdrop of how you thought about that in putting together the guidance?

Sure Julien, it's about $100 million, a little north of 100 million is what COVID-19 is impacting revenues this year.

Okay.

Then also.

Barkley, you've given us your thoughts on hospital census, and a return to sort of.

I'm not sure what we're calling normal anymore, but could you sort of give us a backdrop of how you thought about that and putting together the guidance.

Sure we have we're down roughly 4% on surgical procedures and admissions and then we have that improving throughout the year to be perhaps slightly below towards the end of the year and on a full year basis relative to 2019 normalized levels.

Speaker 7: Sure. We're down roughly 4% on surgical procedures and admissions, and then we have that improving throughout the year to be perhaps slightly below towards the end of the year and on a full year basis relative to 2019 normalized levels.

Speaker 7: We're not banking on a significant new variant. So that's an important assumption that underlies our guidance. And we're not banking on that variant both from a revenue side and also from a supply chain disruption side. We don't have any line of sight that that's going to be a phenomenon that we have to deal with. And we certainly hope we won't have to deal with that through the remainder of 2022. So really the story is down 4%. A lot of that relates to Omicron and then it improves throughout the balance of the year. Yeah, and that's specific to surgical procedures, Joanne. So again, down kind of that mid single digit, low to mid single digits in the first quarter and improving throughout the rest of the year. With respect to admission, we kind of have it planned versus kind of those pre-COVID levels down kind of in that low single digits really kind of throughout the course of this year.

We're not banking on significant new variant so thats, an important assumption that underlies our guidance and we're not banking on that variant both from a revenue side and also from a supply chain disruption slide side. We don't have we don't have any line of sight that that's going to be a phenomenon that we have to deal with them.

Certain hope we wont have to deal with that through the remainder of 2022. So really the story is down 4% a lot of that relates to <unk> and then it improves throughout the balance of the year and then that's it.

Excess surgical procedures, Julian so again, Tim kind of that mid single digit low to mid single digits in the first quarter and improving throughout the rest of the year with respect to admission we kind of Havent plan versus kind of pre COVID-19 level down kind of in that low single digits really throughout the course of this year.

Speaker 12: Terrific. Thank you so much.

Terrific. Thank you so much.

We have time for one more question.

Speaker 1: Matt Taylor of UBS is on the line with a question. Please state your question.

Matt Taylor of UBS is on the line with a question. Please state your question.

Speaker 13: Thank you for taking the question. I just wanted to clarify on the Novum pump. It doesn't sound like you've made any revenue for that in the guidance. Just wanted to clarify that. And then previously, when you gave guidance and

Hi, Thank you for taking the question I just wanted to clarify on.

The novum pump it doesn't sound like you've baked in any revenue for that in the guidance just wanted to clarify that and then <unk>.

Previously when you gave guidance.

Speaker 13: Q4 of 20, I think it was about a 1% contribution. Is that how you're still thinking about it once it gets launched or any other thoughts you could provide?

Q4 of 'twenty I think it was.

A 1% contribution is that how you're still thinking about it once it gets launched or any other thoughts you could provide there.

Speaker 7: So we've included guidance, we've included in our guidance revenues for Novum and really prominently in the second half of the year that reflects the successful launch of the product. As always, if that changes, we're happy to adjust.

So we've included guidance.

Included in our guidance revenues for Novum.

And really prominently in the second half of the year.

That reflects the successful launch of the product as always if that changes, we'll we're happy to adjust that moving forward as far as specific volumes.

Speaker 7: That moving forward as far as specific volumes. I don't know that I would get into too much detail on specific amounts.

No that I would get into too much detail on specific amounts.

Speaker 7: But, you know, to the extent that the pump is deferred, you know, we've been able to offset that either with sales of Spectrum or other product sales. So it's definitely underlying in our guidance.

To the extent that the pump is deferred we've been able to offset that either with sales of spectrum or other but other product sales. So it's definitely underline and our guidance.

Great. Thank you Jack.

Thanks, Matt.

Yeah.

Ladies and gentlemen, this concludes today's conference call with Baxter International Thank you for participating.

Speaker 1: Ladies and gentlemen, this concludes today's conference call with Baxter International. Thank you for participating.

39.

Okay.

Speaker 14: The.

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Yes.

Yes.

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