http://www.morningstar.com/earnings/47633885-baxter-international-inc-bax-q4-2012.aspx

Baxter International Inc. BAX
Q4 2012 Earnings Call Transcript

Transcript Call Date 01/24/2013

Operator: Good morning, ladies and gentlemen, and welcome to Baxter International's Fourth Quarter Earnings Conference Call. Your lines will remain in a listen-only mode until the question-and-answer segment of today's call. As a reminder, this call is being recorded by Baxter and is copyrighted material. It cannot be recorded or rebroadcast without Baxter's permission. If you have any objections, please disconnect at this time.

I would now like to turn the call over to Ms. Mary Kay Ladone, Corporate Vice President Investor Relations at Baxter International. Ms. Ladone, you may begin.

Mary Kay Ladone - Corporate VP, IR: Good morning, and welcome to our fourth quarter 2012 earnings conference call. Joining me today are Bob Parkinson, CEO and Chairman of Baxter International; Bob Hombach, Chief Financial Officer; and Ludwig Hanston, President of Baxter BioScience.

Before we get started, let me remind you that this presentation, including comments regarding our financial outlook, new product developments, 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. Please refer to today's press release and our SEC filings for more detail concerning factors that could cause actual results to differ materially.

In addition, in today's call, non-GAAP financial measures will be used to help investors understand Baxter'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.

Now, I'd like to turn the call over to Bob Parkinson.

Robert L. Parkinson, Jr. - Chairman and CEO: Thanks, Mary Kay. Good morning. Thank you for calling in. We're pleased today to announce financial results for the fourth quarter and full year 2012 and also provide you with our financial guidance for 2013. As you saw in the press release that was issued earlier this morning, adjusted EPS in the fourth quarter increased 8% to $1.26 per diluted share and for the full year adjusted EPS increased 5% to $4.53 per diluted share. On a reported basis worldwide sales in the fourth quarter increased 4% and for the full-year sales increased 2%. After adjusting for foreign currency, Baxter’s global sales increased 5% for both the quarter and full-year 2012.

Importantly, we continue to generate significant cash flow which exceeded $3.1 billion for the year a record level, while maintaining the discipline capital allocation strategy of returning value to shareholders through both dividend, increases and share repurchases. Even in the face of a challenging macroeconomic environment, Baxter expanded access and increased standards of care around the world, invested to enhance its competitive position, innovated and advanced the new product pipeline and delivered solid financial results while providing an attractive return for shareholders.

And in 2013 and beyond, we will focus on the four growth vectors that support our objectives and enable us to serve the interest of patients, providers and other key stakeholders. As we previously discussed, these four vectors include enhancing growth by optimizing our core business portfolio, advancing the companies new product pipeline, capitalizing on the opportunity to develop new business models which include public and private partnerships and pursuing business development initiatives that deliver enhanced returns in the near and long-term.

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