Vijay Kumar: My first one, Joe and Jay, for you guys on revenues. If I go back to the third quarter commentary of that 4% organic growth assumptions for fiscal ’23. The updated guidance here is reflecting a 350 basis point change. And I understand product exits in pumps or incremental rate, that’s maybe 100, 150 basis points impact. Can you help us bridge what changed from that 4 to the 50 basis points? Because I feel like vaccine headwinds, these were known as of the third quarter call last year. Are you contemplating some incremental supply chain headwind here on revenues? Or what changed from the 4%?
James Saccaro: Sure. Vijay, let me walk through that specifically. To your point, we have a reduction from 4% which we talked about on the earnings call to flat to 1%. And there’s really a few primary drivers of that. And interestingly, a lot of those impacts will be confined to 2023 which I think is really good news as we look at setting the stage for 2024. It begins with the large volume pump. And this — in my view, this is really about conservatism on the sales guide. We’ve taken out $100 million relative to our prior expectations, roughly 70 basis points of growth relative to that 4%. The second item relates to the weighted average market growth. If you reflect back on our January 6 call, we talked about a slight lowering of the WAMGR of our markets on a compounded basis.
But interestingly, a lot of that impact is most prominent and in fact, in some cases, confined to 2023. What I mean by that is the renal mortality issue that we face with — that we’ve been faced with really collide into 2023. In addition to that, the acute growth challenge really is a 2023 impact. And then some of the capital assumptions that we’ve made which, again, is another area we hope to prove conservative, is really focused on 2023. And so as we approach year-end and refreshed our view of patient census of expectations into 2023, we did lower the WAMGR for 2023 by approximately 100 basis points which is included in the commentary that we made on January 6. In addition to that, we’re looking very carefully at profitability by product line.
At the end of the day, we’re ensuring that every dollar in every market is a profitable one and a cash flowing one for Baxter. And so we have to made the decision to exit approximately $100 million or 70 basis points worth of sales. And then we did have roughly $50 million shift from 2023 to 2022 and I did make some commentary on this in the call. And so listen, we obviously don’t like to lower expectations on the sales line. But what I take part in is the fact that many of these impacts are not sustainable impacts but are rather discrete to 2023. And then we’ll expect to see acceleration from there. In the case of the pumps, let’s watch carefully how that evolves over the course of the year.
Vijay Kumar: Understood. That’s helpful, Jay. And then one on margins here. I think your prior commentary was 75 basis points on margin expansion and the current guidance is a decline of 150 basis points at the midpoint. So that’s a 225 basis points change. Maybe can you bridge us to what’s changed versus your prior expectations? Where the impact is coming from? Is this current guidance including any dis-synergies from spin? Or is that an incremental headwind as they think throughout fiscal ’24?
