Ladies and gentlemen, thank you for standing by. Welcome to the Intuitive Surgical Fourth Quarter Earnings Release. At this time, all participants are in a listen-only mode. Later on, we will conduct a question-and-answer session and instructions will be given at that time. (Operator Instructions) As a reminder, this conference is being recorded. I would now like to turn the conference call over to our host, Senior Director of Finance, Mr. Calvin Darling. Please go ahead.

Thank you. Good afternoon, and welcome to Intuitive Surgical's fourth quarter earnings conference call. With me today, we have Gary Guthart, our President and CEO; Marshall Mohr, our Chief Financial Officer; and Patrick Clingan, Director of Finance. Before we begin, I would like to inform you that comments mentioned on today's call may be deemed to contain forward-looking statements. Actual results may differ materially from those expressed or implied as a result of certain risks and uncertainties. These risks and uncertainties are described in detail in the company's Securities and Exchange Commission filings, included in our most recent Form 10-K filed on February 4, 2013, and our Form 10-Q filed on July 22, 2013. These filings can be found through our website or at the SEC's EDGAR database. Prospective investors are cautioned not to place undue reliance on such forward-looking statements. Please note that this conference call will be available for audio replay on our website at intuitivesurgical.com on the Audio Archive section under our Investor Relations page. In addition, today's press release and supplementary financial data tables have been posted to our website. Today's format will consist of providing you with highlights of our third quarter results as described in our press release announced earlier today, followed by a question-and-answer session. Gary will present the quarter's business and operational highlights. Marshall will provide a review of our fourth quarter financial results. Patrick will discuss marketing and clinical highlights and I will provide our financial outlook for 2014. Finally, we will host a question-and-answer session. With that, I will turn it over to Gary.

Thank you for joining us on the call today. 2013 was a challenging year for Intuitive. Trends that emerged in the second quarter of 2013 continued through the balance of the year, including revenue uncertainties for United States customers due to pressure on gynecology surgery broadly, the implementation of the Affordable Care Act and confusion surrounding the public debate regarding some da Vinci procedures. These factors resulted in the slowing of our growth in gynecology and a subsequent decline in the sale of systems in the United States. The year also featured several strengths in our business. Among them, the publication of several large studies supporting the clinical and economic value of da Vinci use. We also experienced the acceleration of procedure growth in Europe and Japan, broad based growth in general surgery procedures in the United States and continued adoption of our new products worldwide. I will start with a review of procedures. Year-over-year growth in procedures closed at 16%, led by growing use of da Vinci in general surgery in the United States, accelerating growth in the use of da Vinci outside of the United States and continued uptick in U.S. gynecology. General surgery growth in the United States was 93% in the year, including increased use of da Vinci in colorectal surgery and cholecystectomy using da Vinci Single-Site and Firefly, as well as growth in other general surgery procedures. In the fourth quarter, general surgery overtook urology as the second largest category of da Vinci use in the United States. Outside of the United States, procedure growth accelerated, rising 21% over procedures in 2012 based on strength in Europe and Japan. We will review procedure trends in greater detail later in the call. Looking at trends in capital sales for the year. Procedures deceleration in the United…

Thank you, Gary. Our fourth quarter 2013 revenue and procedures were consistent with our press release issued on January 14th. Fourth quarter revenues were $576 million, down 5%, compared with $609 million for the fourth quarter 2012 and up 15% last quarter. Procedures for the fourth grew approximately 12%, compared with fourth quarter 2012, and approximately 8% compared with last quarter. Procedure highlights will be covered by Patrick. Revenue highlights are as follows. Instrument and accessory revenue grew 6%, compared to the fourth quarter of 2012 and 12% compared to the third quarter of 2013. The increase relative to the prior year reflects procedure growth and sales of new products, including Single-Site, Vessel Sealer and Firefly, partially offset by lower instrument and accessory stocking orders associated with fewer system sales. The change from quarter reflects procedure growth in the sales of new products. Instrument and accessory revenue realized per procedure including initial stocking orders was approximately $1,930 per procedure, compared with $2,050 in the fourth quarter of 2012 and $1,860 last quarter. The decrease in the prior year reflects fewer stocking orders associated with fewer system sales, partially offset by new product sales. The increase from the prior quarter primarily reflects new products sales and the timing of customer orders. Systems revenue of $205 million decreased 23% compared with the fourth quarter of 2012 and increased 29% compared with the third quarter 2013. The decline in systems revenue primarily reflects fewer system sales in the U.S., partially offset by higher system sales outside of the U.S. In U.S., we sold 72 systems in the fourth quarter, compared with 133 systems in the fourth quarter of 2012 and 66 systems in the third quarter of 2013. The decline in U.S. system sales relative to the fourth quarter of 2012 reflects the…

Thanks, Marshall. Q4 year-over-year procedure growth was approximately 12%, which was led by U.S. general surgery and international procedures. In the U.S. general surgery was paced cholecystectomy, colorectal resections in a wide variety of emerging procedures, reflecting the interest in da Vinci surgery among different specialties within general surgery. U.S. urology continues to show signs of stabilization as modest declines in dVP or nearly offset by growth in treatment for kidney cancer. As expected, the growth rate for U.S. benign GYN procedures was down from Q3, which continued to place pressure on U.S. system sales. Q4 international procedure growth of 23%, led by urology, with contributions with GYN and General surgery, dVP update in Europe and Japan was robust accelerating in the back of 2013. During the fourth quarter, robust seller in fact 2013. During the fourth quarter. International dVP volume surpass U.S. dVP volumes despite representing approximately 30% penetration in key developed markets. Earlier this month, the U.K. National Institute for Health and Care Excellence, published an update to its 2008 to 2000 clinical highlights on prostate cancer, which recommends consideration of robotic surgery in the treatment of prostate cancer. The recommendation also states that surgical treatments of localized prostate cancer are cost-effective by basing them in centers that are expected to perform 150 procedures per year. As Gary mentioned, our U.S. customers are increasingly segmenting our business between less complex benign and complex for cancer procedures and we are pursuing strategy to realize the opportunities with the new segments. The adoption of da Vinci surgery in less benign procedures has changed our procedure mix, growing from approximately 40% to approximately 60% of our U.S. procedures over the past three years. In order to provide solutions for customers to address lower reimbursements and alternate types of care, we have…

Thank you, Patrick. I will be providing you with our financial outlook for 2014. Starting with procedures. In 2013, total da Vinci procedures grew approximately 16% to roughly 523,000 procedures performed worldwide. We exited 2013 with fourth quarter procedures up approximately 12% versus the prior year. During 2014, we anticipate a stabilization of the procedure growth rate with the full year procedures growing within a range of approximately 9% to 12%. Based on an increasing proportion of benign procedures in our procedure mix, we anticipate a more pronounced quarterly seasonality impact in the upcoming first quarter 2014. Moving to revenues, as has been discussed earlier, several factors are pressuring our business, making it difficult in the near-term for us to predict system sales volumes, and as a consequence, total revenue. As we enter 2014, our visibility into system sales is challenged by the breadth of the range of our procedure growth forecast. As a reminder, procedures drive capital sales and the relationship between procedure growth rates and capital sales is highly sensitive. Economic pressure and uncertainty at hospital associated with the implementation of the Affordable Care Act, evolving utilization patterns and point-of-care dynamics as described by Patrick earlier in the call and likely variability and the timing of Japan, system sales given the time until additional procedure reimbursement anticipated in 2016. Given our capital sales performance in the back half of 2013, and the persistence of some of the issues described above, it is likely that we will sell fewer systems and 2014 in the 546 systems sold in 2013. Due to limited visibility regarding the capital side of our business, we will not be providing revenue forecast at this time. As we gain greater visibility, it is our intention to reinstate revenue guidance. We believe deeply in our ability…

Thank you. (Operator Instructions) The first question comes from the line of Tao Levy with Wedbush.

Hi. Good afternoon. A couple of questions on my end, obviously, the decision not to provide full year guidance leads us a little bit I guess not necessarily confused, but struggling to figure out where our number should end up this year especially given all the volatility. Would you maybe comment on the comfort that you feel around sort of where the consensus is that at this moment of your top line or do you stay away from that type of guidance?

Not clear where consensus will wind up, so I think try and project where that will go and I think it's probably not worth speculating on the call. I think we laid out the underlying dynamics that have produced near-term visibility through the script pretty well and if we had greater visibility on that, we would share it with you. I think that the looking out at what the in-patient admissions will be for the benign procedures we serve and what those dynamics will be has been moving around looking at how hospitals model their revenues in the face of ACA in that benign segment that we operate in and then trying to predict what Japan will do. We have an operating plan. We understand where we are going. We are disciplined about what we expected to do in terms of activity, but this is a wide range and so rather than speculate, I think this is where we are.

Okay, and I think at the beginning of the script, you had mentioned that there is more concern around first half of the year, specifically on capital system placements. Is this something that happens at the middle of the year, back half of the year that would get you more comfortable?

I don't think its an advance. I think its more around as we see how patient flows are going to our customers, although they will have a better view and as their view improves, our view improves. I think it is really as simple as that.

Okay, and just lastly, anyway you can talk about level of their profitability of Si-e system versus the Si given that that's becoming a bigger part of your mix? Thank you.

Well, I will as Marshall to take you through a little bit of what framing looks like and my only comment before he jumps in is, beware of averaging. There is now multiple products in the line and the average is not necessarily predictive of what's going on underneath.

So just as I said in the call, the average pricing that we receive for Si-e's was between about $1 million, $1.2 million depending on the configuration that's obviously lower than an Si with four arms. The Si-e does only have three arms and so it does not cost the same amount of money to produce. The gross margins are several points below. It is six, seven points below what they are for Si systems. It's able to open benign procedures for us. It is clearly an outpatient settings, we are upward.

Okay. Thank you.

Thank you. We will go to the line of Tycho Peterson with JPMorgan.

Hi, thanks for taking the question. Maybe just following up on the last one. What should we be thinking about in terms of a run rate for Si-e placements and maybe could you also discuss on your pricing assumptions that you are thinking about for '14 overall?

So we really have, if you go back, we sold three in the first quarter, two in the second quarter, two in the third quarter and then we sold 21 total. There are 20 in U.S., 21 total. To me, that's one quarter of success in selling it to customers that are looking for a lower cost system for benign conditions. I think I don't have enough data to really predict exactly how many we will be selling every quarter. So I am not going to go there.

Okay, and then can you comment on your pricing assumptions for '14?

Yes. I assume you mean the system pricing assumptions, and like Gary said, here it is really important to be aware of the averages. If you look at it overall, our ASP was about $1.5 million in both the full year of 2012 and 2013 and in Q4 our ASP declines to $1.455 million as we saw this significant increase in the lower-priced three arm Si-e's. As you know, these Si-e's are targeted towards a growing procedures segment of Single-Site and less complex procedures and in 2014 we will remain focused on ongoing these procedure category with more Si-e system sales but also as was mentioned at the same time, the proportion of the higher featured dual console and Firefly systems also increased in 2013 and furthermore the systems that went to Japan's in strong numbers were higher. So I guess the point of it is, now going forward the ASPs will potentially vary more significantly quarter-to-quarter based upon this broader pricing mix and I will just fall short of trying to guess which way it is going to go.

One comment I guess I would add for a little clarity there. I don't think with any sub-segment, the ASPs are going to fluctuate that much. It's a mix of those sub-segments that makes it predictive.

Okay. That's helpful. Then on Japan, it sounds like we should assume that you had a replacements here and that's going to slow a little bit. Is that the right way to be thinking about it for '14?

The timing of it is very hard to predict, but we have '14 and '15 before the next round of a broad national reimbursement. There may be hospitals that get individual redemptions to collect data, but broadly, there will be some time and so figuring out how much absorption there will be in Japan over that two-year period as it's just very hard to model, so looks likely it's hard to predict, but over time. I think it's going to be constrained and so directionally, I do not think you will keep selling systems at a very high rate and so that constraint is broken with reimbursement.

Last one you talked about, we are having to reinvest it this year, you had a small headcount reduction at the end of last year. Should we be thinking about headcount being up and talk - if you look at more specifically if you can on where those investments are being made? You need to build the channel ambulatory markets for example.

Good question, so we had a small reduction in our U.S. Sales force at the end of the year. It was about 50 people just for those who maybe listening to the haven heard this conversation. We had a team that had grown that was layered on top of our main course design to pursue gynecology. As gynecology has matured in the U.S. they were in essence double serving those accounts, so we hold them back into the main force, but that's was 50 out of a commercial force of about [800]. We anticipate growing forward in the year in a few places. Europe, we continue to see investment in our organization there. In Asia, more broadly we will invest in that opportunity and in our channel there. In the U.S., in product development, we will continue investments and other parts of operations. I think headcount growth will continue through the year. I won't be a sharp increase, but I think that it will be targeted where we needed. With regard to how we discuss opportunities with hospital customers in terms of standard of care. we think our capital sales team is well positioned to start the year here to have those conversations.

Okay. Thank you.

Thank you. We will move to the line of David Roman with Goldman Sachs.

Thank you and good afternoon. I also wanted to point out that it's very helpful all the disclosure you are giving on the website now it takes time to add that all together, so thank you for that. My question I wanted to just take a step back for a second if you look at the overall U.S. market and what transpired this year. I guess in some ways when I look at the trending capital that this could have - this could have happened to any point in time as procedures slow, what I am trying to reconcile that you had a modest slowing in procedure volumes, but a very significant drop off in capital, so I am just wondering if you could talk about why we should think of is overcapacity in the and that you have penetrated just a large segment of the addressable market here and there is going to be sort of a normalization period until procedure volume picks backup.

Let me start and Calvin, you can jump in. I think a couple of things to know underlying capital sales are really three factors and U.K. and a couple, but one of them is procedure capacity and that's a highly sense development so that just a percent change in procedure growth rate can free about 20 worth capacity give or take not on an exact number, so there is a high sensitivity there since capacity is highly sensitive to the growth rate. That's one element. Second element is, do hospital customers feel they have the right technologies to pursue the opportunity that's in front of them, so if they have enough system and they want to pursue colorectal or Single-Site, then there is an upgrade opportunities for them to move up and Si. Then Patrick pointed out in section that not always this is not always in the same awkward so that if hospitals are doing benign procedures in a different point ambulatory surgery environment. It is not the same sort of aura, so while they have capacity in one place, it's not necessarily in the right place and so those three things are underlying, what happens and one of them sensitive procedure volume. The other two one sensitive technology one is point-of-care. Calvin?

Yes. I mean I don't have much to add to that other than just to acknowledge that prior to 2013, we had really a longstanding history of gradually increasing utilization per system and it is true that based upon the issues that we described, we had a modest decrease in utilization, average utilization. Again, be aware of averages in 2013, but again capacity is really just one of the factors involved in system acquisitions by hospitals.

To finish the thought to acknowledge your question, I think procedures are the number one. Of the three things, procedures are very important and procedure growth rate is important and it's something we are focused on.

Okay, that's helpful. Then maybe just a follow-up. As you are think about the operating profile of the business from a profitability standpoint, I know you have talked a lot about being focused on topline growth and while your margins have come down they are still very high, particularly on a cash basis, so can you maybe just talk about how you are thinking about P&L leverage versus efforts you are undertaking to re-stimulate topline growth? I would assume that at this point, resumption of topline growth is the priority and that you have financial levers to help protect earnings? Or am I not thinking about that the right way?

I will start and Marshall can chime in. I think the first thing is, we will manage the business for the long-term and we will look around and say, the mission of the company and the way we ought to be evaluated is, are we satisfying the mission of improving surgery in the areas and markets that we can do that and I think there's a lot of opportunity for us and we will pursue that. Fiscal discipline is important and I think it's important in two ways. One is, spending discipline is important to make sure that we are careful about where we spend. And investment discipline is important. In this period of time we will invest. We will invest in a disciplined way but we think that the opportunity ahead of the company to make surgery better is substantial and we are in a great position to do it and I think pulling back that set of investments in the face of some near term uncertainty would not be in the long term interest of the company. So that's how we look at it. In terms of operating levers, they are sort of near term and long term and I will let Marshall talk to that.

Some operating levers, they operate on their own. What I mean by that is commission, a large portion of our cost base is variable. It varies with revenue. So even in the SG&A category, a large portion is commission based and so as revenue fluctuates so does the amount of costs that we have but otherwise, I think Gary outlined, that some of the other things. I think that we have some levers but we are going to continue to invest in our future.

I got it. Thank you.

Thank you. We will go to the line of Ben Andrew with William Blair.

Good afternoon, guys. It's actually Margaret this time. Thanks for taking my questions. Gary, as we look at the opportunity in colorectal in 2014 and as you kind of look at the current system and the current tool set, do you think that can get you to the procedure growth guidance that at least you are modeling internally, if not giving to us? Then how do you view the rate of penetration in general surgery over the next several years and 2014? Is it going to be similar to dVP, dVH or slower? Any clarity would be helpful?

I will speak to the first one. The second question has a few moving parts. On the first one, we think that the set of Vessel Sealer, Stapler. As you know, Stapler has a whole marketplace. It is quite broad in terms of the number of sub-products in the stapling family. Our first offering is targeted at colorectal and the feedback on that has been great and then perfusion imaging with Firefly. Those three things together combined with da Vinci is really powerful and a great staring point. It will not be the last set of things we do in general surgery, but we think it's powerful and I think that it is in a good position to power the growth that we are seeing in colorectal surgery here and then later in the markets outside the United States. In terms of what that looks like for total colorectal as a whole, I think we are early in the adoption but I think we will have a real opportunity for growth there. You had said how do we think about general surgery growth rates as a whole, and I will give you one framework that I think is important. We have gynecology and urology as precedents. In urology, prostatectomy was really the lead procedure and there are just a few procedures that followed it, kidney cancer treatment in partial nephrectomy, bladder cancer treatment in cystectomy. So it's not a huge broad set. Gynecology is little bit broader but hysterectomy was really the leading growth engine and then some other procedures behind it, myomectomy and sacral colpopexy, pelvic reconstruction. General surgery does not quite have that same structure. There are subspecialties that are quite broad. So you have colorectal subspecialty. You have foregut procedures. You have bariatric surgery. What the folks do in academic centers is quite different than what they do in community centers. So the category, as a whole, is going to be the sum of adoptions in different places. The sum of adoption in Single-Site, the sum of adoption in colorectal and those are a really different. Single-Site is largely done in community settings, cholecystectomies are, colorectal procedures are largely concentrated in cancer hospitals and so those different growth rates, they differ. How they add up? I think is a little bit hard to predict. Patrick or Calvin, anything you would like to add?

Is there something on the learning curve that can maybe speed that up as you come out with kind of new add-ons toolsets and so on to help drive general surgery?

I think that the new instruments that we are bringing in, I think the broadening of the launch of Stapling and the use of Firefly, those are enabling technologies. They speed the efficiency of the procedure, they allow a better workflow so I think that's helpful. The investments we have made in our training centers are really to make for easy access for learnings surgeons that have access to resources and I think that's been a good investment for us and that can help the investments we have made in simulation and access to simulation are other things that I think help. We are really happy and feel that the data study is important in showing that the totality of learning resources for surgeons. It's not just what Intuitive does, what Proctors do, what advanced [work] does, has resulted in great and safe adoption of new technology, and I think that's a powerful message and likely to be repeated in other disciplines beyond just prostatectomy.

Okay, then on the gynecology side. You guys are clearly, fairly well penetrated in hysterectomy and kind of some of the other ancillary procedures and the phacos, so how should we think about that as a category now that it's over 50% penetrated? Should it materially slow in 2014? Gradual changes and then could Single-Site actually become quickly material? Thanks.

Fair question. I think, and you know this well, I know your team knows this well. Once you are on these adoption curves, the year-over-year growth rate falls, that's just the nature of those adoption curves On the multi-port side, I would expect that it continues in the U.S. but there is a continued deceleration the pace of which will be hard to predict and we will see. Single-Site hysterectomy is an opportunity. We are early in that opportunity, we have been in limited launch. The limited launch has gone very well clinically and it's gone really well from uptake in the way surgeons who are being trained have adopted it. We are adding some instruments into that kit, bringing back some listed instruments that will we think optimize the procedure and give surgeons a little more flexibility in approaching tissue and we are working through those things. I think that's a well known pathway for us and we think that will help. That's still early. We are not into a full very broad launch there. Although we have broadened the launch from its early days, really starting in the fourth quarter and continuing through here, so I think that launch will open up through the year Single-Site hysterectomy and we will continue to report on it to you as to how we progress.

I would just add, we still feel we have a significant opportunity here in Women's health, specifically hysterectomy on the more complex multi-port side. There are over 100,000 women now are still having open hysterectomies in the United States, so we think our technology can improve their outcomes. Then we are very early on the less complex side, on our Single-Site offering where there is something like 200,000 laparoscopic in vaginal procedures that perhaps you would have a place there.

Thank you.

Thank you. We will go to the line of Bob Hopkins with Bank of America.

Hi. Thanks. Good afternoon. Can you hear me okay?

We can.

Great. Just a couple on the guidance. I heard your comments about operating expenses for the year, but I was wondering if you had any comments on gross margins, both as it relates to 2014, and then given some of the changes in the customer mix longer term, just any longer-term thoughts on gross margin as well? Again for '14 and then longer term any thoughts on gross margin?

Yes. I think you saw in the fourth quarter there were some points there were mentioned first off, the margin the gross margin was impacted by lower production volumes which, when you divide some of the manufacturing cost by fewer units of production, that has a negative impact on margin, and so you saw that. Could that be a continuing headwind to some extent I would say yes. Beyond that, you come down to some of the product mix discussions on gross margin that I think, we are not predicting how much is going to be Si-e versus four arm Si. Geographic, I think it's too many moving parts to make a prediction there on that.

I think you would ask kind of a longer-term question, directionally how do we think about it. And I think as we look at the opportunities and we talk about segmentation of the business, we want to match the clinical and technical capability of the products we bring, the procedure opportunity and the underlying economics of those procedures together. We think we have opportunities to do that and we think it's really in the best interest of the company to do it. I think we can get to an attractive margin profile in both segments. Some of that is near term and some of that is long-term in terms of investments and products. So we will do that.

Then on the decision on the revenue guidance, or lack thereof, for 2014, I just want to ask a little bit about that, because you guys have always been so adamant about saying that system sales are driven by procedure volume and you are willing to give procedure volume numbers, but not some thoughts on system sales. So I am wondering, if there is anything sort of different in that relationship going forward. In other words, we have historically assumed that utilization just has to go up and that's the way we have tried to predict your system sales. Is there something unique about 2014 that would cause that relationship to bifurcate further? Do we need to assume much greater utilization than we have been seeing in the past in terms of increases and again, just want to ask about that, because you guys have been so adamant about the correlation.

I will just maybe start. Two ways to think about it. I think the first one is, the range and procedure guidance is pretty broad relative to the base and because system placements are sensitive to that range, that's a multiplier on the uncertainty. That's one. The second is that, it may be that utilization trends differ over time just because of point of care, as Patrick had mentioned pretty clearly, and because hospitals may look out and say I want greater capital utilization of what I have got, and I am willing to make some compromises and convenience to get that. We may see those two different things that work against each other and so how that plays out. What I would say on that second half is that, those changes are unlikely to switch on a dime, because they are operational in nature. You have to move, you have to adjust hospital operations to make it happen. So that may happen, but I don't think that happens the day after tomorrow. I think that's something that would play out in time.

To add to what Gary said, you are right. We do believe that procedures will drive systems in the long-term. So there's going to be short-term fluctuations in capital sales, but overall long-term, in mature markets you are going to see capital sales will catch up over time. Having said that, in nascent markets like Japan, which also causes our overall utilization statistic to fluctuate, we are selling systems ahead of procedures and so that one's more difficult to predict.

And then lastly, you guys have again talked about the opportunity for outpatient, more benign type procedures. Can you just help us think about how big of an opportunity that might be for the company? I assume today your sales into outpatient surgery centers and centers like that are pretty minimal. So have you guys given much thought to how big an opportunity that might be?

As always, we start with procedures and work our way back rather than thinking about outpatient operating rooms and work our way forward. So Calvin or Patrick can speak to it.

Yes. So if you look at where most of these outpatient surgeries are performed, it's in a hospital outpatient setting. So either within the four walls of the hospital or in an adjacent ambulatory care facility, but the predominance of them are in fact channels as opposed to the physician owned freestanding facilities.

Thank you.

We have time for one more question.

Thank you. That will come from the line of David Lewis with Morgan Stanley.

Good afternoon. Thanks for fitting me in. Gary, I wonder if you could just talk qualitatively about procedures in 2014. I am assuming the two biggest dynamics driving procedure deceleration is one, obviously still very rapid growth in general surgery but maybe slowing off of a large base and then hysterectomy, it's deceleration or stabilization. I wonder, if just very broadly you could help us understand those two buckets? Can general surgery hold its growth rate trend line based on a further or broader launch in minimum invasive in colon rectal? And do you expect dVH to hold its trend line, slightly decelerate or potentially even improve in 2014?

Yes, I will start with hysterectomy. I think that the underlying disease state is not changing in the U.S. I don't see any rapid change there. I think the set of treatments that are being offered are also not changing very much. What we seem to be seeing change is payor behavior and kind of patient decision making with that payor behavior and so it's a little bit hard to predict what that will look like, but over time and I think any of the three possibilities you outlined is possible. I think, I look out and Calvin mentioned it as well. There are 100,000 or so open procedures being done. For women in United States for hysterectomy, many of whom are great candidates for proven safer, minimally invasive procedure and yet they are getting open procedures and that is an opportunity, so if that patient population comes in and has an opportunity then that would be a positive and an upside. The other possible upside is of course single incision, Single-Site hysterectomy as that kit rolls out further and we augment it, so those are possible upsides. How payor behavior changes through the year? What some of the patient decision-making looks like? That's a little bit harder to predict. On the general surgery side, as you know the adoption rates are always year-over-year growth rates and adoption curve always highest in the beginning and then they decline over time. As the base grows, it's absolutely a natural progression. The speed of that I think is going to depend on procedure-by-procedure. What is the total available market for single incision cholecystectomy, that's an estimate. Everybody would look at that and try to figure it out. It's not a clear substitution against another one that's just sitting there, so we will see what that looks like. Colorectal, I think, we feel really good about. You look at colorectal and we bring a huge amount of value there. Cholecystectomy, patient enthusiasm, surgeon commitment, training and growth in those procedures has been really encouraging, and the last thing is that general surgery has been growing beyond those two into some other things and we will let them evolve for a couple of quarters, but I think that will be interesting to see where else general surgeons take the opportunity in the technology and it looks to be broader than just those two. Overall, I think our feeling is, we could bring a lot of value to general surgery is high.

Okay. Gary, just one quick one on, just so I understand the Si-e, I mean that's system.

Make it a quick one.

This is going to be very quick and I promise even for me. The Si-e it's been available for a while, but it sounds like there is sort of growing enthusiasm, so I am trying to understand that trend line has been relatively stable which is the hard to understand, just obviously because this year larger capitals under pressure, so is the situation with Si-e, you now see better positioning in ambulatory care market, had there been upgrades to that system or is it simply going to be a corporate focus on the Si-e heading into 2014. I am just trying to figure out what's changing relatively given this system has been available. Thank you.

Yes. Good question, so short answer, combination of a couple of things. The Single-Site instrument kit is both, procedurally adopted to a three-arm system, it's also priced right for that set of procedures. Then Firefly adding into that is a nice mix together that gives kind of a fully capable system to do those things in an ambulatory setting, so I think those combinations bought together helped and I think an organizational alignment around describing the value of that also helps, so that's how we have gotten where we are. Thank you for the question. That was our last question. As we have said previously, while we focus on financial metrics such as revenues, profits and cash flow during these conference calls, our organization focus remains on increasing patient value by improving surgical outcomes and reducing surgical trauma. I hope you are following segment of an editorial by Dr. Tim Wilson, Chief of the Division of Urology and Neurologic Oncology, at the City of Hope Cancer Center gives you some sense of what this means to da Vinci surgeons and their patients. "In this era of health care reform, policymakers, hospitals and providers are all evaluating ways to reduce the overall cost burden to society while improving the quality outcomes for patients. Often lost in the debate is the need for investment in technologies that can help mitigate the significant cost drivers of health care. Robotic-assisted surgery is a game-changing technology in medicine yet it is deeply misunderstood and often dismissed as just another expensive tool for driving costs up. This could not be farther from the truth. The cost of that technology has to be compared with the alternative cost of treatment. Displacing large abdominal incisions that have complications, high rates of death, blood loss, higher risk of infection…