Good morning. Welcome to the Waters Corporation Fourth Quarter 2012 Financial Results Conference Call. [Operator Instructions] This conference is being recorded. If anyone has any objections, you may disconnect at this time. I would like to introduce your host for today's call, Mr. Douglas Berthiaume, Chairman, President and Chief Executive Officer of Waters Corporation. Sir, you may begin.

Thank you. Good morning, and welcome to this Waters Corporation Fourth Quarter 2012 Financial Results Conference Call. With me on today's call is John Ornell, Waters' Chief Financial Officer; Art Caputo, the President of the Waters division; and Gene Cassis, the Vice President of Investor Relations. As is our normal practice, I will start with an overview of the quarter's highlights, and John will follow with details of our financial results and provide you with our outlook for the first quarter of 2013 and for the full year of 2013. But before we get going, I'd like John to cover the cautionary language.

During the course of this conference call, we will be making various forward-looking statements regarding future events or future financial performance of the company. In particular, we will provide guidance regarding possible future income statement results of the company this time for Q1 and full year 2013. We caution you that all such statements are only predictions and that actual events or results may differ materially. For a detailed discussion of some of the risks and contingencies that could cause our actual performance to differ significantly from our present expectations, see our 10-K annual report for the fiscal year ended December 31, 2011, in Part 1 under the caption Business Risk Factors, and the cautionary language included in this morning's press release and 8-K. We further caution you that the company does not obligate or commit itself by providing this guidance to update predictions. We do not plan to update predictions regarding possible future income statement results except during our regularly scheduled quarterly earnings release conference calls and webcasts. The next earnings release call and webcast is currently planned for April 2013. During this call, we will be referring to certain non-GAAP financial measures. A reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures is attached to the company's earnings release issued this morning. In our discussions of the results of operations, we may refer to pro forma results, which exclude the impact of items such as those outlined in our schedule entitled, Reconciliation of Net Income per Diluted Share included in this morning's press release.

Okay. Thank you, John. Well, 2012 was certainly a challenging year for Waters, especially in comparison to the stronger growth rates we enjoyed in 2010 and 2011. After a slower-than-expected start to the year, we recalibrated our expectations and continued to track at a pretty consistent organic growth rate through the following quarters. However, and as we have seen in previous periods of sluggish demand, pricing held up across our product line and we were able to control our expense growth. These factors were important in delivering stable levels of profitability. If you look at 2012 growth rates across our major product lines, we continued to benefit from newer core offerings in chromatography, mass spectrometry and thermal technologies. Our recurring revenues, the combination of chromatography consumables and total instrument service sales, generated consistent growth in 2012 and contributed to our overall profitability. Pharmaceutical end markets were mostly stable across the year while many industrial chemical customers, given the weaker general economic conditions, held back on capital spending. Governmental and academic spending during the year, as might have been expected, was pretty soft. Geographically, we were pleased by the relative strength of our business in Europe. At the onset of the year, the concerns that instability in smaller European Union countries would spread across the continent appeared to have been somewhat overstated. And in fact, European pharmaceutical demand remains sufficiently strong to offset the somewhat slower sales to governmental and chemical consumers. Our business in developing regions was mixed during the year. Most importantly, growth in China remained robust off a strong 2011 performance. On the other hand, a convergence of issues hampered our performance in India. Our developing market businesses in Eastern Europe, South America and Eastern Asia delivered uneven results and cumulatively performed at levels weaker than we had…

Thank you, Doug, and good morning. Fourth quarter sales were about the same as last year's, and non-GAAP earnings per diluted share were up 2% at $1.59 this quarter compared to earnings of $1.56 last year. However, on a GAAP basis, our earnings were $2 this quarter versus $1.51 last year, and a reconciliation of our GAAP to non-GAAP earnings is attached to our press release issued this morning. Our GAAP results this quarter contain a large tax benefit associated with recent tax planning activities that will allow us to access previously trapped net operating losses and apply them to future taxable income streams within our legal entity structure. This will result in reduced cash payments for taxes over the next several years than would otherwise have been the case. This benefit is calculated to be about $36 million and results in $0.41 of EPS benefit in our GAAP results. These benefits do not affect our non-GAAP earnings. Reviewing Q4 sales results in comparison with Q4 last year before foreign currency translation, sales were up about 1.5% and currency translation reduced sales by just over 1%. Looking at our sales growth geographically and before foreign exchange effects, sales within the U.S. were down 3%, Europe sales were up 2%, Japan was up 1% and sales in Asia outside of Japan were up 12%. On the product front and in constant currency, within the Waters division, instrument system sales decreased by 5% and recurring revenues grew by 8% this quarter. Within the TA Instruments division, total sales increased by 7% versus prior year. Now I would like to comment on our Q4 non-GAAP financial performance versus prior year. Gross margin performance came in at 60.1%, down modestly from Q4 last year. This decline was largely the result of currency translation as…

Thank you, John. Operator, I think at this point, we can open it up for Q&A.

[Operator Instructions] Our first question does come from Daniel Brennan of Morgan Stanley.

Doug and John, you've discussed throughout the call an increasing kind of tone of business possibly as, I guess, we exited the quarter. I think Doug, you talked about an ordering trend in high-end mass spec. Maybe if you could just flesh out a little bit kind of the pacing throughout the quarter that you saw and maybe some of this kind of forward visibility on improving demand trends.

Yes, Dan. I think most of it's qualitative. And I caution everybody to say that it doesn't necessarily reflect longer term trends. We definitely saw an improvement in the fourth quarter in both the drop rate of high-end mass spec and more qualitative things, like demo requests and quotes. So that we see as positive. We see that continuing in the early part of 2013. We're also hearing what I call murmurings of improvement coming from our customer base. What makes it remarkable or notable is that it's different from what we were seeing at this time last year, which was much more cautious. So it's pretty much across the board that we're seeing those qualitative comments as being -- as leading to more optimism than pessimism. Does that cover your question, Dan?

We can go to the next question. Amit Bhalla of Citi.

Just 2 quick questions. I guess, number one, Doug, can you just talk a little bit about the outlook by regions and end markets for 2013? What's the underlying assumptions within the guidance you laid out? And then I have a follow-up question on India.

Sure, I'll ask John to lay it out. He's got the data right here.

Yes, I think as we think about the full year and look at the geographies around the world, the expectation is that developing economies, largely Asia outside of Japan, portions of Eastern Europe, South America, Central America areas that we typically bring in to about the 30% that we talked about as being our emerging market exposure, we're looking for that to continue at kind of a high single-digit rate. We've seen that be better generally than that in actual results, but we tend to target something that's in the high single digits for those regions of the world. And then in areas such as U.S. and Europe, given the base of comparison that we have, we're looking for low single-digit growth this year in those parts of the world, maybe starting off closer to 2% and then closer to 3.5% perhaps. And then Japan, we're looking for a bit more of a difficult slog there, maybe 1% or 2% growth in that region. So that's kind of the outlook by geography.

And the end markets? And then I guess, I'll just throw in my India question. You had some pretty easy fourth quarter comps in the prior year. You're talking about some CRO issues. Can you flesh India out a little bit more in terms of the details of what's really happening there?

Yes, I think what we've talked continuously about in India is that these customers are facing weaker rupee issues, wherein they're challenged by both the capital requests, as well as financing issues, that most of their debt's denominated in stronger currencies, and that challenges their ability to aggressively spend new capital. They've also had regulatory issues that have made them cautious in certain areas. We can pretty much look at almost every item that comes into India in terms of the market share dynamics, and we're convinced that there's no significant market share erosion going on in our business in India. So I know this is getting to be a little bit of a broken record; we're pretty confident that it's going to change. We're not happy that it's taken longer than we expected, but we think we'll see a change in 2013 and we'll see positive results in India.

And the question on the end markets?

I'm sorry, what was that question?

The original question was your underlying assumptions on geographies and end markets. I didn't hear anything on end markets.

We're looking at pharma to grow kind of in the mid single-digit range. It could be, maybe 6% -- so closer to 6% than 5%. Government and academic, kind of flat, maybe a modest amount of growth as we exit the year but starting off slow. And then the applied markets, including food, environmental, industrial, somewhere in kind of the 3% to 4% range.

Our next question does come from Isaac Ro of Goldman Sachs.

The first one was just on UPLC. I'm wondering if you could maybe give us an update on where we are, and we're a few years into that product cycle, and wondering how you're measuring the penetration of that technology from an installed base perspective. And then maybe if you could offer some comments on what you're seeing on consumable attach rates.

Yes, I think we're very happy with the penetration of UPLC in almost all the early stage R&D segments of our market. I will say that it's taken longer to penetrate, although we are beginning to see penetration in downstream applications, particularly in pharma, particularly in mainstream QC. We certainly continue to hear our customers talk aggressively about taking UPLC into those applications. But frankly, up until this time, it's probably been a little more talk than action. We think that has a lot to do with the fact that capital is tough to come by and that it's just tougher to get capital in those large pharma applications. It is true that we're seeing a lot of success in penetration of UPLC in the generic drug manufacturers, and we think that that's a continuing dynamic that will continue to benefit us. In terms of attachment rates, we're happy with the continued strong attachment rates of consumables even at this phase, many years down the track, that we continue to see very high attachment rates of the UPLC consumables. It is true that since we sell braces of these columns with a new instrument placement, that because of the decline in instrument placements that we saw during this year, that that certainly affected to some extent the initial flow of our UPLC columns. But they still held up very nicely in each application.

Okay. So if I can just clarify what you said, it sounded like you were saying we're still maybe not quite halfway through the upgrade cycle on the equipment. Just -- I didn't want to put words in your mouth, but just making sure that's kind of the way you're framing it. And then last one for me was on longer-term tax planning. John, I think you guys have said in the past you have a tax shield I think in Singapore that expires in the near term. Anyway, just plans on what you plan to do there to offset it?

Yes, we're going to begin to look at options on that front that runs out 3 years or so down the road. So we'll start this year to think about what incremental product transfers maybe could be done to extend our benefit in Singapore. This -- we can think about what we might do in Ireland as well, incrementally from where we are today. The new product lines that we're developing on convergence chromatography might find a home over in those regions of the world. That might be a bargaining chip that we could use to move another piece of technology and gain something incremental on that front. So you'll hear more about that as we begin to work through that this year in anticipation of that benefit running out at the end of '15.

We think that we have any number of irons in this fire that will enable us to not see extraordinary increases on our effective tax rate even 4 or 5 years down the road, but those are actions that will play out in the next couple of years.

Our next question does come from Tim Evans of Wells Fargo Securities.

John, you talked a little bit about the long-term guidance being in effect, and are you referring to the kind of 8% long-term top line and 15% bottom line internal targets that you set for yourself? And if so, what do you see changing about the current environment that would kind of allow you to get back to that level?

Well, I think we look at this year certainly as a transition year from a very low-growth environment that is really a point off the line, certainly, from a history perspective, looking at where we've been and where we think we're going. We look at the opportunity that we have with some of the new products that we currently have in our portfolio, others that are coming into play that we think longer-term will add to the growth rate. And we don't believe that the economic environment that we live in today is the one that we're going to live in for the future, 2 , 3, 4 years out. So we do think that we're going to come back to some level of moderating demand in various markets that affords us the opportunity to grow somewhere closer to that 7%, 8% top line as we exit this year and move into next year. So we believe that there's incremental application opportunities for these products, maybe in clinical. We look at the biologically synthesized drugs in the drug pipeline, and think that there's opportunities to, perhaps, overtime introduce mass spectrometry into the QA/QC applications, new food safety opportunities in the States. So there's a myriad of both potential market opportunities that we think longer term allows us to get back to those 7%, 8% top line-type growth numbers that typically have leverage to about 15% growth in earnings.

Yes. We think pretty clearly that we're coming off a period of -- at least a year, maybe longer than that -- of some of the toughest macroeconomic conditions and some things that disproportionately hurt areas in our sweet spot. We just talked a lot about India, and India alone has cost us several points of growth in the last 1.5 years. So it's easy to kind of look at the well you're down at any particular point, and think the future's always going to kind of mimic that position. We think that for the most part, we're going to be coming out of these tougher market conditions and going into a more normal position, particularly more normal in some of our sweet customer spots.

Our next question does come from Dan Leonard of Leerink Swann.

Question on the gross margin guidance. Is there anything happening in the gross margin line besides foreign currency? I just would have thought that there would have been some more leverage off of a 5% organic growth expectation on the gross margin line.

Yes, that's a good question. And there is one other item that we've highlighted, and that is, is that this year, we're beginning to ship the -- some of the fuller capabilities of our UNIFI software platform, and that is triggering the beginnings of meaningful amortization of capitalized software. So this year, we have about a $10 million to $11 million increment in costs associated with that amortization that's impacting the gross margins as well. Because, otherwise, we would have seen a little bit less of an impact overall in the margin. So between that $11 million and a very unfavorable yen, they combined to provide what's there on -- what I've described.

That is a non-cash charge, but it still is reflected in our non-GAAP earnings.

Right, non-GAAP results. Right.

Our next question does come from Doug Schenkel of Cowen and Company.

I was wondering what levers are available for you to pull at the operating line if things get off to a slower-than-expected start this year? I mean, I guess, I'm just thinking about SG&A as a percentage of sales being down about 180 basis points versus where you were into 2009. The rate of growth in R&D spend really moderated in 2012. You just talked about your longer-term expectations of 7% to 8% top line growth in response to Tim's questions. I guess I'm just wondering how much more you'd be willing to cut in 2013 if you get off to a slower-than-expected start out of the gates. And then conversely, are there areas you've identified where you'd really like to pick up the pace of investment if the year gets off to a better-than-expected start?

I think -- let me say, Doug, that we have some ability to moderate our spending plans in the face of somewhat weaker conditions. I wouldn't have you believe that we can cut expenses dramatically in the face of a very significant shortfall on revenues. That's why we have looked very hard at our plan for revenue growth, and believe that we can get there because, of course, our spending plans have triggered off that revenue estimate. But we have some flexibility. We have some minor headcount plans, and we have compensation plans that can be tweaked to make up for some reduction. It would take a longer term -- if we see that the longer-term is more unfavorable than we currently believe, that would take us really considering changing the structure of our business. It's doable, but it would take a belief that we don't have right now about the longer-term health of our end markets and we think -- well, it's conceivable that it starts a little bit slower, we don't think that that's what we have in mind for the full year 2013. So -- and is there -- was there another part to...

Yes, areas that we might invest in. Was that the other piece, Doug?

That's right, John.

Yes, we've never -- let me restate it. We think that we're investing at the proper pace, given the projects and the opportunities that we have and we don't -- we haven't cut out major projects in R&D in order to protect the bottom line. So within the normal give and take of projects and criticisms of plans and plans that are ahead of schedule and a few that are behind, we're reasonably happy with the mix of programs that we have. I wouldn't say really that if we had an extra $5 million to spend, there's something that crawls up onto the A list. I think we're pretty happy with what we've got going and yes, I suppose you could always use an extra $0.5 million or so. We're in pretty good shape.

Okay. And just a quick one and then I'll get back in the queue. A quick one for John. Did you provide guidance specifically on your expectation for instrument versus recurring revenue growth this year? And if you did, I apologize for missing it. If not, would you provide that?

Yes, I'd say you've seen relatively consistent growth in service and chemistry revenues across this year, being a very difficult year. So we see that pace continuing. So something in the kind of the 7%-ish range, all in, for those couple of businesses seems reasonable. And then the instrument piece maybe starts off just slightly slower at the start of the year, but for the full year is somewhere around kind of 3%, I would say.

Our next question does come from Paul Knight of CLSA. Paul R. Knight - Credit Agricole Securities (USA) Inc., Research Division: On the food safety testing market that you mentioned was stronger, do you think that's due to the 2 rules out for review on the Food Safety Act? Or is it kind of business growth as usual and we might see acceleration later?

I don't think we've seen anything really coming out of the act yet, Paul. The -- it's still in its infancy, really, and it might be that in the end, it directs more towards imports and it has an effect outside of the U.S. as much as inside. So I think the full effect of that's going to come in the future. I don't think we've seen much impact of it so far. Paul R. Knight - Credit Agricole Securities (USA) Inc., Research Division: Were you able to quantify how much food safety is of sales?

I'm sorry, how much food safety is...

What percent? Paul R. Knight - Credit Agricole Securities (USA) Inc., Research Division: Do you think food safety's 5%, 10% or what percent of sales?

It's about 6% or 7% of sales.

Our next question does come from Ross Muken of ISI Group.

So I have 2 quick things. So one on the instrument line. The 3% number that you threw out there, John, basically sort of offset the weakness from this year and so, ultimately, the business would not be growing very much since '11. And so, I guess, you look back historically, most times over the course of the cycle, where you've kind of had a pull back in CapEx, we've sort of seen a reasonable recovery on that line in the following year. So I guess, what, other than sort of the macro, would make that not be true this time around, particularly given some of the comps you have on the generics business, which I'm assuming accounted for a decent amount of the weakness?

That is a good question, Ross, and I'll say there is potentially some level of optimism that could suggest that that turns out to be the case. I think, though, that as we start the year and think about a -- hopefully something, leaning towards conservative view of the world, coming up with a growth rate that really just brings us back to flat is probably a realistic point of view that maybe has a little more upside than down as the year goes on. But I think just from creating guidance and trying to provide a little more pleasure than pain when doing that, we just felt uncomfortable, suggesting that we were just going to bounce back all in the course of 1 year to do exactly what you're describing. I agree, if you look back historically at times when it's been tougher, almost always, the next year bounce back -- bounces back pretty meaningfully. But we're going to leave that potential as upside, and hopefully paint a view here that feels very realistic to begin the year.

And Ross, I think it's also true that as you go down our organization, right down to the field level, you'll see much more of that attitude reflected in their expectations, and what they're driving to, that there's really a point of view that says this year could be significantly better. But when you roll it up through the levels of review and you look at the issues from macroeconomic disappointment, I agree with John. It's more prudent to enter the year on a more cautious plan than have to really gear it down later on.

I guess, what was contemplated in the guidance for kind of the macro acceleration? The market as a whole seems a lot more optimistic, and you can argue we've gone through these the last few years. But I think there's some reasons to believe as long as you're up, sort of stabilized and China accelerates, we will see a better CapEx environment. So I guess, what did you actually factor into that forecast? Is it sort of 1Q trends and then a modest amount of improvement? I'm just trying to get the sense for how much...

I mean, we're basically saying that Q1 looks kind of like the last 4 quarters that we've seen, really not a lot of improvement coming right out of the gate. But I think it's fair to say that we think on the CapEx side, when you look at instruments, people will begin to feel better about spending capital as demand maybe improves a bit within their business, and maybe we see GDP in various regions of the world pick up a point or 1.5 points as the year goes on and we begin to see people feel better about spending CapEx. As we look at the operating side of what people do, we've seen relatively decent growth in our recurring revenues. We think that continues. It's the willingness of people to -- our customers to spend capital and we think that that gets incrementally better as we make our way through the quarters, but we're not factoring in getting back to normal, I guess, on that front.

It's definitely true that one of the areas that we're most challenged on in 2012 was the industrial segment of the marketplace, particularly, industrial chemical firms, and that was true worldwide. Certainly, there's a case to be made for that segment of the marketplace to be stronger, and we also think we've got some dynamite systems coming onstream this year that addresses those customer needs. So if you compound that good feeling, you can get more enthusiastic than what we're willing to commit to now. But we're coming off a disappointing period, and it's still, I think, right to be more cautious at this point in the game.

Fine. One last thing. Just, John, remind me, the comp in India in Q1 versus what we just saw in Q4, how much easier is that?

Yes, it was down meaningfully in Q1 last year. I don't have that specific number right in front of me, Ross, but the comp is definitely easier in Q1 than it was in Q4, and we're somewhat optimistic that we're starting off a bit better as we look at India coming out of the gate.

Our next question does come from Derik De Bruin of Bank of America.

So could you just talk a little bit about the differences you saw in U.S. versus European pharma in the quarter? Also, just U.S. and European academic. And what, if anything, did you get from a budget flush this quarter?

John, you want to...

Yes. Large pharma -- as we saw in Q3, the large pharma actually did better in Europe than they did in the states. We continue to see a little bit of bias at some of these accounts to spend money in Europe. So it was a little bit of a continuation of that trend. But I'd say between the two, we're not dramatically off from original expectation, and I wouldn't draw the long-term conclusion from what we've seen there. But overall, large pharma did about what we thought, but was, again, bias to Europe. I'd say government and academic really probably continues to do just a little better than we think, than we originally had thought. We really don't see these markets reacting dramatically to the fear of major budget cuts. I mean, when and if they come, and I'm sure we'll see them and life will be different. Fortunately, as you know, our exposure there isn't as great as it is in the space. But we really haven't seen any major reaction in government academic accounts at this stage that would suggest that they're acting ahead of time to cuts that may be coming their way.

Okay. And just one quick question, on the UNIFI system that you're launching. Can you just give us a recap on where you sort of are on the broad of that? And the -- obviously, you're capitalizing a lot of the software this year. But could you just give us a recap on that program, and what do you -- I mean, how do you think you see it driving growth?

Sure. I mean, as most everybody knows, UNIFI is really the culmination of a multi-year effort on our part that really brings all of the disparate software systems that we had in place under one operating system that we, of course, called UNIFI. This was a huge program, and we chose to introduce elements of it earlier. The first elements went in earlier last year with specific systems, particularly bioanalytical software. As we go through this year and into next year, we're really bringing the full chromatography and mass spectrometry elements of this system to the marketplace. So because only very small portions of it were introduced last year, you didn't see the full elements of the financial amortization. This year, as it comes into play, you're going to see that come through the P&L. I will say this is another area where I think we're being conservative in terms of the effect on our overall business because this is a major change in the facility of this software into our customers' applications, and we think, over time, this is going to have a dramatic impact and improvement. We're being cautious, once again, I think, about the early uptake and how it affects our business. But that's why you're seeing this come in a more significant amortization mode as we enter 2013.

Our next question does come from Peter Lawson of Mizuho Securities.

Doug, just on India, what are the signs you're seeing for a better India, you think, for 2013?

Well, we're seeing earlier orders activity come to fruition, Peter. We continue to see -- to talk to these customers and to hear their plans, and they continue to be aggressive plans. So we see nothing that says -- if anything, here is one specific area where we think there's pent-up replacement [indiscernible] restrained activity in the past that should manifest itself in higher activities going forward. So in both the generic and in the food area, we're seeing much interest, much quote activity, and we've always believed that this market really is committed to the long-term servicing of the generic drug business, and see nothing that's going to move them on. As they come through this period, they'll resolve the currency issues. They're resolving the regulatory issues, and I think they're ready to move ahead.

And you don't think there could be any share losses during this period for you?

I'm always unwilling to speak definitively about short-term market share dynamics, but India's one market where all of the equipment really comes in from outside the country, and that data is all public. So we monitor that kind of data, and see no fundamental changes in market share going on in our chromatography world.

And just one last question for John around the uptick in R&D in the quarter. I may have missed this. Is that just associated with the U.K. mass spectrometry coming online, and does that carry through for 2013?

Yes, we have a lot of projects spent, and the project activities can move the needle in R&D a few points one way or the other. We've got the new UltraPerformance systems that are taking a little bit more effort in R&D. But I would say that, generally, it's project spent that can be lumpy quarter-by-quarter. Convergence chromatography is the product that we've traditionally spent some R&D dollars on. And we have a host of new products that we'll talk about as the year goes on that we're readying right now for Pittcon and in ASMS that are in a stage now that requires a bit more project spend as well. So it tends to be a little bit lumpy. I wouldn't draw that -- take that 5% and suggest that that's what it has to be into the next 4 quarters, but I'm comfortable thinking the expenses there is in that 3% to 4% growth range that I described earlier.

But that's a little bit higher in 1Q. I guess that flows over into 1Q.

A little bit. The other thing to think about there is the British pound. There is some amount of translation that occurs there so you got to keep an eye on that. I don't know that it was a major impact in Q4, but we do have probably 1/4 to 1/3 of our spend that is in Manchester U.K. that does impact that line too.

Dan Arias of UBS.

Just on China, it sounds like things are continuing to be pretty strong there. Can you just touch on demand with respect to life sciences versus more industrially-focused work? How do things look there when you parse those 2 applications out?

Yes, sure. China, interestingly enough, is a pretty balanced market for us. Whereas India is heavily weighted towards generics, China is more balanced between pharma, bio pharm, food and industrial. And our results in China have been strong in all of those, in both the overall pharmaceutical market and the applied segments. So we continue to see just very good growth across those segments.

Okay. And maybe just a question on chemistry. Doug, you talked about the potential for some new LC introductions later this year. So I guess, how important is new column development to grow for you guys? And to the extent that maybe you do bring some new chemistries to market, should we think about there being any margin benefit to those aimed at more protein-based work? Or is that not really something that impacts profitability?

Well, chemistry is a very profitable segment of our business so it's always something that's worth noting. I do think that there's no significant platform introduction of a new chemistry this year. There are subsegments of our chemistry line, certainly, in our new UPC2 technology, and we have some new offerings in the life science arena, particularly dealing with peptides. There are probably things you'd consider niche offerings. Our whole chemistry line to some extent is made up of a bunch of profitable niches, so it's wrapped up in the numbers that John talked about. I don't think that I'd point you towards anything that's likely to move that needle tremendously in the chemistry area. It's the kind of thing where you wake up 2 or 3 years down the road and you've got a new $10 million or $15 million platform, but it takes a while to build.

Our next question does come from Tycho Peterson of JPMC. Tycho W. Peterson - JP Morgan Chase & Co, Research Division: Just a couple of quick ones. I wanted to go back to the comments you made earlier on the academic markets. You talked about them being fairly stable here. I know in the past, you've recently talked about potentially some share gains at the high end of the market, in particular, within this triple quad business. So in your assumptions here, are you factoring in some share shift? Or is it just more of general stability in the end markets?

Tycho, in the triple quad area, that's not typically the academic market. I mean, we're talking about the pharmaceutical and the applied markets that's the biggest segment for the tandem quadrupoles. The government and the university market tends to be more of the high-end top business that we're doing there, so... Tycho W. Peterson - JP Morgan Chase & Co, Research Division: Yes. Are you factoring share gains there though?

Well, I think 2012 in that high-end mass spec area was a tough time for us. We see that moderating a little bit in the fourth quarter and we think that that's a better place in 2013. Again, share gains are something that it's awfully fluid, but I think we're more confident about our business position and positive results in 2013 than we saw in 2012. Tycho W. Peterson - JP Morgan Chase & Co, Research Division: And then on Japan, you talked about expecting a rebound there, I think, in part driven by currency. Can you just talk to the budget dynamics there? Obviously, in the March fiscal year, do you expect some budget flush this quarter? And do you expect any change in the academic funding environment there, post-March?

I would say we see -- we anticipate consistent dynamics against what happened in the prior year happening this year, but that's not for a robust growth in Japan. We do think that, consistent with the better economic expectations for the industrial markets, Japan has a significant industrial segment of the market. So as that becomes more competitive, we think that we'll do better. John, did you want to add anything to that?

Yes, from the review that we had on Japan, I would say that the likely scenario is that we see a little bit better government budget in Qs 2 through 4 as they enter the next plan year, but nothing that moves us more than 1% in growth. So I mean we're looking at a business that might go from kind of flattish to up 1% or 2%. A lot of that's really just based on comparison.

Next question does come from Jon Groberg of Macquarie.

Just a quick question for me, either John or Doug, on this -- I want to make sure [indiscernible]. On the tax kind of restructuring that you announced, does that have any impact in your ability to repatriate cash and be more aggressive on your buyback?

No, unfortunately, this was a Europe restructuring. And while it creates some efficiency there and allows us to prevent tax payments from going up over the next 10 years, it doesn't have any bearing on the repatriation.

Our next question does come from Sung Ji Nam of Cantor. Sung Ji Nam - Cantor Fitzgerald & Co., Research Division: I just have a one quick one. Could you -- John, you talked about incremental growth opportunities in clinical diagnostics. Could you maybe talk about kind of what you're strategies are near-term and what your competitive advantages might be compared to others in this market?

Well, I would say -- we were talking earlier about the tandem quadrupole. That is an instrument that does fit nicely into this space. So I think we do currently have a very high performance offering out there. We've got a decent footprint that exists in that space. We have a crew here that are looking at potential incremental opportunities on that front. So I would say it is a sector we pay attention to. I think over the long run, there will be some interesting niche opportunities for mass spectrometry to do things that, today -- what chemistry tests are either inefficient or you have to wait too long for the answer. And we'll find some interesting applications over a longer period of time, and we continue to invest in that and think that we have a great offering and continue to -- we'll continue to deploy it this year and beyond.

Well, we're very optimistic about it. We had a good end of the year in our clinical business, and that might be one area where we see some unlooked for upside in 2013. We've got a lot of interest going using these new technologies in a clinical testing area, and we think that has a robust future. All right, operator, I think at this point, it's appropriate to bring it to a close.

Thank you. Today's conference has ended. All participants may disconnect at this time.

Thank you, all, and I look forward to talking to you again next quarter.