Good morning, and welcome to Zimmer's First Quarter 2012 Earnings Conference Call. I'm here with our CEO, David Dvorak; and our CFO, Jim Crines. Before we start, I would like to remind you that our discussions during this call will include forward-looking statements. Actual results may differ materially from those indicated by forward-looking statements due to a variety of risks and uncertainties. Please refer to our SEC filings for a detailed discussion of these risks and uncertainties. Also, the discussions during this call will include certain non-GAAP financial measures. Reconciliations of these measures to the most directly comparable GAAP financial measures are included within the earnings release, which is available on our website at investor.zimmer.com. With that, I'll now turn the call over to David Dvorak. David?

Thank you, Bob. Good morning, everyone, and welcome to our earnings call for the first quarter of 2012. This morning, I'll review our first quarter financial results, providing commentary on the year's progress to date and highlights from our performance. Jim will then provide additional financial details. I'll state all sales in constant currency terms, and I'll discuss all earnings results on an adjusted basis except as otherwise noted. Zimmer delivered increased top line sales from the first quarter, highlighted by solid sales execution in our Europe, Middle East and Africa and Asia-Pacific segments. Zimmer's first quarter performance was in line with our expectations, setting the foundation for accelerated growth in the second half of 2012. We continue to be confident on the promise of a robust, new product pipeline across Zimmer's portfolio. Progress on our transformation programs is enabling us to make the strategic investments necessary to fully exploit the opportunities presented by these new products while at the same time meeting our financial commitments. Consolidated net sales for the quarter were $1.14 billion, an increase of 2.7%, and our earnings per share were $1.30, an increase of 9.2% over the prior year period. In the first quarter, all of our geographic segments delivered year-over-year sales growth. Americas grew 0.8%; Europe, Middle East and Africa experienced growth of 4.2%; and Asia-Pacific recorded sales growth of 6.5%. Once again, we also recorded attractive growth in key emerging markets around the world. Turning now to the results of our product categories. Knee sales for the first quarter increased year-over-year 2.4%, reflecting positive volume and mix of 4.9% and negative price of 2.5%. This performance was supported by improved sales growth globally, including an impressive 4.7% in Europe, Middle East and Africa and 6.9% in Asia-Pacific. Importantly, we generated more than 400…

Thanks, David. I will review our first quarter performance in more detail and then provide additional performance related to our 2012 sales and earnings guidance. Our total revenues for the first quarter were $1,141,000,000 or 2.7% constant currency increase compared with the first quarter of 2011. Net currency impact for the quarter decreased revenues by 0.4% or $4.7 million. Unfavorable currency impact from our euro-denominated revenues was partially offset by favorable currency impact from our Japanese yen and Australian dollar-denominated revenues. For the quarter, our adjusted gross profit margin was 74.8%. The margin ratio declined 60 basis points compared to the first quarter of 2011. The decline in gross margin compared with prior year was a result of negative pricing and higher unit costs associated with lower volumes, which were partially offset by lower excess in obsolescence charges and royalties in the quarter. The company's R&D expense increased 7% on a reported basis when compared to the prior year, including higher spending on new platform development projects across all product franchises, including our Next Generation Knee System that David referenced in his remarks. We remain confident that steps taken to better align our R&D support functions with our product category leaders will continue to drive a faster pace of product innovation, which is a key feature of our growth strategy. Selling, general and administrative expenses were $463 million in the first quarter, which was an increase of 1.1% on a reported basis. At 40.6% of sales, SG&A expenses were 50 basis points below prior year. For the quarter, expense reductions from our transformation programs drove favorability as a percentage of sales. Savings from those programs were partially offset by increased G&A expenses related to legal matters and recruiting and relocation of new personnel. Special items in the quarter amounted to…

Thanks, Jim. Earlier this year, the breadth of our innovation pipeline was on display at the AAOS Annual Meeting, where we featured exciting new products in almost every product category, from implants to intelligent instruments and power equipment. These offerings received a very strong customer response, which further reinforces our excitement about the ongoing positive impact of innovation. Sustained growth through 2012 will be driven by a continued focus on our strategic priorities. Progress in our business transformation programs and disciplined financial management enable us to continue to generate high levels of operating cash flow, which we're directing toward investments in growth drivers, including our sales channel, product development and infrastructure in emerging markets. In summary, we remain on track to meet our sales, earnings and cash flow expectations for 2012. Accelerated growth in the second half of the year will be achieved through continued execution of our strategic initiatives and the contributions of new product offerings. And now I'd like to ask Lachey to begin the Q&A portion of our call.

[Operator Instructions] Your first question comes from Bruce Nudell from Crédit Suisse. Bruce M. Nudell - Crédit Suisse AG, Research Division: Dave, I know everybody's going to ask, you noted a step up in pricing pressure, could you kind of give us a little color on where it rose and why it rose? And your view now as to where net ASPs across price and mix could be held?

Sure. We had a step-up in price pressure. I guess, as we look at our numbers across -- modest step-ups, Bruce, across each of the geographic segments. And I would say that within the product categories, a bit Knees and a bit in Spine, and those were the primary growth drivers. I would tell you that I don't think that any of these is different than our expectations coming in the year. It's more of the same. As we talked about on prior calls, we had some factors that were improving our price performance, including overseas forward acquisitions of distributors in prior periods. So I would deem this to be more of the same environmentally, just a modest step-up in those 2 product categories. But I don't expect this to be the beginning of a more significant negative trend. Bruce M. Nudell - Crédit Suisse AG, Research Division: And so like net ASPs, where do you think it could be across price mix?

It just depends on where we are in the process of innovation and product rollout, Bruce. I mean, I think that at this point, probably at its peak, you could wash it out. I think that with big system launches, and I would expect that we're going to have nice opportunity in coming periods and moving into next year to do that in the knee product category. We don't have the capability to do that right now. We have a bit more of a capability to wash some of that negative price out in our hip business with mix, but not fully wash it out. Bruce M. Nudell - Crédit Suisse AG, Research Division: And I guess, just on -- my follow-up is, and this is more of a schematic question. How do you view the opportunity for like custom implants in the minority of patients who have really odd anatomy and/or unique pathology? And do you think that, that could be a significant driver over the medium term for mix for the industry?

I believe that the personalized solutions is a theme that we've been very focused on. You can see it with our product innovations across all of our product portfolios. I do believe that better clinical solutions can be gained through these personalized solutions. I believe that, frankly, the patient expectations are going to continue to rise. And their belief that they're going to be able to get back to active lifestyles and restore the quality of life that they once knew is going to cause innovation to move in the direction to be responsive to -- that asked by the patients. And so I absolutely believe in the personalized solutions. I wouldn't want that to be misconstrued with the customized term because I think that there are some nuance differences there. But identifying the most relevant clinical characteristics of a patient and ensuring that we're able to help the surgeon have everything that they need to replicate the human anatomy that, that individual started with is a big area of focus. And again, you've seen it in many of our product categories. You're going to see it to an even greater extent going forward through our innovation pipeline. Bruce M. Nudell - Crédit Suisse AG, Research Division: And so, Dave, just to be specific, that might be inclusive of implants that are designed for individuals as opposed to customized cutting guides at least over the midterm?

I believe it's going to be implants that meet their characteristics in -- of that particular patient in any respect that is clinically relevant. And the key is going to be to innovate in a way where one is able to bring that solution to the hospital systems and surgeons and, ultimately, patients in a cost-effective manner. Because as you can imagine, that creates a SKU challenge. But I think that if one innovates intelligently, they're going to be able to solve that challenge and provide a better outcome in a very cost-effective way.

Your next question comes from Bob Hopkins of Bank of America.

So just to be clear on pricing, you guys came into the year guiding to recon pricing to be down roughly 200 basis points, I think you said. Is that guidance still good for the year in your view?

Yes, that guidance is in the right range, Bob. I mean, it may tick up a couple of tenths, but that's primarily as a consequence of the Japan biannual price declines coming in a little bit higher than what we had modeled coming into the year. So I think that, that is the right range of a number still.

And what in Japan -- could you quantify that? How much -- what is the pricing decline that you expected and what do you think it's going to be now in reality?

Yes, I think in -- across the product categories, we were expecting something in the range of mid single digits. And I would say if you do the math, it comes in a couple of points higher than that.

Okay, so high-single-digit declines?

Yes, and just to complete that line of thought and be clear, Bob, I think what that means to us is a couple of tenths increased price pressure on a consolidated basis. So if you do the math, we were expecting that to contribute about 30 basis points of price headwind on a consolidated basis and it looks more like 50 at this point.

Okay, great. So the only thing that's changed is Japan, in other words, in your pricing outlook?

That's really true.

Okay. And then just to be clear, everybody's been asking this. Because of the leap year, do you -- was it a clear comparison in terms of selling days year-over-year for you guys or did you have an extra selling day? And if so, how did that impact the numbers?

We didn't have an extra selling day. I just -- you go back to the federal calendar, Bob, and essentially you picked up a day in February, obviously, and then gave it back in the month of March. So within a couple of tenths across the globe with respect to selling days, it was an even comparison year-over-year.

Okay, great. And then just real quickly on operating margin. You guys came into the year expecting that you'd have roughly a 20 to 30-basis-point increase year-over-year in 2012. Yes, you're starting out the year with a slight decrease. Are you still comfortable that as your revenues ramp a little bit in the back half that you'll be able to drive 20 to 30-basis-points in operating margin year-over-year?

Yes, we are comfortable. We believe that we're going to realize the promise of the new products that are being introduced, Bob, and step up on the top line. So in the meantime, we're driving the transformation initiatives, seeing good returns and right on pace with those programs. And that's helping fund some of the upfront money that's going to take to fully exploit those product launches. So both those dynamics are headed in the right direction, and we just need to execute and realize the benefits of those new products on the top line.

Your next question comes from Adam Feinstein from Barclays Capital.

It's actually Dan stepping in for Adam. I want to ask a real quick question on -- to start up with knees, which came in a bit better than we're expecting. So in last quarter, you talked about it reverting back to normalized growth, and I guess, this quarter you're talking about kind of cautious optimism for some improvement. Can you just talk about what you're seeing in that market and at best you can see how we're kind of reverting back to that normalized level of growth?

Sure. Yes, I think, Dan, when we spoke about a normalized level of growth, that was more with the longer-term view just to continuously reinforce in these discussions that these are procedure deferrals. These are not patients that go away or have another solution. And so the demographic drivers clearly are going to produce a good number of patients that need these solutions in coming years. And with the macroeconomic conditions being what they have, we just believe that there's been increased procedural deferment. And so when we talk about normalizing the market or normalized procedures, we're referring to the longer term dynamic of as the economy stabilizes and ultimately, at some point in the future, begins to improve and we're creating more jobs on a global basis, those patients are going to come back into the fold. And it just is a matter of when and what pace. So one quarter, and this is principally a comment that is directed towards the U.S. knee market performance, which as you'll recall was more heavily impacted by the economic downturn. And the thought was because of the pain pathology, it was a bit easier relative to hips to defer those procedures. So this uptake sequentially from Q4 to Q1 of this year in the market for U.S. knees is a positive sign. But that said, it's one quarter.

Great, that's helpful. And just one quick follow-up. Just looking at Europe, you guys are actually seeing to perform pretty well, but we're seeing kind of -- you're thinking of that mid-single-digit growth level of the challenge with that market. So as best that you guys would you characterize the environment as kind of stable there or do you think it's kind of more of a share take that really allows you to kind of keep growth where it's at in that region?

Well, I think that, that market and Europe is stable. But I will tell you within Europe, there's a lot going on. There are big differences among countries due to the austerity measures. There are even differences intra-country within the large joint categories. We clearly have been performing well in our Europe, Middle East and Africa segment. And I don't know how the numbers could be construed in any manner over the last many quarters other than we're taking share because I believe that, that's a market on the recon side that is growing low single digits as opposed to the numbers that we're posting that have been closer to mid single digits. So I think that you're going to continue to have a lot of puts and takes within Europe. Those are very different markets amalgamated, and it's something that we talked about as EMEA. But I also feel good about our capability to continue the momentum in that market and outperform the market in order to produce the growth that we need to.

Your next question comes from Mike Weinstein from JPMorgan. Michael N. Weinstein - JP Morgan Chase & Co, Research Division: David, could you just talk about the cadence project transformation, the $400 million in cost savings and how much of that benefit you think we'll see this year and next?

Sure. We -- I would tell you that it's pretty evenly spread, Mike, in the way of benefit. We're probably at a benefit run rate coming out of last year round numbers about -- of about $50 million. And this year, we would look to be at a run rate in excess of $100 million. And so you can sort of spread the remaining $250 million out over the course of the 5-year program the way we've defined it. In the front end of that 5-year program, obviously, we're using the benefits of it to reinvest in key areas. We've expanded sales forces. We build infrastructure in key emerging markets. We've increased our investments in key areas of our product development to execute our strategies there. So we're able to fund all of that. And as you can see in this quarter, improved -- yet still improve our SG&A ratio, not as much as it would have improved had we let all the benefits of the transformation initiatives flow through, but we're pacing that out in accordance with our strategic priorities and where we see opportunities to create significant value. So that's the framework is to how we look at -- and we also want to emphasize that our expectation is that we would fully absorb the med device tax through these programs as well. So the consequence of some of the needed strategic investments on the front end of that 5-year program and then the need to absorb the medical device tax, should that come through in 2013, more of the savings are not revealed on the performance of the P&L on the front end of the program. But as we work through those time periods, you'll see more drop-through through those programs and more significant improvement in the operations side, which will obviously lag but ultimately flow through to the COGS line as well. Michael N. Weinstein - JP Morgan Chase & Co, Research Division: On that pricing question from earlier, do you have a more of an apples-to-apples comparison on what 2011 pricing would have been down x the distributor buy-ins?

I don't have a specific number, Mike. I would tell you that I would range that to have been a few tenths on a consolidated basis. Michael N. Weinstein - JP Morgan Chase & Co, Research Division: A few tenths of benefit in 2011?

That's right, as far as consolidated pricing. Michael N. Weinstein - JP Morgan Chase & Co, Research Division: And then last, on the investment side on the sales force. I know you're building out a specialized sales force in Biologics. Is there anywhere else where you're adding personnel at this point?

We have sort of hybrid models across a variety of product categories. In some instances, they are product specialists. In other instances, they're direct reps. I would tell you that over the last 12 to 18 months, Trauma has been an area of focus for us.

Our next question comes from Matt Miksic from Piper Jaffray.

So I realized it's early in the year you're on the ortho trends that we're seeing. I caught your comments, I apologize you were all juggling a few calls. But I wanted -- I was wondering, it seems like the way things work in ortho often is you're growing a little faster on one side, maybe on your hip side. You're not growing as fast on the knee side. All this having to go through the same rep and the same operations basically. Are you seeing any of that due to the strength in your -- some of the hip products that you mentioned? And secondly, is that something that you would expect would balance out maybe in the back half of the year as you get PERSONA up and running or into next year. Some color on that would be helpful, and then I have a follow-up.

Okay, Matt. I mean, the reality of this Q1 performance is we're pretty balanced as between knees and hips. As you can see, it's mid-2% growth rates in each of those categories. I would tell you that I think that the geographic segments have done a pretty good job of balancing that focus. We've had, over the last year, a bit more in the way of new product opportunities on the hip side. I think that as we get deeper into this year, that's going to balance out and -- at least balance out, if not even tip, to the knee side as we enter 2013. So we're excited about the position that we're putting them into to compete on both knees and hips. And just geographically, I think that among the 3 segments that we operate under, we see the opportunity for more improvement in the Americas group than the o U.S. groups at this point in time in, frankly, both knees and hips.

Okay, all right. And then I guess, just looking out, maybe do you have enough on the hip side to withstand the attention that the new knee is going to bring to the knee side? Is it this Vitamin E poly that you mentioned or what do you think are the opportunities there that take you through '13, maybe not to push you too far out?

I think that it's a good question, because we're really excited about what's coming out of it the knee side, and I do feel good about our ability to balance that out. We have leveraging the technologies, Trabecular Metal, the best wear characteristics in polyethylene with Longevity. And now, a next-generation polyethylene with VIVACIT-E. And then you add to all of that the offerings that are in developments but have been previewed to some extent on the intelligent instrument front, and I think you have a really exciting hip package going forward.

Okay. And then one if I could on the P&L, and I apologize, David, because you've been talking back and forth here. But you mentioned something about making some investments -- strategic investments important to your execution on new products. Could I ask you to maybe provide a little detail as to what went into some of the SG&A spend in the quarter? I don't know where it was relative to consensus, but maybe it was just a touch more than we were expecting. That would be helpful.

Sure. I'll let Jim respond.

We did see some slightly higher spending in SG&A in the quarter. Nonetheless, we're holding to the guidance we've given to the full year of 39.5% to 40.5%. So we're confident with the savings that we're driving and the transformation programs that we're going to be able to drive that leverage in the back half of the year. In fact, even in spite of the higher spending that we're projecting for the first half of the year, we're still seeing year-over-year improvement in SG&A. And just to give you some idea, those higher expenses that we experienced in the first quarter added approximately 90 basis points SG&A in the quarter when compared to the prior year, and they included, as we mentioned, recruiting and relocation costs associated with some of the hiring that we're doing, particularly around sales and marketing to support some of the efforts we have in place around these new platforms. And we did as well incur some higher expenses in the quarter related to legal matters, which are described in great detail on our periodic filings.

Your next question comes from Joanne Wuensch from BMO Capital Market.

Two clarifications, you said that some of the cost savings are expected to absorb the med tech tax in 2013. Do you plan to totally absorb that or somewhat?

We plan to totally absorb that, Joanne.

Okay, because our calculation is at about $0.25, $0.26, okay? Second question, the new NexGen knee, I hate to ask a stupid question. What's the name of that product?

The NexGen knee system is unnamed at this point in time.

Okie dokie. And what are -- can you just walk us through the game plan for the launch? Usually these launches take about 12 months until they're fully up. Is that a similar pace that you'll be playing at for this product?

That's the right way to think about it, Joanne. I -- we would move through -- phase launch would start with developer release, and then move into a limited release and then a broader limited release and then leading up to a more general release. But then with these systems, even when you get to the point of a general release, you're pacing out instruments. It would be ultimately many, many sets -- thousands of sets of instruments. And so this will be a global launch that we look forward to in the coming few years as opposed to just a 12-month time period.

And Joanne, this is Jim. Just coming back to the comment you made about the med device tax. At this point, the best that we can estimate is somewhere in the order of $50 million to $60 million pretax on 2013, and understand -- fully understand that we need to drive at an incremental $50 million to $60 million of savings out of these programs to fully offset that tax in 2013.

Your next question comes from Derrick Sung from Sanford Bernstein. Derrick Sung - Sanford C. Bernstein & Co., LLC., Research Division: I wanted to ask you about the increase in your receivables as a result of the Southern European crisis that you called out. This is something that we've been hearing from all of the companies. We've been hearing it's been taking upwards of a year, in fact, in some areas to collect. And I was just wondering if you could give us some details around what specifically are you seeing? Is this coming from the hospitals? Is it coming from distributors? Maybe just a little bit color on how it's affecting your business. And how close are -- at what point does it have a material impact, either on cash flows or at what point does it have a material impact on sales when you stop or pull back on selling into these accounts if they aren't paying in an appropriate time period?

Sure, this is Jim. And as we have indicated in our prepared remarks, we saw a 4-day increase in the day sales outstanding in the quarter on a consolidated basis, and that was driven by a combination of some of the growth we're seeing, frankly, out of emerging markets where we have some longer payment terms in place. But also by an increase in receivables in certain Southern European markets and, in particular, in Italy and Spain. We are providing some detail in our periodic filings around the balance of our net receivables as it relates to Italy, Spain, Portugal and Greece. But I would tell you, Portugal and Greece are not really material relative to the larger receivable balances we have in Italy and Spain. It's something that we're paying very close attention to. It is the case, at least with respect to Zimmer, that we're seeing it in the public hospitals. We continue and we will continue to supply product into the public hospitals, but we're just not, at this stage, able to collect those receivables as quickly as we'd like to. There -- I would tell you a number of things that we understand, we need to continue to pay close attention to, to ensure that ultimately we do get paid for the products that are being supplied to those hospitals there. It's important to maintain really good documentation. We have an opportunity in those markets to have government officials, periodically certify what's owed and we work that process hard to ensure that when the funds are made available, and we continue to believe they will be. In fact, we know that there's a program that was just recently announced in Spain that we believe will result in some significant payment flow in the second half of this year with respect to our public hospitals receivables in Spain. So again, we're paying close attention to it. We're providing some detailed information in our periodic filings with respect to what those net receivable balances are in those countries, and we'll continue to do that. Derrick Sung - Sanford C. Bernstein & Co., LLC., Research Division: Great. That's very helpful. Just going back to your new knee launch here. I was wondering if you could give some details around what you're including in this first phase that got approved? What's the value proposition here? What specific products are being included in this first rollout? And then what -- when you expect the next phases to kind of come in?

Yes. Sorry, we're just not willing to do that at this point in time. It's a big project. It's a system that we're extraordinarily excited about, but we're going to work the process in a methodical way to serve the interest of the owners of the company here and get this one right, and we just don't want to get out ahead of it. So I apologize, but I can't share more at this point in time. And it's the same response with respect to Joanne to go down the path of naming features and benefits, it just would be premature for us to do that.

Your next question comes from Bill Plovanic from Canaccord Genuity.

My question just revolves around there's a couple of times you referenced new products really driving growth, and I think somebody had asked a little bit about this. But I was wondering if you could elaborate on what you believe the most important projects are for you or products that will drive that growth as we enter the back half of this year?

Sure. So the themes of these product launches are personalized solutions across the various categories and a lot of technology development with respect to intelligent instruments to ensure that implantations are as accurate as they possibly can be that lead to better wear characteristics, better fit, feel and function for the patient. And so we have a lot rolling out across the various categories within knees, PSI for our eLIBRA Dynamic Knee Balancing System. On the revision side, the TM Cones and Augments and then ultimately bigger things with the next-generation knee system. Hips, we've launched and we're ramping up CLS Brevius with Kinectiv Technology. The Maxera large diameter head ceramic-on-ceramic outside the United States and, ultimately, as this year progresses globally, VIVACIT-E highly cross-linked polyethylene. Extremities, Anatomical Shoulder combined adapter is doing very well and is helping us there. We have other launches but they're fairly late in the year, so they are going to have less of an impact on 2012 but a significant impact on 2013. Trauma, we continue to expand our NCB Periprosthetic plate line. We have now fully rolled out the XtraFix External Fixation System. So those are big product areas for us within Trauma. Spine, we're doing very well with TM-S, the cervical -- Trabecular Metal Interbody, the inViZia Anterior Cervical Plate and we have more coming up in the way of launches with respect to buildout of pedicle screw systems in the second half of the year. Dental just now launched the TM Dental Implant, and beginning o U.S. with the Zfx CAD/CAM digital dentistry solutions package. Within the surgical line, we look to do big things with the SoPlus Power Tool Equipment line and then the Synvasive blade technology line. And then finally, we continue to ramp sales nicely under the biologics area with DeNovo NT, just launched Chondrofix and we'd hope to get into a full release of the Gel-One product line. So a lot going on.

Your next question comes from Kristen Stewart from Deutsche Bank.

I just wanted to go back to pricing. You had said it was down 2% across the total company. Would you be willing to break out pricing by different geographic regions?

Sure, Kristen. It was minus 2.8% in Americas, minus 1.0% in Europe and minus 0.7% in Asia-Pacific. And so the Q1 pricing as compared to the fourth quarter, we're at minus 1.6%. And as we said, it's minus 2.0% this quarter.

Right, and I don't have the other numbers right in front of me for 4Q, but it looks like it was probably Americas that got a little bit worse. Is that true sequentially, I guess?

; It was a little bit in each of those categories, within 2 to 4 tenths in each of those categories per segment.

Okay. And I guess the message that you guys are trying to convey is that despite the tick-up in this quarter, you guys are still comfortable generally with your guidance that you outlined back in December of negative 2% consolidated for the full year?

Yes. And I think that you could see that bump up from negative 2% to negative 2.5%. But more than anything else, that's driven by the price headwind that we're going to be facing in Japan, which was a bit higher than what we had believed was going to be the case coming in the year. None of that for us reads as a fundamental shift in price headwind. And we're very confident we're going to be able to offset that. In other respects, we have a lot of opportunity to do so.

Okay. And then Jim, I just wanted to go through and better understand your commentary around gross margin. Because I know you'd said some of the hedges were going to moderate, and you expect that gross profit margin to be, I just want to make sure I understood it, at or near the top end now of the range. So maybe can you help us just put into context maybe the ever-so-slight increase in pricing pressure? What's kind of, I guess, driving your expectations now to be a little be more on the higher end versus kind of anywhere else within the range given pricing?

Sure. So we understand very well that in every point of decline in average selling prices can put somewhere in the order of 20 to 25 basis points in pressure on gross margin. We've talked, as David just did, about where we are with pricing and what our expectations are for the full year. And that certainly is something we've taken into account in the updated guidance we've provided on gross margin. As we said now, our expectation now for gross margin to be at or near the high end of the 74% to 75% range we provided at the beginning of the year. So those -- to the extent we've raised our expectation for the effect of currency translation on our top line from 1% to now 1.5% to 2%, there's some significant moderation in those hedge losses. We -- relative to what we were looking at the beginning of the year, they fully offset that slightly higher pressure we're getting on margin from pricing trends.

Okay. So it's more of just a reflection of the FX change versus any higher cost savings or mix benefit that you would expect?

With respect to 2012, that's correct. Obviously, getting down 2012, we'd be certainly looking for the manufacturing quality excellence initiative that would begin delivering some cost savings to offset some of that pressure, that negative price is putting on gross margin.

Your next question comes from Raj Denhoy from Jefferies. Raj Denhoy - Jefferies & Company, Inc., Research Division: I wonder if I could ask a bit about volume and mix. I think you gave the constituent or at least aggregate numbers for each those, 4.8%, 4.9%, I believe it was for knees and hips. Could you parse those out and give us a sense of what volumes are doing right now?

Yes. We just -- we're not going to give you all the details on that at this point, but we'll try to help with the following. Right now, we're getting more mix in hips, but it's not fully offsetting the negative price. And we're getting some mix in certain geographic regions in knees but not offsetting the price. And so I do believe that with the coming product launches, we're going to be able to improve the mix to offset in hips and materially improve the mix to offset in knees. I will tell you that we still firmly believe that clinically relevant innovation can be received with price premiums. You have to be more cognizant of the stakeholders and the conditions that they're operating in to try to achieve the cost objectives at the same time that you're providing better patient outcomes. And so that means building out more empirical evidence to be able to have that discussion and land where you want to land in that discussion, but the opportunity is clearly there. So I think that right now, we're probably, overall, are on the low end in a consolidated basis of mix, helping the top line growth and profitability of the business. But I'm very, very confident that we're poised to improve that position in the coming quarters. Raj Denhoy - Jefferies & Company, Inc., Research Division: Okay. And because one of the things that's been postulated in terms of why we see a slight uptick, perhaps, in knee growth this quarter was maybe we've seen a higher percentage of revisions, which is pulling up the ASP per procedures. Are you guys seeing that in the near results?

We are. The revision is a component of the positive mix opportunity and that contributes. But I would tell you that overall, I don't think that there's a lot of positive mix in the knee market right now. Just because of the cycle of launches, I think that, that's going to change fairly significantly in 2013. Raj Denhoy - Jefferies & Company, Inc., Research Division: Understood. And then just kind of lastly. It's been 7 or 8 quarters now that we've been running kind of 1% or 2% growth in these markets, and you guys remain confident as does most everybody in the industry that we'll see a tickup at some point. But at some point, do we concede that, perhaps, this market is going to grow in terms of volumes maybe in the very low single digits? Or if that just maybe the new reality we're dealing with in orthopedics?

I don't believe so. I mean, I just -- I don't believe that the demographics bear that out. The penetration rates for these solutions would have to decline and be sustained in a decline mode for that to become the case. So I still believe that you're going to tick up in procedure growth rates as the economic conditions stabilize.

Your next question comes from David Lewis from Morgan Stanley.

David, there's been a lot of questions on price this morning. And I guess, the one thing we are hearing from you is you're extremely optimistic about the new product launches for the company. I guess, really a 2-part question. First, it doesn't sound like we're seeing a mix-driven new product benefit sort of in 2012, but it sounds like in your last comment, 2013 may be the period where we see more significant mix. So number one, I mean, do you expect to see mix impact price on a positive way as we head into 2013? And the second kind of related question is, and what we are getting this year is a dramatic amount of hospitals telling us that they are hiring consultants and very interested in bundling in ACO-like programs. I mean, looking at the Americas pricing this quarter, is ACO something we should be seriously considering as a change in the structural pricing environment? Or as your way of thinking about it, is it simply more of the same?

Good question. So I would tell you that with respect to mix, I do believe that we're going to sequentially improve in that regard. I would tell you that every quarter that goes by this year, we would expect to improve our mixed position, and that's going to be part of what drives top line growth. But probably more significantly in 2012, we're entering some new product categories, and so those are going to be significant growth drivers. As we get into 2013, the mix opportunity is going to become more significant across our large categories. So we're really optimistic about what we're going to be able to achieve with the right kind of innovation, which segues into the second part of your question. I think that whether you're talking about ACOs or bundling or, frankly, a lot of that discussion is premised upon gain sharing-type principles. And so I do believe that there's going to be a receptivity and engagement level for those models to move forward. But the discussion fundamentally is going to come back to innovation and service, and that's where we need to be forward-looking and understanding the environment that we're operating in, and we're very cognizant of those dynamics because I think at the end of the day, it is more of the same. Where you're having pricing discussions and fundamental value exchange discussions with the cost of that value, the cost of delivery from the customers' perspective. And if we innovate in a clinically relevant way and prove out the benefits of those innovations and we're cognizant of the cost objectives that the customers are going to have and the value proposition from their perspective, I think we're going to win in any of those environments, whether it's ACOs, bundling or the kinds of the pricing negotiations that we have currently.

And just maybe one quick one. On utilization focus, obviously, is in focus for a lot of people. In the quarter, you mentioned Trauma was strong, even though we had a relatively mild winter. And obviously, we have seen a correlation between weather and Trauma in the past, and there are some who believe that the weather season also contributed to an increase in utilization. Is there any possibility in your mind that, that could have enabled higher knee growth in the quarter?

Oh, you're saying that the mild weather might positively influence the large-joint procedures?

It hasn't historically, but there is a view that utilization this quarter was impacted by a milder weather season. Just to base on the nature of the disease, I would expect that not to impact your business, but any thoughts on weather impacting knee upturn?

I don't believe it. I think that it can be the case with a very severe storm to where you might have a disrupted operating week because patients can't get in. But I think that, that stuff typically would even clean up within a short period of time, month, a quarter, unless they're just repeated storms. I don't think that there is too much to that theory. I do think that weather does impact the market within the Trauma sector, but I don't see it having a significant impact on the large joint side.

Your next question comes from Larry Biegelsen from Wells Fargo.

Just two for me. First, David, you said sales growth should accelerate in the second half of 2012, and you talked about the European knee tender in the second quarter of last year. Is that the only reason why you might -- I mean, were you trying to indicate that you would expect a little bit slower sales growth in the second quarter? And if so, can you quantify the European knee tender for us?

Yes. We're pointing that out really so the people understand what we would anticipate in that category. We think that we're on a good track, but there's going to be a comparable bit of headwind coming out of the European segment in particular with knee. So it's going to be a progression. With these new products, we believe that you're going to see some significant improvement in some of the product categories sequentially from Q1 to Q2. But a bit of that is going to be offset by the prior year comp in the knee side. Quantifying it, Jim?

Yes. Larry, without getting too deep into the weeds. If you were to go back and look at last year second quarter, you would have seen knee sales in Europe, we're up 9% in a market that was flat to maybe up in single digits. And while it didn't account for all of our growth, it was a significant contributor to that 9% growth. So hopefully, that gives you some sense of what we're up against.

That's helpful. Sure -- sorry to interrupt, Jim. And lastly, I'm relatively new to this call. David, could we get your view on robotics, please?

Robotics, I will tell you that we are big believers in incorporating technologies, developing technologies to improve the precision with which these procedures are done. And a lot of that comes, obviously, into preparing the site, the bone cuts but as well a more sophisticated approaches to soft tissue balancing, precise location of implants. There's a lot to be done here, and I think it's a very exciting area of innovation. That said, that innovation needs to be fashioned in a way that recognizes the price pressure and the environmental factors that the customers are operating within. And I just don't think that the right solution is going to be an ultra-expensive piece of capital equipment than -- or expensive licensing fees to provide a service that arguably is -- they would argue, is a value driver. I believe that the right answer in that space is going to be technologies and solutions that are smaller, faster and cheaper than the robotics solutions at this point in time. Now that said, it's going to be all about how things evolve and what areas innovate more rapidly in a manner that's more responsive to the customers needs. But the platforms that we are rolling out, that we have been working on for several years, I firmly believe are going to be more responsive to that segment through the market and the needs than the current robotics solutions. So I'd like to thank everyone for joining the call today and for your continued interest and support for Zimmer. We look forward to speaking to you on the second quarter conference call at 8 a.m. on July 26, 2012. With that, I'll turn the call back to you, Lachey.

Thank you again for participating in today's conference call. You may now disconnect.