Good morning. I would like to turn the call over to Bob Marshall, Vice President, Investor Relations and Treasurer. Mr. Marshall, you may begin your call.

Thanks, Regina. Good morning, and welcome to Zimmer's Fourth Quarter 2012 Earnings Conference Call. I'm here with our CEO, David Dvorak; and our CFO, Jim Crines. Before we start, I'd 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. We're glad you've joined us on the call today. This morning, I'll review our fourth quarter and full year 2012 financial results, providing commentary on Zimmer's performance. Jim will then provide additional financial details as well as our 2013 guidance. I'll state all sales in constant currency terms, and I'll discuss all earnings results on an adjusted basis. Throughout 2012, Zimmer successfully executed on our value creation agenda, including innovation and growth initiatives, global transformation programs and capital allocation strategies. For the fourth quarter and full year, Zimmer delivered on our financial commitments, generating double-digit growth in adjusted earnings per share and significant operating margin improvements. We also achieved key regulatory and commercialization milestones for a number of innovative products and technologies, both in our core franchises and in new adjacent musculoskeletal markets. Consolidated net sales for the fourth quarter were $1.18 billion, an increase of 2.1%, and our earnings per share were $1.51, an increase of 11% over the prior year period. Full year 2012 sales were $4.47 billion, an increase of 2.3%, and our full year earnings per share were $5.30, an increase of 10.4% over the prior year. Compared to fourth quarter of 2011, Americas sales grew 3.6% while Europe, Middle East and Africa recorded a sales decline of 0.7% and Asia Pacific delivered growth of 1.8%. In the United States, our commercial excellence efforts are focused on raising the performance of certain sales territories to the level of the many others that are continuing to perform well. We're making progress in this arena, contributing to an improved performance in the fourth quarter of nearly 400 basis points. We will build upon these programs and this progress in 2013 through our ongoing commercial excellence efforts and new product launches. Notwithstanding the…

As David discussed, our total revenues for the fourth quarter were $1,181,000,000, a 2.1% constant currency increase compared to the fourth quarter of 2011. Net currency impact for the quarter was negative, decreasing revenues by an additional 1% or $11 million. The negative currency impact for the quarter related principally to our euro and Japanese yen denominated revenues and was partially offset by positive currency impact from our Canadian and Australian dollar revenues. Continuing the trend of the last several quarters and in line with our expectations, Zimmer experienced pricing pressure of negative 1.9% in the quarter. In the United States, large joint reconstructive pricing improved by roughly 50 basis points in the fourth quarter, but this improvement was offset by incremental pressure in certain key European markets as we anticipated. Our adjusted gross profit margin was 74.9% for the quarter. The margin ratio improved 70 basis points compared to the fourth quarter of 2011. The primary drivers of this improvement were lower manufacturing costs and reduced losses on foreign currency hedge contracts, partially offset by lower average selling prices. In the quarter, we continued to benefit from progress in our strategic sourcing and manufacturing optimization transformation programs. Specifically, we are implementing leaner and more standardized processes of manufacturing, which are driving greater efficiency and lower unit costs. R&D expense decreased 14.8% on a reported basis when compared to the prior year. The step-down in R&D expense for the quarter reflects a natural decline related to the completion of certain large projects as well as the benefit of changes we have made in this function to increase efficiencies. Selling, general and administrative expenses were $461 million in the fourth quarter and at 39% of sales were 60 basis points below prior year. Changes stemming from our transformation initiatives drove improvement…

Thanks, Jim. Zimmer is well positioned to deliver high single to double-digit earnings growth in 2013 through continued expansion in both established and emerging markets and through the savings delivered by our operational and commercial transformation programs. We look forward to the broader introduction of an unprecedented pipeline of new products and systems in our core franchises and in a number of adjacent product categories, delivering new opportunities for expanded top line growth. And now I'd like to ask Regina to begin the Q&A portion of our call.

[Operator Instructions] Our first question will come from the line of Derrick Sung with Sanford Bernstein. Derrick Sung - Sanford C. Bernstein & Co., LLC., Research Division: I just wanted to start with guidance here. You've talked about previously EPS growth in the 8% to 12% range as kind of something sustainable, a sustainable target for you. Your guidance for next year, I think, gets us to kind of a 6.5% to 10% range. Can you just talk about sort of where the difference between sort of that aspirational goal and what you're setting for next year and how you see that sort of increasing to your aspirational goals?

Sure. We have also said, Derrick, all along that 2013 did not provide the same kind of opportunity for operating leverage as other years since, as you very well know, we are in a position in 2013 to have to absorb the medical device excise tax. We've done that, and I would reflect -- I would focus on the fact that the midpoint of that range is certainly well within the aspirational targets that we've discussed. And I'd also reflect on the fact that when you look at our guidance, and particularly when you look at the detailed guidance that I provided on the various operating expense line, in terms of what's implied in operating profit growth, we are still driving leverage in 2013 as a result of the progress that we're making on the transformational agenda and behind the anticipated growth we look to achieve with the launch of all these new products that David mentioned. Derrick Sung - Sanford C. Bernstein & Co., LLC., Research Division: Okay. That's helpful. On -- and turning to the hip and knee markets, it looks like you did see a bit of an acceleration in your Americas knee sales, kind of consistent with what we've seen from some of the other companies that have reported. In the U.S. or in Americas, your hip sales kind of stayed flat, whereas I think we saw a bit of an acceleration from the other larger competitors. So I was wondering if you could comment, first, kind of broadly on sort of how you're seeing kind of the market dynamics in hips and knees unfold this quarter. In particular, there's been some questions around are we seeing a bit of a pull-forward in procedures in Q4 as a result of some of the kind of concerns around fiscal cliff, et cetera, by patients. And then in particular then, could you comment on your own performance relative to kind of your competitors and maybe the lack of acceleration that you're seeing in hips and maybe talk about what's driving the improvement in your knee sales.

Sure. I think that when it comes to the overall market, we did see a bit of a pickup sequentially from Q3 to Q4. But the pickup was more in the United States and offset by some o U.S. markets that actually stepped down, notably some of the European markets. So I would deem it, Derrick, to be a stable market for large joints. If you look across the quarters of 2012, you have a range of maybe 150 basis points from the highest growth rate quarter to the slowest growth rate quarter. And the average for the year looks to me to be dead on with what we saw in Q4, that is around 2% growth. I think our own performance, we've talked about the improvement that we want to drive within the U.S. market. We're seeing improvement. I think that we had a nice pickup sequentially from Q3 to Q4, but more work to do in that regard. And I think that the programs that we're executing along with these new product launches are going to put us in a really nice place as 2013 progresses. Derrick Sung - Sanford C. Bernstein & Co., LLC., Research Division: And are you seeing any evidence of a pull-forward in procedures, at least in the U.S. in Q4, kind of based on increased seasonality at all?

I don't. I don't think that there's anything that is noticeable in that regard or noteworthy in that regard. I think that we always see seasonality, and you're going to have some puts and takes across the globe. And for us, we look at that. And again, in the United States, saw a bit of a pickup; in the European markets, saw a bit of a slowdown as we got to the back half of the year, certainly into the fourth quarter within the European markets. So when it washes out, you end up with a market that is stable.

Your next question will come from the line of Bob Hopkins with Bank of America.

So I'm sure there will be a lot of questions about hips and knees, but I want to focus on the surgical and other line because obviously, this quarter you saw a pickup in your growth rate of roughly 2x, which you've been growing in the last couple of quarters. And I wanted to make sure, for my first question, that I had a good understanding of what drove that acceleration in that line item this quarter. Was that truly the first signs of positive feedback on your power tool launch? Or were there other more onetime items in there?

Well, there was a bit of benefit from the acquisition of Dornoch's Transposal waste fluid management system, but the growth is much, much broader than that. So we did a nice job on the legacy products, Bob, within the surgical portfolio and just are beginning to see some of the benefits of power tools and the new product categories. And it's just -- it's a good area for us to focus on because we've been talking a lot about the new products, both through internal and external development. And the surgical line is an area where we've shored up our legacy products with internal innovation efforts but we've also added through external development, and that allows us to now penetrate markets that we didn't previously participate in. So I think that's going to be a big theme for us in 2013 as we add products into categories and markets in which -- and these are adjacencies, so these aren't out of our core wheelhouse here. These are within the markets that we serve and the relationships that we possess. As we add those new product categories, those are going to be top line growth accelerators, and that's exactly what you saw in Q4 within our surgical line.

So then just to follow up on that. As it relates to that line item for 2013, some of these new products have been on the market for 6 months now or so. And you're saying we probably won't see much of a pickup in Q1. I guess I'm wondering why we wouldn't start to see that. And then implicit in your guidance for revenues, what sort of contribution are you assuming from, say, hyaluronic acid and power tools? I think it'd probably be a safe assumption, from my perspective, that you could grab at least 5% of those markets in 2013. And I was wondering if you -- is that what you're assuming? Or just any further color on that would be helpful.

Well, those are -- it is the case that we're moving into full release of many of these products, Bob, and they're going to come at different paces, right. There are going to be instances like Gel-One where I have absolute confidence that in a reasonable time period, we're going to pick up nice market share with that product. All the initial feedback has been very, very positive, and we have to get all the distribution channel elements set up, so that includes the specialty pharma wholesale side. We've got the buy and bill side. We're pushing hard on that. But it's going to be a ramp-up because it is a new product category. When it comes to the implant systems, as you know, you're deploying instrument sets. That takes time. The surgeon training and education takes time. And so it will ramp up sequentially. And I think that the biggest thing that you have to recognize in Q1 is 2 less billing days in our largest market. That's several hundred basis points. So we're going to make progress in executing these launches. I think that you'll start to see that progress much more in Q2 and thereafter in 2013.

And do you assume that line item grows 15% to 20% this year?

Within surgical?

Within the surgical and other, yes.

Surgical and other, we expect to see double-digit growth within that line.

Our next question will come from the line of Matt Taylor with Barclays.

I just wanted to ask one on knees and maybe just help us gauge the ramp of the Persona launch this year. And also just a broader question on hips, what can you do there to improve some of your hip performance? How big of a contributor do you expect some of these new cups to be in 2013?

Sure. I think on the knee front, the Persona, The Personalized Knee System, is going to be the company's largest launch ever, and we put a lot of effort into the development of this system. It's a multigenerational product development effort. It will be rolled out in phases literally over multiple operating periods. And so 2013 is just the beginning. But within 2013, we expect this system to make a meaningful difference in our knee performance. And so we feel terrific about where we're headed within total knee arthroplasty, which is obviously our largest franchise. I would tell you that we feel very good about our pre-TKA offerings and our revision offerings as well, the latter leveraging Trabecular Metal, the former leveraging terrific clinical results with our Unicompartmental System and now adding Vitamin E as a bearing surface that is a superior technology, puts us in a great, great place. So there's going to be more to talk about with Persona in the coming quarters as we roll out the elements of that system. It's a very comprehensive system that, as I said, includes the implant designs that offer terrific fidelity and personalization options for the surgeon. We believe that it will be unmatched in the marketplace. And we're also augmenting that with advanced technologies through our intelligent instrumentation offering that will include iASSIST. So we're expecting big things from our knee franchise and are very confident that we're going to be able to deliver. On the hip side, we have a very solid line already. We have some great innovations and again, Vitamin E is something worth talking about there, intelligent instrument innovations on the way within that franchise and shoring up our Revision line as well. So I think that hips is going to be a good contributor for us as well. We're probably a little bit phased behind where we are in knees on the innovations with new things coming out. But with the Continuum Cup and our existing lineup of cups and stems and various bearing surfaces, we feel like we're in a great position to compete effectively in hips currently.

And I just wanted to ask one on China because clearly, there's been some deals in this space. You had one that you did a couple of years ago and haven't talked much about it. So I was curious in terms of how much of a contributor to performance China has been for you, and how you expect that to grow over time?

Yes, China's performed very well. I think that it's one of the key markets that we're focused on within the emerging market set. We, some time ago, as you mentioned, did a relatively small acquisition there, but I think an intelligent acquisition for us to penetrate beyond the premium market segment there, premium -- and a little bit more of a value mid-market segment. That acquisition's gone well for us. That was the Beijing Montagne acquisition. It brought us some products. It brought us local capabilities on research and development manufacturing as well as a distribution channel that was set up focused on that market. All of those key emerging markets continue to grow double digits plus for us, and we expect to see that kind of continued progress in China and elsewhere.

Your next question will come from the line of Bruce Nudell with Crédit Suisse. Bruce M. Nudell - Crédit Suisse AG, Research Division: Dave, like when we calculated the hip and knee major joint market for the year, we came up with like 2.5%. And your -- this quarter, your non-major joint businesses, I think, were growing around 7%. So if you kind of grow at market in major joints next year assuming constancy and show continued momentum in the other businesses that you have, you should be kind of at the higher end of the revenue guidance range. And so could you just elaborate on your thinking of what's going to influence where you wind up in that range? Any assumptions you may have about maybe continued underperformance in major joints as offset by strength in the non-major joint businesses? And is the midpoint of the range what we should be thinking about?

In direct answer to your question, I think that the last question you pose, Bruce, is -- the answer to that is, yes, I think that is the right place to start the year. And the comments that you started with, I think are the locker room comments that will go up in front of our sales force because it really is -- it's a sales execution game for us at this point in time. And it's a matter of not whether, but how fast we'll be able to ramp up and exploit the opportunities of these terrific new products that are getting launched across the globe and across all the product categories. We've never been in a better position. So the pace of that, whether it's one quarter or another quarter where you start to find some traction, you can never predict with absolute certainty. You can run into some extra training needs or resource shifts to be able to fully exploit those opportunities. And so of course, you're going to come into this year providing a range, but I'm really excited about where we're headed. We'll withstand the couple billing day loss of Q1, make good progress in the initial stages of these launches. And I think that thereafter, you're going to start to see progress on the large joint side and as well, we have some great opportunities in some of the other product categories as you referred to them. Bruce M. Nudell - Crédit Suisse AG, Research Division: So just to put a finer point on it. You wouldn't be shocked at 3.5% to 4% as opposed to 2.5% to 3%. So we shouldn't be ruling out maybe a little better than midpoint?

I'm not going to rule it out, Bruce, but we provide you with a broad guidance here, sitting on a cold winter day in January, because it's the first month of the year. So look, we're going to run the business, and our expectations obviously are all that and more. But we want to make sure that we're expense focused on the management side, and we're doing the right things to manage expectations with all of you. Bruce M. Nudell - Crédit Suisse AG, Research Division: Fair enough. And I'm just going to try to hold you to the promise you made last quarter, I think. Could you just give us a little color on how you scale the Gel-One opportunity, which does look like a very interesting product?

Yes. This is -- it is a product that we're going to do well with. Again, very confident to that. We're just getting rolling. Obviously, if a company had an HA product in that space and had the full channel build out, the penetration rate that you're going to get to in the early quarters is going to be a bit higher. Some of that infrastructure and distribution channel needs to get built out, and we're in the process of doing it. I think we're making great progress on it. So again, this is something where whether it's 1 quarter or 2 quarters or 3 quarters, we know we have a great opportunity. We're going to be methodical in our approach to it, be smart about showing that we're doing it the right way for the long term. But we've got some people that are very enthusiastic about it and we're going to get after it. I don't really want to get into breaking out one product category, Bruce, and providing specific millions of dollars guidance on that. But it's embedded within our 2.5% to 4.5% constant currency growth rate guidance for the full year.

Our next question will come from the line of Larry Biegelsen with Wells Fargo.

I wanted to start with the gross margin and then ask a question on Persona. So Jim, help us out here. If the medical device tax is about a 70 basis point hit, it looks like you're expecting an improvement in the underlying gross margin year-over-year, if I'm doing the math correctly. So first, am I doing the math correctly? And if so, what's driving the improvement in the gross margin in 2013?

Sure. So again, we anticipate our gross margin ratio will be between 74.5% and 75.5% for the full year. That -- I think that lines up very close to where we landed for the full year 2012. And among -- ahead of things that are going to be impacting on margin in 2013, we expect the positive trend in hedge gains and losses to continue throughout 2013. We also anticipate lower unit cost from a combination of higher volumes associated with new products, with the Persona launch being the key driver, as well as efficiencies gained and expect to continue to gain from improvements in our manufacturing processes. So just to give you some idea of the change, changes in hedge contract gains and losses alone using year-end exchange rates account for about a 50 to 60 basis point improvement in 2013 compared to 2012. And as you pointed out, offsetting the favorability in hedge gains and losses and the reductions in unit costs will be the anticipated 2% decline in average selling prices, and in the second half of the year, the $10 million to $15 million per quarter charge in cost of sales for the medical device excise tax.

And then on Persona, what can we expect at AAOS this year? And can you give us a little bit of color on the o U.S. launch timing? And just lastly, do you think Persona is mainly going to be a mix benefit for you guys? Or do you think that the advantages of the system will be enough to take market share, which has obviously been very, very sticky in the hip and knee market?

Good questions, and we will be in a position to provide you with more exposure to the Persona system at the Academy. So hope you're able to make it. The launch of the system is a global launch. But I would tell you that as is consistent with most of these launches within the industry, we're focused more so on the United States initially and then key o U.S. markets. So the big opportunities in year 1 are going to be more U.S. oriented. And I see it as being a system that provides us with opportunities beyond mix even out of the gate. As you said, those are harder because of the stickiness of the market share. But the benefits of the system are profound enough to where we believe we're going to have competitive opportunities even in year 1.

Your next question will come from the line of Joanne Wuensch with BMO Capital Markets.

Can we touch a little bit upon your U.S. sales force? It looks like your Americas revenue growth is accelerating actually quite nicely. And is there any reflection in sales effort or realignment of that effort?

Well, yes, Joanne, and we mentioned this in the prior quarter 2 calls. We've made adjustments. But that's the case. That's an ongoing management matter, and we're always looking to add talented people to the organization, whether it's at the rep management or senior leadership levels. We've done so over the course of 2012. We'll continue to do so in 2013. I think that we were specific in past quarters about some underperforming territories within the United States. We've made some changes there, starting to see the early signs of those benefits. And so the Q4 performance and the uptick, I think it was a bit, just a bit under 400 basis points, is part of the benefit of the actions that we've taken and the effort that we've made to shore up our execution on the commercial side within the United States. But we would expect to continue to make progress in that regard. And those efforts, combined with the new product launches, ought to put us in a very nice position as 2013 progresses.

And then the companion to that is, what helps turn your o U.S. sales around?

Well, again, I'd focus, Joanne, on the fact that we had 2 fewer billing days in Europe in the fourth quarter. So if you look at Europe for the full year, I would tell you that we had an outstanding year in what is admittedly a tough market. We -- if you look at our Asia Pacific results for the year and feel that we had a good year relative to the market. As you know, as we get into 2013, at least with respect to Asia Pacific, we'll anniversary out of the Japan price cuts beginning in the second quarter. So that should provide a bit of a tailwind with respect to that region. And we expect to continue to see positive results out of Europe relative to market. So the market may be affected by economic conditions there, but we would expect to continue to see good performance out of our team.

Our next question will come from the line of Mike Weinstein with JPMorgan. Michael N. Weinstein - JP Morgan Chase & Co, Research Division: Just a couple clarification items. Jim, could you just give us the contribution from acquisitions in the quarter?

On the top line, Mike? Michael N. Weinstein - JP Morgan Chase & Co, Research Division: Yes, top line.

I don't have a specific percentage. Clearly, there was -- it contributed to the growth that, particularly in that surgical and other products category that David mentioned, the waste management disposal devices contributing in a meaningful way in the quarter. Michael N. Weinstein - JP Morgan Chase & Co, Research Division: How much did Dornoch contribute in the quarter's sense for that line?

It would have been low-single digits in millions, Mike. So the contribution on the top line growth of any of those acquisitions is negligible. Michael N. Weinstein - JP Morgan Chase & Co, Research Division: Yes, they're all a bunch of like $2 million to $3 million basically...

That's right, very small businesses that we acquired. Michael N. Weinstein - JP Morgan Chase & Co, Research Division: Okay. And so -- and the math for the 2.5% to 4.5% for 2013, do you know what it is within that?

Again, these are businesses that when they were acquired had perhaps somewhere in the order of $10 million of revenue, for example, in the case of Dornoch. So obviously more than that in 2013, but it's at the margin. It's going to be -- certainly going to be building that up over time, but not tens of millions in a single operating period from where... Michael N. Weinstein - JP Morgan Chase & Co, Research Division: Understood. When you did your planning for '13, are you essentially assuming that a recon market that is identical to 2012? How are you modeling in?

Yes, that is our assumption, Mike, is that it's stable relative to what we saw in 2012. Michael N. Weinstein - JP Morgan Chase & Co, Research Division: Okay. And does your performance relative to it improves and you get the contribution from some of the other categories that you're just getting into, right?

Both, that's right. And our performance relative to that market will improve sequentially as the year progresses. Michael N. Weinstein - JP Morgan Chase & Co, Research Division: And then last thing, the distributor buy-ins, how do we think about the impact of that on the business? There's both a plus and a minus from that. So just give us a sense of where you are with that and the impact on the business kind of fourth quarter and rolling into '13.

Yes, not a significant contribution in that regard either. Those are strategic acquisitions primarily in the o U.S. markets, Mike, where we have an interest in having a presence and making further investments. And so it's a structural adjustment consistent with what we want to do in those particular markets. But we don't have enough going on in that category at this point in time to spend much time talking about it. It just isn't significant.

Our next question will come from the line of David Lewis with Morgan Stanley.

Just maybe a quick one for Jim and then for David as well. Jim, I was looking at the EBIT margin for the third quarter. You had a really nice sequential uptick, and I think 31% is the strongest EBIT you've had in over 4 years. So it does look like the restructuring program is having a benefit. As I think about '13, it seems like we're getting into the back half of the restructuring program, or maybe it's sort of the breakpoint over that 5-year plan. So it seems like you'd start to see more material benefit from restructuring in '13, but that's not necessarily implicit in the guidance you provided for '13. So give us a sense of where you are in the restructuring plan. And is there -- are there more material offsets to the restructuring in '13 that we're not thinking about? Or you think the margin outlook for '13 reflects some conservatism?

Well, first of all, as you said, the work we've completed to date validates our beginning assumption that we can create a lot of value through these programs, the focus of the organization on achieving what we're referring to as operational excellence. We're pretty far along, as you pointed out, but -- and we're on track to achieve the aspirational goal of $400 million of cost savings by 2016. More specifically, I can tell you, on a run-rate basis, when the savings from 2011 and 2012 and the 2012 initiatives are added to the anticipated 2013 savings, we expect the total run rate coming out of the end of the year of $210 million to $220 million. So I will say with respect to how it's impacting on EBIT margins in 2013, first of all, obviously we have to use those savings to absorb the medical device excise tax. But we're also using those savings to accelerate certain technology and product development programs, to cover short-term dilution from these recently completed acquisitions and to support the continuing build-out of our emerging market businesses and to fund expansion of our global sales channels. As you know, we're getting into, with some of these acquisitions, adjacent markets. David talked about some of the investments we're making in the sales channel to support the launch of the hyaluronic -- Gel-One hyaluronic acid product. So to the extent you might have expected more EBIT margin expansion, if you're not seeing it, it's because some of those savings are getting reinvested.

Okay, very clear. And David, just thinking about your recon franchise and Persona, I think you've talked about a couple of things you're trying to achieve in recon, the first of which is obviously, improving clinical value. And I think you've also mentioned your desire to reduce complexity. And I'm trying to think about Persona with some of our early diligence. I mean, I think we understand there's definitely more customization and there's some excitement about that. But how do you think about the complexity argument? How does sales manage that in terms of total cost of ownership of the hospital system, just given perhaps better but more complicated instrumentation and actually increasing inventory versus reducing inventory? So how does the balance of clinical value versus complexity work with Persona as you begin the launch?

Yes, this is consistent with what we've been talking about is the scope of innovation that's going to allow one to be most successful, and the marketplace that we're serving in the future is going to have to broaden. So we need to innovate not only with respect to the implant design and the capabilities that, that provides the surgeons to provide a personalized solution to a patient, but preoperative planning, intraoperative technologies. And so the Persona system is much, much more comprehensive than sort of a traditional implant approach. And this will be coming out in waves but we'll begin to have a more specific discussion within 2013 about that to get after the questions that you posed.

Our next question will come from the line of Matt Miksic with Piper Jaffray.

So a couple of follow-ups, one on the changes that you're making in the U.S. in terms of distribution. Could you maybe provide a little bit of color into what impact, if anything, there was in the quarter from that? U.S. knee is obviously a little better than we were looking for. But I'm wondering what's the sort of net impact of some of those distribution changes in the U.S.? And then how we should think about that heading into '13? And then I have just a couple of follow-ups here.

Yes, I think that the net impact was positive. But we're not going to get into granularity by territory, Matt, as to try to measure that in dollars, and I don't know how anyone would do that either. You're talking about a large sales force and the connectivity and engagement of that large sales force. And obviously, if we're all aligned and we're providing the best products to that sales force to allow them to compete effectively in the marketplace, they're going to be more inspired and more effective, and I think that that's what we're beginning to see and we expect to see a lot more of it in 2013.

There was, maybe early in '12, you were talking about some -- maybe inconsistency is too strong of a word, but areas in the U.S. where you felt really good about performance and then areas where you felt they were lagging. Would you say Q4 was more consistent? Or we're not there yet?

No, it was. I mean, we're on the right track. You're always going to have -- in a ranking system, you're always going to have people that are performing better than others and look to move those mid-tier people or lower-tier people up or do something more radical, if necessary, to get them on the right track. So it was progress in Q4, and we expect to see more of it in 2013. But this is -- this isn't a discrete 3-month effort. This is just ongoing management of the business, Matt.

Okay. On spine, you mentioned in your prepared remarks the focus on core fusion technology, to get that going. Can you talk a little bit about what that means? Are you talking about strategic adds to that business? Are you talking about redesigning your main lines there? What -- help us understand a little bit about what that means.

Yes, I think that part of where we had been in that franchise is, as you're already familiar with, is we emphasized in the past some of the non-fusion technologies and we had picked up through bigger acquisitions, including way back when, the Centerpulse acquisition, the non-fusion system of Dynesys, with the uncertainty as to how to get those products approved through the FDA at this point in time. And we turned back to where the vast majority of that market reside, and that's core fusion. So outer bodies, inner bodies, low-profile solutions within that space are much of what we're doing. You shouldn't expect us to do anything in the way of a large acquisition within that space. Rather, I think that with the fragmentation of that marketplace and the technologies that have been developed and what's happened within that marketplace over the last several operating periods, we think we'd be in a good position to very economically pick up some product lines or some licensing deals that would augment our internal development.

Okay. And then finally for Jim, on the question on the P&L and kind of related to the rollout of Persona. As we think about rolling out a system of this magnitude, granted it's going to happen over a couple or a few years but invariably, there's an awful lot of new fixed capital assets in the form of instruments that's going out into the field. Early on, those are going to be underutilized relative to your sort of core NexGen line for example. Is that something that we've already started to see the impact on here in Q4? And maybe can you talk about where in the P&L that extra depreciation sort of drops and how that figures into 2013 guidance?

Sure. So again, that is the case, Matt. Although I would tell you with this system, the approach is fundamentally different than from what it's been in the past. We have more streamlined way of kitting for surgeries for cases, and you'll be able to get a sense of that at the Academy meeting. We'll have an opportunity to demonstrate that a bit more clearly. Nonetheless, if you look at the cash flow statement for the fourth quarter, you would see that there was a fairly significant investment in instruments. Those are the instruments that are going to be getting deployed over the next couple of quarters in support of the launch of Persona and some of the other new products as well. That depreciation, when it begins to hit, will hit SG&A expense. But as it's hitting SG&A expense, the savings that we're driving out of the transformation initiatives are going to be hitting as well, and that is all reflected in the guidance that we provided.

And as you get -- I guess, as utilization starts to pick up, not that we're -- we just got into '13 here, so we're not really talking about '14 yet. But is this -- that, I would imagine, is kind of a source of leverage back half '14 as volumes and utilization in turn kind of starts to ramp up. Is that fair?

Well, we've said in response -- I've said in response to that question in the past that in this business, with our margins and particularly with the opportunity that we have to drive more significant leverage on those fixed costs, and the instrument depreciation is a good example of that. And we know that if we can -- to the extent we can get large joint reconstructive business growing up around mid single digits, the opportunity to drive leverage in EBIT is somewhere in the order of 40 to 50 basis points. So you're absolutely right. As we move into future periods with this particular system, we are going to have that opportunity.

[Operator Instructions] Your next question will come from the line of Jason Wittes with Brean Capital.

I wanted to ask about iASSIST. You previewed this last year at AAOS, and it got a lot of attention, certainly from investors but also from doctors. So I was wondering a couple of things about it. Number one, I know it's basically a tool. So are you actually charging for it and kind of what range? What kind of premium would be attached to it? And secondly, do you see this as actually something that can move market share for you?

Yes, the answer is, to the last question, is yes, we do. We think that these smaller, faster, cheaper intelligent instruments that enhance the reproducibility of these procedures and enhance placement alignment which is exactly what iASSIST is focused upon, are going to be difference makers. And I think that over time, these technologies are going to become not only accepted and penetrate the market in a meaningful way, but I think that they're going to become the standard of care. I don't think that ultraexpensive upfront capital equipment-oriented systems are going to become the standard of care because of the environment that we're operating in. So we've been working for several years now. What you're seeing with the launch of the iASSIST and applying that technology in the knee procedure context, we do expect to get an incremental charge out of that system. These are disposable pods that are used for each procedure. And I think that as far as the pricing goes, you can think about that in a similar way that you think about our PSI technology.

Okay. And in terms of the rollout, I think it's actually -- you started rolling out last -- in the fourth quarter. How long should we anticipate before you can kind of fully roll it out to the entire -- to your entire customer base?

Yes, this is one where, as you said, it did begin its formal rollout last quarter. We received FDA clearance. It was one of many clearances that came through in the fourth quarter across our various franchises. So we're excited to be at this stage. It will be featured at the Academy. There obviously is going to be a more intensive surgeon training and education effort built around the rollout of iASSIST. So you'll see it throughout 2013 and thereafter.

And I guess just last thing on iASSIST, in terms of clinical data sort of backing the claims, what are you out there telling the field about that?

Yes, typically, with these types of systems, we have all of the internal validations and labs, so sort of a bench testing the scientific data to support why this leads to the right placement and reproducibility and ideal alignment. And so that case can be made out presently. The long-term clinical benefits, obviously, will be a multiyear test, but we have the right studies set up to build that database out over time.

Okay. And just one quick clarification on the Persona Knee rollout. I know it's a multistage rollout. But I assume the first stage, from what you're implying, should be completed by the first half of this year, of 2013. Is that the right way to think about it?

Well, I think that the first stage being the core primary system will be rolled out in, as I said, primarily, the U.S. market, but key o U.S. markets as well, it's just this is going to be every month rolling with various additions, augmenting the core system. And so we're talking about every month of 2013 and a handful of, literally, years thereafter that are part of this broader plan for us.

Your next question will come from the line of David Roman with Goldman Sachs.

Jim, I was hoping to come back to something you answered in response to one of the previous questions regarding the 8% to 12% earnings growth goal. I know you talked about the medical device tax in 2013 presenting a headwind to operating leverage. But you only have that for half the year and obviously in 2014, you'd have it for the full year. So is there something else on a longer-term basis that could help offset that, where you have a tougher comp for the next couple of years? Is 8% to 12% more of an underlying number x the device tax?

David, first of all, I would focus on the midpoint of the guidance and what's implied in terms of operating leverage for 2013, which we do expect to achieve in 2013 even in the face of having to offset the medical device excise tax. I would also just echo comments I made earlier in connection with where we are with respect to the restructuring and transformation programs, which together with our growth initiatives and our capital allocation strategies, is what gets us to feel very comfortable, very confident in our ability to deliver earnings per share growth in that 8% to 12% range over the long term. And as I pointed out earlier, we're in very good shape with respect to the progress we're making on those programs. We expect to end the year at a run rate of, as I said, somewhere between $210 million and $220 million in operating expense savings. Those savings, we'll be able to use, in direct response to your question about 2014, when we have to absorb another $20 million to $30 million of medical device excise tax. I pointed out earlier that in the short term, it is the case that some of those savings are getting reinvested. So a number of different areas where they're getting reinvested in the business. But as we get into future periods, as we get past some of the investments we're making in the short term in support of these, a number of significant new product launches, we'll have the opportunity to drive the kind of earning -- or the operating leverage that we need to, to deliver on that 8% to 12%.

So if we think just conceptually about the growth rate, top line and bottom line, it sounds like what you're saying is you're going to invest to drive new product growth and expand into faster-growth geographic regions. So we'll see an improvement in the top line as reflected in your guidance. Gross margins and it's sort of there are a number of moving parts there, the device tax, et cetera. You have some cost efficiencies that can help offset things like pricing. But where there is still a lot of room is on the discretionary expense side, particularly SG&A, to drive a meaningful amount of operating leverage. Is that a fair way just to think about it conceptually?

I think that's very fair.

Our next question will come from the line of Rajeev Jashnani with UBS.

I may have misheard this incorrect -- or misheard this, but did you mention that pricing was plus 50 bps in U.S. recon?

No, we said 50 basis points of improvement sequentially from Q3 to Q4.

Okay, then that clarifies that.

Okay.

A question just on the new product cycle and potential mix gains associated with that. Some of your competitors are obviously launching new systems this year as well, and maybe you could help put in perspective what a mix benefit might be as you roll out a new product cycle, generally whether it's on the order of a couple hundred basis points. Presumably, while you're striving for share gains, I would think it's -- your competitors are obviously trying to do the same thing, which may make it a bit tougher there.

Yes, I think that there are mix benefit opportunities for us as we roll these systems out. If you focus on knees, for example, there are premium technologies that will be built into the Persona System. This is going to be, again, a very, very broad-based system. I think that for several operating periods to come, it's going to provide us with mix benefit. The range of that -- again, as we've said in the past, we think that on the high end, you probably are in a position to offset negative price in the current environment that we're operating in. That's a fair amount of mix obviously. If you don't have the launch of material new system in the large joint side, it's probably difficult to offset, through mix, the down price on the pure price side. But we ought to be in a good position to help ourselves on that front as this system launches more fully in 2013.

And just if I can, one follow-up on the fourth quarter just on hips and knees. Was there -- I mean, Zimmer was a few hundred basis points below the competitors, below some of the competitors at least, in major joints. Maybe -- what's your perspective on that? And I know the new systems are going to be helping. But there was a pretty meaningful gap there. Any other perspective you could provide on that would be helpful.

Yes, I think that the gap there, obviously, Europe slowed down. We have a big hip business in Europe. That's a business that performed very well for us throughout the year. But it was a slow market in Q4, and so we're going to take a big chunk of that with our market share there. The knee opportunity on a global basis is going to change materially in 2013 with the launch of the Persona System. So we're going to focus on execution. I don't think it's several hundred basis points gap. But there is a gap, and we're going to close that gap in 2013 and get on top.

Our final question will come from the line of Rick Wise with Stifel, Nicolaus. Frederick A. Wise - Stifel, Nicolaus & Co., Inc., Research Division: Just a couple of quick follow-ups really. Have you characterized at all the pricing premium for Persona? Clearly, new technology would seem to deserve and generate a bit better price. And I'll ask just the second follow-up now. It may be, David, may be a great time just to reflect on your latest thoughts on capital deployment, particularly in the acquisition side. Should we expect the recent activities to continue? And maybe just your updated thoughts on your priorities as to adjacencies or new markets or products.

Sure, Rick. We do see opportunities on the premium price side with the Persona rollout. Our experience to date has been positive, and we would look to continue to drive mix benefit as we were just discussing in response to the last question, Rick. We don't want to quantify that at this point in time and obviously, this is a broad system. And so the mix opportunities are going to be different depending upon what configuration and what market we're deploying instruments and selling the Persona System at this stage. On the capital redeployment, I think that we've been very disciplined about the deals that we've done. We're going to see a lot of value creation from these bolt-on transactions, particularly ones that have taken us into new markets just because there's no cannibalization from the revenues when we pick up those product categories or bolt-on acquisitions. And so they're going to be top line accelerators for us, leveraging the existing distribution channels, leveraging our existing relationships, and we think that that's a great value-creation model. We're starting to see it in a couple of the product categories already. The ExFix system that we picked up is one of the difference makers within our trauma portfolio. Power tools, blades, the waste fluid management system is going to be a difference maker for us on the surgical side. And we'll look to do that even on the large joint side where we can pick up the right kinds of technology. So I think that you should expect to see more of the same from us. Again, to the extent that our aggressive and disciplined hurdle rates were met, would we be interested in doing larger transactions relative to the ones that we've been doing for the last several years? Sure. But we're going to be disciplined about it to make sure that the capital that we deploy into such a transaction is going to be value creating for our shareholders. So with that, I'd like to thank everyone for joining the call today and for your continued support for Zimmer. We look forward to speaking to you on our first quarter conference call at 8 a.m. on April 25, 2013. Now I'll turn the call back to you, Regina.

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