Alicia Rodriguez - William P. Sullivan - Chief Executive Officer, President, Executive Director and Member of Executive Committee Didier Hirsch - Chief Financial Officer, Principal Accounting Officer and Senior Vice President Ronald S. Nersesian - Chief Operating Officer and Executive Vice President Guy Sene - Senior Vice President and President Electronic Measurement Group Michael R. McMullen - Senior Vice President and President of Chemical Analysis Group Nicolas H. Roelofs - Senior Vice President and President of Life Sciences Group

Nandita Koshal - Barclays Capital, Research Division Jon Davis Wood - Jefferies & Company, Inc., Research Division Tycho W. Peterson - JP Morgan Chase & Co, Research Division William Stein - Crédit Suisse AG, Research Division Derik De Bruin - BofA Merrill Lynch, Research Division Jonathan P. Groberg - Macquarie Research Vijar Kumar Richard C. Eastman - Robert W. Baird & Co. Incorporated, Research Division Doug Schenkel - Cowen and Company, LLC, Research Division Paul R. Knight - Credit Agricole Securities (USA) Inc., Research Division Isaac Ro - Goldman Sachs Group Inc., Research Division Ajit Pai - Stifel, Nicolaus & Co., Inc., Research Division Daniel Silver - UBS Investment Bank, Research Division

Good day, ladies and gentlemen, and welcome to the First Quarter 2012 Agilent Technologies Earnings Conference Call. My name is Keith, and I'll be your operator for today. [Operator Instructions] As a reminder, today's conference is being recorded for replay purposes. And I would now like to turn the conference over to your host for today, Ms. Alicia Rodriguez, Vice President of Investor Relations. Please go ahead, ma'am.

Thank you, Keith, and welcome, everyone, to Agilent's First Quarter Conference Call for Fiscal Year 2012. With me are Agilent's President and CEO, Bill Sullivan; as well as Senior Vice President and CFO, Didier Hirsch. Joining in the Q&A after Didier's comments will be Agilent's Chief Operating Officer, Ron Nersesian; and the Presidents of our Electronic Measurement, Life Sciences and Chemical Analysis Groups, Guy Sene, Nick Roelofs and Mike McMullen. You can find the press release and information to supplement today's discussion on our website at www.investor.agilent.com. While there, please check -- click on the link for Financial Results, where you will find revenue breakouts and historical financials for Agilent's operations. We will also post a copy of the prepared remarks following this call. For any non-GAAP financial measures, you will find the most directly comparable GAAP financial metrics and reconciliations on our website. We will make forward-looking statements about the financial performance of the company. These statements are subject to risks and uncertainties and are only valid as of today. The company assumes no obligation to update them. Please look at the company's recent SEC filings for a more complete picture of our risks and other factors. Before turning the call over to Bill, I would like to remind you that Agilent will host its annual Analyst Meeting in New York City on March 8. Details about the meeting and webcast will be available on the Agilent Investor Relations website 2 weeks prior. And now I'd like to turn the call over to Bill. William P. Sullivan: Thanks, Alicia, and hello, everyone. Agilent's Q1 orders of $1.62 billion were flat versus last year. Q1 revenues of $1.64 billion were up 7% year-over-year. Non-GAAP EPS was $0.69 per share, and operating margin was 19%. We generated $150 million of cash from operations and ended the quarter with $1.6 billion in net cash. Our Q1 performance was a solid start to fiscal year 2012. Electronic Measurement revenues were $778 million, up 1% over last year. Operating margin was 21% of revenue, a 58% increment for the quarter. We saw strength in Aerospace and Defense, up 5%; industrial, computer and semiconductor markets were up 6%, with strength in the industrial subsegment partially offset by continued weakness in computer and semiconductors. We also saw an unexpected decline in the communications markets, down 8% year-over-year. The causes were twofold. First, there was the decline in wireless infrastructure or base stations for global network equipment manufacturers. This was coupled with a substantial decrease in demand from Chinese infrastructure vendors. Second, there was a significant decrease in investment in RF component supply chain. This decline overwhelmed our double-digit growth in handset test. While we believe this is a pause, we are taking a conservative position in our guidance. In our bioanalytical measurement businesses, you'll recall that a year ago, we experienced some revenue delays from the Varian integration. This resulted in easier compares for our first quarter in fiscal year 2012. Chemical Analysis revenues of $396 million were up 14% year-over-year. Operating margin was 22%. Life Sciences revenues of $461 million were up 14% over a year ago. Operating margin was 14%. All key markets remained strong. Environmental revenue was up 16% year-over-year, food was up 14%, and petrochemical grew 14%. Pharma and biotech was up 18%, while academic and government grew 7%. We made a number of announcements in the first quarter. First, with our continued focus on maximizing Agilent's operations and improving gross margins, we named Ron Nersesian to the position of Chief Operating Officer. Ron led the recent transformation of our Electronic Measurement business. Under Ron, we also centralized Agilent's order fulfillment operations. The new global organization should better enable us to leverage our worldwide scale and scope in manufacturing, procurement and logistics. For example, we have started shipping NMR sample loading automation and carry UV-Vis spectroscopy products out of Penang. Second, we have registered Agilent Infinity 1200 LC and 6000 MS instruments as Class 1 medical devices with the U.S. Food and Drug Administration. This is an important step for Agilent's strategic initiative in the diagnostics market. Third, we announced 4 acquisitions in the first quarter. These include Halo Genomics, which expands our SureSelect portfolio and BioSystems Development, which expands our Life Science capabilities and sample prep. Finally, in January, we announced that Agilent would initiate a quarterly cash dividend. This is a reflection of Agilent's financial strength and continued growth opportunities and underscores our commitment to enhance shareholder value and return. For the second quarter, we expect revenues in the range of $1.7 billion to $1.72 billion. Non-GAAP earnings are expected to be in the range of $0.71 to $0.73 per share. The midpoint of our EPS guidance for the year remains unchanged. This outlook assumes several factors. One, Electronic Measurement will grow approximately 2% for the remainder of the year; two, we will see continued solid performance in Chemical Analysis and Life Science, resulting in overall Agilent growth rate of approximately 5%. Revenue growth will be back half loaded, and we will have easier year-over-year comparisons. And finally, we will continue to deliver market-leading products while we make progress in optimizing our order fulfillment operations. Thank you for being on the call. And now I'll turn it over to Didier.

Thank you, Bill, and hello, everyone. As always, my comments will refer to non-GAAP figures. Agilent first quarter results reflected the soundness of our operating model. Revenues adjusted for the changes in exchange rates since last quarter were at the low end of our guidance, while EPS of $0.69 was at the high end of the range, as operating expenses were well-managed. Indeed, the first quarter year-over-year operating margin incremental of 39% was at the high end of our 30% to 40% operating model of expectations. Let me start with Q1 orders and revenues. Orders of $1.62 billion were flat from one year ago and down about 1 point in constant currency. Segment orders adjusted for currency reflected a 6% decline in EMG, while LSG and CAG grew 4% and 3%, respectively. Regional order growth rates in constant currency were 6% growth in the Americas, a 2% decline in Europe, 3% growth in Japan and a 7% decline in the rest of Asia Pacific. Revenues of $1.64 billion increased 7% from one year ago, both at current and constant exchange rates. Both CAG and LSG revenues grew 14% or 13% at constant currency. Adjusted for last year's Varian revenue delays mentioned by Bill, CAG grew 7% and LSG grew 11%. EMG revenues increased 1% versus the strong prior-year comparison and were flat on a currency-adjusted basis. EMG's excess backlog due to capacity constraints has now been shipped. Regional revenue growth rates in constant currency were 3% growth in the Americas, 4% growth in Europe, 10% growth in Japan and 12% growth in the rest of Asia Pacific. Our regional breakdown of revenue was largely consistent with prior periods, with 35% coming from the Americas, 26% from Europe, 28% from Asia less Japan and 11% from Japan. Now moving to the income statement. As I have noted in the past, while currency does impact each P&L line, it has minimal impact on our operating margin performance as a result of our geographic diversification and systematic hedging program. Gross margin of 54.9% was essentially flat versus last year, while operating expenses were well controlled and increased only 2% year-over-year. Consequently, our Q1 operating margin of 19.2% was up 150 basis points versus the same period last year. By segment, EMG's operating margin of 20.6% improved 30 basis points over year-over-year. CAG's operating margin of 22.2% increased 350 basis points year-over-year, and LSG's operating margin of 14.3% was up 240 basis points year-over-year. Non-GAAP net income of $244 million or $0.69 per share compared to $212 million and $0.60 per share one year ago, an EPS increase of approximately 15% year-over-year. Turning to the cash flow and our net cash position. Total quarterly cash generated from operations was $150 million, up $30 million compared to the same period last year. During the quarter, we repurchased 1 million shares at a cost of $34 million. Our net cash position at the end of January was $1.6 billion, an increase of $135 million from the prior quarter and $1 billion higher than one year ago. Now turning to the guidance of fiscal year 2012. As always, our guidance assumes exchange rates as of the last day of the reported quarter. Although the just-released IMF worldwide GDP growth outlook of 3.25% is 25 basis points lower than the assumption in Agilent's previous revenue guidance, we are not revising the midpoint of our revenue guidance, except for the currency impact. We believe the most likely economic scenario is indeed a soft first half, followed by a stronger second half. We are projecting a fiscal year '12 revenue range of $6.92 billion to $7.02 billion, which is based on exchange rates as of the end of January. At midpoint, our guidance corresponds to a 4% growth in the first half, followed by a 6% growth in the second half, and for the full year, corresponds to a 5% year-over-year revenue growth or 6% in constant currency. For EPS, we are maintaining the midpoint of our prior fiscal year '12 guidance and narrowing the range to $3.13 to $3.23 based on $355 million diluted shares. The midpoint of our EPS guidance at $3.18 reflects 8% growth over our fiscal year '11 EPS of $2.95, which is consistent with a year-over-year operating margin incremental in the middle of our 30% to 40% operating model range. Finally, moving to the guidance for our second quarter, we expect Q2 revenues of $1.70 billion to $1.72 billion and EPS of $0.71 to $0.73. Year-over-year currency adjusted revenue growth at the midpoint will be approximately 2%, while the midpoint of our EPS guidance is essentially flat year-over-year after adjusting for the onetime benefit of the non-GAAP tax rate adjustment made in Q2 last year. With that, I'll turn it over to Alicia for the Q&A.

Thank you, Didier. Keith, will you please give the instructions for the Q&A.

[Operator Instructions] Your first question is from the line of Nandita Koshal with Barclays Capital. Nandita Koshal - Barclays Capital, Research Division: Bill, I was wondering if you could give us a little bit more detail around the communications end market. I think that was a bit of a surprise to us as well. Could you talk about some of the different pieces in there? Maybe geographically, what might be leading to your belief that this is more of a temporary slowdown as opposed to something more structural? William P. Sullivan: Right. Yes, it's a great question. And as you said, the -- we were surprised on the reduction in investment for test equipment, both the base station development as well as the component that go into the radio that eventually ends up into the phone. Our overall one-box tester that we use for cellphone testing was fine. So needless to say, Ron and Guy have done a lot of analysis, and I'm going to turn it over to Ron and Guy to give their color or commentary of what they're seeing and what they're expecting for the rest of the year. Ron? Ronald S. Nersesian: Thanks, Bill. As Bill had mentioned, the first part of the decline was due to the base station infrastructure build-out. And we saw the decline not only in the global suppliers, but also in the suppliers that are local manufacturers within China. This, we believe, is a pause in the marketplace as we have seen rapid growth over the last 2 years. But there has been a pullback during this most recent quarter. The second part of the slowdown is due to RF components, which get fed into the whole supply chain. And as you know, Agilent has a very, very strong position in base stations and a very, very strong position in RF components. And in both of those, our market positions are stronger in those 2 segments than they are in handsets. So that is why we believe it has affected our business. As we take a look at the forecast going forward, the deals that we have in the funnel, the discussions that we have with our customers and the economic outlook, we've gone to a conservative estimate of 2% revenue growth for the rest of the year, which correlates with the $3.18 that Didier had mentioned earlier. Guy, would you like to add any other comments?

Thank you, Ron. I would just add that yes, China has been the place where we've been exposed the most with this trend on the base station and the suppliers for base stations. Going forward, we believe that base station and ecosystem for this industry will probably stay slow, while the handset R&D and manufacturing and their suppliers should keep going as planned. William P. Sullivan: And I'll put one additional comment on this. And again, for us having a quarter that goes from October to January, any time Chinese New Year is part of this quarter, we can have surprises over the decades. Fortunately, Chinese New Year is only every 4 years. It's the same quarter as Christmas. So maybe Guy, you could comment on what the outlook's like in February since everybody has returned back to work in China and the rest of the Chinese part of Asia Pacific.

Yes, Bill. I would just basically restate that we have seen so far February being on track with our expectations. And as I mentioned, base station and the supply chain for base station would probably stay slow for the rest -- at least for a couple of quarters, with the handset part getting back to -- on track. Nandita Koshal - Barclays Capital, Research Division: Okay, that's very, very helpful. And maybe Didier, just a quick one on the LSG and CAG side. You've talked about investing in the Varian business in the past. And at one point, you mentioned it was breakeven. When can we start to see some of that leverage come through and maybe some of those investments start to roll off?

Yes. I mean, we -- as you know, we don't anymore present the Varian separate from Agilent. We're just one company. And you've seen -- you've heard like the operating margin improvement significant that both CAG and LSG have demonstrated on a year-over-year basis, which were, I would say, spectacular. This is, for a good part, the impact of the work that has happened in Varian. And it -- this -- we still have some way to go. We've talked about generating $100 million of cost synergies over 3 to 4 years. The first year was mostly around the SG&A. We are now showing the synergies -- starting showing the synergy on the cost of sales. And I'm sure we'll get a chance to talk more about the actions that we are taking. William P. Sullivan: And again, as we have said, both Mike and Nick and their teams, we're in the process of essentially turning every platform that we received through the Varian acquisition to ensure that we have not only a platform that is highly competitive from a measurement standpoint, but also will be able to be manufactured at much lower cost. Unfortunately, that can take easily 2 to 3 years to make that transition.

Your next question is from the line of Jon Wood with Jefferies. Jon Davis Wood - Jefferies & Company, Inc., Research Division: Bill or Ron, I should know this, but I'd like some perspective on if the RF components related weakness, is that a channel phenomenon, meaning sell in and sell through, or is that a direct piece of business? I'm just looking for if -- we've heard a lot about distributor inventory destocking in China, and I wonder if this is part of that, or is this completely separate? Ronald S. Nersesian: No, this is typically a direct sell through, whether the RF components that are used for handsets or the RF components that are used for base stations. William P. Sullivan: But if there is, in fact, an over inventory situation in the channel, obviously people are not going to put in on additional capacity. And that's the big wild card. By definition, as you manage through any inventory adjustment, people will put in additional capacity on the manufacturing side. How much of it was just a disruption as an artifact to the quarter, how much of it is an oversupply of components in the channel. Because not only are we not talking about power amplifiers, we're talking about filters. We're talking about capacitors. We're talking about PC boards. I mean, there's a whole -- all kinds of bits and pieces that go into a radio module just on the handset. And obviously, there are a lot of similar components that go into the base station. Jon Davis Wood - Jefferies & Company, Inc., Research Division: Understood. So Bill, basically this happens when a phone manufacturer takes down their unit forecasts and therefore, they have to work off whatever they -- so basically, excess versus their prior forecast. Is that basically the effect we're talking about? William P. Sullivan: Well essentially, absolutely. The overall demand on the end products is going to affect the supply chain. Typically, as you know in the semiconductor industry, the supplies always tend to get ahead of the overall demand. What has been difficult is we've had 2 natural disasters over a relatively short recent period, right between earthquake and flooding. And so I think in my own opinion, being an old semiconductor guy, that's why it's been so hard to read the semiconductor supply chain right now. As you know, the SIA forecast and some Varian organizations are believing that we're in a pause period, and we'll improve in the second half. If that's the case, then just like we said, everything will be fine. But the signal and noise ratio right now is pretty high. Jon Davis Wood - Jefferies & Company, Inc., Research Division: All right. I appreciate that color. My follow up for Didier, I think you mentioned the -- you burned all of the backlog in the first quarter in EMG, but it looks like the difference between bookings and revenue is only about $20 million, and I thought that number was 50. So any commentary around or color around that would be great. And I just want to make sure, EMG for the second quarter is below 2% growth, is that right? And it basically accelerates in the back half in your guidance?

Accelerates a little bit in the back half, yes. But it's -- yes, it's still a positive growth in the second quarter, accelerates slightly for the second half because we are talking about 2% growth for the 3 quarters. Not much -- and not an enormous acceleration in our conservative forecast, as Bill mentioned. So on the first question, Jon, I mean, if you look at our EMG backlog since in the last 3 quarters, it has come down $68 million in the last 3 quarters. And so we believe that we are now -- we have the right level of backlog. There's no more capacity constraint as we have experienced. There's always adjustments. Probably, the hardware component of the backlog will come -- probably come down further, but then the software component will increase. So net-net, I think that the best assumption is that we are now at a level of backlog that is not hampered by any kind of capacity constraints and therefore, anything that had to be shipped has been shipped.

Your next question is from the line of Tycho Peterson with JPMorgan. Tycho W. Peterson - JP Morgan Chase & Co, Research Division: Just wondering, either Bill or Didier, if you can give us a little sense of how trends progressed throughout the quarter? Was the communications drop-off largely a trend you saw in December? Or could you just give us a little color as to how things progressed throughout the quarter? That would be helpful. William P. Sullivan: I'll have Guy answer that question.

Yes, we did -- the communication drop-off really happened end of December. We -- early December, we were pretty confident on what we were seeing still, and it happened end of December and then across January, with end of January being stronger again. Ronald S. Nersesian: Yes, a point to mention is that a significant portion of the orders were acquired right at the end of the quarter, so we typically see this type of pattern when people are holding on to purchase orders and they're delaying the capital purchases. So the last week of the quarter was a higher percentage of the quarter than we typically see. Tycho W. Peterson - JP Morgan Chase & Co, Research Division: And is this changing your way in terms of thinking about cost structure at all? In other words, do you have to step up investment here or alternatively pull back a little bit in light of the communications drop-off? William P. Sullivan: Yes. From my opinion, it's too early to tell because right in this period of time, you had a major shutdown similar to what happens here at Christmas. And so I think the signal noise ratio is high enough. We have a very good record, strong record of reacting quickly. But given what our outlook is, the forecasts we have, we can still make our commitments moving forward. And so we're going to not have any major change to our investment strategy. Tycho W. Peterson - JP Morgan Chase & Co, Research Division: Okay. And then last one. I guess, as we think about kind of your capital deployment strategy, obviously, you announced the dividend. Should we still think about you trying to repatriate some cash this year? I think it's about $500 million later this year. And should we expect you to prioritize Life Sciences within the M&A strategy? Or how do we think about your priorities? William P. Sullivan: They have not changed at all. You should expect the $500 million at the end of the year. You can tell by the 2 of the acquisitions that I highlighted in my comments that Life Science continues to be our #1 focus, and I asked everyone to write their congressmen to hopefully get a change on the way foreign profits are treated by the United States government.

And cash repatriation has no bearing on the -- our capacity to make acquisitions. So we are not limited because we -- the cash is here or there. Acquisitions we can fund one way or another. And so cash repatriation would be potentially just in terms of capital return but has no impact on our willingness and our ability to make acquisitions.

Your next question is from the line of William Stein with Credit Suisse. William Stein - Crédit Suisse AG, Research Division: So I just want to start again on the comms business. Actually, the statements about base stations weren't very surprising. I think it was not too dissimilar from what we heard from Aeroflex, Danaher, and National Instruments as well. But on the RF component side, it's a little surprising. And I'm just wondering if you think there's any competitive issue in that market for you. William P. Sullivan: Not whatsoever. It's right in our wheelhouse. But again, I'll have Ron and Guy comment on that. Ronald S. Nersesian: No, I don't believe there is. We're on top of these customers. As a matter of fact, the customers that did not purchase or that declined, we're working on them right now and working on deals that will close as we go forward as opposed to business that has transferred to any other supplier. William Stein - Crédit Suisse AG, Research Division: Great. And we've talked a lot today about this incrementally weaker outlook in the EMG segment, in comms and RF components. When we look at Q2 coming in a little lighter than I think what the consensus expectation was on the top line, is any of that coming from the other 2 segments, or is that all in EM? Ronald S. Nersesian: We have -- when we take a look at all the segments, we saw aerospace defense come in stronger than we had expected at first, and again, the signing of the bill by Obama at the end of the year has helped us, and we've seen some money flow up. So that segment appears to be strong. Our industrial segment also appears to be strong. We do take a look at what our order rate is in the previous quarter and what is shippable, so that has an effect on the seasonality of the revenue that goes -- that comes out the following quarter. William Stein - Crédit Suisse AG, Research Division: I appreciate that. What I was really going for is, are either the LSG or CAG segments incrementally weaker for the quarter relative to the back half? Are either of those pausing as well similar to this comps in market? Michael R. McMullen: Tycho, this is Mike McMullen. Let me just make some comments... William P. Sullivan: [indiscernible]. Michael R. McMullen: Sorry, sorry. My apologies, Will, sorry -- comments on the Chemical Analysis side, we are right on the -- our order expectations for Q1, and we're right on the outlook for Q2. So we're right on where we want to be. William P. Sullivan: Nick? Nicolas H. Roelofs: Yes, well, we're seeing some pretty good strengths. Q2 is always a little soft for us. But we saw a lot of strength. As you saw, the Pharma market really pulling strong, as well as academics. So we're not looking for any big pauses. William P. Sullivan: Yes. If there's any message, even though we -- obviously, the guys have an easier compare because of the Varian's miss of $30 million of revenue a year ago, even if you factor that out, our analytical business continues to be very, very strong. The story here of the quarter is we had a surprise in communications. That surprise, based on our forecast, will not have an impact on the midpoint of our EPS guidance for the year. Nicolas H. Roelofs: Yes, it sounds like you're doing better than many of your Life Science counterparts so I appreciate the details.

Your next question is from the line of Derik De Bruin with Bank of America. Derik De Bruin - BofA Merrill Lynch, Research Division: So the -- you're looking for 2% local currency growth at EM. Could you remind us what the LSG and CAG outlooks are for the rest of the year, or how you're factoring those in?

Yes, so for -- it's about close to 7% for the whole -- for the remainder of the year for BAM. Derik De Bruin - BofA Merrill Lynch, Research Division: Okay. And I guess your commentary, the academic markets have been strong. Was that still -- is that both U.S. and Europe, or is that mostly -- or is that still mostly Europe as we saw last quarter? William P. Sullivan: Nick? Nicolas H. Roelofs: Yes. Actually, the strength was pretty good across the board. Europe was a solid number for us, solid single-digit, and we had double-digit growth in general across the board as the LS total and academics mirrored that, obviously, they weren't double-digit, but they mirrored that regional distribution. So we saw pretty good strength. U.S. still a little bit softer than we had hoped, but as most of you guys saw last 48 hours, Obama put through a proposal for a flat '13 NIH budget. So a lot of optimism because that was the nervousness. So we'll see how that translates in orders, that 48-hour-old comment. Derik De Bruin - BofA Merrill Lynch, Research Division: Well, I don't -- I mean, just from -- certainly from our Washington consultants, it doesn't sound like that there's much hope that, that whatever Obama put forth is going to last and survive whatever Congress decides to do with it. So that may be a little optimistic. On the rest of the end [indiscernible] communications, so I mean are there any signs on the industrial that things are coming in a little bit -- are starting to turn there? And/or are you going to be a little bit softer here? Are you getting any hints at all? What I am getting for is that are we potentially looking for a surprise on the industrial side? William P. Sullivan: The industrial side was incredibly strong. It was pulled down, as we said, on the comms and the semiconductor side. The industrial part of our business was well above expectations, and again, I have Ron and Guy make some comments about where we're getting the strength on the industrial side. Ronald S. Nersesian: So on the industrial side, we have a very broad portfolio that plays into the different marketplaces. And that we saw that and we had double-digit growth in that segment this quarter. So things look very, very good in that area. Automotive is a place where we have seen some strength, and I'll let Guy make any other comments.

Yes, and I would say our overall industrial computer and semiconductor was up 6% in Q1. We see this ease down, obviously, to -- as we say for EMG, at 2% total for the rest of the year. Some of the very strong business we got, for instance, both test activities were very good in Q1 and also some very good automotive business. Ronald S. Nersesian: The double-digit number I was referring to was just the -- was the industrial sector where you asked the question.

Your next question is from the line of Jon Groberg with Macquarie Capital. Jonathan P. Groberg - Macquarie Research: Just one kind of clarification. If we think about China, we've heard from a number of companies within the Chinese area where things seemed to have slowed. I know you had the New Year issue, but how are you thinking about just kind of the overall business in China, and I guess in particular, a little bit more on the EM side since there's a little bit more exposure there? William P. Sullivan: Yeah, I think the best one overall, I mean, I think it's well documented that the electronics side in China has got pressure on it. And the good news is, is that our analytical business both in Chemical and Life Science continues. But I'll have each of the 3 group presidents give a comment of what their outlook -- what they're seeing in China specifically. Guy?

Well as you know, China has been very strong for us for the past years. And we see China very related to the comms' overall activities, both on the base station and handset. So we will see a slowdown in China compared to what we have seen in the past years. William P. Sullivan: Mike, for Chemical? Michael R. McMullen: Yes, outside of the discussion earlier about the pause at the end of the quarter because there was nobody in the office for 2 weeks to take orders, the overall markets still remain very robust and strong in Chemical Analysis business from the food marketplace to chemical and energy, environmental and forensics, so very strong demand. And the comment that was made earlier from Guy in terms of the start to the quarter, we're also seeing a very strong start in China as well this year, so -- in Q2. Nicolas H. Roelofs: And I'm just going to echo Mike's comment. I mean, no real change in trajectory. A lot of investment in Life Science, both the academic and therapeutic levels, and we did see the Chinese New Year effect, and we did see some strength in the last couple of weeks as those orders start coming back in. Jonathan P. Groberg - Macquarie Research: And then Bill, maybe just a broader question for you. If you think about that Electronic Measurement business, some peers of yours will -- even though they're not seeing things slow at the moment, will look at macro indicators and PMIs, whoever, and will forecast the business just based on that because they know how cyclical or how tight it is to those markets. Is there any -- does it make more sense maybe for you to -- instead of just looking at the current momentum in the business, but maybe to look at some of those macro factors and use that in forecasting your outlook for that business? William P. Sullivan: Well, we do. And it's no secret that our correlation in the past to SIA, which we don't like to talk about as much, and of course PMI, we know exactly what the correlations are in order to do that. But at the end of the day, it is -- we have thousands of sales people that are out there with customers and we know what the overall macro environment is, but there are just deals that are going down. And if we get there first and have a better solution, we can sometimes offset some of the macro trends. But we do exactly as you suggest. And obviously, when Guy goes to Ron with his overall proposal to grow, we know what that macro environment is. We have a very detailed analysis to understand where the competitors are, where the competitors are strong, where they're weak. But at the end of the day, we have to assign orders quotas to thousands of people, and it is very, very bottoms-up detail of what we can do.

Your next question is from the line of Ross Muken with Deutsche Bank.

This is Vijay in for Ross. Could you comment on the strengths seen in Pharma? What is driving that strength? What are you seeing in the HPLC? How sustainable, I guess, is this strength going forward? William P. Sullivan: Nick? Nicolas H. Roelofs: Yes, Vijay, a really good question. We continue to be on the same theme, which is we see a technology upgrade going on and we see an acceleration of the replacement cycle. We're about halfway through that acceleration of replacement cycle that we've been seeing and talking about, and that's a big driver. A big surprise in a good way to us was the strength we saw in European pharma. So not only the 18% overall macro, but Europe was very solid. And that speaks to me as being a technology upgrade. We're seeing a lot of mass spec as well as LC going into European pharma. So we think that's a biomolecule investment lends, one quarter of pretty solid results on top of a pretty good secular.

Sure. And then maybe -- digging on an earlier question on -- in dividend policy, could you walk us through the rationale behind sort of initiating a dividend policy. What was the thought process? William P. Sullivan: Well, the thought process was very, very straightforward. As you know, we have a substantial amount of cash. Most of that cash is trapped outside the United States. We are absolutely committed to being a high investment-grade company, so we're not going to borrow against that money to return cash back to the shareholders, even though we have a long history of already buying back $8.5 billion worth of stock. Our number one priority continues to be in acquisitions, but we are a conservative company, and we will not make an acquisition that we can't get back our cost of capital. So in this environment, what would it take to attract new investors? There is a growing segment of investors who are demanding to have some sort of dividend being paid for them to be able to invest in a company. 400 of the 500 S&P 500 companies today all pay a dividend. And so as you go through that rationale and environment that I believe will continue to have low interest rates by paying a dividend opens up the potential for investors to buy Agilent stock, and obviously reward the existing shareholders with a dividend and payback that is very measurable and not at the mercy of a buyback.

That was very helpful. And maybe if I could squeeze one last one in and apologize if this has been asked. Did the Chinese New Year have any impact in the quarter either on orders or revenues? William P. Sullivan: Did it have an impact?

Yes. William P. Sullivan: Yes, we -- well, sure it had. You can't shut down, as Mike said, the last 2 weeks of China and not have an impact. That was in our forecast, right? We knew this. Every 4 years, this event happens in our Q1. The analysis we do just from the surface believes the impact was one point delta, right? But it's hard to tell because behavior changes. If you're going to shut down, why am I going to take the delivery if I don't need it? Do I need the components or -- because we do the same thing in our own factories. And so it's a very difficult event for us to fully quantify. Over the decades, Christmas, you know exactly what happens in the West at Christmas during the December time period. We know what happens on Chinese New Year. When they're both together like that, it's always interesting for us. But given the shift of our business into more countries that celebrate the Lunar New Year, we just have more -- a little bit more volatility when we have this event that shows up every 4 years.

Your next question is from the line of Richard Eastman with Robert W. Baird. Richard C. Eastman - Robert W. Baird & Co. Incorporated, Research Division: Just a question perhaps for Ron. When I look at the EMG piece of the business, and where drops -- we dropped the sales growth expectation from 4 to 2 for the full fiscal year. Is the majority of that or is all of that decline really calculated based on your current expectations for the communications business? As we basically have a very good quarter in general purpose and Mil/Aero, is the outlook for those 2 pieces of the business relatively unchanged?

Well, I would just start by saying that one percentage point of the delta is currency related. So volume-wise, you're talking about one percentage point reduction. Go ahead. Ronald S. Nersesian: Although we saw the aerospace defense business being strong, we have not expected it in our forecast to be as strong as it was in Q1, and the same thing with regard to the industrial market. So the other markets we've left relatively flat or relatively conservatively, and we've adjusted the communications market as we have spoken. So... Richard C. Eastman - Robert W. Baird & Co. Incorporated, Research Division: Are you willing to admit to some share gains on the handset side? Ronald S. Nersesian: I don't think that that's something that I have concrete data on, on the handsets. I know on the base station side, the component side, we're very strong, and we have grown faster than the competitors in the last 2 years. But on the handset side, I think there's a couple of good competitors that we're fighting toe-to-toe with. And it's going to continue that way for a while. Richard C. Eastman - Robert W. Baird & Co. Incorporated, Research Division: Okay. And then just a last question. When I look at the volumes and the expectation for EMG's sales growth for the balance of the year, it's -- are there any significant puts and takes at the margin line? Or is the operating margin for EMG likely to settle in here plus or minus a point, I guess, with sales mix? Ronald S. Nersesian: We're committed to the 30% to 40% incremental model that Agilent has. EMG has been at 40%. And even this quarter with the communications surprise, we delivered a 58% incremental. So we feel very comfortable that we're running the business very efficiently and effectively given the macro situation that goes on. And I don't anticipate any major changes from the path that we're on to deliver to our model.

Your next question is from the line of Doug Schenkel with Cowen and Company. Doug Schenkel - Cowen and Company, LLC, Research Division: Actually, maybe a follow up to that last one, very specific to fiscal Q2. When I play with my model a bit, if I take my EMG down to levels you described -- my EMG revenue growth down to levels that you described in your prepared remarks, it doesn't -- it looks like you guys are actually building in an incremental that's much lower than the norm. I know over the course of year you're expecting to stay in the normalized range. But I guess what I'm getting at is if I take my EMG number down, if I don't take my incremental down in that group, it's -- I have a hard time getting to your EPS number for the quarter. Any chance you could provide your assumption for incremental in EMG for Q2?

Yes, I'll take that question, Doug. This is Didier. When Ron talked about committed to the operating model, the operating model does show that below sudden revenue growth, you do have decremental, not incremental. EMG did a fabulous job this quarter delivering stronger operating margins on very small top line increase and huge incrementals. I would consider that to be exceptional. In Q2, there is no doubt that as we envision the 2% revenue growth, the kind of incremental that our model delivers normally, you would have a decremental. We will have an incremental, but it's going to be a very small incremental. And again, totally in line with the operating model. With 2% revenue growth, it's a different story than the 4% to 10% that we had talked about. But -- so there will be a small incremental, but certainly not in the 30% to 40% range considering the -- only a 2% revenue increase. William P. Sullivan: And this is -- I'll add. And we had got a previous question, are we planning any cutbacks? We have quite a few product launches in Q2, particularly on the analytical side. And we have made a decision given the situation in communications and anomaly, how quickly will the -- or how long will the pause be. We're going to continue and stay the course through Q2, get the products out moving forward. As you said, over the year we'll look fine. But I think doing something dramatic in Q2 across the company, and particularly given how strong the analytical business is, wouldn't be a prudent decision. Doug Schenkel - Cowen and Company, LLC, Research Division: Okay, now that's very helpful. A higher-level guidance question. You've guided for stronger growth in the second half versus the first half. Is this predicated on improvement in the economy, or is this just largely a function of comparisons?

There is no doubt that all the economies that we follow and track do anticipate a small improvement in the second half. If I recall the numbers last that I've seen on average, the expectation is that the worldwide GDP will grow about 3% for the first half, but more like 3.5% in the second half moving towards 4% in the first half of the following year. So there is a little bit of tailwind coming from the macroeconomic situation. We also have much easier compare. I mean, like all the talk we've had about communications, for example this quarter, last year, communications improved 45% year-over-year. So our compares vary in Q1. Our compares in Q1 and still Q2 are very challenging. They get much, much easier in the second half. So that's also something to take into account. Doug Schenkel - Cowen and Company, LLC, Research Division: Okay. And if I could sneak in one more, another question on Lunar New Year. I know it's always tricky for you guys to forecast when this happens when it falls in fiscal Q1. But would -- my guess is you can't quantify the impact exactly, but could you at least say whether this was close to -- whether it came -- whether the impact was close to what you had planned for and how the more favorable comparison in fiscal Q2 comes into play? William P. Sullivan: Yes. And again, like I said, I don't want to use the Lunar New Year as an excuse whatsoever. We knew this was going to happen, we made our forecast and we're off by effectively a point. And now that's shame on us to able to make that happen moving forward. And as we said, it appears things are going back to normal in Q2. I mean, it's our responsibility to forecast that. There -- it's just difficult to know exactly what is going to happen, and then you couple that with well-documented event, particularly in the comms side that there could be a build up of excess component capacity. So how much of that is just purely adjustment of inventory, which has got to be most of it, how much was it just the behavior because you had a major holiday in January. And it's -- quite honestly, it's hard for us to know exactly what the answer is. But we obviously missed what the expectation was based on absolute demand in the component side of RF, as well as the infrastructure.

And your next question is from the line of Paul Knight with CLSA. Paul R. Knight - Credit Agricole Securities (USA) Inc., Research Division: Bill, could you talk about the market for LC/MS, where we are in the conversion rate to high pressure, the color in those markets? William P. Sullivan: Sure, I'll have Nick answer that question. But as you can tell, we continue to do very, very well in this market. Nicolas H. Roelofs: Yes. And Paul, just for clarification before I answer, are you talking about LC, or you're about LC/MS because you said LC/MS? Paul R. Knight - Credit Agricole Securities (USA) Inc., Research Division: Let's start with LC. Nicolas H. Roelofs: Okay, both. Okay. So let's start with LC. Yes, we are seeing tremendous demand for the UHPLC method. And therefore, we're seeing more than 50% of the units going into the market being UHPLC capable. And that, by the way, is both an Agilent statement and a market statement. So while we still see a lot of people on the old methodology, they're buying UHPLC-capable machines, we think this continues to be a really strong technology upgrade vector. It's the comment I was making earlier about technology upgrade in pharma even in Europe going on. So a really strong market. That market is probably growing in the upper-single digits, and we're doing a little bit better than market, so we're pretty pleased with our stronger upper-single digit growth there. In the case of the mass spec market, tremendous technology waves going through not only to Life Science-specific customer sector, but also in the applied markets like food and environmental. And so we're seeing a lot of strength. We had very, very solid double-digit growth in mass spec for the quarter in revenue and really nice momentum going forward. So that also is seeing a technology push at the triple quad and multi-sector end of that market, Q-TOF as well. Paul R. Knight - Credit Agricole Securities (USA) Inc., Research Division: What do you think all of the sequencing activity occurring right now mean for Agilent? Nicolas H. Roelofs: Yes, sequencing is a great question. We're in that market, not in a box. And right now that's a good thing to be, is not in a box. We are in the reagents that go in front of the sequencers. We think there's a lot of installed sequencing capacity at the gigabase large center world. We see a lot of installing of instrumentation going in the personal sequencer world, and both of those things are really positive for somebody who is in genome partitioning because we think the personal sequencer world is definitely going to be dominated by partitioned genome subsets and kits. And we're seeing the gigabase world start to talk more about exome rather than whole genome. And you've heard the big box guys make comments just recently on how their new boxes are going do exomes fast. You're starting to see actual data in their marketing speak or from the 2 big CEOs in this space about how they can do so many gigabases or so many exomes. So we're pleased to see that, that terminology is getting into the market.

Your next question is from the line of Mark Douglass with Longbow Research. Ronald S. Nersesian: The oscilloscopes play not only into the industrial market, but they also play into the computer market. So we don't give those stats out on a quarterly basis as our competitors eagerly wait for our announcement, but we have a very solid product line in that area. And we're very happy with the share gains that we've made. Ronald S. Nersesian: We've done a very good job, and we've gained share at the low-end and the high-end, if you look at the macro trends over multiple years. In any quarter or any period, someone could claim that they've done a little better or a little worse depending on what they shipped and what the flow through and what went into distribution. But our gains in oscilloscope market share have been second to none for all the product lines we have in the company.

Well yes, I'll take that one. So at constant currency, the Americas in terms of revenue, yes, grew 3%. CAG and LSG had phenomenal growth and EMG had a decline. Ronald S. Nersesian: The Americas was the only region that EM had a revenue decline. William P. Sullivan: Absolutely.

Interestingly, just to complement also, order-wise, to be precise, EM had a 6% increase in orders for the Americas. So I mean it shows it is sometimes -- things are going to be a little bit lumpy. Ronald S. Nersesian: Especially when you play into the aerospace defense market where you see a difference between orders and revenue.

Yes. Ronald S. Nersesian: It explains part of it. Ronald S. Nersesian: No, there were 2 areas that were particular. There were base station manufacturers in Europe that we saw some weakness and then obviously, the one in Asia. So primarily, the weakness that we saw in base stations was in Asia followed up by Europe. William P. Sullivan: In fairness, the absolute correlation between where the order gets made and the revenue gets made and delivered, I would tend to look at these as macro trends from the region to deep down by region in the product line is highly problematic given how global procurement is done in this world today.

All right. Your next question is from the line of Isaac Ro with Goldman Sachs. Isaac Ro - Goldman Sachs Group Inc., Research Division: I think the EM and the Life Science product cycle stuff is relatively picked over. So I did want to spend a moment on the diagnostics initiatives you mentioned in the prepared remarks. And specifically, what are some of the next steps that you guys are sort of working on for product development in that area? And then, maybe what kind of investments you need to make at the margin for channel development as you move forward this year? William P. Sullivan: Good. I'd have Nick give an update. And again, we're going to go in a lot more detail in our Analyst Meeting next month. But Nick, why don't you kind of give an overview of where we are? Nicolas H. Roelofs: Yes. Well, thanks for the question, Isaac. And as Bill said, we'll try to give you a lot of detail on the 8th of March. But yes, basically I remember that this is still a small piece of Agilent where we're just dipping our toe in the water here. We've registered factories, as you've heard a couple of quarters ago. We've now registered a couple of critical product lines with U.S. FDA. We're continuing to produce a few things in the side of genetics area that we're talking to the FDA about as well, and our reagent consumables side. Those will be micro arrays. We do not yet have a big push here. We do not yet have a big significant presence in regulatory or clinical trial management. And so those are elements that we'll need to work through, and those are elements that are gaps not to mention, as you pointed out, how do we get to the customers and how do we educate the doctors, and those that where we're off in reimbursement is something we're also aware of. William P. Sullivan: And as you know in the last 7 years, mostly organically, we have really built up our Life Science capability. That was task number one. During the course of that, we had brought in house the reagents capability, automation capability, the recent announcements that we made this quarter. And so we are putting all the pieces together. As you know, we're inherently an organic growth company. Moving forward, we're obviously going to look at ways to be able to accelerate Nick's success through additional acquisitions. But I believe that our Life Science base is solid, and the diagnostics is the most -- next logical place to put our toe in. Isaac Ro - Goldman Sachs Group Inc., Research Division: Sure. Yes, that makes a lot of sense. If I could just follow up with another thought there. If I put the comment you just made on the acquisition path in context with the dividend and all that, I think we can all agree that some of the diagnostics assets that we've seen trade in the last couple years have gone at pretty interesting premiums. So is it fair to say that if you guys find assets that you find interesting in diagnostics, you might be willing to take a longer horizon for your return hurdles that you might have also in the business? William P. Sullivan: We will not make a bet that we don't have high confidence that we can get a return in the lifetime of our shareholders.

And your final question is from the line of Ajit Pai with Stifel, Nicolaus. Ajit Pai - Stifel, Nicolaus & Co., Inc., Research Division: Yeah. So 2 sort of broad areas, I think I'm curious about. I think the first is just looking at Electronic Measurement business. And the source of weakness there, I think, one of the areas you highlighted was components in the wireless. So my understanding at the point at which you spun out your Semiconductor Product Group into Avago was that the vast majority of the components business, especially into handsets went out of that business, but you mentioned not just infrastructure components but also power amplifiers, just partly the things like that on your commentary today, I think, or during the Q&A. So can you give us some color as to what is the component percentage of that business right now and what the strategy is? And whether you are actually competing with Avago in that business, or you're still focused on primarily the infrastructure side. So that's the first sort of broad area of questioning. William P. Sullivan: Yeah. Just first of all, we're not making any comments about Avago. Avago does, in fact, supply RF components into the handset market moving forward. We've been very clear. We believe the handset test market is 25% of the total market. The other 75% is all related to the components that go into base stations and components that go into handsets. That's what we're talking about. The biggest impact is in the smaller components that go into handset. Obviously, when the infrastructure base station people cut back, that's going to be impact to that component supply chain. But the component supply chain going into handset is dramatically bigger, and that is where we saw the impact. Ajit Pai - Stifel, Nicolaus & Co., Inc., Research Division: Yes, but we are seeing it only from the test side over there. It's not components that you're selling into the market.

[indiscernible] we're components business. That's what I thought you were thinking. So we're not competing with any of the guys in this thing. We're not selling components. We are selling test equipments. Ajit Pai - Stifel, Nicolaus & Co., Inc., Research Division: I know, I got it. Yes, so that's been a -- okay. So it's purely from the supply chain correction over there impacting demand for your test equipment, but there's nothing that you're selling directly into the handset? William P. Sullivan: Exactly.

No. Ajit Pai - Stifel, Nicolaus & Co., Inc., Research Division: Okay, got it. So I just wanted to clarify that to ensure that, that wasn't something that I missed out on. The second area is just when you announced the acquisition of Varian and you talked about the delta between the gross margin -- traditional Varian products and the Agilent sort of similar products and where they could be, there's about 1,000 basis points delta there. And you'd also identified opportunities for both your Life Science and Chemical Analysis business to shift production into Penang into your facility there, and get benefits from those businesses by doing that shift in production. Could you give us some color as to how much of that delta has been captured and how much more room is there over the next couple of years to improve those margins further and how much of the shift is still left in terms of production over there? William P. Sullivan: All right. Of the $100 million of savings, $35 million is in corporate overhead, and we have completed that. And you can see it in the -- our expense structure. The other $65 million is all in manufacturing. One point -- we will get one point this year. It's going to be back-end loaded. But we are going through and redesigning every one of these products. We're going to do it right. And we've been very clear it's going to take us at least 3 years to be able to get through this process. I have the highest confidence that we're going to do it, but we're going to do it right. Ajit Pai - Stifel, Nicolaus & Co., Inc., Research Division: Right. And in terms... William P. Sullivan: Mike has a comment, because he has most of the projects. Michael R. McMullen: I just wanted to maybe add some comments. We're right on our internal plans in terms of the product transfers and the internal gross margins, but also this -- a comment around the refreshing of the portfolio which will drive not only improved gross margin, but also improved market share. We've just launched a number of very exciting new products and we just actually finished up a division review with Bill, and these products are exceeding our internal forecasts. So the portfolio strategy is coming together as well. That will be my teaser for the March Analyst Meeting where we'll go in some detail. But we are right on our plans that we put together. William P. Sullivan: And just one example that we had on the AA, we introduced the world's first microwave AA that essentially will allow this instrument to be closer to some of the uses such as in mining, and not have to put it in an infrastructure to provide, for example, Argon gas. And here is an example where you spend money. Varian actually developed the work. They just didn't have the money and the opportunity to do it. We finished that up. It's been easy to tear their cost out, take their existing AA and just transferring it to Penang, but we're not going to take market share over time. That's our strategy. We've been very, very clear on that, and I have high confidence that we're going to make it happen. Ron? Ronald S. Nersesian: I also want to comment that we've announced a new OF organization or order fulfillment organization that is focused on getting the absolute maximum leverage out of Agilent. And that includes for instrument products, the building of our products, the logistics and the supply chain. And that is something that's brand new, and we'll be updating folks on March 8 at the Analyst Meeting. Ajit Pai - Stifel, Nicolaus & Co., Inc., Research Division: So it's fair to look at -- based on your commentary from the gross margins on the Electronic Measurement side that there is a potential for negative leverage as things go down, that the vast majority of sort of the efficiencies that when you gain by improving cost on the Electronic Measurement side are behind us, but for the Life Science and Chemical Analysis side, there is still very significant runway for margin expansion by reducing cost. Is that fair? William P. Sullivan: Absolutely, yes. We even talked about the NMR. NMR has got all kinds of opportunities.

And we actually have one more question. It's from the line of Daniel Silver with UBS. Daniel Silver - UBS Investment Bank, Research Division: So just a few quick ones just to clarify some things. First, following the comment that was just made about NMR, I think it's an interesting question there as it relates to kind of the margin trajectory at BAM at least versus my model. It was actually surprisingly strong, and we think about CA and what's going on at LS between the NMR investments, the Varian cost savings and the incremental targets. It'd be great if you could kind of walk through how you think about how the year progresses in light of the costs and I would say kind of below the COGS line? And I've got a follow up to that. William P. Sullivan: Yes, there's lots of parts to your question. So let me -- I think the easiest is just for me to give an example of what we're going to do then turn over to Mike and Nick to be able to -- how we balance the portfolio. Nick's example in NMR, Varian invented the technology, underinvested. The other guy's done a very, very good job. We're systematically going through and redesigning the console. It's already transferred to Penang, redesign the probes, try to optimize the magnet manufacturing. These are all the things, and Nick's -- in his past life was an expert in this space. And those are the type of things we're going to do. And so we have that impact to his operating profit number, and it's substantial. On the other hand, we know we can fix this. This is where the expertise of our Electronic Measurement Group comes in since it's an RF measurement. And we will do that and spend the time to be able to make that through. So Nick's getting an incremental, even though he's making this investment in NMR based on the benefit of the growth he has in the other products. So that's the example of things that we're trying to work through and that is consistent with our operating model that we have displayed, and we'll give an update next month. But again, we're really quite pleased with the progress we've made in terms of driving the top line growth, as well as making these ongoing investments, as well as the impact of the acquisitions which again, it's small numbers, but are non-trivial. So I'll have Mike and Nick give some comments. Nicolas H. Roelofs: Yes, Daniel, since that kind of gave the NMR an example, let me go ahead and give you one more layer of detail. I'll let Mike do the subsequent comment. Just to think about this, to redesign a product, you also move the supply chain, and you redesign the new product to include a supply chain that's based and leveraged. And it goes back to what we're trying to do here, Ron talked about and we'll talk about a lot more when we see you guys in March, centralizing order fulfillment centralizes our supply chain. I get the R&D team to design a new NMR probe or a new NMR magnet or a new NMR console and at the same time, we leverage the supply chain of a $7 billion company that's heavily Asia based and rapidly Asia moving. That's gets up front in the design. So all of these pieces interweave to really drive that gross margin element and the target is not to take the 10-point gap that was existent between Varian and Agilent and close that gap. The target is to take where Agilent will be in 2 years and drive Varian to that point, which will be better than where Agilent was by itself 2 years ago. Daniel Silver - UBS Investment Bank, Research Division: Well -- and if I could just hop in for a sec, I guess that speaks to the kind of the real crux of the question, which is when we look at the incremental targets that you guys have provided by segment, it certainly seems like at least given what we saw in BAM in 2Q -- or excuse me, in fiscal first, the run rate actually looks, all things considered, like you guys are kind of above plan overall. And if -- it would be wonderful, Didier, if you could kind of speak to the overall run rates. When we look at R&D on a sequential basis versus 4Q, I mean, that number has basically stayed flat for a while now, and SG&A barely budged. So I guess when investors think about the flexibility that you've obviously demonstrated, right, with EMG having a very strong incremental in the quarter, how do these numbers directionally move through the rest of the year?

Well, so -- and you can reconstruct that from the overall guidance I've provided. But yes, you will see as you do that, that BAM will have some really nice incrementals in the second half of the year. Ronald S. Nersesian: I mean, obviously, Didier, with the integrations behind us, we're in pure execution mode, and lots of things are going on relative to supply chain transformation. As Nick talked about the portfolio transformation, and in few quarters, you're going to continue to see -- if you look back, you're going to see these reflected as it flows through the systems in terms of continued improvement to our gross margins, so pure execution mode. William P. Sullivan: And I have -- and again to remind everyone, the call is at -- we have moved the company over the last 7 years to have a higher and higher percentage of variable cost, variable spending. And as we entered into 2012, we've raised the bar. Our goal is to have 21% of return on invested capital, now it's 25%. We have set the pay for all the executives at a higher growth rate than what we just said. So that obviously builds into the system lower expenses as we go forward. And that's factored in our guidance and factored into our confidence of why we believe that we can -- under the scenario that we gave, we can hit the mid-range of our EPS guidance.

Yes. I mean it's -- when -- to give a high-level view, and you can do reverse engineering of all the numbers I have given you. But on the midpoint of our revenue guidance, which is a 5.2% revenue growth, would generate for the company 36% incremental, which if you know our operating model, 36% corresponds to 8% revenue growth. So what is happening, a lot of the Varian cost synergies are starting showing up along with the benefits of the new organization. So this is a thing that adds fuel to the fire and explains why we are meeting the mid-range of our incremental guidance even on lower revenue. Daniel Silver - UBS Investment Bank, Research Division: That really was kind of the heart of the question. It certainly does seem like the savings are showing up and investors can actually see the leverage that you guys have talked about.

Thanks for giving me the opportunity to reinforce that point. Thank you. Daniel Silver - UBS Investment Bank, Research Division: And if I could ask one last follow-up, I think -- obviously, given all the focus that we've spent this call talking about comms, the various end markets, it's interesting because if we go back to quarter, we were all talking about the regional outlook and what was going on in Europe and how things were shaping up in the U.S. as it relates to academic and government. In this quarter, if my math is correct, it looks like Japan actually accelerated. Europe was a positive surprise, but the U.S. and China were a little bit weaker than expected. So how do investors think about the overall volatility given there is obviously kind of product and market noise, and then now it certainly looks like there's a regional overlay that is hard to kind of reconcile when you build it all up? William P. Sullivan: As I said, there is no lack of signal-to-noise ratio in this quarter. We have lots of good news, couple of surprises in there, different regional shift and again, I'm sure each of us on this call has a different opinion what's going on. But this is the challenge that corporate America corporations around the world have and trying to navigate a pretty complex set of markets by region and submarkets that we have. And then, of course, the performance of the company itself. So again, it's -- I don't envy the investors in trying to sort out exactly what's going on.

Yes, I think everybody has to go, so we probably need to close this off for now. So, Keith, I'm going to go ahead and just close and thank everybody for joining us today. If you have any questions, please of course give us a call and thanks again. Bye-bye.

Ladies and gentlemen, that concludes today's conference. Thank you for joining us and you may now disconnect. Have a great day, everyone.