Monique Dolecki Vincent A. Forlenza - Chairman, Chief Executive Officer and President Suketu Upadhyay - Acting Chief Financial Officer, Principal Accounting Officer, Senior Vice President and Controller Tom Polen - President William A. Kozy - Chief Operating Officer and Executive Vice President

Kristen M. Stewart - Deutsche Bank AG, Research Division Amit Bhalla - Citigroup Inc, Research Division David R. Lewis - Morgan Stanley, Research Division David H. Roman - Goldman Sachs Group Inc., Research Division Brian Weinstein - William Blair & Company L.L.C., Research Division Michael N. Weinstein - JP Morgan Chase & Co, Research Division Frederick A. Wise - Stifel, Nicolaus & Co., Inc., Research Division Doug Schenkel - Cowen and Company, LLC, Research Division Jonathan P. Groberg - Macquarie Research William R. Quirk - Piper Jaffray Companies, Research Division Derik De Bruin - BofA Merrill Lynch, Research Division Matthew Taylor - Barclays Capital, Research Division Peter Lawson - Mizuho Securities USA Inc., Research Division Jeffrey Frelick - Canaccord Genuity, Research Division

Hello, and welcome to BD's Second Fiscal Quarter 2013 Earnings Call. At the request of BD, today's call is being recorded. It will be available for replay through May 9, 2013, on the Investors page of the bd.com website or by phone at (800) 475-6701 for domestic calls and area code (320) 365-3844 for international calls using confirmation number 290460. [Operator Instructions] Beginning today's call is Ms. Monique Dolecki. Ms. Dolecki, you may begin.

Thank you, Katie. Good morning, everyone, and thank you for joining us to review our second fiscal quarter results. As we referenced in our press release, we are presenting a set of slides to accompany our remarks on this call. The presentation is posted on the Investor Relations page of our website at bd.com. During today's call, we will make forward-looking statements, and it is possible that actual results could differ from our expectations. Factors that could cause such differences appear in our second fiscal quarter press release and in the MD&A sections of our recent SEC filings. We will also discuss some non-GAAP financial measures with respect to our performance. A reconciliation to GAAP measures can be found in our press release and its related financial schedules and in the slides. A copy of the release, including the financial schedules, is posted on the bd.com website. Leading the call this morning is Vince Forlenza, Chairman, Chief Executive Officer and President. Also joining us are Suky Upadhyay, acting Chief Financial Officer, Senior Vice President and Corporate Controller; Bill Kozy, Executive Vice President and Chief Operating Officer; Tom Polen, President of Diagnostic Systems; and Gary Cohen, Executive Vice President. It is now my pleasure to turn the call over to Vince. Vincent A. Forlenza: Thank you, Monique, and good morning, everyone. As we've stated in our press release, we are pleased with our continued improved performance in the second quarter. Our results this quarter highlight the benefit of our diverse geographic and product portfolio. We delivered solid revenue growth, which were in line with our expectations. In early March, we acquired Cato Software Solutions, which manufactures a suite of comprehensive medication safety solutions for pharmacy intravenous medication preparation, physician therapy planning and nurse bedside documentation. The issue of medication errors is one of the top concerns on the minds of health care providers today. Cato provides automated system that creates and shares data to help reduce human error, streamline workflow and increase efficiency from medication preparation to delivery in both pharmacy and clinical drug delivery settings. Also in March, we announced BD's entrance into the generic injectable pharmaceutical industry. The FDA approved the first 2 drugs to be offered in the BD Simplist ready-to-administer line of prefilled generic injectables. The first BD Simplist product approved was Diphenhydramine, an injectable antihistamine. This product started shipping to customers in April. As we recently announced, the second drug approved was Metoclopramide. We expect that product to ship in the coming weeks. The launch of the BD Simplist product line and the acquisition of Cato demonstrate how we are continuing to invest in innovation, both organically and through strategic acquisitions. Cato and Simplist are highly aligned with our broader strategy of making health care systems more effective, efficient and safe. We continue to focus on medication error management and enabling safer more effective parenteral drug delivery in both hospital and pharmacy settings. Moving on to our financial results. Revenue growth in the second quarter was driven by our Medical and Diagnostics segments. Strong international growth overcame slower U.S. sales growth, which was mostly impacted by a timing of orders. We also continue -- we also saw a continued strong growth in international Safety sales and emerging markets. Based on our solid second quarter and the first half of the year, we are raising our previously communicated currency-neutral revenue and earnings per share guidance for the full fiscal year 2013. Suky will provide more details on guidance in a moment. On Slide 5, we've outlined our second quarter revenue and EPS results, which I will speak to on a currency-neutral basis. Total company revenues were solid, increasing by 4.1%. Fully diluted EPS came in at $1.39, growing at 7.6% over the prior year. Excluding the impact of the medical device tax, which went into effect in January of this year, adjusted earnings per share grew 11.5% in the quarter. Now I'd like to turn things over to Suky for a more detailed discussion of our second quarter financial performance.

Thank you, Vince, and good morning, everyone. I'd like to begin by discussing the key financial highlights for the second quarter. We delivered solid performance in the backdrop of a challenging environment. This demonstrates that we are continuing to effectively execute against our strategy. We have made targeted investments that are delivering consistent, improved results. We believe this is becoming evident as we make progress throughout this fiscal year. Revenue growth in the second quarter was in line with our expectations driven by new product sales, acquisitions and lower pricing erosion. As expected, growth was unfavorably impacted by tough comparisons and timing of orders. The medical device tax impacted SSG&A by about $14 million. This had a negative effect of about 4 percentage points on our operating income growth in the quarter. On an underlying basis, we are continuing to deliver operating margin expansion. Earnings per share were $1.39. This is slightly higher than the expectations we outlined for you on the call due in part to the timing of certain label expenses, which we now expect to occur in the second half of the year. Also during the second quarter, we completed an additional $56 million of our approximate $500 million share repurchase plan for fiscal year 2013. Overall, the health of our business is good, and we are on track to continue delivering accelerated revenue growth, underlying margin expansion and a higher quality of earnings. As Vince just mentioned, our year-to-date results give us the confidence to raise guidance on both our revenue growth and earnings per share. On a currency-neutral basis, our guidance range for revenue growth is increasing by 50 basis points. We expect currency-neutral earnings per share to increase by 100 basis points. I will provide further details later in my presentation. On Slide 8, I will review our revenue growth by segment on a currency-neutral basis. Revenue growth was 4.1% for the company. The impact of pricing erosion was about [indiscernible] points in the quarter, which was better than our expectations. BD Medical second quarter revenues increased 4.2%. The growth in this segment was driven by a broad range of new products across all 3 business units. Growth in Diabetes Care was 6.6%. This reflects continued strong sales of pen needles, which include our Nano and PentaPoint products. Medical Surgical Systems growth was 4.2%, led by emerging markets and international Safety sales. As Vince mentioned, we acquired Cato and launched our BD Simplist ready-to-administer prefilled injectables this quarter. Both Cato and Simplist will be recorded in the Medical Surgical Systems business unit going forward. These acquisitions did not have a material impact in the quarter, and we don't expect them to have a material impact on the full year. Pharmaceutical Systems growth was 2.4%. As we expected and communicated to you on the last call, this reflects an unfavorable impact from the timing of orders. BD Diagnostics second quarter revenues increased 4.9%. The segment's growth was driven by international expansion and new product sales such as KIESTRA and Veritor. BD Biosciences revenue growth was 1.9% versus the prior year period due to solid instrument placements in the U.S. and a benefit from the timing of orders in our Advanced Bioprocessing unit. Moving to Slide 9. I'll walk you through our geographic revenues for the second quarter. As we expected, softer growth in the U.S., primarily due to timing, was offset by continued strong international growth. BD's reported U.S. revenues increased 0.3% versus the prior year. We view the environment in the U.S. as constrained but stable. Revenue in our U.S. Medical segment declined 1.4%, which was largely driven by the timing of orders in Pharmaceutical Systems business. Additionally, our Medical Surgical unit was unfavorably impacted by a difficult prior year comparison with the PhaSeal product. In our Diabetes Care unit, revenue growth was unfavorably impacted by the timing of orders in our retail business and a tough comparison to the prior year. U.S. growth in the Diagnostics segment was 1.1%. This reflects strong growth of Veritor point-of-care platform, which was partially offset by unfavorable timing in the Preanalytical Systems unit. The segment was also unfavorably impacted by extended cervical cancer screening intervals in our women's health care and cancer unit. U.S. Biosciences growth of 5.8% was driven by continued strong instrument placements as well as the benefit from timing of orders in Advanced Bioprocessing. We remain cautious about the U.S. environment, specifically the impact of sequestration on research funding. This has been contemplated in our full year guidance. As I just described, growth in the U.S. this quarter was largely impacted by unfavorable timing. We expect growth in the U.S. for the total company to return to 2% to 3% for the balance of the year. Moving on to international. We continue to see strong growth. Revenues grew 6.9% currency neutral, with growth coming primarily from the Medical and Diagnostics segments. The Medical segment grew 8.2%, and Diagnostics grew 8.8%. This reflects strong growth in emerging markets and international Safety sales. Biosciences grew 0.2%, impacted by softness in western Europe due to austerity measures and the timing of government research funding in Japan. On Slide 10, we continue to see strong growth in emerging markets, which accounted for approximately 23% of total revenues. Emerging market revenues grew 13% currency neutral over the prior year. This was driven by good performance across all segments and regions with particularly strong growth in China of about 30%. We continue to expect low double-digit growth in emerging markets, and growth in China is expected to be in the 20% range for the balance of this fiscal year. Our success in emerging markets is driven by a number of factors, including BD's ability to design products for a specific market. We have had success with products like BD Emerald and Intima II, which are designed to meet the unique customer needs in emerging markets and are competitively priced. Moving to global safety on Slide 11. Currency-neutral sales increased 5.6% and grew to $514 million in the quarter. Revenues in the U.S. grew 1.6% while international sales grew 11.1% currency neutral, with western Europe and emerging markets both growing double digits. Medical Safety sales grew 9%, driven by a range of safety-engineered products, as well as the acquisition of SSI. Diagnostics growth was 2.4% in the quarter. Moving on. Since we've already discussed revenues in detail, I will never -- not cover Slide 12. Turning to Slide 13. As we expected and outlined for you on the last call, gross margin declined 30 basis points versus the prior year. Our performance in the quarter reflects benefits from ReLoCo savings, continuous improvement initiatives and favorable raw material costs. These items were more than offset by recent acquisition-related costs, pricing erosion and other onetime costs. Onetime items had an unfavorable impact on performance of about 60 basis points in the quarter. After neutralizing for these events, underlying gross profit would have been broadly in line with our full year guidance range. Slide 14 recaps the second quarter income statement and highlights our foreign-currency-neutral results. This is our fourth consecutive quarter of delivering solid underlying performance. Our results this quarter were overshadowed by some onetime events. As we discussed, revenue and GP were in line with our expectations. SSG&A increased about 6% due to increased investments in emerging markets, acquisition-related expenses, EVEREST and the medical device tax. The medical device tax favorably impacted SSG&A by 3 percentage points. R&D increased 4.5%. This remains in line with our expectations at 6.1% of revenues as we continue to invest in new products. Operating income grew 1.1% in the quarter. This was unfavorably impacted by the lower gross margins I just mentioned, in addition to the medical device tax. The tax negatively impacts operating income growth by about 400 basis points. Our tax rate declined 200 basis points, reflecting the benefit of the reinstated R&D tax credit in the U.S. We continue to expect our full year tax rate to remain in line with our previously communicated guidance range. In the quarter, earnings per share were $1.39, which is a 7.6% increase versus the prior year. Excluding the impact of the medical device tax, adjusted earnings per share for the second quarter were $1.44, which represents an 11.5% increase over the prior year. As we mentioned earlier, our year-to-date results give us the confidence to raise guidance on both revenue and earnings per share. Slide 15 illustrates our revenue guidance by segment. As you can see, we have increased our revenue growth expectations for the total company, which contemplates a stable environment. Our revenue -- our revised guidance of 4.5% to 5% reflects solid core growth, a benefit from new product launches and less pricing erosion. We now expect pricing erosion of about 50 basis points for the total year. The Medical and Diagnostic segments are expected to grow about 5%, and Biosciences remains unchanged at 1% to 2% growth. Moving on to Slide 16. I'd like to walk you through the various elements of our P&L guidance for the rest of the year. Starting with revenues, we are raising our currency-neutral guidance by 50 basis points. Reported revenue growth remains unchanged at 3.5% to 4% due to the weakening of the euro and the yen. This assumes a euro-to-dollar exchange rate of about $1.30 [ph] and a dollar-to-yen exchange rate of about JPY 99 for the rest of the year. Moving to gross profit. We have increased our range to reflect 51.6% to 51.8% of revenues. This reflects solid year-to-date underlying performance. We expect slightly higher SSG&A cost. Our new range of 25.6% to 25.8% of revenues reflects increased investments and strategic opportunities, such as our recent acquisition of Cato. Operating income is expected to be between 20% and 20.2%. This represents about 40 basis points of underlying margin expansion even after absorbing additional cost from acquisitions. We expect the unfavorable impact of the medical device tax to be about $45 million for the fiscal year. This represents a 300-basis-point impact to operating income and a 250-basis-point impact to EPS. This reflects our most recent thinking about the net impact of the tax. For fiscal year 2013, we expect earnings per share of $5.72 to $5.75. This represents an increase of 100 basis points on a currency-neutral basis. On a reported basis, this represents a 50-basis-point increase due to the currency impact I just mentioned. Excluding the impact of the medical device tax and foreign currency, we expect EPS to grow between 11% and 11.5%. This also reflects a 50-basis-point increase versus prior expectations. The increase in earnings per share is driven by stronger revenue growth, as well as better-than-expected results in interest income and other income. For the balance of the year, we expect our revenue and EPS profile to look slightly different than our historical performance. This fiscal year, we expect a stronger fourth quarter rather than the stronger third quarter performance we have historically delivered. Based on our EPS guidance of $5.72 to $5.75 and our year-to-date results of $2.74, we expect EPS for the remainder of the year to be more heavily weighted to the fourth quarter. Now I'd like to turn the call back over to Vince, who will provide a more detailed update on our progress around key initiatives. Vincent A. Forlenza: Thank you, Suky. Moving on to Slide 18. I would like to review the program and product launches in our Medical segment. As I mentioned earlier, we acquired Cato and launched the BD Simplist product line. For BD Simplist, we currently have 2 drugs that have been approved by the FDA. In addition to Diphenhydramine, we received FDA approval for Metoclopramide in April. We have 4 additional drugs in the pipeline at various stages of approval. In our Pharmaceutical Systems business, we announced the commercial launch of the BD UltraSafe PLUS Passive Needle Guard, which was from our recent acquisition of SSI. In addition to offering needlestick safety in an easy-to-use device, this product is enhanced with special features designed to facilitate comfort and support for health care providers and patients. This device is also designed to meet increasingly complex biotechnology drug requirements, including higher viscosity. This product nicely complements our current Safety portfolio. In our Diabetes Care unit, we continue to innovate with new products. We recently launched our next pen needle, the BD Nano with EasyFlow technology, which has [indiscernible] benefits. As you can see, we have continued to make good progress with our product portfolio in the Medical segment. Turning to Slide 19. You'll see the various product launches in Diagnostics. We've made significant progress with our BD Veritor system since it launched early in fiscal year 2012. In addition to receiving FDA clearance for our new Strep A assay in the quarter, we have placed more than 4,007 [ph] units of this system. We continue to broaden our customer base as well as capture share gains with this innovative point-of-care platform. On the BD MAX platform, as we've been communicating, we have built up a nice pipeline of orders, and we expect sales to continue to ramp up in the back half of this fiscal year. Shipments accelerated in the second quarter, and we have passed the milestone of more than 150 instruments now operating at customer sites. In April, we received FDA clearance for C. difficile, a key anchor assay that further strengthens our portfolio of assays for health care-associated infections, which also includes MRSA. Our enteric bacteria panel was also CE marked and launched, representing a new served molecular market for BD. This latest milestone demonstrates our commitment to rapidly expand the menu on BD MAX, offering laboratories a broad range of fully automated molecular tests that can meet both their current and future clinical needs. We also continued to receive very positive customer interest in our KIESTRA microbiology automation platform. KIESTRA is well suited to help our customers navigate through the challenges of health care reform globally with its ability to accelerate time to result and also significantly increase lab productivity. As an example, in April, we announced, with Canada's CML Healthcare Inc., an agreement for CML to install the world's largest KIESTRA microbiology automation system. This fully automated system will be installed later this fiscal year. On Slide 20, I would like to review the program and product launches in our Biosciences segment, which includes 2 analyzers for CD4 testing. We expect the FACSPresto, our low-cost analyzer designed for emerging markets, to launch in the second quarter of fiscal year 2014. This is 2 quarters earlier than our original expectations. Our FACSClearCount is currently on hold as we have other strategic priorities. We'll update you on our future plans to ramp up that platform. For the past 18 months, we've been reinvigorating the pipeline in our Biosciences business. We have some exciting new developments and continued enhancements to our Canto and Fortessa lines. Additionally, we have other new products that are in early stages, and we will talk about them in more detail as we make progress with [indiscernible]. We will continue to invest in this business in order to continue our expansion in this market and to drive future growth. On Slide 21, before we open the call to questions, I would like to reiterate the key messages from our presentation today. First, with our continued improved performance in the second quarter and our results year-to-date, this is our fourth consecutive quarter of solid P&L performance driving a higher quality of earnings. Second, we continue to demonstrate that we're making progress delivering against our broader strategy of making health care more effective, efficient and safe. The BD Simplist product line and our acquisition of Cato are good examples of this. And third, we are seeing continued success with our key growth drivers. We have made targeted investments that are yielding results, and we believe this is becoming even more evident as we progress through this fiscal year. Finally, we are positive about our outlook for fiscal year 2013. We're committed to delivering a 4.5% to 5% revenue growth and about 11% to 11.5% EPS growth, excluding the device tax and the impact of foreign currency. Our diverse product and geographic portfolio and the operational effectiveness programs we have in place provide BD with a strong foundation. We believe we're well positioned for continued success in fiscal year 2013 and beyond. So thank you. We'll now open the call to questions.

[Operator Instructions] Our first question will come from the line of Kristen Stewart from Deutsche Bank. Kristen M. Stewart - Deutsche Bank AG, Research Division: I just wanted to go back to the beginning because, I think, the line cut out at least on my side. You had mentioned pricing moderated, I think, the pricing impact on the quarter. Can you maybe just talk about what kind of gives you the confidence that price will continue to be more moderate through the balance of the year? Vincent A. Forlenza: So you're right, Kristen, and thanks for the question. It did moderate. And if you recall, it was -- the same thing was true in the first quarter of the year, so we've seen 2 quarters now where it was not as severe as we projected going into the year. We are not indicating that we're in an easy pricing environment. It's just not as difficult as it has been. Having said all of that, Europe remains a particular challenge, especially in southern Europe. But so far to date, with the trends that we see, we think it's just going to be somewhat less than our initial projections. Kristen M. Stewart - Deutsche Bank AG, Research Division: And what were the specific numbers in the quarter and your guidance again for the full year? Vincent A. Forlenza: Sure. Suky will do that for you.

Kristen, for the quarter, we said it was about 20 basis points, and on a full year basis, we're saying it's about 50 basis points. Kristen M. Stewart - Deutsche Bank AG, Research Division: Okay. And then maybe, Vince, if you can just kind of give us your broader overview. I mean, a lot of your peers this past quarter have talked a little bit more cautiously just about the health care environment, with some of the hospitals reporting admissions that are still down and just kind of broader weakness. Can you maybe just talk about what you guys are seeing because your results would seem to suggest you're certainly kind of bucking the trend there? Vincent A. Forlenza: So we talked of that, what we were experiencing as a stable environment but constrained, so it's certainly not -- I wouldn't characterize it as an improving environment. I think that we've done well because of the diversity in the portfolio, both geographically. The acquisitions that we've been doing are performing well, and our new products are getting traction. So I don't think that we're in a better place from a utilization standpoint than the overall industry. I think that what we have in our portfolio is working well. On the negative side, of course, in this quarter, you did see the timing issues. Suky, would you like to add to that?

I think you're right on point, Vince. And then, the fact that emerging markets continue to grow really well, and we're well indexed from a revenue exposure standpoint to emerging markets, I think, is another contribution. Vincent A. Forlenza: Yes. Kristen M. Stewart - Deutsche Bank AG, Research Division: And then just lastly, can you give us the contribution from acquisitions this quarter and what you have in the full year? I think your prior guidance was for 50-basis-point acquisition benefit for full year.

That's right. Kristen M. Stewart - Deutsche Bank AG, Research Division: I don't know if it's any different. You kind of suggest that Cato would be minimal but...

Yes. Cato will be minimal. For the full year, we had previously guided that acquisitions would be about 50 basis points. We're taking that up a little bit. We're getting a little bit better expected -- than expected traction, thinking about 60 to 70 basis points on the full year. Within the quarter, it was about 100 basis points. But again, that'll come down over the rest of the year as KIESTRA starts to annualize.

And our next question comes from the line of Amit Bhalla from Citi. Amit Bhalla - Citigroup Inc, Research Division: I just wanted to go into a little bit more detail on the Diagnostics components. I think in the prepared comments, you mentioned that cervical cancer screening extensions of intervals was impacting there. I mean, that's been going on for a little while. So I was wondering, is there a greater impact in the quarter? And could Tom maybe give a little more detail on the other product lines within Diagnostic Systems? Vincent A. Forlenza: Sure, Amit. And I think Tom would be happy to talk about that. I think you saw that the intervals start before this quarter but continuing. So Tom, maybe you can pick up on it.

Sure. Amit, this is Tom. So in the quarter we saw, as Vince mentioned, overall strong performance in our microbiology business internationally and also in our point-of-care. Speaking then specifically to women's health and then also comment on molecular. We did see women's health was actually down 10% in the quarter, and that was driven by continued strong double-digit growth internationally. We are seeing continued increases in ACT testing internationally, as well as good conversion from conventional to liquid-based cytology driving that double-digit international growth. But we saw the U.S. down really driving that net decrease of 10% in the quarter, and that's really 2 factors. We saw OB/GYN visits, the stats that we look at, OB/GYN visits were down about 6.5% in the quarter. And then we see the intervals continuing to extend. We monitor those intervals and adoptions pretty closely, and we're seeing about 50% to 60% of physicians at this point have adopted those extended intervals. That's up from about 25% 2 years ago. So it's not ended yet, but it's moving towards a more -- it's continuing to increase that rate but that had -- did impact us. Molecular in the quarter was actually down as well, about 4%, and that was really prior losses in GeneOhm continue to annualize, and that offset growth that we did see in MAX. And as Vince mentioned earlier, we are seeing very good customer interest in MAX, continued really pleasure from the customer perspective around the automation of performance and the open system capabilities. We did surpass that 150 total installations in the quarter. It's diff approved, which is a major milestone in our [indiscernible] portfolio, and we've [indiscernible] against a backlog of orders bringing that down. We expect that backlog to be fully relieved in Q3 and moving forward from there. Vincent A. Forlenza: Because we're ramping up production.

Exactly. Vincent A. Forlenza: So obviously, to state the obvious, the one area we are seeing lower utilization as the industry is, of course, is in women's health and cancer with the lower OB/GYN visits and the increase in the interval. Other than that, I think there's been pretty much stability. Amit Bhalla - Citigroup Inc, Research Division: And Vince, could I just follow up on Biosciences? Just the point you made about strong instrument sales. Can you get a little more specific there? I think instrument sales in the industry are pretty volatile. Some companies have said they've been weak. You're talking about strength. Just a little color there. Vincent A. Forlenza: Sure. And the trend we started to see last quarter, it began to pick up at the higher end. [indiscernible] comment further on it. Bill, would you like to... William A. Kozy: This is Bill. Just to give you some color, we have just slightly improved performance in the sorters and the high-end analyzers. And if you thought back to last year and remember some of our reports, that was a weak spot. So we've seen that stabilize a little bit, and we're getting some steady single-digit growth in that area. And then, of course, our new instrument, Acurri, continues to contribute very nicely. So the combination of some improvement in the high end and the steady ongoing performance in Acurri is kind of the story on instruments.

Our next question comes from the line of David Lewis with Morgan Stanley. David R. Lewis - Morgan Stanley, Research Division: Suky, maybe one quick question on the outlook and then, Vince, I had a question on China. Suky, I guess the interesting thing about the second quarter is, unlike your peers, we saw comp-adjusted acceleration. Your comps do get harder into the back half of the year. I wonder if you could help us understand some of the drivers that give you the confidence you can maintain this performance into the back half. And I guess the second related the question is if you think about the impact you're having from acquisitions this year and the underlying operating margin performance of 50, 60 points, help us understand. Is there a way you could see next year not seeing better operating margin leverage than you're actually seeing this year just based on that acquisition drag and the underlying business performance? And I have one follow-up for Vince.

Sure. So I'll start on your 4-part question here. David, thanks for the question. So first off, what gives us the confidence on our outlook? So first of all, in the first half, I think we did perform quite well versus our expectations, 4.7 on the top line. And you could see that we're showing acceleration from an EPS perspective and from margin expansion. Going into the second half, we expect to see a little bit of acceleration from a top line perspective. The growth drivers, I think, as Vince has mentioned, primarily around acquisitions. We're seeing really good growth in customer anticipation around KIESTRA. SSI, we're very excited about. We think it will be a nice growth driver for us for the rest of the year. Our launch of new products, specifically around MAX beginning to ramp up, as Tom spoke about, adding on the new anchor assay of C. diff has us very excited. If you start to think about further on into our portfolio around pen needles, we still have a lot of runway in that business. So it really cuts across many different businesses. And then again from a geographic perspective, we continue to see very strong growth from emerging markets, and Safety continues to be a nice contributor. So we've got confidence, again, in the backdrop also of lower pricing erosion that we could sustain, not only sustain growth but actually accelerate a little bit from a top line perspective. Moving on to the second point of your question, which is -- you're absolutely right. Very good contribution from acquisitions this year, very good margin expansion. What would you expect for next year? We're not going to guide on next year, but when you think about what are some of the drivers of our margin expansion this year, it's primarily in gross margin, right? And we've talked a lot about ReLoCo and the incremental benefits there, which are right on track and delivering as expected. We talked about our other continuous improvement in some of our G&A efficiencies. Those things don't go away as we look forward. So my anticipation is that we continue to see some margin expansion as we... David R. Lewis - Morgan Stanley, Research Division: Okay. And sorry for my liberty with the questions, but maybe one more for Vince. I guess, Vince, the interesting thing about the China number this quarter, and frankly, the first half of the year, has been versus your arch rival, so to speak, in China, the local player, you're actually probably performing better than your biggest local competitor, at least in our view. And I guess that's not what I think people would have thought heading into this year. So maybe kind of talk to us about why you're being successful in China this year and the sustainability of that trend. Vincent A. Forlenza: Sure. We are having a good year in China. Actually, we had a good year in China last year as well, and I think we're holding on success that we're putting in place over the last couple of years, and there's a few things. One is that we compete not [ph] just on product, but on clinical knowledge in the marketplace, especially on the device side. We're on our third memorandum of understanding with the Chinese government on infection control. So we're bringing not just a very innovative product, which was designed for the Chinese market, for example, in our Infusion Therapy business, but in addition, we are working with our customers on training, transfer of clinical knowledge, which is highly valued in the marketplace, which the local competition does not bring. Second, from an organizational standpoint, we have been investing heavily the last several years in not just sales capability but in a broad capability in terms of regulatory affairs, quality manufacturing. And I think you're seeing the impact of that as we improve our coverage across the entire country and strengthen partnerships with local distributors. So it's a whole series of things we're putting in place. I don't want to give you the impression that it's just on the medical device side. The medical device side is doing quite well, but it's also diagnostics over the last 18 months has ramped up very nicely in China. It's doing extremely well. BDB also is doing well, both historically with the clinical market; now it's also the research marketplace. And it's the total portfolio there that -- where we can do the small instrument all the way to the high-end centers that China is funding. So it's that mix of all things -- all of those things that is giving us the good performance against both the local competition, and quite frankly, against the international players as well.

And we'll go to the next line of David Roman with Goldman Sachs. David H. Roman - Goldman Sachs Group Inc., Research Division: I wanted to just make sure I understand the change in the guidance on earnings versus the prior expectations. And then the math that I was getting to was there's a sort of $0.03 benefit from the medical device excise tax being a little bit lower than you had expected, the outperformance in the second quarter of between $0.05 and $0.08 depending on what baseline you use. And then you're raising guidance by $0.03 for the year. Is the entire difference there FX?

No. So David, first of all, the medical device tax. Previously, we gave a guidance range of $40 million to $50 million. We're not saying it's around $45 million, so it's a little bit less than a $0.01 or $0.02 if you took the upper end of that range versus the middle of that range versus what we talked about. So we don't see that as a major driver. Overall, EPS we're increasing, on a performance basis, by about $0.05. FX offsets that by about $0.02, and again, it's driven by the underlying uptake in revenue as well as some benefit from some items below the line. David H. Roman - Goldman Sachs Group Inc., Research Division: That's helpful. And then taking maybe a little bit more of a longer-term view of the story, you're providing a sort of 11% FX-neutral, x medical device tax, earnings growth number for the year. Can you maybe just talk about the moving parts in there about anything unique to fiscal 2013 that might depress that or inflate that and how we should think about sustainable earnings growth for the company? Then just sort of dovetail to that, can you just explain in a little bit more detail the moving parts around the mix of earnings in Q3 and Q4?

So first of all, the first question in there was around 2013 and how that looks versus 2014. So sort of trying answer that very simplistically, I deconstruct that 11%, 11.5%. If you think about revenues, the component of that, about 4.5 to 5%. Then you've got our share repurchase program carryover from 2012 plus the shares we're doing this year. It's probably worth about 4% to 5%. And then the remainder of that is due to the operating margin expansion. That's a profile that I pretty much see going into 2014. There's going to be some puts and takes across those 3 levers, but I think that's broadly in line with where we're looking at it. I think your next question was around how do we see Q3 and Q4 into the rest of the year. Again, if you sort of took where our guidance -- what we've delivered so far, $2.74, our guidance range on EPS for the rest of the year, that takes you to about a $3 at the midpoint for the rest of the year. And again, we see that more heavily weighted to the fourth quarter. I hope I've answered your second question. David H. Roman - Goldman Sachs Group Inc., Research Division: Yes. I'm just trying to understand why more weighted to the fourth quarter. What are the dynamics that make that the case this year? Vincent A. Forlenza: Just lumpiness in the business, David.

Lumpiness in the business. If you think about the uptake on our new products, as well as acquisition, you're continuing to see a steady ramp-up quarter-over-quarter. Vincent A. Forlenza: We mentioned some spending which got shifted from the second quarter into the third, so you have that combination going on.

And we'll go to the next line of Brian Weinstein from William Blair. Brian Weinstein - William Blair & Company L.L.C., Research Division: Going back to the question on pricing, can you guys just talk a little bit there? Are there are certain areas where you're seeing pricing a little bit better than expected? And is this something that you're doing or you're seeing success with efforts that you're making to minimize the impact of pricing? Or are there broader market dynamics that are just kind of helping you out there? Vincent A. Forlenza: So Bill Kozy is going to address that question. William A. Kozy: Just at a general level, if you remember where we were managing a couple of years ago, we now have changed our price management systems across all 6 of the worldwide business units. We've got the fundamental things in place now that pricing passed those contract approval processes. I think we've gotten a lot more rigorous in the way we manage our price. As Vince mentioned, the environment is still tough. But there's a much greater -- there's basically a diligence process on our major contract management process in all 6 of the business units, and I think that's probably been an important factor. In addition, the new marketing capability and the company being led by our CMO, Nabil Shabshab, is really driving value propositions to a next level across, again, all of our acute care businesses, which is where our price pressure has been mostly concentrated. So I'd say it's the combination of those 2 managerial initiatives that have probably had the most visible impact, from our perspective, on how we think about managing our price more effectively. Vincent A. Forlenza: And if you think back, we also had a situation where we communicated that there was one product line which had a severe pricing event. We sunseted that, I think, about a year ago, halfway through last year. So with that in mind, we communicated going forward that we thought pricing might improve because of that. It's still negative, but we did sunset that and prices did stabilize in that particular marketplace like we thought. But to Bill's good points I think it's that plus the combination of things that Bill just put on the table.

And our next question from the line of Mike Weinstein with JP Morgan. Michael N. Weinstein - JP Morgan Chase & Co, Research Division: Just maybe cleaning up a couple of items. So if I'm looking at the quarter acquisitions, you said it was 100 basis points and that includes KIESTRA, SSI and Sirigen. Is that right?

That's right. Michael N. Weinstein - JP Morgan Chase & Co, Research Division: And is Cato 0 for the rest of the year? Because if you -- I'm just thinking about our numbers here, and it seems like the acquisition component would be greater, particularly with the addition of Cato. Or is that just 0 for the balance of the year? Vincent A. Forlenza: No, it's very small, Mike. So you don't have to figure it into your model. It will start to impact next year. Michael N. Weinstein - JP Morgan Chase & Co, Research Division: Okay. And so if I look at this quarter, so if I back out the 100 basis points from acquisitions and the 40-basis-point impact of currency gets you to like 3.1% organic, so that's down 200 basis points. The comp was a little bit tougher this quarter, obviously, than last quarter. But do you expect growth to accelerate in the back half of the year x the acquisitions and that's just, to be clear, because of what?

Yes. So if you think about where we guided you for the rest of the year, Mike, we say 4.5% to 5%. And if you think about acquisitions for the rest of the year, it's going to moderate to somewhere in about the 60- to 70-basis-point range. So we're looking at underlying growth somewhere of around 4% to 4.5%, so it looks all right. Vincent A. Forlenza: And Mike, recall that we've talked about the timing events in this quarter. So the other thing that we should all be keeping in mind is it was a timing event in Diabetes Care. So we expect strong growth in Diabetes Care in the back half of the year. We all know we've talked about many times the lumpiness in Pharm Systems. So Pharm Systems, we're indicating to you, is going to be improving in the back half of the year versus this quarter. So you see that going on as well. We have the ramp-up of BD MAX in the back half of the year. Remember, we talked about 150 instrument placements. It takes a while [indiscernible] gauge its usage to start to ramp-up. So you've got all of those things, and we expect continued good performance in emerging markets in the back half of the year. So when you put all of that together and you pulled out the timing elements, I think we're pretty confident in terms of the back half. Michael N. Weinstein - JP Morgan Chase & Co, Research Division: Okay. And if I think about that as well just from geographic standpoint, if I adjust it for acquisition this quarter, it looks like the U.S. business was probably down slightly year-over-year. Is it the U.S. business that turns in part because, as well, Pharm Systems turns just based on timing? Vincent A. Forlenza: Yes, Mike. You nailed it.

And we'll go to the next line of Rick Wise with Stifel. Frederick A. Wise - Stifel, Nicolaus & Co., Inc., Research Division: Maybe talk about BD MAX for a second a bit further. The Cdiff approval seems like a pretty significant positive to me. Can you maybe be more specific? Or can you talk a little bit more -- expand on your comments about how it gets rolled out and how we think -- what impact on BD MAX placement the Cdiff approval could have, uptake, et cetera? Vincent A. Forlenza: So Tom can comment on that. But we really -- just as a foundation, we do believe that it's such a critical assay for us because it's probably the major problem that hospitals have right now in the U.S. So without that anchor assay, we were constrained. But Tom, you want to add some color to that?

Yes. Rick, this is Tom. I would just say that if you look at, particularly in the U.S. -- so x U.S. we've had about 7 assays launched. This brings the U.S. up to now 3 FDA-approved assays, and we also offer REO assay for the HAI space, as well as CRE. So this -- the launch of Cdiff really rounded out our HAI portfolio. We had MRSA. MRSA is still a growing market, but it's -- the growth rate of MRSA looking forward is not merely at the level of Cdiff. I'd say MRSA defines a bit of a more mature market. Cdiff, as Vince alluded to, is still a very fast-growing market that has a lot of runway ahead. And as you look at someone looking to make an acquisition of a platform for helping to manage their HAI solutions, the fact that we now have MRSA and Cdiff available on the box, it was something that we had a lot of customer actually waiting for. We had some pent-up demand of people waiting for our Cdiff approval, and we saw that immediately upon approval, a series of orders come through the door. And we're still, of course, working on many more beyond that. It's kind of one additional assay. It's not the scale of MRSA or Cdiff that's actively under clinical trials right now. That's our StaphSR assay for pre-surgical screening. We'll be submitting that to the FDA later this year, and that will fully round out our HAI portfolio. Vincent A. Forlenza: Rick, one other thing to keep in mind is that while we are getting new placements, and we are getting new placements in customers we did not have before, a big priority for this year is upgrading the current base. So as I was mentioning, you're going to see the ramp-up of sales, but that's somewhat moderated by the fact that we're also trading out that installed base where we've been selling a very manual product to date. So expect even a bigger impact next year. Frederick A. Wise - Stifel, Nicolaus & Co., Inc., Research Division: [indiscernible] so the impact could be greater next year? Vincent A. Forlenza: Yes. Frederick A. Wise - Stifel, Nicolaus & Co., Inc., Research Division: A couple of other quick ones. Suky, investment income was almost double our $6 million forecast, $4 million sequentially better than the first quarter. I know this is an up-and-down number. Just how do we -- what was causing that and how do we think about that number for the rest of the year?

Yes, so total investment, you're right, was slightly higher in the quarter primarily due to deferred comp, as you know. We've talked about this in the past, as assets in that plan increase because we've seen good performance in the overall equities market, we recognize additional interest income. Of course, there's an offset in SSG&A, which you'll see in this quarter as well. So that's one of the key drivers to this year. We're also seeing some slight rate improvement x U.S. on our cash balances, so that's a positive. As we think about for the year, interest income we're characterizing at about $35 million, and so that's a slight increase from last quarter.

And our next question comes from the line of Doug Schenkel from Cowen. Doug Schenkel - Cowen and Company, LLC, Research Division: Vincent -- I think this is a question really for Vincent, Suky. You bumped up your guidance just a little bit for SSG&A spend for the year. I apologize if I missed this, but are you pulling forward any spend that was planned for maybe next year or beyond on really an opportunistic basis given you've seen some better-than-expected revenue this year? And if so, is there any reason we shouldn't be contemplating this as we model out margins moving forward? Vincent A. Forlenza: Good question. The answer is no. To be more precise, we're seeing there was spending that we thought was going to happen in the second quarter, and it was in the legal area. We thought that is now moving into the back half of the year, somewhere, we think, probably the third quarter, and that's what's going on. It's not us accelerating infrastructure spending or that sort of thing. So no impact on your modeling other than this year.

And the increase in overall SSG&A is primarily driven by the new acquisition. Doug Schenkel - Cowen and Company, LLC, Research Division: Okay. That's helpful. And then another BD MAX question for Tom. Thanks for the update on the number of placements, and clearly your commentary today really dovetails with our recent checks that BD MAX is going well, especially as the menu expands. Vince, just a second ago, you mentioned that you're really focused on upgrading existing customers rather than gaining incremental customers. Could you just provide a little bit more detail on how you expect this to evolve over the next year or 2? And then, I guess in terms of just thinking about conversions or upgrades, however you want to put it, what's the revenue opportunity associated with getting a customer -- an existing customer to upgrade from GeneOhm?

Okay. So this is Tom, and thanks for the question. So just on -- give a little bit of color on the upgrade path and why that's important to us. As we've been reporting, the GeneOhm business has been challenged, I'd say, for really the last year to 2 because of the very manual nature of that, right. It's been vulnerable. And as we've said, we actually had molecular is down this quarter because of the annualized impact of losses in the past on GeneOhm, and the GeneOhm menu is really purely an HAI menu plus GBS. That GeneOhm menu now, with the approval of Cdiff, is basically been fully replicated on MAX. And so the customers that have been relying on GeneOhm to do their MRSA testing and their Cdiff testing and their GBS testing now have that exact same portfolio available on MAX, and so we're able to go and more aggressively upgrade them, secure that business so that we don't have any underlying negative trajectory in that part of the portfolio. So then with a more solid base, of course, you're looking at a combination of share gains, as well as entry into new market spaces. And really from here on out, most of the new assays that we will be launching on MAX, and we haven't characterized the exact size of those markets publicly, but what you will see is MAX beginning to enter into new spaces for us. So, for example, in the quarter we launched our enteric bacterial panel in Europe. Now that's a new market for us. It's a new market overall because it's upgrading customers from culture to a molecular method. That assay is under active clinical trials right now in the U.S. and will be submitted for FDA approval at the end of this year. We have GC/CT also moving into clinical trials. GC/CT, Trich, a new assay on that platform in that volume segment of the market. Of course, it's been playing a bit more in the higher volume segment on our Viper platform. And there's many others. We have respiratory assays in our pipeline, et cetera, which are new markets for us. So we think about, as we get that MAX placement into an account, really growing that account through the addition of menu, and that's an area that we've communicated that we're very focused on, and we'll continue to be, obviously, on the execution side of that, very focused on menu expansion because that's what's going to drive average revenue per account upwards over the many years to come. Doug Schenkel - Cowen and Company, LLC, Research Division: Okay. That's helpful, Tom. Really one quick follow-up. GeneOhm-to-MAX conversion, there's also a pricing benefit as well for you, correct?

There is. In general, it's in the 10% to 20% range.

And our next question comes from the line of Jon Groberg with Macquarie. Jonathan P. Groberg - Macquarie Research: A couple of quick ones for me. First, on the margins, so I'm just trying to understand a little bit more what happened either year-over-year or sequentially. Even if I strip out the medical device tax, the margin seems like a little bit weaker than I would have anticipated. And I think you said you had 60 basis points of just onetime items, and then you noted the legal spend pushed out. So I was just trying to understand a little bit more what was happening on the margin line, the 60 bps. Vincent A. Forlenza: Sure. Suky can take that for you.

Yes, so from a gross margin perspective, you're right. We have onetime items, about 60 bps. It really relates to a lot of smaller items. For example, we had the write-down of a plant that we're closing as a result of our ReLoCo initiatives. There's been some other items related to cost compliance. All in all, they add up to about 60 bps for the quarter. Again, we expect those to turn in the next quarter. So that was the key driver of gross margin. And then when you look below that, again, a medical device tax worth about $14 million or about 60 bps to operating margins as well. Vincent A. Forlenza: So Suky, maybe you want to comment on the good productivity in the quarter because we actually had the productivity we expected to have.

That's right. If you sort of broke gross margin apart, it is down 30 bps, 10 due to performance. But unfortunately, some of the onetime items masked a really good performance we're seeing against ReLoCo, continuous improvement. And actually, our 2012 acquisition is now becoming accretive to gross margins in 2013. Those all in were worth about 130 basis points improvement year-over-year. So a good point, Vince, and that is really the underlying story. Jonathan P. Groberg - Macquarie Research: Okay, that's helpful. And then, on the 3Q, 4Q dynamic, just so I'm clear, do you know specifically -- because you said diabetes was pushed out and you expect it to be stronger in the second half, is that something you know was going to be a 4Q versus 3Q event? Or is that some just conservatism that you don't really -- you know some things are coming and it's just difficult to predict when it's coming? And I guess, another kind of follow-up on the revenues there. It looks like, Tom, on the -- for Diagnostic Systems, to be up as much as it was, given what you said about women's health and molecular, that microbiology must have been up double digits, which is not a business that, I think, most would expect to have that kind of growth. So can you maybe just talk about the sustainability of that? Vincent A. Forlenza: First, on Diabetes Care. It was a onetime supply chain event. It's already resolved itself. So going forward, we're not concerned about this. So you can pretty much take that off the table. And Tom, microbiology is doing very well.

It is. So this is Tom. Microbiology is doing well overall. I would say in that segment, you also have to put in the Veritor point-of-care platform, which is also doing very well. As Vince mentioned, we're up to over 4,700 placements since launch, and really, most of those sales, of course, are concentrated in the flu season, which was Q2. So I look at Diagnostic Systems as really getting the benefit of concentration of a very successful new point-of-care launch with flu, with also very good growth internationally across the portfolio and solid performance and increasing strength in our microbiology business. And that's driven by not only just the core products, but also the integration of KIESTRA and now the broader solution that we're offering in that category around automation. Vincent A. Forlenza: KIESTRA is really giving us a total offering in this segment that we didn't have before. Jonathan P. Groberg - Macquarie Research: Okay. And just to be clear, on the 3Q, 4Q, do you know specific items that are going to happen in 4Q versus 3Q? Or is that just kind of uncertainty with the lumpiness?

No, I think it's just -- as we've talked about before, it's just the calendarization and really the ramp-up of the new products and the acquisitions that are driving sort of a sequential uptake to the fourth quarter. Vincent A. Forlenza: We do know Pharm Systems is going to be bigger in the third quarter than the fourth quarter. That's the main one.

And our next question comes from the line of Bill Quirk with Piper Jaffray. William R. Quirk - Piper Jaffray Companies, Research Division: First question I think probably for Tom, and this is a follow-up to a question you had regarding MRSA and Cdiff and kind of how you think about those from a longer-term growth standpoint. Any comment around the recent CMS proposal that came out earlier this week around the in-patient quality scores and tying those to HAIs and potentially giving this business a shot in the arm here in a couple of years?

Good question. This is Tom. So just around MRSA and Cdiff, we continue to see Cdiff, I'd say, the market overall is growing very strong double digits, closer towards the 20% range is what we see. And with the adoption of molecular Cdiff methods, it's still well under 50% across the market. So you've got significant overall health care issues that's happening across, particularly in the U.S. with a continued upgrade from what is very clearly documented as a -- going from an inferior method to a superior method going from EIA to molecular technology. MRSA, I described as a bit more mature. You're seeing that growing more in the very high-single digits to very low-double digits. For MRSA as a marketplace, as people have -- that's been -- the conversion from culture to molecular has been going on for quite a bit longer period of time, and we described that as a bit more mature. The combination of the 2 though, of course, we still see HAI as a very attractive market. On your point regarding reimbursement and kind of value-based purchasing going forward, certainly, we have always recognized that there's going to be increased incentives for hospitals to reduce HAIs, and we've been positioning ourselves for that, not only through expansion of our portfolio, but we've been very involved in helping to influence those guidelines and the laws that have been passed in several states around mandatory screening, et cetera. So overall, the market access and market development around HAIs, including influencing the rules around future payment structures, et cetera, is an area that we remain very active in. William R. Quirk - Piper Jaffray Companies, Research Division: Great, and then a follow-up. We've certainly seen kind of first-hand the effect of KIESTRA being at the ACTMED [ph] meeting over the weekend and candidly seeing some pretty impressive traffic at that piece of your booth. Can you talk a little bit about, I guess, one of the other new technologies in microbiology that I think is probably driving the franchise, and that's mass spec, and what you're seeing both in Europe as well as in the U.S. and kind of how this fits in the entire equation? Vincent A. Forlenza: That's a great question. Tom, why don't you?

Yes, very good. So appreciate the feedback on ACTMED [ph]. The -- so I would say, as you saw, KIESTRA is going very well, and it's performing at our expectations. Mass spec is a very exciting new technology that's, of course, really allowing identification of organisms to occur in minutes rather than in hours. You may have seen at ACTMED [ph], we did a joint press release with Bruker. We have entered into an OEM agreement with Bruker on a BD-branded MALDI-TOF, which is going to be -- we'll sell that as a standalone and connected in with our Phoenix AST solution. We have launched an AST on our Phoenix, so that customers can do the ID on mass spec, AST on our Phoenix and connect all of those results to our informatics platform called EpiCenter. We're also in the process of integrating that Bruker MALDI-TOF OEM that we've done in line with our KIESTRA system to be able to fully automate that moving forward. And you probably saw we actually were sharing the early prototype versions of that we're demonstrating at the convention that you're at.

And our next question comes from the line of Derik De Bruin from Bank of America. Derik De Bruin - BofA Merrill Lynch, Research Division: A couple of just really quick ones. What was the year-over-year benefit from flu?

So the year-over-year benefit from flu was a little bit better than what we expected in the second quarter. If you recall, in the first quarter, we said it was about 50 basis points. Derik De Bruin - BofA Merrill Lynch, Research Division: Okay, great. And then just a quick one. On the Simplist products, what's sort of your expectation to organic revenue growth contribution for that in 2013? I guess, just some general guidance on how to think about it for 2014. Vincent A. Forlenza: So for 2013, small. And we're just starting to ramp this up, but we are starting to ship products. But in terms of the back half of the year, it's going to take a while for these contracts to roll and the product to get through the system and whatnot, so not much. So you're going to see a bigger impact in '14. '14 is going to be our really first sales year of this product. But we're not going to get into a particular revenue guidance on it at this point in time.

And we'll go to the next line of Matthew Taylor with Barclays. Matthew Taylor - Barclays Capital, Research Division: Just a bigger-picture question. I wanted to ask about the cadence of Safety growth in Europe, just given the legislative mandate there and how you see that through the rest of the year and then through the next couple of years. Vincent A. Forlenza: Sure. Bill is going to take that. William A. Kozy: This is Bill. Most of the countries at this point are still in their final stages of transposing that directive to the localized country legislation. And as you know, that's supposed to become effective May 11. There is a little bit of a variance across the countries in terms of capability to be ready by mid-May. You've got some people that are very far along. Examples would be Austria, Finland, France, Germany and Ireland. You've got a few people who are lagging. I'm less certain this would be the countries in southern Italy. And Denmark and Czech Republic are a little different. In terms of where we're sitting right now, and of course, we're just trying to get a handle on today, we see the European safety market about 53%, 55% converted on infusion therapy, maybe about 10% to 13% on injection and about 42% to 45% on our blood collection products. Those are the real key drivers. We've also got an early-stage entry in diabetes right now, and that safety market is about 10% converted. Now we've seen our revenues growing at about 9.5% or so year-to-date on Safety. We expect that number to kind of continue itself. We don't see anything dramatic happening suddenly in the second half of the year, but we do expect that high-single digit growth to continue, hopefully over the next several quarters. Matthew Taylor - Barclays Capital, Research Division: Great. And I just wanted to ask another question on the margins. I guess it was interesting that you called out the acquisitions are becoming accretive. And given your programs in terms of ReLoCo, can you talk about your acquisition strategy and how that relates to margins? And do you think that a lot of your expansion the next couple of years is going to come from gross margins? Or is there more -- is it more going to be cost-cutting-driven? Vincent A. Forlenza: So I think we have a mix going forward. We do expect to continue to get gross margin improvement as we go forward. I think from a principal standpoint, you should think that the kind of ReLoCo program you've seen in Medical is now a way of life, and that we would look to keep extending that kind of thinking in program throughout the company. We're actively working on those things. Also second piece, you're right. We do expect that these acquisitions will become more accretive over time. The way I think about it is our strategy is to continue doing these plug-in acquisitions. So there's always a baseline cost of the program. But as the -- as some of these acquisitions mature, then we see benefits from them, and that whole program becomes more positive over time. But we do expect to continue this program and continue to move into adjacencies. Moving into SSG&A, we will continue to drive our efforts in shared services as we bring up our global shared service network and continue to look for operating efficiencies in SSG&A as we move forward on the EVEREST program as well. So it's going to be a combination, and it'll probably vary from year to year depending on what's going on.

Next, we'll go to the line of Peter Lawson with Mizuho Securities. Peter Lawson - Mizuho Securities USA Inc., Research Division: Just a question around the pharma business. I mean, does that change the acquisition strategy going forward? And is there any way you can kind of help us around 2014 on the outlook for that business? Vincent A. Forlenza: So we're not going to start guiding that business now. It's too early on, Peter. Let us get some traction, and we'll come back as we talk about 2014 more holistically, then we'll update you on that business. But we're just taking the first orders for that business. So just way too early for that. What was the first part? Peter Lawson - Mizuho Securities USA Inc., Research Division: Just around acquisition strategy. Vincent A. Forlenza: So I don't think it changes our acquisition strategy. We're still focused on plug-in acquisitions. If you think about what we're doing in the Medical side of the business, what we're communicating is we're focused on medication error reduction and improving parenteral drug delivery. That's the core of that strategy. I'm sure we would continue to look to expand our footprint in that area as we're continuing to expand our footprint in Diagnostics and Biosciences. Peter Lawson - Mizuho Securities USA Inc., Research Division: And then just on BD MAX and Cdiff, what kind of hospitals are you targeting? I guess, what's your go-to-market strategy there? And is that more of an international business, you think, than a U.S. business? Vincent A. Forlenza: It's very much a U.S. business and an international business. But pretty much all the major -- the acute care hospitals have significant programs around first, HAI reduction. And then as Tom was talking about before, we see this opportunity for a broader menu across the acute care segment. What Tom's doing is broadening the footprint of molecular within the acute care segment. You want to comment any more on that? Because it's been very concentrated a little bit now.

I think you summarized it very well. If anything, I would say Cdiff is a bit more concentrated in the U.S., where the adoption of molecular is more widespread. Europe is much further behind in the adoption curve. U.S. is 3x to 4x ahead in the adoption curve, I'd say, at least of Cdiff than really most other geographies around the world, so... Peter Lawson - Mizuho Securities USA Inc., Research Division: And just a follow-up around that. Is Asia a focus for your BD MAX?

Well, we placed quite a number of BD MAXs in Asia. We have not necessarily entered into China with BD MAX yet. But more of the mature geographies in Asia, particularly ANZ, Singapore, et cetera. We're seeing strong adoption of BD MAX. They have existing HAI screening programs in those markets, and we also see very positive feedback on our future menu in those geographies as well.

We'll go to the line of Jeff Frelick with Canaccord. Jeffrey Frelick - Canaccord Genuity, Research Division: You've mentioned earlier not seeing broad improvement in the overall market, especially around utilization. So given the kind of the solid quarters you've strung together here, you must be taking some share. I just wondered if you can point to which products are contributing to that -- to those gains. Vincent A. Forlenza: Well, I think there's a number of businesses where we're doing quite well in. And you see our results, first off, just broadly in international and especially in emerging markets. We're doing well as we build out those infrastructures, as we talked about, as we have some products particularly targeted for those markets. So in Medical, we're doing well. Remember -- we haven't talked about it today. The Emerald Syringe we've launched, and we're moving into markets that we haven't served before. I think we're doing quite well in the Diabetes Care business in pen needles as well. In Diagnostics, we're reporting out the point-of-care, and Veritor, we entered the physicians marketplace, where we have been in clinical but we were not there before in the flu market in physicians. Now we have Strep and RSV going forward as well. So we're as excited about that. Remember, there's also adjacencies going on here, which -- where we're moving into spaces we just haven't occupied. Tom just talked about now he's got mass spec unit. We've moved into laboratory automation. So I think we're doing better because we're moving into adjacent spaces, new products and gaining some share at the same time. I think it's more the adjacencies' international piece than share gain right now, but getting some on the margin.

And we have a follow-up question from Kristen Stewart with Deutsche Bank. Kristen M. Stewart - Deutsche Bank AG, Research Division: I just want to follow up on Derik's question just regarding the flu to make sure I understood it correctly. Last quarter, you guys said there was a 50-basis-point benefit in 1Q, which you characterize is going to be more of the pull-forward from the second quarter. And then I thought, if I understood you correctly, you said this quarter was a little bit better than what you had been expecting. So can you maybe just help us understand in this quarter what kind of flu was?

Sure. So you're right, Kristen. Flu is worth about 50 bps in the first quarter. It was smaller in the second quarter, a little bit better than we expected. So when you think about -- when you look at the actual market dynamics, what happened, we clearly saw from the CDC a big drop-off in the second quarter. There was a bit of a spillover. Vincent A. Forlenza: So it was small in the quarter. It wasn't a big driver, less than 50 bps. But where it was was in the physician's office with the new product. Kristen M. Stewart - Deutsche Bank AG, Research Division: Okay. So we should be thinking about underlying growth, the 4.1%, less the 100 from acquisitions and then kind of reducing -- further reducing for flu, which you say that given... Vincent A. Forlenza: I wouldn't do that.

And there are no further questions. I'll turn the call back over to Vince Forlenza. Please go ahead. Vincent A. Forlenza: So I thank all of you for your questions and your participation on the call. We were very pleased with our second quarter results. It was great communicating that to you. I'm very happy to raise our guidance for the year. I think that we're seeing strong growth as we communicated both on international, good performance from our acquisitions and our new products, which is driving that growth. We didn't talk a lot today about our operating effectiveness programs, but they remain on track, ReLoCo I and ReLoCo II, and we will continue to drive those programs going forward. And it was a pleasure to raise our guidance. So we look forward to updating you on the balance of the year. Thank you very much.

This does conclude today's teleconference. Thank you for using AT&T Teleconference. Please disconnect your lines at this time, and have a wonderful day. Vincent A. Forlenza: Thanks very much.