Dominic J. Caruso - Chief Financial Officer, Corporate Vice President of Finance and Member of Executive Committee Louise Mehrotra - Vice President of Investor Relations

Matthew J. Dodds - Citigroup Inc, Research Division Steve Beuchaw - Morgan Stanley, Research Division Matthew S. Miksic - Piper Jaffray Companies, Research Division Michael N. Weinstein - JP Morgan Chase & Co, Research Division Frederick A. Wise - Leerink Swann LLC, Research Division Derrick Sung - Sanford C. Bernstein & Co., LLC., Research Division Jami Rubin - Goldman Sachs Group Inc., Research Division Rajeev Jashnani - UBS Investment Bank, Research Division Robert A. Hopkins - BofA Merrill Lynch, Research Division Larry Biegelsen - Wells Fargo Securities, LLC, Research Division Kristen M. Stewart - Deutsche Bank AG, Research Division Ian Sanderson - Cowen and Company, LLC, Research Division Sara Michelmore - Brean Murray, Carret & Co., LLC, Research Division

Good morning, and welcome to Johnson & Johnson's Third Quarter 2011 Earnings Conference Call. [Operator Instructions] This call is being recorded. [Operator Instructions] I would now like to turn the conference call over to Johnson & Johnson. You may begin.

Good morning and welcome. I'm Louise Mehrotra, Vice President of Investor Relations for Johnson & Johnson, and it is my pleasure this morning to review our business results for the third quarter of 2011. Joining me on the call today is Dominic Caruso, Vice President, Finance and Chief Financial Officer. A few logistics before we get into the details. This review is being made available to a broader audience via a webcast accessible through the Investor Relations section of the Johnson & Johnson website. I'll begin by briefly reviewing highlights of the third quarter for the Corporation and highlights for our 3 business segments. Following my remarks, Dominic will provide some additional commentary on the third quarter results and guidance for the full year 2011. We will then open the call to your questions. We expect the call to last approximately one hour. Included with the press release that was sent to the investment committee earlier this morning is the schedule showing sales for major products and/or businesses to facilitate updating new models. These are also available on the Johnson & Johnson website, as is the press release. Before I get into the results, let me remind you that some of the statements made during this call may be considered forward-looking statements. The 10-K for the fiscal year 2010 identifies certain factors that could cause the company's actual results to differ materially from those projected in any forward-looking statements made this morning. The company does not undertake to update any forward-looking statements as a result of new information or future events or developments. The 10-K is available through the company or online. Last item. During the call, non-GAAP financial measures may be used to provide information pertinent to ongoing business performance. Tables reconciling these measures to the most comparable GAAP measures are available in the press release or on the Investor Relations section of the Johnson & Johnson website at jnj.investor.com. Now I would like to review our results for the third quarter of 2011. If you would refer to your copy of the press release, let's begin with the schedule titled Supplementary Sales Data by Geographic Area. Worldwide sales to customers were $16 billion for the third quarter of 2011, up 6.8% as compared to the third quarter of 2010. On an operational basis, sales were up 2.6%, and currency had a positive impact of 4.2%. In the U.S., sales decreased 3.7%. In regions outside the U.S., our operational growth was 8.3%, while the effective currency exchange rates positively impacted our reported results by 8.1 points. The Western Hemisphere excluding the U.S. grew by 17.1% operationally, while the Asia-Pacific, Africa region grew 8.1% on an operational basis. Europe grew 4.9% operationally. If you'll now turn to the consolidated statement of earnings. Net earnings were $3.2 billion compared to $3.4 billion in the same period in 2010. Earnings per share were $1.15 versus $1.23 a year ago. Please direct your attention to the box section of the schedule where we have provided earnings adjusted to exclude special items. As referenced in the footnote, third quarter net earnings this quarter were adjusted to exclude an after-tax mark-to-market adjustment to the value of the currency option and deal cost related to the planned acquisition of Synthes, Inc. Net earnings on an adjusted basis were $3.4 billion and earnings per share were $1.24, up 0.8% versus the third quarter of 2010. I would now like to make some additional comments relative to the components leading to earnings before we move on to the segment highlights. Cost of goods sold at 31.7% of sales was 100 basis points higher than the same period in 2010, primarily due to the ongoing remediation work in our OTC business and the impact of integrating the Crucell business. Selling, marketing and administrative expenses, up 32.7% of sales, were up 130 basis points. As we discussed last quarter, expenses include investment spending behind our new products, as well as the fee on our branded pharmaceutical products included as part of the U.S. Health Care Reform legislation. Our investment in research and development as a percent of sales was 11.1%, consistent with the third quarter of 2010. Interest expense net of interest income of $117 million was up $22 million versus the third quarter of 2010 due to a higher average debt balance. Other income net of other expense was $308 million in the third quarter of 2011 compared to $292 million in the same period last year. Excluding special items, net other income was $624 million, which Dominic will address in his commentary. Excluding special items, taxes were 22.2% in the third quarter of 2011, bringing our year-to-date effective tax rate to 21.6%. Now turning to the consolidated statement of earnings for the first 9 months of 2011. Consolidated sales to customers for the first 9 months of 2011 were $48.8 billion, an increase of 6.2% as compared to the same period a year ago. On a year-to-date basis, sales were up 2.3 points operationally and currency had a positive impact of 3.9 points. On the consolidated statement of year-to-date earnings, I'd like to draw your attention to the box section. Adjusted net earnings of $10.7 billion in 2011 compares to adjusted net earnings of $10.4 billion in 2010. Adjusted earnings per share at $3.87 were up 3.8% versus the 2010 results. Turning now to business segment highlights, please refer to the supplementary sales schedule highlighting major products and/or businesses. I'll begin with the Consumer segment. Worldwide consumer segment sales for the third quarter of 2011, up $3.7 billion, increased 4.9% as compared to the same period last year. On an operational basis, sales increased 0.5%, while the impact of currency was positive 4.4 points. U.S. sales were down 4.5%, while the international sales grew 3.3% on an operational basis. Excluding the impact of lower U.S. over-the-counter or OTC revenues, operational sales grew approximately 3%. For the third quarter of 2011, sales for the OTC pharmaceuticals and nutritionals decreased 9.4% on an operational basis compared to the same period in 2010 with U.S. sales down 24.2%, primarily due to supply constraints. On March 10 this year, McNeil-PPC announced the signing of a Consent Decree covering the manufacturing facilities in Las Piedras, Puerto Rico and Fort Washington and Lancaster, Pennsylvania. To date, McNeil has achieved all major commitments under and is in compliance with the terms of the Consent Decree. Side assessments were completed on schedule, and McNeil is tracking to achieve the committed milestones. Site specific work plans are required to be developed and submitted to the FDA before the end of October. McNeil continues to operate the manufacturing facilities in Las Piedras and Lancaster. As we previously discussed, production volumes from these facilities continue to be impacted due to the additional review and approval processes. However, many of the key selective products are returning to the market and volumes will continue to ramp up throughout the remainder of the year and into 2012. Regarding the products previously produced at the Fort Washington facility, McNeil continues to work on the reciting of these products to other facilities. McNeil is making progress on the validations at these sites and expect a modest amount of certain products to ship in late 2011. We anticipate the balance of the portfolio of key selective products will continue to be reintroduced throughout 2012. Our Skin Care business grew 13.2% on an operational basis in the third quarter of 2011, with sales in the U.S. up 20.9% and sales outside the U.S. up 8.4% on an operational basis. The success of new product launches contributed to the strong sales growth achieved across most of the product lines, with the most significant contributions from Neutrogena and Dabao products. Baby Care products achieved operational growth of 4.1% when compared to the third quarter of 2010, due primarily to strong double-digit growth in lotions, creams and wipes outside the United States. Women's Health declined 4.8% on an operational basis. Sales in the U.S. were down 14%, while sales outside the U.S. were down 1.6% on an operational basis. The sales decline this quarter was primarily due to the impacted divestiture of certain brands. Sales in the Oral Care business increased 5.8% on an operational basis due to double-digit growth in LISTERINE sales outside the U.S. Wound Care/Other was down 2.8% on an operational basis compared to the same period last year, due primarily to the divestiture of PURELL in the fourth quarter of 2010. That completes the review of the Consumer segment, and I'll now review highlights for the Pharmaceuticals segment. Worldwide net sales for the third quarter of $6 billion increased 8.9% versus the same period last year. On an operational basis, sales increased 4.9%, with a positive currency impact of 4 points. Sales in the U.S. decreased 6.1%, while sales outside the U.S. increased on an operational basis by 18.5%. The marketing exclusivity for LEVAQUIN expired in June, negatively impacting worldwide pharmaceutical operational sales growth by approximately 5 points and U.S. growth by approximately 9 points. Positively impacting the sales growth in the quarter were sales related to the recent acquisition of Crucell and the impact of the amended agreement with Merck, which I'll discuss in a moment. Excluding the impact of items mentioned, the underlying worldwide operational growth was approximately 5%. Now reviewing the major products. Sales in the U.S. of our key immunology products, which include REMICADE, STELARA and SIMPONI were up approximately 8% versus 2010, with growth for REMICADE at 2.2%, STELARA at over 80% and SIMPONI at 15.7%. With the strong growth achieved by STELARA and SIMPONI, we continue to be the market leader in immunology in the U.S. Export sales of REMICADE were down 6% in the quarter, offset by a significant increase in international sales due to the impact of the implementation of the amended agreement with Merck. As a reminder, we began recording sales of products from the territories relinquished by Merck in the third quarter and the amended distribution agreement division of contribution income split of 50% went into effect July 1, 2011. On a combined basis, export and international sales increased over 40% due to the impact of the amended agreement. PROCRIT/EPREX declined operationally by 9.6% during the quarter as compared to the same quarter last year with PROCRIT down 13.7%, reflecting the double-digit market decline. EPREX is down 5.4% operationally due to increased competition in Europe, partially offset by strong growth in other major regions. RISPERDAL CONSTA, a long-acting injectable antipsychotic, was down 2.6% on an operational basis. Sales in the U.S. were up 2.8% and the total U.S. sales of our long-acting injectables, including INVEGA SUSTENNA, increased over 25% versus a year ago due to an increase in combined market share. Sales outside the U.S. were down 4.8% operationally, reflecting both the launch of XEPLION as INVEGA SUSTENNA is known in Europe, as well as continued pricing pressure primarily in Europe. VELCADE is a treatment for multiple myeloma for which we have commercialization rights in Europe and the rest of the world outside the U.S. Operational sales of growth was 11.5% due primarily to growth in Asia and Latin America. CONCERTA, a product for attention deficit hyperactivity disorder, declined 7.9% operationally in the third quarter as compared to the same period last year, with sales in the U.S. down 16.4%. The supply and distribution agreement with Watson Laboratories, Inc. to distribute an authorized generic version of CONCERTA in the U.S. became effective May 1, 2011. According to IMS, the authorized generic has captured over 3 [Technical Difficulties] In September, we received a positive opinion from the CHMP for INTELENCE 200 milligrams, which upon approval would reduce the bill burden by half for treatment-experienced HIV patients. And 3 key events for our new oral blood thinner, Xarelto, are expected to occur in the fourth quarter this year. First, the PDUFA date for the prevention of stroke and systemic embolism in patients with non-valvular atrial fibrillation or AF indication is scheduled for the end of the first week of November. Additionally, on November 13, we are looking forward to presentation of the results of the ATLAS trial for acute coronary syndrome of the American Heart Association or AHA. Lastly, we also intend to submit the sNDA for this indication by the end of the year. I will now review the Medical Devices & Diagnostics segment results. Worldwide Medical Devices & Diagnostics segment sales of $6.3 billion grew 1.7% operationally as compared to the same period in 2010. Currency had a positive impact of 4.4 points, resulting in a total sales increase of 6.1%. Sales in the U.S. were down 0.7%, while sales outside the U.S. increased on an operational basis by 3.9%. Excluding drug-eluting stent, worldwide sales increased over 3% on an operational basis. Now turning to the MD&D businesses, starting with cardiovascular care. Cardiovascular care sales were down 15.9% operationally, with the U.S. down 19.5% and sales outside the U.S. down 13.5% operationally. Excluding drug-eluting stent, cardiovascular care sales grew approximately 1% on an operational basis. Biosense Webster, our Electrophysiology business, achieved operational growth of 12% in the quarter. The continued expansion of the installed base of Carto 3, complemented by new product launches, made strong contributions to the results. This increase was partially offset by lower sales of endovascular products due to increased competition. The DePuy business had operational growth of 1.7% when compared to the same period in 2010, with the U.S. down 1.5% and the business outside the U.S. growing by 6% operationally. Pressure on pricing and procedure volumes persisted as a result of the economic trends, while favorable mix mitigated some of the price impact. Incremental sales from the acquisition of Micrus contributed to growth in the quarter. Operationally, hips were up 1% worldwide, driven by 8% operational growth outside the U.S., attributed to heads and cementless stems. In the U.S. hips declined 4%, impacted by the lower volume of metal-on-metal bearings and continued pricing pressure. Knees declined 4% on an operational basis, with the U.S. down 7% due to increased competition and a softer market. Sales outside the U.S. were down 1% operationally. The market was estimated to have declined modestly in the second quarter, with the U.S. down 2% and the worldwide market down 1%. It is estimated that this softness in the market continued into the third quarter. The Diabetes Care business achieved operational sales growth of 4.4% in the third quarter of 2011, with the U.S. business flat and the business outside the U.S. growing 9.8% operationally. Strong sales in the emerging markets offset the pressure on volumes in the developed markets. Ethicon worldwide sales grew operationally by 6.4%, with the U.S. up 8.1% and sales outside the U.S. up 5% operationally. Drivers of the increase include emerging markets growth in sutures, the strong uptick of recently launched products SECURESTRAP and PHYSIOMESH as well as the clearance sales, which grew 30% in the quarter. During the quarter, Ethicon received a complete response letter from the U.S. Food and Drug Administration regarding its Biologics License Application or BLA for the Fibrin Pad. The Fibrin Pad is a novel product candidate that combines Ethicon to biomaterials and plasma-derived Biologics to aid in stopping bleeding during surgery. This BLA marks the first of multiple submissions and approvals the company will pursue to deliver this novel product to surgeons and their patients. We are not planning on conducting new clinical trials to support our response. Ethicon is taking a phased approach to the development of the Fibrin Pad, including building a state-of-the-art facility to scale up supply in order to meet anticipated demand. Ethicon Endo-Surgery achieved operational growth of 3.4% in the third quarter of 2011, with the U.S. sales down 2.5% and sales outside the U.S. up 7.6% operationally. Growth was driven by increased market share for advanced sterilization products and outside the U.S., new product launches and the continued shift to minimally-invasive surgery drove double-digit growth for harmonic products and strong sales results for Endo products. Ortho Clinical Diagnostics grew 4.5% on an operational basis in the third quarter. Sales growth was driven by 8.7% operational growth outside the U.S. due to the success of the VITROS 5600 and 3600 platforms. Rounding out the review of the Medical Devices & Diagnostics segment, our Vision Care business achieved operational sales growth of 2.5% in the third quarter compared to the same period last year. Sales in the U.S. increased 4.1%, while sales outside the U.S. increased 1.7% on an operational basis. ACUVUE MOIST and the astigmatism lenses made strong contributions to the quarter, partially offset by softer sales of reusable lenses. That completes highlights for the Medical Devices & Diagnostics segment and concludes the segment highlights for Johnson & Johnson's third quarter of 2011. I'll now turn the call over to Dominic Caruso. Dominic? Dominic J. Caruso: Thank you, Louise, and good morning, everyone. I would like to provide some additional comments about our third quarter results, highlights on recent business and pipeline developments and then provide guidance for you to consider in refining your models for the remainder of 2011. Let me begin by sharing with you that this August, we celebrated our 125th year in business by ringing the opening bell at the New York Stock Exchange. It was a memorable occasion, and we celebrated this occasion along with many of our employees here at corporate headquarters. I just wanted to reflect for a moment on the fact that very few companies can claim a legacy of generating solid business results, such as a compound annual growth rate of over 10% in sales for 125 years, while also making important advances in the health and well-being of so many people around the world. Our employees have, throughout our history and certainly today, continued to deliver new products, innovative pipelines and expand our global presence in ways that honor that legacy and strengthen our ability to continue to address unmet healthcare needs for the long term. For the third quarter we produced solid sales growth, which is in line with analysts' estimates as published by first call. Excluding special items, we also delivered solid earnings per share in the third quarter of $1.24 per share, which exceeded analysts' estimates. During the third quarter, we saw a higher level of cost of goods sold and selling and marketing expenses, consistent with our expectation that we highlighted for you in our second quarter earnings call. And looking at the sell side models, it appears that many of you had not yet reflected this in your models for the third quarter. The higher level of cost of goods sold relates primarily to the ongoing remediation efforts in our McNeil Consumer Healthcare business, as well as the inclusion of the Crucell business. The higher level of selling and marketing expenses relate primarily to the launch of our exciting new pharmaceutical products and additional brand marketing expenses in our Consumer business. We also saw a higher level of other income from the completion of certain divestitures in the quarter. As we've done in the past, the income from this shift in our portfolio is generally used to invest in the business and in this case to also deliver higher earnings. As we take a long-term view of the global healthcare opportunities, we see trends and demographics that make healthcare a very attractive space. However, in the current period, we continue to see challenging macroeconomic conditions. Despite these near-term headwinds, I'm encouraged by the business outlook for our company. Across our businesses, we continue to gain approvals for key new medicines and launch exciting new product such as ZYTIGA and INCIVO. Our products are performing very well early in their launches, which is very encouraging. We are gaining or holding share across many of our key markets and continue to build our capabilities in emerging markets like India and China. We continue to make progress with satisfying the requirements of the Consent Decree with the FDA and ramping up production of over-the-counter products, including certain validation batches for the products previously produced at the McNeil Consumer Health Care Fort Washington facility and the reintroduction of TYLENOL Cold & Flu Severe caplets, just in time for the 2011 cold and flu season. Now turning to a few notable business highlights for the quarter. We continue to see positive developments within our pharmaceutical pipeline. The European commission approved INCIVO for the treatment of genotype 1 chronic hepatitis C and ZYTIGA for metastatic castration-resistant prostate cancer. Meanwhile in the United States, NUCYNTA ER received FDA approval for the management of moderate to severe chronic pain. REMICADE received FDA approval as the first biologic treatment for pediatric ulcerative colitis, and Xarelto gained a positive FDA advisory committee vote for the prevention of stroke in patients with atrial fibrillation. In our Medical Devices & Diagnostics pipeline, DePuy received FDA approval for TRUMATCH Personalized Solutions, a surgical instrumentation and computer software system that is designed to aid in knee implant positioning and improve procedure efficiency. Ethicon Endo-Surgery launched the ECHELON FLEX Powered ENDOPATH Stapler in the U.S., the industry's first powered endo cutter. MD&D is also seeing progress in emerging markets. Our LifeScan business introduced ONETOUCH SelectSimple meter in India, which offers a simple, affordable and effective option for self-monitoring of blood glucose levels, the latest in the series of market appropriate products that MD&D has been introducing to expand our reach to hundreds of millions of people in emerging markets who are now gaining access to healthcare. As you know, we take a highly disciplined approach to portfolio management. We are constantly evaluating our portfolio to ensure we are focused on businesses and opportunities in attractive growth areas where we can have the greatest impact. This means investing in new platforms for growth, as well as divesting other businesses and assets. The Synthes acquisition, which will strengthen our orthopedics portfolio, is proceeding on schedule and we've achieved 2 significant milestones. The European Union merger regulation filing was made in September, and Synthes has scheduled its shareholder vote to approve the merger for mid-December. We anticipate closing this deal in the first half of 2012. In other acquisition news, Ethicon Endo-Surgery announced a definitive agreement to acquire SterilMed, Inc. This acquisition will move us into the rapidly growing medical device reprocessing market and broaden the portfolio of products we can offer to our increasingly cost-conscious hospital customers. And in late September, we also acquired full ownership of the Johnson & Johnson Merck consumer pharmaceuticals company joint venture in the United States, which will continue to market products under the PEPCID, MYLANTA and MYLICON brands. In terms of divestitures this quarter, we completed the sale of the Janssen Animal Health business which we announced earlier in the year, and the MONISTAT* brand. Let me now provide some guidance for you to consider as you refine your models for the rest of 2011. Let me begin with a discussion of cash and interest income and expense. At the end of the third quarter, we had approximately $13 billion of net cash. This consists of approximately $31 billion of cash and investments and approximately $18 billion of debt and we continue to generate strong cash flows. For purposes of your models, assuming no additional major acquisitions during 2011, I'd suggest you consider modeling net interest expense between $400 million and $500 million, consistent with our previous guidance. Turning to other income and expense. As a reminder, this is the account where we record royalty income, as well as gains and losses arising from such items as litigation, investments by our development corporation, divestitures, asset sales or write-offs. This account is difficult to forecast due to the nature of some of these items. Assuming no major additional items of this nature and now considering the impact of gains from the various divestitures I highlighted earlier, I would recommend that you consider modeling other income and expense for 2011 as a net gain, excluding special items, ranging from approximately $1 billion to $1.1 billion. This is an increase from our previous guidance, reflecting the higher-than-expected increase in other income in the third quarter. And now a word on taxes. On a year-to-date basis through the third quarter of 2011, the company's effective tax rate excluding special items was 21.6%, or at the midpoint of our guidance. We suggest that you model our effective tax rate for 2011 in the range of 21% to 22%, consistent with our previous guidance. As always, we will continue to pursue opportunities in this area to improve upon this rate during the remainder of the year. Now let's turn to sales and earnings guidance. Our guidance continues to be based first on a constant currency basis, reflecting our results from operations, assuming that average currency rates for 2011 will be the same as they were for 2010. This is the way we manage our business, and we believe this operational view provides a good understanding of the underlying performance of our business. We also continue to provide an estimate of our sales and EPS results for 2011, with the impact that currency exchange rates could have and will use the euro as an example. Turning to sales. We would be comfortable with your models reflecting an operational sales increase on a constant currency basis of between approximately 2.5% and 3.5% for the year. This is consistent with our previous guidance as our business continues to build the momentum we expected. This would result in estimated sales for 2011 on a constant currency basis of approximately $63.5 billion. And while we are not predicting the impact of currency movements, to give you an idea of the potential impact of currency exchange rates for the remainder of 2011 or to stay where they were as of last week, as an example with the euro at approximately $1.38, then our sales growth rate will be positively impacted by approximately 2.5% for the year. This positive impact from currency is lower than our previous guidance, reflecting primarily the recent weakening of the euro. Thus under this scenario, we would expect reported sales growth to be between approximately 5% and 6% for the year, for a total expected level of reported sales of approximately $65 billion, slightly lower than our previous guidance due solely to the updated currency estimates. And now turning to earnings. I suggest that you consider full year 2011 operational EPS estimates of between $4.83 and $4.88 per share, which excludes the impact of special items and assumes the same average exchange rate for 2011 as we saw in 2010. This is an increase from our previous guidance and at this point in the year, we are also comfortable with a tighter range. While we are not predicting the impact of currency movements, to give you an idea of the potential impact on our earnings per share if currency exchange rates for the balance of 2011 were to remain where they were as of last week, then the impact of currency movements, primarily the euro, would be favorable by approximately $0.12 per share, a lower benefit to earnings from our previous guidance, reflecting primarily the recent weakening of the euro. Therefore our reported earnings per share, excluding special items, would be between $4.95 and $5 per share for our reported EPS growth rate of approximately 4% to 5%. This guidance reflects an increase in operational earnings per share growth, offset by a lower impact from currency. And at this point in the year, we're also comfortable with a tighter range. That concludes my comments on our operating performance this quarter and our guidance with respect to your models. Now, Louise, back to you.

Thank you, Dominic. Brooke, could you please give the instructions for the Q&A session?

[Operator Instructions] Your first question comes from Matthew Dodds with Citigroup. Matthew J. Dodds - Citigroup Inc, Research Division: Dominic, cost of goods sold, can we just go through the partial in more detail? Remediation, first, is that amount accelerating from where it was now to Consent Decree to give us some idea going forward? For Crucell, is that the impact the absolute gross margin of Crucell? Or are you putting more into the business? And then finally, you didn't highlight this but is the mix between U.S. OUS having an impact to your -- outside of just LEVAQUIN, which obviously hurt? But is there a broader theme here that's hitting the gross margin? Dominic J. Caruso: Right. I don't think there's a broader theme at all. I think if you look at the change in gross margin from this quarter -- for the quarter that were currently completed last year, there's really 2 main areas which I described. One is -- and they're about worth half -- about half each of the change. The first is the McNeil remediation cost. As you know, we have costs related to the ongoing compliance with the Consent Decree and obviously, not all the sales have returned to the market. So although some of the costs have been accelerating as we complete the work, I wouldn't necessarily project that into the following year, but of course in the following year, those remediation costs will then tail off. And obviously as the products return to the market, you'd see a different dynamic than what you currently see with costs, with the products not yet in the market. The other half of the change is really due to inclusion of Crucell. We had mentioned earlier in the year that Crucell is going to be dilutive to our earnings of about $0.03 to $0.04 a share. Just to give you an idea, whenever you acquire a company like Crucell, the assets obviously are written up to fair market value. So one of the things that we're experiencing right now is the -- what's known as the step-up in value of the inventory that we acquired. And obviously as that bleeds off in the future periods, then we have less of an impact from these negative gross margins from Crucell. And I think overall, the mix of the business actually just improved our gross margin by about 1 point -- and yes, about 0.1 point, I should say. So overall Matt, if you excluded the items that I just mentioned, Crucell and the OTC impact, actually, our gross margin performance would have been slightly better in the quarter compared to last year. Matthew J. Dodds - Citigroup Inc, Research Division: Perfect, Dominic. And then just one quick follow-up for the Xarelto filing PDUFA. Can you use any of the ATLAS data to send in at this point or had sent it in recently to look at things like the dosing, things like that? Or is it too late?

So are you talking for the AFib indication, Matt? Matthew J. Dodds - Citigroup Inc, Research Division: Right, for the AFib. Can you use any of the ATLAS data to kind of argue the case?

Well, the PDUFA date is coming very shortly on that one; November 5, I believe it is. So the timing is probably too narrow. Dominic J. Caruso: All right. My understanding is, Matt, that obviously when you complete the file, then the FDA presents that competed files to the FDA advisory committee for the AFib indication. As you know, that committee voted in favor of its approval.

Your next question comes from Larry Biegelsen with Wells Fargo. Larry Biegelsen - Wells Fargo Securities, LLC, Research Division: Dominic, maybe we can start with an operating margin question. The company's long-term goal is to grow earnings faster than sales but in 2011, I think you said you expect about 50 to 100 basis points of margin deterioration. And I think recently you've been saying that the Street underestimated how much you're going to spend on the OTC relaunches in 2012. So you're suggesting, at least to me, that the Street's modeling may be too much in margin expansion next year. Do you still think you can grow earnings faster than sales in 2012? Or will the relaunch of the OTC products eliminate any margin improvement? And I just have one follow-up. Dominic J. Caruso: Right. Great question, Larry. You're right that we signaled early in the year that we would probably have a decline in margins this year, probably between 0.5% to full percent and we're seeing that obviously through 9 months. As you know, we want to invest heavily behind the products that we're launching to make sure they are of the gate in a strong way. My comments about the launch of the McNeil products the following year once we're fully into the market is simply just to highlight that we will have additional cost in 2012 because we want to make sure these products get launched absolutely the best way we can possibly do that. Now I wouldn't read into that, that that's incremental to the current SG&A line because in fact as the new products that we're launching now in the pharmaceutical pipeline begin to ramp up, the relative spend on those launch products will go down versus the sale. So what we have today is relatively early launches with modest sales, although ramping up very quickly a lot of cost to get those products off the ground. As those tail off, we then would replace some of that cost with the McNeil, appropriate McNeil launch expenses throughout 2012. But I think the factors that led to margin erosion this year are not going to be present in our business in 2012. Larry Biegelsen - Wells Fargo Securities, LLC, Research Division: That's helpful. And then just one on the knee market. I mean, it looks like your U.S. Knee business, if I heard correctly, decelerated. I think it was negative 5% last quarter in the U.S., this quarter negative 7%. Could you talk a little bit about what's going in the U.S. knee market and the outlook there, please? Dominic J. Caruso: Louise, do you have some facts on that?

So in the U.S. knee market, we actually market softer, we believe, because of procedure volumes and we won't know that for sure until everybody else reports. And we're also seeing more competition in the market. So our Knee business is down 7%, but we are seeing competitive dynamics go on.

Your next question comes from Ian Sanderson with Cowen. Ian Sanderson - Cowen and Company, LLC, Research Division: Two quick ones for Louise. First of all, can you give us some sense of ZYTIGA sales in Q3? And then secondly, are you seeing any impact on STELARA sales from the JAMA article that came out in August discussing some of the cardiovascular side effects with that mechanism? Dominic J. Caruso: Sure. Well, this is Dominic, Ian. Look, we're very pleased with ZYTIGA sales, and I think ZYTIGA sales, although early, are very healthy. In fact, I think they contributed about 1.5 points of growth to our pharmaceutical business compared to the same quarter last year. So they're off to a great start, and we're very pleased with the performance of that product. And for STELARA, Louise?

Now, STELARA, we're not seeing an impact on that. We actually showed some very positive data in May 2011 about the CV side effect profile. So we are not seeing that for STELARA. Ian Sanderson - Cowen and Company, LLC, Research Division: And may I ask you a quick follow-up on ZYTIGA? Should we anticipate an interim look at the pre-chemo data set before year end?

We're actually -- we're guiding to the fact that we would file based on overall survival. So we're not counting on that at this point.

Your next question comes from Sara Michelmore with Brean Murray. Sara Michelmore - Brean Murray, Carret & Co., LLC, Research Division: Dominic, just another question on sort of the sales and marketing spend. If I just look at kind of what you're inferring for Q4 based on some of the guidance commentary for the operating -- sorry, the non-income or the other income guidance change. It does look like the sales and marketing expense, maybe in terms of the incremental growth, is tailing off in Q4. And I'm wondering if that's just a function of noise in numbers or if that's the case? Dominic J. Caruso: No, I think it should tail off a little bit in the fourth quarter. I think in the third quarter, we had -- in addition to the launch of the products, I mentioned some consumer brand marketing expenses that ramped up during this part of the year. And we won't see that same phenomenon. We will see the ramp-up as we saw in the third quarter, in the fourth quarter. So I think it is a good observation that should tail off a little bit in the fourth. Sara Michelmore - Brean Murray, Carret & Co., LLC, Research Division: Okay. And then just in terms of the McNeil over-the-counter products, I mean in terms of how you guys look at what you hope to get back to, I mean what are your latest thoughts on either brand recapture or what you would target the sales to be on the reentry there? If you can give us just any thoughts about how you're looking at the market and any studies you've done in terms of brand loyalty and things like that. Dominic J. Caruso: Right. Well, we're not going to give you obviously specifics on particular market share or dollar volume but suffice it to say, that obviously our folks are ready to launch these great products back into the market and do the very best they can to gain back the consumers. Now, one bit of data that we saw was that even though private label has taken significant amount of share in that particular segment of the market, our research indicates that the trust factor with respect to our products, the McNeil pediatric products in particular with moms is still 2x the level of the products that are currently available for moms in the marketplace. So we're very encouraged by that. These products have a great legacy, as you know. I think everyone expects that Johnson & Johnson will return these products to the market in the best possible way. And there will be also innovation as these products return to the market. We talked earlier in the year about innovation in dosing, which addresses a major safety issue with children's pediatric products. So I think you should expect us to do the best we can along with innovation, and we're hopeful that the loyalty that these brands have achieved over many years will stay with us as we begin to bring these products back to consumers in 2012. Sara Michelmore - Brean Murray, Carret & Co., LLC, Research Division: And then just a clarification of some of the investment that you would put on that. I assume you thought that it's just brand promotion and also, we should expect things like couponing and things like that to be part of the mix. Is that... Dominic J. Caruso: Yes, I would say -- I don't want to tip our hand, but I would say our marketers are very good at knowing what they need to do to attract consumers. I mentioned innovation. So I think it will be a mix of brand marketing expenses, couponing, innovation, et cetera, a surround sound impact to get consumers back to the loyal consumers they were prior to the recall.

Your next question comes from Mike Weinstein with JPMorgan. Michael N. Weinstein - JP Morgan Chase & Co, Research Division: Dominic, just to follow-up first, Dominic. I want to engage your expectations going into the November 5 PDUFA for Xarelto. Is it your expectation that you'll get the approval? Dominic J. Caruso: Well certainly, we can -- I don't want to speculate on what the FDA will do. All I can do -- all we can do is refer back to the FDA advisory committee meeting, where I think the vote was in favor of 9 to 2 for an approval. Michael N. Weinstein - JP Morgan Chase & Co, Research Division: Okay. And then second, let me just kind of take your read across your various MD&D businesses. To the U.S. side, DePuy continues to struggle. There's still the same type of weakness we're seeing in some of the other businesses, whether it's Ethicon Endo, parts of Ethicon. Do you have anything that gives you encouragement on some of the underlying markets? And could you talk as well about pricing across those various businesses? Dominic J. Caruso: Right. Well, we continue to see -- as I said earlier in my comments, we continue to see pretty tough macroeconomic conditions in terms of hospital surgical procedures, for example, we think are impacted by the macroeconomic conditions. And we now have 6 quarters of year-over-year declines in these procedures. We also see physician office visit declining dramatically. I think we're now down -- up to 9 consecutive quarters of physician office visits declining. So the volumes are still very soft. We're obviously nowhere near prerecession levels in volumes. In terms of pricing, I would say that the level of negative price net of mix in hips, for example, in the U.S. is around the same low single digits as we saw in the second and first and first and fourth quarter of last year. Now we don't see an acceleration of significant price declines in the this market but still soft price, still negative price, but just not an acceleration of that negative price. Michael N. Weinstein - JP Morgan Chase & Co, Research Division: Okay, that's helpful. And then last question, on Synthes, do you have any incremental visibility at this point on the structuring of the transaction? So if you could comment on financing and the use of cash U.S. versus OUS. Dominic J. Caruso: No, Mike, I don't have any incremental visibility to share with you, other than to say we're making very good progress in that regard. We're making good progress overall in planning for the acquisition, and I'm encouraged. And obviously, we're going to keep working to make this transaction much more efficient from a financing perspective in the way we modeled it. But it's too early to give you any specifics and when we know the specifics, we'll actually be very close to the closing of the deal just because of getting all the approvals in line. So that's the best update I can give you at the time.

Your next question comes from Derrick Sung with Sanford Bernstein. Derrick Sung - Sanford C. Bernstein & Co., LLC., Research Division: I was wondering if you could start by commenting on 2 things. European austerity, what's the impact that you saw this quarter? And how are you seeing that change at all versus the past few quarters and looking forward? And then secondly, kind of related to that in the U.S., what are your expectations for the deficit reduction discussions and the super committee discussions coming out of D.C. as they might impact your business? And how might you be preparing for that? Dominic J. Caruso: Right. Well, Derrick, with respect to the first question on European austerity, we're still seeing across the pharmaceutical business a mid -- in the European pharmaceutical business, mid single-digit impact, incremental impact this year. We expected this in the beginning of the year, and we're seeing it play out through the year. In our Medical Devices & Diagnostics business, we're seeing low single-digit impact to that -- to European Austerity Measures in terms of overall price, although we are seeing some additional volume contraction in Medical Devices in Europe, a little bit more than what we saw at the beginning of the year. The impact, for example in our pharmaceutical business, we estimate in the $30 million range just for the quarter. So it's in our numbers. It's not all that significant and it accelerated a little bit, but mostly in medical device volume, not in price. Derrick Sung - Sanford C. Bernstein & Co., LLC., Research Division: Okay. And your expectations for the super committee discusses and D.C. discussions. Dominic J. Caruso: Yes, well we're very hopeful, as I think all American citizens are that the super committee will come to a good conclusion and a set of solutions that will help reduce our deficit without any draconian or drastic measures, certainly none that we hope would impact negatively on healthcare. We're aware of the fact that if a stalemate occurs, then of course there could be 2% across-the-board cuts, for example, in Medicare. But it's too early for us to estimate whether that will go that way or not. So we're keeping a close eye on it and obviously, we're doing whatever we can to help the committee understand the impact on healthcare overall. But other than that, Derrick, other than we're hopeful, I can't give you any other comments with respect to what they might come up with. Derrick Sung - Sanford C. Bernstein & Co., LLC., Research Division: Okay. Can I just -- can I squeeze a quick one in for Louise? Louise, could you give us the spine growth rates?

Sure. So worldwide up 1%, U.S. down 3% and OUS up 10%, operational.

Your next question comes from Rick Wise with Leerink Swann. Frederick A. Wise - Leerink Swann LLC, Research Division: If I could start off with -- just a general question, Dominic. I mean, there's so many things going on in the macro environment these days, U.S., OUS. I'm just sort of curious, do you feel better or worse after the third quarter in terms of the outlook for the business and the environment? Do you feel the business is more challenged in the procedure front and pricing front than you expected? Just trying to get a sense of where you are. Dominic J. Caruso: Yes. That's a great question. I think the macroeconomic conditions are still troublesome in terms of their impact on healthcare utilization. So overall, the macro conditions continue to be challenging and there -- I would call them persistent. I don't see them necessarily getting worse, I just see them persisting. So from a macro perspective, that's what I would say. With respect to our company in particular, I feel much better with respect to our business as we're moving through the year. For example the Consumer business had positive growth for the quarter, and obviously, it's impacted by the recalls. But when you exclude that impact, which is obviously very obvious, the business grew about 3% in the quarter. That's slightly better than the previous quarter, so it's gaining momentum. You saw the skincare results, which we think are really phenomenal. So the innovation is still taking hold in some segments of the Consumer business, and so we're very encouraged by that. We're obviously extremely encouraged by the overall performance of our products in pharmaceuticals where we're launching products, they're gaining momentum, they're being well accepted by the physician community. And we obviously are very excited to see them do that. And like a product like ZYTIGA to take such immediate hold on the market obviously is significant unmet need. So we feel good that those products are performing as we all expected they would be based on their clinical profile. And in Medical Devices & Diagnostics, in a very tough overall macroeconomic climate with lower volumes, the business continues to maintain or hold share across many of its businesses and also develops and continues to develop new innovations. So even in our Knee business, for example, despite the challenges in that marketplace, we're still coming forward with new innovations. I think overall as the market recovers, we should be in very good shape having held on to share across many of our businesses to then accelerate growth once the market recovers. So in summary, I'm still cautious about the macroeconomic environment, but I feel very good about our particular business and the momentum we're gaining. Frederick A. Wise - Leerink Swann LLC, Research Division: Yes, that's helpful. Two quick follow-ups. You commented a little bit about SG&A, but I just wanted to think about the operating leverage going forward. At 32, I think for example, percentage of sales this quarter, something like that, it is one of the higher percentage of sales in a couple of years. Can you help us understand when does that normalize? Or maybe we should think about that number on a -- what was the incremental investment spend for new product launches, if you can quantify that. And I'll just ask my last quick one. I'm sure you're sick of being asked about acquisitions, but cash is growing. You always allude to it in your prepared commentary. Should we expect that even with Synthes on your plate that we're closer to an additional flow when we look at over the next 6, 12 months? Dominic J. Caruso: Right. So with respect to SG&A, just a couple of comments. One is you're right, it is higher than what we've seen it. But just to put things in perspective, the healthcare reform fee is unfortunately in that line item now. That's where all companies record it. And just to give a sense, that's about 2/10 of the change. The balance is the investment spending that I talked about in our pharmaceutical business and the brand marketing expenses that we saw accelerate in the third quarter for our Consumer business. Going forward, Rick, I guess the best way to describe it is we're in a situation now where we're investing heavily in the early launches of these exciting new pharmaceutical products. As these launches then ramp-up and the sales take hold in the marketplace then obviously, the relative amount of spend compared to the sales should be lower going forward. So we don't think that this is a steady state level of SG&A expense at all, given the fact that we have a situation where we're launching new products and they're just right out of the gate, obviously modest sales whenever you do that. So overall this is -- again, you're right, it's a relatively high number. We did signal that in the second quarter to make sure that the investment community was aware of it. We think it's a wise spend because we want to make sure that we're best positioned for 2012 and going forward, but we should be able to leverage that line item in the future. And then with respect to acquisitions, look, you know us to be very disciplined acquirers and you probably would not be surprised if I told you we don't spend the money we have just because we have the money we have, right? We're very disciplined as to what we look at. We're doing a very significant acquisition. As I said earlier to Mike's and the answer to Mike's question, we're trying to develop a financing strategy for the Synthes acquisition, which will be much more efficient than the way we've modeled it. Of course, that would entail using more of our cash than what's currently modeled. So we want to get through that first before we make any other decisions. But we're constantly looking for growth opportunities, and we'll constantly and continuously be very diligent and disciplined in what we pay for assets. So that's all I can give you now as an update in that regard. And so as we did this quarter, we'll continue to look for even smaller opportunities, for example, the SterilMed acquisition and other acquisitions that add to our portfolio going forward. As you know, we are generally always in the marketplace looking for growth opportunities. We just want to be disciplined about what we pay for those assets.

Your next question comes from Bob Hopkins with Bank of America. Robert A. Hopkins - BofA Merrill Lynch, Research Division: Just 2 quick ones. First, on a question below the revenue line and then a question on the general surgery marketplace. So just to clarify your comments on gross margin, am I reading it right, Dominic, that excluding Crucell remediation, the gross margin would have been about 110, 120 basis points higher than what you reported with the cost associated with those 2 things about evenly split? Dominic J. Caruso: Yes. The cost is about evenly split between the 2 of those, and that's about the impact. You're exactly right. Robert A. Hopkins - BofA Merrill Lynch, Research Division: Okay. And then on the other income line, the $200 million increase that you're now modeling or guiding to for this year, is that all related to gains that we saw this quarter in that line item? And if you'd be willing to, could you talk a little bit about what those gains were? Dominic J. Caruso: It is related to the gains that we saw this quarter. So we typically don't want to forecast these divestitures because the timing of such is not necessarily certain but now that we have them, we've increased our expectation for the year, so that, that increase is related to those particular acquisitions and those particular divestiture gains. They're really related to 2 divestitures in particular. One is the Animal Health business, which we announced earlier in the year, which was not a strategic part of our overall portfolio. And that business was divested and sold to Eli Lilly. And -- so it just happened to close in this quarter. And also, when we look at our consumer brands, the cuts that we evaluate, which of the brands we want to invest behind and which we think have -- might be better in someone else's hands. And we, this quarter, sold the MONISTAT* brand in our Women's Health business. Robert A. Hopkins - BofA Merrill Lynch, Research Division: Great. And that's very helpful. And then just one quick question on Ethicon and Ethicon Endo-Surgery. You commented on DePuy and the continuing challenges in the marketplace there and you made a suggestion that in European markets, you might have saw a little bit of incremental decrease or decline in volumes this quarter. And yet if I look at Ethicon and Ethicon Endo, looking at the numbers, it looks like there was a decent quarter in both of those businesses. So my question is could you comment on general surgery market trends and your results at Ethicon and Ethicon-Endo? Was that mostly share gains? Did the market feel a little better in the general surgery markets? Were there any one-timers in there? I'm wondering if you could just give some more of your thoughts on those 2 divisions within MD&D. Dominic J. Caruso: Yes. I'll start with some comments and then turn it over to Louise. There are no one-timers that impacted that. We did launch some new products in the marketplace in Europe. The business did perform better in Europe. My comments on overall trends throughout Europe are still hold up and in fact, we're seeing some lower volumes. But I would say overall, our performance in Europe in those particular business is stronger this quarter. And obviously, with the market being soft, that implies that we're gaining some share across those markets in Europe. Louise, anything else to add?

Yes. So I think in Europe for Ethicon-Endo, we talked about HARMONIC has strong double-digit growth there. So it's just doing very well in Europe, and we're introducing new products.

Your next question comes from Jami Rubin with Goldman Sachs. Jami Rubin - Goldman Sachs Group Inc., Research Division: Just a follow-up on the previous question. Dominic, I'm confused. The divestitures that were recorded as part of other income, how can those be considered part of non-GAAP ongoing earnings? And is that part of the $316 million that you recorded which clearly drove the upside in earnings? That's the first question. And the second question is, CONCERTA U.S. sales were only down 16%, but Watson now has about 81% share of the market. So I'm just wondering if that is still wholesaler stocking or if that reflects economics from the AG. If you could just clarify that and what we should expect in the fourth quarter. Dominic J. Caruso: Sure. So on the divestitures and then you talked about the $316 million number. So we've had -- consistently, when we present our... Jami Rubin - Goldman Sachs Group Inc., Research Division: [indiscernible] $624 million. Dominic J. Caruso: Pardon me? Jami Rubin - Goldman Sachs Group Inc., Research Division: I'm sorry. Total other net was $624 million. So maybe if you could just clarify that for us. Dominic J. Caruso: Sure, sure. So the divestitures that are in that line item this quarter relate to the 2 divestitures that I spoke about earlier, Animal Health and the MONISTAT* business. You asked about how they can be included in -- whether or not excluded, I guess, to arrive at the non-GAAP number. We've consistently not excluded any gains or losses with respect to asset sales or divestitures in our numbers. If you go back through our history, you'll see several years ago, we divested the Advanced Wound Care business or the Breast Care business, et cetera, that are all part of our ongoing operations. And the reason for that is it's essentially a shift in our portfolio mix. We're just shifting where we're going to spend our money. And when in fact those divestitures happen, we take the opportunity to redeploy those gains in higher growth areas and higher investments in the business or as was the case in this particular quarter, to deliver whatever extra there was after that to the bottom line, which is essentially why I think we had better earnings this quarter than what many of your models had estimated. The one item that we did carve out was in fact just the change in the option value for the mark-to-market impact of the option to buy foreign currency, the Swiss franc in particular, with respect to the Synthes transaction. That clearly will fluctuate quarter-to-quarter. We've carved it out last quarter, for example, when it was a gain. We pulled it out of our numbers. And this quarter was a loss as the Swiss franc then weakened. So we're typically very consistent with what we pull in and out of the numbers, and it's not unusual at all for us to have divestiture gains or asset sales or write-offs, et cetera, in that line item. With respect to CONCERTA, maybe, Louise, you can take that question.

So, Jami, you're correct. The market share that's going to the AG, the authorized generic, is about 75% to 80%, depending on whether it's scripts or dollars of the CONCERTA market share. But as a reminder, we do share in the economics of that. And there was no big fluctuations in the pipeline from our end. For Watson, you'd have to ask them.

Your next question comes from Rajeev Jashnani with UBS. Rajeev Jashnani - UBS Investment Bank, Research Division: I had another question on other income, and I guess that's 2 questions on other income. One is does the current guidance reflect the divestiture of the derm assets to Valeant? And then secondly, I was wondering if you could just provide some -- I understand it's difficult to predict, but if you could provide some visibility on just what the underlying other income is to help us as we look to 2012. Dominic J. Caruso: Sure. Well as I said earlier, Rajeev, we don't typically include divestitures in our guidance unless they're completed. So this guidance for the year now of $1 billion to $1.1 billion does not include the impact for the divestiture of the Ortho Derm business. Whether that closes this year or not, we'll have to wait and see. Reflecting back on Jami's comment earlier, now that we have a higher level of other income because of divestitures that we did close on, we of course increased our overall guidance for the year to reflect that. The overall underlying other income, think about this as essentially where we record the base continuous level of income there as royalty income. Royalty income is roughly just over $100 million a quarter for us. And so if there was nothing else going on in that line item, no asset sales, no divestitures, no write-offs, et cetera, then we would typically have about $400 million of royalty income. But of course if you look through the history of our P&L, there's always something going on in that line. And that's the primary reason why we give you guidance on that line because we know it's difficult for you to predict and it's a difficult line for us to forecast, but we try to be transparent and just give you what we think our best guess is of what that line item is going to do in our guidance. Rajeev Jashnani - UBS Investment Bank, Research Division: Great. And I have one follow-up, if I may, on SIMPONI. There was a big step-up sequentially in SIMPONI ex-U.S. sales, and I was just wondering if that was related to the contract change with Merck or if this is really the good underlying number we should look at for SIMPONI ex-U.S. on an ongoing basis.

So the incremental piece of the contract was some impact, but not the big step-up that you saw in the quarter. And what it was, was the prior quarter, in the second quarter, had some changes in the inventory level. So that prior quarter, second quarter, was not a good prediction. So the SIMPONI now is probably clean in this quarter, the third quarter, and does include the Merck, amended Merck agreement, but it's a small portion of the change.

Your next question comes from Kristen Stewart with Deutsche Bank. Kristen M. Stewart - Deutsche Bank AG, Research Division: I just want to be clear again on the other income line item. Sorry to beat a dead horse. But the difference in guidance now, that $200 million, is that just fully the divestiture? Or maybe it would be helpful if you could just break out what the gain was in this particular quarter because there's a lot of moving parts. Dominic J. Caruso: Right, right. No, it is an increase in our estimate because of the now known closure of these divestitures. So we've increased it to the $1 billion to $1.1 billion line item. That's the reason for the increase. The rest of what can happen in that line item is very difficult to predict, Kristen, as you can imagine. But we're trying to give you our best guess for where that line item might come out for the year. Kristen M. Stewart - Deutsche Bank AG, Research Division: Okay. So $200 million is probably against all parties on what the difference was this quarter related to that divestiture gain? Dominic J. Caruso: Yes. I don't know what you each had in your models, but we obviously saw these things close this quarter. And they were several hundreds of millions of dollars more than the run rate in that line item, which is why we increased the guidance accordingly. Kristen M. Stewart - Deutsche Bank AG, Research Division: Okay. So the increase in guidance was just an underlying base. So it was just simply a function of the divestiture gain, not any increase in the underlying performance of the business. Dominic J. Caruso: Right. Kristen M. Stewart - Deutsche Bank AG, Research Division: Okay. And then just on the cardiovascular franchise, can you just give us any update that you might have on the unwinding of the stent business and then maybe a little bit more color on the endovascular sales. You had mentioned that, that was down in the quarter, I believe.

Yes, it was down in the quarter. Kristen M. Stewart - Deutsche Bank AG, Research Division: I wasn't sure if that was within the cardiology in it or if that's included within the DePuy segment.

The which statement? Kristen M. Stewart - Deutsche Bank AG, Research Division: I thought you had said that endovascular sales were down. I mean, I said that within the context of cardiovascular sales, overall. But then I think Micrus was included within DePuy, so I was a little confused on what you had mentioned in your prepared remarks, Louise.

Okay. So this is an endovascular stent. You're right. Micrus is part of the DePuy business, but in the quarter's business is the endovascular stent business, basically. Dominic J. Caruso: Right. Kristen, think of it as DePuy business also has a neuro business, and that's where the micro business is included with the neurosurgery business. That's the way we manage it. But yes, endovascular is included. The peripheral vascular system is included in what we call the cardiovascular pair portion of the business. Kristen M. Stewart - Deutsche Bank AG, Research Division: Okay. So it's just the neuro and the DePuy? Dominic J. Caruso: Yes, that's correct. Yes.

Correct. Kristen M. Stewart - Deutsche Bank AG, Research Division: Okay. Anyway, any update on the stent unwinding and any changes in terms of potentially selling that business or finding alternatives versus just shutting it down? Dominic J. Caruso: No changes from what we described before. We're exiting the business as we said, and we expect to stop manufacturing the site for stent at the end of this year.

Your next question comes from Matt Miksic with Piper Jaffray. Matthew S. Miksic - Piper Jaffray Companies, Research Division: So a follow-up question on MD&D in ortho and spine, then I have one on the Consent Decree. Still curious, you're heading into, I guess, in the fourth quarter here, what was really the big step-down in hips last year, granted that your knees have been kind of bouncing along at a negative number for the market for a couple of quarters now. And maybe Q3 looks like it will be the same, particularly in the U.S. But do you think -- I hate to lean on comps, but you are facing some significantly easier comps as you're heading into Q4. Are you expecting -- should we expect any improvement in the growth rate? And to what degree does your performance over the next couple quarters have anything to do with your ability to get out from under this hip recall? Dominic J. Caruso: Well one thing about the quarter is that, I think is a valid observation, Matt, is that in fact fourth quarter of 2010 was a pretty significant price decrease. That's when we started to see some very significant price decrease, and that's actually tailed off a little bit throughout the quarters. And in the third quarter price, for example, in hips was several points lower than what it was in the fourth quarter of 2010. And net of mix, that was the case as well. So mix was a little better in the third quarter of '11 compared, for example, in the fourth quarter of '10. So if that trend continues then obviously, that's a positive sign for those comparables. And obviously, the same is true with knees. We saw better impact of mix in the third quarter of '11 than we saw, for example, in the fourth quarter of '10 or even the first quarter of '11. But that's positive. Unfortunately, offsetting all that is the continued, as I mentioned earlier, persistent softness in the level of procedure volumes. So we'll have to see whether that picks up or not in the fourth quarter. Matthew S. Miksic - Piper Jaffray Companies, Research Division: I guess just as I think about this persistent minus 1%, minus 2% growth into easing comps, that would kind of suggest that the market would be deteriorating further, right? If that's in fact the case, we continue to clip along it at minus 1%, say, or minus 2%. Is that a trend that you think -- is that where we're headed? Dominic J. Caruso: Well it's hard to predict, Matt, but persistent is obviously the best way I would describe it. And we have seen, as I mentioned earlier, 6 consecutive quarters of hospital surgery growth declining quarter-over-quarter. So even from a comparable point of view, 4 quarters ago, it's still declining from what was then a low rate of overall comparison. So take that for what you will, but the signs, as I said earlier, we're still cautious about the overall economic -- macroeconomic conditions and their impact on healthcare utilization. We're very positive about how we stack up in that marketplace, given new product launches, et cetera. Matthew S. Miksic - Piper Jaffray Companies, Research Division: Fair enough. And then on the Consent Decree, I just -- one of the things that we've noticed, I guess, in the directives heading out of the FDA is that the agency apparently wants to see more consistency in CAPA compliance across divisions of the companies that it regulates. Is that -- first, I guess it will be helpful if you could give us some sense as to your compliance program at this point, having a fairly decentralized history. Is your compliance program now kind of a centralized program for CAPA or for the rest of your quality and regulatory? And is that, I guess, is what I'm describing consistent with what you're seeing and look for here in this process? Dominic J. Caruso: Right. Well just as a reminder, Matt. It's a great question. Just a reminder, the Consent Decree relates to specifically the 3 McNeil plants, not the Johnson & Johnson overall or any other plants. We have 120 manufacturing plants, and we're inspected by regulatory authorities, including the FDA and other foreign authorities all the time. The inspection level is going up as a matter of fact, and we continue to bode very well with the outcome of those inspections, with trending more favorable than we've had in the past. I would say that overall, we did in fact create a comprehensive enterprise supply chain within Johnson & Johnson that brought together the manufacturing and distribution, but as well as the quality component of our supply chain as a one Johnson & Johnson approach to quality. That's something that Bill Weldon announced more than a year ago now. And so we are taking a more comprehensive view of quality across the enterprise of Johnson & Johnson.

So with respect to everybody's time, we'll take one last question and then get some remarks -- closing remarks from Dominic.

Your final question comes from David Lewis with Morgan Stanley. Steve Beuchaw - Morgan Stanley, Research Division: It's Steve Beuchaw in here for David. A follow-up first on DePuy business. Now that you're getting closer to the Synthes organization and a bit further down the path toward integration, I wonder if you could give us an update on how you're thinking about interfacing with hospitals as a combined organization, that you'll have what would appear to be as complete product line in ortho, trauma and spine as there is in the business. How does that position you to gain share? How does that give you more levers to use in your interactions with hospitals? Dominic J. Caruso: Right, right. Well it's a great observation, Steve. We should have you come with us when we're talking to hospitals CFOs and procurement specialists, I guess. Obviously, we're very pleased to have the broadest offering in the orthopedic marketplace with the inclusion of Synthes, and also the fact that Synthes products, as you know, are extremely well regarded in the industry. And I think we'll learn from the Synthes organization as well. So I think you're pointing out what I think appears to be the obvious for most people that we expect that with the combination of Synthes, we'll be the leader in the orthopedics market with continued innovation. And obviously, when a hospital wants to have a discussion about the orthopedic space in general, they can turn to the Johnson & Johnson business and have a full wholesome discussion. And the products even within the spine portfolio are generally complimentary with the products we already have in our spine portfolio. So I think we're in a very good position there to have a seat at the table. And what will turn out to be a pretty competitive marketplace going forward, I think will be very strong in that marketplace. Steve Beuchaw - Morgan Stanley, Research Division: We'd always be happy to join you in any of those discussions. One other question. I just wanted to get your latest thoughts, Dominic, on where things are headed with the FDA approval processes, both the 5, 10-Ks in for novel technologies. On one hand it seems like we're seeing an acceleration of legislative activity aimed at making these processes simpler, but then on the other hand we see CMS and the FDA working harder to coordinate approval and reimbursement for new technologies. So at this stage, to what extent do you think these are good indicators of where things might go? Maybe 5, 10-Ks get more predictable, and new technologies get a little bit more scrutiny. Where do you see this going? Dominic J. Caruso: Yes, it's a great question. Look, we would just be speculating if we gave you sort of any definitive kind of position on this. But it is true that there is a movement to try to differentiate, if you will, the products that should get 5, 10-K and rapid approval in the marketplace because of relatively low risk or they're obviously the predicate devices. It's something that should be comparable to the current device and differentiate those from the products that would require more sort of PMA and extensive clinical trials as the products become or those development innovations become more complex. I think a company like Johnson & Johnson having the expertise that we have across a broad portfolio of not only medical device products, but obviously our pharmaceutical business as well positions us very well to have those kinds of discussions and dialogue with the FDA of what's appropriate in evaluating the particular product in question. So I would just say you've made a good observation. I can't predict where it's going to come or how it's going to come out, but I believe that we're in a great position to have that dialogue with the FDA and help them arrive at a sensible solution for the industry. Great. Thanks, everyone. And we're very pleased with our third quarter results, and we expect to continue to build on these core strengths and the recent launches in our business. And I remain confident in our prospects for the remainder of this year and beyond. And I want to thank the dedication, focus and integrity of the people of Johnson & Johnson that make all that possible. I look forward to speaking with you again in January and updating you on our fourth quarter and full-year results at that time. Thank you for your time this morning, and have a great day.