Douglas A. Berthiaume - Chairman, Chief Executive Officer and President John A. Ornell - Chief Financial Officer and Vice President of Finance & Administration

Ross Muken - ISI Group Inc., Research Division Daniel L. Leonard - Leerink Swann LLC, Research Division Douglas Schenkel - Cowen and Company, LLC, Research Division Isaac Ro - Goldman Sachs Group Inc., Research Division Amit Bhalla - Citigroup Inc, Research Division Daniel Brennan - Morgan Stanley, Research Division Jonathan P. Groberg - Macquarie Research Amanda Murphy - William Blair & Company L.L.C., Research Division Timothy C. Evans - Wells Fargo Securities, LLC, Research Division Derik De Bruin - BofA Merrill Lynch, Research Division Daniel Arias - UBS Investment Bank, Research Division Tycho W. Peterson - JP Morgan Chase & Co, Research Division Peter Lawson - Mizuho Securities USA Inc., Research Division Steve Willoughby - Cleveland Research Company

Good morning, and welcome to Waters Corporation Second Quarter 2013 Financial Results Conference Call. [Operator Instructions] This conference is being recorded. If anyone has any objections, please disconnect at this time. I would like to introduce your host for today's call, Mr. Douglas Berthiaume, Chairman, President and Chief Executive Officer of Waters Corporation. Sir, you may begin. Douglas A. Berthiaume: Thank you. Well, good morning, and welcome to the Waters Corporation Second Quarter Financial Results Conference Call. With me on today's call is, as usual, John Ornell, Waters' Chief Financial Officer; Art Caputo, the President of the Waters Division; and Gene Cassis, the Vice President of Investor Relations. As is our normal practice, I will start with an overview of the quarter's highlights, and John will follow with details of our financial results and provide you with our outlook for the third quarter and full year. Before we get going, I'd like John to cover the cautionary language. John A. Ornell: During the course of this conference call, we will make various forward-looking statements regarding future events or future financial performance of the company. In particular, we will provide guidance regarding possible future income statement results of the company this time for Q3 and full year 2013. We caution you that all such statements are only predictions and that actual events or results may differ materially. For a detailed discussion of some of the risks and contingencies that could cause our actual performance to differ significantly from our present expectations, see our 10-K annual report for the fiscal year ended December 31, 2012, in Part 1 under the caption Business Risk Factors and the cautionary language included in this morning's press release and 8-K. We further caution you that the company does not obligate or commit itself by providing this guidance to update predictions. We do not plan to update predictions regarding possible future income statement results, except during our regularly scheduled earnings release, conference calls and webcasts. The next earnings release call and webcast is currently planned for October 2013. During this call, we will be referring to certain non-GAAP financial measures. A reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures is attached to the earnings release issued this morning. In our discussions of the results of operations, we may refer to pro forma results, which exclude the impact of items such as those outlined in our schedule entitled Reconciliation of Net Income Per Diluted Share, included in this morning's press release. Douglas A. Berthiaume: Thank you, John. Well, our sales growth rate in the second quarter slowed from what we delivered earlier in the year and was below the outlook that we shared with you on the April call. If you look at the quarter, our constant-currency sales grew about 2% and our adjusted earnings per share were down 8% from the prior year's second quarter results. Needless to say, these results are well below our prior expectations. I want to start off by discussing our instrument system results and specifically the weaker-than-anticipated finish that we saw for this segment of our business. Looking back at the first quarter, our instrumentation business grew organically at about 8%, and the similarly healthy growth trend was maintained through most of the second quarter. However, in the closing 2 weeks of the quarter, orders booking rates surprisingly and atypically slowed, as customers, primarily in the U.S., delayed issuing orders to us for capital goods. In addition, overseas orders received late in June could not be converted into revenue prior to the end of the quarter. As we had in the first quarter, we again increased our backlog in this quarter, but even more significantly. In fact, through the first 6 months of this year we have built about $20 million in backlog, and that's about double the volume we had anticipated. Following the close of the second quarter, we performed a thorough analysis of orders and backlog and confirmed our ability to convert these orders to sales in the second half of 2013. In the full year sales growth outlook that we will supply to you later in this call, please note that we will remain cautious on instrument order growth rates in the second half in response to less predictable purchasing patterns in the first half of 2013, but we will include sales revenue associated with the planned reduction in backlog levels. Turning now to an analysis of our second quarter sales. Constant-currency sales growth for the Waters Division was 3%, as flat growth in the combined government and academic end market offset mid-single digit pharmaceutical sales growth. Our chemical analysis sales growth rate was in the low-single digits. Comparing these results to assumptions embedded in our guidance, slower-than-expected growth in pharmaceutical instrument system demand substantially contributed to our revenue shortfall. Geographically and for the Waters Division, sales growth in the U.S. was most affected by this late quarter slowdown and consequently finished the quarter marginally down. U.S. pharmaceutical sales in the quarter were flat, with robust recurring revenue growth offset by a decline in instrument system sales. U.S. government and academic sales growth was under pressure, while sales for chemical analysis applications were up at a high-single digit rate. In general, our developing markets in Latin America continued to perform well in the second quarter in comparison to mixed results that we saw throughout 2012. Sales growth in Europe was relatively strong and slightly ahead of our expectations. Most notably, government and academic spending for mass spectrometry-based instruments was up at a double-digit rate, while pharma and industrial revenue growth was largely in line with our expectations and up at a mid-single digit rate. Waters Division constant-currency sales in Japan were down slightly in the quarter, with a strong uptick in academic spending largely offsetting declines in pharmaceutical and chemical end markets. The strength in academic and government business that we began to see late in the quarter is related to supplemental governmental stimulus programs, and we are encouraged by the prospect that these programs will continue and contribute to growth in our Japanese business in the second half of 2013. Asian sales outside of Japan benefited from a strong performance by our Chinese business, where we enjoyed double-digit sales growth, with strong performance by all customer key segments, including pharmaceutical firms. Indian sales were flat in the quarter as fluctuations in local currency valuation adversely impacted demand from generic drug makers. Our sales in Asian markets outside of Japan, China and India were generally weaker in the quarter than we had planned as demand from these countries is generally more erratic and associated with the shallow global recovery. For our TA Instruments division, constant-currency sales were down by about 3% in the second quarter and were heavily impacted by a backlog build in the quarter. Instrument demand for high temperature and industrial chemical applications were strong, while biocalorimetry platforms were adversely impacted by reduced governmental and academic spending levels. The backlog generated in the second quarter principally involved orders for high-temperature instrumentation and thermal systems for customers in developing Asian markets. Our second half sales growth outlook for TA is more in line with the ordering trends that we saw in the first half of 2013, and specifically, we are targeting low- to mid-single digit constant-currency revenue growth for the division. Now I'll discuss some product line dynamics that we saw for the Waters Division in the quarter. Our recurring revenues, the combination of service and chromatography consumables, grew nicely in the second quarter, delivering 8% sales growth before currency effects. This growth rate was consistent across the quarter and suggests healthy instrument utilization rates. ACQUITY columns continue to account for an increasing proportion of our overall column business, and we continue to introduce more ACQUITY column chemistries in the quarter. Looking at our Waters Division MS instrument system sales, we saw mid-single digit sales growth for UPLC mass spec systems and low double-digit orders growth. Business momentum was strongest through the quarter for high-performance QTof technology systems, including Xevo and SYNAPT platform instruments. Our tandem quadrupole-based instruments delivered strong growth in the quarter and an overall double-digit revenue growth through the first half of 2013. At this year's ASMS Conference, we showcased the new SYNAPT platform instrument called the SYNAPT G2-Si. This innovative instrument offers significant advantages to researchers, taking to more fully utilize ion mobility measurements across workflows. In applications ranging from lipidomics to food safety analyses, Waters' scientists and our collaborators demonstrated the unique capabilities of high-performance Ion Mobility Separation for challenging qualitative and quantitative measurements. On the chromatography instrumentation front, we had a weaker-than-anticipated quarter, with overall declines for both orders and sales in the mid-single digits. This weakness was most pronounced for our pharmaceutical companies in well-established markets, U.S., western Europe and Japan, and in application areas outside of pharmaceutical QC. ACQUITY H-Class demand continued to ramp for QC applications, but weakened in early-phase development applications, interestingly, the same type of labs where we saw robust demand for advanced mass spec instruments. ACQUITY overall and ACQUITY H-Class had particularly strong sales growth in the prior year quarter. The comparisons become easier in the second half of 2013, and as we move into the second half of 2013, we expect to see a return to modest growth for our LC system platforms, with incremental demand for our new ACQUITY advanced polymer characterization system, along with continued ramp of our ACQUITY UPC2 instruments. So in summarizing our second quarter results, I believe that the underlying demand for our products and services is stronger and more stable than our second quarter sales growth suggests. Late quarter shifts in the product mix and in geographical mix of orders, in combination with the choppy capital spending environment, all converge to disrupt what had appeared through most of the quarter to be a healthy demand trend. Looking toward the future, I am pleased with new system offerings that are on the near horizon. During the past few years, our R&D efforts have delivered significant new innovative system offerings to the markets that we serve, and there's been a nice correlation between new product launches and higher-than-market sales growth. We have seen this with ACQUITY and are now witnessing the positive effects of the recent mass spec system introductions. To that end, we hope to benefit from new system introductions later in the second half of this year, with the sales impact from these launches contributing more meaningfully to 2014 growth. Before turning it over to John, I will say a few words about our nonoperational plans. On the M&A front, we will continue to seek smaller complementary technology opportunities that fit our profitability and growth characteristics. Our strategy is to remain a technologically focused company with market-leading offerings for targeted customer sets. We see this as the most viable path of securing long-term growth and leading profitability in the analytical tools business. We will remain focused on strong free cash generation because we feel that cash generation is the long-term primary goal for any successful enterprise and a key indicator of our current market strength. In terms of cash deployment and after any bolt-on type business acquisitions, we plan to continue our share repurchase program, a plan which has, over the years, removed more than 1/3 of shares outstanding and meaningfully contributed to predictable EPS growth. On closing, when I last spoke to you in April, I mentioned that I felt 2013 would be a successful year for Waters. Though the results of the second quarter remind us that the road to success is not always a straight and smooth path, we do remain confident in our product and market positions and anticipate more profitable growth in the second half of the year. Now here's John for a review of our financials and an update on the financial outlook. John A. Ornell: Thank you, Doug, and good morning. Second quarter sales grew by 2% before currency translation. Currency translation reduced sales growth by 2%, resulting in flat overall sales. Non-GAAP earnings per fully diluted share were down 8% to $1.08 this quarter compared to earnings of $1.17 last year. On a GAAP basis, our earnings were $1.03 this quarter versus $1.09 last year, and reconciliation of our GAAP to non-GAAP earnings is attached to our press release issued this morning. As I just mentioned, before currency translation, sales were up 2%. And looking at this growth geographically, and again before foreign exchange effects, sales within the U.S. were down 2%, Europe sales were up 7%, Japan was down 6% and sales in Asia outside of Japan were up 3% as strong growth in China was offset by weaker sales growth in India and other smaller markets. ROW sales growth in the quarter was strong. On the product front and in constant currency, within the Waters Division, instrument system sales decreased by 2% and recurring revenues grew by 8% this quarter. Within our TA Instruments division, total sales decreased by 3% versus prior year. Now I would like to comment on our Q2 non-GAAP financial performance versus prior year. Like last quarter, gross margins continue to be negatively impacted by foreign currency translation and capitalized software amortization. Additionally this quarter, we saw a more pronounced mix shift away from our higher-margin LC instruments in favor of mass spec sales. SG&A expenses were flat to last year as a result of continued tight spending controls and foreign currency translation. R&D expenses increased by 3% this quarter. On the tax front, our effective operating tax rate for Q2 was about 15%. In the quarter, net interest expense was $6.4 million and share count came in at 86.6 million shares, 2.8 million shares lower than Q2 last year as a result of our continued share repurchase program. On the balance sheet, cash and investments totaled $1,650,000,000 and debt totaled $1,268,000,000, bringing us to a net cash position of about $382 million. In the quarter, the company successfully refinanced its syndicated bank credit facility, increasing the size by $200 million to $1.4 billion and extending the maturity date to June of 2018. As for Q2 share repurchases, we bought 725,000 shares of our common stock at $70 million. This leaves $478 million remaining on the authorized share repurchase program. We define free cash flow as cash from operations less capital expenditures plus any noncash tax benefit from stock-based compensation accounting and excluding unusual nonrecurring items. For Q2, free cash flow came in at $95 million, after funding $80 million of CapEx. Excluded from this CapEx amount is $13 million of spend associated with our new Manchester, U.K. mass spectrometry facility. We expect this facility to be ready for occupancy in 2014. Accounts receivable days sales outstanding stood at 74 days this quarter, up 2 days from Q2 last year. And in the quarter, as is typical early in the year, inventories increased by $7 million. Now looking at the remainder of 2013. While Q2 sales were below expectations, a continuation of the rate of order production from the first half, coupled with the backlog reduction, supports a mid-single digit growth in sales for the second half of the year. We believe our recurring revenues will provide a foundation of stable mid- to high-single digit growth in the second half of the year and our instrument business will see low-single digit growth as CapEx budgets remain under -- remain more constrained and less predictably released in the markets that we serve. Foreign currency translation at today's rates is expected to continue to depress sales by 2% in the second half of the year. Moving down the P&L. Gross margins for the full year are expected to be about 59.25%, a modest decline due largely to currency translation, software amortization and the instrument mix shift dynamics I discussed earlier. Gross margins in Q3 are expected to be about 58.5%. Operating expenses are expected to be up about 2% to 3% in the second half of the year, bringing full year growth to about 2%. Net interest expense is expected to be approximately $24 million, and we expect our full year operating tax rate to be between 14.5% and 15%. Our full year average diluted share count is likely to be around 86.5 million shares outstanding. Rolling all of this together, our non-GAAP earnings per fully diluted share are expected to be in a range of $5 to $5.10. Earnings per share growth continues to be heavily affected by foreign currency translation this year. Versus prior year, foreign currency translation at today's rates is expected to reduce our full year EPS by about $0.30, almost entirely due to the weaker Japanese yen. While we have kept spending controls in place and will for the entire year, it has not been possible to counteract this currency translation effect meaningfully in the short term. As we think about our expectations for the third quarter of 2013, we expect mid-single digit organic sales growth, supported by orders growth that's consistent with our first half rate in combination with a backlog reduction. Currency translation at today's rates would reduce sales by 2%, resulting in reported sales growth of around 3%. This brings our non-GAAP earnings per fully diluted share to be in the range of $1.20 to $1.25. Doug? Douglas A. Berthiaume: Thank you, John. Operator, I think we can now open it up for Q&A.

[Operator Instructions] Our first question does come from Ross Muken of ISI Group. Ross Muken - ISI Group Inc., Research Division: So I guess as we think about sort of the progression of the quarter and kind of the outcome, particularly on the capital equipment side, it's interesting that a notable amount of the weakness came from pharma and on the LC side in the U S. It seems like, in general, that's actually been a piece where a lot of folks are talking about kind of a net strengthening or improvement in demand, at least relative to Europe or maybe some of the emerging markets. And so as you sort of went back post -- looking at the outcome for the Q and looked at what you saw in the backlog, I mean, what do you think was kind of the confluence of events that led to that level of disconnect in those pieces of the business versus some of the other areas where you actually came through quite well, where we've seen actually a little bit less stability from other players or from other macro data? Douglas A. Berthiaume: Well, there's a lot tied up in that comment, Ross. I think, just from a big picture, clearly, the area that surprised us was the weakness in our LC business, particularly in pharmaceutical areas outside of QC, which is, of course, one of the biggest areas that we service. So it was more in the front end of the research area and in discovery, and frankly, that was an area that was quite strong in our mass spec business. So it's a little bit head scratching because it doesn't appear related to large capital outlays, where we were pretty successful. We have seen periods when we -- the confluence of events throws a quarter at us, where we have an unexpected drop or increase. We saw a very strong instrument business in the first quarter of this year, and while we weren't straight-lining that, we did anticipate that it would be stronger. And in fact, through most of this quarter, we had pretty robust results, and then at the very end of the quarter, it faded, much to our surprise. So I'm not -- as you can tell from our forecast, we don't anticipate that this is a forever dynamic. We are conservatizing our outlook in the second half to some extent. But we don't think that there are major share dynamics going on here, and we don't think this is forever. But we continue to dig deeper in this whole underlying demand phase of the LC instruments. Ross Muken - ISI Group Inc., Research Division: And maybe as a follow-up, I mean, one of the things you've been dealing with, a lot of folks have been dealing with, their exporters, is kind of the strong dollar. It seems like that could be in play for some time and maybe even continue to move against you. I guess, in that context, for places like India, where we've seen disruptions, the rupee has gone up to kind of INR 60 or something like that or in other kind of emerging geographies, how are you thinking about that as it kind of progresses through the year, where people are kind of adjusting to kind of this new set level and so they're just assuming we're not going to see a correction like in times past, where they've maybe basically delayed spending for more favorable exchange rates instead of just going forward with it? How do you -- what are you sort of assuming for that dynamic in the back half? Douglas A. Berthiaume: Well, we're assuming that in Japan, we're going to continue to see a yen that's around about the current level, and I think that's a pretty fair estimate. But early -- the yen did weaken from the beginning of the year to this point, so we have seen incremental pain from the translation of the yen. We haven't seen a lot of underlying demand dynamics in Japan as a result of that. So contrary to what happens in India, where, clearly, the very weak rupee has affected the local conditions significantly. We haven't seen that in Japan, and Japan is largely a translation effect on our business. And I think the thing to remember is that while this costs us $0.30 relative to last year's earnings, if the yen stabilizes where it is now, then next year is a more normal period and we don't have that piece of page. So look, we operate in a world of many different currencies, the euro and the yen being the most significant. And we continue to believe that facing the dynamics through our operating plans, it's a slippery slope if you try to hedge these dynamics and then get into dramatic costs and forecasting issues, as you try to forecast well into the future. So historically, we feel like we have done a better job by addressing this through our operations. We'll continue to do that, and we'll have to work our way through it

Our next question does come from Dan Leonard of Leerink Swann. Daniel L. Leonard - Leerink Swann LLC, Research Division: First off, on your backlog communication, is it right to think that your current level of backlog is about twice what you would normally carry? Or is it some different multiple of that? John A. Ornell: Yes, the increment year-to-date, Doug talked about a $20 million increment in the backlog through June, that's up about double what it traditionally would be. And that demand is heavily affecting growth in Asia, specifically, Asia and Japan, through the half. Much of this came in later in week 13 and just given logistics and revenue recognition in that part of the world, couldn't be converted. But that's the increment to the base backlog that we typically have that we're discussing. Daniel L. Leonard - Leerink Swann LLC, Research Division: So is it right, then, to think of your second half communication as you can get about a point from additional backlog burn and maybe 4 points from underlying demand on the top line? John A. Ornell: That's exactly right. So the logic to the sales revenue growth in the second half of the year is a continuation of the order rate that would be closer to 4-ish percent. It's the base order rate, coupled with a reduction of backlog over both Q3 and Q4, that would add a point to that. So we're basically projecting that we'll see a continuation of the first half's order rate and then a backlog pull-down to add a point to that in each of the next couple of quarters. Daniel L. Leonard - Leerink Swann LLC, Research Division: Got it. And then my follow-up question, on Japan, assuming a stable yen from here forward, does the absence of that $0.30 headwind in 2013, does that fall to the bottom line in 2014? Or are there offsets? Douglas A. Berthiaume: Well, when you say does it fall to the bottom line, it just means that you're -- you have a stable base of comparison, Dan. It doesn't... John A. Ornell: . It doesn't repeat itself is another way to think of it. Douglas A. Berthiaume: Yes. So if the yen had been stable -- one way of looking at it is if the yen has been, on average, comparable to 2012 this year, our earnings would have been $0.30 higher. So if the yen stays stable, then we think with our -- all other things being equal, if we get where we call our normal growth and our normal attention to the bottom line, you'd see normal earnings growth dynamics from us in the future. John A. Ornell: Exactly. So if the yen doesn't -- this year went from about JPY 80 to JPY 100. If it doesn't go from JPY 100 to JPY 120 next year, we don't repeat that $0.30 penalty.

Our next question does come from Doug Schenkel of Cowen and Company. Douglas Schenkel - Cowen and Company, LLC, Research Division: You guys indicated LC weakness, I believe, was primarily in U.S. biopharma or developed economy biopharma for non-QA/QC purposes. Just wondering if you could talk about how exactly you know these instruments are being used. I guess what I'm getting at is how confident are you that QA/QC demand remains strong? And if the answer is because you see that -- if part of the answer is because you know what's going on also in mass spec and you know that mass spec is strong in these non-QA/QC areas, like discovery, are you sure that LCs from other vendors aren't being attached to these mass specs? I think this gets it really also a question of how you're positioned share-wise in LC. Douglas A. Berthiaume: Yes, Doug. I think we're pretty confident that our information systems and our reporting mechanisms tell us with pretty good accuracy what's happening in our order rate, where it's coming from. And it also tells us, with a fair degree of precision, whether what we're seeing is due to delayed orders or share loss. And as you know, share just doesn't change radically quarter-to-quarter, and we had very good results in the first quarter. Instrument demand was up 8%, I think, in the first quarter. I wouldn't say wow. Therefore, we took lots of market shares in the first quarter, and demand was down in the second quarter. Unfortunately, this isn't the first time in my career that we're seeing those kinds of swings, so unusual but it happened before. So there's nothing -- there's been no technological advancement, there's been no regulatory issue that's dramatically changed the playing field that we've seen. Yes, we saw one of our vendors incorporate their own LC a year or so ago, and we absolutely saw some dynamic there. That's played itself out. We don't see major shifts in who's putting LCs in front of their mass specs. So I just -- I think that this is more of a timing issue. And additional to the U.S. dynamic, we're clearly seeing a major center of LC demand in India become very challenged by the issue on the ground in India. So I think those 2 issues are clearly what's happening in our instrument demand. India, I think, is likely to continue this year, whereas the other dynamic, I think, is likely to be more of a short-term issue. Douglas Schenkel - Cowen and Company, LLC, Research Division: Okay. So let me ask, I guess, 1, maybe 2 follow-ups. On the timing issue, talking about this as though it's a timing issue. I mean, a lot of your business was strong here. It's clearly how instruments came in at the end of the quarter. I think from talking to you guys over the years, it's probably fair to assume that you get something like ballpark of $80 million in instrument revenue in the last couple of weeks of the quarter. And given your miss was attributed primarily to instruments, it seems like that came in closer to something like $60 million to $65 million -- or $15 million to $20 million below target. You talked a lot about how great backlog is heading into Q2. Would you be willing to tell us how much of the Q2 miss you've recaptured in the early weeks of Q3? I think that is important for investors in assessing how much of this truly was a timing issue. Douglas A. Berthiaume: Sure, Doug. I think your -- our orders are more weighted to the last 2 weeks of the quarter than you estimate. So I think it should be very clear that while we saw very strong comparisons right through the quarter, right into the last part of the quarter, we weren't anticipating that to continue with the rate that it was. So we had, what we thought, some cushion and it still fell off to a degree that brought us to where we are now. As it relates to going forward, there's no question that we've captured some of those orders that we anticipated to get in the second quarter, as we've gone through the third quarter. I caution you, though, that the same thing happened a bit in the first quarter, where we -- there was many millions of dollars awarded that we thought we were going to get late in the first quarter that we absolutely captured in the first part of the second quarter. So that makes me more reluctant to automatically say I know what's happening here. We're satisfied that our stocks in the third quarter has been positive. And I think we've rolled in what we've learned from the second quarter, applied the management judgment that says, "We don't want a repeat of what we saw in the second quarter." So I think the combination of all those factors suggests that we see nothing now that would lead us to believe we could have a repeat of the second quarter. But it's still a forecast, and we're still going to do our best to make sure we achieve it. Douglas Schenkel - Cowen and Company, LLC, Research Division: Okay. And last quick one. In Q1, I think your chemistry growth was just under 1%. We don't know what the number was for Q2, but it's probably at least 7% to 8%. Is the right way to think about this from here is just really think about the first half growth and project it forward? Or are you -- it does sound like you might think it may be a little bit better than that. Douglas A. Berthiaume: Well, I think the second quarter is more reflective of what we believe the underlying growth. The first quarter was very unusual and impacted by some things like large chemistry orders that were in the base in Asia that didn't repeat in the second quarter. I think the mid to somewhat higher growth rate for chemistry is much more our feeling going forward.

Isaac Ro of Goldman Sachs. Isaac Ro - Goldman Sachs Group Inc., Research Division: If we look back, we have seen misses on the business before that were driven by late quarter spending dynamics. I think we all know that. However, if you do look back, you guys have missed -- revenue were put in line -- put up in line reports for something like 6 quarters in a row now. So I appreciate that the operating environment is challenging, but can you give us a little confidence as to why you have good visibility or line of sight on the back half assumptions you're making here and the fact that your guidance is conservative? Douglas A. Berthiaume: Well, Doug -- Isaac, excuse me, I think that our visibility hasn't changed very much. As you know, we, like most everybody in this business, don't operate with very significant backlogs. So most quarters, we have to generate, in that quarter, the business that we're going to ship and record as revenue. So we have all the tools that we've always had, which is discussions with our customers, historical run rates, projection of the strength of the economic environment, and we have a reasonably sophisticated process. But as we've seen, it's forecasts, and there are a lot of pieces of that, that move around in an individual quarter. We clearly thought and thought through most of this quarter that we had properly anticipated what was going to happen, and then, in very short order, it fell out of bed. We've looked at that, we've examined the underlying trends. Much like the first quarter, we saw this weakness in chemistry, and we didn't believe it. And in fact, that all turned around in the second quarter, and we're reasonably confident that, that's going to continue in the second half. We had a very strong first quarter in instruments, and then it dropped in the second quarter. We don't think that, that was anything we did. We don't think that, as I said, dramatic market share changes occurred. It's frustrating, I know it is for you, and it certainly is for us. But we continue to try to refine what we know, and we overlay what our product introductions are and what the customers are telling us, what the field is telling us. We try to apply a little degree of conservatism there. And -- but I can't tell you that our process has changed as a result of this. We just looked harder, looked harder at the backlog, looked harder at the customer forecast, and we continue to try to do our best. But we live in a world of uncertainty. Isaac Ro - Goldman Sachs Group Inc., Research Division: Yes. No, I totally understand that part, for sure. One follow-up would be a little bit more on the items that you guys can control, one specifically on just use of cash. I mean, in the past, you've had years where you have purchased stock in excess of the free cash flow you generated. Just given the long-term growth drivers of the business and where you are right now, why not buy back more stock? And then just secondly, if you could touch a little bit on the plan here for mass spec. What do you guys have in the pipeline that you can talk to in terms of new project -- products? And maybe are those defensive products that are going to help the gross margin or the operating margin story? Douglas A. Berthiaume: Yes, on the mass spec front, I think, as I alluded to, we have some, I think, exciting near-term plans that, unfortunately, I don't think I could talk to much more about. But you'll see that happening in the second half, really in the fourth quarter. That should have a significant impact next year, maybe a marginal impact in the fourth quarter. But I think the run rate in mass spec, the competitive positions, that's all encouraging. I think we're -- coming out of the last couple of years, we had to scramble a little bit more to secure our position in mass spec. Current indications are that, that's going well. The second part of that? John A. Ornell: Share repurchases. Douglas A. Berthiaume: Yes. We continue to believe that our stock's a good investment. John has shared what the authorization is. I can tell you that, at the board level, we continue to wonder whether we're aggressive enough. So that clearly is the way we lean, and I think that's the way we'll continue to lean about applying more of our cash flow to share buyback rather than less. I guess that's probably the most I want to say about that.

Our next question does come from Amit Bhalla of Citi. Amit Bhalla - Citigroup Inc, Research Division: Doug, TA Instruments has been a consistent positive performer for quite some time. I'm wondering if you could just talk about what the weakness there tells you about the industrial and chemical end markets. Douglas A. Berthiaume: Yes, Amit, it's very unusual -- you're absolutely right. TA has been a consistent performer through many years, and again, I think we've had somewhat of a perfect storm here that is not likely to continue. TA had a combination of slow results in the biocalorimetry piece of their business. It's the first time, I think, in many quarters that we've seen that. And as they have gone back and looked at that, we see no reason to believe that, that's a continuing dynamic. They also had a backlog build that affected their results, and that's been reflected in improvements that we see in the second half. I think they have a very strong market position, a very strong technological base. And I think you'll see TA return to more traditional growth rates as we get through the second half of this year. Amit Bhalla - Citigroup Inc, Research Division: You don't think that there's an underlying end market issue here taking place? Douglas A. Berthiaume: Not versus our level of expectations. I mean, I think we're expecting mid-single digit kind of performance. That's somewhat lower than we've seen traditionally, and yes, I do think that, that's kind of market related. But off that base, I don't expect dramatic changes. Amit Bhalla - Citigroup Inc, Research Division: And Doug, just a follow-up on the academic, government comments you made, can you talk to -- talk about those in the context of any incremental changes sequentially or just put into better context what's going on in that end market? Douglas A. Berthiaume: Well, I think the European markets were pretty strong in that segment of our business. And we also saw an uptick, although it wasn't all shippable in the Japanese marketplace as they kicked in with some stimulus spending. The place where we saw disappointing results and clearly, some impact from the sequester was in the U.S. And so some of that business, we expect to actually return in the second half, but we haven't been overly ebullient in what we're expecting out of government sources in the U.S. in the second half. I think it's going to continue to be a tough area until the whole government spending in the U.S. gets somewhat more straightened out.

Our next question does come from Daniel Brennan of Morgan Stanley. Daniel Brennan - Morgan Stanley, Research Division: I wanted to ask first a question on India. Certainly, I know into the quarter, there's optimism that you guys were to recovery. Just wanted to kind of flesh out a little bit the results that you saw, kind of the rupee versus some of the other operational issues that you've been seeing in India and kind of what's implied in your guidance for the back half of the year there. Douglas A. Berthiaume: Well, India has been frustrating because now it's almost about a year of continuing weakness in the rupee that continues to put pressure on almost all of these accounts of getting the capital to invest. And boy, if you looked at the discussions that we're having with those accounts and how much they want to buy, you'd say it's going to be strong double-digit growth as far as the eye can see. So the customer expectations and desires are certainly there, but they've been unable to fulfill that and get the capital to invest. Now in the second quarter, that's coupled with the fact that we had a reasonably strong second quarter in India last year and so that makes the comparison tougher. We have easier comparisons as we go through the second half, but that's kind of not a statement on the return to growth of the India market. We were anticipating it'll continue to be tough in the second half, and I see no signs that they've really had a fundamental ability to overcome the fact that the rupee has weakened by some 20-plus percent in the last year or so. So I think it's going to continue to be a struggle. Daniel Brennan - Morgan Stanley, Research Division: Okay. Maybe just shifting gears over to the kind of chromatography weakness in the quarter. Can you -- Doug, I think you were citing sometimes things are somewhat unexplainable with this weakness that you saw in discovery chromatography. But is there another quarter, possibly, you could point to in the past when you saw that type of weakness in chromatography and discovery work? Anything to get our -- help get our arms around this event and how we should evaluate this quarter's weakness and an expected pickup as we move forward. Douglas A. Berthiaume: Yes, we have seen -- but it's not -- some of it is formfitting. You go through a quarter like this where you have weak demand in discovery, and you'd say what are the dynamics that we think affected it. In the past, we've seen mergers in big pharma that can dramatically affect the demand swings from a quarter to a quarter. So we've seen that, over the past 10 years, 2 or 3x, where demand sucked as they were absorbing mergers and acquisitions. I'd say, we -- it's unusual to see it in a period like this, where there's relative stability in the big pharma marketplace. So I can't point to a specific point in the past, where things have done like this. And it's a little surprising to see the strength in mass spec and to see weakness in the chromatography. But as I say, it's telling that we saw strength in the chromatography market, greater strength in the first quarter, and so you look at the average across that, you're looking at low-single digit first half growth. That's probably more telling and more indicative of what the market is doing than any one quarter standing on its own. So that's what we think, and that's what we're planning for. Daniel Brennan - Morgan Stanley, Research Division: Great. And then maybe I can sneak just one more in. Just back to an earlier question, Doug, it's just kind of on your attach rate. Could you discuss kind of how it's been trending, say, over the past kind of a year plus or so and kind of what you expect going forward? I think you commented that there's no issue with the attach rate. Just wondering if you could put a little bit more detail. Douglas A. Berthiaume: Yes, I would say -- I wouldn't say the attach rate in terms of our consumables business is getting higher. I'd say it continues to be very good. And ACQUITY is a big piece of that, where the use of our consumables with our ACQUITY instruments from the day of introduction was high and continues to be very high. I would say we see no falloff, but then we don't see a greater attach rate. But it's high and we continue to be satisfied with it.

Jon Groberg of Macquarie. Jonathan P. Groberg - Macquarie Research: Doug, just I think you mentioned this before. But in the first quarter, you also mentioned pharma kind of delays. And as you alluded to on this call, that's why you're not getting too far ahead of yourselves because you saw it again on the second quarter. So I'm just curious, is this just 1 or 2 customers that this happens to each quarter. Has it been broad-based, these delays? Do you think this is just kind of the new norm? Douglas A. Berthiaume: Well, it's certainly not universal, Jon. It's -- we see strength in some large pharma accounts and weakness in others. And some of it's quarter-to-quarter, where one that was weak in the first quarter is strong in the second quarter. Some of that's project related. We continue to believe that, long term, this is a good set of customers, that the demands on them and the demands in early stage continue to be high. And we continue to believe that we're introducing capabilities across our platforms in chemistry and in instruments and in data and information processing that will produce gains for us. It's certainly been frustrating that, that's been as choppy as it has been. And you see individual cases where you can understand that somebody -- some pharmaceutical in China gets challenged because of regulatory issues and you see orders flow there, but those are one-offs. There's not one layer of dynamic that's affecting everybody in this industry. Jonathan P. Groberg - Macquarie Research: So is it kind of fair to say, last quarter, it was a certain set of customers; this quarter, it's a different set of customers? And I'm just curious, for the second half outlook that you described, would you say that now you're kind of taking into account that, that's likely to happen at the end of each of the next couple of quarters as well. Douglas A. Berthiaume: Yes, we think so. We -- as I say, we don't think that the first quarter instrument growth rate in the high-single digits was run-ratable. We don't think that the rate in the second quarter. We think the average of that is more likely what we're going to see in the second half, and that's what we've planned for. Jonathan P. Groberg - Macquarie Research: And just to hop on instruments, I think, it has MS. It actually sounded like demand for instruments was pretty stable, kind of what you're describing now. So for like the first half of the year, if you exclude revenue, but if you just talked about orders, can you maybe talk about mass spec versus LC for the first half of the year in terms of orders, kind of what that looks like? Douglas A. Berthiaume: I mean, as we said, the instrument order rate is mid-single digits. John A. Ornell: Mass spec, a little faster. Douglas A. Berthiaume: And mass spec is a little higher, and LC is a little lower. Jonathan P. Groberg - Macquarie Research: Okay. And then, if I can, to just finish my question, but then just -- John, can you maybe, just really quickly -- it sounds like, for the year, you're still talking about mid-single digit growth, which is, what, last quarter, what you guys talked about for the full year. I kind of go down through the P&L of some of the ships that you made. Can you maybe just highlight what are the key reasons for the lowered kind of EPS guidance, given the -- it looks like a similar mid-single digit top line? John A. Ornell: For the second half, I think, basically, what we're saying, the guidance on the EPS is down largely as a result of the miss in the second quarter. And then, on the second half of the year, there's just a modest decline in earnings associated with a slightly worse yen than what we had before. Share count is up a little bit versus where we thought we might be as a result of the higher share price, and there's other little bits of movement between expenses and a slightly lower tax rate. But it's all kind of rounding, if you will, Jon. So it's -- the dropoff in EPS of $0.15 versus the midpoint guide to guide is largely a Q2 miss with the second half largely intact.

Our next question does come from Amanda Murphy of William Blair. Amanda Murphy - William Blair & Company L.L.C., Research Division: I actually had a follow-up to Doug's earlier question on the chromatography sales. So obviously, the sales are a bit weaker on the pharma side but -- or early stage side. I'm curious, can you help us think about -- or even qualitatively, think about the contribution from sales to the regulated markets? Just assuming that's a contributor to growth in some ways, I'm just trying to figure out how much that is and how to think about that over the rest of the year. Douglas A. Berthiaume: Amanda, when you talk about the regulated markets, are you talking about just pharma in general, pharma QC or... Amanda Murphy - William Blair & Company L.L.C., Research Division: I guess I was thinking about pharma QA/QC, but maybe you can talk to it more broadly as well. Douglas A. Berthiaume: Well, pharma QA/QC was right on our expectations. So as I said, it was really the R&D and tending towards the discovery segment of pharma that was off our expectations. The regulated market, I think, continues to be pretty predictable. That's where the workhorse instruments go. It's where productivity -- it's much like a manufacturing process of writing those analyses. So I would say the demand there tends to be more predictable, more consistent. And historically, I think the other stages of pharmaceutical capital spending tends to be lumpier and less predictable. Amanda Murphy - William Blair & Company L.L.C., Research Division: So in terms of QA/QC adoption of the H-Class, for example, I mean, is that something that could accelerate or be a larger contribution -- or contributor on the back half? Or do you expect that to be sort of... Douglas A. Berthiaume: I think, over time, we believe that H-Class will continue to penetrate more and more QC. Our penetration has been good, but it certainly is not universal. But I wouldn't suggest that you see significant dynamics in a quarter-to-quarter basis. This is a multiyear dynamic that I suggest you see not quarter-to-quarter. Amanda Murphy - William Blair & Company L.L.C., Research Division: Got it, okay. And then just a similar question on the mass spec side and maybe this is a moot question just given your comments on some of the potential launches you might have coming up here. But -- so you've obviously had some pretty good results there in the higher end side of it with SYNAPT and Xevo. I mean, how do you think about that in terms of how much more runway you have given some of the improvements in the product line that you've introduced recently? Is that something that can -- that growth rate can sustain for multi-quarters? Or is that something that you should see this year and then maybe tapers off next year? Douglas A. Berthiaume: I'm pretty encouraged by the opportunities in the high end. And I think our introductions and our current interactions with customers in metabonomics and proteomics are -- I think are served markets that are showing very good results. The opportunities in the applied markets, particularly in food safety, continue to grow and provide, I think, a very secure long-term source of mass spec revenues. An encouraging current dynamic is in the clinical market. We've served the clinical market in places like the neonatal and any rejection growth analyses market and pain monitoring areas. Those are well-developed segments of the clinical marketplace. Some of you may have seen recent results, particularly coming out of Britain, on emerging areas that we're participating heavily in and have very good visibility. I think that's longer term. That's not going to affect the second half of this year. But there were very good signs of emerging applications for mass spec and high value-added mass spec that we're developing in the clinical marketplace. So I think that's very encouraging. And I think we're working on some of the areas of bringing mass spec to the underserved areas on the benchtop. So that we hope to have some more information on as we go through 2013. Amanda Murphy - William Blair & Company L.L.C., Research Division: Okay. And then just last quick one on Japan. Have you looked at the stimulus dollars and sort of figured out how much of that might be available to Waters specifically? Douglas A. Berthiaume: Well, we looked at the particular tenders that have been let under that. Of course, not all tenders have been let under the expectation. And the stimulus approvals in Japan came later than originally anticipated. So we absolutely have booked several orders late in the quarter under the stimulus plan. And we're anticipating that the net result of that, with our ongoing business in Japan, we'll see an improvement in our growth rate in the second half of this year.

Tim Evans of Wells Fargo Securities. Timothy C. Evans - Wells Fargo Securities, LLC, Research Division: Doug, how confident are you in being able to get back to a long-term top line organic growth rate of something like the 7% that you guys usually want to see? Douglas A. Berthiaume: It's still our target. We still believe that the markets we serve and that the technologies that we bring, combined with the geographical dynamics and the improvements in the developing markets -- I do understand that any time you have a period when it's been a challenge to meet those rates, raises questions about whether you have to reconsider what those long-term growth rates are. But I think we've been in a relatively unusual period, lots of challenges. Typically, coming out of these periods is where you see some of your best growth, and I still believe that we're capable of producing those growth rates. We're not so large to be challenged inordinately by kind of the lot of large numbers. And so yes, I still believe that the combination of our technologies can get us to that mid- to high-single digit growth rate. Timothy C. Evans - Wells Fargo Securities, LLC, Research Division: I mean, I guess, when you think about the end markets, when you guys have kind of achieved those levels of growth in the past you've had government, academic funding that was growing pretty rapidly every year and you had pharmaceutical R&D spending that was growing pretty rapidly every year. And those 2 dynamics, for sure, have seemingly changed for the -- at least the intermediate term. Douglas A. Berthiaume: Well, certainly, big pharma has changed. But we're coming into -- coming off a period where startup biotech funding has been pretty robust, and we're coming off a period where biotech spending was pretty slow. So we see near-term opportunities in some of that smaller to intermediate-sized biotech spending to be very encouraging. So look, I think it's fair questions, but in my experience, it's -- people tend to look at -- if they're at the bottom of the well, they tend to forecast that they're always going to be there. And when times are rosy and robust, the tendency is to forecast that those conditions will continue. Generally, it's just the opposite. Generally, what happens is that when industry conditions are weak, they tend to get better. Obviously, that's in my best interest, but I think that traditionally has been what's happened. I think it would be wrong to think that, all of a sudden, the technologies that we provide are becoming less valued in the world.

Our next question does come from Derik De Bruin of Bank of America. Derik De Bruin - BofA Merrill Lynch, Research Division: So in the interest of time, I'll keep it short. So did -- in the pharma discovery, when you're talking about LC delays, was this delays of new LC systems for purchases or were these replacements? Do you have any clarity on that? And I guess Europe was strong in the quarter. Could you compare and contrast the European pharma versus the U.S. pharma? I think people are trying to figure out the dynamics that was going on in discovery areas there, if there's anything that's markedly going on that is different. Douglas A. Berthiaume: Derik, there's no difference between European pharma and U.S. pharma. I mean, in terms of the -- these are multinational companies. And really, it would be wrong to think that Glaxo and AstraZeneca are riding high and Pfizer and Lilly are riding low. That could be happening, but they're related to individual corporate dynamics, not related to geographical applications. And so while it's true that we score our business in a particular way that says this business was generated in Europe and it came out of a pharma company, but I think it's more to think about the pharma industry in global terms and the fact that global spending in our front end was weak. So I think it's that piece that suggests that in the tradeoff of separations versus detection in the mass spec, the air is on the side of the higher end mass spectrometry purchases this quarter. But I think, as I've said and I continue to say, there's a leveling off. Those tend to be 1 quarter dynamics that don't indicate a permanent change. Derik De Bruin - BofA Merrill Lynch, Research Division: Great. One quick follow-up. You mentioned environmental last quarter being a little bit soft. Did environmental improve this quarter? Douglas A. Berthiaume: Environmental was okay. I'd say in the non-pharma markets, the food safety and food analysis is probably the strongest area of our non-pharma business.

Our next question does come from Dan Arias of UBS. Daniel Arias - UBS Investment Bank, Research Division: Maybe just one for me. Doug, going back to pharma. When you think about your view there and what you're seeing out of those accounts, does the growth outlook at this point include anything in the way of expectations for a budget flush in 4Q? I guess to the extent that you have a feel, what's the general thinking in terms of end-of-the-year spending there? Douglas A. Berthiaume: I would say we always -- in our run rates, we always see some end-of-the-year uptick or fourth quarter dynamic. It's become, I'd say, less and less. Certainly, in my time in the industry, if you went back 10, 15 years, there was a much bigger end-of-the-year dynamics than there is currently. So we don't expect an inordinate end-of-the-year dynamic in those terms. We expect a more normalized pattern of demand.

Our next question does come from Tycho Peterson of JPMC. Tycho W. Peterson - JP Morgan Chase & Co, Research Division: Question on the OpEx. If we look at the original guidance you provided for the year, it was 3% to 4% OpEx growth. Obviously, that was off the 5% expectations originally for the year on the top line. Now you're talking about 2%. Can you just talk about -- to the extent that you've got levers to pull here, are these project delays? Is it just less travel? Can you talk about where the OpEx leverage is coming from? John A. Ornell: Yes, it's slightly more effect as a result of currency, but mostly it's associated with holding back on discretionary spend at the levels that we're likely to end at now. There'll be slightly less variable pay schemes being paid out. There'll be -- the project expense associated with getting new products out and making those investments is largely intact. But we are looking to, everywhere we can, hold back on spend to compensate for the yen and the somewhat softer order rate as we make our way through the second half. Douglas A. Berthiaume: So it largely comes out of everything we've described as discretionary spend, Tycho. I mean, it's travel, it's meetings, it's -- you can't do it forever, but you can continue to limit that. And you put on extra controls, and you make life as miserable as possible to have somebody spend incremental money. And it's a tough time, and I think everybody appreciates that they have got to tighten their belts a little more. We're not embarking on any significant structural reductions. Again, it's important to recognize that $0.30 a share of our pain this year is coming out of the yen. And we do think that, that has a fixed lifetime, that we'll come out of this, and we don't want to do things that causes us long-term pain. But in the short term, if everybody takes their belts down a notch, we can help keep our expenses lower. Tycho W. Peterson - JP Morgan Chase & Co, Research Division: And then a quick follow-up, can you just comment on general pricing trends in the market today? And then also, can you clarify what your expectations are on academic in the back of the year? I think I heard you say that you thought it could get a little bit better. I just want you to clarify that. Douglas A. Berthiaume: Well, I'll take the general pricing trends, and John can talk about academics. But general -- in any period of time, a quarter or 6 months, we'll see 1 territory in the world kind of pop up with the sales force complaining that so and so has given away their products and it's much tougher to sell because, god, the discounts are ranging high. You almost always get some territory that's complaining about that. If you look at our average end market pricing across instruments, mass spec and chemistry, we have seen no significant change in that. Our margin, to the extent that you can see, a slight change in margin. It comes from mix and the fact that our mass spec margins are a little bit lower than our instrument margins, but it doesn't relate to a change period-to-period in the pricing. Pricing has been solidly constant. John A. Ornell: And on the government, academic expectation, we started the year with a high-single digit growth in government and academic. We came into the second quarter, it flattened out there. So the expectation and the guide in the third and fourth quarter is that we'll see a couple percent growth worldwide for that market.

Our next question does come from Peter Lawson of Mizuho Security. Peter Lawson - Mizuho Securities USA Inc., Research Division: Just to dig down deeper, on the customers, what were they actually saying around those delayed orders? Douglas A. Berthiaume: I'm sorry, Peter, what -- I didn't catch all of that. What are the customers saying about the delayed orders? Peter Lawson - Mizuho Securities USA Inc., Research Division: Yes, exactly. Douglas A. Berthiaume: Well, in terms of some specific orders, we've actually seen them close in the third quarter. So that gives us some confidence that our people on the ground were right, in that a number of those orders were in the works and for either capital spending reasons or just administrative delays, they flipped from the second quarter into the third quarter. When you look at the pharma dynamic in early stage, our customers -- again, you don't get them to talk specifically about a delayed order necessarily there. It's -- they're not saying anything different about their commitment to early-stage discovery. It's not like a big pharmaceutical company is now saying that they're out of the early-stage discovery business. So you probe around it as to what their capital budgets are, what their plans are, and that's the same story. We don't believe that there are significant changes, and that's another reason why we think that this is just kind of quarterly abnormality, that we're more likely to see a more average period of demand than we are -- either the spike in the first quarter or the downward turn in the second quarter. Peter Lawson - Mizuho Securities USA Inc., Research Division: Got you. And then the disconnect you're seeing in LC versus mass spec for pharma discovery, could that be anything internal versus being an external issue? Douglas A. Berthiaume: Internal, by -- you mean, like a company specifically? Peter Lawson - Mizuho Securities USA Inc., Research Division: Yes, sales organization issue or... Douglas A. Berthiaume: No, we don't think so. We don't think it's the fact that the sales force is happier with mass spectrometry. We have pretty good mechanisms to -- both in the compensation arena, as well as in the field force management. We don't think this is internally driven. We think that this is just the vagaries of demand across a big wide, worldwide marketplace. Peter Lawson - Mizuho Securities USA Inc., Research Division: And how much of it -- FX impact, how has that changed since 1Q? I guess I'm trying to work out how much of the... Douglas A. Berthiaume: Kind of little bit worse, probably $0.05 worth in the second half. John A. Ornell: Yes, we ended up having the yen, as you might recall, lifting up meaningfully across the quarter, coming kind of back down to where we thought it would be. But the average was like a couple percent higher across the quarter. Other currencies were under a little bit of pressure versus original guy. But really, the yen, at the end of the day, is the biggest contributor, and you're looking at, as Doug said, about $0.05 across the year associated with incremental FX. Peter Lawson - Mizuho Securities USA Inc., Research Division: And that's versus 1Q and now? Douglas A. Berthiaume: That's versus -- right, the guide we gave in April for the 1Q results.

Our last question does come from Steve Willoughby of Cleveland Research. Steve Willoughby - Cleveland Research Company: My question is just a follow-up on one of your answers to Tycho's question regarding operating expenses. And I was just wondering, now that you've had to lower the EPS guidance again, as it relates to your variable compensation, how much of a reduction in variable comp is there? I think, if I remember correctly, maybe last year, there was a pretty large cost of variable comp last year that helped earnings a little bit. I was just wondering how much variable comp has come now -- come down now in your new guidance. John A. Ornell: Yes, that -- there's still some base amount of variable comp that's in there for various geographies and various groups, so they are likely to still achieve some base level of hedge. There's other measures, EPS and others, that are now likely not to have a payout. So a significant portion of the decline is associated with expectations that plans won't be met and we'll see a reduction in the variable pay that leads to a meaningful piece of that reduction overall. Douglas A. Berthiaume: Just to flesh out, the meaningful -- our variable pay plan for the senior people, as I talked about the 25 senior people in the company, are all driven off earnings per share growth, and the payouts don't get meaningful until you get to double-digit earnings per share growth. So in a period like this where there is minimal, if any, earnings per share growth, there is no variable comp that is paid out. So we go into the year, of course, planning to have a successful year, and if it turns out like this year, then there will be no variable payout of any significant amount to the senior-most players in the company. Steve Willoughby - Cleveland Research Company: I think that goes to the heart of my question. Just were you accruing for senior management incentive compensation and now because of the guidance reduction, you reversed that or you've stopped accruing for that? Douglas A. Berthiaume: There is a piece of that. We -- coming out of the first quarter, we anticipated that there would be some payout, now we're not. Steve Willoughby - Cleveland Research Company: Is there any way to quantify that change? John A. Ornell: It's a few million dollars. Douglas A. Berthiaume: Yes, it's in the low millions of dollars. John A. Ornell: Right. We were accruing, Steve, at the lowest payout levels in the first place. Otherwise, it would have been a more meaningful amount. Douglas A. Berthiaume: Okay. I appreciate everybody staying on well past our normal stop date -- stop time. Hopefully, that helped you in putting in, in perspective coming off a difficult quarter. I do want to emphasize that we have seen times like this in the past. We're disappointed that we had a soft quarter. We do think that we're well positioned for the future, and we do think that the second half is likely to be a better performance than we saw this quarter. So hopefully, you'll all be back to hear about that the next time we get together, and we hope to hear from you again. Thanks for taking the time, and we'll talk to you again.

Today's conference has ended. All participants may disconnect at this time.