Curt R. Hartman

Thank you, Chanel, and good afternoon, everyone, and welcome to Stryker's second quarter 2012 earnings report. Joining me on the call is Katherine Owen, Vice President of Strategy and Investor Relations. In terms of the format for today's call, I will provide opening comments and then turn the call over to Katherine for an update on several key focus items. I will then cover the financials before opening the call up to your questions.

Turning to our second quarter results, sales finished at $2.1 billion, up 3% as reported and 5% in constant currency, with the U.S. market increasing 7.7% while the international market was up 3.3%, excluding currency.

Acquisitions contributed 2 percentage points to our top line, yielding 3% underlying business growth. Importantly, across all 3 of our key segments, Reconstructive, MedSurg and Neurotech and Spine, there were drivers of the sales gains. Specifically, U.S. Reconstructive delivered underlying growth of 7%, reflecting a 6% and 4% increase in hips and knees, respectively. While Trauma and Extremities advanced by 11%, absent the influence of acquisitions.

Within MedSurg, instruments had another strong quarter with global constant currency growth of 11% and U.S. growth of 13%, underscoring the accelerating momentum from our fourth quarter 2011 launch of our System 7 platform. Finally, Stryker Sustainability Solutions posted a third quarter in a row of over 20% growth.

Turning to Neurotech and Spine, solid growth across all the Neurotech segments, coupled with the Orthovita acquisition influence in Spine, helped to offset the continued downward pressure in the core Spine segment. Overall, we are pleased with the general performance across the numerous segments.

However, as we have previously communicated, we did experience weaker results in certain geographies, particularly Europe, and to a lesser degree, Japan, as well as a decline in our U.S. medical results. With respect to the weakness we saw in Europe, it remains consistent with our expectations that we discussed earlier in the quarter. Looking ahead, we believe the outlook for our European business is aligned with current market realities.

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