Covidien PLC Earnings Call Insights: Energy Performance and Business Growth Profiles
David Lewis – Morgan Stanley: Joe, you were really clear on the Vascular dynamics in the quarter and going forward, but I wonder if we turn to Energy for a second. There’s some similar dynamics there. You have difficult comparisons this quarter and going forward, there’s been multiple competitive launches last year and into this year in Energy. And I wonder if you can comment on sort of Energy performance this quarter, which slowed maybe a little bit versus our model and how you see that franchise this quarter and how you see that franchise, going forward, given those competitive dynamics?
Jose E. Almeida – Chairman, President and CEO: Energy, let’s split a little bit what we – how we see Energy. Our vessel sealing franchise did extraordinarily well, well into the teens. What was is low for us this past quarter was hardware and we saw an overall pressure on capital purchases from hospitals in the U.S., primarily in Europe, which reflects on our ForceTriad generator, as well as ventilators, we saw in both categories. So just want to reiterate, we have been in a very competitive situation with our vessel sealing franchise, Energy franchise for a while. We have very respectable competitors. However, Covidien has created a very robust portfolio. We just launched couple of products in the last 60 days, improvements of current line, products that are more robust and products that also provide better clinical outcomes. So, I’m extremely confident in the franchise. Like I said, our vessel sealing franchise did very well double-digit growth. So if that was a weak spot, then I would be concerned, but I’m not at all, because that franchise which is a disposable flow of our products is very, very healthy, and capital purchases as we all know are very lumpy, so that does not concern me at all.
David Lewis – Morgan Stanley: Maybe just a real quick one for Chuck. I think we are obviously not going to get a whole bunch of guidance information out of you before next week, but I wonder if you can just share with us your plans for Covidien propers capital deployment in terms of are we going to get changed the guidance in terms of free cash flow to shareholders, buy back dividends? Should we expect significant changes on that front next Friday afternoon?
Charles J. Dockendorff – EVP and CFO: No. David, I don’t think we’ll make any changes in our current guidance like we said, we raised some debt here as part of the spinoff at Mallinckrodt which we consider just part of the cash of Covidien, and going forward, we still remain committed to returning a minimum of 50% to our shareholders. Again, we’ve always stated that we certainly would like to use this to invest in acquisitions and other funding opportunities, but that is opportunistic and we will wait for those transactions to come along, but we have no interest in holding onto this cash or building the cash on our balance sheet unless we can find an investment to put it into that we think is good for Covidien, we will return it to the shareholders.
Business Growth Profiles
Michael Weinstein – JP Morgan: So let’s spend a minute on the Vascular business and Joe if you could maybe break down for us the different pieces here, because there’s the compression business, which you highlighted that you lost the GPO contract there that business. There is the peripheral vascular piece, there is the neurovascular piece, there’s the CVI, the venous insufficiency piece. And maybe can you give us a sense of how those four different pieces are doing and how you feel about this business outside of I know peripheral vascular is a tougher comp coming forward. But how you feel about the growth profiles of each business?
Jose E. Almeida – Chairman, President and CEO: I think we are pretty clear about the compression business. Those of you not familiar with our compression business, those are pneumatic compression pumps and it’s these that go into patient’s legs after or before surgery. We lost a GPO contract. Those things happen. They go up and down. We have made a lot of that loss, but that is 20% to 25% of our Vascular business. So that’s an important franchise with very good margins. Clearly we are focused on the execution, so we can mitigate that going forward. So with that said, let me focus on the overall health of our business in the neurovascular, peripheral vascular, and CVI. The neurovascular business is going well. As you know, we’re going to be anniversarying the pipeline next quarter, so you’re going to see that impact, but we, based on the numbers that we’re collecting at this point, it looks like we just turned a corner and becoming number one market share holder in the U.S. for neurovascular, and that’s a really good news from a company that was probably three or four about three years ago. So the comps become more difficult. The competition is fierce in this area. You have not only the large competitors, but you have a lot of small companies coming out of there out of Europe. I’ll say that Covidien has amassed a very good portfolio of pre-revenue companies in acquisitions that will give us some really good confidence in going forward in terms of portfolio – breadth of portfolio. Another thing that I want to highlight in neurovascular before moving on is the fact that our Solitaire franchise, we are very excited about it, but it is a very slow process. So, as we have great hopes for that, we have a significant amount of marketing dollars earmarked for that as we spend around the globe. It is a very slow process. So, as we have a great product, we have a new generation product, let me put that way, we feel confident, but it’s a slow process. The peripheral vascular business, as you know, one of our competitors had a significant recall last year as you said. We have a very good bag of products. We have total occlusion catheters now. We have our EverFlex stent, as well as atherectomy. I think we are very well-positioned to fight some of the transition from hospital to physician-owned labs. I think that is a big dynamic for us, and I think going down that path, Covidien have enough full bag and the ability to be in the commercial negotiation position to do that. It’s very important to us. It’s a tough franchise. We have a significant amount of competitors as you know there. So it’s a pretty good street fight. And to close, the CVI franchise, as you know, we are the only manufacturers of RF catheters and generators for Chronic Venous Insufficiency. I feel confident that that franchise has a lot of legs still to go, good runway. So, long term, I think you are going to see at Q3 there will be slower than usual, but I see us probably rebound into Q4 and Q1 next year.
Michael Weinstein – JP Morgan: Joe, this week, Cook announced a global recall for the Zilver PTX, their drug-eluting peripheral stent. Does that ease a little bit the competitive environment next in maybe the next quarter or two for the peripheral business?
Coleman N. Lannum – VP, IR: Yeah, Mike. We are definitely familiar with that recall. The reality is, so far, Zilver had really not that big of an impact in the market. And while we certainly will take every opportunity we can to supply our products to customers that may be inconvenienced there, I wouldn’t expect it to have nearly the same kind of competitive impact as the other competitive recall last year had.
A Closer Look: Covidien PLC Earnings Cheat Sheet>>