You are given a text that consists of multiple sentences. Your task is to perform abstractive summarization on this text. Use your understanding of the content to express the main ideas and crucial details in a shorter, coherent, and natural sounding text. 
Text: I hope you are all well and safe.
Joining me virtually today are Bryan Hanson, our President and CEO; and CFO, Suketu Upadhyay.
Just given the backdrop of COVID, let me just start by saying that I certainly hope that all of you are doing well and staying safe and continuing to, as much as it's frustrating I'm sure by now, continuing to social distance and wear your masks.
I think at this point we're all pretty good at it so let's make sure that we continue to do it.
And as a result of that continue to deliver for our customers and our patients and move with our mission forward.
And I'll just continue to be very proud of everything this team has accomplished against a significantly challenging backdrop in 2020.
So I'm proud of you and glad to see what you've been able to do, and I'm looking forward to what you can do in 2021.
And here we are, right?
We're in 2021 and there's going to be challenges.
We've seen already early on in 2021, but I'm confident that we're ready to deal with the challenges as ZB, and I'm pretty confident we're going to see real opportunities for 2021 as well.
And there's just a lot of updates that I want to share with you today, but I'm going to keep my comments to a minimum, if possible.
I really want to make sure that we have time for Suketu to get into a little more detail on Q4 and then, ultimately, say how that's going to translate into 2021.
Now we're not going to give too many specifics on 20201, but he'll give you some color on what we're seeing from Q4 and, again, the impact we think that's going to have on 2021.
So for today I'm going to kind of keep it to three main topics.
The first is really how we're continuing to navigate COVID-19 and, to continue inside of that, to ensure that we're executing against our strategy.
The second one is really going to talk about the ongoing transformation of the company.
We really are making sure that we're moving forward with active portfolio management, and, obviously, we're taking the next steps there with the planned spin-off of our Spine and Dental business.
So we'll talk a bit about that.
And then third, I want to make sure that we again touch upon our long-term growth strategy and how it positions us to drive growth, obviously as a company, but also value for you and value for us.
And so, let's start again navigating the challenges and executing here in the short-term.
There's just no doubt that COVID, unfortunately, remains a challenge.
Coming out of Q4, we're seeing the pandemic pressure and the surges continue and, frankly, worsen across pretty much all of our regions and markets.
There's clearly more lockdown measures that we're seeing throughout Europe, Middle East and Africa; to a far lesser extent but still impacting Asia-Pacific as well.
And certainly, in the Americas, we're all seeing it in the U.S.
It may be different by state, but clearly seeing increased pressure as a result of surges in the pandemic so all of that is kind of the backdrop that we saw coming out of Q4.
And, unfortunately, this pressure, in the corresponding decline and elective procedures, grew throughout Q4 and actually was worse at the end of December.
And at this point, we expect that increase in pressure will continue throughout Q1 at least and will impact all three of our regions.
As a matter of fact, we're actually seeing this probably increase in pressure coming out of Q4.
So we would expect Q1 to be a little more challenging than even what we saw in Q4.
But even given that backdrop, I'd say that I'm optimistic.
We're currently rolling those out around the world.
We do believe the vaccines are going to change the COVID-19 dynamic, and we're going to see positive impact as a result of it.
As soon as we start to see the surges stop, we see the impact of COVID end, and we're confident that the recovery's going to mean that the normal patient flow is going to start again and we're going to have the pull-through effect of a sizable patient backlog that's been created over the past number of quarters.
We expect that when that recovery occurs, we're going to see a period of what I would define as normal market growth augmented by deferred procedures that will be coming in as well.
And we're going be ready for that, and we're excited about that.
So as much as it's going to be a little rocky in the short-term and potentially more challenging than what we saw at the fourth quarter, we see a light at the end of the tunnel.
And that's a good thing.
The big question is when?
When is that going to happen?
We know the vaccine is going to have the impact.
The big question is when.
And that's certainly going to be the key variable we're going to be looking at as we try to predict what 2021 is going to look like.
So while I would just say, against this backdrop of COVID, what is clear to us is we can't control when the vaccines allow the surges to stop, but what we can control inside of that is how we execute; how we execute our strategy.
And I have confidence we're going to continue to move it forward.
Our core business is strong.
Our execution is on point.
I would just say momentum around our key commercial launches and programs continues to be strong, and I would say that, overall, our commercial confidence is better than it has ever been.
So I'll just give a few examples of this.
I can say it all day long, but unless we talk about it and actually it reflects in the numbers, who cares.
So let's first start with ROSA Knee.
Obviously, this is something that everyone is going to be paying attention to.
Certainly, I am, and on note, we said we're going to hit between 200 to 300 cumulative placements by the end of 2020.
Obviously, you know that we were in that range as of Q3.
So I'm happy to report that not only did we achieve that goal, we achieved the high-end of that goal.
And I would tell you that the momentum is strong coming into 2021.
Q4 was actually our strongest quarter as of the date of launch of ROSA Knee.
So we've had some pretty strong quarters in the past.
Q4 was our best, and we're on the high-end of the goal that we set for the year.
And as I've said before, with some of the new launches that we have coming, specifically associated with [Indecipherable], I feel pretty confident that 2021 is going to continue to show that kind of resilience and strength for ROSA Knee.
On the percent of revision side, again, this product continues to be very successful for us.
We now showed that in Q4, we actually had the strongest quarter-over-quarter growth that we've seen since launch.
We did realize our 2020 expectations of $100 million in gross revenue and almost $40 million in net of cannibalization revenue during the year.
And I would just tell you that that's just the beginning because Persona Revision serves as a really compelling tip of the spear product for our commercial team.
Once we get Persona Revision in, we've got an opportunity to hunt for the typical primary knee as well.
So we're very excited about that launch and it continues to be strong.
On the hip side, Avenir Complete continues to be a strong one for us.
Even in the pandemic, it continues to beat our expectations.
And if I just look at Q4 specifically, we grew about 30% over Q3, again, even with the increased pressures of the pandemic in Q4, so very excited with what we're able to do with Avenir Complete.
And we expect big things to continue with this product throughout 2021.
And as you obviously know, we also expect at the end of 2021 to launch the ROSA Hip, which again gives us a lot of confidence in the Hip category for our business.
And then finally for Signature ONE Planner, we demonstrated this again, strong sequential growth with registrations up nearly 25% in Q4 over Q3.
And we expect utilization to continue to expand significantly in 2021 with really a goal of having more than 50% of our shoulder procedures using pre-surgical planning.
And that's important for a lot of reasons.
Remember the pre-surgical plan creates stickiness with the customer, but it also enhances our ability to get more guides and augments using the procedure, which can really take-up the ASP for that procedure.
So again, exciting stuff for Signature ONE Planner as well.
So all-in we continue to execute -- we continue to execute as a team.
The way we're showing up every day, the way we're showing up in the market frankly versus our peers gives me confidence in our business as does our continued innovation and our product launches.
We're going to see more this year, some pretty pivotal innovation that we're going to see this year.
As I mentioned before we're going to see ROSA Partial Knee, we're going to see ROSA Hip and we're also going to see the first smart implant, Persona-IQ, launched this year so definitely exciting for us from an innovation standpoint in 2021.
We continue the transformation of ZB.
That's been the goal since I got here.
You've heard me talk about our three phases of transformation.
First was the hearts and minds and the execution challenges that we had in the very beginning.
It's what we talked about a lot in the beginning.
The second phase of this was really building a more robust longer-term strategy, making sure that we brought innovation to the market and getting our execution straight.
We're clearly well into that phase.
And third is our portfolio transformation, and that's the goal of active portfolio management to change the complexion of the organization so that we can have better goal of sustained mid-single-digit growth.
And I'm proud to say that we're squarely positioned in Phase III now as well.
And as you've seen by our recent announcement, we're going to continue to move this forward.
We have the portfolio management strategy and the process in place and to have built a pretty strong capability to move us forward in this area.
Late last year, we executed a number of smaller, but still important, M&A deals to fill portfolio gaps and to better position us in higher-growth areas that we do believe we have a right to win in.
I truly believe by separating out these businesses, we're going to create two stronger companies, two companies that are going to be better positioned to meet customer needs and improve patient lives.
And ultimately, and very importantly, deliver greater value to you, our shareholders.
Let me give you a bit more detail on why we believe this is an opportunity for value creation and really why we think it delivers value for ZB and NewCo.
First of all, the transaction increases our management focus and resource prioritization.
We truly do believe for both companies, we think about NewCo and we think it's going to thrive as an independent company with prioritized capital allocation to pursue strategies and growth opportunities and truly investments inside of Spine and Dental.
That has not been a focus for ZB.
It will absolutely be a focus for NewCo.
And for Zimmer Biomet, the transaction is an important next step in our transition into a more streamlined company with sharper focus and greater and more optimized resource allocation toward innovation in those core businesses that we are committed to, that are profitable for us, where we see attractive markets with a right to win in those markets and be market leaders.
And really the second thing is it's going to drive increased growth and efficiency for both companies.
We really do believe that.
And simply put, we expect that these two companies with their simplified operating models and just reduced complexity and increased focus will be able to grow revenue, margin and earnings per share faster than they would if we remain combined as one company.
And Suke's going to talk more about the specific financial impact that we expect in just a few minutes, but just know it's positive for both organizations, financially speaking, as we separate the organizations.
And third, it's going to enhance value creation for our patients and our providers and all of our key stakeholders including our own team members.
This is the next step in ZB's transformation, and it underscores our commitment to ensuring long term priorities remain aligned with shareholders' best interest.
It's going to drive the business forward to meet customer needs and advance our mission to alleviate pain and improve the quality of life of people around the world.
We think we can do it better as two separate organizations, OK?
So that's the backdrop of the spin.
And today obviously is just day one in terms of announcements around this process.
You can absolutely expect that we're going to continue to provide updates as we move forward, as NewCo takes shape, and as we move toward the transaction close, which we're currently expecting to be around mid-2022, OK?
So we're confident in these steps we're taking and our ability to keep executing and in our overall ZB strategy, and that brings me really to the third and really the final topic that I have for these remarks.
And it's our plan to drive long-term growth and ultimately as a result of that deliver increased value for you, and to do that, we remain fully committed and confident in ZB's long-term growth and margin expansion expectations.
In fact, the spin-off transaction that we're going to do over the next year serves to de-risk if not accelerate our path to that 4% to 5% growth rate that we have talked about and our 30% operating margin profile by the end of 2023.
And to get there, to be able to deliver on both of those, we're going to have to be committed to our priority growth areas.
And we've talked about these in the past.
I'm going to remind you of them again.
The key areas of concentration for us would be Knee, Hips and S.E.T. If we think about Knees first and foremost, we need to be able to grow above market rates here.
And we're going to continue to focus on the fastest growth sub-markets of Knees, for us that's going to be robotics, data and informatics, and cementless and Revision.
We feel we have plenty of innovation and momentum here to continue to grow sustainably above market rates in Knee.
From a Hip perspective, it's a little less ambitious in the beginning.
We just said that we need to grow at market in the short-term with the idea that over that over the long-term, particularly after ROSA Hip is launched, that we will grow above market in Hip as well.
And I can tell you, based on our performance so far and the ROSA Hip application being launched later in 2021 and the Avenir Complete momentum that we have, we feel confident we're going to be able to do that as well.
And as far as S.E.T. goes, we just want to grow at market, if not the higher end of market, and to do that we're going to focus on the most attractive sub-elements of S.E.T. for us.
And that's, for us, again, going to be sports, medicine, and extremities.
Those are key areas of concentration for us that we're going to invest internally, we're going to look for external ways to build scale, and we're going to build commercial infrastructure as well.
So let me close by saying that I continue to be more confident about ZB's future than ever.
I know I say that a lot recently, but I really do feel the momentum right now.
I truly believe that we are well-positioned for success and that our strategy is absolutely working.
And our transformation is well under way, and our proven ability to rise to challenges and face adversity, I think, has prepared us well for navigating the current environment and really, for that matter, any environment in front of us.
It was your focus on our mission, our strategy and how we show up and execute every day is unmatched.
It's what makes ZB and what makes me confident that we're going to continue to deliver.
Before jumping into the details, I'd like to summarize the quarter as one where we made significant progress across a number of strategic and operational fronts, all in the backdrop of heightened market pressure.
While revenue and profitability were challenged due to the pandemic, we executed extremely well against the things we can control, positioning ourselves to win for an eventual market recovery and beyond.
Net sales in the fourth quarter were $2.085 billion, a reported decrease of 1.9% and a constant currency decrease of 3.7% versus 2019.
We did not experience any material day rate differences in our year-over-year comparisons.
Our consolidated regional results were in line with expectations despite deepening pandemic pressure on global elective procedures as we exited the year.
While the market softened through the quarter, execution remained strong across all regions.
Beginning with Asia-Pacific, the region grew 2% versus Q4 2019 with growth across all three of our largest markets of Japan, China and Australia/New Zealand.
While COVID pressure on elective procedures increased toward the end of the quarter the impact is less pronounced than what we have been seeing in EMEA and the Americas.
We are excited about the uptake we're seeing in ROSA in the region, and with the solid performance across our Knee and Hip businesses.
As expected, the EMEA region was hardest hit by COVID-19, decreasing 17.5% versus 2019, with all sub-regions in decline.
Surges in the virus leading to policy actions and government lockdowns negatively impacted elective procedures across the region.
Lastly, the Americas region was about flat, decreasing 0.3% compared to 2019, driven by continued COVID headwinds in Latin America, in tandem with a softening U.S. market.
The U.S. was flat despite increased pressure on elective procedures.
Performance was buoyed by continued strong demand for recent innovative product introductions.
Strong execution by our commercial organization and some favorable impact related to the order timing and year-end purchases as some accounts increased their buying patterns to utilize remaining 2020 budgets.
Turning to our business performance for Q4, the Global Knee business declined 4.8% negatively impacted by the ongoing pressures in EMEA.
However, the U.S. Knee business continued to grow, increasing 1.8%, and Asia-Pacific Knee business returned to growth, increasing 2.9%.
Overall, execution was strong, with continued momentum for Persona and ROSA Knee.
Our Global Hip business decreased 3.4%, again driven by declines in EMEA.
Both U.S. Hips and APAC Hips continued their growth trends, increasing 1.4% and 1.3% respectively.
Sports, Extremity, and Trauma sales declined 3.3%.
Dental, Spine and CMFT continued to deliver better execution, increasing 0.8%, and finally, our Other category was down 9.3%.
Moving to the P&L, we reported GAAP diluted earnings per share of $1.59 and adjusted diluted earnings per share of $2.11.
On an adjusted basis, with revenue down 3.7%, earnings per share was down about 10% driven by a lower operating margin and a higher share count, which more than offset the favorable tax rate in the quarter.
Lower adjusted operating margin was driven by lower revenue and an expected year-over-year decline in gross margins.
Adjusted gross margin was 71.3%, sequentially better than Q3, but lower than Q4 2019.
Versus the prior-year, favorable geographic mix was more than offset by lower volumes, ongoing pricing pressure and the impact from prior period deferred costs.
Opex was down versus the prior-year as we implemented several cost containment initiatives as part of our response to the pandemic, in addition to the realization of our transformation programs that were ultimately reinvested back into R&D and commercial infrastructure to help drive consistent above-market growth in priority areas.
Based on our performance versus market over the recent quarters, our reinvestment of efficiency savings is translating into strong returns.
The Q4 adjusted tax rate of 15% was better than the previous year due to geographic mix of income and certain discrete benefits in the quarter, related to recent audit settlements.
Turning to cash and liquidity in the quarter, free cash flow totaled $329 million, higher than the same period in 2019, driven by better working capital and lower capital expenditures, and we utilized better-than-expected cash flow to pay down $250 million of debt ahead of schedule, ending the year with cash and cash equivalents of approximately $800 million.
Now moving to 2021, due to the ongoing uncertainty related to COVID-19 and its impact on elective procedures, we will not be providing full-year financial guidance at this time.
We recognize that this is challenging for you as you build your 2021 models; however, we will reserve financial guidance until we have more certainty around the outlook of elective procedures relative to COVID surges and related vaccine adoption.
We strive to be credible and transparent, and to that end, I will provide additional quarterly details and broader full year shaping as an interim measure.
So far, through January, we've seen COVID pressure continuing to intensify from the end of December.
Based on what we've seen so far in the quarter, and in tandem with our latest estimates for procedure cadence, we project that Q1 revenue will be down in the low-single-digit to mid-single-digit percentage range versus Q1 2020.
Now we have optimism and confidence that we'll see a positive vaccine impact on elective procedures this year, and once we do, we expect elective procedure volumes to return to pre-pandemic levels and the sizable patient backlog to serve as a tailwind to underlying market growth.
As we turn to the P&L, we expect that the impact of COVID-19 on sales volumes will put pressure on adjusted operating margins and earnings leverage until we return to consistent pre-COVID revenue levels and growth rates as I just discussed.
Despite this near-term pressure, our confidence in the market recovery and the longer-term financial profile of the company is driving continued investment into priority areas of the business.
We expect that adjusted gross margin will stabilize in 2021 with quarterly margin levels broadly in-line with what we saw in the back half of 2020.
We could see some fluctuation from quarter-to-quarter depending on a number of variables including volumes, price, foreign currency, mix and other drivers that can change results over time.
Regarding operating expenses, sequentially versus the fourth quarter of 2020, we expect non-commission spending in Q1 to be modestly lower with increases in future quarters opex investments as the impact of the pandemic abates.
We expect interest expense to increase in the mid-single-digit versus 2020 as the benefit from lower debt balances is more than offset by the renewal of net investment hedge positions.
Our tax rate is expected to be modestly higher than the full year 2020 rate and could fluctuate over the year as a result of variability and geographic mix of income due to the pandemic.
Also, we are not projecting any material U.S. corporate Tax Reform to be implemented in 2021.
We project that the full year share count in 2021 will continue to increase modestly versus Q4 of 2020 and we are not planning for any share buybacks in the year.
And in terms of capital allocation, we remain committed to maintaining our investment-grade rating and are planning to pay down an additional $500 million of debt in 2021.
Now, let's turn to today's announcement related to our intent to spin the Spine and Dental businesses into an independent, publicly traded company.
The transaction will be structured with tax redistribution of newly issued new co-shares to ZB shareholders.
As Bryan mentioned, we believe that this tax-efficient transaction, which is expected to close in mid-2022, subject to certain conditions, will drive greater focus for each company with enhanced prioritization of capital allocation while accelerating growth and providing the platform for greater shareholder value.
In terms of the NewCo financial profile, 2019 and 2020 pro forma revenues totaled approximately $1.022 billion and $897 million respectively and is supported by a diversified geographic base with real opportunities for enhanced growth and margin expansion.
We expect NewCo to have a financial profile generally in-line with its peer group and a capital structure supportive of innovation and investment over time.
Importantly, the transaction will empower NewCo to pursue a more-focused investment and execution strategy.
ZB delivered 2019 and 2020 pro forma revenue of $6.96 billion and $6.128 billion respectively.
For post-spin ZB, the transaction is expected to deliver an improved growth profile with accretion to our revenue growth of approximately 50 basis points over the course of our five-year strategic planning period.
We also expect that it will expand our adjusted EBITDA and operating margins on a pro forma basis by approximately 125 basis points.
With that, you should have even greater confidence in our operating margin expansion goals.
We remain committed to at least 30% adjusted operating margins by the end of 2023, and with this transaction we have the opportunity to accelerate the timing of that goal.
However, we will continue to balance margin acceleration against investment opportunities to accelerate durable top-line growth.
Ultimately, this transaction provides greater optionality to invest more in the business while delivering a leading margin profile and that's an incredibly powerful lever.
In the terms of capital structure, post-spin we will prioritize proceeds toward debt pay down to maintain our investment-grade rating.
We're truly excited about this transformational opportunity to increase value for investors and will continue to provide more details as execution of the spin progresses.
To summarize, while the pandemic continued to pressure our growth and earnings profile in the quarter, we made substantial progress on many fronts, including, very strong performance versus the market, progress on our efficiency programs that enabled the increased investment for growth, free cash flow generation that was ahead of revenue growth, strengthening of our balance sheet through early pay down of debt, integrating our strategic and accretive tuck-in M&A deals, and positioning ourselves to execute the spin-off of our Spine and Dental business as a platform for greater value.
I'm truly proud of what the ZB team accomplished in the quarter and throughout 2020.
Before we start the Q&A session, a reminder to please limit yourself to a single question and one follow up so that we can get through as many questions as possible during the call.
With that, operator, may we have the first question, please?

user
compname announces q4 adj earnings per share of $2.11.
q4 adjusted earnings per share $2.11.
q4 earnings per share $1.59.
q4 sales $2.085 billion versus refinitiv ibes estimate of $2.08 billion.
not providing financial guidance at this time.

assistant