Kristin Mulvihill Southey - Former Vice President of Investor Relations Robert A. Kotick - Chief Executive Officer, President and Director Dennis Durkin - Chief Financial Officer Eric Hirshberg - Chief Executive Officer of Activision Publishing, Inc Michael Morhaime - Chief Executive Officer of Blizzard Entertainment, Inc and President Blizzard Entertainment, Inc Thomas Tippl - Chief Operating Officer

Brian J. Pitz - Jefferies LLC, Research Division Daniel Ernst - Hudson Square Research, Inc. Arvind Bhatia - Sterne Agee & Leach Inc., Research Division Colin A. Sebastian - Robert W. Baird & Co. Incorporated, Research Division Christopher Merwin - Barclays Capital, Research Division Douglas Creutz - Cowen and Company, LLC, Research Division Andrew E. Crum - Stifel, Nicolaus & Company, Incorporated, Research Division Eric O. Handler - MKM Partners LLC, Research Division

Good day, and welcome to the Activision Blizzard's Fourth Quarter 2014 Earnings Conference Call. Today's conference is being recorded. At this time, for opening remarks and introductions, I would like to turn today's call over to Ms. Kristin Southey. Please go ahead, Kristin.

Good afternoon, and thank you for joining us today for Activision Blizzard's Fourth Quarter 2014 Conference Call. Speaking on the call today will be Bobby Kotick, CEO of Activision Blizzard; Dennis Durkin, CFO of Activision Blizzard; Eric Hirshberg, CEO of Activision Publishing; Mike Morhaime, CEO of Blizzard Entertainment; and Thomas Tippl, COO of Activision Blizzard. I would like to remind everyone that during this call, we will be making statements that are not historical facts. These are forward-looking statements that are based on current expectations and assumptions that are subject to risks and uncertainties. A number of important factors could cause the company's actual future results and other future circumstances to differ materially from those expressed in any forward-looking statements, including the factors discussed in the Risk Factors section of our SEC filings, including our 2013 annual report on Form 10-K, which is on file with the SEC, and those indicated on the slide that is showing. The forward-looking statements in the presentation are based on information available to the company as of the date of this presentation. And while we believe them to be true, they ultimately may prove to be incorrect. The company undertakes no obligation to release publicly any revisions to any forward-looking statements to reflect events or circumstances after today, February 5, 2015, or to reflect the occurrence of unanticipated events. I'd like to note that certain numbers we will be presenting today will be made on a non-GAAP basis, excluding the impact of the change in deferred net revenues and related cost of sales with respect to certain of our online-enabled games; expenses related to stock-based compensation; the amortization of intangible assets; expenses including legal fees, costs, expenses and accruals related to the purchase transaction; and related debt financing and the associated tax benefits. Please refer to our earnings release, which is posted on www.activisionblizzard.com for a full GAAP to non-GAAP reconciliation and further explanation. There's also a PowerPoint overview, which you can access with the webcast and which will be posted to the website following the call. In addition, we will also be posting a financial overview highlighting both GAAP and non-GAAP results in a 1-page summary sheet. And now, I'd like to introduce our CEO, Bobby Kotick. Robert A. Kotick: Thank you, Kristin. 15 years ago, our investors had very little interest in video games or video game companies. In fact, at that time, the Internet was creating great amounts of wealth, in fact, what we would consider more wealth creation than we've seen in modern commerce. And companies without page views and click-throughs were very out of favor. We thought it'd be a good time to start an Investor Relations program, but we had a very difficult time finding anybody that actually wanted to run it. And so we told the recruiter to start looking for out-of-favor industries, industries that were as out-of-favor as video games, and they couldn't find any anymore out-of-favor industry than tobacco. So fortunately, for our shareholders, we were able to pry away from Philip Morris Kristin Southey, who thought it would be more fun to extol the virtues of video games than investing in tobacco. When Kristin joined in March 2000, the company had a market value of $337 million. During her tenure, the stock has grown at a compound annual rate of 23% versus the S&P at 4%, and at a rate that's greater than the rate of growth at Berkshire Hathaway, which, as you know, is our benchmark for almost everything. Kristin has protected our treasury, she has collected our receivables with the smallest rate of bad debt writeoffs of any major company in the video game industry, and for me, she's always been a fantastic professional, great partner and a pleasure to work with. Kristin has decided to take some time off, something that her work ethic never allowed her to do during her 15 years that she's been with the company. Both Brian and I are very incredibly grateful for all her contributions and I'll miss her greatly. She has assured me, however, that purely for our own personal enjoyment, she continues -- she will continue to keep all of you analysts in line, especially Michael Pachter. She's handing the reigns over to someone terrific and we're confident that Amrita will make Kristin proud as she leads our IR program and protect the legacy Kristin has created as one of the world's great IR efforts. So everyone in the room welcome Amrita, and thank you, Kristin, for all of your great contributions, for your extraordinary service, for your unyielding effort and for your incredible commitment to the principles of creating true stakeholder value. Thank you. And now, I get to share of our record results. So of course, we'll be reviewing in detail in a moment our record results, but we had another incredibly successful year. We had record results across a number of different areas. We introduced new franchises with outstanding game play. We expanded on new higher-margin business models. We continued investing in some of the world's most important entertainment franchises, and we continued to attract extraordinarily talented people to our company. In terms of results, on a non-GAAP basis, we delivered record earnings per share, which increased more than 50% from the previous year, double-digit revenue growth and higher-margin record digital revenues that represents an all-time high of 46% of total revenues. And we produced more great content in 2014 than ever before. Call of Duty: Advanced Warfare was the #1 release of the year and the franchise's cumulative revenue is now over $11 billion. Destiny was the #3 new release of the year and attracted over 16 million registered users. Skylanders, with over 240 million toys sold life to date was, again, the #1 kids console game. World of Warcraft reached over 10 million subscribers and remains the #1 subscription-based MMORPG in the world. Diablo III is the #1 PC role-playing game of the year; and Hearthstone, which is named Game of the Year, has already attracted more than 25 million registered players. Last year, we launched 2 of the most successful new entertainment brands, Destiny and Blizzard's Hearthstone. Combined, they attracted over 40 million registered players worldwide and generated more than $850 million in non-GAAP revenue, a testament to our team's proven abilities to capture the imaginations of millions of people around the world time and time again. This year, we expect to expand our leading franchise portfolio to 10, up from 5 franchises at the beginning of 2014. Our amazingly talented teams will continue to produce the world's best content for gamers. And today, our board has once again increased our dividend, authorized a $750 million share repurchase program and the repayment of another $0.25 billion of our debt. Today, we've return nearly $10 billion to our shareholders in dividends and repurchases since 2008. We have a growing portfolio as the very best entertainment franchises and great confidence in our long-term future. I'll now turn the call over to Dennis.

Thanks, Bobby. Good afternoon, everyone. Today, I will review our Q4 and full year 2014 financial results, and then I will review our outlook for 2015. 2014 was a very important year that delivered strong financial results that exceeded our outlook, while setting the stage for growth in the years to come. In 2014, on a non-GAAP basis, we generated double-digit revenue growth, record digital revenues, a 32% operating margin, a record EPS, which is up more than 50% year-over-year and operating cash flow of approximately $1.3 billion. From a capital perspective, we strengthened our balance sheet, paid a record dividend to shareholder, repaid $375 million of our debt and continued to invest in the strongest pipeline of new opportunities with high-margin potential in our history. Our financial performance was driven by our strong diversified product portfolio. This year, our top franchise has maintained their leadership positions, and we successfully expanded our portfolio of IP with Destiny and Hearthstone, which drove more than $850 million in combined non-GAAP revenue. Turning to our financial results. Please refer to our earnings release for full non-GAAP to GAAP reconciliation. Also, the numbers I will be quoting are compared to the year prior, unless otherwise noted. Please also note that all percentages are based on revenues, except for the tax rate. Our Q4 results exceeded our outlook and were driven by Activision Publishing's Call of Duty: Advanced Warfare, Skylanders Trap Team and continued sales of Destiny. In addition, Blizzard's World of Warcraft and Hearthstone also had a strong sales in the quarter. For Q4, on a GAAP basis, we generated revenues of $1.57 billion and an operating margin of 28%. We had interest expense of $50 million and our tax rate was 7%. Our GAAP and non-GAAP fully diluted share count was 741 million and GAAP EPS was a record $0.49. In Q4, the weakening of foreign currencies against the dollar did not have a significant impact on our results due in part to our hedging program, however, the lower euro and British pound rates will impact our outlook for the full year of 2015, which I will discuss in a moment. On a non-GAAP basis, for the quarter, we generated revenues of $2.21 billion, an operating margin of 41%. Our non-GAAP tax rate was 19% and our quarterly non-GAAP EPS was a record $0.94. Our solid Q4 results capped a better-than-expected year. For the full year on a GAAP basis, we generated revenues of $4.41 billion, operating income of $1.18 billion, a tax rate of 15% and record EPS of $1.13. On a non-GAAP basis for the year, we grew revenues 11% year-over-year to $4.81 billion. Digital revenues grew 40% year-over-year and accounted for a record 46% of total revenues. Our strong growth in digital revenue was driven by new and growing high-margin opportunities, including game downloads for consoles, in-game purchases from our first free-to-play game Hearthstone, and new offerings for World of Warcraft, including the pay character boost. Our non-GAAP operating income was $1.53 billion, reflecting an operating margin of 32%, adjusted EBITDA margin of 33% with adjusted EBITDA being defined as non-GAAP operating income plus depreciation. Our tax rate was 20% and our EPS was a record $1.42. 12 months ago, when we gave our original non-GAAP outlook, it was $4.6 billion in revenue and $1.26 in EPS. So this year, we again exceeded our initial guidance with non-GAAP revenues exceeding our outlook by $213 million and non-GAAP EPS exceeding our original outlook by $0.16 or 13%. In terms of cash flow, it was another solid year where we generated operating cash flow of approximately $1.3 billion and free cash flow of approximately $1.2 billion. Turning to the balance sheet. As of December 31, we had approximately $4.9 billion in cash and investments, of which $1.2 billion was held domestically. We had gross debt outstanding of $4.4 billion and net cash of approximately $500 million. And today, based on the strength of our balance sheet and confidence in our long-term performance, our Board of Directors approved 3 important capital allocation matters. Specifically, they authorized a $250 million repayment of part of our term loan, which we expect will be paid in February; authorized a 2 year, $700 million -- $750 million share repurchase program and approved an increased to our cash dividend per share to a record $0.23, a 15% increase over last year, which will be payable in May. Now let's turn to our outlook. This year, we expect Activision Publishing to launch more content than it has in many years. The first launch of the year was Call of Duty Online for China. While we modeled minimal financial contributions from COD Online in our 2015 expectations, we and our partner, Tencent, are very excited about the long-term prospects of the game. This type of free-to-play opportunity takes time to ramp to full popularity and our focus in 2015 will be on building and growing the audience before meaningful monetization. For Destiny, we expect to release an expansion pack in Q2 and to launch more new content in the back half of the year. With respect to Call of Duty, this is an important year for the franchise as we expect release multiple Map Packs, microtransaction content and an exciting new game in Q4 from one of our top development teams. For modeling purposes, we are planning on sales to be consistent with the Advanced Warfare. Additionally, in Q4, we expect to release an innovative new Skylanders' game. And finally, we are working on several unannounced initiatives that we will say more about in the months ahead. In 2014, Blizzard generated record avenues and near-record operating income. The year was driven by Diablo III: Reaper of Souls and World of Warcraft: Warlords of Draenor, both of which generated significant revenues and income that will not have comparable releases this year. In addition, we expect WoW subs to decline as we have seen historically in the year following the release of a large-scale expansion. In terms of new releases, in January, Heroes of the Storm Blizzard second free-to-play game entered closed beta. While we expect it will take time to ramp in monetization as it builds its audience, we are very excited about the opportunity we have in front of us with this game. In addition, this year, Blizzard will continue to release new content for Hearthstone as well as bringing the game to mobile devices later in the year. Lastly, Overwatch, which was just announced in November, is expected to go into closed beta later this year. While we are very excited about this new franchise, it has not been factored into our outlook. Finally, Blizzard will continue to invest in our own distribution platform, Battle.net, which will need to support a significantly larger audience and commercial capabilities going forward. So before we review the 2015 numbers, I want to highlight a couple of important things. First, our planning assumption this year is for our tax rate to revert back to our normal long-term target of around 24%, up from 2014 where the strong international performance from Blizzard and the R&D tax credit drove the rate lower. And second, as I mentioned earlier, there will be meaningful impact on our results year-over-year due to the weakness in the euro and to a lesser extent, the pound. Approximately 50% of our annual revenues are generated overseas and an even higher percentage of our operating income is international. As the vast majority of our product development and headcount costs are U.S. based, we have fewer natural cost offsets to dampen the impact of currency translation. To put the decline in perspective, for 2014, the average euro-dollar exchange rate was $1.33, and today, our outlook assumes the euro rate of $1.13 for the balance of calendar year 2015. As such, our revenues and earnings will be translated to dollars at a much lower levels than in 2014. This decline is somewhat offset by our hedging activities which are reflected in our outlook. Now let's review our 2015 numbers, which are based on spot rates as reflected in our slide deck. Note that revenue and EPS will increase if the euro or pound strengthens versus the U.S. dollar. For 2015, we expect GAAP revenues of $4.1 billion, product costs of 24% and operating expenses of 51% GAAP. For both GAAP and non-GAAP, we expect interest expense of $201 million, and a fully diluted weighted average share count of 750 million. Our GAAP tax rate is expected to be 21% and GAAP EPS is expected to be $0.89. On a non-GAAP basis, we expect revenues of $4.4 billion, product costs of 25% and operating expense of 45%. We expect a non-GAAP operating margin of 30% and an adjusted EBITDA margin of 33%. Our non-GAAP tax rate is expected to be 24% this year, and non-GAAP EPS is expected to be $1.15. To put the numbers in perspective, in 2015, FX accounts for 6 percentage points of the 9% decline of our non-GAAP revenue. Operationally, revenues are down slightly due to a lighter slate, investments in infrastructure and scaling of new properties with free-to-play business models. In 2015, as I mentioned, we expect non-GAAP EPS of $1.15. Note that $0.14 of the year-over-year decline is due to FX translation and $0.08 is due primarily to the higher tax rate. At constant currency and tax rate, EPS would be down approximately $0.05 year-over-year. Turning to our quarterly outlook. In 2015, we expect a lighter first half of the year as compared to last year as we don't have a comparable launch to the high-margin Diablo III: Reaper of Souls, and we only expect modest contributions from Call of Duty Online and Heroes of the Storm, as I mentioned earlier. On a GAAP basis, for the March quarter, we expect net revenues of $1.14 billion, product costs of 28%, operating expenses of 38%. We expect GAAP and non-GAAP interest expense of $50 million, a GAAP tax rate of 20%, a GAAP and non-GAAP share count of 745 million and GAAP EPS of $0.37. For the March quarter on a non-GAAP basis, we expect revenues of $640 million, product costs of 22% and operating expenses of 62%. We expect a non-GAAP tax rate of 25% and non-GAAP EPS of $0.05. So in summary, Activision Blizzard delivered record financial results during its transformational year. In 2015, despite currency headwinds, we expect strong industry fundamentals, continued expansion and investment in our franchise portfolio while keeping a keen eye on costs and a laser focus on execution. Today, we are well positioned to capitalize on the large and growing global opportunity in front of us. And we believe the investments we are making in 2015 will drive growth in revenue, operating margin and EPS in 2016 and beyond. Now I will turn the call over to Eric to discuss Activision Publishing.

Thanks, Dennis. Activision Publishing had another record-breaking and industry-leading year. The North America and Europe combined, Activision Publishing was the #1 retail publisher and had 3 of the top 5 best-selling new releases of 2014. With #1 Call of Duty: Advanced Warfare; #3, Destiny; and #5 Skylanders Trap Team when including toys and accessories. Starting with Call of Duty. We want to thank our growing community of millions of Call of Duty players for making Advanced Warfare the #1 console game globally, which has delivered well over $1 billion in sell-through, and far and away the #1 title worldwide on next-gen platforms. As we anticipated and discussed on our last earnings call and as we saw across the industry, old gen sales to retail were down year-on-year, but for this year, we expect next-gen growth to easily offset that dynamic. Call of Duty: Advanced Warfare was the first game released on our new 3-year development cycle and, as a result, was one of the most highly acclaimed Call of Duty games in recent years. We're also looking forward to a very strong season of digital content for Advanced Warfare starting with our first digital Map Pack release, Havoc, which launched last Tuesday and included a new zombies co-op experience. I'm happy to report that sales so far are up double-digit percentages year-on-year, both for standalone Map Packs and for Season Pass. And looking ahead to this year's holiday release, while we're not yet ready to discuss it fully today, we're excited to announce that it will be made by the team at Treyarch, whose last 2 games, Black Ops and Black Ops II, remain the biggest selling titles in franchise history. This fall's game will be Treyarch's first on the 3-year development cycle, it will be loaded with innovation and we're excited to share more details with our community soon. In January, we brought the largest video game franchise in the west to the largest video game audience in the world with the release of Call of Duty Online in China. This is Activision Publishing's first major entry into one of the fastest-growing business models in our industry, free-to-play. While it's too early to project the performance, and we expect meaningful contribution will grow over time, initial consumer momentum is positive. The Baidu Index, which measures the volume of searches on China's main search engine and is widely cited as the indicator of brand's momentum, puts Call of Duty Online on par with the rollout of League of Legends. Now, let's turn to Destiny. Along with our partners at Bungie, we broke industry records as Destiny became the biggest new intellectual property launch in video game history, and was the third biggest new release of the year in North America and Europe combined. Destiny now has over 16 million registered users with a massive audience of active players still averaging over 3 hours of game play per day, a figure that has stayed remarkably stable since launch. Destiny also performed the rarely seen console gaming feat of growing active players from November to December, driven by the release of the new expansion pack, the Dark Below. And it was the #1 played game in North America on a PS4 in December. In Q2, we expect to launch the game's second expansion pack, House of Wolves, and later this year, we will announce a major content release for the fall, so stay tuned. On to our third tent-pole franchise, Skylanders. As of today, life-to-date retail sales for Skylanders has exceeded $3 billion. And in 2014, Skylanders outsold all action figure lines and was the #1 kid console game globally for the fourth year in a row, and as a franchise, outperformed its nearest competitor by 30%. Skylanders Trap Team, our fall release, outsold its nearest competitor by 17% and continued the incredible streak of breakthrough innovation in the franchise and was also one of the most highly acclaimed Skylanders' games today. This year, our toy sales grew as the unique mechanic of bringing toys and traps to life has kids and parents buying more toys and accessories than ever before. We expect to benefit from the next-gen installed base growth in 2015. And later this year, we will announce our next main release with yet another breakthrough innovation for the category. So in closing, over the last 3 years, Activision Publishing has methodically expanded its portfolio, and for the first time in its history, now has 3 tent-pole properties, each of which generated over $500 million in non-GAAP revenue this year and drove the highest digital revenues in Activision Publishing's history. We expect Call of Duty Online in China will become an important new revenue contributor and lead the way with new play dynamics and business models. We also have multiple unannounced initiatives in development, which we will reveal later in the year. Finally, across our tent-pole franchises, Activision Publishing now has over 70 million players playing over 4 billion hours a year, a massive audience with a depth engagement that we expect to continue to grow and monetize over the coming years. And I'll now turn the call over to Mike Morhaime to talk about Blizzard.

Thank you, Eric. Thanks to the efforts of our dedicated and talented employees around the world. Blizzard Entertainment delivered one of our most successful years ever. In 2014, we released award-winning expansions, World of Warcraft: Warlords of Draenor, on Windows and Mac, and Diablo III: Reaper of Souls on Windows, Mac and consoles. We also launched our first free-to-play game, Hearthstone, which has collected Game of the Year awards and nominations as well. Hearthstone was released first on Windows and Mac and later on iPad and Android tablets, bringing Blizzard into the mobile space for the first time. Additionally, we supported Hearthstone with 2 major content releases, the Curse of Naxxramas Adventure and Goblins vs. Gnomes, our first expansion. Our success across multiple game genres and platforms in 2014 drove Blizzard's best-ever annual revenue, and more importantly, helped us continue expanding our global community of gamers. On the World of Warcraft side, we ended the year with the release of Warlords of Draenor in November. As we previously announced, the expansion was a great success in all regions, pushing the global player base above 10 million. The introduction of the character boost as well as design updates to the game made it much easier for lapsed players to return to World of Warcraft and quickly reintegrate themselves into the community. Looking ahead, we're already preparing new content and features to support the game in the coming months. As with previous expansions, we do anticipate a decline in subscribership in the coming months, particularly out of Asia, where the subscriber base has been more fluid. Moving on to Hearthstone. The game continued to excite and attract players around the world. After announcing the Goblins vs Gnomes expansion at BlizzCon in November, we launched it a few weeks later in December. This was followed shortly after with the Android tablet version of the game. All this activity helped drive Hearthstone's highest monthly active players ever in December as well as our highest revenue quarter-to-date for Hearthstone. Registered players for the game have now reached over 25 million, capping off a spectacular start for Hearthstone. It's gratifying for us to see how the global Blizzard community has responded to our first foray into a new genre as well as the free-to-play market and gaming on tablets. We'll keep working hard to build on last year's momentum with more content in 2015 as well as the upcoming Android phone and iPhone versions of the game. We do have another free-to-play game in the pipeline with Heroes of the Storm, our online team brawler. This is a genre that's proven to be very popular in the online space in recent years. We're excited to put our unique spin on this genre in a game that stands out from the rest, with highly accessible plays and iconic Blizzard characters from the Warcraft, StarCraft and Diablo universes. Heroes of the Storm has recently hit some major development milestones including the start of closed beta in January, along with sales of the Founder's Pack, a digital bundle for $39.99 that gives player an array of heroes, skins and other content as well as instant access to the beta test. We're continuing to ramp up our infrastructure and game service capabilities, allowing us to open up the game to more of the 9 million players who have signed up for beta testing. Excitement around Heroes of the Storm continues to build as we're seeing more grassroots tournaments pop up and major eSports entities are already creating professional teams for the game. Looking further ahead, we gave the world a glimpse of what's next for Blizzard at BlizzCon. We kicked off the show by unveiling Overwatch, a team-based first-person shooter featuring an amazing cast of characters of heroes and set in an all-new Blizzard game universe. The announcement trailer for Overwatch was a viral sensation on the Internet, while attendees and press alike raved about the game play after trying an early build on the BlizzCon show floor. In addition to Overwatch, we also showcased the final chapter in the StarCraft II trilogy, Legacy of the Void. This will be a standalone expansion, meaning anyone can jump right into the StarCraft II experience without needing to own the previous games. We expect beta testing for both Overwatch and Legacy of the Void to start later this year. For a while now, we've been discussing the strong pipeline of Blizzard games. Gamers have long known us for World of Warcraft, StarCraft and Diablo. Now with Hearthstone added to the mix and Heroes of the Storm and Overwatch soon to follow, we will have more games in more genres and on more platforms than ever before. As busy and successful as 2014 was, we're looking to build on that momentum this year and deliver even more excitement to players in 2015. Thanks, and I'll turn the call over to Thomas.

Thanks, Mike. Before we open the call to questions, I'll take a moment to summarize the 3 key takeaways from today's call. First, from a financial perspective, 2014 was an excellent year for Activision Blizzard: we beat our plan, delivered double-digit top line growth, grew EPS by 50% to a new record and strengthened our balance sheet by generating $1.3 billion of operating cash flow and paying down debt. Second, from a strategic perspective, our investments into new franchises are paying off. We created 2 new tent-pole franchises with Destiny and Hearthstone that are profitable right out of the gate. Destiny and Hearthstone also have great comp and pipelines that we expect to contribute to our results every year in a significant way. For perspective, only 1 year ago, 3 franchises generated the vast majority of our revenues and operating income. During 2014, we've expanded that to 6 franchises, and for 2015, we expect this number to grow to 10. Third, we have been, and will continue to reposition our investments priorities against fast-growing business model, platform and geographic opportunities that have proven, profitable scale. We're already leading in digital sales, including microtransactions, value-added services and full-game digital downloads. We have a strong pipeline of free-to-play games coming to market in 2015 with Heroes of the Storm and Call of Duty Online. This also positions us well for the fast-growing geography, which is Asia, where free-to-play is the dominant business model. From a platform perspective, mobile and tablet have also moved up on our priority list, and we're excited about the success Hearthstone has had on tablets and look forward to the rollout on Android and iOS phones. So in summary, while our outlook for 2015 is significantly impacted by adverse exchange rate movements, we expect profitable growth to resume in 2016 and beyond based on the continued expansion of our franchise portfolio, particularly into free-to-play in China and mobile, along with an anticipated return to growth in the console software market and continued growth in higher-margin digital revenues. So now we'll take a few questions.

[Operator Instructions] And we'll take our first question from Brian Pitz with Jefferies. Brian J. Pitz - Jefferies LLC, Research Division: Our question on Hearthstone monetization. The game is already a big hit. We continue to be impressed with the size of Twitch audiences, suggesting basically off-the-charts engagement. We're wondering if you take the average Hearthstone player, could you give a sense for the trend of their in-game spending over time, especially as the recent expansion like Goblins and, I guess, Gnomes are launched? How should we be thinking about the expansion packs? Is that a new source of spikes at the beginning when we launch them?

Thanks for the question. Well, we're definitely -- we've definitely been thrilled with the engagement levels of Hearthstone throughout the year. I think you're correct when you think about their spending behavior. They certainly start out building their decks, and then their engagement and spending patterns certainly follow the release of new content throughout the year. So and that is what we saw, and so I think that drove our record Hearthstone engagement and revenue quarter in the fourth quarter of the year.

We'll take our next question from Daniel Ernst with Hudson Square. Daniel Ernst - Hudson Square Research, Inc.: Eric, you touched on this a little bit, but Call of Duty, still the #1 title on console. But clearly, the unit volumes are down year-on-year and down from the peak of where they had been. Can you talk about some of the drivers of that, was that -- is it game-specific, is it cycle-specific, is it the franchise actually weakening or as people fear? And what are the prospects for regrowing the franchise going forward?

Yes, I don't think it's franchise-oriented, and just to level set here, it was the #1 game for the sixth consecutive year in North American, and we're now well past $1 billion in sell-through. And as we've just announced, we're off to a great start with our DLC season on Advanced Warfare, which is up double digits both on Season Pass and on a la carte DLC sales and engagement is higher than it was a year ago. Also, Advanced Warfare is a great game. It was really well received by both critics and fans, and it created a lot of positive buzz for the franchise. And we attach at franchise high-levels to the next-gen consoles which I think is what matters most when we're looking towards the future. So I actually think the franchise ended the year in a great place, and we entered 2015 with a lot of momentum. 2014 was the height of the console transition. So I think to compare it to years when we were selling -- when Call of Duty was able to sell to a much larger and more stable installed base is not an apples-to-apples comparison. Our 2015 guidance on Call of Duty's new release is flat year-over-year, but we still have a fairly conservative planning assumption. We have Treyarch developing the game. We'll have a larger installed base of next-gen hardware to sell into, and we believe our Q4 new release can be one of our best games yet. So we think the future is bright.

We'll go next to Arvind Bhatia with Sterne Agee. Arvind Bhatia - Sterne Agee & Leach Inc., Research Division: First, as someone who has covered the company for a long time and worked with Kristin from the very beginning, I would like to echo the positive comments. She has set the bar pretty high for IR programs. My question is for Mike on the Blizzard side, thanks for the update on Heroes of the Storm. Wanted to just see if you could provide some color on maybe the timing of the release and what the feedback has been from the beta? The Founder's Pack, how is that done, et cetera? Just how should we think about kind of the revenue opportunity in say '15 and '16?

Okay, thanks for the question. So at this point, we're at the closed beta phase. We entered closed beta last month in January. We're very pleased with the response from our beta testers. The feedback that we've been receiving has been very positive. We are going to continue increasing the invites and concurrency as we test out the infrastructure for our game and drive towards open beta. We don't have any dates to announce on that. I think that's going to really be determined by how the testing goes, but we're eager to get the game into the hands of as many people as possible and drive towards our official commercial launch.

We'll go next to Colin Sebastian with Robert Baird & Co. Colin A. Sebastian - Robert W. Baird & Co. Incorporated, Research Division: And I'll echo everyone's comments. Kristin, good luck and keep in touch. My question, though, I think, is for Eric. I guess looking back at the performance of Skylanders, the commentary was generally positive, although we certainly see more competition in the space. As the originator of this type of experience, how should we think about the ability of the Skylanders team to evolve the experience? And in particular, remain relevant with what's a fairly fickle audience base?

Well, that fairly fickle audience base has made Skylanders the #1 console game globally with kids for the fourth year in a row. So I think that our relevance remains very high and our momentum is strong with the audience. It's also very true and inarguable that we continue to see more and more competition entering the category. But we believe we have 3 important advantages in relation to that competition. One is what, I think, at this point needs to be seen as our proven ability to out-innovate competitors. Critics and fans have both acclaimed our recent titles to that end, and we believe that the most important reason we've been able to stay on top of the category is that we've had the best games in the category, and we plan to continue that trend in 2015. Number two is that we're not constrained by the limitations of existing intellectual property or characters or anyone else's release slate. We only have to answer one question each and every time we design a game, which is what do we think will be the most fun experience for our fans to have? And three, while there's more competition, I also think it's notable that we are able to grow our annual revenue per user this year through new game play innovation like the introduction of Traps, and we plan to continue to do similar things like that in the future.

We'll take our next question from Chris Merwin with Barclays. Christopher Merwin - Barclays Capital, Research Division: Kristin, it's great to work with you and all the best in the future. So how did digital downloads trends on new-gen consoles in the 4Q as compared to last year? Are you seeing an uplift in downloads on new gen or is that happening on old gen also? And would you mind just telling us directionally how digital sales trended for Call of Duty this year versus last? And then Dennis, just a quick follow-up. You mentioned that the $0.08 drag on non-GAAP earnings this year, I think, was mostly from tax rate, but I also noticed that share count you're forecasting is up year-on-year, so just curious if that includes the impact of buybacks?

Yes, just to be clear, the $0.08 does include our increased share count in our model of $0.01, and we don't have any buybacks included in that number. So to just sort of bring that point to roost. The second part -- or the first part of your question, though, on digital downloads, yes, obviously, very positive momentum in terms of digital download on consoles. In Q4 year-over-year, as the next-gen installed base grew, we did see a doubling effectively on Call of Duty in terms of our digital downloads year-over-year. So that's very, very nice. We're now seeing sort of mix percentages. We talked about high teens on the last call. It kind of remained in sort of the teams area in terms of total overall mix, and that'll sort of move a little bit throughout the year as you have different sort of retail pushes, et cetera. But overall, we've seen just great demand for digital on both next-gen systems as well as on past gen systems. So it's a pretty consistent trend that we're seeing.

We'll take our next question from Doug Creutz with Cowen. Douglas Creutz - Cowen and Company, LLC, Research Division: Eric, could you talk a little more about Call of Duty online. It has been now in open release for a month. So you have some idea, you mentioned that the anticipation of the game was very high. So I think that you must have a lot of players in the game. And then is there anything that we should be looking at as analysts to try and assess how the game is doing that you can think of? That would be helpful as well.

Thanks. We think the game is going to be great and our partners at Tencent do, too. As I mentioned in my comments, the Baidu Index puts Call of Duty Online on par with the rollout of League of Legends in terms of consumer interest, which is a great start. It's been just over 3 weeks since we launched and we're still an open beta, so as I said, it's too early for us to share any financial metrics, but we're optimistic. In terms of 2015 guidance, we assume modest contributions from Call of Duty Online but that's simply because, even with the most successful free-to-play games in the market, they've taken time to build revenue to expand their audiences. So we feel fortunate that Tencent has the strongest track record in that market, and I think you can look to games like Crossfire or League of Legends to see how the early ramp up occurs for large successful games in the Chinese market. That's a ramp that takes time to build up, but one that is ultimately significant and worth it.

We'll next go to Drew Crum with Stifle. Andrew E. Crum - Stifel, Nicolaus & Company, Incorporated, Research Division: As it relates to Destiny, Eric, can you comment on your retail position exiting 2014? What does the channel inventory look like? And then talk about the puts and takes for the franchise when you compare '15 to '14 from a top and bottom line perspective?

Okay, well, maybe I'll take that one actually, and maybe, Eric, if there's any follow-up commentary you want to have just on the content pipeline. This is Dennis. Obviously, we don't talk about specific channel levels by franchise, but overall, we're comfortable with the channel levels that we have across our various portfolio and ended the year in a very good position relative to that. I would make one comment relative to overall channel inventory levels that was the move to digital. I'd say retailers are managing their channel inventories very closely, so the overall channel is down versus previous years, and we expect this trend to continue as the transition to digital continues over the coming years. Relative to the puts and takes for Destiny and sort of comparing '14 and '15, obviously, last year was a major launch with Destiny 1 and we won't have a comparable launch this year, although we do have content, as I mentioned and Eric mentioned, in the back half of the year. On the flip side, though, on the cost side, there was significant amortization of Destiny's development costs that came through in 2014, that will not be in 2015. So even though the revenue will be down based on the new content pipeline and a smaller release, effectively, we do expect actual profits to be up for the franchise.

And the 2 things I would add, I think the 2 most important things to think about in relation to Destiny as we look forward now that the launch is behind us, first is just a record-breaking size of the launch and the amount of players we brought into the top of that funnel. And then the second is the remarkable ongoing engagement that we're seeing. That's obviously the combination you want as you strive to build a 10-year franchise. We have a massive audience and they're averaging over 3 hours of play per day. So both of those things speak to the fact that Destiny is a great game. As I mentioned, we have a second expansion pack on the way and a major content release coming in the fall and a very robust pipeline planned after that. Beyond that, whenever you have a large and highly engaged community, there are obviously opportunities for us to deliver a lot of different kinds of content that we think that player base would find valuable and appreciate and that's what we're planning on doing.

And we'll take our last question from Eric Handler with MKM Partners. Eric O. Handler - MKM Partners LLC, Research Division: Wonder if you can talk a little bit about your cash and capital allocation. You got about 25% of your cash onshore. Is there -- what are your plans or how can you use some of the offshore cash maybe to pay down debt? Or what are your plans for some of that offshore cash? And then as you think about, you have -- you're paying down some of your debt, what's your long-term view of the debt? It was 7-year debt when you originally issued those notes. Is that something you want to keep paying down? Or just you want to -- do you want to sustain a certain amount of debt? And then last, as you think about the remaining Vivendi shares that could come to market, possibly your view of those shares as a possible buyback opportunity?

Sure. Thanks for the question, Eric. We've obviously talked about capital allocation in the past, I think you see some of the priorities relative to that highlighted in the capital allocation choices we made today. In general, we're trying to balance the various needs of our stakeholders while maintaining flexibility over the long term to invest in the business and take advantage of opportunities that may arise and really strong cash flows and a strong balance sheet help us support that objective. We've said in the past we're very comfortable with sort of capital structure that we have today. We're continuing to pay down as we pointed out today with the $250 million buy down of our Term Loan B. We're in a net cash position when you sort of do the puts and takes of our debt versus our cash. We're very -- we feel like we're in a very flexible position and that allows us to make the capital allocation choices that we did today regarding the dividend and obviously the authorization of the buyback. The last part of your question I think was relating to Vivendi, we don't really have anything to announce relative to that, we don't know their intentions, we are in their window period that does open up, but you'd have to ask them about their intentions relative to that. And then, I guess, the first part of your question related to euro cash, and we do have a sizable, obviously, overseas cash balance that is, for our financial statement, permanently invested abroad, and we think that will be used to fund our international options and opportunities going forward, so that's our plan for that. So thanks, Eric, for your call.

Okay, I would like to thank everyone for their time and interest today. I'd like to thank Bobby and everyone for their super great comments, and all of you, it's been a great 15 years. So thank you, all. Robert A. Kotick: Thank you, Kristin.

This concludes today's conference. Thank you for your participation.