Kerri Thurston - Director of Investor Relations Clifton A. Pemble - Chief Executive Officer, President, Director, President of Garmin International Inc, President of Garmin USA Inc and President of Garmin AT Inc Douglas G. Boessen - Chief Financial Officer and Treasurer

Andrew Spinola - Wells Fargo Securities, LLC, Research Division Simona Kiritsov Jankowski - Goldman Sachs Group Inc., Research Division Mark Sue - RBC Capital Markets, LLC, Research Division Robert Spingarn - Crédit Suisse AG, Research Division James E. Faucette - Morgan Stanley, Research Division Charles L. Anderson - Dougherty & Company LLC, Research Division Richard Valera - Needham & Company, LLC, Research Division John F. Bright - Avondale Partners, LLC, Research Division Jeremy David - Citigroup Inc, Research Division Brad Erickson - Pacific Crest Securities, Inc., Research Division Jonathan Ho - William Blair & Company L.L.C., Research Division Tavis C. McCourt - Raymond James & Associates, Inc., Research Division William V. Power - Robert W. Baird & Co. Incorporated, Research Division Kristine T. Liwag - BofA Merrill Lynch, Research Division

Good day, everyone, and welcome to the Garmin Third Quarter 2014 Earnings Call. Today's call is being recorded. At this time, I'd like to turn the conference over to Kerri Thurston, Director of Investor Relations. Please go ahead.

Good morning. We'd like to welcome you to Garmin Ltd.'s Third Quarter 2014 Earnings Call. Please note that the earnings press release and the related slides are available on Garmin's Investor Relations site on the Internet at www.garmin.com/stock. An archive of the webcast and related transcript will also be available on our website. This earnings call includes projections and other forward-looking statements regarding Garmin Ltd. and its business. Any statements regarding our future financial position, revenues, earnings, market share, product introductions, future demand for our products and objectives are forward-looking statements. The forward-looking events and circumstances discussed in this earnings call may not occur, and actual results could differ materially as a result of risk factors affecting Garmin. Information concerning these risk factors is contained in our Form 10-K filed with the SEC. Presenting on behalf of Garmin Ltd. this morning are Cliff Pemble, President and CEO; and Doug Boessen, CFO and Treasurer. Also joining us today is Kevin Rauckman, who continued to provide support throughout the third quarter. At this time, I'll turn the call over to Cliff. Clifton A. Pemble: Thank you, Kerri, and good morning, everyone. As announced earlier today, Garmin reported strong third quarter results that included growth in revenue, operating income and pro forma EPS. Consolidated revenues increased 10% year-over-year with double-digit growth in each of our non-Auto/Mobile segments. Aviation, Fitness, Marine and Outdoor revenues grew 24% on a combined basis and contributed 56% of total sales in the quarter. Gross and operating margins were 56% and 25% respectively, a year-over-year improvement driven by segment mix. Operating income grew 16%, with non-Auto/Mobile segments generating 70% of total operating income. In the third quarter, we executed our previously announced intercompany restructuring, which resulted in $308 million of tax expense. This onetime expense drove a GAAP net loss per share of $0.76. After adjusting for foreign currency losses and onetime events, we generated $0.76 of pro forma EPS in the quarter, representing an increase of 10% over 2013. A reconciliation of our pro forma EPS is provided in the appendix to these slides. So next, I'll highlight segment-specific results and initiatives. Looking first at the Fitness segment. Revenue grew 43% on a year-over-year basis with strong contributions from activity trackers and running products. We delivered gross and operating margins of 64% and 32% respectively. While gross margin increased from last year, the operating margin was essentially flat due to investments in advertising leading into the holiday season. Even with these investments, we generated operating income growth of 38% in the quarter. We recognize that competition isn't standing still and neither are we. We continue to innovate and broaden our product portfolio. In the third quarter, we launched vívosmart, an activity tracker that also delivers smart notifications from an iOS or Android smartphone. In addition, we announced the Forerunner 920XT, our next-generation, multi-sport product that incorporates advanced running dynamics and connective features, including smart notifications and line tracking. Finally, we announced the Connect IQ software developers kit. This exciting initiative will allow developers and partners to build apps and customizations that will extend the utility and attractiveness of our devices. We look forward to seeing all the possibilities to be explored through Connect IQ. Turning next to Outdoor. Revenues increased 19% in the quarter with recently launched products in golf, dog tracking and training and wearables contributing to the strong quarter. Gross and operating margins remained strong at 65% and 42% respectively in the segment. Due to the strong performance in the third quarter, we now anticipate Outdoor will generate full year revenue growth in the mid-single digits. In addition, we will continue to explore and innovate in the Outdoor segment to drive long-term growth in our current markets as well as other adjacent categories. In Aviation, we posted revenue growth of 19% with all product categories contributing to the strong performance. Gross and operating margins remained strong at 73% and 29% respectively. Operating income grew 25% in the quarter, ahead of revenue growth, due to gross margin improvement. We have continued to complete certifications that represent market share gains in both the business jet and helicopter markets. Two recent examples are the Cessna CJ3+ with the G3000 system and the Enstrom 480B with the G1000H system. Beyond OEM share gains, we are also pursuing additional aftermarket opportunities. At the NBAA show last week, we announced a new standalone ADS-B solution for the business jet market that significantly reduces the cost and complexity of complying with the FAA NextGen mandate. This solution will be available for popular business jets like the Citation 560, the Beechjet 400A and the Learjet 60, with others to follow. In addition, we announced the availability of a number of avionics enhancements for our existing King Air retrofit certifications. Finally, I'd like to highlight that the photo on this slide shows the G5000 retrofit solutions as installed in our Beechjet 400A. Our flight test program is underway, and we anticipate final certification to be completed in late 2015. Revenue in the Marine segment grew 12% in the quarter, driven by the third quarter acquisition of Fusion. As planned, we delivered higher gross and operating margins in the quarter, which allowed us to generate 32% operating income growth. We continue to focus on product innovation, highlighted by the announcement of our 2015 product lineup, which includes new chartplotters, multifunction displays, radars and autopilots. We believe these products further differentiate us from the competition and should provide the foundation for another year of growth in 2015. In our Auto/Mobile segment, revenues decreased 5% in the quarter as PND industry volumes continued to decline per expectations. Profitability of this segment continues to be strong with operating margins of 17%. In addition, we continue to build market share with NPD reporting our highest-yet U.S. market share for the third quarter at 84%, an improvement from 78% in third quarter of 2013. Recently, we announced our partnership with Honda on their 2015 Civic and CR-V models to be delivered in Europe, Russia and South America. Garmin will be providing integrated navigation software with many of our signature features such as lane guidance, photoReal junction views and predictive routing. This program win highlights the quality and reliability of our industry-leading navigation solutions, which we will continue to leverage as we build market share in the infotainment industry. And finally, with 3/4 of the year behind us, we're revising our full year guidance to reflect our outlook for the remainder of the year. We now anticipate revenue of approximately $2.85 billion, at the high end of prior guidance. In addition, we anticipate strong full year margin performance, with gross and operating margins at 56% and 24% respectively, consistent with prior expectations. Our prior guidance called for a pro forma effective tax rate of 15%, which was based on a number of assumptions, including the extension of the U.S. R&D tax credit. Since this tax credit has not yet been authorized by Congress, we've removed it from our assumptions until there's more clarity around this item. But as a result of all these factors, we're increasing our pro forma EPS guidance to approximately $3.10, representing full year growth in the high teens. These expected strong results in 2014 further validate our strategy of diversification and multipronged growth. Our 2014 results will provide the foundation upon which we can drive continued category expansion and market share gains to ensure long-term growth. So that concludes my remarks. Next, Doug will discuss additional details of our financial results. Doug? Douglas G. Boessen: Thanks, Cliff. Good morning, everyone. I begin by reviewing our financial results and provide summary comments on the balance sheet and cash flow statement. We posted revenue of $706 million for the third quarter. As previously highlighted by Cliff, our revenue represents a 10% increase year-over-year. Gross margin was strong at 56%, a 160 basis-point increase from prior year, driven primarily by favorable segment mix. Operating margin was 25%, an increase of 130 basis points from the prior year. This is a result of the gross margin favorability of 160 basis points, partially offset by operating expense growth of 11% or $22 million. Our pro forma effective tax rate increased to 21%. We'll discuss the tax rate in more detail later. Adjusting for the foreign currency loss, tax impact of intercompany restructuring and tax benefit for the release of material reserves, pro forma EPS was $0.76, which represents a 10% increase year-over-year. We shipped 3.7 million units during the quarter, up 12% from 3.3 million last year. Total company average selling price of $192 per unit, down 2% from $196 third quarter of 2013, driven primarily by fitness product mix. Next, we'll review how our third quarter revenue breaks down by segment. We experienced double-digit growth in 4 of our 5 segments. Looking at the charts on this page, the Auto/Mobile segment represented 44% of our total revenue during third quarter of 2014, down from 49% in the prior year. Fitness grew to 16% of revenue current period compared to 13% in the prior year. These charts illustrate our profitability mix by segment. Our non-Auto/Mobile segments delivered 70% of operating income in the quarter, up from 64% in the prior year quarter. Looking next at year-over-year gross margin. Total company gross margin improved to 56% due to positive segment mix and stable or improving margins in most segments. Total operating margin improved to 25% due to the increased gross margin performance. As previously mentioned, third quarter operating expense increased by $22 million or 11% on a year-over-year basis, while increasing 30 basis points, percent of sales. R&D increased $11 million year-over-year and 30 basis points to 14% of sales. We continue to invest in innovation and grow our engineering workforce with increasing resources focused on compelling new Aviation, Fitness and Outdoor products. Our advertising expense increased $7 million over the prior year quarter, representing 4.7% of sales, a 60 basis-point increase. Additional spending was focused on Fitness and Outdoor to support new product categories. We'll continue to manage advertising cost by segment with a near-term focus on market share growth and wearables. SG&A was up $4 million compared to the prior year quarter, decreasing 60 basis points, percent of sales, to 12.8%. We continue to manage these costs closely to gain operating leverage when possible. Our pro forma effective tax rate for third quarter 2014 was 21% compared to 15.7% in third quarter 2013. Pro forma tax rates exclude tax expense associated with the intercompany restructuring in 2014 and the tax benefit from material release of reserves in both 2013 and 2014. Increased tax rate was primarily driven by unfavorable income mix by tax jurisdiction, expiration of some Taiwan tax incentives and expiration of the U.S. R&D tax credit. We now expect our full year tax rate to be 17% given the anticipated delay in approval of the U.S. R&D tax credit. We ended the quarter with cash and marketable securities of almost $2.8 billion. Accounts receivable decreased sequentially to $470 million, a result of seasonally lower sales in the third quarter. Year-over-year accounts receivable was basically flat, resulting in improvement in day sales outstanding. Our inventory balance increased to $466 million on a sequential basis as we build inventory for the holiday season. We continue to generate strong free cash flow across our business. Excluding a $78 million cash tax payment related to the intercompany restructuring, cash from operations was $220 million and capital expenditures were $18 million, resulting in free cash flow generation of $202 million during the quarter. We also repurchased $79 million of company stock during the third quarter, completing our current repurchase authorization. Our dividend and stock repurchase activity during 2014 will return approximately $600 million of cash to our shareholders. This concludes our formal remarks. Tim, can you please open the line for questions? Thank you.

[Operator Instructions] We'll go first to Andrew Spinola with Wells Fargo. Andrew Spinola - Wells Fargo Securities, LLC, Research Division: I just wanted to start out with a pretty high-level question on the activity band market. Wondering now that you've been in the market for a couple of quarters, is there anything that has changed? Or has your view of this market changed in terms of sizing, opportunity or where it's trending? I'm just -- it's a big delta in your business and I'm just wondering how maybe your thoughts have evolved on the business. Clifton A. Pemble: Yes, Andrew. This is Cliff. I think in terms of where we're at today in the market compared to where we thought we would be at the beginning of the year, we're pleased with where we stand today. We believe that the market has grown a lot over last year. There's still a lot of awareness that's being generated in the market. So it is a nice additional market for us to be involved in, and we do feel good about where we're at today. Andrew Spinola - Wells Fargo Securities, LLC, Research Division: Fair enough. And one follow-up on the Auto margin. I think -- if -- in my model, if I normalize for the deferred revenue impact, it was down a little bit more than I would have thought. I think we've spoken previously about kind of high-teens margins in the PND business and sort of flattening OEM spending and then a ramp of the OEM revenue with contracts like Mercedes. So I'm wondering how you're thinking about that margin. Do you still think that, that can improve over time? And what are the puts and takes that are impacting Q3 here? Clifton A. Pemble: I think it’s the PND volume declines and the mix of PND changes with the overall segment. Definitely, OEM and Mobile will contribute more in terms of their margin profile. In terms of the PND-specific product category, we feel like those margin structures have been relatively stable in the product category and we feel like they're performing as we expected.

And we'll go next to Simona Jankowski with Goldman Sachs. Simona Kiritsov Jankowski - Goldman Sachs Group Inc., Research Division: Also a couple of questions on the Fitness segment. I wanted to just get your thoughts on what drove the decline there sequentially, if that was an end demand function or inventory-related? And also, I wanted to get a little bit of context around the price cuts on the vívofit we saw on Monday. And then just looking forward into Q1, how are you thinking about potential competition from the Apple Watch? And what, if anything, are you doing in terms of interoperability with HealthKit? Clifton A. Pemble: Okay. So quite a few things there. I'll probably start with the seasonality question. It is normal for this market to be seasonal like every other market, and we feel like the sequential drop from Q2 to Q3 was within our expectations. So we don't see anything there that stands out as a difference from what we've seen in the past. In terms of the price cuts, those are normal pricing actions that we have planned around leading up into the holiday season and around our promotional activities. And in terms of next year, we're not in a position to really provide specific guidance. But in terms of where we stand with our product positioning, we feel good about where we stand today, both in terms of what we're offering as well as the product road map that we have.

And we'll go next to Mark Sue with RBC Capital Markets. Mark Sue - RBC Capital Markets, LLC, Research Division: Gentlemen, maybe your thoughts on just how we should think about the subcategories of Fitness and Outdoor over the longer term, considering some parts of the -- some products such as action cameras have not worked. There’s price stimulation going on in some of these Fitness categories. And perhaps, if you can relate your comments on your overall views of price elasticity of demand as we get into the holiday season and how we should balance and consider price declines to drive unit growth in both categories of Outdoor and Fitness. Clifton A. Pemble: Well, in terms of the subcategories of these 2 different segments, every segment has categories of products that have higher- or lower-margin profiles, so we don't really view what's happening in Outdoor in the action camera space as well as Fitness in the tracker space as anything unusual in terms of what we see overall in these segments. I think from an elasticity point of view, and I think you're probably referring specifically to the tracker market, I think the market is very new. And so we, like many others, are learning in terms of what seasonal demands are and what the elasticity will be. We're promoting the category heavily and as a result, we expect that we'll be able to perform well in the fourth quarter with our advertising. Mark Sue - RBC Capital Markets, LLC, Research Division: Okay. That's helpful. And then Doug, maybe a question for you. Recognizing that we're still in the early stages of the transition, is there any preliminary framework in terms of free cash flow returns to shareholders, how we should be thinking about capital structure? Thus far, the company has recommended the return of $600 million in cash every single year. Should that change? Or should that be supplemented in the future? Douglas G. Boessen: Yes. This is Doug. Yes, the way I look at it, it's pretty well consistent with our previous strategy we had. This year, 2014, we'll return about $600 million between dividends and share repurchases to our shareholders. We'll take another look at that in February, looking at our dividend and share repurchase in connection with our guidance for 2015. But I'd say it's pretty consistent with what we've looked at in the past.

And we'll go next to Robert Spingarn with Crédit Suisse. Robert Spingarn - Crédit Suisse AG, Research Division: I wanted to ask you, with the maintenance of your guidance and the trends in the Auto/Mobile market, how should we think about the implied declines in Q4, which are rather strong, obviously against a tough comp? But of course, that's the fourth quarter seasonality as well. So how do we think about the fourth quarter on the Auto side? Clifton A. Pemble: Well, as the markets mature, the seasonality impacts of fourth quarter have been more muted, so we're conservatively counting on a more muted response this year as well. But it's all baked into the overall guidance that we provided. Robert Spingarn - Crédit Suisse AG, Research Division: And because that implication is a double-digit drop, which you really haven't seen, so it sounds like there might be some conservatism there. Clifton A. Pemble: Again, we've treated this market conservatively over the past couple of years, recognizing that it can surprise in terms of overall demand, so -- but we feel like retailers are looking at the category very realistically, and our guidance factors in that realistic view. Robert Spingarn - Crédit Suisse AG, Research Division: Okay. And then just quickly on Marine, if I could ask about the pricing environment, how competitive that remains and what the longer-term trend in margins might be, given where you've been in the -- maybe more of the distant past. Clifton A. Pemble: So Marine pricing is very competitive. There's definitely several players that are promoting quality products at value prices. And some of the markets that we are penetrating, including the inland fishing market is very competitive. So we would expect that the pricing environment is challenging. And as a result, the margin impact is definitely a factor. We would anticipate as we roll out new products on a regular basis that we should be able to bring our margins up incrementally from where they're at. But because of the competitive environment, it may not be to the high levels that we've seen several years ago. Robert Spingarn - Crédit Suisse AG, Research Division: And just a clarification. You mentioned Fusion was a driver of the sales growth there on a year-over-year basis. Was it a full driver? How do we think about Fusion relative to the rest of the business? Clifton A. Pemble: Yes. Fusion was definitely the biggest contributor to that growth. Our other categories, our organic categories, were more flat year-over-year. But the reason for that is that last year, we were doing a lot of sell promotion on some end-of-life products, particularly our 700 series of chartplotters. So as a result of those factors, we were more or less flat year-over-year, but we felt good based on the strong performance we had last year with end-of-life.

And we'll take our next question from James Faucette with Morgan Stanley. James E. Faucette - Morgan Stanley, Research Division: A couple of questions for me. A, first, Cliff, you guys have, over the years, talked about that you'll evaluate your investment in the in-dash and OEM market on kind of a year-to-year basis. And I just wanted to get a sense from you how you're feeling about the penetration that you're gaining and the share wins that you're having there and whether it makes sense to continue the level of investment that you've been putting into that segment? And then my second question is we've seen impact from -- or we've seen strong U.S. dollar over the last quarter, so can you talk a little bit about how you think that's been impacting your demand for products kind of across the different categories and what amount of headwind that might be creating? Clifton A. Pemble: Yes, James. So in terms of Auto OEM, we view this as a long-term investment. We've been pleased with the progress that we've made. So far, the progress is admittedly incremental, but it's a very, very challenging market with a lot of incumbent suppliers. But we still believe that we have value that we bring to the table that automakers are interested in as evidenced by some of our recent wins. So I think as far as what we're doing there, we're still approaching the market with a pragmatic kind of investment and growing it as we go. In terms of the dollar impact, I think the biggest impact there is going to be the potential revenue headwind that occurs with the strengthening dollar. In terms of demand, there's typically some second-order effects that occur as pricing is adjusted over time, but we feel like the most immediate impact will be the revenue impact.

And we'll take our next question from Charlie Anderson with Dougherty & Company. Charles L. Anderson - Dougherty & Company LLC, Research Division: First, on Outdoor. You had a pretty big leap-up in Q3 here, and I think what's implied in the guidance is you'll be somewhat flat in Q4 versus your typically up 20% or so sequentially for the holiday. So should we read into that, that basically you made a lot of the holiday shipments, call it, in Q3 here and you don't have that big follow-through like you normally have in Q4? Clifton A. Pemble: I think one of the bigger impacts that we've had, Charlie, is the release of new products, particularly the S6, and we're also doing very well in the other wearable categories of the market, and dog products are also doing very well. This is hunting season time. So those are things that impacted us in Q3, and we would anticipate Q4 is a little more consistent with last year in terms of overall revenue levels because that seasonality is winding down. Charles L. Anderson - Dougherty & Company LLC, Research Division: And then a question on the comment that you made in the release about adjacencies, and I think it was specific to Outdoor. Should we think about that as sort of incremental beyond just refreshing the VIRB? And you're looking now at categories where there are sort of well-established players like you've done recently, call it, with the VIRB and the vívofit. Or were you looking at some sort of, call it, brand new categories where you'd almost invent a new type of a device? Clifton A. Pemble: Well, we don't have specifics, but I would say that our profile is that we always are looking for adjacent categories in each of these segments to help grow them incrementally.

And we'll take our next question from Rich Valera with Needham & Company. Richard Valera - Needham & Company, LLC, Research Division: Cliff, question on the overall growth rate or rate of decline of the PND market. It seems the market rate of decline has been slowing. I just wondered if you would care to say what you think that market might do as we move into next year and beyond, if that rate of decline might bottom and actually, if that market could flatten. So if you could answer that one, first. And I have a follow-up. Clifton A. Pemble: Yes. So we don't have projections yet formulated for 2015. We're really looking at how Q4 performs to really put all of our views together there. I would say, though, that you're right in terms of where we are today versus last year and the years before, that we do see some moderation in the bigger markets. Particularly, the Europe market has been flatter. Some countries are doing very well, in fact, even show some value-oriented growth in the market, whereas other countries are not doing as well, but on balance, it has moderated a lot. In the U.S. market, there's definitely been some moderation from our more conservative views. But still, it's decelerating at a rate that's faster than what Europe is. Richard Valera - Needham & Company, LLC, Research Division: And I'm curious, how do you think about the -- perhaps the balance between your share gains, which I guess at 85%, I'm wondering how much further -- how much more share you think you can get versus the moderating market? Do you think at some point those balance out? Or how do you see those 2 kind of conflicting dynamics of you maybe not being able to gain as much share, but the market, sort of stabilizing? Clifton A. Pemble: Yes. Obviously, there's not as much runway from 85% to 100% as what there was from 50% to 85%, but we feel like we're in a very strong position in the market. We feel like a lot of the smaller players have kind of exited the U.S. market. So that leaves us in a strong position there. And in Europe, we have increasing gains there and we're in the kind of the mid-30s range in terms of market share and growing, so we see some offsetting effect there. Richard Valera - Needham & Company, LLC, Research Division: Great. Just one on tax rate. Not sure if you're willing to comment on that, but any thoughts at this point on tax rate for next year? Or is that just too early? Douglas G. Boessen: It is too early for us. We'll be giving that guidance to you in February.

And we'll take our next question from John Bright with Avondale Partners. John F. Bright - Avondale Partners, LLC, Research Division: Could you give us an update on the action camera market, more specifically, your inventory levels as of today as well as maybe any ballpark timing of new products in '15? Clifton A. Pemble: Yes. So the action camera market, as we updated you in Q2, it's been a market for us that's new revenue, new opportunity. Obviously, I think our views at the beginning of the year in terms of our potential for success were higher than where we've ended up today, but it's still a category where we feel like we have differentiators and thus, we're continuing to invest at a pragmatic rate to be able to develop new products and continue to grow share in the market. In terms of inventory, we feel like that situation is manageable at this point. It's again a product category that's not huge compared to PND. So consequently, I think all of that’s manageable. In terms of new products, we're constantly working on our product road maps. We don't have anything specific that we would share at this time in terms of action cameras, but we are continuing to invest. John F. Bright - Avondale Partners, LLC, Research Division: Cliff, second question is around Auto OEM. The Honda win, I think you mentioned on the call, was software-only. What were the hurdles that you overcame for that win? And is this giving you any momentum in that marketplace? Clifton A. Pemble: Well, I think in terms of hurdles, company -- any auto company, but particularly one like Honda, is very particular about their suppliers, and they're looking for quality and stability and value in what they're offering their customers. And so we were able to meet those objectives that they were looking for and we feel like it speaks to the overall quality of our solutions and our reputation in the industry. John F. Bright - Avondale Partners, LLC, Research Division: As far as momentum? Clifton A. Pemble: I think momentum, it always helps when you're collecting a large number of very prestigious brands that you're serving. So in our case, we're also on Daimler. We work with BMW, now Honda. So we feel very good about the customer list that we have in addition to the ones that we've had for a while now like Chrysler.

And we'll take our next question from Jeremy David with Citigroup. Jeremy David - Citigroup Inc, Research Division: A couple of questions on fitness. Fitness revenue missed consensus numbers in Q3. I don't think you're changing your view for the year. You're still guiding to 50%, 55% year-over-year growth. But should we infer that, well, maybe the 3 was just too bullish in Q3 and there's going to be more of a hockey stick in Q4? Or has your views changed a little bit maybe of the margin on that guidance for the year you've given a quarter ago? Clifton A. Pemble: Yes, I think normally, as I mentioned before, the market is seasonal. So people are winding down some of their purchasing that goes on in the spring and early summertime. So Q3 is seasonal, and it does not surprise us what we saw in terms of the overall quarter. I would remind you in terms of Q4 and our outlook there, we're factoring in the impacts of last year's successful launch of the Forerunner 620 and 220. And so there are some year-over-year comparisons that are stronger there. Jeremy David - Citigroup Inc, Research Division: Okay. And I -- you talked a little bit about that Fitness band category. But I think given numbers on the Q2 call around the size of the category and your market share, I think, at the time, you said you think the category is about 10 million units and that you've reached a 10% market share in Q2. What's your thinking now exiting Q3 around the category size on your market share? Clifton A. Pemble: We feel like there's really no change in terms of our outlook on the category size in terms of our market share. We do see positive indications that our share is increasing somewhere in the mid-teens range. Jeremy David - Citigroup Inc, Research Division: Okay. And finally on the Connect IQ initiative you've announced, it looks like you're going to develop your own ecosystem just like what Pebble did with their watch. What led you down that path? Are you looking potentially to participate in a bigger ecosystem like Android Wear? How should we think about emerging wearable ecosystems like Android Wear? For you is that an opportunity not a threat? Any commentary on that will be helpful. Clifton A. Pemble: I think Connect IQ is in response to a lot of requests that we get from customers and partners who want a way to be able to expand the utility of our wearable devices but don't currently have a way to do that. So Connect IQ provides that opportunity for people to be able to expand the utility beyond just what we offer in our markets. In terms of how we're positioning that, we're not putting that up against the big open players that are out there. That's not our objective at all. But we do feel like there's a strong desire for people to be able to customize their watches and to be able to expand the utility.

And we'll take our next question from Brad Erickson with Pacific Crest Securities. Brad Erickson - Pacific Crest Securities, Inc., Research Division: First, on Aviation. Understanding that you have some new products sounds like to continue helping to drive growth. Can you kind of provide an update just how you're feeling about that market as a whole here as we look out over the next few quarters? Clifton A. Pemble: Yes, I think in terms of our outlook, we're really only providing consolidated guidance for 2014, but Aviation is a market where it's a very long investment cycle, and we continue to invest in the market in order to be able to bring new opportunities and revenue and growth in the future. But at the moment, we feel like we're positioned well and we feel like the momentum is good. Brad Erickson - Pacific Crest Securities, Inc., Research Division: Got it. And then just on the Fitness business. You've obviously talked this year about spending in the second half to kind of improve positioning, both in terms of marketing, promotion, et cetera, as well as a point-of-sale. Can you kind of give an update as to how that's going and how far along you are in that process at this point? Clifton A. Pemble: Well, we've been running some TV campaigns here in the U.S. and we'll start in Europe as well. So that's driving some additional investments there. We've been focused for the year on improving our point-of-sale, and that has also increased some of our marketing expenses. We feel like we're positioned well at this point and there's more work to do as we go into 2015, but a lot of improvement so far in 2014.

We'll take our next question from Jonathan Ho with William Blair. Jonathan Ho - William Blair & Company L.L.C., Research Division: I just wanted to get a little bit of thought around sort of the Aviation business and maybe your thoughts around how sustainable the growth rates are in that business, just given sort of the general macro environment and the new platforms that you're adding on. Clifton A. Pemble: Okay. Again, I think our outlook at this point is good for the near term. As I mentioned in the previous question, we continue to invest in opportunities that will lead to long-term sustained growth. In terms of the industry, we feel like there's some signs of incremental growth off of the lows that we've been seeing. Some aircraft categories are actually recovered and doing very well. Others are still very depressed, but they're at least off of their loads. So we feel like right now the overall environment is better than it has been. Jonathan Ho - William Blair & Company L.L.C., Research Division: Got it. And then can you just give us maybe a sense of how the retailers are thinking about the wearable space as you start to go into the fourth quarter? Maybe the amounts of promotion activity or advertising spending support that you have to provide. And just maybe a general sense of how they're viewing the category relative to your expectations? Clifton A. Pemble: Yes, I think they're positive about the category. They see it as an opportunity for growth. It's really in line with the expectations that we’ve had. Many retailers are investing in more floor space and advertising in the category. So at this point, I would say that their reaction and their response to this is what we expected.

And we'll take our next question from Tavis McCourt with Raymond James. Tavis C. McCourt - Raymond James & Associates, Inc., Research Division: First, on kind of the big-picture fourth quarter revenue guide. You put up kind of 10% to 12% top line growth the first 3 quarters of the year. I think the guidance implies about 5% for the fourth quarter. And I understand relative -- or typical conservatism, but I wonder if you could quantify to what degree, if any, currency or a lower contribution from deferred revenues has an impact on the fourth quarter. And then secondly, on deferred revenues, it looks like the balance sheet deferred revenues are down about 90 -- or will be down about $90 million or so for the full year. Is that a reasonable run rate that we should expect going forward in terms of the decline of deferred revenues in the balance sheet? Or is it still too difficult to predict? Douglas G. Boessen: Yes. This is Doug. Regarding -- first of all, I’ll talk about deferred revenue here in the third quarter. That gave us a benefit of about $0.06 in the third quarter. Looking at the fourth quarter, we would expect a benefit of about $0.05 on EPS there. And then looking at toward the future into 2015, what we'll do there is probably have a little bit of headwind in there. We won't expect as much of a contribution in 2015 as we would have in '14. And all of the forecast we have given you does impact -- does consider all the currency changes we do have. Tavis C. McCourt - Raymond James & Associates, Inc., Research Division: That's very helpful. And a follow-up, Cliff. On the Auto OEM business, when you're winning kind of these software module deals, what is the design cycle for that? In other words, when you announced the Honda win for the 2015 product line in Europe, when was that award actually won? Is this as long cycle as the hardware side of the infotainment business? Or can you win deals reasonably quickly when selling the turn-by-turn nav app only? Clifton A. Pemble: Yes. There's probably a mix of scenarios there. In some cases, it's been a shorter cycle in terms of award to market. In other cases, it can be a very long cycle depending on how much new design work is going on in the hardware side of the equation. Remember, our software has to run and be involved in an overall system. And so consequently, there can be a lot of factors that impact the time-to-market.

And we'll take our next question from Will Power with Robert Baird. William V. Power - Robert W. Baird & Co. Incorporated, Research Division: I guess a couple of questions. First, on the Fitness band market and distribution. Maybe you can update us as to where vívofit is in terms of distribution? Is it in all the channels that you'd like it to be in? And really a similar question for vívosmart. I know you started with the Best Buy exclusive. Is that -- where does that now stand in terms of reaching all those channels? Clifton A. Pemble: Yes. In terms of vívofit, we feel good about where we're at with the channels. I think we're in pretty much every channel that we would expect to be in at this point. And there's new channels that are being opened up for this category that wouldn't otherwise be carrying an electronic product in more of our traditional markets. So there's some expansion that goes on there. In terms of vívosmart, it does just roll off of exclusivity now. So it's expanding to new channels, and that's happening at a good rate. I think there's been a good response to the product, and so there's a lot of retailers that want to carry it around the globe. William V. Power - Robert W. Baird & Co. Incorporated, Research Division: Okay. And do you think you'll be able to get that into most channels through the quarter here or by the end of the quarter? Clifton A. Pemble: Yes. It's rolling out now. I think really it's going to be limited more by product quantity availability than it is by channel. William V. Power - Robert W. Baird & Co. Incorporated, Research Division: Okay. And then maybe a bigger-picture question. As you head into 2015, you've got new competition from Fitbit. Apple, this is on the watch side of the equation. I wonder if you could just kind of characterize how you think about the competitive climate there. And then one of things a lot of the new competitors there are doing is enabling wrist-based heart monitoring. I know I think traditionally, you all kind of prefer the chest wrap. That's more accurate. I wonder how your thinking there is evolving just as the competitive climate there changes and whether that's something important to get in the portfolio. Clifton A. Pemble: It is no question this category is drawing a lot of interest from people. It's a category that we really pioneered and innovated in over the years. So there's many new players getting into that, and we would expect many more that aren't necessarily visible at this moment. In terms of our product road map and aligning that with what's available and announced to be available from competition, we feel good about our positioning. And in terms of specific features like the wrist-based heart rate, that’s definitely a new innovation, which is maturing in terms of its technical capabilities. We definitely see differences in terms of accuracy for certain kinds of athletes who are interested in that. But we also see opportunity where the technology is maturing and is something that we will be offering in our product lines as well.

And we'll take our next question from Ron Epstein with Bank of America. Kristine T. Liwag - BofA Merrill Lynch, Research Division: It's actually Kristine Liwag calling in for Ron. For the Aviation business, you saw a 19% growth in the quarter. Is there any way you could parse out how much of that growth is from share gains and new program ramp-ups in business Aviation versus cyclical recovery in your legacy general Aviation business? Clifton A. Pemble: We have not typically broken it out. I would say though that some of the trends that I mentioned earlier in the OEM market are carrying over to the retrofit market where we're seeing retrofit equipment demand increasing as people are getting back to flying, they're updating their aircraft, they're getting ready for things like the NextGen mandate. So we feel good about what's happening in the industry across the board. Kristine T. Liwag - BofA Merrill Lynch, Research Division: Great. And I have a follow-on on the Auto OEM side of the business. Can you quantify the number of active campaigns you're currently pursuing and your win rate? And then for the contracts that you have not won, what are the key recurring themes you're hearing from your customers? Clifton A. Pemble: Yes, we've not ever broken out our sales funnel, so I probably won't comment on the dynamics of that.

And at this time, there are no other questions in queue. I'll turn it back to Kerri Thurston for any closing remarks.

Thank you, all, for joining us today. Doug and I will look forward to following up with many of you after this call and over the next few weeks as we launch some travel. And most importantly, based here in Kansas City, we wouldn't want to leave this call without saying, go Royals. Thanks, everyone. Bye-bye.

And that concludes today's conference call. We appreciate your participation.