Activision Blizzard, Inc.
Q4 2015 Earnings Call Transcript

Published: 12 Feb 2016

[Operator:]

Good day, and welcome to the Activision Blizzard Fourth Quarter 2015 Earnings 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 Amrita Ahuja. Please go ahead.

[Amrita Ahuja:]

Good afternoon and thank you for joining us today for Activision Blizzard's fourth quarter 2015 conference call. Speaking on the call today will be Bobby Kotick, CEO of Activision Blizzard; Thomas Tippl, COO of Activision Blizzard; Dennis Durkin, CFO of Activison Blizzard; Eric Hirshberg, CEO of Activision; and Mike Morhaime, CEO of 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 factor section of our SEC filings, including our 2015 Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q, which are on file with the SEC, and those indicated on the slide that is showing. The forward-looking statements in this presentation are based on information available to the company as of the date of this presentation, including information provided to the company by King Digital Entertainment and our preliminary assessment on the impact to our financial information of purchase price accounting, and while we believe them to be true, they may ultimately prove to be incorrect. The company undertakes no obligation to release publically any revisions to any forward-looking statements to reflect events or circumstances after today, February 11, 2016. Unless otherwise indicated, our speakers will be referencing non-GAAP measures which include 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 acquisitions, including the acquisition of King Digital Entertainment, the related debt financings and the associated tax benefit. 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'll also be posting a financial overview, highlighting both GAAP and non-GAAP results in a one page summary sheet. And now, I'd like to introduce our CEO, Bobby Kotick.

[Robert A. Kotick:]

Thank you, Amrita, and thank you all for joining us this afternoon. This month, Mike Morhaime and I are celebrating our 25th anniversaries with the company, and I wanted to take this opportunity to thank Mike and the incredibly talented team at Blizzard for 25 years of creating some of the world's most inspired, enduring and entertaining franchises. They have one of the best track records of any game company in the creation of franchises, and this year with Overwatch, Blizzard will launch its first entirely new franchise in 17 years. From the reaction so far, Overwatch is on track to become a fantastic success. Mike, thank you for 25 extraordinary years, and I'm looking forward to many more together. We ended our 2015, our 25th year, with $4.6 billion of revenues, $1.5 billion of operating income and $1.2 billion of operating cash flow. Upon the expected close of our acquisition of King later this month, we'll have over a 0.5 billion monthly active users in 196 countries, which as an entertainment network, ranks only behind Facebook, YouTube and WeChat in monthly active users. We'll have seven times the audience members of Netflix and have a larger audience than Snapchat and Twitter combined. We'll be the world's leading standalone interactive entertainment company and we expect 2016 to be a record year for the company, with $6.25 billion of revenues and more than $2 billion of operating income. In the past 25 years, based on yesterday's stock price, our compound rate of return was over 1,000% and we outperformed the S&P 500 by almost 300%. In our Annual Report last year, we shared our plans to enhance engagements in our franchises and celebrate our players through initiatives like esports. And we're really beginning to better realize these plans. Last year, our Activision Blizzard games were played for over 14 billion hours and spectators watched over 1.5 billion hours of video content based on our games. In the 2014-2015 season, fans of the NFL watched about 7 billion hours of nationally-televised games, which is less than half the time spent engaged with our franchises. Those televised games generated approximately $7 billion of broadcast rights fees for the NFL and another $4 billion in other revenues including sponsorships, merchandise and ticket sales. When we think about our franchises, we view our responsibilities to our fans and the associated business opportunity through the lens of these leagues like the NFL, the Premier League, the NBA, Major League Baseball or NHL. Our franchises today generate revenues principally from the sale of interactive content but not meaningful revenues from tournament play, advertising, broadcasting and pay-per-view, licensing or merchandising, all of which are great future financial opportunities we are pursuing. We think competitive gaming and the spectator opportunities connected to organized gaming competitions could provide sizeable opportunities for shareholders and great rewards and recognition for our hundreds of millions of players. We continue to believe that esports is another long-term growth pillar for the company, and our recent acquisition of Major League Gaming has accelerated our strategic plans. esports helps fuel one of the underlying drivers of our strong financial performance, which is a deepening engagement with our fans. As I begin my 25th year at the company, I couldn't be more excited about the many, many opportunities we see ahead. Prioritization of opportunity remains a great challenge but our well-defined strategy and focused execution have enabled us to make great content, satisfy large audiences and generate superior shareholder returns for 25 years. Our talented teams around the world are committed to our future success, and for their effort and commitment to excellence, we are very grateful. Now, Thomas will discuss the key drivers of our overall performance, Dennis will review our financial results and 2016 outlook in detail and Mike and Eric will discuss the results of their respective operating units. Thomas?

[Thomas Tippl:]

Thank you, Bobby, and good afternoon, everyone. Activision Blizzard had another successful year in 2015. We achieved record digital revenues up 20% year-over-year, and for the first time in 2015, our digital revenues were larger than our retail revenues. At constant currency, we achieved 4% revenue growth and 13% EPS growth above 2014's record levels. These results are driven by our strategic focus and execution on growing our audiences, deepening engagement and providing opportunities for more player investment. Let's briefly go through each of these key business drivers. First, we broadened our audience reach with successful new content launches and expanded onto new platforms and geographies. In the fourth quarter, our monthly active users grew to our highest level ever at over 80 million users. For the full year, MAUs grew 25% over 2014. And in key markets like China where we launched three new games in 2015, our revenue growth accelerated to 87% year-over-year, faster than ever before. Second, we drove deeper engagement by providing outstanding game play and frequent content updates. Players spent 3.5 billion hours playing our games in the fourth quarter alone. For the full year, engagement was up 16% to a record 14 billion hours, and this doesn't include rapidly growing hours spent spectating which we estimate for Activision Blizzard alone is now 1.5 billion hours. Third, we progressed in something that is very hard to do, but is critical for our business. We shifted to a year-round player investment model, while growing engagement at the same time. And as a result, we grew our revenues from in-game content and services to over $1.6 billion. That's up 57% year-over-year at constant FX. When executed well, increased player investment and deeper engagement are not a tradeoff but instead can reinforce each other, and we are pleased that our results are proving out this important element of our business strategy. As we look ahead to 2016, in our core business, we expect continued growth from these strategic initiatives against a backdrop of an increasing installed base of devices capable of delivering games around the world. We will continue to see the shift towards a digital distribution network, and most importantly, we will deliver another year of the very best interactive entertainment in the world. In addition to the organic progress we made in 2015, we also created opportunities for growth ahead through new corporate initiatives focused on the fastest-growing parts of our industry. Let's start with King, which we expect to add to our portfolio later this month. King operates in the large and rapidly growing mobile segment with a world-class management team, exceptional game development talent, and great commercial instincts. In addition to being significantly accretive this year, we expect the transaction will solidify Activision Blizzard's position as a world leader in interactive entertainment, positioning the combined company for growth across platforms, audiences, geographies and business models. Second, our recent acquisition of Major League Gaming will accelerate our opportunities in esports. Major League Gaming provides us with a superb streaming platform, league management expertise with MLG Pro Circuit and online competition and prize play through the GameBattles platform. We believe our investments in esports fit perfectly with our strategy to deepen audience engagement by celebrating our players, delivering high production values to our communities and providing greater opportunities for player investment. By the end of February, we'll have one of the largest entertainment networks in the world with over 0.5 billion monthly active users in some of the strongest franchises in all of entertainment with meaningful new long-term growth opportunities for future value creation. We couldn't be more excited to welcome the incredibly talented teams at King and MLG into the Activision Blizzard family. So now, I'll hand it over to Dennis who will take you through our results in detail.

[Dennis M. Durkin:]

Thanks, Thomas. Good afternoon, everyone. Today I will review our Q4 and full year 2015 financial results, and then I will review our outlook for 2016. Twelve months ago, our original non-GAAP outlook included revenues of $4.4 billion, 30% operating margin, and EPS of $1.15. Today we are announcing that we delivered revenues of $4.62 billion, a 32% operating margin, and EPS of $1.32; once again exceeding our initial guidance, this year by $221 million on revenues and by $0.17 on EPS. Importantly, digital revenues achieved a quarterly record in Q4, and for the year, grew 20% or 29% at constant FX versus last year to an all-time annual record of $2.63 billion. This represented a 57% share of our total revenues, up from 46% last year. This strong growth in digital revenue was driven by new and emerging high-margin opportunities including in-game content and services, which grew 57% at constant FX. These in-game content and services now account for about a third of our total revenues. In addition, console full-game downloads grew 56% year-over-year or at 65% at constant FX. From a capital perspective, we delivered more than $1 billion of operating cash flow for the sixth year out of the past seven years. Further, we strengthened our balance sheet and we were upgraded to investment-grade by Moody's. We paid a record dividend to shareholders, repaid $250 million of our debt and continued to invest in a strong pipeline of new opportunities with high margin potential and announced agreements to acquire King Digital and Major League Gaming. So, it was a busy year on many fronts for the company. Now, let's take a moment to review our operational performance for 2015. Activision grew in 2015 on its path to becoming an increasingly digital business with digital revenues up nearly 70% this year, driven by strong growth from full-game digital downloads and in-game content and services. We still have considerable opportunity in digital because even with this strong growth, less than 50% of Activision revenues were digital last year. In Q4, Call of Duty

[Eric Hirshberg:]

Thanks, Dennis. 2015 was an important growth year for Activision. Our digital revenues grew by 68% year-over-year. At constant currency our total revenues grew 7% and our operating income grew 30% year-over-year with more than 600 basis points of margin expansion. We're providing great year-round content that our fans love and as a result our monthly active users were up 20% in 2015 year-over-year with a double-digit increase in Q4 as well, reaching our highest level ever. We grew our leadership on next-gen and we now have four of the top 10 titles on PS4 and Xbox One live to date, including the number-one spot with Call of Duty

[Michael Morhaime:]

Thank you, Eric. 2015 was another strong year for Blizzard. We achieved an all-time high in active players and ended Q4 up nearly 25% in average MAUs year-over-year. On a constant currency basis we achieved even higher revenues in 2015 than 2014, which was a record year for us. These results reflect our careful and long held approach to growing our community and deepening their engagement with high-quality content. In 2015 we expanded to new platforms and new regions, bringing our games to more players than ever before. In addition, we broke new ground with the first live telecast of a collegiate esports tournament on ESPN. And our ninth BlizzCon highlighted the amount of diversity and diversity of upcoming content in our pipeline. BlizzCon also showed the strong connection we have with our global community. More than 25,000 Blizzard gamers attended the show from all 50 states and nearly 60 countries. We had our highest live stream viewership ever with over 10 million people around the world tuning in, and we had record audience on pay-per-view as well. Our specific franchise highlights further demonstrate the value we see in delivering and supporting high-quality game experiences globally. Hearthstone had a great quarter and a great year. For those who might not be familiar with Hearthstone, it's our free-to-play collectable card game on PC, Mac, tablet and mobile. It has very strong global appeal and it brought Blizzard to a new genre on new platforms with a new business model. Ahead of BlizzCon, Hearthstone surpassed 40 million registered players and it closed out December with record global engagement in multiple categories including MAUs. The introduction of Hearthstone on mobile last year was a big contributor to that. We announced our new adventure, The League of Explorers at BlizzCon and launched it the following week. League of Explorers brings new cards, new game mechanics and a lot of personality. Despite the shorter window to launch and no presales as we'd had with our previous adventure, League of Explorers sold over 20% more units as of six weeks post launch. We also expanded Hearthstone into a new region. In October we released the Japanese version providing easier access for new and existing Japanese players. Moving onto World of Warcraft, we saw quarter-over-quarter growth in Q4 as we kicked off presales at BlizzCon for our new expansion, Legion, which is coming out in the summer, and we released a new content patch. With Legion we're taking care to build off the best aspects of Warlords of Draenor to create an experience that appeals to an even wider audience and which offers more opportunities for sustained engagement. Legion adds a new hero class, customizable weapons, class order hauls, which strengthen the social elements of the game and more. This will give players more compelling options for extending their experience. With this expansion we are again offering a character level boost immediately with pre-purchase. And for the first time, we're also offering early access to the new character class, which will be activated for everyone who pre-purchases the expansion once it's ready. Before I move on, I want to thank our community for the generosity they showed with the World of Warcraft charity pet that we offered on behalf of Make-A-Wish. With our player support we achieved a new record for the donation we'll be making to Make-A-Wish, over $1.7 million. That reflects the passion and power of a very strong and very engaged community. Next, Overwatch, our new IP, which will be a big step into a new genre for us as well as our first simultaneous release across multiple platforms. As with other Blizzard franchises, we have long-term plans to support this new IP with more content and also with external world-building efforts and a robust esports program. Overwatch made a lot of news in the quarter and continued to build momentum. We announced the remainder of the 21 hero launch lineup at BlizzCon and revealed the console versions of the game. We also began closed beta testing reaching top-viewed status on Twitch. In addition, we shared our plans to patch in more heroes after launch, which received a very positive response. We are excited about Overwatch's potential and we look forward to sharing more details as we get closer to its spring release. One of our big highlights for the quarter was the launch of StarCraft II

[Amrita Ahuja:]

Operator, we're ready for some questions.

[Operator:]

Thank you. And we'll first go to Doug Creutz from Cowen and Company.

[Douglas L. Creutz:]

Hey. Thanks. Just on King just briefly, you can confirm that I can do math. With a $1.75 guide and 30% accretion, it sounds like you're expecting $1.35 from the existing business and $0.40 from King. And then the longer question is with King, most of King's peers advertise in their games and King does not. And I know King had some reasons why they made that decision, but I'm just wondering if you look at that, do you think that's a significant opportunity for King going forward? Thank you.

[Thomas Tippl:]

Hey, Doug. So the way we think about advertising, we think of it as a proven part of large network entertainment businesses like Facebook, YouTube and even Twitch. And therefore we believe it could also be a huge opportunity for the network that we're building, particularly the parts that are accessible for free. Now all that said, we have and always will prioritize a great user experience above all else, and therefore this is an opportunity that we will approach with great care and is also the reason why none of it is factored into the plan and the numbers that we just shared with you today. But when you think about the future, we think there's a significant opportunity and with that significant option value there.

[Douglas L. Creutz:]

Great. And then just the question about guidance?

[Dennis M. Durkin:]

Yes, Doug, it's Dennis. On that, due to the ongoing King transaction and the Irish regulatory restrictions until we get that approval, we're actually not able to unpack the specifics of the pieces. So we'll have to cover that as we get into our next quarterly call.

[Douglas L. Creutz:]

Okay, fair enough.

[Operator:]

And we'll now move to Brian Pitz from Jefferies.

[Brian J. Pitz:]

Thanks for the question. A question on Destiny. Lots of change obviously going on at Bungie right now. Maybe you could comment on what it all means? And then any commentary maybe on micro transaction plans for the driving of ongoing engagement? Thanks so much.

[Eric Hirshberg:]

Sure. Thanks, Brian. So, first of all, it's important for us to keep it in context and acknowledge that we have incredible success on our hands with Destiny that we've created with Bungie, the partnership between Activision and Bungie has proven to be a potent one and we don't see that changing. I think Bungie's proven themselves to be a capable team over many years and many games and combinations of leadership. So while the decisions that they made recently related to their organization are up to them, we're confident that our interests remain 100% aligned and that we're going to continue together to deliver amazing content for our shared fans. On the second part of your question, Destiny is one of the most engaging games of all time and our first job is to make sure that it stays that way. So all the content that we're providing is designed to make sure that we not only capitalize on that engagement, but also continue to make the game better and better for our fans, and that's why we're planning on delivering a large expansion this year and more incremental content along the way to keep fans engaged. And of course we're looking forward to Destiny 2 in 2017.

[Brian J. Pitz:]

Great. Thanks.

[Operator:]

And we'll now go to Neil Doshi from Mizuho.

[Neil A. Doshi:]

Great. Thanks, guys. Mike, can you maybe help us think about the units built into the guide for Overwatch? I know you guys don't really guide to units, but maybe help us think about other games in the past as a potential comp and how we should be thinking about Overwatch's contribution? And then what drove the solid growth in China revenue, and how much of that came from Call of Duty in China? Thanks.

[Michael Morhaime:]

So you're right, we don't typically provide sales guidance. But what I can say is we're extremely excited about Overwatch. It's an important step for us into a new genre that we think has a ton of potential. We have seen a very positive response from players, over 8 million players have signed up for the beta test. Since beta we have been very happy with viewership interest on Twitch. Overwatch is every bit a Blizzard game in terms of I think it exemplifies the design values that we have. It's a ton of fun, it's excellent gameplay, art style, interface. And so I think we're bringing a Blizzard take to an already very fun genre. We're looking forward to launching on PC and consoles on a simultaneous launch this spring. And like other Blizzard franchises, we have long-term plans to support Overwatch through ongoing content, world-building efforts outside of the game to build the franchise, the IP and a robust esports program. So we have a lot of reasons to be very optimistic that Overwatch will be an important long-term addition to our collection of franchises.

[Dennis M. Durkin:]

Right. And then to the second – I guess maybe the first part of your question about China and sort of how China revenues have moved. A lot of the growth came over the course of the year by having – we obviously have more games in in-market than we've had in the past. But it was really broad-based performance across the portfolio. Diablo obviously had a very strong year, Hearthstone as well caught online, and the rest of the portfolio. So it was really the breadth of the portfolio, but it was really broad-based performance across the portfolio.

[Neil A. Doshi:]

Thanks, Mike. Thanks, Dennis.

[Operator:]

And we'll now go to Arvind Bhatia from Sterne Agee.

[Arvind Bhatia:]

Good. Thanks for taking my question. I was wondering if just going back to the Call of Duty online China question, just how that's been trending throughout the year and as you exit 2015, now that you've had a little bit of time to see it ramp up, how is it performing relative to what you might have expected? And does your 2016 guidance contemplate meaningful contribution from that? Thank you.

[Eric Hirshberg:]

Thanks, Arvind. The game has been growing revenues month-over-month for the last six months in a row and we believe that the updates we have planned for 2016 will further improve the game play and the performance. The updates to come this year are going include enhancements to the user interface, to onboarding, the addition of supply drops inspired by the success we've seen with that in our western products, esports features and social systems that will make our communities' engagement even stronger and additional modes and maps and characters as well. We also continue to work closely with Tencent to bring more people into the game, which is critical. So we remain optimistic about the game's opportunities and as we said when we launched the game into beta, it will take time to build the ramp.

[Dennis M. Durkin:]

Relative to the second part of your question what's in the guidance, we have a very prudent I'd say ramp forward even though we have great aspirations for the opportunity that we have inside the game.

[Arvind Bhatia:]

Okay. Thank you.

[Eric Hirshberg:]

Thanks.

[Operator:]

And our next question comes from Colin Sebastian from Robert W. Baird.

[Colin A. Sebastian:]

Great. Thanks. Hoping you could add a little detail on the investment required to support both esports as well as the broader multimedia initiatives? And more specifically, how much upfront and ongoing investment or risk do you take on versus the media partners? And then secondly, obviously you mentioned competition intensifying with some of the casual games, but just to confirm is there any macro related pressure either we're seeing through price discounting or sell through that you can identify? Thank you.

[Robert A. Kotick:]

So I'll take the first one, Colin. So as we said there isn't a significant investment in the esports individual operating unit initiative or in the other broader media areas. But what we step back and look at is ESPN. And when you look at ESPN with 80 million subscribers and you see the flight of some of the subscribers, and the opportunities that we see there is roughly $5 billion of operating profit there, $4 billion of league payments for the broadcast rights, and we have 80 million of our own players. And over a long period of time we think that watching a video game competition is going to be a tremendous opportunity. It doesn't require a very big investment today, it just requires us to have and in fact most of the efforts we have are funded by things like organized competition ticket fees, but when you look at what the opportunity is for the future to enhance engagement, to build and strengthen our franchises, to celebrate our players, to provide rewards and recognition for our players; these initiatives are really important for the building of engagement and enhancing the value of our franchises.

[Robert A. Kotick:]

And I guess just to build on that from the investment side, all of our investments start with great people, we now have great leaders in those businesses to prudently invest behind, but as we always are, we're being very choiceful in how we invest and disciplined about the gated investments in those areas. This year it's really less than a couple pennies of investment that will go into our new divisions from an overall company EPS perspective. And most of that is against the media networks which is our esports division that Bobby was referencing there. We do have additional esports investments in some of our business and franchise level details like Mike and Eric alluded to, but we think those are more around demand generation than anything and help support the franchises that they cover. On your other question, Colin, around macro environment and sort of competitive aspects, it is, yeah, you hit on the obviously Skylanders and Guitar Hero points where in the casual segment on console there was more competition, that feels more category specific. When we look more across the broad base of our business, we feel we haven't really felt many of the macro trends that are sort of – and volatility we've seen in the overall market really affecting our business. And in fact, many of the digital trends when you look at our biggest franchises are stronger than ever. And in fact, in many new regions, even regions that are experiencing some turmoil like China, we've had great growth in the past year. So for us, it's more about delivering great content on cadence that will be the most important thing for us.

[Colin A. Sebastian:]

All right. Thanks, guys.

[Robert A. Kotick:]

Thanks, Colin.

[Operator:]

And we'll now go to Eric Handler from MKM Partners.

[Eric O. Handler:]

Yes. Thanks for taking my question. Interested – what do you think is going to be the planned cadence of releases for Hearthstone this year? And maybe how should we think about the key drivers of growth there in terms of users, specifically like what markets are showing the best growth, and is there still growth drivers among the digital platforms? And also, when you think about higher spending per user, what's going to be the key driver of that?

[Michael Morhaime:]

Okay. Regarding cadence, we definitely have plans for some great new content this year, but we're not quite ready to discuss the timing. I can confirm that our next expansion will be out in the spring. As for growth drivers, we've consistently seen strong engagement pretty much universally globally, and we plan to continue supporting that with new content for the foreseeable future. Bringing Hearthstone to mobile last year drove a lot of growth, as did releasing a good amount of new content. We also plan to support the community around social events for the game such as fireside gatherings and high-profile esports experiences. This also drives engagement. In addition, we'll be looking at geographical expansion opportunities like we did last year with Japan. In general, spending does increase around new content, so we're focusing on providing great experiences with new content and making careful design decisions to make sure we protect the long-term health of the game.

[Eric O. Handler:]

Great. Thanks, Mike.

[Operator:]

And our last question will come from Chris Merwin from Barclays.

[Chris Merwin:]

Great. Thank you. I just had one. For all of your titles, what percentage of unit sales were digital downloads in the fourth quarter? And as it relates to your 2016 guidance, what are you implicitly factoring in for digital downloads, and what would that imply for gross margins? Thanks.

[Robert A. Kotick:]

Hey, Chris. Thanks. Obviously, the digital transition has been a very nice tailwind for us over the past several years. And really, front-line console games are the final part of that transition, but it's only really part of the equation. As we mentioned in the call in Thomas's remarks and my remarks, the add on content in services which is purchases effectively after the initial sale are really increasingly more important or as important and are growing incredibly fast and is one of the fastest parts of our digital portfolio. To your question, though, on front-line titles, it really varies by title. So for games like Destiny, it had, in the high-20%s in terms of digital downloads. In terms of overall volume for Call of Duty just based on the size of the player base, full game downloads were a lower share than that, although on an absolute basis, full game downloads were up over 80% year-over-year, so very nice progress there. And we know when we look at the Blizzard side of our portfolio on the PC, the vast majority of those front-line games are delivered digitally. Obviously that brings margin benefits for us as each new game gets delivered through digital channels, brings us gross margin benefits, and you'll see that in our overall corporate margin. We were at 32% this year, and with currency effects or excluding the currency effects, it would have been north of 34%. So overall, we think that trend is going to continue on the console side, particularly on the front side, and it will be a nice tailwind for us for 2016 and beyond.

[Thomas Tippl:]

Chris, the vast majority of what we create are zeroes and ones, and when you look out over 500 million people in the network, you're going to see for the first time we really have the opportunity to sell our products in virtually every country in the world on every type of device, whether it's a mobile device, a desktop device or a console. And so the most important thing for us is engagements across our communities and then the opportunities for delivering player investment follow from there.

[Chris Merwin:]

Great. Thank you.

[Dennis M. Durkin:]

All right. Thank you. Well, we appreciate the time today, and we look forward to talking to you on our Q1 conference call in the spring.

[Operator:]

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