Good morning. And welcome to the Hasbro Second Quarter 2014 Earnings Conference Call. At this time, all parties will be in a listen-only mode. (Operator Instructions) A brief question-and-answer session will follow the formal presentation. (Operator Instructions) As a reminder, today’s conference is being recorded and if you have any objections, you may disconnect at this time. At this time, I’d like to turn the call over to Ms. Debbie Hancock, Vice President of Investor Relations. Please go ahead.

Thank you, and good morning, everyone. Joining me this morning are Brian Goldner, Hasbro's President and Chief Executive Officer; and Deb Thomas, Hasbro's Chief Financial Officer. Today we will begin with Brian and Deb providing commentary on the company’s quarterly performance and then we will take your questions. Our second quarter earnings release was issued this morning and is available on our website. Additionally, presentation slides containing information covered in today’s earnings release and call are also available on our site. The press release and presentation include information regarding non-GAAP financial measures. Please note that whenever we discuss earnings per share, or EPS, we are referring to earnings per diluted share. Before we begin, I would like to remind you that during this call and the question-and-answer session that follows, members of Hasbro management may make forward-looking statements concerning management’s expectations, goals, objectives and similar matters. These forward-looking statements may include comments concerning our product and entertainment plans; anticipated product performance; business opportunities, plans and strategies; costs and cost savings initiatives; financial goals and expectations for our future financial performance. There are many factors that could cause actual results or events to differ materially from the anticipated results or other expectations expressed in these forward-looking statements. Some of those factors are set forth in our annual report on Form 10-K, our most recent 10-Q, in today’s press release and in our other public disclosures. You should review such factors together with any forward-looking statements made on today’s call. We undertake no obligation to update any forward-looking statements made today to reflect events or circumstances occurring after the date of this call. I would now like to introduce Brian Goldner. Brian?

Thank you, Debbie. Good morning, everyone, and thank you for joining us today. Our second quarter performance reflects the ongoing global execution of our strategic brand blueprint as we transform Hasbro into the leading branded play company across consumers and geographies. Every brand we develop, whether it’s a Hasbro franchise brand, a new or existing Hasbro brand or one of our steam partners brand, is being re-imagined across the blueprint to enable us to tell compelling stories globally. Our commitment to deliver the right content with the right innovation for the right audience in the right market is unwavering. In the second quarter, Hasbro's revenues grew 8%. This growth was fueled by a 36% gain in franchise brands, 17% growth in international markets with emerging markets up 30% and 35% growth in entertainment and licensing, led by lifestyle licensing and digital gaming increases. Each one of these is a core element of our brand blueprint today and going forward. Entertainment is supporting many of these brands. For example, TRANSFORMERS, MY LITTLE PONY and franchises under the MARVEL brand, yet not all growing brands are entertainment backed in the traditional sense, but they are leveraging tremendous stories to enthrall consumers around the world. Brands like PLAY-DOH and NERF, both up double digits in the quarter are examples of this strategy coming to life across the blueprint. Just this week storytelling and innovation are converging at Comic-Con International in San Diego. Fan driven Hasbro brands including MY LITTLE PONY, MAGIC: THE GATHERING, TRANSFORMERS and JEM AND THE HOLOGRAMS are brand we are re-imagining through entertainment and licensing are engaging with some of our most avid fans. We are unveiling exciting new initiatives which tap into creativity and engagement, including SuperFanArt.com, where we will leverage the creativity of fans with the technology of…

Thank you, Brian, and Good morning, everyone. Our second quarter results reflect growth key initiative, including our franchise brands and emerging markets, while continuing to strategically invest in our brands, our systems and our capital structure. During the quarter we successfully repaid $425 million of debt and raised a total of $600 million at the lowest coupon in our history. Heading into our peak working capital period, our cash position is strong and our inventories are well-positioned for the holiday season. Before we review our results, please note that in the second quarter 2014, we had an unfavorable tax adjustment of $13.8 million or $0.10 per share diluted share related to a proposed resolution of outstanding tax matters. For the six months, nearly all of this adjustment will be offset by the favorable tax adjustments in the first quarter 2014. Absent any additional adjustments we do not anticipate calling these items out in the full-year 2014 results. Additionally, in 2013, we had pretax pension charges in SG&A of $2.5 million or $0.01 per diluted share, related to partial pension settlement charges associated with restructuring action. We've included a reconciliation to reported amounts in today's release. During the rest of my discussion of our business, I’ll exclude these items as they do not speak to the underlying performance of Hasbro. Looking at our segments, second quarter revenues in the U.S. and Canada segment declined 2%. Both boys and girls category revenue grew in the quarter, but were offset by declines in the games and preschool categories. As Brian mentioned, U.S. POS trends were strong increasing double digits at our top five retailers across all product categories. POS in Canada increased as well. We ended the quarter with inventory of good quality at retail and at Hasbro and we are well-positioned for…

(Operator Instructions) Thank you. Our first question is coming from the line of Sean McGowan with Needham & Company. Please proceed with your question. Sean McGowan - Needham & Company: Good morning everyone. Thanks. I’ll focus the questions on the gaming area. So MAGIC, can you remind us what is coming up in terms of major releases and how you would characterize those releases versus a year ago in terms of magnitude and expectations? I mean, do you expect this category to be up for the year?

Good morning, Sean. Yeah, if we look at MAGIC business, it is clearly driven by releases. And as we were looking at 2013 year-to-date versus ‘14, last year we had our large and a small release in the first half of the year. And this year we had two small set. And yet MAGIC year-to-date is basically flat. As we go into the fall, the MAGIC team will talk this week at Comic-Con and begin their talk about the size of each of the releases and what's coming up. So we haven’t really talked yet about what that is. But overall again looking at MAGIC, the growth internationally, where we are so far year-to-date, the size of the sets that we put out. We feel good about the MAGIC business and we are investing to continue to build the business, focused on the MAGIC online business so that we can run more concurrent gaming sessions more broadly and more online tournaments. And so we’re building our capabilities there and that is some of the investment Deb had spoken to. So we feel very good about MAGIC. So far this year, we feel we're in a solid -- solid place and a strong position as we go into the second half of the year. Sean McGowan - Needham & Company: And how much over the year would be overall impact on games. Can you explain by just looking at MAGIC, the decline in the quarter?

Actually MAGIC was down very little, very small percentages in the quarter. More of the decline would be related to example, a brand like TWISTER in terms of the dollar impact. And if we look at the overall games business, actually in games, very focused on particularly the impact was more in the U.S. on the games. Games declined in the quarter and our POS on games in the U.S. and around the world in several places but in the U.S., it was up sharply. It was up double digits in POS and our inventory on games in the U.S. was down double digits in the quarter. Sean McGowan - Needham & Company: Does that surprise you that POS would be up double digit and yet your shipments would be down double digits?

It really speaks to the strategy we've talked about how we’re executing this strategy, focusing our product lines, categories and brands where they sell the most recognizing retailers focus on just-in-time inventory. So this is consistent with the plan as we’ve executed them. And to us, the most important element in our games business is the innovation that's on the way and coming for the third and fourth quarter, whether you're talking about the new ANGRY BIRDS STELLA lineup for the pink bird or Scrabble showdown, MY MONOPOLY or our action gaming in Battle Masters and a raft of great Disney games that have come in the third and fourth quarter, including Disney Princess, Frozen games, even one of my personal favorites, Olaf’s in Trouble. You’ve got a lot of major games initiatives coming for the third and fourth quarters, which as you know, historically has always been a more pronounced part of our business. And so I think this is reflective of a strategy that we were executing in line with the insights and retail insights that we saw coming from retailers. And it’s just being born out as we execute this year as planned. So we feel very comfortable with our games business. We’ve never seen such a good lineup of innovation coming for the third and fourth quarter. And if I look at the POS, it wasn't just up for couple of games categories. Across different categories and consumer groups and games in the second quarter in the U.S., we saw a great growth, double-digit growth. So whether it's team gaming, whether it's preschool gaming, whatever it might be, we’re seeing some great growth across those different segment… Sean McGowan - Needham & Company: Thank you.

…in POS. Sean McGowan - Needham & Company: Thank you very much.

Our next question is from the line of Steph Wissink of Piper Jaffray. Please proceed with your question.

Hi. Good morning everyone.

Good morning.

Brian, a really quick question for you and I think a follow-up to Sean’s question. Looking at double-digit increases in POS, for you are shipping down low single digits in the U.S. Can you talk a little bit about the balance of maintaining that tight inventory control and maximizing the selling windows particularly around some of those entertainment properties? And then Deb, a question for you just on the inventory. I know you don’t want to give guidance for the second half. But can you give us some sense of how we should think about that inventory balance at quarter end and to give us some sense of the complexion of that inventory relative to some of your second-half initiatives? Thank you.

Yeah. Thanks Steph. So if you look at inventory at retail and let’s use the U.S. data, inventory at retail in the U.S. in toy was down single digits but in games was down double digits, significant double digit. And if you pair that with our POS, our POS in toy was up double digits and in games was up double digits. So as we are executing our plan, we feel comfortable that the growth in inventory that you're seeing in our numbers, is all related to high-quality inventory, a lots of these new initiatives that are shipping for the third and fourth quarters but obviously this inventory particularly focused on the third quarter. And across different gaming segments, we have a number of major new innovations coming whether you're talking about our past and party games, the action gaming category like Battle Masters, MY MONOPOLY that’s coming in the family gaming arena, Scrabble Showdown with them, an exciting marketing plan in Scrabble Showdown coming. So all those elements for us make us feel very comfortable that we're in a good position and it’s very consistent with the insights, the retail insights that we've seen and we talk to you guys about over the last year or two, as we re-imagine the way the U.S. business would execute its strategy and as we’ve executed the plan this year and going into the third and fourth quarter.

And our inventory that we’re holding as well, Steph, it’s of good quality. And it's geographically more importantly where we needed to be to meet consumer demand. So two thirds of our inventory is actually held outside of the U.S. And in addition to that, we also took in slightly more inventory in the U.S. during the quarter as part of our contingency plan related to the potential West Coast port labor strike that we’re all facing. So our inventory is of good quality and it's positioning us well for the holiday season.

Thank you. Our next question comes from the line of Felicia Hendrix with Barclays. Please proceed with your question.

Hi. Good morning. Brian, on TRANSFORMERS, if you can adjust your -- I mean I know that your performance this quarter to where toy sales were at equivalent points with other movie releases and I know this one was more global. So it’s a little bit -- might be a little bit more hard, difficult to do that. And we had the World Cup kind of in the way but if you were kind of trying to do an apples-to-apples comparison, would you say that toy sales are better, worse or even with prior releases at this point in time?

We feel really good about not only the box office, which as you note is giant and certainly growing in all those places we’ve talked about over many quarters where we've seen the growth in multiplexes and the consumer that wants to go out to the movies, the movie theaters that are being built particularly in emerging markets and internationally besides the box office. And I would say that our results overall in the quarter for TRANSFORMERS were very good. And we feel very good about the new innovation across both the toy and game category where we put out a very different kind of product line, a more expansive line, brought back in a lot of those innovations for the younger kids and we've seen that reflected in our takeaway. And then looking out over the remainder of the year, remember all three of the prior TRANSFORMERS movies, we did far more business in the third and fourth quarter than in the first half of the year. And we would imagine that to be true here as well. And so as we get into the third and fourth quarter, into the entertainment windows and home entertainment, we would continue to believe that we’ll do more business in the second half of the year than the first. That's been the case for this brand and for boys’ action. But we’re very pleased thus far with the results.

Great. Thanks. That’s helpful. And can we just switch gears for a second to the Hub, there has been some news over the -- since the summer with Margaret Loesch stepping down and potential changes for the network. Just -- if you could just update us on your view on the Hub and how it all would relate to Hasbro and your participation in the JV. And then also one of those, I guess, you could use the word rumors out there would be the headquarter changes as well?

If you look at the Hub, the performance of the Hub over the last several quarters has been quite good. It’s continued to grow over the last several quarters. And we’ve had a very good recent performance and are seeing our highest levels of girls coming to the network and continue to be the most highly viewed, co-viewed network in percentage terms with parents and kids. So we think that that’s one of the sweet spots of the Hub is that family viewing and family entertainment. We really give Margaret and her team a lot of credit for what they've developed. It's a network that has far better ratings today than when we first started. It's distributed more broadly today than we first started. Our affiliate fees are higher as are our ad sales, and we’re profitable in the quarter. Margaret’s taken the decision that at the end of the year she would like to go do something else. It would have been five years with her at the helm. Obviously, four of those years since launch because we hired her about a year before we launched. And it does give us an opportunity, both parents of the network an opportunity to look at where we take the network, how do we play to the strengths of both parents and continue to drive the momentum in the Hub. We are very committed to our TV strategy to the Hub, to our partnership with Discovery, and to building a great kids television presence both here in the U.S. and around the world.

Okay. So it sounds like other than -- you will have to obviously find a new CEO there, but it seems like otherwise its business as usual?

We have an opportunity to take all that Margaret and the team have built and continue to accelerate that growth. We think that’s family entertaining and entertainment space, where we look at our brands that resonates so well across generations, the growth of the Hub itself and the fact that our brands will lead the way in terms of ratings, what we’ve been able to do between the Hub and then distributing and streaming platforms outside the Hub, the over-the-top providers both here in the U.S. and around the world. We see a real opportunity as does Discovery. They are great partners. David Zaslav and his team are tremendous partners and have been, and we want to continue to build this business and we’re very committed to the Hub and some of the initial successes we’ve had. Remember when we first got together back in fall 2010, we talked about that three to five-year time horizon to really find the footing for the Hub, and where it will go and what will it be as a network and by this October, we will be four years into our effort. And so it’s a good time to continue to up our game and to look at how to build the Hub.

Okay. Very helpful. Final question, just back to Magic, you gave very good color earlier to Sean's questions, so appreciate that. Just one thing, just kind of getting back to things you said last quarter because when you talked about Magic as well and about that it’s release driven and there was I think some impact last quarter to the shift in Easter, but you said early days, that it was off to a good start early in the quarter. So just wondering from then till now, did anything change regarding Magic or did everything go as you anticipated it back when you reported the first quarter?

Yes, no, it’s very consistent with what we’ve talked about. I think Magic is the most challenging sometimes for people to look at, because it isn’t really seasonally driven. It is really a story that’s told through the card releases. I think a good perspective for you is the fact that Magic is basically flat year-to-date, it was up in the quarter internationally and down in the U.S. only slightly. So, again it wasn’t a giant decline, it was just a slight decline. And the fact is a year ago we had both a large set and a small set, and this year we only had two small sets. So, that speaks to what’s going on with the consumer base and the user base, the game players, the most recent launches of things like Conspiracy that just happened in June, the core set that’s coming up, the 2015 core set, and the amount of casual game playing that’s going on, the Duels of the Planeswalkers which is our casual entry level point doing well. So all those elements say to us it’s a building blocks on the year, it hasn’t really changed versus what we said last time, but we’re just giving you more color as the year unfolds.

Great, okay. Thanks so much.

Our next question comes from the line of Eric Handler with MKM Partners. Please proceed with your question.

Yes. Good morning. Thanks for taking my questions. First, on TRANSFORMERS, given that the film had a delayed release date in Latin America and Europe because of the World Cup, did you also delay shipments of the toys into those markets so that we should see an uptick in the 3Q as a result of that? And also wondered given how strong the film has performed in China, do you guys see a corresponding uplift in toy sales in that market as well? And then secondly, just quickly on MAGIC: THE GATHERING, we are starting to see some competition from Activision's Hearthstone game and wondered just what type of overlap there is among the customer base and is that having any impact as well?

Yes. So, Eric, first question on Latin America, we made our early shipments about the same time but recognize that the takeaway starts to accelerate after the World Cup, after all the marketing kicks in around the launch of the movie. And then remember that as we go into the third quarter, we do expect third and fourth quarter business to be far bigger than the first and second quarter, that’s very consistent with the prior films. So yes, Latin America and some of the other markets that were delayed relative to the World Cup will have a slightly bigger impact to what are already larger numbers coming for the third and fourth quarter that would be our expectation. So I don’t think that it would have a significant impact other than altering the otherwise planned out trajectory, which does have us a bigger numbers in the third and fourth quarter. In terms of China, the result both this year as well the impact that we’re seeing in China for us portends incredibly good things over the next several years. Remember that TRANSFORMERS was a brand that had its history in the 1980s in animation in China, so you have this great bimodal appeal of the brand with adults, fans as well as young people coming into the brand. The brand has performed very, very well. So it again will have meaning for us in China this year, but also sees this brand, it’s why TRANSFORMERS is such a powerful franchise brand for us, and as a franchise brand the potential to grow over many years, of course many categories and geography. And also we’ve worked on building our distribution in China. We have a strategic alliance with all the domestic Chinese company that would enable us to get to…

Very helpful. Thank you.

Our next question comes from the line of Jaime Katz with Morningstar. Please proceed with your question.

Good morning. Thanks for taking my question. You guys broke down what drove operating profit for the U.S. and Canada segment and International operating profit was significantly stronger. Could you talk about whether that was mostly mix driven or entertainment or what was behind that and maybe where do we expect the ultimate sustainable level to be there?

Certainly, Jaime. Good morning. Internationally, I think you’re seeing a lot of kind of what we talked about for the company overall. It really is mix driven. And also, you are seeing the benefits of our cost savings initiatives. So in International, some of our costs have come and given the mix of heavily entertainment driven products, which tend to carry higher gross margins, a little bit higher royalties, the higher gross margins, you’re really seeing that mix plays real combined with our cost savings initiatives.

You also have the fact as we grow revenues off of a relatively fixed cost base, it’s what we talked about that international markets over time should begin to -- operating margins should begin to look more like company average operating margins.

It’s perfect. Thanks.

Your next question comes from the line of Tim Conder with Wells Fargo. Please proceed with your question.

Thank you. Brian, a little bit more color if you could by the geographic POS and the product lines. And I guess then the other part is just to stay on the trading card line of questioning. I know you normally don't give forward guidance, but given what you have coming, do you anticipate that business being up on a year-over-year basis in the second half?

Yes. We really look at -- if you really look at what’s going on with Wizards of the Coast year-to-date, it’s more about Duel Masters, the Japanese trading card game being down. As we said, Magic’s performance is flat year-to-date. I don’t want to steal the team’s thunder. They are going to tease one of the new releases at Comic-Con this week coming into the week and the plans are very robust for Magic for the remainder of the year. But again, the team would like to reveal those in the right time, in the right way, and we’re really focused on our game players and fans and we don’t want to ruin any of the great surprises and fun they have in stores as they play the game. And so I don’t want to guide you there, but I will tell you that they built a great business, that business has grown and more than doubled over the last number of years. And so I had great confidence in that team as they built the plans for this year and into ’15 and beyond. If we look at the POS across categories, POS was up and I will use U.S. and then go to International. POS and toy was up double digits and game was up double digits in the U.S. In Boys, it was up double digits; in Girls, it was up double digits; in Games, it was up double digits as I said; and in Preschool, POS was up double digits. So across all our segment categories, POS was up double digits. As we go to international markets where we have specific syndicated POS data, POS was up double digits in Canada and double digits in Mexico, double digits in the U.K., high single digits in Germany, was down a little bit in Australia, down a bit in France and down a bit more in Spain.

Okay. And anything on Latin America?

Well, we have results in Latin America. We don't get syndicated data in the same way. Obviously, we have seen great results in the market in Brazil. We have seen our results obviously are very strong in Brazil. The market is growing and we’re growing faster. Our market share is growing. And around South America, Latin America, we feel good at several of the markets, actually all of our markets down there really looking good and the results there are very strong. We even had a brand like Furby, which is challenged in the rest of the world. They grew in Latin America in the second quarter and that’s what we’re talking about as we roll out to non-English speaking markets. Playskool grew in Latin America as it did in Asia-Pacific. In fact, Playskool grew internationally in the quarter, just not in the U.S. and not overall. So we’re seeing again the strength in our portfolio and the strength in growth across several of our initiatives in these regions.

Okay, great. Thank you.

And then Tim, the other pieces is -- and then, we’re also seeing growth in market share so the last two. So, growth in market share in the dolls business and in Girls, growth in markets share in outdoor and sports and growth in market share in games.

One quick question then on follow-up, any impact yet from a new competitor in the outdoor sports area?

Well, our NERF business, our NERF brand and business were up in the quarter and our POS was up and our market share was up. So I would say, we’re focused on executing our plan for the year and we feel very good about the results in N-Strike and as well as in our Zombie Strike product and we have several new initiatives lined up for the third and fourth quarter in NERF. So we just continue with the innovation and great marketing and the team has done a great job.

Thank you.

Thank you. Your next question comes from the line of Drew Crum from Stifel. Please proceed with your question.

Hey, great, thanks. Good morning, everyone. So you guys have had very good momentum with the Girls business. And Brain, I think you mentioned that 70% of Furby’s revenue came in the second half last year. As you look at the second half of this year, do you feel like you have enough initiatives to grow the Girls business notwithstanding that headwind from Furby?

Yeah. Drew, thanks for the question. The Furby business, I should give you a kind of little color on it, because I think we’re seeing some impact in the second quarter on challenging comparisons to Furby and we’ll see that through the remainder of the year. As I mentioned, Furby in the second quarter was up in Latin America, so you have some mitigating elements. But overall, Furby is clearly one of the two big headwinds we cited early in the year, the other one being Beyblade. In the second quarter, Furby’s decline overall and Beyblade’s decline were similar. And we actually saw that Furby had a bigger impact than Beyblade in Europe and in Asia-Pacific, where Furby was very big a year ago. So Beyblade’s impact starts to diminish, Furby’s impact gets bigger in the third and fourth quarter. Having said that, we feel very good about the momentum in our Girls business and in the third and fourth quarter, you will see the Rainbow Rocks movie coming for Equestria Girls, Rainbow Power coming for MY LITTLE PONY. So we are as the team would say very Rainbowfied for the third and fourth quarter this year in that brand. Littlest Pet Shop’s, new product comes into the market related to the TV series. It's been out on the air in 130 plus geographies over several quarters and so that comes in for the third and fourth quarter. And we have a raft of really fun play in lots of other categories in Rebelle coming. And then even in other elements of our kind of Girls games business, we have really fun Disney Princess product lined up for the third and fourth quarter. And again, we feel very good about the plans for our Girls business going into the holiday season.

Got it. Very helpful. Okay. And then, Deb, let's see, the royalties were up in the quarter, which would be expected, but also advertising was up. And I think in years you have big entertainment slates, you typically see royalties up and advertising down. Is that still your expectation for 2014? Thanks.

I think overall Drew that would still be our expectation for 2014. I think what you have is just really the mix of products in the market, that’s driving both at the same time.

Okay. Thanks, guys.

Our next question is from the line of Gerrick Johnson with BMO Capital Markets. Please proceed with your question.

Hi. Good morning.

Good morning.

Hi. Can you let us know how much did Backflip contribute to the games segment in revenue?

I don’t think we give those specific numbers, but Backflip did contribute to games and would be noted inside of digital gaming.

Okay. And then in China, did the Alpha Animation joint venture contribute to results or was the growth there all organic?

It was all organic thus far, but the plan over time is in the next year or two will start to really activate that across some new IP as well as some of our other brands.

Okay. And lastly, you may touch on this in the future, but maybe if you could give us some idea now how you plan on monetizing your 3D printing venture with Shapeways? Thank you.

It’s exciting. It's just launching this week. We’ve always said and we talk to you guys about the modern boy and the modern girl and what we’re seeing in play. We want to revolutionize play and one of the big areas there is the creative makers, people who want to have their hand in making their own playthings with the brands and the play places they want to go. And we’re going to give them the opportunity, the enabling technology, Shapeways is a great partner. We wanted to start with Superfanart.com, which, as you know, launches an artist because there there's been a lot of interest among our fans for new art and art that has been created by both artists as well as fans. But you will see us continue to build product that allows people to customize and to contribute and to curate to that brand and that's like MY LITTLE PONY POP, that Hero Mashers already on the mass customization level. And then on the far end will be those folks who really want to create their own play things as well as their own engagement, the way they want in our brands. And so, we’re going to satisfy the desires of all of our fans and kids and adults alike.

Okay. Thank you.

Thank you. Our next question is from the line of Mike Swartz with SunTrust. Please proceed with your question.

Yeah. Hey, good morning everyone.

Good morning.

Just clarification that the POS numbers that you pointed out earlier, are they normalized for the Easter holiday?

Not sure how we normalize them. These are the results of the quarter. So just as in first quarter, we didn’t normalize, we didn’t pick, put it back in Easter. So now these are the results that we got. We think it’s pretty reflective of what we’re seeing over-the-counter. And I would say, in the U.S. remember, Easter is really most impacted in U.S. Easter to Easter, we didn't see much variation year-on-year. So I would say that obviously just as in the calendar. Yeah.

That's perfect. Thank you. And then just maybe on advertising and just product support dollars for the remainder of the year, I mean how do you look at that? I mean, are you changing the way that you are investing in terms of digital versus in-store support?

We have focused on engaging the consumers and our fans and audiences digitally that comes in a lot of forms including content that's available ubiquitously and allows for young people and families and adults in some cases to view our content anytime and anywhere they want. It has a lot to do with the game play and gaming, whether it's from Backflip or whether it's from EA or Activision or DNA or Gameloft providing game playing experiences that feed back into the brand and the brand experience. In the marketing area, we have significantly increased our digital engagement, as well as social engagement with our brands. Look at the MONOPOLY site as people vote and millions and millions of people are getting involved in the House Rules MONOPOLY or Scrabble Showdown. So there's all kinds of digital and digital marketing that we’re doing and we will continue to increase those percentages. And that will have -- we think a change because obviously, the out-of-pocket costs for those initiatives are different. Although the CPMs might be viewed as higher the out-of-pocket costs are probably different. But then combine that with the acceleration in growth in some of our emerging markets where we do want to invest in advertising in the early quarters because we are seeing momentum there and we want to continue to grow those businesses. But again, I’d echo what Deb said earlier, which is for the full year, we would expect the numbers in advertising to normalize and obviously, royalties to be a bit higher in a strong entertainment year.

Okay. Great. Thank you.

Thank you. At this time, we have come to the end of our Q&A session. I will turn the floor back to Ms. Debbie Hancock for closing comments.

Thank you to everyone for joining the call today. The replay will be available on our website in approximately two hours. Additionally, management's prepared remarks will be posted on our website following this call. Our next earnings call is tentatively scheduled for Monday, October 20th. Thank you.

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.