Jennifer Driscoll - Vice President, Investor Relations Brian J. Dunn - President, Chief Operating Officer Shari L. Ballard - Executive Vice President, Retail ChannelManagement Robert A. Willett - Chief Executive Officer Best BuyInternational James L. Muehlbauer - Senior Vice President and Interim ChiefFinancial Officer Bradbury H. Anderson - Vice Chairman of the Board, ChiefExecutive Officer Julie Owen - Senior Vice President, Entertainment Group David Morrish - Senior Vice President, ComputerMerchandising Mike Vitelli - Senior Vice President, Consumer Electronics David Ashan Barry Judge - Senior Vice President, Consumer and BrandMarketing Charles Marentette - Senior Director, Investor Relations

Colin McGranahan - Bernstein Anthony Chukumba - FTN Midwest Securities Gregory Miller - Morgan Stanley David Strasser - Banc of America Gerald Feldman - Telsey Advisory Group Chris Horvers - Bear Stearns Michael Baker - Deutsche Bank Gary Balter - Credit Suisse

Ladies and gentlemen, thank you for standing by. Welcome toBest Buy's conference call for the third quarter of fiscal 2008. (OperatorInstructions) I would now like to turn the conference over to Jennifer Driscoll,Vice President of Investor Relations. Please go ahead.

Thank you, Eric. Good morning, everyone. Happy holidays.Thank you for participating in our fiscal third quarter conference call. Wehave four speakers for you today. First up is Brian Dunn, our President andCOO; second, Shari Ballard, Executive Vice President of Retail ChannelManagement; third we have Bob Willett, CEO of International and ChiefInformation Officer; and fourth we have Jim Muehlbauer, Senior VP of Financeand Interim CFO. As usual, we have a broad management group here with me toanswer your questions following our formal remarks. We’d like to request that callers limit themselves to asingle one-part question so that we can include more people in our Q&Asession. Consistent with our approach on prior calls, we will move to the endof the queue those who asked a question on last quarter’s call. I’d like to remind you that comments made by me or by othersrepresenting Best Buy may contain forward-looking statements which are subjectto risks and uncertainties. Our SEC filings contain additional informationabout factors that could cause actual results to differ from management’sexpectations. As usual, the media are participating in this call in alisten-only mode. And with that, I’ll turn the call over to Brian Dunn whowill begin our prepared remarks. Brian J. Dunn: Thank you, Jennifer and good morning and happy holidays,everyone, and thank you for joining us today. We are very pleased to deliverthe news we bring you today because we believe it spells growth -- growth thatcomes from our continued progress in building relationships with our customers.In a minute, I’d like to talk a little bit about why we believe that. But first, I’d like to put the third quarter’s results incontext. If you go back to the first quarter, we talked about financial resultsand strategic results and how they don’t always match up in a three-monthwindow of time. The confidence that we expressed then, even in a toughfinancial quarter, was anchored in what we were seeing with our customers andour employees. We delivered very different financial results in Q2 but with nochange in our focus on driving the customer experience because that is how weare transforming this company. Let’s face it -- Best Buy was built as a distributionchannel, a vibrant, independent distribution channel but a distribution channelnonetheless. The business model initially had more to do with supply, what wecan sell, than demand, what customers want to buy. When margins began to drop and it became more aboutefficiency and speed, we knew we had to reinvent ourselves. That’s wherecustomer centricity began. We have to reach people, employees and customers,and win with them. That’s where the profit pools in growth are. Our solidsecond quarter results were possible only because of the investments incultural changes we have been undertaking to move our company in this newdirection. The third quarter was another transformational quarter andone where the strategic results and the financial results were once againaligned. First, the financial results; today we reported EPS of $0.53for the third quarter, an increase of 71%, with revenue growth of 17% and acomparable store sales gain of 6.7%, and once again the strategic results,which are really a measure of how well we are building our relationships withcustomers, are very encouraging. Our customer satisfaction was up again this quarter, as wasour market share, and so was reward zone membership. We now have nearly 28million reward zone members. In addition, just 14 months after launching ourreward zone MasterCard, we have surpassed 1 million members. It’s one of thecountry’s fastest growing retail credit cards. We continue to look for ways to build upon the relationshipswe have with our most loyal customers, like offering exclusive sales events andother special promotions, and our customers love it. The number of customers we consider most loyal was up thisquarter too. Those customers spend more with us and come back to shop moreoften, offering us an opportunity to do more for these customers. We have builta solid, credible relationship with our best customers and so they trust us tomove into new spaces with them. In fact, they are asking us to do more forthem. We are going to determine these new spaces by what our customers aredemanding and not what our vendors are promoting. I want to give you one good example of a new space -- ourmusical instruments business. A couple of years ago, we started testing a 2,500square foot store-within-a-store musical instruments concept in California. Theproject was heavily based on customer research. As you can see on YouTube,Facebook, and MySpace, music is converging with technology and Best Buy is seenas a partner they can trust in both areas. In addition, many of our employeesare musicians themselves and are thrilled to help others create, play, performand share music. It is early but the results of this test so far indicate thatwe’ve found and are serving a customer need. We now have four of these storeswith plans to add more next year. I’d like to give you three more examples of tangibleindicators that we’re improving the customer experience. First, in September we began offering our reward zonemembers the opportunity to redeem their certificates online. In and of itself,that isn’t terribly exciting but the customer response is powerful in what ittells us. In the first month, the percentage of certificates redeemed onlinewas double that redeemed in our stores. It proved what we already knew --customers love the flexibility to shop with us in different ways. When welisten to our customers and provide the right multi-channel offerings, theyalso spend more money with us. In fact, when they shop us using differentchannels, they often double the number of transactions with us in a year andremain loyal customers. That’s an important piece of profitable growth. Second, the experience that we offer our customers duringthe Thanksgiving week is always, in my opinion, best in class but we still finda way to make it better every year. The truth is that the customer experienceincreasingly starts before Black Friday and because of this trend, we arebetter utilizing the online channel to communicate with customers about what toexpect, like how the ticketing process will work. On Black Friday, we were very encouraged by a couple ofstatistics. Despite record holiday volumes in our stores, customer wait timeswere shorter than ever and the stores I visited recovered from that morningrush very, very well. That set us up for a very good afternoon with our blueshirts engaging with customers and completing more complex transactions withthem. And finally, my third example, two weeks ago we announcedthe addition of Dell to our computer assortment. We are certainly pleased to beoffering Dell products to our customers because we now have the complete lineupof every major brand for our customers, all backed by the service and supportof the Geek Squad. We know that our customers wanted this brand because Dellwas one of the most heavily searched words on our website and now we can meetthat need. As these three examples show, we are striving to buildrelationships by offering more to our customers wherever they interact withBest Buy, putting together powerful offers led by customer insights anddelivered by our employees is a recipe that’s working. And speaking of our employees, I’d like to conclude myremarks with a few comments about them. A quarter like the one we justcompleted, with 71% earnings growth, can only come when every part of thecompany is pulling in the same direction. From the U.S. to Canada to China, itwas uniformly spectacular performance and I want to pause here to say thank youto our people. I hope you are proud of that performance and proud of what youare building at Best Buy. We know that our focus on customers means nothing withoutour people to complete the relationship with them and I’m pleased to reportthat we are making progress in some key indicators on the employee side of thatrelationship equation. We continue to reduce our U.S. retail employee turnoverand are on track to reduce it by five percentage points this year. Our generalmanager turnover continues to improve as well, trending at an impressive 13%, asignificant decrease from last year. As we look to the future, our confidence is grounded in ouremployees and the progress they are making with our customers. Our employeeswork for a growth company and we see a ton of untapped opportunities for growthnext year and for the next 10 years. We already mentioned musical instruments. We can exploreother new offerings as well. Even as we look with new eyes at existing areas,such as financial services, cellular, private label, our high-end business, andeven warranties. We have a growing number of loyal, enthusiastic customers andso it is up to us working on their behalf to decide where the brand can go withthem next. We believe in our employees and have faith in what they cando for customers, especially if we give them the right tools. When we put ourfaith in our people and their insights on customers’ needs, they reward us withquarters like the one we are reporting today. To talk more specifically about how we make that happen,next up is Shari Ballard, who heads up our stores, call centers, and dot-comcapability for the U.S. Shari. Shari L. Ballard: Thanks, Brian. Good morning, everyone. I would like to spendmy time with you today discussing the growth premise underlying Brian’scomments and providing examples of the opportunity we have available to us whenwe operationalize that premise to our full capability. Our point of view is this -- there are opportunities forgrowth that can only be seen by employees who talk to the customers directly inthe places where the customer interacts with the brand. For us, that means inour stores, on the phones, online, and in customer homes. By providing theseemployees with the data and tools they need to understand their community, thevarious customer segments in that community, the needs specific to thosesegments, and placing them in an environment where they are invited andexpected to try out their ideas for better serving those customers, we can growBest Buy at exciting rates. Additionally, we believe that running our business with alens focused on who we serve in addition to what we sell them will unlock evenmore opportunities for growth. We are seeing evidence that using thesedifferent lenses to drive the business does work and I’d like to share somespecific examples of that with you today. While I don’t want to overlygeneralize a single day out of the entire quarter, I am going to comment onBlack Friday because it offers some compelling evidence for us. First, Black Friday and the following weekend was a success.From a financial perspective, we had solid revenue growth and our margins wereup on a year-over-year basis. Our dot-com channel significantly exceeded ourrevenue expectations and it was also a success from the customer perspective. Our customer satisfaction scores were up three points yearover year Black Friday and our customer complaints were down 25%. Additionally,the majority of our growth came from our most loyal customers and from ouropportunity customers. Opportunity customers are those who love our categoriesbut are not loyal to the Best Buy brand exclusively. While we are pleased with these results, we are even happierwith the way we are starting to get these results and with what we are learningabout our customers in the process. We are using customer data to design valuepropositions within and across the channels, measuring how the customersrespond and adapting based on what we are learning. The first example I’ll use comes from advertising. In ourThanksgiving insert, we advertised a number of bundles. We learned that allbundles are not created equally. One of those bundles included a laptop, noisecanceling headphones, and HD DVDs. In the past, we would have just looked athow many of those we sold. Now, we have the capability to look at how actuallybought them. That bundle in particular skewed heavily to our most loyalcustomers by nearly 500 basis points, while other bundles in the adunder-performed relative to our best customers. We knew that information fairly quickly and are using thatknowledge to guide how we serve those customers in the future. For instance, wenow know that offers that include an entertainment component skew heavily toour most loyal customers. In the same vein, we’re learning that many of our most loyalcustomers want to have alternatives for how they shop with us. For example,many of them would prefer to avoid the fray of Black Friday so this year, weoffered them a private shopping event the weekend before Thanksgiving and hadoutstanding customer response and very good business results. Now, we add local insight on top of that macro visibilityand we can literally see countless opportunities for better serving thecustomer. We’ve got some specific examples of that from Thanksgiving week, too. The first example is store 48 in Topeka, Kansas -- a littleshout-out to the Kansas team this morning -- with industry insight coming fromour PC mobility operating group here at the corporate office, the local teamknew that GPS was going to be on fire this holiday. They also knew that one ofthe biggest reasons customers leave our stores without buying is because theycan’t find what they are looking for. It’s not that we are out of stock; theycan’t find it. Store 48 tested the idea of relocating GPS to a more intuitivelocation in their store. Their GPS category growth versus their peers increasedby 20 percentage points. Still working from the insight that customers want an easierexperience with us, another store made changes to its notebook display to makeit easier for the customers. They literally took the cabinet doors off theirdisplay and had grab-and-go notebooks in a box with the handle, easilyaccessible for the customers. The first day with their new approach showed atriple-digit comp in their notebook business. The final example comes from the North Scottsdale area,where a handful of stores used their best asset, their people, morestrategically on Black Friday. They knew from past experience that customershopping patterns change dramatically as the day unfolds, so they scheduled someof their most experienced associates later in the morning and in the afternoonin an attempt to better match experienced selling labor with the way thecustomers wanted to shop. Not only did we see this in Phoenix but we saw applicationof this in many other markets and it’s an example of us learning within the dayhow to respond to local customer needs. We believe this contributed to thethree point improvement in customer satisfaction that I referenced earlier. We have more examples and they are all variations on atheme. That theme is that when we get away from looking at the business solelyby what and where we sell and pay attention to the combination of powerfulcustomer focused solutions matched with the insights of our local teams, we canunlock extraordinary results. That’s why we are confident in our growth runway. We believe we can materially grow market share in ourcurrent categories this way and that in these dialogs with customers, we’lldiscover new, adjacent spaces where they want us to participate, like musicalinstruments that Brian referenced a minute ago. I also think this lens will take us into new spaces, as weidentify customers and we identify where customers are massively disappointedwith their technology solutions. Our work with Carphone Warehouse and thecustomer value propositions we are building together in the mobility space isan example of the possibilities. As we get better and better at operationalizing our corepremise, we expect to see the results show up in market share gains, compgrowth, and overall earnings growth. There is no reason a 10-year old storecan’t be generating growth like a new store based on what we are seeing. As I close, I too want to thank the employees in all of ourchannels and here at our corporate office for working together to deliver agreat quarter. Team, the work you are doing is defining a very bright futurefor Best Buy. With that, I will turn it over to my colleague, Bob. Robert A. Willett: Thanks, Shari. I’d like to take you through an overview ofthe results in the international segment, then I’ll comment a wee bit on eachcountry’s performance as we take our domestic growth engine to internationalmarkets and continue to invest in our enterprise infrastructure. Collectively, our international segment produced operatingincome of $22 million, a material increase compared with the $7 million for theprior year’s third quarter. Our earnings gain was supported by revenue growthof 32% to $1.7 billion, or more than a sixth of the total revenue for theenterprise, including comparable store sales gain that clocked in at 9.3%. We were very impressed with the work that the teams did inserving customers. We are benefiting from the opportunity to achieve fastergrowth in markets outside the United States. As you’ve seen in the news release, our internationaloperating income rate improved by approximately 80 basis points. This gain waslargely due to the focused execution in Canada, which drove 130 basis points ofSG&A expense improvement, as well as an operating model shift in China. These improvements offset a modest 40 basis point decline inour international gross profit rate which reflected unfavorable mix changes andpricing pressure in Canada. All together, our operating profit income rate forour international segment was 1.3% of revenue. We delivered these results whilecontinuing our work through the Geek Squad partnership with Carphone Warehouse,as well as preparing to enter Turkey and Mexico. I’ve already begun down the road commenting on theindividual brands so let me complete that thought. First and foremost,congratulations to the Five Star team on its 13% comparable store sales gain, abrilliant debut to the company comp figure. Because of the very different business model typicallyemployed by retailers in China, which focuses on devoting space in stores foreach of the vendors, this metric historically wasn’t a focus area for the teamin China but they are fast learners. We believe that comps are a critical wayof gauging how customers are responding to what we are doing in our stores andother channels. It’s also terrific feedback and the Five Star stores are usingthe data to drive actions. Sales per square meter are also rising, another goodindicator and contrary to other retailers in China. In addition, both customersand employees are responding well to the new layouts we are testing in 20 FiveStar stores. Customer centricity is very much the centerpiece of ourstrategy internationally. In fact, sometimes we are able to move more nimblywhen we enter new countries because there are no legacy issues with which tocontend. Specifically, it’s much easier to create a culture from scratch whereemployees are encouraged to gather customer insights, develop ideas for servingthem better, and measure the results. For example, at our Best Buy store in Shanghai, we’ve seen areal cultural shift compared to how other retailers operate in China. Our focusis not on vendor funding or rapid real estate growth but on the employeeexperience, the customer experience, and the overall store performance. Employees are responding to our culture, as evidenced by thevery low 15% staff turnover we’ve had in the store’s first 11 months ofoperations. Customers are responding to the opportunity to touch and try ourproducts, which are arranged by category, not by vendor. Ninety-one percent of customers surveyed said they like thein-store experience and 76% are likely to recommend Best Buy. Given that thecustomers and employee metrics look good, it’s no surprise that financially ourperformance in China is on track with our plans year-to-date. Yet it’s stillearly days and we continue to go carefully with our organic store growth plans. As expected, Canada, where we have a very focused leadershipteam, also reported a strong comp. Our comparable store sales in Canada rose8.7% on top of a gain of 13.7% in the last year’s third quarter, including bothstore and online performance. Well done, team. We recently launched reward zone at Best Buy stores inCanada and we are anticipating as many as 550,000 reward zone members by fiscalyear-end. We believe this investment will be repaid in customer loyalty,spending, and shopping frequency. Another change we made in Canada was the launch of hometheater services last summer, which is showing up in our international servicesgrowth. Last, we have a small but quickly growing private label business whichgives us huge differentiation and growth potential. Before moving on, let me take a moment to give an examplethat illustrates how private label can differentiate us and provide growth. Oneof the many things our private label team does well is to talk to our storeemployees about what customers need but can’t currently buy from us. In our Canadian stores, we found out that there is anincreased need for both a 25- and 50-foot HDMI cable to connect their hometheater system components, but none of our vendors offered anything that long.In less than two months, the private label team launched a 25-foot rocket fishHDMI cable. The 50-foot will follow in February and the 25-foot is selling verywell. Through our partnership with Carphone Warehouse, we continueto add the Best Buy mobile experience at our stores and currently operate 181such locations. The early results are really promising from a top lineperspective. We’ve previously indicated plans to offer this experience at allU.S. Best Buy stores within the next two years. Likewise, we continue to progress with offering Geek Squadservices at Carphone’s U.K. locations. While the in-home channel is still inthe pilot phase, the online and over-the-phone channels are right on plan. Moreimportant, the customer reaction is just terrific. We need to get the messageout because the business model clearly offers value for customers. We also continued to move forward into new markets, recentlywelcoming to Best Buy an experienced new leader for Mexico with a passion forour values, including unleashing the power of our people. We also currentlyexpect our first stores in Turkey and in Mexico next fiscal year, and we arepleased with the initial response from our vendor community. We’re not daft enough to believe we are good at everythingand we can go everywhere with our current store formats, but we do think wewill have less risk in expanding internationally than any other retailerbecause we have a good business model and a clear sense of the employeebehavior we need and the culture we want to create to serve our customers. We’re also learning from others who have gone before us. Wecannot be effective offshore unless we are good at what we do at the core andcan translate it to other markets. To facilitate this effectiveness, we are continuing to makemajor investments to complete our supply chain program and technologyinfrastructure build-out. These investments will enable us to implement newcapabilities that will accelerate our differentiation. Our core is very strong. That’s why we are a growth companyand we plan to keep acting accordingly. We’re also very optimistic about whatthe future holds for us. Thanks for your attention this morning. We’ll put a fullstop there and turn the call over to Jim, but before closing, I’d like to wishall of our employees and their families a very happy Christmas, a happyholiday. Jim, over to you. James L. Muehlbauer: Thank you, Bob and good morning, everyone. In short, we arepleased with the 71% EPS growth in the quarter. We saw relatively consistentunderlying strength throughout the quarter and enjoyed a very solid November.Consumer electronics appears to be once again the holiday gift of choice and,as Brian said, our employee planning and execution on behalf of our customerswas second to none. Both our strategic results and our financial results aretelling us that we offer the products people want but more importantly, we areoffering the experience that people want. While we love great financialresults, we are most excited about the positive traction we are gaining asevidenced by our latest customer satisfaction and market share data, whichshows us continuing to build share in key categories profitably. Our 17% revenue growth in the quarter was driven by strengthin both our domestic and international segments. We reported a 6.1% comp in thedomestic business, or roughly 3% when adjusted for the calendar shift. That wasdouble the first half run-rate of 1.7%. The acceleration in comp performance from the previousquarter was a function of both better industry growth and share gains inproduct categories such as gaming, notebooks, and GPS. We’re also doing a better job of developing bundled upsolutions that make sense for our customers and that leverage the benefit of aworld-class retail team. Additionally, we saw a greater revenue contributionfrom new stores because we accelerated the timing of new store openings thisyear. We opened up 72% more U.S. Best Buy stores in the first half of this yearversus last year. As expected, U.S. consumer interest for the quarter centeredon gaming, computing, and GPS. As Bob mentioned, our international growth segment postedstrong revenue growth as well, with 32% growth on top of 51% growth last year.Total revenue growth was aided by the impact of positive foreign currencyexchange rates, the 9.3% comp sales gain, and new store openings. The gross profit rate was flat year over year. Sometimesflat feels like a success. The gross profit rate actually increased in thedomestic business by 20 basis points. I know that you have not heard the wordsgross profit and increase used in the same sentence for a while but let me giveyou some color behind these results. As you all know, we’re lapping a pretty promotionalNovember, particularly in home theater and notebooks. Consistent with ourhypothesis at the beginning of the year, these two spaces were more rationalthis time around and we actually grew home theater margins for the secondquarter in a row. Part of the way we accomplished that was through lower costpromotional programs. We have also lapped the inclusion of the China business.While we’ve added new stores in China, it no longer puts pressure on theyear-over-year gross profit rate comparison. These gains were essentially offset by the impact ofcontinued strong growth in lower margin categories, such as gaming hardware andnotebook computers, which we saw both domestically and internationally. A continued bright spot for the year was the level ofSG&A improvement. Our 120 basis points of SG&A leverage reflectedstrong revenue growth and efficient spending. Our domestic leverage acceleratedfrom Q2, fueled by higher revenue growth and changes we’ve made to our storelabor model. As you can appreciate, we generate significant leverage on a 17%revenue growth. In addition, we had fewer changes in the stores this yearthan last year when we were rolling out 136 Magnolia home theater rooms. Theabsence of start-up expenses and a more efficient labor model enabled ourstores to better focus on serving customers. Finally, internationally the SG&A rate also improved byover 100 basis points, supported by strong revenue growth and expense control,including advertising leverage. Net, it adds up to roughly a 120 basis point improvement inoperating income rate and more importantly, a 79% increase in operating incomedollars. The calendar shift contributed to that growth but we are very pleasedwith the underlying growth we see on an apples-to-apples basis. At the end ofthe day, this was one of our best third quarter operating performances inrecent memory. Bottom line, we grew our diluted EPS by 71%. These resultsbring us to 19% earnings growth year-to-date after being flat through the firsthalf of the year. All in all, it was a very solid performance. Our employeesdeserve all the credit for maintaining focus on executing their operationalplans which drove this rewarding quarter. We are consistently working on newand better value propositions for our customers and not that everything alwaysworks, but seeing how well customers are responding gives us a ton of energyfor the future. Before shifting to our outlook for the balance of the year,it might be helpful to touch on a few balance sheet items. First, our U.S.comparable store inventory was up approximately 8%, which was higher thanprevious quarters. This inventory increase was a function of purposeful investments in high growth product categoriessuch as flat-panel TVs, gaming, and notebooks. Furthermore, almost half of thisincrease was due to the calendar shift as we ended the quarter one week deeperinto the holiday season. Overall, we are comfortable with the status of ourinventory positions. Second, our diluted share count for the quarter finishedabout where we thought, at 431 million shares. We still expect an averagediluted share count of 454 million shares for the fiscal year. As previouslystated, the accelerated share repurchase program is planned to conclude at theend of our fiscal year. Looking forward, we are raising our earnings guidance forthe fiscal year due to our solid performance in the third quarter. For theyear, our earnings outlook is $3.10 to $3.20, an increase of 11% to 15% yearover year. We still expect an enterprise comp of roughly 4%, driving close to$40 billion in revenue. Our annual outlook assumes SG&A leverage will offsetgross margin declines, yielding nominal growth in the operating income rate forthe year. Specific to the fourth quarter, earnings will be constrainedby the loss of the 53rd week from last year and the shift of the holidayshopping week into Q3 of this year. Conversely, the ASR will provide a tailwindfor EPS growth in the fourth quarter. While we will continue to make progress in improving ourpromotional programs, we expect the Q4 gross profit rate to be down modestlyfrom the prior year, in part due to mix shift changes and the gift cardbreakage that benefited the prior fourth quarter. We also expect significantlylower SG&A leverage in Q4 versus Q3 as a function of lower revenue growth drivenby the absence of the 53rd week and the calendar shift. Reaching $40 billion in sales is an exciting milestone foreveryone in the company. For context, it took us 33 years to hit the first $10billion mark. We added $10 billion in the last two years alone. We’ve come along way and we aren’t done accelerating the growth. We have said many times that our results won’t be linearbecause we are pursuing a growth strategy that’s dependent on really engagingour people to generate ideas that meet customer needs which won’t be linear.We’re humble enough to remember that both when financial results exceed ourexpectations and when they don’t meet our expectations. To be clear, while we are pleased with the progress we madethis quarter with comparable store sales, as a growth company we are not yetsatisfied that we have truly unlocked the best solutions for our customers, orthat we fully embrace the ideas generated by our employees to grow the businessfaster. We see that as the biggest opportunity that’s still out there in frontof us. And when we do these two things successfully, we believe wewill set the organization on even a higher growth trajectory for the future. In closing, I want to reiterate our appreciation to all ofour employees for the great quarter they produced. We are confident that ourdiligence in maintaining our customer focus will continue to lead us tooutsized growth opportunities. Thank you and we wish you and your family and friends awonderful holiday season. And with that, Operator, we’d like to turn it over toquestions and answers, please.

(Operator Instructions) Our first question comes from ColinMcGranahan with Bernstein. Please go ahead. Colin McGranahan -Bernstein: Good morning. Thank you. I guess my first question is forBob Willett; who needs a 50-foot HDMI cable in Canada? Robert A. Willett: Name and address to follow. Colin McGranahan -Bernstein: I do have a serious question. Looking at obviously November,Best Buy I think led the way in a less intense promotional environment, or amore favorable promotional environment. What do you see so far in December inthe context of the overall holiday shopping trend, which looks like it startedwell on Black Friday but has decelerated since? And how are you thinking aboutthe promotional strategy through the fourth quarter, given your currentinventory position? James L. Muehlbauer: I’ll try to take that apart a little bit and maybe let someof my colleagues add some color. First off, you are right -- we did execute ourplans in the third quarter on Black Friday consistent with the environment thatwe had actually anticipated through most of the year. Our teams were muchsharper on our promotional offers and the execution of our store teams werephenomenal. We were very, very pleased with our top line results and moreimportantly, our margin results when we compared them to the previous year. As we look at the fourth quarter so far, the promotionalenvironment continued to be about what we thought. From a sales standpoint,early in December -- you know, importantly we’re trending within the range ofour predicted outcomes for the quarter and historically we know that ourcustomers are shopping later and later each year. Accordingly, we are planningand we are prepared for a strong finish for the holiday season, after what issomewhat a slower overall retail environment in early December. As you know, December is our largest earnings month of theyear and we look forward to giving you an earnings update during our Decembersales release. Colin McGranahan -Bernstein: Thanks, Jim and just to be clear on that, so trending withinyour predicted outcomes, so that would be for the fourth quarter kind of$1.70-ish implied in your full year guidance? James L. Muehlbauer: Roughly a -- we don’t give quarterly guidance, as you know,Colin, but I think if you looked at the fourth quarter, it would implysomething like $1.70 to $1.80. Colin McGranahan -Bernstein: Perfect. Thank you.

Our next question comes from Anthony Chukumba with FTNMidwest Securities. Please go ahead. Anthony Chukumba -FTN Midwest Securities: Thanks. Congratulations on a great quarter. I just had aquestion in terms of I guess what you are expecting for this upcoming weekend.It looks like the promotional environment, as you said, has been fairlyrational through the first few weeks after Black Friday. What are yourexpectations for this upcoming weekend and then just after Christmas? James L. Muehlbauer: As I mentioned earlier, our teams have been preparing forthe rush of the close of the holiday season all year long and this is the timeof the year where our teams certainly have a lot of energy around meetingcustomer needs as they finish their shopping lists. So we don’t commentspecifically on expectations for the last week or so other than the fact thatwe’ve purposefully made investments in inventory to have great in-stockpositions. We’ve got store labor planned to meet the needs that we see of ourcustomers and we believe that we are going to have a strong finish to theholiday season. Brian J. Dunn: I would just add that we are very confident about theposition our employees in the stores are in to not only execute the plan butthis year we really asked them to innovate around the plan and to make good,smart decisions in each of their localities and we are very confident aboutwhat that means. Bradbury H. Anderson: After watching the holiday seasons for a lot of years, as wesee things compress closer and closer to Christmas, it winds up becoming moreof an operational challenge than it really does becomes a promotionalchallenge, so it’s who’s in stock, who can process the business best thattypically has done better. And then you are really riding on the brand. One of the things we keep talking about, customer loyaltyscores, is the fundamental thing that drives that last minute choice is whereyou selected to buy probably some time ago. I think that’s been kind oflong-term and we feel like we are in a great position on all three of thosefronts. Robert A. Willett: Just to add on to Brad’s point, I think what you are seeingand what we are seeing as we go around stores at the moment is that theinvestments that we have been making, the work that the field teams have beendoing, the investments we have been making from a technology and supply chainperspective are really starting to pay dividends. The quality of execution inthe stores at the moment is just incredible. Even when you go in looking fortrouble, frankly you can’t find it. You can always find bits of things goingwrong in any business but overall materially, the quality of execution is justphenomenal and it’s getting better each year. Bradbury H. Anderson: I don’t know, Bob. If you go in looking for trouble, youcan’t find it? [Multiple Speakers] Shari L. Ballard: I’d say one thing, maybe it just underscores what Brad said;I think when we head into this weekend and the upcoming weekends, we still havea lot of traffic coming into the store. I mentioned it in my remarks but wehave a fair number of customers who come into our stores every day, looking todo business with us and leave without being able to do it because they can’tfind what they are looking for. So the store teams in particular the online teams, areworking really hard to get at the large percentage of folks that come inwanting to purchase and are leaving without that purchase. We see that as ahuge opportunity for us with the traffic we have today to close out theholiday.

Thank you. That was Jim, Brian, Brad, Bob, and then Shari.We’ll take our next question.

Your next question comes from Gregory Miller with MorganStanley. Please go ahead. Gregory Miller - MorganStanley: Thanks, everyone. I just wanted to get a little bit moreinto the pros and cons on gross margin in the quarter. Jim, you talked abouthow the promotional environment faded and then some puts and takes last year.How much of a positive was the lapping of promotional, particularly intelevision if you look versus a year ago? And then a follow-up on some of thenegative or pressures there. James L. Muehlbauer: It’s really hard to tell when we pull apart the promotionalenvironment last year versus the change in offers that we made but if you goback to the third quarter of last year, our gross profit was down roughly 85basis points and if I recall, 30 to 40 basis points of that was driven by therates we saw in the marketplace, particularly in home theater and notebooksduring that time. We’ve been very encouraged by the progress that we’ve madeboth last quarter and this quarter in our home theater space and I think itwould be a mistake just to solely -- and I’m not suggesting you are doing thisbut to attribute too much of that improvement to just the promotionalenvironments. Our teams have gotten much, much more insight on the typesof customer offers that drive the most interest in the marketplace and asyou’ve probably seen, we’ve been refining our HDA advantage program over theyear to get sharper on what our customers want and actually improving ourmargin performance in that space. So that was a very important driver that we see assustaining in the business. The promotional lever piece, you know, it may havebeen in the 15 to 20, 25 basis points range but once again, it’s very difficultto pull that apart when you look category by category, offer by offer. Gregory Miller -Morgan Stanley: Sure, but it’s fair to say that there was a portion lastyear that was just promotion but then there were other improvements made tostructurally improve gross margin in those categories. James L. Muehlbauer: Yeah, that’s correct. I mean, we talked about last year onthe call, we made some very specific investments to respond to the competitiveenvironment to put us in a position to win for both last year and goingforward. And as you’ll recall, our Q4 performance bore that out and certainlythe way we’ve been building share in some of our key categories this year hasbeen a continuing benefit of the statements we made in our choices last Q3. Gregory Miller -Morgan Stanley: And on the negative side, was that pressure simply mix orwas rate down within some of those categories? James L. Muehlbauer: In Q3 of this year, Greg, it’s primarily mix. Our gamingbusiness is on fire. It is an area of high, high consumer interest and wecontinue to have that business mix greater. We are going to see a -- it’s stillgoing to be dilutive in the next quarter but we’re going to see a little lessof that as we start to lap last year’s strong gaming performance when there wasgreater availability of some of the initial hardware launches. Gregory Miller -Morgan Stanley: Great. Thanks.

Thanks, Jim. Our next question, please.

Our next question comes from David Strasser with Banc ofAmerica Securities. Please go ahead. David Strasser - Bancof America: A quick question to follow up on that, on the comment ongaming -- as we look into next year, how should we think about this shift fromthe hardware to the software and when do you think that becomes more prominent?

Well, we’re looking pretty optimistically as we’ve seen alot of the cycles in the past. You know, you start out with usually a newhardware release and then follow with the software titles. They don’t usuallyhappen at the same time and we’ve had the same situation in this last 12 monthswith the releases. So we’re looking pretty optimistically for next year interms of the software that’s going to continue to come out, especially as weseek a new kind of software in the social and casual gaming areas, so the RockBand, Guitar Hero III, and then the excitement that we see for consumers aroundthe Wii. So we see a lot of enthusiasm from customers wanting to get a lot moreengaged in the gaming experience, not only on the individual level but withtheir families. David Strasser - Bancof America: So do you think that next year becomes a better grossmargin, maybe less comp?

I think there’s an opportunity next year for us to continueto figure out how is the customer using the solution in their household andthen what are the things that go with that solution? So as people bring in moregaming systems, how does that connect to their home theater system, what otheraccessories and things do they need? So we’re going to be doing a lot of thesame kind of work for the customer that TVs and notebooks has done aroundputting together the best offer that really makes sure the customer is gettingthe full benefit of what they are trying to do. David Strasser - Bancof America: And just a follow-up; one of the questions I keep getting isbusiness has been strong now, it’s been a consumer electronics holiday, butwhat about ’08? Just from a bigger picture as you’re thinking about your planfor next year, what do you think are the products that continue to gainmomentum versus products that maybe slowed down a little bit across the -- Bradbury H. Anderson: I’ll just make a macro comment that if you look at thebalance of our products, we are very optimistic about ’08, whether it’s in thecomputer field, television field, gaming field, there’s a lot of products thathave very good arcs. Plus combined with something we feel is that we are makingimprovements in our internal operation which allows us to I think actually growbusinesses at a faster rate than they might growth otherwise. David Strasser - Bancof America: If you the macro out of it, do you think there is a betterproduct cycle next year than there is this year, if you look at it on acombined basis?

I’d like to answer that in this way; what we’ve been workingon the last couple of years is really get an understanding of our customers’needs as they look at their products. We’ve been taking those needs to ourmanufacturers and really developing products that allow us to shift what we’retrying to build and we’re focusing much more on the output of those machinesand how do we create an experience for the customer. And I think as you readthrough our circular, what you are going to see -- what you’ve seen this yearand what you are going to see more of next year is both private label productsthat deliver a different experience but also our branded partners aredeveloping exclusive products for us that really give us an opportunity toaccelerate growth from a experience perspective that also allows us to reallyadd on all of the additional accessories that drive margin and sales opportunityfor us. Brian J. Dunn: Also, in conjunction with what Dave’s just said and Brad’scomments, what we are really enthusiastic about is what I believe is our mostpowerful growth engine and that is the fact that we are becoming more and moreskilled in connecting and hearing what our employees in the field who areconnecting with the customers every day have to say and turning that intoactionable strategies. We’re enormously enthusiastic about what that means fornext year and the 10 years after that.

I just want to add one thing about one thing we’re expectingto hear over the course of the next year -- 14 months from today, thetelevision system in the United States is going to switch from analog todigital on February 18, 2009. That’s going to happen. This next year, thedrumbeat of that change is going to go through the country and we believe ouremployees in our stores are going to be in a great position to help ourcustomers through that transition. It’s going to be one of the biggesttransitions that happened anyplace in the world of changing an entiretelevision system. And it’s complicated on one level and simple on one levelbut there’s going to be -- 300 million people are going to want to know what’sgoing on and we think Best Buy is going to be a great place for them to findthat out. David Strasser - Bancof America: Thank you very much.

Thank you, David. Next question, please.

Our next question comes from Gerald Feldman with TelseyAdvisory Group. Please go ahead. Gerald Feldman -Telsey Advisory Group: Just a quick question about the stores -- you mentioned inthe release that you now are going to open about 150 stores globally. I waswondering two things -- one is where exactly they will be? Are they mostlydomestic or is it more on the international side? And also, what does this meanfor next year? Does this mean you are going to open a little less than expectednext year or it just -- how does that play out? James L. Muehlbauer: Thank you for the question. A vast majority of the storeopenings that we are planning for this year are focused on our domesticbusiness. We’ll be opening up roughly 100 stores this year. That’s up from the90 stores that we forecasted at the beginning of the year. We’re very pleased that we can have store growth outside ofthe U.S. of approximately 50 stores, including our Canadian and ourinternational operations. We have not provided comments on what we think ourstore growth plans are going to be for next year. Suffice it to say, with someof the great opportunities our employees our unlocking in serving customers,some of the product cycle changes that Mike Vitelli and others just commentedon, we are very bullish on the store runway we have in front of us yet and thereturns we are seeing from our new stores planned. Gerald Feldman -Telsey Advisory Group: Great. Thanks.

Thanks, Joe and thanks, Jim. Next question, please.

Our next question comes from Chris Horvers with BearStearns. Please go ahead. Chris Horvers - BearStearns: Thanks and good morning. First, a clarification question; onthe shift in 3Q and 4Q, so are we talking about 300 basis points in domesticcomps -- is that what you would expect to impact, come out of 4Q? And anyestimate on what the EPS benefit was and then what comes out into 4Q? And then, just a follow-on on the spending type question --accelerating the store growth side in 4Q, that creates some SG&A pressure.As we look to ’08, is that an overall harbinger of what’s to come? James L. Muehlbauer: On the calendar shift question, not that we look at this atall, but the impact was actually 2.5% in the third quarter. We actually expectthat that will be a little less in the fourth quarter, just because of the sizeof the fourth quarter is so much bigger from a revenue perspective. That willmoderate to something closer to 1% for the total fourth quarter. As we look at the new store growth, we actually haven’taccelerate our openings in Q4. We accelerated our openings earlier in the year.I think I said in my comments that we had 72% more new store openings in thefirst half of the year. We really took it as a purposeful investment this yearto get those stores opened early so that those teams would have more time onthe ground before the holiday season. And we actually saw a benefit to doingthat in our sales in the third and we certainly would expect that to continueto the fourth quarter. So really, no -- if anything, we have fewer new store openingsin Q4 this year than we’ve had in previous years.

Jim, did you want to estimate the Q4 EPS impact of thatcalendar shift? James L. Muehlbauer: Thank you, Jennifer. I think the question on the calendarshift, we estimate that it was worth roughly $0.03 to $0.04 on Q3, so from anoperating income growth perspective, our reported operating income growth wasup 79%. I think if we exclude the calendar shift, it merely would have been up60% or so. Chris Horvers - BearStearns: So does that mean -- so I guess we might read this as, justto play devil’s advocate, that you are less optimistic about 4Q? James L. Muehlbauer: Less optimistic in what sense? Chris Horvers - BearStearns: From an EPS growth perspective. James L. Muehlbauer: I think given the shift in the calendar, which is going tohave a similar $0.04 impact on the fourth quarter, although we have obviously amuch larger base of EPS, and more importantly the loss of a 53rd week from lastyear, are the reasons we believe that the Q4 operating income and earningsgrowth will be less from a percentage standpoint. We are certainly not bearish on Q4. We’re playing our planout the way we intended all year long. Chris Horvers - BearStearns: And just one follow-up; could you remind us what the 53rdweek benefit was last year in 4Q? James L. Muehlbauer: The 53rd week was roughly -- I think it was $0.03 to $0.05is what we called out. Chris Horvers - BearStearns: Thank you very much.

Next question, please.

Our next question comes from Michael Baker with DeutscheBank. Please go ahead. Michael Baker -Deutsche Bank: Thanks, guys. I just wanted to ask about your Apple producta little bit. You mentioned it’s in 200 or so, 270 stores. How much of animpact is that having to the comps? Is that big enough, just that percentage ofthe stores to actually matter? And then, any insight into how you are going toroll that out? Next year you talked about some exclusive products. I imaginethat that’s one there, how that might roll out and what kind of compcontributor that could be in the future.

First of all, let me talk about the impact. I think there’sa -- I mean, we really don’t discuss balance of sale with regard to any of ourproducts but let’s say that from a standpoint, the Apple share has been growingin our stores as a result of our investment but more importantly, I think theimpact has been solid in terms of the overall performance of our employees inthose stores. They are excited to be able to offer another brand, another setof solutions to our customers and we’ve seen substantial growth not only in theApple component but across the entire PC area of the store as a result of thembeing in the store. As for next year, we have a very, very solid relationshipwith Apple. It continues to grow. They are very delighted with what it is we’vebeen able to accomplish with them and I think you’ll see sustained activity interms of many new stores being added to the stable each quarter as we goforward next year. Michael Baker -Deutsche Bank: Okay, thanks. That helps. And then one follow-up, if Icould; I’m just wondering, what was behind the strategy to now brand the hometheater installation also under the Geek Squad umbrella? Was that somethingthat your customers were telling you or just some color there?

It was just that simple. We asked our consumers what theythought of the Geek Squad brand and they already thought we were doing hometheater install, so the benefit of connecting that and build brand awarenessand take advantage of our service capability was to put that brand holisticallyover our mobile installation, our auto techs, or home theater installation, andour computer agents.

And customers think about it that way so it enables us toput a more singular message into the marketplace and enables us to get moreefficiency and higher awareness out of the Geek Squad brand. And just tying back some of the comments that Shari madeearlier about really building -- and Brian -- building up our loyalty with ourbest customers. Some of the things that we just talked about in terms ofservice and in-home installation and the Apple brand we’re finding are the --our customers want -- our best customers want more. They want the great brands.They want the brands that do more, like Apple, and they want to do more withthat experience, so that’s who we’re finding that is really attracted to ourservice offerings. As we go forward and we try to please our best customers whoare asking for more, you’ll see us pushing the edges of the differentbusinesses that we are in. Michael Baker -Deutsche Bank: Okay, great. Thanks.

Thank you. And those answers were from David [Ashan] andBarry Judge. Next question and last question, please.

Our last question comes from Gary Balter with Credit Suisse.Please go ahead. Gary Balter - CreditSuisse: There seems to be some confusion on Q4 and I thought itwould be useful on the call to just go over it, because I think -- you tell mewhere I’m missing something but to do it properly, we should be thinking aboutessentially the 155 from last year being almost 145 when we take out the extraweek, we take out the gift card, and we take out the shift in the week afterThanksgiving. So when we compare 175 to 145, that’s 20% up. That seems like apretty nice estimate. Am I missing something there? James L. Muehlbauer: Gary, I don’t think you are missing anything. We think ifyou look at the reported numbers and you adjust it for that 53rd week, we thinkwe are going to be in a 20% earnings growth for the fourth quarter, which weare very pleased with. Gary Balter - CreditSuisse: Okay, yeah, because that’s what we see but it seems likesome people are not appreciating that 20% up in a difficult environment so Iwanted to make sure everybody heard that. Thank you very much. James L. Muehlbauer: I appreciate that and we are -- we are not voting forcalendar shifts in the future. Thank you, Gary.

Thank you, Eric and thank you to our audience forparticipating in our third quarter earnings conference call. As a reminder, areplay will be available in the U.S. by dialing 1-800-405-2236, or 303-590-3000internationally. The PIN number is 11103881. The replay will be available inabout an hour and available until December 25th. You can also hear it on ourwebsite under For Our Investors. If you have any additional questions, please call Jenniferat 612-291-6110, or if you can’t get Jennifer, call Carla Haugen at612-291-6146, or me, Charles, at 612-291-6184, and reporters as always, pleasecontact Sue Bush, our Director of Corporate Public Relations, at 612-291-6114.And that concludes our call, so if we can please end the call, Eric.

Thank you, sir. Ladies and gentlemen, this does concludeBest Buy's conference call for the third quarter of fiscal 2008. You may nowdisconnect and we do thank you for using ACT conferencing.