Andrew Lacko - Senior Director of Investor Relations Brian J. Dunn - President, Chief Operating Officer James L. Muehlbauer - Senior Vice President and Interim Chief Financial Officer Robert A. Willett - Chief Executive Officer Best Buy International Mike Vitelli - Executive Vice President, Customer Operating Groups Shari L. Ballard - Executive Vice President, Retail Channel Management

Gary Balter - Credit Suisse Jack Murphy - William Blair Scot Ciccarelli - RBC Capital Markets Colin McGranahan - Sanford Bernstein Chris Horvers - JPMorgan Anthony Chukumba - FTN Equity Capital Markets Brad Thomas - Keybanc Capital Markets

Ladies and gentlemen, thank you for standing by. Welcome to the Best Buy's conference call for the third quarter of fiscal 2010. (Operator Instructions) I would now like to turn the conference over to Andrew Lacko, Senior Director of Investor Relations. Please go ahead.

Thank you, Alicia, and good morning, everyone. Thanks for joining us this morning for our fiscal 2010 third quarter earnings conference call. We have three speakers for you today. First, Brian Dunn, our CEO, will share with you his thoughts on the results we reported this morning and what we are seeing for the balance of the year. Second, Jim Muehlbauer, our EVP of Finance and CFO, will provide you with some additional color on our third quarter financial performance and provide you with an update on our fiscal 2010 guidance. Lastly, Bob Willett, our CEO of International, will provide you his thoughts as he prepares to retire at the end of the year. After our prepared remarks, we anticipate that there will be ample time for your questions. As usual, we have a broad management group here in the room with me today to answer your questions after we make our formal remarks. We would like to request that callers limit themselves to a single question so that we can include more people in our Q&A session. We’d also like to remind you that comments made by me or by others representing Best Buy may contain forward-looking statements which are subject to risks and uncertainties. Our SEC filings contain additional information about factors that could cause actual results to differ from management’s expectations. May I also remind you that as usual, the media are participating in this call in a listen-only mode. With that, I would like to turn the call over to Brian Dunn. Brian. Brian J. Dunn: Thanks, Andrew, and thanks everyone for joining us on our third quarter earnings call. Allow me to take this opportunity to wish all of you a Merry Christmas and a Happy Holiday season. I'd like to cover a few topics with you today. First, I want to spend a couple of moments reflecting on our third quarter and Black Friday weekend. Second, I'd like to give you an update on our market share gains and why we are so pleased with those results. And lastly, I'll spend a few minutes discussing our expectations for the fourth quarter. After that, I'll turn it over to Jim to add some more color on our Q3 results and provide you with an update on our financial guidance. Now let's turn to the numbers. This morning we reported quarterly net earnings of $0.53 per diluted share, which was better than our expectations for the quarter. Our results were driven by a 4.6% comparable store sales gain in our domestic segment, solid expense management, and a strong effective promotional strategy over the important Black Friday shopping weekend. Because of these strong results and reinforced by the strong traffic and sales performance we are seeing, we announced this morning that we have increased our non-GAAP diluted EPS guidance for the year to a range of $3.00 to $3.15. The Black Friday weekend, which goes by in what feels like a heartbeat, is the culmination of months of planning and marks the beginning of the most critical part of the year. It's important financially, of course, but even more importantly it represents millions of customer interactions over the course of a 48-hour period. It's an incredible opportunity to serve long-time customers and win new ones and I am very pleased to tell you that our employees once again set Best Buy apart from the competition. Our domestic comparable store sales for the month of November increased 8.4%, a phenomenal result given the challenging environment most retailers are experiencing. That month concluded with a double-digit comparable store sales gain over the Black Friday weekend with roughly half of the gain coming from an increase in traffic and the balance coming from higher average ticket. Our online business also experienced strong results. Revenues for the third quarter increased more than 20% versus last year as a record number of consumers visited bestbuy.com over the period. These results also highlighted the power of a multi-channel retailer as in-store pick-ups were up nearly one-third of total online sales for the quarter. Results like these are only possible through the joint efforts of our marketing merchant supply chain teams all working with a sense of shared purpose to support what I believe is the greatest retail team in the industry. Connectable devices drove most of our strength in the quarter and over the Black Friday weekend, with strong growth in notebooks and netbooks, smartphones, televisions, and digital SLR cameras. This performance simply reinforces our belief that these devices continue to move from discretionary items to products with real utility and customers' lives. While we are seeing very strong growth in devices that can be connected, only a small percentage of them leave our stores with a connection attached, with the notable exception of smartphones. We are not yet where our customers need us to be in the connected world, a situation that is both a challenge and a future opportunity. Gift cards are also a bright spot this year. Last year, as you might recall, customer demand for gift cards dropped dramatically, in large part we believe because of the bankruptcies and strife among retailers and financial institutions. We are very encouraged by the fact that gift card sales were up approximately 40% in November heading into the final two days and they were up approximately 100% on Friday and Saturday. As you might know, our customers historically spend over two times the value of a gift card when they come back to redeem it, a fact that has contributed meaningfully to our post-Christmas business in recent years. At the same time our teams were serving a record number of customers across all of our channels, the number of Black Friday customer complaint calls to our call center decreased 24% versus last year, which is on top of a 25% decline the previous year, an outstanding data point that illustrates how well we are taking care of our customers during this very busy season. Even though we believe our categories are more important to customers than ever, we need to make sure that we continue to add tremendous value to each and every customer who shops with Best Buy. We were and will continue to be sharp on price because we know that remains the non-negotiable table stakes in this very competitive environment. But beyond price, we wanted to make sure customers had the opportunity to buy all of their connected devices from Best Buy and have access to 18-month interest free financing on any basket over $249. We created a PC home makeover package that allowed customers to upgrade their desktop PC, monitor, notebook, netbook and router. And have the Geek Squad set it all up for $11.99. Despite the fact that this bundle is at a relatively high price point, sales have exceeded our expectations as customers were drawn to the solutions that the package created. This demonstrates that value does not equate exclusively to low prices -- low prices are table stakes but only the beginning of the value equation. Despite the economic conditions, customers are willing to spend money for solutions and experiences that create real value for them. Another example is in home theatre. We continued to help customers bring home a fully realized home theatre experience by offering free delivery, basic hook up and recycling of your old television on any TV purchase over $999. These are examples of customer-focused offers that have allowed us to deliver on one of our company's strategic priorities -- to take market share. Heading into this fiscal year, we believe that strong brands who are focused on creating solutions and value for customers will take a disproportionate share of customers wallets. I believe that in tough environments like the one we've been navigating this year, there will be winners and losers, and that the customer will decide the contest. Our market share gains during the quarter proved that this was true. The three months ending October 31st marked our 16th consecutive quarter of share gains as we believe that we gained approximately 230 basis points of market share in the U.S., once again gaining more share than anyone in our industry. The only quarter I can recall where we added more share was a 270 basis points we gained last quarter. These results were better than we expected in the period and do not reflect our strong performance in November, and especially the concentrated activity of Black Friday weekend. During that critical week, we gained share in almost every category we track. We estimate more than 600 basis points of additional share overall. These results provide us excellent momentum heading into the remainder of the holiday shopping season, where we historically have achieved our peak market share during the year. I am confident that will be the case again in fiscal 2010. Before I turn it over to Jim, I'd like to give you an update on how we are thinking about the fourth quarter. We believe Christmas will come later yet again this year, a trend that has emerged over the last several years, and [that plays to our strength], as we have proven time and time again that we can effectively serve our customers and serve them well while running at peak volume levels. Likewise, it reinforces a lesson that continues to play out the critical role that effective bundling can have on our model, not from the perspective of predicting or dictating exactly what solution is right for every customer but rather bundling the [art of the connected] possibilities for customers. That is the heavy lifting in our collective capabilities in merchandising supply chain and marketing can deliver better than anyone else in the industry and when that is combined with employees who can interpret and customize a bundle for a customer based on that person's unique needs, it's a powerful combination and one that I am convinced we have only begun to tap into. Our investments in the connected categories have been strategic and targeted, and I am very pleased with our inventory position heading into the holiday period. And our stores are certainly in a better holiday inventory position than they were last year. Let me leave you with a few final thoughts -- our performance last quarter and over the Thanksgiving weekend is a great example of the power of our organization, of our people, when we work together with singular focus. That's why I have such complete confidence in our ability to deliver the connected world for our customers. With all of that in mind, I want to give a heartfelt thank you to all of the men and women of Best Buy and our family of brands for the great performance of this past quarter and for the great experiences you are bringing to millions of customers around the world this holiday season. I would also like to thank all of our vendor partners for their support and continued innovation which is critical to the benefits we all derive from a connected world. Lastly, I would like to offer a profound thank you to all of our customers who have chosen us through the tough times of this past year. And with that, I'll turn it over to Jim. James L. Muehlbauer: Thanks, Brian and good morning, everyone. This morning I would like to provide you with an overview of the key items impacting our third quarter financial results and then provide an update on how we are thinking the balance of the year may play out. I will also discuss our fiscal 2010 guidance that we are very pleased to raise again this morning. As I have mentioned earlier, our third quarter net earnings of $0.53 per diluted share was ahead of our expectations. We are very pleased with our revenue and share trends in this difficult environment and are optimistic that the strength we see is sustainable for several reasons. First, we continue to see domestic volumes and traffic stabilize and improve. This give us confidence that the results we announced this morning are the result of something more than just easy year over year comparisons. Second, actions we have taken to focus spending on growth areas while lowering costs are providing benefits in both the domestic and international segments. Lastly, given our sales and operating income performance of this quarter, we believe we are finding a good balance between price and profit relative to the opportunities that exist in the current environment. Turning now to the third quarter results, revenue for the enterprise rose 5% to $12 billion. The revenue growth was a bit ahead of what we had assumed in our guidance and was the result of new stores and third quarter comparable store sales growth of 1.7%. Domestically, third quarter revenues increased approximately 9% from last year to $8.9 billion. The quarter saw a comparable store sales increase of 4.6%. We are encouraged to see strength in categories that are consistent with where Best Buy is going in the path to the connected world, such as computing and mobile phones. These categories have been particularly strong all-year and in the early holiday season, as evidenced by their low double-digit comparable store sales growth. Additionally, flat panel TVs saw low double-digit comparable store sales growth versus last year due to strong unit increases that were offset by declines in the average selling price. Partially offsetting these gains were continued low double-digit comparable store sales declines in music and movies and high single digit comparable store sales decline in gaming. Looking at how the quarter performed, we are encouraged that the domestic comparable store sales improved sequentially each month and finished strong in the month of November, as Brian mentioned earlier. Another bright spot was the 3% increase in domestic store traffic during the quarter, which marks the second consecutive quarter of traffic growth for Best Buy. Traffic gains and strong coordinated execution by our store and corporate teams resulted in an estimated 230 basis point increase in our domestic market share for the three months ended October. Overall, ASP was up slightly during the quarter as notebook computers, mobile phones, and televisions increased in the revenue mix. The net result was an average ticket that was up slightly for the quarter. Turning now to international, the segment third quarter revenue totalled $3.1 billion, which was approximately a 6% decline versus last year. The revenue decrease was driven by comparable store sales decline of 6.7% and the negative impact of foreign currency fluctuations. Excluding the impact of foreign currency exchange rates, the international segment's revenue decreased by approximately 4% versus the prior period. Best Buy Europe, which is in our comparable store sales numbers for the first time, reported an approximately 3% decline in comparable store sales. These results were in line with our expectations and resulted in slightly higher market share, as modest increase in connections was offset by increased promotional pricing. Canada experienced high single digit comparable store sales decline while essentially maintaining its strong market share. So while we were seeing relatively strength domestically, the consumer in Canada continues to experience more difficult headwinds of a challenging macro environment. In China, we experienced low double-digit comparable store sales decline. Turning now to gross margins, overall the third quarter our enterprise gross margin rate decreased 40 basis points to 24.5%. The domestic gross profit rate of 24.1% reflects a 30-basis point decrease year over year. Margins in the quarter were consistent with what we had expected and included a 20 basis point decline driven by mix, and a 10 basis point decline due to rate. On the whole, the mix decline primarily reflects continued strong sales of notebook computers. Helping to partially offset this negative mix pressure was growth in Best Buy Mobile and a reduced mix of lower margin gaming hardware. Looking at margin rates, we experienced a 10 basis point decline due to a couple of offsetting drivers. First, computers experienced a significant rate improvement in the quarter, driven by effective price management and smooth inventory transitions to the Windows 7 platform in November. This rate increase was essentially offset by higher promotional spending in appliances. For context, overall our year-to-date domestic gross margin of 24.5% now stands just 10 basis points below last year, driven primarily by product mix changes due to higher sales of computers. One of the benefits of delivering industry leading CE sales, market share performance, and strong cost containment all year long has been that much of the discussion on these calls and during meetings with shareholders focuses on our gross margin performance. Accordingly, I thought it would be helpful if we provided some preliminary context on our assumptions concerning margins in the balance of the fiscal year for the domestic business. Overall, based on the sales trends we experienced year-to-date, and our expectations for the fourth quarter, we currently expect the domestic gross margin rate to decline more than our previous estimate. Before we jump into the details, let's start with a couple of important points. First, our updated margin expectations are being driven by the mix impact of higher sales volume and lapping of unique items in the prior year. Second, our competitive pricing expectations regarding the promotional environment in the fourth quarter have not changed. Overall, we are pleased to report that we now expect higher fourth quarter domestic sales than our previous guidance. The mix of these incremental sales, however, is expected to be incurred in lower margin categories like computing and entry price point flat panel TVs, which also carry lower margins. As you will recall, we were out of stock on these TVs last year in the fourth quarter and commented at the time that we had left some sales on the table. In addition, as we discussed on last quarter's call, we will be lapping favourable incentives provided last year by vendors to help move excess supplies of their inventory as a result of the dramatic changes in the macro environment. Together, we currently expect these changes will result in higher gross margin dollars in the fourth quarter than previously expected but at a much lower total gross margin rate. We estimate that the total decline in the domestic fourth quarter gross margins could be in the range of 80 to 100 basis points. The international segment reported gross profit rate of 25.4%, which is a decline of 70 basis points versus last year. The decline was driven primarily by Best Buy Europe and was the result of a more promotional environment and increased sales mix to lower margin connections. Turning now to enterprise SG&A, for the quarter enterprise SG&A spend totalled $2.6 billion. This was approximately $20 million favourable to last year despite operating 127 more stores and was consistent with our expectations. On a rate basis, SG&A declined 120 basis points year over year. SG&A leverage across the enterprise, especially domestically and in Europe, was driven by tight cost controls and stronger than expected revenue performance. The third quarter SG&A rate and dollar improvement was also limited due to the significant increase in incentive compensation in our stores and corporate offices versus last year when we essentially had little incentives earned. So for the full year, we are still on track to deliver total SG&A dollar spend growth excluding FY09 acquisitions of approximately 1% to 1.5%, which is consistent with the guidance we have previously provided. So when one helicopters up, it results in operating income of $376 million for the quarter, which is a 37% increase versus last year. The domestic segment reported operating income of $353 million, or a 25% year-over-year increase. The international segment generated $23 million of operating profit, an increase of $32 million versus the prior year. Domestic performance was better than expected and in total, the international segment's results were in line with what we expected. A couple of quick items to round out the quarter before I move to our earnings outlook. First, as you noticed this morning, our effective tax rate of 25.6% in the quarter was lower than what we had previously contemplated. The reduction in the third quarter rate was due primarily to the settlement of tax items in our international segment. We estimate that these reductions positively impacted the third quarter's earnings by approximately $0.05, after the impact of the non-controlling interest adjustment in Best Buy Europe. As a result of this favourable tax impact, we now anticipate that our effective tax rate for the full year will be approximately 36.5%. Second, our U.S. comparable store inventory at the end of the third quarter was up approximately 6%, which was in line with our expectations. We are comfortable with the level and availability of product going into the fourth quarter. And finally, we were pleased to end the quarter with $350 million drawn on our existing domestic credit facility which was a full $1.4 billion lower than last year. This brings me to our earnings outlook. As I mentioned earlier, our third quarter performance was ahead of our previous guidance, and our market share and traffic trends continued to improve. To date, we have been appropriately cautious about the outlook of the U.S. consumer and the impact on our business. While we are certainly not expecting the low double-digit sales performance like we saw domestically during the Black Friday weekend to continue into the fourth quarter, we do see clear opportunities to grow our business further in the balance of the year. These data points give us reasons to be encouraged about what lies ahead. As a result, while a large portion of our annual earnings are still ahead of us, we are comfortable once again raising the bottom and top ends of our full-year guidance expectations. For fiscal 2010, we now anticipate that annual enterprise revenue will be $49 billion to $49.5 billion, with enterprise comparable store sales now projected to be flat to up 1%. As I mentioned a few moments ago, from a gross profit rate perspective, we now anticipate that our enterprise gross margin rate will be flat to up 10 basis points year over year, which is down slightly versus our previous guidance. The updated domestic business full-year gross margin rate is now projected to be down 30 to 40 basis points year over year. Putting it all together, we now expect our fiscal 2010 non-GAAP EPS to be in the range of $3.00 to $3.15, an increase of 4% to 9%, which excludes first quarter's restructuring charges of roughly $0.06 per diluted share. So to summarize, we delivered a very strong performance in the third quarter despite a difficult environment. Strong share gains continued and top line revenue increased, all while maintaining disciplined expense control. While we expect consumer spending to remain challenged, we have a better view of how customers are choosing to purchase CE products and solutions and which retailers they are trusting with these purchases. And finally, we are pleased to raise our full-year revenue and EPS guidance for fiscal 2010. With that, I'd like to turn the call back to Brian. Brian. Brian J. Dunn: Thanks, Jim. And now I get the pleasure to introduce Bob Willett, the leader of our information systems, supply chain, and international strategy. Bob is retiring from Best Buy at the end of this month and I've asked him to provide his view on our international business with a lens not only on this past quarter but also with an eye towards the future. Bob. Robert A. Willett: Thanks, Brian. Good morning, everybody. As I look ahead to my retirement from Best Buy in just a few weeks, I'd also like to look back a few years to a time when our former CEO, Brad Anderson, asked me to develop a strategy for Best Buy's international expansion. The opportunity was clear -- Best Buy's growth ambitions had us looking beyond the U.S. But the challenges were great -- different languages and cultures. However, the core question was how do we best replicate our single and most important differentiation, our blue shirts. Would we be able to export our unique employee and customer experience? We knew it would not be a quick or easy next step for Best Buy but the research indicated a significant opportunity if properly executed. The painstaking research we undertook mapped out a customer-centric platform for growth for our international expansion. Today, some four years later, I am reminded of a quote from a very wise man, Sir Winston Churchill once said however beautiful the strategy, you should occasionally look at the results. So let me provide some thoughts on the results to date of Best Buy's international expansion and the outlook before handing off the baton to Brian's capable hands. First, some quick comments on the current quarter. As Jim mentioned, international delivered $23 million in operating profit this quarter, an improvement of $32 million over Q3 of last year. Although top line results continue to be challenging, we are very pleased with our return to profitability this quarter. Our diligent efforts around managing international expense helped us achieve that profitability while continuing to invest in our growth. Long-term, I believe the seeds we have planted around the world will bear fruit for our investors, customers and employees. Whilst a single quarter is no way to assess an international performance, I am however very proud of the fact that strategically, we developed and then leveraged dual brand strategies which accelerated our international presence. Firstly, with Futureshop in Canada, then with Five Star in China, and most recently via our venture with Car Phone Warehouse in Europe. As a result, we have successfully grown the Best Buy and Futureshop brands and now have excess of 35% consumer electronics market in Canada. In China, since completing the full acquisition of Five Star last March, we are very pleased with the leadership collaboration and learning across brands, in particular our performance over the key holiday periods, including the most recent October Golden Week. Whilst there are significant challenges, I believe the opportunities for profitable growth are very promising. Lastly, our venture with Car Phone Warehouse resulted in Best Buy Mobile, the mobile phone sales and operating model that is now scaled across all Best Buy stores in the U.S. and Canada. Today, it's one of our most successful growth stories across the enterprise. Next, we've leveraged our various brands internationally, most notably is Geek Squad, which is operational in every country in which we do business. We've also methodically expanded the Best Buy big box concept to new countries. Today we have 64 Best Buy stores in Canada, six in China. In Mexico, we will have five stores by year-end. In Q4, we will open the first Best Buy store in Turkey. That brings me to Europe -- as the sponsor of our partnership with Car Phone Warehouse, and our big box entry into the U.K., I am looking forward to our big box openings next spring. Given my home-grown awareness of consumer electronics retailing in Britain, I have every confidence that the U.K. consumer will absolutely be delighted by the Best Buy experience. The U.K., after all, is a bit of a service desert, with the odd exception. In the U.K., the connected world strategy is evidenced by our 17 Wireless World Car Phone Warehouse stores, where we've combined CPW and Best Buy capabilities to better serve our customers and their changing needs. Those stores combine Geek Squad with an expanded product mix and the prospect of renewable long-term revenue streams from the products and services we provide. I believe this holds the key for the shape of things to come. I'd be remiss if I did not mention my responsibilities for Best Buy supply chain and information technology. In supply chain, during my time here, we've converted from a product push to a product pull system, a major achievement for Best Buy. In IT, I am very proud of having built the infrastructure that has supported our growth over the past six years. Not once during that period did our point of sales systems fail us, even in the crush of holiday. As I move on, I can say with great confidence that we have the right leaders in place throughout the enterprise, Best Buy international, supply chain, IT, and Best Buy Mobile. I want to thank Brian, Brad Anderson, Al [Lensmeier], and Dick Schultz, along with all the other leaders I've worked with. I've learned from them, we've had fun, and I hope I've left them with a few ideas and the odd inspiration. I look forward to seeing the company grow to the $80 billion that I know Brian has set his sights on and if anyone can achieve it, Brian can. Finally, last but not least, to all of our employees listening, I want to personally thank you. I also want to wish you the best of success. I believe Best Buy is the finest people company in the world. This is the place where employees can make their dreams come true and as our employees' dreams come true, so do those of our customers and our many shareholders. In closing, it has been one amazing journey for me and I intend to remain a shareholder, so I plan to keep a ringside seat as this remarkable journey continues. Thank you. Brian J. Dunn: Thank you, Bob. I am so glad you are going to have that ringside seat. And I should also note where Bob referred to Great Britain as a service desert, we thought that that was a service dessert. However, I do want to add my personal congratulations to you, Bob, and my deep, profound thanks on behalf of the 168,000 men and women of Best Buy and our brands. I want to thank you for your energy, your creativity, your tenacity, and your commitment to making this enterprise a better place every single day, so thank you very much and congratulations on your well-earned retirement which I am sure will last a month. And finally, before we open it up to Q&A, I want to offer my sincere wish to everyone listening for a warm and wonderful holiday. Happy Hanukkah, Joyous Kwanza, Merry Christmas and a prosperous New Year. And with that, we are ready to take your questions.

(Operator Instructions) Your first question comes from the line of Gary Balter with Credit Suisse. Gary Balter - Credit Suisse: Thank you. First of all, Bob, congratulations on your successful career and enjoy the retirement. It was a pleasure working with you in the times we had together. And I also want to note that the stock was rising when you were speaking, so maybe you should keep on speaking. Brian J. Dunn: Well then let's go right back to Bob. Gary Balter - Credit Suisse: A question on -- one question and than a follow-up -- you talked about the gross margin and expecting a lower gross margin and one of the things you mentioned is the vendor monies but the vendor monies you knew about, and you also mentioned the competitive environment isn’t really changed, so what's changing in the gross margin outlook? Is it all mix that is causing it? James L. Muehlbauer: It's principally mix, you're right. We've talked at the Q4 last year and during our last quarter call about the challenge of lapping the margin performance we saw in Q4 of last year. For context, our domestic business gross margins in Q4 of last year were up 40 basis points, so we knew that was going to provide a headwind. That's not new news but as my roadmap, where we finished Q3 and what we are seeing Q4 is, certainly it's going to be kind of a sequential phenomenon lapping those back year vendor monies. More importantly, as you called out, and we called out in the script, we are -- and we are very happy that we are going to drive more sales in the quarter than we originally anticipated and those sales are going to come in categories like computers and opening price point televisions that have been strong during Q4 and we anticipate being strong in the -- I'm sorry, in Q3 and we anticipate being strong in Q4 as well. So the margin dollars in the business in the quarter are higher than we anticipated. They are just coming in spaces that have lower overall rates. Brian J. Dunn: You correctly called out that we are able to predict a number of those things, like vendor support last year. One of the positive surprises, although it shows up in margin rate pressure, is the continued sort of extraordinary growth in our computing space and our rapid, continued rapid growth in share in computing. So while it shows up as a margin rate issue, we are actually very pleased that customers continue to gravitate to Best Buy to make that connection with their computing, specifically around netbooks and notebooks. Gary Balter - Credit Suisse: And the follow-up is people -- fourth quarter is kind of accepted and it sounds like it is going to be a good fourth quarter. I think the bigger issue for investors at this point is the question of next year and the comparison when you don’t have the easy Circuit City compares and what -- how do we think about gross margin, how do we think about expense opportunities, how do we think about international? And I know you are not giving guidance at this point but how should we be thinking about some of those key items? James L. Muehlbauer: Gary, you're right -- we're not in a position that we are going to provide guidance but I think if you go back to the conversations we've had all year long, we saw an extraordinary opportunity going into this year to capitalize on the strengths of the Best Buy model, not only the products that we have across a wide spectrum of CE but also mirroring that to the services capabilities and really focusing that on the connected world. So we purposefully set out this year to grow our business profitably and gain market share, which was an extraordinary opportunity for us this year. Brian J. Dunn: To reiterate Jim's point, we are not in a position to give you new guidance. But we announced today our 16th consecutive quarter of share gains. We have no intention of remediating those gains and we in fact have every intention of continuing to grow our business and our share. Gary Balter - Credit Suisse: Thank you very much.

Your next question comes from the line of Jack Murphy with William Blair. Jack Murphy - William Blair: Thanks. I wonder if we could get back to international, to specifically on the quarter. And if you could maybe give us a little more color on the specific sources of sales weakness -- what are some of the specific plans you have for potentially turning that around, particularly in Canada, understanding there's a macro drag there. And also, as you look forward with Bob having retired, could you talk a little bit about the risk of management distraction or how much top management time you really need to be spending outside of the U.S.? Thanks. Brian J. Dunn: I'll start with that and then I'll turn it over to Bob and perhaps Sean can give some color commentary there. As Bob came to me and discussed his retirement, we would certainly not be -- we wouldn’t be letting Bob walk out the door if we didn’t have every confidence that we had a tremendously strong international team that has worked with Bob and in support of our individual countries around the globe, so my confidence is extraordinarily high but we are going to be able to continue to manage that business in such a fashion that it does not create a distraction or take our eye off the largest piece of our business, which is the domestic [mall]. And as far as Canada, I just mentioned we have folks up there that are working very hard in a tough environment that don’t have the benefit of a competitor going out, who have really done a very nice job holding their share in a very, very challenging environment. Our share gains are circa 35 -- our share, excuse me, Canada continues to run just north of 35% which is a very extraordinary share to hold and hold over a sustained period of time. And I think our team there is actually navigating a very difficult environment very well. Bob or Sean, would you add any further context to that? Robert A. Willett: Just to give you a quick round-up, as Brian said, just to reinforce his point, we've got some very strong leadership around the place. Yes, there are still some gaps to fill but we've got some very strong leadership and to Brian's point, I wouldn’t be doing this if we didn’t have good leadership in place and that you just have to trust us and you will see in the results. In terms of Canada, as Brian said the business is holding its share. And you've got to remember there's distinct differences between the two brands in Canada but we are holding our share. But the market up there is definitely following the U.S. -- the overall economy as we heard yesterday from one of the eminent global economists from Deloitte's, the economy up there very much follows the U.S. It is slowly starting to recover but we think it's going to be probably a year behind the U.S. We are doing all sorts to grow our margin and share of wallet but -- and I'm comfortable that we've got some good plans in place to do that. In terms of China, we changed out the leadership there and we are seeing some really good growth there, which you are going to hear about in the next quarter, as you know. China has 60 days lag time behind these results so you will hear about Golden Week as the next quarter unfolds. We've had some changes there. We have some more changes to add there as well but we are pleased with Five Star, with Best Buy, we've still got some work to do in terms of the correct model but that work is coming on and I am pleased to say again that we started to see things improve. But China has also had some significant changes in its own macro market place. I mean, tier 3 and tier 2 cities are actually starting to do well as a result of the government stimulus package and we are really taking advantage of that. We are not going to disclose the sort of participations of sales that we are getting from it but it's really good and we are starting to see that same impact now in Shanghai and we are starting to see Shanghai come back. And in terms of -- so overall I'm very confident about the fact that we've got the roots in place there. We are going to go carefully but it's -- the plans are in place. And in terms of Europe, we are starting to see, as you heard from Jim, improvements in connections. We don’t talk too much about the mix but we have seen a significant shift from post-pay to pre-pay and upgrades but we are very, very pleased with our share, even though this is a business that doesn’t traditionally focus on comps, it focuses on margin. But now that we are starting to annualize, I am confident that the work we are doing around the 17 wireless world stores where we are seeing the best of Best Buy in terms of Geek, in terms of gaming, in terms of PCs, coupled with their strengths in mobile, we are starting to see that work well and we are also starting to see that now flow into Canada. Canada, we've now converted all the stores there into mobile and we are seeing really major, major growth and we are only halfway through Futureshop and that will continue next year. So there's some great plans in place. Together with the work [inaudible] is doing around private label exclusive brands, we are starting to build that up in all markets. We've still got a long way to go, frankly. We are still quite immature when it comes to exclusive brands private label. But -- so there's some good stuff and we are very confident, very confident. Jack Murphy - William Blair: Great. Can I just make one quick follow-up on just the international gross margin, if Jim could maybe give us a sense of how much has contributed from the individual geographies, at least directionally? Is China still most of the drag? James L. Muehlbauer: The structural model in China obviously operates at a much lower gross margin rate. It also operates at a much lower SG&A rate overall, so from a percentage standpoint, the drag is coming from China. The propensity of the dollars of course is both in Europe and in Canada. Jack Murphy - William Blair: Thanks.

Your next question comes from the line of Scot Ciccarelli with RBC Capital Markets. Scot Ciccarelli - RBC Capital Markets: I guess when you guys -- it looks like you are raising your fourth quarter enterprise comp projection to the mid to even upper single digit range, which is obviously a meaningful acceleration. But to clarify, is all that difference at least relative to prior expectations coming from computing and small flat panel TVs? Or is it broader than that? Because this really goes back to the gross margin issue and I think people just want to get their arms around exactly what -- how many different changes we are looking at in terms of the complexion of the sales mix here. James L. Muehlbauer: It's principally driven by the higher incremental sales expected in those categories. We have seen stronger growth in the categories overall but I'd say the principal drivers are the ones we called out in the release. Scot Ciccarelli - RBC Capital Markets: Okay. And just to clarify, the November 8.5% comp, is that against the calendar adjusted figures? Because I remember there were some calendar -- some funky things with the calendar last year. Thanks, Jim. James L. Muehlbauer: Great memory, Scot. For context, last year I recall a reported comp in November was I think roughly negative 8% for the domestic business. This year, our reported comp as Brian mentioned is 8.4. Last year's number was deceiving because it was based on a period two years ago where we had an extra week in November. So as I look at the real comp last year, I think we quoted that it was probably more in the range of roughly flat in the month of November for our domestic business. So to simplify, on an adjusted basis, last year's comp was about flat; this year's plus 8 in November. Scot Ciccarelli - RBC Capital Markets: All right, so that's the comparison -- okay, great, thanks, guys.

Your next question comes from the line of Colin McGranahan with Bernstein. Colin McGranahan - Sanford Bernstein: I just wanted to come back to gross margin. First in the fourth quarter, Jim, can you give us any sense of the breakdown between that 80 and 100 basis point pressure between rate, mix, the impact of anniversarying the vendor incentives? Just a little bit more color because obviously it's a bigger number than I think we would have expected. And then, longer term thinking about again, not looking for guidance but just thinking about how the business is growing and what you are seeing in product categories -- it seems likely that you will continue to face some gross margin mix pressure. I'm wondering what you can do from an enterprise perspective as an offset as we start to think about putting the model together for next year. How quickly can the connected products grow? What have you seen with the remodels that might be giving you some hope there? Just in terms of the persistent mix headwinds and potential offsets to that. James L. Muehlbauer: So why don’t I take the front-end piece around what we expect to see sequentially in the margins from Q3 to Q4 and then I'll turn it over to Shari and Mike maybe can talk about how the model is evolving into next year. So as I look sequentially from Q3 to Q4, where I see that margin change coming from is primarily in mix. And if I just look from a run-rate standpoint, if we're down 30 basis points domestically in Q3 and we are going to be down 80 to 100 in Q4, I'd put 75% of that change in the volume camp around higher sales of notebooks and entry price point TVs, Q3 versus Q4. I'd put the balance of the 25% in anniversarying the unique buying opportunities we had last year. Colin McGranahan - Sanford Bernstein: Okay, that's helpful. Thank you.

And looking at the categories and how they are moving and how that impacts us as we go forward, very consciously as we went into this year, we made a decision that when we historically had looked at managing our mix at different price points in computing and television, that we were aggressively going to go out and try to sell units at all of the price bands. And we've been enormously successful at that. The increases in units in both of those two categories year over year has been growing by quarter, growth in each of the unit bases. We look at that as a tremendous opportunity for us to increase our ability to actually connect those units now that we've got those tens of millions in each category. We are getting improvements there now. We are doing some tests in areas in television where we are connecting people to digital cable and digital satellite and those rates are increasing, so the probability of us having more connected TVs next year than this year is something we are confident in. A majority of TVs at the high-end next year are going to have Internet connection capability, so the ability for us to bring broadband out of the computer department and into the home department is a unique opportunity for us and to help consumers be able to get their Internet connection to their television, which is usually not a thought most people have today. And the millions of computers that we are selling, we believe there's an enormous opportunity for us to bring mobile broadband to those computers as people want to surf and connect away from their desk and away from their home office and even away from their couch. But literally as they are moving around the city and the country. We think those two opportunities are what lie ahead of us next year in those areas, in addition to the increasing business that we see continuing to grow in smartphones, which is the third screen of that triangle. Colin McGranahan - Sanford Bernstein: Okay, and then just a final follow-up on that -- is rate within the home office category, even within the PC category, is rate improving or degradating? James L. Muehlbauer: Yeah, all year long, Colin, it's actually been improving. I think the teams have done a good job overall of bundling those services along with those units. As Mike mentioned, we are mixing into some lower price point units in that space but in the home office category, which includes certainly mobile phones and the notebook and computing business, we've seen improvements in rates in total. Colin McGranahan - Sanford Bernstein: Okay, thank you. Good luck.

Your next question comes from the line of Chris Horvers with JPMorgan. Chris Horvers - JPMorgan: A quick follow-up on the TVs -- can you remind us when you got in stock in the smaller screen sizes or just overall availability, was that first quarter this past year? And then curious your thoughts on pull forward of demand -- you have Windows 7 October 23rd, clearly very successful. We've heard that from a number of retailers. You had Call of Duty on November 10th. You had a fantastic Black Friday, Circuit's not around, so I'm just curious if people were in the stores earlier in the quarter than they would normally be, is that something that you thought about in your outlook?

On the television side, last year we weren’t getting back into good inventory positions until the middle of our first quarter last year. We went through, because of our aggressive adjustments to the economy, we went through a really tough January, February, and even early March and April. And it took us that long to the point that we felt comfortable again. So the -- having that inventory now in January, February, and March is going to put that pressure that we described in the first -- the fourth quarter this year and in TV alone, just a little bit in the first quarter of next year. But we are planning for that. And your point about the quarter and the way it is shaking out, not only is it happening because of the way the vendors are introducing product at different points so that it all doesn’t crush onto one or two weeks, we've actually planned our promotions that way as well in trying to take the Black Friday from a couple of days into a week and then actually into a month long process beginning at the earlier part of the month with some of our rewards on silver events, and then staging that throughout the entire month of the year and then moving that into December as well. So you are right in that we are trying to make it a longer period of time rather than just a week here and a week there. Does that answer your question? Chris Horvers - JPMorgan: Yeah, I mean -- is there anything then -- I mean, the gift card sales are extremely encouraging. Is there anything then that, you know, the gaming, that maybe the gaming might be a little weaker than in the fourth quarter or something on the PC side where you have people waiting, you had the surge in demand and maybe that slows into December, January, February? Shari L. Ballard: I think from a PC perspective, I think we actually saw that prior to the Windows 7 release more so than we did after where we saw the demand really slow up as customers were waiting for the Windows 7 release. So I think that it probably contemplated prior to November rather than something that was a pull-forward from December. Chris Horvers - JPMorgan: Okay, I understand. And then a question for Brian -- clearly there's always a lot of innovation. It's really very important as you -- given the sector that you operate in, how should we think about your initial thoughts on spending next year? You are starting to anniversary the big cost cuts. Is -- innovation is always necessary. Is it something that you've held back on and the positive comps encourage you to maybe be a little looser with opportunities?

We are certainly not going to hold back on innovation but it's always -- it's a portfolio, it's a balancing act. You are going to see us maintain the discipline that you have seen from us over the last years around capital and capital allocation and the return we are looking for from our capital but you are also going to see us invest in innovation where we think it can be meaningful for the customer and where our employees lead us to. So I would not interpret our approach -- look for us to be efficient and effective and you should look for us to continue to innovate around the customer and his or her needs. Chris Horvers - JPMorgan: Thank you.

Your next question comes from the line of Anthony Chukumba with FTN Equity Capital Markets. Anthony Chukumba - FTN Equity Capital Markets: I don’t want to beat a dead horse on this gross margin question but I just have a question related to the entry level flat panel TVs. I mean, when I've been in your stores it seems with the entry level TVs, a lot more of it is your own [Dynex] and Insignia brands and so I would have thought that those would maybe have sort of comparable or maybe even higher gross margins than larger TVs by some of the national brands, say like a Sony or a Samsung. So am I sort of thinking about this the right way or is it just a case that they don’t have higher gross margins, even though they are private labels post national brands?

They have higher margins than comparable products that we would buy from third parties -- from other vendors. So if we were buying the same product, meaning its specs and its size, in the same price band from a vendor of any name, the margins are higher. But an entry level Insignia TV is going to have a different price point than a high-end LED TV from Samsung. Anthony Chukumba - FTN Equity Capital Markets: Okay, no, I understand the price point but it's actually going to --

The margin rate, the margin rate. Anthony Chukumba - FTN Equity Capital Markets: Okay, got it. That makes a lot of sense. Thank you.

Your next question comes from the line of Brad Thomas with Keybanc Capital Markets. Brad Thomas - Keybanc Capital Markets: I just wanted to follow-up on that television category as well. I know you talked about this a little bit earlier but could you just talk a little bit more depth about what you are seeing in terms of the average selling price and unit sales, as well as some of the traction from newer products like the LED TVs? And as we think out to 2010, how should we think about the benefits that you see from some new products such as 3D?

Thank you. We are thrilled again with the unit increases we are seeing in television. Part of that is offset -- as Jim said earlier, we had low double-digit comps in television. We had mid-double-digit comps in units. That's offset by about a 17% decrease in average selling price. What we also look at is dollars per inch, which is when you look at all the different machinations of that, that's down about 22% versus last year. It was running about minus 17, so the price per inch was accelerating the decline as the largest screen sizes started to come down, made them more affordable. That's why we believe our units are growing. So we are pleased with that and we actually see our average screen size and our ASP going up and both of those are higher than the industry averages based upon the assortment that we have and the way that our overall personnel plus Geek can make buying a large TV a much simpler and more pleasant and fulfilled experience. As we go into next year, I think you are 100% right -- what we are seeing is each year, the industry strives to bring something new that brings some excitement and some profitability into the category. A few years ago, it was flat panel TV and plasma. Then it turned into okay, we are going to have full HD and everything was 1080p. This year it's LED and faster refresh rates. Next year, as you mentioned, it's going to be 3D -- that's going to be a significant increase. I'm hoping James Cameron's movie when it opens Friday is an outstanding success and hundreds of millions of people see it. I think there are continuing things that we have seen on the horizon that continue to make the home theatre experience exciting and an opportunity for us. Brad Thomas - Keybanc Capital Markets: And while it's still early, do you have a sense for how many 3D TVs you end up having on your shelves in early or late next year?

We don’t have a specific number yet. We are still in those discussions. Every manufacturer has got something exciting and we will be finalizing our assortments in the next couple of months. Brad Thomas - Keybanc Capital Markets: Great. Thanks so much.

And I think that concludes the questions. Thank you, everyone, for participating in today's third quarter earnings conference call. As a reminder, a replay will be available in the United States by dialling 1-800-406-7325 or 303-590-3030 internationally. The personal identification number is 4188285. The replay will be available today through next Tuesday, December 22nd. You can also hear a replay on our website under For Our Investors. If you have any additional questions, please contact Wade Bronson at 612-291-5693, or myself, Andrew Lacko, at 612-291-6992, and reporters should contact Sue Bush at 612-291-6114. Thanks, everyone again for joining us and have a happy holidays, and that concludes our call.