Mollie O'Brien - Best Buy Co., Inc. Hubert Joly - Best Buy Co., Inc. Corie Barry - Best Buy Co., Inc.

Matthew J. Fassler - Goldman Sachs & Co. LLC Scot Ciccarelli - RBC Capital Markets LLC Brian Nagel - Oppenheimer & Co., Inc. Michael Louis Lasser - UBS Securities LLC Daniel Thomas Binder - Jefferies LLC David A. Schick - Consumer Edge Research LLC Gregory Scott Melich - MoffettNathanson LLC Joseph Isaac Feldman - Telsey Advisory Group LLC Christopher Horvers - JPMorgan Securities LLC

Ladies and gentlemen, thank you for standing by. Welcome to Best Buy's Q4 Fiscal Year 2018 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. As a reminder, this call is being recorded for playback and will be available by approximately 11:00 a.m. Eastern Time today. I will now turn the conference call over to Mollie O'Brien, Vice President of Investor Relations. Please go ahead. Mollie O'Brien - Best Buy Co., Inc.: Good morning, and thank you. Joining me on the call today are Hubert Joly, our Chairman and CEO and Corie Barry, our CFO. This morning's conference call must be considered in conjunction with the earnings press release we issued this morning. Today's release and conference call both contain certain non-GAAP financial measures that exclude the impact of certain business events. These non-GAAP financial measures are provided to facilitate meaningful year-over-year comparisons, but should not be considered superior to, as a substitute for and should be read in conjunction with the GAAP financial measures for the period. A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures and an explanation of why these non-GAAP financial measures are going to useful can be found in this morning's earning release, which is available on our website, investors.bestbuy.com. Today's earnings release and conference call also include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements address the financial condition, results of operations, business initiatives, growth plans, operational investments and prospects of the company and are subject to risks and uncertainties that could cause actual results to differ materially from such forward-looking statements. Please refer to the company's current earnings release and SEC filings for more information on these risks and uncertainties. The company undertakes no obligation to update or revise any forward-looking statements to reflect events or circumstances that may arise after the date of this call. As a reminder, the fourth quarter we are reporting today includes 14 weeks compared to last year's 13-week quarter. We estimate the extra week was approximately $760 million in revenue and approximately $0.20 of non-GAAP diluted EPS. The extra week is excluded from our comparable sales calculations. I will now turn the call over to Hubert. Hubert Joly - Best Buy Co., Inc.: Good morning, everyone, and thank you for joining us. I will begin today with a review of our fourth quarter and of our fiscal 2018 annual performance, and then provide a preview of our fiscal 2019 priorities as we continue to implement Best Buy 2020: Building The New Blue strategy. I will then turn the call over to Corie for additional details on our quarterly results and our financial outlook. So, today we are reporting a fourth quarter Enterprise comparable sales growth of 9% and non-GAAP diluted EPS of $2.42, which is up 25% compared to last year. These are very strong and better-than-expected results. The strong comps are the results of a combination of factors. First, strong execution of our strategy combined with better product availability; second, a continued healthy consumer confidence and positive macro conditions; third, strength in the gaming category; and fourth, a favorable competitive environment, as we benefited from the exit or decline of certain competitors. Let me elaborate. Customers are responding very positively to our Best Buy 2020 strategy. We are gaining market share and continuing to improve our Net Promoter Scores across the company in a material fashion. Specifically, during the quarter, we continued to demonstrate our ability to partner with vendors to commercialize new technology across a broad spectrum of products. This strength was supported by an effective 30-day promotional plan that customers found compelling. In parallel to this, a key driver of our success is the mobilization of the company, particularly the associates on the front line, who are on a mission to enrich peoples' lives through technology. This comes to life in a very powerful way in our stores where I am impressed by the level of engagement and proficiency of our associates, their desire and ability to truly connect with customers, understand what they're trying to accomplish and then find a solution that will satisfy their needs. We're also making progress online where we have continued to streamline the buying process, enabled faster and more efficient delivery, and further enhanced the buy online, pick up in store experience for our customers. Online comparable sales increased 18% in the fourth quarter and were 20% of our total domestic sales. As I mentioned earlier, product availability was much better this year and was a factor in driving our strong growth. You may recall that last year, we had both product recalls and product availability constraints across multiple vendors and categories. This year, product availability was much better across the industry. And additionally, we deliberately invested in having more product in stock and available for customers. From a profitability standpoint, we grew operating income dollars by 10% on revenue growth of 14%, which led to a 20-basis point decline in the operating income rate. Let me break this down for you by focusing on the Domestic segment, which makes over 90% of the Enterprise. So, in the Domestic segment, we delivered a flat gross profit rate with SG&A expenses, while SG&A expenses grew slightly more than the revenue growth rate. This is due first to the increase in incentive compensation expenses for more than 85,000 of our store and corporate employees as a result of the very strong performance this year; and second, to the investment we have made in the business, partially offset by efficiencies and cost savings. At the EPS level, our Q4 non-GAAP EPS grew by 25%. This result was positively impacted by a lower tax rate due to both tax reform and other discrete items. Turning to our full year results, our performance in fiscal 2018 was strong. We grew our comparable sales 5.6%, expanded our non-GAAP operating income rate by 20 basis points, and increased our non-GAAP EPS by 26%, which are a materially better result than what we expected when we began the year. We returned $2.4 billion to our shareholders via share repurchases and dividends. We continued to improve our Net Promoter Scores and drive market share gains, proof that our strategy is resonating with customers. We reduced store employee turnover and increased overall employee engagement. And we made significant progress against key Best Buy 2020 initiatives. For example, last September, we launched our new In-Home Advisor program nationally and significantly expanded our Total Tech Support pilot. We continued to upgrade the experience in the stores and online, and we began investing in the transformation of our supply chain and other key systems and capabilities necessary to enable our strategy. And so, I want to enthusiastically thank our associates for their great work in delivering these results. The level of energy and dedication to serving customers that I see across the company is very inspiring. Now looking ahead, our focus is on the continued implementation of our Best Buy 2020 strategy. We continue to believe we have a material opportunity ahead of us to grow the company. We also know there continues to be real pressures from areas like wages, supply chain and channel shift. In that context, our mindset has not changed. We are playing to win and, of course, the strategy we outlined in September has not changed. The purpose of our Best Buy 2020 strategy is to enrich lives through technology. As we outlined last September, we plan to fulfill our purpose and grow the company by expanding what we sell and evolving how we sell and building the key enablers that are needed, while continuing to take cost out. Let me highlight a few of our fiscal 2019 priorities along these lines. First, in fiscal 2019, we will continue to ramp up our In-Home Advisor program as we add advisors and improve the related tools and systems that help them do their jobs. Second, we are planning a nationwide launch of our Total Tech Support program this coming spring. As a reminder, Total Tech Support is a new Geek Squad offering we began testing last year. We provide support for all of the customers' technology, no matter where and when they bought it. We believe that customer support needs are often not limited to a specific product. The need now is to have all of their technology work together. This support is available to customers 24/7 online, in-store and on the phone. The price of this service is $199 per year and includes discounts on other services like in-home services and extended warranty programs. Third, we will continue to develop the proficiency of our associates and their ability to deeply understand and address customer needs. Fourth, we will continue to streamline the online buying process for our customers. Online shoppers need to be able to seamlessly navigate our site and quickly and intelligently narrow their product or service selection. For example, we will be further enhancing the search functionality with natural language capability, so customers can find what they need by simply typing in phrases like best laptop for students, quiet dishwasher or sturdy camera. Fifth, from the multi-channel standpoint, building on our success with in-store pickup, we continue to test new and convenient ways for customers to get their orders. For example, we are piloting a new feature on our mobile app that allows customers to tell us when they are on their way to pick up their large TV or major appliance, so we can have it ready for them when they arrive and they won't have to wait at the store pickup counter for an associate to bring the product from the backroom. And we are also testing lockers and curbside pickup solutions. In addition, we will continue to explore and invest in a range of digital solutions such as voice assistance across a variety of customer touch points as well as personalization initiatives. Now to successfully expand what we sell and evolve how we sell, we are investing in a range of enablers as we described in September across technology, stores, supply chain, new business initiatives and cost take-out projects. For example, we are continuing the technology investments we began last year in Enterprise customer relationship management and knowledge management tools, expanding the usage from our In-Home Advisors to associates across our services organization and our call centers. This will help us build a more seamless, more effective experience for our customers and paves the way towards a more relationship-based approach to the customer experience we offer. We're also building out a new services platform to help power our Total Tech Support offering and provide the ability for customers to get easy and quick access to our Geek Squad tech experts, including a new app with video chat capability. In stores, we are building a number of digital tools that are designed to relieve customer pain points like streamlining the checkout for long, complex customer orders and significantly reducing processing times and, therefore, customer wait times for mobile phone transactions. We will also continue to invest in specialty labor in areas such as appliances, In-Home Advisor and smart home. As it relates to our supply chain, we will continue the long-term strategic investments we started last year that are designed to expand our bandwidth for growth and speed. Of course, our fiscal 2019 priorities also include initiatives that increase productivity to offset pressures and fund investments. Our current productivity target established in Q2 of fiscal 2018 is $600 million in additional annualized cost reductions and gross profit optimization to be completed by the end of fiscal 2021. During the fourth quarter, we achieved approximately $135 million towards our new goal for a total thus far of $235 million. A significant portion of the $135 million flowed through the income statement in the fourth quarter with the largest portion being gross profit optimization, driven primarily by a material decrease in price erosion in our stores. This was achieved by making improvements to processes and systems that resulted in fewer price overrides in the stores, more accurate price matching and better return on clearance pricing. Now as a part of our strategy to continuously optimize our business, yesterday we announced our intent to close our 257 remaining Best Buy Mobile stand-alone stores in the U.S. effective May 31. Let me say a few words about this. First, we are very grateful for the work our stand-alone stores associates have done over the last several years, and we will work hard to retain the maximum number of these employees as we value their expertise and as we have a range of opportunities for them within the company. Why are we closing these stores? We began opening these stores more than a decade ago before the iPhone was even launched. Back then the mobile phone business was in a period of rapid growth and margins were high. Fast forward to 2018 and the mobile phone business has matured, margins have compressed and the cost of operations in our stand-alone stores is higher than in our big-box stores. We're committed to and remain excited about the mobile phone category. We simply believe that it makes more sense for us to grow this category in our big-box stores and online. We are excited by the superior customer experience we're building there. The Mobile 2020 work we began last year makes it easier for a customer to research and compare plans and then purchase and set up a phone. In support of this goal, hundreds of our big-box stores now include dedicated vendor experiences associated with carriers and manufacturers like Apple, AT&T, Samsung, Sprint and Verizon and we're adding more of these this year. So, in summary, we are operating in an opportunity rich environment driven by innovation and customer needs for help. We are the market share leader with unique opportunities to expand what we sell and evolve how we sell and build the companies that customers love. As we head into fiscal 2019, we are all highly motivated to continue to propel the company forward. Corie will provide a more detailed outlook, but at a high level, we're expecting comparable sales to be flat to up 2%, which is on top of the 5.6% we delivered in fiscal 2018; an operating income rate of approximately 4.5%, which is flat to last year on a comparable 52-week basis; and non-GAAP EPS of $4.80 to $5, an increase of 9% to 13% or an increase of 14% to 18% compared to last year on a comparable 52-week basis. As it relates to our target for fiscal 2021, while it would be premature to update our revenue and operating income targets for that year, we are increasing our EPS target for fiscal 2021 from the $4.35 to $5.00 range we provided in September to a $5.50 to $5.75 range as a result of tax reform. And now I'd like to turn the call over to our CFO, Corie Barry, for more details on our Q4 performance and our fiscal 2019 guidance. Corie Barry - Best Buy Co., Inc.: Thank you, Hubert. Good morning, everyone. Before I talk about our fourth quarter results versus last year and versus the expectations we shared with you last quarter, I would like to provide additional context on our GAAP versus non-GAAP results. Enterprise GAAP diluted earnings per share was $1.23 per share versus non-GAAP diluted earnings per share of $2.42. The non-GAAP number excludes the following items related to tax reform. One, a one-time repatriation tax on the unremitted earnings of foreign subsidiaries; two, revaluation of our net deferred tax asset at the lower corporate statutory rate; three, the payment of appreciation bonuses primarily to our hourly store associates; and four, a charitable donation to the Best Buy Foundation. In addition, we also incurred the initial restructuring charges associated with our intent to close our remaining U.S. Best Buy Mobile stand-alone stores. Versus the expectations we shared with you last quarter, Enterprise revenue of $15.4 billion exceeded our expectations and was driven by higher-than-expected revenue in both our Domestic and International segments and nearly all product categories. Non-GAAP diluted earnings per share of $2.42 also exceeded our expectations due to the lower non-GAAP tax rate and the flow-through of the higher revenue. A lower-than-expected tax rate provided a $0.29 per share benefit versus our expectations and was mainly the result of the resolution of the three tax items and a lower tax rate for the month of January due to tax reform changes. While the gross profit rate and non-GAAP SG&A rate were in line with our original expectations, we did not gain incremental SG&A leverage with the higher sales due primarily to the incentive compensation for both our corporate and field employees exceeding expectations. I will provide additional details on this later in my remarks. I will now talk about our fourth quarter results versus last year. Enterprise revenue increased 14% to $15.4 billion, which included approximately $760 million from the extra week. Enterprise non-GAAP diluted earnings per share increased $0.49 or 25% to $2.42. This increase was primarily driven by an estimated $0.20 per share benefit from the extra week, a $0.15 per share benefit from the net share count change on a 52-week basis, a $0.10 per share benefit driven by the lower tax rate and the flow-through of the higher revenue, which was largely offset by the higher incentive compensation and the negative impact of approximately $0.03 per share from a lower periodic profit sharing benefit from our services plan portfolio versus last year. In our Domestic segment, revenue increased 13.4% to $14 billion. This increase was primarily driven by a comparable sales increase of 9% and approximately $715 million of revenue from the extra week. These gains were partially offset by the loss of revenue from 18 large-format stores closed during the past year. From a merchandising perspective, we generated comparable sales growth across most of our categories, with the largest drivers being mobile phones, gaming, appliances, smart homes, wearables and home theater. As it relates to mobile phones, the category was positively impacted by sales of the Samsung Note, which we were not able to sell last year due to a recall. Also as we mentioned on our call last quarter, we had approximately $100 million shift from Q3 into Q4 due to the later launch of the iPhone X. Domestic online revenue of $2.8 billion was 20% of Domestic revenue and increased 17.9% on a comparable basis, primarily due to higher conversion rates and higher average order values. International revenue of $1.4 billion increased 20.3%. This increase was primarily driven by comparable sales growth of 9.9% due to growth in both Canada and Mexico, approximately 580 basis points of positive foreign currency impact, and approximately $45 million of revenue from the extra week. Turning now to gross profit, the Enterprise gross profit rate decreased 20 basis points to 22.3% due to a lower rate in Canada. The Domestic gross profit rate of 22.3% was flat to last year. The gross profit optimization that Hubert mentioned earlier helped offset pressure in the mobile phone category, the impact of mixing into certain lower-margin products and the approximate 15-basis point negative impact from the lower periodic profit sharing benefit. The International gross profit rate decreased 220 basis points to 22.4%, primarily due to a lower year-over-year gross profit rate in Canada due to, one, lower sales in the higher-margin services category primarily driven by the launch of Canada's total tech support offer, a long-term recurring revenue model; two, a decrease margin rate in the home theater category; and three, an approximate 15-basis point negative impact from a lower periodic profit sharing benefit. Turning to SG&A, Enterprise non-GAAP SG&A was $2.4 billion or 15.9% of revenue, which increased $299 million on a dollar basis and was flat from a rate perspective versus last year. Domestic non-GAAP SG&A expenses were $2.2 billion or 15.8% of revenue versus $1.9 billion or 15.7% of revenue last year. The $276 million increase was primarily due to higher incentive compensation, the impact of the extra week, investments, and higher variable costs due to increased revenue. These increases were partially offset by the flow-through of cost reductions. I would like to spend a little more time on the higher incentive compensation expense due to the magnitude of the impact it had on our Q4 results. The higher expense was driven by both our retail and corporate plans, which used targeted performance metrics established at the beginning of the year. As a reminder, we started the year with an annual guidance of approximately 1.5% revenue growth and low single-digit growth in non-GAAP operating income, both of which we significantly exceeded. Our corporate incentive expense aligns with annual performance goals and has accrued over the course of the year based on expected full year performance. In Q4 of last year, due to the lower-than-expected performance, we both reversed expenses for certain metrics that had been accrued over the course of the year and did not accrue additional expense within the quarter for certain metrics. This year, we had the reverse effect, as certain metrics exceeded our previous expectations for the full year, which had a disproportionate negative impact on the fourth quarter, even though payment amounts were related to full year performance. International non-GAAP SG&A was $223 million or 16.2% of revenue, an increase of $23 million. This increase was primarily driven by the negative impact of foreign exchange rates and the extra week. The 130-basis point rate decrease was primarily driven by sales leverage. From a cash flow perspective, we ended the fourth quarter in line with our expectations. On the balance sheet, our inventory was up 7%, our payables were down 2%, and our receivables balance was down 22%. Our owned inventory position and receivables would have been roughly flat if last year would have also included an extra week. As it relates to capital allocation, our approach has not changed. Our strategy is to fund operations and investments in growth, including potential acquisitions, and then to return excess free cash flow over time to shareholders through dividends and share repurchases, while maintaining investment-grade credit metrics. We continue to target a non-GAAP dividend payout ratio between 35% and 45%. In the context of our overall strategy, our improved performance and the savings brought about by tax reform, we have taken and plan to take the following measures that benefit employees, our community, the business and our shareholders. In the fourth quarter, for our employees, we paid one-time $1,000 bonuses to both full-time store associates and non-bonus eligible corporate employees and $500 to part-time store associates. We also made a $20 million charitable contribution to the Best Buy Foundation. Going forward, we are investing in the enablers necessary to propel our strategies. This includes both people and systems, and the related costs are reflected in our annual guidance. For our people, we will continue to invest in specialty labor and plan to invest in improvements to our employee benefit programs. In support of our systems investments, we are raising our fiscal 2019 capital expenditure plan to $850 million to $900 million from the expectations we shared at Investor Day of $750 million to $850 million. This morning, we announced that we increased our dividend 32% and increased our share buyback plans for fiscal 2019 by $500 million to $1.5 billion. I would now like to talk about our full year fiscal 2019 guidance which, as a reminder, has 52 weeks versus 53 weeks in fiscal 2018. We are expecting the following: Enterprise revenue in the range of $41 billion to $42 billion; Enterprise comparable sales of flat to up 2%; Enterprise non-GAAP operating income rate of approximately 4.5%, which is flat to fiscal 2018's rate on a 52-week basis despite the investments we are accelerating as a result of tax reform; Enterprise non-GAAP diluted EPS in the range of $4.80 to $5.00, an increase of 9% to 13%. This represents an increase of 14% to 18% when compared to fiscal 2018 on a 52-week basis. And finally, we are expecting a non-GAAP effective income tax rate of approximately 25%. I would like to call out a number of assumptions reflected in our annual guidance. Our investments, in particular, in specialty labor, supply chain and increased depreciation related to strategic capital investments and ongoing pressures in the business, including approximately $35 million of lower profit share revenue, will be partially offset by a combination of returns from new initiatives and ongoing cost reductions and efficiencies. The increased investments in supply chain as well as higher transportation costs, in particular, are expected to add approximately 25 basis points of gross profit pressure each quarter to our Domestic business. The national rollout of our Total Tech Support offering in Q2 will pressure the gross profit rate of the Domestic business. This is due in part to recognizing the revenue over the term of the membership. On a full year basis, we expect the rollout to have a negative impact of approximately 15 to 20 basis points on our Domestic gross profit rate. The Best Buy Mobile small-format store closures are estimated to negatively impact revenue by approximately $225 million with flat to slightly positive impact on operating income. And finally, our guidance reflects lower incentive compensation expense as we reset our performance targets to align with our fiscal 2019 expectations. I would also like to talk specifically about our Q1 fiscal 2019 guidance. We are expecting the following: Enterprise revenue in the range of $8.65 billion to $8.75 billion; comparable sales growth of 1.5% to 2.5%; Domestic comparable sales growth of 1.5% to 2.5%; and International comparable sales growth of flat to 3%; non-GAAP diluted earnings per share from continuing operations of $0.68 to $0.73, an increase of 13% to 22%; a non-GAAP effective income tax rate of 22% to 22.5%; and a diluted weighted average share count of approximately 290 million shares. Please note that our Q1 guidance reflects the following impacts. We estimate that the negative impacts from calendar shift total approximately $100 million in revenue, with the biggest driver being the timing of Super Bowl, as related sales were pulled forward into the extra week in Q4 fiscal 2018 versus Q1 fiscal 2019. As I just mentioned, increased investments in supply chain, as well as higher transportation costs are expected to add approximately 25 basis points of gross profit rate pressure. We will have approximately $8 million of lower Domestic gross profit due to lapping a legal settlement received last year. And we expect the International gross profit rate pressure we saw in Q4 to continue into the first quarter. I will now turn the call over to the operator for questions.

Thank you. And we'll go ahead with our first question from Matt Fassler of Goldman Sachs. Please go ahead. Matthew J. Fassler - Goldman Sachs & Co. LLC: Thanks so much, and congratulations on a terrific print. My first question and primary question relates to gross margin. You spoke about lower store price erosion as a driver of Domestic gross margin rate. Can you talk about what that means? Corie Barry - Best Buy Co., Inc.: Sure. Absolutely, Matt. So, when we're talking about erosion, what we're looking at, we kind of broke it up into three buckets actually when we talked about it. We talked about price overrides in the stores, more accurate price matching and better return on clearance pricing. Essentially, that is decisions that we make at the store level to move through inventory for various reasons, clearance obviously makes sense given the nature of clearance items. But above and beyond that, the things like price overrides are decisions that are often made at the store level around price matching or competitive price matching, and we built in a lot more science behind the scenes, when and how to match and how to price that clearance merchandise, so that it moves as fast as you would like it to and you garner the most value out of it as possible. So, this is an excellent example of both corporate and our field employees working together to try and build both science and then processes in the field that help build these efficiencies. And it's a lot of what we've talked about before about these being these really cross-functional efforts to try to pull cost out. Matthew J. Fassler - Goldman Sachs & Co. LLC: So, it sounds like this is more about execution than about the environment. Corie Barry - Best Buy Co., Inc.: You've got it. That's exactly the right way to frame it up. Matthew J. Fassler - Goldman Sachs & Co. LLC: And just a quick follow-up on sales, to the extent that you're guiding to a much more subdued comp performance in 2018 than you posted last year, which categories do you expect to be smaller contributors or be challenged by tough compares relative to 2017? Corie Barry - Best Buy Co., Inc.: We've got a couple major things that are happening for sure. Remember, we benefited disproportionately this year from filling in the hole that was left by the lack of a Note device the year prior. We'll still have a little bit of that into this year, but only about a half a year of that, so there is just a hole there. Remember, we also had some of the real product storages last year in Q4 that we lapped this year. We aren't going to have that same lap next year. We had good product availability this year, which we specifically called out. And the other thing we specifically called out was gaming and, in particular, the Switch which launched, as a reminder, last year in Q1. And so now this year we're going to be lapping that full gaming cycle. And so those were big drivers of growth that just by the nature of what they were, you'd expect to decelerate a bit as we head into the next year. Matthew J. Fassler - Goldman Sachs & Co. LLC: Thanks so much, Corie.

And we'll go ahead with our next question from Scot Ciccarelli of RBC Capital Markets. Please go ahead. Scot Ciccarelli - RBC Capital Markets LLC: Good morning guys. Two questions. First, hopefully this is an easy one. With better hindsight, can you size the impact of the call-back on last year's product shortages? Hubert Joly - Best Buy Co., Inc.: Yeah. I think last year we had talked about in Q4 about a $400 million figure that included primarily phones, but it was also activities around appliances with the recall and in general, shortages. And so this year, we're benefiting from anniversarying this. In addition to this, we deliberately invested in better product availability, better in-stock across our channels, so as to be able to meet customer demand. And so it's really the combination of the two factors that were quite helpful. Scot Ciccarelli - RBC Capital Markets LLC: Okay. So, still a good gauge in terms of $400 million. And then, I guess a bigger question, Hubert, like – but before this past year, I think you guys have kind of characterized your company and positioned your company as a premium dividend payer, throws off a lot of cash, gaining share in an industry that's kind of a flat to slow growth kind of market. But you guys just put up some of the best comp growth you've had in a very long time this past year. Does that reassess how you're thinking about the longer-term growth trajectory of this business? Hubert Joly - Best Buy Co., Inc.: So, I think what we are saying today is very consistent with what we said in September. We have an opportunity rich environment where there is increasing product innovation and the need for help on the part of the customers. And we think that we're uniquely positioned to take advantage of that and we're building all of the enablers to be able to capture these growth opportunities. So, we've provided a fiscal 2021 outlook in terms of revenue and operating income rate, where certainly compared to Renew Blue, in Best Buy 2020, we'll have more focus on growth and building a moat for the company. So, we're becoming more of a growth-oriented company for sure. We're maintaining the premium dividend payer status. Initially, in the last one or two years, we said – we see these opportunities. We said initially you're not going to believe us, give us time to be able to build that and you're finding us on the way in this direction. We're not updating today our fiscal 2021 revenue and operating income numbers because we think it's premature, it's really – we're four months after September, five months after September. We've upgraded the EPS target because of the benefit of tax reform. So, that's a material upgrade. But, yes, we're gradually evolving the status of the company with a very strong focus on playing to win, growing the company on the basis of a company that does extraordinary things for customers. I want the customers – we went from customers that didn't like us, they now like us, I'd like them to love us, and we think that it positions us well from a growth standpoint. We're not changing the capital allocation strategy of premium dividend and return of capital (36:19) today based on the results of our performance. So, that's how I would summarize it, Scot. Scot Ciccarelli - RBC Capital Markets LLC: Got it. Thanks a lot, guys. Hubert Joly - Best Buy Co., Inc.: Thank you.

And we'll go ahead with our next question from Brian Nagel of Oppenheimer. Please go ahead. Brian Nagel - Oppenheimer & Co., Inc.: Hi, good morning. Hubert Joly - Best Buy Co., Inc.: Good morning, Brian. Brian Nagel - Oppenheimer & Co., Inc.: Congratulations on a really nice quarter and year. Hubert Joly - Best Buy Co., Inc.: Thank you. Brian Nagel - Oppenheimer & Co., Inc.: I guess so my one question. Corie, thanks for all the detail on the SG&A. I just want to, so to say, probe further on the incentive compensation. The question I have there is, is there a way to break out, as we look at the results, the actual impact of the incentive compensation in the fourth quarter? And then as we look into 2018 or, I guess, even beyond, how should we think about, so to say, the leverage point in your model given the investments you're making? Or maybe said better, any – where could (37:19) upside to sales – to your sales plan actually make its way to the bottom line? Thanks. Corie Barry - Best Buy Co., Inc.: Sure. So, I'll start with the first part of the one question. But let me take a step back here for a second on incentive comp metrics. These are about annual plans that we set at the beginning of the year. And we reminded you, at the beginning of the year, we set, essentially on a 52-week basis, flat top line, flat bottom line guidance. And we called out on Q3, we expected incentive comp to have a higher impact in Q4. And that was based on the performance we genuinely thought we could see for Q4 at that point. As it relates specifically to the fourth quarter, there were three things that happened that had a disproportionate impact on Q4. First, and I talked about it, the fourth quarter didn't come in as planned last year, as I'm sure you remember, and so we reversed out expense that we had accrued already throughout the year. Second, in the fourth quarter, many metrics came in higher than we'd been accruing for all year this year. Obviously, we outperformed in a lot of different ways. And that meant the fourth quarter expense included amounts that would have been accrued for in earlier quarters if we would have known the whole year was going to perform as well. And then three, the fourth quarter just, in and of itself, was way better than expected. And so when you stack those four things up, the impact to the fourth quarter was just north of $100 million. But to put that in perspective, year-over-year our increase in incentive comp was about $130 million for the whole year. You can see the disproportionate impacts the accrual had on this fourth quarter. That being said, I want to make sure I'm crystal clear that we're really excited to be able to sharing the performance with our associates, and that more than 85,000 people received some – or will receive some portion of this payout. So, I want to make sure that comes across very clearly. To the extent of your second point on leverage and where the leverage point is, I think Hubert said it really well. When we set up for Investor Day, we said we're going to aim for top line growth and then we are going to do what we need to do to reinvest in the business and maintain that flattish operating income rate, but we're going to pick different points to accelerate some of our initiatives or launch some of our initiatives depending on kind of how that top line flows for us. And so it's not as easy as the math of when exactly do you get leverage. It's a question of how quickly we can get legs under a multitude of the initiatives that we talked about from a strategic perspective and how can we deliver on that overall financial equation that we're driving for the growth and then the relative stability in operating income rates. Obviously, a little volatile quarter-to-quarter, but in general a progression toward flat to maybe up just a bit in that op income rate. Hubert Joly - Best Buy Co., Inc.: And maybe if I pile on the basic belief we have. And I think it's very important from an investment thesis standpoint is that down the road, the space we are in is a space where there's going to be outsized return for the winners versus the losers. And this is a time to play to win and build – invest in our growth capabilities, build the moat so that we position ourselves for long-term success in a very significant fashion. So, I think in the short term, the return we're providing to shareholders on the basis of the growth, the EPS growth, the return of capital we're excited about, I hope you share that perspective, and we are also positioning ourselves for long-term success again with the view that there is going to be an increasing difference between winners and losers, and we know what camp we want to be in. Brian Nagel - Oppenheimer & Co., Inc.: Got it. Very helpful. Congratulations again. Thank you. Corie Barry - Best Buy Co., Inc.: Thank you, Brian.

Your next question comes from the line of Michael Lasser of UBS. Please go ahead. Michael Louis Lasser - UBS Securities LLC: Good morning. Thanks a lot for taking my question. So, if we roll back the clock, a year ago you were guiding to an implied comp of around flattish. You did north of a 5.6%. What did better from a product category side from the Switch to drive that performance? Or was it just you gained much more share than you were assuming at that point? And how does that frame potential upside from a product category perspective for this year? And as part of that question, maybe you can talk about what do you think is more important for the business, product cycles or the overall health of consumer spending, because maybe some of the product cycles might fade this year, but the overall spending environment might pick up. Thank you. Hubert Joly - Best Buy Co., Inc.: Yeah. Thank you so much, Michael. I want to use this opportunity to convey a key thought. Yes, there's product cycles, and we love product innovation because we have this unique ability to commercialize new technology. What is driving the increased performance is not a particular – with the exception of gaming, which we always have ups and downs. It's not a particular product, it's in the context where consumer confidence is good. I think we estimate the overall market for technology products in calendar 2017 was flattish, so better than negative, but not overly positive. What's driving the result is, it's our strategy and our execution. Our positioning as a company that can address customer needs and truly help them achieve what they're trying to do in their life and then provide the support along the way, the quality of the execution, the increasing gap in our – and uniqueness of what we do for customers is really what we think is driving the performance. And this is also what is positioning us. From a product standpoint, yes, gaming was helpful. Equally important is, of course, in retail, you always have to look at what happened last year. So, last year, in the fourth quarter, we had the product availability issues. So, that is certainly boosting our Q4 and total year performance. And this won't happen – once you've anniversaried that, it doesn't happen again. But I want to convey that increasingly, we're trying to build this moat, and there will be new product introductions, but it's the strategic positioning that's really helpful. Now underneath this, every year the booming products will evolve. So, this year we've had gaming. I think smart home has been helpful. Home appliances has been helpful, and some of these things will fluctuate and will ride these waves. But again, it's this emphasis on the uniqueness of the strategic positioning. Corie, any details you want to add? Corie Barry - Best Buy Co., Inc.: The only thing that I would add is, if you went back and looked at the category drivers for each of the last four quarters, you would see that, of course, we've called out gaming and we've been very explicit. But under gaming, it has been a rotating mix of categories that we've gained share in and that are very reflective of our positioning. Computing has come up multiple times. Home theater has come up. Smart home, as we brought those products to bear, and I think that just underlines what it is Hubert was saying that it's not just things spike when there's product launches. These have been categories that have been called out for quarter after quarter after quarter of excellent performance. And I think that underlies (44:41) the feeling and data and evidence that we have that the strategy is taking hold in terms of the shopping experience. Hubert Joly - Best Buy Co., Inc.: Okay? Michael Louis Lasser - UBS Securities LLC: Thank you. Hubert Joly - Best Buy Co., Inc.: Thank you.

And your next question comes from the line of Dan Binder of Jefferies. Please go ahead. Daniel Thomas Binder - Jefferies LLC: Hi. It's Dan Binder. Thank you. My question was – congratulations by the way on a great quarter. Corie Barry - Best Buy Co., Inc.: Thank you. Daniel Thomas Binder - Jefferies LLC: My question was centered around the services business, the rollout, the pressure on gross margins and maybe a starting point, could you give us a sense of the International gross margin erosion? How much of that was from the services rollout specifically? And why, when you do it in the U.S., won't it be as significant as what we've been seeing in Canada? And finally, with the impact that you did give us, can you help us understand what you think the sales benefit is? Hubert Joly - Best Buy Co., Inc.: So, I'll start with answering your question from a customer standpoint, and then Corie will add color on a profit basis. So, what is exciting in what's happening here is the customer response to some of our initiatives. In-Home Advisor, I think, can be characterized as a service initiative, but recognizing there is no revenue attached to this. But this is a consultative approach in the home to help customers and address their needs where we really like how it's been framed. We like the customer response, and we'll gradually increase that. The benefit of this initiative is in product sales, unlocking demand and building relationships. Total Tech Support is equally exciting. It complements in a way the upfront consultative approach In-Home Advisor with the ongoing support across all of the customers' portfolio. The fact that we've decided to roll this out in the spring in the U.S. is a clear sign. Corie will go through the mechanics of some of the profitability. We see Total Tech Support, number one, as a service offering with its own P&L, but also as a part of the flywheel we're trying to build, building an end-to-end relationship with the customers, so we like the customer response on this one. From a profit standpoint, Corie? Corie Barry - Best Buy Co., Inc.: All right, Dan. I'll do my best to parse this apart. Let me start with International. In the International business, the gross profit compression is about half services and about half other product things that we called out on the walk. And so it's not all, to be clear, the Total Tech Support offer. I'm going to take one step back, Hubert talked about this a little bit. But remember, we rolled one version in Canada, and that is a monthly-pay version that has various attributes set up with it. We've tested a few different versions here in the U.S. in 200 stores, so a pretty wide breadth in our test. And ultimately, as we said in the prepared remarks, we're going to go with an annual plan that you pay for up front here in the U.S. So, it's a different plan, and we've seen just slightly different results here in the U.S. even than what we saw in Canada. As to Hubert's point, we like the customer demand. We like the customer experience, and so all of that is hanging. The change in the model here is that it's a recurring revenue relationship model. So, you incur more expense up front, right, at the point that someone purchases is they often get value up front, but you're going to amortize and recognize that revenue over time. And so the first year, that creates a little bit of imbalance. But what we really like about it is that as people stay on the plan over time, it becomes much more accretive into the out-years. And so to your question about revenue lift, it's not as much in year one because you have that amortization over time impact, but as you get out into the out-years, years two and three and we start to think about bringing the longer-term strategy to life, this becomes a nice accretive model over time. And it's why we want to start with what is it customers want. We hear they want support and then how do we build that model to give them that across all their devices over time. Daniel Thomas Binder - Jefferies LLC: Thanks.

We'll go ahead with our next question from David Schick of Consumer Edge Research. Please go ahead. David Schick, your line is open. David A. Schick - Consumer Edge Research LLC: Hi there. Can you hear me okay? Corie Barry - Best Buy Co., Inc.: Yeah. Hubert Joly - Best Buy Co., Inc.: Yeah. Good morning, David. David A. Schick - Consumer Edge Research LLC: Okay, great. Thanks so much for the question. I want to go back to something Hubert just said about commercializing technology. And I realize in any quarter, there's discrete items, plus or minus. But the general lift, could you characterize what's going on as more about early adopters getting very involved in 4K and more TVs and smart home and services? Or is this the beginning of everybody else? I'm not sure which would lead to longer and better growth. It might be the same, the answer, but just to understand where we are in this wave as you sort of position for that. Hubert Joly - Best Buy Co., Inc.: Yeah. Thank you, David. Let me distinguish the market and then our growth. The market, in general, is driven by this overall technology innovation we're seeing. In our lives, technology is more and more pervasive. The number of items that are technology enabled in our homes keeps going up. Of course, early adopters play a role there. But the overall market as near as we can tell is really difficult to measure from a hardware standpoint. The overall market seems flattish. What is happening in driving our revenue is actually not so much that, but what we do with it. So, it's the question of how do we take advantage of this. If I take the TV home theater segment, our teams have played a key role working with the vendors on the definition and then introduction of 4K technology. And I remember there was a debate one or two years ago about at some point, will Best Buy surrender market share to the mass channel. So, I'm going to paraphrase a famous politician, we will never surrender. And what we are seeing is that because of the continued innovation and the way we are able to merchandise both online, in the stores, support customers, we're continuing to get market share. And so there can be a notion of these fast cycles and sometime it's true. The tablets went up quickly and then down. But if you take the TV category or the computing category or the smart home category, there's continuous innovation, so it's not an up and then down. And then we are able to gradually gain share over time. We do have a focus from a customer standpoint on a segment, which we call the high-touch tech fans, so people who like technology and need help with us, good news is that's a lot of us, it's not just early adopters. And that's how we take advantage of this. So, I hope it helps because that's still – a core to the strategy we're pursuing is take advantage of the assets we have to help customers and expand our business on that basis. David A. Schick - Consumer Edge Research LLC: Very helpful. Thank you.

And we will go ahead... Mollie O'Brien - Best Buy Co., Inc.: Next question, please?

We'll go ahead with our next question from Greg Melich of MoffettNathanson. Please go ahead. Gregory Scott Melich - MoffettNathanson LLC: Hi. Thanks. I'd love to – first, congrats, a great quarter and executing is huge like that. Corie Barry - Best Buy Co., Inc.: Thank you. Gregory Scott Melich - MoffettNathanson LLC: On the tax reform, my rough estimates here are that it's about $180 million, maybe $200 million a year savings from what your tax rate used to be to the 25%. And I just want to frame it, are we thinking about, say, roughly half of that now going with CapEx acceleration? And then given the flat guidance – given the top-line growth for margin, that maybe $50 million is going in some margin investment, given all the things you're doing. Is that a fair way to look at it when you think about how much of the tax gains you're keeping, so to speak, versus what's going back into the business or the income statement? Hubert Joly - Best Buy Co., Inc.: Yeah. Thank you, Greg. I think your characterization of the annual tax savings is absolutely in the ballpark. In terms of how we are using that, we're not providing a breakdown. What is exciting, I think, is that we're able to have every one of our stakeholders benefit from this. So, clearly, we're investing in the employees of the company. We've talked about investments in additional benefits in specialty labor. We'll continue – skills and talent is key to our winning in this space, so we'll continue to invest in that. We're investing in the customer experience and all of the enablers and then, of course, the shareholders are benefiting as well. What I particularly find exciting is that while we are clearly accelerating our investments, we are able to maintain, on a comparable basis, a flat OI rate. And so it was a lot of debate actually throughout the country of how much investments-related tax savings would actually deteriorate the operating income rate. In our case, we're able to accelerate the investments, do what we need and maintain the OI rate. How is that possible? Because of the efficiencies we're driving throughout the business and, of course, the return from these investments. So, we're not providing a detailed breakdown. I think some of the estimates you had were correct. But what I want to highlight is that despite the acceleration of investments, we're maintaining a flat OI rate. We're not deteriorating the OI rate in this phase of accelerated investments. Gregory Scott Melich - MoffettNathanson LLC: Got it. Thanks. Hubert Joly - Best Buy Co., Inc.: Thank you.

Your next question comes from the line of Joseph Feldman of Telsey Group. Please go ahead. Joseph Isaac Feldman - Telsey Advisory Group LLC: Yeah. Hi, good morning guys, and again congratulations on the strong quarter. Corie Barry - Best Buy Co., Inc.: Thank you. Hubert Joly - Best Buy Co., Inc.: Thank you. Joseph Isaac Feldman - Telsey Advisory Group LLC: Wanted to ask about the online business. I know it was another good quarter, but just compared to the annual growth rate, it did slow a little bit. And I was just wondering if it was just because of the big comparison. Or is there anything else you're seeing there? And I know you touched on a couple of the new ideas or initiatives in the online business. If you could maybe just dive into those a little bit more in detail, that'd be great. Corie Barry - Best Buy Co., Inc.: Yeah. So, I'll start. The size of Q4 is massively larger in our online business. And just from a seasonality perspective, this is typically what you see in the seasonality of our online growth. The top-line growth number falls back just a bit. But in terms of the percent of the business, that 20% of the business, that percent of business has continued a pretty steady march quarter to quarter to quarter to quarter. So, there wasn't anything that changed. It's just a little bit of the seasonality of the business. And what's really important and what we like to call out is that conversion was a key driver for us, which means it's not just pushing more traffic to the website that we love to do that, it is once the traffic is there the experience is so much meaningfully better that you're actually converting more customers. And that's why in the examples that we gave you around kind of the natural language search capability, that is – the last thing you want to do is bounce someone away from your website. And what do people do the minute they come to your website? They search and they search using whatever is in their heads. You search for a quiet dishwasher because that's what's important to you. And while that seems really basic, being able to pick up on those natural language cues and then give you assorted list of answers that exactly address your concern, it seems very nuanced. It's a huge deal because the faster I can get someone at the end of the day to that product that they're looking for with the closest match to their natural language request, the more the likelihood they're actually going to flow through on that purchase. And so the examples we gave you are all about that – a real end-to-end customer experience through the website and taking away as much friction as possible when someone comes to visit us. Hubert Joly - Best Buy Co., Inc.: Let me quickly add two or three things. One, with this growth rate of 18%, we believe we're getting market share online. Number two, what matters to us and probably to our investors is the overall growth rate of the company. Number three, if you do the math, you would conclude that in Q4 and for the full year, on a four-wall basis, so excluding in-store pickup and ship from store, are (57:51) stores at a very nice comp both for the full year and in Q4. Joseph Isaac Feldman - Telsey Advisory Group LLC: That's great. Thank you, guys. Good luck with this quarter. Hubert Joly - Best Buy Co., Inc.: Thank you.

And your final question will come from the line of Christopher Horvers of JPMorgan. Please go ahead. Christopher Horvers - JPMorgan Securities LLC: Thanks, good morning and phenomenal quarter. Corie Barry - Best Buy Co., Inc.: Thank you. Hubert Joly - Best Buy Co., Inc.: Thank you. Christopher Horvers - JPMorgan Securities LLC: In thinking I had two questions. So, as you think about the first quarter guide, I know Best Buy likes to be very conservative in terms of their outlook. But if I recall, there was strength more in the back half of the quarter on the Switch and I think the Galaxy and you're guiding to a pretty sharp deceleration on a one- and two-year basis. So, can you talk about that rationale? Are you seeing sharp slowdowns after a 9% in the fourth quarter? And then as a follow-up, the gross margin benefit from the price erosion efforts at the store, that seems new. Is that something that will continue as you look out into the first three quarters of this year until we sort of lap it? Thank you. Corie Barry - Best Buy Co., Inc.: Sure. So, I will try to handle those. In terms of the deceleration into Q1, you actually teed up very nicely, Chris. It was a volatile quarter last year, started quite slow, ended quite strong. And so we're thoughtful about that as we try to phase out the quarter. This is less about anything I'm seeing in this exact moment, and it's more about the things I called out in the script. One is the flat-out timing, and we said it, you had $100 million of iPhone revenue that pushed into Q4. And then you also had $100 million associated with the Super Bowl shift that pushed into Q4. So, that means those were things that were disproportionately heavy in Q4 and then would have taken actually revenue out of in the Super Bowl shift example, Q1. So, those are just real and that's about $200 million between those two that isn't comparable between the two quarters. The second is gaming, you called it out, you have to remember Switch launched last year in March. And so we are going to start lapping that and then obviously, you also called out the Galaxy which – always the timing of the launch is just a little bit different. So, those are the biggest thing – and then the last thing I would call out is that some of the general product availability issues we had in Q4 last year eased as we came into Q1. And so you just don't have that same lap that you had in Q1. I would also make sure that I call out, we talked about some of the operating income rate pressures. If you adjust it for that Super Bowl shift and the legal settlement that we had, our operating income rate would be roughly flat year-over-year on that Q1 guide. And so I want to make sure I'm clear about that, that moving that Super Bowl week out of Q1 has a pretty large impact overall both revenue and operating income on the quarter. To your second question on the price erosion, the store teams have been working on this for a while. We said that a disproportionate amount of that actually flowed through straight into Q4. We'll have a little bit going forward, but not nearly as much as I think some of the benefit that we saw out of the back part of last year. Hubert Joly - Best Buy Co., Inc.: Very good. I'm conscious of time. I want to thank all of you for your attention, your support and your kind words. It's true that this is an exciting time at the company. We see the opportunities ahead. I want to make sure I do a good job of giving credit to our associates who are delivering amazing performance for our customers. You guys rock. Have a good day. Thank you.

And this concludes today's call. Thank you for your participation. You may now disconnect your lines, and have a wonderful day.