Ladies and gentlemen, thank you for standing by and welcome to Best Buy's Q3 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 AM Eastern Time today. I'll now turn the conference call over to Mollie O'Brien, Vice President, Investor Relations. Mollie, please go ahead.

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 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 useful can be found in this morning's earning release, which is available in the Investors section of our website, investors.bestbuy.com. Today's earnings release and conference call also includes 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, including our most recent 10-K, 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. I will now turn the call over to Hubert.

Thank you, Mollie and good morning, everyone, and thank you for joining us. I'll begin today with a review of our third quarter performance, briefly discuss holiday and then review some of the progress we're making against our 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 strong top and bottom line results for the third quarter of fiscal 2018. We grew Enterprise revenue 4.2% to $9.32 billion, which is a 4.4% Enterprise comp, and we increased earnings per share 30% to $0.78 compared to $0.60 last year. These results include the negative impact of 2 significant factors. First, despite what we characterize as moderate expectations for mobile phone launches in the quarter, revenue in the mobile category was materially lower than expected. This was due to the fact that a major new phone did not start selling until November, which is the first month of our fourth quarter. This resulted in significant softness in sales of existing mobile phone models in October as customers delayed their purchases. The related revenue impact in the quarter was more than $100 million. Second, like most retailers, we felt the impact of the natural disasters in South Texas, Florida, Puerto Rico and Mexico. Our first priority during these disasters was, of course, the safety and well-being of our associates in the affected communities, and we're happy to share that all of our associates are safe even though some of them suffered material losses. We estimate the negative impact to our Enterprise comparable sales was 15 basis points to 20 basis points, and that with the related costs, including insurance, deductibles, repairs and employee-related pay, our earnings were negatively impacted…

Thank you, Hubert. Before I talk about our third quarter results versus last year, I would like to talk about them versus the expectations we shared with you last quarter. On revenue of $9.32 billion, we delivered diluted earnings per share of $0.78, both of which were within our guidance range. As Hubert discussed, we saw strong top line growth with positive comps across almost all of our product categories. However, the lower than expected mobile phone revenue caused by the later phone launch, estimated to be more than $100 million, was material enough to pull our comparable sales below our comparable sales guidance range. In addition, as Hubert mentioned, we estimate that natural disasters had a 15 basis point to 20 basis point impact on our Enterprise comparable sales and a $0.03 negative impact on our earnings per share. Like many other companies, we made decisions to support our employees, our customers and our communities, including organizing the delivery of much needed supplies to our associates in Puerto Rico, where we have three stores and a distribution center, within a few days of the devastation. Many of these decisions came at a cost, but they were definitely the right thing to do. Slightly offsetting these pressures are lower than expected Q3 tax rate provided a $0.02 benefit. I will now talk about our third quarter results versus last year. Enterprise revenue increased 4.2% to $9.3 billion. Enterprise diluted earnings per share increased $0.18 or 30% to $0.78. This increase was primarily driven by the flow-through of higher Domestic revenue, a $0.07 per share benefit driven by a lower effective income tax rate and a $0.04 per share benefit from the net share count change. These increases were partially offset by higher Domestic SG&A from expected increases in growth investments…

Thank you. We'll go first today to Scott Mushkin with Wolfe Research.

Hey, guys. Thanks for taking my questions.

Good morning, Scott.

So wanted to get your thoughts on the TV category as we get into the fourth quarter, and then my second question would be just labor costs, not only in the fourth quarter, but as we look out to next year, we're getting a lot of noise from people that it's becoming a pretty big problem. Wanted to get your take on that? So, those two things. Thanks.

So I'll do my best here, and then maybe Hubert can add a little bit more color. In terms of TV, I mean, the first thing that I would say is we continue to be very excited about the technology innovation in the category. And within that, we feel like we're very uniquely positioned to show off those new technologies. Obviously, according to what we can see in the NPD data, in Q3, the industry TV revenue was down about 5%, which was better than the down 10% we saw in the first part of the year. For us, we actually – we saw that business was up slightly in the quarter. Similar to Q2, units were down, but ASPs were up, and a big part of that was mixing into those bigger screen sizes and more fully featured technologies. We like that positioning heading into the fourth quarter. Obviously, it's a highly competitive quarter, but we're excited about the plan that team has put together, and we think we're really well positioned. On top of that, you asked a little bit about labor expenses. One of the investments we have actually called out over almost the last two years is continued investments in specialty labor. And we, first of all, have been a little bit better positioned than some other retailers just given that a vast majority of our labor is a little bit more highly compensated as it is already specialty labor, and then we've been making investments on top of that to ensure we remain very competitive in the marketplace. So for us, we feel like that has been a piece of the investment, and we even said at Investor Day that likely going forward will continue to be a piece of the investment thesis.

One thing I would add on this, Scott, is that we believe one of the drivers of our very strong performance is the much reduced turnover of the labor in the stores. We think it's at the historical low, it's been materially reduced really as a result of great leadership and focus on that to make it an exciting place to work together with the compensation, but there's other actions. And of course, if you have lower turnover, people are more proficient. It's a reflection of more engagement, and I think we've got a lot of feedback on the level of energy and proficiency in the stores, and we're very excited by it, and we're committed to continuing to work on this and to make it a great place, great employee experience resulting in a great customer experience.

Thanks, guys. Thanks for the thoughts.

Thank you.

We'll go next to Peter Keith with Piper Jaffray. Peter Jacob Keith - Piper Jaffray & Co.: Hey, thanks. Good morning, guys. Nice results. Was curious just on continuation of the industry backdrop balance versus market share. Could you give a perspective maybe on how NPD trended for your categories? And then do you feel like with this pickup in same-store sales growth that it's partially a result of accelerating market share gains in the industry?

Yeah, thank you for your question. NPD performed much better, and it's not the first quarter, but it's around plus 2%, something like that. And of course, as you all know where we compete is much broader than NPD. We think appliances is performing well, but mobile, not maybe so strong this quarter. So there's a lot of – but in general, what we're seeing is technology innovation driving demand. And we spent quite a bit of time during Investor Day sharing our enthusiasm for the fact that this is an opportunity rich environment. When we look ahead, the pace of innovation, how meaningful it is and of course, the help that customers need, that creates a rich environment for us. In the quarter, to your question, we continue to gain market share. The pace of market share gain is relatively steady, steady as you go. And so the strong performance in the quarter, as I said in my prepared remarks, is really the combination of technology innovation and the fact that our strategy is continuing to resonate. And we like that combo because it's – and hopefully, you see it as a great company in a great neighborhood. Peter Jacob Keith - Piper Jaffray & Co.: That's great. And maybe a quick follow-up, Hubert. There was a nice pickup in the appliance category this quarter with an acceleration. Could you provide a little bit of color on what drove that?

Yeah. We think that – I mean, the housing recovery by all measures is still young and still very far from the peaks we have seen a few years ago. So that's helpful, and we're continuing to gain share in this category. The fact that, of course, some competitors have suffered is another factor, but I would highlight, as far as what we can control, the continued investment in the customer experience. Our teams, rightfully so, are very proud of the fact that we were awarded the best performance by J. D. Power and Associates from a customer experience standpoint across all of their seven criteria. We're continuing to invest there. We think we continue to have many opportunities. So in general, strong category, strong focus on customer experience, and we think that this is an opportunity that's rich with opportunities for us. So excited about that. Peter Jacob Keith - Piper Jaffray & Co.: Thank you very much. Good luck with the holiday season.

Thank you.

We'll go next to Seth Sigman with Credit Suisse. Seth I. Sigman - Credit Suisse Securities (USA) LLC: Thanks. Good morning. I wanted to follow up on the Q4 outlook. So you're guiding to comps in the 2% range at the midpoint. Can you just remind us some of the things that were lapping from last year, including the Note7? You had some product supply issues. If we assume that you get some of that back or maybe even a lot of it back, and then you have this $100 million shift from Q3 to Q4, it would basically imply that the rest of the business would be down slightly in the fourth quarter. Obviously, it's been trending much better than that. So just wondering is that math, right? Is there reason for that other than just conservatism and that a lot of the holiday is still ahead of us? Thanks.

Seth, as per usual, you are very good with math. You're absolutely right. And that if everything performed perfectly, so as a reminder, last year we had $200 million of Note revenue we estimated on the quarter and than we said another $100 million to $200 million related to product shortages, because it's not a perfect science. We said thought that was the range. So $300 million to $400 million. And then obviously, there's the question of moving some of the volume from Q3 into Q4. Not all those things are perfectly additive because remember, where we saw some of the product shortages was in phones. And so that -you're kind of double counting there, obviously. And the underlying business, it's not that we particularly see a lot of risk. I think we're trying to be thoughtful about the puts and takes across the business. And obviously, during the holiday season and the competitive environment that you're going to see, not everything performs exactly like it does in Q2 and Q3 leading into the season. And so we do feel like we're very well-positioned. We feel like this range is thoughtful given the plans that we have in front of us, and it does incorporate all of those factors back into it. And obviously, like Hubert even said in the prepared remarks, we're always thoughtful again about availability as we head into the quarter.

The only thing I would add, Seth, is that when we do the scorecards, we're mindful or thoughtful about share of wallet. There's only so much that customers will spend during the quarter. And if one category or one type of product do better, it's exciting, but there's secondary effects. So we're trying to be thoughtful about this, and so the 1% to 3% outlook reflects our best thinking that's what I would say. Seth I. Sigman - Credit Suisse Securities (USA) LLC: Okay. That's very helpful. Just follow-up question on your store comps. So if you exclude e-commerce, they've been up about 2% over the last two quarters, a pretty meaningful improvement. Can you just help us better understand the drivers of that? Are you seeing traffic actually pickup in the stores? Is that better conversion as you've improved service? Is it a change in basket? Any color there would be helpful. Thank you.

Sure, happy to provide color. This is a great call out and a great reflection on the role that stores play in our category and of course, the great performance of our store teams across the company. I think we're seeing significant shifts in customer behaviors in terms of what they buy online and what they buy in the stores. So clearly, from a traffic standpoint, we're continuing to see traffic decline as customers tend to buy online the higher frequency, smaller items, and they tend to focus their trips to the store for more discovery, experiential discovery, interaction with our great Blue Shirts and gravitating to higher-ticket items, more complex solutions in the stores. So clearly, we're seeing increase in the basket or the average order value in the stores, also higher conversion rates. In fact, based on the higher proficiency and great engagement of our store associates, but also the fact that customers have done more research before they go to the stores. So you see a significant shift in the performance. But in totality, we're very excited about how we can help customers online and in how we can do great things for customers in the stores. And then looking ahead, I think we're going to continue to – you had felt our excitement about the in-home channel and I had some comments about how the initial response to our In-Home Advisor program is very, very positive. So lots of excitement in our ability to help customers online, in the stores and in their home is, in fact, a unique competitive advantage. And we're happy with how it's resonating with customers. Seth I. Sigman - Credit Suisse Securities (USA) LLC: Okay, great. Thanks very much and good luck for the holiday.

Thank you Seth.

Thank you.

We'll go next to Alan Rifkin with BTIG.

Thank you very much. I'll add my congratulations as well.

Thank you.

First question relates to services. Obviously, it's a major initiative for you guys going forward. But if you look at the performance in this quarter, the comp performance within that category was the lowest of any category on what is the lowest base. I was wondering, and I understand it's early in the program, but where are you in terms of growing the services business compared to your early expectations that you laid out?

Yeah. Thank you, Alan. What we report in the comps in services is compared to what we're looking at for the future, a relatively narrow view of services. To a very large extent, it's the commission on the warranties as well as some of the tech support services from the Geek Squad. As you look at the overall strategy Best Buy 2020, there's many service-oriented components of the strategy that are actually not reflected in that number and will not impact that particular line. In-Home Advisor, as a great example, is a free consultation in the customer's home. So no revenue from the consultation, and of course, it triggers these enhanced revenues that are largely product and some services. So it's a service-oriented approach. Similarly, the more we're moving to managed services such as Best Buy Smart Home powered by Vivint, that's not today in that line either. So the service – and looking ahead, we may – we're going to think about how to best keep everyone on that journey so that we have some meaningful indicators. We're going to take our time to think about this. But – so hopefully, I'm clear in the fact that the service line is a narrow view of what is an overall service-oriented, customer-oriented strategy. Now on the performance in the quarter of that line, our business today in services is largely an attached business related to extended warranties and some installation services. The number is broadly in line with the comps, the aggregate comps, as it's an attached business. So not surprising that in the short term, there's no material change. Corie, anything I would have missed on that?

No, I think you hit it.

Okay. Thank you.

Thank you, Hubert. I appreciate that explanation. The second question has to do with mobility and in particular, obviously, the iPhone launch. Can you maybe talk about your allocations of the new iPhones compared to past allocations? And historically, what type of lift to traffic in the stores has a new launch of an iPhone given you? Thank you very much.

Yeah. Thank you for your question, Alan. I am very excited about a number of things. One is how our teams have improved the customer experience, in particular around launches, and it's a good – one thing is the allocations. I won't give you specific numbers about a specific product, but let me just say, in general, we have great relationship with the key handset vendors, and we work very closely with them. But in terms of what we control, the work we've done online, in particular, to facilitate the pre-order process is very, very strong and then the ability to continue to take orders even when the delivery lead times extent, we've worked with the key vendors on making it easier to continue to take pre-orders for out times. We have described on the call we've improved all of this, both online and then in the store. So really great performance there, making it easy to do most of the work online and then making it easier to purchase in the stores. The phone category is a very exciting category. We're focused on it. Whenever there is a great iconic launch, it creates excitement. In partnership with the handset vendors, we've created great experiences in the stores. So I think these are positive, and you saw that, in fact, the fact that this iconic phone launched in our fourth quarter had a material impact. So that gives you an indication of the impact in this category.

Alan, to your specific question about the traffic.

Yes.

Like with any launch that we see, whether it's sometimes it's gaming, sometimes it's mobile, we absolutely across our channels, I think that's what important, both online and in the stores, we absolutely can see some more peaky traffic. I think what's important to note, though, is reinforcing what Hubert said overarchingly our traffic patterns when you broaden it across a quarter haven't looked that much materially different.

Thank you both and best of luck for the holiday season.

Thank you.

Thank you Alan.

We'll go next to Mike Baker with Deutsche Bank.

Thank you. I wanted to focus on the long-term initiatives, the in-home services and those other initiatives. So in your long-term plan, you have about $2 billion in incremental sales roughly. Can you break down how much of that is coming from these services and initiatives and how much from product, please?

Good morning. So we – and we said it at Investor Day, too. At this point, we're not breaking down specifically the long range plans from each of the initiatives. Part of that's simply being that we have many of them still very much in test mode. If you think about what we're doing in total tech support as an example, you're in 200 stores at this point and testing three different models to that plan. So it's difficult to for me to tell you on the longer tail where do we think that goes. What I would reinforce is in the places where we're starting to roll things out like In-Home Advisor, Hubert started to hit on the fact that we're excited about what we're seeing there. And in fact, we already started to increase the number of advisers we have slightly based on the demands that we're seeing. And so our hypothesis definitely was that that $2 billion would need to be supported by some of these initiatives and a combination of them likely, but we're really early in that process.

Yeah. Qualitatively – and again as soon as we can, we'll try to provide more color. But qualitatively, the direction of Best Buy 2020 is of course around growth, and it's around deeper, meaningful, stickier customer relationships and over time, building more recurring revenue streams. This is going to be a journey because you have to recognize that Best Buy is a relatively big company. So in order for these numbers to become meaningful, it's going to take time. But the direction is very exciting, and for me seeing how these new approaches resonate with customers is very encouraging. So sorry, we cannot be more precise. But hopefully, you feel the direction this is heading.

Yes. And if I could follow up on that, you are adding 35 more in-home advisers. Can you talk about what are you seeing that's causing you to add that? Is it certain markets? Is there any way to break down like are certain markets working better than others? Or is it the ones that have been in place longer, they're starting to need some help? Just a little bit of color on the successes that are causing you to add those people.

Sure. So we're adding – we're moving from 300 to 375. So that's 75 additional. So it's a meaningful. It's more than 20% higher that initially planned, and we'll probably continue to add next year. So I think all of you could actually test this. We underestimated demand across the country, and so the lead time if you were to try to get an In-Home Advisor now, we wouldn't be into your home this afternoon. It would be several days. We're trying to work the lead times down. I think we're probably out a week, something like this at this point, and so we were a bit "overwhelmed" by the initial demand. And this is a case where we'll try to pace ourselves because these are highly skilled professionals. And if you rush it, if you grow too quickly then you run the risk of deteriorating quality. So while we are pleased to be adding 75 by the beginning of next year, we don't want to go overboard, so it's going to be a fine balance, but the quick answer to your question, we underestimated the demand and the days out were a bit too high, frankly.

Okay. Thank you for the color. I appreciate that.

Thank you.

Thank you.

We'll go next to Chris Horvers with JPMorgan.

Thanks. Good morning. Can you talk about what you're seeing on the connected home side in terms of where are we on that adoption curve? You started to see strong results in that category about a year ago. So are we stacking comps higher in that category? And how long do you think the tail is in terms of the consumers adoption of Alexa and the In-Home Advisor, the Google platform?

Yes, Google Home. I think we're still early days. This is a significant wave, and we'll be able to measure it based on the number of devices that people have in their homes that are connected, and it's not just the voice assistance. It's all of the devices that are connected, and there was actually a survey of my home. I'll share an anecdote with you. I have 90 connected devices in my home. Now that's a bit extreme compared to the average American home, but we're in the teens probably nationwide. And so we certainly anticipate, I referenced it in my prepared remarks that during this holiday this is going to be the voice assistance in particular, but smart home more generally speaking are going to be in high demand. We think it's going to continue because what we're seeing is once people have bought, let's say, a smart camera or a smart lock, a smart device, they'll tend to then continue to add. So this is a very exciting space and we think it's still early, frankly.

Sure. I guess, just following up on that, so from the actual voice assistant, is that sort of the primary driver of growth at this point? And any sort of differentiation in terms of the adoption of those specific devices versus the cameras and the locks and thermostats and so forth?

One of the things that's been most exciting about smart home and that supports much of what Hubert said, is that within the category, depending on the quarter, we're actually seeing different aspects of the category grow. Sometimes it's been monitoring that many people are interested in, in the cameras. Definitely, voice consistently has been a big part of the growth story, but we're seeing different pieces of that within kind of the sub-categories within that, all growing at different points. So the nice part is we definitely feel like heading into holiday voice assist continues to be a very big driver both just of curiosity but also of purchases. But the good part is that surrounding that, we're also seeing the other parts of smart home grow nicely within the category.

And this whole smart home trend, of course, plays, and I'll state the obvious, plays really well to our strengths, all right? Because we are a player with online store and in-home capabilities, the ability to help customers across a wide range of devices and brands. We're really well positioned from the discovery stage then to the implementation and support stage. So a big part of Best Buy 2020 is about winning the home.

Understood, and then the follow-up question is the International gross margin took a pretty big hit. Is that how you rolled out the total tech services? Is that something we should think about in terms of the rollout in the U.S.? Thanks very much.

That's a great question. So I would not, at this point, correlate the two, because like I said, in the U.S., you're at 200 stores, but three different models that we're testing, and we're doing that so that when we're ready we can come to you with a very fulsome point of view about what we think the implications are. I mean, that being said, obviously, moving to a model that looks more like support over time where you have ratable payments over time looks quite different than what Hubert talked about earlier, which is attaching a warranty to the business on the front side. And so we've rolled out well, and the customers are adopting the product, and they're enjoying their interactions with the product in Canada. It's more a question of as you provide the support model over time, and it will look great as we get into the over time part of it. It's just that the first part is you're rolling it out, and you incur some of those expenses upfront, but you get the revenue tail over time, it causes a little bit of a different financial model in the near term, but I would not correlate that yet to the U.S. because we're very early in determining what it is that we want to do here. And once we know that, I promise you we'll be quite clear on what we think the implications are.

And what I would add is a big difference between Canada and the U.S. is that in Canada, the only version we're offering is a monthly subscription. So of course, very different than if you sell an annual subscription. In some markets in the U.S., we have monthly, but we also have annual. So I really want to reinforce the fact that what Corie said that don't extrapolate to the U.S. at this point.

Thank you. Have a great holiday.

Thank you.

Thank you.

We'll go next to Kate McShane with Citi.

Good morning. Thanks for taking my question. With everything being pulled forward and holiday now really starting at the beginning of November, I wondered if you could comment at all on November in terms of what you're seeing so far from the competitive environment? And is there anything markedly different than you anticipated?

Good morning, Kate, and thank you for the question. Every holiday changes slightly, but every holiday is massively promotional. I think you're right in that, definitely, especially if you look at the trends over the last 5, 10 years, you can see the holiday pulling earlier and earlier, and you can see much bigger peaks on those large promotional periods like Thanksgiving week or like Christmas week. And so that's changing kind of the composition of how holiday builds. I wouldn't say there's anything that I see out there, and I think the team would support this, that we'd say is massively more promotional or massively different year-over-year. It's more how the holidays are flowing, continues to evolve over time. Again, not something unexpected. We even talked about bringing in some of our inventory a little earlier so we could support some of these earlier sales. And so it's not unexpected, but it's definitely kind of changing the composition of the holiday.

Yeah. And one conclusion, Kate, I've drawn from being here for the last several years is that nothing is over until the fat lady sings, meaning that – that's an opera reference, right, okay? No, seriously. You have to wait until the end of holiday to see what the results are because the timing varies significantly, including this year, if you remember last year there was a presidential election. And the consumer was distracted for a few days, so clearly, this year, we're seeing a different pattern. But no conclusion can be drawn until the end of that singing that I was referencing.

That's great. Thank you. And can you just remind us with regards to how the fulfillment to the customers is changing this year versus last? I think you had mentioned that there is a number of cities where you're going to have same-day shipping to customers, and can you just tell us what is incremental this year versus last year?

In terms of what we're offering in terms of shipping options?

Yeah.

So that like last year, Kate, we're offering free shipping with no minimum. So that's not a change. The change is the same-day delivery in 40 cities. That is not free. The charge varies a little bit. I think it's going to be $5.99, I believe the last time I ordered something for same-day delivery, that's what I paid. So that's – same-day delivery in 40 cities is really the new factor.

I think in general, and we talk about some of the supply chain expensing included into the Q4 guide. In general, we're trying to build for speed and flexibility. So it's same day, it's next day, it's two-day, it's weekend, it's cut-off times, it's all those things that the team is continuing to invest in so that whenever customers want it, they have the flexibility to get it in the timeframe that matters to them.

Thank you.

We'll go next to Matt McClintock with Barclays.

Hi, yes. Good morning, everyone.

Good morning.

Hubert, I'd like to actually stay with the In-Home Advisor just for a second. You're hiring 75 more in-home advisers because the demand was better than you thought. I know you alluded to potentially marketing the program maybe this holiday season at some point at your Investor Day. Can you talk about how that went? I know you have a commercial out there, but did you pull back on marketing spend, because there's just been so much demand and you didn't want to maybe frustrate your consumer? Or are your marketing plans continuing exactly how you expected?

Yeah. Thank you, Matt. The plans are continuing as expected. We asked ourselves the question, the marketing team and the store team seeing the early results, reviewed things and the weight of the marketing on in-home advisers is actually relatively light. And so there was no anxiety around that. Our focus is more on operationally doing a great job, we're trying to do a great job of being responsive to customers and reducing these lead time, and so on and so forth. So that's been the approach.

Okay. That's helpful. And then Corie, just a housekeeping question. You extended the share repurchase to $2 billion this year. Can you update us on your thoughts on the level of cash balance that you would prefer to keep on your balance sheet going forward?

Yeah. A great question. And so first, I just want to make sure that I'm clear that we're not updating the $3 billion of repurchase that we set at the beginning of the year over the two years. We still are planning to achieve that amount. That being said, we've never come out and said exactly what we believe the ending cash balance is that we're seeking, but we're very clear that we're using our new capital allocation strategy to make sure that we continue to work that balance down in a really thoughtful way. We've always said and as a reminder, first, we want to reinvest in the business where we feel like we have the right investments and the right return. And so we continue to do that. But at the same point, we're obviously pacing in some of this repurchase and the dividend so that we make sure we return cash wherever possible.

If I could follow-up on that, just theoretically, as your business model shifts more towards service or reoccurring revenue stream that Hubert outlined at the Investor Day, would that imply that you could maintain a lower cash balance than historically on the balance sheet?

Yeah. I mean, I think there's a lot of things actually that work into implying that you likely can have a lower cash balance certainly than we do today. One is just the overall strength of the business and the performance, and that's what Hubert alluded to, these really strong partnerships with our vendors. Those are some of the most important things. And then obviously, over time, as you continue to beef up that stability in your business, that is absolutely what gives you more confidence to go ahead and work that cash balance down.

I do want to reiterate that the development of recurring revenue stream is something that's going to take time. So I don't want you to assume that already next year this could be a very material part of our business. It's going to take time. It's a very meaningful transformation, but it's going to take time.

Got it. Thanks for the color. Looking forward to that though Hubert.

Great. Same here. Thank you.

Thank you.

We'll go next to Simeon Gutman with Morgan Stanley. Simeon Ari Gutman - Morgan Stanley & Co. LLC: Good morning. Good quarter, guys.

Thank you. Simeon Ari Gutman - Morgan Stanley & Co. LLC: A quick question on the earlier one, conservatism maybe on the fourth quarter outlook. Any reason to think that $1,000, as people are veering towards the X that price point could eat into other sales? And then can you just remind me, if I'm buying out the phone versus taking an installment plan, is the revenue any different to you?

So let me start with kind of you referenced really what the share of wallet question, and Hubert even hit on this, which is it is difficult when you have $1,000 price point phone, even a $800, a $500 price point phone. And obviously, when you're thinking about how much of your expendable income you're going to spend on CE, we are quite thoughtful about that share of wallet question, particularly over the holidays when people often go in with a budget and are trying to think about how to stretch that budget as far as they can. And so that's absolutely part of what we are thoughtful about when it comes to Q4. Then obviously, over the last two years, three years, four years, the Q4 has not played like the earlier quarters of the year. And so we're trying to take some of that knowledge we've gained into account as we think about where we believe the fourth quarter is going to go. In terms of the revenue profile, from a revenue perspective, in whatever way we sell the phone, the revenue profile is similar. The piece that looks different is depending on whether or not there's a plan attached to that and what the consumer decides to purchase alongside the hardware. That's what changes the profile, but the revenue profile is the same no matter what. Simeon Ari Gutman - Morgan Stanley & Co. LLC: Okay. And then thinking past fourth quarter and into next year, you're going to have some tough product compares next year. Do you expect the momentum generally to continue? And then will the service offering be meaningful enough next year to enable the business to continue comping, I don't know, at these current rates, but in healthy low-single digit rates?

Yes, obviously, we're not, Simeon, providing guidance for next year today. This year is going to turn out, I mean, so far this year, the growth rate have been very significant. And based on our outlook, would have been a very strong year. We provided two months ago a three-year outlook in terms of the revenue with implied revenue growth rates on a compounded basis that are below the number that we have so far this year. So we're not providing guidance for next year. But yes, carrying over these exact numbers for next year, I would not encourage you to do this at this point in time. Simeon Ari Gutman - Morgan Stanley & Co. LLC: Thank you.

Well, with this I want to conclude our call and really thank you for your continued work on our behalf, following us and sharing our excitement about where we are and where we are going. Sometimes when you look at these numbers, you have to go back a few years ago and thinking about Best Buy with the kind of comps and EPS growth we're reporting today, 4.4% comps and 30% EPS growth on top of a 51% EPS growth last year, you have to almost pinch yourself thinking about where we are compared to where we were five years ago, so very excited, which gives me the opportunity to thank again all of our associates. They are just terrific, amazing, dedicated, big heart, big soul, and great skills. And then finally, we look forward to seeing you in the stores. If you want to get that Sharp, 50-inch, 4K TV at $179.99, I would encourage you to be early in the stores on Thanksgiving at 5:00 because can you imagine that? 4K TV, $179.99, 50-inch, how cool is that? In any event, we'll see you in stores or online, and we'll talk to you next quarter. Thank you.

Ladies and gentlemen, thank you for your participation. This does conclude our call for today. You may now disconnect.