Good morning. My name is Sade and I will be your conference operator for today's call. At this time, I would like to welcome everyone to the CDW 2015 First Quarter Earnings Conference Call. All lines have been placed in a listen-only mode to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. I would like to remind you that today's conference is being recorded. If you have any objections, please disconnect now. It is my pleasure to turn the call over to CDW's Chairman and Chief Executive Officer, Tom Richards. Mr. Richards, you may begin your conference.

Thanks, Sade. Good morning, everyone. It's a pleasure to be with you today and to report on our first quarter results. Joining me on the call today are Ann Ziegler, our Chief Financial Officer; Chris Leahy, our General Counsel; and Sari Macrie, our Vice President, Investor Relations. I'll begin today's call with a brief overview of our results and key drivers and we will run through the financials and then we will go right to your questions. But before we begin, Sari will provide a few important comments regarding what we will share with you today.

Thank you, Tom. Good morning, everyone. Our first quarter 2015 earnings and dividend release were distributed this morning and are available on our website along with supplemental slides that you can use to follow along with us during the call. I'd like to remind you that certain comments made in this presentation are considered forward-looking statements under the Private Securities Litigation Reform Act of 1995. Those statements are subject to risks and uncertainties that could cause actual results to differ materially. Additional information regarding these concerns – these risks and uncertainties are contained in the Form 8-K we furnished to the SEC today and in the company's other filings with the SEC. CDW assumes no obligation to update the information presented during this webcast. Our presentation also includes certain non-GAAP financial measures, including non-GAAP earnings per share. All non-GAAP measures have been reconciled to the most directly comparable GAAP measures in accordance with SEC rules. You'll find reconciliation charts in the slides for today's webcast as well as in our press release and the Form 8-K we furnished to the SEC today. Please note that all references to growth rates or dollar amount increases in our remarks today are versus the comparable period in 2014. The number of selling days for the first quarter are the same for both 2015 and 2014, so there is no difference in growth rates for average daily sales and reported sales. A replay of this webcast will be posted to our investor relations website, investor.cdw.com, by this time tomorrow. I also want to remind you this conference call is the property of CDW and may not be recorded or rebroadcast without specific written permission from the company. And with that, let me turn the call back to Tom.

Thank you, Sari. We had a good start to the year as we successfully address transitioning customer priorities and leverage the strength of our business model to deliver excellent profitability on solid top-line growth. Net sales were $2.76 billion up 3.9% above last year, 4.5% when adjusted for the impact of currency translation. We delivered Adjusted EBITDA growth of 8.8% and non-GAAP EPS growth of 19.5%. These results reflect the impact of three key drivers; our balance portfolio of channels, our broad product and solution suite and the impact of mix on our profitability. The first driver of our results, our balance portfolio of sales channels, helped us offset the impact of changes in some of our customers' focus and priorities. Corporate performance of 4.5% growth reflected the benefit of our channel balance. MedLar grew 3.1% as customers pivoted from last year's focus on client devices toward data center and other integrated solutions. MedLar solutions increased in mid-single digits while transactional sales declined low-single digits. Small business performance was more balanced between solutions and transactions with excellent growth across the board up 12.7%. Balance also contributed to public performance which was up 3.7% as government and education helped offset a 5% decline in healthcare. Healthcare results reflect the lumpiness we discussed last quarter as a handful of our largest customers shifted their focus to reducing cost as part of merger consolidations. We also saw continuation of budget compression given the ongoing reimbursement pressure. Government results were excellent up 13.5% reflecting the overlap of last year's decline in federal and solid state and local performance. Education increased 6.8% reflecting high teens growth in higher ed and low-single digit growth in K-12. As expected, K-12 buying activity slowed in the quarter as school district shifted focus to spring common core testing as…

Thanks, Tom. Good morning, everyone. As Tom indicated, we had a good start to the year as we successfully addressed transitioning customer priority and leverage the strength of our business model to deliver excellent profitability on solid top-line growth. Turning to our P&L, if you've access to the slides posted online, it will be helpful to follow along. I am on slide seven. Net sales were $2.76 billion, 3.9% higher than last year. Average daily sales were $43.7 million, on a sequential average daily sales basis, sales were down 9.7% versus Q4, 2014 below recent Q1seasonality. While sales in Canadian dollars are a relatively small portion of our total revenue less than 5%, the strengthening U.S. dollar impacted consolidated net sales by approximately 60 basis points in the quarter. This compares to Q4 and full year 2014 impact of 40 basis points. Gross profit for the quarter increased 7.4% to $456.5 million. Gross margin in the quarter was 16.6%, 60 basis points above last year. Improvement was primarily the result of four factors; first, higher product margin which is primarily driven by improved notebook margins reflecting the impact of fewer large low margin refresh project as well as mix into higher margin notebook. Second, the positive impact of higher margin advanced technology services which grew faster than overall sales and third, the higher mix of net service contract revenues which are booked at a 100% gross margin including roughly 10 basis points from the higher mix of SaaS. Keep in mind that this reflects mix. This Q1 product sales and associated margin growth was substantially slower than last year, although net service contract revenue was still relatively small, its year-over-year impact this quarter is magnified. As product growth reaccelerate, the net service contract revenue mix impact on gross margin will…

Our first question comes from the line of Brian Alexander of Raymond James. Your line is open. Brian G. Alexander - Raymond James & Associates, Inc.: Okay, thanks. Good morning. Ann and Tom, if I apply normal seasonality for the second quarter, which is typically up I think around mid-teens sequentially, and then use your roughly 48%-52% split for first half, second half, I get roughly $12.5 billion in revenue for 2015, which is up about 3.5% year over year. So if that math is roughly right, can you just reconcile that with your goal of growing 200 to 300 basis points above the market and just indicate whether your market assumptions have changed from the 3% to 4% range you gave a quarter ago? Thanks.

Hey, good morning, Brian, it's Tom. So let me answer the last part first. The market assumptions haven't changed. We still think the market's going to be in the 3% to 4% and as I stated, we're committed to outgrowing the market by 200 to 300 basis points. I think one of the things that people need to keep in mind is while I think there will be some sense of normal seasonality, the uniqueness of last year, because of the client refresh and the impact on the business, I think will make comparing normal seasonality a little unusual this year. Just because as you heard us talk about the shifting priorities of customers moving from transactional back to client. So – and also I alluded to a number of things that I think will accelerate some of our top-line performance. As an example the K-12 organization and the success in E-Rate as we go through the rest of the year. Brian G. Alexander - Raymond James & Associates, Inc.: Okay. All right, thanks. And just a follow up will just be on Kelway. It sounded like you were very pleased with the results in the quarter, but there's maybe some positive seasonality to the business. Just any more color on the operating performance? I know it's early in the relationship, but just how is the relationship going relative to your expectation?

Your assessment is accurate. We are pleased, although it's still relatively early in the process, but Kelway continues to perform well. We're very encouraged by as we get closer and work closer together about the way we're going to be able to serve multinational customers. And I would tell you that it's going as planned at this point. Brian G. Alexander - Raymond James & Associates, Inc.: Great, okay. Thank you very much.

All right. Thanks, Brian.

Our next question comes from the line of Sherri Scribner of Deutsche Bank. Your line is open.

Hi, thanks. Tom, I was hoping to get a little more detail on your thoughts about the PC business, obviously we had a refresh last year, and now we're seeing some weakness on the desktop side, but are you hearing anything from your customers or suppliers about their expectations for the second half of the year?

Hi, Sherri, good morning. Thanks for the question. I would tell you, I've said this to our team, I think the PC business for us feels like it felt in 2013 and 2012 which is, you know, when I think people were reporting the death of the PC business for us, it continued to be a good growth category because of our exclusive focus on B2B. And that's, it feels like that's where we are again. If you heard me talk about our notebooks and mobile device growth that was, we had a good quarter. I think we're going to work our way through the desktop issue which really was driven by Windows XP. So – and I think I talked about this last quarter, we wouldn't expect to repeat the kind of exponential tailwind we had last year in the client business. Having said that, we still expect the PC business to be a good part of our growth profile for this year.

Okay, great. And then just following up on the previous question, thinking about gross longer term as you shift to more of these cloud services businesses and other things that are 100% gross margin, how do you think that affects your long-term growth profile, how much of a percentage of your business is that now and is that a drag for you? Thanks.

It's still a relatively small part. When you think of the $12 billion company, but it's an increasing part as customers look to implement what we have said for a while is hybrid solutions to their computing needs so to speak. I would say, again I would point back to the profile for this year feels like the profile of 2013, where we had real balance between client devices and solutions, and had the kind of growth trajectory that I think we're talking about this year. I don't envision while we had a really strong quarter from a gross profit perspective and both Ann and I alluded to some of the reasons why. At this point, I wouldn't say it is so big that it is going to be a meaningful pressure on our top-line growth. I think the bigger challenge as many of you pointed out to me in the first quarter will be just jumping the comps that we had from last year's phenomenal season is part of the challenge this year.

Thank you very much.

All right. Thanks, Sherri.

Our next question comes from the line of Amit Daryanani of RBC Capital Markets. Your line is open.

Hey, this is Mitch Steves filling in for Amit here. I just had a quick question in terms of your debt level. So you guys are already at 3 times, so does that imply that you guys are going to do some refinancing or keep the debt levels where they are going forward?

Hey, (34:58). We've said that our target ratio is about 2.5 to 3 times. We're at 3 times. We have finished the refinancing of all the high cost debt at this point, so I wouldn't expect us to be doing any refinancings over the short to medium term, and we do expect to maintain our leverage ratio in the 2.5 to 3 times range.

Got it and then on the gross margin side, so since you guys are guiding it to essentially decline a little bit, is that going to be more of a mix issue or revenue deleveraging or how do I think about that for the next, call it three quarters.

It is more of a mix issue as well as I called out in my remarks, we did have a one-time item that benefited us in the quarter, so that obviously wont reoccur, in fact it will reverse in the fourth quarter and then the other items are more attributable to mix. The mix into net service contract revenue in the quarter because net service contract revenues grew at a higher rate than product, you don't see that impact on the top line, but you do see it in the gross profit line and again as product growth accelerates a bit as we move through the year that mix impact will dissipate.

Got it and just real quick to clarify, so for the one-time item in the gross margin, what was the impact on the percentage there?

It was 10 basis points.

10 basis points, okay. Thank you.

Thank you. Our next question comes from the line of Tien-Tsin Huang of JPMorgan. Your line is open.

Thank you, good morning. Just on the – a question on the solutions side, any comments or call out on average deal size, it sounds like it could be expanding, so just trying to get some color on that?

No, it would be tough to give you the perspective and dimensionalize average deal size. I think you heard me give you a couple of examples in the text about those kind, but not all solutions are that complex and of that magnitude. I think the best way to think about it is they tend to be more margin rich as we think about the solutions business, I think that played out a little bit this quarter and will play out as we kind of mix back into a more balanced approach between transactional and solutions.

Got you. And so just to clarify again on the last comment, did you change in anyway your outlook for the year in terms of transactional versus solutions growth?

Well, I don't think we gave an outlook on transactional versus solutions.

Right.

When we talk about it, we just generally talk about our commitment to outgrow the IT market by 200 to 300 basis points, and I think one of the things Ann just alluded to, you know, we would expect the hardware business to accelerate a little bit from what we saw in the first quarter and that will help drive top-line growth but it also then puts a little more pressure on the margin.

Understood. Thank you. Good work on the margins. Thanks.

All right, thank you.

Thank you. Our next question comes from the line of Katy Huberty of Morgan Stanley. Your line is open. Kathryn Lynn Huberty - Morgan Stanley & Co. LLC: Yes, thank you. In your remarks, you mentioned that you're watchful of the impact of economic conditions on the small business segment. I just wonder if you can give us some more context given that that segment actually accelerated in terms of growth in the first quarter. So I guess what drove the acceleration in Q1 and why would you be watchful for the remainder of the year?

Thanks, Katy. Good morning. Couple of things. One, if you think about small business, they started to accelerate the middle of last year and had a strong quarter in the third and fourth quarter. It obviously continued from an execution standpoint but the reason I make that comment is because that group probably sooner than any other group recognizes anything that we see as kind of an economic shift whether it's a change in consumption, a reaction to interest rate and so we probably look at them closer when it comes to what's going on with the economy. So it was just the kind of keep that out there as we kind of see how the economy plays out for the rest of the year and what happens with as I said interest rate and what impact that might have. That's kind of the reference. Kathryn Lynn Huberty - Morgan Stanley & Co. LLC: Okay. And as you noted, you're happy with the Kelway results. Can you remind us what the factors are that would influence you to potentially hit the option of acquiring the full business earlier in the timeline versus later in the June 15 to June 17 timeline?

Yeah. I don't think we laid out a set of factors, Katy. When we talked about the acquisition, part of the reason we structured it the way we did was the kind of follow the typical CDW measured and thoughtful approach to looking at something as significant as this type of acquisition. Like I said, we're pleased with how things have started. You know it will be a function of how CDW is doing, how we feel about our readiness to do the integration, how Kelway is doing? All of those things kind of enter into doing one of these type of things successfully and that's our most important priority. Kathryn Lynn Huberty - Morgan Stanley & Co. LLC: Okay, got it thank you.

All right, thanks, Katy.

Thank you, our next question comes from the line of Jayson Noland of Robert Baird. Your line is open. Jayson A. Noland - Robert W. Baird & Co., Inc. (Broker): Okay, great thank you, good morning.

Hi, Jay. Jayson A. Noland - Robert W. Baird & Co., Inc. (Broker): I'll ask on data, data center. Storage was down, and it sounds like that was one partner driven, are you comfortable with how you're positioned broadly going forward in storage?

Yeah, really, really comfortable. If you heard the preamble to that lots of growth in the, what I'll call the newer technologies, disruptive technologies, you heard me mention flash, you also heard me mention that 7 out of our 8 top partners grew. So feel really good about that. And I think if you look back, I was looking at it yesterday at our storage performance, it's been kind of lumpy, it kind of – we'll have a really good quarter then we'll have a flat quarter and I think some of that is just the shifting that's going on in the storage marketplace both with the incumbents and the new entrants, and as you know, Jayson, we bring on a meaningful number of new partners every year, a lot of those partners have been in the storage space and so you've got little bit of a transformation going on. And then you couple that with the success of converged infrastructure and the impact that has, it's no wonder that it's kind of got this inconsistent behavior at this point. Jayson A. Noland - Robert W. Baird & Co., Inc. (Broker): Okay, that makes sense and then elsewhere in the data center, it looks like server and network is a little more predictable, a little more visibility?

Well, I would say, I don't know about predictability and visibility, I will say the performance has been more consistent. If you think about it, like I said, I think we've had five quarters of improvement in our server performance, and you know, lot of that is us being very focused on that part of the marketplace, a lot of it is the Win 2003 expiration and the little bit of tailwind that gives you – and if you look at net comp for us, it has been one of if not the most steady product set of the data center that we've had. They have been a pretty steady performer, I think back to almost two years to three years now. Jayson A. Noland - Robert W. Baird & Co., Inc. (Broker): Okay, thank you.

Okay. Thanks, Jayson.

Thank you. Our next question comes from the line of Bill Shope of Goldman Sachs. Your line is open. William Charles Shope - Goldman Sachs & Co.: Okay, thanks. I wanted to get a bit more color on that net service contract revenue just to make sure I'm understanding it on a go-forward basis. I guess, how should we think about the magnitude of that contribution of gross margin? Is it something we should assume is a naturally lumpy stream, and I guess for this quarter, was it larger than expected on an absolute basis or was it really just a mix dynamic as you mentioned with the products coming in a bit – or transactional coming in a bit lower?

In terms of the magnitude, the dollar amount that it contributes to gross margin or gross profit – to gross profit, that's relatively consistent, it's a good, steady grower, quarter in and quarter out. This quarter, it grew more rapidly than our product gross profit, and therefore it had an outsized contribution in the growth and was therefore – it was really a mix impact that you were seeing. William Charles Shope - Goldman Sachs & Co.: Okay.

But it is a good steady grower. We do expect it to continue to grow and contribute to gross profit. William Charles Shope - Goldman Sachs & Co.: Okay, great. And then the relative strength you're seeing in small business, I just want to clarify. Could you highlight whether that includes accelerating strength in PCs and across the transactional segments as well? I understand that you're seeing the solutions activity and it's balanced, but are you still seeing accelerating strength across the client side as well within small business?

Yeah, we did see growth in client but it was balanced with equal amount of strength in our solution business, Bill, which was really encouraging. When we get that kind of balance, it really enables us to not only expand or maintain the margins that you just talked about with Ann but also gives us a level of consistency. William Charles Shope - Goldman Sachs & Co.: Okay, great. Thank you.

Our next question comes from the line of Anil Doradla of William Blair. Your line is open. Anil Kumar Doradla - William Blair & Co. LLC: Hey, guys. Tom, I had a couple questions. On the healthcare side, can you give us a sense of what's going on? Clearly, I mean, we had Obamacare from last year, there was some pause. We get the sense that people are kind of rushing towards embracing digital technologies, a lot of chaos in the IT systems. So clearly there's a very positive trend. So trying to reconcile some of your commentary. And as the year progresses, how does it play out?

Well, I think – what you say is true. I think technology will be an important part of some of the efficiencies and effectiveness. But at least in our customer base, we've had a number of mergers. And that's not, I don't think unique to our customer base. And when those mergers happen, you're going through the process of integrating the two companies and trying to create synergies and cut costs, and I think when that happens that becomes an important priority for the business. That isn't to say, as I tried to allude to, that we don't think that when that dust settles that we'll continue to see healthcare as a growth segment for CDW. The second was, look, everybody's under the, what I would call the pressure of the reimbursement process, the demonstration of meaningful use when it comes to technologies, and I don't think that is going away. That I think will be a consistent for all healthcare organizations. So when I think about our healthcare business for this year, I think, I wish I had a more articulate word than "lumpy," but I think that's what it's going to be. I think it's going to bounce around. We're going to have quarters where we do better than other quarters. But I continued to maintain that long term that is a growth segment for us, because in spite of how well it's done, we still have a relatively small market share in this segment, and therefore the opportunities are really significant. That was really reinforced recently at the HIMSS conference with the number of people that we talked to and their excitement about ways in which CDW can help them. I just think it's going to be a little bit of a lumpy market for the rest of this year. Anil Kumar Doradla - William Blair & Co. LLC: Good. And, Tom, as a follow-up, when you look at the commentary by some of the IT service providers, whether it's the Cognizants, (47:26) and everything. Clearly there's been a very material shift in their commentary where they're talking about budgets really freezing, reallocation towards digital solutions. We're seeing some of that in your results, too. But can you walk us through – if client budget are frozen and they're talking about not even expanding it, how does it percolate down to you, this whole shift towards digital? Is that shift good enough for you to offset some of the headwinds? Well, this quarter we saw some of the positive impacts by that. But just walk us through qualitatively how you're looking at the remainder of the year with some of these kind of budget freezes going on across the board?

I'll tell you, I'll answer that the same way I've answered it with my sales leaders. While there are budget freezes, those budget freezes are on top of budget growth that has happened for the last two or three years. So there still, I think, represents a significant amount of spend out there for us to kind of go after and help customers with. What I worry about is when budget freezes turn into budget reductions, because then that reduces the market opportunity. So at this point, we still believe based on my comments about our growth for the year that there's a significant opportunity out there for CDW, and despite the fact that we're the largest player of our type by a meaningful factor in the marketplace, we still only have 5% to 6% share of our addressable market. So feel comfortable there's enough opportunity out there at least at this point. Now again as I answered Katy's question, you got to kind of monitor what goes on with the economy and as one example clearly we had customers impacted this quarter by the foreign exchange issue and you just got to look at that and how does that impact their decisions going forward. Anil Kumar Doradla - William Blair & Co. LLC: Great thanks a lot, Tom.

All right thank you.

Thank you. At this time, I am showing no further questions. I would like to turn the call back over to Mr. Tom Richards for closing remarks.

All right. Thank you again to everybody for taking the time and joining us this morning. We appreciate your interest and your questions. And as I always say, if you need some help with your technology, CDW is more than happy to help, and you know, how to get hold of me, and the last thing is, it's a big weekend for everybody, so Happy Mother's Day out there to all you moms, see you.

Ladies and gentlemen, thank you for your participation in today's conference. This concludes the program. You may now disconnect. Everyone have a great day.