Good day, ladies and gentlemen, and welcome to CDW's Third Quarter 2017 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will be provided at that time. I'd now like to introduce your host for today's conference, Mr. Tom Richards, Chairman and CEO. Please go ahead.

Thank you, James. Good morning, everyone. It's a pleasure to be with you. Joining me in the room today are Ann Ziegler, our Chief Financial Officer; Chris Leahy, our Chief Revenue Officer; Collin Kebo, our Vice President, Financial Planning & Analysis and CFO-International; and Sari Macrie, our VP-Investor Relations. I'll begin today's call with a brief overview of our results and key drivers. Chris will run through our sales organization's performance, and Ann will take you through a more detailed review of the financials. Then we'll go right to your questions. But before we begin, Sari will present the company's safe harbor disclosure statement.

Thanks, Tom. Good morning, everyone. 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 concerning these risks and uncertainties is 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 will 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 2016, unless otherwise indicated. In addition, all references to growth rates for hardware, software and services today represent U.S. net sales and do not include the results from CDW UK or Canada. There was one fewer selling day in the third quarter of 2017 compared to the third quarter of 2016, and one fewer selling day in the first nine months of 2017 compared to the first nine months of 2016. All sales growth rates provided during the call will reference average daily sales growth, unless otherwise indicated. A replay of this webcast will be posted to our website by this time tomorrow. I also want to remind you that 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 over to Tom.

Thanks, Sari. I'm pleased to report that CDW posted another quarter of profitable growth, and for the first quarter in our history, delivered $4 billion of net sales. Results for the quarter included a 10.5% increase in average daily net sales with net sales of $4 billion; a 4.5% increase in adjusted EBITDA to $324.3 million and a 10.8% increase in non-GAAP earnings per share to $1.08. Once again, our ability to deliver this excellent performance was the result of three key drivers; our balanced portfolio of customer end markets, the breadth of our product and solutions portfolio and our variable cost structure. You've heard me talk about these drivers since our IPO, but the way they have contributed to our profitable growth has been very different depending on market conditions. Last year, third quarter results were impacted by macroeconomic uncertainty, which led business customers to focus on sweating assets and optimize every dollar of investment. The breadth of our product offering enabled us to meet customer demand and drove meaningful growth in many solutions that are netted down, like warranties and software assurance. This year, we have a very different dynamic playing out in the market. The business market has been more vibrant and as expected, hardware growth has accelerated throughout the year, driven by both sustained excellent growth in transactions hardware and acceleration in solutions-based hardware sales. Let's take a look at how performance drivers helped drive profitable growth again this quarter. First, our balanced portfolio of customer end markets. As you know, we have five U.S. sales channels; Corporate, which serves customers with coworkers from roughly 250 and up; Small Business, which serves customers with up to 250 coworkers; Healthcare; Government; and Education, each generating annual sales of more than $1 billion. We also have our Canadian and UK operations, which together represent more than $1 billion. Given the different macroeconomic and external factors that impact each of these unique customer end markets, our channels often act in a countercyclical way. For example, in last year's third quarter, results were mixed across the business with Public sales increasing 11%, Small Business increasing 7% and Corporate decreasing roughly 2%. This year, performance was more balanced across our segments, with Corporate up 11%, Small Business up 12%, and Public up 7%. Chris is going to take you through the performance in each of our sales channels. Chris?

Thank you, Tom. Good morning, everyone. Our Corporate team delivered an 11% increase in the quarter. We continue to see ongoing focus on refresh, driving excellent growth in client devices. In addition, continuing the momentum we saw building in the second quarter, solutions growth accelerated as larger projects continued to get the green light. In fact, solutions growth outpaced transactions, but both increased double digits. Small Business increased 12%. We saw a slight acceleration in solutions activity, but for the most part, customer focus was on client devices. Transactions increased mid-teens, solutions increased low-single digits. Public grew 7% in the quarter. Government performance drove much of the increase, with the team delivering 15% growth, driven by balanced performance across both end markets. State and local delivered low double-digit growth, as we continue to drive results from new contracts and success meeting public safety needs. Federal increased mid-teens as we continued to benefit from our strategic program alignment, as well as the shipment of a majority of remaining client devices that had pushed into 2017. Beyond those shipments, we saw excellent growth in client devices as we helped various Department of Defense agencies meet the mandate to move to Windows 10. Healthcare purchasing behavior was once again impacted by the ongoing uncertainty around reimbursements and the fate of the Affordable Care Act, and sales were flat. We did see some transactional activity pickup as some customers determined they needed to move ahead to refresh client devices, but overall demand remained muted. Education sales increased 6%. Higher Ed delivered a high-teens increase, which was driven by client refresh, collaboration and video solutions. K-12 delivered low single-digit growth on top of last year's high-teens growth. The team had success delivering networking solutions, utilizing both E-Rate and non-funded dollars, but that was partially offset by flat client device sales, as schools digest what they have purchased over the past few years and focus on maintaining existing equipment. The K-12 team continues to make progress helping schools create the classroom of the future, and saw excellent growth in related technologies, like video equipment and collaboration. Our International team has delivered excellent growth with combined sales up 25% in U.S. dollars. Canada and UK grew at similar rates in U.S. dollars with Canada benefiting roughly 500 basis points from translation, and UK being negatively impacted by roughly 40 basis points from currency. Both teams are out executing their competitors. In Canada, while concerns regarding trade and the economy remain, the market feels a bit more stable and we saw excellent results in both the public and corporate markets. In the UK, Brexit does not appear to be impacting demand yet. In addition to strong local growth, results continue to reflect excellent success addressing U.S. referrals. With that, let me turn it back to Tom. Tom?

Thanks, Chris. Clearly, the double-digit growth we delivered demonstrates the power of the first driver of our performance, our balanced portfolio of customer end markets. These top-line results also demonstrate the power of the second driver of our performance this quarter, the more than 100,000 products and solutions in our portfolio and more than 1,000 leading and emerging partners. Our ability to meet the total technology needs both solutions and transactional of our customers is one of the fundamental reasons for our consistent performance. Our broad portfolio contributed to this quarter's performance, and we saw balanced growth with transactions increasing low-double digits and solutions increasing high-single digits. As expected, hardware growth continued strong and accelerated in the quarter to 10%, 2.5 times faster than last year's 4% growth rate and more than 200 basis points faster than the second quarter. We continue to see excellent growth in client devices, which once again increased mid-teens. We also saw continued strength in NetComm hardware, which for the third quarter in a row increased high-single digits. Video equipment and collaboration hardware growth also accelerated in the quarter. Server solutions increased low-single digits, but the server hardware component decrease low-double digits, as customers focused on memory additions, virtualization, warranties, and other accessories. Enterprising storage growth accelerated in the quarter, up high-teens. Customers continue to focus on modernizing and optimizing data center infrastructure. Growth across hybrid infrastructure, which includes converged infrastructure, infrastructure-as-a-service, and software-defined data center, was excellent. Converged infrastructure and Flash represented more than 1/3 of our total storage revenues this quarter. A meaningful part of those revenues come from hyper-converged solutions, which doubled in the quarter. In fact, hyper-converged contributed more than 75% of enterprise storage growth. New technologies are clearly impacting hardware growth at CDW. New technologies are also impacting software spend…

Thanks, Tom. Good morning, everyone. As Tom indicated, our third quarter financial results reflect the combined power of our balanced portfolio of customer end markets, breadth of product offerings, and variable cost structure. They also reflect the progress we are making against our long-term financial strategy to drive strong cash flow, deliver low-double digit constant-currency earnings per share growth, and return cash to our shareholders. Turning to our P&L; if you have access to the slides posted online, it will be helpful to follow along. I am on slide 7. Consolidated net sales were $4 billion, 8.8% higher than last year on a reported basis and 10.5% higher than last year on an average daily sales basis. Average daily sales were $64 million. On a constant-currency basis, consolidated net sales were 10.4% higher than last year. Currency impact was slightly positive this quarter, adding roughly 10 basis points to growth as improvement in translation of the Canadian to U.S. dollar more than offset likely unfavorable translation of the British pound to U.S. dollar. On an average daily sales basis, sequential sales were up 2.6% versus Q2 2017, which was higher than last year. Gross profit for the quarter increased 4.5% to $642 million. Gross margin in the third quarter was 15.9%, 70 basis points lower than last year. The decrease primarily reflects the impact of both hardware rate and mix on product margin, which more than offset the impact we saw from netted down revenues. Turning to SG&A on slide 8; consolidated reported SG&A including advertising expense was roughly 6% higher than last year. Reported SG&A also includes $10 million of equity-based compensation and a one-time $4.1 million expense related to the reinstatement of prior year's unclaimed property balances due to a retroactive Illinois state law change. Our adjusted SG&A…

Thank you. Once again, we ask that you have one question and one follow-up. Our first question comes from Matt Cabral with Goldman Sachs. Your line is open.

Good morning, Matt. Matthew Cabral - Goldman Sachs & Co. LLC: Good morning, Tom. Obviously, there's been renewed talk around corporate tax reform coming out of Washington. Just curious if that started to have any impact on your customer spending plans? And if at all, that anticipation is set into some of the accelerating revenue growth you've seen so far this year?

Matt, I would say, I don't think it's been a major factor. I think, like me, many of my peers look at it as something we would like to happen, but we're not spending that buck yet. So, I think more so what's happening, Matt, is a general overall increase in confidence about the economy and where it stands going forward. Now I guess you could indirectly relate that to the potential for tax reform, but I think that's more of what we're feeling is just, as I said, a more vibrant economy and people are moving forward with projects, as you heard Chris alluded to. Matthew Cabral - Goldman Sachs & Co. LLC: Got it. And then as a follow-up, you spent some time on this in the prepared remarks, but international continues to significantly outpace the wider business. So, can you just talk a little bit more about what's driving the continued strength there? And just how you're thinking about the opportunity to expand beyond the UK and Canada over time?

I'm going to let Chris take a run at that since she had a lot to do with the success of the international team.

Good morning, Matt. I'd say there's a lot of things contributing to the performance of international. As you've heard Tom mention on past calls, some of the programmatic approaches that we've brought to the UK and the prescriptive approaches we've taken have done some good things. Some marketing investments we made to bring the orchestration campaign over there, the success in the referral model. We've done a lot of work around that go-to-market and referral model, and we're seeing great strength there. And then we also have an international team sitting there in the UK working on not just UK work, but also opportunities outside of the UK. So it's really what I call a confluence of events. It's focus on that team, it's the collaboration between the U.S. and the UK team, and just a real focus on what we need to do for our global customers. And I would also say that our partners that we're working with have been very collaborative and cooperative in helping us achieve a seamless experience for our customers as well. Matthew Cabral - Goldman Sachs & Co. LLC: Thank you.

Thanks, Matt.

Thank you. Our next question comes from Amit Daryanani with RBC Capital Markets. Your line is open.

Good morning, Amit.

Good morning. I guess a couple of questions for me, too. Maybe start off with on the gross margin line. I think it was down like 70 basis points year-over-year, and you just talked about competitive dynamics and hardware mix. I'm wondering could you just talk about maybe help us understand which was the bigger driver in the quarter year-over-year at least for the competition or the hardware mix? And is the competition really all on the hardware side or is it more broad-based across the portfolio?

Well let me talk a little bit about the competitive landscape, and then I'll have Ann give you a little more clarity, Amit. I would say if you look at it, as I said, one of the things to keep in mind, it is amazing how consistent this year looks compared to what we experienced in 2014. In fact, even from a gross margin tracking through the year and that was the time and we had the big hardware refresh of client devices because of the Windows XP expiration. So we are experiencing almost exactly the same thing, and that had one impact. The second thing is, as you heard, we've had this constant increase of what I'll call solution performance as we've marched through the year, and a lot of that has been hardware refreshing of the data center. So just in general, those two things create what I would call the margin pressure. The competitive landscape hasn't changed dramatically through the year. It feels intensely competitive, and in our case, I know we've walked away from deals that just look like they're not worth making the investment of resources because of what the customer feels like they can get in the marketplace. And I love that discipline about us. I'll let Ann add any additional commentary.

Yeah. The only additional point I'd make is that last year we saw significant benefit from the "mix" into netted down items. We did not add – if you look at last year's Q, we quantified that at roughly 30 basis points. We did not have that impact this year. So it's the absence of that mix, if you will, which you see when you see our hardware sales accelerate across both the transactional and the solutions business. So that would be the single largest driver, and then you have mixing rate as well.

Yeah. Just a really interesting fact. If you look at the netted down revenue growth, it was as strong, almost literally as strong, this year as last year, and you just heard Ann talk about the fact that the growth was pretty strong in netted down revenues. It just couldn't offset this tidal wave of hardware growth we've had going on in the business.

That's really helpful. By the way, I guess maybe, Tom, just to follow that up, how sustainable do you think this hardware growth is as you go forward? I know it sounds like December quarter will be another good quarter for hardware. But broadly, do you think this sustains into early to mid-2018? Especially as you get the server refresh cycle going, which is a one part I think you mentioned that hasn't grown very well the server hardware side. So maybe just talk about the sustainability of this as we go forward.

So I think, let's break into pieces. So the client refresh, we're into the third or fourth quarter. If you look back, just history repeats itself, in 2014 it kind of was a four-quarter refresh. So I don't have clairvoyance on this, but I would say we probably are in the seventh phase inning, as you guys like to ask about that part of it. I think in hardware side, if you look at the hardware side of solutions, and the one thing I'll say, Amit, is the server solutions business, which includes the software and the warranties, has continued to have a pretty good steady-eddy kind of growth trajectory. I would say if the marketplace and the economic perspective stays as vibrant as it has been, then I think we can expect that hardware refresh to continue. Although again, if I look at 2014, it was amazing that the flip happened sometime into the next year where then the solutions and some of the things Ann talked about, which was the netted down software, seems to then surpass hardware from a growth perspective.

Perfect. That's it for me. And best of luck, Ann.

Thank you.

Thank you. Our next question comes from Jayson Noland with Baird. Your line is open.

Jayson. Jayson A. Noland - Robert W. Baird & Co., Inc.: Okay, great. Hello. And, Ann, my congratulations too.

Thanks. Jayson A. Noland - Robert W. Baird & Co., Inc.: I wanted to ask on economics. Tom, I think you mentioned this in the prepared remarks, that we hear – generally hear smaller partners saying things have gotten tougher. But a lot of times larger partners say that services side of the business has created opportunity, investment and opportunity. But I'd like to hear you talk about economics to CDW and if there's been a change there.

Let me make sure I understand, Jayson. Are you talking about just the services business generally in the marketplace? Because if you are, I would say that the change of the IT consumption model and how people are preferring to consume IT is continue to provide, if you will, increased services opportunity. You can see that in our cloud business, the success of our cloud business and our, what I'll call, more professional services business. I'm not sure I know if that's the connection though you're making to the economics. Jayson A. Noland - Robert W. Baird & Co., Inc.: Have your vendor partners put incremental pressure on the hardware side of the business and is services offsetting that? Or ...

No. I would tell you, we talk about this a lot. They're doing what we would do if we were in that place, which is as you move through the cycle of products, you continue to shift where you motivate people to spend their time to those products that are new and strategic to your business. And it's incumbent among people like CDW to anticipate where they're headed and then, if you will, go find the cheese. And so we've been pretty good at staying ahead of where they're asking us to go relative to their new capabilities. Jayson A. Noland - Robert W. Baird & Co., Inc.: Okay, thanks for that. And a follow-up on fed. Mid-teens growth is strong where some others have struggled. I think client devices played a role there. Any other color you would add for fed?

Yeah. I'll take a shot at it and then let Chris give you any extra color. I'd say your instincts are right that the client device driven by a combination of the large orders we've been talking about all year and even though you didn't ask, somebody will. So I'll – about 80% of those are now out the door. So we have 20% left. And then I think the federal government Windows 10 mandate really has driven a lot of the activity. But it wasn't just that group that did well. I would say collaboration, services or other areas that did well in the federal government. So it's been really nice balance. Jayson A. Noland - Robert W. Baird & Co., Inc.: Great. Thank you.

Okay.

Thank you. Our next question comes from Matt Sheerin with Stifel. Your line is open. Matthew John Sheerin - Stifel, Nicolaus & Co., Inc.: Yes. Thanks, and good morning, everyone. Just question again on the gross margin. In your commentary you talked about vendor rebate programs not really impacting the margins. But some of your competitors and distributors have talked about a lot of program changes with some of the big hardware vendors, which are putting pressure on margin. And it sounds like you're managing that pretty well. What's the difference between what you folks are seeing and how you manage it versus perhaps others?

Matt, I'll tell you, I don't really know what others do. So it makes it hard for me to comment on that aspect of it. I think the one thing that I would tell you is we have a mindset that, look, they're going to change every quarter. They're going to change every period. And that doesn't mean that all these changes are lay-ups. It does mean that you've got to try to stay ahead of them when it comes to where they want you to spend their time. So I don't want to suggest that we aren't experiencing the same changes. I think the word that I tried to use was we've been able to kind of not have a meaningful impact of those changes relative to where we spend our time. And that's part of, I think, the art, if you will, of this is assessing the changes and in assessing where you need to make sure your resources are focused so that you take as much advantage of the changes as you possibly can. Matthew John Sheerin - Stifel, Nicolaus & Co., Inc.: Okay. Great. And just on the head count, which I know was up 200 or so, what's left in terms of the expansion plans for coworkers?

I'm sorry, Matt. We're going to – let's make sure I'll answer it the way I think you asked the question is, the – on the customer facing, it's about 130, right? And I think Ann alluded to in the aggregate, it's in the 200 range, so.

Yeah. I think Tom's number is year-over-year and mine was year-to-date. Mine includes total coworkers, right? Remember, roughly two-thirds of our coworker count is customer facing with the remainder being as we refer to it as backbone. So my number was total. But on the customer facing, as Tom said, roughly where we sit today plus or minus 10%. Matthew John Sheerin - Stifel, Nicolaus & Co., Inc.: Okay. So – okay, that's fine. Okay. That's it for me. Thanks very much.

Thanks, Matt.

Thank you. Our next question comes from Katy Huberty with Morgan Stanley. Your line is open.

Good morning, Katy. Kathryn Lynn Huberty - Morgan Stanley & Co. LLC: Hi, thanks for the questions. A lot of your vendor partners are talking about a shift back from public cloud to hybrid strategies. Just curious if that's something that you're seeing in your customer base.

The reason I'm laughing is because this pendulum just kind of swings back and forth and back and forth. Here's what I would say, Katy. I think from – if you have the lens on of a customer that they have been pretty consistent as they kind of march down the evolution of the data center. The workloads that lend themselves, as you well know, to public cloud are going there. But I think the success of what I'll call the on-prem response, be it converged infrastructure or hyper-converged, has made the decision even more – needing to be more thoughtful because now you have some on-prem solutions that provide the economics, the flexibility. And in the end, I think the customer wins because they sit there and say, I have the ability to go workload by workload and decide what makes best for us. And I think you saw some of that. If you just look at our overall success in converged and hyper-converged, clearly, you have customers that are excited about that technology. But on the other hand, you heard me talk about how great our cloud growth is going, so I think it's just the pendulum swinging back and forth. I don't know that I'd call it dramatic, Katy. Kathryn Lynn Huberty - Morgan Stanley & Co. LLC: Okay, that's helpful color. And congrats on the retirement. Quick question for you. You talked about the revolver is higher on the back of hardware growth and also some stocking of inventory. Can you just talk about where that inventory stocking is happening? And is that just an outlook into the fourth quarter? Or is that a longer-term bet?

Yeah. Actually on the inventory, we took some strategic stocking positions in the third quarter in anticipation of price increases across those product categories. So I don't want to be specific on the product categories, but we saw the opportunity and potentially there could be opportunities in Q4 as well. Kathryn Lynn Huberty - Morgan Stanley & Co. LLC: Thank you.

Thanks, Katy.

Thank you. Our next question comes from Sherri Scribner with Deutsche Bank. Your line is open.

Hi, Sherri.

Hi. How are you, Tom? Thanks.

Good, thanks.

Good. So the revenue growth continues to be very strong, and you guided the revenue growth higher yet again this quarter. But it seems like the EPS growth is dissimilar (49:16) guidance, so maybe I'm sort of nitpicking and maybe there's another percent of growth in the EPS and we're at the higher end of the 10% to 12% versus the lower end last quarter. But could you maybe talk about some puts and takes that are giving you as much leverage to deliver that revenue growth down to the bottom line?

Wow. There's a lot in that one. So, I would say if you kind of go back to what's driving the growth. Again, I think it's always important to look at, at least at a company like CDW, the source of the growth. And I'll contrast it with last year where you had a lot of growth in netted-down revenues, software assurance, warranty, where you just have less of a cost of goods sold because you're not buying. And so it creates what I'll call a richer flow through, if I can say it that way. But it does, as we all spent last year talking about why the top line was pressured, it was because of that netted down. This year, you just have kind of, I'll use Chris' word, the confluence of the client refresh, which in general has a lower margin than some of the richer solutions and netted-down services has been driving a lot of the top line. And so that gives you less that kind of drops down through. Now what helps us is then one of the things I love is the beauty of this model where the sales compensation literally follows where the gross profit is, and enables us to make sure we can deliver on our adjusted EBITDA targets going forward, is kind of part of the way this model moves forward as we go through the year.

Okay. That's helpful. And then just thinking about the Education piece, it seems like the growth slowed, you guys have seen some very strong growth over the past couple of quarters. Is that just sort of anniversarying some better growth and some better sales trends there? What are you thinking about going forward? Thank you.

I'm going to let Chris kind of walk you through because it is in some ways the tale of two cities. When you think about Education, it's kind of the opposite of what Education was growing like in previous years. So go ahead, Chris.

Yes. Hi, Katy (sic) [Sherri] (51:29). When you look at Education overall, at 6% growth, we had some solid growth led really by Higher Ed in the high teens. But if we look at K through 12, some of the tailwind from the digital testing mandate and the eRate funds, we didn't experience. And we expected that. And so I'd say about K through 12 is we're in a bit of a transition, moving away from digitizing devices. And that's really moving into more of a maintain-and-refresh cycle. And we're moving towards the classroom of the future which, as you know, is a combination of technology and reconfiguring classroom layouts. So we've already seen some nice uplift in collaboration and video, and we'll look to continue to help our K-12 customers on this, I'll call it, a transformational journey to the classroom of the future.

Okay. Great. Thanks, Chris. And good luck, Ann.

Thank you.

Thank you. Our next question comes from Keith Housum with Northcoast Research. Your line is open.

Hey, Keith.

Good morning, guys. And, Ann, congratulations on the retirement as well. Great news.

Thanks.

If we could just explore a little bit more on the government side of the business. I understand that it's going through the Windows 10 migration here. And I guess first question there is how long, perhaps, would we expect that to last? But with the exception of the fourth quarter last year, the Government segment really has grown tremendously for you guys over the past three years. So if you guys could provide a little bit of color there. Is it a matter of taking share? Because I mean, certainly we haven't seen the federal budgets increased by the amount that you guys have been able to grow that business.

Yes, Keith. First, I want to make sure that we don't miss the pretty sustained excellent performance by the state and local part of the Government team. They had another double-digit quarter, and that's kind of become a long history of performance there. And a lot of that was tied to the solutions we've built around public safety and what it's – the value it's adding to state and local, as well as some of the larger contracts that we've been able to capture over the last couple years because of those solutions. So when you're thinking about Government, make sure you're always, at least in CDW's case, thinking about both state and local and federal. And then I'll let Chris give some color on federal.

Yes, on the federal side, we grew mid-teens. We did see some nice growth there. And while we did have some uplift from the DoD Win 10 mandate and also the remaining client devices from last year, we also saw some good strength around the strategic program alignment activities that we had, so I don't want to miss that kind of base activity on the programs that we implemented several years ago. So net-net, I would say, yes, it does feel like we are taking share. We felt the normal budget flush and on the DoD, in terms of timing, I think you asked that, that mandate is for January 31, 2018 right now. That could change, but that's what we know right now.

Great. Thanks. And if I could just turn my focus over to the SMB. At the beginning of the year, you guys kind of carved out SMB to be a new focus, and I guess any progress in terms of how you think that's progressing? Obviously it's been growing well, but it's in line (54:50) with the rest of the business. Are you satisfied with how it's growing in the trajectory (54:54) time now?

Yeah, I am. I mean, if Doug wants to grow 12% every quarter, I'll be satisfied till the cows come home. So that part of it, mission accomplished. I think they're just now kind of evolving their technical support, so we are looking for increased solution performance as we kind of go forward. But like anything for us, our breadth and scale enables us to focus on either products and/or segments and when we get that kind of focus, we generally get good performance.

Great. Thank you.

Thank you. Our next question comes from David Stratton with Great Lakes Review. Your line is open.

Good morning.

Good morning, David.

Looking at Healthcare, you said that it was around flat for the quarter and that some transactional activity was pushed through. What are you seeing deeper now that there has been two unsuccessful attempts to repeal Obamacare and if this cycle continues to push out? Or do you think this is an inflection point where customers are going to start reinvesting?

Look, this is Chris, and I would say really hard to say. What's happened is it's even more uncertainty, and the uncertainty is continuing regarding insurance coverage and reimbursement. And that's particularly impactful on the larger hospital systems where we have a larger share of the market. So while we have had some success delivering what they are buying, which is client devices, it feels like we just need to hang with these customers until they get better visibility to the income streams, and then we will be preparing to help them with their deeper technology solutions.

But it remains lumpy, my favorite economic description.

(56:48).

Yeah. And I think it's going to stay that way until we get some clarity.

All right, thank you. And then you mentioned Brexit not impacting your European results yet. Is there any quantification that you've made as far as how much you think it will impact, and when you expect to see that?

We have done multiple scenarios, everything from a soft Brexit to a hard Brexit, each of them has different implications, but at this point I don't know that it's – that there is really anything other than scenario planning, because we've got to wait until get to the details. I will tell you, and I think Chris would share this. We have been not only pleasantly but incredibly surprised by the UK's ability to kind of continue to focus on their customers and meet their needs in light of the Brexit overhang.

All right. Thank you.

Thank you. Our final question comes from Mark Moskowitz with Barclays. Your line is open.

Yes, thank you, good morning.

Hi, Mark.

I wanted to ask about international in terms of what do you see looking ahead, Tom, in terms of the customers that inspired you to make the move a few years ago. Are they asking you for two, for that expansion to continue beyond Europe or within Europe deeper, but also beyond Europe?

You know, Mark, that's a good question. Let me go back to a little bit of the history of what they did tell us. Part of the discussion was we need you to help us in other parts of the world. And recognizing that it would be hard with a diverse set of customers to match everywhere they wanted us to be, so they said look, over time, you need to be able to get to, I forget the number, north of 70% or something in that range, of the locations. And so then we looked at, well, where is the majority of their spend today and a majority of their spend today is in Western Europe. So that really is what drove looking and finding fortunately what we call CDW UK today. The one thing that was appealing to us about their approach to the market was that while their base business was headquartered in London, they have this hub and spoke approach where they had field sales offices in other parts of the world. And they had these existing third-party relationships, which in essence gives them a distribution channel themselves to extend where customers need us to go. So, Mark, in a long-winded way, I think we have the platform, would be the way I would say it, to meet customer needs today and tomorrow as they increase. Having said that, we're always going to look for are there places across the world that can enhance our performance of that platform. But the platform today is set up to be successful, and we're going to continue to focus on that.

Okay, thank you. And then speaking of that platform, I was just kind of curious if CDW is benefiting from consolidation in terms of your larger customers out there. Are they consolidating the number of bars and services and solutions providers they work with just to make things more efficient and agile going forward?

Yeah. Thanks.

Before you answer that, I do want to also extend my congratulations to both you and Ann for having a sterling run here pre and post-IPO. It's really nice to see from the sidelines the consistent focus on operational and strategic excellence.

Thank you, Mark.

Thank you.

Thank you. So thank you for asking the second part of the question, because I should've said that in the first part of the answer, which is one of the things that they said to us. And I say this partially tongue-in-cheek was, we love you CDW, but we don't want to love six or seven of you all over the world. So to the degree you can't help us with our international needs as we try to slim down the number of people we deal with, you're going to put your business at risk. So your instinct was right on relative to what they at least shared with us and was one of the motivating factors for us to look aggressively from an international perspective.

Thank you. I show no further questions, so I'd like to turn the conference back over.

Okay. Look, as always, thank you for your questions and your time this morning. Let me once again thank Ann for her partnership. And I'll leave you with this. For those of you that have been investing in your children's health by eating their Halloween candy, I would say shame on you. And you better get back in the gym because Thanksgiving's coming soon. All right, thanks, everybody. See you.

Thank you. Ladies and gentlemen, that does conclude today's conference. Thank you for your participation. You may now disconnect. Have a wonderful day.