Ladies and gentlemen, good morning and welcome to the HSN, Inc. Fourth Quarter and Full Year 2015 Earnings Call and Webcast. This call is being recorded. Following the conclusion of today's discussion, the HSNi team will be taking your questions. With that, I'd now like to turn the call over to Felise Glantz Kissell, Vice President of Investor Relations. Ms. Kissell, please go ahead.

Good morning, everyone, and thank you for joining us. On this morning's call, we have Mindy Grossman, Chief Executive Officer of HSNi; and Judy Schmeling, Chief Operating Officer and Chief Financial Officer. Judy will first review our financial performance, Mindy will then strategically discuss the business. As always, some of the statements made on this call may be forward-looking and as such, are subject to many factors that could cause actual results to differ materially from expectations reflected in the forward-looking statements. Additional information regarding these factors, as well as various risks and uncertainties, can be found in HSNi's earnings release filed with the U.S. Securities and Exchange Commission and available on the company's website. HSNi does not undertake to publicly update or revise any forward-looking statements. Also, on today's call, there will be references to certain non-GAAP financial measures. These are described in more detail in the company's earnings release and SEC filings available on the HSNi website. You are encouraged to refer to the press release and SEC filings and to review the reconciliation of these non-GAAP financial measures to the most directly comparable GAAP results. With that, I would now turn the call over to Judy Schmeling, HSNi's COO and CFO. Judy? Judy Schmeling - Chief Operating Officer & Chief Financial Officer: Thank you, Felise, and good morning, everyone. As we reviewed on the last earnings call, our fourth quarter results would be impacted by heightened promotional activity in the marketplace, the performance of certain brands and merchandising categories, and the tough comps from the prior year. At HSNi, these factors resulted in sales down 2%, with digital sales up 1%, comping 10% sales growth and 12% digital sales growth in the prior year. Adjusted EBITDA decreased of 3% due to Cornerstone's performance and adjusted earnings per…

Thank you. And our first question comes from the line of Neely Tamminga of Piper Jaffray. Your line is now open. Neely J. N. Tamminga - Piper Jaffray & Co (Broker): Good morning, and I hope you guys are safe out there? All right. Mindy Grossman - Chief Executive Officer & Director: Welcome to Florida. Neely J. N. Tamminga - Piper Jaffray & Co (Broker): True. All right. So first primary question for Mindy, and my follow-up is going to be for Judy here. But on the front-end for you, Mindy, when we look at some of your higher-end brands at Cornerstone, we're trying to disaggregate a little bit more of some of the broader commentary we're hearing around the promotional environment versus what's truly kind of is there a slowdown in underlying consumer demand out there for that product, whether it'd be stock market, election, taxes. So some color there would be helpful on how you feel like you guys remain differentiated? And for Judy, on the follow-up question, if I may, the role of FlexPay, I think was pretty – it was exercised quite a bit maybe in Q4 last year, if I remember correctly from the call last year. How did the role of FlexPay compare like this Q4 versus last Q4 with that lower AUR? Did you need to exercise it as much or not to kind of drive that conversion? Thanks. Mindy Grossman - Chief Executive Officer & Director: Okay. So certainly it's a very distracting environment right now between the election, the environment, the market. But on the Frontgate side in particular or in Cornerstone in general, March is really the critical month of the quarter, as you know, the first quarter is our smallest quarter, and we start up with outdoor in –…

Thank you. And our next question comes from Timothy Chiodo of UBS. Your line is now open.

Hi. Good morning. Thank you. In for Eric Sheridan this morning. Our question is around, you mentioned Apple TV, but also in the past, obviously, TiVo, Roku, Amazon Fire, I just want to see if there's any help you can give us on how big those might be so far in terms of either users or engagement, really just any metrics you can help us with around those? Thank you. Judy Schmeling - Chief Operating Officer & Chief Financial Officer: Sure. I'd say that we're actually – some of those are very small obviously in the total scheme of HSN sales. But Roku is by far the most advanced, the one that we have the most sales on. They've been a great partner. We have also launched recently an HSN electronics channel specifically on Roku. So we are learning quite a bit about consumer behavior with us being on all those platforms. We do see that there is deeper engagement once they're on those platforms. So we are encouraged by that. But again, relative to – the current business volume is definitely small, but we think that all of those alternate platforms provide us with the ability to provide our content to that customer where ever she is and we do see that when it's coupled with the Shop by Remote technology, it is incrementally even more engaging with the consumer and they transact faster. Mindy Grossman - Chief Executive Officer & Director: We're also working diligently to elevate the experience at every one of those platforms as an ongoing strategy, to really be as immersive, seamless, give the right video content, so as we have launched new experiences, you really see the elevation of the brand.

Okay. Very helpful. Thank you. And am I missing any there, TiVo, Roku, Apple TV, Amazon Fire, are there any others? Mindy Grossman - Chief Executive Officer & Director: Well, we have Samsung and LG as well.

Right. Okay. Very helpful. Thanks a lot.

Thank you. And our next question comes from Alex Fuhrman of Craig-Hallum Capital. Your line is now open.

Great. Thank you for taking my question. I wanted to ask a little bit more about the line of Joy Mangano products at Target and Macy's and some other retailers. If you could talk a little bit about the margins and just the economics of that relationship? And then as you look across the portfolio of proprietary brands you have, is there anything you're seeing from that retail rollout with Joy Mangano that you think could be extended to other brands that you have? Mindy Grossman - Chief Executive Officer & Director: Well, I'll take kind of the – kind of product piece, and Judy can get into some of the margins. So I just want to remind everyone that we actually did have products in Target, Bed Bath & Beyond and Container Store prior, but just in a less expansive way. So with the opportunity of the movie and all of the PR, et cetera, we partnered with each of those retailers, including a strategic partnership with Macy's to really roll out a full Joy Mangano environment of her innovative products from mops to pillows, to steamers, to hangers, very much around organization, et cetera. So that roll out is complete. It was significant. If you look at Macy's, it was – and it still is full shop. We had the Macy's Herald Square windows. And again, we are as pleased as they are with initial response. To your point, we are evaluating other businesses that we might have and are there strategic partnerships, whether they be permanent or certain times of the year, which may make sense for us to partner with somebody having a physical presence. Judy Schmeling - Chief Operating Officer & Chief Financial Officer: In terms of the margin and how we view the business,…

Great. That's very helpful. Thank you very much.

Thank you. And our next question comes from Trisha Dill of Wells Fargo Securities. Your line is now open.

Great. Thanks very much for taking my questions. First, I just had a follow-up on the consumer and the promotional environment. I'm just wondering if you can comment on how the environment looks so far this quarter, whether or not it's stabilized a bit since Q4? And then you mentioned higher shipping promos again as a headwind to gross margin in Q4. I think last quarter you talked about that being more reactionary rather than planned. So just wondering if you saw sort of that same dynamic in Q4, and what that might mean for the next several quarters? Thanks. Mindy Grossman - Chief Executive Officer & Director: So I would say that we haven't really seen a tremendous difference in the environment with the exception of the fact that we don't have the weather-related issues that we certainly came up against in the fourth quarter, which affected our seasonal and warmer weather businesses, I mean, that was very distinct. But if you look at our categories of business specifically, at HSN, the merchandise changes, what we said, we are in the process of course correcting, the strategy is in place as I outlined, and we have said that we see sales to improve over the course of the year. We have to control what we can control, notwithstanding the environment. Judy mentioned kind of the net impact on the IDL business, but I would also include that in Q1 last year, we had a notable contribution from the Keith Urban direct response business, which we won't have this year. And I already spoke about Cornerstone, obviously, March being a critical month. So that's kind of an overview of how we're seeing things. But as we both mentioned in our call, we're realists and we want to be able to…

Thanks. Very helpful.

Thank you and our next question comes from Barton Crockett of FBR Capital Markets. Your line is now open. Barton E. Crockett - FBR Capital Markets & Co.: Okay. Great. Yeah, I wanted to poke a little bit more at the expense and the margin, which was a highlight this quarter, I mean you guys seem to do a good job hanging on the margin in a tough retail environment. You know, looking ahead to 2016, could you just update us on how much CapEx you expect to spend? And then more broadly, how do you feel about your ability to hang on to your EBITDA margin across both HSN and Cornerstone if we continue to have this kind of sluggish top line environment with the shipping and handling pressures, but the cost benefit of the automation that you described? Mindy Grossman - Chief Executive Officer & Director: Sure. So in terms of our annual CapEx spend, it's going to continue to be in the $60 million to $70 million range. In 2016, we will be completing our warehouse automation project, which is a good chunk of that spend, but we are also going to be embarking at HSN on our next wave of transformation, which is our merchandising platform, which was originally developed in the 1990s. So we do anticipate that that is going to take us a couple of years to be able to implement that project, but we'll be able to continue to drive further margins within our business, as well, at HSN. So we're very excited to get that project off the ground. So to your question on EBITDA margins, we are obviously doing everything that we can, as evidenced by our reorganization, to be able to continue to improve our EBITDA margins giving the sluggish…

Thank you. And our next question comes from Anthony Lebiedzinski of Sidoti & Company. Your line is now open. Anthony C. Lebiedzinski - Sidoti & Co. LLC: Good morning. Thank you for taking the questions. So my first question is, if you could perhaps attempt to quantify the impact of the warmer weather on your business in the fourth quarter? And as a follow-up, I just wanted to drill down a little bit more into the gross margin by each segment? HSN on an adjusted basis, down only 10 basis points even though you did have a shift to more lower margin electronics, I just wanted to get a little bit more details about that. And then Cornerstone, what drove the gross margin improvement there? Thank you. Mindy Grossman - Chief Executive Officer & Director: So there were two primary areas that were impacted by the warmer weather. On the HSN side, it was very much in the home side, and somewhat in the apparel and accessories side. So on the home side, we traditionally have very strong sales in things like heaters, fireplace, flannel bedding, fleece and all of that, and it was definitely – snow blowers, the things you put on your windshields, things that have traditionally had a strong trajectory. So we definitely saw that, which is why we're moving to some of that inventory. On the Cornerstone side, it was more in the seasonal products. We definitely saw a pullback in Christmas decor and trees and the green and reddish, as I think people just felt that they weren't investing in that or they weren't feeling it, so those were the primary areas. And seasonal is a business that's in Frontgate, in Grandin and in Ballard. Now, some of those brands they were able to have…

Thank you. And our next question comes from Matt Harrigan of Wunderlich. Your line is now open.

Oh! thank you. This is bit of a fuzzy question, but every year around this time, PwC, the consultancy out of London, comes out with their total retail survey. One of the interesting findings this year was that some of these top brands have actually accreted value at five times the S&P average over the last 15 years. The U.S. list, I mean top 10% guys, it's a lot of retailers. Fortunately you or QVC aren't on the list. But with everything so image-oriented and trying to keep the consumer entertained and all that, how do you feel about your brand equity and how it translates to your equity market cap and the momentum you have with the consumer? Clearly, that's been a focus area for you. It's pretty hard to quantify, but just sort of is interesting, fuzzy question, I thought I'd run it by you. Mindy Grossman - Chief Executive Officer & Director: No, no. It's interesting commentary, because as we all know there have been a lot of studies that have come out of late whether that's this shift of consumers experiences, the importance of loyalty and brands and the importance of creating a differentiated destination that's going to have meaning with the consumer, and we definitely believe that is important. We feel that we have brands with very strong equity that are content driven, meaning brands. We have very loyal customer constituencies and the more we become sophisticated in our utilization of data analytics to use them to create further meaning with our customers. I think the second thing that's important, and certainly on the HSN side is, we have always had entertainment and storytelling as a core part of our strategy. Going forward, we want to continue to put that on steroids, because we feel that the more experiential we can be and the things that we have tested, whether it be our Monday night show programming or American Dreams, our Steals and – our Deal Hunter with Tory Johnson, our partnerships with the movie studios, which we have a number of plans throughout this year and reinvigoration of our music series, all of that is very important to keep engagement and destination. And we're applying the same things to our other brands as well. And it means different things to different brands. The Ballard store, it – we don't even call it a store, it's a design studio, and the amount of engagement we're having, the store actually has a design studio in the center of the store, you can – using technology and throwing up your Pinterest boards. These sort of things I think are critical for both brand equity, consumer engagement and creating a differentiated experience.

When you look at Amazon perceptively launching a proprietary clothing brand, I don't know whether that would install some of the elements that you have in terms of the nexus with the consumer and storytelling and social and all that. Is that anything that gives you a pause or do you think it's kind of lost within a very broad retailing landscape? Mindy Grossman - Chief Executive Officer & Director: You know, we're constantly looking at what everyone is doing in the landscape, because we have to. We have to be cognizant of anything that's going to be a sea change or a shift. And we take all of that and then we say, well, what is our proprietary point of differentiation and why is someone going to shop with us? And we don't – if you look at our fashion business, if you go on hsn.com, we're in the middle of our spring fashion series. There is so much content and editorial that it's not just selling clothes, right? We're integrating beauty into fashion, into accessories. We're using Stylitics to really create a very different editorial experience, and that's what we have to do, as well as storytelling. So for today, it's not just private label products, it's Giuliana Rancic on air talking about style and why her products are right for the season. So that really creates a different point of differentiation for us.

Thanks, Mindy.

Thank you. And our last question comes from the line of Victor Anthony of Axiom Capital. Your line is now open.

Thanks. Thanks for taking the questions. Just a few. The first one is, maybe you could just give us an update on your relationship with Liberty, QVC? Has that changed? That's one. The second is, on your leverage ratio, I think you're comfortable – you've said you're comfortable with I think 3.5. Anything to update us there? And third, on your warehouse automation, I think the cost savings you talked about in the back half, maybe can you help us allocate where those cost savings are, just mostly COGS, OpEx, CapEx, so I get a sense of how I should think about that? Mindy Grossman - Chief Executive Officer & Director: Sure. Nothing has changed with our relationship with Liberty, they still have two board seats. They own 38.5% of the company. In terms of, I think your second question was on our debt leverage. Actually, we've never said 3.5 times. We said 2 to 2.5 times, just to be clear on that, you must be confusing us with someone else. So we're very comfortable in that general range. And then I think your third question – I'm sorry, what was the third question?

Just the cost savings from your warehouse (55:53)... Mindy Grossman - Chief Executive Officer & Director: Oh! The cost savings. So yes, so we expect that, like I said, that'll be once we launch, that'll be in the back half of the year. And that does hit our cost of sales line. So it does hit gross profit.

Okay. Thank you.

Thank you. And I'll now turn the conference back over to Ms. Grossman for final remarks. Mindy Grossman - Chief Executive Officer & Director: Well, thank you, everyone. I look forward to touching base, and you'll be happy to know that tornado has passed. So we will talk to you soon. Thank you.