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#Yes.
<UNK> <UNK> is here.
<UNK>, so why don't you take the first part, and then <UNK> can follow up.
Hi <UNK>, thanks for the question.
And I'll lead off with the margin comps.
We anticipate that we are going to do a lot of ---+ we are going to have a lot of growth in our TV business this year.
DIRECTTV is a new product that we have only sold in stores for a little over a year now, and we are anticipating we're going to be able to double that business.
We also have some programs in place that are going to be outside of the four walls.
We think small- to medium-size businesses are a segment that are underpenetrated today, and we have a unique position with the scale we've created with 1,500 stores to be able to get out and attack those small- to medium-sized businesses.
So we have some unconventional ideas, I would say, on how we are going to drive more profit into those retail stores.
And we're excited about those.
In terms of the margin, we also have a great opportunity for us to bring some additional accessory products and services and move upstream into the retail stores.
And I would say specifically things that are in the connected home category that might connect to Apple's Home technology on the smartphones that we are selling or Samsung's SmartThings.
Those are both really good opportunities that we haven't brought into the stores yet today.
In terms of the operating margins, <UNK>, with the growth in the store count that we had last year through the acquisitions, we have the opportunity to really leverage the infrastructure that's in place around the business.
And that will help as well.
I think we have to get back to you on that one.
I don't really have that information off the top of my head.
Approximately $0.03 that would be related to the interest expense that I talked about being $5 million higher year-over-year.
The remainder would come from the operating earnings which I mentioned would ---+ we expect to decline between 3% and 10%.
No.
Well, we talked about the dividend payments, and we raised the dividend 2.7%.
It's now $1.52.
And we would expect that that would have about $155 million payout, given the share count.
In terms of further use of free cash flow, we talked about the priorities being to drive growth initially and then, to the extent available, free cash ---+ excuse me, buyback.
Let me provide some color on that, <UNK>.
It's no secret that we've been a strong buyer of our stock.
We've bought over $2 billion, and I think we've done the right thing on that, and we've demonstrated a willingness to return cash to shareholders.
Our dividend speaks for itself; it's a very healthy dividend.
It's a good holding.
As we face into the future, there's a lot of uncertainties, as you just saw, in holiday for us.
The physical gaming category is in a ---+ what we think is a cyclical decline before a new set of technologies.
We need to see Switch, we need to see PlayStation VR, and we need to see E3 before I think we can make any guidance or forecast.
It is logical to assume we would return all cash flow over and above investments, but we're not ready to make the statements until we see what has been an uncertain category play out.
I'll let <UNK> answer that question.
But just one comment for all of you guys ---+ I hope you've played it.
If you've played it, that's the best way to know that it has tremendous broadening potential.
<UNK>, what would you say about our sales and ---+.
I would also add that Nintendo has got several more great games they're launching this year for the console, which we didn't see with the Wii U.
Mario Kart 8 will be in April and there's a couple more that I don't think have been announced yet, as well as there's some good third-party publishing support on the Switch, which we really didn't see with the Wii U either, and that will drive demand.
So the way we see it is all the data says it selling.
There's tremendous demand.
Everything we do, it seems, sells out quickly.
But if you play the device, it's far more focused on motion and on the controllers than it is ---+ the Wii U was very focused on the tablet, and a lot of the gameplay revolved around touching the tablet and all that sort of thing.
This one feels a lot more broad ---+ a lot more movement associated, and we think that's going to be a broader appeal.
We'll see.
We'll see what they announced on numbers.
In terms of the stores that came with the acquisitions, we acquired larger businesses last year.
And they had a portfolio of stores, some of which were performing extremely well and some of which were not performing.
And unfortunately, we couldn't cherry pick what we bought.
We knew that we would have to deal with some number of these stores.
And so you see part of that ---+ you see that in part of these numbers.
In terms of the RadioShack locations, we took a pretty aggressive approach, working with AT&T to find locations to help them try to replace the traffic that they were getting out of the RadioShack store base overall.
We took about 120 locations, some of which were in markets where AT&T didn't have strong share, as <UNK> talked about.
And unfortunately there was a number of these stores we just couldn't make work.
Now, those are the bulk.
Yes, I mean ---+ I think, <UNK>, you may want to share.
If you go back in history, the way we see it is AT&T, our partner, needed to recover lost sales at RadioShack.
And we have achieved our 20% IRR hurdle, so we feel like it was good culling of what we had.
Now, there's another side of this, which is, of course, the Simply Mac side.
I don't know if you want to talk about that or not, <UNK>, but that's a ---+ (multiple speakers) That would be <UNK>.
That's a very different animal.
Yes, that's a good question.
And I'm going to let <UNK> maybe take that.
But just remember, we have a $1 billion relationship with Apple, so Simply Mac doesn't define our Apple relationship.
We are heavily into the Apple business.
But <UNK>, do you want to talk about Simply Mac.
Yes, I do.
When we talk about Simply Mac, I'll reiterate what <UNK> said.
We have a multifaceted relationship with Apple.
So, in our retail business or on our mobility business, we sell over 1 million iPhones for them.
We sell a lot of product.
And so we are a great channel partner for them.
On the Simply Mac side, that channel distribution strategy has been a little more difficult, largely due to product allocation.
I think Apple would admit that when they got into the second half of last year, a lot of the products that they launched were heavier allocated then they've seen in years prior.
But we saw that the stores that we've had for a long time that have an embedded base still performed very well.
Our service business continues to grow.
So it was really, again, a culling of some of the real estate that we just didn't think had long-term potential.
And so, <UNK>, we feel pretty good about the technology brands strategy.
I don't think there's a strategy shift.
We did think we would grow Simply Mac faster and Spring Mobile slower.
That was the original thinking.
I think today we would say we are growing Spring much faster, and so we don't mind reducing the size of our Simply Mac.
But Simply Mac is a good business, it goes forward.
We just had a great meeting with Apple yesterday, by the way, so we got lots of exciting things we are planning on doing with them.
Well, I would say ---+ and maybe I will that <UNK> or <UNK> talk about the unit growth ---+ but we are very strong with AT&T in lots of different ways.
We were at the Pebble Beach sales meeting they had.
I'm calling it a sales meeting because I don't want to call it a golf extravaganza.
But we are very tied at the hip with them.
They have a lot of things going on.
And so we think there's an opportunity to grow stores but also other forms of revenue driving.
You want to talk about the unit growth guidance, <UNK>.
Yes.
We talked about 65 what we call white-space stores on the technology brands side.
And so you can frame it that way.
We will continue to look for AT&T reseller acquisition opportunities.
We've been very successful with that.
We don't expect anything of the size that we did last year, obviously.
There aren't that many dealers of that size available, but we do think there are still a large number of opportunities to consolidate smaller resellers.
Yes, thank you for that, <UNK>.
Let me start it off and I'll ask <UNK> to follow up.
The way we see this is we see Switch as being very strong.
That indicates there's a demand out there for gaming.
We were just at a studio this week, a group of us, and we heard a lot of excitement about Sony VR.
And so you can't discount VR from this discussion because what Sony VR will do is it will put pressure on Microsoft.
So we have a pretty interesting expectation now about Sony VR that maybe we didn't have.
When you talk to studios it helps you get a little more insight into what's going on.
But <UNK>, you want to talk about what we know about Scorpio and what we can't talk about.
I was just going to say that you have to believe that if VR becomes a meaningful part of this business, which we don't know if it will, but the likelihood is and the indications are that everything we get that's Sony VR sells out ---+ you have to believe that others will want to get in that game.
So that's one of the reasons we are bullish.
Well, as I mentioned in my remarks, the timing of the year end ---+ this year, January 28; next year, February 3 I think it is ---+ means that any of those bills that were due February 1 ---+ whether they are rent, international payroll, certain vendor obligations ---+ would fall into the fiscal 2017 timing, and they didn't fall into the fiscal 2016 timing.
So we got a benefit in 2016 that flips around on us a bit in 2017.
Obviously, as we approach the end of the year, as we work our way through the year, we are going to manage our payables and our inventory levels and working capital in the most efficient manner possible, but there just will be an (technical difficulty).
Okay.
With that, I guess we will wrap up the call.
Thank you very much for your support.
Please stay tuned.
We've got a lot of exciting things going on at GameStop and look forward to speaking with you in the next quarter.
