Borders Group Inc. is a leading global retailer of books, music and movies.

Throughout our more than 1,200 stores around the world, we are finding new ways to surprise and delight customers — and turn them into lifelong friends.

More than 32,000 employees worldwide help to provide our customers with the books, music, movies and other entertainment products they love in a relaxing, enjoyable atmosphere. We are a company committed to our people, to diversity, to our customers and to our communities.

At the close of fiscal 2003, we operated 445 Borders® domestic superstores, 37 Borders International superstores, 36 Books etc.® stores in the United Kingdom, and 716 Waldenbooks® stores in malls across the United States. Borders Group also operates multiple seasonal businesses, as well as small-format Borders stores, in airports and outlet shopping centers. Through our alliance with Amazon.com, online shopping is available through Borders.com and Waldenbooks.com. Information on Borders stores and a unique nationwide store inventory-checking and reservation feature is available at www.bordersstores.com.

Our business plan is both focused and fundamental:

1. Build Our Core Business
2. Drive International Growth
3. Leverage Alliances and Technology
4. Maximize Potential at Waldenbooks

Executing this plan, we have increased sales consistently in each of the past three years, gained market share and remained focused on our target of delivering 10% to 15% earnings per share growth annually to our investors.