In essence, our goal is to deploy customer centricity in a cost-effective manner at all U.S. Best Buy stores. This year is an opportune time for further change, as we are expecting to benefit from the current product cycle. We anticipate comparable store sales gains from flat-panel televisions, MP3 players and accessories, notebook com- puters, video gaming consoles, Geek Squad services and appliances. Partially offset- ting these gains will be declines from analog TVs, phones, computer printers and CDs

Delivering On Growth
At the time this report was printed, based on our plans and current economic expectations, we were expecting revenue of $34 billion to $35 billion for fiscal 2007, an increase of10 percent to13 percent. We expected revenue growth from the new store openings and a comparable store sales gain of 3 percent to 5 percent. We also were anticipating earnings growth of approximately 20 percent. While we believe this guidance range is achievable, we also recognize that the consumer elec- tronics industry is very competitive, and our results could be affected by consumer preferences, how well we execute our strategies and employee retention, among other factors.

Longer term, we continue to pursue our goal of a 7-percent operating income rate. Our earnings guidance for fiscal 2007 provides for an improvement of 40 basis points. We expect the gain to come from improved capabilities in our supply chain and information technology systems; leverage of our investments in Canada; and organic growth fueled by new store openings, customer centricity work and the expansion of our services business.

Leading Our People
Assisting me in working toward these goals are Brian Dunn, who was promoted to president and COO, effective at the start of the fiscal year; Bob Willett, who was named CEO of Best Buy International, effective the same date; and Darren Jackson and Shari Ballard, who remain CFO and executive vice president of human capital, respectively. I am honored to work alongside such a strong team of leaders.

Thanking Our Partners
Best Buy has a 40-year track record as a growth company. As we enter our fifth decade, I would like to thank all of our partners who have contributed to our success. We are indebted to our vendors, our communities and our shareholders for their support in the past, today and in the future. Most of all, I would like to recognize our employees, who make a difference for our customers every day. As I have said before, I believe that we have only scratched the surface in realizing the opportunities associated with our customer centricity strategy. I feel very optimistic about the coming year and the heights to which our strategy will take us in the years ahead.