It's easier than ever to find a CVS/pharmacy these days. That's because we've added some 2,000 locations over the past three years through a combination of organic growth and well-chosen acquisitions. With approximately 6,200 locations from coast to coast, we now operate more stores than any other U.S. drugstore chain. More than 60 percent are freestanding, making it "CVS easy" for customers to fill prescriptions, pick up some LifeFitness^® vitamins, or just grab a pint of their favorite ice cream.

Our 2006 acquisition of approximately 700 standalone Sav-on and Osco drugstores propelled CVS to leadership positions throughout fast-growing Southern California and strengthened our presence in the Midwest. At the same time, our organic growth continued apace in key growth markets such as Chicago, Las Vegas, Minneapolis, and Phoenix. The combination of organic growth and acquisition added a hefty 23 percent to our retail square footage in 2006.

We've rapidly integrated the former Sav-on and Osco locations, with the final store conversion scheduled for March 2007. Of course, we know a thing or two about making the most of an acquisition. With our 2004 purchase of approximately 1,200 former Eckerd stores - mainly in Florida and Texas - we seized on a significant opportunity to drive top-line growth, improve margins, and reduce inventory shrinkage. These stores have since delivered impressive results, and we expect them to continue outperforming our core business as we leverage a long-term turnaround opportunity.

More CVS/pharmacy locations are on the way. We plan to open 275 new or relocated stores in 2007, adding another 3 percent to our total retail square footage.