Office Depot's International Division enjoyed strong sales growth in fiscal 1999. Comparable Viking international catalog operations grew almost 17% in local currencies. And while we generated strong growth in every country in which we operate, countries such as Austria, Germany, Ireland, Italy and The Netherlands grew in excess of 20% in local currencies.

Our international catalog growth was achieved by increases in existing market penetration as well as new market growth in Japan. New international catalog accounts grew in excess of 30% in 1999 and active customers (customers who purchased in the last twelve months) grew in excess of 20%, reflecting Viking's commitment to fanatical customer service.

These sales growth accomplishments, as well as the purchase of the remaining ownership interests in our retail operations in France and Japan, drove our international sales up 26% to $1.3 billion in 1999 in U.S. dollars and up 30% in local currencies.

During the year, our International Division also continued to lower catalog merchandising costs, and we reduced our operating expenses as a percentage of sales in most of the countries in which we operate.

However, these measures were offset by the expected losses associated with our start-up of Viking mail order operations in Japan. As a result, store and warehouse operating profit for the year increased only 11% to $163.5 million, compared with $147.1 million in 1998.

During 1999, we expanded our international business through several initiatives. In our catalog operations we pursued existing market growth as well as new market growth in Japan. In April of 1999, we launched our Viking mail order operations in Japan after completing the repurchase of the remaining 50% of our operations. We feel strongly that this investment, in the second largest office supply market outside of the U.S., will produce strong returns in the coming years. In addition, we launched our first Internet Web site in the United Kingdom and expanded our international store base by a total of 31 stores.