ffice Depot has demonstrated that we have the right strategy in place to become a world-class company. But we have also proved that we know how to execute our plans in a way that will ensure our success and position us as a compelling place to invest. • Our execution was exceptional in our North American Retail stores during 2001. We closed 73 underperforming stores and redeployed capital to faster-growing markets. We remerchandised our remaining stores on budget and without customer interruptions. • We also improved profitability in our Business Services Group. We focused on profitability in our contract business, and changed existing relationships to enhance performance. We lowered costs by using technology to improve sales force productivity. In addition, we reduced costs and improved service levels by consolidating our call centers and introducing technologies in our warehouses that improved efficiencies while serving our customers. • We also continued to foster growth in our fast-growing International business, which represented 14 percent of our 2001 sales and 27 percent of our segment operating profit. During the year, we finalized plans for our start-up in Switzerland and laid the groundwork to launch in Spain in mid-2002. • In addition to leading our industry in e-commerce sales, Office Depot is also using the Internet to improve processes, reduce costs and expand service. In our finance area, we introduced on-line accounts receivable reporting to provide our sales people with information to manage their business better. We also reduced our domestic contract days sales outstanding from 57 to 52 days by initiating programs that incentivize our employees to resolve overdue balances swiftly. • We also implemented ways to improve financial management. We introduced a new Intranet application that helps us to access information related to expenditure justification, which links our investment strategy with our commitment to grow shareholder value. We also changed our payroll system and allocated costs to individual business units, allowing us to measure operating performance more effectively. • The execution of our operating initiatives strengthened our Company, making us a more compelling place to work, shop and invest. In 2001, we were named the second best-performing stock in the S&P 500 Index, and our activities helped to generate a 166 percent increase in our market capitalization to $5.6 billion by year end.