(Dollars in millions)	2002						2001						2000
Sales	$	5,804.4			100.0	%	$	5,842.6			100.0	%	$	6,487.5			100.0	%
Cost of goods sold and occupancy costs		4,351.2			75.0	%		4,479.1			76.7	%		5,065.0			78.1	%
Gross profit		1,453.2			25.0	%		1,363.5			23.3	%		1,422.5			21.9	%
Operating and selling expenses		1,027.1			17.7	%		1,046.8			17.9	%		1,101.7			17.0	%
Facility closure costs		6.4			0.1	%		8.4			0.1	%		103.8			1.6	%
Segment operating profit	$	419.7			7.2	%	$	308.3			5.3	%	$	217.0			3.3	%

Sales in our North American Retail Division decreased 1% in 2002 and 10% in 2001. Adjusting fiscal 2000 results to remove the 53rd week, sales decreased 8% in 2001. Comparable sales in 2002 from the 848 stores that were open for more than one year were down 2%. In 2001, comparable sales in the 816 stores that were open for at least one year were down 8%. The decrease in 2002 reflects both lower average transaction size and fewer comparable transactions. Weekend sales declined more than weekday sales, and holiday sales during the fourth quarter were below expectations. We experienced these declines despite enhancements to store presentation, operations, and product selection, and we believe these declines reflect an overall soft U.S. economy.

The product mix sales trends experienced in 2001 continued into 2002, as sales shifted away from lower margin technology products in both periods. Comparable sales of lower margin hardware products declined 10% in 2002 and 31% in 2001; and business furniture comparable sales declined 6% in 2002 and 13% in 2001. Sales of machine supplies, which includes ink and toner, and the contribution from our copy centers increased in both periods. Sales and margin of core supplies and paper were flat to slightly positive in both periods. We remain focused on driving traffic and sales in our retail channel, but the outlook for 2003 is dampened by expectations for a continued soft economy for at least part of the year.

Total operating and selling expenses in our North American Retail Division declined in both 2002 and 2001. The largest components of this category are personnel, facility maintenance, advertising, and credit card expenses. Personnel-related costs, which represent over 50% of the total costs in this caption, increased 1% in 2002. Increases in wage rates and in certain employee benefit costs were partially offset by streamlining certain operational processes. During 2001, payroll-related costs showed the largest decline as staffing was adjusted down in response to lower sales and from a net reduction in the number of stores. Facility maintenance expense decreased in both periods. Lower sales in both periods contributed to lower credit card fees. Operating and selling expenses in 2002 also include $14.4 million to settle the potential class action litigation in the state of California relating to certain employee classifications as exempt from overtime.

A significant portion of the comprehensive business review completed at the end of 2000 was focused on the North American Retail Division. As a result of the business review, we recorded $103.8 million as facility closure costs in 2000, primarily relating to lease obligations for closed stores, net of anticipated sublease income. During both 2002 and 2001, our obligation for future lease commitments was adjusted because of changes in the real estate market that impacted our ability to sublet these properties resulting in net charges of $6.4 million and $8.5 million, respectively. In addition to the facility closure costs recorded in 2000, we recorded $57.8 million relating to asset impairments and write-downs. Charges for asset impairments and closures were $5.4 million in 2002 and $35.2 million in 2001. We regularly review actual and projected store performance and record any asset impairment charges as a component of store and warehouse operating expenses.

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