On the more strategic alternatives, we have a massive opportunity to grow our share of the highly profitable flat panel television and home services, digital home services business baskets.

Our fleet of real estate is aging with over 400 stores that we would declare inefficient and we continue to invest aggressively in making the right decisions to upgrade our real estate.

Bill Sims (Citigroup): Do you have a clearly outlined strategy of what it takes to differentiate your business from the competition today, and what are you doing to implement that strategy?

Philip J. Schoonover: It starts with our multi-channel and services strategy. We have a competitive web presence and one that is preferred by a great deal of customers. We have a Firedog services in the last mile, where many of our competitors do not offer in-store, in-home, online and telephone services.

Over the last 24 months, we have experimented in Boston and Florida, and we have a firm set of understandings around what matters in the store and how that is different than yesterday.

We have opened our first new format that takes the learning from Boston and Florida and brings it to life in one store, and we call that our City store. The 25 stores that will open in that same format the balance of this year have a different job and do a different service for the customer.

Bill Sims (Citigroup): Have your current profitability challenges on Firedog changed your ability to build the Firedog brand?

Philip J. Schoonover: We have included Firedog in all of our standard vehicles, so our insert, our broadcast advertising, and online. And in real dollars, we are spending more against the Firedog brand than ever.

Matthew Fassler (Goldman Sachs): What drove the margin declines within the PC and video businesses?

David L. Mathews: Two-thirds of the gross profit rate decline was due to product mix changes, roughly a third due to the rate decline within same categories.

We are heavily focused on improving our gross profit rate. So on the mix side, solution selling, getting our basket back, getting in-stock levels right, bulk out, end caps, our promotional effectiveness in our marketing, and even getting our assortment right, all of those are activities that are designed to attack the product mix issue that impacted gross profit rate.

Matthew Fassler (Goldman Sachs): Looking at the TV market, how would you characterize the state of the supply chain this year versus where it was a year ago?

Philip J. Schoonover: We are in good shape, with the exception of some spot cases.

Matthew Fassler (Goldman Sachs): How seriously have you thought about pulling back on the store rollout to conserve some capital until the earnings visibility improves?

Bruce H. Besanko: We have got all options on the table. We will take a thoughtful look over the next few months and then come back with a point of view.

Jack Murphy (William Blair & Company): If you were to control for all of the disruption, would the TV warranty attachments still declined?

Danny Clark: We would had to have done the same thing we were doing in TV but if that was an isolated issue versus the extended warranty plans we sell throughout the store, that would have been easier for us to manage.

We were trying to manage the change and then also recognizing the decline in ASP prices.

Jack Murphy (William Blair & Company): On the SG&A initiatives, the $150 million and $200 million goals, how much of that have you actually taken out?

Bruce H. Besanko: The retail activity is roughly $85 million to $90 million. IT activities are $15 million to $20 million, entertainment is $15 million to $20 million, and then the corporate areas are around $45 million. We have also outsourced our IT activities to IBM and there are savings related to that.