Bill Armstrong (CL King & Associates): What training are your employees getting to convey the benefits of these warranty programs to customers?

Danny Clark: What we do with our associates is every product specialist that works on our floors has an extensive training program based on what the customers’ needs like the right product, the right attachments, the right services and the right City Advantage. We also do associate focus groups, where we listen to our associates and the customers on how they feel about the value propositions.

Bill Armstrong (CL King & Associates): What caused the income tax receivable to jump up by $100 million year over year and when you expect to actually be able to monetize that?

Phil Dunn: We''ve got a loss in the first quarter and we''ve got a refund claim in with the IRS. We''ve taken a tax position that we''ve got an agreement with the IRS from, and that should result in about $40 million, which we expect to convert to cash within the next year.

Robert for Matthew Fassler (Goldman Sachs): Could you give us the drivers of the deceleration in TV dollar growth, split between units and ASP declines?

Dave Matthews: We had tremendous upside and triple-digit growth in the large LCD business. We had ASP declines in that business but tremendous unit growth for a net win in revenue. We had a combination in some businesses of ASP declining coupled with unit decline. The LCD business had overall strength, but we had challenges in plasma and tube. We are seeing the LCD revenue growing, units growing, ASPs coming down which presents an opportunity for us.

Robert for Matthew Fassler (Goldman Sachs): Can you guide us on the status of the TV inventory, 1080p versus 720p and rear projections versus flat panels?

Dave Matthews: Inventory is in relatively good shape right now. From the upside opportunities in the first quarter, we''re bringing in inventory now. Small LCD is an opportunity for us. We realize we had under indexed on some brands in the quarter, but we''re placing purchase orders now. Overall inventory was down 16%.

Bill Sims (Citigroup): As manufacturers shift or as demand falls off for plasma in favor of LCD, are you seeing a glut of plasma inventory out there throughout the broader channel and is there a risk throughout the industry of a fair amount of markdown over the next quarter or so?

Dave Matthews: Right now, we''re in good shape on plasma inventory. We can’t predict much on the market trend, but we are watching the external marketplace closely.

Bill Sims (Citigroup): You didn''t announce the new buyback authorization, although you do have $234 million left in the existing one. Given the uncertainty in the investments that you''re making, do you anticipate to pull back to the share repurchase activity?

Bill Cimino: We have the receivables in addition to our cash position, and we have cash flow from the base business. Our current share repurchase gets us through the near term, and we will be meeting with our board this month to look at share repurchase and other financial vehicles to improve shareholder value.

Dan Binder (Buckingham Research): Following the significant changes in the organization, would you characterize the Q2 disruption that you expect to be more or less the same as what you saw in Q1?

Danny Clark: The Q2 disruption is going to get better every day. We had some very big movements in the first quarter of the year. We have stratified the management model and have put in place on-the-job training programs where people learn when they are in the role. It has made a clearer career path for people with a better understanding on how one can move from a product specialist into a supervisory role into a management role, thus narrowing the gap and skill set needed to make those transitions. With this, we expect steady improvement into the back-to-school season.

Dan Binder (Buckingham Research): There seems to be a little bit more widespread weakness in the TVs in the industry. How much of the TV problem you''re seeing in your business?

Phil Schoonover: We had opportunities in TV business last year in better collaboration with our vendors in supply and in pricing. A lot of those agreements have been rethought through and there are opportunities in margin and in velocity in the more rational second half. We lost some controls over our store pricing, particularly in the second half of the year, as prices were plummeting weekly, and we have an initiative that is very direct around shoring up some of the self-induced margin issues. We''ve asked the team that develops baskets, whether it''s furniture, accessories, cables, City Advantage or Firedog to actually be ready with new prices when price changes. All of these point to Circuit City having some unique opportunities to better execute in the TV business in the second half.

Brian Nagel (UBS): Is 1080p catching on with consumers faster than you initially anticipated? What are some of the implications of this for your business? Looking back at some of the weakness we saw in April, could that have been a function of some confusion in the consumer''s mind as we shift from 720p to 1080p?

Phil Schoonover: Customers were voting and saying 720p may be good enough for them at given value prices. We saw 720p, 42-inch product in the marketplace for less than $900, which some customers thought it was good enough. With this, we will continue to lead the charge on true high definition, which is 1080p, but we have to be aware that a $1,000 TV for a lot of customers is a high-end TV and 720p may be good enough for the nearer term. We want to be a destination for latest, greatest technologies in televisions, but the headwind in the economy may have given consumers a reason to pause and more people gravitated to 720p perhaps than we thought would. So we have a huge opportunity here in the near term to optimize the assortment and really serve both customers for 720p and 1080p.

Mitch Kaiser (Piper Jaffray): What caused the decline in warranties of about 45% year over year?

Dave Matthews: The issues on execution challenges and a piece of it tied to the ASP decline in televisions. The TV unit contributed a piece of the miss in Circuit City Advantage. We also had some execution challenges due to disruption in the store in the first part of the year. Meanwhile, we are happy with our performance and the 70% increase year over year in Firedog, and we''re happy with most of our accessories and furniture attachment, but when we stand back from the overall basket, it can''t be a net trade. City Advantage needs some attention.

Sarah for Colin McGranahan (Bernstein): You''re still targeting to 60 to 65 this year, and 90 to 100 in the following year. How are you evaluating the stores, what maturity curve you''re expecting and how you test whether they''re meeting your expectations?