Lionel Quality Electric Trains
Year End Message From Jerry Calabrese

Dear Friends of Lionel:

As 2006 winds down, I can’t help thinking about and being grateful for what has been a very special year. For the second straight season, Lionel has reached record levels of sales and product deliveries. More important, for the first time in anyone’s modern memory, Lionel train displays were seen and experienced by hundreds of thousands of people in places like Macy’s Santaland and Grand Central Terminal; and our train sets are for sale in a wide range of mainstream department and specialty stores.

In addition to our big push on new ready to run starter sets, we’ve also worked hard to create affordable engines and rolling stock, and there will be more, including an expanded K-Line catalog, this coming year. At the other end of the spectrum, I believe that our new TMCC Legacy operating system, due out in early 2007, will demonstrate just how serious we are about our commitment to all ends of our fan base and market.

Best of all, after so many years of having our collective and communal landscape dominated by a tempest of legal issues, those dark storm clouds are finally breaking on a new and better day for Lionel and the model train hobby. On behalf of everyone at Lionel, I’d like to thank all of you who have supported us and given Lionel a chance to be part of your lives. Best wishes for a healthy and happy New Year.

Jerry Calabrese

Phone 586-949-4100 Fax 586-949-1013 WWW.LIONEL.COM