Lowe's 1999 Annual Report Download - page 16

14
Independent Auditors' Report
To the Board of Directors and Shareholders
of Lowe’s Companies, Inc.
We have audited the accompanying consolidated balance sheets of Lowe’s Companies, Inc. and subsidiaries as of January 28,
2000 and January 29, 1999, and the related consolidated statements of earnings, shareholders’ equity, and cash flows for each of
the three fiscal years in the period ended January 28, 2000. These financial statements are the responsibility of the Company’s
management. Our responsibility is to express an opinion on these financial statements based on our audits. The consolidated
financial statements give retroactive effect to the 1999 merger of the Company and Eagle Hardware & Garden, Inc., which has
been accounted for as a pooling of interests as described in Note 2 to the consolidated financial statements. We did not audit the
balance sheet of Eagle Hardware & Garden, Inc. as of January 29, 1999, or the related statements of earnings, shareholders’ equity,
and cash flows of Eagle Hardware & Garden, Inc. for each of the fiscal years ended January 29, 1999 and January 30, 1998, which
statements reflect total assets of $719.8 million as of January 29, 1999, and total revenues of $1,085.7 million and $971.5 million
for each of the fiscal years ended January 29, 1999 and January 30, 1998, respectively. Those statements were audited by other
auditors whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included for Eagle Hardware
& Garden, Inc. for fiscal years 1998 and 1997, is based solely on the report of such other auditors.
We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those
standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation. We believe that our audits and the report of the
other auditors provide a reasonable basis for our opinion.
In our opinion, based on our audits and the report of the other auditors, the consolidated financial statements referred to
above present fairly, in all material respects, the financial position of Lowe’s Companies, Inc. and subsidiaries at January 28, 2000
and January 29, 1999, and the results of their operations and their cash flows for each of the three fiscal years in the period ended
January 28, 2000 in conformity with accounting principles generally accepted in the United States of America.
As discussed in Note 1 to the consolidated financial statements, effective for the year ended January 28, 2000, the Company
has given retroactive effect to the change in its method of accounting for a substantial portion of its inventories from the LIFO (last-
in, first-out) method to the FIFO (first-in, first-out) method.
Charlotte, North Carolina
February 17, 2000
Management’s Responsibility for Financial Reporting
Lowe’s management is responsible for the preparation, integrity and fair presentation of its published financial statements. These
statements have been prepared in accordance with generally accepted accounting principles and, as such, include amounts based on
management’s best estimates and judgements. Lowe’s management also prepared the other information included in the annual report
and is responsible for its accuracy and consistency with the financial statements.
The Company’s financial statements have been audited by the independent accounting firm Deloitte & Touche LLP, which
was given unrestricted access to all financial records and related data. The Company believes that all representations made to the
independent auditors during their audit were valid and appropriate. Deloitte & Touche’s audit report presented here provides an
independent opinion upon the fairness of the financial statements.
The Company maintains a system of internal control over financial reporting, which is designed to provide reasonable
assurance to Lowe’s management and Board of Directors regarding the preparation of reliable published financial statements. The
system includes appropriate divisions of responsibility, established policies and procedures (including a code of conduct to foster a
strong ethical climate) which are communicated throughout the Company, and the careful selection, training and development of
its people. Internal auditors monitor the operation of the internal control system and report findings and recommendations to
management and the Board of Directors, and corrective actions are taken to address control deficiencies and other opportunities for
improving the system as they are identified. The Board, operating through its audit committee, provides oversight to the financial
reporting process.
Robert L. Tillman Thomas E. Whiddon
Chairman of the Board & Chief Executive Officer Executive Vice President & Chief Financial Officer