Lowe's 2003 Annual Report Download - page 20

18 LOWE’S COMPANIES, INC.
18. Management’s Responsibility for
Financial Reporting.
19. Management’s Discussion and
Analysis of Financial Condition
and Results of Operations.
25. Independent Auditors’ Report.
26. Consolidated Statements
of Earnings.
27. Consolidated Balance Sheets.
28. Consolidated Statements
of Shareholders’ Equity.
29. Consolidated Statements
of Cash Flows.
30. Notes to Consolidated
Financial Statements.
39. Quarterly Review of Performance.
40. Stock Performance, Stock Splits
and Stock Dividends.
41. Selected Financial Data.
42. 10-Year Financial History.
Disclosure Regarding Forward-Looking Statements
Our Annual Report talks about our future, particularly in the “Letter to Shareholders” and “Management’s Discussion and Analysis of
Financial Condition and Results of Operations.” While we believe our expectations are reasonable, they are not guarantees of future
performance. Our actual results could differ substantially from our expectations because, for example:
*Our sales are dependent upon the general economic health of the country, variations in the number of new housing starts, the level
of repairs, remodeling and additions to existing homes, commercial building activity, and the availability and cost of financing.
An economic downturn can impact sales because much of our inventory is purchased for discretionary projects, which can be delayed.
In addition, on a short-term basis, weather may impact sales of product groups like lawn and garden, lumber, and building materials.
*Our expansion strategy may be impacted by environmental regulations, local zoning issues and delays, availability and development
of land, and more stringent land use regulations than we have traditionally experienced as well as the availability of sufficient labor to
facilitate our growth.
*Many of our products, like lumber and plywood, are commodities whose prices fluctuate erratically within an economic cycle.
*Our business is highly competitive, and as we expand to larger markets and to the internet, we may face new forms of competition
which do not exist in some of the markets we have traditionally served.
*The ability to continue our everyday competitive pricing strategy and provide the products that customers want depends on our
vendors providing a reliable supply of inventory at competitive prices and our ability to effectively manage our inventory.
*Our commitment to increase market share and keep prices low requires us to make substantial investment in new technology and
processes whose benefits could take longer than expected and could be difficult to implement.
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 accounting principles generally accepted in the United States of America and as such,
include amounts based on management’s best estimates and judgments. 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 which include a code of conduct to foster a strong ethical
climate, each of 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.
2003 Financial Report
robert l. tillman
chairman of the board and
chief executive officer
robert f. hull, jr.
senior vice president and
chief financial officer