Lowe's 2006 Annual Report Download - page 30

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Lowe’s 2006 Annual Report
Disclosure Regarding Forward-Looking Statements
We speak throughout this Annual Report 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 estimates
and expectations are reasonable, they are not guarantees of future performance.
Our actual results could dier substantially from our expectations because,
for example:
• Our sales are dependent upon the health and stability of the general
economy. We monitor key economic indicators including disposable
personal income, employment growth, housing turnover, and homeowner-
ship levels. In addition, changes in the level of repairs, remodeling and
additions to existing homes, changes in commercial building activity,
and the availability and cost of nancing can impact our business.
• Major weather-related events and unseasonable weather, particularly
wet and cold weather during the spring and early summer months, may
impact sales of seasonal merchandise and products designed for outdoor
use on a short-term basis.
• Our expansion strategy may be impacted by environmental regulations,
local zoning issues, availability and development of land, and more stringent
land use regulations. Furthermore, our ability to secure a highly-qualied
workforce is an important element to the success of our expansion strategy.
• Our business is highly competitive, and as we build an increasing percentage
of our new stores in larger markets and utilize new sales channels such as
the internet, we may face new and additional forms of competition.
• e ability to continue our everyday low pricing strategy and provide
the products that customers want depends on our vendors providing a
reliable supply of products at competitive prices and our ability to eec-
tively manage our inventory. As an increasing number of the products
we sell are imported, any restrictions or limitations on importation of
such products, political or nancial instability in some of the countries
from which we import them, or a failure to comply with laws and regulation
of those countries from which we import them, could interrupt our supply
of imported inventory.
• Our goal of increasing our market share and our commitment to keeping
our prices low require us to make substantial investments in new
technology and processes whose benets could take longer than expected
to be realized and which can be dicult to implement and integrate.
For more information about these and other risks and uncertainties that we
are exposed to, you should read the “Risk Factors” included in our Annual
Report on Form 10-K to the United States Securities and Exchange Commission.
All forward-looking statements in this report speak only as of the date of this
report or, in the case of any document incorporated by reference, the date of
that document. All subsequent written and oral forward-looking statements
attributable to us or any person acting on our behalf are qualied by the cau-
tionary statements in this section and in the “Risk Factors” included in our
Annual Report on Form 10-K. We do not undertake any obligation to update
or publicly release any revisions to forward-looking statements to reect
events, circumstances or changes in expectations aer the date of this report.
Management of Lowe’s Companies, Inc. and its subsidiaries is responsible
for establishing and maintaining adequate internal control over nancial
reporting (Internal Control) as dened in Rule 13a-15(f) under the Securities
Exchange Act of 1934, as amended. Our Internal Control was designed to
provide reasonable assurance to our management and the board of directors
regarding the reliability of nancial reporting and the preparation and fair
presentation of published nancial statements.
All internal control systems, no matter how well designed, have inherent
limitations, including the possibility of human error and the circumvention
or overriding of controls. erefore, even those systems determined to be
eective can provide only reasonable assurance with respect to the reliability
of nancial reporting and nancial statement preparation and presentation.
Further, because of changes in conditions, the eectiveness may vary
over time.
Our management, with the participation of the Chief Executive Ocer
and Chief Financial Ocer, evaluated the eectiveness of our Internal Control
as of February 2, 2007. In evaluating our Internal Control, we used the criteria
set forth by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO) in Internal Control – Integrated Framework. Based on
our management’s assessment, we have concluded that, as of February 2, 2007,
our Internal Control is eective.
Deloitte & Touche, LLP, the independent registered public accounting
rm that audited the nancial statements contained in this report, has issued
an attestation report on our management’s assessment of our Internal Control.
is report appears on page 27.
Management’s Report on Internal Control Over Financial Reporting