Lowe's 2007 Annual Report Download - page 28

26 |LOWE’S 2007 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 andAnalysis of Financial
Condition and Results of Operations.”While we believe our estimates and expecta-
tions 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 health and stability of the general
economy.We monitor key economic indicators including real disposable
personal income, employment, housing turnover and homeownership
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 mortgage financing can
impact our business.
• Major weather-related events and unseasonable weather may impact
sales of seasonal merchandise.Prolonged and widespread drought
conditions could hurt our sales of lawn and garden and related products.
• 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 qualified 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.
• The 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
effectively 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 financial instability in some of the countries
from which we import them, or a failure to comply with laws and
regulations 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 requires us to make substantial investments in new
technology and processes whose benefits could take longer than
expected to be realized and which could be difficult 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 qualified by the cautionary 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 reflect events, circumstances or changes
in expectations after the date of this report.
MANAGEMENT’S REPORT ON INTERNAL CONTROL
OVER FINANCIAL REPORTING
Management of Lowe’s Companies, Inc. and its subsidiaries is responsible for
establishing and maintaining adequate internal control over financial reporting
(Internal Control) as defined 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 financial reporting and the preparation and fair presentation
of published financial 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.Therefore,even those systems determined to be effective
can provide only reasonable assurance with respect to the reliability of financial
reporting and financial statement preparation and presentation. Further,because
of changes in conditions, the effectiveness may vary over time.
Our management, with the participation of the Chief Executive Officer
and Chief Financial Officer, evaluated the effectiveness of our Internal Control
as of February 1, 2008. 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 1, 2008,
our Internal Control is effective.
Deloitte & Touche LLP, the independent registered public accounting firm
that audited the financial statements contained in this report, was engaged to
audit our Internal Control.Their report appears on page 27.