(Dollar Amounts in Millions except Per Share Information and as Otherwise Noted)  2004  $_{ }$ Management’s Discussion & Analysis of Financial Condition & Results of Operations Geographic Information  Certain Risks and Uncertainties  Information regarding the Company’s revenues,  long-lived assets, and deferred tax assets by  geographic area is set forth in note 11 to the  Notes to Consolidated Financial Statements. Risks attendant to the Company’s foreign operations are described under “Certain Risks  and Uncertainties” below Certain statements in this Annual Report, in the  Company’s Annual Report on Form 10-K for the  fiscal year ended December 31, 2004, in future  filings by the Company with the Securities and  Exchange Commission, in the Company’s press  releases and in oral statements made by or with  approval of the Company’s executive officers  constitute or will constitute “forward-looking  statements” under the Reform Act. The following factors are among those that could  cause the Company’s actual results to differ  materially from those predicted in such forward- looking statements: (i) an upturn or downturn in  the economy could impact sales at existing  stores, the rates of new store openings, additions  of new employees, and the time it typically takes  a new store to achieve profitability, (ii) an upturn  or downturn in the economy, a change in  product mix, a change in inbound inventory  costs, the ability to increase selling prices in  response to increased inventory costs, and a  change in expected inventory buying patterns  could impact gross margins, (iii) a change, from  that projected, in the number of markets able to  support future store sites could impact the rates  of new store openings and additions of new  employees, (iv) the ability of the Company to  develop product expertise at the store level, to  identify future product lines that complement  existing product lines, to transport and store  certain hazardous products and to otherwise  integrate new product lines into the Company’s  existing stores and distribution network could  impact sales and margins, (v) increases or decreases in fuel and utility costs could impact  distribution and occupancy expenses of the Company, (vi) the ability of the Company to  successfully attract and retain qualified personnel  to staff the Company’s stores could impact sales  at existing stores and the rate of new store  openings, (vii) changes in governmental regulations related to product quality or product  source traceability could impact the cost to the  Company of regulatory compliance, (viii) inclement weather could impact the Company’s  distribution network, (ix) foreign currency fluctuations, changes in trade relations, or fluctuations in the relative strength of foreign  economies could impact the ability of the Company to procure products overseas at competitive prices and the Company’s foreign  sales, (x) disruptions caused by the implementation of the Company’s new management information systems infrastructure  could impact sales, (xi) changes in the rate of  new store openings could impact expenditures  for computers and other capital equipment, (xii)  changes in the stocking and buying patterns  related to product, both domestic and imported,  could result in the Company being unable to  reduce its distribution center inventories to the  extent anticipated and the Company failing to  achieve inventory turns in the future similar to  those before the CSP initiative began and have a  negative impact on cash flows from investing  activities, (xiii) changes in the availability of  suitable land and buildings could impact expenditures for additional owned locations which house our stores, which in turn could alter  the Company’s plans to increase the number of  owned locations, and (xiv) actions of competitors, suppliers, and customers could impact the Company’s ability to raise prices.  2004 ANNUAL REPORT – PAGE 16 