instead of recognizing the liability at the date of commitment to an exit plan as was previously allowed. The adoption of SFAS No. 146 did not have a material impact on current year or previously reported net earnings, cash flows or financial position. 

In the second quarter of 2003, we adopted SFAS No. 149, GLYPH<210>Amendment of Statement 133 on Derivative Instruments and Hedging Activities.GLYPH<211> SFAS No. 149 amends and clarifies accounting for derivative instruments, and is effective for contracts entered into or modified after June 30, 2003. The adoption of SFAS No. 149 had no material impact on current year or previously reported net earnings, cash flows or financial position. 

In the third quarter of 2003, we adopted SFAS No. 150, GLYPH<210>Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity.GLYPH<211> SFAS No. 150 clarifies the classification and measurement of certain financial instruments with characteristics of both liabilities and equity, and is effective for financial instruments entered into or modified after May 31, 2003, or otherwise for the first interim period beginning after June 15, 2003. The adoption of SFAS No. 150 had no material impact on current year or previously reported net earnings, cash flows or financial position. 

In the fourth quarter of 2003, we adopted EITFGLYPH<213>s Issue No. 03-10 GLYPH<210>Application of Issue 02-16 by Resellers to Sales Incentives Offered to Consumers by ManufacturersGLYPH<211> (EITF No. 03-10) which amends EITF No. 02-16. According to the amended guidance, if certain criteria are met, consideration received by a reseller in the form of reimbursement from a vendor for honoring the vendorGLYPH<213>s sales incentives offered directly to consumers (i.e. manufacturerGLYPH<213>s coupons) should not be recorded as a reduction of the cost of the resellerGLYPH<213>s purchases from the vendor. The adoption of EITF No. 03-10 did not have a material impact on current year or previously reported net earnings, cash flows or financial position. Our accounting policy regarding vendor income is discussed in the Notes to Consolidated Financial Statements on page 30. 

In the fourth quarter of 2003, we adopted SFAS No. 132(R), GLYPH<210>EmployersGLYPH<213> Disclosures about Pensions and Other Postretirement BenefitsGLYPH<209>an amendment of FASB Statements No. 87, 88 and 106,GLYPH<211> which revises the annual and interim disclosure requirements about pension and other postretirement benefits. 

## 2002 Adoptions 

In the first quarter of 2002, we adopted SFAS No. 142, GLYPH<210>Goodwill and Other Intangible Assets,GLYPH<211> which superseded Accounting Principles Board (APB) Opinion No. 17, GLYPH<210>Intangible Assets.GLYPH<211> Under the new statement, goodwill and intangible assets that have indefinite useful lives are no longer amortized but rather reviewed at least annually for impairment, or more frequently if impairment indicators arise. In both 2003 and 2002, the adoption of this statement reduced annual amortization expense by approximately $10 million (less than $.01 per share). Our accounting policy regarding intangible assets is discussed in the Notes to Consolidated Financial Statements on page 32. 

In the first quarter of 2002, we adopted SFAS No. 144, GLYPH<210>Accounting for the Impairment or Disposal of Long-Lived Assets.GLYPH<211> The guidance requires companies to review long-lived assets when events or changes in circumstances indicate that the carrying value of the asset may not be recoverable. In both 2003 and 2002, impairment losses resulted in a financial statement impact of less than $.01 per share. Our accounting policy regarding impairment of long-lived assets is discussed in the Notes to Consolidated Financial Statements on page 32. 

In the first quarter of 2002, we adopted SFAS No. 145, GLYPH<210>Rescission of FASB Statements No. 4, 44 and 64, Amendment of FASB Statement No. 13, and Technical Corrections.GLYPH<211> Previously, all gains and losses from the early extinguishment of debt were required to be aggregated and classified as an extraordinary item in the Consolidated Results of Operations, net of the related tax effect. Under SFAS No. 145, gains and losses from the early extinguishment of debt are included in interest expense. Prior year extraordinary items have been reclassified to reflect this change. The adoption of SFAS No. 145 had no impact on net earnings, cash flows or financial position. 

## Forward-looking Statements 

This Annual Report, including the preceding ManagementGLYPH<213>s Discussion and Analysis, contains forward-looking statements regarding our performance, liquidity and the adequacy of our capital resources. Those statements are based on our current assumptions and expectations and are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected. We caution that the forward-looking statements are qualified by the risks and challenges posed by increased competition (including the effects of competitor liquidation activities), shifting consumer demand, changing consumer credit markets, changing health care costs, changing capital markets and general economic conditions, hiring and retaining effective team members, sourcing merchandise from domestic and international vendors, investing in new business strategies, achieving our growth objectives, the review of strategic alternatives, the outbreak of war and other significant national and international events, and other risks and uncertainties. As a result, while we believe that there is a reasonable basis for the forward-looking statements, you should not place undue reliance on those statements. You are encouraged to review Exhibit (99)C attached to our Form 10-K Report for the year-ended January 31, 2004, which contains additional important factors that may cause actual results to differ materially from those projected in the forward-looking statements. 

