Exhibit 1

VALUE LINE, OCTOBER 2002

Retail Building Supply Industry Sales

Sales ($billions) 1997 1998 1999 2000 2001

Hardware 22.8 26.2
Home Centers 64.5 89
Lumber 51.5 59
Total Market 138.8 149.5 159.7 168 174.2

Share of Market 2001

Home Depot Inc 22.90%
Lowe's Companies 10.80%
TruServe Corp 2.90%
Menard Inc 1.50%

Source: Economist Intelligence Unit

2002 2006
26.2 26
91.9 102
60.1 66
178.2 194
 Exhibit 1
VALUE LINE, OCTOBER 2002
Historical company performace
1997 1998 1999 2000
Number of store 624 761 930 1134
Sq. footage (millions) 66 81 100 123
Number of transactions (millions) 550 665 797 937
Home Depot Number of employees 124400 156700 201400 227300
Shares outstanding (millions) 2196 2213 2304 2324
Earnings per share 0.52 0.71 1.00 1.10
Avg. price-earnings ratio 30.8 40.1 45.8 46.6

Number of store 447 520 576 650

Sq. footage (millions) 40 48 57 68
Number of transactions (millions) 231 268 299 342
Lowe's Number of employees 64070 72715 86160 94601
Shares outstanding (millions) 701 705 765 766
Earnings per share 0.51 0.68 0.9 1.06
Avg. price-earnings ratio 19.5 28.2 30.1 22
 2001
1333
146
1091
256300
2346
1.29
35.6

744
81
395
108317
776
1.3
27.5
Current yield on long-term U.S. Treasuries
Historical market risk premium

The Home Depot

Lowe's
 Exhibit 3

VALUE LINE PUBLISHING, OCTOBER 2002

Cost of capital calculation

4.8%
5.5%

Proportion of debt capital (market value) 2%

Cost of debt (Current yields of Aaa-rated debt) 6.8%
Marginal tax rate 38.6%
Cost of equity (Beta=1.4) 12.5%
Weighted average cost of capital 12.3%

Proportion of debt capital (market value) 12%

Cost of debt (Current yields of Aa-rated debt) 7.3%
Marginal tax rate 37.0%
Cost of equity (Beta=1.4) 12.5%
Weighted average cost of capital 11.6%
 Exhibit 6

VALUE LINE PUBLISHING, OCTOBER 2002

Value Line Economic Series

Annual Statistics 1997 1998 1999 2000 2001 2002* 2003*

Gross Domestic Product ($Bill.) 8318 8782 9274 9825 10082 10440 10984
Real GDP (1996 Chained $Bill.) 8159 8509 8859 9191 9215 9428 9728
Total Consumption ($Bill.) 5424 5684 5965 6224 6377 6577 6772
Nonresidential Fixed Investment ($Bill.) 1009 1136 1228 1324 1255 1190 1266

Industrial Prod. (% Change, Annualized) 6.9 5.1 3.7 4.5 -3.7 3.8 5.3
Housing Starts (Mill. Units) 1.47 1.62 1.65 1.57 1.6 1.66 1.59
Unit Car Sales (Mill. Units) 8.3 8.1 8.7 8.9 8.4 8.2 8.3
Personal Savings Rate (%) 4.2 4.7 2.7 2.8 2.3 3.5 3.4
National Unemployment Rate (%) 4.9 4.5 4.2 4 4.8 5.9 5.9

AAA Corp Bond Rate (%) 7.3 6.5 7 7.6 7.1 6.4 6.4
10-Year Treasury Note Rate (%) 6.4 5.3 5.6 6.0 5.0 4.8 5.1
3-Month Treasury Bill Rate (%) 5.1 4.8 4.6 5.8 3.4 1.7 2.4

Annual Rates of Change

Real GDP 4.4 4.3 4.1 3.8 0.3 2.3 3.2
GDP Price Index 1.9 1.2 1.4 2.1 2.4 1.7 2.5
Consumer Price Index 2.3 1.5 2.2 3.4 2.8 2.3 2.5

Quarterly Annualized Rates 2002 2003

1st 2nd* 3rd* 4th* 1st* 2nd*
Gross Domestic Product ($Bill.) 10313 10307 10475 10600 10756 10901
Real GDP (1996 Chained $Bill.) 9363 9388 9446 9516 9598 9681
Total Consumption ($Bill.) 6514 6544 6608 6641 6691 6748
Nonresidential Fixed Investment ($Bill.) 1188 1184 1190 1199 1222 1249

Industrial Production (% Change,

Annualized) 2.6 4.6 3 5 5.5 5.5
Housing Starts (Mill. Units) 1.73 1.66 1.65 1.6 1.57 1.58
Unit Car Sales (Mill. Units) 7.9 8.1 8.4 8.2 8.2 8.2
*Estimated

Source: Value Line Publishing

 2005-2007*
13255
10827
7457
1625

4
1.63
8
1.5
5

7.3
6.2
4.5

3.8
2.6
2.8

2003
3rd* 4th*
11060 11270
9770 9861
6798 6849
1279 1315

5 5
1.6 1.6
8.3 8.4
 1997 1998 1999 2000 2001
Income Statement
Sales 24156 30219 38434 45738 53553
Cost of Sales 17092 21241 26560 31456 36642
Gross Profit 7064 8978 11874 14282 16911
Cash Operating Expenses 4885 5935 7603 9490 11215
Depreciation and Amortization 283 373 463 601 764
EBIT 1896 2670 3808 4191 4932
Non Recurring Expenses 0 0 0 0 0
Net Interest Expenses -2 16 4 -26 -25
EBT 1898 2654 3804 4217 4957
Income Tax 738 1040 1484 1636 1913
PAT 1160 1614 2320 2581 3044

1997 1998 1999 2000 2001

Balance Sheet
Cash and ST Investments 174 62 170 177 2546
Accounts Receivables 556 469 587 835 920
Merchandise Inventory 3602 4293 5489 6556 6725
Other Current Assets 128 109 144 209 170
Total Current Assets 4460 4933 6390 7777 10361
Net Property and Equipment 6509 8160 10227 13068 15375
Other Assets 260 372 464 540 658
Total Assets 11229 13465 17081 21385 26394

Accounts Payable 1358 1586 1993 1976 3436

Accrued Salaries and Wages 312 395 541 627 717
Short-term Borrowings 0 0 0 0 0
Current Maturities of Long-term Debt 8 14 29 4 5
Other Current Liabilities 778 862 1093 1778 2343
Total Current Liabilities 2456 2857 3656 4385 6501
Long-term Debt 1303 1566 750 1545 1250
Deffered Income Tax 78 85 87 195 189
Other Long-term Liabilities 178 208 237 245 372
Minority Interest 116 9 10 11 0
Shareholders' Equity 7098 8740 12341 15004 18082
Total Liabilities and Owners Equity 11229 13465 17081 21385 26394

Data
Number of Stores 624 761 930 1134 1333
Sq. Footage 66 81 100 123 146
Number of Transactions (millions) 550 665 797 937 1091
Number of Employees 124400 156700 201400 227300 256300
Shares Outstanding 2196 2213 2304 2324 2346
Earnings per Share 0.52 0.71 1.00 1.10 1.29
Avg. Annual Price-Earnings Ratio 30.8 40.1 45.8 46.6 35.6
Sq foot per store

No. of new stores opened

Sales per store
Sales Growth for Existing Stores
 1997 1998 1999 2000 2001
Ratios
Working Capital 2012 2090 2763 3396 3865
Fixed Assets 6769 8532 10691 13608 16033
Total Capital (NWC+non-current assets) 8781 10622 13454 17004 19898
Tax Rate 38.9% 39.2% 39.0% 38.8% 38.6%
NOPAT - EBIT(1-t) 1159 1624 2322 2565 3029

Profitability
Return on Capital (NOPAT/Total Capital) 13.2% 15.3% 17.3% 15.1% 15.2%
Return on Equity (PAT/Shareholders' Equity) 16.3% 18.5% 18.8% 17.2% 16.8%

Margins
Gross Margin (Gross Profit/Sales) 29.2% 29.7% 30.9% 31.2% 31.6%
Cash Operating Expenses/ Sales 20.2% 19.6% 19.8% 20.7% 20.9%
Depreciation/Sales 1.2% 1.2% 1.2% 1.3% 1.4%
Depreciation/P&E 4.3% 4.6% 4.5% 4.6% 5.0%
Operating Margin (EBIT/Sales) 7.8% 8.8% 9.9% 9.2% 9.2%
NOPAT Margin (NOPAT/Sales) 4.8% 5.4% 6.0% 5.6% 5.7%

Turnover
Total Capital Turnover 2.8 2.8 2.9 2.7 2.7
P&E Turnover 3.7 3.7 3.8 3.5 3.5
Working Capital Turnover 12.0 14.5 13.9 13.5 13.9
Receivable Turnover 43.4 64.4 65.5 54.8 58.2
Inventory Turnover 4.7 4.9 4.8 4.8 5.4
Sales per Store 38.7 39.7 41.3 40.3 40.2
Sales per Square Foot 366.0 373.1 384.3 371.9 366.8
Sales per Transaction 43.9 45.4 48.2 48.8 49.1

Growth
Total Sales Growth 25.1% 27.2% 19.0% 17.1%
Sales Growth for Existing Stores 2.6% 4.1% -2.4% -0.4%
Growth in New stores 22.0% 22.2% 21.9% 17.5%
Growth in Sq. Footage per Store 0.6% 1.0% 0.9% 1.0%

Leverage
Total Capital/Equity 1.24 1.22 1.09 1.13 1.10
 2001 2002E 2003E 2004E 2005E 2006E

Assumptions
Growth in new stores 17.5% 15.0% 13.2% 9.0% 7.0% 5.5%
Sales growth for existing store -0.4% 3.0% 4.0% 8.3% 8.3% 8.3%
Total sales growth 17.1% 18.0% 17.2% 17.3% 15.3% 13.8%

Gross margin 31.6% 32.0% 32.3% 32.3% 32.4% 32.5%

Cash operating expense/sales 20.9% 21.0% 20.7% 20.8% 20.5% 20.5%
Depreciation/sales 1.4% 1.4% 1.4% 1.4% 1.4% 1.4%
Income tax rate 38.6% 37.6% 37.5% 37.5% 37.5% 37.5%

Cash & ST investment/sales 5.0% 5.0% 5.1% 5.3% 5.3%

Receivables turnover 58.2 55.0 53.0 52.0 50.0 50.0
Inventory turnover 5.4 5.3 5.1 5.0 4.7 4.7
P&E turnover 3.5 3.5 3.3 3.3 3.3 3.3
Payables turnover (payables/COGS 9.4% 9.4% 9.4% 9.4% 9.4% 9.4%
Other current liabilities/sales 4.4% 4.4% 4.4% 4.4% 4.4% 4.4%

Forecasts
Number of stores 1333 1533 1735 1891 2024 2135
Net sales 53553 63193 74062 86874 100166 113989
Cost of Sales 36642 42971 50140 58814 67712 76943
Gross Profit 16911 20222 23922 28060 32454 37046
Cash Operating Expenses 11215 13270 15331 18070 20534 23368
Depreciation and Amortization 764 902 1057 1239 1429 1626
EBIT 4932 6050 7535 8751 10491 12052
NOPAT 3029 3775 4709 5469 6557 7533

Cash and ST Investments 2546 3160 3703 4431 5309 6041

Accounts Receivables 920 1148.96 1397.39 1670.66 2003.32 2279.78
Merchandise Inventory 6725 8108 9831 11763 14407 16371
Other Current Assets 170 170 170 170 170 170
Total Current Assets 10361 12586.3 15101.8 18034 21889 24862
Accounts Payable 3436 4029 6945 8146 9393 10689
Accrued Salaries and Wages 717 717 717 717 717 717
Other Current Liabilities 2343 2765
Non-interest bearning CL 6496 7511 7662 8863 10110 11406
Working capital 3865 5076
Net Property and Equipment 15375 18143
Other Assets 658 658 658 658 658 658
Total capital 19898 23877 658 658 658 658
Return on Capital
 1997 1998 1999 2000 2001
Income Statement
Sales 10137 12245 15906 18779 22111
Cost of Sales 7447 8950 11525 13488 15743
Gross Profit 2690 3295 4381 5291 6368
Cash Operating Expenses 1825 2189 2870 3479 4036
Depreciation and Amortization 241 272 338 410 534
EBIT 624 834 1173 1402 1798
Non Recurring Expenses 0 0 24 0 0
Net Interest Expenses 66 75 85 121 173
EBT 558 759 1064 1281 1625
Income Tax 201 276 390 472 601
PAT 357 483 674 809 1024

1997 1998 1999 2000 2001

Balance Sheet
Cash and ST Investments 211 243 569 469 853
Accounts Receivables 118 144 148 161 166
Merchandise Inventory 1715 2105 2812 3285 3611
Other Current Assets 65 94 164 243 291
Total Current Assets 2109 2586 3693 4158 4921
Net Property and Equipment 3005 3637 5177 7035 8653
Other Assets 104 122 142 166 162
Total Assets 5218 6345 9012 11359 13736

Accounts Payable 969 1133 1567 1714 1715

Accrued Salaries and Wages 83 113 164 166 221
Short-term Borrowings 98 92 92 250 100
Current Maturities of Long-term Debt 12 99 60 42 59
Other Current Liabilities 286 328 503 738 922
Total Current Liabilities 1448 1765 2386 2910 3017
Long-term Debt 1046 1283 1727 2698 3734
Deffered Income Tax 124 160 200 251 305
Other Long-term Liabilities 0 0 4 3 6
Minority Interest 0 0 0 0 0
Shareholders' Equity 2601 3136 4695 5495 6674
Total Liabilities and Owners Equity 5219 6344 9012 11357 13736

Data
Number of Stores 477 520 576 650 744
Sq. Footage 40 48 57 68 81
Number of Transactions (millions) 231 268 299 342 395
Number of Employees 64070 72715 86160 94601 108317
Shares Outstanding 701 705 765 766 776
Earnings per Share 0.51 0.68 0.90 1.06 1.30
Avg. Annual Price-Earnings Ratio 19.5 28.2 30.1 22.0 27.5
Sq foot per store

No. of new stores opened

Sales per store
Sales Growth for Existing Stores
 1997 1998 1999 2000 2001
Ratios
Working Capital 673 920 1367 1290 1963
Fixed Assets 3109 3759 5319 7201 8815
Total Capital 3782 4679 6686 8491 10778
Tax Rate 36.0% 36.4% 36.7% 36.8% 37.0%
NOPAT - EBIT(1-t) 399 531 743 885 1133

Profitability
Return on Capital (NOPAT/Total Capital) 10.6% 11.3% 11.1% 10.4% 10.5%
Return on Equity (PAT/Shareholders' Equity) 13.7% 15.4% 14.4% 14.7% 15.3%

Margins
Gross Margin (Gross Profit/Sales) 26.5% 26.9% 27.5% 28.2% 28.8%
Cash Operating Expenses/ Sales 18.0% 17.9% 18.0% 18.5% 18.3%
Depreciation/Sales 2.4% 2.2% 2.1% 2.2% 2.4%
Depreciation/P&E 8.0% 7.5% 6.5% 5.8% 6.2%
Operating Margin (EBIT/Sales) 6.2% 6.8% 7.4% 7.5% 8.1%
NOPAT Margin (NOPAT/Sales) 3.9% 4.3% 4.7% 4.7% 5.1%

Turnover
Total Capital Turnover 2.7 2.6 2.4 2.2 2.1
P&E Turnover 3.4 3.4 3.1 2.7 2.6
Working Capital Turnover 15.1 13.3 11.6 14.6 11.3
Receivable Turnover 85.9 85.0 107.5 116.6 133.2
Inventory Turnover 4.3 4.3 4.1 4.1 4.4
Sales per Store 21.3 23.5 27.6 28.9 29.7
Sales per Square Foot 253.4 255.1 279.1 276.2 273.0
Sales per Transaction 43.9 45.7 53.2 54.9 56.0

Growth
Total Sales Growth 20.8% 29.9% 18.1% 17.7%
Sales Growth for Existing Stores (per store basis) 10.8% 17.3% 4.6% 2.9%
Growth in New stores 9.0% 10.8% 12.8% 14.5%
Growth in Sq. Footage per Store 10.1% 7.2% 5.7% 4.1%
Growth in stores 9.0% 10.8% 12.8% 14.5%

Leverage
Total Capital/Equity 1.45 1.49 1.42 1.55 1.61
 2001 2002E 2003E 2004E 2005E 2006E

Assumptions
Growth in new stores
Sales growth for existing store
Total sales growth

Gross margin
Cash operating expense/sales
Depreciation/sales
Income tax rate

Cash & ST investment/sales

Receivables turnover
Inventory turnover
P&E turnover
Payables/COGS
Other current liabilities/sales

Forecasts
Number of stores
Net sales
Cost of Sales
Gross Profit
Cash Operating Expenses
Depreciation and Amortization
EBIT
NOPAT 0 0 0 0 0 0

Cash and ST Investments

Accounts Receivables
Merchandise Inventory
Other Current Assets
Total Current Assets 0 0 0 0 0 0
Accounts Payable
Accrued Salaries and Wages
Other Current Liabilities
Non-interest bearning CL
Working capital
Net Property and Equipment
Other Assets
Total capital 0 0 0 0 0 0
Return on Capital