x
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF
1934
|
For
the quarterly period ended November 2,
2007
|
Commission
file number
1-7898
|
LOWE'S
COMPANIES,
INC.
|
(Exact
name of registrant as specified in its
charter)
|
NORTH
CAROLINA
|
56-0578072
|
(State
or other jurisdiction of incorporation or organization)
|
(I.R.S.
Employer Identification No.)
|
1000
Lowe's Blvd., Mooresville, NC
|
28117
|
(Address
of principal executive offices)
|
(Zip
Code)
|
|
|
Registrant's
telephone number, including area code
|
(704)
758-1000
|
x
|
Yes
|
o
|
No
|
Large
accelerated filer
x
|
Accelerated
filer
o
|
Non-accelerated
filer
o
|
o
|
Yes
|
x
|
No
|
CLASS
|
OUTSTANDING
AT NOVEMBER 30, 2007
|
|
Common
Stock, $.50 par value
|
1,462,603,002
|
LOWE’S
COMPANIES, INC.
-
INDEX -
|
|||
PART
I - Financial Information
|
Page
No.
|
||
Item
1. Financial Statements
|
|||
3
|
|||
4
|
|||
5
|
|||
6-11
|
|||
12
|
|||
13-20
|
|||
20
|
|||
|
|||
Item
4.
Controls and
Procedures
|
20
|
||
PART
II - Other Information
|
|||
Item
1A.
Risk Factors
|
21
|
||
21
|
|||
Item
6.
Exhibits
|
22
|
||
23
|
|||
24
|
|||
Lowe's
Companies, Inc.
|
||||||||||||||||
Consolidated
Balance Sheets
|
||||||||||||||||
In
Millions, Except Par Value Data
|
||||||||||||||||
(Unaudited)
|
(Unaudited)
|
|||||||||||||||
November
2, 2007
|
November
3, 2006
|
February
2, 2007
|
||||||||||||||
Assets
|
||||||||||||||||
Current
assets:
|
||||||||||||||||
Cash
and cash equivalents
|
$ |
336
|
$ |
657
|
$ |
364
|
||||||||||
Short-term
investments
|
231
|
464
|
432
|
|||||||||||||
Merchandise
inventory - net
|
7,775
|
7,219
|
7,144
|
|||||||||||||
Deferred
income taxes - net
|
241
|
157
|
161
|
|||||||||||||
Other
current assets
|
193
|
125
|
213
|
|||||||||||||
Total
current assets
|
8,776
|
8,622
|
8,314
|
|||||||||||||
Property,
less accumulated depreciation
|
20,755
|
18,188
|
18,971
|
|||||||||||||
Long-term
investments
|
333
|
121
|
165
|
|||||||||||||
Other
assets
|
325
|
242
|
317
|
|||||||||||||
Total
assets
|
$ |
30,189
|
$ |
27,173
|
$ |
27,767
|
||||||||||
Liabilities
and shareholders' equity
|
||||||||||||||||
Current
liabilities:
|
||||||||||||||||
Short-term
borrowings
|
$ |
16
|
$ |
-
|
$ |
23
|
||||||||||
Current
maturities of long-term debt
|
35
|
89
|
88
|
|||||||||||||
Accounts
payable
|
3,895
|
3,416
|
3,524
|
|||||||||||||
Accrued
salaries and wages
|
437
|
432
|
425
|
|||||||||||||
Self-insurance
liabilities
|
653
|
616
|
650
|
|||||||||||||
Deferred
revenue
|
793
|
846
|
731
|
|||||||||||||
Other
current liabilities
|
1,363
|
1,315
|
1,098
|
|||||||||||||
Total
current liabilities
|
7,192
|
6,714
|
6,539
|
|||||||||||||
Long-term
debt, excluding current maturities
|
5,580
|
4,337
|
4,325
|
|||||||||||||
Deferred
income taxes - net
|
615
|
683
|
735
|
|||||||||||||
Other
liabilities
|
748
|
353
|
443
|
|||||||||||||
Total
liabilities
|
14,135
|
12,087
|
12,042
|
|||||||||||||
Shareholders'
equity:
|
||||||||||||||||
Preferred
stock - $5 par value, none issued
|
-
|
-
|
-
|
|||||||||||||
Common
stock - $.50 par value;
|
||||||||||||||||
Shares
issued and outstanding
|
||||||||||||||||
November
2, 2007
|
1,470 | |||||||||||||||
November
3, 2006
|
1,520 | |||||||||||||||
February
2, 2007
|
1,525 |
735
|
760
|
762
|
||||||||||||
Capital
in excess of par value
|
20
|
-
|
102
|
|||||||||||||
Retained
earnings
|
15,281
|
14,323
|
14,860
|
|||||||||||||
Accumulated
other comprehensive income
|
18
|
3
|
1
|
|||||||||||||
Total
shareholders' equity
|
16,054
|
15,086
|
15,725
|
|||||||||||||
Total
liabilities and shareholders' equity
|
$ |
30,189
|
$ |
27,173
|
$ |
27,767
|
||||||||||
Consolidated
Statements of Current and Retained Earnings
(Unaudited)
|
||||||||||||||||||||||||||||||||
In
Millions, Except Per Share Data
|
||||||||||||||||||||||||||||||||
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||||||||||||||||||
November
2, 2007
|
November
3, 2006
|
November
2, 2007
|
November
3, 2006
|
|||||||||||||||||||||||||||||
Current
Earnings
|
Amount
|
Percent
|
Amount
|
Percent
|
Amount
|
Percent
|
Amount
|
Percent
|
||||||||||||||||||||||||
Net
sales
|
$ |
11,565
|
100.00
|
$ |
11,211
|
100.00
|
$ |
37,904
|
100.00
|
$ |
36,522
|
100.00
|
||||||||||||||||||||
Cost
of sales
|
7,601
|
65.73
|
7,346
|
65.53
|
24,798
|
65.42
|
24,011
|
65.74
|
||||||||||||||||||||||||
Gross
margin
|
3,964
|
34.27
|
3,865
|
34.47
|
13,106
|
34.58
|
12,511
|
34.26
|
||||||||||||||||||||||||
Expenses:
|
||||||||||||||||||||||||||||||||
Selling,
general and administrative
|
2,503
|
21.63
|
2,320
|
20.70
|
8,026
|
21.17
|
7,404
|
20.27
|
||||||||||||||||||||||||
Store
opening costs
|
41
|
0.36
|
44
|
0.39
|
79
|
0.21
|
97
|
0.27
|
||||||||||||||||||||||||
Depreciation
|
340
|
2.94
|
297
|
2.65
|
995
|
2.63
|
854
|
2.34
|
||||||||||||||||||||||||
Interest
- net
|
50
|
0.43
|
45
|
0.40
|
148
|
0.39
|
110
|
0.30
|
||||||||||||||||||||||||
Total
expenses
|
2,934
|
25.36
|
2,706
|
24.14
|
9,248
|
24.40
|
8,465
|
23.18
|
||||||||||||||||||||||||
Pre-tax
earnings
|
1,030
|
8.91
|
1,159
|
10.33
|
3,858
|
10.18
|
4,046
|
11.08
|
||||||||||||||||||||||||
Income
tax provision
|
387
|
3.35
|
443
|
3.94
|
1,457
|
3.85
|
1,554
|
4.26
|
||||||||||||||||||||||||
Net
earnings
|
$ |
643
|
5.56
|
$ |
716
|
6.39
|
$ |
2,401
|
6.33
|
$ |
2,492
|
6.82
|
||||||||||||||||||||
Weighted
average shares outstanding - basic
|
1,470
|
1,522
|
1,490
|
1,540
|
||||||||||||||||||||||||||||
Basic
earnings per share
|
$ |
0.44
|
$ |
0.47
|
$ |
1.61
|
$ |
1.62
|
||||||||||||||||||||||||
Weighted
average shares outstanding - diluted
|
1,497
|
1,551
|
1,519
|
1,571
|
||||||||||||||||||||||||||||
Diluted
earnings per share
|
$ |
0.43
|
$ |
0.46
|
$ |
1.58
|
$ |
1.59
|
||||||||||||||||||||||||
Cash
dividends per share
|
$ |
0.08
|
$ |
0.05
|
$ |
0.21
|
$ |
0.13
|
||||||||||||||||||||||||
Retained
Earnings
|
||||||||||||||||||||||||||||||||
Balance
at beginning of period
|
$ |
15,210
|
$ |
13,843
|
$ |
14,860
|
$ |
12,191
|
||||||||||||||||||||||||
Cumulative
effect adjustment (Note 12)
|
-
|
-
|
(8 | ) |
-
|
|||||||||||||||||||||||||||
Net
earnings
|
643
|
716
|
2,401
|
2,492
|
||||||||||||||||||||||||||||
Cash
dividends
|
(118 | ) | (76 | ) | (312 | ) | (200 | ) | ||||||||||||||||||||||||
Share
repurchases
|
(454 | ) | (160 | ) | (1,660 | ) | (160 | ) | ||||||||||||||||||||||||
Balance
at end of period
|
$ |
15,281
|
$ |
14,323
|
$ |
15,281
|
$ |
14,323
|
||||||||||||||||||||||||
Consolidated
Statements of Cash Flows (Unaudited)
|
||||||||
In
Millions
|
||||||||
Nine
Months Ended
|
||||||||
November
2, 2007
|
November
3, 2006
|
|||||||
Cash
flows from operating activities:
|
||||||||
Net
earnings
|
$ |
2,401
|
$ |
2,492
|
||||
Adjustments
to reconcile net earnings to net cash provided by
operating
activities:
|
||||||||
Depreciation
and amortization
|
1,069
|
907
|
||||||
Deferred
income taxes
|
(42 | ) | (54 | ) | ||||
Loss
on disposition/writedown of fixed and other assets
|
33
|
35
|
||||||
Share-based
payment expense
|
69
|
56
|
||||||
Changes
in operating assets and liabilities:
|
||||||||
Merchandise
inventory - net
|
(630 | ) | (584 | ) | ||||
Other
operating assets
|
43
|
(26 | ) | |||||
Accounts
payable
|
368
|
584
|
||||||
Other
operating liabilities
|
474
|
233
|
||||||
Net
cash provided by operating activities
|
3,785
|
3,643
|
||||||
Cash
flows from investing activities:
|
||||||||
Purchases
of short-term investments
|
(592 | ) | (248 | ) | ||||
Proceeds
from sale/maturity of short-term investments
|
853
|
490
|
||||||
Purchases
of long-term investments
|
(1,286 | ) | (225 | ) | ||||
Proceeds
from sale/maturity of long-term investments
|
1,057
|
141
|
||||||
Increase
in other long-term assets
|
(20 | ) | (8 | ) | ||||
Fixed
assets acquired
|
(2,912 | ) | (2,724 | ) | ||||
Proceeds
from the sale of fixed and other long-term assets
|
51
|
30
|
||||||
Net
cash used in investing activities
|
(2,849 | ) | (2,544 | ) | ||||
Cash
flows from financing activities:
|
||||||||
Net
decrease in short-term borrowings
|
(9 | ) |
-
|
|||||
Proceeds
from issuance of long-term debt
|
1,294
|
991
|
||||||
Repayment
of long-term debt
|
(89 | ) | (24 | ) | ||||
Proceeds
from issuance of common stock under employee stock purchase
plan
|
40
|
36
|
||||||
Proceeds
from issuance of common stock from stock options exercised
|
58
|
64
|
||||||
Cash
dividend payments
|
(312 | ) | (200 | ) | ||||
Repurchase
of common stock
|
(1,950 | ) | (1,737 | ) | ||||
Excess
tax benefits of share-based payments
|
4
|
5
|
||||||
Net
cash used in financing activities
|
(964 | ) | (865 | ) | ||||
Net
(decrease) increase in cash and cash equivalents
|
(28 | ) |
234
|
|||||
Cash
and cash equivalents, beginning of period
|
364
|
423
|
||||||
Cash
and cash equivalents, end of period
|
$ |
336
|
$ |
657
|
||||
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
(In
millions)
|
November
2, 2007
|
November
3, 2006
|
November
2, 2007
|
November
3, 2006
|
||||||||||||
Extended
warranty deferred
revenue,
beginning of period
|
$ |
373
|
$ |
273
|
$ |
315
|
$ |
206
|
||||||||
Additions
to deferred revenue
|
42
|
34
|
136
|
116
|
||||||||||||
Deferred
revenue recognized
|
(23 | ) | (11 | ) | (59 | ) | (26 | ) | ||||||||
Extended
warranty deferred
revenue,
end of period
|
$ |
392
|
$ |
296
|
$ |
392
|
$ |
296
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
(In
millions)
|
November
2, 2007
|
November
3, 2006
|
November
2, 2007
|
November
3, 2006
|
||||||||||||
Liability
for extended warranty
claims,
beginning of period
|
$ |
18
|
$ |
-
|
$ |
10
|
$ |
-
|
||||||||
Accrual
for claims incurred
|
17
|
8
|
36
|
10
|
||||||||||||
Claim
payments
|
(9 | ) | (2 | ) | (20 | ) | (4 | ) | ||||||||
Liability
for extended warranty
claims,
end of period
|
$ |
26
|
$ |
6
|
$ |
26
|
$ |
6
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
(In
millions, except per share data)
|
November
2,
2007
|
November
3,
2006
|
November
2,
2007
|
November
3,
2006
|
||||||||||||
Basic
earnings per share:
|
||||||||||||||||
Net
earnings
|
$ |
643
|
$ |
716
|
$ |
2,401
|
$ |
2,492
|
||||||||
Weighted-average
shares outstanding
|
1,470
|
1,522
|
1,490
|
1,540
|
||||||||||||
Basic
earnings per share
|
$ |
0.44
|
$ |
0.47
|
$ |
1.61
|
$ |
1.62
|
||||||||
Diluted
earnings per share:
|
||||||||||||||||
Net
earnings
|
$ |
643
|
$ |
716
|
$ |
2,401
|
$ |
2,492
|
||||||||
Net
earnings adjustment for interest on convertible notes, net of
tax
|
-
|
1
|
2
|
3
|
||||||||||||
Net
earnings, as adjusted
|
$ |
643
|
$ |
717
|
$ |
2,403
|
$ |
2,495
|
||||||||
Weighted-average
shares outstanding
|
1,470
|
1,522
|
1,490
|
1,540
|
||||||||||||
Dilutive
effect of share-based awards
|
7
|
8
|
8
|
8
|
||||||||||||
Dilutive
effect of convertible notes
|
20
|
21
|
21
|
23
|
||||||||||||
Weighted-average
shares, as adjusted
|
1,497
|
1,551
|
1,519
|
1,571
|
||||||||||||
Diluted
earnings per share
|
$ |
0.43
|
$ |
0.46
|
$ |
1.58
|
$ |
1.59
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
(In
millions)
|
November
2, 2007
|
November
3, 2006
|
November
2, 2007
|
November
3, 2006
|
||||||||||||
Long-term
debt
|
$ |
65
|
$ |
45
|
$ |
174
|
$ |
129
|
||||||||
Capitalized
leases
|
8
|
8
|
24
|
25
|
||||||||||||
Interest
income
|
(10 | ) | (9 | ) | (34 | ) | (36 | ) | ||||||||
Interest
capitalized
|
(22 | ) | (10 | ) | (30 | ) | (23 | ) | ||||||||
Other
|
9
|
11
|
14
|
15
|
||||||||||||
Interest
- net
|
$ |
50
|
$ |
45
|
$ |
148
|
$ |
110
|
Nine
Months Ended
|
||||||||
(In
millions)
|
November
2, 2007
|
November
3, 2006
|
||||||
Cash
paid for interest, net of amount capitalized
|
$ |
199
|
$ |
155
|
||||
Cash
paid for income taxes
|
$ |
1,336
|
$ |
1,617
|
||||
Non-cash
investing and financing activities:
|
||||||||
Non-cash
fixed asset acquisitions
|
$ |
125
|
$ |
198
|
||||
Conversions
of long-term debt to equity
|
$ |
13
|
$ |
75
|
Three
Months Ended
|
Basis
Point Increase / (Decrease) in Percentage of Net Sales
from
Prior
Period
|
Percentage
Increase / (Decrease) in Dollar Amounts from Prior
Period
|
||||||||||||||
November
2, 2007
|
November
3, 2006
|
2007
vs. 2006
|
2007
vs. 2006
|
|||||||||||||
Net
sales
|
100.00 | % | 100.00 | % |
N/A
|
3.2 | % | |||||||||
Gross
margin
|
34.27
|
34.47
|
(20 | ) |
2.6
|
|||||||||||
Expenses:
|
||||||||||||||||
Selling,
general and administrative
|
21.63
|
20.70
|
93
|
7.8
|
||||||||||||
Store
opening costs
|
0.36
|
0.39
|
(3 | ) | (6.4 | ) | ||||||||||
Depreciation
|
2.94
|
2.65
|
29
|
14.4
|
||||||||||||
Interest
- net
|
0.43
|
0.40
|
3
|
12.5
|
||||||||||||
Total
expenses
|
25.36
|
24.14
|
122
|
8.4
|
||||||||||||
Pre-tax
earnings
|
8.91
|
10.33
|
(142 | ) | (11.1 | ) | ||||||||||
Income
tax provision
|
3.35
|
3.94
|
(59 | ) | (12.4 | ) | ||||||||||
Net
earnings
|
5.56 | % | 6.39 | % | (83 | ) | (10.3 | )% |
Nine
Months Ended
|
Basis
Point Increase / (Decrease) in Percentage of Net Sales from Prior
Period
|
Percentage
Increase / (Decrease) in Dollar Amounts from Prior
Period
|
||||||||||||||
November
2, 2007
|
November
3, 2006
|
2007
vs. 2006
|
2007
vs. 2006
|
|||||||||||||
Net
sales
|
100.00 | % | 100.00 | % |
N/A
|
3.8 | % | |||||||||
Gross
margin
|
34.58
|
34.26
|
32
|
4.8
|
||||||||||||
Expenses:
|
||||||||||||||||
Selling,
general and administrative
|
21.17
|
20.27
|
90
|
8.4
|
||||||||||||
Store
opening costs
|
0.21
|
0.27
|
(6 | ) | (18.1 | ) | ||||||||||
Depreciation
|
2.63
|
2.34
|
29
|
16.6
|
||||||||||||
Interest
- net
|
0.39
|
0.30
|
9
|
33.7
|
||||||||||||
Total
expenses
|
24.40
|
23.18
|
122
|
9.3
|
||||||||||||
Pre-tax
earnings
|
10.18
|
11.08
|
(90 | ) | (4.7 | ) | ||||||||||
Income
tax provision
|
3.85
|
4.26
|
(41 | ) | (6.2 | ) | ||||||||||
Net
earnings
|
6.33 | % | 6.82 | % | (49 | ) | (3.7 | )% |
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
Other
metrics:
|
November
2, 2007
|
November
3, 2006
|
November
2, 2007
|
November
3, 2006
|
||||||||||||
Comparable
store sales changes
(1)
|
(4.3 | )% | (4.0 | )% | (4.3 | )% | 1.7 | % | ||||||||
Customer
transactions (in millions)
|
173
|
165
|
558
|
524
|
||||||||||||
Average
ticket
(2)
|
$ |
66.95
|
$ |
67.97
|
$ |
67.92
|
$ |
69.68
|
||||||||
At
end of period:
|
||||||||||||||||
Number
of stores
|
1,464
|
1,330
|
||||||||||||||
Sales
floor square feet (in millions)
|
166
|
151
|
||||||||||||||
Average
store size square feet (in thousands)
(3)
|
113
|
114
|
Current
Debt Ratings
|
S&P
|
Moody’s
|
Fitch
|
Commercial
paper
|
A1
|
P1
|
F1+
|
Senior
debt
|
A+
|
A1
|
A+
|
Outlook
|
Stable
|
Stable
|
Stable
|
Payments
Due by Period
|
||||||||||||||||||||
Contractual
Obligations
|
Less
than
|
1-3
|
4-5
|
After
5
|
||||||||||||||||
(In
millions)
|
Total
|
1
year
|
years
|
years
|
years
|
|||||||||||||||
Long-term
debt (principal and interest
amounts,
excluding discount)
|
$ |
10,185
|
$ |
307
|
$ |
1,090
|
$ |
1,058
|
$ |
7,730
|
Issuer Purchases of Equity Securities | ||||||||||||||||
(In
millions, except average
price
paid per share)
|
Total
Number of Shares Purchased
(1)
|
Average
Price Paid per Share
|
Total
Number of Shares Purchased as Part of Publicly Announced Plans
or
Programs
|
Dollar
Value of Shares that May Yet Be Purchased Under the Plans or Programs
(2)
|
||||||||||||
August
4, 2007 – August 31, 2007
|
6.7
|
$ |
29.90
|
6.7
|
$ |
2,839
|
||||||||||
September
1, 2007 – October 5, 2007
|
9.9
|
30.26
|
9.9
|
2,539
|
||||||||||||
October
6, 2007 – November 2, 2007
|
-
|
-
|
-
|
2,539
|
||||||||||||
As
of November 2, 2007
|
16.6
|
$ |
30.12
|
16.6
|
$ |
2,539
|
(1)
|
During
the third quarter of fiscal 2007, the Company repurchased an aggregate
of
16,602,566 shares of its common stock pursuant to the share repurchase
program (the Program). The total number of shares purchased also
includes a nominal amount of shares repurchased from employees
to satisfy
the exercise price of certain stock option
exercises.
|
(2)
|
On
May 25, 2007, the Company’s Board of Directors authorized up to an
additional $3 billion in share repurchases and extended the period
of the
Program through fiscal 2009. The Company will continue
implementing the Program through purchases made from time to time
either
in the open market or through private transactions, in accordance
with SEC
regulations.
|
LOWE'S
COMPANIES, INC.
|
||
December
11, 2007
Date
|
/s/Matthew
V. Hollifield
Matthew
V. Hollifield
Senior
Vice President and Chief Accounting
Officer
|
Exhibit
No.
|
|
Description
|
10.1
|
Amendment
Number One to the Lowe’s Companies Cash Deferral Plan
|
|
10.2
|
Lowe’s
Companies Benefit Restoration Plan Amended and Restated as of January
1,
2008
|
|
12.1
|
Statement
Re Computation of Ratio of Earnings to Fixed Charges
|
|
15.1
|
Deloitte
& Touche LLP Letter Re Unaudited Interim Financial
Information
|
|
31.1
|
|
Certification
Pursuant to Rules 13a-14(a) and 15d-14(a) Under the Securities
Exchange
Act of 1934, as Amended
|
|
|
|
31.2
|
|
Certification
Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities
Exchange
Act of 1934, as Amended
|
|
|
|
32.1
|
|
Certification
Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section
906 of
the Sarbanes-Oxley Act of 2002
|
|
|
|
32.2
|
|
Certification
Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section
906 of
the Sarbanes-Oxley Act of 2002
|
Table
of Contents
|
||
Page
No.
|
||
SECTION
1.
|
Nature
of the Plan
|
1
|
SECTION
2.
|
Definitions
|
1
|
SECTION
3.
|
Eligibility
and Participation
|
3
|
SECTION
4.
|
Funding
|
4
|
SECTION
5.
|
Employee
Deferrals
|
4
|
SECTION
6.
|
Company
Matching Contributions
|
5
|
SECTION
7.
|
Deemed
Investment of Account
|
5
|
SECTION
8.
|
Vesting
|
6
|
SECTION
9.
|
Payment
of Account
|
6
|
SECTION
10
|
Administration
|
7
|
SECTION
11.
|
Claims
Procedure
|
8
|
SECTION
12.
|
Limitation
on Participants’ Rights
|
8
|
SECTION
13.
|
Rights
of Participants and Beneficiaries
|
9
|
SECTION
14.
|
Plan
Binding
|
9
|
SECTION
15.
|
Future
of the Plan
|
9
|
SECTION
16.
|
Governing
Law
|
10
|
SECTION
17.
|
Compliance
with Code Section 409A
|
10
|
401(k)
Plan
|
The
Lowe’s Companies 401(k) Plan, a stock bonus and profit sharing plan
that
includes a cash or deferred arrangement under Section 401(k) of
the
Code.
|
Account
|
The
account established and maintained for bookkeeping purposes to
reflect the
interest of a Participant in the Plan. Each Account shall
reflect Employee Deferrals by the Participants and Company Matching
Contributions, as well as additions, withdrawals, and adjustments
to the
Account (including adjustments for appreciation and depreciation
in the
deemed investments). Each Account shall include one sub-account
for Employee Deferrals and one sub-Account for Company Matching
Contributions. The Account shall be a bookkeeping entry only
and shall be utilized solely as a device for the measurement and
determination of the amounts to be paid to a Participant or Beneficiary
under the Plan.
|
Base
Pay
|
The
base pay paid to a Participant by the Company in the Plan Year,
plus the
amount (if any) of (i) Salary Deferral Contributions made on his
behalf
under the 401(k) Plan, (ii) salary reductions under Section 125
of the
Code and (iii) any base pay that is deferred under this or any
other plan
of non-qualified deferred compensation that is adopted and maintained
by
the Company.
|
Beneficiary
|
The
person (or persons) designated by a Participant to receive benefits
under
the Plan in the event of the Participant’s death. If a Participant fails
to make such designation, the Participant’s Beneficiary shall be deemed to
be his surviving spouse, or if none, his
estate.
|
Code
|
The
Internal Revenue Code of 1986, as
amended.
|
Committee
|
The
Administrative Committee of the 401(k) Plan appointed by the Board
of
Directors of the Company, which has been given authority by the
Board of
Directors to designate Participants and to administer the
Plan.
|
Company
|
Lowe’s
Companies, Inc, a North Carolina corporation, and its direct or
indirect
wholly-owned subsidiaries (including wholly-owned limited liability
companies).
|
Compensation
|
The
salary or wages, overtime premium pay, bonuses, commissions and
all other
pay considered to be “Deferral Compensation” under the 401(k) Plan but
without regard to the Code Section 401(a)(17) limit on
compensation.
|
Company
Matching Contributions
|
The
Company matching contributions made under this Plan pursuant to
Section
6.
|
Election
Date
|
The
date by which a Participant must make a Participation Election
to
participate in the Plan for a Plan Year. Effective for Plan
Years beginning on and after January 1, 2008, the Election Date
shall be
no later than six months preceding the end of the fiscal year that
ends
during such Plan Year.
|
Employee
Deferral
|
The
employee pre-tax deferrals made under this Plan pursuant to Section
5.
|
ERISA
|
Public
Law 93-406, popularly known as the “Employee Retirement Income Security
Act of 1974,” as amended.
|
Participant
|
Any
employee or former employee who has met the applicable eligibility
requirements of Section 3 and who has not yet received a complete
distribution of his Account.
|
Participation
Election
|
A
Participant’s irrevocable election under the Plan to participate in the
Plan for a given Plan Year.
|
Plan
|
The
Lowe’s Companies Benefit Restoration Plan, as set forth herein, and
as it
may be amended from time to time.
|
Plan
Year
|
Effective
February 3, 2007, the calendar year. The period February 3,
2007 through December 31, 2007 shall be a short Plan
Year. Prior to February 3, 2007, the Plan Year was the
52/53-week period ending on the Friday closest to January 31 of
each year
(and coinciding with the fiscal year of the
Company).
|
Salary
Deferral Contributions
|
The
contributions made to the 401(k) Plan pursuant to the elections
of the
Participants as described in Section 4(a) of the 401(k)
Plan.
|
|
(B)
|
the
percentage of Compensation the Participant irrevocably elected
to defer to
the 401(k) Plan for each payroll period during such Plan Year (without
regard to any “catch up” deferrals elected to be made to the 401(k) Plan);
and
|
|
(2)
|
the
percentage of such Participant’s Compensation credited to the
Participant’s account under the 401(k) Plan as a Salary Deferral
Contribution for such payroll
period.
|
|
(1)
|
The
balance (if any) in his Account (including sub-accounts) as of
the
beginning of the Plan Year.
|
|
(2)
|
The
amount allocated to his Account (including sub-accounts) for the
Plan
Year.
|
|
(3)
|
The
new balance in his Account (including
sub-accounts).
|
Fiscal
Years Ended On
|
Nine
Months Ended
|
|||||||||||||||||||||||||||
January
31,
|
January
30,
|
January
28,
|
February
3,
|
February
2,
|
November
3,
|
November
2,
|
||||||||||||||||||||||
2003
|
2004
|
2005
|
2006
|
2007
|
2006
|
2007
|
||||||||||||||||||||||
Earnings:
|
||||||||||||||||||||||||||||
Earnings
Before Income Taxes
|
$ |
2,362
|
$ |
2,908
|
$ |
3,520
|
$ |
4,496
|
$ |
4,998
|
$ |
4,046
|
$ |
3,858
|
||||||||||||||
Add:
Fixed Charges
|
303
|
303
|
310
|
340
|
344
|
248
|
303
|
|||||||||||||||||||||
Less:
Capitalized Interest
|
(25 | ) | (26 | ) | (28 | ) | (28 | ) | (32 | ) | (23 | ) | (30 | ) | ||||||||||||||
Adjusted
Earnings
|
$ |
2,640
|
$ |
3,185
|
$ |
3,802
|
$ |
4,808
|
$ |
5,310
|
$ |
4,271
|
$ |
4,131
|
||||||||||||||
Fixed
Charges:
|
||||||||||||||||||||||||||||
Interest
Expense
(1)
|
$ |
228
|
$ |
224
|
$ |
220
|
$ |
231
|
$ |
238
|
$ |
169
|
$ |
212
|
||||||||||||||
Rental
Expense
(2)
|
75
|
79
|
90
|
109
|
106
|
79
|
91
|
|||||||||||||||||||||
Total
Fixed Charges
|
$ |
303
|
$ |
303
|
$ |
310
|
$ |
340
|
$ |
344
|
$ |
248
|
$ |
303
|
||||||||||||||
Ratio
of Earnings to Fixed Charges
|
8.7
|
10.5
|
12.3
|
14.1
|
15.4
|
17.2
|
13.6
|
(1)
Interest
accrued on uncertain tax positions as a result of the implementation
of
FIN 48 is excluded from Interest Expense in the computation of
Fixed Charges.
|
·
|
Registration
Statement No. 33-54497 on Form S-8,
|
·
|
Registration
Statement No. 33-54499 on Form S-8,
|
·
|
Registration
Statement No. 333-34631 on Form
S-8,
|
·
|
Registration
Statement No. 333-75793 on Form
S-8,
|
·
|
Registration
Statement No. 333-89471 on Form
S-8,
|
·
|
Registration
Statement No. 333-36096 on Form
S-8,
|
·
|
Registration
Statement No. 333-73408 on Form
S-8,
|
·
|
Post-Effective
Amendment No. 1 to Registration Statement No. 333-73408 on Form
S-8,
|
·
|
Registration
Statement No. 333-97811 on Form
S-8,
|
·
|
Registration
Statement No. 333-33230 on Form
S-3/A,
|
·
|
Registration
Statement No. 333-114435 on Form
S-8,
|
·
|
Registration
Statement No. 333-55252 on Form
S-3/A,
|
·
|
Registration
Statement No. 333-72905 on Form
S-3MEF,
|
·
|
Registration
Statement No. 333-42733 on Form
S-3,
|
·
|
Registration
Statement No. 333-14257 on Form
S-3,
|
·
|
Registration
Statement No. 333-51865 on Form
S-3,
|
·
|
Registration
Statement No. 333-60434 on Form
S-3/A,
|
·
|
Post-Effective
Amendment No. 6 to Registration Statement No. 333-60434 on Form
S-3,
|
·
|
Registration
Statement No. 333-72585 on Form
S-4/A,
|
·
|
Registration
Statement No. 333-83201 on Form
S-4,
|
·
|
Registration
Statement No. 333-34580 on Form
S-3/A
|
·
|
Registration
Statement No. 333-128779 on Form
S-3MEF,
|
·
|
Registration
Statement No. 333-137750 on Form
S-3ASR,
|
·
|
Registration
Statement No. 333-138031 on Form S-8,
and
|
·
|
Registration
Statement No. 333-143266 on Form
S-8.
|
(a) |
Designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to
ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is
being
prepared;
|
(b) |
Designed
such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision,
to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles;
|
(c) |
Evaluated
the effectiveness of the registrant's disclosure controls and procedures
and presented in this report our conclusions about the effectiveness
of
the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation; and
|
(d) |
Disclosed
in this report any change in the registrant's internal control over
financial reporting that occurred during the registrant's most recent
fiscal quarter (the registrant's fourth fiscal quarter in the case
of an
annual report) that has materially affected, or is reasonably likely
to
materially affect, the registrant's internal control over financial
reporting; and
|
(a) |
All
significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to
record,
process, summarize and report financial information; and
|
(b) |
Any
fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
control
over financial reporting.
|
December
11, 2007
|
/s/
Robert A. Niblock
|
|
Date
|
Robert
A. Niblock
Chairman
of the Board and Chief Executive
Officer
|
(a) |
Designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to
ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is
being
prepared;
|
(b) |
Designed
such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision,
to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles;
|
(c) |
Evaluated
the effectiveness of the registrant's disclosure controls and procedures
and presented in this report our conclusions about the effectiveness
of
the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation; and
|
(d) |
Disclosed
in this report any change in the registrant's internal control over
financial reporting that occurred during the registrant's most recent
fiscal quarter (the registrant's fourth fiscal quarter in the case
of an
annual report) that has materially affected, or is reasonably likely
to
materially affect, the registrant's internal control over financial
reporting; and
|
(a) |
All
significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to
record,
process, summarize and report financial information; and
|
(b) |
Any
fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
control
over financial reporting.
|
December
11, 2007
|
/s/
Robert F. Hull, Jr.
|
|
Date
|
Robert
F. Hull, Jr.,
Executive
Vice President and Chief Financial
Officer
|
1. |
The
Report fully complies with the requirements of Section 13(a) or 15(d)
of
the Securities Exchange Act of 1934; and
|
2. |
The
information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the
Company.
|
1. |
The
Report fully complies with the requirements of Section 13(a) or 15(d)
of
the Securities Exchange Act of 1934; and
|
2. |
The
information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the
Company.
|