x
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the fiscal year ended January 28, 2011
|
|
or
|
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the transition period from ________ to _________
|
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
|
Title of each class
|
Name of each exchange on which registered
|
|
Common Stock, $0.50 Par Value
|
New York Stock Exchange (NYSE)
|
x
|
Yes
|
o
|
No
|
o
|
Yes
|
x
|
No
|
x
|
Yes
|
o
|
No
|
x
|
Yes
|
o
|
No
|
Large accelerated filer
x
|
Accelerated filer
o
|
Non-accelerated filer
o
|
Smaller reporting company
o
|
o
|
Yes
|
x
|
No
|
CLASS
|
OUTSTANDING AT MARCH 25, 2011
|
|
Common Stock, $0.50 par value
|
1,318,320,422
|
Document
|
Parts Into Which Incorporated
|
|
Portions of 2010 Annual Report to Lowe’s Shareholders
|
Parts I, II and IV
|
|
Portions of the Proxy Statement for Lowe’s 2011 Annual Meeting of Shareholders
|
Part III
|
·
|
The forecasted average unemployment rate of 9.0% for 2011 from the March 2011 Blue Chip Economic Indicators™ is lower than the 9.6% average seen in 2010, but suggests nonetheless that Americans will continue to face challenging employment prospects this year.
|
·
|
Home prices initially stabilized in late 2009 after falling nearly 25% from peak levels in 2005, according to data from the National Association of Realtors® and Moody’s Analytics. Home prices improved somewhat in 2010, supported by the federal home-buyer tax credit and voluntary foreclosure moratoria instituted by several large mortgage loan service providers. However, economists generally expect home prices to decline another 5% to 8% during 2011 as foreclosure activity accelerates.
|
·
|
Although growth in real disposable personal income continues to improve, it is projected to grow at a slower pace for 2011 than the long-term average annual increase of 3.4% during the period from 1960 to 2009. Real disposable personal income growth is forecasted to be 2.6% for calendar 2011, compared with 1.4% for calendar 2010, based on data from the March 2011 Blue Chip Economic Indicators™.
|
·
|
Housing turnover, which peaked in calendar year 2005, remains significantly below peak levels according to The National Association of Realtors. However, recent data suggests that housing turnover in 2011 will increase over 2010.
|
·
|
According to the U.S. Census Bureau, while U.S. home ownership levels over the past year have continued their decline, from 67.2% in the fourth quarter of 2009 to 66.5% in the fourth quarter of 2010, they remain above their historical average. Home ownership is important to our business because it provides an established customer base for home maintenance and repair projects.
|
·
|
The U.S. Environmental Protection Agency awarded us two consecutive ENERGY STAR® Sustained Excellence Awards in Retail (2010-2011), which recognizes our long-standing leadership as a retailer of energy-efficient products, as well as nine consecutive ENERGY STAR® awards (2003-2011), including four ENERGY STAR® Partner of the Year awards for educating consumers about the benefits of energy efficiency.
|
·
|
We participate in the Carbon Disclosure Project, an independent not-for-profit organization holding the largest database of primary corporate climate change information in the world.
|
·
|
We provide in-store customer recycling for plastic bags, CFLs and rechargeable batteries.
|
·
|
We were recognized as a Top 10 retailer participating in the U.S. Environmental Protection Agency’s Green Power Partnership program.
|
·
|
1,749 stores in the U.S., Canada and Mexico with a total of 197 million square feet of selling space. Of the total stores operating at January 28, 2011, approximately 89% are owned, which includes stores on leased land, with the remainder being leased from unaffiliated third-parties. Approximately 49% of our store leases are capital leases.
|
·
|
15 regional distribution centers. We own 14 of these facilities and lease one facility in Canada.
|
·
|
15 flatbed distribution centers for lumber and building commodities. One of these facilities is leased.
|
·
|
Three facilities to support our import business, Special Order Sales and internet fulfillment. One of these facilities is leased.
|
·
|
Three third-party transload facilities, which do not warehouse inventory but are the first point of receipt for imported products.
|
·
|
Three millwork facilities, two of which are leased.
|
·
|
One countertop fabrication facility and two additional leased showrooms.
|
·
|
Two data centers, which serve as hubs for our computer processing, critical data storage and information technology systems. One of these facilities is leased.
|
·
|
Our executive offices, which are located in Mooresville, North Carolina. We also own and maintain offices in Wilkesboro, North Carolina, and lease and maintain offices in Toronto, Canada, and Monterrey, Mexico, as well as sourcing offices in Asia and several regional offices in the U.S.
|
Name
|
Age
|
Title
|
Robert A. Niblock
|
48
|
Chairman of the Board and Chief Executive Officer since 2005.
|
Maureen K. Ausura
|
55
|
Executive Vice President, Human Resources since 2011; Senior Vice President, Human Resources, 2005 – 2011.
|
Gregory M. Bridgeford
|
56
|
Executive Vice President, Business Development since 2004.
|
Michael K. Brown
|
47
|
Executive Vice President and Chief Information Officer since 2011; Executive Vice President, Store Operations, 2006 – 2011; Senior Vice President, Store Operations, 2001 – 2006.
|
Marshall A. Croom
|
50
|
Senior Vice President and Chief Risk Officer since 2009; Senior Vice President, Merchandising and Store Support 2006 – 2009; Senior Vice President, Finance 2003 – 2006.
|
Rick D. Damron
|
48
|
Executive Vice President, Store Operations since 2011; Senior Vice President, Logistics, 2009 – 2011; Senior Vice President, Store Operations – North Central Division, 2008 – 2009; Senior Vice President, Store Operations – Northeast Division, 2004 – 2008.
|
Robert J. Gfeller, Jr.
|
49
|
Executive Vice President, Merchandising since 2011; Senior Vice President and General Merchandising Manager, Hardlines and Building Products, 2009 – 2011; Senior Vice President, Marketing, 1999 – 2009.
|
Matthew V. Hollifield
|
44
|
Senior Vice President and Chief Accounting Officer since 2005.
|
Robert F. Hull, Jr.
|
46
|
Executive Vice President and Chief Financial Officer since 2004.
|
Gaither M. Keener, Jr.
|
61
|
Executive Vice President, General Counsel, Secretary and Chief Compliance Officer since 2011; Senior Vice President, General Counsel, Secretary and Chief Compliance Officer, 2006 – 2011; Vice President, Deputy General Counsel, 2005 – 2006.
|
Joseph M. Mabry, Jr.
|
48
|
Executive Vice President, Logistics and Distribution since 2004.
|
N. Brian Peace
|
45
|
Senior Vice President, Corporate Affairs since 2006; Vice President, Corporate Communications, 1999 – 2006.
|
Janet M. Saura
|
46
|
Senior Vice President, Deputy General Counsel and Assistant Secretary since 2010; Vice President, Associate General Counsel and Assistant Secretary, 2006 – 2010.
|
Larry D. Stone
|
59
|
President and Chief Operating Officer since 2006; Senior Executive Vice President Merchandising/Marketing, 2005 – 2006.
|
Todd I. Woods
|
43
|
Senior Vice President, Deputy General Counsel and Assistant Secretary since 2009; Vice President, Associate General Counsel and Assistant Secretary, 2006 – 2009; Assistant General Counsel, 2005 – 2006.
|
(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
2
|
Dollar Value of
Shares that
May Yet Be
Purchased Under the
Plans or
Programs
2
|
||||||||||||
October 30, 2010 – November 26, 2010
|
13.6 | $ | 21.98 | 13.6 | $ | 3,100 | ||||||||||
November 27, 2010 – December 31, 2010
|
27.8 | 25.21 | 27.8 | 2,400 | ||||||||||||
January 1, 2011 – January 28, 2011
|
- | - | - | 2,400 | ||||||||||||
As of January 28, 2011
|
41.4 | $ | 24.15 | 41.4 | $ | 2,400 |
|
1
During the fourth quarter of fiscal 2010, the Company repurchased an aggregate of 41,415,475 shares of its common stock pursuant to a publicly announced share repurchase program described in note 2 below. The Company also repurchased an insignificant number of shares from employees to satisfy either the exercise price of stock options or the statutory withholding tax liability upon the vesting of restricted stock awards.
|
|
2
Authorization for up to $5 billion of share repurchases with no expiration was approved on January 29, 2010 by the Company’s Board of Directors. Although the repurchase authorization has no expiration, the Company expects to execute the program by the end of fiscal 2011 through purchases made from time to time either in the open market or through private transactions in accordance with SEC regulations.
|
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
|
||||||||||||||||
(In Millions)
|
Balance at
beginning of
period
|
Charges to
costs and
expenses
|
Deductions
|
Balance at
end of period
|
||||||||||||
January 28, 2011:
|
||||||||||||||||
Reserve for loss on obsolete inventory
|
$ | 49 | $ | - | $ | (10 | ) |
(a)
|
$ | 39 | ||||||
Reserve for inventory shrinkage
|
138 | 292 | (303 | ) |
(b)
|
127 | ||||||||||
Reserve for sales returns
|
51 | 1 |
(c)
|
- | 52 | |||||||||||
Deferred tax valuation allowance
|
65 | 34 |
(d)
|
- | 99 | |||||||||||
January 29, 2010:
|
||||||||||||||||
Reserve for loss on obsolete inventory
|
$ | 58 | $ | - | $ | (9 | ) |
(a)
|
$ | 49 | ||||||
Reserve for inventory shrinkage
|
129 | 291 | (282 | ) |
(b)
|
138 | ||||||||||
Reserve for sales returns
|
49 | 2 |
(c)
|
- | 51 | |||||||||||
Deferred tax valuation allowance
|
42 | 23 |
(d)
|
- | 65 | |||||||||||
January 30, 2009:
|
||||||||||||||||
Reserve for loss on obsolete inventory
|
$ | 67 | $ | - | $ | (9 | ) |
(a)
|
$ | 58 | ||||||
Reserve for inventory shrinkage
|
137 | 374 | (382 | ) |
(b)
|
129 | ||||||||||
Reserve for sales returns
|
51 | - | (2 | ) |
(c)
|
49 | ||||||||||
Deferred tax valuation allowance
|
22 | 20 |
(d)
|
- | 42 |
(a):
|
Represents the net increase/(decrease) in the required reserve based on the Company’s evaluation of obsolete inventory.
|
(b):
|
Represents the actual inventory shrinkage experienced at the time of physical inventories.
|
(c):
|
Represents the net increase/(decrease) in the required reserve based on the Company’s evaluation of anticipated merchandise returns.
|
(d):
|
Represents an increase in the required reserve based on the Company’s evaluation of deferred tax assets.
|
3.
|
Exhibits
|
|||||||||
Exhibit
|
Incorporated by Reference
|
|||||||||
Number
|
Exhibit Description
|
Form
|
File No.
|
Exhibit
|
Filing Date
|
3.1
|
Restated and Amended Charter of Lowe's Companies, Inc.
|
10-Q
|
001-07898
|
3.1
|
September 1, 2009
|
|||||
3.2
|
Bylaws of Lowe's Companies, Inc., as amended and restated.
|
8-K
|
001-07898
|
3.1
|
November 12, 2010
|
|||||
4.1
|
Indenture, dated as of April 15, 1992, between the Company and The Bank of New York, as successor trustee.
|
S-3
|
033-47269
|
4.1
|
April 16, 1992
|
|||||
4.2
|
Amended and Restated Indenture, dated as of December 1, 1995, between the Company and The Bank of New York, as successor trustee.
|
8-K
|
001-07898
|
4.1
|
December 15, 1995
|
|||||
4.3
|
Form of the Company's 6 7/8% Debenture due February 15, 2028.
|
8-K
|
001-07898
|
4.2
|
February 20, 1998
|
|||||
4.4
|
First Supplemental Indenture, dated as of February 23, 1999, to the Amended and Restated Indenture, dated as of December 1, 1995, between the Company and The Bank of New York, as successor trustee.
|
10-K
|
001-07898
|
10.13
|
April 19, 1999
|
|||||
4.5
|
Form of the Company's 6 1/2% Debenture due March 15, 2029.
|
10-K
|
001-07898
|
10.19
|
April 19, 1999
|
|||||
4.6
|
Third Supplemental Indenture, dated as of October 6, 2005, to the Amended and Restated Indenture, dated as of December 1, 1995, between the Company and The Bank of New York, as trustee, including as an exhibit thereto a form of the Company's 5.0% Notes maturing in October 2015 and the Company's 5.5% Notes maturing in October 2035.
|
10-K
|
001-07898
|
4.5
|
April 3, 2007
|
Exhibit
|
Incorporated by Reference
|
|||||||||
Number
|
Exhibit Description
|
Form
|
File No.
|
Exhibit
|
Filing Date
|
4.7
|
Fourth Supplemental Indenture, dated as of October 10, 2006, to the Amended and Restated Indenture, dated as of December 1, 1995, between the Company and The Bank of New York Trust Company, N.A., as trustee, including as an exhibit thereto a form of the Company's 5.4% Notes maturing in October 2016 and the Company's 5.8% Notes maturing in October 2036.
|
S-3 (POSASR)
|
333-137750
|
4.5
|
October 10, 2006
|
|||||
4.8
|
Fifth Supplemental Indenture, dated as of September 11, 2007, to the Amended and Restated Indenture, dated as of December 1, 1995, between the Company and The Bank of New York Trust Company, N.A., as trustee, including as an exhibit thereto a form of the Company's 5.6% Notes maturing in September 2012, the Company's 6.1% Notes maturing in September 2017, and the Company's 6.65% Notes maturing in September 2037.
|
8-K
|
001-07898
|
4.1
|
September 11, 2007
|
|||||
4.9
|
Sixth Supplemental Indenture, dated as of April 15, 2010, to the Amended and Restated Indenture, dated as of December 1, 1995, between the Company and The Bank of New York Mellon Trust Company, N.A., as trustee, including as an exhibit thereto a form of the Company's 4.625% Notes maturing in April 2020 and the Company's 5.8% Notes maturing in April 2040.
|
8-K
|
001-07898
|
4.1
|
April 15, 2010
|
|||||
4.10
|
Seventh Supplemental Indenture, dated as of November 22, 2010, to the Amended and Restated Indenture, dated as of December 1, 1995, between the Company and The Bank of New York Mellon Trust Company, N.A., as trustee, including as an exhibit thereto a form of the Company's 2.125% Notes maturing in April 2016 and the Company's 3.75% Notes maturing in April 2021.
|
8-K
|
001-07898
|
4.1
|
November 22, 2010
|
|||||
4.11
|
Amended and Restated Credit Agreement dated as of June 15, 2007.
|
10-Q
|
001-07898
|
4.1
|
August 31, 2010
|
Exhibit
|
Incorporated by Reference
|
|||||||||
Number
|
Exhibit Description
|
Form
|
File No.
|
Exhibit
|
Filing Date
|
10.1
|
Lowe's Companies, Inc. Directors' Deferred Compensation Plan, effective July 1, 1994.*
|
10-Q
|
001-07898
|
10.1
|
December 2, 2008
|
|||||
10.2
|
Amendment No. 1 to the Lowe's Companies, Inc. Directors' Deferred Compensation Plan, effective July 1, 1994.*
|
10-K
|
001-07898
|
10.21
|
March 30, 2010
|
|||||
10.3
|
Lowe's Companies Employee Stock Purchase Plan - Stock Options for Everyone, as amended and restated effective December 1, 2008.*
|
10-K
|
001-07898
|
10.10
|
March 31, 2009
|
|||||
10.4
|
Amendment No. 1 to the Lowe's Companies Employee Stock Purchase Plan - Stock Options for Everyone, as amended and restated effective December 1, 2008.*
|
10-Q
|
001-07898
|
10.1
|
June 2, 2010
|
|||||
10.5
|
Amendment No. 2 to the Lowe's Companies Employee Stock Purchase Plan - Stock Options for Everyone, as amended and restated effective December 1, 2008.*
|
10-Q
|
001-07898
|
10.3
|
December 1, 2010
|
|||||
10.6
|
Lowe's Companies, Inc. 1997 Incentive Plan.*
|
S-8
|
333-34631
|
4.2
|
August 29, 1997
|
|||||
10.7
|
Amendments to the Lowe's Companies, Inc. 1997 Incentive Plan dated January 25, 1998.*
|
10-K
|
001-07898
|
10.16
|
April 19, 1999
|
|||||
10.8
|
Amendments to the Lowe's Companies, Inc. 1997 Incentive Plan dated September 17, 1998 (also encompassing as Exhibit I thereto the Lowe's Companies, Inc. Deferred Compensation Program).*
|
10-K
|
001-07898
|
10.17
|
April 19, 1999
|
|||||
10.9
|
Lowe's Companies Benefit Restoration Plan, as amended and restated as of January 1, 2008.*
|
10-Q
|
001-07898
|
10.2
|
December 12, 2007
|
|||||
10.10
|
Amendment No. 1 to the Lowe’s Companies Benefit Restoration Plan, as amended and restated as of January 1, 2008.*‡
|
|||||||||
10.11
|
Amendment No. 2 to the Lowe's Companies Benefit Restoration Plan, as amended and restated as of January 1, 2008.*‡
|
Exhibit
|
Incorporated by Reference
|
|||||||||
Number
|
Exhibit Description
|
Form
|
File No.
|
Exhibit
|
Filing Date
|
10.12
|
Lowe's Companies, Inc. 2001 Incentive Plan.*
|
S-8
|
333-73408
|
4.4
|
November 15, 2001
|
|||||
10.13
|
Form of the Company's Management Continuity Agreement for Tier I Senior Officers.*
|
10-Q
|
001-07898
|
10.1
|
September 3, 2008
|
|||||
10.14
|
Form of the Company's Management Continuity Agreement for Tier II Senior Officers.*
|
10-Q
|
001-07898
|
10.2
|
September 3, 2008
|
|||||
10.15
|
Lowe's Companies Cash Deferral Plan.*
|
10-Q
|
001-07898
|
10.1
|
June 4, 2004
|
|||||
10.16
|
Amendment No. 1 to the Lowe's Companies Cash Deferral Plan.*
|
10-Q
|
001-07898
|
10.1
|
December 12, 2007
|
|||||
10.17
|
Amendment No. 2 to the Lowe's Companies Cash Deferral Plan.*
|
10-Q
|
001-07898
|
10.2
|
December 1, 2010
|
|||||
10.18
|
Lowe's Companies, Inc. Amended and Restated Directors' Stock Option and Deferred Stock Unit Plan.*
|
8-K
|
001-07898
|
10.1
|
June 3, 2005
|
|||||
10.19
|
Form of Lowe's Companies, Inc. Deferred Stock Unit Agreement for Directors.*
|
8-K
|
001-07898
|
10.2
|
June 3, 2005
|
|||||
10.20
|
Form of Lowe's Companies, Inc. Restricted Stock Award Agreement.*
|
10-Q
|
001-07898
|
10.1
|
September 1, 2005
|
|||||
10.21
|
Lowe's Companies, Inc. 2006 Annual Incentive Plan.*
|
10-Q
|
001-07898
|
10.1
|
September 7, 2006
|
|||||
10.22
|
Lowe's Companies, Inc. 2006 Long Term Incentive Plan.*
|
DEF 14A
|
001-07898
|
Appendix B
|
April 10, 2009
|
|||||
10.23
|
Amendment No. 1 to the Lowe’s Companies, Inc. 2006 Long Term Incentive Plan.*
|
10-K
|
001-07898
|
10.23
|
March 31, 2009
|
|||||
10.24
|
Form of Lowe’s Companies, Inc. 2006 Long Term Incentive Plan Non-Qualified Stock Option Agreement.* ‡
|
|||||||||
10.25
|
Amendment No. 1 to the Lowe’s Companies, Inc. Deferred Compensation Program.* ‡
|
|||||||||
Exhibit
|
Incorporated by Reference
|
|||||||||
Number
|
Exhibit Description
|
Form
|
File No.
|
Exhibit
|
Filing Date
|
10.26 | Amendment No. 2 to the Lowe's Companies, Inc. Deferred Compensation Program.* | 10-K | 001-07898 | 10.22 | March 31, 2009 | |||||
12.1 | Statement Re Computation of Ratio of Earnings to Fixed Charges. ‡ | |||||||||
13
|
Portions of the 2010 Lowe's Annual Report to Shareholders for the fiscal year ended January 28, 2011. ‡
|
|||||||||
21
|
List of Subsidiaries. ‡
|
|||||||||
23
|
Consent of Deloitte & Touche LLP. ‡
|
|||||||||
31.1
|
Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. ‡
|
|||||||||
31.2
|
Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. ‡
|
|||||||||
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.†
|
|||||||||
99.1
|
Amendment No. 7 to the Lowe’s 401(k) Plan, as amended and
restated effective as of February 3, 2007 (filed to include this
amendment as an exhibit to registration statement on Form S-
8, Registration No. 033-29772). ‡
|
|||||||||
101.INS
|
XBRL Instance Document.§
|
|||||||||
101.SCH
|
XBRL Taxonomy Extension Schema Document.§
|
|||||||||
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document.§
|
|||||||||
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document.§
|
|||||||||
Exhibit
|
Incorporated by Reference
|
|||||||||
Number
|
Exhibit Description
|
Form
|
File No.
|
Exhibit(s)
|
Filing Date
|
|||||
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document.§
|
|||||||||
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document.§
|
|||||||||
*
|
Management contract or compensatory plan or arrangement required to be filed as an exhibit to this form.
|
|||||||||
‡
|
Filed herewith.
|
|||||||||
†
|
Furnished herewith.
|
|||||||||
§
|
Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, except as expressly set forth by specific reference in such filing, are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.
|
LOWE’S COMPANIES, INC.
|
||
(Registrant)
|
||
March 28, 2011
|
By: /s/ Robert A. Niblock
|
|
Date
|
Robert A. Niblock
|
|
Chairman of the Board and Chief Executive Officer
|
||
March 28, 2011
|
By: /s/ Robert F. Hull, Jr.
|
|
Date
|
Robert F. Hull, Jr.
|
|
Executive Vice President and Chief Financial Officer
|
||
March 28, 2011
|
By: /s/ Matthew V. Hollifield
|
|
Date
|
Matthew V. Hollifield
|
|
Senior Vice President and Chief Accounting Officer
|
/s/ Robert A. Niblock
|
Chairman of the Board of Directors, Chief Executive Officer and Director
|
March 28, 2011
|
||
Robert A. Niblock
|
Date
|
|||
/s/ Raul Alvarez
|
Director
|
March 28, 2011
|
||
Raul Alvarez
|
Date
|
|||
/s/ David W. Bernauer
|
Director
|
March 28, 2011
|
||
David W. Bernauer
|
Date
|
|||
/s/ Leonard L. Berry
|
Director
|
March 28, 2011
|
||
Leonard L. Berry
|
Date
|
|||
/s/ Peter C. Browning
|
Director
|
March 28, 2011
|
||
Peter C. Browning
|
Date
|
|||
/s/ Dawn E. Hudson
|
Director
|
March 28, 2011
|
||
Dawn E. Hudson
|
Date
|
|||
/s/ Robert A. Ingram
|
Director
|
March 28, 2011
|
||
Robert A. Ingram
|
Date
|
|||
/s/ Robert L. Johnson
|
Director
|
March 28, 2011
|
||
Robert L. Johnson
|
Date
|
|||
/s/ Marshall O. Larsen
|
Director
|
March 28, 2011
|
||
Marshall O. Larsen
|
Date
|
|||
/s/ Richard K. Lochridge
|
Director
|
March 28, 2011
|
||
Richard K. Lochridge
|
Date
|
|||
/s/ Stephen F. Page
|
Director
|
March 28, 2011
|
||
Stephen F. Page
|
Date
|
|||
/s/ O. Temple Sloan, Jr.
|
Director
|
March 28, 2011
|
||
O. Temple Sloan, Jr.
|
Date
|
(c)
|
Company Contribution for Fiscal Year 2008 Bonuses
.
|
(1)
|
First Half Bonus
. The Company shall credit to the Account of each employee eligible to participate in the Plan for the Plan Year beginning January 1, 2008, a Company contribution in an amount equal to the Company Matching Contribution that would have been credited to such employee’s Account if the employee had deferred under the Plan, in accordance with Section 5, an amount equal to (A) 6% of any bonus earned by the employee during the first half of the fiscal year beginning February 2, 2008, minus (B) the amount of such bonus credited to the employee’s account under the 401(k) Plan as a Salary Deferral Contribution.
|
|
(2)
|
Second Half Bonus
. The Company shall credit to the Account of each employee eligible to participate in the Plan for the Plan Year beginning January 1, 2009, a Company contribution in an amount equal to (A) the Company Matching Contribution that would have been credited to such employee’s Account if the employee had deferred under the Plan, in accordance with Section 5, an amount equal to 6% of any bonus earned by the employee during the second half of the fiscal year beginning February 2, 2008, minus (B) the amount of such bonus credited to the employee’s account under the 401(k) Plan as a Salary Deferral Contribution.
|
|
(3)
|
Timing of Company Contribution
. Any Company contribution credited to a Participant’s Account in accordance with this Section 6(c) shall be credited on the date that the corresponding Company Match Contribution under the 401(k) Plan is (or would have been) allocated to the Participant’s account under the 401(k) Plan.
|
•
|
Executive Overview
|
•
|
Operations
|
•
|
Lowe’s Business Outlook
|
•
|
Financial Condition, Liquidity and Capital Resources
|
•
|
Off-Balance Sheet Arrangements
|
•
|
Contractual Obligations and Commercial Commitments
|
•
|
Critical Accounting Policies and Estimates
|
Basis Point Increase / (Decrease) in Percentage of Net Sales from Prior Year
|
Percentage Increase / (Decrease) in Dollar Amounts from Prior Year
|
|||||||
2010
|
2009
|
2010 vs. 2009
|
2010 vs. 2009
|
|||||
Net sales
|
100.00
|
%
|
100.00
|
%
|
N/A
|
3.4
|
%
|
|
Gross margin
|
35.14
|
34.86
|
28
|
4.2
|
||||
Expenses:
|
||||||||
Selling, general and administrative
|
24.60
|
24.85
|
(25)
|
2.3
|
||||
Depreciation
|
3.25
|
3.42
|
(17)
|
(1.7)
|
||||
Interest - net
|
0.68
|
0.61
|
7
|
15.7
|
||||
Total expenses
|
28.53
|
28.88
|
(35)
|
2.1
|
||||
Pre-tax earnings
|
6.61
|
5.98
|
63
|
14.2
|
||||
Income tax provision
|
2.49
|
2.20
|
29
|
16.9
|
||||
Net earnings
|
4.12
|
%
|
3.78
|
%
|
34
|
12.7
|
%
|
|
EBIT margin
1
|
7.29
|
%
|
6.59
|
%
|
70
|
14.4
|
%
|
|
Basis Point Increase / (Decrease) in Percentage of Net Sales from Prior Year
|
Percentage Increase / (Decrease) in Dollar Amounts from Prior Year
|
|||||||
2009
|
2008
|
2009 vs. 2008
|
2009 vs. 2008
|
|||||
Net sales
|
100.00
|
%
|
100.00
|
%
|
N/A
|
(2.1)
|
%
|
|
Gross margin
|
34.86
|
34.21
|
65
|
(0.2)
|
||||
Expenses:
|
||||||||
Selling, general and administrative
|
24.85
|
23.17
|
168
|
5.0
|
||||
Depreciation
|
3.42
|
3.19
|
23
|
4.9
|
||||
Interest - net
|
0.61
|
0.58
|
3
|
2.4
|
||||
Total expenses
|
28.88
|
26.94
|
194
|
4.9
|
||||
Pre-tax earnings
|
5.98
|
7.27
|
(129)
|
(19.4)
|
||||
Income tax provision
|
2.20
|
2.72
|
(52)
|
(20.5)
|
||||
Net earnings
|
3.78
|
%
|
4.55
|
%
|
(77)
|
(18.8)
|
%
|
|
EBIT margin
1
|
6.59
|
%
|
7.85
|
%
|
(126)
|
(17.8)
|
%
|
|
||||||
Other Metrics
|
2010
|
2009
|
2008
|
|||
Comparable store sales increase (decrease)
2
|
1.3
|
% |
(6.7
|
)% |
(7.2
|
)% |
Total customer transactions (in millions)
|
786
|
766
|
740
|
|||
Average ticket
3
|
$ 62.07
|
$ 61.66
|
$ 65.15
|
|||
At end of year:
|
||||||
Number of stores
|
1,749
|
1,710
|
1,649
|
|||
Sales floor square feet (in millions)
|
197
|
193
|
187
|
|||
Average store size selling square feet (in thousands)
4
|
113
|
113
|
113
|
|||
Return on average assets
5
|
5.8
|
% |
5.3
|
% |
6.8
|
% |
Return on average shareholders' equity
6
|
10.7
|
% |
9.5
|
% |
12.7
|
% |
(In millions)
|
2010
|
2009
|
||||||
Interest expense, net of amount capitalized
|
$ | 340 | $ | 300 | ||||
Amortization of original issue discount and loan costs
|
4 | 4 | ||||||
Interest income
|
(12 | ) | (17 | ) | ||||
Interest - net
|
$ | 332 | $ | 287 |
(In millions)
|
2009
|
2008
|
||||||
Interest expense, net of amount capitalized
|
$ | 300 | $ | 314 | ||||
Amortization of original issue discount and loan costs
|
4 | 6 | ||||||
Interest income
|
(17 | ) | (40 | ) | ||||
Interest - net
|
$ | 287 | $ | 280 |
Debt Ratings
|
S&P
|
Moody’s
|
|
Commercial Paper
|
A1
|
P1
|
|
Senior Debt
|
A
|
A1
|
|
Outlook
|
Stable
|
Stable
|
January 28, 2011
|
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)
|
$
|
11,517
|
$
|
332 |
$
|
1,190
|
$
|
1,115
|
$
|
8,880
|
|
Capitalized lease obligations
1
|
626
|
68
|
138
|
118
|
302
|
||||||
Operating leases
1
|
6,008
|
418
|
826
|
791
|
3,973
|
||||||
Purchase obligations
2
|
633
|
386
|
236
|
10
|
1
|
||||||
Total contractual obligations
|
$
|
18,784
|
$
|
1,204
|
$
|
2,390
|
$
|
2,034
|
$
|
13,156
|
|
Amount of Commitment Expiration by Period
|
|||||||||||
Commercial Commitments
|
Less Than
|
1-3
|
4-5
|
After 5
|
|||||||
(In millions)
|
Total
|
1 Year
|
Years
|
Years
|
Years
|
||||||
Letters of credit
3
|
$
|
19
|
$
|
18
|
$
|
1
|
$
|
-
|
$
|
-
|
(In millions)
|
January 28, 2011
|
January 29, 2010
|
||||
Self-insurance liabilities
|
$
|
311
|
$
|
300
|
||
Accrued dividends
|
148
|
131
|
||||
Accrued interest
|
115
|
102
|
||||
Accrued property taxes
|
113
|
103
|
||||
Sales tax liabilities
|
112
|
131
|
||||
Other
|
559
|
489
|
||||
Total
|
$
|
1,358
|
$
|
1,256
|
(In millions)
|
2010
|
2009
|
||||
Deferred revenue - extended protection plans, beginning of year
|
$
|
549
|
$
|
479
|
||
Additions to deferred revenue
|
253
|
220
|
||||
Deferred revenue recognized
|
(171)
|
(150)
|
||||
Deferred revenue - extended protection plans, end of year
|
$
|
631
|
$
|
549
|
(In millions)
|
2010
|
2009
|
||||
Liability for extended protection plan claims, beginning of year
|
$
|
23
|
$
|
17
|
||
Accrual for claims incurred
|
80
|
67
|
||||
Claim payments
|
(83)
|
(61)
|
||||
Liability for extended protection plan claims, end of year
|
$
|
20
|
$
|
23
|
Cost of Sales
|
Selling, General and Administrative
|
|
§
Total cost of products sold, including:
-
Purchase costs, net of vendor funds;
-
Freight expenses associated with moving merchandise
inventories from vendors to retail stores;
-
Costs associated with operating the Company’s distribution
network, including payroll
and benefit costs and occupancy
costs;
§
Costs of installation services provided;
§
Costs associated with delivery of products directly from vendors to
customers by third parties;
§
Costs associated with inventory shrinkage and obsolescence.
|
§
Payroll and benefit costs for retail and corporate employees;
§
Occupancy costs of retail and corporate facilities;
§
Advertising;
§
Costs associated with delivery of products from stores to customers;
§
Third-party, in-store service costs;
§
Tender costs, including bank charges, costs associated with credit
card interchange fees and amounts associated with accepting the
Company’s
proprietary credit cards;
§
Costs associated with self-insured plans, and premium costs for stop-
loss coverage and fully insured
plans;
§
Long-lived asset impairment losses and gains/losses on disposal of
assets;
§
Other administrative costs, such as supplies, and travel and
entertainment.
|
·
|
Level 1
-
inputs to the valuation techniques that are quoted prices in active markets for identical assets or liabilities
|
·
|
Level 2
-
inputs to the valuation techniques that are other than quoted prices but are observable for the assets or liabilities, either directly or indirectly
|
·
|
Level 3
-
inputs to the valuation techniques that are unobservable for the assets or liabilities
|
Fair Value Measurements at Reporting Date Using
|
||||||||||||
Quoted Prices in Active Markets for
Identical Assets
|
Significant Other Observable Inputs
|
Significant Unobservable Inputs
|
||||||||||
(In millions)
|
January 28, 2011
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
||||||||
Available-for-sale securities:
|
||||||||||||
Municipal obligations
|
$ | 190 | $ | - | $ | 190 | $ | - | ||||
Municipal floating rate obligations
|
163 | - | 163 | - | ||||||||
Money market funds
|
66 | 66 | - | - | ||||||||
Other
|
2 | 2 | - | - | ||||||||
Trading securities:
|
||||||||||||
Mutual funds
|
50 | 50 | - | - | ||||||||
Total short-term investments
|
$ | 471 | $ | 118 | $ | 353 | $ | - | ||||
Available-for-sale securities:
|
||||||||||||
Municipal floating rate obligations
|
$ | 765 | $ | - | $ | 765 | $ | - | ||||
Municipal obligations
|
208 | - | 208 | - | ||||||||
Other
|
35 | - | 35 | - | ||||||||
Total long-term investments
|
$ | 1,008 | $ | - | $ | 1,008 | $ | - |
Fair Value Measurements at Reporting Date Using
|
||||||||||||
Quoted Prices in Active Markets for Identical Assets
|
Significant Other Observable Inputs
|
Significant Unobservable Inputs
|
||||||||||
(In millions)
|
January 29, 2010
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
||||||||
Available-for-sale securities:
|
||||||||||||
Municipal obligations
|
$ | 296 | $ | - | $ | 296 | $ | - | ||||
Municipal floating rate obligations
|
7 | - | 7 | - | ||||||||
Money market funds
|
68 | 68 | - | - | ||||||||
Other
|
12 | 2 | 10 | - | ||||||||
Trading securities:
|
||||||||||||
Mutual funds
|
42 | 42 | - | - | ||||||||
Total short-term investments
|
$ | 425 | $ | 112 | $ | 313 | $ | - | ||||
Available-for-sale securities:
|
||||||||||||
Municipal floating rate obligations
|
$ | 141 | $ | - | $ | 141 | $ | - | ||||
Municipal obligations
|
136 | - | 136 | - | ||||||||
Total long-term investments
|
$ | 277 | $ | - | $ | 277 | $ | - |
Fair Value Measurements - Non-Recurring Basis
|
|||||||||
|
|||||||||
|
January 28, 2011
|
||||||||
(In millions)
|
Fair Value
Measurements
|
Previous
Carrying
Amounts
|
Impairment
Losses
|
||||||
Operating stores:
|
|||||||||
Long-lived assets held-for-use
|
$
|
15
|
$
|
51
|
$
|
(36
|
) | ||
Excess properties:
|
|||||||||
Long-lived assets held-for-use
|
$
|
45
|
$
|
71
|
$
|
(26
|
) | ||
Long-lived assets held-for-sale
|
$
|
36
|
$
|
44
|
$
|
(8
|
) |
|
January 29, 2010
|
||||||||
(In millions)
|
Fair Value
Measurements
|
Previous
Carrying
Amounts
|
Impairment
Losses
|
||||||
Operating stores:
|
|||||||||
Long-lived assets held-for-use
|
$
|
6
|
$
|
59
|
$
|
(53
|
) | ||
Excess properties:
|
|||||||||
Long-lived assets held-for-use
|
$
|
74
|
$
|
114
|
$
|
(40
|
) | ||
Long-lived assets held-for-sale
|
$
|
25
|
$
|
46
|
$
|
(21
|
) |
January 28, 2011
|
January 29, 2010
|
||||||||||||
Carrying
|
Fair
|
Carrying
|
Fair
|
||||||||||
(In millions)
|
Amount
|
Value
|
Amount
|
Value
|
|||||||||
Long-term debt (excluding capitalized lease obligations)
|
$
|
6,209
|
$
|
6,715
|
$
|
4,737
|
$
|
5,127
|
January 28, 2011
|
|||||||||||||
Type
|
Amortized
|
Gross Unrealized
|
Gross Unrealized
|
Fair
|
|||||||||
(In millions)
|
Costs
|
Gains
|
Losses
|
Values
|
|||||||||
Municipal obligations
|
$ | 189 | $ | 1 | $ | - | $ | 190 | |||||
Municipal floating rate obligations
|
163 | - | - | 163 | |||||||||
Money market funds
|
66 | - | - | 66 | |||||||||
Other
|
2 | - | - | 2 | |||||||||
Classified as short-term
|
420 | 1 | - | 421 | |||||||||
Municipal floating rate obligations
|
765 | - | - | 765 | |||||||||
Municipal obligations
|
209 | - | (1 | ) | 208 | ||||||||
Other
|
35 | - | - | 35 | |||||||||
Classified as long-term
|
1,009 | - | (1 | ) | 1,008 | ||||||||
Total
|
$ | 1,429 | $ | 1 | $ | (1 | ) | $ | 1,429 | ||||
January 29, 2010
|
|||||||||||||
Type
|
Amortized
|
Gross Unrealized
|
Gross Unrealized
|
Fair
|
|||||||||
(In millions)
|
Costs
|
Gains
|
Losses
|
Values
|
|||||||||
Municipal obligations
|
$ | 294 | $ | 2 | $ | - | $ | 296 | |||||
Municipal floating rate obligations
|
7 | - | - | 7 | |||||||||
Money market funds
|
68 | - | - | 68 | |||||||||
Other
|
12 | - | - | 12 | |||||||||
Classified as short-term
|
381 | 2 | - | 383 | |||||||||
Municipal floating rate obligations
|
141 | - | - | 141 | |||||||||
Municipal obligations
|
134 | 2 | - | 136 | |||||||||
Classified as long-term
|
275 | 2 | - | 277 | |||||||||
Total
|
$ | 656 | $ | 4 | $ | - | $ | 660 |
NOTE 4: Property and Accumulated Depreciation
|
||||||||
Property is summarized by major class in the following table:
|
||||||||
Estimated
|
||||||||
Depreciable
|
January 28, 2011
|
January 29, 2010
|
||||||
(In millions)
|
Lives, In Years
|
|||||||
Cost:
|
||||||||
Land
|
N/A | $ | 6,742 | $ | 6,519 | |||
Buildings and building improvements
|
5-40 | 16,531 | 15,887 | |||||
Equipment
|
3-15 | 9,142 | 8,826 | |||||
Construction in progress
|
N/A | 930 | 1,036 | |||||
Total cost
|
33,345 | 32,268 | ||||||
Accumulated depreciation
|
(11,256 | ) | (9,769 | ) | ||||
Property, less accumulated depreciation
|
$ | 22,089 | $ | 22,499 |
Debt Category
(In millions)
|
Weighted-Average Interest Rate at January 28, 2011
|
January 28, 2011
|
January 29, 2010
|
|||||
Secured debt:
1
|
||||||||
Mortgage notes due fiscal 2010-2018
|
6.11% | $ | 17 | $ | 35 | |||
Unsecured debt:
|
||||||||
Notes due fiscal 2010-2015
|
5.31% | 1,047 | 1,546 | |||||
Notes due fiscal 2016-2020
|
4.40% | 1,767 | 796 | |||||
Notes due fiscal 2021-2025
|
3.87% | 537 | 15 | |||||
Notes due fiscal 2026-2030
|
6.76% | 812 | 812 | |||||
Notes due fiscal 2031-2035
|
5.50% | 493 | 493 | |||||
Notes due fiscal 2036-2040
2
|
6.16% | 1,536 | 1,040 | |||||
Capitalized lease obligations due fiscal 2011 to 2035
|
364 | 343 | ||||||
Total long-term debt
|
6,573 | 5,080 | ||||||
Less current maturities
|
(36 | ) | (552 | ) | ||||
Long-term debt, excluding current maturities
|
$ | 6,537 | $ | 4,528 |
1
Real properties with an aggregate book value of $52 million were pledged as collateral at January 28, 2011, for secured debt.
|
2
Amount includes $100 million of notes issued in 1997 that may be put at the option of the holder on the 20
th
anniversary of the issue at par value. None of these notes are currently puttable.
|
2010
|
2009
|
2008
|
|
Assumptions used:
|
|||
Expected volatility
|
37.7%-41.4%
|
36.4%-38.6%
|
25.0%-32.2%
|
Weighted-average expected volatility
|
39.4%
|
36.4%
|
25.1%
|
Expected dividend yield
|
0.96%-1.30%
|
0.82%-0.97%
|
0.56%-0.74%
|
Weighted-average dividend yield
|
1.07%
|
0.82%
|
0.56%
|
Risk-free interest rate
|
1.22%-2.30%
|
1.70%-2.08%
|
2.19%-3.09%
|
Weighted-average risk-free interest rate
|
2.02%
|
1.71%
|
2.19%
|
Expected term, in years
|
4-5
|
4
|
4
|
Weighted-average expected term, in years
|
4.42
|
4
|
4
|
Weighted-
|
||||||||||
Weighted-
|
Average
|
|||||||||
Average
|
Remaining
|
Aggregate
|
||||||||
Shares
|
Exercise Price
|
Term
|
Intrinsic Value
|
|||||||
(In thousands)
|
Per Share
|
(In years)
|
(In thousands)
1
|
|||||||
Outstanding at January 29, 2010
|
23,170 | $ | 26.42 | |||||||
Granted
|
3,208 | 23.96 | ||||||||
Canceled, forfeited or expired
|
(883 | ) | 26.74 | |||||||
Exercised
|
(1,386 | ) | 19.31 | |||||||
Outstanding at January 28, 2011
|
24,109 | $ | 26.48 | 3.06 | $ | 49,035 | ||||
Vested and expected to vest at
|
||||||||||
January 28, 2011
2
|
23,473 | $ | 26.56 | 2.98 | $ | 48,083 | ||||
Exercisable at January 28, 2011
|
16,750 | $ | 29.13 | 2.04 | $ | 13,851 |
1
|
Options for which the exercise price exceeded the closing market price of a share of the Company’s common stock at January 28, 2011 are excluded from the calculation of aggregate intrinsic value.
|
2
|
Includes outstanding vested options as well as outstanding, nonvested options after a forfeiture rate is applied.
|
Weighted-Average Grant- | |||||
Shares
|
Date Fair Value
|
||||
(In thousands) |
Per Share
|
||||
Nonvested at January 29, 2010
|
1,073
|
$ |
32.91
|
||
Vested
|
(311
|
) |
30.00
|
||
Canceled or forfeited
|
(29
|
) |
33.59
|
||
Nonvested at January 28, 2011
|
733
|
$ |
34.11
|
Weighted-Average Grant- | |||||
Shares
|
Date Fair Value
|
||||
(In thousands) |
Per Share
|
||||
Nonvested at January 29, 2010
|
1,484
|
$ |
27.30
|
||
Vested
|
(151
|
) |
32.18
|
||
Canceled or forfeited
|
(475
|
) |
31.77
|
||
Nonvested at January 28, 2011
|
858
|
$ |
23.97
|
Weighted-Average Grant- | |||||
Shares
|
Date Fair Value
|
||||
(In thousands) |
Per Share
|
||||
Nonvested at January 29, 2010
|
8,457
|
$ |
20.86
|
||
Granted | 3,458 |
23.88
|
|||
Vested
|
(1,554
|
) |
30.23
|
||
Canceled or forfeited
|
(506
|
) |
20.45
|
||
Nonvested at January 28, 2011
|
9,855
|
$ |
20.46
|
Weighted-Average Grant- | |||||
Shares
|
Date Fair Value
|
||||
(In thousands) |
Per Share
|
||||
Nonvested at January 29, 2010
|
92
|
$ |
18.35
|
||
Granted | 99 |
22.84
|
|||
Vested
|
(11
|
) |
22.72
|
||
Canceled or forfeited
|
(12
|
) |
20.16
|
||
Nonvested at January 28, 2011
|
168
|
$ |
20.58
|
2010
|
2009
|
2008
|
|||||||
Statutory federal income tax rate
|
35.0 | % | 35.0 | % | 35.0 | % | |||
State income taxes, net of federal tax benefit
|
3.0 | 2.2 | 2.9 | ||||||
Other, net
|
(0.3 | ) | (0.3 | ) | (0.5 | ) | |||
Effective tax rate
|
37.7 | % | 36.9 | % | 37.4 | % |
(In millions)
|
2010
|
2009
|
2008
|
||||||
Unrecognized tax benefits, beginning of year
|
$ | 154 | $ | 200 | $ | 138 | |||
Additions for tax positions of prior years
|
22 | 31 | 82 | ||||||
Reductions for tax positions of prior years
|
(19 | ) | (45 | ) | (16 | ) | |||
Net additions based on tax positions related to the current year
|
9 | 5 | 16 | ||||||
Settlements
|
(1 | ) | (37 | ) | (19 | ) | |||
Reductions due to a lapse in applicable statute of limitations
|
- | - | (1 | ) | |||||
Unrecognized tax benefits, end of year
|
$ | 165 | $ | 154 | $ | 200 |
(In millions, except per share data)
|
2010
|
2009
|
2008
|
||||||
Basic earnings per common share:
|
|||||||||
Net earnings
|
$ | 2,010 | $ | 1,783 | $ | 2,195 | |||
Less: Net earnings allocable to participating securities
|
(17 | ) | (13 | ) | (11 | ) | |||
Net earnings allocable to common shares
|
$ | 1,993 | $ | 1,770 | $ | 2,184 | |||
Weighted-average common shares outstanding
|
1,401 | 1,462 | 1,457 | ||||||
Basic earnings per common share
|
$ | 1.42 | $ | 1.21 | $ | 1.50 | |||
Diluted earnings per common share:
|
|||||||||
Net earnings
|
$ | 2,010 | $ | 1,783 | $ | 2,195 | |||
Less: Net earnings adjustment for interest on convertible notes, net of tax
|
- | - | 2 | ||||||
Net earnings, as adjusted
|
2,010 | 1,783 | 2,197 | ||||||
Less: Net earnings allocable to participating securities
|
(17 | ) | (13 | ) | (11 | ) | |||
Net earnings allocable to common shares
|
$ | 1,993 | $ | 1,770 | $ | 2,186 | |||
Weighted-average common shares outstanding
|
1,401 | 1,462 | 1,457 | ||||||
Dilutive effect of non-participating share-based awards
|
2 | 2 | 3 | ||||||
Dilutive effect of convertible notes
|
- | - | 8 | ||||||
Weighted-average common shares, as adjusted
|
1,403 | 1,464 | 1,468 | ||||||
Diluted earnings per common share
|
$ | 1.42 | $ | 1.21 | $ | 1.49 |
Capitalized
|
|||||||||
(In millions)
|
Operating
|
Lease
|
|||||||
Fiscal Year
|
Leases
|
Obligations
|
Total
|
||||||
2011
|
$ | 418 | $ | 68 | $ | 486 | |||
2012
|
416 | 69 | 485 | ||||||
2013
|
410 | 69 | 479 | ||||||
2014
|
399 | 64 | 463 | ||||||
2015
|
392 | 54 | 446 | ||||||
Later years
|
3,973 | 302 | 4,275 | ||||||
Total minimum lease payments
|
$ | 6,008 | $ | 626 | $ | 6,634 | |||
Less amount representing interest
|
(273 | ) | |||||||
Present value of minimum lease payments
|
353 | ||||||||
Less current maturities
|
(35 | ) | |||||||
Present value of minimum lease payments, less current maturities
|
$ | 318 |
(In millions)
|
2010
|
2009
|
2008
|
||||||
Long-term debt
|
$ | 312 | $ | 293 | $ | 292 | |||
Short-term borrowings
|
- | 2 | 11 | ||||||
Capitalized lease obligations
|
35 | 32 | 31 | ||||||
Interest income
|
(12 | ) | (17 | ) | (40 | ) | |||
Interest capitalized
|
(14 | ) | (19 | ) | (36 | ) | |||
Interest on tax uncertainties
|
7 | (9 | ) | 10 | |||||
Other
|
4 | 5 | 12 | ||||||
Interest - net
|
$ | 332 | $ | 287 | $ | 280 |
Sales by Product Category:
|
|||||||||||||||||
(Dollars in millions)
|
2010
|
2009
|
2008
|
||||||||||||||
Product Category
|
Total Sales
|
%
|
Total Sales
|
%
|
Total Sales
|
%
|
|||||||||||
Appliances
|
$ | 5,365 | 11 | % | $ | 4,904 | 10 | % | $ | 4,752 | 10 | % | |||||
Lumber
|
3,402 | 7 | 3,242 | 7 | 3,506 | 7 | |||||||||||
Paint
|
3,003 | 6 | 2,913 | 6 | 2,791 | 6 | |||||||||||
Millwork
|
2,884 | 6 | 2,786 | 6 | 2,965 | 6 | |||||||||||
Building materials
|
2,879 | 6 | 2,924 | 6 | 2,966 | 6 | |||||||||||
Lawn & landscape products
|
2,812 | 6 | 2,690 | 6 | 2,585 | 5 | |||||||||||
Flooring
|
2,779 | 6 | 2,765 | 6 | 2,879 | 6 | |||||||||||
Rough plumbing
|
2,709 | 6 | 2,659 | 6 | 2,618 | 6 | |||||||||||
Seasonal living
|
2,654 | 5 | 2,413 | 5 | 2,449 | 5 | |||||||||||
Tools
|
2,604 | 5 | 2,439 | 5 | 2,563 | 5 | |||||||||||
Hardware
|
2,526 | 5 | 2,497 | 5 | 2,516 | 5 | |||||||||||
Fashion plumbing
|
2,433 | 5 | 2,475 | 5 | 2,573 | 5 | |||||||||||
Lighting
|
2,396 | 5 | 2,407 | 5 | 2,508 | 5 | |||||||||||
Nursery
|
1,962 | 4 | 1,942 | 4 | 1,850 | 4 | |||||||||||
Outdoor power equipment
|
1,932 | 4 | 1,834 | 4 | 1,963 | 4 | |||||||||||
Cabinets & countertops
|
1,700 | 3 | 1,715 | 4 | 1,935 | 4 | |||||||||||
Home organization
|
1,695 | 3 | 1,662 | 3 | 1,662 | 4 | |||||||||||
Rough electrical
|
1,409 | 3 | 1,316 | 3 | 1,446 | 3 | |||||||||||
Home fashion
|
1,337 | 3 | 1,309 | 3 | 1,408 | 3 | |||||||||||
Other
|
334 | 1 | 328 | 1 | 295 | 1 | |||||||||||
Totals
|
$ | 48,815 | 100 | % | $ | 47,220 | 100 | % | $ | 48,230 | 100 | % |
|
|||||||||||||||
Selected Financial Data (Unaudited)
|
|||||||||||||||
Selected Statement of Earnings Data
|
|||||||||||||||
(In millions, except per share data)
|
2010
|
2009
|
2008
|
2007
|
2006
|
||||||||||
Net sales
|
$ | 48,815 | $ | 47,220 | $ | 48,230 | $ | 48,283 | $ | 46,927 | |||||
Gross margin
|
17,152 | 16,463 | 16,501 | 16,727 | 16,198 | ||||||||||
Net earnings
|
2,010 | 1,783 | 2,195 | 2,809 | 3,105 | ||||||||||
Basic earnings per common share
|
1.42 | 1.21 | 1.50 | 1.89 | 2.02 | ||||||||||
Diluted earnings per common share
|
1.42 | 1.21 | 1.49 | 1.86 | 1.98 | ||||||||||
Dividends per share
|
$ | 0.420 | $ | 0.355 | $ | 0.335 | $ | 0.290 | $ | 0.180 | |||||
Selected Balance Sheet Data
|
|||||||||||||||
Total assets
|
$ | 33,699 | $ | 33,005 | $ | 32,625 | $ | 30,816 | $ | 27,726 | |||||
Long-term debt, excluding current maturities
|
$ | 6,537 | $ | 4,528 | $ | 5,039 | $ | 5,576 | $ | 4,325 | |||||
Selected Quarterly Data
|
|||||||||||||||
(In millions, except per share data)
|
First
|
Second
|
Third
|
Fourth
|
|||||||||||
2010
|
|||||||||||||||
Net sales
|
$ | 12,388 | $ | 14,361 | $ | 11,587 | $ | 10,480 | |||||||
Gross margin
|
4,358 | 5,006 | 4,061 | 3,726 | |||||||||||
Net earnings
|
489 | 832 | 404 | 285 | |||||||||||
Basic earnings per common share
|
0.34 | 0.58 | 0.29 | 0.21 | |||||||||||
Diluted earnings per common share
|
$ | 0.34 | $ | 0.58 | $ | 0.29 | $ | 0.21 | |||||||
First
|
Second
|
Third
|
Fourth
|
||||||||||||
2009
|
|||||||||||||||
Net sales
|
$ | 11,832 | $ | 13,844 | $ | 11,375 | $ | 10,168 | |||||||
Gross margin
|
4,196 | 4,823 | 3,890 | 3,554 | |||||||||||
Net earnings
|
476 | 759 | 344 | 205 | |||||||||||
Basic earnings per common share
|
0.32 | 0.51 | 0.23 | 0.14 | |||||||||||
Diluted earnings per common share
|
$ | 0.32 | $ | 0.51 | $ | 0.23 | $ | 0.14 |
Fiscal 2010
|
Fiscal 2009
|
Fiscal 2008
|
||||||||||||||||||||||||||||||||||
High
|
Low
|
Dividend*
|
High
|
Low
|
Dividend*
|
High
|
Low
|
Dividend
|
||||||||||||||||||||||||||||
1st Quarter
|
$ | 28.54 | $ | 21.29 | $ | 0.090 | $ | 22.09 | $ | 13.00 | $ | 0.085 | $ | 27.18 | $ | 20.25 | $ | 0.080 | ||||||||||||||||||
2nd Quarter
|
27.93 | 19.64 | 0.110 | 22.68 | 18.02 | 0.090 | 26.18 | 18.00 | 0.085 | |||||||||||||||||||||||||||
3rd Quarter
|
22.91 | 19.35 | 0.110 | 24.09 | 19.46 | 0.090 | 28.49 | 15.76 | 0.085 | |||||||||||||||||||||||||||
4th Quarter
|
$ | 26.29 | $ | 21.09 | $ | 0.110 | $ | 24.50 | $ | 19.15 | $ | 0.090 | $ | 23.73 | $ | 15.85 | $ | 0.085 | ||||||||||||||||||
As of March 25, 2011, there were 29,962 registered shareholders of Lowe's common stock.
|
|
* | Effective the fourth quarter of 2009 the dividend will be paid in the fiscal month following the record date. |
Exhibit 21
|
|||
LOWE’S COMPANIES, INC. AND SUBSIDIARY COMPANIES
|
|||
NAME AND DOING BUSINESS AS:
|
STATE OF INCORPORATION
|
||
Lowe's Home Centers, Inc.
|
North Carolina
|
||
Lowe's HIW, Inc.
|
Washington
|
||
All other subsidiaries were omitted pursuant to Item 601 (21)(ii) of Regulation S-K under the Securities and Exchange Act of 1934, as amended.
|
|||
Description
|
Registration
Statement Number
|
|
Form S-3
|
||
Lowe’s Stock Advantage Direct Stock Purchase Plan
|
333-155748
|
|
Debt Securities, Preferred Stock, Common Stock
|
333-161697
|
|
Form S-8
|
||
Lowe’s 401(k) Plan
|
33-29772
|
|
Lowe’s Companies, Inc. 1994 Incentive Plan
|
33-54499
|
|
Lowe’s Companies, Inc. 1997 Incentive Plan
|
333-34631
|
|
Lowe’s Companies, Inc. Directors’ Stock Option Plan
|
333-89471
|
|
Lowe’s Companies, Inc. 2001 Incentive Plan
|
333-73408
|
|
Lowe’s Companies Benefit Restoration Plan
|
333-97811
|
|
Lowe’s Companies Cash Deferral Plan
|
333-114435
|
|
Lowe’s Companies, Inc. 2006 Long-Term Incentive Plan
|
333-138031
|
|
Lowe’s Companies Employee Stock Purchase Plan – Stock Options for Everyone
|
333-143266
|
|
(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.
|
March 28, 2011
|
/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.
|
March 28, 2011
|
/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.
|