ý
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
Commission File Number
|
1-7898
|
|
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
|
Large accelerated filer
ý
|
Accelerated filer
o
|
Non-accelerated filer
o
|
Smaller reporting company
o
|
CLASS
|
|
OUTSTANDING AT
|
November 29, 2013
|
Common Stock, $.50 par value
|
|
1,045,828,749
|
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
||||||
|
|
|
November 1, 2013
|
|
November 2, 2012
|
|
February 1, 2013
|
||||||
Assets
|
|
|
|
|
|
|
|
||||||
Current assets:
|
|
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
|
|
$
|
1,101
|
|
|
$
|
1,091
|
|
|
$
|
541
|
|
Short-term investments
|
|
|
115
|
|
|
209
|
|
|
125
|
|
|||
Merchandise inventory - net
|
|
|
9,593
|
|
|
8,995
|
|
|
8,600
|
|
|||
Deferred income taxes - net
|
|
|
220
|
|
|
235
|
|
|
217
|
|
|||
Other current assets
|
|
|
336
|
|
|
300
|
|
|
301
|
|
|||
Total current assets
|
|
|
11,365
|
|
|
10,830
|
|
|
9,784
|
|
|||
Property, less accumulated depreciation
|
|
|
20,973
|
|
|
21,591
|
|
|
21,477
|
|
|||
Long-term investments
|
|
|
439
|
|
|
350
|
|
|
271
|
|
|||
Other assets
|
|
|
1,300
|
|
|
1,182
|
|
|
1,134
|
|
|||
Total assets
|
|
|
$
|
34,077
|
|
|
$
|
33,953
|
|
|
$
|
32,666
|
|
Liabilities and shareholders' equity
|
|
|
|
|
|
|
|
|
|
|
|||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|||
Current maturities of long-term debt
|
|
|
$
|
51
|
|
|
$
|
45
|
|
|
$
|
47
|
|
Accounts payable
|
|
|
5,776
|
|
|
5,416
|
|
|
4,657
|
|
|||
Accrued compensation and employee benefits
|
|
|
705
|
|
|
581
|
|
|
670
|
|
|||
Deferred revenue
|
|
|
944
|
|
|
788
|
|
|
824
|
|
|||
Other current liabilities
|
|
|
1,927
|
|
|
1,784
|
|
|
1,510
|
|
|||
Total current liabilities
|
|
|
9,403
|
|
|
8,614
|
|
|
7,708
|
|
|||
Long-term debt, excluding current maturities
|
|
|
10,090
|
|
|
9,004
|
|
|
9,030
|
|
|||
Deferred income taxes - net
|
|
|
322
|
|
|
486
|
|
|
455
|
|
|||
Deferred revenue - extended protection plans
|
|
|
730
|
|
|
720
|
|
|
715
|
|
|||
Other liabilities
|
|
|
881
|
|
|
904
|
|
|
901
|
|
|||
Total liabilities
|
|
|
21,426
|
|
|
19,728
|
|
|
18,809
|
|
|||
Shareholders' equity:
|
|
|
|
|
|
|
|
|
|
|
|||
Preferred stock - $5 par value, none issued
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Common stock - $.50 par value;
|
|
|
|
|
|
|
|
|
|
|
|||
Shares issued and outstanding
|
|
|
|
|
|
|
|
|
|
|
|||
November 1, 2013
|
1,050
|
|
|
|
|
|
|
|
|
|
|||
November 2, 2012
|
1,123
|
|
|
|
|
|
|
|
|
|
|||
February 1, 2013
|
1,110
|
|
525
|
|
|
561
|
|
|
555
|
|
|||
Capital in excess of par value
|
|
|
—
|
|
|
9
|
|
|
26
|
|
|||
Retained earnings
|
|
|
12,103
|
|
|
13,602
|
|
|
13,224
|
|
|||
Accumulated other comprehensive income
|
|
|
23
|
|
|
53
|
|
|
52
|
|
|||
Total shareholders' equity
|
|
|
12,651
|
|
|
14,225
|
|
|
13,857
|
|
|||
Total liabilities and shareholders' equity
|
|
|
$
|
34,077
|
|
|
$
|
33,953
|
|
|
$
|
32,666
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||||||||||
|
November 1, 2013
|
|
November 2, 2012
|
|
November 1, 2013
|
|
November 2, 2012
|
||||||||||||||||
Current Earnings
|
Amount
|
|
Percent
|
|
Amount
|
|
Percent
|
|
Amount
|
|
Percent
|
|
Amount
|
|
Percent
|
||||||||
Net sales
|
$
|
12,957
|
|
|
100.00
|
|
$
|
12,073
|
|
|
100.00
|
|
$
|
41,757
|
|
|
100.00
|
|
$
|
39,475
|
|
|
100.00
|
Cost of sales
|
8,476
|
|
|
65.42
|
|
7,930
|
|
|
65.68
|
|
27,323
|
|
|
65.43
|
|
25,933
|
|
|
65.70
|
||||
Gross margin
|
4,481
|
|
|
34.58
|
|
4,143
|
|
|
34.32
|
|
14,434
|
|
|
34.57
|
|
13,542
|
|
|
34.30
|
||||
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Selling, general and administrative
|
3,184
|
|
|
24.56
|
|
3,023
|
|
|
25.03
|
|
9,820
|
|
|
23.52
|
|
9,436
|
|
|
23.91
|
||||
Depreciation
|
373
|
|
|
2.88
|
|
371
|
|
|
3.08
|
|
1,092
|
|
|
2.62
|
|
1,111
|
|
|
2.81
|
||||
Interest - net
|
125
|
|
|
0.97
|
|
114
|
|
|
0.95
|
|
348
|
|
|
0.83
|
|
313
|
|
|
0.79
|
||||
Total expenses
|
3,682
|
|
|
28.41
|
|
3,508
|
|
|
29.06
|
|
11,260
|
|
|
26.97
|
|
10,860
|
|
|
27.51
|
||||
Pre-tax earnings
|
799
|
|
|
6.17
|
|
635
|
|
|
5.26
|
|
3,174
|
|
|
7.60
|
|
2,682
|
|
|
6.79
|
||||
Income tax provision
|
300
|
|
|
2.32
|
|
239
|
|
|
1.98
|
|
1,194
|
|
|
2.86
|
|
1,012
|
|
|
2.56
|
||||
Net earnings
|
$
|
499
|
|
|
3.85
|
|
$
|
396
|
|
|
3.28
|
|
$
|
1,980
|
|
|
4.74
|
|
$
|
1,670
|
|
|
4.23
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding - basic
|
1,047
|
|
|
|
|
1,126
|
|
|
|
|
1,067
|
|
|
|
|
1,163
|
|
|
|
||||
Basic earnings per common share
|
$
|
0.47
|
|
|
|
|
$
|
0.35
|
|
|
|
|
$
|
1.84
|
|
|
|
|
$
|
1.43
|
|
|
|
Weighted average common shares outstanding - diluted
|
1,049
|
|
|
|
|
1,128
|
|
|
|
|
1,069
|
|
|
|
|
1,165
|
|
|
|
||||
Diluted earnings per common share
|
$
|
0.47
|
|
|
|
|
$
|
0.35
|
|
|
|
|
$
|
1.84
|
|
|
|
|
$
|
1.42
|
|
|
|
Cash dividends per share
|
$
|
0.18
|
|
|
|
|
$
|
0.16
|
|
|
|
|
$
|
0.52
|
|
|
|
|
$
|
0.46
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Retained Earnings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Balance at beginning of period
|
$
|
12,504
|
|
|
|
|
$
|
14,199
|
|
|
|
|
$
|
13,224
|
|
|
|
|
$
|
15,852
|
|
|
|
Net earnings
|
499
|
|
|
|
|
396
|
|
|
|
|
1,980
|
|
|
|
|
1,670
|
|
|
|
||||
Cash dividends
|
(189
|
)
|
|
|
|
(180
|
)
|
|
|
|
(555
|
)
|
|
|
|
(530
|
)
|
|
|
||||
Share repurchases
|
(711
|
)
|
|
|
|
(813
|
)
|
|
|
|
(2,546
|
)
|
|
|
|
(3,390
|
)
|
|
|
||||
Balance at end of period
|
$
|
12,103
|
|
|
|
|
$
|
13,602
|
|
|
|
|
$
|
12,103
|
|
|
|
|
$
|
13,602
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|||||||||||||||||||||||
|
November 1, 2013
|
|
November 2, 2012
|
|
November 1, 2013
|
|
November 2, 2012
|
|||||||||||||||||||
|
Amount
|
|
Percent
|
|
Amount
|
|
Percent
|
|
Amount
|
|
Percent
|
|
Amount
|
|
Percent
|
|||||||||||
Net earnings
|
$
|
499
|
|
|
3.85
|
|
|
$
|
396
|
|
|
3.28
|
|
|
$
|
1,980
|
|
|
4.74
|
|
|
$
|
1,670
|
|
|
4.23
|
Foreign currency translation adjustments - net of tax
|
(4
|
)
|
|
(0.03
|
)
|
|
8
|
|
|
0.07
|
|
|
(29
|
)
|
|
(0.07
|
)
|
|
7
|
|
|
0.02
|
||||
Net unrealized investment losses - net of tax
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
(0.02
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
||||
Other comprehensive (loss)/income
|
(4
|
)
|
|
(0.03
|
)
|
|
6
|
|
|
0.05
|
|
|
(29
|
)
|
|
(0.07
|
)
|
|
7
|
|
|
0.02
|
||||
Comprehensive income
|
$
|
495
|
|
|
3.82
|
|
|
$
|
402
|
|
|
3.33
|
|
|
$
|
1,951
|
|
|
4.67
|
|
|
$
|
1,677
|
|
|
4.25
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
|
||||||
|
November 1, 2013
|
|
November 2, 2012
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net earnings
|
$
|
1,980
|
|
|
$
|
1,670
|
|
Adjustments to reconcile net earnings to net cash provided by operating activities:
|
|
|
|
|
|
||
Depreciation and amortization
|
1,167
|
|
|
1,185
|
|
||
Deferred income taxes
|
(117
|
)
|
|
(113
|
)
|
||
Loss on property and other assets - net
|
22
|
|
|
69
|
|
||
Loss on equity method investments
|
41
|
|
|
38
|
|
||
Share-based payment expense
|
70
|
|
|
75
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||
Merchandise inventory - net
|
(847
|
)
|
|
(640
|
)
|
||
Other operating assets
|
(11
|
)
|
|
(150
|
)
|
||
Accounts payable
|
1,063
|
|
|
1,064
|
|
||
Other operating liabilities
|
491
|
|
|
310
|
|
||
Net cash provided by operating activities
|
3,859
|
|
|
3,508
|
|
||
|
|
|
|
||||
Cash flows from investing activities:
|
|
|
|
|
|
||
Purchases of investments
|
(530
|
)
|
|
(1,333
|
)
|
||
Proceeds from sale/maturity of investments
|
391
|
|
|
1,563
|
|
||
Capital expenditures
|
(610
|
)
|
|
(947
|
)
|
||
Contributions to equity method investments - net
|
(137
|
)
|
|
(157
|
)
|
||
Proceeds from sale of property and other long-term assets
|
62
|
|
|
105
|
|
||
Acquisition of business - net
|
(203
|
)
|
|
—
|
|
||
Other - net
|
4
|
|
|
(14
|
)
|
||
Net cash used in investing activities
|
(1,023
|
)
|
|
(783
|
)
|
||
|
|
|
|
||||
Cash flows from financing activities:
|
|
|
|
|
|
||
Net proceeds from issuance of long-term debt
|
985
|
|
|
1,984
|
|
||
Repayment of long-term debt
|
(34
|
)
|
|
(580
|
)
|
||
Proceeds from issuance of common stock under share-based payment plans
|
117
|
|
|
102
|
|
||
Cash dividend payments
|
(543
|
)
|
|
(524
|
)
|
||
Repurchase of common stock
|
(2,797
|
)
|
|
(3,643
|
)
|
||
Other - net
|
(1
|
)
|
|
11
|
|
||
Net cash used in financing activities
|
(2,273
|
)
|
|
(2,650
|
)
|
||
|
|
|
|
||||
Effect of exchange rate changes on cash
|
(3
|
)
|
|
2
|
|
||
|
|
|
|
||||
Net increase in cash and cash equivalents
|
560
|
|
|
77
|
|
||
Cash and cash equivalents, beginning of period
|
541
|
|
|
1,014
|
|
||
Cash and cash equivalents, end of period
|
$
|
1,101
|
|
|
$
|
1,091
|
|
|
|
|
|
•
|
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
|
||||||||||||
(In millions)
|
November 1, 2013
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
||||
Available-for-sale securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Municipal obligations
|
$
|
37
|
|
|
$
|
—
|
|
|
$
|
37
|
|
|
$
|
—
|
|
Money market funds
|
35
|
|
|
35
|
|
|
—
|
|
|
—
|
|
||||
Municipal floating rate obligations
|
22
|
|
|
—
|
|
|
22
|
|
|
—
|
|
||||
Certificates of deposit
|
21
|
|
|
21
|
|
|
—
|
|
|
—
|
|
||||
Total short-term investments
|
$
|
115
|
|
|
$
|
56
|
|
|
$
|
59
|
|
|
$
|
—
|
|
Available-for-sale securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Municipal floating rate obligations
|
$
|
419
|
|
|
$
|
—
|
|
|
$
|
419
|
|
|
$
|
—
|
|
Municipal obligations
|
20
|
|
|
—
|
|
|
20
|
|
|
—
|
|
||||
Total long-term investments
|
$
|
439
|
|
|
$
|
—
|
|
|
$
|
439
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
Fair Value Measurements at Reporting Date Using
|
||||||||||||
(In millions)
|
November 2, 2012
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
||||
Available-for-sale securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Municipal obligations
|
$
|
51
|
|
|
$
|
—
|
|
|
$
|
51
|
|
|
—
|
|
|
Money market funds
|
63
|
|
|
63
|
|
|
—
|
|
|
—
|
|
||||
Municipal floating rate obligations
|
61
|
|
|
—
|
|
|
61
|
|
|
—
|
|
||||
Other
|
6
|
|
|
—
|
|
|
6
|
|
|
—
|
|
||||
Trading securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Mutual funds
|
28
|
|
|
28
|
|
|
—
|
|
|
—
|
|
||||
Total short-term investments
|
$
|
209
|
|
|
$
|
91
|
|
|
$
|
118
|
|
|
$
|
—
|
|
Available-for-sale securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Municipal floating rate obligations
|
$
|
278
|
|
|
$
|
—
|
|
|
$
|
278
|
|
|
$
|
—
|
|
Municipal obligations
|
72
|
|
|
—
|
|
|
72
|
|
|
—
|
|
||||
Total long-term investments
|
$
|
350
|
|
|
$
|
—
|
|
|
$
|
350
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
Fair Value Measurements at Reporting Date Using
|
||||||||||||
(In millions)
|
February 1, 2013
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
||||
Available-for-sale securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Municipal obligations
|
$
|
56
|
|
|
$
|
—
|
|
|
$
|
56
|
|
|
—
|
|
|
Money market funds
|
49
|
|
|
49
|
|
|
—
|
|
|
—
|
|
||||
Municipal floating rate obligations
|
14
|
|
|
—
|
|
|
14
|
|
|
—
|
|
||||
Other
|
6
|
|
|
—
|
|
|
6
|
|
|
—
|
|
||||
Total short-term investments
|
$
|
125
|
|
|
$
|
49
|
|
|
$
|
76
|
|
|
$
|
—
|
|
Available-for-sale securities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Municipal floating rate obligations
|
$
|
230
|
|
|
$
|
—
|
|
|
$
|
230
|
|
|
$
|
—
|
|
Municipal obligations
|
41
|
|
|
—
|
|
|
41
|
|
|
—
|
|
||||
Total long-term investments
|
$
|
271
|
|
|
$
|
—
|
|
|
$
|
271
|
|
|
$
|
—
|
|
|
Three Months Ended
|
||||||||||||||
|
November 1, 2013
|
|
November 2, 2012
|
||||||||||||
|
Fair Value
|
|
|
Impairment
|
|
|
Fair Value
|
|
|
Impairment
|
|
||||
(In millions)
|
Measurements
|
|
Losses
|
|
Measurements
|
|
Losses
|
|
|||||||
Assets-held-for-use:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating locations
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
18
|
|
|
$
|
(48
|
)
|
Excess properties
|
27
|
|
|
(9
|
)
|
|
1
|
|
|
(2
|
)
|
||||
Assets-held-for-sale:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Excess properties
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
||||
Total
|
$
|
27
|
|
|
$
|
(9
|
)
|
|
$
|
22
|
|
|
$
|
(50
|
)
|
|
|
|
|
|
|
|
|
||||||||
|
Nine Months Ended
|
||||||||||||||
|
November 1, 2013
|
|
November 2, 2012
|
||||||||||||
|
Fair Value
|
|
|
Impairment
|
|
|
Fair Value
|
|
|
Impairment
|
|
||||
(In millions)
|
Measurements
|
|
Losses
|
|
Measurements
|
|
Losses
|
|
|||||||
Assets-held-for-use:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating locations
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
19
|
|
|
$
|
(54
|
)
|
Excess properties
|
38
|
|
|
(12
|
)
|
|
32
|
|
|
(17
|
)
|
||||
Assets-held-for-sale:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Excess properties
|
6
|
|
|
(2
|
)
|
|
4
|
|
|
(1
|
)
|
||||
Total
|
$
|
44
|
|
|
$
|
(14
|
)
|
|
$
|
55
|
|
|
$
|
(72
|
)
|
|
November 1, 2013
|
|
November 2, 2012
|
||||||||||||
|
Carrying
|
|
|
Fair
|
|
|
Carrying
|
|
|
Fair
|
|
||||
(In millions)
|
Amount
|
|
|
Value
|
|
|
Amount
|
|
|
Value
|
|
||||
Unsecured notes (Level 1)
|
$
|
9,615
|
|
|
$
|
10,488
|
|
|
$
|
8,626
|
|
|
$
|
10,160
|
|
Mortgage notes (Level 2)
|
18
|
|
|
19
|
|
|
19
|
|
|
23
|
|
||||
Long-term debt (excluding capitalized lease obligations)
|
$
|
9,633
|
|
|
$
|
10,507
|
|
|
$
|
8,645
|
|
|
$
|
10,183
|
|
(In millions)
|
|
August 30, 2013
|
||
Purchase Price:
|
|
|
||
Cash paid
|
|
$
|
207
|
|
|
|
|
||
Allocation:
|
|
|
||
Cash acquired
|
|
4
|
|
|
Merchandise inventory
|
|
155
|
|
|
Property
|
|
183
|
|
|
Amortizable intangible assets:
|
|
|
||
Trade name
|
|
8
|
|
|
Other assets
|
|
37
|
|
|
Goodwill
|
|
26
|
|
|
Current liabilities assumed
|
|
(86
|
)
|
|
Long-term liabilities assumed
|
|
(120
|
)
|
|
Total
|
|
$
|
207
|
|
|
|
|
|
Three Months Ended
|
|
Nine months ended
|
||||||||||||
(In millions)
|
November 1, 2013
|
|
|
November 2, 2012
|
|
|
November 1, 2013
|
|
November 2, 2012
|
|
|||||
Accrual for exit activities, balance at beginning of period
|
$
|
60
|
|
|
$
|
68
|
|
|
$
|
75
|
|
|
$
|
86
|
|
Additions to the accrual - net
|
7
|
|
|
14
|
|
|
8
|
|
|
5
|
|
||||
Cash payments
|
(11
|
)
|
|
(5
|
)
|
|
(27
|
)
|
|
(14
|
)
|
||||
Accrual for exit activities, balance at end of period
|
$
|
56
|
|
|
$
|
77
|
|
|
$
|
56
|
|
|
$
|
77
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
(In millions)
|
November 1, 2013
|
|
|
November 2, 2012
|
|
|
November 1, 2013
|
|
|
November 2, 2012
|
|
||||
Deferred revenue - extended protection plans, beginning of period
|
$
|
733
|
|
|
$
|
726
|
|
|
$
|
715
|
|
|
$
|
704
|
|
Additions to deferred revenue
|
67
|
|
|
57
|
|
|
222
|
|
|
191
|
|
||||
Deferred revenue recognized
|
(70
|
)
|
|
(63
|
)
|
|
(207
|
)
|
|
(175
|
)
|
||||
Deferred revenue - extended protection plans, end of period
|
$
|
730
|
|
|
$
|
720
|
|
|
$
|
730
|
|
|
$
|
720
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
(In millions)
|
November 1, 2013
|
|
|
November 2, 2012
|
|
|
November 1, 2013
|
|
|
November 2, 2012
|
|
||||
Liability for extended protection plan claims, beginning of period
|
$
|
27
|
|
|
$
|
23
|
|
|
$
|
20
|
|
|
$
|
21
|
|
Accrual for claims incurred
|
33
|
|
|
29
|
|
|
89
|
|
|
71
|
|
||||
Claim payments
|
(39
|
)
|
|
(29
|
)
|
|
(88
|
)
|
|
(69
|
)
|
||||
Liability for extended protection plan claims, end of period
|
$
|
21
|
|
|
$
|
23
|
|
|
$
|
21
|
|
|
$
|
23
|
|
|
Three Months Ended
|
||||||||||||
|
November 1, 2013
|
|
November 2, 2012
|
||||||||||
(In millions)
|
Shares
|
|
|
Cost
1
|
|
|
Shares
|
|
|
Cost
1
|
|
||
Share repurchase program
|
14.5
|
|
|
$
|
761
|
|
|
29.6
|
|
|
$
|
850
|
|
Shares withheld from employees
|
—
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
||
Total share repurchases
|
14.5
|
|
|
$
|
761
|
|
|
29.7
|
|
|
$
|
850
|
|
|
|
|
|
|
|
|
|
||||||
|
Nine Months Ended
|
||||||||||||
|
November 1, 2013
|
|
November 2, 2012
|
||||||||||
(In millions)
|
Shares
|
|
|
Cost
2
|
|
|
Shares
|
|
|
Cost
2
|
|
||
Share repurchase program
|
65.1
|
|
|
$
|
2,773
|
|
|
124.4
|
|
|
$
|
3,600
|
|
Shares withheld from employees
|
1.0
|
|
|
38
|
|
|
1.5
|
|
|
43
|
|
||
Total share repurchases
|
66.1
|
|
|
$
|
2,811
|
|
|
125.9
|
|
|
$
|
3,643
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
(In millions, except per share data)
|
November 1, 2013
|
|
November 2, 2012
|
|
November 1, 2013
|
|
November 2, 2012
|
||||||||
Basic earnings per common share:
|
|
|
|
|
|
|
|
||||||||
Net earnings
|
$
|
499
|
|
|
$
|
396
|
|
|
$
|
1,980
|
|
|
$
|
1,670
|
|
Less: Net earnings allocable to participating securities
|
(4
|
)
|
|
(3
|
)
|
|
(13
|
)
|
|
(11
|
)
|
||||
Net earnings allocable to common shares
|
$
|
495
|
|
|
$
|
393
|
|
|
$
|
1,967
|
|
|
$
|
1,659
|
|
Weighted-average common shares outstanding
|
1,047
|
|
|
1,126
|
|
|
1,067
|
|
|
1,163
|
|
||||
Basic earnings per common share
|
$
|
0.47
|
|
|
$
|
0.35
|
|
|
$
|
1.84
|
|
|
$
|
1.43
|
|
Diluted earnings per common share:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net earnings
|
$
|
499
|
|
|
$
|
396
|
|
|
$
|
1,980
|
|
|
$
|
1,670
|
|
Less: Net earnings allocable to participating securities
|
(4
|
)
|
|
(3
|
)
|
|
(13
|
)
|
|
(11
|
)
|
||||
Net earnings allocable to common shares
|
$
|
495
|
|
|
$
|
393
|
|
|
$
|
1,967
|
|
|
$
|
1,659
|
|
Weighted-average common shares outstanding
|
1,047
|
|
|
1,126
|
|
|
1,067
|
|
|
1,163
|
|
||||
Dilutive effect of non-participating share-based awards
|
2
|
|
|
2
|
|
|
2
|
|
|
2
|
|
||||
Weighted-average common shares, as adjusted
|
1,049
|
|
|
1,128
|
|
|
1,069
|
|
|
1,165
|
|
||||
Diluted earnings per common share
|
$
|
0.47
|
|
|
$
|
0.35
|
|
|
$
|
1.84
|
|
|
$
|
1.42
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
(In millions)
|
November 1, 2013
|
|
|
November 2, 2012
|
|
|
November 1, 2013
|
|
|
November 2, 2012
|
|
||||
Long-term debt
|
$
|
110
|
|
|
$
|
107
|
|
|
$
|
316
|
|
|
$
|
314
|
|
Capitalized lease obligations
|
10
|
|
|
9
|
|
|
29
|
|
|
28
|
|
||||
Interest income
|
(1
|
)
|
|
(3
|
)
|
|
(3
|
)
|
|
(7
|
)
|
||||
Interest capitalized
|
(1
|
)
|
|
(1
|
)
|
|
(3
|
)
|
|
(3
|
)
|
||||
Interest on tax uncertainties
|
5
|
|
|
—
|
|
|
4
|
|
|
(25
|
)
|
||||
Other
|
2
|
|
|
2
|
|
|
5
|
|
|
6
|
|
||||
Interest - net
|
$
|
125
|
|
|
$
|
114
|
|
|
$
|
348
|
|
|
$
|
313
|
|
|
Nine Months Ended
|
||||||
(In millions)
|
November 1, 2013
|
|
|
November 2, 2012
|
|
||
Cash paid for interest, net of amount capitalized
|
$
|
420
|
|
|
$
|
414
|
|
Cash paid for income taxes - net
|
$
|
1,130
|
|
|
$
|
1,059
|
|
Non-cash investing and financing activities:
|
|
|
|
|
|
||
Non-cash property acquisitions, including assets acquired under capital lease
|
$
|
5
|
|
|
$
|
25
|
|
Cash dividends declared but not paid
|
$
|
189
|
|
|
$
|
180
|
|
•
|
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
|
|
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 1, 2013
|
|
|
November 2, 2012
|
|
|
2013 vs. 2012
|
|
|
2013 vs. 2012
|
|
Net sales
|
100.00
|
%
|
|
100.00
|
%
|
|
N/A
|
|
|
7.3
|
%
|
Gross margin
|
34.58
|
|
|
34.32
|
|
|
26
|
|
|
8.2
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative
|
24.56
|
|
|
25.03
|
|
|
(47
|
)
|
|
5.3
|
|
Depreciation
|
2.88
|
|
|
3.08
|
|
|
(20
|
)
|
|
0.5
|
|
Interest - net
|
0.97
|
|
|
0.95
|
|
|
2
|
|
|
9.5
|
|
Total expenses
|
28.41
|
|
|
29.06
|
|
|
(65
|
)
|
|
5.0
|
|
Pre-tax earnings
|
6.17
|
|
|
5.26
|
|
|
91
|
|
|
25.9
|
|
Income tax provision
|
2.32
|
|
|
1.98
|
|
|
34
|
|
|
25.5
|
|
Net earnings
|
3.85
|
%
|
|
3.28
|
%
|
|
57
|
|
|
26.1
|
%
|
EBIT margin
1
|
7.14
|
%
|
|
6.21
|
%
|
|
93
|
|
|
23.4
|
%
|
|
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 1, 2013
|
|
|
November 2, 2012
|
|
|
2013 vs. 2012
|
|
|
2013 vs. 2012
|
|
Net sales
|
100.00
|
%
|
|
100.00
|
%
|
|
N/A
|
|
|
5.8
|
%
|
Gross margin
|
34.57
|
|
|
34.30
|
|
|
27
|
|
|
6.6
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative
|
23.52
|
|
|
23.91
|
|
|
(39
|
)
|
|
4.1
|
|
Depreciation
|
2.62
|
|
|
2.81
|
|
|
(19
|
)
|
|
(1.6
|
)
|
Interest - net
|
0.83
|
|
|
0.79
|
|
|
4
|
|
|
11.1
|
|
Total expenses
|
26.97
|
|
|
27.51
|
|
|
(54
|
)
|
|
3.7
|
|
Pre-tax earnings
|
7.60
|
|
|
6.79
|
|
|
81
|
|
|
18.3
|
|
Income tax provision
|
2.86
|
|
|
2.56
|
|
|
30
|
|
|
18.0
|
|
Net earnings
|
4.74
|
%
|
|
4.23
|
%
|
|
51
|
|
|
18.6
|
%
|
EBIT margin
1
|
8.43
|
%
|
|
7.58
|
%
|
|
85
|
|
|
17.6
|
%
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
Other Metrics
|
November 1, 2013
|
|
|
November 2, 2012
|
|
|
November 1, 2013
|
|
|
November 2, 2012
|
|
||||
Comparable sales increase
2
|
6.2
|
%
|
|
1.8
|
%
|
|
5.1
|
%
|
|
1.3
|
%
|
||||
Total customer transactions (in millions)
|
202
|
|
|
191
|
|
|
643
|
|
|
627
|
|
||||
Average ticket
3
|
$
|
64.07
|
|
|
$
|
63.11
|
|
|
$
|
64.93
|
|
|
$
|
62.94
|
|
At end of period:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Number of stores
4
|
1,831
|
|
|
1,750
|
|
|
|
|
|
|
|
||||
Sales floor square feet (in millions)
|
200
|
|
|
197
|
|
|
|
|
|
|
|
||||
Average store size selling square feet (in thousands)
4, 5
|
109
|
|
|
113
|
|
|
|
|
|
|
|
||||
Return on invested capital
6
|
11.3
|
%
|
|
9.4
|
%
|
|
|
|
|
|
|
|
For the periods ended
|
||||||
Calculation of Return on Invested Capital
|
November 1, 2013
|
|
November 2, 2012
|
||||
Numerator
1
|
|
|
|
||||
Net earnings
|
$
|
2,269
|
|
|
$
|
1,993
|
|
Plus:
|
|
|
|
|
|
||
Interest expense - net
|
457
|
|
|
415
|
|
||
Provision for income taxes
|
1,360
|
|
|
1,175
|
|
||
Earnings before interest and taxes
|
4,086
|
|
|
3,583
|
|
||
Less:
|
|
|
|
|
|
||
Income tax adjustment
2
|
1,531
|
|
|
1,329
|
|
||
Net operating profit after tax
|
$
|
2,555
|
|
|
$
|
2,254
|
|
Effective tax rate
|
37.5
|
%
|
|
37.1
|
%
|
||
Denominator
|
|
|
|
|
|
||
Average debt and equity
3
|
$
|
22,690
|
|
|
$
|
24,019
|
|
Return on invested capital
|
11.3
|
%
|
|
9.4
|
%
|
||
|
|
|
|
||||
Calculation of Return on Average Debt and Equity
|
|
|
|
||||
Numerator
1
|
|
|
|
|
|
||
Net earnings
|
$
|
2,269
|
|
|
$
|
1,993
|
|
Denominator
|
|
|
|
|
|
||
Average debt and equity
3
|
$
|
22,690
|
|
|
$
|
24,019
|
|
Return on average debt and equity
|
10.0
|
%
|
|
8.3
|
%
|
|
|
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 amounts, excluding discount)
|
|
$
|
9,700
|
|
|
$
|
2
|
|
|
$
|
1,534
|
|
|
$
|
753
|
|
|
$
|
7,411
|
|
Long-term debt (interest payments)
|
|
$
|
7,338
|
|
|
$
|
459
|
|
|
$
|
887
|
|
|
$
|
759
|
|
|
$
|
5,233
|
|
Total
|
|
$
|
17,038
|
|
|
$
|
461
|
|
|
$
|
2,421
|
|
|
$
|
1,512
|
|
|
$
|
12,644
|
|
(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
|
|
||
August 3, 2013 - August 30, 2013
3
|
11.4
|
|
|
$
|
46.91
|
|
|
11.4
|
|
|
$
|
2,375
|
|
August 31, 2013 - October 4, 2013
|
0.9
|
|
|
47.99
|
|
|
0.9
|
|
|
2,333
|
|
||
October 5, 2013 - November 1, 2013
|
2.2
|
|
|
48.52
|
|
|
2.2
|
|
|
2,226
|
|
||
As of November 1, 2013
|
14.5
|
|
|
$
|
47.22
|
|
|
14.5
|
|
|
$
|
2,226
|
|
Exhibit
Number
|
|
|
|
Incorporated by Reference
|
||||||
|
Exhibit Description
|
|
Form
|
|
File No.
|
|
Exhibit(s)
|
|
Filing Date
|
|
|
|
|
|
|
|
|
|
|
|
|
3.1
|
|
Restated 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
|
|
August 27, 2012
|
|
|
|
|
|
|
|
|
|
|
|
10.1
|
|
Amendment No. 5 to the Lowe's Companies Benefit Restoration Plan, as amended and restated effective 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 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.†
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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.‡
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document.‡
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document.‡
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LOWE'S COMPANIES, INC.
|
|
|
|
|
|
|
December 3, 2013
|
|
/s/ Matthew V. Hollifield
|
Date
|
|
Matthew V. Hollifield
Senior Vice President and Chief Accounting Officer |
|
|
|
|
|
|
|
LOWE'S COMPANIES, INC.
|
|
|
|
|
|
|
|
|
|
|
/s/ Maureen K. Ausura
|
|
|
|
By:
|
Maureen K. Ausura
|
|
|
|
|
Chief Human Resources Officer
|
|
|
|
|
|
|
|
|
Date:
|
August 28, 2013
|
|
|
|
|
|
|
|
|
|
|
|
Description
|
Registration
Statement Number
|
|
|
Form S-3 ASR
|
|
Lowe’s Stock Advantage Direct Stock Purchase Plan
|
333-178150
|
Debt Securities, Preferred Stock, Common Stock
|
333-183730
|
|
|
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 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; 333-181950
|
|
|
(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 3, 2013
|
|
/s/ Robert A. Niblock
|
Date
|
|
Robert A. Niblock
Chairman of the Board, President 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 3, 2013
|
|
/s/ Robert F. Hull, Jr.
|
Date
|
|
Robert F. Hull, Jr.
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.
|