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Lowe’s Reports Third Quarter Sales And Earnings Results

The forward-looking statements contained in this news release are based upon data available as of the date of this release or other specified date and speak only as of such date. All subsequent written and oral forward-looking statements attributable to us or any person acting on our behalf about any of the matters covered in this release are qualified by these cautionary statements and the “Risk Factors” included in our Annual Report on Form 10-K to the SEC and the description of material changes, if any, therein included in our Quarterly Reports on Form 10-Q. We expressly disclaim any obligation to update or revise any forward-looking statement, whether as a result of new information, change in circumstances, future events, or otherwise.

With fiscal year 2011 sales of $50.2 billion, Lowe’s Companies, Inc. is a FORTUNE ® 100 company that serves approximately 15 million customers a week at more than 1,745 home improvement stores in the United States, Canada and Mexico. Founded in 1946 and based in Mooresville, N.C., Lowe’s is the second-largest home improvement retailer in the world. For more information, visit Lowes.com.

Lowe's Companies, Inc.
Consolidated Statements of Current and Retained Earnings (Unaudited)
In Millions, Except Per Share and Percentage Data
       
Three Months Ended Nine Months Ended

November 2, 2012

October 28, 2011

November 2, 2012

October 28, 2011

Current Earnings       Amount Percent   Amount Percent   Amount Percent   Amount Percent
Net sales $ 12,073 100.00 $ 11,852 100.00 $ 39,475 100.00 $ 38,579 100.00
 
Cost of sales 7,930 65.68 7,815 65.94 25,933 65.70 25,208 65.34
 
Gross margin 4,143 34.32 4,037 34.06 13,542 34.30 13,371 34.66
 
Expenses:
 
Selling, general and administrative 3,023 25.03 3,233 27.27 9,436 23.91 9,583 24.84
 
Depreciation 371 3.08 361 3.05 1,111 2.81 1,098 2.84
 
Interest - net 114 0.95 91 0.77 313 0.79 269 0.70
 
Total expenses 3,508 29.06 3,685 31.09 10,860 27.51 10,950 28.38
 
Pre-tax earnings 635 5.26 352 2.97 2,682 6.79 2,421 6.28
 
Income tax provision 239 1.98 127 1.07 1,012 2.56 904 2.35
 
Net earnings $ 396 3.28 $ 225 1.90 $ 1,670 4.23 $ 1,517 3.93
                                   
 
Weighted average common shares outstanding - basic 1,126 1,250 1,163 1,283
 
Basic earnings per common share (1) $ 0.35 $ 0.18 $ 1.43 $ 1.17
 
Weighted average common shares outstanding - diluted 1,128 1,252 1,165 1,286
 
Diluted earnings per common share (1) $ 0.35 $ 0.18 $ 1.42 $ 1.17
 
Cash dividends per share $ 0.16 $ 0.14 $ 0.46 $ 0.39
                                   
 
Retained Earnings                                  
Balance at beginning of period $ 14,199 $ 16,060 $ 15,852 $ 17,371
Net earnings 396 225 1,670 1,517
Cash dividends

(180)

 

(176)

 

(530)

 

(498)

 

Share repurchases

(813)

 

-

(3,390)

 

(2,281)

 

Balance at end of period $ 13,602 $ 16,109 $ 13,602 $ 16,109

 

                                   
 
(1) Under the two-class method, earnings per share is calculated using net earnings allocable to common shares, which is derived by reducing net earnings by the earnings allocable to participating securities. Net earnings allocable to common shares used in the basic and diluted earnings per share calculation were $393 million for the three months ended November 2 , 2012 and $223 million for the three months ended October 28 2011. Net earnings allocable to common shares used in the basic and diluted earnings per share calculation were $1,659 million for the nine months ended November 2, 2012 and $1,505 million for the nine months ended October 28, 2011.
 
 
Lowe's Companies, Inc.
Consolidated Statements of Comprehensive Income (Unaudited)
In Millions, Except Percentage Data
 
        Three Months Ended Nine Months Ended
November 2, 2012 October 28, 2011 November 2, 2012 October 28, 2011
Amount Percent   Amount Percent Amount Percent   Amount Percent
Net earnings $ 396 3.28 $ 225 1.90 $ 1,670 4.23 $ 1,517 3.93
 
Foreign currency translation adjustments 8 0.07

(35)

 

(0.29)

 

7 0.02

(8)

 

(0.01)

 

 
Net unrealized investment (losses)/gains

(2)

 

(0.02)

 

(1)

 

- - - 1 -
 
Other comprehensive income/(loss) 6 0.05

(36)

 

(0.29)

 

7 0.02

(7)

 

(0.01)

 

 
Comprehensive income     $ 402   3.33     $ 189   1.61   $ 1,677   4.25   $ 1,510   3.92  
 
Lowe's Companies, Inc.
Consolidated Balance Sheets
In Millions, Except Par Value Data
                               
            (Unaudited)   (Unaudited)  
November 2, 2012 October 28, 2011 February 3, 2012
Assets
 
Current assets:
Cash and cash equivalents $ 1,091 $ 675 $ 1,014
Short-term investments 209 294 286
Merchandise inventory - net 8,995 8,990 8,355
Deferred income taxes - net 235 237 183
Other current assets   300   227   234
 
Total current assets 10,830 10,423 10,072
 
Property, less accumulated depreciation 21,591 21,888 21,970
Long-term investments 350 705 504
Other assets   1,182   850   1,013
 
Total assets $ 33,953 $ 33,866 $ 33,559
 
Liabilities and shareholders' equity
 
Current liabilities:
Current maturities of long-term debt $ 45 $ 590 $ 592
Accounts payable 5,416 5,242 4,352
Accrued compensation and employee benefits 581 622 613
Deferred revenue 788 789 801
Other current liabilities   1,784   1,913   1,533
 
Total current liabilities 8,614 9,156 7,891
 
Long-term debt, excluding current maturities 9,004 6,025 7,035
Deferred income taxes - net 486 322 531
Deferred revenue - extended protection plans 720 687 704
Other liabilities   904   867   865
 
Total liabilities   19,728   17,057   17,026
 
Shareholders' equity:
Preferred stock - $5 par value, none issued - - -
Common stock - $.50 par value;
Shares issued and outstanding
November 2, 2012 1,123
October 28, 2011 1,260
February 3, 2012 1,241 561 630 621
Capital in excess of par value 9 24 14
Retained earnings 13,602 16,109 15,852
Accumulated other comprehensive income   53   46   46
 
Total shareholders' equity   14,225   16,809   16,533
 
Total liabilities and shareholders' equity $ 33,953 $ 33,866 $ 33,559
 
 
Lowe's Companies, Inc.
Consolidated Statements of Cash Flows (Unaudited)
In Millions
                 
        Nine Months Ended
November 2, 2012   October 28, 2011
Cash flows from operating activities:  
Net earnings $ 1,670 $ 1,517
Adjustments to reconcile net earnings to net cash provided by
operating activities:
Depreciation and amortization 1,185 1,171
Deferred income taxes (113 ) (200 )
Loss on property and other assets - net 69 407
Loss on equity method investments 38 7
Share-based payment expense 75 81
Net changes in operating assets and liabilities:
Merchandise inventory - net (640 ) (669 )
Other operating assets (150 ) 119
Accounts payable 1,064 892
Other operating liabilities 310 567
Net cash provided by operating activities 3,508 3,892
 
Cash flows from investing activities:
Purchases of investments (1,333 ) (1,200 )
Proceeds from sale/maturity of investments 1,563 1,672
Property acquired (947 ) (1,264 )
Change in equity method investments (157 ) (204 )
Proceeds from sale of property and other long-term assets 105 26
Other - net (14 ) (13 )
Net cash used in investing activities (783 ) (983 )
 
Cash flows from financing activities:
Net proceeds from issuance of long-term debt 1,984 -
Repayment of long-term debt (580 ) (28 )
Proceeds from issuance of common stock under

share-based payment plans

102 55
Cash dividend payments (524 ) (470 )
Repurchase of common stock (3,643 ) (2,434 )
Other - net 11 (9 )
Net cash used in financing activities (2,650 ) (2,886 )
 
Effect of exchange rate changes on cash 2 -
 
Net increase in cash and cash equivalents 77 23
Cash and cash equivalents, beginning of period 1,014 652
Cash and cash equivalents, end of period           $ 1,091     $ 675  




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