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Lowe’s Reports Fourth 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 2012 sales of $50.5 billion, Lowe’s Companies, Inc. is a FORTUNE ® 100 company that serves approximately 15 million customers a week at more than 1,750 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
In Millions, Except Per Share and Percentage Data
   
Three Months Ended (1)

Year Ended (1)
(Unaudited) (Unaudited) (Unaudited)
February 1, 2013 February 3, 2012 February 1, 2013 February 3, 2012
Current Earnings       Amount Percent       Amount Percent           Amount Percent       Amount Percent
Net sales $ 11,046 100.00 $ 11,629 100.00 $ 50,521 100.00 $ 50,208 100.00
 
Cost of sales 7,261 65.73 7,650 65.78 33,194 65.70 32,858 65.44
 
Gross margin 3,785 34.27 3,979 34.22 17,327 34.30 17,350 34.56
 
Expenses:
 
Selling, general and administrative 2,809 25.43 3,009 25.88 12,244 24.24 12,593 25.08
 
Depreciation 412 3.73 383 3.29 1,523 3.01 1,480 2.95
 
Interest - net 109 0.99 102 0.88 423 0.84 371 0.74
 
Total expenses 3,330 30.15 3,494 30.05 14,190 28.09 14,444 28.77
 
Pre-tax earnings 455 4.12 485 4.17 3,137 6.21 2,906 5.79
 
Income tax provision 167 1.51 163 1.40 1,178 2.33 1,067 2.13
 
Net earnings $ 288 2.61 $ 322 2.77 $ 1,959 3.88 $ 1,839 3.66
                                             
 
Weighted average common shares outstanding - basic 1,109 1,239 1,150 1,271
 
Basic earnings per common share (2) $ 0.26 $ 0.26 $ 1.69 $ 1.43
 
Weighted average common shares outstanding - diluted 1,112 1,241 1,152 1,273
 
Diluted earnings per common share (2) $ 0.26 $ 0.26 $ 1.69 $ 1.43
 
Cash dividends per share $ 0.16 $ 0.14 $ 0.62 $ 0.53

 
                                           
 
Retained Earnings                                            
Balance at beginning of period $ 13,602 $ 16,109 $ 15,852 $ 17,371
Net earnings 288 322 1,959 1,839
Cash dividends (178 ) (174 ) (708 ) (672 )
Share repurchases (488 ) (405 ) (3,879 ) (2,686 )
Balance at end of period $ 13,224 $ 15,852 $ 13,224 $ 15,852
 
(1) The fiscal year and three months ended February 3, 2012, had 53 weeks and 14 weeks, respectively. The fiscal year and three months ended February 1, 2013, had 52 weeks and 13 weeks, respectively.
 
(2) 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 $286 million for the three months ended February 1, 2013 and $320 million for the three months ended February 3, 2012. Net earnings allocable to common shares used in the basic and diluted earnings per share calculation were $1,945 million for the fiscal year ended February 1, 2013 and $1,824 million for the fiscal year ended February 3, 2012.
 
Lowe's Companies, Inc.              
Consolidated Statements of Comprehensive Income
In Millions, Except Percentage Data
   
        Three Months Ended (1) Year Ended (1)
(Unaudited) (Unaudited) (Unaudited)
February 1, 2013 February 3, 2012 February 1, 2013 February 3, 2012
Amount Percent         Amount Percent Amount Percent         Amount Percent
Net earnings $ 288 2.61 $ 322 2.77 $ 1,959 3.88 $ 1,839 3.66
 
Foreign currency translation adjustments - - (1 ) - 6 0.01 (8 ) (0.02 )
 
Net unrealized investment (losses)/gains - - - - - - 1 -
 
Other comprehensive (loss)/income - - (1 ) - 6 0.01 (7 ) (0.02 )
 
Comprehensive income     $ 288 2.61       $ 321   2.77   $ 1,965 3.89       $ 1,832   3.64  
(1) The fiscal year and three months ended February 3, 2012, had 53 weeks and 14 weeks, respectively. The fiscal year and three months ended February 1, 2013, had 52 weeks and 13 weeks, respectively.
 
 
Lowe's Companies, Inc.
Consolidated Balance Sheets
In Millions, Except Par Value Data
             
(Unaudited)
February 1, 2013 February 3, 2012
Assets
 
Current assets:
Cash and cash equivalents $ 541 $ 1,014
Short-term investments 125 286
Merchandise inventory - net 8,600 8,355
Deferred income taxes - net 217 183
Other current assets   301   234
 
Total current assets 9,784 10,072
 
Property, less accumulated depreciation 21,477 21,970
Long-term investments 271 504
Other assets   1,134   1,013
 
Total assets $ 32,666 $ 33,559
 
Liabilities and Shareholders' Equity
 
Current liabilities:
Current maturities of long-term debt $ 47 $ 592
Accounts payable 4,657 4,352
Accrued compensation and employee benefits 670 613
Deferred revenue 824 801
Other current liabilities   1,510   1,533
 
Total current liabilities 7,708 7,891
 
Long-term debt, excluding current maturities 9,030 7,035
Deferred income taxes - net 455 531
Deferred revenue - extended protection plans 715 704
Other liabilities   901   865
 
Total liabilities   18,809   17,026
 
Shareholders' equity:
Preferred stock - $5 par value, none issued - -
Common stock - $.50 par value;
Shares issued and outstanding
February 1, 2013 1,110
February 3, 2012 1,241 555 621
Capital in excess of par value 26 14
Retained earnings 13,224 15,852
Accumulated other comprehensive income   52   46
 
Total shareholders' equity   13,857   16,533
 
Total liabilities and shareholders' equity $ 32,666 $ 33,559
 
   
Lowe's Companies, Inc.
Consolidated Statements of Cash Flows
In Millions
         
Year Ended
(Unaudited)
February 1, 2013   February 3, 2012
Cash flows from operating activities:
Net earnings $ 1,959 $ 1,839
Adjustments to reconcile net earnings to net cash provided by
operating activities:
Depreciation and amortization 1,623 1,579
Deferred income taxes (140 ) 54
Loss on property and other assets - net 83 456
Loss on equity method investments 48 12
Share-based payment expense 100 107
Net changes in operating assets and liabilities:
Merchandise inventory - net (244 ) (33 )
Other operating assets (87 ) 125
Accounts payable 303 (5 )
Other operating liabilities 117 215

Net cash provided by operating activities
3,762 4,349
 
Cash flows from investing activities:
Purchases of investments (1,444 ) (1,433 )
Proceeds from sale/maturity of investments 1,837 2,120
Capital expenditures (1,211 ) (1,829 )
Change in equity method investments (219 ) (232 )
Proceeds from sale of property and other long-term assets 130 52
Other - net 4 (115 )
Net cash used in investing activities (903 ) (1,437 )
 
Cash flows from financing activities:
Net proceeds from issuance of long-term debt 1,984 993
Repayment of long-term debt (591 ) (37 )

Proceeds from issuance of common stock under   share-based payment plans
349 100

Cash dividend payments
(704 ) (647 )
Repurchase of common stock (4,393 ) (2,937 )
Other - net 22 (21 )
Net cash used in financing activities (3,333 ) (2,549 )
 
Effect of exchange rate changes on cash 1 (1 )
 
Net (decrease)/increase in cash and cash equivalents (473 ) 362
Cash and cash equivalents, beginning of year 1,014 652
Cash and cash equivalents, end of year $ 541 $ 1,014

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