Lowe’s Reports Third Quarter Sales and Earnings Results

  Lowe’s Reports Third Quarter Sales and Earnings Results

       -- Third Quarter Comparable Store Sales Increased 1.8 Percent --

Business Wire

MOORESVILLE, N.C. -- November 19, 2012

Lowe’s Companies, Inc. (NYSE: LOW), the world’s second largest home
improvement retailer, today reported net earnings of $396 million for the
quarter ended November 2, 2012, a 76.0 percent increase over the same period a
year ago. Diluted earnings per share increased 94.4 percent to $0.35. For the
nine months ended November 2, 2012, net earnings increased 10.1 percent from
the same period a year ago to $1.67 billion, while diluted earnings per share
increased 21.4 percent to $1.42.

Included in the above reported results are charges related to long-lived asset
impairments, discontinued projects, and a change in the discount rate applied
to self-insurance claims which, in the aggregate, reduced pre-tax earnings for
the third quarter by $85 million and diluted earnings per share by $0.05. For
the same period a year ago, reported results included charges related to store
closings, long-lived asset impairments, and discontinued projects which, in
the aggregate, reduced pre-tax earnings by $368 million and diluted earnings
per share by $0.18.

Lowe’s fiscal year ends on the Friday nearest the end of January; therefore,
fiscal year 2011 included 53 weeks. The quarterly comparisons in 2012, which
is a 52-week year, are impacted by a shift in comparable weeks. Sales for the
third quarter increased 1.9 percent to $12.1 billion from $11.9 billion in the
third quarter of 2011. The week shift negatively impacted total sales by $62
million or 0.5 percent for the third quarter. For the nine month period, sales
were $39.5 billion, a 2.3 percent increase over the same period a year ago.
The week shift accounted for $192 million or 0.5 percent of the total sales
increase for the nine month period.

The week shift had an insignificant impact on diluted earnings per share in
the third quarter. For the nine month period, the week shift contributed
approximately $0.02 to diluted earnings per share.

Comparable store sales for the third quarter increased 1.8 percent on a
consolidated basis as well as for the U.S. business. For the nine month
period, comparable store sales increased 1.3 percent, while comparable store
sales for the U.S. business increased 1.4 percent. Comparable store sales are
based on comparable 13-week periods.

“We are keenly focused on improving our core business,” commented Robert A.
Niblock, Lowe’s chairman, president and CEO. “Our level of execution is
improving and we delivered solid results in the third quarter. I would like to
thank our employees for their continued dedication and customer focus.

“I would also like to express our sympathy for all those impacted by the
devastating effects of superstorm Sandy,” Niblock added. “Our employees are
working diligently to help communities recover from the damage. Additionally,
our stores as well as lowes.com are official donation sites for the American
Red Cross Disaster Relief Fund, and Lowe’s is contributing $1 million to the
relief efforts through various partner organizations.”

Delivering on the commitment to return excess cash to shareholders, the
company repurchased $850 million or 29.6 million shares of stock and paid $184
million in dividends in the third quarter. For the nine month period, the
company repurchased $3.6 billion or 124.4 million shares of common stock and
paid $524 million in dividends.

As of November 2, 2012, Lowe’s operated 1,750 stores in the United States,
Canada and Mexico representing 197.0 million square feet of retail selling
space.

A conference call to discuss third quarter 2012 operating results is scheduled
for today (Monday, November, 19) at 9:00 am ET. The conference call will be
available through a webcast and can be accessed by visiting Lowe’s website at
www.Lowes.com/investor and clicking on Lowe’s Third Quarter 2012 Earnings
Conference Call Webcast. A replay of the call will be archived on
Lowes.com/investor until February 24, 2013.

Lowe’s Business Outlook

Fiscal Year 2012 – a 52-week Year (comparisons to fiscal year 2011 – a 53-week
year; based on U.S. GAAP unless otherwise noted)

  *Total sales are expected to be approximately flat. On a 52 versus 52 week
    basis, total sales are expected to increase approximately 2 percent.
  *The company expects comparable store sales to increase approximately 1
    percent (on a 52 versus 52 week basis).
  *The company expects to open approximately 10 stores in fiscal year 2012.
  *Earnings before interest and taxes as a percentage of sales (operating
    margin) are expected to increase approximately 40 basis points.
  *Depreciation expense is expected to be approximately $1.5 billion.
  *The effective income tax rate is expected to be approximately 37.7%.
  *Diluted earnings per share of approximately $1.64 are expected for the
    fiscal year ending February 1, 2013.

Disclosure Regarding Forward-Looking Statements

This news release includes "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995 (the "Act"). Statements
of the company's expectations for sales growth, comparable store sales,
earnings and performance, shareholder value, capital expenditures, cash flows,
store openings, the housing market, the home improvement industry, demand for
services, share repurchases, the Company’s strategic initiatives and any
statement of an assumption underlying any of the foregoing, constitute
"forward-looking statements" under the Act. Although we believe that the
expectations, opinions, projections, and comments reflected in these
forward-looking statements are reasonable, we can give no assurance that such
statements will prove to be correct. A wide variety of potential risks,
uncertainties, and other factors could materially affect our ability to
achieve the results either expressed or implied by our forward-looking
statements including, but not limited to, changes in general economic
conditions, such as continued high rates of unemployment, interest rate and
currency fluctuations, higher fuel and other energy costs, slower growth in
personal income, changes in consumer spending, changes in the rate of housing
turnover, the availability and increasing regulation of consumer credit and of
mortgage financing, inflation or deflation of commodity prices, pending
combination of expiring tax cuts and mandatory reductions in federal spending
at the end of 2012, and other factors which can negatively affect our
customers, as well as our ability to: (i) respond to adverse trends in the
housing industry, such as the psychological effects of lower home prices, and
in the level of repairs, remodeling, and additions to existing homes, as well
as a general reduction in commercial building activity; (ii) secure, develop,
and otherwise implement new technologies and processes designed to enhance our
efficiency and competitiveness; (iii) attract, train, and retain
highly-qualified associates; (iv) manage our business effectively as we adapt
our traditional operating model to meet the changing expectations of our
customers; (v) to maintain, improve, upgrade and protect our critical
information systems; (vi) respond to fluctuations in the prices and
availability of services, supplies, and products; (vii) respond to the growth
and impact of competition; (viii) address changes in existing or new laws or
regulations that affect consumer credit, employment/labor, trade, product
safety, transportation/logistics, energy costs, health care, tax or
environmental issues; and (ix) respond to unanticipated weather conditions
that could adversely affect sales. In addition, we could experience additional
impairment losses if the actual results of our operating stores are not
consistent with the assumptions and judgments we have made in estimating
future cash flows and determining asset fair values. For more information
about these and other risks and uncertainties that we are exposed to, you
should read the "Risk Factors" and "Critical Accounting Policies and
Estimates" included in our Annual Report on Form 10-K to the United States
Securities and Exchange Commission (the “SEC”) and the description of material
changes therein or updated version thereof, if any, included in our Quarterly
Reports on Form 10-Q.

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           Amount   Percent     Amount   Percent     Amount    Percent   Amount    Percent
Earnings
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          3,023    25.03        3,233    27.27        9,436     23.91      9,583     24.84
administrative
                                                                                                
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              635      5.26         352      2.97         2,682     6.79       2,421     6.28
earnings
                                                                                                
Income tax           239      1.98         127      1.07         1,012     2.56       904       2.35
provision
                                                                                                
Net earnings       $ 396      3.28       $ 225      1.90       $ 1,670     4.23     $ 1,517     3.93
                                                                               
                                                                                                
Weighted average
common shares        1,126                 1,250                 1,163                1,283
outstanding - basic
                                                                                                
Basic earnings
per common         $ 0.35                $ 0.18                $ 1.43               $ 1.17
share ^(1)
                                                                                                
Weighted average
common shares        1,128                 1,252                 1,165                1,286
outstanding -
diluted
                                                                                                
Diluted
earnings per       $ 0.35                $ 0.18                $ 1.42               $ 1.17
common share
^(1)
                                                                                                
Cash dividends     $ 0.16                $ 0.14                $ 0.46               $ 0.39
per share
                                                                               
                                                                                                
Retained                                                                        
Earnings
Balance at
beginning of       $ 14,199              $ 16,060              $ 15,852             $ 17,371
period
Net earnings         396                   225                   1,670                1,517
Cash dividends       (180)                (176)                (530)               (498)   
Share                (813)                -                     (3,390)             (2,281) 
repurchases
Balance at end     $ 13,602              $ 16,109              $ 13,602             $ 16,109    
of period
                                                                               
                                                                                                
(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             8        0.07         (35)    (0.29)      7         0.02       (8)      (0.01) 
translation
adjustments
                                                                                                
Net unrealized
investment           (2)     (0.02)      (1)     -            -         -          1         -
(losses)/gains
                                                                                                
Other
comprehensive        6        0.05         (36)    (0.29)      7         0.02       (7)      (0.01) 
income/(loss)
                                                                                                
Comprehensive    $ 402     3.33     $ 189     1.61      $ 1,677    4.25    $ 1,510    3.92   
income


Lowe's Companies, Inc.
Consolidated Balance Sheets
In Millions, Except Par Value Data
                                                       
                              (Unaudited)     (Unaudited)  
                                    November 2,      October 28,      February
                                    2012             2011             3, 2012
Assets
                                                                      
Current assets:
Cash and cash                     $ 1,091          $ 675            $ 1,014
equivalents
Short-term                          209              294              286
investments
Merchandise                         8,995            8,990            8,355
inventory - net
Deferred income                     235              237              183
taxes - net
Other current                      300             227             234
assets
                                                                      
Total current                       10,830           10,423           10,072
assets
                                                                      
Property, less
accumulated                         21,591           21,888           21,970
depreciation
Long-term                           350              705              504
investments
Other assets                       1,182           850             1,013
                                                                      
Total assets                      $ 33,953         $ 33,866         $ 33,559
                                                                      
Liabilities and
shareholders'
equity
                                                                      
Current
liabilities:
Current maturities                $ 45             $ 590            $ 592
of long-term debt
Accounts payable                    5,416            5,242            4,352
Accrued compensation and employee   581              622              613
benefits
Deferred revenue                    788              789              801
Other current                      1,784           1,913           1,533
liabilities
                                                                      
Total current                       8,614            9,156            7,891
liabilities
                                                                      
Long-term debt, excluding current   9,004            6,025            7,035
maturities
Deferred income                     486              322              531
taxes - net
Deferred revenue - extended         720              687              704
protection plans
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                   9                24               14
of par value
Retained earnings                   13,602           16,109           15,852
Accumulated other                  53              46              46
comprehensive income
                                                                      
Total
shareholders'                      14,225          16,809          16,533
equity
                                                                      
Total liabilities and             $ 33,953         $ 33,866         $ 33,559
shareholders' equity



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                     69                 407
assets - net
Loss on equity method                          38                 7
investments
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                 3,508              3,892
activities
                                                              
Cash flows from investing
activities:
Purchases of investments                       (1,333   )         (1,200   )
Proceeds from sale/maturity of                 1,563              1,672
investments
Property acquired                              (947     )         (1,264   )
Change in equity method                        (157     )         (204     )
investments
Proceeds from sale of property                 105                26
and other long-term assets
Other - net                                    (14      )         (13      )
Net cash used in investing                     (783     )         (983     )
activities
                                                              
Cash flows from financing
activities:
Net proceeds from issuance of                  1,984              -
long-term debt
Repayment of long-term debt                    (580     )         (28      )
Proceeds from issuance of common stock
under                                          102                55

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

Contact:

Lowe’s Companies, Inc.
Shareholders’/Analysts’ Inquiries:
Tiffany Mason, 704-758-2033
tiffany.l.mason@lowes.com
or
Media Inquiries:
Chris Ahearn, 704-758-2304
chris.c.ahearn@lowes.com
 
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