UNITED STATES
SECURITIES AND EXCHANGE
COMMISSION
Washington, D.C.
20549
FORM 10-K
(Mark
One)
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x
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ANNUAL REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
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For the fiscal year ended
January 30, 2009
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or
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o
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TRANSITION REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
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For the transition period from
________ to
_________
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Commission file number
1-7898
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LOWE'S COMPANIES,
INC.
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(Exact name of registrant as specified in its
charter)
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NORTH
CAROLINA
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56-0578072
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(State
or other jurisdiction of incorporation or organization)
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(I.R.S.
Employer Identification No.)
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1000 Lowe's Blvd., Mooresville,
NC
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28117
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant's
telephone number, including area code
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704-758-1000
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Securities
registered pursuant to Section 12(b) of the Act:
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Title
of each class
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Name
of each exchange on which registered
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Common Stock, $.50 Par
Value
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New York Stock Exchange
(NYSE)
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Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act.
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x
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Yes
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o
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No
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Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Exchange Act.
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o
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Yes
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x
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No
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Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.
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x
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Yes
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o
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No
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Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K (§229.405
of this chapter) is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. x
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of “large accelerated filer," "accelerated filer,” and
"smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check
one):
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Large
accelerated filer x
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Accelerated
filer o
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Non-accelerated
filer o
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Smaller
reporting company o
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Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).
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o
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Yes
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x
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No
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As of
August 1, 2008, the last business day of the Company's most recent second
quarter, the aggregate market value of the registrant’s common stock held by
non-affiliates of the registrant was $22.8 billion based on the closing sale
price as reported on the New York Stock Exchange.
Indicate
the number of shares outstanding of each of the issuer’s classes of common
stock, as of the latest practicable date.
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CLASS
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OUTSTANDING AT MARCH 27,
2009
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Common
Stock, $.50 par value
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1,474,239,704
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DOCUMENTS INCORPORATED BY
REFERENCE
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Document
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Parts Into Which
Incorporated
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Portions
of Lowe’s 2008 Annual Report to Shareholders
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Parts
I, II and IV
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Portions
of the Proxy Statement for Lowe’s 2009 Annual Meeting of
Shareholders
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Part
III
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LOWE’S COMPANIES,
INC.
-
INDEX -
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Page No.
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3
General
Information
Lowe’s
Companies, Inc. and subsidiaries (the Company) is a Fortune 50 company and the
world’s second largest home improvement retailer. As of January 30,
2009, we operated 1,638 stores across 50 states and 11 stores in
Canada. Our 1,649 stores represent approximately 187 million square
feet of retail selling space.
Incorporated
in North Carolina in 1952, Lowe’s Companies, Inc. has been publicly held since
1961. Our common stock is listed on the New York Stock Exchange - ticker symbol
“LOW.”
See Item
6, “Selected Financial Data,” for historical revenues, profits and identifiable
assets.
Who
We Serve
We serve
homeowners, renters and Commercial Business Customers. Homeowners and
renters primarily consist of do-it-yourself (DIY) customers and do-it-for-me
(DIFM) customers who utilize our installed sales programs, as well as others
buying for personal and family use. Commercial Business Customers
include those who work in the construction, repair/remodel, commercial and
residential property management, and business maintenance
professions.
To meet
customers’ varying home improvement needs, we offer a complete line of products
and services for home decorating, maintenance, repair, remodeling, and property
maintenance. We offer home improvement products in the following
categories: appliances, lumber, paint, flooring, building materials, millwork,
lawn & landscape products, fashion plumbing, hardware, lighting, tools,
seasonal living, rough plumbing, outdoor power equipment, cabinets &
countertops, nursery, rough electrical, home environment, home organization, and
windows & walls.
Our Market
Using the
most recent comprehensive data available, which is from 2007, we estimate the
size of the U.S. home improvement market to be approximately $695 billion
annually, comprised of $535 billion of product demand and $160 billion of
installed labor opportunity during that period. Data from a variety of
primary and secondary sources, including trade associations, government
publications, industry participants and other sources was analyzed as the basis
for our estimate. This data captures a wide range of categories
relevant to our business, including major appliances and garden
supplies. Based on the most recently available data we believe that
the size of the U.S. home improvement market decreased by more than 7% in
2008.
The home
improvement retailing business includes many competitors. We compete
with a number of traditional hardware, plumbing, electrical and home supply
retailers, as well as other chains of warehouse home improvement stores and
lumberyards in most of our trade areas. In addition, we compete, with
respect to some of our products, with general merchandise stores, mail order
firms, warehouse clubs, and online retailers. The principal
competitive factors are customer service, location, price, product and brand
selection, and name recognition.
There are
many variables that impact consumer demand for the products and services we
offer. Key indicators we monitor include employment, real disposable
personal income, housing turnover, and home ownership levels. We also
monitor demographic and societal trends that are indicators of home improvement
industry growth.
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§
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Employment
is an indicator of home improvement sales. The forecasted
average unemployment rate of 8.6% for 2009 from the March 2009 Blue
Chip Economic Indicators™ is higher than the 5.7% average seen in
2008 and suggests that Americans will continue to face challenging
employment prospects this year.
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§
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Although
real disposable personal income continues to grow, it is projected to grow
at a slower pace for 2009 than the long-term average annual increase of
3.4%, calculated from 1960 to 2008. Real disposable personal
income growth is forecasted to be 1.7% for calendar 2009, compared with
1.1% for calendar 2008, based on data from the March 2009 Blue Chip
Economic Indicators™.
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§
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Housing
turnover, which peaked in calendar year 2005, continues to slow
according to The National Association of Realtors®. Recent data
suggests that 2009 will remain challenging for housing
turnover.
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§
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According
to the U.S. Census Bureau, while U.S. home ownership levels over the
past year have continued their decline
from
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4
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2007,
they remain above their historical average. Home ownership
provides an established customer base for home maintenance and repair
projects. The vast majority of our customers are
homeowners and they are not willing to let what is often their most
valuable financial asset
deteriorate.
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Currently,
all of these indicators suggest continued weakness in consumer
demand. In this economic environment, we seek to balance our
long-term growth plans with a near-term focus on conserving capital and
maintaining liquidity.
Our
Stores
New
Store Expansion
We
opened 115 new stores in fiscal 2008, including five Canadian stores
located primarily in the Greater Toronto Area. Our 2008 store
openings included three primary prototypes: 117,000-square-foot (117K) and
103,000-square-foot (103K) stores for large markets and a 94,000-square-foot
(94K) store to serve smaller markets. The following table illustrates
our store expansion over the last three years:
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2008
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2007
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2006
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Number
of stores, beginning of fiscal year
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1,534
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1,385
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1,234
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New
stores opened
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115
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149
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151
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Relocated
stores opened
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-
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4
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4
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Stores
relocated
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-
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(4)
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(4)
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Number
of stores, end of fiscal year
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1,649
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1,534
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1,385
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Domestic
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1,638
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1,528
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1,385
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Canadian
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11
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6
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-
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We expect
to open 60 to 70 new stores in fiscal 2009, which includes continued expansion
in Canada as well as our first stores in Monterrey, Mexico. Our
fiscal 2009 store openings will be comprised primarily of 117K, 103K and 94K
stores. As we continue our expansion and strive to maximize our
return on investment, we consider market demographics and land availability,
among other factors, to determine the appropriate prototype for a particular
market. The reduction in store openings in 2009 as compared to 2008
reflects the challenging current economic environment.
Investments
in Existing Stores
During
fiscal 2008, we continued our long history of investing in our existing stores
to enhance the shopping experience for our retail and Commercial Business
Customers, while at the same time rationalizing our capital spending on these
efforts to ensure appropriate return on investment. These efforts
included re-lamping our stores at regular intervals to ensure they remained
bright, adding new displays, improving point-of-sale and directional signage,
adding more product selection, repainting our building exteriors, and
re-striping our parking lots. We categorize our merchandising-related
investments in our stores as resets or remerchandising.
Resets
Resets
are necessary to keep our stores fresh with new and innovative products, updated
fashions and compelling displays. These resets can involve changing
products, displays and vendors. However, they generally do not
require major changes in the store. We conducted hundreds of resets
in fiscal 2008, with each reset typically being performed across most
or all of our stores.
Remerchandising
In fiscal
2008, we completed the remerchandising of 79 of our earlier format stores to
make them more closely resemble our most current store
prototypes. These remerchandising efforts were focused on moving
entire departments, improving adjacencies and enhancing the shopability within
the appliances, cabinets & countertops, flooring, fashion plumbing, paint,
lighting, and home style & organization departments. We also
replaced or refurbished all of our selling centers as well as returns and
customer service areas of these stores. All new interior graphics,
signage, and way-finding materials were also added to increase shopability and
brighten the atmosphere. Finally, self check-out was included as a
part of these remerchandising efforts for locations where it had not previously
been installed. These enhancements enable our stores to deliver
stronger sales by offering our customers a best-in-class shopping
experience.
Serving
Our Customers
Our
vision is to be our customers’ first choice for home improvement. To
achieve this vision, we continue to focus on excellent customer service,
Everyday Low Prices, New Lower Price, and innovative operational, merchandising,
marketing and distribution
5
strategies. We
believe customers’ perceptions of the quality of service determine a retailer’s
success or failure. Therefore, we are always looking for ways to
improve our level of service, optimize store labor and drive in-store process
improvement, build our talent pool, and enhance our sales
culture. The following are several key initiatives we believe will
continue to support our growth and success going forward.
Everyday
Low Prices
Our
customers do not have to wait for a sale to find a great value. We
offer low prices every day. Our promise to customers is that if they
find a lower everyday or advertised price on an identical stock product at a
local competitor, we will not just match that price, but we will beat it by
10%.
Specialty
Sales
Our
Specialty Sales initiatives include Installed Sales, Special Order Sales and
Commercial Business Customer sales. We recognize the
opportunity that our Specialty Sales initiatives represent and the importance of
these businesses to our long-term growth. However, in the current
economic environment demand for Installed Sales and Special Order Sales
offerings has declined due to hesitancy by consumers to make big ticket
discretionary purchases.
Installed
Sales
We offer
installation services in over 40 categories with flooring, millwork and cabinets
& countertops generating the highest sales. Our Installed Sales
model, which includes the separation of selling and administrative tasks, allows
our sales associates to maintain their focus on project selling, while project
managers ensure that the details related to an installation job are efficiently
executed. Installed Sales, which includes both product and labor,
accounted for approximately 6% of total sales in fiscal 2008.
Special
Order Sales
Our
Special Order Sales product offerings provide our customers the opportunity to
select a wider assortment of product options beyond the approximately 40,000 we
carry in our stores. We are making the Special Order Sales process
easier for customers by providing more product displays and electronic product
catalogs in our stores, as well as on Lowes.com. We continue to
enhance integrated design tools and ordering systems storewide in order for
customers to envision projects, as well as to efficiently receive quotations and
complete an order.
Our
Special Order Express initiative is intended to allow for faster and more
efficient delivery of Special Order products to customers, while at the same
time provide the ability to better manage our inventory
investment. Under this approach, certain items that do not have
enough individual store demand to be economically stocked in all stores, but
have sizeable demand across a group of stores, will be kept on hand in our
distribution centers. This allows for fast shipment to our stores, or
in some cases, direct shipment to a customer’s home. Our Special
Order Express initiative allows us to balance quickly satisfying customers’
needs with a desire to minimize our inventory investment. We will
continue to refine and enhance this initiative in fiscal 2009.
Commercial
Business Customers
Growth in
total sales to Commercial Business Customers continued to outpace the company
average in fiscal 2008. Our focus remains being a valued business
partner to our customers who work in the construction, repair/remodel,
commercial and residential property management, and business maintenance
professions. Because we understand the challenges of the current
economic environment and the importance of timeliness to these customers, we
continue to evaluate and tailor our product, service, and competitive offerings
to best meet the needs of these customers. These programs focus on
in-stock and special order merchandise, contractor packs, business credit,
pricing for larger projects, our LowesForPros.com dedicated business website,
and convenience services such as fast ordering and 7-day delivery.
Lowes.com
Lowes.com
seeks to empower consumers by providing a 24/7 shopping experience and helping
reduce the complexity of product decisions and home improvement projects by
providing online product information, customer ratings and reviews, online
buying guides and how-to videos and information. These tools help
consumers make smarter, more informed purchasing decisions and give consumers
confidence as they undertake simple to more complex home improvement
projects. We also enable consumers to choose from a variety of
multichannel fulfillment options including buy online and pick-up in-store,
product delivery and direct shipment to customers’ homes. As our business
evolves we continue to look for opportunities beyond fulfillment to leverage
emerging technologies and online trends to build strong relationships with
consumers that will make us the first choice for their home improvement
needs.
Credit
Financing
We offer
a proprietary credit card for retail customers. In addition, we offer
a Lowe’s Project Card in all stores. Lowe’s Project Card provides a
major project, in-store financing solution to complement our Lowe’s Consumer
Revolving Credit Card.
6
We also
offer proprietary credit programs for Commercial Business
Customers. They include a Lowe’s Business Account, which is ideal for
small- to medium-size businesses and offers minimum monthly payments, and Lowe’s
Accounts Receivable, which is ideal for medium- to large-size businesses that
pay in full each month.
In
addition, we accept Visa®, MasterCard®, Discover® and American Express® credit
cards, as well as debit cards from all major networks.
For
additional detail regarding our credit programs, see Item 7A, “Quantitative and
Qualitative Disclosures About Market Risk”, and Item 8, “Financial Statements
and Supplementary Data.”
Our
Products
Product
Sourcing
We source
our products from over 7,000 merchandise vendors worldwide, with no single
vendor accounting for more than seven percent of total
purchases. Management believes that alternative and competitive
suppliers are available for virtually all our products. Whenever
possible, we purchase directly from manufacturers to provide savings for our
customers and gross margin improvement for Lowe’s.
In
addition to offering a wide selection of national brand name merchandise, we are
committed to building long-term value for Lowe’s through the development of
exclusive, proprietary brands where we focus on delivering the best quality, the
best value and recognizably differentiated products to meet our customers’ needs
and wants.
National
Brand Name Merchandise
In many
product categories, customers look for a brand they know and trust to instill
confidence in their purchase. A typical Lowe's home improvement store
stocks approximately 40,000 items, with hundreds of thousands of items available
through our Special Order Sales system. Each store carries a wide
selection of national brand name merchandise such as KitchenAid®, Samsung,
Whirlpool®, Pella®, Werner®, Kohler®, DeWalt®, John Deere, Troy-Bilt®, Bosch®,
Valspar®, Owens Corning®, Electrolux®, Porter-Cable® and many
more. Our merchandise selection provides the DIY, DIFM and Commercial
Business Customer a one-stop shop for products needed to complete home
improvement, repair, maintenance or construction projects.
Proprietary
Brands
To
further differentiate our offering, we carry many brands that are exclusive to
Lowe’s. These unique brands cover several categories like lighting,
flooring, tools and more, and give our customers great quality and value.
Exclusive brand names such as Premier Living™, Kobalt®, Portfolio®, Harbor
Breeze®, Reliabilt®, Top-Choice® Lumber and Utilitech™ are found only at
Lowe’s.
Distribution
Network
To
efficiently move product from our vendors to our stores and maintain in-stock
levels, we own and operate 14 highly-automated regional distribution centers
(RDCs). The RDCs are strategically located in North Carolina (2),
Georgia, Indiana, Pennsylvania (2), Texas, California, Ohio, Florida,
Connecticut, Wyoming, Illinois and Oregon. On average, each RDC
serves 118 stores. We also utilize a third-party distribution
facility to serve our Canadian stores.
We
operate 15 flatbed distribution centers (FDCs) to distribute merchandise that
requires special handling due to size or type of packaging such as lumber,
boards, panel products, irrigation pipe, vinyl sidings, ladders and building
materials. We own 13 and lease two of these FDCs.
We also
operate four facilities to support our import business, Special Order Sales and
internet fulfillment. We own two and lease two of these
facilities. In addition, we utilize three third-party transload
facilities. These facilities do not hold inventory, but are the first
point of receipt for imported products. The transload facilities sort
and allocate products to RDCs based on individual store demand and
forecasts.
On
average in fiscal 2008, over 72% of the stock merchandise we purchased was
shipped through our distribution network, while the remaining portion was
shipped directly to stores from our vendors.
Building Our Brand
Customers
want Lowe’s to serve as a resource for products and projects to help them
repair, maintain, and enhance their homes and communities. Our
marketing and advertising programs, communicated via television, radio,
newspaper, magazine, direct mail,
7
sponsorships,
internet and in-store programs, all play a critical role in cultivating this
emotional and rational connection with the consumer. Through an extensive
understanding of our customers and their needs and expectations, we deliver a
message that will develop loyal customer relationships and differentiate Lowe’s
from other home improvement sources.
With the
downturn in the economy that accelerated in the second half of fiscal 2008,
consumers became even more value conscious. As a result, we adjusted
our communication to ensure that we presented value to consumers even more
clearly, given our platform of Everyday Low Prices.
New
Lower Price
Our
ongoing New Lower Price initiative, which has been in place for several years,
highlights price reductions on products that consumers want to purchase
everyday. In the current economic environment, we are emphasizing
this initiative to pass along cost savings in order to deliver enhanced value to
our customers.
Media
Investment
A
combination of national broadcast and cable television, supplemented by a number
of national magazines, internet banner advertising and search investment,
provides the platform for building brand awareness. We complement the
national media investment in key markets by local television and radio
schedules.
In the
past, newspaper circulars and ROP (Run of Press) served as the primary
communication vehicle for retail price and item messaging, and regularly
featured Lowe’s breadth of product selection, customer services and Everyday Low
Price positioning. However, given the accelerating erosion in newspaper
subscription bases and readership, we have invested time and money in
alternative retail price and item advertising delivery vehicles. We
are testing new on-line vehicles that deliver to a large audience at a low
cost. We believe this is more efficient and effective advertising in
today’s fast paced and on-line world.
Major
promotional events receive network radio support with a local radio overlay in
key markets. We promote internet access to Lowe’s retail advertising
through the use of online banner and circular advertising. In many cases, we
feature our entire circular on-line within the on-line advertising section of
major market newspapers. This is a location of increasing readership,
as more households read their newspaper on line. The Lowe’s brand has
also been successfully integrated into television programming, including the
Oprah Winfrey show and Rate My Space on HGTV.
Direct
to Consumer Marketing
We
continue to refine programs to respond to the changing needs and lifestyles of
consumers. Through innovative database technology, we create direct mail
campaigns based on precise criteria such as purchase activity, affinity group
subscription(s), household demographics, regional weather patterns, opt-in email
requests, and even consumers who are preparing to move, are in the process of
moving or have recently moved into a new home (“New Movers”).
Despite
the housing slow-down, New Movers continue to spend considerably more on their
previous and new homes than the average homeowner. This past year, we
executed our New Movers program through the U.S. Postal Service’s change of
address program. As the renter population grew in 2008, we quickly
remixed our focus of this New Movers program to be more inclusive of this
customer group, as well as the new opportunities associated with repairing and
renovating foreclosed homes that have been repurchased.
Additionally,
opt-in e-mail programs line up with Lowe’s affinity and education
programs: Lowe’s Creative Ideas for Home and Garden®, Lowe’s Creative
Ideas for Outdoor Living™ and Lowe’s Creative Ideas for Woodworkers™. The
Lowe’s Creative Ideas Magazine subscription base is now as large as many major
magazines and has become a very efficient way to market Lowe’s to a group of our
most valuable customers.
Membership
in the Team Lowe’s Racing Fan Club and participation in the Build-n-Grow
children’s clinics creates another level of engagement with our consumers both
inside Lowe’s stores and beyond our walls. Each of these varying
acquisition and retention programs creates loyal Lowe’s customers.
Multicultural
Marketing
Lowe’s
reaches its diverse communities and customer base in various manners, including
multicultural marketing and outreach to Hispanic, African-American and Asian
customers. For these cultural groups, Lowe’s executes advertising across
many media, including television, radio, print, and on line, in both English and
native languages. Some of the unique efforts include La Cancha Lowe’s,
Lowe’s Hispanic mobile marketing program providing fun to families at key soccer
events across the country; Lowe’s sponsorship of the CIAA’s annual Basketball
Tournament, the nation’s oldest black athletic conference consisting of ten
historically African-American institutions of higher education, that has
blossomed into one of largest collegiate post-season tournaments in the country;
the national Lowe’s sponsorship of the Piolin and Monique radio programs
targeted to Hispanic and African American listeners; and Lowe’s new Chinese,
Korean, and Vietnamese language websites offering a new way for many Asian
consumers to learn more about home improvement.
8
Team
Lowe’s Racing
NASCAR
remains an important part of building our brand. We are the proud sponsor of
Jimmie Johnson, three time NASCAR Sprint® Cup Series champion, the #48 car and
Lowe’s Motor Speedway. We also host hospitality events at various
sites throughout the racing season, leveraging and further building membership
in the Team Lowe’s Racing Fan Club. In 2008, we continued to sponsor
Adrian Fernandez and Fernandez Racing to field the #15 car in the American Le
Mans Series whose fan base is very different than that of
NASCAR. Going to market through both the #48 and #15 teams, helps us
to connect with a broad base of customers through one of America’s favorite
sports – auto racing.
Reaching
Out
We
believe community involvement extends beyond the boundaries of our
stores. In 2008, Lowe's and the Lowe's Charitable and
Educational Foundation contributed more than $26 million to communities in which
we operate across North America. Following are some examples of how
we are partnering with respected nonprofit organizations to make a difference in
our communities:
Lowe’s
Charitable and Educational Foundation
The
Lowe’s Charitable and Educational Foundation (LCEF) was created in 1957 to
assist communities through financial contributions while also encouraging
employees to become involved through volunteerism. In 2008, the
Foundation supported more than 1,400 community and education projects in the
U.S. and Canada with grants totaling more than $15 million. Programs
funded by LCEF include Lowe’s Toolbox for Education®, SkillsUSA and Rebuilding
Together®.
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o
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Toolbox
for Education® has two goals: Get parents involved in their children’s
education and provide grants to parent groups to help improve their
children’s schools. In 2008, Lowe’s Toolbox for Education grant
program contributed more than $4 million to schools throughout all 50
states.
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|
o
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In
2008, LCEF donated $1 million to SkillsUSA, a national nonprofit
organization serving teachers and high school and college students who are
preparing for careers in trade, technical and skilled service
occupations. Additionally in June, Lowe’s helped kick off the
SkillsUSA National Leadership and Skills Conference in Kansas City, Mo.,
which showcases the skills of career and technical education
students.
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|
o
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Lowe’s
also continued its commitment to supporting safe and affordable housing in
2008 with a contribution from LCEF of $1 million to Rebuilding Together,
the nation’s largest all-volunteer home rehabilitation
organization. For the second year, Lowe’s and Rebuilding
Together worked together to support 83 projects that allowed low-income
homeowners to stay warm and safe in their own
homes.
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Habitat
for Humanity
As a home
improvement retailer, Lowe’s helps our customers every day through the trials
and triumphs of home ownership. For more than five years, Lowe’s and
Habitat for Humanity® International have worked together to combat substandard
housing across America. In 2008, Lowe’s contributed $2 million to
help Habitat for Humanity International forward its goal of eliminating poverty
housing, bringing Lowe’s total Habitat donations to more than $18 million since
2003. This support has benefited more than 1,400
families. Additionally since 2004, Lowe’s has underwritten the
Habitat for Humanity Women Build® program, which empowers women to learn
construction skills through How-to Clinics held at Lowe’s stores and to put
those skills to use on build sites nationwide. In 2008, Habitat for
Humanity and Lowe’s launched National Women Build Week, hosting 150 Women Build
projects in all 50 states in the week leading up to Mother’s
Day. Lowe’s pledged $750,000 to the initiative, contributing a $5,000
grant to each National Women Build Week participating affiliate.
Partnering
with Customers
In
addition to contributions made by Lowe’s, we have partnered with our customers
to support organizations such as the American Red Cross and the Muscular
Dystrophy Association (MDA). Over the nearly 10-year span that Lowe’s
has supported the American Red Cross, floods, hurricanes, tornadoes and
wildfires have destroyed property and forever changed lives. A
constant throughout has been the quick action of Lowe’s employees and customers
to help establish and support donation sites, resulting in more than $20 million
in contributions. In addition, for the first time during 2008, Lowe’s
took its grassroots store support for MDA nationwide, making it one of the
largest supporters of MDA’s Shamrocks Against Dystrophy Campaign. In 2008,
Lowe’s stores helped raise more than $2 million during the Shamrocks campaign,
bringing the total raised since the Lowe’s program began in the stores to more
than $4 million.
Partnering
with Employees
Lowe’s
also partners with its employees through Lowe’s Heroes and the Lowe’s Employee
Relief Fund. Lowe’s Heroes employee volunteers tackle local problems
in their communities. In 2008, Lowe’s Heroes responded to needs big
and small from Ontario, Canada, to Orange County, California. The
Lowe’s Employee Relief Fund distributes emergency funds to our employees who
face financial hardships due to natural disasters, house fires or
illness. Making our donations even more powerful, Lowe’s matches
each
9
employee
contribution dollar for dollar. The Lowe’s Employee Relief Fund began
in 1999 and has contributed more than $8 million in assistance to employees and
their families, including more than $2 million in 2008.
Information
Systems
We are
continuously assessing and upgrading our information systems in an effort to
support growth, augment new sales initiatives, control costs and enable better
decision-making. Our systems support all functions in the stores,
distribution facilities, field-based offices, and the customer support centers
in Mooresville, NC and Wilkesboro, NC. Our two state-of-the-art data
centers provide many additional fail-safe features to improve system
availability and mitigate risks associated with unplanned outages.
We have
invested significant resources to safeguard sensitive employee and customer
information. We work closely with industry standards groups to
incorporate security best practices into our technology
environment.
Employees
As of
January 30, 2009, we employed approximately 164,000 full-time and 65,000
part-time employees, none of which are covered by collective bargaining
agreements. Management considers its relations with its employees to
be good.
Available
Information
Our
annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on
Form 8-K and amendments to those reports filed or furnished pursuant to Section
13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, are made
available free of charge through our website at www.Lowes.com, under
the “About Lowe’s” and “Investors” captions, as soon as reasonably practicable
after such documents are electronically filed with, or furnished to, the
Securities and Exchange Commission (SEC). The public may also read
and copy any materials the Company files with the SEC at the SEC’s Public
Reference Room at 100 F Street, NE, Washington, DC 20549. Information
on the operation of the Public Reference Room may be obtained by calling the SEC
at 1-800-SEC-0330. The SEC maintains an Internet site, www.sec.gov,
that contains reports, proxy and information statements, and other information
regarding issuers that file electronically with the SEC.
We are
exposed to a variety of risks and uncertainties. Most are general risks and
uncertainties applicable to all retailers, but some are more particular to
retailers serving the home improvement industry. Our operations
may also be affected by factors that are either not currently known to us or
which we currently consider immaterial to our business. We describe
below some of the specific known factors that could negatively affect our
business, financial condition and results of operations. All
forward-looking statements made by us in this Annual Report to the Securities
and Exchange Commission on Form 10-K, in our Annual Report to Shareholders and
in our subsequently filed quarterly and current reports to the Securities and
Exchange Commission, as well as in our press releases and other public
communications, are qualified by the risks described below.
Our
sales are dependent upon the health and stability of the general
economy.
General
economic factors and other conditions, both domestically and internationally,
may adversely affect the U.S. economy, the global economy and our financial
performance. These include, but are not limited to, periods of flat
economic growth or recession, volatility and/or lack of liquidity from time to
time in U.S. and world financial markets and the consequent reduced availability
and/or higher cost of credit to Lowe’s and its customers, slower rates of growth
in real disposable personal income, higher rates of unemployment, higher
consumer debt levels, increasing fuel and energy costs, inflation or deflation
of commodity prices, natural disasters, acts of terrorism and developments in
the war against terrorism in Asia and the Middle East.
The deep
global recession that officially began in the U.S. in December 2007 and the
financial/credit crisis that has led to the collapse, government bailout or
acquisition of weakened major financial institutions have had and will continue
to have significant adverse effects on our results of
operations. Rising unemployment, reduced consumer confidence and
reduced access to credit have combined to lead to sharply reduced consumer
spending, particularly by our customers on many of the discretionary, big-ticket
items we sell that tend to be larger home improvement project
driven. Consumer confidence and willingness to spend on discretionary
items remains low and our sales and results of operations will continue to be
adversely affected throughout the current fiscal year and, if the recovery from
this deep recessionary period and financial crisis is unusually gradual and
prolonged as some are predicting, potentially beyond.
Adverse
changes in economic factors specific to the home improvement industry may
negatively impact the rate of growth of our total sales and comparable store
sales.
Sales of
many of our product categories and services are driven by housing turnover and
activity level of home improvement projects. Sharply declining home
prices that are expected to continue to decline in 2009, increasing mortgage
delinquency and foreclosure rates, reduction in the availability of mortgage
financing, rising interest rates on variable rate mortgages, and significantly
lower housing
10
turnover,
have limited and may continue to limit consumers’ discretionary spending,
particularly on discretionary items, and affect their confidence level leading
to further reduced spending on home improvement projects. The impact
of these economic factors specific to the home improvement industry is
exacerbated by rising unemployment in a weak job market.
Unseasonable
weather conditions and adverse weather events can negatively affect our total
sales and comparable store sales.
If
weather conditions are uncharacteristic of the time of year during any season,
they can hurt our sales by making it difficult to sell seasonal
merchandise. Although the impact of unseasonable weather
conditions is mitigated somewhat by the broad geographic dispersion of our
stores, they continue to be a significant risk to the overall performance of our
business, particularly when they occur across a broad region of the
U.S. Adverse weather events, such as a prolonged and widespread
drought, can hurt our sales of particular products as well.
Our
store expansion and relocation strategy depends upon our ability to successfully
open and operate new stores each year.
Our
growth in total sales depends not only on a recovery from the current
recessionary period but also to a substantial degree on successfully and
cost-effectively implementing our ongoing expansion program. We
scaled back our expansion plans significantly last year and plan to scale back
even further in the current fiscal year in response to the weak
environment. As we expand further, we must adapt our
merchandising, marketing and distribution initiatives to new markets both
domestically and as we continue to expand into Canada and
Mexico. We also plan to increase the number of our stores in
markets in which we currently operate. Our ability to open additional
stores depends, in large measure, upon our ability to locate and acquire new
store sites on acceptable terms. Local land use and other
regulations restricting the construction of buildings in the formats with which
we operate may affect our ability to open new stores in some
markets. As we develop more new stores in metropolitan markets, we
may incur increased costs to remediate environmental pollution on some of the
sites we are redeveloping that was caused by previous owners of those
sites. Our ability to continue to expand our operations depends also
on our ability to attract and retain a large and growing number of qualified
employees. If we are unable to open new stores at the rate we
currently plan and staff them with qualified employees, the growth in our sales
and our competitive position could be adversely affected.
If
we fail to hire, train and retain qualified managers, sales associates and other
employees we could lose sales to our competitors.
Customers’
perceptions of the quality of service provided by employees can determine any
retailer’s success or failure. If we fail to attract, train and
retain qualified managers and sales associates our financial performance could
be adversely impacted. Consumers shopping for goods and services for
home improvement projects expect to have sales associates serving them who are
knowledgeable about product categories located throughout our
stores.
Excessive
turnover, which has historically been high among employees in entry-level or
part-time positions, increases the risk that sales associates will not have the
training and experience needed to provide competitive, high quality customer
service.
Our
success in serving the needs of Commercial Business Customers is dependent upon
our ability to attract and retain qualified commercial sales
specialists.
Commercial
Business Customers in the home improvement industry require that we have
well-trained commercial sales specialists at our project desks. By
doing so, we can better serve the needs of this customer on a consistent
basis. Our commercial sales specialists have a great depth of
knowledge about the products needed by Commercial Business
Customers. If we fail to staff our project desks with experienced and
knowledgeable employees, we run the risk that we will lose Commercial Business
Customers.
We
have many competitors, who, if we fail to execute our merchandising, marketing
and distribution strategies effectively, could take sales and market share from
us.
We
operate in a highly competitive market for home improvement products and
services and have numerous large and small, direct and indirect
competitors. The competitive environment in which we operate is
particularly challenging during recessionary periods with heavy promotions,
particularly of discretionary items, and competitor closings. The principal
competitive factors in our industry include location of stores, price and
quality of merchandise, in-stock consistency, merchandise assortment and
presentation, and customer service. Our failure to respond
effectively to competitive pressures and changes in the retail markets could
affect our financial performance. Moreover, changes in the
promotional pricing and other practices of our competitors, including the
effects of competitor liquidation activities, may impact our expected
results.
An
unusual number of product liability or breach of warranty claims for defective
products could expose us to expensive claims and damage our standing with
customers.
We are
exposed to product liability and product warranty claims relating to the
products we sell that could adversely affect our financial condition, results of
operations and cash flows. Because we do not have direct control over
the quality of products manufactured or supplied to us by our vendors and
because we self-insure for such product liability and warranty claims, we are
exposed to risks relating to the quality of such products. Product
liability claims can be expensive to defend and can divert the attention of
management and other personnel for significant periods, regardless of the
ultimate outcome. Claims of this nature could also have a negative impact on
customer confidence in the products we stock and in our reputation.
11
Our
financial performance could suffer if we fail to properly maintain our critical
information systems or if those systems are seriously disrupted.
An
important part of our efforts to achieve efficiencies, cost reductions, and
sales and cash flow growth is the identification and implementation of
improvements to our management information systems to improve operations such as
inventory replenishment systems, merchandise ordering, transportation, and
receipt processing. Our financial performance could be adversely
affected if our management information systems are seriously disrupted or we are
unable to improve, upgrade, maintain, and expand our systems.
If
the domestic or international supply chain for our products is disrupted, our
sales and gross margin would be adversely impacted.
We source
the approximately 40,000 products we stock and sell from approximately 7,000
domestic and international vendors. We source many of those products
directly from foreign manufacturers. Political or financial
instability among suppliers, trade restrictions, tariffs, currency exchange
rates and transport capacity and costs are beyond our control and could
negatively impact our business if they seriously disrupted the movement of
products through our supply chain. The current global
recession and credit crisis are adversely affecting the operations and financial
stability of some of our vendors by reducing their sales and restricting their
access to capital. We may have to replace some of our smaller
vendors, and some of our vendors may not be able to fulfill their financial
obligations to us or to do so in a timely manner.
Our
inability to effectively manage our relationships with selected suppliers of
brand name products could negatively impact our ability to differentiate
ourselves from competitors.
Part of
our expansion strategy includes continued differentiation from
competitors. To better distinguish our product offering, we form
strategic relationships with selected suppliers to market and develop products
under a variety of recognized and respected brand names. The
inability to effectively and efficiently manage the relationships with these
suppliers could negatively impact our business plan and financial
results.
None.
At
January 30, 2009 we operated 1,649 stores in the U.S. and Canada with a total of
187 million square feet of selling space. Of the total stores operating at
January 30, 2009, approximately 88% 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. We also own and operate 14 RDCs and 13 FDCs for lumber and building
commodities. We lease and operate two additional FDCs. We operate one
third-party distribution facility to serve our Canadian
stores. We also operate four facilities to support our import
business, Special Order Sales and internet fulfillment. We own two
and lease two of these facilities. In addition, we utilize three
third-party transload facilities, which do not hold inventory but are the first
point of receipt for imported products. We own one data center and
lease one data center that serve as hubs for our computer processing, critical
data storage and information technology systems. We own our executive
offices, which are located in Mooresville, North Carolina. We also
own and maintain offices in Wilkes County, North Carolina, and lease and
maintain offices in Toronto, Canada and Monterrey, Mexico.
We are a
defendant in legal proceedings considered to be in the normal course of
business, none of which, individually or collectively, is considered
material.
None.
12
The
following is a list of names and ages of all of the executive officers of the
registrant indicating all positions and offices with the registrant held by each
such person and each person's principal occupations or employment during the
past five years.
|
Name
|
Age
|
Title
|
|
Robert
A. Niblock
|
46
|
Chairman
of the Board and Chief Executive Officer since 2005;
President, 2003 - 2006.
|
|
Maureen
K. Ausura
|
53
|
Senior
Vice President, Human Resources since 2005; Corporate Vice President of
Human Resources, Archer Daniels Midland Company, 2000 -
2005.
|
|
Gregory
M. Bridgeford
|
54
|
Executive
Vice President, Business Development since 2004; Senior Vice President,
Business Development, 1999 - 2004.
|
|
Michael
K. Brown
|
45
|
Executive
Vice President, Store Operations since December 2006; Senior Vice
President, Store Operations, 2001 - 2006.
|
|
Charles
W. (Nick) Canter, Jr.
|
58
|
Executive
Vice President, Merchandising since December 2006; Executive Vice
President, Store Operations, 2005 - 2006; Senior Vice President, Store
Operations, 1999 - 2005.
|
|
Marshall
A. Croom
|
48
|
Senior
Vice President and Chief Risk Officer since
2009; Senior Vice President, Merchandising and Store Support 2006 - 2009;
Senior Vice President, Finance 2003 - 2006.
|
|
Matthew
V. Hollifield
|
42
|
Senior
Vice President and Chief Accounting Officer since 2005; Vice President,
Corporate Accounts Payable 2002 - 2005.
|
|
Robert
F. Hull, Jr.
|
44
|
Executive
Vice President and Chief Financial Officer since 2004; Senior Vice
President and Chief Financial Officer, 2003 - 2004.
|
|
Gaither M. Keener,
Jr.
|
59
|
Senior
Vice President, General Counsel, Secretary and Chief Compliance Officer
since 2006; Vice President, Deputy General Counsel, 2005 - 2006; Vice
President, Associate General Counsel, 2003 - 2005.
|
|
Joseph
M. Mabry, Jr.
|
46
|
Executive
Vice President, Logistics and Distribution since 2004; Senior Vice
President, Distribution, 2003 - 2004.
|
|
N.
Brian Peace
|
43
|
Senior
Vice President, Corporate Affairs since 2006; Vice President, Corporate
Communications, 1999 - 2006.
|
|
Larry
D. Stone
|
57
|
President
and Chief Operating Officer since December 2006; Senior Executive Vice
President Merchandising/Marketing, 2005 - 2006; Senior Executive Vice
President Store Operations, 2003 -2005.
|
|
Steven
M. Stone
|
47
|
Senior
Vice President and Chief Information Officer since
2003.
|
13
Lowe's
common stock is traded on the New York Stock Exchange (NYSE). The ticker symbol
for Lowe's is “LOW”. As of March 27, 2009, there were 1,474,239,704
holders of record of Lowe's common stock. The table, "Quarterly Stock Price
Range and Cash Dividend Payment", on page 44 of the 2008 Lowe’s Annual Report to
Shareholders for the fiscal year ended January 30, 2009 sets forth, for the
periods indicated, the high and low sales prices per share of the common stock
as reported by the NYSE Composite Tape and the dividends per share declared on
the common stock during such periods.
As of
January 30, 2009, the total remaining authorization through fiscal 2009 under
the share repurchase program was $2.2 billion.
See
"Selected Financial Data" on page 43 of the Lowe’s 2008 Annual Report to
Shareholders.
See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" on pages 17 through 25 and "Disclosure Regarding Forward-Looking
Statements" on page 26 of Lowe’s 2008 Annual Report to
Shareholders.
See
"Quantitative and Qualitative Disclosures About Market Risk" on page 25 of
Lowe’s 2008 Annual Report to Shareholders.
See
"Report of Independent Registered Public Accounting Firm" of Deloitte &
Touche LLP on page 27, the financial statements and notes thereto on pages 28
through 42, and the "Selected Quarterly Data" on page 43 of Lowe’s 2008 Annual
Report to Shareholders.
None.
The
Company's management, with the participation of the Chief Executive Officer and
Chief Financial Officer, has evaluated the effectiveness of the Company’s
“disclosure controls and procedures”, (as such term is defined in
Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as
amended, (the Exchange Act)). Based upon their evaluation, the Chief Executive
Officer and Chief Financial Officer concluded that, as of the end of the period
covered by this report, the Company’s disclosure controls and procedures were
effective for the purpose of ensuring that the information required to be
disclosed in the reports that the Company files or submits under the Exchange
Act with the Securities and Exchange Commission (the SEC) (1) is recorded,
processed, summarized and reported within the time periods specified in the
SEC’s rules and forms, and (2) is accumulated and communicated to the
Company’s management, including its principal executive and principal financial
officers, as appropriate to allow timely decisions regarding required
disclosure.
In
addition, no change in the Company’s internal control over financial reporting
occurred during the fiscal fourth quarter ended January 30, 2009 that has
materially affected, or is reasonably likely to materially affect, the Company’s
internal control over financial reporting.
Management’s
report on internal control over financial reporting (as such term is defined in
Rule 13a-15(f) under the Exchange Act) and the report of Deloitte & Touche
LLP, the Company’s independent registered public accounting firm, are included
in Lowe’s 2008 Annual Report to Shareholders on pages 26 and 27 under the
headings, “Management’s Report on Internal Control Over Financial Reporting” and
“Report of Independent Registered Public Accounting Firm,” respectively, and are
incorporated herein by reference.
None.
14
Information
required by this item is furnished by incorporation by reference to all
information under the captions entitled, "Election of Directors," "Information
Concerning the Nominees," "Information Concerning Continuing Directors,"
"Information about the Board of Directors and Committees of the Board," and
"Section 16(a) Beneficial Ownership Reporting Compliance" included in the
definitive Proxy Statement which will be filed pursuant to regulation 14A, with
the SEC within 120 days after the fiscal year ended January 30, 2009 (the Proxy
Statement). The information required by this item with respect to our
executive officers appears in Part I of this Annual Report on Form 10-K under
the caption, "Executive Officers of the Registrant. "
All
employees of the Company, including its Chief Executive Officer, Chief Financial
Officer and Chief Accounting Officer are required to abide by the Lowe's
Companies, Inc. and Subsidiaries Code of Business Conduct and Ethics (the Code).
The Code is designed to ensure that the Company's business is conducted in a
legal and ethical manner. The Code covers all areas of professional conduct
including compliance with laws and regulations, conflicts of interest, fair
dealing among customers and suppliers, corporate opportunity, confidential
information, insider trading, employee relations and accounting complaints. A
full text of the Code can be found at www.Lowes.com, under the "About Lowe’s,"
“Investors” and "Code of Ethics" captions. You can also obtain a copy of the
complete Code by contacting Shareholder Services at 1-888-345-6937.
We will
disclose information pertaining to amendments or waivers to provisions of our
Code that apply to our principal executive officer, principal financial officer,
principal accounting officer or persons performing similar functions and that
relate to the elements of our Code enumerated in the SEC rules and regulations
by posting this information on our website at www.Lowes.com. The information on
our website is not a part of this Annual Report and is not incorporated by
reference in this report or any of our other filings with the SEC.
Information
required by this item is furnished by incorporation by reference to all
information under the captions entitled, "Executive Officer Compensation" and
"Information about the Board of Directors and Committees of the Board –
Compensation of Directors" included in the Proxy Statement.
Information
required by this item is furnished by incorporation by reference to all
information under the captions entitled, "Security Ownership of Certain
Beneficial Owners and Management" and “Equity Compensation Plan Information”
included in the Proxy Statement.
Information
required by this item is furnished by incorporation by reference to all
information under the captions entitled, "Related-Party Transactions" and
"Information about the Board of Directors and Committees of the Board - Director
Independence" included
in the Proxy Statement.
Information
required by this item is furnished by incorporation by reference to all
information under the caption entitled, "Audit Matters - Fees Paid to the
Independent Registered Public Accounting Firm" included in the Proxy
Statement.
15
a) 1.
Financial
Statements
See the
following items and page numbers appearing in Lowe’s 2008 Annual Report to
Shareholders:
|
Page(s)
|
|||
|
Reports
of Independent Registered Public Accounting Firm
|
27
|
||
|
Consolidated
Statements of Earnings for each of the three fiscal years in the
period ended January 30, 2009
|
28
|
||
|
Consolidated
Balance Sheets at January 30, 2009 and February 1, 2008
|
29
|
||
|
Consolidated
Statements of Shareholders' Equity for each of the three fiscal years
in the period ended January 30, 2009
|
30
|
||
|
Consolidated
Statements of Cash Flows for each of the three fiscal years in the
period ended January 30, 2009
|
31
|
||
|
Notes
to Consolidated Financial Statements for each of the three fiscal
years in the period ended January 30, 2009
|
32-42
|
2.
Financial
Statement Schedule
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the
Board of Directors and Shareholders of Lowe’s Companies, Inc.
Mooresville,
North Carolina
We have
audited the accompanying consolidated financial statements of Lowe's Companies,
Inc. and subsidiaries (the "Company") as of January 30, 2009 and
February 1, 2008, and for each of the three fiscal years in the period ended
January 30, 2009, and the Company's internal control over financial reporting as
of January 30, 2009, and have issued our reports thereon dated March
31, 2009; such consolidated financial statements and reports are
included in the Company's 2008 Annual Report to Shareholders and are
incorporated herein by reference. Our audits also included the consolidated
financial statement schedule of the Company listed in Item 15. This consolidated
financial statement schedule is the responsibility of the Company's management.
Our responsibility is to express an opinion based on our audits. In our opinion,
such consolidated financial statement schedule, when considered in relation to
the basic consolidated financial statements taken as a whole, presents fairly,
in all material respects, the information set forth therein.
/s/
Deloitte & Touche LLP
Charlotte,
North Carolina
March
31, 2009
16
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
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 | ||||||||||
|
Self-insurance
liabilities
|
671 | 958 | (878) |
(d)
|
751 | ||||||||||
|
Store
closing lease liability
|
11 | 1 | (5) |
(e)
|
7 | ||||||||||
|
Deferred
tax valuation allowance
|
22 | 20 |
(f)
|
- | 42 | ||||||||||
|
February
1, 2008:
|
|||||||||||||||
|
Reserve
for loss on obsolete inventory
|
$ | 66 | $ | 1 |
(a)
|
$ | - | $ | 67 | ||||||
|
Reserve
for inventory shrinkage
|
129 | 428 | (420) |
(b)
|
137 | ||||||||||
|
Reserve
for sales returns
|
55 | - | (4) |
(c)
|
51 | ||||||||||
|
Self-insurance
liabilities
|
650 | 820 | (799) |
(d)
|
671 | ||||||||||
|
Store
closing lease liability
|
19 | 4 | (12) |
(e)
|
11 | ||||||||||
|
Deferred
tax valuation allowance
|
4 | 18 |
(f)
|
- | 22 | ||||||||||
|
February
2, 2007:
|
|||||||||||||||
|
Reserve
for loss on obsolete inventory
|
$ | 104 | $ | - | $ | (38) |
(a)
|
$ | 66 | ||||||
|
Reserve
for inventory shrinkage
|
113 | 455 | (439) |
(b)
|
129 | ||||||||||
|
Reserve
for sales returns
|
54 | 1 |
(c)
|
- | 55 | ||||||||||
|
Self-insurance
liabilities
|
571 | 674 | (595) |
(d)
|
650 | ||||||||||
|
Store
closing lease liability
|
23 | 2 | (6) |
(e)
|
19 | ||||||||||
|
Deferred
tax valuation allowance
|
- | 4 |
(f)
|
- | 4 | ||||||||||
(a):
Represents 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 increase/(decrease) in the required reserve based on the Company’s
evaluation of anticipated merchandise returns.
(d):
Represents claim payments for self-insured claims.
(e):
Represents lease payments and adjustments, net of sublease income.
(f):
Represents an increase in the required reserve based on the Company’s evaluation
of deferred tax assets.
17
|
3.
|
Exhibits
|
|
(3.1)
|
Restated
and Amended Charter (filed as Exhibit 3.1 to the Company's Form 10-Q dated
September 3, 2008 and incorporated by reference
herein).
|
|
(3.2)
|
Bylaws,
as amended and restated (filed as Exhibit 3.1 to the Company's Form 8-K
dated August 28, 2008 and incorporated by reference
herein).
|
|
(4.1)
|
Indenture
dated April 15, 1992 between the Company and The Bank of New York, as
successor trustee (filed as Exhibit 4.1 to the Company's Registration
Statement on Form S-3 (No. 33-47269) and incorporated by reference
herein).
|
|
(4.2)
|
Amended
and Restated Indenture, dated as of December 1, 1995, between the Company
and The Bank of New York, as successor trustee (filed as Exhibit 4.1 on
Form 8-K dated December 15, 1995, and incorporated by reference
herein).
|
|
(4.3)
|
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 (filed as Exhibit 10.13 to the
Company's Annual Report on Form 10-K dated April 19, 1999,
and incorporated by reference herein).
|
|
(4.4)
|
Second
Supplemental Indenture, dated as of October 19, 2001, to the Amended and
Restated Indenture dated as of December 1, 1995, between
the Company and The Bank of New York, as successor trustee (filed as
Exhibit 4.1 on Form 8-K dated October 25, 2001, and
incorporated by reference herein).
|
|
(4.5)
|
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, (filed as Exhibit 4.5 to the Company’s
Annual Report on Form 10-K dated April 3, 2007, and incorporated by
reference herein) 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.
|
|
(4.6)
|
Fourth
Supplemental Indenture, dated as of October 10, 2006, between Lowe’s
Companies, Inc. and The Bank of New York, as trustee (filed as Exhibit 4.5
to the Company’s Registration Statement on Form S-3 (No. 333-137750) and
incorporated by reference herein), including as an exhibit thereto a form
of the Company’s 5.4% Senior Notes maturing in October 2016 and the
Company’s 5.8% Senior Notes maturing in October 2036.
|
|
(4.7)
|
Fifth
Supplemental Indenture, dated as of September 11, 2007, between Lowe’s
Companies, Inc. and The Bank of New York, as trustee (filed as Exhibit 4.1
to the Company’s Form 8-K dated September 6, 2007 and incorporated by
reference herein), including as an exhibit thereto a form of the Company’s
5.6% Senior Notes maturing in September 2012, the Company’s 6.1% Senior
Notes maturing in September 2017, and the Company’s 6.65% Senior Notes
maturing in September 2037.
|
|
(4.8)
|
Indenture
between the Company and The Bank of New York, dated as of February 16,
2001 (filed as Exhibit 4.1 to the Company's Registration Statement on
Form S-3 (No. 333-60434), and incorporated by reference
herein).
|
|
(4.9)
|
Form
of the Company's 6 7/8 % Debenture due February 20, 2028 (filed as Exhibit
4.2 on Form 8-K dated February 20, 1998, and incorporated by
reference herein).
|
|
(4.10)
|
Form
of the Company's 6 1/2 % Debenture due March 15, 2029 (filed as Exhibit
10.6 to the Company's Annual Report on Form 10-K for the year ended
January 29, 1999, and incorporated by reference
herein).
|
|
(4.11)
|
Form
of the Company's 8 1/4 % Notes due June 1, 2010 (filed as Exhibit 4.2 on
Form 8-K dated
|
18
|
|
June
8, 2000, and incorporated by reference herein).
|
|
(4.12)
|
Amended
and Restated Credit Agreement dated as of June 15, 2007 (filed as Exhbit
10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended
August 3, 2007 and incorporated by reference herein).
|
|
*(10.1)
|
Lowe's
Companies, Inc. Directors' Deferred Compensation Plan, effective July 1,
1994 (filed as Exhibit 10.1 to the Company's Quarterly Report on Form
10-Q for the quarter ended October 31, 2008 and incorporated by
reference herein).
|
|
*(10.2)
|
Lowe's
Companies, Inc., 1994 Incentive Plan (filed on the Company's Form S-8
dated July 8, 1994 (No. 33-54499) and incorporated by reference
herein).
|
|
*(10.3)
|
Amendments
to the Lowe's Companies, Inc. 1994 Incentive Plan dated December 9, 1994
(filed as Exhibit 10.9 to the Company's Annual Report on Form 10-K for the
year ended January 29, 1999, and incorporated by reference
herein).
|
|
*(10.4)
|
Amendments
to the Lowe's Companies, Inc. 1994 Incentive Plan dated September 17, 1998
(filed as Exhibit 10.10 to the Company's Annual Report on Form 10-K
for the year ended January 29, 1999, and incorporated by reference
herein).
|
|
*(10.5)
|
Amendments
to the Lowe's Companies, Inc. 1994 Incentive Plan dated December 4, 1998
(filed as Exhibit 10.11 to the Company's Annual Report on Form 10-K
for the year ended January 29, 1999, and incorporated by reference
herein).
|
|
*(10.6)
|
Lowe's
Companies, Inc. 1997 Incentive Plan (filed on the Company's Form S-8 dated
August 29, 1997 (No. 333-34631) and incorporated by reference
herein).
|
|
*(10.7)
|
Amendments
to the Lowe's Companies, Inc. 1997 Incentive Plan dated January 25,
1998 (filed as Exhibit 10.6 to the Company's Annual Report on Form
10-K for the year ended January 29, 1999, and incorporated
by reference herein).
|
|
*(10.8)
|
Amendments
to the Lowe's Companies, Inc. 1997 Incentive Plan dated September 17, 1998
(filed as Exhibit 10.17 to the Company's Annual Report on Form 10-K
for the year ended January 29, 1999, and incorporated by reference
herein).
|
|
*(10.9)
|
Lowe's/Eagle
Stock Option Plan (filed as Exhibit 4.2 on the Company's Form S-8 filed
April 7, 1999 (No. 333-75793) and incorporated by reference
herein).
|
|
*(10.10)
|
Lowe's
Companies, Inc. Employee Stock Purchase Plan - Stock Options for Everyone,
as amended and restated (filed herewith).
|
|
*(10.11)
|
Lowe's
Companies, Inc. 2001 Incentive Plan (filed on the Company's Form S-8 dated
November 15, 2001 (No. 333-73408) and incorporated by reference
herein).
|
|
*(10.12)
|
Lowe's
Companies, Inc. Benefit Restoration Plan as amended and restated as of
January 1, 2008 (filed as Exhibit 10.2 to the Company’s Form 10-Q dated
December 12, 2007, and incorporated by reference
herein).
|
|
*(10.13)
|
Form
of the Company's Management Continuity Agreement for Tier I Senior
Officers (filed as Exhibit 10.1 to the Company's Quarterly Report on
Form 10-Q for the quarter ended August 1, 2008, and incorporated by
reference herein).
|
|
*(10.14)
|
Form
of the Company's Management Continuity Agreement for Tier II Senior
Officers (filed as Exhibit 10.2 to the Company's Form 10-Q for
the quarter ended August 1, 2008, and incorporated by reference
herein).
|
|
*(10.15)
|
Lowe’s
Companies, Inc. Cash Deferral Plan (filed as Exhibit 10.1 to the Company’s
Form 10-Q
|
19
|
|
dated
June 4, 2004 and incorporated by reference herein).
|
|
*(10.16)
|
Amendment No.
1 to the Lowe’s Companies, Inc. Cash Deferral Plan (filed as Exhibit 10.1
to the Company’s Form 10-Q dated December 12, 2007 and incorporated by
reference herein).
|
|
*(10.17)
|
Lowe’s
Companies, Inc. Amended and Restated Directors’ Stock Option and Deferred
Stock Unit Plan (filed as Exhibit 10.1 to the Company’s Form 8-K
dated May 27, 2005 and incorporated by reference
herein).
|
|
*(10.18)
|
Form
of Lowe’s Companies, Inc. Deferred Stock Unit Agreement for Directors
(filed as Exhibit 10.2 to the Company’s Form 8-K dated May 27, 2005 and
incorporated by reference herein).
|
|
*(10.19)
|
Form
of Lowe’s Companies, Inc. Restricted Stock Award Agreement (filed as
Exhibit 10.1 to the Company’s Form 10-Q dated September 1, 2005 and
incorporated by reference herein).
|
|
*(10.20)
|
Lowe's
Companies, Inc. 2006 Annual Incentive Plan (filed as Exhibit 10.1 to the
Company’s Form 10-Q dated September 7, 2006 and incorporated by reference
herein).
|
|
*(10.21)
|
Lowe's
Companies, Inc. 2006 Long Term Incentive Plan (filed as Exhibit 10.2 to
the Company’s Form 10-Q dated September 7, 2006 and incorporated by
reference herein).
|
|
*(10.22)
|
Amendment
No. 2 to the Lowe’s Companies, Inc. Deferred Compensation Program (filed
herewith).
|
|
*(10.23)
|
Amendment
No. 1 to the Lowe’s Companies, Inc. 2006 Long Term Incentive Plan (filed
herewith).
|
|
(12.1)
|
Statement
Re Computation of Ratio of Earnings to Fixed Charges
|
|
(13)
|
Portions
of the 2008 Lowe’s Annual Report to Shareholders for the fiscal year ended
January 30, 2009
|
|
(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
|
|
*
Management contract or compensatory plan or arrangement required to be
filed as an exhibit to this form.
|
20
Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
|
LOWE’S
COMPANIES, INC.
|
||
|
(Registrant)
|
||
|
March
31, 2009
|
By:
/s/ Robert A. Niblock
|
|
|
Date
|
Robert
A. Niblock
|
|
|
Chairman
of the Board and Chief Executive Officer
|
||
|
March
31, 2009
|
By:
/s/ Robert F. Hull, Jr.
|
|
|
Date
|
Robert
F. Hull, Jr.
|
|
|
Executive
Vice President and Chief Financial Officer
|
||
|
March
31, 2009
|
By:
/s/ Matthew V. Hollifield
|
|
|
Date
|
Matthew
V. Hollifield
|
|
|
Senior
Vice President and Chief Accounting
Officer
|
21
Pursuant
to the requirements of the Securities Exchange Act of 1934, this report on Form
10-K has been signed below by the following persons on behalf of the Registrant
and in the capacities and on the dates indicated. Each of the directors of the
Registrant whose signature appears below hereby appoints Robert F. Hull, Jr.,
Matthew V. Hollifield and Gaither M. Keener, Jr., and each of them severally, as
his or her attorney-in-fact to sign in his or her name and behalf, in any and
all capacities stated below, and to file with the Securities and Exchange
Commission any and all amendments to this report on Form 10-K, making such
changes in this report on Form 10-K as appropriate, and generally to do all such
things in their behalf in their capacities as directors and/or officers to
enable the Registrant to comply with the provisions of the Securities Exchange
Act of 1934, and all requirements of the Securities and Exchange
Commission.
|
/s/
Robert A. Niblock
|
Chairman
of the Board of Directors, Chief Executive Officer and
Director
|
March
31, 2009
|
||
|
Robert
A. Niblock
|
Date
|
|||
|
/s/
David W. Bernauer
|
Director
|
March
31, 2009
|
||
|
David
W. Bernauer
|
Date
|
|||
|
/s/
Leonard L. Berry
|
Director
|
March
31, 2009
|
||
|
Leonard
L. Berry
|
Date
|
|||
|
/s/
Peter C. Browning
|
Director
|
March
31, 2009
|
||
|
Peter
C. Browning
|
Date
|
|||
|
/s/
Dawn E. Hudson
|
Director
|
March
31, 2009
|
||
|
Dawn
E. Hudson
|
Date
|
|||
|
/s/
Robert A. Ingram
|
Director
|
March
31, 2009
|
||
|
Robert
A. Ingram
|
Date
|
|||
|
/s/
Robert L. Johnson
|
Director
|
March
31, 2009
|
||
|
Robert
L. Johnson
|
Date
|
|||
|
/s/
Marshall O. Larsen
|
Director
|
March
31, 2009
|
||
|
Marshall
O. Larsen
|
Date
|
|||
|
/s/
Richard K. Lochridge
|
Director
|
March
31, 2009
|
||
|
Richard
K. Lochridge
|
Date
|
|||
|
/s/
Stephen F. Page
|
Director
|
March
31, 2009
|
||
|
Stephen
F. Page
|
Date
|
|||
|
/s/
O. Temple
Sloan,
Jr.
|
Director
|
March
31, 2009
|
||
|
O.
Temple Sloan, Jr.
|
Date
|
22