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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended October 29, 2021
or 
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______ to  ______
Commission File Number 1-7898
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LOWE’S COMPANIES, INC.
(Exact name of registrant as specified in its charter)
North Carolina56-0578072
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
1000 Lowes Blvd., Mooresville, North Carolina
28117
(Address of principal executive offices)(Zip Code)
Registrant’s telephone number, including area code:
(704) 758-1000
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $0.50 per shareLOWNew York Stock Exchange

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.  Yes   No

Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes   No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company.  See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  No

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
CLASSOUTSTANDING AT 11/22/2021
Common Stock, $0.50 par value673,747,189



LOWE’S COMPANIES, INC.
- TABLE OF CONTENTS -
Page No.
Item 1.
Item 2.
Item 3.
Item 4.
Item 1.
Item 1A.
Item 2.
Item 6.
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i

FORWARD-LOOKING STATEMENTS

This Form 10-Q includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Statements including words such as “believe”, “expect”, “anticipate”, “plan”, “desire”, “project”, “estimate”, “intend”, “will”, “should”, “could”, “would”, “may”, “strategy”, “potential”, “opportunity”, “outlook”, “scenario”, “guidance”, and similar expressions are forward-looking statements. Forward-looking statements involve, among other things, expectations, projections, and assumptions about future financial and operating results, objectives, business outlook, priorities, sales growth, shareholder value, capital expenditures, cash flows, the housing market, the home improvement industry, demand for products and services, share repurchases, Lowe’s strategic initiatives, including those relating to acquisitions and dispositions and the impact of such transactions on our strategic and operational plans and financial results. Such statements involve risks and uncertainties and we can give no assurance that they will prove to be correct. Actual results may differ materially from those expressed or implied in such statements.

A wide variety of potential risks, uncertainties, and other factors could materially affect our ability to achieve the results either expressed or implied by these forward-looking statements including, but not limited to, changes in general economic conditions, such as the rate of unemployment, interest rate and currency fluctuations, fuel and other energy costs, slower growth in personal income, changes in consumer spending, changes in the rate of housing turnover, the availability of consumer credit and of mortgage financing, changes in commodity prices, trade policy changes or additional tariffs, outbreaks of public health crises, such as the COVID-19 pandemic, availability and cost of goods from suppliers, and other factors that can negatively affect our customers.

Investors and others should carefully consider the foregoing factors and other uncertainties, risks and potential events including, but not limited to, those described in “Item 1A - Risk Factors” in our most recent Annual Report on Form 10-K and as may be updated from time to time in Item 1A in our quarterly reports on Form 10-Q or other subsequent filings with the SEC, and in “Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies and Estimates” of this report on Form 10-Q. All such forward-looking statements speak only as of the date they are made, and we do not undertake any obligation to update these statements other than as required by law.

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ii

Part I - FINANCIAL INFORMATION
Item 1. Financial Statements
Lowe’s Companies, Inc.
Consolidated Statements of Earnings (Unaudited)
In Millions, Except Per Share and Percentage Data
 Three Months EndedNine Months Ended
 October 29, 2021October 30, 2020October 29, 2021October 30, 2020
Current EarningsAmount% SalesAmount% SalesAmount% SalesAmount% Sales
Net sales$22,918 100.00 %$22,309 100.00 %$74,911 100.00 %$69,286 100.00 %
Cost of sales15,331 66.90 15,009 67.28 49,882 66.59 46,170 66.64 
Gross margin7,587 33.10 7,300 32.72 25,029 33.41 23,116 33.36 
Expenses:
Selling, general and administrative4,373 19.08 4,770 21.38 13,559 18.10 13,985 20.18 
Depreciation and amortization425 1.85 355 1.59 1,226 1.64 1,008 1.46 
Operating income2,789 12.17 2,175 9.75 10,244 13.67 8,123 11.72 
Interest – net223 0.97 221 0.99 650 0.86 644 0.93 
Loss on extinguishment of debt  1,060 4.75   1,060 1.53 
Pre-tax earnings2,566 11.20 894 4.01 9,594 12.81 6,419 9.26 
Income tax provision 670 2.93 202 0.91 2,359 3.15 1,562 2.25 
Net earnings$1,896 8.27 %$692 3.10 %$7,235 9.66 %$4,857 7.01 %
Weighted average common shares outstanding basic
690 752 704 753 
Basic earnings per common share
$2.74 $0.92 $10.23 $6.42 
Weighted average common shares outstanding diluted
692 754 706 754 
Diluted earnings per common share
$2.73 $0.91 $10.21 $6.41 
See accompanying notes to the consolidated financial statements (unaudited).



Lowe’s Companies, Inc.
Consolidated Statements of Comprehensive Income (Unaudited)
In Millions, Except Percentage Data
 Three Months EndedNine Months Ended
 October 29, 2021October 30, 2020October 29, 2021October 30, 2020
 Amount% SalesAmount% SalesAmount% SalesAmount% Sales
Net earnings$1,896 8.27 %$692 3.10 %$7,235 9.66 %$4,857 7.01 %
Foreign currency translation adjustments net of tax
19 0.08 18 0.08 78 0.10 (27)(0.04)
Cash flow hedges net of tax
41 0.18 24 0.11 56 0.07 (84)(0.12)
Other
(1) (2)(0.01)(4) 2  
Other comprehensive income/(loss)59 0.26 40 0.18 130 0.17 (109)(0.16)
Comprehensive income$1,955 8.53 %$732 3.28 %$7,365 9.83 %$4,748 6.85 %
See accompanying notes to the consolidated financial statements (unaudited).
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1

Lowe’s Companies, Inc.
Consolidated Balance Sheets (Unaudited)
In Millions, Except Par Value Data
October 29,
2021
October 30,
2020
January 29,
2021
Assets
Current assets:
Cash and cash equivalents$6,121 $8,249 $4,690 
Short-term investments 552 1,852 506 
Merchandise inventory – net16,685 15,712 16,193 
Other current assets1,491 1,103 937 
Total current assets24,849 26,916 22,326 
Property, less accumulated depreciation 18,925 18,798 19,155 
Operating lease right-of-use assets4,161 3,823 3,832 
Long-term investments 213 202 200 
Deferred income taxes – net220 241 340 
Other assets1,032 900 882 
Total assets$49,400 $50,880 $46,735 
Liabilities and shareholders' (deficit)/equity
Current liabilities:
Short-term borrowings$1,000 $ $ 
Current maturities of long-term debt1,352 609 1,112 
Current operating lease liabilities573 530 541 
Accounts payable11,334 12,759 10,884 
Accrued compensation and employee benefits 1,353 1,117 1,350 
Deferred revenue1,954 1,614 1,608 
Other current liabilities3,268 2,935 3,235 
Total current liabilities20,834 19,564 18,730 
Long-term debt, excluding current maturities 23,881 21,185 20,668 
Noncurrent operating lease liabilities4,136 3,907 3,890 
Deferred revenue – Lowe's protection plans1,119 1,007 1,019 
Other liabilities 1,006 1,144 991 
Total liabilities50,976 46,807 45,298 
Shareholders' (deficit)/equity:
Preferred stock, $5 par value: Authorized – 5.0 million shares; Issued and
   outstanding – none
   
Common stock, $0.50 par value: Authorized – 5.6 billion shares; Issued and
   outstanding – 686 million, 752 million, and 731 million shares, respectively
343 376 366 
Capital in excess of par value  90 
(Accumulated deficit)/retained earnings(1,913)3,942 1,117 
Accumulated other comprehensive loss(6)(245)(136)
Total shareholders' (deficit)/equity(1,576)4,073 1,437 
Total liabilities and shareholders' (deficit)/equity$49,400 $50,880 $46,735 
See accompanying notes to the consolidated financial statements (unaudited).
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Lowe’s Companies, Inc.
Consolidated Statements of Shareholders’ (Deficit)/Equity (Unaudited)
In Millions
Three Months Ended October 29, 2021
Common StockCapital in Excess
of Par Value
Accumulated DeficitAccumulated Other
Comprehensive Loss
Total
SharesAmount
Balance July 30, 2021699 $350 $ $(460)$(65)$(175)
Net earnings— — — 1,896 — 1,896 
Other comprehensive income— — — — 59 59 
Cash dividends declared, $0.80 per share
— — — (551)— (551)
Share-based payment expense — — 50 — — 50 
Repurchases of common stock (13)(7)(59)(2,798)— (2,864)
Issuance of common stock under share-based payment plans— — 9 — — 9 
Balance October 29, 2021686 $343 $ $(1,913)$(6)$(1,576)
Nine Months Ended October 29, 2021
Common StockCapital in Excess
of Par Value
Retained Earnings/ (Accumulated Deficit)Accumulated Other
Comprehensive Loss
Total
SharesAmount
Balance January 29, 2021731 $366 $90 $1,117 $(136)$1,437 
Net earnings— — — 7,235 — 7,235 
Other comprehensive income— — — — 130 130 
Cash dividends declared, $2.20 per share
— — — (1,544)— (1,544)
Share-based payment expense — — 163 — — 163 
Repurchases of common stock (46)(24)(324)(8,721)— (9,069)
Issuance of common stock under share-based payment plans1 1 71 — — 72 
Balance October 29, 2021686 $343 $ $(1,913)$(6)$(1,576)
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Three Months Ended October 30, 2020
Common StockCapital in Excess
of Par Value
Retained EarningsAccumulated Other
Comprehensive Loss
Total
SharesAmount
Balance July 31, 2020756 $378 $129 $4,134 $(285)$4,356 
Net earnings— — — 692 — 692 
Other comprehensive income— — — — 40 40 
Cash dividends declared, $0.60 per share
— — — (452)— (452)
Share-based payment expense— — 39 — — 39 
Repurchases of common stock(4)(2)(187)(432)— (621)
Issuance of common stock under share-based payment plans  19 — — 19 
Balance October 30, 2020752 $376 $ $3,942 $(245)$4,073 
Nine Months Ended October 30, 2020
Common StockCapital in Excess
of Par Value
Retained EarningsAccumulated Other
Comprehensive Loss
Total
SharesAmount
Balance January 31, 2020763 $381 $ $1,727 $(136)$1,972 
Net earnings— — — 4,857 — 4,857 
Other comprehensive loss— — — — (109)(109)
Cash dividends declared, $1.70 per share
— — — (1,284)— (1,284)
Share-based payment expense— — 103 — — 103 
Repurchases of common stock(13)(6)(203)(1,358)— (1,567)
Issuance of common stock under share-based payment plans2 1 100 — — 101 
Balance October 30, 2020752 $376 $ $3,942 $(245)$4,073 
See accompanying notes to the consolidated financial statements (unaudited).

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Lowe’s Companies, Inc.
Consolidated Statements of Cash Flows (Unaudited)
In Millions
Nine Months Ended
October 29, 2021October 30, 2020
Cash flows from operating activities:
Net earnings $7,235 $4,857 
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization1,388 1,152 
Noncash lease expense383 356 
Deferred income taxes96 5 
Loss on property and other assets – net25 114 
Loss on extinguishment of debt 1,060 
Share-based payment expense169 107 
Changes in operating assets and liabilities:
Merchandise inventory – net(446)(2,545)
Other operating assets(130)147 
Accounts payable 436 5,099 
Deferred revenue444 508 
Other operating liabilities(421)625 
Net cash provided by operating activities9,179 11,485 
Cash flows from investing activities:
Purchases of investments(2,325)(2,548)
Proceeds from sale/maturity of investments2,261 1,032 
Capital expenditures(1,256)(1,172)
Proceeds from sale of property and other long-term assets94 60 
Other – net(134)(24)
Net cash used in investing activities(1,360)(2,652)
Cash flows from financing activities:
Net change in commercial paper (941)
Net proceeds from issuance of debt4,972 7,929 
Repayment of debt(595)(5,582)
Proceeds from issuance of common stock under share-based payment plans72 102 
Cash dividend payments(1,433)(1,252)
Repurchases of common stock(8,999)(1,528)
Other – net(408)(32)
Net cash used in financing activities(6,391)(1,304)
Effect of exchange rate changes on cash3 4 
Net increase in cash and cash equivalents1,431 7,533 
Cash and cash equivalents, beginning of period4,690 716 
Cash and cash equivalents, end of period$6,121 $8,249 
See accompanying notes to the consolidated financial statements (unaudited).
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Lowe’s Companies, Inc.
Notes to Consolidated Financial Statements (Unaudited)

Note 1: Summary of Significant Accounting Policies

Basis of Presentation

The accompanying condensed consolidated financial statements (unaudited) and notes to the condensed consolidated financial statements (unaudited) are presented in accordance with the rules and regulations of the Securities and Exchange Commission and do not include all the disclosures normally required in annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). The condensed consolidated financial statements (unaudited), in the opinion of management, contain all normal recurring adjustments necessary to present fairly the financial position as of October 29, 2021, and October 30, 2020, and the results of operations, comprehensive income, and shareholders’ (deficit)/equity for the three and nine months ended October 29, 2021, and October 30, 2020, and cash flows for the nine months ended October 29, 2021, and October 30, 2020. The January 29, 2021 consolidated balance sheet was derived from the audited financial statements.

These interim condensed consolidated financial statements (unaudited) should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Lowe’s Companies, Inc. (the Company) Annual Report on Form 10-K for the fiscal year ended January 29, 2021 (the Annual Report). The financial results for the interim periods may not be indicative of the financial results for the entire fiscal year.

Reclassifications

Certain prior period amounts have been reclassified to conform to current period presentation as follows: the reclassification of excess property from other assets to property, less accumulated depreciation on the consolidated balance sheet as of October 30, 2020, and the separate disclosure of changes in deferred revenue within operating activities on the consolidated statement of cash flows for the nine months ended October 30, 2020.

Accounting Pronouncements Not Yet Adopted

In March 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2020-04, Reference Rate Reform (Topic 848): Facilitation of Effects of Reference Rate Reform on Financial Reporting. The ASU, and subsequent clarifications, provide practical expedients for contract modification accounting related to the transition away from the London Interbank Offered Rate (LIBOR) and other interbank offering rates to alternative reference rates. The expedients are applicable to contract modifications made and hedging relationships entered into on or before December 31, 2022. The Company intends to use the expedients where needed for reference rate transition. The Company continues to evaluate this standard update and does not currently expect a material impact to the Company’s financial statements or disclosures.

Recent accounting pronouncements pending adoption not discussed in this Form 10-Q or in the 2020 Form 10-K are either not applicable to the Company or are not expected to have a material impact on the Company.

Note 2: Revenue - Net sales consists primarily of revenue, net of sales tax, associated with contracts with customers for the sale of goods and services in amounts that reflect consideration the Company is entitled to in exchange for those goods and services.

The following table presents the Company’s sources of revenue:
(In millions)Three Months EndedNine Months Ended
October 29, 2021October 30, 2020October 29, 2021October 30, 2020
Products $21,755 $21,342 $71,655 $66,724 
Services597 552 1,805 1,459 
Other566 415 1,451 1,103 
Net sales$22,918 $22,309 $74,911 $69,286 

A provision for anticipated merchandise returns is provided through a reduction of sales and cost of sales in the period that the related sales are recorded.  The merchandise return reserve is presented on a gross basis, with a separate asset and liability
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included in the consolidated balance sheets. The balances and classification within the consolidated balance sheets for anticipated sales returns and the associated right of return assets are as follows:
(In millions)ClassificationOctober 29,
2021
October 30,
2020
January 29,
2021
Anticipated sales returnsOther current liabilities$315 $281 $252 
Right of return assetsOther current assets191 180 164 

Deferred revenue - retail and stored-value cards
Retail deferred revenue consists of amounts received for which customers have not yet taken possession of the merchandise or for which installation has not yet been completed. The majority of revenue for goods and services is recognized in the quarter following revenue deferral. Stored-value cards deferred revenue includes outstanding stored-value cards such as gift cards and returned merchandise credits that have not yet been redeemed. Deferred revenue for retail and stored-value cards are as follows:
(In millions)October 29,
2021
October 30,
2020
January 29,
2021
Retail deferred revenue$1,446 $1,175 $1,046 
Stored-value cards deferred revenue508 439 562 
Deferred revenue$1,954 $1,614 $1,608 

Deferred revenue - Lowe’s protection plans
The Company defers revenues for its separately-priced long-term extended protection plan contracts (Lowe’s protection plans) and recognizes revenue on a straight-line basis over the respective contract term. Expenses for claims are recognized in cost of sales when incurred.

(In millions)October 29,
2021
October 30,
2020
January 29,
2021
Deferred revenue - Lowe’s protection plans$1,119 $1,007 $1,019 

Three Months EndedNine Months Ended
(In millions)October 29, 2021October 30, 2020October 29, 2021October 30, 2020
Lowe’s protection plans deferred revenue recognized into sales$123 $106 $359 $314 
Lowe’s protection plans claim expenses45 43 142 121 

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Disaggregation of Revenues

The following table presents the Company’s net sales disaggregated by merchandise division:
Three Months EndedNine Months Ended
October 29, 2021October 30, 2020October 29, 2021October 30, 2020
(In millions)Net Sales%Net Sales%Net Sales%Net Sales%
Home Décor 1
$8,585 37.5 %$8,168 36.6 %$26,057 34.8 %$23,846 34.4 %
Building Products 2
7,569 33.0 7,607 34.1 24,111 32.2 %21,559 31.1 %
Hardlines 3
6,093 26.6 6,029 27.0 22,961 30.6 %22,512 32.5 %
Other671 2.9 505 2.3 1,782 2.4 %1,369 2.0 %
Total$22,918 100.0 %$22,309 100.0 %$74,911 100.0 %$69,286 100.0 %
Note: Merchandise division net sales for the prior period have been reclassified to conform to the current period presentation.
1    Home Décor includes the following product categories: Appliances, Décor, Flooring, Kitchens & Bath, and Paint
2    Building Products includes the following product categories: Building Materials, Electrical, Lighting, Lumber, Millwork, and Rough Plumbing
3    Hardlines includes the following product categories: Hardware, Lawn & Garden, Seasonal & Outdoor Living, and Tools

The following table presents the Company’s net sales disaggregated by geographical area:
(In millions)Three Months EndedNine Months Ended
October 29, 2021October 30, 2020October 29, 2021October 30, 2020
United States$21,504 $20,832 $70,092 $65,153 
Canada1,414 1,477 4,819 4,133 
Net Sales$22,918 $22,309 $74,911 $69,286 

Note 3: Investments

Available-for-sale debt securities are recorded at fair value, and unrealized gains and losses are recorded, net of tax, as a component of accumulated other comprehensive loss. Net unrealized gains on available-for-sale debt securities as of October 29, 2021, October 30, 2020, and January 29, 2021, were not material. Refer to Note 4 for the fair value of the Company’s available-for-sale debt securities by investment type.

Held to maturity securities are U.S. Treasury bills which the Company has the ability and intent to hold until maturity and are stated at amortized cost. Gross unrecognized holding gains and losses on the Company’s held-to-maturity securities were not material for the period ended October 30, 2020.

The Company’s investments are as follows:
(In millions)October 29, 2021October 30, 2020January 29, 2021
Short-term investments:
Available-for-sale debt securities$552 $702 $506 
Held-to-maturity securities 1,150  
Total short-term investments$552 $1,852 $506 
Long-term investments:
Available-for-sale debt securities$213 $202 $200 
Total long-term investments$213 $202 $200 

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Restricted Investments

Short-term and long-term investments include restricted balances pledged as collateral primarily for the Lowe’s protection plans program and are as follows:
(In millions)October 29, 2021October 30, 2020January 29, 2021
Short-term restricted investments$552 $402 $506 
Long-term restricted investments213 202 200