Lowe's (LOW) 10-K risk factor changes: FY2018 vs FY2017

For more information about our risk management framework, which is administered by our Chief Financial Officer and includes developing risk mitigation controls and procedures for the material risks we identify, see the description included in the definitive Proxy Statement for our [removed: 2017] [added: 2018] annual meeting of shareholders (as defined in Item 10 of Part III of this Annual Report) under [removed: “Board’s] [added: “Information About the Board of Directors and Committees of the Board - Board Meetings, Committees of the Board and Board Leadership Structure - Board’s] Role in the Risk Management Process.”

The success of our strategic initiatives to adapt our business concept to our customers’ changing shopping habits and demands and changing demographics [removed: will require us to deliver large, complex programs requiring more integrated planning, initiative prioritization and program sequencing.]

Our business and our reputation could be adversely affected by [added: cybersecurity incidents and] the failure to protect [removed: sensitive] customer, employee, vendor or Company information or to comply with evolving regulations relating to our obligation to protect our systems, assets and such [removed: information from the threat of cyber-attacks.][added: information.]

Cyber-attacks and tactics designed to gain access to and exploit sensitive information by breaching mission critical systems of large organizations are constantly evolving, and high profile [removed: electronic] security breaches leading to unauthorized release of sensitive customer information have occurred in recent years with increasing frequency at a number of major U.S. companies, including several large retailers, despite widespread recognition of the cyber-attack threat and improved data protection methods.

Additionally, we use third-party service providers for [added: certain] services, such as authentication, content delivery, back-office support and other [removed: functions.][added: functions, and we provide such third-party service providers with personal information necessary for the services concerned.]

Despite our continued vigilance and investment in information security, we or our third-party service providers [removed: may be unable] [added: cannot guarantee that we or they are able] to adequately anticipate or prevent a breach in our or their systems that results in the unauthorized [added: access to, destruction, misuse or] release of [added: personal information or other] sensitive data.

Should [removed: this] [added: these events] occur, [removed: it] [added: the unauthorized disclosure, loss or unavailability of data and disruption to our business] may have a material adverse effect on our reputation, drive [added: existing and potential] customers away and lead to financial losses from remedial actions, or potential liability, including possible [added: litigation and] punitive damages.

A security breach resulting in the unauthorized release of [removed: sensitive] data from our or our third-party service providers’ information systems could also materially increase the costs we already incur to protect against such [removed: risks.][added: risks and require dedication of substantial resources to manage the aftermath of such a breach.]

[removed: In addition, as] [added: As] the regulatory environment relating to [removed: retailers] [added: retailers’] and other companies’ obligation to protect [removed: such sensitive data] [added: personal information] becomes stricter, a material failure on our part to comply with applicable regulations could subject us to [removed: fines or] [added: fines,] other regulatory sanctions [added: or government investigation,] and potentially to [removed: lawsuits.][added: lawsuits brought by private individuals, regulators or states’ attorney general.]

They also subject us to potential fraud by criminal elements seeking to discover and take advantage of security vulnerabilities [added: that may exist in some of these payment systems.]

If we fail to hire, train, manage and retain qualified sales associates and specialists with expanded skill sets or corporate support staff with the capabilities of delivering on strategic objectives, we could lose sales to our [removed: competitors] [added: competitors,] and our labor costs, resulting from operations or the execution of corporate strategies, could be negatively affected.

Strategic transactions, such as our acquisition of [removed: RONA,] [added: RONA and Maintenance Supply Headquarters,] involve risks, and we may not realize the expected benefits because of numerous uncertainties and risks.

We regularly consider and enter into strategic transactions, including mergers, acquisitions, joint ventures, investments and other growth, market and geographic expansion strategies, with the expectation that these transactions will result in increases in [added: sales, cost savings, synergies and other various benefits.]

[removed: Our shareholders] [added: We] may [removed: react unfavorably to our strategic transactions, and, if we do] not realize any anticipated benefits from such transactions, we may be exposed to additional liabilities of any acquired business or joint venture and we may be exposed to litigation in connection with the strategic transaction.

We face growing competition from online and [removed: multi-channel] [added: omni-channel] retailers who have a similar product or service offering.

If these vendors or service providers discontinue operations or are unable to perform as expected or if we fail to manage them properly [removed: and] [added: or] we are unable to replace them quickly, our business could be adversely affected, at least temporarily, until we are able to replace [removed: them and potentially, in some cases, permanently.][added: them.]

We source, stock and sell products from domestic and international [removed: vendors] [added: vendors,] and their ability to reliably and efficiently fulfill our orders is critical to our business success.

We source a large number of our products from foreign [removed: manufacturers] [added: manufacturers,] with China [removed: continuing to be] [added: being] the dominant import source.

Financial instability among key vendors, political instability and labor unrest in source countries or elsewhere in our supply chain, changes in the [added: total] costs [removed: of commodities] in our supply chain (fuel, labor and currency exchange rates), port labor disputes and security, the outbreak of pandemics, weather-related events, natural disasters, work stoppages, shipping capacity [removed: restrains,] [added: restraints,] changes in trade policy, retaliatory trade restrictions imposed by either the United States or a major source country, tariffs or duties, fluctuations in currency exchange rates and transport availability, 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 or increased their costs.

We use third-party installers to provide installation services to our customers, and, as the general contractor, we are subject to regulatory requirements and [removed: risks,] [added: risks] applicable to general contractors, including the management of the permitting, licensing and quality of our third-party installers.

[removed: An important part of our] [added: Our] efforts to provide an omni-channel experience for our [removed: customers,] [added: customers] include investing in, maintaining and making ongoing improvements of our existing management information systems that support operations, such as sales, inventory replenishment, merchandise ordering, project design and execution, transportation, receipt processing and fulfillment.

Our systems are subject to damage or interruption as a result of catastrophic events, power outages, viruses, malicious attacks, [added: and] telecommunications failures, and [added: as a result] we may incur significant expense, data loss as well as an erosion of customer confidence.

will require us to deliver large, complex programs requiring more integrated planning, initiative prioritization and program sequencing.

It can be difficult to preempt or detect ever-evolving forms of cyber-attacks.

If a ransomware attack occurs, it is possible that we could be prevented from accessing our own data.

Our or our service providers’ information security may also be compromised because of human errors, including by employees, or system errors.

Our and our service providers’ systems are additionally vulnerable to a number of other causes, such as power outages, computer viruses, technology system failures or catastrophic events.

In the event that our systems are breached or damaged for any reason, we may also suffer loss or unavailability of data and interruptions to our business operations while such breach or damage is being remedied.

Data privacy and cybersecurity laws in the United States and internationally are constantly changing, and in the United States alone, we may be subject to regulation at both the federal and state level.

In order to maintain our compliance with such laws as they come to fruition, we may sustain increased costs in order to continually evaluate our policies and processes and adapt to new requirements that are or become applicable to us.

We could be adversely affected by the failure to adequately protect and maintain our intellectual property rights or claims by third parties that we infringe their intellectual property rights.

Our proprietary rights in our trademarks, trade names, service marks, domain names, copyrights, patents, trade secrets and other intellectual property rights are valuable assets of our business.

We rely on a combination of trademark law, patent law, copyright law, trade secret protections and contractual arrangements, such as nondisclosure and confidentiality agreements, to protect our proprietary rights.

Maintenance and, when necessary, enforcement of our intellectual property rights require expenditure of financial and managerial resources, and despite our efforts, we may not always be able to effectively protect all of such rights.

We may not be able to prevent or even discover every instance of unauthorized third party uses of our intellectual property or dilution of our brand names, such as when a third party uses trademarks that are identical or similar to our own.

Additionally, our trade secrets are vulnerable to public disclosure by our own employees or as a result of a breach of or damage to our systems, which could result in theft of our proprietary property.

We may also be subject to intellectual property infringement lawsuits, brought by third parties against us claiming that our operations, products or services infringe third party rights (whether meritorious or not), including patent and trademark rights, which can be time consuming and costly to defend or settle and may cause significant diversion of management attention and result in substantial monetary damages, injunctive orders against us, unfavorable royalty-bearing licensing agreements or bad publicity.

If we do not successfully manage the transition associated with the retirement of our Chief Executive Officer and the appointment of a new Chief Executive Officer, it could be viewed negatively by our customers and shareholders and could have an adverse impact on our business.

On March 26, 2018, we announced that Robert A.

Niblock plans to retire as Chairman of the Board, President and Chief Executive Officer after a 25-year career with the Company.

The board of directors has initiated a search for his successor, and in the interim Mr. Niblock will remain in his current role.

Such leadership transitions can be inherently difficult to manage, and

an inadequate transition may cause disruption to our business, including to our relationships with our customers, suppliers, vendors and employees.

It may also make it more difficult to hire and retain key employees.

Our shareholders may react unfavorably to our strategic transactions.

The current United States administration has signaled the possibility of major changes in certain tax and trade policies, tariffs and other regulations affecting trade between the United States and other countries, such as the imposition of additional tariffs or duties on imported products and the exit or renegotiation of certain trade agreements, including the North American Free Trade Act and the rules of the World Trade Organization.

While it is not possible to predict whether or when any such changes will occur or what form they may take, because we source a large percentage of our merchandise from outside the United States, major changes in tax or trade policies, tariffs or trade relations could adversely affect our business, results of operations, effective income tax rate, liquidity and net income.

In addition, other countries may change their business and trade policies in anticipation of or in response to increased import tariffs and other changes in United States trade policy and regulations.

that may exist in some of these payment systems.

sales, cost savings, synergies and other various benefits.

The results of the November 2016 U.S. elections may signal a change in trade policy between the United States and other countries.

Because we source a large percentage of our merchandise from outside the United States, major changes in tax policy or trade relations, such as the disallowance of tax deductions for imported

merchandise or the imposition of additional tariffs or duties on imported products, could adversely affect our business, results of operations, effective income tax rate, liquidity and net income.

The following discussion and analysis summarizes the significant factors affecting our consolidated operating results, financial condition, liquidity and capital resources during the three-year period ended February [removed: 3, 2017] [added: 2, 2018] (our fiscal years [removed: 2016, 2015] [added: 2017, 2016] and [removed: 2014).][added: 2015).]

Fiscal year 2016 contains 53 weeks of operating results compared to fiscal years [removed: 2015] [added: 2017] and [removed: 2014] [added: 2015] which contain 52 weeks.

Unless otherwise noted, all references herein for the years [removed: 2016, 2015] [added: 2017, 2016] and [removed: 2014] [added: 2015] represent the fiscal years ended February [added: 2, 2018, February] 3, [removed: 2017, January 29, 2016] [added: 2017] and January [removed: 30, 2015,] [added: 29, 2016,] respectively.

Net sales for [removed: 2016] [added: 2017] were [removed: $65.0] [added: $68.6] billion, a [removed: 10.1%] [added: 5.5%] increase over fiscal year [removed: 2015.][added: 2016.]

The increase in total sales was driven [added: primarily] by an increase in comparable sales, the [removed: acquisition] [added: addition] of RONA in May [added: of] 2016, [added: new stores, and] the [added: acquisition of Maintenance Supply Headquarters in June 2017, partially offset by the] 53rd [removed: week, and new stores.][added: week impacts in the prior year.]

Comparable sales increased [removed: 4.2%,] [added: 4.0%,] driven by a comparable average ticket increase of [removed: 2.5%] [added: 4.1%] and a comparable transaction [removed: increase] [added: decrease] of [removed: 1.6%.][added: 0.1%.]

Net earnings increased [removed: 21.5%] [added: 11.5%] to [removed: $3.1] [added: $3.4] billion.

Diluted earnings per common share increased [removed: 27.1%] [added: 17.9%] in fiscal year [removed: 2016] [added: 2017] to [removed: $3.47] [added: $4.09] from [removed: $2.73] [added: $3.47] in [removed: 2015.][added: 2016.]

Adjusting [removed: 2016] [added: 2017] and [removed: 2015] [added: 2016] amounts for certain significant discrete items not originally contemplated in the business outlooks for those respective years, adjusted diluted earnings per common share increased [removed: 21.3%] [added: 10.0%] in fiscal year [removed: 2016] [added: 2017] to [removed: $3.99] [added: $4.39] from [removed: $3.29] [added: $3.99] in [removed: 2015] [added: 2016] (see discussion on non-GAAP financial measures beginning on page 22).

For [removed: 2016,] [added: 2017,] cash flows from operating activities were approximately [removed: $5.6] [added: $5.1] billion, with [removed: $1.2] [added: $1.1] billion used for capital expenditures.

Continuing to deliver on our commitment to return excess cash to shareholders, the Company repurchased [removed: 46.7] [added: 39.1] million shares of stock through the share repurchase program for [removed: $3.5] [added: $3.1] billion and paid [removed: $1.1] [added: $1.3] billion in dividends during the year.

We [removed: are] [added: made further progress on advancing our customer service capabilities through our omni-channel assets,] empowering customers across the most relevant moments of their project [removed: journey, and we are advancing our customer service experience capabilities through our omni-channel assets.][added: journey.]

| | | | | | Basis Point Increase / (Decrease) in Percentage of Net Sales from Prior [removed: Year] [added: Year1] | | | Percentage Increase / (Decrease) in Dollar Amounts from Prior [removed: Year] [added: Year1] | |

| Net sales | 100.00% | | 100.00% | | N/A | | | [removed: 5.1] [added: 5.5] | % |

| Selling, general and administrative | [removed: 23.88] [added: 22.40] | | [removed: 23.60] [added: 23.27] | | [removed: 28] [added: (87] | [added: )] | | [removed: 6.3] [added: 1.6] | |

| Interest - net | [removed: 0.93] [added: 0.92] | | [removed: 0.92] [added: 0.99] | | [removed: 1] [added: (7] | [added: )] | | [removed: 7.0] [added: (2.0] | [added: )] |

| [removed: Pre-tax earnings] | [removed: 7.48] [added: Pre-Tax Earnings] | | [removed: 7.61] | [added: Tax] | [removed: (13] | [removed: )] | [added: Net Earnings] | [removed: 3.3] | | [added: | Pre-Tax Earnings | | | Tax | | | Net Earnings | | | | Pre-Tax Earnings | | | Tax | | | Net Earnings | | |]

| Other Metrics | [removed: 2016] [added: 2017] | | | | [removed: 2015] [added: 2016] | | | | [removed: 2014] [added: 2015] | | |

| Comparable sales increase 2 | [removed: 4.2] [added: 4.0] | | % | | [removed: 4.8] [added: 4.2] | | % | | [removed: 4.3] [added: 4.8] | | % |

| Total customer transactions (in millions) 1 | [removed: 945] [added: 953] | | | | [removed: 878] [added: 945] | | | | [removed: 857] [added: 878] | | |

| Average ticket 3 | $ | [removed: 68.82] [added: 72.00] | | | $ | [removed: 67.26] [added: 68.83] | | | $ | [removed: 65.61] [added: 67.26] | |

| Number of stores 4 | [removed: 2,129] [added: 2,152] | | | | [removed: 1,857] [added: 2,129] | | | | [removed: 1,840] [added: 1,857] | | |

| Sales floor square feet (in millions) | [removed: 213] [added: 215] | | | | [removed: 202] [added: 213] | | | | [removed: 201] [added: 202] | | |

| Average store size selling square feet (in thousands) 5 | 100 | | | | [removed: 109] [added: 100] | | | | 109 | | |

| Return on average assets 6 | [removed: 8.9] [added: 9.5] | | % | | [removed: 7.8] [added: 8.9] | | % | | [removed: 8.2] [added: 7.8] | | % |

| Return on average shareholders’ equity 7 | [removed: 44.4] [added: 59.2] | | % | | [removed: 28.8] [added: 44.4] | | % | | [removed: 24.4] [added: 28.8] | | % |

| Return on invested capital 8 | [removed: 15.8] [added: 18.8] | | % | | [removed: 14.1] [added: 15.8] | | % | | [removed: 13.9] [added: 14.1] | | % |

| 1 | The fiscal year ended February 3, 2017 had 53 weeks. The fiscal years ended [added: February 2, 2018 and] January 29, 2016 [removed: and January 30, 2015] had 52 weeks. |

| 2 | A comparable location is defined as a location that has been open longer than 13 months. A location that is identified for relocation is no longer considered comparable [removed: one] [added: in the] month [removed: prior to] [added: of] its relocation. The relocated location must then remain open longer than 13 months to be considered comparable. A location we have decided to close is no longer considered comparable as of the beginning of the month in which we announce its closing. Acquired locations are included in the comparable sales calculation beginning in the first full month following the first anniversary of the date of the acquisition. Comparable sales include online sales, which [removed: did not have a meaningful impact for the periods presented.] [added: positively impacted fiscal 2017 by approximately 120 basis points.] The comparable store sales calculation for [added: fiscal] 2016 included in the preceding table was calculated using sales for a comparable 53-week period. |

Return on Invested Capital (ROIC) is [added: calculated using] a non-GAAP financial measure.

We define ROIC as trailing four quarters’ net operating profit after tax [added: (NOPAT)] divided by the average of ending debt and equity for the last five quarters.

The calculation of ROIC, together with a reconciliation [removed: to the calculation] of [removed: return on average debt and equity,] [added: NOPAT to net earnings,] the most comparable GAAP financial measure, is as follows:

| (In millions, except percentage data) | [removed: 2016] [added: 2017] | | | | [removed: 2015] [added: 2016] | | | | [removed: 2014] [added: 2015] | | |

| Net earnings | $ | [removed: 3,093] [added: 3,447] | | | $ | [removed: 2,546] [added: 3,093] | | | $ | [removed: 2,698] [added: 2,546] | |

| Interest expense - net | [removed: 645] [added: 633] | | | | [removed: 552] [added: 645] | | | | [removed: 516] [added: 552] | | |

| Provision for income taxes | [removed: 2,108] [added: 2,042] | | | | [removed: 1,873] [added: 2,108] | | | | [removed: 1,578] [added: 1,873] | | |

| Income tax adjustment 1 | [removed: 2,370] [added: 2,450] | | | | [removed: 2,058] [added: 2,370] | | | | [removed: 1,769] [added: 2,058] | | |

| Net operating profit after tax | $ | [removed: 3,476] [added: 4,136] | | | $ | [removed: 2,913] [added: 3,476] | | | $ | [removed: 3,024] [added: 2,913] | |

| Average debt and equity 2 | $ | [removed: 21,958] [added: 21,999] | | | $ | [removed: 20,693] [added: 21,958] | | | $ | [removed: 21,744] [added: 20,693] | |

| Return on invested capital | [removed: 15.8] [added: 18.8] | | % | | [removed: 14.1] [added: 15.8] | | % | | [removed: 13.9] [added: 14.1] | | % |

RONA, new stores, and Maintenance Supply Headquarters contributed 2.2%, 0.7% and 0.3%, respectively, to the sales growth for 2017.

The 53rd week in 2016 and resulting week shift negatively impacted 2017 sales growth by 1.3%.

During the year, we focused on investing in capabilities to support the DIY, DIFM, and Pro customers’ needs and expanding our home improvement reach.

We leveraged our investments in Lowes.com to provide an upgraded online shopping experience and advanced our online platform by making it easier for customers to engage with our in-home Project Specialists and request services online.

Our Project Specialists represent a critical element of our omni-channel offering and a differentiated capability in capturing project demand for the DIFM customer.

In addition, we continued to build upon our strong foundation with the Pro customer by focusing on our breadth and depth of inventory, portfolio of brands, and enhancing digital focus on LowesForPros.com.

The acquisition of Maintenance Supply Headquarters during 2017, in addition to the Central Wholesalers, Inc. acquisition in the prior year, will provide an opportunity to improve and expand our ability to serve the multi-family housing industry.

We also continued to make progress on the integration of RONA, including the roll-out of Appliances to approximately 100 locations as well as further optimizing our shared supplier relationships and procurement efforts.

During 2017, we converted five RONA stores to a Lowe’s-branded store as part of our initiative to convert certain larger format locations, where we are combining the best elements of Lowe’s store experience, merchandising, and brands with RONA’s strong Pro offerings.

While we are pleased with the strategic milestones we achieved this year, we are actively working to improve conversion, gross margin, and inventory management to ensure greater success in the future.

We will be taking the necessary actions to transform our supply chain, better empower our associates through training programs and the re-engineering of key processes such as Pick Up In Store and centralized project quoting, and continue to deliver compelling product experiences.

In 2018, we look to capitalize on a strong macroeconomic environment and see an opportunity to invest incremental cash flow from corporate tax reform to accelerate our strategic priorities.

We will be focusing our investments on the following six strategic areas to build upon our strong foundation which will be instrumental to further strengthening our competitiveness and enhancing our position as the omni-channel project authority:

| • | We are focusing on leveraging analytics to know the customer and their homes better, understanding their plans and designing better solutions to help them navigate their project journey. |

| • | We are improving how we engage, connecting with customers and associates through relevant tools and personalized messages through our enhanced marketing management platform. We will better empower our associates by deploying more user-friendly interfaces allowing our associates to better serve customers. |

| • | We are expanding our fulfillment options to better serve customers’ needs and expectations including investing in a new direct fulfillment center which will allow for the expansion of our online product offering and faster parcel shipping, investing in delivery capacity to meet increased demand, and advancing our Pick Up In Store experience to allow customers and our installation service providers to pick up products quickly. |

| • | We are continuing to deliver compelling product experiences to provide inspiration and personalized choices through a combination of strategic brands and differentiated store experiences. |

| • | We are investing to improve the Pro experience in order to grow our Pro sales and expand our market share including building on our strength with the maintenance, repair & operations customer and increasing relevance with specialty trades and repair/re-modelers. |

| • | We are providing a differentiated service offering for the DIFM customer, delivering complete home improvement project solutions through our in-home sales platform. |

Through these six strategic areas, we are focusing our resources on what is most relevant to the customer, building the capabilities required to deliver simple and seamless omni-channel experiences for DIY, DIFM, and Pro customers and engaging them in the moments that matter most.

| | 2017 | | 2016 | | 2017 vs. 2016 | | | 2017 vs. 2016 | |

| Gross margin | 34.11 | | 34.55 | | (44 | ) | | 4.2 | |

| Depreciation and amortization | 2.11 | | 2.29 | | (18 | ) | | (2.8 | ) |

| Operating income | 9.60 | | 8.99 | | 61 | | | 12.6 | |

| Loss on extinguishment of debt | 0.68 | | — | | 68 | | | N/A | |

| Income tax provision | 2.98 | | 3.24 | | (26 | ) | | (3.2 | ) |

| Net earnings | 5.02% | | 4.76% | | 26 | | | 11.5 | % |

| 1 | The fiscal year ended February 3, 2017 had 53 weeks. The fiscal years ended February 2, 2018 and January 29, 2016 had 52 weeks. |

NOPAT is a non-GAAP financial measure, and net earnings is considered to be the most comparable GAAP financial measure to NOPAT.

| Loss on extinguishment of debt | 464 | | | | — | | | | — | | |

| Net operating profit | 6,586 | | | | 5,846 | | | | 4,971 | | |

| | | | | | | | | | | | |

| 1 | Income tax adjustment is defined as net operating profit multiplied by the effective tax rate, which was 37.2%, 40.5%, and 42.4% for 2017, 2016, and 2015, respectively. |

Adjusted diluted earnings per share is considered a non-GAAP financial measure.

Unless otherwise noted, the income tax effect of these adjustments is calculated using the marginal rates for the respective periods.

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| Impact of tax reform 1 | — | | | 0.02 | | | 0.02 | | | | — | | | — | | | — | | | | — | | | — | | | — | | |

| One-time cash bonus attributable to tax reform 2 | 0.08 | | | (0.03 | ) | | 0.05 | | | | — | | | — | | | — | | | | — | | | — | | | — | | |

The addition of RONA and the 53rd week contributed 3.8% and 1.6%, respectively, to the sales growth for 2016.

Throughout 2016, we remained committed to our key priorities including differentiating ourselves with better customer experiences and improving our product and service offering for the Pro customer.

In addition, we continued to enhance our omni-channel experiences, driving customer engagement by delivering convenience, inspiration, expertise, and efficiency across the most relevant moments of the customer’s project journey.

We continued to leverage our larger store formats and expertise in customer experience design to create product sets to inspire customers to envision a variety of possibilities in their own homes.

Our customer experience design work is rooted in research around customers’ expectations and how they think about home improvement projects.

Whether it is showcasing a series of kitchen vignettes to highlight all the design elements of a kitchen remodel, or a smaller project, such as a bathroom lighting upgrade, we simplify presentation by grouping fixtures by style and collection in order to provide a cohesive decorating solution.

By providing an integrated assortment of products, inspiring and intuitive presentation and display, and optimal service components across all selling channels, we are able to provide better customer experiences that differentiate us in the marketplace.

We remained committed to building upon our strong foundation with the Pro customer by continuing to advance our product and service offerings to meet their unique needs.

Throughout the year, we made improvements to inventory depth, national and local brand assortment, and the strength of our service offering through the use of our Account Executive ProServices teams.

We enhanced features and functionality of LowesForPros.com, which provides an e-commerce platform where the Pro customer can develop requisition lists, access purchase history, create custom catalogs, and simplify online ordering, saving time and allowing them to run their business more efficiently.

We continued to enhance our omni-channel capabilities during the year.

We upgraded the Lowes.com shopping experience with improved product content and search functionality inclusive of upgrades such as refined search algorithms, expanded

content recommendations, improved click-to-chat capabilities, larger images, and expanded product views, and video content.

We have built an array of tools to help our customers visualize their projects and bring them to life, displaying project ideas on Pinterest, Facebook, and our own channels on Apple TV, Fire TV, and Roku in addition to lowes.com and YouTube.

During 2016, we completed the national rollout of our interior project specialist program.

Both interior and exterior project specialists are now available across all U.S. home improvement stores to meet with customers in their homes to design, plan, and complete their home improvement projects.

This in-home selling program, which is a critical element of our omni-channel strategy, represents a differentiated capability in capturing and serving customers’ interior and exterior project demand.

During the second quarter of 2016, we also completed our acquisition of RONA, one of Canada’s largest retailers and distributors of hardware, building materials, home renovation, and gardening products.

The acquisition enables the Company to accelerate its growth strategy in the Canadian home improvement market, and we continued to make progress on the integration of RONA in the second half of the year.

We remain focused on three critical factors to enable us to enhance our competitiveness and profitability in Canada and position us to capitalize on the long-term potential of the market.

These include enhancing customer relevance, expanding customer reach by serving a new portion of the market, and driving increased profitability by leveraging our shared supplier relationships, enhanced scale, and private-label brand capabilities while eliminating RONA’s public company costs.

Looking Forward

Economic forecasts for 2017 suggest the outlook for the home improvement industry remains favorable as the economy continues to be led by growth in consumer spending.

The home improvement industry is poised to grow its share of wallet as a percent of overall consumer spending, given sustained home price recovery and continued job and income gains.

In addition, consumer balance sheets are strong as debt service ratios are near record lows and access to credit is gradually improving.

Along with stronger incomes and rising home prices, we believe stronger household financial conditions will support discretionary home improvement spending.

These macro factors should continue to contribute to household formation, which will sustain home buying and related spending as homeowners upgrade and refresh their homes.

In 2017, we look to build upon our strong foundation to better serve the needs of a rapidly changing customer and capitalize on a favorable macroeconomic backdrop.

We are focused on three strategic objectives to drive value for our customers and shareholders.

First, we are dedicated to expanding the reach of home improvement and driving profitable share gains.

We are working to serve more customers - DIY, DIFM, and Pro - more effectively and differentiate ourselves by establishing market leadership for home improvement project solutions.

Second, we are further adapting to an evolving customer, developing capabilities to anticipate and support their needs.

Finally, we are committed to generating long-term profitable growth and substantial returns for shareholders.

By enhancing our operating discipline and focus, we are making productivity a core strength for Lowe’s.

This commitment will drive focus and prioritization, allowing for investment in future capabilities to grow the business, maintain our leadership position, and drive value for shareholders.

| | 2015 | | 2014 | | 2015 vs. 2014 | | | 2015 vs. 2014 | |

| Gross margin | 34.82 | | 34.79 | | 3 | | | 5.2 | |

| Depreciation and amortization | 2.53 | | 2.66 | | (13 | ) | | — | |

| Operating income | 8.41 | | 8.53 | | (12 | ) | | 3.7 | |

| Income tax provision | 3.17 | | 2.81 | | 36 | | | 18.6 | |

[removed: Historically,] [added: Although we have international operating entities,] our exposure to foreign currency [removed: exchange] rate fluctuations [removed: on the translation of our international operations into U.S. dollars has] [added: is] not [removed: been] material to our financial condition and [removed: results] [added: result] of operations.

We will be further exposed to this risk as we increase operations in Canada following the acquisition of RONA.

To manage the foreign currency exchange rate risk on the consideration to be paid for the RONA acquisition, the Company entered into a foreign currency exchange option during

the first quarter of fiscal 2016 to purchase 3.2 billion Canadian dollars at a strike price of 1.3933.

In the second quarter of fiscal 2016, the option contract was settled.

The net gain of $76 million was included in the accompanying consolidated statements of current and retained earnings.

As of February [removed: 3, 2017,] [added: 2, 2018,] Lowe’s operated [removed: 2,129] [added: 2,152] home improvement and hardware stores, representing approximately [removed: 213] [added: 215] million square feet of retail selling space.

These operations were comprised of [removed: 1,820] [added: 1,839] stores located across 50 U.S. states, including [removed: 87] [added: 99] Orchard Supply Hardware (Orchard) stores, as well as [removed: 299] [added: 303] stores in Canada, and 10 stores in Mexico.

[removed: During 2016, Lowe’s acquired] RONA [removed: inc. (RONA) which owns and] operates [removed: 245] [added: 240] stores in Canada as of February [removed: 3, 2017,] [added: 2, 2018,] as well as services approximately [removed: 236] [added: 242] dealer-owned stores.

[removed: Retail customers, comprised of individual] [added: Individual] homeowners and [removed: renters,] [added: renters] complete a wide array of projects and vary along the spectrum of do-it-yourself (DIY) and do-it-for-me (DIFM).

The U.S. market remains our predominant market, accounting for approximately [removed: 94%] [added: 92%] of consolidated sales [removed: as of] [added: for the fiscal year ended] February [removed: 3, 2017.][added: 2, 2018.]

NAICS 444 represents [removed: less than] [added: roughly] half of what we consider the total U.S. market for our products and services.

These consist of other companies in the retail sector, including mass retailers, home [removed: furnishings] [added: goods specialty] stores, and online retailers, as well as wholesalers that provide home-related products and services to homeowners, businesses, and the government.

In addition, we compete with general merchandise retailers, warehouse clubs, and online and other specialty retailers as well as service providers that install home [removed: improvement products.]

We offer home improvement products in the following categories: Lumber & Building [removed: Materials;] [added: Materials,] Tools & [removed: Hardware; Appliances;] [added: Hardware, Appliances,] Fashion [removed: Fixtures;] [added: Fixtures,] Rough Plumbing & [removed: Electrical;] [added: Electrical,] Seasonal [removed: Living; Lawn] & [removed: Garden; Paint; Millwork; Flooring; Kitchens;] Outdoor [removed: Power Equipment;] [added: Living, Lawn & Garden, Paint, Millwork, Flooring,] and [removed: Home Fashions.][added: Kitchens.]

A typical Lowe’s-branded home improvement store stocks approximately [removed: 37,000] [added: 39,000] items, with hundreds of thousands of additional items available through our Special Order Sales system and various online selling channels.

See Note [removed: 17] [added: 16] of the Notes to Consolidated Financial Statements included in Item 8, “Financial Statements and Supplementary Data”, of this Annual Report for historical revenues by product category for each of the last three fiscal years.

Lowe’s home improvement stores carry a wide selection of national brand-name merchandise such as Whirlpool®, GE®, LG®, and Samsung® appliances, Stainmaster® carpets, [added: Sherwin-Williams® paints and stains,] Valspar® paints and stains, Pella® windows and doors, [removed: Sylvania® light bulbs,] [added: Pergo® hardwood flooring,] Dewalt® power tools, Hitachi® pneumatic tools, [added: Weber® grills, Char-Broil® grills,] Owens Corning® insulation and roofing, GAF® roofing, James Hardie® fiber cement siding, [added: Marshalltown® masonry tools and concrete,] Husqvarna® outdoor power equipment, [added: John Deere® riding lawn mowers,] Werner® ladders, [added: Quoizel® lighting, Nest® products] and many more.

We also own and operate [removed: ten] [added: eight] distribution centers, including four lumber yards, to serve our Canadian market, and we lease and operate a distribution facility to serve our Orchard stores.

Additionally, we have a service agreement with a [removed: third party] [added: third-party] logistics provider to manage a distribution facility to serve our stores in Mexico.

[removed: Collectively, our] facilities enable our import and e-commerce, as well as parcel post eligible products, to get to their destination as efficiently as possible.

In fiscal [removed: 2016,] [added: 2017,] on average, approximately 80% of the total dollar amount of stock merchandise we purchased was shipped through our distribution network, while the remaining portion was shipped directly to our stores from vendors.

Installed Sales, which includes both product and labor, accounted for approximately 7% of total sales in fiscal [removed: 2016.][added: 2017.]

We offer extended protection plans [removed: in Kitchens,] [added: for various products within the] Appliances, [removed: Tools] [added: Kitchens, Fashion Fixtures, Millwork, Rough Plumbing] & [removed: Hardware, Outdoor Power Equipment,] [added: Electrical,] Seasonal [added: & Outdoor] Living, [removed: Rough Plumbing Electrical Fixtures,] and [removed: Garage Door Openers.][added: Tools & Hardware categories.]

These protection plans provide customers with product protection that enhances or extends coverage previously offered by the manufacturer’s [added: warranty, and provides additional customer friendly benefits that go beyond the scope of a manufacturer’s] warranty.

Our contact center takes customers’ calls, assesses the problems, and facilitates resolutions, making after-sales service easier for our customers [removed: because we manage] [added: by managing] the entire process.

We are continuing [added: to enhance] our [removed: progress towards becoming an] omni-channel [removed: retail company,] [added: capabilities,] which allows our customers to move from channel to channel with simple and seamless transitions even within the same transaction.

[added: For example, for many projects,] more than half of our customers conduct research online before making an in-store purchase.

For purchases made on Lowes.com, [removed: approximately 60% are picked] [added: customers may pick] up [added: their purchase] in-store, [removed: 10% are] [added: have their purchase] delivered from a store, [removed: and 30% are] [added: or have their purchase] parcel shipped.

Our [removed: 1,797] [added: 1,813] Lowe’s-branded home improvement stores, inclusive of [removed: 1,733] [added: 1,740] in the U.S., [removed: 54] [added: 63] in Canada and 10 in Mexico, are generally open seven days per week and average approximately 112,000 square feet of retail selling space, plus approximately 32,000 square feet of outdoor garden center selling space.

The [removed: 245 stores acquired in the] [added: 240] RONA [removed: acquisition] [added: stores] operate under various complementary store formats that address target customers and occasions.

In addition, we operate [removed: 87] [added: 99] Orchard hardware stores located throughout California, Oregon, and Florida that also serve home improvement customers and average approximately 36,000 square feet of retail selling space.

In addition, our Project Specialist Interiors (PSI) program is also [removed: now] available in all U.S. Lowe’s home improvement stores to provide similar consultative services on interior projects such as kitchens and bathrooms.

As of February [removed: 3, 2017,] [added: 2, 2018,] we employed approximately [removed: 190,000] [added: 200,000] full-time and [removed: 100,000] [added: 110,000] part-time employees.

We fund our working capital requirements primarily through cash [added: flows generated from operations, but also with short-term borrowings, as needed.]

This subsidiary and other wholly owned subsidiaries own and maintain various additional registered and unregistered trademarks, trade names and service marks, including but not limited to retail names “RONA”, “Reno Depot”, and “Orchard Supply Hardware”, online retail name [removed: “ATG Stores”,] [added: “The Mine”,] and private brand product names “Kobalt” and “allen+roth”.

In [removed: 2016,] [added: 2017,] Lowe’s externally verified its greenhouse gas emissions data collection and analysis to validate our findings and increase confidence in our reporting.

We collaborate with the Environmental Protection Agency’s SmartWay program to reduce transportation emissions by creating incentives for freight contractors to improve efficiency, and are proud to be [removed: one of] [added: the] only [removed: nine companies in 2016] [added: retailer] to [removed: receive] [added: achieve] the Environmental Protection Agency SmartWay Excellence Award [removed: in the logistics and shipping category-the only retailer to achieve this honor eight] [added: nine] years in a row.

In [removed: 2016,] [added: 2017,] we [removed: installed] [added: completed our rollout of] HydroPoint irrigation technology that combines real-time weather data with site-specific information to reduce water consumption and save on utility costs.

Lowe’s has a long and proud history of supporting local communities through [added: volunteerism as well as] public education and community improvement projects, beginning with the creation of the Lowe’s Charitable and Educational Foundation in 1957.

[removed: In 2016,] Lowe’s and the Lowe’s Charitable and Educational Foundation donated approximately [removed: $38] [added: $39] million to schools and community organizations in the United States, Canada, and Mexico, including but not limited to the following [added: actions] discussed below.

Our commitment to improving educational opportunities is best exemplified by our signature education grant program, Lowe’s Toolbox for Education®, and [removed: 2016] [added: 2017] marked the program’s [removed: 11-year] [added: 12-year] anniversary.

In [removed: 2016,] [added: 2017,] Lowe’s Toolbox for Education® provided approximately [removed: $7] [added: $6.5] million in grants and since inception has provided funding improvements at nearly [removed: 12,000] [added: 13,000] schools, benefiting more than [removed: six] [added: seven] million children.

In [removed: 2016,] [added: 2017,] Lowe’s contributed $7 million and teamed with Habitat for Humanity and Rebuilding Together to provide housing solutions in partnership with families across the country.

In [removed: 2016,] [added: 2017,] Lowe’s [removed: donated nearly $2.1] [added: contributed more than $2.5] million and mobilized hundreds of [removed: Lowe’s Heroes] employee volunteers to help families recover from disasters across the United States.

The Canadian stores include RONA inc. (RONA) which was acquired by Lowe’s in 2016.

Financial information about our geographic areas is included in Note 1, “Summary of Significant Accounting Policies”, of the Notes to the Consolidated Financial Statements included in Item 8, “Financial Statements and Supplementary Data”, of this Annual Report.

improvement products.

In 2017, we added brand name merchandise such as A. O. Smith® water heaters, SharkBite® plumbing products, and Norton® abrasives to our portfolio.

Collectively, our

In addition, flexible fulfillment options are available for in-store purchases and those made through the contact center.

As a purpose-driven, principles-based company, Lowe’s is committed to leveraging our time, talents and resources to growing in a way that makes our world better, makes our communities stronger, and makes people want to connect with us as their partner in home improvement.

In 2017, our Sustainability & Product Stewardship Council, led by senior executives, enhanced our Corporate Social Responsibility Strategy.

Our strategy focuses on responsible sourcing, safer and more eco-friendly product offerings, maintaining a diverse, healthy, engaged and skilled workforce, supporting our local communities and operating ethically and responsibly.

We want our customers to feel good about the high-quality products they choose at Lowe’s.

Our products are selected very

carefully, beginning with our sourcing decisions.

We care about how our thousands of products are created and about the people who make them.

Through collaboration and established management systems, we monitor our suppliers’ practices to ensure we are securing high quality products from suppliers who protect worker rights and the environment.

We are also bringing innovative, efficient and eco-certified products into our portfolio-products that provide health and environmental benefits-to meet the needs of an increasing set of customers who prefer these types of products.

In 2017, we crafted vision statements and began identifying 2025 goals to guide our future decisions.

We are committed to preserving our shared home, Earth, through sustainable practices and conservation at a local level.

Our retail stores require significant amounts of electricity to operate lighting, HVAC and other energy-consuming items, while the transportation of our products from suppliers, to distribution centers to stores requires fuel.

We are actively working to manage and reduce energy and fuel usage.

At a local level, store waste can add up-cardboard, broken appliances, wood pallets, and more.

We recycle these through national and regional partners and provide in-store recycling centers for our customers to bring in certain items.

Footprint reduction activities result in cost savings, healthier communities and a better world.

In 2017, 100 retail locations upgraded to interior light-emitting diode (LED) lighting.

In 2017, we also replaced 100 aging HVAC units with high-efficiency units and added Variable Fan Drive systems in over 300 stores.

During the execution of the HVAC initiative, the facilities team was able to recycle over four million pounds of materials, preventing valuable resources from going to landfill.

The HydroPoint systems are now deployed to approximately 925 locations, covering all stores with operable irrigation systems.

In 2017, Lowe’s employees contributed approximately 200,000 hours to Lowe’s Heroes volunteer projects, with 100% participation from Lowe’s U.S. stores.

We also supported our employees affected by the many natural disasters this year by doubling the company match of the Employee Relief Fund after Harvey made landfall.

Together, Lowe’s and our generous employees raised over $3.1 million this year which has helped over 2,500 employees in need.

The total annual revenue reported for businesses included in NAICS 444 in 2016 was $352.3 billion, which represented an increase of 5.9% over the amount reported for the same category in 2015.

The total annual revenue reported for businesses included in NAICS 444 in 2015 was $332.6 billion, which represented an increase of 4.7% over the amount reported for the same category in 2014.

These figures are subject to periodic revision by the U.S. Department of Commerce.

Based on our analysis of the most recent comprehensive data available, we estimate the size of the U.S. home improvement market at $775 billion in 2016, comprised of $578 billion of product sales and $197 billion of installed labor sales.

That compares with $730 billion total market sales in 2015, comprised of $543 billion of product sales and $187 billion of installed labor sales.

These figures are subject to periodic revision by the U.S. Department of Commerce and other third-party sources.

| | |

| --- | --- |

| • | Growth in real disposable personal income is projected to moderate to 2.3% in 2017 as compared with 2.8% growth in 2016, based on the March 2017 Blue Chip Economic Indicators®. * |

| • | The average unemployment rate for 2017 is forecasted to decline to 4.6%, according to the March 2017 Blue Chip Economic Indicators, which would be an improvement from the 4.9% average rate in 2016. The unemployment rate should continue to trend lower as the job market continues to expand at a moderate pace. |

| • | Recent evidence suggests that home prices will continue to increase. In 2016, home prices increased an estimated 5.4% similar to the 5.5% increase in 2015, according to the latest Federal Housing Finance Agency index. Economists generally expect the rate of home price growth to moderate in 2017. |

| • | Housing turnover increased an estimated 5.1% in 2016 after a 7.3% increase in 2015, according to The National Association of Realtors and U.S. Census Bureau. Turnover is generally expected to continue to moderately increase in 2017, supported by persisting growth in the job market, rising incomes, and historically low mortgage rates. |

These indicators are important to our business because they signal a customer’s willingness to engage in home maintenance, repair, and upgrade projects and favorably impact income available to purchase our products and services.

Overall, the outlook for the home improvement industry remains positive for 2017, supported by continuing gains in jobs and incomes, home buying, and home price appreciation.

*Blue Chip Economic Indicators® (ISSN: 0193-4600) is published monthly by Aspen Publishers, 76 Ninth Avenue, New York, NY 10011, a division of Wolters Kluwer Law and Business.

Printed in the U.S.A.

In 2016, we added

brand name merchandise such as Pergo® hardwood flooring, Quoizel® lighting, Marshalltown® masonry tools, and a suite of Nest® products to our portfolio.

For example, for many projects,

For the 60% picked up in-store, 40% of those customers elect to purchase additional products when they arrive in our stores.

In 2016, sales through our online selling channels accounted for approximately 3.5% of our total sales.

flows generated from operations, but also with short-term borrowings, as needed.

Lowe’s knows that operating a business can impact the environment and our communities, and we continue to work to positively influence that impact.

It is a responsibility we take seriously.

In 2016, we created a Sustainability & Product Stewardship Council, led by senior executives, to review significant strategies and policies regarding sustainability and product stewardship, and make recommendations across the organization.

The company initiated work on a comprehensive sustainability strategy that creates business value and supports our purpose, and we expect to finalize that strategy during 2017.

In 2016, 32 retail locations upgraded to interior light-emitting diode (LED) lighting, and seven new stores opened with LED lighting already installed.

We plan to continue to implement interior LED lighting and seek solutions for specific lighting needs to enhance energy efficiency as well as the customer experience.

In 2016, we expanded our test of a state-of-the-art building management system (BMS) to 100 stores.

The BMS monitors equipment performance and provides valuable information that helps facility managers manage energy consumption to reduce costs and carbon emissions.

Lowe’s conducted energy efficiency audits of heating, ventilation and air conditioning systems, and will be implementing upgrades to a number of systems in 2017.

Our recycling program continues to be a priority as we seek to reduce landfill waste and increase recycling at our stores and distribution centers.

We operate in-store recycling centers at every Lowe’s store in the continental United States, encouraging customers to recycle compact fluorescent lamps, plastic bags, rechargeable batteries and cell phones.

We offer haul-away service to customers who purchase replacement appliances, and our Garden Centers also accept plastic plant trays and pots for recycling.

The systems are in 200 locations and we expect to expand to 200 more in the coming year.

More than ever, customers expect products that are safe, socially and environmentally responsible, and also affordable.

Lowe’s increasingly provides product choices that save energy and water, reduce potentially harmful chemicals, or mitigate safety concerns for their families.

We also engage with our product suppliers, manufacturers and other external stakeholders to ensure we carry the most innovative new products.

For the second year in a row, 100% of Lowe’s stores in the United States participated in a Lowe’s Heroes volunteer project.

[removed: We do] [added: The Company does] not believe that any of these proceedings, individually or in the aggregate, would be expected to have a material adverse effect on [removed: our] [added: its] results of operations, financial position, or cash flows.

The Company is from time to time a party to various lawsuits, claims and other legal proceedings that arise in the ordinary course of business.

With respect to such lawsuits, claims and proceedings, the Company records reserves when it is probable a liability has been incurred and the amount of loss can be reasonably estimated.

The Company maintains liability insurance for certain risks that are subject to certain self-insurance limits.

We are, from time to time, party to various legal proceedings considered to be in the normal course of business, none of which are considered material.

For the fiscal year ended February [removed: 3, 2017][added: 2, 2018]

[removed: ][added: ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, [removed: or a] smaller reporting [added: company, or an emerging growth] company.

See the definitions of “large accelerated filer,” “accelerated filer,” [removed: and] “smaller reporting [added: company,” and “emerging growth] company” in Rule 12b-2 of the Exchange Act.

| [removed: Large accelerated filer x | Accelerated filer o |] Non-accelerated filer o | [added: |] Smaller reporting company o |

As of [removed: July 29, 2016,] [added: August 4, 2017,] 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 [removed: $72.4] [added: $65.6] billion based on the closing sale price as reported on the New York Stock Exchange.

| CLASS | | OUTSTANDING AT [removed: 3/31/2017] [added: 3/29/2018] |

| Common Stock, $0.50 par value | | [removed: 857,332,918] [added: 825,766,281] |

| Portions of the Proxy Statement for Lowe’s [removed: 2017] [added: 2018] Annual Meeting of Shareholders | | Part III |

| | Item 1. | [removed: [Business](#sB2B68CE582145771BAACA78EDB3E2D77)] [added: [Business](#s36CCF10AE77A5385A16517378605841A)] | [removed: [4](#sB2B68CE582145771BAACA78EDB3E2D77)] [added: [4](#s36CCF10AE77A5385A16517378605841A)] |

| | Item 1A. | [Risk [removed: Factors](#s3B990E08F4325730821CF2D475C97468)] [added: Factors](#sFC7F95787CE15E25BE1D90FE65249C5B)] | [removed: [9](#s3B990E08F4325730821CF2D475C97468)] [added: [9](#sFC7F95787CE15E25BE1D90FE65249C5B)] |

| | Item 1B. | [Unresolved Staff [removed: Comments](#s86FF7D249DE25A03A5781E8D69582266)] [added: Comments](#s2FB2E6777CF056FE955D91F597175D55)] | [removed: [14](#s86FF7D249DE25A03A5781E8D69582266)] [added: [15](#s2FB2E6777CF056FE955D91F597175D55)] |

| | Item 2. | [removed: [Properties](#s4659AC160C9854F19A9C47A608EDE55A)] [added: [Properties](#s45E1740C7DC557168F5900E8789C6D66)] | [removed: [14](#s4659AC160C9854F19A9C47A608EDE55A)] [added: [15](#s45E1740C7DC557168F5900E8789C6D66)] |

| | Item 3. | [Legal [removed: Proceedings](#sF6A3168B31F056C8BBE6E0523E63A697)] [added: Proceedings](#s64210D19B3BC517580ED3BBE210E0170)] | [removed: [14](#sF6A3168B31F056C8BBE6E0523E63A697)] [added: [15](#s64210D19B3BC517580ED3BBE210E0170)] |

| | Item 4. | [Mine Safety [removed: Disclosures](#s0F42A212F9595F58B1BFCB55EE436C25)] [added: Disclosures](#sEFDE89579DCE575594D3F66A6547895D)] | [removed: [15](#s0F42A212F9595F58B1BFCB55EE436C25)] [added: [15](#sEFDE89579DCE575594D3F66A6547895D)] |

| | | [Executive Officers [removed: and Certain Significant Employees] of the [removed: Registrant](#sECFBA0C2F9B85ADE81E6C7CAD54A7C31)] [added: Registrant](#s3D509DF126AA5296BB27F8D604CD944C)] | [removed: [16](#sECFBA0C2F9B85ADE81E6C7CAD54A7C31)] [added: [16](#s3D509DF126AA5296BB27F8D604CD944C)] |

| | Item 5. | [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#s4B0010F24212590B9560DFAC5B9F161A)] [added: Securities](#s2F32D1F14D825BF0BE107C7487822E8A)] | [removed: [17](#s4B0010F24212590B9560DFAC5B9F161A)] [added: [17](#s2F32D1F14D825BF0BE107C7487822E8A)] |

| | Item 6. | [Selected Financial [removed: Data](#s876E5F5FDAB85099874EBDEAA23A311E)] [added: Data](#sEE3CC73FFC81575FB6E20CE2F3A79478)] | [removed: [18](#s876E5F5FDAB85099874EBDEAA23A311E)] [added: [18](#sEE3CC73FFC81575FB6E20CE2F3A79478)] |

| | Item 7. | [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#s6A456A5C5A705C0684F07D6DB820CF7A)] [added: Operations](#sFEDADF65BAF25E299378E12D008784C3)] | [removed: [19](#s6A456A5C5A705C0684F07D6DB820CF7A)] [added: [19](#sFEDADF65BAF25E299378E12D008784C3)] |

| | Item 7A. | [Quantitative and Qualitative Disclosures About Market [removed: Risk](#s2C708959883051259DF1D0D0B25BD2C2)] [added: Risk](#sB0A45F77E4E05E039D87A4AAE8E0A7ED)] | [removed: [34](#s2C708959883051259DF1D0D0B25BD2C2)] [added: [35](#sB0A45F77E4E05E039D87A4AAE8E0A7ED)] |

| | Item 8. | [Financial Statements and Supplementary [removed: Data](#sC777B36215B8596E83D6040C9FF7A448)] [added: Data](#sA3B9F9A33D7E56A99EDCF6D2E13A3FA5)] | [removed: [36](#s0169A67B8D60587D941ED15706E01B34)] [added: [37](#s7109B6D5220B54C4B9EA25C917E24F3D)] |

| | Item 9. | [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#s345CE9CDA38E5C4EB8BF5A35C39CD464)] [added: Disclosure](#s298F13B8C5A55BE389DD98429F7B24C1)] | [removed: [69](#s345CE9CDA38E5C4EB8BF5A35C39CD464)] [added: [70](#s298F13B8C5A55BE389DD98429F7B24C1)] |

| | Item 9A. | [Controls and [removed: Procedures](#sE68F244160425D46865F488FC8B0B3A7)] [added: Procedures](#sFF637F6701E05B93A66B68D099425FDE)] | [removed: [69](#sE68F244160425D46865F488FC8B0B3A7)] [added: [70](#sFF637F6701E05B93A66B68D099425FDE)] |

| | Item 9B. | [Other [removed: Information](#s464109E25BFE55CC91CD741A203AA45C)] [added: Information](#sFC06B16A4337522F84E465F67969DE75)] | [removed: [69](#s464109E25BFE55CC91CD741A203AA45C)] [added: [71](#sFC06B16A4337522F84E465F67969DE75)] |

| | Item 10. | [Directors, Executive Officers and Corporate [removed: Governance](#s96964A7151575B36A041FE713B664D04)] [added: Governance](#s075A69CBEF1256E08D2E99AE329E6904)] | [removed: [70](#s96964A7151575B36A041FE713B664D04)] [added: [72](#s075A69CBEF1256E08D2E99AE329E6904)] |

| | Item 11. | [Executive [removed: Compensation](#sBC2BDDBD5AC4538D8CFF14015735C0FE)] [added: Compensation](#sB70EF362C7775ECEA4D75D66D068F3A7)] | [removed: [70](#sBC2BDDBD5AC4538D8CFF14015735C0FE)] [added: [72](#sB70EF362C7775ECEA4D75D66D068F3A7)] |

| | Item 12. | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#s27985DD3BB2D55D699A7D26032960CF4)] [added: Matters](#s842960B8897C5056B35B46D4CAF9338D)] | [removed: [70](#s27985DD3BB2D55D699A7D26032960CF4)] [added: [72](#s842960B8897C5056B35B46D4CAF9338D)] |

| | Item 13. | [Certain Relationships and Related Transactions, and Director [removed: Independence](#s093FD66E77755CDD96979C01FDA84E59)] [added: Independence](#s1E2FD4A3E1245DBBB70E643BC322E0E1)] | [removed: [70](#s093FD66E77755CDD96979C01FDA84E59)] [added: [72](#s1E2FD4A3E1245DBBB70E643BC322E0E1)] |

| | Item 14. | [Principal Accountant Fees and [removed: Services](#s57D6019CA4F3523B8F4B665F97ADE4E8)] [added: Services](#sDAB57A28DBDA55CA9B60976EDBF6BCD6)] | [removed: [70](#s57D6019CA4F3523B8F4B665F97ADE4E8)] [added: [72](#sDAB57A28DBDA55CA9B60976EDBF6BCD6)] |

| | Item 15. | [Exhibits and Financial Statement [removed: Schedules](#s11F17FD5FDED52A29DA63917472979A5)] [added: Schedules](#s3408B18BBC215B019994139096B759D9)] | [removed: [71](#s11F17FD5FDED52A29DA63917472979A5)] [added: [73](#s3408B18BBC215B019994139096B759D9)] |

| | Item 16. | [Form 10-K [removed: Summary](#sa33adb52f4d343419d2b1902baf278ae)] [added: Summary](#s1E38AB33CC67521D8278EC52F51B5DF2)] | [removed: [79](#sa33adb52f4d343419d2b1902baf278ae)] [added: [81](#s1E38AB33CC67521D8278EC52F51B5DF2)] |

10-K 1 form10k_02022018.htm FORM 10-K

| Large accelerated filer ý | | Accelerated filer o |

| | | Emerging growth company o |

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.

| | | |

| --- | --- | --- |

| | | |

| | | [Signatures](#sBF06A8806BEB5B8EB944AC6FA0AD581F) | [82](#sBF06A8806BEB5B8EB944AC6FA0AD581F) |

10-K 1 lowesform10k.htm FORM 10-K

(Check one):

| | | | |

| --- | --- | --- | --- |

| | | [Signatures](#s1C16012628635F86895D082EB769A6F2) | [80](#s1C16012628635F86895D082EB769A6F2) |

At February [removed: 3, 2017,] [added: 2, 2018,] our properties consisted of [removed: 2,129] [added: 2,152] stores in the U.S., Canada, and Mexico with a total of approximately [removed: 213] [added: 215] million square feet of selling space.

Of the total stores operating at February [removed: 3, 2017,] [added: 2, 2018,] approximately 79% are owned, which includes stores on leased land, with the remainder being leased from third parties.

EXECUTIVE OFFICERS [removed: AND CERTAIN SIGNIFICANT EMPLOYEES] OF THE REGISTRANT

Set forth below is a list of names and ages of the executive officers [removed: and certain significant employees] 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.

| Robert A. Niblock | | [removed: 54] [added: 55] | | Chairman of the Board, President and Chief Executive Officer since 2011. |

| Marshall A. Croom | | [removed: 56] [added: 57] | | Chief Financial Officer since March 2017; Chief Risk Officer, 2012 – March [removed: 2017; Senior Vice President and Chief Risk Officer, 2009 – 2012.] [added: 2017.] |

| Matthew V. Hollifield | | [removed: 50] [added: 51] | | Senior Vice President and Chief Accounting Officer since 2005. |

| Richard D. Maltsbarger | | [removed: 41] [added: 42] | | Chief [added: Operating Officer since February 2018; Chief] Development Officer and President of [removed: International since 2015;] [added: International, 2015 – February 2018;] Chief Development Officer, 2014 – 2015; Business Development Executive, 2012 – [removed: 2014; Senior Vice President, Strategy, 2011 – 2012.] [added: 2014.] |

| Ross W. McCanless | | [removed: 59] [added: 60] | | Chief Legal [added: Officer and Secretary since 2017; Chief Legal] Officer, Secretary and Chief Compliance [removed: Officer since 2016;] [added: Officer, 2016 – 2017;] General Counsel, Secretary and Chief Compliance Officer, 2015 – 2016; Chief Legal Officer, Extended Stay America, Inc. and ESH Hospitality, Inc., 2013 – 2014; Chief Legal Officer, HVM, L.L.C., 2012 – 2013. |

| Michael P. McDermott | | [removed: 47] [added: 48] | | Chief Customer Officer since 2016; Chief Merchandising Officer, 2014 – 2016; Senior Vice President and General Merchandising Manager – Building and Maintenance, 2013 – 2014; Sales Leader – Appliances, General Electric Company, 2011 – 2013. |

| N. Brian Peace | | [removed: 51] [added: 52] | | Corporate Administration Executive since [removed: 2012; Senior Vice President, Corporate Affairs, 2006 –] 2012. |

| Paul D. Ramsay | | [removed: 52] [added: 53] | | Chief Information Officer since 2014; Senior Vice President, Information Technology, 2011 – 2014. |

| Jennifer L. Weber | | [removed: 50] [added: 51] | | Chief Human Resources Officer since 2016; Executive Vice President, External Affairs and Strategic Policy, Duke Energy Corporation, 2014 – 2016; Executive Vice President and Chief Human Resources Officer, Duke Energy Corporation, 2011 – 2014. |

On March 26, 2018, we announced that Robert A.

Niblock plans to retire as Chairman of the Board, President and Chief Executive Officer after a 25-year career with the Company.

The board of directors has initiated a search for his successor, and in the interim Mr. Niblock will remain in his current role.

| | | | | |

| Rick D. Damron | | 54 | | Chief Operating Officer since 2012; Executive Vice President, Store Operations, 2011 – 2012. |

As of March [removed: 31, 2017,] [added: 29, 2018,] there were [removed: 23,575] [added: 22,926] holders of record of Lowe’s common stock.

| | Fiscal [removed: 2016] [added: 2017] | | | | | | | | | | | | Fiscal [removed: 2015] [added: 2016] | | | | | | | | | | |

| 1st Quarter | $ | [removed: 77.63] [added: 86.00] | | | $ | [removed: 62.62] [added: 72.11] | | | $ | [removed: 0.28] [added: 0.35] | | | $ | [removed: 76.25] [added: 77.63] | | | $ | [removed: 66.17] [added: 62.62] | | | $ | [removed: 0.23] [added: 0.28] | |

| 2nd Quarter | [removed: 83.65] [added: 86.25] | | | | [removed: 74.56] [added: 71.58] | | | | [removed: 0.35] [added: 0.41] | | | | [removed: 73.93] [added: 83.65] | | | | [removed: 65.83] [added: 74.56] | | | | [removed: 0.28] [added: 0.35] | | |

| 3rd Quarter | [removed: 82.68] [added: 82.74] | | | | [removed: 66.71] [added: 70.76] | | | | [removed: 0.35] [added: 0.41] | | | | [removed: 74.78] [added: 82.68] | | | | [removed: 64.22] [added: 66.71] | | | | [removed: 0.28] [added: 0.35] | | |

| 4th Quarter | [removed: 76.47] [added: 108.98] | | | | [removed: 64.87] [added: 77.14] | | | | [removed: 0.35] [added: 0.41] | | | | [removed: 78.13] [added: 76.47] | | | | [removed: 66.93] [added: 64.87] | | | | [removed: 0.28] [added: 0.35] | | |

The graph assumes $100 invested on February [removed: 3, 2012] [added: 1, 2013] in the Company’s common stock and each of the indices.

[removed: ][added: ]

| | [removed: 2/3/2012 | | | |] 2/1/2013 | | | | 1/31/2014 | | | | 1/30/2015 | | | | 1/29/2016 | | | | 2/3/2017 | | | [added: | 2/2/2018 | | |]

The following table sets forth information with respect to purchases of the Company’s common stock made during the fourth quarter of fiscal [removed: 2016:][added: 2017:]

| [removed: (In millions, except average price paid per share)] | Total Number of Shares Purchased 1 | | | Average Price Paid per Share | | | | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs 2 | | | Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs 2 | | |

| 1 | [removed: During the fourth quarter of fiscal 2016, the Company repurchased an aggregate of 7.7 million shares of its common stock.] The total number of shares purchased [removed: also] includes [removed: an insignificant number of] shares withheld from employees to satisfy either the exercise price of stock options or the statutory withholding tax liability upon the vesting of [removed: restricted stock] [added: share-based] awards. |

| Lowe’s | $ | 100.00 | | | $ | 121.96 | | | $ | 181.46 | | | $ | 194.85 | | | $ | 202.83 | | | $ | 286.15 | |

| S&P 500 | 100.00 | | | | 120.30 | | | | 137.42 | | | | 136.50 | | | | 165.26 | | | | 202.66 | | |

| S&P Retail Index | $ | 100.00 | | | $ | 123.90 | | | $ | 147.13 | | | $ | 170.01 | | | $ | 197.77 | | | $ | 278.96 | |

| November 4, 2017 – December 1, 2017 | 1,677,589 | | | $ | 79.14 | | | 1,677,580 | | | $ | 1,943,395,179 | |

| December 2, 2017 – January 5, 2018 | 931 | | | 88.59 | | | | — | | | 1,943,395,179 | | |

| January 6, 2018 – February 2, 2018 | 570 | | | 103.70 | | | | — | | | 6,943,395,179 | | |

| As of February 2, 2018 | 1,679,090 | | | $ | 79.16 | | | 1,677,580 | | | $ | 6,943,395,179 | |

| 2 | On January 27, 2017, the Company announced that its Board of Directors authorized a $5.0 billion repurchase program with no expiration. On January 26, 2018, the Company announced that its Board of Directors authorized an additional $5.0 billion of share repurchases with no expiration. |

| Lowe’s | $ | 100.00 | | | $ | 144.61 | | | $ | 176.36 | | | $ | 262.41 | | | $ | 281.77 | | | $ | 293.31 | |

| S&P 500 | 100.00 | | | | 115.06 | | | | 138.42 | | | | 158.11 | | | | 157.06 | | | | 190.14 | | |

| S&P Retail Index | $ | 100.00 | | | $ | 125.89 | | | $ | 157.75 | | | $ | 189.45 | | | $ | 221.27 | | | $ | 260.15 | |

| October 29, 2016 – November 25, 2016 3 | 3.4 | | | $ | 70.95 | | | 3.4 | | | $ | 367 | |

| November 26, 2016 – December 30, 2016 | 2.1 | | | 72.97 | | | | 2.1 | | | 215 | | |

| December 31, 2016 – February 3, 2017 3 | 2.2 | | | 72.09 | | | | 2.2 | | | 5,076 | | |

| As of February 3, 2017 | 7.7 | | | $ | 71.83 | | | 7.7 | | | $ | 5,076 | |

| | |

| --- | --- |

| 2 | On March 20, 2015, the Company announced that its Board of Directors authorized a $5.0 billion repurchase program with no expiration. On January 27, 2017, the Company announced that its Board of Directors authorized an additional $5.0 billion of share repurchases with no expiration. As of February 3, 2017, the Company had $5.1 billion share repurchases remaining available under the program. In fiscal 2017, the Company expects to repurchase shares totaling $3.5 billion through purchases made from time to time either in the open market or through private off market transactions in accordance with SEC regulations. |

| 3 | In November 2016, the Company entered into an Accelerated Share Repurchase (ASR) agreement with a third-party financial institution to repurchase $190 million of the Company’s common stock. Pursuant to the agreement, the Company paid $190 million to the financial institution and received an initial delivery of 2.4 million shares. In January 2017, the Company finalized the transaction and received an additional 0.2 million shares. The average price paid per share in settlement of the ASR agreement included in the table above was determined with reference to the volume-weighted average price of the Company’s common stock over the term of the ASR agreement. See Note 9 to the consolidated financial statements included in this Annual Report. |

| Selected Statement of Earnings Data (In millions, except per share data) | [removed: 2016 1] [added: 2017] | | | | [removed: 2015] [added: 2016 1, 2] | | | | [removed: 2014] [added: 2015] | | | | [removed: 2013] [added: 2014] | | | | [removed: 2012] [added: 2013] | | |

| Net sales | $ | [removed: 65,017] [added: 68,619] | | | $ | [removed: 59,074] [added: 65,017] | | | $ | [removed: 56,223] [added: 59,074] | | | $ | [removed: 53,417] [added: 56,223] | | | $ | [removed: 50,521] [added: 53,417] | |

| Gross margin | [removed: 22,464] [added: 23,409] | | | | [removed: 20,570] [added: 22,464] | | | | [removed: 19,558] [added: 20,570] | | | | [removed: 18,476] [added: 19,558] | | | | [removed: 17,327] [added: 18,476] | | |

| Operating income | [removed: 5,846] [added: 6,586] | | | | [removed: 4,971] [added: 5,846] | | | | [removed: 4,792] [added: 4,971] | | | | [removed: 4,149] [added: 4,792] | | | | [removed: 3,560] [added: 4,149] | | |

| Net earnings | [removed: 3,093] [added: 3,447] | | | | [removed: 2,546] [added: 3,093] | | | | [removed: 2,698] [added: 2,546] | | | | [removed: 2,286] [added: 2,698] | | | | [removed: 1,959] [added: 2,286] | | |

| Basic earnings per common share | [removed: 3.48] [added: 4.09] | | | | [removed: 2.73] [added: 3.48] | | | | [removed: 2.71] [added: 2.73] | | | | [removed: 2.14] [added: 2.71] | | | | [removed: 1.69] [added: 2.14] | | |

| Diluted earnings per common share | [removed: 3.47] [added: 4.09] | | | | [removed: 2.73] [added: 3.47] | | | | [removed: 2.71] [added: 2.73] | | | | [removed: 2.14] [added: 2.71] | | | | [removed: 1.69] [added: 2.14] | | |

| Dividends per share | $ | [removed: 1.33] [added: 1.58] | | | $ | [removed: 1.07] [added: 1.33] | | | $ | [removed: 0.87] [added: 1.07] | | | $ | [removed: 0.70] [added: 0.87] | | | $ | [removed: 0.62] [added: 0.70] | |

| Total assets | $ | [removed: 34,408] [added: 35,291] | | | $ | [removed: 31,266] [added: 34,408] | | | $ | [removed: 31,721] [added: 31,266] | | | $ | [removed: 32,471] [added: 31,721] | | | $ | [removed: 32,441] [added: 32,471] | |

| Long-term debt, excluding current maturities | $ | [removed: 14,394] [added: 15,564] | | | $ | [removed: 11,545] [added: 14,394] | | | $ | [removed: 10,806] [added: 11,545] | | | $ | [removed: 10,077] [added: 10,806] | | | $ | [removed: 9,022] [added: 10,077] | |

2 Fiscal 2016 includes the acquisition of RONA inc. See Note 2 to the consolidated financial statements included in this Annual Report.

Our management, with the participation of the Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our Internal Control as of February [removed: 3, 2017.][added: 2, 2018.]

Based on our management’s assessment, we have concluded that, as of February [removed: 3, 2017,] [added: 2, 2018,] our Internal Control is effective.

Management’s assessment of the effectiveness of the Company’s internal control over financial reporting excluded [removed: RONA inc. (RONA),] [added: Maintenance Supply Headquarters,] a wholly owned subsidiary of Lowe’s Companies Inc. that consisted of the net assets purchased from [removed: RONA] [added: Maintenance Supply Headquarters] in [removed: May 2016.][added: June 2017.]

[removed: RONA] [added: Maintenance Supply Headquarters] represented [removed: 8.9%] [added: 1.5%] and [removed: 3.4%] [added: 0.3%] of the Company’s consolidated total assets and consolidated net sales, respectively, as of and for the year ended February [removed: 3, 2017.][added: 2, 2018.]

This acquisition is more fully discussed in Note 2 to our Consolidated Financial Statements for fiscal year [removed: 2016.][added: 2017.]

Their report appears on page [removed: 38.][added: 39.]

We have audited the accompanying consolidated balance sheets of Lowe’s Companies, Inc. and subsidiaries (the “Company”) as of February [removed: 3, 2017 and January 29, 2016,] [added: 2, 2018] and [added: February 3, 2017,] the related consolidated statements of earnings, comprehensive income, shareholders’ equity, and cash flows for each of the three fiscal years in the period ended February [removed: 3, 2017.][added: 2, 2018, and the related notes and the schedule listed in the Index at Item 15 (collectively referred to as the “financial statements”).]

These financial statements [removed: and financial statement schedule] are the responsibility of the [removed: Company’s] [added: Company's] management.

Our responsibility is to express an opinion on the [added: Company's] financial statements [removed: and financial statement schedule] based on our audits.

We conducted our audits in accordance with the standards of the [removed: Public Company Accounting Oversight Board (United States).][added: PCAOB.]

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material [removed: misstatement.][added: misstatement, whether due to error or fraud.]

[removed: An audit includes] [added: Such procedures included] examining, on a test basis, evidence [removed: supporting] [added: regarding] the amounts and disclosures in the financial statements.

[removed: An audit] [added: Our audits] also [removed: includes assessing] [added: included evaluating] the accounting principles used and significant estimates made by management, as well as evaluating the overall [added: presentation of the] financial [removed: statement presentation.][added: statements.]

In our opinion, [removed: such consolidated] [added: the] financial statements present fairly, in all material respects, the financial position of the Company [removed: at] [added: as of] February [removed: 3, 2017] [added: 2, 2018] and [removed: January 29, 2016,] [added: February 3, 2017,] and the results of its operations and its cash flows for each of the three fiscal years in the period ended February [removed: 3, 2017,] [added: 2, 2018] in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United [removed: States),] [added: States) (PCAOB),] the [removed: Company’s] [added: Company's] internal control over financial reporting as of February [removed: 3, 2017,] [added: 2, 2018,] based on [removed: the] criteria established in Internal [removed: Control—Integrated] [added: Control - Integrated] Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated April [removed: 3, 2017] [added: 2, 2018,] expressed an unqualified opinion on the [removed: Company’s] [added: Company's] internal control over financial reporting.

We have audited the internal control over financial reporting of Lowe’s Companies, Inc. and subsidiaries (the “Company”) as of February [removed: 3, 2017,] [added: 2, 2018,] based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway [removed: Commission.][added: Commission (COSO).]

As described in Management’s Report on Internal Control over Financial Reporting, management excluded from its assessment the internal control over financial reporting at [removed: RONA Inc. (“RONA”),] [added: Maintenance Supply Headquarters,] which was acquired on [removed: May 20, 2016] [added: June 23, 2017] and whose financial statements constitute [removed: 8.9%] [added: 1.5%] and [removed: 3.4%] [added: 0.3%] of the Company’s consolidated total assets and consolidated net sales, respectively, as of and for the fiscal year ended February [removed: 3, 2017.][added: 2, 2018.]

Accordingly, our audit did not include the internal control over financial reporting at [removed: RONA.][added: Maintenance Supply Headquarters.]

We conducted our audit in accordance with the standards of the [removed: Public Company Accounting Oversight Board (United States).][added: PCAOB.]

A company’s internal control over financial reporting is a process designed [removed: by, or under the supervision of, the company’s principal executive and principal financial officers, or persons performing similar functions, and effected by the company’s board of directors, management, and other personnel] to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

Also, projections of any evaluation of [removed: the] effectiveness [removed: of the internal control over financial reporting] to future periods are subject to the risk that [removed: the] controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of February [removed: 3, 2017,] [added: 2, 2018,] based on [removed: the] criteria established in Internal Control - Integrated Framework (2013) issued by [removed: the Committee of Sponsoring Organizations of the Treadway Commission.][added: COSO.]

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United [removed: States),] [added: States) (PCAOB),] the consolidated financial statements and financial statement schedule as of and for the fiscal year ended February [removed: 3, 2017] [added: 2, 2018] of the Company and our report dated April [removed: 3, 2017] [added: 2, 2018,] expressed an unqualified opinion on those financial [removed: statements and financial statement schedule.][added: statements.]

| | February [removed: 3, 2017] [added: 2, 2018] | | | | % Sales | | | [removed: January 29, 2016] [added: February 3, 2017] | | | | % Sales | | | January [removed: 30, 2015] [added: 29, 2016] | | | | % Sales | |

| Net sales | $ | [removed: 65,017] [added: 68,619] | | | 100.00 | % | | $ | [removed: 59,074] [added: 65,017] | | | 100.00 | % | | $ | [removed: 56,223] [added: 59,074] | | | 100.00 | % |

| Cost of sales | [removed: 42,553] [added: 45,210] | | | | [removed: 65.45] [added: 65.89] | | | [removed: 38,504] [added: 42,553] | | | | [removed: 65.18] [added: 65.45] | | | [removed: 36,665] [added: 38,504] | | | | [removed: 65.21] [added: 65.18] | |

| Gross margin | [removed: 22,464] [added: 23,409] | | | | [removed: 34.55] [added: 34.11] | | | [removed: 20,570] [added: 22,464] | | | | [removed: 34.82] [added: 34.55] | | | [removed: 19,558] [added: 20,570] | | | | [removed: 34.79] [added: 34.82] | |

| Selling, general and administrative | [removed: 15,129] [added: 15,376] | | | | [removed: 23.27] [added: 22.40] | | | [removed: 14,105] [added: 15,129] | | | | [removed: 23.88] [added: 23.27] | | | [removed: 13,272] [added: 14,105] | | | | [removed: 23.60] [added: 23.88] | |

| Depreciation and amortization | [removed: 1,489] [added: 1,447] | | | | [removed: 2.29] [added: 2.11] | | | [removed: 1,494] [added: 1,489] | | | | [removed: 2.53] [added: 2.29] | | | 1,494 | | | | [removed: 2.66] [added: 2.53] | |

| Operating income | [removed: 5,846] [added: 6,586] | | | | [removed: 8.99] [added: 9.60] | | | [removed: 4,971] [added: 5,846] | | | | [removed: 8.41] [added: 8.99] | | | [removed: 4,792] [added: 4,971] | | | | [removed: 8.53] [added: 8.41] | |

| Interest - net | [removed: 645] [added: 633] | | | | [removed: 0.99] [added: 0.92] | | | [removed: 552] [added: 645] | | | | [removed: 0.93] [added: 0.99] | | | [removed: 516] [added: 552] | | | | [removed: 0.92] [added: 0.93] | |

| Pre-tax earnings | [removed: 5,201] [added: 5,489] | | | | 8.00 | | | [removed: 4,419] [added: 5,201] | | | | [removed: 7.48] [added: 8.00] | | | [removed: 4,276] [added: 4,419] | | | | [removed: 7.61] [added: 7.48] | |

| Income tax provision | [removed: 2,108] [added: 2,042] | | | | [removed: 3.24] [added: 2.98] | | | [removed: 1,873] [added: 2,108] | | | | [removed: 3.17] [added: 3.24] | | | [removed: 1,578] [added: 1,873] | | | | [removed: 2.81] [added: 3.17] | |

| Net earnings | $ | [removed: 3,093] [added: 3,447] | | | [removed: 4.76] [added: 5.02] | % | | $ | [removed: 2,546] [added: 3,093] | | | [removed: 4.31] [added: 4.76] | % | | $ | [removed: 2,698] [added: 2,546] | | | [removed: 4.80] [added: 4.31] | % |

| Basic earnings per common share | $ | [removed: 3.48] [added: 4.09] | | | | | | $ | [removed: 2.73] [added: 3.48] | | | | | | $ | [removed: 2.71] [added: 2.73] | | | | |

| Diluted earnings per common share | $ | [removed: 3.47] [added: 4.09] | | | | | | $ | [removed: 2.73] [added: 3.47] | | | | | | $ | [removed: 2.71] [added: 2.73] | | | | |

| Cash dividends per share | $ | [removed: 1.33] [added: 1.58] | | | | | | $ | [removed: 1.07] [added: 1.33] | | | | | | $ | [removed: 0.87] [added: 1.07] | | | | |

| Foreign currency translation adjustments - net of tax | [removed: 154] [added: 251] | | | | [removed: 0.23] [added: 0.37] | | | [removed: (291] [added: 154] | | [removed: )] | | [removed: (0.49] [added: 0.23] | [removed: )] | | [removed: (86] [added: (291] | | ) | | [removed: (0.15] [added: (0.49] | ) |

| Other comprehensive income/(loss) | [removed: 154] [added: 251] | | | | [removed: 0.23] [added: 0.37] | | | [removed: (291] [added: 154] | | [removed: )] | | [removed: (0.49] [added: 0.23] | [removed: )] | | [removed: (86] [added: (291] | | ) | | [removed: (0.15] [added: (0.49] | ) |

| Comprehensive income | $ | [removed: 3,247] [added: 3,698] | | | [removed: 4.99] [added: 5.39] | % | | $ | [removed: 2,255] [added: 3,247] | | | [removed: 3.82] [added: 4.99] | % | | $ | [removed: 2,612] [added: 2,255] | | | [removed: 4.65] [added: 3.82] | % |

Opinion on the Financial Statements

Basis for Opinion

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

April 2, 2018

We have served as the Company's auditor since 1962.

Opinion on Internal Control over Financial Reporting

Basis for Opinion

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

Definition and Limitations of Internal Control over Financial Reporting

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

April 2, 2018

| Loss on extinguishment of debt | 464 | | | | 0.68 | | | — | | | | — | | | — | | | | — | |

| Net earnings | $ | 3,447 | | | 5.02 | % | | $ | 3,093 | | | 4.76 | % | | $ | 2,546 | | | 4.31 | % |

| Goodwill | | | 1,307 | | | | 1,082 | | |

| | | | | | | | | | |

| | | | | | | | | | |

| February 2, 2018 | 830 | | | | | | | | |

| February 3, 2017 | 866 | | 415 | | | | 433 | | |

| Repurchase of common stock | (40 | ) | | (20 | | ) | | (215 | | ) | | (2,939 | | ) | | | | | | (3,174 | | ) | | | | | | (3,174 | | ) |

| Balance February 2, 2018 | 830 | | | $ | 415 | | | $ | 22 | | | $ | 5,425 | | | $ | 11 | | | $ | 5,873 | | | $ | — | | | $ | 5,873 | |

| Loss on extinguishment of debt | 464 | | | | — | | | | — | | |

Amounts accrued for exit activities were not material for any of the periods presented.

The evaluation begins with a qualitative assessment to determine whether a quantitative impairment test is necessary.

If, after assessing qualitative factors, we determine it is more likely than not that the fair value of the reporting unit is less than the carrying amount, then the two-step goodwill impairment test is necessary.

| Other adjustments 2 | 65 | | | | (41 | | ) | | — | | |

| 1 | Goodwill recorded for 2017 acquisitions relates to Maintenance Supply Headquarters. Goodwill recorded for 2016 acquisitions primarily relates to RONA. See Note 2 for additional information regarding these acquisitions. |

| 2 | Other adjustments primarily consist of changes in the goodwill balance as a result of foreign currency translation. |

| | February 2, 2018 | | | | | | | | February 3, 2017 | | | | | | |

Equity method investments were not significant as of February 2, 2018 and February 3, 2017.

The Company’s equity in earnings and losses of the investees are included in SG&A expense, and were not significant for any of the periods presented.

Net foreign currency translation gains, net of tax, classified in accumulated other comprehensive income were $11 million at February 2, 2018.

The amounts of long-lived assets and net sales outside of the U.S. were approximately 9.8% and 7.8%, respectively, at February 2, 2018.

The amounts of long-lived assets and net sales outside of the U.S. were not significant at January 29, 2016.

All excess tax benefits or deficiencies related to share-based payments are recognized in the provision for income taxes, which has increased the volatility within our provision for income taxes, as these amounts were previously reported within equity.

As a result of the adoption, we have recognized $37 million of excess tax benefits in our provision for income taxes for the fiscal year ended February 2, 2018.

The recognition of these benefits contributed $0.04 to diluted earnings per share for the fiscal year ended February 2, 2018.

Excess tax benefits were historically reflected as a financing activity in the statements of cash flows, and after adoption, are included within operating activities.

Cash paid to tax authorities by the

Company when directly withholding shares for tax purposes continues to be classified as a financing activity in the statement of cash flows.

Mooresville, North Carolina

Our audits also included the financial statement schedule listed in the Index at Item 15.

Also, in our opinion, such 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.

April 3, 2017

Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis.

| | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Goodwill | | | 1,082 | | | | 3.1 | | | 154 | | | | 0.5 | |

| January 29, 2016 | 910 | | 433 | | | | 1.3 | | | 455 | | | | 1.5 | |

| Balance January 31, 2014 | 1,030 | | | $ | 515 | | | $ | — | | | $ | 11,355 | | | $ | (17 | ) | | $ | 11,853 | | | $ | — | | | $ | 11,853 | |

| Tax effect of non-qualified stock options exercised and restricted stock vested | | | | | | | | 41 | | | | | | | | | | | | 41 | | | | | | | | 41 | | |

| Repurchase of common stock | (75 | ) | | (37 | | ) | | (286 | | ) | | (3,604 | | ) | | | | | | (3,927 | | ) | | | | | | (3,927 | | ) |

| | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

The Company recorded long-lived asset impairment losses of $43 million during 2016, including $34 million for operating locations and $9 million for excess properties classified as held-for-use.

The Company recorded impairment losses of $10 million during 2015, including $8 million for operating locations and $2 million for excess properties classified as held-for-use.

The Company recorded long-lived asset impairment of $28 million during 2014, including $26 million for operating locations and $2 million for excess properties classified as held-for-use.

The net carrying amount of excess properties that do not meet the held-for-sale criteria is included in other assets (noncurrent) on the consolidated balance sheets and totaled $174 million and $131 million at February 3, 2017 and January 29, 2016, respectively.

assets and liabilities of the reporting unit as if the reporting unit had been acquired in a business combination.

| Foreign currency translation adjustments | (41 | | ) | | — | | | | — | | |

In May 2016, the Company completed its acquisition of RONA inc. (RONA).

As a result of the acquisition, goodwill increased $976 million which was allocated to the Canada - Retail and Canada - Distribution reporting units.

See Note 2 for additional information on the RONA acquisition.

be reasonably assured.

Reclassifications - Certain prior period amounts have been reclassified to conform to current classifications.

The adoption of this guidance by the Company is not expected to have a material impact on its consolidated financial statements.

The ASU eliminates the APIC pool concept and requires that excess tax benefits and tax deficiencies be recorded in the income statement when awards are settled.

The pronouncement also addresses simplifications related to statement of cash flows classification, accounting for forfeitures, and minimum statutory tax withholding requirements.

This ASU is effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods, with early adoption permitted.

We plan to adopt this ASU in the first quarter of fiscal year 2017.

The primary impact of adopting the ASU will be the recognition of excess tax benefits and deficiencies within income taxes, which will increase the volatility within our provision for income taxes as these excess amounts are dependent on our stock price at the date the awards vest or are exercised.

The Company has elected to continue estimating forfeitures of share-based awards when determining compensation cost to be recognized each period.

The Company does not expect the other provisions within the ASU to have a material impact on its consolidated financial statements.

In January 2016, the FASB issued ASU 2016-01, Recognition and Measurement of Financial Assets and Liabilities.

The ASU requires, among other things, that entities measure equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) at fair value, with changes in fair value recognized in net income.

Under this ASU, entities will no longer be able to recognize unrealized holding gains and losses on available-for-sale equity securities in other comprehensive income, and they will no longer be able to use the cost method of accounting for equity securities that do not have readily determinable fair values.

The guidance for classifying and measuring investments in debt securities and loans is not impacted.

ASU 2016-01 eliminates certain disclosure requirements related to financial instruments measured at amortized cost and adds disclosures related to the measurement categories of financial assets and financial liabilities.

The guidance is effective for annual periods beginning after December 15, 2017.

Early adoption is permitted for only certain portions of the ASU.

[removed: Based upon their evaluation,] the [removed: Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this Annual 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 February [removed: 3, 2017] [added: 2, 2018] that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

Based upon their evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this Annual Report,

The information required by this item with respect to our executive officers appears in Part I of this Annual Report under the heading, “Executive Officers [removed: and Certain Significant Employees] of the Registrant”.

The other information required by this item is furnished by incorporation by reference to the information under the headings “Proposal 1: Election of Directors”, “Information About the Board of Directors and Committees of the Board”, “Section 16(a) Beneficial Ownership Reporting Compliance”, and “Additional Information - Shareholder Proposals for the [removed: 2018] [added: 2019] Annual Meeting” in the definitive Proxy Statement for the [removed: 2017] [added: 2018] annual meeting of shareholders, which will be filed with the SEC within 120 days after the fiscal year ended February [removed: 3, 2017] [added: 2, 2018] (the Proxy Statement).

The information required by this item is furnished by incorporation by reference to the information under the headings “Information About the Board of Directors and Committees of the Board – Compensation of Directors”, “Compensation Discussion and Analysis”, [added: “Compensation Tables”,] and “Compensation Committee [removed: Report”] [added: Interlocks and Insider Participation”] in the Proxy Statement.

| | [Reports of Independent Registered Public Accounting [removed: Firm](#s970BA3A907EE55478806A8E8985FA920)] [added: Firm](#s2095CAA49048562C99D6D982AFDCA62F)] | [removed: [37](#s970BA3A907EE55478806A8E8985FA920)] [added: [38](#s2095CAA49048562C99D6D982AFDCA62F)] |

| | [Consolidated Statements of Earnings for each of the three fiscal years in the period ended February [removed: 3, 2017](#s77D9DEC20E0F5B60971784D9481640A8)] [added: 2, 2018](#s449BCFBA015957E984BCC5F9207D15A7)] | [removed: [39](#s77D9DEC20E0F5B60971784D9481640A8)] [added: [40](#s449BCFBA015957E984BCC5F9207D15A7)] |

| | [Consolidated Statements of Comprehensive Income for each of the three fiscal years in the period ended February [removed: 3, 2017](#s085A1D4AC3B7598B8054FC649F4E391B)] [added: 2, 2018](#s77ADB180BEFB504989436BB5A4BE6753)] | [removed: [39](#s085A1D4AC3B7598B8054FC649F4E391B)] [added: [40](#s77ADB180BEFB504989436BB5A4BE6753)] |

| | [Consolidated Balance Sheets at February [removed: 3, 2017] [added: 2, 2018] and [removed: January 29, 2016](#sE510D2CFC28B5D68BB556DD8EEF016B7)] [added: February 3, 2017](#s84428A04BBA65C17AEE962B247946D10)] | [removed: [40](#sE510D2CFC28B5D68BB556DD8EEF016B7)] [added: [41](#s84428A04BBA65C17AEE962B247946D10)] |

| | [Consolidated Statements of Shareholders’ Equity for each of the three fiscal years in the period ended February [removed: 3, 2017](#s20BC051AF0855E98846528800CB6CCCD)] [added: 2, 2018](#sE1431B65C3595B2EA61C6C99F9FBCE0E)] | [removed: [41](#s20BC051AF0855E98846528800CB6CCCD)] [added: [42](#sE1431B65C3595B2EA61C6C99F9FBCE0E)] |

| | [Consolidated Statements of Cash Flows for each of the three fiscal years in the period ended February [removed: 3, 2017](#s36D9A46B78065032ACCB271F8CA8EA2B)] [added: 2, 2018](#sF4AF99DD408557F2A1EF7FF8F2658A5B)] | [removed: [42](#s36D9A46B78065032ACCB271F8CA8EA2B)] [added: [43](#sF4AF99DD408557F2A1EF7FF8F2658A5B)] |

| | [Notes to Consolidated Financial Statements for each of the three fiscal years in the period ended February [removed: 3, 2017](#s0CF2BAC6CFD553A79EAAC407DEFE3694)] [added: 2, 2018](#s4E39BC8A9F4C5E88A6986B7C0A64A8EA)] | [removed: [43](#s0CF2BAC6CFD553A79EAAC407DEFE3694)] [added: [44](#s4E39BC8A9F4C5E88A6986B7C0A64A8EA)] |

| Reserve for loss on obsolete inventory | $ | [removed: 68] [added: 59] | | | $ | [removed: —] [added: 18] | | | [added: 1] | | $ | [removed: (16] [added: —] | [removed: )] | | [removed: 1] | | $ | [removed: 52] [added: 77] | |

| Reserve for sales returns | [removed: 58] [added: 71] | | | | [removed: 7] [added: —] | | | | [removed: 3] | | — | | | | | | [removed: 65] [added: 71] | | |

| Deferred tax valuation allowance | [removed: 164] [added: 578] | | | | [removed: 6] [added: —] | | | | [removed: 4] | | [removed: —] [added: (103] | | [added: )] | | [added: 4] | | [removed: 170] [added: 475] | | |

| Reserve for exit activities | [removed: 54] [added: 66] | | | | [removed: 14] [added: 19] | | | | | | [removed: (15] [added: (25] | | ) | | 6 | | [removed: 53] [added: 60] | | |

| 4 | Represents an [removed: increase] [added: increase/(decrease)] in the required reserve based on the Company’s evaluation of deferred tax assets. |

| 2.1 | | [removed: Arrangement] [added: [Arrangement] Agreement, dated as of February 2, 2016, among Lowe’s Companies, Inc., Lowe’s Companies Canada, ULC and RONA [removed: inc.(1)] [added: inc.](http://www.sec.gov/Archives/edgar/data/60667/000006066716000276/exhibit21.htm)(1)] | | 10-K | | 001-07898 | | 2.1 | | March 29, 2016 |

| 3.1 | | [removed: Restated] [added: [Restated] Charter of Lowe’s Companies, [removed: Inc.] [added: Inc.](http://www.sec.gov/Archives/edgar/data/60667/000006066709000096/exhibit031.htm)] | | 10-Q | | 001-07898 | | 3.1 | | September 1, 2009 |

| 3.2 | | [removed: Bylaws] [added: [Bylaws] of Lowe’s Companies, Inc., as amended and restated May 27, [removed: 2016.] [added: 2016.](http://www.sec.gov/Archives/edgar/data/60667/000006066716000318/exhibit31.htm)] | | 8-K | | 001-07898 | | 3.1 | | May 31, 2016 |

| 4.1 | | [added: [Amended and Restated] Indenture, dated as of [removed: April 15, 1992,] [added: December 1, 1995,] between Lowe’s Companies, Inc. and U.S. Bank National Association, as successor [removed: trustee.] [added: trustee.](http://www.sec.gov/Archives/edgar/data/60667/0000916641-95-000439.txt)] | | [removed: S-3] [added: 8-K] | | [removed: 033-47269] [added: 001-07898] | | 4.1 | | [removed: April 16, 1992] [added: December 15, 1995] |

| [removed: 4.2] [added: 4.3] | | [added: [First Supplemental Indenture, dated as of February 23, 1999, to the] Amended and Restated Indenture, dated as of December 1, 1995, between Lowe’s Companies, Inc. and U.S. Bank National Association, as successor [removed: trustee.] [added: trustee.](http://www.sec.gov/Archives/edgar/data/60667/0000060667-99-000010.txt)] | | [removed: 8-K] [added: 10-K] | | 001-07898 | | [removed: 4.1] [added: 10.13] | | [removed: December 15, 1995] [added: April 19, 1999] |

| [removed: 4.3] [added: 4.2] | | [removed: Form] [added: [Form] of Lowe’s Companies, Inc.’s 6 7/8% Debentures due February 15, [removed: 2028.] [added: 2028.](http://www.sec.gov/Archives/edgar/data/60667/0000916641-98-000151.txt)] | | 8-K | | 001-07898 | | 4.2 | | February 20, 1998 |

| [removed: 4.4] [added: 4.5] | | [removed: First] [added: [Third] Supplemental Indenture, dated as of [removed: February 23, 1999,] [added: October 6, 2005,] to the Amended and Restated Indenture, dated as of December 1, 1995, between Lowe’s Companies, Inc. and U.S. Bank National Association, as successor [removed: trustee.] [added: trustee, including as an exhibit thereto a form of Lowe’s Companies, Inc.’s 5.5% Notes maturing in October 2035.](http://www.sec.gov/Archives/edgar/data/60667/000006066707000052/exhibit45.htm)] | | 10-K | | 001-07898 | | [removed: 10.13] [added: 4.5] | | April [removed: 19, 1999] [added: 3, 2007] |

| [removed: 4.5] [added: 4.4] | | [removed: Form] [added: [Form] of Lowe’s Companies, Inc.’s 6 1/2% Debentures due March 15, [removed: 2029.] [added: 2029.](http://www.sec.gov/Archives/edgar/data/60667/0000060667-99-000010.txt)] | | 10-K | | 001-07898 | | 10.19 | | April 19, 1999 |

| 4.6 | | [removed: Third] [added: [Fourth] Supplemental Indenture, dated as of October [removed: 6, 2005,] [added: 10, 2006,] to the Amended and Restated Indenture, dated as of December 1, 1995, between Lowe’s Companies, Inc. and U.S. Bank National Association, as successor trustee, including as an exhibit thereto a form of Lowe’s Companies, Inc.’s [removed: 5.5%] [added: 5.80%] Notes maturing in October [removed: 2035.] [added: 2036.](http://www.sec.gov/Archives/edgar/data/60667/000095014406009385/g03561paexv4w5.htm)] | | [removed: 10-K] [added: S-3 (POSASR)] | | [removed: 001-07898] [added: 333-137750] | | 4.5 | | [removed: April 3, 2007] [added: October 10, 2006] |

| [removed: 4.7] [added: 4.9] | | [removed: Fourth] [added: [Seventh] Supplemental Indenture, dated as of [removed: October 10, 2006,] [added: November 22, 2010,] to the Amended and Restated Indenture, dated as of December 1, 1995, between Lowe’s Companies, Inc. and U.S. Bank National Association, as successor trustee, including as an exhibit thereto a form of Lowe’s Companies, Inc.’s [removed: 5.80%] [added: 3.750%] Notes maturing in [removed: October 2036.] [added: April 2021.](http://www.sec.gov/Archives/edgar/data/60667/000095012310107654/g25352exv4w1.htm)] | | [removed: S-3 (POSASR)] [added: 8-K] | | [removed: 333-137750] [added: 001-07898] | | [removed: 4.5] [added: 4.1] | | [removed: October 10, 2006] [added: November 22, 2010] |

| [removed: 4.8] [added: 4.7] | | [removed: Fifth] [added: [Fifth] Supplemental Indenture, dated as of September 11, 2007, to the Amended and Restated Indenture, dated as of December 1, 1995, between Lowe’s Companies, Inc. and U.S. Bank National Association, as successor trustee, including as exhibits thereto a form of Lowe’s Companies, Inc.’s 6.10% Notes maturing in September 2017 and a form of Lowe’s Companies, Inc.’s 6.65% Notes maturing in September [removed: 2037.] [added: 2037.](http://www.sec.gov/Archives/edgar/data/60667/000006066707000110/exhibit41.htm)] | | 8-K | | 001-07898 | | 4.1 | | September 11, 2007 |

| [removed: 4.9] [added: 4.8] | | [removed: Sixth] [added: [Sixth] Supplemental Indenture, dated as of April 15, 2010, to the Amended and Restated Indenture, dated as of December 1, 1995, between Lowe’s Companies, Inc. and U.S. Bank National Association, as successor trustee, including as exhibits thereto a form of Lowe’s Companies, Inc.’s 4.625% Notes maturing in April 2020 and a form of Lowe’s Companies, Inc.’s 5.800% Notes maturing in April [removed: 2040.] [added: 2040.](http://www.sec.gov/Archives/edgar/data/60667/000095012310035219/g22916exv4w1.htm)] | | 8-K | | 001-07898 | | 4.1 | | April 15, 2010 |

| 4.10 | | [removed: Seventh] [added: [Eighth] Supplemental Indenture, dated as of November [removed: 22, 2010,] [added: 23, 2011,] to the Amended and Restated Indenture, dated as of December 1, 1995, between Lowe’s Companies, Inc. and U.S. Bank National Association, as successor trustee, including as [removed: an exhibit] [added: exhibits] thereto a form of Lowe’s Companies, Inc.’s [removed: 3.750%] [added: 3.800%] Notes maturing in [removed: April 2021.] [added: November 2021 and a form of Lowe’s Companies, Inc.’s 5.125% Notes maturing in November 2041.](http://www.sec.gov/Archives/edgar/data/60667/000119312511320833/d259831dex41.htm)] | | 8-K | | 001-07898 | | 4.1 | | November [removed: 22, 2010] [added: 23, 2011] |

| 4.11 | | [removed: Eighth] [added: [Ninth] Supplemental Indenture, dated as of [removed: November] [added: April] 23, [removed: 2011,] [added: 2012,] to the Amended and Restated Indenture, dated as of December 1, 1995, between Lowe’s Companies, Inc. and U.S. Bank National Association, as successor trustee, including as exhibits thereto a form of Lowe’s Companies, Inc.’s [removed: 3.800%] [added: 1.625%] Notes maturing in [removed: November 2021] [added: April 2017, a form of Lowe’s Companies, Inc.’s 3.120% Notes maturing in April 2022] and a form of Lowe’s Companies, Inc.’s [removed: 5.125%] [added: 4.650%] Notes maturing in [removed: November 2041.] [added: April 2042.](http://www.sec.gov/Archives/edgar/data/60667/000119312512175776/d337503dex41.htm)] | | 8-K | | 001-07898 | | 4.1 | | [removed: November] [added: April] 23, [removed: 2011] [added: 2012] |

| 4.12 | | [removed: Ninth] [added: [Tenth] Supplemental Indenture, dated as of [removed: April 23, 2012,] [added: September 11, 2013,] to the Amended and Restated Indenture, dated as of December 1, 1995, between Lowe’s Companies, Inc. and U.S. Bank National Association, as successor trustee, including as exhibits thereto a form of Lowe’s Companies, Inc.’s [removed: 1.625% Notes maturing in April 2017, a form of Lowe’s Companies, Inc.’s 3.120%] [added: 3.875%] Notes maturing in [removed: April 2022] [added: September 2023] and a form of Lowe’s Companies, Inc.’s [removed: 4.650%] [added: 5.000%] Notes maturing in [removed: April 2042.] [added: September 2043.](http://www.sec.gov/Archives/edgar/data/60667/000119312513364140/d596663dex41.htm)] | | 8-K | | 001-07898 | | 4.1 | | [removed: April 23, 2012] [added: September 11, 2013] |