Lowe's (LOW) 10-K risk factor changes: FY2019 vs FY2018

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: 2018] [added: 2019] annual meeting of shareholders (as defined in Item 10 of Part III of this Annual Report) under “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.”

Failure to identify such trends, adapt our business concept, and implement change, growth, and productivity initiatives successfully could negatively affect our relationship with our customers, the demand for the home improvement products and services we sell, the rate of growth of our business, our market [removed: share,] [added: share] and results of operations.

Our interactions with customers has evolved into an omni-channel experience as they increasingly are using computers, tablets, mobile phones and other devices to shop in our stores and online and provide feedback and public commentary about all [removed: aspects of our business.]

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

Our results of operations, financial condition or business prospects could also be adversely affected if we fail to provide a consistent experience for our customers, regardless of sales channel, if our technology systems do not meet our customers’ expectations, if we are unable to counteract new developments and innovations implemented by our [removed: competitors,] [added: competitors] or if we are unable to attract, [removed: retain,] [added: retain] and manage the talent succession of additional personnel at various levels of the Company who have the skills and capabilities we need to implement our strategic initiatives and drive the changes that are essential to successfully adapting our business concept in the rapidly changing retail environment.

Despite our continued vigilance and investment in information security, [added: we, like others in our industry, are subject to the risk that unauthorized parties may attempt to gain access to our systems or our information through fraud or other means of deceiving our associates, third party providers, or vendors, and] we or our third-party service providers cannot guarantee that we or they are able to adequately anticipate or prevent a [added: future] breach in our or their systems that results in the unauthorized access to, destruction, misuse or release of personal information or other sensitive data.

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

Our [added: systems] 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.

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

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

We accept payments using a variety of methods, including credit cards, debit cards, credit accounts, our private label and co-branded credit cards, gift cards, [removed: direct debit from a customer’s bank account,] consumer invoicing and physical bank checks, and we may offer different payment options over time.

A [removed: critical] challenge we face is attracting and retaining a sufficiently diverse workforce that can deliver relevant, culturally competent and differentiated experiences for a wide variety of culturally diverse customers.

Additionally, in order to deliver on the omni-channel expectations of our customers, we rely on the specialized training and capabilities of corporate support [removed: staff] [added: staff,] which are broadly sought after by our competitors.

Furthermore, our ability to meet our labor [removed: needs] [added: needs, particularly in a competitive labor market,] while controlling our costs is subject to a variety of external factors, including wage rates, the availability of and competition for talent, health care and other benefit costs, our brand image and reputation, changing [removed: demographics,] [added: demographics] and adoption of new or revised [removed: employment] [added: immigration, employment,] and labor laws and regulations.

If we do not successfully manage the [removed: transition] [added: transitions] associated with the [removed: retirement] [added: appointment] of [removed: our] [added: a new Chairman,] Chief Executive Officer and [removed: the appointment] [added: Chief Financial Officer and other members] of [added: our leadership team as part of] a new [removed: Chief Executive Officer,] [added: leadership structure,] it could [added: have an adverse impact on our business operations as well as] be viewed negatively by our customers and [removed: shareholders and could have an adverse impact on our business.][added: shareholders.]

On [removed: March 26,] [added: June 4,] 2018, we announced that [removed: Robert] [added: Marshall] A.

[added: 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.

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

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 [added: (NAFTA)] and the rules of the World Trade Organization.

[removed: If our fulfillment network does not operate properly or if a vendor fails to deliver on its commitments, we could experience delays in inventory, increased] delivery costs or merchandise out-of-stocks that could lead to lost sales and decreased customer confidence, and adversely affect our results of operations.

Expanding [added: and operating] internationally presents unique challenges that may increase the anticipated costs and [removed: risks,] [added: risks of operation] and [added: expansion, and] slow the anticipated [removed: rate,] [added: rate] of [removed: such] expansion.

If we fail to comply with these laws, rules and regulations, or the manner in which they are interpreted or applied, we may be subject to government enforcement action, litigation, damage to our reputation, civil and criminal liability, damages, fines and [removed: penalties,] [added: penalties] and increased cost of regulatory compliance, any of which could adversely affect our results of operations and financial performance.

These laws, rules and regulations include, but are not limited to, import and export requirements, U.S. laws such as the Foreign Corrupt Practices [removed: Act,] [added: Act] and local laws prohibiting corrupt payments to governmental officials.

The timing of the final resolutions to lawsuits, regulatory [removed: inquiries,] [added: inquiries] and governmental and other legal proceedings is typically uncertain.

None of the legal proceedings in which we are currently involved, individually or collectively, [removed: is] [added: are] considered material.

Our efforts to provide an omni-channel experience for our customers include investing in, maintaining and making ongoing improvements of our existing management information systems that support operations, such as sales, inventory replenishment, [removed: 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 [removed: attacks,] [added: attacks] and telecommunications failures, and as a result we may incur significant expense, data loss as well as an erosion of customer confidence.

These include, but are not limited to, periods of slow economic growth or recession, decreasing housing turnover or home price appreciation, volatility and/or lack of liquidity from time to time in U.S. and world financial markets and the consequent reduced availability and/or higher cost of borrowing to Lowe’s and its customers, slower rates of growth in real disposable personal income that could affect the rate of growth in consumer spending, high rates of unemployment, consumer debt levels, fluctuations in fuel and energy costs, inflation or deflation of commodity prices, natural [removed: disasters,] [added: disasters] and acts of both domestic and international terrorism.

aspects of our business.

or damage to our systems, which could result in theft of our proprietary property.

On May 20, 2018, the Board of Directors of the Company appointed Marvin R.

Ellison as President and Chief Executive Officer and Richard R.

Dreiling as Chairman of the Board of Directors, in each case, effective as of July 2, 2018.

On July 2, 2018, Mr. Ellison assumed the office of President and Chief Executive Officer and joined the Board of Directors, and Mr. Dreiling became Chairman of the Board of Directors.

Mr. Ellison and Mr. Dreiling succeeded Robert A.

Niblock.

who retired as Chairman, President and Chief Executive Officer of the Company and member of the Board of Directors effective July 2, 2018.

Croom planned to retire from the Company, effective October 5, 2018, and on August 22, 2018, we named David M.

Denton as Executive Vice President, Chief Financial Officer, which appointment became effective on November 19, 2018.

In addition, on July 9, 2018, we announced the implementation of a new leadership structure and named William P.

Boltz as Executive Vice President, Merchandising effective August 15, 2018.

On July 20, 2018, we named Joseph M.

McFarland III as Executive Vice President, Stores, effective August 15, 2018.

On August 7, 2018, we named Donald E.

Frieson as Executive Vice President, Supply Chain, effective August 8, 2018.

On November 2, 2018, the Company announced the appointment of Seemantini Godbole as Chief Information Officer, effective November 12, 2018.

For example, in the fourth quarter of fiscal 2018, we recognized a $952 million goodwill impairment charge on our Canadian business.

Further, online and omni-channel retailers continue to focus on delivery services, as customers are increasingly seeking faster, guaranteed delivery times and low-price or free shipping, and we must make investments to keep up with our customers’ evolving shopping preferences.

Our ability to be competitive on delivery times, delivery costs, and delivery options depends on many factors, including successful implementation of our initiatives related to supply chain transformation.

Political developments in the United States, including possible termination of NAFTA, or failure to finalize and implement the United States-Mexico-Canada Agreement (USMCA), the proposed replacement for NAFTA, may have implications for the trade arrangements among the United States, Mexico, and Canada.

If our fulfillment network does not operate properly or if a vendor fails to deliver on its commitments, we could experience delays in inventory, increased

We operate stores in Canada and Mexico.

We have previously announced our intent to exit our Mexican operations, and we are currently exploring exit alternatives.

merchandise ordering, project design and execution, transportation, receipt processing and fulfillment.

Discontinuation, reform or replacement of LIBOR and other benchmark rates, or uncertainty related to the potential for any of the foregoing, may adversely affect our business.

The U.K. Financial Conduct Authority announced in 2017 that it intends to phase out LIBOR by the end of 2021.

In addition, other regulators have suggested reforming or replacing other benchmark rates.

The discontinuation, reform or replacement of LIBOR or any other benchmark rates may have an unpredictable impact on contractual mechanics in the credit markets or cause disruption to the broader financial markets.

Uncertainty as to the nature of such potential discontinuation, reform or replacement may negatively impact interest expense related to borrowings under our credit facilities.

We may in the future pursue amendments to our credit facilities to provide for a transition mechanism or other reference rate in anticipation of LIBOR’s discontinuation, but we may not be able to reach agreement with our lenders on any such amendments.

Further, certain of our current debt instruments limit the amount of indebtedness we and our subsidiaries may incur.

As a result, additional financing to replace our LIBOR-based debt may be unavailable, more expensive or restricted by the terms of our outstanding indebtedness.

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

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

We expect continued store growth over the next five years in Canada and Mexico.

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: 2, 2018] [added: 1, 2019] (our fiscal years [removed: 2017, 2016] [added: 2018, 2017] and [removed: 2015).][added: 2016).]

Fiscal year 2016 contains 53 weeks of operating results compared to fiscal years [removed: 2017] [added: 2018] and [removed: 2015] [added: 2017] which contain 52 weeks.

Unless otherwise noted, all references herein for the years [removed: 2017, 2016] [added: 2018, 2017] and [removed: 2015] [added: 2016] represent the fiscal years ended February [added: 1, 2019, February] 2, [removed: 2018,] [added: 2018 and] February 3, [removed: 2017 and January 29, 2016,] [added: 2017,] respectively.

The increase in total sales was driven [removed: primarily] by [removed: an increase in] [added: 4.0%] comparable [removed: sales,] [added: sales growth,] the addition of RONA [removed: in May] [added: during the second quarter] of [removed: 2016,] [added: 2016 (+2.2%),] new [removed: stores,] [added: stores (+0.7%),] and the acquisition of Maintenance Supply Headquarters [removed: in June 2017,] [added: (+0.3%),] partially offset by the [added: impact of the] 53rd week [removed: impacts] in [removed: the prior year.][added: 2016 and resulting week shift in 2017 (-1.3%).]

Diluted earnings per common share [removed: increased 17.9%] [added: decreased 30.5%] in fiscal year [removed: 2017] [added: 2018] to [removed: $4.09] [added: $2.84] from [removed: $3.47] [added: $4.09] in [removed: 2016.][added: 2017.]

Adjusting [removed: 2017] [added: 2018] and [removed: 2016] [added: 2017] 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: 10.0%] [added: 16.4%] in fiscal year [removed: 2017] [added: 2018] to [removed: $4.39] [added: $5.11] from [removed: $3.99] [added: $4.39] in [removed: 2016] [added: 2017] (see discussion on non-GAAP financial measures beginning on page [removed: 22).][added: 25).]

For [removed: 2017,] [added: 2018,] cash flows from operating activities were approximately [removed: $5.1] [added: $6.2] billion, with [removed: $1.1] [added: $1.2] billion used for capital expenditures.

Continuing to deliver on our commitment to return excess cash to shareholders, the Company repurchased [removed: 39.1] [added: 31.2] million shares of stock through the share repurchase program for [removed: $3.1] [added: $3.0] billion and paid [removed: $1.3] [added: $1.5] billion in dividends during the year.

| | [removed: 2017] [added: 20172] | | [removed: 2016] [added: 20162] | | 2017 vs. 2016 | | | 2017 vs. 2016 | |

| Net sales | 100.00% | | 100.00% | | N/A | | | [removed: 10.1] [added: 3.9] | % |

| Pre-tax earnings | [removed: 8.00] [added: 4.76] | | [removed: 7.48] [added: 8.00] | | [removed: 52] [added: (324] | [added: )] | | [removed: 17.7] [added: (38.2] | [added: )] |

| 1 | The fiscal year ended February 3, 2017 had 53 weeks. The fiscal years ended February [added: 1, 2019 and February] 2, 2018 [removed: and January 29, 2016] had 52 weeks. |

| Other Metrics | [removed: 2017] [added: 2018] | | | | [removed: 2016] [added: 2017] | | | | [removed: 2015] [added: 2016] | | |

| Comparable sales increase 2 | [removed: 4.0] [added: 2.4] | | % | | [removed: 4.2] [added: 4.0] | | % | | [removed: 4.8] [added: 4.2] | | % |

| Total customer transactions (in millions) 1 | [removed: 953] [added: 941] | | | | [removed: 945] [added: 953] | | | | [removed: 878] [added: 945] | | |

| Average ticket 3 | $ | [removed: 72.00] [added: 75.79] | | | $ | [removed: 68.83] [added: 72.00] | | | $ | [removed: 67.26] [added: 68.83] | |

| Number of stores [removed: 4] | [removed: 2,152] [added: 2,015] | | | | [removed: 2,129] [added: 2,152] | | | | [removed: 1,857] [added: 2,129] | | |

| Sales floor square feet (in millions) | [removed: 215] [added: 209] | | | | [removed: 213] [added: 215] | | | | [removed: 202] [added: 213] | | |

| Average store size selling square feet (in thousands) [removed: 5] [added: 4] | [removed: 100] [added: 104] | | | | 100 | | | | [removed: 109] [added: 100] | | |

| Return on average assets [removed: 6] [added: 5] | [removed: 9.5] [added: 6.4] | | % | | [removed: 8.9] [added: 9.5] | | % | | [removed: 7.8] [added: 8.9] | | % |

| Return on average shareholders’ equity [removed: 7] [added: 6] | [removed: 59.2] [added: 43.8] | | % | | [removed: 44.4] [added: 59.2] | | % | | [removed: 28.8] [added: 44.4] | | % |

| Return on invested capital [removed: 8] [added: 7] | [removed: 18.8] [added: 12.8] | | % | | [removed: 15.8] [added: 18.8] | | % | | [removed: 14.1] [added: 15.8] | | % |

| 2 | A comparable location is defined as a [added: retail] location that has been open longer than 13 months. A location that is identified for relocation is no longer considered comparable in the month of its relocation. The relocated location must then remain open longer than 13 months to be considered comparable. A location we have decided to [removed: close] [added: exit] is no longer considered comparable as of the beginning of the month in which we announce its [removed: closing.] [added: exit.] 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 positively impacted fiscal [added: 2018 and fiscal] 2017 by approximately [added: 80 basis points and] 120 basis [removed: points.] [added: points, respectively. Online sales did not have a meaningful impact on fiscal 2016.] The comparable store sales calculation for fiscal 2016 included in the preceding table was calculated using sales for a comparable 53-week period. |

| [removed: 5] [added: 4] | Average store size selling square feet is defined as sales floor square feet divided by the number of stores open at the end of the period. The average Lowe’s-branded home improvement store has approximately 112,000 square feet of retail selling space. |

| [removed: 6] [added: 5] | Return on average assets is defined as net earnings divided by average total assets for the last five quarters. |

| [removed: 7] [added: 6] | Return on average shareholders’ equity is defined as net earnings divided by average shareholders’ equity for the last five quarters. |

| [removed: 8] [added: 7] | Return on invested capital is a non-GAAP financial measure. See below for additional information and a reconciliation to the most comparable GAAP measure. |

| (In millions, except percentage data) | [removed: 2017] [added: 2018] | | | | [removed: 2016] [added: 2017] | | | | [removed: 2015] [added: 2016] | | |

| Net earnings | $ | [removed: 3,447] [added: 2,314] | | | $ | [removed: 3,093] [added: 3,447] | | | $ | [removed: 2,546] [added: 3,093] | |

| Interest expense - net | [removed: 633] [added: 624] | | | | [removed: 645] [added: 633] | | | | [removed: 552] [added: 645] | | |

| Loss on extinguishment of debt | [removed: 464] [added: —] | | | | [removed: —] [added: 464] | | | | — | | |

| Provision for income taxes | [removed: 2,042] [added: 1,080] | | | | [removed: 2,108] [added: 2,042] | | | | [removed: 1,873] [added: 2,108] | | |

| Net operating profit | [removed: 6,586] [added: 4,018] | | | | [removed: 5,846] [added: 6,586] | | | | [removed: 4,971] [added: 5,846] | | |

| Income tax adjustment 1 | [removed: 2,450] [added: 1,278] | | | | [removed: 2,370] [added: 2,450] | | | | [removed: 2,058] [added: 2,370] | | |

| Net operating profit after tax | $ | [removed: 4,136] [added: 2,740] | | | $ | [removed: 3,476] [added: 4,136] | | | $ | [removed: 2,913] [added: 3,476] | |

| Average debt and equity 2 | $ | [removed: 21,999] [added: 21,381] | | | $ | [removed: 21,958] [added: 21,999] | | | $ | [removed: 20,693] [added: 21,958] | |

| Return on invested capital | [removed: 18.8] [added: 12.8] | | % | | [removed: 15.8] [added: 18.8] | | % | | [removed: 14.1] [added: 15.8] | | % |

| 1 | Income tax adjustment is defined as net operating profit multiplied by the effective tax rate, which was [added: 31.8%,] 37.2%, [removed: 40.5%,] and [removed: 42.4%] [added: 40.5%] for [added: 2018,] 2017, [removed: 2016,] and [removed: 2015,] [added: 2016,] respectively. |

Adjusted diluted earnings per share excludes the impact of certain discrete items not contemplated in the Company’s business outlooks for [added: 2018,] 2017, [removed: 2016,] and [removed: 2015.][added: 2016.]

| | [removed: 2017 | | | |] [added: 2018] | | | [added: 2017] | | | 2016 | | [removed: | | | | | | | | 2015 | | | | | | | | |]

During the fourth quarter of fiscal 2018, we changed our method of accounting related to the classification of customer delivery and shipping costs.

Under our new accounting principle, shipping and handling costs related to the delivery of products from the Company to customers are included in costs of sales, whereas previously, they were included in selling, general and administrative expense as well as depreciation and amortization.

Amounts presented for fiscal years 2018, 2017, and 2016 reflect adjusted amounts in accordance with this accounting principle change.

See Note 2 to the consolidated financial statements included herein for additional information on the accounting principle change.

Net sales for fiscal 2018 increased 3.9% over fiscal year 2017 to $71.3 billion.

Comparable sales increased 2.4% over fiscal year 2017, driven by a comparable average ticket increase of 3.4%, offset by a decrease in comparable transactions of 1.1%.

Net earnings for fiscal 2018 decreased 32.9% to $2.3 billion.

As further discussed below, during fiscal year 2018, we completed a strategic reassessment of the business resulting in total pre-tax charges of $1.1 billion, and we recognized a goodwill impairment charge of $952 million.

The year to date pre-tax charges totaling $2.1 billion decreased diluted earnings per share by $2.27.

During the last six months of fiscal 2018, we have had a comprehensive reassessment of the business, established a new leadership team, and worked with that team to develop action plans to improve performance, improve in-stocks and drive a better customer experience.

We have sharpened our focus on retail fundamentals, aligned our leadership team to improve our decision-making and execution, and aligned our portfolio to concentrate on our core home improvement business.

We have rationalized our store inventory to remove clutter and reduce lower-performing inventory, and we are now investing in top-selling items in job lot quantities for our Pro customer.

The 2018 strategic reassessment of the business was part of our focus to build a sustainable foundation to position the Company for long-term success.

During the third quarter of 2018, we committed to exit our Orchard Supply Hardware (Orchard) operations, as well as close 20 under-performing stores across the U.S. and 31 locations in Canada, including 27 stores and 4 other Canadian locations.

In addition, we also made the decision to pursue an exit of certain non-core activities within our U.S. home improvement business, specifically Alacrity Renovation Services and Iris Smart Home.

In the fourth quarter of 2018, we announced plans to pursue an exit of our Mexico retail operations consisting of 13 stores and are currently

exploring exit alternatives.

In addition, during the fourth quarter of 2018, we made the decision to eliminate our Project Specialists Interiors (PSI) position.

Total pre-tax charges associated with these decisions were $1.1 billion for fiscal year 2018.

In addition, our fourth quarter annual goodwill impairment review resulted in a non-cash goodwill impairment charge of $952 million related to our Canadian operations (Canadian goodwill impairment).

Given the softening outlook for the Canadian housing market, we determined that the book value of this business exceeded its fair market value.

This write-down eliminated all goodwill associated with our Canadian business.

As we transition into 2019, we will remain focused on our mission of delivering the right home improvement products, with the best service and value, across every channel and community we serve.

We intend to achieve this mission by winning in four key areas including driving merchandising excellence, transforming our supply chain, delivering operational efficiency, and intensifying customer engagement.

First, delivering merchandising excellence means having the right products in the right place at the right time so our customers can shop any way they choose.

To do this, we are working to improve productivity, drive localization and streamline our reset process to improve execution, as well as improve digital experiences.

Second, we intend to transform our supply chain to enhance the overall customer experience by advancing our fulfillment and delivery capabilities, and delivering operational excellence.

We want to serve customers the way they want to be served.

Third, to deliver operational efficiency, we intend to focus on simplifying store operations and work to improve our in-stock execution to better capitalize on the traffic we are driving to both our stores and online.

And, as a company, we intend to become more operationally efficient.

Finally, customer engagement is the fourth focus area and includes winning the Pro customer.

We have significant opportunity to grow this portion of our business by focusing on competitive pricing, in-stocks, carrying the brands that are important to Pro customers, consistent service levels, and providing a differentiated experience.

Overall, we are making progress in our business.

We are beginning to see positive results from merchandising pilots and improvement in performance in key categories, such as Paint, and are leveraging our improved reset process to better position us for the Spring selling season.

In addition, we continue to see strong customer response to CRAFTSMAN® with market share gains in each product category since introducing the brand.

We are also seeing positive results from our investment in job lot quantities to better meet the needs of the Pro customer.

Although we still have work to do to transform this company, our 2019 four key focus areas demonstrate that we are aligned on the right initiatives to achieve our long-term targets.

| | 20182 | | 20172 | | 2018 vs. 2017 | | | 2018 vs. 2017 | |

| Gross margin | 32.12 | | 32.69 | | (57 | ) | | 2.1 | |

| Selling, general and administrative | 24.41 | | 21.04 | | 337 | | | 20.6 | |

Net sales for 2017 were $68.6 billion, a 5.5% increase over fiscal year 2016.

Comparable sales increased 4.0%, driven by a comparable average ticket increase of 4.1% and a comparable transaction decrease of 0.1%.

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%.

Net earnings increased 11.5% to $3.4 billion.

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 made further progress on advancing our customer service capabilities through our omni-channel assets, empowering customers across the most relevant moments of their project journey.

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.

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

| Selling, general and administrative | 22.40 | | 23.27 | | (87 | ) | | 1.6 | |

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

| | 2016 | | 2015 | | 2016 vs. 2015 | | | 2016 vs. 2015 | |

| Gross margin | 34.55 | | 34.82 | | (27 | ) | | 9.2 | |

| Selling, general and administrative | 23.27 | | 23.88 | | (61 | ) | | 7.2 | |

| Depreciation and amortization | 2.29 | | 2.53 | | (24 | ) | | (0.3 | ) |

| Operating income | 8.99 | | 8.41 | | 58 | | | 17.6 | |

| Interest - net | 0.99 | | 0.93 | | 6 | | | 16.9 | |

| Income tax provision | 3.24 | | 3.17 | | 7 | | | 12.6 | |

| Net earnings | 4.76% | | 4.31% | | 45 | | | 21.5 | % |

| 4 | The number of stores as of February 3, 2017 includes 245 stores acquired in the acquisition of RONA. |

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

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

| Severance-related costs 5 | — | | | — | | | — | | | | 0.09 | | | (0.03 | ) | | 0.06 | | | | — | | | — | | | — | | |

| IRC Section 987 charge 6 | — | | | — | | | — | | | | — | | | 0.04 | | | 0.04 | | | | — | | | — | | | — | | |

As of February [removed: 2, 2018,] [added: 1, 2019,] Lowe’s operated [removed: 2,152] [added: 2,015] home improvement and hardware stores, representing approximately [removed: 215] [added: 209] million square feet of retail selling space.

RONA operates [removed: 240] [added: 212] stores in Canada as of February [removed: 2, 2018,] [added: 1, 2019,] as well as services approximately [removed: 242] [added: 231] dealer-owned stores.

The U.S. market remains our predominant market, accounting for approximately 92% of consolidated sales for the fiscal year ended February [removed: 2, 2018.][added: 1, 2019.]

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

Location of stores continues to be a key competitive factor in our industry; however, the increasing use of technology and the simplicity of online shopping also underscore the importance of omni-channel capabilities as a [removed: competitive factor.]

To meet customers’ varying [removed: home improvement] needs, we offer a complete line of products for [added: construction,] maintenance, repair, remodeling, and decorating.

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

A typical Lowe’s-branded home improvement store stocks approximately [removed: 39,000] [added: 34,000] items, with hundreds of thousands of additional items available through our Special Order Sales system and various online selling channels.

See Note [removed: 16] [added: 19] 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, Sherwin-Williams® [removed: paints] and [removed: stains,] Valspar® paints and stains, Pella® windows and doors, Pergo® hardwood flooring, Dewalt® power tools, Hitachi® pneumatic tools, Weber® [removed: grills,] [added: and] Char-Broil® grills, Owens Corning® insulation and roofing, GAF® roofing, James Hardie® fiber cement siding, Marshalltown® masonry tools and concrete, Husqvarna® outdoor power equipment, John Deere® riding lawn mowers, Werner® ladders, Quoizel® lighting, Nest® [removed: products] [added: products, SharkBite® plumbing products, A. O. Smith® water heaters, Norton® abrasives,] and many more.

Some of Lowe’s most important private brands include Kobalt® tools, allen+roth® home décor products, Blue Hawk® home improvement products, Project Source® basic value products, Portfolio® lighting products, Garden Treasures® lawn and patio products, Utilitech® electrical and utility products, Reliabilt® doors and windows, Aquasource® faucets, sinks and toilets, Harbor Breeze® ceiling fans, [added: and] Top Choice® lumber [removed: products and Iris® home automation and management] products.

These facilities include 15 highly-automated [removed: Regional Distribution Centers] [added: regional distribution centers] (RDC) [added: and 15 flatbed distribution centers (FDC)] in the United States.

On average, each [removed: domestic] RDC [added: and FDC] serves approximately [removed: 118] [added: 115] stores.

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

In addition to the [removed: RDCs,] [added: RDCs and FDCs,] we also operate coastal holding facilities, transload facilities, appliance distribution centers, and [removed: flatbed distribution centers.][added: a direct fulfillment center focused on parcel post eligible products.]

The [removed: flatbed distribution centers] [added: FDCs] distribute merchandise that requires special handling due to size or type of packaging such as lumber, boards, panel products, pipe, siding, ladders, and building materials.

[added: 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: 2017,] [added: 2018,] 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: 2017.][added: 2018.]

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

We offer replacement plans for products in most of these categories when priced below $300, or otherwise specified [removed: category specific] [added: category-specific] price points.

Our [removed: 1,813] [added: 1,790] Lowe’s-branded home improvement stores, inclusive of [removed: 1,740] [added: 1,723] in the [removed: U.S., 63 in Canada] [added: U.S.] and [removed: 10] [added: 67] in [removed: Mexico,] [added: Canada,] 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: 240] [added: 212] RONA stores operate under various complementary store formats that address target customers and occasions.

Our home improvement stores in the U.S. and Canada offer similar products and services, with certain variations based on local market [removed: factors; however, Orchard stores are primarily focused on paint, repair, and backyard products.][added: factors.]

[removed: Our] [added: In addition, our] Project Specialist Exteriors (PSE) program is available in all U.S. Lowe’s home improvement stores to discuss exterior projects such as roofing, siding, fencing, and windows, whose characteristics lend themselves to an in-home consultative sales approach.

As of February [removed: 2, 2018,] [added: 1, 2019,] we employed approximately [removed: 200,000] [added: 190,000] full-time and 110,000 part-time employees.

[removed: Our employees in Mexico, and certain] [added: Certain] employees in [removed: Canada,] [added: Canada] are subject to collective bargaining agreements.

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 [removed: “RONA”,] [added: “RONA” and] “Reno Depot”, and [removed: “Orchard Supply Hardware”, online retail name “The Mine”, and] private brand product names “Kobalt” and “allen+roth”.

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

Our strategy focuses on responsible sourcing, [removed: safer] [added: offering safe] and [removed: more] eco-friendly [removed: product offerings,] [added: products,] maintaining [removed: a] diverse, healthy, [removed: engaged] [added: engaged,] and skilled workforce, supporting our local [removed: communities] [added: communities,] and operating ethically and responsibly.

[removed: carefully,] [added: Our products undergo a rigorous selection process,] beginning with our sourcing decisions.

We [removed: care about] [added: give considerable attention to] how our [removed: 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 [removed: protect] [added: support] worker rights and [added: protect] the environment.

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

In [removed: 2017,] [added: fiscal 2018,] Lowe’s [added: also] externally verified its greenhouse gas emissions data collection and analysis to validate our findings and increase confidence in our reporting.

In [removed: 2017, 100] [added: fiscal 2018, 399] retail locations upgraded to interior light-emitting diode (LED) lighting.

[removed: In 2017, we] [added: We] also replaced [removed: 100] [added: 104] aging HVAC units with high-efficiency units and added Variable Fan Drive systems in over [removed: 300] [added: 419] stores.

We [added: are dedicated to promoting sustainable practices in the transportation industry, and we] collaborate with the Environmental Protection Agency’s SmartWay program to reduce transportation emissions by [added: managing and reducing fuel usage by] creating incentives for freight contractors to improve [removed: efficiency,] [added: efficiency] and are proud to be the only retailer to achieve the Environmental Protection Agency SmartWay Excellence Award [removed: nine] [added: ten] years in a row.

[removed: Managing] [added: In addition, managing] our water resources is [removed: essential] [added: essential, particularly] in regions experiencing drought conditions.

[removed: In 2017, we completed our rollout of] [added: Our] HydroPoint [removed: irrigation technology that combines] [added: systems, which combine] real-time weather data with site-specific information to reduce water consumption and save on utility [removed: costs.][added: costs, are now deployed to approximately 925 locations, covering all stores with operable irrigation systems.]

These operations included 1,723 stores located across 50 U.S. states, as well as 279 stores in Canada.

In addition, as of February 1, 2019, Lowe’s operated 13 stores in Mexico; however, on November 20, 2018, the Company announced its plans to exit its retail operations in Mexico and is currently exploring exit alternatives.

competitive factor.

In 2018, we welcomed CRAFTSMAN® to our portfolio of brands offering a variety of tools, storage and outdoor power equipment.

We also expanded our partnership with Sherwin Williams® becoming the only national home center to offer Krylon® spray paint, Minwax® stains and finishes, Cabot® stains, Thompson’s Water Seal® stains and waterproofing, and Purdy® paint brushes.

In addition, we added brand name merchandise such as Estwing® hammers, Zoeller® pumps, MAPEI® tile-setting materials, and SMARTCORE® vinyl plank products to our portfolio.

Sustainability

In fiscal 2018, the Board of Directors created a Sustainability Committee that oversees sustainability and environmental matters and monitors related trends and risks.

The Company also has a Sustainability Council, led by senior executives.

We also established new goals to advance our corporate responsibility efforts and intend to work towards achieving the following goals by 2025:

| | |

| --- | --- |

| • | Lowe’s and the Lowe’s Foundation intends to invest $350 million in local communities through partnerships and charitable contributions. |

| | |

| --- | --- |

| • | Lowe’s will encourage employees to contribute more than three million volunteer hours to improve the communities where they live, work, and play. |

| | |

| --- | --- |

| • | Lowe’s intends to ensure all strategic suppliers have sustainability goals. |

| | |

| --- | --- |

| • | Lowe’s intends to increase the number of eco-friendly products available to customers, with the goal of helping our customers save more than $40 billion in energy costs through the sale of ENERGY STAR® products. |

| | |

| --- | --- |

| • | Lowe’s intends to have all wood products responsibly sourced. |

We are continuing to work with local and regional utilities to offer customers assorted rebates for a variety of environmentally efficient products including ENERGY STAR® and WaterSense®.

As a responsible corporate citizen, Lowe’s takes environmental sustainability and product safety very seriously.

In fiscal 2018, we published an updated wood sourcing policy to ensure that all wood products sold in our stores originate from well-managed, non-endangered forests and committed to achieve 100 percent Forest Stewardship Council (FSC) certification for all wood products sourced from identified regions at risk by 2020.

To manage chemicals more responsibly, Lowe’s implemented a safer chemicals policy through a number of strategic actions and commitments.

In addition, Lowe’s stopped the sale of all products containing methylene chloride and N-Methyl-2-Pyrrolidone (NMP) online and from our stores.

We are committed to reducing our climate impact through sustainable practices and conservation.

We also signed our first renewable energy agreement comprised of 100 megawatts of renewable wind energy in 2018.

Lowe’s participates in the Carbon Disclosure Project’s climate, forestry, and water questionnaires to benchmark and quantify our environmental efforts.

At a local level, store waste, including cardboard, broken appliances, wood pallets, and more, are recycled through national and regional partners, and we provide in-store recycling centers for our customers to bring in compact fluorescent lamp bulbs, plastic bags, and rechargeable batteries.

In 2018, all U.S. Lowe’s stores completed at least one Lowe’s Heroes volunteer project, contributing approximately 200,000 hours to improve spaces in their local communities.

Lowe’s is also committed to helping communities in the days leading up to and months following a natural disaster.

In 2018, Lowe’s contributed more than $4 million to disaster relief and mobilized hundreds of volunteers to help communities recovering from storms like Hurricanes Florence and Michael.

After Hurricane Florence made landfall, Lowe’s doubled the

Company’s match for the Employee Relief Fund, which provides financial support to associates affected by natural disasters and other hardships.

That match continued throughout the year.

These operations were comprised of 1,839 stores located across 50 U.S. states, including 99 Orchard Supply Hardware (Orchard) stores, as well as 303 stores in Canada, and 10 stores in Mexico.

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.

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

Collectively, our

In addition, we operate 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 available in all U.S. Lowe’s home improvement stores to provide similar consultative services on interior projects such as kitchens and bathrooms.

Environmental Stewardship

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

Our products are selected very

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.

Each year, Lowe’s participates in the Carbon Disclosure Project to track our carbon footprint.

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.

Lowe’s is committed to promoting sustainable practices in the transportation industry.

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.

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

In 2017, Lowe’s Toolbox for Education® provided approximately $6.5 million in grants and since inception has provided funding improvements at nearly 13,000 schools, benefiting more than seven million children.

Lowe’s is also committed to helping residents of the communities we serve by being there when we’re needed most - when a natural disaster threatens and in the recovery that follows.

In 2017, Lowe’s contributed more than $2.5 million and mobilized hundreds of employee volunteers to help families recover from disasters across the United States.

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 public may also read and copy any materials the Company files with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Washington, DC 20549.

Information on the operation of the Public Reference Room may be obtained by calling the SEC at 1-800-SEC-0330.

10-K 1 [removed: form10k_02022018.htm] [added: form10k_02012019.htm] FORM 10-K

For the fiscal year ended February [removed: 2, 2018][added: 1, 2019]

[removed: ][added: ]

Indicate by check mark whether the registrant has submitted [removed: electronically and posted on its corporate Web site, if any,] [added: electronically,] every Interactive Data File required to be submitted [removed: and posted] pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit [removed: and post] such files).

As of August [removed: 4, 2017,] [added: 3, 2018,] 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: $65.6] [added: $79.2] billion based on the closing sale price as reported on the New York Stock Exchange.

| CLASS | | OUTSTANDING AT [removed: 3/29/2018] [added: 3/29/2019] |

| Common Stock, $0.50 par value | | [removed: 825,766,281] [added: 795,922,717] |

| Portions of the Proxy Statement for Lowe’s [removed: 2018] [added: 2019] Annual Meeting of Shareholders | | Part III |

| | Item 1. | [removed: [Business](#s36CCF10AE77A5385A16517378605841A)] [added: [Business](#s9AEB4112A2A35F3294B4E20C9A0BCF1A)] | [removed: [4](#s36CCF10AE77A5385A16517378605841A)] [added: [4](#s9AEB4112A2A35F3294B4E20C9A0BCF1A)] |

| | Item 1A. | [Risk [removed: Factors](#sFC7F95787CE15E25BE1D90FE65249C5B)] [added: Factors](#s28F4949C5D8459D997F31A44AEEA507E)] | [removed: [9](#sFC7F95787CE15E25BE1D90FE65249C5B)] [added: [9](#s28F4949C5D8459D997F31A44AEEA507E)] |

| | Item 1B. | [Unresolved Staff [removed: Comments](#s2FB2E6777CF056FE955D91F597175D55)] [added: Comments](#s9FFF9C0E517C50EEBDBB383506516695)] | [removed: [15](#s2FB2E6777CF056FE955D91F597175D55)] [added: [16](#s9FFF9C0E517C50EEBDBB383506516695)] |

| | Item 2. | [removed: [Properties](#s45E1740C7DC557168F5900E8789C6D66)] [added: [Properties](#sC8D8404F4E9C59FE9DECB82AFD2EC099)] | [removed: [15](#s45E1740C7DC557168F5900E8789C6D66)] [added: [16](#sC8D8404F4E9C59FE9DECB82AFD2EC099)] |

| | Item 3. | [Legal [removed: Proceedings](#s64210D19B3BC517580ED3BBE210E0170)] [added: Proceedings](#s57A5D4E1615C5C6A8164A7ABD86EEADD)] | [removed: [15](#s64210D19B3BC517580ED3BBE210E0170)] [added: [16](#s57A5D4E1615C5C6A8164A7ABD86EEADD)] |

| | Item 4. | [Mine Safety [removed: Disclosures](#sEFDE89579DCE575594D3F66A6547895D)] [added: Disclosures](#s8B5F502AFC8F547E9FB290F1A11E4421)] | [removed: [15](#sEFDE89579DCE575594D3F66A6547895D)] [added: [16](#s8B5F502AFC8F547E9FB290F1A11E4421)] |

| | | [Executive Officers of the [removed: Registrant](#s3D509DF126AA5296BB27F8D604CD944C)] [added: Registrant](#s55F9A9F8737851EBBC27FA18D8F3F529)] | [removed: [16](#s3D509DF126AA5296BB27F8D604CD944C)] [added: [17](#s55F9A9F8737851EBBC27FA18D8F3F529)] |

| | Item 5. | [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#s2F32D1F14D825BF0BE107C7487822E8A)] [added: Securities](#s09ACAF2086615884880A1AC1FADFBE7D)] | [removed: [17](#s2F32D1F14D825BF0BE107C7487822E8A)] [added: [18](#s09ACAF2086615884880A1AC1FADFBE7D)] |

| | Item 6. | [Selected Financial [removed: Data](#sEE3CC73FFC81575FB6E20CE2F3A79478)] [added: Data](#sA55CEBC848B4597E8CCC6B028BBFF382)] | [removed: [18](#sEE3CC73FFC81575FB6E20CE2F3A79478)] [added: [20](#sA55CEBC848B4597E8CCC6B028BBFF382)] |

| | Item 7. | [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#sFEDADF65BAF25E299378E12D008784C3)] [added: Operations](#s2AA7B218A2B55464AA3EF0D8462A1007)] | [removed: [19](#sFEDADF65BAF25E299378E12D008784C3)] [added: [21](#s2AA7B218A2B55464AA3EF0D8462A1007)] |

| | Item 7A. | [Quantitative and Qualitative Disclosures About Market [removed: Risk](#sB0A45F77E4E05E039D87A4AAE8E0A7ED)] [added: Risk](#s5D21A9201A5C50C284A78F717BA8E799)] | [removed: [35](#sB0A45F77E4E05E039D87A4AAE8E0A7ED)] [added: [38](#s5D21A9201A5C50C284A78F717BA8E799)] |

| | Item 8. | [Financial Statements and Supplementary [removed: Data](#sA3B9F9A33D7E56A99EDCF6D2E13A3FA5)] [added: Data](#s53706F653E0950498247CC7FA6CEE253)] | [removed: [37](#s7109B6D5220B54C4B9EA25C917E24F3D)] [added: [40](#s53706F653E0950498247CC7FA6CEE253)] |

| | Item 9. | [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#s298F13B8C5A55BE389DD98429F7B24C1)] [added: Disclosure](#s8F0AC71D7F665CA391554C642F5CBA1D)] | [removed: [70](#s298F13B8C5A55BE389DD98429F7B24C1)] [added: [79](#s8F0AC71D7F665CA391554C642F5CBA1D)] |

| | Item 9A. | [Controls and [removed: Procedures](#sFF637F6701E05B93A66B68D099425FDE)] [added: Procedures](#s77E749BEAEC859E5B1A63487F316F2A9)] | [removed: [70](#sFF637F6701E05B93A66B68D099425FDE)] [added: [79](#s77E749BEAEC859E5B1A63487F316F2A9)] |

| | Item 9B. | [Other [removed: Information](#sFC06B16A4337522F84E465F67969DE75)] [added: Information](#s937FB67FF81155BA9058186397B4EBDC)] | [removed: [71](#sFC06B16A4337522F84E465F67969DE75)] [added: [79](#s937FB67FF81155BA9058186397B4EBDC)] |

| | Item 10. | [Directors, Executive Officers and Corporate [removed: Governance](#s075A69CBEF1256E08D2E99AE329E6904)] [added: Governance](#sDDBBF8889DAA558997BD51BCC1953BA6)] | [removed: [72](#s075A69CBEF1256E08D2E99AE329E6904)] [added: [80](#sDDBBF8889DAA558997BD51BCC1953BA6)] |

| | Item 11. | [Executive [removed: Compensation](#sB70EF362C7775ECEA4D75D66D068F3A7)] [added: Compensation](#sC9334381AF015263A4ED504F6566CA85)] | [removed: [72](#sB70EF362C7775ECEA4D75D66D068F3A7)] [added: [80](#sC9334381AF015263A4ED504F6566CA85)] |

| | Item 12. | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#s842960B8897C5056B35B46D4CAF9338D)] [added: Matters](#sC8B2CE41C17059AF97D6F3A24F1A5417)] | [removed: [72](#s842960B8897C5056B35B46D4CAF9338D)] [added: [80](#sC8B2CE41C17059AF97D6F3A24F1A5417)] |

| | Item 13. | [Certain Relationships and Related Transactions, and Director [removed: Independence](#s1E2FD4A3E1245DBBB70E643BC322E0E1)] [added: Independence](#s0406D38216DE5E72B8E320FACA454049)] | [removed: [72](#s1E2FD4A3E1245DBBB70E643BC322E0E1)] [added: [80](#s0406D38216DE5E72B8E320FACA454049)] |

| | Item 14. | [Principal Accountant Fees and [removed: Services](#sDAB57A28DBDA55CA9B60976EDBF6BCD6)] [added: Services](#s3AA6FC5ADBC65067B635A6FDE7E08F52)] | [removed: [72](#sDAB57A28DBDA55CA9B60976EDBF6BCD6)] [added: [80](#s3AA6FC5ADBC65067B635A6FDE7E08F52)] |

| | Item 15. | [Exhibits and Financial Statement [removed: Schedules](#s3408B18BBC215B019994139096B759D9)] [added: Schedules](#s53DF4BF1ED535FD88DA483265055779A)] | [removed: [73](#s3408B18BBC215B019994139096B759D9)] [added: [81](#s53DF4BF1ED535FD88DA483265055779A)] |

| | Item 16. | [Form 10-K [removed: Summary](#s1E38AB33CC67521D8278EC52F51B5DF2)] [added: Summary](#s8E99E7F856B052D3AF1257226F995584)] | [removed: [81](#s1E38AB33CC67521D8278EC52F51B5DF2)] [added: [90](#s8E99E7F856B052D3AF1257226F995584)] |

| | | [Signatures](#s3340BBF2FBDD5F13AD3BDDE5590479D6) | [91](#s3340BBF2FBDD5F13AD3BDDE5590479D6) |

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

At February [removed: 2, 2018,] [added: 1, 2019,] our properties consisted of [removed: 2,152] [added: 2,002] stores in the [removed: U.S., Canada,] [added: U.S.] and [removed: Mexico] [added: Canada] with a total of approximately [removed: 215] [added: 209] million square feet of selling space.

Of the total stores operating at February [removed: 2, 2018,] [added: 1, 2019,] approximately [removed: 79%] [added: 83%] are owned, which includes stores on leased land, with the remainder being leased from third parties.

In addition, at February 1, 2019, our properties included 13 stores in Mexico; however, on November 20, 2018, the Company announced its plans to exit its retail operations in Mexico.

| Matthew V. Hollifield | | [removed: 51] [added: 52] | | Senior Vice President and Chief Accounting Officer since 2005. |

| Ross W. McCanless | | [removed: 60] [added: 61] | | [removed: Chief Legal Officer] [added: Executive Vice President, General Counsel] and [added: Corporate] Secretary since 2017; Chief Legal Officer, Secretary and Chief Compliance Officer, 2016 – 2017; General Counsel, Secretary and Chief Compliance Officer, 2015 – 2016; Chief Legal Officer, Extended Stay America, Inc. [added: (a hotel operating company)] and ESH Hospitality, [removed: Inc.,] [added: Inc. (a hotel real estate investment company),] 2013 – [removed: 2014; Chief Legal Officer, HVM, L.L.C., 2012 – 2013.] [added: 2014.] |

| Jennifer L. Weber | | [removed: 51] [added: 52] | | [added: Executive Vice President and] Chief Human Resources Officer since 2016; Executive Vice President, External Affairs and Strategic Policy, Duke Energy [removed: Corporation,] [added: Corporation (an electric power company),] 2014 – 2016; Executive Vice President and Chief Human Resources Officer, Duke Energy Corporation, 2011 – 2014. |

| Marvin R. Ellison | | 54 | | President and Chief Executive Officer since July 2018; Chairman of the Board and Chief Executive Officer, J.C. Penney Company, Inc. (a department store retailer), 2016 – June 2018; Chief Executive Officer, J.C. Penney Company, Inc., 2015 – 2016; President, J.C. Penney Company, Inc., 2014 – 2015; Executive Vice President – U.S. Stores, The Home Depot, Inc. (a home improvement retailer) 2008 – 2014. |

| William P. Boltz | | 56 | | Executive Vice President, Merchandising since August 2018; President and CEO, Chervon North America (a global power tool supplier), 2015-2018; President and owner of The Boltz Group, LLC (a retail consulting firm), 2013 – 2015; Senior Vice President, Merchandising, The Home Depot, Inc. (a home improvement retailer), 2006 – 2012. |

| David M. Denton | | 53 | | Executive Vice President and Chief Financial Officer since November 2018; Executive Vice President and Chief Financial Officer, CVS Health Corporation (a pharmacy innovation company), 2010 – November 2018. |

| Donald E. Frieson | | 60 | | Executive Vice President, Supply Chain since August 2018; Executive Vice President, Operations, Sam’s Club (a general merchandise retailer), 2014 – 2017; Senior Vice President, Replenishment, Planning and Real Estate, Sam’s Club, 2012 – 2014. |

| Seemantini Godbole | | 49 | | Executive Vice President, Chief Information Officer since November 2018; Senior Vice President, Technology and Digital, Target Corporation (a department store retailer), January 2017 – November 2018; Vice President, Technology and Digital, Target Corporation, 2013 – December 2016. |

| Joseph M. McFarland III | | 49 | | Executive Vice President, Stores since August 2018; Executive Vice President and Chief Customer Officer, J.C. Penney Company, Inc. (a department store retailer), March 2018 – August 2018; Executive Vice President, Stores, J.C. Penney Company, Inc., 2016 – March 2018; Divisional President, The Home Depot, Inc. (a home improvement retailer), 2007 – 2015. |

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.

| Robert A. Niblock | | 55 | | Chairman of the Board, President and Chief Executive Officer since 2011. |

| Marshall A. Croom | | 57 | | Chief Financial Officer since March 2017; Chief Risk Officer, 2012 – March 2017. |

| Richard D. Maltsbarger | | 42 | | Chief Operating Officer since February 2018; Chief Development Officer and President of International, 2015 – February 2018; Chief Development Officer, 2014 – 2015; Business Development Executive, 2012 – 2014. |

| Michael P. McDermott | | 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 | | 52 | | Corporate Administration Executive since 2012. |

| Paul D. Ramsay | | 53 | | Chief Information Officer since 2014; Senior Vice President, Information Technology, 2011 – 2014. |

As of March 29, [removed: 2018,] [added: 2019,] there were [removed: 22,926] [added: 22,326] holders of record of Lowe’s common stock.

The graph assumes $100 invested on [removed: February 1, 2013] [added: January 31, 2014] in the Company’s common stock and each of the indices.

[removed: ][added: ]

| | [removed: 2/1/2013 | | | |] 1/31/2014 | | | | 1/30/2015 | | | | 1/29/2016 | | | | 2/3/2017 | | | | 2/2/2018 | | | [added: | 2/1/2019 | | |]

The following table sets forth information with respect to purchases of the Company’s common stock made during the fourth quarter of fiscal [removed: 2017:][added: 2018:]

| 2 | On January [removed: 27, 2017,] [added: 26, 2018,] the Company announced that its Board of Directors authorized [removed: a] $5.0 billion [removed: repurchase program] [added: of share repurchases] with no expiration. On [removed: January 26,] [added: December 12,] 2018, the Company announced that its Board of Directors authorized an additional [removed: $5.0] [added: $10.0] billion of share repurchases with no expiration. |

| Lowe’s | $ | 100.00 | | | $ | 148.79 | | | $ | 159.77 | | | $ | 166.32 | | | $ | 234.64 | | | $ | 228.98 | |

| S&P 500 | 100.00 | | | | 114.22 | | | | 113.46 | | | | 137.36 | | | | 168.46 | | | | 168.36 | | |

| S&P Retail Index | $ | 100.00 | | | $ | 118.75 | | | $ | 137.22 | | | $ | 159.62 | | | $ | 225.15 | | | $ | 241.71 | |

| November 3, 2018 – November 30, 20183 | 3,421,699 | | | $ | 90.33 | | | 3,421,143 | | | $ | 4,123,763,667 | |

| December 1, 2018 – January 4, 2019 | 1,159,359 | | | 91.19 | | | | 1,059,707 | | | 14,027,232,040 | | |

| January 5, 2019 – February 1, 2019 | 872,707 | | | 94.56 | | | | 872,036 | | | 13,944,777,229 | | |

| As of February 1, 2019 | 5,453,765 | | | $ | 91.19 | | | 5,352,886 | | | $ | 13,944,777,229 | |

| | |

| --- | --- |

| 3 | In November 2018, the Company entered into an Accelerated Share Repurchase (ASR) agreement with a third-party financial institution to repurchase $270 million of the Company’s common stock. Pursuant to the agreement, the Company paid $270 million to the financial institution and received an initial delivery of 2.6 million shares. Subsequent to the end of the fourth quarter, in February 2019, the Company finalized the transaction and received an additional 0.3 million shares. The average price paid per share reflected in the table above was derived using the fair market value of the shares on the date the initial 2.6 million shares were delivered. See Note 11 to the consolidated financial statements included herein for additional information regarding share repurchases. |

The following table sets forth, for the periods indicated, the high and low sales prices per share of the common stock as reported by the NYSE Composite Tape and the dividends per share declared on the common stock during such periods.

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

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

| | Fiscal 2017 | | | | | | | | | | | | Fiscal 2016 | | | | | | | | | | |

| | High | | | | Low | | | | Dividend | | | | High | | | | Low | | | | Dividend | | |

| 1st Quarter | $ | 86.00 | | | $ | 72.11 | | | $ | 0.35 | | | $ | 77.63 | | | $ | 62.62 | | | $ | 0.28 | |

| 2nd Quarter | 86.25 | | | | 71.58 | | | | 0.41 | | | | 83.65 | | | | 74.56 | | | | 0.35 | | |

| 3rd Quarter | 82.74 | | | | 70.76 | | | | 0.41 | | | | 82.68 | | | | 66.71 | | | | 0.35 | | |

| 4th Quarter | 108.98 | | | | 77.14 | | | | 0.41 | | | | 76.47 | | | | 64.87 | | | | 0.35 | | |

| 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 | |

| Selected Statement of Earnings Data (In millions, except per share data) | [removed: 2017] [added: 20181, 2] | | | | [removed: 2016 1, 2] [added: 20172] | | | | [removed: 2015] [added: 20162, 3, 4] | | | | [removed: 2014] [added: 20152] | | | | [removed: 2013] [added: 20142] | | |

| Net sales | $ | [removed: 68,619] [added: 71,309] | | | $ | [removed: 65,017] [added: 68,619] | | | $ | [removed: 59,074] [added: 65,017] | | | $ | [removed: 56,223] [added: 59,074] | | | $ | [removed: 53,417] [added: 56,223] | |

| Operating income | [removed: 6,586] [added: 4,018] | | | | [removed: 5,846] [added: 6,586] | | | | [removed: 4,971] [added: 5,846] | | | | [removed: 4,792] [added: 4,971] | | | | [removed: 4,149] [added: 4,792] | | |

| Net earnings | [removed: 3,447] [added: 2,314] | | | | [removed: 3,093] [added: 3,447] | | | | [removed: 2,546] [added: 3,093] | | | | [removed: 2,698] [added: 2,546] | | | | [removed: 2,286] [added: 2,698] | | |

| Basic earnings per common share | [removed: 4.09] [added: 2.84] | | | | [removed: 3.48] [added: 4.09] | | | | [removed: 2.73] [added: 3.48] | | | | [removed: 2.71] [added: 2.73] | | | | [removed: 2.14] [added: 2.71] | | |

| Diluted earnings per common share | [removed: 4.09] [added: 2.84] | | | | [removed: 3.47] [added: 4.09] | | | | [removed: 2.73] [added: 3.47] | | | | [removed: 2.71] [added: 2.73] | | | | [removed: 2.14] [added: 2.71] | | |

| Dividends per share | $ | [removed: 1.58] [added: 1.85] | | | $ | [removed: 1.33] [added: 1.58] | | | $ | [removed: 1.07] [added: 1.33] | | | $ | [removed: 0.87] [added: 1.07] | | | $ | [removed: 0.70] [added: 0.87] | |

| Total assets | $ | [removed: 35,291] [added: 34,508] | | | $ | [removed: 34,408] [added: 35,291] | | | $ | [removed: 31,266] [added: 34,408] | | | $ | [removed: 31,721] [added: 31,266] | | | $ | [removed: 32,471] [added: 31,721] | |

| Long-term debt, excluding current maturities | $ | [removed: 15,564] [added: 14,391] | | | $ | [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: 1] [added: 3] | Fiscal 2016 contained 53 weeks, while all other years contained 52 weeks. |

[removed: 2] [added: | 4 |] Fiscal 2016 includes the acquisition of RONA inc. See Note [removed: 2] [added: 4] to the consolidated financial statements included in this Annual Report. [added: |]

| Gross margin | 22,908 | | | | 22,434 | | | | 21,674 | | | | 19,933 | | | | 18,987 | | |

| 1 | Effective February 3, 2018, the Company adopted ASU 2014-09, Revenue from Contracts with Customers (Topic 606), and all related amendments, using the modified retrospective method. Therefore, results for reporting periods beginning after February 2, 2018 are presented under ASU 2014-09, while comparative prior period amounts have not been restated and continue to be presented under accounting standards in effect in those periods. See Note 1 to the consolidated financial statements for additional information on the impacts of adopting this new revenue recognition guidance. |

| | |

| --- | --- |

| 2 | In the fourth quarter of fiscal 2018, the Company changed its method of accounting for shipping and handling costs from the Company’s stores, distribution centers, and other locations to customers. Under the new accounting principle, shipping and handling costs related to the delivery of products from the Company to customers are included in cost of sales, whereas they were previously presented in selling, general, and administrative expense, and depreciation and amortization. Amounts presented for fiscal years 2018, 2017, 2016, 2015, and 2014 reflect adjusted amounts in accordance with this accounting principle change. See Note 2 to the consolidated financial statements included herein for additional information on the accounting principle change. |

| | |

| --- | --- |

| | |

| --- | --- |

| Gross margin | 23,409 | | | | 22,464 | | | | 20,570 | | | | 19,558 | | | | 18,476 | | |

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: 2, 2018.][added: 1, 2019.]

Based on our management’s assessment, we have concluded that, as of February [removed: 2, 2018,] [added: 1, 2019,] our Internal Control is effective.

Their report appears on page [removed: 39.][added: 42.]

We have audited the accompanying consolidated balance sheets of Lowe’s Companies, Inc. and subsidiaries (the “Company”) as of February [removed: 2, 2018] [added: 1, 2019] and February [removed: 3, 2017,] [added: 2, 2018,] 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: 2, 2018,] [added: 1, 2019,] and the related notes and the schedule listed in the Index at Item 15 (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of February [removed: 2, 2018] [added: 1, 2019] and February [removed: 3, 2017,] [added: 2, 2018,] and the results of its operations and its cash flows for each of the three fiscal years in the period ended February [removed: 2, 2018] [added: 1, 2019] 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 States) (PCAOB), the Company's internal control over financial reporting as of February [removed: 2, 2018,] [added: 1, 2019,] based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated April [removed: 2, 2018,] [added: 1, 2019,] expressed an unqualified opinion on the 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: 2, 2018,] [added: 1, 2019,] based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of February [removed: 2, 2018,] [added: 1, 2019,] based on criteria established in Internal Control - Integrated Framework (2013) issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements and financial statement schedule as of and for the fiscal year ended February [removed: 2, 2018] [added: 1, 2019] of the Company and our report dated April [removed: 2, 2018,] [added: 1, 2019,] expressed an unqualified opinion on those financial [removed: statements.][added: statements and included an explanatory paragraph regarding the reclassification of shipping and handling costs relating to the delivery of products to customers from selling, general and administrative and depreciation and amortization to cost of sales.]

| | February [removed: 2, 2018] [added: 1, 2019] | | | | % Sales | | | February [removed: 3, 2017] [added: 2, 2018] | | | | % Sales | | | [removed: January 29, 2016] [added: February 3, 2017] | | | | % Sales | |

| Net sales | $ | [removed: 68,619] [added: 71,309] | | | 100.00 | % | | $ | [removed: 65,017] [added: 68,619] | | | 100.00 | % | | $ | [removed: 59,074] [added: 65,017] | | | 100.00 | % |

| Operating income | [removed: 6,586] [added: 4,018] | | | | [removed: 9.60] [added: 5.64] | | | [removed: 5,846] [added: 6,586] | | | | [removed: 8.99] [added: 9.60] | | | [removed: 4,971] [added: 5,846] | | | | [removed: 8.41] [added: 8.99] | |

| Interest - net | [removed: 633] [added: 624] | | | | [removed: 0.92] [added: 0.88] | | | [removed: 645] [added: 633] | | | | [removed: 0.99] [added: 0.92] | | | [removed: 552] [added: 645] | | | | [removed: 0.93] [added: 0.99] | |

| Loss on extinguishment of debt | [removed: 464] [added: —] | | | | [removed: 0.68] [added: —] | | | [removed: —] [added: 464] | | | | [removed: —] [added: 0.68] | | | — | | | | — | |

| Pre-tax earnings | [removed: 5,489] [added: 3,394] | | | | [removed: 8.00] [added: 4.76] | | | [removed: 5,201] [added: 5,489] | | | | 8.00 | | | [removed: 4,419] [added: 5,201] | | | | [removed: 7.48] [added: 8.00] | |

| Income tax provision | [removed: 2,042] [added: 1,080] | | | | [removed: 2.98] [added: 1.52] | | | [removed: 2,108] [added: 2,042] | | | | [removed: 3.24] [added: 2.98] | | | [removed: 1,873] [added: 2,108] | | | | [removed: 3.17] [added: 3.24] | |

| Net earnings | $ | [removed: 3,447] [added: 2,314] | | | [removed: 5.02] [added: 3.24] | % | | $ | [removed: 3,093] [added: 3,447] | | | [removed: 4.76] [added: 5.02] | % | | $ | [removed: 2,546] [added: 3,093] | | | [removed: 4.31] [added: 4.76] | % |

| Basic earnings per common share | $ | [removed: 4.09] [added: 2.84] | | | | | | $ | [removed: 3.48] [added: 4.09] | | | | | | $ | [removed: 2.73] [added: 3.48] | | | | |

| Diluted earnings per common share | $ | [removed: 4.09] [added: 2.84] | | | | | | $ | [removed: 3.47] [added: 4.09] | | | | | | $ | [removed: 2.73] [added: 3.47] | | | | |

| Cash dividends per share | $ | [removed: 1.58] [added: 1.85] | | | | | | $ | [removed: 1.33] [added: 1.58] | | | | | | $ | [removed: 1.07] [added: 1.33] | | | | |

| Foreign currency translation adjustments - net of tax | [removed: 251] [added: (221] | | [added: )] | | [removed: 0.37] [added: (0.30] | [added: )] | | [removed: 154] [added: 251] | | | | [removed: 0.23] [added: 0.37] | | | [removed: (291] [added: 154] | | [removed: )] | | [removed: (0.49] [added: 0.23] | [removed: )] |

| Other comprehensive income/(loss) | [removed: 251] [added: (220] | | [added: )] | | [removed: 0.37] [added: (0.30] | [added: )] | | [removed: 154] [added: 251] | | | | [removed: 0.23] [added: 0.37] | | | [removed: (291] [added: 154] | | [removed: )] | | [removed: (0.49] [added: 0.23] | [removed: )] |

| Comprehensive income | $ | [removed: 3,698] [added: 2,094] | | | [removed: 5.39] [added: 2.94] | % | | $ | [removed: 3,247] [added: 3,698] | | | [removed: 4.99] [added: 5.39] | % | | $ | [removed: 2,255] [added: 3,247] | | | [removed: 3.82] [added: 4.99] | % |

| | [added: February 1, 2019] | | [added: | |] February 2, 2018 | | | | February 3, 2017 | | |

| Cash and cash equivalents | | | $ | [removed: 588] [added: 511] | | | $ | [removed: 558] [added: 588] | |

| Short-term investments | | | [removed: 102] [added: 218] | | | | [removed: 100] [added: 102] | | |

| Merchandise inventory - net | | | [removed: 11,393] [added: 12,561] | | | | [removed: 10,458] [added: 11,393] | | |

| Other current assets | | | [removed: 689] [added: 938] | | | | [removed: 884] [added: 689] | | |

| Total current assets | | | [removed: 12,772] [added: 14,228] | | | | [removed: 12,000] [added: 12,772] | | |

| Property, less accumulated depreciation | | | [removed: 19,721] [added: 18,432] | | | | [removed: 19,949] [added: 19,721] | | |

| Long-term investments | | | [removed: 408] [added: 256] | | | | [removed: 366] [added: 408] | | |

| Deferred income taxes - net | | | [removed: 168] [added: 294] | | | | [removed: 222] [added: 168] | | |

| Goodwill | | | [removed: 1,307] [added: 303] | | | | [removed: 1,082] [added: 1,307] | | |

| Other assets | | | [removed: 915] [added: 995] | | | | [removed: 789] [added: 915] | | |

| Total assets | | | $ | [removed: 35,291] [added: 34,508] | | | $ | [removed: 34,408] [added: 35,291] | |

| Short-term borrowings | | | $ | [removed: 1,137] [added: 722] | | | $ | [removed: 510] [added: 1,137] | |

| Current maturities of long-term debt | | | [removed: 294] [added: 1,110] | | | | [removed: 795] [added: 294] | | |

| Accounts payable | | | [removed: 6,590] [added: 8,279] | | | | [removed: 6,651] [added: 6,590] | | |

| Accrued compensation and employee benefits | | | [removed: 747] [added: 662] | | | | [removed: 790] [added: 747] | | |

| Deferred revenue | | | [removed: 1,378] [added: 1,299] | | | | [removed: 1,253] [added: 1,378] | | |

Change in Accounting Principle

As discussed in Note 2 to the financial statements, the Company has elected to change its method of accounting to reclassify shipping and handling costs relating to the delivery of products to customers from selling, general and administrative and depreciation and amortization to cost of sales in the fiscal year ended February 1, 2019.

This change in accounting principle has been retrospectively applied to the consolidated financial statements for the fiscal years ended February 2, 2018 and February 3, 2017.

April 1, 2019

April 1, 2019

| Cost of sales | 48,401 | | | | 67.88 | | | 46,185 | | | | 67.31 | | | 43,343 | | | | 66.66 | |

| Gross margin | 22,908 | | | | 32.12 | | | 22,434 | | | | 32.69 | | | 21,674 | | | | 33.34 | |

| Selling, general and administrative | 17,413 | | | | 24.41 | | | 14,444 | | | | 21.04 | | | 14,375 | | | | 22.12 | |

| Depreciation and amortization | 1,477 | | | | 2.07 | | | 1,404 | | | | 2.05 | | | 1,453 | | | | 2.23 | |

| | February 1, 2019 | | | | % Sales | | | February 2, 2018 | | | | % Sales | | | February 3, 2017 | | | | % Sales | |

| Net earnings | $ | 2,314 | | | 3.24 | % | | $ | 3,447 | | | 5.02 | % | | $ | 3,093 | | | 4.76 | % |

| Net unrealized investment gain - net of tax | 1 | | | | — | | | — | | | | — | | | — | | | | — | |

| | | | February 1, 2019 | | | | February 2, 2018 | | |

| February 1, 2019 | 801 | | | | | | | | |

(In millions, except per share data)

| Cumulative effect of accounting change | | | | | | | | | | | | 33 | | | | | | | | 33 | | | | | | | | 33 | | |

| Repurchase of common stock | (32 | ) | | (16 | | ) | | (209 | | ) | | (2,820 | | ) | | | | | | (3,045 | | ) | | | | | | (3,045 | | ) |

| Balance February 1, 2019 | 801 | | | $ | 401 | | | $ | — | | | $ | 3,452 | | | $ | (209 | ) | | $ | 3,644 | | | $ | — | | | $ | 3,644 | |

| Impairment of goodwill | 952 | | | | — | | | | — | | |

| Net increase/(decrease) in cash and cash equivalents, including cash classified within current assets held for sale | (23 | | ) | | 30 | | | | 153 | | |

| Less: Net increase in cash classified within current assets held for sale | (54 | | ) | | — | | | | — | | |

In addition, as of February 1, 2019, Lowe’s operated 13 stores in Mexico; however, on November 20, 2018, the Company announced its plans to exit its retail operations in Mexico.

During the first quarter of fiscal year 2018, the Company conformed the financial reporting calendar of a subsidiary, which did not have a significant effect on the consolidated financial statements.

Gross unrealized gains and losses were not significant for any of the periods presented.

cost and net realizable value using other inventory methods, including the weighted average cost method and the retail inventory method.

Derivative Financial Instruments - The Company occasionally utilizes derivative financial instruments to manage certain business risks.

However, the amounts were not material to the Company’s consolidated financial statements in any of the years presented.

Portfolio income associated with the propriety credit program is included in sales in the consolidated statements of earnings as of the adoption of Accounting Standards Update 2014-09 (ASU 2014-09) in fiscal 2018.

ASU 2014-09 was adopted using the modified retrospective approach; therefore, fiscal 2017 and fiscal 2016 present portfolio income associated with the proprietary credit program within SG&A expense.

Upon disposal, the cost of properties and

Any impairment identified is included within SG&A expense in the consolidated statements of earnings.

The income tax effect

from any tax deductible goodwill on the carrying amount of the reporting unit, if applicable, is considered in determining the goodwill impairment loss.

The Company’s annual goodwill impairment analysis performed during the fourth quarter of fiscal 2018 included a quantitative analysis of the Canada-Retail and Canada-Distribution reporting units.

The Company performed a discounted cash flow analysis and market multiple analysis for the Canada-Retail and Canada-Distribution reporting units.

These discounted cash flow models included management assumptions for expected sales growth, margin expansion, operational leverage, capital expenditures, and overall operational forecasts.

The market multiple analysis included historical and projected performance, market capitalization, volatility, and multiples for industry peers.

These analyses led to the conclusion that the fair value of these reporting units was less than their carrying values by an amount that exceeded the carrying value of goodwill, primarily driven by a softening outlook for the Canadian housing market.

Accordingly, the full carrying value of $952 million relating to the Canadian reporting units’ goodwill was impaired during the fourth quarter of 2018.

See Note 6 for additional information on the Company’s fair value measurements.

Under guidelines established by the SEC, companies are permitted to exclude acquisitions from their first assessment of internal control over financial reporting following the date of acquisition.

Management’s assessment of the effectiveness of the Company’s internal control over financial reporting excluded Maintenance Supply Headquarters, a wholly owned subsidiary of Lowe’s Companies Inc. that consisted of the net assets purchased from Maintenance Supply Headquarters in June 2017.

Maintenance Supply Headquarters represented 1.5% and 0.3% of the Company’s consolidated total assets and consolidated net sales, respectively, as of and for the year ended February 2, 2018.

This acquisition is more fully discussed in Note 2 to our Consolidated Financial Statements for fiscal year 2017.

April 2, 2018

As described in Management’s Report on Internal Control over Financial Reporting, management excluded from its assessment the internal control over financial reporting at Maintenance Supply Headquarters, which was acquired on June 23, 2017 and whose financial statements constitute 1.5% and 0.3% of the Company’s consolidated total assets and consolidated net sales, respectively, as of and for the fiscal year ended February 2, 2018.

Accordingly, our audit did not include the internal control over financial reporting at Maintenance Supply Headquarters.

| Cost of sales | 45,210 | | | | 65.89 | | | 42,553 | | | | 65.45 | | | 38,504 | | | | 65.18 | |

| Gross margin | 23,409 | | | | 34.11 | | | 22,464 | | | | 34.55 | | | 20,570 | | | | 34.82 | |

| Selling, general and administrative | 15,376 | | | | 22.40 | | | 15,129 | | | | 23.27 | | | 14,105 | | | | 23.88 | |

| Depreciation and amortization | 1,447 | | | | 2.11 | | | 1,489 | | | | 2.29 | | | 1,494 | | | | 2.53 | |

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

(In millions)

| Balance January 30, 2015 | 960 | | | $ | 480 | | | $ | — | | | $ | 9,591 | | | $ | (103 | ) | | $ | 9,968 | | | $ | — | | | $ | 9,968 | |

| Tax effect of non-qualified stock options exercised and restricted stock vested | | | | | | | | 61 | | | | | | | | | | | | 61 | | | | | | | | 61 | | |

| Repurchase of common stock | (54 | ) | | (27 | | ) | | (298 | | ) | | (3,553 | | ) | | | | | | (3,878 | | ) | | | | | | (3,878 | | ) |

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

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

| Contributions to equity method investments – net | — | | | | — | | | | (125 | | ) |

Gross unrealized gains and losses were insignificant at February 2, 2018 and February 3, 2017.

This agreement expires in December 2023, unless terminated sooner by the parties.

Tender costs, including amounts associated with accepting the Company’s proprietary credit cards, are included in SG&A expense in the consolidated statements of earnings.

The total portfolio of receivables held by Synchrony, including both receivables originated by Synchrony from the Company’s proprietary credit cards and commercial business accounts receivable originated by the Company and sold to Synchrony, approximated $10.2 billion at February 2, 2018, and $9.6 billion at February 3, 2017.

When the Company commits to an exit plan and communicates that plan to affected employees, a liability is recognized in connection with one-time employee termination benefits.

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

If the carrying value of the reporting unit exceeds its fair value, a second step is required to measure possible goodwill impairment loss.

The second step includes hypothetically valuing the tangible and intangible assets and liabilities of the reporting unit as if the reporting unit had been acquired in a business combination.

Then, the implied fair value of the reporting unit’s goodwill is compared to the carrying value of that goodwill.

| Other | 826 | | | | 832 | | |

Revenue Recognition - The Company recognizes revenues, net of sales tax, when sales transactions occur and customers take possession of the merchandise.

Revenues from product installation services are recognized when the installation is completed.

The Company recognizes income from unredeemed stored-value cards at the point at which redemption becomes remote.

The Company’s stored-value cards have no expiration date or dormancy fees.

Therefore, to determine when redemption is remote, the Company analyzes an aging of the unredeemed cards based on the date of last stored-value card use.

The amount of revenue recognized from unredeemed stored-value cards for which redemption was deemed remote was not significant for 2017, 2016, and 2015.

Changes in deferred revenue for extended protection plan contracts are summarized as follows:

| Deferred revenue - extended protection plans, beginning of year | $ | 763 | | | $ | 729 | | | $ | 730 | |

| Additions to deferred revenue | 408 | | | | 387 | | | | 350 | | |

| Deferred revenue recognized | (368 | | ) | | (353 | | ) | | (351 | | ) |

| Deferred revenue - extended protection plans, end of year | $ | 803 | | | $ | 763 | | | $ | 729 | |

[added: Based upon their evaluation,] the [added: 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: 2, 2018] [added: 1, 2019] 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 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: 2019] [added: 2020] Annual Meeting” in the definitive Proxy Statement for the [removed: 2018] [added: 2019] annual meeting of shareholders, which will be filed with the SEC within 120 days after the fiscal year ended February [removed: 2, 2018] [added: 1, 2019] (the Proxy Statement).

| | [Reports of Independent Registered Public Accounting [removed: Firm](#s2095CAA49048562C99D6D982AFDCA62F)] [added: Firm](#s65C565697E0C5BC29FF8A3931B19AB2C)] | [removed: [38](#s2095CAA49048562C99D6D982AFDCA62F)] [added: [41](#s65C565697E0C5BC29FF8A3931B19AB2C)] |

| | [Consolidated Statements of Earnings for each of the three fiscal years in the period ended February [removed: 2, 2018](#s449BCFBA015957E984BCC5F9207D15A7)] [added: 1, 2019](#s5373DB6148D651E78B4AC54056DFC492)] | [removed: [40](#s449BCFBA015957E984BCC5F9207D15A7)] [added: [43](#s5373DB6148D651E78B4AC54056DFC492)] |

| | [Consolidated Statements of Comprehensive Income for each of the three fiscal years in the period ended February [removed: 2, 2018](#s77ADB180BEFB504989436BB5A4BE6753)] [added: 1, 2019](#s02C4AF85940C56AEA3084BE509902DD2)] | [removed: [40](#s77ADB180BEFB504989436BB5A4BE6753)] [added: [43](#s02C4AF85940C56AEA3084BE509902DD2)] |

| | [Consolidated Balance Sheets at February [removed: 2, 2018] [added: 1, 2019] and February [removed: 3, 2017](#s84428A04BBA65C17AEE962B247946D10)] [added: 2, 2018](#s648D03FE08CD5BC99D9C310A9F7F26D7)] | [removed: [41](#s84428A04BBA65C17AEE962B247946D10)] [added: [44](#s648D03FE08CD5BC99D9C310A9F7F26D7)] |

| | [Consolidated Statements of Shareholders’ Equity for each of the three fiscal years in the period ended February [removed: 2, 2018](#sE1431B65C3595B2EA61C6C99F9FBCE0E)] [added: 1, 2019](#s4DE18BFE78AA56E987B9741E27574301)] | [removed: [42](#sE1431B65C3595B2EA61C6C99F9FBCE0E)] [added: [45](#s4DE18BFE78AA56E987B9741E27574301)] |

| | [Consolidated Statements of Cash Flows for each of the three fiscal years in the period ended February [removed: 2, 2018](#sF4AF99DD408557F2A1EF7FF8F2658A5B)] [added: 1, 2019](#s6BD3731CA3375158BB4C9A8BA5D9A31B)] | [removed: [43](#sF4AF99DD408557F2A1EF7FF8F2658A5B)] [added: [46](#s6BD3731CA3375158BB4C9A8BA5D9A31B)] |

| | [Notes to Consolidated Financial Statements for each of the three fiscal years in the period ended February [removed: 2, 2018](#s4E39BC8A9F4C5E88A6986B7C0A64A8EA)] [added: 1, 2019](#s60193C52A7C05C31903EB3B3A7D5B038)] | [removed: [44](#s4E39BC8A9F4C5E88A6986B7C0A64A8EA)] [added: [47](#s60193C52A7C05C31903EB3B3A7D5B038)] |

| Reserve for loss on obsolete inventory | $ | [removed: 52] [added: 77] | | | $ | [removed: —] [added: 1] | | | [added: 1] | | $ | [removed: (6] [added: —] | [removed: )] | | [removed: 1] | | $ | [removed: 46] [added: 78] | |

| Reserve for sales returns | [removed: 65] [added: 71] | | | | [removed: 1] [added: 123] | | | | 3 | | — | | | | | | [removed: 66] [added: 194] | | |

| Deferred tax valuation allowance | [removed: 170] [added: 475] | | | | [removed: 277] [added: 94] | | | | 4 | | — | | | | | | [removed: 447] [added: 569] | | |

| Reserve for exit activities | [removed: 53] [added: 60] | | | | [removed: 34] [added: 384] | | | | | | [removed: (20] [added: (83] | | ) | | 6 | | [removed: 67] [added: 361] | | |

| 3.2 | | [Bylaws of Lowe’s Companies, Inc., as amended and restated [removed: May 27, 2016.](http://www.sec.gov/Archives/edgar/data/60667/000006066716000318/exhibit31.htm)] [added: January 25, 2019.](http://www.sec.gov/Archives/edgar/data/60667/000006066719000019/exhibit31_01252019.htm)] | | 8-K | | 001-07898 | | 3.1 | | [removed: May 31, 2016] [added: January 28, 2019] |

| [removed: 4.17] [added: 10.29] | | [removed: [Amended] [added: [Amendment No. 1, dated as of May 4, 2017, to the Amended] and Restated Credit Agreement, dated as of November 23, 2016, by and among Lowe’s Companies, Inc., Bank of America, N.A., as administrative agent, swing line lender and a letter of credit issuer, Wells Fargo Bank, National Association, as syndication agent and a letter of credit issuer, Goldman Sachs Bank USA, JPMorgan Chase Bank, N.A., SunTrust Bank and U.S. Bank National Association, as co-documentation agents, and the other lenders party [removed: thereto.](http://www.sec.gov/Archives/edgar/data/60667/000119312516778167/d296951dex101.htm)] [added: thereto.](http://www.sec.gov/Archives/edgar/data/60667/000006066717000111/exhibit101_05052017.htm)] | | [removed: 8-K] [added: 10-Q] | | 001-07898 | | 10.1 | | [removed: November 28, 2016] [added: June 6, 2017] |

| 10.17 | | [Form of Lowe’s Companies, Inc. Management Continuity Agreement for Tier I Senior Officers used for agreements entered into [removed: prior to] [added: on or after] June 1, [removed: 2012.*](http://www.sec.gov/Archives/edgar/data/60667/000006066708000135/exhibit101.htm)] [added: 2012.*](http://www.sec.gov/Archives/edgar/data/60667/000006066712000176/exhibit102.htm)] | | 10-Q | | 001-07898 | | [removed: 10.1] [added: 10.2] | | September [removed: 3, 2008] [added: 4, 2012] |

| 10.18 | | [Form of Lowe’s Companies, Inc. Management Continuity Agreement for Tier [removed: I] [added: II] Senior [removed: Officers used for agreements entered into on or after June 1, 2012.*](http://www.sec.gov/Archives/edgar/data/60667/000006066712000176/exhibit102.htm)] [added: Officers.*](http://www.sec.gov/Archives/edgar/data/60667/000006066708000135/exhibit102.htm)] | | 10-Q | | 001-07898 | | 10.2 | | September [removed: 4, 2012] [added: 3, 2008] |

| [removed: 10.19] [added: 10.36] | | [Form of Lowe’s Companies, Inc. [removed: Management Continuity] [added: Change in Control] Agreement for Tier [removed: II] [added: I] Senior [removed: Officers.*](http://www.sec.gov/Archives/edgar/data/60667/000006066708000135/exhibit102.htm)] [added: Officers.*](http://www.sec.gov/Archives/edgar/data/60667/000006066718000157/exhibit107_08032018.htm)] | | 10-Q | | 001-07898 | | [removed: 10.2] [added: 10.7] | | September [removed: 3, 2008] [added: 4, 2018] |

| [removed: 10.20] [added: 10.19] | | [Lowe’s Companies Cash Deferral Plan.*](http://www.sec.gov/Archives/edgar/data/60667/000006066704000242/exhibit101.htm) | | 10-Q | | 001-07898 | | 10.1 | | June 4, 2004 |

| [removed: 10.21] [added: 10.20] | | [Amendment No. 1 to the Lowe’s Companies Cash Deferral Plan.*](http://www.sec.gov/Archives/edgar/data/60667/000006066707000130/exhibit101.htm) | | 10-Q | | 001-07898 | | 10.1 | | December 12, 2007 |

| [removed: 10.22] [added: 10.21] | | [Amendment No. 2 to the Lowe’s Companies Cash Deferral Plan.*](http://www.sec.gov/Archives/edgar/data/60667/000006066710000184/exhibit102.htm) | | 10-Q | | 001-07898 | | 10.2 | | December 1, 2010 |

| [removed: 10.23] [added: 10.22] | | [Lowe’s Companies, Inc. Amended and Restated Directors’ Stock Option and Deferred Stock Unit Plan.*](http://www.sec.gov/Archives/edgar/data/60667/000006066705000155/lowesdirectorsplan.htm) | | 8-K | | 001-07898 | | 10.1 | | June 3, 2005 |

| [removed: 10.24] [added: 10.23] | | [Form of Lowe’s Companies, Inc. Deferred Stock Unit Agreement for Directors.*](http://www.sec.gov/Archives/edgar/data/60667/000006066705000155/formlowesdirectorsagreement.htm) | | 8-K | | 001-07898 | | 10.2 | | June 3, 2005 |

| [removed: 10.25] [added: 10.24] | | [Form of Lowe’s Companies, Inc. Performance Share Unit Award Agreement.*](http://www.sec.gov/Archives/edgar/data/60667/000006066711000115/exhibit101.htm) | | 10-Q | | 001-07898 | | 10.1 | | May 31, 2011 |

| [removed: 10.26] [added: 10.25] | | [Form of Lowe’s Companies, Inc. Restricted Stock Award Agreement.*](http://www.sec.gov/Archives/edgar/data/60667/000006066717000076/exhibit1027.htm) | | 10-K | | 001-07898 | | 10.27 | | April 4, 2017 |

| [removed: 10.27] [added: 10.26] | | [Lowe’s Companies, Inc. 2006 Long Term Incentive Plan, as amended and restated effective as of February 4, 2017.*](http://www.sec.gov/Archives/edgar/data/60667/000006066717000076/exhibit1028.htm) | | 10-K | | 001-07898 | | 10.28 | | April 4, 2017 |

| [removed: 10.28] [added: 10.27] | | [Lowe’s Companies, Inc. 2016 Annual Incentive Plan, effective as of February 1, 2016.*](http://www.sec.gov/Archives/edgar/data/60667/000119312516536350/d84644ddef14a.htm#edgtoc84644_43) | | DEF 14A | | 001-07898 | | Appendix C | | April 11, 2016 |

| [removed: 10.29] [added: 10.28] | | [Form of Lowe’s Companies, Inc. 2006 Long Term Incentive Plan Non-Qualified Stock Option Agreement.*](http://www.sec.gov/Archives/edgar/data/60667/000006066711000061/exhibit1024.htm) | | 10-K | | 001-07898 | | 10.24 | | March 29, 2011 |

| [removed: 10.30] [added: 4.17] | | [removed: [Amendment No. 1, dated as of May 4, 2017, to the] [added: [Second] Amended and Restated Credit Agreement, dated as of [removed: November 23, 2016,] [added: September 10, 2018,] by and among Lowe’s Companies, Inc., Bank of America, N.A., as administrative [removed: agent, swing line lender] [added: agent] and a letter of credit issuer, [removed: Wells Fargo Bank,] [added: U.S. Bank] National Association, as syndication agent and a letter of credit issuer, [added: Citibank, N.A.,] Goldman Sachs Bank USA, JPMorgan Chase Bank, [removed: N.A., SunTrust Bank] [added: N.A.] and [removed: U.S. Bank] [added: Wells Fargo Bank,] National Association, as co-documentation agents, and the other lenders party [removed: thereto.](http://www.sec.gov/Archives/edgar/data/60667/000006066717000111/exhibit101_05052017.htm)] [added: thereto.](http://www.sec.gov/Archives/edgar/data/60667/000119312518271834/d620916dex101.htm)] | | [removed: 10-Q] [added: 8-K] | | 001-07898 | | 10.1 | | [removed: June 6, 2017] [added: September 12, 2018] |

| 21.1 | | [List of [removed: Subsidiaries.‡](https://www.sec.gov/Archives/edgar/data/60667/000006066718000051/exhibit211_02022018.htm)] [added: Subsidiaries.‡](https://www.sec.gov/Archives/edgar/data/60667/000006066719000042/exhibit211_02012019.htm)] | | | | | | | | |

| 23.1 | | [Consent of Deloitte & Touche [removed: LLP.‡](https://www.sec.gov/Archives/edgar/data/60667/000006066718000051/exhibit231_02022018.htm)] [added: LLP.‡](https://www.sec.gov/Archives/edgar/data/60667/000006066719000042/exhibit231_02012019.htm)] | | | | | | | | |

| 24.1 | | [Power of Attorney (included on the Signatures page of this Annual Report on Form [removed: 10-K).‡](#sBF06A8806BEB5B8EB944AC6FA0AD581F)] [added: 10-K).‡](#s3340BBF2FBDD5F13AD3BDDE5590479D6)] | | | | | | | | |

| 31.1 | | [Certification of Principal Executive Officer Pursuant to Rule 13a-14(a)/15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of [removed: 2002.‡](https://www.sec.gov/Archives/edgar/data/60667/000006066718000051/exhibit311_02022018.htm)] [added: 2002.‡](https://www.sec.gov/Archives/edgar/data/60667/000006066719000042/exhibit311_02012019.htm)] | | | | | | | | |

| 31.2 | | [Certification of Principal Financial Officer Pursuant to Rule 13a-14(a)/15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of [removed: 2002.‡](https://www.sec.gov/Archives/edgar/data/60667/000006066718000051/exhibit312_02022018.htm)] [added: 2002.‡](https://www.sec.gov/Archives/edgar/data/60667/000006066719000042/exhibit312_02012019.htm)] | | | | | | | | |

| 32.1 | | [Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of [removed: 2002.†](https://www.sec.gov/Archives/edgar/data/60667/000006066718000051/exhibit321_02022018.htm)] [added: 2002.†](https://www.sec.gov/Archives/edgar/data/60667/000006066719000042/exhibit321_02012019.htm)] | | | | | | | | |

| 32.2 | | [Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of [removed: 2002.†](https://www.sec.gov/Archives/edgar/data/60667/000006066718000051/exhibit322_02022018.htm)] [added: 2002.†](https://www.sec.gov/Archives/edgar/data/60667/000006066719000042/exhibit322_02012019.htm)] | | | | | | | | |

| February 1, 2019: | | | | | | | | | | | | | | | | | | | |

| Reserve for inventory shrinkage | 212 | | | | 478 | | | | | | (468 | | ) | | 2 | | 222 | | |

| Self-insurance liabilities | 890 | | | | 1,530 | | | | | | (1,467 | | ) | | 5 | | 953 | | |

| 3 | Represents the net increase in the required reserve based on the Company’s evaluation of anticipated merchandise returns. The Company adopted ASU 2014-09, Revenue from Contracts with Customers (Topic 606), effective February 3, 2018. Under ASU 2014-09, the sales returns reserve is presented on a gross basis, with a separate asset and liability in the consolidated balance sheet. Reporting periods prior to the adoption of ASU 2014-09 reflect the sales returns reserve on a net basis. For fiscal year 2018, the net increase in the reserve is primarily due to the change from net presentation to gross presentation related to the adoption of the revenue recognition standard, as well as changes in the Company’s evaluation of anticipated merchandise returns. |

| 4.18 | | [364-Day Credit Agreement, dated as of September 10, 2018, by and among Lowe’s Companies, Inc., Bank of America, N.A., as administrative agent, U.S. Bank National Association, as syndication agent Citibank, N.A., Goldman Sachs Bank USA, JPMorgan Chase Bank, N.A. and Wells Fargo Bank, National Association, as co-documentation agents, and the other lenders party thereto.](http://www.sec.gov/Archives/edgar/data/60667/000119312518271834/d620916dex102.htm) | | 8-K | | 001-07898 | | 10.2 | | September 12, 2018 |

| 10.30 | | [Offer Letter between Marvin R. Ellison and Lowe’s Companies, Inc. entered into on May 21, 2018.*](http://www.sec.gov/Archives/edgar/data/60667/000119312518170222/d577212dex101.htm) | | 8-K | | 001-07898 | | 10.1 | | May 22, 2018 |

| 10.31 | | [Offer Letter between Lowe’s Companies, Inc. and Joseph M. McFarland III entered into on July 18, 2018.*](http://www.sec.gov/Archives/edgar/data/60667/000006066718000157/exhibit102_08032018.htm) | | 10-Q | | 001-07898 | | 10.2 | | September 4, 2018 |

| 10.32 | | [Offer Letter between Lowe’s Companies, Inc. and David M. Denton entered into on August 20, 2018.*](http://www.sec.gov/Archives/edgar/data/60667/000006066718000157/exhibit103_08032018.htm) | | 10-Q | | 001-07898 | | 10.3 | | September 4, 2018 |

| 10.33 | | [Form of Lowe’s Companies, Inc. Restricted Stock Award Agreement.*](http://www.sec.gov/Archives/edgar/data/60667/000006066718000157/exhibit104_08032018.htm) | | 10-Q | | 001-07898 | | 10.4 | | September 4, 2018 |

| 10.34 | | [Form of Lowe’s Companies, Inc. Performance Share Unit Award Agreement.*](http://www.sec.gov/Archives/edgar/data/60667/000006066718000157/exhibit105_08032018.htm) | | 10-Q | | 001-07898 | | 10.5 | | September 4, 2018 |

| 10.35 | | [Form of Lowe’s Companies, Inc. Non-Qualified Stock Option Agreement.*](http://www.sec.gov/Archives/edgar/data/60667/000006066718000157/exhibit106_08032018.htm) | | 10-Q | | 001-07898 | | 10.6 | | September 4, 2018 |

| 10.37 | | [Form of Lowe’s Companies, Inc. Change in Control Agreement for Tier II Senior Officers.*](http://www.sec.gov/Archives/edgar/data/60667/000006066718000157/exhibit108_08032018.htm) | | 10-Q | | 001-07898 | | 10.8 | | September 4, 2018 |

| 10.38 | | [Lowe’s Companies, Inc. Severance Plan for Senior Officers effective August 16, 2018.*](http://www.sec.gov/Archives/edgar/data/60667/000006066718000157/exhibit109_08032018.htm) | | 10-Q | | 001-07898 | | 10.9 | | September 4, 2018 |

| 10.39 | | [Retirement Agreement between Lowe’s Companies, Inc. and Robert A. Niblock entered into on June 18, 2018.*](http://www.sec.gov/Archives/edgar/data/60667/000006066718000157/exhibit1010_08032018.htm) | | 10-Q | | 001-07898 | | 10.10 | | September 4, 2018 |

| 10.40 | | [Retention Agreement between Lowe’s Companies, Inc. and Michael P. McDermott entered into on July 9, 2018.*](http://www.sec.gov/Archives/edgar/data/60667/000006066718000157/exhibit1011_08032018.htm) | | 10-Q | | 001-07898 | | 10.11 | | September 4, 2018 |

| 10.41 | | [Retirement Agreement between Lowe’s Companies, Inc. and Marshall A. Croom entered into on September 27, 2018.*](http://www.sec.gov/Archives/edgar/data/60667/000006066718000203/exhibit105_11022018.htm) | | 10-Q | | 001-07898 | | 10.5 | | December 6, 2018 |

| 10.42 | | [Form of Lowe’s Companies, Inc. Director Indemnification Agreement.*](http://www.sec.gov/Archives/edgar/data/60667/000006066718000203/exhibit106_11022018.htm) | | 10-Q | | 001-07898 | | 10.6 | | December 6, 2018 |

| 10.43 | | [Form of Lowe’s Companies, Inc. Officer Indemnification Agreement.*‡](https://www.sec.gov/Archives/edgar/data/60667/000006066719000042/exhibit1043_02012019.htm) | | | | | | | | |

| 10.44 | | [Release and Separation Agreement between Lowe’s Companies, Inc. and Richard D. Maltsbarger entered into on July 20, 2018*‡](https://www.sec.gov/Archives/edgar/data/60667/000006066719000042/exhibit1044_02012019.htm) | | | | | | | | |

| 18.1 | | [Preferability Letter of Deloitte & Touche LLP.‡](https://www.sec.gov/Archives/edgar/data/60667/000006066719000042/exhibit181_02012019.htm) | | | | | | | | |

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| Exhibit Number | | | | Incorporated by Reference | | | | | | |

| | Exhibit Description | | Form | | File No. | | Exhibit | | Filing Date | |

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| January 29, 2016: | | | | | | | | | | | | | | | | | | | |

| Reserve for inventory shrinkage | 162 | | | | 345 | | | | | | (336 | | ) | | 2 | | 171 | | |

| Self-insurance liabilities | 905 | | | | 1,357 | | | | | | (1,379 | | ) | | 5 | | 883 | | |

| 3 | Represents the net increase in the required reserve based on the Company’s evaluation of anticipated merchandise returns. |

| 12.1 | | [Statement re Computation of Ratio of Earnings to Fixed Charges.‡](https://www.sec.gov/Archives/edgar/data/60667/000006066718000051/exhibit121_02022018.htm) | | | | | | | | |

| 99.1 | | [Seventh Amendment to the Lowe’s 401(k) Plan, effective as of February 1, 2018 (filed to include this amendment as an exhibit to the Registration Statement on Form S-8, Registration No. 033-29772).‡](https://www.sec.gov/Archives/edgar/data/60667/000006066718000051/exhibit991_10k02022018.htm) | | | | | | | | |

| Date | | [removed: Robert A. Niblock Chairman of the Board,] [added: Marvin R. Ellison] President and Chief Executive Officer |

| April [removed: 2, 2018] [added: 1, 2019] | | By: /s/ Matthew V. Hollifield |

Each of the directors of the registrant whose signature appears below hereby appoints [removed: Marshall A.][added: David M.]

| /s/ [removed: Robert A. Niblock] [added: Marvin R. Ellison] | [removed: Chairman of the Board,] President, Chief Executive Officer and Director | April [removed: 2, 2018] [added: 1, 2019] |

| /s/ Raul Alvarez | Director | April [removed: 2, 2018] [added: 1, 2019] |

| /s/ David H. Batchelder | Director | April [removed: 2, 2018] [added: 1, 2019] |

| /s/ Angela F. Braly | Director | April [removed: 2, 2018] [added: 1, 2019] |

| /s/ Sandra B. Cochran | Director | April [removed: 2, 2018] [added: 1, 2019] |

| /s/ Laurie Z. Douglas | Director | April [removed: 2, 2018] [added: 1, 2019] |

| /s/ Marshall O. Larsen | Director | April [removed: 2, 2018] [added: 1, 2019] |

| /s/ James H. Morgan | Director | April [removed: 2, 2018] [added: 1, 2019] |

| /s/ Bertram L. Scott | Director | April [removed: 2, 2018] [added: 1, 2019] |

| /s/ Lisa W. Wardell | Director | April [removed: 2, 2018] [added: 1, 2019] |

| /s/ Eric C. Wiseman | Director | April [removed: 2, 2018] [added: 1, 2019] |

| April 1, 2019 | | By: /s/ Marvin R. Ellison |

| April 1, 2019 | | By: /s/ David M. Denton |

| Date | | David M. Denton Executive Vice President, Chief Financial Officer |

Denton, Matthew V.

| Marvin R. Ellison | | Date |

| /s/ Richard W. Dreiling | Chairman of the Board | April 1, 2019 |

| /s/ Brian C. Rogers | Director | April 1, 2019 |

| Brian C. Rogers | | Date |

| April 2, 2018 | | By: /s/ Robert A. Niblock |

| April 2, 2018 | | By: /s/ Marshall A. Croom |

| Date | | Marshall A. Croom Chief Financial Officer |

Croom, Matthew V.

| Robert A. Niblock | | Date |

| /s/ Richard W. Dreiling | Director | April 2, 2018 |

| /s/ Robert L. Johnson | Director | April 2, 2018 |

| Robert L. Johnson | | Date |