Lowe's (LOW) 10-K risk factor changes: FY2021 vs FY2020

You should read these risk factors in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in [Item [removed: 7](#i9842e66b35c94868bbc06decd778cbf4_49)] [added: 7](#i5790ee7567214d22b5464b0ca6ad6895_46)] and our consolidated financial statements and related notes in [Item [removed: 8](#i9842e66b35c94868bbc06decd778cbf4_94).][added: 8](#i5790ee7567214d22b5464b0ca6ad6895_85).]

There also may be other factors that we cannot anticipate or that are not described in this Annual Report generally because we do not currently perceive [removed: them to be material.]

[removed: Competitive, Operational] [added: Strategic, Competitive, Operational,] and Reputational Risks

*We may be unable to adapt our business concept in a rapidly evolving retail environment to address the changing shopping habits, [removed: demands] [added: demands,] and demographics of our customers, or realize the intended benefits of [removed: organizational change] [added: strategic] initiatives.*

Our success is dependent on our ability to identify and respond to the economic, social, [removed: style] [added: style,] and other trends that affect demographic and consumer preferences in a variety of our merchandise categories and service offerings.

Customers’ expectations about how they wish to research, [removed: purchase] [added: purchase,] and receive products and services have also evolved.

Further, we have a store base that requires maintenance, [removed: investment] [added: investment,] and space reallocation initiatives to deliver the shopping experience that our customers desire.

Failure to identify such trends, adapt our business concept, [added: implement an increasingly localized merchandising assortment,] improve and maintain [removed: our stores] [added: safe stores,] and implement change, growth, [removed: and] productivity [added: and other strategic] 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 share, and results of operations.

*We may not be able to realize the benefits of our strategic initiatives focused on [removed: omni-channel] [added: omnichannel] sales and marketing presence if we fail to deliver the capabilities required to execute on them.*

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

[removed: Omni-channel] [added: Omnichannel] retail is quickly evolving, and we must anticipate and meet our customers’ expectations and counteract new developments and technology investments by our competitors.

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

Failure to realize the benefits of amounts we invest in new technologies, products, or services could result in the [added: value of those investments being written down or written off.]

Our results of operations, financial [removed: condition] [added: 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 competitors or if we are unable to attract, 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.

The principal competitive factors in our industry include convenience, customer [removed: service,] [added: service and experience,] quality and price of merchandise and services, in-stock levels, and merchandise assortment and presentation.

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

Further, online and [removed: omni-channel] [added: omnichannel] retailers continue to focus on delivery services, as customers are increasingly seeking faster, guaranteed delivery [removed: times] [added: times, including same-day] and [added: next-day fulfillment,] low-price or free shipping, and [added: convenient pick-up options, including curbside pick-up, in-store pick-up, and buy online pick-up in-store (BOPIS) lockers, 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 and the continued maintenance of our initiatives related to supply chain [removed: transformation.][added: transformation, including our market-based delivery model.]

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

Our customers, whether they are homeowners, renters or commercial businesses, expect our [removed: sales] associates [removed: and specialists] to be well trained and knowledgeable about the products we sell and the home improvement services we provide.

Increasingly, our sales associates [removed: and specialists] must have expanded skill sets, including, in some instances, the ability to do in-home or telephone sales.

We [removed: may be unable] [added: need] to attract and retain a [removed: 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 [removed: omni-channel] [added: omnichannel] expectations of our customers, we rely on the specialized training and capabilities of corporate support staff, which are broadly sought after by our competitors.

If we are unable to hire, train, [removed: manage] [added: manage,] and retain qualified [removed: sales] associates and specialists, the quality of service we provide to our customers may decrease and our results of operations could be negatively affected.

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

Periodically, we are subject to labor organizing efforts, and if we become subject to collective bargaining agreements in the future, it could [removed: adversely] affect how we operate our business and adversely affect our labor [removed: costs and our ability to retain a qualified workforce.][added: costs.]

*Positively and effectively managing our public image and reputation is critical to our business success, and, if our public image and reputation are damaged, it could negatively impact our relationships with our customers, [removed: vendors] [added: vendors,] and [removed: store] associates [removed: and specialists] and, consequently, our business and results of operations.*

Our public image and reputation are critical to ensuring that our customers shop at Lowe’s, our vendors want to do business with [removed: Lowe’s] [added: Lowe’s,] and our [removed: sales] associates [removed: and specialists] want to work for Lowe’s.

Any negative incident can erode trust and confidence quickly, and adverse publicity about us could damage our reputation and brand image, undermine our customers’ confidence, reduce demand for our products and services, affect our relationships with current and future vendors, impact our results of [removed: operations and] [added: operations,] affect our ability to [removed: retain] [added: recruit, retain,] and [removed: recruit store associates] [added: engage our associates,] and [removed: specialists.][added: attract regulatory scrutiny.]

Additionally, our proprietary rights in our trademarks, trade names, service marks, domain names, copyrights, patents, trade [removed: secrets] [added: secrets,] and other intellectual property rights are valuable assets of our business.

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

*Failure to achieve and maintain a high level of product and service quality could damage our image with [removed: customers] [added: customers, expose us to litigation] and negatively impact our sales, profitability, cash [removed: flows] [added: flows,] and financial condition.*

[removed: *If] [added: *Disruptions in] our [removed: domestic or] international supply chain [removed: or] [added: and] our fulfillment network for our products [removed: is ineffective or disrupted for any reason,] [added: due to factors,] including the COVID-19 pandemic, [removed: or if these operations are subject to] trade policy [removed: changes or] [added: changes, and] additional tariffs, [added: have and continue to affect] our results of [removed: operations could be adversely affected.*][added: operations.*]

Impacts related to the COVID-19 pandemic are placing strains on the domestic and international supply chain that [removed: may] [added: have] negatively [removed: affect] [added: affected] the flow [removed: or] [added: and] availability of our products.

This can [removed: result] [added: and has resulted] in higher out-of-stock inventory positions due to difficulties in timely obtaining products from the manufacturers and suppliers of our [removed: products as well as transportation of those products to our distribution centers and stores, which could negatively affect our business and financial results.][added: products.]

[removed: The changes in certain tax] [added: Tax] and trade policies, [removed: tariffs] [added: tariffs,] and other regulations affecting trade between the U.S. and other [removed: countries] [added: countries, especially China,] enacted [removed: under the prior U.S. administration] [added: in recent years] increased the cost of our merchandise sourced from outside of the U.S., which represents a large percentage of our overall merchandise.

It remains unclear how tax or trade policies, [removed: tariffs] [added: tariffs,] or trade relations may [removed: change under] [added: evolve in] the [removed: new U.S. administration,] [added: future,] which could adversely affect our business, results of operations, effective income tax rate, [removed: liquidity] [added: liquidity,] and net income.

Financial instability among key vendors, political instability and labor unrest in source countries or elsewhere in our supply chain, changes in the total costs in our supply chain [removed: (fuel, labor] [added: (including fuel] and currency exchange rates), [added: labor costs or labor shortages among our vendors,] port labor disputes and security, the outbreak of pandemics, weather-related events, natural disasters, [added: armed conflicts,] work stoppages, shipping capacity restraints, changes in trade policy, retaliatory trade restrictions imposed by either the United States or a major source country, tariffs or duties, fluctuations in currency exchange rates and transport availability, [removed: capacity] [added: capacity,] and costs are beyond our control and could negatively impact our business if they seriously disrupted the movement of products through our supply chain or increased their costs.

If our fulfillment network does not operate properly or if a vendor fails to deliver on its commitments, we [removed: 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.

Our or our third-party installers’ failures to effectively manage such requirements and internal processes regarding installation services could result in lost sales, fines and lawsuits, as well as damage to our reputation, [added: and may result in the loss of our general contractor licenses,] which could negatively affect our business.

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them to be material.

As customers begin to expect a more personalized experience, our ability to offer more localized assortments of our merchandise to appeal to local cultural and demographic tastes within each customer group is important to our ability to effectively meet customer expectations.

If we do not successfully differentiate the shopping experience to meet the individual needs and expectations of or within a customer group, we may lose market share with respect to those customers.

We must also maintain a safe store environment for our customers and associates, as well as to protect against loss or theft of our inventory (known as “shrink”).

Higher rates of shrink, which we have experienced from time to time, can require operational changes that may increase costs.

We also need to collect, use and share relevant customer data to effectively meet customer expectations of a more personalized experience.

Our ability to collect, use, and share such data is subject to a number of external factors, including the impact of legislation or regulations governing data privacy and security, as well as the change of third party policies restricting data collection, use, and sharing.

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We compete with other retailers for many of our associates, and we are experiencing an unusually competitive labor market.

Wages are increasing across the United States, and competitors are offering higher compensation than before, due to labor market conditions.

Many associates are in entry-level or part-time roles with historically high turnover rates, which has led to increased training and retention costs, particularly in a competitive labor market.

Further, our ability to successfully execute organizational changes, including management transitions within the Company's senior leadership are critical to our business success.

In addition to our United States and Canada operations, we have support offices in India and China, and any extended disruption of our operations in our different locations, whether due to labor difficulties or otherwise, could adversely affect our business and results of operations.

Lowe’s actual or perceived position or lack of position on social, environmental, political, public policy, or other sensitive issues, and any perceived lack of transparency about those matters, could harm our reputation.

In addition, failure to meet our stated environmental and social goals, and consumer and investor concerns about our environmental and social practices are potential sources of reputational risk.

In addition, vendors and others with whom we do business may affect our reputation.

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Additionally, we and our customers have expectations on responsible sourcing.

Under our Vendor Code of Conduct, our vendors are required to meet our expectations across multiple areas of compliance, including health and safety, environmental standards, compensation, hours of work, and prohibitions on child and forced labor.

If we need to seek alternative sources of supply from vendors with whom we have less familiarity, the risk of our standards not being met may increase.

In addition, the costs of transportation of those products to our distribution centers and stores have increased while availability of transportation has decreased, which could negatively affect our business and financial results.

In recent years, U.S. ports have been impacted by capacity constraints, port congestion and delays, periodic labor disputes, security issues, weather-related events, and natural disasters, which have been further exacerbated by the COVID-19 pandemic.

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We also engage third-party vendors for a variety of reasons, including for digital storage technology and content delivery.

Such vendors may have access to information about our customers, associates, or vendors.

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Certain of our third-party vendors have been subject to disruptions due to ransomware and other cyber attacks.

A ransomware attack could prevent us or our third-party service providers from accessing data or systems that support Lowe’s operations.

Such violation or perceived violation of privacy, including improper collection, use of sharing of personal information, or failure to sufficiently disclose privacy practice, can adversely affect the trust that customers, employees, and business partners have in us related to their personal information.

value of those investments being written down or written off.

We compete with other retailers for many of our sales associates and specialists, and we invest significantly in them with respect to training and development to strive for high engagement.

We may not be able to prevent or even

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

strategic transaction, may materially reduce our earnings.

At the onset of the pandemic, we implemented a number of measures to facilitate a safer store environment.

In addition, we provided expanded associate benefits to provide additional paid time off, special payments to hourly associates, temporary wage increases and other benefits.

These measures have increased our operating expenses.

Additionally, in response to the uncertainties surrounding the COVID-19 pandemic, we took proactive steps to further enhance our liquidity position by temporarily suspending our share repurchase program, which was later reinstated; increasing the capacity of our revolving credit facilities and the associated commercial paper program; as well as issuing senior notes in March 2020.

- the financial condition and purchasing power of our customers;

- the ability of the third parties on which we rely, including our suppliers and other external business partners, to meet their obligations to the Company, or significant disruptions in their ability to do so which may be caused by their own financial or operational difficulties;

- unknown consequences on our business performance and strategic initiatives stemming from the substantial investment of time and other resources to the pandemic response;

- volatility in the credit and financial markets during and after the pandemic;

- the pace of recovery when the pandemic subsides; and

- the long-term impact of the pandemic on our business, including consumer behaviors.

The following discussion and analysis summarizes the significant factors affecting our consolidated operating results, financial condition, liquidity and capital resources during the [removed: three-year] [added: two-year] period ended January [removed: 29, 2021] [added: 28, 2022] (our fiscal years [removed: 2020, 2019,] [added: 2021] and [removed: 2018).][added: 2020).]

Unless otherwise noted, all references herein for the years [added: 2021,] 2020, [removed: 2019,] and [removed: 2018] [added: 2019] represent the fiscal years ended January [added: 28, 2022, January] 29, 2021, [added: and] January 31, 2020, [removed: and February 1, 2019,] respectively.

This discussion and analysis is presented in [removed: six] [added: four] sections:

- [Executive [removed: Overview](#i9842e66b35c94868bbc06decd778cbf4_52)][added: Overview](#i5790ee7567214d22b5464b0ca6ad6895_49)]

- [Financial Condition, Liquidity and Capital [removed: Resources](#i9842e66b35c94868bbc06decd778cbf4_73)][added: Resources](#i5790ee7567214d22b5464b0ca6ad6895_67)]

- [Critical Accounting Policies and [removed: Estimates](#i9842e66b35c94868bbc06decd778cbf4_85)][added: Estimates](#i5790ee7567214d22b5464b0ca6ad6895_76)]

Net sales for fiscal [removed: 2020] [added: 2021] increased [removed: 24.2%] [added: 7.4%] over fiscal year [removed: 2019] [added: 2020] to [removed: $89.6] [added: $96.3] billion.

The increase in total sales was [added: primarily] driven by [removed: an increase in] comparable [removed: sales, primarily offset by a decrease in] sales [removed: due to closed stores.][added: growth.]

Comparable sales increased [removed: 26.1%] [added: 6.9%] over fiscal year [removed: 2019,] [added: 2020,] driven by an [added: 11.1%] increase in comparable [removed: transactions of 14.0% and an increase] [added: average ticket, partially offset by a 4.2% decrease] in comparable [removed: average ticket of 12.1%.][added: customer transactions.]

Net earnings for fiscal [removed: 2020] [added: 2021] increased [removed: 36.3%] [added: 44.7%] to [removed: $5.8] [added: $8.4] billion.

Diluted earnings per common share increased [removed: 41.3%] [added: 55.3%] in fiscal year [removed: 2020] [added: 2021] to [removed: $7.75] [added: $12.04] from [removed: $5.49] [added: $7.75] in [removed: 2019.][added: 2020.]

Included in the fiscal 2020 results [removed: is] [added: are] a $1.1 billion pre-tax loss on extinguishment of debt from cash tender offers to purchase and retire an aggregate principal amount of $3.0 billion in outstanding [removed: notes with a weighted average interest rate of 4.80%.][added: notes, as well as operating costs related to the Canada restructuring actions.]

Adjusting [removed: 2020 and 2019 amounts] for these [removed: discrete items not contemplated in the business outlooks for those respective years, adjusted] [added: items,] diluted earnings per common share increased [removed: 54.4% in fiscal year 2020] [added: 35.9%] to [removed: $8.86] [added: $12.04 in 2021] from [removed: $5.74] [added: adjusted diluted earnings per common share of $8.86] in [removed: 2019] [added: 2020] (see the [non-GAAP financial [removed: measures](#i9842e66b35c94868bbc06decd778cbf4_61)] [added: measures](#i5790ee7567214d22b5464b0ca6ad6895_58)] discussion).

For [removed: 2020,] [added: 2021,] cash flows from operating activities were [removed: $11.0] [added: $10.1] billion, with [removed: $1.8] [added: $1.9] billion used for capital expenditures.

Continuing to deliver on our commitment to return excess cash to shareholders, the Company repurchased [removed: $5.0] [added: $13.1] billion of common stock and paid [removed: $1.7] [added: $2.0] billion in dividends during the year.

| Net sales | | | 100.00 | | % | | | | 100.00 | | % | | | | N/A | | | | | | [removed: 1.2] [added: 7.4] | | % |

| Other Metrics | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | | | | | [removed: 2018] [added: 2019] | | |

| Comparable sales increase 1 | | | [removed: 26.1] [added: 6.9] | | % | | | | [removed: 2.6] [added: 26.1] | | % | | | | [removed: 2.2] [added: 2.6] | | % |

| Total customer transactions (in millions) | | | [removed: 1,046] [added: 1,002] | | | | | | [removed: 921] [added: 1,046] | | | | | | [removed: 941] [added: 921] | | |

| Average ticket 2 | | | $ | [removed: 85.67] [added: 96.09] | | | | | $ | [removed: 78.36] [added: 85.67] | | | | | $ | [removed: 75.79] [added: 78.36] | |

| Number of stores | | | [removed: 1,974] [added: 1,971] | | | | | | [removed: 1,977] [added: 1,974] | | | | | | [removed: 2,015] [added: 1,977] | | |

| Sales floor square feet (in millions) | | | 208 | | | | | | 208 | | | | | | [removed: 209] [added: 208] | | |

| Average store size selling square feet (in thousands) 3 | | | [removed: 105] [added: 106] | | | | | | 105 | | | | | | [removed: 104] [added: 105] | | |

| Return on average assets 4 | | | [removed: 12.4] [added: 17.5] | | % | | | | [removed: 10.8] [added: 12.4] | | % | | | | [removed: 6.4] [added: 10.8] | | % |

| Net earnings to average debt and [removed: equity 6] [added: shareholders’ (deficit)/equity 5] | | | [removed: 21.9] [added: 32.3] | | % | | | | [removed: 17.2] [added: 21.9] | | % | | | | [removed: 9.0] [added: 17.2] | | % |

| Return on invested capital [removed: 6] [added: 5] | | | [removed: 27.7] [added: 35.3] | | % | | | | [removed: 19.9] [added: 27.7] | | % | | | | [removed: 11.2] [added: 19.9] | | % |

Comparable sales include online sales, which positively impacted [added: the comparable sales increase in] fiscal [removed: 2020,] [added: 2021,] fiscal [removed: 2019,] [added: 2020,] and fiscal [removed: 2018] [added: 2019] by approximately [removed: 565] [added: 150] basis points, [removed: 25] [added: 565] basis points, and [removed: 80] [added: 25] basis points, respectively.*

[removed: 6] [added: 5] *Return on invested capital is calculated using a non-GAAP financial measure.

Net earnings to average debt and [removed: equity] [added: shareholders’ (deficit)/equity] is the most comparable GAAP ratio.

Adjusted diluted earnings per share is [removed: considered] a non-GAAP financial measure.

Adjusted diluted earnings per share excludes the impact of [removed: certain] discrete [removed: items] [added: items, further described below,] not contemplated in the Company’s business [removed: outlooks] [added: outlook] for [removed: 2020 and 2019.][added: fiscal 2020.]

Unless otherwise noted, the income tax effect of these adjustments is calculated using the marginal [removed: rates] [added: rate] for the [removed: respective periods.][added: period.]

[removed: *•*In] [added: - Beginning in] the third quarter of fiscal 2019, the Company began a strategic review of its Canadian operations, and in the fourth quarter of fiscal 2019, the Company announced additional [removed: restructuring] actions to improve future performance and profitability of its Canadian operations.

As a result of [removed: these] [added: this review and related] actions, the Company recognized pre-tax operating costs of $45 million related to inventory write-downs and other closing costs in fiscal 2020 (Canada restructuring).

[removed: - In] [added: *•*In] the third quarter of fiscal 2020, the Company recognized a $1.1 billion loss on extinguishment of debt in connection with the cash tender offers on an aggregate principal amount of $3.0 billion in outstanding notes (Loss on extinguishment of debt).

| | | | [removed: 2020] | | | | | | [added: 2020] | | | | | | | | | | | | [removed: 2019] | | | | | | | | | | | | | | |

| | | | [removed: Pre-Tax Earnings] | | | | | | [removed: Tax] | | | | | | [removed: Net Earnings] | | | | | | Pre-Tax Earnings | | | | | | Tax | | | | | | Net Earnings | | |

| Diluted earnings per share, as reported | | | | | | | | | | | | | | | [removed: $] | [removed: 7.75] | | | | | | | | | | | | | | | | | $ | [removed: 5.49] [added: 7.75] | |

| Loss on extinguishment of debt | | | [removed: 1.41] | | | | | | [removed: (0.36)] | | | | | | [removed: 1.05] | | | | | | [removed: —] [added: 1.41] | | | | | | [removed: —] [added: (0.36)] | | | | | | [removed: —] [added: 1.05] | | |

| Canada restructuring | | | [removed: 0.06] | | | | | | [removed: —] | | | | | | [removed: 0.06] | | | | | | [removed: 0.29] [added: 0.06] | | | | | | [removed: 0.02] [added: —] | | | | | | [removed: 0.31] [added: 0.06] | | |

- [Operations](#i5790ee7567214d22b5464b0ca6ad6895_52)

In 2021, we experienced comparable sales increases in eleven of fifteen product categories and all fifteen U.S. regions.

Our Total Home strategy continues to gain momentum as we provide a one-stop solution for both DIY and Pro customers.

Throughout fiscal 2021, we maintained focus on the Pro customer with improved in-stock inventory levels and store layout, enhanced service offerings, and expanded brand and product offerings that meet their project needs.

We enhanced the customer online shopping experience with improved search and navigation functionality and expanded on-trend inventory assortments.

Our private brand product assortment has also elevated our performance with the DIY customer, especially in Home Décor.

In addition, we have expanded our omnichannel fulfillment capabilities.

During 2021, we converted three geographic areas to our market-based delivery model for big and bulky product.

In this new model, product flows directly to customer homes from our distribution network, bypassing stores altogether.

As part of our fulfillment capabilities, our customers can also now track appliance deliveries in real time and we continue to expand our same-day and next-day fulfillment options.

In the stores, our disciplined focus on driving operating leverage through our Perpetual Productivity Improvement (PPI) initiatives resulted in operational process improvements that reduced the amount of time our associates spend on tasking activities and can instead focus on serving our customers.

As part of these initiatives, we recently launched a new store inventory management system that provides associates real-time visibility to inventory in their store and reduces non-productive hours spent looking for product.

In addition, we expanded our simplified user interface introduced earlier in the year across the sales floor which accelerates the associate training process and allows associates to focus on customer service while reducing customer wait times.

As part of our continued efforts around our Total Home strategy, we are focused on further enhancing our omnichannel capabilities in 2022 across three key areas: expanding our online assortment, enhancing the user experience, and improving

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fulfillment.

We will continue to expand our Lowes.com assortment to meet our customers’ design and lifestyle needs, while at the same time, enhancing the user experience with upgrades to the visualization and configuration tools we offer online.

As we head into spring, we have leveraged our expanded supply chain network to position our in-stock inventory for our heavy selling season.

While there is uncertainty in the economy with rising interest rates and inflation, our outlook for the home improvement industry remains robust, and we believe we are well-positioned to accelerate our market share gains through our Total Home strategy.

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| | | | 2021 | | | | | | 2020 | | | | | | 2021 vs. 2020 | | | | | | 2021 vs. 2020 | | |

| Gross margin | | | 33.30 | | | | | | 33.01 | | | | | | 29 | | | | | | 8.4 | | |

| Selling, general and administrative | | | 19.01 | | | | | | 20.68 | | | | | | (167) | | | | | | (1.2) | | |

| Depreciation and amortization | | | 1.73 | | | | | | 1.56 | | | | | | 17 | | | | | | 18.8 | | |

| Operating income | | | 12.56 | | | | | | 10.77 | | | | | | 179 | | | | | | 25.4 | | |

| Interest – net | | | 0.92 | | | | | | 0.95 | | | | | | (3) | | | | | | 4.4 | | |

| Loss on extinguishment of debt | | | — | | | | | | 1.18 | | | | | | (118) | | | | | | (100.0) | | |

| Pre-tax earnings | | | 11.64 | | | | | | 8.64 | | | | | | 300 | | | | | | 44.8 | | |

| Income tax provision | | | 2.87 | | | | | | 2.13 | | | | | | 74 | | | | | | 45.3 | | |

| Net earnings | | | 8.77 | | % | | | | 6.51 | | % | | | | 226 | | | | | | 44.7 | | % |

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

| | | |  | | | 22 | | |

There were no non-GAAP adjustments in fiscal 2021.

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

| | | |  | | | 23 | | |

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

- [Operations](#i9842e66b35c94868bbc06decd778cbf4_55)

- [Off-Balance Sheet Arrangements](#i9842e66b35c94868bbc06decd778cbf4_79)

- [Contractual Obligations and Commercial Commitments](#i9842e66b35c94868bbc06decd778cbf4_82)

The Company funded the cash tender offers with a $4.0 billion issuance of unsecured notes with a weighted average interest rate of 2.17%.

These efforts took advantage of a favorable interest rate environment to reduce our long-term interest expense.

Also included in the results for fiscal 2020 and 2019 are operating costs related to the Canada restructuring actions.

In 2020, we experienced unprecedented customer demand as the consumer mindset turned its focus to the function and enjoyment of their home.

During the COVID-19 pandemic, the home has become a residence, a home school, a home office and the primary location for recreation and entertainment.

Due to our execution of the Company’s retail fundamentals strategy announced in 2018, which focused on merchandising excellence, supply chain transformation, operational efficiency, and customer engagement, we leveraged our improved operating capabilities to quickly respond to the global health crisis and meet customer demands.

The COVID-19 pandemic changed the way customers shop with Lowe’s.

In an effort to enhance our omni-channel capabilities and to offer options to meet our customer’s needs, we rapidly rolled out curbside pickup in the first quarter.

We then launched mobile check-in for curbside pickup along with an internal order picking app to improve associates’ speed and accuracy in fulfilling orders, and began the launch of touchless buy online pickup in store (BOPIS) lockers.

We also continue to enhance our mobile app to improve the customer pickup experience, including geofencing technology that alerts our stores when customers are on their way to pick up their orders.

In addition, we completed the re-platforming of Lowes.com to the cloud which greatly improved site stability and functionality allowing us to achieve triple-digit online sales growth for the year.

To provide customers with a more intuitive shopping experience and better align our product adjacencies, especially for Pro customers, we made a significant merchandising investment to reset the layout of our U.S. stores (U.S. Stores Reset).

The U.S. Stores Reset provides a faster shopping experience, increases localized product assortments by eliminating unproductive bays

which opens up space for new products better tailored to the local market, and drives more transactions by moving the basket-building category of cleaning products to the main power aisle of the store.

The Company incurred approximately $260 million of incremental expense in 2020, which is reflected within selling, general and administrative (SG&A) expenses in the consolidated statement of earnings, with approximately 95% of the resets complete as of the end of the fiscal year.

In addition, throughout 2020, we continued to focus on gaining market share with the Pro customer.

We continue to elevate our brand and product offerings in the job lot quantities they need.

During the fourth quarter, we launched our new Pro customer relationship management (CRM) tool which provides our Pro Desk with tools to manage, grow and retain our Pro customers through consistent and data-driven selling actions.

*COVID-19 Response*

We began the year focused on executing our retail strategy; however, we rapidly re-prioritized our objectives to address the impacts of COVID-19.

Our Company has been committed to the following priorities while navigating the COVID-19 pandemic:

1.Protecting the health and safety of our associates and customers through a safe store environment and shopping experience,

2.Financially supporting our associates during this challenging time, and

3.Providing support for our community, including healthcare providers and first responders.

We implemented a number of initiatives to facilitate a safer store environment throughout the year, including supporting social distancing by adding signage and floor markers, installing plexiglass shields at the point-of-sale areas, and designating social distancing ambassadors to monitor customer flow traffic; enhancing cleaning procedures; and adopted a requirement for all front-line associates to wear masks and a nationwide standard for all customers to wear masks.

For the year, we invested nearly $1.3 billion in COVID-related support for our associates, store safety and communities.

As part of our commitment to provide financial assistance to our associates, this investment was inclusive of $915 million of expense to support our associates, which included seven discretionary payments for our hourly associates, a $2 per hour temporary wage increase for hourly associates during the month of April, and emergency paid leave for all associates who needed it.

In addition, our support included $109 million in pandemic relief to support our communities, including grants to support minority-owned and rural small businesses.

In late 2020, after a period of time spent focusing on improving our retail fundamentals, we unveiled our Total Home strategy, which is our commitment to providing a full complement of products and services for Pros and Consumers alike, enabling a Total Home solution for every need in the home.

We believe our Total Home strategy will enhance customer engagement and grow market share by intensifying our focus on the Pro customer, expanding our online business, modernizing installation services, improving localization efforts, and elevating our product assortment.

In the coming year, we remain focused on growing market share, improving operating profitability, and driving sustainable growth.

While there is uncertainty in the market and the home improvement sector, we believe we have the flexibility to manage and adapt our business in a dynamic economic environment.

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

| | | | 2019 | | | | | | 2018 | | | | | | 2019 vs. 2018 | | | | | | 2019 vs. 2018 | | |

| Gross margin | | | 31.80 | | | | | | 32.12 | | | | | | (32) | | | | | | 0.2 | | |

| Selling, general and administrative | | | 21.30 | | | | | | 24.41 | | | | | | (311) | | | | | | (11.7) | | |

| Depreciation and amortization | | | 1.75 | | | | | | 2.07 | | | | | | (32) | | | | | | (14.5) | | |

The fair value of our derivative financial instruments as of January [removed: 29, 2021,] [added: 28, 2022,] was not material.

| | | | | | | | | |

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

| | | |  | | | 31 | | |

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

| | | |  | | | 32 | | |

As of January [removed: 29, 2021,] [added: 28, 2022,] Lowe’s operated [removed: 1,974] [added: 1,971] home improvement and hardware stores, representing approximately 208 million square feet of retail selling space.

These operations included [removed: 1,734] [added: 1,737] stores located across 50 U.S. states, as well as [removed: 240] [added: 234] stores in Canada.

RONA operates [removed: 179] [added: 173] stores in Canada as of January [removed: 29, 2021,] [added: 28, 2022,] as well as services [removed: approximately 231] [added: 226] dealer-owned stores.

[removed: Lowe’s] [added: The Company] was incorporated in North Carolina in 1952 and has been publicly held since 1961.

For additional information about the Company’s performance and financial condition, see [removed: also] [Item [removed: 7](#i9842e66b35c94868bbc06decd778cbf4_49),] [added: 7](#i5790ee7567214d22b5464b0ca6ad6895_46),] “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, of this Annual Report.

The Pro customer consists of two broad categories: construction trades and maintenance, repair [removed: &] [added: and] operations.

The U.S. market remains our predominant market, accounting for approximately 94% of consolidated sales for the fiscal year ended January [removed: 29, 2021.][added: 28, 2022.]

The [removed: broader] market in which [removed: Lowe’s operates] [added: we operate] includes home-related sales through a variety of [removed: companies beyond those in NAICS 444.][added: types of businesses.]

[removed: These consist of other companies in the retail sector, including] [added: This includes home centers, paint stores, hardware stores, lumber yards and garden centers,] mass retailers, home goods specialty stores, and online retailers, as well as wholesalers that provide home-related products and services to homeowners, [added: renters,] businesses, and the government.

Location of stores, product assortment, product pricing and customer service continue to be key competitive factors in our industry, while the evolution of technology and customer expectations also underscores the importance of [removed: omni-channel] [added: omnichannel] capabilities as a competitive factor.

To ensure ongoing competitiveness, Lowe’s focuses on delivering the right home improvement products, with the best service and [added: value, across every channel and community we serve.]

See further discussion of competition in [Item [removed: 1A](#i9842e66b35c94868bbc06decd778cbf4_22),] [added: 1A](#i5790ee7567214d22b5464b0ca6ad6895_19),] “Risk Factors”, of this Annual Report.

See [Note [removed: 17](#i9842e66b35c94868bbc06decd778cbf4_208)] [added: 1](#i5790ee7567214d22b5464b0ca6ad6895_172)[7](#i5790ee7567214d22b5464b0ca6ad6895_172)] of the Notes to Consolidated Financial Statements included in [Item [removed: 8](#i9842e66b35c94868bbc06decd778cbf4_94),] [added: 8](#i5790ee7567214d22b5464b0ca6ad6895_85),] “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 [removed: Whirlpool®,] GE®, LG®, [added: Samsung®,] and [removed: Samsung® appliances, Stainmaster® carpets,] [added: Whirlpool® appliances;] Sherwin-Williams® and Valspar® paints and [removed: stains, Pella®] [added: stains; LARSON®] windows and [removed: doors,] [added: doors;] Pergo® [removed: hardwood flooring,] [added: and SMARTCORE® flooring;] CRAFTSMAN® and [removed: DeWALT®] [added: DeWalt®] power [removed: tools,] [added: tools;] Metabo® pneumatic [removed: tools,] [added: tools;] Weber® and Char-Broil® [removed: grills,] [added: grills;] Owens Corning® insulation and [removed: roofing,] [added: roofing;] GAF® [removed: roofing, James Hardie® fiber cement siding,] [added: roofing;] Marshalltown® masonry [removed: tools] and [removed: concrete, Husqvarna®, EGO®] [added: concrete tools; Husqvarna®] and [removed: SKIL®] [added: EGO®] outdoor power [removed: equipment,] [added: equipment;] John Deere® riding lawn [removed: mowers, Werner® ladders, Quoizel® lighting, Nest®] [added: mowers; Scotts® lawn care] products, SharkBite® plumbing [removed: products,] [added: products;] A. O. Smith® water [removed: heaters,] [added: heaters;] Norton® [removed: abrasives, Simpson Strong-Tie® connectors,] [added: abrasives;] Eaton® [added: and Southwire®] electrical [removed: products,] [added: products] and [added: wire; and] many more.

Our [removed: merchandise selection provides] [added: products and services provide] the retail and Pro customer a one-stop shop for a [removed: wide variety] [added: full complement] of [removed: national brand-name] merchandise [removed: needed] [added: and services] to complete home improvement, repair, maintenance, or construction [removed: projects.][added: projects, enabling a Total Home solution for every need in the home.]

Private brands are an important element of our overall portfolio, helping to increase customer loyalty, drive sales, [added: create differentiation,] and [removed: expand differentiation.][added: improve margin.]

We have a strong private brand presence across core categories, including some of our most valuable brands such as: Kobalt® tools; [removed: allen+roth®] [added: STAINMASTER® carpets; allen+roth®, ORIGIN 21™,] and Style Selections® home décor products; Severe Weather® pressure treated lumber; Project Source® high-value project completers; Holiday Living® seasonal products; Harbor Breeze® ceiling fans; Sta-Green® lawn and garden products; Moxie® cleaning products; Reliabilt® doors, windows, and hardware; and Utilitech® [removed: electrical] [added: lighting] and [removed: utility] [added: electrical] products.

To efficiently move [removed: product] [added: products] from our vendors to our stores and maintain in-stock levels, we own and operate distribution facilities that enable products to be received from vendors, stored and picked, or cross-docked, and then shipped to our retail locations or directly to customers.

In addition to the RDCs and FDCs, we also operate coastal holding and transload facilities [added: (CHF)] to handle import product, bulk distribution centers (BDC) to handle appliances and other big and bulky product, cross-dock delivery terminals (XDT) to fulfill final mile box truck deliveries, and fulfillment centers (FC) focused on parcel post eligible products.

In fiscal [removed: 2020,] [added: 2021,] approximately [removed: 67%] [added: 65%] of the total dollar amount of merchandise we purchased flowed through our distribution network, while the remaining portion was shipped directly to our stores [added: or customers directly] from [added: our] vendors.

We offer installation services through independent contractors in many of our product categories, with [removed: Appliances,] Flooring, Kitchens & Bath, [removed: Lumber, Building Materials,] [added: Millwork, Appliances,] and [removed: Millwork] [added: Lumber] accounting for the majority of installed sales.

Installed Sales, which includes both product and labor, accounted for approximately 5% of total sales in fiscal [removed: 2020.][added: 2021.]

[removed: *Extended] [added: *Lowe’s] Protection Plans and Repair Services*

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

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

For purchases made on Lowes.com, customers may pick up their purchase in-store at the customer service desk, curbside pick-up, or touchless [removed: lockers;] [added: lockers, or] have their purchase delivered [removed: from a store; or have] [added: to] their [removed: purchase parcel shipped.][added: home or business.]

Our ability to sell products in-store, online, on-site, or through our contact centers speaks to our [removed: ability to] leverage [added: of] our existing infrastructure with the [removed: omni-channel] [added: omnichannel] capabilities we continue to introduce.

Our [removed: 1,795] [added: 1,798] Lowe’s-branded home improvement stores, inclusive of [removed: 1,734] [added: 1,737] in the U.S. and 61 in 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: 179] [added: 173] RONA stores operate under various complementary store formats that address target customers and occasions.

Through our websites and mobile applications, we seek to empower consumers by providing a 24/7 shopping experience, [removed: online] product information, customer ratings and reviews, [removed: online] buying [removed: guides and] [added: guides,] how-to videos and other information.

We enable customers to choose from a variety of fulfillment options, including buying online and picking up in-store, [removed: as well as] [added: curbside pick-up, truck] delivery [removed: or] [added: and] parcel shipment to their homes or businesses.

[removed: Exteriors (PSE)] [added: In addition, our In-Home Sales] program is available in a majority of U.S. Lowe’s home improvement stores to discuss [added: varying] exterior projects such as [added: windows/doors,] roofing, siding, [removed: fencing,] and [removed: windows,] [added: deck projects,] whose characteristics lend themselves to an in-home consultative sales approach.

Lowe’s operates three contact centers which are located in Wilkesboro, [removed: NC;] [added: North Carolina;] Albuquerque, [removed: NM;] [added: New Mexico;] and Indianapolis, [removed: IN.][added: Indiana.]

These contact centers help Lowe’s enable an [removed: omni-channel] [added: omnichannel] customer experience by providing the ability to tender sales, coordinate deliveries, manage after-sale installations, facilitate repair services for Appliances and Outdoor Power Equipment, and answer general customer questions via phone, mail, e-mail, live chat, and social media.

When it comes to [removed: recruiting] [added: attracting] and retaining top talent, Lowe’s strives to be an employer of choice.

We enable [removed: our] associates to build meaningful careers [removed: and] [added: that] unlock their potential in an inclusive workplace as we work together to deliver the right home improvement [removed: products,] [added: products to our customers,] with the best service and value, across every channel and community we serve.

As of January [removed: 29, 2021,] [added: 28, 2022,] Lowe’s employed approximately [removed: 220,000] [added: 200,000] full-time associates and [removed: 120,000] [added: 140,000] part-time associates, primarily in the United [removed: States] [added: States, India,] and Canada.

We believe that, by building diverse and inclusive teams, we drive better ideas, positive business results, and [removed: improved] [added: improve] service through a deeper connection with our customers.

[removed: During fiscal 2019, we kicked-off a] [added: We continue to execute on our] multi-year program to integrate diversity and inclusion initiatives into our corporate strategy across three areas: talent, [removed: culture] [added: culture,] and business.

We are committed to securing top talent and providing ongoing training [added: and other developmental opportunities] to facilitate meaningful careers at Lowe’s.

Lowe’s was founded in 1921 with the opening of its first hardware store in North Wilkesboro, North Carolina.

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| | | |  | | | 1 | | |

As part of our market-based delivery model, we added three XDT ecosystems (consisting of six new XDTs) in fiscal 2021.

We also enhanced our distribution network by opening four BDCs, three FCs, and two CHFs.

| | | | | | | | | |

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

| | | |  | | | 2 | | |

We also offer a new virtual kitchen design service and virtual sales support for sheds, fencing, generators, and other project-related categories to allow our customers to shop how, when, and where they want for services projects.

| | | | | | | | | |

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

| | | |  | | | 3 | | |

As a testament to our commitments, in 2021 we received more than 15 notable employer of choice awards including being named: a Disability:IN National Best Place to Work for Disability Inclusion, a Forbes America’s Best Large Employers, a Best of the Best 2021 Top Employer by Black EOE Journal, HISPANIC Network Magazine, and Professional Woman’s Magazine, and a Best Corporation for Veteran’s Business Enterprises of the Year.

During the spring season, we temporarily expand our workforce by hiring associates in part-time, seasonal, and full-time positions to meet the elevated levels of demand.

In our efforts to foster an inclusive culture, we launched a new multigenerational business resource group (BRG) in 2021, building upon the seven existing associate-led BRGs that are sponsored by our executive leadership team.

We have also introduced badges for our store uniforms that identify the store associates who speak Spanish or American Sign Language.

In 2021, we held our ninth annual Women’s Leadership Summit, focused on developing women leaders across our corporate and field locations.

Also, in 2020, Lowe’s joined the OneTen coalition, which as a whole, the coalition has committed to hiring one million Black Americans in the next ten years.

We enhanced our onboarding process so that new hires can quickly learn the skills needed for their position.

We offer a variety of leadership and development programs that develop skills and capabilities from product knowledge in our stores to advanced leadership principles for our leaders.

In partnership with CVS retail pharmacy and Premise onsite clinics, we launched a vaccine program, providing onsite access to

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

| | | |  | | | 4 | | |

sites across the country.

In 2021, we continued to offer emergency paid leave for associates who are suffering from COVID-19.

Our associates and customers drive our success.

We strive to maintain a culture of safety, which begins with our leaders modeling the behaviors we want our associates to adopt.

*Corporate Responsibility Report*

Additional information regarding our activities related to our people and human capital strategy, as well as our workforce diversity data, can be found in our Corporate Responsibility Report and Culture, Diversity & Inclusion Report, which are published annually.

The contents of these reports are not incorporated by reference into this Annual Report on Form 10-K or in any other report or document we file with the SEC.

In addition to oversight by the full Board of Directors, the Board has also delegated primary responsibility for more frequent and in-depth oversight of the Company’s sustainability strategies and initiatives and reviewing the Company’s position on significant environmental and social issues to the sustainability committee of the Board of Directors.

*Greenhouse Gas Emissions*

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

| | | |  | | | 5 | | |

By the end of 2022, we plan to announce a science based net-zero target.

The new target will include near and long-term greenhouse gas (GHG) emissions reduction goals for our full value chain.

In addition to reducing GHG emissions from our operations, the new target will also include reduction efforts for our supply chain and the products we sell.

See [Item 6](#i9842e66b35c94868bbc06decd778cbf4_46), “Selected Financial Data”, of this Annual Report on Form 10-K (Annual Report), for historical revenues, profits and identifiable assets.

We are among the many businesses, including home centers, paint stores, hardware stores, lumber yards and garden centers, whose revenues are included in the Building Material and Garden Equipment and Supplies Dealers Subsector (444) of the Retail Trade Sector of the North American Industry Classification System (NAICS), the standard used by Federal statistical agencies in classifying business establishments for the purpose of collecting, analyzing, and publishing statistical data related to the U.S. business economy.

NAICS 444 represents roughly half of what we consider the total U.S. market for our products and services.

value, across every channel and community we serve.

In fiscal 2020, we enhanced our distribution network by adding thirteen XDTs, two BDCs, and one FC.

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

In addition, our Project Specialist

In fiscal 2020, we expanded our workforce, hiring associates in part-time, seasonal and full-time positions to fulfill the seasonal demand of our Spring season, increased demand during the COVID-19 pandemic as customers focused on home improvement projects, and a nationwide effort to modify our store layout.

To foster an inclusive culture, we launched seven business resource employee groups sponsored by our executive leadership team in 2019 and continued to support those groups virtually in 2020.

We offer a variety of leadership and development programs that develop diverse and other high potential associates.

We have also seen great strides in our internal culture.

This year, we saw higher participation and engagement scores in our annual Building Engagement and Success Together (BEST) associate engagement survey which helps senior management understand from our associates what Lowe’s is doing well and where we have opportunities for improvement.

We also provided 14 days of emergency paid leave for all associates who needed it, and up to four weeks of emergency paid leave for associates at high risk of severe illness from COVID-19.

During fiscal 2020, we provided $915 million in incremental COVID-related financial support for our front-line hourly associates.

This included seven discretionary payments of $300 for full-time hourly associates and $150 for part-time hourly associates, as well as a temporary $2 per hour wage increase in the month of April, and emergency paid leave taken by associates who needed it.

In fiscal 2019, we published a human rights policy and a revised conflict minerals policy to hold all suppliers to our rigorous standards.

In fiscal 2020, we also updated our Vendor Code of Conduct with enhanced environmental standards for all suppliers.

We continue to expand our product portfolio with more environmentally friendly products that provide health and environmental benefits to our customers and communities.

In fiscal 2020, approximately 500 retail locations upgraded to interior light-emitting diode (LED) lighting.

We also replaced 100 stores’ aging HVAC units with high-efficiency models.

Our renewable energy portfolio expanded in 2020 when 100 megawatts of wind energy became operational in central Texas, which will produce the equivalent amount of energy to power all 144 Lowe’s stores in Texas.

Lowe’s legacy has long included a deep commitment to the communities where we live and work.

In 2020, the global pandemic forced everyone to live and work differently, but we remained committed to supporting the well-being of our associates, customers, and communities, including healthcare providers and first responders.

While adapting our own business to the challenges associated with the COVID-19 pandemic, we witnessed our nonprofit partners’ needs growing rapidly as well.

At a time when too many individuals already struggle to have a safe and healthy place to live, small businesses faced unprecedented challenges, especially across minority and rural communities.

Determined to help make a difference and putting action behind our words of commitment to our communities, Lowe’s contributed $109 million in pandemic relief to support our communities, including grants to support minority-owned and rural small businesses.

Lowe's established a small business grant program in partnership with Local Initiatives Support Corporation (LISC).

Throughout 2020, the program provided grants of up to $20,000 to rural, minority-owned, and women-owned small business owners to help meet their most immediate needs.

For many, that meant being able to pay rent and utilities, meet payroll, pay outstanding debt to vendors, upgrade technology infrastructure, and support other immediate operational costs.

As the COVID-19 global pandemic persisted throughout 2020, Lowe’s took seriously our responsibility to provide essential products and services to our customers, government officials, and first responders.

In addition to donating essential personal protective equipment (PPE) and products to help keep medical professionals on the front lines safe and healthy, we also empowered all Lowe’s stores to donate masks and respirators to local small businesses to help them remain open or reopen under challenging circumstances.

Despite the challenges of the pandemic, we have continued to focus our philanthropy by investing in safe, affordable housing initiatives and workforce development programs that address the skilled trades gap.

Lowe’s also supports veteran-related initiatives within these two focus areas and continues to assist customers, associates and communities before, during, and after natural disasters by partnering with disaster response and relief organizations.

In addition, we are proud to report that in 2020, every Lowe’s store in the United States and Canada was able to contribute to their communities through the Lowe’s Heroes program.

Lowe's is also dedicated to helping our associates in times of need.

For the fiscal year ended January [removed: 29, 2021][added: 28, 2022]

[removed: ][added: ]

| [removed: Title] [added: Title] of each [removed: class] [added: class] | | | [removed: Trading Symbol(s)] [added: Trading Symbol(s)] | | | [removed: Name] [added: Name] of each exchange on which [removed: registered] [added: registered] | | |

| Common Stock, par value $0.50 per share | | | [removed: LOW] [added: LOW] | | | New York Stock Exchange | | |

As of July [removed: 31, 2020,] [added: 30, 2021,] 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: $112.5] [added: $134.8] billion based on the closing sale price as reported on the New York Stock Exchange.

| CLASS | | | | | | OUTSTANDING AT [removed: 3/19/2021] [added: 3/17/2022] | | |

| Common Stock, $0.50 par value | | | | | | [removed: 717,256,852] [added: 661,561,297] | | |

| Portions of the Proxy Statement for Lowe’s [removed: 2021] [added: 2022] Annual Meeting of Shareholders | | | | | | Part III | | |

| [Disclosure Regarding Forward-Looking [removed: Statements](#i9842e66b35c94868bbc06decd778cbf4_10)] [added: Statements](#i5790ee7567214d22b5464b0ca6ad6895_10)] | | | | | | | | | [removed: [ii](#i9842e66b35c94868bbc06decd778cbf4_10)] [added: [ii](#i5790ee7567214d22b5464b0ca6ad6895_10)] | | |

| | | | Item 1. | | | [removed: [Business](#i9842e66b35c94868bbc06decd778cbf4_16)] [added: [Business](#i5790ee7567214d22b5464b0ca6ad6895_16)] | | | [removed: [1](#i9842e66b35c94868bbc06decd778cbf4_16)] [added: [1](#i5790ee7567214d22b5464b0ca6ad6895_16)] | | |

| | | | Item 1A. | | | [Risk [removed: Factors](#i9842e66b35c94868bbc06decd778cbf4_22)] [added: Factors](#i5790ee7567214d22b5464b0ca6ad6895_19)] | | | [removed: [7](#i9842e66b35c94868bbc06decd778cbf4_22)] [added: [7](#i5790ee7567214d22b5464b0ca6ad6895_19)] | | |

| | | | Item 1B. | | | [Unresolved Staff [removed: Comments](#i9842e66b35c94868bbc06decd778cbf4_25)] [added: Comments](#i5790ee7567214d22b5464b0ca6ad6895_22)] | | | [removed: [14](#i9842e66b35c94868bbc06decd778cbf4_25)] [added: [15](#i5790ee7567214d22b5464b0ca6ad6895_22)] | | |

| | | | Item 2. | | | [removed: [Properties](#i9842e66b35c94868bbc06decd778cbf4_28)] [added: [Properties](#i5790ee7567214d22b5464b0ca6ad6895_25)] | | | [removed: [14](#i9842e66b35c94868bbc06decd778cbf4_28)] [added: [15](#i5790ee7567214d22b5464b0ca6ad6895_25)] | | |

| | | | Item 3. | | | [Legal [removed: Proceedings](#i9842e66b35c94868bbc06decd778cbf4_31)] [added: Proceedings](#i5790ee7567214d22b5464b0ca6ad6895_28)] | | | [removed: [14](#i9842e66b35c94868bbc06decd778cbf4_31)] [added: [16](#i5790ee7567214d22b5464b0ca6ad6895_28)] | | |

| | | | Item 4. | | | [Mine Safety [removed: Disclosures](#i9842e66b35c94868bbc06decd778cbf4_34)] [added: Disclosures](#i5790ee7567214d22b5464b0ca6ad6895_31)] | | | [removed: [14](#i9842e66b35c94868bbc06decd778cbf4_34)] [added: [16](#i5790ee7567214d22b5464b0ca6ad6895_31)] | | |

| | | | | | | [Information About Our Executive [removed: Officers](#i9842e66b35c94868bbc06decd778cbf4_37)] [added: Officers](#i5790ee7567214d22b5464b0ca6ad6895_34)] | | | [removed: [15](#i9842e66b35c94868bbc06decd778cbf4_37)] [added: [17](#i5790ee7567214d22b5464b0ca6ad6895_34)] | | |

| | | | Item 5. | | | [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#i9842e66b35c94868bbc06decd778cbf4_43)] [added: Securities](#i5790ee7567214d22b5464b0ca6ad6895_40)] | | | [removed: [16](#i9842e66b35c94868bbc06decd778cbf4_43)] [added: [18](#i5790ee7567214d22b5464b0ca6ad6895_40)] | | |

| | | | Item 7. | | | [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#i9842e66b35c94868bbc06decd778cbf4_49)] [added: Operations](#i5790ee7567214d22b5464b0ca6ad6895_46)] | | | [removed: [18](#i9842e66b35c94868bbc06decd778cbf4_49)] [added: [20](#i5790ee7567214d22b5464b0ca6ad6895_46)] | | |

| | | | Item 7A. | | | [Quantitative and Qualitative Disclosures About Market [removed: Risk](#i9842e66b35c94868bbc06decd778cbf4_91)] [added: Risk](#i5790ee7567214d22b5464b0ca6ad6895_82)] | | | [removed: [31](#i9842e66b35c94868bbc06decd778cbf4_91)] [added: [31](#i5790ee7567214d22b5464b0ca6ad6895_82)] | | |

| | | | Item 8. | | | [Financial Statements and Supplementary [removed: Data](#i9842e66b35c94868bbc06decd778cbf4_94)] [added: Data](#i5790ee7567214d22b5464b0ca6ad6895_85)] | | | [removed: [32](#i9842e66b35c94868bbc06decd778cbf4_94)] [added: [33](#i5790ee7567214d22b5464b0ca6ad6895_85)] | | |

| | | | Item 9. | | | [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#i9842e66b35c94868bbc06decd778cbf4_223)] [added: Disclosure](#i5790ee7567214d22b5464b0ca6ad6895_187)] | | | [removed: [68](#i9842e66b35c94868bbc06decd778cbf4_223)] [added: [68](#i5790ee7567214d22b5464b0ca6ad6895_187)] | | |

| | | | Item 9A. | | | [Controls and [removed: Procedures](#i9842e66b35c94868bbc06decd778cbf4_226)] [added: Procedures](#i5790ee7567214d22b5464b0ca6ad6895_190)] | | | [removed: [68](#i9842e66b35c94868bbc06decd778cbf4_226)] [added: [68](#i5790ee7567214d22b5464b0ca6ad6895_190)] | | |

| | | | Item 9B. | | | [Other [removed: Information](#i9842e66b35c94868bbc06decd778cbf4_229)] [added: Information](#i5790ee7567214d22b5464b0ca6ad6895_193)] | | | [removed: [68](#i9842e66b35c94868bbc06decd778cbf4_229)] [added: [68](#i5790ee7567214d22b5464b0ca6ad6895_193)] | | |

| | | | Item 10. | | | [Directors, Executive Officers and Corporate [removed: Governance](#i9842e66b35c94868bbc06decd778cbf4_235)] [added: Governance](#i5790ee7567214d22b5464b0ca6ad6895_199)] | | | [removed: [69](#i9842e66b35c94868bbc06decd778cbf4_235)] [added: [69](#i5790ee7567214d22b5464b0ca6ad6895_199)] | | |

| | | | Item 11. | | | [Executive [removed: Compensation](#i9842e66b35c94868bbc06decd778cbf4_238)] [added: Compensation](#i5790ee7567214d22b5464b0ca6ad6895_202)] | | | [removed: [69](#i9842e66b35c94868bbc06decd778cbf4_238)] [added: [69](#i5790ee7567214d22b5464b0ca6ad6895_202)] | | |

| | | | Item 12. | | | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#i9842e66b35c94868bbc06decd778cbf4_241)] [added: Matters](#i5790ee7567214d22b5464b0ca6ad6895_205)] | | | [removed: [69](#i9842e66b35c94868bbc06decd778cbf4_241)] [added: [69](#i5790ee7567214d22b5464b0ca6ad6895_205)] | | |

| | | | Item 13. | | | [Certain Relationships and Related Transactions, and Director [removed: Independence](#i9842e66b35c94868bbc06decd778cbf4_244)] [added: Independence](#i5790ee7567214d22b5464b0ca6ad6895_208)] | | | [removed: [69](#i9842e66b35c94868bbc06decd778cbf4_244)] [added: [69](#i5790ee7567214d22b5464b0ca6ad6895_208)] | | |

| | | | Item 14. | | | [Principal Accountant Fees and [removed: Services](#i9842e66b35c94868bbc06decd778cbf4_247)] [added: Services](#i5790ee7567214d22b5464b0ca6ad6895_211)] | | | [removed: [69](#i9842e66b35c94868bbc06decd778cbf4_247)] [added: [69](#i5790ee7567214d22b5464b0ca6ad6895_211)] | | |

| | | | Item 15. | | | [Exhibits and Financial Statement [removed: Schedules](#i9842e66b35c94868bbc06decd778cbf4_253)] [added: Schedules](#i5790ee7567214d22b5464b0ca6ad6895_217)] | | | [removed: [70](#i9842e66b35c94868bbc06decd778cbf4_253)] [added: [70](#i5790ee7567214d22b5464b0ca6ad6895_217)] | | |

| | | | Item 16. | | | [Form 10-K [removed: Summary](#i9842e66b35c94868bbc06decd778cbf4_265)] [added: Summary](#i5790ee7567214d22b5464b0ca6ad6895_229)] | | | [removed: [80](#i9842e66b35c94868bbc06decd778cbf4_265)] [added: [80](#i5790ee7567214d22b5464b0ca6ad6895_229)] | | |

For a detailed description of the risks and uncertainties that we are exposed to, you should read [Item [removed: 1A](#i9842e66b35c94868bbc06decd778cbf4_22),] [added: 1A](#i5790ee7567214d22b5464b0ca6ad6895_19),] “Risk Factors” included elsewhere in this Annual Report.

| | | | Item 6. | | | [Reserved](#i5790ee7567214d22b5464b0ca6ad6895_43) | | | [19](#i5790ee7567214d22b5464b0ca6ad6895_43) | | |

| | | | Item 9C. | | | [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](#i5790ee7567214d22b5464b0ca6ad6895_1917) | | | [68](#i5790ee7567214d22b5464b0ca6ad6895_1917) | | |

| | | | | | | [Signatures](#i5790ee7567214d22b5464b0ca6ad6895_232) | | | [81](#i5790ee7567214d22b5464b0ca6ad6895_232) | | |

| | | | | | | | | |

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

| | | |  | | | i | | |

| | | | | | | | | |

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

| | | |  | | | ii | | |

| | | | Item 6. | | | [Selected Financial Data](#i9842e66b35c94868bbc06decd778cbf4_46) | | | [17](#i9842e66b35c94868bbc06decd778cbf4_46) | | |

| | | | | | | [Signatures](#i9842e66b35c94868bbc06decd778cbf4_268) | | | [81](#i9842e66b35c94868bbc06decd778cbf4_268) | | |

ii

At January [removed: 29, 2021,] [added: 28, 2022,] our properties consisted of [removed: 1,974] [added: 1,971] stores in the [removed: U.S.] [added: United States] and Canada with a total of approximately 208 million square feet of selling space.

Of the total stores operating at January [removed: 29, 2021,] [added: 28, 2022,] approximately 84% are owned, which includes stores on leased land, with the remainder being leased from third parties.

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| | | |  | | | 15 | | |

| Marvin R. Ellison | | | | | | [removed: 56] [added: 57] | | | | | | [added: Chairman,] President and Chief Executive Officer since [added: May 2021; President and Chief Executive Officer,] July [removed: 2018;] [added: 2018 – May 2021;] Chairman of the Board and Chief Executive Officer, J.C. Penney Company, Inc. (a department store retailer), 2016 – May 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 | | | | | | [removed: 58] [added: 59] | | | | | | 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 | | | | | | [removed: 55] [added: 56] | | | | | | Executive Vice [removed: President and] [added: President,] Chief Financial Officer since November 2018; Executive Vice President and Chief Financial Officer, CVS Health Corporation (a [removed: pharmacy innovation] [added: diversified health solutions] company), 2010 – November 2018. | | |

| Janice Dupré | | | | | | [removed: 56] [added: 57] | | | | | | Executive Vice President, Human Resources since June 2020; Senior Vice President, Talent Management & Diversity and Global Chief Diversity Officer, January 2020 – June 2020; Vice President, Leadership Development and Global Chief Diversity Officer, November 2017 – January 2020; Vice President of Diversity & Inclusion, McKesson Corporation (a healthcare company), June 2015 – October 2017. | | |

| Donald E. Frieson | | | | | | [removed: 62] [added: 63] | | | | | | 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 | | | | | | [removed: 51] [added: 52] | | | | | | Executive Vice President, Chief Information Officer since November 2018; Senior Vice President, [removed: Technology] [added: Digital] and [removed: Digital,] [added: Marketing Technology,] Target Corporation (a department store retailer), January 2017 – November 2018; Vice President, [removed: Technology] [added: Digital] and [removed: Digital,] [added: Marketing Technology,] Target Corporation, 2013 – December 2016. | | |

| Ross W. McCanless | | | | | | [removed: 63] [added: 64] | | | | | | Executive Vice President, General Counsel and Corporate Secretary since [removed: 2017;] [added: 2018;] Chief Legal Officer, Secretary and Chief Compliance Officer, 2016 – [removed: 2017;] [added: 2018;] General Counsel, Secretary and Chief Compliance Officer, 2015 – 2016; Chief Legal Officer, Extended Stay America, Inc. (a hotel operating company) and ESH Hospitality, Inc. (a hotel real estate investment company), 2013 – 2014. | | |

| Joseph M. McFarland III | | | | | | [removed: 51] [added: 52] | | | | | | 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. | | |

| Marisa F. Thalberg | | | | | | [removed: 51] [added: 52] | | | | | | Executive Vice President, Chief Brand and Marketing Officer since February 2020; Global Chief Brand Officer, Taco Bell Corporation (a fast-food company), January 2018 – February 2020; Chief Marketing Officer, Taco Bell Corporation, January 2016 – January 2018; Chief Brand Engagement Officer, Taco Bell Corporation, May 2015 – January 2016; Vice President, Corporate Digital and Content Marketing Worldwide, The Estée Lauder Companies (a beauty products company), 2007 – May 2015. | | |

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| | | |  | | | 17 | | |

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| Dan C. Griggs, Jr. | | | | | | 43 | | | | | | Senior Vice President, Tax and Chief Accounting Officer since February 2021; Vice President, Chief Accounting Officer, October 2020 – February 2021; Vice President, Corporate Controller, May 2019 – October 2020; Vice President Corporate Controller, CommScope Inc. (a global network infrastructure provider), March 2019 – May 2019; Technical Accounting Director, CommScope Inc., October 2015 – March 2019. | | |

As of March [removed: 19, 2021,] [added: 17, 2022,] there were [removed: 21,657] [added: 21,284] holders of record of Lowe’s common stock.

The graph assumes $100 invested on [removed: January 29, 2016] [added: February 3, 2017] in the Company’s common stock and each of the indices.

[removed: ][added: ]

| | | | [removed: 1/29/2016] [added: 2/3/2017] | | | | | | [removed: 2/3/2017] [added: 2/2/2018] | | | | | | [removed: 2/2/2018] [added: 2/1/2019] | | | | | | [removed: 2/1/2019] [added: 1/31/2020] | | | | | | [removed: 1/31/2020] [added: 1/29/2021] | | | | | | [removed: 1/29/2021] [added: 1/28/2022] | | |

The following table sets forth information with respect to purchases of the Company’s common stock made during the fourth quarter of fiscal [removed: 2020:][added: 2021:]

2 *On December [removed: 9, 2020,] [added: 15, 2021,] the Company announced that its Board of Directors authorized an additional [removed: $15.0] [added: $13.0] billion of share repurchases, in addition to the [removed: $10.0] [added: $15.0] billion of share repurchases authorized by the Board of Directors in December [removed: 2018,] [added: 2020,] with no expiration.*

| Lowe’s | | | $ | 100.00 | | | | | $ | 141.08 | | | | | $ | 137.68 | | | | | $ | 167.96 | | | | | $ | 245.12 | | | | | $ | 350.10 | |

| S&P 500 | | | 100.00 | | | | | | 122.62 | | | | | | 122.55 | | | | | | 148.95 | | | | | | 174.62 | | | | | | 211.27 | | |

| S&P Retail Index | | | $ | 100.00 | | | | | $ | 142.48 | | | | | $ | 154.19 | | | | | $ | 185.97 | | | | | $ | 262.93 | | | | | $ | 278.43 | |

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| | | |  | | | 18 | | |

| October 30, 2021 - November 26, 2021 3 | | | 12,081,035 | | | | | | $ | 248.99 | | | | | 12,080,454 | | | | | | $ | 7,307,846,188 | |

| November 27, 2021 - December 31, 2021 | | | 1,147 | | | | | | 253.46 | | | | | | — | | | | | | 20,307,846,188 | | |

| January 1, 2022 - January 28, 2022 3 | | | 4,059,224 | | | | | | 245.34 | | | | | | 4,044,512 | | | | | | 19,727,849,966 | | |

| As of January 28, 2022 | | | 16,141,406 | | | | | | $ | 248.07 | | | | | 16,124,966 | | | | | | $ | 19,727,849,966 | |

3 *In November 2021, the Company entered into an Accelerated Share Repurchase (ASR) agreement with a third-party financial institution to repurchase the Company’s common stock.

At inception, pursuant to the agreement, the Company paid $3.0 billion to the financial institution and received an initial delivery of 10.3 million shares.

In January 2022, prior to the end of the fiscal year, the Company finalized the transaction and received an additional 1.6 million shares.

The average price paid per share in settlement of the ASR agreement included in the table above was determined with reference to the volume-weighted average price of the Company’s common stock over the term of the ASR agreement.

See* *[Note](#i5790ee7567214d22b5464b0ca6ad6895_151) [1](#i5790ee7567214d22b5464b0ca6ad6895_151)[0](#i5790ee7567214d22b5464b0ca6ad6895_151)* *to the consolidated financial statements included herein for additional information regarding share repurchases.*

| Lowe’s | | | $ | 100.00 | | | | | $ | 102.27 | | | | | $ | 141.64 | | | | | $ | 135.51 | | | | | $ | 162.21 | | | | | $ | 232.84 | |

| S&P 500 | | | 100.00 | | | | | | 121.06 | | | | | | 148.46 | | | | | | 148.38 | | | | | | 180.37 | | | | | | 211.48 | | |

| S&P Retail Index | | | $ | 100.00 | | | | | $ | 116.33 | | | | | $ | 164.08 | | | | | $ | 176.14 | | | | | $ | 210.51 | | | | | $ | 295.76 | |

| October 31, 2020 - November 27, 2020 | | | 19,438,168 | | | | | | $ | 160.59 | | | | | 19,437,809 | | | | | | $ | 4,717,617,201 | |

| November 28, 2020 - January 1, 2021 | | | 2,086 | | | | | | 162.37 | | | | | | — | | | | | | 19,717,617,201 | | |

| January 2, 2021 - January 29, 2021 | | | 1,632,370 | | | | | | 160.67 | | | | | | 1,627,242 | | | | | | 19,717,617,201 | | |

| As of January 29, 2021 | | | 21,072,624 | | | | | | $ | 160.59 | | | | | 21,065,051 | | | | | | $ | 19,717,617,201 | |

Not applicable.

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

| | | |  | | | 19 | | |

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| Selected Statement of Earnings Data (In millions, except per share data) | | | 2020 | | | | | | 2019 | | | | | | 20181 | | | | | | 2017 | | | | | | 20162 | | |

| Net sales | | | $ | 89,597 | | | | | $ | 72,148 | | | | | $ | 71,309 | | | | | $ | 68,619 | | | | | $ | 65,017 | |

| Gross margin | | | 29,572 | | | | | | 22,943 | | | | | | 22,908 | | | | | | 22,434 | | | | | | 21,674 | | |

| Operating income | | | 9,647 | | | | | | 6,314 | | | | | | 4,018 | | | | | | 6,586 | | | | | | 5,846 | | |

| Net earnings | | | 5,835 | | | | | | 4,281 | | | | | | 2,314 | | | | | | 3,447 | | | | | | 3,093 | | |

| Basic earnings per common share | | | 7.77 | | | | | | 5.49 | | | | | | 2.84 | | | | | | 4.09 | | | | | | 3.48 | | |

| Diluted earnings per common share | | | 7.75 | | | | | | 5.49 | | | | | | 2.84 | | | | | | 4.09 | | | | | | 3.47 | | |

| Dividends per share | | | $ | 2.30 | | | | | $ | 2.13 | | | | | $ | 1.85 | | | | | $ | 1.58 | | | | | $ | 1.33 | |

| Selected Balance Sheet Data | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Total assets3 | | | $ | 46,735 | | | | | $ | 39,471 | | | | | $ | 34,508 | | | | | $ | 35,291 | | | | | $ | 34,408 | |

| Long-term debt, excluding current maturities | | | $ | 20,668 | | | | | $ | 16,768 | | | | | $ | 14,391 | | | | | $ | 15,564 | | | | | $ | 14,394 | |

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.*

2 *Fiscal 2016 contained 53 weeks, while all other years contained 52 weeks.*

3 *Effective February 2, 2019, the Company adopted ASU 2016-02, Leases (Topic 842), and all related amendments, using the optional transition approach to not restate comparative periods and recognized the cumulative impact of adoption in the opening balance of retained earnings.

Therefore, results for reporting periods beginning after February 1, 2019 are presented under ASU 2016-02, while comparative prior period amounts have not been restated and continue to be presented under accounting standards in effect in those periods.*

| [Management’s Report on Internal Control over Financial [removed: Reporting](#i9842e66b35c94868bbc06decd778cbf4_97)] [added: Reporting](#i5790ee7567214d22b5464b0ca6ad6895_88)] | | | [removed: [33](#i9842e66b35c94868bbc06decd778cbf4_97)] [added: [34](#i5790ee7567214d22b5464b0ca6ad6895_88)] | | |

| [Report of Independent Registered Public Accounting [removed: Firm](#i9842e66b35c94868bbc06decd778cbf4_100)] [added: Firm](#i5790ee7567214d22b5464b0ca6ad6895_91) (PCAOB ID No. 34)] | | | [removed: [34](#i9842e66b35c94868bbc06decd778cbf4_100)] [added: [35](#i5790ee7567214d22b5464b0ca6ad6895_91)] | | |

| [Consolidated Statements of [removed: Earnings](#i9842e66b35c94868bbc06decd778cbf4_106)] [added: Earnings](#i5790ee7567214d22b5464b0ca6ad6895_97)] | | | [removed: [37](#i9842e66b35c94868bbc06decd778cbf4_106)] [added: [38](#i5790ee7567214d22b5464b0ca6ad6895_97)] | | |

| [Consolidated Statements of Comprehensive [removed: Income](#i9842e66b35c94868bbc06decd778cbf4_109)] [added: Income](#i5790ee7567214d22b5464b0ca6ad6895_100)] | | | [removed: [37](#i9842e66b35c94868bbc06decd778cbf4_109)] [added: [38](#i5790ee7567214d22b5464b0ca6ad6895_100)] | | |

| [Consolidated Balance [removed: Sheets](#i9842e66b35c94868bbc06decd778cbf4_112)] [added: Sheets](#i5790ee7567214d22b5464b0ca6ad6895_103)] | | | [removed: [38](#i9842e66b35c94868bbc06decd778cbf4_112)] [added: [39](#i5790ee7567214d22b5464b0ca6ad6895_103)] | | |

[removed: | [Consolidated] [added: Consolidated] Statements of Shareholders’ [removed: Equity](#i9842e66b35c94868bbc06decd778cbf4_118) | | | [39](#i9842e66b35c94868bbc06decd778cbf4_118) | | |][added: (Deficit)/Equity]

| [Consolidated Statements of Cash [removed: Flows](#i9842e66b35c94868bbc06decd778cbf4_124)] [added: Flows](#i5790ee7567214d22b5464b0ca6ad6895_112)] | | | [removed: [40](#i9842e66b35c94868bbc06decd778cbf4_124)] [added: [41](#i5790ee7567214d22b5464b0ca6ad6895_112)] | | |

| [Notes to Consolidated Financial [removed: Statements](#i9842e66b35c94868bbc06decd778cbf4_127)] [added: Statements](#i5790ee7567214d22b5464b0ca6ad6895_115)] | | | [removed: [41](#i9842e66b35c94868bbc06decd778cbf4_127)] [added: [42](#i5790ee7567214d22b5464b0ca6ad6895_115)] | | |

| [Note 1: Summary of Significant Accounting [removed: Policies](#i9842e66b35c94868bbc06decd778cbf4_130)] [added: Policies](#i5790ee7567214d22b5464b0ca6ad6895_118)] | | | [removed: [41](#i9842e66b35c94868bbc06decd778cbf4_130)] [added: [42](#i5790ee7567214d22b5464b0ca6ad6895_118)] | | |

| [Note 3: Fair Value [removed: Measurements](#i9842e66b35c94868bbc06decd778cbf4_154)] [added: Measurements](#i5790ee7567214d22b5464b0ca6ad6895_124)] | | | [removed: [49](#i9842e66b35c94868bbc06decd778cbf4_154)] [added: [50](#i5790ee7567214d22b5464b0ca6ad6895_124)] | | |

| [Note 4: Property and Accumulated [removed: Depreciation](#i9842e66b35c94868bbc06decd778cbf4_160)] [added: Depreciation](#i5790ee7567214d22b5464b0ca6ad6895_130)] | | | [removed: [51](#i9842e66b35c94868bbc06decd778cbf4_160)] [added: [52](#i5790ee7567214d22b5464b0ca6ad6895_130)] | | |

[removed: | [Note 5: Leases](#i9842e66b35c94868bbc06decd778cbf4_148) | | | [52](#i9842e66b35c94868bbc06decd778cbf4_148) | | |][added: NOTE 6: Leases]

[removed: | [Note 6:] [added: NOTE 7:] Exit [removed: Activities](#i9842e66b35c94868bbc06decd778cbf4_166) | | | [53](#i9842e66b35c94868bbc06decd778cbf4_166) | | |][added: Activities]

| [removed: [Note 7: Short-Term Borrowings](#i9842e66b35c94868bbc06decd778cbf4_169)] [added: Short-term borrowings] | | | [removed: [54](#i9842e66b35c94868bbc06decd778cbf4_169)] [added: 5] | | | [added: | | | 13 | | | | | | — | | |]

[removed: | [Note 8: Long-Term Debt](#i9842e66b35c94868bbc06decd778cbf4_175) | | | [55](#i9842e66b35c94868bbc06decd778cbf4_175) | | |][added: *Long-Term Debt*]

| [removed: [Note 9:] [added: [Note](#i5790ee7567214d22b5464b0ca6ad6895_148) [9](#i5790ee7567214d22b5464b0ca6ad6895_148)[:] Derivative [removed: Instruments](#i9842e66b35c94868bbc06decd778cbf4_217)] [added: Instruments](#i5790ee7567214d22b5464b0ca6ad6895_148)] | | | [removed: [56](#i9842e66b35c94868bbc06decd778cbf4_217)] [added: [57](#i5790ee7567214d22b5464b0ca6ad6895_148)] | | |

[removed: | [Note] [added: NOTE] 10: Shareholders’ [removed: Equity](#i9842e66b35c94868bbc06decd778cbf4_178) | | | [57](#i9842e66b35c94868bbc06decd778cbf4_178) | | |][added: (Deficit)/Equity]

[removed: | [Note] [added: NOTE] 11: [removed: Accounting for] Share-Based [removed: Payments](#i9842e66b35c94868bbc06decd778cbf4_184) | | | [58](#i9842e66b35c94868bbc06decd778cbf4_184) | | |][added: Payments]

| [Note [removed: 12:] [added: 1](#i5790ee7567214d22b5464b0ca6ad6895_157)[2](#i5790ee7567214d22b5464b0ca6ad6895_157)[:] Employee Retirement [removed: Plans](#i9842e66b35c94868bbc06decd778cbf4_190)] [added: Plans](#i5790ee7567214d22b5464b0ca6ad6895_157)] | | | [removed: [62](#i9842e66b35c94868bbc06decd778cbf4_190)] [added: [63](#i5790ee7567214d22b5464b0ca6ad6895_157)] | | |

| [Note [removed: 13:] [added: 1](#i5790ee7567214d22b5464b0ca6ad6895_160)[3](#i5790ee7567214d22b5464b0ca6ad6895_160)[:] Income [removed: Taxes](#i9842e66b35c94868bbc06decd778cbf4_193)] [added: Taxes](#i5790ee7567214d22b5464b0ca6ad6895_160)] | | | [removed: [63](#i9842e66b35c94868bbc06decd778cbf4_193)] [added: [64](#i5790ee7567214d22b5464b0ca6ad6895_160)] | | |

| [Note [removed: 14:] [added: 1](#i5790ee7567214d22b5464b0ca6ad6895_163)[4](#i5790ee7567214d22b5464b0ca6ad6895_163)[:] Earnings Per [removed: Share](#i9842e66b35c94868bbc06decd778cbf4_199)] [added: Share](#i5790ee7567214d22b5464b0ca6ad6895_163)] | | | [removed: [65](#i9842e66b35c94868bbc06decd778cbf4_199)] [added: [65](#i5790ee7567214d22b5464b0ca6ad6895_163)] | | |

| [Note [removed: 15: Commitments] [added: 1](#i5790ee7567214d22b5464b0ca6ad6895_166)[5:](#i5790ee7567214d22b5464b0ca6ad6895_166) [Commitments] and [removed: Contingencies](#i9842e66b35c94868bbc06decd778cbf4_202)] [added: Contingencies](#i5790ee7567214d22b5464b0ca6ad6895_166)] | | | [removed: [65](#i9842e66b35c94868bbc06decd778cbf4_202)] [added: [66](#i5790ee7567214d22b5464b0ca6ad6895_166)] | | |

| [Note [removed: 16:] [added: 1](#i5790ee7567214d22b5464b0ca6ad6895_169)[6](#i5790ee7567214d22b5464b0ca6ad6895_169)[:] Related [removed: Parties](#i9842e66b35c94868bbc06decd778cbf4_205)] [added: Parties](#i5790ee7567214d22b5464b0ca6ad6895_169)] | | | [removed: [66](#i9842e66b35c94868bbc06decd778cbf4_205)] [added: [66](#i5790ee7567214d22b5464b0ca6ad6895_169)] | | |

| [Note [removed: 17:] [added: 1](#i5790ee7567214d22b5464b0ca6ad6895_172)[7](#i5790ee7567214d22b5464b0ca6ad6895_172)[:] Other [removed: Information](#i9842e66b35c94868bbc06decd778cbf4_208)] [added: Information](#i5790ee7567214d22b5464b0ca6ad6895_172)] | | | [removed: [66](#i9842e66b35c94868bbc06decd778cbf4_208)] [added: [67](#i5790ee7567214d22b5464b0ca6ad6895_172)] | | |

Our management, with the participation of the Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our Internal Control as of January [removed: 29, 2021.][added: 28, 2022.]

Based on our management’s assessment, we have concluded that, as of January [removed: 29, 2021,] [added: 28, 2022,] our Internal Control is effective.

Their report appears on page [removed: [36](#i9842e66b35c94868bbc06decd778cbf4_103).][added: [37](#i5790ee7567214d22b5464b0ca6ad6895_94).]

We have audited the accompanying consolidated balance sheets of Lowe’s Companies, Inc. and subsidiaries (the “Company”) as of January [removed: 29, 2021] [added: 28, 2022] and January [removed: 31, 2020,] [added: 29, 2021,] the related consolidated statements of earnings, comprehensive income, shareholders’ [removed: equity,] [added: (deficit)/equity,] and cash flows, for each of the three fiscal years in the period ended January [removed: 29, 2021,] [added: 28, 2022,] 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 January [removed: 29, 2021] [added: 28, 2022] and January [removed: 31, 2020,] [added: 29, 2021,] and the results of its operations and its cash flows for each of the three fiscal years in the period ended January [removed: 29, 2021,] [added: 28, 2022,] 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 January [removed: 29, 2021,] [added: 28, 2022,] 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 March [removed: 22, 2021,] [added: 21, 2022,] expressed an unqualified opinion on the Company's internal control over financial reporting.

In the fiscal year ended January [removed: 29, 2021,] [added: 28, 2022,] the Company purchased inventory from a significant number of vendors.

We have audited the internal control over financial reporting of Lowe’s Companies, Inc. and subsidiaries (the “Company”) as of January [removed: 29, 2021,] [added: 28, 2022,] 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 January [removed: 29, 2021,] [added: 28, 2022,] 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 January [removed: 29, 2021,] [added: 28, 2022,] of the Company and our report dated March [removed: 22, 2021,] [added: 21, 2022,] expressed an unqualified opinion on those financial statements.

| | | | January [removed: 29, 2021] [added: 28, 2022] | | | | | | | | | | | | January [removed: 31, 2020] [added: 29, 2021] | | | | | | | | | | | | [removed: February 1, 2019] [added: January 31, 2020] | | | | | | | | |

| Net sales | | | $ | [removed: 89,597] [added: 96,250] | | | | | 100.00 | | % | | | | $ | [removed: 72,148] [added: 89,597] | | | | | 100.00 | | % | | | | $ | [removed: 71,309] [added: 72,148] | | | | | 100.00 | | % |

| Cost of sales | | | [removed: 60,025] [added: 64,194] | | | | | | [removed: 66.99] [added: 66.70] | | | | | | [removed: 49,205] [added: 60,025] | | | | | | [removed: 68.20] [added: 66.99] | | | | | | [removed: 48,401] [added: 49,205] | | | | | | [removed: 67.88] [added: 68.20] | | |

| Gross margin | | | [removed: 29,572] [added: 32,056] | | | | | | [removed: 33.01] [added: 33.30] | | | | | | [removed: 22,943] [added: 29,572] | | | | | | [removed: 31.80] [added: 33.01] | | | | | | [removed: 22,908] [added: 22,943] | | | | | | [removed: 32.12] [added: 31.80] | | |

| Selling, general and administrative | | | [removed: 18,526] [added: 18,301] | | | | | | [removed: 20.68] [added: 19.01] | | | | | | [removed: 15,367] [added: 18,526] | | | | | | [removed: 21.30] [added: 20.68] | | | | | | [removed: 17,413] [added: 15,367] | | | | | | [removed: 24.41] [added: 21.30] | | |

| Depreciation and amortization | | | [removed: 1,399] [added: 1,662] | | | | | | [removed: 1.56] [added: 1.73] | | | | | | [removed: 1,262] [added: 1,399] | | | | | | [removed: 1.75] [added: 1.56] | | | | | | [removed: 1,477] [added: 1,262] | | | | | | [removed: 2.07] [added: 1.75] | | |

| [Note 2: Revenue](#i5790ee7567214d22b5464b0ca6ad6895_121) | | | [48](#i5790ee7567214d22b5464b0ca6ad6895_121) | | |

| [Note](#i5790ee7567214d22b5464b0ca6ad6895_1894) [5](#i5790ee7567214d22b5464b0ca6ad6895_1894)[: Goodwill and Intangible Assets](#i5790ee7567214d22b5464b0ca6ad6895_1894) | | | [52](#i5790ee7567214d22b5464b0ca6ad6895_1894) | | |

| [Note](#i5790ee7567214d22b5464b0ca6ad6895_142) [8](#i5790ee7567214d22b5464b0ca6ad6895_142)[:](#i5790ee7567214d22b5464b0ca6ad6895_142) [D](#i5790ee7567214d22b5464b0ca6ad6895_142)[ebt](#i5790ee7567214d22b5464b0ca6ad6895_142) | | | [55](#i5790ee7567214d22b5464b0ca6ad6895_142) | | |

| | | |  | | | 33 | | |

| | | | | | | | | |

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

| | | |  | | | 34 | | |

| | | | | | | | | |

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

| | | |  | | | 35 | | |

March 21, 2022

| | | | | | | | | |

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

| | | |  | | | 36 | | |

March 21, 2022

| | | | | | | | | |

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

| | | |  | | | 37 | | |

| Net earnings | | | $ | 8,442 | | | | | 8.77 | | % | | | | $ | 5,835 | | | | | 6.51 | | % | | | | $ | 4,281 | | | | | 5.93 | | % |

| | | | | | | | | |

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

| | | |  | | | 38 | | |

| | | | | | | January 28, 2022 | | | | | | January 29, 2021 | | |

| | | | | | | | | |

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

| | | |  | | | 39 | | |

| Repurchases of common stock | | | (63) | | | | | | (32) | | | | | | (449) | | | | | | (12,593) | | | | | | — | | | | | | (13,074) | | |

| Balance January 28, 2022 | | | 670 | | | | | | $ | 335 | | | | | $ | — | | | | | $ | (5,115) | | | | | $ | (36) | | | | | $ | (4,816) | |

| | | | | | | | | |

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

| | | |  | | | 40 | | |

| | | | | | | | | |

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

| | | |  | | | 41 | | |

The Company also continued enhanced cleaning protocols.

These amounts are included in cash flows from other operating liabilities in the accompanying consolidated statements of cash flows.

The following table presents the qualifying employer payroll taxes deferred in accordance with the CARES Act along with the location in the consolidated balance sheets:

| (In millions) | | | January 28, 2022 | | | | | | January 29, 2021 | | |

| Accrued compensation and employee benefits | | | $ | 240 | | | | | $ | 241 | |

| Total deferred qualified employer payroll taxes | | | $ | 240 | | | | | $ | 481 | |

| [Note 2: Revenue](#i9842e66b35c94868bbc06decd778cbf4_136) | | | [48](#i9842e66b35c94868bbc06decd778cbf4_136) | | |

Accounting Pronouncement Recently Adopted

As discussed in Note 5 to the financial statements, the Company changed its method of accounting for leases in the fiscal year ended January 31, 2020 due to the adoption of Financial Accounting Standards Board Accounting Standards Update 2016-02, *Leases (Topic 842)*.

March 22, 2021

| Short-term borrowings | | | | | | $ | — | | | | | $ | 1,941 | |

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

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

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

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

Such restrictions or orders have resulted in, and continue to result in, business closures, work stoppages, slowdowns and delays, among other effects that impact the Company’s operations, as well as customer demand and the operations of our suppliers.

During the remainder of fiscal 2020, the Company provided additional bonus payments to hourly associates, in addition to continued enhanced cleaning protocols and charitable contributions.

Also, in response to the uncertainties surrounding COVID-19, during the first quarter of 2020, the Company took proactive steps to further enhance its liquidity position by temporarily suspending its share repurchase program, increasing the capacity of its revolving credit facilities and the associated commercial paper program, as well as issuing senior notes in March 2020.

During the third quarter, the Company reinstated its previously authorized share repurchase program.

The Company continues to evaluate the carrying amounts of its long-lived assets whenever certain events or changes in circumstances indicate that the carrying amounts may not be recoverable, including potential market impacts from the COVID-19 pandemic.

The Company performed its quarterly assessments of long-lived assets and did not record any material long-lived asset impairments.

As of January 29, 2021, the Company deferred $481 million of qualifying employer payroll taxes, of which $241 million is included in accrued compensation and employee benefits, and $240 million is included in other liabilities in the consolidated balance sheet and included in cash flows from other operating liabilities in the consolidated statement of cash flows.

The Company bases these estimates

Fair value measurements associated with long-lived asset impairments are further described in [Note 3](#i9842e66b35c94868bbc06decd778cbf4_154) to the consolidated financial statements.

| Impairment | | | — | | | | | | — | | | | | | (952) | | |

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

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 classified these fair value measurements as Level 3.

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.

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

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

The

Deferred revenue is presented for merchandise that has not yet transferred control to the customer and for services that have not yet been provided, but for which tender has been accepted.

Reclassifications - Certain prior period amounts have been reclassified to conform to current period presentation, including the separate disclosure of cash flow hedges – net of tax on the consolidated statements of comprehensive income, the inclusion of goodwill within other assets on the consolidated balance sheets, the reclassification of excess property from other assets to property, less accumulated depreciation on the consolidated balance sheets, and the separate disclosure of changes in deferred revenue within operating activities on the consolidated statements of cash flows.

Accounting Pronouncements Recently Adopted - Effective February 2, 2019, the Company adopted ASU 2016-02, *Leases (Topic 842)*, and all related amendments, using the optional transition election to not restate comparative periods for the impact of adopting the standard and recognized the cumulative impact of adoption in the opening balance of retained earnings.

The Company elected the package of transition expedients available for expired or existing contracts, which allowed the carry-forward of historical assessments of (1) whether contracts are or contain leases, (2) lease classification, and (3) initial direct costs.

Adoption of the standard resulted in the recording of additional net lease-related assets and lease-related liabilities of approximately $3.6 billion and $3.9 billion, respectively, as of February 2, 2019.

The difference between the additional lease assets and lease liabilities, net of the $87 million deferred tax impact, was $263 million and was recorded as an adjustment to retained earnings.

This adjustment to retained earnings primarily represents the write-off of right-of-use assets associated with closed locations, net of previously established store closing lease obligations as well as the derecognition of build-to-suit leases.

The adoption of this standard by the Company did not have a material impact on its consolidated statements of earnings, comprehensive income or cash flows and had no impact on the Company’s debt covenant compliance under its current agreements.

See [Note](#i9842e66b35c94868bbc06decd778cbf4_148) 5 for additional details of the Company’s leases.

Accounting Pronouncements Not Yet Adopted \- In March 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2020-04, *Reference Rate Reform (Topic 848): Facilitation of Effects of Reference Rate Reform on Financial Reporting*.

Management’s report on internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) and the report of Deloitte & Touche LLP, the Company’s independent registered public accounting firm, are included in [removed: Item 8] [added: [Item 8](#i5790ee7567214d22b5464b0ca6ad6895_85)] of this Annual Report.

In addition, no change in the Company’s internal control over financial reporting occurred during the fiscal fourth quarter ended January [removed: 29, 2021,] [added: 28, 2022,] that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

Although most of our corporate employees are working remotely due to the COVID-19 global health crisis, we have not experienced a material impact to our internal control over financial reporting.

We continue to monitor the pandemic and its effects on the design and operating effectiveness of our internal controls.

Part III

Not applicable.

| | | | | | | | | |

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

| | | |  | | | 68 | | |

Part III

The other information required by this item is furnished by incorporation by reference to the information under the headings “Proposal 1: Election of Directors”, “Corporate Governance”, and “Additional Information - Shareholder Proposals for the [removed: 2022] [added: 2023] Annual Meeting” in the definitive Proxy Statement for the [removed: 2021] [added: 2022] annual meeting of shareholders, which will be filed with the SEC within 120 days after the fiscal year ended January [removed: 29, 2021] [added: 28, 2022] (the Proxy Statement).

You can also obtain a copy of the complete Code by contacting Investor Relations [added: by phone] at [removed: 1-800-813-7613.][added: 1-800-813-7613 or email at investorrelations@lowes.com.]

The information required by this item is furnished by incorporation by reference to the information under the headings “Corporate Governance – Director Independence”, “Related Person Transactions”, and “Appendix [removed: A:] [added: B:] Categorical Standards for Determination of Director Independence” in the Proxy Statement.

| | | | | | | | | |

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| | | |  | | | 69 | | |

See the following items and page numbers appearing in [removed: Item 8] [added: [Item 8](#i5790ee7567214d22b5464b0ca6ad6895_85)] of this Annual Report:

| | | | [Reports of Independent Registered Public Accounting [removed: Firm](#i9842e66b35c94868bbc06decd778cbf4_100)] [added: Firm](#i5790ee7567214d22b5464b0ca6ad6895_91)] | | | [removed: [34](#i9842e66b35c94868bbc06decd778cbf4_100)] [added: [35](#i5790ee7567214d22b5464b0ca6ad6895_91)] | | |

| | | | [Consolidated Statements of Earnings for each of the three fiscal years in the period ended [removed: January](#i9842e66b35c94868bbc06decd778cbf4_106) [](#i9842e66b35c94868bbc06decd778cbf4_106)[29, 2021](#i9842e66b35c94868bbc06decd778cbf4_106)] [added: January 2](#i5790ee7567214d22b5464b0ca6ad6895_97)[8](#i5790ee7567214d22b5464b0ca6ad6895_97)[, 202](#i5790ee7567214d22b5464b0ca6ad6895_97)[2](#i5790ee7567214d22b5464b0ca6ad6895_97)] | | | [removed: [37](#i9842e66b35c94868bbc06decd778cbf4_106)] [added: [38](#i5790ee7567214d22b5464b0ca6ad6895_97)] | | |

| | | | [Consolidated Statements of Comprehensive Income for each of the three fiscal years in the period ended January [removed: 29, 2021](#i9842e66b35c94868bbc06decd778cbf4_109)] [added: 2](#i5790ee7567214d22b5464b0ca6ad6895_100)[8](#i5790ee7567214d22b5464b0ca6ad6895_100)[, 202](#i5790ee7567214d22b5464b0ca6ad6895_100)[2](#i5790ee7567214d22b5464b0ca6ad6895_100)] | | | [removed: [37](#i9842e66b35c94868bbc06decd778cbf4_109)] [added: [38](#i5790ee7567214d22b5464b0ca6ad6895_100)] | | |

| | | | [Consolidated Balance Sheets at January [removed: 29, 2021 and January 31, 2020](#i9842e66b35c94868bbc06decd778cbf4_112)] [added: 2](#i5790ee7567214d22b5464b0ca6ad6895_103)[8](#i5790ee7567214d22b5464b0ca6ad6895_103)[, 202](#i5790ee7567214d22b5464b0ca6ad6895_103)[2](#i5790ee7567214d22b5464b0ca6ad6895_103) [and January](#i5790ee7567214d22b5464b0ca6ad6895_103) [29](#i5790ee7567214d22b5464b0ca6ad6895_103)[, 202](#i5790ee7567214d22b5464b0ca6ad6895_103)[1](#i5790ee7567214d22b5464b0ca6ad6895_103)] | | | [removed: [38](#i9842e66b35c94868bbc06decd778cbf4_112)] [added: [39](#i5790ee7567214d22b5464b0ca6ad6895_103)] | | |

| | | | [Consolidated Statements of [removed: Shareholders’ Equity] [added: Shareholders’](#i5790ee7567214d22b5464b0ca6ad6895_109) [(Deficit)/](#i5790ee7567214d22b5464b0ca6ad6895_109)[Equity] for each of the three fiscal years in the period ended January [removed: 29, 2021](#i9842e66b35c94868bbc06decd778cbf4_118)] [added: 2](#i5790ee7567214d22b5464b0ca6ad6895_109)[8](#i5790ee7567214d22b5464b0ca6ad6895_109)[, 202](#i5790ee7567214d22b5464b0ca6ad6895_109)[2](#i5790ee7567214d22b5464b0ca6ad6895_109)] | | | [removed: [39](#i9842e66b35c94868bbc06decd778cbf4_118)] [added: [40](#i5790ee7567214d22b5464b0ca6ad6895_109)] | | |

| | | | [Consolidated Statements of Cash Flows for each of the three fiscal years in the period ended January [removed: 29, 2021](#i9842e66b35c94868bbc06decd778cbf4_124)] [added: 2](#i5790ee7567214d22b5464b0ca6ad6895_112)[8](#i5790ee7567214d22b5464b0ca6ad6895_112)[, 202](#i5790ee7567214d22b5464b0ca6ad6895_112)[2](#i5790ee7567214d22b5464b0ca6ad6895_112)] | | | [removed: [40](#i9842e66b35c94868bbc06decd778cbf4_124)] [added: [41](#i5790ee7567214d22b5464b0ca6ad6895_112)] | | |

| | | | [Notes to Consolidated Financial Statements for each of the three fiscal years in the period ended January [removed: 29, 2021](#i9842e66b35c94868bbc06decd778cbf4_127)] [added: 2](#i5790ee7567214d22b5464b0ca6ad6895_115)[8](#i5790ee7567214d22b5464b0ca6ad6895_115)[, 202](#i5790ee7567214d22b5464b0ca6ad6895_115)[2](#i5790ee7567214d22b5464b0ca6ad6895_115)] | | | [removed: [41](#i9842e66b35c94868bbc06decd778cbf4_127)] [added: [42](#i5790ee7567214d22b5464b0ca6ad6895_115)] | | |

| Deferred tax valuation allowance | | | 561 | | | | | | 40 | | | | | | [added: 3] | | | | | | — | | | | | | | | | | | | 601 | | |

| Self-insurance liabilities | | | 1,104 | | | | | | 1,568 | | | | | | | | | | | | (1,579) | | | | | | [removed: 5] [added: 4] | | | | | | 1,093 | | |

| Deferred tax valuation allowance | | | 569 | | | | | | — | | | | | | | | | | | | (8) | | | | | | [removed: 4] [added: 3] | | | | | | 561 | | |

| Self-insurance liabilities | | | 953 | | | | | | 1,711 | | | | | | | | | | | | (1,560) | | | | | | [removed: 5] [added: 4] | | | | | | 1,104 | | |

| Reserve for exit activities | | | 361 | | | | | | — | | | | | | | | | | | | (273) | | | | | | [removed: 7] [added: 5] | | | | | | 88 | | |

| Reserve for loss on obsolete inventory | | | $ | [removed: 77] [added: 182] | | | | | $ | [removed: 1] [added: —] | | | | | [removed: 1] | | | | | | $ | [removed: —] [added: (14)] | | | | | [added: 1] | | | | | | $ | [removed: 78] [added: 168] | |

| Reserve for sales returns | | | [removed: 71] [added: 252] | | | | | | [removed: 123] [added: —] | | | | | | [removed: 3] | | | | | | [removed: —] [added: (7)] | | | | | | | | | | | | [removed: 194] [added: 245] | | |

| Deferred tax valuation allowance | | | [removed: 475] [added: 601] | | | | | | [removed: 94] [added: —] | | | | | | [removed: 4] | | | | | | [removed: —] [added: (11)] | | | | | | [added: 3] | | | | | | [removed: 569] [added: 590] | | |

| Reserve for exit activities | | | [removed: 60] [added: 69] | | | | | | [removed: 384] [added: —] | | | | | | | | | | | | [removed: (83)] [added: (15)] | | | | | | [removed: 6] | | | | | | [removed: 361] [added: 54] | | |

1 *Represents the net [removed: increase] [added: (decrease)/increase] in the required reserve based on the Company’s evaluation of obsolete inventory.*

3 *Represents [removed: the net increase] [added: a (decrease)/increase] in the required reserve based on the Company’s evaluation of [removed: anticipated merchandise returns.][added: deferred tax assets.*]

[removed: 5] [added: 4] *Represents claim payments for self-insured claims.*

[removed: *7*] [added: *5*] *Primarily represents the elimination of exit activity reserves related to rent liabilities upon adoption of ASU 2016-02, Leases (Topic 842), as of February 2, 2019.*

| 3.2 | | | | | | [Bylaws of Lowe’s Companies, Inc., as amended and [removed: restated](http://www.sec.gov/Archives/edgar/data/60667/000006066720000108/exhibit31_05292020.htm) [May] [added: restated May] 29, [removed: 2020](http://www.sec.gov/Archives/edgar/data/60667/000006066720000108/exhibit31_05292020.htm)[.](http://www.sec.gov/Archives/edgar/data/60667/000006066720000108/exhibit31_05292020.htm)] [added: 2020.](http://www.sec.gov/Archives/edgar/data/60667/000006066720000108/exhibit31_05292020.htm)] | | | | | | 8-K | | | | | | 001-07898 | | | | | | 3.1 | | | | | | June 2, 2020 | | |

| 4.9 | | | | | | [removed: [Seventh] [added: [Eighth] Supplemental Indenture, dated as of November [removed: 22, 2010,] [added: 23, 2011,] to the Amended and Restated Indenture, dated as of December 1, 1995, between Lowe’s Companies, Inc. and U.S. Bank National Association, as successor trustee, including as [removed: an exhibit] [added: exhibits] thereto a form of Lowe’s Companies, Inc.’s [removed: 3.750%] [added: 3.800%] Notes maturing in [removed: April 2021.](http://www.sec.gov/Archives/edgar/data/60667/000095012310107654/g25352exv4w1.htm)] [added: November 2021 and a form of Lowe’s Companies, Inc.’s 5.125% Notes maturing in November 2041.](http://www.sec.gov/Archives/edgar/data/60667/000119312511320833/d259831dex41.htm)] | | | | | | 8-K | | | | | | 001-07898 | | | | | | 4.1 | | | | | | November [removed: 22, 2010] [added: 23, 2011] | | |

| 4.10 | | | | | | [removed: [Eighth] [added: [Ninth] Supplemental Indenture, dated as of [removed: November] [added: April] 23, [removed: 2011,] [added: 2012,] to the Amended and Restated Indenture, dated as of December 1, 1995, between Lowe’s Companies, Inc. and U.S. Bank National Association, as successor trustee, including as exhibits thereto a form of Lowe’s Companies, Inc.’s [removed: 3.800%] [added: 1.625%] Notes maturing in [removed: November 2021] [added: April 2017, a form of Lowe’s Companies, Inc.’s 3.120% Notes maturing in April 2022] and a form of Lowe’s Companies, Inc.’s [removed: 5.125%] [added: 4.650%] Notes maturing in [removed: November 2041.](http://www.sec.gov/Archives/edgar/data/60667/000119312511320833/d259831dex41.htm)] [added: April 2042.](http://www.sec.gov/Archives/edgar/data/60667/000119312512175776/d337503dex41.htm)] | | | | | | 8-K | | | | | | 001-07898 | | | | | | 4.1 | | | | | | [removed: November] [added: April] 23, [removed: 2011] [added: 2012] | | |

| 4.11 | | | | | | [removed: [Ninth] [added: [Tenth] Supplemental Indenture, dated as of [removed: April 23, 2012,] [added: September 11, 2013,] to the Amended and Restated Indenture, dated as of December 1, 1995, between Lowe’s Companies, Inc. and U.S. Bank National Association, as successor trustee, including as exhibits thereto a form of Lowe’s Companies, Inc.’s [removed: 1.625% Notes maturing in April 2017, a form of Lowe’s Companies, Inc.’s 3.120%] [added: 3.875%] Notes maturing in [removed: April 2022] [added: September 2023] and a form of Lowe’s Companies, Inc.’s [removed: 4.650%] [added: 5.000%] Notes maturing in [removed: April 2042.](http://www.sec.gov/Archives/edgar/data/60667/000119312512175776/d337503dex41.htm)] [added: September 2043.](http://www.sec.gov/Archives/edgar/data/60667/000119312513364140/d596663dex41.htm)] | | | | | | 8-K | | | | | | 001-07898 | | | | | | 4.1 | | | | | | [removed: April 23, 2012] [added: September 11, 2013] | | |

| 4.12 | | | | | | [removed: [Tenth] [added: [Eleventh] Supplemental Indenture, dated as of September [removed: 11, 2013,] [added: 10, 2014,] to the Amended and Restated Indenture, dated as of December 1, 1995, between Lowe’s Companies, Inc. and U.S. Bank National Association, as successor trustee, including as exhibits thereto a form of Lowe’s Companies, Inc.’s [removed: 3.875%] [added: Floating Rate] Notes maturing in September [removed: 2023] [added: 2019, a form of Lowe’s Companies, Inc.’s 3.125% Notes maturing in September 2024] and a form of Lowe’s Companies, Inc.’s [removed: 5.000%] [added: 4.250%] Notes maturing in September [removed: 2043.](http://www.sec.gov/Archives/edgar/data/60667/000119312513364140/d596663dex41.htm)] [added: 2044.](http://www.sec.gov/Archives/edgar/data/60667/000006066714000155/exhibit41.htm)] | | | | | | 8-K | | | | | | 001-07898 | | | | | | 4.1 | | | | | | September [removed: 11, 2013] [added: 10, 2014] | | |

| 4.13 | | | | | | [removed: [Eleventh] [added: [Twelfth] Supplemental Indenture, dated as of September [removed: 10, 2014,] [added: 16, 2015,] to the Amended and Restated Indenture, dated as of December 1, 1995, between Lowe’s Companies, Inc. and U.S. Bank National Association, as successor trustee, including as exhibits thereto a form of Lowe’s Companies, Inc.’s Floating Rate Notes maturing in September [removed: 2019,] [added: 2018,] a form of Lowe’s Companies, Inc.’s [removed: 3.125%] [added: 3.375%] Notes maturing in September [removed: 2024] [added: 2025] and a form of Lowe’s Companies, Inc.’s [removed: 4.250%] [added: 4.375%] Notes maturing in September [removed: 2044.](http://www.sec.gov/Archives/edgar/data/60667/000006066714000155/exhibit41.htm)] [added: 2045.](http://www.sec.gov/Archives/edgar/data/60667/000006066715000140/exhibit41.htm)] | | | | | | 8-K | | | | | | 001-07898 | | | | | | 4.1 | | | | | | September [removed: 10, 2014] [added: 16, 2015] | | |

| 4.14 | | | | | | [removed: [Twelfth] [added: [Thirteenth] Supplemental Indenture, dated as of [removed: September 16, 2015,] [added: April 20, 2016,] to the Amended and Restated Indenture, dated as of December 1, 1995, between Lowe’s Companies, Inc. and U.S. Bank National Association, as [removed: successor] trustee, including as exhibits thereto a form of Lowe’s Companies, Inc.’s Floating Rate Notes maturing in [removed: September 2018,] [added: April 2019,] a form of Lowe’s Companies, Inc.’s [removed: 3.375%] [added: 1.15%] Notes maturing in [removed: September 2025] [added: April 2019, a form of Lowe’s Companies, Inc.’s 2.50% Notes maturing in April 2026] and a form of Lowe’s Companies, Inc.’s [removed: 4.375%] [added: 3.70%] Notes maturing in [removed: September 2045.](http://www.sec.gov/Archives/edgar/data/60667/000006066715000140/exhibit41.htm)] [added: April 2046.](http://www.sec.gov/Archives/edgar/data/60667/000119312516548349/d95539dex41.htm)] | | | | | | 8-K | | | | | | 001-07898 | | | | | | 4.1 | | | | | | [removed: September 16, 2015] [added: April 20, 2016] | | |

| 4.15 | | | | | | [removed: [Thirteenth] [added: [Fourteenth] Supplemental Indenture, dated as of [removed: April 20, 2016, to the Amended and Restated Indenture, dated as of December 1, 1995,] [added: May 3, 2017,] between Lowe’s Companies, Inc. and U.S. Bank National Association, as [added: successor] trustee, including as exhibits thereto a form of [removed: Lowe’s Companies, Inc.’s Floating Rate Notes maturing in April 2019, a form of Lowe’s Companies, Inc.’s 1.15% Notes maturing in April 2019, a form of Lowe’s Companies, Inc.’s 2.50%] [added: 3.100%] Notes [removed: maturing in April 2026] [added: due May 3, 2027] and a form of [removed: Lowe’s Companies, Inc.’s 3.70%] [added: 4.050%] Notes [removed: maturing in April 2046.](http://www.sec.gov/Archives/edgar/data/60667/000119312516548349/d95539dex41.htm)] [added: due May 3, 2047.](http://www.sec.gov/Archives/edgar/data/60667/000119312517156435/d377953dex41.htm)] | | | | | | 8-K | | | | | | 001-07898 | | | | | | 4.1 | | | | | | [removed: April 20, 2016] [added: May 3, 2017] | | |

| 4.16 | | | | | | [removed: [Fourteenth] [added: [Fifteenth] Supplemental Indenture, dated as of [removed: May 3, 2017,] [added: April 5, 2019,] between Lowe’s Companies, Inc. and U.S. Bank National [removed: Association, as] [added: Association (as] successor [removed: trustee,] [added: trustee),] including as exhibits thereto a form of [removed: 3.100%] [added: 3.650%] Notes due [removed: May 3, 2027] [added: April 5, 2029] and a form of [removed: 4.050%] [added: 4.550%] Notes due [removed: May 3, 2047.](http://www.sec.gov/Archives/edgar/data/60667/000119312517156435/d377953dex41.htm)] [added: April 5, 2049.](https://www.sec.gov/Archives/edgar/data/60667/000119312519099210/d715155dex42.htm)] | | | | | | 8-K | | | | | | 001-07898 | | | | | | [removed: 4.1] [added: 4.2] | | | | | | [removed: May 3, 2017] [added: April 5, 2019] | | |

| 4.17 | | | | | | [removed: [Fifteenth] [added: [Sixteenth] Supplemental Indenture, dated as of [removed: April 5, 2019,] [added: March 26, 2020,] between Lowe’s Companies, Inc. and U.S. Bank National Association (as successor trustee), including as exhibits thereto a form of [removed: 3.650%] [added: 4.000%] Notes due April [removed: 5, 2029] [added: 15, 2025, a form of 4.500% Notes due April 15, 2030, a form of 5.000% Notes due April 15, 2040] and a form of [removed: 4.550%] [added: 5.125%] Notes due April [removed: 5, 2049.](https://www.sec.gov/Archives/edgar/data/60667/000119312519099210/d715155dex42.htm)] [added: 15, 2050.](https://www.sec.gov/Archives/edgar/data/60667/000119312520087325/d865515dex42.htm)] | | | | | | 8-K | | | | | | 001-07898 | | | | | | 4.2 | | | | | | [removed: April 5, 2019] [added: March 27, 2020] | | |

| 4.18 | | | | | | [removed: [Sixteenth] [added: [Seventeenth] Supplemental Indenture, dated as of [removed: March 26,] [added: October 22,] 2020, between Lowe’s Companies, Inc. and U.S. Bank National Association (as successor trustee), including as exhibits thereto a form of [removed: 4.000% Notes due April 15, 2025, a form of 4.500%] [added: 1.300%] Notes due April 15, [removed: 2030,] [added: 2028,] a form of [removed: 5.000%] [added: 1.700%] Notes due [removed: April] [added: October] 15, [removed: 2040] [added: 2030] and a form of [removed: 5.125%] [added: 3.000%] Notes due [removed: April] [added: October] 15, [removed: 2050.](https://www.sec.gov/Archives/edgar/data/60667/000119312520087325/d865515dex42.htm)] [added: 2050.](https://www.sec.gov/Archives/edgar/data/60667/000119312520274389/d78175dex42.htm)] | | | | | | 8-K | | | | | | 001-07898 | | | | | | 4.2 | | | | | | [removed: March 27,] [added: October 22,] 2020 | | |

| 4.19 | | | | | | [removed: [Seventeenth] [added: [Eighteenth] Supplemental Indenture, dated as of [removed: October 22, 2020,] [added: March 31, 2021,] between Lowe’s Companies, Inc. and U.S. Bank National Association (as successor trustee), including as exhibits thereto a form of [removed: 1.300%] [added: 2.625%] Notes due April [removed: 15, 2028, a form of 1.700% Notes due October 15, 2030] [added: 1, 2031] and a form of [removed: 3.000%] [added: 3.500%] Notes due [removed: October 15, 2050.](https://www.sec.gov/Archives/edgar/data/60667/000119312520274389/d78175dex42.htm)] [added: April 1, 2051.](https://www.sec.gov/Archives/edgar/data/0000060667/000119312521102493/d159345dex42.htm)] | | | | | | 8-K | | | | | | 001-07898 | | | | | | 4.2 | | | | | | [removed: October 22, 2020] [added: March 31, 2021] | | |

| [removed: 4.20] [added: 4.21] | | | | | | [removed: [Second Amended and Restated Credit] [added: [Credit] Agreement, dated as of [removed: September 10, 2018,] [added: March 23, 2020,] by and among Lowe’s Companies, Inc., Bank of America, N.A., as administrative [removed: agent] [added: agent, swing-line lender,] and a letter of credit issuer, U.S. Bank National Association, as syndication agent and a letter of credit issuer, Citibank, N.A., Goldman Sachs Bank USA, JPMorgan Chase Bank, [removed: N.A.] [added: N.A.,] and Wells Fargo Bank, National Association, as co-documentation agents, and the other lenders party [removed: thereto.](http://www.sec.gov/Archives/edgar/data/60667/000119312518271834/d620916dex101.htm)] [added: thereto.](https://www.sec.gov/Archives/edgar/data/60667/000006066720000038/exhibit10103232020.htm)] | | | | | | 8-K | | | | | | 001-07898 | | | | | | 10.1 | | | | | | [removed: September 12, 2018] [added: March 24, 2020] | | |