Item 1. Financial Statements

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Item 1. Financial Statements

Lowe’s Companies, Inc.

Consolidated Statements of Earnings (Unaudited)

In Millions, Except Per Share and Percentage Data


	Three Months Ended								Six Months Ended
	July 29, 2022				July 30, 2021				July 29, 2022				July 30, 2021
Current Earnings	Amount		% Sales		Amount		% Sales		Amount		% Sales		Amount		% Sales
Net sales	$	27,476	100.00	%	$	27,570	100.00	%	$	51,135	100.00	%	$	51,993	100.00	%
Cost of sales	18,343		66.76		18,258		66.22		33,952		66.40		34,551		66.45
Gross margin	9,133		33.24		9,312		33.78		17,183		33.60		17,442		33.55
Expenses:
Selling, general and administrative	4,455		16.22		4,693		17.02		8,758		17.12		9,187		17.67
Depreciation and amortization	449		1.63		409		1.49		894		1.75		800		1.54
Operating income	4,229		15.39		4,210		15.27		7,531		14.73		7,455		14.34
Interest – net	264		0.96		216		0.78		507		0.99		427		0.82

Pre-tax earnings	3,965		14.43		3,994		14.49		7,024		13.74		7,028		13.52
Income tax provision	973		3.54		976		3.54		1,699		3.33		1,688		3.25
Net earnings	$	2,992	10.89	%	$	3,018	10.95	%	$	5,325	10.41	%	$	5,340	10.27	%


Weighted average common shares outstanding – basic	638				705				649				711
Basic earnings per common share	$	4.68			$	4.27			$	8.18			$	7.48
Weighted average common shares outstanding – diluted	639				707				651				713
Diluted earnings per common share	$	4.67			$	4.25			$	8.16			$	7.46

See accompanying notes to the consolidated financial statements (unaudited).

Lowe’s Companies, Inc.

Consolidated Statements of Comprehensive Income (Unaudited)

In Millions, Except Percentage Data


	Three Months Ended								Six Months Ended
	July 29, 2022				July 30, 2021				July 29, 2022				July 30, 2021
	Amount		% Sales		Amount		% Sales		Amount		% Sales		Amount		% Sales
Net earnings	$	2,992	10.89	%	$	3,018	10.95	%	$	5,325	10.41	%	$	5,340	10.27	%
Foreign currency translation adjustments – net of tax	12		0.05		(44)		(0.17)		(5)		(0.02)		58		0.11
Cash flow hedges – net of tax	(38)		(0.14)		(9)		(0.03)		181		0.36		15		0.03
Other	(1)		—		(1)		—		(3)		0.01		(2)		—
Other comprehensive (loss)/income	(27)		(0.09)		(54)		(0.20)		173		0.35		71		0.14
Comprehensive income	$	2,965	10.80	%	$	2,964	10.75	%	$	5,498	10.76	%	$	5,411	10.41	%

See accompanying notes to the consolidated financial statements (unaudited).


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Lowe’s Companies, Inc.

Consolidated Balance Sheets (Unaudited)

In Millions, Except Par Value Data


	July 29, 2022		July 30, 2021		January 28, 2022
Assets
Current assets:
Cash and cash equivalents	$	1,482	$	4,835	$	1,133
Short-term investments	450		1,420		271
Merchandise inventory – net	19,329		17,322		17,605
Other current assets	1,406		1,506		1,051
Total current assets	22,667		25,083		20,060
Property, less accumulated depreciation	18,713		19,031		19,071
Operating lease right-of-use assets	4,158		3,820		4,108
Long-term investments	56		225		199
Deferred income taxes – net	104		221		164
Other assets	1,027		1,024		1,038
Total assets	$	46,725	$	49,404	$	44,640

Liabilities and shareholders' deficit
Current liabilities:
Short-term borrowings	$	—	$	1,000	$	—
Current maturities of long-term debt	121		1,344		868
Current operating lease liabilities	652		557		636
Accounts payable	12,631		12,011		11,354
Accrued compensation and employee benefits	1,227		1,331		1,561
Deferred revenue	1,968		2,041		1,914
Other current liabilities	3,767		3,380		3,335
Total current liabilities	20,366		21,664		19,668
Long-term debt, excluding current maturities	28,763		21,967		23,859
Noncurrent operating lease liabilities	4,069		3,841		4,021
Deferred revenue – Lowe's protection plans	1,169		1,097		1,127
Other liabilities	800		1,010		781
Total liabilities	55,167		49,579		49,456

Shareholders' deficit:
Preferred stock, $5 par value: Authorized – 5.0 million shares; Issued and outstanding – none	—		—		—
Common stock, $0.50 par value: Authorized – 5.6 billion shares; Issued and outstanding – 631 million, 699 million, and 670 million shares, respectively	316		350		335
Capital in excess of par value	—		—		—
Accumulated deficit	(8,895)		(460)		(5,115)
Accumulated other comprehensive income/(loss)	137		(65)		(36)
Total shareholders' deficit	(8,442)		(175)		(4,816)
Total liabilities and shareholders' deficit	$	46,725	$	49,404	$	44,640

See accompanying notes to the consolidated financial statements (unaudited).


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Lowe’s Companies, Inc.

Consolidated Statements of Shareholders’ Deficit (Unaudited)

In Millions


	Three Months Ended July 29, 2022
	Common Stock			Capital in Excess of Par Value		Accumulated Deficit		Accumulated Other Comprehensive Income		Total
	Shares	Amount
Balance April 29, 2022	652	$	326	$	—	$	(7,367)	$	164	$	(6,877)

Net earnings	—	—		—		2,992		—		2,992
Other comprehensive loss	—	—		—		—		(27)		(27)
Cash dividends declared, $1.05 per share	—	—		—		(666)		—		(666)
Share-based payment expense	—	—		65		—		—		65
Repurchases of common stock	(22)	(11)		(137)		(3,854)		—		(4,002)
Issuance of common stock under share-based payment plans	1	1		72		—		—		73
Balance July 29, 2022	631	$	316	$	—	$	(8,895)	$	137	$	(8,442)

	Six Months Ended July 29, 2022
	Common Stock			Capital in Excess of Par Value		Accumulated Deficit		Accumulated Other Comprehensive (Loss)/Income		Total
	Shares	Amount
Balance January 28, 2022	670	$	335	$	—	$	(5,115)	$	(36)	$	(4,816)

Net earnings	—	—		—		5,325		—		5,325
Other comprehensive income	—	—		—		—		173		173
Cash dividends declared, $1.85 per share	—	—		—		(1,190)		—		(1,190)
Share-based payment expense	—	—		110		—		—		110
Repurchases of common stock	(41)	(20)		(183)		(7,915)		—		(8,118)
Issuance of common stock under share-based payment plans	2	1		73		—		—		74
Balance July 29, 2022	631	$	316	$	—	$	(8,895)	$	137	$	(8,442)


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	Three Months Ended July 30, 2021
	Common Stock			Capital in Excess of Par Value		Retained Earnings/(Accumulated Deficit)		Accumulated Other Comprehensive Loss		Total
	Shares	Amount
Balance April 30, 2021	715	$	358	$	—	$	98	$	(11)	$	445
Net earnings	—	—		—		3,018		—		3,018
Other comprehensive loss	—	—		—		—		(54)		(54)
Cash dividends declared, $0.80 per share	—	—		—		(563)		—		(563)
Share-based payment expense	—	—		63		—		—		63
Repurchases of common stock	(16)	(8)		(117)		(3,013)		—		(3,138)
Issuance of common stock under share-based payment plans	—	—		54		—		—		54
Balance July 30, 2021	699	$	350	$	—	$	(460)	$	(65)	$	(175)

	Six Months Ended July 30, 2021
	Common Stock			Capital in Excess of Par Value		Retained Earnings/(Accumulated Deficit)		Accumulated Other Comprehensive Loss		Total
	Shares	Amount
Balance January 29, 2021	731	$	366	$	90	$	1,117	$	(136)	$	1,437

Net earnings	—	—		—		5,340		—		5,340
Other comprehensive income	—	—		—		—		71		71
Cash dividends declared, $1.40 per share	—	—		—		(993)		—		(993)
Share-based payment expense	—	—		113		—		—		113
Repurchase of common stock	(33)	(17)		(265)		(5,924)		—		(6,206)
Issuance of common stock under share-based payment plans	1	1		62		—		—		63
Balance July 30, 2021	699	$	350	$	—	$	(460)	$	(65)	$	(175)

See accompanying notes to the consolidated financial statements (unaudited).


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Lowe’s Companies, Inc.

Consolidated Statements of Cash Flows (Unaudited)

In Millions


	Six Months Ended
	July 29, 2022		July 30, 2021
Cash flows from operating activities:
Net earnings	$	5,325	$	5,340
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization	1,007		907
Noncash lease expense	273		252
Deferred income taxes	—		110
Loss on property and other assets – net	32		1

Share-based payment expense	110		115
Changes in operating assets and liabilities:
Merchandise inventory – net	(1,728)		(1,096)
Other operating assets	(120)		(203)
Accounts payable	1,279		1,115
Deferred revenue	97		511
Other operating liabilities	(263)		(139)
Net cash provided by operating activities	6,012		6,913

Cash flows from investing activities:
Purchases of investments	(330)		(1,635)
Proceeds from sale/maturity of investments	290		692
Capital expenditures	(687)		(846)
Proceeds from sale of property and other long-term assets	19		78

Other – net	(1)		(134)
Net cash used in investing activities	(709)		(1,845)

Cash flows from financing activities:

Net proceeds from issuance of debt	4,964		2,988
Repayment of debt	(799)		(568)
Proceeds from issuance of common stock under share-based payment plans	72		63
Cash dividend payments	(1,061)		(870)
Repurchases of common stock	(8,128)		(6,174)
Other – net	(2)		(366)
Net cash used in financing activities	(4,954)		(4,927)

Effect of exchange rate changes on cash	—		4

Net increase in cash and cash equivalents	349		145
Cash and cash equivalents, beginning of period	1,133		4,690
Cash and cash equivalents, end of period	$	1,482	$	4,835

See accompanying notes to the consolidated financial statements (unaudited).


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Lowe’s Companies, Inc.

Notes to Consolidated Financial Statements (Unaudited)

Note 1: Summary of Significant Accounting Policies

Basis of Presentation

The accompanying condensed consolidated financial statements (unaudited) and notes to the condensed consolidated financial statements (unaudited) are presented in accordance with the rules and regulations of the Securities and Exchange Commission and do not include all the disclosures normally required in annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). The condensed consolidated financial statements (unaudited), in the opinion of management, contain all normal recurring adjustments necessary to present fairly the consolidated balance sheets as of July 29, 2022, and July 30, 2021, and the statements of earnings, comprehensive income, and shareholders’ deficit for the three and six months ended July 29, 2022, and July 30, 2021, and cash flows for the six months ended July 29, 2022, and July 30, 2021. The January 28, 2022 consolidated balance sheet was derived from the audited financial statements.

These interim condensed consolidated financial statements (unaudited) should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Lowe’s Companies, Inc. (the Company) Annual Report on Form 10-K for the fiscal year ended January 28, 2022 (the Annual Report). The financial results for the interim periods may not be indicative of the financial results for the entire fiscal year.

Accounting Pronouncements Not Yet Adopted

Recent accounting pronouncements pending adoption not discussed in this Form 10-Q or in the 2021 Form 10-K are either not applicable to the Company or are not expected to have a material impact on the Company.

Note 2: Revenue

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

The following table presents the Company’s sources of revenue:


(In millions)	Three Months Ended						Six Months Ended
July 29, 2022			July 30, 2021			July 29, 2022			July 30, 2021
Products	$	26,477		$	26,365		$	49,360		$	49,887
Services	588			629			1,125			1,209
Other	411			576			650			897
Net sales	$	27,476		$	27,570		$	51,135		$	51,993

A provision for anticipated merchandise returns is provided through a reduction of sales and cost of sales in the period that the related sales are recorded. The merchandise return reserve is presented on a gross basis, with a separate asset and liability included in the consolidated balance sheets. The balances and classification within the consolidated balance sheets for anticipated sales returns and the associated right of return assets are as follows:


(In millions)	Classification	July 29, 2022		July 30, 2021		January 28, 2022
Anticipated sales returns	Other current liabilities	$	302	$	303	$	245
Right of return assets	Other current assets	183		194		151

Deferred revenue - retail and stored-value cards

Retail deferred revenue consists of amounts received for which customers have not yet taken possession of the merchandise or for which installation has not yet been completed. The majority of revenue for goods and services is recognized in the quarter following revenue deferral. Stored-value cards deferred revenue includes outstanding stored-value cards such as gift cards and


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returned merchandise credits that have not yet been redeemed. Deferred revenue for retail and stored-value cards are as follows:


(In millions)	July 29, 2022		July 30, 2021		January 28, 2022
Retail deferred revenue	$	1,397	$	1,538	$	1,285
Stored-value cards deferred revenue	571		503		629
Deferred revenue	$	1,968	$	2,041	$	1,914

Deferred revenue - Lowe’s protection plans

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


(In millions)			July 29, 2022						July 30, 2021						January 28, 2022
Deferred revenue - Lowe’s protection plans			$	1,169					$	1,097					$	1,127


	Three Months Ended				Six Months Ended
(In millions)	July 29, 2022		July 30, 2021		July 29, 2022		July 30, 2021
Lowe’s protection plans deferred revenue recognized into sales	$	129	$	120	$	256	$	237
Lowe’s protection plans claim expenses	48		44		93		97

Disaggregation of Revenues

The following table presents the Company’s net sales disaggregated by merchandise division:


	Three Months Ended								Six Months Ended
	July 29, 2022				July 30, 2021				July 29, 2022				July 30, 2021
(In millions)	Net Sales		%		Net Sales		%		Net Sales		%		Net Sales		%
Home Décor 1	$	9,073	33.0	%	$	9,159	33.2	%	$	17,372	34.0	%	$	17,466	33.6	%
Building Products 2	8,890		32.4		9,040		32.8		15,585		30.5		16,790		32.3
Hardlines 3	8,810		32.1		8,690		31.5		16,981		33.2		16,632		32.0
Other	703		2.5		681		2.5		1,197		2.3		1,105		2.1
Total	$	27,476	100.0	%	$	27,570	100.0	%	$	51,135	100.0	%	$	51,993	100.0	%

Note: Merchandise division net sales for the prior period have been reclassified to conform to the current period presentation.

1 Home Décor includes the following product categories: Appliances, Décor, Flooring, Kitchens & Bath, and Paint

2 Building Products includes the following product categories: Building Materials, Electrical, Lighting, Lumber, Millwork, and Rough Plumbing

3 Hardlines includes the following product categories: Hardware, Lawn & Garden, Seasonal & Outdoor Living, and Tools

The following table presents the Company’s net sales disaggregated by geographical area:


(In millions)	Three Months Ended						Six Months Ended
July 29, 2022			July 30, 2021			July 29, 2022			July 30, 2021
United States	$	25,817		$	25,655		$	48,243		$	48,587
Canada	1,659			1,915			2,892			3,406
Net Sales	$	27,476		$	27,570		$	51,135		$	51,993


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Note 3: Restricted Investments

Short-term and long-term investments include restricted balances pledged as collateral primarily for the Lowe’s protection plans program and are as follows:


(In millions)	July 29, 2022		July 30, 2021		January 28, 2022
Short-term restricted investments	$	450	$	520	$	271
Long-term restricted investments	56		225		199
Total restricted investments	$	506	$	745	$	470

Note 4: Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The authoritative guidance for fair value measurements establishes a three-level hierarchy, which encourages an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The three levels of the hierarchy are defined as follows:

Level 1 - inputs to the valuation techniques that are quoted prices in active markets for identical assets or liabilities
Level 2 - inputs to the valuation techniques that are other than quoted prices but are observable for the assets or liabilities, either directly or indirectly
Level 3 - inputs to the valuation techniques that are unobservable for the assets or liabilities

Assets and Liabilities that are Measured at Fair Value on a Recurring Basis

The following table presents the Company’s financial assets and liabilities measured at fair value on a recurring basis as of July 29, 2022, July 30, 2021, and January 28, 2022:


			Fair Value Measurements at
(In millions)	Classification	Measurement Level	July 29, 2022		July 30, 2021		January 28, 2022


Available-for-sale debt securities:
U.S. Treasury securities	Short-term investments	Level 1	$	214	$	139	$	75
Money market funds	Short-term investments	Level 1	119		131		120
Corporate debt securities	Short-term investments	Level 2	54		50		8
Commercial paper	Short-term investments	Level 2	35		117		30
Foreign government debt securities	Short-term investments	Level 2	14		10		14
Municipal obligations	Short-term investments	Level 2	10		—		10
Certificates of deposit	Short-term investments	Level 1	4		959		14
Agency securities	Short-term investments	Level 2	—		14		—
U.S. Treasury securities	Long-term investments	Level 1	31		148		132
Corporate debt securities	Long-term investments	Level 2	23		49		50
Municipal obligations	Long-term investments	Level 2	2		13		3

Foreign government debt securities	Long-term investments	Level 2	—		15		14


Derivative instruments:
Forward interest rate swaps	Other current assets	Level 2	$	216	$	—	$	66
Fixed-to-floating interest rate swaps	Other assets	Level 2	—		3		—
Forward interest rate swaps	Other assets	Level 2	—		2		48
Forward interest rate swaps	Other current liabilities	Level 2	—		3		—
Fixed-to-floating interest rate swaps	Other liabilities	Level 2	56		—		21

There were no transfers between Levels 1, 2, or 3 during any of the periods presented.


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When available, quoted prices were used to determine fair value. When quoted prices in active markets were available, investments were classified within Level 1 of the fair value hierarchy. When quoted prices in active markets were not available, fair values were determined using pricing models, and the inputs to those pricing models were based on observable market inputs. The inputs to the pricing models were typically benchmark yields, reported trades, broker-dealer quotes, issuer spreads, and benchmark securities, among others.

Assets and Liabilities that are Measured at Fair Value on a Nonrecurring Basis

During the three and six months ended July 29, 2022, and July 30, 2021, the Company had no material measurements of assets and liabilities at fair value on a nonrecurring basis subsequent to their initial recognition.

Other Fair Value Disclosures

The Company’s financial assets and liabilities not measured at fair value on a recurring basis include cash and cash equivalents, accounts receivable, short-term borrowings, accounts payable, and long-term debt and are reflected in the financial statements at cost. With the exception of long-term debt, cost approximates fair value for these items due to their short-term nature. As further described in Note 6, certain long-term debt is associated with a fair value hedge and the changes in fair value of the hedged debt is included in the carrying value of long-term debt on the consolidated balance sheets. The fair values of the Company’s unsecured notes were estimated using quoted market prices. The fair values of the Company’s mortgage notes were estimated using discounted cash flow analyses, based on the future cash outflows associated with these arrangements and discounted using the applicable incremental borrowing rate.

Carrying amounts and the related estimated fair value of the Company’s long-term debt, excluding finance lease obligations, are as follows:


	July 29, 2022				July 30, 2021				January 28, 2022
(In millions)	Carrying Amount		Fair Value		Carrying Amount		Fair Value		Carrying Amount		Fair Value
Unsecured notes (Level 1)	$	28,237	$	26,586	$	22,592	$	25,705	$	24,056	$	25,425
Mortgage notes (Level 2)	4		5		5		5		5		5
Long-term debt (excluding finance lease obligations)	$	28,241	$	26,591	$	22,597	$	25,710	$	24,061	$	25,430

Note 5: Debt

Commercial Paper Program

The Company’s commercial paper program is supported by the $2.0 billion five-year unsecured revolving credit agreement entered into in March 2020, and amended in December 2021, (2020 Credit Agreement) and the $2.0 billion five-year unsecured third amended and restated credit agreement (Third Amended and Restated Credit Agreement) entered into in December 2021. The amounts available to be drawn under the 2020 Credit Agreement and the Third Amended and Restated Credit Agreement are reduced by the amount of borrowings under the commercial paper program. As of July 29, 2022, July 30, 2021, and January 28, 2022, there were no outstanding borrowings under the Company’s commercial paper program, the 2020 Credit Agreement, or the Third Amended and Restated Credit Agreement. Total combined availability under the 2020 Credit Agreement and the Third Amended and Restated Credit Agreement was $4.0 billion as of July 29, 2022.

Other Short-Term Borrowings

In April 2021, the Company entered into a $1.0 billion unsecured 364-day term loan facility (2021 Term Loan), which was scheduled to mature in April 2022, but was repaid early in January 2022. There was $1.0 billion in outstanding borrowings under the 2021 Term Loan as of July 30, 2021, with an interest rate of 0.79%.


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Long-Term Debt

On March 24, 2022, the Company issued $5.0 billion of unsecured fixed rate notes (March 2022 Notes) as follows:


Principal Amount (in millions)		Maturity Date	Interest Rate	Discount (in millions)
$	750	April 2027	3.350%	$	3
$	1,500	April 2032	3.750%	$	7
$	1,500	April 2052	4.250%	$	14
$	1,250	April 2062	4.450%	$	12

Interest on the March 2022 Notes is payable semiannually in arrears in April and October of each year until maturity.

The indenture governing the March 2022 Notes contains a provision that allows the Company to redeem these notes at any time, in whole or in part, at specified redemption prices, plus accrued and unpaid interest, if any, up to, but excluding, the date of redemption. The indenture also contains a provision that allows the holders of the notes to require the Company to repurchase all or any part of their notes if a change of control triggering event occurs. If elected under the change of control provisions, the repurchase of the notes will occur at a purchase price of 101% of the principal amount, plus accrued and unpaid interest, if any, on such notes up to, but excluding, the date of purchase. The indenture governing the March 2022 Notes does not limit the aggregate principal amount of debt securities that the Company may issue and does not require the Company to maintain specified financial ratios or levels of net worth or liquidity.

Note 6: Derivative Instruments

The Company utilizes forward interest rate swap agreements to hedge its exposure to changes in benchmark interest rates on forecasted debt issuances. The Company also utilizes fixed-to-floating interest rate swap agreements as fair value hedges on certain debt. The notional amounts for the Company’s material derivative instruments are as follows:


(In millions)	July 29, 2022		July 30, 2021		January 28, 2022
Cash flow hedges:
Forward interest rate swap agreement notional amounts	$	2,065	$	1,975	$	2,560
Fair value hedges:
Fixed-to-floating interest rate swap agreement notional amounts	$	850	$	450	$	850

See Note 4 for the gross fair values of the Company’s outstanding derivative financial instruments and corresponding fair value classifications. The cash flows related to settlement of the Company’s hedging derivative financial instruments are classified in the consolidated statements of cash flows based on the nature of the underlying hedged items.

The Company accounts for the forward interest rate swap contracts as cash flow hedges, thus the effective portion of gains and losses resulting from changes in fair value are recognized in other comprehensive (loss)/income, net of tax effects, in the consolidated statements of comprehensive income and is amortized to interest expense over the term of the respective debt. In connection with the issuance of our March 2022 Notes, we settled forward interest rate swap contracts with a combined notional amount of $1.5 billion and received a payment of $143 million. The (loss)/gain from forward interest rate swap agreements, both settled and outstanding, designated as cash flow hedges recorded in other comprehensive (loss)/income and earnings for the three and six months ended July 29, 2022, and July 30, 2021, including its line item in the financial statements, is as follows:


(In millions)	Three Months Ended						Six Months Ended
July 29, 2022			July 30, 2021			July 29, 2022			July 30, 2021
Other comprehensive (loss)/income:
Cash flow hedges – net of tax benefit/(expense) of $12 million, $5 million, ($61) million, and ($4) million, respectively	$	(34)		$	(16)		$	184		$	12
Net earnings:
Interest – net	$	—		$	(3)		$	(1)		$	(5)


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The Company accounts for the fixed-to-floating interest rate swap agreements as fair value hedges using the shortcut method of accounting under which the hedges are assumed to be perfectly effective. Thus, the change in fair value of the derivative instruments offsets the change in fair value on the hedged debt, and there is no net impact in the consolidated statements of earnings from the fair value of the derivatives.

Note 7: Shareholders’ Deficit

The Company has a share repurchase program that is executed through purchases made from time to time either in the open market, which may be made under pre-set trading plans meeting the requirements of Rule 10b5-1(c) of the Securities Exchange Act of 1934, or through private off-market transactions. Shares purchased under the repurchase program are returned to authorized and unissued status. As of July 29, 2022, the Company had $11.7 billion remaining in its share repurchase program.

In February 2022, the Company entered into an Accelerated Share Repurchase (ASR) agreement with a third-party financial institution to repurchase $750 million of the Company’s common stock. In addition, in May 2022, the Company entered into an ASR agreement with a third-party financial institution to repurchase $1.8 billion of the Company’s common stock. The terms of the ASR agreements entered into during the six months ended July 29, 2022, are as follows (in millions):


Agreement Execution Date	Agreement Settlement Date	ASR Agreement Amount		Initial Shares Delivered at Inception	Additional Shares Delivered at Settlement	Total Shares Delivered
Q1 2022	Q1 2022	$	750	2.8	0.6	3.4
Q2 2022	Q2 2022	1,750		7.5	2.1	9.6

In addition, the Company repurchased shares of its common stock through the open market as follows:


	Three Months Ended			Six Months Ended
	July 29, 2022			July 29, 2022
(In millions)	Shares	Cost		Shares	Cost
Open market share repurchases	11.9	$	2,250	27.1	$	5,500

The Company also withholds shares from employees to satisfy either the exercise price of stock options exercised or the statutory withholding tax liability resulting from the vesting of share-based awards.

Total shares repurchased for the three and six months ended July 29, 2022, and July 30, 2021, were as follows:


	Three Months Ended
	July 29, 2022			July 30, 2021
(In millions)	Shares	Cost		Shares	Cost
Share repurchase program	21.5	$	4,000	16.4	$	3,132
Shares withheld from employees	0.1	2		—	7
Total share repurchases	21.6	$	4,002	16.4	$	3,139



	Six Months Ended
	July 29, 2022			July 30, 2021
(In millions)	Shares	Cost		Shares	Cost
Share repurchase program	40.1	$	8,000	32.8	$	6,132
Shares withheld from employees	0.6	119		0.4	74
Total share repurchases	40.7	$	8,119	33.2	$	6,206

Note 8: Earnings Per Share

The Company calculates basic and diluted earnings per common share using the two-class method. The following table reconciles earnings per common share for the three and six months ended July 29, 2022, and July 30, 2021:


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	Three Months Ended				Six Months Ended
(In millions, except per share data)	July 29, 2022		July 30, 2021		July 29, 2022		July 30, 2021
Basic earnings per common share:
Net earnings	$	2,992	$	3,018	$	5,325	$	5,340
Less: Net earnings allocable to participating securities	(9)		(11)		(17)		(22)
Net earnings allocable to common shares, basic	$	2,983	$	3,007	$	5,308	$	5,318
Weighted-average common shares outstanding	638		705		649		711
Basic earnings per common share	$	4.68	$	4.27	$	8.18	$	7.48
Diluted earnings per common share:
Net earnings	$	2,992	$	3,018	$	5,325	$	5,340
Less: Net earnings allocable to participating securities	(9)		(11)		(17)		(22)
Net earnings allocable to common shares, diluted	$	2,983	$	3,007	$	5,308	$	5,318
Weighted-average common shares outstanding	638		705		649		711
Dilutive effect of non-participating share-based awards	1		2		2		2
Weighted-average common shares, as adjusted	639		707		651		713
Diluted earnings per common share	$	4.67	$	4.25	$	8.16	$	7.46

Anti-dilutive securities excluded from diluted weighted-average common shares	1.3		0.3		0.5		0.3

Note 9: Supplemental Disclosure

Net interest expense is comprised of the following:


	Three Months Ended				Six Months Ended
(In millions)	July 29, 2022		July 30, 2021		July 29, 2022		July 30, 2021
Long-term debt	$	257	$	205	$	487	$	406
Lease obligations	7		8		14		15
Short-term borrowings	—		1		1		1

Interest income	(5)		(3)		(7)		(7)
Interest capitalized	(1)		(1)		(2)		(1)
Interest on tax uncertainties	—		(1)		3		(1)
Other	6		7		11		14
Interest – net	$	264	$	216	$	507	$	427

Supplemental disclosures of cash flow information:


	Six Months Ended
(In millions)	July 29, 2022		July 30, 2021
Cash paid for interest, net of amount capitalized	$	436	$	437
Cash paid for income taxes – net	1,415		1,546
Non-cash investing and financing activities:
Leased assets obtained in exchange for new finance lease liabilities	$	32	$	97
Leased assets obtained in exchange for new operating lease liabilities 1	328		224

Cash dividends declared but not paid	666		563

1 Excludes $734 million of leases signed but not yet commenced as of July 29, 2022.


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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of Lowe’s Companies, Inc.

Results of Review of Interim Financial Information

We have reviewed the accompanying consolidated balance sheets of Lowe’s Companies, Inc. and subsidiaries (the “Company”) as of July 29, 2022, and July 30, 2021, the related consolidated statements of earnings, comprehensive income, and shareholders’ deficit for the fiscal three-month and six-month periods ended July 29, 2022, and July 30, 2021, and cash flows for the fiscal six-month periods ended July 29, 2022, and July 30, 2021, and the related notes (collectively referred to as the “interim financial information”). Based on our reviews, we are not aware of any material modifications that should be made to the accompanying interim financial information for it to be in conformity with accounting principles generally accepted in the United States of America.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheet of the Company as of January 28, 2022, and the related consolidated statements of earnings, comprehensive income, shareholders’ deficit, and cash flows for the fiscal year then ended (not presented herein); and in our report dated March 21, 2022, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet as of January 28, 2022, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

Basis for Review Results

This interim financial information is the responsibility of the Company’s management. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our review in accordance with standards of the PCAOB. A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

/s/ DELOITTE & TOUCHE LLP

Charlotte, North Carolina

August 25, 2022


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