Lowe's 2000 Annual Report Download

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Expanding Our Vision
lowe’s annual report 2000

Table of contents

  • Page 1
    Expanding Our Vision lowe's annual report 2000

  • Page 2
    ...Our stock is listed on the New York Stock Exchange, the Pacific Stock Exchange and the London Stock Exchange with shares trading under the ticker symbol LOW. Expanding Into New Markets Pursuing our tack of carefully planned growth, Lowe's opened 100 new stores during 2000. lowe's stores new stores...

  • Page 3
    ... real estate expansion positions new Lowe's stores in markets where we are enthusiastically welcomed. Expansion plans in 2001 call for 115 to 120 new stores to open, representing a square footage growth of eighteen to twenty percent. Similarly, by constantly reviewing and refining our product...

  • Page 4
    ... costs related to the merger with Eagle Hardware & Garden, Inc. on April 2, 1999. Sales Growth in billions of dollars 20 Earnings Growth in millions of dollars 800 15 600 10 400 5 200 '94 '95 '96 '97 '98 '99 '00 0 0 '94 '95 '96 '97 '98 '99 '00 fiscal year fiscal year Lowe's Companies...

  • Page 5
    ...Pursuing our tack of homes, and X'ers buy and carefully planned growth, move into their first homes robert l. tillman chairman of the board, president Lowe's opened 100 new and prepare for the family to and chief executive officer stores during 2000. We follow. Even more promisincreased our presence...

  • Page 6
    ... distribution, Management Information Systems and the internet reduces costs in the inventory supply chain. Enhancing our existing logistics network of highly automated distribution facilities, we broke ground last year on two new regional distribution centers in Perris, CA, and Findlay, OH. Opening...

  • Page 7
    ... benefits package in retail. Lowe's "Buy, Own, Save" program is a threefold plan that helps our employees plan for the future. Nearly seven percent of Lowe's stock is owned through our Employee Stock Ownership Plan (ESOP). As an ESOP company, all associates with more than one year of service receive...

  • Page 8
    A Work In Progress At Lowe's, innovative, informative and even inspirational displays help to expand the homeowner's vision in the continuous evolution from "house" to "home." Lowe's Companies, Inc. 6

  • Page 9
    ...our stores nationwide, via telephone, fax, or online at the new and improved lowes.com site. These multiple points of contact give our retail and commercial customers the flexibility to browse and buy at their convenience, making Lowe's their preferred home improvement source. Lowe's Companies, Inc...

  • Page 10
    ... growth and evolution over the past decade, Lowe's has ensured that we always keep the customer in the picture. From the refinement of our concept to the placement of our stores, focus on our customers has guided our decade-long transformation, and will remain the focal point in the years to come.

  • Page 11
    ... nation's top markets. But Lowe's stores aren't just growing in number. They're growing in strength. We're constantly studying the market, anticipating trends, and sharpening our concept to make our stores as consumer-friendly as possible. We've empowered our store employees - those closest to the...

  • Page 12
    ... set like no other, Lowe's employees are there to help. Special Order Sales Everyone has thoughts on what will make their home special. In addition to our extensive in-store offering, Lowe's offers hundreds of thousands of additional custom and high-end products through our Special Order program...

  • Page 13
    ... job. Installed Sales With hectic schedules and a desire to spend more time enjoying other activities, many Do-It-Yourselfers have evolved into Buy-It-Yourselfers. Lowe's has expanded its offering of installation services to over twenty product categories to meet the needs of this growing customer...

  • Page 14

  • Page 15
    ...keep products in stock at our stores. This equates to better customer service and increased sales potential, while minimizing Lowe's distribution costs and inventory investment. Our information systems are integrated with our inventory management processes, our distribution centers, and the internet...

  • Page 16
    .... As the world's second-largest home improvement chain, Lowe's is a major source of lumber and other wood products - and we want to do our part to protect threatened forests around the world. That's why in 2000, we announced an environmental policy with Lowe's provides financial support to national...

  • Page 17
    ... security and to link individual success to the success of the company. At Lowe's our most valuable asset is our people. Customer service begins with them. We value the role each employee plays in our success, and we reward them with competitive pay, great benefits and the opportunity to grow...

  • Page 18
    ... identifying and leveraging new opportunities and focusing on geographic expansion. By seizing these crucial opportunities as they present themselves, Lowe's continues to build on our previous successes for the good of our shareholders, employees, customers and the communities in which we operate.

  • Page 19
    ... Information Independent Auditors' Report / 17 Management's Responsibility for Financial Reporting / 18 Management's Discussion and Analysis / 19 Consolidated Statements of Earnings / 22 Consolidated Balance Sheets / 23 Consolidated Statements of Shareholders' Equity / 24 Consolidated Statements...

  • Page 20
    ...competitive pricing strategy and provide the products that customers want depends on our vendors providing a reliable supply of inventory at competitive prices. * On a short-term basis, weather may impact sales of product groups like lawn and garden, lumber, and building materials. Lowe's Companies...

  • Page 21
    ...Company experienced its strongest sales increases in appliances, flooring, and cabinets. The following table presents sales and store information: 2000 1999 1998 Sales (in millions) Sales Increases Comparable Store Sales Increases At end of year: Stores Sales Floor Square Feet (in millions) Average...

  • Page 22
    ... in accounts payable, from year to year. Working capital at February 2, 2001 was $1.2 billion compared to $1.3 billion at January 28, 2000. The primary component of net cash used in investing activities continues to be new store facilities in connection with the Company's expansion plan. Cash...

  • Page 23
    ... at February 2, 2001. The Company's 2001 capital budget is currently at $2.7 billion, inclusive of approximately $286 million of operating or capital leases. Approximately 89% of this planned commitment is for store expansion and new distribution centers. Expansion plans for 2001 consist of...

  • Page 24
    Lowe's Companies, Inc. Consolidated Statements of Earnings (In Thousands, Except Per Share Data) Years Ended on February 2, 2001 % Sales January 28, 2000 % Sales January 29, 1999 % Sales Net Sales Cost of Sales Gross Margin Expenses: Selling, General and Administrative Store Opening Costs ...

  • Page 25
    Lowe's Companies, Inc. Consolidated Balance Sheets (In Thousands) February 2, 2001 % Total January 28, 2000 % Total Assets Current Assets: Cash and Cash Equivalents Short-Term Investments (Note 3) Accounts Receivable - Net (Notes 1 and 5) Merchandise Inventory (Note 1) Deferred Income Taxes (Note ...

  • Page 26
    Lowe's Companies, Inc. Consolidated Statements of Shareholders' Equity Capital in Excess of Par Value Unearned Compensation Restricted Stock Awards Accumulated Other Comprehensive Income (Loss) Total Shareholders' Equity (In Thousands) Common Stock Shares Amount Retained Earnings Balance January...

  • Page 27
    ... Deferred Income Taxes Loss on Disposition/Writedown of Fixed and Other Assets Tax Effect of Stock Options Exercised Changes in Operating Assets and Liabilities: Accounts Receivable - Net Merchandise Inventory Other Operating Assets Accounts Payable Employee Retirement Plans Other Operating...

  • Page 28
    ..., 2000. Sales generated through the Company's private label credit cards are not reflected in receivables. Under an agreement with Monogram Credit Card Bank of Georgia (the Bank), a wholly owned subsidiary of General Electric Capital Corporation, consumer credit is extended directly to customers by...

  • Page 29
    ...balance sheet at the enacted tax rates expected to be in effect when the differences reverse. Store Pre-opening Costs Costs of opening new retail stores are charged to operations as incurred. Impairment / Store Closing Costs Losses related to impairment of long-lived assets and for long-lived assets...

  • Page 30
    ... depreciable lives, in years, of the Company's property are: buildings, 20 to 40; store, distribution and office equipment, 3 to 10; leasehold improvements, generally the life of the related lease. Net property includes $454.4 and $478.6 million in assets under capital leases at February 2, 2001...

  • Page 31
    ...-for-sale securities, are reflected in the financial statements at fair value. Estimated fair values for long-term debt have been determined using available market information and 7 Financial Instruments Basic Earnings per Share: Net Earnings $ 809,871 Weighted Average Shares Outstanding 382...

  • Page 32
    ... under the 1994 and 1997 plans, respectively. 9 Shareholders' Equity Stock option information related to the 1994 and 1997 Incentive Plans is summarized as follows: Key Employee Stock Option Plans Shares (In Thousands) Weighted-Average Exercise Price Per Share Outstanding at January 30, 1998...

  • Page 33
    ... 437,224 shares of common stock pursuant to this Plan during 2000. No compensation expense has been recorded in the accompanying consolidated statement of earnings related to this Plan as the Plan qualifies as non-compensatory. The Company applies the intrinsic value method of accounting for its...

  • Page 34
    ...Company's option, based on the fair market value at that time. The future minimum rental payments required under capital and operating leases having initial or remaining noncancelable lease terms in excess of one year are summarized as follows: (In Thousands) Operating Leases Fiscal Year Real Estate...

  • Page 35
    ...$ Sales by Product Category: (Dollars in Millions) Product Category 2000 Total Sales % 1999 Total Sales % 1998 Total Sales % Appliances Lumber/Plywood Outdoor Fashion Nursery Millwork Building Materials Cabinets/Furniture/ Shelving Fashion Electrical Tools Hardware Fashion Plumbing Flooring Paint...

  • Page 36
    Lowe's Companies, Inc. Quarterly Review of Performance (Unaudited) Earnings Statements (In Thousands, Except Per Share Data) Quarter Ended 2/2/01 10/27/00 7/28/00 Fiscal 2000 4/28/00 1/28/00 10/29/99 7/30/99 Fiscal 1999 4/30/99 Net Sales Gross Margin Expenses: S,G & A Store Opening Costs ...

  • Page 37
    ...33.88 24.94 $ 34.44 $ 0.028 0.030 0.030 $ 0.030 * Adjusted for 2-for-1 stock split to shareholders of record on June 12, 1998, as applicable. Monthly Stock Price and Trading Volume Fiscal 2000 Shares Traded Fiscal 1999 Shares Traded High Low High Low February March April May June July August...

  • Page 38
    .../3% Dividend * A 2-for-1 stock split, effective April 4, 1994. * A 2-for-1 stock split, effective June 29, 1998. 12 shares 1976: 50% Dividend 18 shares 1981: 3-for-2 30 shares 1983: 5-for-3 60 shares 1992: 100% Dividend 120 shares 1994: 2-for-1 240 shares 1998: 2-for-1 Lowe's Companies, Inc...

  • Page 39
    ...) (In Thousands, Except Per Share Data) 2000 1999 1998 1997 1996 Selected Statements of Earnings Data: Net Sales Gross Margin Net Earnings Basic Earnings Per Share Diluted Earnings Per Share Dividends Per Share Selected Balance Sheet Data: Total Assets Long-Term Debt, Excluding Current Maturities...

  • Page 40
    ... 31, 1997 Fiscal Years Ended On Stores and People 1 Number of Stores 2 Square Footage 3 Number of Employees 4 Customer Transactions (In Thousands) 5 Average Purchase Comparative Income Statements (In Thousands) 6 Sales 7 Depreciation 8 Store Restructuring 9 Operating Income (EBITDA) 1 10 Pre...

  • Page 41
    ... divided by Sales. 4 Return on Assets: Net Earnings divided by Beginning Assets. 5 Return on Shareholders' Equity: Net Earnings divided by Beginning Equity. 6 Stock Price Source: The W all Street Journal NM = not meaningful CGR = compound growth rate $ $ $ $ $ Lowe's Companies, Inc. 39

  • Page 42
    ... Vice President, Strategy and Marketing, PCNA, Pepsi-Cola Company, Purchase, NY 1,4 Chief Operating Officer and President, Pharmaceutical Operations, GlaxoSmithKline, Research Triangle Park, NC 2,4 Chairman and Chief Executive Officer Elect, Bank of America, Charlotte, NC 1,4 Committee Membership...

  • Page 43
    ... Agent and Dividend Reinvesting Agent EquiServe Trust Company N.A. P . O. Box 8218 Boston, MA 02266-8218 877-282-1174 Lowe's Common Stock ticker symbol: LOW listed: New Y ork Stock Exchange 20 Broad Street New Y ork, NY 10005 Pacific Stock Exchange 301 Pine Street San Francisco, CA 94104 London...

  • Page 44
    Lowe's Companies, Inc. 1605 Curtis Bridge Road Wilkesboro, North Carolina 28697 www.lowes.com LOWCM-AR-01