Lowe's 2012 Annual Report Download - page 36

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22
Cash Requirements
Capital expenditures
Our fiscal 2013 capital budget is approximately $1.25 billion, inclusive of approximately $50 million of lease
commitments, resulting in a planned net cash outflow of $1.2 billion. Approximately 40% of the planned net cash outflow
is for investments to enhance the customer experience, including enhancements in information technology. Investments in
our existing stores are expected to account for approximately 35% of net cash outflow including investments in store
equipment, resets and remerchandising. Our expansion plans for 2013 consist of approximately 10 new stores, all of which
are expected to be owned, and which will account for approximately 15% of the planned net cash outflow. Approximately
30% of these new stores are expected to be on leased land. Other planned capital expenditures, accounting for 10% of
planned net cash outflow, are for investments in our distribution network, including one additional regional distribution
center.
Debt and capital
In April 2012, we issued $2.0 billion of unsecured notes in three tranches: $500 million of 1.625% notes maturing in April
2017, $750 million of 3.12% notes maturing in April 2022 and $750 million of 4.65% notes maturing in April 2042. Net
proceeds from the 2017, 2022 and 2042 notes were approximately $498 million, $746 million, and $740 million,
respectively.
During 2012, $550 million of unsecured debt matured and was re-paid with cash from operations and investing activities.
Dividends declared during fiscal 2012 totaled $708 million. Our dividend payment dates are established such that
dividends are paid in the quarter immediately following the quarter in which they are declared. The dividend declared in
the fourth quarter of 2012 was paid in fiscal 2013 and totaled $178 million.
We have an ongoing share repurchase program that is executed through purchases made from time to time in the open
market or through private off-market transactions. Shares purchased under the share repurchase program are returned to
authorized and unissued status. On February 1, 2013, the Company’s Board of Directors authorized an additional $5.0
billion of share repurchases with no expiration, simultaneously terminating the remaining previous balance of $150 million
under the prior authorization. This share repurchase authorization is expected to be used by the end of fiscal 2014.
Our ratio of debt to equity plus debt was 39.6% and 31.6% as of February 1, 2013, and February 3, 2012, respectively.
OFF-BALANCE SHEET ARRANGEMENTS
Other than in connection with executing operating leases, we do not have any off-balance sheet financing that has, or is
reasonably likely to have, a material, current or future effect on our financial condition, cash flows, results of operations,
liquidity, capital expenditures or capital resources.
CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS
The following table summarizes our significant contractual obligations at February 1, 2013:
Payments Due by Period
Contractual Obligations
(In millions) Total
Less Than
1 Year
1-3
Years
4-5
Years
After 5
Years
Long-term debt (principal amounts, ........
excluding discount) .................................. $ 8,702 $ 2 $ 510 $ 1,778 $ 6,412
Long-term debt (interest payments) ......... 6,806 414 828 729 4,835
Capitalized lease obligations 1 ................. 708 79 144 102 383
Operating leases 1 .................................... 5,520 420 821 801 3,478
Purchase obligations 2 .............................. 945 477 449 19 -
Total contractual obligations ................... $ 22,681 $ 1,392 $ 2,752 $ 3,429 $ 15,108