Lowe's 2012 Annual Report Download - page 61

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The discounts associated with these issuances are included in long-term debt and are being amortized over the respective
terms of the notes.
The indentures governing the notes issued in 2012, 2011 and 2010 contain a provision that allows the Company to redeem
the notes at any time, in whole or in part, at specified redemption prices plus accrued interest to the date of redemption. The
indentures also contain 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 to the date of purchase. The indentures governing the notes do not limit the aggregate principal amount
of debt securities that the Company may issue, nor is the Company required to maintain financial ratios or specified levels
of net worth or liquidity. However, the indentures contain various restrictive covenants, none of which is expected to
impact the Company’s liquidity or capital resources.
NOTE 8: Shareholders’ Equity
Authorized shares of preferred stock were 5.0 million ($5 par value) at February 1, 2013 and February 3, 2012, none of
which have been issued. The Board of Directors may issue the preferred stock (without action by shareholders) in one or
more series, having such voting rights, dividend and liquidation preferences, and such conversion and other rights as may
be designated by the Board of Directors at the time of issuance.
Authorized shares of common stock were 5.6 billion ($.50 par value) at February 1, 2013 and February 3, 2012.
The Company has a share repurchase program that is executed through purchases made from time to time either in the open
market or through private off-market transactions. Shares purchased under the repurchase program are retired and returned
to authorized and unissued status. On August 19, 2011, the Company’s Board of Directors authorized a $5.0 billion share
repurchase program with no expiration. On February 1, 2013, the Company’s Board of Directors authorized an additional
$5.0 billion of share repurchases with no expiration. The remaining prior authorization of $150 million was simultaneously
terminated.
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 restricted stock awards.
Shares repurchased for 2012 and 2011 were as follows:
2012 2011
(In millions) Shares Cost1 Shares Cost1
Share repurchase program ........................................ 145.7 $ 4,350 118.3 $ 2,900
Shares withheld from employees .............................. 1.5 43 1.5 39
Total share repurchases ......................................... 147.2 $ 4,393 119.8 $ 2,939
1 Reductions of $3.9 billion and $2.7 billion were recorded to retained earnings, after capital in excess of par value was
depleted, for 2012 and 2011, respectively.
NOTE 9: Accounting for Share-Based Payment
Overview of Share-Based Payment Plans
The Company has equity incentive plans (the Incentive Plans) under which the Company may grant share-based awards to
key employees and non-employee directors. The Company also has an employee stock purchase plan (the ESPP) that
allows employees to purchase Company shares at a discount through payroll deductions. These plans contain a
nondiscretionary anti-dilution provision that is designed to equalize the value of an award as a result of an equity
restructuring.
Share-based awards were authorized under the Incentive Plans for grant to key employees and non-employee directors for
up to 169.0 million shares of common stock. In addition, up to 70.0 million shares were authorized under the ESPP.
At February 1, 2013, there were 14.2 million shares remaining available for grant under the Incentive Plans and 29.2
million shares available under the ESPP.