Lowe's 2013 Annual Report Download - page 49

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Cost of Sales
Selling, General and Administrative

Total cost of products sold, including:

Payroll and benefit costs for retail and corporate
-
Purchase costs, net of vendor funds;
employees;
-
Freight expenses associated with moving

Occupancy costs of retail and corporate facilities;
merchandise inventories from vendors to

Advertising;
retail stores;

Costs associated with delivery of products from
-
Costs associated with operating the
stores and distribution centers to customers;
Company's distribution network, including

Third-party, in-store service costs;
payroll and benefit costs and occupancy

Tender costs, including bank charges, costs
costs;
associated with credit card interchange fees and

Costs of installation services provided;
amounts associated with accepting the Company's

Costs associated with delivery of products directly
proprietary credit cards;
from vendors to customers by third parties;

Costs associated with self-insured plans, and

Costs associated with inventory shrinkage and
premium costs for stop-loss coverage and fully
obsolescence.
insured plans;

Costs of services performed under the extended

Long-lived asset impairment losses and gains/losses
protection plan.
on disposal of assets;

Other administrative costs, such as supplies, and
travel and entertainment.
Advertising - Costs associated with advertising are charged to expense as incurred. Advertising expenses were $811 million,
$809 million and $803 million in 2013, 2012 and 2011, respectively.
Shipping and Handling Costs - The Company includes shipping and handling costs relating to the delivery of products
directly from vendors to customers by third parties in cost of sales. Shipping and handling costs, which include third-party
delivery costs, salaries, and vehicle operations expenses relating to the delivery of products from stores and distribution centers
to customers, are classified as SG&A expense. Shipping and handling costs included in SG&A expense were $501 million,
$457 million and $461 million in 2013, 2012 and 2011, respectively.
Store Opening Costs - Costs of opening new or relocated retail stores, which include payroll and supply costs incurred prior to
store opening and grand opening advertising costs, are charged to expense as incurred.
Comprehensive Income - The Company reports comprehensive income in its consolidated statements of comprehensive
income and consolidated statements of shareholders’ equity. Comprehensive income represents changes in shareholders' equity
from non-owner sources and is comprised primarily of net earnings plus or minus unrealized gains or losses on available-for-
sale securities, as well as foreign currency translation adjustments. Net unrealized gains, net of tax, on available-for-sale
securities classified in accumulated other comprehensive income on the consolidated balance sheets were insignificant at
January 31, 2014, February 1, 2013 and February 3, 2012. The reclassification adjustments for realized gains/losses included
in net earnings were insignificant during 2013, 2012 and 2011. Net foreign currency translation losses, net of tax, classified in
accumulated other comprehensive loss were $17 million at January 31, 2014. Net foreign currency translation gains, net of tax,
classified in accumulated other comprehensive income were $51 million and $45 million at February 1, 2013 and February 3,
2012, respectively.
Segment Information - The Company’s home improvement retail operations represent a single reportable segment. Key
operating decisions are made at the Company level in order to maintain a consistent retail store presentation. The Company’s
home improvement retail stores sell similar products and services, use similar processes to sell those products and services, and
sell their products and services to similar classes of customers. In addition, the Company's operations exhibit similar economic
characteristics. The amounts of long-lived assets and net sales outside of the U.S. were not significant for any of the periods
presented.
Reclassifications - Certain prior period amounts have been reclassified to conform to current classifications. Certain amounts
within the consolidated statements of cash flows have been reclassified, including separately noting cash outflows for
acquisition of businesses within the investing section.