Lowe's 2013 Annual Report Download - page 56

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which is expected to impact the Company’s capital resources or liquidity. The Company was in compliance with all covenants
of these agreements at January 31, 2014.
In November 2011, the Company issued $1.0 billion of unsecured notes in two tranches: $500 million of 3.8% notes maturing
in 2021 and $500 million of 5.125% notes maturing in 2041. The 2021 and 2041 notes were issued at discounts of
approximately $3 million and $5 million, respectively. Interest on these notes is payable semiannually in arrears in May and
November of each year until maturity, beginning in May 2012.
In April 2012, the Company 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. The
2017, 2022 and 2042 notes were issued at discounts of approximately $2 million, $4 million and $10 million,
respectively. Interest on these notes is payable semiannually in arrears in April and October of each year until maturity,
beginning in October 2012.
In September 2013, the Company issued $1.0 billion of unsecured notes in two tranches: $500 million of 3.875% notes
maturing in September 2023 and $500 million of 5.0% notes maturing in September 2043. The 2023 and 2043 notes were
issued at discounts of approximately $5 million and $9 million, respectively. Interest on these notes is payable semiannually in
arrears in March and September of each year until maturity, beginning in March 2014.
The discounts associated with these issuances, which include the underwriting and issuance discounts, are recorded in long-
term debt and are being amortized over the respective terms of the notes.
The indentures governing the notes issued in 2013, 2012 and 2011 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 9: Shareholders' Equity
Authorized shares of preferred stock were 5.0 million ($5 par value) at January 31, 2014 and February 1, 2013, none of which
have been issued. The Board of Directors may issue the preferred stock (without action by shareholders) in one or more series,
having such voting rights, dividend and liquidation preferences, and such conversion and other rights as may be designated by
the Board of Directors at the time of issuance.
Authorized shares of common stock were 5.6 billion ($.50 par value) at January 31, 2014 and February 1, 2013.
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 February 1, 2013, the Company’s Board of Directors authorized a $5.0 billion share
repurchase program with no expiration. As of January 31, 2014, the Company had $1.3 billion remaining available under this
authorization. On January 31, 2014, the Company's Board of Directors authorized an additional $5.0 billion repurchase
program with no expiration, following which, the Company had available share repurchase authorization of $6.3 billion.
During the year ended January 31, 2014, the Company entered into Accelerated Share Repurchase (ASR) agreements with
third-party financial institutions to repurchase a total of 55.0 million shares of the Company's common stock for $2.25 billion.
At inception, the Company paid the financial institutions using cash on hand and took initial delivery of shares. Under the
terms of the ASR agreements, upon settlement, the Company would either receive additional shares from the financial
institution or be required to deliver additional shares or cash to the financial institution. The Company controlled its election to
either deliver additional shares or cash to the financial institution and was subject to provisions which limited the number of
shares the Company would be required to deliver.
The final number of shares received upon settlement of each ASR agreement was determined with reference to the volume-
weighted average price of the Company’s common stock over the term of the ASR agreement. The initial repurchase of shares