Lowe's 2013 Annual Report Download - page 57

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under these agreements resulted in an immediate reduction of the outstanding shares used to calculate the weighted-average
common shares outstanding for basic and diluted earnings per share.
These ASR agreements were accounted for as treasury stock transactions and forward stock purchase contracts. The par value
of the shares received was recorded as a reduction to common stock with the remainder recorded as a reduction to capital in
excess of par value and retained earnings. The forward stock purchase contract was considered indexed to the Company’s own
stock and was classified as an equity instrument.
During the year ended January 31, 2014, the Company also repurchased shares of its common stock through the open market
totaling 31.6 million shares for a cost of $1.5 billion.
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 2013 and 2012 were as follows:
2013
2012
(In millions)
Shares
Cost1
Shares
Cost1
Share repurchase program
86.6
$
3,732
145.7
$
4,350
Shares withheld from employees
1.0
38
1.5
43
Total share repurchases
87.6
$
3,770
147.2
$
4,393
1Reductions of $3.4 billion and $3.9 billion were recorded to retained earnings, after capital in excess of par value was
depleted, for 2013 and 2012, respectively.
NOTE 10: Accounting for Share-Based Payment
Overview of Share-Based Payment Plans
The Company has a number of active and inactive equity incentive plans (the Incentive Plans) under which the Company has
been authorized to 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. All of these plans contain a nondiscretionary anti-dilution provision that is designed to equalize the value of an
award as a result of any stock dividend, stock split, recapitalization, or any other similar equity restructuring.
A total of 169.0 million shares have been previously authorized for grant to key employees and non-employee directors under
all of the Company's Incentive Plans, but only 50.0 million of those shares were authorized for grants of share-based awards
under the Company's currently active Incentive Plans. In addition, a total of 70.0 million shares have been previously
authorized for purchases by employees participating in the ESPP.
At January 31, 2014, there were 9.1 million shares remaining available for grants under the currently active Incentive Plans and
27.2 million shares remaining available for purchases under the ESPP.
The Company recognized share-based payment expense in SG&A expense in the consolidated statements of earnings totaling
$100 million in both 2013 and 2012, and $107 million in 2011. The total associated income tax benefit recognized was $32
million, $33 million and $32 million in 2013, 2012 and 2011, respectively.
Total unrecognized share-based payment expense for all share-based payment plans was $143 million at January 31, 2014, of
which $79 million will be recognized in 2014, $51 million in 2015 and $13 million thereafter. This results in these amounts
being recognized over a weighted-average period of 1.9 years.
For all share-based payment awards, the expense recognized has been adjusted for estimated forfeitures where the requisite
service is not expected to be provided. Estimated forfeiture rates are developed based on the Company’s analysis of historical
forfeiture data for homogeneous employee groups.