Lowe's 2015 Annual Report Download - page 34

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25
acquisitions, if any, and to return cash to shareholders through both dividends and share repurchases over the next 12
months. There are no provisions in any agreements that would require early cash settlement of existing debt or leases as a
result of a downgrade in our debt rating or a decrease in our stock price. In addition, we do not believe it will be necessary to
repatriate cash and cash equivalents and short-term investments held in foreign affiliates to fund domestic operations.
Unrepatriated cash was not significant for all periods presented.
Cash Requirements
Capital expenditures
Our fiscal 2016 capital forecast is approximately $1.5 billion. Our expansion plans are expected to account for approximately
45% of planned net cash outflow. Investments in our existing stores, including investments in remerchandising, store
equipment, and technology, are expected to account for approximately 30% of net cash outflow. Approximately 20% of
planned net cash outflow is for corporate programs, including investments to enhance the customer experience, as well as
enhancements to the corporate infrastructure. Other planned capital expenditures, accounting for approximately 5% of planned
net cash outflow, are for investments in our existing distribution network.
On February 2, 2016, we entered into a definitive agreement to acquire all of the issued and outstanding common shares of
RONA for C$24 per share in cash and preferred shares for C$20 per share in cash, for a total transaction price of approximately
C$3.2 billion. The transaction has been unanimously approved by the Boards of Directors of Lowe’s and RONA and is
supported by the management teams of both companies; however, the transaction is subject to both shareholder and regulatory
approvals. We anticipate financing the transaction through the debt capital markets. In addition, we have entered into an
option to purchase Canadian dollars at a strike price of 1.3933 expiring November 1, 2016. The transaction is expected to close
in fiscal year 2016.
Debt and capital
Unsecured debt of $475 million and $550 million is scheduled to mature in April and October 2016, respectively. See Note 6
to the consolidated financial statements included herein for additional information regarding long-term debt, including fiscal
year 2015 financing activities.
We have an ongoing share repurchase program, authorized by the Company’s Board of Directors, 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. As of January 29, 2016, we had $3.6 billion
remaining available under our share repurchase program with no expiration date. In fiscal 2016, we expect to repurchase
shares totaling $3.5 billion through purchases made from time to time either in the open market or through private off market
transactions in accordance with SEC regulations. Our share repurchase assumption is not expected to be affected by the RONA
acquisition. See Note 7 to the consolidated financial statements included herein for additional information regarding share
repurchases.
Dividends declared during fiscal 2015 totaled $991 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
2015 was paid in fiscal 2016 and totaled $255 million.
Our ratio of debt to equity plus debt was 62.3% and 53.3% as of January 29, 2016, and January 30, 2015, 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 current or future material effect on our financial condition, cash flows, results of operations,
liquidity, capital expenditures or capital resources.