Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
May 03, 2019 | May 29, 2019 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | LOWES COMPANIES INC | |
Entity Central Index Key | 0000060667 | |
Document Type | 10-Q | |
Document Period End Date | May 3, 2019 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | --01-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Common Stock, Shares Outstanding | 782,916,484 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | May 03, 2019 | Feb. 01, 2019 | May 04, 2018 |
Current assets: | |||
Cash and cash equivalents | $ 2,973 | $ 511 | $ 1,565 |
Short-term investments | 190 | 218 | 205 |
Merchandise inventory - net | 15,026 | 12,561 | 13,204 |
Other current assets | 1,146 | 938 | 1,059 |
Total current assets | 19,335 | 14,228 | 16,033 |
Property, less accumulated depreciation | 18,150 | 18,432 | 19,500 |
Operating lease right-of-use assets | 3,926 | 0 | 0 |
Long-term investments | 235 | 256 | 321 |
Deferred income taxes - net | 495 | 294 | 199 |
Goodwill | 303 | 303 | 1,288 |
Other assets | 775 | 995 | 896 |
Total assets | 43,219 | 34,508 | 38,237 |
Current liabilities: | |||
Short-term borrowings | 0 | 722 | 0 |
Current maturities of long-term debt | 1,008 | 1,110 | 896 |
Current operating lease liabilities | 500 | 0 | 0 |
Accounts payable | 11,485 | 8,279 | 10,104 |
Accrued compensation and employee benefits | 769 | 662 | 715 |
Deferred revenue | 1,376 | 1,299 | 1,439 |
Other current liabilities | 2,643 | 2,425 | 2,620 |
Total current liabilities | 17,781 | 14,497 | 15,774 |
Long-term debt, excluding current maturities | 16,542 | 14,391 | 14,948 |
Noncurrent operating lease liabilities | 4,064 | 0 | 0 |
Deferred revenue - extended protection plans | 837 | 827 | 808 |
Other liabilities | 759 | 1,149 | 962 |
Total liabilities | 39,983 | 30,864 | 32,492 |
Shareholders' equity: | |||
Preferred stock - $5 par value, none issued | 0 | 0 | 0 |
Common stock - $0.50 par value; Shares issued and outstanding 795 at May 3, 2019; 822 at May 4, 2018, and 801 at February 1, 2019 | 397 | 401 | 411 |
Capital in excess of par value | 0 | 0 | 0 |
Retained earnings | 3,095 | 3,452 | 5,405 |
Accumulated other comprehensive loss | (256) | (209) | (71) |
Total shareholders' equity | 3,236 | 3,644 | 5,745 |
Total liabilities and shareholders' equity | $ 43,219 | $ 34,508 | $ 38,237 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | May 03, 2019 | Feb. 01, 2019 | May 04, 2018 |
Shareholders' equity: | |||
Preferred stock, par value | $ 5 | $ 5 | $ 5 |
Preferred stock, shares issued | 0 | 0 | 0 |
Common stock, par value | $ 0.50 | $ 0.50 | $ 0.50 |
Common stock, shares issued | 795,000,000 | 801,000,000 | 822,000,000 |
Common stock, shares outstanding | 795,000,000 | 801,000,000 | 822,000,000 |
Consolidated Statements of Curr
Consolidated Statements of Current and Retained Earnings (Unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
May 03, 2019 | May 04, 2018 | |
Current Earnings | ||
Net sales | $ 17,741 | $ 17,360 |
Cost of sales | 12,160 | 11,612 |
Gross margin | 5,581 | 5,748 |
Expenses: | ||
Selling, general and administrative | 3,862 | 3,934 |
Depreciation and amortization | 302 | 349 |
Operating income | 1,417 | 1,465 |
Interest - net | 162 | 160 |
Pre-tax earnings | 1,255 | 1,305 |
Income tax provision | 209 | 317 |
Net earnings | $ 1,046 | $ 988 |
Weighted-average common shares outstanding - basic (in shares) | 796 | 825 |
Basic earnings per common share (in dollars per share) | $ 1.31 | $ 1.19 |
Weighted-average common shares outstanding - diluted (in shares) | 797 | 826 |
Diluted earnings per common share (in dollars per share) | $ 1.31 | $ 1.19 |
Cash dividends per share (in dollars per share) | $ 0.48 | $ 0.41 |
Retained Earnings | ||
Balance at beginning of period | $ 3,452 | $ 5,425 |
Cumulative effect of accounting change | (263) | 33 |
Net earnings | 1,046 | 988 |
Cash dividends declared | (382) | (338) |
Share repurchases | (758) | (703) |
Balance at end of period | $ 3,095 | $ 5,405 |
Consolidated Statements of Cu_2
Consolidated Statements of Current and Retained Earnings (Percents) (Unaudited) | 3 Months Ended | |
May 03, 2019 | May 04, 2018 | |
Current Earnings | ||
Net sales | 100.00% | 100.00% |
Cost of sales | 68.54% | 66.89% |
Gross margin | 31.46% | 33.11% |
Expenses: | ||
Selling, general and administrative | 21.77% | 22.66% |
Depreciation and amortization | 1.70% | 2.01% |
Operating income | 7.99% | 8.44% |
Interest - net | 0.92% | 0.92% |
Pre-tax earnings | 7.07% | 7.52% |
Income tax provision | 1.17% | 1.83% |
Net earnings | 5.90% | 5.69% |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
May 03, 2019 | May 04, 2018 | |
Comprehensive Income | ||
Net earnings | $ 1,046 | $ 988 |
Foreign currency translation adjustments - net of tax | (33) | (83) |
Other | (15) | 0 |
Other comprehensive loss | (48) | (83) |
Comprehensive income | $ 998 | $ 905 |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive Income (Percents) (Unaudited) | 3 Months Ended | |
May 03, 2019 | May 04, 2018 | |
Comprehensive Income | ||
Net earnings | 5.90% | 5.69% |
Foreign currency translation adjustments - net of tax | (0.18%) | (0.48%) |
Other | (0.09%) | 0.00% |
Other comprehensive loss | (0.27%) | (0.48%) |
Comprehensive income | 5.63% | 5.21% |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity (Unaudited) - USD ($) shares in Millions, $ in Millions | Total | Total Lowe’s Companies, Inc. Shareholders’ Equity | Common Stock | Capital in Excess of Par Value | Retained Earnings | Accumulated Other Comprehensive Income/(Loss) |
Balance at Feb. 02, 2018 | $ 5,873 | $ 415 | $ 22 | $ 5,425 | $ 11 | |
Balance (in shares) at Feb. 02, 2018 | 830 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net earnings | 988 | 988 | ||||
Other comprehensive loss | $ (83) | (82) | (82) | |||
Cash dividends declared | $ (338) | (338) | (338) | |||
Share-based payment expense | 21 | 21 | ||||
Repurchase of common stock | (759) | $ (5) | (51) | (703) | ||
Repurchase of common stock (in shares) | (8.8) | (9) | ||||
Issuance of common stock under share-based payment plans | 9 | $ 1 | 8 | |||
Issuance of common stock under share-based payment plans (in shares) | 1 | |||||
Balance at May. 04, 2018 | 5,745 | $ 411 | 0 | 5,405 | (71) | |
Balance (in shares) at May. 04, 2018 | 822 | 822 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Cumulative effect of accounting change | $ 33 | 33 | 33 | |||
Balance at Feb. 01, 2019 | 3,644 | $ 401 | 0 | 3,452 | (209) | |
Balance (in shares) at Feb. 01, 2019 | 801 | 801 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net earnings | 1,046 | 1,046 | ||||
Other comprehensive loss | $ (48) | (47) | (47) | |||
Cash dividends declared | $ (382) | (382) | (382) | |||
Share-based payment expense | 39 | 39 | ||||
Repurchase of common stock | (833) | $ (5) | (70) | (758) | ||
Repurchase of common stock (in shares) | (8.1) | (8) | ||||
Issuance of common stock under share-based payment plans | 32 | $ 1 | 31 | |||
Issuance of common stock under share-based payment plans (in shares) | 2 | |||||
Balance at May. 03, 2019 | 3,236 | $ 397 | $ 0 | 3,095 | $ (256) | |
Balance (in shares) at May. 03, 2019 | 795 | 795 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Cumulative effect of accounting change | $ (263) | $ (263) | $ (263) |
Consolidated Statements of Sh_2
Consolidated Statements of Shareholders' Equity (Unaudited) (Parenthetical) - $ / shares | 3 Months Ended | |
May 03, 2019 | May 04, 2018 | |
Statement of Stockholders' Equity [Abstract] | ||
Cash dividends per share (in dollars per share) | $ 0.48 | $ 0.41 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
May 03, 2019 | May 04, 2018 | |
Cash flows from operating activities: | ||
Net earnings | $ 1,046 | $ 988 |
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||
Depreciation and amortization | 337 | 387 |
Noncash lease expense | 114 | 0 |
Deferred income taxes | (106) | (21) |
(Gain) loss on property and other assets - net | (2) | 6 |
(Gain) loss on cost method and equity method investments | (2) | 0 |
Share-based payment expense | 42 | 24 |
Changes in operating assets and liabilities: | ||
Merchandise inventory - net | (2,478) | (1,846) |
Other operating assets | (273) | (234) |
Accounts payable | 3,199 | 3,521 |
Other operating liabilities | 260 | 604 |
Net cash provided by operating activities | 2,137 | 3,429 |
Cash flows from investing activities: | ||
Purchases of investments | (3) | (573) |
Proceeds from sale/maturity of investments | 54 | 556 |
Capital expenditures | (205) | (224) |
Proceeds from sale of property and other long-term assets | 24 | 5 |
Other - net | (1) | 0 |
Net cash used in investing activities | (131) | (236) |
Cash flows from financing activities: | ||
Net change in short-term borrowings | (722) | (1,140) |
Net proceeds from issuance of long-term debt | 2,972 | 0 |
Repayment of long-term debt | (616) | (13) |
Proceeds from issuance of common stock under share-based payment plans | 32 | 8 |
Cash dividend payments | (385) | (340) |
Repurchase of common stock | (826) | (728) |
Other - net | (9) | (2) |
Net cash provided by (used in) financing activities | 446 | (2,215) |
Effect of exchange rate changes on cash | (2) | (1) |
Net increase in cash and cash equivalents, including cash classified within current assets held for sale | 2,450 | 977 |
Less: Net decrease in cash classified within current assets held for sale | 12 | 0 |
Net increase in cash and cash equivalents | 2,462 | 977 |
Cash and cash equivalents, beginning of period | 511 | 588 |
Cash and cash equivalents, end of period | $ 2,973 | $ 1,565 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
May 03, 2019 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation The accompanying consolidated financial statements (unaudited) and notes to the consolidated financial statements (unaudited) are presented in accordance with the rules and regulations of the Securities and Exchange Commission and do not include all the disclosures normally required in annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). The consolidated financial statements (unaudited), in the opinion of management, contain all adjustments necessary to present fairly the financial position and results as of May 3, 2019 , and May 4, 2018 . These interim consolidated financial statements (unaudited) should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Lowe’s Companies, Inc. (the Company) Annual Report on Form 10-K for the fiscal year ended February 1, 2019 (the Annual Report). The financial results for the interim periods may not be indicative of the financial results for the entire fiscal year. Reclassifications Certain prior period amounts have been reclassified to conform to current classifications. Accounting Pronouncements Recently Adopted Effective February 2, 2019, the Company adopted Accounting Standards Update (ASU) 2016-02, Leases (Topic 842), and all related amendments, using the optional transition approach and recognized the cumulative impact of adoption in the opening balance of retained earnings. Under ASU 2016-02, lessees are required to recognize lease assets and lease liabilities on the balance sheet for those leases previously classified as operating leases. The Company adopted the standard utilizing the transition election to not restate comparative periods for the impact of adopting the standard and recognizing the cumulative impact of adoption in the opening balance of retained earnings. The Company elected the package of transition expedients available for expired or existing contracts, which allowed the carry-forward of historical assessments of (1) whether contracts are or contain leases, (2) lease classification and (3) initial direct costs. Adoption of the standard resulted in the recording of additional net lease-related assets and lease-related liabilities of approximately $3.6 billion and $3.9 billion , respectively, as of February 2, 2019. The difference between the additional lease assets and lease liabilities, net of the $87 million deferred tax impact, was $263 million and was recorded as an adjustment to retained earnings. This adjustment to retained earnings primarily represents the write-off of right-of-use assets associated with closed locations, net of previously established store closing lease obligations as well as the derecognition of build-to-suit leases. The adoption of this standard by the Company did not have a material impact on its consolidated statements of earnings, comprehensive income or cash flows and will have no impact on the Company’s debt covenant compliance under its current agreements. See Note 3 for additional details of the Company’s leases. |
Change in Accounting Principle
Change in Accounting Principle | 3 Months Ended |
May 03, 2019 | |
Accounting Changes and Error Corrections [Abstract] | |
Change in Accounting Principle | Change in Accounting Principle - During the fourth quarter of fiscal 2018, the Company changed its method of accounting for shipping and handling costs from the Company’s stores, distribution centers, and other locations to customers. Under the new accounting principle, shipping and handling costs related to the delivery of products from the Company to customers are included in costs of sales, whereas previously, they were included in SG&A expense as well as depreciation and amortization. In connection with the change in presentation, the Company also changed its definition of shipping and handling costs to include all direct and indirect costs associated with delivering product to a customer, including expenses associated with the central delivery terminals and depreciation and amortization of delivery assets. Under the previous definition of shipping and handling costs, the Company only included third-party delivery costs, salaries, and vehicle operations expenses relating to the delivery of product from stores and distribution centers to customers. The impact of this change in definition was not material. The Company believes including these expenses in cost of sales is preferable, as it better aligns these costs with the related revenue in the gross profit calculation and is consistent with the practices of other retailers. This change in accounting principle has been applied retrospectively, and the consolidated statements of earnings reflect the effect of this accounting principle change in all years presented. This reclassification had no impact on operating income, net earnings or diluted earnings per share. The consolidated balance sheets, the consolidated statements of comprehensive income, consolidated statements of shareholders’ equity, and the consolidated statements of cash flows were not impacted by this accounting principle change. The consolidated statements of earnings for the three months ended May 4, 2018 has been adjusted to reflect this change in accounting principle. The impact of the adjustment for the three months ended May 4, 2018 was an increase of $265 million to cost of sales and a corresponding decrease to SG&A expense of $255 million and depreciation and amortization expense of $10 million . |
Leases
Leases | 3 Months Ended |
May 03, 2019 | |
Leases [Abstract] | |
Leases, Operating | Leases - During the first quarter of fiscal 2019, the Company adopted ASU 2016-02, Leases (Topic 842) , which requires leases to be recognized on the balance sheet. Leases with an original term of 12 months or less are not recognized on the Company’s balance sheet, and the lease expense related to those short-term leases is recognized over the lease term. The Company does not account for lease and non-lease (e.g. common area maintenance) components of contracts separately for any underlying asset class. The Company leases certain retail stores, warehouses, distribution centers, office space, land and equipment under finance and operating leases. Lease commencement occurs on the date the Company takes possession or control of the property or equipment. Original terms for our facility-related leases are generally between five and 20 years. These leases generally contain provisions for four to six renewal options of five years each. Original terms for equipment-related leases, primarily material handling equipment and vehicles, are generally between one and seven years . Some of the Company’s leases also include rental escalation clauses and/or termination provisions. Renewal options and termination options are included in the determination of lease payments when appropriate based on management’s assessment of the probability that the options will be exercised, considering the facility’s financial performance, strategic importance and/or invested capital. If readily determinable, the rate implicit in the lease is used to discount lease payments to present value; however, substantially all of the Company’s leases do not provide a readily determinable implicit rate. When the implicit rate is not determinable, the Company’s estimated incremental borrowing rate is utilized, determined on a collateralized basis, to discount lease payments based on information available at lease commencement. Some lease agreements also provide for contingent rentals based on sales performance in excess of specified minimums or on changes in the consumer price index. Contingent rentals, which are based on future performance or changes in indices, are excluded from the determination of lease payments and were not significant for any of the periods presented. The Company’s lease agreements do not contain any material restrictions or covenants or any material residual value guarantees. The Company subleases certain properties that are not used in its operations. Sublease income was not significant for any of the periods presented. The table below presents the lease-related assets and liabilities recorded on the balance sheet. Leases (in millions) Classification May 3, 2019 Assets Operating lease assets Operating lease right-of-use assets $ 3,926 Finance lease assets Property, less accumulated depreciation 1 289 Total lease assets 4,215 Liabilities Current Operating Current operating lease liabilities 500 Finance Current maturities of long-term debt 33 Non-current Operating Non-current operating lease liabilities 4,064 Finance Long-term debt, excluding current maturities 388 Total lease liabilities $ 4,985 1 Finance lease assets are recorded net of accumulated amortization of $8 million as of May 3, 2019 . The table below presents the lease costs for finance and operating leases for the first quarter of fiscal 2019. Lease Cost Three Months Ended (in millions) May 3, 2019 Finance lease cost Amortization of leased assets $ 8 Interest on lease liabilities 7 Operating lease cost 1 163 Total lease cost $ 178 1 Includes short-term leases, variable lease costs, and sublease income, which are immaterial. The future minimum rental payments required under operating leases and capitalized lease obligations as of May 3, 2019 having initial or remaining non-cancelable lease terms in excess of one year are summarized as follows: Maturity of lease liabilities Operating Finance (In millions) Leases 1, 3 Leases 2, 3 Total 2019 $ 463 $ 41 $ 504 2020 664 60 724 2021 636 60 696 2022 642 63 705 2023 554 58 612 After 2023 2,934 323 3,257 Total lease payments 5,893 605 6,498 Less: interest 4 (1,329 ) (184 ) (1,513 ) Present value of lease liabilities 5 $ 4,564 $ 421 $ 4,985 1 Operating lease payments include $202 million related to options to extend lease terms that are reasonably certain of being exercised and exclude $107 million of minimum lease payments for leases signed but not yet commenced. 2 Finance lease payments include $19 million related to options to extend lease terms that are reasonably certain of being exercised and exclude $329 million of minimum lease payments for leases signed but not yet commenced. 3 Future minimum rental payments required under operating leases and capitalized lease obligations, as of February 1, 2019, are disclosed in the fiscal year 2018 Annual Report prepared in accordance with Accounting Standards Codification (ASC) 840, Leases. 4 Calculated using the lease-specific incremental borrowing rate. 5 Includes the current portion of $500 million for operating leases and $33 million for finance leases. Lease Term and Discount Rate May 3, 2019 Weighted-average remaining lease term (years) Operating leases 10.68 Finance leases 11.07 Weighted-average discount rate Operating lease 4.17 % Finance leases 7.48 % Other Information Three Months Ended (In millions) May 3, 2019 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 200 Operating cash flows from finance leases 7 Financing cash flows from finance leases 8 Leased assets obtained in exchange for new finance lease liabilities 3 Leased assets obtained in exchange for new operating lease liabilities 145 Prior Period Disclosures As a result of the adoption of ASC 842, Leases , on February 2, 2019, the Company is required to present future minimum lease payments for operating leases and capitalized lease obligations having initial or remaining non-cancelable lease terms in excess of one year. These future minimum lease payments were previously disclosed in our 2018 Annual Report on Form 10-K and accounted for under previous lease guidance. Commitments as of February 1, 2019 were as follows: February 1, 2019 Fiscal Year (In millions) Operating Leases Capitalized Lease Obligations Total 2019 $ 595 $ 133 $ 728 2020 605 87 692 2021 564 90 654 2022 519 87 606 2023 473 86 559 Later years 2,609 783 3,392 Total minimum lease payments $ 5,365 $ 1,266 $ 6,631 Less amount representing interest (492 ) Present value of minimum lease payments 774 Less current maturities (65 ) Present value of minimum lease payments, less current maturities $ 709 |
Leases, Finance | Leases - During the first quarter of fiscal 2019, the Company adopted ASU 2016-02, Leases (Topic 842) , which requires leases to be recognized on the balance sheet. Leases with an original term of 12 months or less are not recognized on the Company’s balance sheet, and the lease expense related to those short-term leases is recognized over the lease term. The Company does not account for lease and non-lease (e.g. common area maintenance) components of contracts separately for any underlying asset class. The Company leases certain retail stores, warehouses, distribution centers, office space, land and equipment under finance and operating leases. Lease commencement occurs on the date the Company takes possession or control of the property or equipment. Original terms for our facility-related leases are generally between five and 20 years. These leases generally contain provisions for four to six renewal options of five years each. Original terms for equipment-related leases, primarily material handling equipment and vehicles, are generally between one and seven years . Some of the Company’s leases also include rental escalation clauses and/or termination provisions. Renewal options and termination options are included in the determination of lease payments when appropriate based on management’s assessment of the probability that the options will be exercised, considering the facility’s financial performance, strategic importance and/or invested capital. If readily determinable, the rate implicit in the lease is used to discount lease payments to present value; however, substantially all of the Company’s leases do not provide a readily determinable implicit rate. When the implicit rate is not determinable, the Company’s estimated incremental borrowing rate is utilized, determined on a collateralized basis, to discount lease payments based on information available at lease commencement. Some lease agreements also provide for contingent rentals based on sales performance in excess of specified minimums or on changes in the consumer price index. Contingent rentals, which are based on future performance or changes in indices, are excluded from the determination of lease payments and were not significant for any of the periods presented. The Company’s lease agreements do not contain any material restrictions or covenants or any material residual value guarantees. The Company subleases certain properties that are not used in its operations. Sublease income was not significant for any of the periods presented. The table below presents the lease-related assets and liabilities recorded on the balance sheet. Leases (in millions) Classification May 3, 2019 Assets Operating lease assets Operating lease right-of-use assets $ 3,926 Finance lease assets Property, less accumulated depreciation 1 289 Total lease assets 4,215 Liabilities Current Operating Current operating lease liabilities 500 Finance Current maturities of long-term debt 33 Non-current Operating Non-current operating lease liabilities 4,064 Finance Long-term debt, excluding current maturities 388 Total lease liabilities $ 4,985 1 Finance lease assets are recorded net of accumulated amortization of $8 million as of May 3, 2019 . The table below presents the lease costs for finance and operating leases for the first quarter of fiscal 2019. Lease Cost Three Months Ended (in millions) May 3, 2019 Finance lease cost Amortization of leased assets $ 8 Interest on lease liabilities 7 Operating lease cost 1 163 Total lease cost $ 178 1 Includes short-term leases, variable lease costs, and sublease income, which are immaterial. The future minimum rental payments required under operating leases and capitalized lease obligations as of May 3, 2019 having initial or remaining non-cancelable lease terms in excess of one year are summarized as follows: Maturity of lease liabilities Operating Finance (In millions) Leases 1, 3 Leases 2, 3 Total 2019 $ 463 $ 41 $ 504 2020 664 60 724 2021 636 60 696 2022 642 63 705 2023 554 58 612 After 2023 2,934 323 3,257 Total lease payments 5,893 605 6,498 Less: interest 4 (1,329 ) (184 ) (1,513 ) Present value of lease liabilities 5 $ 4,564 $ 421 $ 4,985 1 Operating lease payments include $202 million related to options to extend lease terms that are reasonably certain of being exercised and exclude $107 million of minimum lease payments for leases signed but not yet commenced. 2 Finance lease payments include $19 million related to options to extend lease terms that are reasonably certain of being exercised and exclude $329 million of minimum lease payments for leases signed but not yet commenced. 3 Future minimum rental payments required under operating leases and capitalized lease obligations, as of February 1, 2019, are disclosed in the fiscal year 2018 Annual Report prepared in accordance with Accounting Standards Codification (ASC) 840, Leases. 4 Calculated using the lease-specific incremental borrowing rate. 5 Includes the current portion of $500 million for operating leases and $33 million for finance leases. Lease Term and Discount Rate May 3, 2019 Weighted-average remaining lease term (years) Operating leases 10.68 Finance leases 11.07 Weighted-average discount rate Operating lease 4.17 % Finance leases 7.48 % Other Information Three Months Ended (In millions) May 3, 2019 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 200 Operating cash flows from finance leases 7 Financing cash flows from finance leases 8 Leased assets obtained in exchange for new finance lease liabilities 3 Leased assets obtained in exchange for new operating lease liabilities 145 Prior Period Disclosures As a result of the adoption of ASC 842, Leases , on February 2, 2019, the Company is required to present future minimum lease payments for operating leases and capitalized lease obligations having initial or remaining non-cancelable lease terms in excess of one year. These future minimum lease payments were previously disclosed in our 2018 Annual Report on Form 10-K and accounted for under previous lease guidance. Commitments as of February 1, 2019 were as follows: February 1, 2019 Fiscal Year (In millions) Operating Leases Capitalized Lease Obligations Total 2019 $ 595 $ 133 $ 728 2020 605 87 692 2021 564 90 654 2022 519 87 606 2023 473 86 559 Later years 2,609 783 3,392 Total minimum lease payments $ 5,365 $ 1,266 $ 6,631 Less amount representing interest (492 ) Present value of minimum lease payments 774 Less current maturities (65 ) Present value of minimum lease payments, less current maturities $ 709 |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
May 03, 2019 | |
Revenue Recognition | |
Revenue Recognition | Revenue Recognition - Net sales consists primarily of revenue, net of sales tax, associated with contracts with customers for the sale of goods and services in amounts that reflect consideration the Company is entitled to in exchange for those goods and services. The following table presents the Company’s sources of revenue: (In millions) Three Months Ended May 3, 2019 May 4, 2018 Products $ 16,900 $ 16,501 Services 554 624 Other 287 235 Net sales $ 17,741 $ 17,360 Revenue from products primarily relates to in-store and online merchandise purchases, which are recognized at the point in time when the customer obtains control of the merchandise, which is at the time of in-store purchase or delivery of the product to the customer. A provision for anticipated merchandise returns is provided through a reduction of sales and cost of sales in the period that the related sales are recorded. The merchandise return reserve is presented on a gross basis, with a separate asset and liability included in the consolidated balance sheets. Anticipated sales returns reflected in other current liabilities were $287 million at May 3, 2019 and $305 million at May 4, 2018 . The associated right of return assets reflected in other current assets were $190 million at May 3, 2019 and $197 million at May 4, 2018 . Revenues from services primarily relate to professional installation services the Company provides through subcontractors related to merchandise purchased by a customer. In certain instances, installation services include materials provided by the subcontractor, and both product and installation are included in service revenue. The Company recognizes revenue associated with services as they are rendered, and the majority of services are completed within one week from initiation. Deferred revenue is presented for merchandise that has not yet transferred control to the customer and for services that have not yet been provided, but for which tender has been accepted. Deferred revenue is recognized in sales either at a point in time when the customer obtains control of merchandise through pickup or delivery, or over time as services are provided to the customer. Deferred revenues associated with amounts received for which customers have not taken possession of the merchandise or for which installation has not yet been completed were $935 million and $1.0 billion at May 3, 2019 and May 4, 2018 , respectively. The majority of revenue for goods and services is recognized in the quarter following revenue deferral. Stored-value cards In addition, the Company defers revenues from stored-value cards, which include gift cards and returned merchandise credits, and recognizes revenue into sales when the cards are redeemed. The liability associated with outstanding stored-value cards was $441 million and $437 million at May 3, 2019 , and May 4, 2018 , respectively, and these amounts are included in deferred revenue on the consolidated balance sheets. The Company recognizes income from unredeemed stored-value cards in proportion to the pattern of rights exercised by the customer. Amounts recognized as breakage were insignificant for the three months ended May 3, 2019 and May 4, 2018 . Extended protection plans The Company also defers revenues for its separately-priced extended protection plan contracts, which is a Lowe’s-branded program for which the Company is ultimately self-insured. The Company recognizes revenue from extended protection plan sales on a straight-line basis over the respective contract term. Extended protection plan contract terms primarily range from one to five years from the date of purchase or the end of the manufacturer’s warranty, as applicable. Deferred revenue from extended protection plans recognized into sales were $99 million for the three months ended May 3, 2019 and $95 million for the three months ended May 4, 2018. Incremental direct acquisition costs associated with the sale of extended protection plans are also deferred and recognized as expense on a straight-line basis over the respective contract term and were insignificant at May 3, 2019 and May 4, 2018, respectively. The Company’s extended protection plan deferred costs are included in other assets (noncurrent) on the consolidated balance sheets. All other costs, such as costs of services performed under the contract, general and administrative expenses, and advertising expenses are expensed as incurred. The liability for extended protection plan claims incurred is included in other current liabilities on the consolidated balance sheets and was not material in any of the periods presented. Expenses for claims are recognized when incurred and totaled $48 million and $46 million for the three months ended May 3, 2019 and May 4, 2018 , respectively. Disaggregation of Revenues The following table presents the Company’s net sales disaggregated by merchandise division: Three Months Ended May 3, 2019 May 4, 2018 (In millions) Total Sales % Total Sales % Home Décor 1 $ 6,272 36 % $ 6,201 36 % Hardlines 2 5,528 31 5,128 30 Building Products 3 5,524 31 5,524 31 Other 417 2 507 3 Total $ 17,741 100 % $ 17,360 100 % 1 Home Décor includes the following product categories: Appliances, Decor, Flooring, Kitchens & Bath, and Paint 2 Hardlines includes the following product categories: Hardware, Lawn & Garden, Seasonal & Outdoor Living, and Tools 3 Building Products includes the following product categories: Lighting, Lumber & Building Materials, Millwork, and Rough Plumbing & Electrical The following table presents the Company’s net sales disaggregated by geographical area: (In millions) Three Months Ended May 3, 2019 May 4, 2018 United States $ 16,647 $ 16,173 International 1,094 1,187 Net Sales $ 17,741 $ 17,360 |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
May 03, 2019 | |
Fair Value Measurements | |
Fair Value Measurements | Fair Value Measurements - Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The authoritative guidance for fair value measurements establishes a three-level hierarchy, which encourages an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The three levels of the hierarchy are defined as follows: • Level 1 - inputs to the valuation techniques that are quoted prices in active markets for identical assets or liabilities • Level 2 - inputs to the valuation techniques that are other than quoted prices but are observable for the assets or liabilities, either directly or indirectly • Level 3 - inputs to the valuation techniques that are unobservable for the assets or liabilities Assets and Liabilities that are Measured at Fair Value on a Recurring Basis The following table presents the Company’s financial assets measured at fair value on a recurring basis as of May 3, 2019 , May 4, 2018 , and February 1, 2019 . The fair values of these instruments approximated amortized costs. Fair Value Measurements at (In millions) Measurement Level May 3, 2019 May 4, 2018 February 1, 2019 Short-term investments: Available-for-sale securities Money market funds Level 1 $ 156 $ 188 $ 207 Agency securities Level 2 22 — 10 Corporate debt securities Level 2 12 — 1 Certificates of deposit Level 1 — 17 — Total short-term investments $ 190 $ 205 $ 218 Long-term investments: Available-for-sale securities Corporate debt securities Level 2 $ 181 $ — $ 191 Agency securities Level 2 28 — 65 U.S. Treasury securities Level 1 26 — — Municipal floating rate obligations Level 2 — 321 — Total long-term investments $ 235 $ 321 $ 256 There were no transfers between Levels 1, 2 or 3 during any of the periods presented. When available, quoted prices were used to determine fair value. When quoted prices in active markets were available, investments were classified within Level 1 of the fair value hierarchy. When quoted prices in active markets were not available, fair values were determined using pricing models, and the inputs to those pricing models were based on observable market inputs. The inputs to the pricing models were typically benchmark yields, reported trades, broker-dealer quotes, issuer spreads and benchmark securities, among others. Assets and Liabilities that are Measured at Fair Value on a Nonrecurring Basis During the three months ended May 3, 2019 and May 4, 2018 , the Company had no significant measurements of assets and liabilities at fair value on a nonrecurring basis subsequent to their initial recognition. Fair Value of Financial Instruments The Company’s financial instruments not measured at fair value on a recurring basis include cash and cash equivalents, accounts receivable, short-term borrowings, accounts payable, accrued liabilities and long-term debt and are reflected in the financial statements at cost. With the exception of long-term debt, cost approximates fair value for these items due to their short-term nature. The fair values of the Company’s unsecured notes were estimated using quoted market prices. The fair values of the Company’s mortgage notes were estimated using discounted cash flow analyses, based on the future cash outflows associated with these arrangements and discounted using the applicable incremental borrowing rate. Carrying amounts and the related estimated fair value of the Company’s long-term debt, excluding capitalized lease obligations, are as follows: May 3, 2019 May 4, 2018 February 1, 2019 (In millions) Carrying Amount Fair Value Carrying Amount Fair Value Carrying Amount Fair Value Unsecured notes (Level 1) $ 17,090 $ 17,261 $ 14,963 $ 15,151 $ 14,721 $ 14,473 Mortgage notes (Level 2) 6 6 6 7 6 6 Long-term debt (excluding capitalized lease obligations) $ 17,096 $ 17,267 $ 14,969 $ 15,158 $ 14,727 $ 14,479 |
Restricted Investment Balances
Restricted Investment Balances | 3 Months Ended |
May 03, 2019 | |
Restricted Investment Balances | |
Restricted Investment Balances | Restricted Investment Balances - Short-term and long-term investments include restricted balances pledged as collateral primarily for the Company’s extended protection plan program. Restricted balances included in short-term investments were $190 million at May 3, 2019 , $188 million at May 4, 2018 , and $218 million at February 1, 2019 . Restricted balances included in long-term investments were $235 million at May 3, 2019 , $298 million at May 4, 2018 , and $256 million at February 1, 2019 . |
Property
Property | 3 Months Ended |
May 03, 2019 | |
Property | |
Property | Property - Property is shown net of accumulated depreciation of $17.3 billion at May 3, 2019 , $17.4 billion at May 4, 2018 , and $17.4 billion at February 1, 2019 . |
Long-Term Debt
Long-Term Debt | 3 Months Ended |
May 03, 2019 | |
Long-Term Debt | |
Long-Term Debt | Long-Term Debt - During the first quarter of fiscal 2019 , the Company issued $3.0 billion of unsecured notes as follows: Issue Date Principal Amount (in millions) Maturity Date Fixed vs. Floating Interest Rate Discount (in millions) April 5, 2019 $ 1,500 April 2029 Fixed 3.650% $ 9 April 5, 2019 $ 1,500 April 2049 Fixed 4.550% $ 19 Interest on the notes issued in 2019 is payable semiannually in arrears in April and October of each year until maturity. The indenture governing the notes issued in 2019 contains a provision that allows the Company to redeem these notes at any time, in whole or in part, at specified redemption prices, plus accrued and unpaid interest, if any, up to the date of redemption. The indenture also contains 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 up to the date of purchase. The indenture governing the notes does not limit the aggregate principal amount of debt securities that the Company may issue and does not require the Company to maintain specified financial ratios or levels of net worth or liquidity. However, the indenture includes various restrictive covenants, none of which is expected to impact the Company’s liquidity or capital resources. |
Shareholders' Equity
Shareholders' Equity | 3 Months Ended |
May 03, 2019 | |
Shareholders' Equity | |
Shareholders' Equity | Shareholders’ Equity - The Company has a share repurchase program that is executed through purchases made from time to time either in the open market, which may be made under pre-set trading plans meeting the requirements of Rule 10b5-1(c) of the Securities Exchange Act of 1934, or through private off-market transactions. Shares purchased under the repurchase program are retired and returned to authorized and unissued status. On January 26, 2018, the Company’s Board of Directors authorized a $5.0 billion share repurchase program with no expiration, which was announced on the same day. On December 12, 2018, the Company’s Board of Directors authorized an additional $10.0 billion share repurchase program with no expiration, which was announced on the same day. As of May 3, 2019 , the Company had $13.1 billion remaining in its share repurchase program. In November 2018, the Company entered into an Accelerated Share Repurchase (ASR) agreement with a third-party financial institution to repurchase $270 million of the Company’s common stock. At inception, pursuant to the agreement, the Company paid $270 million to the financial institution using cash on hand, and took delivery of 2.6 million shares. The Company finalized the transaction and received an additional 0.3 million shares in February 2019. In March 2019, the Company entered into a variable notional ASR agreement with a third-party financial institution to repurchase $350 million to $500 million of the Company’s common stock. At inception, pursuant to the agreement, the Company paid $500 million to the financial institution using cash on hand, and took delivery of 2.9 million shares. The Company finalized the transaction to receive an additional 0.3 million shares prior to the end of the first quarter. Subsequent to the end of the first quarter, the Company received a $150 million cash payment from the third-party financial institution, which is equal to the difference between the $500 million payment made at inception and the final notional amount. Under the terms of the ASR agreements, upon settlement, the Company would either receive additional shares from the applicable financial institution or be required to deliver additional shares or cash to such financial institution. The Company controlled the election to either deliver additional shares or cash to the financial institution, and the ASR agreements were 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 of the ASR agreements was determined with reference to the volume-weighted average price of the Company’s common stock over the term of the applicable ASR agreement. The initial repurchase of shares under the 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. Each ASR agreement was accounted for as a treasury stock transaction and forward stock purchase contract. 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. In addition, during the three months ended May 3, 2019 , the Company repurchased shares of its common stock through the open market totaling 4.5 million shares for a cost of $468 million . 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 share-based awards. Shares repurchased for the three months ended May 3, 2019 and May 4, 2018 were as follows: Three Months Ended May 3, 2019 May 4, 2018 (In millions) Shares Cost 1 Shares Cost 1 Share repurchase program 8.0 $ 818 8.7 $ 750 Shares withheld from employees 0.1 13 0.1 8 Total share repurchases 8.1 $ 831 8.8 $ 758 1 Reductions of $758 million and $703 million were recorded to retained earnings, after capital in excess of par value was depleted, for the three months ended May 3, 2019 and May 4, 2018 , respectively. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
May 03, 2019 | |
Earnings Per Share | |
Earnings Per Share | Earnings Per Share - The Company calculates basic and diluted earnings per common share using the two-class method. Under the two-class method, net earnings are allocated to each class of common stock and participating security as if all of the net earnings for the period had been distributed. The Company’s participating securities consist of share-based payment awards that contain a nonforfeitable right to receive dividends and, therefore, are considered to participate in undistributed earnings with common shareholders. Basic earnings per common share excludes dilution and is calculated by dividing net earnings allocable to common shares by the weighted-average number of common shares outstanding for the period. Diluted earnings per common share is calculated by dividing net earnings allocable to common shares by the weighted-average number of common shares as of the balance sheet date, as adjusted for the potential dilutive effect of non-participating share-based awards. The following table reconciles earnings per common share for the three months ended May 3, 2019 and May 4, 2018 : Three Months Ended (In millions, except per share data) May 3, 2019 May 4, 2018 Basic earnings per common share: Net earnings $ 1,046 $ 988 Less: Net earnings allocable to participating securities (3 ) (3 ) Net earnings allocable to common shares, basic $ 1,043 $ 985 Weighted-average common shares outstanding 796 825 Basic earnings per common share $ 1.31 $ 1.19 Diluted earnings per common share: Net earnings $ 1,046 $ 988 Less: Net earnings allocable to participating securities (3 ) (3 ) Net earnings allocable to common shares, diluted $ 1,043 $ 985 Weighted-average common shares outstanding 796 825 Dilutive effect of non-participating share-based awards 1 1 Weighted-average common shares, as adjusted 797 826 Diluted earnings per common share $ 1.31 $ 1.19 Stock options to purchase 0.6 million and 0.6 million shares of common stock were anti-dilutive for the three months ended May 3, 2019 and May 4, 2018 , respectively. |
Income Taxes
Income Taxes | 3 Months Ended |
May 03, 2019 | |
Income Taxes | |
Income Taxes | Income Taxes - The Company’s effective income tax rates were 16.6% and 24.3% for the three months ended May 3, 2019 and May 4, 2018 , respectively. The decrease in the effective income tax rate is primarily due to a favorable tax benefit recorded during the quarter associated with the planned exit of the Mexico retail operations. In fiscal 2018, the Company announced its intention to exit its Mexico retail operations and had planned to sell the operating business. However, in the first quarter of 2019, after an extensive market evaluation, the decision was made to instead sell the assets of the business through liquidation. |
Supplemental Disclosure
Supplemental Disclosure | 3 Months Ended |
May 03, 2019 | |
Supplemental Disclosure | |
Supplemental Disclosure | Supplemental Disclosure Net interest expense is comprised of the following: Three Months Ended (In millions) May 3, 2019 May 4, 2018 Long-term debt $ 154 $ 145 Finance lease obligations 7 $ — Capitalized lease obligations — 15 Interest income (7 ) (3 ) Interest capitalized — (1 ) Other 8 4 Interest - net $ 162 $ 160 Supplemental disclosures of cash flow information: Three Months Ended (In millions) May 3, 2019 May 4, 2018 Cash paid for interest, net of amount capitalized 1 $ 287 $ 288 Cash paid for income taxes - net $ 19 $ 43 Non-cash investing and financing activities: Non-cash property acquisitions, including assets acquired under capital lease 1 $ 4 $ 8 Cash dividends declared but not paid $ 382 $ 338 1 Upon adoption of ASU 2016-02, Leases, the Company presents supplemental cash flow disclosures related to its finance and operating leases within Note 3 . |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
May 03, 2019 | |
Summary of Significant Accounting Policies | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements (unaudited) and notes to the consolidated financial statements (unaudited) are presented in accordance with the rules and regulations of the Securities and Exchange Commission and do not include all the disclosures normally required in annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). The consolidated financial statements (unaudited), in the opinion of management, contain all adjustments necessary to present fairly the financial position and results as of May 3, 2019 , and May 4, 2018 . These interim consolidated financial statements (unaudited) should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Lowe’s Companies, Inc. (the Company) Annual Report on Form 10-K for the fiscal year ended February 1, 2019 (the Annual Report). The financial results for the interim periods may not be indicative of the financial results for the entire fiscal year. |
Reclassifications | Reclassifications Certain prior period amounts have been reclassified to conform to current classifications. |
Accounting Pronouncements Recently Adopted | Accounting Pronouncements Recently Adopted Effective February 2, 2019, the Company adopted Accounting Standards Update (ASU) 2016-02, Leases (Topic 842), and all related amendments, using the optional transition approach and recognized the cumulative impact of adoption in the opening balance of retained earnings. Under ASU 2016-02, lessees are required to recognize lease assets and lease liabilities on the balance sheet for those leases previously classified as operating leases. The Company adopted the standard utilizing the transition election to not restate comparative periods for the impact of adopting the standard and recognizing the cumulative impact of adoption in the opening balance of retained earnings. The Company elected the package of transition expedients available for expired or existing contracts, which allowed the carry-forward of historical assessments of (1) whether contracts are or contain leases, (2) lease classification and (3) initial direct costs. Adoption of the standard resulted in the recording of additional net lease-related assets and lease-related liabilities of approximately $3.6 billion and $3.9 billion , respectively, as of February 2, 2019. The difference between the additional lease assets and lease liabilities, net of the $87 million deferred tax impact, was $263 million and was recorded as an adjustment to retained earnings. This adjustment to retained earnings primarily represents the write-off of right-of-use assets associated with closed locations, net of previously established store closing lease obligations as well as the derecognition of build-to-suit leases. The adoption of this standard by the Company did not have a material impact on its consolidated statements of earnings, comprehensive income or cash flows and will have no impact on the Company’s debt covenant compliance under its current agreements. See Note 3 for additional details of the Company’s leases. |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
May 03, 2019 | |
Leases [Abstract] | |
Operating and Finance Leases, Assets and Liabilities | The table below presents the lease-related assets and liabilities recorded on the balance sheet. Leases (in millions) Classification May 3, 2019 Assets Operating lease assets Operating lease right-of-use assets $ 3,926 Finance lease assets Property, less accumulated depreciation 1 289 Total lease assets 4,215 Liabilities Current Operating Current operating lease liabilities 500 Finance Current maturities of long-term debt 33 Non-current Operating Non-current operating lease liabilities 4,064 Finance Long-term debt, excluding current maturities 388 Total lease liabilities $ 4,985 1 Finance lease assets are recorded net of accumulated amortization of $8 million as of May 3, 2019 . |
Schedule of Finance and Operating Lease Costs | The table below presents the lease costs for finance and operating leases for the first quarter of fiscal 2019. Lease Cost Three Months Ended (in millions) May 3, 2019 Finance lease cost Amortization of leased assets $ 8 Interest on lease liabilities 7 Operating lease cost 1 163 Total lease cost $ 178 1 Includes short-term leases, variable lease costs, and sublease income, which are immaterial. |
Operating Lease Liability, Maturity | The future minimum rental payments required under operating leases and capitalized lease obligations as of May 3, 2019 having initial or remaining non-cancelable lease terms in excess of one year are summarized as follows: Maturity of lease liabilities Operating Finance (In millions) Leases 1, 3 Leases 2, 3 Total 2019 $ 463 $ 41 $ 504 2020 664 60 724 2021 636 60 696 2022 642 63 705 2023 554 58 612 After 2023 2,934 323 3,257 Total lease payments 5,893 605 6,498 Less: interest 4 (1,329 ) (184 ) (1,513 ) Present value of lease liabilities 5 $ 4,564 $ 421 $ 4,985 1 Operating lease payments include $202 million related to options to extend lease terms that are reasonably certain of being exercised and exclude $107 million of minimum lease payments for leases signed but not yet commenced. 2 Finance lease payments include $19 million related to options to extend lease terms that are reasonably certain of being exercised and exclude $329 million of minimum lease payments for leases signed but not yet commenced. 3 Future minimum rental payments required under operating leases and capitalized lease obligations, as of February 1, 2019, are disclosed in the fiscal year 2018 Annual Report prepared in accordance with Accounting Standards Codification (ASC) 840, Leases. 4 Calculated using the lease-specific incremental borrowing rate. 5 Includes the current portion of $500 million for operating leases and $33 million for finance leases. |
Finance Lease Liability, Maturity | The future minimum rental payments required under operating leases and capitalized lease obligations as of May 3, 2019 having initial or remaining non-cancelable lease terms in excess of one year are summarized as follows: Maturity of lease liabilities Operating Finance (In millions) Leases 1, 3 Leases 2, 3 Total 2019 $ 463 $ 41 $ 504 2020 664 60 724 2021 636 60 696 2022 642 63 705 2023 554 58 612 After 2023 2,934 323 3,257 Total lease payments 5,893 605 6,498 Less: interest 4 (1,329 ) (184 ) (1,513 ) Present value of lease liabilities 5 $ 4,564 $ 421 $ 4,985 1 Operating lease payments include $202 million related to options to extend lease terms that are reasonably certain of being exercised and exclude $107 million of minimum lease payments for leases signed but not yet commenced. 2 Finance lease payments include $19 million related to options to extend lease terms that are reasonably certain of being exercised and exclude $329 million of minimum lease payments for leases signed but not yet commenced. 3 Future minimum rental payments required under operating leases and capitalized lease obligations, as of February 1, 2019, are disclosed in the fiscal year 2018 Annual Report prepared in accordance with Accounting Standards Codification (ASC) 840, Leases. 4 Calculated using the lease-specific incremental borrowing rate. 5 Includes the current portion of $500 million for operating leases and $33 million for finance leases. |
Operating and Finance Lease, Additional Information | Lease Term and Discount Rate May 3, 2019 Weighted-average remaining lease term (years) Operating leases 10.68 Finance leases 11.07 Weighted-average discount rate Operating lease 4.17 % Finance leases 7.48 % Other Information Three Months Ended (In millions) May 3, 2019 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 200 Operating cash flows from finance leases 7 Financing cash flows from finance leases 8 Leased assets obtained in exchange for new finance lease liabilities 3 Leased assets obtained in exchange for new operating lease liabilities 145 |
Schedule of Future Minimum Rental Payments for Operating Leases | These future minimum lease payments were previously disclosed in our 2018 Annual Report on Form 10-K and accounted for under previous lease guidance. Commitments as of February 1, 2019 were as follows: February 1, 2019 Fiscal Year (In millions) Operating Leases Capitalized Lease Obligations Total 2019 $ 595 $ 133 $ 728 2020 605 87 692 2021 564 90 654 2022 519 87 606 2023 473 86 559 Later years 2,609 783 3,392 Total minimum lease payments $ 5,365 $ 1,266 $ 6,631 Less amount representing interest (492 ) Present value of minimum lease payments 774 Less current maturities (65 ) Present value of minimum lease payments, less current maturities $ 709 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 3 Months Ended |
May 03, 2019 | |
Revenue Recognition | |
Sources of Revenue | The following table presents the Company’s sources of revenue: (In millions) Three Months Ended May 3, 2019 May 4, 2018 Products $ 16,900 $ 16,501 Services 554 624 Other 287 235 Net sales $ 17,741 $ 17,360 |
Disaggregation of Revenues | The following table presents the Company’s net sales disaggregated by merchandise division: Three Months Ended May 3, 2019 May 4, 2018 (In millions) Total Sales % Total Sales % Home Décor 1 $ 6,272 36 % $ 6,201 36 % Hardlines 2 5,528 31 5,128 30 Building Products 3 5,524 31 5,524 31 Other 417 2 507 3 Total $ 17,741 100 % $ 17,360 100 % 1 Home Décor includes the following product categories: Appliances, Decor, Flooring, Kitchens & Bath, and Paint 2 Hardlines includes the following product categories: Hardware, Lawn & Garden, Seasonal & Outdoor Living, and Tools 3 Building Products includes the following product categories: Lighting, Lumber & Building Materials, Millwork, and Rough Plumbing & Electrical |
Net Sales Disaggregated by Geographical Area | The following table presents the Company’s net sales disaggregated by geographical area: (In millions) Three Months Ended May 3, 2019 May 4, 2018 United States $ 16,647 $ 16,173 International 1,094 1,187 Net Sales $ 17,741 $ 17,360 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
May 03, 2019 | |
Fair Value Measurements | |
Fair value measurements - recurring basis | The following table presents the Company’s financial assets measured at fair value on a recurring basis as of May 3, 2019 , May 4, 2018 , and February 1, 2019 . The fair values of these instruments approximated amortized costs. Fair Value Measurements at (In millions) Measurement Level May 3, 2019 May 4, 2018 February 1, 2019 Short-term investments: Available-for-sale securities Money market funds Level 1 $ 156 $ 188 $ 207 Agency securities Level 2 22 — 10 Corporate debt securities Level 2 12 — 1 Certificates of deposit Level 1 — 17 — Total short-term investments $ 190 $ 205 $ 218 Long-term investments: Available-for-sale securities Corporate debt securities Level 2 $ 181 $ — $ 191 Agency securities Level 2 28 — 65 U.S. Treasury securities Level 1 26 — — Municipal floating rate obligations Level 2 — 321 — Total long-term investments $ 235 $ 321 $ 256 |
Fair value of financial instruments | Carrying amounts and the related estimated fair value of the Company’s long-term debt, excluding capitalized lease obligations, are as follows: May 3, 2019 May 4, 2018 February 1, 2019 (In millions) Carrying Amount Fair Value Carrying Amount Fair Value Carrying Amount Fair Value Unsecured notes (Level 1) $ 17,090 $ 17,261 $ 14,963 $ 15,151 $ 14,721 $ 14,473 Mortgage notes (Level 2) 6 6 6 7 6 6 Long-term debt (excluding capitalized lease obligations) $ 17,096 $ 17,267 $ 14,969 $ 15,158 $ 14,727 $ 14,479 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 3 Months Ended |
May 03, 2019 | |
Long-Term Debt | |
Schedule of unsecured notes issued | During the first quarter of fiscal 2019 , the Company issued $3.0 billion of unsecured notes as follows: Issue Date Principal Amount (in millions) Maturity Date Fixed vs. Floating Interest Rate Discount (in millions) April 5, 2019 $ 1,500 April 2029 Fixed 3.650% $ 9 April 5, 2019 $ 1,500 April 2049 Fixed 4.550% $ 19 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 3 Months Ended |
May 03, 2019 | |
Shareholders' Equity | |
Schedule of share repurchases | Shares repurchased for the three months ended May 3, 2019 and May 4, 2018 were as follows: Three Months Ended May 3, 2019 May 4, 2018 (In millions) Shares Cost 1 Shares Cost 1 Share repurchase program 8.0 $ 818 8.7 $ 750 Shares withheld from employees 0.1 13 0.1 8 Total share repurchases 8.1 $ 831 8.8 $ 758 1 Reductions of $758 million and $703 million were recorded to retained earnings, after capital in excess of par value was depleted, for the three months ended May 3, 2019 and May 4, 2018 , respectively. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
May 03, 2019 | |
Earnings Per Share | |
Schedule of earnings per share, basic and diluted | The following table reconciles earnings per common share for the three months ended May 3, 2019 and May 4, 2018 : Three Months Ended (In millions, except per share data) May 3, 2019 May 4, 2018 Basic earnings per common share: Net earnings $ 1,046 $ 988 Less: Net earnings allocable to participating securities (3 ) (3 ) Net earnings allocable to common shares, basic $ 1,043 $ 985 Weighted-average common shares outstanding 796 825 Basic earnings per common share $ 1.31 $ 1.19 Diluted earnings per common share: Net earnings $ 1,046 $ 988 Less: Net earnings allocable to participating securities (3 ) (3 ) Net earnings allocable to common shares, diluted $ 1,043 $ 985 Weighted-average common shares outstanding 796 825 Dilutive effect of non-participating share-based awards 1 1 Weighted-average common shares, as adjusted 797 826 Diluted earnings per common share $ 1.31 $ 1.19 |
Supplemental Disclosure (Tables
Supplemental Disclosure (Tables) | 3 Months Ended |
May 03, 2019 | |
Supplemental Disclosure | |
Net interest expense | Net interest expense is comprised of the following: Three Months Ended (In millions) May 3, 2019 May 4, 2018 Long-term debt $ 154 $ 145 Finance lease obligations 7 $ — Capitalized lease obligations — 15 Interest income (7 ) (3 ) Interest capitalized — (1 ) Other 8 4 Interest - net $ 162 $ 160 |
Supplemental disclosures of cash flow information | Supplemental disclosures of cash flow information: Three Months Ended (In millions) May 3, 2019 May 4, 2018 Cash paid for interest, net of amount capitalized 1 $ 287 $ 288 Cash paid for income taxes - net $ 19 $ 43 Non-cash investing and financing activities: Non-cash property acquisitions, including assets acquired under capital lease 1 $ 4 $ 8 Cash dividends declared but not paid $ 382 $ 338 1 Upon adoption of ASU 2016-02, Leases, the Company presents supplemental cash flow disclosures related to its finance and operating leases within Note 3 . |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) - USD ($) $ in Millions | Feb. 02, 2019 | May 03, 2019 | Feb. 01, 2019 | May 04, 2018 | Feb. 02, 2018 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Net lease assets | $ 3,926 | $ 0 | $ 0 | ||
Lease liabilities | 4,564 | ||||
Retained earnings | $ 3,095 | $ 3,452 | $ 5,405 | $ 5,425 | |
ASU 2016-02 | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Net lease assets | $ 3,600 | ||||
Lease liabilities | 3,900 | ||||
Deferred tax impact | 87 | ||||
Retained earnings | $ 263 |
Change in Accounting Principle
Change in Accounting Principle (Details) - USD ($) $ in Millions | 3 Months Ended | |
May 03, 2019 | May 04, 2018 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Cost of sales | $ 12,160 | $ 11,612 |
Selling, general and administrative | 3,862 | 3,934 |
Depreciation and amortization | $ 302 | 349 |
Shipping and Handling Expenses | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Cost of sales | 265 | |
Selling, general and administrative | (255) | |
Depreciation and amortization | $ (10) |
Leases - Narrative (Details)
Leases - Narrative (Details) $ in Millions | 3 Months Ended | ||
May 03, 2019USD ($)option | Feb. 01, 2019USD ($) | May 04, 2018USD ($) | |
Lessee, Lease, Description [Line Items] | |||
Operating and finance lease, renewal terms | 5 years | ||
Amortization of leased assets | $ 8 | ||
Operating lease payments related to options to extend lease terms that are reasonably certain to be exercised | 202 | ||
Minimum lease payments for operating leases signed but not yet commenced | 107 | ||
Finance lease payments related to options to extend lease terms that are reasonably certain to be exercised | 19 | ||
Minimum lease payments for finance leases signed but not yet commenced | 329 | ||
Current operating lease liabilities | 500 | $ 0 | $ 0 |
Current finance lease liabilities | $ 33 | ||
Minimum | |||
Lessee, Lease, Description [Line Items] | |||
Operating and finance lease, term | 5 years | ||
Operating and finance leases, renewal options | option | 4 | ||
Minimum | Equipment | |||
Lessee, Lease, Description [Line Items] | |||
Operating and finance lease, term | 1 year | ||
Maximum | |||
Lessee, Lease, Description [Line Items] | |||
Operating and finance lease, term | 20 years | ||
Operating and finance leases, renewal options | option | 6 | ||
Maximum | Equipment | |||
Lessee, Lease, Description [Line Items] | |||
Operating and finance lease, term | 7 years |
Leases - Balance Sheet Informat
Leases - Balance Sheet Information (Details) - USD ($) $ in Millions | May 03, 2019 | Feb. 01, 2019 | May 04, 2018 |
Assets | |||
Operating lease assets | $ 3,926 | $ 0 | $ 0 |
Finance lease assets | 289 | ||
Total lease assets | 4,215 | ||
Liabilities | |||
Current operating lease liabilities | 500 | 0 | 0 |
Current finance lease liabilities | 33 | ||
Noncurrent operating lease liabilities | 4,064 | $ 0 | $ 0 |
Noncurrent finance lease liabilities | 388 | ||
Total lease liabilities | $ 4,985 |
Leases - Lease Costs (Details)
Leases - Lease Costs (Details) - USD ($) $ in Millions | 3 Months Ended | |
May 03, 2019 | May 04, 2018 | |
Lease Cost | ||
Amortization of leased assets | $ 8 | |
Interest on lease liabilities | 7 | $ 0 |
Operating lease cost | 163 | |
Total lease cost | $ 178 |
Leases - Maturities of Lease Li
Leases - Maturities of Lease Liabilities (Details) $ in Millions | May 03, 2019USD ($) |
Operating Leases | |
2019 | $ 463 |
2020 | 664 |
2021 | 636 |
2022 | 642 |
2023 | 554 |
After 2023 | 2,934 |
Total lease payments | 5,893 |
Less: interest | (1,329) |
Present value of lease liabilities | 4,564 |
Finance Leases | |
Finance Lease, Liability, Payments, Remainder of Fiscal Year | 41 |
Finance Lease, Liability, Payments, Due Year Two | 60 |
Finance Lease, Liability, Payments, Due Year Three | 60 |
Finance Lease, Liability, Payments, Due Year Four | 63 |
Finance Lease, Liability, Payments, Due Year Five | 58 |
After 2023 | 323 |
Total lease payments | 605 |
Less: interest | (184) |
Present value of lease liabilities | 421 |
Operating and Finance Leases | |
2019 | 504 |
2020 | 724 |
2021 | 696 |
2022 | 705 |
2023 | 612 |
After 2023 | 3,257 |
Total lease payments | 6,498 |
Less: interest | (1,513) |
Present value of lease liabilities | $ 4,985 |
Leases - Lease Term and Discoun
Leases - Lease Term and Discount Rate (Details) | May 03, 2019 |
Weighted-average remaining lease term (years) | |
Operating leases (in years) | 10 years 8 months 5 days |
Finance leases (in years) | 11 years 26 days |
Weighted-average discount rate | |
Operating leases | 4.17% |
Finance leases | 7.48% |
Leases - Other Information (Det
Leases - Other Information (Details) $ in Millions | 3 Months Ended |
May 03, 2019USD ($) | |
Leases [Abstract] | |
Operating cash flows from operating leases | $ 200 |
Operating cash flows from finance leases | 7 |
Financing cash flows from finance leases | 8 |
Leased assets obtained in exchange for new finance lease liabilities | 3 |
Leased assets obtained in exchange for new operating lease liabilities | $ 145 |
Leases - Prior Period Disclosur
Leases - Prior Period Disclosures (Details) $ in Millions | Feb. 01, 2019USD ($) |
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | |
2019 | $ 595 |
2020 | 605 |
2021 | 564 |
2022 | 519 |
2023 | 473 |
Later years | 2,609 |
Total minimum lease payments | 5,365 |
Capital Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | |
2019 | 133 |
2020 | 87 |
2021 | 90 |
2022 | 87 |
2023 | 86 |
Later years | 783 |
Total minimum lease payments | 1,266 |
Less amount representing interest | (492) |
Present value of minimum lease payments | 774 |
Less current maturities | (65) |
Present value of minimum lease payments, less current maturities | 709 |
Operating and Capital Leases, Total, Future Minimum Payments Due [Abstract] | |
2019 | 728 |
2020 | 692 |
2021 | 654 |
2022 | 606 |
2023 | 559 |
Later years | 3,392 |
Total minimum lease payments | $ 6,631 |
Revenue Recognition (Details)
Revenue Recognition (Details) - USD ($) $ in Millions | 3 Months Ended | ||
May 03, 2019 | May 04, 2018 | ||
Disaggregation of Revenue [Line Items] | |||
Net sales | $ 17,741 | $ 17,360 | |
Net sales, percentage | 100.00% | 100.00% | |
United States | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | $ 16,647 | $ 16,173 | |
International | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 1,094 | 1,187 | |
Products | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 16,900 | 16,501 | |
Services | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 554 | 624 | |
Other | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 287 | 235 | |
Home Decor | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | [1] | $ 6,272 | $ 6,201 |
Net sales, percentage | [1] | 36.00% | 36.00% |
Hardlines | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | [2] | $ 5,528 | $ 5,128 |
Net sales, percentage | [2] | 31.00% | 30.00% |
Building Products | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | [3] | $ 5,524 | $ 5,524 |
Net sales, percentage | [3] | 31.00% | 31.00% |
Other | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | $ 417 | $ 507 | |
Net sales, percentage | 2.00% | 3.00% | |
[1] | Home Décor includes the following product categories: Appliances, Decor, Flooring, Kitchens & Bath, and Paint | ||
[2] | Hardlines includes the following product categories: Hardware, Lawn & Garden, Seasonal & Outdoor Living, and Tools | ||
[3] | Building Products includes the following product categories: Lighting, Lumber & Building Materials, Millwork, and Rough Plumbing & Electrical |
Revenue Recognition (Details Te
Revenue Recognition (Details Textual) - USD ($) $ in Millions | 3 Months Ended | |
May 03, 2019 | May 04, 2018 | |
Disaggregation of Revenue [Line Items] | ||
Anticipated sales returns | $ 287 | $ 305 |
Right of return assets | 190 | 197 |
Up-front payment arrangement | 935 | 1,000 |
Liability for stored-value cards | 441 | 437 |
Deferred revenue from extended protection plans recognized in sales | 99 | 95 |
Accrual for claims incurred | $ 48 | $ 46 |
Minimum | ||
Disaggregation of Revenue [Line Items] | ||
Extended product warranty term | 1 year | |
Maximum | ||
Disaggregation of Revenue [Line Items] | ||
Extended product warranty term | 5 years |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - Fair Value, Measurements, Recurring - Estimate of Fair Value - USD ($) $ in Millions | May 03, 2019 | Feb. 01, 2019 | May 04, 2018 |
Short-term Investments | |||
Assets, Fair Value Disclosure | |||
Available-for-sale securities, fair value | $ 190 | $ 218 | $ 205 |
Short-term Investments | Money Market Funds | Fair Value (Level 1) | |||
Assets, Fair Value Disclosure | |||
Available-for-sale securities, fair value | 156 | 207 | 188 |
Short-term Investments | Agency securities | Fair Value (Level 2) | |||
Assets, Fair Value Disclosure | |||
Available-for-sale securities, fair value | 22 | 10 | 0 |
Short-term Investments | Corporate debt securities | Fair Value (Level 2) | |||
Assets, Fair Value Disclosure | |||
Corporate debt securities | 12 | 1 | 0 |
Short-term Investments | Certificates Of Deposit | Fair Value (Level 1) | |||
Assets, Fair Value Disclosure | |||
Available-for-sale securities, fair value | 0 | 0 | 17 |
Long-term Investments | |||
Assets, Fair Value Disclosure | |||
Available-for-sale securities, fair value | 235 | 256 | 321 |
Long-term Investments | Agency securities | Fair Value (Level 2) | |||
Assets, Fair Value Disclosure | |||
Available-for-sale securities, fair value | 28 | 65 | 0 |
Long-term Investments | Corporate debt securities | Fair Value (Level 2) | |||
Assets, Fair Value Disclosure | |||
Corporate debt securities | 181 | 191 | 0 |
Long-term Investments | U.S. Treasury securities | Fair Value (Level 2) | |||
Assets, Fair Value Disclosure | |||
Available-for-sale securities, fair value | 26 | 0 | 0 |
Long-term Investments | Municipal floating rate obligations | Fair Value (Level 2) | |||
Assets, Fair Value Disclosure | |||
Available-for-sale securities, fair value | $ 0 | $ 0 | $ 321 |
Fair Value Measurements (Deta_2
Fair Value Measurements (Details 1) - USD ($) $ in Millions | May 03, 2019 | Feb. 01, 2019 | May 04, 2018 |
Financial Instruments | |||
Long-term debt carrying value (excluding capitalized lease obligations) | $ 17,096 | $ 14,727 | $ 14,969 |
Unsecured Notes | |||
Financial Instruments | |||
Long-term debt carrying value (excluding capitalized lease obligations) | 17,090 | 14,721 | 14,963 |
Mortgage Notes | |||
Financial Instruments | |||
Long-term debt carrying value (excluding capitalized lease obligations) | 6 | 6 | 6 |
Estimate of Fair Value | |||
Financial Instruments | |||
Long-term debt fair value (excluding capitalized lease obligations) | 17,267 | 14,479 | 15,158 |
Estimate of Fair Value | Unsecured Notes | Fair Value (Level 1) | |||
Financial Instruments | |||
Long-term debt fair value (excluding capitalized lease obligations) | 17,261 | 14,473 | 15,151 |
Estimate of Fair Value | Mortgage Notes | Fair Value (Level 2) | |||
Financial Instruments | |||
Long-term debt fair value (excluding capitalized lease obligations) | $ 6 | $ 6 | $ 7 |
Restricted Investment Balances
Restricted Investment Balances (Details) - USD ($) $ in Millions | May 03, 2019 | Feb. 01, 2019 | May 04, 2018 |
Restricted Investment Balances | |||
Restricted balances included in short-term investments | $ 190 | $ 218 | $ 188 |
Restricted balances included in long-term investments | $ 235 | $ 256 | $ 298 |
Property (Details)
Property (Details) - USD ($) $ in Billions | May 03, 2019 | Feb. 01, 2019 | May 04, 2018 |
Property | |||
Accumulated depreciation | $ 17.3 | $ 17.4 | $ 17.4 |
Long-Term Debt (Details)
Long-Term Debt (Details) | 3 Months Ended |
May 03, 2019USD ($) | |
Long-Term Debt | |
Unsecured notes, issued | $ 3,000,000,000 |
Unsecured Notes, 3.650% | |
Long-Term Debt | |
Unsecured notes, issued | $ 1,500,000,000 |
Unsecured notes, maturity date | Apr. 5, 2029 |
Unsecured notes, interest rate | 3.65% |
Unamortized discount | $ 9,000,000 |
Unsecured Notes, 4.550% | |
Long-Term Debt | |
Unsecured notes, issued | $ 1,500,000,000 |
Unsecured notes, maturity date | Apr. 5, 2049 |
Unsecured notes, interest rate | 4.55% |
Unamortized discount | $ 19,000,000 |
Long-Term Debt (Details Textual
Long-Term Debt (Details Textual) | 3 Months Ended |
May 03, 2019 | |
2019 Combined Notes | |
Long-Term Debt | |
Debt instrument, redemption price, percentage | 101.00% |
Shareholders' Equity (Details T
Shareholders' Equity (Details Textual) - USD ($) shares in Millions | 1 Months Ended | 3 Months Ended | ||||||||
May 31, 2019 | May 03, 2019 | Mar. 31, 2019 | Feb. 28, 2019 | Nov. 30, 2018 | May 03, 2019 | May 04, 2018 | Dec. 12, 2018 | Jan. 26, 2018 | ||
Share Repurchases | ||||||||||
Repurchase of common stock | $ 826,000,000 | $ 728,000,000 | ||||||||
Share repurchases, shares | 8.1 | 8.8 | ||||||||
Share repurchases, value | [1] | $ 831,000,000 | $ 758,000,000 | |||||||
Share Repurchase Program | ||||||||||
Share Repurchases | ||||||||||
Remaining share repurchases authorization, value | $ 13,100,000,000 | $ 13,100,000,000 | ||||||||
Share repurchases, shares | 8 | 8.7 | ||||||||
Share repurchases, value | [1] | $ 818,000,000 | $ 750,000,000 | |||||||
January 26, 2018 Share Repurchase Authorization | ||||||||||
Share Repurchases | ||||||||||
Share repurchases authorized, value | $ 5,000,000,000 | |||||||||
December 2018 Share Repurchase Authorization | ||||||||||
Share Repurchases | ||||||||||
Share repurchases authorized, value | $ 10,000,000,000 | |||||||||
Open market purchases | ||||||||||
Share Repurchases | ||||||||||
Share repurchases, shares | 4.5 | |||||||||
Share repurchases, value | $ 468,000,000 | |||||||||
Accelerated Share Repurchase | ||||||||||
Share Repurchases | ||||||||||
Share repurchases authorized, value | $ 270,000,000 | |||||||||
Repurchase of common stock | $ 270,000,000 | |||||||||
Share repurchases, shares | 0.3 | 2.6 | ||||||||
Variable Notional ASR Agreement | ||||||||||
Share Repurchases | ||||||||||
Repurchase of common stock | $ 500,000,000 | |||||||||
Share repurchases, shares | 0.3 | 2.9 | ||||||||
Variable Notional ASR Agreement | Subsequent Event | ||||||||||
Share Repurchases | ||||||||||
Cash payment from third-party financial institution | $ 150,000,000 | |||||||||
Variable Notional ASR Agreement | Minimum | ||||||||||
Share Repurchases | ||||||||||
Share repurchases authorized, value | $ 350,000,000 | |||||||||
Variable Notional ASR Agreement | Maximum | ||||||||||
Share Repurchases | ||||||||||
Share repurchases authorized, value | $ 500,000,000 | |||||||||
Variable Notional ASR Agreement | Maximum | Subsequent Event | ||||||||||
Share Repurchases | ||||||||||
Share repurchases authorized, value | $ 500,000,000 | |||||||||
[1] | Reductions of $758 million and $703 million were recorded to retained earnings, after capital in excess of par value was depleted, for the three months ended May 3, 2019 and May 4, 2018, respectively. |
Shareholders' Equity (Details)
Shareholders' Equity (Details) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | ||
May 03, 2019 | May 04, 2018 | ||
Share Repurchases | |||
Share repurchases, shares | 8.1 | 8.8 | |
Share repurchases, value | [1] | $ 831 | $ 758 |
Reduction in retained earnings | $ 758 | $ 703 | |
Share Repurchase Program | |||
Share Repurchases | |||
Share repurchases, shares | 8 | 8.7 | |
Share repurchases, value | [1] | $ 818 | $ 750 |
Shares Withheld from Employees | |||
Share Repurchases | |||
Share repurchases, shares | 0.1 | 0.1 | |
Share repurchases, value | [1] | $ 13 | $ 8 |
[1] | Reductions of $758 million and $703 million were recorded to retained earnings, after capital in excess of par value was depleted, for the three months ended May 3, 2019 and May 4, 2018, respectively. |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
May 03, 2019 | May 04, 2018 | |
Basic earnings per common share: | ||
Net earnings | $ 1,046 | $ 988 |
Less: Net earnings allocable to participating securities | (3) | (3) |
Net earnings allocable to common shares, basic | $ 1,043 | $ 985 |
Weighted-average common shares outstanding (in shares) | 796 | 825 |
Basic earnings per common share (in dollars per share) | $ 1.31 | $ 1.19 |
Diluted earnings per common share: | ||
Net earnings | $ 1,046 | $ 988 |
Less: Net earnings allocable to participating securities | (3) | (3) |
Net earnings allocable to common shares, diluted | $ 1,043 | $ 985 |
Weighted-average common shares outstanding (in shares) | 796 | 825 |
Dilutive effect of non-participating share-based awards (in shares) | 1 | 1 |
Weighted-average common shares, as adjusted (in shares) | 797 | 826 |
Diluted earnings per common share (in dollars per share) | $ 1.31 | $ 1.19 |
Earnings Per Share (Details Tex
Earnings Per Share (Details Textual) - shares shares in Millions | 3 Months Ended | |
May 03, 2019 | May 04, 2018 | |
Earnings Per Share | ||
Anti-dilutive securities | 0.6 | 0.6 |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | |
May 03, 2019 | May 04, 2018 | |
Income Taxes | ||
Effective income tax rate | 16.60% | 24.30% |
Supplemental Disclosure (Detail
Supplemental Disclosure (Details) - USD ($) $ in Millions | 3 Months Ended | |
May 03, 2019 | May 04, 2018 | |
Net interest expense | ||
Long-term debt | $ 154 | $ 145 |
Finance lease obligations | 7 | 0 |
Capitalized lease obligations | 0 | 15 |
Interest income | (7) | (3) |
Interest capitalized | 0 | (1) |
Other | 8 | 4 |
Interest - net | $ 162 | $ 160 |
Supplemental Disclosure (Deta_2
Supplemental Disclosure (Details 1) - USD ($) $ in Millions | 3 Months Ended | |
May 03, 2019 | May 04, 2018 | |
Supplemental disclosures of cash flow information | ||
Cash paid for interest, net of amount capitalized | $ 287 | $ 288 |
Cash paid for income taxes - net | 19 | 43 |
Non-cash investing and financing activities: | ||
Non-cash property acquisitions, including assets acquired under capital lease | 4 | 8 |
Cash dividends declared but not paid | $ 382 | $ 338 |