EX-99 3 exhibit991.htm EXHIBIT 99.1 Exhibit 99.1

Exhibit 99.1

LOGO 

February 23, 2004
For 7:00 am EDT Release
Contacts: Shareholders'/Analysts' Inquiries: Media Inquiries:
  Paul Taaffe Chris Ahearn
  704-758-2033 704-758-2304 
 
 
LOWE'S REPORTS RECORD EARNINGS FOR FOURTH QUARTER 
 
-- Fourth Quarter Net Earnings Increased 28 Percent --
 
-- Fourth  Quarter Total Sales Increased 20 Percent --
 
MOORESVILLE, N.C. - Lowe's Companies, Inc. (NYSE: LOW), the world's second largest home improvement retailer, today reported 
net earnings of $407 million for the quarter ended January 30, 2004, a 27.6 percent increase over the same period a year ago.   Diluted earnings 
per share increased 27.5 percent to $0.51 from $0.40 in the fourth quarter of 2002.  For the year ended January 30, 2004, net earnings grew 
27.6 percent to $1.88 billion while diluted earnings per share increased 26.5 percent to $2.34.
 
Sales for the quarter increased 20.1 percent to $7.25 billion, up from $6.04 billion in the fourth quarter of 2002.  Comparable store sales for the 
fourth quarter increased 7.3 percent.  For the year ended January 30, 2004, sales increased 18.1 percent to $30.8 billion.  Comparable store 
sales increased 6.7 percent for fiscal 2003.  All sales figures are from continuing operations and exclude sales from the Contractor Yard 
locations.
 
On January 30, 2004, Lowe's completed the previously announced sale of 26 commodity-focused locations operating under the Contractor 
Yard name.  The Contractor Yard locations are reported as discontinued operations in the Consolidated Statements of Current and Retained 
Earnings.
 
"This year's outstanding results are further evidence that Lowe's strategic course is a proven success," said Robert L. Tillman, Lowe's chairman 
and CEO.  "Our employees' diligent efforts led to what was among the best two-year performances in all of retail.  We're confident we have 
our finger on the pulse of consumer and business trends and will continue to build on our successful operating model to maintain our premier 
position in retailing well into the future."
 
"Despite the weather-driven challenges we faced in the first quarter of 2003, our management team and dedicated employees kept their eye on 
the ball and delivered an outstanding year on top of a phenomenal performance in 2002," explained Lowe's President Robert A. Niblock.  
"We continue to see strong results from our metro-market expansion, and our up-the-continuum merchandising strategy and branding initiatives 
continue to provide our customers the best products and services to meet their home improvement needs.  The key ingredient in this formula 
remains our outstanding customer service, which we continue to deliver in an aspirational store environment."
 
During the quarter, Lowe's opened 47 new stores, including one relocation.  As of January 30, 2004, Lowe's operated 952 stores in 45 states 
representing 108.8 million square feet of retail selling space, a 14.8 percent increase over last year.
 
A conference call to discuss fourth quarter and fiscal year 2003 operating results is scheduled for today (Monday, February 23) at 9:00 a.m. 
EST.  Please dial 888-817-4020 (international callers dial 706-679-3245) to participate.  A webcast of the call will take place simultaneously 
and can be accessed by visiting Lowe's website at www.Lowes.com/investor and clicking on Lowe's Fourth Quarter and Fiscal Year 2003 
Earnings Conference Call Webcast.  A replay of the call will be archived on Lowes.com for 7 days.


Emerging Issues Task Force Issue 02-16
 
 
The impact of Emerging Issues Task Force ("EITF") Issue 02-16, "Accounting by a Customer (including a Reseller) for Certain Consideration 
Received from a Vendor", will be recognized in 2004 and modifies accounting for certain funds received from vendors.
 
Prior to 2004, funds from vendors for co-op advertising and in-store services were allowed to be treated as a direct offset to the associated 
expense.  EITF 02-16 requires retailers to treat certain of these funds as a reduction of cost of goods, recognizing the benefit when the 
inventory is sold.  There is no impact to the timing of when the funds are received from vendors or the associated cash flows, but there is an 
impact to the timing of income recognition.
 
 
 
Lowe's Business Outlook
 
 
This outlook is based on current expectations and includes "forward-looking statements" within the meaning of Section 27A of the Securities 
Act and Section 21E of the Exchange Act.  Although the company believes that comments reflected in such forward-looking statements are 
reasonable, it can give no assurance that such expectations will prove to be correct. 
 
First Quarter 2004 (comparisons to first quarter 2003)

  • The company expects to open 29 stores reflecting square footage growth of approximately 15 percent
  • Total sales are expected to increase 18 to 19 percent
  • The company expects to report comparable store sales of 6 to 7 percent
  • Including the estimated 200 basis point negative impact of adopting EITF 02-16, operating margin (defined as gross margin less SG&A 
    and depreciation) is expected to decline 130 to 140 basis points
  • Store opening costs are expected to be approximately $25 million
  • Including the estimated $0.13 negative impact of adopting EITF 02-16, diluted earnings per share of $0.52 to $0.54 are expected.  
    Excluding the impact of adopting the accounting change, diluted earnings per share of $0.65 to $0.67 would be expected.
  • Lowe's first quarter ends on April 30, 2004 with operating results to be publicly released on Monday, May 17, 2004

Fiscal Year 2004 (comparisons to fiscal year 2003) 

  • The company expects to open 140 stores in 2004 reflecting total square footage growth of approximately 14 percent
  • Total sales are expected to increase approximately 17 percent for the year
  • The company expects to report a comparable store sales increase of 5 to 6 percent
  • Including the estimated 50 basis point negative impact of adopting EITF 02-16, operating margin (defined as gross margin less SG&A 
    and depreciation) is expected to decline 20 to 30 basis points
  • Store opening costs are expected to be approximately $137 million
  • Including the estimated $0.13 negative impact of adopting EITF 02-16, diluted earnings per share of $2.63 to $2.66 are expected for the 
    fiscal year ending January 28, 2005.  Excluding the impact of adopting the accounting change, diluted earnings per share of $2.76 
    to $2.79 would be expected.
 
Fiscal Year 2005 (comparisons to fiscal year 2004) 
  • The company expects to open 150 stores in 2005 reflecting total square footage growth of 13 to 14 percent
  • Total sales are expected to increase approximately 17 percent for the year
  • Operating margin (defined as gross margin less SG&A and depreciation) is expected to increase 40 to 60 basis points
  • Diluted earnings per share of $3.29 to $3.34 are expected for the fiscal year ending January 27, 2006
 
Additional supporting documents detailing the impact of discontinued operations and the effect of implementing EITF 02-16 can be found on 
www.Lowes.com/investor.
 
 
 
 
This news release includes statements, estimates or projections that constitute "forward-looking statements" within the meaning of Section 27A 
of the Securities Act and Section 21E of the Exchange Act.  Although the company believes that comments reflected in such forward-looking 
statements are reasonable, it can give no assurance that such expectations will prove to be correct.  Possible risks and uncertainties regarding 
these statements include, but are not limited to, changes in domestic economic conditions, the availability of real estate for expansion and its 
successful development, particularly in major metropolitan markets, the availability of sufficient labor to facilitate growth, fluctuations in prices 
and availability of product, unanticipated impact of competition, legal or regulatory developments, and weather conditions that affect sales.  
We provide additional information regarding these and other risks and uncertainties in our filings with the Securities and Exchange Commission.  
The forward-looking statements contained in this news release speak only as of this date and we do not assume any obligation to update them.
 
 
 
 
 
With fiscal year 2003 sales of $30.8 billion, Lowe's Companies, Inc. is a FORTUNE 100 company that serves approximately 10 million 
customers a week at more than 950 home improvement stores in 45 states. In 2003, FORTUNE named Lowe's America's Most Admired 
Specialty Retailer. Based in Mooresville, N.C., the 58-year old company is the second-largest home improvement retailer in the world. For 
more information, visit Lowes.com
 
 
###
 
 

Lowe's Companies, Inc.
Consolidated Balance Sheets
In Millions, Except Par Value Data

 

 January 30, 2004

January 31, 2003
Assets
  Current assets:
Cash and cash equivalents $      1,446 $        853
Short-term investments 178 273
Accounts receivable - net 131 172
Merchandise inventory 4,584 3,968
Deferred income taxes 59 58
Other assets 289 244
Total current assets   6,687  5,568
Property, less accumulated depreciation 11,945 10,352
Long-term investments 169 29
Other assets 241 160
Total assets $ 19,042 $ 16,109
Liabilities and Shareholders' Equity
Current liabilities:
Short-term borrowings $         - $       50
Current maturities of long-term debt 77 29
Accounts payable 2,366 1,943
Employee retirement plans 74 88
Accrued salaries and wages 335 306
Other current liabilities 1,516 1,162
Total current liabilities 4,368       3,578
Long-term debt, excluding current maturities        3,678       3,736
Deferred income taxes 657          478
Other long-term liabilities 30              15
Total liabilities      8,733 7,807
Shareholders' equity:
Preferred stock - $5 par value, none issued  -  -
Common stock - $.50 par value;
     Shares Issued and Outstanding
     January 30, 2004 787
     January 31, 2003 782 394 391
Capital in excess of par 2,237 2,023
Retained earnings 7,677 5,887
Accumulated other comprehensive income 1 1
Total shareholders' equity 10,309  8,302
Total liabilities and shareholders' equity $  19,042 $ 16,109

 

Lowe's Companies, Inc.
Consolidated Statements of Current and Retained Earnings
In Millions, Except Per Share Data

 

                                                                      

Three Months Ended

  

Year Ended

January 30, 2004

January 31, 2003

January 30, 2004

January 31, 2003
Current Earnings

Amount

Percent

Amount

Percent

Amount

Percent

Amount

Percent
Net Sales $  7,252 100.00 $  6,037  100.00 $  30,838  100.00 $  26,112  100.00
Cost of Sales 4,931 68.00 4,119 68.23 21,231 68.85 18,164 69.56
Gross Margin 2,321 32.00 1,918 31.77 9,607 31.15 7,948 30.44
Expenses:
Selling, general and administrative 1,378 19.00 1,151 19.07 5,543 17.97 4,676 17.91
Store opening costs 45 0.62 40 0.66 128 0.42 129 0.49
Depreciation 203 2.80 168 2.78 758 2.46 622 2.38
Interest 45 0.62 45 0.75 180 0.58 182 0.70
Total expenses 1,671 23.04 1,404 23.26 6,609 21.43 5,609 21.48
Pre-tax earnings 650 8.96 514 8.51 2,998

9.72

 2,339 8.96
Income tax provision 249 3.43 197 3.26 1,136

3.68

 880 3.38
Earnings from continuing operations $    401

5.53

 $     317

5.25

 $    1,862 6.04 $    1,459

5.58

Earnings from discontinued operations,

net of tax

 6 0.08 2 0.03 15 0.05 12 0.05
               
Net earnings $  407

5.61

 $  319

5.28

 $   1,877

6.09

 $   1,471

5.63
Weighted average shares outstanding - Basic 787 782 785 779
                   
Basic earnings per share:                  
Continuing operations $   0.51   $   0.41     $   2.37   $   1.87  
Discontinued operations 0.01   -     0.02   0.02  
Basic earnings per share $   0.52 $    0.41  $   2.39  $    1.89
                   
Weighted average shares outstanding - Diluted 809 801 806 800
                   
Diluted earnings per share:                  
Continuing operations $   0.50   $   0.40     $   2.32   $   1.83  
Discontinued operations 0.01   -     0.02   0.02  
Diluted earnings per share $   0.51 $    0.40  $   2.34  $    1.85 
Retained Earnings  
Balance at beginning of period $   7,293 $   5,587   $   5,887 $   4,482
Net earnings 407 319 1,877 1,471
Cash dividends         (23)         (19)         (87)         (66)
Balance at end of period $   7,677 $   5,887 $   7,677 $   5,887

 

Lowe's Companies, Inc.
Consolidated Statements of Cash Flows
In Millions

 
Year Ended On

January 30,

2004

January 31,

2003

February 1,

2002
Cash Flows from Operating Activities:

  Net Earnings      $       1,877      $       1,471      $       1,023
  Earnings from discontinued operations, net of tax (15) (12) (13)

  Earnings from continuing operations

 1,862 1,459 1,010

 

Adjustments to Reconcile Earnings from Continuing

Operations to Net Cash Provided By Operating Activities:

Depreciation and Amortization

 781 641 530

Deferred Income Taxes

 178 208 42

Loss on Disposition/Writedown of Fixed and  Other Assets  

 31 18 39

Stock-based Compensation Expense

 41 -  -

Tax Effect of Stock Options Exercised

 31 29 35

Changes in Operating Assets and Liabilities:

Accounts Receivable - Net

 2            (9) (5)

Merchandise Inventory

 (648)           (357) (326)

Other Operating Assets

 (45) (41) (37)

Accounts Payable

 423 228 1

Employee Retirement Plans

 (14) 40 114

Other Operating Liabilities

 399 461 193
Net Cash Provided by Operating Activities from Continuing Operations 3,041 2,677 1,596
Cash Flows from Investing Activities:
Decrease (Increase) in Investment Assets:

Short-Term Investments

 139 (203) (30)

Purchase of Long-Term Investments

 (381)             (24) (1)

Proceeds from Sale/Maturity of Long-Term Investments

 193                  - 3

Increase in Other Long-Term Assets

 (95)             (33) (14)

Fixed Assets Acquired

 (2,444)           (2,359) (2,196)

Proceeds from the Sale of Fixed and Other Long-Term Assets

 45 44 42
Net Cash Used in Investing Activities from Continuing Operations          (2,543)          (2,575) (2,196)
Cash Flows from Financing Activities:
Net Decrease in Short-Term Borrowings (50) (50) (150)
Long-Term Debt Borrowings  -  - 1,087

Repayment of Long-Term Debt

             (29)             (63) (63)

Proceeds from Employee Stock Purchase Plan

51

50

 38

Proceeds from Stock Options Exercised

97

65

 77

Cash Dividend Payments

              (86)              (66) (60)
Net Cash (Used in) Provided by Financing Activities from Continuing Operations (17) (64) 929
 
Net Cash Provided by Discontinued Operations 112 16 14
Net Increase in Cash and Cash Equivalents 593 54 343
Cash and Cash Equivalents, Beginning of Period 853 799 456
Cash and Cash Equivalents, End of Period $         1,446 $         853 $        799