APPENDIX B Excerpts from the Fiscal 2019 10-K Annual Report of Lowe's Companies, Inc. LOWE'S COMPANIES, INC. CONSOLIDATED STATEMENTS OF EARNINGS (In millions, except per share and percentage data) Fiscal Years Ended January 31, 2020 February 1, 2019 February 2, 2018 "Fiscal 2019" % Sales "Fiscal 2018" %Sales "Fiscal 2017" %Sales Net sales $72,148 100.00% $71,309 100.00% $68,619 100.00% Cost of sales 49,205 68.20 48,401 67.88 46,185 67.31 Gross margin 22,943 31.80 22,908 32.12 22,434 32.69 Expenses: Selling, general and administrative 15.367 21.30 17,413 24.41 14,444 21.04 Depreciation and amortization 1,262 1.75 1,477 2.07 1,404 2.05 Operating income 6.31 8.75 4,018 5.64 6,586 9.60 Interest-net 69T 0.96 624 0.88 633 0.92 Loss on extinguishment of debt 464 0.68 Pre-tax earnings 5,623 7.79 3,394 4.76 5,489 8.00 Income tax provision 1.342 1.86 1,080 1.52 2,042 2.98 Net earnings $ 4,281 5.93% $2,314 3.24% $ 3,447 5.02% Basic earnings per common share $5.49 $2.84 $4.09 Diluted earnings per common share Cash dividends per share $ 5.49 $ 2.84 $4.09 $ 2.13 $ 1.85 $ 1.58 (In millions, except percentage data) LOWE'S COMPANIES, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME Fiscal Years Ended January 31, 2020 "Fiscal 2019" $4,281 % Sales 5.93% February 1, 2019 "Fiscal 2018" % Sales February 2, 2018 "Fiscal 2017" Sales $2,314 3.24% $3,447 5.02% 94 0.13 (221) (0.30) 251 0.37 (21) (0.03) 73 $4,354 0.10 6.03% (220) (0.30) 251 0.37 $2,094 2.94% $3,698 5.39% Net earnings Foreign currency translation adjustments- net of tax Other Other comprehensive income/(loss) Comprehensive income See accompanying notes to consolidated financial statements. 85 (In millions, except par value) LOWE'S COMPANIES, INC. CONSOLIDATED BALANCE SHEETS January 31, 2020 February 1, 2019 Assets Current assets: Cash and cash equivalents Short-term investments Merchandise inventory-net $ 716 160 $ 511 218 13,179 12.561 Other current assets Total current assets 1,263 938 15,318 14,228 Property, less accumulated depreciation 18,669 18,432 Operating lease right-of-use assets Long-term investments Deferred income taxes--net Goodwill 3,891 372 256 216 294 303 303 Other assets 702 995 Total assets $39,471 $34,508 Liabilities and shareholders' equity Current liabilities: Short-term borrowings $1,941 Current maturities of long-term debt 597 $ 722 1,110 Current operating lease liabilities 501 Accounts payable 7,659 8.279 Accrued compensation and employee benefits 684 662 Deferred revenue 1,219 1,299 Other current liabilities 2,581 2,425 Total current liabilities 15,182 14,497 Long-term debt, excluding current maturities 16,768 14,391 Noncurrent operating lease liabilities 3,943 Deferred revenue-extended protection plans 894 827 Other liabilities 712 Total liabilities 37,499 1,149 30,864 Commitments and contingencies Shareholders' equity: Preferred stock-$5 par value, none issued Common stock-$0.50 par value; Shares issued and outstanding January 31, 2020 February 1, 2019 Capital in excess of par value Retained earnings Accumulated other comprehensive loss Total shareholders' equity Total liabilities and shareholders' equity 763 801 381 401 1,727 3,452 (136) (209) 1,972 3,644 $39,471 $34,508 LOWE'S COMPANIES, INC. CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (In millions, except per share data) Balance February 3, 2017 Net earnings Other comprehensive income Cash dividends declared. $1.58 per share Share-based payment expense 866 Common Stock Shares Amount $433 Accumulated Other Capital in Excess of Par Value Retained Comprehensive Earnings Income/(Loss) Total Shareholders' Equity $6,241 $(240) $ 6,434 3,447 251 3,447 251 (1,324) 99 Repurchase of common stock (40) (20) (215) (2,939) (1,324) 99 (3.174) Issuance of common stock under share-based payment plans 4 1381 140 Balance February 2, 2018 830 $415 $ 22 $5,425 $ 11 $ 5,873 Cumulative effect of accounting change 33 33 Net earnings Other comprehensive loss Cash dividends declared, $1.85 per share Share-based payment expense Repurchase of common stock 2,314 2,314 (220) (220) (1,500) (1,500) 74 74 (32) (16) (209) (2,820) (3,045) Issuance of common stock under share-based payment plans 2 113 115 Balance February 1, 2019 801 $401 $3,452 $(209) $3,644 Cumulative effect of accounting change (263) (263) Net earnings 4,281 4,281 Other comprehensive income 73 73 Cash dividends declared, $2.13 per share (1,653) (1,653) Share-based payment expense Repurchase of common stock 98 98 (41) (21) (214) (4,090) (4.325) Issuance of common stock under share-based payment plans Balance January 31, 2020 3 116 117 763 $381 $1,727 $(136) $1,972 See accompanying notes to consolidated financial statements (In millions) LOWE'S COMPANIES, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS Fiscal Year Ended Cash flows from operating activities: Net earnings Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization Noncash lease expense Deferred income taxes Loss on property and other assets-net Impairment of goodwill Loss on extinguishment of debt Loss/(gain) on cost method and equity method investments Share-based payment expense Changes in operating assets and liabilities: Merchandise inventory-net Other operating assets Accounts payable Other operating liabilities Net cash provided by operating activities Cash flows from investing activities: Purchases of investments Proceeds from sale/maturity of investments Capital expenditures Proceeds from sale of property and other long-term assets Acquisition of business-net Other-net Net cash used in investing activities Cash flows from financing activities: Net change in commercial paper Net proceeds from issuance of debt Repayment of long-term debt Proceeds from issuance of common stock under share-based payment plans Cash dividend payments Repurchase of common stock Other-oct Net cash used in financing activities Effect of exchange rate changes on cash Net increase/decrease) in cash and cash equivalents, including cash classified within current assets held for sale Less: Net increase/(decrease) in cash classified within current assets held for sale Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents, beginning of year Cash and cash equivalents, end of year See accompanying notes to consolidated financial statements |$=1 January 31, 2020 "Fiscal 2019" February 1, 2019 "Fiscal 2018" February 2, 2018 "Fiscal 2017" $4,281 $2,314 $3,447 1,607 (151) 630 952 s 1,540 9 74 (1,289) (791) (110) 250 1,720 (92) 437 137 6,193 5,065 (1.373) (981) 1.393 1,114 (1.174) (1,123) 76 45 (509) (2) 13 (1,080) (1,441) (415) 625 (1313) (326) 2,968 (2.849) 114 (1455) 139 (1.288) (3.037) (3.192) (5) (5.124) (10) (3,607) (12) 13 (23) 30 (54) (77) 588 30 558 $ 511 $ 588 Refer to the financial statements of Lowe's Companies, Incorporated in Appendix B (Note: Fiscal 2019 for Lowe's runs from February 2, 2019, to January 31, 2020.) Required: 1. The total cost of Property is $35.945 (million) at January 31, 2020. Use this information, along with other data reported on the balance sheet, to determine the amount of Accumulated Depreciation at January 31, 2020. What percentage is this of the total cost of property? O $17,276 (million): 48.1% O $54,614 (million): 151.9% O $18.432 (million): 51.3% O $1,262 (million): 3.5% 2. What amount of Depreciation and Amortization Expense was reported for the year ended January 31, 2020? What percentage of net soles is it? $1,404 (million); 2.1% O $1,262 (million): 29.5% O $1.262 (million): 1.7% O $1,477 (million): 2.1% 3. What is the fixed asset turnover ratio for the year ended January 31, 2020? O 1.94 3.89 04.29 O 5717