Directions: Answer all the questions. Please submit your work in Word or PDF formats only. You can submit an Excel file to support calculations, but please ?cut and paste? your solutions into the Word or PDF file. Be sure to show how you did your calculations.

Part 1

Perform a vertical and horizontal analysis of Lowes Companies income statements and balance sheets as of January 30, 2015. In performing this analysis, consider any notable trends or changes that you observe that may provide useful information concerning its financial condition. Also use as many years? worth of statements as you feel necessary. You should write up your results in paragraph form.

Part 2

Assess Lowes Companies concerning liquidity, solvency, profitability, and stock performance as of January 30, 2015. For each area, you should calculate the ratios we discussed in class and provide an analysis of the ratios calculated. It would also be helpful to compare Lowes?s ratios with Home Depot?s ratios. I include historical stock price information and outstanding common share information below.

Lowes Companies Inc 10-K Income Statement (Amounts in millions except per share data) Fiscal Year Ended Net Sales Cost of Sales Gross Margin Expenses: Selling, General and Administrative Depreciation Interest - Net Total Expenses Pre-Tax Earnings Income Tax Provision Net Earnings Basic EPS Diluted EPS Dividends Per Share 1/30/2015 1/31/2014 2/1/2013 2/3/2012 $56,223 36,665 19,558 $53,417 34,941 18,476 $50,521 33,194 17,327 $50,208 32,858 17,350 13,281 1,485 516 15,282 4,276 1,578 $2,698 12,865 1,462 476 14,803 3,673 1,387 $2,286 12,244 1,523 423 14,190 3,137 1,178 $1,959 12,593 1,480 371 14,444 2,906 1,067 $1,839 $2.71 $2.71 $0.87 $2.14 $2.14 $0.70 $1.69 $1.69 $0.62 $1.43 $1.43 $0.53 Lowes Companies Inc 10-K Balance Sheet (Amounts in millions except per share data) Fiscal Year Ended ASSETS Current assets: Cash and cash equivalents Short-term investments Merchandise inventories - net Deferred income taxes - net Other current assets Total current assets 1/30/2015 1/31/2014 2/1/2013 2/3/2012 $466 125 8,911 230 348 $10,080 $391 185 9,127 252 341 $10,296 $541 125 8,600 217 301 $9,784 $1,014 286 8,355 183 234 $10,072 Property, less accumulated depreciation Long-term investments Other assets Total assets 20,034 354 1,359 $31,827 20,834 279 1,323 $32,732 21,477 271 1,134 $32,666 21,970 504 1,013 $33,559 LIABILITIES AND SHAREHOLDERS EQUITY Current liabilities: Short-term borrowings Current maturities of long-term debt Accounts payable Accrued compensation & employee benefits Deferred revenue Other current liabilities Total current liabilities $0 552 5,124 773 979 1,920 $9,348 $386 49 5,008 785 892 1,756 $8,876 $0 47 4,657 670 824 1,510 $7,708 $0 592 4,352 613 801 1,533 $7,891 Long-term debt, excluding current maturities Deferred income taxes - net Deferred revenue - extended protection plans Other liabilities Total liabilties 10,815 97 730 869 21,859 10,086 291 730 896 20,879 9,030 455 715 901 18,809 7,035 531 704 865 17,026 Shareholders' equity: Common stock Capital in excess of par value Retained earnings Accumulated other comprehensive income (loss) Total shareholders' equity 480 0 9,591 (103) 9,968 515 0 11,355 (17) 11,853 555 26 13,224 52 13,857 621 14 15,852 46 16,533 $31,827 $32,732 $32,666 $33,559 Total liabilities and shareholders equity Lowes Companies Inc 10-K Statement of Cash Flows (Amounts in millions) Fiscal Year Ended Cash flows from operating activities: Net earnings 1/30/2015 ### 2/1/2013 2/3/2012 $2,698 $2,286 $1,959 $1,839 1,586 (124) 25 57 119 1,562 (162) 64 52 100 1,623 (140) 83 48 100 1,579 54 456 12 107 Changes in operating assets and liabilities: Merchandise inventory - net Other operating assets Accounts payable Other operating liabilities 170 83 127 188 (396) (5) 291 319 (244) (87) 303 117 (33) 125 (5) 215 Net cash provided by operating activities 4,929 4,111 3,762 4,349 Cash flows from investing activities: Purchases of investments Proceeds from sale / maturity of investments Capital expenditures Contributions to equity method investments - net Proceeds from sale of property & other long-term assets Acquisitions of business - net Other - net (820) 805 (880) (241) 52 0 (4) (759) 709 (940) (173) 75 (203) 5 (1,444) 1,837 (1,211) (219) 130 0 4 (1,433) 2,120 (1,829) (232) 52 0 (115) Net cash used in investing activities (1,088) (1,286) (903) (1,437) Cash flows from financing activities: Net change in short-term borrowings Net proceeds from issuance of long-term debt Repayment of long-term debt Proceeds from issuance of common stock under share-based payment plans Cash dividends paid Repurchase of Company stock Other - net (386) 1,239 (48) 137 (822) (3,905) 24 386 985 (47) 165 (733) (3,710) (15) 0 1,984 (591) 349 (704) (4,393) 22 0 993 (37) 100 (647) (2,937) (21) Net cash used in financing activities (3,761) (2,969) (3,333) (2,549) (5) (6) 1 (1) Net (decrease) increase in cash and cash equivalents Cash and cash equivalents at beginning of year 75 391 (150) 541 (473) 1,014 362 652 Cash and cash equivalents at end of year $466 $391 $541 $1,014 Adjustments to reconcile net earnings to net cash provided by operating activities Depreciation and amortization Deferred income taxes Loss on property & other assets - net Loss on equity method investments Share-based payment expense Effect of exchange rates on cash UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended January 30, 2015 or o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to _________ Commission file number 1-7898 LOWE'S COMPANIES, INC. (Exact name of registrant as specified in its charter) NORTH CAROLINA (State or other jurisdiction of incorporation or organization) 56-0578072 (I.R.S. Employer Identification No.) 1000 Lowe's Blvd., Mooresville, NC (Address of principal executive offices) 28117 (Zip Code) Registrant's telephone number, including area code 704-758-1000 Securities registered pursuant to Section 12(b) of the Act: Title of each class Name of each exchange on which registered Common Stock, $0.50 Par Value New York Stock Exchange (NYSE) Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. x Yes o No Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. o Yes x No Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. x Yes o No Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). x Yes o No Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of \"large accelerated filer,\" \"accelerated filer,\" and \"smaller reporting company\" in Rule 12b-2 of the Exchange Act. (Check one): Large accelerated filer x Accelerated filer o Non-accelerated filer o Smaller reporting company o Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). o Yes x No As of August 1, 2014, the last business day of the Company's most recent second quarter, the aggregate market value of the registrant's common stock held by non-affiliates of the registrant was $47.1 billion based on the closing sale price as reported on the New York Stock Exchange. Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date. CLASS OUTSTANDING AT March 27, 2015 Common Stock, $0.50 par value 951,704,640 DOCUMENTS INCORPORATED BY REFERENCE Document Parts Into Which Incorporated Portions of the Proxy Statement for Lowe's 2015 Annual Meeting of Shareholders Part III LOWE'S COMPANIES, INC. - TABLE OF CONTENTS Page No. PART I Item 1. Item 1A. Item 1B. Item 2. Item 3. Item 4. Business Risk Factors Unresolved Staff Comments Properties Legal Proceedings Mine Safety Disclosures Executive Officers and Certain Significant Employees of the Registrant 4 9 13 13 13 13 14 PART II Item 5. Item 6. Item 7. Item 7A. Item 8. Item 9. Item 9A. Item 9B. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Selected Financial Data Management's Discussion and Analysis of Financial Condition and Results of Operations Quantitative and Qualitative Disclosures About Market Risk Financial Statements and Supplementary Data Changes in and Disagreements with Accountants on Accounting and Financial Disclosure Controls and Procedures Other Information 15 16 17 29 31 60 60 60 PART III Item 10. Item 11. Item 12. Item 13. Item 14. Directors, Executive Officers and Corporate Governance Executive Compensation Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Certain Relationships and Related Transactions, and Director Independence Principal Accountant Fees and Services 61 61 61 61 61 PART IV Item 15. Exhibits and Financial Statement Schedules 62 Signatures 71 Table of Contents Part I Item 1 - Business General Information Lowe's Companies, Inc. and subsidiaries (the Company or Lowe's) is a Fortune 100 company and the world's second largest home improvement retailer. As of January 30, 2015, Lowe's operated 1,840 home improvement and hardware stores, representing approximately 201 million square feet of retail selling space. Lowe's is comprised of 1,793 stores located across 50 U.S. states, including 74 Orchard Supply Hardware (Orchard) stores in California and Oregon, as well as 37 stores in Canada, and 10 stores in Mexico. Lowe's was incorporated in North Carolina in 1952 and has been publicly held since 1961. The Company's common stock is listed on the New York Stock Exchange - ticker symbol \"LOW\". See Item 6, \"Selected Financial Data\Lowes Companies Inc 10-K Income Statement (Amounts in millions except per share data) Fiscal Year Ended Net Sales Cost of Sales Gross Margin Expenses: Selling, General and Administrative Depreciation Interest - Net Total Expenses Pre-Tax Earnings Income Tax Provision Net Earnings Basic EPS Diluted EPS Dividends Per Share 1/30/2015 1/31/2014 2/1/2013 2/3/2012 $56,223 36,665 19,558 $53,417 34,941 18,476 $50,521 33,194 17,327 $50,208 32,858 17,350 13,281 1,485 516 15,282 4,276 1,578 $2,698 12,865 1,462 476 14,803 3,673 1,387 $2,286 12,244 1,523 423 14,190 3,137 1,178 $1,959 12,593 1,480 371 14,444 2,906 1,067 $1,839 $2.71 $2.71 $0.87 $2.14 $2.14 $0.70 $1.69 $1.69 $0.62 $1.43 $1.43 $0.53 Lowes Companies Inc 10-K Balance Sheet (Amounts in millions except per share data) Fiscal Year Ended ASSETS Current assets: Cash and cash equivalents Short-term investments Merchandise inventories - net Deferred income taxes - net Other current assets Total current assets 1/30/2015 1/31/2014 2/1/2013 2/3/2012 $466 125 8,911 230 348 $10,080 $391 185 9,127 252 341 $10,296 $541 125 8,600 217 301 $9,784 $1,014 286 8,355 183 234 $10,072 Property, less accumulated depreciation Long-term investments Other assets Total assets 20,034 354 1,359 $31,827 20,834 279 1,323 $32,732 21,477 271 1,134 $32,666 21,970 504 1,013 $33,559 LIABILITIES AND SHAREHOLDERS EQUITY Current liabilities: Short-term borrowings Current maturities of long-term debt Accounts payable Accrued compensation & employee benefits Deferred revenue Other current liabilities Total current liabilities $0 552 5,124 773 979 1,920 $9,348 $386 49 5,008 785 892 1,756 $8,876 $0 47 4,657 670 824 1,510 $7,708 $0 592 4,352 613 801 1,533 $7,891 Long-term debt, excluding current maturities Deferred income taxes - net Deferred revenue - extended protection plans Other liabilities Total liabilties 10,815 97 730 869 21,859 10,086 291 730 896 20,879 9,030 455 715 901 18,809 7,035 531 704 865 17,026 Shareholders' equity: Common stock Capital in excess of par value Retained earnings Accumulated other comprehensive income (loss) Total shareholders' equity 480 0 9,591 (103) 9,968 515 0 11,355 (17) 11,853 555 26 13,224 52 13,857 621 14 15,852 46 16,533 $31,827 $32,732 $32,666 $33,559 Total liabilities and shareholders equity Lowes Companies Inc 10-K Statement of Cash Flows (Amounts in millions) Fiscal Year Ended Cash flows from operating activities: Net earnings 1/30/2015 ### 2/1/2013 2/3/2012 $2,698 $2,286 $1,959 $1,839 1,586 (124) 25 57 119 1,562 (162) 64 52 100 1,623 (140) 83 48 100 1,579 54 456 12 107 Changes in operating assets and liabilities: Merchandise inventory - net Other operating assets Accounts payable Other operating liabilities 170 83 127 188 (396) (5) 291 319 (244) (87) 303 117 (33) 125 (5) 215 Net cash provided by operating activities 4,929 4,111 3,762 4,349 Cash flows from investing activities: Purchases of investments Proceeds from sale / maturity of investments Capital expenditures Contributions to equity method investments - net Proceeds from sale of property & other long-term assets Acquisitions of business - net Other - net (820) 805 (880) (241) 52 0 (4) (759) 709 (940) (173) 75 (203) 5 (1,444) 1,837 (1,211) (219) 130 0 4 (1,433) 2,120 (1,829) (232) 52 0 (115) Net cash used in investing activities (1,088) (1,286) (903) (1,437) Cash flows from financing activities: Net change in short-term borrowings Net proceeds from issuance of long-term debt Repayment of long-term debt Proceeds from issuance of common stock under share-based payment plans Cash dividends paid Repurchase of Company stock Other - net (386) 1,239 (48) 137 (822) (3,905) 24 386 985 (47) 165 (733) (3,710) (15) 0 1,984 (591) 349 (704) (4,393) 22 0 993 (37) 100 (647) (2,937) (21) Net cash used in financing activities (3,761) (2,969) (3,333) (2,549) (5) (6) 1 (1) Net (decrease) increase in cash and cash equivalents Cash and cash equivalents at beginning of year 75 391 (150) 541 (473) 1,014 362 652 Cash and cash equivalents at end of year $466 $391 $541 $1,014 Adjustments to reconcile net earnings to net cash provided by operating activities Depreciation and amortization Deferred income taxes Loss on property & other assets - net Loss on equity method investments Share-based payment expense Effect of exchange rates on cash