Required: 1. Which of the two basic reporting approaches for the cash flows from operating activities did Lowe's use? s Indirect Book Direct 2. What was the main source of cash inflow during the year ended January 31, 2020? Repurchase of common stock Proceeds from issuance of debt Cash provided by operating activities Proceeds from sale/maturity of investments 3. What was the main source of cash outflow during the yuar ended January 31, 2020? Capital expenditures Purchases of investments Repurchase of common stock Repayment of long-term debt LOWE'S COMPANIES, INC. CONSOLIDATED STATEMENTS OF EARNINGS February 1, 2019 "Fiscal 2018" Sales $71,309 100.00% 48,401 67.88 22,908 32.12 February 2, 2018 Fiscal 2017" % Sales $68,619 100.00% 46,185 67.31 22.434 32.69 (In millions, except per share and percentage data) Fiscal Years Ended January 31, 2020 "Fiscal 2019" % Sales Net sales $72,148 100.00% Cost of sales 49,205 68.20 Gross margin 22,943 31.80 Expenses Selling, general and administrative 15.367 21.30 Depreciation and amortization 1.262 1.75 Operating income 6,314 8.75 Interest-net 691 0.96 Loss on extinguishment of debt Pre-tax earnings 5.623 7.79 Income tax provision 1.342 Net earnings $ 4.281 5,93% Basic earnings per common share $ 5.49 Diluted earnings per common share $ 5.49 Cash dividends per share $ 2.13 17,413 1.477 4,018 624 24.41 2.07 5.64 0.88 14.444 1,404 6,586 633 464 5,489 2.042 $ 3,447 21.04 205 9.60 0.92 0.68 8.00 4.76 1.52 2.98 3,394 1,080 $ 2,314 1.86 5.02% $ 2.84 $ 2.84 $ 1.85 $4.09 $ 4.09 S 1.58 February 1, 2019 *Fiscal 2018" % Sales $2,314 3.24% (221) (0.30) February 2, 2018 "Fiscal 2017" % Sales $3,447 5.02% 251 0.37 (In millions, except percentage data) Fiscal Years Ended January 31, 2020 "Fiscal 2019 % Sales Net earnings $4,281 5.93% Forcign currency translation adjustments 94 0.13 net of tax Other (21) (0.03) Other comprehensive incomc/(loss) 73 0.10 Comprehensive income $4,354 6.03% See accompanying notes to consolidated financial statements (220 $2,094 (0.30) 2.94% 251 $3,698 0.37 5.39% (in millions, except par value) January 31, 2020 February 1, 2019 $ 511 218 12,561 938 14,228 18,432 Assets Current assets: Cash and cash equivalents Short-term investments Merchandise inventory.net Other current assets Total current assets Property, less accumulated depreciation Operating lease right-of-use assets Long term investments Deferred income taxes.net Goodwill Other assets Total assets Liabilities and shareholders' equity Current liabilities: Short-term borrowings Current maturities of long-term debt Current operating lease liabilities Accounts payable Accrued compensation and employee benefits Deferred revenue Other current liabilities S 716 160 13,179 1,263 15,318 18,669 3,891 372 216 303 702 $19,471 1 256 294 303 995 $34,508 5 722 1.110 $ 1.941 597 501 7.659 684 1.219 2581 8,279 662 1.299 2425 Current operating lease liabilities Accounts payable Accrued compensation and employee benefits Deferred revenue Other current liabilities Total current liabilities Long-term debt, excluding current maturities Noncurrent operating Icase liabilities Deferred revenue-extended protection plans Other liabilities Total liabilities 501 7.659 684 1.219 2.581 15,182 16,768 3,943 894 712 37,499 8.279 662 1.299 2.425 14,497 14,391 827 1.149 30,864 - 1 Commitments and contingencies Shareholders' equity: Preferred stocks5 par value, none issued Common stock - $0.50 par value; Shures issued and outstanding January 31, 2020 February 1, 2019 Capital in excess of par value Retained carnings Accumulated other comprehensive loss Total shareholders' equity Total liabilities and shareholders' equity 763 801 381 401 1.727 (136) 1.972 $39,471 3,452 (209) 3,644 $34,508 LOWE'S COMPANIES, INC. CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (In millions, except per share data) Common Stock Capital in Excess of Par Value Accumulated Other Comprehensive Income/(Loss) S(240) Retained Earnings $6,241 Shares Amount 866 $433 Total Shareholders Equity $ 6,434 3,447 251 3,447 251 (1,324) 99 (215) (1.324) 99 (3,174) (40) (2.939) Balance February 3, 2017 Net earnings Other comprehensive income Cash dividends declared, $1.58 per share Share-based payment expense Repurchase of common stock Issuance of common stock under share-based payment plans Balance February 2, 2018 Cumulative effect of accounting change Net carnings Other comprehensive loss Cash dividends declared, S1.85 per share Share-based payment expense Repurchase of common stock Issuance of common stock under share-based payment plans Balance February 1, 2019 (20) 12 $415 138 $ 22 8.30 $ 11 $5,425 33 2.314 140 $ 5,873 33 2,314 (220) (1.500) 74 (3,045) (220) (1.500) 74 (209) (32) (16) (2.820) 113 115 $ 3,644 801 $401 $3,452 $(209) (220) (1.500) (220) (1.500) 74 (3,045) 74 (209) (32) (16) (2,820) 113 115 3 801 2 $401 $3,452 S(209) (263) Other comprehensive loss Cash dividends declared, S1.85 per share Share-based payment expense Repurchase of common stock Issuance of common stock under share based payment plans Balance February 1, 2019 Cumulative effect of accounting change Net earnings Other comprehensive income Cash dividends declared, $2.13 per share Share-based payment expense Repurchase of common stock Issuance of common stock under share based payment plans Balance January 31, 2020 4,281 73 $ 3,644 (263) 4,281 73 (1.653) 98 (4,325) (1.653) 98 (214) (21) (4.090) 116 117 3 763 $1,727 $ 1,972 $381 $(136) LOWE'S COMPANIES, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions Fiscal Year Ended January 31, 2020 February 1, 2019 February 2, 2018 "Fiscal 2019 "Fiscal 2018" "Fiscal 2017" $4,281 $ 2,314 $ 3,447 1.607 1.540 1,410 468 177 117 (151) 630 952 53 40 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 1 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: 12 98 9 74 464 (82) 99 (600) (376) (637) (1,289) (110) 1,720 437 6,193 (791) 250 (92) 137 5,065 (654) 4,296 LE (743) 695 (1,484) 163 (1,373) 1,393 (1,174) 76 (981) 1.114 (1.123) 45 (509) 13 (1,441) (1,369) (1.080) (415) 220 3,972 (1,113) 625 2.968 (2,849) (326) 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 Det Othernet 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 1 Repurchase of common Mock Othernet 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 your Cash and cash equivalents, end of year 118 (1.618) (4,313) (1 (2,735) 1 114 (1.455) (3,037) (5) (5,124) (12) 139 (1.288) (3.192) (10) (3,607) 13 30 193 12 205 SI! $ 716 (23) (54) (77) 588 511 90 558 588 220 (415) 3,972 (1.113) 625 2,968 (2.849) (326) 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 Othernet 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: Not 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 118 (1.618) (4,313) (1) (2,735) 1 114 (1,455) (3,037) (5) (5,124) (12) 139 (1.288) (3.192 (10) (3,607 13 30 193 12 205 511 $ 716 (23) (54) (77) 588 $ 511 30 558 $ 588