Lowe's is an American retail company based in Mooresville, Iredell County, North Carolina. The focus of business is on home improvement and household appliances. The company is listed in the Standard & Poorโs 100 stock index.
Lowe's was founded in North Wilkesboro, North Carolina in 1946. The company's shares have been traded on the New York Stock Exchange since 1961. Loweโs has 1,840 stores in 49 states across the United States and around 266,000 employees. The chain is also represented in Canada (33 branches) and Australia. In May 2015, the chain acquired 13 branches from Target Canada. Hardware store chain The Home Depot is Lowe's biggest competitor.
SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED] For the fiscal year ended January 31, 1997 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED] For the transition period from to Commission file number 0-94 LOWE'S COMPANIES, INC. (Exact name of registrant as specified in its charter) NORTH CAROLINA 56-0578072 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) identification No.) P. 0. BOX 1111, NORTH WILKESBORO, N.C. 28656-0001 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (910) 658-4000 Securities registered pursuant to Section 12(b) of the Act: Title of Each Class Name of Each Exchange on Which Registered Common Stock $.50 Par Value New York Stock Exchange Pacific Stock Exchange The Stock Exchange (London) Securities registered pursuant to Section 12(g) of the Act: NONE 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 report(s), and (2) has been subject to such filing requirements for the past 90 days. Yes x , No . Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the 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. [ ] State the aggregate market value of the voting stock held by non-affiliates of the registrant as of April 4, 1997: $5,463,773,846. Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date. Class: COMMON STOCK, $.50 PAR VALUE, Outstanding at April 4, 1997: 173,382,339 shares. Documents Incorporated by Reference Annual Report to Security Holders for fiscal year ended January 31, 1997: Parts I and II. With the exception of specifically referenced information, the Annual Report to Security Holders for the fiscal year ended January 31, 1997 is not to be deemed filed as part of this report. Proxy Statement for Annual Meeting filed April 11, 1997: Part III. Part I Item 1 - Business Reference is made to "Lowe's Profile" and table on the inside back cover and to pages 1, 2, 3, 12 and 13 of the Annual Report to Security Holders for fiscal year ended January 31, 1997. Item 2 - Properties At January 31, 1997, the Company operated 402 stores with a total of 30.4 million square feet of selling space. The current prototype large store is a 100,000 square foot sales floor unit for smaller markets and a 114,000 square foot sales floor unit for medium and larger markets, each with a lawn and garden center comprising approximately 34,000 additional square feet. The Company also operates five distribution centers and twelve smaller support facilities, four of which are reload centers only for lumber and building commodities. Reference is also made to the map and table on the inside back cover and to notes 1, 4, 6 and 13 on pages 28, 29, 30 and 35 of the Annual Report to Security Holders for fiscal year ended January 31, 1997. Item 3 - Legal Proceedings Reference is made to Note 14 on page 35 of the Annual Report to Security Holders for fiscal year ended January 31, 1997. Item 4 - Submission of Matters to a Vote of Security Holders Not applicable. EXECUTIVE OFFICERS OF THE REGISTRANT Pursuant to General Instruction G(3) of Form 10-K, the following list is included as an unnumbered item in Part I of this Report in lieu of being included in the Proxy Statement for the Annual Meeting of Stockholders to be held on May 30, 1997. The following is a list of names and ages of all of the executive officers of the registrant indicating all positions and offices with the registrant held by each such person and each person's principal occupations or employment during the past five years. Robert L. Tillman, 53 President and Chief Executive Officer since 1996; Senior Executive Vice President and Chief Operating Officer, 1994 - 1996; Executive Vice President, Merchandising, 1991-1994; Senior Vice President, Merchandising, 1989-1991. Robert L. Strickland, 66 Chairman of the Board since 1978. Gregory M Bridgeford, 42 Senior Vice President and General Merchandise Manager since 1996; Vice President and General Merchandise Manager, 1994 - 1996; Vice President, Merchandising, 1989 - 1994. Richard D. Elledge, 55 Senior Vice President and Chief Accounting Officer since 1996; Vice President and Chief Accounting Officer, 1981 - 1996; Assistant Secretary since 1991. Lee Herring, 43 Senior Vice President, Logistics since 1996; Vice President, Logistics, 1993 - 1996; Vice President, Merchandising, 1985 - 1993. William L. Irons, 53 Senior Vice President, Management Information Services since 1992; Partner, Ernst & Young, 1987 - 1992. W. Cliff Oxford, 45 Senior Vice President, Corporate and Human Development since 1996; Senior Vice President, Corporate Relations, 1994 - 1996; Vice President, Corporate Relations, 1984 - 1994. Dale C. Pond, 51 Senior Vice President, Marketing since 1993; Senior Vice President, Marketing and New Business Development, Home Quarters Warehouse, Inc., 1991 - 1993. David E. Shelton, 50 Senior Vice President, Real Estate/Engineering and Construction since 1997; Vice President, Store Operations, 1995 - 1997; Vice President, Sales Operations, 1992 - 1995; Vice President, Training, 1986 - 1992. Larry D. Stone, 45 Executive Vice President, Store Operations since 1996; Senior Vice President, Sales Operations, 1995 - 1996; Vice President, General Merchandising, 1992 - 1995; Vice President, Store Merchandising, 1989 - 1992. William C. Warden, Jr., 44 Executive Vice President, General Counsel, Chief Administrative Officer and Secretary since 1996; Senior Vice President, General Counsel and Secretary, 1993 - 1996; Assistant Secretary 1985 - 1993; Partner, McElwee, McElwee & Warden which served as General Counsel for the Company, 1979 - 1993. Gregory J. Wessling, 45 Senior Vice President and General Merchandise Manager since 1996; Vice President and General Merchandise Manager, 1994 - 1996; Vice President, Merchandising, 1989 - 1994. Thomas E. Whiddon, 44 Executive Vice President and Chief Financial Officer since 1996; Senior Vice President and Chief Financial Officer, 1995 - 1996 and Senior Vice President and Treasurer, 1994 - 1995, Zale Corporation; Vice President and Treasurer, Eckerd Corporation, 1986 - 1994; Partner, KPMG, Peat Marwick, 1984 - 1986. Part II Item 5 -Market for the Registrant's Common Stock and Related Security Holder Matters. The principal market for trading in Lowe's common stock is the New York Stock Exchange, Inc. (NYSE). Lowe's common stock is also listed on the Pacific Exchange in the United States and the Stock Exchange in London. The ticker symbol for Lowe's is LOW. As of January 31, 1997, there were 11,460 holders of record of Lowe's common stock. The table, "Lowe's Quarterly Stock Price Range and Cash Dividend Payment", on page 38 of the Annual Report to Security Holders for fiscal year ended January 31, 1997 sets forth, for the periods indicated, the high and low sales prices per share of the common stock as reported by the NYSE Composite Tape, and the dividends per share declared on the common stock during such periods. The Company is party to certain agreements which may limit its ability to declare dividends under certain circumstances. Reference is also made to notes 11 and 12 on pages 33 and 34 of the Annual Report to Security Holders for fiscal year ended January 31, 1997. Item 6 -Selected Financial Data Reference is made to page 37 of the Annual Report to Security Holders for fiscal year ended January 31, 1997. Item 7 -Management's Discussion and Analysis of Financial Condition and Results of Operations. Reference is made to "Management's Discussion and Analysis of Financial Condition and Results of Operations" on pages 21 and 22 of the Annual Report to Security Holders for fiscal year ended January 31, 1997. Item 8 -Financial Statements and Supplementary Data Reference is made to the "Independent Auditors' Report" on page 20 and to the financial statements and notes thereto on pages 25 through 36, and to the "Selected Quarterly Data" on page 37 of the Annual Report to Security Holders for fiscal year ended January 31, 1997. Item 9 - Disagreements on Accounting and Financial Disclosure Not applicable. Part III Item 10 - Directors and Executive Officers of the Registrant Reference is made to "Lowe's Board of Directors" on pages 18 and 19 of the Annual Report to Security Holders for fiscal year ended January 31, 1997, and to Part I - Executive Officers of the Registrant. Item 11 - Executive Compensation Reference is made to "Compensation of Executive Officers", "Option/SAR Grants in Last Fiscal Year", "Aggregated Option/SAR Exercises in Last Fiscal Year and Fiscal Year-end Option/SAR Values", and "Long-term Incentive Plans - Awards in Last Fiscal Year" included in the definitive Proxy Statement which was filed, pursuant to regulation 14A with the SEC on April 11, 1997, and which sections are hereby incorporated by reference. The Company's Executive Compensation Program is comprised of the following elements: Base Salary Salaries for Executive Officers are established on the basis of the qualifications and experience of the executive, the nature of the job responsibilities and salaries for competitive positions in the retailing industry. Executive Officers' base salaries are reviewed annually and are approved by the Committee. Salaries of Executive Officers are compared with those of comparable executive positions in the retailing industry throughout the United States. The Committee uses the median level of base salary as a guideline, in conjunction with the executive's performance and qualifications, for establishing salary levels. 1994 Incentive Plan The 1994 Incentive Plan was adopted to attract, motivate, retain and reward the executives whose leadership and performance are critical to the Company's success in enhancing shareholder value, to place further emphasis on executive ownership of Company Stock and to assure deductibility of executive compensation for federal and state income tax purposes. The 1994 Incentive Plan authorizes the grant of stock options. The option price cannot be less than the market price of the Company's Common Stock on the date on which the option is granted. Consequently, stock options granted under the 1994 Incentive Plan measure performance and create compensation solely on the basis of the appreciation in the price of the Company's Common Stock. Stock appreciation rights (STARs) also may be granted under the 1994 Incentive Plan. STARs entitle the recipient to receive a cash payment based on the appreciation in the Company's Common Stock following the date of the award and, accordingly, measure performance and create compensation only if the price of the Company's Common Stock appreciates. Company Common Stock also may be issued under stock awards pursuant to the 1994 Incentive Plan. All stock awards made through January 31, 1996, were performance accelerated restricted stock (PARS) awards which provide that the shares are subject to forfeiture and are nontransferable for seven years following the award. Accelerated vesting is permitted if the Company achieves certain financial objectives during the three- and five-year periods following the award. Stock awards made as of January 31, 1997, include both PARS and Performance Stock Awards. The President/Chief Executive Officer, the Chairman, and members of the President's staff were granted Performance Stock shares. Other eligible senior and middle managers were granted PARS awards. The Performance Share awards are subject to forfeiture and are nontransferable unless the Company achieves specific performance objectives at the end of a three-year period. The PARS awards are subject to forfeiture and are nontransferable for five years following the award. Accelerated vesting is permitted if the Company achieves certain financial objectives during the three- and four-year periods following the award. The Management Bonus Program is the final component of the 1994 Incentive Plan. The Management Bonus Program provides bonus opportunities which can be earned upon achievement by the Company of preset annual financial goals. No bonuses are paid if performance is below the threshold level of corporate profitability. Additional bonus amounts are earned on a proportionate scale up to 100% of the stated bonus opportunity if the preset financial goals are met. Maximum bonuses were paid for the year ended January 31, 1995, because the Company's financial results exceeded the preset performance goals. A partial bonus equal to 25.669% of the basic bonus opportunity was paid for the year ended January 31, 1996, because financial results exceeded the minimum performance threshold but were below the goals established for full bonus payment. Maximum bonuses were again paid for the year ended January 31, 1997, because the Company's financial performance exceeded the preset performance goals. Proposed 1997 Incentive Plan The 1997 Incentive Plan was approved by the Compensation Committee and the Company's Board of Directors on December 6, 1996, and is submitted for shareholder approval. The purpose of the 1997 Incentive Plan is to provide authorized shares to continue the objectives of the 1994 Incentive Plan: to attract, motivate, retain, and reward the executives whose leadership and performance are critical to the Company's success in enhancing shareholder value, to place further emphasis on executive ownership of Company Stock, and to assure deductibility of executive compensation for federal and state income tax purposes. Benefit Restoration Plan The Benefit Restoration Plan was adopted by the Company in May 1990, to provide qualifying executives with benefits equivalent to those received by all other employees under the Company's basic qualified employee retirement plans. Qualifying executives are those executives whose annual additions and other benefits, as normally provided to all participants under those qualified plans, would be curtailed by Internal Revenue Code restrictions, and who are selected by the Committee to participate in the Plan. The Benefit Restoration Plan benefits are determined annually. Participating executives may elect annually to defer benefits or to receive a current cash payment. Other Compensation The Company's Executive Officers participate in the various qualified and non-qualified employee benefit plans sponsored by the Company. The Company makes only nominal use of perquisites in compensating its Executive Officers. Item 12 - Security Ownership of Certain Beneficial Owners and Management Reference is made to "Security Ownership of Certain Beneficial Owners and Management" included in the definitive Proxy Statement which was filed pursuant to regulation 14A, with the SEC on April 11,1997, and is hereby incorporated by reference. Item 13 - Certain Relationships and Related Transactions Reference is made to "Information About the Board of Directors and Committees of the Board", "Certain Relationships and Related Transactions" included in the definitive Proxy Statement which was filed, pursuant to regulation 14A, with the SEC on April 11,1997, and is hereby incorporated by reference. Part IV Item 14 - Exhibits, Financial Statement Schedules and Reports on Form 8-K a) 1. Financial Statements Reference is made to the following items and page numbers appearing in the Annual Report to Security Holders for fiscal year ended January 31, 1997: Pages Independent Auditors' Report 20 Consolidated Statements of Current and Retained Earnings for each of the fiscal years in the three year period ended January 31, 1997 25 Consolidated Balance Sheets at January 31, 1997, 1996 and 1995 26 Consolidated Statements of Cash Flows for each of the fiscal years in the three-year period ended January 31, 1997 27 Notes to Consolidated Financial Statements for each of the fiscal years in the three-year period ended January 31, 1997 28-36 a) 2. Financial Statement Schedules Schedules are omitted because of the absence of conditions under which they are required or because information required is included in financial statements or the notes thereto. Part IV a) 3. Exhibits (3.1) Restated and Amended Charter (filed as exhibit 3(a) to the Company's Form 8-K dated July 5, 1994 and incorporated by reference herein). (3.2) Bylaws, as amended. (4.1) Rights Agreement dated as of September 9, 1988 between the Company and Wachovia Bank and Trust Co., N.A., as Rights Agent (filed as Exhibit 4.1 to the Company's Form 8-K dated September 9, 1988 and incorporated by reference herein). (10.1) Lowe's Companies, Inc. 1985 Stock Option Plan (filed as Exhibit C to the Company's Proxy Statement dated May 31, 1985 and incorporated by reference herein). (10.2) Post Effective Amendment No. 1 to Lowe's Companies, Inc. 1985 Stock Option Plan (filed on the Company's Form S-8 dated June 23, 1987 (No. 33-2618) and incorporated by reference herein). (10.3) Lowe's Companies, Inc. 1989 Non-Employee Directors' Stock Option Plan (filed as Exhibit A to the Company's Proxy Statement dated June 9, 1989 and incorporated by reference herein). (10.4) Lowe's Companies, Inc. 1990 Benefit Restoration Plan (filed as Exhibit 10.4 to the Company's Annual Report on Form 10-K for the year ended January 31, 1991, and incorporated by reference herein). (10.5) Lowe's Companies, Inc. Stock Appreciation Incentive Plan (filed as Exhibit 10.5 to the Company's Annual Report on Form 10-K for the year ended January 31, 1992, and incorporated by reference herein). (10.6) Indenture dated April 15, 1992 between the Company and Chemical Bank, as Trustee (filed as Exhibit 4.1 to the Company's Registration Statement on Form S-3 (No. 33- 47269) and incorporated by reference herein). (10.7) Indenture dated July 22, 1994 between the Company and Wachovia Bank of North Carolina, N.A., as Trustee (filed as Exhibit 4.1 to the Company's Registration Statement on Form S-3 (No. 33-64560) and incorporated by reference herein). (10.8) Form of Indenture between the Company and Chemical Bank, as Trustee (filed as Exhibit 4.1 to the Company's Registration Statement on Form S-3 (No. 33-51865) and incorporated by reference herein). (10.9) Form of Indenture between the Company and Wachovia Bank of North Carolina, N.A., as Trustee (filed as Exhibit 4.2 to the Company's Registration Statement on Form S-3 (No. 33- 51865) and incorporated by reference herein). (10.10) Lowe's Companies, Inc. Director's Stock Incentive Plan (filed on the Company's Form S-8 dated July 8, 1994 (No. 33-54497) and incorporated by reference herein). (10.11) Lowe's Companies, Inc. 1994 Incentive Plan (filed on the Company's Form S-8 dated July 8, 1994 (No. 33-54499) and incorporated by reference herein). (10.12) Release and Separation Agreement dated November 9, 1995, between the Company and Harry B. Underwood II (filed as Exhibit 10 to the Company's Quarterly Report on Form 10-Q for the period ended October 31, 1995, and incorporated by reference herein). (10.13) Amended and Restated Indenture, dated as of December 1, 1995, between the Company and First National Bank of Chicago, as Trustee (filed as Exhibit 4.1 on Form 8-K dated December 15, 1995, and incorporated by reference herein). (10.14) Form of the Company's 6 3/8 % Senior Note due December 15, 2005 (filed as Exhibit 4.2 on Form 8-K dated December 15, 1995, and incorporated by reference herein). (10.15) Form of Subordinated Indenture between the Company and The Bank of New York, Trustee (filed as Exhibit 4.2 to the Company's Registration Statement on Form S-3 (No. 333- 14257) and incorporated by reference herein). (11) Computation of per share earnings. (12) Statement re computation of ratios (13) Annual Report to Security Holders for fiscal year ended January 31, 1997. (21) List of Subsidiaries. (23) Consent of Deloitte & Touche LLP (27) Financial Data Schedule b) Reports on Form 8-K There were no reports on Form 8-K filed by the registrant during the last quarter of the period covered by this report. Part IV SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. /s/ Lowe's Companies, Inc. Lowe's Companies, Inc. April 25, 1997 By /s/ Robert L. Tillman Robert L. Tillman Date President, Chief Executive Officer and Director April 25, 1997 By: /s/ Thomas E. Whiddon Date Thomas E. Whiddon Executive Vice President and Chief Financial Officer April 25, 1997 By: /s/ Richard D. Elledge Date Richard D. Elledge Senior Vice President, and Chief Accounting Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. Chairman of the Board of /s/ Robert L. Strickland Directors and Director 4/25/97 Robert L. Strickland Date President, Chief Executive /s/ Robert L. Tillman Officer and Director 4/25/97 Robert L. Tillman Date Director William A. Andres Date /s/ John M. Belk Director 4/25/97 John M. Belk Date /s/ Carol A. Farmer Director 4/25/97 Carol A. Farmer Date /s/ Paul Fulton Director 4/25/97 Paul Fulton Date Director James F. Halpin Date /s/ Leonard G. Herring Director 4/25/97 Leonard G. Herring Date /s/ Petro Kulynych Director 4/25/97 Petro Kulynych Date Director Russell B. Long Date /s/ Claudine B. Malone Director 4/25/97 Claudine Malone Date /s/ Robert G. Schwartz Director 4/25/97 Robert G. Schwartz Date