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LOWES COMPANIES INC

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LOWES COMPANIES INC

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0000060667 2009-01-31 2009-07-31 0000060667 2009-08-28 0000060667 2008-08-01 0000060667 2009-07-31 0000060667 2009-01-30 0000060667 2009-05-02 2009-07-31 0000060667 2008-05-03 2008-08-01 0000060667 2009-05-02 0000060667 2008-02-02 2008-08-01 0000060667 2008-05-03 0000060667 2008-02-02 xbrli:shares iso4217:USD xbrli:pure LOWE'S COMPANIES, INC. 0000060667 10-Q 2009-07-31 false Yes No --01-30 Large Accelerated Filer Yes 1477558822 22800000000

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<html><head><meta content="text/html; charset=utf-8" /></head><body><div>Note 1: Basis of Presentation - The accompanying consolidated financial statements (unaudited) and notes to consolidated financial statements (unaudited) are presented in accordance with the rules and regulations of the Securities and Exchange Commission and do not include all the disclosures normally required in annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America. The consolidated financial statements (unaudited), in the opinion of management, contain all adjustments necessary to present fairly the financial position as of July 31, 2009, and August 1, 2008, and the results of operations for the three and six months ended July 31, 2009, and August 1, 2008, and cash flows for the six months ended July 31, 2009 and August 1, 2008. These interim consolidated financial statements (unaudited) should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Lowe's Companies, Inc. (the Company) Annual Report on Form 10-K for the fiscal year ended January 30, 2009 (the Annual Report). The financial results for the interim periods may not be indicative of the financial results for the entire fiscal year. </div></body></html>

<html><head><meta content="text/html; charset=utf-8" /></head><body><div> Note 2: Fair Value Measurements and Financial Instruments - Statement of Financial Accounting Standards (SFAS) No. 157, “Fair Value Measurements,” provides a single definition of fair value, together with a framework for measuring it, and requires additional disclosure about the use of fair value to measure assets and liabilities. SFAS No. 157 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. SFAS No. 157 establishes a three-level hierarchy, which encourages an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The three levels of the hierarchy are defined as follows: Level 1 - inputs to the valuation techniques that are quoted prices in active markets for identical assets or liabilities Level 2 - inputs to the valuation techniques that are other than quoted prices but are observable for the assets or liabilities, either directly or indirectly Level 3 - inputs to the valuation techniques that are unobservable for the assets or liabilities Effective February 2, 2008, the Company adopted SFAS No. 157 for financial assets and liabilities measured at fair value and other non-financial assets and liabilities measured at fair value on a recurring basis. The following tables present the Company’s financial assets measured at fair value on a recurring basis as of July 31, 2009, August 1, 2008, and January 30, 2009, classified by SFAS No. 157 fair value hierarchy: </div><div><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="20" width="183" align="left"> </td><td height="20" width="13" align="left"> </td><td height="20" width="125" align="left"> </td><td height="20" width="13" align="left"> </td><td width="389" align="center" colspan="5" style="border-bottom: 1px solid #000000;" height="20">Fair Value Measurements at Reporting Date Using</td></tr><tr><td width="183" align="left" height="83" rowspan="2"> </td><td height="19" width="13" align="left"> </td><td width="125" align="center" height="83" rowspan="2"> </td><td height="19" width="13" align="center"> </td><td width="121" align="center" rowspan="2" style="border-top: 1px solid #000000;" height="83">Quoted Prices in Active Markets for Identical Assets</td><td height="19" style="border-top: 1px solid #000000;" align="center" width="13"> </td><td width="121" align="center" rowspan="2" style="border-top: 1px solid #000000;" height="83">Significant Other Observable Inputs</td><td height="19" style="border-top: 1px solid #000000;" align="center" width="13"> </td><td width="121" align="center" rowspan="2" style="border-top: 1px solid #000000;" height="83">Significant Unobservable Inputs</td></tr><tr><td height="64" width="13" align="left"> </td><td height="64" width="13" align="center"> </td><td height="64" width="13" align="center"> </td><td height="64" width="13" align="center"> </td></tr><tr><td height="20" style="border-bottom: 1px solid #000000;" align="left" width="183">(In millions)</td><td height="20" style="border-bottom: 1px solid #000000;" align="left" width="13"> </td><td height="20" style="border-bottom: 1px solid #000000;" align="center" width="125">July 31, 2009</td><td height="20" style="border-bottom: 1px solid #000000;" align="center" width="13"> </td><td height="20" style="border-bottom: 1px solid #000000;" align="center" width="121">(Level 1)</td><td height="20" style="border-bottom: 1px solid #000000;" align="center" width="13"> </td><td height="20" style="border-bottom: 1px solid #000000;" align="center" width="121">(Level 2)</td><td height="20" style="border-bottom: 1px solid #000000;" align="center" width="13"> </td><td height="20" style="border-bottom: 1px solid #000000;" align="center" width="121">(Level 3)</td></tr><tr><td height="20" style="border-top: 1px solid #000000;" align="left" width="183">Cash equivalents</td><td height="20" style="border-top: 1px solid #000000;" align="left" width="13"> </td><td height="20" style="border-top: 1px solid #000000;" align="center" width="125"> </td><td height="20" style="border-top: 1px solid #000000;" align="center" width="13"> </td><td height="20" style="border-top: 1px solid #000000;" align="center" width="121"> </td><td height="20" style="border-top: 1px solid #000000;" align="center" width="13"> </td><td height="20" style="border-top: 1px solid #000000;" align="center" width="121"> </td><td height="20" style="border-top: 1px solid #000000;" align="center" width="13"> </td><td height="20" style="border-top: 1px solid #000000;" align="center" width="121"> </td></tr><tr><td height="20" width="183" align="left">Available-for-sale securities</td><td height="20" width="13" align="center">$</td><td height="20" width="125" align="right"> 37 </td><td height="20" width="13" align="center">$</td><td height="20" width="121" align="right"> - </td><td height="20" width="13" align="center">$</td><td height="20" width="121" align="right"> 37 </td><td height="20" width="13" align="center">$</td><td height="20" width="121" align="right"> - </td></tr><tr><td height="20" width="183" align="left">Short-term investments</td><td height="20" width="13" align="left"> </td><td height="20" width="125" align="left"> </td><td height="20" width="13" align="left"> </td><td height="20" width="121" align="left"> </td><td height="20" width="13" align="left"> </td><td height="20" width="121" align="left"> </td><td height="20" width="13" align="left"> </td><td height="20" width="121" align="left"> </td></tr><tr><td height="20" width="183" align="left">Available-for-sale securities</td><td height="20" width="13" align="left"> </td><td height="20" width="125" align="right"> 388 </td><td height="20" width="13" align="left"> </td><td height="20" width="121" align="right"> 68 </td><td height="20" width="13" align="left"> </td><td height="20" width="121" align="right"> 320 </td><td height="20" width="13" align="left"> </td><td height="20" width="121" align="right"> - </td></tr><tr><td height="20" width="183" align="left">Trading securities</td><td height="20" width="13" align="left"> </td><td height="20" width="125" align="right"> 36 </td><td height="20" width="13" align="right"> </td><td height="20" width="121" align="right"> 36 </td><td height="20" width="13" align="right"> </td><td height="20" width="121" align="right"> - </td><td height="20" width="13" align="right"> </td><td height="20" width="121" align="right"> - </td></tr><tr><td height="20" width="183" align="left">Long-term investments</td><td height="20" width="13" align="left"> </td><td height="20" width="125" align="right"> </td><td height="20" width="13" align="right"> </td><td height="20" width="121" align="right"> </td><td height="20" width="13" align="right"> </td><td height="20" width="121" align="right"> </td><td height="20" width="13" align="right"> </td><td height="20" width="121" align="right"> </td></tr><tr><td height="20" style="border-bottom: 1px solid #000000;" align="left" width="183">Available-for-sale securities</td><td height="20" style="border-bottom: 1px solid #000000;" align="left" width="13"> </td><td height="20" style="border-bottom: 1px solid #000000;" align="right" width="125"> 900 </td><td height="20" style="border-bottom: 1px solid #000000;" align="right" width="13"> </td><td height="20" style="border-bottom: 1px solid #000000;" align="right" width="121"> - </td><td height="20" style="border-bottom: 1px solid #000000;" align="right" width="13"> </td><td height="20" style="border-bottom: 1px solid #000000;" align="right" width="121"> 900 </td><td height="20" style="border-bottom: 1px solid #000000;" align="right" width="13"> </td><td height="20" style="border-bottom: 1px solid #000000;" align="right" width="121"> - </td></tr></table></div><div><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="20" width="183" align="left"> </td><td height="20" width="13" align="left"> </td><td height="20" width="125" align="left"> </td><td height="20" width="13" align="left"> </td><td width="389" align="center" colspan="5" style="border-bottom: 1px solid #000000;" height="20">Fair Value Measurements at Reporting Date Using</td></tr><tr><td width="183" align="left" height="83" rowspan="2"> </td><td height="19" width="13" align="left"> </td><td width="125" align="center" height="83" rowspan="2"> </td><td height="19" width="13" align="center"> </td><td width="121" align="center" rowspan="2" style="border-top: 1px solid #000000;" height="83">Quoted Prices in Active Markets for Identical Assets</td><td height="19" style="border-top: 1px solid #000000;" align="center" width="13"> </td><td width="121" align="center" rowspan="2" style="border-top: 1px solid #000000;" height="83">Significant Other Observable Inputs</td><td height="19" style="border-top: 1px solid #000000;" align="center" width="13"> </td><td width="121" align="center" rowspan="2" style="border-top: 1px solid #000000;" height="83">Significant Unobservable Inputs</td></tr><tr><td height="64" width="13" align="left"> </td><td height="64" width="13" align="center"> </td><td height="64" width="13" align="center"> </td><td height="64" width="13" align="center"> </td></tr><tr><td height="20" style="border-bottom: 1px solid #000000;" align="left" width="183">(In millions)</td><td height="20" style="border-bottom: 1px solid #000000;" align="left" width="13"> </td><td height="20" style="border-bottom: 1px solid #000000;" align="center" width="125">August 1, 2008</td><td height="20" style="border-bottom: 1px solid #000000;" align="center" width="13"> </td><td height="20" style="border-bottom: 1px solid #000000;" align="center" width="121">(Level 1)</td><td height="20" style="border-bottom: 1px solid #000000;" align="center" width="13"> </td><td height="20" style="border-bottom: 1px solid #000000;" align="center" width="121">(Level 2)</td><td height="20" style="border-bottom: 1px solid #000000;" align="center" width="13"> </td><td height="20" style="border-bottom: 1px solid #000000;" align="center" width="121">(Level 3)</td></tr><tr><td height="20" style="border-top: 1px solid #000000;" align="left" width="183">Short-term investments</td><td height="20" style="border-top: 1px solid #000000;" align="left" width="13"> </td><td height="20" style="border-top: 1px solid #000000;" align="left" width="125"> </td><td height="20" style="border-top: 1px solid #000000;" align="left" width="13"> </td><td height="20" style="border-top: 1px solid #000000;" align="left" width="121"> </td><td height="20" style="border-top: 1px solid #000000;" align="left" width="13"> </td><td height="20" style="border-top: 1px solid #000000;" align="left" width="121"> </td><td height="20" style="border-top: 1px solid #000000;" align="left" width="13"> </td><td height="20" style="border-top: 1px solid #000000;" align="left" width="121"> </td></tr><tr><td height="20" width="183" align="left">Available-for-sale securities</td><td height="20" width="13" align="center">$</td><td height="20" width="125" align="right">338 </td><td height="20" width="13" align="center">$</td><td height="20" width="121" align="right">109 </td><td height="20" width="13" align="center">$</td><td height="20" width="121" align="right">229 </td><td height="20" width="13" align="center">$</td><td height="20" width="121" align="right"> - </td></tr><tr><td height="20" width="183" align="left">Trading securities</td><td height="20" width="13" align="left"> </td><td height="20" width="125" align="right">39 </td><td height="20" width="13" align="right"> </td><td height="20" width="121" align="right">39 </td><td height="20" width="13" align="right"> </td><td height="20" width="121" align="right"> - </td><td height="20" width="13" align="right"> </td><td height="20" width="121" align="right"> - </td></tr><tr><td height="20" width="183" align="left">Long-term investments</td><td height="20" width="13" align="left"> </td><td height="20" width="125" align="right"> </td><td height="20" width="13" align="right"> </td><td height="20" width="121" align="right"> </td><td height="20" width="13" align="right"> </td><td height="20" width="121" align="right"> </td><td height="20" width="13" align="right"> </td><td height="20" width="121" align="right"> </td></tr><tr><td height="20" style="border-bottom: 1px solid #000000;" align="left" width="183">Available-for-sale securities</td><td height="20" style="border-bottom: 1px solid #000000;" align="left" width="13"> </td><td height="20" style="border-bottom: 1px solid #000000;" align="right" width="125">798 </td><td height="20" style="border-bottom: 1px solid #000000;" align="right" width="13"> </td><td height="20" style="border-bottom: 1px solid #000000;" align="right" width="121"> - </td><td height="20" style="border-bottom: 1px solid #000000;" align="right" width="13"> </td><td height="20" style="border-bottom: 1px solid #000000;" align="right" width="121">798 </td><td height="20" style="border-bottom: 1px solid #000000;" align="right" width="13"> </td><td height="20" style="border-bottom: 1px solid #000000;" align="right" width="121"> - </td></tr></table></div><div><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="20" width="183" align="left"> </td><td height="20" width="13" align="left"> </td><td height="20" width="125" align="left"> </td><td height="20" width="13" align="left"> </td><td width="388" align="center" colspan="5" style="border-bottom: 1px solid #000000;" height="20">Fair Value Measurements at Reporting Date Using</td></tr><tr><td width="183" align="left" height="83" rowspan="2"> </td><td height="19" width="13" align="left"> </td><td width="125" align="center" height="83" rowspan="2"> </td><td height="19" width="13" align="center"> </td><td width="121" align="center" rowspan="2" style="border-top: 1px solid #000000;" height="83">Quoted Prices in Active Markets for Identical Assets</td><td height="19" style="border-top: 1px solid #000000;" align="center" width="13"> </td><td width="121" align="center" rowspan="2" style="border-top: 1px solid #000000;" height="83">Significant Other Observable Inputs</td><td height="19" style="border-top: 1px solid #000000;" align="center" width="13"> </td><td width="120" align="center" rowspan="2" style="border-top: 1px solid #000000;" height="83">Significant Unobservable Inputs</td></tr><tr><td height="64" width="13" align="left"> </td><td height="64" width="13" align="center"> </td><td height="64" width="13" align="center"> </td><td height="64" width="13" align="center"> </td></tr><tr><td height="20" style="border-bottom: 1px solid #000000;" align="left" width="183">(In millions)</td><td height="20" style="border-bottom: 1px solid #000000;" align="left" width="13"> </td><td height="20" style="border-bottom: 1px solid #000000;" align="center" width="125">January 30, 2009</td><td height="20" style="border-bottom: 1px solid #000000;" align="center" width="13"> </td><td height="20" style="border-bottom: 1px solid #000000;" align="center" width="121">(Level 1)</td><td height="20" style="border-bottom: 1px solid #000000;" align="center" width="13"> </td><td height="20" style="border-bottom: 1px solid #000000;" align="center" width="121">(Level 2)</td><td height="20" style="border-bottom: 1px solid #000000;" align="center" width="13"> </td><td height="20" style="border-bottom: 1px solid #000000;" align="center" width="120">(Level 3)</td></tr><tr><td height="20" style="border-top: 1px solid #000000;" align="left" width="183">Short-term investments</td><td height="20" style="border-top: 1px solid #000000;" align="left" width="13"> </td><td height="20" style="border-top: 1px solid #000000;" align="left" width="125"> </td><td height="20" style="border-top: 1px solid #000000;" align="left" width="13"> </td><td height="20" style="border-top: 1px solid #000000;" align="left" width="121"> </td><td height="20" style="border-top: 1px solid #000000;" align="left" width="13"> </td><td height="20" style="border-top: 1px solid #000000;" align="left" width="121"> </td><td height="20" style="border-top: 1px solid #000000;" align="left" width="13"> </td><td height="20" style="border-top: 1px solid #000000;" align="left" width="120"> </td></tr><tr><td height="20" width="183" align="left">Available-for-sale securities</td><td height="20" width="13" align="center">$</td><td height="20" width="125" align="right">385 </td><td height="20" width="13" align="center">$</td><td height="20" width="121" align="right">81 </td><td height="20" width="13" align="center">$</td><td height="20" width="121" align="right">304 </td><td height="20" width="13" align="center">$</td><td height="20" width="120" align="right"> - </td></tr><tr><td height="20" width="183" align="left">Trading securities</td><td height="20" width="13" align="left"> </td><td height="20" width="125" align="right">31 </td><td height="20" width="13" align="right"> </td><td height="20" width="121" align="right">31 </td><td height="20" width="13" align="right"> </td><td height="20" width="121" align="right"> - </td><td height="20" width="13" align="right"> </td><td height="20" width="120" align="right"> - </td></tr><tr><td height="20" width="183" align="left">Long-term investments</td><td height="20" width="13" align="left"> </td><td height="20" width="125" align="right"> </td><td height="20" width="13" align="right"> </td><td height="20" width="121" align="right"> </td><td height="20" width="13" align="right"> </td><td height="20" width="121" align="right"> </td><td height="20" width="13" align="right"> </td><td height="20" width="120" align="right"> </td></tr><tr><td height="20" style="border-bottom: 1px solid #000000;" align="left" width="183">Available-for-sale securities</td><td height="20" style="border-bottom: 1px solid #000000;" align="left" width="13"> </td><td height="20" style="border-bottom: 1px solid #000000;" align="right" width="125">253 </td><td height="20" style="border-bottom: 1px solid #000000;" align="right" width="13"> </td><td height="20" style="border-bottom: 1px solid #000000;" align="right" width="121"> - </td><td height="20" style="border-bottom: 1px solid #000000;" align="right" width="13"> </td><td height="20" style="border-bottom: 1px solid #000000;" align="right" width="121">253 </td><td height="20" style="border-bottom: 1px solid #000000;" align="right" width="13"> </td><td height="20" style="border-bottom: 1px solid #000000;" align="right" width="120"> - </td></tr></table></div><div>When available, quoted prices are used to determine fair value. When quoted prices in active markets are available, investments are classified within Level 1 of the fair value hierarchy. The Company’s Level 1 investments primarily consist of investments in money market and mutual funds. When quoted prices in active markets are not available, fair values are determined using pricing models and the inputs to those pricing models are based on observable market inputs. The inputs to the pricing models are typically benchmark yields, reported trades, broker-dealer quotes, issuer spreads and benchmark securities, among others. The Company’s Level 2 investments primarily consist of investments in municipal obligations. Effective January 31, 2009, the Company adopted SFAS No. 157 for non-financial assets and liabilities measured at fair value on a non-recurring basis. The Company reviews the carrying amounts of long-lived assets whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable. If the carrying amount is not recoverable, an impairment is recorded for the amount that the carrying amount of the asset exceeds its fair value. The Company bases the fair values of long-lived assets held-for-use on the Company’s own judgments about the assumptions that market participants would use in pricing the asset and on observable market data, when available. During the second quarter of 2009, certain long-lived assets, consisting primarily of excess properties, classified as held-for-use with a carrying value of $69 million were written down to their fair value resulting in an impairment charge of $25 million which was recorded in SG&A expense. The impairment charge was primarily attributable to the Company’s re-evaluation of the pipeline of potential future store sites and the decision to no longer pursue several projects. For the six months ended July 31, 2009, impairment charges of $30 million were recorded in SG&A expense. The following table presents the Company’s non-financial assets measured at fair value on a non-recurring basis during the second quarter of 2009, classified by SFAS No. 157 fair value hierarchy: </div><div><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="20" width="120" align="left"> </td><td height="20" width="14" align="left"> </td><td height="20" width="113" align="center"> </td><td height="20" width="14" align="center"> </td><td width="459" align="center" colspan="7" style="border-bottom: 1px solid #000000;" height="20">Fair Value Measurements Using</td></tr><tr><td width="120" align="left" height="100" rowspan="3"> </td><td width="14" align="left" height="100" rowspan="3"> </td><td height="19" width="113" align="center"> </td><td width="14" align="center" height="100" rowspan="3"> </td><td width="105" align="center" rowspan="3" style="border-top: 1px solid #000000;" height="100">Quoted Prices in Active Markets for Identical Assets</td><td width="14" align="center" rowspan="3" style="border-top: 1px solid #000000;" height="100"> </td><td width="104" align="center" rowspan="3" style="border-top: 1px solid #000000;" height="100">Significant Other Observable Inputs</td><td width="14" align="center" rowspan="3" style="border-top: 1px solid #000000;" height="100"> </td><td width="104" align="center" rowspan="3" style="border-top: 1px solid #000000;" height="100">Significant Unobservable Inputs</td><td width="14" align="center" rowspan="3" style="border-top: 1px solid #000000;" height="100"> </td><td width="104" align="center" rowspan="3" style="border-top: 1px solid #000000;" height="100">Total Gains</td></tr><tr><td height="55" width="113" align="center"> </td></tr><tr><td height="26" width="113" align="center">Quarter Ended</td></tr><tr><td height="20" style="border-bottom: 1px solid #000000;" align="left" width="120">(In millions)</td><td height="20" style="border-bottom: 1px solid #000000;" align="left" width="14"> </td><td height="20" style="border-bottom: 1px solid #000000;" align="center" width="113">July 31, 2009</td><td height="20" style="border-bottom: 1px solid #000000;" align="center" width="14"> </td><td height="20" style="border-bottom: 1px solid #000000;" align="center" width="105">(Level 1)</td><td height="20" style="border-bottom: 1px solid #000000;" align="center" width="14"> </td><td height="20" style="border-bottom: 1px solid #000000;" align="center" width="104">(Level 2)</td><td height="20" style="border-bottom: 1px solid #000000;" align="center" width="14"> </td><td height="20" style="border-bottom: 1px solid #000000;" align="center" width="104">(Level 3)</td><td height="20" style="border-bottom: 1px solid #000000;" align="center" width="14"> </td><td height="20" style="border-bottom: 1px solid #000000;" align="center" width="104">(Losses)</td></tr><tr><td width="120" align="left" rowspan="2" style="border-top: 1px solid #000000;" height="39">Long-lived assets held-for-use</td><td width="14" align="center" rowspan="2" style="border-top: 1px solid #000000;" height="39">$</td><td width="113" align="right" rowspan="2" style="border-top: 1px solid #000000;" height="39"> 44 </td><td width="14" align="center" rowspan="2" style="border-top: 1px solid #000000;" height="39">$</td><td width="105" align="right" rowspan="2" style="border-top: 1px solid #000000;" height="39"> - </td><td width="14" align="center" rowspan="2" style="border-top: 1px solid #000000;" height="39">$</td><td width="104" align="right" rowspan="2" style="border-top: 1px solid #000000;" height="39"> - </td><td width="14" align="center" rowspan="2" style="border-top: 1px solid #000000;" height="39">$</td><td width="104" align="right" rowspan="2" style="border-top: 1px solid #000000;" height="39"> 44 </td><td width="14" align="center" rowspan="2" style="border-top: 1px solid #000000;" height="39">$</td><td width="104" align="right" rowspan="2" style="border-top: 1px solid #000000;" height="39">(25)</td></tr><tr></tr></table></div><div>In the determination of impairment for excess properties, the fair values are the estimated selling prices. The Company determines the estimated selling prices by obtaining information from brokers in the specific markets being evaluated. The information includes comparable sales of similar assets and assumptions about demand in the market for these assets. Effective July 31, 2009, the Company adopted FASB Staff Position (FSP) FAS 107-1 and APB 28-1, “Interim Disclosures about Fair Value of Financial Instruments”. FSP FAS 107-1 and APB 28-1 requires that the fair value of all financial assets and liabilities for which it is practicable to estimate fair value and are within the scope of SFAS 107, “Disclosures about Fair Value of Financial Instruments”, be disclosed for interim and annual periods. The Company’s financial instruments not measured at fair value on a recurring basis include cash and certain cash equivalents, accounts receivable, short-term borrowings, accounts payable, accrued liabilities and long-term debt and are reflected in the financial statements at cost. With the exception of long-term debt, cost approximates fair value for these items due to their short-term nature. Estimated fair values for long-term debt have been determined using available market information, including reported trades, benchmark yields and broker-dealer quotes. Carrying amounts and the related estimated fair value of the Company’s long-term debt, excluding capital leases and other, are as follows: </div><div><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="20" width="183" align="left"> </td><td height="20" width="13" align="left"> </td><td width="259" align="center" colspan="3" style="border-bottom: 1px solid #000000;" height="20">July 31, 2009</td><td height="20" width="10" align="center"> </td></tr><tr><td height="20" width="183" align="left"> </td><td height="20" width="13" align="left"> </td><td height="20" style="border-top: 1px solid #000000;" align="center" width="125">Carrying</td><td height="20" style="border-top: 1px solid #000000;" align="center" width="13"> </td><td height="20" style="border-top: 1px solid #000000;" align="center" width="121">Fair</td><td height="20" width="10" align="center"> </td></tr><tr><td height="20" style="border-bottom: 1px solid #000000;" align="left" width="183">(In millions)</td><td height="20" style="border-bottom: 1px solid #000000;" align="left" width="13"> </td><td height="20" style="border-bottom: 1px solid #000000;" align="center" width="125">Amount</td><td height="20" style="border-bottom: 1px solid #000000;" align="center" width="13"> </td><td height="20" style="border-bottom: 1px solid #000000;" align="center" width="121">Value</td><td height="20" width="10" align="center"> </td></tr><tr><td height="38" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="left" width="183">Long-term debt (excluding capital leases and other)</td><td height="38" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="center" width="13">$</td><td height="38" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="right" width="125">4,736 </td><td height="38" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="center" width="13">$</td><td height="38" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="right" width="121">5,133 </td><td height="38" width="10" align="right"> </td></tr></table></div></body></html>

<html><head><meta content="text/html; charset=utf-8" /></head><body><div>Note 3: Restricted Investment Balances - Short-term and long-term investments include restricted balances pledged as collateral for letters of credit for the Company’s extended warranty program and for a portion of the Company’s casualty insurance and Installed Sales program liabilities. Restricted balances included in short-term investments were $188 million at July 31, 2009, $194 million at August 1, 2008, and $214 million at January 30, 2009. Restricted balances included in long-term investments were $192 million at July 31, 2009, $152 million at August 1, 2008, and $143 million at January 30, 2009. </div></body></html>

<html><head><meta content="text/html; charset=utf-8" /></head><body><div>Note 4: Property - Property is shown net of accumulated depreciation of $9.3 billion at July 31, 2009, $8.2 billion at August 1, 2008, and $8.8 billion at January 30, 2009.</div></body></html>

<html><head><meta content="text/html; charset=utf-8" /></head><body><div>Note 5: Extended Warranties - Lowe’s sells separately-priced extended warranty contracts under a Lowe’s-branded program for which the Company is ultimately self-insured. The Company recognizes revenue from extended warranty sales on a straight-line basis over the respective contract term. Extended warranty contract terms primarily range from one to four years from the date of purchase or the end of the manufacturer’s warranty, as applicable. The Company’s extended warranty deferred revenue is included in other liabilities (non-current) on the consolidated balance sheets. Changes in deferred revenue for extended warranty contracts are summarized as follows:</div><div><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="20" width="238" align="left"> </td><td height="20" width="14" align="left"> </td><td width="224" align="center" colspan="3" style="border-bottom: 1px solid #000000;" height="20">Three Months Ended</td><td height="20" style="border-bottom: 1px solid #000000;" align="center" width="4"> </td><td height="20" style="border-bottom: 1px solid #000000;" align="left" width="14"> </td><td width="224" align="center" colspan="3" style="border-bottom: 1px solid #000000;" height="20">Six Months Ended</td></tr><tr><td height="20" style="border-bottom: 1px solid #000000;" align="left" width="238">(In millions)</td><td width="119" align="center" colspan="2" style="border-bottom: 1px solid #000000;" height="20">July 31, 2009</td><td width="119" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="20">August 1, 2008</td><td height="20" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="center" width="4"> </td><td width="119" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="20">July 31, 2009</td><td width="119" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="20">August 1, 2008</td></tr><tr><td height="40" style="border-top: 1px solid #000000;" align="left" width="238">Extended warranty deferred revenue, beginning of period</td><td height="40" style="border-top: 1px solid #000000;" align="center" width="14">$</td><td height="40" style="border-top: 1px solid #000000;" align="right" width="105"> 496 </td><td height="40" style="border-top: 1px solid #000000;" align="center" width="14">$</td><td height="40" style="border-top: 1px solid #000000;" align="right" width="105"> 430 </td><td height="40" style="border-top: 1px solid #000000;" align="right" width="4"> </td><td height="40" style="border-top: 1px solid #000000;" align="center" width="14">$</td><td height="40" style="border-top: 1px solid #000000;" align="right" width="105"> 479 </td><td height="40" style="border-top: 1px solid #000000;" align="center" width="14">$</td><td height="40" style="border-top: 1px solid #000000;" align="right" width="105"> 407 </td></tr><tr><td height="20" width="238" align="left">Additions to deferred revenue</td><td height="20" width="14" align="left"> </td><td height="20" width="105" align="right"> 62 </td><td height="20" width="14" align="left"> </td><td height="20" width="105" align="right"> 56 </td><td height="20" width="4" align="right"> </td><td height="20" width="14" align="left"> </td><td height="20" width="105" align="right"> 114 </td><td height="20" width="14" align="right"> </td><td height="20" width="105" align="right"> 105 </td></tr><tr><td height="20" width="238" align="left">Deferred revenue recognized</td><td height="20" width="14" align="left"> </td><td height="20" width="105" align="right"> (37)</td><td height="20" width="14" align="left"> </td><td height="20" width="105" align="right"> (30)</td><td height="20" width="4" align="right"> </td><td height="20" width="14" align="left"> </td><td height="20" width="105" align="right"> (72)</td><td height="20" width="14" align="right"> </td><td height="20" width="105" align="right"> (56)</td></tr><tr><td height="40" style="border-bottom: 1px solid #000000;" align="left" width="238">Extended warranty deferred revenue, end of period</td><td height="40" style="border-bottom: 1px solid #000000;" align="center" width="14">$</td><td height="40" style="border-bottom: 1px solid #000000;" align="right" width="105"> 521 </td><td height="40" style="border-bottom: 1px solid #000000;" align="center" width="14">$</td><td height="40" style="border-bottom: 1px solid #000000;" align="right" width="105"> 456 </td><td height="40" style="border-bottom: 1px solid #000000;" align="right" width="4"> </td><td height="40" style="border-bottom: 1px solid #000000;" align="center" width="14">$</td><td height="40" style="border-bottom: 1px solid #000000;" align="right" width="105"> 521 </td><td height="40" style="border-bottom: 1px solid #000000;" align="center" width="14">$</td><td height="40" style="border-bottom: 1px solid #000000;" align="right" width="105"> 456 </td></tr></table></div><div>Incremental direct acquisition costs associated with the sale of extended warranties are also deferred and recognized as expense on a straight-line basis over the respective contract term. Deferred costs associated with extended warranty contracts were $137 million at July 31, 2009, $109 million at August 1, 2008, and $121 million at January 30, 2009. The Company’s extended warranty deferred costs are included in other assets (non-current) on the consolidated balance sheets. All other costs, such as costs of services performed under the contract, general and administrative expenses and advertising expenses, are expensed as incurred. The liability for extended warranty claims incurred is included in self-insurance liabilities on the consolidated balance sheets. Changes in the liability for extended warranty claims are summarized as follows: </div><div><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="20" width="240" align="left"> </td><td height="20" style="border-bottom: 1px solid #000000;" align="left" width="14"> </td><td width="223" align="center" colspan="3" style="border-bottom: 1px solid #000000;" height="20">Three Months Ended</td><td height="20" style="border-bottom: 1px solid #000000;" align="center" width="5"> </td><td height="20" style="border-bottom: 1px solid #000000;" align="left" width="14"> </td><td width="222" align="center" colspan="3" style="border-bottom: 1px solid #000000;" height="20">Six Months Ended</td></tr><tr><td height="20" style="border-bottom: 1px solid #000000;" align="left" width="240">(In millions)</td><td width="118" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="20">July 31, 2009</td><td width="119" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="20">August 1, 2008</td><td height="20" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="center" width="5"> </td><td width="118" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="20">July 31, 2009</td><td width="118" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="20">August 1, 2008</td></tr><tr><td height="40" style="border-top: 1px solid #000000;" align="left" width="240">Liability for extended warranty claims, beginning of period</td><td height="40" style="border-top: 1px solid #000000;" align="left" width="14">$</td><td height="40" style="border-top: 1px solid #000000;" align="right" width="104"> 18 </td><td height="40" style="border-top: 1px solid #000000;" align="left" width="14">$</td><td height="40" style="border-top: 1px solid #000000;" align="right" width="105"> 12 </td><td height="40" style="border-top: 1px solid #000000;" align="right" width="5"> </td><td height="40" style="border-top: 1px solid #000000;" align="center" width="14">$</td><td height="40" style="border-top: 1px solid #000000;" align="right" width="104"> 17 </td><td height="40" style="border-top: 1px solid #000000;" align="left" width="14">$</td><td height="40" style="border-top: 1px solid #000000;" align="right" width="104"> 14 </td></tr><tr><td height="20" width="240" align="left">Accrual for claims incurred </td><td height="20" width="14" align="left"> </td><td height="20" width="104" align="right"> 17 </td><td height="20" width="14" align="left"> </td><td height="20" width="105" align="right"> 13 </td><td height="20" width="5" align="right"> </td><td height="20" width="14" align="left"> </td><td height="20" width="104" align="right"> 30 </td><td height="20" width="14" align="right"> </td><td height="20" width="104" align="right"> 25 </td></tr><tr><td height="20" width="240" align="left">Claim payments</td><td height="20" width="14" align="left"> </td><td height="20" width="104" align="right"> (14)</td><td height="20" width="14" align="left"> </td><td height="20" width="105" align="right"> (8)</td><td height="20" width="5" align="left"> </td><td height="20" width="14" align="left"> </td><td height="20" width="104" align="right"> (26)</td><td height="20" width="14" align="left"> </td><td height="20" width="104" align="right"> (22)</td></tr><tr><td height="40" style="border-bottom: 1px solid #000000;" align="left" width="240">Liability for extended warranty claims, end of period</td><td height="40" style="border-bottom: 1px solid #000000;" align="center" width="14">$</td><td height="40" style="border-bottom: 1px solid #000000;" align="right" width="104"> 21 </td><td height="40" style="border-bottom: 1px solid #000000;" align="center" width="14">$</td><td height="40" style="border-bottom: 1px solid #000000;" align="right" width="105"> 17 </td><td height="40" style="border-bottom: 1px solid #000000;" align="right" width="5"> </td><td height="40" style="border-bottom: 1px solid #000000;" align="center" width="14">$</td><td height="40" style="border-bottom: 1px solid #000000;" align="right" width="104"> 21 </td><td height="40" style="border-bottom: 1px solid #000000;" align="center" width="14">$</td><td height="40" style="border-bottom: 1px solid #000000;" align="right" width="104"> 17 </td></tr></table></div></body></html>

<html><head><meta content="text/html; charset=utf-8" /></head><body><div>Note 6: Comprehensive Income - Comprehensive income represents changes in shareholders’ equity from non-owner sources and is comprised of net earnings plus or minus unrealized gains or losses on available-for-sale securities and foreign currency translation adjustments. The following table reconciles net earnings to comprehensive income for the three and six months ended July 31, 2009, and August 1, 2008. </div><div><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="21" width="309" align="left"> </td><td width="213" align="center" colspan="4" style="border-bottom: 1px solid #000000;" height="21">Three Months Ended</td><td height="21" style="border-bottom: 1px solid #000000;" align="center" width="14"> </td><td width="199" align="center" colspan="3" style="border-bottom: 1px solid #000000;" height="21">Six Months Ended</td></tr><tr><td height="20" style="border-bottom: 1px solid #000000;" align="left" width="309">(In millions)</td><td width="106" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="20">July 31, 2009</td><td width="107" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="20">August 1, 2008</td><td width="106" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="20">July 31, 2009</td><td width="107" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="20">August 1, 2008</td></tr><tr><td height="20" style="border-top: 1px solid #000000;" align="left" width="309">Net earnings</td><td height="20" style="border-top: 1px solid #000000;" align="center" width="14">$</td><td height="20" style="border-top: 1px solid #000000;" align="right" width="92"> 759 </td><td height="20" style="border-top: 1px solid #000000;" align="center" width="14">$</td><td height="20" style="border-top: 1px solid #000000;" align="right" width="93"> 938 </td><td height="20" style="border-top: 1px solid #000000;" align="center" width="14">$</td><td height="20" style="border-top: 1px solid #000000;" align="right" width="92"> 1,235 </td><td height="20" style="border-top: 1px solid #000000;" align="center" width="14">$</td><td height="20" style="border-top: 1px solid #000000;" align="right" width="93"> 1,545 </td></tr><tr><td height="20" width="309" align="left">Foreign currency translation adjustments</td><td height="20" width="14" align="center"> </td><td height="20" width="92" align="right"> 39 </td><td height="20" width="14" align="center"> </td><td height="20" width="93" align="right"> 1 </td><td height="20" width="14" align="center"> </td><td height="20" width="92" align="right"> 50 </td><td height="20" width="14" align="center"> </td><td height="20" width="93" align="right"> 1 </td></tr><tr><td height="20" width="309" align="left">Net unrealized investment gains (losses)</td><td height="20" width="14" align="center"> </td><td height="20" width="92" align="right"> 2 </td><td height="20" width="14" align="center"> </td><td height="20" width="93" align="right"> 2 </td><td height="20" width="14" align="center"> </td><td height="20" width="92" align="right"> 2 </td><td height="20" width="14" align="center"> </td><td height="20" width="93" align="right"> (1)</td></tr><tr><td height="19" style="border-bottom: 1px solid #000000;" align="left" width="309">Comprehensive income</td><td height="19" style="border-bottom: 1px solid #000000;" align="center" width="14">$</td><td height="19" style="border-bottom: 1px solid #000000;" align="right" width="92"> 800 </td><td height="19" style="border-bottom: 1px solid #000000;" align="center" width="14">$</td><td height="19" style="border-bottom: 1px solid #000000;" align="right" width="93"> 941 </td><td height="19" style="border-bottom: 1px solid #000000;" align="center" width="14">$</td><td height="19" style="border-bottom: 1px solid #000000;" align="right" width="92"> 1,287 </td><td height="19" style="border-bottom: 1px solid #000000;" align="center" width="14">$</td><td height="19" style="border-bottom: 1px solid #000000;" align="right" width="93"> 1,545 </td></tr></table></div></body></html>

<html><head><meta content="text/html; charset=utf-8" /></head><body><div>Note 7: Earnings Per Share - The Company adopted FSP EITF 03-6-1, “Determining Whether Instruments Granted in Share-Based Payment Transactions are Participating Securities,” effective January 31, 2009. FSP EITF 03-6-1 states that all outstanding unvested share-based payment awards that contain rights to nonforfeitable dividends participate in undistributed earnings with common shareholders and, therefore, need to be included in the earnings allocation in computing earnings per share under the two-class method. The retrospective application of the provisions of FSP EITF 03-6-1 reduced previously reported diluted earnings per share by $0.01 for the three and six months ended August 1, 2008. Under the two-class method, net earnings are reduced by the amount of dividends declared in the period for each class of common stock and participating security. The remaining undistributed earnings are then allocated to common stock and participating securities as if all of the net earnings for the period had been distributed. Basic earnings per common share excludes dilution and is calculated by dividing net earnings allocable to common shares by the weighted-average number of common shares outstanding for the period. Diluted earnings per common share is calculated by dividing net earnings allocable to common shares by the weighted-average number of common shares as of the balance sheet date, as adjusted for the potential dilutive effect of non-participating share-based awards and convertible notes. The following table reconciles earnings per common share for the three and six months ended July 31, 2009, and August 1, 2008.</div><div><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="21" width="297" align="left"> </td><td width="213" align="center" colspan="4" style="border-bottom: 1px solid #000000;" height="21">Three Months Ended</td><td height="21" style="border-bottom: 1px solid #000000;" align="center" width="14"> </td><td width="199" align="center" colspan="3" style="border-bottom: 1px solid #000000;" height="21">Six Months Ended</td></tr><tr><td height="20" style="border-bottom: 1px solid #000000;" align="left" width="297">(In millions, except per share data)</td><td width="106" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="20">July 31, 2009</td><td width="107" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="20">August 1, 2008</td><td width="106" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="20">July 31, 2009</td><td width="107" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="20">August 1, 2008</td></tr><tr><td height="20" style="border-top: 1px solid #000000;" align="left" width="297">Basic earnings per common share:</td><td height="20" style="border-top: 1px solid #000000;" align="left" width="14"> </td><td height="20" style="border-top: 1px solid #000000;" align="left" width="92"> </td><td height="20" style="border-top: 1px solid #000000;" align="left" width="14"> </td><td height="20" style="border-top: 1px solid #000000;" align="left" width="93"> </td><td height="20" style="border-top: 1px solid #000000;" align="left" width="14"> </td><td height="20" style="border-top: 1px solid #000000;" align="left" width="92"> </td><td height="20" style="border-top: 1px solid #000000;" align="left" width="14"> </td><td height="20" style="border-top: 1px solid #000000;" align="left" width="93"> </td></tr><tr><td height="20" width="297" align="left">Net earnings</td><td height="20" width="14" align="center">$</td><td height="20" width="92" align="right"> 759 </td><td height="20" width="14" align="center">$</td><td height="20" width="93" align="right"> 938 </td><td height="20" width="14" align="center">$</td><td height="20" width="92" align="right"> 1,235 </td><td height="20" width="14" align="center">$</td><td height="20" width="93" align="right"> 1,545 </td></tr><tr><td height="20" width="297" align="left">Less: Net earnings allocable to participating securities</td><td height="20" width="14" align="center"> </td><td height="20" width="92" align="right"> (6)</td><td height="20" width="14" align="center"> </td><td height="20" width="93" align="right"> (5)</td><td height="20" width="14" align="center"> </td><td height="20" width="92" align="right"> (10)</td><td height="20" width="14" align="center"> </td><td height="20" width="93" align="right"> (8)</td></tr><tr><td height="19" width="297" align="left">Net earnings allocable to common shares</td><td height="19" width="14" align="center">$</td><td height="19" width="92" align="right"> 753 </td><td height="19" width="14" align="center">$</td><td height="19" width="93" align="right"> 933 </td><td height="19" width="14" align="center">$</td><td height="19" width="92" align="right"> 1,225 </td><td height="19" width="14" align="center">$</td><td height="19" width="93" align="right"> 1,537 </td></tr><tr><td height="19" width="297" align="left">Weighted-average common shares outstanding</td><td height="19" width="14" align="center"> </td><td height="19" width="92" align="right"> 1,464 </td><td height="19" width="14" align="center"> </td><td height="19" width="93" align="right"> 1,455 </td><td height="19" width="14" align="center"> </td><td height="19" width="92" align="right"> 1,463 </td><td height="19" width="14" align="center"> </td><td height="19" width="93" align="right"> 1,454 </td></tr><tr><td height="19" style="border-bottom: 1px solid #000000;" align="left" width="297">Basic earnings per common share</td><td height="19" style="border-bottom: 1px solid #000000;" align="center" width="14">$</td><td height="19" style="border-bottom: 1px solid #000000;" align="right" width="92"> 0.51 </td><td height="19" style="border-bottom: 1px solid #000000;" align="center" width="14">$</td><td height="19" style="border-bottom: 1px solid #000000;" align="right" width="93"> 0.64 </td><td height="19" style="border-bottom: 1px solid #000000;" align="center" width="14">$</td><td height="19" style="border-bottom: 1px solid #000000;" align="right" width="92"> 0.84 </td><td height="19" style="border-bottom: 1px solid #000000;" align="center" width="14">$</td><td height="19" style="border-bottom: 1px solid #000000;" align="right" width="93"> 1.06 </td></tr><tr><td height="20" style="border-top: 1px solid #000000;" align="left" width="297">Diluted earnings per common share:</td><td height="20" style="border-top: 1px solid #000000;" align="center" width="14"> </td><td height="20" style="border-top: 1px solid #000000;" align="left" width="92"> </td><td height="20" style="border-top: 1px solid #000000;" align="center" width="14"> </td><td height="20" style="border-top: 1px solid #000000;" align="left" width="93"> </td><td height="20" style="border-top: 1px solid #000000;" align="center" width="14"> </td><td height="20" style="border-top: 1px solid #000000;" align="left" width="92"> </td><td height="20" style="border-top: 1px solid #000000;" align="center" width="14"> </td><td height="20" style="border-top: 1px solid #000000;" align="left" width="93"> </td></tr><tr><td height="20" width="297" align="left">Net earnings</td><td height="20" width="14" align="center">$</td><td height="20" width="92" align="right"> 759 </td><td height="20" width="14" align="center">$</td><td height="20" width="93" align="right"> 938 </td><td height="20" width="14" align="center">$</td><td height="20" width="92" align="right"> 1,235 </td><td height="20" width="14" align="center">$</td><td height="20" width="93" align="right"> 1,545 </td></tr><tr><td height="40" width="297" align="left">Net earnings adjustment for interest on convertible notes, net of tax</td><td height="40" width="14" align="center"> </td><td height="40" width="92" align="right"> - </td><td height="40" width="14" align="center"> </td><td height="40" width="93" align="right"> - </td><td height="40" width="14" align="center"> </td><td height="40" width="92" align="right"> - </td><td height="40" width="14" align="center"> </td><td height="40" width="93" align="right"> 1 </td></tr><tr><td height="20" width="297" align="left">Net earnings, as adjusted</td><td height="20" width="14" align="center"> </td><td height="20" width="92" align="right"> 759 </td><td height="20" width="14" align="center"> </td><td height="20" width="93" align="right"> 938 </td><td height="20" width="14" align="center"> </td><td height="20" width="92" align="right"> 1,235 </td><td height="20" width="14" align="center"> </td><td height="20" width="93" align="right"> 1,546 </td></tr><tr><td height="20" width="297" align="left">Less: Net earnings allocable to participating securities</td><td height="20" width="14" align="center"> </td><td height="20" width="92" align="right"> (6)</td><td height="20" width="14" align="center"> </td><td height="20" width="93" align="right"> (5)</td><td height="20" width="14" align="center"> </td><td height="20" width="92" align="right"> (10)</td><td height="20" width="14" align="center"> </td><td height="20" width="93" align="right"> (8)</td></tr><tr><td height="19" width="297" align="left">Net earnings allocable to common shares</td><td height="19" width="14" align="center">$</td><td height="19" width="92" align="right"> 753 </td><td height="19" width="14" align="center">$</td><td height="19" width="93" align="right"> 933 </td><td height="19" width="14" align="center">$</td><td height="19" width="92" align="right"> 1,225 </td><td height="19" width="14" align="center">$</td><td height="19" width="93" align="right"> 1,538 </td></tr><tr><td height="20" width="297" align="left">Weighted-average common shares outstanding</td><td height="20" width="14" align="center"> </td><td height="20" width="92" align="right"> 1,464 </td><td height="20" width="14" align="center"> </td><td height="20" width="93" align="right"> 1,455 </td><td height="20" width="14" align="center"> </td><td height="20" width="92" align="right"> 1,463 </td><td height="20" width="14" align="center"> </td><td height="20" width="93" align="right"> 1,454 </td></tr><tr><td height="20" width="297" align="left">Dilutive effect of non-participating share-based awards</td><td height="20" width="14" align="center"> </td><td height="20" width="92" align="right"> 2 </td><td height="20" width="14" align="center"> </td><td height="20" width="93" align="right"> 2 </td><td height="20" width="14" align="center"> </td><td height="20" width="92" align="right"> 2 </td><td height="20" width="14" align="center"> </td><td height="20" width="93" align="right"> 2 </td></tr><tr><td height="20" width="297" align="left">Dilutive effect of convertible notes</td><td height="20" width="14" align="center"> </td><td height="20" width="92" align="right"> - </td><td height="20" width="14" align="center"> </td><td height="20" width="93" align="right"> 13 </td><td height="20" width="14" align="center"> </td><td height="20" width="92" align="right"> - </td><td height="20" width="14" align="center"> </td><td height="20" width="93" align="right"> 17 </td></tr><tr><td height="19" width="297" align="left">Weighted-average common shares, as adjusted</td><td height="19" width="14" align="center"> </td><td height="19" width="92" align="right"> 1,466 </td><td height="19" width="14" align="center"> </td><td height="19" width="93" align="right"> 1,470 </td><td height="19" width="14" align="center"> </td><td height="19" width="92" align="right"> 1,465 </td><td height="19" width="14" align="center"> </td><td height="19" width="93" align="right"> 1,473 </td></tr><tr><td height="19" style="border-bottom: 1px solid #000000;" align="left" width="297">Diluted earnings per common share</td><td height="19" style="border-bottom: 1px solid #000000;" align="center" width="14">$</td><td height="19" style="border-bottom: 1px solid #000000;" align="right" width="92"> 0.51 </td><td height="19" style="border-bottom: 1px solid #000000;" align="center" width="14">$</td><td height="19" style="border-bottom: 1px solid #000000;" align="right" width="93"> 0.63 </td><td height="19" style="border-bottom: 1px solid #000000;" align="center" width="14">$</td><td height="19" style="border-bottom: 1px solid #000000;" align="right" width="92"> 0.84 </td><td height="19" style="border-bottom: 1px solid #000000;" align="center" width="14">$</td><td height="19" style="border-bottom: 1px solid #000000;" align="right" width="93"> 1.04 </td></tr></table></div><div>Stock options to purchase 21.5 million and 22.1 million shares of common stock were excluded from the computation of diluted earnings per common share because their effect would have been anti-dilutive for the three months ended July 31, 2009, and August 1, 2008, respectively. Stock options to purchase 24.7 million and 18.0 million shares of common stock were excluded from the computation of diluted earnings per common share because their effect would have been anti-dilutive for the six months ended July 31, 2009, and August 1, 2008, respectively. </div></body></html>

<html><head><meta content="text/html; charset=utf-8" /></head><body><div> Note 8: Supplemental Disclosure </div><div><table style="border-collapse: collapse; margin-top: 20px;"><tr><td width="668" align="left" height="20" colspan="10">Net interest expense is comprised of the following:</td></tr><tr><td height="17" width="173" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="107" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="107" align="left"> </td><td height="17" width="11" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="107" align="left"> </td><td height="17" width="14" align="left"> </td><td height="17" width="107" align="left"> </td></tr><tr><td height="20" width="173" align="left"> </td><td width="242" align="center" colspan="4" style="border-bottom: 1px solid #000000;" height="20">Three Months Ended</td><td height="20" style="border-bottom: 1px solid #000000;" align="center" width="11"> </td><td width="242" align="center" colspan="4" style="border-bottom: 1px solid #000000;" height="20">Six Months Ended</td></tr><tr><td height="20" style="border-bottom: 1px solid #000000;" align="left" width="173">(In millions)</td><td width="121" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="20">July 31, 2009</td><td width="121" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="20">August 1, 2008</td><td height="20" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" align="center" width="11"> </td><td width="121" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="20">July 31, 2009</td><td width="121" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="20">August 1, 2008</td></tr><tr><td height="20" style="border-top: 1px solid #000000;" align="left" width="173">Long-term debt</td><td height="20" style="border-top: 1px solid #000000;" align="right" width="14">$</td><td height="20" style="border-top: 1px solid #000000;" align="right" width="107"> 73 </td><td height="20" style="border-top: 1px solid #000000;" align="right" width="14">$</td><td height="20" style="border-top: 1px solid #000000;" align="right" width="107"> 73 </td><td height="20" style="border-top: 1px solid #000000;" align="left" width="11"> </td><td height="20" style="border-top: 1px solid #000000;" align="right" width="14">$</td><td height="20" style="border-top: 1px solid #000000;" align="right" width="107"> 146 </td><td height="20" style="border-top: 1px solid #000000;" align="right" width="14">$</td><td height="20" style="border-top: 1px solid #000000;" align="right" width="107"> 146 </td></tr><tr><td height="20" width="173" align="left">Short-term borrowings</td><td height="20" width="14" align="right"> </td><td height="20" width="107" align="right"> - </td><td height="20" width="14" align="right"> </td><td height="20" width="107" align="right"> 2 </td><td height="20" width="11" align="left"> </td><td height="20" width="14" align="right"> </td><td height="20" width="107" align="right"> 2 </td><td height="20" width="14" align="right"> </td><td height="20" width="107" align="right"> 7 </td></tr><tr><td height="20" width="173" align="left">Capitalized leases</td><td height="20" width="14" align="right"> </td><td height="20" width="107" align="right"> 7 </td><td height="20" width="14" align="right"> </td><td height="20" width="107" align="right"> 7 </td><td height="20" width="11" align="left"> </td><td height="20" width="14" align="right"> </td><td height="20" width="107" align="right"> 14 </td><td height="20" width="14" align="right"> </td><td height="20" width="107" align="right"> 16 </td></tr><tr><td height="20" width="173" align="left">Interest income</td><td height="20" width="14" align="right"> </td><td height="20" width="107" align="right"> (5)</td><td height="20" width="14" align="right"> </td><td height="20" width="107" align="right"> (12)</td><td height="20" width="11" align="left"> </td><td height="20" width="14" align="right"> </td><td height="20" width="107" align="right"> (10)</td><td height="20" width="14" align="right"> </td><td height="20" width="107" align="right"> (21)</td></tr><tr><td height="20" width="173" align="left">Interest capitalized</td><td height="20" width="14" align="right"> </td><td height="20" width="107" align="right"> (4)</td><td height="20" width="14" align="right"> </td><td height="20" width="107" align="right"> (7)</td><td height="20" width="11" align="left"> </td><td height="20" width="14" align="right"> </td><td height="20" width="107" align="right"> (8)</td><td height="20" width="14" align="right"> </td><td height="20" width="107" align="right"> (15)</td></tr><tr><td height="20" width="173" align="left">Other</td><td height="20" width="14" align="right"> </td><td height="20" width="107" align="right"> 5 </td><td height="20" width="14" align="right"> </td><td height="20" width="107" align="right"> 6 </td><td height="20" width="11" align="left"> </td><td height="20" width="14" align="right"> </td><td height="20" width="107" align="right"> 10 </td><td height="20" width="14" align="right"> </td><td height="20" width="107" align="right"> 12 </td></tr><tr><td height="19" style="border-bottom: 1px solid #000000;" align="left" width="173">Interest - net</td><td height="19" style="border-bottom: 1px solid #000000;" align="right" width="14">$</td><td height="19" style="border-bottom: 1px solid #000000;" align="right" width="107"> 76 </td><td height="19" style="border-bottom: 1px solid #000000;" align="right" width="14">$</td><td height="19" style="border-bottom: 1px solid #000000;" align="right" width="107"> 69 </td><td height="19" style="border-bottom: 1px solid #000000;" align="left" width="11"> </td><td height="19" style="border-bottom: 1px solid #000000;" align="right" width="14">$</td><td height="19" style="border-bottom: 1px solid #000000;" align="right" width="107"> 154 </td><td height="19" style="border-bottom: 1px solid #000000;" align="right" width="14">$</td><td height="19" style="border-bottom: 1px solid #000000;" align="right" width="107"> 145 </td></tr></table></div><div><table style="border-collapse: collapse; margin-top: 20px;"><tr><td height="20" width="437" align="left">Supplemental disclosures of cash flow information: </td><td height="20" width="18" align="left"> </td><td height="20" width="108" align="left"> </td><td height="20" width="16" align="left"> </td><td height="20" width="108" align="left"> </td></tr><tr><td height="20" width="437" align="left"> </td><td height="20" width="18" align="left"> </td><td height="20" width="108" align="left"> </td><td height="20" width="16" align="left"> </td><td height="20" width="108" align="left"> </td></tr><tr><td height="20" width="437" align="left"> </td><td width="250" align="center" colspan="4" style="border-bottom: 1px solid #000000;" height="20">Six Months Ended</td></tr><tr><td height="20" style="border-bottom: 1px solid #000000;" align="left" width="437">(In millions)</td><td width="126" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="20">July 31, 2009</td><td width="124" align="center" colspan="2" style="border-top: 1px solid #000000;border-bottom: 1px solid #000000;" height="20">August 1, 2008</td></tr><tr><td height="20" style="border-top: 1px solid #000000;" align="left" width="437">Cash paid for interest, net of amount capitalized</td><td height="20" style="border-top: 1px solid #000000;" align="right" width="18">$</td><td height="20" style="border-top: 1px solid #000000;" align="right" width="108"> 155 </td><td height="20" style="border-top: 1px solid #000000;" align="right" width="16">$</td><td height="20" style="border-top: 1px solid #000000;" align="right" width="108">161 </td></tr><tr><td height="20" style="border-bottom: 1px solid #000000;" align="left" width="437">Cash paid for income taxes</td><td height="20" style="border-bottom: 1px solid #000000;" align="right" width="18">$</td><td height="20" style="border-bottom: 1px solid #000000;" align="right" width="108"> 487 </td><td height="20" style="border-bottom: 1px solid #000000;" align="right" width="16">$</td><td height="20" style="border-bottom: 1px solid #000000;" align="right" width="108">655 </td></tr><tr><td height="20" style="border-top: 1px solid #000000;" align="left" width="437">Non-cash investing and financing activities:</td><td height="20" style="border-top: 1px solid #000000;" align="right" width="18"> </td><td height="20" style="border-top: 1px solid #000000;" align="left" width="108"> </td><td height="20" style="border-top: 1px solid #000000;" align="left" width="16"> </td><td height="20" style="border-top: 1px solid #000000;" align="left" width="108"> </td></tr><tr><td height="20" style="border-bottom: 1px solid #000000;" align="left" width="437">Non-cash property acquisitions</td><td height="20" style="border-bottom: 1px solid #000000;" align="right" width="18">$</td><td height="20" style="border-bottom: 1px solid #000000;" align="right" width="108"> 59 </td><td height="20" style="border-bottom: 1px solid #000000;" align="right" width="16">$</td><td height="20" style="border-bottom: 1px solid #000000;" align="right" width="108">81 </td></tr></table></div></body></html>

<html><head><meta content="text/html; charset=utf-8" /></head><body><div>Note 10: Subsequent Events – The Company has evaluated subsequent events through September 1, 2009, the date the consolidated financial statements (unaudited) were issued. On August 24, 2009, the Company entered into a joint venture agreement with Australia’s largest retailer, Woolworths Limited, to develop a network of home improvement stores for consumers in Australia. Under the agreement, the Company will be one-third owner of the destination home improvement chain. During the first four years, the Company estimates that it will invest approximately $100 million per year in the venture, with that amount varying depending on how rapidly stores come online.  </div></body></html>

<html><head><meta content="text/html; charset=utf-8" /></head><body><div>Note 9: Recent Accounting Pronouncements - In May 2009, the FASB issued SFAS No. 165, “Subsequent Events”, which clarifies that management must evaluate, as of each reporting period, events or transactions that occur after the balance sheet date through the date that the financial statements are issued or are available to be issued. SFAS No. 165 is effective for interim and annual periods ending after June 15, 2009. The Company adopted SFAS No. 165 in the second quarter of 2009. The adoption of SFAS No. 165 did not have a material impact on the Company’s consolidated financial statements but did require the Company to disclose the date through which management had evaluated subsequent events. In June 2009, the FASB issued SFAS No. 166, “Accounting for Transfers of Financial Assets – an amendment of FASB Statement No. 140”, which amends the derecognition guidance in Statement No. 140, “Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities”. SFAS No. 166 is effective for financial asset transfers occurring in fiscal years beginning after November 15, 2009, and interim periods within those fiscal years. The Company is currently evaluating the impact of SFAS No. 166 on its consolidated financial statements. In June 2009, the FASB issued SFAS No. 167, “Amendments to FASB Interpretation No. 46(R)”, which amends the consolidation guidance that applies to variable interest entities. SFAS No. 167 is effective for fiscal years beginning after November 15, 2009, and interim periods within those fiscal years. The Company is currently evaluating the impact of SFAS No. 167 on its consolidated financial statements. In June 2009, the FASB issued SFAS No. 168, “The FASB Accounting Standards Codification™ and the Hierarchy of Generally Accepted Accounting Principles – a replacement of FASB Statement No. 162”. Under SFAS No. 168, the FASB Accounting Standards Codification™ (Codification) will become the sole source of authoritative U.S. GAAP to be applied by nongovernmental entities. SFAS No. 168 is effective for financial statements issued for interim and annual periods ending after September 15, 2009. The adoption will have no material impact on the Company’s consolidated financial statements but will require that interim and annual filings include references to the Codification. </div></body></html>