Stock Analysis on Net
Stock Analysis on Net
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Lowe’s Cos. Inc. (NYSE:LOW)

Analysis of Debt

Advanced level

Total Debt (Carrying Amount)

Lowe’s Cos. Inc., balance sheet: debt

US$ in millions

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Jan 31, 2020 Feb 1, 2019 Feb 2, 2018 Feb 3, 2017 Jan 29, 2016 Jan 30, 2015
Short-term borrowings 1,941  722  1,137  510  43  — 
Current maturities of long-term debt 597  1,110  294  795  1,061  552 
Long-term debt, excluding current maturities 16,768  14,391  15,564  14,394  11,545  10,815 
Total debt, including finance or capitalized lease obligations (carrying amount) 19,306  16,223  16,995  15,699  12,649  11,367 

Based on: 10-K (filing date: 2020-03-23), 10-K (filing date: 2019-04-02), 10-K (filing date: 2018-04-02), 10-K (filing date: 2017-04-04), 10-K (filing date: 2016-03-29), 10-K (filing date: 2015-03-31).

Debt item Description The company
Total debt, including finance or capitalized lease obligations (carrying amount) Sum of the carrying values as of the balance sheet date of all debt plus capital lease obligations. Lowe’s Cos. Inc.’s total debt decreased from 2018 to 2019 but then increased from 2019 to 2020 exceeding 2018 level.

Total Debt (Fair Value)

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Jan 31, 2020
Selected Financial Data (US$ in millions)
Short-term borrowings 1,941 
Long-term debt, excluding capitalized lease obligations 18,814 
Finance or capitalized lease obligations 712 
Total debt, including finance or capitalized lease obligations (fair value) 21,467 
Financial Ratio
Debt, fair value to carrying amount ratio 1.11

Based on: 10-K (filing date: 2020-03-23).

Weighted-average Interest Rate on Debt

Weighted-average interest rate on debt: 3.83%

Interest Rate Debt Amount1 Interest Rate × Debt Amount Weighted-average Interest Rate2
5.23% 5  — 
3.70% 3,232  120 
3.57% 5,749  205 
5.96% 897  53 
4.82% 1,757  85 
3.89% 5,013  195 
5.64% 684  39 
2.14% 1,941  42 
Total 19,278  738 
3.83%

Based on: 10-K (filing date: 2020-03-23).

1 US$ in millions

2 Weighted-average interest rate = 100 × 738 ÷ 19,278 = 3.83%

Interest Costs Incurred

Lowe’s Cos. Inc., interest costs incurred

US$ in millions

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12 months ended: Jan 31, 2020 Feb 1, 2019 Feb 2, 2018 Feb 3, 2017 Jan 29, 2016 Jan 30, 2015
Interest expense 718  652  649  657  556  522 
Interest capitalized 1  3  5  4  3  2 
Interest costs incurred 719  655  654  661  559  524 

Based on: 10-K (filing date: 2020-03-23), 10-K (filing date: 2019-04-02), 10-K (filing date: 2018-04-02), 10-K (filing date: 2017-04-04), 10-K (filing date: 2016-03-29), 10-K (filing date: 2015-03-31).

Debt item Description The company
Interest expense Amount of the cost of borrowed funds accounted for as interest expense for debt. Lowe’s Cos. Inc.’s interest expense increased from 2018 to 2019 and from 2019 to 2020.
Interest capitalized Amount of interest costs capitalized disclosed as an adjusting item to interest costs incurred. Lowe’s Cos. Inc.’s interest capitalized decreased from 2018 to 2019 and from 2019 to 2020.
Interest costs incurred Total interest costs incurred during the period and either capitalized or charged against earnings. Lowe’s Cos. Inc.’s interest costs incurred increased from 2018 to 2019 and from 2019 to 2020.

Adjusted Interest Coverage Ratio

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Jan 31, 2020 Feb 1, 2019 Feb 2, 2018 Feb 3, 2017 Jan 29, 2016 Jan 30, 2015
Selected Financial Data (US$ in millions)
Net earnings 4,281  2,314  3,447  3,093  2,546  2,698 
Add: Income tax expense 1,342  1,080  2,042  2,108  1,873  1,578 
Add: Interest expense, net of amount capitalized 718  652  649  657  556  522 
Earnings before interest and tax (EBIT) 6,341  4,046  6,138  5,858  4,975  4,798 
 
Interest costs incurred 719  655  654  661  559  524 
Financial Ratio With and Without Capitalized Interest
Interest coverage ratio (without capitalized interest)1 8.83 6.21 9.46 8.92 8.95 9.19
Adjusted interest coverage ratio (with capitalized interest)2 8.82 6.18 9.39 8.86 8.90 9.16

Based on: 10-K (filing date: 2020-03-23), 10-K (filing date: 2019-04-02), 10-K (filing date: 2018-04-02), 10-K (filing date: 2017-04-04), 10-K (filing date: 2016-03-29), 10-K (filing date: 2015-03-31).

2020 Calculations

1 Interest coverage ratio (without capitalized interest) = EBIT ÷ Interest expense, net of amount capitalized
= 6,341 ÷ 718 = 8.83

2 Adjusted interest coverage ratio (with capitalized interest) = EBIT ÷ Interest costs incurred
= 6,341 ÷ 719 = 8.82

Solvency ratio Description The company
Adjusted interest coverage ratio A solvency ratio calculated as EBIT divided by interest payments (including capitalized interest). Lowe’s Cos. Inc.’s adjusted interest coverage ratio deteriorated from 2018 to 2019 but then improved from 2019 to 2020 not reaching 2018 level.