LOWE'S COMPANIES, INC. This discussion and analysis summarizes the significant factors affecting our consolidated operating results, liquidity and capital resources during the three and nine months endedOctober 29, 2021 , andOctober 30, 2020 . This discussion and analysis should be read in conjunction with the consolidated financial statements and notes to the consolidated financial statements that are included in our Annual Report on Form 10-K for the fiscal year endedJanuary 29, 2021 (the Annual Report), as well as the consolidated financial statements (unaudited) and notes to the consolidated financial statements (unaudited) contained in this report. Unless otherwise specified, all comparisons made are to the corresponding period of 2020. This discussion and analysis is presented in six sections: • Executive Overview • Operations • Financial Condition, Liquidity and Capital Resources • Off-Balance Sheet Arrangements • Contractual Obligations and Commercial Commitments • Critical Accounting Policies and Estimates
EXECUTIVE OVERVIEW
Performance Overview
Net sales in the third quarter of 2021 increased 2.7% to$22.9 billion compared to net sales of$22.3 billion in the third quarter of 2020. The increase in total sales was primarily driven by an increase in comparable sales. Net earnings in the third quarter of 2021 were$1.9 billion , which represents an increase of 174.0% compared to net earnings of$692 million in the third quarter of 2020. Diluted earnings per common share increased to$2.73 in the third quarter of 2021 from$0.91 in the third quarter of 2020. Included in the third quarter of 2020 results are a$1.1 billion pre-tax loss on extinguishment of debt from cash tender offers to purchase and retire an aggregate principal amount of$3.0 billion in outstanding notes and operating costs related to the Canadian restructuring actions. Adjusting for these items, diluted earnings per common share increased to$2.73 in the third quarter of 2021 from adjusted diluted earnings per common share of$1.98 in the third quarter of 2020 (see the discussion of non-GAAP financial measures ). For the first nine months of 2021, cash flows from operating activities were approximately$9.2 billion , while$1.3 billion was used for capital expenditures. Continuing to deliver on our commitment to return excess cash to shareholders, we repurchased$2.9 billion of common stock and paid$563 million in dividends during the three months endedOctober 29, 2021 . During the third quarter of 2021, comparable sales increased by 2.2%. Nine of 15U.S. regions and 11 of 15 product categories generated positive comparable sales during the quarter. Through the disciplined execution of our Total Home strategy, which was launched at the end of 2020, we experienced strong results with both our Pro and DIY customers and continue to gain confidence with both customers as the destination for all their project needs. This quarter, we also leveraged our scale and carrier relationships to secure transportation capacity and to minimize the impact of cost increases as well as ordered seasonal inventory earlier than in past years in order to maintain competitive in-stock positions and build inventory in key high-demand categories despite widespread disruptions in the global supply chain.
COVID-19 Response
We remain committed to the health and safety of our associates and customers, while supporting the communities in which we operate. During the quarter, we incurred$47 million of additional COVID-related expenses in support of our associates and store safety initiatives. Subsequent to the end of the quarter, theOccupational Safety and Health Administration (OSHA) issued an Emergency Temporary Standard (ETS) regarding COVID-19 vaccination and testing. We are evaluating the impact of the OSHA ETS on our business.
Looking Forward
Transforming and modernizing our supply chain has been a key focus for the
Company the last few years. During the quarter, we continued to make progress on
our market-based delivery model for big and bulky product. In this new delivery
model, products flow directly to customer homes from our distribution network,
bypassing stores altogether. This model is expected to provide our customers
with higher on-time delivery rates and improved customer satisfaction. We are
also opening space in our store showrooms which allows expansion of our same-day
and next-day Pro and DIY fulfillment capabilities.
[[Image Removed: low-20211029_g2.jpg]] 17
--------------------------------------------------------------------------------
Table of Contents
The pillars of our Total Home strategy include a focus on the Pro customer, online business expansion, modernization of our installation services, improving localization efforts, and elevating our product assortment, which together are designed to enhance customer engagement and grow market share. As part of this strategy, we continue to expand products available for installation and are leveraging our e-commerce platform to deliver a better customer experience. Although the business environment remains uncertain, we are confident that we will continue to drive market share gains and operating efficiency through the agility of our Total Home strategy.
OPERATIONS
The following table sets forth the percentage relationship to net sales of each
line item of the consolidated statements of earnings (unaudited), as well as the
percentage change in dollar amounts from the prior period. This table should be
read in conjunction with the following discussion and analysis and the
consolidated financial statements (unaudited), including the related notes to
the consolidated financial statements (unaudited).
Basis Point Increase
/ (Decrease) in Percentage Increase /
Percentage of Net (Decrease) in Dollar
Sales from Prior Amounts from Prior
Three Months Ended Period Period
October 29, 2021 October 30, 2020 2021 vs. 2020 2021 vs. 2020
Net sales 100.00 % 100.00 % N/A 2.7 %
Gross margin 33.10 32.72 38 3.9
Expenses:
Selling, general and administrative 19.08 21.38 (230) (8.3)
Depreciation and amortization 1.85 1.59 26 19.6
Operating income 12.17 9.75 242 28.2
Interest - net 0.97 0.99 (2) 1.2
Loss on extinguishment of debt - 4.75 (475) (100.0)
Pre-tax earnings 11.20 4.01 719 186.9
Income tax provision 2.93 0.91 202 230.8
Net earnings 8.27 % 3.10 % 517 174.0 %
[[Image Removed: low-20211029_g2.jpg]] 18
--------------------------------------------------------------------------------
Table of Contents
Basis Point Increase
/ (Decrease) in Percentage Increase /
Percentage of Net (Decrease) in Dollar
Sales from Prior Amounts from Prior
Nine Months Ended Period Period
October 29, 2021 October 30, 2020 2021 vs. 2020 2021 vs. 2020
Net sales 100.00 % 100.00 % N/A 8.1 %
Gross margin 33.41 33.36 5 8.3
Expenses:
Selling, general and administrative 18.10 20.18 (208) (3.0)
Depreciation and amortization 1.64 1.46 18 21.6
Operating income 13.67 11.72 195 26.1
Interest - net 0.86 0.93 (7) 0.9
Loss on extinguishment of debt - 1.53 (153) (100.0)
Pre-tax earnings 12.81 9.26 355 49.5
Income tax provision 3.15 2.25 90 51.0
Net earnings 9.66 % 7.01 % 265 49.0 %
The following table sets forth key metrics utilized by management in assessing business performance. This table should be read in conjunction with the following discussion and analysis and the consolidated financial statements (unaudited), including the related notes to the consolidated financial statements (unaudited).
Three Months Ended Nine Months Ended
Other Metrics October 29, 2021
2.2 % 30.1 % 7.4 % 25.6 %
Total customer transactions (in millions) 237 257 785 819
Average ticket 2 $ 96.54 $ 86.96 $ 95.40 $ 84.55
At end of period:
Number of stores 1,973 1,969
Sales floor square feet (in millions) 208 208
Average store size selling square feet (in thousands) 3 105
106
Net earnings to average debt and equity 4 27.5 % 19.5 % Return on invested capital 4 30.1 % 25.1 % 1 A comparable location is defined as a retail location that has been open longer than 13 months. A location that is identified for relocation is no longer considered comparable in the month of its relocation. The relocated location must then remain open longer than 13 months to be considered comparable. A location we have decided to close is no longer considered comparable as of the beginning of the month in which we announce its closing. Comparable sales are presented on a transacted basis when tender is accepted from a customer. Comparable sales include online sales, which positively impacted third quarter fiscal 2021 and fiscal 2020 comparable sales by approximately 175 basis points and 485 basis points, respectively, and year-to-date fiscal 2021 and fiscal 2020 comparable sales by approximately 170 basis points and 530 basis points, respectively. The comparable store sales calculation included in the preceding table was calculated using comparable 13-week and 39-week periods. 2 Average ticket is defined as net sales divided by the total number of customer transactions. 3 Average store size selling square feet is defined as sales floor square feet divided by the number of stores open at the end of the period. The averageLowe's -branded home improvement store has approximately 112,000 square feet of retail selling space. 4 Return on invested capital is calculated using a non-GAAP financial measure. Net earnings to average debt and equity is the most comparable GAAP ratio. See below for additional information and reconciliations of non-GAAP measures. [[Image Removed: low-20211029_g2.jpg]] 19
--------------------------------------------------------------------------------
Table of Contents
Non-GAAP Financial Measures
Adjusted Diluted Earnings Per Share
Adjusted diluted earnings per share is considered a non-GAAP financial measure. The Company believes this non-GAAP financial measure provides useful insight for analysts and investors in evaluating what management considers the Company's core financial performance. Adjusted diluted earnings per share excludes the impact of discrete items, further described below, not contemplated in the Company's business outlook for the third quarter of fiscal 2020. Unless otherwise noted, the income tax effect of these adjustments is calculated using the marginal rate for the period. Fiscal 2020 Impacts •In the third quarter of fiscal 2020, the Company recognized a$1.1 billion loss on extinguishment of debt in connection with the cash tender offers on an aggregate principal amount of$3.0 billion in outstanding notes (Loss on extinguishment of debt). •Beginning in the third quarter of fiscal 2019, the Company began a strategic review of its Canadian operations, and in the fourth quarter of fiscal 2019, the Company announced additional actions to improve future performance and profitability of its Canadian operations. As a result of this review and related actions, in the third quarter of fiscal 2020, the Company recognized$13 million of pre-tax operating costs related to inventory write-downs and other closing costs (Canada restructuring). Adjusted diluted earnings per share should not be considered an alternative to, or more meaningful indicator of, the Company's diluted earnings per common share as prepared in accordance with GAAP. The Company's methods of determining non-GAAP financial measures may differ from the method used by other companies and may not be comparable. Three Months Ended October 30, 2020 Pre-Tax Earnings Tax Net Earnings Diluted earnings per share, as reported$ 0.91 Non-GAAP adjustments - per share impacts Loss on extinguishment of debt 1.40 (0.35) 1.05 Canada restructuring 0.02 - 0.02 Adjusted diluted earnings per share$ 1.98 Return onInvested Capital Return onInvested Capital (ROIC) is calculated using a non-GAAP financial measure. Management believes ROIC is a meaningful metric for analysts and investors as a measure of how effectively the Company is using capital to generate profits. Although ROIC is a common financial metric, numerous methods exist for calculating ROIC. Accordingly, the method used by our management may differ from the methods used by other companies. We encourage you to understand the methods used by another company to calculate ROIC before comparing its ROIC to ours. [[Image Removed: low-20211029_g2.jpg]] 20
--------------------------------------------------------------------------------
Table of Contents
We define ROIC as the rolling 12 months' lease adjusted net operating profit
after tax (Lease adjusted NOPAT) divided by the average of current year and
prior year ending debt and equity. Lease adjusted NOPAT is a non-GAAP financial
measure, and net earnings is considered to be the most comparable GAAP financial
measure. The calculation of ROIC, together with a reconciliation of net earnings
to Lease adjusted NOPAT, is as follows:
For the Periods Ended
(In millions, except percentage data) October 29, 2021 October 30, 2020 Calculation of Return onInvested Capital Numerator Net Earnings $ 8,213 $ 5,367 Plus: Interest expense - net 854 827 Loss on extinguishment of debt - 1,060 Operating lease interest 162 177 Provision for income taxes 2,700 1,828 Lease adjusted net operating profit 11,929
9,259
Less:
Income tax adjustment 1 2,952
2,353
Lease adjusted net operating profit after tax $ 8,977 $
6,906
Denominator
Average debt and equity 2 $ 29,836 $ 27,525
Net earnings to average debt and equity 27.5 % 19.5 %
Return on invested capital 30.1 % 25.1 %
1 Income tax adjustment is defined as lease adjusted net operating profit
multiplied by the effective tax rate, which was 24.7% and 25.4% for the periods
ended October 29, 2021 , and October 30, 2020 , respectively.
2 Average debt and equity is defined as average current year and prior year
ending debt, including current maturities, short-term borrowings, and operating
lease liabilities, plus the average current year and prior year ending total
equity.
Results of Operations
Net Sales - Net sales in the third quarter of 2021 increased 2.7% to $22.9
billion . The increase in total sales was primarily driven by comparable sales
growth. Comparable sales increased 2.2% over the same period, driven by a 9.7%
increase in comparable average ticket, partially offset by a 7.5% decrease in
comparable customer transactions.
During the third quarter of 2021, we experienced comparable sales increases in
11 of 15 product categories, led by Electrical, Appliances, and Rough Plumbing.
We delivered strong comparable sales in Electrical due to unit price increases
driven by copper inflation. Appliances benefited from strong unit sales in major
appliances: Refrigerators, Freezers and Laundry. Pro customer demand in
attachment categories, as well as higher unit sales of Tanks & Water Supply
Pumps and Air Filters due to the impacts of Hurricane Ida and wildfires, drove
strength in Rough Plumbing. We experienced the lowest comparable sales in
Lumber, Lighting, and Hardware in the quarter. Lumber decline was due to cycling
prior year strong DIY demand, as well as a decline in unit prices due to
deflation. Lighting sales were down due to a high volume of clearance sales in
the prior year during the reset of the layout of our U.S. stores (U.S. Stores
Reset), and a decline in DIY demand in Lighting and Ceiling Fans.
Geographically, nine of 15 U.S. regions experienced positive comparable sales,
while our Canadian operations experienced negative comparable sales due to lower
Lumber sales as the Canadian business is more heavily weighted towards Lumber.
Net sales increased 8.1% to $74.9 billion for the first nine months of 2021
compared to 2020. Comparable sales increased 7.4% over the same period, driven
by a 11.6% increase in comparable average ticket, partially offset by a 4.2%
decrease in comparable customer transactions.
Gross Margin - For the third quarter of 2021, gross margin as a percentage of
sales increased 38 basis points. The gross margin increase for the quarter is
driven by approximately 60 basis points of leverage from higher credit revenue,
20 basis points of leverage from inventory shrink, and five basis points of
favorable product mix, partially offset by 30 basis points of
[[Image Removed: low-20211029_g2.jpg]] 21
--------------------------------------------------------------------------------
Table of Contents
deleverage from supply chain costs and 25 basis points of deleverage in product
margin rate. Product margin rate was pressured early in the quarter by a steep
drop in Lumber prices which began in July. These pressures were largely
mitigated by data-driven pricing and product cost management strategies across
other product categories.
Gross margin as a percentage of sales increased five basis points in the first
nine months of 2021 compared to 2020. Gross margin was positively impacted by
approximately 55 basis points of total rate improvement driven by continued
improvements in managing product costs and disciplined pricing strategies and 25
basis points of leverage from higher credit revenue. These favorable impacts are
partially offset by approximately 40 basis points of product mix shifts and 30
basis points of deleverage from supply chain costs.
SG&A - For the third quarter of 2021, SG&A expense leveraged 230 basis points as
a percentage of sales compared to the third quarter of 2020. This is primarily
driven by approximately 110 basis points of leverage due to lower COVID-19
related expenses, including additional compensation to hourly front-line
associates, emergency paid leave, and cleaning costs; 50 basis points of
leverage in retail operating salaries due to increased sales and improved
operating efficiencies as a result of our Perpetual Productivity Improvement
(PPI) initiatives; and 50 basis points of leverage due to the U.S. Stores Reset
in the prior year.
SG&A expense as a percentage of sales leveraged 208 basis points in the first
nine months of 2021 compared to 2020. This was primarily driven by approximately
130 basis points of leverage due to lower COVID-19 related expenses,
approximately 45 basis points of leverage in retail operating salaries due to
increased sales and improved operating efficiencies as a result of our PPI
initiatives, and 20 basis points of leverage due to the U.S. Stores Reset in the
prior year.
Depreciation and Amortization - Depreciation and amortization deleveraged 26
basis points as a percentage of sales for the third quarter of 2021 compared to
the prior year primarily due to increased capital investment related to store
environment and technology at the end of 2020 and throughout 2021. Property,
less accumulated depreciation, increased to $18.9 billion at October 29, 2021 ,
compared to $18.8 billion at October 30, 2020 .
Depreciation and amortization deleveraged 18 basis points as a percentage of
sales for the first nine months of 2021 compared to 2020 primarily due to the
same factors that impacted depreciation and amortization for the third quarter.
Interest - Net - Interest expense for the third quarter of 2021 leveraged two
basis points primarily as a result of lower interest costs from the October 2020
cash tender offers, the payoff of scheduled debts at maturity, and increased
sales in the current year.
Interest expense for the first nine months of 2021 leveraged seven basis points
primarily due to the same factors that impacted interest expense for the third
quarter.
Loss on Extinguishment of Debt - During the third quarter of 2020, we
repurchased and retired
Income Tax Provision - Our effective income tax rates were 26.1% and 22.6% for the three months endedOctober 29, 2021 andOctober 30, 2020 , respectively. The increase in the effective tax rate for the quarter was impacted by lower projected earnings in fiscal 2021 at our RONA inc. entity inCanada , which has a full valuation allowance against its deferred tax assets, as well as a favorable discrete item related to excess tax benefits of stock compensation in the prior year.
Our effective income tax rates were 24.6% and 24.3% for the nine months ended
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
Sources of Liquidity
Cash flows from operations, supplemented with our short-term and long-term borrowings, remain sufficient to fund our operations while allowing us to make strategic investments to support long-term growth and return excess cash to shareholders in the form of dividends and share repurchases. As ofOctober 29, 2021 , we held$6.1 billion of cash and cash equivalents, as well as$3.0 billion in undrawn capacity on our revolving credit facilities. [[Image Removed: low-20211029_g2.jpg]] 22 -------------------------------------------------------------------------------- Table of Contents Cash Flows Provided by Operating Activities Nine Months
Ended
(In millions)October 29, 2021
Net cash provided by operating activities $ 9,179 $ 11,485 Cash flows from operating activities continued to provide the primary source of our liquidity. The decrease in net cash provided by operating activities for the nine months endedOctober 29, 2021 , compared to the nine months endedOctober 30, 2020 , was driven primarily by changes in working capital, partially offset by higher net earnings. Accounts payable increased by$436 million for the first nine months of 2021, compared to an increase of$5.1 billion for the first nine months of 2020. Inventory decreased operating cash flow for the first nine months of 2021 by approximately$446 million , compared to a decrease of approximately$2.5 billion for the first nine months of 2020. The increase in accounts payable and inventory in the prior year was driven by a ramp up in inventory purchase volume to meet sustained customer demand at the beginning of the COVID-19 pandemic. In the current year, we have continued to experience sustained demand levels and maintained a higher level of inventory purchases and related accounts payable. Other operating liabilities decreased$421 million for the first nine months of 2021 compared to an increase of$625 million in the first nine months of 2020. The decrease in other operating liabilities in the current year compared to the prior year is primarily driven by COVID-related accrued discretionary compensation for hourly associates in the prior year and timing of tax payments.
Cash Flows Used in Investing Activities
Nine Months Ended
(In millions) October 29, 2021
Net cash used in investing activities $ (1,360) $ (2,652)
Net cash used in investing activities primarily consists of transactions related to capital expenditures and investments.
Capital expenditures
Our capital expenditures generally consist of investments in our strategic
initiatives to enhance our ability to serve customers, improve existing stores,
and support expansion plans. The following table provides our capital
expenditures for the nine months ended
Nine Months Ended
(In millions) October 29, 2021 October 30, 2020
Core business investments 1 $ 973 $ 960
Strategic initiatives 2 181 138
New stores, new corporate facilities and international 3 102 74
Total capital expenditures $ 1,256 $ 1,172
1Includes merchandising resets, facility repairs, replacements of IT and store
equipment, among other specific efforts.
2Represents investments related to our strategic focus areas aimed at improving
customers' experience and driving improved performance in the near and long term
(excluding acquisitions).
3Represents expenditures primarily related to land purchases, buildings, and
personal property for new store projects and new corporate facilities projects,
as well as expenditures related to our international operations.
Our fiscal year 2021 outlook for capital expenditures is up to
Cash Flows Used in Financing Activities
Nine Months Ended
(In millions) October 29, 2021
Net cash used in financing activities $ (6,391) $ (1,304)
Net cash used in financing activities primarily consists of transactions related to our share repurchases, long-term debt, short-term borrowings, and cash dividend payments.
[[Image Removed: low-20211029_g2.jpg]] 23
--------------------------------------------------------------------------------
Table of Contents
Total Debt
During the nine months ended
In
The 2020 Credit Agreement and the Second Amended and Restated Credit Agreement support our commercial paper program. The amount available to be drawn under the 2020 Credit Agreement and the Second Amended and Restated Credit Agreement is reduced by the amount of borrowings under our commercial paper program. There were no outstanding borrowings under the Company's commercial paper program, the 2020 Credit Agreement, or the Second Amended and Restated Credit Agreement as ofOctober 29, 2021 , andOctober 30, 2020 . Total combined availability under the 2020 Credit Agreement and the Second Amended and Restated Credit Agreement as ofOctober 29, 2021 , was$3.0 billion . The 2021 Term Loan, 2020 Credit Agreement and the Second Amended and Restated Credit Agreement contain customary representations, warranties, and covenants. We were in compliance with those covenants atOctober 29, 2021 .
The following table includes additional information related to our debt for the
nine months ended
Nine Months Ended
(In millions, except for interest rate data) October 29, 2021 October 30, 2020
Net proceeds from issuance of debt $ 4,972 $ 7,929
Repayment of debt $ (595) $ (5,582)
Net change in commercial paper $ - $ (941)
Maximum commercial paper outstanding at any month-end $ 400
$ 1,858
Short-term borrowings outstanding at quarter-end $ 1,000 $ -
Weighted-average interest rate of short-term borrowings
outstanding 0.79 % - %
Share Repurchases
We have an ongoing share repurchase program, authorized by the Company's Board
of Directors, that is executed through purchases made from time to time either
in the open market or through private off-market transactions. We also withhold
shares from employees to satisfy tax withholding liabilities. Shares repurchased
are retired and returned to authorized and unissued status. The following table
provides, on a settlement date basis, the total number of shares repurchased,
average price paid per share, and the total amount paid for share repurchases
for the nine months ended October 29, 2021 , and October 30, 2020 :
Nine Months Ended
(In millions, except per share data)
Total amount paid for share repurchases $ 8,999 $ 1,528
Total number of shares repurchased 46.6 13.1
Average price paid per share $ 193.16 $ 116.99
During the quarter, the Company entered into and finalized a variable notional
ASR agreement with a third-party financial institution to repurchase shares. The
Company's prepayment of the maximum notional amount of the variable notional ASR
at the inception of the agreement resulted in a $408 million balance to be
refunded to the Company subsequent to quarter end. This prepayment is reflected
in other financing - net in the consolidated statements of cash flows as of the
end of the third quarter.
[[Image Removed: low-20211029_g2.jpg]] 24
--------------------------------------------------------------------------------
Table of Contents
As ofOctober 29, 2021 , we had$10.7 billion remaining available under our share repurchase program with no expiration date. We expect to repurchase shares totaling approximately$12.0 billion in 2021 (including the amount repurchased during the first nine months of fiscal year 2021).
Dividends
Dividends are paid in the quarter immediately following the quarter in which they are declared. Dividends paid per share increased from$1.65 per share for the nine months endedOctober 30, 2020 , to$2.00 per share for the nine months endedOctober 29, 2021 . Capital Resources We expect to continue to have access to the capital markets on both a short-term and long-term basis when needed for liquidity purposes by issuing commercial paper or new long-term debt. The availability and the borrowing costs of these funds could be adversely affected, however, by a downgrade of our debt ratings or a deterioration of certain financial ratios. The table below reflects our debt ratings byStandard & Poor's (S&P) and Moody's as ofNovember 24, 2021 , which we are disclosing to enhance understanding of our sources of liquidity and the effect of our ratings on our cost of funds. Our debt ratings have enabled, and should continue to enable, us to refinance our debt as it becomes due at favorable rates in capital markets. Our commercial paper and senior debt ratings may be subject to revision or withdrawal at any time by the assigning rating organization, and each rating should be evaluated independently of any other rating. Debt Ratings S&P Moody's Commercial Paper A-2 P-2 Senior Debt BBB+ Baa1 Senior Debt Outlook Stable Stable There are no provisions in any agreements that would require early cash settlement of existing debt or leases as a result of a downgrade in our debt rating or a decrease in our stock price. In addition, we do not believe it will be necessary to repatriate significant cash and cash equivalents and short-term investments held in foreign affiliates to fund domestic operations.
OFF-BALANCE SHEET ARRANGEMENTS
We do not have any off-balance sheet financing that has, or is reasonably likely to have, a material, current or future effect on our financial condition, cash flows, results of operations, liquidity, capital expenditures or capital resources.
CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS
InMarch 2021 andSeptember 2021 , we issued a combined$4.0 billion of unsecured notes in the ordinary course of business to be used for general corporate purposes. The table below summarizes our contractual obligations relating to long-term debt, excluding operating and finance lease obligations, atOctober 29, 2021 . The unsecured notes issued in the nine months ended October 29, 2021, are further described in Note 7 to the consolidated financial statements included herein. Payments Due by Period Less Than 1-3 4-5 After 5 (In millions) Total 1 Year Years Years Years Long-term debt (principal amounts, excluding discounts and debt issuance costs)$ 24,788 $ 1,260 $ 958 $ 2,851 $ 19,719 Long-term debt (interest payments) 12,314 846 1,629 1,494 8,345 Total$ 37,102 $ 2,106 $ 2,587 $ 4,345 $ 28,064 As ofOctober 29, 2021 , there were no other material changes to our contractual obligations and commercial commitments outside the ordinary course of business since the end of fiscal year 2020. Refer to the Annual Report on Form 10-K for additional information regarding our contractual obligations and commercial commitments.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
[[Image Removed: low-20211029_g2.jpg]] 25
--------------------------------------------------------------------------------
Table of Contents Our significant accounting policies are described in Note 1 to the consolidated financial statements presented in the Annual Report. Our critical accounting policies and estimates are described in "Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Annual Report. Our significant and critical accounting policies have not changed significantly since the filing of the Annual Report.
© Edgar Online, source
