This discussion and analysis summarizes the significant factors affecting our
consolidated operating results, liquidity and capital resources during the three
and nine months ended October 28, 2022, and October 29, 2021. 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 ended January 28, 2022
(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 2021. This discussion and analysis is presented
in four sections:

•  Executive Overview
•  Operations
•  Financial Condition, Liquidity and Capital Resources
•  Critical Accounting Policies and Estimates

EXECUTIVE OVERVIEW



Net sales in the third quarter of 2022 increased 2.4% to $23.5 billion compared
to net sales of $22.9 billion in the third quarter of 2021. The increase in
total sales was driven by an increase in comparable sales. Net earnings in the
third quarter of 2022 were $154 million compared to net earnings of $1.9 billion
in the third quarter of 2022. Diluted earnings per common share were $0.25 in
the third quarter of 2022 compared to $2.73 in the third quarter of 2021.
Included in the third quarter of 2022 results is $2.1 billion of pre-tax
long-lived asset impairment associated with the Canadian retail business,
discussed further below, which decreased diluted earnings per share by $3.02.
Excluding the impact of this item, adjusted diluted earnings per common share
increased 19.8% to $3.27 in the third quarter of 2022 (see discussion of

non-GAAP financial measures beginning on page 18).



For the first nine months of 2022, cash flows from operating activities were
approximately $8.1 billion, while $1.1 billion was used for capital
expenditures. Continuing to deliver on our commitment to return excess cash to
shareholders, we repurchased $4.0 billion of common stock and paid $666 million
in dividends during the three months ended October 28, 2022.

During the third quarter of 2022, comparable sales increased 2.2% with nine of
15 product categories generating positive comparable sales. We continued to
experience broad-based demand from our Pro customers, which reflects the success
of our Pro initiatives. In addition to our momentum with the Pro customer, we
experienced improved Do-It-Yourself (DIY) customer performance during the
quarter driven by project-related demand. Our positive comparable sales also
reflect our disciplined pricing strategies to offset cost inflation.

While improving our operational productivity, we continue to invest in our
hourly front-line associates. In the third quarter we awarded $200 million in
bonuses, which are expected to be paid out before the holiday season, and
announced an incremental investment of $170 million in permanent wage increases
effective December 2022. In addition, during the quarter, we converted four
geographic regions to our market-based delivery model for big and bulky product
which improves the customer experience through expanded fulfillment options. We
now have eight regions converted to the new model, which cover more than half of
our stores, and we are on track to complete the roll-out by the end of next
year.

On November 3, 2022, we announced that we entered into a definitive agreement to
sell our Canadian retail business, which is expected to close in early calendar
2023. Although we have made progress in improving the Canadian retail business
over the past few years, the performance has continued to lag our U.S. business
operations. By executing this transaction, we will focus on further enhancing
our operating margin, simplify our business model, and deliver sustainable value
to our shareholders.

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).
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                                                                                                  Basis Point
                                                                                            Increase/(Decrease) in           Percentage

Increase/(Decrease)


                                                                                            Percentage of Net Sales           in Dollar Amounts from Prior
                                                   Three Months Ended                          from Prior Period                         Period
                                       October 28, 2022          October 29, 2021                2022 vs. 2021                       2022 vs. 2021
Net sales                                       100.00  %                 100.00  %                               N/A                                 2.4  %
Gross margin                                     33.30                     33.10                                   20                                 3.0
Expenses:
Selling, general and administrative              27.45                     19.08                                  837                                47.4
Depreciation and amortization                     1.92                      1.85                                    7                                 6.1
Operating income                                  3.93                     12.17                                (824)                               (66.9)
Interest - net                                    1.25                      0.97                                   28                                31.7

Pre-tax earnings                                  2.68                     11.20                                (852)                               (75.5)
Income tax provision                              2.02                      2.93                                 (91)                               (29.1)
Net earnings                                      0.66  %                   8.27  %                             (761)                               (91.9) %


                                                                                                  Basis Point
                                                                                            Increase/(Decrease) in           Percentage 

Increase/(Decrease)


                                                                                            Percentage of Net Sales           in Dollar Amounts from Prior
                                                    Nine Months Ended                          from Prior Period                         Period
                                       October 28, 2022          October 29, 2021                2022 vs. 2021                       2022 vs. 2021
Net sales                                       100.00  %                 100.00  %                               N/A                                (0.4) %
Gross margin                                     33.51                     33.41                                   10                                (0.1)
Expenses:
Selling, general and administrative              20.38                     18.10                                  228                                

12.1


Depreciation and amortization                     1.80                      1.64                                   16                                 9.7
Operating income                                 11.33                     13.67                                (234)                               (17.5)
Interest - net                                    1.07                      0.86                                   21                                23.3

Pre-tax earnings                                 10.26                     12.81                                (255)                               (20.2)
Income tax provision                              2.92                      3.15                                 (23)                                (7.8)
Net earnings                                      7.34  %                   9.66  %                             (232)                               (24.3) %


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).



During the three months ended July 29, 2022, the Company adjusted its comparable
sales metric to exclude days affected by national outages with its third-party
credit and debit processor. Excluding these days, and the corresponding prior
period days, increased comparable sales by approximately 10 basis points for the
nine months ended October 28, 2022. The comparable sales metric for the three
months ended October 28, 2022, and the three and nine months ended October 29,
2021 was not impacted or adjusted by similar outages.
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                                                             Three Months Ended                                 Nine Months Ended
Other Metrics                                    October 28, 2022

October 29, 2021 October 28, 2022 October 29, 2021 Comparable sales increase/(decrease) 1

                       2.2  %                  2.2   %                  (0.8) %                  7.4   %
Total customer transactions (in millions)                    225                     237                       719                     785
Average ticket 2                                $         104.54          $        96.54           $        103.76          $        95.40
At end of period:
Number of stores                                           1,969                   1,973
Sales floor square feet (in millions)                        208            

208


Average store size selling square feet (in
thousands) 3                                                 106            

105

Net earnings to average debt and shareholders'


 (deficit)/equity 4                                         24.4  %                 27.5   %
Return on invested capital 4                                27.6  %                 30.1   %


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 decide 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 impacted third quarter fiscal 2022
and fiscal 2021 comparable sales by approximately 80 basis points and 175 basis
points, respectively, and year-to-date fiscal 2022 and fiscal 2021 comparable
sales by approximately 45 basis points and 170 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 average
Lowe'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 shareholders' (deficit)/equity is the most
comparable GAAP ratio. As of October 28, 2022, return on invested capital was
negatively impacted 590 basis points as a result of the long-lived asset
impairment associated with the Canadian retail business. See below for
additional information and reconciliations of non-GAAP measures.

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 operating performance. Adjusted diluted earnings per share excludes the
impact of a discrete item, further described below, not contemplated in the
Company's business outlook.

Fiscal 2022 Impacts
•In the third quarter of fiscal 2022, the Company recognized a pre-tax $2.1
billion long-lived asset impairment of the Canadian retail business (Canadian
retail business transaction costs).

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.

The following provides a reconciliation of the Company's non-GAAP financial measure to the most directly comparable GAAP financial measure: 18 [[Image Removed: low-20221028_g2.jpg]]

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                                                            Three Months Ended
                                                             October 28, 2022
                                              Pre-Tax Earnings       Tax1       Net Earnings
Diluted earnings per share, as reported                                        $       0.25
Non-GAAP adjustments - per share impacts

Canadian retail business transaction costs               3.32       (0.30)             3.02

Adjusted diluted earnings per share                                         

$ 3.27

1 Represents the corresponding tax benefit or expense related to the item excluded from adjusted diluted earnings per share.

Return on Invested Capital



Return on Invested 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 financial returns. 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.

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 shareholders' (deficit)/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 28, 2022         October 29, 2021
Calculation of Return on Invested Capital
Numerator
Net Earnings                                                  $         6,686          $         8,213
Plus:
Interest expense - net                                                  1,037                      854

Operating lease interest                                                  160                      162
Provision for income taxes                                              2,581                    2,700
Lease adjusted net operating profit                                    10,464                   11,929

Less:


Income tax adjustment 1                                                 2,915                    2,952
Lease adjusted net operating profit after tax                 $         

7,549 $ 8,977

Denominator


Average debt and shareholders' (deficit)/equity 2             $        27,355          $        29,836
Net earnings to average debt and shareholders'
(deficit)/equity                                                         24.4  %                  27.5  %
Return on invested capital 3                                             27.6  %                  30.1  %

1 Income tax adjustment is defined as lease adjusted net operating profit multiplied by the effective tax rate, which was 27.9% and 24.7% for the periods ended October 28, 2022, and October 29, 2021, respectively.



2  Average debt and shareholders' (deficit)/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 shareholders' (deficit)/equity.

3 As of October 28, 2022, return on invested capital was negatively impacted 590
basis points as a result of the long-lived asset impairment associated with the
Canadian retail business.

Results of Operations

Net Sales - Net sales in the third quarter of 2022 increased 2.4% to $23.5
billion. The increase in total sales was primarily driven by a comparable sales
increase. Comparable sales increased 2.2% over the same period, driven by a 8.0%
increase in comparable average ticket, partially offset by a 5.8% decline in
comparable customer transactions.
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During the third quarter of 2022, we experienced comparable sales increases in
nine of 15 product categories, led by Building Materials, Rough Plumbing, and
Lumber. Strength in these categories reflects broad-based demand from both the
Pro customer and DIY customer, as well as unit price increases due to cost
inflation. We experienced the lowest comparable sales in Lighting, Décor, and
Seasonal & Outdoor Living in the quarter. Geographically, 12 of 15 U.S. regions
experienced positive comparable sales, while our Canadian operations lagged the
U.S.

Net sales decreased 0.4% to $74.6 billion for the first nine months of 2022
compared to 2021. Comparable sales declined 0.8% over the same period, driven by
a 8.1% decline in comparable customer transactions, partially offset by a 7.3%
increase in comparable average ticket.

Gross Margin - For the third quarter of 2022, gross margin as a percentage of
sales increased 20 basis points. The gross margin increase for the quarter is
driven by approximately 110 basis points of total rate improvement primarily in
Lumber as we cycle significant deflation pressure in the prior year. The
favorable rate improvement was partially offset by 35 basis points of deleverage
from inventory shrink and 30 basis points of deleverage from higher
transportation costs and expansion of our supply chain network.

Gross margin as a percentage of sales increased 10 basis points in the first
nine months of 2022 compared to 2021. Gross margin was positively impacted by
approximately 35 basis points of total rate improvement due to continued
improvements in managing product costs and disciplined pricing strategies and 20
basis points of favorable product mix. These favorable impacts are partially
offset by approximately 25 basis points of distribution costs and 20 basis
points of deleverage from inventory shrink.

SG&A - For the third quarter of 2022, SG&A expense deleveraged 837 basis points as a percentage of sales compared to the third quarter of 2021. This was primarily driven by the long-lived asset impairment related to our Canadian retail business. This was partially offset by ongoing productivity initiatives.

SG&A expense as a percentage of sales deleveraged 228 basis points as a percentage of sales for the first nine months of 2022 compared to 2021 primarily due to the same factors that impacted SG&A for the third quarter.



Depreciation and Amortization - Depreciation and amortization deleveraged seven
basis points as a percentage of sales for the third quarter of 2022 compared to
2021 due primarily to ongoing capital expenditures in core business investments.

Depreciation and amortization deleveraged 16 basis points as a percentage of
sales for the first nine months of 2022 compared to 2021 primarily due to the
same factors that impacted depreciation and amortization for the third quarter.

Interest - Net - Interest expense for the third quarter of 2022 deleveraged 28
basis points primarily due to interest expense related to the issuance of
unsecured notes in March 2022 and September 2022, partially offset by scheduled
payoff of notes at maturity.

Interest expense for the first nine months of 2022 deleveraged 21 basis points
primarily due to the same factors that impacted interest expense for the third
quarter.

Income Tax Provision - Our effective income tax rates were 75.5% and 26.1% for
the three months ended October 28, 2022 and October 29, 2021, respectively, and
28.4% and 24.6% for the nine months ended October 28, 2022 and October 29, 2021,
respectively. The unfavorable tax rate for the three and nine months ended
October 28, 2022 compared to 2021 is largely driven by an increase in the
valuation allowance for deferred taxes related to the long-lived asset
impairment associated with RONA inc.

FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

Sources of Liquidity



Cash flows from operations, combined with our continued access to capital
markets on both a short-term and long-term basis, as needed, remain adequate to
fund our operations, make strategic investments to support long-term growth, and
return excess cash to shareholders in the form of dividends and share
repurchases. We believe these sources of liquidity will continue to support our
business for the next twelve months. As of October 28, 2022, we held $3.2
billion of cash and cash equivalents, as well as $4.0 billion in undrawn
capacity on our revolving credit facilities.

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Cash Flows Provided by Operating Activities

                                                           Nine Months 

Ended


  (In millions)                                 October 28, 2022

October 29, 2021


  Net cash provided by operating activities    $           8,138      $           9,179



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 ended October 28, 2022, compared to the nine months ended
October 29, 2021, was driven primarily by changes in working capital. Inventory
decreased operating cash flows for the first nine months of 2022 by
approximately $2.3 billion compared to a decrease of approximately $446 million
for the first nine months of 2021, while accounts payable increased operating
cash flows by $921 million for the first nine months of 2022, compared to an
increase of $436 million for the first nine months of 2021. The increase in
inventory and accounts payable is primarily due to product cost and freight
inflation compared to the prior year, as well as lower inventory turns
year-over-year. Deferred revenue decreased operating cash flows by $117 million
for the first nine months of 2022, compared to an increase of $444 million for
the first nine months of 2021. The decline in operating cash flow due to
deferred revenue compared to the prior year is primarily due to an operational
focus on customer fulfillment. Other operating liabilities also increased
operating cash flows by $205 million during the first nine months of 2022,
compared to a decrease of $421 million for the first nine months of 2021. This
increase is primarily driven by the deferral of payment of our third quarter
estimated federal tax payment under the income tax relief announced by the
Internal Revenue Service for businesses located in states impacted by Hurricane
Ian.

Cash Flows Used in Investing Activities



                                                          Nine Months Ended
    (In millions)                              October 28, 2022

October 29, 2021


    Net cash used in investing activities     $          (1,115)     $         (1,360)


Net cash used in investing activities primarily consists of transactions related to capital expenditures.



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 October 28, 2022, and October 29, 2021:



                                                                           Nine Months Ended
(In millions)                                                 October 28, 2022           October 29, 2021
Core business investments 1                                 $             826          $             973
Strategic initiatives 2                                                   171                        181
New stores, new corporate facilities and international 3                   93                        102
Total capital expenditures                                  $           1,090          $           1,256


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 2022 outlook for capital expenditures is up to $2.0 billion.

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Cash Flows Used in Financing Activities

                                                          Nine Months Ended
    (In millions)                              October 28, 2022

October 29, 2021


    Net cash used in financing activities     $          (4,932)     $         (6,391)


Net cash used in financing activities primarily consists of transactions related to our share repurchases, long-term debt, and cash dividend payments.

Total Debt

During the nine months ended October 28, 2022, we issued $9.8 billion of unsecured notes, the proceeds of which were designated for general corporate purposes. During the nine months ended October 28, 2022, we also paid $760 million due to the scheduled payoff of notes at maturity.



Our commercial paper program is supported by the 2020 Credit Agreement and the
Third Amended and Restated Credit Agreement. The amount available to be drawn
under the 2020 Credit Agreement and the Third 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 Third Amended and Restated
Credit Agreement as of October 28, 2022, and October 29, 2021. Total combined
availability under the 2020 Credit Agreement and the Third Amended and Restated
Credit Agreement as of October 28, 2022 was $4.0 billion.

The 2020 Credit Agreement and the Third Amended and Restated Credit Agreement contain customary representations, warranties, and covenants. We were in compliance with those covenants at October 28, 2022.

The following table includes additional information related to our debt for the nine months ended October 28, 2022, and October 29, 2021:



                                                                            Nine Months Ended
(In millions)                                                   October 28, 2022         October 29, 2021
Net proceeds from issuance of debt                             $         9,667          $        4,972
Repayment of debt                                                         (831)                   (595)

Maximum commercial paper outstanding at any period                       2,470                     400
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 cash used to repurchase shares for
the nine months ended October 28, 2022, and October 29, 2021:

                                                          Nine Months Ended

(In millions, except per share data) October 28, 2022 October 29, 2021


    Total amount paid for share repurchases   $          12,127      $          8,999
    Total number of shares repurchased                     61.2                  46.6
    Average price paid per share              $          198.12      $         193.16

As of October 28, 2022, we had $7.7 billion remaining available under our share repurchase program with no expiration date. We expect to repurchase shares totaling approximately $13.0 billion in 2022 (including the $12.1 billion repurchased during the first nine months of fiscal year 2022).

Dividends

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Dividends are paid in the quarter immediately following the quarter in which
they are declared. Dividends paid per share increased from $2.00 per share for
the nine months ended October 29, 2021, to $2.65 per share for the nine months
ended October 28, 2022.

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 by Standard & Poor's (S&P) and Moody's as of November 23, 2022,
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.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES



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 and estimates have not changed
significantly since the filing of the Annual Report.

Long-Lived Asset Impairment

Description



We review the carrying amounts of long-lived assets whenever certain events or
changes in circumstances indicate that the carrying amounts may not be
recoverable. When evaluating long-lived assets for impairment, our asset group
is generally at an individual location level, as that is the lowest level for
which cash flows are identifiable. Cash flows for individual locations do not
include an allocation of corporate overhead. During the three months ended
October 28, 2022, the Company determined it was more likely than not that the
assets within the Canadian retail business would be sold or otherwise disposed
of significantly before the end of their previously estimated useful lives and
were evaluated for recoverability. Based on the proposed transaction, the
Company reconsidered the appropriate asset grouping of long-lived assets
attributable to the Company's Canadian locations given the change in the
Company's expectations regarding use and disposition of its associated assets.
The Company determined the total Canada retail business (Canada asset group) to
be the appropriate asset group for which Canadian business assets should be
evaluated, as this represents the lowest level for which identifiable cash flows
are largely independent of the cash flows of other groups of assets and
liabilities. Changes in asset group determinations are accounted for on a
prospective basis.

A potential impairment has occurred if the fair value of the asset group is less
than the asset group's carrying value. The carrying value of the Canada asset
group includes substantially all assets and liabilities of the Canadian retail
business, including accounts receivable, inventory, property, operating and
finance lease right-of-use assets, definite-lived intangible assets, operating
liabilities including accounts payable and accrued compensation, and operating
and finance lease liabilities. The cumulative foreign currency translation
adjustment balance is excluded from the carrying value of the Canada asset group
in evaluating the recoverability of a held and used asset group.

We use an income approach to determine the fair value of our individual
operating locations, and a market approach to determine the fair value of our
individual locations identified for sale or closure. A market approach of an
orderly transaction under current market conditions was used in determining the
estimated fair value of the Canada asset group, which was based on the proposed
transaction price, inclusive of deferred consideration.
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Judgments and uncertainties involved in the estimate



Our impairment evaluations require us to apply judgment in determining whether
an event or changes in circumstances indicate that an asset group's carrying
amount may not be recoverable, including the evaluation of whether it is more
likely than not a location will be closed or an asset will be otherwise disposed
of significantly before the end of its previously estimated useful life. Our
impairment loss calculations require us to apply judgment in estimating expected
future cash flows, including estimated sales, margin, and controllable expenses,
assumptions about market performance, and estimated selling prices or lease
rates for locations identified for closure.

Effect if actual results differ from assumptions

During the three months ended October 28, 2022, the Company recorded $2.1 billion of long-lived asset impairment within SG&A in the consolidated statements of earnings, which reflects the full carrying value of the long-lived assets of the Canada asset group. See Note 4 for additional information.

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