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Can someone explain why the financial statement notes state a different number from the cash flow statement

Paul Natusch's Profile

I’ve been studying Lowes 2005 financial statements for several weeks, one of the issues that I can’t understand is:

1. Note 7 states: after discounts and expenses that $987 million was received from the issuance of new debt.
2. The statement of cash flows states that $1013 million was received.
3. I find it interesting that the $26 million difference is exactly twice the sum of the discounts plus expenses.

Can you explain the $26 million difference?


Lowe’s Companies, Inc.
Consolidated Statements of Cash Flows In Millions

Feb 3 Jan 28 Jan 30
Years Ended On 2006 2005 2004
Cash flows from financing activities:
Proceeds from issuance of long-term debt 1,013 - -

NOTE 7 - Long-Term Debt
In October 2005, the Company issued $1 billion of unsecured senior notes, comprised of two $500 million traunches maturing in October 2015 and October 2035, respectively, (Senior Notes). The first $500 million traunche of 5.0% Senior Notes was sold at a discount of $4 million. The second $500 million traunche of 5.5% Senior Notes was sold a discount of $8 million. Interest on the notes is payable semi-annually in arrears in April and October. The discount associated with the issuance is being amortized over the respective terms of the Senior Notes. Issuance costs were approximately $1 million and are being amortized over the respective terms of the Senior Notes. The net proceeds of $987 million were used in part for the repayment of $600 million in outstanding notes due December 2005. The remaining proceeds will be used for general corporate purposes and to finance repurchases of common stock.

Url contains financial statement and notes.


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