|
Delaware
|
|
|
|
95-3261426
|
|
(State or other jurisdiction of incorporation or organization)
|
|
|
|
(I.R.S. Employer Identification No.)
|
2455 Paces Ferry Road
|
|
|
|
|
||
Atlanta,
|
Georgia
|
|
|
|
30339
|
|
(Address of principal executive offices)
|
|
|
|
(Zip Code)
|
|
|
|
|
Item 1.
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
|
|
|
Item 1A.
|
||
Item 2.
|
||
Item 6.
|
||
|
|
|
Term
|
|
Definition
|
ASR
|
|
Accelerated share repurchase
|
ASU
|
|
Accounting Standards Update
|
Comparable sales
|
|
|
Exchange Act
|
|
Securities Exchange Act of 1934, as amended
|
FASB
|
|
Financial Accounting Standards Board
|
fiscal 2018
|
|
Fiscal year ended February 3, 2019 (includes 53 weeks)
|
fiscal 2019
|
|
Fiscal year ending February 2, 2020 (includes 52 weeks)
|
GAAP
|
|
U.S. generally accepted accounting principles
|
Interline
|
|
The legacy Interline Brands business, now operating as a part of The Home Depot Pro
|
MD&A
|
|
Management's Discussion and Analysis of Financial Condition and Results of Operations
|
NOPAT
|
|
Net operating profit after tax
|
Restoration Plan
|
|
Home Depot FutureBuilder Restoration Plan
|
ROIC
|
|
Return on invested capital
|
SEC
|
|
Securities and Exchange Commission
|
Securities Act
|
|
Securities Act of 1933, as amended
|
SG&A
|
|
Selling, general and administrative
|
Tax Act
|
|
2017 tax reform, commonly referred to as the Tax Cuts and Jobs Act of 2017
|
2018 Form 10-K
|
|
Annual Report on Form 10-K for fiscal 2018 as filed with the SEC on March 28, 2019
|
in millions, except per share data
|
November 3,
2019 |
|
February 3,
2019 |
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
2,193
|
|
|
$
|
1,778
|
|
Receivables, net
|
2,231
|
|
|
1,936
|
|
||
Merchandise inventories
|
15,711
|
|
|
13,925
|
|
||
Other current assets
|
1,039
|
|
|
890
|
|
||
Total current assets
|
21,174
|
|
|
18,529
|
|
||
Net property and equipment
|
22,472
|
|
|
22,375
|
|
||
Operating lease right-of-use assets
|
5,638
|
|
|
—
|
|
||
Goodwill
|
2,253
|
|
|
2,252
|
|
||
Other assets
|
772
|
|
|
847
|
|
||
Total assets
|
$
|
52,309
|
|
|
$
|
44,003
|
|
|
|
|
|
||||
Liabilities and Stockholders' Equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Short-term debt
|
$
|
695
|
|
|
$
|
1,339
|
|
Accounts payable
|
9,240
|
|
|
7,755
|
|
||
Accrued salaries and related expenses
|
1,467
|
|
|
1,506
|
|
||
Sales taxes payable
|
686
|
|
|
656
|
|
||
Deferred revenue
|
2,121
|
|
|
1,782
|
|
||
Current installments of long-term debt
|
1,818
|
|
|
1,056
|
|
||
Current operating lease liabilities
|
828
|
|
|
—
|
|
||
Other accrued expenses
|
2,710
|
|
|
2,622
|
|
||
Total current liabilities
|
19,565
|
|
|
16,716
|
|
||
Long-term debt, excluding current installments
|
26,597
|
|
|
26,807
|
|
||
Long-term operating lease liabilities
|
5,113
|
|
|
—
|
|
||
Other long-term liabilities
|
2,116
|
|
|
2,358
|
|
||
Total liabilities
|
53,391
|
|
|
45,881
|
|
||
|
|
|
|
||||
Common stock, par value $0.05; authorized: 10,000 shares; issued: 1,785 shares at November 3, 2019 and 1,782 shares at February 3, 2019; outstanding: 1,090 shares at November 3, 2019 and 1,105 shares at February 3, 2019
|
89
|
|
|
89
|
|
||
Paid-in capital
|
10,747
|
|
|
10,578
|
|
||
Retained earnings
|
50,729
|
|
|
46,423
|
|
||
Accumulated other comprehensive loss
|
(801
|
)
|
|
(772
|
)
|
||
Treasury stock, at cost, 695 shares at November 3, 2019 and 677 shares at February 3, 2019
|
(61,846
|
)
|
|
(58,196
|
)
|
||
Total stockholders’ (deficit) equity
|
(1,082
|
)
|
|
(1,878
|
)
|
||
Total liabilities and stockholders’ equity
|
$
|
52,309
|
|
|
$
|
44,003
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
in millions, except per share data
|
November 3,
2019 |
|
October 28,
2018 |
|
November 3,
2019 |
|
October 28,
2018 |
||||||||
Net sales
|
$
|
27,223
|
|
|
$
|
26,302
|
|
|
$
|
84,443
|
|
|
$
|
81,712
|
|
Cost of sales
|
17,836
|
|
|
17,151
|
|
|
55,607
|
|
|
53,579
|
|
||||
Gross profit
|
9,387
|
|
|
9,151
|
|
|
28,836
|
|
|
28,133
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative
|
4,942
|
|
|
4,808
|
|
|
14,926
|
|
|
14,591
|
|
||||
Depreciation and amortization
|
498
|
|
|
473
|
|
|
1,470
|
|
|
1,390
|
|
||||
Total operating expenses
|
5,440
|
|
|
5,281
|
|
|
16,396
|
|
|
15,981
|
|
||||
Operating income
|
3,947
|
|
|
3,870
|
|
|
12,440
|
|
|
12,152
|
|
||||
Interest and other (income) expense:
|
|
|
|
|
|
|
|
||||||||
Interest and investment income
|
(22
|
)
|
|
(25
|
)
|
|
(56
|
)
|
|
(73
|
)
|
||||
Interest expense
|
302
|
|
|
249
|
|
|
892
|
|
|
782
|
|
||||
Interest and other, net
|
280
|
|
|
224
|
|
|
836
|
|
|
709
|
|
||||
Earnings before provision for income taxes
|
3,667
|
|
|
3,646
|
|
|
11,604
|
|
|
11,443
|
|
||||
Provision for income taxes
|
898
|
|
|
779
|
|
|
2,843
|
|
|
2,666
|
|
||||
Net earnings
|
$
|
2,769
|
|
|
$
|
2,867
|
|
|
$
|
8,761
|
|
|
$
|
8,777
|
|
|
|
|
|
|
|
|
|
||||||||
Basic weighted average common shares
|
1,089
|
|
|
1,135
|
|
|
1,096
|
|
|
1,144
|
|
||||
Basic earnings per share
|
$
|
2.54
|
|
|
$
|
2.53
|
|
|
$
|
7.99
|
|
|
$
|
7.67
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted weighted average common shares
|
1,094
|
|
|
1,141
|
|
|
1,100
|
|
|
1,150
|
|
||||
Diluted earnings per share
|
$
|
2.53
|
|
|
$
|
2.51
|
|
|
$
|
7.96
|
|
|
$
|
7.63
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
in millions
|
November 3,
2019 |
|
October 28,
2018 |
|
November 3,
2019 |
|
October 28,
2018 |
||||||||
Net earnings
|
$
|
2,769
|
|
|
$
|
2,867
|
|
|
$
|
8,761
|
|
|
$
|
8,777
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustments
|
(23
|
)
|
|
59
|
|
|
(7
|
)
|
|
(204
|
)
|
||||
Cash flow hedges, net of tax
|
(2
|
)
|
|
(2
|
)
|
|
4
|
|
|
46
|
|
||||
Other
|
—
|
|
|
—
|
|
|
5
|
|
|
7
|
|
||||
Total other comprehensive income (loss)
|
(25
|
)
|
|
57
|
|
|
2
|
|
|
(151
|
)
|
||||
Comprehensive income
|
$
|
2,744
|
|
|
$
|
2,924
|
|
|
$
|
8,763
|
|
|
$
|
8,626
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
in millions
|
November 3,
2019 |
|
October 28,
2018 |
|
November 3,
2019 |
|
October 28,
2018 |
||||||||
Common Stock:
|
|
|
|
|
|
|
|
||||||||
Balance at beginning of period
|
$
|
89
|
|
|
$
|
89
|
|
|
$
|
89
|
|
|
$
|
89
|
|
Shares issued under employee stock plans
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Balance at end of period
|
89
|
|
|
89
|
|
|
89
|
|
|
89
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Paid-in Capital:
|
|
|
|
|
|
|
|
||||||||
Balance at beginning of period
|
10,777
|
|
|
10,079
|
|
|
10,578
|
|
|
10,192
|
|
||||
Shares issued under employee stock plans
|
20
|
|
|
10
|
|
|
79
|
|
|
21
|
|
||||
Stock-based compensation expense
|
50
|
|
|
52
|
|
|
190
|
|
|
196
|
|
||||
Repurchases of common stock
|
(100
|
)
|
|
268
|
|
|
(100
|
)
|
|
—
|
|
||||
Balance at end of period
|
10,747
|
|
|
10,409
|
|
|
10,747
|
|
|
10,409
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Retained Earnings:
|
|
|
|
|
|
|
|
||||||||
Balance at beginning of period
|
49,446
|
|
|
43,543
|
|
|
46,423
|
|
|
39,935
|
|
||||
Cumulative effect of accounting changes
|
—
|
|
|
—
|
|
|
26
|
|
|
75
|
|
||||
Net earnings
|
2,769
|
|
|
2,867
|
|
|
8,761
|
|
|
8,777
|
|
||||
Cash dividends
|
(1,486
|
)
|
|
(1,175
|
)
|
|
(4,477
|
)
|
|
(3,548
|
)
|
||||
Other
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
(4
|
)
|
||||
Balance at end of period
|
50,729
|
|
|
45,235
|
|
|
50,729
|
|
|
45,235
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Accumulated Other Comprehensive Income (Loss):
|
|
|
|
|
|
|
|
||||||||
Balance at beginning of period
|
(776
|
)
|
|
(774
|
)
|
|
(772
|
)
|
|
(566
|
)
|
||||
Cumulative effect of accounting change
|
—
|
|
|
—
|
|
|
(31
|
)
|
|
—
|
|
||||
Foreign currency translation adjustments
|
(23
|
)
|
|
59
|
|
|
(7
|
)
|
|
(204
|
)
|
||||
Cash flow hedges, net of tax
|
(2
|
)
|
|
(2
|
)
|
|
4
|
|
|
46
|
|
||||
Other
|
—
|
|
|
—
|
|
|
5
|
|
|
7
|
|
||||
Balance at end of period
|
(801
|
)
|
|
(717
|
)
|
|
(801
|
)
|
|
(717
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Treasury Stock:
|
|
|
|
|
|
|
|
||||||||
Balance at beginning of period
|
(60,696
|
)
|
|
(50,928
|
)
|
|
(58,196
|
)
|
|
(48,196
|
)
|
||||
Repurchases of common stock
|
(1,150
|
)
|
|
(2,768
|
)
|
|
(3,650
|
)
|
|
(5,500
|
)
|
||||
Balance at end of period
|
(61,846
|
)
|
|
(53,696
|
)
|
|
(61,846
|
)
|
|
(53,696
|
)
|
||||
Total stockholders' (deficit) equity
|
$
|
(1,082
|
)
|
|
$
|
1,320
|
|
|
$
|
(1,082
|
)
|
|
$
|
1,320
|
|
|
Nine Months Ended
|
||||||
in millions
|
November 3,
2019 |
|
October 28,
2018 |
||||
Cash Flows from Operating Activities:
|
|
|
|
||||
Net earnings
|
$
|
8,761
|
|
|
$
|
8,777
|
|
Reconciliation of net earnings to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
1,701
|
|
|
1,603
|
|
||
Stock-based compensation expense
|
197
|
|
|
204
|
|
||
Changes in receivables, net
|
(298
|
)
|
|
(196
|
)
|
||
Changes in merchandise inventories
|
(1,788
|
)
|
|
(2,041
|
)
|
||
Changes in other current assets
|
(152
|
)
|
|
(480
|
)
|
||
Changes in accounts payable and accrued expenses
|
1,616
|
|
|
2,134
|
|
||
Changes in deferred revenue
|
340
|
|
|
156
|
|
||
Changes in income taxes payable
|
116
|
|
|
61
|
|
||
Changes in deferred income taxes
|
107
|
|
|
(64
|
)
|
||
Other operating activities
|
64
|
|
|
(118
|
)
|
||
Net cash provided by operating activities
|
10,664
|
|
|
10,036
|
|
||
|
|
|
|
||||
Cash Flows from Investing Activities:
|
|
|
|
||||
Capital expenditures, net of non-cash capital expenditures
|
(1,891
|
)
|
|
(1,711
|
)
|
||
Proceeds from sales of property and equipment
|
21
|
|
|
21
|
|
||
Other investing activities
|
(10
|
)
|
|
(3
|
)
|
||
Net cash used in investing activities
|
(1,880
|
)
|
|
(1,693
|
)
|
||
|
|
|
|
||||
Cash Flows from Financing Activities:
|
|
|
|
||||
Repayments of short-term debt, net
|
(644
|
)
|
|
(161
|
)
|
||
Proceeds from long-term debt, net of discounts and premiums
|
1,404
|
|
|
—
|
|
||
Repayments of long-term debt
|
(1,046
|
)
|
|
(1,192
|
)
|
||
Repurchases of common stock
|
(3,909
|
)
|
|
(5,518
|
)
|
||
Proceeds from sales of common stock
|
185
|
|
|
140
|
|
||
Cash dividends
|
(4,477
|
)
|
|
(3,548
|
)
|
||
Other financing activities
|
9
|
|
|
99
|
|
||
Net cash used in financing activities
|
(8,478
|
)
|
|
(10,180
|
)
|
||
Change in cash and cash equivalents
|
306
|
|
|
(1,837
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
109
|
|
|
6
|
|
||
Cash and cash equivalents at beginning of period
|
1,778
|
|
|
3,595
|
|
||
Cash and cash equivalents at end of period
|
$
|
2,193
|
|
|
$
|
1,764
|
|
|
|
|
|
||||
Supplemental Disclosures:
|
|
|
|
||||
Cash paid for interest, net of interest capitalized
|
$
|
910
|
|
|
$
|
855
|
|
Cash paid for income taxes
|
2,660
|
|
|
3,017
|
|
1.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
2.
|
NET SALES
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
in millions
|
November 3,
2019 |
|
October 28,
2018 |
|
November 3,
2019 |
|
October 28,
2018 |
||||||||
Net sales – in the U.S.
|
$
|
24,995
|
|
|
$
|
24,083
|
|
|
$
|
77,634
|
|
|
$
|
74,978
|
|
Net sales – outside the U.S.
|
2,228
|
|
|
2,219
|
|
|
6,809
|
|
|
6,734
|
|
||||
Net sales
|
$
|
27,223
|
|
|
$
|
26,302
|
|
|
$
|
84,443
|
|
|
$
|
81,712
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
in millions
|
November 3,
2019 |
|
October 28,
2018 |
|
November 3,
2019 |
|
October 28,
2018 |
||||||||
Net sales – products
|
$
|
25,887
|
|
|
$
|
24,922
|
|
|
$
|
80,599
|
|
|
$
|
77,733
|
|
Net sales – services
|
1,336
|
|
|
1,380
|
|
|
3,844
|
|
|
3,979
|
|
||||
Net sales
|
$
|
27,223
|
|
|
$
|
26,302
|
|
|
$
|
84,443
|
|
|
$
|
81,712
|
|
Major Product Line
|
|
Merchandising Departments
|
Building Materials
|
|
Building Materials, Electrical/Lighting, Lumber, Millwork, and Plumbing
|
Décor
|
|
Appliances, Décor/Storage, Flooring, Kitchen and Bath, and Paint
|
Hardlines
|
|
Hardware, Indoor Garden, Outdoor Garden, and Tools
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
in millions
|
November 3,
2019 |
|
October 28,
2018 |
|
November 3,
2019 |
|
October 28,
2018 |
||||||||
Building Materials
|
$
|
10,299
|
|
|
$
|
10,243
|
|
|
$
|
30,198
|
|
|
$
|
30,224
|
|
Décor
|
9,383
|
|
|
8,919
|
|
|
28,178
|
|
|
26,985
|
|
||||
Hardlines
|
7,541
|
|
|
7,140
|
|
|
26,067
|
|
|
24,503
|
|
||||
Net sales
|
$
|
27,223
|
|
|
$
|
26,302
|
|
|
$
|
84,443
|
|
|
$
|
81,712
|
|
3.
|
PROPERTY AND LEASES
|
in millions
|
Consolidated Balance Sheet Caption
|
November 3,
2019 |
||
Assets:
|
|
|
||
Operating lease assets
|
Operating lease right-of-use assets
|
$
|
5,638
|
|
Finance lease assets
|
Net property and equipment
|
876
|
|
|
Total lease assets
|
|
$
|
6,514
|
|
|
|
|
||
Liabilities:
|
|
|
||
Current:
|
|
|
||
Operating lease liabilities
|
Current operating lease liabilities
|
$
|
828
|
|
Finance lease liabilities
|
Current installments of long-term debt
|
69
|
|
|
Long-term:
|
|
|
||
Operating lease liabilities
|
Long-term operating lease liabilities
|
5,113
|
|
|
Finance lease liabilities
|
Long-term debt, excluding current installments
|
1,035
|
|
|
Total lease liabilities
|
|
$
|
7,045
|
|
in millions
|
Consolidated Statement of Earnings Caption
|
Three Months Ended
November 3, 2019 |
|
Nine Months Ended
November 3, 2019 |
||||
Operating lease cost
|
Selling, general and administrative
|
$
|
211
|
|
|
$
|
626
|
|
Finance lease cost:
|
|
|
|
|
||||
Amortization of leased assets
|
Depreciation and amortization
|
21
|
|
|
64
|
|
||
Interest on lease liabilities
|
Interest expense
|
23
|
|
|
69
|
|
||
Short-term lease cost
|
Selling, general and administrative
|
30
|
|
|
73
|
|
||
Variable lease cost
|
Selling, general and administrative
|
53
|
|
|
175
|
|
||
Sublease income
|
Selling, general and administrative
|
(3
|
)
|
|
(10
|
)
|
||
Net lease cost
|
|
$
|
335
|
|
|
$
|
997
|
|
|
November 3,
2019 |
|
Weighted Average Remaining Lease Term (Years):
|
|
|
Operating leases
|
10
|
|
Finance leases
|
13
|
|
|
|
|
Weighted Average Discount Rate:
|
|
|
Operating leases
|
3.1
|
%
|
Finance leases
|
10.9
|
%
|
in millions
|
Operating
Leases |
|
Finance
Leases |
||||
Fiscal 2019
|
$
|
239
|
|
|
$
|
40
|
|
Fiscal 2020
|
953
|
|
|
156
|
|
||
Fiscal 2021
|
845
|
|
|
154
|
|
||
Fiscal 2022
|
745
|
|
|
153
|
|
||
Fiscal 2023
|
650
|
|
|
147
|
|
||
Thereafter
|
3,274
|
|
|
1,074
|
|
||
Total lease payments
|
6,706
|
|
|
1,724
|
|
||
Less imputed interest
|
765
|
|
|
620
|
|
||
Present value of lease liabilities
|
$
|
5,941
|
|
|
$
|
1,104
|
|
in millions
|
Operating
Leases |
|
Capital
Leases |
||||
Fiscal 2019
|
$
|
976
|
|
|
$
|
150
|
|
Fiscal 2020
|
912
|
|
|
167
|
|
||
Fiscal 2021
|
792
|
|
|
143
|
|
||
Fiscal 2022
|
682
|
|
|
142
|
|
||
Fiscal 2023
|
584
|
|
|
137
|
|
||
Thereafter
|
3,090
|
|
|
970
|
|
||
|
$
|
7,036
|
|
|
1,709
|
|
|
Less imputed interest
|
|
|
660
|
|
|||
Net present value of capital lease obligations
|
|
|
1,049
|
|
|||
Less current installments
|
|
|
57
|
|
|||
Long-term capital lease obligations, excluding current installments
|
|
|
$
|
992
|
|
in millions
|
Nine Months Ended
November 3, 2019 |
||
Cash paid for amounts included in the measurement of lease liabilities:
|
|
||
Operating cash flows – operating leases
|
$
|
750
|
|
Operating cash flows – finance leases
|
69
|
|
|
Financing cash flows – finance leases
|
46
|
|
|
Leased assets obtained in exchange for new operating lease liabilities
|
589
|
|
|
Leased assets obtained in exchange for new finance lease liabilities
|
101
|
|
4.
|
DEBT AND DERIVATIVE INSTRUMENTS
|
•
|
The first tranche consisted of $1.0 billion of 2.95% senior notes due June 15, 2029 (the “2029 notes”) at a discount of $6 million. Interest on the 2029 notes is due semi-annually on June 15 and December 15 of each year, beginning December 15, 2019.
|
•
|
The second tranche consisted of $400 million of 3.90% senior notes due June 15, 2047 (the “2047 notes”) at a premium of $10 million. The 2047 notes form a single series with the Company’s $750 million 3.90% senior notes due June 15, 2047 that were issued in June 2017 and have the same terms. The aggregate principal amount outstanding of the Company’s senior notes due June 15, 2047 is $1.2 billion. Interest on the 2047 notes is due semi-annually on June 15 and December 15 of each year, beginning December 15, 2019, with interest accruing from June 15, 2019.
|
•
|
Issuance costs totaled $9.9 million. The net proceeds of the June 2019 issuance were used to repay the Company's 2.00% senior notes that matured on June 15, 2019 and for general corporate purposes, including repurchases of common stock.
|
5.
|
STOCKHOLDERS' EQUITY
|
shares in millions
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
November 3,
2019 |
|
October 28,
2018 |
|
November 3,
2019 |
|
October 28,
2018 |
|||||||||
Common stock:
|
|
|
|
|
|
|
|
||||||||
Balance at beginning of period
|
1,785
|
|
|
1,782
|
|
|
1,782
|
|
|
1,780
|
|
||||
Shares issued under employee stock plans
|
—
|
|
|
—
|
|
|
3
|
|
|
2
|
|
||||
Balance at end of period
|
1,785
|
|
|
1,782
|
|
|
1,785
|
|
|
1,782
|
|
||||
Treasury stock:
|
|
|
|
|
|
|
|
||||||||
Balance at beginning of period
|
(689
|
)
|
|
(637
|
)
|
|
(677
|
)
|
|
(622
|
)
|
||||
Repurchases of common stock
|
(6
|
)
|
|
(14
|
)
|
|
(18
|
)
|
|
(29
|
)
|
||||
Balance at end of period
|
(695
|
)
|
|
(651
|
)
|
|
(695
|
)
|
|
(651
|
)
|
||||
Shares outstanding at end of period
|
1,090
|
|
|
1,131
|
|
|
1,090
|
|
|
1,131
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Cash dividends per share
|
$
|
1.36
|
|
|
$
|
1.03
|
|
|
$
|
4.08
|
|
|
$
|
3.09
|
|
Agreement
Date
|
|
Settlement
Date
|
|
Agreement
Amount
|
|
Initial
Shares Delivered
|
|
Additional
Shares Delivered
|
|
Total
Shares Delivered
|
|||||
Q3 2019 (1)
|
|
Q4 2019 (2)
|
|
$
|
820
|
|
|
3.2
|
|
|
0.4
|
|
|
3.6
|
|
(1)
|
The fair market value of the initial 3.2 million shares on the date of delivery was $720 million and is included in treasury stock as of November 3, 2019, with the remaining $100 million included in paid-in capital.
|
(2)
|
We received an additional 0.4 million shares upon termination of the ASR agreement in November 2019.
|
6.
|
FAIR VALUE MEASUREMENTS
|
|
Fair Value at November 3, 2019 Using
|
|
Fair Value at February 3, 2019 Using
|
||||||||||||||||||||
in millions
|
Quoted Prices in Active Markets for Identical Assets
(Level 1)
|
|
Significant
Observable Inputs
(Level 2)
|
|
Significant
Unobservable Inputs
(Level 3)
|
|
Quoted Prices in Active Markets for Identical Assets
(Level 1)
|
|
Significant
Observable Inputs
(Level 2)
|
|
Significant
Unobservable Inputs
(Level 3)
|
||||||||||||
Derivative agreements – assets
|
$
|
—
|
|
|
$
|
92
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
138
|
|
|
$
|
—
|
|
Derivative agreements – liabilities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11
|
)
|
|
—
|
|
||||||
Total
|
$
|
—
|
|
|
$
|
92
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
127
|
|
|
$
|
—
|
|
|
November 3,
2019 |
|
February 3,
2019 |
||||||||||||
in millions
|
Fair Value
(Level 1)
|
|
Carrying
Value
|
|
Fair Value
(Level 1)
|
|
Carrying
Value
|
||||||||
Senior notes
|
$
|
31,545
|
|
|
$
|
27,311
|
|
|
$
|
28,348
|
|
|
$
|
26,814
|
|
7.
|
WEIGHTED AVERAGE COMMON SHARES
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||
in millions
|
November 3,
2019 |
|
October 28,
2018 |
|
November 3,
2019 |
|
October 28,
2018 |
||||
Basic weighted average common shares
|
1,089
|
|
|
1,135
|
|
|
1,096
|
|
|
1,144
|
|
Effect of potentially dilutive securities
|
5
|
|
|
6
|
|
|
4
|
|
|
6
|
|
Diluted weighted average common shares
|
1,094
|
|
|
1,141
|
|
|
1,100
|
|
|
1,150
|
|
|
|
|
|
|
|
|
|
||||
Anti-dilutive securities excluded from diluted weighted average common shares
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
8.
|
COMMITMENTS AND CONTINGENCIES
|
•
|
•
|
•
|
•
|
dollars in millions, except per share data
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
November 3,
2019 |
|
October 28,
2018 |
|
November 3,
2019 |
|
October 28,
2018 |
|||||||||
Net sales
|
$
|
27,223
|
|
|
$
|
26,302
|
|
|
$
|
84,443
|
|
|
$
|
81,712
|
|
Net earnings
|
$
|
2,769
|
|
|
$
|
2,867
|
|
|
$
|
8,761
|
|
|
$
|
8,777
|
|
Effective tax rate
|
24.5
|
%
|
|
21.4
|
%
|
|
24.5
|
%
|
|
23.3
|
%
|
||||
|
|
|
|
|
|
|
|
||||||||
Diluted earnings per share
|
$
|
2.53
|
|
|
$
|
2.51
|
|
|
$
|
7.96
|
|
|
$
|
7.63
|
|
|
|
|
|
|
|
|
|
||||||||
Net cash provided by operating activities
|
|
|
|
|
$
|
10,664
|
|
|
$
|
10,036
|
|
||||
Proceeds from long-term debt, net of discounts and premiums
|
|
|
|
|
$
|
1,404
|
|
|
$
|
—
|
|
||||
Repayments of long-term debt
|
|
|
|
|
$
|
1,046
|
|
|
$
|
1,192
|
|
||||
Repurchases of common stock
|
|
|
|
|
$
|
3,909
|
|
|
$
|
5,518
|
|
|
Three Months Ended
|
||||||||||||
|
November 3,
2019 |
|
October 28,
2018 |
||||||||||
dollars in millions
|
$
|
|
% of
Net Sales
|
|
$
|
|
% of
Net Sales |
||||||
Net sales
|
$
|
27,223
|
|
|
|
|
$
|
26,302
|
|
|
|
||
Gross profit
|
9,387
|
|
|
34.5
|
%
|
|
9,151
|
|
|
34.8
|
%
|
||
Operating expenses:
|
|
|
|
|
|
|
|
||||||
Selling, general and administrative
|
4,942
|
|
|
18.2
|
|
|
4,808
|
|
|
18.3
|
|
||
Depreciation and amortization
|
498
|
|
|
1.8
|
|
|
473
|
|
|
1.8
|
|
||
Total operating expenses
|
5,440
|
|
|
20.0
|
|
|
5,281
|
|
|
20.1
|
|
||
Operating income
|
3,947
|
|
|
14.5
|
|
|
3,870
|
|
|
14.7
|
|
||
Interest and other (income) expense:
|
|
|
|
|
|
|
|
||||||
Interest and investment income
|
(22
|
)
|
|
(0.1
|
)
|
|
(25
|
)
|
|
(0.1
|
)
|
||
Interest expense
|
302
|
|
|
1.1
|
|
|
249
|
|
|
0.9
|
|
||
Interest and other, net
|
280
|
|
|
1.0
|
|
|
224
|
|
|
0.9
|
|
||
Earnings before provision for income taxes
|
3,667
|
|
|
13.5
|
|
|
3,646
|
|
|
13.9
|
|
||
Provision for income taxes
|
898
|
|
|
3.3
|
|
|
779
|
|
|
3.0
|
|
||
Net earnings
|
$
|
2,769
|
|
|
10.2
|
%
|
|
$
|
2,867
|
|
|
10.9
|
%
|
|
|
|
Three Months Ended
|
|
|
||||||
Selected financial and sales data:
|
|
|
November 3,
2019 |
|
October 28,
2018 |
|
% Change
|
||||
Comparable sales (% change)
|
|
|
3.6%
|
|
|
4.8%
|
|
|
N/A
|
||
Comparable customer transactions (% change) (1)
|
|
|
1.8%
|
|
|
1.2%
|
|
|
N/A
|
||
Comparable average ticket (% change) (1)
|
|
|
1.8%
|
|
|
3.5%
|
|
|
N/A
|
||
Customer transactions (in millions) (1)
|
|
|
400.9
|
|
|
394.8
|
|
|
1.5%
|
||
Average ticket (1)
|
|
|
$
|
66.36
|
|
|
$
|
65.11
|
|
|
1.9%
|
Sales per square foot (1)
|
|
|
$
|
449.17
|
|
|
$
|
433.99
|
|
|
3.5%
|
Diluted earnings per share
|
|
|
$
|
2.53
|
|
|
$
|
2.51
|
|
|
0.8%
|
(1)
|
Does not include results for Interline.
|
|
Nine Months Ended
|
||||||||||||
|
November 3,
2019 |
|
October 28,
2018 |
||||||||||
dollars in millions
|
$
|
|
% of
Net Sales
|
|
$
|
|
% of
Net Sales
|
||||||
Net sales
|
$
|
84,443
|
|
|
|
|
$
|
81,712
|
|
|
|
||
Gross profit
|
28,836
|
|
|
34.1
|
%
|
|
28,133
|
|
|
34.4
|
%
|
||
Operating expenses:
|
|
|
|
|
|
|
|
||||||
Selling, general and administrative
|
14,926
|
|
|
17.7
|
|
|
14,591
|
|
|
17.9
|
|
||
Depreciation and amortization
|
1,470
|
|
|
1.7
|
|
|
1,390
|
|
|
1.7
|
|
||
Total operating expenses
|
16,396
|
|
|
19.4
|
|
|
15,981
|
|
|
19.6
|
|
||
Operating income
|
12,440
|
|
|
14.7
|
|
|
12,152
|
|
|
14.9
|
|
||
Interest and other (income) expense:
|
|
|
|
|
|
|
|
||||||
Interest and investment income
|
(56
|
)
|
|
(0.1
|
)
|
|
(73
|
)
|
|
(0.1
|
)
|
||
Interest expense
|
892
|
|
|
1.1
|
|
|
782
|
|
|
1.0
|
|
||
Interest and other, net
|
836
|
|
|
1.0
|
|
|
709
|
|
|
0.9
|
|
||
Earnings before provision for income taxes
|
11,604
|
|
|
13.7
|
|
|
11,443
|
|
|
14.0
|
|
||
Provision for income taxes
|
2,843
|
|
|
3.4
|
|
|
2,666
|
|
|
3.3
|
|
||
Net earnings
|
$
|
8,761
|
|
|
10.4
|
%
|
|
$
|
8,777
|
|
|
10.7
|
%
|
|
|
|
Nine Months Ended
|
|
|
||||||
Selected financial and sales data:
|
|
|
November 3, 2019
|
|
October 28, 2018
|
|
% Change
|
||||
Comparable sales (% change)
|
|
|
3.0%
|
|
|
5.8%
|
|
|
N/A
|
||
Comparable customer transactions (% change) (1)
|
|
|
1.1%
|
|
|
1.0%
|
|
|
N/A
|
||
Comparable average ticket (% change) (1)
|
|
|
1.9%
|
|
|
4.7%
|
|
|
N/A
|
||
Customer transactions (in millions) (1)
|
|
|
1,246.4
|
|
|
1,226.0
|
|
|
1.7%
|
||
Average ticket (1)
|
|
|
$
|
67.00
|
|
|
$
|
65.79
|
|
|
1.8%
|
Sales per square foot (1)
|
|
|
$
|
464.68
|
|
|
$
|
449.94
|
|
|
3.3%
|
Diluted earnings per share
|
|
|
$
|
7.96
|
|
|
$
|
7.63
|
|
|
4.3%
|
(1)
|
Does not include results for Interline.
|
|
|
Twelve Months Ended
|
||||||
dollars in millions
|
|
November 3,
2019 |
|
October 28,
2018 |
||||
Net earnings
|
|
$
|
11,105
|
|
|
$
|
10,556
|
|
Interest and other, net
|
|
1,101
|
|
|
955
|
|
||
Provision for income taxes
|
|
3,612
|
|
|
3,830
|
|
||
Operating income
|
|
15,818
|
|
|
15,341
|
|
||
Income tax adjustment (1)
|
|
(3,845
|
)
|
|
(4,012
|
)
|
||
NOPAT
|
|
$
|
11,973
|
|
|
$
|
11,329
|
|
|
|
|
|
|
||||
Average debt and equity
|
|
$
|
26,520
|
|
|
$
|
26,857
|
|
|
|
|
|
|
||||
ROIC
|
|
45.1
|
%
|
|
42.2
|
%
|
(1)
|
Income tax adjustment is defined as operating income multiplied by our effective tax rate for the trailing twelve months.
|
•
|
$4.5 billion of cash dividends paid, $3.9 billion of share repurchases, $1.0 billion of net repayments of long-term debt, and $644 million of net repayments of short-term debt, partially offset by $1.4 billion of net proceeds from long-term debt in the first nine months of fiscal 2019, and
|
•
|
$5.5 billion of share repurchases, $3.5 billion of cash dividends paid, and $1.2 billion of net repayments of long-term debt in the first nine months of fiscal 2018.
|
Period
|
|
|
Total
Number of
Shares
Purchased(1)
|
|
Average Price
Paid
Per Share(1)
|
|
Total Number of
Shares Purchased as
Part of Publicly
Announced Program(2)
|
|
Dollar Value of
Shares that May Yet
Be Purchased
Under the Program(2)
|
||||||
August 5, 2019 – September 1, 2019
|
|
|
1,846,988
|
|
|
$
|
212.68
|
|
|
1,842,151
|
|
|
$
|
12,385,451,643
|
|
September 2, 2019 – September 29, 2019
|
(3)
|
|
3,336,987
|
|
|
227.92
|
|
|
3,324,530
|
|
|
11,527,253,300
|
|
||
September 30, 2019 – November 3, 2019
|
|
|
1,347
|
|
|
232.23
|
|
|
—
|
|
|
11,527,253,300
|
|
||
Total
|
|
|
5,185,322
|
|
|
222.49
|
|
|
5,166,681
|
|
|
|
Exhibit
|
|
Description
|
*
|
||
[Form 10-Q filed on September 1, 2011, Exhibit 3.1]
|
||
*
|
||
[Form 8-K filed on March 4, 2019, Exhibit 3.2]
|
||
†
|
||
|
||
|
||
|
||
|
||
|
||
101.INS
|
|
XBRL Instance Document - the instance document does not appear in the Interactive Data file because its XBRL tags are embedded within the Inline XBRL document
|
101.SCH
|
|
Inline XBRL Taxonomy Extension Schema Document
|
101.CAL
|
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document
|
101.DEF
|
|
Inline XBRL Taxonomy Extension Definition Linkbase Document
|
101.LAB
|
|
Inline XBRL Taxonomy Extension Label Linkbase Document
|
101.PRE
|
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document
|
104
|
|
Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)
|
†
|
Management contract or compensatory plan or arrangement
|
THE HOME DEPOT, INC.
(Registrant)
|
|
|
|
By:
|
/s/ CRAIG A. MENEAR
|
|
Craig A. Menear, Chairman,
Chief Executive Officer and President
|
|
|
|
/s/ RICHARD V. MCPHAIL
|
|
Richard V. McPhail, Executive Vice President and Chief Financial Officer
|
|
|
Date:
|
November 25, 2019
|
/s/ CRAIG MENEAR
|
|
|
|
Craig Menear
|
|
CEO
|
/s/ Richard McPhail
|
|
8/20/2019
|
Richard McPhail
|
|
Date Signed
|
Description
|
Registration
Statement Number
|
|
|
Form S-3
|
|
Depot Direct stock purchase program
|
333-221739
|
Debt securities
|
333-227052
|
|
|
Form S-8
|
|
The Home Depot, Inc. 1997 Omnibus Stock Incentive Plan
|
333-61733
|
The Home Depot Canada Registered Retirement Savings Plan
|
333-38946
|
The Home Depot, Inc. Restated and Amended Employee Stock Purchase Plan
|
333-151849
|
The Home Depot, Inc. Amended and Restated Employee Stock Purchase Plan
|
333-182374
|
The Home Depot, Inc. Non-Qualified Stock Option and Deferred Stock Units Plan and Agreement
|
333-56722
|
The Home Depot, Inc. 2005 Omnibus Stock Incentive Plan
|
333-125331
|
The Home Depot, Inc. 2005 Omnibus Stock Incentive Plan
|
333-153171
|
The Home Depot FutureBuilder and The Home Depot FutureBuilder for Puerto Rico
|
333-125332
|
1.
|
I have reviewed this quarterly report on Form 10-Q of The Home Depot, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ Craig A. Menear
|
Craig A. Menear
|
Chairman, Chief Executive Officer and President
|
1.
|
I have reviewed this quarterly report on Form 10-Q of The Home Depot, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ Richard V. McPhail
|
Richard V. McPhail
|
Executive Vice President and Chief Financial Officer
|
(1)
|
The Form 10-Q fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ Craig A. Menear
|
Craig A. Menear
|
Chairman, Chief Executive Officer and President
|
November 25, 2019
|
(1)
|
The Form 10-Q fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ Richard V. McPhail
|
Richard V. McPhail
|
Executive Vice President and Chief Financial Officer
|
November 25, 2019
|