What changed in this filing

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Item 1. Financial Statements

2022-11-22 compared with 2022-08-23 · 107 added, 86 removed, 292 unchanged (40% of the section changed)

2 unchanged sentences

CONSOLIDATED BALANCE SHEETS

in millions, except per share data July 31,

in millions, except per share data October 30,

2022 January 30,

28 unchanged sentences

10,000 shares;

1,793 shares at July 31, 2022 and 1,792 shares at January 30, 2022;

1,024 shares at July 31, 2022 and 1,035 shares at January 30, 2022

1,793 shares at October 30, 2022 and 1,792 shares at January 30, 2022;

1,020 shares at October 30, 2022 and 1,035 shares at January 30, 2022

Paid-in capital 12,385 12,132

1 unchanged sentence

Accumulated other comprehensive loss ( 856 ) ( 704 )

Treasury stock, at cost, 769 shares at July 31, 2022 and 757 shares at January 30, 2022

Treasury stock, at cost, 773 shares at October 30, 2022 and 757 shares at January 30, 2022

( 85,788 ) ( 80,794 )

5 unchanged sentences

CONSOLIDATED STATEMENTS OF EARNINGS

Three Months Ended Six Months Ended

in millions, except per share data July 31,

2022 August 1,

2021 July 31,

2022 August 1,

Three Months Ended Nine Months Ended

in millions, except per share data October 30,

2022 October 31,

2021 October 30,

2022 October 31,

Net sales $ 38,872 $ 36,820 $ 121,572 $ 115,438

20 unchanged sentences

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Three Months Ended Six Months Ended

in millions July 31,

2022 August 1,

2021 July 31,

2022 August 1,

Three Months Ended Nine Months Ended

in millions October 30,

2022 October 31,

2021 October 30,

2022 October 31,

Net earnings $ 4,339 $ 4,129 $ 13,743 $ 13,081

8 unchanged sentences

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

Three Months Ended Six Months Ended

in millions July 31,

2022 August 1,

2021 July 31,

2022 August 1,

Three Months Ended Nine Months Ended

in millions October 30,

2022 October 31,

2021 October 30,

2022 October 31,

Common Stock:

27 unchanged sentences

CONSOLIDATED STATEMENTS OF CASH FLOWS

Six Months Ended

in millions July 31,

2022 August 1,

Nine Months Ended

in millions October 30,

2022 October 31,

Cash Flows from Operating Activities:

42 unchanged sentences

(including the Commonwealth of Puerto Rico and the territories of the U.S.

Virgin Islands and Guam), Canada, and Mexico, each representing one of our three operating segments, which we aggregate into one reportable segment due to their similar operating and financial characteristics.

Virgin Islands and Guam), Canada, and Mexico, each representing one of our three operating segments, which we aggregate into one reportable segment due to the similar nature of their operations and economic characteristics.

Basis of Presentation

4 unchanged sentences

There were no significant changes to our significant accounting policies as disclosed in the 2021 Form 10-K.

Recent Accounting Pronouncements

We did not adopt any new accounting pronouncements during the first six months of fiscal 2022 that had a material impact on our consolidated financial condition, results of operations or cash flows.

Recent accounting pronouncements pending adoption not discussed in the 2021 Form 10-K are either not applicable or will not have or are not expected to have a material impact on our consolidated financial condition, results of operations or cash flows.

Recently Adopted Accounting Pronouncements

We did not adopt any new accounting pronouncements during the first nine months of fiscal 2022 that had a material impact on our consolidated financial condition, results of operations or cash flows.

Recently Issued Accounting Pronouncements

In September 2022, the FASB issued ASU No.

2022-04, “Liabilities—Supplier Finance Programs (Topic 405-50) - Disclosure of Supplier Finance Program Obligations,” to enhance the transparency of supplier finance programs used by an entity in connection with the purchase of goods and services.

The standard requires entities that use supplier finance programs to disclose the key terms, including a description of payment terms, the confirmed amount outstanding under the program at the end of each reporting period, a description of where those obligations are presented on the balance sheet, and an annual rollforward, including the amount of obligations confirmed and the amount paid during the period.

The guidance does not affect the recognition, measurement, or financial statement presentation of obligations covered by supplier finance programs.

2022-04 is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, except for the requirement on rollforward information, which is effective for fiscal years beginning after December 15, 2023.

Early adoption is permitted.

We are currently evaluating the impact of the standard on our consolidated financial statements and related disclosures .

Recent accounting pronouncements pending adoption not discussed above or in the 2021 Form 10-K are either not applicable or will not have or are not expected to have a material impact on our consolidated financial condition, results of operations or cash flows.

The following table presents net sales, classified by geography:

Three Months Ended Six Months Ended

in millions July 31,

2022 August 1,

2021 July 31,

2022 August 1,

Three Months Ended Nine Months Ended

in millions October 30,

2022 October 31,

2021 October 30,

2022 October 31,

Net sales – in the U.S.

4 unchanged sentences

The following table presents net sales by products and services:

Three Months Ended Six Months Ended

in millions July 31,

2022 August 1,

2021 July 31,

2022 August 1,

Three Months Ended Nine Months Ended

in millions October 30,

2022 October 31,

2021 October 30,

2022 October 31,

Net sales – products $ 37,448 $ 35,383 $ 117,261 $ 111,371

7 unchanged sentences

The following table presents net sales by major product lines (and related services):

Three Months Ended Six Months Ended

in millions July 31,

2022 August 1,

2021 July 31,

2022 August 1,

Three Months Ended Nine Months Ended

in millions October 30,

2022 October 31,

2021 October 30,

2022 October 31,

Building Materials $ 15,343 $ 13,809 $ 46,095 $ 41,880

6 unchanged sentences

Such performance obligations are part of contracts with expected original durations of typically three months or less.

As of both July 31, 2022 and January 30, 2022, deferred revenue for products and services was $ 2.6 billion.

As of October 30, 2022 and January 30, 2022, deferred revenue for products and services was $ 2.2 billion and $ 2.6 billion, respectively.

We further record deferred revenue for the sale of gift cards and recognize the associated revenue upon the redemption of those gift cards, which generally occurs within six months of gift card issuance.

As of July 31, 2022 and January 30, 2022, our performance obligations for unredeemed gift cards were $ 938 million and $ 1.0 billion, respectively.

Gift card breakage income, which is our estimate of the portion of our gift card balance not expected to be redeemed, was immaterial during the three and six months ended July 31, 2022 and August 1, 2021.

As of both October 30, 2022 and January 30, 2022, our performance obligations for unredeemed gift cards were $ 1.0 billion.

Gift card breakage income, which is our estimate of the portion of our gift card balance not expected to be redeemed, was immaterial during the three and nine months ended October 30, 2022 and October 31, 2021.

PROPERTY AND LEASES

Net Property and Equipment

Net property and equipment includes accumulated depreciation and finance lease amortization of $ 27.2 billion as of July 31, 2022 and $ 26.1 billion as of January 30, 2022.

Net property and equipment includes accumulated depreciation and finance lease amortization of $ 27.5 billion as of October 30, 2022 and $ 26.1 billion as of January 30, 2022.

The following table presents the consolidated balance sheet location of assets and liabilities related to operating and finance leases:

in millions Consolidated Balance Sheet Classification July 31,

in millions Consolidated Balance Sheet Classification October 30,

2022 January 30,

8 unchanged sentences

Total lease liabilities $ 10,011 $ 9,419

(1) Finance lease assets are recorded net of accumulated amortization of $ 1.1 billion as of July 31, 2022 and $ 1.0 billion as of January 30, 2022.

(1) Finance lease assets are recorded net of accumulated amortization of $ 1.2 billion as of October 30, 2022 and $ 1.0 billion as of January 30, 2022.

The following table presents supplemental non-cash information related to leases:

Six Months Ended

in millions July 31,

2022 August 1,

Nine Months Ended

in millions October 30,

2022 October 31,

Lease assets obtained in exchange for new operating lease liabilities $ 1,308 $ 637

3 unchanged sentences

In July 2022, we expanded our commercial paper program from $ 3.0 billion to $ 5.0 billion to further enhance our financial flexibility.

All of our short-term borrowings in the first six months of fiscal 2022 were under our commercial paper program, and the maximum amount outstanding at any time was $ 2.7 billion.

All of our short-term borrowings in the first nine months of fiscal 2022 were under our commercial paper program, and the maximum amount outstanding at any time was $ 2.7 billion.

In connection with our program, we have back-up credit facilities with a consortium of banks.

1 unchanged sentence

These facilities replaced our previously existing five-year $ 2.0 billion credit facility, which was scheduled to expire in December 2023, and our 364 -day $ 1.0 billion credit facility, which was scheduled to expire in December 2022.

At July 31, 2022 and January 30, 2022, we had outstanding borrowings under our commercial paper program of $ 539 million and $ 1.0 billion, respectively.

At October 30, 2022, we had no outstanding borrowings under our commercial paper program, and at January 30, 2022, we had $ 1.0 billion of outstanding borrowings under our commercial paper program.

Long-Term Debt

September 2022 Issuance.

In September 2022, we issued three tranches of senior notes.

• The first tranche consisted of $ 750 million of 4.00 % senior notes due September 15, 2025 at a discount of $ 0.3 million.

Interest on these notes is due semi-annually on March 15 and September 15 of each year, beginning March 15, 2023.

• The second tranche consisted of $ 1.25 billion of 4.50 % senior notes due September 15, 2032 at a discount of $ 1 million.

Interest on these notes is due semi-annually on March 15 and September 15 of each year, beginning March 15, 2023.

• The third tranche consisted of $ 1.0 billion of 4.95 % senior notes due September 15, 2052 at a discount of $ 14 million.

Interest on these notes is due semi-annually on March 15 and September 15 of each year, beginning March 15, 2023.

• Issuance costs totaled $ 15 million.

March 2022 Issuance.

In March 2022, we issued four tranches of senior notes.

• The first tranche consisted of $ 500 million of 2.70 % senior notes due April 15, 2025 (the “2025 notes”) at a discount of $ 1 million.

Interest on the 2025 notes is due semi-annually on April 15 and October 15 of each year, beginning October 15, 2022.

• The second tranche consisted of $ 750 million of 2.875 % senior notes due April 15, 2027 (the “2027 notes”) at a discount of $ 4 million.

Interest on the 2027 notes is due semi-annually on April 15 and October 15 of each year, beginning October 15, 2022.

• The third tranche consisted of $ 1.25 billion of 3.25 % senior notes due April 15, 2032 (the “2032 notes”) at a discount of $ 6 million.

Interest on the 2032 notes is due semi-annually on April 15 and October 15 of each year, beginning October 15, 2022.

• The fourth tranche consisted of $ 1.5 billion of 3.625 % senior notes due April 15, 2052 (the “2052 notes”) at a discount of $ 32 million (together with the 2025 notes, the 2027 notes, and the 2032 notes, the “March 2022 issuance”).

Interest on the 2052 notes is due semi-annually on April 15 and October 15 of each year, beginning October 15, 2022.

• Issuance costs for the March 2022 issuance totaled $ 22 million.

The 2025 notes, 2027 notes, 2032 notes, and 2052 notes may be redeemed by us at any time, in whole or in part, at the redemption price plus accrued interest up to the redemption date.

• The first tranche consisted of $ 500 million of 2.70 % senior notes due April 15, 2025 at a discount of $ 1 million.

Interest on these notes is due semi-annually on April 15 and October 15 of each year, beginning October 15, 2022.

• The second tranche consisted of $ 750 million of 2.875 % senior notes due April 15, 2027 at a discount of $ 4 million.

Interest on these notes is due semi-annually on April 15 and October 15 of each year, beginning October 15, 2022.

• The third tranche consisted of $ 1.25 billion of 3.25 % senior notes due April 15, 2032 at a discount of $ 6 million.

Interest on these notes is due semi-annually on April 15 and October 15 of each year, beginning October 15, 2022.

• The fourth tranche consisted of $ 1.5 billion of 3.625 % senior notes due April 15, 2052 at a discount of $ 32 million.

Interest on these notes is due semi-annually on April 15 and October 15 of each year, beginning October 15, 2022.

• Issuance costs totaled $ 22 million.

Each of these senior notes may be redeemed by us at any time, in whole or in part, at the redemption price plus accrued interest up to the redemption date.

Prior to the Par Call Date, as defined in the notes, the redemption price is equal to the greater of (1) 100 % of the principal amount of the notes to be redeemed or (2) the sum of the present values of the remaining scheduled payments of principal and interest to the Par Call Date.

7 unchanged sentences

Derivative Instruments and Hedging Activities

We had outstanding interest rate swap agreements with combined notional amounts of $ 5.4 billion at both July 31, 2022 and January 30, 2022.

We had outstanding interest rate swap agreements with combined notional amounts of $ 5.4 billion at both October 30, 2022 and January 30, 2022.

These agreements are accounted for as fair value hedges that swap fixed for variable rate interest to hedge changes in the fair values of certain senior notes.

At July 31, 2022, the fair values of these agreements totaled $ 515 million, with $ 528 million recognized in other long-term liabilities and $ 13 million recognized in other assets on the consolidated balance sheet.

At October 30, 2022, the fair values of these agreements totaled $ 1.0 billion, all of which is recognized within other long-term liabilities on the consolidated balance sheet.

At January 30, 2022, the fair values of these agreements totaled $ 191 million, with $ 249 million recognized in other long-term liabilities and $ 58 million recognized in other assets on the consolidated balance sheet.

4 unchanged sentences

To further limit our credit risk, we enter into collateral security arrangements that provide for collateral to be received or posted when the net fair value of certain derivative instruments exceeds or falls below contractually established thresholds.

The cash collateral posted by the Company related to derivative instruments under our collateral security arrangements was $ 470 million as of July 31, 2022, which was recorded in other current assets on the consolidated balance sheet.

We did not hold any cash collateral as of July 31, 2022, and cash collateral both held and posted was immaterial as of January 30, 2022.

The cash collateral posted by the Company related to derivative instruments under our collateral security arrangements was $ 883 million as of October 30, 2022, which was recorded in other current assets on the consolidated balance sheet.

We did not hold any cash collateral as of October 30, 2022, and cash collateral both held and posted was immaterial as of January 30, 2022.

STOCKHOLDERS' EQUITY

Stock Rollforward

The following table presents a reconciliation of the number of shares of our common stock and cash dividends per share:

shares in millions Three Months Ended Six Months Ended

2022 August 1,

2021 July 31,

2022 August 1,

The following table presents a reconciliation of the number of shares of our common stock outstanding and cash dividends per share:

shares in millions Three Months Ended Nine Months Ended

2022 October 31,

2021 October 30,

2022 October 31,

Common stock:

9 unchanged sentences

Share Repurchases

In May 2021, our Board of Directors approved a $ 20.0 billion share repurchase authorization, of which $ 5.8 billion remained available as of July 31, 2022.

In August 2022, our Board of Directors approved a $ 15.0 billion share repurchase authorization that replaced the May 2021 authorization and does not have a prescribed expiration date.

In August 2022, our Board of Directors approved a $ 15.0 billion share repurchase authorization that replaced the previous authorization of $ 20.0 billion, which was approved in May 2021.

This new authorization does not have a prescribed expiration date.

As of October 30, 2022, $ 14.0 billion of the $ 15.0 billion share repurchase authorization remained available.

The following table presents information about our repurchases of common stock, all of which were completed through open market purchases:

Three Months Ended Six Months Ended

2022 August 1,

2021 July 31,

2022 August 1,

in millions Three Months Ended Nine Months Ended

2022 October 31,

2021 October 30,

2022 October 31,

Total number of shares repurchased 4 10 16 33

11 unchanged sentences

The following table presents the assets and liabilities that are measured at fair value on a recurring basis:

July 31, 2022 January 30, 2022

October 30, 2022 January 30, 2022

in millions Level 1

6 unchanged sentences

Long-lived assets, goodwill, and other intangible assets are subject to nonrecurring fair value measurement for the assessment of impairment.

We did not have any material assets or liabilities that were measured at fair value on a nonrecurring basis during the three and six months ended July 31, 2022 or August 1, 2021.

During the third quarter of fiscal 2022, we completed our annual assessment of the recoverability of goodwill for our U.S., Canada and Mexico reporting units based on qualitative factors.

We performed a qualitative assessment to determine if there were any indicators of impairment and concluded that while there have been events and circumstances in the macro-environment that have impacted us, we have not experienced any entity-specific indicators that would indicate that it is more likely than not that the fair value of any of our reporting units were less than their carrying amounts.

Additionally, during the third quarter of fiscal 2022, we completed our annual assessment of the recoverability of our indefinite-lived intangibles based on quantitative factors and concluded no impairment losses should be recognized.

We did not have any material assets or liabilities that were measured at fair value on a nonrecurring basis during the three and nine months ended October 30, 2022 or October 31, 2021.

Other Fair Value Disclosures

1 unchanged sentence

The following table presents the aggregate fair values and carrying values of our senior notes:

July 31, 2022 January 30, 2022

October 30, 2022 January 30, 2022

in millions Fair Value

5 unchanged sentences

The following table presents the reconciliation of our basic to diluted weighted average common shares:

Three Months Ended Six Months Ended

2022 August 1,

2021 July 31,

2022 August 1,

in millions Three Months Ended Nine Months Ended

2022 October 31,

2021 October 30,

2022 October 31,

Basic weighted average common shares 1,020 1,049 1,024 1,059

11 unchanged sentences

We have reviewed the consolidated balance sheet of The Home Depot, Inc.

and subsidiaries (the “Company”) as of July 31, 2022, the related consolidated statements of earnings, comprehensive income, and stockholders’ equity for the three-month and six-month periods ended July 31, 2022 and August 1, 2021, the related consolidated statements of cash flows for the six-month periods ended July 31, 2022 and August 1, 2021, and the related notes (collectively, the “consolidated interim financial information”).

and subsidiaries (the “Company”) as of October 30, 2022, the related consolidated statements of earnings, comprehensive income, and stockholders’ equity for the three-month and nine-month periods ended October 30, 2022 and October 31, 2021, the related consolidated statements of cash flows for the nine-month periods ended October 30, 2022 and October 31, 2021, and the related notes (collectively, the “consolidated interim financial information”).

Based on our reviews, we are not aware of any material modifications that should be made to the consolidated interim financial information for it to be in conformity with U.S.

12 unchanged sentences

Atlanta, Georgia

August 22, 2022

November 21, 2022

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements