HOME DEPOT, INC. 10-Q

Item 1. Financial Statements. THE HOME DEPOT, INC. CONSOLIDATED BALANCE SHEETS (Unaudited) in millions, except per share data October 30, 2022 January 30, 2022 Assets Current assets: Cash and cash equivalents $ 2,462 $ 2,343 Receivables, net 3,732 3,426 Merchandise inventories 25,719 22,068 Other current assets 1,768 1,218 Total current assets 33,681 29,055 Net property and equipment 25,240 25,199 Operating lease right-of-use assets 6,523 5,968 Goodwill 7,434 7,449 Other assets 3,988 4,205 Total assets $ 76,866 $ 71,876 Liabilities and Stockholders' Equity Current liabilities: Short-term debt $ — $ 1,035 Accounts payable 12,402 13,462 Accrued salaries and related expenses 1,934 2,426 Sales taxes payable 640 848 Deferred revenue 3,173 3,596 Current installments of long-term debt 1,224 2,447 Current operating lease liabilities 942 830 Other accrued expenses 3,965 4,049 Total current liabilities 24,280 28,693 Long-term debt, excluding current installments 41,740 36,604 Long-term operating lease liabilities 5,807 5,353 Other long-term liabilities 3,741 2,922 Total liabilities 75,568 73,572 Common stock, par value $ 0.05 ; authorized: 10,000 shares; issued: 1,793 shares at October 30, 2022 and 1,792 shares at January 30, 2022; outstanding: 1,020 shares at October 30, 2022 and 1,035 shares at January 30, 2022 90 90 Paid-in capital 12,385 12,132 Retained earnings 75,467 67,580 Accumulated other comprehensive loss ( 856 ) ( 704 ) Treasury stock, at cost, 773 shares at October 30, 2022 and 757 shares at January 30, 2022 ( 85,788 ) ( 80,794 ) Total stockholders’ equity (deficit) 1,298 ( 1,696 ) Total liabilities and stockholders’ equity $ 76,866 $ 71,876 See accompanying notes to consolidated financial statements. 1 Table of Contents THE HOME DEPOT, INC. CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited) Three Months Ended Nine Months Ended in millions, except per share data October 30, 2022 October 31, 2021 October 30, 2022 October 31, 2021 Net sales $ 38,872 $ 36,820 $ 121,572 $ 115,438 Cost of sales 25,648 24,257 80,720 76,468 Gross profit 13,224 12,563 40,852 38,970 Operating expenses: Selling, general and administrative 6,468 6,168 19,735 18,975 Depreciation and amortization 608 600 1,830 1,780 Total operating expenses 7,076 6,768 21,565 20,755 Operating income 6,148 5,795 19,287 18,215 Interest and other (income) expense: Interest income and other, net ( 7 ) ( 15 ) ( 12 ) ( 26 ) Interest expense 413 341 1,166 1,006 Interest and other, net 406 326 1,154 980 Earnings before provision for income taxes 5,742 5,469 18,133 17,235 Provision for income taxes 1,403 1,340 4,390 4,154 Net earnings $ 4,339 $ 4,129 $ 13,743 $ 13,081 Basic weighted average common shares 1,020 1,049 1,024 1,059 Basic earnings per share $ 4.25 $ 3.94 $ 13.42 $ 12.35 Diluted weighted average common shares 1,023 1,053 1,028 1,063 Diluted earnings per share $ 4.24 $ 3.92 $ 13.37 $ 12.31 See accompanying notes to consolidated financial statements. 2 Table of Contents THE HOME DEPOT, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) Three Months Ended Nine Months Ended in millions October 30, 2022 October 31, 2021 October 30, 2022 October 31, 2021 Net earnings $ 4,339 $ 4,129 $ 13,743 $ 13,081 Other comprehensive income (loss), net of tax: Foreign currency translation adjustments ( 187 ) ( 20 ) ( 158 ) 35 Cash flow hedges 3 3 6 7 Other — — — 27 Total other comprehensive income (loss), net of tax ( 184 ) ( 17 ) ( 152 ) 69 Comprehensive income $ 4,155 $ 4,112 $ 13,591 $ 13,150 See accompanying notes to consolidated financial statements. 3 Table of Contents THE HOME DEPOT, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited) Three Months Ended Nine Months Ended in millions October 30, 2022 October 31, 2021 October 30, 2022 October 31, 2021 Common Stock: Balance at beginning of period $ 90 $ 90 $ 90 $ 89 Shares issued under employee stock plans — — — 1 Balance at end of period 90 90 90 90 Paid-in Capital: Balance at beginning of period 12,309 11,797 12,132 11,540 Shares issued under employee stock plans ( 2 ) 18 ( 21 ) 50 Stock-based compensation expense 78 74 274 299 Balance at end of period 12,385 11,889 12,385 11,889 Retained Earnings: Balance at beginning of period 73,074 63,560 67,580 58,134 Net earnings 4,339 4,129 13,743 13,081 Cash dividends ( 1,946 ) ( 1,738 ) ( 5,856 ) ( 5,264 ) Balance at end of period 75,467 65,951 75,467 65,951 Accumulated Other Comprehensive Income (Loss): Balance at beginning of period ( 672 ) ( 585 ) ( 704 ) ( 671 ) Foreign currency translation adjustments, net of tax ( 187 ) ( 20 ) ( 158 ) 35 Cash flow hedges, net of tax 3 3 6 7 Other, net of tax — — — 27 Balance at end of period ( 856 ) ( 602 ) ( 856 ) ( 602 ) Treasury Stock: Balance at beginning of period ( 84,564 ) ( 72,793 ) ( 80,794 ) ( 65,793 ) Repurchases of common stock ( 1,224 ) ( 3,500 ) ( 4,994 ) ( 10,500 ) Balance at end of period ( 85,788 ) ( 76,293 ) ( 85,788 ) ( 76,293 ) Total stockholders' equity $ 1,298 $ 1,035 $ 1,298 $ 1,035 See accompanying notes to consolidated financial statements. 4 Table of Contents THE HOME DEPOT, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Nine Months Ended in millions October 30, 2022 October 31, 2021 Cash Flows from Operating Activities: Net earnings $ 13,743 $ 13,081 Reconciliation of net earnings to net cash provided by operating activities: Depreciation and amortization 2,216 2,128 Stock-based compensation expense 286 312 Changes in receivables, net ( 312 ) ( 533 ) Changes in merchandise inventories ( 3,748 ) ( 3,871 ) Changes in other current assets ( 568 ) ( 375 ) Changes in accounts payable and accrued expenses ( 1,568 ) 1,918 Changes in deferred revenue ( 413 ) 672 Changes in income taxes payable 30 ( 10 ) Changes in deferred income taxes 129 ( 73 ) Other operating activities 226 137 Net cash provided by operating activities 10,021 13,386 Cash Flows from Investing Activities: Capital expenditures ( 2,216 ) ( 1,737 ) Payments for businesses acquired, net — ( 416 ) Other investing activities ( 29 ) 21 Net cash used in investing activities ( 2,245 ) ( 2,132 ) Cash Flows from Financing Activities: Repayments of short-term debt, net ( 1,035 ) — Proceeds from long-term debt, net of discounts 6,942 2,979 Repayments of long-term debt ( 2,423 ) ( 1,480 ) Repurchases of common stock ( 5,136 ) ( 10,374 ) Proceeds from sales of common stock 146 190 Cash dividends ( 5,856 ) ( 5,264 ) Other financing activities ( 185 ) ( 160 ) Net cash used in financing activities ( 7,547 ) ( 14,109 ) Change in cash and cash equivalents 229 ( 2,855 ) Effect of exchange rate changes on cash and cash equivalents ( 110 ) 27 Cash and cash equivalents at beginning of period 2,343 7,895 Cash and cash equivalents at end of period $ 2,462 $ 5,067 Supplemental Disclosures: Cash paid for interest, net of interest capitalized $ 1,160 $ 1,021 Cash paid for income taxes 4,173 4,170 See accompanying notes to consolidated financial statements. 5 Table of Contents THE HOME DEPOT, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Business The Home Depot, Inc., together with its subsidiaries (the “Company,” “Home Depot,” “we,” “our” or “us”), is a home improvement retailer that sells a wide assortment of building materials, home improvement products, lawn and garden products, décor items, and facilities maintenance, repair and operations products, and provides a number of services, in stores and online. We operate in the U.S. (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 the similar nature of their operations and economic characteristics. Basis of Presentation The accompanying consolidated financial statements of the Company have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Results of operations for interim periods are not necessarily indicative of results for the entire year. As a result, these consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our 2021 Form 10-K. There were no significant changes to our significant accounting policies as disclosed in the 2021 Form 10-K. 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 ASU No. 2022-04. 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. ASU No. 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. 6 Table of Contents 2. NET SALES The following table presents net sales, classified by geography: Three Months Ended Nine Months Ended in millions October 30, 2022 October 31, 2021 October 30, 2022 October 31, 2021 Net sales – in the U.S. $ 35,784 $ 33,736 $ 111,834 $ 106,095 Net sales – outside the U.S. 3,088 3,084 9,738 9,343 Net sales $ 38,872 $ 36,820 $ 121,572 $ 115,438 The following table presents net sales by products and services: Three Months Ended Nine Months Ended in millions October 30, 2022 October 31, 2021 October 30, 2022 October 31, 2021 Net sales – products $ 37,448 $ 35,383 $ 117,261 $ 111,371 Net sales – services 1,424 1,437 4,311 4,067 Net sales $ 38,872 $ 36,820 $ 121,572 $ 115,438 The following table presents major product lines and the related merchandising departments (and related services): 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 The following table presents net sales by major product lines (and related services): Three Months Ended Nine Months Ended in millions October 30, 2022 October 31, 2021 October 30, 2022 October 31, 2021 Building Materials $ 15,343 $ 13,809 $ 46,095 $ 41,880 Décor 13,070 12,783 40,040 38,060 Hardlines 10,459 10,228 35,437 35,498 Net sales $ 38,872 $ 36,820 $ 121,572 $ 115,438 Deferred Revenue For products and services sold in stores or online, payment is typically due at the point of sale. When we receive payment from customers before the customer has taken possession of the merchandise or the service has been performed, the amount received is recorded as deferred revenue until the sale or service is complete. Such performance obligations are part of contracts with expected original durations of typically three months or less. 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 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. 3. PROPERTY AND LEASES Net Property and Equipment 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. 7 Table of Contents Leases 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 October 30, 2022 January 30, 2022 Assets: Operating lease assets Operating lease right-of-use assets $ 6,523 $ 5,968 Finance lease assets (1) Net property and equipment 2,890 2,896 Total lease assets $ 9,413 $ 8,864 Liabilities: Current: Operating lease liabilities Current operating lease liabilities $ 942 $ 830 Finance lease liabilities Current installments of long-term debt 224 198 Long-term: Operating lease liabilities Long-term operating lease liabilities 5,807 5,353 Finance lease liabilities Long-term debt, excluding current installments 3,038 3,038 Total lease liabilities $ 10,011 $ 9,419 ————— (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: Nine Months Ended in millions October 30, 2022 October 31, 2021 Lease assets obtained in exchange for new operating lease liabilities $ 1,308 $ 637 Lease assets obtained in exchange for new finance lease liabilities 234 581 4. DEBT AND DERIVATIVE INSTRUMENTS Short-Term Debt 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 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. In July 2022, we also expanded the borrowing capacity under these back-up facilities from $ 3.0 billion to $ 5.0 billion, by entering into a five-year $ 3.5 billion credit facility scheduled to expire in July 2027 and a 364 -day $ 1.5 billion credit facility scheduled to expire in July 2023. 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 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. 8 Table of Contents • 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 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. On or after the Par Call Date, the redemption price is equal to 100 % of the principal amount of the notes. Additionally, if a Change in Control Triggering Event occurs, as defined in the notes, holders of all such notes have the right to require us to redeem those notes at 101 % of the aggregate principal amount of the notes plus accrued interest up to the redemption date. The indenture governing the notes does not generally limit our ability to incur additional indebtedness or require us to maintain financial ratios or specified levels of net worth or liquidity. The indenture governing the notes contains various customary covenants; however, none are expected to impact our liquidity or capital resources. Repayments . In March 2022, we repaid our $ 700 million 3.25 % senior notes and $ 300 million floating rate senior notes at maturity. In May 2022, we repaid our $ 1.25 billion 2.625 % senior notes, which had a maturity date of June 2022, at the Par Call Date for the notes. Derivative Instruments and Hedging Activities 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 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. All of our interest rate swap agreements designated as fair value hedges meet the shortcut method requirements under GAAP. Accordingly, the changes in the fair values of these agreements offset the changes in the fair value of the hedged long-term debt. There were no material changes to the other hedging arrangements disclosed in our 2021 Form 10-K, and all related activity was immaterial for the periods presented within this document. Collateral . We generally enter into master netting arrangements, which are designed to reduce credit risk by permitting net settlement of transactions with the same counterparty. 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 $ 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. 9 Table of Contents 5. STOCKHOLDERS' EQUITY Stock Rollforward 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 October 30, 2022 October 31, 2021 October 30, 2022 October 31, 2021 Common stock: Balance at beginning of period 1,793 1,791 1,792 1,789 Shares issued under employee stock plans — — 1 2 Balance at end of period 1,793 1,791 1,793 1,791 Treasury stock: Balance at beginning of period ( 769 ) ( 735 ) ( 757 ) ( 712 ) Repurchases of common stock ( 4 ) ( 10 ) ( 16 ) ( 33 ) Balance at end of period ( 773 ) ( 745 ) ( 773 ) ( 745 ) Shares outstanding at end of period 1,020 1,046 1,020 1,046 Cash dividends per share $ 1.90 $ 1.65 $ 5.70 $ 4.95 Share Repurchases 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: in millions Three Months Ended Nine Months Ended October 30, 2022 October 31, 2021 October 30, 2022 October 31, 2021 Total number of shares repurchased 4 10 16 33 Total cost of shares repurchased $ 1,224 $ 3,500 $ 4,994 $ 10,500 These amounts may differ from the repurchases of common stock amounts in the consolidated statements of cash flows due to unsettled share repurchases at the end of a period. 6. FAIR VALUE MEASUREMENTS The fair value of an asset is considered to be the price at which the asset could be sold in an orderly transaction between unrelated knowledgeable and willing parties. A liability’s fair value is defined as the amount that would be paid to transfer the liability to a new obligor, rather than the amount that would be paid to settle the liability with the creditor. Assets and liabilities recorded at fair value are measured using a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The levels of the fair value hierarchy are: • Level 1: observable inputs such as quoted prices in active markets for identical assets or liabilities; • Level 2: inputs other than quoted prices in active markets in Level 1 that are either directly or indirectly observable; and • Level 3: unobservable inputs for which little or no market data exists, therefore requiring management judgment to develop the Company’s own models with estimates and assumptions. 10 Table of Contents Assets and Liabilities Measured at Fair Value on a Recurring Basis The following table presents the assets and liabilities that are measured at fair value on a recurring basis: October 30, 2022 January 30, 2022 in millions Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Derivative agreements – assets $ — $ — $ — $ — $ 58 $ — Derivative agreements – liabilities — ( 977 ) — — ( 249 ) — Total $ — $ ( 977 ) $ — $ — $ ( 191 ) $ — The fair values of our derivative instruments are determined using an income approach and Level 2 inputs, which include the respective interest rate or foreign currency forward curves and discount rates. Our derivative instruments are discussed further in Note 4 . Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis Long-lived assets, goodwill, and other intangible assets are subject to nonrecurring fair value measurement for the assessment of impairment. 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 The carrying amounts of cash and cash equivalents, receivables, accounts payable, and short-term debt approximate fair value due to their short-term nature. The following table presents the aggregate fair values and carrying values of our senior notes: October 30, 2022 January 30, 2022 in millions Fair Value (Level 1) Carrying Value Fair Value (Level 1) Carrying Value Senior notes $ 35,453 $ 39,702 $ 39,397 $ 35,815 7. WEIGHTED AVERAGE COMMON SHARES The following table presents the reconciliation of our basic to diluted weighted average common shares: in millions Three Months Ended Nine Months Ended October 30, 2022 October 31, 2021 October 30, 2022 October 31, 2021 Basic weighted average common shares 1,020 1,049 1,024 1,059 Effect of potentially dilutive securities (1) 3 4 4 4 Diluted weighted average common shares 1,023 1,053 1,028 1,063 Anti-dilutive securities excluded from diluted weighted average common shares 1 — 1 — ————— (1) Represents the dilutive impact of stock-based awards. 8. CONTINGENCIES We are involved in litigation arising in the normal course of business. In management’s opinion, any such litigation is not expected to have a material adverse effect on our consolidated financial condition, results of operations or cash flows. 11 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders and Board of Directors The Home Depot, Inc.: Results of Review of Interim Financial Information We have reviewed the consolidated balance sheet of The Home Depot, Inc. 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. generally accepted accounting principles. We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated balance sheet of the Company as of January 30, 2022, and the related consolidated statements of earnings, comprehensive income, stockholders’ equity, and cash flows for the fiscal year then ended (not presented herein); and in our report dated March 23, 2022, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet as of January 30, 2022, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived. Basis for Review Results This consolidated interim financial information is the responsibility of the Company’s management. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our reviews in accordance with the standards of the PCAOB. A review of consolidated interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. /s/ KPMG LLP Atlanta, Georgia November 21, 2022 12 Table of Contents